DIVISION

[ GR No. L-35851, Oct 08, 1974 ]

MARCELO STEEL CORPORATION v. CA

DECISION
158 Phil. 375

BARREDO, J.:
Petition for certiorari and mandamus against the resolution of the Court of Appeals in CA-G.R. No.
49342-R, Petra Farin, et al. vs. Benito Macrohon, et al., denying the motion of private respondents
therein (herein petitioners) to dismiss the appeal of therein petitioners (herein private respondents)
upon the ground that the latter's record on appeal does not contain any statement to the effect that an
appeal bond has been filed by them, contrary to the requirement of Section 6 of Rule 41 and the
consistent jurisprudence of this Court interpretative thereof to the effect that such omission is a fatal
jurisdictional defect.

In resolving herein petitioners' motion to dismiss, the Court of Appeals held:

"There is likewise no question that in her Opposition to the Motion to Dismiss appellant herein
admits that there is no mention in the Record on Appeal regarding the fact that an appeal bond was
filed on time. But counsel for appellant argues that that fact appears on the face of the record of the
case, as evidenced by a certification of the City Treasurer of Quezon City (copy attached to the
opposition as Annex A) to the effect that petitioner-appellants' cash bond was actually filed on
October 30, 1970, simultaneously with the filing of petitioners-appellants' Notice of Appeal.
Appellants' counsel further contends that 'obviously because said cash appeal bond was filed
simultaneously with the Notice of Appeal, the undersigned counsel, through oversight, failed to
state or make mention of the filing of the said cash appeal bond in the record.'

"Appellant also calls attention to a petition for certiorari with preliminary injunction docketed with
this Court as CA-G.R. No. 47519-R entitled Petra R. Farin, et al., vs. Hon. Walfrido de los Angeles,
et al., in which a decision was promulgated by this Court on August 20, 1971.

"One of the reasons for Section 3, Rule 41 is to appraise the appellate court whether an appeal is
seasonably filed or not. The purpose of adding the clause 'together with such data as will show that
the appeal was perfected on time' was 'to avoid disputes in the appellate court concerning the fact of
the perfection of the appeal.' (Araneta vs. Madrigal, G.R. No. 26227-28, Oct. 25, 1966).

"Now, it is to be noted that in the petition for certiorari above-mentioned the private parties were
the same as appellants and appellees herein. Paragraphs 8 and 9 thereof contained the following
allegations:
'8) That on October 15, 1970, petitioners thru counsel, received a copy of the decision of the
respondent judge;

'9) That on October 30, 1970, petitioner filed their Notice of Appeal from the said decision,
together with their Appeal Bond and Record on Appeal. ([Petition, dated February 22, 1971, p.
3, Italics supplied)

"Respondents therein, Honorable Judge Walfrido de los Angeles, Sheriff Benito Macrohon (now
Leonides F. Villasenor) and Marcelo Steel Corporation, in par. 1 of their Answer, averred:

'Admissions

1. That, respondents admit . . . the allegations in paragraphs 3, 4, 6, 7, 9, 10, 11, 12, 13, 14, 15, 17,
18, of the petition.' (Answer dated March 1, 1971, pp. 1-2; note underscore)

There is no specific admission of petitioner's par. 8, but neither is there any specific denial thereof.

In consonance with the petitioner's allegations and respondents 'Admissions' (above) this Court, in
its statement of the case said:

'On Oct. 30, 1970, petitioners filed their notice of appeal, appeal bond and record on appeal. . .' (p.
4, Decision, in CA-G.R. No. 47519-R)

Under the circumstances, therefore, it cannot be said that this Court has no way of determining whether
the present appeal is seasonably filed inasmuch as it has not only been appraised thereof in the petition
for certiorari but it has even made a clear, unequivocal pronouncement based on the admissions in the
pleadings in that case, that all the requisites of a valid appeal have been complied with. Judicial
admissions contained in pleadings bind the parties and the principle of estoppel operates. Hence, there
would be no justification to dismiss this appeal for failure to state in the Record on Appeal a fact about
which there can no longer be any dispute inasmuch as it has already been judicially admitted in the
pleadings of C.A. G.R. No. 47519-R."

Under the facts thus found by the appellate court, We are more inclined to hold that the present petition
cannot prosper'. Prescinding from the other grounds discussed in the impugned resolution, which We do
not deem necessary to pass upon in this decision, We are of the considered view that the Court of Appeals
did not in anyway abuse its discretion, but, on the contrary, acted in accordance with law in refusing to
dismiss the appeal of the Farins.

Indeed, the main purpose of the rules requiring that a record on appeal should show on its face, by means
of statements of the corresponding specific data, that the notice of appeal, the appeal bond and the
record itself have been filed on time is to enable the appellate court to determine on the basis of the
record on appeal itself and without the need of any independent evidence, that the appeal has been made
on time. To allow the parties to indulge in a controversy regarding the timeliness of the appeal and to
present their respective conflicting evidence on that point, which could take much of the time of the court
that it could otherwise devote to the disposition of other cases demanding its attention, is detrimental to
the interests of justice and contrary to the public policy intended to be served by the provision in
question. But, as illustrated in the circumstances of the case at bar, there could be instances when the
timeliness of an appeal is a matter which the court can take judicial notice of and consequently, it would
be inconceivable that any controversy between the parties in respect thereto could arise. In such
instances, the court is no longer supposed to receive any conflicting evidence. It would be bound by what
it has judicial notice of and none of the parties may be permitted to prove the contrary. In the words of
Chief Justice Moran, "Where a fact is one of which the court may judicially take notice, no proof thereof
is necessary. The maxim is 'what is known need not be prove.' Judicial notice takes the place of proof and
is of equal force. As a means of establishing facts it is therefore superior to evidence. In its appropriate
field it displaces evidence since, as it stands for proof, it fullfills the object which the evidence is designed
to fulfill and makes evidence unnecessary. (Beardsley vs. Irving, 81 Conn. 489, 81 A., 580; State vs.
Main, 69 Conn., 123, L.R.A. 623.) Indeed, it is frequently said that neither averment, nor proof or
admission, will prevail against matters which are judicially known to the court. (Alzua vs. Johnson, 21
Phil. 308; Jones vs. United States, 137 U.S. 202; Graves vs. Kelly, 62 Ind. A., 164, 112 N.E. 899, 901;
Charles Boldt Co. vs. Turner Bros. Co., 199 Fed. 139; Davis vs. Southern Ry. Co., 170 N.C., 582, 87 S.E.
745,)." (Moran, Rules of Court, Vol. 5, p. 39.)

In the light of these considerations, the reason behind the subject rule is not in any sense violated when,
as in the case at bar, the appellate court relies on what it has judicial notice of in determining whether or
not appellants filed an appeal bond on time. When a matter of fact supposed to be proven to the court is
one capable of being taken judicial notice of, being already known to the court because it has already
been proven or was undisputed or judicially admitted in a related proceeding before it, it would be the
height of absurdity and contrary to one's sense of justice and propriety to still require the parties to
reopen the issue and litigate relative to the same matter all over again. Both upon principle and
pragmatic considerations, courts are not supposed to ignore facts that the same parties have in a related
case considered as beyond dispute or no longer subject to proof. Any other ruling would only give
occasion to the court to arrive at contradictory findings on points which the parties themselves may not
controvert without being inconsistent and unfair. In other words, Section 6 of Rule 41 and the
jurisprudence cited by petitioners have no application to the situation obtaining in this case. The view
We have taken here does not constitute a relaxation, much less a modification of the standing rulings of
this Court invoked by petitioners.
Before closing it is necessary to state here that this case is related somehow to the other cases pending in
this Court the same parties, namely G. R. Nos. L-34317 and 34335. To avoid any misconception or
misunderstanding, it is here made clear that the result of the instant case has no bearing whatsoever on
the outcome of the cases just mentioned and vice versa.

IN VIEW OF ALL THE FOREGOING, the petition is dismissed, with costs against petitioners.

Fernando, Chairman, Antonio, Fernandez and Aquino, JJ., concur.

EN BANC

[ GR No. 178830, Jul 14, 2008 ]

ROLEX SUPLICO v. NATIONAL ECONOMIC

RESOLUTION
580 Phil. 301

REYES, R.T., J.:

[1]
Under consideration is the Manifestation and Motion dated October 26, 2007 of the Office of the
Solicitor General (OSG) which states:
The Office of the Solicitor General (OSG) respectfully avers that in an Indorsement dated October
24, 2007, the Legal Service of the Department of Transportation and Communications (DOTC) has
informed it of the Philippine Government's decision not to continue with the ZTE National
Broadband Network Project (see attachment[2]). That said, there is no more justiciable controversy
for this Honorable Court to resolve. WHEREFORE, public respondents respectfully pray that the
present petitions be DISMISSED.

On November 13, 2007, the Court noted the OSG's manifestation and motion and required petitioners in
G.R. Nos. 178830, 179317, and 179613 to comment.

On December 6, 2007, Rolex Suplico, petitioner in G.R. No. 178830, filed his Consolidated Reply and
[3]
Opposition, opposing the aforequoted OSG Manifestation and Motion, arguing that:
66. Aside from the fact that the Notes of the Meeting Between President Gloria Macapagal-
Arroyo and Chinese President Hu Jintao held 2 October 2007 were not attached to the 26
October 2007 Manifestation and Motion - thus depriving petitioners of the opportunity to
comment thereon - a mere verbally requested 1st Indorsement is not sufficient basis for the
conclusion that the ZTE-DOTC NBN deal has been permanently scrapped.

67. Suffice to state, said 1st Indorsement is glaringly self-serving, especially without the Notes of
the Meeting Between President Gloria Macapagal-Arroyo and Chinese President Hu Jintao to
support its allegations or other proof of the supposed decision to cancel the ZTE-DOTC NBN
deal. Public respondents can certainly do better than that.[4]

Petitioner Suplico further argues that:

79. Assuming arguendo that some aspects of the present Petition have been rendered moot (which
is vehemently denied), this Honorable Court, consistent with well-entrenched jurisprudence,
may still take cognizance thereof.[5]

[6] [7]
Petitioner Suplico cites this Court's rulings in Gonzales v. Chavez, Rufino v. Endriga, and Alunan
[8]
III v. Mirasol that despite their mootness, the Court nevertheless took cognizance of these cases and
ruled on the merits due to the Court's symbolic function of educating the bench and the bar by
formulating guiding and controlling principles, precepts, doctrines, and rules.
On January 31, 2008, Amsterdam Holdings, Inc. (AHI) and Nathaniel Sauz, petitioners in G.R. No.
179317, also filed their comment expressing their sentiments, thus:
3. First of all, the present administration has never been known for candor. The present
administration has a very nasty habit of not keeping its word. It says one thing, but does
another.

4. This being the case, herein petitioners are unable to bring themselves to feel even a bit
reassured that the government, in the event that the above-captioned cases are dismissed, will
not backtrack, re-transact, or even resurrect the now infamous NBN-ZTE transaction. This is
especially relevant since what was attached to the OSG's Manifestation and Motion was a mere
one (1) page written communication sent by the Department of Transportation and
Communications (DOTC) to the OSG, allegedly relaying that the Philippine Government has
decided not to continue with the NBN project "x x x due to several reasons and
constraints."

Petitioners AHI and Sauz further contend that because of the transcendental importance of the issues
raised in the petition, which among others, included the President's use of the power to borrow, i.e., to
enter into foreign loan agreements, this Court should take cognizance of this case despite its apparent
mootness.

On January 15, 2008, the Court required the OSG to file respondents' reply to petitioners' comments on
its manifestation and motion.

On April 18, 2008, the OSG filed respondents' reply, reiterating their position that for a court to exercise
its power of adjudication, there must be an actual case or controversy - one which involves a conflict of
legal rights, an assertion of opposite legal claims susceptible of judicial resolution; the case must not be
moot or academic or based on extra-legal or other similar considerations not cognizable by a court of
justice.[9]

Respondents also insist that there is no perfected contract in this case that would prejudice the
government or public interest. Explaining the nature of the NBN Project as an executive agreement,
respondents stress that it remained in the negotiation stage. The conditions precedent[10] for the
agreement to become effective have not yet been complied with.

Respondents further oppose petitioners' claim of the right to information, which they contend is not an
absolute right. They contend that the matters raised concern executive policy, a political question which
the judicial branch of government would generally hesitate to pass upon.

On July 2, 2008, the OSG filed a Supplemental Manifestation and Motion. Appended to it is the
Highlights from the Notes of Meeting between President Gloria Macapagal-Arroyo and Chinese President
Hu Jintao, held in XI Jiao Guesthouse, Shanghai, China, on October 2, 2007. In the Notes of Meeting,
the Philippine Government conveyed its decision not to continue with the ZTE National Broadband
Network Project due to several constraints. The same Notes likewise contained President Hu Jintao's
expression of understanding of the Philippine Government decision.

We resolve to grant the motion.

Firstly, the Court notes the triple petitions to be for certiorari, prohibition and mandamus, with
application for the issuance of a Temporary Restraining Order (TRO) and/or Preliminary Injunction.
The individual prayers in each of the three (3) consolidated petitions are:
G.R. No. 178830

WHEREFORE, it is respectfully prayed of this Honorable Court:

1. Upon the filing of this Petition, pursuant to the second paragraph of Rule 58, Section 5 of
the Rules of Court, issue forthwith an ex parte temporary restraining order enjoining
respondents, their subordinates, agents, representatives and any and all persons acting
on their behalf from pursuing, entering into indebtedness, disbursing funds,
and implementing the ZTE-DOTC Broadband Deal;

2. Compel respondents, upon Writ of Mandamus, to forthwith produce and furnish

petitioner or his undersigned counsel a certified true copy of the contract or
agreement covering the NBN project as agreed upon with ZTE Corporation;

3. Schedule Oral Arguments in the present case pursuant to Rule 49 in relation to Section 2,
Rule 56 of the revised Rules of Court; and,

4. Annul and set aside the award of the ZTE-DOTC Broadband Deal, and compel
public respondents to forthwith comply with pertinent provisions of law regarding
procurement of government ICT contracts and public bidding for the NBN contract.[11]
(Emphasis supplied)

G.R. No. 179317

WHEREFORE, petitioners Amsterdam Holdings, Inc., and Nathaniel Sauz respectfully pray as
follows:
A. upon the filing of this Petition for Mandamus and conditioned upon the posting of a bond
in such amount as the Honorable Court may fix, a temporary restraining order and/or
writ of preliminary injunction be issued directing the Department of
Transportation and Communication, the Commission on Information and
Communications Technology, all other government agencies and instrumentalities, their
officers, employees, and/or other persons acting for and on their behalf to desist during
the pendency of the instant Petition for Mandamus from entering into any other
agreements and from commencing with any kind, sort, or specie of activity in
connection with the National Broadband Network Project;

B. the instant Petition for Mandamus be given due course; and,

C. after due consideration of all relevant issues, judgment be rendered directing respondents
to allow herein petitioners access to all agreements entered into with the Government of
China, the ZTE Corporation, and/or other entities, government instrumentalities, and/or
individuals with regard to the National Broadband Network Project.[12] (Emphasis
supplied)

G.R. No. 179613

WHEREFORE, it is respectfully prayed of this Honorable Court to:

1. Compel respondents, upon Writ of Mandamus, to forthwith produce and furnish
petitioner or his undersigned counsel a certified true copy of the contract or
agreement covering the NBN project as agreed upon with ZTE Corporation;

2. Schedule Oral Arguments in the present case pursuant to Rule 49 in relation to Section 2,
Rule 56 of the Revised Rules of Court;

3. Annul and set aside the award of the contract for the national broadband
network to respondent ZTE Corporation, upon the ground that said contract, as
well as the procedures resorted to preparatory to the execution thereof, is contrary to the
Constitution, to law and to public policy;

4. Compel public respondent to forthwith comply with pertinent provisions of

law regarding procurement of government infrastructure projects, including
public bidding for said contract to undertake the construction of the national broadband
[13]
network. (Emphasis supplied)

[14]
On September 11, 2007, the Court issued a TRO in G.R. No. 178830, enjoining the parties from
"pursuing, entering into indebtedness, disbursing funds, and implementing the ZTE-DOTC Broadband
Deal and Project" as prayed for. Pertinent parts of the said Order read:
WHEREAS, the Supreme Court, on 11 September 2007, adopted a resolution in the above-entitled
case, to wit:
"G.R. No. 178830 (Rolex Suplico vs. National Economic and Development Authority,
represented by NEDA Secretary Romulo L. Neri, and the NEDA Investment Coordination
Committee, Department of Transportation and Communications (DOTC), represented by
DOTC Secretary Leandro Mendoza, including the Commission on Information and
Communications Technology, headed by its Chairman, Ramon P. Sales, The
Telecommunications Office, Bids and Awards for Information and Communications
Technology Committee (ICT), headed by DOTC Assistant Secretary Elmer A. Soneja as
Chairman, and The Technical Working Group for ICT, and DOTC Assistant Secretary Lorenzo
Formoso, and All Other Operating Units of the DOTC for Information and Communications
Technology, and ZTE Corporation, Amsterdam Holdings, Inc., and ARESCOM, Inc.--Acting on
the instant petition with prayer for temporary restraining order and/or writ of preliminary
injunction, the Court Resolved, without giving due course to the petition, to
xxxx

(d) Issue a TEMPORARY RESTRAINING ORDER, effective immediately and continuing

until further orders from this Court, enjoining the (i) National Economic and
Development Authority, (ii) NEDA-Investment Coordination Committee, (iii)
Department of Transportation and Communications, Commission on Information and
Communications Technology, (iv) Telecommunications Office, Bids and Awards for
Information and Communications Technology Committee (ICT), (v) Technical Working
Group for ICT, and all other Operating Units of the DOTC for Information and
Communications Technology, (vi) ZTE Corporation; (vii) Amsterdam Holdings, Inc., and
(viii) ARESCOM, Inc., and any and all persons acting on their behalf from `pursuing,
entering into indebtedness, disbursing funds, and implementing the ZTE-DOTC
Broadband Deal and Project' as prayed for."

NOW THEREFORE, effective immediately and continuing until further orders from this Court, You,
Respondents (i) National Economic and Development Authority, (ii) NEDA-Investment
Coordination Committee, (iii) Department of Transportation and Communications, Commission on
Information and Communications Technology, (iv) Telecommunications Office, Bids and Awards
for Information and Communications Technology Committee (ICT), (v) Technical Working Group
for ICT, and all other Operating Units of the DOTC for Information and Communications
Technology, (vi) ZTE Corporation; (vii) Amsterdam Holdings, Inc., and (viii) ARESCOM, Inc., and
any and all persons acting on their behalf are hereby ENJOINED from "pursuing, entering
into indebtedness, disbursing funds, and implementing the ZTE-DOTC Broadband
[15]
Deal and Project" as prayed for. (Emphasis supplied.)

Petitioners in G.R. Nos. 178830 and 179613 pray that they be furnished certified true copies of the
"contract or agreement covering the NBN project as agreed upon with ZTE Corporation." It appears that
during one of the Senate hearings on the NBN project, copies of the supply contract[16] were readily
made available to petitioners.[17] Evidently, the said prayer has been complied with and is, thus,
mooted.

When President Gloria Macapagal-Arroyo, acting in her official capacity during the meeting held on
October 2, 2007 in China, informed China's President Hu Jintao that the Philippine Government had
decided not to continue with the ZTE-National Broadband Network (ZTE-NBN) Project due to several
reasons and constraints, there is no doubt that all the other principal prayers in the three
petitions (to annul, set aside, and enjoin the implementation of the ZTE-NBN Project) had also
become moot.

Contrary to petitioners' contentions that these declarations made by officials belonging to the executive
branch on the Philippine Government's decision not to continue with the ZTE-NBN Project are self-
serving, hence, inadmissible, the Court has no alternative but to take judicial notice of this official act of
the President of the Philippines.

Section 1, Rule 129 of the Rules of Court provides:

SECTION 1. Judicial Notice, when mandatory. - A court shall take judicial notice, without
introduction of evidence, of the existence and territorial extent of states, their political history,
forms of government and symbols of nationality, the law of nations, the admiralty and maritime
courts of the world and their seals, the political constitution and history of the Philippines, the
official acts of the legislative, executive and judicial departments of the Philippines, the
laws of nature, the measure of time, and the geographical divisions. (Emphasis supplied)

Under the rules, it is mandatory and the Court has no alternative but to take judicial notice of the
official acts of the President of the Philippines, who heads the executive branch of our government. It is
further provided in the above-quoted rule that the court shall take judicial notice of the foregoing facts
without introduction of evidence. Since we consider the act of cancellation by President
Macapagal-Arroyo of the proposed ZTE-NBN Project during the meeting of October 2, 2007 with the
Chinese President in China as an official act of the executive department, the Court must take
judicial notice of such official act without need of evidence.

In David v. Macapagal-Arroyo,[18] We took judicial notice of the announcement by the Office of the
President banning all rallies and canceling all permits for public assemblies following the issuance of
Presidential Proclamation No. 1017 and General Order No. 5.

In Estrada v. Desierto,[19] the Court also resorted to judicial notice in resolving the factual ingredient of
the petition.

Moreover, under Section 2, paragraph (m) of Rule 131 of the Rules of Court, the official duty of the
executive officials[20] of informing this Court of the government's decision not to continue with the ZTE-
NBN Project is also presumed to have been regularly performed, absent proof to the contrary.
Other than petitioner AHI's unsavory insinuation in its comment, the Court finds no factual or legal basis
to disregard this disputable presumption in the present instance.

Concomitant to its fundamental task as the ultimate citadel of justice and legitimacy is the judiciary's role
of strengthening political stability indispensable to progress and national development. Pontificating on
issues which no longer legitimately constitute an actual case or controversy will do more harm than good
to the nation as a whole. Wise exercise of judicial discretion militates against resolving the academic
issues, as petitioners want this Court to do. This is especially true where, as will be further discussed, the
legal issues raised cannot be resolved without previously establishing the factual basis or antecedents.

Judicial power presupposes actual controversies, the very antithesis of mootness. In the absence of
actual justiciable controversies or disputes, the Court generally opts to refrain from deciding moot
issues. Where there is no more live subject of controversy, the Court ceases to have a reason to render
any ruling or make any pronouncement.

Kapag wala nang buhay na kaso, wala nang dahilan para magdesisyon ang Husgado.

In Republic Telecommunications Holdings, Inc. v. Santiago,[21] the lone issue tackled by the Court of
Appeals (CA) was whether the Securities Investigation and Clearing Department (SICD) and Securities
and Exchange Commission (SEC) en banc committed reversible error in issuing and upholding,
respectively, the writ of preliminary injunction. The writ enjoined the execution of the questioned
agreements between Qualcomm, Inc. and Republic Telecommunications Holdings, Inc. (RETELCOM).
The implementation of the agreements was restrained through the assailed orders of the SICD and the
SEC en banc which, however, were nullified by the CA decision. Thus, RETELCOM elevated the matter
to this Court praying for the reinstatement of the writ of preliminary injunction of the SICD and the SEC
en banc. However, before the matter was finally resolved, Qualcomm, Inc. withdrew from the
negotiating table. Its withdrawal had thwarted the execution and enforcement of the contracts. Thus,
the resolution of whether the implementation of said agreements should be enjoined became no longer
necessary.

Equally applicable to the present case is the Court ruling in the above-cited Republic
Telecommunications. There We held, thus:
Indeed, the instant petition, insofar as it assails the Court of Appeals' Decision nullifying the orders
of the SEC en banc and the SICD, has been rendered moot and academic. To rule, one way or the
other, on the correctness of the questioned orders of the SEC en banc and the SICD will be indulging
in a theoretical exercise that has no practical worth in view of the supervening event.

The rule is well-settled that for a court to exercise its power of adjudication, there must be an actual
case or controversy - one which involves a conflict of legal rights, an assertion of opposite legal
claims susceptible of judicial resolution; the case must not be moot or academic or based on extra-
legal or other similar considerations not cognizable by a court of justice. Where the issue has
become moot and academic, there is no justiciable controversy, and an adjudication thereon would
be of no practical use or value as courts do not sit to adjudicate mere academic questions to satisfy
scholarly interest, however intellectually challenging.

In the ultimate analysis, petitioners are seeking the reinstatement of the writ of injunction to
prevent the concerned parties from pushing through with transactions with Qualcomm, Inc. Given
that Qualcomm, Inc. is no longer interested in pursuing the contracts, there is no actual substantial
relief to which petitioners would be entitled and which would be negated by the dismissal of the
petition.

The Court likewise finds it unnecessary to rule whether the assailed Court of Appeals' Decision had
the effect of overruling the Court's Resolution dated 29 January 1999, which set aside the TRO
issued by the appellate court.

A ruling on the matter practically partakes of a mere advisory opinion, which falls beyond the realm
of judicial review. The exercise of the power of judicial review is limited to actual cases and
controversies. Courts have no authority to pass upon issues through advisory opinions or to resolve
hypothetical or feigned problems.

While there were occasions when the Court passed upon issues although supervening events had
rendered those petitions moot and academic, the instant case does not fall under the exceptional
cases. In those cases, the Court was persuaded to resolve moot and academic issues to formulate
guiding and controlling constitutional principles, precepts, doctrines or rules for future guidance of
both bench and bar.

In the case at bar, the resolution of whether a writ of preliminary injunction may be issued to
prevent the implementation of the assailed contracts calls for an appraisal of factual considerations
which are peculiar only to the transactions and parties involved in this controversy. Except for the
determination of whether petitioners are entitled to a writ of preliminary injunction which is now
moot, the issues raised in this petition do not call for a clarification of any constitutional principle or
[22]
the interpretation of any statutory provision.

Secondly, even assuming that the Court will choose to disregard the foregoing considerations and brush
aside mootness, the Court cannot completely rule on the merits of the case because the resolution of
the three petitions involves settling factual issues which definitely requires reception of
evidence. There is not an iota of doubt that this may not be done by this Court in the first
instance because, as has been stated often enough, this Court is not a trier of facts.

Ang pagpapasiya sa tatlong petisyon ay nangangailangan ng paglilitis na hindi gawain

ng Hukumang ito.
Respondent ZTE, in its Comment in G.R. No. 178830,[23] correctly pointed out that since petitioner
Suplico filed his petition directly with this Court, without prior factual findings made by any lower court,
a determination of pertinent and relevant facts is needed. ZTE enumerated some of these factual issues,
to wit:
Whether an executive agreement has been reached between the Philippine and Chinese
(1)
governments over the NBN Project;

Whether the ZTE Supply Contract was entered into by the Republic of the Philippines, through
(2) the DOTC, and ZTE International pursuant to, and as an integral part of, the executive
agreement;

(3) Whether a loan agreement for the NBN Project has actually been executed;

Whether the Philippine government required that the NBN Project be completed under a
(4)
Build-Operate-and-Transfer Scheme;

Whether the AHI proposal complied with the requirements for an unsolicited proposal under
(5)
the BOT Law;

Whether the Philippine government has actually earmarked public finds for disbursement
(6)
under the ZTE Supply Contract; and

Whether the coverage of the NBN Project to be supplied under the ZTE Supply Contract is
(7) more extensive than that under the AHI proposal or such other proposal submitted therefor.
[24]

Definitely, some very specific reliefs prayed for in both G.R. Nos. 178830 and 179613 require prior
determination of facts before pertinent legal issues could be resolved and specific reliefs granted.

In G.R. No. 178830, petitioner seeks to annul and set aside the award of the ZTE-DOTC Broadband
Deal and compel public respondents to forthwith comply with pertinent provisions of law regarding
procurement of government ICT contracts and public bidding for the NBN contract.

In G.R. No. 179613, petitioners also pray that the Court annul and set aside the award of the
contract for the national broadband network to respondent ZTE Corporation, upon the ground that said
contract, as well as the procedures resorted to preparatory to the execution thereof, is contrary to the
Constitution, to law and to public policy. They also ask the Court to compel public respondent to
forthwith comply with pertinent provisions of law regarding procurement of government
infrastructure projects, including public bidding for said contract to undertake the construction of the
national broadband network.

It is simply impossible for this Court "to annul and set aside the award of the ZTE-DOTC Broadband
Deal" without any evidence to support a prior factual finding pointing to any violation of law that
could lead to such annulment order. For sure, the Supreme Court is not the proper venue for this factual
matter to be threshed out.

Thirdly, petitioner Suplico in G.R. No. 178830 prayed that this Court order "public respondents to
forthwith comply with pertinent provisions of law regarding procurement of government ICT contracts
[2 ]
and public bidding for the NBN contract."[25] It would be too presumptuous on the part of the
Court to summarily compel public respondents to comply with pertinent provisions of law
regarding procurement of government infrastructure projects without any factual basis or prior
determination of very particular violations committed by specific government officials of the executive
branch. For the Court to do so would amount to a breach of the norms of comity among co-equal
branches of government. A perceived error cannot be corrected by committing another error. Without
proper evidence, the Court cannot just presume that the executive did not comply with procurement
laws. Should the Court allow itself to fall into this trap, it would plainly commit grave error itself.

Magiging kapangahasan sa Hukumang ito na pilitin ang mga pinipetisyon na tumalima

sa batas sa pangongontrata ng pamahalaan kung wala pang pagtitiyak o angkop na
ebidensiya ng nagawang paglabag dito.

Let it be clarified that the Senate investigation in aid of legislation cannot be the basis of Our decision
which requires a judicial finding of facts.

Justice Antonio T. Carpio takes the view that the National Broadband Network Project should be
declared null and void. The foregoing threefold reasons would suffice to address the concern of Our
esteemed colleague.

The Court is, therefore, constrained to dismiss the petitions and deny them due course because of
mootness and because their resolution requires reception of evidence which cannot be done in an
original petition brought before the Supreme Court.

WHEREFORE, the petitions are DISMISSED. The Temporary Restraining Order issued on
September 11, 2007 is DISSOLVED.

SO ORDERED.

Quisumbing, Corona, Tinga, Velasco, Jr., Nachura, Leonardo-De Castro, and Brion, JJ., concur.
Carpio, J., see dissenting opinion.
Austria-Martinez, J., join Justice Carpio in his dissenting opinion.
Azcuna, J., concur in a separate opinion.
Puno, C.J., and Ynares-Santiago, J., join J. Azcuna's separate opinion.
Carpio-Morales, J., please see my dissenting opinion.
Chico-Nazario, J., on official leave.

* On official leave per Special Order No. 508 dated June 25, 2008.

[1] Rollo (G.R. No. 178830), p. 1093.

[2] 1st Indorsement dated October 24, 2007 from the DOTC signed by Atty. Raquel Desiderio, Director
III, Legal Service states:
Respectfully indorsed to SOLICITOR GENERAL AGNES VST DEVANADERA (Attention:
ASSISTANT SOLICITOR GENERAL AMPARO M. CABOTAJE-TANG), herein copy of the
Highlights From the Notes of the Meeting Between President Gloria Macapagal-
Arroyo and Chinese President Hu Jintao which was held in Xi Jiao Guesthouse, Shanghai,
The People's Republic of China on 02 October 2007 as transmitted from the Office of the President
as provided by the Department of Foreign Affairs (DFA).

As per verbal request from your honorable office we are furnishing you a copy of the record of the
said meeting which states in sum the Philippine Government's decision not to continue with the
ZTE National Broadband Network Project due to several reasons and constraints. It is the
understanding of the DOTC that this document will form part of the evidence that will be submitted
to the Honorable Supreme Court in connection with the cases filed against the DOTC in relation to
the NBN Project.

Kindly refer to the attached document and respectfully request appropriate action on the same.
Thank you very much for your continued support and assistance to the Department of
Transportation and Communications.

[3] Rollo (G.R. No. 178830), p. 1124.

[4] Id. at 1157.

[5] Id. at 1160.

[6] G.R. No. 97351, February 4, 1992, 205 SCRA 816.

[7] G.R. No. 139554, July 21, 2006, 496 SCRA 13.

[8] G.R. No. 108399, July 31, 1997, 276 SCRA 501.

[9] Citing Republic v. Tan, G.R. No. 145255, March 30, 2004, 426 SCRA 485, 492-493.

[10] (a) Issuance of a Forward Obligation Authority (FOA) by the Department of Budget and
Management (DBM) of the Government of the Republic of the Philippines;

(b) Conclusion of the Loan Agreement between the Export-Import Bank of China and the Department of
Finance (DOF) of the Government of the Republic of the Philippines;

(c) Legal Opinion on the procurement process by the Department of Justice of the Government of the
Republic of the Philippines;

(d) The ratification by the Government of the Republic of the Philippines and the People's Republic of
China of the Executive Agreement evidenced by the letter dated 02 December 2006 of Chinese
Ambassador Li Jinjun to Presidential Chief of Staff Michael T. Defensor relating to the NBN project and
the letter of the NEDA Secretary dated 20 April 2007 addressed to Honorable Minister Bo Xilai, Ministry
of Commerce and Honorable Li Rougu, Chairman and President of the Export-Import Bank of China,
People's Republic of China nominating the NBN Project.

[11] Rollo (G.R. No. 178830), pp. 127-128.

[12] Rollo (G.R. No. 179317), pp. 35-36.

[13] Rollo (G.R. No. 179613), pp. 77-78.

[14] Rollo (G.R. No. 178830), p. 232.

[15] Id. at 233-235.

[16] Also attached to public respondents' Comment in G.R. No. 178830 as Annex "LL." Id. at 537.

[17] Id. at 589-590; Annex "OO." Letter of Sec. Leandro Mendoza, DOTC, to Sen. Allan Peter Cayetano
dated September 25, 2007. In response to a request of the Senate Blue Ribbon Committee to be
furnished with the copy of the supply contract, DOTC Secretary Mendoza informed Sen. Allan Peter
Cayetano that the pertinent documents were transmitted as publicly requested, and the same were
distributed to guests who requested a copy.

[18] G.R. No. 171396, May 3, 2006, 489 SCRA 160.

[19] G.R. No. 146710, March 2, 2001, 353 SCRA 452.

[20] The Highlights from the notes of the meeting between President Gloria Macapagal-Arroyo and
Chinese President Hu Jintao which was held in the Xi Jiao Guesthouse, Shanghai, China on October 2,
2007 was transmitted by the Office of the President through the Department of Foreign Affairs (DFA) to
the Department of Transportation and Communications (DOTC), which in turn transmitted the
communication through 1st Indorsement dated October 24, 2007 (Rollo [G.R. No. 178830], p. 1097) to
the Office of the Solicitor General, which in informed this Court, through its Manifestation and Motion
dated October 26, 2007 (Id. at 1093).

[21] G.R. No. 140338, August 7, 2007, 529 SCRA 232.

[22] Republic Telecommunications Holdings, Inc. v. Santiago, id. at 242-244.

[23] Rollo (G.R. No. 178830), p. 676.

[24] Id. at 720-721.

[25] Id. at 127-128.

681 Phil. 493

SECOND DIVISION

[ G. R. No. 183622, February 08, 2012 ]

MEROPE ENRIQUEZ VDA. DE CATALAN, PETITIONER, VS. LOUELLA A. CATALAN-LEE,

RESPONDENT.

RESOLUTION
SERENO, J.:
[1] [2]
Before us is a Petition for Review assailing the Court of Appeals (CA) Decision and Resolution
regarding the issuance of letters of administration of the intestate estate of Orlando B. Catalan.

The facts are as follows:

Orlando B. Catalan was a naturalized American citizen. After allegedly obtaining a divorce in the United
States from his first wife, Felicitas Amor, he contracted a second marriage with petitioner herein.

On 18 November 2004, Orlando died intestate in the Philippines.

Thereafter, on 28 February 2005, petitioner filed with the Regional Trial Court (RTC) of Dagupan City a
Petition for the issuance of letters of administration for her appointment as administratrix of the
intestate estate of Orlando. The case was docketed as Special Proceedings (Spec. Proc.) No. 228.

On 3 March 2005, while Spec. Proc. No. 228 was pending, respondent Louella A. Catalan-Lee, one of the
children of Orlando from his first marriage, filed a similar petition with the RTC docketed as Spec. Proc.
No. 232.

The two cases were subsequently consolidated.

Petitioner prayed for the dismissal of Spec. Proc. No. 232 on the ground of litis pendentia, considering
that Spec. Proc. No. 228 covering the same estate was already pending.

On the other hand, respondent alleged that petitioner was not considered an interested person qualified
to file a petition for the issuance of letters of administration of the estate of Orlando. In support of her
contention, respondent alleged that a criminal case for bigamy was filed against petitioner before Branch
54 of the RTC of Alaminos, Pangasinan, and docketed as Crim. Case No. 2699-A.

Apparently, Felicitas Amor filed a Complaint for bigamy, alleging that petitioner contracted a second
marriage to Orlando despite having been married to one Eusebio Bristol on 12 December 1959.

[3]
On 6 August 1998, the RTC had acquitted petitioner of bigamy. The trial court ruled that since the
deceased was a divorced American citizen, and since that divorce was not recognized under Philippine
jurisdiction, the marriage between him and petitioner was not valid.

Furthermore, it took note of the action for declaration of nullity then pending action with the trial court
in Dagupan City filed by Felicitas Amor against the deceased and petitioner. It considered the pending
action to be a prejudicial question in determining the guilt of petitioner for the crime of bigamy.

Finally, the trial court found that, in the first place, petitioner had never been married to Eusebio Bristol.

On 26 June 2006, Branch 70 of the RTC of Burgos, Pangasinan dismissed the Petition for the issuance of
letters of administration filed by petitioner and granted that of private respondent. Contrary to its
findings in Crim. Case No. 2699-A, the RTC held that the marriage between petitioner and Eusebio
Bristol was valid and subsisting when she married Orlando. Without expounding, it reasoned further that
her acquittal in the previous bigamy case was fatal to her cause. Thus, the trial court held that petitioner
was not an interested party who may file a petition for the issuance of letters of administration.[4]

After the subsequent denial of her Motion for Reconsideration, petitioner elevated the matter to the
Court of Appeals (CA) via her Petition for Certiorari, alleging grave abuse of discretion on the part of the
RTC in dismissing her Petition for the issuance of letters of administration.

Petitioner reiterated before the CA that the Petition filed by respondent should have been dismissed on
the ground of litis pendentia. She also insisted that, while a petition for letters of administration may
have been filed by an "uninterested person," the defect was cured by the appearance of a real party-in-
interest. Thus, she insisted that, to determine who has a better right to administer the decedent's
properties, the RTC should have first required the parties to present their evidence before it ruled on the
matter.

On 18 October 2007, the CA promulgated the assailed Decision. First, it held that petitioner undertook
the wrong remedy. She should have instead filed a petition for review rather than a petition for certiorari.
Nevertheless, since the Petition for Certiorari was filed within the fifteen-day reglementary period for
filing a petition for review under Sec. 4 of Rule 43, the CA allowed the Petition and continued to decide
on the merits of the case. Thus, it ruled in this wise:
As to the issue of litis pendentia, we find it not applicable in the case. For litis pendentia to be a
ground for the dismissal of an action, there must be: (a) identity of the parties or at least such as to
represent the same interest in both actions; (b) identity of rights asserted and relief prayed for, the
relief being founded on the same acts, and (c) the identity in the two cases should be such that the
judgment which may be rendered in one would, regardless of which party is successful, amount to
res judicata in the other. A petition for letters of administration is a special proceeding. A special
proceeding is an application or proceeding to establish the status or right of a party, or a particular
fact. And, in contrast to an ordinary civil action, a special proceeding involves no defendant or
respondent. The only party in this kind of proceeding is the petitioner of the applicant. Considering
its nature, a subsequent petition for letters of administration can hardly be barred by a similar
pending petition involving the estate of the same decedent unless both petitions are filed by the
same person. In the case at bar, the petitioner was not a party to the petition filed by the private
respondent, in the same manner that the latter was not made a party to the petition filed by the
former. The first element of litis pendentia is wanting. The contention of the petitioner must
perforce fail.

Moreover, to yield to the contention of the petitioner would render nugatory the provision of the
Rules requiring a petitioner for letters of administration to be an "interested party," inasmuch as
any person, for that matter, regardless of whether he has valid interest in the estate sought to be
administered, could be appointed as administrator for as long as he files his petition ahead of any
other person, in derogation of the rights of those specifically mentioned in the order of preference in
the appointment of administrator under Rule 78, Section 6 of the Revised Rules of Court, which
provides:

xxx xxx xxx

The petitioner, armed with a marriage certificate, filed her petition for letters of administration. As a
spouse, the petitioner would have been preferred to administer the estate of Orlando B. Catalan.
However, a marriage certificate, like any other public document, is only prima facie evidence of the
facts stated therein. The fact that the petitioner had been charged with bigamy and was
acquitted has not been disputed by the petitioner. Bigamy is an illegal marriage committed
by contracting a second or subsequent marriage before the first marriage has been dissolved or
before the absent spouse has been declared presumptively dead by a judgment rendered in a proper
proceedings. The deduction of the trial court that the acquittal of the petitioner in the
said case negates the validity of her subsequent marriage with Orlando B. Catalan has
not been disproved by her. There was not even an attempt from the petitioner to deny
the findings of the trial court. There is therefore no basis for us to make a contrary finding.
Thus, not being an interested party and a stranger to the estate of Orlando B. Catalan, the dismissal
of her petition for letters of administration by the trial court is in place.

xxx xxx xxx

WHEREFORE, premises considered, the petition is DISMISSED for lack of merit. No

pronouncement as to costs.

[5]
SO ORDERED. (Emphasis supplied)

Petitioner moved for a reconsideration of this Decision.[6] She alleged that the reasoning of the CA was
illogical in stating, on the one hand, that she was acquitted of bigamy, while, on the other hand, still
holding that her marriage with Orlando was invalid. She insists that with her acquittal of the crime of
bigamy, the marriage enjoys the presumption of validity.

On 20 June 2008, the CA denied her motion.

Hence, this Petition.

At the outset, it seems that the RTC in the special proceedings failed to appreciate the finding of the RTC
in Crim. Case No. 2699-A that petitioner was never married to Eusebio Bristol. Thus, the trial court
concluded that, because petitioner was acquitted of bigamy, it follows that the first marriage with Bristol
still existed and was valid. By failing to take note of the findings of fact on the nonexistence of the
marriage between petitioner and Bristol, both the RTC and CA held that petitioner was not an interested
party in the estate of Orlando.

Second, it is imperative to note that at the time the bigamy case in Crim. Case No. 2699-A was dismissed,
we had already ruled that under the principles of comity, our jurisdiction recognizes a valid divorce
obtained by a spouse of foreign nationality. This doctrine was established as early as 1985 in Van Dorn v.
Romillo, Jr.[7] wherein we said:

It is true that owing to the nationality principle embodied in Article 15 of the Civil Code, only
Philippine nationals are covered by the policy against absolute divorces[,] the same being
considered contrary to our concept of public policy and morality. However, aliens may obtain
divorces abroad, which may be recognized in the Philippines, provided they are valid
according to their national law. In this case, the divorce in Nevada released private
respondent from the marriage from the standards of American law, under which
divorce dissolves the marriage. xxx

We reiterated this principle in Llorente v. Court of Appeals,[8] to wit:

In Van Dorn v. Romillo, Jr. we held that owing to the nationality principle embodied in Article 15 of
the Civil Code, only Philippine nationals are covered by the policy against absolute divorces, the
same being considered contrary to our concept of public policy and morality. In the same case, the
Court ruled that aliens may obtain divorces abroad, provided they are valid according
to their national law.

Citing this landmark case, the Court held in Quita v. Court of Appeals, that once
proven that respondent was no longer a Filipino citizen when he obtained the divorce
from petitioner, the ruling in Van Dorn would become applicable and petitioner could
"very well lose her right to inherit" from him.

In Pilapil v. Ibay-Somera, we recognized the divorce obtained by the respondent in his country, the
Federal Republic of Germany. There, we stated that divorce and its legal effects may be
recognized in the Philippines insofar as respondent is concerned in view of the
nationality principle in our civil law on the status of persons.

For failing to apply these doctrines, the decision of the Court of Appeals must be reversed. We hold
that the divorce obtained by Lorenzo H. Llorente from his first wife Paula was valid
and recognized in this jurisdiction as a matter of comity. xxx

Nonetheless, the fact of divorce must still first be proven as we have enunciated in Garcia v. Recio,[9] to
wit:
Respondent is getting ahead of himself. Before a foreign judgment is given presumptive evidentiary
value, the document must first be presented and admitted in evidence. A divorce obtained abroad is
proven by the divorce decree itself. Indeed the best evidence of a judgment is the judgment
itself. The decree purports to be a written act or record of an act of an official body or tribunal of a
foreign country.

Under Sections 24 and 25 of Rule 132, on the other hand, a writing or document may be proven as a
public or official record of a foreign country by either (1) an official publication or (2) a copy thereof
attested by the officer having legal custody of the document. If the record is not kept in the
Philippines, such copy must be (a) accompanied by a certificate issued by the proper diplomatic or
consular officer in the Philippine foreign service stationed in the foreign country in which the record
is kept and (b) authenticated by the seal of his office.

The divorce decree between respondent and Editha Samson appears to be an authentic one issued
by an Australian family court. However, appearance is not sufficient; compliance with the
aforementioned rules on evidence must be demonstrated.

Fortunately for respondent's cause, when the divorce decree of May 18, 1989 was submitted in
evidence, counsel for petitioner objected, not to its admissibility, but only to the fact that it had not
been registered in the Local Civil Registry of Cabanatuan City. The trial court ruled that it was
admissible, subject to petitioner's qualification. Hence, it was admitted in evidence and accorded
weight by the judge. Indeed, petitioner's failure to object properly rendered the divorce decree
admissible as a written act of the Family Court of Sydney, Australia.

Compliance with the quoted articles (11, 13 and 52) of the Family Code is not necessary; respondent
was no longer bound by Philippine personal laws after he acquired Australian citizenship in 1992.
Naturalization is the legal act of adopting an alien and clothing him with the political and civil rights
belonging to a citizen. Naturalized citizens, freed from the protective cloak of their former states,
don the attires of their adoptive countries. By becoming an Australian, respondent severed his
allegiance to the Philippines and the vinculum juris that had tied him to Philippine personal laws.

Burden of Proving Australian Law

Respondent contends that the burden to prove Australian divorce law falls upon petitioner, because
she is the party challenging the validity of a foreign judgment. He contends that petitioner was
satisfied with the original of the divorce decree and was cognizant of the marital laws of Australia,
because she had lived and worked in that country for quite a long time. Besides, the Australian
divorce law is allegedly known by Philippine courts; thus, judges may take judicial notice of foreign
laws in the exercise of sound discretion.

We are not persuaded. The burden of proof lies with the "party who alleges the existence
of a fact or thing necessary in the prosecution or defense of an action." In civil cases,
plaintiffs have the burden of proving the material allegations of the complaint when
those are denied by the answer; and defendants have the burden of proving the
material allegations in their answer when they introduce new matters. Since the
divorce was a defense raised by respondent, the burden of proving the pertinent
Australian law validating it falls squarely upon him.

It is well-settled in our jurisdiction that our courts cannot take judicial notice of
foreign laws. Like any other facts, they must be alleged and proved. Australian marital
laws are not among those matters that judges are supposed to know by reason of their
judicial function. The power of judicial notice must be exercised with caution, and
every reasonable doubt upon the subject should be resolved in the negative. (Emphasis
supplied)

It appears that the trial court no longer required petitioner to prove the validity of Orlando's divorce
under the laws of the United States and the marriage between petitioner and the deceased. Thus, there is
a need to remand the proceedings to the trial court for further reception of evidence to establish the fact
of divorce.

Should petitioner prove the validity of the divorce and the subsequent marriage, she has the preferential
right to be issued the letters of administration over the estate. Otherwise, letters of administration may
be issued to respondent, who is undisputedly the daughter or next of kin of the deceased, in accordance
with Sec. 6 of Rule 78 of the Revised Rules of Court.

[10]
This is consistent with our ruling in San Luis v. San Luis, in which we said:

Applying the above doctrine in the instant case, the divorce decree allegedly obtained by Merry Lee
which absolutely allowed Felicisimo to remarry, would have vested Felicidad with the legal
personality to file the present petition as Felicisimo's surviving spouse. However, the records
show that there is insufficient evidence to prove the validity of the divorce obtained by
Merry Lee as well as the marriage of respondent and Felicisimo under the laws of the
U.S.A. In Garcia v. Recio, the Court laid down the specific guidelines for pleading and proving
foreign law and divorce judgments. It held that presentation solely of the divorce decree is
insufficient and that proof of its authenticity and due execution must be presented. Under Sections
24 and 25 of Rule 132, a writing or document may be proven as a public or official record of a
foreign country by either (1) an official publication or (2) a copy thereof attested by the officer
having legal custody of the document. If the record is not kept in the Philippines, such copy must be
(a) accompanied by a certificate issued by the proper diplomatic or consular officer in the Philippine
foreign service stationed in the foreign country in which the record is kept and (b) authenticated by
the seal of his office.

With regard to respondent's marriage to Felicisimo allegedly solemnized in California, U.S.A., she
submitted photocopies of the Marriage Certificate and the annotated text of the Family Law Act of
California which purportedly show that their marriage was done in accordance with the said law. As
stated in Garcia, however, the Court cannot take judicial notice of foreign laws as they must be
alleged and proved.

Therefore, this case should be remanded to the trial court for further reception of
evidence on the divorce decree obtained by Merry Lee and the marriage of respondent
and Felicisimo. (Emphasis supplied)

Thus, it is imperative for the trial court to first determine the validity of the divorce to ascertain the
rightful party to be issued the letters of administration over the estate of Orlando B. Catalan.

WHEREFORE, premises considered, the Petition is hereby PARTIALLY GRANTED. The Decision
dated 18 October 2007 and the Resolution dated 20 June 2008 of the Court of Appeals are hereby
REVERSED and SET ASIDE. Let this case be REMANDED to Branch 70 of the Regional Trial Court
of Burgos, Pangasinan for further proceedings in accordance with this Decision.

SO ORDERED.

Carpio, (Chairperson), Brion, Perez, and Reyes, JJ., concur.

[1] Penned by Associate Justice Amelita G. Tolentino, with Associate Justices Lucenito N. Tagle and
Ramon R. Garcia concurring; rollo, pp. 20-30.

[2] Id. at 49.

[3] Id. at 38-45; penned by Judge Jules A. Mejia.

[4] As narrated by the Court of Appeals on p. 3 of its Decision.

[5] Rollo, pp. 26-29.

[6] Id. at 31-36.

[7] 223 Phil. 357, 362 (1985).

[8] 399 Phil. 342, 355-356 (2000).

[9] 418 Phil. 723, 723-735 (2001).

[10] G.R. Nos. 133743 & 134029, 6 February 2007, 514 SCRA 294, 313-314.
82 Phil. 323

[ G. R. No. L-2248, January 23, 1950 ]

IN THE MATTER OF THE PETITION OF VICENTE ROSAL PARDO TO BE ADMITTED A CITIZEN OF

THE PHILIPPINES. VICENTE ROSAL PARDO, PETITIONER AND APPELLEE, VS. THE REPUBLIC OF
THE PHILIPPINES, OPPOSITOR AND APPELLANT.

DECISION
TUASON, J.:
Vicente Rosal Pardo, a Spanish citizen born in Spain in 1895 and residing in the Philippines since 1905,
where he married a Filipino woman and where he is at present employed, in Manila, with an annual
salary of P4,800, has been adjudged by the Court of First Instance of Manila entitled to become a Filipino
citizen. That the appellee is unable to speak and write any of the principal Filipino languages is the first
ground of appeal by the Government.
The applicant testified that he knows enough Tagalog to be understood in that language. Lino Gutierrez,
a respectable citizen who has intimately known the applicant for 27 years, having had business relations
with him, confirmed the applicant's testimony. And the trial judge, who has heard the applicant translate
into Tagalog, "He venido residiendo en Filipinas por ellperiodo de 36 años," appears to have been
satisfied with the correctness of the translation (which was not transcribed.) The fact that the applicant
arrived in the Philippines when "he was only 10 years old and has lived here for 44 years continuously
except for a few months' visit in Spain, mingling and dealing by reason of his work with people who use
Tagalog in their daily intercourse, lends credence to his testimony that he has acquired a good working
knowledge of that language. At one time, according to the evidence he owned or managed two stores
successively on the Escolta, and lately he has been a foreman and warehouseman at Soriano & Co.
The portion of the applicant's testimony which is copied in appellant's brief should not be taken
isolatedly and at face value. This testimony is obviously an extravagant understatement of the reality,
typifying an extreme modesty which is thought by some to.be a virtue. We do not believe that this
statement represents appellant's sincere conviction of its literal meaning.
The other assignment of error goes to the sufficiency of the evidence on whether the laws of Spain grant
Filipinos the right to become naturalized citizens of that country. The applicant introduced a certificate
signed by the Consul general of Spain in the Philippines, stating that in accordance with articles 17 and
25 of the Spanish Civil Code, among other Spanish legislation, Filipinos are eligible to Spanish
citizenship in Spain. Article 17 provides that foreigners who have obtained a certificate of naturalization
and those who have not obtained such certificate but have acquired domicile in any town of the
Monarchy are Spaniards. No discrimination being made in these provisions, they apply to persons of any
nationality.
As the Spanish Civil Code has been and still is "the basic code in force in the Philippines," articles 17 et
seq. thereof may be regarded as matters known to judges of the Philippines by reason of their judicial
functions and may be judicially recognized by them without the introduction of proof. (Section 5, Rule
123.) Moreover, in a number of decisions mere authentication of the Chinese Naturalization Law by the
Chinese Consulate General of Manila has been held to be competent proof of that law. (Yap vs. Solicitor
General, L-1602, 46 Off. Gaz. [Supp. to No. 1], p. 250;[1] Leelin vs. Republic of the Philippines, L-l 761;
[2] Yee Bo Mann vs.. Republic of the Philippines, L-1606, 46 Off. Gaz. [Supp. to No. 11], 201;[3] Jose Go
alias Joseph Gotianuy vs. Anti-Chinese League of the Philippines and Felipe Fernandez, L-1563.)[4]
The judgment of the lower court is affirmed without costs.
Moran, C. J., Ozaeta, Paras, Pablo, Bengzon, Padilla, Montemayor, Reyes, and Torres, JJ., concur.
Judgment affirmed.

[1]
81 Phil., 468.
[2]
47 Of. Gaz., 694.
[3] 83 Phil., 743.
[4]
47 O. G. 716.
RESOLUTION ON MOTION FOR RECONSIDERATION
April 28, 1950
TUASON, J.:
This case is again before the court, this time on a motion for reconsideration.
In our decision we say: "As the Spanish Civil Code has been and still is 'the basic code in force in the
Philippines,' articles 17 et seq. thereof may be regarded as matters known to judges of the Philippines by
reason of their judicial functions and may be judicially recognized by them without the introduction of
proof." (Section 5, Rule 123.)
The court is supposed to know that the Civil Code is the Code of Spain, and this judicial knowledge
embraces all its provisions, including those which have ceased to be in operation in the Philippines. This
court has said that it is not, by reason of an opinion expressed by an expert witness, precluded from
advising itself as to the common law of England. (Bryan vs. Eastern and Western Asso. Co., 28 Phil, 310.)
If the court may take cognizance of the common law of England, there is perhaps at least as much reason
that it may do so of the Spanish citizenship law, which was our own citizenship law until Spain
relinquished its sovereignty over the Philippines and which is a part of the code that is still the major
branch of law of our country although the said part is no longer applicable here.
In the matter of the application of Rafael Roa Yrostoza for naturalization, L-1394 (46 Off. Gaz. [Supp. to
No. 11], 179),[1] we said that "There was no proof that Spain had a law which grants Filipinos the right to
become naturalized citizens of that country," and returned the case to the court of origin with instruction
to reopen the hearing and give the parties new opportunity to establish or disprove the existence of such
law. We have to confess that the remand for further proceeding was unnecessary. Oversight is the
explanation, made possible by the failure of either party to direct our attention to the articles of the Civil
Code of which we have been, in the present case, apprised by the applicant.
In the decision sought to be reconsidered we also say that in a number of decisions, which we cite, mere
authentication of the Chinese naturalization law by the Chinese Consulate General in Manila has been
taken as competent proof of that law. The Solicitor General takes exception to this passage, in the
following observation:
"With regard to the second question under consideration as to "whether the certification of the
supposed naturalization laws of Spain made by the Spanish Consul General constitutes competent
proof of that law, this court cites in support of its opinion the cases of: Jose Leelin vs. Republic of
[1] [2]
the Philippines, G. R. No. L-1761; Bienvenido Yap vs. The Solicitor General G. R. No. L-1602;
[3]
Yee Boo Mann vs. Republic of the Philippines, G. R. No. L-1606; and Jose Go alias Joseph
[4]
Gotianuy vs. Anti-Chinese League of the Philippines and Felipe Fernandez, G. R. No. L-1563. We
have carefully gone over these cases and we beg leave to point out that in each of them this court did
not rule that the mere authentication of the Chinese Naturalization Law by the Chinese Consulate
General of Manila constitute competent proof of that law, but that the question as to whether or not
the copy of the Chinese Nationality Law presented in said cases were properly authenticated and
admissible in evidence to prove reciprocity, as required in section 4 (h) of the Revised
Naturalization Law, has become academic because of the admission made by counsel for the
oppositor (Republic of the Philippines) to the effect that in another case, there has been presented a
copy of the naturalization laws of China duly authenticated in accordance with the Rules of Court."

The decisions referred to seem to have been misread. In Yap vs. Solicitor General, L-1602 (46 Off. Gaz.
[Supp. to No. 1], p. 250),[2] the document admitted, Exhibit E, purported to be "a copy of the Chinese
law of citizenship, where it appears that Filipinos can acquire Chinese citizenship by naturalization."
There was nothing in that decision which would show that the certificate or authentication was made by a
Philippine diplomatic or consular representative in China. In Jose Leelin vs. Republic of the Philippines,
G. R. No. L-1761,[1] we said that "in previous cases, a translation of the Chinese Naturalization Law,
made and certified to be correct by the Chinese Consulate General in Manila, was admitted and
considered sufficient evidence to establish that the laws of China permit Filipinos to become citizens of
that country." In Yee Boo Mann vs. Republic of the Philippines, L-1606 (46 Off. Gaz. [Supp. to No. 11],
201 ),[3] the petitioner introduced in evidence a translation of the Chinese Naturalization Law, certified
to be correct by the Chinese Consul General in Manila. The court held in that case that the objection to
the evidence "is of no moment, since this court has already accepted it as fact in previous naturalization
cases that the laws of China permit Filipinos to naturalize in that country." And the court disposed of
Lock Ben Ping vs. Republic of the Philippines, L-1675 (47 Off. Gaz., 176),[1] on the strength of the
pronouncement, just quoted, in the Yee Boo Mann decision.
If it be true, as the Solicitor General notes, that in the Yap case the ratio decidendi was that "there has
been presented a copy of the Naturalization Laws of China duly authenticated in accordance with the
Rules of Court," then the decision recognized as a fact the existence of a law of China under which
Filipinos may be naturalized. Of this fact the court properly assumed judicial knowledge in the cases that
[2]
came up before it soon after.
We realize that a copy of a foreign law certified only by the local consul of the applicant's country does
not conform to the requirement concerning the certification and authentication of such law (sec. 41, Rule
123). But the case at bar and the cases cited therein as precedents are not governed by the Rules of Court.
Rule 132, entitled "Applicability of the Rules," provides that "These rules shall not apply to land
registration, cadastral and election cases, naturalization and insolvency proceedings, and other cases not
herein provided for, except by analogy or in a suppletory character and whenever practicable and
convenient." By reason of this provision, literal adherence to the Rules of Court, which include rules of
evidence, is not obligatory in a proceeding like that under consideration. While naturalization proceeding
under the Philippine law is judicial in character, and strict compliance with the process prescribed by
statute, if there were one, would be essential, yet when, as here, no specific procedure is indicated in the
premises, it is only necessary that the merits of the petition be passed on and a decision reached on a fair
consideration of the evidence on satisfactory proof. Accordingly, evidence of the law of a foreign country
on reciprocity regarding the acquisition of citizenship, although not meeting the prescribed rule of
practice by section 41 of Rule 123, may be allowed and used as basis for a favorable action if, in the light
of all the circumstances, the court is satisfied of the authenticity of the written proof offered. The motion
for reconsideration is therefore denied.
Moran, C. J., Ozaeta, Pablo, Bengzon, Montemayor, and Reyes, JJ., concur.
Motion for reconsideration denied.

[1]
83 Phil., 721.
[1]
47 O. G., 694.
[2] 81 Phil., 468.
[3]
83 Phil., 743.
[4] 47 O. G., 716.
[1]
84 Phil. Reports, 217.
[2] A judge, where the fact has been ascertained in previous cases, will take judicial notice of: (1) A
foreign statute, U. S. vs. Teschmaker, 22 How. (U.S.), 392; 16 L. ed., 353; Graham vs. Williams, 21 La.
Ann., 594. (2) A colonization contract. Hatch vs. Dunn, 11 Tex., 708. (3) The procedure in taking up
unoccupied lands. U. S. vs. Teschmaker, supra. (4) The mendacity of Chinese witnesses. Peo. vs. Lon
Yeck, 123 Cal. 246, 55 p., 984. (5) Where court has once been properly informed of the terms of a private
:t and recognized it in a written opinion, the same court in subsequent cases will take judicial cognizance
of the act. Mower vs. Kemp, 42 La. Ann., 1007; 8 S., 830." (23 C. J. 61, note 39.)
DIVISION

[ GR No. 55960, Nov 24, 1988 ]

YAO KEE v. AIDA SY-GONZALES

DECISION
249 Phil. 681

CORTES, J.:
Sy Kiat, a Chinese national, died on January 17, 1977 in Caloocan City where he was then residing, leaving
behind real and personal properties here in the Philippines worth P300,000.00 more or less.

Thereafter, Aida Sy-Gonzales, Manuel Sy, Teresita Sy-Bernabe and Adolfo Sy filed a petition for the grant
of letters of administration docketed as Special Proceedings Case No. C-699 of the then Court of First
lnstance of Rizal Branch XXXIII, Caloocan City. In said petition they alleged among others that (a) they
are the children of the deceased with Asuncion Gillego; (b) to their knowledge Sy Kiat died intestate; (c)
they do not recognize Sy Kiat's marriage to Yao Kee nor the filiation of her children to him; and, (d) they
nominate Aida Sy-Gonzales for appointment as administratrix of the intestate estate of the deceased
[Record on Appeal, pp. 4-9; Rollo, p. 107.]

The petition was opposed by Yao Kee, Sze Sook Wah, Sze Lai Cho and Sy Yun Chen who alleged that: (a)
Yao Kee is the lawful wife of Sy Kiat whom he married on January 19, 1931 in China; (b) the other
oppositors are the legitimate children of the deceased with Yao Kee; and, (c) Sze Sook Wah is the eldest
among them and is competent, willing and desirous to become the administratrix of the estate of Sy Kiat
[Record on Appeal, pp. 12-13; Rollo, p. 107.]

After hearing, the probate court, finding among others that:

(1) Sy Kiat was legally married to Yao Kee [CFI decision, pp. 12-27; Rollo, pp. 49-64;]

Sze Sook Wah, Sze Lai Cho and Sze Chun Yen are the legitimate children of Yao Kee with Sy
(2)
Kiat [CFI decision, pp. 28-31; Rollo, pp. 65-68;] and,

Aida Sy-Gonzales, Manuel Sy, Teresita Sy-Bernabe and Rodolfo Sy are the acknowledged
(3) illegitimate offsprings of Sy Kiat with Asuncion Gillego [CFI decision, pp. 27-28; Rollo, pp. 64-
65.]

held in favor of the oppositors (petitioners herein) and appointed Sze Sook Wah as the administratrix of
the intestate estate of the deceased [CFI decision, pp. 68-69; Rollo, pp. 105-106.]

On appeal the Court of Appeals rendered a decision modifying that of the probate courts, the dispositive
portion of which reads:
IN VIEW OF THE FOREGOING, the decision of the lower Court is hereby MODIFIED and SET
ASIDE and a new judgment rendered as follows:

Declaring petitioners Aida Sy-Gonzales, Manuel Sy, Teresita Sy-Bernabe and Rodolfo Sy
(1) acknowledged natural children of the deceased Sy Kiat with Asuncion Gillego, an unmarried
woman with whom he lived as husband and wife without benefit of marriage for many years;

Declaring oppositors Sze Sook Wah, Sze Lai Chu and Sze Chun Yen, the acknowledged natural
children of the deceased Sy Kiat with his Chinese wife Yao Kee, also known as Yui Yip, since the
(2)
legality of the alleged marriage of Sy Kiat to Yao Kee in China had not been proven to be valid
to the laws of the Chinese People's Republic of China (sic);

Declaring the deed of sale executed by Sy Kiat on December 7, 1976 in favor of Tomas Sy
(Exhibit "G-1", English translation of Exhibit "G") of the Avenue Tractor and Diesel Parts
(3)
Supply to be valid and accordingly, said property should be excluded from the estate of the
deceased Sy Kiat; and

Affirming the appointment by the lower Court of Sze Sook Wah as judicial administratrix of the
(4)
estate of the deceased. [CA decision, pp. 11-12; Rollo, pp. 36-37.]

From said decision both parties moved for partial reconsideration, which was however denied by
respondent court. They thus interposed their respective appeals to this Court.

Private respondents filed a petition with this Court docketed as G.R. No. 56045 entitled "Aida Sy-
Gonzales, Manuel Sy, Teresita Sy-Bernabe and Rodolfo Sy v. Court of Appeals, Yao Kee, Sze Sook Wah,
Sze Lai Cho and Sy Chun Yen" questioning paragraphs (3) and (4) of the dispositive portion of the Court
of Appeals' decision. The Supreme Court however resolved to deny the petition and the motion for
reconsideration. Thus on March 8, 1982 entry of judgment was made in G.R. No. 56045.*

The instant petition, on the other hand, questions paragraphs (1) and (2) of the dispositive portion of the
decision of the Court of Appeals. This petition was initially denied by the Supreme Court on June 22,
1981. Upon motion of the petitioners the Court in a resolution dated September 16, 1981 reconsidered the
denial and decided to give due course to this petition.

Herein petitioners assign the following as errors:

I. RESPONDENT COURT OF APPEALS SERIOUSLY ERRED IN DECLARING THE MARRIAGE
OF SY KIAT TO YAO YEE AS NOT HAVE (sic) BEEN PROVEN VALID IN ACCORDANCE
WITH LAWS OF THE PEOPLE'S REPUBLIC OF CHINA.

II. RESPONDENT COURT OF APPEALS GRAVELY ERRED IN DECLARING AIDA SY-

GONZALES, MANUEL SY, TERESITA SY-BERNABE AND RODOLFO SY AS NATURAL
CHILDREN OF SY KIAT WITH ASUNCION GILLEGO. [Petition p. 2; Rollo, p. 6.]
I. Petitioner argue that the marriage of Sy Kiat to Yao Kee in accordance with Chinese law and
custom was conclusively proven. To buttress this argument they rely on the following
testimonial and documentary evidence.

First, the testimony of Yao Kee summarized by the trial court as follows:
Yao Kee testified that she was married to Sy Kiat on January 19, 1931 in Fookien, China; that she
does not have a marriage certificate because the practice during that time was for elders to agree
upon the betrothal of their children, and in her case, her elder brother was the one who contracted
or entered into [an] agreement with the parents of her husband; that the agreement was that she
and Sy Kiat would be married, the wedding date was set, and invitations were sent out; that the said
agreement was complied with; that she has five children with Sy Kiat, but two of them died; that
those who are alive are Sze Sook Wah, Sze Lai Cho, and Sze Chun Yen, the eldest being Sze Sook
Wah who is already 38 years old; that Sze Sook Wah was born on November 7, 1939; that she and
her husband, Sy Kiat, have been living in Fookien, China before he went to the Philippines on
several occasions; that the practice during the time of her marriage was a written document [is
exchanged] just between the parents of the bride and the parents of the groom, or any elder for that
matter; that in China, the custom is that there is a go-between, a sort of marriage broker who is
known to both parties who would talk to the parents of the bride-to-be; that if the parents of the
bride-to-be agree to have the groom-to-be their son-in-law, then they agree on a date as an
engagement day; that on engagement day, the parents of the groom would bring some pieces of
jewelry to the parents of the bride-to-be, and then one month after that, a date would be set for the
wedding, which in her case, the wedding date to Sy Kiat was set on January 19, 1931; that during the
wedding the bridegroom brings with him a couch (sic) where the bride would ride and on that same
day, the parents of the bride would give the dowry for her daughter and then the document would be
signed by the parties but there is no solemnizing officer as is known in the Philippines; that during
the wedding day, the document is signed only by the parents of the bridegroom as well as by the
parents of the bride; that the parties themselves do not sign the document; that the bride would
then be placed in a carriage where she would be brought to the town of the bridegroom and before
departure the bride would be covered with a sort of a veil; that upon reaching the town of the
bridegroom, the bridegroom takes away the veil; that during her wedding to Sy Kiat (according to
said Chinese custom), there were many persons present; that after Sy Kiat opened the door of the
carriage, two old ladies helped her go down the carriage and brought her inside the house of Sy Kiat;
that during her wedding, Sy Chiok, the eldest brother of Sy Kiat, signed the document with her
mother; that as to the whereabouts of that document, she and Sy Kiat were married for 46 years
already and the document was left in China and she doubt if that document can still be found now;
that it was left in the possession of Sy Kiat's family; that right now, she does not know the
whereabouts of that document because of the lapse of many years and because they left it in a
certain place and it was already eaten by the termites; that after her wedding with Sy Kiat, they
lived immediately together as husband and wife, and from then on, they lived together; that Sy Kiat
went to the Philippines sometime in March or April in the same year they were married; that she
went to the Philippines in 1970, and then came back to China; that again she went back to the
Philippines and lived with Sy Kiat as husband and wife; that she begot her children with Sy Kiat
during the several trips by Sy Kiat made back to China. [CFI decision, pp. 13-15; Rollo, pp. 50-52.]

Second, the testimony of Gan Ching, a younger brother of Yao Kee who stated that he was among the
many people who attended the wedding of his sister with Sy Kiat and that no marriage certificate is
issued by the Chinese government, a document signed by the parents or elders of the parties being
sufficient [CFI decision, pp. 15-16; Rollo, pp. 52-53.]

Third, the statements made by Asuncion Gillego when she testified before the trial court to the effect that
(a) Sy Kiat was married to Yao Kee according to Chinese custom; and, (b) Sy Kiat's admission to her that
he has a Chinese wife whom he married according to Chinese custom [CFI decision, p. 17; Rollo, p. 54.]

Fourth, Sy Kiat's Master Card of Registered Alien issued in Caloocan City on October 3, 1972 where the
following entries are found: "Marital status - Married"; "If married give name of spouse - Yao Kee";
"Address -China"; "Date of marriage -1931"; and "Place of marriage - China" [Exhibit "SS-1".]

Fifth, Sy Kiat's Alien Certificate of Registration issued in Manila on January 12, 1968 where the following
entries are likewise found: "Civil status -Married"; and, "If married, state name and address of spouse -
Yao Kee Chinkang, China" [Exhibit "4".]

And lastly, the certification issued in Manila on October 28, 1977 by the Embassy of the People's
Republic of China to the effect that "according to the information available at the Embassy Mr. Sy Kiat a
Chinese national and Mrs. Yao Kee alias Yui Yip also Chinese were married on January 19, 1931 in
Fukien, the People's Republic of China" [Exhibit "5".]

These evidence may very well prove the fact of marriage between Yao Kee and Sy Kiat. However, the
same do not suffice to establish the validity of said marriage in accordance with Chinese law or custom.

Custom is defined as "a rule of conduct formed by repetition of acts, uniformly observed (practiced) as a
social rule, legally binding and obligatory" [In the Matter of the Petition for Authority to Continue Use of
the Firm Name "Ozaeta, Romulo, de Leon, Mabanta and Reyes", July 30, 1979, 92 SCRA 3, 12 citing JBL
Reyes & RC Puno, Outline of Phil. Civil Law, Fourth Ed., Vol. 1, p. 7.] The law requires that "a custom
must be proved as a fact, according to the rules of evidence" [Article 12, Civil Code.] On this score the
Court had occasion to state that "a local custom as a source of right can not be considered by a court of
justice unless such custom is properly established by competent evidence like any other fact" [Patriarca
v. Orate, 7 Phil. 390, 395 (1907).] The same evidence, if not one of a higher degree, should be required of
a foreign custom.

The law on foreign marriages is provided by Article 71 of the Civil Code which states that:
Art. 71. All marriages performed outside the Philippines in accordance with the laws in force in the
country where they were performed, and valid there as such, shall also be valid in this country,
except bigamous, polygamous, or incestuous marriages, as determined by Philippine law.
**
(Underscoring supplied.)

Construing this provision of law the Court has held that to establish of valid foreign marriage two things
must be proven, namely: (1) the existence of the foreign law as a question of fact; and, (2) the alleged
foreign marriage by convincing evidence [Adong v. Cheong Seng Gee, 43 Phil. 43, 49 (1922).]

In proving a foreign law the procedure is provided in the Rules of Court. With respect to an unwritten
foreign law, Rule 130 section 45 states that:

SEC. 45. Unwritten law. - The oral testimony of witnesses, skilled therein, is admissible as evidence of
the unwritten law of a foreign country, as are also printed and published books of reports of decisions of
the courts of the foreign country, if proved to be commonly admitted in such courts.

Proof of a written foreign law, on the other hand, is provided for under Rule 132 section 25, thus:
SEC. 25. Proof of public or official record. - An official record or an entry therein, when admissible
for any purpose, may be evidenced by an official publication thereof or by a copy attested by the
officer having the legal custody of the record, or by his deputy, and accompanied, if the record is not
kept in the Philippines, with a certificate that such officer has the custody. If the office in which the
record is kept is in a foreign country, the certificate may be made by a secretary of embassy or
legation, consul general, consul, vice consul, or consular agent or by any officer in the foreign service
of the Philippines stationed in the foreign country in which the record is kept and authenticated by
the seal of his office.

The Court has interpreted section 25 to include competent evidence like the testimony of a witness to
prove the existence of a written foreign law [Collector of Internal Revenue v. Fisher, 110 Phil. 686, 700-
701 (1961) citing Willamette Iron and Steel Works v. Muzzal, 61 Phil. 471 (1935).]

In the case at bar petitioner did not present any competent evidence relative to the law and custom of
China on marriage. The testimonies of Yao and Gan Ching cannot be considered as proof of China's law
or custom on marriage not only because they are self-serving evidence, but more importantly, there is no
showing that they are competent to testify on the subject matter. For failure to prove the foreign law or
custom, and consequently, the validity of the marriage in accordance with said law or custom, the
marriage between Yao Kee and Sy Kiat cannot be recognized in this jurisdiction.

Petitioners contend that contrary to the Court of Appeals' ruling they are not duty bound to prove the
Chinese law on marriage as judicial notice thereof had been taken by this Court in the case of Sy Joc
Lieng v. Sy Quia [16 Phil. 137 (1910).]

This contention is erroneous. Well-established in this jurisdiction is the principle that Philippine courts
cannot take judicial notice of foreign laws. They must be alleged and proved as any other fact [Yam Ka
Lim v. Collector of Customs, 30 Phil. 46, 48 (1915); Fluemer v. Hix, 54 Phil. 610 (1930).]

Moreover a reading of said case would show that the party alleging the foreign marriage presented a
witness, one Li Ung Bieng, to prove that matrimonial letters mutually exchanged by the contracting
parties constitute the essential requisite for a marriage to be considered duly solemnized in China. Based
on his testimony, which as found by the Court is uniformly corroborated by authors on the subject of
Chinese marriage, what was left to be decided was the issue of whether or not the fact of marriage in
accordance with Chinese law was duly proven [Sy Joc Lieng v. Sy Quia, supra., at p. 160.]

Further, even assuming for the sake of argument that the Court has indeed taken judicial notice of the
law of China on marriage in the aforecited case, petitioners however have not shown any proof that the
Chinese law or custom obtaining at the time the Sy Joc Lieng marriage was celebrated in 1847 was still
the law when the alleged marriage of Sy Kiat to Yao Kee took place in 1931 or eighty-four (84) years later.

Petitioners moreover cite the case of U.S. v. Memoracion [34 Phil. 63 (1916)] as being applicable to the
instant case. They aver that the judicial pronouncement in the Memoracion case, that the testimony of
one of the contracting parties is competent evidence to show the fact of marriage, holds true in this case.

The Memoracion case however is not applicable to the case at bar as said case did not concern a foreign
marriage and the issue posed was whether or not the oral testimony of a spouse is competent evidence to
prove the fact of marriage in a complaint for adultery.

Accordingly, in the absence of proof of the Chinese law on marriage, it should be presumed that it is the
***
same as ours*** [Wong Woo Yiu v. Vivo, G.R. No. L-21076, March 31, 1965, 13 SCRA 552, 555.] Since
Yao Kee admitted in her testimony that there was no solemnizing officer as is known here in the
Philippines [See Article 56, Civil Code] when her alleged marriage to Sy Kiat was celebrated [CFI
decision, p. 14; Rollo, p. 51], it therefore follows that her marriage to Sy Kiat, even if true, cannot be
recognized in this jurisdiction [Wong Woo Yiu v. Vivo, supra., pp. 555-556.]
1. The second issue raised by petitioners concerns the status of private respondents.
Respondent court found the following evidence of petitioners' filiation:
Sy Kiat's Master Card of Registered Alien where the following are entered: "Children if any:
(1)
give number of children - Four"; and, "Name - All living in China" [Exhibit "SS-1";]

the testimony of their mother Yao Kee who stated that she had five children with Sy Kiat, only
(2) three of whom are alive namely, Sze Sook Wah, Sze Lai Chu and Sze Chin Yan [TSN, December
12, 1977, pp. 9-11;] and,

an affidavit executed on March 22, 1961 by Sy Kiat for presentation to the Local Civil Registrar
(3) of Manila to support Sze Sook Wah's application for a marriage license, wherein Sy Kiat
expressly stated that she is his daughter [Exhibit "3".]

Likewise on the record is the testimony of Asuncion Gillego that Sy Kiat told her he has three daughters
with his Chinese wife, two of whom - Sook Wah and Sze Kai Cho - she knows, and one adopted son [TSN,
December 6, 1977, pp. 87-88.]

However, as petitioners failed to establish the marriage of Yao Kee with Sy Kiat according to the laws of
China, they cannot be accorded the status of legitimate children but only that of acknowledge natural
children. Petitioners are natural children, it appearing that at the time of their conception Yao Kee and Sy
Kiat were not disqualified by any impediment to marry one another [See Art. 269, Civil Code.] And they
are acknowledged children of the deceased because of Sy Kiat's recognition of Sze Sook Wah [Exhibit "3"]
and its extension to Sze Lai Cho and Sy Chun Yen who are her sisters of the full blood [See Art. 271, Civil
Code.]

Private respondents on the other hand are also the deceased's acknowledged natural children with
Asuncion Gillego, a Filipina with whom he lived for twenty-five (25) years without the benefit of
marriage. They have in their favor their father's acknowledgment, evidenced by a compromise agreement
entered into by and between their parents and approved by the Court of First Instance on February 12,
1974 wherein Sy Kiat not only acknowledged them as his children by Asuncion Gillego but likewise made
provisions for their support and future inheritance, thus:

***

2. The parties also acknowledge that they are common-law husband and wife and that out of such
relationship, which they have likewise decided to definitely and finally terminate effective immediately,
they begot five children, namely: Aida Sy, born on May 30, 1950; Manuel Sy, born on July 1, 1953;
Teresita Sy, born on January 28, 1955; Ricardo Sy, now deceased, born on December 14, 1956; and
Rodolfo Sy, born on May 7, 1958.

3. With respect to the AVENUE TRACTOR AND DIESEL PARTS SUPPLY . . ., the parties mutually agree
and covenant that -
The stocks and merchandize and the furniture and equipments . . ., shall be divided into two
equal shares between, and distributed to, Sy Kiat who shall own one-half of the total and the
(a)
other half to Asuncion Gillego who shall transfer the same to their children, namely, Aida Sy,
Manuel Sy, Teresita Sy, and Rodolfo Sy.

the business name and premises . . ., shall be retained by Sy Kiat. However, it shall be his
obligation to give to the aforenamed children an amount of One Thousand Pesos (P1,000.00)
(b)
monthly out of the rental of the two doors of the same building now occupied by Everett
Construction.

