CASES ON EVIDENCE

17. ARCEO VE PEOPLE Such promise was made verbally seven (7) times. When his
patience ran out, [Cenizal] brought the check to the bank for
Evidence; Best Evidence Rule; The best evidence rule applies only encashment. The head office of the Bank of the Philippine Islands
where the content of the document is the subject of inquiry, and through a letter dated December 5, 1991, informed [Cenizal] that
not where the issue is the execution or existence of the document the check bounced because of insufficient funds.
or the circumstances surrounding its execution.—Petitioner’s
insistence on the presentation of the check in evidence as a Thereafter, [Cenizal] went to the house of [petitioner] to inform
condition sine qua non for conviction under BP 22 is wrong. him of the dishonor of the check but [Cenizal] found out that
Petitioner anchors his argument on Rule 130, Section 3, of the [petitioner] had left the place. So, [Cenizal] referred the matter to
Rules of Court, otherwise known as the best evidence rule. a lawyer who wrote a letter giving [petitioner] three days from
However, the rule applies only where the content of the document receipt thereof to pay the amount of the check. [Petitioner] still
is the subject of the inquiry. Where the issue is the execution or failed to make good the amount of the check. As a consequence,
existence of the document or the circumstances surrounding its [Cenizal] executed on January 20, 1992 before the office of the
execution, the best evidence rule does not apply and testimonial City Prosecutor of Quezon City his affidavit and submitted
evidence is admissible. documents in support of his complaint for [e]stafa and [v]iolation
of [BP 22] against [petitioner]. After due investigation, this case
CORONA, J.: for [v]iolation of [BP 22] was filed against [petitioner] on March 27,
1992. The check in question and the return slip were however lost
This petition for review on certiorari assails the April 28, 1999 by [Cenizal] as a result of a fire that occurred near his residence
decision1 and March 27, 2000 resolution2 of the Court of Appeals on September 16, 1992. [Cenizal] executed an Affidavit of Loss
in CA-G.R. CR No. 19601 affirming the trial court’s judgment regarding the loss of the check in question and the return slip.3
finding petitioner Pacifico B. Arceo, Jr. liable for violation of Batas
Pambansa Blg. (BP) 22, otherwise known as the "Bouncing After trial, petitioner was found guilty as charged. Aggrieved, he
Checks Law." appealed to the Court of Appeals. However, on April 28, 1999, the
appellate court affirmed the trial court’s decision in toto.
The facts of the case as found by the trial court and adopted by Petitioner sought reconsideration but it was denied. Hence, this
the Court of Appeals follow. petition.

On March 14, 1991, [petitioner], obtained a loan from private Petitioner claims that the trial and appellate courts erred in
complainant Josefino Cenizal [] in the amount of P100,000.00. convicting him despite the failure of the prosecution to present
Several weeks thereafter, [petitioner] obtained an additional loan the dishonored check during the trial. He also contends that he
of P50,000.00 from [Cenizal]. [Petitioner] then issued in favor of should not be held liable for the dishonor of the check because it
Cenizal, Bank of the Philippine Islands [(BPI)] Check No. 163255, was presented beyond the 90-day period provided under the law.
postdated August 4, 1991, for P150,000.00, at Cenizal’s house Petitioner further questions his conviction since the notice
located at 70 Panay Avenue, Quezon City. When August 4, 1991 requirement was not complied with and he was given only three
came, [Cenizal] did not deposit the check immediately because days to pay, not five banking days as required by law. Finally,
[petitioner] promised [] that he would replace the check with cash.

1
CASES ON EVIDENCE

petitioner asserts that he had already paid his obligation to appearing thereon, for which reason it is dishonored by the
Cenizal. drawee bank.

Petitioner’s contentions have no merit. Where the check is drawn by a corporation, company or entity,
the person or persons who actually signed the check in behalf of
Significance of the 90-day Period such drawer shall be liable under this Act.
For Presentment of the Check
In Wong v. Court of Appeals,4 the Court ruled that the 90-day
Petitioner asserts that there was no violation of BP 22 because period provided in the law is not an element of the offense.
the check was presented to the drawee bank only on December 5, Neither does it discharge petitioner from his duty to maintain
1991 or 120 days from the date thereof (August 4, 1991). He sufficient funds in the account within a reasonable time from the
argues that this was beyond the 90-day period provided under the date indicated in the check. According to current banking
law in connection with the presentment of the check. We practice, the reasonable period within which to present a check to
disagree. the drawee bank is six months. Thereafter, the check becomes
stale and the drawer is discharged from liability thereon to the
Section 1 of BP 22 provides: extent of the loss caused by the delay.

SECTION 1. Checks without sufficient funds Any person who Thus, Cenizal’s presentment of the check to the drawee bank 120
makes or draws and issues any check to apply on account or for days (four months) after its issue was still within the allowable
value, knowing at the time of issue that he does not have period. Petitioner was freed neither from the obligation to keep
sufficient funds in or credit with the drawee bank for the payment sufficient funds in his account nor from liability resulting from
of such check in full upon its presentment, which check is the dishonor of the check.
subsequently dishonored by the drawee bank for insufficiency of
funds or credit or would have been dishonored for the same Applicability of the
reason had not the drawer, without any valid reason, ordered the Best Evidence Rule
bank to stop payment, shall be punished by imprisonment of not
less than thirty days but not more than one (1) year or by a fine of Petitioner’s insistence on the presentation of the check in
not less than but not more than double the amount of the check evidence as a condition sine qua non for conviction under BP 22
which fine shall in no case exceed Two Hundred Thousand Pesos, is wrong. Petitioner anchors his argument on Rule 130, Section 3,
or both such fine and imprisonment at the discretion of the court. of the Rules of Court, otherwise known as the best evidence rule.
However, the rule applies only where the content of the document
The same penalty shall be imposed upon any person who, having is the subject of the inquiry. Where the issue is the execution or
sufficient funds in or credit with the drawee bank when he makes existence of the document or the circumstances surrounding its
or draws and issues a check, shall fail to keep sufficient funds or execution, the best evidence rule does not apply and testimonial
to maintain a credit to cover the full amount of the check if evidence is admissible.5
presented within a period of ninety (90) days from the date

2
CASES ON EVIDENCE

The gravamen of the offense is the act of drawing and issuing a drawee bank for the payment of the check in full upon its
worthless check.6 Hence, the subject of the inquiry is the fact of presentment; and
issuance or execution of the check, not its content.
3. subsequent dishonor of the check by the drawee bank for
Here, the due execution and existence of the check were insufficiency of funds or credit, or dishonor of the check for the
sufficiently established. Cenizal testified that he presented the same reason had not the drawer, without any valid cause,
originals of the check, the return slip and other pertinent ordered the bank to stop payment.8
documents before the Office of the City Prosecutor of Quezon City
when he executed his complaint-affidavit during the preliminary All these elements are present in this case.
investigation. The City Prosecutor found a prima facie case
against petitioner for violation of BP 22 and filed the Both the trial and appellate courts found that petitioner issued
corresponding information based on the documents. Although the BPI check no. 163255 postdated August 4, 1991 in the amount of
check and the return slip were among the documents lost by P150,000 in consideration of a loan which he obtained from
Cenizal in a fire that occurred near his residence on September Cenizal. When the check was deposited, it was dishonored by the
16, 1992, he was nevertheless able to adequately establish the drawee bank for having been drawn against insufficient funds.
due execution, existence and loss of the check and the return slip There was sufficient evidence on record that petitioner knew of
in an affidavit of loss as well as in his testimony during the trial of the insufficiency of his funds in the drawee bank at the time of
the case. the issuance of the check. In fact, this was why, on maturity date,
he requested the payee not to encash it with the promise that he
Moreover, petitioner himself admited that he issued the check. He would replace it with cash. He made this request and assurance
never denied that the check was presented for payment to the seven times but repeatedly failed to make good on his promises
drawee bank and was dishonored for having been drawn against despite the repeated accommodation granted him by the payee,
insufficient funds. Cenizal.

Presence of the Notice of Dishonor to Petitioner

Elements of the Offense And Payment of the Obligation

Based on the allegations in the information,7 petitioner was The trial court found that, contrary to petitioner’s claim, Cenizal’s
charged for violating the first paragraph of BP 22. The elements of counsel had informed petitioner in writing of the check’s dishonor
the offense are: and demanded payment of the value of the check. Despite receipt
of the notice of dishonor and demand for payment, petitioner still
1. the making, drawing and issuance of any check to apply to failed to pay the amount of the check.
account or for value;
Petitioner cannot claim that he was deprived of the period of five
2. knowledge of the maker, drawer, or issuer that at the time of banking days from receipt of notice of dishonor within which to
issue he does not have sufficient funds in or credit with the pay the amount of the check.9 While petitioner may have been
given only three days to pay the value of the check, the trial court

3
CASES ON EVIDENCE

found that the amount due thereon remained unpaid even after
five banking days from his receipt of the notice of dishonor. This
negated his claim that he had already paid Cenizal and should
therefore be relieved of any liability.

Moreover, petitioner’s claim of payment was nothing more than a

mere allegation. He presented no proof to support it. If indeed
there was payment, petitioner should have redeemed or taken the
check back in the ordinary course of business.10 Instead, the
check remained in the possession of the payee who demanded the
satisfaction of petitioner’s obligation when the check became due
as well as when the check was dishonored by the drawee bank.

These findings (due notice to petitioner and nonpayment of the

obligation) were confirmed by the appellate court. This Court has
no reason to rule otherwise. Well-settled is the rule that the
factual findings of the trial court, when affirmed by the appellate
court, are not to be disturbed.11

WHEREFORE, the petition is hereby DENIED. The April 28, 1999

decision and March 27, 2000 resolution of the Court of Appeals in
CA-G.R. CR No. 19601 are AFFIRMED.

Costs against petitioner.

SO ORDERED.

4
CASES ON EVIDENCE

character. Under a rule permitting the impeachment of an

adverse witness, although the calling party does not vouch for the
witness’ veracity, he is nonetheless bound by his testimony if it is
not contradicted or remains unrebutted. Same; Same; Same; A
party who calls his adversary as a witness is not bound by the
18. CHUA GAW VS CHUA latter’s testimony only in the sense that he may contradict him by
introducing other evidence to prove a state of facts contrary to
Remedial Law; Evidence; Adverse Witnesses; The rule is that the what the witness testifies on.—A party who calls his adversary as
plaintiff must rely on the strength of his own evidence and not a witness is, therefore, not bound by the latter’s testimony only in
upon the weakness of the defendant’s evidence; Preponderance of the sense that he may contradict him by introducing other
evidence is determined by considering all the facts and evidence to prove a state of facts contrary to what the witness
circumstances of the case, culled from the evidence regardless of testifies on. A rule that provides that the party calling an adverse
who actually presented it.—The delineation of a piece of evidence witness shall not be bound by his testimony does not mean that
as part of the evidence of one party or the other is only significant such testimony may not be given its proper weight, but merely
in determining whether the party on whose shoulders lies the that the calling party shall not be precluded from rebutting his
burden of proof was able to meet the quantum of evidence needed testimony or from impeaching him. This, the petitioner failed to
to discharge the burden. In civil cases, that burden devolves upon do.
the plaintiff who must establish her case by preponderance of
evidence. The rule is that the plaintiff must rely on the strength of Same; Same; Best Evidence Rule; A notarized document carries
his own evidence and not upon the weakness of the defendant’s evidentiary weight as to its due execution and documents
evidence. Thus, it barely matters who with a piece of evidence is acknowledged before a notary public have in their favor the
credited. In the end, the court will have to consider the entirety of presumption of regularity.—It is also worthy to note that both the
the evidence presented by both parties. Preponderance of Deed of Partition and the Deed of Sale were acknowledged before
evidence is then determined by considering all the facts and a Notary Public. The notarization of a private document converts
circumstances of the case, culled from the evidence, regardless of it into a public document, and makes it admissible in court
who actually presented it. without further proof of its authenticity. It is entitled to full faith
and credit upon its face. A notarized document carries evidentiary
Same; Same; Same; Under a rule permitting the impeachment of weight as to its due execution, and documents acknowledged
an adverse witness, although the calling party does not vouch for before a notary public have in their favor the presumption of
the witness’ veracity, he is nonetheless bound by his testimony if regularity. Such a document must be given full force and effect
it is not contradicted or remains unrebutted.—That the witness is absent a strong, complete and conclusive proof of its falsity or
the adverse party does not necessarily mean that the calling party nullity on account of some flaws or defects recognized by law. A
will not be bound by the former’s testimony. The fact remains public document executed and attested through the intervention
that it was at his instance that his adversary was put on the of a notary public is, generally, evidence of the facts therein
witness stand. Unlike an ordinary witness, the calling party may express in clear unequivocal manner.
impeach an adverse witness in all respects as if he had been
called by the adverse party, except by evidence of his bad

5
CASES ON EVIDENCE

Same; Same; Same; The “best evidence rule” as encapsulated in On December 8, 1986, his surviving heirs executed a Deed of
Rule 130, Section 3 of the Revised Rules of Civil Procedure Extra-Judicial Partition and Renunciation of Hereditary Rights in
applies only when the content of such document is the subject of Favor of a Co-Heir5 (Deed of Partition, for brevity), wherein the
the inquiry.—The “best evidence rule” as encapsulated in Rule heirs settled their interest in Hagonoy Lumber as follows: one-half
130, Section 3, of the Revised Rules of Civil Procedure applies (1/2) thereof will pertain to the surviving spouse, Chan Chi, as
only when the content of such document is the subject of the her share in the conjugal partnership; and the other half,
inquiry. Where the issue is only as to whether such document equivalent to P207,743.60, will be divided among Chan Chi and
was actually executed, or exists, or on the circumstances relevant the seven children in equal pro indiviso shares equivalent to
to or surrounding its execution, the best evidence rule does not P25,967.00 each.6 In said document, Chan Chi and the six
apply and testimonial evidence is admissible. Any other children likewise agreed to voluntarily renounce and waive their
substitutionary evidence is likewise admissible without need to shares over Hagonoy Lumber in favor of their co-heir, Chua Sioc
account for the original. Moreover, production of the original may Huan.
be dispensed with, in the trial court’s discretion, whenever the
opponent does not bona fide dispute the contents of the In May 1988, petitioner Concepcion Chua Gaw and her husband,
document and no other useful purpose will be served by requiring Antonio Gaw, asked respondent, Suy Ben Chua, to lend them
production. P200,000.00 which they will use for the construction of their
house in Marilao, Bulacan. The parties agreed that the loan will
NACHURA, J.: be payable within six (6) months without interest.7 On June 7,
1988, respondent issued in their favor China Banking
This is a Petition for Review on Certiorari from the Decision1 of Corporation Check No. 2408108 for P200,000.00 which he
the Court of Appeals (CA) in CA-G.R. CV No. 66790 and delivered to the couple’s house in Marilao, Bulacan. Antonio later
Resolution2 denying the motion for reconsideration. The assailed encashed the check.
decision affirmed the ruling of the Regional Trial Court (RTC) in a
Complaint for Sum of Money in favor of the plaintiff. On August 1, 1990, their sister, Chua Sioc Huan, executed a
Deed of Sale over all her rights and interests in Hagonoy Lumber
The antecedents are as follows: for a consideration of P255,000.00 in favor of respondent.9

Spouses Chua Chin and Chan Chi were the founders of three Meantime, the spouses Gaw failed to pay the amount they
business enterprises3 namely: Hagonoy Lumber, Capitol Sawmill borrowed from respondent within the designated period.
Corporation, and Columbia Wood Industries. The couple had Respondent sent the couple a demand letter,10 dated March 25,
seven children, namely, Santos Chua; Concepcion Chua; Suy Ben 1991, requesting them to settle their obligation with the warning
Chua; Chua Suy Phen; Chua Sioc Huan; Chua Suy Lu; and Julita that he will be constrained to take the appropriate legal action if
Chua. On June 19, 1986, Chua Chin died, leaving his wife Chan they fail to do so.
Chi and his seven children as his only surviving heirs. At the time
of Chua Chin’s death, the net worth of Hagonoy Lumber was Failing to heed his demand, respondent filed a Complaint for Sum
P415,487.20.4 of Money against the spouses Gaw with the RTC. The complaint
alleged that on June 7, 1988, he extended a loan to the spouses

6
CASES ON EVIDENCE

Gaw for P200,000.00, payable within six months without interest, share thereof, which was estimated to be worth not less than
but despite several demands, the couple failed to pay their P500,000.00.14
obligation.11
In his Answer to Amended Counterclaim, respondent explained
In their Answer (with Compulsory Counterclaim), the spouses that his sister, Chua Sioc Huan, became the sole owner of
Gaw contended that the P200,000.00 was not a loan but Hagonoy Lumber when the heirs executed the Deed of Partition
petitioner’s share in the profits of Hagonoy Lumber, one of her on December 8, 1986. In turn, he became the sole owner of
family’s businesses. According to the spouses, when they Hagonoy Lumber when he bought it from Chua Sioc Huan, as
transferred residence to Marilao, Bulacan, petitioner asked evidenced by the Deed of Sale dated August 1, 1990.15
respondent for an accounting, and payment of her share in the
profits, of Capital Sawmills Corporation, Columbia Wood Defendants, in their reply,16 countered that the documents on
Industries Corporation, and Hagonoy Lumber. They claimed that which plaintiff anchors his claim of ownership over Hagonoy
respondent persuaded petitioner to temporarily forego her Lumber were not true and valid agreements and do not express
demand as it would offend their mother who still wanted to the real intention of the parties. They claimed that these
remain in control of the family businesses. To insure that she will documents are mere paper arrangements which were prepared
defer her demand, respondent allegedly gave her P200,000.00 as only upon the advice of a counsel until all the heirs could reach
her share in the profits of Hagonoy Lumber.12 and sign a final and binding agreement, which, up to such time,
has not been executed by the heirs.17
In his Reply, respondent averred that the spouses Gaw did not
demand from him an accounting of Capitol Sawmills Corporation, During trial, the spouses Gaw called the respondent to testify as
Columbia Wood Industries, and Hagonoy Lumber. He asserted adverse witness under Section 10, Rule 132. On direct
that the spouses Gaw, in fact, have no right whatsoever in these examination, respondent testified that Hagonoy Lumber was the
businesses that would entitle them to an accounting thereof. conjugal property of his parents Chua Chin and Chan Chi, who
Respondent insisted that the P200,000.00 was given to and were both Chinese citizens. He narrated that, initially, his father
accepted by them as a loan and not as their share in Hagonoy leased the lots where Hagonoy Lumber is presently located from
Lumber.13 his godfather, Lu Pieng, and that his father constructed the two-
storey concrete building standing thereon. According to
With leave of court, the spouses Gaw filed an Answer (with respondent, when he was in high school, it was his father who
Amended Compulsory Counterclaim) wherein they insisted that managed the business but he and his other siblings were helping
petitioner, as one of the compulsory heirs, is entitled to one-sixth him. Later, his sister, Chua Sioc Huan, managed Hogonoy
(1/6) of Hagonoy Lumber, which the respondent has arrogated to Lumber together with their other brothers and sisters. He stated
himself. They claimed that, despite repeated demands, that he also managed Hagonoy Lumber when he was in high
respondent has failed and refused to account for the operations of school, but he stopped when he got married and found another
Hagonoy Lumber and to deliver her share therein. They then job. He said that he now owns the lots where Hagonoy Lumber is
prayed that respondent make an accounting of the operations of operating.18
Hagonoy Lumber and to deliver to petitioner her one-sixth (1/6)

7
CASES ON EVIDENCE

On cross-examination, respondent explained that he ceased to be 3. Costs of suit.

a stockholder of Capitol Sawmill when he sold his shares of stock
to the other stockholders on January 1, 1991. He further testified The defendants’ counterclaim is hereby dismissed for being
that Chua Sioc Huan acquired Hagonoy Lumber by virtue of a devoid of merit.
Deed of Partition, executed by the heirs of Chua Chin. He, in
turn, became the owner of Hagonoy Lumber when he bought the SO ORDERED.22
same from Chua Sioc Huan through a Deed of Sale dated August
1, 1990. 19 The RTC held that respondent is entitled to the payment of the
amount of P200,000.00 with interest. It noted that respondent
On re-direct examination, respondent stated that he sold his personally issued Check No. 240810 to petitioner and her
shares of stock in Capitol Sawmill for P254,000.00, which husband upon their request to lend them the aforesaid amount.
payment he received in cash. He also paid the purchase price of The trial court concluded that the P200,000.00 was a loan
P255,000.00 for Hagonoy Lumber in cash, which payment was advanced by the respondent from his own funds and not
not covered by a separate receipt as he merely delivered the same remunerations for services rendered to Hagonoy Lumber nor
to Chua Sioc Huan at her house in Paso de Blas, Valenzuela. petitioner’s advance share in the profits of their parents’
Although he maintains several accounts at Planters Bank, businesses.
Paluwagan ng Bayan, and China Bank, the amount he paid to
Chua Sioc Huan was not taken from any of them. He kept the The trial court further held that the validity and due execution of
amount in the house because he was engaged in rediscounting the Deed of Partition and the Deed of Sale, evidencing transfer of
checks of people from the public market. 20 ownership of Hagonoy Lumber from Chua Sioc Huan to
respondent, was never impugned. Although respondent failed to
On December 10, 1998, Antonio Gaw died due to cardio vascular produce the originals of the documents, petitioner judicially
and respiratory failure.21 admitted the due execution of the Deed of Partition, and even
acknowledged her signature thereon, thus constitutes an
On February 11, 2000, the RTC rendered a Decision in favor of exception to the best evidence rule. As for the Deed of Sale, since
the respondent, thus: the contents thereof have not been put in issue, the non-
presentation of the original document is not fatal so as to affect
WHEREFORE, in the light of all the foregoing, the Court hereby its authenticity as well as the truth of its contents. Also, the
renders judgement ordering defendant Concepcion Chua Gaw to parties to the documents themselves do not contest their validity.
pay the [respondent] the following: Ultimately, petitioner failed to establish her right to demand an
accounting of the operations of Hagonoy Lumber nor the delivery
1. P200,000.00 representing the principal obligation with legal of her 1/6 share therein.
interest from judicial demand or the institution of the complaint
on November 19, 1991; As for petitioner’s claim that an accounting be done on Capitol
Sawmill Corporation and Columbia Wood Industries, the trial
2. P50,000.00 as attorney’s fees; and court held that respondent is under no obligation to make such

8
CASES ON EVIDENCE

an accounting since he is not charged with operating these

enterprises.23 On December 2, 2003, the CA denied the petitioner’s motion for
reconsideration for lack of merit.27
Aggrieved, petitioner appealed to the CA, alleging that the trial
court erred (1) when it considered the amount of P200,000.00 as Petitioner is before this Court in this petition for review on
a loan obligation and not Concepcion’s share in the profits of certiorari, raising the following errors:
Hagonoy Lumber; (2) when it considered as evidence for the
defendant, plaintiff’s testimony when he was called to testify as I. THAT ON THE PRELIMINARY IMPORTANT RELATED ISSUE,
an adverse party under Section 10 (e), Rule 132 of the Rules of CLEAR AND PALPABLE LEGAL ERROR HAS BEEN COMMITTED
Court; and (3) when it considered admissible mere copies of the IN THE APPLICATION AND LEGAL SIGNIFICANCE OF THE RULE
Deed of Partition and Deed of Sale to prove that respondent is ON EXAMINATION OF ADVERSE PARTY OR HOSTILE WITNESS
now the owner of Hagonoy Lumber.24 UNDER SECTION 10 (d) AND (e) OF RULE 132, CAUSING
SERIOUS DOUBT ON THE LOWER COURT’S APPEALED
On May 23, 2003, the CA affirmed the Decision of the RTC. 25 DECISION’S OBJECTIVITY, ANNEX "C".
The appellate court found baseless the petitioner’s argument that
the RTC should not have included respondent’s testimony as part II. THAT ON THE IMPORTANT LEGAL ISSUE RELATIVE TO THE
of petitioner’s evidence. The CA noted that the petitioner went on AFORESAID TWO OPPOSING CLAIMS OF RESPONDENT AND
a fishing expedition, the taking of respondent’s testimony having PETITIONER, CLEAR AND PALPABLE LEGAL ERROR HAS BEEN
taken up a total of eleven hearings, and upon failing to obtain COMMITTED UNDER THE LOWER COURT’S DECISION ANNEX
favorable information from the respondent, she now disclaims the "C" AND THE QUESTIONED DECISION OF MAY 23, 2003
same. Moreover, the CA held that the petitioner failed to show (ANNEX "A") AND THE RESOLUTION OF DECEMBER 2, 2003,
that the inclusion of respondent’s testimony in the statement of (ANNEX "B") IN DEVIATING FROM AND DISREGARDING
facts in the assailed decision unduly prejudiced her defense and ESTABLISHED SUPREME COURT DECISIONS ENJOINING
counterclaims. In fact, the CA noted that the facts testified to by COURTS NOT TO OVERLOOK OR MISINTERPRET IMPORTANT
respondent were deducible from the totality of the evidence FACTS AND CIRCUMSTANCES, SUPPORTED BY CLEAR AND
presented. CONVINCING EVIDENCE ON RECORD, AND WHICH ARE OF
GREAT WEIGHT AND VALUE, WHICH WOULD CHANGE THE
The CA likewise found untenable petitioner’s claim that Exhibits RESULT OF THE CASE AND ARRIVE AT A JUST, FAIR AND
"H" (Deed of Sale) and Exhibit "I" (Deed of Partition) were merely OBJECTIVE DECISION. (Citations omitted)
temporary paper arrangements. The CA agreed with the RTC that
the testimony of petitioner regarding the matter was III. THAT FINALLY, AS TO THE OTHER LEGAL IMPORTANT
uncorroborated — she should have presented the other heirs to ISSUE RELATIVE TO CLAIM OR OWNERSHIP OF THE "Hagonoy
attest to the truth of her allegation. Instead, petitioner admitted Lumber" FAMILY BUSINESS, CLEAR AND PALPABLE LEGAL
the due execution of the said documents. Since petitioner did not ERROR HAS BEEN COMMITTED ON THE REQUIREMENTS AND
dispute the due execution and existence of Exhibits "H" and "I", CORRECT APPLICATION OF THE "BEST EVIDENCE RULE"
there was no need to produce the originals of the documents in UNDER SECTION 3, RULE 130 OF THE REVISED RULES OF
accordance with the best evidence rule.26 COURT.28

9
CASES ON EVIDENCE

The petition is without merit. If there was an error committed by the RTC in ascribing to the
petitioner the respondent’s testimony as adverse witness during
Petitioner contends that her case was unduly prejudiced by the cross-examination by his own counsel, it constitute a harmless
RTC’s treatment of the respondent’s testimony as adverse witness error which would not, in any way, change the result of the case.
during cross-examination by his own counsel as part of her
evidence. Petitioner argues that the adverse witness’ testimony In the first place, the delineation of a piece of evidence as part of
elicited during cross-examination should not be considered as the evidence of one party or the other is only significant in
evidence of the calling party. She contends that the examination determining whether the party on whose shoulders lies the
of respondent as adverse witness did not make him her witness burden of proof was able to meet the quantum of evidence needed
and she is not bound by his testimony, particularly during cross- to discharge the burden. In civil cases, that burden devolves upon
examination by his own counsel.29 In particular, the petitioner the plaintiff who must establish her case by preponderance of
avers that the following testimony of the respondent as adverse evidence. The rule is that the plaintiff must rely on the strength of
witness should not be considered as her evidence: his own evidence and not upon the weakness of the defendant’s
evidence. Thus, it barely matters who with a piece of evidence is
(11.a) That RESPONDENT-Appellee became owner of the credited. In the end, the court will have to consider the entirety of
"HAGONOY LUMBER" business when he bought the same from the evidence presented by both parties. Preponderance of
Chua Sioc Huan through a Deed of Sale dated August 1, 1990 evidence is then determined by considering all the facts and
(EXH.H); circumstances of the case, culled from the evidence, regardless of
who actually presented it.31
(11.b) That the "HAGONOY LUMBER," on the other hand, was
acquired by the sister Chua Sioc Huan, by virtue of Extrajudicial That the witness is the adverse party does not necessarily mean
Partition and Renunciation of Hereditary Rights in favor of a Co- that the calling party will not be bound by the former’s testimony.
Heir (EXH. I); The fact remains that it was at his instance that his adversary
was put on the witness stand. Unlike an ordinary witness, the
(11.c) That the 3 lots on which the "HAGONOY LUMBER" calling party may impeach an adverse witness in all respects as if
business is located were acquired by Lu Pieng from the Santos he had been called by the adverse party,32 except by evidence of
family under the Deed of Absolute Sale (EXH. J); that Lu Pieng his bad character.33 Under a rule permitting the impeachment of
sold the Lots to Chua Suy Lu in 1976 (EXHS. K, L, & M.); that an adverse witness, although the calling party does not vouch for
Chua Siok Huan eventually became owner of the 3 Lots; and in the witness’ veracity, he is nonetheless bound by his testimony if
1989 Chua Sioc Huan sold them to RESPONDENT-Appellee it is not contradicted or remains unrebutted.34
(EXHS. Q and P); that after he acquired the 3 Lots, he has not
sold them to anyone and he is the owner of the lots.30 A party who calls his adversary as a witness is, therefore, not
bound by the latter’s testimony only in the sense that he may
We do not agree that petitioner’s case was prejudiced by the contradict him by introducing other evidence to prove a state of
RTC’s treatment of the respondent’s testimony during cross- facts contrary to what the witness testifies on.35 A rule that
examination as her evidence. provides that the party calling an adverse witness shall not be

10
CASES ON EVIDENCE

bound by his testimony does not mean that such testimony may into consideration evidence which it found to be more credible
not be given its proper weight, but merely that the calling party than the self-serving and uncorroborated testimony of the
shall not be precluded from rebutting his testimony or from petitioner.
impeaching him.36 This, the petitioner failed to do.
At this juncture, we reiterate the well-entrenched doctrine that
In the present case, the petitioner, by her own testimony, failed to the findings of fact of the CA affirming those of the trial court are
discredit the respondent’s testimony on how Hagonoy Lumber accorded great respect, even finality, by this Court. Only errors of
became his sole property. The petitioner admitted having signed law, not of fact, may be reviewed by this Court in petitions for
the Deed of Partition but she insisted that the transfer of the review on certiorari under Rule 45.39 A departure from the
property to Chua Siok Huan was only temporary. On cross- general rule may be warranted where the findings of fact of the
examination, she confessed that no other document was executed CA are contrary to the findings and conclusions of the trial court,
to indicate that the transfer of the business to Chua Siok Huan or when the same is unsupported by the evidence on record.40
was a temporary arrangement. She declared that, after their There is no reason to apply the exception in the instant case
mother died in 1993, she did not initiate any action concerning because the findings and conclusions of the CA are in full accord
Hagonoy Lumber, and it was only in her counterclaim in the with those of the trial court. These findings are buttressed by the
instant that, for the first time, she raised a claim over the evidence on record. Moreover, the issues and errors alleged in this
business. petition are substantially the very same questions of fact raised
by petitioner in the appellate court.
Due process requires that in reaching a decision, a tribunal must
consider the entire evidence presented.37 All the parties to the On the issue of whether the P200,000.00 was really a loan, it is
case, therefore, are considered bound by the favorable or well to remember that a check may be evidence of
unfavorable effects resulting from the evidence.38 As already indebtedness.41 A check, the entries of which are in writing,
mentioned, in arriving at a decision, the entirety of the evidence could prove a loan transaction.42 It is pure naiveté to insist that
presented will be considered, regardless of the party who offered an entrepreneur who has several sources of income and has
them in evidence. In this light, the more vital consideration is not access to considerable bank credit, no longer has any reason to
whether a piece of evidence was properly attributed to one party, borrow any amount.
but whether it was accorded the apposite probative weight by the
court. The testimony of an adverse witness is evidence in the case The petitioner’s allegation that the P200,000.00 was advance on
and should be given its proper weight, and such evidence her share in the profits of Hagonoy Lumber is implausible. It is
becomes weightier if the other party fails to impeach the witness true that Hagonoy Lumber was originally owned by the parents of
or contradict his testimony. petitioner and respondent. However, on December 8, 1986, the
heirs freely renounced and waived in favor of their sister Chua
Significantly, the RTC’s finding that the P200,000.00 was given to Sioc Huan all their hereditary shares and interest therein, as
the petitioner and her husband as a loan is supported by the shown by the Deed of Partition which the petitioner herself
evidence on record. Hence, we do not agree with the petitioner’s signed. By virtue of this deed, Chua Sioc Huan became the sole
contention that the RTC has overlooked certain facts of great owner and proprietor of Hagonoy Lumber. Thus, when the
weight and value in arriving at its decision. The RTC merely took respondent delivered the check for P200,000.00 to the petitioner

11
CASES ON EVIDENCE

on June 7, 1988, Chua Sioc Huan was already the sole owner of The "best evidence rule" as encapsulated in Rule 130, Section
Hagonoy Lumber. At that time, both petitioner and respondent no 3,47 of the Revised Rules of Civil Procedure applies only when the
longer had any interest in the business enterprise; neither had a content of such document is the subject of the inquiry. Where the
right to demand a share in the profits of the business. issue is only as to whether such document was actually executed,
Respondent became the sole owner of Hagonoy Lumber only after or exists, or on the circumstances relevant to or surrounding its
Chua Sioc Huan sold it to him on August 1, 1990. So, when the execution, the best evidence rule does not apply and testimonial
respondent delivered to the petitioner the P200,000.00 check on evidence is admissible. Any other substitutionary evidence is
June 7, 1988, it could not have been given as an advance on likewise admissible without need to account for the original.48
petitioner’s share in the business, because at that moment in Moreover, production of the original may be dispensed with, in
time both of them had no participation, interest or share in the trial court’s discretion, whenever the opponent does not bona
Hagonoy Lumber. Even assuming, arguendo, that the check was fide dispute the contents of the document and no other useful
an advance on the petitioner’s share in the profits of the purpose will be served by requiring production.49
business, it was highly unlikely that the respondent would deliver
a check drawn against his personal, and not against the business Accordingly, we find that the best evidence rule is not applicable
enterprise’s account. to the instant case. Here, there was no dispute as to the terms of
either deed; hence, the RTC correctly admitted in evidence mere
It is also worthy to note that both the Deed of Partition and the copies of the two deeds. The petitioner never even denied their
Deed of Sale were acknowledged before a Notary Public. The due execution and admitted that she signed the Deed of
notarization of a private document converts it into a public Partition.50 As for the Deed of Sale, petitioner had, in effect,
document, and makes it admissible in court without further proof admitted its genuineness and due execution when she failed to
of its authenticity.43 It is entitled to full faith and credit upon its specifically deny it in the manner required by the rules.51 The
face.44 A notarized document carries evidentiary weight as to its petitioner merely claimed that said documents do not express the
due execution, and documents acknowledged before a notary true agreement and intention of the parties since they were only
public have in their favor the presumption of regularity. Such a provisional paper arrangements made upon the advice of
document must be given full force and effect absent a strong, counsel.52 Apparently, the petitioner does not contest the
complete and conclusive proof of its falsity or nullity on account contents of these deeds but alleges that there was a
of some flaws or defects recognized by law.45 A public document contemporaneous agreement that the transfer of Hagonoy Lumber
executed and attested through the intervention of a notary public to Chua Sioc Huan was only temporary.
is, generally, evidence of the facts therein express in clear
unequivocal manner.46 An agreement or the contract between the parties is the formal
expression of the parties’ rights, duties and obligations. It is the
Petitioner, however, maintains that the RTC erred in admitting in best evidence of the intention of the parties.53 The parties’
evidence a mere copy of the Deed of Partition and the Deed of Sale intention is to be deciphered from the language used in the
in violation of the best evidence rule. In addition, petitioner contract, not from the unilateral post facto assertions of one of
insists that the Deed of Sale was not the result of bona fide the parties, or of third parties who are strangers to the
negotiations between a true seller and buyer. contract.54 Thus, when the terms of an agreement have been
reduced to writing, it is deemed to contain all the terms agreed

12
CASES ON EVIDENCE

upon and there can be, between the parties and their successors the same time as the original is known as a duplicate original and
in interest, no evidence of such terms other than the contents of maybe introduced in evidence without accounting for the non-
the written agreement.55 production of the original.—In any case, going to the matter of
authenticity and due execution of the assailed document,
WHEREFORE, premises considered, the petition is DENIED. The petitioners do not dispute that the copy of the deed of sale that
Decision of the Court of Appeals in CA-G.R. CV No. 66790 dated respondents submitted as part of their evidence is a duplicate of
May 23, 2003 and Resolution dated December 2, 2003 are the original deed of sale dated June 20, 1958. It is settled that a
AFFIRMED. signed carbon copy or duplicate of a document executed at the
same time as the original is known as a duplicate original and
SO ORDERED. maybe introduced in evidence without accounting for the non-
production of the original. Moreover, Section 4(b), Rule 130 of the
Rules of Court provides that “[w]hen a document is in two or more
copies executed at or about the same time, with identical
contents, all such copies are equally regarded as originals.”

Same; Same; Same; Notarized Documents; Public Documents;

The notarization of a private document converts it into a public
document.—Evidence of the authenticity and due execution of the
subject deed is the fact that it was notarized. The notarization of a
19. Skunac Corporation v. Sylianteng private document converts it into a public document. Moreover, a
notarized instrument is admissible in evidence without further
Remedial Law; Evidence; Best Evidence Rule; The best evidence proof of its due execution, is conclusive as to the truthfulness of
rule applies only when the content of such document is the its contents, and has in its favor the presumption of regularity.
subject of the inquiry.—The best evidence rule is inapplicable to This presumption is affirmed if it is beyond dispute that the
the present case. The said rule applies only when the content of notarization was regular. To assail the authenticity and due
such document is the subject of the inquiry. Where the issue is execution of a notarized document, the evidence must be clear,
only as to whether such document was actually executed, or convincing and more than merely preponderant.
exists, or on the circumstances relevant to or surrounding its
execution, the best evidence rule does not apply and testimonial PERALTA, J.:
evidence is admissible. Any other substitutionary evidence is
likewise admissible without need to account for the original. In This treats of the petition for review on certiorari assailing the
the instant case, what is being questioned is the authenticity and Decision1 and Resolution2 of the Court of Appeals (CA), dated
due execution of the subject deed of sale. There is no real issue as August 10, 2012 and February 18, 2013, respectively, in CA-G.R.
to its contents. CV No. 92022.

Same; Same; Documentary Evidence; Carbon Copy; It is settled The factual and procedural antecedents of the case, as narrated
that a signed carbon copy or duplicate of a document executed at by the CA, are as follows:

13
CASES ON EVIDENCE

titles. [Respondents] further assert that [petitioners] could not be

The civil cases before the [Regional Trial Court of Pasig City) considered as innocent purchasers in good faith and for value
involved two (2) parcels of land identified as Lot 1, with an area of because they had prior notice of the previous transactions as
1,250 square meters (Civil Case No. 63987) and Lot 2, with an stated in the memorandum of encumbrances annotated on the
area of 990 square meters (Civil Case No. 63988), both found in titles covering the subject lots. [Petitioners], for their part,
Block 2 of the Pujalte Subdivision situated along Wilson Street, maintain that [respondents] acquired the lots under questionable
Greenhills, San Juan City which are portions of a parcel of land circumstances it appearing that there was no copy of the Deed of
previously registered in the name of Luis A. Pujalte on October Sale, between Emerenciana and Luis Pujalte, on file with the
29, 1945 and covered by Transfer Certificate of Title ("TCT") No. (- Office of the Register of Deeds.3
78865) (-2668) -93165 ("Mother Title") of the Register of Deeds for
the City of Manila. On November 16, 2007, the Regional Trial Court of Pasig (RTC)
rendered judgment in favor of herein petitioners. The dispositive
Plaintiffs-appellants Roberto S. Sylianteng and Caesar S. portion of the RTC Decision reads as follows:
Sylianteng ("appellants") base their claim of ownership over the
subject lots a Deed of Absolute Sale executed in their favor by WHEREFORE, premises considered, judgment is hereby rendered
their mother, Emerenciana Sylianteng ("Emerenciana"), on June in favor of the defendants and against the plaintiffs:
27, 1983. Appellants further allege that Emerenciana acquired
the lots from the late Luis Pujalte [Luis] through a Deed of Sale 1. Declaring as null and void TCT No. 42369 in the name of
dated June 20, 1958 as reflected in Entry No. P.E. 4023, Emerciana (sic) Sylianteng and TCT No. 39488 in the name of
annotated on the covering TCT, by virtue of which she was issued plaintiffs herein and ordering the cancellation thereof;
TCT No. 42369. Then, when she sold the lots to appellants, TCT
No. 39488, covering the same, was issued in their names. 2. Declaring the herein defendants as buyers in good faith and for
value; and
[Herein petitioners] Skunac Corporation ("Skunac") and Alfonso F.
Enriquez ("Enriquez"), on the other hand, claim that a certain 3. Declaring TCT No. 5888-R in the name of SKUNAC Corporation
Romeo Pujalte who was declared by the RTC of Pasig City, Branch and TCT No. 5889-R in the name of Alfonso Enriquez as valid.
151 in Special Proceedings No. 3366 as the sole heir of Luis
Pujalte, caused the reconstitution of the Mother Title resulting to The complaint-in-intervention is ordered dismissed.
its cancellation and the issuance of TCT No. 5760-R in his favor.
Romeo Pujalte then allegedly sold the lots to Skunac and With costs against the plaintiffs.
Enriquez in 1992. Thus, from TCT No. 5760-R, TCT No. 5888-R,
for Lot 1 was issued in the name of Skunac, while TCT No. 5889- SO ORDERED.4
R for Lot 2 was issued in the name of Enriquez.
Herein respondents then filed an appeal with the CA.
[Respondents] contend that they have a better right to the lots in
question because the transactions conveying the same to them On August 10, 2012, the CA promulgated its assailed Decision,
preceded those claimed by [petitioners] as source of the latter's disposing as follows:

14
CASES ON EVIDENCE

Petitioners filed a Motion for Reconsideration, but the CA denied

WHEREFORE, in light of all the foregoing, the appeal is it in its Resolution dated February 18, 2013.
GRANTED. The decision dated November 16, 2007 of Branch 160,
Regional Trial Court of Pasig City in Civil Case No. 63987 is Hence, the instant petition with the following assignment of
hereby REVERSED and SET ASIDE. errors:

Judgment is hereby rendered in favor of plaintiffs-appellants I. THE HONORABLE COURT OF APPEALS ERRED IN APPLYING
Roberto S. Sylianteng and Caesar S. Sylianteng and against IN THE CASE THE PROVISION OF THE CIVIL CODE ON DOUBLE
defendants-appellees Skunac Corporation and Alfonso F. SALE OF A REGISTERED LAND.
Enriquez, and intervenor-appellee Romeo N. Pujalte:
II. THE HONORABLE COURT OF APPEALS ERRED IN NOT
1. Declaring as null and void Transfer Certificate of Title No. FINDING THAT RESPONDENTS FAILED TO PROVE THE
5760-R in the name of Romeo N. Pujalte, Transfer Certificate of EXISTENCE OF SALE BETWEEN LUIS PUJALTE AND THEIR
Title No. 5888-R in the name of Skunac Corporation, and PREDECESSOR-IN-INTEREST, EMERENCIANA SYLIANTENG.
Transfer Certificate of Title No. 5889-R in the name of Alfonso F.
Enriquez; III. THE HONORABLE COURT OF APPEALS ERRED IN NOT
DECLARING NULL AND VOID TCT NO. 42369 PURPORTED TO
2. Upholding the validity of Transfer Certificate of Title No. 42369 HAVE BEEN ISSUED TO EMERENCIANA SYLIANTENG BY THE
in the name of Emerenciana Sylianteng, and Transfer Certificate REGISTER OF DEEDS OF QUEZON CITY.
of Title No. 39488 in the names of Roberto S. Sylianteng and
Caesar S. Sylianteng; and IV. THE HONORABLE COURT OF APPEALS ERRED IN NOT
FINDING THAT PETITIONERS ARE THE LAWFUL OWNERS OF
3. Ordering defendants-appellees Skunac Corporation and THE SUBJECT LOTS SINCE THEY HAVE VALIDLY ACQUIRED
Alfonso F. Enriquez, and intervenor-appellee Romeo N. Pujalte, THE SAME FROM ROMEO PUJALTE, THE SOLE HEIR OF LUIS
jointly and severally, to pay plaintiffs-appellants Roberto S. PUJALTE.
Sylianteng and Caesar S. Sylianteng:
V. THE HONORABLE COURT OF APPEALS ERRED IN
a. Moral damages in the amount of ₱500,000.00, AWARDING MORAL AND EXEMPLARY DAMAGES AS WELL AS
ATTORNEY'S FEES AND COST OF SUIT TO RESPONDENTS
b. Exemplary damages in the amount of ₱500,000.00, CONSIDERING THAT PETITIONERS WERE NOT IN BAD FAITH IN
PURCHASING THE SUBJECT LOTS.6
c. Attorney's fees in the amount of ₱250,000.00, and
The petition lacks merit.
d. The costs of suit.
At the outset, the Court observes that the main issues raised in
SO ORDERED.5 the instant petition are essentially questions of fact. It is settled
that, as a rule, in petitions for review on certiorari under Rule 45

15
CASES ON EVIDENCE

of the Rules of Court, only questions of law may be put in issue.7 In the instant case, the findings of the CA and the RTC are
Questions of fact cannot be entertained. There are, however, conflicting. It, thus, behooves this Court to entertain the
recognized exceptions to this rule, to wit: questions of fact raised by petitioners and review the records of
this case to resolve these conflicting findings. Thus, this Court
(a) When the findings are grounded entirely on speculation, held in the case of Manongsong v. Estimo9 that:
surmises, or conjectures;
We review the factual and legal issues of this case in light of the
(b) When the inference made is manifestly mistaken, absurd, or general rules of evidence and the burden of proof in civil cases, as
impossible; explained by this Court in Jison v. Court of Appeals:

(c) When there is grave abuse of discretion; x x x Simply put, he who alleges the affirmative of the issue has
the burden of proof, and upon the plaintiff in a civil case, the
(d) When the judgment is based on a misapprehension of facts; burden of proof never parts. However, in the course of trial in a
civil case, once plaintiff makes out a prima facie case in his favor,
(e) When the findings of facts are conflicting; the duty or the burden of evidence shifts to defendant to
controvert plaintiff's prima facie case, otherwise, a verdict must
(f) When in making its findings the CA went beyond the issues of be returned in favor of plaintiff. Moreover, in civil cases, the party
the case, or its findings are contrary to the admissions of both the having the burden of proof must produce a preponderance of
appellant and the appellee; evidence thereon, with plaintiff having to rely on the strength of
his own evidence and not upon the weakness of the defendant’s.
(g) When the CA’s findings are contrary to those by the trial court; The concept of "preponderance of evidence" refers to evidence
which is of greater weight, or more convincing, that which is
(h) When the findings are conclusions without citation of specific offered in opposition to it; at bottom, it means probability of
evidence on which they are based; truth.10

(i) When the facts set forth in the petition as well as in the Coming to the merits of the case, the abovementioned assignment
petitioner’s main and reply briefs are not disputed by the of errors boils down to two basic questions: (1) whether or not
respondent; respondents' predecessor-in-interest, Emerenciana, validly
acquired the subject lots from Luis, and (2) whether or not
(j) When the findings of fact are premised on the supposed respondents, in turn, validly acquired the same lots from
absence of evidence and contradicted by the evidence on record; Emerenciana.
or
The Court rules in the affirmative, but takes exception to the CA's
(k) When the CA manifestly overlooked certain relevant facts not and RTC's application of Article 1544 of the Civil Code.
disputed by the parties, which, if properly considered, would
justify a different conclusion.8

16
CASES ON EVIDENCE

Reliance by the trial and appellate courts on Article 1544 of the The best evidence rule is inapplicable to the present case. The
Civil Code is misplaced. The requisites that must concur for said rule applies only when the content of such document is the
Article 1544 to apply are: subject of the inquiry.15 Where the issue is only as to whether
such document was actually executed, or exists, or on the
(a) The two (or more sales) transactions must constitute valid circumstances relevant to or surrounding its execution, the best
sales; evidence rule does not apply and testimonial evidence is
admissible.16 Any other substitutionary evidence is likewise
(b) The two (or more) sales transactions must pertain to exactly admissible without need to account for the original.17 In the
the same subject matter; instant case, what is being questioned is the authenticity and due
execution of the subject deed of sale. There is no real issue as to
(c) The two (or more) buyers at odds over the rightful ownership of its contents.
the subject matter must each represent conflicting interests; and
In any case, going to the matter of authenticity and due execution
(d) The two (or more) buyers at odds over the rightful ownership of of the assailed document, petitioners do not dispute that the copy
the subject matter must each have bought from the very same of the deed of sale that respondents submitted as part of their
seller.11 evidence is a duplicate of the original deed of sale dated June 20,
1958. It is settled that a signed carbon copy or duplicate of a
Obviously, said provision has no application in cases where the document executed at the same time as the original is known as a
sales involved were initiated not by just one but two vendors.12 duplicate original and maybe introduced in evidence without
In the present case, the subject lots were sold to petitioners and accounting for the non-production of the original.18
respondents by two different vendors – Emerenciana and Romeo
Pujalte (Romeo). Hence, Article 1544 of the Civil Code is not Moreover, Section 4 (b), Rule 130 of the Rules of Court provides
applicable. that "[w]hen a document is in two or more copies executed at or
about the same time, with identical contents, all such copies are
Nonetheless, the Court agrees with the findings and conclusion of equally regarded as originals."
the CA that Emerenciana's acquisition of the subject lots from
Luis and her subsequent sale of the same to respondents are In addition, evidence of the authenticity and due execution of the
valid and lawful. Petitioners dispute such finding. To prove their subject deed is the fact that it was notarized. The notarization of a
contention, they assail the authenticity and due execution of the private document converts it into a public document.19 Moreover,
deed of sale between Luis and Emerenciana. a notarized instrument is admissible in evidence without further
proof of its due execution, is conclusive as to the truthfulness of
Petitioners contend that respondents' presentation of the its contents, and has in its favor the presumption of regularity.20
"duplicate/carbon" original of the Deed of Sale13 dated June 20, This presumption is affirmed if it is beyond dispute that the
1958 is in violation of the best evidence rule under Section 3, notarization was regular.21 To assail the authenticity and due
Rule 130 of the Rules of Court.14 The Court does not agree. execution of a notarized document, the evidence must be clear,
convincing and more than merely preponderant.22

17
CASES ON EVIDENCE

In the present case, petitioners failed to present convincing only one copy of the June 20, 1958 deed of sale was prepared and
evidence to prove that the notarization of the subject deed was notarized, because only one document number appears on the
irregular as to strip it of its public character. On the contrary, a notarial book of the notary public who notarized the said deed.
certified copy of page 26 of the notarial register of the notary On the contrary, evidence shows that at least two copies of the
public who notarized the subject deed of sale, which was issued subject deed of sale was prepared and notarized – one was
by the Records Management and Archives Office of Manila, shows submitted for registration with the Register of Deeds of Quezon
that the sale of the subject lots by Luis to Emerenciana was City and the other was retained by Emerenciana, which is the
indeed regularly notarized.23 copy presented in evidence by respondents.

Petitioners further argue that the deed of sale between As to petitioners' contention that the copy of the deed of sale
Emerenciana and Luis was not registered with the Register of presented by respondents in evidence is of dubious origin
Deeds of Quezon City. The Court, however, agrees with the CA because it does not bear the stamp "RECEIVED" by the Register
that the said deed was, in fact, registered as evidenced by official of Deeds of Quezon City, suffice it to state that the Court finds no
receipts24 issued to this effect. Petitioners, again, did not present cogent reason to disagree with respondents' contention that the
any evidence to assail the authenticity of these documents. duplicate original of the subject deed of sale which they presented
as evidence in court could not have been received by the Register
Petitioners also question the authenticity of the subject deed of of Deeds of Quezon City because only the original copy, and not
sale (Exhibit "B-1-C") by arguing that only one copy of such deed the duplicate original, was submitted to the Register of Deeds for
was prepared as only one document number was assigned by the registration.
notary to the said deed. Petitioners claim that this is contrary to
the claim of respondents that the said deed of sale was prepared, Petitioners also question the authenticity of and the entries
executed and notarized in several copies. The Court is not appearing on the copy of the title covering the subject properties
persuaded. in the name of Luis. However, the Court finds no cogent reason to
doubt the authenticity of the document as well as the entries
It is true that Section 246, Article V, Title IV, Chapter II of the appearing therein, considering that the parties (herein petitioners
Revised Administrative Code provides that "[t]he notary shall give and respondents) stipulated25 that the machine copy of TCT No.
to each instrument executed, sworn to, or acknowledged before 78865 in the name of Luis, marked as Exhibit "DDD" for
him a number corresponding to the one in his register, and shall respondents, is a faithful reproduction of the original copy of the
also state on the instrument the page or pages of his register on said title, including the memorandum of encumbrances
which the same is recorded." In this regard, the Court agrees with annotated therein. Included in the memorandum of
respondents' contention that the "instrument" being referred to in encumbrances is Entry No. P.E. 4023, which states, thus:
the abovequoted provision is the deed or contract which is
notarized. It does not pertain to the number of copies of such This certificate of title is hereby cancelled (sic) partially with
deed or contract. Hence, one number is assigned to a deed or respect to Lots 1 and 2, Blk. 2 by virtue of a Deed of Sale ratified
contract regardless of the number of copies prepared and on June 20, 1958 before Armenio P. Engracia of Notary for the
notarized. Each and every copy of such contract is given the same City of Manila and Transfer Certificate of Title No. 42369 is issued
document number. It is, thus, wrong for petitioners to argue that

18
CASES ON EVIDENCE

in the name of Vendee, Emerenciana A.S. de Sylianteng, filing the In fact, as early as July 14, 1960, prior to Romeo's appointment
aforesaid Deed under T-No. 42369.26 as administrator of the estate of Luis, Paz L. Vda. de Pujalte (Paz),
the mother of Luis, who was then appointed administratrix of the
The same entry appears in Exhibit "11" for petitioners.27 estate of the latter, in her Inventory and Appraisal29 which was
submitted to the estate court, already excluded the subject
P.E. No. 4023 has been entered on TCT No. 78865 by the then properties among those which comprise the estate of Luis.
Acting Register of Deeds of San Juan.1âwphi1 Petitioners assail Subsequently, in the Project of Partition30 of the residual estate
the regularity of such entry. However, one of the disputable of Luis, dated March 22, 1963, Paz again did not include the
presumptions provided under Section 3 (m), Rule 131 of the Rules disputed lots as part of such residual estate. Hence, Romeo's sale
of Court is that official duty has been regularly performed. Under of the subject lots to petitioners is invalid as it is settled that any
the said Rule, this presumption shall be considered satisfactory unauthorized disposition of property under administration is null
unless contradicted and overcome by other evidence. In the and void and title does not pass to the purchasers.31
present case, petitioners failed to present sufficient evidence to
contradict the presumption of regularity in the performance of the Second, even granting that the subject lots formed part of the
duties of then Acting Register of Deeds of San Juan. estate of Luis, it was subsequently proven in a separate case that
Romeo is not his heir. In a criminal case for use of falsified
Petitioners, nonetheless, insist that they have valid title over the documents filed against Romeo, it was proven that his claim of
subject properties. They trace their respective titles from that of heirship is spurious. In the said criminal case, his birth certificate
Romeo. Romeo, in turn, derives his supposed ownership of and and the marriage certificate of his supposed parents, which he
title over the subject lots from his claim that he is the sole heir of presented before the estate court, to prove his claim that he is the
the estate of his alleged predecessor-in-interest, Luis. Evidence, sole heir of Luis, were found by the criminal court to be
however, shows that Romeo never became the owner of the falsified.32 In this regard, it bears to note the disquisition of the
subject properties for two reasons. CA as to the legitimacy of Romeo's claim, and its subsequent
effect on petitioners' rights to the disputed properties, to wit:
First, as shown above, the disputed lots were already sold by Luis
during his lifetime. Thus, these parcels of land no longer formed Appellees' [herein petitioners'] predicament is further
part of his estate when he died. As a consequence, Romeo's sale compounded by Romeo Pujalte's conviction on November 18,
of the disputed lots to petitioners was not affirmed by the estate 2005 of the offense of Use of Falsified Documents, for falsifying
court, because the subject parcels of land were not among those the documents that enabled him to deceive the estate court and
included in the said estate at the time that Romeo was appointed have himself named as Luis Pujalte's sole heir. He did not appeal
as the administrator thereof. As shown in its October 11, 1993 his conviction and, instead, applied for probation. It goes without
Order,28 the RTC of Pasig, acting as an estate court, denied saying that the documents purportedly conveying the lots in
Romeo's motion for approval of the sale of the subject lots, question to appellees and which are founded on Romeo Pujalte's
because these properties were already sold to respondents per alleged rights over the estate of the late Luis Pujalte do not
report submitted by the Register of Deeds of San Juan. deserve any consideration at all. x x x33

19
CASES ON EVIDENCE

Indeed, not being an heir of Luis, Romeo never acquired any right annotated on the title.38 In the instant case, The Torrens
whatsoever over the subject lots, even if he was able to Certificate of Title (TCT No. 5760-R) in the name of Romeo, which
subsequently obtain a title in his name. It is a well-settled was the title relied upon by petitioners, also contained Entry No.
principle that no one can give what one does not have, nemo dat P.E. 4023, quoted above, which essentially informs petitioners
quod non habet.34 One can sell only what one owns or is that the lots which they were about to buy and which they in fact
authorized to sell, and the buyer can acquire no more right than bought, were already sold to Emerenciana.39 This entry should
what the seller can transfer legally.35 Since Romeo has no right have alerted petitioners and should have prodded them to
to the subject lots, petitioners, who simply stepped into the shoes conduct further investigation. Simple prudence would have
of Romeo, in turn, acquired no rights to the same. impelled them as honest persons to make deeper inquiries to
clear the suspiciousness haunting Romeo's title. On the contrary,
In addition, and as correctly pointed out by the CA, petitioners' rather than taking caution in dealing with Romeo, petitioners,
position is neither helped by the fact that, in the present case, instead, subsequently executed deeds of sale40 over the same
Romeo filed a Verified Complaint-in-Intervention36 with the RTC, properties but all of which were, nonetheless, disallowed by the
denying that he sold the subject lots to petitioners and claiming estate court in its Order41 dated October 11, 1993 on the ground
that the same properties still form part of the estate of Luis. that the said lots were already sold, this time, by Emerenciana to
respondents. In this regard, petitioners acted in bad faith.
Stretching petitioners' contention a bit further, granting that both
petitioners and respondents bought the disputed lots in good Thus, as correctly held by the CA, respondents are entitled to
faith by simply relying on the certificates of the sellers, and moral damages. Moral damages are treated as compensation to
subsequently, acquiring titles in their own names, respondents' alleviate physical suffering, mental anguish, fright, serious
title shall still prevail. It is a settled rule that when two certificates anxiety, besmirched reputation, wounded feelings, moral shock,
of title are issued to different persons covering the same land in social humiliation, and similar injury resulting from a wrong.42
whole or in part, the earlier in date must prevail, and, in case of In the instant case, respondents satisfactorily established their
successive registrations where more than one certificate is issued claim for moral damages. They endured suffering brought about
over the land, the person holding a prior certificate is entitled to by Romeo's bad faith in using falsified documents to enable
the land as against a person who relies on a subsequent himself to acquire title to and sell the subject lots to petitioners to
certificate.37 The titles of respondents, having emanated from an the prejudice of respondents. Respondents also suffered by
older title, should thus be upheld. reason of petitioners' stubborn insistence in buying the said
properties despite their knowledge of the defect in the title of
Anent petitioners' bad faith, this Court finds no persuasive reason Romeo.43 Though moral damages are not capable of pecuniary
to depart from the findings of the CA that petitioners had prior estimation, the amount should be proportional to and in
knowledge of the estate proceedings involving the subject lots and approximation of the suffering inflicted.44 Respondents sought
that they have notice of the defect in the title of Romeo. the award of ₱1,000,000.00 as moral damages from each of the
petitioners, but the Court agrees with the CA that the total
It is true that a person dealing with registered land need not go amount of ₱500,000.00 is sufficient for both respondents.
beyond the title. However, it is equally true that such person is
charged with notice of the burdens and claims which are

20
CASES ON EVIDENCE

As to exemplary damages, these are imposed by way of example that the nature of the case will admit. The rule is, that if the
or correction for the public good, in addition to moral, temperate, writings have subscribing witnesses to them, they must be proved
liquidated or compensatory damages.45 They are imposed not to by those witnesses.  The first ground judges have gone upon in
enrich one party or impoverish another, but to serve as a departing from strict rules, is an absolute strict necessity.
deterrent against or as a negative incentive to curb socially Secondly, a presumed necessity. In the case of writings,
deleterious actions.46 While respondents were again seeking the subscribed by witnesses, if all are dead, the proof of one of their
amount of ₱1,000,000.00 as exemplary damages from each of the hands is sufficient to establish the deed: where an original is lost,
petitioners, the CA correctly reduced it to a total of ₱500,000.00. a copy may be admitted; if no copy, then a proof by witnesses who
have heard the deed, and yet it is a thing the law abhors to admit
Respondents are also entitled to attorney's fees, as awarded by the memory of man for evidence. Petitioner did not even attempt
the CA, on the strength of the provisions of Article 2208 of the to provide a plausible reason why the originals were not
Civil Code which provides, among others, that such fees may be presented, or any compelling ground why the court should admit
recovered when exemplary damages are awarded, when the these documents as secondary evidence absent the testimony of
defendant's act or omission has compelled the plaintiff to litigate the witnesses who had executed them. In particular, it may not
with third persons, or in any other case where the court deems it insist that the photocopies of the documents fall under Sec. 7 of
just and equitable that attorney's fees and expenses of litigation Rule 130, which states: Evidence admissible when original
should be recovered. document is a public record.—When the original of a document is
in the custody of a public officer or is recorded in a public office,
WHEREFORE, the petition is DENIED. The Decision and its contents may be proved be a certified copy issued by the
Resolution of the Court of Appeals, dated August 10, 2012 and public officer in custody thereof.
February 18, 2013, respectively, in CA-G.R. CV No. 92022, are
AFFIRMED. Same; Same; Same; Hearsay Evidence Rule; While affidavits may
be considered as public documents if they are acknowledged
SO ORDERED. before a notary public, these Affidavits are still classified as
20. Republic v. Marcos-Manotoc hearsay evidence.—Basic is the rule that, while affidavits may be
considered as public documents if they are acknowledged before a
Remedial Law; Evidence; Best Evidence Rule; The photocopied notary public, these Affidavits are still classified as hearsay
documents are in violation Rule 130, Sec. 3 of the Rules of Court, evidence. The reason for this rule is that they are not generally
otherwise known as the best evidence rule, which mandates that prepared by the affiant, but by another one who uses his or her
the evidence must be the original document itself.—The own language in writing the affiant’s statements, parts of which
photocopied documents are in violation Rule 130, Sec. 3 of the may thus be either omitted or misunderstood by the one writing
Rules of Court, otherwise known as the best evidence rule, which them. Moreover, the adverse party is deprived of the opportunity
mandates that the evidence must be the original document itself. to cross-examine the affiants. For this reason, affidavits are
The origin of the best evidence rule can be found and traced to as generally rejected for being hearsay, unless the affiants
early as the 18th century in Omychund v. Barker, wherein the themselves are placed on the witness stand to testify thereon.
Court of Chancery said: The judges and sages of the law have laid
it down that there is but one general rule of evidence, the best SERENO, J.:

21
CASES ON EVIDENCE

(c) The adoption of safeguards to ensure that the above practices

Before this Court is a Petition for Review filed by the Republic of shall not be repeated in any manner under the new government,
the Philippines assailing the Resolutions1 issued by the and the institution of adequate measures to prevent the
Sandiganbayan in connection with an alleged portion of the occurrence of corruption.
Marcoses’ supposed ill-gotten wealth.
Sec. 3. The Commission shall have the power and authority:
This case involves ₱200 billion of the Marcoses’ alleged
accumulated ill-gotten wealth. It also includes the alleged use of (a) To conduct investigation as may be necessary in order to
the media networks IBC-13, BBC-2 and RPN-9 for the Marcos accomplish and carry out the purposes of this order.
family’s personal benefit; the alleged use of De Soleil Apparel for
dollar salting; and the alleged illegal acquisition and operation of (b) To sequester or place or cause to be placed under its control or
the bus company Pantranco North Express, Inc. (Pantranco). possession any building or office wherein any ill-gotten wealth or
properties may be found, and any records pertaining thereto, in
The Facts order to prevent their destruction, concealment or disappearance
which would frustrate or hamper the investigation or otherwise
After the EDSA People Power Revolution in 1986, the first prevent the Commission from accomplishing its task.
executive act of then President Corazon C. Aquino was to create
the Presidential Commission on Good Government (PCGG). (c) To provisionally take over in the public interest or to prevent
Pursuant to Executive Order No. 1, the PCGG was given the its disposal or dissipation, business enterprises and properties
following mandate: taken over by the government of the Marcos Administration or by
entities or persons close to former President Marcos, until the
Sec. 2. The Commission shall be charged with the task of transactions leading to such acquisition by the latter can be
assisting the President in regard to the following matters: disposed of by the appropriate authorities.

(a) The recovery of all ill-gotten wealth accumulated by former (d) To enjoin or restrain any actual or threatened commission of
President Ferdinand E. Marcos, his immediate family, relatives, facts by any person or entity that may render moot and academic,
subordinates and close associates, whether located in the or frustrate, or otherwise make ineffectual the efforts of the
Philippines or abroad, including the takeover or sequestration of Commission to carry out its tasks under this order.
all business enterprises and entities owned or controlled by them,
during his administration, directly or through nominees, by (e) To administer oaths, and issue subpoena requiring the
taking undue advantage of their public office and/or using their attendance and testimony of witnesses and/or the production of
powers, authority, influence, connections or relationship. such books, papers, contracts, records, statement of accounts
and other documents as may be material to the investigation
(b) The investigation of such cases of graft and corruption as the conducted by the Commission.
President may assign to the Commission from time to time.

22
CASES ON EVIDENCE

(f) To hold any person in direct or indirect contempt and impose The PCGG filed a fourth amended Complaint, which was later
the appropriate penalties, following the same procedures and denied by the Sandiganbayan in its Resolution dated 2 September
penalties provided in the Rules of Court. 1998.

(g) To seek and secure the assistance of any office, agency or The allegations contained in the Complaint specific to herein
instrumentality of the government. respondents are the following:3

(h) To promulgate such rules and regulations as may be 29. Defendants Imelda (IMEE) R. Marcos-Manotoc, Tomas
necessary to carry out the purpose of this order. Manotoc, Irene R. Manotoc (sic) Araneta, Gregorio Ma. Araneta III,
and Ferdinand R. Marcos, Jr., actively collaborated, with
Thus, numerous civil and criminal cases were subsequently filed. Defendants Ferdinand E. Marcos and Imelda R. Marcos among
One of the civil cases filed before the Sandiganbayan to recover others, in confiscating and/or unlawfully appropriating funds and
the Marcoses’ alleged ill-gotten wealth was Civil Case No. 0002, other property, and in concealing the same as described above. In
now subject of this Petition. addition, each of the said Defendants, either by taking undue
advantage of their relationship with Defendants Ferdinand E.
On 16 July 1987, the PCGG, acting on behalf of the Republic and Marcos and Imelda R. Marcos, or by reason of the above-
assisted by the Office of the Solicitor General (OSG), filed a described active collaboration, unlawfully acquired or received
Complaint for Reversion, Reconveyance, Restitution, Accounting property, shares of stocks in corporations, illegal payments such
and Damages against Ferdinand E. Marcos, who was later as commissions, bribes or kickbacks, and other forms of improper
substituted by his estate upon his death; Imelda R. Marcos; and privileges, income, revenues and benefits. Defendant Araneta in
herein respondents Imee Marcos-Manotoc, Irene Marcos-Araneta, particular made use of Asialand Development Corporation which
Bongbong Marcos, Tomas Manotoc, and Gregorio Araneta III. is included in Annex "A" hereof as corporate vehicle to benefit in
the manner stated above.
On 1 October 1987, the PCGG filed an amended Complaint to add
Constante Rubio as defendant. 31. Defendants Nemesio G. Co, Yeung Chun Kam, Yeung Chun
Ho and Yeung Chun Fan are the controlling stockholders of
Again on 9 February 1988, it amended the Complaint, this time to Glorious Sun Fashion Manufacturing Corporation (Phils.).
include as defendants Nemesio G. Co and herein respondents Through Glorious Sun (Phils.), they acted as fronts or dummies,
Yeung Chun Kam, Yeung Chun Ho, and Yeung Chun Fan. cronies or otherwise willing tools of spouses Ferdinand and
Imelda Marcos and/or the family, particularly of Defendant
For the third time, on 23 April 1990, the PCGG amended its Imelda (Imee) Marcos-Manotoc, in the illegal salting of foreign
Complaint, adding to its growing list of defendants Imelda exchange4 by importing denim fabrics from only one supplier – a
Cojuangco, the estate of Ramon Cojuangco, and Prime Holdings, Hong Kong based corporation which was also owned and
Inc.2 controlled by defendant Hong Kong investors, at prices much
higher than those being paid by other users of similar materials
to the grave and irreparable damage of Plaintiff.

23
CASES ON EVIDENCE

Thus, petitioner set forth the following causes of action in its 34. Third Cause of Action: UNJUST ENRICHMENT –
Complaint:5
Defendants illegally accumulated funds and other property whose
32. First Cause of Action: BREACH OF PUBLIC TRUST – A public estimated value is ₱ 200 billion in violation of the laws of the
office is a public trust.1avvphi1 By committing all the acts Philippines and in breach of their official functions and fiduciary
described above, Defendants repeatedly breached public trust obligations. Defendants, therefore, have unjustly enriched
and the law, making them liable solidarily to Plaintiff. The funds themselves to the grave and irreparable damage and prejudice of
and other property acquired by Defendants following, or as a Plaintiff. Defendants have an obligation at law, independently of
result of, their breach of public trust, some of which are breach of trust and abuse of right and power, and as an
mentioned or described above, estimated to amount to ₱ 200 alternative, to solidarily return to Plaintiff such funds and other
billion are deemed to have been acquired for the benefit of property with which Defendants, in gross evident bad faith, have
Plaintiff and are, therefore, impressed with constructive trust in unjustly enriched themselves or, in default thereof, restore to
favor of Plaintiff and the Filipino people. Consequently, Plaintiff the amount of such funds and the value of the other
Defendants are solidarily liable to restore or reconvey to Plaintiff property including those which may have been wasted, and/or
all such funds and property thus impressed with constructive lost estimated at ₱ 200 billion with interest thereon from the date
trust for the benefit of Plaintiff and the Filipino people. of unlawful acquisition until full payment thereof.