***

With respect to the acquisition, during the existence of the common-law husband-and-wife
relationship between the parties, of the real estates and properties registered and/or appearing
in the name of Asuncion Gillego . . ., the parties mutually agree and covenant that the said real
(5)
estates and properties shall be transferred in equal shares to their children, namely, Aida Sy,
Manuel Sy, Teresita Sy, and Rodolfo Sy, but to be administered by Asuncion Gillego during
her lifetime. . . [Exhibit "D".] (Underscoring supplied.)

***

This compromise agreement constitutes a statement before a court of record by which a child may be
voluntarily acknowledged [See Art. 278, Civil Code.]

Petitioners further argue that the questions on the validity of Sy Kiat's marriage to Yao Kee and the
paternity and filiation of the parties should have been ventilated in the Juvenile and Domestic Relations
Court.

Specifically, petitioners rely on the following provision of Republic Act No. 5502, entitled "An Act
Revising Rep. Act No. 3278, otherwise known as the Charter of the City of Caloocan", with regard to the
Juvenile and Domestic Relations Court:

SEC. 91-A. - Creation and Jurisdiction of the Court. -

***

The provisions of the Judiciary Act to the contrary notwithstanding, and the court shall have exclusive
original jurisdiction to hear and decide the following cases:

***

(2) Cases involving custody, guardianship, adoption, revocation of adoption, paternity and
acknowledgments;

(3) Annulment of marriages, relief from marital obligations, legal separation of spouses, and actions for
support;

(4) Proceedings brought under the provisions of title six and title seven, chapters one to three of the civil
code;

***

and the ruling in the case of Bartolome v. Bartolome [G.R. No. L-23661, 21 SCRA 1324] reiterated in
Divinagracia v. Rovira [G.R. No. L-42615, 72 SCRA 307.]

With the enactment of Batas Pambansa Blg. 129, otherwise known as the Judicially Reorganization Act of
1980, the Juvenile and Domestic Relations Courts were abolished. Their functions and jurisdiction are
now vested with the Regional Trial Courts [See Section 19 (7), B.P. Blg. 129 and Divinagracia v. Belosillo,
G.R. No. L-47407, August 12, 1986, 143 SCRA 356, 360] hence it is no longer necessary to pass upon the
issue of jurisdiction raised by petitioners.

Moreover, even without the enactment of Batas Pambansa Blg. 129 we find in Rep. Act No. 5502 sec. 91-
A last paragraph that:

***
If any question involving any of the above matters should arise as an incident in any case pending in
the ordinary court, said incident shall be determined in the main case.

***

As held in the case of Divinagracia v. Rovira [G.R. No. L-42615, August 10, 1976, 72 SCRA 307]:

***
****
It is true that under the aforequoted section 1 of Republic Act No. 4834 a case involving
paternity and acknowledgment may be ventilated as an incident in the intestate or testate
proceeding (See Baluyot vs. Ines Luciano, L-42215, July 13, 1976). But that legal provision
presupposes that such an administration proceeding is pending or existing and has not been
terminated. [at pp. 313-314.] (Underscoring supplied.)

***

The reason for this rule is not only "to obviate the rendition of conflicting rulings on the same issue by the
Court of First Instance and the Juvenile and Domestic Relations Court". [Vda. de Baluyut v. Luciano,
G.R. No. L-42215, July 13, 1976, 72 SCRA 52, 63] but more importantly to prevent multiplicity of suits.

Accordingly, this Court finds no reversible error committed by respondent court.

WHEREFORE, the decision of the Court of Appeals is hereby AFFIRMED.

SO ORDERED.

Fernan, C.J., (Chairman), Gutierrez, Jr., Feliciano, and Bidin, JJ., concur.

*
* The petition for review in G.R. No. 56045 was denied for lack of merit on March 9, 1981. Counsel for the
petitioners then filed a Motion for Consolidation and for Extension of Time to File Motion for
Reconsideration which was granted on July 8, 1981. On February 17, 1982, however, petitioners' motion
for reconsideration of the resolution of March 9, 1981 was denied.

** Other than the exceptions contained in this article, this provision of law is derived from section 19, Act
No. 3613 and section IV, General Order No. 68.

*** The presumption that, in the absence of proof, the foreign law is the same as the law of the forum, is
known as processual presumption which has been applied by this Court in the cases of Lim v. The Insular
Collector of Customs, 36 Phil. 472 (1917); International Harvester Co. in Russia v. Hamburg-American
Line, 42 Phil. 845 (1918); Miciano v. Brimo, 50 Phil. 867 (1924); and Rayray v. Chae Kyung Lee, G.R. No.
L-18176, October 26, 1966, 18 SCRA 450.

**** Rep. Act 4834 created the Juvenile and Domestic Relations Court of Iloilo. Section 1 of said Act is
the exact copy of section 19-A of Rep. Act 5502.
445 Phil. 770

FIRST DIVISION

[ G.R. No. 136804, February 19, 2003 ]

MANUFACTURERS HANOVER TRUST CO. AND/OR CHEMICAL BANK, PETITIONERS, VS. RAFAEL
MA. GUERRERO, RESPONDENT.

DECISION
CARPIO, J.:
The Case

[1]
This is a petition for review under Rule 45 of the Rules of Court to set aside the Court of Appeals'
[2]
Decision of August 24, 1998 and Resolution of December 14, 1998 in CA-G.R. SP No. 42310 affirming
the trial court's denial of petitioners' motion for partial summary judgment.

The Antecedents

On May 17, 1994, respondent Rafael Ma. Guerrero ("Guerrero" for brevity) filed a complaint for damages
against petitioner Manufacturers Hanover Trust Co. and/or Chemical Bank ("the Bank" for brevity) with
the Regional Trial Court of Manila ("RTC" for brevity). Guerrero sought payment of damages allegedly
for (1) illegally withheld taxes charged against interests on his checking account with the Bank; (2) a
returned check worth US$18,000.00 due to signature verification problems; and (3) unauthorized
conversion of his account. Guerrero amended his complaint on April 18, 1995.

On September 1, 1995, the Bank filed its Answer alleging, inter alia, that by stipulation Guerrero's
account is governed by New York law and this law does not permit any of Guerrero's claims except actual
damages. Subsequently, the Bank filed a Motion for Partial Summary Judgment seeking the dismissal of
Guerrero's claims for consequential, nominal, temperate, moral and exemplary damages as well as
attorney's fees on the same ground alleged in its Answer. The Bank contended that the trial should be
limited to the issue of actual damages. Guerrero opposed the motion.

The affidavit of Alyssa Walden, a New York attorney, supported the Bank's Motion for Partial Summary
Judgment. Alyssa Walden's affidavit ("Walden affidavit" for brevity) stated that Guerrero's New York
bank account stipulated that the governing law is New York law and that this law bars all of Guerrero's
claims except actual damages. The Philippine Consular Office in New York authenticated the Walden
affidavit.

The RTC denied the Bank's Motion for Partial Summary Judgment and its motion for reconsideration on
March 6, 1996 and July 17, 1996, respectively. The Bank filed a petition for certiorari and prohibition
with the Court of Appeals assailing the RTC Orders. In its Decision dated August 24, 1998, the Court of
Appeals dismissed the petition. On December 14, 1998, the Court of Appeals denied the Bank's motion
for reconsideration.

Hence, the instant petition.

The Ruling of the Court of Appeals

The Court of Appeals sustained the RTC orders denying the motion for partial summary judgment. The
Court of Appeals ruled that the Walden affidavit does not serve as proof of the New York law and
jurisprudence relied on by the Bank to support its motion. The Court of Appeals considered the New York
law and jurisprudence as public documents defined in Section 19, Rule 132 of the Rules on Evidence, as
follows:
"SEC. 19. Classes of Documents. For the purpose of their presentation in evidence, documents are
either public or private.

Public documents are:

The written official acts, or records of the official acts of the sovereign authority,
(a) official bodies and tribunals, and public officers, whether of the Philippines, or of a
foreign country;

x x x."

The Court of Appeals opined that the following procedure outlined in Section 24, Rule 132 should be
followed in proving foreign law:
"SEC. 24. Proof of official record. The record of public documents referred to in paragraph (a) of
Section 19, when admissible for any purpose, may be evidenced by an official publication thereof or
by a copy attested by the officer having the legal custody of the record, or by his deputy, and
accompanied, if the record is not kept in the Philippines, with a certificate that such officer has the
custody. If the office in which the record is kept is in a foreign country, the certificate may be made
by a secretary of the embassy or legation, consul general, consul, vice consul, or consular agent or by
any officer in the foreign service of the Philippines stationed in the foreign country in which the
record is kept, and authenticated by the seal of his office."

The Court of Appeals likewise rejected the Bank's argument that Section 2, Rule 34 of the old Rules of
Court allows the Bank to move with the supporting Walden affidavit for partial summary judgment in its
favor. The Court of Appeals clarified that the Walden affidavit is not the supporting affidavit referred to
in Section 2, Rule 34 that would prove the lack of genuine issue between the parties. The Court of
Appeals concluded that even if the Walden affidavit is used for purposes of summary judgment, the Bank
must still comply with the procedure prescribed by the Rules to prove the foreign law.

The Issues

The Bank contends that the Court of Appeals committed reversible error in -
"x x x HOLDING THAT [THE BANK'S] PROOF OF FACTS TO SUPPORT ITS MOTION FOR
SUMMARY JUDGMENT MAY NOT BE GIVEN BY AFFIDAVIT;

x x x HOLDING THAT [THE BANK'S] AFFIDAVIT, WHICH PROVES FOREIGN LAW AS A FACT,
IS "HEARSAY" AND THEREBY 'CANNOT SERVE AS PROOF OF THE NEW YORK LAW RELIED
[3]
UPON BY PETITIONERS IN THEIR MOTION FOR SUMMARY JUDGMENT x x x'."

First, the Bank argues that in moving for partial summary judgment, it was entitled to use the Walden
affidavit to prove that the stipulated foreign law bars the claims for consequential, moral, temperate,
nominal and exemplary damages and attorney's fees. Consequently, outright dismissal by summary
judgment of these claims is warranted.

Second, the Bank claims that the Court of Appeals mixed up the requirements of Rule 35 on summary
judgments and those of a trial on the merits in considering the Walden affidavit as "hearsay." The Bank
points out that the Walden affidavit is not hearsay since Rule 35 expressly permits the use of affidavits.

Lastly, the Bank argues that since Guerrero did not submit any opposing affidavit to refute the facts
contained in the Walden affidavit, he failed to show the need for a trial on his claims for damages other
than actual.

The Court's Ruling

The petition is devoid of merit.

The Bank filed its motion for partial summary judgment pursuant to Section 2, Rule 34 of the old Rules
of Court which reads:
"Section 2. Summary judgment for defending party. A party against whom a claim, counterclaim,
or cross-claim is asserted or a declaratory relief is sought may, at any time, move with supporting
affidavits for a summary judgment in his favor as to all or any part thereof."

A court may grant a summary judgment to settle expeditiously a case if, on motion of either party, there
appears from the pleadings, depositions, admissions, and affidavits that no important issues of fact are
involved, except the amount of damages. In such event, the moving party is entitled to a judgment as a
matter of law.[4]

In a motion for summary judgment, the crucial question is: are the issues raised in the pleadings
genuine, sham or fictitious, as shown by affidavits, depositions or admissions accompanying the
motion?[5]

A genuine issue means an issue of fact which calls for the presentation of evidence as distinguished from
an issue which is fictitious or contrived so as not to constitute a genuine issue for trial.[6]

A perusal of the parties' respective pleadings would show that there are genuine issues of fact that
necessitate formal trial. Guerrero's complaint before the RTC contains a statement of the ultimate facts
on which he relies for his claim for damages. He is seeking damages for what he asserts as "illegally
withheld taxes charged against interests on his checking account with the Bank, a returned check worth
US$18,000.00 due to signature verification problems, and unauthorized conversion of his account." In
its Answer, the Bank set up its defense that the agreed foreign law to govern their contractual relation
bars the recovery of damages other than actual. Apparently, facts are asserted in Guerrero's complaint
while specific denials and affirmative defenses are set out in the Bank's answer.

True, the court can determine whether there are genuine issues in a case based merely on the affidavits or
counter-affidavits submitted by the parties to the court. However, as correctly ruled by the Court of
Appeals, the Bank's motion for partial summary judgment as supported by the Walden affidavit does not
demonstrate that Guerrero's claims are sham, fictitious or contrived. On the contrary, the Walden
affidavit shows that the facts and material allegations as pleaded by the parties are disputed and there are
substantial triable issues necessitating a formal trial.
There can be no summary judgment where questions of fact are in issue or where material allegations of
the pleadings are in dispute.[7] The resolution of whether a foreign law allows only the recovery of actual
damages is a question of fact as far as the trial court is concerned since foreign laws do not prove
themselves in our courts.[8] Foreign laws are not a matter of judicial notice.[9] Like any other fact, they
must be alleged and proven. Certainly, the conflicting allegations as to whether New York law or
Philippine law applies to Guerrero's claims present a clear dispute on material allegations which can be
resolved only by a trial on the merits.

Under Section 24 of Rule 132, the record of public documents of a sovereign authority or tribunal may be
proved by (1) an official publication thereof or (2) a copy attested by the officer having the
legal custody thereof. Such official publication or copy must be accompanied, if the record is not kept
in the Philippines, with a certificate that the attesting officer has the legal custody thereof. The certificate
may be issued by any of the authorized Philippine embassy or consular officials stationed in the foreign
country in which the record is kept, and authenticated by the seal of his office. The attestation must state,
in substance, that the copy is a correct copy of the original, or a specific part thereof, as the case may be,
and must be under the official seal of the attesting officer.

Certain exceptions to this rule were recognized in Asiavest Limited v. Court of Appeals[10] which
held that:
"x x x:

Although it is desirable that foreign law be proved in accordance with the above rule, however, the
Supreme Court held in the case of Willamette Iron and Steel Works v. Muzzal, that Section 41, Rule
123 (Section 25, Rule 132 of the Revised Rules of Court) does not exclude the presentation of other
competent evidence to prove the existence of a foreign law. In that case, the Supreme Court
considered the testimony under oath of an attorney-at-law of San Francisco, California, who quoted
verbatim a section of California Civil Code and who stated that the same was in force at the time the
obligations were contracted, as sufficient evidence to establish the existence of said law.
Accordingly, in line with this view, the Supreme Court in the Collector of Internal Revenue v. Fisher
et al., upheld the Tax Court in considering the pertinent law of California as proved by the
respondents' witness. In that case, the counsel for respondent "testified that as an active member of
the California Bar since 1951, he is familiar with the revenue and taxation laws of the State of
California. When asked by the lower court to state the pertinent California law as regards exemption
of intangible personal properties, the witness cited Article 4, Sec. 13851 (a) & (b) of the California
Internal and Revenue Code as published in Derring's California Code, a publication of Bancroft-
Whitney Co., Inc. And as part of his testimony, a full quotation of the cited section was offered in
evidence by respondents." Likewise, in several naturalization cases, it was held by the Court that
evidence of the law of a foreign country on reciprocity regarding the acquisition of citizenship,
although not meeting the prescribed rule of practice, may be allowed and used as basis for favorable
action, if, in the light of all the circumstances, the Court is "satisfied of the authenticity of the
written proof offered." Thus, in a number of decisions, mere authentication of the Chinese
Naturalization Law by the Chinese Consulate General of Manila was held to be competent proof of
that law." (Emphasis supplied)

The Bank, however, cannot rely on Willamette Iron and Steel Works v. Muzzal or Collector of
Internal Revenue v. Fisher to support its cause. These cases involved attorneys testifying in open
court during the trial in the Philippines and quoting the particular foreign laws sought to be established.
On the other hand, the Walden affidavit was taken abroad ex parte and the affiant never testified in open
court. The Walden affidavit cannot be considered as proof of New York law on damages not only because
it is self-serving but also because it does not state the specific New York law on damages. We reproduce
portions of the Walden affidavit as follows:
"3. In New York, "[n]ominal damages are damages in name only, trivial sums such as six cents or $1.
Such damages are awarded both in tort and contract cases when the plaintiff establishes a cause of
action against the defendant, but is unable to prove" actual damages. Dobbs, Law of Remedies, §
3.32 at 294 (1993). Since Guerrero is claiming for actual damages, he cannot ask for nominal
damages.

4. There is no concept of temperate damages in New York law. I have reviewed Dobbs, a well-
respected treatise, which does not use the phrase "temperate damages" in its index. I have also done
a computerized search for the phrase in all published New York cases, and have found no cases that
use it. I have never heard the phrase used in American law.

5. The Uniform Commercial Code ("UCC") governs many aspects of a Bank's relationship with its
depositors. In this case, it governs Guerrero's claim arising out of the non-payment of the $18,000
check. Guerrero claims that this was a wrongful dishonor. However, the UCC states that "justifiable
refusal to pay or accept" as opposed to dishonor, occurs when a bank refuses to pay a check for
reasons such as a missing indorsement, a missing or illegible signature or a forgery, § 3-510, Official
Comment 2. ….. to the Complaint, MHT returned the check because it had no signature card on ….
and could not verify Guerrero's signature. In my opinion, consistent with the UCC, that is a
legitimate and justifiable reason not to pay.

6. Consequential damages are not available in the ordinary case of a justifiable refusal to pay. UCC
1-106 provides that "neither consequential or special or punitive damages may be had except as
specifically provided in the Act or by other rule of law". UCC 4-103 further provides that
consequential damages can be recovered only where there is bad faith. This is more restrictive than
the New York common law, which may allow consequential damages in a breach of contract case (as
does the UCC where there is a wrongful dishonor).

7. Under New York law, requests for lost profits, damage to reputation and mental distress are
considered consequential damages. Kenford Co., Inc. v. Country of Erie, 73 N.Y.2d 312, 319, 540
N.Y.S.2d 1, 4-5 (1989) (lost profits); Motif Construction Corp. v. Buffalo Savings Bank, 50 A.D.2d
718, 374 N.Y.S..2d 868, 869-70 (4th Dep't 1975) damage to reputation); Dobbs, Law of Remedies
§12.4(1) at 63 (emotional distress).

8. As a matter of New York law, a claim for emotional distress cannot be recovered for a breach of
contract. Geler v. National Westminster Bank U.S.A., 770 F. Supp. 210, 215 (S.D.N.Y. 1991);
Pitcherello v. Moray Homes, Ltd., 150 A.D.2d 860,540 N.Y.S.2d 387, 390 (3d Dep't 1989) Martin v.
nd
Donald Park Acres, 54 A.D.2d 975, 389 N.Y.S..2d 31, 32 (2 Dep't 1976). Damage to reputation is
also not recoverable for a contract. Motif Construction Corp. v. Buffalo Savings Bank, 374 N.Y.S.2d
at 869-70.

9. In cases where the issue is the breach of a contract to purchase stock, New York courts will not
take into consideration the performance of the stock after the breach. Rather, damages will be based
on the value of the stock at the time of the breach, Aroneck v. Atkin, 90 A.D.2d 966, 456 N.Y.S.2d
th
558, 559 (4 Dep't 1982), app. den. 59 N.Y.2d 601, 449 N.E.2d 1276, 463 N.Y.S.2d 1023 (1983).

10. Under New York law, a party can only get consequential damages if they were the type that
would naturally arise from the breach and if they were "brought within the contemplation of parties
as the probable result of the breach at the time of or prior to contracting." Kenford Co., Inc. v.
Country of Erie, 73 N.Y.2d 312, 319, 540 N.Y.S.2d 1, 3 (1989), (quoting Chapman v. Fargo, 223 N.Y.
32, 36 (1918).

11. Under New York law, a plaintiff is not entitled to attorneys' fees unless they are provided by
contract or statute. E.g., Geler v. National Westminster Bank, 770 F. Supp. 210, 213 (S.D.N.Y. 1991);
Camatron Sewing Mach, Inc. v. F.M. Ring Assocs., Inc., 179 A.D.2d 165, 582 N.Y.S.2d 396 (1st Dep't
1992); Stanisic v. Soho Landmark Assocs., 73 A.D.2d 268, 577 N.Y.S.2d 280, 281 (1st Dep't 1991).
There is no statute that permits attorney's fees in a case of this type.

12. Exemplary, or punitive damages are not allowed for a breach of contract, even where the plaintiff
claims the defendant acted with malice. Geler v. National Westminster Bank, 770 F.Supp. 210, 215
(S.D.N.Y. 1991); Catalogue Service of …chester[11]_v. Insurance Co. of North America, 74 A.D.2d
837, 838, 425 N.Y.S.2d 635, 637 (2d Dep't 1980); Senior v. Manufacturers Hanover Trust Co., 110
A.D.2d 833, 488 N.Y.S.2d 241, 242 (2d Dep't 1985).

13. Exemplary or punitive damages may be recovered only where it is alleged and proven that the
wrong supposedly committed by defendant amounts to a fraud aimed at the public generally and
involves a high moral culpability. Walker v. Sheldon, 10 N.Y.2d 401, 179 N.E.2d 497, 223 N.Y.S.2d
488 (1961).

14. Furthermore, it has been consistently held under New York law that exemplary damages are not
available for a mere breach of contract for in such a case, as a matter of law, only a private wrong
and not a public right is involved. Thaler v. The North Insurance Company, 63 A.D.2d 921, 406
N.Y.S.2d 66 (1st Dep't 1978)."[12]

The Walden affidavit states conclusions from the affiant's personal interpretation and opinion of the facts
of the case vis a vis the alleged laws and jurisprudence without citing any law in particular. The citations
in the Walden affidavit of various U.S. court decisions do not constitute proof of the official records or
decisions of the U.S. courts. While the Bank attached copies of some of the U.S. court decisions cited in
the Walden affidavit, these copies do not comply with Section 24 of Rule 132 on proof of official records
or decisions of foreign courts.

The Bank's intention in presenting the Walden affidavit is to prove New York law and jurisprudence.
However, because of the failure to comply with Section 24 of Rule 132 on how to prove a foreign law and
decisions of foreign courts, the Walden affidavit did not prove the current state of New York law and
jurisprudence. Thus, the Bank has only alleged, but has not proved, what New York law and
jurisprudence are on the matters at issue.

Next, the Bank makes much of Guerrero's failure to submit an opposing affidavit to the Walden affidavit.
However, the pertinent provision of Section 3, Rule 35 of the old Rules of Court did not make the
submission of an opposing affidavit mandatory, thus:
"SEC. 3. Motion and proceedings thereon. The motion shall be served at least ten (10) days before
the time specified for the hearing. The adverse party prior to the day of hearing may serve
opposing affidavits. After the hearing, the judgment sought shall be rendered forthwith if the
pleadings, depositions and admissions on file, together with the affidavits, show that, except as to
the amount of damages, there is no genuine issue as to any material fact and that the moving party
is entitled to a judgment as a matter of law." (Emphasis supplied)

[13]
It is axiomatic that the term "may" as used in remedial law, is only permissive and not mandatory.
Guerrero cannot be said to have admitted the averments in the Bank's motion for partial summary
judgment and the Walden affidavit just because he failed to file an opposing affidavit. Guerrero opposed
the motion for partial summary judgment, although he did not present an opposing affidavit. Guerrero
may not have presented an opposing affidavit, as there was no need for one, because the Walden affidavit
did not establish what the Bank intended to prove. Certainly, Guerrero did not admit, expressly or
impliedly, the veracity of the statements in the Walden affidavit. The Bank still had the burden of proving
New York law and jurisprudence even if Guerrero did not present an opposing affidavit. As the party
moving for summary judgment, the Bank has the burden of clearly demonstrating the absence of any
genuine issue of fact and that any doubt as to the existence of such issue is resolved against the movant.
[14]

Moreover, it would have been redundant and pointless for Guerrero to submit an opposing affidavit
considering that what the Bank seeks to be opposed is the very subject matter of the complaint. Guerrero
need not file an opposing affidavit to the Walden affidavit because his complaint itself controverts the
matters set forth in the Bank's motion and the Walden affidavit. A party should not be made to deny
matters already averred in his complaint.

There being substantial triable issues between the parties, the courts a quo correctly denied the Bank's
motion for partial summary judgment. There is a need to determine by presentation of evidence in a
regular trial if the Bank is guilty of any wrongdoing and if it is liable for damages under the applicable
laws.

This case has been delayed long enough by the Bank's resort to a motion for partial summary judgment.
Ironically, the Bank has successfully defeated the very purpose for which summary judgments were
devised in our rules, which is, to aid parties in avoiding the expense and loss of time involved in a trial.

WHEREFORE, the petition is DENIED for lack of merit. The Decision dated August 24, 1998 and the
Resolution dated December 14, 1998 of the Court of Appeals in CA-G.R. SP No. 42310 is AFFIRMED.

SO ORDERED.

Davide, Jr., C.J., (Chairman), Vitug, and Azcuna, JJ., concur.

Ynares-Santiago, J., no part.

[1] Twelfth Division composed of Justices Consuelo Ynares-Santiago (ponente), Romeo J. Callejo, Sr. and
Mariano M. Umali.

[2] Entitled "Manufacturers Hanover Trust Co. and/or Chemical Bank, Petitioners, versus Hon.
Hermogenes R. Liwag, Presiding Judge, Regional Trial Court of Manila, Branch 55, and Rafael Ma.
Guerrero, Respondents."

[3] Rollo, pp. 8-9.

[4] Garcia v. Court of Appeals, 312 SCRA 180 (1999).

[5] Diman v. Alumbres, 299 SCRA 459 (1998).

[6]
[6] Paz v. Court of Appeals, 181 SCRA 26 (1990).

[7] National Irrigation Administration v. Gamit, 215 SCRA 436 (1992).

[8] Llorente v. Court of Appeals, 345 SCRA 592 (2000).

[9] Ibid.

[10] 296 SCRA 539 (1998).

[11] Illegible.

[12] Rollo, pp. 26-30.

[13] Shauf v. Court of Appeals, 191 SCRA 713 (1990).

[14] Natalia Realty Corporation v. Vallez, 173 SCRA 534 (1989).

[ GR No. L-26053, Feb 21, 1967 ]

CITY OF MANILA v. GERARDO GARCIA—CAMIENCITA VILLANUEV

DECISION
125 Phil. 803

SANCHEZ, J.:
Plaintiff City of Manila is owner of parcels of land, forming one compact area, bordering Kansas,
Vermont and Singalong streets in Malate, Manila, and covered by Torrens titles Nos. 49763, 37082 and
37558. Shortly after liberation, from 1945 to 1947, defendants entered upon these premises without
plaintiffs knowledge and consent. They built houses of second class materials, again without plaintiff's
knowledge and consent, and without the necessary building permits from the city. There they lived thru
the years to the present.

In November, 1947, the presence of defendants having previously been discovered, defendants Felicidad
Miranda (Emigdio Egipto), Modesta C. Parayno, Benedicto Diaz, Laureano Dizo, Jose Barrientos, Elena
Ramos, Estefanía, Nepacina, Modesta Sanchez, Honorio Beriño, Gloria Velasco, Ana Dequis Alunan and
Benedicto Ofiaza (predecessor of defendant Carandang) were given by Mayor Valeriano E. Fugoso
written permits each labeled "lease contract" to occupy specific areas in the property upon conditions
therein set forth. Defendants Isabelo Obaob and Gerardo Garcia (in the name of Marta A. Villanueva)
received their permits from Mayor Manuel de la Fuente on January 29 and March 18, respectively, both
of 1948. The rest of the 23 defendants exhibited none.

For their occupancy, defendants were charged nominal rentals.

Following are the rentals due as of February, 1962:

Amount due from date
of
Name Area in Sq. m. Monthly rental deliquency to Feb. 1962

1. Gerardo Garcia 66.00 P7.92 P1,628.97

2. Modesta C. Parayno 87.75 10.53 379.08
3. Juan Ásperas 39.00 4.68 9.36
4. Maria Tabia 35.20 5.76 570.24
5. Aquilino Barrios 54.00 4.32 99.36
(Leonora Euiz)
6. Laurenano Dizo 35.00 2.80 22.40
7. Bernabé Ayuda 39.60 3.17 323.34
8. Isabelo Obaob 75.52 9.06 208.38
9. Jose Barrientos 39.53 4.74 744.18
10. Cecilia Manzano in
lieu of Urbano Ramos46.65 5.60 Paid up to Feb. 1962.
(deceased)
11. Elena Ramos 34.80 2.78 186.26
12. Estefanía Nepacina 41.80 3.34 504.34
13. Modesta Sanchez 33.48 2.68 444.88
14. Marcial Lázaro 22.40 1.79 688.32
15. Marciano Alano 25.80 2.06 255.44
16. Honorio Beriño 24.00 1.92 188.16
17. Gloria Velasco 32.40 2.59 56.98
18. Wilarico Ricamata 45.83 3.67 739.68
19. Benedicto Diaz 40.20 4.82 Paid up to March 1962.
20. Ana Dequis Alunan 64.26 7.71 30.84
21. Lorenzo Carandang 45.03 5.40 437.40
22. Juan N. Pecayo 25.52 3.06 30.60
23. Felicidad Miranda 48.02 5.76 132.48
===============
P7,580.69

Epifanio de los Santos Elementary School is close, though not contiguous, to the property. Came the need
for this school's expansion; it became pressing. On September 14 1961, plaintiff's City Engineer, pursuant
to the Mayor's directive to clear squatters' houses on city property, gave each of defendants thirty (30)
days to vacate and remove his construction or improvement on the premises. This was followed by the
City Treasurer's demand on each defendant, made in February and March, 1962, for the payment of the
amount due by reason of the occupancy and to vacate in fifteen (15) days. Defendants refused. Hence,
this suit to recover possession.[2]

The judgment below directed defendants to vacate the premises; to pay the amounts heretofore indicated
opposite their respective names; and to pay their monthly rentals from March, 1962, until they vacate the
said premises, and the costs. Defendants appealed.

1. We are called upon to rule on the forefront question of whether the trial court properly found that the
city needs the premises for school purposes.

The city's evidence on this point is Exhibit E, the certification of the Chairman, Committee on
Appropriations of the Municipal Board. That document recites that the amount of P100,000.00 had been
set aside in Ordinance 4566, the 1962-1963 Manila City Budget, for the construction of an additional
building of the Epifanio de los Santos Elementary School. It is indeed correct to say that the court below,
at the hearing, ruled out the admissibility of said document. But then, in the decision under review, the
trial judge obviously revised his views. He there declared that there was need for defendants to vacate the
premise for school expansion; he cited the very document, Exhibit E, aforesaid.

It is beyond debate that a court of justice may alter its ruling while the case is within its power, to make it
conformable to law and justice.[3] Such was done here. Defendants' remedy was to bring to the attention
of the court its contradictory stance. Not having done so, this Court will not reopen the case solely for this
purpose.[4]

Anyway, elimination of the certification, Exhibit E, as evidence, would not profit defendants. For, in
reversing his stand, the trial judge could well have taken because he was duty bound to take judicial
notice [5] of Ordinance 4566. The reason being that the city charter of Manila requires all courts sitting
therein to take judicial notice of all ordinances passed by the municipal board of Manila.[6] And,
Ordinance 4566 itself confirms the certification aforesaid that an appropriation of P100.000.00 was set
aside for the "construction of additional building" of the Epifanio de los Santos Elementary School.

Further more, defendants' position is vulnerable to assault from a third direction. Defendants have
absolutely no right to remain in the premises. The excuse that they have permits from the mayor is at
best flimsy. The permits to occupy are revocable on thirty day's notice. They have been asked to leave;
they refused to heed. It is in this factual background that we say that the city's need for the premises is
unimportant. The city's right to throw defendants out of the area cannot be gainsaid. The city's dominical
right to possession is paramount. If error there was in the finding that the city needs the land, such error
is harmless and will not justify reversal of the judgment below.[7]

2. But defendants insist that they have acquired the legal status of tenants. They are wrong.

They entered the land, built houses of second class materials thereon without the knowledge and consent
of the city. Their homes were erected without city permits. These constructions are illegal. In a language
familiar to all, defendants are squatters.

Since the last global war, squatting on another's property in this country has become a widespread vice-
It was and is a blight. Squatters' areas pose problems of health, sanitation. They are breeding places for
crime. They constitute proof that respect for the law and the right of others, even those of the government
are being flouted. Knowingly, squatters have embarked on the pernicious act of occupying property
whenever and wherever convenient to their interests without as much as leave, and even against the will,
of the owner. They are emboldened seemingly because of their belief that they could violate the law with
impunity. The pugnaciousness of some of them has tied up the hands of legitimate owners. The latter are
thus prevented from recovering possession by peaceful means. Government lands have not been spared
by them. They know, of course, that intrusion into property, government or private, is wrong. But, then,
the mills of justice grind slow, mainly because of lawyers who, by means fair or foul, are quite often
successful in procuring delay of the day of reckoning. Rampancy of forcible entry into government lands
particularly, is abetted by the apathy of some public officials to enforce the government's rights.
Obstinacy of these squatters is difficult to explain unless it is spawned by official tolerance, if not outright
encouragement or protection. Said squatters have become insensible to the difference between right and
wrong. To them, violation of law means nothing. With the result that squatting still exist, much to the
detriment of public interest. It is high time that, in this aspect, sanity and the rule of law be restored. It is
in this environment that we look into the validity of the permits granted defendants herein.
These permits, erroneously labeled "lease" contracts, were issued by the mayors in 1947 and 1948 when
the effects of the war had simmered down and when these defendants could have very well adjusted
themselves. Two decades have now elapsed since the unlawful entry. Defendants could have, if they
wanted to, located permanent premises for their abode. And yet, usurpers that they are, they preferred to
remain on city property.

Defendants' entry as aforesaid was illegal. Their constructions are as illegal, without permits. [8] The city
charter enjoins the mayor to "safeguard all the lands" of the City of Manila.[9]

Surely enough, the permits granted did not "safeguard" the city's land in question. It is our considered
view that the Mayor of the City of Manila cannot legalize forcible entry into public property by the simple
expedient of giving permits or, for that matter, executing leases.

Squatting is unlawful and no amount of acquiescence on the part of the city officials will elevate it into a
lawful act. In principle, a compound of illegal entry and official permit to stay is obnoxious to our concept
of proper official norm of conduct. Because, such permit does not serve social justice; it fosters moral
decadence. It does not promote public welfare; it abets disrespect for the law. It has its roots in vice; so it
is an infected bargain. Official approval of squatting should not, therefore, be permitted to obtain in this
country Avhere there is an orderly form of government.

We, accordingly, rule that the Manila mayors did not have authority to give permits, written or oral, to
defendants, and that the permits herein granted are null and void.

3- Let us look into the houses and constructions planted by defendants on the premises. They clearly
hinder and impair the use of that property for school purposes. The courts may well take judicial notice
of the fact that hous-, ing school children in the elementary grades has been and still is a perennial
problem in the city. The selfish interests of defendants must have to yield to the general good. The public
purpose of constructing the school building annex is paramount-[10]

In the situation thus obtaining, the houses and constructions aforesaid constitute public nuisance per se.
And this, for the reason that they hinder and impair the use of the property for a badly needed school
building, to the prejudice of the education of the youth of the land.[11] They shackle the hands of the
government and thus obstruct performance of its constitutionally ordained obligation to establish and
maintain a complete and adequate system of public education, and more, to "provide at least free public
primary instruction". [12]

Reason dictates that no further delay should be countenanced. The public nuisance could well have been
sum-, marily abated by the city authorities themselves, even without the aid of the courts.[13]

4. Defendants challenge the jurisdiction of the Court of First Instance of Manila. They say that the case
should have been started in the municipal court. They prop up their position by the averment that notice
for them to vacate was only served in September, 1961, and suit was started in July, 1962, Their legal
ground is Section 1, Rule 70) of the Rules of Court. We have reached the conclusion that their forcible
entry dates back to the period from 1945 to 1947. That entry was not legalized by the permits. Their
possession continued to remain illegal from incipiency. Suit was filed long after the one-year limitation
set forth in Section 1 of Rule 70 And the Manila Court of First Instance has jurisdiction.[14]

Upon the premises, we vote to affirm the judgment under review. Costs against defendants-appellants.
So ordered.
Concepcion, C.J., Reyes, J. B. L., Dizon, Regala, Makalintal, Bengzon, J.P., Zaldivar, and Ruiz Castro
JJ., concur.

Judgment affirmed.

[1] Substituted by Cecilia Manzano, R.A., p. 70 and Tr., p. 16.

[2] Civil Case No. 51087, Court of First Instance of Manila.

[3] Section 5, Rule 124 of the 1940 Rules of Court, now Section 5, Rule 135 of the new Rules of Court;
Veluz vs. The Justice of the Peace of Sariaya, 42 Phil. 557, 563.

[4] People vs. Singh, 45 Phil. 676, 679.

[5] "Section 5, Rule 123, 1940 Rules of Court; Section 1, Rule 129, new Rules of Court.

[6] Section 50, Manila Charter.

[7] Section 3, Rule 53, 1940 Rules of Court; Section 5, Rule 51, new ule of Court. J. M. Tuason & Co., Inc.
vs. Magdañg-al, . L-15539, - 30, 1962; Joson vs. Nable, 87 Phil. 337, 340; J. M. Tuason Inc. vs. de la Rosa,
L-21904, October 29, 1966.

[8] Sections 34 and 86, Revised Ordinances of the City of Manila, Ordinance No. 1600.

[9] Section 11 (b), Manila Charter.

[10] Dillon, Municipal Corporation, 5th Edition Vol III pp 1593-1594.

[11] Article 694 (5), Civil. Code.

[12] Section 5, Article xiv, Constitution.

[13] Sitehon vs. Aquino, 98 Phil. 458, 464-466; :Halili vs. Lacsón, 98
Phil. 772, 774-775; Quinto vs. Dacson, 50 Off Gaz., No. 29, pp-5095-509:6.

[14] Vol. I, Nuevas, Remedial Law, 1960 Ed., p. 597 and case cited; Vol. III, Moran, comments on the
Rules of Court, 1963 ed., p. 274.
DIVISION

[ GR No. 156052, Feb 13, 2008 ]

SOCIAL JUSTICE SOCIETY v. JOSE L. ATIENZA

RESOLUTION
568 Phil. 658

CORONA, J.:
After we promulgated our decision in this case on March 7, 2007, Chevron Philippines Inc. (Chevron),
Petron Corporation (Petron) and Pilipinas Shell Petroleum Corporation (Shell) (collectively, the oil
companies) and the Republic of the Philippines, represented by the Department of Energy (DOE), filed
their respective motions for leave to intervene and for reconsideration of the decision.

[1]
Chevron is engaged in the business of importing, distributing and marketing of petroleum products in
the Philippines while Shell and Petron are engaged in the business of manufacturing, refining and
[2]
likewise importing, distributing and marketing of petroleum products in the Philippines. The DOE is a
[3]
governmental agency created under Republic Act (RA) No. 7638 and tasked to prepare, integrate,
coordinate, supervise and control all plans, programs, projects and activities of the government relative
[4]
to energy exploration, development, utilization, distribution and conservation.

The facts are restated briefly as follows:

Petitioners Social Justice Society, Vladimir Alarique T. Cabigao and Bonifacio S. Tumbokon, in an
original petition for mandamus under Rule 65 of the Rules of Court, sought to compel respondent Hon.
Jose L. Atienza, Jr., then mayor of the City of Manila, to enforce Ordinance No. 8027. This ordinance was
[5]
enacted by the Sangguniang Panlungsod of Manila on November 20, 2001, approved by respondent
[6] [7]
Mayor on November 28, 2001, and became effective on December 28, 2001 after publication.
Sections 1 and 3 thereof state:
SECTION 1. For the purpose of promoting sound urban planning and ensuring health, public safety,
and general welfare of the residents of Pandacan and Sta. Ana as well as its adjoining areas, the land
use of [those] portions of land bounded by the Pasig River in the north, PNR Railroad Track in the
east, Beata St. in the south, Palumpong St. in the southwest, and Estero de Pandacan in the west[,]
PNR Railroad in the northwest area, Estero de Pandacan in the [n]ortheast, Pasig River in the
southeast and Dr. M.L. Carreon in the southwest. The area of Punta, Sta. Ana bounded by the Pasig
River, Marcelino Obrero St., Mayo 28 St., and F. Manalo Street, are hereby reclassified from
Industrial II to Commercial I.
xxx xxx xxx

SEC. 3. Owners or operators of industries and other businesses, the operation of which are no
longer permitted under Section 1 hereof, are hereby given a period of six (6) months from the date
of effectivity of this Ordinance within which to cease and desist from the operation of businesses
which are hereby in consequence, disallowed.
Ordinance No. 8027 reclassified the area described therein from industrial to commercial and directed
the owners and operators of businesses disallowed under the reclassification to cease and desist from
operating their businesses within six months from the date of effectivity of the ordinance. Among the
businesses situated in the area are the so-called "Pandacan Terminals" of the oil companies.

On June 26, 2002, the City of Manila and the Department of Energy (DOE) entered into a memorandum
of understanding (MOU)[8] with the oil companies. They agreed that "the scaling down of the Pandacan
Terminals [was] the most viable and practicable option." The Sangguniang Panlungsod ratified the
MOU in Resolution No. 97.[9] In the same resolution, the Sanggunian declared that the MOU was
effective only for a period of six months starting July 25, 2002.[10] Thereafter, on January 30, 2003, the
Sanggunian adopted Resolution No. 13[11] extending the validity of Resolution No. 97 to April 30, 2003
and authorizing the mayor of Manila to issue special business permits to the oil companies.[12]

This was the factual backdrop presented to the Court which became the basis of our March 7, 2007
decision. We ruled that respondent had the ministerial duty under the Local Government Code (LGC) to
"enforce all laws and ordinances relative to the governance of the city,"[13] including Ordinance No.
8027. We also held that we need not resolve the issue of whether the MOU entered into by respondent
with the oil companies and the subsequent resolutions passed by the Sanggunian could amend or repeal
Ordinance No. 8027 since the resolutions which ratified the MOU and made it binding on the City of
Manila expressly gave it full force and effect only until April 30, 2003. We concluded that there was
nothing that legally hindered respondent from enforcing Ordinance No. 8027.

After we rendered our decision on March 7, 2007, the oil companies and DOE sought to intervene and
filed motions for reconsideration in intervention on March 12, 2007 and March 21, 2007 respectively. On
April 11, 2007, we conducted the oral arguments in Baguio City to hear petitioners, respondent and
movants-intervenors oil companies and DOE.

The oil companies called our attention to the fact that on April 25, 2003, Chevron had filed a complaint
against respondent and the City of Manila in the Regional Trial Court (RTC) of Manila, Branch 39, for the
annulment of Ordinance No. 8027 with application for writs of preliminary prohibitory injunction and
preliminary mandatory injunction.[14] The case was docketed as civil case no. 03-106377. On the same
day, Shell filed a petition for prohibition and mandamus likewise assailing the validity of Ordinance No.
8027 and with application for writs of preliminary prohibitory injunction and preliminary mandatory
injunction.[15] This was docketed as civil case no. 03-106380. Later on, these two cases were
consolidated and the RTC of Manila, Branch 39 issued an order dated May 19, 2003 granting the
applications for writs of preliminary prohibitory injunction and preliminary mandatory injunction:
WHEREFORE, upon the filing of a total bond of TWO MILLION (Php 2,000,000.00) PESOS, let a
Writ of Preliminary Prohibitory Injunction be issued ordering [respondent] and the City of Manila,
their officers, agents, representatives, successors, and any other persons assisting or acting in their
behalf, during the pendency of the case, to REFRAIN from taking steps to enforce Ordinance No.
8027, and let a Writ of Preliminary Mandatory Injunction be issued ordering [respondent] to issue
[16]
[Chevron and Shell] the necessary Business Permits to operate at the Pandacan Terminal.

Petron likewise filed its own petition in the RTC of Manila, Branch 42, also attacking the validity of
Ordinance No. 8027 with prayer for the issuance of a writ of preliminary injunction and/or temporary
restraining order (TRO). This was docketed as civil case no. 03-106379. In an order dated August 4,
2004, the RTC enjoined the parties to maintain the status quo.[17]

Thereafter, in 2006, the city council of Manila enacted Ordinance No. 8119, also known as the Manila
[18]
Comprehensive Land Use Plan and Zoning Ordinance of 2006.[18] This was approved by respondent on
June 16, 2006.[19]

Aggrieved anew, Chevron and Shell filed a complaint in the RTC of Manila, Branch 20, asking for the
nullification of Ordinance No. 8119.[20] This was docketed as civil case no. 06-115334. Petron filed its
own complaint on the same causes of action in the RTC of Manila, Branch 41.[21] This was docketed as
civil case no. 07-116700.[22] The court issued a TRO in favor of Petron, enjoining the City of Manila and
respondent from enforcing Ordinance No. 8119.[23]

Meanwhile, in civil case no. 03-106379, the parties filed a joint motion to withdraw complaint and
counterclaim on February 20, 2007.[24] In an order dated April 23, 2007, the joint motion was granted
and all the claims and counterclaims of the parties were withdrawn.[25]

Given these additional pieces of information, the following were submitted as issues for our resolution:
[26]
1. whether movants-intervenors should be allowed to intervene in this case;

2. whether the following are impediments to the execution of our March 7, 2007 decision:

Ordinance No. 8119, the enactment and existence of which were not previously brought by
(a)
the parties to the attention of the Court and

writs of preliminary prohibitory injunction and preliminary mandatory injunction and

(b)
status quo order issued by the RTC of Manila, Branches 39 and 42 and

3. whether the implementation of Ordinance No. 8027 will unduly encroach upon the DOE's
powers and functions involving energy resources.

During the oral arguments, the parties submitted to this Court's power to rule on the constitutionality
and validity of Ordinance No. 8027 despite the pendency of consolidated cases involving this issue in the
RTC.[27] The importance of settling this controversy as fully and as expeditiously as possible was
emphasized, considering its impact on public interest. Thus, we will also dispose of this issue here. The
parties were after all given ample opportunity to present and argue their respective positions. By so
doing, we will do away with the delays concomitant with litigation and completely adjudicate an issue
which will most likely reach us anyway as the final arbiter of all legal disputes.

Before we resolve these issues, a brief review of the history of the Pandacan Terminals is called for to put
our discussion in the proper context.

HISTORY OF THE PANDACAN OIL TERMINALS

Pandacan (one of the districts of the City of Manila) is situated along the banks of the Pasig river. At the
turn of the twentieth century, Pandacan was unofficially designated as the industrial center of Manila.
The area, then largely uninhabited, was ideal for various emerging industries as the nearby river
facilitated the transportation of goods and products. In the 1920s, it was classified as an industrial zone.
[28] Among its early industrial settlers were the oil companies. Shell established its installation there on
January 30, 1914.[29] Caltex (now Chevron) followed suit in 1917 when the company began marketing its
products in the country.[30] In 1922, it built a warehouse depot which was later converted into a key
distribution terminal.[31] The corporate presence in the Philippines of Esso (Petron's predecessor)
became more keenly felt when it won a concession to build and operate a refinery in Bataan in 1957.[32]
It then went on to operate a state-of-the-art lube oil blending plant in the Pandacan Terminals where it
manufactures lubes and greases.[33]

On December 8, 1941, the Second World War reached the shores of the Philippine Islands. Although
Manila was declared an open city, the Americans had no interest in welcoming the Japanese. In fact, in
their zealous attempt to fend off the Japanese Imperial Army, the United States Army took control of the
Pandacan Terminals and hastily made plans to destroy the storage facilities to deprive the advancing
Japanese Army of a valuable logistics weapon.[34] The U.S. Army burned unused petroleum, causing a
frightening conflagration. Historian Nick Joaquin recounted the events as follows:
After the USAFFE evacuated the City late in December 1941, all army fuel storage dumps were set
on fire. The flames spread, enveloping the City in smoke, setting even the rivers ablaze, endangering
bridges and all riverside buildings. … For one week longer, the "open city" blazed a cloud of smoke
[35]
by day, a pillar of fire by night.

The fire consequently destroyed the Pandacan Terminals and rendered its network of depots and service
stations inoperative.[36]

After the war, the oil depots were reconstructed. Pandacan changed as Manila rebuilt itself. The three
major oil companies resumed the operation of their depots.[37] But the district was no longer a sparsely
populated industrial zone; it had evolved into a bustling, hodgepodge community. Today, Pandacan has
become a densely populated area inhabited by about 84,000 people, majority of whom are urban poor
who call it home.[38] Aside from numerous industrial installations, there are also small businesses,
churches, restaurants, schools, daycare centers and residences situated there.[39] Malacañang Palace,
the official residence of the President of the Philippines and the seat of governmental power, is just two
kilometers away.[40] There is a private school near the Petron depot. Along the walls of the Shell facility
are shanties of informal settlers.[41] More than 15,000 students are enrolled in elementary and high
schools situated near these facilities.[42] A university with a student population of about 25,000 is
located directly across the depot on the banks of the Pasig river.[43]

The 36-hectare Pandacan Terminals house the oil companies' distribution terminals and depot facilities.
[44] The refineries of Chevron and Shell in Tabangao and Bauan, both in Batangas, respectively, are
connected to the Pandacan Terminals through a 114-kilometer[45] underground pipeline system.[46]
Petron's refinery in Limay, Bataan, on the other hand, also services the depot.[47] The terminals store
fuel and other petroleum products and supply 95% of the fuel requirements of Metro Manila,[48] 50% of
Luzon's consumption and 35% nationwide.[49] Fuel can also be transported through barges along the
Pasig river or tank trucks via the South Luzon Expressway.

We now discuss the first issue: whether movants-intervenors should be allowed to intervene in this case.

INTERVENTION OF THE OIL COMPANIES AND THE DOE SHOULD BE ALLOWED IN

THE INTEREST OF JUSTICE

Intervention is a remedy by which a third party, not originally impleaded in the proceedings, becomes a
litigant therein to enable him, her or it to protect or preserve a right or interest which may be affected by
such proceedings.[50] The pertinent rules are Sections 1 and 2, Rule 19 of the Rules of Court:
SEC. 1. Who may intervene. A person who has a legal interest in the matter in litigation, or in the
success of either of the parties, or an interest against both, or is so situated as to be adversely
affected by a distribution or other disposition of property in the custody of the court or of an officer
thereof may, with leave of court, be allowed to intervene in the action. The court shall consider
whether or not the intervention will unduly delay or prejudice the adjudication of the rights of the
original parties, and whether or not the intervenor's rights may be fully protected in a separate
proceeding.

SEC. 2. Time to intervene. The motion to intervene may be filed at any time before rendition of
judgment by the trial court. A copy of the pleading-in-intervention shall be attached to the motion
and served on the original parties.

Thus, the following are the requisites for intervention of a non-party:

(1) Legal interest

(a) in the matter in controversy; or

(b) in the success of either of the parties; or
(c) I against both parties; or
person is so situated as to be adversely affected by a distribution or other disposition of
(d)
property in the custody of the court or of an officer thereof;

(2) Intervention will not unduly delay or prejudice the adjudication of rights of original parties;

[51]
(3) Intervenor's rights may not be fully protected in a separate proceeding and

The motion to intervene may be filed at any time before rendition of judgment by the trial
(4)
court.

For both the oil companies and DOE, the last requirement is definitely absent. As a rule, intervention is
allowed "before rendition of judgment" as Section 2, Rule 19 expressly provides. Both filed their separate
motions after our decision was promulgated. In Republic of the Philippines v. Gingoyon,[52] a recently
decided case which was also an original action filed in this Court, we declared that the appropriate time
to file the motions-in-intervention was before and not after resolution of the case.[53]

The Court, however, has recognized exceptions to Section 2, Rule 19 in the interest of substantial justice:
The rule on intervention, like all other rules of procedure, is intended to make the powers of the
Court fully and completely available for justice. It is aimed to facilitate a comprehensive
[54]
adjudication of rival claims overriding technicalities on the timeliness of the filing thereof.

The oil companies assert that they have a legal interest in this case because the implementation of
Ordinance No. 8027 will directly affect their business and property rights.[55]
[T]he interest which entitles a person to intervene in a suit between other parties must be in the
matter in litigation and of such direct and immediate character that the intervenor will either gain
or lose by direct legal operation and effect of the judgment. Otherwise, if persons not parties to the
action were allowed to intervene, proceedings would become unnecessarily complicated, expensive
and interminable. And this would be against the policy of the law. The words "an interest in the
subject" means a direct interest in the cause of action as pleaded, one that would put the intervenor
in a legal position to litigate a fact alleged in the complaint without the establishment of which
[56]
plaintiff could not recover.

We agree that the oil companies have a direct and immediate interest in the implementation of
Ordinance No. 8027. Their claim is that they will need to spend billions of pesos if they are compelled to
relocate their oil depots out of Manila. Considering that they admitted knowing about this case from the
time of its filing on December 4, 2002, they should have intervened long before our March 7, 2007
decision to protect their interests. But they did not.[57] Neither did they offer any worthy explanation to
justify their late intervention.

Be that as it may, although their motion for intervention was not filed on time, we will allow it because
they raised and presented novel issues and arguments that were not considered by the Court in its March
7, 2007 decision. After all, the allowance or disallowance of a motion to intervene is addressed to the
sound discretion of the court before which the case is pending.[58] Considering the compelling reasons
favoring intervention, we do not think that this will unduly delay or prejudice the adjudication of rights of
the original parties. In fact, it will be expedited since their intervention will enable us to rule on the
constitutionality of Ordinance No. 8027 instead of waiting for the RTC's decision.

The DOE, on the other hand, alleges that its interest in this case is also direct and immediate as
Ordinance No. 8027 encroaches upon its exclusive and national authority over matters affecting the oil
industry. It seeks to intervene in order to represent the interests of the members of the public who stand
to suffer if the Pandacan Terminals' operations are discontinued. We will tackle the issue of the alleged
encroachment into DOE's domain later on. Suffice it to say at this point that, for the purpose of hearing
all sides and considering the transcendental importance of this case, we will also allow DOE's
intervention.

THE INJUNCTIVE WRITS ARE NOT IMPEDIMENTS TO THE ENFORCEMENT OF

ORDINANCE NO. 8027

Under Rule 65, Section 3[59] of the Rules of Court, a petition for mandamus may be filed when any
tribunal, corporation, board, officer or person unlawfully neglects the performance of an act which the
law specifically enjoins as a duty resulting from an office, trust or station. According to the oil companies,
respondent did not unlawfully fail or neglect to enforce Ordinance No. 8027 because he was lawfully
prevented from doing so by virtue of the injunctive writs and status quo order issued by the RTC of
Manila, Branches 39 and 42.

First, we note that while Chevron and Shell still have in their favor the writs of preliminary injunction
and preliminary mandatory injunction, the status quo order in favor of Petron is no longer in effect since
the court granted the joint motion of the parties to withdraw the complaint and counterclaim.[60]

Second, the original parties failed to inform the Court about these injunctive writs. Respondent (who was
also impleaded as a party in the RTC cases) defends himself by saying that he informed the court of the
pendency of the civil cases and that a TRO was issued by the RTC in the consolidated cases filed by
Chevron and Shell. It is true that had the oil companies only intervened much earlier, the Court would
not have been left in the dark about these facts. Nevertheless, respondent should have updated the Court,
by way of manifestation, on such a relevant matter.

In his memorandum, respondent mentioned the issuance of a TRO. Under Section 5 of Rule 58 of the
Rules of Court, a TRO issued by the RTC is effective only for a period of 20 days. This is why, in our
March 7, 2007 decision, we presumed with certainty that this had already lapsed.[61] Respondent also
mentioned the grant of injunctive writs in his rejoinder which the Court, however, expunged for being a
prohibited pleading. The parties and their counsels were clearly remiss in their duties to this Court.

In resolving controversies, courts can only consider facts and issues pleaded by the parties.[62] Courts, as
well as magistrates presiding over them are not omniscient. They can only act on the facts and issues
presented before them in appropriate pleadings. They may not even substitute their own personal
knowledge for evidence. Nor may they take notice of matters except those expressly provided as subjects
of mandatory judicial notice.

We now proceed to the issue of whether the injunctive writs are legal impediments to the enforcement of
Ordinance No. 8027.

Section 3, Rule 58 of the Rules of Court enumerates the grounds for the issuance of a writ of preliminary
injunction:
SEC. 3. Grounds for issuance of preliminary injunction. ― A preliminary injunction may be
granted when it is established:

That the applicant is entitled to the relief demanded, and the whole or part of such relief
(a) consists in restraining the commission or continuance of the act or acts complained of, or in
requiring the performance of an act or acts, either for a limited period or perpetually;

That the commission, continuance or nonperformance of the act or acts complained of during
(b)
the litigation would probably work injustice to the applicant; or

That a party, court, agency or a person is doing, threatening, or is attempting to do, or is

procuring or suffering to be done, some act or acts probably in violation of the rights of the
(c)
applicant respecting the subject of the action or proceeding, and tending to render the
judgment ineffectual.

There are two requisites for the issuance of a preliminary injunction: (1) the right to be protected exists
prima facie and (2) the acts sought to be enjoined are violative of that right. It must be proven that the
violation sought to be prevented will cause an irreparable injustice.

The act sought to be restrained here was the enforcement of Ordinance No. 8027. It is a settled rule that
an ordinance enjoys the presumption of validity and, as such, cannot be restrained by injunction.[63]
Nevertheless, when the validity of the ordinance is assailed, the courts are not precluded from issuing an
injunctive writ against its enforcement. However, we have declared that the issuance of said writ is
proper only when:
... the petitioner assailing the ordinance has made out a case of unconstitutionality strong
enough to overcome, in the mind of the judge, the presumption of validity, in addition
[64]
to a showing of a clear legal right to the remedy sought.... (Emphasis supplied)
Judge Reynaldo G. Ros, in his order dated May 19, 2003, stated his basis for issuing the injunctive writs:
The Court, in resolving whether or not a Writ of Preliminary Injunction or Preliminary Mandatory
Injunction should be issued, is guided by the following requirements: (1) a clear legal right of the
complainant; (2) a violation of that right; and (3) a permanent and urgent necessity for the Writ to
prevent serious damage. The Court believes that these requisites are present in these cases.

There is no doubt that the plaintiff/petitioners have been legitimately operating their business in
the Pandacan Terminal for many years and they have made substantial capital investment therein.
Every year they were issued Business Permits by the City of Manila. Its operations have not been
declared illegal or contrary to law or morals. In fact, because of its vital importance to the national
economy, it was included in the Investment Priorities Plan as mandated under the "Downstream Oil
Industry Deregulation Act of 1988 (R.A. 8479). As a lawful business, the plaintiff/petitioners have a
right, therefore, to continue their operation in the Pandacan Terminal and the right to protect their
investments. This is a clear and unmistakable right of the plaintiff/petitioners.

The enactment, therefore, of City Ordinance No. 8027 passed by the City Council of Manila
reclassifying the area where the Pandacan Terminal is located from Industrial II to Commercial I
and requiring the plaintiff/petitioners to cease and desist from the operation of their business has
certainly violated the rights of the plaintiff/petitioners to continue their legitimate business in the
Pandacan Terminal and deprived them of their huge investments they put up therein. Thus, before
the Court, therefore, determines whether the Ordinance in question is valid or not, a Writ of
Preliminary Injunction and a Writ of Mandatory Injunction be issued to prevent serious and
[65]
irreparable damage to plaintiff/petitioners.

Nowhere in the judge's discussion can we see that, in addition to a showing of a clear legal
right of Chevron and Shell to the remedy sought, he was convinced that they had made out
a case of unconstitutionality or invalidity strong enough to overcome the presumption of
validity of the ordinance. Statutes and ordinances are presumed valid unless and until the courts
declare the contrary in clear and unequivocal terms.[66] The mere fact that the ordinance is alleged to be
unconstitutional or invalid will not entitle a party to have its enforcement enjoined.[67] The presumption
is all in favor of validity. The reason for this is obvious:
The action of the elected representatives of the people cannot be lightly set aside. The councilors
must, in the very nature of things, be familiar with the necessities of their particular municipality
and with all the facts and circumstances which surround the subject and necessitate action. The
local legislative body, by enacting the ordinance, has in effect given notice that the regulations are
essential to the well being of the people . . . The Judiciary should not lightly set aside legislative
action when there is not a clear invasion of personal or property rights under the guise of police
[68]
regulation.

Xxx

...[Courts] accord the presumption of constitutionality to legislative enactments, not only because
the legislature is presumed to abide by the Constitution but also because the judiciary[,] in the
determination of actual cases and controversies[,] must reflect the wisdom and justice of the people
as expressed through their representatives in the executive and legislative departments of the
[69]
government.

The oil companies argue that this presumption must be set aside when the invalidity or unreasonableness
appears on the face of the ordinance itself.[70] We see no reason to set aside the presumption. The
ordinance, on its face, does not at all appear to be unconstitutional. It reclassified the subject area from
industrial to commercial. Prima facie, this power is within the power of municipal corporations:
The power of municipal corporations to divide their territory into industrial, commercial and
residential zones is recognized in almost all jurisdictions inasmuch as it is derived from the police
[71]
power itself and is exercised for the protection and benefit of their inhabitants.
Xxx

There can be no doubt that the City of Manila has the power to divide its territory into residential
and industrial zones, and to prescribe that offensive and unwholesome trades and occupations are
to be established exclusively in the latter zone.

Xxx xxx xxx

Likewise, it cannot be denied that the City of Manila has the authority, derived from the police
power, of forbidding the appellant to continue the manufacture of toyo in the zone where it is now
[72]
situated, which has been declared residential....

Courts will not invalidate an ordinance unless it clearly appears that it is unconstitutional. There is no
such showing here. Therefore, the injunctive writs issued in the Manila RTC's May 19, 2003 order had no
leg to stand on.

We are aware that the issuance of these injunctive writs is not being assailed as tainted with grave abuse
of discretion. However, we are confronted with the question of whether these writs issued by a lower
court are impediments to the enforcement of Ordinance No. 8027 (which is the subject of the mandamus
petition). As already discussed, we rule in the negative.

ORDINANCE NO. 8027 WAS NOT SUPERSEDED BY ORDINANCE NO. 8119

The March 7, 2007 decision did not take into consideration the passage of Ordinance No. 8119 entitled
"An Ordinance Adopting the Manila Comprehensive Land Use Plan and Zoning Regulations of 2006 and
Providing for the Administration, Enforcement and Amendment thereto" which was approved by
respondent on June 16, 2006. The simple reason was that the Court was never informed about this
ordinance.

While courts are required to take judicial notice of the laws enacted by Congress, the rule with respect to
local ordinances is different. Ordinances are not included in the enumeration of matters covered by
mandatory judicial notice under Section 1, Rule 129 of the Rules of Court.[73]

Although, Section 50 of RA 409[74] provides that:

SEC. 50 Judicial notice of ordinances. - All courts sitting in the city shall take judicial notice of the
ordinances passed by the [Sangguniang Panglungsod].

This cannot be taken to mean that this Court, since it has its seat in the City of Manila, should have taken
steps to procure a copy of the ordinance on its own, relieving the party of any duty to inform the Court
about it.

Even where there is a statute that requires a court to take judicial notice of municipal ordinances, a court
is not required to take judicial notice of ordinances that are not before it and to which it does not have
access. The party asking the court to take judicial notice is obligated to supply the court with the full text
of the rules the party desires it to have notice of.[75] Counsel should take the initiative in requesting that
a trial court take judicial notice of an ordinance even where a statute requires courts to take judicial
notice of local ordinances.[76]

The intent of a statute requiring a court to take judicial notice of a local ordinance is to remove any
discretion a court might have in determining whether or not to take notice of an ordinance. Such a
statute does not direct the court to act on its own in obtaining evidence for the record and a party must
make the ordinance available to the court for it to take notice.[77]

In its defense, respondent claimed that he did not inform the Court about the enactment of Ordinance
No. 8119 because he believed that it was different from Ordinance No. 8027 and that the two were not
inconsistent with each other.[78]

In the same way that we deem the intervenors' late intervention in this case unjustified, we find the
failure of respondent, who was an original party here, inexcusable.

THE RULE ON JUDICIAL ADMISSIONS IS NOT APPLICABLE AGAINST RESPONDENT

The oil companies assert that respondent judicially admitted that Ordinance No. 8027 was repealed by
Ordinance No. 8119 in civil case no. 03-106379 (where Petron assailed the constitutionality of Ordinance
No. 8027) when the parties in their joint motion to withdraw complaint and counterclaim stated that
"the issue ...has been rendered moot and academic by virtue of the passage of [Ordinance No. 8119]."[79]
They contend that such admission worked as an estoppel against the respondent.

Respondent countered that this stipulation simply meant that Petron was recognizing the validity and
legality of Ordinance No. 8027 and that it had conceded the issue of said ordinance's constitutionality,
opting instead to question the validity of Ordinance No. 8119.[80] The oil companies deny this and
further argue that respondent, in his answer in civil case no. 06-115334 (where Chevron and Shell are
asking for the nullification of Ordinance No. 8119), expressly stated that Ordinance No. 8119 replaced
Ordinance No. 8027:[81]
... Under Ordinance No. 8027, businesses whose uses are not in accord with the reclassification
were given six months to cease [their] operation. Ordinance No. 8119, which in effect,
replaced Ordinance [No.] 8027, merely took note of the time frame provided for in Ordinance
[82]
No. 8119.... Ordinance No. 8119 thus provided for an even longer term, that is[,] seven years;
(Emphasis supplied)

Rule 129, Section 4 of the Rules of Court provides:

Section 4. Judicial admissions. ― An admission, verbal or written, made by a party in the course of
the proceedings in the same case, does not require proof. The admission may be contradicted only
by showing that it was made through palpable mistake or that no such admission was made.
(Emphasis supplied)

While it is true that a party making a judicial admission cannot subsequently take a position contrary to
or inconsistent with what was pleaded,[83] the aforestated rule is not applicable here. Respondent made
the statements regarding the ordinances in civil case nos. 03-106379 and 06-115334 which are not "the
same" as this case before us.[84] To constitute a judicial admission, the admission must be made in the
same case in which it is offered.
Hence, respondent is not estopped from claiming that Ordinance No. 8119 did not supersede Ordinance
No. 8027. On the contrary, it is the oil companies which should be considered estopped. They rely on the
argument that Ordinance No. 8119 superseded Ordinance No. 8027 but, at the same time, also impugn
its (8119's) validity. We frown on the adoption of inconsistent positions and distrust any attempt at clever
positioning under one or the other on the basis of what appears advantageous at the moment. Parties
cannot take vacillating or contrary positions regarding the validity of a statute[85] or ordinance.
Nonetheless, we will look into the merits of the argument of implied repeal.

ORDINANCE NO. 8119 DID NOT IMPLIEDLY REPEAL ORDINANCE NO. 8027

Both the oil companies and DOE argue that Ordinance No. 8119 repealed Ordinance No. 8027. They
assert that although there was no express repeal[86] of Ordinance No. 8027, Ordinance No. 8119
impliedly repealed it.

According to the oil companies, Ordinance No. 8119 reclassified the area covering the Pandacan
Terminals to "High Density Residential/Mixed Use Zone (R-3/MXD)"[87] whereas Ordinance No. 8027
reclassified the same area from Industrial II to Commercial I:
SECTION 1. For the purpose of promoting sound urban planning and ensuring health, public safety,
and general welfare of the residents of Pandacan and Sta. Ana as well as its adjoining areas, the land
use of [those] portions of land bounded by the Pasig River in the north, PNR Railroad Track in the
east, Beata St. in the south, Palumpong St. in the southwest, and Estero de Pancacan in the west[,]
PNR Railroad in the northwest area, Estero de Pandacan in the [n]ortheast, Pasig River in the
southeast and Dr. M.L. Carreon in the southwest. The area of Punta, Sta. Ana bounded by the Pasig
River, Marcelino Obrero St., Mayo 28 St., and F. Manalo Street, are hereby reclassified from
Industrial II to Commercial I. (Emphasis supplied)

Moreover, Ordinance No. 8119 provides for a phase-out of seven years:

SEC. 72. Existing Non-Conforming Uses and Buildings. - The lawful use of any building, structure or
land at the time of the adoption of this Ordinance may be continued, although such use does not
conform with the provision of the Ordinance, provided:

xxx xxx xxx

2 In case the non-conforming use is an industrial use:

xxx xxx xxx

d. The land use classified as non-conforming shall program the phase-out and
relocation of the non-conforming use within seven (7) years from the date of
effectivity of this Ordinance. (Emphasis supplied)

This is opposed to Ordinance No. 8027 which compels affected entities to vacate the area within six
months from the effectivity of the ordinance:
SEC. 3. Owners or operators of industries and other businesses, the operation of which are no
longer permitted under Section 1 hereof, are hereby given a period of six (6) months from the date
of effectivity of this Ordinance within which to cease and desist from the operation of businesses
which are hereby in consequence, disallowed.

Ordinance No. 8119 also designated the Pandacan oil depot area as a "Planned Unit
Development/Overlay Zone (O-PUD)":
SEC. 23. Use Regulations in Planned Unit Development/Overlay Zone (O-PUD). O-PUD Zones are
identified specific sites in the City of Manila wherein the project site is comprehensively planned as
an entity via unitary site plan which permits flexibility in planning/ design, building siting,
complementarily of building types and land uses, usable open spaces and the preservation of
significant natural land features, pursuant to regulations specified for each particular PUD.
Enumerated below are identified PUD:

xxx xxx xxx

6. Pandacan Oil Depot Area

xxx xxx xxx

Enumerated below are the allowable uses:

1. all uses allowed in all zones where it is located

2. the [Land Use Intensity Control (LUIC)] under which zones are located shall, in all instances be
complied with

3. the validity of the prescribed LUIC shall only be [superseded] by the development controls and
regulations specified for each PUD as provided for each PUD as provided for by the masterplan
[88]
of respective PUDs. (Emphasis supplied)

Respondent claims that in passing Ordinance No. 8119, the Sanggunian did not intend to repeal
Ordinance No. 8027 but meant instead to carry over 8027's provisions to 8119 for the purpose of making
Ordinance No. 8027 applicable to the oil companies even after the passage of Ordinance No. 8119.[89]
He quotes an excerpt from the minutes of the July 27, 2004 session of the Sanggunian during the first
reading of Ordinance No. 8119:
Member GARCIA: Your Honor, iyong patungkol po roon sa oil depot doon sa amin sa Sixth District
sa Pandacan, wala pong nakalagay eith sa ordinansa rito na taliwas o kakaiba roon sa ordinansang
ipinasa noong nakaraang Konseho, iyong Ordinance No. 8027. So kung ano po ang nandirito sa
ordinansa na ipinasa ninyo last time, iyon lang po ang ni-lift eithe at inilagay eith. At eith eith
ordinansang …iyong naipasa ng huling Konseho, niri-classify [ninyo] from Industrial II to
Commercial C-1 ang area ng Pandacan kung nasaan ang oil depot. So ini-lift lang po [eithe] iyong
definition, density, at saka po yon pong … ng… noong ordinansa ninyo na siya eith naming inilagay
eith, iniba lang po naming iyong title. So wala po kaming binago na taliwas o nailagay na
taliwas doon sa ordinansang ipinasa ninyo, ni-lift lang po [eithe] from Ordinance No.
[90]
8027." (Emphasis supplied)

We agree with respondent.

Repeal by implication proceeds on the premise that where a statute of later date clearly reveals the
intention of the legislature to abrogate a prior act on the subject, that intention must be given effect.[91]

There are two kinds of implied repeal. The first is: where the provisions in the two acts on the same
subject matter are irreconcilably contradictory, the latter act, to the extent of the conflict, constitutes an
implied repeal of the earlier one.[92] The second is: if the later act covers the whole subject of the earlier
one and is clearly intended as a substitute, it will operate to repeal the earlier law.[93] The oil companies
argue that the situation here falls under the first category.

Implied repeals are not favored and will not be so declared unless the intent of the legislators is manifest.
[94] As statutes and ordinances are presumed to be passed only after careful deliberation and with
knowledge of all existing ones on the subject, it follows that, in passing a law, the legislature did not
intend to interfere with or abrogate a former law relating to the same subject matter.[95] If the intent to
repeal is not clear, the later act should be construed as a continuation of, and not a substitute for, the
earlier act.[96]

These standards are deeply enshrined in our jurisprudence. We disagree that, in enacting Ordinance No.
8119, there was any indication of the legislative purpose to repeal Ordinance No. 8027.[97] The excerpt
quoted above is proof that there was never such an intent. While it is true that both ordinances relate to
the same subject matter, i.e. classification of the land use of the area where Pandacan oil depot is located,
if there is no intent to repeal the earlier enactment, every effort at reasonable construction must be made
to reconcile the ordinances so that both can be given effect:
The fact that a later enactment may relate to the same subject matter as that of an earlier statute is
not of itself sufficient to cause an implied repeal of the prior act, since the new statute may merely
be cumulative or a continuation of the old one. What is necessary is a manifest indication of
[98]
legislative purpose to repeal.

For the first kind of implied repeal, there must be an irreconcilable conflict between the two ordinances.
There is no conflict between the two ordinances. Ordinance No. 8027 reclassified the Pandacan area from
Industrial II to Commercial I. Ordinance No. 8119, in Section 23, designated it as a "Planned Unit
Development/Overlay Zone (O-PUD)." In its Annex C which defined the zone boundaries,[99] the
Pandacan area was shown to be within the "High Density Residential/Mixed Use Zone (R-3/MXD)."
These zone classifications in Ordinance No. 8119 are not inconsistent with the reclassification of the
Pandacan area from Industrial to Commercial in Ordinance No. 8027. The "O-PUD" classification merely
made Pandacan a "project site ... comprehensively planned as an entity via unitary site plan which
permits flexibility in planning/design, building siting, complementarity of building types and land uses,
usable open spaces and the preservation of significant natural land features...."[100] Its classification as
"R-3/MXD" means that it should "be used primarily for high-rise housing/dwelling purposes and limited
complementary/supplementary trade, services and business activities."[101] There is no conflict since
both ordinances actually have a common objective, i.e., to shift the zoning classification from industrial
to commercial (Ordinance No. 8027) or mixed residential/commercial (Ordinance No. 8119).

Moreover, it is a well-settled rule in statutory construction that a subsequent general law does not repeal
a prior special law on the same subject unless it clearly appears that the legislature has intended by the
latter general act to modify or repeal the earlier special law. Generalia specialibus non derogant (a
general law does not nullify a specific or special law).[102] This is so even if the provisions of the general
law are sufficiently comprehensive to include what was set forth in the special act.[103] The special act
and the general law must stand together, one as the law of the particular subject and the other as the law

[104]
of general application.[104] The special law must be taken as intended to constitute an exception to, or a
qualification of, the general act or provision.[105]
The reason for this is that the legislature, in passing a law of special character, considers and makes
special provisions for the particular circumstances dealt with by the special law. This being so, the
legislature, by adopting a general law containing provisions repugnant to those of the special law
and without making any mention of its intention to amend or modify such special law, cannot be
[106]
deemed to have intended an amendment, repeal or modification of the latter.

Ordinance No. 8027 is a special law[107] since it deals specifically with a certain area described therein
(the Pandacan oil depot area) whereas Ordinance No. 8119 can be considered a general law[108] as it
covers the entire city of Manila.

The oil companies assert that even if Ordinance No. 8027 is a special law, the existence of an all-
encompassing repealing clause in Ordinance No. 8119 evinces an intent on the part of the Sanggunian to
repeal the earlier ordinance:
Sec. 84. Repealing Clause. All ordinances, rules, regulations in conflict with the provisions of this
Ordinance are hereby repealed; PROVIDED, That the rights that are vested upon the effectivity of
this Ordinance shall not be impaired.

They cited Hospicio de San Jose de Barili, Cebu City v. Department of Agrarian Reform:[109]
The presence of such general repealing clause in a later statute clearly indicates the legislative intent
to repeal all prior inconsistent laws on the subject matter, whether the prior law is a general law or a
special law... Without such a clause, a later general law will ordinarily not repeal a prior special law
on the same subject. But with such clause contained in the subsequent general law, the prior special
[110]
law will be deemed repealed, as the clause is a clear legislative intent to bring about that result.

This ruling in not applicable here. The repealing clause of Ordinance No. 8119 cannot be taken to indicate
the legislative intent to repeal all prior inconsistent laws on the subject matter, including Ordinance No.
8027, a special enactment, since the aforequoted minutes (an official record of the discussions in the
Sanggunian) actually indicated the clear intent to preserve the provisions of Ordinance No. 8027.

To summarize, the conflict between the two ordinances is more apparent than real. The two ordinances
can be reconciled. Ordinance No. 8027 is applicable to the area particularly described therein whereas
Ordinance No. 8119 is applicable to the entire City of Manila.

MANDAMUS LIES TO COMPEL RESPONDENT MAYOR TO ENFORCE ORDINANCE NO.

8027

The oil companies insist that mandamus does not lie against respondent in consideration of the
separation of powers of the executive and judiciary.[111] This argument is misplaced. Indeed,
[the] Courts will not interfere by mandamus proceedings with the legislative [or executive
departments] of the government in the legitimate exercise of its powers, except to enforce mere
[112]
ministerial acts required by law to be performed by some officer thereof. (Emphasis Supplied)

since this is the function of a writ of mandamus, which is the power to compel "the performance of an act
which the law specifically enjoins as a duty resulting from office, trust or station."[113]
They also argue that petitioners had a plain, speedy and adequate remedy to compel respondent to
enforce Ordinance No. 8027 which was to seek relief from the President of the Philippines through the
Secretary of the Department of Interior and Local Government (DILG) by virtue of the President's power
of supervision over local government units. Again, we disagree. A party need not go first to the DILG in
order to compel the enforcement of an ordinance. This suggested process would be unreasonably long,
tedious and consequently injurious to the interests of the local government unit (LGU) and its
constituents whose welfare is sought to be protected. Besides, petitioners' resort to an original action for
mandamus before this Court is undeniably allowed by the Constitution.[114]

ORDINANCE NO. 8027 IS CONSTITUTIONAL AND VALID

Having ruled that there is no impediment to the enforcement of Ordinance No. 8027, we now proceed to
make a definitive ruling on its constitutionality and validity.

The tests of a valid ordinance are well established. For an ordinance to be valid, it must not only be
within the corporate powers of the LGU to enact and be passed according to the procedure prescribed by
law, it must also conform to the following substantive requirements: (1) must not contravene the
Constitution or any statute; (2) must not be unfair or oppressive; (3) must not be partial or
discriminatory; (4) must not prohibit but may regulate trade; (5) must be general and consistent with
public policy and (6) must not be unreasonable.[115]

THE CITY OF MANILA HAS THE POWER TO ENACT ORDINANCE NO. 8027

Ordinance No. 8027 was passed by the Sangguniang Panlungsod of Manila in the exercise of its police
power. Police power is the plenary power vested in the legislature to make statutes and ordinances to
promote the health, morals, peace, education, good order or safety and general welfare of the people.
[116] This power flows from the recognition that salus populi est suprema lex (the welfare of the people
is the supreme law).[117] While police power rests primarily with the national legislature, such power
may be delegated.[118] Section 16 of the LGC, known as the general welfare clause, encapsulates the
delegated police power to local governments:[119]

Section 16. General Welfare. ― Every local government unit shall exercise the powers expressly
granted, those necessarily implied therefrom, as well as powers necessary, appropriate, or incidental
for its efficient and effective governance, and those which are essential to the promotion of the
general welfare. Within their respective territorial jurisdictions, local government units shall ensure
and support, among other things, the preservation and enrichment of culture, promote health and
safety, enhance the right of the people to a balanced ecology, encourage and support the
development of appropriate and self-reliant scientific and technological capabilities, improve public
morals, enhance economic prosperity and social justice, promote full employment among their
residents, maintain peace and order, and preserve the comfort and convenience of their inhabitants.