33. Second Cause of Action: ABUSE OF RIGHT AND POWER – 35. Fourth Cause of Action: ACCOUNTING –

(a) Defendants, in perpetrating the unlawful acts described above, The Commission, acting pursuant to the provisions of the
committed abuse of right and power which caused untold misery, applicable law, believe that Defendants, acting singly or
sufferings and damages to Plaintiff. Defendants violated, among collectively, in unlawful concert with one another, and with the
others Articles 19, 20, and 21 of the Civil Code of the Philippines; active collaboration of third persons, subject of separate suits,
acquired funds, assets and property during the incumbency of
(b) As a result of the foregoing acts, Defendants acquired the title Defendant public officers, manifestly out of proportion to their
to the beneficial interest in funds and other property and salaries, to their other lawful income and income from
concealed such title, funds and interest through the use of legitimately acquired property. Consequently, they are required to
relatives, business associates, nominees, agents, or dummies. show to the satisfaction of this Honorable Court that they have
Defendants are, therefore, solidarily liable to Plaintiff to return lawfully acquired all such funds, assets and property which are in
and reconvey all such funds and other property unlawfully excess of their legal net income, and for this Honorable Court to
acquired by them estimated at TWO HUNDRED BILLION PESOS, decree that the Defendants are under obligation to account to
or alternatively, to pay Plaintiff, solidarily, by way of indemnity, Plaintiff with respect to all legal or beneficial interests in funds,
the damage caused to Plaintiff equivalent to the amount of such properties and assets of whatever kind and wherever located in
funds or the value of other property not returned or restored to excess of the lawful earnings or lawful income from legitimately
Plaintiff, plus interest thereon from the date of unlawful acquired property.
acquisition until full payment thereof.
36. Fifth Cause of Action – LIABILITY FOR DAMAGES –

24
CASES ON EVIDENCE

(a) By reason of the unlawful acts set forth above, Plaintiff and the (e) By way of example and correction for the public good and in
Filipino people have suffered actual damages in an amount order to ensure that Defendants’ unlawful, malicious, immoral
representing the pecuniary loss sustained by the latter as a result and wanton acts are not repeated, said Defendants are solidarily
of the Defendants’ unlawful acts, the approximate value and liable to Plaintiff for exemplary damages.
interest of which, from the time of their wrongful acquisition, are
estimated at ₱ 200 billion plus expenses which Plaintiff has been In the meantime, the Pantranco Employees Association-PTGWO
compelled to incur and shall continue to incur in its effort to (PEA-PTGWO), a union of Pantranco employees, moved to
recover Defendants’ ill-gotten wealth all over the world, which intervene before the Sandiganbayan. The former alleged that the
expenses are reasonably estimated at ₱ 250 million. Defendants trust funds in the account of Pantranco North Express, Inc.
are, therefore, jointly and severally liable to Plaintiff for actual (Pantranco) amounting to ₱ 55 million rightfully belonged to the
damages in an amount reasonably estimated at ₱ 200 Billion Pantranco employees, pursuant to the money judgment the
Pesos and to reimburse expenses for recovery of Defendants’ ill- National Labor Relations Commission (NLRC) awarded in favor of
gotten wealth estimated to cost ₱ 250 million or in such amount the employees and against Pantranco. Thus, PEA-PTGWO
as are proven during the trial. contested the allegation of petitioner that the assets of Pantranco
were ill-gotten because, otherwise, these assets would be returned
(b) As a result of Defendants’ acts described above, Plaintiff and to the government and not to the employees.
the Filipino people had painfully endured and suffered moral
damages for more than twenty long years, anguish, fright, Thereafter, petitioner presented and formally offered its evidence
sleepless nights, serious anxiety, wounded feelings and moral against herein respondents. However, the latter objected to the
shock as well as besmirched reputation and social humiliation offer primarily on the ground that the documents violated the
before the international community. best evidence rule of the Rules of Court, as these documents were
unauthenticated; moreover, petitioner had not provided any
(c) In addition, Plaintiff and the Filipino people are entitled to reason for its failure to present the originals.
temperate damages for their sufferings which, by their very
nature are incapable of pecuniary estimation, but which this On 11 March 2002, the Sandiganbayan issued a Resolution6
Honorable Court may determine in the exercise of its sound admitting the pieces of evidence while expressing some
discretion. reservation, to wit:

(d) Defendants, by reason of the above described unlawful acts, WHEREFORE, taking note of the objections of accused Marcoses
have violated and invaded the inalienable right of Plaintiff and the and the reply thereto by the plaintiff, all the documentary exhibits
Filipino people to a fair and decent way of life befitting a Nation formally offered by the prosecution are hereby admitted in
with rich natural and human resources. This basic and evidence; however, their evidentiary value shall be left to the
fundamental right of Plaintiff and the Filipino people should be determination of the Court.
recognized and vindicated by awarding nominal damages in an
amount to be determined by the Honorable Court in the exercise SO ORDERED.
of its sound discretion.

25
CASES ON EVIDENCE

Imelda R. Marcos; Imee Marcos-Manotoc and Bongbong Marcos, the compromise agreement between petitioner and Antonio O.
Jr.; Irene Marcos-Araneta and Gregorio Ma. Araneta III; Yeung Floirendo, who disclosed that he had performed several business
Chun Kam, Yeung Chun Ho and Yeung Chun Fan; and the PEA- transactions upon the instructions of the Marcos spouses.
PTGWO subsequently filed their respective Demurrers to
Evidence. With regard to the siblings Imee Marcos-Manotoc and Bongbong
Marcos, Jr., the court noted that their involvement in the alleged
On 6 December 2005, the Sandiganbayan issued the assailed illegal activities was never established. In fact, they were never
Resolution,7 which granted all the Demurrers to Evidence except mentioned by any of the witnesses presented. Neither did the
the one filed by Imelda R. Marcos. The dispositive portion reads: documentary evidence pinpoint any specific involvement of the
Marcos children.
WHEREFORE, premises considered, the Demurrer to Evidence
filed by defendant Imelda R. Marcos is hereby DENIED. The Moreover, the court held that the evidence, in particular, exhibits
Demurrer to Evidence filed by defendants Maria Imelda Marcos "P,"8 "Q,"9 "R,"10 "S,"11 and "T,"12 were considered hearsay,
Manotoc, Ferdinand Marcos, Jr., Irene Marcos Araneta, Gregorio because their originals were not presented in court, nor were they
Maria Araneta III, Yeung Chun Kam, Yeung Chun Fan, Yeung authenticated by the persons who executed them. Furthermore,
Chun Ho, and intervenor PEA-PTGWO, are hereby GRANTED. The the court pointed out that petitioner failed to provide any valid
sequestration orders on the properties in the name of defendant reason why it did not present the originals in court. These
Gregorio Maria Araneta III, are accordingly ordered lifted. exhibits were supposed to show the interests of Imee Marcos-
Manotok in the media networks IBC-13, BBC-2 and RPN-9, all
SO ORDERED. three of which she had allegedly acquired illegally. These exhibits
also sought to prove her alleged participation in dollar salting
The Sandiganbayan denied Imelda R. Marcos’ Demurrer primarily through De Soleil Apparel.
because she had categorically admitted that she and her husband
owned properties enumerated in the Complaint, while stating that Finally, the court held that the relationship of respondents to the
these properties had been lawfully acquired. The court held that Marcos spouses was not enough reason to hold the former liable.
the evidence presented by petitioner constituted a prima facie
case against her, considering that the value of the properties In the matter of the spouses Irene Marcos and Gregorio Araneta
involved was grossly disproportionate to the Marcos spouses’ III, the court similarly held that there was no testimonial or
lawful income. Thus, this admission and the fact that Imelda R. documentary evidence that supported petitioner’s allegations
Marcos was the compulsory heir and administratrix of the Marcos against the couple. Again, petitioner failed to present the original
estate were the primary reasons why the court held that she was documents that supposedly supported the allegations against
responsible for accounting for the funds and properties alleged to them. Instead, it merely presented photocopies of documents that
be ill-gotten. sought to prove how the Marcoses used the Potencianos13 as
dummies in acquiring and operating the bus company Pantranco.
Secondly, the court pointed out that Rolando Gapud, whose
deposition was taken in Hong Kong, referred to her as one directly Meanwhile, as far as the Yeungs were concerned, the court found
involved in amassing ill-gotten wealth. The court also considered the allegations against them baseless. Petitioner failed to

26
CASES ON EVIDENCE

demonstrate how their business, Glorious Sun Fashion Garments Manotoc and Bongbong Marcos, Jr. to file their Motion for Entry
Manufacturing, Co. Phils. (Glorious Sun), was used as a vehicle of Judgment.
for dollar salting; or to show that they themselves were dummies
of the Marcoses. Again, the court held that the documentary On 2 March 2006, the court issued the second assailed
evidence relevant to this allegation was inadmissible for being Resolution,14 denying petitioner’s Motion. The court pointed out
mere photocopies, and that the affiants had not been presented its reservation in its Resolution dated 12 March 2002, wherein it
as witnesses. said that it would still assess and weigh the evidentiary value of
the admitted evidence. Furthermore, it said that even if it
Finally, the court also granted the Demurrer filed by PEA- included the testimonies of petitioner’s witnesses, these were not
PTGWO. While the court held that there was no evidence to show substantial to hold respondents liable. Thus, the court said:
that Pantranco was illegally acquired, the former nevertheless
held that there was a need to first determine the ownership of the WHEREFORE, there being no sufficient reason to set aside the
disputed funds before they could be ordered released to the resolution dated December 6, 2005, the plaintiff’s Motion for
rightful owner. Partial Reconsideration is hereby DENIED. The plaintiff’s Motion
and Manifestation dated January 18, 2006 is GRANTED in the
On 20 December 2005, petitioner filed its Motion for Partial interest of justice. The Motion for Entry of Judgment filed by
Reconsideration, insisting that there was a preponderance of defendants Imee Marcos and Bongbong Marcos is DENIED.
evidence to show that respondents Marcos siblings and Gregorio
Araneta III had connived with their parents in acquiring ill-gotten SO ORDERED.
wealth. It pointed out that respondents were compulsory heirs to
the deposed President and were thus obliged to render an Hence, this Petition.
accounting and to return the ill-gotten wealth.
Petitioner raises the same issues it raised in its Motion for
Moreover, petitioner asserted that the evidence established that Reconsideration filed before the Sandiganbayan, to wit:15
the Yeungs were dummies of the Marcoses, and that the
Pantranco assets were part of the Marcoses’ alleged ill-gotten I. THE SANDIGANBAYAN ERRED IN GRANTING THE DEMURRER
wealth. TO EVIDENCE FILED BY RESPONDENTS MA. IMELDA (IMEE) R.
MARCOS AND FERDINAND (BONGBONG) R. MARCOS, JR.,
Finally, petitioner questioned the court’s ruling that the evidence CONSIDERING THAT MORE THAN PREPONDERANT EVIDENCE
previously admitted was later held to be inadmissible in evidence ON RECORD CLEARLY DEMONSTRATES THEIR CONNIVANCE
against respondents, thus, depriving the former of due process. WITH FORMER PRESIDENT FERDINAND E. MARCOS AND
OTHER MARCOS DUMMIES AND ABUSED THEIR POWER AND
Inadvertently, petitioner was not able to serve a copy of the INFLUENCE IN UNLAWFULLY AMASSING FUNDS FROM THE
motion on respondents Imee Marcos-Manotoc and Bongbong NATIONAL TREASURY.
Marcos, Jr. But upon realizing the oversight, it immediately did so
and filed the corresponding Manifestation and Motion before the II. PETITION PROVED, BY MORE THAN PREPONDERANT
court. Nonetheless, this inadvertence prompted Imee Marcos- EVIDENCE, THAT RESPONDENT-SPOUSES GREGORIO

27
CASES ON EVIDENCE

ARANETA III AND IRENE MARCOS ARANETA CONNIVED WITH

FORMER PRESIDENT MARCOS IN UNLAWFULLY ACQUIRING The Marcos Siblings and
BUSINESS INTERESTS WHICH ARE GROSSLY Gregorio Araneta III
DISADVANTAGEOUS TO THE GOVERNMENT, AND IN A
MANNER PROHIBITED UNDER THE CONSTITUTION AND ANTI- Closely analyzing petitioner’s Complaint and the present Petition
GRAFT STATUTES. for Review, it is clear that the Marcos siblings are being sued in
two capacities: first, as co-conspirators in the alleged
III. RESPONDENTS IMEE, BONGBONG, AND IRENE MARCOS accumulation of ill-gotten wealth; and second, as the compulsory
ARE COMPULSORY HEIRS OF FORMER PRESIDENT MARCOS heirs of their father, Ferdinand E. Marcos.16
AND ARE EQUALLY OBLIGED TO RENDER AN ACCOUNTING
AND RETURN THE ALLEGED ILL-GOTTEN WEALTH OF THE With regard to the first allegation, as contained in paragraph 29
MARCOSES. of its Third Amended Complaint quoted above, petitioner accused
the Marcos siblings of having collaborated with, participated in,
IV. THERE EXISTS CONCRETE EVIDENCE PROVING THAT and/or benefitted from their parents’ alleged accumulation of ill-
RESPONDENTS YEUNG CHUN KAM, YEUNG CHUN FAN, AND gotten wealth. In particular, as far as Imee Marcos-Manotoc was
YEUNG CHUN HO ACTED AS DUMMIES FOR THE MARCOSES, concerned, she was accused of dollar salting by using Glorious
AND USED THE CORPORATION, GLORIOUS SUN, AS A Sun to import denim fabrics from one supplier at prices much
CONDUIT IN AMASSING THE ILL-GOTTEN WEALTH. higher than those paid by other users of similar materials. It was
ACCORDINGLY, THE SANDIGANBAYAN ERRED IN GRANTING also alleged that the Marcoses personally benefitted from the
THEIR DEMURRER TO EVIDENCE. sequestered media networks IBC-13, BBC-2, and RPN-9, in which
Imee Marcos had a substantial interest.
V. THE DEMURRER TO EVIDENCE FILED BY INTERVENOR
PEA-PTGWO WITH RESPECT TO THE PANTRANCO ASSETS Irene Marcos-Araneta, on the other hand, was accused of having
SHOULD NOT HAVE BEEN GRANTED SINCE AMPLE EVIDENCE conspired with her husband, respondent Gregorio Araneta III, in
PROVES THAT THE SAID ASSETS INDUBITABLY FORM PART OF his being President Marcos’ conduit to Pantranco, thereby paving
THE MARCOS ILL-GOTTEN WEALTH, AS BUTTRESSED BY THE the way for the President’s ownership of the company in violation
FACT THAT NO JUDICIAL DETERMINATION HAS BEEN MADE of Article VII, Section 4, paragraph 2 of the 1973 Constitution.17
AS TO WHOM THESE ASSETS RIGHTFULLY BELONG.
To prove the general allegations against the Marcos siblings,
VI. THE SANDIGANBAYAN’S RULING WHICH REJECTED petitioner primarily relied on the Sworn Statement18 and the
PEITITONER’S DOCUMENTARY EXHIBITS ALLEGEDLY FOR Deposition19 of one of the financial advisors of President Marcos,
BEING "INADMISSIBLE" DIRECTLY CONTRADICTS ITS EARLIER Rolando C. Gapud, taken in Hong Kong on various dates.
RULING ADMITTING ALL SAID DOCUMENTARY EVIDENCE AND
WAS RENDERED IN A MANNER THAT DEPRIVED PETITIONER’S Meanwhile, to prove the participation and interests of Imee
RIGHT TO DUE PROCESS OF LAW. Marcos-Manotoc in De Soleil Apparel and the media networks,
petitioner relied on the Affidavits of Ramon S. Monzon,20 Yeung
There is some merit in petitioner’s contention. Kwok Ying,21 and Rodolfo V. Puno;22 and the transcript of

28
CASES ON EVIDENCE

stenographic notes (TSN) taken during the PCGG hearing held on discharge this burden, the Court is constrained and is left with no
8 June 1987.23 choice but to uphold the Demurrer to Evidence filed by
respondents.
As to spouses Irene Marcos-Araneta and Gregorio Araneta III,
petitioner submitted the Articles of Incorporation of Northern First, petitioner does not deny that what should be proved are the
Express Transport, Inc.;24 the Memorandum of Agreement25 and contents of the documents themselves. It is imperative, therefore,
the Purchase Agreement26 between Pantranco and Batangas to submit the original documents that could prove petitioner’s
Laguna Tayabas Bus Company, Inc. (BLTBCo.); the Confidential allegations.
Memorandum regarding the sale of the Pantranco assets;27 the
Affidavit28 and the letter to the PCGG29 of Dolores A. Potenciano, Thus, the photocopied documents are in violation Rule 130, Sec.
owner of BLTBCo.; the Affidavit30 and the Memorandum31 of 3 of the Rules of Court, otherwise known as the best evidence
Eduardo Fajardo, who was then the Senior Vice-President of the rule, which mandates that the evidence must be the original
Account Management Group of the Philippine National Bank document itself. The origin of the best evidence rule can be found
(PNB), which was in turn the creditor for the Pantranco sale; and and traced to as early as the 18th century in Omychund v.
the Affidavit of Florencio P. Lucio, who was the Senior Account Barker,34 wherein the Court of Chancery said:
Specialist of the National Investment and Development
Corporation.32 The judges and sages of the law have laid it down that there is
but one general rule of evidence, the best that the nature of the
Petitioner contends that these documents fall under the Rule’s case will admit.
third exception, that is, these documents are public records in the
custody of a public officer or are recorded in a public office. It is The rule is, that if the writings have subscribing witnesses to
its theory that since these documents were collected by the them, they must be proved by those witnesses.
PCGG, then, necessarily, the conditions for the exception to apply
had been met. Alternatively, it asserts that the "documents were The first ground judges have gone upon in departing from strict
offered to prove not only the truth of the recitals of the rules, is an absolute strict necessity. Secondly, a presumed
documents, but also of other external or collateral facts."33 necessity. In the case of writings, subscribed by witnesses, if all
are dead, the proof of one of their hands is sufficient to establish
The Court’s Ruling the deed: where an original is lost, a copy may be admitted; if no
copy, then a proof by witnesses who have heard the deed, and yet
Petitioner failed to observe the it is a thing the law abhors to admit the memory of man for
best evidence rule. evidence.

It is petitioner’s burden to prove the allegations in its Complaint. Petitioner did not even attempt to provide a plausible reason why
For relief to be granted, the operative act on how and in what the originals were not presented, or any compelling ground why
manner the Marcos siblings participated in and/or benefitted the court should admit these documents as secondary evidence
from the acts of the Marcos couple must be clearly shown absent the testimony of the witnesses who had executed them.
through a preponderance of evidence. Should petitioner fail to

29
CASES ON EVIDENCE

In particular, it may not insist that the photocopies of the Any other private document need only be identified as that which
documents fall under Sec. 7 of Rule 130, which states: it is claimed to be.

Evidence admissible when original document is a public record. ─ The fact that these documents were collected by the PCGG in the
When the original of a document is in the custody of a public course of its investigations does not make them per se public
officer or is recorded in a public office, its contents may be proved records referred to in the quoted rule.
be a certified copy issued by the public officer in custody thereof.
Petitioner presented as witness its records officer, Maria Lourdes
Secs. 19 and 20 of Rule 132 provide: Magno, who testified that these public and private documents
had been gathered by and taken into the custody of the PCGG in
SECTION 19. Classes of documents. ─ For the purpose of their the course of the Commission’s investigation of the alleged ill-
presentation in evidence, documents are either public or private. gotten wealth of the Marcoses. However, given the purposes for
which these documents were submitted, Magno was not a
Public documents are: credible witness who could testify as to their contents. To
reiterate, "[i]f the writings have subscribing witnesses to them,
(a) The written official acts, or records of the official acts of the they must be proved by those witnesses." Witnesses can testify
sovereign authority, official bodies and tribunals, and public only to those facts which are of their personal knowledge; that is,
officers, whether of the Philippines, or of a foreign country; those derived from their own perception.35 Thus, Magno could
only testify as to how she obtained custody of these documents,
(b) Documents acknowledged before a notary public except last but not as to the contents of the documents themselves.
wills and testaments; and
Neither did petitioner present as witnesses the affiants of these
(c) Public records, kept in the Philippines, of private documents Affidavits or Memoranda submitted to the court. Basic is the rule
required by law to be entered therein. that, while affidavits may be considered as public documents if
they are acknowledged before a notary public, these Affidavits are
All other writings are private. still classified as hearsay evidence. The reason for this rule is that
they are not generally prepared by the affiant, but by another one
SECTION 20. Proof of private document. — Before any private who uses his or her own language in writing the affiant's
document offered as authentic is received in evidence, its due statements, parts of which may thus be either omitted or
execution and authenticity must be proved either: misunderstood by the one writing them. Moreover, the adverse
party is deprived of the opportunity to cross-examine the affiants.
(a) By anyone who saw the document executed or written; or For this reason, affidavits are generally rejected for being hearsay,
unless the affiants themselves are placed on the witness stand to
(b) By evidence of the genuineness of the signature or handwriting testify thereon.36
of the maker.
As to the copy of the TSN of the proceedings before the PCGG,
while it may be considered as a public document since it was

30
CASES ON EVIDENCE

taken in the course of the PCGG’s exercise of its mandate, it was the search for or attempt to produce the original. None of these
not attested to by the legal custodian to be a correct copy of the requirements were complied with by the plaintiff. Similar to
original. This omission falls short of the requirement of Rule 132, exhibit ‘Q’, exhibits ‘P’, ‘R’, ‘S’, and ‘T’ were all photocopies. ‘P’, ‘R’,
Secs. 24 and 25 of the Rules of Court.37 and ‘T’ were affidavits of persons who did not testify before the
Court. Exhibit ‘S’ is a letter which is clearly a private document.
In summary, we adopt the ruling of the Sandiganbayan, to wit: Not only does it not fall within the exceptions of Section 3, it is
also a mere photocopy. As We previously emphasized, even if
Further, again contrary to the theory of the plaintiff, the originals of these affidavits were presented, they would still be
presentation of the originals of the aforesaid exhibits is not validly considered hearsay evidence if the affiants do not testify and
excepted under Rule 130, Section 3 (a), (b), and (d) of the Rules of identify them.38
Court. Under paragraph (d), when ‘the original document is a
public record in the custody of a public officer or is recorded in a Thus, absent any convincing evidence to hold otherwise, it follows
public office,’ presentation of the original thereof is excepted. that petitioner failed to prove that the Marcos siblings and
However, as earlier observed, all except one of the exhibits Gregorio Araneta III collaborated with former President Marcos
introduced by the plaintiff were not necessarily public documents. and Imelda R. Marcos and participated in the first couple’s
The transcript of stenographic notes (TSN) of the proceedings alleged accumulation of ill-gotten wealth insofar as the specific
purportedly before the PCGG, the plaintiff’s exhibit "Q", may be a allegations herein were concerned.
public document, but what was presented by the plaintiff was a
mere photocopy of the purported TSN. The Rules provide that The Marcos siblings are compulsory heirs.
when the original document is in the custody of a public officer or
is recorded in a public office, its contents may be proved by a To reiterate, in its third Amended Complaint, petitioner prays that
certified copy issued by the public officer in custody thereof. the Marcos respondents be made to (1) pay for the value of the
Exhibit "Q" was not a certified copy and it was not even signed by alleged ill-gotten wealth with interest from the date of acquisition;
the stenographer who supposedly took down the proceedings. (2) render a complete accounting and inventory of all funds and
other pieces of property legally or beneficially held and/or
The rest of the above-mentioned exhibits cannot likewise be controlled by them, as well as their legal and beneficial interest
excepted under paragraphs (a) and (b) of Section 3. Section 5 of therein; (3) pay actual damages estimated at ₱200 billion and
the same Rule provides that ‘when the original documents has additional actual damages to reimburse expenses for the recovery
been lost or destroyed, or cannot be produced in court, the of the alleged ill-gotten wealth estimated at ₱250 million or in
offeror, upon proof of its execution or existence and the cause of such amount as may be proven during trial; (4) pay moral
its unavailability without bad faith on his part, may prove its damages amounting to ₱50 billion; (5) pay temperate and nominal
contents by a copy, or by a recital of its contents in some damages, as well as attorney’s fees and litigation expenses in an
authentic document, or by the testimony of witnesses in the order amount to be proven during the trial; (6) pay exemplary damages
stated.’ Thus, in order that secondary evidence may be in the amount of ₱1 billion; and (7) pay treble judicial costs.39
admissible, there must be proof by satisfactory evidence of (1) due
execution of the original; (2) loss, destruction or unavailability of It must be stressed that we are faced with exceptional
all such originals and (3) reasonable diligence and good faith in circumstances, given the nature and the extent of the properties

31
CASES ON EVIDENCE

involved in the case pending with the Sandiganbayan. It bears without their presence. Parties are indispensable if their interest
emphasis that the Complaint is one for the reversion, the in the subject matter of the suit and in the relief sought is
reconveyance, the restitution and the accounting of alleged ill- inextricably intertwined with that of the other parties.42
gotten wealth and the payment of damages. Based on the
allegations of the Complaint, the court is charged with the task of In order to reach a final determination of the matters concerning
(1) determining the properties in the Marcos estate that constitute the estate of Ferdinand E. Marcos – that is, the accounting and
the alleged ill-gotten wealth; (2) tracing where these properties the recovery of ill-gotten wealth – the present case must be
are; (3) issuing the appropriate orders for the accounting, the maintained against Imelda Marcos and herein respondent
recovery, and the payment of these properties; and, finally, (4) Ferdinand "Bongbong" R. Marcos, Jr., as executors of the Marcos
determining if the award of damages is proper. estate pursuant to Sec. 1 of Rule 87 of the Rules of Court.
According to this provision, actions may be commenced to recover
Since the pending case before the Sandiganbayan survives the from the estate, real or personal property, or an interest therein,
death of Ferdinand E. Marcos, it is imperative therefore that the or to enforce a lien thereon; and actions to recover damages for
estate be duly represented. The purpose behind this rule is the an injury to person or property, real or personal, may be
protection of the right to due process of every party to a litigation commenced against the executors.
who may be affected by the intervening death. The deceased
litigant is himself protected, as he continues to be properly We also hold that the action must likewise be maintained against
represented in the suit through the duly appointed legal Imee Marcos-Manotoc and Irene Marcos-Araneta on the basis of
representative of his estate.40 On that note, we take judicial the non-exhaustive list attached as Annex "A" to the Third
notice of the probate proceedings regarding the will of Ferdinand Amended Complaint, which states that the listed properties
E. Marcos. In Republic of the Philippines v. Marcos II,41 we therein were owned by Ferdinand and Imelda Marcos and their
upheld the grant by the Regional Trial Court (RTC) of letters immediate family.43 It is only during the trial of Civil Case No.
testamentary in solidum to Ferdinand R. Marcos, Jr. and Imelda 0002 before the Sandiganbayan that there could be a
Romualdez-Marcos as executors of the last will and testament of determination of whether these properties are indeed ill-gotten or
the late Ferdinand E. Marcos. were legitimately acquired by respondents and their predecessors.
Thus, while it was not proven that respondents conspired in
Unless the executors of the Marcos estate or the heirs are ready accumulating ill-gotten wealth, they may be in possession,
to waive in favor of the state their right to defend or protect the ownership or control of such ill-gotten properties or the proceeds
estate or those properties found to be ill-gotten in their thereof as heirs of the Marcos couple. Thus, their lack of
possession, control or ownership, then they may not be dropped participation in any illegal act does not remove the character of
as defendants in the civil case pending before the Sandiganbayan. the property as ill-gotten and, therefore, as rightfully belonging to
the State.
Rule 3, Sec. 7 of the Rules of Court defines indispensable parties
as those parties-in-interest without whom there can be no final Secondly, under the rules of succession, the heirs
determination of an action. They are those parties who possess instantaneously became co-owners of the Marcos properties upon
such an interest in the controversy that a final decree would the death of the President. The property rights and obligations to
necessarily affect their rights, so that the courts cannot proceed the extent of the value of the inheritance of a person are

32
CASES ON EVIDENCE

transmitted to another through the decedent’s death.44 In this establish as having been, in fact, lawfully acquired by them,
concept, nothing prevents the heirs from exercising their right to alternatively, to solidarily pay Plaintiff the value thereof with
transfer or dispose of the properties that constitute their interest thereon from the date of acquisition until full payment.
legitimes, even absent their declaration or absent the partition or
the distribution of the estate. In Jakosalem v. Rafols,45 we said: 2. AS TO THE FOURTH CAUSE OF ACTION – to individually
render to this Honorable Court a complete accounting and
Article 440 of the Civil Code provides that "the possession of inventory, subject to evaluation of Court-appointed assessors, of
hereditary property is deemed to be transmitted to the heir all funds and other property legally or beneficially held and/or
without interruption from the instant of the death of the controlled by them, as well as their legal and beneficial interest in
decedent, in case the inheritance be accepted." And Manresa with such funds and other property. (Emphasis supplied)
reason states that upon the death of a person, each of his heirs
"becomes the undivided owner of the whole estate left with In sum, the Marcos siblings are maintained as respondents,
respect to the part or portion which might be adjudicated to him, because (1) the action pending before the Sandiganbayan is one
a community of ownership being thus formed among the that survives death, and, therefore, the rights to the estate must
coowners of the estate while it remains undivided." (3 Manresa, be duly protected; (2) they allegedly control, possess or own ill-
357; Alcala vs. Alcala, 35 Phil. 679.) And according to article 399 gotten wealth, though their direct involvement in accumulating or
of the Civil Code, every part owner may assign or mortgage his acquiring such wealth may not have been proven.
part in the common property, and the effect of such assignment
or mortgage shall be limited to the portion which may be allotted Yeung Chun Kam, Yeung Chun
him in the partition upon the dissolution of the community. Ho And Yeung Chun Fan
Hence, in the case of Ramirez vs. Bautista, 14 Phil. 528, where
some of the heirs, without the concurrence of the others, sold a It is worthy to note that respondents draw our attention to
property left by their deceased father, this Court, speaking thru American Inter-Fashion Corporation v. Office of the President46
its then Chief Justice Cayetano Arellano, said that the sale was in which they contend that this Court considered the allegation of
valid, but that the effect thereof was limited to the share which dollar salting as baseless. The cited case, however, finds no
may be allotted to the vendors upon the partition of the estate. application herein as the former merely ruled that Glorious Sun
(Emphasis supplied) was denied due process when it was not furnished by the
Garments and Textile Export Board (GTEB) any basis for the
Lastly, petitioner’s prayer in its Third Amended Complaint directly cancellation of the export quota because of allegations of dollar
refers to herein respondents, to wit: salting. That Decision did not prevent petitioner from adducing
evidence to support its allegation in Civil Case No. 0002 before
1. AS TO THE FIRST SECOND AND THIRD CAUSES OF ACTION – the Sandiganbayan under a different cause of action.
To return and reconvey to Plaintiff all funds and other property
acquired by Defendants during their incumbency as public Nevertheless, the allegations against Yeung Chun Kam, Yeung
officers, which funds and other property are manifestly out of Chun Ho and Yeung Chun Fan in the case at bar were also
proportion to their salaries, other lawful income and income from proved to be baseless. Again, petitioner failed to illustrate how
legitimately acquired property which Defendants have failed to respondents herein acted as dummies of the Marcoses in

33
CASES ON EVIDENCE

acquiring ill-gotten wealth. This Court notes that the Complaint (GTEB) as Exhibit T wherein he categorically declared that the
against the Yeungs alleges that the Marcoses used Glorious Sun – majority of De Soleil Apparel was actually owned by respondent
the garment company in which the Yeungs are controlling Imee Marcos-Manotoc.47
stockholders – for illegal dollar salting through the company’s
importation of denim fabrics from only one supplier at prices The foregoing quotation from the Petition is bereft of any factual
much higher than those being paid by other users of similar matter that warrants a consideration by the Court. Straight from
materials. Notably, no mention of De Soleil Apparel was made. the horse’s mouth, these documents are only meant to show the
ownership and interest of Imee Marcos Manotoc in De Soleil – and
To prove its allegations, petitioner submitted the controverted not how respondent supposedly participated in dollar salting or in
Exhibits "P," "Q," "R," "S," and "T." As earlier discussed in detail, the accumulation of ill-gotten wealth.
these pieces of evidence were mere photocopies of the originals
and were unauthenticated by the persons who executed them; PEA-PTGWO
thus, they have no probative value. Even the allegations of
petitioner itself in its Petition for Review are bereft of any factual The PEA-PTGWO Demurrer to Evidence was granted primarily as
basis for holding that these documents undoubtedly show a consequence of the prosecution’s failure to establish that the
respondents’ participation in the alleged dollar salting. The assets of Pantranco were ill-gotten, as discussed earlier. Thus, we
pertinent portion of the Petition reads: find no error in the assailed Order of the Sandiganbayan.

To illustrate, the Affidavit dated May 29, 1987 executed by Mr. A Final Note
Ramon Monzon which was submitted as Exhibit P, showed that
respondent Imee Marcos-Manotoc owns and controls IBC-13, As earlier adverted to, the best evidence rule has been recognized
BBC-2 and (R)PN-9, and has interest in the De Soleil Apparel. The as an evidentiary standard since the 18th century. For three
testimony of Mr. Ramon Monzon during the hearing on June 8, centuries, it has been practiced as one of the most basic rules in
1987 before the Presidential Commission on Good Government as law. It is difficult to conceive that one could have finished law
shown in the Transcript of Stenographic Notes also affirmed his school and passed the bar examinations without knowing such
declarations in the Affidavit dated May 29, 1987. The Transcript elementary rule. Thus, it is deeply disturbing that the PCGG and
of Stenographic Notes dated June 8, 1987 was presented as the Office of the Solicitor General (OSG) – the very agencies sworn
Exhibit Q. Moreover, the Affidavit dated March 21, 1986 of Yeung to protect the interest of the state and its people – could conduct
Kwok Ying which was presented as Exhibit R disclosed that Imee their prosecution in the manner that they did. To emphasize, the
Marcos-Manotoc is the owner of 67% equity of De Soleil Apparel. PCGG is a highly specialized office focused on the recovery of ill-
The letter dated July 17, 1984 signed by seven (7) incorporators gotten wealth, while the OSG is the principal legal defender of the
of De Soleil Apparel, addressed to Hongkong investors which was government. The lawyers of these government agencies are
presented as Exhibit S confirmed that the signatories hold or own expected to be the best in the legal profession.
67% equity of the corporation in behalf of the beneficial owners
previously disclosed to the addressees. In addition to the However, despite having the expansive resources of government,
foregoing documents, petitioner presented the Affidavit of Rodolfo the members of the prosecution did not even bother to provide
V. Puno, Chairman of the Garments and Textile Export Group any reason whatsoever for their failure to present the original

34
CASES ON EVIDENCE

documents or the witnesses to support the government’s claims. violated the due process rights of the private complainant owing
Even worse was presenting in evidence a photocopy of the TSN of to its blatant disregard of procedural rules and the failure to
the PCGG proceedings instead of the original, or a certified true present available crucial evidence, which would tend to prove the
copy of the original, which the prosecutors themselves should guilt or innocence of the accused therein. Moreover, we likewise
have had in their custody. Such manner of legal practice deserves found that the trial court was gravely remiss in its duty to ferret
the reproof of this Court. We are constrained to call attention to out the truth and, instead, just "passively watched as the public
this apparently serious failure to follow a most basic rule in law, prosecutor bungled the case."
given the special circumstances surrounding this case.
However, it must be emphasized that Merciales was filed exactly
The public prosecutors should employ and use all government to determine whether the prosecution and the trial court gravely
resources and powers efficiently, effectively, honestly and abused their discretion in the proceedings of the case, thus
economically, particularly to avoid wastage of public funds and resulting in the denial of the offended party’s due process.
revenues. They should perform and discharge their duties with Meanwhile, the present case merely alleges that there was an
the highest degree of excellence, professionalism, intelligence and error in the Sandiganbayan’s consideration of the probative value
skill.48 of evidence. We also note that in Merciales, both the prosecution
and the trial court were found to be equally guilty of serious
The basic ideal of the legal profession is to render service and nonfeasance, which prompted us to remand the case to the trial
secure justice for those seeking its aid.49 In order to do this, court for further proceedings and reception of evidence. Merciales
lawyers are required to observe and adhere to the highest ethical is thus inapplicable to the case at bar.
and professional standards. The legal profession is so imbued
with public interest that its practitioners are accountable not only Nevertheless, given the particular context of this case, the failure
to their clients, but to the public as well. of the prosecution to adhere to something as basic as the best
evidence rule raises serious doubts on the level and quality of
The public prosecutors, aside from being representatives of the effort given to the government’s cause. Thus, we highly encourage
government and the state, are, first and foremost, officers of the the Office of the President, the OSG, and the PCGG to conduct
court. They took the oath to exert every effort and to consider it the appropriate investigation and consequent action on this
their duty to assist in the speedy and efficient administration of matter.
justice.50 Lawyers owe fidelity to the cause of the client and
should be mindful of the trust and confidence reposed in them.51 WHEREFORE, in view of the foregoing, the Petition is PARTIALLY
Hence, should serve with competence and diligence.52 GRANTED. The assailed Sandiganbayan Resolution dated 6
December 2005 is AFFIRMED with MODIFICATION. For the
We note that there are instances when this Court may overturn reasons stated herein, respondents Imelda Marcos-Manotoc, Irene
the dismissal of the lower courts in instances when it is shown Marcos-Araneta, and Ferdinand R. Marcos, Jr. shall be
that the prosecution has deprived the parties their due process of maintained as defendants in Civil Case No. 0002 pending before
law. In Merciales v. Court of Appeals,53 we reversed the Decision the Sandiganbayan.
of the RTC in dismissing the criminal case for rape with homicide.
In that case, it was very apparent that the public prosecutor

35
CASES ON EVIDENCE

Let a copy of this Decision be furnished to the Office of the

President so that it may look into the circumstances of this case
and determine the liability, if any, of the lawyers of the Office of 21. CIR v. Hantex Trading Co., Inc
the Solicitor General and the Presidential Commission on Good
Government in the manner by which this case was handled in the The “best evidence” envisaged in Section 16 of the 1977 NIRC, as
Sandiganbayan. amended, includes the corporate and accounting records of the
taxpayer who is the subject of the assessment process, the
SO ORDERED. accounting records of other taxpayers engaged in the same line of
business, including their gross profit and net profit sales.—The
“best evidence” envisaged in Section 16 of the 1977 NIRC, as
amended, includes the corporate and accounting records of the
taxpayer who is the subject of the assessment process, the
accounting records of other taxpayers engaged in the same line of
business, including their gross profit and net profit sales. Such
evidence also includes data, record, paper, document or any
evidence gathered by internal revenue officers from other
taxpayers who had personal transactions or from whom the
subject taxpayer received any income; and record, data,
document and information secured from government offices or
agencies, such as the SEC, the Central Bank of the Philippines,
the Bureau of Customs, and the Tariff and Customs Commission.

Same; Same; The general rule is that administrative agencies

such as the BIR are not bound by the technical rules of evidence.
—We agree with the contention of the petitioner that the best
evidence obtainable may consist of hearsay evidence, such as the
testimony of third parties or accounts or other records of other
taxpayers similarly circumstanced as the taxpayer subject of the
investigation, hence, inadmissible in a regular proceeding in the
regular courts. Moreover, the general rule is that administrative
agencies such as the BIR are not bound by the technical rules of
evidence. It can accept documents which cannot be admitted in a
judicial proceeding where the Rules of Court are strictly observed.
It can choose to give weight or disregard such evidence,
depending on its trustworthiness.

36
CASES ON EVIDENCE

Same; Same; The best evidence obtainable under Section 16 of The respondent is a corporation duly organized and existing
the 1977 NIRC, as amended, does not include mere photocopies under the laws of the Philippines. Being engaged in the sale of
of records/documents.—The best evidence obtainable under plastic products, it imports synthetic resin and other chemicals
Section 16 of the 1977 NIRC, as amended, does not include mere for the manufacture of its products. For this purpose, it is
photocopies of records/documents. The petitioner, in making a required to file an Import Entry and Internal Revenue Declaration
preliminary and final tax deficiency assessment against a (Consumption Entry) with the Bureau of Customs under Section
taxpayer, cannot anchor the said assessment on mere machine 1301 of the Tariff and Customs Code.
copies of records/documents. Mere photocopies of the
Consumption Entries have no probative weight if offered as proof Sometime in October 1989, Lt. Vicente Amoto, Acting Chief of
of the contents thereof. The reason for this is that such copies are Counter-Intelligence Division of the Economic Intelligence and
mere scraps of paper and are of no probative value as basis for Investigation Bureau (EIIB), received confidential information that
any deficiency income or business taxes against a taxpayer. the respondent had imported synthetic resin amounting to
P115,599,018.00 but only declared P45,538,694.57.3 According
Same; Same; The rule is that in the absence of the accounting to the informer, based on photocopies of 77 Consumption Entries
records of a taxpayer, his tax liability may be determined by furnished by another informer, the 1987 importations of the
estimation; Rule does not apply where the estimation is arrived at respondent were understated in its accounting records.4 Amoto
arbitrarily and capriciously.—The rule is that in the absence of submitted a report to the EIIB Commissioner recommending that
the accounting records of a taxpayer, his tax liability may be an inventory audit of the respondent be conducted by the Internal
determined by estimation. The petitioner is not required to Inquiry and Prosecution Office (IIPO) of the EIIB.5
compute such tax liabilities with mathematical exactness.
Approximation in the calculation of the taxes due is justified. To Acting on the said report, Jose T. Almonte, then Commissioner of
hold otherwise would be tantamount to holding that skillful the EIIB, issued Mission Order No. 398-896 dated November 14,
concealment is an invincible barrier to proof. However, the rule 1989 for the audit and investigation of the importations of Hantex
does not apply where the estimation is arrived at arbitrarily and for 1987. The IIPO issued subpoena duces tecum and ad
capriciously. testificandum for the president and general manager of the
respondent to appear in a hearing and bring the following:
CALLEJO, SR., J.:
1. Books of Accounts for the year 1987;
Before us is a petition for review of the Decision1 of the Court of
Appeals (CA) which reversed the Decision2 of the Court of Tax 2. Record of Importations of Synthetic Resin and Calcium
Appeals (CTA) in CTA Case No. 5126, upholding the deficiency Carbonate for the year 1987;
income and sales tax assessments against respondent Hantex
Trading Co., Inc. 3. Income tax returns & attachments for 1987; and

The Antecedents 4. Record of tax payments.7

37
CASES ON EVIDENCE

However, the respondent’s president and general manager refused Bienvenido G. Flores, Chief of the Investigation Division, and Lt.
to comply with the subpoena, contending that its books of Leo Dionela, Lt. Vicente Amoto and Lt. Rolando Gatmaitan
accounts and records of importation of synthetic resin and conducted an investigation. They relied on the certified copies of
calcium bicarbonate had been investigated repeatedly by the the respondent’s Profit and Loss Statement for 1987 and 1988 on
Bureau of Internal Revenue (BIR) on prior occasions.8 The IIPO file with the SEC, the machine copies of the Consumption
explained that despite such previous investigations, the EIIB was Entries, Series of 1987, submitted by the informer, as well as
still authorized to conduct an investigation pursuant to Section excerpts from the entries certified by Tomas and Danganan.
26-A of Executive Order No. 127. Still, the respondent refused to
comply with the subpoena issued by the IIPO. The latter forthwith Based on the documents/records on hand, inclusive of the
secured certified copies of the Profit and Loss Statements for machine copies of the Consumption Entries, the EIIB found that
1987 filed by the respondent with the Securities and Exchange for 1987, the respondent had importations totaling
Commission (SEC).9 However, the IIPO failed to secure certified P105,716,527.00 (inclusive of advance sales tax). Compared with
copies of the respondent’s 1987 Consumption Entries from the the declared sales based on the Profit and Loss Statements filed
Bureau of Customs since, according to the custodian thereof, the with the SEC, the respondent had unreported sales in the
original copies had been eaten by termites.10 amount of P63,032,989.17, and its corresponding income tax
liability was P41,916,937.78, inclusive of penalty charge and
In a Letter dated June 28, 1990, the IIPO requested the Chief of interests.
the Collection Division, Manila International Container Port, and
the Acting Chief of the Collection Division, Port of Manila, to EIIB Commissioner Almonte transmitted the entire docket of the
authenticate the machine copies of the import entries supplied by case to the BIR and recommended the collection of the total tax
the informer. However, Chief of the Collection Division Merlita D. assessment from the respondent.13
Tomas could not do so because the Collection Division did not
have the original copies of the entries. Instead, she wrote the IIPO On February 12, 1991, Deputy Commissioner Deoferio, Jr. issued
that, as gleaned from the records, the following entries had been a Memorandum to the BIR Assistant Commissioner for Special
duly processed and released after the payment of duties and Operations Service, directing the latter to prepare a conference
taxes. letter advising the respondent of its deficiency taxes.14

Acting Chief of the Collection Division of the Bureau of Customs Meanwhile, as ordered by the Regional Director, Revenue
Augusto S. Danganan could not authenticate the machine copies Enforcement Officers Saturnino D. Torres and Wilson Filamor
of the import entries as well, since the original copies of the said conducted an investigation on the 1987 importations of the
entries filed with the Bureau of Customs had apparently been respondent, in the light of the records elevated by the EIIB to the
eaten by termites. However, he issued a certification that the BIR, inclusive of the photocopies of the Consumption Entries.
following enumerated entries were filed by the respondent which They were to ascertain the respondent’s liability for deficiency
were processed and released from the Port of Manila after sales and income taxes for 1987, if any. Per Torres’ and Filamor’s
payment of duties and taxes. Report dated March 6, 1991 which was based on the report of the
EIIB and the documents/records appended thereto, there was a
prima facie case of fraud against the respondent in filing its 1987

38
CASES ON EVIDENCE

Consumption Entry reports with the Bureau of Customs. They Madam, we had been subjected to so many investigations and re-
found that the respondent had unrecorded importation in the investigations for 1987 and nothing came out except the payment
total amount of P70,661,694.00, and that the amount was not of deficiency taxes as a result of oversight. Tax evasion through
declared in its income tax return for 1987. The District Revenue underdeclaration of income had never been proven.18
Officer and the Regional Director of the BIR concurred with the
report.15 Invoking Section 23519 of the 1977 National Internal Revenue
Code (NIRC), as amended, Chua requested that the inquiry be set
Based on the said report, the Acting Chief of the Special aside.
Investigation Branch wrote the respondent and invited its
representative to a conference at 10:00 a.m. of March 14, 1991 to The petitioner, the Commissioner of Internal Revenue, through
discuss its deficiency internal revenue taxes and to present Assistant Commissioner for Collection Jaime M. Maza, sent a
whatever documentary and other evidence to refute the same.16 Letter dated April 15, 1991 to the respondent demanding
Appended to the letter was a computation of the deficiency payment of its deficiency income tax of P13,414,226.40 and
income and sales tax due from the respondent, inclusive of deficiency sales tax of P14,752,903.25, inclusive of surcharge and
increments. interest.20 Appended thereto were the Assessment Notices of Tax
Deficiency Nos. FAS-1-87-91-001654 and FAS-4-87-91-
The invitation was reiterated in a Letter dated March 15, 1991. In 001655.21
his Reply dated March 15, 1991, Mariano O. Chua, the President
and General Manager of the respondent, requested that the report On February 12, 1992, the Chief of the Accounts
of Torres and Filamor be set aside on the following claim: Receivables/Billing Division of the BIR sent a letter to the
respondent demanding payment of its tax liability due for 1987
… [W]e had already been investigated by RDO No. 23 under within ten (10) days from notice, on pain of the collection tax due
Letters of Authority Nos. 0322988 RR dated Oct. 1, 1987, via a warrant of distraint and levy and/or judicial action.22 The
0393561 RR dated Aug. 17, 1988 and 0347838 RR dated March Warrant of Distraint and/or Levy23 was actually served on the
2, 1988, and re-investigated by the Special Investigation Team on respondent on January 21, 1992. On September 7, 1992, it wrote
Aug. 17, 1988 under Letter of Authority No. 0357464 RR, and the the Commissioner of Internal Revenue protesting the assessment
Intelligence and Investigation Office on Sept. 27, 1988 under on the following grounds:
Letter of Authority No. 0020188 NA, all for income and business
tax liabilities for 1987. The Economic Intelligence and I. THAT THE ASSESSMENT HAS NO FACTUAL AS WELL AS
Investigation Bureau on Nov. 20, 1989, likewise, confronted us on LEGAL BASIS, THE FACT THAT NO INVESTIGATION OF OUR
the same information for the same year. RECORDS WAS EVER MADE BY THE EIIB WHICH
RECOMMENDED ITS ISSUANCE.24
In all of these investigations, save your request for an informal
conference, we welcomed them and proved the contrary of the II. THAT GRANTING BUT WITHOUT ADMITTING THAT OUR
allegation. Now, with your new inquiry, we think that there will be PURCHASES FOR 1987 AMOUNTED TO P105,716,527.00 AS
no end to the problem. CLAIMED BY THE EIIB, THE ASSESSMENT OF A DEFICIENCY

39
CASES ON EVIDENCE

INCOME TAX IS STILL DEFECTIVE FOR IT FAILED TO letters, no amounts of the landed costs and advance sales tax and
CONSIDER OUR REAL PURCHASES OF P45,538,694.57.25 duties were stated, and no particulars of the duties and taxes
paid per import entry document was presented.
III. THAT THE ASSESSMENT OF A DEFICIENCY SALES TAX IS
ALSO BASELESS AND UNFOUNDED CONSIDERING THAT WE The contents of the two letters failed to indicate the particulars of
HAVE DUTIFULLY PAID THE SALES TAX DUE FROM OUR the importations per entry number, and the said letters do not
BUSINESS.26 constitute as evidence of the amounts of importations of Hantex
Trading Co., Inc. in 1987.28
In view of the impasse, administrative hearings were conducted
on the respondent’s protest to the assessment. During the The respondent cited the following findings of the Hearing Officer:
hearing of August 20, 1993, the IIPO representative presented the
photocopies of the Consumption and Import Entries and the … [T]hat the import entry documents do not constitute evidence
Certifications issued by Tomas and Danganan of the Bureau of only indicate that the tax assessments in question have no
Customs. The IIPO representative testified that the Bureau of factual basis, and must, at this point in time, be withdrawn and
Customs failed to furnish the EIIB with certified copies of the cancelled. Any new findings by the IIPO representative who
Consumption and Import Entries; hence, the EIIB relied on the attended the hearing could not be used as evidence in this
machine copies from their informer.27 hearing, because all the issues on the tax assessments in
question have already been raised by the herein taxpayer.29
The respondent wrote the BIR Commissioner on July 12, 1993
questioning the assessment on the ground that the EIIB The respondent requested anew that the income tax deficiency
representative failed to present the original, or authenticated, or assessment and the sales tax deficiency assessment be set aside
duly certified copies of the Consumption and Import Entry for lack of factual and legal basis.
Accounts, or excerpts thereof if the original copies were not
readily available; or, if the originals were in the official custody of The BIR Commissioner30 wrote the respondent on December 10,
a public officer, certified copies thereof as provided for in Section 1993, denying its letter-request for the dismissal of the
12, Chapter 3, Book VII, Administrative Procedure, Administrative assessments.31 The BIR Commissioner admitted, in the said
Order of 1987. It stated that the only copies of the Consumption letter, the possibility that the figures appearing in the photocopies
Entries submitted to the Hearing Officer were mere machine of the Consumption Entries had been tampered with. She
copies furnished by an informer of the EIIB. It asserted that the averred, however, that she was not proscribed from relying on
letters of Tomas and Danganan were unreliable because of the other admissible evidence, namely, the Letters of Torres and
following: Filamor dated August 7 and 22, 1990 on their investigation of the
respondent’s tax liability. The Commissioner emphasized that her
In the said letters, the two collection officers merely submitted a decision was final.32
listing of alleged import entry numbers and dates released of
alleged importations by Hantex Trading Co., Inc. of merchandise The respondent forthwith filed a petition for review in the CTA of
in 1987, for which they certified that the corresponding duties the Commissioner’s Final Assessment Letter dated December 10,
and taxes were paid after being processed in their offices. In said 1993 on the following grounds:

40
CASES ON EVIDENCE

returns. Finally, the respondent was following the accrual method

First. The alleged 1987 deficiency income tax assessment of accounting in 1987, yet, the BIR investigator who computed
(including increments) and the alleged 1987 deficiency sales tax the 1987 income tax deficiency failed to allow as a deductible item
assessment (including increments) are void ab initio, since under the alleged sales tax deficiency for 1987 as provided for under
Sections 16(a) and 49(b) of the Tax Code, the Commissioner shall Section 30(c) of the NIRC of 1986.33
examine a return after it is filed and, thereafter, assess the
correct amount of tax. The following facts obtaining in this case, The Commissioner did not adduce in evidence the original or
however, are indicative of the incorrectness of the tax certified true copies of the 1987 Consumption Entries on file with
assessments in question: the deficiency interests imposed in the the Commission on Audit. Instead, she offered in evidence as
income and percentage tax deficiency assessment notices were proof of the contents thereof, the photocopies of the Consumption
computed in violation of the provisions of Section 249(b) of the Entries which the respondent objected to for being inadmissible
NIRC of 1977, as amended; the percentage tax deficiency was in evidence.34 She also failed to present any witness to prove the
computed on an annual basis for the year 1987 in accordance correct amount of tax due from it. Nevertheless, the CTA
with the provision of Section 193, which should have been provisionally admitted the said documents in evidence, subject to
computed in accordance with Section 162 of the 1977 NIRC, as its final evaluation of their relevancy and probative weight to the
amended by Pres. Decree No. 1994 on a quarterly basis; and the issues involved.35
BIR official who signed the deficiency tax assessments was the
Assistant Commissioner for Collection, who had no authority to On December 11, 1997, the CTA rendered a decision, the
sign the same under the NIRC. dispositive portion of which reads:

Second. Even granting arguendo that the deficiency taxes and IN THE LIGHT OF ALL THE FOREGOING, judgment is hereby
increments for 1987 against the respondent were correctly rendered DENYING the herein petition. Petitioner is hereby
computed in accordance with the provisions of the Tax Code, the ORDERED TO PAY the respondent Commissioner of Internal
facts indicate that the above-stated assessments were based on Revenue its deficiency income and sales taxes for the year 1987
alleged documents which are inadmissible in either in the amounts of P11,182,350.26 and P12,660,382.46,
administrative or judicial proceedings. Moreover, the alleged respectively, plus 20% delinquency interest per annum on both
bases of the tax computations were anchored on mere deficiency taxes from April 15, 1991 until fully paid pursuant to
presumptions and not on actual facts. The alleged undeclared Section 283(c)(3) of the 1987 Tax Code, with costs against the
purchases for 1987 were based on mere photocopies of alleged petitioner.
import entry documents, not the original ones, and which had
never been duly certified by the public officer charged with the SO ORDERED.36
custody of such records in the Bureau of Customs. According to
the respondent, the alleged undeclared sales were computed The CTA ruled that the respondent was burdened to prove not
based on mere presumptions as to the alleged gross profit only that the assessment was erroneous, but also to adduce the
contained in its 1987 financial statement. Moreover, even the correct taxes to be paid by it. The CTA declared that the
alleged financial statement of the respondent was a mere machine respondent failed to prove the correct amount of taxes due to the
copy and not an official copy of the 1987 income and business tax BIR. It also ruled that the respondent was burdened to adduce in

41
CASES ON EVIDENCE

evidence a certification from the Bureau of Customs that the the two Customs Collection Chiefs under the guise of supporting
Consumption Entries in question did not belong to it. the respondent’s alleged tax deficiency assessments invoking the
best evidence obtainable rule under the Tax Code should not be
On appeal, the CA granted the petition and reversed the decision permitted to supplant the best evidence rule under Section 7,
of the CTA. The dispositive portion of the decision reads: Rule 130 of the Rules of Court.

FOREGOING PREMISES CONSIDERED, the Petition for Review is Finally, the CA noted that the tax deficiency assessments were
GRANTED and the December 11, 1997 decision of the CTA in CTA computed without the tax returns. The CA opined that the use of
Case No. 5162 affirming the 1987 deficiency income and sales tax the tax returns is indispensable in the computation of a tax
assessments and the increments thereof, issued by the BIR is deficiency; hence, this essential requirement must be complied
hereby REVERSED. No costs.37 with in the preparation and issuance of valid tax deficiency
assessments.42
The Ruling of the Court of Appeals
The Present Petition
The CA held that the income and sales tax deficiency assessments
issued by the petitioner were unlawful and baseless since the The Commissioner of Internal Revenue, the petitioner herein, filed
copies of the import entries relied upon in computing the the present petition for review under Rule 45 of the Rules of Court
deficiency tax of the respondent were not duly authenticated by for the reversal of the decision of the CA and for the reinstatement
the public officer charged with their custody, nor verified under of the ruling of the CTA.
oath by the EIIB and the BIR investigators.38 The CA also noted
that the public officer charged with the custody of the import As gleaned from the pleadings of the parties, the threshold issues
entries was never presented in court to lend credence to the for resolution are the following: (a) whether the petition at bench
alleged loss of the originals.39 The CA pointed out that an import is proper and complies with Sections 4 and 5, Rule 7 of the Rules
entry is a public document which falls within the provisions of of Court; (b) whether the December 10, 1991 final assessment of
Section 19, Rule 132 of the Rules of Court, and to be admissible the petitioner against the respondent for deficiency income tax
for any legal purpose, Section 24, Rule 132 of the Rules of Court and sales tax for the latter’s 1987 importation of resins and
should apply.40 Citing the ruling of this Court in Collector of calcium bicarbonate is based on competent evidence and the law;
Internal Revenue v. Benipayo,41 the CA ruled that the and (c) the total amount of deficiency taxes due from the
assessments were unlawful because they were based on hearsay respondent for 1987, if any.
evidence. The CA also ruled that the respondent was deprived of
its right to due process of law. On the first issue, the respondent points out that the petition
raises both questions of facts and law which cannot be the
The CA added that the CTA should not have just brushed aside subject of an appeal by certiorari under Rule 45 of the Rules of
the legal requisites provided for under the pertinent provisions of Court. The respondent notes that the petition is defective because
the Rules of Court in the matter of the admissibility of public the verification and the certification against forum shopping were
documents, considering that substantive rules of evidence should not signed by the petitioner herself, but only by the Regional
not be disregarded. It also ruled that the certifications made by Director of the BIR. The respondent submits that the petitioner

42
CASES ON EVIDENCE

should have filed a motion for reconsideration with the CA before his motion for reconsideration filed in due time. (Emphasis
filing the instant petition for review.43 supplied)

We find and so rule that the petition is sufficient in form. A The conjunctive "or" clearly indicates that the 15-day
verification and certification against forum shopping signed by reglementary period for the filing of a petition for certiorari under
the Regional Director constitutes sufficient compliance with the Rule 45 commences either from notice of the questioned
requirements of Sections 4 and 5, Rule 7 of the Rules of Court. judgment or from notice of denial of the appellant’s motion for
Under Section 10 of the NIRC of 1997,44 the Regional Director reconsideration. A prior motion for reconsideration is not
has the power to administer and enforce internal revenue laws, indispensable for a petition for review on certiorari under Rule 45
rules and regulations, including the assessment and collection of to prosper. …47
all internal revenue taxes, charges and fees. Such power is broad
enough to vest the Revenue Regional Director with the authority While Rule 45 of the Rules of Court provides that only questions
to sign the verification and certification against forum shopping in of law may be raised by the petitioner and resolved by the Court,
behalf of the Commissioner of Internal Revenue. There is no other under exceptional circumstances, the Court may take cognizance
person in a better position to know the collection cases filed thereof and resolve questions of fact. In this case, the findings
under his jurisdiction than the Revenue Regional Director. and conclusion of the CA are inconsistent with those of the CTA,
not to mention those of the Commissioner of Internal Revenue.
Moreover, under Revenue Administrative Order No. 5-83,45 the The issues raised in this case relate to the propriety and the
Regional Director is authorized to sign all pleadings filed in correctness of the tax assessments made by the petitioner against
connection with cases referred to the Revenue Regions by the the respondent, as well as the propriety of the application of
National Office which, otherwise, require the signature of the Section 16, paragraph (b) of the 1977 NIRC, as amended by Pres.
petitioner. Decree Nos. 1705, 1773, 1994 and Executive Order No. 273, in
relation to Section 3, Rule 132 of the Rules of Evidence. There is
We do not agree with the contention of the respondent that a also an imperative need for the Court to resolve the threshold
motion for reconsideration ought to have been filed before the factual issues to give justice to the parties, and to determine
filing of the instant petition. A motion for reconsideration of the whether the CA capriciously ignored, misunderstood or
decision of the CA is not a condition sine qua non for the filing of misinterpreted cogent facts and circumstances which, if
a petition for review under Rule 45. As we held in Almora v. Court considered, would change the outcome of the case.
of Appeals:46
On the second issue, the petitioner asserts that since the
Rule 45, Sec. 1 of the Rules of Court, however, distinctly provides respondent refused to cooperate and show its 1987 books of
that: account and other accounting records, it was proper for her to
resort to the best evidence obtainable – the photocopies of the
A party may appeal by certiorari from a judgment of the Court of import entries in the Bureau of Customs and the respondent’s
Appeals, by filing with the Supreme Court a petition for certiorari financial statement filed with the SEC.48 The petitioner
within fifteen (15) days from notice of judgment, or of the denial of maintains that these import entries were admissible as secondary
evidence under the best evidence obtainable rule, since they were

43
CASES ON EVIDENCE

duly authenticated by the Bureau of Customs officials who were not properly authenticated, pursuant to the provisions of
processed the documents and released the cargoes after payment Sections 2457 and 2558 of Rule 132 of the Rules of Court. It
of the duties and taxes due.49 Further, the petitioner points out avers that while the CTA is not bound by the technical rules of
that under the best evidence obtainable rule, the tax return is not evidence, it is bound by substantial rules.59 The respondent
important in computing the tax deficiency.50 points out that the petitioner did not even secure a certification of
the fact of loss of the original documents from the custodian of
The petitioner avers that the best evidence obtainable rule under the import entries. It simply relied on the report of the EIIB
Section 16 of the 1977 NIRC, as amended, legally cannot be agents that the import entry documents were no longer available
equated to the best evidence rule under the Rules of Court; nor because they were eaten by termites. The respondent posits that
can the best evidence rule, being procedural law, be made strictly the two collectors of the Bureau of Customs never authenticated
operative in the interpretation of the best evidence obtainable rule the xerox copies of the import entries; instead, they only issued
which is substantive in character.51 The petitioner posits that the certifications stating therein the import entry numbers which
CTA is not strictly bound by technical rules of evidence, the were processed by their office and the date the same were
reason being that the quantum of evidence required in the said released.60
court is merely substantial evidence.52
The respondent argues that it was not necessary for it to show the
Finally, the petitioner avers that the respondent has the burden correct assessment, considering that it is questioning the
of proof to show the correct assessments; otherwise, the assessments not only because they are erroneous, but because
presumption in favor of the correctness of the assessments made they were issued without factual basis and in patent violation of
by it stands.53 Since the respondent was allowed to explain its the assessment procedures laid down in the NIRC of 1977, as
side, there was no violation of due process.54 amended.61 It is also pointed out that the petitioner failed to use
the tax returns filed by the respondent in computing the
The respondent, for its part, maintains that the resort to the best deficiency taxes which is contrary to law;62 as such, the
evidence obtainable method was illegal. In the first place, the deficiency assessments constituted deprivation of property
respondent argues, the EIIB agents are not duly authorized to without due process of law.63
undertake examination of the taxpayer’s accounting records for
internal revenue tax purposes. Hence, the respondent’s failure to Central to the second issue is Section 16 of the NIRC of 1977, as
accede to their demands to show its books of accounts and other amended,64 which provides that the Commissioner of Internal
accounting records cannot justify resort to the use of the best Revenue has the power to make assessments and prescribe
evidence obtainable method.55 Secondly, when a taxpayer fails to additional requirements for tax administration and enforcement.
submit its tax records upon demand by the BIR officer, the Among such powers are those provided in paragraph (b) thereof,
remedy is not to assess him and resort to the best evidence which we quote:
obtainable rule, but to punish the taxpayer according to the
provisions of the Tax Code.56 (b) Failure to submit required returns, statements, reports and
other documents. – When a report required by law as a basis for
In any case, the respondent argues that the photocopies of import the assessment of any national internal revenue tax shall not be
entries cannot be used in making the assessment because they forthcoming within the time fixed by law or regulation or when

44
CASES ON EVIDENCE

there is reason to believe that any such report is false, incomplete to produce such books, papers, records, or other data, and to give
or erroneous, the Commissioner shall assess the proper tax on testimony;
the best evidence obtainable.
(4) To take such testimony of the person concerned, under oath,
In case a person fails to file a required return or other document as may be relevant or material to such inquiry; …66
at the time prescribed by law, or willfully or otherwise files a false
or fraudulent return or other document, the Commissioner shall The "best evidence" envisaged in Section 16 of the 1977 NIRC, as
make or amend the return from his own knowledge and from amended, includes the corporate and accounting records of the
such information as he can obtain through testimony or taxpayer who is the subject of the assessment process, the
otherwise, which shall be prima facie correct and sufficient for all accounting records of other taxpayers engaged in the same line of
legal purposes.65 business, including their gross profit and net profit sales.67 Such
evidence also includes data, record, paper, document or any
This provision applies when the Commissioner of Internal evidence gathered by internal revenue officers from other
Revenue undertakes to perform her administrative duty of taxpayers who had personal transactions or from whom the
assessing the proper tax against a taxpayer, to make a return in subject taxpayer received any income; and record, data,
case of a taxpayer’s failure to file one, or to amend a return document and information secured from government offices or
already filed in the BIR. agencies, such as the SEC, the Central Bank of the Philippines,
the Bureau of Customs, and the Tariff and Customs Commission.
The petitioner may avail herself of the best evidence or other
information or testimony by exercising her power or authority The law allows the BIR access to all relevant or material records
under paragraphs (1) to (4) of Section 7 of the NIRC: and data in the person of the taxpayer. It places no limit or
condition on the type or form of the medium by which the record
(1) To examine any book, paper, record or other data which may subject to the order of the BIR is kept. The purpose of the law is
be relevant or material to such inquiry; to enable the BIR to get at the taxpayer’s records in whatever
form they may be kept. Such records include computer tapes of
(2) To obtain information from any office or officer of the national the said records prepared by the taxpayer in the course of
and local governments, government agencies or its business.68 In this era of developing information-storage
instrumentalities, including the Central Bank of the Philippines technology, there is no valid reason to immunize companies with
and government owned or controlled corporations; computer-based, record-keeping capabilities from BIR scrutiny.
The standard is not the form of the record but where it might
(3) To summon the person liable for tax or required to file a shed light on the accuracy of the taxpayer’s return.
return, or any officer or employee of such person, or any person
having possession, custody, or care of the books of accounts and In Campbell, Jr. v. Guetersloh,69 the United States (U.S.) Court
other accounting records containing entries relating to the of Appeals (5th Circuit) declared that it is the duty of the
business of the person liable for tax, or any other person, to Commissioner of Internal Revenue to investigate any
appear before the Commissioner or his duly authorized circumstance which led him to believe that the taxpayer had
representative at a time and place specified in the summons and taxable income larger than reported. Necessarily, this inquiry

45
CASES ON EVIDENCE

would have to be outside of the books because they supported the ruled that where the accuracy of a taxpayer’s return is being
return as filed. He may take the sworn testimony of the taxpayer; checked, the government is entitled to use the original records
he may take the testimony of third parties; he may examine and rather than be forced to accept purported copies which present
subpoena, if necessary, traders’ and brokers’ accounts and books the risk of error or tampering.74
and the taxpayer’s book accounts. The Commissioner is not
bound to follow any set of patterns. The existence of unreported In Collector of Internal Revenue v. Benipayo,75 the Court ruled
income may be shown by any practicable proof that is available in that the assessment must be based on actual facts. The rule
the circumstances of the particular situation. Citing its ruling in assumes more importance in this case since the xerox copies of
Kenney v. Commissioner,70 the U.S. appellate court declared that the Consumption Entries furnished by the informer of the EIIB
where the records of the taxpayer are manifestly inaccurate and were furnished by yet another informer. While the EIIB tried to
incomplete, the Commissioner may look to other sources of secure certified copies of the said entries from the Bureau of
information to establish income made by the taxpayer during the Customs, it was unable to do so because the said entries were
years in question.71 allegedly eaten by termites. The Court can only surmise why the
EIIB or the BIR, for that matter, failed to secure certified copies of
We agree with the contention of the petitioner that the best the said entries from the Tariff and Customs Commission or from
evidence obtainable may consist of hearsay evidence, such as the the National Statistics Office which also had copies thereof. It
testimony of third parties or accounts or other records of other bears stressing that under Section 1306 of the Tariff and
taxpayers similarly circumstanced as the taxpayer subject of the Customs Code, the Consumption Entries shall be the required
investigation, hence, inadmissible in a regular proceeding in the number of copies as prescribed by regulations.76 The
regular courts.72 Moreover, the general rule is that Consumption Entry is accomplished in sextuplicate copies and
administrative agencies such as the BIR are not bound by the quadruplicate copies in other places. In Manila, the six copies are
technical rules of evidence. It can accept documents which distributed to the Bureau of Customs, the Tariff and Customs
cannot be admitted in a judicial proceeding where the Rules of Commission, the Declarant (Importer), the Terminal Operator,
Court are strictly observed. It can choose to give weight or and the Bureau of Internal Revenue. Inexplicably, the
disregard such evidence, depending on its trustworthiness. Commissioner and the BIR personnel ignored the copy of the
Consumption Entries filed with the BIR and relied on the
However, the best evidence obtainable under Section 16 of the photocopies supplied by the informer of the EIIB who secured the
1977 NIRC, as amended, does not include mere photocopies of same from another informer. The BIR, in preparing and issuing
records/documents. The petitioner, in making a preliminary and its preliminary and final assessments against the respondent,
final tax deficiency assessment against a taxpayer, cannot anchor even ignored the records on the investigation made by the District
the said assessment on mere machine copies of Revenue officers on the respondent’s importations for 1987.
records/documents. Mere photocopies of the Consumption
Entries have no probative weight if offered as proof of the The original copies of the Consumption Entries were of prime
contents thereof. The reason for this is that such copies are mere importance to the BIR. This is so because such entries are under
scraps of paper and are of no probative value as basis for any oath and are presumed to be true and correct under penalty of
deficiency income or business taxes against a taxpayer. Indeed, in falsification or perjury. Admissions in the said entries of the
United States v. Davey,73 the U.S. Court of Appeals (2nd Circuit)

46
CASES ON EVIDENCE

importers’ documents are admissions against interest and foundation, meaning it is arbitrary and capricious. Where the BIR
presumptively correct.77 has come out with a "naked assessment," i.e., without any
foundation character, the determination of the tax due is without
In fine, then, the petitioner acted arbitrarily and capriciously in rational basis.82 In such a situation, the U.S. Court of Appeals
relying on and giving weight to the machine copies of the ruled83 that the determination of the Commissioner contained in
Consumption Entries in fixing the tax deficiency assessments a deficiency notice disappears. Hence, the determination by the
against the respondent. CTA must rest on all the evidence introduced and its ultimate
determination must find support in credible evidence.
The rule is that in the absence of the accounting records of a
taxpayer, his tax liability may be determined by estimation. The The issue that now comes to fore is whether the tax deficiency
petitioner is not required to compute such tax liabilities with assessment against the respondent based on the certified copies
mathematical exactness. Approximation in the calculation of the of the Profit and Loss Statement submitted by the respondent to
taxes due is justified. To hold otherwise would be tantamount to the SEC in 1987 and 1988, as well as certifications of Tomas and
holding that skillful concealment is an invincible barrier to Danganan, is arbitrary, capricious and illegal. The CTA ruled that
proof.78 However, the rule does not apply where the estimation is the respondent failed to overcome the prima facie correctness of
arrived at arbitrarily and capriciously.79 the tax deficiency assessment issued by the petitioner, to wit:

We agree with the contention of the petitioner that, as a general The issue should be ruled in the affirmative as petitioner has
rule, tax assessments by tax examiners are presumed correct and failed to rebut the validity or correctness of the aforementioned
made in good faith. All presumptions are in favor of the tax assessments. It is incongruous for petitioner to prove its
correctness of a tax assessment. It is to be presumed, however, cause by simply drawing an inference unfavorable to the
that such assessment was based on sufficient evidence. Upon the respondent by attacking the source documents (Consumption
introduction of the assessment in evidence, a prima facie case of Entries) which were the bases of the assessment and which were
liability on the part of the taxpayer is made.80 If a taxpayer files a certified by the Chiefs of the Collection Division, Manila
petition for review in the CTA and assails the assessment, the International Container Port and the Port of Manila, as having
prima facie presumption is that the assessment made by the BIR been processed and released in the name of the petitioner after
is correct, and that in preparing the same, the BIR personnel payment of duties and taxes and the duly certified copies of
regularly performed their duties. This rule for tax initiated suits is Financial Statements secured from the Securities and Exchange
premised on several factors other than the normal evidentiary Commission. Any such inference cannot operate to relieve
rule imposing proof obligation on the petitioner-taxpayer: the petitioner from bearing its burden of proof and this Court has no
presumption of administrative regularity; the likelihood that the warrant of absolution. The Court should have been persuaded to
taxpayer will have access to the relevant information; and the grant the reliefs sought by the petitioner should it have presented
desirability of bolstering the record-keeping requirements of the any evidence of relevance and competence required, like that of a
NIRC.81 certification from the Bureau of Customs or from any other
agencies, attesting to the fact that those consumption entries did
However, the prima facie correctness of a tax assessment does not not really belong to them.
apply upon proof that an assessment is utterly without

47
CASES ON EVIDENCE

The burden of proof is on the taxpayer contesting the validity or entries which are not admissible in evidence. On this issue, it
correctness of an assessment to prove not only that the must be considered that in letters dated August 7 and 22, 1990,
Commissioner of Internal Revenue is wrong but the taxpayer is the Chief and Acting Chief of the Collection Division of the Manila
right (Tan Guan v. CTA, 19 SCRA 903), otherwise, the International Container Port and Port of Manila, respectively,
presumption in favor of the correctness of tax assessment stands certified that the enumerated consumption entries were filed,
(Sy Po v. CTA, 164 SCRA 524). The burden of proving the illegality processed and released from the port after payment of duties and
of the assessment lies upon the petitioner alleging it to be so. In taxes. It is noted that the certification does not touch on the
the case at bar, petitioner miserably failed to discharge this genuineness, authenticity and correctness of the consumption
duty.84 entries which are all xerox copies, wherein the figures therein
appearing may have been tampered which may render said
We are not in full accord with the findings and ratiocination of the documents inadmissible in evidence, but for tax purposes, it has
CTA. Based on the letter of the petitioner to the respondent dated been held that the Commissioner is not required to make his
December 10, 1993, the tax deficiency assessment in question determination (assessment) on the basis of evidence legally
was based on (a) the findings of the agents of the EIIB which was admissible in a formal proceeding in Court (Mertens, Vol. 9, p.
based, in turn, on the photocopies of the Consumption Entries; 214, citing Cohen v. Commissioner). A statutory notice may be
(b) the Profit and Loss Statements of the respondent for 1987 and based in whole or in part upon admissible evidence (Llorente v.
1988; and (c) the certifications of Tomas and Danganan dated Commissioner, 74 TC 260 (1980); Weimerskirch v. Commissioner,
August 7, 1990 and August 22, 1990: 67 TC 672 (1977); and Rosano v. Commissioner, 46 TC 681
(1966). In the case also of Weimerskirch v. Commissioner (1977),
In reply, please be informed that after a thorough evaluation of the assessment was given due course in the presence of
the attending facts, as well as the laws and jurisprudence admissible evidence as to how the Commissioner arrived at his
involved, this Office holds that you are liable to the assessed determination, although there was no admissible evidence with
deficiency taxes. The conclusion was arrived at based on the respect to the substantial issue of whether the taxpayer had
findings of agents of the Economic Intelligence & Investigation unreported or undeclared income from narcotics sale. …85
Bureau (EIIB) and of our own examiners who have painstakingly
examined the records furnished by the Bureau of Customs and Based on a Memorandum dated October 23, 1990 of the IIPO, the
the Securities & Exchange Commission (SEC). The examination source documents for the actual cost of importation of the
conducted disclosed that while your actual sales for 1987 respondent are the machine copies of the Consumption Entries
amounted to P110,731,559.00, you declared for taxation from the informer which the IIPO claimed to have been certified
purposes, as shown in the Profit and Loss Statements, the sum of by Tomas and Danganan:
P47,698,569.83 only. The difference, therefore, of P63,032,989.17
constitutes as undeclared or unrecorded sales which must be The source documents for the total actual cost of importations,
subjected to the income and sales taxes. abovementioned, were the different copies of Consumption
Entries, Series of 1987, filed by subject with the Bureau of
You also argued that our assessment has no basis since the Customs, marked Annexes "F-1" to "F-68." The total cost of
alleged amount of underdeclared importations were lifted from importations is the sum of the Landed Costs and the Advance
uncertified or unauthenticated xerox copies of consumption Sales Tax as shown in the annexed entries. These entries were

48
CASES ON EVIDENCE

duly authenticated as having been processed and released, after Danganan and the machine copies of the Consumption Entries,
payment of the duties and taxes due thereon, by the Chief, only 36 of the entry numbers of such copies are included in the
Collection Division, Manila International Container Port, dated said certifications; the entry numbers of the rest of the machine
August 7, 1990, "Annex-G," and the Port of Manila, dated August copies of the Consumption Entries are not found therein.
22, 1990, "Annex-H." So, it was established that subject-
importations, mostly resins, really belong to HANTEX TRADING Even if the Court would concede to the petitioner’s contention
CO., INC.86 that the certification of Tomas and Danganan authenticated the
machine copies of the Consumption Entries referred to in the
It also appears on the worksheet of the IIPO, as culled from the certification, it appears that the total cost of importations
photocopies of the Consumption Entries from its informer, that inclusive of advance sales tax is only P64,324,953.00 – far from
the total cost of the respondent’s importation for 1987 was the amount of P105,716,527.00 arrived at by the EIIB and the
P105,761,527.00. Per the report of Torres and Filamor, they also BIR,88 or even the amount of P110,079,491.61 arrived at by
relied on the photocopies of the said Consumption Entries: Deputy Commissioner Deoferio, Jr.89 As gleaned from the
certifications of Tomas and Danganan, the goods covered by the
The importations made by taxpayer verified by us from the Consumption Entries were released by the Bureau of Customs,
records of the Bureau of Customs and xerox copies of which are from which it can be presumed that the respondent must have
hereto attached shows the big volume of importations made and paid the taxes due on the said importation. The petitioner did not
not declared in the income tax return filed by taxpayer. adduce any documentary evidence to prove otherwise.

Based on the above findings, it clearly shows that a prima facie Thus, the computations of the EIIB and the BIR on the quantity
case of fraud exists in the herein transaction of the taxpayer, as a and costs of the importations of the respondent in the amount of
consequence of which, said transaction has not been possibly P105,761,527.00 for 1987 have no factual basis, hence, arbitrary
entered into the books of accounts of the subject taxpayer.87 and capricious. The petitioner cannot rely on the presumption
that she and the other employees of the BIR had regularly
In fine, the petitioner based her finding that the 1987 importation performed their duties. As the Court held in Collector of Internal
of the respondent was underdeclared in the amount of Revenue v. Benipayo,90 in order to stand judicial scrutiny, the
P105,761,527.00 on the worthless machine copies of the assessment must be based on facts. The presumption of the
Consumption Entries. Aside from such copies, the petitioner has correctness of an assessment, being a mere presumption, cannot
no other evidence to prove that the respondent imported goods be made to rest on another presumption.
costing P105,761,527.00. The petitioner cannot find solace on the
certifications of Tomas and Danganan because they did not Moreover, the uncontroverted fact is that the BIR District
authenticate the machine copies of the Consumption Entries, and Revenue Office had repeatedly examined the 1987 books of
merely indicated therein the entry numbers of Consumption accounts of the respondent showing its importations, and found
Entries and the dates when the Bureau of Customs released the that the latter had minimal business tax liability. In this case, the
same. The certifications of Tomas and Danganan do not even presumption that the District Revenue officers performed their
contain the landed costs and the advance sales taxes paid by the duties in accordance with law shall apply. There is no evidence on
importer, if any. Comparing the certifications of Tomas and record that the said officers neglected to perform their duties as

49
CASES ON EVIDENCE

mandated by law; neither is there evidence aliunde that the

contents of the 1987 and 1988 Profit and Loss Statements SO ORDERED.
submitted by the respondent with the SEC are incorrect.

Admittedly, the respondent did not adduce evidence to prove its

correct tax liability. However, considering that it has been
established that the petitioner’s assessment is barren of factual
basis, arbitrary and illegal, such failure on the part of the
respondent cannot serve as a basis for a finding by the Court that
it is liable for the amount contained in the said assessment;
otherwise, the Court would thereby be committing a travesty.

On the disposition of the case, the Court has two options, namely,
to deny the petition for lack of merit and affirm the decision of the
CA, without prejudice to the petitioner’s issuance of a new
assessment against the respondent based on credible evidence;
or, to remand the case to the CTA for further proceedings, to
enable the petitioner to adduce in evidence certified true copies or
duplicate original copies of the Consumption Entries for the
respondent’s 1987 importations, if there be any, and the correct
tax deficiency assessment thereon, without prejudice to the right
of the respondent to adduce controverting evidence, so that the
matter may be resolved once and for all by the CTA. In the higher 22. Republic v. Mupas
interest of justice to both the parties, the Court has chosen the
latter option. After all, as the Tax Court of the United States Remedial Law; Evidence; Hearsay Evidence Rule; A hearsay
emphasized in Harbin v. Commissioner of Internal Revenue,91 evidence has no probative value and should be disregarded
taxation is not only practical; it is vital. The obligation of good whether objected to or not.—PIATCO cannot rely on the affidavit
faith and fair dealing in carrying out its provision is reciprocal of Atty. Tolentino who allegedly identified the photocopied
and, as the government should never be over-reaching or documents supporting attendant costs. The Court observed that
tyrannical, neither should a taxpayer be permitted to escape the alleged affidavit of Atty. Tolentino does not have any signature
payment by the concealment of material facts. above his name as the affiant. Hence, his affidavit cannot be said
to have at least substantially complied with the requirements laid
IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. down in Sections 3(a), (b), and/or (d) of Rule 130 of the Rules of
The Decision of the Court of Appeals is SET ASIDE. The records Court for the admissibility of photocopies as secondary evidence.
are REMANDED to the Court of Tax Appeals for further We therefore maintain our ruling that PIATCO’s documents
proceedings, conformably with the decision of this Court. No allegedly supporting the attendant costs are hearsay evidence.
costs. With respect to the effect of the alleged non-objection of the

50
CASES ON EVIDENCE

parties to the presentation of these photocopy documents, we

have ruled in PNOC Shipping and Transport Corporation v. CA, et 1. The NAIA-IPT III Contract
al., 297 SCRA 402 (1998), that a hearsay evidence has no
probative value and should be disregarded whether objected to or 2. PIATCO
not.
3. PIATCO and the Services of Takenaka and Asahikosan
BRION, J.:
B. The Agan v. PIATCO Case, G.R. No. 155001
Before the Court are the consolidated petitions for review on
certiorari assailing the Decision dated August 22, 2013, and the 1. The Case and the Decision dated May 5, 2003
Resolution dated October 29, 2013, of the Court of Appeals (CA)
in CA-G.R. CV No. 98029; and the petition for certiorari assailing 2. The Motion for Reconsideration and the Resolution dated
the May 3, 2007; May 18, 2008; and January 7, 2008 Decision of January 21, 2004
the Regional Trial Court (RTC) of Pasay City, Branch 117, in Civil
Case No. 04-0876.1 C. The Expropriation Case, Civil Case No. 04-0876

In CA-G.R. CV No. 98029, the CA ordered petitioners Republic of D. The Republic v. Gingoyon Case, G.R. No. 166429
the Philippines, Department of Transportation and
Communications, and Manila International Airport Authority 1. The Case and the Decision dated December 19, 2005
(Government for brevity) to pay the Philippine International
Airport Terminals Co., Inc. (PIATCO) the amount of 2. The Motion for Reconsideration and the Resolution dated
$371,426,688.24 with interest at 6%per annum as just February 1, 2006
compensation for the expropriation of the Ninoy Aquino
International Airport Passenger Terminal III (NAIA-IPT III).2 E. Proceedings in Civil Case No. 04-0876 after the Finality of the
Gingoyon Case
In Civil Case No. 04-0876, the RTC appointed DG Jones and
Partners as an independent appraiser of the NAIA-IPT III, and 1. The Appointment of DG Jones and Partners as an Independent
ordered the Government to submit a Certificate of Availability of Appraiser
Funds to cover DG Jones and Partners' appraisal fee of
$1,900,000.00. 2. The BOC's Expenses

For ease of presentation, the Court's discussion shall be under F. The Parties and the BOC's Appraisal of the NAIA-IPT III
the following structure:
1. The Government's Appraisal
I. The Factual Antecedents
2. PIATCO's Appraisal
A. The NAIA-IPT IIII Contract and PIATCO

51
CASES ON EVIDENCE

3. Takenaka and Asahikosan's Appraisal A. G.R. Nos. 209917, 209696, and 209731

4. The BOC's Appraisal 1. The parties were afforded procedural due process despite their
non-receipt of the BOC Final Report prior to the promulgation of
II. The RTC Rulings in Civil Case No. 04-0876 the May 23, 2011 Decision in Civil Case No. 04-0876.

A. The Main Decision 2. Framework: Eminent domain is an inherent power of the State

B. The RTC's Interlocutory Order on the Validity of the Escrow 2.a. The power of eminent domain is a fundamental state power
Account that is inseparable from sovereignty

1. The Government and the Creation of an Escrow Account for the 2.b. Just compensation is the full and fair equivalent of the
Payment of Just Compensation property taken from the owner by the condemn or

2. The Omnibus Order dated October 11, 2011 2.b.1. Fair market value is the general standard of value in
determining just compensation
III. The CA Rulings
2.b.2 Replacement cost is a different standard of value from fair
A. CA-G.R. CV No. 98029 market value

B. CA-G.R. SP. No. 123221 2.b.3. Replacement cost is only one of the standards that the
Court should consider in appraising the NAIA-IPT III
IV. The Action to Enforce the London Awards, Civil Case No. 06-
171 2.b.4. The use of depreciated replacement cost method is
consistent with the principle that the property owner should be
V. The Parties' Positions compensated for his actual loss

A. The Government's Position 3. Construction cost of the NAIA-IPT III

B. PIATCO's Position 3.a. The base valuation of the NAIA-IPT III

C. Takenaka and Asahikosan's Position 3.b. Structural defects on the NAIA-IPT III

VI. The Issues 3.b.1. The Court cannot consider the additional evidence
submitted by Takenaka and Asahikosan before the Court of
VII. The Court's Rulings Appeals

52
CASES ON EVIDENCE

3.b.2. Equiponderance of evidence on the alleged structural

defects of the NAIA-IPT III favors PIATCO, Takenaka, and 9. PIATCO as the Proper Recipient of Just Compensation
Asahikosan
9.a. Takenaka and Asahikosan's intervention in the case as
3.c. The unnecessary areas unpaid subcontractors is proper

4. Attendant cost of the NAIA-IPT III 9.b. The property owner is entitled to just compensation

4.a. PIATCO's attendant cost 9.c. A final disposition in the eminent domain case with respect to
the order of payment to a particular person shall be final and
4.b. The BOC and the RTC's attendant cost executory

4.c. The Government's attendant cost 9.d. The determination of whether the NAIA-IPT III shall be
burdened by liens and mortgages even after the full payment of
5. Deductions to the Replacement Cost of the NAIA-IPT III just compensation is premature

5.a. Depreciation should be deducted from the replacement cost 10. The exercise of eminent domain from the perspective of
"taking."
5.b. Rectification for contract compliance should not be deducted
from the replacement cost 10.a. The Government may take the property for public purpose
or public use upon the issuance and effectivity of the writ of
6. Adjustments to the Replacement Cost possession

6.a. The replacement cost should be adjusted to December 2004 B. G.R. No. 181892
values
1. The issue on the appointment of an independent appraiser is
7. Interests, Fruits, and Income already moot and academic

7.a. Computation of Interests I. The Factual Antecedents

7.b. PIATCO is not entitled to the fruits and income of the NAIA- A. The NAIA-IPT III Contract and PIATCO
IPT III
1. The NAIA-IPT III Contract
8. The BOC's Expenses
On October 5, 1994, Asia's Emerging Dragon Corp. (AEDC)
8.a. Takenaka and Asahikosan should not share in the BOC's submitted an unsolicited proposal to the Government - through
expenses the Department of Transportation and Communications

53
CASES ON EVIDENCE

(DOTC)and the Manila International Airport Authority (MIAA)- for Agreement. The Government and PIATCO likewise entered into a
the construction and development of the NAIA-IPT III under a series of supplemental agreements, namely: the First Supplement
build-operate-and-transfer (BOT) arrangement. The DOTC and signed on August 27, 1999; the Second Supplement signed on
the MIAA invited the public to submit competitive and September 4, 2000; and the Third Supplement signed on June
comparative proposals to AEDC's unsolicited proposal in 22, 2001.8
accordance with the BOT Law3 and its implementing rules.4
Under the 1997 Concession Agreement, the ARCA and the
2. PIATCO Supplemental Agreement (for brevity, PIATCO contracts), the
Government authorized PIATCO to build, operate, and maintain
On September 20, 1996, Paircargo Consortium - composed of the NAIA-IPT III during the concession period of twenty-five (25)
People's Air Cargo and Warehousing Co., Inc. (Paircargo), years.9
Philippine Air and Grounds Services, Inc.(PAGS), and Security
Bank Corporation (Security Bank)- submitted its competitive 3. PIATCO and the Services of Takenaka and Asahikosan
proposal to the Prequalification Bids and Awards Committee
(PBAC).5 On March 31, 2000, PIATCO engaged the services of Takenaka, a
local branch of a foreign corporation duly organized under the
Both AEDC and Paircargo Consortium offered to build the NAIA- laws of Japan and doing business in the Philippines, for the
IPT III for at least $350 million at no cost to the Government and construction of the NAIA-IPT III under an Onshore Construction
to pay the Government: 5% share in gross revenues for the first Contract.10
five years of operation, 7.5% share in gross revenues for the next
ten years of operation, and 10% share in gross revenues for the On the same date, PIATCO, through an Offshore Procurement
last ten years of operation. However, Paircargo Consortium Contract,11 likewise contracted the services of Asahikosan, a
offered to pay the Government a total of ₱17.75 billion as foreign corporation duly organized under the laws of Japan, for
guaranteed payment for 27 years while AEDC offered to pay the the design, manufacture, purchase, test and delivery of the
Government a total of ₱135 million for the same period.6 Plant12 in the NAIA-IPT III.

After finding that Paircargo Consortium submitted a bid superior In May 2002, PIATCO defaulted on its obligation to pay Takenaka
to the AEDC's unsolicited proposal and after the AEDC's failure to and Asahikosan pursuant to their respective contracts. To settle
match the competitive bid, the DOTC awarded, through a notice the problem, Takenaka and Asahikosan agreed to defer PIATCO's
of award, the NAIA-IPT III project to the Paircargo Consortium payments until June 2003, conditioned on their receipt of
(that later organized itself as PIATCO).7 adequate security from PIATCO as stipulated in the Fourth
Supplemental Agreement (relating to the Onshore Construction
On July 12, 1997, the Government executed a Concession Contract)13 and the Fourth Supplement Agreement (relating to
Agreement with PIATCO for the construction, development, and the Offshore Procurement Contract), respectively.14
operation of the NAIA-IPT III under a build-operate-transfer
scheme. On November 26, 1998, the Amended and Restated On November 29, 2002, President Gloria Macapagal Arroyo
Concession Agreement (ARCA) superseded the 1997 Concession declared in her speech that the Government would not honor the

54
CASES ON EVIDENCE

PIATCO contracts. On the same day, Takenaka and Asahikosan resolution that the Government should first pay PIATCO as a
notified PIATCO that they were suspending the construction of prerequisite before taking over the NAIA-IPT III, to wit:
the NAIA-IPT III for PIATCO's failure to provide adequate
security.15 This Court, however, is not unmindful of the reality that the
structures comprising the NAIA-IPT III facility are almost
B. The Agan v. PIATCO Case, G.R. No. 155001 complete and that funds have been spent by PIATCO in their
construction. For the Government to take over the said facility, it
1. The Case and the Decision dated May 5, 2003 has to compensate respondent PIATCO as builder of the said
structures. The compensation must be just and in accordance
On September 17, 2002, petitioners Demosthenes Agan, et al., with law and equity for the Government cannot unjustly enrich
asked the Court to nullify the PIATCO contracts, and to prohibit itself at the expense of PIATCO and its investors.20 (Underlines
the DOTC and the MIAA from implementing these contracts for and emphases ours)
being contrary to law. The case, entitled Agan v. PIATCO, was
docketed as G.R. No. 155001.16 C. The Expropriation Case, Civil Case No. 04-087621

On May 5, 2003, the Court nullified the PIATCO contracts after On December 21, 2004, the Government filed a complaint for
finding that Paircargo Consortium (that later incorporated into expropriation of the NAIA-IPT III before the RTC of Pasay, Branch
PIATCO) was not a duly pre-qualified bidder for failure to meet 117. The Government informed the RTC that it had deposited
the minimum equity requirements for the NAIA-IPT III project, as with the Land Bank of the Philippines (Land Bank)the amount of
required under the BOT Law and the Bid Documents. The Court ₱3,002,125,000.00, representing the NAIA-IPT III's assessed
also ruled that Security Bank(member of the Paircargo value.22
Consortium) invested its entire net worth in a single undertaking
or enterprise in gross violation of Section 21-B of the General On the same day, the RTC issued a writ of possession in favor of
Banking Act(which limits a commercial bank's equity investment, the Government. Citing City of Manila v. Serrano,23 the RTC held
whether allied or non-allied, to fifteen percent (15%) of its net that that it had the ministerial duty to issue a writ of possession
worth).17 The Court further found that the PIATCO contracts upon: (1) the filing of the complaint for expropriation sufficient in
contained provisions that substantially departed from the draft form and substance, and (2) the Government's deposit of the
Concession Agreement. These substantial modification of the amount equivalent to the property's assessed value, pursuant to
PIATCO contracts violated the public policy for being repugnant Rule 67 of the Rules of Court.24
to the principle that all bidders must be on equal footing during
the public bidding.18 On January 4, 2005, the RTC modified its December 21, 2004
order and directed: (1) the Land Bank to immediately release to
2. The Motion for Reconsideration and the Resolution dated PIATCO the amount of US$62,343,175.7725 that would be
January 21, 2004 deducted from the just compensation; (2) the Government to
submit to the RTC a Certificate of Availability of Funds for the
We denied PIATCO, et al.'s motion for reconsideration in our payment of just compensation; and (3) the Government to
January 21, 2004 resolution.19 Significantly, we stated in the maintain and preserve the NAIA-IPT III pending the expropriation

55
CASES ON EVIDENCE

proceedings and the full payment of just compensation. The RTC On December 14, 2005, Asahikosan filed a motion for leave to
likewise prohibited the Government from performing acts of intervene in Civil Case No. 04-0876 (the expropriation case).33
ownership over the NAIA-IPT III such as awarding concessions or On the other hand, Takenaka filed a Manifestation dated
leasing any part of the NAIA-IPT III to other parties.26 December 15, 2005,34 with the attached Manifestation and
Motion dated December 14, 2005.35 Takenaka alleged that the
The Government sought reconsideration of the January 4, 2005 Government impleaded it as an additional defendant in an
Order, arguing that Rule 67 of the Rules of Court, and not RA amended complaint for expropriation of the NAIA-IPT III, but was
8974,applied to the case since the NAIA-IPT III was not a national not served summons. Takenaka thus manifested its voluntary
government infrastructure project.27 appearance before the RTC.36

RA 8974 is otherwise known as "An Act To Facilitate The Takenaka and Asahikosan informed the RTC that they had
Acquisition Of Right-Of-Way, Site Or Location For National previously filed two collection cases against PIATCO, docketed as
Government Infrastructure Projects And For Other Purposes." Claim Nos. HT-04-248 and HT-05-269, before the High Court of
Justice, Queen's Bench Division, Technology and Construction
The Government argued that under Section 2, Rule 67 of the Court in London, England, (London Court) on August 9, 2004.
Rules of Court, it shall have the right to a writ of possession upon
deposit with the authorized government depositary of an amount In both instances, the London Court ruled in their favor. The
equivalent to the assessed value of the property for purposes of dispositive part of the judgment award in Claim No. HT-04-248
taxation, which amount shall be held by the depositary subject to provides:
the orders of the court. In contrast, Section 4 of RA 8974, as a
rule, requires the Government to immediately pay the property IT IS ORDERED THAT:
owner the amount equivalent to100% of the value of the property
based on the BIR's relevant zonal valuation and the value of the 1. Judgment be entered for the First Claimant37 in the sum of
improvements/and or structures, upon the filing of the complaint 6,602,971.00 United States dollars, together with interest in the
and after due notice to the defendant. sum of 116,825,365.34 Philippine pesos up to and including 18
February 2005.
On January 7, 2005, the RTC appointed three Commissioners28
to determine just compensation without consulting the 2. Judgment be entered for the Second Claimant38 in the sum of
Government and PIATCO.29 Due to these successive adverse 8,224,236.00 United States dollars, together with interest in the
rulings, the Government sought to inhibit Judge Henrick F. sum of 2,947,564.87 United States dollars up to and including 18
Gingoyon, the RTC's presiding judge, from hearing the case.30 February 2005, being a total of 11,171,800.87 United States
(The judge was ambushed and killed on December 31, 2005.)31 dollars.

On January 10, 2005, the RTC denied the Government's urgent 3. Save for the costs of and caused by the amendment of the
motion for reconsideration and motion for inhibition.32 particulars of claim, which will be the subject of a separate Order,
the Defendant do pay the First Claimant's and the Second

56
CASES ON EVIDENCE

Claimant's costs in the action, to be subject to detailed and Motion as a motion to intervene and allowed Takenaka and
assessment if not agreed. Asahikosan to intervene in the case as PIATCO's creditors.45

DATED this 18th day of February 2005.39 Pending the RTC's resolution of Takenaka and Asahikosan's
motions for leave to intervene in the expropriation case, the
On the other hand, the dispositive part of the judgment award in Government went directly to the Court seeking Judge Gingoyon's
Claim No. HT-05-269 states: inhibition from the case; the nullification of the order of release of
the sum of $62.3 million to PIATCO; and the nullification as well
IT IS ORDERED THAT: of the appointment of the commissioners.

1. Judgment be entered for the First Claimant in the sum of D. The Republic v. Gingoyon Case, G.R. No. 166429
21,688,012.18 United States dollars, together with interest in the
sum of 6,052,805.83 United States dollars. 1. The Case and the Decision dated December 19, 2005

2. Judgment be entered for the Second Claimant in the sum of On January 12, 2005, the Government, et al., filed a petition for
30,319,284.36 United States dollars, together with interest in the certiorari with the Court assailing the validity of the January 4, 7,
sum of 5,442,628.26 United States dollars. and 10, 2005 orders of the RTC in the expropriation case.46 The
case, entitled Republic v. Gingoyon, was docketed as G.R. No.
3. The defendant to pay the Claimants' costs in the action, to be 166429.
subject to detailed assessment if not agreed.
The Government argued that the RTC should not have ordered
DATED this 2 (sic) day of December 2005.40 the release of $62.3 Million since the NAIA-IPT III's assessed value
was only ₱3 billion. Moreover, the RTC's prohibition against the
Takenaka and Asahikosan asked the RTC to: (a) hold in abeyance Government to perform acts of ownership on the NAIA-IPT III was
the release of just compensation to PIATCO until the London contrary to the essence of a writ of possession. It47 asserted that
awards are recognized and enforced in the Philippines; and (b) Rule 67 of the Rules of Court governed the expropriation of the
order that the just compensation be deposited with the RTC for NAIA-IPT III since it was not a national government infrastructure
the benefit of PIATCO's creditors.41 project. The Government likewise contended that the
commissioners' appointment was void. It claimed that it had been
During the hearing of the motions, the Government clarified that deprived of due process since it was not given the opportunity to
it neither filed an amended complaint for expropriation nor contest the appointment of the commissioners. The Government
impleaded Takenaka as a necessary party in the case.42 likewise sought Judge Gingoyon's inhibition from the case due to
his alleged manifest partiality to PIATCO.48
The RTC initially denied Takenaka and Asahikosan's respective
Motions43 in the August 8, 2006 Order, but subsequently The Court partly granted the petition and rendered the following
reconsidered its ruling.44 In a March 12, 2007 Order, the RTC rulings:
treated Takenaka's Manifestation with the attached Manifestation

57
CASES ON EVIDENCE

First, under the 2004 Resolution in Agan: (a) PIATCO must

receive payment of just compensation determined in accordance We thus observed that Section 2, Rule 67 of the Rules of Court is
with law and equity; and (b) the Government is barred from contrary to our January 21, 2004 Resolution which required the
taking over the NAIA-IPT III until just compensation is paid. Government to make prior payment of just compensation to
PIATCO before it could take over the NAIA-IPT III.
Second, RA 8974 applies in the expropriation case insofar as the
law: (a) requires the Government to immediately pay PIATCO at The Court at the same time qualified the applicability of RA 8974
least the proffered value of the NAIA-IPT III; and (b) provides to the expropriation of the NAIA-IPT III. We held that the Congress
valuation standards in determining the amount of just may legislate on the valuation standards of just compensation
compensation. and the manner of its payment since these are substantive
matters. We made clear, however, that the Congress cannot
RA 8974 is the governing law in cases where the national legislate on the procedural aspects of expropriation since this
government expropriates property for the purpose of commencing power lies with the Court. In fact, Section 14 of RA 8974 IRR
national government infrastructure projects such as the provides that Rule 67 of the Rules of Court shall apply to "all
construction of the NAIA-IPT III. However, Rule 67 of the Rules of matters regarding defenses and objections to the complaint,
Court applies in determining the assessed value and the mode of issues on uncertain ownership and conflicting claims, effects of
deposit of just compensation if the national government initiates appeal on the rights of the parties, and such other incidents
the expropriation complaint for purposes other than national affecting the complaint."
infrastructure projects.
Third, we held in abeyance the implementation of the writ of
Under both Rule 67 of the Rules of Court and RA 8974, the possession until the Government directly pays to PIATCO the
Government initiates the expropriation by filing an expropriation proffered value of ₱3 billion. The zonal valuation method under
complaint. However, the rules on the mode of deposit differ Section 4 of RA 8974 shall not apply since the Government owns
because Rule 67 of the Rules of Court merely requires the the land on which the NAIA-IPT III stands. Consequently, PIATCO
Government to deposit the assessed value of the property sought should only be paid the value of the improvements and/or
to be expropriated with an authorized government depositary structures using the replacement cost method.50 Pending the
before the issuance of a writ of possession. determination of just compensation, the Government shall pay
the sum of ₱3 billion as the provisional amount of just
In contrast, RA 8974 commands the Government to make a direct compensation because there was no expedited means by which
payment to the property owner prior to the issuance of a writ of the Government could immediately take possession of the NAIA-
possession. Under RA 8974, the payment shall be based on: (a) IPT III.
the BIR's zonal valuation in case of land; and (b)the value of the
improvements or structures under the replacement cost method. We also stated that the replacement cost method is only one of
If the completion of a government infrastructure project is of the factors to be considered in determining just compensation.
utmost urgency and importance and if there is no existing Equity should likewise be considered in determining just
valuation of the property, the implementing agency shall compensation.
immediately pay the proffered value of the property.49

58
CASES ON EVIDENCE

Fourth, we authorized the Government to perform acts essential within five days from finality of the decision in accordance with
to the operation of the NAIA-IPT III as an international airport Section 5, Rule 67 of the Rules of Court. Seventh, there was no
terminal once the writ of possession becomes effective. This ground to order Judge Gingoyon's inhibition since the
authority covers the repair, reconditioning, and improvement of Government failed to show his alleged partiality.51
the complex; maintenance of the existing facilities and equipment;
installation of new facilities and equipment; provision of services The dispositive portion of the Decision states:
and facilities pertaining to the facilitation of air traffic and
transport; and other services that are integral to a modern-day WHEREFORE, the Petition is GRANTED in PART with respect to
international airport. This is consistent with Section 4 of RA 8974 the orders dated 4 January 2005 and 10 January 2005 of the
which provides that "the court shall immediately issue to the lower court. Said orders are AFFIRMED with the following
implementing agency an order to take possession of the property MODIFICATIONS:
and start the implementation of the project" upon fulfillment of
certain conditions. 1) The implementation of the Writ of Possession dated 21
December 2005 is HELD IN ABEYANCE, pending payment by
This ruling qualified the Court's statement in its January 21, petitioners to PIATCO of the amount of Three Billion Two Million
2004 Resolution that "[f]or the Government to take over the said One Hundred Twenty Five Thousand Pesos (₱3,002,125,000.00),
facility, it has to compensate respondent PIATCO as builder of the representing the proffered value of the NAIA-IPT III facilities;
said structures." Nonetheless, we clarified that the title to the
NAIA-IPT III shall pass to the Government only upon full payment 2) Petitioners, upon the effectivity of the Writ of Possession, are
of the just compensation since the proffered value is merely a authorized [to] start the implementation of the Ninoy Aquino
provisional determination of just compensation. International Airport Pasenger Terminal III project by performing
the acts that are essential to the operation of the said
Fifth, we ordered the RTC to complete its determination of just International Airport Passenger Terminal project;
compensation within sixty (60) days from finality of our decision
since it was no longer possible for the RTC to determine just 3) RTC Branch 117 is hereby directed, within sixty (60) days from
compensation within sixty (60) days from the filing of the finality of this Decision, to determine the just compensation to be
complaint under Section 4 of RA 8974. Sixth, the RTC did not paid to PIATCO by the Government.
gravely abuse its discretion in appointing the commissioners.
Neither Rule 67 of the Rules of Court nor RA 8974 requires the The Order dated 7 January 2005 is AFFIRMED in all respects
RTC to consult the parties in the expropriation case prior to the subject to the qualification that the parties are given ten (10) days
appointment of commissioners. We also stated that Rule 67 of the from finality of this Decision to file, if they so choose, objections
Rules of Court shall apply insofar as it is consistent with RA to the appointment of the commissioners decreed therein.
8974, the IRR, and the Court's rulings in Agan.
The Temporary Restraining Order dated 14 January 2005 is
Considering that the expropriation proceedings were effectively hereby LIFTED.
suspended seven days after the appointment of the
commissioners, the parties may file their objections with the RTC No pronouncement as to costs.52

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CASES ON EVIDENCE

Rules of Court, a foreign judgment would not bind Philippine

2. The Motion for Reconsideration and the Resolution dated courts unless the judgment is recognized and enforced in this
February 1, 2006 jurisdiction. Philippine courts may annul a foreign judgment for
lack of jurisdiction, lack of notice to the party, collusion, fraud,
On January 2, 2006, the Government, et al., filed a motion for clear mistake of law or fact, or when the foreign judgment is
partial reconsideration of the Court's December 19, 2005 contrary to public policy. Even assuming that PIATCO is indeed
Decision.53 Asahikosan, Takenaka, and Rep. Salacnib F. liable to other parties, the creditors have other judicial avenues to
Baterina also filed a motion for leave to intervene and asked the ventilate and prove their claims against PIATCO.
Court's reconsideration of its December 19, 2005 Decision.54
The Court also categorically stated that PIATCO, as builder of the
The Government raised the question of who between PIATCO, on NAIA-IPT III, must first receive just compensation in accordance
the one hand, and Takenaka and Asahikosan, on the other was with law and equity before the Government may take over the
the NAIAIPT III's builder. The Government informed the Court NAIA-IPT III.
that Takenaka and Asahikosan, as the unpaid contractors in the
NAIA-IPT III project, claimed significant liens on the NAIA-IPT III. The Court likewise denied the motions for intervention for serious
The Government opined that it would end up expropriating the procedural errors. Under Section 2, Rule 19 of the Rules of Court,
NAIA-IPT III with liens and claims in excess of its actual value if the motion to intervene should be filed before the court's
the proffered value would be directly released to PIATCO. rendition of judgment, and not after the resolution of the case.
Moreover, Takenaka and Asahikosan failed to establish their legal
As PIATCO's unpaid creditors, Takenaka and Asahikosan interest in the case since their claims against PIATCO have not
intervened in the case. They relied on Mago v. Court of Appeals55 been conclusively established in this jurisdiction.56
as basis for their intervention. In that case, the Court took the
extraordinary step of allowing the motion for intervention even E. Proceedings in Civil Case No. 04-0876 after the Finality of the
after the challenged order of the trial court had already become Gingoyon Case
final. On the other hand, Rep. Baterina invoked his prerogative as
legislator and taxpayer to curtail the payment of just 1. The Appointment of DG Jones and Partners as an Independent
compensation without any appropriation in PIATCO's favor. Appraiser

The Court denied the motions and held that the alleged liens over On April 11, 2006, the RTC ordered the BOC to resume its duties.
the NAIA-IPT III have not been judicially established.Takenaka In compliance, the BOC submitted its Inception Report and
and Asahikosan were not parties to Gingoyon and did not present Inception Framework to the RTC. On April 24, 2007, the parties
their claims before the Court. The Court did not make any and the BOC conferred to set the ground rules and procedure in
declaration regarding Takenaka and Asahikosan's rights to any determining the just compensation due to the NAIA-IPT III.
form of compensation for the construction of the NAIA-IPT III.
On April 26, 2006, the Government asked the RTC to stop the
Moreover, the Court did not recognize the London awards in favor payment of ₱3 billion proffered value in view of an alleged
of Takenaka and Asahikosan. Under Section 48, Rule 39 of the supervening event - the collapse of the ceiling of the arrival lobby

60
CASES ON EVIDENCE

section of the north side of the NAIA-IPT III on March 27, 2006. test results; and (c) Gleeds International to determine the value of
The Government claimed that the collapse created a 100-square the NAIA-IPT III.62
foot hole in the ceiling and caused heavy asbestos pipes to fall on
the floor of the NAIA-IPT III. The Government likewise informed On June 20, 2006, the RTC ordered Land Bank to immediately
the Court that the MIAA requested the Association of Structural release the amount of ₱3 billion to PIATCO. The RTC ruled that
Engineers of the Philippines (ASEP)to investigate the cause of the the collapse of a portion of the NAIA-IPT III was not a supervening
collapse.57 In its Final Report dated June2006, the ASEP event that would hinder the payment of the proffered value to
identified the following factors that contributed to the collapse: PIATCO. In compliance with this order, the Government tendered
to PIATCO a ₱3 billion check on September 11, 2006. On the
a. Incomplete design coordination as shown by the absence of same day, the RTC reinstated the writ of possession in favor of
detailed shop drawings during the construction, an absence the Government.63
described as "unusual" for a BOT project of this size
Thereafter, the Government and PIATCO submitted their list of
b. Wrong choice of ceiling and wall components and fixing nominees for the appointment of an independent appraiser.64 On
materials, e.g., use of rivets instead of clips, screws or wire; use of May 3, 2007,the RTC appointed DG Jones and Partners as
furring channels instead of stronger C channels; use of wall independent appraiser.65
angles thinner than required; and
On May 18, 2007, the RTC directed the Government to submit a
c. Poor workmanship, e.g., uneven distribution and improper Certificate of Availability of Funds to cover DG Jones and
attachment of rivets, lack of ceiling supports in the presence of Partners' $1.9 Million appraisal fee.66
mechanical fixtures.58
The Government sought the reconsideration of the May 3 and 18,
The ASEP concluded that the likely cause of the collapse was the 2007 orders. The Government complained that the appointment
"syncretic effect of all these factors working over time since the of an appraiser apart from those hired by the Government would
construction of the ceiling."59 result in the unnecessary depletion of its funds since it would be
compelled to pay two appraisers.67
Upon the BOC's request,60 on May 5, 2006, the RTC ordered the
engagement of the services of an internationally accepted In response, PIATCO argued that the RTC has the inherent power
independent appraiser who shall conduct the valuation of the to appoint an independent appraiser pursuant to Section 5 (g),
NAIA-IPT III.61 Rule 135 of the Rules of Court. The RTC has wide discretion on
how it shall carry its mandate under RA 8974 and Rule67 of the
On May 23, 2006, the Government manifested that it engaged the Rules of Court.68
services of: (a) TCGI Engineer to determine the structural integrity
of NAIA-IPT III; (b) Ove Arup & Partners Massachusetts, Inc. (Ove In an order dated January 7, 2008, the RTC sustained the
Arup)to conduct a design and technical review of the NAIA-IPT III appointment of DG Jones and Partners. The RTC ruled that its
and to conduct a peer review of TCGI Engineer's methodology and power to appoint the members of the BOC under Section 5, Rule

61
CASES ON EVIDENCE

67 of the Rules of Court includes the power to appoint an a portion of the just compensation pending the conclusion of the
independent appraiser.69 enforcement proceedings was addressed to the RTC [,] and not to
the BOC."79
The Government directly challenged before the Court the May 3,
May 18, and January 7, 2008 orders in a petition for certiorari F. The Parties and the BOC's Appraisal of the NAIA-IPT III
with prayer for the issuance of a temporary restraining order
and/or a writ of preliminary injunction. The case was docketed as After the Court issued the January 9, 2008 temporary restraining
G.R. No. 181892.70 order, the parties and the BOC conducted a preliminary
conference on April 22, 2010, to adopt an alternative course of
On January 9, 2008, the Court issued a temporary restraining action to avoid further delay in the determination of just
order against the implementation of the May 3 and 18, 2007 compensation.80
Orders as well as the January 7, 2008 Order.71
The Government manifested that it was ready to present its own
2. The BOC's Expenses valuation of the NAIA-IPT III and other supporting evidence.
PIATCO, Takenaka, and Asahikosan did not object to this
On June 15, 2006, the BOC filed a request for the release of a manifestation.81
mobilization fund of ₱1,600,000.00 to support the discharge of its
functions.72 The RTC approved the request and directed the On August 5, 2010, the RTC ordered the parties to submit their
Government and PIATCO to equally share the BOC's expenses.73 appraisal reports of NAIA-IPT III with supporting documents and
The Government and PIATCO complied with this order and affidavits.82 The Government appraised the NAIA-IPT III at
tendered the sum of ₱1,600,000.00 to the BOC.74 $149,448,037.00while PIATCO concluded that its replacement
cost was $905,867,549.47. On the other hand, Takenaka and
On November 24, 2009, the BOC requested additional funds in Asahikosan claimed that the NAIA-IPT III's construction cost
the amount of ₱5,250,000.00.75 On December 7, 2010, the RTC amounted to $360,969,790.82.
directed the Government and PIATCO to equally defray the BOC's
expenses.76 The Government contested this order and insisted 1. The Government's Appraisal
that Takenaka and Asahikosan should likewise shoulder the
BOC's expenses as intervenors in the case.77 Based on the Gleeds Report dated November 15, 2010, the
Government computed the valuation of the NAIA-IPT III as
In an order dated March 11, 2011,the RTC ordered Takenaka and follows:83
Asahikosan to share in the BOC's expenses. The RTC thus
ordered each party to pay ₱1,750,000.00. PIATCO complied with
this order and paid the amount of ₱1,750,000.00 to the BOC.78 December 2002
CCV December 2004
Takenaka and Asahikosan sought the partial reconsideration of CCV
this order.1âwphi1 They argued that they should not be made to Base valuation $USD @3Q01 $300,206,693 $300,206,693
pay the BOC's expenses since "their prayer to defer the release of Deterioration $USD @2Q09 $0 $1,738,318

62
CASES ON EVIDENCE

Depreciation $USD 3Q01 $0 $35,076,295 1. Failed structural elements of the Terminal, as identified in the
Total Base CCVs $USD Arup Seismic Evaluation Report and Gravity Loading and
$300,206,693 Element Capacity Assessment;
$263,392,081
Rectification for Contract Compliance 2. The inferior quality of material used and works, including floor
$USD@2Q09 tiling, plasterboard wall finishes and ceilings, internal and
Not compliant with bid documents -$30,670,894 -$30,670,894 external metal paneling;
Inferior quality -$7,702,640 -$7,702,640
Additional areas to be built (63,490m2) -$75,570,510 - 3. Constructed areas that are unnecessary to the functioning of
$75,570,510 an international aiport terminal and therefore of no benefit to the
Total Contract Compliance -$113,944,044 - Republic. These areas identified in the Arup Site Observation
$113,944,044 Report include areas where the requirements stated in the Bid
Deductions $USD Documents have been grossly overprovided. They also include the
Total CCVs $USD multilevel retail mall that, with its own internal circulation, is
$186,262,649 functionally separate from the Terminal and accessible only
$149,448,037 through the multi-storey car park (20,465 m2), and excess retail
▪ $300,206,693.00 as base current cost valuation(CCV). Based on concession space (1,727 m2);
the Gleeds report, the construction cost of the NAIA-IPT III as of
December 2002 was $300,206,693.00, consisting of the cost of 4. The cost of seismic and gravity load structural retrofits for the
constructing the terminal building, aprons, car park, elevated failed elements in the terminal buildings and multi-storey car
roadways, and other related items. park structures, as those retrofits are described in Arup's
Drawings listed in Appendix 'B' Drawing List 2 and other
Gleeds appraised the NAIA-IPT III by "multiplying the structure's rectification works required to bring the terminal to compliance
dimensions (i.e., quantities) by a price (i.e., rate) for constructing with applicable building and airport codes (as indicated in the
the works at a designated time and specific location, adding the Appendices of Arup's Site Observation Report);
cost of works in, on, and around the structure, and then
accounting for inferior and nonperforming works, and 5. The cost of completing the items listed in the JAC project
rectification of those works."84 status summary report of 28 February 2003;85 and

▪ Gleeds arrived at the CCV by considering the rates and prices 6. The cost of seismic and gravity load structural retrofits for the
for the third quarter of 2001, which represented the midpoint of failed elements in the elevated roadway structures as those
the construction period from June 2000 (the commencement of retrofits were described in Arup's Drawings listed in Appendix 'B'
construction) to December2002 (the suspension of construction). Drawing List 3, Arup Review on 'TCGI Report of Civil Design
It claimed that calculating the cost of construction based on its Review and Evaluation' - Elevated Roadway, dated March 2009,
midpoint was a recognized standard practice in the construction and other rectification works required to bring the elevated
industry. The base CCV excluded the following items: roadways to compliance with applicable building and airport

63
CASES ON EVIDENCE

codes (as indicated in the Appendices of Arup's Site Observation 2002 Inflation
Report).86 Rate Base
Valuation
▪ $263,392,081 as total base CCV as of December 2004. The @ 2004
Government asserted that the NAIA-IPT III suffered from I. Materials, Equipment and Labor Engineering & Procurement
depreciation and deterioration in the sum of US$36,814,612.00 360,969,791 1.0971 396,019,958
from December 2002 until December2004. The base value CCV at II. Attendant Costs
the time of expropriation should be US$263,392,081.00 after Engineering and Architecture 19,372,539 1.0971
deducting depreciation and deterioration. 21,253,613
Quality Assurance 6,923,720 1.0971 7,596,013
▪ $113,944,044 as total contract compliance deductions. The Construction Supervision 4,302,227 1.0971 4,719,973
Government further deducted items which were non-compliant Construction Insurance 4,329,272 1.0971 4,749,644
with bid documents, including, among others: Site Development 8,358,169 1.0971 9,169,747
Other Costs 308,985 1.0971 338,987
a. FIDS monitors not flat screen Attendant Costs exclusive of
Financing Costs 43,594,911 1.0971 47,827,977
b. Moving walkways under provision Financing Costs 26,602,890 26,602,890
Total Attendant Costs 70,197,802 74,430,868
c. Sun shading to external glazing d. Lack of 400hz PC air to TOTAL 431,167,593 470,450,825
loading bridges In US Dollars

e. Completion of testing, commissioning, and operation of the REPLACEMENT COST 470,450,825

facility Add:
Interest from 21 Dec 2004 to11 Sept 2006 104,014,531
f. Provision of as-built documentation Interest from 12 Sept 2006 to 31 Dec 2010 331,402,193
Total Interests 435,416,724
The Government likewise deducted the replacement cost of Total Replacement Value 905,867,550
inferior quality items and additional areas that the Government Less: Payment on 11 Sept 2006 59,438,604
had to build to finish the NAIA-IPT III project.87 Amount Still Due 846,428,946
Computation of Interest in US Dollars
2. PIATCO's Appraisal

PIATCO claimed that the total replacement value of the NAIAIPT Period Interest
III as of December 31, 2010 amounted to $905,867,550.00. Rates No. of Days Amount in
USD
Actual Replacement
Costs @ Cost (a) 470,450,825

64
CASES ON EVIDENCE

Interests Additional Interests up to 31 December 2010 (2)

From takeover 331,402,193
of NAIA T3 on AMOUNT STILL DUE AS REPLACEMENT VALUE (b) + (2)
21 Dec 2004 December 21 846,428,946
to December Replacement
31, 2004 12% 11 1,724,986 Cost 470,450,825
Total Interests
January 1 to December 31, (1+2) 435,416,724
2005 12% 365 57,448,057 TOTAL
AMOUNT OF
January 1 to September 11, REPLACEMENT
2006 12% 254 44,881,488 VALUE 905,867,550
Total Interest from 21 December 2004 to ▪ $360,969,791 as base value. PIATCO adopted Takenaka and
11 September 2006 (1) 104,014,531 Asahikosan's actual construction cost of $360,969,791 which is
TOTAL AMOUNT DUE AS OF 11 supported by As-Built Drawings and Bills of Quantities. PIATCO
SEPTEMBER 2006 (a) + (1) 574,465,356 stated that the Japanese Airport Consultants (JAC), the quality
Less: Amount Paid on 11 September 2006 (Php assurance inspector for the NAIA-IPT III project, validated the
3,002,125,000/50.508) 59,438,604 works of Takenaka and Asahikosan. PIATCO alleged that the
NET AMOUNT STILL DUE AS OF 11 SEPTEMBER 2006 (b) Government and PIATCO entered into a Quality Assurance
515,026,752 Agreement with JAC.88
Additional
Interests September 12 to ▪ Attendant costs. Under RA 6957 IRR, the replacement cost
December 31, includes the "overhead and all other attendant costs associated
2006 12% 112 19,227,665 with the acquisition and installation in place of the affected
improvements/structures." The items under the attendant costs
January 1 to December 31, correspond to these "overhead and other attendant costs" which
2007 12% 365 65,000,954 are necessary to construct an airport project.89

January 1 to December 31, It is necessary to hire quality assurance surveyors to check and
2008 12% 366 73,109,155 monitor the work of Takenaka. PIATCO hired Pacific Consultants,
Inc. as construction supervisor in the NAIA-IPT III project.
January 1 to December 31, PIATCO claimed that the planning and design consultancy fees
2009 12% 366 82,028,472 are even below the international norms which are in the range of
8.5% to 11.5% of the Construction Contract cost.90 Financing
January 1 to December 31, costs are also "attendant costs" because loans and guarantees
2010 12% 366 92,035,946 were obtained to finance the NAIA-IPT III project.91

65
CASES ON EVIDENCE

▪ Conversion to 2004 values. Since the NAIA-IPT III shall be Thereafter, changes were made in the course of the construction
appraised at the time of taking, the total construction cost shall that increased its construction contract price. Pursuant to the
be converted to December 21, 2004 values by considering the Onshore Construction and Offshore Procurement Contracts,
inflation rate of 1.0971.92 Inflation was computed using the PIATCO paid Takenaka and Asahikosan the amounts of
Consumer Price Index (CPI) from 2002 to 2005. The reckoning $231,312,441.28 and ₱1,796,102,030.84 (a total of
period was from November 29, 2002, when Takenaka and $275,119,807.88).
Asahikosan suspended their works in the NAIA-IPT III project,
until December 21, 2004, when the Government filed a complaint After PIATCO defaulted on its payments, Takenaka and
for expropriation.93 Asahikosan instituted Claim Nos. HT-04-248 and HT-05-269 in
England. The London court ruled in their favor and awarded them
▪ Interests on replacement cost. The twelve (12%) interest rate the amounts of $81,277,502.50, ₱116,825,365.34 and
shall be added to the replacement cost pursuant to the principles £65,000.00 or a total of $ 84,035,974.44. Thereafter, they filed an
of law and equity.94 In Benguet Consolidated v. Republic of the action to enforce Claim Nos. HT-04-248 and HT-05-269 before the
Philippines,95 the Court ruled that the property owner is entitled RTC of Makati which awarded them the sum of $1,814,008.50.97
to the payment of interest where the payment of compensation
does not accompany the taking of property for public use but is 4. The BOC's Appraisal
postponed to a later date. The interest shall compensate for the
Government's delay in the payment of just compensation.96 On March 31, 2011, the BOC submitted its Final Report
recommending the payment of just compensation of
3. Takenaka and Asahikosan's Appraisal $376,149,742.56 with interest at the rate of 12% per annum
computed from the time of the taking of the property until the
On the other hand, Takenaka and Asahikosan, computed the amount is fully paid, plus commissioner's fees equivalent to 1% of
NAIAIPT III's replacement cost as follows: the amount fixed as part of the costs of the proceedings.

In US dollars In arriving at the replacement cost of the NAIA-IPT III, the BOC
Total payments of PIATCO proposed the following computation:
Add: Awards by the London Court
Award by the Makati Court Formula In US dollars
Total Construction Cost 275,119,807.88 Amount paid by PIATCO to Takenaka and Asahikosan
84,035,974.44 Add:
1,814,008.50 Award in Claim No. HT-04-248 Relating to the
360,969,790.82 Construction Cost of NAIA-IPT III
▪ $360,969,790.82 as total construction cost. Takenaka and Award in Claim No. HT-05-269 Relating to the
Asahikosan claimed that the initial contract price for the Construction Cost of NAIA-IPT III
construction of the NAIA-IPT III was $323,753,238.11. Construction Cost of NAIA-IPT III
Add:
Attendant Cost (10% of the Construction Cost)

66
CASES ON EVIDENCE

Replacement Cost of NAIA-IPT III 275,119,807.88 construction cost; otherwise, the NAIAIPT III would have been
fully depreciated since the Government estimated that the NAIA-
14,827,207.0098 IPT III's useful life was only ten years.

▪ The replacement cost shall earn interest at 12% per annum from
52,007,296.5499 December 21, 2004, until full payment. The BOC stated that legal
341,954,311.42 interests shall accrue from the time of taking of the property until
actual payment of just compensation. The delay in the payment of
34,195,431.14 just compensation is equivalent to a forbearance of money.
376,149,742.56
▪ $341,954,311.42. In computing the construction cost, all actual, ▪ The commissioner's fees shall be equivalent to 1% of just
relevant and attendant costs for the construction of the NAIA-IPT compensation. According to the BOC, the commissioner's fees
III, including its market price, shall be considered. The BOC shall be equivalent to 1% of just compensation, similar to the
divided the construction cost into: (a) the amount paid by PIATCO arbitrators' fees. Commissioners and arbitrators perform similar
to Takenaka and Asahikosan for the construction of NAIA-IPT III; responsibilities since both act as independent and uninterested
and (b) the awards by the London Court in Claim Nos. HT-04-248 third parties in resolving difficult factual issues.100
and HT-05-269 relating solely to construction cost, excluding
interest, attorney's fees, and costs of the suit. The BOC relied on II. The RTC Rulings in Civil Case No. 04-0876
Takenaka and Asahikosan's construction cost since these
corporations shouldered the actual cost of constructing the NAIA- A. The Main Decision
IPT III.
In a decision dated May 23, 2011, the RTC directed the
▪ $34,195,431.14. According to the BOC, PIATCO failed to Government, Takenaka, and Asahikosan to pay the
substantiate its attendant costs. In pegging the attendant cost at commissioners' fees in the amount of ₱1,750,000.00 each; and
10% of the construction cost, the BOC relied on the Scott Wilson ordered the Government to pay PIATCO just compensation in the
Report, which states that the accepted industry range for amount of $116,348,641.10. In determining the amount of just
architecture, civil and structural, electrical and mechanical, compensation, the RTC adopted the following computation:
quantity surveyor and project management cost is 8.5% to 11.5%
of the construction cost. Formula In US dollars
Just compensation as determined by the Republic
▪ Depreciation shall not be deducted from the construction cost. Add: Attendant cost (10% of $263,992,081.00, CCV as of
The BOC explained that the inventory of materials comprising the December 21, 2004)
NAIA-IPT III does not reflect its replacement cost. Rather, it is the Just Compensation
actual cost of replacing an existing structure with an identical Less: Proffered value paid to PIATCO
structure that is considered in the replacement cost method. For Net Just Compensation 149,448,037.00
this reason, depreciation shall not be deducted from the
26,339,208.10

67
CASES ON EVIDENCE

175,787,245.10 The RTC stated that just compensation is limited to the value of
(59,438,604.00) the improvement at the time of the filing of the expropriation
116,348,641.10 complaint. The payment of just compensation does not include
▪ $149,448,037.00. The RTC adopted the Government's computed the right to be compensated of the franchise to operate the
just compensation of $149,448,037.00, and ruled that the airport, and the increased value of improvements due to inflation
Government should not pay for the portions of the NAIAIPT III rate.
that were defective. The RTC thus excluded the following from the
computation of the CCV: ▪ $26,339,208.10. Similar to the BOC, the RTC pegged the
attendant cost at 10% of the CCV at the time of the filing of the
(a) failed structural elements in the NAIA-IPT III; expropriation complaint. The RTC agreed with the BOC that the
computation of the attendant cost based on the 10% of the CCV
(b) inferior quality of material works; was an accepted industry practice.

(c) constructed areas that are unnecessary to the use of an ▪ $59,438,604.00. After deducting the proffered value of
international airport terminal; $59,438,604.00, the RTC fixed the net compensation at
$116,348,641.10, without interest. The RTC stated that no
(d) cost of seismic and gravity load structural retrofits for the interest shall accrue on the net just compensation since the
failed elements; Concession Agreement was nullified by the Court in Agan.

(e) cost of completing the items listed in the JAC project status The dispositive portion of the decision states:
summary report of February 28, 2003; and
IN THE LIGHT OF THE FOREGOING, Plaintiffs are hereby ordered
(f) cost of seismic and gravity load structural retrofits for the to pay respondent PIATCO the amount of US$175,787,245.10
failed elements in the elevated roadway structures. less the proffered value (₱3,002,125,000.00) actually paid to and
received by defendant, as the just compensation for the
The RTC rejected PIATCO, Takenaka, Asahikosan, and the BOC's improvements of NAIA-IPT III. Moreover, both plaintiff Republic
computation for lack of factual and legal basis. The court and intervenors Takenaka and Asahikosan Corporations are
criticized the BOC's computation of construction cost and stated directed to pay their proportionate shares of the Commissioners'
that the BOC erroneously relied on the amounts allegedly paid by Fees in the amount of ₱1,750,000.00 each with dispatch.
PIATCO to Takenaka and Asahikosan. The RTC pointed out that
PIATCO failed to present proof that it had indeed paid Takenaka Finally, insofar as both intervenors Takenaka and Asahikosan
and Asahikosan the sum of $275,119,807.88. The RTC further Corporations are concerned, resolution of their claim before this
posited that the BOC did not take into account the actual cost of Court is held in abeyance owing to the pendency of the outcome
the NAIA-IPT III at the time of taking which was in a state of of the appeal on certiorari before the CA, and in any of their
collapse and deterioration. claims, as contractors are solely as against defendant PIATCO.

SO ORDERED.101

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CASES ON EVIDENCE

The Government thus asked the RTC's leave to deposit the just
PIATCO, Takenaka, and Asahikosan immediately appealed the compensation due in an escrow account that shall be subject to
RTC's decision before the CA while the Government opted to seek the following conditions:
partial reconsideration of the attendant costs awarded to
PIATCO.102 8.1. The claimant(s) shall have been held to be entitled to receive
the sum claimed from the "Just Compensation (NAIA Terminal 3)
PIATCO, Takenaka, and Asahikosan sought to nullify the RTC Fund" in accordance with Philippine law and regulation, by a
decision for alleged violation of their right to due process. They final, binding and executory order or award of the expropriation
complained that they were only furnished copies of the BOC Final court;
Report only after the promulgation of the May 23, 2011
decision.103 They averred that the RTC violated Sections 7 and 8, 8.2. The claimant(s) shall have been held to have accepted or
Rule 67 of the Rules of Court which provide that the clerk of court otherwise become subject to the jurisdiction of the expropriation
shall serve copies of the commissioners' report on all interested court and other relevant courts of the Republic of the Philippines,
parties, with notice that they be allowed ten days within which to by reason of or in connection with the expropriation of NAIA
file objections to the findings of the report, if they so desire.104 Terminal 3 by the ROP, directly or indirectly;

The Government subsequently partially appealed the case to the 8.3. The claimant(s) shall have executed a valid and effective
CA after the RTC denied its motion for partial reconsideration.105 quitclaim in favor of the Republic of the Philippines
acknowledging that claimant(s) against the ROP or any agency or
B. The RTC's Interlocutory Order on the Validity of the Escrow instrumentality or corporation of the ROP, by reason of, or in
Accounts connection with, the expropriation of NAIA Terminal 3 by the
ROP, directly or indirectly, in any capacity whatsoever;
1. The Government and the Creation of an Escrow Account for the
Payment of Just Compensation 8.4. The claimant(s) has complied within good faith any condition
or undertaking required from it/him/her by the expropriation
On July 8, 2011, the Government filed a Manifestation and court by reason of or in connection with the expropriation of NAIA
Motion106 with the RTC stating that it was ready and willing to Terminal 3 by the ROP, directly or indirectly, in any capacity
pay PIATCO, through an escrow account, the amount of whatsoever.107
$175,787,245.10less the proffered value of ₱3 billion.
The Government thus prayed:
The Government expressed its desire to exercise full ownership
rights over the NAIA-IPT III. However, it could not directly pay 1. Pending determination of the entitled claimants, to allow the
PIATCO who had various creditors - Takenaka, Asahikosan, and Government to deposit just compensation less the proffered value
Fraport, among them. The Government asserted that just in an escrow account with a reputable bank whose senior
compensation should only be paid to claimants who are legally unsecured obligations are rated at least 'BBB' by Standard and
entitled to receive just compensation. Poor's Investors Service, Inc.or 'Baa2' by Moody's Service
Investors Service, Inc. to be designated by the RTC;

69
CASES ON EVIDENCE

filing of the Notice of Appeal. The RTC opined that the

2. After depositing the amount in an escrow account, to confirm Manifestation and Motion was akin to a motion for execution
the Government's right to fully exercise any and all acts of pending appeal. The Manifestation and Motion showed the
ownership over the NAIA-IPT III; and Government's intent to voluntarily comply with the May 23, 2011
decision which was pending appeal before the CA. Under Section
3. To order the release of just compensation, or of any portion 9,Rule 41 of the Rules of Court, the RTC has the residual power
thereof from the escrow account to the entitled claimants to issue orders for the protection and preservation of the parties'
provided that the entitled claimants have fully complied with all rights, and to order the execution of a decision pending appeal.
the conditions and requirements set forth under paragraphs 8.1 Furthermore, Section 6, Rule 136 of the Rules of Court provides
to 8.4 of the Manifestation and Motion.108 that courts have incidental power to issue orders that are
necessary to effectuate their judgments.
PIATCO opposed the Manifestation and Motion and argued that
the Government could not vary the terms of the May 23, 2011 The RTC held that the creation of an escrow account conforms
Decision as well as the Court's rulings in Agan and Gingoyon with the Court's rulings in Gingoyon that just compensation shall
commanding the Government to make a direct payment of just be paid in accordance with law and equity. Since the Government
compensation to PIATCO. It insisted that the offer to pay through had no legal obligation to create an escrow account, it could
an escrow account is not equivalent to direct payment. PIATCO impose conditions for the release of just compensation in the
further denied the Government's allegations that there were escrow account, including: (a) PIATCO's submission of a warranty
several claimants on the just compensation.109 that the NAIA-IPT III shall not be burdened by liens and
encumbrances and an undertaking that PIATCO shall be solely
On the other hand, Takenaka and Asahikosan agreed with the liable for any claims from third persons involving the NAIA-IPT III;
Government that just compensation should only be paid to and (b) PIATCO's execution of a Deed of Conveyance of the NAIA-
entitled claimants. They posited that the Court's directive in Agan IPT III in favor of the Government. Equity dictated that the
(with respect to the direct payment to PIATCO) was premised on Government's payment of just compensation should free the
the erroneous assumption that PIATCO was the builder of the NAIA-IPTIII from liens and encumbrances. The Deed of
NAIA-IPT III. Takenaka and Asahikosan insisted that they were Conveyance should be without prejudice to the appellate court's
the actual builders of the NAIA-IPT III. Nonetheless, they determination of just compensation.
contended that the RTC had no jurisdiction over the
Manifestation and Motion because the parties already filed their Conversely, PIATCO had likewise no legal obligation to accept or
respective Notices of Appeal before the CA.110 reject the Government's offer of payment.

2. The Omnibus Order dated October 11, 2011 The RTC clarified that PIATCO is the sole entity entitled to receive
the payment from the Government. The RTC pointed out that the
In an Omnibus Order dated October 11, 2011, the RTC granted Court has remanded the Gingoyon case for the sole purpose of
the Manifestation and Motion. The RTC ruled that it has residual determining the amount of just compensation to be paid to
jurisdiction to adjudicate the Government's Manifestation and PIATCO.
Motion considering that the motion was filed prior to the parties'

70
CASES ON EVIDENCE

Moreover, the Government did not raise the alleged dispute in the b. PIATCO must submit an Undertaking that it is assuming sole
ownership of the NAIA-IPT III during the expropriation responsibility for any claims from third persons arising from or
proceedings. The RTC stated that it could not take judicial notice relating to the design or construction of any structure or facility of
of the allegation that PIATCO was indebted to various creditors, NAIA IPT III structures, if any; and
apart from Takenaka and Asahikosan, since these alleged
creditors were not impleaded in the expropriation complaint. c. PIATCO must submit a duly executed Deed transferring the
title of the NAIA IPT III structures and facilities to the Republic of
The RTC likewise observed that compliance with the the Philippines, without however, prejudice to the amount which
Government's conditions under 8.1 and 8.3 for the release of just will finally be awarded to PIATCO by the appellate court;
compensation from the escrow account pending appeal was
legally impossible. For this reason, the payment through an The Land Bank of the Philippines and the Development Bank of
escrow account was not the payment that would transfer the title the Philippines are hereby jointly appointed [a]s the Escrow
of the NAIA-IPT III to the Government. Agents for the above purpose.

The RTC lastly ruled that the payment of just compensation Upon payment of the plaintiffs of the said just compensation in
through an escrow account shall be payment of just an escrow account, this court recognizes the Republic of the
compensation within a reasonable time. Consequently, the Philippines' right to exercise full rights of ownership over the NAIA
Government may exercise full rights of ownership over the NAIA- IPT III structures and facilities in accordance [with] 2 (c).
IPT III upon the creation of an escrow account.111
3. Plaintiffs' Formal Offer of Evidence and defendant PIATCO's
The dispositive portion of this order provides: Comment and Opposition thereto are NOTED.

IN THE LIGHT OF THE FOREGOING, plaintiffs' Manifestation and 4. Defendant PIATCO's motion for reconsideration with plaintiffs'
Motion is GRANTED in part: comment/opposition of the order of this court denying the motion
for inhibition is hereby denied.
1. Plaintiffs' prayer for the court to determine who is/are legally
entitled to receive just compensation is DENIED for lack of merit. SO ORDERED.112

2. Plaintiffs' prayer that they be allowed to deposit the payment of The RTC subsequently denied PIATCO's as well as Takenaka and
just compensation (less the proffered value) to an escrow account Asahikosan's respective motions for partial reconsideration of the
is hereby GRANTED, provided that only the following conditions above-quoted order,113 opening the way for PIATCO's petition for
may be imposed for the release of the money deposited: certiorari with prayer for the issuance of a temporary restraining
order and/or a writ of preliminary injunction, filed with the
a. PIATCO must submit a Warranty that the structures and CA.114 This petition was docketed as CA-G.R. SP. No. 123221.
facilities of NAIA IPT III are free from all liens and encumbrances;
III. The CA Rulings

71
CASES ON EVIDENCE

A. CA-G.R. CV No. 98029 The CA justified its computation as follows:

In a decision dated August 7, 2013,115 the CA upheld the validity ▪ $300,206,693.00 as Replacement Cost. Under Section 10 of RA
of the RTC's May 23, 2011 decision. The CA ruled that the parties 8974 IRR, replacement cost shall consist of the construction and
did not need to be furnished the BOC Final Report since RA 8974 attendant costs.
is silent on the appointment of the BOC, as held in Gingoyon.
$300,206,693.00 as construction cost. The CA relied on the
However, the CA modified the RTC rulings and arrived at its own Gleeds Report which it characterized as more "particularized,
formula of the NAIA-IPT III's replacement cost, to wit: calculable and precise."116 The Government's construction cost
did not vastly differ from the BOC and PIATCO's computed
Construction Cost construction costs of $341,954,311.42 and $360,969,791.00,
Add:Attendant Cost respectively. But the BOC and PIATCO's computed construction
= Replacement Cost costs were unreliable since they lacked detailed proof that the
Add: Equity quoted amounts were directly related to the construction of NAIA-
Just Compensation IPT III.