LGUs like the City of Manila exercise police power through their respective legislative bodies, in this case,
the Sangguniang Panlungsod or the city council. Specifically, the Sanggunian can enact ordinances for
the general welfare of the city:
Section. 458. Powers, Duties, Functions and Compensation. (a) The sangguniang panglungsod, as
the legislative branch of the city, shall enact ordinances, approve resolutions and appropriate funds
for the general welfare of the city and its inhabitants pursuant to Section 16 of this Code xxxx

This police power was also provided for in RA 409 or the Revised Charter of the City of Manila:

Section 18. Legislative powers. The [City Council] shall have the following legislative powers:

xxx xxx xxx

(g) To enact all ordinances it may deem necessary and proper for the sanitation and safety,
the furtherance of the prosperity, and the promotion of the morality, peace, good order, comfort,
convenience, and general welfare of the city and its inhabitants, and such others as may be
necessary to carry into effect and discharge the powers and duties conferred by this chapter
[120]
xxxx

Specifically, the Sanggunian has the power to "reclassify land within the jurisdiction of the city."[121]

THE ENACTMENT OF ORDINANCE NO. 8027 IS A LEGITIMATE EXERCISE OF POLICE

POWER

As with the State, local governments may be considered as having properly exercised their police power
only if the following requisites are met: (1) the interests of the public generally, as distinguished from
those of a particular class, require its exercise and (2) the means employed are reasonably necessary for
the accomplishment of the purpose and not unduly oppressive upon individuals. In short, there must be
a concurrence of a lawful subject and a lawful method.[122]

Ordinance No. 8027 was enacted "for the purpose of promoting sound urban planning, ensuring health,
public safety and general welfare"[123] of the residents of Manila. The Sanggunian was impelled to take
measures to protect the residents of Manila from catastrophic devastation in case of a terrorist attack on
the Pandacan Terminals. Towards this objective, the Sanggunian reclassified the area defined in the
ordinance from industrial to commercial.

The following facts were found by the Committee on Housing, Resettlement and Urban Development of
the City of Manila which recommended the approval of the ordinance:

the depot facilities contained 313.5 million liters of highly flammable and
(1) highly volatile products which include petroleum gas, liquefied petroleum
gas, aviation fuel, diesel, gasoline, kerosene and fuel oil among others;

(2) the depot is open to attack through land, water or air;

(3) it is situated in a densely populated place and near Malacañang Palace and
in case of an explosion or conflagration in the depot, the fire could spread
(4)
to the neighboring communities.[124]

The ordinance was intended to safeguard the rights to life, security and safety of all the inhabitants of
Manila and not just of a particular class.[125] The depot is perceived, rightly or wrongly, as a
representation of western interests which means that it is a terrorist target. As long as it there is such a
target in their midst, the residents of Manila are not safe. It therefore became necessary to remove these
terminals to dissipate the threat. According to respondent:

Such a public need became apparent after the 9/11 incident which showed that what was perceived
to be impossible to happen, to the most powerful country in the world at that, is actually possible.
The destruction of property and the loss of thousands of lives on that fateful day became the
impetus for a public need. In the aftermath of the 9/11 tragedy, the threats of terrorism continued
[126]
[such] that it became imperative for governments to take measures to combat their effects.

Wide discretion is vested on the legislative authority to determine not only what the interests of the
public require but also what measures are necessary for the protection of such interests.[127] Clearly, the
Sanggunian was in the best position to determine the needs of its constituents.

In the exercise of police power, property rights of individuals may be subjected to restraints and burdens
in order to fulfill the objectives of the government.[128] Otherwise stated, the government may enact
legislation that may interfere with personal liberty, property, lawful businesses and occupations to
promote the general welfare.[129] However, the interference must be reasonable and not arbitrary. And
to forestall arbitrariness, the methods or means used to protect public health, morals, safety or welfare
must have a reasonable relation to the end in view.[130]

The means adopted by the Sanggunian was the enactment of a zoning ordinance which reclassified the
area where the depot is situated from industrial to commercial. A zoning ordinance is defined as a local
city or municipal legislation which logically arranges, prescribes, defines and apportions a given political
subdivision into specific land uses as present and future projection of needs.[131] As a result of the
zoning, the continued operation of the businesses of the oil companies in their present location will no
longer be permitted. The power to establish zones for industrial, commercial and residential uses is
derived from the police power itself and is exercised for the protection and benefit of the residents of a
locality.[132] Consequently, the enactment of Ordinance No. 8027 is within the power of the
Sangguniang Panlungsod of the City of Manila and any resulting burden on those affected cannot be
said to be unjust:

There can be no doubt that the City of Manila has the power to divide its territory into residential and
industrial zones, and to prescribe that offensive and unwholesome trades and occupations are to be
established exclusively in the latter zone.
"The benefits to be derived by cities adopting such regulations (zoning) may be summarized as
follows: They attract a desirable and assure a permanent citizenship; they foster pride in and
attachment to the city; they promote happiness and contentment; they stabilize the use and value of
property and promote the peace, [tranquility], and good order of the city. We do not hesitate to say
that the attainment of these objects affords a legitimate field for the exercise of the police power. He
who owns property in such a district is not deprived of its use by such regulations. He may use it for
the purposes to which the section in which it is located is dedicated. That he shall not be permitted
to use it to the desecration of the community constitutes no unreasonable or permanent hardship
and results in no unjust burden."

Xxx xxx xxx

"The 14th Amendment protects the citizen in his right to engage in any lawful business, but it does
not prevent legislation intended to regulate useful occupations which, because of their nature or
[133]
location, may prove injurious or offensive to the public."

We entertain no doubt that Ordinance No. 8027 is a valid police power measure because there is a
concurrence of lawful subject and lawful method.

ORDINANCE NO. 8027 IS NOT UNFAIR, OPPRESSIVE OR CONFISCATORY WHICH

AMOUNTS TO TAKING WITHOUT COMPENSATION

According to the oil companies, Ordinance No. 8027 is unfair and oppressive as it does not only regulate
but also absolutely prohibits them from conducting operations in the City of Manila. Respondent
counters that this is not accurate since the ordinance merely prohibits the oil companies from operating
their businesses in the Pandacan area.

Indeed, the ordinance expressly delineated in its title and in Section 1 what it pertained to. Therefore, the
oil companies' contention is not supported by the text of the ordinance. Respondent succinctly stated
that:

The oil companies are not forbidden to do business in the City of Manila. They may still very well do
so, except that their oil storage facilities are no longer allowed in the Pandacan area. Certainly, there
are other places in the City of Manila where they can conduct this specific kind of business.
Ordinance No. 8027 did not render the oil companies illegal. The assailed ordinance affects the oil
[134]
companies business only in so far as the Pandacan area is concerned.

The oil companies are not prohibited from doing business in other appropriate zones in Manila. The City
of Manila merely exercised its power to regulate the businesses and industries in the zones it established:
As to the contention that the power to regulate does not include the power to prohibit, it will be seen
that the ordinance copied above does not prohibit the installation of motor engines within the
municipality of Cabanatuan but only within the zone therein fixed. If the municipal council of
Cabanatuan is authorized to establish said zone, it is also authorized to provide what kind of engines
may be installed therein. In banning the installation in said zone of all engines not excepted in the
ordinance, the municipal council of Cabanatuan did no more than regulate their installation by
[135]
means of zonification.

The oil companies aver that the ordinance is unfair and oppressive because they have invested billions of
pesos in the depot.[136] Its forced closure will result in huge losses in income and tremendous costs in
constructing new facilities.

Their contention has no merit. In the exercise of police power, there is a limitation on or restriction of
property interests to promote public welfare which involves no compensable taking. Compensation is
necessary only when the state's power of eminent domain is exercised. In eminent domain, property is
appropriated and applied to some public purpose. Property condemned under the exercise of police
power, on the other hand, is noxious or intended for a noxious or forbidden purpose and, consequently,
is not compensable.[137] The restriction imposed to protect lives, public health and safety from danger is
not a taking. It is merely the prohibition or abatement of a noxious use which interferes with paramount
rights of the public.

Property has not only an individual function, insofar as it has to provide for the needs of the owner, but
also a social function insofar as it has to provide for the needs of the other members of society.[138] The
principle is this:

Police power proceeds from the principle that every holder of property, however absolute and
unqualified may be his title, holds it under the implied liability that his use of it shall not be
injurious to the equal enjoyment of others having an equal right to the enjoyment of their property,
nor injurious to the right of the community. Rights of property, like all other social and conventional
rights, are subject to reasonable limitations in their enjoyment as shall prevent them from being
injurious, and to such reasonable restraints and regulations established by law as the legislature,
under the governing and controlling power vested in them by the constitution, may think necessary
[139]
and expedient.

In the regulation of the use of the property, nobody else acquires the use or interest therein, hence there
is no compensable taking.[140] In this case, the properties of the oil companies and other businesses
situated in the affected area remain theirs. Only their use is restricted although they can be applied to
other profitable uses permitted in the commercial zone.

ORDINANCE NO. 8027 IS NOT PARTIAL AND DISCRIMINATORY

The oil companies take the position that the ordinance has discriminated against and singled out the
Pandacan Terminals despite the fact that the Pandacan area is congested with buildings and residences
that do not comply with the National Building Code, Fire Code and Health and Sanitation Code.[141]
This issue should not detain us for long. An ordinance based on reasonable classification does not violate
the constitutional guaranty of the equal protection of the law.[142] The requirements for a valid and
reasonable classification are: (1) it must rest on substantial distinctions; (2) it must be germane to the
purpose of the law; (3) it must not be limited to existing conditions only and (4) it must apply equally to
all members of the same class.[143]

The law may treat and regulate one class differently from another class provided there are real and
substantial differences to distinguish one class from another.[144] Here, there is a reasonable
classification. We reiterate that what the ordinance seeks to prevent is a catastrophic devastation that will
result from a terrorist attack. Unlike the depot, the surrounding community is not a high-value terrorist
target. Any damage caused by fire or explosion occurring in those areas would be nothing compared to
the damage caused by a fire or explosion in the depot itself. Accordingly, there is a substantial distinction.
The enactment of the ordinance which provides for the cessation of the operations of these terminals
removes the threat they pose. Therefore it is germane to the purpose of the ordinance. The classification
is not limited to the conditions existing when the ordinance was enacted but to future conditions as well.
Finally, the ordinance is applicable to all businesses and industries in the area it delineated.

ORDINANCE NO. 8027 IS NOT INCONSISTENT WITH RA 7638 AND RA 8479

The oil companies and the DOE assert that Ordinance No. 8027 is unconstitutional because it
contravenes RA 7638 (DOE Act of 1992)[145] and RA 8479 (Downstream Oil Industry Deregulation Law
of 1998).[146] They argue that through RA 7638, the national legislature declared it a policy of the state
"to ensure a continuous, adequate, and economic supply of energy"[147] and created the DOE to
implement this policy. Thus, under Section 5 I, DOE is empowered to "establish and administer
programs for the exploration, transportation, marketing, distribution, utilization, conservation,
stockpiling, and storage of energy resources." Considering that the petroleum products contained in the
Pandacan Terminals are major and critical energy resources, they conclude that their administration,
storage, distribution and transport are of national interest and fall under DOE's primary and exclusive
jurisdiction.[148]

They further assert that the terminals are necessary for the delivery of immediate and adequate supply of
oil to its recipients in the most economical way.[149] Local legislation such as Ordinance No. 8027
(which effectively calls for the removal of these terminals) allegedly frustrates the state policy of ensuring
a continuous, adequate, and economic supply of energy expressed in RA 7638, a national law.[150]
Likewise, the ordinance thwarts the determination of the DOE that the terminals' operations should be
merely scaled down and not discontinued.[151] They insist that this should not be allowed considering
that it has a nationwide economic impact and affects public interest transcending the territorial
jurisdiction of the City of Manila.[152]

According to them, the DOE's supervision over the oil industry under RA 7638 was subsequently
underscored by RA 8479, particularly in Section 7 thereof:
SECTION 7. Promotion of Fair Trade Practices. ― The Department of Trade and Industry (DTI)
and DOE shall take all measures to promote fair trade and prevent cartelization, monopolies,
combinations in restraint of trade, and any unfair competition in the Industry as defined in Article
186 of the Revised Penal Code, and Articles 168 and 169 of Republic Act No. 8293, otherwise known
as the "Intellectual Property Rights Law". The DOE shall continue to encourage certain
practices in the Industry which serve the public interest and are intended to achieve
efficiency and cost reduction, ensure continuous supply of petroleum products, and
enhance environmental protection. These practices may include borrow-and-loan agreements,
rationalized depot and manufacturing operations, hospitality agreements, joint tanker and pipeline
utilization, and joint actions on oil spill control and fire prevention. (Emphasis supplied)

Respondent counters that DOE's regulatory power does not preclude LGUs from exercising their police
power.[153]

Indeed, ordinances should not contravene existing statutes enacted by Congress. The rationale for this
was clearly explained in Magtajas vs. Pryce Properties Corp., Inc.:[154]

The rationale of the requirement that the ordinances should not contravene a statute is obvious.
Municipal governments are only agents of the national government. Local councils exercise only
delegated legislative powers conferred on them by Congress as the national lawmaking body. The
delegate cannot be superior to the principal or exercise powers higher than those of the latter. It is a
heresy to suggest that the local government units can undo the acts of Congress, from which they
have derived their power in the first place, and negate by mere ordinance the mandate of the statute.

"Municipal corporations owe their origin to, and derive their powers and rights wholly from the
legislature. It breathes into them the breath of life, without which they cannot exist. As it creates, so
it may destroy. As it may destroy, it may abridge and control. Unless there is some constitutional
limitation on the right, the legislature might, by a single act, and if we can suppose it capable of so
great a folly and so great a wrong, sweep from existence all of the municipal corporations in the
State, and the corporation could not prevent it. We know of no limitation on the right so far as to the
corporation themselves are concerned. They are, so to phrase it, the mere tenants at will of the
legislature."

This basic relationship between the national legislature and the local government units has not been
enfeebled by the new provisions in the Constitution strengthening the policy of local autonomy.
Without meaning to detract from that policy, we here confirm that Congress retains control of the
local government units although in significantly reduced degree now than under our previous
Constitutions. The power to create still includes the power to destroy. The power to grant still
includes the power to withhold or recall. True, there are certain notable innovations in the
Constitution, like the direct conferment on the local government units of the power to tax, which
cannot now be withdrawn by mere statute. By and large, however, the national legislature is still the
[155]
principal of the local government units, which cannot defy its will or modify or violate it.

The question now is whether Ordinance No. 8027 contravenes RA 7638 and RA 8479. It does not.
Under Section 5 I of RA 7638, DOE was given the power to "establish and administer programs for the
exploration, transportation, marketing, distribution, utilization, conservation, stockpiling, and storage of
energy resources." On the other hand, under Section 7 of RA 8749, the DOE "shall continue to encourage
certain practices in the Industry which serve the public interest and are intended to achieve efficiency
and cost reduction, ensure continuous supply of petroleum products." Nothing in these statutes prohibits
the City of Manila from enacting ordinances in the exercise of its police power.

The principle of local autonomy is enshrined in and zealously protected under the Constitution. In Article
II, Section 25 thereof, the people expressly adopted the following policy:

Section 25. The State shall ensure the autonomy of local governments.

An entire article (Article X) of the Constitution has been devoted to guaranteeing and promoting the
autonomy of LGUs. The LGC was specially promulgated by Congress to ensure the autonomy of local
governments as mandated by the Constitution:

Sec. 2. Declaration of Policy. ― (a) It is hereby declared the policy of the State that the
territorial and political subdivisions of the State shall enjoy genuine and meaningful
local autonomy to enable them to attain their fullest development as self-reliant
communities and make them more effective partners in the attainment of national
goals. Toward this end, the State shall provide for a more responsive and accountable local
government structure instituted through a system of decentralization whereby local government
units shall be given more powers, authority, responsibilities, and resources. The process of
decentralization shall proceed from the National Government to the local government units.
(Emphasis supplied)

We do not see how the laws relied upon by the oil companies and DOE stripped the City of Manila of its
power to enact ordinances in the exercise of its police power and to reclassify the land uses within its
jurisdiction. To guide us, we shall make a brief survey of our decisions where the police power measure of
the LGU clashed with national laws.

In Tan v. Pereña,[156] the Court ruled that Ordinance No. 7 enacted by the municipality of
Daanbantayan, Cebu allowing the operation of three cockpits was invalid for violating PD 449 (or the
Cockfighting Law of 1974) which permitted only one cockpit per municipality.

In Batangas CATV, Inc. v. Court of Appeals,[157] the Sangguniang Panlungsod of Batangas City enacted
Resolution No. 210 granting Batangas CATV, Inc. a permit to operate a cable television (CATV) system in
Batangas City. The Court held that the LGU did not have the authority to grant franchises to operate a
CATV system because it was the National Telecommunications Commission (NTC) that had the power
under EO Nos. 205 and 436 to regulate CATV operations. EO 205 mandated the NTC to grant certificates
of authority to CATV operators while EO 436 vested on the NTC the power to regulate and supervise the
CATV industry.

In Lina, Jr. v. Paño,[158] we held that Kapasiyahan Bilang 508, Taon 1995 of the Sangguniang
Panlalawigan of Laguna could not be used as justification to prohibit lotto in the municipality of San
Pedro, Laguna because lotto was duly authorized by RA 1169, as amended by BP 42. This law granted a
franchise to the Philippine Charity Sweepstakes Office and allowed it to operate lotteries.

In Magtajas v. Pryce Properties Corp., Inc.,[159] the Sangguniang Panlungsod of Cagayan de Oro City
passed Ordinance Nos. 3353 and 3375-93 prohibiting the operation of casinos in the city. We ruled that
these ordinances were void for contravening PD 1869 or the charter of the Philippine Amusements and
Gaming Corporation which had the power to operate casinos.

The common dominator of all of these cases is that the national laws were clearly and expressly in
conflict with the ordinances/resolutions of the LGUs. The inconsistencies were so patent that there was
no room for doubt. This is not the case here.

The laws cited merely gave DOE general powers to "establish and administer programs for the
exploration, transportation, marketing, distribution, utilization, conservation, stockpiling, and storage of
energy resources" and "to encourage certain practices in the [oil] industry which serve the public interest
and are intended to achieve efficiency and cost reduction, ensure continuous supply of petroleum
products." These powers can be exercised without emasculating the LGUs of the powers granted them.
When these ambiguous powers are pitted against the unequivocal power of the LGU to enact police
power and zoning ordinances for the general welfare of its constituents, it is not difficult to rule in favor
of the latter. Considering that the powers of the DOE regarding the Pandacan Terminals are not
categorical, the doubt must be resolved in favor of the City of Manila:
SECTION 5. Rules of Interpretation. ― In the interpretation of the provisions of this Code, the
following rules shall apply:

(a) Any provision on a power of a local government unit shall be liberally interpreted in its favor,
and in case of doubt, any question thereon shall be resolved in favor of devolution of powers and of
the lower local government unit. Any fair and reasonable doubt as to the existence of the power shall
be interpreted in favor of the local government unit concerned;
xxx xxx xxx

(c) IThe general welfare provisions in this Code shall be liberally interpreted to give more powers
to local government units in accelerating economic development and upgrading the quality of life
for the people in the community xxxx

The least we can do to ensure genuine and meaningful local autonomy is not to force an interpretation
that negates powers explicitly granted to local governments. To rule against the power of LGUs to
reclassify areas within their jurisdiction will subvert the principle of local autonomy guaranteed by the
Constitution.[160] As we have noted in earlier decisions, our national officials should not only comply
with the constitutional provisions on local autonomy but should also appreciate the spirit and liberty
upon which these provisions are based.[161]

THE DOE CANNOT EXERCISE THE POWER OF CONTROL OVER LGUS

Another reason that militates against the DOE's assertions is that Section 4 of Article X of the
Constitution confines the President's power over LGUs to one of general supervision:
SECTION 4. The President of the Philippines shall exercise general supervision over local
governments. Xxxx
Consequently, the Chief Executive or his or her alter egos, cannot exercise the power of control over
them.[162] Control and supervision are distinguished as follows:
[Supervision] means overseeing or the power or authority of an officer to see that subordinate
officers perform their duties. If the latter fail or neglect to fulfill them, the former may take such
action or step as prescribed by law to make them perform their duties. Control, on the other hand,
means the power of an officer to alter or modify or nullify or set aside what a subordinate officer
ha[s] done in the performance of his duties and to substitute the judgment of the former for that of
[163]
the latter.

Supervisory power, when contrasted with control, is the power of mere oversight over an inferior body; it
does not include any restraining authority over such body.[164] It does not allow the supervisor to annul
the acts of the subordinate.[165] Here, what the DOE seeks to do is to set aside an ordinance enacted by
local officials, a power that not even its principal, the President, has. This is because:
Under our present system of government, executive power is vested in the President. The members
of the Cabinet and other executive officials are merely alter egos. As such, they are subject to the
power of control of the President, at whose will and behest they can be removed from office; or their
actions and decisions changed, suspended or reversed. In contrast, the heads of political
subdivisions are elected by the people. Their sovereign powers emanate from the electorate, to
whom they are directly accountable. By constitutional fiat, they are subject to the President's
supervision only, not control, so long as their acts are exercised within the sphere of their legitimate
powers. By the same token, the President may not withhold or alter any authority or power given
[166]
them by the Constitution and the law.

Thus, the President and his or her alter egos, the department heads, cannot interfere with the activities of
local governments, so long as they act within the scope of their authority. Accordingly, the DOE cannot
substitute its own discretion for the discretion exercised by the sanggunian of the City of Manila. In local
affairs, the wisdom of local officials must prevail as long as they are acting within the parameters of the
Constitution and the law.[167]

ORDINANCE NO. 8027 IS NOT INVALID FOR FAILURE TO COMPLY WITH RA 7924 AND
EO 72

The oil companies argue that zoning ordinances of LGUs are required to be submitted to the
Metropolitan Manila Development Authority (MMDA) for review and if found to be in compliance with
its metropolitan physical framework plan and regulations, it shall endorse the same to the Housing and
Land Use Regulatory Board (HLURB). Their basis is Section 3 (e) of RA 7924:[168]
SECTION 3. Scope of MMDA Services. ― Metro-wide services under the jurisdiction of the
MMDA are those services which have metro-wide impact and transcend local political boundaries
or entail huge expenditures such that it would not be viable for said services to be provided by the
individual [LGUs] comprising Metropolitan Manila. These services shall include:

xxx xxx xxx

(e) Urban renewal, zoning, and land use planning, and shelter services which include the
formulation, adoption and implementation of policies, standards, rules and regulations, programs
and projects to rationalize and optimize urban land use and provide direction to urban growth and
expansion, the rehabilitation and development of slum and blighted areas, the development of
shelter and housing facilities and the provision of necessary social services thereof. (Emphasis
supplied)

Reference was also made to Section 15 of its implementing rules:

Section 15. Linkages with HUDCC, HLURB, NHA, LGUs and Other National Government Agencies
Concerned on Urban Renewal, Zoning and Land Use Planning and Shelter Services. Within the
context of the National Housing and Urban Development Framework, and pursuant to the national
standards, guidelines and regulations formulated by the Housing and Land Use Regulatory Board
[HLURB] on land use planning and zoning, the [MMDA] shall prepare a metropolitan physical
framework plan and regulations which shall complement and translate the socio-economic
development plan for Metro Manila into physical or spatial terms, and provide the basis for the
preparation, review, integration and implementation of local land use plans and zoning, ordinance
of cities and municipalities in the area.

Said framework plan and regulations shall contain, among others, planning and zoning policies and
procedures that shall be observed by local government units in the preparation of their own plans
and ordinances pursuant to Section 447 and 458 of RA 7160, as well as the identification of sites and
projects that are considered to be of national or metropolitan significance.

Cities and municipalities shall prepare their respective land use plans and zoning
ordinances and submit the same for review and integration by the [MMDA] and
indorsement to HLURB in accordance with Executive Order No. 72 and other
pertinent laws.

In the preparation of a Metropolitan Manila physical framework plan and regulations, the [MMDA]
shall coordinate with the Housing and Urban Development Coordinating Council, HLURB, the
National Housing Authority, Intramuros Administration, and all other agencies of the national
government which are concerned with land use and zoning, urban renewal and shelter services.
(Emphasis supplied)

They also claim that EO 72[169] provides that zoning ordinances of cities and municipalities of Metro
Manila are subject to review by the HLURB to ensure compliance with national standards and guidelines.
They cite Section 1, paragraphs I, (e), (f) and (g):
SECTION 1. Plan formulation or updating. ―

xxx xxx xxx

(c) Cities and municipalities of Metropolitan Manila shall continue to formulate or update their
respective comprehensive land use plans, in accordance with the land use planning and zoning
standards and guidelines prescribed by the HLURB pursuant to EO 392, S. of 1990, and other
pertinent national policies.

Xxx xxx xxx

(e) Pursuant to LOI 729, S. of 1978, EO 648, S. of 1981, and RA 7279, the comprehensive land
use plans of provinces, highly urbanized cities and independent component cities shall be
reviewed and ratified by the HLURB to ensure compliance with national standards and guidelines.

(f) Pursuant to EO 392, S. of 1999, the comprehensive land use plans of cities and
municipalities of Metropolitan Manila shall be reviewed by the HLURB to ensure compliance with
national standards and guidelines.

(g) Said review shall be completed within three (3) months upon receipt thereof otherwise, the same
shall be deemed consistent with law, and, therefore, valid. (Emphasis supplied)

They argue that because Ordinance No. 8027 did not go through this review process, it is invalid.

The argument is flawed.

RA 7942 does not give MMDA the authority to review land use plans and zoning ordinances of cities and
municipalities. This was only found in its implementing rules which made a reference to EO 72. EO 72
expressly refers to comprehensive land use plans (CLUPs) only. Ordinance No. 8027 is admittedly not a
CLUP nor intended to be one. Instead, it is a very specific ordinance which reclassified the land use of a
defined area in order to prevent the massive effects of a possible terrorist attack. It is Ordinance No. 8119
which was explicitly formulated as the "Manila [CLUP] and Zoning Ordinance of 2006." CLUPs are the
ordinances which should be submitted to the MMDA for integration in its metropolitan physical
framework plan and approved by the HLURB to ensure that they conform with national guidelines and
policies.

Moreover, even assuming that the MMDA review and HLURB ratification are necessary, the oil
companies did not present any evidence to show that these were not complied with. In accordance with
the presumption of validity in favor of an ordinance, its constitutionality or legality should be upheld in
the absence of proof showing that the procedure prescribed by law was not observed. The burden of proof
is on the oil companies which already had notice that this Court was inclined to dispose of all the issues
in this case. Yet aside from their bare assertion, they did not present any certification from the MMDA or
the HLURB nor did they append these to their pleadings. Clearly, they failed to rebut the presumption of
validity of Ordinance No. 8027.[170]

CONCLUSION
Essentially, the oil companies are fighting for their right to property. They allege that they stand to lose
billions of pesos if forced to relocate. However, based on the hierarchy of constitutionally protected
rights, the right to life enjoys precedence over the right to property.[171] The reason is obvious: life is
irreplaceable, property is not. When the state or LGU's exercise of police power clashes with a few
individuals' right to property, the former should prevail.[172]

Both law and jurisprudence support the constitutionality and validity of Ordinance No. 8027. Without a
doubt, there are no impediments to its enforcement and implementation. Any delay is unfair to the
inhabitants of the City of Manila and its leaders who have categorically expressed their desire for the
relocation of the terminals. Their power to chart and control their own destiny and preserve their lives
and safety should not be curtailed by the intervenors' warnings of doomsday scenarios and threats of
economic disorder if the ordinance is enforced.

Secondary to the legal reasons supporting the immediate implementation of Ordinance No. 8027 are the
policy considerations which drove Manila's government to come up with such a measure:
... [The] oil companies still were not able to allay the apprehensions of the city regarding the security
threat in the area in general. No specific action plan or security measures were presented that would
prevent a possible large-scale terrorist or malicious attack especially an attack aimed at Malacañang.
The measures that were installed were more directed towards their internal security and did not
include the prevention of an external attack even on a bilateral level of cooperation between these
companies and the police and military.

Xxx xxx xxx

It is not enough for the city government to be told by these oil companies that they have the most
sophisticated fire-fighting equipments and have invested millions of pesos for these equipments.
The city government wants to be assured that its residents are safe at any time from these
installations, and in the three public hearings and in their position papers, not one statement has
been said that indeed the absolute safety of the residents from the hazards posed by these
[173]
installations is assured.

We are also putting an end to the oil companies' determination to prolong their stay in Pandacan despite
the objections of Manila's residents. As early as October 2001, the oil companies signed a MOA with the
DOE obliging themselves to:
... undertake a comprehensive and comparative study ... [which] shall include the preparation of a
Master Plan, whose aim is to determine the scope and timing of the feasible location of the
Pandacan oil terminals and all associated facilities and infrastructure including government support
essential for the relocation such as the necessary transportation infrastructure, land and right of
way acquisition, resettlement of displaced residents and environmental and social acceptability
[174]
which shall be based on mutual benefit of the Parties and the public.

Now that they are being compelled to discontinue their operations in the Pandacan Terminals, they
cannot feign unreadiness considering that they had years to prepare for this eventuality.

Just the same, this Court is not about to provoke a crisis by ordering the immediate relocation of the
Pandacan Terminals out of its present site. The enforcement of a decision of this Court, specially one with
far-reaching consequences, should always be within the bounds of reason, in accordance with a
comprehensive and well-coordinated plan, and within a time-frame that complies with the letter and
spirit of our resolution. To this end, the oil companies have no choice but to obey the law.

A WARNING TO PETITIONERS' COUNSEL

We draw the attention of the parties to a matter of grave concern to the legal profession.

Petitioners and their counsel, Atty. Samson Alcantara, submitted a four-page memorandum that clearly
contained either substance nor research. It is absolutely insulting to this Court.

We have always tended towards judicial leniency, temperance and compassion to those who suffer from a
wrong perception of what the majesty of the law means. But for a member of the bar, an officer of the
court, to file in this Court a memorandum of such unacceptable quality is an entirely different matter.

It is indicative less of a personal shortcoming or contempt of this Court and more of a lawyer's sorry
descent from a high sense of duty and responsibility. As a member of the bar and as an officer of the
court, a lawyer ought to be keenly aware that the chief safeguard of the body politic is respect for the law
and its magistrates.

There is nothing more effective than the written word by which counsel can persuade this Court of the
righteousness of his cause. For if truth were self-evident, a memorandum would be completely
unnecessary and superfluous.

The inability of counsel to prepare a memorandum worthy of this Court's consideration is an ejemplo
malo to the legal profession as it betrays no genuine interest in the cause he claims to espouse. Or did
counsel think he can earn his moment of glory without the hard work and dedication called for by his
petition?

A Final Word

On Wednesday, January 23, 2008, a defective tanker containing 2,000 liters of gasoline and 14,000 liters
of diesel exploded in the middle of the street a short distance from the exit gate of the Pandacan
Terminals, causing death, extensive damage and a frightening conflagration in the vicinity of the
incident. Need we say anthing about what will happen if it is the estimated 162 to 211 million liters[175]
of petroleum products in the terminal complex which blow up?

WHEREFORE, the motions for leave to intervene of Chevron Philippines Inc., Petron Corporation and
Pilipinas Shell Petroleum Corporation, and the Republic of the Philippines, represented by the
Department of Energy, are hereby GRANTED. Their respective motions for reconsideration are hereby
DENIED. The Regional Trial Court, Manila, Branch 39 is ORDERED to DISMISS the consolidated
cases of Civil Case No. 03-106377 and Civil Case No. 03-106380.

We reiterate our order to respondent Mayor of the City of Manila to enforce Ordinance No. 8027. In
coordination with the appropriate agencies and other parties involved, respondent Mayor is hereby
ordered to oversee the relocation and transfer of the Pandacan Terminals out of its present site.

To ensure the orderly transfer, movement and relocation of assets and personnel, the intervenors
Chevron Philippines Inc., Petron Corporation and Pilipinas Shell Petroleum Corporation shall, within a
non-extendible period of ninety (90) days, submit to the Regional Trial Court of Manila, Branch 39, the
comprehensive plan and relocation schedule which have allegedly been prepared. The presiding judge of
Manila RTC, Branch 39 will monitor the strict enforcement of this resolution.
Atty. Samson Alcantara is hereby ordered to explain within five (5) days from notice why he should not
be disciplined for his refusal, or inability, to file a memorandum worthy of the consideration of this
Court.

Treble costs against petitioners' counsel, Atty. Samson Alcantara.

SO ORDERED.

Puno, C.J., (Chairperson), Sandoval-Gutierrez, Azcuna and Leonardo-De Castro, JJ., concur.

[1] Formerly known as Caltex (Philippines), Inc.

[2] Rollo, p. 192.

[3] Entitled "An Act Creating the Department of Energy, Rationalizing the Organization and Functions of
Government Agencies Related to Energy, and for Other Purposes" also known as the "DOE Act of 1992"
and approved on December 9, 1992. Prior to RA 7638, a Department of Energy was established under
Presidential Decree No. 1206, "Creating the Department of Energy," approved on October 6, 1977.

[4] RA 7638, Section 4.

[5] Entitled "Ordinance Reclassifying the Land Use of [Those] Portions of Land Bounded by the Pasig
River In The North[,] PNR Railroad Track in the East, Beata St. in the South, Palumpong St. in the
Southwest and Estero De Pandacan in the West, PNR Railroad in the Northwest Area, Estero of
Pandacan in the Northeast, Pasig River in the Southeast and Dr. M. L. Carreon in the Southwest; the
Area of Punta, Sta. Ana Bounded by the Pasig River, Marcelino Obrero St.[,] Mayo 28 St. and the F.
Manalo Street from Industrial II to Commercial I."

[6] Rollo, p. 12.

[7] Id., p. 6.

[8] Id., pp. 16-18. This MOU modified the Memorandum of Agreement (MOA) executed on October 12,
2001 by the oil companies and the DOE. This MOA called for close coordination among the parties with a
view of formulating appropriate measures to arrive at the best possible option to ensure, maintain and at
the same time harmonize the interests of both government and the oil companies; id., pp. 413-415.

[9] Entitled "Resolution Ratifying the Memorandum of Understanding (MOU) Entered into by and
among the Department of Energy, the City of Manila, Caltex (Philippines), Inc., Petron Corporation and
Pilipinas Shell Petroleum Corporation on 26 June 2002, and Known as Document No. 60, Page No. 12,
Book No. 1, Series of 2002 in the Notarial Registry of Atty. Neil Lanson Salcedo, Notary Public for and in
the City of Manila;" id., p. 36.

[10] Id.

[11] Entitled "Resolution Extending the Validity of Resolution 97, Series of 2002, to April 30, 2003,
Thereby Authorizing his Honor Mayor Jose L. Atienza, Jr., to Issue Special Business Permits to Caltex
Phil., Inc., Petron Corporation and Pilipinas Shell Petroleum Corporation Situated within the Pandacan
Oil Terminal Covering the said Period;" id., p. 38.

[12] Id.

[13] Section 455 (b) (2).

[14] Rollo, p. 280.

[15] Id., p. 333.

[16] Penned by Judge Reynaldo G. Ros, id., p. 388.

[17] Penned by Judge Guillermo G. Purganan, id., p. 423.

[18] Id., p. 458.

[19] Id., p. 493.

[20] Id., p. 495.

[21] Petron tried to intervene in civil case no. 06-115334 but the court denied its motion; id., pp. 692-694.

[22] Memorandum of oil companies, p. 25.

[23] Rollo, p. 238.

[24] Id., p. 698.

[25] Footnote no. 50 of memorandum of oil companies, id., p. 26.

[26] According to the oil companies, they were informed that their and the DOE's motions to intervene
had already been granted (Memorandum of oil companies, p. 28). However, this contention is not
supported by the records.

[27] Transcript of April 11, 2007 Oral Arguments, pp. 125, 192-195.

[28] G. B. Bagayaua, Pandacan's Ring of Fire, Newsbreak 3(4): 12 (March 3, 2003).

[29] Pandacan Installation Profile, (visited March 11, 2007).

[30] History: More than 85 years of Philippine Partnership, (visited March 11, 2007).

[31] Rollo, p. 300.

[32] (visited May 15, 2007).

[33] (visited May 15, 2007).

[34]
[34] United States v. Caltex, Phils., et. al., 344 U.S. 149 (1952).

[35] N. JOAQUIN, ALMANAC FOR MANILEÑOS 97 (1979).

[36] Supra note 30.

[37] Pandacan oil depots: A disaster waiting to happen (visited May 15, 2007).

[38] Id.

[39] Safety and health risks in the Philippines (visited May 15, 2007).

[40] Supra note 37.

[41] Supra note 28.

[42] Supra note 37.

[43] Id.

[44] Rollo, p. 221.

[45] Supra note 28 at 13.

[46] Supra note 44.

[47] Id., p. 223.

[48] Id., p. 222.

[49] Id., p. 731.

[50] Hi-Tone Marketing Corporation v. Baikal Realty Corporation, G.R. No. 149992, 20 August 2004,
437 SCRA 121, 139, citing Manalo v. Court of Appeals, G.R. No. 141297, 8 October 2001, 366 SCRA 752,
766 (2001), which in turn cited First Philippine Holdings Corporation v. Sandiganbayan, 253 SCRA 30
(1996).

[51] See Ortega v. Court of Appeals, 359 Phil. 126, 139 (1998), citing the 1997 Rules of Civil Procedure by
Feria, pp. 71-72.

[52] G.R. No. 166429, 1 February 2006, 481 SCRA 457.

[53] Id., p. 470.

[54] Pinlac v. Court of Appeals, 457 Phil. 527, 534 (2003), citing Director of Lands v. Court of Appeals,
G.R. No. L-45168, 25 September 1979, 93 SCRA 238, 246.

[55] Rollo, p. 203.

[56] Alfelor v. Halasan, G.R. No. 165987, 31 March 2006, 486 SCRA 451, 461, citing Nordic Asia Ltd. v.
Court of Appeals, 451 Phil. 482, 492-493 (2003).

[57] To justify their late intervention, the oil companies explained that [they] were aware of this Petition
before the Honorable Court but they opted not to intervene then because they believed that it was more
proper to directly attack the validity of Ordinance No. 8027 (Memorandum, p. 22). They also said that
they did not deem it necessary to intervene then because they relied in good faith that respondent
[Mayor] would, as a conscientious litigant, interpose a fitting defense of the instant Petition. (Footnote
no. 2, id., p. 3)

[58] Hi-Tone Marketing Corporation v. Baikal Realty Corporation, supra note 50 at 140.

[59] The full text reads:

SEC. 3. Petition for Mandamus. When any tribunal, corporation, board, officer or person unlawfully
neglects the performance of an act which the law specifically enjoins as a duty resulting from an office,
trust, or station, or unlawfully excludes another from the use and enjoyment of a right or office to which
such other is entitled, and there is no other plain, speedy and adequate remedy in the ordinary course of
law, the person aggrieved thereby may file a verified petition in the proper court, alleging the facts with
certainty and praying that judgment be rendered commanding the respondent, immediately or at some
other time to be specified by the court, to do the act required to be done to protect the rights of the
petitioner, and to pay the damages sustained by the petitioner by reason of the wrongful acts of the
respondent. xxx

[60] Supra note 25.

[61] Footnote no. 24, p. 9 of the decision.

[62] Logronio v. Taleseo, 370 Phil. 907, 910 (1999).

[63] Vera v. Hon. Judge Arca, 138 Phil. 369, 384 (1969).

[64] Filipino Metals Corporation v. Secretary of Department of Trade and Industry, G.R. No. 157498,
15 July 2005, 463 SCRA 616, 624 citing Valley Trading Co., Inc. v. CFI of Isabela, Br. II, G.R. No. 49529,
31 March 1989, 171 SCRA 501, 508, in turn citing Tablarin v. Gutierrez, G.R. No. L-78104, 31 July 1987,
52 SCRA 731, 737.

[65] Rollo, pp. 387-388.

[66] Valley Trading Co., Inc. v. CFI of Isabela, Br. II, supra note 64.

[67] Id., citations omitted.

[68] Ermita-Malate Hotel and Motel Operators Association, Inc. v. Hon. City Mayor of Manila, 127
Phil. 306, 314-315 (1967), citing US v. Salaveria, 39 Phil. 102, 111 (1918).

[69] Angara v. Electoral Commission, 63 Phil. 139, 158-159 (1936).

[70] Memorandum of oil companies, p. 38, citing City of Manila v. Laguio, Jr., G.R. No. 118127, 12 April
2005, 455 SCRA 308, 358-359.

[ 1]
[71] People v. De Guzman, et al., 90 Phil. 132, 135 (1951), citations omitted.

[72] Seng Kee & Co. v. Earnshaw and Piatt, 56 Phil. 204, 212-213 (1931).

[73] Sec. 1. Judicial notice, when mandatory. - A court shall take judicial notice, without introduction of
evidence, of the existence and territorial extent of states, their political history, forms of government and
symbols of nationality, the law of nations, the admiralty and maritime courts of the world and their seals,
the political constitution and history of the Philippines, the official acts of the legislative, executive and
judicial departments of the Philippines, the laws of nature, the measure of time and the geographical
divisions.

[74] Revised Charter of the City of Manila.

[75] 29 AmJur 2d 156, Evidence, Section 126 citing Faustrum v. Board of Fire & Police Comm'rs, (2d
Dist) 240 III App 3d 947, 181 Ill Dec 567, 608 NE2d 640, app den 151 III 2d 563, 186 III Dec 380, 616
NE2d 333.

[76] Id., citing Dream Mile Club, Inc. v. Tobyhanna Township Bd. of Supervisors, 150 Pa Cmwlth 309,
615 A2d 931.

[77] Id.

[78] Transcript of April 11, 2007 Oral Arguments, p. 244.

[79] Rollo, p. 698.

[80] Memorandum of respondent, pp. 30-31.

[81] Memorandum of oil companies, p. 26.

[82] Answer, paragraphs 20.1 and 20.3, pp. 20-21.

[83] Alfelor v. Halasan, supra note 56 at 460, citing Cunanan v. Amparo, 80 Phil. 227, 232 (1948), in
turn citing McDaniel v. Apacible, 44 Phil. 248 (1922).

[84] Republic Glass Corporation v. Qua, G.R. No. 144413, 30 July 2004, 435 SCRA 480, 492.

[85] Republic of the Philippines v. Court of Appeals, 359 Phil. 530, 582 (1998), Romero, J., separate
opinion.

[86] Sec. 84 of Ordinance No. 8119 provides:

"Repealing Clause. - All ordinances, rules or regulations in conflict with the provisions of this Ordinance
are hereby repealed; PROVIDED, That the rights that are vested upon the effectivity of this Ordinance
shall not be impaired." (Rollo, p. 493.)

[87] Memorandum of oil companies, pp. 44-45, citing Annex "C" of Ordinance No. 8119. Annex "C" (Zone
Boundaries) of Ordinance No. 8119 enumerates and specifies the areas covered by the different zones:

"High Density Residential/Mixed Use

Zone R-3/MXD
Color: Yellow District I
1. area covered by Smokey Mountain Development and Reclamation Project.
2. area bounded on the N by Manila Navotas boundary, on the SW by Estero de Maypajo, on the NW
by Malaya, on the NE by Simeon de Jesus, and on the NW by Taliba
3. area bounded on the N by Estero de Maypajo, on the SW by Estero de Sunog Apog/Rodriguez, on
the NW by Younger, and on the NE by Estaro de Maypajo
4. area occupied by a portion in Vitas Complex (as indicated in the Zoning Map)
5. area bounded on the SE by F. Varona, on the SW by Lallana, on the NW by Roxas, and on the NE by
Jacinto
6. area bounded on the E by Estero de Vitas, on the SW by C-2 Road, on the NW by Velasquez, and on
the NE by Osorio
7. area bounded on the SE by Varona, on the NW by Pitong Gatang, on the SW by Lacson, on the S by
Chesa, on the W by Quezon, on the NW by Liwayway, on the W by Garcia, and on the NE by
Harbosa (except the area covered by C-2/MXD Zone area bounded on the N by Bulacan, on the E by
Magsaysay, on the S by Dandan, and on the W by Garcia)
8. area bounded on the SE by Estero de Vitas, on the SW by Zamora, on the NW by Herbosa, on the
SW by Franco, on the NW by Concha/Nolasco, on the SE by Pavia, on the NE Sta. Maria, on the SW
by Perla, on the W by Varona, on the NE by Herbosa on the NW by Velasquez, and on the NE by
Inocencio (except the area covered by INS-G bounded on the SE by Dandan, on the SW by Sta.
Maria, and on the NW by Peñalosa/Sta. Maria)
9. area bounded on the SE by Corcuera/Estero dela Reina, on the NW by Pavia, and on the NE by J.
Luna
10. area bounded on the SE by a line parallel/extending from Arqueros, on the SW by Dist. 1/Dist. II
boundary on the NW by a line parallel/extending from Ricafort, and on the NE by Dagupan Ext.
11. area bounded on the E by Dama de Noche, on the SW by Lakandula, on the SE by Asuncion, on the
SW by C.M. Recto, on the W by Del Pan, on the S by Zaragosa, on the W by Kagitingan, and on the
N/NE by Tuazon
Distinct II
1. area bounded on the N by Manila-Kalookan boundary, and on the E/S/W by Estero de Maypajo
2. area bounded ion the N by Manila-Kalookan boundary, on the SW by J. Luna, on the NW by
Antipolo, and on the NE by Estero de Sunog Apog
3. area bounded on the SE by Avellana, on the SW by Dagupan, on the NW by Bualcan, and on the NE
by J. Luna
4. area bounded on the SE by Manila-Kalookan boundary, on the SW buy Rizal Avenue, on the NW by
Teodoro/Tabora/Estero de Maypajo and on the N/NW/NE by Manila-Kalookan boundary
5. area bounded on the SE by Laguna, on the SW by Estero de San Lazaro, on the S by Herrera, and on
the NE by J. Abad Santos
6. area bounded on the SE by a line parallel/extending from Arqueros, on the SW by A. Rivera, on the
NW by a line parallel/extending from La Torre, and on the NE by Dist. I Dist. II boundary
District III
1. area bounded on the SE by Chu Chin Road, on the E by L. Rivera, on the NW by Aurora Blvd., and
on the NE by Liat Su
2. area bounded on the N by Laguna, on the E by T. Mapua, on the S by S. Herrera, and on the W by
Dist II Dist. III boundary
District IV
1. area bounded on the SE by Manila-Quezon City boundary, on the SW by Piy Margal, on the NW by
Casañas, on the SW by Dapitan, on the NW by Ibarra, and on the NE by Simoun
2. area bounded on the SE by PNR Railway, on the SW by Lardizabal, on the SE by M. dela Fuente, on
the NW by a lien parallel/extending from San Jose II, on the NW by Loreto, on the NE by Tuazon,
on the NW by M. dela Fuente, and on the NE by España
3. area bounded on the SE by Matimyas/Blumentritt, on the SE by Sobriedad Ext., on the NW by
Antipolo, and on the NE by S. Loyola, (except the area covered by Legarda Elem. School)
4. area bounded on the SE Manila-Quezon City boundary, on the SW/NW by Blumentritt, and on the
NE by Matimyas
5. area bounded on the SE by Blumentritt, on the SW by Tuazon, on the NW by Antipolo, and on the
NE by Sobriedad (except the area bounded by Most Holy Trinity Parish Church/Holy Trinity
Academy)
6. area bounded on the SE by Manila-Quezon City boundary, on the S by Sociego, on the E by Santol,
on the S by one (1) block south of Escoda, on the W by one (1) block west of Santol, on the S by one
(10 block south of Tuazon, on the SE by Piña, on the S by Vigan, on the E by Santiago, on the NW by
PNR Railway, and on the NE by G. Tuazon (except the area occupied by a portion of Burgos Elem.
School)
District V
1. area occupied by an area in Baseco Compound (as indicated in the Zoning Map
2. area occupied by Engineering Island
3. area bounded on the SE by Estero de Pandacan, on the SW by Quirino Avenue, on the S by Plaza
Dilao, on the NW by Pres. Quirino Avenue, on the NE by the property line of Grayline Phils. Inc.
(except the area occupied by Plaza dela Virgen/M.A. Roxas High School)
4. area bounded on the SE by Estero de Pandacan, on the SW by Estero Tripa de Gallina/Pedro Gil, on
the E by Onyx, on the SW by Estero Tripa de Gallina, on the NW/NE by PNR Railway (except the
area occupied by Concordia College)
5. area bounded on the NE by Pedro Gil, on the SE by Pasig Line, on the SW buy F. Torres, and on the
NW/W by Onyx

6. area bounded on the SE by one (1) block northwest of Tejeron, on the SW by F. Torres, on the SE by
Pasig Line, on the SW by Estrada, on the NW by Onyx, and on the SW by A. Francisco
7. area bounded on the SE by Jimenez, on the SW by Franco, on the SE by Alabastro, on the NE by
road parallel/extending to Jade, on the SE by Topacio, on the SW by Estrada, on the NW by PNR
Railway, and on the NE by Estero Tripa de Gallina
8. area bounded on the SE by PNR Railway, on the SW by Estrada, on the SE by del Pilar, on the SW by
Don Pedro, on the SE by A. Aquino, on the SW by P. Ocampo, Sr., and on the NW by Diamante
9. area bounded on the NE by San Andres, on the SW by Diamante, on the S by Zapanta, on the NW by
Singalong, on the NE by Cong. A. Francisco, and on the NE by Linao.
District VI
1. area bounded on the SE/SW by Manila-Quezon City boundary/San Juan River, on the NW by PNR
Railway, and on the N/NE by R. Magsaysay Blvd. (except the area occupied by C-3/MXD area
bounded by R. Magsaysay and Santol Ext./area bounded by R. Magsaysay Baldovino, Hintoloro,
Road 2, Buenviaje, and V. Mapa)
2. area bounded on the SE by PNR Railway, on the SW by San Juan River, on the NE by Dalisay, on the
NW by Lubiran, and on the NE by Cordeleria
3. area bounded on the SE by San Juan River, on the SW by Manila-Mandaluyong
boundary/Panaderos, and on the NW/SW/NE by Pasig River
4. area bounded on the E/SW by Pres. Quirino Avenue, and on the NW/NE by Estero de Pandacan
5. area bounded on the SE/E by Estero de Pandacan, on the W by Pres. Quirino Avenue, and on the NE
by Pasig River
6. area bounded on the SE by Pasig River, on the SW by PNR Railway, on the NW/SW by Estero de
Pandacan,/PNR rail tracks, on the NW by Pres. Quirino Avenue, and on the NE by Estero de
Pandacan
7. area bounded on the N by Estero de Pandacan, on the SW by PNR rail tracks, and on the NW by
Estero de Pandacan
8. area bounded on the SW by Kahilum/Felix, on the NW by Pedro Gil, on the NW by Pedro Gil, on the
NE by Estero Tripa de Gallina, on the NW by Estero de Pandacan, and on the NE By Pres. Quirino
Avenue
9. area bounded on the SE by Estero de Pandacan, on the SW/SE by Pasig River, on the E by a line
parallel/extending form Vista on the south side, on the SW by Pedro Gil, on the NW by M. L.
Carreon, and on the NE by PNR Railway
10. area bounded on the SE/SW by Pasig River/Manila-Makati boundary on the NW by Tejeron, and on
the NE by Pedro Gil/New Panaderos."
Section 12 of Ordinance No. 8119 states the allowable uses of an R-3/MXD zone:

"Sec. 12. Use Regulations in [R-3/MXD]. - An R-3/MXD shall be used primarily for high-rise
housing/dwelling purposes and limited complementary/supplementary trade, services and business
activities. Enumerated below are the allowable uses:

xxx xxx xxx"

[88]
Rollo, pp. 742-744.

[89]
Memorandum of oil companies, p. 28.

[90]
Memorandum of respondent, p. 27.

[91]
Mecano v. Commission on Audit, G.R. No. 103982, 11 December 1992, 216 SCRA 500, 505, citation
omitted.

[92]
Delfino v. St. James Hospital, Inc., G.R. No. 166735, 5 September 2006, 501 SCRA 97, 112, citing
Mecano v. Commission on Audit, id., p. 506.

[93]
Id.

[94]
Tan v. Pereña, G.R. No. 149743, 18 February 2005, 452 SCRA 53, 68, citations omitted.

[95]
Id.

[96]
Supra note 91.

[97]
See Villegas, etc., et al. v. Subido, 148-B Phil. 668, 676 (1971), citations omitted.

[98]
Supra note 91 at 507.

[99]
See Section 9; rollo, p. 460.

[100]
Section 23.

[101]
[101] Section 12.

[102] Leynes v. Commission on Audit, G.R. No. 143596, 11 December 2003, 418 SCRA 180, 196.

[103] Supra note 97.

[104] Philippine National Oil Company v. Court of Appeals, G.R. No. 109976, 26 April 2005, 457 SCRA
32, 80, citing Ex Parte United States, 226 U. S., 420; 57 L. ed., 281; Ex Parte Crow Dog, 109 U. S., 556;
27 L. ed., 1030; Partee v. St. Louis & S. F. R. Co., 204 Fed. Rep., 970.

[105] Id., citing Crane v. Reeder and Reeder, 22 Mich., 322, 334; University of Utah vs. Richards, 77
Am. St. Rep., 928.

[106] Supra note 102, citing De Villa v. Court of Appeals, 195 SCRA 722 (1991).

[107] A special law is one which relates to particular persons or things of a class, or to a particular portion
or section of the state only; Leynes v. Commission on Audit, supra note 102, footnote no. 21, citing U.S.
v. Serapio, 23 Phil 584 [1912].

[108] A general law is one which affects all people of the state or all of a particular class of persons in the
state or embraces a class of subjects or places and does not omit any subject or place naturally belonging
to such class; id., footnote no. 22, citing U.S. v. Serapio, id; Valera v. Tuason, 80 Phil 823 (1948) and
Villegas v. Subido, supra note 97.

[109] G.R. No. 140847, 23 September 2005, 470 SCRA 609.

[110] Id., p. 623, citing R. AGPALO, STATUTORY CONSTRUCTION (2003), p. 411, in turn citing
Gaerlan v. Catubig, G.R. No. 23964, 1 June 1966, 17 SCRA 376.

[111] Memorandum, p. 39, citing Mama, Jr. v. Court of Appeals, G.R. No. 86517, 30 April 1991, 196
SCRA 489, 496.

[112] Suanes v. Chief Accountant of the Senate, 81 Phil. 877, 879 (1948), citing 55 C. J., S; sec. 130, p.
215; see also 34 Am. Jur., pp. 910-911; 95 A. L. R. 273, 277-278.

[113] Rule 65, Section 3 of the Rules of Court.

[114] Section 5 (1), Article VIII.

[115] City of Manila v. Laguio, Jr., supra note 70 at 326, citing Tatel v. Municipality of Virac, G.R. No.
40243, 11 March 1992, 207 SCRA 157, 161; Solicitor General v. Metropolitan Manila Authority, G.R. No.
102782, 11 December 1991, 204 SCRA 837, 845; Magtajas v. Pryce Properties Corp., Inc., G.R. No.
111097, 20 July 1994, 234 SCRA 255, 268-267.

[116] Metropolitan Manila Development Authority v. Viron Transportation Co., Inc., G.R. No. 170656,
15 August 2007, citing Binay v. Domingo, G.R. No. 92389, September 11, 1991, 201 SCRA 508, 514;
Presidential Commission on Good Government v. Peña, G.R. No. L-77663, April 12, 1988, 159 SCRA 556,
574; Rubi v. Provincial Board of Mindoro, 39 Phil. 660, 708.

[117] Id.
[118] Id., citing Pangasinan Transportation Co., Inc. v. The Public Service Commission, 70 Phil. 221,
229 (1940) and Eastern Shipping Lines, Inc. v. Philippine Overseas Employment Administration, G.R.
No. L-76633, October 18, 1988, 166 SCRA 533, 544.

[119] Roble Arrastre, Inc. v. Villaflor, G.R. No. 128509, 22 August 2006, 499 SCRA 434, 448.

[120] Article III, Section 18 (kk).

[121] Section 458 (a) (2) (viii).

[122] Lucena Grand Central Terminal, Inc. v. Jac Liner, Inc., G.R. No. 148339, 23 February 2005, 452
SCRA 174, 185, citing Department of Education, Culture and Sports v. San Diego, G.R. No. 89572, 21
December 1989, 180 SCRA 533, 537.

[123] Section 1 thereof.

[124] Rollo, pp. 982-985.

[125] Id., p. 1004.

[126] Id., p. 1006.

[127] Fabie v. City of Manila, 21 Phil. 486, 492 (1912).

[128] Didipio Earth-Savers' Multi-purpose Association, Incorporated (DESAMA) v. Gozun, G.R. No.
157882, 30 March 2006, 485 SCRA 586, 604.

[129] Patalinghug v. Court of Appeals, G.R. No. 104786, 27 January 1994, 229 SCRA 554, 559, citing
Sangalang v. Intermediate Court, G.R. Nos. 71169, 76394, 74376 and 82281, December 22, 1988, 168
SCRA 634; Ortigas & Co. Ltd. Partnership v. Feati Bank and Trust Co., No. L-24670, December 14,
1989, 94 SCRA 533.

[130] Balacuit v. Court of First Instance of Agusan del Norte and Butuan City, Branch II, G.R. No. L-
38429, 30 June 1988 163 SCRA 182, 191.

[131] Sta. Rosa Realty Development Corporation v. Court of Appeals, G.R. No. 112526, 12 October 2001,
367 SCRA 175, 193, citing PD 449, Section 4 (b).

[132] Tan Chat v. Municipality of Iloilo, 60 Phil. 465, 473 (1934).

[133] Supra note 72.

[134] Rollo, pp. 1010-1011.

[135] People v. Cruz, 54 Phil. 24, 28 (1929).

[136] Rollo, p. 300.

[137] Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform, G.R.
No. 78742, 14 July 1989, 343 SCRA 175, 370.

[138] Chief Justice Reynato S. Puno, "The Right to Property: Its Philosophical and Legal Bases," The
Court Systems Journal, vol. 10, no. 4, December 2005, p. 6.

[139] Telecommunications and Broadcast Attorneys of the Philippines, Inc. v. Comelec, 352 Phil. 153
(1998), Dissenting Opinion of J. Romero, citing Cooley, Thomas II Constitutional Limitations, 8th Ed., p.
1224 (1927). This is further reinforced by Section 6, Article XII of the Constitution: "The use of property
bears a social function xxxx"

[140] Didipio Earth-Savers' Multi-Purpose Association v. Gozun, supra note 128 at 605.

[141] Rollo, p. 305.

[142] Article III, Section 1 states:

Section 1. No person shall be deprived of life, liberty or property without due process of law, nor shall any
person be denied the equal protection of the laws.

[143] Government Service Insurance System v. Montesclaros, G.R. No. 146494, 14 July 2004, 434 SCRA
441, 452.

[144] Id., citations omitted.

[145] Entitled "An Act Creating the Department of Energy, Rationalizing the Organization and Functions
of Government Agencies Related to Energy, and for Other Purposes" approved on December 9, 1992.

[146] Entitled "An Act Deregulating the Downstream Oil Industry, and for Other Purposes" approved on
February 10, 1998.

[147] Section 1.

[148] Rollo, p. 1443.

[149] Id., p. 1444.

[150] Id., p. 1470.

[151] Id., p. 1480.

[152] Id., p. 730.

[153] Id., p. 1023.

[154] Supra note 115.

[155] Id., pp. 272-273, citation omitted.

[156] G.R. No. 149743, 18 February 2005, 452 SCRA 53.

[1 ]
[157] G.R. No. 138810, 29 September 2004, 439 SCRA 326.

[158] 416 Phil. 438 (2001).

[159] Supra note 115.

[160] Leynes v. Commission on Audit, supra note 102 at 199, citing Section 25, Article II and Section 2,
Article X of the Constitution.

[161] Province of Batangas v. Romulo, G.R. No. 152774, 27 May 2004, 429 SCRA 736, 772, citing San
Juan v. Civil Service Commission, G.R. No. 92299, 19 April 1991, 196 SCRA 69.

[162] National Liga ng mga Barangay v. Paredes, G.R. Nos. 130775 and 131939, 27 September 2004,
439 SCRA 130.

[163] Mondano v. Silvosa, 97 Phil. 143, 147-148 (1955).

[164] Taule v. Santos, G.R. No. 90336, 12 August 1991, 200 SCRA 512, 522, citing Hebron v. Reyes, 104
Phil. 175 (1958).

[165] Municipality of Malolos v. Libangang Malolos, Inc., G.R. No. L-78592, 11 August 1988, 164 SCRA
290, 298 citing Hee Acusar v. IAC, G.R. Nos. L-72969-70, 17 December 1986, 146 SCRA 294, 300.

[166] Pimentel, Jr. v. Aguirre, G.R. No. 132988, 19 July 2000, 336 SCRA 201, 215, citing Sec. 1, Art. VII,
1987 Constitution and Joaquin G. Bernas, SJ, The 1987 Constitution of the Republic of the Philippines: A
Commentary, 1996 ed., p. 739.

[167] See Dadole v. Commission on Audit, G.R. No. 125350, 3 December 2002, 393 SCRA 262, 271.

[168] Entitled "An Act Creating the [MMDA], Defining its Powers and Functions, Providing Funds
therefor and for Other Purposes."

[169] Entitled "Providing for the Preparation and Implementation of the Comprehensive Land Use Plans
of Local Government Units Pursuant to the Local Government Code of 1991 and Other Pertinent Laws"
issued on March 25, 1993.

[170] Figuerres v. Court of Appeals, 364 Phil. 683, 692-693 (1999); Reyes v. Court of Appeals, 378 Phil.
232, 239 (1999).

[171] Secretary of Justice v. Hon. Lantion, 379 Phil. 165, 201 (2000).

[172] Vda. de Genuino v. Court of Agrarian Relations, No. L-25035, 26 February 1968, 22 SCRA 792,
797.

[173] Report of Committee on Housing, Resettlement and Urban Development of the City of Manila's
Sangguniang Panlungsod recommending the approval of Ordinance No. 8027; rollo, pp. 985, 989.

[174] Even if this MOU was modified by the June 26, 2002 MOA; id., pp. 601-602.

[175] Id., p. 1109. See also footnote 35.

[ GR No. L-28100, Nov 29, 1971 ]

GABRIEL BAGUIO v. JALAGAT

DECISION
149 Phil. 436

FERNANDO, J.:
The specific legal question raised in this appeal from an order of dismissal by the Court of First Instance
of Misamis Oriental, presided by the Hon. Benjamin K. Gorospe, one which has not as yet been the
subject of a definitive ruling, is whether or not on a motion to dismiss on the ground of res judicata that
the cause of action is barred by a prior judgment, a lower court may take judicial notice of such previous
case decided by him resulting in the prior judgment relied upon. Judge Gorospe answered in the
affirmative. So do we. An affirmance is thus called for.
The case started with the complaint for the quieting of title to real property filed by plaintiff, now
appellant, Gabriel Baguio, on February 14, 1966. There was on March 7, 1966 a motion to dismiss filed
by defendants, now appellees, on the ground that the cause of action is barred by a prior judgment. This
was the argument advanced: "The instant complaint or case, besides being clearly unfounded and
malicious, is identical to or the same as that Civil Case No. 1574 filed by the same plaintiff and against
Melecio alias Mening Jalagat, now deceased and whose legal heirs and successors in interest are the very
defendants in the instant complaint or Civil Case No. 2639. Said Civil Case No. 1574 was filed on October
7, 1958 for 'Recovery of Possession and Ownership of Real Estate' and entitled Gabriel Baguio, plaintiff,
versus Melecio alias Mening Jalagat, defendant, involving practically the same property and practically
the same parties as defendants are the widow and the children, respectively, thus the legal or forced heirs
of the deceased Melecio Jalagat. That the said Case No. 1574, which is identical to or is the same case as
the instant one, has already been duly and finally terminated as could be clear from [an] order of this
Honorable Court [dated December 6, 1965]."[1] There was an opposition on the part of plaintiff made on
March 26, 1966 on the ground that for prior judgment or res judicata to suffice as a basis for dismissal it
must be apparent on the face of the complaint. It was then alleged that there was nothing in the
complaint from which such a conclusion may be inferred. Then, on September 26, 1966, came the order
complained of worded thus: "Acting on the motion to dismiss filed by counsel for the defendants under
date of March 4, 1966, anchored on the ground that plaintiff's cause of action is barred by a prior
judgment, which this Court finds to be well-founded as it has already dismissed plaintiff's complaint in
Civil Case No. 1574 against Melecio Jalagat alias Mening Jalagat, defendants' predecessor in interest
from whom they have derived their rights, in an order dated December 6, 1965, pursuant to Section 3 of
Rule 17 of the new Rules of Court, which case involved the same parcel of land as the one in the instant
case, as prayed for, Civil Case No. 2639 should be as it is hereby [dismissed]. The Court's previous
dismissal of Civil Case No. 1574 has the effect of an adjudication upon the merits and consequently is a
bar to and may be pleaded in abatement of any subsequent action against the same parties over the same
issues and the same subject-matter by the same plaintiff. [So ordered]."[2] Hence this appeal.
The order of dismissal, as noted at the outset, must be sustained. It is in accordance with law.
1. The sole error assigned is that a bar by prior judgment cannot be raised in a motion to dismiss when
such ground does not appear on the face of the complaint. What immediately calls attention in the rather
sketchy and inconclusive discussion in the six-page brief of appellant is that there was no denial as to the
truth of the statement made by Judge Gorospe that there was a previous dismissal of the same plaintiff's
complaint against the predecessor-in-interest of defendants, who as expressly admitted by appellant was
the deceased husband of one of them and father of the rest. There was no denial either of the property
involved being the same and of the finality of the decision in the previous case which would show that
appellant's claim was devoid of any support in law. It would be therefore futile for the court to continue
with the case as there had been such a prior judgment certainly binding on appellant. What then was
there for the lower court to do? Was there any sense in its being engaged in what was essentially a
fruitless endeavor as the outcome was predictable?
Certainly, the law would lend itself to a well-deserved reproach if the Rules of Court would sanction such
a proceeding distinguished by nothing but its futility. It ought to be clear even to appellant that under
the circumstances, the lower court certainly could take judicial notice of the finality of a judgment in a
case that was previously pending and thereafter decided by it. That was all that was done by the lower
court in decreeing the dismissal. Certainly such an order is not contrary to law. A citation from the
comments of former Chief Justice Moran is relevant. Thus: "Courts have also taken judicial notice of
previous cases to determine whether or not the case pending is a moot one or whether or not a previous
[3]
ruling is applicable in the case under consideration."
2. There is another equally compelling consideration. Appellant undoubtedly had recourse to a remedy
which under the law then in force could be availed of. It would have served the cause of justice better,
not to mention the avoidance of needless expense on his part and the vexation to which appellees were
subjected if he did reflect a little more on the matter. Then the valuable time of this Tribunal would not
have been frittered away on a useless and hopeless appeal. It has ever been the guiding principle from
Alonso v. Villamor,[4] a 1910 decision, that a litigant should not be allowed to worship at the altar of
technicality. That is not to dispense justice according to law. Parties, and much more so their counsel,
should ever keep such an imperative of our legal system in mind.[5]
WHEREFORE, the order of dismissal of September 26, 1966 is hereby affirmed. With costs against
plaintiff.
Concepcion, C.J., Makalintal, Zaldivar, Castro, Barredo, Villamor, and Makasiar, JJ., concur.
Reyes, J.B.L., J., concurs with J. Teehankee in his separate opinion.
Teehankee, J., concurs in a separate opinion.

[1] Record on Appeal, pp. 6-7.

[2]
Ibid, p. 13.
[3] 5 Moran, Comments on the Rules of Court, 1970 ed., p. 50.
[4]
16 Phil. 315.
[5] Cf. Aguinaldo v. Aguinaldo, L-30362, November 26, 1970, 36 SCRA 137, 141.
DIVISION

[ GR No. 85423, May 06, 1991 ]

JOSE TABUENA v. CA

DECISION
274 Phil. 51

CRUZ, J.:
The petitioner faults the decision of the trial court, as affirmed by the respondent court, for lack of basis.
It is argued that the lower courts should not have taken into account evidence not submitted by the
private respondent in accordance with the Rules of Court.

The subject of the dispute is a parcel of residential land consisting of about 440 square meters and
situated in Poblacion, Makato, Aklan. In 1973, an action for recovery of ownership thereof was filed in
the Regional Trial Court of Aklan by the estate of Alfredo Tabernilla against Jose Tabuena, the herein
petitioner. After trial, judgment was rendered in favor of the plaintiff and the defendant was required to
[1]
vacate the disputed lot.

As the trial court found, the lot was sold by Juan Peralta, Jr. sometime in 1926 to Alfredo Tabernilla
while the two were in the United States. Tabernilla returned to the Philippines in 1934, and Damasa
Timtiman, acting upon her son Juan's instruction, conveyed the subject land to Tabernilla. At the same
time, she requested that she be allowed to stay thereon as she had been living there all her life.
Tabernilla agreed provided she paid the realty taxes on the property, which she promised to do, and did.
She remained on the said land until her death, following which the petitioner, her son and half-brother of
Juan Peralta, Jr., took possession thereof. The complaint was filed when demand was made upon
Tabuena to surrender the property and he refused, claiming it as his own.

The trial court rejected his defense that he was the absolute owner of the lot, which he inherited from his
parents, who acquired it even before World War II and had been living thereon since then and until they
died. Also disbelieved was his contention that the subject of the sale between Peralta and Tabernilla was
a different piece of land planted to coconut trees and bounded on three sides by the Makato River.

Tabuena appealed to the respondent court, complaining that, in arriving at its factual findings, the trial
court motu proprio took cognizance of Exhibits "A", "B" and "C", which had been marked by the plaintiff
but never formally submitted in evidence. The trial court also erred when, to resolve the ownership of
the subject lot, it considered the proceedings in another case involving the same parties but a different
parcel of land.

The said exhibits are referred to in the pre-trial order as follows:

Plaintiff proceeded to mark the following exhibits: Exh. "A", letter dated October 4, 1921 addressed in
Makato, Capiz, Philippines; Exh. "A-1", paragraph 2 of the letter indicating that the amount of P600.00 -
the first P300.00 and then another P300.00 as interest since October 4, 1921; Exh. "A-2", is paragraph 3
of the letter; Exh. "B", a Spanish document; Exh. "C", deed of conveyance filed by Tomasa Timtiman and
Alfredo Tabernilla in 1923; and Exh. "C-1", paragraph 4 of Exh. "C".
In sustaining the trial court, the respondent court held that, contrary to the allegations of the appellant,
the said exhibits were in fact formally submitted in evidence as disclosed by the transcript of
stenographic notes, which it quoted at length.[2] The challenged decision also upheld the use by the trial
court of testimony given in an earlier case, to bolster its findings in the second case.

We have examined the record and find that the exhibits submitted were not the above-described
documents but Exhibits "X" and "Y" and their sub-markings, which were the last will and testament of
Alfredo Tabernilla and the order of probate. It is not at all denied that the list of exhibits does not include
Exhibits "A", "B" and "C". In fact, the trial court categorically declared that "Exhibits 'A', 'A-1', 'A-2', 'B',
'C', and 'C-1' were not among those documents or exhibits formally offered for admission by plaintiff-
administratrix." This is a clear contradiction of the finding of the appellate court, which seems to have
confused Exhibits "A", "B" and "C" with Exhibits "X" and "Y", the evidence mentioned in the quoted
transcript.

Rule 132 of the Rules of Court provides in Section 35 thereof as follows:

Sec. 35. Offer of evidence. - The court shall consider no evidence which has not been formally
offered. The purpose for which the evidence is offered must be specified.

The mere fact that a particular document is marked as an exhibit does not mean it has thereby already
been offered as part of the evidence of a party. It is true that Exhibits "A", "B" and "C" were marked at
the pre-trial of the case below, but this was only for the purpose of identifying them at that time. They
were not by such marking formally offered as exhibits. As we said in Interpacific Transit, Inc. v. Aviles,
[3] "At the trial on the merits, the party may decide to formally offer (the exhibits) if it believes they will
advance its cause, and then again it may decide not to do so at all. In the latter event, such documents
cannot be considered evidence, nor can they be given any evidentiary value."

Chief Justice Moran explained the rationale of the rule thus:

. . . The offer is necessary because it is the duty of a judge to rest his findings of facts and his
[4]
judgment only and strictly upon the evidence offered by the parties at the trial.

We did say in People v. Napat-a[5] that even if there be no formal offer of an exhibit, it may still be
admitted against the adverse party if, first, it has been duly identified by testimony duly recorded and,
second, it has itself been incorporated in the records of the case. But we do not find that these
requirements have been satisfied in the case before us. The trial court said the said exhibits could be
validly considered because, even if they had not been formally offered, one of the plaintiff's witnesses,
Cunegunda Hernandez, testified on them at the trial and was even cross-examined by the defendant's
counsel. We do not agree. Although she did testify, all she did was identify the documents. Nowhere in
her testimony can we find a recital of the contents of the exhibits.

Thus, her interrogation on Exhibit "A" ran:

ATTY.
What is this Exh. "A" about?
LEGASPI:

A: The translation of the letter.

What is the content of this Exh. "A", the letter of the sister of Juan Peralta to
Q:
Alfredo Tabernilla?

[6]
Court: The best evidence is the document. Proceed.

She also did not explain the contents of the other two exhibits.

The respondent court also held that the trial court committed no reversible error in taking judicial notice
of Tabuena's testimony in a case it had previously heard which was closely connected with the case before
it. It conceded that as a general rule "courts are not authorized to take judicial notice, in the adjudication
of cases pending before them, of the contents of the records of other cases, even when such cases have
been tried or are pending in the same court, and notwithstanding the fact that both cases may have been
heard or are actually pending before the same judge."[7] Nevertheless, it applied the exception that:
. . . in the absence of objection, and as a matter of convenience to all parties, a court may properly
treat all or any part of the original record of a case filed in its archives as read into the record of a
case pending before it, when, with the knowledge of the opposing party, reference is made to it for
that purpose, by name and number or in some other manner by which it is sufficiently designated;
or when the original record of the former case or any part of it, is actually withdrawn from the
archives by the court's direction, at the request or with the consent of the parties, and admitted as a
[8]
part of the record of the case then pending.

It is clear, though, that this exception is applicable only when, "in the absence of objection," "with the
knowledge of the opposing party," or "at the request or with the consent of the parties," the case is clearly
referred to or "the original or part of the records of the case are actually withdrawn from the archives"
and "admitted as part of the record of the case then pending." These conditions have not been
established here. On the contrary, the petitioner was completely unaware that his testimony in Civil Case
No. 1327 was being considered by the trial court in the case then pending before it. As the petitioner puts
it, the matter was never taken up at the trial and was "unfairly sprung" upon him, leaving him no
opportunity to counteract.

The respondent court said that even assuming that the trial court improperly took judicial notice of the
other case, striking off all reference thereto would not be fatal to the plaintiff's cause because "the said
testimony was merely corroborative of other evidences submitted by the plaintiff." What "other
evidences"? The trouble with this justification is that the exhibits it intends to corroborate, to wit,
Exhibits "A", "B" and "C", have themselves not been formally submitted.

Considering the resultant paucity of the evidence for the private respondent, we feel that the complaint
should have been dismissed by the trial court for failure of the plaintiff to substantiate its allegations. It
has failed to prove that the subject lot was the same parcel of land sold by Juan Peralta, Jr. to Alfredo
Tabernilla and not another property, as the petitioner contends. Even assuming it was the same lot,
there is no explanation for the sale thereof by Juan Peralta, Jr., who was only the son of Damasa
Timtiman. According to the trial court, "there is no question that before 1934 the land in question
belonged to Damasa Timtiman." Juan Peralta, Jr. could not have validly conveyed title to property that
did not belong to him unless he had appropriate authorization from the owner. No such authorization
has been presented.

It is true that tax declarations are not conclusive evidence of ownership, as we have held in many cases.
However, that rule is also not absolute and yields to the accepted and well-known exception. In the case
at bar, it is not even disputed that the petitioner and his predecessors-in-interest have possessed the
disputed property since even before World War II. In light of this uncontroverted fact, the tax
declarations in their name become weighty and compelling evidence of the petitioner's ownership. As
this Court has held:

While it is true that by themselves tax receipts and declarations of ownership for taxation purposes are
not incontrovertible evidence of ownership they become strong evidence of ownership acquired by
prescription when accompanied by proof of actual possession of the property.[9]

It is only where payment of taxes is accompanied by actual possession of the land covered by the tax
declaration that such circumstance may be material in supporting a claim of ownership.[10]

The tax receipts accompanied by actual and continuous possession of the subject parcels of land by the
respondents and their parents before them for more than 30 years qualify them to register title to the
said subject parcels of land.[11]

The Court can only wonder why, if Alfredo Tabernilla did purchase the property and magnanimously
allowed Damasa Timtiman to remain there, he did not at least require her to pay the realty taxes in his
name, not hers. The explanation given by the trial court is that he was not much concerned with the
property, being a bachelor and fond only of the three dogs he had bought from America. That is specious
reasoning. At best, it is pure conjecture. If he were really that unconcerned, it is curious that he should
have acquired the property in the first place, even as dacion en pago. He would have demanded another
form of payment if he did not have the intention at all of living on the land. On the other hand, if he were
really interested in the property, we do not see why he did not have it declared in his name when the
realty taxes thereon were paid by Damasa Timtiman or why he did not object when the payments were
made in her own name.

In comparison, all the acts of Damasa Timtiman and Jose Tabuena indicate that they were the owners of
the disputed property. Damasa Timtiman and her forebears had been in possession thereof for more
than fifty years and, indeed, she herself stayed there until she died.[12] She paid the realty taxes thereon
in her own name.[13] Jose Tabuena built a house of strong materials on the lot.[14] He even mortgaged
the land to the Development Bank of the Philippines and to two private persons who acknowledged him
as the owner.[15] These acts denote ownership and are not consistent with the private respondent's
claim that the petitioner was only an overseer with mere possessory rights tolerated by Tabernilla.

It is the policy of this Court to accord proper deference to the factual findings of the courts below and
even to regard them as conclusive where there is no showing that they have been reached arbitrarily. The
exception is where such findings do not conform to the evidence on record and appear indeed to have no
valid basis to sustain their correctness. As in this case.

The conclusions of the trial court were based mainly on Exhibits "A", "B" and "C", which had not been
formally offered as evidence and therefore should have been totally disregarded, conformably to the
Rules of Court. The trial court also erred when it relied on the evidence submitted in Civil Case No. 1327
and took judicial notice thereof without the consent or knowledge of the petitioner, in violation of
existing doctrine. Thus vitiated, the factual findings here challenged are as an edifice built upon shifting
sands and should not have been sustained by the respondent court.
Our own finding is that the private respondent, as plaintiff in the lower court, failed to prove his claim of
ownership over the disputed property with evidence properly cognizable under our adjudicative laws. By
contrast, there is substantial evidence supporting the petitioner's contrary contentions that should have
persuaded the trial judge to rule in his favor and dismiss the complaint.

WHEREFORE, the petition is GRANTED. The appealed decision is REVERSED and SET ASIDE, with
costs against the private respondent. It is so ordered.

Narvasa, (Chairman), Gancayco, Griño-Aquino, and Medialdea, JJ., concur.

[1] Rollo, pp. 59-72; decided by Judge Gerardo M.S. Pepito.

[2] Ibid., pp. 27-29; Gonzaga-Reyes, J., ponente, with Bellosillo and Marigomen, JJ., concurring.

[3] 186 SCRA 385.

[4] Moran, Comments on the Rules of Court, Vol. 6, 1970 Ed., p. 21.

[5] 179 SCRA 403.

[6] TSN, April 17, 1980, p. 32.

[7] Rollo, p. 25.

[8] U.S. v. Claveria, 29 Phil. 527.

[9] Republic v. Court of Appeals, 131 SCRA 533.

[10] Heirs of Celso Amarante v. Court of Appeals, 185 SCRA 585.

[11] Samson v. Court of Appeals, 141 SCRA 194.

[12] Rollo, p. 64.

[13] Exh. "7".

[14] Rollo, pp. 39-40.

[15] Exhs. "12", "13" and "14".

DIVISION

[ GR No. 96721, Mar 19, 1993 ]

OCCIDENTAL LAND TRANSPORTATION COMPANY v. CA

DECISION
G.R. No. 96721

NOCON, J.:
The legal question raised in this petition for review on certiorari of the decision of the Court of Appeals,
[1]
affirming in toto the decision of the Regional Trial Court of Zamboanga del Norte (Branch VI Dipolog
[2]
City), presided by the Hon. Daniel B. Bernaldez, is whether or not the trial court can take judicial
notice of the decision of another case involving a similar issue. The appellate and lower courts ruled in
the affirmative.

The case began with the collision of a Ford Fiera and a Carina Express No. C-24 passenger bus in
Bunawan, Calamba, Misamis Occidental on November 25, 1975 at about six o'clock a.m. As a result of
this, the Ford Fiera was thrown into the canal on the right side of the road. Its driver, Pacifico Carbajosa,
Sr. was pinned under the steering wheel, while the engine was burning, causing him to be seriously
burned and later die of such injuries. Trencio Almedilla, the owner of the Fiera which was registered
under Sevilla Line, and Alberto Pingkian were likewise in the Fiera and suffered various injuries as a
result of the incident. Neither the driver nor the passengers of the Carina Express No. C-24 stopped to
[3]
assist the victims, but rather the bus proceeded towards Sapang Dalaga.