Substituting: $0 as attendant cost. The CA stated that there was no need to

award additional attendant costs since these costs had already
Replacement Cost = $300,206,693.00 + 0 (because been included in the Government's computations under the
attendant cost already imputed in heading "General Requirements and Conditions." The inclusion of
construction cost) attendant cost in the construction cost was justified since the
= $300,206,693.00 + 6% interest from attendant cost becomes part of the total construction cost once
December 21, 2004 to September 11, the construction of a project is completed. Based on the Bills of
2006 less $59,438,604.00 + 6% Quantities, the Government provided the following detailed list of
interest from September 12, 2006 attendant costs in the construction of the NAIA-IPT III:
until finality of judgment

In US dollars Attendant Cost In US Dollars

Replacement Cost Design
Less: Proffered value paid to PIATCO Staff and labour
Just Compensation as of September 11, 2006 Insurance
Add: Interest Due as of July 31, 2013 PI Insurance
Just Compensation as of July 31, 2013 300,206,693.00 Consequential Loss
(59,438,604.00) Setting out
240,768,035.00 Health and safety
130,658,653.24 Enviro Management
371,426,742.24 Design

72
CASES ON EVIDENCE

Staff and labour should not be deducted since it merely measures the book value
Insurance 6,439,680 of the property or the extent of use of the property. Depreciation
10,491,139.54 is inconsistent with the replacement cost method since the
925,210.78 replacement cost merely measures the cost of replacing the
2,200,000.00 structure at current market price at the time of taking.
800,000.00
364,647.00 Furthermore, the market price of a building increases over time;
403,224.00 thus, if the construction cost of NAIA-IPT III in 2002 was
176,490.00 $300,206,693.00, its replacement cost in 2004 should be equal to
2,631,100.00 or higher than $300,206,693.00.
2,590,774.19
71,109.77 ▪ Interest. The CA further held that interest shall be added to just
total 25,293,376.28117 compensation as of September 11, 2006. Citing Gingoyon, the CA
The CA likewise observed that PIATCO's summarized computation explained that law and equity dictated that the Government shall
of attendant costs was self-serving and unsubstantiated by be liable for legal interests as a result of the delay in the payment
relevant evidence. On the other hand, the BOC and the RTC's of just compensation to PIATCO. Since there was no stipulation
computation of attendant costs at 10% of the construction cost on interests, the CA fixed the interest rate at 6%.
lacked factual and legal support. Pegging attendant costs at 10%
of the construction cost was only relevant during the pre- Upon finality of the judgment, the interest shall be 6% until fully
construction stage since the costs of the construction at that time paid. As of July 31, 2013, the CA computed the interest as
could only be estimated. This estimate carried no relevance at the follows:
post-construction stage since the total construction costs,
including the attendant costs, could already be determined.
In US Dollars
▪ Depreciation, costs for noncompliance with contract Interest from December 21, 2004
specifications, and unnecessary areas of NAIA-IPT III shall not be to December 21, 2005
deducted from the replacement cost. The CA reversed the RTC's $300,206,693*6% 18,012,401.58
finding that the NAIA-IPT III suffered from massive structural Interest from December 22, 2005
defect. The CA opined that the collapse of the portion of the NAIA- to September 11, 2006
IPT III merely relates to "finishing" rather than to "structural" $300,206,693*6%*268 days/365
defects. In construction lingo, "finishing" pertains to aesthetics, days 13,225,544.17
convenience, and functionality of a built structure while Interest from September 12, 2006
"structural" refers to the very integrity and stability of the built to September 12, 2012
structure. The CA disagreed with the RTC's conclusion that $240,768,035*6%*6 years 86,676,492.60
depreciation, costs for non-compliance with contract Interest from September 13, 2012
specifications, and unnecessary areas of the NAIA-IPTIII, shall be to July 31, 2013
excluded from the computation of construction cost. Depreciation $240,768,035*6%*322 days/365

73
CASES ON EVIDENCE

days 12,744,214.89 WHEREFORE, the decision appealed from is MODIFIED. Just

Total Interest as of July 31, compensation is fixed at US $300,206,639.00 less US $
2013 130,658,653.24 59,438,604.00 paid in September 2006 or the net sum of
The CA further ordered Takenaka and Asahikosan to share in the US$240,768,035.00with legal interest at 6% computed as above.
expenses of the BOC. Since Takenaka and Asahikosan's inputs The Republic is thus ordered to pay PIATCO just compensation as
on the construction costs of the NAIA-IPT III were heard by the herein determined and which sum has reached the total of
RTC, they should share in the expenses of the BOC. $371,426,688.24 as of 31 July 2013.

The CA likewise denied Takenaka and Asahikosan's prayer to set Upon finality of judgment, interest on the sum due by then shall
aside in an escrow account a portion ofthe just compensation be at 6% per annum until fully paid pursuant to BSP Circular No.
corresponding to the amounts owed them by PIATCO. RA 8974 799, series of 2013 which took effect on 01 July 2013, and which
expressly provides that the Government shall directly pay the effectively modified the interest rate rulings in Eastern Shipping
property owner upon the filing of the complaint as a prerequisite Lines, Inc. v. Court of Appeals.1awp++i1 Eastern Shipping was
to the issuance of a writ of possession. the basis of the Court's earlier imposition of a 12% interest from
finality of judgment.
The dispositive portion of the CA decision provides:
IT IS SO ORDERED.120 [Emphasis supplied]
WHEREFORE, the decision appealed from is MODIFIED. Just
compensation is fixed at US$300,206,639.00 less US The CA likewise denied the Government's, PIATCO's, Takenaka's,
$59,438,604.00 paid in September 2006 or the net sum of and Asahikosan's motions for partial reconsideration in a
US$240,768,035.00 with legal interest at 6% computed as above. resolution dated October 29, 2013.121
The Republic is thus ordered to pay PIATCO just compensation as
herein determined and which sum has reached the total of US The CA's denial of their motions cleared the way for the elevation
$371,426,688.24 as of 31 July 2014. of CA-G.R. CV No. 98029 to this Court through a petition for
review on certiorari. The Government, PIATCO, and Takenaka and
Upon finality of judgment, interest on the sum due by then shall Asahikosan's consolidated petitions are docketed as G.R. Nos.
be at 12% until fully paid. 209917, 209731, and 209696, respectively.

IT IS SO ORDERED.118 B. CA-G.R. SP No. 123221

On August 22, 2013, the CA amended its decision in view of the In a decision dated October 18, 2014,the CA reversed the
BSP's recent issuance, BSP Circular No. 799, series of 2013, Omnibus Order dated October 11, 2011, for having been issued
which took effect on July 1, 2013. BSP Circular No. 799 lowered with grave abuse of discretion. The dispositive portion of the
the legal interest rate on loan or forbearance of money, goods or decision states:
credit to 6% per annum.119 The CA amended decision provides:
WHEREFORE, in view of the foregoing, the instant Petition is
Hereby GRANTED. Parenthetically, the Omnibus Order dated 11

74
CASES ON EVIDENCE

October 2011 and Order dated 5 December 2011 of the Pasay G.R. No. 209917 is the Government's petition for review on
City RTC, Branch 117, in Civil Case No. 04-0876-CFM for Certiorari128 to partially reverse the CA's August 22, 2013
Expropriation, are hereby NULLIFIED and SET ASIDE for having Amended Decision129 and its October 29, 2013 Resolution130 in
been issued with grave abuse of discretion amounting to lack or CA-G.R. CV No. 98029.
excess of jurisdiction.
G.R. No. 209696 is a petition for review on certiorari filed by
SO ORDERED.122 Takenaka and Asahikosan to partially reverse the CA's August 22,
2013 Amended Decision and its October 29, 2013 Resolution in
IV. The Action to Enforce the London Awards, Civil Case No. 06- CA-G.R. CV No. 98029.131
171
G.R. No. 209731 is PIATCO's petition for review on certiorari to
On February 27, 2006, Takenaka and Asahikosan filed an action reverse the CA's August 22, 2013 Amended Decision, and October
to enforce the London awards in Claim Nos. HT-04-248 and HT- 29, 2013 Resolution in CA-G.R. CV No. 98029.132 G.R. Nos.
05-269 before the RTC of Makati, Branch143. The case was 209917, 209696 & 209731 originally arose from the
docketed as Civil Case No. 06-171.123 Government's complaint for expropriation of the NAIA-IPT III filed
with the RTC of Pasay, Branch117 in Civil Case No. 04-0876. The
In a decision dated September 6, 2010, the RTC recognized the main issue before the Court in these petitions is the valuation of
validity of the London awards in Claim Nos. HT-04-248 and HT- the just compensation due for the Government's expropriation of
05-269 and declared these awards as enforceable in the the NAIA-IPT III.
Philippine jurisdiction. The RTC thus ordered PIATCO to pay
Takenaka and Asahikosan the sum of $85.7 million.124 G.R. No. 181892 is the Government's petition for certiorari with
prayer for the issuance of a temporary restraining order,133
PIATCO appealed the case to the CA125 which affirmed the RTC assailing the May 3, 2007, May 18, 2008;and January 7, 2008
rulings in a decision dated March 13, 2012.126 The CA likewise orders of the RTC of Pasay City, Branch 117 in Civil Case No. 04-
denied PIATCO's motion for reconsideration in a resolution dated 0876.134
May 31, 2012.127
This petition likewise arose from the Government's complaint for
PIATCO responded by filing a petition for review on certiorari with expropriation of the NAIA-IPT III. The main issue in this petition
this Court assailing the CA's ruling. The case was docketed as is the propriety of the appointment of DG Jones and Partners as
G.R. No. 202166and is still pending before the Court separately an independent appraiser of the NAIA-IPT III.1âwphi1
from the present petitions.
G.R. No. 202166 is PIATCO's petition for review on certiorari135
To summarize, the cases pending before the Court are the to assail the CA's March 13, 2012 decision136 and May 31, 2012
consolidated cases: G.R. Nos. 209917, 209696, 209731,and Resolution137 in CA-G.R. CV No. 96502. The petition arose from
181892, and G.R. No. 202166 as a separate case. Takenaka and Asahikosan's action to enforce the London awards
before the RTC of Makati, Branch 143 in Civil Case No. 06-171.
As previously mentioned, this case was not consolidated with the

75
CASES ON EVIDENCE

four(4) cases above and shall thus be separately ruled upon by valuation which provides the current cost of replacing an asset
the Court. with its modern equivalent asset less deductions for all physical
deterioration and all relevant forms of obsolescence and
V. The Parties' Positions optimization" and as "the replacement value of property minus
physical depreciation and obsolescence; insurance adjusters
A. The Government's Position (G.R. Nos. 209917, 209731, and estimate the actual cash value of property based on its
209696) depreciated replacement cost."138

G.R. No. 209917 In other words, depreciated replacement cost adjusts the cost of
replacing the actual asset in accordance with the asset's age in
In G.R. No. 209917, the Government asks the Court to partially order to take into account the lower economic utility of an asset
reverse the CA rulings and to deduct from the replacement cost of that is not brand new. As an asset ages, higher economic cost is
US$300,206,693.00the following items: (a) depreciation in the required to maintain that asset to the level of utility of a brand
amount of US$36,814,612.00; and (b) PIATCO's non-compliance new one.
with contract specifications in the amount of US$113,944,044.00.
The Government also refutes the CA's imposition of a legal The second and less common standard is the new replacement
interest on just compensation. cost method which measures the cost of replacing an asset at
current prices with no adjustment for age, wear, and tear. It
The Government asserts that the CA did not consider equity in refers to "the cost to replace damaged property with like property
computing the replacement cost of the NAIA-IPT III. Contrary to of the same functional utility without regard to depreciation
the Court's pronouncement in Gingoyon, the CA computed just (physical wear and tear) and obsolescence."139
compensation based solely on RA 8974 and its IRR. The CCV of
$300,206,639.00 only reflects the valuation of the NAIA-IPTIII as The Government asks the Court to adopt the depreciated
of November 2002 when PIATCO stopped the construction of the replacement cost method where depreciation is deducted from the
terminal, and did not take into account other factors that lowered replacement cost. The Government asserts that it is an
its valuation as of December 2004. internationally accepted practice to consider depreciation and
other forms of obsolescence and optimization in measuring the
The Government posits that there are two standards in measuring replacement cost of an asset.
the replacement cost. The implementing rules of RA 8974 failed to
provide a complete formula to arrive at the replacement cost of an The Government argues that the new replacement cost method
expropriated property. usually applies in cases where the property must be rebuilt. For
example, an insurance policy for a house would usually use the
The first and common standard is the depreciated replacement new replacement cost method because a house, which was
cost method which measures the cost of replacing an asset at destroyed by fire or other natural disaster, must be rebuilt. On
current prices but in its actual condition, i.e., adjusted for age, the other hand, an insurance policy for an automobile would use
wear and tear. The Chartered Institute of Public Finance and the depreciated replacement cost because it presupposes that a
Accounting defines depreciated replacement cost as "a method of

76
CASES ON EVIDENCE

new automobile must be purchased to replace the old automobile prices with an asset that has the same economic utility."141
that suffered from wear and tear. Thus, the CA erred when it held that the depreciation adjustment
was inconsistent with the replacement cost method for the reason
The Government disputes the CA's opinion that the replacement that this method factors in the current market price to measure
cost cannot be lower than the actual construction because the cost of replacing an asset.
market prices tend to move upward over time. The Government
contends that the replacement cost may be lower than the For instance, if the Government would expropriate a ten-year-old
construction cost if the price of the materials such as steel, automobile, the new replacement cost method would compensate
cement, and copper used during the construction stage decreases the owner the amount of an asset that has more economic utility
after the construction of the improvement. Moreover, labor than the ten-year-old automobile. On the other hand, if the
productivity and technological advancements affect the Government would use the depreciated replacement cost method,
replacement cost since these counterbalance inflation. The it would only pay the value of an asset that has economic utility
depreciated replacement cost method is utilized "in setting user of a ten-year-old automobile.
rates for public utilities precisely because this standard of value
will tend to result in lower prices over time, not higher prices."140 The Government likewise insists that the CA erred in not
deducting from the replacement cost the construction costs for
The Government likewise disagrees with the CA that the deviations from the original contract, the inappropriate and
depreciation adjustment "would irrationally result in[a] book defective structures, and structures that were built in violation of
value which continues to be lower and lower over time." Since an international standards. It asserts that the
asset must be maintained, the cost of performing maintenance
and repairs increases the asset's replacement cost. Consequently, NAIA-IPT III suffers from structural defects, as evidenced by the
repairs and maintenance cost counter-balance depreciation. The following:
recognition that an asset depreciates impliedly acknowledges that
the owner will spend more costs in maintaining the asset's utility (a) In the August 2007 Site Observation Report, Ove Arup found
than on a brand new asset. that the NAIA-IPT III suffered from structural defects.

The Government agrees with the CA that depreciation is a cost (b) In its Scott Wilson Report, PIATCO admitted that the NAIAIPT
allocation method and not a valuation method. However, the III suffered from structural defects. The relevant portions of the
Government stresses that depreciation is also an economic cost; Report provide:
depreciation thus recognizes that an asset suffers from wear and
tear and would require higher cost to maintain an asset's Section 3.3.23. The cracking noted in the 2004 report at the
economic utility. Depreciation, as both economic and accounting upper storey beam/column interface appears to have worsened
concepts, represents cost adjustments to reflect the fair value of particularly in the outer faces of a number of columns at high
the asset due to age, wear, and tear. level adjacent to the internal ramps.

The Government adds that the premise of the replacement cost Section 3.3.37. As far as the building structure is concerned the
method is "to measure the cost of replacing an asset at current outstanding issues are the Taking Over Inspection Defects List,

77
CASES ON EVIDENCE

outstanding Quality Observation Report issues and the Non-

Compliance Schedule x x x.142 (e) TCGI documented the "heaving of homogenous tiles and cracks
underneath the slabs in the head house airline lounges (Level 3,
(c) The ASEP made the following observation in its June 23, 2006 Sector 4),"145 attributable to the 5.4 magnitude earthquake that
Report: hit Lingayen, Pangasinan, on November 27, 2008. The
earthquake was felt in Pasay with a 3.0 magnitude. PIATCO failed
● Results of material tests carried out identified that the materials to refute TCGI's findings.146
used were adequate and meet or exceed the ER specification.
However, the thickness of the wall angle used (0.4 mm) does not The Government insists that the operation of the NAIA-IPT III is
meet the minimum plate thickness for metals to be fastened by not an implied admission of the nonexistence of structural
power-actuated anchors, which requires a minimum of 0.6 mm defects. The Government clarifies that the structurally defective
(Hilti Catalogue). ASEP recommended further tests. sectors of the NAIA-IPT III remain unoccupied. Out of the 10
Sectors of the NAIA-IPT III, the MIAA fully occupies Sectors 1, 3,
● ASEP considered that the quality of workmanship of the 5, and 6, and partially occupies Sectors 2 and 4. The MIAA did
installation is not considered to be within minimum acceptable not occupy Sections7, 8, 9, and the car park due to structural
practice. issues.

● Structural design of the ceiling system provided by Takenaka That the Court declared the PIATCO contracts as null and void
and independently assessed by ASEP concluded that the factor of should not impede the deductibility of construction costs for
safety of individual components is high. However, ASEP stated deviations from the original contract, the inappropriate and
that the overall factor of safety of the total ceiling system is defective structures, and structures that were built in violation of
expected to be lower due to poor workmanship of the connections. international standards. The Government emphasizes that when
The positioning of the air-conditioning ducts, fire protection the Court nullified the PIATCO contracts, the NAIAIPT III was
system pipes, and other systems above the ceiling has affected almost complete. Consequently, the Government had every reason
the standard spacing of the ceiling hangers and may have to expect that PIATCO would build the NAIA-IPT III according to
contributed to the uneven distribution of loads to the various the agreed specifications. PIATCO, however, acted in bad faith in
ceiling components, although without some of the riveted joints not complying with the nullified PIATCO contracts. PIATCO
failing, the ceiling hangers are still adequate. should not benefit from its violation of the concession agreements
and the gross deviations from the original design of the NAIA-IPT
● ASEP concluded that a combination of poor workmanship and III.
wrong choice of system in some areas particularly if repeated
access is required for inspection and maintenance.143 The Government maintains that the imposition of legal interest on
just compensation is erroneous.
(d) In its June 23, 2006 Report, the ASEP opined that the NAIA-
IPT III may be partially opened provided that retrofitting works are First, the present expropriation case is sui generis. The
done prior to its full operation. Thus, the MIAA initiated the Government was forced to expropriate the NAIA-IPT III due to
structural remediation program of the NAIA-IPT III.144 PIATCO's violation of the Constitution and the law. To award legal

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CASES ON EVIDENCE

interest to PIATCO is to condone its illegal acts. In Hulst v. PR The Government alleges that it is willing to pay just compensation
Builders, Inc.,147 the Court held that the illegality should not be to the lawful claimant. However, just compensation should not be
rewarded. In Valderama v. Macalde,148 the Court deleted the set aside in favor of Takenaka and Asahikosan since their claim
payment of interest on the ground that a person should not be against PIATCO has not yet been resolved with finality.
allowed to profit from an illegal act. As between two parties, he
who, by his acts, caused the loss shall bear the same. He, who The Government disputes the applicability of Calvo v.
comes to court for equity must do so with clean hands. Zandueta152 in the present case. In that case, the Court allowed
Juana Ordoñez to be subrogated to Aquilino Calvo as defendant
Second, PIATCO itself caused the delay of the expropriation because Ordoñez obtained a final judgment in her favor which
proceedings before the RTC. PIATCO did not produce the entitled her to levy the land sought to be expropriated.
vouchers, purchase orders, and as-built documents which were Furthermore, Ordoñez was not a party to the expropriation case.
in its possession despite the Government's filing of a Motion for
Production and Inspection of Documents dated May 25,2006, The Government asserts that Takenaka and Asahikosan should
before the RTC.149 share in the BOC's expenses. Under Section 12, Rule 67 of the
Rules of Court, the rival claimants should shoulder their costs in
Third, in Eastern Shipping Lines v. CA,150 the Court pronounced litigating their claim while the property owner should shoulder
that unliquidated claims are not subject to legal interest, such as the costs of the appeal if he appeals the case and the appellate
the present case. court affirms the lower court's judgment.

Fourth, the law and jurisprudence on the imposition of interest To divide the BOC's expenses between the Government and
does not address the peculiar situation where the NAIA-IPT III is PIATCO would result in unjust enrichment. Under Section 1, Rule
being expropriated as a direct result of the nullification of the 142 of the Rules of Court, the court shall have the power to divide
PIATCO contracts. The application of the law and jurisprudence the costs of an action as may be equitable.
on the imposition of interest would not result in a fair and
equitable judgment for the Government. The Court must apply Furthermore, Takenaka and Asahikosan actively participated in
equity in the absence of a specific law applicable in a particular and benefited from the proceedings before the BOC, which
case or when the remedy afforded by the law would be inadequate included the London awards in the computation of just
to address the injury suffered by a party. compensation. Takenaka and Asahikosan likewise relied on the
Final Report in their Appellant's Brief dated October 3, 2012, and
The Government additionally complains that, since November in their Reply Brief dated January 20, 2013.
2002, "long before the institution of the expropriation [complaint]
in December 2004," Takenaka and Asahikosan prevented it from The Government contends that Takenaka and Asahikosan's
entering the NAIA-IPT III.151 computations of actual construction cost of the NAIA-IPT III are
conflicting.
G.R. No. 209696
In their Manifestation dated December 9, 2010, Takenaka and
Asahikosan stated that the actual construction cost amounted to

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CASES ON EVIDENCE

$360,969,790.82. However, in his report, Mr. Gary Taylor The Government claims that PIATCO failed to substantiate the
appraised the actual construction cost at US$323 million, "plus attendant costs. The documents attached to the Compliance
other costs that were incurred by various parties during its dated December 14, 2010, are mostly summary of payments that
conception and construction plus any property appreciation."153 PIATCO allegedly paid to the consultants. However, PIATCO failed
Mr. Gary Taylor further stated that the "true value of the NAIA- to prove that the alleged consultants rendered actual service
IPT III facility is nearer to US$408 million, given the fact that the related to the construction of the NAIAIPT III. Reyes Tacandong &
Republic's expert, Gleeds, failed to recognize or include any Co. merely verified the mathematical accuracy of the schedules,
values for [the] design and other consultants (10%) or property including the computation of the inflation rate. Furthermore, the
inflation based on GRP schedules (15%)."154 However, Mr. Taylor receipts that PIATCO submitted are not enough to cover its
did not explain how he arrived at the amount of $408 million. claimed just compensation.156

The Government adds that Takenaka and Asahikosan's actual G.R. No. 181892
construction cost of $360,969,790.82 is erroneous as the London
and Makati awards include interests, attorney's fees and costs of The Government disputes the RTC's appointment of an
litigation. Furthermore, Takenaka and Asahikosan's "as-built" independent appraiser of the NAIA-IPT III. It claims that Section
drawings are not truly "as-built." The drawings do not reflect the 11 of RA 8974 IRR solely authorizes the implementing agency to
quality and exact detail of the built portions of the NAIA-IPT engage the services of an appraiser in the valuation of the
III.155 expropriated property, while under Section 10 of RA 8974 IRR, it
is the implementing agency that shall determine the valuation of
G.R. No. 209731 the improvements and/or structures on the land to be acquired
using the replacement cost method. Pursuant to these provisions,
The Government disputes PIATCO's claim that it was denied due the Government engaged the services of Gleeds, Ove Arup and
process when it was not furnished a copy of the Final Report. The Gensler for purposes of appraising the NAIA-IPT III.
Government points out that all the parties in the case were not
given a copy of the Final Report. Furthermore, PIATCO belatedly The Government also argues that the appointment of an
raised this issue; it was brought for the first time on appeal before independent appraiser would only duplicate the efforts of the
this Court. existing appraisers. A court appointed appraiser and the existing
appraisers would perform the same task of determining the just
The Government also emphasizes that PIATCO immediately filed a compensation for the NAIA-IPT III. Thus, the RTC should have
notice of appeal a day after its receipt of the RTC decision. This is relied instead on the opinion of the internationally-renowned
contrary to PIATCO's claim that it wanted to secure a copy of the appraisers that the Government hired.
Final Report and subject it to clarificatory hearing.
The Government likewise avers that the appointment of an
Even assuming that the RTC erred in not furnishing the parties independent appraiser would only render the expropriation
copies of the Final Report, the lapse is merely an "innocuous" proceedings more costly. The Government would be forced to pay
technicality that should not nullify the RTC rulings. for the services of two appraisers, which is not the intention of RA
8974. The court-appointed appraiser, too, would render the

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CASES ON EVIDENCE

BOC's functions useless. Under Rule 67 of the Rules of Court, it financing costs form part of attendant costs since these costs are
is the BOC that is required to receive evidence in the indispensable in completing a complex infrastructure project.
determination of just compensation. Rule 67 of the Rules of Court
does not require the appointment of an appraiser in eminent PIATCO further alleges that its attendant costs are supported by
domain cases. the attachments in its Compliance dated December 14, 2010,
including the summary of payments for incurred attendant costs,
Lastly, the Government complains that the RTC order requiring it official receipts, statements of account, sales invoices,
to submit a Certificate of Availability of Funds is vague because endorsements, insurance policies and other related documents,
the RTC did not specify the costs of the expropriation acknowledgement receipts, agreements, invoices, and bonds. It
proceeding.157 claims that Reyes Tacandong & Co examined these documents
and confirmed that the attendant costs amount to
B. PIATCO's Position $70,197,802.00 in its Report of Factual Findings dated December
14, 2010.
G.R. No. 209731
PIATCO asserts that its submission of the summary computation
PIATCO argues that the RTC rulings are null and void for the is justified under Section 3 (c), Rule 130 of the Rules of Court
failure of the RTC clerk of court to furnish them copies of the which allows the party to submit non-original copies if the
BOC Final Report. Sections 7 and 8, Rule 67 of the Rules of Court original consist of numerous accounts or other documents that
require that the parties be given ten days within which to file their the court cannot examine without great loss of time; the fact
objections to the findings of the commissioners. sought to be established from these, after all, is only the general
result of the whole.
On its base value of $360,969,790.82, PIATCO insists that its
valuation is supported by a preponderance of evidence, PIATCO likewise argues that the total construction cost of
particularly by the As-Built Drawings and the Bills of Quantities $431,167,593.00 - which is the sum of $360,969,791.00 and
submitted by Takenaka and Asahikosan. The CA should not have $70,197,802.00 - should be converted to 2004 values since the
relied on the Government's self-serving evidence in computing the reckoning period of just compensation is the date of taking or the
base value of the NAIA-IPT III. date when the complaint was filed, whichever is earlier. It posits
that the amount of $431,167,593.00 should thus be multiplied by
PIATCO also cites the CA's failure to include the attendant costs 1.0971 - the prevailing inflation rate from November 29, 2002, to
in the valuation of the NAIA-IPT III as an omission; the CA merely December 21, 2004 - for a total amount of $470,450,825.00.
recognized the construction cost valuation of the terminal
pursuant to the Gleeds Report. PIATCO alleges that it incurred The sum of $470,450,825.00 should further earn an interest rate
attendant costs of $70,197,802.00 apart from the construction of 12% per annum beginning December 21,2004, until full
cost of $360,969,790.82. It also emphasizes that its consultancy payment. PIATCO maintains that the Government's deposit in an
fees are even below the international norms, as shown in the escrow account of a portion of just compensation is not
Scott Wilson Report. It also claims that site preparation costs, equivalent to payment; hence, interest on the full amount of just
legal costs in planning and constructing the development, and compensation shall continue to apply.

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CASES ON EVIDENCE

that Kaczmarek was not cross-examined and his identity,

PIATCO contends that the CA's reduction of interest rate to 6% is knowledge, and credibility were not established before the trial
erroneous because the Court, in numerous cases, has court. The Government is estopped from introducing new
consistently imposed 12% interest per annum on just evidence before the appellate court since it objected to Takenaka
compensation. PIATCO emphasizes that the imposition of interest and Asahikosan's introduction of new and additional evidence
on just compensation is not based on contract, but on the before the CA.
owner's right to be immediately paid just compensation.
As its last point, PIATCO posits that Section 10 of RA 8974 IRR
Finally, PIATCO prays that it be paid all income generated from does not allow the deduction of depreciation, deterioration, and
the operations of the NAIA-IPT III, from the date of taking up to costs for non-compliance with contract specifications from the
the present.158 replacement cost.

G.R. No. 209917 Depreciation is merely an accounting concept that facilitates the
standard of decreasing asset values in the books of accounts. It is
PIATCO asserts that the NAIA-IPTIII does not suffer from massive not a method of valuation, but of cost allocation; an asset may
structural defects; that the Government's reliance on the Ove still be valuable and yet appear fully depreciated in the financial
Arup Report is self-serving. The Government would not have statements. If at all, depreciation was only relevant after the
expropriated the NAIA-IPT III if it truly believed that the terminal Government took possession and operated the NAIA-IPT III.159
suffered from massive structural defects. Furthermore, the
MIAA's Project Management Office oversaw the construction of G.R. No. 209696
the NAIA-IPT III to ensure that the terminal complied with the
agreed specifications under the relevant contracts between PIATCO agrees with the CA that just compensation must be
PIATCO and the Government. directly paid to it as the owner of the NAIA-IPTIII. It stresses that
RA 8974 and its implementing rules clearly provide that the
PIATCO contends that the depreciation, deterioration, and costs owner of the expropriated property shall receive the entire
for non-compliance with contract specifications should not be amount of just compensation.
deducted from the base value of the NAIA-IPT III. The base value
of $300,206,693.00 should be the least amount that the PIATCO insists that it would be erroneous to create an escrow
Government should pay. The measure of just compensation is the account in favor of Takenaka and Asahikosan since the
fair and full equivalent for the loss sustained by the property enforceability of Claim Nos. HT-04-248 and HT-05-269 in
owner, not the gain that would accrue to the condemnor. Philippine jurisdiction has yet to be decided by the Court in G.R.
No. 202166. It points out that the main issue in G.R. Nos.
PIATCO also asks this Court to strike from the record the affidavit 209731, 209917, and 209696 is the amount of just
of Kaczmarek and other attachments in the Government's motion compensation, not the determination of Takenaka and
for partial reconsideration dated August 22, 2013. The Asahikosan's money claims against PIATCO. Takenaka and
Government should not be allowed to present new evidence on Asahikosan's insistence to enforce their money claims against
the valuation of the NAIA-IPT III before the CA. PIATCO points out

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CASES ON EVIDENCE

PIATCO in G.R. Nos. 209731, 209917 & 209696 constitutes be expropriated. The trial court is not bound by the report of the
forum shopping and is still premature. commissioners and of the independent appraisers, much less of
the findings of the Government-hired appraisers.
PIATCO contends that Takenaka and Asahikosan have no
standing to demand the creation of an escrow account in their PIATCO asserts that the Government is estopped from assailing
favor. Section 9, Rule 67 of the Rules of Court does not apply in the appointment of an independent appraiser. The Government
this case because there are no conflicting claims regarding the voluntarily participated in the nomination of an independent
ownership of the NAIA-IPT III. Furthermore, the Court appraiser, and in fact, submitted its own nominees before the
categorically stated in Gingoyon that PIATCO owns the NAIA-IPT trial court.
III. PIATCO further argues that the rules on preliminary
attachment do not apply to this case. Mere apprehension that Contrary to the Government's claim, the RTC did not arbitrarily
PIATCO would abscond from its financial liabilities is not a appoint DG Jones and Partners as an independent appraiser. The
ground for the attachment of the creditor's assets. Moreover, an RTC in fact required the nominees to submit their written
artificial entity cannot abscond. PIATCO likewise denies that it proposals and invited them to personally appear before the
refuses to pay Takenaka and Asahikosan's money claims. PIATCO commissioners and the trial court prior to the issuance of the
posits that the eminent domain case is not the proper venue for May 3, May 18,and January 7, 2008 orders.
the adjudication of Takenaka and Asahikosan's money claims.160
PIATCO argues that the Government should solely bear the
G.R. No. 181892 expenses of DG Jones and Partners. Section 12, Rule 67 of the
Rules of Court provides that all costs, except those of rival
PIATCO agrees with the RTC's appointment of DG Jones and claimants litigating their claims, shall be paid by the plaintiff,
Partners as an independent appraiser. The determination of just unless an appeal is taken by the owner of the property and the
compensation is essentially a judicial function. The trial court's judgment is affirmed, in which event the costs of the appeal shall
power to appoint commissioners is broad enough to include the be paid by the owner.161
power to appoint an appraiser who shall assist the commissioners
in ascertaining the amount of just compensation. The latter power C. Takenaka and Asahikosan's Positions
is inherent in the court's task to receive evidence and to arrive at
a fair valuation of the expropriated property. G.R. No. 209696 and G.R. No. 209731

Section 5 (g), Rule 135 of the Rules of Court allows the court to Takenaka and Asahikosan argue that law and equity dictate that
amend and control its processes and orders so as to make them just compensation of at least $85,700,000.00 should be set aside
consistent with law and justice. Furthermore, nothing in RA 8974 to answer for their money claims against PIATCO.RA 8974 does
IRR that prohibits the trial court from appointing an independent not prohibit the creation of an escrow account pending the
appraiser. determination of the parties' conflicting claims on the property
and on the just compensation.
Section 6, Rule 67 of the Rules of Court provides that all parties
may introduce evidence on the valuation of the property sought to

83
CASES ON EVIDENCE

Takenaka and Asahikosan allege that PIATCO is a shell Under Section 9, Rule 67 of the Rules of Court, if there are
corporation with no significant assets, that has repeatedly conflicting claims on the property, the court may order the just
defaulted on its monetary obligations. They emphasize that compensation to be paid to the court for the benefit of the person
PIATCO did not pay Takenaka and Asahikosan despite its receipt adjudged in the same proceeding to be entitled thereto. Takenaka
of the ₱3 billion proffered value from the Government. Takenaka and Asahikosan argue that they are the lawful recipients of just
and Asahikosan seek the creation of an escrow account to compensation as the real builders of the NAIA-IPT III and as the
preserve their property rights against PIATCO. They posit that prevailing parties in Claim Nos. HT-04-248 and HT-05-269.
PIATCO may abscond after its receipt of the remaining just
compensation from the Government. Even assuming that PIATCO is the owner of the NAIA-IPT III, the
owner of the expropriated property is not solely entitled to the full
PIATCO would profit by at least $155,000,000.00 if it solely amount of just compensation.
receives the entire amount of $431,167,593,000.00 (PIATCO's
claimed just compensation as of December 2002). PIATCO has In Republic v. Mangotara,162 citing de Knecht v. CA,163 the
judicially admitted that it has paid Takenakaand Asahikosan only Court held that just compensation is not due to the property
$275,000,000.00. owner alone; the term "owner" likewise includes those who have
lawful interest in the property such as a mortgagee, a lessee, and
Takenaka and Asahikosan assert that the interest of justice will a vendee in possession under an executory contract. In Philippine
be served if the Court allows the creation of an escrow account in Veterans Bank v. Bases Conversion Development Authority,164
their favor. They point out that the lower courts already ruled on the Court held that just compensation may be deposited with the
the enforceability of Claim Nos. HT-04-248 and HT-05- court when there are questions regarding the ownership of the
269.Furthermore, the Court, in Gingoyon, merely ordered the expropriated property. In Calvo v. Zandueta,165 the Court
direct payment of just compensation to PIATCO in order to ensure deferred the release of just compensation pending the
that the builder of the NAIA-IPT III is compensated by the determination of the ownership of the expropriated property,
Government as a matter of justice and equity. Takenaka and despite the finality of the order allowing the release of just
Asahikosan underscore that they are the real builders of the compensation.
NAIA-IPT III as PIATCO's subcontractors.
Takenaka and Asahikosan refuse to share in the expenses of the
Takenaka and Asahikosan maintain that Section 9, Rule 67 of the BOC. Under Section 12, Rule 67 of the Rules of Court, the costs
Rules of Court apply with respect to the adjudication of the of the expropriation suit shall be shouldered by the Government.
parties' conflicting just compensation claims. The Court did not The Government would be unjustly enriched if other parties are
declare in Gingoyon that Rule 67 of the Rules of Court shall not required to shoulder the costs of the suit. It would also be unfair
apply to the payment of final just compensation. The Court to require Takenaka and Asahikosan to share in the expenses of
merely applied RA 8974 in Gingoyon insofar as the law prescribes the BOC since they were not furnished copies of the BOC Final
direct payment as a prerequisite for the issuance of a writ of Report, in violation of their right to due process.166
possession in eminent domain cases.
G.R. No. 209917

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CASES ON EVIDENCE

Takenaka and Asahikosan argue that deductions for depreciation Capacity Rate (DCR)/m.1.10 criteria was more than those used
and deterioration are inconsistent with the concept of for the retrofit design. The DCR measures the capacity of a
replacement cost as a measure of appraising the actual value of portion of the NAIANAIA-IPT III to carry the load it was designed
the NAIA-IPT III. In exercising the power of eminent domain, the to bear, with an optimal rate being less than 1.0. It likewise
Government takes the property on "as is, where is" basis. opined that the distance of the gap between the NAIA-IPT III's
Takenaka and Asahikosan point out that the Government has the bridge and building structure had a potential for seismic
option not to expropriate the terminal. Consequently, the pounding.
Government cannot base the value of the building on whether or
not the building caters to the Government's needs. Takenaka and Asahikosan posit that all the structural members
of the NAIA-IPT III have a DCR of less than 1.0based on the 1992
Furthermore, RA 8974 IRR provides that only the costs necessary National Structural Code of the Philippines (NSCP), the code
to replace the expropriated property should be considered in applicable when the NAIA-IPT III was designed and constructed.
appraising the terminal. Statutes authorizing the deprivation of Takenaka and Asahikosan opine that Ove Arup did not use the
private property, as in expropriation cases, must be strictly 1992 NSCP in the August 2007 Site Observation Report. Ove
complied with because these are in derogation of private rights. Arup's finding that the NAIA-IPT III has a potential for seismic
The Court's intent in Agan when it declared that equity should pounding is baseless. The terminal is designed and built to
likewise be considered in appraising the NAIA-IPT III is to prevent address the possibility of seismic pounding, taking into
the Government from undervaluing the property and enriching consideration that the NAIA-IPT III is built on Type I soil.
itself at the expense of private parties. Takenaka and Asahikosan claim that Ove Arup's finding was not
based on the AASHTO Standard Specification for Highway Bridges
Takenaka and Asahikosan also insist that a multi-level retail mall (16th Ed., 1996), the code applicable at the time the NAIA-IPT III
is not an unnecessary area. They point out that modern airports was designed and built. Takenaka and Asahikosan likewise argue
are subsidized by income from retail malls and cannot operate that Scott Wilson did not admit that the NAIA-IPT III suffered
profitably without this additional income. from structural defects. They clarify that the statements in the
Scott Wilson report "were merely intended to accommodate [the]
Takenaka and Asahikosan agree with the CA's finding that the changes that the client wished to effect."167 They also point out
NAIAIPT III is structurally sound. There is no clear evidence that that the Government stated in its petition (in G.R. No. 209917)
the collapse of the ceiling of the NAIA-IPT III was caused by the that "additional work is required to complete the terminal
terminal's structural defects. The CA correctly concluded that the structure to make it compliant with the standards of Takenaka
ceiling's collapse is merely a finishing and aesthetic issue. and Asahikosan."168

They emphasize that Mr. Gary Taylor, their hired appraiser, To lay the structural issue to rest, Takenaka and Asahikosan
assailed the qualifications, the methodology, and the findings of consulted Meinhardst (Singapore) Pte Ltd., their Structural
Ove Arup in its August 2007 Site Observation Report. Design Consultant, to rebut TCGI's findings. They also hired
Furthermore, Ove Arup made several conflicting findings on the disinterested American experts in the construction industry - Mr.
structural soundness of the NAIA-IPT III. Ove Arup concluded S.K. Ghosh of S.K. Ghosh Associates, Inc.; Mr. Robert F. Mast,
that the number of structural members failing the Demand PE, SE of Berger/Abram Engineers, Inc.; and Mr. Mete A. Sozen -

85
CASES ON EVIDENCE

to validate Meinhardst's conclusions. These experts unanimously b. Ove Arup evaluated the NAIA-IPT III's Elevated Roadway using
concluded that the NAIA-IPT III's design is structurally sound the Seismic Retrofitting Manual for Highway Structures, which is
because it complied with the 1992 NSCP, thus, effectively irrelevant because there is no need for a seismic retrofit of the
negating the Government's claim that the NAIA-IPT III suffers NAIA-IPT III's Elevated Roadway;
from structural defects. Takenaka and Asahikosan impugn the
ASEP Report. They reiterate that they constructed the NAIA-IPT c. Ove Arup's suggestion that an in-situ measurement of the
III in accordance with the Onshore Construction and Offshore geometry data of key structural components be undertaken is
Procurement Contracts and the prevailing building code at the unnecessary and irrelevant to a peer review of the design of the
time of the design and construction of the NAIA-IPT III. The NAIA-IPT III's Elevated Roadway;
statement in the ASEP Report that "the NAIA-IPT III may be
partially opened provided that retrofitting works are done prior to d. Ove Arup made an incorrect assessment of the type of
its full operation" does not mean that the terminal is defective. foundation material with respect to soil bearing capacity;
The remediation works were solely to ensure that the NAIA-IPT III
structures are compliant with the current standards, which were e. Ove Arup used inappropriate codes for the assessment of the
not yet in effect when the construction of the NAIA-IPT III took bearings of the NAIA-IPT III's Elevated Roadway;
place.
f. Ove Arup's analysis suggests that 36 pier columns of the NAIA-
Messrs. Meinhardt opined that the scope of the proposed IPT III's Elevated Roadway are allegedly under strength, but fails
retrofitting works shows that the structural design of the NAIA- to quantify the ratio of the column effect to the corresponding
IPT III is not defective because the proposed retrofitting works are capacity;
not related to the alleged structural defects of the NAIA-IPT III vis-
à-vis the 1992 NSCP. He also stated that the proposed retrofitting g. AECOM objects to Ove Arup's criticism that the value of the
works are meant to reinforce the NAIA-IPT III which is already soil-bearing capacity used for the length of the bridge of the NAIA-
compliant with the 1992 NSCP. IPT III's Elevated Roadway needs to be justified, since the design
of the NAIA-IPT III's Elevated Roadway must be judged on the
Takenaka and Asahikosan likewise engaged the services of geotechnical information available to AECOM at the time the
AECOM Australia Pty. Ltd. to conduct a technical review of the bridge was made. No foundation could have been built without
Review on TCGI Report of Civil Design Review and Evaluation the foundation bearing capacity results having been submitted to
(Elevated Roadway prepared by Ove Arup & Partners HK Ltd. the relevant overseeing authority and approved thereby;
Philippines Branch). AECOM criticized the Ove Arup's review as
follows: h. Ove Arup used an incorrect site coefficient for the site's soil
type, which resulted in seriously erroneous input data, thus, any
a. Ove Arup valuated the NAIA-IPT's Elevated Roadway using the conclusions or recommendations derived from these data are
AASHTO Manual of Bridge Evaluation and the FHA Bridge rendered invalid;
Inspectors Reference Manual, which are irrelevant to any
discussion of its design; i. Ove Arup's claim that there are "failures" in the elastomeric
bearings/bearing pads is based on an Australian design code

86
CASES ON EVIDENCE

which did not exist at the time the NAIA-IPT III's Elevated
Roadway was designed; In G.R. Nos. 209917, 209696, and 209731, we resolve the
following issues:
j. Takenaka and Asahikosan were never provided a copy of the
TCGI Report that was used as basis for the ARUP Report; (1) Whether the RTC's May 23, 2011 decision in Civil Case No. 04-
0876 is null and void for violation of PIATCO, Takenaka and
k. There are serious discrepancies between the Ove Arup Report Asahikosan's right to procedural due process;
and the referenced, yet unseen TCGI Report;
(2) Whether the CA legally erred in computing just compensation
l. The NAIA-IPT III's Elevated Roadway complies with the project in the expropriation of the NAIA-IPT III;
design codes in force at the time it was designed; and
(a) Whether "fair market value" and "replacement cost" are similar
m. AECOM refutes Ove Arup and TCGI's suggestion that the eminent domain standards of property valuation;
NAIA-IPT III's Elevated Roadway requires retrofitting or any
remedial work. (b) Whether the depreciated replacement cost approach or the
new replacement cost approach shall be used in the appraisal of
Takenaka and Asahikosan aver that the Government would be the NAIA-IPT III;
able to lessen its expenses, operate the NAIA-IPT III, and earn
revenues sooner as there is, in fact, no need to perform (c) With respect to the computation of construction costs, the
retrofitting works on the terminal. issues are:

Takenaka and Asahikosan point out that the design of the NAIA- 1. Whether the Government's computation of construction cost is
IPT III is bilaterally symmetrical which means the structural supported by a preponderance of evidence;
system of one area is virtually identical to others. Since the
Government opened certain areas of the NAIA-IPT III to the 2. Whether the NAIA-IPT III suffered/suffers from massive
public, it follows that the unused areas are also structurally structural defects;
sound considering that majority of the terminal building share
the same structural design. 3. Whether the alleged unnecessary areas should be excluded
from the computation of construction cost;
They also deny that they employed armed guards to prevent the
MIAA and DOTC officials from entering the premises of the NAIA- (d) With respect to the computation of attendant costs, the issues
IPT III. They point out that the Government did not raise this are:
issue before the lower courts. They also state that they have
provided the parties all documentary evidence necessary in 1. Whether PIATCO's claimed attendant cost is supported by a
appraising the NAIA-IPT III, such as the Bills of Quantities.169 preponderance of evidence;

VI. The Issues

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a) Whether the Court may accord probative value to photocopied (5) Whether the Government may take property for public purpose
voluminous documents allegedly proving PIATCO's attendant or public use upon the issuance and the effectivity of the writ of
costs; possession;

b) Whether the Court may accord probative value to the summary In G.R. No. 181892, the following issues are relevant:
report prepared by Reyes Tacandong & Co., which validated
PIATCO's computation of attendant costs; (1) Whether the appointment of an independent appraiser issue
has been rendered moot and academic by the RTC's promulgation
2. Whether attendant cost may be pegged at 10% of the of its rulings in Civil Case No. 04-0876; and
construction cost;
(2) Whether the issue of who shall pay the independent
3. Whether the Government included the attendant cost in its appraiser's fees has been rendered moot and academic by the
valuation of the NAIA-IPT III; RTC's promulgation of its rulings in Civil Case No. 04-0876.

(e) Whether depreciation may be deducted from the replacement VII. Our Ruling
cost of the NAIA-IPT III;
A. G.R. Nos. 209917, 209696 & 209731
(f) Whether rectification for contract compliance (for failure to
comply with bid documents; for inferior quality; and for the 1. The parties were afforded procedural
additional areas to be built)may be deducted from the due process despite their non-receipt
replacement cost of the NAIA-IPT III; of the BOC Final Report prior to the
promulgation of the RTC's May 23,
(g) Whether the replacement cost of the NAIA-IPT III shall be 2011 Decision.
adjusted to December 2004 values based on inflation;
Before ruling on the substantive issues posed, we first resolve the
(h) Whether the CA erred in imposing an interest rate of 6% per issue of whether the CA erred in ruling that the RTC's May 23,
annum on the replacement cost of the NAIA-IPT III; 2011 decision is valid.

(i) Whether PIATCO shall be entitled to the fruits and income of PIATCO, Takenaka and Asahikosan challenge the validity of the
the NAIA-IPT III; RTC's decision for alleged violation of their right to due process.
They point out that the RTC promulgated its decision in Civil
(3) Whether Takenaka and Asahikosan shall share in the Case No. 04-0876 on May 23, 2011, immediately after the release
expenses of the BOC; of the BOC's Final Report

(4) Whether the owner of the property sought to be expropriated on March 31, 2011. They complain that since the RTC's clerk of
shall solely receive the just compensation due; and court did not furnish the parties copies of the Final Report, the

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trial court violated Sections 7 and 8, Rule 67 of the Rules of Court The record will show that the parties exhaustively discussed their
as they failed to object to the Final Report's contents. positions in this case before the BOC, the trial court, the
appellate court, and this Court.
Rule 67 of the Rules of Court provides that the clerk of court shall
serve copies of the commissioners' final report on all interested They had ample opportunity to refute and respond to each other's
parties upon the filing of the report. Each party shall have ten positions with the aid of their own appraisers and experts. Each
days within which to file their objections to the report's party, in fact, submitted countervailing evidence on the valuation
findings.170 of the NAIA-IPT III. They also filed numerous and voluminous
pleadings and motions before the lower courts and before this
Upon the expiration of the ten-day period or after all the parties Court. The mere failure of the RTC's clerk of court to send the
have filed their objections and after hearing, the trial court may: parties copies of the BOC Final Report is not substantial enough
(a) accept the report and render judgment in accordance under the attendant circumstances to affect and nullify the whole
therewith; (b) for cause shown, recommit the report to the proceedings. Litigation is not a game of technicalities. Strong
commissioners for further report of facts; (c) set aside the report public interests require that this Court judiciously and decisively
and appoint new commissioners; (d) partially accept the report; settle the amount of just compensation in the expropriation of the
and (e) make such order or render such judgment as shall secure NAIA-IPT III. We cannot further delay this more-than a-decade
to the plaintiff the property essential to the exercise of his right of case and let interests accrue on just compensation by remanding
expropriation; and to the defendant, the just compensation for the case once more to the trial court.
the property so taken.171
2. Framework: Eminent domain is an
We rule that the parties' failure to receive the Final Report did not inherent power of the State
render the May 23, 2011 Decision null and void.
2.a. The power of eminent domain is a fundamental state power
The essence of procedural due process is the right to be that is inseparable from sovereignty.
heard.172 The procedural due process requirements in an
eminent domain case are satisfied if the parties are given the Eminent domain is a fundamental state power that is inseparable
opportunity to present their evidence before the commissioners from sovereignty. It is the power of a sovereign state to
whose findings (together with the pleadings, evidence of the appropriate private property within its territorial sovereignty to
parties, and the entire record of the case) are reviewed and promote public welfare. The exercise of this power is based on the
considered by the expropriation court. It is the parties' total State's primary duty to serve the common need and advance the
failure to present evidence on just compensation that renders the general welfare.174 It is an inherent power and is not conferred
trial court's ruling void. The opportunity to present evidence by the Constitution.175 It is inalienable and no legislative act or
during the trial remains to be the vital requirement in the agreement can serve to abrogate the power of eminent domain
observance of due process.173 when public necessity and convenience require its exercise.176

The decision to exercise the power of eminent domain rests with

the legislature which has the exclusive power to prescribe how

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CASES ON EVIDENCE

and by whom the power of eminent domain is to be exercised. 2.b.1. Fair market value is the general standard of value in
Thus, the Executive Department cannot condemn properties for determining just compensation.
its own use without direct authority from the Congress.177
Jurisprudence broadly defines "fair market value" as the sum of
The exercise of eminent domain necessarily derogates against money that a person desirous but not compelled to buy, and an
private rights which must yield to demand of the public good and owner willing but not compelled to sell, would agree on as a price
the common welfare.178 However, it does not confer on the State to be given and received for a property.184
the authority to wantonly disregard and violate the individual's
fundamental rights. Fair market value is not limited to the assessed value of the
property or to the schedule of market values determined by the
2.b. Just compensation is the full and fair equivalent of the provincial or city appraisal committee. However, these values may
property taken from the owner by the condemnor. serve as factors to be considered in the judicial valuation of the
property.185
The 1987 Constitution embodies two constitutional safeguards
against the arbitrary exercise of eminent domain: first, private Among the factors to be considered in arriving at the fair market
property shall not be taken for public use without just value of the property are the cost of acquisition, the current value
compensation;179 and second, no person shall be deprived of life, of like properties, its actual or potential uses, and in the
liberty, or property without due process of law.180 particular case of lands, their size, shape, location, and the tax
declarations. The measure is not the taker's gain but the owner's
Just compensation is defined as "the full and fair equivalent of loss.186 To be just, the compensation must be fair not only to the
the property taken from its owner by the expropriator." The word owner but also to the taker.187
"just" is used to qualify the meaning of the word "compensation"
and to convey the idea that the amount to be tendered for the While jurisprudence requires the "fair market value" to be the
property to be taken shall be real, substantial, full and ample.181 measure of recovery in expropriation cases, it is not an absolute
On the other hand, the word "compensation" means "a full and exclusive standard or method of valuation.188 There are
indemnity or remuneration for the loss or damage sustained by exceptional cases where the property has no fair market value or
the owner of property taken or injured for public use."182 where the fair market value of the property is difficult to
determine.
Simply stated, just compensation means that the former owner
must be returned to the monetary equivalent of the position that Examples of properties with no or with scant data of their fair
the owner had when the taking occurred.183 To achieve this market values are specialized properties or buildings designed for
monetary equivalent, we use the standard value of "fair market unique purposes.189 These specialized properties bear these
value" of the property at the time of the filing of the complaint for characteristics because they are "rarely x x x sold in the market,
expropriation or at the time of the taking of property, whichever is except by way of sale of the business or entity of which it is part,
earlier. due to the uniqueness arising from its specialized nature and
design, its configuration, size, location, or otherwise."190

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CASES ON EVIDENCE

Examples of specialized properties are churches, colleges,

cemeteries, and clubhouses.191 These also include airport In Gingoyon, we held that the construction of the NAIA-IPT III
terminals that are specifically built as "a place where aircrafts involves the implementation of a national infrastructure project.
land and take off and where there are buildings for passengers to Thus, for purposes of determining the just compensation of the
wait in and for aircraft to be sheltered."192 They are all NAIA-IPT III, RA 8974 and its implementing rules shall be the
specialized properties because they are not usually sold in the governing law.
ordinary course of trade or business.
Under Section 10 of the RA 8974 IRR, the improvements and/or
In the Tengson Report dated December 1, 2010, Gary Taylor structures on the land to be acquired for the purpose of
characterized the NAIA-IPT III as a specialized asset.193 Tim Lunt implementing national infrastructure projects shall be appraised
also stated in the Reply to Tengson International Ltd. Report and using the replacement cost method.
Response from Takenaka & Asahikosan dated December 7, 2010
that the market value of an airport will not be the same as the Replacement cost is a different standard of valuation from the fair
market value of other commercial, industrial, and residential market value. As we previously stated, fair market value is the
buildings within the Metro Manila region.194 price at which a property may be sold by a seller who is not
compelled to sell and bought by a buyer who is not compelled to
In cases where the fair market value of the property is difficult to buy. In contrast, replacement cost is "the amount necessary to
ascertain, the court may use other just and equitable market replace the improvements/structures, based on the current
methods of valuation in order to estimate the fair market value of market prices for materials, equipment, labor, contractor's profit
a property. and overhead, and all other attendant costs associated with the
acquisition and installation in place of the affected
In the United States, the methods employed include: (1) the cost improvements/structures."196 We use the replacement cost
of replacing the condemned property, less depreciation; (2) method to determine just compensation if the expropriated
capitalization of the income the property might reasonably have property has no market based evidence of its value.
produced; (3) the fair rental value of the property during a
temporary taking; (4) the gross rental value of an item over its 2.b.3. Replacement cost is only one of the standards that the
depreciable lifetime; (5) the value which the owner's equity could Court shall consider in appraising the NAIA-IPT III.
have returned, had the owner invested in monetary instruments;
(6) the cost of repair or the capitalized cost of inconvenience, In using the replacement cost method to ascertain the value of
whichever is less; and (7) the loss of investment expenses actually improvements that shall be expropriated for purposes of
incurred.195 The primary consideration, however, remains the implementing national infrastructure projects, Section 10 of RA
same - to determine the compensation that is just, both to the 8974 IRR requires the implementing agency to consider the kinds
owner whose property is taken and to the public that will and quantities of materials/equipment used, the location,
shoulder the cost of expropriation. configuration and other physical features of the properties, and
the prevailing construction prices, among other things.
2.b.2. Replacement cost is a different standard of value from fair
market value.

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CASES ON EVIDENCE

Section 5 of RA 8974 in this regard provides that the court may This Court, however, is not unmindful of the reality that the
consider the following relevant standards in eminent domain structures comprising the NAIA IPT III facility are almost complete
cases: and that funds have been spent by PIATCO in their construction.
For the government to take over the said facility, it has to
(a) The classification and use for which the property is suited; compensate respondent PIATCO as builder of the said structures.
The compensation must be just and in accordance with law and
(b) The developmental costs for improving the land; equity for the government cannot unjustly enrich itself at the
expense of PIATCO and its investors.(emphasis supplied)197
(c) The value declared by the owners;
We also declared in Gingoyon that:
(d) The current selling price of similar lands in the vicinity;
Under RA 8974, the Government is required to "immediately pay"
(e) The reasonable disturbance compensation for the removal the owner of the property the amount equivalent to the sum of (1)
and/or demolition of certain improvement on the land and for the one hundred percent (100%) of the value of the property based on
value of improvements thereon; the current relevant zonal valuation of the [BIR]; and (2) the value
of the improvements and/or structures as determined under
(f) The size, shape or location, tax declaration and zonal valuation Section 7. As stated above, the BIR zonal valuation cannot apply
of the land; in this case, thus the amount subject to immediate payment
should be limited to "the value of the improvements and/or
(g) The price of the land as manifested in the ocular findings, oral structures as determined under Section 7," with Section 7
as well as documentary evidence presented; and referring to the "implementing rules and regulations for the
equitable valuation of the improvements and/or structures on the
(h) Such facts and events as to enable the affected property land." Under the present implementing rules in place, the
owners to have sufficient funds to acquire similarly situated lands valuation of the improvements/structures are to be based using
of approximate areas as those required from them by the "the replacement cost method." However, the replacement cost is
government, and thereby rehabilitate themselves as early as only one of the factors to be considered in determining the just
possible. compensation.
Sy
In addition to RA 8974, the 2004 Resolution in Agan also
The Court explained in Agan and Gingoyon that the replacement mandated that the payment of just compensation should be in
cost method is only one of the factors to be considered in accordance with equity as well. Thus, in ascertaining the ultimate
determining the just compensation of the NAIA-IPT III. The Court amount of just compensation, the duty of the trial court is to
added that the payment of just compensation should be in ensure that such amount conforms not only to the law, such as
accordance with equity as well. RA 8974, but to principles of equity as well.(Emphasis
supplied)198
In Agan, we stated:

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CASES ON EVIDENCE

The Court's pronouncements in Agan and Gingoyon are purposes of the buyer's use. This may include building new
consistent with the principle that "eminent domain is a concept of structures, renovating existing structures, or changing the
equity and fairness that attempts to make the landowner whole. It components of an existing structure to maximize its utility."203
is not the amount of the owner's investment, but the 'value of the
interest' in land taken by eminent domain, that is guaranteed to There are various methods of appraising a property using the cost
the owner."199 approach: among them are the reproduction cost, the
replacement cost new, and the depreciated replacement cost.
In sum, in estimating the fair market value of the NAIA-IPT III, the Reproduction cost is the "estimated current cost to construct an
Court shall use(1) the replacement cost method and(2) the exact replica of the subject building, using the same materials,
standards laid down in Section 5 of RA 8974 and Section 10 of RA construction standards, design, layout, and quality of
8974 IRR. Furthermore, we shall likewise consider(3) equity in the workmanship; and incorporating all the deficiencies,
appraisal of NAIA-IPT III based on the Agan and Gingoyon cases. superadequacies, and obsolescence of the subject building."204 It
is the cost of duplicating the subject property at current
2.b.4. The use of depreciated replacement cost method is prices205 or the current cost of reproducing a new replica of the
consistent with the principle that the property owner shall be property being appraised using the same, or closely similar,
compensated for his actual loss. materials.206

The present case confronts us with the question of the specific In the United States, the recognized and used method in eminent
replacement cost method that we should use in appraising the domain cases in appraising specialized properties is the
NAIA-IPT III. The Government advocates the depreciated reproduction cost less depreciation approach.
replacement cost method formula while PIATCO argues for the
new replacement cost method formula. According to AmJur, this valuation method requires the inclusion
of all expenditures that reasonably and necessarily are to be
The replacement cost method is a cost approach in appraising expected in the recreation of the structure, including not only the
real estate for purposes of expropriation. This approach is construction itself but also collateral costs, such as the costs of
premised on the principle of substitution which means that "all financing the reproduction. "Historical associations and
things being equal, a rational, informed purchaser would pay no architectural values may enhance the market worth of a property
more for a property than the cost of building an acceptable by rendering it a specialty property; if so, the property may fairly
substitute with like utility."200 be worth the market price for similar properties, plus a premium
for its unique aspects. The premium value in such a case may
The cost approach considers the principles of substitution, supply also be determined by the cost of reproduction, minus
and demand, contribution and externalities.201 "The value of the depreciation. The value assigned has also been described as the
land and the value of improvements are determined separately total of the land value, plus the specialized value of the
according to their highest and best use."202 "Buyers assess the improvements, minus depreciation."207
value of a piece of property not only based on the existing
condition of the property, but also in terms of the cost to alter or Alfred Jahr explains the procedure in appraising a specialized
improve the property to make it functional specifically for the property using this method:

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CASES ON EVIDENCE

Depreciated replacement cost approach is the "method of

In the valuation of the improvement or plant, however, market valuation which provides the current cost of replacing an asset
value is no criterion because they have no market value. It is with its modern equivalent asset less deductions for all physical
specialty property. The improvements are therefore valued on deterioration and all relevant forms of obsolescence and
several properties. First, consideration is given tothe original book optimisation."213 Depreciated replacement cost is a method of
cost of the improvements, that is, the original cash expenditure appraising assets that are usually not exposed to the open
paid by the company for making the physical structures and market.214 A general formula of this method is as follows:
appurtenances. Its purpose is to act as some guide; it is not
value, however, and the courts recognize the fact that it is not a Cost of constructing the building (s) (including fees)
value of the physical structures. Second, evidence of reproduction Plus: Cost of the land (including fees)
cost new is then considered, for it is an element of value of = Total Costs
specialty property. In figuring this cost, all overhead expenses are Less: Allowance for age and depreciation
included. These expenses include engineering, construction, = Depreciated Replacement Cost215
management fees, insurance, legal expenses, office overhead, and
interest during construction period. Third, from the reproduction Under this method, the appraiser assesses the current gross
cost new an allowance for depreciation of the improvements must replacement of the assets, usually comprised of the land and the
be made. This depreciation is a matter of opinion, formed after a building. If the asset is an improvement, the appraiser assesses
physical examination of the improvements as a whole and is the cost of its replacement with a modern equivalent and deducts
generally not based on a straight-line depreciation according to depreciation to reflect the differences between the hypothetical
age. Some authorities, however, have not accepted such an item modern equivalent and the actual asset. The appraiser has to
of depreciation and prefer the straight-line method, at so much "establish the size and specification that the hypothetical buyer
per year. Obsolescence and functional depreciation are sometimes ideally requires at the date of valuation in order to provide the
deducted in addition to physical depreciation depending on the same level of productive output or an equivalent service."216 In
type of utility involved.208 appraising the improvement using the cost approach, the
appraiser considers the construction cost, and attendant cost.
Replacement cost new is "the estimated cost to construct a
building with utility equivalent to the appraised building using Construction costs are "the costs that are normally and directly
modern materials and current standards, design, and layout"209 incurred in the purchase and installation of an asset, or group of
or "the current cost of a similar new property having the nearest assets, into functional use." On the other hand, attendant costs
equivalent utility as the property being valued."210 It is the cost are "the costs that are normally required to purchase and install a
of acquiring a modern, functional equivalent of the subject property but that are not usually included in the vendor
property and "views the building as if reconstructed with modern invoice."217
methods, design and materials that would most closely replace
the use of the appraised building but provide the same Under Section 10 of the RA 8974 IRR, construction cost is the
utility."211 Replacement cost does not consider the most common current market price of materials, equipment, labor, the
forms of functional obsolescence.212 contractor's profit and overhead, while the attendant cost is the

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CASES ON EVIDENCE

cost associated with the acquisition and installation in place of Economic obsolescence results from "the impact of changing
the affected improvement. external macro- and micro-economic conditions on the property
and should not include internal factors which affect the
Once the gross replacement cost or the sum of construction and profitability of the occupying business, the writing down of such
attendant costs is derived, depreciation shall be deducted.218 factors to reflect the profitability of the business being a matter
Depreciation is classified into three categories: physical for the occupier. Within economic obsolescence, the prospect of
depreciation, functional obsolescence, and external obsolescence. extending the life of the building by capital investment should be
considered, as well as the fact that lack of maintenance can
Physical obsolescence refers to the "wear and tear over the years, accelerate the rate of depreciation."228
which might be combined with a lack of maintenance."219
In these consolidated cases, we rule that the depreciated
Physical depreciation is curable if "capital investment can bring replacement cost method, rather than the new replacement cost
the building to a state in which the degree of obsolescence is method, is the more appropriate method to use in appraising
mitigated (e.g., standards of finishes and services)."220 It is NAIA-IPT III.
incurable if "no amount of capital investment can rectify the
[depreciation] (for example, building structural flexibility)."221 Injustice would result if we award PIATCO just compensation
Curable physical depreciation is measured by the cost to cure or based on the new replacement cost of the NAIA-IPT III, and
retrofitting which could extend the life of the building.222 disregard the fact that the Government expropriated a terminal
Incurable depreciation or deterioration is estimated by a variety of that is not brand new; the NAIAIPT III simply does not have the
age-life or economic-age calculation methods.223 Functional full economic and functional utility of a brand new airport.
obsolescence "reflects the advances in technology which allow for
a more efficient delivery of services and goods from a building of Adjustments for depreciation should be made to reflect the
different designs and specifications."224 "Functional obsolescence differences between the modern equivalent asset and the actual
arises where the design or specification of the asset no longer asset or the NAIA-IPT III. The reason is that depreciation involves
fulfills the function for which it was originally designed."225 the loss of value caused by the property's reduced utility as a
result of damage, advancement of technology, current trends and
It is "usually related to operational inefficiencies that typically tastes, or environmental changes.229
involve either inadequacies or superadequacies. An inadequacy
occurs when the asset is not enough (e.g., the asset is too small) This conclusion is consistent with Section 10 of RA 8974 IRR
for it to operate efficiently. A superadequacy occurs when there is which allows us - and under the NAIA-IPT-III's circumstances
too much of an asset (e.g., the asset is too large) for it to operate effectively direct us - to consider the kinds and quantities of
efficiently."226 "To be feasible, the cost of replacing the obsolete materials/equipments used, configuration and other physical
item or design fault must be equal to or less than the anticipated features of the properties, among other things, in determining the
increase in value due to its cure. Curable functional obsolescence replacement cost of a building. To quote Section 10:
may require abatement by adding or remodelling or by removing a
superadequacy."227 Section 10. Valuation of Improvements and/or Structures -
Pursuant to Section 7 of the Act, the Implementing Agency shall

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CASES ON EVIDENCE

determine the valuation of the improvements and/or structures

on the land to be acquired using the replacement cost method. In using the depreciated replacement cost method of valuation,
The replacement cost of the improvements/structures is defined we do not rely on Kaczmarek's affidavit and other documents not
as the amount necessary to replacement presented before the trial court, and which were belatedly
improvements/structures, based on the current market prices for attached to the Government's motion for partial reconsideration
materials, equipment, labor, contractor's profit and overhead, and dated August 22, 2013.
all other attendant costs associated with the acquisition and
installation in place of the affected improvements/structures. In This Court exercises its judicial function to fix just compensation
the valuation of the affected improvements/structures, the in eminent domain cases on the basis of the law, the rules, and
Implementing Agency shall consider, among other things, the the evidence - including the appraisal reports and the embedded
kinds and quantities of materials/equipment used, the location, formula on how the parties arrived at the amounts of just
configuration and other physical features of the properties, and compensation - presented by the parties before the trial court and
prevailing construction prices. (Emphasis supplied) the entire record of the consolidated cases.

Depreciation should be deducted because modern materials and The determination of just compensation in eminent domain cases
design are assumed in the replacement cost method. In using the is essentially and exclusively a judicial function. Fixing the
depreciated replacement cost method, "[t]he intent is to provide a formula with definitiveness and particularity in just compensation
functionally similar improvement in order to apply a meaningful is not the function of the executive nor of the legislative branches,
level of depreciation."230 much less of the parties in this case. Any valuation for just
compensation laid down in the statutes may not replace the
If we adopt the new replacement cost method, PIATCO would be court's own judgment as to what amount should be awarded and
compensated for more than what it had actually lost. We must how this amount should be arrived at. Legislative enactments, as
remember that the concept of just compensation does not imply well as executive issuances, providing the method of computing
fairness to the property owner alone. In an eminent domain just compensation are treated as mere guidelines in ascertaining
situation, compensation must likewise be just to the public which the amount of just compensation. When acting within the
ultimately bears the cost of expropriation. The property owner is parameters set by the law itself, courts are not strictly bound to
entitled to compensation only for what he actually loses; what he apply the formula to its minutest detail, particularly when faced
loses is only the actual value of the property at the time of the with situations that do not warrant the formula's strict
taking.231 application. The courts may, in the exercise of their discretion,
relax the formula's application to fit the factual situations before
Just compensation must not extend beyond the property owner's them.233
loss or injury. This is the only way for the compensation paid to
be truly just, not only to the individual whose property is taken, We clarify, however, that this Court is not confined to the use of
but also to the public who will shoulder the cost of expropriation. the depreciated replacement cost method in determining the just
Even as under valuation would deprive the owner of his property compensation in these cases. Valuation is not exclusively a
without due process, so too would its overvaluation unduly favor technical matter used in arriving at a numerical measure of
him to the prejudice of the public.232 compensation. Rather, valuation in eminent domain is a judicial

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question based on equitable principles. Thus, this Court shall Add: Awards by the London Court
likewise endeavor to weigh the justness and fairness of Award by the Makati Court
compensation between the condemnor and the condemnee, Total Construction Cost 275,119,807.88
considering the factual circumstances of this case.234 84,035,974.44
1,814,008.50
3. Construction cost of the NAIA-IPT III 360,969,790.82
As we had earlier explained, construction cost is the amount
3.a. The base valuation of the NAIA-IPT III necessary to replace the improvements/structures, based on the
current market prices for materials, equipment, labor,
The Government claims that the construction cost or the base contractor's profit and overhead. Construction or direct costs is
valuation of the NAIA-IPT III amounts to $300,206,693.00, also defined as the costs that are "normally and directly incurred
itemized as follows:235 in the purchase and installation of an asset or group of assets
into functional use." Construction costs generally take into
Total $USD in Manila account the labor used to construct buildings; materials,
@3Q01 products, and equipment; contractor's profit and overhead,
General Requirements and Conditions $ 36,279,033 including job supervision, workers' compensation, fire and
Site Development $ 3,293,967 liability insurance, and unemployment insurance; performance
Terminal North Concourse $ 6,847,663 bonds, surveys, and permits; use of equipment; watchmen;
Terminal South Concourse $ 11,169,979 contractor's shack and temporary fencing; materials storage
Terminal Head House $ 60,763,798 facilities; and power-line installation and utility costs.236 We find
Terminal Building Services $ 54,982,628 the Government's computation of construction cost to be more
Multi Storey Car Park $ 8,791,857 realistic and appropriate. As the CA aptly observed, the Gleeds
Special Systems $ 69,321,503 Report is more "particularized, calculable and precise." Tim Lunt
Airside Infrastructure Works $ 31,065,288 sufficiently explained how he arrived at the value of
Landside Infrastructure Works $ 11,496,552 $300,206,693.00:
Terminal Support Facilities $ 6,194,425
Office Fit-out $ 0 2.2 Methodology
Builder's Work in Connection with
Services 2.2.1 Stated simply, valuation of any given structure is derived by
multiplying the structure's dimensions, i.e., quantities by a price
Included (i.e., rate) for constructing the works at a designated time and
Total $ USD $ 300,206,693 specific location, adding the cost of works in, on, and around the
On the other hand, PIATCO, Takenaka, and Asahikosan argue structure, and then accounting for inferior and non-performing
that the construction cost amounts to $360,969,791.00, viz: works, and rectification of those works.