The owner of the Carina passenger bus, Occidental Land Transportation Company filed a case for
damages against Sevilla Line and/or William Sevilla, the registered owner of the Ford Fiera, which case
was docketed as Civil Case No. 3156 before the Court of First Instance, Branch III, Oroquieta City.
Trencio Almedilla and Alberto Pingkian also filed a civil suit for damages against Occidental Land
Transportation Company, Inc. and the driver of the Carina bus, Edgardo Enerio. Later the heirs of
Pacifico Carbajosa filed a complaint-in-intervention. This case was docketed as Civil Case No. 2728
before the Regional Trial Court of Zamboanga del Norte, Branch VI, Dipolog City.

On July 30, 1977, Judge Rodolfo A. Ortiz of the Oroquieta court rendered a decision in Civil Case No.
[4]
3156 finding the driver of the Carina passenger bus and not the driver of the Ford Fiera, as negligent.

On March 11, 1986, more than ten years after the inception of the case, Judge Daniel B. Bernaldez
rendered the decision in Civil Case No. 2728 against Occidental Land Transportation Company, Inc. and
[5]
Edgardo Enerio. The dispositive portion reads:
"ACCORDINGLY, and in view of all the foregoing, the Court hereby renders judgment as follows:

1. Ordering the defendants, Occidental Land Transportation Company and Edgardo Enerio, to pay
to the plaintiffs, Trencio Almedilla and Alberto Pingkian, the following:
For Plaintiff Almedilla:

(a) P 9,473.80 for the repair of the damaged Ford Fiera;

(b) P400.00 for hospitalization;
(c) P100.00 daily for the income of the Ford Fiera starting from November 25, 1975 to March
10, 1986;
(d) P5,000.00 for moral damages

For Plaintiff Pingkian:

(e) P5,000.00 for moral damages;

(f) P100.00 for loss of income;
(g) P100.00 for incidental expenses; and
(h) P1,000.00 for attorney's fees.

2. Ordering the defendants aforenamed to pay to the intervenors Carbajosas the following:
(a) P6,000.00 for hospitalization;
(b) P3,000.00 for embalming, funeral services and last prayers;
(c) P5,000.00 for moral damages;
(d) P5,000.00 for attorney's fees; and
(e) P500.00 for actual and incidental expenses.

3. Dismissing the complaint-in-intervention insofar as it concerns plaintiffs Trencio Almedilla

and Alberto Pingkian.

4. Denying the reliefs prayed for in the answer to the complaint-in-intervention of plaintiffs
Trencio Almedilla and Alberto Pingkian;

5. Denying the reliefs prayed for in the answer to the complaint-in-intervention of the
aforenamed defendants;

6. Dismissing the counterclaim of the defendants aforenamed for lack of merit; and

7. Ordering the defendants aforenamed to pay the costs.

[6]
SO ORDERED."

The facts of the case were "adopted by reference" from the decision of the then Court of First Instance,
Branch III of Oroquieta City in Civil Case No. 3156.[7]

It reads as follows:
"That at about 4:50 o'clock in the morning of November 25, 1975, Trencio Almedilla, who was the
real owner of the Ford Fiera, but attached to the Sevilla Lines of defendant William Sevilla, left for
Ozamis City, on board his Ford Fiera, to buy textiles, together with Alberto Pingkian who wanted to
visit his aunt at Ozamis City. Reaching Dipolog City, Trencio Almedilla, came upon Pacifico
Carbajosa who wants (sic) to load fish in the Ford Fiera for Ozamis City. As it was an opportune
occasion, Trencio agreed to load the fish of Pacifico for a freight of P130.00. So they loaded the fish
of Pacifico at Miputak, then got gasoline at a Caltex Station and proceeded towards Ozamis City.
Trencio, was driving his Ford Fiera, was running slowly as Pacifico alias "Balodoy" told him not to
go fast so that his fish will not get destroyed. After passing Sapang Dalaga, at Misamis occidental,
Trencio developed stomach ache. At this, "Balodoy" requested that Trencio allow him to drive the
Ford Fiera as he was an experienced driver. Trencio agreed. And so, with "Balodoy" on the wheels of
the Ford Fiera, they proceeded slowly for fear that the fish will get damaged. Reaching Bunawan, at
Calamba, and while negotiating a curb at the descending portion of the asphalted national highway,
which was wet, as it was raining, a Carina passenger bus was running fast in an ascent, zigzagging
towards them. Because of this, the Ford Fiera went towards the extreme right of the road with its
right front and rear tires already running at (sic) the ground shoulder, but even as the Ford Fiera
tried to avoid the zigzagging Carina Express No. C-24, the said Carina bus jerked towards the left,
hitting, as a result, the Ford Fiera at the left fender and hood, throwing it to the canal at the right
side, with engine burning. The Carina passenger bus continued to swerve towards the left until it
turn about, facing towards the direction of Ozamis City. Balodoy was pinned by the steering wheel
to his driver's seat and was seriously injured, Pingkian and Trencio were also injured, but they were
well enough to try to help to extricate Balodoy, not until Genito Compania got a piece of wood from
his house nearby, which he used as a lever to pry out Balodoy. The driver of the Carina passenger
bus, which had three (3) passengers, at that time, did not help Balodoy. Instead it proceeded
towards Sapang Dalaga.

The accident was reported to the police authorities of Calamba, as a result of which Acting Station
Commander Arceno of Calamba Police Station, Police District No. II, made a Police Report dated
November 25, 1975 as follows:

'POLICE REPORT

At about 0645 Hrs More or less 25, Nov. Sevilla Line bearing plate No. 8-B940 which was driven by
Pacifico Carbajosa y Gemillan, 40 years old, married and a resident of 398 Martines St., Dipolog
City, said driver was burned and injured seriously when on the way at Bunawan this Municipality,
due to a bumping incident.

Bus line marked Carina bearing Plate No. 939 driven by Edgardo Enerio y Paglinawan of Sapang
Dalaga, Misamis Occidental. Hit and run and surrendered to Sapang Dalaga office of the Station
Commander.

The driver of Sevilla Line with his two companions were rushed to the Calamba Community
[8]
Hospital for treatment. The scene of the incident was investigated by F/Sgt. Pagalaran, Sr.'"

Petitioners Occidental Land Transportation Company Inc. and Edgardo Enerio appealed from the above-
quoted decision to the Court of Appeals.[9] They assigned the following errors:
"I

THAT THE TRIAL COURT ERRED IN DECIDING THE CASE BASED ON A DECISION
RENDERED IN ANOTHER CASE.

II

THAT THE TRIAL COURT ERRED IN NOT HOLDING THAT THE FORD FIERA WAS
EXCLUSIVELY RESPONSIBLE FOR THE ACCIDENT.

III

THAT THE TRIAL COURT ERRED IN NOT HOLDING THAT THE FORD FIERA DID NOT
[10]
BELONG TO THE PLAINTIFF TRENCIO ALMEDILLA."

The Court of Appeals affirmed the decision in toto and disposed of the errors assigned in the following
manner:
"Anent the first assigned error, such step of the trial court in taking judicial notice of Civil Case No.
315(6) is sanctioned under Rule 129, Sec. 1 of the Revised Rules of Court. Thus, as aptly put by Chief
Justice Moran "Courts have also taken judicial notice of previous cases to determine whether or not
the case pending is a moot one or whether or not a previous ruling is applicable in the case under
consideration (5 Moran, Comments on the Rules of Court, 1970, ed., p. 50).

Hence, considering the previous decision in Civil Case No. 315(6) involving the same vehicular
accident had already put to rest the issue as to the negligence of defendants, the court properly took
cognizance of said decision as a matter of convenience, as these facts are capable of unquestionable
demonstration (Baguio vs. De Jalagat 42 SCRA 337).

As to the liability of the defendants in the vehicular mishap, We concur with the finding of the trial
court in Civil Case No. 315(6) which held inter alia:

'Moreover, it does not seem possible, as claimed by plaintiff's own witness, Crisanto Andus, that
while negotiating the curb, and while starting to descend, the Ford Fiera slid towards the Carina
Express No. C-24, hitting its left rear as a consequence. For the Ford Fiera was admittedly loaded
with fish and that consequently, because of the weight of its cargo, in relation to its capacity, it will
have more traction even in a slippery wet asphalted road; and, as such, the probability of its sliding
towards the extreme left side of the road is improbable, if not remote. Not so in the case of Carina
Express No. C-24, which had only three (3) passengers at that time, or even fifteen (15) passengers,
as claimed by the plaintiff. For with this load, the said bus was undoubtedly travelling without much
traction, since its passenger load was not enough to give it stability while running, considering its
size and body weight; and that, therefore, it must have been, as described by defendant's witnesses,
that Carina Express No. C-24, was running fast in a zigzagging manner along the slippery wet
asphalted national highway causing its left rear to jerk towards the left, with the driver losing
control, sideswiping the Ford Fiera in the process, and then continuing its swerving towards the left
until it turned about facing Ozamis City.'

Correlatively, it is well-settled that the conclusions of facts of the trial court are entitled to great
respect and shall not be generally disturbed on appeal, because it is in a better position than the
appellate tribunal to examine the evidence directly and to observe the demeanor of the witness
[11]
while testifying (Hermo vs. Court of Appeals. 155 SCRA 24)."

Hence this petition.

The errors assigned by the petitioners are almost identical to those raised before the appellate court.
They claim that it was error for the respondent court to "uphold the decision of the trial court based on
the judgement rendered in another case," and "uphold the grant of damages for the Ford Fiera when the
same did not belong to Trencio Almedilla."[12]

The petition is devoid of merit.

No error was committed by the respondent court when it upheld the findings of the trial court in Civil
Case No. 2728.

The reasons advanced by the respondent court in taking judicial notice of Civil Case No. 3156 are valid
and not contrary to law. As a general rule, "courts are not authorized to take judicial notice, in the
adjudication of cases pending before them, of the contents of the records of other cases, even when such
cases have been tried or are pending in the same court, and notwithstanding the fact that both cases may
have been heard or are actually pending before the same judge." The general rule admits of exceptions as
enumerated in Tabuena v. Court of Appeals,[13] the Court, citing U.S. v. Claveria,[14] which We quote:
"'xxx in the absence of objection, and as a matter of convenience to all parties, a court may properly
treat all or any part of the original record of a case filed in its archives as read into the record of a
case pending before it, when, with the knowledge of the opposing party, reference is made to it for
that purpose, by name and number or in some other manner by which it is sufficiently designated;
or when the original record of the former case or any part of it, is actually withdrawn from the
archives by the court's direction, at the request or with the consent of the parties, and admitted as a
part of the record of the case then pending.'

It is clear, though, that this exception is applicable only when, 'in the absence of objection,' 'with the
knowledge of the opposing party,' or 'at the request or with the consent of the parties,' the case is
clearly referred to or 'the original or part of the records of the case are actually withdrawn from
the archives' and 'admitted as part of the record of the case then pending.' (Italics supplied)

The Court in Tabuena ruled that the conditions necessary for the exception to be applicable were not
established, such as that "xxx, (t)he petitioner was completely unaware that his testimony in Civil Case
No. 1327 was being considered by the trial court in the case then pending before it. As the petitioner puts
it, the matter was never taken up at the trial and was 'unfairly sprung' upon him, leaving him no
opportunity to counteract."[15]

The same is not true in the instant case. Civil Case No. 3156, which the lower court in Civil Case No. 2728
took judicial notice of, decided the issue of negligence between the driver of the two vehicles involved in
the subject collision. It was therefore a matter of convenience, to consider the decision rendered in that
case.

And unlike the factual situation in Tabuena v. CA, the decision in Civil Case No. 3156 formed part of the
records of the instant case (Civil Case No. 2728) with the knowledge of the parties and in the absence of
their objection. This fact was pointed out by the lower court, to wit:
"The xxx findings of the Oroquieta Court became as conclusive upon the company and its driver by
their acquiescence and silence. xxx. (Decision of lower court, p. 12; records p. 239)

xxx.

Returning to Exhibit "O," supra (Decision, Civil Case No. 3156, CFI, Branch III, Oroquieta City), the
Court hastens to add: Said exhibit has not been objected to nor commented upon by the defendants
[16]
Company and Enerio, through their counsel, xxx."

This being the case, petitioners were aware that Exhibit "O" (Decision in Civil Case No. 3156) had formed
part of the records of the case and would thereby be considered by the trial court in its decision.

Furthermore, upon perusal of Exhibit "O," and the decision of the lower court in the instant case, there is
no showing of any irregularity but rather a logical discussion of the case and the evidence presented
before the court. The lower court did not merely "adopt by reference" the findings of fact of the Oroquieta
court, but used it in its discourse to obtain the conclusions pronounced in its decision.

Petitioner alleges that the Ford Fiera did not belong to Trencio Almedilla, but to its registered owner --
Sevilla Lines, and therefore the grant of damages for, its repair was improperly awarded to private
respondent Almedilla. This factual matter has already been decided upon in the trial court.

The fact that the Fiera was owned by Almedilla though registered with Sevilla Line, will not alter the
conclusion arrived at by the lower court. The party who stands to benefit or suffer from the decision is
admittedly private respondent Almedilla and not Sevilla Lines. William Sevilla admitted that the real
owner of the vehicle was Trencio Almedilla, in the case for damages by Occidental Land Transportation
against Sevilla Lines and/or William Sevilla.[17] Having thus been settled in the lower court, petitioner is
now no longer in any position to question the ownership of the Fiera or the award of damages to private
respondent Almedilla.

WHEREFORE, finding no error in the decision of the Court of Appeals dated September 28, 1990 (CA-
G.R. CV No. 10176) affirming the decision of the trial court dated March 11, 1986, the petition for review
is denied for lack of merit with costs against the petitioners.
SO ORDERED.

Narvasa, C.J., (Chairman), Padilla, Regalado, and Campos, Jr., JJ., concur.

[1] Trencio Almedilla, Pacifico Carbajosa and Alberto Pingkian, represented by his natural guardian
Domingo Pingkian, vs. Occidental Land Transportation Company, Inc. and Edgardo Enerio; Heirs of
Pacifico Carbajosa, Sr. and Accredited Underwriters Agencies, Inc., Intervenors; C.A.-G.R. CV No. 10176;
September 28, 1990; Rollo, p. 15. Penned by Justice Manuel C. Herrera with the concurrence of Justice
Eduardo R. Bengzon and Justice Jainal D. Rasul.

[2] Civil Case No. 2728, March 11, 1986; Records, p. 228.

[3] Petition, pp. 1-3; Rollo, 7-9. Comment, pp. 3-5; Rollo, pp. 33-36.

[4] Exhibit "O," Records, p. 269.

[5] Records, p. 228.

[6] Id., pp. 17-19; Records, pp. 244-247.

[7] Occidental Land Transportation Company, Inc. v. Sevilla Lines and/or William Sevilla; Exhibit "O"
for Intervenors-Heirs of Carbajosa; Decision of the lower court, p. 7; Records, p. 234.

[8] Id., pp. 5-7; Records, pp. 273-275.

[9] Supra, note 1.

[10] Decision of the Court of Appeals, pp. 5-6; Rollo, pp. 19-20.

[11] Id., pp. 6-7; Rollo, pp. 20-21.

[12] Petition, p. 4; Rollo, p. 10.

[13] 196 SCRA 656 (1991).

[14]
[14] 29 PHIL 527 (1915).

[15] 196 SCRA 656.

[16] Decision of the Lower Court, pp. 15-16; Records, pp. 242-243.

[17] Decision in Civil Case No. 3156, p. 7; Exhibit "O," Records, p.. 275.
DIVISION

[ GR No. 122480, Apr 12, 2000 ]

BPI-FAMILY SAVINGS BANK v. CA

DECISION
386 Phil. 719

PANGANIBAN, J.:
If the State expects its taxpayers to observe fairness and honesty in paying their taxes, so must it apply
the same standard against itself in refunding excess payments. When it is undisputed that a taxpayer is
entitled to a refund, the State should not invoke technicalities to keep money not belonging to it. No one,
not even the State, should enrich oneself at the expense of another.

The Case

[1]
Before us is a Petition for Review assailing the March 31, 1995 Decision of the Court of Appeals (CA) in
[2]
CA-GR SP No. 34240, which affirmed the December 24, 1993 Decision of the Court of Tax Appeals
(CTA). The CA disposed as follows:
"WHEREFORE, foregoing premises considered, the petition is hereby DISMISSED for lack of
merit."[3]

On the other hand, the dispositive portion of the CTA Decision affirmed by the CA reads as follows:
"WHEREFORE, in [view of] all the foregoing, Petitioner's claim for refund is hereby

DENIED and this Petition for Review is DISMISSED for lack of merit."[4]

[5]
Also assailed is the November 8, 1995 CA Resolution denying reconsideration.

The Facts

The facts of this case were summarized by the CA in this wise:

"This case involves a claim for tax refund in the amount of P112,491.00 representing petitioner's tax
withheld for the year 1989.

In its Corporate Annual Income Tax Return for the year 1989, the following items are reflected:

Income P1,017,931,831.00
Deductions P1,026,218,791.00
Net Income
(P8,286,960.00)
(Loss)
Taxable
P8,286,960.00
Income (Loss)
Less:
1988 Tax
P185,001.00
Credit
1989 Tax
P112,491.00
Credit
TOTAL
P297,492.00
AMOUNT
REFUNDABLE

"It appears from the foregoing 1989 Income Tax Return that petitioner had a total refundable
amount of P297,492 inclusive of the P112,491.00 being claimed as tax refund in the present case.
However, petitioner declared in the same 1989 Income Tax Return that the said total refundable
amount of P297,492.00 will be applied as tax credit to the succeeding taxable year.

"On October 11, 1990, petitioner filed a written claim for refund in the amount of P112,491.00 with
the respondent Commissioner of Internal Revenue alleging that it did not apply the 1989 refundable
amount of P297,492.00 (including P112,491.00) to its 1990 Annual Income Tax Return or other tax
liabilities due to the alleged business losses it incurred for the same year.

"Without waiting for respondent Commissioner of Internal Revenue to act on the claim for refund,
petitioner filed a petition for review with respondent Court of Tax Appeals, seeking the refund of the
amount of P112,491.00.

"The respondent Court of Tax Appeals dismissed petitioner's petition on the ground that petitioner
failed to present as evidence its Corporate Annual Income Tax Return for 1990 to establish the fact
that petitioner had not yet credited the amount of P297,492.00 (inclusive of the amount
P112,491.00 which is the subject of the present controversy) to its 1990 income tax liability.

"Petitioner filed a motion for reconsideration, however, the same was denied by respondent court in
[6]
its Resolution dated May 6, 1994."

As earlier noted, the CA affirmed the CTA. Hence, this Petition.[7]

Ruling of the Court of Appeals

In affirming the CTA, the Court of Appeals ruled as follows:

"It is incumbent upon the petitioner to show proof that it has not credited to its 1990 Annual income
Tax Return, the amount of P297,492.00 (including P112,491.00), so as to refute its previous
declaration in the 1989 Income Tax Return that the said amount will be applied as a tax credit in the
succeeding year of 1990. Having failed to submit such requirement, there is no basis to grant the
claim for refund. x x x

"Tax refunds are in the nature of tax exemptions. As such, they are regarded as in derogation of
sovereign authority and to be construed strictissimi juris against the person or entity claiming the
exemption. In other words, the burden of proof rests upon the taxpayer to establish by sufficient
[8]
and competent evidence its entitlement to the claim for refund."

Issue

In their Memorandum, respondents identify the issue in this wise:

"The sole issue to be resolved is whether or not petitioner is entitled to the refund of P112,491.00,
[9]
representing excess creditable withholding tax paid for the taxable year 1989."

The Court's Ruling

The Petition is meritorious.

Main Issue:
Petitioner Entitled to Refund

It is undisputed that petitioner had excess withholding taxes for the year 1989 and was thus entitled to a
refund amounting to P112,491. Pursuant to Section 69[10] of the 1986 Tax Code which states that a
corporation entitled to a refund may opt either (1) to obtain such refund or (2) to credit said amount for
the succeeding taxable year, petitioner indicated in its 1989 Income Tax Return that it would apply the
said amount as a tax credit for the succeeding taxable year, 1990. Subsequently, petitioner informed the
Bureau of Internal Revenue (BIR) that it would claim the amount as a tax refund, instead of applying it as
a tax credit. When no action from the BIR was forthcoming, petitioner filed its claim with the Court of
Tax Appeals.

The CTA and the CA, however, denied the claim for tax refund. Since petitioner declared in its 1989
Income Tax Return that it would apply the excess withholding tax as a tax credit for the following year,
the Tax Court held that petitioner was presumed to have done so. The CTA and the CA ruled that
petitioner failed to overcome this presumption because it did not present its 1990 Return, which would
have shown that the amount in dispute was not applied as a tax credit. Hence, the CA concluded that
petitioner was not entitled to a tax refund.

We disagree with the Court of Appeals. As a rule, the factual findings of the appellate court are binding
on this Court. This rule, however, does not apply where, inter alia, the judgment is premised on a
misapprehension of facts, or when the appellate court failed to notice certain relevant facts which if
considered would justify a different conclusion.[11] This case is one such exception.

In the first place, petitioner presented evidence to prove its claim that it did not apply the amount as a tax
credit. During the trial before the CTA, Ms. Yolanda Esmundo, the manager of petitioner's accounting
department, testified to this fact. It likewise presented its claim for refund and a certification issued by
Mr. Gil Lopez, petitioner's vice-president, stating that the amount of P112,491 "has not been and/or will
not be automatically credited/offset against any succeeding quarters' income tax liabilities for the rest of
the calendar year ending December 31, 1990." Also presented were the quarterly returns for the first two
quarters of 1990.

The Bureau of Internal Revenue, for its part, failed to controvert petitioner's claim. In fact, it presented
no evidence at all. Because it ought to know the tax records of all taxpayers, the CIR could have easily
disproved petitioner's claim. To repeat, it did not do so.

More important, a copy of the Final Adjustment Return for 1990 was attached to petitioner's Motion for
Reconsideration filed before the CTA.[12] A final adjustment return shows whether a corporation
incurred a loss or gained a profit during the taxable year. In this case, that Return clearly showed that
petitioner incurred P52,480,173 as net loss in 1990. Clearly, it could not have applied the amount in
dispute as a tax credit.

Again, the BIR did not controvert the veracity of the said return. It did not even file an opposition to
petitioner's Motion and the 1990 Final Adjustment Return attached thereto. In denying the Motion for
Reconsideration, however, the CTA ignored the said Return. In the same vein, the CA did not pass upon
that significant document.

True, strict procedural rules generally frown upon the submission of the Return after the trial. The law
creating the Court of Tax Appeals, however, specifically provides that proceedings before it "shall not be
governed strictly by the technical rules of evidence."[13] The paramount consideration remains the
ascertainment of truth. Verily, the quest for orderly presentation of issues is not an absolute. It should
not bar courts from considering undisputed facts to arrive at a just determination of a controversy.

In the present case, the Return attached to the Motion for Reconsideration clearly showed that petitioner
suffered a net loss in 1990. Contrary to the holding of the CA and the CTA, petitioner could not have
applied the amount as a tax credit. In failing to consider the said Return, as well as the other
documentary evidence presented during the trial, the appellate court committed a reversible error.

It should be stressed that the rationale of the rules of procedure is to secure a just determination of every
action. They are tools designed to facilitate the attainment of justice.[14] But there can be no just
determination of the present action if we ignore, on grounds of strict technicality, the Return submitted
before the CTA and even before this Court.[15] To repeat, the undisputed fact is that petitioner suffered a
net loss in 1990; accordingly, it incurred no tax liability to which the tax credit could be applied.
Consequently, there is no reason for the BIR and this Court to withhold the tax refund which rightfully
belongs to the petitioner.

Public respondents maintain that what was attached to petitioner's Motion for Reconsideration was not
the final adjustment Return, but petitioner's first two quarterly returns for 1990.[16] This allegation is
wrong. An examination of the records shows that the 1990 Final Adjustment Return was attached to the
Motion for Reconsideration. On the other hand, the two quarterly returns for 1990 mentioned by
respondent were in fact attached to the Petition for Review filed before the CTA. Indeed, to rebut
respondents' specific contention, petitioner submitted before us its Surrejoinder, to which was attached
the Motion for Reconsideration and Exhibit "A" thereof, the Final Adjustment Return for 1990.[17]

CTA Case No. 4897

Petitioner also calls the attention of this Court, as it had done before the CTA, to a Decision rendered by
the Tax Court in CTA Case No. 4897, involving its claim for refund for the year 1990. In that case, the Tax
[18]
Court held that "petitioner suffered a net loss for the taxable year 1990 x x x."[18] Respondent, however,
urges this Court not to take judicial notice of the said case.[19]

As a rule, "courts are not authorized to take judicial notice of the contents of the records of other cases,
even when such cases have been tried or are pending in the same court, and notwithstanding the fact that
both cases may have been heard or are actually pending before the same judge."[20]

Be that as it may, Section 2, Rule 129 provides that courts may take judicial notice of matters ought to be
known to judges because of their judicial functions. In this case, the Court notes that a copy of the
Decision in CTA Case No. 4897 was attached to the Petition for Review filed before this Court.
Significantly, respondents do not claim at all that the said Decision was fraudulent or nonexistent.
Indeed, they do not even dispute the contents of the said Decision, claiming merely that the Court cannot
take judicial notice thereof.

To our mind, respondents' reasoning underscores the weakness of their case. For if they had really
believed that petitioner is not entitled to a tax refund, they could have easily proved that it did not suffer
any loss in 1990. Indeed, it is noteworthy that respondents opted not to assail the fact appearing therein -
- that petitioner suffered a net loss in 1990 in the same way that it refused to controvert the same fact
established by petitioner's other documentary exhibits.

In any event, the Decision in CTA Case No. 4897 is not the sole basis of petitioner's case. It is merely one
more bit of information showing the stark truth: petitioner did not use its 1989 refund to pay its taxes for
1990.

Finally, respondents argue that tax refunds are in the nature of tax exemptions and are to be construed
strictissimi juris against the claimant. Under the facts of this case, we hold that petitioner has established
its claim. Petitioner may have failed to strictly comply with the rules of procedure; it may have even been
negligent. These circumstances, however, should not compel the Court to disregard this cold, undisputed
fact: that petitioner suffered a net loss in 1990, and that it could not have applied the amount claimed as
tax credits.

Substantial justice, equity and fair play are on the side of petitioner. Technicalities and legalisms,
however exalted, should not be misused by the government to keep money not belonging to it and
thereby enrich itself at the expense of its law-abiding citizens. If the State expects its taxpayers to observe
fairness and honesty in paying their taxes, so must it apply the same standard against itself in refunding
excess payments of such taxes. Indeed, the State must lead by its own example of honor, dignity and
uprightness.

WHEREFORE, the Petition is hereby GRANTED and the assailed Decision and Resolution of the Court of
Appeals REVERSED and SET ASIDE. The Commissioner of Internal Revenue is ordered to refund to
petitioner the amount of P112,491 as excess creditable taxes paid in 1989. No costs.

SO ORDERED.

Melo, (Chairman), Purisima, and Gonzaga-Reyes, JJ., concur.

Vitug, J., abroad, on official business.

[1]
[1] Fourth Division, composed of JJ. Quirino D. Abad Santos Jr. (ponente), Gloria C. Paras (chairman)
and Delilah Vidallon-Magtolis (member)
[2] Written by Associate Judge Ramon O. De Veyra, with the concurrence of Presiding Judge Ernesto A.
Acosta and Associate Judge Manuel K. Gruba. The case was docketed as CTA Case No. 4694.
[3] Rollo, p. 30.
[4] Rollo, p. 38.
[5] Rollo, p. 32.
[6] Rollo, pp. 27-28.
[7] The case was deemed submitted for resolution on October 18, 1999, upon receipt by this Court of
respondents' Memorandum, which was signed by Assistant Solicitor General Mariano M. Martinez and
Associate Solicitor Olivia V. Non. Petitioner's Memorandum, which was signed by Atty. Sabino B. Padilla
IV of the Padilla Law Office, was received earlier on August 19, 1999. This case, however, was assigned to
the undersigned ponente for the writing of the Court's Decision during the deliberations of the Court on
April 5, 2000 when his erstwhile Dissent was voted as the majority opinion. Subsequently, the original
ponente changed his mind and now agrees with this Decision.
[8] Rollo, p. 29.
[9] Respondents' Memorandum, p. 5.
[10] "Section 69. Final Adjustment Return. - Every corporation liable to tax under Section 24 shall file a
final adjustment return covering the total taxable income for the preceding calendar or fiscal year. If the
sum of the quarterly tax payments made during the said taxable year is not equal to the total due on the
entire taxable net income of that year the corporation shall either:
(a) Pay the excess tax still due; or
(b) Be refunded the excess amount paid, as the case may be.

In case the corporation is entitled to a refund of the excess estimated quarterly income taxes paid, the
refundable amount shown on its final adjustment return may be credited against the estimated quarterly
income tax liabilities for the taxable quarters of the succeeding taxable year."
[11] National Steel Corporation v. CA, 283 SCRA 45, December 12, 1997; Fuentes Jr. v. Court of Appeals,
253 SCRA 430, 435, February 9, 1996.
[12] Exhibit "A," Motion for Reconsideration filed before the CTA. This was attached to Petitioner's
Surrejoinder (Rollo, p. 160)
[13] Section 8, Republic Act No. 1125.
[14] See De Guzman v. Sandiganbayan, 256 SCRA 171, April 11, 1996.
[15] See Annex "A," Petitioner's Surrejoinder; rollo, p. 160.
[16] Respondent's Memorandum, p. 7.
[17] Rollo, p. 160.
[18] Decision in CTA Case No. 4897, p. 7; rollo, p. 59.
[19] Respondents' Memorandum, pp. 9-10.
[20] Tabuena v. CA, 196 SCRA 650, May 6, 1991, per Cruz, J.
DIVISION

[ GR No. 123539, Jun 26, 2000 ]

PEOPLE v. MARIANO AUSTRIA

DECISION
389 Phil. 737

BUENA, J.:
Charged with, tried, and convicted for the crime of rape, accused-appellant Mariano Austria--82 years
old at the time of the commission of the offense--now comes before us to assail the decision, dated 31
October 1995, of the Regional Trial Court of Lingayen, Pangasinan, Branch 38, in Criminal Case No. L-
5239, adjudging him guilty beyond reasonable doubt of rape and sentencing him to suffer the penalty of
reclusion perpetua and to indemnify the victim P50,000.00 as moral damages plus cost of the
proceedings.

[1]
The information , dated 15 January 1995, charged octogenarian accused-appellant Mariano Austria
with the rape of minor Prescila de Vera, as follows:
" That on or about the 22nd day of November 1994 at 12:00 o' clock noon (sic) in Barangay San
Jose, Municipality of Aguilar, Province of Pangasinan, Philippines and within the jurisdiction of this
honorable court, the above-named accused armed with a scythe, taking advantage of his superior
strength, by means of force and intimidation, did then and there willfully, unlawfully and
feloniously have sexual intercourse with Prescila G. de Vera against her will, to her damage and
prejudice.

Contrary to Article 335 of the Revised Penal Code."

Upon arraignment, accused-appellant pleaded not guilty after which trial on the merits ensued, where
the prosecution presented the testimonies of complainant Prescila; Myrna de Vera, mother of Prescila;
Nieves de Vera, aunt of Prescila; and Dr. Cecilio Guico, Jr., the physician who conducted the medical
examination on Prescila and prepared the corresponding medical certificate thereon.

[2]
At the time of the alleged rape, Prescila was 12 years old having been born on 01 May 1982 ; accused-
appellant claimed to be 82 years old at the time of the commission of the offense, having been born on 12
[3]
September 1912. However, no official record or document was presented or available to ascertain the
[4]
actual age of accused-appellant.

As gleaned from the collective narration of the prosecution witnesses, the facts unfold.

Twelve-year-old Prescila de Vera, a grade three student and only daughter of Rodolfo de Vera and Myrna
Garcia, had been staying with her grandmother Brigida at San Jose, Aguilar Pangasinan, for a year
[5]
already prior to the alleged rape.

As a student, Prescila attended the morning and afternoon school sessions at Anonang Elementary
[6] [7]
School located around ten kilometers away from Brigida's residence.
On 22 November 1994, as Prescila was passing a ricefield[8] on her way home for lunch, accused-
appellant Austria, whom she refers to as "Lake Anoy,"[9] suddenly accosted her and grabbed her left
wrist. Accused-appellant then drew an eight-inch scythe and despite Prescila's resistance and
protestations, dragged the girl toward a part of the field where banana plants abound.[10]

Amid the cover of vegetation, accused appellant poked his scythe on Prescila's throat,[11] removed
Prescila's short pants and underwear and - on pain of death - forbid her to report the incident. Accused-
appellant then removed his short pants, as he was not donning any underwear, laid Prescila down and,
with his finger, fondled Prescila's vagina,[12] which bled. As accused-appellant commenced to unleash
his lust, the young lass felt pain in her vagina.

Thereafter, accused-appellant kissed Prescila, mashed her breast and probed his finger into her vagina.
Unsatisfied, accused-appellant touched himself by masturbating his penis.[13] Then, perched on top of
the young girl and while in the heat of fondling himself, accused-appellant held Prescila's hand. Prescila
protested, struggled and pushed accused-appellant away causing the latter to fall down. She attempted to
escape but accused-appellant stepped on Prescila's foot[14] thus rendering futile her efforts to extricate
from the lecherous advancement of accused-appellant.

Insatiated, accused-appellant positioned himself on top of Prescila, inserted his penis into her vagina and
worked his way with a "push-and-pull-movement". Again, Prescila felt pain in her vagina.

Having spent his lust, accused-appellant stood up, wore his short pants and went away. Feeling sick,
dizzy and devoid of strength, Prescila rested for a while after which she put on her underwear and
proceeded home.[15]

Upon arriving home and fearing that her grandmother Brigida would whip her, Prescila chose not to
divulge immediately the traumatic event as her grandmother was strict.[16] After the passage of two
weeks, however, Prescila, unable to conceal the ordeal to herself, disclosed the rape incident to her Aunt
Nieves de Vera, who eventually reported the same to Brigida.

At the witness stand, Prescila testified that she had her menstrual period on the day accused-appellant
ravished her. Further, she described appellant's penis--"like a new Peso coin," about an inch in diameter,
around four inches in length and black in color.[17] Prescila categorically declared that prior to the rape
incident she did not have sexual intercourse with anyone[18] and that as a result of the rape, she stopped
attending school for fear of her life.

On 26 December 1994, Dr. Cecilio Guico, Jr., resident physician of the Mangatarem District Hospital,
physically examined Prescila, which test yielded that[19] Prescila's hymen had old lacerations at "1,3,7
and 9 o' clock" which could have been caused by a blunt object forcibly entered into the victim's vagina.
[20] According to the medical report, Prescila's vagina was negative for spermatozoa and easily admitted
one examining finger.[21] No other external physical injuries were found at the time of examination
which was conducted 34 days after the alleged incident.[22]

In contrast, accused-appellant principally adopted a two-pronged defense riveted on denial and

impotency. Thus, according to accused-appellant's testimony, as corroborated by defense witness Rudy
Garcia,[23] around noon of 22 November 1994, accused-appellant was busy harvesting palay in the
ricefield owned by Austria's nephew Romualdo Gondayao. As accused-appellant was conversing with
Rudy Garcia, who was then overseeing the mango trees, Prescila, accompanied by another girl,
approached[24] and asked Austria for money.[25] Upon accused-appellant's refusal to give money,
[26]
Prescila grabbed his wallet containing P1,600.00[26] tucked in the right back pocket of his pants.
Accused-appellant then held Prescila's right hand and recovered the wallet from her. Thereafter, Prescila
retreated and from a distance of five meters, picked-up and threw hardened soil at accused-appellant
hitting his right knee.

Beyond this, accused-appellant raised the defense of impotency. On the stand, accused-appellant testified
that since reaching the age of 60 years, his penis is not anymore capable of erection[27] because of his
rheumatic condition. Upon reaching the age of 70, he also claimed to be afflicted with hernia;[28] he
cannot anymore run fast because his knees are already weak.[29]

In its bid for acquittal, the defense presented Dr. Wilma Flores-Peralta[30] who testified that she
examined accused-appellant on 11 January 1995 and found him suffering from Epidideguio Orchites or
"epidition of testicles plus the left tube". According to Dr. Peralta, the left testicle[31] of accused-
appellant was "swollen, larger than the right and tender". She added that the illness, which is different
from Hernia[32] and caused by viral or bacterial infection,[33] is painful.

During trial, the court observed and noted that the forefinger, fourth finger and thumb of the accused are
severed from accused-appellant's right hand. The forefinger is about an inch in length.[34]

Moreover, the testimonies of SP02 Luis Padama of the PNP Aguilar Police Station, and Magdalena
Fernandez, daughter of accused-appellant were presented by the defense. Magdalena testified that on 10
September 1994, she heard Prescila crying and reporting to her Aunt Nieves that one Sammy Valdez, who
was drunk, dragged Prescila to his house and raped the young girl. Magdalena's recollection though was
never corroborated.

Similarly, through the testimony of Magdalena, the defense interjected an angle of personal vendetta
theorizing that the rape charge against accused-appellant could have been filed due to Magdalena's
refusal to grant Brigida's request to let the latter transfer and occupy the former's land.[35] Brigida is
Prescila's grandmother.

On 31 October 1995, the trial court rendered a decision convicting accused-appellant, the decretal portion
of which reads:
"Wherefore, in the light of the considerations discussed above, the court finds and holds the
accused, Mariano Austria alias "Anoy", guilty beyond reasonable doubt of the crime of rape, defined
and penalized under Article 335 of the Revised Penal Code as amended by Republic Act No. 7659
and conformable thereto, pursuant to law, hereby sentences the said accused to suffer the penalty of
Reclusion Perpetua and its accessory penalties provided by law and to further pay the costs of the
proceedings.

The court further orders the accused to indemnify the victim Prescila de Vera the sum of Fifty
Thousand (P50,000.00) Pesos as moral damages without subsidiary imprisonment in case of
insolvency.

SO ORDERED."

Hence, the instant appeal where the defense ascribed to the trial court the following errors:
I

The trial court erred in finding the accused-appellant Mariano Austria guilty beyond reasonable
doubt of the crime of rape defined and penalized under Article 335 of the Revised Penal Code
considering that:
A. The conduct of Prescila De Vera after the supposed rape belie her claim and seriously puts
her credibility in issue;

B. The delay in reporting the crime was not reasonably explained. Thus, it casts a serious doubt
on the truth of the charge for rape;

C. The prosecution failed to overcome the presumption of impotence on the part of accused-
appellant Mariano Austria who was already eighty-two (82) years old at the time of the alleged
rape;

D. The prosecution failed to prove force and intimidation as an element of the crime of rape.

II

The trial court erred in not giving credence to the testimony of the defense when the version of the
prosecution is incredible failing thus to prove the guilt of the accused beyond reasonable doubt.
A. The story of the prosecution is replete with material inconsistencies and fails to discharge its
burden of proof sufficient to warrant a conviction.

As these proffered arguments are specious, the conviction of accused-appellant Austria necessarily
stands.

Beyond reasonable doubt, the prosecution's collective evidence indubitably established not only the
commission of the rape but also accused-appellant's precise degree of culpability and guilt therefor. Of
equal importance is the glaring fact that Prescila, in open court, positively identified[36] accused-
appellant as the defiler of her virtue.

In an attempt to evade criminal liability, accused-appellant, in effect, assails the credibility of Prescila by
casting doubts on complainant's conduct after the incident and by interposing the issue of delay in
reporting the crime. On this score, we reiterate the long-standing rule in this specie of cases, that the lone
testimony of a rape victim, if credible, is sufficient to sustain a judgment of conviction.[37] Courts usually
lend credence to testimonies of young girls, especially when the facts point to their having been victims of
sexual assault.[38]

Though insensate, the records still reveal that at the time accused-appellant ravaged complainant's
budding womanhood, Prescila, despite her being twelve years old, was still in grade three having failed
grade one thrice and grade two once.[39] Given the naiveté and limited intelligence of the complainant,
we do not believe that she could have fabricated her charges against accused-appellant, weaving a tale of
pure fantasy out of mere imagination. She does not appear to have such inventiveness.[40]

Neither is it proper for us to judge the actions of children who have undergone traumatic experience by
the norms of behavior expected under the circumstances from mature people.[41] Also, it is a matter of
judicial cognizance that in rural areas in the Philippines, young ladies are strictly required to act with
circumspection and prudence, and that great caution is observed so that their reputation shall remain
untainted.[42]

In the course of trial, the lower court observed that Prescila was sincere and frank in answering questions
propounded to her. At times, Prescila even "shed tears as she recalled and narrated the harrowing
experience and tragedy that befell upon her." Of judicial cognizance is the fact that the crying of the
victim during her testimony is evidence of the credibility of the rape charge.[43] Likewise, the trial court
recognized no "tone of hesitancy and artificiality in her voice as she testified and narrated how the
accused deflowered her."

To our mind, Prescila's testimony is unsoiled by deceptiveness and untouched by the vice of falsehood.
Her story of defloration, woeful as it is, bears the earmarks of truth; her narration deserves outmost
credence and weight, as opposed to accused-appellant's self-serving declarations and tale of denial.

As to the alleged delay, Prescila's disclosure that she has been raped must not be taken lightly, as it is not
uncommon for a young girl to conceal for some time the assault on her virtue because of the rapist's
threats on her life, fear of public humiliation, and/or lack of courage and composure to immediately
explain that she has been sexually assaulted.[44]

For while a complainant's act in immediately reporting the commission of rape has been considered by
the Court as a factor strengthening her credibility, delay or vacillation in criminal accusations does not
necessarily impair the complainant's credibility if such delay is satisfactorily explained.[45]

In the case before us, the rueful ordeal that Prescila bitterly experienced in the vicious hands of accused-
appellant, coupled with the fear of disappointing her grandmother and the serious threats on her life are-
-without doubt--more than enough to cow a young girl from immediately articulating the bestiality that
miserably visited her at such blooming age.

To put it differently, silence is not an odd behavior of a rape victim.[46]

Granting too that the delay could not be attributed to death threats and intimidation made and exercised
by the accused on the victim, such failure in making a prompt report to the proper authorities does not
destroy the truth per se of the complaint.[47]

Contrary to accused-appellant's arguments, the prosecution clearly showed that force and intimidation
attended the commission of the crime. Thus on the stand, Prescila narrated how "Lake Anoy", far more
advanced in age than her and formidably armed with a scythe, threatened to snuff out her life if she were
not to bow down to accused-appellant's salacious desires.

In a decided case,[48] this Court ruled that it is not necessary that force and violence be employed in
rape, intimidation is sufficient, and this includes the moral kind, i.e., threatening the victim with a knife.
Moreover, if the use of a knife and the threat of death against the victim's parents was, in People vs.
Pada[49] deemed intimidation sufficient to cow the victim into obedience, a fortiori, must we, in the
instant case, uphold the presence of force and intimidation, considering that accused-appellant directed
the threats against Prescila--the victim of rape herself.

Consequently, we consider the aggravating circumstance of deadly weapon[50] in the commission of the
rape, contrary to the trial court's pronouncement that the scythe " is a necessary implement to earn a
livelihood of the accused (sic) who is a farmer." As can be seen, the scythe was used by accused-appellant
as a tool to intimidate the victim and facilitate the consummation of this deplorable offense.

Notably, jurisprudence is replete with cases that threatening the victim with bodily injury while holding a
knife or bolo constitutes intimidation sufficient to bring a woman to submission to the lustful desires of
the molester.[51]

As to the alleged inconsistencies in Prescila's testimony, we consider them to be only minor and trivial so
as not to diminish, much less shatter the weight accorded to her narration concerning the commission of
the rape and the identity of the despicable author thereof--accused-appellant Austria. Besides, Prescila's
charge is fortified by the evidence on record specifically the medical findings and testimony of Dr. Cecilio
Guico, Jr., that the lacerations found in the victim's hymen could have been caused by a blunt object
forcibly entered into Prescila's vagina.[52]

Obviously, when the victim's testimony of her violation is corroborated by the physician's findings of
penetration, there is sufficient foundation to conclude the existence of the essential requisite of carnal
knowledge.[53]

Arguing on the last ditch, the defense volunteers that "the prosecution failed to overcome the
presumption of impotence on the part accused-appellant who was already eighty-two years old at the
time of the alleged rape."

This contention is dissident to settled jurisprudence.

Clearly, the presumption had always been in favor of potency.[54] Stated differently, impotency--the
physical inability to have sexual intercourse--is considered an abnormal condition and should not be
presumed, thus: [55]
"Impotence, in Medical Jurisprudence--Inability on the part of the male organ of copulation
to perform its proper function. Impotence applies only to disorders affecting the function of the
organ of copulation XXX (Dennis, System of Surgery; Bouvier's Law Dictionary, Rawle's Third
Revision, Vol. II, p. 1514);

"Impotence.

3. Law & Med. Incapacity for sexual intercourse." (Websters New International Dictionary,
Second Edition, Unabridged, p. 1251).

"Impotency or Impotence--Want of power for copulation, not mere sterility. The absence of
complete power of copulation is an essential element to constitute impotency. (31 C.J. p. 259)."

In rape cases, impotency as a defense must be proven with certainty to overcome the presumption in
favor of potency.[56] Under the present circumstances, the evidence proffered by the defense failed to
discharge such burden, inasmuch as the very testimony of Dr. Wilma Flores-Peralta repudiates the claim
that accused-appellant could not have performed the sexual act.

Although Dr. Peralta's findings prove that accused-appellant was afflicted with "Epidideguio Orchites",
such piece of evidence however does not categorically conclude, nor even hint that Austria was sexually
impotent. The evidence on this point is wanting.

Assuming further that accused-appellant was 82 years old as he claimed he was at the time of the
commission of the crime, his advanced age does not ipso facto mean that sexual intercourse is no longer
possible, as age is not a criterion taken alone in determining sexual interest and capability in middle-aged
and older people.[57] Moreover, as in People vs. De Guzman[58], the protestations of accused-
appellant that he could not have raped the complainant because he was already old at that time are belied
by his physical condition.

To this end, the trial court had these words to describe accused-appellant Austria:[59]
"During the trial of the case, the court had occasion to observe the movements of the accused and
found him still strong, agile and capable of committing sexual act. In fact, it has been established
during the trial that Mariano Austria could still work in the farm and was harvesting palay at the
time the incident happened. The court also entertains serious doubts that the accused is 83 years
old. His physical built, appearance and movements strongly negate the assertion of the defense that
Mariano Austria is 83 years old."

Notwithstanding, we consider accused-appellant's old age to mitigate his liability.[60]

As to the proper penalty, where appellant committed the rape with the use of a deadly weapon, the law
provides that the range of penalty imposable on him shall be the indivisible penalties of reclusion
perpetua to death.[61]However, in view of the mitigating circumstance of his age and pursuant to Article
63 of the Revised Penal Code, the lesser penalty of reclusion perpetua shall be meted to him.

One last note. The records show that at the time of the rape, Prescila had her menstrual period.
Regardless, the presence or absence of menstruation does not negate the crime of rape nor render its
execution impossible;[62] lust, after all, manifests no reverence for occasion, location or the victim's
condition.

For lechery is a beast that knows no master; it is an ogre that cradles no conscience.

WHEREFORE, the decision appealed from is AFFIRMED with the MODIFICATION, that in addition to
the P50,000.00 awarded as moral damages,[63] he is ordered to pay the victim the sum of P50,000.00
as civil indemnity[64] plus costs of the proceedings.

SO ORDERED.

Bellosillo, (Chairman), Mendoza, Quisumbing, and De Leon, Jr., JJ., concur.

[1] Records, p.1.

[2] Certification from the Local Civil Registrar of Baliwag, Bulacan , Exhibit A; Records, p..

[3] TSN, 07 June 1995, p.2.

[4] Certification, dated 27 June 1995, issued by the Office of the Civil Registrar General, that civil registry
records of births for the year 1912 are not available, Exhibit 3, Records, p. 57;

Certification, dated 05 July 1995, issued by the Archives Division, Records Management and Archives
Office, that the Register of Births for the Municipality of Aguilar, Pangasinan for the year 1912, is not on
file with said office, Exhibit 4, Records, p. 58.

[5] TSN, 10 April 1995, p. 2.

[6] Ibid., p.10.

[7] Ibid., p.2.

[8] Ricefield owned by accused-appellant's nephew, Romualdo Gondayao.

[9] Ibid., p.4. ; "Lake" which means grandfather, in the local dialect.

[10] TSN, 10 April 1995, p. 7.

[11] Ibid.

[12] Ibid., p.6.

[13] Ibid.

[14] TSN, 10 April 1995, p.26.

[15] Ibid., p. 7.

[16] Ibid., p.8.

[17] Ibid., p. 31.

[18] Ibid., p. 9.

[19] Medico-Legal Certificate, dated 27 December 1994; Exhibit D.

[20] TSN, 05 April 1995, p. 4.

[21] Exhibit D.

[22] TSN, 05 April 1995, p.5.

[23] TSN, 20 April 1995.

[24] TSN, 07 June 1995, p.4.

[25] Ibid., p. 5.

[26] Ibid., p. 20.

[27] Ibid., p. 6.

[28] Ibid., p.7.

[29]
[29] Ibid., p. 8.

[30] TSN, 31 July 1995.

[31] Ibid., p. 8.

[32] Ibid., p. 8.

[33] Ibid., p. 5.

[34] TSN, 10 April 1995.

[35] TSN, 04 May 1995, p. 7.

[36] TSN, 10 April 1995, p. 4.

[37] People vs. Quitoriano, 266 SCRA 373 (1997)

[38] People vs. Devilleres, 269 SCRA 716 (1997)

[39] TSN, 10 April 1995, Re-direct Examination of Prescila.

[40] People vs. Baao, 142 SCRA 476 (1986)

[41] People vs. Tadulan, 271 SCRA 233 (1997)

[42] People vs. Travero, 276 SCRA 301 (1997)

[43] People vs. Mitra, G.R. No. 130669, 27 March 2000; People vs. Ramos, 296 SCRA 559 (1998), citing
People vs. Joya, et al., 227 SCRA 9.

[44] People vs. Adora, 275 SCRA 441 (1997)

[45] People vs. Bahuyan, 238 SCRA 330 (1994); People vs. Devilleres, 269 SCRA 716 (1997)

[46] People vs. Dones, 254 SCRA 696 (1996)

[47] People vs. Sagun, 303 SCRA 382 (1999)

[48] People vs. Salazar, 258 SCRA 55 (1996)

[49] 261 SCRA 773 (1996)

[50] Article 335 of the Revised Penal Code, as amended by Republic Act 7659, provides in part that, "
whenever the crime of rape is committed with the use of a deadly weapon... the penalty shall be reclusion
perpetua to death."

[51] People vs. Mitra, G.R. No 130669, 27 March 2000; People vs. Reynaldo, 291 SCRA 701 (1998), citing
People vs. Roll, 200 Phil. 665; People vs. Espinoza, 317 Phil 79 (1995), citing People vs. Adlawan, Jr. 217
SCRA 489 (1993)
[52] TSN, 05 April 1995, p. 4.

[53] People vs. Oarga, 259 SCRA 90 (1996), citing People vs. Castillo, 197 SCRA 657 (1991)

[54] People vs. Olmedillo, 116 SCRA 193 (1982)

[55] Menciano vs. Neri San Jose, 89 Phil. 63,70 (1951)

[56] People vs. Bahuyan, 238 SCRA 330 (1994), citing People vs. Palma, 144 SCRA 236 (1986)

[57] Dickinson, Robert Latou, Human Sex Anatomy. Second Edition , Baltimore, The Wiliams & Wilkins
Company, 1949, cited in People vs. Bahuyan, 238 SCRA 330.

[58] 217 SCRA 395 (1993)

[59] Decision, dated 31 October 1995, in Criminal Case No. L-5239.

[60] Article 13, par 2, Revised Penal Code:" 2. That the offender is under eighteen years of age or over
seventy years. XXX"

[61] People vs. Ponayo, 261 SCRA 61 (1996)

[62] People vs. Acabo, 259 SCRA 75 (1996)

[63] People vs. Laray, 253 SCRA 654 (1996)

[64] People vs. Adora, 275 SCRA 441 (1997); People vs. Caballes, 274 SCRA 83 (1997)
EN BANC

[ GR No. 131516, Mar 05, 2003 ]

PEOPLE v. RONNIE RULLEPA Y GUINTO

DECISION
446 Phil. 745

CARPIO MORALES, J.:

On complaint of Cyra May Francisco Buenafe, accused-appellant Ronnie Rullepa y Guinto was charged
with Rape before the Regional Trial Court (RTC) of Quezon City allegedly committed as follows:
That on or about the 17th day of November, 1995, in Quezon City, Philippines, the said accused, by
means of force and intimidation, to wit: by then and there willfully, unlawfully and feloniously
removing her panty, kissing her lips and vagina and thereafter rubbing his penis and inserting the
same to the inner portion of the vagina of the undersigned complainant, 3 years of age, a minor,
against her will and without her consent.[1]

[2]
Arraigned on January 15, 1996, accused-appellant pleaded not guilty.

[3]
From the testimonies of its witnesses, namely Cyra May, her mother Gloria Francisco Buenafe, Dr.
Cristina V. Preyra, and SPO4 Catherine Borda, the prosecution established the following facts:

On November 20, 1995, as Gloria was about to set the table for dinner at her house in Quezon City, Cyra
May, then only three and a half years old, told her, "Mama, si kuya Ronnie lagay niya titi niya at sinaksak
sa puwit at sa bibig ko."

"Kuya Ronnie" is accused-appellant Ronnie Rullepa, the Buenafes' house boy, who was sometimes left
with Cyra May at home.

Gloria asked Cyra May how many times accused-appellant did those things to her, to which she answered
many times. Pursuing, Gloria asked Cyra May what else he did to her, and Cyra May indicated the room
where accused-appellant slept and pointed at his pillow.

[4]
As on the night of November 20, 1995 accused-appellant was out with Gloria's husband Col. Buenafe,
she waited until their arrival at past 11:00 p.m. Gloria then sent accused-appellant out on an errand and
informed her husband about their daughter's plaint. Buenafe thereupon talked to Cyra May who repeated
what she had earlier told her mother Gloria.

When accused-appellant returned, Buenafe and Gloria verified from him whether what Cyra May had
told them was true. Ronnie readily admitted doing those things but only once, at 4:00 p.m. of November
17, 1995 or three days earlier. Unable to contain her anger, Gloria slapped accused-appellant several
times.

Since it was already midnight, the spouses waited until the following morning to bring accused-appellant
to Camp Karingal where he admitted the imputations against him, on account of which he was detained.

[ ] [6]
Gloria's sworn statement[5] was then taken.[6]

Recalling what accused-appellant did to her, Cyra May declared at the witness stand: "Sinaksak nya ang
titi sa pepe ko, sa puwit ko, at sa bunganga," thus causing her pain and drawing her to cry. She added that
accused-appellant did these to her twice in his bedroom.

Dr. Ma. Cristina V. Preyra, the Medico-Legal Officer and Chief of the Biological Science Branch of the
Philippine National Police Crime Laboratory who examined Crya May, came up with her report dated
November 21, 1995,[7] containing the following findings and conclusions:
FINDINGS:

GENERAL AND EXTRA GENITAL:

Fairly developed, fairly nourished and coherent female child subject. Breasts are undeveloped.
Abdomen is flat and soft.

GENITAL:

There is absence of pubic hair. Labia majora are full, convex and coaptated with congested and
abraded labia minora presenting in between. On separating the same is disclosed an abraded
posterior fourchette and an elastic, fleshy type intact hymen. External vaginal orifice does not admit
the tip of the examining index finger.

xxx

CONCLUSION:

Subject is in virgin state physically.

There are no external signs of recent application of any form of trauma at the time of examination.
(Emphasis supplied.)

By Dr. Preyra's explanation, the abrasions on the labia minora could have been caused by friction with an
object, perhaps an erect penis. She doubted if riding on a bicycle had caused the injuries.[8]

The defense's sole witness was accused-appellant, who was 28 and single at the time he took the witness
stand on June 9, 1997. He denied having anything to do with the abrasions found in Cyra May's genitalia,
and claimed that prior to the alleged incident, he used to be ordered to buy medicine for Cyra May who
had difficulty urinating. He further alleged that after he refused to answer Gloria's queries if her husband
Buenafe, whom he usually accompanied whenever he went out of the house, was womanizing, Gloria
would always find fault in him. He suggested that Gloria was behind the filing of the complaint. Thus:
q- According to them you caused the abrasions found in her genital?

a- That is not true, sir.

q- If that is not true, what is the truth?

As I have mentioned earlier that before I started working with the family I was sent to
a-
Crame to buy medicine for the daughter because she had difficulty in urinating.

q- Did you know why the child has difficulty in urinating?

a- No, I do not know, sir.

And how about the present complaint filed against you, the complaint filed by the mother
q-
of the victim?

a- I did not do it, sir.

q- What is the truth, what can you say about this present complaint filed against you?

As I said Mrs. Buenafe got mad at me because after I explained to her that I was going
a- [9]
with her gusband (sic) to the children of the husband with a former marriage.

Finding for the prosecution, Branch 96 of the Quezon City RTC rendered judgment, the dispositive
portion of which reads:
WHEREFORE, judgment is hereby rendered finding accused RONNIE RULLEPA y GUINTO guilty
beyond reasonable doubt of rape, and he is accordingly sentenced to death.

The accused is ordered to pay CYRA MAE BUENAFE the amount of P40,000.00 as civil indemnity.

[10]
Costs to be paid by the accused. (Italics in the original.)

Hence, this automatic review, accused-appellant assigning the following errors to the trial court:
I

THE COURT A QUO ERRED IN CONSIDERING AS ADMISSIBLE IN EVIDENCE THE ACCUSED-

APPELLANT'S ADMISSION.

II

THE COURT A QUO ERRED ON (sic) RULING THAT THE ACCUSED-APPELLANT'S SILENCE
DURING TRIAL AMOUNTED TO AN IMPLIED ADMISSION OF GUILT.

III

THE COURT A QUO ERRED IN FINDING THAT THE GUILT OF THE ACCUSED-APPELLANT
FOR THE CRIME CHARGED HAS BEEN PROVEN BEYOND REASONABLE DOUBT.

IV

THE COURT A QUO GRAVELY ERRED IN IMPOSING THE SUPREME PENALTY OF DEATH
[11]
UPON THE ACCUSED-APPELLANT. (Emphasis supplied.)

Accused-appellant assails the crediting by the trial court, as the following portion of its decision shows, of
his admission to Gloria of having sexually assaulted Cyra May:
In addition, the mother asserted that Rullepa had admitted Cyra Ma[y]'s complaint during the
confrontation in the house. Indeed, according to the mother, the admission was even expressly
qualified by Rullepa's insistence that he had committed the sexual assault only once, specifying the
time thereof as 4:00 pm of November 17, 1995. That qualification proved that the admission was
voluntary and true. An uncoerced and truthful admission like this should be absolutely admissible
and competent.

xxx

Remarkably, the admission was not denied by the accused during trial despite his freedom to deny it
[12]
if untrue. Hence, the admission became conclusive upon him. (Emphasis supplied.)

To accused-appellant, the statements attributed to him are inadmissible since they were made out of fear,
having been elicited only after Cyra May's parents "bullied and questioned him." He thus submits that it
was error for the trial court to take his failure to deny the statements during the trial as an admission of
guilt.

Accused-appellant's submission does not persuade. The trial court considered his admission merely as an
additional ground to convince itself of his culpability. Even if such admission, as well as the implication
of his failure to deny the same, were disregarded, the evidence suffices to establish his guilt beyond
reasonable doubt.

The plain, matter-of-fact manner by which Cyra May described her abuse in the hands of her Kuya
Ronnie is an eloquent testament to the truth of her accusations. Thus she testified on direct examination:
q- Do you recall if Ronnie Rullepa did anything to you?

a- Yes, sir.

q- What did he do to you?

a- "Sinaksak nya ang titi sa pepe ko, sa puwit ko, at sa bunganga"

q- How many times did he do that to you?

a- Twice, sir.

xxx

q- Do you remember when he did these things to you?

a- Opo.

q- When was that?

When my mother was asleep, he put he removed my panty and inserted his penis inside
a-
my vagina, my anus and my mouth, sir.

xxx

q- After your Kuya Ronnie did those things to you what did you feel?

"Sabi nya ganito (Witness putting her finger in her lips) Nasaktan po ako at umiyak po
a-
ako".

q- Did you cry because of hurt?

a- Yes.

q- What part of your body hurt?

[13]
a- "Pepe ko po." When I went to the bathroom to urinate, I felt pain in my organ, sir.

Cyra May reiterated her testimony during cross-examination, providing more revolting details of her
ordeal:
So, you said that Kuya Ronnie did something to you what did he do to you on November
q-
17, 1995?

a- "Sinaksak nga yong titi nya". He inserted his penis to my organ and to my mouth, sir.

xxx

When you said that your kuya Ronnie inserted his penis into your organ, into your mouth,
q-
and into your anus, would you describe what his penis?

a- It is a round object, sir.

C o u r t:

Is this titi of your kuya Ronnie a part of his body?

a- Opo.

q- Was that in the head of kuya Ronnie?

a- No, sir.

q- Which part of his body that titi located?

(Witness pointing to her groin area)

C o u r t:

Continue

xxx

q- Why were you in that room?

a- Gusto nya po matulog ako sa kuwarto niya.

q- When you were in that room, what did Kuya Ronnie do to you?

a- "Hinubo po niya ang panty ko."

q- And after he remove your panty, what did Kuya Ronnie do, what did he do to you?

a- He inserted his penis to my organ, sir.

Why did kuya Ronnie, was kuya Ronnie already naked or he was already wearing any
q-
clothing?

a- Still had his clothing on, sir.

q- So, where did his penis, saan lumabas ang penis ni Kuya Ronnie?
a- Dito po, (Witness referring or pointing to her groin area)

xxx

q- So, that's the and at the time, you did not cry and you did not shout for help?

a- Sabi nya po, not to make any noise because my mother might be roused from sleep.

q- How long was kuya Ronnie did that to you?

a- Matagal po.

q- After kuya Ronnie scrub his penis to your vagina, what other things did he do?

a- After that he inserted his penis to my mouth, and to my anus, sir.

q- You did not complain and you did not shout?

[14]
a- I cried, sir.

Accused-appellant draws attention to the statement of Cyra May that he was not in the house on
November 17 (1995), as reflected in the following transcript of her testimony:
Is it not a fact that you said a while ago that when your father leaves the house, he [was]
q-
usually accompanied by your kuya Ronnie?

a- Opo.

Why is it that Kuya Ronnie was in the house when you father left the house at that time,
q-
on November 17?

a- He was with Kuya Ronnie, sir.

So, it is not correct that kuya Ronnie did something to you because your kuya Ronnie
q-
[was] always with your Papa?

[15]
a- Yes, sir.

The above-quoted testimony of Cyra May does not indicate the time when her father Col. Buenafe left
their house on November 17, 1995 with accused-appellant and, thus, does not preclude accused-
appellant's commission of rape on the same date. In any event, a young child is vulnerable to suggestion,
hence, her affirmative response to the defense counsel's above-quoted leading questions.

As for the variance in the claim regarding when Gloria was informed of the rape, Gloria having testified
that she learned of it on November 20, 1995[16] while Cyra May said that immediately after the incident,
she awakened her mother who was in the adjacent room and reported it:[17] This is a minor matter that
does not detract from Cyra May's categorical, material testimony that accused-appellant inserted his
penis into her vagina.
Accused-appellant goes on to contend that Cyra May was coached, citing the following portion of her
testimony:
q- "Yong sinabi mong sinira nya ang buhay mo," where did you get that phrase?

[18]
a- It was the word of my Mama, sir.

On the contrary, the foregoing testimony indicates that Cyra May was really narrating the truth, that of
hearing her mother utter "sinira niya ang buhay mo."

Accused-appellant's suggestion that Cyra May merely imagined the things of which he is accused,
perhaps getting the idea from television programs, is preposterous. It is true that "the ordinary child is a
'great weaver of romances,''' and her "imagination may induce (her) to relate something she has heard or
read in a story as personal experience."[19] But Cyra May's account is hardly the stuff of romance or fairy
tales. Neither is it normal TV fare, if at all.

This Court cannot believe that a victim of Cyra May's age could concoct a tale of defloration, allow the
examination of her private parts, and undergo the expense, trouble, inconvenience, not to mention the
trauma of public trial.[20]

Besides, her testimony is corroborated by the findings of Dr. Preyra that there were abrasions in her labia
minora, which she opined, could have been caused by friction with an erect penis.

This Court thus accords great weight to the following assessment of the trial court regarding the
competency and credibility of Cyra May as a witness:
Her very tender age notwithstanding, Cyra Ma(y) nonetheless appeared to possess the necessary
intelligence and perceptiveness sufficient to invest her with the competence to testify about her
experience. She might have been an impressionable child as all others of her age are but her
narration of Kuya Ronnie's placing his "titi" in her "pepe" was certainly one which could not be
considered as a common child's tale. Her responses during the examination of counsel and of the
Court established her consciousness of the distinction between good and bad, which rendered
inconceivable for her to describe a "bad" act of the accused unless it really happened to her.
Needless to state, she described the act of the accused as bad. Her demeanor as a witness
manifested during trial by her unhesitant, spontaneous, and plain responses to questions further
[21]
enhanced her claim to credit and trustworthiness. (Italics in the original.)

In a futile attempt at exculpation, accused-appellant claims that even before the alleged incident Cyra
May was already suffering from pain in urinating. He surmises that she could have scratched herself
which caused the abrasions. Dr. Preyra, however, was quick to rule out this possibility. She stated
categorically that that part of the female organ is very sensitive and rubbing or scratching it is painful.
[22] The abrasions could not, therefore, have been self-inflicted.

That the Medical-Legal Officer found "no external signs of recent application of any form of trauma at the
time of the examination" does not preclude accused-appellant's conviction since the infliction of force is
immaterial in statutory rape.[23]

More. That Cyra May suffered pain in her vagina but not in her anus despite her testimony that accused-
appellant inserted his penis in both orifices does not diminish her credibility. It is possible that accused-
appellant's penis failed to penetrate her anus as deeply as it did her vagina, the former being more
resistant to extreme forces than the latter.
Accused-appellant's imputation of ill motive on the part of Gloria is puerile. No mother in her right mind
would subject her child to the humiliation, disgrace and trauma attendant to a prosecution for rape if she
were not motivated solely by the desire to incarcerate the person responsible for the child's defilement.
[24] Courts are seldom, if at all, convinced that a mother would stoop so low as to subject her daughter to
physical hardship and shame concomitant to a rape prosecution just to assuage her own hurt feelings.
[25]

Alternatively, accused-appellant prays that he be held liable for acts of lasciviousness instead of rape,
apparently on the basis of the following testimony of Cyra May, quoted verbatim, that he merely
"scrubbed" his penis against her vagina:
q- Is it not a fact that kuya Ronnie just made some scrubbed his penis into your vagina?

a- Yes, sir.

q- And when he did not actually penetrated your vagina?

[26]
a- Yes, sir.

Dr. Preya, however, found abrasions in the labia minora, which is "directly beneath the labia majora,"
[27] proving that there was indeed penetration of the vagina, not just a mere rubbing or "scrubbing" of
the penis against its surface.

In fine, the crime committed by accused-appellant is not merely acts of lasciviousness but statutory rape.

The two elements of statutory rape are (1) that the accused had carnal knowledge of a woman, and (2)
that the woman is below twelve years of age.[28] As shown in the previous discussion, the first element,
carnal knowledge, had been established beyond reasonable doubt. The same is true with respect to the
second element.

The victim's age is relevant in rape cases since it may constitute an element of the offense. Article 335 of
the Revised Penal Code, as amended by Republic Act No. 7659,[29] provides:
Art. 335. When and how rape is committed. Rape is committed by having carnal knowledge of a
woman under any of the following circumstances:

x x x.
3. When the woman is under twelve years of age x x x.
x x x.

The crime of rape shall be punished by reclusion perpetua.

x x x.

Furthermore, the victim's age may constitute a qualifying circumstance, warranting the imposition of the
death sentence. The same Article states:
The death penalty shall also be imposed if the crime of rape is committed with any of the following
attendant circumstances:
1. when the victim is under eighteen (18) years of age and the offender is a parent, ascendant,
step-parent, guardian, relative by consanguinity or affinity with the third civil degree, or the
common-law spouse of the parent of the victim.
x x x.
4. when the victim is x x x a child below seven (7) years old.
x x x.

Because of the seemingly conflicting decisions regarding the sufficiency of evidence of the victim's age in
rape cases, this Court, in the recently decided case of People v. Pruna,[30] established a set of guidelines
in appreciating age as an element of the crime or as a qualifying circumstance, to wit:
1. The best evidence to prove the age of the offended party is an original or certified true copy of
the certificate of live birth of such party.

3. In the absence of a certificate of live birth, similar authentic documents such as baptismal
certificate and school records which show the date of birth of the victim would suffice to prove
age.

5. If the certificate of live birth or authentic document is shown to have been lost or destroyed or
otherwise unavailable, the testimony, if clear and credible, of the victim's mother or a member
of the family either by affinity or consanguinity who is qualified to testify on matters respecting
pedigree such as the exact age or date of birth of the offended party pursuant to Section 40,
Rule 130 of the Rules on Evidence shall be sufficient under the following circumstances:

a. If the victim is alleged to be below 3 years of age and what is sought to be proved is that
she is less than 7 years old;

c. If the victim is alleged to be below 7 years of age and what is sought to be proved is that
she is less than 12 years old;

e. If the victim is alleged to be below 12 years of age and what is sought to be proved is that
she is less than 18 years old.

7. In the absence of a certificate of live birth, authentic document, or the testimony of the victim's
mother or relatives concerning the victim's age, the complainant's testimony will suffice
provided that it is expressly and clearly admitted by the accused.

9. It is the prosecution that has the burden of proving the age of the offended party. The failure of
the accused to object to the testimonial evidence regarding age shall not be taken against him.

11. The trial court should always make a categorical finding as to the age of the victim.

Applying the foregoing guidelines, this Court in the Pruna case held that the therein accused-appellant
could only be sentenced to suffer the penalty of reclusion perpetua since:
x x x no birth certificate or any similar authentic document, such as a baptismal certificate of
LIZETTE, was presented to prove her age. x x x.

x x x.

However, the Medico-Legal Report relied upon by the trial court does not in any way prove the age
of LIZETTE, for there is nothing therein which even mentions her age. Only testimonial evidence
was presented to establish LIZETTE's age. Her mother, Jacqueline, testified (that the victim was
three years old at the time of the commission of the crime).

xxx

Likewise, LIZETTE testified on 20 November 1996, or almost two years after the incident, that she
was 5 years old. However, when the defense counsel asked her how old she was on 3 January 1995,
or at the time of the rape, she replied that she was 5 years old. Upon further question as to the date
she was born, she could not answer.

For PRUNA to be convicted of rape in its qualified form and meted the supreme penalty of death, it
must be established with certainty that LIZETTE was below 7 years old at the time of the
commission of the crime. It must be stressed that the severity of the death penalty, especially its
irreversible and final nature once carried out, makes the decision-making process in capital offenses
aptly subject to the most exacting rules of procedure and evidence.

In view of the uncertainty of LIZETTE's exact age, corroborative evidence such as her birth
certificate, baptismal certificate or any other authentic document should be introduced in evidence
in order that the qualifying circumstance of "below seven (7) years old" is appreciated against the
appellant. The lack of objection on the part of the defense as to her age did not excuse the
prosecution from discharging its burden. That the defense invoked LIZETTE's tender age for
purposes of questioning her competency to testify is not necessarily an admission that she was
below 7 years of age when PRUNA raped her on 3 January 1995. Such being the case, PRUNA
cannot be convicted of qualified rape, and hence the death penalty cannot be imposed on him.

However, conformably with no. 3 (b) of the foregoing guidelines, the testimony of LIZETTE's
mother that she was 3 years old at the time of the commission of the crime is sufficient for purposes
of holding PRUNA liable for statutory rape, or rape of a girl below 12 years of age. Under the second
paragraph of Article 335, as amended by R.A. No. 7659, in relation to no. 3 of the first paragraph
thereof, having carnal knowledge of a woman under 12 years of age is punishable by reclusion
perpetua. Thus, the penalty to be imposed on PRUNA should be reclusion perpetua, and not death
penalty. (Italics in the original.)

Several cases[31] suggest that courts may take "judicial notice" of the appearance of the victim in
determining her age. For example, the Court, in People v. Tipay,[32] qualified the ruling in People v.
Javier,[33] which required the presentation of the birth certificate to prove the rape victim's age, with the
following pronouncement:
This does not mean, however, that the presentation of the certificate of birth is at all times necessary
to prove minority. The minority of a victim of tender age who may be below the age of ten is quite
manifest and the court can take judicial notice thereof. The crucial years pertain to the ages of
fifteen to seventeen where minority may seem to be dubitable due to one's physical appearance. In
this situation, the prosecution has the burden of proving with certainty the fact that the victim was
under 18 years of age when the rape was committed in order to justify the imposition of the death
penalty under the above-cited provision. (Emphasis supplied.)

On the other hand, a handful of cases[34] holds that courts, without the requisite hearing prescribed by
Section 3, Rule 129 of the Rules of Court,[35] cannot take judicial notice of the victim's age.

Judicial notice signifies that there are certain "facta probanda," or propositions in a party's case, as to
which he will not be required to offer evidence; these will be taken for true by the tribunal without the
need of evidence.[36] Judicial notice, however, is a phrase sometimes used in a loose way to cover some
other judicial action. Certain rules of Evidence, usually known under other names, are frequently referred
to in terms of judicial notice.[37]

The process by which the trier of facts judges a person's age from his or her appearance cannot be
categorized as judicial notice. Judicial notice is based upon convenience and expediency for it would
certainly be superfluous, inconvenient, and expensive both to parties and the court to require proof, in
the ordinary way, of facts which are already known to courts.[38] As Tundag puts it, it "is the cognizance
of certain facts which judges may properly take and act on without proof because they already know
them." Rule 129 of the Rules of Court, where the provisions governing judicial notice are found, is
entitled "What Need Not Be Proved." When the trier of facts observes the appearance of a person to
ascertain his or her age, he is not taking judicial notice of such fact; rather, he is conducting an
examination of the evidence, the evidence being the appearance of the person. Such a process militates
against the very concept of judicial notice, the object of which is to do away with the presentation of
evidence.

This is not to say that the process is not sanctioned by the Rules of Court; on the contrary, it does. A
person's appearance, where relevant, is admissible as object evidence, the same being addressed to the
senses of the court. Section 1, Rule 130 provides:
SECTION 1. Object as evidence. Objects as evidence are those addressed to the senses of the court.
When an object is relevant to the fact in issue, it may be exhibited to, examined or viewed by the
court.

"To be sure," one author writes, "this practice of inspection by the court of objects, things or persons
relevant to the fact in dispute, has its roots in ancient judicial procedure."[39] The author proceeds to
quote from another authority:
"Nothing is older or commoner in the administration of law in all countries than the submission to
the senses of the tribunal itself, whether judge or jury, of objects which furnish evidence. The view of
the land by the jury, in real actions, of a wound by the judge where mayhem was alleged, and of the
person of one alleged to be an infant, in order to fix his age, the inspection and comparison of seals,
the examination of writings, to determine whether they are (')blemished,(') the implements with
which a crime was committed or of a person alleged, in a bastardy proceeding, to be the child of
another, are few illustrations of what may be found abundantly in our own legal records and
[40]
textbooks for seven centuries past." (Emphasis supplied.)
A person's appearance, as evidence of age (for example, of infancy, or of being under the age of consent to
intercourse), is usually regarded as relevant; and, if so, the tribunal may properly observe the person
brought before it.[41] Experience teaches that corporal appearances are approximately an index of the
age of their bearer, particularly for the marked extremes of old age and youth. In every case such
evidence should be accepted and weighed for what it may be in each case worth. In particular, the
outward physical appearance of an alleged minor may be considered in judging his age; a contrary rule
would for such an inference be pedantically over-cautious.[42] Consequently, the jury or the court trying
an issue of fact may be allowed to judge the age of persons in court by observation of such persons.[43]
The formal offer of the person as evidence is not necessary. The examination and cross-examination of a
party before the jury are equivalent to exhibiting him before the jury and an offer of such person as an
exhibit is properly refused. [44]

This Court itself has sanctioned the determination of an alien's age from his appearance. In Braca v.
Collector of Customs,[45] this Court ruled that:
The customs authorities may also determine from the personal appearance of the immigrant what
his age is. The person of a Chinese alien seeking admission into the Philippine Islands is evidence in
an investigation by the board of special inquiry to determine his right to enter; and such body may
take into consideration his appearance to determine or assist in determining his age and a finding
that the applicant is not a minor based upon such appearance is not without evidence to support it.

This Court has also implicitly recognized the same process in a criminal case. Thus, in United States v.
Agadas,[46] this Court held:
Rosario Sabacahan testified that he was 17 years of age; that he had never purchased a cedula; and
that he was going to purchase a cedula the following january. Thereupon the court asked this
defendant these questions: "You are a pretty big boy for seventeen." Answer: "I cannot tell exactly
because I do not remember when I was born, but 17 years is my guess." Court: "If you are going to
take advantage of that excuse, you had better get some positive evidence to that effect." Answer: "I
do not remember, as I already stated on what date and in what year I was born." The court, in
determining the question of the age of the defendant, Rosario Sabacahan, said:
"The defendant, Rosario Sabacahan, testified that he thought that he was about 17 years of age,
but judging by his appearance he is a youth 18 or 19 years old. He has shown that he has no
positive information on the subject and no effort was made by the defense to prove the fact that
he is entitled to the mitigating circumstance of article 9, paragraph 2, of the Penal code, which
fact it is held to be incumbent upon the defense to establish by satisfactory evidence in order to
enable the court to give an accused person the benefit of the mitigating circumstance."

In United States vs. Estavillo and Perez (10 Off. Gaz., 1984) Estavillo testified, when the case was
tried in the court below, that he then was only 16 years of age. There was no other testimony in the
record with reference to his age. But the trial judge said: "The accused Estavillo, notwithstanding his
testimony giving his age as 16 years, is, as a matter of fact, not less than 20." This court, in passing
upon the age of Estavillo, held:
"We presume that the trial court reached this conclusion with reference to the age of Estavillo
from the latter's personal appearance. There is no proof in the record, as we have said, which
even tends to establish the assertion that this appellant understated his age. * * * It is true that
the trial court had an opportunity to note the personal appearance of Estavillo for the purpose
of determining his age, and by so doing reached the conclusion that he was at least 20, just two
years over 18. This appellant testified that he was only 16, and this testimony stands
uncontradicted. Taking into consideration the marked difference in the penalties to be
imposed upon that age, we must, therefore, conclude (resolving all doubts in favor of the
appellants) that the appellants' ages were 16 and 14 respectively."

While it is true that in the instant case Rosario testified that he was 17 years of age, yet the trial court
reached the conclusion, judging from the personal appearance of Rosario, that "he is a youth 18 or
19 years old." Applying the rule enunciated in the case just cited, we must conclude that there exists
a reasonable doubt, at least, with reference to the question whether Rosario was, in fact 18 years of
age at the time the robbery was committed. This doubt must be resolved in favor of the defendant,
and he is, therefore, sentenced to six months of arresto mayor in lieu of six years ten months and
one day of presidio mayor. x x x.

There can be no question, therefore, as to the admissibility of a person's appearance in determining his or
her age. As to the weight to accord such appearance, especially in rape cases, Pruna laid down guideline
no. 3, which is again reproduced hereunder:
3. If the certificate of live birth or authentic document is shown to have been lost or destroyed or
otherwise unavailable, the testimony, if clear and credible, of the victim's mother or a member
of the family either by affinity or consanguinity who is qualified to testify on matters respecting
pedigree such as the exact age or date of birth of the offended party pursuant to Section 40,
Rule 130 of the Rules on Evidence shall be sufficient under the following circumstances:

A. If the victim is alleged to be below 3 years of age and what is sought to be proved is that
she is less than 7 years old;

C. If the victim is alleged to be below 7 years of age and what is sought to be proved is that
she is less than 12 years old;

E. If the victim is alleged to be below 12 years of age and what is sought to be proved is that
she is less than 18 years old.

Under the above guideline, the testimony of a relative with respect to the age of the victim is sufficient to
constitute proof beyond reasonable doubt in cases (a), (b) and (c) above. In such cases, the disparity
between the allegation and the proof of age is so great that the court can easily determine from the
appearance of the victim the veracity of the testimony. The appearance corroborates the relative's
testimony.

As the alleged age approaches the age sought to be proved, the person's appearance, as object evidence of
her age, loses probative value. Doubt as to her true age becomes greater and, following Agadas, supra,
such doubt must be resolved in favor of the accused.
This is because in the era of modernism and rapid growth, the victim's mere physical appearance is
not enough to gauge her exact age. For the extreme penalty of death to be upheld, nothing but proof
beyond reasonable doubt of every fact necessary to constitute the crime must be substantiated.
Verily, the minority of the victim should be not only alleged but likewise proved with equal certainty
and clearness as the crime itself. Be it remembered that the proof of the victim's age in the present
[47]
case spells the difference between life and death.

In the present case, the prosecution did not offer the victim's certificate of live birth or similar authentic
documents in evidence. The victim and her mother, however, testified that she was only three years old at
the time of the rape. Cyra May's testimony goes:
q- Your name is Cyra Mae is that correct?

a- Yes, sir.

q- And you are 3 years old?

[48]
a- Yes, sir.

That of her mother goes:

Q How old was your daughter when there things happened?

A 3 and ½ years old.

Q When was she born?

[49]
A In Manila, May 10, 1992.

Because of the vast disparity between the alleged age (three years old) and the age sought to be proved
(below twelve years), the trial court would have had no difficulty ascertaining the victim's age from her
appearance. No reasonable doubt, therefore, exists that the second element of statutory rape, i.e., that the
victim was below twelve years of age at the time of the commission of the offense, is present.

Whether the victim was below seven years old, however, is another matter. Here, reasonable doubt exists.
A mature three and a half-year old can easily be mistaken for an underdeveloped seven-year old. The
appearance of the victim, as object evidence, cannot be accorded much weight and, following Pruna, the
testimony of the mother is, by itself, insufficient.

As it has not been established with moral certainty that Cyra May was below seven years old at the time
of the commission of the offense, accused-appellant cannot be sentenced to suffer the death penalty. Only
the penalty of reclusion perpetua can be imposed upon him.

In line with settled jurisprudence, the civil indemnity awarded by the trial court is increased to
P50,000.00. In addition, Cyra May is entitled to an award of moral damages in the amount of
P50,000.00.[50]

WHEREFORE, the Decision of the Regional Trial Court of Quezon City, Branch 96, is AFFIRMED with
MODIFICATION. Accused-appellant Ronnie Rullepa y Guinto is found GUILTY of Statutory Rape,
defined and punished by Article 335 (3) of the Revised Penal Code, as amended, and is sentenced to
suffer the penalty of reclusion perpetua. He is ordered to pay private complainant, Cyra May Buenafe y
Francisco, the amount of P50,000.00 as civil indemnity and P50,000.00 as moral damages.

SO ORDERED.

Davide, Jr., C.J., Bellosillo, Puno, Vitug, Mendoza, Panganiban, Quisumbing, Sandoval-Gutierrez,
Carpio, Austria-Martinez, Callejo, Sr., and Azcuna, JJ., concur.
Ynares-Santiago, and Corona, JJ., on leave.

[1] Records at 1.

[2] Id. at 12.

[3] Also appears in the records as Cyra "Mae."

[4] Col. Buenafe's first name is not indicated in the records.

[5] Exhibit "A."

[6] TSN, May 20, 1996 at 5-11.

[7] Exhibit "C."

[8] TSN, March 13, 1997 at 4-11.

[9] TSN, June 6, 1997 at 6-7.

[10] Records at 104.

[11] Rollo at 49-50.

[12] Records at 103.

[13] TSN, November 15, 1996 at 5-8.

[14] TSN, January 7, 1997 at 7-10.

[15] Id. at 6.

[16] TSN, May 20, 1996 at 6.

[17] TSN, January 7, 1997 at 11-12.

[18] Id. at 14.

[19] SALONGA, J.R., PHILIPPINE LAW ON EVIDENCE (3RD ED.) 193.

[20] People v Baygar, 318 SCRA 358 (1999).

[21] Records at 100.

[22] TSN, March 13, 1997 at 10.

[23] People v Samodio, G. R. Nos. 134139-40, February 15, 2002.

[24] People v Perez, 319 SCRA 622 (1999).

[25] People v Marcelo, 305 SCRA 105 (1999).

[26] TSN, January 7, 1997 at 11.

[27] People v Marcelo, supra, Note 25.

[28] People v Bato, 325 SCRA 671 (2000).

[29] AN ACT TO IMPOSE THE DEATH PENALTY ON CERTAIN HEINOUS CRIMES, AMENDING FOR
THAT PURPOSE THE REVISED PENAL CODE, AS AMENDED, OTHER SPECIAL PENAL LAWS, AND
FOR OTHER PURPOSES.
[30] G.R. No. 138471, October 10, 2002.

[31] Vide People v Bali-balita, 340 SCRA 450 (2000); People v Rivera, 362 SCRA 153 (2001); People v
Abaño, G.R. No. 142728, January 23, 2002.

[32] 329 SCRA 52 (2000).

[33] 311 SCRA 122 (1999).

[34] Vide People v Tundag, 342 SCRA 704 (2000); People v Liban, 345 SCRA 453 (2000); People v
Lachica, G.R. No. 143677, May 9, 2002.

[35] SEC. 3. Judicial notice, when hearing necessary. During the trial, the court, on its own initiative, or
on request of a party, may announce its intention to take judicial notice of any matter and allow the
parties to be heard thereon.

After the trial, and before judgment or an appeal, the proper court, on its own initiative or on request of a
party, may take judicial notice of any matter and allow the parties to be heard thereon if such matter is
decisive of a material issue in the case.

[36] 9 WIGMORE, J. H., A TREATISE ON THE ANGLO-AMERICAN SYSTEM OF EVIDENCE IN

TRIALS AT COMMON LAW (3RD ED.) §2565.

[37] Id. at §2566.

[38] 5 MORAN M.V., COMMENTS ON THE RULES OF COURT (1980 ED.) 38.

[39] SALONGA, supra, NOTE 19, at 89.

[40] Ibid. citing THAYER, CASES ON EVIDENCE (2nd) 720.

[41] 4 WIGMORE AT §1154.

[42] 2 WIGMORE AT §222, cited in People v Montalvo (482 P. 2d 205), Watson v State (140 N.E.2d
109), and State v Fries (17 N.W.2d 578).

[43] 32 C.J.S. Evidence §609.

[44] Ibid., cited in Watson v State, supra, Note 42.

[45] 36 Phil. 930 (1917). Vide also Tan Beko vs. Insular Collector of Customs, 26 Phil. 254 (1913); Lim
Cheng vs. Collector of Customs, 42 Phil. 876 (1920).

[46] 36 Phil. 246 (1917).

[47] People v Quezada, G. R. No. 135551-58, January 30, 2002.

[48] TSN, January 7, 1997 at 4.

[49]
[49] TSN, May 20, 1996 at 11.

[50] People v Rafales, 323 SCRA 13 (2000).

619 Phil. 155

THIRD DIVISION

[ G.R. No. 177809, October 16, 2009 ]

SPOUSES OMAR AND MOSHIERA LATIP, PETITIONERS, VS. ROSALIE PALAÑA CHUA,
RESPONDENT.

DECISION
NACHURA, J.:
Challenged in this petition for review on certiorari is the Court of Appeals (CA) Decision in CA-G.R. SP
[1]
No. 89300: (1) reversing the decision of the Regional Trial Court (RTC), Branch 274, Parañaque City
[2]
in Civil Case No. 04-0052; and (2) reinstating and affirming in toto the decision of the Metropolitan
[3]
Trial Court (MeTC), Branch 78, of the same city in Civil Case No. 2001-315.

First, we sift through the varying facts found by the different lower courts.

The facts parleyed by the MeTC show that respondent Rosalie Chua (Rosalie) is the owner of Roferxane
Building, a commercial building, located at No. 158 Quirino Avenue corner Redemptorist Road, Barangay
Baclaran, Parañaque City.

On July 6, 2001, Rosalie filed a complaint for unlawful detainer plus damages against petitioners,
Spouses Omar and Moshiera Latip (Spouses Latip). Rosalie attached to the complaint a contract of lease
over two cubicles in Roferxane Bldg., signed by Rosalie, as lessor, and by Spouses Latip, as lessees
thereof.

The contract of lease reads:

CONTRACT OF LEASE

KNOW ALL MEN BY THESE PRESENTS:

This Contract of Lease is entered into by and between:

ROSALIE PALAÑA CHUA, Filipino, of legal age, married with office at 2/F JOFERXAN
Building, F.B. Harrison St., Brgy. Baclaran, Parañaque City, and hereinafter referred to as the
LESSOR,

- and -

OMAR LATIEF marriage to MOSHIERA LATIEF, also both Filipino, of legal age with address
at 24 Anahan St. RGV Homes Parañaque City, and hereinafter referred to as the LESSEES.

WITNESSETH

1. That the LESSOR is the owner of the commercial building erected at the lot of the Toribio G.
Reyes Realty, Inc. situated at 158 Quirino Ave. corner Redemptorist Road, Barangay Baclaran in
Parañaque Ctiy;

st nd
2. That LESSOR hereby leases two (2) cubicles located at the 1 & 2 Floor, of said building with
an area of 56 square meters under the following terms and conditions, to wit:

a. That the monthly rental of the two (2) cubicles in PESOS, SIXTY THOUSAND (P60,000.00),
Philippine Currency. However, due to unstable power of the peso LESSEES agrees to a yearly
increase of ten (10%) percent of the monthly rental;

b. That any rental in-arrears shall be paid before the expiration of the contract to the LESSOR;

c. That LESSEES agree to pay their own water and electric consumptions in the said premises;

d. That the LESSEES shall not sub-let or make any alteration in the cubicles without a written
permission from the LESSOR. Provided, however, that at the termination of the Contract, the
lessee shall return the two cubicles in its original conditions at their expenses;

e. That the LESSEES agree to keep the cubicles in a safe and sanitary conditions, and shall not
keep any kinds of flammable or combustible materials.

f. That in case the LESSEES fail to pay the monthly rental every time it falls due or violate any of
the above conditions shall be enough ground to terminate this Contract of Lease. Provided,
further, that, if the LESSEES pre-terminate this Contract they shall pay the rentals for the
unused month or period by way of liquidated damages in favor of the LESSOR.

3. That this Contract of Lease is for six (6) yrs. only starting from December _____, 1999 or up to
December ______, 2005.

IN WITNESS WHEREOF, the parties have hereunto affixed their hands this ___th day of
December, 1999 at City of Manila, Philippines.

(sgd.) (sgd.)
ROSALIE PALAÑA-CHUA MOSHIERA LATIEF
LESSOR LESSEE

(sgd.)
OMAR LATIEF
LESSEE

SIGNED IN THE PRESENCE OF:

(sgd.) (sgd.)
1. Daisy C. Ramos 2. Ferdinand C. Chua

Republic of the Philippines)

C i t y o f M a n i l a )s.s.

ACKNOWLEDGMENT

BEFORE ME, a Notary Public for and in the City of Manila personally appeared the following
persons:

Rosalie P. Chua with CTC No. 05769706 at Parañaque City on 2/1/99; Moshiera Latief with CTC No.
12885654 at Parañaque City on 11/11/99; Omar Latief with CTC No. 12885653 Parañaque City on
Nov. 11, 1999.

known to me and to me known to be the same persons who executed this instrument consisting of
two (2) pages duly signed by them and the two (2) instrumental witnesses and acknowledged to me
that the same is their free and voluntarily acts and deeds.

IN FAITH AND TESTIMONY WHEREOF, I have hereunto affixed my hand and Notarial Seal this
____th day of December, 1999 at the City of Manila, Philippines.

Doc. No. _____ ATTY. CALIXTRO B. RAMOS

Page No. _____ NOTARY PUBLIC
Book No. LXV Until December 31, 2000
Series of 1999 PTR # 374145-1/11/99/-Mla.
IBP # 00262-Life Member[4]

A year after the commencement of the lease and with Spouses Latip already occupying the leased
cubicles, Rosalie, through counsel, sent the spouses a letter demanding payment of back rentals and
should they fail to do so, to vacate the leased cubicles. When Spouses Latip did not heed Rosalie's
demand, she instituted the aforesaid complaint.

In their Answer, Spouses Latip refuted Rosalie's claims. They averred that the lease of the two (2)
cubicles had already been paid in full as evidenced by receipts showing payment to Rosalie of the total
amount of P2,570,000.00. The three (3) receipts, in Rosalie's handwriting, read:
1. I received the amount of P2,000,000.00 (two million pesos) from [O]mar Latip & Moshi[e]ra
Latip for the payment of 2 cubicles located at 158 Quirino Ave. corner Redemptorist Rd.[,]
[5]
Baclaran P[arañ]aque City. ROFERLAND Bldg. with the terms 6 yrs. Contract.

P2,000,000.00 ______(sgd.)______
CHECK # 3767924 Rosalie Chua
FAR EAST BANK

______(sgd.)______
Ferdinand Chua

2. Received cash
P500,000.00
From Moshiera Latip

(sgd.)
12/10/99 Rosalie Chua
Received by

3. Received cash
P70,000.00 from
Moshiera Latip
12-11-99

____(sgd.)___
[6]
Received by:

Spouses Latip asseverated that sometime in October 1999, Rosalie offered for sale lease rights over two
(2) cubicles in Roferxane Bldg. Having in mind the brisk sale of goods during the Christmas season, they
readily accepted Rosalie's offer to purchase lease rights in Roferxane Bldg., which was still under
construction at the time. According to Spouses Latip, the immediate payment of P2,570,000.00 would be
used to finish construction of the building giving them first priority in the occupation of the finished
cubicles.

Thereafter, in December 1999, as soon as two (2) cubicles were finished, Spouses Latip occupied them
without waiting for the completion of five (5) other stalls. Spouses Latip averred that the contract of lease
they signed had been novated by their purchase of lease rights of the subject cubicles. Thus, they were
surprised to receive a demand letter from Rosalie's counsel and the subsequent filing of a complaint
against them.

The MeTC ruled in favor of Rosalie, viz.:

WHEREFORE, premises considered, the [Spouses Latip] and all persons claiming rights under
st nd
them are hereby ordered to VACATE the property subject of this case located at the 1 and 2
floors of a Roferxane Building situated at No. 158 Quirino Avenue corner Redemptorist Road,
Barangay Baclaran, Parañaque City. The [Spouses Latip] are also ordered to PAY [Rosalie] the
amount of SEVEN HUNDRED TWENTY THOUSAND PESOS (P720,000.00) as rent arrearages for
the period of December 1999 to December 2000 and thereafter to PAY [Rosalie] the amount of
SEVENTY TWO THOUSAND PESOS (P72,000.00) per month from January 2001 to December
2002, plus ten percent (10%) increase for each and every succeeding years thereafter as stipulated
in paragraph 2(a) of the Contract of Lease x x x, until the [Spouses Latip] have completely vacated
the leased premises subject of this lease. Finally[,] the [Spouses Latip] are hereby ordered to PAY
[Rosalie] the amount of TWENTY THOUSAND PESOS (P20,000.00) as attorney's fees and TWO
THOUSAND PESOS (P2,000.00) per [Rosalie's] appearance in Court as appearance fee and to PAY
the cost of this suit.

[Spouses Latip's] counterclaim is hereby DISMISSED for lack of merit.

[7]
SO ORDERED.

In stark contrast, the RTC reversed the MeTC and ruled in favor of Spouses Latip. The RTC did not give
credence to the contract of lease, ruling that it was not notarized and, in all other substantial aspects,
incomplete. Further on this point, the RTC noted that the contract of lease lacked: (1) the signature of
Ferdinand Chua, Rosalie's husband; (2) the signatures of Spouses Latip on the first page thereof; (3) the
specific dates for the term of the contract which only stated that the lease is for "six (6) y[ea]rs only
starting from December 1999 or up to December 2005"; (4) the exact date of execution of the document,
albeit the month of December and year 1999 are indicated therein; and (5) the provision for payment of
deposit or advance rental which is supposedly uncommon in big commercial lease contracts.

The RTC believed the claim of Spouses Latip that the contract of lease was modified and supplemented;
and the entire lease rentals for the two (2) cubicles for six (6) years had already been paid by Spouses
Latip in the amount of P2,570,000.00. As to Rosalie's claim that her receipt of P2,570,000.00 was
simply goodwill payment by prospective lessees to their lessor, and not payment for the purchase of lease
rights, the RTC shot this down and pointed out that, apart from her bare allegations, Rosalie did not
adduce evidence to substantiate this claim. On the whole, the RTC declared an existent lease between the
parties for a period of six (6) years, and already fully paid for by Spouses Latip. Thus, Spouses Latip could
not be ejected from the leased premises until expiration of the lease period.

The RTC disposed of the appeal, viz.:

WHEREFORE, all the foregoing considered, the appealed decision of the [MeTC] dated January 13,
2004 is reversed as judgment is hereby rendered for the [Spouses Latip] and against [Rosalie],
ordering the latter to pay the former -

(1) the sum of PhP1,000,000.00 as moral damages;

(2) the sum of PhP500,000.00 as exemplary damages;

(3) the sum of PhP250,000.00 plus PhP3,000.00 per court appearance as and for attorney's fees;
and

(4) costs of suit.

[8]
SO ORDERED.

In yet another turn of events, the CA, as previously mentioned, reversed the RTC and reinstated the
decision of the MeTC. The CA ruled that the contract of lease, albeit lacking the signature of Ferdinand
and not notarized, remained a complete and valid contract. As the MeTC had, the CA likewise found that
the alleged defects in the contract of lease did not render the contract ineffective. On the issue of whether
the amount of P2,570,000.00 merely constituted payment of goodwill money, the CA took judicial notice
of this common practice in the area of Baclaran, especially around the Redemptorist Church. According
to the appellate court, this judicial notice was bolstered by the Joint Sworn Declaration of the stallholders
at Roferxane Bldg. that they all had paid goodwill money to Rosalie prior to occupying the stalls thereat.
Thus, ruling on Rosalie's appeal, the CA disposed of the case:

WHEREFORE, in view of the foregoing, the Petition for Review is hereby GRANTED. The assailed
decision of RTC Parañaque City Branch 274 dated September 24, 2004 is hereby REVERSED and
SET ASIDE, and the January 13, 2004 decision of the MeTC is REINSTATED and AFFIRMED en
toto.

[9]
SO ORDERED.

Not surprisingly, Spouses Latip filed the present appeal.

The singular issue for our resolution is whether Spouses Latip should be ejected from the leased cubicles.

As previously adverted to, the CA, in ruling for Rosalie and upholding the ejectment of Spouses Latip,
took judicial notice of the alleged practice of prospective lessees in the Baclaran area to pay goodwill
money to the lessor.

We disagree.

Sections 1 and 2 of Rule 129 of the Rules of Court declare when the taking of judicial notice is mandatory
or discretionary on the courts, thus:
SECTION 1. Judicial notice, when mandatory. - A court shall take judicial notice, without the
introduction of evidence, of the existence and territorial extent of states, their political history,
forms of government and symbols of nationality, the law of nations, the admiralty and maritime
courts of the world and their seals, the political constitution and history of the Philippines, the
official acts of the legislative, executive and judicial departments of the Philippines, the laws of
nature, the measure of time, and the geographical divisions.

SEC. 2. Judicial notice, when discretionary. - A court may take judicial notice of matters which are
of public knowledge, or are capable of unquestionable demonstration or ought to be known to
judges because of their judicial functions.

On this point, State Prosecutors v. Muro[10] is instructive:

I. The doctrine of judicial notice rests on the wisdom and discretion of the courts. The power to
take judicial notice is to be exercised by courts with caution; care must be taken that
the requisite notoriety exists; and every reasonable doubt on the subject should be
promptly resolved in the negative.

Generally speaking, matters of judicial notice have three material requisites: (1) the matter must be
one of common and general knowledge; (2) it must be well and authoritatively settled and not
doubtful or uncertain; and (3) it must be known to be within the limits of the jurisdiction of the
court. The principal guide in determining what facts may be assumed to be judicially
known is that of notoriety. Hence, it can be said that judicial notice is limited to facts
evidenced by public records and facts of general notoriety.

To say that a court will take judicial notice of a fact is merely another way of saying that the usual
form of evidence will be dispensed with if knowledge of the fact can be otherwise acquired. This is
because the court assumes that the matter is so notorious that it will not be disputed. But judicial
notice is not judicial knowledge. The mere personal knowledge of the judge is not the
judicial knowledge of the court, and he is not authorized to make his individual
knowledge of a fact, not generally or professionally known, the basis of his action.
Judicial cognizance is taken only of those matters which are "commonly" known.

Things of "common knowledge," of which courts take judicial notice, may be matters coming to the
knowledge of men generally in the course of the ordinary experiences of life, or they may be matters
which are generally accepted by mankind as true and are capable of ready and unquestioned
demonstration. Thus, facts which are universally known, and which may be found in encyclopedias,
dictionaries or other publications, are judicially noticed, provided they are of such universal
notoriety and so generally understood that they may be regarded as forming part of the common
[11]
knowledge of every person.

We reiterated the requisite of notoriety for the taking of judicial notice in the recent case of Expertravel
& Tours, Inc. v. Court of Appeals,[12] which cited State Prosecutors:
Generally speaking, matters of judicial notice have three material requisites: (1) the matter must be
one of common and general knowledge; (2) it must be well and authoritatively settled and not
doubtful or uncertain; and (3) it must be known to be within the limits of the jurisdiction of the
court. The principal guide in determining what facts may be assumed to be judicially known is that
of notoriety. Hence, it can be said that judicial notice is limited to facts evidenced by public records
and facts of general notoriety. Moreover, a judicially noticed fact must be one not subject to a
reasonable dispute in that it is either: (1) generally known within the territorial jurisdiction of the
trial court; or (2) capable of accurate and ready determination by resorting to sources whose
accuracy cannot reasonably be questionable.

Things of "common knowledge," of which courts take judicial notice, may be matters coming to the
knowledge of men generally in the course of the ordinary experiences of life, or they may be matters
which are generally accepted by mankind as true and are capable of ready and unquestioned
demonstration. Thus, facts which are universally known, and which may be found in encyclopedias,
dictionaries or other publications, are judicially noticed, provided, they are such of universal
notoriety and so generally understood that they may be regarded as forming part of the common
knowledge of every person. As the common knowledge of man ranges far and wide, a wide variety of
particular facts have been judicially noticed as being matters of common knowledge. But a court
cannot take judicial notice of any fact which, in part, is dependent on the existence or non-
existence of a fact of which the court has no constructive knowledge.

From the foregoing provisions of law and our holdings thereon, it is apparent that the matter which the
appellate court took judicial notice of does not meet the requisite of notoriety. To begin with, only the CA
took judicial notice of this supposed practice to pay goodwill money to the lessor in the Baclaran area.
Neither the MeTC nor the RTC, with the former even ruling in favor of Rosalie, found that the practice
was of "common knowledge" or notoriously known.

We note that the RTC specifically ruled that Rosalie, apart from her bare allegation, adduced no evidence
to prove her claim that the amount of P2,570,000.00 simply constituted the payment of goodwill money.
Subsequently, Rosalie attached an annex to her petition for review before the CA, containing a joint
declaration under oath by other stallholders in Roferxane Bldg. that they had paid goodwill money to
Rosalie as their lessor. On this score, we emphasize that the reason why our rules on evidence provide for
matters that need not be proved under Rule 129, specifically on judicial notice, is to dispense with the
taking of the usual form of evidence on a certain matter so notoriously known, it will not be disputed by
the parties.

However, in this case, the requisite of notoriety is belied by the necessity of attaching documentary
evidence, i.e., the Joint Affidavit of the stallholders, to Rosalie's appeal before the CA. In short, the
alleged practice still had to be proven by Rosalie; contravening the title itself of Rule 129 of the Rules of
Court - What need not be proved.

Apparently, only that particular division of the CA had knowledge of the practice to pay goodwill money
in the Baclaran area. As was held in State Prosecutors, justices and judges alike ought to be reminded
that the power to take judicial notice must be exercised with caution and every reasonable doubt on the
subject should be ample reason for the claim of judicial notice to be promptly resolved in the negative.

Ultimately, on the issue of whether Spouses Latip ought to be ejected from the leased cubicles, what
remains in evidence is the documentary evidence signed by both parties - the contract of lease and the
receipts evidencing payment of P2,570,000.00.

We need not be unduly detained by the issue of which documents were executed first or if there was a
novation of the contract of lease. As had been found by the RTC, the lease contract and the receipts for
the amount of P2,570,000.00 can be reconciled or harmonized. The RTC declared:

st nd
Definitely, the parties entered into a lease agreement over two (2) cubicles of the 1 and 2 floors
of Roferxane (Roferland) Building, a commercial building located at 158 Quirino Avenue, corner
Redemptorist Road, Baclaran, Parañaque City and belonging to [Rosalie]. The lease agreement is for
a term of six (6) years commencing in December 1999 up to December 2005. This agreement was
embodied in a Contract of Lease x x x. The terms of this lease contract, however, are modified or
supplemented by another agreement between the parties executed and or entered into in or about
[13]
the time of execution of the lease contract, which exact date of execution of the latter is unclear.

We agree with the RTC's holding only up to that point. There exists a lease agreement between the parties
as set forth in the contract of lease which is a complete document. It need not be signed by Ferdinand
Chua as he likewise did not sign the other two receipts for P500,000.00 and P70,000.00, respectively,
which contained only the signature of Rosalie. Besides, it is undisputed that Rosalie owns and leases the
stalls in Roferxane Bldg.; thus, doing away with the need for her husband's consent. The findings of the
three lower courts concur on this fact.

The contract of lease has a period of six (6) years commencing in December 1999. This fact is again
buttressed by Spouses Latip's admission that they occupied the property forthwith in December 1999,
bearing in mind the brisk sales during the holiday season.

On the conflicting interpretations by the lower courts of the receipts amounting to P2,570,000.00, we
hold that the practice of payment of goodwill money in the Baclaran area is an inadequate subject of
judicial notice. Neither was Rosalie able to provide sufficient evidence that, apart from the belatedly
submitted Joint Affidavit of the stallholders of Roferxane Bldg., the said amount was simply for the
payment of goodwill money, and not payment for advance rentals by Spouses Latip.

In interpreting the evidence before us, we are guided by the Civil Code provisions on interpretation of
contracts, to wit:

Art. 1371. In order to judge the intention of the contracting parties, their contemporaneous and
subsequent acts shall be principally considered.

Art. 1372. However general the terms of a contract may be, they shall not be understood to
comprehend things that are distinct and cases that are different from those which the parties
intended to agree.

Art. 1373. If some stipulation of any contract should admit of several meanings, it shall be
understood as bearing that import which is most adequate to render it effectual.

The RTC was already on the right track when it declared that the receipts for P2,570,000.00 modified or
supplemented the contract of lease. However, it made a quantum leap when it ruled that the amount was
payment for rentals of the two (2) cubicles for the entire six-year period. We cannot subscribe to this
finding. To obviate confusion and for clarity, the contents of the receipts, already set forth above, are
again reproduced:

1. I received the amount of P2,000,000.00 (two million pesos) from [O]mar Latip & Moshi[e]ra
Latip for the payment of 2 cubicles located at 158 Quirino Ave. corner Redemptorist Rd.[,]
Baclaran P[arañ]aque City. ROFERLAND Bldg. with the terms 6 yrs. Contract.

P2,000,000.00 ______(sgd.)______
CHECK # 3767924 Rosalie Chua
FAR EAST BANK

______(sgd.)______
Ferdinand Chua

2. Received cash
P500,000.00
From Moshiera Latip

(sgd.)
12/10/99 Rosalie Chua
Received by

3. Received cash
P70,000.00 from
Moshiera Latip
12-11-99

____(sgd.)___
[14]
Received by:

There is nothing on the receipts and on record that the payment and receipt of P2,570,000.00 referred to
full payment of rentals for the whole period of the lease. All three receipts state Rosalie's receipt of cash
in varying amounts. The first receipt for P2,000,000.00 did state payment for two (2) cubicles, but this
cannot mean full payment of rentals for the entire lease period when there are no words to that effect.
Further, two receipts were subsequently executed pointing to the obvious fact that the P2,000,000.00 is
not for full payment of rentals. Thus, since the contract of lease remained operative, we find that
Rosalie's receipt of the monies should be considered as advanced rentals on the leased cubicles. This
conclusion is bolstered by the fact that Rosalie demanded payment of the lease rentals only in 2000, a
full year after the commencement of the lease.

Finally, we note that the lease ended in 2005. Consequently, Spouses Latip can be ejected from the leased
premises. They are liable to Rosalie for unpaid rentals on the lease of the two (2) cubicles in accordance
with the stipulations on rentals in the Contract of Lease. However, the amount of P2,570,000.00,
covering advance rentals, must be deducted from this liability of Spouses Latip to Rosalie.

WHEREFORE, premises considered, the petition is hereby GRANTED. The decision of the Court of
Appeals in CA-G.R. SP No. 89300 is REVERSED. The petitioners, spouses Omar and Moshiera Latip,
are liable to respondent Rosalie Chua for unpaid rentals minus the amount of P2,570,000.00 already
received by her as advance rentals. No costs.

SO ORDERED.

Carpio Morales*, Chico-Nazario**, (Acting Chairperson), Peralta, and Abad***, JJ., cocnur.

* Additional member vice Associate Justice Antonio T. Carpio per Special Order No. 744 dated October
13, 2009.

** Acting Chairperson vice Associate Justice Antonio T. Carpio per Special Order No. 743 dated October
13, 2009.

*** Additional member vice Associate Justice Presbitero J. Velasco, Jr. per Special Order No. 753 dated
October 13, 2009.

[1] Penned by Associate Justice Lucenito N. Tagle (retired), with Associate Justices Rodrigo V. Cosico
(retired) and Regalado E. Maambong (retired), concurring; rollo, pp. 43-56.

[2] Penned by Presiding Judge Fortunito L. Madrona, CA rollo. pp. 36-43.

[3] Penned by Presiding Judge Jansen R. Rodriguez, CA rollo, pp. 44-49.

[4] CA rollo, pp. 72-73.

[5] Except for this designation in the receipt, the building where the leased cubicles are located is referred
to in the records as Roferxane Bldg.

[6] CA rollo, pp. 99, 102, 103.

[7] Id. at 48-49.

[8] Id. at 42.

[9] Rollo, p. 55.

[10] A.M. No. RTJ-92-876, September 19, 1994, 236 SCRA 505, 521-522.

[11] Emphasis supplied.

[12] G.R. No. 152392, May 26, 2005, 459 SCRA 147, 162.

[13] CA rollo, p. 40.

[14] Supra note 6.

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Republic of the Philippines

SUPREME COURT
Manila

EN BANC

July 30, 1979

PETITION FOR AUTHORITY TO CONTINUE USE OF THE FIRM NAME "SYCIP, SALAZAR, FELICIANO,
HERNANDEZ & CASTILLO." LUCIANO E. SALAZAR, FLORENTINO P. FELICIANO, BENILDO G.
HERNANDEZ. GREGORIO R. CASTILLO. ALBERTO P. SAN JUAN, JUAN C. REYES. JR., ANDRES G.
GATMAITAN, JUSTINO H. CACANINDIN, NOEL A. LAMAN, ETHELWOLDO E. FERNANDEZ, ANGELITO C.
IMPERIO, EDUARDO R. CENIZA, TRISTAN A. CATINDIG, ANCHETA K. TAN, and ALICE V. PESIGAN,
petitioners.

IN THE MATTER OF THE PETITION FOR AUTHORITY TO CONTINUE USE OF THE FIRM NAME "OZAETA,
ROMULO, DE LEON, MABANTA & REYES." RICARDO J. ROMULO, BENJAMIN M. DE LEON, ROMAN
MABANTA, JR., JOSE MA, REYES, JESUS S. J. SAYOC, EDUARDO DE LOS ANGELES, and JOSE F.
BUENAVENTURA, petitioners.

RESOLUTION

MELENCIO-HERRERA, J.: ñé+.£ªwph!1

Two separate Petitions were filed before this Court 1) by the surviving partners of Atty. Alexander Sycip, who died
on May 5, 1975, and 2) by the surviving partners of Atty. Herminio Ozaeta, who died on February 14, 1976, praying
that they be allowed to continue using, in the names of their firms, the names of partners who had passed away. In
the Court's Resolution of September 2, 1976, both Petitions were ordered consolidated.

Petitioners base their petitions on the following arguments:

1. Under the law, a partnership is not prohibited from continuing its business under a firm name which includes the
name of a deceased partner; in fact, Article 1840 of the Civil Code explicitly sanctions the practice when it provides
in the last paragraph that:têñ.£îhqwâ£

The use by the person or partnership continuing the business of the partnership name, or the name of
a deceased partner as part thereof, shall not of itself make the individual property of the deceased
partner liable for any debts contracted by such person or partnership. 1

2. In regulating other professions, such as accountancy and engineering, the legislature has authorized the adoption
of firm names without any restriction as to the use, in such firm name, of the name of a deceased partner; 2 the
legislative authorization given to those engaged in the practice of accountancy — a profession requiring the same
degree of trust and confidence in respect of clients as that implicit in the relationship of attorney and client — to
acquire and use a trade name, strongly indicates that there is no fundamental policy that is offended by the
continued use by a firm of professionals of a firm name which includes the name of a deceased partner, at least
where such firm name has acquired the characteristics of a "trade name." 3

3. The Canons of Professional Ethics are not transgressed by the continued use of the name of a deceased partner
in the firm name of a law partnership because Canon 33 of the Canons of Professional Ethics adopted by the
American Bar Association declares that: têñ.£îhqwâ£

... The continued use of the name of a deceased or former partner when permissible by local custom, is
not unethical but care should be taken that no imposition or deception is practiced through this use. ... 4

4. There is no possibility of imposition or deception because the deaths of their respective deceased partners were
well-publicized in all newspapers of general circulation for several days; the stationeries now being used by them
carry new letterheads indicating the years when their respective deceased partners were connected with the firm;
petitioners will notify all leading national and international law directories of the fact of their respective deceased
partners' deaths. 5

5. No local custom prohibits the continued use of a deceased partner's name in a professional firm's name; 6 there is
no custom or usage in the Philippines, or at least in the Greater Manila Area, which recognizes that the name of a
law firm necessarily Identifies the individual members of the firm. 7

6. The continued use of a deceased partner's name in the firm name of law partnerships has been consistently
allowed by U.S. Courts and is an accepted practice in the legal profession of most countries in the world.8

The question involved in these Petitions first came under consideration by this Court in 1953 when a law firm in
Cebu (the Deen case) continued its practice of including in its firm name that of a deceased partner, C.D. Johnston.
The matter was resolved with this Court advising the firm to desist from including in their firm designation the name
of C. D. Johnston, who has long been dead."

The same issue was raised before this Court in 1958 as an incident in G. R. No. L-11964, entitled Register of Deeds
of Manila vs. China Banking Corporation. The law firm of Perkins & Ponce Enrile moved to intervene as amicus
curiae. Before acting thereon, the Court, in a Resolution of April 15, 1957, stated that it "would like to be informed
why the name of Perkins is still being used although Atty. E. A. Perkins is already dead." In a Manifestation dated
May 21, 1957, the law firm of Perkins and Ponce Enrile, raising substantially the same arguments as those now
being raised by petitioners, prayed that the continued use of the firm name "Perkins & Ponce Enrile" be held proper.

On June 16, 1958, this Court resolved: têñ.£îhqwâ£

After carefully considering the reasons given by Attorneys Alfonso Ponce Enrile and Associates for
their continued use of the name of the deceased E. G. Perkins, the Court found no reason to depart
from the policy it adopted in June 1953 when it required Attorneys Alfred P. Deen and Eddy A. Deen of
Cebu City to desist from including in their firm designation, the name of C. D. Johnston, deceased. The
Court believes that, in view of the personal and confidential nature of the relations between attorney
and client, and the high standards demanded in the canons of professional ethics, no practice should
be allowed which even in a remote degree could give rise to the possibility of deception. Said attorneys
are accordingly advised to drop the name "PERKINS" from their firm name.

Petitioners herein now seek a re-examination of the policy thus far enunciated by the Court.

The Court finds no sufficient reason to depart from the rulings thus laid down.

A. Inasmuch as "Sycip, Salazar, Feliciano, Hernandez and Castillo" and "Ozaeta, Romulo, De Leon, Mabanta and
Reyes" are partnerships, the use in their partnership names of the names of deceased partners will run counter to
Article 1815 of the Civil Code which provides: têñ.£îhqwâ£

Art. 1815. Every partnership shall operate under a firm name, which may or may not include the name
of one or more of the partners.

Those who, not being members of the partnership, include their names in the firm name, shall be
subject to the liability, of a partner.

It is clearly tacit in the above provision that names in a firm name of a partnership must either be those of living
partners and. in the case of non-partners, should be living persons who can be subjected to liability. In fact, Article
1825 of the Civil Code prohibits a third person from including his name in the firm name under pain of assuming the
liability of a partner. The heirs of a deceased partner in a law firm cannot be held liable as the old members to the
creditors of a firm particularly where they are non-lawyers. Thus, Canon 34 of the Canons of Professional Ethics
"prohibits an agreement for the payment to the widow and heirs of a deceased lawyer of a percentage, either gross
or net, of the fees received from the future business of the deceased lawyer's clients, both because the recipients of
such division are not lawyers and because such payments will not represent service or responsibility on the part of
the recipient. " Accordingly, neither the widow nor the heirs can be held liable for transactions entered into after the
death of their lawyer-predecessor. There being no benefits accruing, there ran be no corresponding liability.

Prescinding the law, there could be practical objections to allowing the use by law firms of the names of deceased
partners. The public relations value of the use of an old firm name can tend to create undue advantages and
disadvantages in the practice of the profession. An able lawyer without connections will have to make a name for
himself starting from scratch. Another able lawyer, who can join an old firm, can initially ride on that old firm's
reputation established by deceased partners.

B. In regards to the last paragraph of Article 1840 of the Civil Code cited by petitioners, supra, the first factor to
consider is that it is within Chapter 3 of Title IX of the Code entitled "Dissolution and Winding Up." The Article
primarily deals with the exemption from liability in cases of a dissolved partnership, of the individual property of the
deceased partner for debts contracted by the person or partnership which continues the business using the
partnership name or the name of the deceased partner as part thereof. What the law contemplates therein is a hold-
over situation preparatory to formal reorganization.

Secondly, Article 1840 treats more of a commercial partnership with a good will to protect rather than of a
professional partnership, with no saleable good will but whose reputation depends on the personal qualifications of
its individual members. Thus, it has been held that a saleable goodwill can exist only in a commercial partnership
and cannot arise in a professional partnership consisting of lawyers. 9 têñ.£îhqwâ£

As a general rule, upon the dissolution of a commercial partnership the succeeding partners or parties
have the right to carry on the business under the old name, in the absence of a stipulation forbidding it,
(s)ince the name of a commercial partnership is a partnership asset inseparable from the good will of
the firm. ... (60 Am Jur 2d, s 204, p. 115) (Emphasis supplied)

On the other hand, têñ.£îhqwâ£

... a professional partnership the reputation of which depends or; the individual skill of the members,
such as partnerships of attorneys or physicians, has no good win to be distributed as a firm asset on its
dissolution, however intrinsically valuable such skill and reputation may be, especially where there is no
provision in the partnership agreement relating to good will as an asset. ... (ibid, s 203, p. 115)
(Emphasis supplied)

C. A partnership for the practice of law cannot be likened to partnerships formed by other professionals or for
business. For one thing, the law on accountancy specifically allows the use of a trade name in connection with the
practice of accountancy.10 têñ.£îhqwâ£

A partnership for the practice of law is not a legal entity. It is a mere relationship or association for a
particular purpose. ... It is not a partnership formed for the purpose of carrying on trade or business or
of holding property." 11 Thus, it has been stated that "the use of a nom de plume, assumed or trade
name in law practice is improper. 12

The usual reason given for different standards of conduct being applicable to the practice of law from
those pertaining to business is that the law is a profession.

Dean Pound, in his recently published contribution to the Survey of the Legal Profession, (The Lawyer
from Antiquity to Modern Times, p. 5) defines a profession as "a group of men pursuing a learned art as
a common calling in the spirit of public service, — no less a public service because it may incidentally
be a means of livelihood."

xxx xxx xxx

Primary characteristics which distinguish the legal profession from business are:

1. A duty of public service, of which the emolument is a byproduct, and in which one may attain the
highest eminence without making much money.

2. A relation as an "officer of court" to the administration of justice involving thorough sincerity, integrity,
and reliability.

3. A relation to clients in the highest degree fiduciary.

4. A relation to colleagues at the bar characterized by candor, fairness, and unwillingness to resort to
current business methods of advertising and encroachment on their practice, or dealing directly with
their clients. 13

"The right to practice law is not a natural or constitutional right but is in the nature of a privilege or franchise. 14 It is
limited to persons of good moral character with special qualifications duly ascertained and certified. 15 The right does
not only presuppose in its possessor integrity, legal standing and attainment, but also the exercise of a special
privilege, highly personal and partaking of the nature of a public trust." 16

D. Petitioners cited Canon 33 of the Canons of Professional Ethics of the American Bar Association" in support of
their petitions.

It is true that Canon 33 does not consider as unethical the continued use of the name of a deceased or former
partner in the firm name of a law partnership when such a practice is permissible by local custom but the Canon
warns that care should be taken that no imposition or deception is practiced through this use.

It must be conceded that in the Philippines, no local custom permits or allows the continued use of a deceased or
former partner's name in the firm names of law partnerships. Firm names, under our custom, Identify the more
active and/or more senior members or partners of the law firm. A glimpse at the history of the firms of petitioners
and of other law firms in this country would show how their firm names have evolved and changed from time to time
as the composition of the partnership changed. têñ.£îhqwâ£

The continued use of a firm name after the death of one or more of the partners designated by it is
proper only where sustained by local custom and not where by custom this purports to Identify the
active members. ...

There would seem to be a question, under the working of the Canon, as to the propriety of adding the
name of a new partner and at the same time retaining that of a deceased partner who was never a
partner with the new one. (H.S. Drinker, op. cit., supra, at pp. 207208) (Emphasis supplied).

The possibility of deception upon the public, real or consequential, where the name of a deceased partner continues
to be used cannot be ruled out. A person in search of legal counsel might be guided by the familiar ring of a
distinguished name appearing in a firm title.

E. Petitioners argue that U.S. Courts have consistently allowed the continued use of a deceased partner's name in
the firm name of law partnerships. But that is so because it is sanctioned by custom.

In the case of Mendelsohn v. Equitable Life Assurance Society (33 N.Y.S. 2d 733) which petitioners Salazar, et al.
quoted in their memorandum, the New York Supreme Court sustained the use of the firm name Alexander & Green
even if none of the present ten partners of the firm bears either name because the practice was sanctioned by
custom and did not offend any statutory provision or legislative policy and was adopted by agreement of the parties.
The Court stated therein: têñ.£îhqwâ£

The practice sought to be proscribed has the sanction of custom and offends no statutory provision or
legislative policy. Canon 33 of the Canons of Professional Ethics of both the American Bar Association
and the New York State Bar Association provides in part as follows: "The continued use of the name of
a deceased or former partner, when permissible by local custom is not unethical, but care should be
taken that no imposition or deception is practiced through this use." There is no question as to local
custom. Many firms in the city use the names of deceased members with the approval of other
attorneys, bar associations and the courts. The Appellate Division of the First Department has
considered the matter and reached The conclusion that such practice should not be prohibited.
(Emphasis supplied)

xxx xxx xxx

Neither the Partnership Law nor the Penal Law prohibits the practice in question. The use of the firm
name herein is also sustainable by reason of agreement between the partners. 18

Not so in this jurisdiction where there is no local custom that sanctions the practice. Custom has been defined as a
rule of conduct formed by repetition of acts, uniformly observed (practiced) as a social rule, legally binding and
obligatory. 19 Courts take no judicial notice of custom. A custom must be proved as a fact, according to the rules of
evidence. 20 A local custom as a source of right cannot be considered by a court of justice unless such custom is
properly established by competent evidence like any other fact. 21 We find such proof of the existence of a local
custom, and of the elements requisite to constitute the same, wanting herein. Merely because something is done as
a matter of practice does not mean that Courts can rely on the same for purposes of adjudication as a juridical
custom. Juridical custom must be differentiated from social custom. The former can supplement statutory law or be
applied in the absence of such statute. Not so with the latter.

Moreover, judicial decisions applying or interpreting the laws form part of the legal system. 22 When the Supreme
Court in the Deen and Perkins cases issued its Resolutions directing lawyers to desist from including the names of
deceased partners in their firm designation, it laid down a legal rule against which no custom or practice to the
contrary, even if proven, can prevail. This is not to speak of our civil law which clearly ordains that a partnership is
dissolved by the death of any partner. 23 Custom which are contrary to law, public order or public policy shall not be
countenanced. 24

The practice of law is intimately and peculiarly related to the administration of justice and should not be considered
like an ordinary "money-making trade." têñ.£îhqwâ£

... It is of the essence of a profession that it is practiced in a spirit of public service. A trade ... aims
primarily at personal gain; a profession at the exercise of powers beneficial to mankind. If, as in the era
of wide free opportunity, we think of free competitive self assertion as the highest good, lawyer and
grocer and farmer may seem to be freely competing with their fellows in their calling in order each to
acquire as much of the world's good as he may within the allowed him by law. But the member of a
profession does not regard himself as in competition with his professional brethren. He is not bartering
his services as is the artisan nor exchanging the products of his skill and learning as the farmer sells
wheat or corn. There should be no such thing as a lawyers' or physicians' strike. The best service of
the professional man is often rendered for no equivalent or for a trifling equivalent and it is his pride to
do what he does in a way worthy of his profession even if done with no expectation of reward, This
spirit of public service in which the profession of law is and ought to be exercised is a prerequisite of
sound administration of justice according to law. The other two elements of a profession, namely,
organization and pursuit of a learned art have their justification in that they secure and maintain that
spirit. 25
In fine, petitioners' desire to preserve the Identity of their firms in the eyes of the public must bow to legal and ethical
impediment.

ACCORDINGLY, the petitions filed herein are denied and petitioners advised to drop the names "SYCIP" and
"OZAETA" from their respective firm names. Those names may, however, be included in the listing of individuals
who have been partners in their firms indicating the years during which they served as such.

SO ORDERED.

Teehankee, Concepcion, Jr., Santos, Fernandez, Guerrero and De Castro, JJ., concur

Fernando, C.J. and Abad Santos, J., took no part.

Separate Opinions

FERNANDO, C.J., concurring:

The petitions are denied, as there are only four votes for granting them, seven of the Justices being of the contrary
view, as explained in the plurality opinion of Justice Ameurfina Melencio-Herrera. It is out of delicadeza that the
undersigned did not participate in the disposition of these petitions, as the law office of Sycip, Salazar, Feliciano,
Hernandez and Castillo started with the partnership of Quisumbing, Sycip, and Quisumbing, the senior partner, the
late Ramon Quisumbing, being the father-in-law of the undersigned, and the most junior partner then, Norberto J.
Quisumbing, being his brother- in-law. For the record, the undersigned wishes to invite the attention of all
concerned, and not only of petitioners, to the last sentence of the opinion of Justice Ameurfina Melencio-Herrera:
'Those names [Sycip and Ozaeta] may, however, be included in the listing of individuals wtes

AQUINO, J., dissenting:

I dissent. The fourteen members of the law firm, Sycip, Salazar, Feliciano, Hernandez & Castillo, in their petition of
June 10, 1975, prayed for authority to continue the use of that firm name, notwithstanding the death of Attorney
Alexander Sycip on May 5, 1975 (May he rest in peace). He was the founder of the firm which was originally known
as the Sycip Law Office.

On the other hand, the seven surviving partners of the law firm, Ozaeta, Romulo, De Leon, Mabanta & Reyes, in
their petition of August 13, 1976, prayed that they be allowed to continue using the said firm name notwithstanding
the death of two partners, former Justice Roman Ozaeta and his son, Herminio, on May 1, 1972 and February 14,
1976, respectively.

They alleged that the said law firm was a continuation of the Ozaeta Law Office which was established in 1957 by
Justice Ozaeta and his son and that, as to the said law firm, the name Ozaeta has acquired an institutional and
secondary connotation.

Article 1840 of the Civil Code, which speaks of the use by the partnership of the name of a deceased partner as part
of the partnership name, is cited to justify the petitions. Also invoked is the canon that the continued use by a law
firm of the name of a deceased partner, "when permissible by local custom, is not unethical" as long as "no
imposition or deception is practised through this use" (Canon 33 of the Canons of Legal Ethics).

I am of the opinion that the petition may be granted with the condition that it be indicated in the letterheads of the
two firms (as the case may be) that Alexander Sycip, former Justice Ozaeta and Herminio Ozaeta are dead or the
period when they served as partners should be stated therein.

Obviously, the purpose of the two firms in continuing the use of the names of their deceased founders is to retain the
clients who had customarily sought the legal services of Attorneys Sycip and Ozaeta and to benefit from the
goodwill attached to the names of those respected and esteemed law practitioners. That is a legitimate motivation.

The retention of their names is not illegal per se. That practice was followed before the war by the law firm of James
Ross. Notwithstanding the death of Judge Ross the founder of the law firm of Ross, Lawrence, Selph and
Carrascoso, his name was retained in the firm name with an indication of the year when he died. No one
complained that the retention of the name of Judge Ross in the firm name was illegal or unethical.

# Separate Opinions

FERNANDO, C.J., concurring:

The petitions are denied, as there are only four votes for granting them, seven of the Justices being of the contrary
view, as explained in the plurality opinion of Justice Ameurfina Melencio-Herrera. It is out of delicadeza that the
undersigned did not participate in the disposition of these petitions, as the law office of Sycip, Salazar, Feliciano,
Hernandez and Castillo started with the partnership of Quisumbing, Sycip, and Quisumbing, the senior partner, the
late Ramon Quisumbing, being the father-in-law of the undersigned, and the most junior partner then, Norberto J.
Quisumbing, being his brother- in-law. For the record, the undersigned wishes to invite the attention of all
concerned, and not only of petitioners, to the last sentence of the opinion of Justice Ameurfina Melencio-Herrera:
'Those names [Sycip and Ozaeta] may, however, be included in the listing of individuals wtes

AQUINO, J., dissenting:

I dissent. The fourteen members of the law firm, Sycip, Salazar, Feliciano, Hernandez & Castillo, in their petition of
June 10, 1975, prayed for authority to continue the use of that firm name, notwithstanding the death of Attorney
Alexander Sycip on May 5, 1975 (May he rest in peace). He was the founder of the firm which was originally known
as the Sycip Law Office.

On the other hand, the seven surviving partners of the law firm, Ozaeta, Romulo, De Leon, Mabanta & Reyes, in
their petition of August 13, 1976, prayed that they be allowed to continue using the said firm name notwithstanding
the death of two partners, former Justice Roman Ozaeta and his son, Herminio, on May 1, 1972 and February 14,
1976, respectively.

They alleged that the said law firm was a continuation of the Ozaeta Law Office which was established in 1957 by
Justice Ozaeta and his son and that, as to the said law firm, the name Ozaeta has acquired an institutional and
secondary connotation.

Article 1840 of the Civil Code, which speaks of the use by the partnership of the name of a deceased partner as part
of the partnership name, is cited to justify the petitions. Also invoked is the canon that the continued use by a law
firm of the name of a deceased partner, "when permissible by local custom, is not unethical" as long as "no
imposition or deception is practised through this use" (Canon 33 of the Canons of Legal Ethics).

I am of the opinion that the petition may be granted with the condition that it be indicated in the letterheads of the
two firms (as the case may be) that Alexander Sycip, former Justice Ozaeta and Herminio Ozaeta are dead or the
period when they served as partners should be stated therein.

Obviously, the purpose of the two firms in continuing the use of the names of their deceased founders is to retain the
clients who had customarily sought the legal services of Attorneys Sycip and Ozaeta and to benefit from the
goodwill attached to the names of those respected and esteemed law practitioners. That is a legitimate motivation.

The retention of their names is not illegal per se. That practice was followed before the war by the law firm of James
Ross. Notwithstanding the death of Judge Ross the founder of the law firm of Ross, Lawrence, Selph and
Carrascoso, his name was retained in the firm name with an indication of the year when he died. No one
complained that the retention of the name of Judge Ross in the firm name was illegal or unethical.

#Footnotes têñ.£îhqwâ£

1 See Memorandum of Salazar, et al., p. 5: see also Petition of Romulo, et al., p. 3.

2 Citing Sec, 16-A, Public Act No. 3105, as amended by Commonwealth Act No. 342; Sec. 39,
Commonwealth Act No. 294; Sec. 23, Republic Act No. 318; Sec. 39, Republic Act No. 184.

3 Memorandum of Salazar, et al., pp. 7-8.

4 Memorandum of Salazar, et al., pp. 8-10; Petition of Romulo, et al., pp. 3- 4.

5 Memorandum of Salazar, et al., p. 13; Petition of Romulo, et al., p. 4.

6 Petition of Romulo, et al., p. 4.

7 Memorandum of Salazar, et al., p. 11.

8 Memorandum of Salazar, et al., pp. 6-7 and pp. 16-18; Petition of Romulo. et al., p, 5.

9 Seddal vs. Keating, 8 App. Div. 2d 44, 185 NYS 2d 630, affd 7 NY 2d 846, 196 NYS 2d 986, 164 NE
2d 860.

10 Section 16-A, Commonwealth Act No. 342.

11 In re Crawford's Estate, 184 NE 2d 779, 783.

12 H.S. Drinker, Legal Ethics (1953), p. 206; see also Canon 33, par. 2, Canons of Professional Ethics.

13 H.S, Drinker, Legal Ethics (1953) pp. 4-5.

14 7 C.J.S. 708.

15 Am Jur 270.

16 In re Lavine, 41 P2d 161, all cited in Martin, Legal and Judicial Ethics, Fifth Ed., p. 8.

17 Canons 1 to 32 which were adopted by the American Bar Association in 1908 were also adopted by
the Philippine Bar Association in 1917. The American Bar Association adopted Canons 33 to 45 in
1928, Canon 46 in 1933 and Canon 47 in 1937. On April 20, 1946, when Canons 33 to 47 where
already in effect, the Revised Constitution of the Philippine Bar Association was approved and it
provided that the Association "adopts and makes its own the Code of Ethics of the American Bar
Association." (Martin, Legal and Judicial Ethics, Fifth Ed. p, 341).

18 33 N.Y.S. 2d 733, 734.

19 JBL Reyes & RC Puno, Outline of Philippine Civil Law. Fourth Ed., Vol. I, p. 7

20 Article 12, Civil Code.

21 Patriarca vs. Orate, 7 Phil. 390, 395 (1907).

22 Art. 8, Civil Code

23 Art. 1830, Civil Code.

24 Art. 11, Civil Code.

25 Roscoe Pound, The Lawyer From Antiquity To Modern Times, (1953), pp. 9-10.

The Lawphil Project - Arellano Law Foundation

DIVISION

[ GR No. L-37420, Jul 31, 1984 ]

MACARIA A. TORRES v. CA

DECISION
216 Phil. 22

MELENCIO-HERRERA, J.:
[1]
This Petition for Review on Certiorari, treated as a special civil action , prays that the judgment
rendered by the then Court of Appeals in the consolidated cases, CA-G.R. No. 34998-R entitled "Macaria
A. Torres, plaintiff-appellee vs. Vicente Santillan, et al., defendants-appellants", and CA-G.R. No. 34999-
R entitled "Vicente Santillan, et al., plaintiffs-appellants vs. Macaria A. Bautista, et al., defendants-
appellees", and the Resolution denying the Motion for Reconsideration and Petition for New Trial, be set
aside; and that, instead, the Order of the Court of First Instance of August 7, 1963 be affirmed, or, in the
alternative, that the case be remanded to it for new trial.
Involved in this controversy are the respective claims of petitioner and private respondents over Lot No.
551 of the Sta. Cruz de Malabon Estate (part of the friar lands) in Tanza, Cavite, with an area of
approximately 1,622 square meters, covered by Transfer Certificate of Title No. T-6804 issued in the
name of the legal heirs of Margarita Torres.
The facts of the case cover three generations. The propositus, Margarita Torres, during the Spanish
regime, was married to Claro Santillan, Vicente and Antonina were begotten of this union. Claro died
leaving Margarita a widow. Antonina married and had six children, namely: Alfredo, Salud (married to
Baldomero Buenaventura), Demetria (married to Leonardo Quinto), Adelina (married to Cesario
Punzalan), Tomas, and Amado all surnamed Narciso, who, together with Vicente Santillan, are the
private respondents. Antonina died before the institution of the cases, while Vicente died on June 4,
1957[2], during the pendency of the cases in the Trial Courts, without progeny.
After the death of her husband, Margarita Torres cohabited with Leon Arvisu Arbole, without benefit of
marriage. Out of their cohabitation, petitioner Macaria Torres (later married to Francisco Bautista) was
born on June 20, 1898, and baptized on June 26, 1898. In a Certificate of Baptism issued by the Parish
Priest of Tanza, Cavite, Leon Arvisu (Arbole) and Margarita Torres were named as father and mother of
petitioner, whose name was listed as "Macaria Arvisu" (Exhibit "C"). Another Baptismal Certificate,
however, listed her name as Macaria Torres, while her father's name was left blank (Exhibit "4").
Subsequently, or on June 7, 1909, Leon Arbole and Margarita Torres were married (Exhibit "A").
Petitioner lived with and was reared by her parents. Margarita, the mother, died on December 20, 1931
(Exhibit "D"), while Leon, the father, passed away on September 14, 1933 (Exhibit "E").
Lot No. 551, an urban lot with an area of 1,622 sq. ms., more or less, had been leased temporarily by the
Government (Lease No. 17) to Margarita Torres who was the actual occupant of the lot. The date of the
lease cannot be determined with exactitude from the records. On December 13, 1910, the Government,
through the Director of Lands, issued to Margarita Torres, Sale Certificate No. 222 (Exhibit "B") over the
said lot at the price of P428.80, payable in 20 annual installments of P20.00 each. The rental/s
previously paid of P17.40 was credited to the purchase price. Testimonial evidence is to the effect that
Leon Arbole paid the installments out of his earnings as a water tender at the Bureau of Lands, Tanza,
Cavite. The last installment, however, was paid on December 17, 1936, or three (3) years after his death.
On August 25, 1933, twenty (20) days before his death, Leon Arbole sold and transferred in a notarial
deed all his rights and interest to the one-half (½) portion of Lot No. 551 in favor of petitioner, for the
sum of P300.00.[3]
On June 6, 1953, Vicente Santillan executed an Affidavit claiming possession of Lot No. 551 and asking
for the issuance of title in his name, which he filed with the Bureau of Lands. Based thereon, the Bureau
of Lands issued the corresponding patent in the name of the legal heirs of Margarita Torres. Transfer
Certificate of Title No. T-6804 was eventually issued by the Register of Deeds of Cavite on November 7,
1957, also in the name of said heirs.
On June 3, 1954, private respondents filed a complaint against petitioner for Forcible Entry, with the
Justice of the Peace Court of Tanza, Cavite, alleging that petitioner had entered a portion of Lot No. 551
without their consent, constructed a house, and refused to vacate upon demand. For her part, petitioner
claimed that she is a co-owner of the lot in question, being one of the daughters of Margarita Torres: The
ejectment case was decided against petitioner and the latter appealed to the then Court of First Instance
of Cavite, where it was docketed as Civil Case No. 5547 (Ejectment Case).
On June 8, 1954, petitioner instituted an action for partition of Lot No. 551 before the then Court of First
Instance of Cavite, docketed as Civil Case No. 5505 (Partition Case), alleging that said lot was conjugal
property of the spouses Margarita Torres and Leon Arbole, and that she is their legitimated child. Private
respondents filed an Answer alleging that the lot belonged exclusively to Margarita Torres; that they are
her only heirs, and that the complaint for partition should be dismissed.
The Ejectment Case and the Partition Case were jointly tried and decided on November 20, 1958 with a
finding that Lot No. 551 is the paraphernal property of Margarita Torres, and adjudicating to private
respondents two-thirds (2/3) of the property in equal shares, and to petitioner a one-third (1/3) portion.
[4] Petitioner moved for reconsideration, which private respondents opposed. Pending its resolution, the
Provincial Capitol of Cavite was burned, resulting in the complete destruction of the records of the two
cases, which, however, were later partially reconstituted.
On August 7, 1963, the then Court of First Instance of Cavite, Branch I, issued an Order granting
reconsideration and amending the Decision of November 20, 1958. The dispositive portion thereof reads
as follows:

"Wherefore, judgment is hereby rendered in Civil Case No. 5505:

(1) Declaring Macaria A. Torres as the legitimated child of the spouses Leon Arbole and Margarita
Torres;
(2) Declaring that Lot No. 551 of the Sta. Cruz de Malabon Estate is a conjugal partnership property
of the spouses Leon Arbole and Margarita Torres;
(3) Adjudicating four-sixths (4/6th) of Lot No. 551 of S.C. de Malabon Estate to Macaria Torres, and
two-sixths (2/6th) in equal shares to Alfredo, Tomas, Amado, Salud, Demetria and Adelina, all
surnamed Narciso, legitimate children and heirs of the deceased Antonina Santillan, since Vicente
Santillan is already dead. The parties may make the partition among themselves by proper
instruments of conveyance, subject to confirmation by the Court. In fairness, however, to the
parties, each party should be alloted that portion of the lot where his or her house has been
constructed, as far as this is possible. In case the parties are unable to agree upon the partition, the
Court shall appoint three commissioners to make the partition.

As to Civil Case No. 5547, the same is hereby dismissed.

[5]
Without costs in both cases."

In concluding that petitioner is a legitimated child, the Trial Court opined:

"It is undisputed that when Macaria A. Torres was born on June 20, 1898, her parents, Leon Arbole
and Margarita Torres, had the capacity to marry each other. There was no legal impediment for
them to marry. It has also been established that Macaria A. Torres had been taken care of, brought
up and reared by her parents until they died. The certificate of baptism (Exh. 'G') also shows that
Macaria Torres was given the family name of Arvisu, which is also the family name of her father,
Leon Arbole, and that her father is Leon Arvisu and her mother is Margarita Torres. Such being the
case, Macaria A. Torres possessed the status of an acknowledged natural child. And when her
parents were married on June 7, 1909, she became the legitimated daughter of Leon Arbole and
Margarita Torres."[6]

[7]
Private respondents appealed. On April 2, 1973, the then Court of Appeals rendered the judgment
sought to be set aside herein, the decretal part of which states:

"Wherefore, judgment is hereby rendered in Civil Case No. 5505:

(1) Declaring that Macaria A. Torres is not the legitimated child of the spouses Leon Arbole and
Margarita Torres;
(2) Declaring that Lot No. 551 of the Sta. Cruz de Malabon Estate is a conjugal partnership property of
the spouses Leon Arbole and Margarita Torres; and
(3) Adjudicating one-half (½) of Lot No. 551 of S. C. de Malabon Estate to Macaria Torres, and the other
half (½) in equal shares to Alfredo, Tomas, Amado, Salud, Demetria and Adelina, all surnamed Narciso,
legitimate children and heirs of Antonina Santillan, since Vicente Santillan is already dead. The parties
may make the partition among themselves by proper instruments of conveyance, subject to confirmation
by the Court. In fairness, however, to the parties, each party should be alloted that portion of the lot
where his or her house has been constructed, as far as this is possible. In case the parties are unable to
agree upon the partition, the Court shall appoint three commissioners to make the partition.
As to Civil Case No, 5547, the same is hereby dismissed.
Without costs in both cases."[8]
The Appellate Court was of the opinion that:
"Macaria A. Torres is not a legitimated daughter of Leon Arvisu Arbole and Margarita Torres, the
former not having been legally acknowledged before or after the marriage of her parents. As
correctly pointed out by the appellants in their brief, the fact that she was taken cared of, brought up
and reared by her parents until they died, and that the certificate of baptism (Exhibit 'C') shows that
she was given the family name of Arvisu did not bestow upon her the status of an acknowledged
natural child.
"Under Article 121 of the old Civil Code, the governing law on the matter, children shall be
considered legitimated by subsequent marriage only when they have been acknowledged by the
parents before or after the celebration thereof, and Article 131 of the same code provides that the
acknowledgement of a natural child must be in the record of birth, in a will or in some public
document. Article 131 then prescribed the form in which the acknowledgement of a natural child
should be made. The certificate of baptism of Macaria A. Torres (Exhibit 'C') is not the record of
birth referred to in Article 131. This article of the old Civil Code 'requires that unless the
acknowledgement is made in a will or other public document, it must be made in the record of birth,
or in other words, in the civil register' (Samson vs. Corrales Tan, 48 Phil. 405)."[9]

A Motion for Reconsideration and for New Trial; dated April 16, 1973, was filed by petitioner. In support
thereof, petitioner submitted a typewritten Sworn Statement, dated March 5, 1930 of spouses Leon
[10]
Arvisu (Arbole) and Margarita Torres , reading in full as follows:
"SWORN STATEMENT

"We, Leon Arvisu and Margarita Torres husband and wife respectively, of majority age, and
residents of the Municipality of Tanza, Province of Cavite, P.I., after being duly sworn to according
to law depose and say:
"That Macaria de Torres is our legitimized daughter she being born out of wedlock on the 26th of
June 1898 at Tanza, Cavite, but as stated she was legitimized by our subsequent marriage.
"That at the time of her birth or conception, we, her parents could have married without
dispensation had we desired.
"That as natural child our aforesaid daughter was surnamed de Torres after that of her mother's at
the time she was baptized as per record on file in the Church.
"That as a legitimized daughter she should now be surnamed Arvisu after her father's family name.
"Wherefore, it is respectfully requested to anybody concerned that proper remedy be made for the
change of the surname of said Macaria de Torres as desired.
"In testimony hereof, we hereunto signed out names at Tanza, Cavite, this 5th day of March 1930.

(Thumbmarked) (Thumbmarked)

LEON ARVISU MARGARITA TORRES

Signed in the presence of:

(Sgd.) Illegible (Sgd.)Macaria de Bautista
x -----------------------------------------------------------------------------------------------------------------------x
UNITED STATES OF
)
AMERICA
PHILIPPINE ISLANDS )
MUNICIPALITY OF
) ss
TANZA
PROVINCE OF
)
CAVITE

"Subscribed and sworn to before me this 5th day of March 1930. The affiant Leon Arvisu exhibited
to me no cedula certificate being exempt on account of going over 60 years of age and Margarita
Torres having exhibited no cedula certificate being exempt on account of her sex.
"Witness my hand and seal of office on the date and place aforesaid.

CONSTANCIO VELASCO
Notary Public, Cavite Province
Until Dec. 31, 1930.
Not. Reg, No. 56
Page No. 2
[11]
Book No. III Series of 1930."

The reason given for the non-production of the notarial document during trial was that the same was
only found by petitioner's daughter, Nemensia A. Bautista, among the personal belongings of private,
respondent, Vicente Santillan, an adverse party after his death and who may have attempted to suppress
it. Private respondents, for their part, argued against new trial, and contended that it is not newly
discovered evidence which could not have been produced during the trial by the exercise of due diligence.
The decision of the Appellate Court was rendered by a Division of three, composed of Justices Jesus Y.
Perez, Jose N. Leuterio and Luis B. Reyes, ponente. When the Motion for Reconsideration and New Trial
was considered, there was disagreement, possibly as to whether or not new trial should be granted in
respect of the sworn statement of March 5, 1930. A Special Division of five was then formed, composed of
Justices Antonio Lucero, Magno S. Gatmaitan, Lourdes P. San Diego, Jose N. Leuterio and Luis B. Reyes
(Justice Perez having retired or having disqualified himself). In a minute resolution of August 24, 1973,
the Division of five, by a vote of three to two, denied both reconsideration and new trial.
To warrant review, petitioner has summarized her submission based on two assignments of error. The
first was expressed as follows:

"Although the Court of Appeals is correct in declaring that Macaria A. Torres is not the legitimated
child of the spouses Leon Arbole and Margarita Torres, it has overlooked to include in its findings
of facts the admission made by Vicente Santillan and the heirs of Antonina Santillan (herein
respondents) that Macari Torres and Vicente Santillan and Antonina Santillan are brother and
sisters with a common mother Margarita Torres and they are the legal heirs and nearest of relatives
of Margarita Torres, and as a consequence thereof, the Court of Appeals had drawn an incorrect
conclusion in adjudicating the entire share of Margarita Torres in the conjugal property solely to
Vicente Santillan and the heirs of Antonina Santillan." (Emphasis ours)

As we understand it, petitioner has conceded, with which we concur, that, without taking account of the
sworn statement of March 5, 1930, she cannot be considered a legitimated child of her parents.
Continuous possession of the status of a natural child, fact of delivery by the mother, etc. will not amount
to automatic recognition, but an action for compulsory recognition is still necessary, which action may be
commenced only during the lifetime of the putative parents, subject to certain exceptions.[12]
The admission adverted to appears in paragraph 3 of private respondents' original complaint in the
Ejectment Case reading:

"the plaintiffs and the defendant Macaria A. Bautista are the legal heirs and nearest of kins of
Margarita Torres, who died in Tanza, Cavite on December 20, 1931." (Underscoring supplied).

The statement, according to petitioner, is an admission of her legitimation and is controlling in the
determination of her participation in the disputed property.
We are not persuaded. In the Amended Complaint filed by private respondents in the same Ejectment
Case, the underlined portion was deleted so that the statement simply read:

"That the plaintiffs are the legal heirs and nearest of kin of Margarita Torres, who died at Tanza,
Cavite, on December 20, 1931;"

In virtue thereof, the Amended Complaint takes the place of the original. The latter is regarded as
abandoned and ceases to perform any further function as a pleading. The original complaint no longer
forms part of the record.[13]
If petitioner had desired to utilize the original complaint she should have offered it in evidence. Having
been amended, the original complaint lost its character as a judicial admission, which would have
required no proof, and became merely an extrajudicial admission, the admissibility of which, as evidence,
required its formal offer. Contrary to petitioner's submission, therefore, there can be no estoppel by
[14]
extrajudicial admission made in the original complaint, for failure to offer it in evidence.
It should also be noted that in the Partition Case private respondents, in their Answer (parag. 4), denied
the legitimacy of petitioner.
The second error attributed to the Appellate Court has been pleaded as follows:

"Also, the Court of Appeals has gravely abused its discretion when it denied the petition for new
trial, knowing as it does that the judgment is clearly erroneous in view of the evidence which is
offered and no mount of diligence on the part of the petitioner could it be produced in court at any
tine before it was offered as it was found from the personal belongings of Vicente Santillan, an
adverse party, after his death."

It is our considered opinion that new trial was warranted to prevent a possible miscarriage of justice.
Assuming that the genuineness and due execution of the Sworn Statement of March 5, 1930 is
established in accordance with procedural due process, a new trial would resolve such vital
considerations as (1) whether or not said Sworn Statement qualifies as the public document prescribed in
Article 131 of the old Civil Code;[15] (2) whether or not it conforms to an act of acknowledgment by the
parents after the celebration of their marriage as required by Article 121 of the same code[16]; and (3)
whether or not petitioner's signature as a witness to said document was the equivalent of the consent
necessary for acknowledgment of an adult person under Article 133 of that Code.[17] Affirmative answers
would confer upon petitioner the status of a legitimated child of her parents, and would entitle her to
enjoy hereditary rights to her mother's estate.
Private respondents stress that since petitioner signed as a witness to the document, she should be
chargeable with knowledge of its existence, and, therefore, the Sworn Statement was not newly
discovered evidence. In our view, the document can reasonably qualify as newly discovered evidence,
which could not have been produced during the trial even with the exercise of due diligence; specially if it
really had been in the possession of Vicente Santillan, an adverse party who, it was alleged, suppressed
the document.
In the interest of judicial expediency, the new trial can be conducted by respondent Appellate Court, now
empowered to do so under Section 9 of Batas Pambansa Blg. 129.
WHEREFORE, this case is hereby remanded to the now Intermediate Appellate Court for new trial, and
depending on its outcome, said Court shall also resolve the respective participation of the parties in the
disputed property, inclusive of the estate of the deceased Vicente Santillan. No costs.
SO ORDERED.
Plana, Relova, Gutierrez, Jr., and De la Fuente, JJ., concur.
Teehankee, J., (Chairman), concurs in a separate opinion.

[1]
p. 79, Rollo.
[2]
p. 77, ibid.
[3] CA Decision, pp. 9 & 10, Rollo, pp. 33 & 34.
[4]
p. 68, Original Record.
[5] pp. 123 & 124, ibid.
[6]
pp. 115 & 116, ibid.
[7] Former Fifth Division composed of Justices Jesus Y. Perez, Jose N. Leuterio, and Luis B. Reyes
(ponente).
[8]
p. 42, Rollo.
[9] pp. 34 & 35, ibid.
[10]
Annex "A", Petition for New Trial.
[11] P. 50, Rollo.
[12]
Articles 135, 136, and 137, Spanish Civil Code; Gitt vs. Gitt, 68 Phil. 385, 390 (1939); Canales vs.
Arrogante, 91 Phil. 6 (1952).
[13] Reynes vs. Compania General de Tabacos, 21 Phil. 416 (1912).
[14]
Javellana vs. D.O. Plaza Enterprises, Inc., 32 SCRA 261 (1970).
[15] "ARTICLE 131. The acknowledgment of a natural child must be made in the record of bith, in a will,
or in some other public document."
[16]
"ARTICLE 121. Children shall be considered as legitimated by a subsequent marriage only when they
have been acknowledged by the parents before or after the celebration thereof."
[17] "ARTICLE 133. An adult person may not be acknowledged as a natural child without his consent.

"The approval of the court, to be granted after hearing the prosecuting officer, shall be necessary to the
acknowledgment of a minor, unless such acknowledgment be made in a certificate of birth or in a will
"The minor may in any case contest the acknowledgment within the four years next following the
attainment of his or her majority."
DIVISION

[ GR No. 119053, Jan 23, 1997 ]

FLORENTINO ATILLO III v. CA

RESOLUTION
334 Phil. 546

FRANCISCO, J.:
This is a petition for review on certiorari of the decision of the respondent Court of Appeals in CA-G.R. No.
3677 promulgated on August 4, 1994 affirming in toto the decision of Branch 7 of the Regional Trial Court of
Cebu City in Civil Case No. CEB-9801 entitled "Florentino L. Atillo III versus Amancor, Inc. and Michell
Lhuillier".

The material antecedents are as follows:

On August 15, 1985, respondent Amancor, Inc. (hereinafter referred to as AMANCOR for brevity), a
corporation then owned and controlled by petitioner Florentino L. Atillo III, contracted a loan in the
amount of P1,000,000.00 with Metropolitan Bank and Trust Company, secured by real estate properties
owned by the petitioner.[1] Before the said loan could be paid, petitioner entered into a Memorandum of
Agreement dated June 14, 1988 (Annex "A" of the Complaint) with respondent Michell Lhuillier
(hereinafter referred to as LHUILLIER for brevity) whereby the latter bought shares of stock in
AMANCOR. As a consequence of the foregoing transaction, petitioner and LHUILLIER each became
owner of 47% of the outstanding shares of stock of AMANCOR while the officers of the corporation
owned the remaining 6%.[2]

In view of the urgent and immediate need for fresh capital to support the business operations of
AMANCOR, petitioner and LHUILLIER executed another Memorandum of Agreement on February 13,
1989 (Annex "B" of the Complaint) by virtue of which LHUILLIER undertook to invest additional capital
in AMANCOR.[3] As an addendum to the foregoing, a Supplemental Memorandum of Agreement was
entered into by the petitioner and LHUILLIER on March 11, 1989.[4] Relevant to the case at bar is a
stipulation in the said Supplemental Memorandum of Agreement which provides as follows:

"4. F.L. Atillo III may dispose off (sic) his properties at P. del Rosario St., Cebu City which may involve pre-
payment of AMANCOR'S mortgage loan to the bank estimated at 300,000.00 and while AMANCOR may not
yet be in the position to re-pay said amount to him, it shall pay the interests to him equivalent to prevailing
[5]
bank rate."

Pursuant to this stipulation, petitioner assumed AMANCOR' s outstanding loan balance of P300,000.00 with
Metropolitan Bank and Trust Company. After offsetting the amount of P300,000.00 with some of the
accounts that petitioner had with AMANCOR, the amount which remained due to the petitioner was
P199,888.89. Because of the failure of AMANCOR to satisfy its obligation to repay petitioner, the latter filed a
complaint for collection of a sum of money docketed as Civil Case No. Ceb-9801 against AMANCOR and
LHUILLIER before Branch 7 of the Regional Trial Court of Cebu City.

At the pre-trial conference, petitioner, AMANCOR and LHUILLIER, assisted by their respective counsels,
stipulated on the following:
"1. That the parties admit the due execution and genuineness of the Memorandum of Agreement dated
14 June 1988 (Annex A), the Memorandum of Agreement dated 13 February 1989 (Annex B) and
Supplemental Agreement dated 11 March 1989 (Annex C);

2. That the defendants admit that the claim of the plaintiff amounted to P199,888.89 as of October 1,
[6]
1990;"

and submitted the following issues to be resolved by the trial court:

"a. From the aforesaid Annexes A, B and C, is Michell J. Lhuillier personally liable to the plaintiff?

b. What rate of interests shall the defendant corporation and Michell J. Lhuillier, if the latter is liable, pay the
plaintiff?"[7] (Underscoring supplied.)

On the basis of the stipulation of facts and the written arguments of the parties, the trial court rendered a
decision in favor of the petitioner, ordering AMANCOR to pay petitioner the amount of P199,888.89 with
interest equivalent to the bank rate prevailing as of March 11, 1989. LHUILLIER was, however, absolved of
any personal liability therefor.[8]

It is from the trial court's conclusion of non-liability that petitioner appealed to respondent court, arguing
therein that as LHUILLIER signed the Memorandum of Agreement without the official participation nor
ratification of AMANCOR, LHUILLIER should have been declared jointly and severally liable with
AMANCOR.[9]

The respondent court found petitioner's contention bereft of merit and held in part that:
"Contrary to plaintiffs-appellants (sic) allegation, the indebtedness of P199,888.89 was incurred by
defendant AMANCOR, INC., alone. A thorough study of the records shows that plaintiff's cause of action
for collection of a sum of money arose from "his payment of the defendant corporation's outstanding
loan balance of P300,000.00 with Metropolitan Bank & Trust Company" x x x. Considering the
allegations in the complaint and those contained in the Memorandum of Agreement, the respondent
court properly ruled that the liability was incurred by defendant AMANCOR, INC., singly. We grant that
if plaintiff really believes that the indebtedness was incurred by defendant Lhuillier in his personal
capacity, he should not have offsetted (sic) some of his accounts with the defendant corporation, x x x.
As it is, plaintiff could have ofted (sic) to sue defendant Lhuillier in his personal capacity the whole
amount of indebtedness and not implead the defendant corporation as co-defendant.

xxx xxx xxx

x x x [T]he indebtedness was incurred by the defendant corporation as a legal entity to pay the mortgage
loan. Defendant Lhuillier acted only as an officer/agent of the corporation by signing the said
[10]
Memorandum of Agreement."

Aggrieved by the decision of respondent court, petitioner brought this instant petition submitting the
following issue for the resolution of this Court:
"When a party, by his judicial admissions, has affirmed that he has personal liability in a certain
transaction, may a court rule against such an admission despite clear indications that it was not affected
[11]
by mistakes palpable or otherwise?"

Petitioner claims that LHUILLIER made a judicial admission of his personal liability in his Answer wherein
he stated that:
"3.11. In all the subject dealings, it was between plaintiff and Lhuillier personally without the
official participation of Amancor, Inc.

xxx xxx xxx

3.14 . Since the board of Amancor, Inc. did not formally ratify nor acceded (sic) to the personal
agreement between plaintiff and Lhuillier through no fault of the latter, the corporation is not bound
and the actionable documents are, at most, unenforceable insofar as the subject claim of plaintiff is
[12]
concerned."