In US dollars 2.2.2 I have arrived at the CCVs by carrying out the following
total payments of piaTCO sequence of tasks:

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1) Understanding the project as bid and as eventually 2.3.2 Members of my staff visited the Terminal 3 site between
constructed. May 30, 2006 and June 25, 2006, and based themselves in the
Terminal 3 complex to prepare quantities from construction
2) Preparing measured quantities for the major elements of the drawings made available by Takenaka, which, as noted, are not
completed works. properly designated 'As-built' drawings. To safeguard against
error or outdated dimensional information in the drawings, my
3) Establishing appropriate rates and prices for carrying out the staff checked certain major dimensions against the structures as
works at that time in Manila, Philippines. constructed and found the dimensions to be substantially
accurate. We did not check the drawings for detailed accuracy of
4) Adjusting the quantities and/or rates and prices to take into the contents in the drawings (i.e., what is within the dimensions).
account the extent of non-performing and/or inferior quality
works, the extent of rectification and remediation of the Terminal 2.3.3 Members of my staff also visited the Terminal 3 site between
to bring it to Code and making it structurally safe, and 22,193 February 26, 2008 and March 11, 2007. During that time, they
m2 of 'Unnecessary Areas' that was built in the Terminal. gathered pricing information from local construction contractors
to assist with the pricing of the CCVs.
5) Making provision for the cost of remediation on items which
deteriorated between December 2002 and December 2004. 2.3.4 I have examined all of the documents listed in Appendix 'B'
and had discussions with each of the Republic's airport
6) Making provision for the value of depreciation of Terminal 3 architectural and engineering experts on the content of their
between December 2002 and December 2004. reports to gain a full understanding of the main issues affecting
Terminal 3 and the CCVs.238
7) Deducting the cost of rectification to otherwise bring the
Terminal to the standards in the Bid Documents, including the 2.4. Preparing the Quantities
cost of building some 63,490 m2 of 'Necessary Operational Areas'
that was not built in the Terminal.237 Bills of Quantities

2.3 Understanding the Project 2.4.1 Construction projects are generally priced by construction
contractors for the purpose of competitive tendering using a Bill
2.3.1 I visited the Terminal 3 site between May 9, 2006 and May (or Bills) of quantities. Bills of Quantities are defined as:
12, 2006; May 30, 2006 and June 2, 2006; and June 20 and
June 25, 2006, when I held meetings with the Office of the A list of numbered items, each of which describes the work to be
Solicitor General, White & Case, MIAA, Arup, TCGI, and Gensler. done in a civil engineering or building contract. Each item shows
I based myself at the Terminal 3 complex during my visits in May the quantity or work involved. When the procedure of tendering is
and June 2006 and made a number of visits to various areas both adopted (as is usual), the Bill is sent out to contractors. Those
internal and external to Terminal 3 to gain a full understanding of contractors who wish to do the work return the bill, with an
the scope of the works performed.

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CASES ON EVIDENCE

extended price opposite each item. This priced bill constitutes the floor plate in each of the Terminal North Concourse, the Terminal
contractors' offer (or tender to bid) to do the work.239 South Concourse and the Terminal Head House buildings. Our
checks revealed no major discrepancies in respect of the physical
2.4.5 As noted, it was apparent from commencement of plan dimensions of the drawings against the actual dimensions of
preparation of the CCVs that it was doubtful that the set of the overall building floor plans. We therefore decided to use the
drawings listed in Appendix "B" that Takenaka provided were "As- drawings provided by Takenaka to produce the "Principle
built" or approved. Accordingly, because of uncertainty over the Quantities" dimensions required for us to prepare the CCVs.
accuracy of the "As-built" drawings, and to avoid preparing Bills
of Quantities based on potentially inaccurate information, I opted 2.4.8 The 'Principle Quantities' dimensions produced by Gleeds
not to produce full Bills of Quantities to form the basis of the from the drawings made available by Takenaka (listed in
CCVs. Instead, I relied on a "Principle Quantities" type Appendix 'B' Drawing List 1) are included in Appendix "G."
approach.240
2.4.9 It is standard good practice for quantities produced as part
Principle Quantities of the measurement process to be checked by another member of
the team who is not connected to the particular project. The
2.4.6 The "Principle Quantities" type approach is common in the quantities we produced were technically checked by another
cost planning and cost estimating of construction projects. member of Gleeds for consistency among inter-related items, e.g.,
CESMM3 describes Principle Quantities as "a list of principle consistency between floors and ceilings, and to identify any major
components of the works with their approximated estimated items not measured. Another member of Gleeds also checked the
quantities x x x given solely to assist surveyors and estimators in accuracy of the gross floor area, or "GFA," calculations for each of
making rapid assessment of the general scale and character of the buildings and no significant errors were identified.242
the proposed works prior to the examination of the remainder of
the bills of quantities and other contract documents on which 2.5. Arriving at the Rates and Prices
construction estimates or tenders will be based." This
methodology involves the preparation of quantities for the major 2.5.1 In order to derive the rates by which the quantities are
elements of the construction works where the costs cannot be produced to arrive at the CCV figures for this project, it is
estimated accurately from historical data, or for those areas necessary to establish:
which are known to vary in cost due to the quality or nature of
the works. The quantities produced by adopting this approach are ● The period of construction;
what I term "Principle Quantities."241
● The geographical location of the works;
2.4.7 Given the serious concerns over the accuracy of the so
called "As-built" drawings, and in order to make some assessment ● Access to the site;
of the dimensional accuracy of the Takenaka drawings, we carried
out a number of checks of the plan dimensions against our ● Any physical restrictions that might impede construction of the
measurement of the physical dimensions of the structures. works;
Overall dimensions (length and width) were checked for a single

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CASES ON EVIDENCE

● The duration for carrying out construction;

4) Convert the $USD @3Q01 prices to reflect local levels of pricing
● Database of costs; by applying a Location Adjustment using various methods and
sources of information to check the accuracy of the conversion.
● The specification of the works;
Each of these steps is described below.
● The quality of the works as constructed; and
3.1.3 First, the quantities produced for Terminal 3 were priced
● The extent of works requiring remediation and rectification using a mixture of current data in Gleeds' Database of costs and
published cost data, including Spons, and are priced at 2Q06
2.5.2 All of the above factors have an effect on the CCVs and it is prices. These costs are shown in the CCVs as £UK @ 2Q06. The
necessary to consider the implications of each to arrive at the rates used are included in Appendix "D." Support in respect of the
CCV figures. General guidance including a number of the above reference to the source derivation of each of the rates and prices
items are referred to in the document titled "Guide to Carrying included in the CCVs are also included in Appendix 'D' in the
Out Reinstatement Cost Assessments' published by the Royal column headed "Rate Source."244
Institution of Chartered Surveyors in September 1999.243
3.1.4 Second, it was necessary to adjust the prices to the
3. CCV CALCULATIONS midpoint of construction. As such the "£UK @ 3Q01" levels to
align them with required base costs for inclusion in both CCVs.
3.1 Calculation of Rates and Prices This conversion is made by using the BCIS All-in Tender Price
Indices published by the Royal Institution of Chartered surveyors.
3.1.1 The CCVs have been calculated in £UK costs converted to These costs are shown in the CCV as "£UK @ 3Q01."
$USD in Manila. x x x
3.1.5 Third, the "£UK @ 3Q01" costs were converted from UK
3.1.2 The basic approach to producing the CCV figures entails the pounds to US dollars using an exchange rate of UK£1 =
following steps: ISD$1.4540. This exchange rate is obtained by averaging the
exchange rates recorded for October 1, November 1 and
1) Establish UK pricing levels at 2nd Quarter 2006 (£UK @ 2Q06) December 3, 2001 (i.e., 3Q01) using historical data from the
(the date when the pricing exercise was initially carried out); xrates.com website. These particular dates represent the midpoint
of construction which I refer to earlier in this report. The result of
2) Convert the £UK @ 2Q06 prices into £UK at 3rd Quarter 2001 this conversion is shown in the column marked "£UK @ 3Q01" in
prices (£UK @ 3Q01) (the mid point of construction) using Appendix "D."
published and recognized indices;
3.1.6 Fourth, a "Location Adjustment" of the "$USD @ 3Q01" cost
3) Convert the £UK @3Q01 prices into US dollars at 3rd Quarter is necessary to account for the local cost of constructing in
($USD @3Q01) (the currency of the Termianl 3 Concession Manila. Local cost data gathered in Manila by members of my
Contract) using published currency exchange rates; team in February and March 2007 was compared directly with UK

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CASES ON EVIDENCE

prices to establish a ratio between the UK and the Philippines. the NAIA-IPT III. The Scott Wilson report states that the
The cost data gathered in Manila was compared on a like for like construction cost of the NAIA-IPT III amounted to US$338.83
basis with 1st Quarter 2007 UK prices. The results of this million, exclusive of attorney's fees, cost of the suit, interest rates,
comparison of rates result in the "Location Adjustment." The etc. This amount is inconsistent with PIATCO's claimed
Location Adjustments resulting from this calculation which are construction cost of $360,969,790.82 in its pleadings. The
applied to the CCV are UK£1=$USD0.7576 for the mechanical, relevant portion of the Scott Wilson report states:
electrical and plant elements. The average conversion rate across
the CCVs is UK£1=$USD0.5370 or 53.70%.245 2.1.4 When Scott Wilson was providing Lenders Technical Advice
to the Asian Development Bank in September 2002, the total
3.1.7 I double-checked my calculations of the Philippine prices by value of the construction contracts, estimated by PCI at that time,
considering what the conditions in the Philippines construction was as follows:
market were at the time the project would have been bid, and how
these conditions changed through to the end of 2002 when works On-Shore Contract: US$132.35 million
stopped on site. During the period of 1995 to 2002 the
"Construction Materials Wholesale Price Index" ("CMWPI") Off-Shore Contract: US$190.08 million
published by the 'Economic Indices and Indicators Division,
Industry and Trade Statistics Department, Philippine National Total US$322.43 million, excluding VAT
Statistics Office, Manila, Philippines' showed an average increase
of 2.8% per annum. 2.1.5 The contract priceS under the EPC Contracts are as follows:

During the periods 2000 to 2001 and 2001 to 2002 the increases On-Shore Contract. US$133,715,911
where 2.1% and 3.4% respectively. The increases are seen to be at
similar levels both in the period during which the works were Off-Shore Contract. US$190,037,328
priced, contracts executed and during construction and in my
opinion this would have resulted in no material difference to the Total US$323,753,239 excluding VAT
pricing level of the onshore works submitted at tender stage when
compared with the actual cost incurred. 2.1.6 The amounts certified for the costs of construction up to 23
June 2004 in payment certificate no 35 which is the last payment
3.1.8 I also have gathered information from other Chartered certificate that has been certified by PIATCO, are as follows:
Surveyors' published data which also indicate that the Location
Adjustment for the Philippines is in the region of 45%. This On-Shore US$133.64 Million
percentage is in line with the more detailed results obtained as
part of my own calculations.246 Off-Shore US$189.83 Million

We thus rule in favor of the Government's position and reject VAT US$11.43 Million
PIATCO's claimed construction cost. For one, PIATCO made
inconsistent statements with respect to the construction cost of ER Changes US $3.93 Million

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CASES ON EVIDENCE

PIATCO's statement that the total sum of $360,969,791.00 is

TOTAL US$338.83 Million evidenced by the As-Built Drawings is misleading. Takenaka and
Asahikosan's computation of construction cost includes items
2.2.13 Based on the certified IPC no. 35 for both Takenaka and which do not pertain to the construction of the NAIA-IPT III.
Asahikosan, the cost of the completed and certified works (as of PIATCO, Takenaka, and Asahikosan erroneously included in the
IPC No. 35) are as follows: construction cost the costs of the action, interest rates on the
judgment award of $14,827,207.00 and $52,008,296.54,
On-Shore US$133.64 Million attorney's fees, and litigation expenses.

Off-Shore US$189.83 Million These items were not directly incurred in the construction of the
NAIA-IPT III. In Claim No. HT-04-248, only $6,602,971.00 and
VAT US$11.43 Million $8,224,236.00 or the sum of $14,827,207.00 can possibly relate
to the construction cost of the NAIA-IPT III. On the other hand, in
ER Changes US $3.93 Million Claim No. HT-05-269, only the amounts of $21, 688,012.18 and
$30,319,284.36 or the total sum of $52,008,296.54 can be
TOTAL US$338.83 Million possibly imputed to the construction cost of the terminal.

2.2.14 The construction cost stated above x x x is at 2002 prices In any case, we cannot consider the London awards as evidence
(no adjustments for inflation/escalation) and are exclusive for all of the construction cost of the NAIA-IPT III. Todo so in this case is
other attendant costs, such as the engineering and architectural to recognize Claim No. HT-04-248 and Claim No. HT-05-269
service fees, quality assurance service fees, construction when their recognition and enforcement have yet to be decided by
supervision service fees, construction insurance, site development this Court in G.R. No. 202166. It is a basic rule that Philippine
costs, financing costs and other associated costs. 2.2.15 We courts cannot take judicial notice of a foreign judgment or
would conclude that the certified cost of construction of US$338 order.249
million and the other attendant costs are fair and reasonable. We
note that the Gleeds' estimate is close to the figure in 2.2.13 We can only recognize and/or enforce a foreign judgment or order
above. after a conclusive and a final finding by Philippine courts that: (1)
the foreign court or tribunal has jurisdiction over the case, (2) the
2.2.16 It is noted that in the Gleeds Report entitled Construction parties were properly notified, and (3) there was no collusion,
Cost Valuation for NAIA IPT3 dated 15th November 2010 the fraud, or clear mistake of law or fact.250
project Base Case CCV is valued at a gross amount of US$334.61
million (US$300.21 million + US$34.6 million deductions).247 PIATCO, Takenaka, and Asahikosan alleged that PIATCO paid
Takenaka and Asahikosan the sum of $275,119,807.88 pursuant
Furthermore, PIATCO did not present detailed supporting to the Onshore Construction and Offshore Procurement
information on how the certified construction cost of US$338.83 Contracts. According to the RTC (whose ruling the CA did not
million was arrived at.248 reverse), these parties failed to prove the fact of payment of
$275,119,807.88.

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CASES ON EVIDENCE

required to bring the Terminal to compliance with applicable

We add that the alleged payment of $275,119,807.88 does not building and airport codes as indicated in the Appendices of
support their allegations that this amount pertains to the Arup's Site Observation Report; and
construction cost of the NAIA-IPT III. Takenaka and Asahikosan's
admission that the sum of $275,119,807.88 were paid by PIATCO 4. The cost of seismic and gravity load structural retrofits for the
does not bind the Government who is not a party to the Onshore failed elements in the elevated roadway structures, as described
Construction and Offshore Procurement Contracts. If at all, the in Arup's Drawings listed in Appendix "B" Drawing List 3, Arup
Court can only recognize the sum of $66,834,503.54 from Review on "TCGI Report of Civil Design Review and Evaluation" -
PIATCO, Takenaka, and Asahikosan's computation of Elevated Roadway, dated March 2009; and other rectification
construction cost, which is much lower than the Government's works required to bring the elevated roadways to compliance with
computed construction cost of $300,206,693.00. applicable building and airport codes, as indicated in the
Appendices of Arup's Site Observation Report.252
Lastly, we note that Takenaka and Asahikosan's claimed
construction cost is different from the amount reflected in the Scott Wilson argued that no structural elements of the NAIA-IPT
Tengson Report. In this Report, Gary Taylor stated the "true value III actually failed.253 He emphasized that there were varying
of the NAIA-IPT III facility is nearer to US$408 million, given the opinions regarding the integrity of the NAIA-IPT III:
fact that Gleeds failed to recognize or include any values for
design & other consultants (10%) or property inflation based on 3.3.7 The adequacy of the structural frame, individual load
GRP schedules (15%)."251 bearing elements and foundations under "normal" gravity loads
should be able to be readily evaluated. However, there are clearly
3.b. Structural defects on the NAIA-IPT III differences of opinion between all 3 parties who have carried out
design and assessments in this regard in terms of the extent of
The Government contends that that the NAIA-IPT III suffers from 'apparent failed elements' under the design appraisal which
structural defects, as follows: ranges from:

1. Failed structural elements of the NAIA-IPT III, as identified in ● Meinhardt - zero failures
the Arup Seismic Evaluation Report and Gravity Loading and
Element Capacity Assessment; ● Arup reports under gravity loading - 4% of superstructure
elements and less than 1% of all substructure elements
2. The inferior quality of material used and works, including, for
example, floor tiling, plasterboard wall finishes and ceilings, and ● Arup reports under seismic loading - less than 1% of all primary
the internal and external metal paneling; RC and composite columns, around 3% of all primary RC beams,
around 6% of all shear walls, around 8% of piles (mostly at
3. The cost of seismic and gravity load structural retrofits for the shearwalls) and around 1% of mat footing locations. Differential
failed elements in the terminal buildings and multi-storey car settlements are considered insignificant to cause any additional
park structures, as described in Arup's Drawings listed in distress in the buildings. Pounding between floors of adjacent
Appendix "B" Drawing List 2 and other rectification works sectors is not an issue.

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CASES ON EVIDENCE

excess of US$800,000 have been made but the rational for the
● TCGI - extent not readily identifiable from documents reviewed quantification of the deduction is not explained. If the works were
although within Section 2.0 of the TCGI July 2008 report it states inferior to that specified then this would be reflected in the
that the evaluation did not yield results pointing to foundation payments made to Takenaka under the EPC contract.
instability as a cause for concern.
Scott Wilson likewise supported Takenaka and Asahikosan
3.3.8 On the basis of discussion in 3.3.6 above it would be position that the Government's experts examined the structural
reasonable to follow the assessment of the original designer integrity of the NAIA-IPT III using the recent building codes,
(Meinhardt) who also provided a Letter of Guarantee confirming which were not yet in place at the time the NAIA-IPT III was
the adequacy of their design, (ref para 3.3.30). designed and built.

He also disputed the Government's allegations that some portions 3.3.18 Seismic and gravity load retrofit and other rectification
of the NAIA-IPT III would not be able to sustain strong works required to bring the building to compliance with
earthquakes and that some areas of the NAIA-IPT III were built applicable building and airport codes.
using materials with inferior quality:
3.3.22 TCGI also provided an option titled "A Government
c. Seismic Activity (Terminal and Multi-Storey Carpark) Prerogative" which states:

3.3.12 It is understood from press reports that, since substantial Research in earthquake engineering has rapidly progressed to the
completion of the airport in 2002, Manila has been subjected to a extent that seismic design provisions for the design of new
number of earthquakes. It has been reported that on25 March buildings and procedures for the evaluation of existing ones have
2010 a strong earthquake measuring 6.2 on the Richter scale hit drastically evolved. The current edition of the National Structural
Metro Manila according to the government seismology institute. It Code of the Philippines (NSCP) is dated 2001, whereas Meinhardt
was further reported that in July 2010 "intense seismic activity used the 1992 edition which was applicable at the time the
persists in the Philippines and Manila continues to be struck by Terminal was designed.
moderate to strong earthquakes of 6.5 to 7.6 magnitude." We can
find no record relating to any damage being reported in terms of There are new published guidelines for the structural safety
the structure, finishes or services associated with NAIA Terminal assessment of existing buildings from such organizations as the
3 as a result of these occurrences. Federal Emergency Management Agency (FEMA) which have
evolved into published documents for the structural rehabilitation
xxxx of existing buildings. TCGI have therefore suggested that MIAA
and the Philippine Government may wish to use the more recent
3.3.14 Inferior quality of materials used, for example internal published documents to enhance/upgrade the facility.
finishes.
3.3.23 It would appear from the Arup documents reviewed that
3.3.15 Gleeds do (sic) not define exactly what areas they mean by they have taken this approach in their assessment of design i.e.,
this. There is a number of finished items where deductions in consideration of updated documents (NSCP 2001 and UBC 1997)

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CASES ON EVIDENCE

whilst Meinhardt used the relevant codes at the time of design (iv) TCGI used "Dynamic Analysis" in their modeling, whereas
which was NSCP 1992. Consequently any results from there is no requirement for such an analysis in the Philippine
assessments carried out to later published codes has no direct Structural Code - NSCP 1992.
bearing on the design of the facility which was carried out prior to
the issue of these later standards. As such any assessment and (v) TCGI & Ove Arup used the updated NSCP 2001 (and
proposed strengthening/retrofit works in this regard is considered UBC1997) Philipine Codes, yet Takenaka's design was based
to be an enhancement of the design and has no relevance on the upon the NSCP 1992 code because the 2001 updated was not
value of the NAIA Terminal 3 facility as constructed under the available when the NAIA 3 designs were completed in 2000.
original contract.
(vi) TCGI & Ove Arup reports were based upon a system which
On the other hand, the relevant portions of the Tengson Report incorporates frame beams and columns as primary structural
dated December 2010254 states: element, whereas the Takenaka design used a building frame
system (Sheer Wall System). Two differing design methods will
In addition, we should note herein that Takenaka's structural lead to different results.255
designer, Messrs. Meinhardt, concluded that its check on the
structural ductility requirements (as questioned by TCGI & Ove PIATCO also argued that it is not the sole entity responsible for
Arup) on elements which do not resist lateral forces, is in full the completion of and/or compliance with the outstanding items
compliance of the Philippine Code NSCP 1992 and its originating in the JAC project status summary report dated February 28,
design code ACI-318 (1989), and this is supported by several 2003. The summary report shows that some outstanding items
members of the American Concrete Institute (ACI). Both should be performed by the Government.256
Takenaka and other parties (including Meinhardt and members of
the ACI), have concluded that TCGI & Ove Arup reports use While Scott Wilson stated that only retrofit works actually
several conflicting and misunderstood mathematical models. undertaken should be taken into consideration in the valuation of
These include but are not limited to the following: the NAIA-IPT III,257 Takenaka and Asahikosan insisted that
subsequent rectification works in the NAIA-IPT III were only
(i) TCGI used larger loadings than those specified in the "Design & intended to ensure that the terminal would be compliant with the
Load Schedule Plan." current building laws and standards.258 They reiterated that the
design of the NAIA-IPT III was compliant with the NSCP 1992, the
(ii) Their modeling for "sector 3" uses incorrect storey elevations effective building code when the terminal was designed and
and the slab thickness did not match those on the "as built" built.259
plans.
3.b.1. The Court cannot consider
(iii) Beam section sizes do not match those shown on the "as the additional evidence submitted
built" plans. by Takenaka and Asahikosan
before the Court of Appeals

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CASES ON EVIDENCE

At the outset, we rule that we cannot consider Takenaka and

Asahikosan's attachments in their (1) Motion for Submission of This provision qualifies the CA's power to receive evidence in the
Additional Documents dated July 30, 2013;260 (2) Supplemental exercise of its original and appellate jurisdiction under Section 9
Motion for Submission of Additional Documents dated October 3, of BP 129, as amended:
2012;261 and (3) Second Supplemental Motion for Submission of
Additional Documents dated April 11, 2013 in CA G.R. No. CV- Sec. 9. Jurisdiction. - The Court of Appeals shall exercise:
98029.262 These attachments sought to refute the Government's
position that the NAIA-IPT III suffered from massive structural xxxx
defects.
The Court of Appeals shall have the power to try cases and
Takenaka and Asahikosan posit that they could have submitted conduct hearings, receive evidence, and perform any and all acts
reports before the trial court to show that the design of the NAIA- necessary to resolve factual issues raised in cases falling within
IPT III was structurally sound if the RTC had only furnished the its original and appellate jurisdiction, including the power to
parties copies of the BOC Final Report and afforded them the grant and conduct new trials or further proceedings. Trials or
opportunity to file a Comment on hearings in the Court of Appeals must be continuous and must
be completed within three (3) months, unless extended by the
the Final Report. Chief Justice.

Under Section 3, Rule 6 of the Internal Rules of the CA, the CA Since Takenaka and Asahikosan filed an ordinary appeal
may receive evidence in the following cases: pursuant to Rule 41 in relation to Rule 44 of the Rules of Court,
the CA could only have admitted newly discovered evidence.
(a) In actions falling within its original jurisdiction, such as (1) Contrary to Takenaka and Asahikosan's claim, the attachments
certiorari, prohibition and mandamus, (2) annulment of judgment to the motions are not newly discovered evidence. Newly
or final order, (3) quo warranto, (4) habeas corpus, (5) amparo, (6) discovered evidence is evidence that could not, with reasonable
habeas data, (7) anti-money laundering, and (8) application for diligence, have been discovered and produced at the trial, and
judicial authorization under the Human Security Act of 2007; which, if presented, would probably alter the result.263

(b) In appeals in civil cases where the Court grants a new trial on We find it hard to believe that Takenaka and Asahikosan could
the ground of newly discovered evidence, pursuant to Sec. 12, only have possibly secured the attachments after the trial court
Rule 53 of the Rules of Court; had rendered its decision. With the exercise of reasonable
diligence, Takenaka and Asahikosan could have produced these
(c) In appeals in criminal cases where the Court grants a new trial documents before the BOC since they were fully aware that the
on the ground of newly discovered evidence, pursuant to Sec. 12, Government presented evidence on the alleged structural defects
Rule 124 of the rules of Court; and of the NAIA-IPT III.

(d) In appeals involving claims for damages arising from In fact, in their Manifestation/Submission dated November 3,
provisional remedies. (Emphasis supplied) 2009, Takenaka and Asahikosan attached the "Report and

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CASES ON EVIDENCE

Response from Takenaka & Asahikosan, Contactors for the NAIA

3 Facility and Intervenors in the Expropriation case between the Under Section 3, Rule 131 of the Rules of Court, it is presumed
GRP and PIATCO - October 2009" to refute the allegations of that a person is innocent of wrong;265 that a person takes
structural defects. Moreover, Takenaka and Asahikosan ordinary care of his concerns;266 that private transactions have
manifested that they were reserving their right to submit been fair and regular;267 and that the ordinary course of
additional reports, comments, and memoranda with respect to business has been followed.268
this issue. The relevant portions of the Manifestation/Submission
dated November 3, 2009 provides: Based on these presumptions, we presume that Takenaka and
Asahikosan built the NAIA-IPT III in accordance with the
1. The record[s] of this case will show that to date, plaintiffs have specifications required under the Onshore Construction Contract
submitted various reports prepared by TCGI Engineers, Ove Arup and Offshore Procurement Contract. We also presume that the
& Partners Massachusetts, Inc. and Gleeds (Bristol) Partnership NAIA-IPT III is structurally sound and compliant with the
to this Honorable Court. The TCGI and Ove Arup Reports point applicable building codes and other laws at the time it was
out alleged defects on the IPT 3, while Gleeds made an attempt to designed and built. However, these presumptions are merely
establish the value of the IPT 3, taking into account the findings disputable presumptions and may be overcome by contradicting
of the TCGI and Ove Arup. Intervenors have not given their evidence. The burden of proof lies with the Government to prove
comments on these reports since they have not been required to by preponderance of evidence that the NAIAIPT III suffered from
do so by this Court. structural defects. "Preponderance of evidence" is the weight,
credit, and value of the aggregate evidence on either side and is
2. With the RTC's permission, intervenors respectfully submit the usually considered to be synonymous with the term "greater
attached "Report and Response from Takenaka & Asahikosan, weight of evidence" or "greater weight of credible evidence."269
Contactors for the NAIA 3 Facility and Intervenors in the
Expropriation case between the GRP and PIATCO - October 2009" In determining where the preponderance of evidence or superior
prepared by Mr. Gary Taylor, in response to the above mentioned weight of evidence on the issues involved lies, the court may
reports. Intervenors respectfully manifest that they are reserving consider all the facts and circumstances of the case, the witness'
their right to submit additional reports, comments and manner of testifying, their intelligence, their means and
memoranda in support of this submission and to aid this opportunity of knowing the facts to which they are testifying, the
Honorable Court in determining the true value of the IPT 3.264 nature of the facts to which they testify, the probability of their
(Emphasis supplied) testimony, their interest or want of interest, and also their
personal credibility in so far as the same may legitimately appear
3.b.2. Equiponderance of evidence on the alleged structural during trial. The court may also consider the number of
defects of the NAIA-IPT III favors PIATCO, Takenaka and witnesses, although preponderance does not necessarily lie with
Asahikosan. Nonetheless, even without considering and/or giving the greater number.270
probative value to the additional evidence presented by Takenaka
and Asahikosan before the CA, this Court finds that the The Government's burden of proof to show that the NAIA-IPT III is
Government failed to establish by preponderance of evidence that indeed defective does not shift to its adverse parties. The burden
the NAIA-IPT III suffered from structural defects.

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of proof remains throughout the trial with the party upon whom it
is imposed. In the present case, PIATCO, Takenaka and Asahikosan, met the
Government's allegations regarding the structural integrity of the
It is the burden of evidence that shifts from party to party during NAIA-IPT III.
trial.271 This means that the burden of going forward with the
evidence is met by the countervailing evidence of PIATCO, A reading of the reports of the parties' respective experts shows
Takenaka and Asahikosan which, in turn, balances the evidence that each party presented an equally persuasive case regarding
introduced by the Government. Thereafter, the burden of evidence the structural soundness or defect of the NAIA-IPTIII. The
shifts back to the Government. Government's case on the alleged structural defect of the NAIA-
IPT III has been met by equally persuasive refutations by the
In the present case, the experts and consultants of the experts of PIATCO, Takenaka and Asahikosan.
Government, PIATCO, Takenaka and Asahikosa arrived at
conflicting findings regarding the structural integrity of the NAIA- As a matter of law and evidence, the Government's case regarding
IPT III. The Government's experts detailed with particularity the this matter must fail. Since PIATCO, Takenaka and Asahikosan
alleged defects of the NAIA-IPT III, which allegations the experts of presented equally relevant and sufficient countervailing evidence
PIATCO, Takenaka and Asahikosan refuted with particularity. on the structural soundness of the NAIA-IPT III, the scales of
justice tilt in their favor. Neither party successfully established a
Under the equiponderance of evidence rule, when the scale of case by preponderance of evidence in its favor; neither side was
justice shall stand on equipoise and nothing in the evidence able to establish its cause of action and prevail with the evidence
inclines a conclusion to one side or the other, the court will find it had. As a consequence, we can only leave them as they are.275
for the defendant.272
We thus add to the construction cost the sum of $20,713,901,
If the facts and circumstances are capable of two or more itemized below:276
explanations, one of which is consistent with the allegations of
the plaintiff and the other consistent with the defense of the Item In Dollars
defendant, the evidence does not fulfill the requirement of Surface demolition 1,971,500
preponderance of evidence. When the evidence of the parties is in Structural retrofit 6,860,660
equipoise, or when there is a doubt as to where the Elevated road 2,443,276
preponderance of evidence lies, the party with the burden of proof Miscellaneous
fails.273 Alarms 154,460
Defective Ceiling 479,626
The reason for this rule is that the plaintiff must rely on the CUTE not working 2,774,563
strength of his evidence and not on the weakness of the Inferior FIDS 22,020
defendant's claim. Thus, even if the evidence of the plaintiff may BHS Inferior Screening Software 957,881
be stronger than that of the defendant, there is no preponderance Fire Protection Inferior coverage 924,851
of evidence on his side when this evidence is insufficient in itself Civil and HV
to establish his cause of action.274 Apron Civil 829,619

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Taxiway Civil 439,280 Bigger -sized columns will also increase their capacity against
Storm Water 2,604,081 combined stresses, while enlarged pile cap and footings will
HV 252,084 increase foundation capacity under compression. They also
Total 20,713,901 prevent movement of the foundation during earthquakes.
Admittedly, the Government did not open to the public certain
areas of the NAIA-IPT III because of uncertainties on their Steel jacketing is meant to resist the additional loads. Shear
structural integrity.277 The Scott Wilson Report also recognized blocks to pier headstock will provide a bridge interlock is meant
that some retrofit works should also be undertaken in some of the to distribute excess load along the carriage way.
areas of the NAIA-IPT III. It stated that only retrofit works actually
undertaken in the building should be taken into consideration in Enlarged pier footings will prevent foundation overturning during
appraising the NAIA-IPT III.278 earthquake events.

On August 14, 2012, the DOTC invited construction firms to Application of FRP to piers will also increase the column capacity
participate in the ₱212.3 million NAIA-IPT III structural retrofit and ductility against combined stresses due to earthquake forces.
project. The structural retrofit of the NAIA-IPT III that was offered
for bidding had eleven components: shear wall thickening; slab Increased seismic gap between the elevated access roadway and
thickening; application of FRPs to columns, beams and slabs; adjacent structures will reduce the risk of pounding between the
thickening of flat slab drop; enlarging of column size; enlarging bridge and building structure.280
pile cap and footings; steel jacketing; providing shear blocks to
pier headstock (elevated access roadway); enlarging of pier However, no documents regarding the retrofit project exist as part
footings (elevated access roadway); application of FRP to piers of the record of the case. The retrofit bid took place in 2012, or
(elevated access roadway); and increasing seismic gap between after the promulgation of the trial court's ruling. Hence, we have
the elevated access roadway and adjacent structures (sector 1, 2, to disregard Government claims pertaining to the retrofit project.
car park).279 The Official Gazette further stated:
3.c. The unnecessary areas
Shear wall thickening is meant to fortify the reinforced concrete
wall to increase its capacity against horizontal structure Gleeds excluded "unnecessary areas" from the computation of the
movement. At the same time, thickened slabs will increase their base value. These unnecessary areas are the multi-level retail
bending capacity and resistance against heavy superimposed mall that is accessible only through the multi-storey car park
loadings. (20,465 m2), and the excess retail concession space(1,727
m2).281
Applying fiber-reinforced polymer (FRP) to columns, beams, and
slabs will increase their strength and resistance against excess We find the exclusion of the unnecessary areas from the base
loads and combined forces of elements. A thicker flat slab drop is value unjustified. Since the Government would expropriate the
meant to strengthen the slab-column connection. entire NAIA-IPT III, the Government should pay for the
replacement cost of the retail mall and the excess retail
concession space. The Government cannot avoid payment simply

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because it deems the retail mall and the retail concession space consultancy fees preconstruction to be a minimum of US$27
as unnecessary in its operation of the NAIA-IPT III. To reiterate, million, based on typical international norms.
the measure of just compensation is not the taker's gain, but the
owner's loss.282 3.1.15 Some preliminary design was carried out by Takenaka
prior to the EPC tender design so slight lower planning and
Consequently, we include in the computation of construction design consultancy fees could be expected. It is understood that
costs the excess concession space in the amount of PIATCO have paid US$19.3 million to the designers PCI, SOM,
$1,081,272.00, and the four-level retail complex in the sum of PACICON and JGC (architect of record) and this therefore appears
$12,809,485.00.283 a fair and reasonable fee.

4. Attendant costs of the NAIA-IPT III 3.1.16. In addition there is also the cost of site supervision. In
this case there was the independent QA role undertaken by Japan
Scott Wilson criticized the Gleeds Report for excluding the Airport Consultants and construction supervision by PCI. It is
attendant costs in the construction cost valuation. He stated: noted that the Bid Document suggested that up to 3% of the
construction cost should be allowed for the independent QA role.
3.1.13 Gleeds do (sic) not show any costs for planning and design In our experience we would expect QA and construction
consultancy fees preconstruction. In our experience the following supervision to cost between 3% and 5% of the construction cost.
percentage ranges of the construction cost would typically be the
international norms for these fees. 3.1.17 On the basis of a construction cost valuation of the order
of US$322 million we would expect the cost of construction
● Attendant Costs Percentage Range supervision to be a minimum of US$9.5 million. It is understood
that PIATCO have paid US$7.9 million to the QA Inspectors (JAC)
● Architecture 3.0 to 4.0 % and US$4.2 million to PCI, SOM, PACICON and JGC and this
therefore appears not reasonable.
● Civil and Structural 1.0 to 4.0 %
3.1.18 In summary, PIATCO have paid the following consultancy
● Electrical and Mechanical 2.5 to 3.5 % fees:

● Quantity Surveyor 1.0 % ● Planning and design consultancy fees

preconstruction US$19.3 million
● Project Management 1.0 % ● QA Inspectors US$7.9 Million
● Construction supervision US$4.2 Million
Total 8.5 to 11.5 % Total US$31.4 million
3.1.19 In our opinion these fees are in reasonable range.
3.1.14 On the basis of a construction cost valuation of the order
of US$322 million we would expect planning and design Site Preparation Costs

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CASES ON EVIDENCE

3.1.20 We understand that PIATCO has incurred costs of development, other costs and financing costs, official receipts,
US$10.3 million for relocation of PAF existing facilities, removal of statements of account, sales invoices, endorsements, insurance
subterranean structures and site preparation which the Gleeds policies and other related documents, acknowledgement receipts,
Base Case CCV has not included. agreements, invoices, and bonds.

Legal Costs PIATCO claims that the following entities rendered services in the
construction of the NAIA-IPT III:
3.1.21 We assume that in addition to the above fees PIATCO has
incurred legal costs in planning and constructing the Services Rendered Entities that Rendered the
development and this is quite normal on BOT concession Services
contracts where contract agreements and responsibilities have to Engineering and Architecture Pacific Consultants
be agreed between a number of different parties. International Asia, Inc. Pacicon Philippines, Inc. Architect J. G.
Cheng RMJM Philippines, Inc.
Overall Summary Quality Assurance Japan Airport Consultants I.A. Campbell &
Associates
3.1.21 PIATCO has incurred consultancy fees and site Construction Supervision Pacific Consultants International
preparation costs of US$41.7 million (US$31.4 plusUS$10.3 Asia, Inc.
million) not included by Gleeds in the Base Case CCV.284 Construction Insurance Gotuaco del Rosario
Site Development Bases Conversion Development Corporation
In response, Tim Lunt asserted that its CCV of Skidmore, Owings & Merrill Pacific Consultants International
US$300,206,693.00 already includes the attendant costs of Asia, Inc. Natural Resource Development Corporation Serclan
US$36,279,033 under the heading "General Requirements and Enterprises Geodesy Services, Inc. Geotechnics Philippines, Inc.
Conditions." The sum of US$36,279,033 represents the General Revalu Constructions & Supply N.O. Mercado Construction, Inc.
Requirements Section of the Takenaka Bill of Quantities. The Lopez Drilling Enterprises Monark Constructions Illustrious
"General Requirements and Conditions" is composed of Security and Investigation Agency, Inc. Core Watchmen, Security
engineering and architectural services fees, quality assurance and Detective Agency Corp.
services fees, construction supervision services fees, construction Other ServicesLaguna Lake Development Authority National
insurance, and site. Tim Lunt, however, admitted that the Telecommunications Commission Prudential Guarantee and
"General Requirements and Conditions" exclude financing costs, Assurance, Inc. Manila Electric Company, Inc. Maynilad
and other associated costs. He likewise stated that PIATCO's Philippine Long Distance Telecommunications, Inc. Myrtle
attendant costs have no evidentiary support. Intergen Exchange Corp.
Financing Services Dresdner / Kfw / Helaba Banks Fraport
On December 14, 2010, PIATCO attached to its Compliance AG/FAG Deutsche Bank
documentary evidence of its claimed attendant costs of Reyes Tacandong & Co. checked the mathematical accuracy of
US$70,197,802.00. These include photocopies of summary of the attendant costs. PIATCO asserts that it engaged the services
payments for architecture & engineering, quality assurance, of various consultants in the construction of the NAIA-IPT III and
construction supervision, construction insurance, site incurred the following attendant costs:

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CASES ON EVIDENCE

in the rights and obligations of the parties. A substantial hazard

Attendant Costs Amount of inaccuracy exists in the human process of making a copy by
Engineering and Architecture US$19,372,539 handwriting or typewriting. Moreover, with respect to oral
Quality Assurance US$6,923,720 testimony purporting to give the terms of a document from
Construction Supervision US$4,302,227 memory, a special risk of error is present, greater than in the case
Construction Insurance US$4,329,272 of attempts at describing other situations generally.286
Site Development US$8,358,169
Other Costs US$ 308,985 The best evidence rule likewise acts as an insurance against
Financing Costs US$26,602,890 fraud. If a party is in the possession of the best evidence and
Total US$70,197,802 withholds it, and seeks to substitute inferior evidence in its place,
The BOC, the RTC, and the CA uniformly found that PIATCO the presumption naturally arises that the better evidence is
failed to substantiate its attendant costs. The CA observed that withheld for fraudulent purposes that its production would
PIATCO's summarized computation of attendant costs was self- expose and defeat. The rule likewise protects against misleading
serving and unsupported by relevant evidence. inferences resulting from the intentional or unintentional
introduction of selected portions of a larger set of writings.287
Unlike the BOC and the RTC which pegged the attendant cost at
10% of the construction cost as an accepted industry practice, As exceptions to the best evidence rule, Section 3, Rule 130 of the
the CA made a finding that the "General Requirements and Rules of Court provides that non-original documents may be
Conditions" in the Gleeds' Appraisal Report constitutes the produced in court in the following cases:
attendant costs. The CA stated that there is no need to further
recognize and award separate attendant costs because these were (a) When the original has been lost or destroyed, or cannot be
already included in the construction cost valuation of produced in court, without bad faith on the part of the offeror;
US$300,206,693.00. The CA explained that the attendant cost
becomes part of the total construction cost once the construction (b) When the original is in the custody or under control of the
is completed.285 party against whom the evidence is offered, and the latter fails to
produce it after reasonable notice;
4.a. PIATCO's attendant costs
(c) When the original consists of numerous accounts or other
Under the best evidence rule, when the subject of inquiry relates documents which cannot be examined in court without great loss
to the contents of a document, no evidence shall be admissible of time and the fact sought to be established from them is only
other than the original document itself. In proving the terms of a the general result of the whole; and
written document, the original of the document must be produced
in court. (d) When the original is a public record in the custody of a public
officer or is recorded in a public office. (Emphasis supplied)
The best evidence rule ensures that the exact contents of a
document are brought before the court. In deeds, wills, and Secondary evidence of the contents of writings is admitted on the
contracts, a slight variation in words may mean a great difference theory that the original cannot be produced by the party who

112
CASES ON EVIDENCE

offers the evidence within a reasonable time by the exercise of In concrete terms, the source documents must be shown to be
reasonable diligence.288 original, and not secondary. Furthermore, the source documents
must likewise be accessible to the opposing party so that the
PIATCO argues that its non-submission of original documents correctness of the summary of the voluminous records may be
before the trial court is justified under Section 3 (c), Rule 130 of tested on cross-examination and/or may be refuted in pleadings.
the Rules of Court. It points out that a party need not submit the In ordinary trial-type proceedings, a proper foundation for the
original when it consists of numerous accounts or other introduction of a summary may be established through the
documents which cannot be examined in court without great loss "testimony of the person who is responsible for the summary's
of time and the fact sought to be established from them is only preparation, or the person who supervised the preparation of the
the general result of the whole. PIATCO insists that the lower summary."290
courts erred in not giving probative value to the report prepared
by Reyes Tacandong & Co., an auditing firm, validating PIATCO's The primary reason for these procedural foundations is that the
computation of attendant costs. Significantly, Reyes Tacandong & summary of numerous documents is, in strict terms, hearsay
Co. failed to state that it examined the original documents in evidence. The trial court should not haphazardly allow a party to
validating PIATCO's computation of attendant costs. present a summary of numerous documents and immediately
admit and give probative value to such summary without
We agree with PIATCO that it need not submit numerous and sufficiently laying these foundations. If the source documents of
voluminous invoices, official receipts, and other relevant the summary are non-original, the trial court would commit a
documents before the trial court to prove the attendant costs that grave error in admitting and/or giving probative value to the
it incurred in the construction of the NAIA-IPT III. The trial court summary of non-original documents; the evidence admitted
may admit a summary of voluminous original documents, in lieu would be double hearsay.291
of original documents, if the party has shown that the underlying
writings are numerous and that an in-court examination of these Furthermore, when a party invokes Section 3 (c), Rule 130 of the
documents would be inconvenient. In other words, Section 3 (c), Rules of Court, he does not similarly invoke Section 3 (a), (b),
Rule 130 of the Rules of Court does away with the item-by-item and/or (d), Rule 130 of the Rules of Court. He does not likewise
court identification and authentication of voluminous exhibits claim that the original documents have been lost or destroyed.
which would only be burdensome and tedious for the parties and The party merely asserts that the numerous documents cannot
the court. be examined in court without great loss of time and that the fact
sought to be established from these documents is only the general
However, as a condition precedent to the admission of a summary result of the whole. Whenever a party seeks an exemption under
of numerous documents, the proponent must lay a proper the best evidence rule pursuant to Section 3 (c), Rule 130 of the
foundation for the admission of the original documents on which Rules of Court, he asks permission from the trial court to produce
the summary is based. The proponent must prove that the source a summary of numerous documents, whose originals are
documents being summarized are also admissible if presented in available to the adverse party for inspection. He does not ask
court.289 permission from the trial court to present in evidence the
numerous non-original documents. Otherwise, the very purpose
of Section 3 (c), Rule 130 of the Rules of Court would be defeated.

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CASES ON EVIDENCE

In that case, every exhibit of non-original documents would be documents allegedly proving attendant costs. Moreover, in a letter
identified, authenticated, and cross-examined, leading to a dated December 14, 2010, Reyes Tacandong & Co stated it does
tedious and protracted litigation. not "express any assurance on the attendant costs:"

Thus, if a party desires to present photocopies of the original We have performed the procedures agreed with Philippine
documents, he must first establish that the presentation of International Air Terminals, Co., ("the Company") with respect to
photocopies is justified under Section 3 (a), (b), and/or (d), Rule the Company's attendant costs incurred in building NAIA
130 of the Rules of Court. He must establish the presence of all Terminal 3 from 1997 to 2004. Our engagement was undertaken
the elements under these provisions. In the case of lost or in accordance with the Philippine Standard on Related Services
destroyed documents, the offeror of non-original documents must applicable to agreed-upon procedures engagements.
first prove the following elements before secondary evidence is
admitted before the court: (a) the existence or due execution of xxxx
the original; (b) the loss and destruction of the original, or the
reason for its non-production in court; and (c) the absence of bad The sufficiency of the procedures is solely the responsibility of the
faith on the part of the offeror to which the unavailability of the specified users of the report. Consequently, we make no
original can be attributed. To conclude otherwise is to allow the representation regarding the sufficiency of the procedures either
party to circumvent the best evidence rule and the requirements for the purpose for which this report has been requested or for
under Section 3 (a), (b), and (d), Rule 130 of the Rules of Court by any other purpose.
merely invoking Section 3 (c), Rule 130 of the Rules of Court.
Because the procedures do not constitute either an audit or a
In the present case, PIATCO attached to its Compliance dated review of financial statements made in accordance with Philippine
December 14, 2010, the photocopies of numerous documents, Standards on Auditing, we do not express any assurance on the
and the validation of PIATCO's computation of attendant costs attendant costs. (Emphasis supplied)
prepared by Reyes Tacandong & Co., among others. PIATCO
justifies the non-presentment of original documents pursuant to 4.b. The BOC and the RTC's
Section 3 (c), Rule 130 of the Rules of Court. attendant cost

We affirm the lower courts' uniform findings that PIATCO failed to The CA correctly disregarded the BOC and the RTC's computation
establish its attendant costs. PIATCO failed to establish that the of attendant costs, which both pegged the attendant cost at 10%
photocopied documents fall under Section 3 (a), (b), and/or (d), of the construction cost. The BOC and the RTC relied on the
Rule 130 of the Rules of Court. These photocopied documents are mean percentage range of attendant cost which appears in the
hearsay evidence. They are mere scraps of paper and have no Scott Wilson Report as follows:292
weight as basis for the attendant costs of the NAIA-IPT III. We
likewise cannot give weight to the summary prepared by Reyes Attendant Costs Percentage Range
Tacandong & Co. for being double hearsay. Reyes Tacandong & Architecture 3.0 to 4.0 %
Co., whose letter was addressed to PIATCO and not to the trial Civil and Structural 1.0 to 4.0 %
court, did not state in its report that it examined the original Electrical and Mechanical 2.5 to 3.5 %

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CASES ON EVIDENCE

Quantity Surveyor 1.0 % Civil Code, and the exercise results in the damage of another, a
Project Management 1.0 % legal wrong is committed and the wrongdoer is held
Total 8.5 to 11.5 % responsible.296
The BOC and the RTC computed the mean percentage range by
adding 8.5% and 11.5% and dividing the result by 2, thus: In contrast, an eminent domain case arises from the State's
exercise of its power to expropriate private property for public
(8.5 + 11.5)/2 = 10% use. The Constitution mandates that the property owner shall
only receive just compensation which, of course, should be based
The mean percentage range is highly speculative and devoid of on preponderance of evidence. Moreover, the determination of
any factual basis. As a court of law, we should only measure just eminent domain being a judicial function, there is no
compensation using relevant and actual evidence as basis in constitutional or statutory provision giving the courts unfettered
fixing the value of the condemned property. Just compensation discretion to determine just compensation based on estimates
must be duly proven by preponderance of evidence or greater and conjectures.
weight of credible evidence.293 Bare allegations, unsubstantiated
by evidence, are not equivalent to proof.294 4.c. The Government's attendant cost

In a case for damages, we allow the party to receive temperate We affirm the CA's factual finding that the Government's
damages in the absence of competent proof on the amount of computation of construction cost valuation already includes the
actual damages. Temperate or moderate damages, which are attendant costs. In the Gleeds Report dated December 22, 2010,
more than nominal but less than compensatory damages, may be Tim Lunt sufficiently explained:
recovered when the court finds that some pecuniary loss has been
suffered but its amount cannot, from the nature of the case, be 9. I consider that Engineering and Architecture, Quality
proved with certainty.295 Assurance, Construction Supervision, Construction Insurance
and Site Development are clearly costs which are included for in
We cannot adopt the same liberal attitude in an eminent domain the CCV. The CCV includes costs associated with the General
case and merely estimate the attendant cost in the total absence Requirements (see Appendix D - Summary). The costs of Site
of evidence of construction costs. The amount of just Development are also included (see CCV Appendix D - Part 2,
compensation must be substantiated by a preponderance of page 5 of 38).
evidence.
xxxx
An eminent domain case is different from a complaint for
damages. A complaint for damages is based on tort and emanates 25. Scott Wilson states at paragraph 2.2.14 that the
from the transgression of a right. A complaint for damages seeks constructions costs "are exclusive of all other attendant costs,
to vindicate a legal wrong through damages, which may be actual, such as the engineering and architectural services fees, quality
moral, nominal, temperate, liquidated, or exemplary. When a assurance services fees, construction supervision services fees,
right is exercised in a manner not conformable with Article 19 of construction insurance, site development costs, financing costs
the Civil Code and other provisions on human relations in the and other associated costs." This statement is incorrect. It is clear

115
CASES ON EVIDENCE

on the inspection of the General Requirements sections of the Staff and labour $10,491,139.54298
Takenaka Bills of Quantities that some if not all of these items are Insurance $925,210.78299
included in the assessment of the construction costs made by Professional Indemnity Insurance $2,200,000.00300
PIATCO with the exception of 1) financing costs and 2) other Consequential Loss Insurance $800,000.00301
associated costs, for which there is no definition. Scott Wilson Setting out $364,647.00302
makes no reference to the Takenaka Bills of Quantities nor do Health and Safety $403,224.00303
they use them as documents which they have reviewed in Environmental management $176,490.00304
paragraph 1.4.1 of their report. I do not understand how Scott Design $2,631,100.00305
Wilson can ignore the items which are included in the Bills of Staff and labour $2,590,774.19306
Quantities under the heading General Requirements and make Insurance $71,109.77307
the suggestion that they are additional costs which should be Total $27,093,375.28
considered. 5. Deductions from the replacement cost of the NAIA-IPT III

xxxx 5.a. Depreciation should be

deducted from the replacement
36. In respect of the Engineering Consultancy Fees set out by cost.
Scott Wilson, it is clear to me on inspection of the General
Requirements section of the On shore and Off shore Bills of In eminent domain cases, it is acceptable that a "deduction
Quantities that an element of design fees included as Costs has should be made to the extent to which the improvement or fixture
also been included in the CCVs and should not therefore be has depreciated. The cost of the buildings and fixtures, minus
included as an addition. Scott Wilson has not provided any depreciation, is a reasonable test of the amount by which they
specific information on the actual cost or extent of service enhance the market value of the land even where the market
provided in respect of engineering consultancy. value of the land itself is not readily quantifiable."308

xxxx In order for this Court to arrive at a valid indication of the market
value of the NAIA-IPT III, we must consider accrued depreciation,
39. The cost associated with the Independent QA role referred to which is the loss in value of the terminal.
by Scott Wilson is included in the General Requirements section
of the CCV.(Emphasis supplied) Contrary to the CA's position, "depreciation" is used in different
contexts in valuation and financial accounting. As earlier
The Government's CCV already includes attendant costs which discussed, in appraisal, depreciation "refers to the reduction or
are incorporated in the "General Requirements and Conditions." writing down of the cost of a modern equivalent asset to reflect
On the basis of the Bills of Quantities, Gleeds took into account the obsolescence and relative disabilities affecting the actual
indirect costs in constructing the NAIA-IPT III, summarized below: asset"309 or "loss in value from any cause."310 It is further
defined as "the reduction or writing down of the cost of a modern
Attendant Costs under General Requirements and Conditions equivalent asset to reflect the obsolescence and relative
Design $6,439,680.00297 disabilities affecting the actual asset."311

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CASES ON EVIDENCE

3.2.7 The Arup Site Observation Report identifies a number of

In contrast, depreciation in accounting refers to "a charge made items which have deteriorated since suspension of the
against an entity's income to reflect the consumption of an asset construction of Terminal 3 in December 2002.
over a particular accounting period."312 It is the "process of
allocating to expense the cost of a plant asset over its useful 3.2.8 A provisional value has been assessed against the items
(service) life in a rational and systematic manner."313 identified in the Arup report at $1,738,318.
Accumulated depreciation is reported as a deduction from plant
assets and affects the income statement through depreciation The deterioration items have been costed with a base date of
expenses. Thus, the cost allocation is designed to match expenses 2Q09. Calculation of this amount is contained in Appendix 'E.'
with revenues. Further examination and costing of each of the identified items
are required and, therefore, the costs of these items will require
In financial accounting, "depreciation is a process of cost adjustment based on the actual date when the rectification works
allocation, not a process of asset valuation. No attempt is made to are carried out.
measure the change in an asset's market value during ownership
because" it is assumed that plant assets are not held for Depreciation
resale.314 Book depreciation refers to "the amount of capital
recapture written off an owner's books"; it is not market 3.2.0 An Assessment has been made of the depreciated value of
derived.315 Thus, the book value - original cost less accumulated the assets from December 2002 when construction was
depreciation - of an asset may be different from the market value. suspended to December 2004 when Terminal 3 was expropriated
by the Republic.
Consequently, an asset can have zero book value but still have a
significant market value.316 3.2.10 A depreciation value has been assessed at
$USD35,076,294 in 3Q01 Manila prices. Calculation of this
Simply put, book depreciation is measured against the book value amount showing the various asset lives assumed is included in
or original cost of the property and is the amount of capital Appendix "J."
recapture written off an owner's books.317 Accrued depreciation
is measured against the current market value of the property.318 3.2.11 Based on the deductions for deterioration and depreciation
between December 2002 and December 2004, the Base Value
Under the depreciated replacement cost method, accrued CCV at the time of expropriation is $USD263,392,081.320
depreciation is the difference between the "replacement cost of the
improvements on the effective date of the appraisal and the In the Scott Wilson report, he stated:
market value of the improvements on the same date."319
3.7.1 We consider the question of depreciation in this instance to
In the Gleeds Report, Tim Lunt stated: be a financial and legal issue which has to be dealt with in
accordance with Philippine law.
Deterioration

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CASES ON EVIDENCE

3.7.2 We therefore do not feel qualified to comment on the legal

issue except that we do not understand how deterioration in xxxx
section 3.6 and depreciation can both be applied as surely this
means that Gleeds (sic) have double counted the effect of any ● Deterioration - "Major deduction for baggage system not
deterioration. (emphasis supplied)321 justified" - The deterioration in the baggage systems is clearly set
out in the Arup (and Gensler) Site Observation Report dated
In response, Tim Lunt argued: August 2007, at section 9.2. The cost deduction is set out in
Appendix to the previous CCV report which Scott Wilson do (sic)
14. With respect to PIATCO's hypothetical inclusion of inflation, I not appear to have reviewed.
do not consider that inflation should be applied to the base value
as the replacement cost method establishes the cost of ● Depreciation - Scott Wilson states" This issue appears to be a
construction when completed in December 2002. legal issue and should be commented on by legal expert" and
offers no technical or cost related comments relevant to the CCV.
15. The base values included in the CCVs are the same for the
December 2002 and December 2004. The December 2004 base On the other hand, Gary Taylor commented:
value is not adjusted to account for inflation because the items
which make up the construction of NAIA3, i.e., the labour, plant, Gleeds have (sic) assessed a depreciation value of US$35,076,294
materials, systems and equipment installed should not be paid (11.68%) to conclude its 4Q04 value. This concept of depreciation
for at a higher rate (that takes into account inflation) than the is contrary to the GRP's own statistics which shows a Consumer
rate which would have been paid when they were purchased at Price Index for Manila ("CPI") increase from107.8 (Aug 01) to
the earlier date. Put simply, it makes no sense to apply December 125.1 (Nov. 04), a 16% increase over the period. The CPI is a
2004 prices to items bought and used in the construction of conglomerate of all consumer prices in the Manila region and
NAIA3 sometime between June 2000 and December 2002. includes property values and is published by the GRP on a
monthly basis. In assessing such a depreciation value, Gleeds
16. PIATCO do (sic) not consider depreciation. Having explained have (sic) taken an arbitrary life cycle of the building and
above why inflation should not be included, it is the application of assumed a write off of asset over that period, then assessed the
a similar logic which demonstrates why depreciation should be two (2) year depreciation over the period 3Q01 to 4Q04. Whilst we
included. In the case of NAIA3 the materials, systems and acknowledge that an airport terminal building is something of a
equipment installed are at least two years older as at December specialized asset and appreciation of value is not always in line
2004 than at the time they were incorporated into the with the area's general value assessments, it is still a major
construction of NAIA3. Their value should therefore be less. The structure and appreciation before depreciation (which should be
method used for assessing this reduced value is that of limited to equipment and fittings within the building) should not
depreciation.322 be discounted. The concept of long term value of an asset on a
similar concept is proven out by NAIA Terminal 1, which since its
66. Scott Wilson provide a "Summary of Conclusions on construction more than 30 years ago has maintained a value to
deductions at section 3.11 and my responses to each of the items this date.323
contained in their "comment" column are as follows:

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CASES ON EVIDENCE

We uphold the Government's computed extent of deterioration departed from the bidded contract. If at all, the declaration of
and depreciation. In the Reply to Tengson International Ltd. nullity of a contract only operates to restore things to their state
Report and Response from Takenaka and Asahikosan dated and condition before the contract's execution.326
December 7, 2010, Tim Lunt explained that "[t]he asset lives are
taken specifically from experience in preparing Asset Revaluations Moreover, Takenaka and Asahikosan, as subcontractors in the
for Airport properties which are used as an input for annual NAIA- IPT III project, were not bound by the nullified PIATCO
published accounts, which are in turn audited by appointed contracts. Takenaka and Asahikosan were only bound to perform
Accountants."324 Takenaka and Asahikosan should have their contractual obligations under the Onshore Construction
provided for contrary assumptions with respect to the useful lives Contract and Offshore Procurement Contract, respectively. They
of the subject assets if they did not agree with the Government's were not bound by the nullified PIATCO contracts.
assumptions. Instead, Gary Taylor merely referred to the
valuation of the NAIA Terminal I without any factual basis to If there had indeed been variations from the Onshore
support his claim. Moreover, Scott Wilson did not question the Construction Contract and Offshore Procurement Contract, the
assumed useful life of the NAIA-IPT III, but agreed that the cause of action for breach of contract and damages lies with
question of whether depreciation should be deducted is a legal PIATCO. For purposes of determining just compensation, the
issue. Government cannot rely on the specifications in the Bid
Documents precisely because the concession agreement between
Since PIATCO, Takenaka, and Asahikosan failed to present PIATCO and the Government had already been nullified. The
contrary assumptions or estimates with respect to the NAIA-IPT Government cannot complain of contract noncompliance in an
III's useful life, we adopt Tim Lunt's computations with respect to eminent domain case, whose cause of action is not based on a
deterioration and depreciation. breach of contract, but on the peremptory power of the State to
take private property for public use.
5.b. Rectification for contract
compliance should not be Consequently, deductions from the base value of the cost of
deducted from the replacement noncompliance with bid documents as well as inferior quality
cost. items have no legal basis. Gleeds' reliance on the NAIA-IPT III bid
documents is misplaced.
However, we hold that the cost for "rectification for contract
compliance" should not be deducted from the base value, as the As Scott Wilson correctly pointed out, the decisive factor of the
contract, being void, cannot be ratified.325 deductibility of items under "noncompliance with bid documents"
is whether they are functional. The Scott Wilson report shows
In the present case, the Court already nullified the PIATCO that, except for the nonprovision of moving walkway, the alleged
contracts for being contrary to public policy in Agan. A noncompliant items are functional.327 Also, the nonprovision of a
substantial amendment to a contract awarded through public moving walkway should not be deducted from the base value. The
bidding, when such subsequent amendment was made without a only consequence of the failure to provide a moving walkway is
new public bidding, is null and void. The PIATCO contracts the need to construct one, which would only increase the
contain material and substantial amendments that substantially construction cost.328 The increase in the construction cost,

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CASES ON EVIDENCE

however, should not be included as part of just compensation as 2000 and December 2002 to arrive at the December 2002 CCV.
this Court is According to Gleeds, the cost of construction based on its
midpoint or the third quarter of 2001 is a recognized standard
only tasked to determine the construction cost of the NAIA-IPT III practice in the construction industry.331
as of December 21, 2004.
Gleeds did not adjust the base valuation of $300,206,693.00 as of
For these same reasons, we cannot allow the deduction in the December 2002 to reflect the current gross replacement cost as of
amount of $75,570,510.00 "additional areas to be built." These December 2004. It merely assumed that the gross replacement
are "areas where the minimum requirements stated in the Bid cost as of December 2002 is the same as the gross replacement
Documents have not been met and are necessary for the cost as of December 2004. It stated that it did not consider
operation" of the NAIA-IPT III. These areas include: inflation in determining the base valuation of the NAIA-IPT III as
of December 2004:
● Departure hall 22,462 m2
14. With respect to PIATCO's hypothetical inclusion of inflation, I
● Meeter/greeter hall 14,696 m2 do not consider that inflation should be applied to the base value
as the replacement cost method establishes the cost of
● Ramp operations 13,640 m2 construction when completed in December 2002.

● Offices 4,370 m2 15. The base values included in the CCVs are the same for
December 2002 and December 2004. The December 2004 is not
● Hold rooms 3,729 m2 adjusted to account for inflation because the items which make
up the construction of NAIA3, i.e., the labour, plant, materials,
● Public toilets 2,351 m2 systems and equipment installed should not be paid for at a
higher rate (that takes into account inflation) than the rate which
● Hardstand hold rooms 1,442 m2 would have been paid when they were purchased at the earlier
date. Put simply, it makes no sense to apply December 2004
● Delayed flight restaurant 620 m2329 prices to items bought and used in the construction of NAIA3
sometime between June 2000 and December 2002.332 (Emphasis
6. Adjustments to the Replacement Cost supplied)

6.a. The replacement cost Section 10 of RA 8974 IRR provides that the replacement cost
should be adjusted to shall be based on the current market prices of construction and
December 2004 values. attendant costs. Under the depreciated replacement cost method,
the replacement cost shall be based on the current gross
Gleeds used the Principle Quantities approach in determining the replacement cost of the asset. In its pleadings, the Government
gross replacement cost of the NAIA-IPT III.330 Gleeds calculated itself explained that the cost of replacing an asset under both
the cost of construction based on the midpoint between June

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CASES ON EVIDENCE

depreciated replacement cost and new replacement cost methods the NAIA-IPT III at the time of the filing of the complaint for
should be measured at its current prices. expropriation.

In our jurisdiction, the word "current" should be equated with the In adjusting the gross replacement cost to December 2004 values,
date of the taking of the property or the filing of the complaint, this Court takes cognizance of the fact that the cost of goods and
whichever came first. In the present case, the word "current" services in the Philippines increased from 2002 until 2004. This
should necessarily refer to December 21, 2004, the filing of the is shown by the CPI which is used in calculating the inflation rate
complaint for expropriation. and the purchasing power of the peso.336 PIATCO correctly
arrived at the inflation rate of 1.0971 using the prevailing CPI
In National Power Corporation v. Co,333 the Court suppletorily from November 29, 2002, or the date of the suspension of works
applied Section 4, Rule 67 of the Rules of Court in determining in the NAIA-IPT III until December 21, 2004, or the date when the
the value of the property sought to be expropriated for purposes Government filed the expropriation complaint.337
of implementing national infrastructure projects. Under the Rules
of Court, just compensation shall be determined from the date of 7. Interests, Fruits and Income
the taking of the property or the filing of the complaint, whichever
came first. Thus, where the filing of an action precedes the taking 7.a. Computation of Interests
of the property, just compensation shall be computed as of the
time of the filing of the complaint.334 The relevant valuation date To avoid confusion in computing interests, we first distinguish
when we shall reckon the current gross replacement cost is three interrelated concepts in just compensation: (1) the valuation
December 21, 2004, or the date of filing of the complaint for period of just compensation under Rule 67 of the Rules of Court;
expropriation. (2) the reckoning period of interest in eminent domain cases
pursuant to Section 9, Article 3 of the 1987 Constitution; and (3)
The Government's base valuation of $300,206,693.00 is only a the initial and final payments of just compensation under RA
measurement of the current gross replacement cost as of 8974.
December 2002. We agree with PIATCO that the gross
replacement cost of the NAIA-IPT III as of December 2002 should Under Section 4, Rule 67 of the Rules of Court, the property
be adjusted to its cost as of December 2004 for the plain reason sought to be expropriated shall be appraised as of the date of
that the Government's computed gross replacement cost is not taking of the property or the filing of the complaint for
current, as required by the Rules of Court and jurisprudence. expropriation, whichever is earlier, thus:

Equity dictates that we should adjust the replacement cost at Section 4. Order of expropriation. - If the objections to and the
December 2004 values using the Consumer Price Index (CPI).335 defenses against the right of the plaintiff to expropriate the
This Court should not be confined and restricted by the use of the property are overruled, or when no party appears to defend as
depreciated replacement cost method, especially in this case required by this Rule, the court may issue an order of
where the calculated base valuation as of December 2004 appears expropriation declaring that the plaintiff has a lawful right to take
to be not truly reflective of the current gross replacement cost of the property sought to be expropriated, for the public use or
purpose described in the complaint, upon the payment of just

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CASES ON EVIDENCE

compensation to be determined as of the date of the taking of the immediately lost due to the taking, and the absence of
property or the filing of the complaint, whichever came first. replacement property from which income can be derived. Interest
on the unpaid compensation becomes due as compliance with the
A final order sustaining the right to expropriate the property may constitutional mandate on eminent domain and as a basic
be appealed by any party aggrieved thereby. Such appeal, measure of fairness.340
however, shall not prevent the court from determining the just
compensation to be paid. Thus, interest in eminent domain cases "runs as a matter of law
and follows as a matter of course from the right of the landowner
After the rendition of such an order, the plaintiff shall not be to be placed in as good a position as money can accomplish, as of
permitted to dismiss or discontinue the proceeding except on the date of taking."341
such terms as the court deems just and equitable. (4a) (Emphasis
supplied) Lastly, RA 8974 requires the Government to pay just
compensation twice: (1) immediately upon the filing of the
On the other hand, Section 9, Article 3 of the 1987 Constitution complaint, when the amount to be paid is 100% of the value of
provides that "[n]o private property shall be taken for public use the property based on the current relevant zonal valuation of the
without just compensation." The 1987 Constitution thus BIR, and the value of the improvements and/or structures sought
commands the condemnor to pay the property owner the full and to be expropriated (initial payment); and (2) when the decision of
fair equivalent of the property from the date of taking. This the court in the determination of just compensation becomes final
provision likewise presupposes that the condemnor incurs delay if and executory, in which case the implementing agency shall pay
it does not pay the property owner the full amount of just the owner the difference between the amount already paid and
compensation on the date of taking.338 the just compensation as determined by the court (final payment).

The reason is that just compensation would not be "just" if the In case the completion of a government infrastructure project is of
State does not pay the property owner interest on the just utmost urgency and importance, and there is no existing
compensation from the date of the taking of the property. Without valuation of the area concerned, the initial payment shall be the
prompt payment, the property owner suffers the immediate proffered value of the property. Section 4 of RA 8974 also states
deprivation of both his land and its fruits or income. The owner's that the initial payment of just compensation is a prerequisite for
loss, of course, is not only his property but also its income- the trial court's issuance of a writ of possession, to wit: Section 4.
generating potential.339 Guidelines for Expropriation Proceedings. - Whenever it is
necessary to acquire real property for the right-of-way or location
Ideally, just compensation should be immediately made available for any national government infrastructure project through
to the property owner so that he may derive income from this expropriation, the appropriate implementing agency shall initiate
compensation, in the same manner that he would have derived the expropriation proceedings before the proper court under the
income from his expropriated property. following guidelines:

However, if full compensation is not paid for the property taken, (a) Upon the filing of the complaint, and after due notice to the
then the State must pay for the shortfall in the earning potential defendant, the implementing agency shall immediately pay the

122
CASES ON EVIDENCE

owner of the property the amount equivalent to the sum of (1) one The Government's initial payment of just compensation does not
hundred percent (100%) of the value of the property based on the excuse it from avoiding payment of interest on the difference
current relevant zonal valuation of the Bureau of Internal between the adjudged amount of just compensation and the
Revenue (BIR); and (2) the value of the improvements and/or initial payment.
structures as determined under Section 7 hereof;
The initial payment scheme as a prerequisite for the issuance of
(b) In provinces, cities, municipalities and other areas where there the writ of possession under RA 8974 only provides the
is no zonal valuation, the BIR is hereby mandated within the Government flexibility to immediately take the property for public
period of sixty (60) days from the date of the expropriation case, purpose or public use pending the court's final determination of
to come up with a zonal valuation for said area; and just compensation. Section 4 (a) of RA 8974 only addresses the
Government's need to immediately enter the privately owned
(c) In case the completion of a government infrastructure project property in order to avoid delay in the implementation of national
is of utmost urgency and importance, and there is no existing infrastructure projects.
valuation of the area concerned, the implementing agency shall
immediately pay the owner of the property its proffered value Otherwise, Section 4 of RA 8974 would be repugnant to Section 9,
taking into consideration the standards prescribed in Section 5 Article 3 of the 1987 Constitution which mandates that private
hereof. property shall not be taken for public use without just
compensation. To reiterate, the Constitution commands the
Upon compliance with the guidelines abovementioned, the court Government to pay the property owner no less than the full and
shall immediately issue to the implementing agency an order to fair equivalent of the property from the date of taking.
take possession of the property and start the implementation of
the project. In the present case, the Government avers that PIATCO is not
entitled to recover interest. According to the Government, PIATCO
Before the court can issue a Writ of Possession, the implementing should not be allowed to profit from the void contracts. This
agency shall present to the court a certificate of availability of contention, however, stems from a mistaken understanding of
funds from the proper official concerned. interest in expropriation cases.

In the event that the owner of the property contests the Contrary to the Government's opinion, the interest award is not
implementing agency's proffered value, the court shall determine anchored either on the law of contracts or damages; it is based on
the just compensation to be paid the owner within sixty (60)days the owner's constitutional right to just compensation. The
from the date of filing of the expropriation case. When the difference in the amount between the final payment and the
decision of the court becomes final and executory, the initial payment - in the interim or before the judgment on just
implementing agency shall pay the owner the difference between compensation becomes final and executory - is not unliquidated
the amount already paid and the just compensation as damages which do not earn interest until the amount of damages
determined by the court. (Emphasis supplied) is established with reasonable certainty. The difference between
final and initial payments forms part of the just compensation

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CASES ON EVIDENCE

that the property owner is entitled from the date of taking of the same day, the RTC issued a writ of possession in favor of the
property. Government upon the deposit of ₱3,002,125,000.00 with the
Land Bank. In Gingoyon, the Court held in abeyance the
Thus, when the taking of the property precedes the filing of the implementation of the writ of possession pending the direct
complaint for expropriation, the Court orders the condemnor to payment of the proffered value of ₱3,002,125,000.00 to PIATCO.
pay the full amount of just compensation from the date of taking
whose interest shall likewise commence on the same date. The On September 11, 2006, the RTC reinstated the writ of
Court does not rule that the interest on just compensation shall possession after the Government tendered PIATCO a check in this
commence the date when the amount of just compensation amount.
becomes certain, e.g., from the promulgation of the Court's
decision or the finality of the eminent domain case. On April 11, 2012, the MIAA and the Land Bank entered into an
escrow agreement in the amount of $82,157,716.73. On the same
With respect to the amount of interest on just compensation, we date, the MIAA and the DBP likewise executed an escrow
decisively ruled in Republic v. Court of Appeals342 that the just agreement in the amount of $34,190,924.59.
compensation due to the property owner is effectively a
forbearance of money, and not indemnity for damages.343 Citing Based on these factual circumstances, interest shall accrue as
Eastern Shipping Lines, Inc. v. Court of Appeals,344 we awarded follows:
a legal interest of 12% per annum on just compensation. The
Court upheld the imposition of the 12% interest rate in just 1. The principal amount of just compensation shall be appraised
compensation cases, as ruled in Republic, in Reyes v. National on the date of the filing of the complaint for expropriation or on
Housing Authority,345 Land Bank of the Philippines v. December 21, 2004. The just compensation shall not earn
Wycoco,346 Republic v. Court of Appeals,347 Land Bank of the interest from December 21, 2004, until September 10, 2006,
Philippines v. Imperial,348 Philippine Ports Authority v. Rosales- since the Government did not take possession of the NAIA-IPT III
Bondoc,349 and Curata v. Philippine Ports Authority.350 The during this period.
Court reiterated the Republic ruling in Apo Fruits Corporation
and Hijo Plantation, Inc. v. Land Bank of the Philippines,351 2. The difference between the principal amount of just
Land Bank of the Philippines v. Rivera,352 Department of compensation and the proffered value of ₱3,002,125,000.00 shall
Agrarian Reform v. Goduco,353 and Land Bank of the Philippines earn legal interest of 12% per annum from the date of taking or
v. Santiago, Jr.354 September 11, 2006 until June 30, 2013.

On June 21, 2013, the BSP issued Circular No. 799,355 3. The difference between the principal amount of just
pursuant to MB Resolution No. 796 dated May 16,2013, reducing compensation and the proffered value of ₱3,002,125,000.00 shall
the legal interest on loans and forbearance of money from 12% to earn legal interest of 6% per annum from July 1, 2013, until the
6% per annum. BSP Circular No. 799 took effect on July 1, 2013. finality of the Court's ruling.

In the present case, the Government filed a complaint for

expropriation of the NAIA-IPT III on December 21, 2004. On the

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CASES ON EVIDENCE

4. The total amount of just compensation shall earn legal interest Thus, we cannot allow PIATCO to profit from the operation of the
of 6% per annum from the finality of the Court's ruling until full NAIA-IPT III whose funds are sourced from the public coffers.
payment. Otherwise, PIATCO would be doubly compensated and unjustly
enriched to the detriment of the taxpayers.
The execution of the escrow agreements shall not affect the
accrual of interest in this case. In its Manifestation and Motion 8. The BOC's Expenses
dated July 8, 2011, the Government stated that the escrow
accounts shall be subject to the condition that "[t]he claimant(s) 8.a. Takenaka and
shall have been held to be entitled to receive the sum claimed Asahikosan should not
from the 'Just Compensation (NAIA Terminal 3) Fund' in share in the BOC's
accordance with Philippine law and regulation, by a final, binding expenses.
and executory order or award of the expropriation court."356
Takenaka and Asahikosan refuse to share in the expenses of the
Clearly, the Government does not intend to pay the just BOC. They argue that pursuant to Section 12,Rule 6 of the Rules
compensation due to either PIATCO or Takenaka and Asahikosan of Court, the Government should solely shoulder the costs
during the pendency of the expropriation case or until the finality incurred in the expropriation case.
of the Court's rulings in G.R. Nos. 209917, 209696 & 209731.
The Government, on the other hand, asserts that Section 1, Rule
7.b. PIATCO is not entitled to 142 of the Rules of Court explicitly authorizes the expropriation
the fruits and income of the court to order the parties to equally share the costs of an action.
NAIA-IPT III. Hence, the court can require third-party intervenors, i.e.,
Takenaka and Asahikosan, to share in the expenses of the BOC.
PIATCO insists that aside from the interest on just compensation, It points out that PIATCO already shared in the expenses of the
it is also entitled to all income generated from the operations of BOC and tendered the sum of ₱2,550,000.00 to the RTC.
the NAIA-IPT III, from the date of taking up to the present.
We find no merit in the Government's assertion.
PIATCO's claim is unmeritorious. The State, by way of interest,
makes up for the shortfall in the owners' earning potential and The relevant rule is found in Section 12, Rule 67 of the Rules of
the absence of replacement property from which income can be Court which provides:
derived. This is because the interest awarded by the expropriation
court is, in reality, the equivalent of the fruits or income of the SEC. 12. Costs, by whom paid. - The fees of the commissioners
seized property.357 In fact, PIATCO itself admitted in its petition shall be taxed as a part of the costs of the proceedings. All costs,
in G.R. No. 209731 that the interest on just compensation except those of rival claimants litigating their claims, shall be
already answers for the loss of income that the owner suffered as paid by the plaintiff, unless an appeal is taken by the owner of
a result of the State's deprivation of the ordinary use of his the property and the judgment is affirmed, in which event the
property.358 costs of the appeal shall be paid by the owner. [Emphasis
supplied] This provision specifically deals with the costs of

125
CASES ON EVIDENCE

eminent domain cases. Hence, we find that Section 1, Rule 142 of Inflation Rate of 1.0971
the Rules of Court, more specifically, the statement allowing the
court to divide the costs of an action to either party to the case, is
inapplicable to the present case. REPLACEMENT COST AS OF DECEMBER 21, 2004 $
326,932,221.26
Based on the clear terms of Section 12, Rule 67, it is the plaintiff ADD:
- in this case, the Government - not the property owner or third- Interests from September 11, 2006 to December 2014 $
party intervenors, i.e., Takenaka and Asahikosan, who shall 242,810,918.54
shoulder the costs of the expropriation before the court of origin. LESS:
Since the expenses of the BOC form part of the costs of the suit - Proffered Value $ 59,438,604.00
as these are expenses necessary in prosecuting or defending an JUST COMPENSATION AS OF DECEMBER 31, 2014 $
action or a distinct proceeding within an action - the Government 510,304,535.80
solely bears the expenses of the BOC. The property owner shall
only bear the costs of the appeal if he loses in his appeal. Period Formula Number of Days Interest
Rate Principal Amount Straight Interest
PIATCO, in its pleading, has not questioned its share in the September 11, 2006
expenses of the BOC before the Court. PIATCO's voluntary to December 31, 2006 principal*rate
sharing in the expenses of the BOC and its non-objection to its *(113/365) 113 days 12% $267,493,617.26
payment amount to a waiver of its right not to share in the $9,937,571.10
expenses of the BOC. January 1, 2007 to
December 31, 2007 principal*rate 365 days 12%
In sum, just compensation shall be computed as shown below: $267,493,617.26 $32,099,234.07
January 1, 2008 to
Base Current Cost Valuation (Inclusive of Attendant Cost) $ December 31, 2008 principal*rate 365 days 12%
300,206,693.00 $267,493,617.26 $32,099,234.07
ADD: January 1, 2009 to
Excess Concession Space $ 1,081,272.00 December 31, 2009 principal*rate 365 days 12%
Four-Level Retail Complex $ 12,809,485.00 $267,493,617.26 $32,099,234.07
Exclusions due to Structural Issues January 1, 2010 to
December 31, 2010 principal*rate 365 days 12%
$ 20,713,901.00 $267,493,617.26 $32,099,234.07
LESS: January 1, 2011 to December 31, 2011 principal*rate 365
Depreciation $ 1,738,318.00 days 12% $267,493,617.26 $32,099,234.07
Deterioration $ 35,076,295.00 January 1, 2012 to
REPLACEMENT COST AS OF DECEMBER 2002 $ December 31, 2012 principal*rate 365 days 12%
297,996,738.00 $267,493,617.26 $32,099,234.07
MULTIPLY:

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CASES ON EVIDENCE

January 1, 2013 to Gingoyon that PIATCO should be fully compensated as the

June 30, 2013principal * builder and owner of the NAIA-IPT III.
rate *
(181/365) 181 days 12% $267,493,617.2 For its part, the Government refuses to make further payments to
$15,917,702.38 PIATCO. Instead, it created an escrow account in favor of the
July 1, 2013 to "entitled claimants" of just compensation. The Government fears
December 31, 2013 principal*rate that the NAIA-IPT III would still be burdened with liens and
*(189/365) 189 days 6% $267,493,617.26 mortgages - as a result of PIATCO's indebtedness to other entities
$8,310,623.62 - even after it pays PIATCO the full amount of just compensation.
January 1, 2014 to
December 31, 2014 principal*rate 365 days 6% 9.a. Takenaka and Asahikosan's
$267,493,617.26 $16,049,617.04 intervention in the case as
Total $242,810,918.54 unpaid subcontractors is proper.

Formula Principal Amount Total Interest from The defendants in an expropriation case are not limited to the
September 11, 2006 to December 31, 2014 Just Compensation owners of the property condemned. They include all other persons
as of December 31, 2014 owning, occupying, or claiming to own the property. Under
Principal Sections 8 and 14 of RA 8974 IRR, in relation with Section 9,
Amount + Rule 67 of the Rules of Court, all persons who claim to have
Interest $267,493,617.26 $ 242,810,918.54 lawful interest in the property to be condemned should be
$510,304,535.80 included as defendants in the complaint for expropriation:
9. PIATCO as the Lawful Recipient of Just Compensation.
Section 8 of RA 8974 IRR. Expropriation. - If the owner of a
After determining the amount of just compensation, we next private property needed by the government implementing agency
resolve the question of who shall receive the full amount of just does not agree to convey his property to the government by any of
compensation. the foregoing modes of acquiring and/or transferring ownership of
the property, then the government shall exercise its right of
Takenaka and Asahikosan contend that as actual builders of the eminent domain by filing a complaint with the proper Court for
NAIA-IPT III, they are lawfully entitled to receive just the expropriation for the private property.
compensation. They pray that just compensation of at least
$85,700,000.00 be set aside through an escrow account or other The verified complaint shall state with certainty the right and
means, in their favor, to answer for their pending money claims purpose of expropriation, describe the real or personal property
against PIATCO in G.R. No. 202166. sought to be expropriated, and join as defendants all persons
owning or claiming to own, or occupying, any part thereof or
PIATCO, on the other hand, bases its claim for just compensation interest therein, showing as far as practicable, the interest of each
on its ownership of the NAIA-IPT III and on the ruling in Agan and defendant separately. If the title to any property sought to be
condemned appears to be in the name of the Republic of the

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Philippines, although occupied by private individuals, or if the Our ruling on this point does not contradict Section 4 (a) of RA
title is otherwise obscure or doubtful so that the plaintiff cannot 8974 which provides for a scheme of direct and immediate initial
with accuracy or certainty specify the real owners, averment to payment to the property owner in cases involving national
that effect may be made in the complaint. government infrastructure projects.

Section 14 of RA 8974 IRR. Trial Proceedings. - Within sixty (60)- Section 4 (a) of RA 8974 applies only to cases where the issue of
day period prescribed by the Act, all matters regarding defences ownership of the expropriated property is not disputed. In cases
and objections to the complaint, issues on uncertain ownership where the ownership is contested; where conflicting claims or
and conflicting claims, effects of appeal on the rights of the interests over the expropriated property exist; or where there are
parties, and such other incidents affecting the complaint shall be other incidents affecting the complaint for expropriation, the
resolved under the provisions on expropriation of Rule 67 of the governing rule is Section 9, Rule 67 of the Rules of Court. By
Rules of Court. creating a separate provision applicable only to the latter cases,
Section 14 of RA 8974 IRR359 necessarily acknowledged that the
Section 9, Rule 67 of the Rules of Court. Uncertain ownership; scheme of immediate and direct initial payment is not an absolute
conflicting claims. - If the ownership of the property taken is and all-encompassing rule applicable in all circumstances.
uncertain, or there are conflicting claims to any part thereof, the
court may order any sum or sums awarded as compensation for We are aware of our pronouncement in the December 19, 2005
the property to be paid to the court for the benefit of the person Gingoyon decision directing the Government to directly and
adjudged in the same proceeding to be entitled thereto. But the immediately pay PIATCO the proffered value of ₱3billion. We
judgment shall require the payment of the sum or sums awarded rendered the December 19, 2005 Decision based on the fact that
to either the defendant or the court before the plaintiff can enter Takenaka and Asahikosan were not yet parties to G.R. No.
upon the property, or retain it for the public use or purpose if 166429 and Civil Case No. 04-0876 at that time. The Court
entry has already been made. (9a) (Emphasis supplied) denied Takenaka and Asahikosan's motions for leave to intervene
in our February 1, 2006 Resolution in Gingoyon for palpable
All persons who have lawful interest in the property sought to be violation of Section 2, Rule 19 of the Rules of Court which only
expropriated should be impleaded in the complaint for purposes allows intervention before the rendition of judgment by the court.
of determining who shall be entitled to just compensation. If a Moreover, Takenaka and Asahikosan had not yet instituted Civil
known owner is not joined as defendant, he may intervene in the Case No. 06-171 (the enforcement case) when we promulgated
proceeding. If the owner is joined but not served with process and our rulings in Gingoyon.
the proceeding is already closed before he came to know of the
condemnation, he may maintain an independent suit for The RTC's issuance of the March 12, 2007 order, which is binding
damages. Consequently, Takenaka and Asahikosan are correct in on the parties and which allows Takenaka and Asahikosan to
invoking Section 9, Rule 67 of the Rules of Court for purposes of intervene in the case, changed the factual circumstances of this
determining who shall be entitled to just compensation in this case. As an incident in our determination of the just
case. This rule is likewise their proper basis of intervention in the compensation, we necessarily should resolve the issue of NAIA-
RTC's March 12, 2007 order in Civil Case No. 04-0876. IPT III's ownership and the question of who the recipient of the
just compensation should be.

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9.b. The property owner is It must be emphasized that the conclusive ruling in the
entitled to just compensation. Resolution dated 21 January 2004 in Agan v. PIATCO (Agan
2004) is that PIATCO, as builder of the facilities, must first be
Citing Agan, Takenaka and Asahikosan argue that the Court justly compensated in accordance with law and equity for the
intended that the real builders of the NAIA-IPT III should be paid Government to take over the facilities. It is on that premise that
just compensation. Takenaka and Asahikosan assert that they the Court adjudicated this case in its 19 December 2005
are the entities who actually built the NAIA-IPT III pursuant to the Decision.
Onshore Construction and Offshore Procurement Contracts. In
Agan, the Court declared that PIATCO is the builder of the NAIA- While the Government refers to a judgment rendered by a London
IPT III. The Court stated: court in favor of Takenaka and Asahikosan against PIATCO in the
amount of US$82 Million, it should be noted that this foreign
This Court, however, is not unmindful of the reality that the judgment is not yet binding on Philippine courts. It is entrenched
structures comprising the NAIA IPT III facility are almost complete in Section 48, Rule 39 of the Rules of Civil Procedure that a
and that funds have been spent by PIATCO in their construction. foreign judgment on the mere strength of its promulgation is not
For the government to take over the said facility, it has to yet conclusive, as it can be annulled on the grounds of want of
compensate respondent PIATCO as builder of the said structures. jurisdiction, want of notice to the party, collusion, fraud, or clear
The compensation must be just and in accordance with law and mistake of law or fact. It is likewise recognized in Philippine
equity for the government cannot unjustly enrich itself at the jurisprudence and international law that a foreign judgment may
expense of PIATCO and its investors.360 be barred from recognition if it runs counter to public policy.

This finding is likewise affirmed in our February 1, 2006 Assuming that PIATCO indeed has corresponding obligations to
Resolution in Gingoyon where we declared: other parties relating to NAIA 3, the Court does not see how such
obligations, yet unproven, could serve to overturn the Decision
The Court is not wont to reverse its previous rulings based on mandating that the Government first pay PIATCO the amount of
factual premises that are not yet conclusive or judicially 3.02 Million Pesos before it may acquire physical possession over
established. Certainly, whatever claims or purported liens the facilities. This directive enjoining payment is in accordance
Takenaka and Asahikosan against PIATCO or over the NAIA 3 with Republic Act No. 8974, and under the mechanism
have not been judicially established. Neither Takenaka nor established by the law the amount to be initially paid is that
Asahikosan are parties to the present action, and thus have not which is provisionally determined as just compensation. The
presented any claim which could be acted upon by this Court. provisional character of this payment means that it is not yet
The earlier adjudications in Agan v. PIATCO made no mention of final, yet sufficient under the law to entitle the Government to the
either Takenaka or Asahikosan, and certainly made no writ of possession over the expropriated property.
declaration as to their rights to any form of compensation. If there
is indeed any right to remuneration due to these two entities There are other judicial avenues outside of this Motion for
arising from NAIA 3, they have not yet been established by the Reconsideration wherein all other claims relating to the airport
courts of the land. facilities may be ventilated, proved and determined. Since such

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claims involve factual issues, they must first be established by Pangasinan to pay Aquilino Calvo just compensation due to the
the appropriate trier of facts before they can be accorded any pendency of the interpleader that Juana Ordoñez brought based
respect by or binding force on this Court.361 [Emphasis supplied] on her own claim of ownership of the expropriated land. Ordoñez
asserted that she acquired all rights and interests on the subject
Contrary to Takenaka and Asahikosan's position, in the land when she purchased it during the execution sale while the
Philippine jurisdiction, the person who is solely entitled to just expropriation proceedings were still pending.
compensation is the owner of the property at the time of the
taking.362 As shown below, the test of who shall receive just Philippine Veterans Bank v. Bases Conversion Development
compensation is not who built the terminal, but rather who its Authority365 further affirms the rule that just compensation
true owner is. shall only be paid to the owner of the expropriated property at the
time of taking. In that case, the Court held that the trial court
From the express provision of Section 4 of RA 8974, just may order the payment of just compensation to itself pending the
compensation shall only be paid to the property owner. We adjudication of the issue of ownership in other proceedings
implead persons with lawful interests in the property in order to pursuant to Section 9, Rule 67 of the Rules of Court.
determine the person who shall receive just compensation. Note
that the last paragraph, Section 4 of RA 8974 states: "When the The Court likewise did not award just compensation to a non-
decision of the court becomes final and executory, the owner in Republic v. Mangotara.366 The Court held that the filing
implementing agency shall pay the owner the difference between of a supplemental complaint for expropriation impleading private
the amount already paid and the just compensation as parties does not necessarily amount to an admission that the
determined by the court." This provision thus envisions a parcels of land sought to be expropriated are privately owned. The
situation where the court determines with finality, for purposes of Republic merely acknowledged that there are private persons also
payment of just compensation, the conflicting claims of the claiming ownership of the parcels of land. The Republic can still
defendants and intervenors. consistently assert, in both actions for expropriation and
reversion, that the subject parcels of land are part of the public
The cases cited by Takenaka and Asahikosan are inapplicable to domain.
justify their right to receive just compensation. The Court did not
award just compensation to a non-owner in De Knecht v. Court of The record of the present case show that PIATCO has been the
Appeals.363 The Court held in that case that a person who had original contracting party commissioned by the Government to
no legal interest in the property at the time of the filing of a construct the NAIA-IPT III based on a build-operate-transfer
complaint for expropriation had no right to intervene in the case. arrangement and who, in this capacity, contracted out the actual
The Court ruled that only persons who have lawful interests in construction to Takenaka and Asahikosan. Thus, when the NAIA-
the property may be impleaded as defendants or may intervene in IPT III was built, it was in PIATCO's name and account, although
the expropriation case under Section 1, Rule 67 of the Rules of it subsequently owed sums to subcontractors, incurred in the
Court. This case thus, at most, support their right to intervene. course of the construction. From this perspective, PIATCO has
been the owner recognized as such by the Government although
In Calvo v. Zandueta,364 the Court stayed the execution of the the basis of its contractual relationship with the Government was
trial court's judgment ordering the provincial treasurer of later on nullified. Takenaka and Asahikosan, on the other hand,

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had always been subcontractors with whom the Government did builder includes the contractor and the subcontractor. On the
not have any formal link. These facts indubitably show that other hand, the "owner" who is constitutionally entitled to just
PIATCO has been the owner of the NAIA-IPT III entitled to receive compensation is the person who has legal title to the property.
the just compensation due. Takenaka and Asahikosan for their Logically, a builder is not necessarily the owner of the property
part, have not shown that they possess legal title or colorable title and vice-versa.
to the NAIA-IPT III that would defeat PIATCO's ownership.
Second, we cannot recognize Takenaka and Asahikosan's claimed
To recap and expound on the matter: liens over the NAIA-IPT III in this just compensation case. Since
G.R. No. 202166 is still pending before the Court, we cannot
First, Takenaka and Asahikosan were mere subcontractors in the conclusively rule that Takenaka and Asahikosan are unpaid
nullified NAIA-IPT III project. That Takenaka and Asahikosan creditors of PIATCO without preempting the Court's ruling in the
actually built the NAIA-IPT III does not make them the owner of enforcement case.
the terminal building.
Even assuming that Takenaka and Asahikosan - as unpaid
We carefully point out that our finding in this case that Takenaka contractors in the botched NAIA-IPT III construction contract -
and Asahikosan are the actual builders of the NAIA-IPT III does indeed have liens over the NAIA-IPT III, PIATCO is still the
not contravene our rulings in Agan and Gingoyon that PIATCO is property owner who, as such, should directly receive just
the builder of the NAIAIPT III. The word "builder" is broad enough compensation from the Government.
to include the contractor, PIATCO, and the subcontractors,
Takenaka and Asahikosan, in the nullified NAIA-IPT III project. We clarify that the expropriation court's determination of the
Republic Act No. 4566367 defines a "builder" as follows: lawful property owner is merely provisional. By filing an action for
expropriation, the condemnor merely serves notice that it is
Section 9 (b) of RA 4566. "Contractor" is deemed synonymous taking title to and possession of the property, and that the
with the term "builder" and, hence, any person who undertakes or defendant is asserting title to or interest in the property, not to
offers to undertake or purports to have the capacity to undertake prove a right to possession, but to prove a right to compensation
or submits a bid to, or does himself or by or through others, for the taking. The Court's disposition with respect to the
construct, alter, repair, add to, subtract from, improve, move, ownership of the property is not conclusive, and it remains open
wreckor demolish any building, highway, road, railroad, to challenge through proper actions. The court's resolution of the
excavation or other structure, project, development or title to the land at the time of taking has no legal consequences
improvement, or to do any part thereof, including the erection of beyond the eminent domain proceedings. The court's decision
scaffolding or other structures or works in connection therewith. cannot be pleaded as a defense of res judicataor collateral
The term contractor includes subcontractor and specialty estoppel in any action to determine title to the property.
contractor.
As we explained in Republic of the Philippines v. Samson-
In Gingoyon, the Court loosely used the word "builder" and Tatad:368
"owner" interchangeably. We clarify, however, that a builder is
different from the owner of the property. As we stated above, a

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CASES ON EVIDENCE

However, the authority to resolve ownership should be taken in relevant periods under Rule 39 of the Rules of Court. The
the proper context. The discussion in Republic was anchored on recourse of the person claiming ownership over the expropriated
the question of who among the respondents claiming ownership property in any subsequent case is against the adjudged property
of the property must be indemnified by the Government: owner in the expropriation case.

Now, to determine the person who is to be indemnified for the The principle of res judicata applies in this particular matter
expropriation of Lot 6, Block 6, Psd-2017, the court taking because the issues on the amount of just compensation and the
cognizance of the expropriation must necessarily determine if the person to be paid just compensation are the central issues in the
sale to the Punzalan spouses by Antonio Feliciano is valid or not. second phase of expropriation. Based on this principle, a final
For if valid, said spouses must be the ones to be paid by the judgment or decree on the merits by a court of competent
condemnor; but if invalid, the money will be paid to someone else. jurisdiction is conclusive of the rights of the parties or their
xxx privies in all later suits on points and matters determined in the
former suit.369
Thus, such findings of ownership in an expropriation proceeding
should not be construed as final and binding on the parties. By There would be no end to litigation in an eminent domain case if
filing an action for expropriation, the condemnor (petitioner), we rule otherwise; we would only foment mockery of the judicial
merely serves notice that it is taking title to and possession of the proceedings as the order of payment in the eminent domain case
property, and that the defendant is asserting title to or interest in would never be truly final and executory. Furthermore, to the
the property, not to prove a right to possession, but to prove a detriment of the public, interest would continue to accrue on just
right to compensation for the taking. compensation if we rule that the order of payment to a particular
recipient can be reversed in the subsequent judicial proceedings
If at all, this situation is akin to ejectment cases in which a court and is, indeed, reversed in the subsequent case. This would be
is temporarily authorized to determine ownership, if only to unfair to the State (and the public) that merely
determine who is entitled to possession. This is not conclusive,
and it remains open to challenge through proper actions. The exercised its immutable right to exercise the power of eminent
consequences of Sec. 9, Rule 67 cannot be avoided, as they are domain.
due to the intimate relationship of the issue of ownership with the
claim for the expropriation payment. (Emphasis supplied) Contrary to Takenaka and Asahikosan's claim, in Calvo v.
Zandueta,370 the Court did not stay the execution of a final and
9.c. A final disposition in the eminent executory ruling in the eminent domain case during the pendency
domain case with respect to the order of the interpleader case.
of payment to a particular person shall
be final and executory. A close reading of Calvo shows that the order of payment of just
compensation in that case was not yet final and executory.
To avoid future litigation, we emphasize that a final disposition in
the eminent domain case with respect to the order to pay a
particular person shall be final and executory upon the lapse of

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In November 1924, the municipality of San Quintin, Pangasinan could not be bound by the judgment. Ordoñez' claim that she
filed an action for expropriation of a parcel of land owned by stands subrogated to Calvo's right to just compensation has the
Aquilino Calvo and with a Certificate of Title No. 25100. appearance of validity. The judicial determination of her claim
may be adjudicated in an action for interpleader which was then
On November 25, 1925, the Court of First Instance (CFI) approved pending when the motion for substitution was filed.
the commissioners' valuation of the subject land in the sum of Consequently, the trial court correctly stayed the execution of the
₱6,943.25. The municipality of San Quintin appealed the case but judgment in the expropriation case. Whenever necessary to
subsequently withdrew the appeal on June 23, 1926. The CFI promote the ends of justice, courts have the power to temporarily
approved the withdrawal of appeal on July 20, 1926. stay executions of judgments rendered by them."

In the meantime, Juana Ordoñez levied on the subject land after Clearly, the November 25, 1925 decision in Calvo was not yet
she obtained a favorable judgment against Calvo. The levy was final and executory when the Court suspended the execution of
recorded on the certificate of title on December 23, 1925. that ruling. The July 29, 1926 order revoked the June 29, 1926
Thereafter, the sheriff sold the subject land to Ordoñez inan order which in turn declared the finality of the November 25,
execution sale. On January 23, 1926, the sale was duly entered 1925 decision of the CFI. Ordoñez filed a motion for the reversal
by memorandum on the certificate of title. On the same date, of the June 29, 1926 order prior to the CFI's withdrawal of appeal
Ordoñez filed a motion for substitution as a defendant in the on July 20, 1926. Significantly, the CFI approved the withdrawal
expropriation case on the ground that she acquired all the rights of appeal on the same date that the CFI revoked the June 29,
and interests of Calvo on the subject land. 1926 order and ordered the provincial treasurer of Pangasinan to
withhold the just compensation. There is thus no basis to
On June 29, 1926, the CFI declared the November 25, 1925 Takenaka and Asahikosan's claim that the execution of a final
decision final and ordered the provincial treasurer of Pangasinan and executory judgment on just compensation may be suspended
to pay Calvo a part of just compensation. The following day, if there is still a subsisting case regarding the disputed ownership
Ordoñez filed a motion praying for the revocation of the June 29, of the expropriated property.
1926 order and for the provincial treasurer of Pangasinan to
retain the award of just compensation. 9.d. The determination of whether the
NAIA-IPT III shall be burdened by liens
On July 20, 1926, the CFI revoked the June 29, 1926 order and and mortgages even after the full
ordered the provincial treasurer of Pangasinan to retain the payment of just compensation is still
money until further orders of the court. After the CFI denied premature.
Calvo et al.'s motion for reconsideration, they filed a petition for
certiorari before the Court. The determination of whether the NAIA-IPT III shall be burdened
by liens and mortgages even after the full payment of just
The Court denied the petition. The Court ruled that "assuming compensation is still premature. The enforceability of Claim Nos.
that the judgment of November 25, 1925, constituted a final HT-04-248 and HT-05-269 in this jurisdiction has yet to be
determination of the petitioners' right to receive the award," decided by the Court in G.R. No. 202166. Furthermore, the
Ordoñez was not a party to the expropriation case and, therefore, application of Article 2242 of the Civil Code371 presupposes that

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CASES ON EVIDENCE

PIATCO declared insolvency or has been declared insolvent. This,

of course, should be litigated in insolvency proceedings, not in the 10. The exercise of eminent
present eminent domain case. domain from the perspective of
"taking."
The Court cannot pass upon the validity and enforceability of civil
claims against PIATCO by creditor/s in an expropriation case or 10.a. The Government may take
the existence of liens on the NAIA-IPT III. Section 114 of Republic the property for public
Act No. 10142372 provides: purpose or public use upon
the issuance and effectivity
Section 114. Rights of Secured Creditors. - The Liquidation Order of the writ of possession.
shall not affect the right of a secured creditor to enforce his lien in
accordance with the applicable contract or law. A secured creditor To clarify and to avoid confusion in the implementation of our
may: judgment, the full payment of just compensation is not a
prerequisite for the Government's effective taking of the property.
(a) waive his right under the security or lien, prove his claim in As discussed above, RA 8974 allows the Government to enter the
the liquidation proceedings and share in the distribution of the property and implement national infrastructure projects upon the
assets of the debtor; or issuance of the writ of possession. When the taking of the
property precedes the payment of just compensation, the
(b) maintain his rights under the security or lien: Government shall indemnify the property owner by way of
interest.
If the secured creditor maintains his rights under the security or
lien: "Taking" under the power of eminent domain means entering
upon private property for more than a momentary period, and
(1) the value of the property may be fixed in a manner agreed under the warrant or color of legal authority, devoting it to public
upon by the creditor and the liquidator. When the value of the use, or otherwise informally appropriating or injuriously affecting
property is less than the claim it secures, the liquidator may it in such a way as substantially to oust the owner and deprive
convey the property to the secured creditor and the latter will be him of all beneficial enjoyment thereof.373
admitted in the liquidation proceedings as a creditor for the
balance. If its value exceeds the claim secured, the liquidator may "Taking" of property takes place when: (1) the owner is actually
convey the property to the creditor and waive the debtor's right of deprived or dispossessed of his property;(2) there is a practical
redemption upon receiving the excess from the creditor; destruction or a material impairment of the value of his property;
(3) the owner is deprived of the ordinary use of the property, or (4)
(2) the liquidator may sell the property and satisfy the secured when he is deprived of the jurisdiction, supervision and control of
creditor's entire claim from the proceeds of the sale; or his property.374

(3) the secure creditor may enforce the lien or foreclose on the The taking of property is different from the transfer of the
property pursuant to applicable laws. property title from the private owner to the Government. Under

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CASES ON EVIDENCE

Rule 67 of the Rules of Court, there are two phases of In National Power Corporation (NPC) v. Spouses Malit,379 the
expropriation: (a) the condemnation of the property after it is NPC's transmission lines had to pass the Spouses Malit's
determined that its acquisition will be for a public purpose or property. The Court ruled that the NPC's easement of right-of-
public use; and (b) the determination of just compensation to be wayon the land was equivalent to the taking of property. The
paid for the taking of private property to be made by the court limitation imposed by the NPC against the use of the land for an
with the assistance of not more than three commissioners. indefinite period deprived the Spouses Malit of the lot's ordinary
use. Consequently, the NPC shall give the Spouses Malit just
The first phase is concerned with the determination of the compensation.
Government's authority to exercise the power of eminent domain
and the propriety of its exercise in the context of the facts The reckoning period, however, of the valuation of just
involved in the suit. The court declares that the Government has compensation is the date of taking or the filing of the complaint
a lawful right to take the property sought to be condemned, for for expropriation, whichever is earlier. In either case, it is only
the public use or purpose described in the complaint.375 after the finality of the second stage and after the payment of just
compensation that the title shall pass to the Government. As we
The second phase relates to the just amount that the Government have ruled in Gingoyon, the title to the property does not pass to
shall compensate the property owner.376 the condemnor until just compensation is paid.

Whenever the court affirms the condemnation of private property Under Section 4 of RA 8974, the Government is only entitled to a
in the first phase of the proceedings, it merely confirms the writ of possession upon initial payment of just compensation to
Government's lawful right to take the private property for public the defendant, and upon presentment to the court of a certificate
purpose or public use. The court does not necessarily rule that of availability of funds.
the title to the private property likewise vests on the Government.
A writ of possession does not transfer title to the Government; it
The transfer of property title from the property owner to the is "a writ of execution employed to enforce a judgment to recover
Government is not a condition precedent to the taking of the possession of land. It commands the sheriff to enter the land
property. The State may take private property prior to the and give its possession to the person entitled under the
eventual transfer of title of the expropriated property to the State. judgment."380 Section 4 of RA 8974 further states that the writ of
possession is an order to take possession of the property and to
In fact, there are instances when the State takes the property start the implementation of the project, to wit:
prior to the filing of the complaint for expropriation or without
involving the transfer of title.377 In People v. Fajardo,378 the Section 4. Guidelines for Expropriation Proceedings. - Whenever it
Court ruled that the municipal mayor's refusal to give the is necessary to acquire real property for the right-of-way or
property owner the permission to build a house on his own land location for any national government infrastructure project
on the ground that the structure would destroy the beauty of the through expropriation, the appropriate implementing agency shall
public plaza amounts to the taking of the property requiring just initiate the expropriation proceedings before the proper court
compensation. under the following guidelines:

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CASES ON EVIDENCE

(a) Upon the filing of the complaint, and after due notice to the
defendant, the implementing agency shall immediately pay the The Government is provisionally authorized to take the property
owner of the property the amount equivalent to the sum of (1) one for public purpose or public use whenever the court issues a writ
hundred percent (100%) of the value of the property based on the of possession in favor of the Government. It may take possession
current relevant zonal valuation of the Bureau of Internal of the property or effectively deprive the property owner of the
Revenue (BIR); and (2) the value of the improvements and/or ordinary use of the property. If the court, however, later on
structures as determined under Section 7 hereof; determines that the State has no right of expropriation, then the
State shall immediately restore the defendant of the possession of
(b) In provinces, cities, municipalities and other areas where there the property and pay the property owner damages that he
is no zonal valuation, the BIR is hereby mandated within the sustained. Section 11, Rule 67 of the Rules of Court: Section 11.
period of sixty (60) days from the date of the expropriation case, Entry not delayed by appeal; effect of reversal. - The right of the
to come up with a zonal valuation for said area; and plaintiff to enter upon the property of the defendant and
appropriate the same for public use or purpose shall not be
(c) In case the completion of a government infrastructure project delayed by an appeal from the judgment. But if the appellate
is of utmost urgency and importance, and there is no existing court determines that plaintiff has no right of expropriation,
valuation of the area concerned, the implementing agency shall judgment shall be rendered ordering the Regional Trial Court to
immediately pay the owner of the property its proffered value forthwith enforce the restoration to the defendant of the
taking into consideration the standards prescribed in Section 5 possession of the property, and to determine the damages which
hereof. the defendant sustained and may recover by reason of the
possession taken by the plaintiff. (11a)
Upon compliance with the guidelines abovementioned, the court
shall immediately issue to the implementing agency an order to The State's taking of the property is not based on trust or
take possession of the property and start the implementation of contract, but is founded on its inherent power to appropriate
the project. private property for public use. It is also for this reason - to
compensate the property owner for the deprivation of his right to
Before the court can issue a Writ of Possession, the implementing enjoy the ordinary use of his property until the naked title to the
agency shall present to the court a certificate of availability of property passed to the State - that the State pays interest from
funds from the proper official concerned. the time of the taking of the property until full payment of just
compensation.
In the event that the owner of the property contests the
implementing agency's proffered value, the court shall determine This conclusion is consistent with the dispositive portion of our
the just compensation to be paid the owner within sixty (60)days ruling in Gingoyon where we authorized the Government to
from the date of filing of the expropriation case. When the perform acts that are essential to the operation of the NAIA-IPT III
decision of the court becomes final and executory, the as an international airport terminal upon the effectivity of the writ
implementing agency shall pay the owner the difference between of possession. The authority granted to the Government
the amount already paid and the just compensation as encompasses "the repair, reconditioning and improvement of the
determined by the court. (Emphasis supplied) complex, maintenance of the existing facilities and equipment,

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CASES ON EVIDENCE

installation of new facilities and equipment, provision of services exclusively choose among its nominees pursuant to Section 7 of
and facilities pertaining to the facilitation of air traffic and RA 8974 as well as Sections 10 and 11 of RA 8974 IRR.
transport, and other services that are integral to a modern-day
international airport." The RTC sustained the appointment of DG Jones and Partners in
an order dated January 7, 2008.The RTC ruled that its power to
The present case involves the second stage of expropriation or the appoint the members of the BOC under Section 5, Rule 67 of the
determination of replacement cost of the NAIA-IPT III. The first Rules of Court was broad enough as to include the appointment
stage has become final after the promulgation of the December of an independent appraiser.
19, 2005 decision and the February 1, 2006 resolution in
Gingoyon where we affirmed the Government's power to On February 6, 2008, the Government filed a petition for
expropriate the NAIA-IPT III and where we ordered the issuance of certiorari with prayer for the issuance of a temporary restraining
a writ of possession upon the Government's direct payment of the order and/or a writ of preliminary injunction before the Court
proffered value of ₱3 billion to PIATCO. Thus, the reinstatement of assailing the May 3, 2007; May 18, 2007; and January 7, 2008
the writ of possession on September 11, 2006, empowered the orders (G.R. No. 181892).
Government to take the property for public use, and to effectively
deprive PIATCO of the ordinary use of the NAIA-IPT III. On January 9, 2008, the Court issued a temporary restraining
order against the implementation of the May 3, May 18, and
B. G.R. No. 181892 January 7, 2008 orders.

1. The issue on the appointment of On August 5, 2010, the RTC ordered the parties to submit their
an independent appraiser is appraisal reports of the NAIA-IPTIII. The Government, PIATCO,
already moot and academic. Takenaka and Asahikosan separately hired their own appraisers
who came up with their different valuations of the NAIA-IPT III.
In G.R. No. 181892, the RTC, in its order dated May 5,2006,
ordered the appointment of an independent appraiser to conduct On March 31, 2011, the BOC submitted its Final Report
the valuation of the NAIA-IPT III upon the BOC's request. recommending the payment of just compensation in the amount
Thereafter, the Government and PIATCO submitted their lists of of $376,149,742.56. On May 23, 2011, the RTC rendered a
nominees to this position. On May 3, 2007, the RTC engaged the decision ordering the Government to pay PIATCO just
services of DG Jones and Partners as an independent appraiser. compensation in the amount of $116,348,641.10. The CA
On May 18, 2007, the RTC directed the Government to submit a modified the RTC ruling and held that the just compensation as
Certificate of Availability of Funds to cover DG Jones and of July 31, 2013, amounts to $371,426,742.24.
Partners' $1.9 Million appraisal fee.
These developments render the appointment of DG Jones and
The Government disputed the May 3 and 18, 2007 orders and Partners as an independent appraiser of the NAIA-IPT III
argued that the RTC had no power to appoint an independent ineffective. An appraiser is a person selected or appointed by
appraiser. The Government insisted that the RTC should competent authority to ascertain and state the true value of goods
or real estate.381 The purpose of appointing DG Jones and

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CASES ON EVIDENCE

Partners as an independent appraiser was to assist the BOC in recommendatory in character. DG Jones and Partners' valuation
appraising the NAIA-IPT III. In fact, the BOC requested the RTC to was only preliminary and was not by any means meant to be final
engage the services of an independent appraiser because the BOC and conclusive on the parties. In the exercise of its judicial
had no technical expertise to conduct the valuation of the NAIA- functions, it is the expropriation court who has the final say on
IPT III. In turn, the BOC was to recommend to the RTC the the amount of just compensation. Since the RTC has already
replacement cost of the NAIA-IPT III. Under Section 8, Rule 67 of made a factual finding on the valuation of the NAIA-IPT III, there
the Rules of Court, the RTC may accept or reject, whether in is no point in appointing DG Jones and Partners as an
whole or in part, the BOC's report which is merely advisory and independent appraiser. To reiterate, valuation involves a factual
recommendatory in character. question that is within the province of the expropriation court,
and not the BOC or the independent appraiser. DG Jones and
We find, under the given circumstances, that the propriety of the Partners' rule has simply been overtaken by events.
appointment of DG Jones and Partners and the corollary issue of
who should shoulder the independent appraiser's fees moot and As a final note, while we stated in Gingoyon that the RTC may
academic. validly appoint commissioners in the appraisal of the NAIA-IPT III,
the trial court should have appointed commission members who
An actual case or controversy exists when there is a conflict of possessed technical expertise in the appraisal of a complex
legal rights or an assertion of opposite legal claims between the terminal building. Under Section 5, Rule 67 of the Rules of Court,
parties that is susceptible or ripe for judicial resolution.382 A the BOC's main functions are to ascertain and report to the court
justiciable controversy must not be moot and academic or have the just compensation for the property sought to be taken. The
no practical use or value. In other words, there must be a definite appointment of technical experts as commissioners would have
and concrete dispute touching on the legal relations of the parties avoided the DG Jones aspect of the controversy as there would
who have adverse legal interests. Otherwise, the Court would have been no need for the trial court to hire an independent
simply render an advisory opinion on what the law would be on a appraiser. This would have avoided the duplication of tasks and
hypothetical state of facts. The disposition of the case would not delay in the proceedings.
have any practical use or value as there is no actual substantial
relief to which the applicant would be entitled to and which would To summarize, we rule that:
be negated by the dismissal or denial of the petition.383
(1) The May 23, 2011 decision of the RTC in Civil Case No. 04-
After the BOC submitted its Final Report on the replacement cost 0876 is valid. The parties were afforded procedural due process
of the NAIA-IPT III based on the appraisal reports and other since their respective positions, counter-positions, and evidence
evidence submitted by the parties, the appointment of DG Jones were considered by the trial court in rendering the decision.
and Partners ceased to serve any purpose. Any subsequent
findings of DG Jones and Partners regarding the appraisal of the (2) Replacement cost is a different standard of valuation from fair
NAIA-IPT III would cease to have any practical materiality since market value. Fair market value is the price at which a property
the RTC proceedings on the amount of just compensation had may be sold by a seller who is not compelled to sell and bought by
already been terminated. As with the BOC, the independent a buyer who is not compelled to buy. In contrast, replacement
appraiser's valuation of the NAIAIPT III was advisory and cost is the amount necessary to replace the

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CASES ON EVIDENCE

improvements/structures, based on the current market prices for

materials, equipment, labor, contractor's profit and overhead, and (7) The Government may deprive PIATCO of the ordinary use of
all other attendant costs associated with the acquisition and the NAIA-IPT III upon the issuance and effectivity of the writ of
installation in place of the affected improvements/structures. (3) possession on September 11, 2006. However, the Government
In computing just compensation, the Court shall use the shall only have ownership of the NAIA-IPT III after it fully pays
replacement cost method and the standards laid down in Section PIATCO the just compensation due.
5 of RA 8974 as well as Section 10 of RA 8974. The Court shall
likewise consider equity in the determination of the just (8) The expenses of the BOC, which are part of the costs, shall be
compensation due for NAIA-IPT III. shouldered by the Government as the condemn or of the property
pursuant to Section 12,Rule 67 of the Rules of Court.
(4) The use of depreciated replacement cost method is consistent Consequently, Takenaka and Asahikosan shall not share in the
with the principle that the property owner shall be compensated expenses of the BOC. PIATCO is deemed to have waived its right
for his actual loss. It is consistent as well with Section 10 of RA not to share in the expenses of the BOC since it voluntarily
8974 IRR which provides that the courts shall consider the kinds shared in the expenses of the BOC.
and quantities of materials/equipment used and the
configuration and other physical features of the property, among (9) The issues of the propriety of the appointment of DG Jones
other things, in the valuation of the NAIAIPT III. The Government and Partners as an independent appraiser in the valuation of the
should not compensate PIATCO based on the value of a modern NAIA-IPT III and who should shoulder DG Jones and Partners'
equivalent asset that has the full functional utility of a brand new appraisal fee are already moot and academic. The purpose of
asset. appointing DG Jones and Partners as an independent appraiser
was to assist the BOC in the appraisal of NAIA-IPT III. As with the
(5) The amount of just compensation as of the filing of the BOC, the independent appraiser's recommendation to the RTC
complaint for expropriation on December 21, 2004, is was merely recommendatory and advisory in character. Since the
$326,932,221.26. From this sum shall be deducted the proffered RTC has already ruled on the just compensation in Civil Case No.
value of $59,438,604.00. The resulting difference of 04-0876, the appointment of an independent appraiser no longer
$267,493,617.26 shall earn a straight interest of 12% per annum serves any practical purpose.
from September 11, 2006 until June 30, 2013, and a straight
interest of 6% per annum from July 1, 2013, until full payment. WHEREFORE, premises considered, we PARTIALLY REVERSE the
August 22, 2013 amended Decision and the October 19, 2013
(6) PIATCO, as the owner of the NAIA-IPT III, shall solely receive Resolution of the Court of Appeals.
the just compensation. Based on the last paragraph, Section 4 of
RA 8974 and the prevailing jurisprudence, it is the owner of the 1) The principal amount of just compensation is fixed at
expropriated property who is constitutionally entitled to just $326,932,221.26 as of December 21, 2004. Thereafter, the
compensation. Other claimants should be impleaded or may amount of $267,493,617.26, which is the difference between
intervene in the eminent domain case if the ownership of the $326,932,221.26 and the proffered value of $59,438,604.00, shall
property is uncertain or there are conflicting claims on the earn a straight interest of 12% per annum from September 11,
property pursuant to Section 9, Rule 67 of the Rules of Court.

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CASES ON EVIDENCE

2006 until June 30, 2013, and a straight interest of 6% per

annum from July 1, 2013 until full payment;

2) The Government is hereby ordered to make direct payment of

the just compensation due to PIATCO; and

3) The Government is hereby ordered to defray the expenses of

the BOC in the sum of ₱3,500,000.00.

We DECLARE the issue of the appointment of DG Jones and

Partners as an independent appraiser of the Ninoy Aquino
International Airport Passenger Terminal III MOOT AND
ACADEMIC. The temporary restraining order issued on January
9,2008, against the implementation of the May 3, 2007; May 18,
2007; and January 7, 2008 orders of the Regional Trial Court of
Pasay City, Branch 117 is hereby made PERMANENT.

SO ORDERED.

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CASES ON EVIDENCE

Petitioner Filipina Y. Sy and private respondent Fernando Sy

contracted marriage on November 15, 1973 at the Church of Our
Lady of Lourdes in Quezon City. 4 Both were then 22 years old.
Their union was blessed with two children, Frederick and Farrah
Sheryll who were born on July 8, 1975 and February 14, 1978,
respectively.5

23. Sy v. CA The spouses first established their residence in Singalong,

Manila, then in Apalit, Pampanga, and later at San Matias, Sto.
Evidence; Pleadings and Practice; Although the marriage Tomas, Pampanga. They operated a lumber and hardware
certificate, the marriage license and other pieces of documentary business in Sto. Tomas, Pampanga.6
evidence were only photocopies, the fact that these have been
examined and admitted by the trial court, with no objections On September 15, 1983, Fernando left their conjugal dwelling.
having been made as to their authenticity and due execution, Since then, the spouses lived separately, and their two children
means that these documents are deemed sufficient proof of the were in the custody of their mother. However, their son Frederick
facts contained therein.—We note that their marriage certificate transferred to his father's residence at Masangkay, Tondo, Manila
and marriage license are only photocopies. So are the birth on May 15, 1988, and from then on, lived with his father.7
certificates of their son Frederick and daughter Farrah Sheryll.
Nevertheless, these documents were marked as Exhibits during On February 11, 1987, Filipina filed a petition for legal
the course of the trial below, which shows that these have been separation, docketed as Civil Case No. 7900 before the Regional
examined and admitted by the trial court, with no objections Trial Court of San Fernando, Pampanga. Later, upon motion of
having been made as to their authenticity and due execution. petitioner, the action was later amended to a petition for
Likewise, no objection was interposed to petitioner’s testimony in separation of property on the grounds that her husband
open court when she affirmed that the date of the actual abandoned her without just cause; that they have been living
celebration of their marriage was on November 15, 1973. We are separately for more than one year; and that they voluntarily
of the view, therefore, that having been admitted in evidence, with entered into a Memorandum of Agreement dated September 29,
the adverse party failing to timely object thereto, these documents 1983, containing the rules that would govern the dissolution of
are deemed sufficient proof of the facts contained therein. their conjugal partnership.8 Judgment was rendered dissolving
their conjugal partnership of gains and approving a regime of
QUISUMBING, J.: separation of properties based on the Memorandum of Agreement
executed by the spouses.9 The trial court also granted custody of
For review is the decision1 dated May 21, 1996 of the Court of the children to Filipina. 10
Appeals in CA-G.R. CV No. 44144, which affirmed the decision2
of the Regional Trial Court of San Fernando, Pampanga, denying In May 1988, Filipina filed a criminal action for attempted
the petition3 for declaration of absolute nullity of marriage of the parricide against her husband, docketed as Criminal Case No. 88-
spouses Filipina Sy and Fernando Sy. 68006, before the Regional Trial Court of Manila. Filipina testified

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CASES ON EVIDENCE

that in the afternoon of May 15, 1988, she went to the dental for separation of property and legal separation, and Fernando's
clinic at Masangkay, Tondo, Manila, owned by her husband but infliction of physical violence on her which led to the conviction of
operated by his mistress, to fetch her son and bring him to San her husband for slight physical injuries are symptoms of
Fernando, Pampanga. While she was talking to her son, the boy psychological incapacity. She also cites as manifestations of her
ignored her and continued playing with the family computer. husband's psychological incapacity the following: (1) habitual
Filipina got mad, took the computer away from her son, and alcoholism; (2) refusal to live with her without fault on her part,
started spanking him. At that instance, Fernando pulled Filipina choosing to live with his mistress instead; and (3) refusal to have
away from their son, and punched her in the different parts of her sex with her, performing the marital act only to satisfy himself.
body. Filipina also claimed that her husband started choking her Moreover, Filipina alleges that such psychological incapacity of
when she fell on the floor, and released her only when he thought her husband existed from the time of the celebration of their
she was dead. Filipina suffered from hematoma and contusions marriage and became manifest thereafter. 15
on different parts of her body as a result of the blows inflicted by
her husband, evidenced by a Medical Certificate issued by a The Regional Trial Court of San Fernando, Pampanga, in its
certain Dr. James Ferraren. She said it was not the first time decision 16 dated December 9, 1993, denied the petition of
Fernando maltreated her. 11 Filipina Sy for the declaration of absolute nullity of her marriage
to Fernando. It stated that the alleged acts of the respondent, as
The Regional Trial Court of Manila, however, in its decision 12 cited by petitioner, do not constitute psychological incapacity
dated April 26, 1990, convicted Fernando only of the lesser crime which may warrant the declaration of absolute nullity of their
of slight physical injuries, and sentenced him to 20 days marriage.
imprisonment.
Petitioner appealed to the Court of Appeals which affirmed the
Petitioner later filed a new action for legal separation against decision of the trial court. In the decision 17 of the Court of
private respondent, docketed as Civil Case No. 8273, on the Appeals dated May 21, 1996, it ruled that the testimony of
following grounds: (1) repeated physical violence; (2) sexual petitioner concerning respondent's purported psychological
infidelity; (3) attempt by respondent against her life; and (4) incapacity falls short of the quantum of evidence required to
abandonment of her by her husband without justifiable cause for nullify a marriage celebrated with all the formal and essential
more than one year. The Regional Trial Court of San Fernando, requisites of law. Moreover, the Court of Appeals held that
Pampanga, in its decision 13 dated December 4, 1991, granted petitioner failed to show that the alleged psychological incapacity
the petition on the grounds of repeated physical violence and of respondent had existed at the time of the celebration of their
sexual infidelity, and issued a decree of legal separation. It marriage in 1973. It reiterated the finding of the trial court that
awarded custody of their daughter Farrah Sheryll to petitioner, the couple's marital problems surfaced only in 1983, or almost
and their son Frederick to respondent. ten years from the date of the celebration of their marriage. And
prior to their separation in 1983, they were living together
On August 4, 1992, Filipina filed a petition 14 for the declaration harmoniously. Thus, the Court of Appeals affirmed the judgment
of absolute nullity of her marriage to Fernando on the ground of of the lower court which it found to be in accordance with law and
psychological incapacity. She points out that the final judgment the evidence on record. 18
rendered by the Regional Trial Court in her favor, in her petitions

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CASES ON EVIDENCE

Petitioner filed a motion for reconsideration, 19 which the Court

of Appeals denied in its resolution dated November 21, 1996. 20 In sum, two issues are to be resolved:

Hence, this appeal by certiorari 21 wherein petitioner now raises 1. Whether or not the marriage between petitioner and private
the following issues: respondent is void from the beginning for lack of a marriage
license at the time of the ceremony; and
1. WHETHER OR NOT THE HONORABLE COURT OF APPEALS
MANIFESTLY OVERLOOKED THE FACT THAT ON THE DATE OF 2. Whether or not private respondent is psychologically
THE CELEBRATION OF THE PARTIES' MARRIAGE ON incapacitated at the time of said marriage celebration to warrant
NOVEMBER 15, 1973, NOT DISPUTED BY RESPONDENT a declaration of its absolute nullity.
FERNANDO, THERE WAS NO MARRIAGE LICENSE THERETO;
Petitioner, for the first time, raises the issue of the marriage being
2. WHETHER OR NOT THE HONORABLE COURT OF APPEALS void for lack of a valid marriage license at the time of its
COMMITTED MISAPPREHENSION OF FACTS BY STATING THAT celebration. It appears that, according to her, the date of the
THE GROUNDS RELIED UPON BY APPELLANT [herein petitioner] actual celebration of their marriage and the date of issuance of
DO NOT CONSTITUTE PSYCHOLOGICAL INCAPACITY AS their marriage certificate and marriage license are different and
WOULD JUSTIFY NULLIFICATION OF HER MARRIAGE TO incongruous.
APPELLEE [herein respondent];
Although we have repeatedly ruled that litigants cannot raise an
3. WHETHER OR NOT THE HONORABLE COURT OF APPEALS issue for the first time on appeal, as this would contravene the
COMMITTED MISAPPREHENSION OF FACTS BY STATING THAT basic rules of fair play and justice, 23 in a number of instances,
APPELLANT FAILED TO SHOW THAT THE ALLEGED we have relaxed observance of procedural rules, noting that
UNDESIRABLE ACTUATIONS OF APPELLEE HAD EXISTED OR technicalities are not ends in themselves but exist to protect and
WERE PRESENT AT THE TIME THEIR MARRIAGE WAS promote substantive rights of litigants. We said that certain rules
CELEBRATED IN 1973; ought not to be applied with severity and rigidity if by so doing,
the very reason for their existence would be defeated. 24 Hence,
4. WHETHER OR NOT THE HONORABLE COURT OF APPEALS when substantial justice plainly requires, exempting a particular
COMMITTED GRAVE ABUSE OF DISCRETION IN AFFIRMING case from the operation of technicalities should not be subject to
THE ERRONEOUS RULING OF THE LOWER COURT THAT cavil. 25 In our view, the case at bar requires that we address the
THERE IS A REDEEMING ATTITUDE SHOWN TO THE COURT BY issue of the validity of the marriage between Filipina and
RESPONDENT FERNANDO WITH RESPECT TO HIS CHILDREN Fernando which petitioner claims is void from the beginning for
AND ALSO BELIEVES THAT RECONCILIATION BETWEEN THE lack of a marriage license, in order to arrive at a just resolution of
PARTIES IS NOT A REMOTE POSSIBILITY WHICH IS a deeply seated and violent conflict between the parties. Note,
ERRONEOUS; AND however, that here the pertinent facts are not disputed; and what
is required now is a declaration of their effects according to
5. WHETHER OR NOT THE CASE OF SANTOS V. COURT OF existing law.
APPEALS (240 SCRA 20) IS APPLICABLE HERETO. 22

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CASES ON EVIDENCE

Petitioner states that though she did not categorically state in her
petition for annulment of marriage before the trial court that the Carefully reviewing the documents and the pleadings on record,
incongruity in the dates of the marriage license and the we find that indeed petitioner did not expressly state in her
celebration of the marriage itself would lead to the conclusion petition before the trial court that there was incongruity between
that her marriage to Fernando was void from the beginning, she the date of the actual celebration of their marriage and the date of
points out that these critical dates were contained in the the issuance of their marriage license. From the documents she
documents she submitted before the court. The date of issue of presented, the marriage license was issued on September 17,
the marriage license and marriage certificate, September 17, 1974, almost one year after the ceremony took place on November
1974, is contained in their marriage contract which was attached 15, 1973. The ineluctable conclusion is that the marriage was
as Annex "A" in her petition for declaration of absolute nullity of indeed contracted without a marriage license. Nowhere do we find
marriage before the trial court, and thereafter marked as Exhibit private respondent denying these dates on record. Article 80 of
"A" in the course of the trial. 26 The date of celebration of their the Civil Code 31 is clearly applicable in this case. There being no
marriage at Our Lady of Lourdes, Sta. Teresita Parish, on claim of an exceptional character, the purported marriage
November 15, 1973, is admitted both by petitioner and private between petitioner and private respondent could not be classified
respondent, as stated in paragraph three of petitioner's petition among those enumerated in Articles 72-79 32 of the Civil Code.
for the declaration of absolute nullity of marriage before the trial We thus conclude that under Article 80 of the Civil Code, the
court, and private respondent's answer admitting it. 27 This fact marriage between petitioner and private respondent is void from
was also affirmed by petitioner, in open court, on January 22, the beginning.
1993, during her direct examination, 28 as follows:
We note that their marriage certificate and marriage license are
ATTY. RAZON: In the last hearing, you said that you were married only photocopies. So are the birth certificates of their son
on November 15, 1973? Frederick and daughter Farrah Sheryll. Nevertheless, these
documents were marked as Exhibits during the course of the trial
FILIPINA SY: Yes, Sir. below, which shows that these have been examined and admitted
by the trial court, with no objections having been made as to their
November 15, 1973, also appears as the date of marriage of the authenticity and due execution. Likewise, no objection was
parents in both their son's and daughter's birth certificates, interposed to petitioner's testimony in open court when she
which are also attached as Annexes "B" and "C" in the petition for affirmed that the date of the actual celebration of their marriage
declaration of absolute nullity of marriage before the trial court, was on November 15, 1973. We are of the view, therefore, that
and thereafter marked as Exhibits "B" and "C" in the course of the having been admitted in evidence, with the adverse party failing
trial. 29 These pieces of evidence on record plainly and to timely object thereto, these documents are deemed sufficient
indubitably show that on the day of the marriage ceremony, there proof of the facts contained therein. 33
was no marriage license. A marriage license is a formal
requirement; its absence renders the marriage void ab initio. In The remaining issue on the psychological incapacity of private
addition, the marriage contract shows that the marriage license, respondent need no longer detain us. It is mooted by our
numbered 6237519, was issued in Carmona, Cavite, yet, neither conclusion that the marriage of petitioner to respondent is void ab
petitioner nor private respondent ever resided in Carmona. 30

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CASES ON EVIDENCE

initio for lack of a marriage license at the time their marriage was the writing must foremost be an “electronic data message” or an
solemnized. “electronic document.”

WHEREFORE, the petition is GRANTED. The Decision of the NACHURA, J.:

Regional Trial Court of San Fernando, Pampanga, dated
December 9, 1993 as well as the Decision promulgated on May Before the Court is a petition for review on certiorari of the
21, 1996 by the Court of Appeals and its Resolution dated Decision1 of the Court of Appeals in CA-G.R. CV No. 82983 and
November 21, 1996 in CA-G.R. No. 44144 are set aside. The its Resolution2 denying the motion for reconsideration thereof.
marriage celebrated on November 15, 1973 between petitioner
Filipina Yap and private respondent Fernando Sy is hereby Petitioner MCC Industrial Sales (MCC), a domestic corporation
declared void ab initio for lack of a marriage license at the time of with office at Binondo, Manila, is engaged in the business of
celebration. No pronouncement as to costs. importing and wholesaling stainless steel products.3 One of its
suppliers is the Ssangyong Corporation (Ssangyong),4 an
SO ORDERED. international trading company5 with head office in Seoul, South
24. MCC Industrial Sales Corporation vs. Ssangyong Korea and regional headquarters in Makati City, Philippines.6
Corporation The two corporations conducted business through telephone calls
and facsimile or telecopy transmissions.7 Ssangyong would send
Electronic Commerce Act of 2000 (R.A. No. 8792); Evidence; Rules the pro forma invoices containing the details of the steel product
on Electronic Evidence; Best Evidence Rule; Words and Phrases; order to MCC; if the latter conforms thereto, its representative
To be admissible in evidence as an electronic data message or to affixes his signature on the faxed copy and sends it back to
be considered as the functional equivalent of an original Ssangyong, again by fax.8
document under the Best Evidence Rule, the writing must
foremost be an “electronic data message” or an “electronic On April 13, 2000, Ssangyong Manila Office sent, by fax, a letter9
document.”—The ruling of the Appellate Court is incorrect. R.A. addressed to Gregory Chan, MCC Manager [also the President10
No. 8792, otherwise known as the Electronic Commerce Act of of Sanyo Seiki Stainless Steel Corporation], to confirm MCC's and
2000, considers an electronic data message or an electronic Sanyo Seiki's order of 220 metric tons (MT) of hot rolled stainless
document as the functional equivalent of a written document for steel under a preferential rate of US$1,860.00 per MT. Chan, on
evidentiary purposes. The Rules on Electronic Evidence regards behalf of the corporations, assented and affixed his signature on
an electronic document as admissible in evidence if it complies the conforme portion of the letter.11
with the rules on admissibility prescribed by the Rules of Court
and related laws, and is authenticated in the manner prescribed On April 17, 2000, Ssangyong forwarded to MCC Pro Forma
by the said Rules. An electronic document is also the equivalent Invoice No. ST2-POSTSO40112 containing the terms and
of an original document under the Best Evidence Rule, if it is a conditions of the transaction. MCC sent back by fax to Ssangyong
printout or output readable by sight or other means, shown to the invoice bearing the conformity signature13 of Chan. As stated
reflect the data accurately. Thus, to be admissible in evidence as in the pro forma invoice, payment for the ordered steel products
an electronic data message or to be considered as the functional would be made through an irrevocable letter of credit (L/C) at
equivalent of an original document under the Best Evidence Rule, sight in favor of Ssangyong.14 Following their usual practice,

145
CASES ON EVIDENCE

delivery of the goods was to be made after the L/C had been June 27, 2000.24 On June 28, 2000, Ssangyong sent another
opened. facsimile letter to MCC stating that its principal in Korea was
already in a difficult situation25 because of the failure of Sanyo
In the meantime, because of its confirmed transaction with MCC, Seiki and MCC to open the L/C's.
Ssangyong placed the order with its steel manufacturer, Pohang
Iron and Steel Corporation (POSCO), in South Korea15 and paid The following day, June 29, 2000, Ssangyong received, by fax, a
the same in full. letter signed by Chan, requesting an extension of time to open the
L/C because MCC's credit line with the bank had been fully
Because MCC could open only a partial letter of credit, the order availed of in connection with another transaction, and MCC was
for 220MT of steel was split into two,16 one for 110MT covered by waiting for an additional credit line.26 On the same date,
Pro Forma Invoice No. ST2-POSTS0401-117 and another for Ssangyong replied, requesting that it be informed of the date
110MT covered by ST2-POSTS0401-2,18 both dated April 17, when the L/C would be opened, preferably at the earliest possible
2000. time, since its Steel Team 2 in Korea was having problems and
Ssangyong was incurring warehousing costs.27 To maintain their
On June 20, 2000, Ssangyong, through its Manila Office, good business relationship and to support MCC in its financial
informed Sanyo Seiki and Chan, by way of a fax transmittal, that predicament, Ssangyong offered to negotiate with its steel
it was ready to ship 193.597MT of stainless steel from Korea to manufacturer, POSCO, another US$20/MT discount on the price
the Philippines. It requested that the opening of the L/C be of the stainless steel ordered. This was intimated in Ssangyong's
facilitated.19 Chan affixed his signature on the fax transmittal June 30, 2000 letter to MCC.28 On July 6, 2000, another follow-
and returned the same, by fax, to Ssangyong.20 up letter29 for the opening of the L/C was sent by Ssangyong to
MCC.
Two days later, on June 22, 2000, Ssangyong Manila Office
informed Sanyo Seiki, thru Chan, that it was able to secure a However, despite Ssangyong's letters, MCC failed to open a letter
US$30/MT price adjustment on the contracted price of of credit.30 Consequently, on August 15, 2000, Ssangyong,
US$1,860.00/MT for the 200MT stainless steel, and that the through counsel, wrote Sanyo Seiki that if the L/C's were not
goods were to be shipped in two tranches, the first 100MT on that opened, Ssangyong would be compelled to cancel the contract
day and the second 100MT not later than June 27, 2000. and hold MCC liable for damages for breach thereof amounting to
Ssangyong reiterated its request for the facilitation of the L/C's US$96,132.18, inclusive of warehouse expenses, related interests
opening.21 and charges.31

Ssangyong later, through its Manila Office, sent a letter, on June Later, Pro Forma Invoice Nos. ST2-POSTS080-132 and ST2-
26, 2000, to the Treasury Group of Sanyo Seiki that it was POSTS080-233 dated August 16, 2000 were issued by Ssangyong
looking forward to receiving the L/C details and a cable copy and sent via fax to MCC. The invoices slightly varied the terms of
thereof that day.22 Ssangyong sent a separate letter of the same the earlier pro forma invoices (ST2-POSTSO401, ST2-POSTS0401-
date to Sanyo Seiki requesting for the opening of the L/C covering 1 and ST2-POSTS0401-2), in that the quantity was now officially
payment of the first 100MT not later than June 28, 2000.23 100MT per invoice and the price was reduced to US$1,700.00 per
Similar letters were transmitted by Ssangyong Manila Office on MT. As can be gleaned from the photocopies of the said August

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CASES ON EVIDENCE

16, 2000 invoices submitted to the court, they both bear the steel under Pro Forma Invoice Nos. ST2-POSTS0401-1 and ST2-
conformity signature of MCC Manager Chan. POSTS0401-2.