And on the basis of such admission, petitioner contends that the decision of the respondent court absolving
LHUILLIER of personal liability is manifest error for being contrary to law, particularly Section 4 of Rule 129
of the Rules of Court which provides that:
"An admission, verbal or written, made by a party in the course of the proceedings in the same case,
does not require proof. The admission may be contradicted only by showing that it was made through
palpable mistake or that no such admission was made."

Petitioner would want to further strengthen his contention by adverting to the consistent pronouncement of
this Court that: "x x x an admission made in the pleadings cannot be controverted by the party making such
admission and are conclusive as to him, and that all proofs submitted by him contrary thereto or inconsistent
therewith, should be ignored, whether objection is interposed by the party or not x x x."[13]

We find petitioner's contention to be without merit and the reliance on the general rule regarding judicial
admissions enunciated by the abovementioned provision of law and jurisprudence misplaced.

As provided for in Section 4 of Rule 129 of the Rules of Court, the general rule that a judicial admission is
conclusive upon the party making it and does not require proof admits of two exceptions: 1) when it is shown
that the admission was made through palpable mistake, and 2) when it is shown that no such admission was
in fact made.[14] The latter exception allows one to contradict an admission by denying that he made such an
admission.
"For instance, if a party invokes an 'admission' by an adverse party, but cites the admission 'out of
context', then the one making the admission may show that he made no 'such' admission, or that his
admission was taken out of context.

This may be interpreted as to mean 'not in the sense in which the admission is made to appear.' That is
[15]
the reason for the modifier 'such'." [Underscoring supplied.]

Here, petitioner appears to have taken the admissions made by LHUILLIER in paragraph 3.11 of his Answer
"out of context". Petitioner is seemingly misleading this Court by isolating paragraph 3.11 of the said Answer
from the preceding paragraphs. A careful scrutiny of the Answer in its entirety will show that paragraph 3.11
is part of the affirmative allegations recounting how LHUILLIER was persuaded to invest in AMANCOR
which was previously owned and managed by petitioner.[16] Paragraph 3.11 has reference to the fact that in
all investments made with AMANCOR through stock purchases, only petitioner and LHUILLIER dealt with
each other.[17] It is more than obvious that paragraph 3.11 has nothing to do with the obligation of
AMANCOR to petitioner which is the subject of the present case. Contrary to petitioner's allegations,
LHUILLIER had categorically denied personal liability for AMANCOR's corporate debts, and in the
succeeding paragraphs of the said Answer asserted the following:
"3.12. As evident in the wordings of par. 12 of the Actionable Memorandum of Agreement dated 13
February 1989 (Annex B) and par. 4 of the actionable Supplemental Memorandum of Agreement dated
11 March 1989 (Annex C), Lhuillier did not engage to personally pay the corporate loans secured by
plaintiff's property as to release the property to plaintiff. On the contrary, as explicitly stated in the
aforesaid par. 4 of Annex C, ". . . while Amancor may not yet be in the position to repay said amount to
him, IT shall pay the interests to him equivalent to prevailing bank rate."

"3.13. At most, therefore, Lhuillier x x x only agreed, for the corporation to repay plaintiff the
amount of the pre- terminated corporate loans with the bank and, pending improvement of Amancor's
[18]
finances, for said corporation to pay interest at prevailing bank rate. x x x." (Underscoring supplied.)

Furthermore, petitioner was well aware that LHUILLIER had never admitted personal liability for the said
obligation. In fact, in delineating the issues to be resolved by the trial court, both parties submitted for the
determination of the court, the question of whether or not LHUILLIER is personally liable for the obligation
of AMANCOR to petitioner.[19] Moreover, as correctly observed by respondent court, if petitioner really
believed that the liability was incurred by LHUILLIER in his personal capacity, then he should not have offset
his accounts with those of AMANCOR's. The foregoing act of petitioner is a clear indication that he
recognized AMANCOR and not LHUILLIER as the obligor.

Granting arguendo that LHUILLIER had in fact made the alleged admission of personal liability in his
Answer, We hold that such admission is not conclusive upon him. Applicable by analogy is our ruling in the
case of Gardner vs. Court of Appeals which allowed a party's testimony in open court to override admissions
he made in his answer. Thus:
"The fact, however, that the allegations made by Ariosto Santos in his pleadings and in his declarations
in open court differed will not militate against the findings herein made nor support the reversal by
respondent court. As a general rule, facts alleged in a party's pleading are deemed admissions of that
party and are binding upon it, but this is not an absolute and inflexible rule. An answer is a mere
statement of fact which the party filing it expects to prove, but it is not evidence. As ARIOSTO SANTOS
himself, in open court, had repudiated the defenses he had raised in his ANSWER and against his own
interest, his testimony is deserving of weight and credence. Both the Trial Court and the Appellate Court
[20]
believed in his credibility and we find no reason to overturn their factual findings thereon."
(Underscoring supplied.)

Prescinding from the foregoing, it is clear that in spite of the presence of judicial admissions in a party's
pleading, the trial court is still given leeway to consider other evidence presented. This rule should apply with
more reason when the parties had agreed to submit an issue for resolution of the trial court on the basis of the
evidence presented. As distinctly stated in the stipulation of facts entered into during the pre-trial conference,
the parties agreed that the determination of LHUILLIER's liability shall be based on the Memoranda of
Agreement designated as ANNEXES "A", "B" and "C" of the Complaint. Thus, the trial court correctly relied
on the provisions contained in the said Memoranda of Agreement when it absolved LHUILLIER of personal
liability for the obligation of AMANCOR to petitioner.

Furthermore, on the basis of the same evidence abovementioned, respondent court did not err when it
refused to pierce the veil of corporate fiction, thereby absolving LHUILLIER of liability for corporate
obligations and deciding the question in this wise:
"The separate personality of the corporation may be disregarded, or the veil of corporation fiction may
be pierced and the individual shareholder may be personally liable (sic) to the obligations of the
corporation only when the corporation is used as 'a cloak or cover for fraud or illegality, or to work an
injustice, or where necessary to achieve equity or when necessary for the protection of the creditors. This
situation does not obtain in this case. In the case at bar, plaintiff-appellant failed to show that defendant
Lhuillier acted otherwise than what is required of him as an agent of a corporation. It does not appear
either that defendant-appellee Michel (sic) Lhuillier is jointly and severally liable with AMANCOR INC.
absent an express stipulation to that effect and sans clear and convincing evidence as to his personal
[21]
liability."

The foregoing pronouncement is based on factual findings of the lower court which were upheld by the
respondent court, and which are thus, conclusive upon us pursuant to the well established rule that factual
findings of the Court of Appeals, supported by substantial evidence on the record, are final and conclusive
and may not be reviewed on appeal.[22]

ACCORDINGLY, finding no reversible error, the decision appealed from is hereby AFFIRMED and this
petition is DENIED.
SO ORDERED.

Narvasa, C.J., (Chairman), Davide, Jr., Melo, and Panganiban, JJ., concur.

[1] Complaint dated January 11, 1991, p. 1; Records, p. 1.

[2] Ibid., Annex "A"; Records, p. 5.

[3] Ibid., Annex "B"; Records, p. 9.

[4] Ibid., Annex "C"; Records, p. 12.

[5] Ibid.

[6] Decision dated December 17, 1991, pp. 2-3; Rollo, pp. 14-15.

[7] Ibid.

[8] Ibid., p. 4; Rollo, p. 16.

[9] Petition in G.R. No. 119053 dated February 28, 1995, pp. 6-7.

[10] Decision in CA-G.R. CV No. 36777 dated August 5, 1994, pp. 4-5; Rollo, pp. 16-17.

[11] Supra, p. 1; Rollo, p. 2.

[12] Ibid., pp. 5-6; Rollo, pp. 6-7;

[13] Elayda vs. Court of Appeals, 199 SCRA 349, 353; De Jesus vs. IAC, 175 SCRA 559; Santiago vs. de los
Santos, 61 SCRA 146; Sta. Ana vs. Maliwat, 21 SCRA 1018; and Joe's Radio Electric Supply vs. Alto
Electronics Corp., 104 Phil. 333.

[14] Supra.
[15] Paras, Rules of Court Annotated, p. 66, citing the Minutes of the Revision Committee.

[16] Answer dated May 31, 1991, pp. 2-7; Rollo, pp. 60-65.

[17] Ibid.

[18] Ibid. at pp. 6-7; Rollo, pp. 64-65.

[19] Supra.

[20] Gardner vs. Court of Appeals, 131 SCRA 585,600.

[21] Supra., p. 5; Rollo, p. 17.

[22] Guinsatao vs. Court of Appeals, 218 SCRA 708; Bustamante vs. Court of Appeals, 193 SCRA 603; Coca-
Cola Bottlers Philippines, Inc. vs. Court of Appeals, 235 SCRA 39; Tan Chun Suy vs. Court of Appeals, 229
SCRA 151.
EN BANC

[ GR No. 152154, Jul 15, 2003 ]

REPUBLIC v. SANDIGANBAYAN

DECISION
453 Phil. 1059

CORONA, J.:
This is a petition for certiorari under Rule 65 of the Rules of Court seeking to (1) set aside the Resolution
dated January 31, 2002 issued by the Special First Division of the Sandiganbayan in Civil Case No. 0141
entitled Republic of the Philippines vs. Ferdinand E. Marcos, et. al., and (2) reinstate its earlier decision
dated September 19, 2000 which forfeited in favor of petitioner Republic of the Philippines (Republic) the
amount held in escrow in the Philippine National Bank (PNB) in the aggregate amount of US$658,175,373.60
as of January 31, 2002.

BACKGROUND OF THE CASE

On December 17, 1991, petitioner Republic, through the Presidential Commission on Good Government
(PCGG), represented by the Office of the Solicitor General (OSG), filed a petition for forfeiture before the
Sandiganbayan, docketed as Civil Case No. 0141 entitled Republic of the Philippines vs. Ferdinand E.
[1]
Marcos, represented by his Estate/Heirs and Imelda R. Marcos, pursuant to RA 1379 in relation to
[2] [3] [4] [5]
Executive Order Nos. 1, 2, 14 and 14-A.

In said case, petitioner sought the declaration of the aggregate amount of US$356 million (now estimated to
be more than US$658 million inclusive of interest) deposited in escrow in the PNB, as ill-gotten wealth. The
funds were previously held by the following five account groups, using various foreign foundations in certain
Swiss banks:
(1) Azio-Verso-Vibur Foundation accounts;

(2) Xandy-Wintrop: Charis-Scolari-Valamo-Spinus- Avertina Foundation accounts;

(3) Trinidad-Rayby-Palmy Foundation accounts;

(4) Rosalys-Aguamina Foundation accounts and

(5) Maler Foundation accounts.

In addition, the petition sought the forfeiture of US$25 million and US$5 million in treasury notes which
exceeded the Marcos couple's salaries, other lawful income as well as income from legitimately acquired
property. The treasury notes are frozen at the Central Bank of the Philippines, now Bangko Sentral ng
Pilipinas, by virtue of the freeze order issued by the PCGG.

On October 18, 1993, respondents Imelda R. Marcos, Maria Imelda M. Manotoc, Irene M. Araneta and
Ferdinand R. Marcos, Jr. filed their answer.

[6]
Before the case was set for pre-trial, a General Agreement and the Supplemental Agreements dated
December 28, 1993 were executed by the Marcos children and then PCGG Chairman Magtanggol Gunigundo
for a global settlement of the assets of the Marcos family. Subsequently, respondent Marcos children filed a
motion dated December 7, 1995 for the approval of said agreements and for the enforcement thereof.

The General Agreement/Supplemental Agreements sought to identify, collate, cause the inventory of and
distribute all assets presumed to be owned by the Marcos family under the conditions contained therein. The
aforementioned General Agreement specified in one of its premises or "whereas clauses" the fact that
petitioner "obtained a judgment from the Swiss Federal Tribunal on December 21, 1990, that the Three
Hundred Fifty-six Million U.S. dollars (US$356 million) belongs in principle to the Republic of the
Philippines provided certain conditionalities are met x x x." The said decision of the Swiss Federal Supreme
Court affirmed the decision of Zurich District Attorney Peter Consandey, granting petitioner's request for
legal assistance.[7] Consandey declared the various deposits in the name of the enumerated foundations to be
of illegal provenance and ordered that they be frozen to await the final verdict in favor of the parties entitled
to restitution.

Hearings were conducted by the Sandiganbayan on the motion to approve the General/Supplemental
Agreements. Respondent Ferdinand, Jr. was presented as witness for the purpose of establishing the partial
implementation of said agreements.

On October 18, 1996, petitioner filed a motion for summary judgment and/or judgment on the pleadings.
Respondent Mrs. Marcos filed her opposition thereto which was later adopted by respondents Mrs. Manotoc,
Mrs. Araneta and Ferdinand, Jr.

In its resolution dated November 20, 1997, the Sandiganbayan denied petitioner's motion for summary
judgment and/or judgment on the pleadings on the ground that the motion to approve the compromise
agreement "(took) precedence over the motion for summary judgment."

Respondent Mrs. Marcos filed a manifestation on May 26, 1998 claiming she was not a party to the motion
for approval of the Compromise Agreement and that she owned 90% of the funds with the remaining 10%
belonging to the Marcos estate.

Meanwhile, on August 10, 1995, petitioner filed with the District Attorney in Zurich, Switzerland, an
additional request for the immediate transfer of the deposits to an escrow account in the PNB. The request
was granted. On appeal by the Marcoses, the Swiss Federal Supreme Court, in a decision dated December 10,
1997, upheld the ruling of the District Attorney of Zurich granting the request for the transfer of the funds. In
1998, the funds were remitted to the Philippines in escrow. Subsequently, respondent Marcos children moved
that the funds be placed in custodia legis because the deposit in escrow in the PNB was allegedly in danger of
dissipation by petitioner. The Sandiganbayan, in its resolution dated September 8, 1998, granted the motion.

After the pre-trial and the issuance of the pre-trial order and supplemental pre-trial order dated October 28,
1999 and January 21, 2000, respectively, the case was set for trial. After several resettings, petitioner, on
March 10, 2000, filed another motion for summary judgment pertaining to the forfeiture of the US$356
million, based on the following grounds:

I
THE ESSENTIAL FACTS WHICH WARRANT THE FORFEITURE OF THE FUNDS SUBJECT OF THE
PETITION UNDER R.A. NO. 1379 ARE ADMITTED BY RESPONDENTS IN THEIR PLEADINGS AND
OTHER SUBMISSIONS MADE IN THE COURSE OF THE PROCEEDING.

II

RESPONDENTS' ADMISSION MADE DURING THE PRE-TRIAL THAT THEY DO NOT HAVE ANY
INTEREST OR OWNERSHIP OVER THE FUNDS SUBJECT OF THE ACTION FOR FORFEITURE
TENDERS NO GENUINE ISSUE OR CONTROVERSY AS TO ANY MATERIAL FACT IN THE PRESENT
[8]
ACTION, THUS WARRANTING THE RENDITION OF SUMMARY JUDGMENT.

Petitioner contended that, after the pre-trial conference, certain facts were established, warranting a
summary judgment on the funds sought to be forfeited.

Respondent Mrs. Marcos filed her opposition to the petitioner's motion for summary judgment, which
opposition was later adopted by her co-respondents Mrs. Manotoc, Mrs. Araneta and Ferdinand, Jr.

On March 24, 2000, a hearing on the motion for summary judgment was conducted.

In a decision[9] dated September 19, 2000, the Sandiganbayan granted petitioner's motion for summary
judgment:

CONCLUSION
There is no issue of fact which calls for the presentation of evidence.

The Motion for Summary Judgment is hereby granted.

The Swiss deposits which were transmitted to and now held in escrow at the PNB are deemed unlawfully
acquired as ill-gotten wealth.

DISPOSITION

WHEREFORE, judgment is hereby rendered in favor of the Republic of the Philippines and against the
respondents, declaring the Swiss deposits which were transferred to and now deposited in escrow at the
Philippine National Bank in the total aggregate value equivalent to US$627,608,544.95 as of August 31,
[10]
2000 together with the increments thereof forfeited in favor of the State.

Respondent Mrs. Marcos filed a motion for reconsideration dated September 26, 2000. Likewise, Mrs.
Manotoc and Ferdinand, Jr. filed their own motion for reconsideration dated October 5, 2000. Mrs. Araneta
filed a manifestation dated October 4, 2000 adopting the motion for reconsideration of Mrs. Marcos, Mrs.
Manotoc and Ferdinand, Jr.

Subsequently, petitioner filed its opposition thereto.

In a resolution[11] dated January 31, 2002, the Sandiganbayan reversed its September 19, 2000 decision,
thus denying petitioner's motion for summary judgment:

CONCLUSION
In sum, the evidence offered for summary judgment of the case did not prove that the money in the
Swiss Banks belonged to the Marcos spouses because no legal proof exists in the record as to the
ownership by the Marcoses of the funds in escrow from the Swiss Banks.

The basis for the forfeiture in favor of the government cannot be deemed to have been established and
our judgment thereon, perforce, must also have been without basis.

WHEREFORE, the decision of this Court dated September 19, 2000 is reconsidered and set aside, and
[12]
this case is now being set for further proceedings.

Hence, the instant petition. In filing the same, petitioner argues that the Sandiganbayan, in reversing its
September 19, 2000 decision, committed grave abuse of discretion amounting to lack or excess of jurisdiction
considering that --

I
PETITIONER WAS ABLE TO PROVE ITS CASE IN ACCORDANCE WITH THE REQUISITES OF
SECTIONS 2 AND 3 OF R.A. NO. 1379:
A. PRIVATE RESPONDENTS CATEGORICALLY ADMITTED NOT ONLY THE PERSONAL
CIRCUMSTANCES OF FERDINAND E. MARCOS AND IMELDA R. MARCOS AS PUBLIC
OFFICIALS BUT ALSO THE EXTENT OF THEIR SALARIES AS SUCH PUBLIC OFFICIALS, WHO
UNDER THE CONSTITUTION, WERE PROHIBITED FROM ENGAGING IN THE
MANAGEMENT OF FOUNDATIONS.

B. PRIVATE RESPONDENTS ALSO ADMITTED THE EXISTENCE OF THE SWISS DEPOSITS AND
THEIR OWNERSHIP THEREOF:
1. ADMISSIONS IN PRIVATE RESPONDENTS' ANSWER;

2. ADMISSION IN THE GENERAL / SUPPLEMENTAL AGREEMENTS THEY SIGNED

AND SOUGHT TO IMPLEMENT;

3. ADMISSION IN A MANIFESTATION OF PRIVATE RESPONDENT IMELDA R.

MARCOS AND IN THE MOTION TO PLACE THE RES IN CUSTODIA LEGIS; AND

4. ADMISSION IN THE UNDERTAKING TO PAY THE HUMAN RIGHTS VICTIMS.

C. PETITIONER HAS PROVED THE EXTENT OF THE LEGITIMATE INCOME OF FERDINAND E.

MARCOS AND IMELDA R. MARCOS AS PUBLIC OFFICIALS.

D. PETITIONER HAS ESTABLISHED A PRIMA FACIE PRESUMPTION OF UNLAWFULLY

ACQUIRED WEALTH.
II

SUMMARY JUDGMENT IS PROPER SINCE PRIVATE RESPONDENTS HAVE NOT RAISED ANY
GENUINE ISSUE OF FACT CONSIDERING THAT:
A. PRIVATE RESPONDENTS' DEFENSE THAT SWISS DEPOSITS WERE LAWFULLY ACQUIRED
DOES NOT ONLY FAIL TO TENDER AN ISSUE BUT IS CLEARLY A SHAM; AND

B. IN SUBSEQUENTLY DISCLAIMING OWNERSHIP OF THE SWISS DEPOSITS, PRIVATE

RESPONDENTS ABANDONED THEIR SHAM DEFENSE OF LEGITIMATE ACQUISITION, AND
THIS FURTHER JUSTIFIED THE RENDITION OF A SUMMARY JUDGMENT.
III

THE FOREIGN FOUNDATIONS NEED NOT BE IMPLEADED.

IV

THE HONORABLE PRESIDING JUSTICE COMMITTED GRAVE ABUSE OF DISCRETION IN

REVERSING HIMSELF ON THE GROUND THAT ORIGINAL COPIES OF THE AUTHENTICATED
SWISS DECISIONS AND THEIR "AUTHENTICATED TRANSLATIONS" HAVE NOT BEEN
SUBMITTED TO THE COURT, WHEN EARLIER THE SANDIGANBAYAN HAS QUOTED
EXTENSIVELY A PORTION OF THE TRANSLATION OF ONE OF THESE SWISS DECISIONS IN HIS
"PONENCIA" DATED JULY 29, 1999 WHEN IT DENIED THE MOTION TO RELEASE ONE
HUNDRED FIFTY MILLION US DOLLARS ($150,000,000.00) TO THE HUMAN RIGHTS VICTIMS.

V
PRIVATE RESPONDENTS ARE DEEMED TO HAVE WAIVED THEIR OBJECTION TO THE
AUTHENTICITY OF THE SWISS FEDERAL SUPREME COURT DECISIONS.[13]

Petitioner, in the main, asserts that nowhere in the respondents' motions for reconsideration and
supplemental motion for reconsideration were the authenticity, accuracy and admissibility of the Swiss
decisions ever challenged. Otherwise stated, it was incorrect for the Sandiganbayan to use the issue of lack of
authenticated translations of the decisions of the Swiss Federal Supreme Court as the basis for reversing itself
because respondents themselves never raised this issue in their motions for reconsideration and
supplemental motion for reconsideration. Furthermore, this particular issue relating to the translation of the
Swiss court decisions could not be resurrected anymore because said decisions had been previously utilized
by the Sandiganbayan itself in resolving a "decisive issue" before it.

Petitioner faults the Sandiganbayan for questioning the non-production of the authenticated translations of
the Swiss Federal Supreme Court decisions as this was a marginal and technical matter that did not diminish
by any measure the conclusiveness and strength of what had been proven and admitted before the
Sandiganbayan, that is, that the funds deposited by the Marcoses constituted ill-gotten wealth and thus
belonged to the Filipino people.

In compliance with the order of this Court, Mrs. Marcos filed her comment to the petition on May 22, 2002.
After several motions for extension which were all granted, the comment of Mrs. Manotoc and Ferdinand, Jr.
and the separate comment of Mrs. Araneta were filed on May 27, 2002.

Mrs. Marcos asserts that the petition should be denied on the following grounds:

A.
PETITIONER HAS A PLAIN, SPEEDY, AND ADEQUATE REMEDY AT THE SANDIGANBAYAN.

B.

THE SANDIGANBAYAN DID NOT ABUSE ITS DISCRETION IN SETTING THE CASE FOR FURTHER
PROCEEDINGS.[14]

Mrs. Marcos contends that petitioner has a plain, speedy and adequate remedy in the ordinary course of law
in view of the resolution of the Sandiganbayan dated January 31, 2000 directing petitioner to submit the
authenticated translations of the Swiss decisions. Instead of availing of said remedy, petitioner now elevates
the matter to this Court. According to Mrs. Marcos, a petition for certiorari which does not comply with the
requirements of the rules may be dismissed. Since petitioner has a plain, speedy and adequate remedy, that
is, to proceed to trial and submit authenticated translations of the Swiss decisions, its petition before this
Court must be dismissed. Corollarily, the Sandiganbayan's ruling to set the case for further proceedings
cannot and should not be considered a capricious and whimsical exercise of judgment.

Likewise, Mrs. Manotoc and Ferdinand, Jr., in their comment, prayed for the dismissal of the petition on the
grounds that:

(A)
BY THE TIME PETITIONER FILED ITS MOTION FOR SUMMARY JUDGMENT ON 10 MARCH 2000,
IT WAS ALREADY BARRED FROM DOING SO.

The Motion for Summary Judgment was based on private respondents' Answer and other
(1) documents that had long been in the records of the case. Thus, by the time the Motion was
filed on 10 March 2000, estoppel by laches had already set in against petitioner.
By its positive acts and express admissions prior to filing the Motion for Summary Judgment
(2) on 10 March 1990, petitioner had legally bound itself to go to trial on the basis of existing
issues. Thus, it clearly waived whatever right it had to move for summary judgment.

(B)

EVEN ASSUMING THAT PETITIONER WAS NOT LEGALLY BARRED FROM FILING THE MOTION
FOR SUMMARY JUDGMENT, THE SANDIGANBAYAN IS CORRECT IN RULING THAT PETITIONER
HAS NOT YET ESTABLISHED A PRIMA FACIE CASE FOR THE FORFEITURE OF THE SWISS
FUNDS.

Republic Act No. 1379, the applicable law, is a penal statute. As such, its provisions,
(1) particularly the essential elements stated in section 3 thereof, are mandatory in nature. These
should be strictly construed against petitioner and liberally in favor of private respondents.
Petitioner has failed to establish the third and fourth essential elements in Section 3 of R.A.
(2) 1379 with respect to the identification, ownership, and approximate amount of the property
which the Marcos couple allegedly acquired during their incumbency.

Petitioner has failed to prove that the Marcos couple acquired or own the Swiss
(a)
funds.

Even assuming, for the sake of argument, that the fact of acquisition has been
proven, petitioner has categorically admitted that it has no evidence showing how
(b)
much of the Swiss funds was acquired during the incumbency of the Marcos couple
from 31 December 1965 to 25 February 1986.

In contravention of the essential element stated in Section 3 (e) of R.A. 1379, petitioner has
(3) failed to establish the other proper earnings and income from legitimately acquired property
of the Marcos couple over and above their government salaries.
[15]
Since petitioner failed to prove the three essential elements provided in paragraphs (c)
[16] [17]
(d), and (e) of Section 3, R.A. 1379, the inescapable conclusion is that the prima facie
(4)
presumption of unlawful acquisition of the Swiss funds has not yet attached. There can,
therefore, be no premature forfeiture of the funds.

(C)

IT WAS ONLY BY ARBITRARILY ISOLATING AND THEN TAKING CERTAIN STATEMENTS MADE
BY PRIVATE RESPONDENTS OUT OF CONTEXT THAT PETITIONER WAS ABLE TO TREAT THESE
AS "JUDICIAL ADMISSIONS" SUFFICIENT TO ESTABLISH A PRIMA FACIE AND THEREAFTER A
CONCLUSIVE CASE TO JUSTIFY THE FORFEITURE OF THE SWISS FUNDS.

Under Section 27, Rule 130 of the Rules of Court, the General and Supplemental Agreements,
(1) as well as the other written and testimonial statements submitted in relation thereto, are
expressly barred from being admissible in evidence against private respondents.
Had petitioner bothered to weigh the alleged admissions together with the other statements
(2) on record, there would be a demonstrable showing that no such judicial admissions were
made by private respondents.
(D)

SINCE PETITIONER HAS NOT (YET) PROVEN ALL THE ESSENTIAL ELEMENTS TO ESTABLISH A
PRIMA FACIE CASE FOR FORFEITURE, AND PRIVATE RESPONDENTS HAVE NOT MADE ANY
JUDICIAL ADMISSION THAT WOULD HAVE FREED IT FROM ITS BURDEN OF PROOF, THE
SANDIGANBAYAN DID NOT COMMIT GRAVE ABUSE OF DISCRETION IN DENYING THE MOTION
FOR SUMMARY JUDGMENT. CERTIORARI, THEREFORE, DOES NOT LIE, ESPECIALLY AS THIS
COURT IS NOT A TRIER OF FACTS.[18]

For her part, Mrs. Araneta, in her comment to the petition, claims that obviously petitioner is unable to
comply with a very plain requirement of respondent Sandiganbayan. The instant petition is allegedly an
attempt to elevate to this Court matters, issues and incidents which should be properly threshed out at the
Sandiganbayan. To respondent Mrs. Araneta, all other matters, save that pertaining to the authentication of
the translated Swiss Court decisions, are irrelevant and impertinent as far as this Court is concerned.
Respondent Mrs. Araneta manifests that she is as eager as respondent Sandiganbayan or any interested
person to have the Swiss Court decisions officially translated in our known language. She says the
authenticated official English version of the Swiss Court decisions should be presented. This should stop all
speculations on what indeed is contained therein. Thus, respondent Mrs. Araneta prays that the petition be
denied for lack of merit and for raising matters which, in elaborated fashion, are impertinent and improper
before this Court.

PROPRIETY OF PETITIONER'S
ACTION FOR CERTIORARI

But before this Court discusses the more relevant issues, the question regarding the propriety of petitioner
[19]
Republic's action for certiorari under Rule 65 of the 1997 Rules of Civil Procedure assailing the
Sandiganbayan Resolution dated January 21, 2002 should be threshed out.

At the outset, we would like to stress that we are treating this case as an exception to the general rule
governing petitions for certiorari. Normally, decisions of the Sandiganbayan are brought before this Court
[20]
under Rule 45, not Rule 65. But where the case is undeniably ingrained with immense public interest,
public policy and deep historical repercussions, certiorari is allowed notwithstanding the existence and
[21]
availability of the remedy of appeal.

One of the foremost concerns of the Aquino Government in February 1986 was the recovery of the
unexplained or ill-gotten wealth reputedly amassed by former President and Mrs. Ferdinand E. Marcos, their
relatives, friends and business associates. Thus, the very first Executive Order (EO) issued by then President
Corazon Aquino upon her assumption to office after the ouster of the Marcoses was EO No. 1, issued on
February 28, 1986. It created the Presidential Commission on Good Government (PCGG) and charged it with
the task of assisting the President in the recovery of all ill-gotten wealth accumulated by former President
Ferdinand E. Marcos, his immediate family, relatives, subordinates and close associates, whether located in
the Philippines or abroad, including the takeover or sequestration of all business enterprises and entities
owned or controlled by them during his administration, directly or through nominees, by taking undue
advantage of their public office and/or using their powers, authority, influence, connections or relationship.
[22]
The urgency of this undertaking was tersely described by this Court in Republic vs. Lobregat :
surely x x x an enterprise" of great pith and moment"; it was attended by" great expectations"; it was
initiated not only out of considerations of simple justice but also out of sheer necessity - the national
coffers were empty, or nearly so.

In all the alleged ill-gotten wealth cases filed by the PCGG, this Court has seen fit to set aside technicalities
and formalities that merely serve to delay or impede judicious resolution. This Court prefers to have such
cases resolved on the merits at the Sandiganbayan. But substantial justice to the Filipino people and to all
parties concerned, not mere legalisms or perfection of form, should now be relentlessly and firmly pursued.
Almost two decades have passed since the government initiated its search for and reversion of such ill-gotten
wealth. The definitive resolution of such cases on the merits is thus long overdue. If there is proof of illegal
acquisition, accumulation, misappropriation, fraud or illicit conduct, let it be brought out now. Let the
ownership of these funds and other assets be finally determined and resolved with dispatch, free from all the
delaying technicalities and annoying procedural sidetracks.[23]

We thus take cognizance of this case and settle with finality all the issues therein.

ISSUES BEFORE THIS COURT

The crucial issues which this Court must resolve are: (1) whether or not respondents raised any genuine issue
of fact which would either justify or negate summary judgment; and (2) whether or not petitioner Republic
was able to prove its case for forfeiture in accordance with Sections 2 and 3 of RA 1379.

(1) THE PROPRIETY OF SUMMARY JUDGMENT

We hold that respondent Marcoses failed to raise any genuine issue of fact in their pleadings. Thus, on
motion of petitioner Republic, summary judgment should take place as a matter of right.

In the early case of Auman vs. Estenzo[24], summary judgment was described as a judgment which a court
may render before trial but after both parties have pleaded. It is ordered by the court upon application by one
party, supported by affidavits, depositions or other documents, with notice upon the adverse party who may
in turn file an opposition supported also by affidavits, depositions or other documents. This is after the court
summarily hears both parties with their respective proofs and finds that there is no genuine issue between
them. Summary judgment is sanctioned in this jurisdiction by Section 1, Rule 35 of the 1997 Rules of Civil
Procedure:
SECTION 1. Summary judgment for claimant.- A party seeking to recover upon a claim, counterclaim, or
cross-claim or to obtain a declaratory relief may, at any time after the pleading in answer thereto has
been served, move with supporting affidavits, depositions or admissions for a summary judgment in his
[25]
favor upon all or any part thereof.

Summary judgment is proper when there is clearly no genuine issue as to any material fact in the action.[26]
The theory of summary judgment is that, although an answer may on its face appear to tender issues
requiring trial, if it is demonstrated by affidavits, depositions or admissions that those issues are not genuine
but sham or fictitious, the Court is justified in dispensing with the trial and rendering summary judgment for
petitioner Republic.

The Solicitor General made a very thorough presentation of its case for forfeiture:
xxx
4. Respondent Ferdinand E. Marcos (now deceased and represented by his Estate/Heirs) was a public
officer for several decades continuously and without interruption as Congressman, Senator, Senate
President and President of the Republic of the Philippines from December 31, 1965 up to his ouster
by direct action of the people of EDSA on February 22-25, 1986.

5. Respondent Imelda Romualdez Marcos (Imelda, for short) the former First Lady who ruled with
FM during the 14-year martial law regime, occupied the position of Minister of Human Settlements
from June 1976 up to the peaceful revolution in February 22-25, 1986. She likewise served once as a
member of the Interim Batasang Pambansa during the early years of martial law from 1978 to 1984
and as Metro Manila Governor in concurrent capacity as Minister of Human Settlements. x x x
xxx xxx xxx

11. At the outset, however, it must be pointed out that based on the Official Report of the Minister of
Budget, the total salaries of former President Marcos as President form 1966 to 1976 was P60,000 a year
and from 1977 to 1985, P100,000 a year; while that of the former First Lady, Imelda R. Marcos, as
Minister of Human Settlements from June 1976 to February 22-25, 1986 was P75,000 a year xxx.

ANALYSIS OF RESPONDENTS
LEGITIMATE INCOME

xxx
12. Based on available documents, the ITRs of the Marcoses for the years 1965-1975 were filed under
Tax Identification No. 1365-055-1. For the years 1976 until 1984, the returns were filed under Tax
Identification No. M 6221-J 1117-A-9.

13. The data contained in the ITRs and Balance Sheet filed by the "Marcoses are summarized and
attached to the reports in the following schedules:

Schedule A:

Schedule of Income (Annex "T" hereof);

Schedule B:

Schedule of Income Tax Paid (Annex "T-1" hereof);

Schedule C:

Schedule of Net Disposable Income (Annex "T-2" hereof);

Schedule D:

Schedule of Networth Analysis (Annex "T-3" hereof).

14. As summarized in Schedule A (Annex "T" hereof), the Marcoses reported P16,408,442.00 or
US$2,414,484.91 in total income over a period of 20 years from 1965 to 1984. The sources of
income are as follows:

Official Salaries - P 2,627,581.00 - 16.01%

Legal Practice - 11,109,836.00 - 67.71%
Farm Income - 149,700.00 - .91%
Others - 2,521,325.00 - 15.37%
Total - P16,408,442.00 - 100.00%

15. FM's official salary pertains to his compensation as Senate President in 1965 in the amount of
P15,935.00 and P1,420,000.00 as President of the Philippines during the period 1966 until 1984.
On the other hand, Imelda reported salaries and allowances only for the years 1979 to 1984 in the
amount of P1,191,646.00. The records indicate that the reported income came from her salary from
the Ministry of Human Settlements and allowances from Food Terminal, Inc., National Home
Mortgage Finance Corporation, National Food Authority Council, Light Rail Transit Authority and
Home Development Mutual Fund.

16. Of the P11,109,836.00 in reported income from legal practice, the amount of P10,649,836.00 or
96% represents "receivables from prior years" during the period 1967 up to 1984.

17. In the guise of reporting income using the cash method under Section 38 of the National Internal
Revenue Code, FM made it appear that he had an extremely profitable legal practice before he
became a President (FM being barred by law from practicing his law profession during his entire
presidency) and that, incredibly, he was still receiving payments almost 20 years after. The only
problem is that in his Balance Sheet attached to his 1965 ITR immediately preceeding his
ascendancy to the presidency he did not show any Receivables from client at all, much less the
P10,65-M that he decided to later recognize as income. There are no documents showing any
withholding tax certificates. Likewise, there is nothing on record that will show any known Marcos
client as he has no known law office. As previously stated, his networth was a mere P120,000.00 in
December, 1965. The joint income tax returns of FM and Imelda cannot, therefore, conceal the
skeletons of their kleptocracy.

18. FM reported a total of P2,521,325.00 as Other Income for the years 1972 up to 1976 which he
referred to in his return as "Miscellaneous Items" and "Various Corporations." There is no
indication of any payor of the dividends or earnings.

19. Spouses Ferdinand and Imelda did not declare any income from any deposits and placements
which are subject to a 5% withholding tax. The Bureau of Internal Revenue attested that after a
diligent search of pertinent records on file with the Records Division, they did not find any records
involving the tax transactions of spouses Ferdinand and Imelda in Revenue Region No. 1, Baguio
City, Revenue Region No.4A, Manila, Revenue Region No. 4B1, Quezon City and Revenue No. 8,
Tacloban, Leyte. Likewise, the Office of the Revenue Collector of Batac. Further, BIR attested that
no records were found on any filing of capital gains tax return involving spouses FM and Imelda
covering the years 1960 to 1965.

20. In Schedule B, the taxable reported income over the twenty-year period was P14,463,595.00 which
represents 88% of the gross income. The Marcoses paid income taxes totaling P8,233,296.00 or
US$1,220,667.59. The business expenses in the amount of P861,748.00 represent expenses
incurred for subscription, postage, stationeries and contributions while the other deductions in the
amount of P567,097.00 represents interest charges, medicare fees, taxes and licenses. The total
deductions in the amount of P1,994,845.00 represents 12% of the total gross income.

21. In Schedule C, the net cumulative disposable income amounts to P6,756,301.00 or US$980,709.77.
This is the amount that represents that portion of the Marcoses income that is free for
consumption, savings and investments. The amount is arrived at by adding back to the net income
after tax the personal and additional exemptions for the years 1965-1984, as well as the tax-exempt
salary of the President for the years 1966 until 1972.
22. Finally, the networth analysis in Schedule D, represents the total accumulated networth of spouses,
Ferdinand and Imelda. Respondent's Balance Sheet attached to their 1965 ITR, covering the year
immediately preceding their ascendancy to the presidency, indicates an ending networth of
P120,000.00 which FM declared as Library and Miscellaneous assets. In computing for the
networth, the income approach was utilized. Under this approach, the beginning capital is
increased or decreased, as the case may be, depending upon the income earned or loss incurred.
Computations establish the total networth of spouses Ferdinand and Imelda, for the years 1965
until 1984 in the total amount of US$957,487.75, assuming the income from legal practice is real
and valid x x x.

G. THE SECRET MARCOS DEPOSITS IN SWISS BANKS

23. The following presentation very clearly and overwhelmingly show in detail how both respondents
clandestinely stashed away the country's wealth to Switzerland and hid the same under layers upon
layers of foundations and other corporate entities to prevent its detection. Through their
dummies/nominees, fronts or agents who formed those foundations or corporate entities, they
opened and maintained numerous bank accounts. But due to the difficulty if not the impossibility
of detecting and documenting all those secret accounts as well as the enormity of the deposits
therein hidden, the following presentation is confined to five identified accounts groups, with
balances amounting to about $356-M with a reservation for the filing of a supplemental or separate
forfeiture complaint should the need arise.

H. THE AZIO-VERSO-VIBUR FOUNDATION ACCOUNTS

24. On June 11, 1971, Ferdinand Marcos issued a written order to Dr. Theo Bertheau, legal counsel of
Schweizeresche Kreditanstalt or SKA, also known as Swiss Credit Bank, for him to establish the
AZIO Foundation. On the same date, Marcos executed a power of attorney in favor of Roberto S.
Benedicto empowering him to transact business in behalf of the said foundation. Pursuant to the
said Marcos mandate, AZIO Foundation was formed on June 21, 1971 in Vaduz. Walter Fessler and
Ernst Scheller, also of SKA Legal Service, and Dr. Helmuth Merling from Schaan were designated
as members of the Board of Trustees of the said foundation. Ferdinand Marcos was named first
beneficiary and the Marcos Foundation, Inc. was second beneficiary. On November 12, 1971, FM
again issued another written order naming Austrahil PTY Ltd. In Sydney, Australia, as the
foundation's first and sole beneficiary. This was recorded on December 14, 1971.

25. In an undated instrument, Marcos changed the first and sole beneficiary to CHARIS
FOUNDATION. This change was recorded on December 4, 1972.

26. On August 29, 1978, the AZIO FOUNDATION was renamed to VERSO FOUNDATION. The Board
of Trustees remained the same. On March 11, 1981, Marcos issued a written directive to liquidated
VERSO FOUNDATION and to transfer all its assets to account of FIDES TRUST COMPANY at
Bank Hofman in Zurich under the account "Reference OSER." The Board of Trustees decided to
dissolve the foundation on June 25, 1981.

27. In an apparent maneuver to bury further the secret deposits beneath the thick layers of corporate
entities, FM effected the establishment of VIBUR FOUNDATION on May 13, 1981 in Vaduz. Atty.
Ivo Beck and Limag Management, a wholly-owned subsidiary of Fides Trust, were designated as
members of the Board of Trustees. The account was officially opened with SKA on September 10,
1981. The beneficial owner was not made known to the bank since Fides Trust Company acted as
fiduciary. However, comparison of the listing of the securities in the safe deposit register of the
VERSO FOUNDATION as of February 27, 1981 with that of VIBUR FOUNDATION as of December
31, 1981 readily reveals that exactly the same securities were listed.
28. Under the foregoing circumstances, it is certain that the VIBUR FOUNDATION is the beneficial
successor of VERSO FOUNDATION.

29. On March 18, 1986, the Marcos-designated Board of Trustees decided to liquidate VIBUR
FOUNDATION. A notice of such liquidation was sent to the Office of the Public Register on March
21, 1986. However, the bank accounts and respective balances of the said VIBUR FOUNDATION
remained with SKA. Apparently, the liquidation was an attempt by the Marcoses to transfer the
foundation's funds to another account or bank but this was prevented by the timely freeze order
issued by the Swiss authorities. One of the latest documents obtained by the PCGG from the Swiss
authorities is a declaration signed by Dr. Ivo Beck (the trustee) stating that the beneficial owner of
VIBUR FOUNDATION is Ferdinand E. Marcos. Another document signed by G. Raber of SKA
shows that VIBUR FOUNDATION is owned by the "Marcos Familie"

30. As of December 31, 1989, the balance of the bank accounts of VIBUR FOUNDATION with SKA,
Zurich, under the General Account No. 469857 totaled $3,597,544.00

I. XANDY-WINTROP: CHARIS-SCOLARI- VALAMO-SPINUS-AVERTINA FOUNDATION

ACCOUNTS

31. This is the most intricate and complicated account group. As the Flow Chart hereof shows, two (2)
groups under the foundation organized by Marcos dummies/nominees for FM's benefit, eventually
joined together and became one (1) account group under the AVERTINA FOUNDATION for the
benefit of both FM and Imelda. This is the biggest group from where the $50-M investment fund of
the Marcoses was drawn when they bought the Central Bank's dollar-denominated treasury notes
with high-yielding interests.

32. On March 20, 1968, after his second year in the presidency, Marcos opened bank accounts with
SKA using an alias or pseudonym WILLIAM SAUNDERS, apparently to hide his true identity. The
next day, March 21, 1968, his First Lady, Mrs. Imelda Marcos also opened her own bank accounts
with the same bank using an American-sounding alias, JANE RYAN. Found among the voluminous
documents in Malacañang shortly after they fled to Hawaii in haste that fateful night of February
25, 1986, were accomplished forms for "Declaration/Specimen Signatures" submitted by the
Marcos couple. Under the caption "signature(s)" Ferdinand and Imelda signed their real names as
well as their respective aliases underneath. These accounts were actively operated and maintained
by the Marcoses for about two (2) years until their closure sometime in February, 1970 and the
balances transferred to XANDY FOUNDATION.

33. The XANDY FOUNDATION was established on March 3, 1970 in Vaduz. C.W. Fessler, C. Souviron
and E. Scheller were named as members of the Board of Trustees.

34. FM and Imelda issued the written mandate to establish the foundation to Markus Geel of SKA on
March 3, 1970. In the handwritten Regulations signed by the Marcos couple as well as in the type-
written Regulations signed by Markus Geel both dated February 13, 1970, the Marcos spouses were
named the first beneficiaries, the surviving spouse as the second beneficiary and the Marcos
children - Imee, Ferdinand, Jr. (Bongbong) and Irene - as equal third beneficiaries.

35. The XANDY FOUNDATION was renamed WINTROP FOUNDATION on August 29, 1978. The
Board of Trustees remained the same at the outset. However, on March 27, 1980, Souviron was
replaced by Dr. Peter Ritter. On March 10. 1981, Ferdinand and Imelda Marcos issued a written
order to the Board of Wintrop to liquidate the foundation and transfer all its assets to Bank
Hofmann in Zurich in favor of FIDES TRUST COMPANY. Later, WINTROP FOUNDATION was
dissolved.
36. The AVERTINA FOUNDATION was established on May 13, 1981 in Vaduz with Atty. Ivo Beck and
Limag Management, a wholly-owned subsidiary of FIDES TRUST CO., as members of the Board of
Trustees. Two (2) account categories, namely: CAR and NES, were opened on September 10, 1981.
The beneficial owner of AVERTINA was not made known to the bank since the FIDES TRUST CO.
acted as fiduciary. However, the securities listed in the safe deposit register of WINTROP
FOUNDATION Category R as of December 31, 1980 were the same as those listed in the register of
AVERTINA FOUNDATION Category CAR as of December 31, 1981. Likewise, the securities listed in
the safe deposit register of WINTROP FOUNDATION Category S as of December 31, 1980 were the
same as those listed in the register of Avertina Category NES as of December 31, 1981.Under the
circumstances, it is certain that the beneficial successor of WINTROP FOUNDATION is AVERTINA
FOUNDATION. The balance of Category CAR as of December 31, 1989 amounted to
US$231,366,894.00 while that of Category NES as of 12-31-83 was US$8,647,190.00. Latest
documents received from Swiss authorities included a declaration signed by IVO Beck stating that
the beneficial owners of AVERTINA FOUNDATION are FM and Imelda. Another document signed
by G. Raber of SKA indicates that Avertina Foundation is owned by the "Marcos Families."

37. The other groups of foundations that eventually joined AVERTINA were also established by FM
through his dummies, which started with the CHARIS FOUNDATION.

38. The CHARIS FOUNDATION was established in VADUZ on December 27, 1971. Walter Fessler and
Ernst Scheller of SKA and Dr. Peter Ritter were named as directors. Dr. Theo Bertheau, SKA legal
counsel, acted as founding director in behalf of FM by virtue of the mandate and agreement dated
November 12, 1971. FM himself was named the first beneficiary and Xandy Foundation as second
beneficiary in accordance with the handwritten instructions of FM on November 12, 1971 and the
Regulations. FM gave a power of attorney to Roberto S. Benedicto on February 15, 1972 to act in his
behalf with regard to Charis Foundation.

39. On December 13, 1974, Charis Foundation was renamed Scolari Foundation but the directors
remained the same. On March 11, 1981 FM ordered in writing that the Valamo Foundation be
liquidated and all its assets be transferred to Bank Hofmann, AG in favor of Fides Trust Company
under the account "Reference OMAL". The Board of Directors decided on the immediate
dissolution of Valamo Foundation on June 25, 1981.

40. The SPINUS FOUNDATION was established on May 13, 1981 in Vaduz with Atty. Ivo Beck and
Limag Management, a wholly-owned subsidiary of Fides Trust Co., as members of the Foundation's
Board of Directors. The account was officially opened with SKA on September 10, 1981. The
beneficial owner of the foundation was not made known to the bank since Fides Trust Co. acted as
fiduciary. However, the list of securities in the safe deposit register of Valamo Foundation as of
December 31, 1980 are practically the same with those listed in the safe deposit register of Spinus
Foundation as of December 31, 1981. Under the circumstances, it is certain that the Spinus
Foundation is the beneficial successor of the Valamo Foundation.

41. On September 6, 1982, there was a written instruction from Spinus Foundation to SKA to close its
Swiss Franc account and transfer the balance to Avertina Foundation. In July/August, 1982, several
transfers from the foundation's German marks and US dollar accounts were made to Avertina
Category CAR totaling DM 29.5-M and $58-M, respectively. Moreover, a comparison of the list of
securities of the Spinus Foundation as of February 3, 1982 with the safe deposit slips of the
Avertina Foundation Category CAR as of August 19, 1982 shows that all the securities of Spinus
were transferred to Avertina.

J. TRINIDAD-RAYBY-PALMY FOUNDATION ACCOUNTS

42. The Trinidad Foundation was organized on August 26, 1970 in Vaduz with C.W. Fessler and E.
Scheller of SKA and Dr. Otto Tondury as the foundation's directors. Imelda issued a written
mandate to establish the foundation to Markus Geel on August 26, 1970. The regulations as well as
the agreement, both dated August 28, 1970 were likewise signed by Imelda. Imelda was named the
first beneficiary and her children Imelda (Imee), Ferdinand, Jr. (Bongbong) and, Irene were named
as equal second beneficiaries.

43. Rayby Foundation was established on June 22, 1973 in Vaduz with Fessler, Scheller and Ritter as
members of the board of directors. Imelda issued a written mandate to Dr. Theo Bertheau to
establish the foundation with a note that the foundation's capitalization as well as the cost of
establishing it be debited against the account of Trinidad Foundation. Imelda was named the first
and only beneficiary of Rayby foundation. According to written information from SKA dated
November 28, 1988, Imelda apparently had the intention in 1973 to transfer part of the assets of
Trinidad Foundation to another foundation, thus the establishment of Rayby Foundation.
However, transfer of assets never took place. On March 10, 1981, Imelda issued a written order to
transfer all the assets of Rayby Foundation to Trinidad Foundation and to subsequently liquidate
Rayby. On the same date, she issued a written order to the board of Trinidad to dissolve the
foundation and transfer all its assets to Bank Hofmann in favor of Fides Trust Co. Under the
account "Reference Dido," Rayby was dissolved on April 6, 1981 and Trinidad was liquidated on
August 3, 1981.

44. The PALMY FOUNDATION was established on May 13, 1981 in Vaduz with Dr. Ivo Beck and Limag
Management, a wholly-owned subsidiary of Fides Trust Co, as members of the Foundation's Board
of Directors. The account was officially opened with the SKA on September 10, 1981. The beneficial
owner was not made known to the bank since Fides Trust Co. acted as fiduciary. However, when
one compares the listing of securities in the safe deposit register of Trinidad Foundation as of
December 31,1980 with that of the Palmy Foundation as of December 31, 1980, one can clearly see
that practically the same securities were listed. Under the circumstances, it is certain that the Palmy
Foundation is the beneficial successor of the Trinidad Foundation.

45. As of December 31, 1989, the ending balance of the bank accounts of Palmy Foundation under
General Account No. 391528 is $17,214,432.00.

46. Latest documents received from Swiss Authorities included a declaration signed by Dr. Ivo Beck
stating that the beneficial owner of Palmy Foundation is Imelda. Another document signed by
Raber shows that the said Palmy Foundation is owned by "Marcos Familie".

K. ROSALYS-AGUAMINA FOUNDATION ACCOUNTS

47. Rosalys Foundation was established in 1971 with FM as the beneficiary. Its Articles of Incorporation
was executed on September 24, 1971 and its By-Laws on October 3, 1971. This foundation
maintained several accounts with Swiss Bank Corporation (SBC) under the general account 51960
where most of the bribe monies from Japanese suppliers were hidden.

48. On December 19, 1985, Rosalys Foundation was liquidated and all its assets were transferred to
Aguamina Corporation's (Panama) Account No. 53300 with SBC. The ownership by Aguamina
Corporation of Account No. 53300 is evidenced by an opening account documents from the bank.
J. Christinaz and R.L. Rossier, First Vice-President and Senior Vice President, respectively, of SBC,
Geneva issued a declaration dated September 3, 1991 stating that the by-laws dated October 3, 1971
governing Rosalys Foundation was the same by-law applied to Aguamina Corporation Account No.
53300. They further confirmed that no change of beneficial owner was involved while transferring
the assets of Rosalys to Aguamina. Hence, FM remains the beneficiary of Aguamina Corporation
Account No. 53300.
As of August 30, 1991, the ending balance of Account No. 53300 amounted to $80,566,483.00.

L. MALER FOUNDATION ACCOUNTS

49. Maler was first created as an establishment. A statement of its rules and regulations was found
among Malacañang documents. It stated, among others, that 50% of the Company's assets will be
for sole and full right disposal of FM and Imelda during their lifetime, which the remaining 50%
will be divided in equal parts among their children. Another Malacañang document dated October
19,1968 and signed by Ferdinand and Imelda pertains to the appointment of Dr. Andre Barbey and
Jean Louis Sunier as attorneys of the company and as administrator and manager of all assets held
by the company. The Marcos couple, also mentioned in the said document that they bought the
Maler Establishment from SBC, Geneva. On the same date, FM and Imelda issued a letter
addressed to Maler Establishment, stating that all instructions to be transmitted with regard to
Maler will be signed with the word "JOHN LEWIS". This word will have the same value as the
couple's own personal signature. The letter was signed by FM and Imelda in their signatures and as
John Lewis.

50. Maler Establishment opened and maintained bank accounts with SBC, Geneva. The opening bank
documents were signed by Dr. Barbey and Mr. Sunnier as authorized signatories.

51. On November 17, 1981, it became necessary to transform Maler Establishment into a foundation.
Likewise, the attorneys were changed to Michael Amaudruz, et. al. However, administration of the
assets was left to SBC. The articles of incorporation of Maler Foundation registered on November
17, 1981 appear to be the same articles applied to Maler Establishment. On February 28, 1984,
Maler Foundation cancelled the power of attorney for the management of its assets in favor of SBC
and transferred such power to Sustrust Investment Co., S.A.

52. As of June 6, 1991, the ending balance of Maler Foundation's Account Nos. 254,508 BT and 98,929
NY amount SF 9,083,567 and SG 16,195,258, respectively, for a total of SF 25,278,825.00. GM only
until December 31, 1980. This account was opened by Maler when it was still an establishment
which was subsequently transformed into a foundation.

53. All the five (5) group accounts in the over-all flow chart have a total balance of about Three
Hundred Fifty Six Million Dollars ($356,000,000.00) as shown by Annex "R-5" hereto attached as
integral part hereof.

[27]
x x x x x x.

Respondents Imelda R. Marcos, Maria Imelda M. Manotoc, Irene M. Araneta and Ferdinand Marcos, Jr., in
their answer, stated the following:

xxx xxx xxx

4. Respondents ADMIT paragraphs 3 and 4 of the Petition.

5. Respondents specifically deny paragraph 5 of the Petition in so far as it states that summons and
other court processes may be served on Respondent Imelda R. Marcos at the stated address the
truth of the matter being that Respondent Imelda R. Marcos may be served with summons and
other processes at No. 10-B Bel Air Condominium 5022 P. Burgos Street, Makati, Metro Manila,
and ADMIT the rest.
xxx xxx xxx
10. Respondents ADMIT paragraph 11 of the Petition.

11. Respondents specifically DENY paragraph 12 of the Petition for lack of knowledge sufficient to form
a belief as to the truth of the allegation since Respondents were not privy to the transactions and
that they cannot remember exactly the truth as to the matters alleged.

12. Respondents specifically DENY paragraph 13 of the Petition for lack of knowledge or information
sufficient to form a belief as to the truth of the allegation since Respondents cannot remember with
exactitude the contents of the alleged ITRs and Balance Sheet.

13. Respondents specifically DENY paragraph 14 of the Petition for lack of knowledge or information
sufficient to form a belief as to the truth of the allegation since Respondents cannot remember with
exactitude the contents of the alleged ITRs.

14. Respondents specifically DENY paragraph 15 of the Petition for lack of knowledge or information
sufficient to form a belief as to the truth of the allegation since Respondents cannot remember with
exactitude the contents of the alleged ITRs.

15. Respondents specifically DENY paragraph 16 of the Petition for lack of knowledge or information
sufficient to form a belief as to the truth of the allegation since Respondents cannot remember with
exactitude the contents of the alleged ITRs.

16. Respondents specifically DENY paragraph 17 of the Petition insofar as it attributes willful duplicity
on the part of the late President Marcos, for being false, the same being pure conclusions based on
pure assumption and not allegations of fact; and specifically DENY the rest for lack of knowledge or
information sufficient to form a belief as to the truth of the allegation since Respondents cannot
remember with exactitude the contents of the alleged ITRs or the attachments thereto.

17. Respondents specifically DENY paragraph 18 of the Petition for lack of knowledge or information
sufficient to form a belief as to the truth of the allegation since Respondents cannot remember with
exactitude the contents of the alleged ITRs.

18. Respondents specifically DENY paragraph 19 of the Petition for lack of knowledge or information
sufficient to form a belief as to the truth of the allegation since Respondents cannot remember with
exactitude the contents of the alleged ITRs and that they are not privy to the activities of the BIR.

19. Respondents specifically DENY paragraph 20 of the Petition for lack of knowledge or information
sufficient to form a belief as to the truth of the allegation since Respondents cannot remember with
exactitude the contents of the alleged ITRs.

20. Respondents specifically DENY paragraph 21 of the Petition for lack of knowledge or information
sufficient to form a belief as to the truth of the allegation since Respondents cannot remember with
exactitude the contents of the alleged ITRs.
21. Respondents specifically DENY paragraph 22 of the Petition for lack of knowledge or information
sufficient to form a belief as to the truth of the allegation since Respondents cannot remember with
exactitude the contents of the alleged ITRs.

22. Respondents specifically DENY paragraph 23 insofar as it alleges that Respondents clandestinely
stashed the country's wealth in Switzerland and hid the same under layers and layers of foundation
and corporate entities for being false, the truth being that Respondents aforesaid properties were
lawfully acquired.

23. Respondents specifically DENY paragraphs 24, 25, 26, 27, 28, 29 and 30 of the Petition for lack of
knowledge or information sufficient to form a belief as to the truth of the allegation since
Respondents were not privy to the transactions regarding the alleged Azio-Verso-Vibur Foundation
accounts, except that as to Respondent Imelda R. Marcos she specifically remembers that the funds
involved were lawfully acquired.

24. Respondents specifically DENY paragraphs 31, 32, 33, 34, 35, 36,37, 38, 39, 40, and 41 of the
Petition for lack of knowledge or information sufficient to form a belief as to the truth of the
allegations since Respondents are not privy to the transactions and as to such transaction they were
privy to they cannot remember with exactitude the same having occurred a long time ago, except
that as to Respondent Imelda R. Marcos she specifically remembers that the funds involved were
lawfully acquired.

25. Respondents specifically DENY paragraphs 42, 43, 44, 45, and 46, of the Petition for lack of
knowledge or information sufficient to form a belief as to the truth of the allegations since
Respondents were not privy to the transactions and as to such transaction they were privy to they
cannot remember with exactitude the same having occurred a long time ago, except that as to
Respondent Imelda R. Marcos she specifically remembers that the funds involved were lawfully
acquired.

26. Respondents specifically DENY paragraphs 49, 50, 51 and 52, of the Petition for lack of knowledge
or information sufficient to form a belief as to the truth of the allegations since Respondents were
not privy to the transactions and as to such transaction they were privy to they cannot remember
with exactitude the same having occurred a long time ago, except that as to Respondent Imelda R.
Marcos she specifically remembers that the funds involved were lawfully acquired.

Upon careful perusal of the foregoing, the Court finds that respondent Mrs. Marcos and the Marcos children
indubitably failed to tender genuine issues in their answer to the petition for forfeiture. A genuine issue is an
issue of fact which calls for the presentation of evidence as distinguished from an issue which is fictitious and
contrived, set up in bad faith or patently lacking in substance so as not to constitute a genuine issue for trial.
Respondents' defenses of "lack of knowledge for lack of privity" or "(inability to) recall because it happened a
long time ago" or, on the part of Mrs. Marcos, that "the funds were lawfully acquired" are fully insufficient to
tender genuine issues. Respondent Marcoses' defenses were a sham and evidently calibrated to compound
and confuse the issues.

The following pleadings filed by respondent Marcoses are replete with indications of a spurious defense:
(a) Respondents' Answer dated October 18, 1993;

Pre-trial Brief dated October 4, 1999 of Mrs. Marcos, Supplemental Pre-trial Brief dated
October 19, 1999 of Ferdinand, Jr. and Mrs. Imee Marcos-Manotoc adopting the pre-trial
(b)
brief of Mrs. Marcos, and Manifestation dated October 19, 1999 of Irene Marcos-Araneta
adopting the pre-trial briefs of her co- respondents;

Opposition to Motion for Summary Judgment dated March 21, 2000, filed by Mrs. Marcos
(c)
which the other respondents (Marcos children) adopted;

Demurrer to Evidence dated May 2, 2000 filed by Mrs. Marcos and adopted by the Marcos
(d)
children;

Motion for Reconsideration dated September 26, 2000 filed by Mrs. Marcos; Motion for
Reconsideration dated October 5, 2000 jointly filed by Mrs. Manotoc and Ferdinand, Jr., and
(e)
Supplemental Motion for Reconsideration dated October 9, 2000 likewise jointly filed by Mrs.
Manotoc and Ferdinand, Jr.;

Memorandum dated December 12, 2000 of Mrs. Marcos and Memorandum dated December
(f)
17, 2000 of the Marcos children;

(g) Manifestation dated May 26, 1998; and

(h) General/Supplemental Agreement dated December 23, 1993.

An examination of the foregoing pleadings is in order.

RESPONDENTS' ANSWER DATED OCTOBER 18, 1993.

In their answer, respondents failed to specifically deny each and every allegation contained in the petition for
forfeiture in the manner required by the rules. All they gave were stock answers like "they have no sufficient
knowledge" or "they could not recall because it happened a long time ago," and, as to Mrs. Marcos, "the funds
were lawfully acquired," without stating the basis of such assertions.

Section 10, Rule 8 of the 1997 Rules of Civil Procedure, provides:

A defendant must specify each material allegation of fact the truth of which he does not admit and,
whenever practicable, shall set forth the substance of the matters upon which he relies to support his
denial. Where a defendant desires to deny only a part of an averment, he shall specify so much of it as is
true and material and shall deny the remainder. Where a defendant is without knowledge or information
sufficient to form a belief as to the truth of a material averment made in the complaint, he shall so state,
[28]
and this shall have the effect of a denial.

The purpose of requiring respondents to make a specific denial is to make them disclose facts which will
disprove the allegations of petitioner at the trial, together with the matters they rely upon in support of such
denial. Our jurisdiction adheres to this rule to avoid and prevent unnecessary expenses and waste of time by
compelling both parties to lay their cards on the table, thus reducing the controversy to its true terms. As
explained in Alonso vs. Villamor,[29]
A litigation is not a game of technicalities in which one, more deeply schooled and skilled in the subtle
art of movement and position, entraps and destroys the other. It is rather a contest in which each
contending party fully and fairly lays before the court the facts in issue and then, brushing aside as
wholly trivial and indecisive all imperfections of form and technicalities of procedure, asks that justice
be done upon the merits. Lawsuits, unlike duels, are not to be won by a rapier's thrust.

On the part of Mrs. Marcos, she claimed that the funds were lawfully acquired. However, she failed to
particularly state the ultimate facts surrounding the lawful manner or mode of acquisition of the subject
funds. Simply put, she merely stated in her answer with the other respondents that the funds were "lawfully
acquired" without detailing how exactly these funds were supposedly acquired legally by them. Even in this
case before us, her assertion that the funds were lawfully acquired remains bare and unaccompanied by any
factual support which can prove, by the presentation of evidence at a hearing, that indeed the funds were
acquired legitimately by the Marcos family.

Respondents' denials in their answer at the Sandiganbayan were based on their alleged lack of knowledge or
information sufficient to form a belief as to the truth of the allegations of the petition.

It is true that one of the modes of specific denial under the rules is a denial through a statement that the
defendant is without knowledge or information sufficient to form a belief as to the truth of the material
averment in the complaint. The question, however, is whether the kind of denial in respondents' answer
qualifies as the specific denial called for by the rules. We do not think so. In Morales vs. Court of Appeals,
[30] this Court ruled that if an allegation directly and specifically charges a party with having done,
performed or committed a particular act which the latter did not in fact do, perform or commit, a categorical
and express denial must be made.

Here, despite the serious and specific allegations against them, the Marcoses responded by simply saying that
they had no knowledge or information sufficient to form a belief as to the truth of such allegations. Such a
general, self-serving claim of ignorance of the facts alleged in the petition for forfeiture was insufficient to
raise an issue. Respondent Marcoses should have positively stated how it was that they were supposedly
ignorant of the facts alleged.[31]

To elucidate, the allegation of petitioner Republic in paragraph 23 of the petition for forfeiture stated:
23. The following presentation very clearly and overwhelmingly show in detail how both respondents
clandestinely stashed away the country's wealth to Switzerland and hid the same under layers upon
layers of foundations and other corporate entities to prevent its detection. Through their
dummies/nominees, fronts or agents who formed those foundations or corporate entities, they
opened and maintained numerous bank accounts. But due to the difficulty if not the impossibility
of detecting and documenting all those secret accounts as well as the enormity of the deposits
therein hidden, the following presentation is confined to five identified accounts groups, with
balances amounting to about $356-M with a reservation for the filing of a supplemental or separate
[32]
forfeiture complaint should the need arise.

Respondents' lame denial of the aforesaid allegation was:

22. Respondents specifically DENY paragraph 23 insofar as it alleges that Respondents clandestinely
stashed the country's wealth in Switzerland and hid the same under layers and layers of
foundations and corporate entities for being false, the truth being that Respondents' aforesaid
[33]
properties were lawfully acquired.

Evidently, this particular denial had the earmark of what is called in the law on pleadings as a negative
pregnant, that is, a denial pregnant with the admission of the substantial facts in the pleading responded to
which are not squarely denied. It was in effect an admission of the averments it was directed at.[34] Stated
otherwise, a negative pregnant is a form of negative expression which carries with it an affirmation or at least
an implication of some kind favorable to the adverse party. It is a denial pregnant with an admission of the
substantial facts alleged in the pleading. Where a fact is alleged with qualifying or modifying language and the
words of the allegation as so qualified or modified are literally denied, has been held that the qualifying
circumstances alone are denied while the fact itself is admitted.[35]

In the instant case, the material allegations in paragraph 23 of the said petition were not specifically denied
by respondents in paragraph 22 of their answer. The denial contained in paragraph 22 of the answer was
focused on the averment in paragraph 23 of the petition for forfeiture that "Respondents clandestinely
stashed the country's wealth in Switzerland and hid the same under layers and layers of foundations and
corporate entities." Paragraph 22 of the respondents' answer was thus a denial pregnant with admissions of
the following substantial facts:
(1) the Swiss bank deposits existed and

(2) that the estimated sum thereof was US$356 million as of December, 1990.

Therefore, the allegations in the petition for forfeiture on the existence of the Swiss bank deposits in the sum
of about US$356 million, not having been specifically denied by respondents in their answer, were deemed
admitted by them pursuant to Section 11, Rule 8 of the 1997 Revised Rules on Civil Procedure:

Material averment in the complaint, xxx shall be deemed admitted when not specifically denied. xxx.[36]

By the same token, the following unsupported denials of respondents in their answer were pregnant with
admissions of the substantial facts alleged in the Republic's petition for forfeiture:
23. Respondents specifically DENY paragraphs 24, 25, 26, 27, 28, 29 and 30 of the Petition for lack of
knowledge or information sufficient to form a belief as to the truth of the allegation since
respondents were not privy to the transactions regarding the alleged Azio-Verso-Vibur Foundation
accounts, except that, as to respondent Imelda R. Marcos, she specifically remembers that the
funds involved were lawfully acquired.

24. Respondents specifically DENY paragraphs 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41 of the Petition
for lack of knowledge or information sufficient to form a belief as to the truth of the allegations
since respondents were not privy to the transactions and as to such transactions they were privy to,
they cannot remember with exactitude the same having occurred a long time ago, except as to
respondent Imelda R. Marcos, she specifically remembers that the funds involved were lawfully
acquired.

25. Respondents specifically DENY paragraphs 42, 43, 45, and 46 of the petition for lack of knowledge
or information sufficient to from a belief as to the truth of the allegations since respondents were
not privy to the transactions and as to such transaction they were privy to, they cannot remember
with exactitude, the same having occurred a long time ago, except that as to respondent Imelda R.
Marcos, she specifically remembers that the funds involved were lawfully acquired.

26. Respondents specifically DENY paragraphs 49, 50, 51 and 52 of the petition for lack of knowledge
and information sufficient to form a belief as to the truth of the allegations since respondents were
not privy to the transactions and as to such transaction they were privy to they cannot remember
with exactitude the same having occurred a long time ago, except that as to respondent Imelda R.
Marcos, she specifically remembers that the funds involved were lawfully acquired.

The matters referred to in paragraphs 23 to 26 of the respondents' answer pertained to the creation of five
groups of accounts as well as their respective ending balances and attached documents alleged in paragraphs
24 to 52 of the Republic's petition for forfeiture. Respondent Imelda R. Marcos never specifically denied the
existence of the Swiss funds. Her claim that "the funds involved were lawfully acquired" was an
acknowledgment on her part of the existence of said deposits. This only reinforced her earlier admission of
the allegation in paragraph 23 of the petition for forfeiture regarding the existence of the US$356 million
Swiss bank deposits.

The allegations in paragraphs 47[37] and 48[38] of the petition for forfeiture referring to the creation and
amount of the deposits of the Rosalys-Aguamina Foundation as well as the averment in paragraph 52-a[39]
of the said petition with respect to the sum of the Swiss bank deposits estimated to be US$356 million were
again not specifically denied by respondents in their answer. The respondents did not at all respond to the
issues raised in these paragraphs and the existence, nature and amount of the Swiss funds were therefore
deemed admitted by them. As held in Galofa vs. Nee Bon Sing,[40] if a defendant's denial is a negative
pregnant, it is equivalent to an admission.

Moreover, respondents' denial of the allegations in the petition for forfeiture "for lack of knowledge or
information sufficient to form a belief as to the truth of the allegations since respondents were not privy to
the transactions" was just a pretense. Mrs. Marcos' privity to the transactions was in fact evident from her
signatures on some of the vital documents[41] attached to the petition for forfeiture which Mrs. Marcos failed
to specifically deny as required by the rules.[42]

It is worthy to note that the pertinent documents attached to the petition for forfeiture were even signed
personally by respondent Mrs. Marcos and her late husband, Ferdinand E. Marcos, indicating that said
documents were within their knowledge. As correctly pointed out by Sandiganbayan Justice Francisco
Villaruz, Jr. in his dissenting opinion:
The pattern of: 1) creating foundations, 2) use of pseudonyms and dummies, 3) approving regulations of
the Foundations for the distribution of capital and income of the Foundations to the First and Second
beneficiary (who are no other than FM and his family), 4) opening of bank accounts for the Foundations,
5) changing the names of the Foundations, 6) transferring funds and assets of the Foundations to other
Foundations or Fides Trust, 7) liquidation of the Foundations as substantiated by the Annexes U to U-
168, Petition [for forfeiture] strongly indicate that FM and/or Imelda were the real owners of the assets
[43]
deposited in the Swiss banks, using the Foundations as dummies.

How could respondents therefore claim lack of sufficient knowledge or information regarding the existence of
the Swiss bank deposits and the creation of five groups of accounts when Mrs. Marcos and her late husband
personally masterminded and participated in the formation and control of said foundations? This is a fact
respondent Marcoses were never able to explain.

Not only that. Respondents' answer also technically admitted the genuineness and due execution of the
Income Tax Returns (ITRs) and the balance sheets of the late Ferdinand E. Marcos and Imelda R. Marcos
attached to the petition for forfeiture, as well as the veracity of the contents thereof.

The answer again premised its denials of said ITRs and balance sheets on the ground of lack of knowledge or
information sufficient to form a belief as to the truth of the contents thereof. Petitioner correctly points out
that respondents' denial was not really grounded on lack of knowledge or information sufficient to form a
belief but was based on lack of recollection. By reviewing their own records, respondent Marcoses could have
easily determined the genuineness and due execution of the ITRs and the balance sheets. They also had the
means and opportunity of verifying the same from the records of the BIR and the Office of the President.
They did not.

When matters regarding which respondents claim to have no knowledge or information sufficient to form a
belief are plainly and necessarily within their knowledge, their alleged ignorance or lack of information will
not be considered a specific denial.[44] An unexplained denial of information within the control of the
pleader, or is readily accessible to him, is evasive and is insufficient to constitute an effective denial.[45]
The form of denial adopted by respondents must be availed of with sincerity and in good faith, and certainly
not for the purpose of confusing the adverse party as to what allegations of the petition are really being
challenged; nor should it be made for the purpose of delay.[46] In the instant case, the Marcoses did not
only present unsubstantiated assertions but in truth attempted to mislead and deceive this Court by
presenting an obviously contrived defense.

Simply put, a profession of ignorance about a fact which is patently and necessarily within the pleader's
knowledge or means of knowing is as ineffective as no denial at all.[47] Respondents' ineffective denial thus
failed to properly tender an issue and the averments contained in the petition for forfeiture were deemed
judicially admitted by them.

As held in J.P. Juan & Sons, Inc. vs. Lianga Industries, Inc.:
Its "specific denial" of the material allegation of the petition without setting forth the substance of the
matters relied upon to support its general denial, when such matters were plainly within its knowledge
and it could not logically pretend ignorance as to the same, therefore, failed to properly tender on issue.
[48]

Thus, the general denial of the Marcos children of the allegations in the petition for forfeiture "for lack of
knowledge or information sufficient to form a belief as to the truth of the allegations since they were not privy
to the transactions" cannot rightfully be accepted as a defense because they are the legal heirs and successors-
in-interest of Ferdinand E. Marcos and are therefore bound by the acts of their father vis-a-vis the Swiss
funds.

PRE-TRIAL BRIEF DATED OCTOBER 18, 1993

The pre-trial brief of Mrs. Marcos was adopted by the three Marcos children. In said brief, Mrs. Marcos
stressed that the funds involved were lawfully acquired. But, as in their answer, they failed to state and
substantiate how these funds were acquired lawfully. They failed to present and attach even a single
document that would show and prove the truth of their allegations. Section 6, Rule 18 of the 1997 Rules of
Civil Procedure provides:
The parties shall file with the court and serve on the adverse party, x x x their respective pre-trial briefs
which shall contain, among others:

xxx

(d) the documents or exhibits to be presented, stating the purpose thereof;

xxx

[49]
(f) the number and names of the witnesses, and the substance of their respective testimonies.

It is unquestionably within the court's power to require the parties to submit their pre-trial briefs and to state
the number of witnesses intended to be called to the stand, and a brief summary of the evidence each of them
is expected to give as well as to disclose the number of documents to be submitted with a description of the
nature of each. The tenor and character of the testimony of the witnesses and of the documents to be deduced
at the trial thus made known, in addition to the particular issues of fact and law, it becomes apparent if
genuine issues are being put forward necessitating the holding of a trial. Likewise, the parties are obliged not
only to make a formal identification and specification of the issues and their proofs, and to put these matters
in writing and submit them to the court within the specified period for the prompt disposition of the action.
[50]
The pre-trial brief of Mrs. Marcos, as subsequently adopted by respondent Marcos children, merely stated:

xxx

WITNESSES
4.1 Respondent Imelda will present herself as a witness and reserves the right to present additional
witnesses as may be necessary in the course of the trial.

xxx

DOCUMENTARY EVIDENCE

5.1 Respondent Imelda reserves the right to present and introduce in evidence documents as may be
necessary in the course of the trial.

Mrs. Marcos did not enumerate and describe the documents constituting her evidence. Neither the names of
witnesses nor the nature of their testimony was stated. What alone appeared certain was the testimony of
Mrs. Marcos only who in fact had previously claimed ignorance and lack of knowledge. And even then, the
substance of her testimony, as required by the rules, was not made known either. Such cunning tactics of
respondents are totally unacceptable to this Court. We hold that, since no genuine issue was raised, the case
became ripe for summary judgment.

OPPOSITION TO MOTION FOR SUMMARY JUDGMENT DATED MARCH 21, 2000

The opposition filed by Mrs. Marcos to the motion for summary judgment dated March 21, 2000 of petitioner
Republic was merely adopted by the Marcos children as their own opposition to the said motion. However, it
was again not accompanied by affidavits, depositions or admissions as required by Section 3, Rule 35 of the
1997 Rules on Civil Procedure:
x x x The adverse party may serve opposing affidavits, depositions, or admissions at least three (3) days
before hearing. After hearing, the judgment sought shall be rendered forthwith if the pleadings,
supporting affidavits, depositions, and admissions on file, show that, except as to the amount of
damages, there is no genuine issue as to any material fact and that the moving party is entitled to a
[51]
judgment as a matter of law.

The absence of opposing affidavits, depositions and admissions to contradict the sworn declarations in the
Republic's motion only demonstrated that the averments of such opposition were not genuine and therefore
unworthy of belief.

DEMURRER TO EVIDENCE DATED MAY 2, 2000;[52] MOTIONS FOR RECONSIDERATION;

[53] AND MEMORANDA OF MRS. MARCOS AND THE MARCOS CHILDREN[54]

All these pleadings again contained no allegations of facts showing their lawful acquisition of the funds. Once
more, respondents merely made general denials without alleging facts which would have been admissible in
evidence at the hearing, thereby failing to raise genuine issues of fact.

Mrs. Marcos insists in her memorandum dated October 21, 2002 that, during the pre-trial, her counsel stated
that his client was just a beneficiary of the funds, contrary to petitioner Republic's allegation that Mrs.
Marcos disclaimed ownership of or interest in the funds.

This is yet another indication that respondents presented a fictitious defense because, during the pre-trial,
Mrs. Marcos and the Marcos children denied ownership of or interest in the Swiss funds:
PJ Garchitorena:

Make of record that as far as Imelda Marcos is concerned through the statement of Atty. Armando M.
Marcelo that the US$360 million more or less subject matter of the instant lawsuit as allegedly obtained
from the various Swiss Foundations do not belong to the estate of Marcos or to Imelda Marcos herself.
That's your statement of facts?

Atty. MARCELO:

Yes, Your Honor.

PJ Garchitorena:

That's it. Okay. Counsel for Manotoc and Manotoc, Jr. What is your point here? Does the
estate of Marcos own anything of the $360 million subject of this case.

Atty. TECSON:

We joined the Manifestation of Counsel.

PJ Garchitorena:

You do not own anything?

Atty. TECSON:

Yes, Your Honor.

PJ Garchitorena:

Counsel for Irene Araneta?

Atty. SISON:

I join the position taken by my other compañeros here, Your Honor.

xxx

Atty. SISON:

[55]
Irene Araneta as heir do (sic) not own any of the amount, Your Honor.

We are convinced that the strategy of respondent Marcoses was to confuse petitioner Republic as to what
facts they would prove or what issues they intended to pose for the court's resolution. There is no doubt in
our mind that they were leading petitioner Republic, and now this Court, to perplexity, if not trying to drag
this forfeiture case to eternity.

MANIFESTATION DATED MAY 26, 1998 FILED BY MRS. MARCOS;

GENERAL/SUPPLEMENTAL COMPROMISE AGREEMENT DATED DECEMBER 28, 1993

These pleadings of respondent Marcoses presented nothing but feigned defenses. In their earlier pleadings,
respondents alleged either that they had no knowledge of the existence of the Swiss deposits or that they
could no longer remember anything as it happened a long time ago. As to Mrs. Marcos, she remembered that
it was lawfully acquired.

In her Manifestation dated May 26, 1998, Mrs. Marcos stated that:
COMES NOW undersigned counsel for respondent Imelda R. Marcos, and before this Honorable Court,
most respectfully manifests:

That respondent Imelda R, Marcos owns 90% of the subject matter of the above-entitled case, being the
sole beneficiary of the dollar deposits in the name of the various foundations alleged in the case;

That in fact only 10% of the subject matter in the above-entitled case belongs to the estate of the late
President Ferdinand E. Marcos.

In the Compromise/Supplemental Agreements, respondent Marcoses sought to implement the agreed

distribution of the Marcos assets, including the Swiss deposits. This was, to us, an unequivocal admission of
ownership by the Marcoses of the said deposits.

But, as already pointed out, during the pre-trial conference, respondent Marcoses denied knowledge as well
as ownership of the Swiss funds.

Anyway we look at it, respondent Marcoses have put forth no real defense. The "facts" pleaded by
respondents, while ostensibly raising important questions or issues of fact, in reality comprised mere
verbiage that was evidently wanting in substance and constituted no genuine issues for trial.

We therefore rule that, under the circumstances, summary judgment is proper.

In fact, it is the law itself which determines when summary judgment is called for. Under the rules, summary
judgment is appropriate when there are no genuine issues of fact requiring the presentation of evidence in a
full-blown trial. Even if on their face the pleadings appear to raise issue, if the affidavits, depositions and
admissions show that such issues are not genuine, then summary judgment as prescribed by the rules must
ensue as a matter of law.[56]

In sum, mere denials, if unaccompanied by any fact which will be admissible in evidence at a hearing, are not
sufficient to raise genuine issues of fact and will not defeat a motion for summary judgment.[57] A summary
judgment is one granted upon motion of a party for an expeditious settlement of the case, it appearing from
the pleadings, depositions, admissions and affidavits that there are no important questions or issues of fact
posed and, therefore, the movant is entitled to a judgment as a matter of law. A motion for summary
judgment is premised on the assumption that the issues presented need not be tried either because these are
patently devoid of substance or that there is no genuine issue as to any pertinent fact. It is a method
sanctioned by the Rules of Court for the prompt disposition of a civil action where there exists no serious
controversy.[58] Summary judgment is a procedural device for the prompt disposition of actions in which the
pleadings raise only a legal issue, not a genuine issue as to any material fact. The theory of summary
judgment is that, although an answer may on its face appear to tender issues requiring trial, if it is established
by affidavits, depositions or admissions that those issues are not genuine but fictitious, the Court is justified
in dispensing with the trial and rendering summary judgment for petitioner.[59]

In the various annexes to the petition for forfeiture, petitioner Republic attached sworn statements of
witnesses who had personal knowledge of the Marcoses' participation in the illegal acquisition of funds
deposited in the Swiss accounts under the names of five groups or foundations. These sworn statements
substantiated the ill-gotten nature of the Swiss bank deposits. In their answer and other subsequent
pleadings, however, the Marcoses merely made general denials of the allegations against them without
stating facts admissible in evidence at the hearing, thereby failing to raise any genuine issues of fact.
Under these circumstances, a trial would have served no purpose at all and would have been totally
unnecessary, thus justifying a summary judgment on the petition for forfeiture. There were no opposing
affidavits to contradict the sworn declarations of the witnesses of petitioner Republic, leading to the
inescapable conclusion that the matters raised in the Marcoses' answer were false.

Time and again, this Court has encountered cases like this which are either only half-heartedly defended or, if
the semblance of a defense is interposed at all, it is only to delay disposition and gain time. It is certainly not
in the interest of justice to allow respondent Marcoses to avail of the appellate remedies accorded by the
Rules of Court to litigants in good faith, to the prejudice of the Republic and ultimately of the Filipino people.
From the beginning, a candid demonstration of respondents' good faith should have been made to the court
below. Without the deceptive reasoning and argumentation, this protracted litigation could have ended a long
time ago.

Since 1991, when the petition for forfeiture was first filed, up to the present, all respondents have offered are
foxy responses like "lack of sufficient knowledge or lack of privity" or "they cannot recall because it happened
a long time ago" or, as to Mrs. Marcos, "the funds were lawfully acquired." But, whenever it suits them, they
also claim ownership of 90% of the funds and allege that only 10% belongs to the Marcos estate. It has been
an incredible charade from beginning to end.

In the hope of convincing this Court to rule otherwise, respondents Maria Imelda Marcos-Manotoc and
Ferdinand R. Marcos Jr. contend that by its positive acts and express admissions prior to filing the motion for
summary judgment on March 10, 2000, petitioner Republic had bound itself to go to trial on the basis of
existing issues. Thus, it had legally waived whatever right it had to move for summary judgment.[60]

We do not think so. The alleged positive acts and express admissions of the petitioner did not preclude it
from filing a motion for summary judgment.

Rule 35 of the 1997 Rules of Civil Procedure provides:

Rule 35

Summary Judgment
Section 1. Summary judgment for claimant. - A party seeking to recover upon a claim, counterclaim, or
cross-claim or to obtain a declaratory relief may, at any time after the pleading in answer
thereto has been served, move with supporting affidavits, depositions or admissions for a summary
judgment in his favor upon all or any part thereof.

Section 2. Summary judgment for defending party. - A party against whom a claim, counterclaim, or
cross-claim is asserted or a declaratory relief is sought may, at any time, move with supporting
affidavits, depositions or admissions for a summary judgment in his favor as to all or any part thereof.
[61]
(Emphasis ours)

Under the rule, the plaintiff can move for summary judgment "at any time after the pleading in answer
thereto (i.e., in answer to the claim, counterclaim or cross-claim) has been served. No fixed reglementary
period is provided by the Rules. How else does one construe the phrase any time after the answer has been
served?"

This issue is actually one of first impression. No local jurisprudence or authoritative work has touched upon
this matter. This being so, an examination of foreign laws and jurisprudence, particularly those of the United
States where many of our laws and rules were copied, is in order.

Rule 56 of the Federal Rules of Civil Procedure provides that a party seeking to recover upon a claim,
counterclaim or cross-claim may move for summary judgment at any time after the expiration of 20 days
from the commencement of the actionor after service of a motion for summary judgment by the adverse
party, and that a party against whom a claim, counterclaim or cross-claim is asserted may move for summary
judgment at any time.

However, some rules, particularly Rule 113 of the Rules of Civil Practice of New York, specifically provide that
a motion for summary judgment may not be made until issues have been joined, that is, only after an answer
has been served.[62] Under said rule, after issues have been joined, the motion for summary judgment may
be made at any stage of the litigation.[63] No fixed prescriptive period is provided.

Like Rule 113 of the Rules of Civil Practice of New York, our rules also provide that a motion for summary
judgment may not be made until issues have been joined, meaning, the plaintiff has to wait for the answer
before he can move for summary judgment.[64] And like the New York rules, ours do not provide for a fixed
reglementary period within which to move for summary judgment.

This being so, the New York Supreme Court's interpretation of Rule 113 of the Rules of Civil Practice can be
applied by analogy to the interpretation of Section 1, Rule 35, of our 1997 Rules of Civil Procedure.

Under the New York rule, after the issues have been joined, the motion for summary judgment may be made
at any stage of the litigation. And what exactly does the phrase at any stage of the litigation mean? In Ecker
vs. Muzysh,[65] the New York Supreme Court ruled:
PER CURIAM.

Plaintiff introduced her evidence and the defendants rested on the case made by the plaintiff. The case
was submitted. Owing to the serious illness of the trial justice, a decision was not rendered within sixty
days after the final adjournment of the term at which the case was tried. With the approval of the trial
justice, the plaintiff moved for a new trial under Section 442 of the Civil Practice Act. The plaintiff also
moved for summary judgment under Rule 113 of the Rules of Civil Practice. The motion was
opposed mainly on the ground that, by proceeding to trial, the plaintiff had waived her
right to summary judgment and that the answer and the opposing affidavits raised triable issues.
The amount due and unpaid under the contract is not in dispute. The Special Term granted both
motions and the defendants have appealed.

The Special Term properly held that the answer and the opposing affidavits raised no triable issue. Rule
113 of the Rules of Civil Practice and the Civil Practice Act prescribe no limitation as to
the time when a motion for summary judgment must be made. The object of Rule 113 is
to empower the court to summarily determine whether or not a bona fide issue exists
between the parties, and there is no limitation on the power of the court to make such a
determination at any stage of the litigation. (emphasis ours)

On the basis of the aforequoted disquisition, any stage of the litigation means that even if the plaintiff has
proceeded to trial, this does not preclude him from thereafter moving for summary judgment.[66]

In the case at bar, petitioner moved for summary judgment after pre-trial and before its scheduled date for
presentation of evidence. Respondent Marcoses argue that, by agreeing to proceed to trial during the pre-trial
conference, petitioner waived its right to summary judgment.

This argument must fail in the light of the New York Supreme Court ruling which we apply by analogy to this
case. In Ecker,[67] the defendant opposed the motion for summary judgment on a ground similar to that
raised by the Marcoses, that is, that plaintiff had waived her right to summary judgment by her act of
proceeding to trial. If, as correctly ruled by the New York court, plaintiff was allowed to move for summary
judgment even after trial and submission of the case for resolution, more so should we permit it in the
present case where petitioner moved for summary judgment before trial.

Therefore, the phrase anytime after the pleading in answer thereto has been served in Section 1, Rule 35 of
our Rules of Civil Procedure means at any stage of the litigation. Whenever it becomes evident at any stage of
the litigation that no triable issue exists, or that the defenses raised by the defendant(s) are sham or frivolous,
plaintiff may move for summary judgment. A contrary interpretation would go against the very objective of
the Rule on Summary Judgment which is to weed out sham claims or defenses thereby avoiding the expense
and loss of time involved in a trial.[68]

In cases with political undertones like the one at bar, adverse parties will often do almost anything to delay
the proceedings in the hope that a future administration sympathetic to them might be able to influence the
outcome of the case in their favor. This is rank injustice we cannot tolerate.

The law looks with disfavor on long, protracted and expensive litigation and encourages the speedy and
prompt disposition of cases. That is why the law and the rules provide for a number of devices to ensure the
speedy disposition of cases. Summary judgment is one of them.

Faithful therefore to the spirit of the law on summary judgment which seeks to avoid unnecessary expense
and loss of time in a trial, we hereby rule that petitioner Republic could validly move for summary judgment
any time after the respondents' answer was filed or, for that matter, at any subsequent stage of the litigation.
The fact that petitioner agreed to proceed to trial did not in any way prevent it from moving for summary
judgment, as indeed no genuine issue of fact was ever validly raised by respondent Marcoses.

This interpretation conforms with the guiding principle enshrined in Section 6, Rule 1 of the 1997 Rules of
Civil Procedure that the [r]ules should be liberally construed in order to promote their objective of securing a
just, speedy and inexpensive disposition of every action and proceeding.[69]

Respondents further allege that the motion for summary judgment was based on respondents' answer and
other documents that had long been in the records of the case. Thus, by the time the motion was filed on
March 10, 2000, estoppel by laches had already set in against petitioner.

We disagree. Estoppel by laches is the failure or neglect for an unreasonable or unexplained length of time to
do that which, by exercising due diligence, could or should have been done earlier, warranting a presumption
that the person has abandoned his right or declined to assert it.[70] In effect, therefore, the principle of
laches is one of estoppel because it prevents people who have slept on their rights from prejudicing the rights
of third parties who have placed reliance on the inaction of the original parties and their successors-in-
interest.[71]

A careful examination of the records, however, reveals that petitioner was in fact never remiss in pursuing its
case against respondent Marcoses through every remedy available to it, including the motion for summary
judgment.

Petitioner Republic initially filed its motion for summary judgment on October 18, 1996. The motion was
denied because of the pending compromise agreement between the Marcoses and petitioner. But during the
pre-trial conference, the Marcoses denied ownership of the Swiss funds, prompting petitioner to file another
motion for summary judgment now under consideration by this Court. It was the subsequent events that
transpired after the answer was filed, therefore, which prevented petitioner from filing the questioned
motion. It was definitely not because of neglect or inaction that petitioner filed the (second) motion for
summary judgment years after respondents' answer to the petition for forfeiture.

In invoking the doctrine of estoppel by laches, respondents must show not only unjustified inaction but also
that some unfair injury to them might result unless the action is barred.[72]
This, respondents failed to bear out. In fact, during the pre-trial conference, the Marcoses disclaimed
ownership of the Swiss deposits. Not being the owners, as they claimed, respondents did not have any vested
right or interest which could be adversely affected by petitioner's alleged inaction.

But even assuming for the sake of argument that laches had already set in, the doctrine of estoppel or laches
does not apply when the government sues as a sovereign or asserts governmental rights.[73] Nor can estoppel
validate an act that contravenes law or public policy.[74]

As a final point, it must be emphasized that laches is not a mere question of time but is principally a question
of the inequity or unfairness of permitting a right or claim to be enforced or asserted.[75] Equity demands
that petitioner Republic should not be barred from pursuing the people's case against the Marcoses.

(2) The Propriety of Forfeiture

The matter of summary judgment having been thus settled, the issue of whether or not petitioner Republic
was able to prove its case for forfeiture in accordance with the requisites of Sections 2 and 3 of RA 1379 now
takes center stage.

The law raises the prima facie presumption that a property is unlawfully acquired, hence subject to forfeiture,
if its amount or value is manifestly disproportionate to the official salary and other lawful income of the
public officer who owns it. Hence, Sections 2 and 6 of RA 1379[76] provide:

xxxxxx
Section 2. Filing of petition. - Whenever any public officer or employee has acquired during his
incumbency an amount or property which is manifestly out of proportion to his salary as such public
officer or employee and to his other lawful income and the income from legitimately acquired property,
said property shall be presumed prima facie to have been unlawfully acquired.

xxxxxx

Sec. 6. Judgment - If the respondent is unable to show to the satisfaction of the court that he has
lawfully acquired the property in question, then the court shall declare such property in question,
forfeited in favor of the State, and by virtue of such judgment the property aforesaid shall become the
property of the State. Provided, That no judgment shall be rendered within six months before any
general election or within three months before any special election. The Court may, in addition, refer
this case to the corresponding Executive Department for administrative or criminal action, or both.

From the above-quoted provisions of the law, the following facts must be established in order that forfeiture
or seizure of the Swiss deposits may be effected:
ownership by the public officer of money or property acquired during his incumbency,
(1)
whether it be in his name or otherwise, and

the extent to which the amount of that money or property exceeds, i. e., is grossly
(2)
disproportionate to, the legitimate income of the public officer.

That spouses Ferdinand and Imelda Marcos were public officials during the time material to the instant case
was never in dispute. Paragraph 4 of respondent Marcoses' answer categorically admitted the allegations in
paragraph 4 of the petition for forfeiture as to the personal circumstances of Ferdinand E. Marcos as a public
official who served without interruption as Congressman, Senator, Senate President and President of the
Republic of the Philippines from December 1, 1965 to February 25, 1986.[77] Likewise, respondents admitted
in their answer the contents of paragraph 5 of the petition as to the personal circumstances of Imelda R.
Marcos who once served as a member of the Interim Batasang Pambansa from 1978 to 1984 and as Metro
[ 8]
Manila Governor, concurrently Minister of Human Settlements, from June 1976 to February 1986.[78]

Respondent Mrs. Marcos also admitted in paragraph 10 of her answer the allegations of paragraph 11 of the
petition for forfeiture which referred to the accumulated salaries of respondents Ferdinand E. Marcos and
Imelda R. Marcos.[79] The combined accumulated salaries of the Marcos couple were reflected in the
Certification dated May 27, 1986 issued by then Minister of Budget and Management Alberto Romulo.[80]
The Certification showed that, from 1966 to 1985, Ferdinand E. Marcos and Imelda R. Marcos had
accumulated salaries in the amount of P1,570,000 and P718,750, respectively, or a total of P2,288,750:
FERDINAND E. MARCOS, AS PRESIDENT

1966-1976 at P60,000/year P660,000

1977-1984 at P100,000/year 800,000
1985 at P110,000/year 110,000
P1,570,00
IMELDA R. MARCOS, AS MINISTER

June 1976-1985 at P75,000/year P718,000

In addition to their accumulated salaries from 1966 to 1985 are the Marcos couple's combined salaries from
January to February 1986 in the amount of P30,833.33. Hence, their total accumulated salaries amounted to
P2,319,583.33. Converted to U.S. dollars on the basis of the corresponding peso-dollar exchange rates
prevailing during the applicable period when said salaries were received, the total amount had an equivalent
value of $304,372.43.

The dollar equivalent was arrived at by using the official annual rates of exchange of the Philippine peso and
the US dollar from 1965 to 1985 as well as the official monthly rates of exchange in January and February
1986 issued by the Center for Statistical Information of the Bangko Sentral ng Pilipinas.

Prescinding from the aforesaid admissions, Section 4, Rule 129 of the Rules of Court provides that:
Section 4. - Judicial admissions - An admission, verbal or written, made by a party in the course of the
proceedings in the same case does not require proof. The admission may be contradicted only by
[81]
showing that it was made through palpable mistake or that no such admission was made.

It is settled that judicial admissions may be made: (a) in the pleadings filed by the parties; (b) in the course of
the trial either by verbal or written manifestations or stipulations; or (c) in other stages of judicial
proceedings, as in the pre-trial of the case.[82] Thus, facts pleaded in the petition and answer, as in the case
at bar, are deemed admissions of petitioner and respondents, respectively, who are not permitted to
contradict them or subsequently take a position contrary to or inconsistent with such admissions.[83]

The sum of $304,372.43 should be held as the only known lawful income of respondents since they did not
file any Statement of Assets and Liabilities (SAL), as required by law, from which their net worth could be
determined. Besides, under the 1935 Constitution, Ferdinand E. Marcos as President could not receive "any
other emolument from the Government or any of its subdivisions and instrumentalities".[84] Likewise, under
the 1973 Constitution, Ferdinand E. Marcos as President could "not receive during his tenure any other
emolument from the Government or any other source."[85] In fact, his management of businesses, like the
administration of foundations to accumulate funds, was expressly prohibited under the 1973 Constitution:
Article VII, Sec. 4(2) - The President and the Vice-President shall not, during their tenure, hold any
other office except when otherwise provided in this Constitution, nor may they practice any profession,
participate directly or indirectly in the management of any business, or be financially interested directly
or indirectly in any contract with, or in any franchise or special privilege granted by the Government or
any other subdivision, agency, or instrumentality thereof, including any government owned or
controlled corporation.

Article VII, Sec. 11 - No Member of the National Assembly shall appear as counsel before any court
inferior to a court with appellate jurisdiction, x x x. Neither shall he, directly or indirectly, be interested
financially in any contract with, or in any franchise or special privilege granted by the Government, or
any subdivision, agency, or instrumentality thereof including any government owned or controlled
corporation during his term of office. He shall not intervene in any matter before any office of the
government for his pecuniary benefit.

Article IX, Sec. 7 - The Prime Minister and Members of the Cabinet shall be subject to the provision of
Section 11, Article VIII hereof and may not appear as counsel before any court or administrative body, or
manage any business, or practice any profession, and shall also be subject to such other disqualification
as may be provided by law.

Their only known lawful income of $304,372.43 can therefore legally and fairly serve as basis for determining
the existence of a prima facie case of forfeiture of the Swiss funds.

Respondents argue that petitioner was not able to establish a prima facie case for the forfeiture of the Swiss
funds since it failed to prove the essential elements under Section 3, paragraphs (c), (d) and (e) of RA 1379.
As the Act is a penal statute, its provisions are mandatory and should thus be construed strictly against the
petitioner and liberally in favor of respondent Marcoses.

We hold that it was not for petitioner to establish the Marcoses' other lawful income or income from
legitimately acquired property for the presumption to apply because, as between petitioner and respondents,
the latter were in a better position to know if there were such other sources of lawful income. And if indeed
there was such other lawful income, respondents should have specifically stated the same in their answer.
Insofar as petitioner Republic was concerned, it was enough to specify the known lawful income of
respondents.

Section 9 of the PCGG Rules and Regulations provides that, in determining prima facie evidence of ill-gotten
wealth, the value of the accumulated assets, properties and other material possessions of those covered by
Executive Order Nos. 1 and 2 must be out of proportion to the known lawful income of such persons. The
respondent Marcos couple did not file any Statement of Assets and Liabilities (SAL) from which their net
worth could be determined. Their failure to file their SAL was in itself a violation of law and to allow them to
successfully assail the Republic for not presenting their SAL would reward them for their violation of the law.

Further, contrary to the claim of respondents, the admissions made by them in their various pleadings and
documents were valid. It is of record that respondents judicially admitted that the money deposited with the
Swiss banks belonged to them.

We agree with petitioner that respondent Marcoses made judicial admissions of their ownership of the
subject Swiss bank deposits in their answer, the General/Supplemental Agreements, Mrs. Marcos'
Manifestation and Constancia dated May 5, 1999, and the Undertaking dated February 10, 1999. We take
note of the fact that the Associate Justices of the Sandiganbayan were unanimous in holding that respondents
had made judicial admissions of their ownership of the Swiss funds.
In their answer, aside from admitting the existence of the subject funds, respondents likewise admitted
ownership thereof. Paragraph 22 of respondents' answer stated:
22. Respondents specifically DENY PARAGRAPH 23 insofar as it alleges that respondents
clandestinely stashed the country's wealth in Switzerland and hid the same under layers and layers
of foundations and corporate entities for being false, the truth being that respondents' aforesaid
properties were lawfully acquired. (emphasis supplied)

By qualifying their acquisition of the Swiss bank deposits as lawful, respondents unwittingly admitted their
ownership thereof.

Respondent Mrs. Marcos also admitted ownership of the Swiss bank deposits by failing to deny under oath
the genuineness and due execution of certain actionable documents bearing her signature attached to the
petition. As discussed earlier, Section 11, Rule 8[86] of the 1997 Rules of Civil Procedure provides that
material averments in the complaint shall be deemed admitted when not specifically denied.

The General[87] and Supplemental[88] Agreements executed by petitioner and respondents on December
28, 1993 further bolstered the claim of petitioner Republic that its case for forfeiture was proven in
accordance with the requisites of Sections 2 and 3 of RA 1379. The whereas clause in the General Agreement
declared that:
WHEREAS, the FIRST PARTY has obtained a judgment from the Swiss Federal Tribunal on December
21, 1990, that the $356 million belongs in principle to the Republic of the Philippines provided certain
conditionalities are met, but even after 7 years, the FIRST PARTY has not been able to procure a final
judgment of conviction against the PRIVATE PARTY.

While the Supplemental Agreement warranted, inter alia, that:

In consideration of the foregoing, the parties hereby agree that the PRIVATE PARTY shall be entitled to
the equivalent of 25% of the amount that may be eventually withdrawn from said $356 million Swiss
deposits.

The stipulations set forth in the General and Supplemental Agreements undeniably indicated the manifest
intent of respondents to enter into a compromise with petitioner. Corollarily, respondents' willingness to
agree to an amicable settlement with the Republic only affirmed their ownership of the Swiss deposits for the
simple reason that no person would acquiesce to any concession over such huge dollar deposits if he did not
in fact own them.

Respondents make much capital of the pronouncement by this Court that the General and Supplemental
Agreements were null and void.[89] They insist that nothing in those agreements could thus be admitted in
evidence against them because they stood on the same ground as an accepted offer which, under Section 27,
Rule 130[90] of the 1997 Rules of Civil Procedure, provides that "in civil cases, an offer of compromise is not
an admission of any liability and is not admissible in evidence against the offeror."

We find no merit in this contention. The declaration of nullity of said agreements was premised on the
following constitutional and statutory infirmities: (1) the grant of criminal immunity to the Marcos heirs was
against the law; (2) the PCGG's commitment to exempt from all forms of taxes the properties to be retained
by the Marcos heirs was against the Constitution; and (3) the government's undertaking to cause the
dismissal of all cases filed against the Marcoses pending before the Sandiganbayan and other courts
encroached on the powers of the judiciary. The reasons relied upon by the Court never in the least bit even
touched on the veracity and truthfulness of respondents' admission with respect to their ownership of the
Swiss funds. Besides, having made certain admissions in those agreements, respondents cannot now deny
that they voluntarily admitted owning the subject Swiss funds, notwithstanding the fact that the agreements
themselves were later declared null and void.
The following observation of Sandiganbayan Justice Catalino Castañeda, Jr. in the decision dated September
19, 2000 could not have been better said:
x x x The declaration of nullity of the two agreements rendered the same without legal effects but it did
not detract from the admissions of the respondents contained therein. Otherwise stated, the admissions
[91]
made in said agreements, as quoted above, remain binding on the respondents.

A written statement is nonetheless competent as an admission even if it is contained in a document which is

not itself effective for the purpose for which it is made, either by reason of illegality, or incompetency of a
party thereto, or by reason of not being signed, executed or delivered. Accordingly, contracts have been held
as competent evidence of admissions, although they may be unenforceable.[92]

The testimony of respondent Ferdinand Marcos, Jr. during the hearing on the motion for the approval of the
Compromise Agreement on April 29, 1998 also lent credence to the allegations of petitioner Republic that
respondents admitted ownership of the Swiss bank accounts. We quote the salient portions of Ferdinand Jr.'s
formal declarations in open court:
ATTY. FERNANDO:

Mr. Marcos, did you ever have any meetings with PCGG Chairman Magtanggol C.
Gunigundo?

F. MARCOS, JR.:

Yes. I have had very many meetings in fact with Chairman.

ATTY. FERNANDO:

Would you recall when the first meeting occurred?

PJ GARCHITORENA:

In connection with what?

ATTY. FERNANDO:

In connection with the ongoing talks to compromise the various cases initiated by PCGG
against your family?

F. MARCOS, JR.:

The nature of our meetings was solely concerned with negotiations towards achieving some
kind of agreement between the Philippine government and the Marcos family. The
discussions that led up to the compromise agreement were initiated by our then counsel Atty.
[93]
Simeon Mesina x x x.

xxx xxx xxx

ATTY. FERNANDO:

What was your reaction when Atty. Mesina informed you of this possibility?

F. MARCOS, JR.:

My reaction to all of these approaches is that I am always open, we are always open, we are
very much always in search of resolution to the problem of the family and any approach that
has been made us, we have entertained. And so my reaction was the same as what I have
[94]
always ... why not? Maybe this is the one that will finally put an end to this problem.

xxx xxx xxx

ATTY. FERNANDO:

Basically, what were the true amounts of the assets in the bank?

PJ GARCHITORENA:

So, we are talking about liquid assets here? Just Cash?

F. MARCOS, JR.:
Well, basically, any assets. Anything that was under the Marcos name in any of the banks in
[95]
Switzerland which may necessarily be not cash.

xxx xxx xxx

PJ GARCHITORENA:

x x x What did you do in other words, after being apprised of this contract in connection
herewith?

F. MARCOS, JR.:

I assumed that we are beginning to implement the agreement because this was forwarded
through the Philippine government lawyers through our lawyers and then, subsequently, to
me. I was a little surprised because we hadn't really discussed the details of the transfer of the
funds, what the bank accounts, what the mechanism would be. But nevertheless, I was happy
to see that as far as the PCGG is concerned, that the agreement was perfected and that we
were beginning to implement it and that was a source of satisfaction to me because I thought
[96]
that finally it will be the end.

Ferdinand Jr.'s pronouncements, taken in context and in their entirety, were a confirmation of respondents'
recognition of their ownership of the Swiss bank deposits. Admissions of a party in his testimony are
receivable against him. If a party, as a witness, deliberately concedes a fact, such concession has the force of a
judicial admission.[97] It is apparent from Ferdinand Jr.'s testimony that the Marcos family agreed to
negotiate with the Philippine government in the hope of finally putting an end to the problems besetting the
Marcos family regarding the Swiss accounts. This was doubtlessly an acknowledgment of ownership on their
part. The rule is that the testimony on the witness stand partakes of the nature of a formal judicial admission
when a party testifies clearly and unequivocally to a fact which is peculiarly within his own knowledge.[98]
[99]
In her Manifestation dated May 26, 1998, respondent Imelda Marcos furthermore revealed the
following:

That respondent Imelda R. Marcos owns 90% of the subject matter of the above-entitled case, being the
sole beneficiary of the dollar deposits in the name of the various foundations alleged in the case;

That in fact only 10% of the subject matter in the above-entitled case belongs to the estate of the late
President Ferdinand E. Marcos;

xxx xxx xxx

Respondents' ownership of the Swiss bank accounts as borne out by Mrs. Marcos' manifestation is as bright
as sunlight. And her claim that she is merely a beneficiary of the Swiss deposits is belied by her own
signatures on the appended copies of the documents substantiating her ownership of the funds in the name of
the foundations. As already mentioned, she failed to specifically deny under oath the authenticity of such
documents, especially those involving "William Saunders" and "Jane Ryan" which actually referred to
Ferdinand Marcos and Imelda Marcos, respectively. That failure of Imelda Marcos to specifically deny the
existence, much less the genuineness and due execution, of the instruments bearing her signature, was
tantamount to a judicial admission of the genuineness and due execution of said instruments, in accordance
with Section 8, Rule 8[100] of the 1997 Rules of Civil Procedure.

Likewise, in her Constancia[101] dated May 6, 1999, Imelda Marcos prayed for the approval of the
Compromise Agreement and the subsequent release and transfer of the $150 million to the rightful owner.
She further made the following manifestations:

xxx xxx xxx

2. The Republic's cause of action over the full amount is its forfeiture in favor of the government if
found to be ill-gotten. On the other hand, the Marcoses defend that it is a legitimate asset.
Therefore, both parties have an inchoate right of ownership over the account. If it turns out that the
account is of lawful origin, the Republic may yield to the Marcoses. Conversely, the Marcoses must
yield to the Republic. (underscoring supplied)
xxx xxx xxx
3. Consistent with the foregoing, and the Marcoses having committed themselves to helping the less
fortunate, in the interest of peace, reconciliation and unity, defendant MADAM IMELDA
ROMUALDEZ MARCOS, in firm abidance thereby, hereby affirms her agreement with the Republic
for the release and transfer of the US Dollar 150 million for proper disposition, without prejudice to
the final outcome of the litigation respecting the ownership of the remainder.

Again, the above statements were indicative of Imelda's admission of the Marcoses' ownership of the Swiss
deposits as in fact "the Marcoses defend that it (Swiss deposits) is a legitimate (Marcos) asset."

On the other hand, respondents Maria Imelda Marcos-Manotoc, Ferdinand Marcos, Jr. and Maria Irene
[102]
Marcos-Araneta filed a motion on May 4, 1998 asking the Sandiganbayan to place the res (Swiss
deposits) in custodia legis:
7. Indeed, the prevailing situation is fraught with danger! Unless the aforesaid Swiss deposits are
placed in custodia legis or within the Court's protective mantle, its dissipation or misappropriation
by the petitioner looms as a distinct possibility.

Such display of deep, personal interest can only come from someone who believes that he has a marked and
intimate right over the considerable dollar deposits. Truly, by filing said motion, the Marcos children revealed
their ownership of the said deposits.

[103]
Lastly, the Undertaking entered into by the PCGG, the PNB and the Marcos foundations on February 10,
1999, confirmed the Marcoses' ownership of the Swiss bank deposits. The subject Undertaking brought to
light their readiness to pay the human rights victims out of the funds held in escrow in the PNB. It stated:
WHEREAS, the Republic of the Philippines sympathizes with the plight of the human rights victims-
plaintiffs in the aforementioned litigation through the Second Party, desires to assist in the satisfaction
of the judgment awards of said human rights victims-plaintiffs, by releasing, assigning and or waiving
US$150 million of the funds held in escrow under the Escrow Agreements dated August 14, 1995,
although the Republic is not obligated to do so under final judgments of the Swiss courts dated
December 10 and 19, 1997, and January 8, 1998;

WHEREAS, the Third Party is likewise willing to release, assign and/or waive all its rights and interests
over said US$150 million to the aforementioned human rights victims-plaintiffs.

All told, the foregoing disquisition negates the claim of respondents that "petitioner failed to prove that they
acquired or own the Swiss funds" and that "it was only by arbitrarily isolating and taking certain statements
made by private respondents out of context that petitioner was able to treat these as judicial admissions." The
Court is fully aware of the relevance, materiality and implications of every pleading and document submitted
in this case. This Court carefully scrutinized the proofs presented by the parties. We analyzed, assessed and
weighed them to ascertain if each piece of evidence rightfully qualified as an admission. Owing to the far-
reaching historical and political implications of this case, we considered and examined, individually and
totally, the evidence of the parties, even if it might have bordered on factual adjudication which, by authority
of the rules and jurisprudence, is not usually done by this Court. There is no doubt in our mind that
respondent Marcoses admitted ownership of the Swiss bank deposits.

We have always adhered to the familiar doctrine that an admission made in the pleadings cannot be
controverted by the party making such admission and becomes conclusive on him, and that all proofs
submitted by him contrary thereto or inconsistent therewith should be ignored, whether an objection is
interposed by the adverse party or not.[104] This doctrine is embodied in Section 4, Rule 129 of the Rules of
Court:
SEC. 4. Judicial admissions. - An admission, verbal or written, made by a party in the course of the
proceedings in the same case, does not require proof. The admission may be contradicted only by
[105]
showing that it was made through palpable mistake or that no such admission was made.

In the absence of a compelling reason to the contrary, respondents' judicial admission of ownership of the
Swiss deposits is definitely binding on them.

The individual and separate admissions of each respondent bind all of them pursuant to Sections 29 and 31,
Rule 130 of the Rules of Court:
SEC. 29. Admission by co-partner or agent. - The act or declaration of a partner or agent of the party
within the scope of his authority and during the existence of the partnership or agency, may be given in
evidence against such party after the partnership or agency is shown by evidence other than such act or
declaration. The same rule applies to the act or declaration of a joint owner, joint debtor, or other person
[106]
jointly interested with the party.

SEC. 31. Admission by privies. - Where one derives title to property from another, the act, declaration,
or omission of the latter, while holding the title, in relation to the property, is evidence against the
[107]
former.

The declarations of a person are admissible against a party whenever a "privity of estate" exists between the
declarant and the party, the term "privity of estate" generally denoting a succession in rights.[108]
Consequently, an admission of one in privity with a party to the record is competent.[109] Without doubt,
privity exists among the respondents in this case. And where several co-parties to the record are jointly
interested in the subject matter of the controversy, the admission of one is competent against all.[110]

Respondents insist that the Sandiganbayan is correct in ruling that petitioner Republic has failed to establish
a prima facie case for the forfeiture of the Swiss deposits.

We disagree. The sudden turn-around of the Sandiganbayan was really strange, to say the least, as its findings
and conclusions were not borne out by the voluminous records of this case.

Section 2 of RA 1379 explicitly states that "whenever any public officer or employee has acquired during his
incumbency an amount of property which is manifestly out of proportion to his salary as such public officer
or employee and to his other lawful income and the income from legitimately acquired property, said
property shall be presumed prima facie to have been unlawfully acquired. x x x"

The elements which must concur for this prima facie presumption to apply are:
(1) the offender is a public officer or employee;

he must have acquired a considerable amount of money or property during his incumbency;
(2)
and

said amount is manifestly out of proportion to his salary as such public officer or employee
(3)
and to his other lawful income and the income from legitimately acquired property.
It is undisputed that spouses Ferdinand and Imelda Marcos were former public officers. Hence, the first
element is clearly extant.

The second element deals with the amount of money or property acquired by the public officer during his
incumbency. The Marcos couple indubitably acquired and owned properties during their term of office. In
fact, the five groups of Swiss accounts were admittedly owned by them. There is proof of the existence and
ownership of these assets and properties and it suffices to comply with the second element.

The third requirement is met if it can be shown that such assets, money or property is manifestly out of
proportion to the public officer's salary and his other lawful income. It is the proof of this third element that
is crucial in determining whether a prima facie presumption has been established in this case.

Petitioner Republic presented not only a schedule indicating the lawful income of the Marcos spouses during
their incumbency but also evidence that they had huge deposits beyond such lawful income in Swiss banks
under the names of five different foundations. We believe petitioner was able to establish the prima facie
presumption that the assets and properties acquired by the Marcoses were manifestly and patently
disproportionate to their aggregate salaries as public officials. Otherwise stated, petitioner presented enough
evidence to convince us that the Marcoses had dollar deposits amounting to US $356 million representing the
balance of the Swiss accounts of the five foundations, an amount way, way beyond their aggregate legitimate
income of only US$304,372.43 during their incumbency as government officials.

Considering, therefore, that the total amount of the Swiss deposits was considerably out of proportion to the
known lawful income of the Marcoses, the presumption that said dollar deposits were unlawfully acquired
was duly established. It was sufficient for the petition for forfeiture to state the approximate amount of
money and property acquired by the respondents, and their total government salaries. Section 9 of the PCGG
Rules and Regulations states:
Prima Facie Evidence. - Any accumulation of assets, properties, and other material possessions of those
persons covered by Executive Orders No. 1 and No. 2, whose value is out of proportion to their known
lawful income is prima facie deemed ill-gotten wealth.

Indeed, the burden of proof was on the respondents to dispute this presumption and show by clear and
convincing evidence that the Swiss deposits were lawfully acquired and that they had other legitimate sources
of income. A presumption is prima facie proof of the fact presumed and, unless the fact thus prima facie
established by legal presumption is disproved, it must stand as proved.[111]

Respondent Mrs. Marcos argues that the foreign foundations should have been impleaded as they were
indispensable parties without whom no complete determination of the issues could be made. She asserts that
the failure of petitioner Republic to implead the foundations rendered the judgment void as the joinder of
indispensable parties was a sine qua non exercise of judicial power. Furthermore, the non-inclusion of the
foreign foundations violated the conditions prescribed by the Swiss government regarding the deposit of the
funds in escrow, deprived them of their day in court and denied them their rights under the Swiss
constitution and international law.[112]

The Court finds that petitioner Republic did not err in not impleading the foreign foundations. Section 7,
Rule 3 of the 1997 Rules of Civil Procedure,[113] taken from Rule 19b of the American Federal Rules of Civil
Procedure, provides for the compulsory joinder of indispensable parties. Generally, an indispensable party
must be impleaded for the complete determination of the suit. However, failure to join an indispensable party
does not divest the court of jurisdiction since the rule regarding indispensable parties is founded on equitable
considerations and is not jurisdictional. Thus, the court is not divested of its power to render a decision even
in the absence of indispensable parties, though such judgment is not binding on the non-joined party.[114]

An indispensable party[115] has been defined as one:

[who] must have a direct interest in the litigation; and if this interest is such that it cannot be separated
from that of the parties to the suit, if the court cannot render justice between the parties in his absence,
if the decree will have an injurious effect upon his interest, or if the final determination of the
controversy in his absence will be inconsistent with equity and good conscience.

There are two essential tests of an indispensable party: (1) can relief be afforded the plaintiff without the
presence of the other party? and (2) can the case be decided on its merits without prejudicing the rights of the
other party?[116] There is, however, no fixed formula for determining who is an indispensable party; this can
only be determined in the context and by the facts of the particular suit or litigation.

In the present case, there was an admission by respondent Imelda Marcos in her May 26, 1998 Manifestation
before the Sandiganbayan that she was the sole beneficiary of 90% of the subject matter in controversy with
the remaining 10% belonging to the estate of Ferdinand Marcos.[117] Viewed against this admission, the
foreign foundations were not indispensable parties. Their non-participation in the proceedings did not
prevent the court from deciding the case on its merits and according full relief to petitioner Republic. The
judgment ordering the return of the $356 million was neither inimical to the foundations' interests nor
inconsistent with equity and good conscience. The admission of respondent Imelda Marcos only confirmed
what was already generally known: that the foundations were established precisely to hide the money stolen
by the Marcos spouses from petitioner Republic. It negated whatever illusion there was, if any, that the
foreign foundations owned even a nominal part of the assets in question.

The rulings of the Swiss court that the foundations, as formal owners, must be given an opportunity to
participate in the proceedings hinged on the assumption that they owned a nominal share of the assets.[118]
But this was already refuted by no less than Mrs. Marcos herself. Thus, she cannot now argue that the ruling
of the Sandiganbayan violated the conditions set by the Swiss court. The directive given by the Swiss court for
the foundations to participate in the proceedings was for the purpose of protecting whatever nominal interest
they might have had in the assets as formal owners. But inasmuch as their ownership was subsequently
repudiated by Imelda Marcos, they could no longer be considered as indispensable parties and their
participation in the proceedings became unnecessary.

In Republic vs. Sandiganbayan,[119] this Court ruled that impleading the firms which are the res of the
action was unnecessary:
"And as to corporations organized with ill-gotten wealth, but are not themselves guilty of
misappropriation, fraud or other illicit conduct - in other words, the companies themselves are not the
object or thing involved in the action, the res thereof - there is no need to implead them either. Indeed,
their impleading is not proper on the strength alone of their having been formed with ill-gotten funds,
absent any other particular wrongdoing on their part...

Such showing of having been formed with, or having received ill-gotten funds, however strong or
convincing, does not, without more, warrant identifying the corporations in question with the person
who formed or made use of them to give the color or appearance of lawful, innocent acquisition to
illegally amassed wealth - at the least, not so as place on the Government the onus of impleading the
former with the latter in actions to recover such wealth. Distinguished in terms of juridical personality
and legal culpability from their erring members or stockholders, said corporations are not themselves
guilty of the sins of the latter, of the embezzlement, asportation, etc., that gave rise to the Government's
cause of action for recovery; their creation or organization was merely the result of their members' (or
stockholders') manipulations and maneuvers to conceal the illegal origins of the assets or monies
invested therein. In this light, they are simply the res in the actions for the recovery of illegally acquired
wealth, and there is, in principle, no cause of action against them and no ground to implead them as
defendants in said actions."
Just like the corporations in the aforementioned case, the foreign foundations here were set up to conceal the
illegally acquired funds of the Marcos spouses. Thus, they were simply the res in the action for recovery of ill-
gotten wealth and did not have to be impleaded for lack of cause of action or ground to implead them.

Assuming arguendo, however, that the foundations were indispensable parties, the failure of petitioner to
implead them was a curable error, as held in the previously cited case of Republic vs. Sandiganbayan:[120]
"Even in those cases where it might reasonably be argued that the failure of the Government to implead
the sequestered corporations as defendants is indeed a procedural abberation, as where said firms were
allegedly used, and actively cooperated with the defendants, as instruments or conduits for conversion
of public funds and property or illicit or fraudulent obtention of favored government contracts, etc.,
slight reflection would nevertheless lead to the conclusion that the defect is not fatal, but one correctible
under applicable adjective rules - e.g., Section 10, Rule 5 of the Rules of Court [specifying the remedy of
amendment during trial to authorize or to conform to the evidence]; Section 1, Rule 20 [governing
amendments before trial], in relation to the rule respecting omission of so-called necessary or
indispensable parties, set out in Section 11, Rule 3 of the Rules of Court. It is relevant in this context to
advert to the old familiar doctrines that the omission to implead such parties "is a mere technical defect
which can be cured at any stage of the proceedings even after judgment"; and that, particularly in the
case of indispensable parties, since their presence and participation is essential to the very life of the
action, for without them no judgment may be rendered, amendments of the complaint in order to
implead them should be freely allowed, even on appeal, in fact even after rendition of judgment by this
Court, where it appears that the complaint otherwise indicates their identity and character as such
[121]
indispensable parties."

Although there are decided cases wherein the non-joinder of indispensable parties in fact led to the dismissal
of the suit or the annulment of judgment, such cases do not jibe with the matter at hand. The better view is
that non-joinder is not a ground to dismiss the suit or annul the judgment. The rule on joinder of
indispensable parties is founded on equity. And the spirit of the law is reflected in Section 11, Rule 3[122] of
the 1997 Rules of Civil Procedure. It prohibits the dismissal of a suit on the ground of non-joinder or
misjoinder of parties and allows the amendment of the complaint at any stage of the proceedings, through
motion or on order of the court on its own initiative.[123]

Likewise, jurisprudence on the Federal Rules of Procedure, from which our Section 7, Rule 3[124] on
indispensable parties was copied, allows the joinder of indispensable parties even after judgment has been
entered if such is needed to afford the moving party full relief.[125] Mere delay in filing the joinder motion
does not necessarily result in the waiver of the right as long as the delay is excusable.[126] Thus, respondent
Mrs. Marcos cannot correctly argue that the judgment rendered by the Sandiganbayan was void due to the
non-joinder of the foreign foundations. The court had jurisdiction to render judgment which, even in the
absence of indispensable parties, was binding on all the parties before it though not on the absent party.[127]
If she really felt that she could not be granted full relief due to the absence of the foreign foundations, she
should have moved for their inclusion, which was allowable at any stage of the proceedings. She never did.
Instead she assailed the judgment rendered.

In the face of undeniable circumstances and the avalanche of documentary evidence against them,
respondent Marcoses failed to justify the lawful nature of their acquisition of the said assets. Hence, the Swiss
deposits should be considered ill-gotten wealth and forfeited in favor of the State in accordance with Section
6 of RA 1379:
SEC. 6. Judgment. If the respondent is unable to show to the satisfaction of the court that he has
lawfully acquired the property in question, then the court shall declare such property forfeited in favor
of the State, and by virtue of such judgment the property aforesaid shall become property of the State x x
x.
THE FAILURE TO PRESENT AUTHENTICATED
TRANSLATIONS OF THE SWISS DECISIONS

Finally, petitioner Republic contends that the Honorable Sandiganbayan Presiding Justice Francis
Garchitorena committed grave abuse of discretion in reversing himself on the ground that the original copies
of the authenticated Swiss decisions and their authenticated translations were not submitted to the court a
quo. Earlier PJ Garchitorena had quoted extensively from the unofficial translation of one of these Swiss
decisions in his ponencia dated July 29, 1999 when he denied the motion to release US$150 Million to the
human rights victims.

While we are in reality perplexed by such an incomprehensible change of heart, there might nevertheless not
be any real need to belabor the issue. The presentation of the authenticated translations of the original copies
of the Swiss decision was not de rigueur for the public respondent to make findings of fact and reach its
conclusions. In short, the Sandiganbayan's decision was not dependent on the determination of the Swiss
courts. For that matter, neither is this Court's.

The release of the Swiss funds held in escrow in the PNB is dependent solely on the decision of this
jurisdiction that said funds belong to the petitioner Republic. What is important is our own assessment of the
sufficiency of the evidence to rule in favor of either petitioner Republic or respondent Marcoses. In this
instance, despite the absence of the authenticated translations of the Swiss decisions, the evidence on hand
tilts convincingly in favor of petitioner Republic.

WHEREFORE, the petition is hereby GRANTED. The assailed Resolution of the Sandiganbayan dated
January 31, 2002 is SET ASIDE. The Swiss deposits which were transferred to and are now deposited in
escrow at the Philippine National Bank in the estimated aggregate amount of US$658,175,373.60 as of
January 31, 2002, plus interest, are hereby forfeited in favor of petitioner Republic of the Philippines.

SO ORDERED.

Davide, Jr., C.J., Bellosillo, Panganiban, Ynares-Santiago, Austria-Martinez, Carpio-Morales, Callejo, Sr.,
Azcuna, and Tinga, JJ., concur.
Puno, and Vitug, JJ., in the result
Quisumbing, and Sandoval-Gutierrez, JJ., on official leave.
Carpio, J., no part.

[1] An Act Declaring Forfeiture In Favor of the State Any Property To Have Been Unlawfully Acquired By Any
Public Officer or Employee and Providing For the Procedure Therefor.

[2] E.O. No. 1 - promulgated on February 28, 1986, only two (2) days after the Marcoses fled the country,
creating the PCGG which was primarily tasked to assist the President in the recovery of vast government
resources allegedly amassed by former President Marcos, his immediate family, relatives, and close
associates, both here and abroad.

[3] E.O. No. 2 - issued twelve (12) days later, warning all persons and entities who had knowledge of
possession of ill-gotten assets and properties under pain of penalties prescribed by law, prohibiting them
from concealing, transferring or dissipating them or from otherwise frustrating or obstructing the recovery
efforts of the government.

[4] E.O. No. 14 - Series of 1986, as amended by E.O. No. 14-A.

[ ]
[5] Also series of 1986, vested Sandiganbayan the exclusive and original jurisdiction over cases, whether civil
or criminal, to be filed by the PCGG with the assistance of the Office of the Solicitor General. The law also
declared that the civil actions for the recovery of unlawfully acquired property under Republic Act No. 1379 or
for restitution, reparation of damages, or indemnification for consequential and other damages or any other
civil action under the Civil Code or other existing laws filed with the Sandiganbayan against Ferdinand
Marcos et. al., may proceed independently of any criminal proceedings and may be proved by preponderance
of evidence.

[6] Declared null and void by this Court on December 9, 1998 in the case of "Francisco I. Chavez vs. PCGG
and Magtanggol Gunigundo, docketed as G.R. No. 130716.

[7] In April 1986, pursuant to E.O. No. 2, the Republic of the Philippines through the PCGG filed a request for
mutual assistance with the Swiss Federal Police Department, under the procedures of the International
Mutual Assistance in Criminal Proceedings (IMAC) to freeze the bank deposits of the Marcoses located in
Switzerland.

IMAC is a domestic statute of Switzerland which generally affords relief to the kind of request from foreign
governments or entities as authorized under E.O. No. 2.

The various Swiss local authorities concerned granted the request of petitioner Republic, and ordered the
Swiss deposits to be "blocked" until the competent Philippine court could decide on the matter.

[8] Volume III, Rollo, p. 2195.

[9] Penned by Justice Catalino R. Castañeda, Jr. and concurred in by Presiding Justice Francis E.
Garchitorena and Associate Justice Gregory S. Ong.

[10] Volume III, Rollo, p. 2218.

[11] Penned by Presiding Justice Francis E. Garchitorena with the separate concurring opinions of Associate
Justice Nicodemo T. Ferrer and Associate Justice Gregory S. Ong. Associate Justices Catalino R. Castañeda,
Jr. and Francisco H. Villaruz, Jr. both wrote their respective dissenting opinions.

[12] Volume I, Rollo, pp. 145-146.

[13] Volume I, Rollo, pp. 60-62.

[14] Volume IV, Rollo, p. 2605.

[15] Sec. 3 - the petition shall contain the following information

xxx

(c) The approximate amount of property he has acquired during his incumbency in his past and present
offices and employments.

[16] (d) A description of said property, or such thereof as has been identified by the Solicitor General.

[17] (e) The total amount of his government salary and other proper earnings and incomes from legitimately
acquired property xxx.

[18] Volume IV, Rollo, pp. 2651-2654.

[19]
[19] Same as Section 1, Rule 65 of the old Rules of Court.

[20] Filoteo, Jr. vs. Sandiganbayan, 263 SCRA 222 [1996].

[21] Central Bank vs. Cloribel, 44 S 307, 314 [1972].

[22] 240 SCRA 376 [1995].

[23] Republic vs. Sandiganbayan, 269 SCRA 316 [1997].

[24] 69 SCRA 524 [1976].

[25] Substantially the same as Section 1, Rule 34 of the old Rules of Court.

[26] Agcanas vs. Nagum, L-20707, 143 Phil 177 [1970].

[27] Rollo, Vol. I, pp. 22-37.

[28] Substantially the same as Section 10, Rule 8 of the old Rules of Court.

[29] 16 Phil., 315, 321-322 [1910].

[30] 197 SCRA 391 [1991].

[31] Philippine Advertising vs. Revilla, 52 SCRA 246 [1973].

[32] Petition, Annex C, Volume I, Rollo, p. 236.

[33] Answer, Annex D, Volume II, Rollo, p. 1064.

[34] 61A Am. Jur., 172-173.

[35] Blume vs. MacGregor, 148 P. 2d. 656 [see p.428, Moran, Comments on the Rules of Court, 1995 ed.].

[36] Substantially the same as Section 1, Rule 9 of the old Rules of Court.

[37] Supra.

[38] Supra.

[39] "All the five (5) group accounts in the over-all flow chart have a total balance of about Three Hundred
Fifty Six Million Dollars ($356,000,000.00) as shown by Annex `R-5' hereto attached as integral part
hereof."

[40] 22 SCRA 48 [1968]

[41] XANDY-WINTROP-AVERTINA FOUNDATION: (a) Contract for opening of deposit dated March 21,
1968; (b) Handwritten instruction; (c) Letter dated March 3, 1970; (d) Handwritten regulation of Xandy
dated February 13, 1970; (e) Letter of instruction dated March 10, 1981; (f) Letter of Instructions dated March
10, 1991.
TRINIDAD-RAYBY-PALMY FOUNDATION: (a) Management agreement dated August 28, 1990; (b)
Letter of instruction dated August 26, 1970 to Markers Geel of Furich; (c) Approval of Statutes and By-
laws of Trinidad Foundation dated August 26, 1990; (d) Regulations of the Trinidad Foundation dated
August 28, 1970; (e) Regulations of the Trinidad Foundation prepared by Markers Geel dated August
28, 1970; (f) Letter of Instructions to the Board of Rayby Foundation dated March 10, 1981; (g) Letter of
Instructions to the Board of Trinidad Foundation dated March 10, 1981.

MALER ESTABLISHMENT FOUNDATION: (a) Rules and Regulations of Maler dated October 15, 1968;
(b) Letter of Authorization dated October 19, 1968 to Barbey d Suncir; (c) Letter of Instruction to Muler
to Swiss Bank dated October 19, 1968.

[42] "Where an action or defense is founded upon a written instrument, copied in or attached to the
corresponding pleading xxx, the genuineness and due execution of the instrument shall be deemed admitted
unless the adverse party under oath, specifically denies them, and sets forth what he claims to be the facts
xxx."

[43] Annex A-F, Volume I, Rollo, pp. 193-194.

[44] Ice Plant Equipment vs. Martocello, D.C.P., 1941, 43 F. Supp. 281.

[45] Phil. Advertising Counselors, Inc. vs. Revilla, L- 31869, Aug. 8, 1973.

[46] Warner Barnes Co., Ltd. vs. Reyes, et. al., 55 O.G. 3109-3111.

[47] Philippine Bank of Communications vs. Court of Appeals, 195 SCRA 567 [1991].

[48] 28 SCRA 807, 812 [1969].

[49] Rule 20 of the old Rules of Court was amended but the change(s) had no adverse effects on the rights of
private respondents.

[50] Development Bank of the Phils. vs. CA, G.R. No. L-49410, 169 SCRA 409 [1989].

[51] Substantially the same as Section 3, Rule 34 of the old Rules of Court.

[52] adopted by the Marcos children.

[53] dated September 26, 2000 as filed by Mrs. Marcos; dated October 5, 2000 as jointly filed by Mrs.
Manotoc and Ferdinand, Jr.; supplemental motion for reconsideration dated October 9, 2000 jointly filed by
Mrs. Manotoc and Ferdinand, Jr.;

[54] dated December 12, 2000 and December 17, 2000 as filed by the Marcos children.

[55] TSN, pp. 47-48, October 28, 1999.

[56] Evadel Realty and Development Corp. vs. Spouses Antera and Virgilio Soriano, April 20, 2001.

[57] Plantadosi vs. Loew's, Inc., 7 Fed. Rules Service, 786, June 2, 1943.

[58] Rabaca vs. Velez, 341 SCRA 543 [2000].

[59] Carcon Development Corp. vs. Court of Appeals, 180 SCRA 348 [1989].
[60] Rollo, pp. 2659-70.

[61] Substantially the same as Sections 1 and 2, Rule 34 of the old Rules of Court.

[62] Rule 113. Summary Judgment. - When an answer is served in an action to recover a debt or a
liquidated demand arising,
1. on a contract, express or implied, sealed or not sealed; or

2. on a judgment for a stated sum;

the answer may be struck out and judgment entered thereon on motion, and the affidavit of the plaintiff or of
any other person having knowledge of the facts, verifying the cause of action and stating the amount claimed,
and his belief that there is no defense to the action; unless the defendant by affidavit or other proof, shall
show such facts as may be deemed, by the judge hearing the motion, sufficient to entitle him to defend.
(emphasis ours)

[63] 73 Am Jur 2d 733, §12; 49 C.J.S. 412, § 224.

[64] Moran, Comments on the Rules of Court, Vol. II. (1996), pp. 183-184.

[65] 19 NYS2d 250 [1940].

[66] 73 Am Jur 2d 733, §12; 49 C.J.S. 412, § 224.

[67] Supra.

[68] Gregorio Estrada vs. Hon. Fracisco Consolacion, et. al., 71 SCRA 523 [1976].

[69] Substantially the same as Section 2, Rule 1 of the old Rules of Court.

[70] Madeja vs. Patcho, 123 SCRA 540 [1983].

[71] Mejia de Lucas vs. Gamponia, 100 Phil. 277 [1956].

[72] Diaz vs. Gorricho, 103 Phil. 261 [1958].

[73] Collado vs. Court of Appeals, G.R. No.107764, October 4, 2002; Section 15, Article XI of the 1987
Constitution.

[74] Go Tian An vs. Republic of the Philippines, 124 Phil. 472 [1966].

[75] Tijam vs. Sibonghanoy, 23 SCRA 29 [1968].

[76] An Act Declaring Forfeiture in Favor of the State any Property Found to Have Been Unlawfully Acquired
by Any Public Officer or Employee and Providing for the Proceedings Therefor, approved on June 18, 1955.

[77] Petition, Annex D, Volume II, p. 1081.

[78] Ibid.

[79] Id., p. 1062.

[80] Exhibit "S."

[81] Substantially the same as Section 2, Rule 129 of the old Rules of Court.

[82] Regalado, Remedial Law Compendium, Vol. II, 1997 ed., p. 650.

[83] Moran, Comments on the Rules of Court, Volume V, 1980 ed., p. 64.

[84] Section 9, Article VII.

[85] Section 4(1), Article VII.

[86] Substantially the same as Section 1, Rule 9 of the old Rules of Court.

[87] Annex F-1, Volume II, Rollo, pp. 1095-1098.

[88] Annex F-2, Volume II, Rollo, pp.1099-1100.

[89] Chavez vs. PCGG, 299 SCRA 744, [1998].

[90] Substantially the same as Section 24, Rule 130 of the old Rules of Court.

[91] Annex HH, Volume III, Rollo, p. 2205.

[92] 31A C.J.S., Par. 284, p.721.

[93] Annex I, Volume II, Rollo, pp. 1177-1178.

[94] Ibid, p. 1181.

[95] Ibid, p. 1188.

[96] Ibid, p. 1201.

[97] 29A Am. Jur., Par. 770, p. 137.

[98] 31A C.J.S., Par. 311, p.795.

[99] Annex M, Volume II, Rollo, pp.1260-1261.

[100] Substantially the same as Section 8, Rule 8 of the old Rules of Court.

[101] Annex S, Volume II, Rollo, pp.1506-1507.

[102] Annex L, Volume II, Rollo, p. 1256.

[103] Annex P-1, Volume II, Rollo, p. 1289.

[104] Santiago vs. de los Santos, 61 SCRA 146 [1974].

[105] Substantially the same as Section 2, Rule 129 of the old Rules of Court.

[106]
[106] Substantially the same as Section 26, Rule 130 of the old Rules of Court.

[107] Substantially the same as Section 28, Rule 130 of the old Rules of Court.

[108] 29 Am Jur 2d Par. 824, p. 211.

[109] 31A C.J.S., Par. 322, p. 817.

[110] Ibid, p. 814.

[111] Miriam Defensor Santiago, Rules of Court Annotated, 1999 ed., p. 857.

[112] Rollo, pp. 2255-2265.

[113] Sec. 7. Compulsory joinder of indispensable parties.--Parties in interest without whom no final
determination can be had of an action shall be joined either as plaintiffs or defendants. The same as Section 7,
Rule 3 of the old Rules of Court.

[114] 59 Am. Jur. 2d Parties §97 (2000).

[115] Supra note 3 § 13 (2000).

[116] Supra note 3 citing Picket vs. Paine, 230 Ga 786, 199 SE2d 223.

[117] Rollo, p. 1260. Manifestation:

"Comes now undersigned counsel for the respondent Imelda R. Marcos, and before this Honorable Court,
most respectfully manifests:
That respondent Imelda R. Marcos owns 90% of the subject-matter of the above-entitled case,
I. being the sole beneficiary of the dollar deposits in the name of the various Foundations
alleged in the case;
That in fact only 10% of the subject-matter in the above-entitled case belongs to the Estate of
II.
the late President Ferdinand E. Marcos;"

[118] Rollo, p. 2464, quoted from the December 18, 2000 memorandum of respondent Mrs. Marcos:

"On the other hand, the opponent to the appeal, formally the owner of the assets to be seized and
restituted, has not been involved in the collecting procedure pending in the Philippines. Even though
such opponent is nothing but a legal construction to hide the true ownership to the assets of the Marcos
family, they nevertheless are entitled to a hearing as far as the proceedings are concerned with accounts
which are nominally theirs. The guarantees of the Republic of the Philippines therefore must include the
process rights not only of the defendants but also of the formal owners of the assets to be delivered."

[119] 240 SCRA 376, 469 [1995].

[120] Supra.

[121] Id at 470-471.

[122] Substantially the same as Section 11, Rule 3 of the old Rules of Court.

[123] Sec. 11. Misjoinder and non-joinder of parties. - Neither misjoinder nor non-joinder of parties is
ground for the dismissal of an action. Parties may be dropped or added by order of the court on motion of any
party or on its own initiative at any stage of the action and on such terms as are just. Any claim against a
misjoined party may be severed and proceeded with separately.

[124] Same as Section 7, Rule 3 of the old Rules of Court.

[125] Supra note 3 § 265 (2000)

[126] Id citing Gentry vs. Smith (CA5 Fla) 487 F2d 571, 18 FR Serv 2d 221, later app (CA5 Fla) 538 F2d 1090,
on reh (CA5 Fla) 544 F2d 900, holding that a failure to request the joinder of a defendant was excused where
the moving party's former counsel, who had resisted the joinder, abruptly withdrew his appearance and
substitute counsel moved promptly to join the corporation.

[127] Supra note 3.

DIVISION

[ GR No. 159240, Feb 04, 2008 ]

GREGORIO SILOT v. ESTRELLA DE LA ROSA

DECISION
567 Phil. 505

QUISUMBING, J.:
[1]
This is a petition for review of the Decision dated July 9, 2003 of the Court of Appeals in CA-G.R. CV No.
68062 entitled "Estrella de la Rosa v. Gregorio Silot, Jr." The appellate court had affirmed with
[2]
modification the Joint Decision dated May 24, 2000 of the Regional Trial Court (RTC), Branch 61, Naga
City, in Civil Case Nos. 97-3736 and 97-3750, and decreed as follows:

WHEREFORE, premises considered, the assailed Joint Decision dated May 24, 2000 of the RTC,
Branch 61, Naga City in Civil Cases Nos. 97-3736 and 97-3750 is hereby AFFIRMED WITH
MODIFICATION, deleting the award for nominal damages and reducing the award of attorney's
fees to Twenty Thousand (P20,000.00) Pesos.Other awards not otherwise modified or deleted
[3]
stand.SO ORDERED.

As culled from the records by the Court of Appeals, the antecedent facts of this case are as follows:

On January 19, 1996, petitioner Gregorio Silot, Jr. and respondent Estrella de la Rosa entered into a
contract for the construction of a dormitory-apartment building on Lot 1-A-9-D, Bagumbayan Sur, Naga
City. They expressly agreed that Silot shall supply the labor and de la Rosa shall pay 33% of the total value
of the materials purchased for the project. Upon turnover in February 1997 of the completed structure, the
total cost of materials actually purchased was P2,504,469.65, 33% of which is P826,474.98. Silot required
de la Rosa to pay a total of P1,018,000.00, or P191,525.02 more than the amount due. Through her son-in-
law, de la Rosa confronted Silot about the overpayment but the latter refused to return the overpayment.
After her repeated demands fell on deaf ears, de la Rosa filed a suit against Silot.

Silot, in retaliation, sued de la Rosa for insufficient payment, claiming that he was supposed to receive
P1,281,872.40[4] but was only paid P1,008,000.00, thus still leaving a balance of P273,872.40.

The two cases were consolidated by the trial court.

During trial, however, Atty. San Jose, counsel for Silot, dispensed with the testimony of Ariel Goingo, a
witness for de la Rosa. Atty. San Jose admitted Goingo's proposed testimony to the effect that in
consideration of the 33% as mentioned in the contract, all the material supplies during the making of the
additional works mentioned were already accounted for; that Silot was paid for all works that were
performed as well as all materials supplied; that the total sum was P2,504,469.65, so that 33% of which is
only P826,474.98; that de la Rosa paid the amount of P1,018,000.00; hence, there was an excess payment
of P191,525.02; and that de la Rosa never received any demand from nor was she confronted by Silot
regarding an alleged balance.[5]

Consequently, after trial, the RTC ruled in favor of de la Rosa and ordered Silot to return the overpaid
amount, decreeing as follows:
Wherefore, premises considered, Civil Case No. 3736 is hereby ordered DISMISSED for lack of merit;
while in Civil Case No. 97-3750, defendant Gregorio Silot is hereby ordered to return the amount of
P191,525.02 to the plaintiff, Estrella de la Rosa; to pay P100,000.00 for [a]ttorney's fees and
P50,000.00 as nominal damages.

[6]
SO ORDERED.

On appeal, the Court of Appeals affirmed the decision of the lower court. Hence, the instant petition
wherein Silot assigned the following errors:

I.
The Honorable Court of Appeals erred in construing the admission ma[d]e by Atty. San Jose on the
purpose for the testimony of witness Ariel [Goingo] as admission of evidence.

II.

The Honorable Court of Appeals erred in deciding and ordering petitioner-appellant to return the
[7]
amount of P191,525.02 to respondent appellee and also to pay P20,000.00 attorney[']s fees.

Simply stated, petitioner is raising the following issues to be resolved: (1) whether the admission by Atty.
San Jose, counsel of petitioner Silot, constituted judicial admission of respondent's evidence; and (2)
whether the appellate court erred in ruling that Silot should return the claimed amount of P191,525.02 to
de la Rosa.

Petitioner Silot contends that his counsel Atty. San Jose merely admitted that the subject of Goingo's
testimony was that stated in the offer of testimony, but he did not admit the truth or veracity of the
testimony. Silot adds that Atty. San Jose could not and should not have admitted the testimony because he
had no special power of attorney to enter into such stipulations or to compromise his client's right without
the latter's direct intervention.[8]

Respondent de la Rosa counters that clients are bound by the admissions as well as the negligence of their
counsel. She enumerates several Court decisions to support her contention, among them the following
cases:

(1) Ongson v. People,[9] where petitioner was held bound by his unqualified admission that he received
private complainant's demand letter with notice of dishonor. The admission binds him considering that he
never denied receipt of the notice of dishonor.

(2) Republic v. Sarabia,[10] where the Court held that an admission made in the pleading cannot be
controverted by the party making such admission and are conclusive as to him.

(3) People v. Genosa,[11] Arroyo, Jr. v. Taduran,[12] Carandang v. Court of Appeals,[13] in which cases
the Court held that judicial admissions are conclusive upon the party making it and may not be
contradicted in the absence of prior showing that the admission had been made through palpable mistake,
or no admission was in fact made.

(4) People v. Razul[14] and Lim v. Jabalde,[15] where it was held that stipulations are recognized as
declarations constituting judicial admissions, hence, binding upon the parties.

Moreover, well-entrenched is the rule that the client is bound by the mistakes arising from negligence of
his own counsel.[16] The only exception to this rule is, as the Court of Appeals itself cited in its decision,
when the negligence is so gross that the client is deprived of his day in court.[17]
In our considered view, however, that exception does not find any application in this case. As the records
would plainly show, Silot was not deprived of his day in court. Also, as the appellate court observed, he
could have introduced evidence, testimonial or otherwise, in order to controvert or correct the admission
made by his counsel. Said the appellate court:
…As gleaned from the records, defendant-appellant Silot was not deprived of his day in court. He was
given every opportunity to be heard through his pleadings and manifestations. He was also presented
in open court to testify. As quoted earlier, Atty. Terbio, counsel for plaintiff-appellee de la Rosa, even
repeatedly asked Atty. San Jose, defendant-appellant Silot's counsel, if he would admit the purpose
for which the witness Ariel Goingo will testify to dispense with his testimony, and Atty. San Jose
repeatedly answered that "We will admit that." And when asked by the judge if he will admit it, he
[18]
answered that they will admit P2,504,000.00.

More importantly, Silot's counsel clearly made admissions of the content of the testimony of witness
Goingo, whose presentation was dispensed with. In People v. Hernandez,[19] we held that admissions
made for the purpose of dispensing with proof of some facts are in the nature of judicial admissions, to wit:
A stipulation of facts entered into by the prosecution and defense counsel during trial in open court is
automatically reduced into writing and contained in the official transcript of the proceedings had in
court. The conformity of the accused in the form of his signature affixed thereto is unnecessary in
view of the fact that: "[…] an attorney who is employed to manage a party's conduct of a lawsuit […]
has prima facie authority to make relevant admissions by pleadings, by oral or written stipulation,
[…] which unless allowed to be withdrawn are conclusive." (Italics supplied.) In fact, "judicial
admissions are frequently those of counsel or of the attorney of record, who is, for the
purpose of the trial, the agent of his client. When such admissions are made […] for the
purpose of dispensing with proof of some fact, […] they bind the client, whether made
[20]
during, or even after, the trial. (Emphasis supplied.)

Worth stressing, in this connection, judicial admissions do not require proof and may not be contradicted
in the absence of a prior showing that the admissions had been made through palpable mistake.[21]

Furthermore, in the case of Toh v. Court of Appeals,[22] this Court emphasized the consequence of
admitting and dispensing with the testimony of the proposed witness, thus:
The Court sees no cogent reason why the said witness should be examined any further since his
testimony as summarized in the offer made by counsel was expressly admitted by opposing counsel.
With the said admission, the testimony of said witness is uncontroverted and even admitted as fact by
[23]
opposing counsel.…

On the issue of insufficient payment, Silot avers that he has rendered or provided labor for the total
amount of P1,281,872.40, and that de la Rosa has benefited and profited from these labors.[24] Without
the labors provided by Silot, the constructed building would not have been painted, provided with electrical
works and other works which were additional works on the building, and that to sanction de la Rosa's claim
would be to allow unjust enrichment on the part of de la Rosa.[25] However, this claim has been belied by
the admission made by his own counsel, as plainly manifest in the transcript:
Atty. Terbio

The purpose for which this witness will testify are the following: If admitted, we are willing to
dispense the testimony. He will testify that in consideration of the 33% as mentioned in the
contract, all the material supplies during the making of the additional works mentioned
were all considered; he will testify that Silot was paid of all works that was performed
as well as all materials supplied were considered, and that the sum total of which is
P2,504,469.65 and 33% of which is P826,474.98, and that De la Rosa paid the total
amount of P1,018,000.00, and therefore, there is an excess payment of P191,525.00; he
will testify that De la Rosa never received the demand or was confronted by Silot
regarding an alleged balance, now, if the counsel wish to admit this.

ATTY. SAN JOSE

We admit that.

ATTY. TERBIO

Because these are all evidentiary and this has not been adequately covered.

ATTY. SAN JOSE

[26]
We will admit that. (Emphasis supplied.)

Clearly, given the circumstances of this case, the Court of Appeals did not err in ordering petitioner to
return to respondent the amount of P191,525.02 overpayment.

WHEREFORE, the instant petition is DENIED for lack of merit. The Decision dated July 9, 2003 of the
Court of Appeals in CA-G.R. CV No. 68062 is AFFIRMED. Petitioner Gregorio Silot, Jr. is hereby ordered
to return the amount of P191,525.02 to respondent Estrella de la Rosa, and to pay P20,000.00 as
attorney's fees. Costs against petitioner.

SO ORDERED.

Carpio, Carpio-Morales, Tinga, and Velasco, Jr., JJ., concur.

[1] Rollo, pp. 31-45. Penned by Associate Justice Remedios A. Salazar-Fernando, with Associate Justices
Delilah Vidallon-Magtolis and Edgardo F. Sundiam concurring.

[2] Id. at 25-30. Penned by Judge Andres B. Rarsaga, Jr.

[3] Id. at 45.

[4] Id. at 94.

[5] Id. at 36-37.

[6] Id. at 30.

[7] Id. at 13.

[8] Id. at 19.

[9] G.R. No. 156169, August 12, 2005, 466 SCRA 656, 677.

[10] G.R. No. 157847, August 25, 2005, 468 SCRA 142, 150.

[11] G.R. No. 135981, January 15, 2004, 419 SCRA 537, 562.

[12] G.R. No. 147012, January 29, 2004, 421 SCRA 423, 427.

[13] G.R. No. 85718, April 16, 1991, 195 SCRA 771, 776.

[14] G.R. No. 146470, November 22, 2002, 392 SCRA 553, 578.

[15] G.R. No. 36786, April 17, 1989, 172 SCRA 211, 222.

[16] Juani v. Alarcon, G.R. No. 166849, September 5, 2006, 501 SCRA 135, 153; Uy v. Adriano, G.R. No.
159098, October 27, 2006, 505 SCRA 625, 648-649.

[17] Rollo, p. 41.

[18] Id. at 41-42.

[19] G.R. No. 108028, July 30, 1996, 260 SCRA 25.

[20] Id. at 38.

[21] RULES OF COURT, Rule 129, Section 4.SEC. 4. Judicial admissions. An admission, verbal or written,
made by a party in the course of the proceedings in the same case, does not require proof. The admission
may be contradicted only by showing that it was made through palpable mistake or that no such admission
was made.

[22] G.R. No. 140274, November 15, 2000, 344 SCRA 831.

[23] Id. at 837.

[24] Rollo, p. 22.

[25] Id.

[26] Id. at 36; TSN, January 21, 2000, pp. 2-3.

DIVISION

[ GR NO. 168071, Dec 18, 2006 ]

LUCIANO TAN v. RODIL ENTERPRISES

DECISION
540 Phil. 183

CHICO-NAZARIO, J.:
[1]
The instant Petition for Review on Certiorari assails the Decision dated 21 October 2002 and the
[2]
Resolution dated 12 May 2005 of the Court of Appeals in CA-G.R. SP No. 67201, which set aside the 18
[3]
June 2001 Decision of the Regional Trial Court (RTC) of Manila, Branch 26 in Civil Case No. 01-
[4]
99797. The RTC reversed the 6 October 2000 Decision of the Metropolitan Trial Court (MeTC) of
Manila, Branch 13 in Civil Case No. 166584, and dismissed the Complaint filed by respondent Rodil
Enterprises against petitioner Luciano Tan for utter lack of merit.

[5]
This case has its origin from the Complaint for Unlawful Detainer filed on 13 March 2000 by Rodil
Enterprises against Luciano Tan with the MeTC of Manila, Branch 13, docketed as Civil Case No. 166584.

The factual antecedents to the filing of the Complaint show that Rodil Enterprises is a lessee of the
subject premises, the Ides O'Racca Building since 1959. The Ides O'Racca Building, located at the corner
of M. de Santos and Folgueras Streets in Binondo, Manila, is owned by the Republic of the Philippines.
On 18 May 1992, Rodil Enterprises and the Republic, through the Department of Environment and
Natural Resources (DENR), entered into a Renewal of a Contract of Lease over the Ides O'Racca
Building. A subsequent Supplementary Contract dated 25 May 1992 was similarly entered into, thus,
extending the lease agreement until 1 September 1997.

The validity of the 18 May 1992 and the 25 May 1992 contracts was placed in question in several actions
involving Rodil Enterprises, the Ides O'Racca Building Tenants Association, Inc., and other tenants. This
Court upheld the validity of the aforesaid contracts in a Decision rendered on 29 November 2001, in the
consolidated cases of Rodil Enterprises, Inc. v. Court of Appeals, Carmen Bondoc, Teresita Bondoc-Esto,
Divisoria Footwear and Chua Huay Soon (G.R. No. 129609) and Rodil Enterprises, Inc. v. Ides O'Racca
[6]
Building Tenants Association, Inc. (G.R. No. 135537).

Prior thereto, the Office of the President in OP Case No. 4968 entitled, Spouses Saturnino B. Alvarez and
[7]
Epifania Binay Alvarez v. Rodil Enterprises Company, Inc. rendered a Decision dated 8 February
1994, declaring the Renewal of Contract of Lease and the Supplementary Contract, dated 18 May 1992
and 25 May 1992, respectively, of no force and effect.

It appears that Rodil Enterprises appealed the 8 February 1994 Decision to the Court of Appeals,
docketed as CA-G.R. SP No. 34586 which was dismissed by the appellate court for non-compliance with
procedural requirements. The dismissal was appealed by Rodil Enterprises to the Supreme Court,
docketed as G.R. No. 119711 which was also dismissed. Subsequently, the Office of the President issued
an Order of Execution of its 8 February 1994 Decision in OP Case No. 4968. Thereafter, Rodil
Enterprises filed a Petition for Review on Certiorari with the Court of Appeals on the Order of Execution,
docketed as CA-G.R. SP No 79157. The Court of Appeals rendered a Decision therein dated 28 March
2005 which annulled the Order of Execution, and enjoined the Office of the President from enforcing its
8 February 1994 Decision in OP Case No. 4968. Likewise, the Court of Appeals ordered the Office of the
President to abide by the 29 November 2001 Decision of the Supreme Court in the consolidated cases of
G.R. No. 129609 and G.R. No. 135537, upholding the validity of the Renewal of Contract of Lease and the
Supplemental Contract, dated 18 May 1992 and the 25 May 1992, respectively. Finally, the Decision of
the Court of Appeals in CA-G.R. SP No. 79157 was brought on certiorari by the Ides O'Racca Building
Tenants Association, Inc. to the Supreme Court, and docketed as G.R. No. 169892. On 25 January 2006,
the Court, in G.R. No. 169892, issued a Resolution denying the Petition. On 20 March 2006, a Resolution
was rendered in the same case denying with finality the amended Motion for Reconsideration.

Meanwhile, during the pendency of the preceding cases, on 18 October 1999, a subsequent Contract of
Lease was drawn between Rodil Enterprises and the Republic, the same to be effective retroactively from
1 September 1997 to 21 August 2012 at a monthly rental of P65,206.67, subject to adjustment upon the
approval of a new appraisal covering the Ides O'Racca Building. Rodil Enterprises subleased various
units of the property to members of the Ides O'Racca Building Tenants Association, Inc. A space thereof,
known as Botica Divisoria was subleased to herein petitioner, Luciano Tan.

In Rodil Enterprises' Complaint for Unlawful Detainer filed against Luciano Tan, the former alleged that
Luciano Tan bound himself to pay under a Contract of Sublease, the amount of P13,750.00 as monthly
rentals, representing the reasonable use and occupancy of the said premises. However, Luciano Tan
unjustifiably and unreasonably refused to pay the rentals from September 1997 up to the time of the
filing of the Complaint, and despite repeated oral and written demands, refused to vacate the premises
and to pay the rents due. Rodil Enterprises prayed that Luciano Tan and those claiming rights under him
be ordered to vacate the leased premises. A payment of rentals in arrears, amounting to P385,000.00
was similarly sought, including attorney's fees and litigation costs, as well as, subsequent monthly rentals
in the amount of P13,750.00 until Luciano Tan vacates Botica Divisoria.

In his Answer, Luciano Tan insists that he is a legitimate tenant of the government who owns the Ides
O'Racca Building and not of Rodil Enterprises. As such, he has the right to lease the said premises
pending the disposition and sale of the building. He based his claim on the fact that on 8 February 1994,
the Office of the President in OP Case No. 4968, had declared the Renewal of Contract of Lease dated 18
May 1992 and the Supplemental Contract dated 25 May 1992 between Rodil Enterprises and the
Republic to be without force and effect. Accordingly, the DENR was directed to award the lease contract
in favor of the Ides O'Racca Building Tenants Association, Inc. of which Luciano Tan is a member. He,
thus, prayed for the dismissal of the Complaint, and for the return of whatever amount Rodil Enterprises
had collected from 1987 to 1997, or during such time when he was still paying rentals to the latter.

On 27 June 2000, the MeTC issued an Order, recognizing an agreement entered into in open court by
Luciano Tan and Rodil Enterprises. The Order, inter alia, declared, thus:
On second call, the parties and counsel agreed in principle in open court to the following terms to
put an end to this civil case for ejectment between them:

1.) that [Luciano Tan] will pay P440,000.00 representing rentals from September, 1997 up to the
present, which is the outstanding obligation of [Luciano Tan] as of June, 2000, on or before June
30, 2000; and

2.) [Luciano Tan] will pay the monthly rentals computed at P13,750.00 on or before the 5th day of
[8]
each month after June 30, 2000.

[9]
On 14 August 2000, Luciano Tan filed a Motion to Allow Defendant to Deposit Rentals,[9] averring
therein that he had agreed to pay all the rentals due on the subject premises and to pay the subsequent
monthly rentals as they fall due; that the rentals in arrears from September 1997 amounted to
P467,500.00; and in line with his good faith in dealing with Rodil Enterprises, he would like to deposit
the aforesaid amount, and the subsequent monthly rentals as they fall due. He prayed that he be allowed
to deposit the Manager's Check for the amount of P467,500.00, made payable to the City Treasurer of
Manila. However, on 15 August 2000, the MeTC denied the Motion on the rationalization that Luciano
Tan's prayer to deposit the specified sum with the City Treasurer of Manila contravenes Section 19,[10]
Rule 70 of the 1997 Rules of Civil Procedure.