On August 17, 2000, MCC finally opened an L/C with PCIBank After Ssangyong rested its case, defendants filed a Demurrer to
for US$170,000.00 covering payment for 100MT of stainless steel Evidence40 alleging that Ssangyong failed to present the original
coil under Pro Forma Invoice No. ST2-POSTS080-2.34 The goods copies of the pro forma invoices on which the civil action was
covered by the said invoice were then shipped to and received by based. In an Order dated April 24, 2003, the court denied the
MCC.35 demurrer, ruling that the documentary evidence presented had
already been admitted in the December 16, 2002 Order41 and
MCC then faxed to Ssangyong a letter dated August 22, 2000 their admissibility finds support in Republic Act (R.A.) No. 8792,
signed by Chan, requesting for a price adjustment of the order otherwise known as the Electronic Commerce Act of 2000.
stated in Pro Forma Invoice No. ST2-POSTS080-1, considering Considering that both testimonial and documentary evidence
that the prevailing price of steel at that time was tended to substantiate the material allegations in the complaint,
US$1,500.00/MT, and that MCC lost a lot of money due to a Ssangyong's evidence sufficed for purposes of a prima facie
recent strike.36 case.42

Ssangyong rejected the request, and, on August 23, 2000, sent a After trial on the merits, the RTC rendered its Decision43 on
demand letter37 to Chan for the opening of the second and last March 24, 2004, in favor of Ssangyong. The trial court ruled that
L/C of US$170,000.00 with a warning that, if the said L/C was when plaintiff agreed to sell and defendants agreed to buy the
not opened by MCC on August 26, 2000, Ssangyong would be 220MT of steel products for the price of US$1,860 per MT, the
constrained to cancel the contract and hold MCC liable for contract was perfected. The subject transaction was evidenced by
US$64,066.99 (representing cost difference, warehousing Pro Forma Invoice Nos. ST2-POSTS0401-1 and ST2-POSTS0401-
expenses, interests and charges as of August 15, 2000) and other 2, which were later amended only in terms of reduction of volume
damages for breach. Chan failed to reply. as well as the price per MT, following Pro Forma Invoice Nos. ST2-
POSTS080-1 and ST2-POSTS080-2. The RTC, however, excluded
Exasperated, Ssangyong through counsel wrote a letter to MCC, Sanyo Seiki from liability for lack of competent evidence. The fallo
on September 11, 2000, canceling the sales contract under ST2- of the decision reads:
POSTS0401-1 /ST2-POSTS0401-2, and demanding payment of
US$97,317.37 representing losses, warehousing expenses, WHEREFORE, premises considered, Judgment is hereby rendered
interests and charges.38 ordering defendants MCC Industrial Sales Corporation and
Gregory Chan, to pay plaintiff, jointly and severally the following:
Ssangyong then filed, on November 16, 2001, a civil action for
damages due to breach of contract against defendants MCC, 1) Actual damages of US$93,493.87 representing the outstanding
Sanyo Seiki and Gregory Chan before the Regional Trial Court of principal claim plus interest at the rate of 6% per annum from
Makati City. In its complaint,39 Ssangyong alleged that March 30, 2001.
defendants breached their contract when they refused to open the
L/C in the amount of US$170,000.00 for the remaining 100MT of

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CASES ON EVIDENCE

2) Attorney's fees in the sum of P50,000.00 plus P2,000.00 per

counsel's appearance in court, the same being deemed just and III. THE HONORABLE COURT A QUO PLAINLY ERRED IN
equitable considering that by reason of defendants' breach of AWARDING ATTORNEY'S FEES TO APPELLEE.
their obligation under the subject contract, plaintiff was
constrained to litigate to enforce its rights and recover for the IV. THE HONORABLE COURT A QUO PLAINLY ERRED IN
damages it sustained, and therefore had to engage the services of FINDING APPELLANT GREGORY CHAN JOINTLY AND
a lawyer. SEVERALLY LIABLE WITH APPELLANT MCC.47

3) Costs of suit. On August 31, 2005, the CA rendered its Decision48 affirming the
ruling of the trial court, but absolving Chan of any liability. The
No award of exemplary damages for lack of sufficient basis. appellate court ruled, among others, that Pro Forma Invoice Nos.
ST2-POSTS0401-1 and ST2-POSTS0401-2 (Exhibits "E", "E-1"
SO ORDERED.44 and "F") were admissible in evidence, although they were mere
facsimile printouts of MCC's steel orders.49 The dispositive
On April 22, 2004, MCC and Chan, through their counsel of portion of the appellate court's decision reads:
record, Atty. Eladio B. Samson, filed their Notice of Appeal.45 On
June 8, 2004, the law office of Castillo Zamora & Poblador WHEREFORE, premises considered, the Court holds:
entered its appearance as their collaborating counsel.
(1) The award of actual damages, with interest, attorney's fees
In their Appeal Brief filed on March 9, 2005,46 MCC and Chan and costs ordered by the lower court is hereby AFFIRMED.
raised before the CA the following errors of the RTC:
(2) Appellant Gregory Chan is hereby ABSOLVED from any
I. THE HONORABLE COURT A QUO PLAINLY ERRED IN FINDING liability.
THAT APPELLANTS VIOLATED THEIR CONTRACT WITH
APPELLEE SO ORDERED.50

A. THE HONORABLE COURT A QUO PLAINLY ERRED IN A copy of the said Decision was received by MCC's and Chan's
FINDING THAT APPELLANTS AGREED TO PURCHASE 200 principal counsel, Atty. Eladio B. Samson, on September 14,
METRIC TONS OF STEEL PRODUCTS FROM APPELLEE, 2005.51 Their collaborating counsel, Castillo Zamora &
INSTEAD OF ONLY 100 METRIC TONS. Poblador,52 likewise, received a copy of the CA decision on
September 19, 2005.53
1. THE HONORABLE COURT A QUO PLAINLY ERRED IN
ADMITTING IN EVIDENCE THE PRO FORMA INVOICES WITH On October 4, 2005, Castillo Zamora & Poblador, on behalf of
REFERENCE NOS. ST2- POSTS0401-1 AND ST2-POSTS0401-2. MCC, filed a motion for reconsideration of the said decision.54
Ssangyong opposed the motion contending that the decision of
II. THE HONORABLE COURT A QUO PLAINLY ERRED IN the CA had become final and executory on account of the failure
AWARDING ACTUAL DAMAGES TO APPELLEE. of MCC to file the said motion within the reglementary period. The

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appellate court resolved, on November 22, 2005, to deny the for the purchase of the steel products when it failed to open the
motion on its merits,55 without, however, ruling on the required letter of credit; that the printout copies and/or
procedural issue raised. photocopies of facsimile or telecopy transmissions were properly
admitted by the trial court because they are considered original
Aggrieved, MCC filed a petition for review on certiorari56 before documents under R.A. No. 8792; and that MCC is liable for actual
this Court, imputing the following errors to the Court of Appeals: damages and attorney's fees because of its breach, thus,
compelling Ssangyong to litigate.
THE COURT OF APPEALS DECIDED A LEGAL QUESTION NOT IN
ACCORDANCE WITH JURISPRUDENCE AND SANCTIONED A The principal issues that this Court is called upon to resolve are
DEPARTURE FROM THE USUAL AND ACCEPTED COURSE OF the following:
JUDICIAL PROCEEDINGS BY REVERSING THE COURT A QUO'S
DISMISSAL OF THE COMPLAINT IN CIVIL CASE NO. 02-124 I – Whether the CA decision dated 15 August 2005 is already final
CONSIDERING THAT: and executory;

I. THE COURT OF APPEALS ERRED IN SUSTAINING THE II – Whether the print-out and/or photocopies of facsimile
ADMISSIBILITY IN EVIDENCE OF THE PRO-FORMA INVOICES transmissions are electronic evidence and admissible as such;
WITH REFERENCE NOS. ST2-POSTSO401-1 AND ST2-
POSTSO401-2, DESPITE THE FACT THAT THE SAME WERE III – Whether there was a perfected contract of sale between MCC
MERE PHOTOCOPIES OF FACSIMILE PRINTOUTS. and Ssangyong, and, if in the affirmative, whether MCC breached
the said contract; and
II. THE COURT OF APPEALS FAILED TO APPRECIATE THE
OBVIOUS FACT THAT, EVEN ASSUMING PETITIONER IV – Whether the award of actual damages and attorney's fees in
BREACHED THE SUPPOSED CONTRACT, THE FACT IS THAT favor of Ssangyong is proper and justified.
PETITIONER FAILED TO PROVE THAT IT SUFFERED ANY
DAMAGES AND THE AMOUNT THEREOF. -I-

III. THE AWARD OF ACTUAL DAMAGES IN THE AMOUNT OF It cannot be gainsaid that in Albano v. Court of Appeals,58 we
US$93,493.87 IS SIMPLY UNCONSCIONABLE AND SHOULD held that receipt of a copy of the decision by one of several
HAVE BEEN AT LEAST REDUCED, IF NOT DELETED BY THE counsels on record is notice to all, and the period to appeal
COURT OF APPEALS.57 commences on such date even if the other counsel has not yet
received a copy of the decision. In this case, when Atty. Samson
In its Comment, Ssangyong sought the dismissal of the petition, received a copy of the CA decision on September 14, 2005, MCC
raising the following arguments: that the CA decision dated 15 had only fifteen (15) days within which to file a motion for
August 2005 is already final and executory, because MCC's reconsideration conformably with Section 1, Rule 52 of the Rules
motion for reconsideration was filed beyond the reglementary of Court, or to file a petition for review on certiorari in accordance
period of 15 days from receipt of a copy thereof, and that, in any with Section 2, Rule 45. The period should not be reckoned from
case, it was a pro forma motion; that MCC breached the contract September 29, 2005 (when Castillo Zamora & Poblador received

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their copy of the decision) because notice to Atty. Samson is are issued to be obeyed, nonetheless a non-compliance is to be
deemed notice to collaborating counsel. dealt with as the circumstances attending the case may warrant.
What should guide judicial action is the principle that a party-
We note, however, from the records of the CA, that it was Castillo litigant is to be given the fullest opportunity to establish the
Zamora & Poblador, not Atty. Samson, which filed both MCC's merits of his complaint or defense rather than for him to lose life,
and Chan's Brief and Reply Brief. Apparently, the arrangement liberty, honor or property on technicalities.
between the two counsels was for the collaborating, not the
principal, counsel to file the appeal brief and subsequent The rules of procedure are used only to secure and not override or
pleadings in the CA. This explains why it was Castillo Zamora & frustrate justice. A six-day delay in the perfection of the appeal,
Poblador which filed the motion for the reconsideration of the CA as in this case, does not warrant the outright dismissal of the
decision, and they did so on October 5, 2005, well within the 15- appeal. In Development Bank of the Philippines vs. Court of
day period from September 29, 2005, when they received their Appeals, we gave due course to the petitioner's appeal despite the
copy of the CA decision. This could also be the reason why the CA late filing of its brief in the appellate court because such appeal
did not find it necessary to resolve the question of the timeliness involved public interest. We stated in the said case that the Court
of petitioner's motion for reconsideration, even as the CA denied may exempt a particular case from a strict application of the rules
the same. of procedure where the appellant failed to perfect its appeal
within the reglementary period, resulting in the appellate court's
Independent of this consideration though, this Court assiduously failure to obtain jurisdiction over the case. In Republic vs.
reviewed the records and found that strong concerns of Imperial, Jr., we also held that there is more leeway to exempt a
substantial justice warrant the relaxation of this rule. case from the strictness of procedural rules when the appellate
court has already obtained jurisdiction over the appealed case.
In Philippine Ports Authority v. Sargasso Construction and We emphasize that:
Development Corporation,59 we ruled that:
[T]he rules of procedure are mere tools intended to facilitate the
In Orata v. Intermediate Appellate Court, we held that where attainment of justice, rather than frustrate it. A strict and rigid
strong considerations of substantive justice are manifest in the application of the rules must always be eschewed when it would
petition, this Court may relax the strict application of the rules of subvert the rule's primary objective of enhancing fair trials and
procedure in the exercise of its legal jurisdiction. In addition to expediting justice. Technicalities should never be used to defeat
the basic merits of the main case, such a petition usually the substantive rights of the other party. Every party-litigant
embodies justifying circumstance which warrants our heeding to must be afforded the amplest opportunity for the proper and just
the petitioner's cry for justice in spite of the earlier negligence of determination of his cause, free from the constraints of
counsel. As we held in Obut v. Court of Appeals: technicalities.60

[W]e cannot look with favor on a course of action which would Moreover, it should be remembered that the Rules were
place the administration of justice in a straight jacket for then the promulgated to set guidelines in the orderly administration of
result would be a poor kind of justice if there would be justice at justice, not to shackle the hand that dispenses it. Otherwise, the
all. Verily, judicial orders, such as the one subject of this petition, courts would be consigned to being mere slaves to technical rules,

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CASES ON EVIDENCE

deprived of their judicial discretion. Technicalities must take a before ruling on whether the photocopies thereof are covered by
backseat to substantive rights. After all, it is circumspect leniency the law. In any case, this Court has ample authority to go beyond
in this respect that will give the parties the fullest opportunity to the pleadings when, in the interest of justice or for the promotion
ventilate the merits of their respective causes, rather than have of public policy, there is a need to make its own findings in order
them lose life, liberty, honor or property on sheer technicalities.61 to support its conclusions.63

The other technical issue posed by respondent is the alleged pro Petitioner contends that the photocopies of the pro forma invoices
forma nature of MCC's motion for reconsideration, ostensibly presented by respondent Ssangyong to prove the perfection of
because it merely restated the arguments previously raised and their supposed contract of sale are inadmissible in evidence and
passed upon by the CA. do not fall within the ambit of R.A. No. 8792, because the law
merely admits as the best evidence the original fax transmittal.
In this connection, suffice it to say that the mere restatement of On the other hand, respondent posits that, from a reading of the
arguments in a motion for reconsideration does not per se result law and the Rules on Electronic Evidence, the original facsimile
in a pro forma motion. In Security Bank and Trust Company, Inc. transmittal of the pro forma invoice is admissible in evidence
v. Cuenca,62 we held that a motion for reconsideration may not since it is an electronic document and, therefore, the best
be necessarily pro forma even if it reiterates the arguments earlier evidence under the law and the Rules. Respondent further claims
passed upon and rejected by the appellate court. A movant may that the photocopies of these fax transmittals (specifically ST2-
raise the same arguments precisely to convince the court that its POSTS0401-1 and ST2-POSTS0401-2) are admissible under the
ruling was erroneous. Furthermore, the pro forma rule will not Rules on Evidence because the respondent sufficiently explained
apply if the arguments were not sufficiently passed upon and the non-production of the original fax transmittals.
answered in the decision sought to be reconsidered.
In resolving this issue, the appellate court ruled as follows:
- II -
Admissibility of Pro Forma
The second issue poses a novel question that the Court welcomes. Invoices; Breach of Contract
It provides the occasion for this Court to pronounce a definitive by Appellants
interpretation of the equally innovative provisions of the
Electronic Commerce Act of 2000 (R.A. No. 8792) vis-à-vis the Turning first to the appellants' argument against the admissibility
Rules on Electronic Evidence. of the Pro Forma Invoices with Reference Nos. ST2-POSTS0401-1
and ST2-POSTS0401-2 (Exhibits "E", "E-1" and "F", pp. 215-218,
Although the parties did not raise the question whether the Records), appellants argue that the said documents are
original facsimile transmissions are "electronic data messages" or inadmissible (sic) being violative of the best evidence rule.
"electronic documents" within the context of the Electronic
Commerce Act (the petitioner merely assails as inadmissible The argument is untenable.
evidence the photocopies of the said facsimile transmissions), we
deem it appropriate to determine first whether the said fax The copies of the said pro-forma invoices submitted by the
transmissions are indeed within the coverage of R.A. No. 8792 appellee are admissible in evidence, although they are mere

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CASES ON EVIDENCE

electronic facsimile printouts of appellant's orders. Such facsimile Thus, to be admissible in evidence as an electronic data message
printouts are considered Electronic Documents under the New or to be considered as the functional equivalent of an original
Rules on Electronic Evidence, which came into effect on August 1, document under the Best Evidence Rule, the writing must
2001. (Rule 2, Section 1 [h], A.M. No. 01-7-01-SC). foremost be an "electronic data message" or an "electronic
document."
"(h) 'Electronic document' refers to information or the
representation of information, data, figures, symbols or other The Electronic Commerce Act of 2000 defines electronic data
modes of written expression, described or however represented, message and electronic document as follows:
by which a right is established or an obligation extinguished, or
by which a fact may be proved and affirmed, which is received, Sec. 5. Definition of Terms. For the purposes of this Act, the
recorded, transmitted, stored, processed, retrieved or produced following terms are defined, as follows:
electronically. It includes digitally signed documents and any
printout or output, readable by sight or other means, which xxx
accurately reflects the electronic data message or electronic
document. For purposes of these Rules, the term 'electronic c. "Electronic Data Message" refers to information generated,
document' may be used interchangeably with 'electronic data sent, received or stored by electronic, optical or similar means.
message'.
xxx
An electronic document shall be regarded as the equivalent of an
original document under the Best Evidence Rule, as long as it is a f. "Electronic Document" refers to information or the
printout or output readable by sight or other means, showing to representation of information, data, figures, symbols or other
reflect the data accurately. (Rule 4, Section 1, A.M. No. 01-7-01- modes of written expression, described or however represented,
SC) by which a right is established or an obligation extinguished, or
by which a fact may be proved and affirmed, which is received,
The ruling of the Appellate Court is incorrect. R.A. No. 8792,64 recorded, transmitted, stored, processed, retrieved or produced
otherwise known as the Electronic Commerce Act of 2000, electronically.
considers an electronic data message or an electronic document
as the functional equivalent of a written document for evidentiary The Implementing Rules and Regulations (IRR) of R.A. No.
purposes.65 The Rules on Electronic Evidence66 regards an 8792,69 which was signed on July 13, 2000 by the then
electronic document as admissible in evidence if it complies with Secretaries of the Department of Trade and Industry, the
the rules on admissibility prescribed by the Rules of Court and Department of Budget and Management, and then Governor of
related laws, and is authenticated in the manner prescribed by the Bangko Sentral ng Pilipinas, defines the terms as:
the said Rules.67 An electronic document is also the equivalent of
an original document under the Best Evidence Rule, if it is a Sec. 6. Definition of Terms. For the purposes of this Act and these
printout or output readable by sight or other means, shown to Rules, the following terms are defined, as follows:
reflect the data accurately.68
xxx

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CASES ON EVIDENCE

Conference Committee adopted both terms and intended them to

(e) "Electronic Data Message" refers to information generated, be the equivalent of each one.73 Be that as it may, there is a
sent, received or stored by electronic, optical or similar means, slight difference between the two terms. While "data message" has
but not limited to, electronic data interchange (EDI), electronic reference to information electronically sent, stored or transmitted,
mail, telegram, telex or telecopy. Throughout these Rules, the it does not necessarily mean that it will give rise to a right or
term "electronic data message" shall be equivalent to and be used extinguish an obligation,74 unlike an electronic document.
interchangeably with "electronic document." Evident from the law, however, is the legislative intent to give the
two terms the same construction.
xxxx
The Rules on Electronic Evidence promulgated by this Court
(h) "Electronic Document" refers to information or the defines the said terms in the following manner:
representation of information, data, figures, symbols or other
modes of written expression, described or however represented, SECTION 1. Definition of Terms. – For purposes of these Rules,
by which a right is established or an obligation extinguished, or the following terms are defined, as follows:
by which a fact may be proved and affirmed, which is received,
recorded, transmitted, stored, processed, retrieved or produced xxxx
electronically. Throughout these Rules, the term "electronic
document" shall be equivalent to and be used interchangeably (g) "Electronic data message" refers to information generated,
with "electronic data message." sent, received or stored by electronic, optical or similar means.

The phrase "but not limited to, electronic data interchange (EDI), (h) "Electronic document" refers to information or the
electronic mail, telegram, telex or telecopy" in the IRR's definition representation of information, data, figures, symbols or other
of "electronic data message" is copied from the Model Law on modes of written expression, described or however represented,
Electronic Commerce adopted by the United Nations Commission by which a right is established or an obligation extinguished, or
on International Trade Law (UNCITRAL),70 from which majority of by which a fact may be proved and affirmed, which is received,
the provisions of R.A. No. 8792 were taken.71 While Congress recorded, transmitted, stored, processed, retrieved or produced
deleted this phrase in the Electronic Commerce Act of 2000, the electronically. It includes digitally signed documents and print-
drafters of the IRR reinstated it. The deletion by Congress of the out or output, readable by sight or other means, which accurately
said phrase is significant and pivotal, as discussed hereunder. reflects the electronic data message or electronic document. For
purposes of these Rules, the term "electronic document" may be
The clause on the interchangeability of the terms "electronic data used interchangeably with "electronic data message."
message" and "electronic document" was the result of the Senate
of the Philippines' adoption, in Senate Bill 1902, of the phrase Given these definitions, we go back to the original question: Is an
"electronic data message" and the House of Representative's original printout of a facsimile transmission an electronic data
employment, in House Bill 9971, of the term "electronic message or electronic document?
document."72 In order to expedite the reconciliation of the two
versions, the technical working group of the Bicameral

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CASES ON EVIDENCE

The definitions under the Electronic Commerce Act of 2000, its or telecopy," and replaced the term "data message" (as found in
IRR and the Rules on Electronic Evidence, at first glance, convey the UNCITRAL Model Law ) with "electronic data message." This
the impression that facsimile transmissions are electronic data legislative divergence from what is assumed as the term's
messages or electronic documents because they are sent by "international origin" has bred uncertainty and now impels the
electronic means. The expanded definition of an "electronic data Court to make an inquiry into the true intent of the framers of the
message" under the IRR, consistent with the UNCITRAL Model law. Indeed, in the construction or interpretation of a legislative
Law, further supports this theory considering that the measure, the primary rule is to search for and determine the
enumeration "xxx [is] not limited to, electronic data interchange intent and spirit of the law.77 A construction should be rejected
(EDI), electronic mail, telegram, telex or telecopy." And to telecopy that gives to the language used in a statute a meaning that does
is to send a document from one place to another via a fax not accomplish the purpose for which the statute was enacted,
machine.75 and that tends to defeat the ends which are sought to be attained
by the enactment.78
As further guide for the Court in its task of statutory
construction, Section 37 of the Electronic Commerce Act of 2000 Interestingly, when Senator Ramon B. Magsaysay, Jr., the
provides that principal author of Senate Bill 1902 (the predecessor of R.A. No.
8792), sponsored the bill on second reading, he proposed to adopt
Unless otherwise expressly provided for, the interpretation of this the term "data message" as formulated and defined in the
Act shall give due regard to its international origin and the need UNCITRAL Model Law.79 During the period of amendments,
to promote uniformity in its application and the observance of however, the term evolved into "electronic data message," and the
good faith in international trade relations. The generally accepted phrase "but not limited to, electronic data interchange (EDI),
principles of international law and convention on electronic electronic mail, telegram, telex or telecopy" in the UNCITRAL
commerce shall likewise be considered. Model Law was deleted. Furthermore, the term "electronic data
message," though maintaining its description under the
Obviously, the "international origin" mentioned in this section can UNCITRAL Model Law, except for the aforesaid deleted phrase,
only refer to the UNCITRAL Model Law, and the UNCITRAL's conveyed a different meaning, as revealed in the following
definition of "data message": proceedings:

"Data message" means information generated, sent, received or xxxx

stored by electronic, optical or similar means including, but not
limited to, electronic data interchange (EDI), electronic mail, Senator Santiago. Yes, Mr. President. I will furnish a copy
telegram, telex or telecopy.76 together with the explanation of this proposed amendment.

is substantially the same as the IRR's characterization of an And then finally, before I leave the Floor, may I please be allowed
"electronic data message." to go back to Section 5; the Definition of Terms. In light of the
acceptance by the good Senator of my proposed amendments, it
However, Congress deleted the phrase, "but not limited to, will then become necessary to add certain terms in our list of
electronic data interchange (EDI), electronic mail, telegram, telex terms to be defined. I would like to add a definition on what is

154
CASES ON EVIDENCE

"data," what is "electronic record" and what is an "electronic Senator Santiago. Thank you. The next term is "ELECTRONIC
record system." RECORD." The proposed amendment is as follows:

If the gentleman will give me permission, I will proceed with the "ELECTRONIC RECORD" MEANS DATA THAT IS RECORDED OR
proposed amendment on Definition of Terms, Section 5. STORED ON ANY MEDIUM IN OR BY A COMPUTER SYSTEM OR
OTHER SIMILAR DEVICE, THAT CAN BE READ OR PERCEIVED
Senator Magsaysay. Please go ahead, Senator Santiago. BY A PERSON OR A COMPUTER SYSTEM OR OTHER SIMILAR
DEVICE. IT INCLUDES A DISPLAY, PRINTOUT OR OTHER
Senator Santiago. We are in Part 1, short title on the Declaration OUTPUT OF THAT DATA.
of Policy, Section 5, Definition of Terms.
The explanation for this term and its definition is as follows: The
At the appropriate places in the listing of these terms that have to term "ELECTRONIC RECORD" fixes the scope of our bill. The
be defined since these are arranged alphabetically, Mr. President, record is the data. The record may be on any medium. It is
I would like to insert the term DATA and its definition. So, the electronic because it is recorded or stored in or by a computer
amendment will read: "DATA" MEANS REPRESENTATION, IN ANY system or a similar device.
FORM, OF INFORMATION OR CONCEPTS.
The amendment is intended to apply, for example, to data on
The explanation is this: This definition of "data" or "data" as it is magnetic strips on cards or in Smart cards. As drafted, it would
now fashionably pronounced in America - - the definition of "data" not apply to telexes or faxes, except computer-generated faxes,
ensures that our bill applies to any form of information in an unlike the United Nations model law on electronic commerce. It
electronic record, whether these are figures, facts or ideas. would also not apply to regular digital telephone conversations
since the information is not recorded. It would apply to voice mail
So again, the proposed amendment is this: "DATA" MEANS since the information has been recorded in or by a device similar
REPRESENTATIONS, IN ANY FORM, OF INFORMATION OR to a computer. Likewise, video records are not covered. Though
CONCEPTS. when the video is transferred to a website, it would be covered
because of the involvement of the computer. Music recorded by a
Senator Magsaysay. May I know how will this affect the definition computer system on a compact disc would be covered.
of "Data Message" which encompasses electronic records,
electronic writings and electronic documents? In short, not all data recorded or stored in digital form is covered.
A computer or a similar device has to be involved in its creation or
Senator Santiago. These are completely congruent with each storage. The term "similar device" does not extend to all devices
other. These are compatible. When we define "data," we are that create or store data in digital form. Although things that are
simply reinforcing the definition of what is a data message. not recorded or preserved by or in a computer system are omitted
from this bill, these may well be admissible under other rules of
Senator Magsaysay. It is accepted, Mr. President. law. This provision focuses on replacing the search for originality
proving the reliability of systems instead of that of individual
records and using standards to show systems reliability.

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CASES ON EVIDENCE

amendment to the distinguished sponsor and then he can feel

Paper records that are produced directly by a computer system free to take it up in any session without any further intervention.
such as printouts are themselves electronic records being just the
means of intelligible display of the contents of the record. Senator Magsaysay. Before we end, Mr. President, I understand
Photocopies of the printout would be paper record subject to the from the proponent of these amendments that these are based on
usual rules about copies, but the original printout would be the Canadian E-commerce Law of 1998. Is that not right?
subject to the rules of admissibility of this bill.
Senator Santiago. That is correct.80
However, printouts that are used only as paper records and
whose computer origin is never again called on are treated as Thus, when the Senate consequently voted to adopt the term
paper records. In that case, the reliability of the computer system "electronic data message," it was consonant with the explanation
that produces the record is irrelevant to its reliability. of Senator Miriam Defensor-Santiago that it would not apply "to
telexes or faxes, except computer-generated faxes, unlike the
Senator Magsaysay. Mr. President, if my memory does not fail me, United Nations model law on electronic commerce." In explaining
earlier, the lady Senator accepted that we use the term "Data the term "electronic record" patterned after the E-Commerce Law
Message" rather than "ELECTRONIC RECORD" in being of Canada, Senator Defensor-Santiago had in mind the term
consistent with the UNCITRAL term of "Data Message." So with "electronic data message." This term then, while maintaining part
the new amendment of defining "ELECTRONIC RECORD," will of the UNCITRAL Model Law's terminology of "data message," has
this affect her accepting of the use of "Data Message" instead of assumed a different context, this time, consonant with the term
"ELECTRONIC RECORD"? "electronic record" in the law of Canada. It accounts for the
addition of the word "electronic" and the deletion of the phrase
Senator Santiago. No, it will not. Thank you for reminding me. "but not limited to, electronic data interchange (EDI), electronic
The term I would like to insert is ELECTRONIC DATA MESSAGE mail, telegram, telex or telecopy." Noteworthy is that the Uniform
in lieu of "ELECTRONIC RECORD." Law Conference of Canada, explains the term "electronic record,"
as drafted in the Uniform Electronic Evidence Act, in a manner
Senator Magsaysay. Then we are, in effect, amending the term of strikingly similar to Sen. Santiago's explanation during the
the definition of "Data Message" on page 2A, line 31, to which we Senate deliberations:
have no objection.
"Electronic record" fixes the scope of the Act. The record is the
Senator Santiago. Thank you, Mr. President. data. The record may be any medium. It is "electronic" because it
is recorded or stored in or by a computer system or similar device.
xxxx The Act is intended to apply, for example, to data on magnetic
strips on cards, or in smart cards. As drafted, it would not apply
Senator Santiago. Mr. President, I have proposed all the to telexes or faxes (except computer-generated faxes), unlike the
amendments that I desire to, including the amendment on the United Nations Model Law on Electronic Commerce. It would also
effect of error or change. I will provide the language of the not apply to regular digital telephone conversations, since the
amendment together with the explanation supporting that information is not recorded. It would apply to voice mail, since the

156
CASES ON EVIDENCE

information has been recorded in or by a device similar to a fact, the deliberations of the Legislature are replete with
computer. Likewise video records are not covered, though when discussions on paperless and digital transactions.
the video is transferred to a Web site it would be, because of the
involvement of the computer. Music recorded by a computer Facsimile transmissions are not, in this sense, "paperless," but
system on a compact disk would be covered. verily are paper-based.

In short, not all data recorded or stored in "digital" form is A facsimile machine, which was first patented in 1843 by
covered. A computer or similar device has to be involved in its Alexander Bain,83 is a device that can send or receive pictures
creation or storage. The term "similar device" does not extend to and text over a telephone line. It works by digitizing an image—
all devices that create or store data in digital form. Although dividing it into a grid of dots. Each dot is either on or off,
things that are not recorded or preserved by or in a computer depending on whether it is black or white. Electronically, each dot
system are omitted from this Act, they may well be admissible is represented by a bit that has a value of either 0 (off) or 1 (on).
under other rules of law. This Act focuses on replacing the search In this way, the fax machine translates a picture into a series of
for originality, proving the reliability of systems instead of that of zeros and ones (called a bit map) that can be transmitted like
individual records, and using standards to show systems normal computer data. On the receiving side, a fax machine reads
reliability. the incoming data, translates the zeros and ones back into dots,
and reprints the picture.84 A fax machine is essentially an image
Paper records that are produced directly by a computer system, scanner, a modem and a computer printer combined into a highly
such as printouts, are themselves electronic records, being just specialized package. The scanner converts the content of a
the means of intelligible display of the contents of the record. physical document into a digital image, the modem sends the
Photocopies of the printout would be paper records subject to the image data over a phone line, and the printer at the other end
usual rules about copies, but the "original" printout would be makes a duplicate of the original document.85 Thus, in Garvida
subject to the rules of admissibility of this Act. v. Sales, Jr.,86 where we explained the unacceptability of filing
pleadings through fax machines, we ruled that:
However, printouts that are used only as paper records, and
whose computer origin is never again called on, are treated as A facsimile or fax transmission is a process involving the
paper records. See subsection 4(2). In this case the reliability of transmission and reproduction of printed and graphic matter by
the computer system that produced the record is relevant to its scanning an original copy, one elemental area at a time, and
reliability.81 representing the shade or tone of each area by a specified amount
of electric current. The current is transmitted as a signal over
There is no question then that when Congress formulated the regular telephone lines or via microwave relay and is used by the
term "electronic data message," it intended the same meaning as receiver to reproduce an image of the elemental area in the proper
the term "electronic record" in the Canada law. This construction position and the correct shade. The receiver is equipped with a
of the term "electronic data message," which excludes telexes or stylus or other device that produces a printed record on paper
faxes, except computer-generated faxes, is in harmony with the referred to as a facsimile.
Electronic Commerce Law's focus on "paperless" communications
and the "functional equivalent approach"82 that it espouses. In

157
CASES ON EVIDENCE

x x x A facsimile is not a genuine and authentic pleading. It is, at agencies. After all, the power of administrative officials to
best, an exact copy preserving all the marks of an original. promulgate rules in the implementation of a statute is necessarily
Without the original, there is no way of determining on its face limited to what is found in the legislative enactment itself. The
whether the facsimile pleading is genuine and authentic and was implementing rules and regulations of a law cannot extend the
originally signed by the party and his counsel. It may, in fact, be law or expand its coverage, as the power to amend or repeal a
a sham pleading.87 statute is vested in the Legislature.91 Thus, if a discrepancy
occurs between the basic law and an implementing rule or
Accordingly, in an ordinary facsimile transmission, there exists regulation, it is the former that prevails, because the law cannot
an original paper-based information or data that is scanned, sent be broadened by a mere administrative issuance—an
through a phone line, and re-printed at the receiving end. Be it administrative agency certainly cannot amend an act of
noted that in enacting the Electronic Commerce Act of 2000, Congress.92 Had the Legislature really wanted ordinary fax
Congress intended virtual or paperless writings to be the transmissions to be covered by the mantle of the Electronic
functional equivalent and to have the same legal function as Commerce Act of 2000, it could have easily lifted without a bit of
paper-based documents.88 Further, in a virtual or paperless tatter the entire wordings of the UNCITRAL Model Law.
environment, technically, there is no original copy to speak of, as
all direct printouts of the virtual reality are the same, in all Incidentally, the National Statistical Coordination Board Task
respects, and are considered as originals.89 Ineluctably, the law's Force on the Measurement of E-Commerce,93 on November 22,
definition of "electronic data message," which, as aforesaid, is 2006, recommended a working definition of "electronic
interchangeable with "electronic document," could not have commerce," as "[a]ny commercial transaction conducted through
included facsimile transmissions, which have an original paper- electronic, optical and similar medium, mode, instrumentality
based copy as sent and a paper-based facsimile copy as received. and technology. The transaction includes the sale or purchase of
These two copies are distinct from each other, and have different goods and services, between individuals, households, businesses
legal effects. While Congress anticipated future developments in and governments conducted over computer-mediated networks
communications and computer technology90 when it drafted the through the Internet, mobile phones, electronic data interchange
law, it excluded the early forms of technology, like telegraph, telex (EDI) and other channels through open and closed networks." The
and telecopy (except computer-generated faxes, which is a newer Task Force's proposed definition is similar to the Organization of
development as compared to the ordinary fax machine to fax Economic Cooperation and Development's (OECD's) broad
machine transmission), when it defined the term "electronic data definition as it covers transactions made over any network, and,
message." in addition, it adopted the following provisions of the OECD
definition: (1) for transactions, it covers sale or purchase of goods
Clearly then, the IRR went beyond the parameters of the law and services; (2) for channel/network, it considers any computer-
when it adopted verbatim the UNCITRAL Model Law's definition of mediated network and NOT limited to Internet alone; (3) it
"data message," without considering the intention of Congress excludes transactions received/placed using fax, telephone or
when the latter deleted the phrase "but not limited to, electronic non-interactive mail; (4) it considers payments done online or
data interchange (EDI), electronic mail, telegram, telex or offline; and (5) it considers delivery made online (like downloading
telecopy." The inclusion of this phrase in the IRR offends a basic of purchased books, music or software programs) or offline
tenet in the exercise of the rule-making power of administrative (deliveries of goods).94

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CASES ON EVIDENCE

In general, contracts are perfected by mere consent,97 which is

We, therefore, conclude that the terms "electronic data message" manifested by the meeting of the offer and the acceptance upon
and "electronic document," as defined under the Electronic the thing and the cause which are to constitute the contract. The
Commerce Act of 2000, do not include a facsimile transmission. offer must be certain and the acceptance absolute.98 They are,
Accordingly, a facsimile transmission cannot be considered as moreover, obligatory in whatever form they may have been
electronic evidence. It is not the functional equivalent of an entered into, provided all the essential requisites for their validity
original under the Best Evidence Rule and is not admissible as are present.99 Sale, being a consensual contract, follows the
electronic evidence. general rule that it is perfected at the moment there is a meeting
of the minds upon the thing which is the object of the contract
Since a facsimile transmission is not an "electronic data message" and upon the price. From that moment, the parties may
or an "electronic document," and cannot be considered as reciprocally demand performance, subject to the provisions of the
electronic evidence by the Court, with greater reason is a law governing the form of contracts.100
photocopy of such a fax transmission not electronic evidence. In
the present case, therefore, Pro Forma Invoice Nos. ST2- The essential elements of a contract of sale are (1) consent or
POSTS0401-1 and ST2-POSTS0401-2 (Exhibits "E" and "F"), meeting of the minds, that is, to transfer ownership in exchange
which are mere photocopies of the original fax transmittals, are for the price, (2) object certain which is the subject matter of the
not electronic evidence, contrary to the position of both the trial contract, and (3) cause of the obligation which is established.101
and the appellate courts.
In this case, to establish the existence of a perfected contract of
- III - sale between the parties, respondent Ssangyong formally offered
in evidence the testimonies of its witnesses and the following
Nevertheless, despite the pro forma invoices not being electronic exhibits:
evidence, this Court finds that respondent has proven by
preponderance of evidence the existence of a perfected contract of Exhibit
sale.
Description
In an action for damages due to a breach of a contract, it is
essential that the claimant proves (1) the existence of a perfected Purpose
contract, (2) the breach thereof by the other contracting party and
(3) the damages which he/she sustained due to such breach. E
Actori incumbit onus probandi. The burden of proof rests on the
party who advances a proposition affirmatively.95 In other words, Pro forma Invoice dated 17 April 2000 with Contract No. ST2-
a plaintiff in a civil action must establish his case by a POSTS0401-1, photocopy
preponderance of evidence, that is, evidence that has greater
weight, or is more convincing than that which is offered in To show that defendants contracted with plaintiff for the delivery
opposition to it.96 of 110 MT of stainless steel from Korea payable by way of an

159
CASES ON EVIDENCE

irrevocable letter of credit in favor of plaintiff, among other

conditions. G

E-1 Letter to defendant SANYO SEIKE dated 20 June 2000, contained

in facsimile/thermal paper
Pro forma Invoice dated 17 April 2000 with Contract No. ST2-
POSTS0401, contained in facsimile/thermal paper faxed by To prove that defendants were informed of the date of L/C
defendants to plaintiff showing the printed transmission details opening and defendant's conforme/approval thereof.
on the upper portion of said paper as coming from defendant
MCC on 26 Apr 00 08:41AM G-1

To show that defendants sent their confirmation of the (i) delivery Signature of defendant Gregory Chan, contained in
to it of the specified stainless steel products, (ii) defendants' facsimile/thermal paper.
payment thereof by way of an irrevocable letter of credit in favor
of plaintiff, among other conditions. H

E-2 Letter to defendants dated 22 June 2000, original

Conforme signature of Mr. Gregory Chan, contained in To prove that defendants were informed of the successful price
facsimile/thermal paper faxed by defendants to plaintiff showing adjustments secured by plaintiff in favor of former and were
the printed transmission details on the upper portion of said advised of the schedules of its L/C opening.
paper as coming from defendant MCC on 26 Apr 00 08:41AM
I
To show that defendants sent their confirmation of the (i) delivery
to it of the total of 220MT specified stainless steel products, (ii) Letter to defendants dated 26 June 2000, original
defendants' payment thereof by way of an irrevocable letter of
credit in favor of plaintiff, among other conditions. To prove that plaintiff repeatedly requested defendants for the
agreed opening of the Letters of Credit, defendants' failure and
F refusal to comply with their obligations and the problems of
plaintiff is incurring by reason of defendants' failure and refusal
Pro forma Invoice dated 17 April 2000 with Contract No. ST2- to open the L/Cs.
POSTSO401-2, photocopy
J
To show that defendants contracted with plaintiff for delivery of
another 110 MT of stainless steel from Korea payable by way of Letter to defendants dated 26 June 2000, original
an irrevocable letter of credit in favor of plaintiff, among other
conditions. K

160
CASES ON EVIDENCE

Letter to defendants dated 30 June 2000, photocopy

Letter to defendants dated 27 June 2000, original
To prove that plaintiff reiterated its request for defendants to L/C
L opening after the latter's request for extension of time was
granted, defendants' failure and refusal to comply therewith
Facsimile message to defendants dated 28 June 2000, photocopy extension of time notwithstanding.

M P

Letter from defendants dated 29 June 2000, contained in Letter to defendants dated 06 July 2000, original
facsimile/thermal paper faxed by defendants to plaintiff showing
the printed transmission details on the upper portion of said
paper as coming from defendant MCC on 29 June 00 11:12 AM
Q
To prove that defendants admit of their liabilities to plaintiff, that
they requested for "more extension" of time for the opening of the Demand letter to defendants dated 15 Aug 2000, original
Letter of Credit, and begging for favorable understanding and
consideration. To prove that plaintiff was constrained to engaged services of a
lawyer for collection efforts.
M-1
R
Signature of defendant Gregory Chan, contained in
facsimile/thermal paper faxed by defendants to plaintiff showing Demand letter to defendants dated 23 Aug 2000, original
the printed transmission details on the upper portion of said
paper as coming from defendant MCC on June 00 11:12 AM To prove that defendants opened the first L/C in favor of plaintiff,
requested for further postponement of the final L/C and for
minimal amounts, were urged to open the final L/C on time, and
were informed that failure to comply will cancel the contract.
N
S
Letter to defendants dated 29 June 2000, original
Demand letter to defendants dated 11 Sept 2000, original

To show defendants' refusal and failure to open the final L/C on

O time, the cancellation of the contract as a consequence thereof,
and final demand upon defendants to remit its obligations.

161
CASES ON EVIDENCE

W Notation "1/2", photocopy

Letter from plaintiff SSANGYONG to defendant SANYO SEIKI To prove that the present Pro forma Invoice was the first of 2 pro
dated 13 April 2000, with fax back from defendants SANYO forma invoices.
SEIKI/MCC to plaintiff SSANGYONG, contained in
facsimile/thermal paper with back-up photocopy X-2

To prove that there was a perfected sale and purchase agreement Ref. No. ST2-POSTS080-1, photocopy
between the parties for 220 metric tons of steel products at the
price of US$1,860/ton. To prove that the present Pro forma Invoice was the first of 2 pro
forma invoices.
W-1
X-3
Conforme signature of defendant Gregory Chan, contained in
facsimile/thermal paper with back-up photocopy Conforme signature of defendant Gregory Chan, photocopy

To prove that defendants, acting through Gregory Chan, agreed to To prove that defendant MCC, acting through Gregory Chan,
the sale and purchase of 220 metric tons of steel products at the agreed to the sale and purchase of the balance of 100 metric tons
price of US$1,860/ton. at the discounted price of US$1,700/ton, apart from the other
order and shipment of 100 metric tons which was delivered by
W-2 plaintiff SSANGYONG and paid for by defendant MCC.

Name of sender MCC Industrial Sales Corporation DD

To prove that defendants sent their conformity to the sale and Letter from defendant MCC to plaintiff SSANGYONG dated 22
purchase agreement by facsimile transmission. August 2000, contained in facsimile/thermal paper with back-up
photocopy
X
To prove that there was a perfected sale and purchase agreement
Pro forma Invoice dated 16 August 2000, photocopy between plaintiff SSANGYONG and defendant MCC for the
balance of 100 metric tons, apart from the other order and
To prove that defendant MCC agreed to adjust and split the shipment of 100 metric tons which was delivered by plaintiff
confirmed purchase order into 2 shipments at 100 metric tons SSANGYONG and paid for by defendant MCC.
each at the discounted price of US$1,700/ton.
DD-1
X-1

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CASES ON EVIDENCE

Ref. No. ST2-POSTS080-1, contained in facsimile/thermal paper Because these documents are mere photocopies, they are simply
with back-up photocopy secondary evidence, admissible only upon compliance with Rule
130, Section 5, which states, "[w]hen the original document has
To prove that there was a perfected sale and purchase agreement been lost or destroyed, or cannot be produced in court, the
between plaintiff SSANGYONG and defendant MCC for the offeror, upon proof of its execution or existence and the cause of
balance of 100 metric tons, apart from the other order and its unavailability without bad faith on his part, may prove its
shipment of 100 metric tons which was delivered by plaintiff contents by a copy, or by a recital of its contents in some
SSANGYONG and paid for by defendant MCC. authentic document, or by the testimony of witnesses in the order
stated." Furthermore, the offeror of secondary evidence must
DD-2 prove the predicates thereof, namely: (a) the loss or destruction of
the original without bad faith on the part of the proponent/offeror
Signature of defendant Gregory Chan, contained in which can be shown by circumstantial evidence of routine
facsimile/thermal paper with back-up photocopy practices of destruction of documents; (b) the proponent must
prove by a fair preponderance of evidence as to raise a reasonable
To prove that defendant MCC, acting through Gregory Chan, inference of the loss or destruction of the original copy; and (c) it
agreed to the sale and purchase of the balance of 100 metric tons, must be shown that a diligent and bona fide but unsuccessful
apart from the other order and shipment of 100 metric tons which search has been made for the document in the proper place or
was delivered by plaintiff Ssangyong and paid for by defendant places. It has been held that where the missing document is the
MCC.102 foundation of the action, more strictness in proof is required than
where the document is only collaterally involved.103
Significantly, among these documentary evidence presented by
respondent, MCC, in its petition before this Court, assails the Given these norms, we find that respondent failed to prove the
admissibility only of Pro Forma Invoice Nos. ST2-POSTS0401-1 existence of the original fax transmissions of Exhibits E and F,
and ST2-POSTS0401-2 (Exhibits "E" and "F"). After sifting and likewise did not sufficiently prove the loss or destruction of
through the records, the Court found that these invoices are mere the originals. Thus, Exhibits E and F cannot be admitted in
photocopies of their original fax transmittals. Ssangyong avers evidence and accorded probative weight.
that these documents were prepared after MCC asked for the
splitting of the original order into two, so that the latter can apply It is observed, however, that respondent Ssangyong did not rely
for an L/C with greater facility. It, however, failed to explain why merely on Exhibits E and F to prove the perfected contract. It also
the originals of these documents were not presented. introduced in evidence a variety of other documents, as
enumerated above, together with the testimonies of its witnesses.
To determine whether these documents are admissible in Notable among them are Pro Forma Invoice Nos. ST2-POSTS080-
evidence, we apply the ordinary Rules on Evidence, for as 1 and ST2-POSTS080-2 which were issued by Ssangyong and
discussed above we cannot apply the Electronic Commerce Act of sent via fax to MCC. As already mentioned, these invoices slightly
2000 and the Rules on Electronic Evidence. varied the terms of the earlier invoices such that the quantity was
now officially 100MT per invoice and the price reduced to
US$1,700.00 per MT. The copies of the said August 16, 2000

163
CASES ON EVIDENCE

invoices submitted to the court bear the conformity signature of both Pro Forma Invoices bear the same date and details, which
MCC Manager Chan. logically mean that they both apply to one and the same
transaction.106
Pro Forma Invoice No. ST2-POSTS080-1 (Exhibit "X"), however, is
a mere photocopy of its original. But then again, petitioner MCC Indeed, why would petitioner open an L/C for the second half of
does not assail the admissibility of this document in the instant the transaction if there was no first half to speak of?
petition. Verily, evidence not objected to is deemed admitted and
may be validly considered by the court in arriving at its The logical chain of events, as gleaned from the evidence of both
judgment.104 Issues not raised on appeal are deemed parties, started with the petitioner and the respondent agreeing
abandoned. on the sale and purchase of 220MT of stainless steel at
US$1,860.00 per MT. This initial contract was perfected. Later, as
As to Pro Forma Invoice No. ST2-POSTS080-2 (Exhibits "1-A" and petitioner asked for several extensions to pay, adjustments in the
"2-C"), which was certified by PCIBank as a true copy of its delivery dates, and discounts in the price as originally agreed, the
original,105 it was, in fact, petitioner MCC which introduced this parties slightly varied the terms of their contract, without
document in evidence. Petitioner MCC paid for the order stated in necessarily novating it, to the effect that the original order was
this invoice. Its admissibility, therefore, is not open to question. reduced to 200MT, split into two deliveries, and the price
discounted to US$1,700 per MT. Petitioner, however, paid only
These invoices (ST2-POSTS0401, ST2-POSTS080-1 and ST2- half of its obligation and failed to open an L/C for the other
POSTS080-2), along with the other unchallenged documentary 100MT. Notably, the conduct of both parties sufficiently
evidence of respondent Ssangyong, preponderate in favor of the established the existence of a contract of sale, even if the writings
claim that a contract of sale was perfected by the parties. of the parties, because of their contested admissibility, were not
as explicit in establishing a contract.107 Appropriate conduct by
This Court also finds merit in the following observations of the the parties may be sufficient to establish an agreement, and while
trial court: there may be instances where the exchange of correspondence
does not disclose the exact point at which the deal was closed, the
Defendants presented Letter of Credit (Exhibits "1", "1-A" to "1-R") actions of the parties may indicate that a binding obligation has
referring to Pro Forma Invoice for Contract No. ST2POSTS080-2, been undertaken.108
in the amount of US$170,000.00, and which bears the signature
of Gregory Chan, General Manager of MCC. Plaintiff, on the other With our finding that there is a valid contract, it is crystal-clear
hand, presented Pro Forma Invoice referring to Contract No. ST2- that when petitioner did not open the L/C for the first half of the
POSTS080-1, in the amount of US$170,000.00, which likewise transaction (100MT), despite numerous demands from
bears the signature of Gregory Chan, MCC. Plaintiff accounted for respondent Ssangyong, petitioner breached its contractual
the notation "1/2" on the right upper portion of the Invoice, that obligation. It is a well-entrenched rule that the failure of a buyer
is, that it was the first of two (2) pro forma invoices covering the to furnish an agreed letter of credit is a breach of the contract
subject contract between plaintiff and the defendants. between buyer and seller. Indeed, where the buyer fails to open a
Defendants, on the other hand, failed to account for the notation letter of credit as stipulated, the seller or exporter is entitled to
"2/2" in its Pro Forma Invoice (Exhibit "1-A"). Observably further, claim damages for such breach. Damages for failure to open a

164
CASES ON EVIDENCE

commercial credit may, in appropriate cases, include the loss of March 30, 2001; (2) Exhibit "U-1," the details of the said
profit which the seller would reasonably have made had the Statement of Account); (3) Exhibit "V," the contract of the alleged
transaction been carried out.109 resale of the goods to a Korean corporation; and (4) Exhibit "V-1,"
the authentication of the resale contract from the Korean
- IV - Embassy and certification from the Philippine Consular Office.

This Court, however, finds that the award of actual damages is The statement of account and the details of the losses sustained
not in accord with the evidence on record. It is axiomatic that by respondent due to the said breach are, at best, self-serving. It
actual or compensatory damages cannot be presumed, but must was respondent Ssangyong itself which prepared the said
be proven with a reasonable degree of certainty.110 In Villafuerte documents. The items therein are not even substantiated by
v. Court of Appeals,111 we explained that: official receipts. In the absence of corroborative evidence, the said
statement of account is not sufficient basis to award actual
Actual or compensatory damages are those awarded in order to damages. The court cannot simply rely on speculation, conjecture
compensate a party for an injury or loss he suffered. They arise or guesswork as to the fact and amount of damages, but must
out of a sense of natural justice and are aimed at repairing the depend on competent proof that the claimant had suffered, and
wrong done. Except as provided by law or by stipulation, a party on evidence of, the actual amount thereof.113
is entitled to an adequate compensation only for such pecuniary
loss as he has duly proven. It is hornbook doctrine that to be able Furthermore, the sales contract and its authentication
to recover actual damages, the claimant bears the onus of certificates, Exhibits "V" and "V-1," allegedly evidencing the resale
presenting before the court actual proof of the damages alleged to at a loss of the stainless steel subject of the parties' breached
have been suffered, thus: contract, fail to convince this Court of the veracity of its contents.
The steel items indicated in the sales contract114 with a Korean
A party is entitled to an adequate compensation for such corporation are different in all respects from the items ordered by
pecuniary loss actually suffered by him as he has duly proved. petitioner MCC, even in size and quantity. We observed the
Such damages, to be recoverable, must not only be capable of following discrepancies:
proof, but must actually be proved with a reasonable degree of
certainty. We have emphasized that these damages cannot be List of commodities as stated in Exhibit "V":
presumed and courts, in making an award must point out
specific facts which could afford a basis for measuring whatever COMMODITY: Stainless Steel HR Sheet in Coil, Slit Edge
compensatory or actual damages are borne.112 SPEC: SUS304 NO. 1

In the instant case, the trial court awarded to respondent SIZE/Q'TY:

Ssangyong US$93,493.87 as actual damages. On appeal, the
same was affirmed by the appellate court. Noticeably, however, 2.8MM X 1,219MM X C
the trial and the appellate courts, in making the said award,
relied on the following documents submitted in evidence by the 8.193MT
respondent: (1) Exhibit "U," the Statement of Account dated

165
CASES ON EVIDENCE

3.0MM X 1,219MM X C
7.878MT
7.736MT
6.0MM X 1,219MM X C
3.0MM X 1,219MM X C
8.397MT
7.885MT
TOTAL:
3.0MM X 1,219MM X C
95.562MT115
8.629MT
List of commodities as stated in Exhibit "X" (the invoice that was
4.0MM X 1,219MM X C not paid):

7.307MT DESCRIPTION: Hot Rolled Stainless Steel Coil SUS 304

4.0MM X 1,219MM X C SIZE AND QUANTITY:

7.247MT 2.6 MM X 4' X C

4.5MM X 1,219MM X C 10.0MT

8.450MT 3.0 MM X 4' X C

4.5MM X 1,219MM X C 25.0MT

8.870MT 4.0 MM X 4' X C

5.0MM X 1,219MM X C 15.0MT

8.391MT 4.5 MM X 4' X C

6.0MM X 1,219MM X C 15.0MT

6.589MT 5.0 MM X 4' X C

6.0MM X 1,219MM X C 10.0MT

166
CASES ON EVIDENCE

compelled respondent Ssangyong to litigate and to incur expenses

6.0 MM X 4' X C to protect its rights.

25.0MT WHEREFORE, PREMISES CONSIDERED, the appeal is

PARTIALLY GRANTED. The Decision of the Court of Appeals in
TOTAL: CA-G.R. CV No. 82983 is MODIFIED in that the award of actual
damages is DELETED. However, petitioner is ORDERED to pay
100MT116 respondent NOMINAL DAMAGES in the amount of P200,000.00,
and the ATTORNEY'S FEES as awarded by the trial court.
From the foregoing, we find merit in the contention of MCC that
Ssangyong did not adequately prove that the items resold at a SO ORDERED.
loss were the same items ordered by the petitioner. Therefore, as
the claim for actual damages was not proven, the Court cannot
sanction the award.

Nonetheless, the Court finds that petitioner knowingly breached

its contractual obligation and obstinately refused to pay despite
repeated demands from respondent. Petitioner even asked for
several extensions of time for it to make good its obligation. But in
spite of respondent's continuous accommodation, petitioner
completely reneged on its contractual duty. For such inattention
and insensitivity, MCC must be held liable for nominal damages.
"Nominal damages are 'recoverable where a legal right is
technically violated and must be vindicated against an invasion
that has produced no actual present loss of any kind or where
there has been a breach of contract and no substantial injury or
actual damages whatsoever have been or can be shown.'"117
Accordingly, the Court awards nominal damages of P200,000.00
to respondent Ssangyong.

As to the award of attorney's fees, it is well settled that no

premium should be placed on the right to litigate and not every
winning party is entitled to an automatic grant of attorney's fees.
The party must show that he falls under one of the instances
enumerated in Article 2208 of the Civil Code.118 In the instant
case, however, the Court finds the award of attorney's fees proper,
considering that petitioner MCC's unjustified refusal to pay has

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CASES ON EVIDENCE

25. Garvida vs. Sales, Jr

Election Law; Commission on Elections; Jurisdiction over a

petition to cancel a certificate of candidacy lies with the
COMELEC sitting in Division, not en banc.—Under the same
Rules of Procedure, jurisdiction over a petition to cancel a
certificate of candidacy lies with the COMELEC sitting in Division,
not en banc. Cases before a Division may only be entertained by
the COMELEC en banc when the required number of votes to
reach a decision, resolution, order or ruling is not obtained in the
Division. Moreover, only motions to reconsider decisions,
resolutions, orders or rulings of the COMELEC in Division are
resolved by the COMELEC en banc. It is therefore the COMELEC
sitting in Division that can hear and decide election cases. x x x
In the instant case, the COMELEC en banc did not refer the case
to any of its Divisions upon receipt of the petition. It therefore
acted without jurisdiction or with grave abuse of discretion when
it entertained the petition and issued the order of May 2, 1996.

Same; Same; Actions; Pleadings and Practice;

Telecommunications; Fax Transmissions; Pleadings must be filed
directly with the proper Clerk of Court of the COMELEC
personally, or, by registered mail, not by facsimile transmission.—
Every pleading before the COMELEC must be printed,
mimeographed or typewritten in legal size bond paper and filed in
at least ten (10) legible copies. Pleadings must be filed directly
with the proper Clerk of Court of the personally, or, by registered
mail. In the instant case, the subject petition was not in proper
form. Only two (2) copies of the petition were filed with the
COMELEC. Also, the COMELEC en banc issued its Resolution on
the basis of the petition transmitted by facsimile, not by
registered mail.

Same; Same; Same; Same; Same; Same; Words and Phrases;

“Facsimile” or “Fax Transmissions,” Explained.—A facsimile or fax
transmission is a process involving the transmission and
reproduction of printed and graphic matter by scanning an

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CASES ON EVIDENCE

original copy, one elemental area at a time, and representing the Pambansa Blg. 337, then the Local Government Code, raised the
shade or tone of each area by a specified amount of electric maximum age of the Kabataang Barangay members from “less
current. The current is transmitted as a signal over regular than 18 years of age” to “not more than 21 years of age.”
telephone lines or via microwave relay and is used by the receiver
to reproduce an image of the elemental area in the proper position Same; Same; Same; Same; Same; Sangguniang Kabataan; Nature
and the correct shade. The receiver is equipped with a stylus or of the Sangguniang Kabataan.—The Local Government Code of
other device that produces a printed record on paper referred to 1991 changed the Kabataang Barangay into the Katipunan ng
as a facsimile. Kabataan. It, however, retained the age limit of the members laid
down in B.P. 337 at 15 but not more than 21 years old. The
Same; Same; Same; Same; Same; Same; Filing a pleading by affairs of the Katipunan ng Kabataan are administered by the
facsimile transmission is not sanctioned by the COMELEC Rules Sangguniang Kabataan (SK) composed of a chairman and seven
of Procedure, much less by the Rules of Court.—Filing a pleading (7) members who are elected by the Katipunan ng Kabataan. The
by facsimile transmission is not sanctioned by the COMELEC chairman automatically becomes ex-officio member of the
Rules of Procedure, much less by the Rules of Court. A facsimile Sangguniang Barangay. A member of the SK holds office for a
is not a genuine and authentic pleading. It is, at best, an exact term of three (3) years, unless sooner removed for cause, or
copy preserving all the marks of an original. Without the original, becomes permanently incapacitated, dies or resigns from office.
there is no way of determining on its face whether the facsimile
pleading is genuine and authentic and was originally signed by Same; Same; Same; Same; Same; Same; Statutory Construction;
the party and his counsel. It may, in fact, be a sham pleading. The Local Government Code provides for more qualifications for
The uncertainty of the authenticity of a facsimile pleading should an elective SK official than for a member of the Katipunan ng
have restrained the COMELEC en banc from acting on the Kabataan; The courts may distinguish when there are facts and
petition and issuing the questioned order. The COMELEC en banc circumstances showing that the legislature intended a distinction
should have waited until it received the petition filed by registered or qualification—dissimilum dissimilis est ratio.—A closer look at
mail. the Local Government Code will reveal a distinction between the
maximum age of a member in the Katipunan ng Kabataan and
Same; Youth; Local Government Code; Katipunan ng Kabataan; the maximum age of an elective SK official. Section 424 of the
Kabataang Barangay; Historical Background of the Katipunan ng Code sets a member’s maximum age at 21 years only. There is no
Kabataan.—The Katipunan ng Kabataan was originally created by further provision as to when the member shall have turned 21
Presidential Decree No. 684 in 1975 as the Kabataang Barangay, years of age. On the other hand, Section 428 provides that the
a barangay youth organization composed of all residents of the maximum age of an elective SK official is 21 years old “on the day
barangay who were at least 15 years but less than 18 years of of his election.” The addition of the phrase “on the day of his
age. The Kabataang Barangay sought to provide its members a election” is an additional qualification. The member may be more
medium to express their views and opinions and participate in than 21 years of age on election day or on the day he registers as
issues of transcendental importance. Its affairs were administered member of the Katipunan ng Kabataan. The elective official,
by a barangay youth chairman together with six barangay youth however, must not be more than 21 years old on the day of
leaders who were actual residents of the barangay and were at election. The distinction is understandable considering that the
least 15 years but less than 18 years of age. In 1983, Batas Code itself provides more qualifications for an elective SK official

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CASES ON EVIDENCE

than for a member of the Katipunan ng Kabataan. Dissimilum cycles. After this birthday, the 365-day cycle for his 22nd year
dissimilis est ratio. The courts may distinguish when there are begins. The day after the 365th day is the first day of the next
facts and circumstances showing that the legislature intended a 365-day cycle and he turns 22 years old on the 365th day.
distinction or qualification.
Same; Same; Same; Same; Same; Same; Statutory Construction;
Same; Same; Same; Same; Same; Same; Section 3(b) of Words and Phrases; The phrase “not more than 21 years of age”
COMELEC Resolution No. 2824 is ultra vires insofar as it sets the means not over 21 years, not beyond 21 years.—The phrase “not
age limit of a voter for the SK elections at exactly 21 years on the more than 21 years of age” means not over 21 years, not beyond
day of the election.—The qualification that a voter in the SK 21 years. It means 21 365-day cycles. It does not mean 21 years
elections must not be more than 21 years of age on the day of the and one or some days or a fraction of a year because that would
election is not provided in Section 424 of the Local Government be more than 21 365-day cycles. “Not more than 21 years old” is
Code of 1991. In fact the term “qualified voter” appears only in not equivalent to “less than 22 years old,” contrary to petitioner’s
COMELEC Resolution No. 2824. Since a “qualified voter” is not claims. The law does not state that the candidate be less than 22
necessarily an elective official, then it may be assumed that a years on election day.
“qualified voter” is a “member of the Katipunan ng Kabataan.”
Section 424 of the Code does not provide that the maximum age Same; Same; Same; Same; Same; Same; The general rule is that
of a member of the Katipunan ng Kabataan is determined on the an elective official of the Sangguniang Kabataan must not be
day of the election. Section 3 [b] of COMELEC Resolution No. more than 21 years of age on the day of his election.—The general
2824 is therefore ultra vires insofar as it sets the age limit of a rule is that an elective official of the Sangguniang Kabataan must
voter for the SK elections at exactly 21 years on the day of the not be more than 21 years of age on the day of his election. The
election. only exception is when the official reaches the age of 21 years
during his incumbency. Section 423 [b] of the Code allows him to
Same; Same; Same; Same; Same; Same; One born on the first day serve the remaining portion of the term for which he was elected.
of the year is deemed to be one year old on the 365th day after his According to Senator Pimentel, the youth leader must have “been
birth.—The provision that an elective official of the SK should not elected prior to his 21st birthday.” Conversely, the SK official
be more than 21 years of age on the day of his election is very must not have turned 21 years old before his election.
clear. The Local Government Code speaks of years, not months
nor days. When the law speaks of years, it is understood that Same; Same; Same; Same; Same; Same; Section 3 (b) in relation
years are of 365 days each. One born on the first day of the year to Section 6 (a) of COMELEC Resolution No. 2824 is not ultra
is consequently deemed to be one year old on the 365th day after vires insofar as it fixes the maximum age of an elective SK official
his birth—the last day of the year. In computing years, the first on the day of his election.—Reading Section 423 [b] together with
year is reached after completing the first 365 days. After the first Section 428 of the Code, the latest date at which an SK elective
365th day, the first day of the second 365-day cycle begins. On official turns 21 years old is on the day of his election. The
the 365th day of the second cycle, the person turns two years old. maximum age of a youth official must therefore be exactly 21
This cycle goes on and on in a lifetime. A person turns 21 years years on election day. Section 3 [b] in relation to Section 6 [a] of
old on the 365th day of his 21st 365-day cycle. This means on his COMELEC Resolution No. 2824 is not ultra vires insofar as it
21st birthday, he has completed the entire span of 21 365-day

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CASES ON EVIDENCE

fixes the maximum age of an elective SK official on the day of his being “legally qualified; capable of being legally chosen.”
election. Ineligibility, on the other hand, refers to the lack of the
qualifications prescribed in the Constitution or the statutes for
Same; Same; Same; Same; Same; Same; The requirement that a holding public office. Ineligibility is not one of the grounds
candidate possess the age qualification is founded on public enumerated in Section 435 for succession of the SK Chairman.
policy and if he lacks the age on the day of the election, he can be
declared ineligible. The fact that the candidate was elected will Same; Same; Same; Same; Same; Same; Same; “Failure to Qual-
not make the age requirement directory, nor will it validate his ify,” Defined.—“Failure to qualify” means a public officer’s or
election—the will of the people as expressed through the ballot employee’s failure to take the oath and/or give the bond required
cannot cure the vice of ineligibility.—The requirement that a by law to signify his acceptance of the office and the undertaking
candidate possess the age qualification is founded on public to execute the trust confided in him (Martin and Martin,
policy and if he lacks the age on the day of the election, he can be Administrative Law, Law of Public Officers and Election Law, p.
declared ineligible. In the same vein, if the candidate is over the 140 [1983]; Mechem, A Treatise on the Law of Public Offices and
maximum age limit on the day of the election, he is ineligible. The Officers, Sec. 253, p. 162; Words and Phrases, “Failure to
fact that the candidate was elected will not make the age Qualify,” citing State v. Boyd, 48 N.W. 739, 751, 31 Neb. 682).
requirement directory, nor will it validate his election. The will of
the people as expressed through the ballot cannot cure the vice of Same; Same; Same; Same; Same; Same; To avoid a hiatus in the
ineligibility. office of the SK Chairman where Section 435 of the Local
Government Code is inapplicable, the vacancy shall be filled by
Same; Same; Same; Same; Same; Same; A defeated candidate the SK member chosen by the incumbent SK members by simple
cannot be deemed elected to the office.—The ineligibility of majority from among themselves.—To avoid a hiatus in the office
petitioner does not entitle private respondent, the candidate who of SK Chairman, the Court deems it necessary to order that the
obtained the highest number of votes in the May 6, 1996 vacancy be filled by the SK member chosen by the incumbent SK
elections, to be declared elected. A defeated candidate cannot be members of Barangay San Lorenzo, Bangui, Ilocos Norte by
deemed elected to the office. Moreover, despite his claims, private simple majority from among themselves. The member chosen
respondent has failed to prove that the electorate themselves shall assume the office of SK Chairman for the unexpired portion
actually knew of petitioner’s ineligibility and that they maliciously of the term, and shall discharge the powers and duties, and enjoy
voted for her with the intention of misapplying their franchises the rights and privileges appurtenant to said office.
and throwing away their votes for the benefit of her rival
candidate. PUNO, J.:

Same; Same; Same; Same; Same; Same; Words and Phrases; Petitioner Lynette G. Garvida seeks to annul and set aside the
“Eligible” and “Ineligibility,” Explained; The question of age order dated May 2, 1996 of respondent Commission on Elections
qualification is a question of eligibility; Ineligibility is not one of (COMELEC) en banc suspending her proclamation as the duly
the grounds enumerated in Section 435 of the Local Government elected Chairman of the Sangguniang Kabataan of Barangay San
Code for succession of the SK Chairman.—The question of the age Lorenzo, Municipality of Bangui, Ilocos Norte.
qualification is a question of eligibility. Being “eligible” means

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CASES ON EVIDENCE

The facts are undisputed. The Sangguniang Kabataan (SK) rival candidate for Chairman of the Sangguniang Kabataan, filed
elections nationwide was scheduled to be held on May 6, 1996. with the COMELEC en banc a "Petition of Denial and/or
On March 16, 1996, petitioner applied for registration as member Cancellation of Certificate of Candidacy" against petitioner
and voter of the Katipunan ng Kabataan of Barangay San Garvida for falsely representing her age qualification in her
Lorenzo, Bangui, Ilocos Norte. The Board of Election Tellers, certificate of candidacy. The petition was sent by facsimile 8 and
however, denied her application on the ground that petitioner, registered mail on April 29, 1996 to the Commission on Elections
who was then twenty-one years and ten (10) months old, National Office, Manila.
exceeded the age limit for membership in the Katipunan ng
Kabataan as laid down in Section 3 [b] of COMELEC Resolution On May 2, 1996, the same day respondent Rios issued the
No. 2824. memorandum to petitioner, the COMELEC en banc issued an
order directing the Board of Election Tellers and Board of
On April 2, 1996, petitioner filed a "Petition for Inclusion as Canvassers of Barangay San Lorenzo to suspend the
Registered Kabataang Member and Voter" with the Municipal proclamation of petitioner in the event she won in the election.
Circuit Trial Court, Bangui-Pagudpud-Adams-Damalneg, Ilocos The order reads as follows:
Norte. In a decision dated April 18, 1996, the said court found
petitioner qualified and ordered her registration as member and Acting on the Fax "Petition for Denial And/Or Cancellation of
voter in the Katipunan ng Kabataan. 1 The Board of Election Certificate of Candidacy" by petitioner Florencio G. Sales, Jr.
Tellers appealed to the Regional Trial Court, Bangui, Ilocos Norte. against Lynette G. Garvida, received on April 29, 1996, the
2 The presiding judge of the Regional Trial Court, however, pertinent allegations of which reads:
inhibited himself from acting on the appeal due to his close
association with petitioner. 3 xxx xxx xxx

On April 23, 1996, petitioner filed her certificate of candidacy for 5. That the said respondent is disqualified to become a voter and
the position of Chairman, Sangguniang Kabataan, Barangay San a candidate for the SK for the reason that she will be more than
Lorenzo, Municipality of Bangui, Province of Ilocos Norte. In a twenty-one (21) years of age on May 6, 1996; that she was born
letter dated April 23, 1996, respondent Election Officer Dionisio on June 11, 1974 as can be gleaned from her birth certificate,
F. Rios, per advice of Provincial Election Supervisor Noli Pipo, 4 copy of which is hereto attached and marked as Annex "A";
disapproved petitioner's certificate of candidacy again due to her
age. 5 Petitioner, however, appealed to COMELEC Regional 6. That in filing her certificate of candidacy as candidate for SK of
Director Filemon A. Asperin who set aside the order of Bgy. San Lorenzo, Bangui, Ilocos Norte, she made material
respondents and allowed petitioner to run. 6 representation which is false and as such, she is disqualified; that
her certificate of candidacy should not be given due course and
On May 2, 1996, respondent Rios issued a memorandum to that said candidacy must be cancelled;
petitioner informing her of her ineligibility and giving her 24
hours to explain why her certificate of candidacy should not be xxx xxx xxx
disapproved. 7 Earlier and without the knowledge of the
COMELEC officials, private respondent Florencio G. Sales, Jr., a

172
CASES ON EVIDENCE

the Commission, it appearing that the petition is meritorious,

hereby DIRECTS the Board of Election Tellers/Board of Section 532 (a) of the Local Government Code of 1991 provides
Canvassers of Barangay San Lorenzo, Bangui, Ilocos Norte, to that the conduct of the SK elections is under the supervision of
suspend the proclamation of Lynette G. Garvida in the event she the COMELEC and shall be governed by the Omnibus Election
garners the highest number of votes for the position of Code. 14 The Omnibus Election Code, in Section 78, Article IX,
Sangguniang Kabataan [sic]. governs the procedure to deny due course to or cancel a
certificate of candidacy, viz:
Meantime, petitioner is hereby required to submit immediately
ten (10) copies of his petition and to pay the filing and legal Sec. 78. Petition to deny due course to or cancel a certificate of
research fees in the amount of P510.00. candidacy. — A verified petition seeking to deny due course or to
cancel a certificate of candidacy may be filed by any person
SO ORDERED. 9 exclusively on the ground that any material representation
contained therein as required under Section 74 hereof is false.
On May 6, 1996, election day, petitioner garnered 78 votes as The petition may be filed at any time not later than twenty-five
against private respondent's votes of 76. 10 In accordance with days from the time of filing of the certificate of candidacy and
the May 2, 1996 order of the COMELEC en banc, the Board of shall be decided, after due notice and hearing, not later than
Election Tellers did not proclaim petitioner as the winner. Hence, fifteen days before election.
the instant petition for certiorari was filed on May 27, 1996.
In relation thereto, Rule 23 of the COMELEC Rules of Procedure
On June 2, 1996, however, the Board of Election Tellers provides that a petition to deny due course to or cancel a
proclaimed petitioner the winner for the position of SK chairman, certificate of candidacy for an elective office may be filed with the
Barangay San Lorenzo, Bangui, Ilocos Norte. 11 The proclamation Law Department of the COMELEC on the ground that the
was "without prejudice to any further action by the Commission candidate has made a false material representation in his
on Elections or any other interested party." 12 On July 5, 1996, certificate. The petition may be heard and evidence received by
petitioner ran in the Pambayang Pederasyon ng mga Sangguniang any official designated by the COMELEC after which the case
Kabataan for the municipality of Bangui, Ilocos Norte. She won as shall be decided by the COMELEC itself. 15
Auditor and was proclaimed one of the elected officials of the
Pederasyon. 13 Under the same Rules of Procedure, jurisdiction over a petition to
cancel a certificate of candidacy lies with the COMELEC sitting in
Petitioner raises two (2) significant issues: the first concerns the Division, not en banc. Cases before a Division may only be
jurisdiction of the COMELEC en banc to act on the petition to entertained by the COMELEC en banc when the required number
deny or cancel her certificate of candidacy; the second, the of votes to reach a decision, resolution, order or ruling is not
cancellation of her certificate of candidacy on the ground that she obtained in the Division. Moreover, only motions to reconsider
has exceeded the age requirement to run as an elective official of decisions, resolutions, orders or rulings of the COMELEC in
the SK. Division are resolved by the COMELEC en banc. 16 It is therefore
the COMELEC sitting in Divisions that can hear and decide
I election cases. This is clear from Section 3 of the said Rules thus:

173
CASES ON EVIDENCE

xxx xxx xxx

Sec. 3. The Commission Sitting in Divisions. — The Commission
shall sit in two (2) Divisions to hear and decide protests or Every pleading before the COMELEC must be printed,
petitions in ordinary actions, special actions, special cases, mimeographed or typewritten in legal size bond paper and filed in
provisional remedies, contempt and special proceedings except in at least ten (10) legible copies. Pleadings must be filed directly
accreditation of citizens' arms of the Commission. 17 with the proper Clerk of Court of the COMELEC personally, or, by
registered mail.
In the instant case, the COMELEC en banc did not refer the case
to any of its Divisions upon receipt of the petition. It therefore In the instant case, the subject petition was not in proper form.
acted without jurisdiction or with grave abuse of discretion when Only two (2) copies of the petition were filed with the COMELEC.
it entertained the petition and issued the order of May 2, 1996. 19 Also, the COMELEC en banc issued its Resolution on the basis
18 of the petition transmitted by facsimile, not by registered mail.