Subsequently, the issues for the resolution of the MeTC were synthesized by the court in its Order, dated
25 July 2000, to wit:
[T]he issue insofar as [Rodil Enterprises], revolved on:

"Whether [Rodil Enterprises] is legally entitled to collect from [Luciano Tan] the amount of rentals
and interest thereon as prayed for in the complaint and to ask for the ejectment of the defendant
from the leased premises."

On the other hand, [Luciano Tan]'s counsel formulated the issues of the case in the following
manner[,] to wit:

1) Whether or not under the circumstances[,][Luciano Tan] could be ejected from the premises in
question;

2) Whether or not under the circumstances[,] [Rodil Enterprises] should be made to return the
[11]
amounts collected from [Luciano Tan] from 1987 to 1997 amounting to P988,650.00.

On 6 October 2000, the MeTC rendered a Decision in favor of Rodil Enterprises. The court said that
Luciano Tan did not contest the sublease on a monthly basis, and in fact admitted in judicio, viz:
1) That [Luciano Tan] will pay P440,000.00 representing rentals from September 1997 up to the
present, which is the outstanding obligation of the defendant as of June, 2000, on or before June
30, 2000; and

2) [[Luciano Tan] will pay the monthly rentals computed at P13,750.00, on or before the 5th day of
[12]
each month after June 30, 2000.(Order dated June 27, 2000)

According to the MeTC, notwithstanding the evidentiary norm in civil cases that an offer of compromise
is not an admission of any liability, and is not admissible in evidence against the offeror, the court cannot
overlook the frank representations by Luciano Tan's counsel of the former's liability in the form of
rentals, coupled with a proposal to liquidate.[13] The foregoing gestures, as appreciated by the MeTC,
were akin to an admission of a fact, like the existence of a debt which can serve as proof of the loan, and
was thus, admissible.[14] The court pronounced that Luciano Tan had explicitly acknowledged his
liability for the periodic consideration for the use of the subleased property. Estoppel, thus, precludes
him from disavowing the fact of lease implied from the tender of payment for the rentals in arrears.[15]
The MeTC, explained further:
Prescinding from the foregoing discourse, it ineluctably follows that [Luciano Tan]'s indifference to
heed the two demand letters, the cognition of which were recognized (paragraphs VII and IX,
Complaint; paragraph 2, Answer), rendered him a deforciant (1 Regalado, Remedial Law
Compendium, 6th Revised Edition, 1997, page 770, citing Dikit vs. Ycasiano, 89 Phil. 44), and was
thus vulnerable to the special civil action under Section 1, Rule 70 of the 1997 Rules of Civil
Procedure, especially so when non-payment of rentals is an accepted prelude to, and a secondary
matrix for, a tenant's eviction (Article 1673 (2), New Civil Code).

From a different plane, [Luciano Tan]'s quest at this juncture for recovery of the rentals he paid to
the plaintiff from 1987 to 1997 will not merit the desired result since, in a manner of speaking, it will
place the cart ahead of the horse, when juxtaposed with another pending controversy between the
parties before the Supreme Court (Annex "1," Position Paper for the Defendant; Annex "B," Answer
to Counterclaim).

The decretal portion of the Decision, states, viz:

WHEREFORE, in view of the foregoing premises, judgment is hereby rendered in favor of [Rodil
Enterprises], ordering:
1. Defendant Luciano Tan, and all persons claiming rights under him, to vacate the subject realty,
and to peacefully deliver possession to the plaintiff's representative;
2. Defendant [Luciano Tan] to pay the sum of FOUR HUNDRED FORTY THOUSAND PESOS
(P440,000.00) as recognized unpaid rentals from September, 1997 up to June 30, 2000;
3. Defendant [Luciano Tan] to pay the sum of THIRTEEN THOUSAND SEVEN HUNDRED
FIFTY PESOS (P13,750.00) as agreed rental per month, starting July, 2000, and every month
thereafter, until possession is delivered to the plaintiff's representative;
4. Defendant [Luciano Tan] to pay the sum of FIVE THOUSAND PESOS (P5,000.00) as
reasonable attorney's fees; and
5. Defendant [Luciano Tan] to pay the cost of suit.
For want of merit, defendant's counterclaim is hereby DISMISSED.
IT IS SO ORDERED.[16]

Aggrieved thereby, Luciano Tan appealed the Decision to the RTC. Meanwhile, Rodil Enterprises filed a
[17]
Motion for Issuance of Writ of Execution, which was subsequently denied by the MeTC in the
[18]
Order of 15 December 2000.

On 18 June 2001, the RTC rendered a Decision reversing the judgment appealed from and dismissing the
Complaint. It found that the MeTC erred in holding that the offer to compromise by Luciano Tan's
[19]
counsel was akin to an admission of fact, the same being contrary to Section 27, Rule 130 of the 1997
Rules of Civil Procedure. As reasoned by the RTC:
During the pre-trial conference held in the lower court, proposals and counter-proposals emanated
from the parties' counsels, which was normally inspired by the desire to "buy peace", nay, to put an
end to the troubles of litigation, and to promote settlement of disputes as a matter of public policy.
The act of defendant/appellant's (sic) in the midst of pre-trial is not an admission of any liability
and therefore, should not be considered admissible evidence against him.[20]

Proceeding to the issue of the right of Rodil Enterprises to collect rentals and eject Luciano Tan based on
the contracts, dated 18 May 1992 and 25 May 1992, the RTC ruled that the controversy is still pending
before the Supreme Court. It, thus, held that the prayer for recovery of rentals from 1987 to 1997 is
premature.
The RTC, disposed, as follows:
IN VIEW OF THE FOREGOING, the judgment appealed from is hereby REVERSED, and a new
judgment is hereby entered DISMISSING the complaint in Civil Case No. 166584 for utter lack of
[21]
merit.

Subsequently, Rodil Enterprises filed a Petition for Review with the appellate court, which, in a Decision
dated 21 October 2002 set aside the judgment of the RTC, and affirmed and reinstated the 6 October
2000 Decision of the MeTC.

According to the appellate court, there is, between Rodil Enterprises and the Republic of the Philippines,
a valid and subsisting Contract of Lease executed on 18 October 1999, the same for a period of fifteen (15)
years.[22] The period of the lease, under the 18 October 1999 contract is from 1 September 1997 to 31
August 2012. The Court of Appeals gave credence to the fact that the existence of the aforesaid contract
was not denied nor controverted by Luciano Tan. What Luciano Tan, instead, impugned was the validity
of the contracts dated 18 and 25 May 1992, which was upheld by this Court in the consolidated cases of
Rodil Enterprises, Inc. v. Court of Appeals, Carmen Bondoc, Teresita Bondoc-Esto, Divisoria Footwear
and Chua Huay Soon (G.R. No. 129609) and Rodil Enterprises, Inc. v. Ides O'Racca Building Tenants
Association, Inc. (G.R. No. 135537).[23]

Ruling on the more important question of whether Luciano Tan made a judicial admission anent his
liability as a sublessee of Rodil Enterprises, the Court of Appeals held that the former made an implied
admission of the existence of a contract of sublease between him and Rodil Enterprises on the subject
premises; and that he had reneged in the payment of rentals since 1 September 1997. Moreover, it
deemed Luciano Tan's Motion to Allow Defendant to Deposit Rentals as another admission in favor of
Rodil Enterprises. The appellate court elucidated, thus:
The evidence on record indubitably shows that respondent [Luciano Tan] is a sublessee of petitioner
[Rodil Enterprises] who failed to pay rentals from 01 September 1997 and even until the case was
filed before the [M]etropolitan [T]rial [C]ourt, when respondent [Luciano Tan] "agreed in principle
in open court" to the following terms:

1) that the defendant [Luciano Tan] will pay P440,000.00 representing rentals from September,
1997 up to the present, which is the outstanding obligation of the defendant as of June, 2000, on or
before June 30, 2000; and

2) defendant [Luciano Tan] will pay the monthly rentals computed at P13,750.00 on or before the
5th day of each month after June 30, 2000.

at the hearing on 27 June 2000 though no settlement was eventually reached between the parties,
respondent [Luciano Tan] in effect made an implied judicial admission that there was a subsisting
contract of sublease between him and petitioner, and that he was remiss in the payment of rentals
from 01 September 1997 up to that day (Rollo, Annex "9" of petition). Respondent [Luciano Tan]'s
admission was further bolstered by the fact that he filed a "Motion to Allow Defendant to Deposit
Rentals" (Rollo, p. 3 of Annex "15" of petition). By such acts, respondent [Luciano Tan] accepted the
truth of petitioner [Rodil Enterprises'] allegation of the existence of a contract of sublease between
them and of his non-payment of the rentals from 01 September 1997. A judicial admission is an
admission made in the course of the proceedings in the same case, verbal or written, by a party
accepting for the purposes of the suit the truth of some alleged fact, which said party cannot
thereafter disprove (Remedial Law by Herrera, Oscar M. citing Section 4, Rule 129 of the Revised
[24]
Rules on Evidence and Evidence by Salonga).

The decretal portion of the 21 October 2002 Court of Appeals' Decision, states, thus:
WHEREFORE, in the light of the foregoing, the petition for review is GIVEN DUE COURSE. The
Decision dated 18 June 2001 of the Regional Trial Court of Manila, Branch 26 is hereby SET ASIDE.
The Decision dated 06 October 2000 of the Metropolitan Trial Court of Manila, Branch 13 is
[25]
AFFIRMED and REINSTATED.

The appellate court denied Luciano Tan's Motion for Reconsideration thereon, in a Resolution,[26] dated
12 May 2005.

Thus, petitioner comes before us, raising the following grounds, to wit:

I
THE HONORABLE COURT OF APPEALS COMMITTED A GRAVE REVERSIBLE ERROR WHEN
IT ISSUED ITS RESOLUTION DENYING PETITIONER'S MOTION FOR RECONSIDERATION OF
ITS DECISION BY RELYING SOLELY AND EXCLUSIVELY ON THE MARCH 28, 2005 DECISION
OF THE COURT OF APPEALS AND DESPITE THE FACT THAT THE SAID DECISION HAS NOT
YET BECOME FINAL AND EXECUTORY.

II

RESPONDENT RODIL ENTERPRISES IS GUILTY OF FORUM SHOPPING WHEN IT FILED THE

PETITION FOR CERTIORARI WITH THE COURT OF APPEALS DOCKETED AS CA-G.R. SP. NO.
79517 SEEKING TO NULLIFY THE ORDER OF EXECUTION BY THE OFFICE OF THE
PRESIDENT OF ITS 8 FEBRUARY 1994 DECISION IN OP CASE NO. 4968, DESPITE THE FACT
THAT ITS PREVIOUS PETITION FOR REVIEW FILED WITH THE COURT OF APPEALS OF THE
SAME DECISION OF THE OFFICE OF THE PRESIDENT DATED 8 FEBRUARY 1994 HAD BEEN
DISMISSED BY THE COURT OF APPEALS IN ITS RESOLUTION DATED NOVEMBER 17, 1994
DUE TO NON-COMPLIANCE WITH PROCEDURAL RULES.

III

THE HONORABLE COURT OF APPEALS COMMITTED A SERIOUS REVERSIBLE ERROR AND A

GRAVE MISAPPREHENSION OF THE FACTS AND MISAPPRECIATION OF THE EVIDENCE
WHEN IT RULED THAT PETITIONER IS A SUBLESSEE OF RESPONDENT AND THAT
[27]
PETITIONER WAS REMISS IN THE PAYMENT OF HIS RENTALS OVER THE PREMISES.

The Petition is without merit.

We shall address the first ground raised by petitioner with regard to the alleged reliance of the Court of
Appeals on the Decision of the Tenth Division of the same court, dated 28 March 2005 in CA-G.R. SP No.
79157, entitled, Rodil Enterprises, Inc. v. The Office of the President and Ides O'Racca Building Tenants
Association, Inc.[28]

Contrary to petitioner's contention, we do not find that the Court of Appeals was in error when it took
notice of the ruling in CA-G.R. SP No. 79157 in resolving petitioner's Motion for Reconsideration. As
respondent Rodil Enterprises asseverated, for the appellate court to ignore a decision rendered by a
division thereof would be to turn a blind eye on a valid judgment rendered by the same appellate body.
Neither can we give merit to petitioner's submission that the reliance by the Court of Appeals on its
Decision in CA-G.R. SP No. 79517 is premature and misplaced. More significantly, the contention of the
petitioner that the Decision in CA-G.R. SP No. 79517 has not attained finality has become mute when
viewed within recent factual developments. The ruling in CA-G.R. SP No. 79517 has long reached finality.
This Court in a Resolution[29] dated 25 January 2006 denied the Petition for Review on Certiorari filed
by the Ides O'Racca Building Tenants Association, Inc. thereon. On 20 March 2006, this Court denied
with finality the Motion for Reconsideration of the 25 January 2006 Resolution for lack of compelling
reason or substantial argument.[30]

Moreover, on 12 April 2004, the appellate court issued a Resolution,[31] granting petitioner a hearing on
its Motion for Reconsideration as the grounds cited therein needed further clarification. This belies
petitioner's claim that the resolution on the Motion for Reconsideration was based solely on the ruling of
the Court of Appeals in CA-G.R. SP No. 79517.
We come to the second ground raised by the petitioner. Petitioner argues that Rodil Enterprises is guilty
of forum shopping when it filed the Petition for Certiorari with the Court of Appeals, docketed as CA-G.R.
SP No. 79157,[32] after it filed an Appeal with the appellate court in CA-G.R. SP No. 34586.[33] Forum
shopping is the act of a party against whom an adverse judgment has been rendered in one forum,
seeking another and possibly favorable opinion in another forum other than by appeal or special civil
action of certiorari.[34]

The question of forum shopping is not even material to the instant petition.

It must be emphasized that neither CA-G.R. SP No. 79157 nor CA-G.R. SP No. 34586 is before this Court
for consideration. These cases are separate and distinct from CA-G.R. SP No. 67201 now before us.

What are assailed in the instant Petition are the Decision of the Court of Appeals, dated 21 October 2002
and the Resolution, dated 12 May 2005 in CA G.R. SP No. 67201, which reversed the ruling of the RTC,
and affirmed the MeTC, ordering Luciano Tan to vacate the premises and peacefully deliver possession to
Rodil Enterprises. The matter in controversy is the refusal of Luciano Tan to pay the monthly rentals over
Botica Divisoria under the contract of sublease between the parties.

On the other hand, CA-G.R. SP No. 79157 was a Petition for Review on Certiorari seeking to nullify the
Order of Execution of the Office of the President of its 8 February 1994 Decision in OP Case No. 4968
finding the Renewal of Contract of Lease, and the Supplemental Contract of no force and effect. CA-G.R.
SP No. 34586 was an appeal on the Decision in O.P. Case No. 4968, which was the basis of the Order of
Execution. If there has indeed been forum shopping when CA-G.R. SP No. 79517 was instituted during
the pendency of CA-G.R. SP No. 34586, such question should have been raised by petitioner, at first
instance, before the Court of Appeals in CA-G.R. SP No. 79517. It should be noted that the petition in CA-
G.R. SP No. 79517 was already given due course by the Court of Appeals and its ruling therein has long
attained finality when, on appeal to this Court, docketed as G.R. No. 169892, we denied the said appeal
with finality in our Resolutions dated 25 January 2000 and dated 20 March 2006. Whatever matters
concerning the said case is now beyond the jurisdiction of this Court to resolve.

We proceed to the final ground raised by the petitioner for the allowance of the instant Petition.
Petitioner assails the factual findings of the Court of Appeals when it ruled that there was a judicial
admission as to petitioner's liability under a contract of sublease between him and Rodil Enterprises.

To resolve this issue, a reading of the significant orders of the MeTC and the pleadings filed by petitioner
is warranted.

The MeTC issued an Order, dated 27 June 2000 of the following import, to wit:
On second call, the parties and counsel agreed in principle in open court to the following terms to
put an end to this civil case for ejectment between them:

1.) that the defendant [Luciano Tan] will pay P440,000.00 representing rentals from September,
1997 up to the present, which is the outstanding obligation of the defendant as of June, 2000 on or
before June 30, 2000; and

2.) the defendant [Luciano Tan] will pay the monthly rentals computed at P13,750.00 on or before
[35]
the 5th day of each month after June 30, 2000.
On 14 August 2000, petitioner filed a Motion to Allow Defendant to Deposit Rentals with the MeTC,
praying that he be allowed to deposit the rentals due as of August 2000, in the amount of P467,500.00,
and the subsequent monthly rentals as it falls due.

Petitioner posits that the aforesaid admission, made in open court, and then, reiterated in his Motion to
Allow Defendant to Deposit Rentals, cannot be taken as an admission of his liability, citing Section 27,
Rule 130 of the Rules of Court,[36] which states, inter alia, that an offer of compromise in a civil case is
not a tacit admission of liability.

The general rule is an offer of compromise in a civil case is not an admission of liability. It is not
admissible in evidence against the offeror.

The rule, however, is not iron-clad. This much was elucidated by this Court in Trans-Pacific Industrial
Supplies, Inc. v. Court of Appeals,[37] to wit:
To determine the admissibility or non-admissibility of an offer to compromise, the circumstances of
the case and the intent of the party making the offer should be considered. Thus, if a party denies
the existence of a debt but offers to pay the same for the purpose of buying peace and avoiding
litigation, the offer of settlement is inadmissible. If in the course thereof, the party making the offer
admits the existence of an indebtedness combined with a proposal to settle the claim amicably,
then, the admission is admissible to prove such indebtedness (Moran, Comments on the Rules of
Court, Vol. 5, p. 233 [1980 ed.]); Francisco, Rules of Court, Vol. VII, p. 325 [1973 ed.] citing McNiel
v. Holbrook, 12 Pac. (US) 84, 9 L. ed., 1009). Indeed, an offer of settlement is an effective admission
of a borrower's loan balance (L.M. Handicraft Manufacturing Corp. v. Court of Appeals, 186 SCRA
[38]
640 [1990]. x x x.

Similarly, in the case of Varadero de Manila v. Insular Lumber Co.[39] the Court applied the exception to
the general rule. In Varadero' there was neither an expressed nor implied denial of liability, but during
the course of the abortive negotiations therein, the defendant expressed a willingness to pay the plaintiff.
Finding that there was no denial of liability, and considering that the only question discussed was the
amount to be paid, the Court did not apply the rule of exclusion of compromise negotiations.

In the case at bar, the MeTC and the Court of Appeals properly appreciated petitioner's admission as an
exception to the general rule of inadmissibility. The MeTC found that petitioner did not contest the
existence of the sublease, and his counsel made frank representations anent the former's liability in the
form of rentals. This expressed admission was coupled with a proposal to liquidate. The Motion to Allow
Defendant to Deposit Rentals was deemed by the MeTC as an explicit acknowledgment of petitioner's
liability on the subleased premises. The Court of Appeals agreed with the MeTC. Indeed, the existence of
the Contract of Lease, dated 18 October 1999 was not denied by petitioner. The contracts that were
assailed by petitioner are the contracts dated 18 and 25 May 1992, the validity of which has been upheld
by this Court in the consolidated cases of G.R. No. 129609 and G.R. No. 135537.

Finally, we find a categorical admission on the part of petitioner, not only as to his liability, but also, as to
the amount of indebtedness in the form of rentals due. The Order of the MeTC dated 27 June 2000 was
clear that the petitioner agreed in open court to pay the amount of P440,000.00, representing
petitioner's unpaid rentals from September 1997 to June 2000; and that petitioner will pay the monthly
rentals computed at P13,750.00 on or before the 5th day of each month after 30 June 2000. The
petitioner's judicial admission in open court, as found by the MeTC, and affirmed by the Court of Appeals
finds particular significance when viewed together with his Motion to Allow Defendant to Deposit
Rentals, wherein petitioner stated that the rentals due on the premises in question from September 1997
up to the present amounted to P467,500.00, as of the date of filing the Motion. Petitioner cannot now be
allowed to reject the same. An admission made in the pleading cannot be controverted by the party
making such admission and are conclusive as to him, and that all proofs submitted by him contrary
thereto or inconsistent therewith should be ignored whether objection is interposed by a party or not.
[40] A judicial admission is an admission made by a party in the course of the proceedings in the same
case, for purposes of the truth of some alleged fact, which said party cannot thereafter disprove.[41]

WHEREFORE, the Petition is DENIED. The Decision dated 21 October 2002 and the Resolution dated 12
May 2005 in CA-G.R. SP No. 67201, affirming and reinstating the 6 October 2000 Decision of the MeTC
in Civil Case No. 166584 are AFFIRMED. Costs against petitioners.

SO ORDERED.

Ynares-Santiago, (Chairperson), Austria-Martinez, and Callejo, Sr., JJ., concur.

* Retired as of 7 December 2006.

[1] Penned by Associate Justice Andres B. Reyes, Jr. with Associate Justices Ruben T. Reyes and Danilo
B. Pine, concurring; rollo, pp. 43-51.

[2] Id. at 53-59.

[3] Penned by Judge Guillermo L. Loja, Sr.; records, pp. 300-301.

[4] Penned by Presiding Judge Eduardo B. Peralta, Jr.; id. at 216-219.

[5] Id.at 2-7.

[6] Per Bellosillo, J. with the concurrence of Mendoza, Quisumbing, Buena, and De Leon, Jr., JJ,
concurring. G.R. No. 129609 and G.R. No. 135537; 422 PHIL 388 (2001).

[7] Rollo, pp. 173-188.

[8] Records at 121.

[9] Id. at 162-163.

[10] SEC. 19. Immediate execution of judgment; how to stay same. If judgment is rendered against the
defendant, execution shall issue immediately upon motion, unless an appeal has been perfected and the
defendant to stay execution files a sufficient supersedeas bond, approved by the Municipal Trial Court
and executed in favor of the plaintiff to pay the rents, damages, and costs accruing down to the time of
the judgment appealed from, and unless, during the pendency of the appeal, he deposits with the
appellate court the amount of rent due from time to time under the contract, if any, as determined by the
judgment of the Municipal Trial Court. In the absence of a contract, he shall deposit with the Regional
Trial Court the reasonable value of the use and occupation of the premises for the preceding month or
period at the rate determined by the judgment of the lower court on or before the tenth day of each
succeeding month or period. The supersedeas bond shall be transmitted by the Municipal Trial Court,
with the other papers, to the clerk of the Regional Trial Court to which the action is appealed.

All amounts so paid to the appellate court shall be deposited with said court or authorized government
depositary bank, and shall be held there until the final disposition of the appeal, unless the court, by
agreement of the interested parties, or in the absence of reasonable grounds of opposition to a motion to
withdraw, or for justifiable reasons, shall decree otherwise. Should the defendant fail to make the
payments above prescribed from time to time during the pendency of the appeal, the appellate court,
upon motion of the plaintiff, and upon proof of such failure, shall order the execution of the judgment
appealed from with respect to the restoration of possession, but such execution shall not be a bar to the
appeal taking its course until the final disposition thereof on the merits.

After the case is decided by the Regional Trial Court, any money paid to the court by the defendant for
purposes of the stay of execution shall be disposed of in accordance with the provisions of the judgment
of the Regional Trial Court. In any case wherein it appears that the defendant has been deprived of the
lawful possession of land or building pending the appeal by virtue of the execution of the judgment of the
Municipal Trial Court, damages for such deprivation of possession and restoration of possession may be
allowed the defendant in the judgment of the Regional Trial Court disposing of the appeal.

[11] Id. at 127.

[12] Id. at 217.

[13] Id.

[14] Id.

[15] Id.

[16] Id. at 219.

[17] Id. at 248-252.

[18] The MeTC, in denying Rodil Enterprises' Motion held that Section 1, Rule 39 of the 1997 Rules of
Civil Procedure explicitly applies to a situation where no appeal was duly perfected, which situation was
not attendant in the case at bar; id. at 278-279.

[19] SECTION 27. Offer of compromise not admissible. In civil cases, an offer of compromise is not an
admission of any liability, and is not admissible in evidence against the offeror.
In criminal cases, except those involving quasi-offenses (criminal negligence) or those allowed by
law to be compromised, an offer of compromise by the accused may be received in evidence as an
implied admission of guilt.

A plea of guilty later withdrawn, or an unaccepted offer of a plea of guilty to a lesser offense, is not
admissible in evidence against the accused who made the plea or offer.

An offer to pay or the payment of medical, hospital or other expenses occasioned by an injury is not
admissible in evidence as proof of civil or criminal liability for the injury.

[20]
[20] Id. at 301.

[21] Id.

[22] On the matter of the subsisting Contract dated 18 October 1999, the Court of Appeals, held:

...
The evidence on record shows that there is a valid and subsisting Contract of Lease executed on 18
October 1999 between petitioner and the Republic through then Secretary Antonio H. Cerilles of the
DENR, which lease is for a period of fifteen (15) years from 01 September
1997 to 31 August 2012 (Rollo, Annex "3" of petition). This contract was executed after study and
recommendation by the DENR in view of a Resolution dated 21 May 1999 issued by the Office of the
President which: 1) held in abeyance its decision dated 08 February 1994, which decision, among
others, declared the renewal of contract of lease and its supplement of no force and effect and
directed the DENR to award the lease contract in favor of the Ides O'Racca Building Tenants
Association (ASSOCIATION) of which respondent herein is a member; and 2) ordered the remand
of the decision of the Office of the President awarding the lease contract to the ASSOCIATION for
further study and recommendation by the DENR (Rollo, Annex "A" of Annex "6" of petition).; CA
rollo, pp. 253-254.

[23] Supra note 6.

[24] CA rollo, p. 255-256.

[25] Id. at 256.

[26] Rollo, pp. 53-59.

[27] Id. at 24-25.

[28] Penned by Associate Justice Santiago Javier Ranada, with the concurrence of Associate Justice
Marina L. Buzon and Associate Justice Mario L. Guariña III; id. at 194-206.

[29] Rollo, p. 305.

[30] Id. at 305.

[31] CA rollo, p. 297.

[32] Entitled Rodil Enterprises, Inc. v. The Office of the Presidentand Ides O'Racca Building Tenants
Association, Inc.. This Petition for Review on Certiorari filed with the Court of Appeals is directed against
the Order of Execution by the Office of the President of its 8 February 1994 Decision in OP Case No.
4968, which declared the 18 May 1992 and the 25 May 1992 contracts of no force and effect.

[33] Entitled Rodil Enterprises Company, Inc. v. Spouses Saturnino B. Alvarez and Epifania Binay
Alvarez. This Petition for Review was directed on the 8 February 1994 Decision of the Office of the
President in OP Case No. 4968

[34] Heirs of Trinidad de Leon Vda. De Roxas v. Court of Appeals, G.R. No. 138660, 5 February 2004,
422 SCRA 101.
[35] Records, p. 121.

[36] SECTION 27. Offer of compromise not admissible. In civil cases, an offer of compromise is not an
admission of any liability, and is not admissible in evidence against the offeror.
In criminal cases, except those involving quasi-offenses (criminal negligence) or those allowed by
law to be compromised, an offer of compromise by the accused may be received in evidence as an
implied admission of guilt.

A plea of guilty later withdrawn, or an unaccepted offer of a plea of guilty to a lesser offense, is not
admissible in evidence against the accused who made the plea or offer.

An offer to pay or the payment of medical, hospital or other expenses occasioned by an injury is not
admissible in evidence as proof of civil or criminal liability for the injury. (Italics supplied.)

[37] G.R. No. 109172, 19 August 1994, 235 SCRA 494, 504.

[38] Id. at 504.

[39] G.R. No. 21911, 46 Phil. 176 (1924).

[40] Id. at 150.

[41] Republic v. Sarabia, G.R. No. 157847, 25 August 2005, 468 SCRA 142.
DIVISION

[ GR No. 165896, Sep 19, 2008 ]

RUSTICO ABAY v. PEOPLE

DECISION
587 Phil. 482

QUISUMBING, J.:
[1] [2]
This petition for review assails the Decision dated October 27, 2003 and the Resolution dated
October 14, 2004 of the Court of Appeals in CA G.R. CR No. 25212. The Court of Appeals had affirmed the
[3]
Decision of the Regional Trial Court (RTC) of San Pedro, Laguna, Branch 31, finding petitioners guilty of
the crime of Highway Robbery in Criminal Case No. 9045-B.

The facts are as follows:

On January 13, 1995, an Information was filed charging Rustico Abay, Jr., Reynaldo Darilag, Ramoncito
Aban, Ernesto Ricalde, Ramon Punzalan, Ariston Reyes, Isagani Espeleta, Cesar Camacho, Leonardo
Perello and Danilo Pascual with the crime of Highway Robbery/Brigandage. Said information reads:
xxxx

That on or about 7:30 o'clock in the evening of February 17, 1994, at the South Luzon Expressway,
Municipality of Biñan, Province of Laguna, and within the jurisdiction of this Honorable Court,
accused Ramoncito Aban y Casiano, Ernesto Ricalde y Jovillano, Rustico Abay, Jr. y Serafico, Ramon
Punzalan y Carpena, Reynaldo Darilag y Apolinario, Leonardo Perello y Esguerra and Danilo Pascual
y Lagata, who are principals by direct participation, conspiring and confederating together with
Ariston Reyes y Plaza, Isagani Espeleta y Arguelles and Cesar Camacho y Deolazo, who are principals
by indispensable cooperation and mutually helping each other, form themselves as band of robbers
and conveniently armed with handguns and deadly bladed weapons, and while on board a Kapalaran
Bus Line with plate number DVT-527 bound for Sta. Cruz, Laguna and a semi stainless owner type
jeep with plate number PJD-599 as backup vehicle, accused with the use of the aforesaid handguns
and bladed weapons with intent to gain and taking the passengers of the bus by surprise, did then and
there wilfully, unlawfully and feloniously divest and take away personalties of the passengers and/or
occupants therein, among them were:

a) Thelma Andrade y Lorenzana, P3,500.00 cash;

b) Gloria Tolentino y Pamatmat, P30,000.00 cash, $2,000.00 dollars and eyeglasses (Perare) worth
P5,000.00;
c) Lilian Ojeda y Canta, P120.00 cash;
d) Paul Masilang y Reyes, assorted used clothes of undetermined amount;

and by reason or on occasion of the said robbery, accused shot passenger Rogelio Ronillo y Lumboy,
inflicting upon him gunshot wounds on the neck, thus, accused performed all the acts of execution
that would produce the crime of homicide, but nevertheless, did not produce by reason of causes
independent of the will of the accused, that is by the timely medical assistance rendered to Rogelio
Ronillo y Lumboy, and to his damage and prejudice and to the damages and prejudices of the
following:

a) Thelma Andrade y Lorenzana in the sum of P3,500.00;

b) Gloria Tolentino y Pamatmat in the sum of P30,000.00;
c) Lilian Ojeda y Canta in the sum of P120.00

That the commission of the offense was attended with the aggravating circumstances of nighttime, by
a band and with the use of motor vehicle.

With the additional aggravating circumstance that accused Isagani Espeleta y Arguelles and Cesar
Camacho y Deolazo, being prison guards, have taken advantage of their public position by bringing
out prison inmates and equipped them with deadly weapons and were utilized in the commission of
robbery:
With the further additional aggravating circumstance on the following accused/inmates, as
follows:

Ramoncito Aban y Casiano with prison number 121577 as recidivist, having been convicted
1) by final judgment on June 15, 1984 by the RTC, Branch VI, Malolos, Bulacan, in Criminal
Case No. 3874-M for Robbery with Homicide;
Ariston Reyes y Plaza with prison number 115906-P, as recidivist, having been convicted by
final judgment on March 11, 1982 by the CFI, Manila in Criminal Case No. 82-3001 for
Robbery; having been convicted by final judgment on September 2, 1987 by the RTC Branch
2)
94, Quezon City, in Criminal Case No. 37432 for Robbery; and for Reiteracion or habituality
for having served sentence for Homicide, convicted on March 25, 1991 by the RTC, Branch
34, Quezon City;
Reynaldo Darilag y Apolinario with prison number 129552-P for reiteracion or habituality
for having been previously punished for an offense of murder in Criminal Case No. 039 by
3) the RTC, Branch 5, Tuguegarao, Cagayan and as a recidivist for having been previously
convicted by final judgment on July 8, 1987 by the same Court in Criminal Case No. 040 for
Robbery;
Rustico Abay, Jr. y Serafico with prison number 132566-P as a recidivist for having been
4) previously convicted by final judgment on August 31, 1988 by the RTC, Branch 163 Manila,
in Criminal Case No. 71060 for Theft;
Ramon Punzalan y Carpena with prison number 113605-P as recidivist for having been
5) previously convicted by final judgment by the RTC, Branch 111, San Pablo City on the
following dates, to wit:
January 8, 1981 in Criminal Case No. 2454-SP, for Robbery in Band;
December 8, 1981, in Criminal Case No. 2549 for Theft;
October 7, 1983 in Criminal Case No. 2550-SP for Carnapping; and
Having been previously convicted by final judgment by the City Court of San Pablo City on
March 30, 1981 in Criminal Case No. 17738 for simple theft;
Ernesto R[i]calde y Jov[i]llano with prison number N92P-2735, as a recidivist for having
6) been previously convicted by final judgment on August 2, 1992 by the RTC, Branch 54,
Lucena City in Criminal Case No. 91-679 for simple theft.

CONTRARY TO LAW.[4]

When arraigned, all the accused pleaded not guilty. However, upon motion filed by accused Ramoncito
Aban, with the conformity of the public prosecutor and private complainants Thelma Andrade and Gloria
Tolentino, he was allowed to withdraw his earlier plea of "not guilty". Thus, on September 11, 1997,
Ramoncito Aban, with the assistance of his counsel, pleaded "guilty" to the crime of simple robbery and on
even date, the trial court sentenced him. Meanwhile, trial proceeded with respect to the other accused.

The prosecution presented the following witnesses: Thelma Andrade, Gloria Tolentino and Ramoncito
Aban.

Thelma Andrade, a conductress of the Kapalaran Bus Line, testified that in the evening of February 17,
1994, the bus she was on was held-up. She said that Ramoncito Aban took from her, at gunpoint, the fares
she collected from the passengers of the bus. She also identified Rustico Abay, Jr. and Ernesto Ricalde as
[5]
two of the other companions of Aban.

Gloria Tolentino, a passenger of the bus, testified that someone shouted "hold-up" and ordered them to
bow their heads. She obeyed the order but once in a while she would raise her head. According to
Tolentino, the man seated beside her, Ariston Reyes, took her money and pieces of jewelry and handed
them over to Reynaldo Darilag. She also identified Rustico Abay, Jr. as one of the companions of the
robbers.[6]

Ramoncito Aban, the last witness, testified that on February 22, 1994, Camacho and Espeleta, who were
both prison guards of the New Bilibid Prison (NBP), took him and his companions, Ricalde, Abay, Jr.,
Punzalan, Darilag, Reyes, Perello and Pascual, on board the owner-type jeepney of Camacho to stage a
hold-up. He said they held-up a Kapalaran bus and it was Punzalan and Darilag who took the money and
other belongings of the passengers in the bus. He further testified that the February 22, 1994 hold-up was
the fourth staged by their group. According to Aban, the other hold-ups were carried out on February 11, 13
and 17, and all four hold-ups were staged by the same persons.[7]

The defense, for its part, presented the testimony of petitioners Rustico Abay, Jr., and Reynaldo Darilag,
the other co-accused, and Genaro Alberto.

All the accused denied participation in the robbery that happened on February 17, 1994. Abay, Jr., Darilag,
Reyes and Ricalde, who were detention prisoners, testified that they were confined in the NBP at the time
the incident happened.[8] Pascual and Perello, both civilians, testified that they were at home then.[9]
Genaro Alberto, a prison guard at the Bureau of Corrections, testified that during the headcount of the
inmates conducted at 5:00 p.m. and 8:00 p.m. on February 17, 1994, no inmate was found to be missing.
[10]

In a Decision dated November 29, 2000, the RTC of San Pedro, Laguna, Branch 31 found petitioners Abay,
Jr. and Darilag, as well as the other accused guilty of the crime charged. The trial court decreed as follows:
WHEREFORE, this Court hereby renders judgment convicting accused Ernesto Ricalde y Jovillano,
Rustico Abay, Jr. y Serafico, Ramon Punzalan y Carpena, Reynaldo Darilag y Apolicario, Ariston
Reyes y Plaza, Isagani Espeleta y Arguelles, Cesar Camacho y Deolazo, Leonardo Perello y Esguerra
and Danilo Pascual y Lagata of the crime of highway robbery/holdup attended by the aggravating
circumstance of a band only and hereby sentences each of them:

to suffer an indeterminate penalty of imprisonment [of] ... twelve (12) years and one (1) day as
1) minimum to thirteen (13) years, nine (9) months and eleven (11) days as maximum, both of
reclusion temporal in its minimum period;
to indemnify Thelma Andrade, the amount of P3,500 and Gloria Tolentino, the amount of
2)
P30,000 and US$2,000; and
3) to pay the costs.

[11]
SO ORDERED.

The Court of Appeals on appeal acquitted Espeleta, Camacho and Punzalan of the crime charged but
affirmed the conviction of petitioners Abay, Jr. and Darilag, Ricalde and Reyes. The dispositive portion of
the Decision dated October 27, 2003 states:
WHEREFORE, the assailed decision of the Regional Trial Court of San Pedro, Laguna, Branch 31, in
Criminal Case No. 9045-B, is REVERSED and SET ASIDE, but only insofar as accused-appellants
Isagani Espeleta, Cesar Camacho and Ramon Punzalan, are concerned, for insufficiency of evidence.
Isagani Espeleta, Cesar Camacho and Ramon Punzalan are hereby ACQUITTED. Unless held for any
other charge/charges their immediate release is hereby ordered.

With respect to accused-appellants Rustico Abay, Jr., Ernesto Ricalde, Reynaldo Darilag and Ariston
Reyes, the said decision of the Regional Trial Court of San Pedro, Laguna, Branch 31, in Criminal Case
No. 9045-B, finding them guilty beyond reasonable doubt of the crime of highway robbery/hold-up is
hereby AFFIRMED IN TOTO.

[12]
SO ORDERED.

Petitioners Abay, Jr. and Darilag moved for a reconsideration of the aforesaid decision, but their motion
was denied. Hence, they filed the instant petition raising a single issue:
WHETHER OR NOT PETITIONERS MAY BE CONVICTED ON THE BASIS OF THE TESTIMONIES
[13]
OF RAMONCITO ABAN, THELMA ANDRADE AND GLORIA TOLENTINO.

Stated simply, did the Court of Appeals err in affirming on the basis of the testimonies of said three
witnesses the conviction of petitioners Abay, Jr. and Darilag?

In their petition,[14] petitioners Abay, Jr. and Darilag assert that their guilt has not been proven beyond
reasonable doubt. They argue that Ramoncito Aban is not a credible witness and that he testified on an
incident which happened on February 22, 1994 and not on February 17, 1994 as alleged in the information.
Petitioners also claim that no physical evidence linking petitioners to the crime was presented. They
likewise point to a related case filed against them wherein they were acquitted. They fault the trial court
and Court of Appeals for disregarding their defense of alibi and in giving credence to the testimonies of
Andrade and Tolentino, contending that these testimonies were incredible and unsubstantiated. They
likewise contend that the lower courts erred in relying on Aban's extrajudicial confession which was
coerced.

The Office of the Solicitor General (OSG) challenges the petition on the ground that the petition raises a
question of fact. It also maintains that Aban is a credible witness and that petitioners' defense of alibi
cannot prevail over the positive testimonies of the prosecution witnesses.[15]

After a thorough examination of the evidence presented, we are in agreement that the appeal lacks merit.

At the outset, we note that it was not Aban's extrajudicial confession but his court testimony reiterating his
declarations in his extrajudicial admission, pointing to petitioners as his co-participants, which was
instrumental in convicting petitioners of the crime charged. Settled is the rule that when the extrajudicial
admission of a conspirator is confirmed at the trial, it ceases to be hearsay. It becomes instead a judicial
admission, being a testimony of an eyewitness admissible in evidence against those it implicates.[16] Here,
the extrajudicial confession of Aban was affirmed by him in open court during the trial. Thus, such
confession already partook of judicial testimony which is admissible in evidence against the petitioners.

We likewise agree in finding without merit the petitioners' argument that, since Aban's testimony is not
credible as to Espeleta, Camacho and Punzalan who were acquitted, then it should also be held not credible
as to them. But in our considered view, the petitioners are not similarly situated as their aforementioned
co-accused. Other than the testimony of Aban, there were no other witnesses who testified on the
participation of Espeleta, Camacho and Punzalan. In contrast, anent the herein petitioners' participation in
the crime, not only is their conviction based on the testimony of Aban, but it was also established by the
eyewitness testimony of Andrade and Tolentino who identified positively the petitioners in open court.
Petitioners further aver that Aban testified on a robbery which took place on February 22, 1994, not
February 17, 1994. Granted that Ramoncito Aban in fact testified on the details of the robbery which
happened on February 22, 1994. However, it is also worth stressing as part of the prosecution evidence that
Aban testified that malefactors used the same route and strategy in the perpetration of the robberies which
happened on four occasions -- February 11, 13, 17 and 22, 1994. What happened on February 22 was but a
replication, so to speak, of the robbery scenarios earlier perpetrated by the same gang on three previous
dates. It is very clear, however, that Aban, on the witness stand was testifying specifically also about the
offense that took place on February 17 in the Expressway, Biñan, Laguna.

Petitioners claim that no physical evidence was presented by the prosecution linking the petitioners to the
crime charged. But in this case, the alleged failure of the prosecution to present physical evidence does not
adversely affect the over-all weight of the evidence actually presented. Physical evidence would be merely
corroborative because there are credible witnesses who testified on the complicity of petitioners in the
crime charged.[17]

Further, petitioners assert that in a similar case filed against them, they were acquitted by the trial court of
Imus, Cavite. As correctly observed by the OSG, there is no showing that the amount and quality of
evidence in the present case and those in the case where petitioners were allegedly acquitted are the same.
Indeed, if petitioners truly believed that the prosecution evidence is deficient to establish their guilt, their
defense could have earlier filed a demurrer to evidence in this case. But, they did not.[18]

Additionally, petitioners claim that the trial court and the Court of Appeals erred in disregarding their
defense of alibi.[19] However, we are in agreement with the OSG that the defense of alibi cannot prevail
over the positive identification of the accused in this case.

Worth stressing, this Court has consistently ruled that the defense of alibi must be received with suspicion
and caution, not only because it is inherently weak and unreliable, but also because it can be easily
fabricated.[20] Alibi is a weak defense that becomes even weaker in the face of the positive identification of
the accused. An alibi cannot prevail over the positive identification of the petitioners by credible witnesses
who have no motive to testify falsely.[21]

In this case, petitioners' defense of alibi rested solely upon their own self-serving testimonies. For their
defense of alibi to prosper, it should have been clearly and indisputably demonstrated by them that it was
physically impossible for them to have been at, or near, the scene of the crime at the time of its
commission. But as the trial court correctly ruled, it was not impossible for the petitioners to be at the
scene of the crime since petitioners' place of detention is less than an hour ride from the crime scene.
Moreover, no dubious reason or improper motive was established to render the testimonies of Andrade,
Tolentino and Aban false and unbelievable. Absent the most compelling reason, it is highly inconceivable
why Andrade, Tolentino and Aban would openly concoct a story that would send innocent men to jail.[22]

Similarly, petitioners assert that the testimonies of Andrade and Tolentino are incredible and
unsubstantiated. They question the failure of Tolentino to identify Punzalan in court, and stress that
Andrade and Tolentino were not able to identify all the accused. The OSG, on the other hand, maintains
that the testimonies of Andrade and Tolentino are credible since the facts testified to by them and Aban
support each other.

We find petitioners' allegations untenable. The testimonies given by Andrade, Tolentino and Aban
corroborate each other. Their testimonies agree on the essential facts and substantially corroborate a
consistent and coherent whole. The failure of Tolentino to point to Punzalan in court does not dent her
credibility as a witness. It must be noted that it took years before Tolentino was placed on the witness
stand. As to the allegation that the testimony of Andrade and Tolentino are incredible because they were
not able to identify all the accused deserves scant consideration. During the robbery, they were told to bow
their heads and hence, they were only able to raise their heads from time to time. It is but logical that the
witnesses would not be able to identify all of the accused.

Considering the testimonies of witnesses and the evidence presented by the parties, we are in agreement
that the crime of Highway Robbery/Brigandage was duly proven in this case. As defined under Section 2(e)
of Presidential Decree No. 532,[23] Highway Robbery/Brigandage is the seizure of any person for ransom,
extortion or other unlawful purposes, or the taking away of the property of another by means of violence
against or intimidation of person or force upon things or other unlawful means, committed by any person
on any Philippine highway. Also, as held in People v. Puno:[24]
In fine, the purpose of brigandage is, inter alia, indiscriminate highway robbery. If the purpose
is only a particular robbery, the crime is only robbery, or robbery in band if there are at least four
armed participants...

Further, that Presidential Decree No. 532 punishes as highway robbery or brigandage only acts of
robbery perpetrated by outlaws indiscriminately against any person or persons on
Philippine highways as defined therein, and not acts of robbery committed against only a
predetermined or particular victim...[Emphasis supplied.]

The elements of the crime of Highway Robbery/Brigandage have been clearly established in this case. First,
the prosecution evidence demonstrated with clarity that the petitioners' group was organized for the
purpose of committing robbery in a highway. Next, there is no predetermined victim. The Kapalaran bus
was chosen indiscriminately by the accused upon reaching their agreed destination -- Alabang,
Muntinlupa.

All told, we rule that petitioners Rustico Abay, Jr. and Reynaldo Darilag are guilty beyond reasonable
doubt of the crime of Highway Robbery/Brigandage.

WHEREFORE, the Decision dated October 27, 2003 and the Resolution dated October 14, 2004 of the
Court of Appeals in CA G.R. CR No. 25212, affirming the Decision dated November 29, 2000 of the
Regional Trial Court of San Pedro, Laguna, Branch 31 in Criminal Case No. 9045-B, are hereby
AFFIRMED.

No pronouncement as to costs.

SO ORDERED.

Carpio-Morales, Tinga, Velasco, Jr., and Brion, JJ., concur.

[1] Rollo, pp. 36-57. Penned by Associate Justice Perlita J. Tria Tirona, with Associate Justices Portia
Aliño-Hormachuelos and Rosalinda Asuncion-Vicente concurring.

[2] Id. at 58-59.

[3] Dated November 29, 2000. CA rollo, pp. 105-118. Penned by Judge Stella Cabuco-Andres.

[4] Records (Vol. I), pp. 1-4.

[5] Id. at 15-16, 26-28; TSN, May 7, 1996, pp. 3, 5-6, 10-13.

[6] Id. at 21-23; TSN, July 24, 1996, pp. 3-10, 20.
[7] TSN, October 3, 1997, pp. 12-13, 16-22; TSN, October 30, 1997, pp. 8, 13, 15, 27-28; TSN, December 17,
1997, pp. 8-13.

[8] TSN, April 22, 1999, pp. 9-10, 12; TSN, June 17, 1999, p. 5; TSN, July 22, 1999, pp. 3-4; TSN, October
18, 1999, pp. 2-5; TSN, May 10, 2000, pp. 2-3, 5; TSN, June 14, 2000, pp. 3-4.

[9] TSN, September 4, 2000, pp. 3-4.

[10] TSN, October 15, 1999, pp. 3-5, 8.

[11] Rollo, p. 75.

[12] Id. at 57.

[13] Id. at 16.

[14] Id. at 9-35.

[15] Id. at 125-135.

[16] People v. Silan, G.R. No. 116011, March 7, 1996, 254 SCRA 491, 503; People v. Victor, G.R. Nos. 75154-
55, February 6, 1990, 181 SCRA 818, 830.

[17] Rollo, p. 132.

[18] Id. at 132-133.

[19] Id. at 23-25.

[20] People v. Tuppal, G.R. Nos. 137982-85, January 13, 2003, 395 SCRA 72, 80.

[21] Vergara v. People, G.R. No. 128720, January 23, 2002, 374 SCRA 313, 325.

[22] CA rollo, p. 116.

[23] "Anti-Piracy and Anti-Highway Robbery Law of 1974" effective August 8, 1974.

[24] G.R. No. 97471, February 17, 1993, 219 SCRA 85, 97.
DIVISION

[ GR No. 106094, Dec 28, 1992 ]

PSCFC FINANCIAL CORPORATION v. CA

RESOLUTION
G.R. No. 106094

BELLOSILLO, J.:
At issue in this petition for review is whether a request for admission directed to an adverse party under
Sec. 1, Rule 26, of the Rules of Court may be answered only by his counsel.
On 17 March 1988, petitioner PSC Financial Corporation (PSCFC) filed a complaint against private
respondent Banco Filipino Savings and Mortgage Bank (Banco Filipino) for annulment of foreclosure
proceedings and damages with the Regional Trial Court of Makati, Metro Manila, docketed as CivilCase
No. 88-368.
Petitioner PSCFC alleges that as land developer it availed itself of the Home Financing Plan of Banco
Filipino and borrowed from the latter the amount of P6,630,690.00 as "developer loan". As security,
petitioner constituted a mortgage over several lots in Pasay City which properties were not yet sold at that
time to third parties. It was agreed that under the Home Financing Plan, the "developer loan" would
mature only after the lots shall have been subdivided and improved and then sold to third persons who
would then be substituted as mortgagors to the extent of the loan value of the lots and houses bought by
them. However, on 25 September 1987, without the loan having matured as none of the lots have been
convey to buyers, such that the latter could now take the place of petitioner as mortgagors, the mortgage
was extrajudicially foreclosed and a certificate of sale was executed in favor of private respondent Banco
Filipino.
In their answer of 10 June 1988, private respondents admitted the loan of P6,630,690.00 for which
petitioner had executed a promissory note secured by a real estate mortgage on the properties described in
the complaint. However, they denied that petitioner had availed itself of Banco Filipino's Home Financing
Plan, averring instead that under the promissory note and the contract of mortgage, the subject loan would
fall due "1 year from date" or on 5 January 1986 and that upon default of petitioner, Banco Filipino could
immediately foreclose the mortgage under Act No. 3135 as in fact it did, upon compliance with the legal
requirements with respect to extrajudicial foreclosures.
On 21 June 1988, petitioner served upon Banco Filipino a written request for admission of the truth of
certain matters set forth as follows:

"1. The plaintiff (PSCFC) x x x was x x x granted by you under your BF Home Financing Plan, on the
security of mortgages constituted on the lands acquired, under the terms of which the developer
loans, despite the contents of the covering promissory notes and security instruments, would mature
only after the development of the acquired lands into residential subdivision and the resale of the x x x
lots x x x to interested third parties who would then be substituted as mortgagors x x x x

"2. x x x in 1984, availing itself of your said Home Financing Plan, the plaintiff obtained from you a
loan x x x of P6,630,690.00 for which it signed in your favor a promissory note on the security of a
mortgage constituted on x x x lots, which were not then yet sold to any third person x x x x
"3. x x x on September ??, 1987, without the said loan having yet matured for the reason that none
of the x x x lots had yet been the subject of sale to third persons such that substitution of the latter as
mortgagors in your favor could not yet be had, a certificate of sale was executed by the Notary Public
[1]
over the x x x lands in your favor."

On 27 June 1988, petitioner received Banco Filipino's answer to its request for admission signed by its
counsel, Atty. Philip Sigfrid A. Fortun. Counsel admitted, inter alia, petitioner's mortgage loan as well as
the fact that Banco Filipino was engaged in land development loans. However, respondent denied that
petitioner availed itself of the Home Financing Plan including the agreement that the maturity of the debt
would depend on the resale of the mortgaged subdivision lots.
On 8 August 1988, petitioner made a second request for admission on respondent Banco Filipino impliedly
objecting to the first reply having been made by its lawyer, Atty. Fortun, who was not even an attorney yet
when Banco Filipino inaugurated its financing plan in February 1968 and therefore did not have personal
knowledge of the financing scheme. The second request called on Banco Filipino to admit that it did not
send a formal notice of its intention to foreclose the mortgage and that there was no publication of the
notice of foreclosure in a newspaper of general circulation.
By way of response made 26 August and 4 November 1988, respondent Banco Filipino objected to the
matters requested on the ground of irrelevancy and ?????ied all the rest. In its motion of 7 November 1988
petitioner asked the trial court for a ruling that the matters sought to be admitted in its second bid for
admission should be considered as impliedly admitted when the answer was made by a lawyer who was not
qualified to do so as he had no direct and personal knowledge of the matters sought to be admitted. In
insisting that only a client could make a binding admission in discovery proceedings, petitioner cites Koh v.
IAC.[2] It even went to the extent of quoting in its petition, found on pages 15-16, certain paragraphs
supposedly taken therefrom which are not actually found therein, except the last paragraph which states:
"x x x x All the parties are required to lay their cards on the table so that justice can be rendered on the
merits of the case."
In any case, the lower court was not persuaded, so that petitioner went to the Court of Appeals maintaining
that there was a tacit admission of the matters included in its second request for admission as the answer
thereto was signed only by Atty. Fortun who had no personality to do so.
The appellate court sustained the trial court; hence, this instant recourse.
Petitioner submits that the answer to the request for admission under Rule 26 should be made by the party
himself and nobody else, not even his lawyer. Consequently, failure of respondent Banco Filipino, upon
whom the call for admission was served, to render the required sworn statement would constitute an
implied admission of the facts sought to be admitted. Thus, it must be the party itself who must respond to
the request for admission and that a mere reply made and verified by its counsel alone is insufficient and
contrary to the Rules and the intent behind recourse to modes of discovery.
The argument is untenable. Section 21 of Rule 138 states‑

"SEC. 21. Authority of attorney to appear. - An attorney is presumed to be properly authorized to

represent any cause in which he appears, and no written power of attorney is required to authorize
him to appear in court for his client x x x x"[3]

Petitioner has not shown that the case at bar falls under any of the recognized exceptions as found in Art.
1878 of the Civil Code which enumerates the instances when special powers of attorney are necessary, or in
Rule 20 of the Rules of Court on pre-trial where the parties and their attorneys are both directed to appear
before the court for a conference; so that for counsel to appear at the pre-trial in behalf of his client, he
must clothe the former with an adequate authority in the form of a special power of attorney or corporate
resolution.
Section 23 of Rule 138 provides that "(a)ttorneys have authority to bind their clients in any case by any
agreement in relation thereto made in writing, and in taking appeals, and in all matters of ordinary judicial
procedure x x x x"
Thus, when Rule 26 states that a party shall respond to the request for admission, it should not be
restrictively construed to mean that a party may ????? engage the services of counsel to make the response
in his behalf. Indeed, the theory of petitioner must not be taken seriously; otherwise, it will negate the
[4] [5]
principles on agency in the Civil Code, as well as Sec. 23, Rule 138, of the Rules of Court.
Nonetheless, even assuming arguendo that Atty. Philip Sigfrid Fortun overstepped his authority, it is only
his client, respondent Banco Filipino, which has the prerogative to impugn his acts and not petitioner, the
adverse party. Interestingly, Banco Filipino has not objected to the response made by its counsel in its
behalf.
ACCORDINGLY, the Court Resolves to: (a) DENY the instant petition for utter lack of merit; and, (b)
REQUIRE counsel for petitioner, ATTY. LUTGARDA C. BAQUIRAN-PERALTA, of the BALGOS & PEREZ
LAW OFFICE, 5th Floor, Corinthian Plaza, Paseo de Roxas, Makati, Metro Manila, to SHOW CAUSE
within ten (10) days from notice hereof why she should not be administratively dealt with for misquoting
the text of the decision in Koh v. IAC, supra, to support her position and attain a favorable judgment for
her client.
SO ORDERED.
Cruz, (Chairman), Padilla, and Griño-Aquino, JJ., concur.

[1]
Quoted in CA Decision, pp. 3-4; Rollo, pp. 30-31.
[2] G.R. No. 71388, 23 September 1986, 144 SCRA 259.
[3]
See Mercado v. Ubay, No. L-35830, 24 July 1990, 187 SCRA 719.
[4] Art. 1868, et seq.
[5]
Villa Rhecar Bus v. De La Cruz, G.R. No. 78936, 7 January 1988, 157 SCRA 13.
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Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. 79094 June 22, 1988

MANOLO P. FULE, petitioner,

vs.
THE HONORABLE COURT OF APPEALS, respondent.

Balagtas P. Ilagan for petitioner.

The Solicitor General for respondent.

MELENCIO-HERRERA, J.:
This is a Petition for Review on certiorari of the Decision of respondent Appellate Court, which affirmed the judgment of the Regional Trial Court, Lucena City,
Branch LIV, convicting petitioner (the accused-appellant) of Violation of Batas Pambansa Blg. 22 (The Bouncing Checks Law) on the basis of the Stipulation of
Facts entered into between the prosecution and the defense during the pre-trial conference in the Trial Court. The facts stipulated upon read:

a) That this Court has jurisdiction over the person and subject matter of this case;

b) That the accused was an agent of the Towers Assurance Corporation on or before January 21,
1981;

c) That on January 21, 1981, the accused issued and made out check No. 26741, dated January 24,
1981 in the sum of P2,541.05;

d) That the said check was drawn in favor of the complaining witness, Roy Nadera;

e) That the check was drawn in favor of the complaining witness in remittance of collection;

f) That the said check was presented for payment on January 24, 1981 but the same was dishonored
for the reason that the said checking account was already closed;

g) That the accused Manolo Fule has been properly Identified as the accused party in this case.

At the hearing of August 23, 1985, only the prosecution presented its evidence consisting of Exhibits "A," "B" and
"C." At the subsequent hearing on September 17, 1985, petitioner-appellant waived the right to present evidence
and, in lieu thereof, submitted a Memorandum confirming the Stipulation of Facts. The Trial Court convicted
petitioner-appellant.

On appeal, respondent Appellate Court upheld the Stipulation of Facts and affirmed the judgment of conviction. 1

Hence, this recourse, with petitioner-appellant contending that:

The Honorable Respondent Court of Appeals erred in the decision of the Regional Trial Court
convicting the petitioner of the offense charged, despite the cold fact that the basis of the conviction
was based solely on the stipulation of facts made during the pre-trial on August 8, 1985, which was not
signed by the petitioner, nor by his counsel.

Finding the petition meritorious, we resolved to give due course.

The 1985 Rules on Criminal Procedure, which became effective on January 1, 1985, applicable to this case since
the pre-trial was held on August 8, 1985, provides:

SEC. 4. Pre-trial agreements must be signed. — No agreement or admission made or entered during
the pre-trial conference shall be used in evidence against the accused unless reduced to writing and
signed by him and his counsel. (Rule 118) [Emphasis supplied]

By its very language, the Rule is mandatory. Under the rule of statutory construction, negative words and phrases
are to be regarded as mandatory while those in the affirmative are merely directory (McGee vs. Republic, 94 Phil.
820 [1954]). The use of the term "shall" further emphasizes its mandatory character and means that it is imperative,
operating to impose a duty which may be enforced (Bersabal vs. Salvador, No. L-35910, July 21, 1978, 84 SCRA
176). And more importantly, penal statutes whether substantive and remedial or procedural are, by consecrated
rule, to be strictly applied against the government and liberally in favor of the accused (People vs. Terrado No. L-
23625, November 25, 1983, 125 SCRA 648).

The conclusion is inevitable, therefore, that the omission of the signature of the accused and his counsel, as
mandatorily required by the Rules, renders the Stipulation of Facts inadmissible in evidence. The fact that the lawyer
of the accused, in his memorandum, confirmed the Stipulation of Facts does not cure the defect because Rule 118
requires both the accused and his counsel to sign the Stipulation of Facts. What the prosecution should have done,
upon discovering that the accused did not sign the Stipulation of Facts, as required by Rule 118, was to submit
evidence to establish the elements of the crime, instead of relying solely on the supposed admission of the accused
in the Stipulation of Facts. Without said evidence independent of the admission, the guilt of the accused cannot be
deemed established beyond reasonable doubt.

Consequently, under the circumstances obtaining in this case, the ends of justice require that evidence be
presented to determine the culpability of the accused. When a judgment has been entered by consent of an attorney
without special authority, it will sometimes be set aside or reopened (Natividad vs. Natividad, 51 Phil. 613 [1928]).

WHEREFORE, the judgment of respondent Appellate Court is REVERSED and this case is hereby ordered RE-
OPENED and REMANDED to the appropriate Branch of the Regional Trial Court of Lucena City, for further
reception of evidence.

SO ORDERED.

Yap, C.J., Fernan, Narvasa, Cruz, Feliciano, Gancayco, Padilla, Bidin, Sarmiento, Cortes, Griño-Aquino and
Medialdea, JJ., concur.

Paras, J., took no part.

Gutierrez, Jr., J., is on leave.

Footnotes

1 Per Justice Gloria C. Paras; Justices Jose C. Campos, Jr. and Conrado T. Limcaoco, concurring.

The Lawphil Project - Arellano Law Foundation

DIVISION

[ GR NO. L-23264, Mar 15, 1974 ]

ROMULO TOLENTINO v. HELEN VILLANUEVA

DECISION
155 Phil. 1

MAKASIAR, J.:
Petitioner prays for the nullification of the order dated July 29, 1963 of the respondent judge of the
Juvenile and Domestic Relations Court of Manila.

On April 26, 1962, petitioner Romulo Tolentino filed a suit for annulment of his marriage to private
respondent Helen Villanueva, alleging that his consent was obtained through fraud because immediately
after the marriage celebration, he discovered that private respondent was pregnant despite the fact that he
had no sexual relations with her prior to the marriage ceremony; and that they did not live as husband and
wife as immediately after the marriage celebration, Helen Villanueva left his house and her whereabouts
remained unknown to him until January, 1962 when he discovered that she is residing in San Francisco,
Cebu. Said marriage was solemnized by Quezon City Judge Mariano R. Virtucio on September 28, 1959.
Said case was docketed as Civil Case No. 43347 of the Juvenile and Domestic Relations Court of Manila.

Despite the fact that she was served with summons and copy of the complaint, Helen failed to file a
responsive pleading, for which reason petitioner filed on June 13, 1962 a motion to declare her in default
and to set the date for the presentation of his evidence.

In an order dated June 28, 1962, respondent Judge declared private respondent in default, but, pursuant to
the provision of Articles 88 and 101 of the Civil Code of the Philippines, referred the case to the City Fiscal
of Manila for investigation to determine whether collusion exists between the parties, directing the City
Fiscal to submit his report within sixty (60) days from receipt thereof, and, in the event of a negative
finding, to represent the State at the trial of the case to prevent fabrication of evidence; and likewise
directed herein petitioner to furnish the City Fiscal with copies of the complaint and such other documents
necessary for the City Fiscal's information and guidance.

On July 3, 1962, thru counsel, petitioner submitted to the City Fiscal only a copy of his complaint.

Assistant City Fiscal Rafael A. Jose, assigned to the case, issued a subpoena to petitioner's counsel requiring
him to bring petitioner with him as well as copies of other documents in connection with the annulment
case on August 27, 1962 at 10:00 A.M.

Plaintiff's counsel, in a letter dated August 24, 1962, informed Assistant City Fiscal Jose that he could not
comply with the subpoena for it will unnecessarily expose his evidence.

In a motion dated and filed on October 29, 1962, petitioner, thru counsel, prayed the respondent Judge to
set the date for the reception of his evidence on the ground that the City Fiscal had not submitted a report
of his findings despite the lapse of sixty (60) days from July 10, 1962 when he submitted to the City Fiscal a
copy of the complaint.

On November 6, 1962, respondent Judge denied the aforesaid motion of petitioner unless he submits
himself for interrogation by the City Fiscal to enable the latter to report whether or not there is collusion
between the parties.

In an order dated July 29, 1963, respondent Judge dismissed the complaint in view of the fact that
petitioner is not willing to submit himself for interrogation by the City Fiscal pursuant to the provisions of
the second paragraph of Article 101 of the New Civil Code.

His motions for the reconsideration of the aforesaid order having been denied on July 29, 1963 and on
April 11, 1964, petitioner now files his petition to annul said order of July 29, 1963 and to compel the
respondent Judge to receive his evidence.

Articles 88 and 101 of the Civil Code of the Philippines expressly prohibit the rendition of a decision in suits
for annulment of marriage and legal separation based on a stipulation of facts or by confession of judgment
and direct that in case of non-appearance of defendant, the court shall order the prosecuting attorney to
inquire whether or not collusion between the parties exists, and if none, said prosecuting attorney shall
intervene for the State to prevent fabrication of evidence for the plaintiff. Thus, Articles 88 and 101 state:
"ART. 88. No judgment annulling a marriage shall be promulgated upon a stipulation of facts or by
confession of judgment.

"In case of non-appearance of the defendant, the provisions of article 101, paragraph 2, shall be
observed."

"ART. 101. No decree of legal separation shall be promulgated upon a stipulation of facts or by
confession of judgment.

"In case of non-appearance of the defendant, the court shall order the prosecuting attorney to inquire
whether or not a collusion between the parties exists. If there is no collusion, the prosecuting attorney
shall intervene for the State in order to take care that the evidence for the plaintiff is not fabricated."

Even the 1940 Rules of Court, which preceded the 1950 Civil Code of the Philippines, direct that actions for
the annulment of marriage or divorce shall not be decided unless the material facts alleged in the complaint
are proved (Sec. 10, Rule 35, 1940 Rules of Court). The same rule is reiterated in Section 1 of Rule 19 of the
1964 Revised Rules, with "legal separation" being substituted for "divorce", obviously because the present
Civil Code does not authorize absolute divorce.

The prohibition expressed in the aforecited laws and rules is predicated on the fact that the institutions of
marriage and of the family are sacred and therefore are as much the concern of the State as of the spouses;
because the State and the public have vital interest in the maintenance and preservation of these social
institutions against desecration by collusion between the parties or by fabricated evidence. The prohibition
against annulling a marriage based on the stipulation of facts or by confession of judgment or by non-
appearance of the defendant stresses the fact that marriage is more than a mere contract between the
parties; and for this reason, when the defendant fails to appear, the law enjoins the court to direct the
prosecuting officer to intervene for the State in order to preserve the integrity and sanctity of the marital
bonds (De Ocampo vs. Florenciano, 107 Phil. 35, 38-40; Brown vs. Yambao, 102 Phil. 168, 172; Bigornia de
Cardenas vs. Cardenas, et. al., 98 Phil. 73, 78-79; Roque vs. Encarnacion, et. al., 95 Phil. 643, 646).

Hence, the inevitable conclusion is that the petition is without merit.

WHEREFORE, THE ORDER DATED JULY 29, 1963 IS HEREBY AFFIRMED AND THE PETITION IS
HEREBY DISMISSED. WITH COSTS AGAINST PETITIONER.

Makalintal, C.J., Ruiz Castro, Teehankee, Esguerra, and Muñoz Palma, JJ., concur.
DIVISION

[ GR No. 72806, Jan 09, 1989 ]

EPIFANIO CRUZ v. IAC

DECISION
251 Phil. 9

REGALADO, J.:
Petitioners seek herein the review and reversal of the decision of the respondent Intermediate Appellate
[1]
Court in AC-G.R. No. SP-06317 which dismissed their petition for certiorari questioning, inter alia, the
judicial foreclosure and the judicial confirmation of the subsequent sale of their property pursuant to the
[2]
judgment of the therein respondent Regional Trial Court of Bulacan, Malolos Branch VIII ; as well as the
[3]
resolution of the herein respondent court denying their motion for reconsideration.

The challenged decision of the respondent court provides the factual background of this case, thus:
"The relevant and undisputed facts indicate that petitioners mortgaged certain properties to private
respondents who eventually sued them for non-payment and for the judicial foreclosure of
aforementioned mortgages under Rule 68 of the Rules of Court. In the course of the proceedings a
compromise agreement was reached and this became the basis of the Judgment on Compromise
issued by the respondent Judge of the Regional Trial Court (RTC) of Bulacan.

"Pertinent parts of the Agreement, as embodied in the decision, reads:

Upon full payment of the sums of P55,000.00 and P320,000.00 within the period agreed upon, the
'3. plaintiff shall deliver to the defendants Transfer Certificate of Title No. T-32286 (M) of the Registry of
Deeds of Bulacan, Meycauayan Branch, together with all the documents submitted to the plaintiff;

Should the defendants fail to pay the sums agreed upon within the period stipulated, the defendants
4. shall pay plaintiff the entire sum of P92,149.00 under the Deed of Real Estate Mortgage attached to the
complaint as Annex 'C' and an additional sum of P44,700.00 as attorney's fees;

Upon failure of the defendants to pay the sums agreed upon within the period stipulated, plaintiff shall
be entitled to a writ of execution directing the foreclosure of all the mortgages subject matter of this
5.
litigation and to the principal sum of P300,000.00 in the Deed of Real Estate Mortgage attached to the
complaint as Annex 'B' shall be added the sum of P44,700.00 as attorney's fees.'
"For failure of the petitioners to comply with certain provisions of the agreement, private respondent
moved for a writ of execution. The mortgaged properties were foreclosed upon in an auction sale and
were purchased by the private respondents as the highest bidder. The sale was later judicially
confirmed."[4]

Preliminarily, We dispose of the procedural issue raised by petitioners over the statement of respondent
court that appeal should have been their proper remedy in said court at that juncture, since their objections
to the judicial foreclosure proceeding and the subsequent confirmation of the sale, if correct, would
constitute errors of judgment and not of jurisdiction. Petitioners' justification of their remedy, contending
that the compromise agreement was null and void and that the writ of execution thereafter issued and
enforced was invalid, as well as their arguments thereon, are pointless at this stage. The fact remains that,
obviously in the broader interests of justice, the respondent court nevertheless proceeded to decide the
petition for certiorari and ruled on the specific points raised therein in a manner akin to what would have
been done on assignments of error in a regular appeal. The petition therein was, therefore, disposed of on
the merits and not on a dismissal due to erroneous choice of remedies or technicalities.

Central to the controversy as the vital issue for resolution, instead, is the submission of petitioners that the
aforestated judgment on compromise was null and void ab initio because it allegedly "denied them their
equity of redemption under Sec. 2, Rule 68 of the Rules of Court, by not allowing the petitioners to pay 'into
court within a period of not less than ninety (90) days from the date of the service of said order', and that it
is only if the petitioners default in said payment that the property should be sold to pay the judgment debt".
[5]

The provision relied upon reads as follows:

"Sec. 2. Judgment on foreclosure for payment or sale. - If upon the trial in such action the court shall
find the facts set forth in the complaint to be true, it shall ascertain the amount due to the plaintiff
upon the mortgage debt or obligation, including interest and costs, and shall render judgment for the
sum so found due and order the same to be paid into court within a period of ninety (90) days from
the date of the service of such order, and that in default of such payment the property be sold to realize
the mortgage debt and costs."

The procedure outlined therein obviously refers to the situation where a full-blown trial, with the
introduction of evidence is entailed, such that the trial court has to thereafter determine whether the
allegations in the complaint have been proved, then ascertain the total amount due to the plaintiff, and
thereafter render judgment for such amount with an order for the payment thereof in accordance with the
prescription of the aforequoted section, sans the agreement of the parties on those particulars. There being
no such agreement, the specified procedure has necessarily to be followed and the minimum period of
ninety (90) days for payment, also referred to as the period for the exercise of the equity, as distinguished
from the right, of redemption has to be observed and provided for in the judgment in the foreclosure suit.
Jurisprudentially, it has also been held that the exercise of the equity of redemption may be made beyond
the 90-days period but before the foreclosure sale is confirmed by the court.[6]

It stands to reason, however, that the aforesaid procedure cannot be of substantial application to, and can
be modified by, a valid agreement of the parties, such as in the compromise agreement subject of and
constituting the basis for the judgment on compromise rendered in Civil Case No. 7418-M of the Regional
Trial Court of Bulacan, as hereinbefore stated. The dispositions of Section 2 of Rule 68 clearly cannot apply
since the parties therein had specifically agreed on the amounts to be paid, when they should be paid and
the effects of non-payment or violation of the terms of their agreement. Thus, the petitioners undertook to
pay on the obligation subject of the compromise agreement, P55,000.00 on or before August 20, 1984 and
P320,000.00 on or before September 30, 1984[7] and, in case of default on their part, the consequences are
spelled out in Paragraphs 3, 4 and 5 of their aforequoted compromise agreement[8], all of which are
premised on the precise contingency of failure by the petitioners to comply within the period stipulated.

Paragraph 5 lucidly provides that, upon the happening of the aforesaid contingency contemplated therein,
private respondent Godofredo Valmeo shall be entitled to a writ of execution directing the foreclosure of
all the mortgages subject matter of said litigation. It is noteworthy that this particular proviso is what
distinguishes this case from other judicial foreclosure cases decided on the bases of compromise
agreements but which did not have the same specification. Ineluctably, therefore, the petitioners herein
thereby waived their so-called equity of redemption and the case was necessarily removed from the
operation of Section 2, Rule 68 insofar as its provisions are inconsistent with the judgment on compromise.

This is not an isolated proposition as it may initially appear. True, the procedural requirement in Section 2
grants a substantive right to the mortgagor, consisting of the so-called equity of redemption, which after the
ordinary adversarial course of a controverted trial of a case may not be omitted in the relief to be awarded

[9]
in the judgment therein.[9] The same, however, may be waived, as already demonstrated.

In the same manner, the procedural requirements for the appointment of and proceedings by
commissioners in actions for expropriation[10] and judicial partition[11] may be said to likewise confer
substantive rights on the party defendants therein, which procedural steps may not be omitted over their
objection but can likewise be waived or dispensed with on mutual agreement. In these three special civil
actions, although dissimilar in the specific procedure in their special features, their rationale and specific
objectives are congruent in that they afford added protection to proprietary rights, but which additional
protection may be waived, as by stipulations to that effect in compromise agreements.

It is hornbook knowledge that a judgment on compromise has the effect of res judicata on the parties and
should not be disturbed except for vices of consent or forgery.[12] To challenge the same, a party must
move in the trial court to set aside the said judgment and also to annul the compromise agreement itself,
before he can appeal from that judgment.[13] Definitely, the petitioners have ignored these remedial
avenues.

There can be no pretension that the compromise agreement as formulated and approved is contrary to law,
public policy or morals or that the same was tainted with circumstances vitiating consent. The petitioners
entered into the same duly assisted by competent counsel and the entire judicial proceeding was under
judicial scrutiny and supervision.

Hence, as correctly observed by the respondent court:

"(1) Re the 'equity of redemption'. It is true that under Rule 68 of the Rules of Court, the debtor-
mortgagor is allowed a period of 90 days within which to pay his 'debt, to prevent foreclosure, but this
right, to Our mind was impliedly waived when the parties signed the compromise agreement, which
was later embodied in the Judgment. The agreement in effect says that upon breach of the same (and
this fact is not disputed), foreclosure should be resorted to. The agreement was clear that payment
had to be made within the stipulated period. It would be absurd to say that after said stipulated
period, petitioners would still be given an additional 90-day period for the 'equity'. Had petitioners
intended still an exercise in 'equity', they should have insisted on a clarificatory provision in the
[14]
agreement."

Petitioners next shift to the writ of execution pursuant to which the foreclosure sale was conducted by
respondent sheriff, stigmatizing it as a falsified writ of execution. This is unwarranted and baseless.

What actually transpired was that the respondent Branch Clerk of Court issued a writ of execution on
October 9, 1984 containing the following directives:
"NOW THEREFORE, you are hereby commanded to execute and make effective the aforequoted
decision of this Honorable Court dated August 20, 1984 and make a return of this writ within sixty
(60) days from receipt hereof. But if sufficient property cannot be found thereon, then we command
[15]
you that of the land and building of said defendants you make the said sum of money."

This honest and inconsequential mistake on the part of the respondent clerk, subsequently rectified by the
respondent sheriff, was satisfactorily explained by the court a quo in its order resolving several motions on
May 27, 1985[16] as follows:
"As to the alleged defect in the writ of execution, the mortgagors could have moved to have the writ
quashed before the confirmation of the sale, but they failed to raise that point or any point for that
matter. The alleged defect in the writ of execution is that it differs from that quoted in the notice of
sale. The writ issued by the Branch Clerk of Court included an extra sentence which reads: 'But if
sufficient personal property cannot be found thereon, then we command you that of the land and
buildings of said defendants you make the said sum of money.' The surplusage is understandable and
excusable as these wordings are usually included in the standard form copied by the stenographer in
ordinary writs of execution. It has been held that if the writ of execution does not conform to the
judgment, the writ may be amended so that the judgment may be properly satisfied. In fact, the slight
difference between the writ handed by the Branch Clerk and that reproduced in the notice of sale was
for the reason that the Deputy Sheriff, realizing the imperfection of the original writ, rectified it by
eliminating the surplusage to make it conform to the terms of the judgment. Although the better step
that should have been taken by the sheriff was to inform the Branch Clerk about it for the proper
amendment, the rectification done by said sheriff, in effect, was confirmed and adopted by the court
when it confirmed the sale without any objection from the herein movants. At any rate, there is no
[17]
showing of any detriment to the interest of the mortgagee resulting from this rectification."

Petitioners' complaints about the supposed irregularity in the publication of the notice of sale involve
questions of fact which cannot be resolved by this Court. Furthermore, petitioners had all the opportunity,
in the several motions filed in and heard by the trial court and especially in the hearing for the confirmation
of sale, to ventilate the alleged irregularities but they never did so.

Neither are We inclined to nor justified in disturbing the factual findings of the respondent court
debunking petitioners' claim that private respondent Valmeo had, subsequent to the foreclosure sale of the
property, agreed to allow petitioners to redeem the property. In reliance upon the findings of the trial court
in its orders of October 8, 1984[18] and March 20, 1985,[19] the respondent court categorically declared:
"(5) Re the 'new agreement to redeem'. There was actually NO SUCH AGREEMENT. True,
petitioners had been informed in Court by private respondents' previous counsel (Atty. Cecilio de la
Merced) that he was allowing petitioners 'to redeem'. BUT this was without any authorization from
the private respondents. In fact, in due time, private respondents were able to inform the respondent
Judge of this non-authorization and the Judge was able to rectify her previous order allowing such
'redemption'. Be it noted that aforementioned previous counsel's services were TERMINATED by the
[20]
private respondents."

Petitioners close their jeremiad by an appeal for consideration on grounds of equity. However, We also
recognize the principle of countervailing equity in favor of the adverse party, opposed to that which
petitioners seek to be recognized, and which should not be subordinated because it is of equal strength and
equally deserving of consideration.

WHEREFORE, the petition at bar is hereby DENIED, with costs against the petitioners.

SO ORDERED.

Melencio-Herrera, Padilla, and Sarmiento, JJ., concur.

Paras, J., no part, penned the CA decision.

[1]Penned by Edgardo L. Paras, J., with the concurrence of Vicente V. Mendoza and Luis Javellana, JJ.

[2]
[2]Civil Case No. 7418-M; Judge Elsie Ligot-Telan, presiding.

[3] Annex B, Petition; Rollo, 38-39.

[4] Annex A, Petition; Rollo, 34-35.

[5] Brief for Petitioners, 7; Rollo, 186.

[6] Anderson, et al. vs. Reyes, et al., 54 Phil. 944 (1930); Castillo vs. Samonte, 106 Phil. 1023 (1960).

[7] Petition, 3; Rollo, 8.

[8] See Annex A, Petition, Footnote 4, ante.

[9] De Leon vs. Ibañez, 95 Phil. 119 (1954).

[10] Sections 6 to 8, Rule 67.

[11] Sections 3 to 7, Rule 69.

[12] Dormitorio, et al. vs. Fernandez, et al., 72 SCRA 388 (1976); Arcenas, et al. vs. Cinco, et al., 74 SCRA
118 (1976); Arts. 2037 and 2038, Civil Code.

[13] Mabale, et al. vs. Apalisok, et al., 88 SCRA 234 (1979).

[14] Rollo, 36.

[15] Brief for Respondents, 4; Rollo, 197.

[16] Annex F, Petition; 48-53.

[17] Ibid., 51-52.

[18] Annex D, Petition; Rollo, 42.

[19] Annex E, ibid.; ibid., 43-47.

[20] Annex A, ibid.; ibid., 37.