II A facsimile or fax transmission is a process involving the

transmission and reproduction of printed and graphic matter by
The COMELEC en banc also erred when it failed to note that the scanning an original copy, one elemental area at a time, and
petition itself did not comply with the formal requirements of representing the shade or tone of each area by a specified amount
pleadings under the COMELEC Rules of Procedure. These of electric current. 20 The current is transmitted as a signal over
requirements are: regular telephone lines or via microwave relay and is used by the
receiver to reproduce an image of the elemental area in the proper
Sec. 1. Filing of Pleadings. — Every pleading, motion and other position and the correct shade. 21 The receiver is equipped with a
papers must be filed in ten (10) legible copies. However, when stylus or other device that produces a printed record on paper
there is more than one respondent or protestee, the petitioner or referred to as a facsimile. 22
protestant must file additional number of copies of the petition or
protest as there are additional respondents or protestees. Filing a pleading by facsimile transmission is not sanctioned by
the COMELEC Rules of Procedure, much less by the Rules of
Sec. 2. How Filed. — The documents referred to in the Court. A facsimile is not a genuine and authentic pleading. It is,
immediately preceding section must be filed directly with the at best, an exact copy preserving all the marks of an original. 23
proper Clerk of Court of the Commission personally, or, unless Without the original, there is no way of determining on its face
otherwise provided in these Rules, by registered mail. In the latter whether the facsimile pleading is genuine and authentic and was
case, the date of mailing is the date of filing and the requirement originally signed by the party and his counsel. It may, in fact, be
as to the number of copies must be complied with. a sham pleading. The uncertainty of the authenticity of a
facsimile pleading should have restrained the COMELEC en banc
Sec. 3. Form of Pleadings, etc. — (a) All pleadings allowed by from acting on the petition and issuing the questioned order. The
these Rules shall be printed, mimeographed or typewritten on COMELEC en banc should have waited until it received the
legal size bond paper and shall be in English or Filipino. petition filed by registered mail.

174
CASES ON EVIDENCE

III residing in the barangay for at least six (6) months, who are
fifteen (15) but not more than twenty-one (21) years of age, and
To write finis to the case at bar, we shall now resolve the issue of who are duly registered in the list of the sangguniang kabataan or
petitioner's age. in the official barangay list in the custody of the barangay
secretary.
The Katipunan ng Kabataan was originally created by Presidential
Decree No. 684 in 1975 as the Kabataang Barangay, a barangay A member of the Katipunan ng Kabataan may become a
youth organization composed of all residents of the barangay who candidate for the Sangguniang Kabataan if he possesses the
were at least 15 years but less than 18 years of age. 24 The following qualifications:
Kabataang Barangay sought to provide its members a medium to
express their views and opinions and participate in issues of Sec. 428. Qualifications. — An elective official of the sangguniang
transcendental importance. 25 Its affairs were administered by a kabataan must be a citizen of the Philippines, a qualified voter of
barangay youth chairman together with six barangay youth the katipunan ng kabataan, a resident of the barangay for at least
leaders who were actual residents of the barangay and were at one (1) year immediately prior to election, at least fifteen (15)
least 15 years but less than 18 years of age. 26 In 1983, Batas years but not more than twenty-one (21) years of age on the day
Pambansa Blg. 337, then the Local Government Code, raised the of his election, able to read and write Filipino, English, or the
maximum age of the Kabataang Barangay members from "less local dialect, and must not have been convicted of any crime
than 18 years of age" to "not more than 21 years of age." involving moral turpitude.

The Local Government Code of 1991 changed the Kabataang Under Section 424 of the Local Government Code, a member of
Barangay into the Katipunan ng Kabataan. It, however, retained the Katipunan ng Kabataan must be: (a) a Filipino citizen; (b) an
the age limit of the members laid down in B.P. 337 at 15 but not actual resident of the barangay for at least six months; (c) 15 but
more than 21 years old. 27 The affairs of the Katipunan ng not more than 21 years of age; and (d) duly registered in the list of
Kabataan are administered by the Sangguniang Kabataan (SK) the Sangguniang Kabataan or in the official barangay list. Section
composed of a chairman and seven (7) members who are elected 428 of the Code requires that an elective official of the
by the Katipunan ng Kabataan. 28 The chairman automatically Sangguniang Kabataan must be: (a) a Filipino citizen; (b) a
becomes ex-officio member of the Sangguniang Barangay. 29 A qualified voter in the Katipunan ng Kabataan; (c) a resident of the
member of the SK holds office for a term of three (3) years, unless barangay at least one (1) year immediately preceding the election;
sooner removed for cause, or becomes permanently incapacitated, (d) at least 15 years but not more than 21 years of age on the day
dies or resigns from office. 30 of his election; (e) able to read and write; and (f) must not have
been convicted of any crime involving moral turpitude.
Membership in the Katipunan ng Kabataan is subject to specific
qualifications laid down by the Local Government Code of 1991, For the May 6, 1996 SK elections, the COMELEC interpreted
viz: Sections 424 and 428 of the Local Government Code of 1991 in
Resolution No. 2824 and defined how a member of the Katipunan
Sec. 424. Katipunan ng Kabataan. — The katipunan ng kabataan ng Kabataan becomes a qualified voter and an elective official.
shall be composed of all citizens of the Philippines actually Thus:

175
CASES ON EVIDENCE

months immediately preceding the elections. A candidate for the

Sec. 3. Qualifications of a voter. — To be qualified to register as a SK must: (a) possess the foregoing qualifications of a voter; (b) be
voter in the SK elections, a person must be: a resident in the barangay at least one (1) year immediately
preceding the elections; and (c) able to read and write.
a) a citizen of the Philippines;
Except for the question of age, petitioner has all the qualifications
b) fifteen (15) but not more than twenty-one (21) years of age on of a member and voter in the Katipunan ng Kabataan and a
election day that is, he must have been born between May 6, candidate for the Sangguniang Kabataan. Petitioner 's age is
1975 and May 6, 1981, inclusive; and admittedly beyond the limit set in Section 3 [b] of COMELEC
Resolution No. 2824. Petitioner, however, argues that Section 3
c) a resident of the Philippines for at least one (1) year and [b] of Resolution No. 2824 is unlawful, ultra vires and beyond the
actually residing in the barangay wherein he proposes to vote for scope of Sections 424 and 428 of the Local Government Code of
at least six (6) months immediately preceding the elections. 1991. She contends that the Code itself does not provide that the
voter must be exactly 21 years of age on election day. She urges
xxx xxx xxx that so long as she did not turn twenty-two (22) years old, she
was still twenty-one years of age on election day and therefore
Sec. 6. Qualifications of elective members. — An elective official of qualified as a member and voter in the Katipunan ng Kabataan
the SK must be: and as candidate for the SK elections.

a) a qualified voter; A closer look at the Local Government Code will reveal a
distinction between the maximum age of a member in the
b) a resident in the barangay for at least one (1) year immediately Katipunan ng Kabataan and the maximum age of an elective SK
prior to the elections; and official. Section 424 of the Code sets a member's maximum age at
21 years only. There is no further provision as to when the
c) able to read and write Filipino or any Philippine language or member shall have turned 21 years of age. On the other hand,
dialect or English. Section 428 provides that the maximum age of an elective SK
official is 21 years old "on the day of his election." The addition of
Cases involving the eligibility or qualification of candidates shall the phrase "or the day of his election" is an additional
be decided by the city/municipal Election Officer (EO) whose qualification. The member may be more than 21 years of age on
decision shall be final. election day or on the day he registers as member of the
Katipunan ng Kabataan. The elective official, however, must not
A member of the Katipunan ng Kabataan may be a qualified voter be more than 21 years old on the day of election. The distinction
in the May 6, 1996 SK elections if he is: (a) a Filipino citizen; (b) is understandable considering that the Code itself provides more
15 but not more than 21 years of age on election day, i.e., the qualifications for an elective SK official than for a member of the
voter must be born between May 6, 1975 and May 6, 1981, Katipunan ng Kabataan. Dissimilum dissimilis est ratio. 31 The
inclusive; and (c) a resident of the Philippines for at least one (1) courts may distinguish when there are facts and circumstances
year and an actual resident of the barangay at least six (6)

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CASES ON EVIDENCE

showing that the legislature intended a distinction or because that would be more than 21 365-day cycles. "Not more
qualification. 32 than 21 years old" is not equivalent to "less than 22 years old,"
contrary to petitioner's claims. The law does not state that the
The qualification that a voter in the SK elections must not be candidate be less than 22 years on election day.
more than 21 years of age on the day of the election is not
provided in Section 424 of the Local Government Code of 1991. In In P.D. 684, the law that created the Kabataang Barangay, the
fact the term "qualified voter" appears only in COMELEC age qualification of a barangay youth official was expressly stated
Resolution No. 2824. 33 Since a "qualified voter" is not as ". . . at least fifteen years of age or over but less than eighteen .
necessarily an elective official, then it may be assumed that a . ." 36 This provision clearly states that the youth official must be
"qualified voter" is a "member of the Katipunan ng Kabataan." at least 15 years old and may be 17 years and a fraction of a year
Section 424 of the Code does not provide that the maximum age but should not reach the age of eighteen years. When the Local
of a member of the Katipunan ng Kabataan is determined on the Government Code increased the age limit of members of the youth
day of the election. Section 3 [b] of COMELEC Resolution No. organization to 21 years, it did not reenact the provision in such a
2824 is therefore ultra vires insofar as it sets the age limit of a way as to make the youth "at least 15 but less than 22 years old."
voter for the SK elections at exactly 21 years on the day of the If the intention of the Code's framers was to include citizens less
election. than 22 years old, they should have stated so expressly instead of
leaving the matter open to confusion and doubt. 37
The provision that an elective official of the SK should not be
more than 21 years of age on the day of his election is very clear. Former Senator Aquilino Q. Pimentel, the sponsor and principal
The Local Government Code speaks of years, not months nor author of the Local Government Code of 1991 declared that one of
days. When the law speaks of years, it is understood that years the reasons why the Katipunan ng Kabataan was created and the
are of 365 days each. 34 One born on the first day of the year is Kabataang Barangay discontinued was because most, if not all,
consequently deemed to be one year old on the 365th day after Kabataang Barangay leaders were already over 21 years of age by
his birth — the last day of the year. 35 In computing years, the the time President Aquino assumed power. 38 They were not the
first year is reached after completing the first 365 days. After the "youth" anymore. The Local Government Code of 1991 fixed the
first 365th day, the first day of the second 365-day cycle begins. maximum age limit at not more than 21 years 39 and the only
On the 365th day of the second cycle, the person turns two years exception is in the second paragraph of Section 423 which reads:
old. This cycle goes on and on in a lifetime. A person turns 21
years old on the 365th day of his 21st 365-day cycle. This means Sec. 423. Creation and Election. —
on his 21st birthday, he has completed the entire span of 21 365-
day cycles. After this birthday, the 365-day cycle for his 22nd a) . . . ;
year begins. The day after the 365th day is the first day of the
next 365-day cycle and he turns 22 years old on the 365th day. b) A sangguniang kabataan official who, during his term of office,
shall have passed the age of twenty-one (21) years shall be
The phrase "not more than 21 years of age" means not over 21 allowed to serve the remaining portion of the term for which he
years, not beyond 21 years. It means 21 365-day cycles. It does was elected.
not mean 21 years and one or some days or a fraction of a year

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CASES ON EVIDENCE

The general rule is that an elective official of the Sangguniang his election. 42 The will of the people as expressed through the
Kabataan must not be more than 21 years of age on the day of his ballot cannot cure the vice of ineligibility. 43
election. The only exception is when the official reaches the age of
21 years during his incumbency. Section 423 [b] of the Code The ineligibility of petitioner does not entitle private respondent,
allows him to serve the remaining portion of the term for which he the candidate who obtained the highest number of votes in the
was elected. According to Senator Pimentel, the youth leader May 6, 1996 elections, to be declared elected. 44 A defeated
must have "been elected prior to his 21st birthday." 40 candidate cannot be deemed elected to the office. 45 Moreover,
Conversely, the SK official must not have turned 21 years old despite his claims, 46 private respondent has failed to prove that
before his election. Reading Section 423 [b] together with Section the electorate themselves actually knew of petitioner's ineligibility
428 of the Code, the latest date at which an SK elective official and that they maliciously voted for her with the intention of
turns 21 years old is on the day of his election. The maximum age misapplying their franchises and throwing away their votes for
of a youth official must therefore be exactly 21 years on election the benefit of her rival candidate. 47
day. Section 3 [b] in relation to Section 6 [a] of COMELEC
Resolution No. 2824 is not ultra vires insofar as it fixes the Neither can this Court order that pursuant to Section 435 of the
maximum age of an elective SK official on the day of his election. Local Government Code petitioner should be succeeded by the
Sangguniang Kabataan member who obtained the next highest
In the case at bar, petitioner was born on June 11, 1974. On number of votes in the May 6, 1996 elections. 48 Section 435
March 16, 1996, the day she registered as voter for the May 6, applies when a Sangguniang Kabataan Chairman "refuses to
1996 SK elections, petitioner was twenty-one (21) years and nine assume office, fails to qualify, 49 is convicted of a felony,
(9) months old. On the day of the elections, she was 21 years, 11 voluntarily resigns, dies, is permanently incapacitated, is removed
months and 5 days old. When she assumed office on June 1, from office, or has been absent without leave for more than three
1996, she was 21 years, 11 months and 20 days old and was (3) consecutive months."
merely ten (10) days away from turning 22 years old. Petitioner
may have qualified as a member of the Katipunan ng Kabataan The question of the age qualification is a question of eligibility.50
but definitely, petitioner was over the age limit for elective SK Being "eligible" means being "legally qualified; capable of being
officials set by Section 428 of the Local Government Code and legally chosen." 51 Ineligibility, on the other hand, refers to the
Sections 3 [b] and 6 of Comelec Resolution No. 2824. She was lack of the qualifications prescribed in the Constitution or the
ineligible to run as candidate for the May 6, 1996 Sangguniang statutes for holding public office. 52 Ineligibility is not one of the
Kabataan elections. grounds enumerated in Section 435 for succession of the SK
Chairman.
The requirement that a candidate possess the age qualification is
founded on public policy and if he lacks the age on the day of the To avoid a hiatus in the office of SK Chairman, the Court deems it
election, he can be declared ineligible. 41 In the same vein, if the necessary to order that the vacancy be filled by the SK member
candidate is over the maximum age limit on the day of the chosen by the incumbent SK members of Barangay San Lorenzo,
election, he is ineligible. The fact that the candidate was elected Bangui, Ilocos Norte by simple majority from among themselves.
will not make the age requirement directory, nor will it validate The member chosen shall assume the office of SK Chairman for
the unexpired portion of the term, and shall discharge the powers

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CASES ON EVIDENCE

and duties, and enjoy the rights and privileges appurtenant to

said office.

IN VIEW WHEREOF, the petition is dismissed and petitioner

Lynette G. Garvida is declared ineligible for being over the age
qualification for candidacy in the May 6, 1996 elections of the
Sangguniang Kabataan, and is ordered to vacate her position as
Chairman of the Sangguniang Kabataan of Barangay San
Lorenzo, Bangui, Ilocos Norte. The Sangguniang Kabataan
member voted by simple majority by and from among the
incumbent Sangguniang Kabataan members of Barangay San
Lorenzo, Bangui, Ilocos Norte shall assume the office of
Sangguniang Kabataan Chairman of Barangay San Lorenzo,
Bangui, Ilocos Norte for the unexpired portion of the term.

SO ORDERED.

26. Seaoil Petroleum Corp v. Autocorp Group

Evidence; Parol Evidence; Witnesses; Unsubstantiated testimony,

offered as proof of verbal agreements which tends to vary the
terms of a written agreement, is inadmissible under the parol
evidence rule.—Petitioner does not question the validity of the
vehicle sales invoice but merely argues that the same does not
reflect the true agreement of the parties. However, petitioner only
had its bare testimony to back up the alleged arrangement with
Rodriguez. The Monte de Piedad checks—the supposedly “clear
and obvious link” between the documentary evidence and the true
transaction between the parties—are equivocal at best. There is
nothing in those checks to establish such link. Rodriguez denies
that there is such an agreement. Unsubstantiated testimony,
offered as proof of verbal agreements which tends to vary the
terms of a written agreement, is inadmissible under the parol
evidence rule.

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CASES ON EVIDENCE

Same; Same; Same; The parol evidence rule forbids any addition transaction has in fact transpired. These documents are not mere
to, or contradiction of, the terms of a written agreement by scraps of paper bereft of probative value, but vital pieces of
testimony or other evidence purporting to show that different evidence of commercial transactions. They are written memorials
terms were agreed upon by the parties, varying the purport of the of the details of the consummation of contracts.
written contract; Although parol evidence is admissible to explain
the meaning of a contract, it cannot serve the purpose of Same; Same; Witnesses; Oral testimony on the alleged conditions,
incorporating into the contract additional contemporaneous coming from a party who has an interest in the outcome of the
conditions which are not mentioned at all in the writing unless case, depending exclusively on human memory, is not as reliable
there has been fraud or mistake.—The parol evidence rule forbids as written or documentary evidence; The exception to the parol
any addition to, or contradiction of, the terms of a written evidence rule obtains only where the written contract is so
agreement by testimony or other evidence purporting to show that ambiguous or obscure in terms that the contractual intention of
different terms were agreed upon by the parties, varying the the parties cannot be understood from a mere reading of the
purport of the written contract. This principle notwithstanding, instrument.—Oral testimony on the alleged conditions, coming
petitioner would have the Court rule that this case falls within the from a party who has an interest in the outcome of the case,
exceptions, particularly that the written agreement failed to depending exclusively on human memory, is not as reliable as
express the true intent and agreement of the parties. This written or documentary evidence. Hence, petitioner’s contention
argument is untenable. Although parol evidence is admissible to that the document falls within the exception to the parol evidence
explain the meaning of a contract, it cannot serve the purpose of rule is untenable. The exception obtains only where “the written
incorporating into the contract additional contemporaneous contract is so ambiguous or obscure in terms that the contractual
conditions which are not mentioned at all in the writing unless intention of the parties cannot be understood from a mere reading
there has been fraud or mistake. Evidence of a prior or of the instrument. In such a case, extrinsic evidence of the
contemporaneous verbal agreement is generally not admissible to subject matter of the contract, of the relations of the parties to
vary, contradict or defeat the operation of a valid contract. each other, and of the facts and circumstances surrounding them
Same; Same; Sales Invoices; A sales invoice is a commercial when they entered into the contract may be received to enable the
document—commercial documents or papers are those used by court to make a proper interpretation of the instrument.”
merchants or businessmen to promote or facilitate trade or credit
transactions—they are not mere scraps of paper bereft of NACHURA, J.:
probative value, but vital pieces of evidence of commercial
transactions, written memorials of the details of the Before this Court is a Petition for Review on Certiorari under Rule
consummation of contracts.—The Vehicle Sales Invoice is the best 45 of the Rules of Court assailing the Decision1 of the Court of
evidence of the transaction. A sales invoice is a commercial Appeals (CA) dated May 20, 2004 in CA-G.R. CV No. 72193,
document. Commercial documents or papers are those used by which had affirmed in toto the Decision2 of the Regional Trial
merchants or businessmen to promote or facilitate trade or credit Court (RTC) of Pasig City, Branch 157, dated September 10, 2001
transactions. Business forms, e.g., order slip, delivery charge in Civil Case No. 64943.
invoice and the like, are commonly recognized in ordinary
commercial transactions as valid between the parties and, at the The factual antecedents, as summarized by the CA, are as
very least, they serve as an acknowledgment that a business follows:

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CASES ON EVIDENCE

were only utilized as conduits to settle the obligation of one

On September 24, 1994, defendant-appellant Seaoil Petroleum foreign entity named Uniline Asia (herein referred to as Uniline),
Corporation (Seaoil, for brevity) purchased one unit of ROBEX in favor of another foreign entity, Focus Point International,
200 LC Excavator, Model 1994 from plaintiff-appellee Autocorp Incorporated (Focus for short). Paul Rodriguez (Rodriguez for
Group (Autocorp for short). The original cost of the unit was brevity) is a stockholder and director of Autocorp. He is also the
P2,500,000.00 but was increased to P3,112,519.94 because it owner of Uniline. On the other hand, Yu is the president and
was paid in 12 monthly installments up to September 30, 1995. stockholder of Seaoil and is at the same time owner of Focus.
The sales agreement was embodied in the Vehicle Sales Invoice Allegedly, Uniline chartered MV Asia Property (sic) in the amount
No. A-0209 and Vehicle Sales Confirmation No. 258. Both of $315,711.71 from its owner Focus. Uniline was not able to
documents were signed by Francis Yu (Yu for short), president of settle the said amount. Hence, Uniline, through Rodriguez,
Seaoil, on behalf of said corporation. Furthermore, it was agreed proposed to settle the obligation through conveyance of vehicles
that despite delivery of the excavator, ownership thereof was to and heavy equipment. Consequently, four units of Tatamobile
remain with Autocorp until the obligation is fully settled. In this pick-up trucks procured from Autocorp were conveyed to Focus
light, Seaoil's contractor, Romeo Valera, issued 12 postdated as partial payment. The excavator in controversy was allegedly
checks. However, Autocorp refused to accept the checks because one part of the vehicles conveyed to Focus. Seaoil claims that
they were not under Seaoil's name. Hence, Yu, on behalf of Seaoil, Rodriguez initially issued 12 postdated checks in favor of
signed and issued 12 postdated checks for P259,376.62 each with Autocorp as payment for the excavator. However, due to the fact
Autocorp as payee. that it was company policy for Autocorp not to honor postdated
checks issued by its own directors, Rodriguez requested Yu to
The excavator was subsequently delivered on September 26, 1994 issue 12 PBCOM postdated checks in favor of Autocorp. In turn,
by Autocorp and was received by Seaoil in its depot in Batangas. said checks would be funded by the corresponding 12 Monte de
Piedad postdated checks issued by Rodriguez. These Monte de
The relationship started to turn sour when the first check Piedad checks were postdated three days prior to the maturity of
bounced. However, it was remedied when Seaoil replaced it with a the PBCOM checks.
good check. The second check likewise was also good when
presented for payment. However, the remaining 10 checks were Seaoil claims that Rodriguez issued a stop payment order on the
not honored by the bank since Seaoil requested that payment be ten checks thus constraining the former to also order a stop
stopped. It was downhill from thereon. payment order on the PBCOM checks.

Despite repeated demands, Seaoil refused to pay the remaining In short, Seaoil claims that the real transaction is that Uniline,
balance of P2,593,766.20. Hence, on January 24, 1995, Autocorp through Rodriguez, owed money to Focus. In lieu of payment,
filed a complaint for recovery of personal property with damages Uniline instead agreed to convey the excavator to Focus. This was
and replevin in the Regional Trial Court of Pasig. The trial court to be paid by checks issued by Seaoil but which in turn were to
ruled for Autocorp. Hence, this appeal. be funded by checks issued by Uniline. x x x3

Seaoil, on the other hand, alleges that the transaction is not as As narrated above, respondent Autocorp filed a Complaint for
simple as described above. It claims that Seaoil and Autocorp Recovery of Personal Property with Damages and Replevin4

181
CASES ON EVIDENCE

against Seaoil before the RTC of Pasig City. In its September 10, corporations were utilized to perpetrate a fraud. Lastly, it held
2001 Decision, the RTC ruled that the transaction between that the RTC was correct in dismissing the third-party complaint
Autocorp and Seaoil was a simple contract of sale payable in since it did not arise out of the same transaction on which the
installments.5 It also held that the obligation to pay plaintiff the plaintiff's claim is based, or that the third party's claim, although
remainder of the purchase price of the excavator solely devolves arising out of another transaction, is connected to the plaintiff's
on Seaoil. Paul Rodriguez, not being a party to the sale of the claim. Besides, the CA said, such claim may be enforced in a
excavator, could not be held liable therefor. The decretal portion separate action.
of the trial court's Decision reads, thus:
Seaoil now comes before this Court in a Petition for Review raising
WHEREFORE, judgment is hereby rendered in favor of plaintiff the following issues:
Autocorp Group and against defendant Seaoil Petroleum
Corporation which is hereby directed to pay plaintiff: I

- P2,389,179.23 plus 3% interest from the time of judicial Whether or not the Court of Appeals erred in partially applying
demand until full payment; andcralawlibrary the parol evidence rule to prove only some terms contained in one
portion of the document but disregarded the rule with respect to
- 25% of the total amount due as attorney's fees and cost of another but substantial portion or entry also contained in the
litigation. same document which should have proven the true nature of the
transaction involved.
The third-party complaint filed by defendant Seaoil Petroleum
Corporation against third-party defendant Paul Rodriguez is II
hereby DISMISSED for lack of merit.
Whether or not the Court of Appeals gravely erred in its judgment
SO ORDERED. based on misapprehension of facts when it declared absence of
facts which are contradicted by presence of evidence on record.
Seaoil filed a Petition for Review before the CA. In its assailed
Decision, the CA dismissed the petition and affirmed the RTC's III
Decision in toto.6 It held that the transaction between Yu and
Rodriguez was merely verbal. This cannot alter the sales contract Whether or not the dismissal of the third-party complaint would
between Seaoil and Autocorp as this will run counter to the parol have the legal effect of res judicata as would unjustly preclude
evidence rule which prohibits the introduction of oral and parol petitioner from enforcing its claim against respondent Rodriguez
evidence to modify the terms of the contract. The claim that it (third-party defendant) in a separate action.
falls under the exceptions to the parol evidence rule has not been
sufficiently proven. Moreover, it held that Autocorp's separate IV
corporate personality cannot be disregarded and the veil of
corporate fiction pierced. Seaoil was not able to show that Whether or not, given the facts in evidence, the lower courts
Autocorp was merely an alter ego of Uniline or that both should have pierced the corporate veil.

182
CASES ON EVIDENCE

(a) An intrinsic ambiguity, mistake or imperfection in the written

The Petition lacks merit. We sustain the ruling of the CA. agreement;

We find no fault in the trial court's appreciation of the facts of (b) The failure of the written agreement to express the true intent
this case. The findings of fact of the trial court are conclusive and agreement of the parties thereto;
upon this Court, especially when affirmed by the CA. None of the
exceptions to this well-settled rule has been shown to exist in this (c) The validity of the written agreement; or
case.
(d) The existence of other terms agreed to by the parties or their
Petitioner does not question the validity of the vehicle sales successors-in-interest after the execution of the written
invoice but merely argues that the same does not reflect the true agreement.
agreement of the parties. However, petitioner only had its bare
testimony to back up the alleged arrangement with Rodriguez. The term "agreement" includes wills.

The Monte de Piedad checks - the supposedly "clear and obvious The parol evidence rule forbids any addition to, or contradiction
link"7 between the documentary evidence and the true of, the terms of a written agreement by testimony or other
transaction between the parties - are equivocal at best. There is evidence purporting to show that different terms were agreed
nothing in those checks to establish such link. Rodriguez denies upon by the parties, varying the purport of the written contract.9
that there is such an agreement.
This principle notwithstanding, petitioner would have the Court
Unsubstantiated testimony, offered as proof of verbal agreements rule that this case falls within the exceptions, particularly that
which tends to vary the terms of a written agreement, is the written agreement failed to express the true intent and
inadmissible under the parol evidence rule.8 agreement of the parties. This argument is untenable.

Rule 130, Section 9 of the Revised Rules on Evidence embodies

the parol evidence rule and states:
Although parol evidence is admissible to explain the meaning of a
SEC. 9. Evidence of written agreements. When the terms of an contract, it cannot serve the purpose of incorporating into the
agreement have been reduced to writing, it is considered as contract additional contemporaneous conditions which are not
containing all the terms agreed upon and there can be, between mentioned at all in the writing unless there has been fraud or
the parties and their successors-in-interest, no evidence of such mistake.10 Evidence of a prior or contemporaneous verbal
terms other than the contents of the written agreement. agreement is generally not admissible to vary, contradict or defeat
the operation of a valid contract.11
However, a party may present evidence to modify, explain or add
to the terms of the written agreement if he puts in issue in his The Vehicle Sales Invoice12 is the best evidence of the
pleading: transaction. A sales invoice is a commercial document.

183
CASES ON EVIDENCE

Commercial documents or papers are those used by merchants or Even assuming there is a shred of truth to petitioner's contention,
businessmen to promote or facilitate trade or credit the same cannot be made a basis for holding respondents liable
transactions.13 Business forms, e.g., order slip, delivery charge therefor.
invoice and the like, are commonly recognized in ordinary
commercial transactions as valid between the parties and, at the As pointed out by the CA, Rodriguez is a person separate and
very least, they serve as an acknowledgment that a business independent from Autocorp. Whatever obligations Rodriguez
transaction has in fact transpired.14 These documents are not contracted cannot be attributed to Autocorp19 and vice versa. In
mere scraps of paper bereft of probative value, but vital pieces of fact, the obligation that petitioner proffers as its defense - under
evidence of commercial transactions. They are written memorials the Lease Purchase Agreement - was not even incurred by
of the details of the consummation of contracts.15 Rodriguez or by Autocorp but by Uniline.

The terms of the subject sales invoice are clear. They show that The Lease Purchase Agreement20 clearly shows that the parties
Autocorp sold to Seaoil one unit Robex 200 LC Excavator paid for thereto are two corporations not parties to this case: Focus Point
by checks issued by one Romeo Valera. This does not, however, and Uniline. Under this Lease Purchase Agreement, it is Uniline,
change the fact that Seaoil Petroleum Corporation, as represented as lessee/purchaser, and not Rodriguez, that incurred the debt to
by Yu, is the customer or buyer. The moment a party affixes his Focus Point. The obligation of Uniline to Focus Point arose out of
or her signature thereon, he or she is bound by all the terms a transaction completely different from the subject of the instant
stipulated therein and is subject to all the legal obligations that case.
may arise from their breach.16
It is settled that a corporation has a personality separate and
Oral testimony on the alleged conditions, coming from a party distinct from its individual stockholders or members, and is not
who has an interest in the outcome of the case, depending affected by the personal rights, obligations and transactions of
exclusively on human memory, is not as reliable as written or the latter.21 The corporation may not be held liable for the
documentary evidence.17 obligations of the persons composing it, and neither can its
stockholders be held liable for its obligation.22
Hence, petitioner's contention that the document falls within the
exception to the parol evidence rule is untenable. The exception Of course, this Court has recognized instances when the
obtains only where "the written contract is so ambiguous or corporation's separate personality may be disregarded. However,
obscure in terms that the contractual intention of the parties we have also held that the same may only be done in cases where
cannot be understood from a mere reading of the instrument. In the corporate vehicle is being used to defeat public convenience,
such a case, extrinsic evidence of the subject matter of the justify wrong, protect fraud, or defend crime.23 Moreover, the
contract, of the relations of the parties to each other, and of the wrongdoing must be clearly and convincingly established. It
facts and circumstances surrounding them when they entered cannot be presumed.24
into the contract may be received to enable the court to make a
proper interpretation of the instrument."18 To reiterate, the transaction under the Vehicle Sales Invoice is
separate and distinct from that under the Lease Purchase
Agreement. In the former, it is Seaoil that owes Autocorp, while in

184
CASES ON EVIDENCE

the latter, Uniline incurred obligations to Focus. There was never Petitioner's claim against Rodriguez was fully ventilated in the
any allegation, much less any evidence, that Autocorp was merely proceedings before the trial court, tried and decided on its merits.
an alter ego of Uniline, or that the two corporations' separate The trial court's ruling operates as res judicata against another
personalities were being used as a means to perpetrate fraud or suit involving the same parties and same cause of action. This is
wrongdoing. rightly so because the trial court found that Rodriguez was not a
party to the sale of the excavator. On the other hand, petitioner
Moreover, Rodriguez, as stockholder and director of Uniline, Seaoil's liability has been successfully established by respondent.
cannot be held personally liable for the debts of the corporation,
which has a separate legal personality of its own. While Section A last point. We reject Seaoil's claim that "the ownership of the
31 of the Corporation Code25 lays down the exceptions to the subject excavator, having been legally and completely transferred
rule, the same does not apply in this case. Section 31 makes a to Focus Point International, Inc., cannot be subject of replevin
director personally liable for corporate debts if he willfully and and plaintiff [herein respondent Autocorp] is not legally entitled to
knowingly votes for or assents to patently unlawful acts of the any writ of replevin."30 The claim is negated by the sales invoice
corporation. Section 31 also makes a director personally liable if which clearly states that "[u]ntil after the vehicle is fully paid
he is guilty of gross negligence or bad faith in directing the affairs inclusive of bank clearing time, it remains the property of
of the corporation.26 The bad faith or wrongdoing of the director Autocorp Group which reserves the right to take possession of
must be established clearly and convincingly. Bad faith is never said vehicle at any time and place without prior notice."31
presumed.27
Considering, first, that Focus Point was not a party to the sale of
The burden of proving bad faith or wrongdoing on the part of the excavator and, second, that Seaoil indeed failed to pay for the
Rodriguez was, on petitioner, a burden which it failed to excavator in full, the same still rightfully belongs to Autocorp.
discharge. Thus, it was proper for the trial court to have Additionally, as the trial court found, Seaoil had already assigned
dismissed the third-party complaint against Rodriguez on the the same to its contractor for the construction of its depot in
ground that he was not a party to the sale of the excavator. Batangas.32 Hence, Seaoil has already enjoyed the benefit of the
transaction even as it has not complied with its obligation. It
Rule 6, Section 11 of the Revised Rules on Civil Procedure defines cannot be permitted to unjustly enrich itself at the expense of
a third-party complaint as a claim that a defending party may, another.
with leave of court, file against a person not a party to the action,
called the third-party defendant, for contribution, indemnity, WHEREFORE, the foregoing premises considered, the Petition is
subrogation or any other relief, in respect of his opponent's claim. hereby DENIED. The Decision of the Court of Appeals dated May
20, 2004 in CA-G.R. CV No. 72193 is AFFIRMED.
The purpose of the rule is to permit a defendant to assert an
independent claim against a third party which he, otherwise, SO ORDERED.
would assert in another action, thus preventing multiplicity of
suits.28 Had it not been for the rule, the claim could have been
filed separately from the original complaint.29

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CASES ON EVIDENCE

27. Edrada v. Ramos

Contracts; Sales; Parol Evidence Rule; The parol evidence rule

forbids any addition to or contradiction of the terms of the written
agreement by testimony or other evidence purporting to show that
different terms were agreed upon by the parties, varying the
purport of the written contract.—We acknowledge that the
contending parties offer vastly differing accounts as to the true
nature of the agreement. Still, we need not look beyond the
document dated 1 April 1996 and the stipulations therein in

186
CASES ON EVIDENCE

order to ascertain what obligations, if any, have been contracted (SGD.) (SGD.)
by the party. The parol evidence rule forbids any addition to or
contradiction of the terms of a written agreement by testimony or EDUARDO O. RAMOS ALFREDO R. EDRADA
other evidence purporting to show that different terms were
agreed upon by the parties, varying the purport of the written (Seller) (Purchaser)
contract. Whatever is not found in the writing is understood to
have been waived and abandoned. CONFORME: CONFORME:

Tinga, J.: (SGD.) (SGD.)

In this Petition1 under Rule 45, petitioner Spouses Alfredo and CARMENCITA RAMOS ROSIE ENDRADA6
Rosella Edrada (petitioners) seek the reversal of the Former
Second Division of the Court of Appeals’ Decision2 and Upon the signing of the document, petitioners delivered to
Resolution3 in CA-G.R. CV No. 66375, which affirmed the respondents four (4) postdated Far East Bank and Trust
Decision of Regional Trial Court (RTC) of Antipolo City, Branch Company (FEBTC) checks payable to cash drawn by petitioner
71,4 in Civil Case No. 96-4057, and denied the Motion for Rosella Edrada, in various amounts totaling One Hundred Forty
Reconsideration5 therein. Thousand Pesos (₱140,000.00). The first three (3) checks were
honored upon presentment to the drawee bank while the fourth
Respondent spouses Eduardo and Carmencita Ramos check for One Hundred Thousand Pesos (₱100,000.00) was
(respondents) are the owners of two (2) fishing vessels, the "Lady dishonored because of a "stop payment" order.
Lalaine" and the "Lady Theresa." On 1 April 1996, respondents
and petitioners executed an untitled handwritten document On 3 June 1996, respondents filed an action against petitioners
which lies at the center of the present controversy. Its full text is for specific performance with damages before the RTC, praying
reproduced below: that petitioners be obliged to execute the necessary deed of sale of
the two fishing vessels and to pay the balance of the purchase
1st April 1996 price. In their Complaint,7 respondents alleged that petitioners
contracted to buy the two fishing vessels for the agreed purchase
This is to acknowledge that Fishing Vessels ‘Lady Lalaine’ and price of Nine Hundred Thousand Pesos (₱900,000.00), as
‘Lady Theresa’ owned by Eduardo O. Ramos are now in my evidenced by the above-quoted document, which according to
possession and received in good running and serviceable order. them evinced a contract to
As such, the vessels are now my responsibility.
buy. However, despite delivery of said vessels and repeated oral
Documents pertaining to the sale and agreement of payments demands, petitioners failed to pay the balance, so respondents
between me and the owner of the vessel to follow. The agreed further averred.
price for the vessel is Nine Hundred Thousand Only
(₱900,000.00). Belying the allegations of respondents, in their Answer with
Counterclaim,8 petitioners averred that the document sued upon

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CASES ON EVIDENCE

merely embodies an agreement brought about by the loans they contract of sale as distinguished from a contract to sell. They
extended to respondents. According to petitioners, respondents likewise posed as sub-issues the purpose for which the checks
allowed them to manage or administer the fishing vessels as a were issued, whether replacement of the crew was an act of
business on the understanding that should they find the business ownership or administration, whether petitioners failed to protest
profitable, the vessels would be sold to them for Nine Hundred the dilapidated condition of the vessels, and whether the
Thousand Pesos (₱900,000.00). But petitioners "decided to call it instances when the vessels went out to sea proved that the
quits" after spending a hefty sum for the repair and maintenance vessels were not seaworthy.13 It is also alleged in the petition
of the vessels which were already in dilapidated condition. that the true agreement as between the parties was that of a loan.

After trial, the RTC rendered a Decision9 dated 22 February Evidently, the petition hinges on the true nature of the document
1999, the dispositive portion of which reads: dated 1 April 1996. Normally, the Court is bound by the factual
findings of the lower courts, and accordingly, should affirm the
WHEREFORE, judgment is hereby rendered in favor of the conclusion that the document in question was a perfected
plaintiffs and against the defendants and the latter are ordered to contract of sale. However, we find that both the RTC and the
pay to the former the amount of Eight Hundred Sixty Thousand Court of Appeals gravely misapprehended the nature of the said
Pesos (₱860,000.00) with legal interests thereon from June 30, document, and a reevaluation of the document is in order.14
1996 until fully paid; the amount of ₱20,000.00 as attorney’s fees Even if such reevaluation would lead the court to examine issues
and the cost of suit. not raised by the parties, it should be remembered that the Court
has authority to review matters even if not assigned as errors in
The counterclaim of the defendants for moral and exemplary the appeal, if it is found that their consideration is necessary in
damages and for attorney’s fees is dismissed for lack of merit. arriving at a just decision of the case.15

SO ORDERED.10 In doing so, we acknowledge that the contending parties offer

vastly differing accounts as to the true nature of the agreement.
The RTC treated the action as one for collection of a sum of Still, we need not look beyond the document dated 1 April 1996
money and for damages and considered the document as a and the stipulations therein in order to ascertain what
perfected contract of sale. On 19 April 1999, petitioners filed a obligations, if any, have been contracted by the party. The parol
Motion for Reconsideration which the RTC denied in an Order11 evidence rule forbids any addition to or contradiction of the terms
dated 2 July 1999. of a written agreement by testimony or other evidence purporting
to show that different terms were agreed upon by the parties,
Both parties appealed the RTC Decision. However, finding no varying the purport of the written
reversible error in the appealed decision, the Court of Appeals, in
its Decision,12 affirmed the same and dismissed both appeals. contract. Whatever is not found in the writing is understood to
Only petitioners elevated the controversy to this Court. have been waived and abandoned.16

Petitioners raised the nature of the subject document as the We disagree with the RTC and the Court of Appeals that the
primary legal issue. They contend that there was no perfected document is a perfected contract of sale. A contract of sale is

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CASES ON EVIDENCE

defined as an agreement whereby one of the contracting parties indicates that at the time of the filing of the complaint, the
obligates himself to transfer the ownership of and to deliver a obligation to pay was not yet due and demandable.
determinate thing, and the other to pay therefore a price certain
in money or its equivalent.17 It must evince the consent on the Respondents, during trial, did claim the existence of a period.
part of the seller to transfer and deliver and on the part of the Respondent Carmencita Ramos, during cross-examination,
buyer to pay.18 claimed that the supposed balance shall be paid on 30 June
1996.21 But how do respondents explain why the Complaint was
An examination of the document reveals that there is no perfected filed on 3 June 1996? Assuming that the 30 June 1996 period
contract of sale. The agreement may confirm the receipt by was duly agreed upon by the parties, the filing of the Complaint
respondents of the two vessels and their purchase price. However, was evidently premature, as no cause of action had accrued yet.
there is no equivocal agreement to transfer ownership of the There could not have been any breach of obligation because on
vessel, but a mere commitment that "documents pertaining to the the date the action was filed, the alleged maturity date for the
sale and agreement of payments…[are] to follow." Evidently, the payment of the balance had not yet arrived.
document or documents which would formalize the transfer of
ownership and contain the terms of payment of the purchase In order that respondents could have a valid cause of action, it is
price, or the period when such would become due and essential that there must have been a stipulated period within
demandable, have yet to be executed. But no such document was which the payment would have become due and demandable. If
executed and no such terms were stipulated upon. the parties themselves could not come into agreement, the courts
may be asked to fix the period of the obligation, under Article
The fact that there is a stated total purchase price should not 1197 of the Civil Code.22 The respondents did not avail of such
lead to the conclusion that a contract of sale had been perfected. relief prior to the filing of the instant Complaint; thus, the action
In numerous cases,19 the most recent of which is Swedish should fail owing to its obvious prematurity.
Match, AB v. Court of Appeals,20 we held that before a valid and
binding contract of sale can exist, the manner of payment of the Returning to the true nature of the document, we neither could
purchase price must first be established, as such stands as conclude that a "contract to sell" had been established. A contract
essential to the validity of the sale. After all, such agreement on to sell is defined as a bilateral contract whereby the prospective
the terms of payment is integral to the element of a price certain, seller, while expressly reserving the ownership of the subject
such that a disagreement on the manner of payment is property despite delivery thereof to the prospective buyer, binds
tantamount to a failure to agree on the price. himself to sell the said property exclusively to the prospective
buyer upon fulfillment of the condition agreed upon, that is, full
Assuming arguendo that the document evinces a perfected payment of the purchase price.23
contract of sale, the absence of definite terms of payment therein
would preclude its enforcement by the respondents through the A contract is perfected when there is concurrence of the wills of
instant Complaint. A requisite for the judicial enforcement of an the contracting parties with respect to the object and the cause of
obligation is that the same is due and demandable. The absence the contract. In this case, the agreement merely acknowledges
of a stipulated period by which the purchase price should be paid that a purchase price had been agreed on by the parties. There
was no mutual promise to buy on the part of petitioners and to

189
CASES ON EVIDENCE

sell on the part of respondents. Again, the aforestated proviso in

the agreement that documents pertaining to the sale and
agreement of payments between the parties will follow clearly
manifests lack of agreement between the parties as to the terms
of the contract to sell, particularly the object and cause of the
contract.

The agreement in question does not create any obligatory force

either for the transfer of title of the vessels, or the rendition of
payments as part of the purchase price. At most, this agreement
bares only their intention to enter into either a contract to sell or
a contract of sale.

Consequently, the courts below erred in ordering the enforcement

of a contract of sale that had yet to come into existence. Instead,
the instant Complaint should be dismissed. It prays for three
reliefs arising from the enforcement of the document: execution
by the petitioners of the necessary deed of sale over the vessels,
the payment of the balance of the purchase price, and damages.
The lower courts have already ruled that damages are unavailing.
Our finding that there is no perfected contract of sale precludes
the finding of any cause of action that would warrant the granting
of the first two reliefs. No cause of action arises until there is a
breach or violation thereof by either party.24 Considering that the
documents create no obligation to execute or even pursue a
contract of sale, but only manifest an intention to eventually
contract one, we find no rights breached or violated that would
warrant any of the reliefs sought in the Complaint.

WHEREFORE, the petition is GRANTED. The assailed Decision 28. Ortañez v. CA

and Resolution of the Court of Appeals are REVERSED and SET
ASIDE. The case before the Regional Trial Court is ordered Evidence; Privacy of Communication; Anti-Wire Tapping Law;
dismissed. no pronouncement as to costs. Unauthorized tape recordings of telephone conversations not
admissible in evidence.—Rep. Act No. 4200 entitled “An Act to
SO ORDERED. Prohibit and Penalize Wire Tapping and Other Related Violations
of the Privacy of Communication, and for other purposes”
expressly makes such tape recordings inadmissible in evidence.

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CASES ON EVIDENCE

Clearly, respondents trial court and the Court of Appeals failed to

consider the provisions of the law in admitting in evidence the A motion for reconsideration from petitioner was denied on 23
cassette tapes in question. Absent a clear showing that both June 1992.
parties to the telephone conversations allowed the recording of
the same, the inadmissibility of the subject tapes is man-datory A petition for certiorari was then filed by petitioner in the Court of
under Rep. Act No. 4200. Appeals assailing the admission in evidence of the aforementioned
cassette tapes.
PADILLA, J.:
On 10 June 1993, the Court of Appeals rendered judgment which
This is a petition for review under Rule 45 of the Rules of Court is the subject of the present petition, which in part reads:
which seeks to reverse the decision * of respondent Court of
Appeals in CA-G. R. SP No. 28545 entitled "Teresita Salcedo- It is much too obvious that the petition will have to fail, for two
Ortanez versus Hon. Romeo F. Zamora, Presiding Judge, Br. 94, basic reasons:
Regional Trial Court of Quezon City and Rafael S. Ortanez".
(1) Tape recordings are not inadmissible per se. They and any
The relevant facts of the case are as follows: other variant thereof can be admitted in evidence for certain
purposes, depending on how they are presented and offered and
On 2 May 1990, private respondent Rafael S. Ortanez filed with on how the trial judge utilizes them in the interest of truth and
the Regional Trial Court of Quezon City a complaint for fairness and the even handed administration of justice.
annulment of marriage with damages against petitioner Teresita
Salcedo-Ortanez, on grounds of lack of marriage license and/or (2) A petition for certiorari is notoriously inappropriate to rectify a
psychological incapacity of the petitioner. The complaint was supposed error in admitting evidence adduced during trial. The
docketed as Civil Case No. Q-90-5360 and raffled to Branch 94, ruling on admissibility is interlocutory; neither does it impinge on
RTC of Quezon City presided over by respondent Judge Romeo F. jurisdiction. If it is erroneous, the ruling should be questioned in
Zamora. the appeal from the judgment on the merits and not through the
special civil action of certiorari. The error, assuming gratuitously
Private respondent, after presenting his evidence, orally formally that it exists, cannot be anymore than an error of law, properly
offered in evidence Exhibits "A" to "M". correctible by appeal and not by certiorari. Otherwise, we will
have the sorry spectacle of a case being subject of a
Among the exhibits offered by private respondent were three (3) counterproductive "ping-pong" to and from the appellate court as
cassette tapes of alleged telephone conversations between often as a trial court is perceived to have made an error in any of
petitioner and unidentified persons. its rulings with respect to evidentiary matters in the course of
trial. This we cannot sanction.
Petitioner submitted her Objection/Comment to private
respondent's oral offer of evidence on 9 June 1992; on the same WHEREFORE, the petition for certiorari being devoid of merit, is
day, the trial court admitted all of private respondent's offered hereby DISMISSED. 1
evidence.

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CASES ON EVIDENCE

From this adverse judgment, petitioner filed the present petition In the present case, the trial court issued the assailed order
for review, stating: admitting all of the evidence offered by private respondent,
including tape recordings of telephone conversations of petitioner
Grounds for Allowance of the Petition with unidentified persons. These tape recordings were made and
obtained when private respondent allowed his friends from the
10. The decision of respondent [Court of Appeals] has no basis in military to wire tap his home telephone. 4
law nor previous decision of the Supreme Court.
Rep. Act No. 4200 entitled "An Act to Prohibit and Penalize Wire
10.1 In affirming the questioned order of respondent judge, the Tapping and Other Related Violations of the Privacy of
Court of Appeals has decided a question of substance not Communication, and for other purposes" expressly makes such
theretofore determined by the Supreme Court as the question of tape recordings inadmissible in evidence. The relevant provisions
admissibility in evidence of tape recordings has not, thus far, of Rep. Act No. 4200 are as follows:
been addressed and decided squarely by the Supreme Court.
Sec. 1. It shall be unlawful for any person, not being authorized
11. In affirming the questioned order of respondent judge, the by all the parties to any private communication or spoken word,
Court of Appeals has likewise rendered a decision in a way not in to tap any wire or cable, or by using any other device or
accord with law and with applicable decisions of the Supreme arrangement, to secretly overhear, intercept, or record such
Court. communication or spoken word by using a device commonly
known as a dictaphone or dictagraph or detectaphone or walkie-
11.1 Although the questioned order is interlocutory in nature, the talkie or tape-recorder, or however otherwise described. . . .
same can still be [the] subject of a petition for certiorari. 2
Sec. 4. Any communication or spoken word, or the existence,
The main issue to be resolved is whether or not the remedy of contents, substance, purport, or meaning of the same or any part
certiorari under Rule 65 of the Rules of Court was properly thereof, or any information therein contained, obtained or secured
availed of by the petitioner in the Court of Appeals. by any person in violation of the preceding sections of this Act
shall not be admissible in evidence in any judicial, quasi-judicial,
The extraordinary writ of certiorari is generally not available to legislative or administrative hearing or investigation.
challenge an interlocutory order of a trial court. The proper
remedy in such cases is an ordinary appeal from an adverse Clearly, respondents trial court and Court of Appeals failed to
judgment, incorporating in said appeal the grounds for assailing consider the afore-quoted provisions of the law in admitting in
the interlocutory order. evidence the cassette tapes in question. Absent a clear showing
that both parties to the telephone conversations allowed the
However, where the assailed interlocutory order is patently recording of the same, the inadmissibility of the subject tapes is
erroneous and the remedy of appeal would not afford adequate mandatory under Rep. Act No. 4200.
and expeditious relief, the Court may allow certiorari as a mode of
redress. 3 Additionally, it should be mentioned that the above-mentioned
Republic Act in Section 2 thereof imposes a penalty of

192
CASES ON EVIDENCE

imprisonment of not less than six (6) months and up to six (6)
years for violation of said Act. 5

We need not address the other arguments raised by the parties,

involving the applicability of American jurisprudence, having
arrived at the conclusion that the subject cassette tapes are
inadmissible in evidence under Philippine law.

WHEREFORE, the decision of the Court of Appeals in CA-G. R. SP

No. 28545 is hereby SET ASIDE. The subject cassette tapes are
declared inadmissible in evidence.

SO ORDERED.

29. Inciong v. CA

Contracts; Evidence; Parol Evidence Rule; Negotiable

Instruments; Promissory Notes; The parol evidence rule does not
specify that the written agreement be a public document.—Nor is
there merit in petitioner’s assertion that since the promissory
note “is not a public deed with the formalities prescribed by law
but x x x a mere commercial paper which does not bear the
signature of x x x attesting witnesses,” parol evidence may

193
CASES ON EVIDENCE

“overcome” the contents of the promissory note. The first amount of FIFTY THOUSAND PESOS (P50,000.00), with interest
paragraph of the parol evidence rule states: “When the terms of thereon from May 5, 1983 at 16% per annum until fully paid; and
an agreement have been reduced to writing, it is considered as 6% per annum on the total amount due, as liquidated damages or
containing all the terms agreed upon and there can be, between penalty from May 5, 1983 until fully paid; plus 10% of the total
the parties and their successors in interest, no evidence of such amount due for expenses of litigation and attorney's fees; and to
terms other than the contents of the written agreement.” Clearly, pay the costs.
the rule does not specify that the written agreement be a public
document. The counterclaim, as well as the cross claim, are dismissed for
lack of merit.
Same; Same; Same; Same; Same; For the parol evidence rule to
apply, a written contract need not be in any particular form, or be SO ORDERED.
signed by both parties—as a general rule, bills, notes and other
instruments of a similar nature are not subject to be varied or Petitioner's liability resulted from the promissory note in the
contradicted by parol or extrinsic evidence.—What is required is amount of P50,000.00 which he signed with Rene C. Naybe and
that the agreement be in writing as the rule is in fact founded on Gregorio D. Pantanosas on February 3, 1983, holding themselves
“long experience that written evidence is so much more certain jointly and severally liable to private respondent Philippine Bank
and accurate than that which rests in fleeting memory only, that of Communications, Cagayan de Oro City branch. The promissory
it would be unsafe, when parties have expressed the terms of note was due on May 5, 1983.
their contract in writing, to admit weaker evidence to control and
vary the stronger and to show that the parties intended a different Said due date expired without the promissors having paid their
contract from that expressed in the writing signed by them.” obligation. Consequently, on November 14, 1983 and on June 8,
Thus, for the parol evidence rule to apply, a written contract need 1984, private respondent sent petitioner telegrams demanding
not be in any particular form, or be signed by both parties. As a payment thereof.2 On December 11, 1984 private respondent also
general rule, bills, notes and other instruments of a similar sent by registered mail a final letter of demand to Rene C. Naybe.
nature are not subject to be varied or contradicted by parol or Since both obligors did not respond to the demands made, private
extrinsic evidence. respondent filed on January 24, 1986 a complaint for collection of
the sum of P50,000.00 against the three obligors.
ROMERO, J.:p
On November 25, 1986, the complaint was dismissed for failure of
This is a petition for review on certiorari of the decision of the the plaintiff to prosecute the case. However, on January 9, 1987,
Court of Appeals affirming that of the Regional Trial Court of the lower court reconsidered the dismissal order and required the
Misamis Oriental, Branch 18,1 which disposed of Civil Case No. sheriff to serve the summonses. On January 27, 1987, the lower
10507 for collection of a sum of money and damages, as follows: court dismissed the case against defendant Pantanosas as prayed
for by the private respondent herein. Meanwhile, only the
WHEREFORE, defendant BALDOMERO L. INCIONG, JR. is summons addressed to petitioner was served as the sheriff
adjudged solidarily liable and ordered to pay to the plaintiff learned that defendant Naybe had gone to Saudi Arabia.
Philippine Bank of Communications, Cagayan de Oro City, the

194
CASES ON EVIDENCE

In his answer, petitioner alleged that sometime in January 1983, witness stand, Pio Tio denied having participated in the alleged
he was approached by his friend, Rudy Campos, who told him business venture although he knew for a fact that the falcata logs
that he was a partner of Pio Tio, the branch manager of private operation was encouraged by the bank for its export potential.
respondent in Cagayan de Oro City, in the falcata logs operation
business. Campos also intimated to him that Rene C. Naybe was Petitioner appealed the said decision to the Court of Appeals
interested in the business and would contribute a chainsaw to which, in its decision of August 31, 1990, affirmed that of the
the venture. He added that, although Naybe had no money to buy lower court. His motion for reconsideration of the said decision
the equipment, Pio Tio had assured Naybe of the approval of a having been denied, he filed the instant petition for review on
loan he would make with private respondent. Campos then certiorari.
persuaded petitioner to act as a "co-maker" in the said loan.
Petitioner allegedly acceded but with the understanding that he On February 6, 1991, the Court denied the petition for failure of
would only be a co-maker for the loan of P50,000.00. petitioner to comply with the Rules of Court and paragraph 2 of
Circular
Petitioner alleged further that five (5) copies of a blank promissory No. 1-88, and to sufficiently show that respondent court had
note were brought to him by Campos at his office. He affixed his committed any reversible error in its questioned decision.4 His
signature thereto but in one copy, he indicated that he bound motion for the reconsideration of the denial of his petition was
himself only for the amount of P5,000.00. Thus, it was by likewise denied with finality in the Resolution of April 24, 1991.5
trickery, fraud and misrepresentation that he was made liable for Thereafter, petitioner filed a motion for leave to file a second
the amount of P50,000.00. motion for reconsideration which, in the Resolution of May 27,
1991, the Court denied. In the same Resolution, the Court
In the aforementioned decision of the lower court, it noted that ordered the entry of judgment in this case.6
the typewritten figure "-- 50,000 --" clearly appears directly below
the admitted signature of the petitioner in the promissory note. 3 Unfazed, petitioner filed a notion for leave to file a motion for
Hence, the latter's uncorroborated testimony on his limited clarification. In the latter motion, he asserted that he had
liability cannot prevail over the presumed regularity and fairness attached Registry Receipt No. 3268 to page 14 of the petition in
of the transaction, under Sec. 5 (q) of Rule 131. The lower court compliance with Circular No. 1-88. Thus, on August 7, 1991, the
added that it was "rather odd" for petitioner to have indicated in a Court granted his prayer that his petition be given due course
copy and not in the original, of the promissory note, his supposed and reinstated the same.7
obligation in the amount of P5,000.00 only. Finally, the lower
court held that, even granting that said limited amount had Nonetheless, we find the petition unmeritorious.
actually been agreed upon, the same would have been merely
collateral between him and Naybe and, therefore, not binding Annexed to the petition is a copy of an affidavit executed on May
upon the private respondent as creditor-bank. 3, 1988, or after the rendition of the decision of the lower court,
by Gregorio Pantanosas, Jr., an MTCC judge and petitioner's co-
The lower court also noted that petitioner was a holder of a maker in the promissory note. It supports petitioner's allegation
Bachelor of Laws degree and a labor consultant who was that they were induced to sign the promissory note on the belief
supposed to take due care of his concerns, and that, on the

195
CASES ON EVIDENCE

that it was only for P5,000.00, adding that it was Campos who When the terms of an agreement have been reduced to writing, it
caused the amount of the loan to be increased to P50,000.00. is considered as containing all the terms agreed upon and there
can be, between the parties and their successors in interest, no
The affidavit is clearly intended to buttress petitioner's contention evidence of such terms other than the contents of the written
in the instant petition that the Court of Appeals should have agreement.
declared the promissory note null and void on the following
grounds: (a) the promissory note was signed in the office of Judge Clearly, the rule does not specify that the written agreement be a
Pantanosas, outside the premises of the bank; (b) the loan was public document.
incurred for the purpose of buying a second-hand chainsaw
which cost only P5,000.00; (c) even a new chainsaw would cost What is required is that the agreement be in writing as the rule is
only P27,500.00; (d) the loan was not approved by the board or in fact founded on "long experience that written evidence is so
credit committee which was the practice, as it exceeded much more certain and accurate than that which rests in fleeting
P5,000.00; (e) the loan had no collateral; (f) petitioner and Judge memory only, that it would be unsafe, when parties have
Pantanosas were not present at the time the loan was released in expressed the terms of their contract in writing, to admit weaker
contravention of the bank practice, and (g) notices of default are evidence to control and vary the stronger and to show that the
sent simultaneously and separately but no notice was validly sent parties intended a different contract from that expressed in the
to him.8 Finally, petitioner contends that in signing the writing signed by them." 11 Thus, for the parol evidence rule to
promissory note, his consent was vitiated by fraud as, contrary to apply, a written contract need not be in any particular form, or be
their agreement that the loan was only for the amount of signed by both parties. 12 As a general rule, bills, notes and other
P5,000.00, the promissory note stated the amount of P50,000.00. instruments of a similar nature are not subject to be varied or
contradicted by parol or extrinsic evidence. 13
The above-stated points are clearly factual. Petitioner is to be
reminded of the basic rule that this Court is not a trier of facts. By alleging fraud in his answer, 14 petitioner was actually in the
Having lost the chance to fully ventilate his factual claims below, right direction towards proving that he and his co-makers agreed
petitioner may no longer be accorded the same opportunity in the to a loan of P5,000.00 only considering that, where a parol
absence of grave abuse of discretion on the part of the court contemporaneous agreement was the inducing and moving cause
below. Had he presented Judge Pantanosas affidavit before the of the written contract, it may be shown by parol evidence. 15
lower court, it would have strengthened his claim that the However, fraud must be established by clear and convincing
promissory note did not reflect the correct amount of the loan. evidence, mere preponderance of evidence, not even being
adequate. 16 Petitioner's attempt to prove fraud must, therefore,
Nor is there merit in petitioner's assertion that since the fail as it was evidenced only by his own uncorroborated and,
promissory note "is not a public deed with the formalities expectedly, self-serving testimony.
prescribed by law but . . . a mere commercial paper which does
not bear the signature of . . . attesting witnesses," parol evidence Petitioner also argues that the dismissal of the complaint against
may "overcome" the contents of the promissory note.9 The first Naybe, the principal debtor, and against Pantanosas, his co-
paragraph of the parol evidence rule 10 states: maker, constituted a release of his obligation, especially because
the dismissal of the case against Pantanosas was upon the

196
CASES ON EVIDENCE

motion of private respondent itself. He cites as basis for his

argument, Article 2080 of the Civil Code which provides that: A guarantor who binds himself in solidum with the principal
debtor under the provisions of the second paragraph does not
The guarantors, even though they be solidary, are released from become a solidary co-debtor to all intents and purposes. There is
their obligation whenever by some act of the creditor, they cannot a difference between a solidary co-debtor and a fiador in solidum
be subrogated to the rights, mortgages, and preferences of the (surety). The latter, outside of the liability he assumes to pay the
latter. debt before the property of the principal debtor has been
exhausted, retains all the other rights, actions and benefits which
It is to be noted, however, that petitioner signed the promissory pertain to him by reason of the fiansa; while a solidary co-debtor
note as a solidary co-maker and not as a guarantor. This is has no other rights than those bestowed upon him in Section 4,
patent even from the first sentence of the promissory note which Chapter 3, Title I, Book IV of the Civil Code. 18
states as follows:
Section 4, Chapter 3, Title I, Book IV of the Civil Code states the
Ninety one (91) days after date, for value received, I/we, JOINTLY law on joint and several obligations. Under Art. 1207 thereof,
and SEVERALLY promise to pay to the PHILIPPINE BANK OF when there are two or more debtors in one and the same
COMMUNICATIONS at its office in the City of Cagayan de Oro, obligation, the presumption is that the obligation is joint so that
Philippines the sum of FIFTY THOUSAND ONLY (P50,000.00) each of the debtors is liable only for a proportionate part of the
Pesos, Philippine Currency, together with interest . . . at the rate debt. There is a solidary liability only when the obligation
of SIXTEEN (16) per cent per annum until fully paid. expressly so states, when the law so provides or when the nature
of the obligation so requires. 19
A solidary or joint and several obligation is one in which each
debtor is liable for the entire obligation, and each creditor is Because the promissory note involved in this case expressly
entitled to demand the whole obligation. 17 on the other hand, states that the three signatories therein are jointly and severally
Article 2047 of the Civil Code states: liable, any one, some or all of them may be proceeded against for
the entire obligation. 20 The choice is left to the solidary creditor
By guaranty a person, called the guarantor, binds himself to the to determine against whom he will enforce collection. 21
creditor to fulfill the obligation of the principal debtor in case the Consequently, the dismissal of the case against Judge
latter should fail to do so. Pontanosas may not be deemed as having discharged petitioner
from liability as well. As regards Naybe, suffice it to say that the
If a person binds himself solidarily with the principal debtor, the court never acquired jurisdiction over him. Petitioner, therefore,
provisions of Section 4, Chapter 3, Title I of this Book shall be may only have recourse against his co-makers, as provided by
observed. In such a case the contract is called a suretyship. law.
(Emphasis supplied.)
WHEREFORE, the instant petition for review on certiorari is
While a guarantor may bind himself solidarily with the principal hereby DENIED and the questioned decision of the Court of
debtor, the liability of a guarantor is different from that of a Appeals is AFFIRMED. Costs against petitioner.
solidary debtor. Thus, Tolentino explains:

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SO ORDERED.

30. Eagleridge Dev. Corp v. Cameron Granville 3 Asset Mgnt,

Inc.

Same; Same; Parol Evidence Rule; The parol evidence rule does
not apply to petitioners who are not parties to the deed of
assignment and do not base a claim on it; Even assuming that
Rule 130, Section 9 is applicable, an exception to the rule under
the second paragraph is when the party puts in issue the validity

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of the written agreement.—The parol evidence rule does not apply patient; (d) between priest and penitent; and (e) public officers
to petitioners who are not parties to the deed of assignment and and public interest. Privileged communications under the rules of
do not base a claim on it. Hence, they cannot be prevented from evidence is premised on an accepted need to protect a trust
seeking evidence to determine the complete terms of the deed of relationship. It has not been shown that the parties to the deed of
assignment. Even assuming that Rule 130, Section 9 is assignment fall under any of the foregoing categories. This court
applicable, an exception to the rule under the second paragraph has previously cited other privileged matters such as the
is when the party puts in issue the validity of the written following: “(a) editors may not be compelled to disclose the source
agreement, as in the case a quo. Besides, what is forbidden under of published news; (b) voters may not be compelled to disclose for
the parol evidence rule is the presentation of oral or extrinsic whom they voted; (c) trade secrets; (d) information contained in
evidence, not those expressly referred to in the written agreement. tax census returns; . . . (d) bank deposits” (pursuant to the
“[D]ocuments can be read together when one refers to the other.” Secrecy of Bank Deposits Act); (e) national security matters and
By the express terms of the deed of assignment, it is clear that intelligence information; and (f) criminal matters. Nonetheless,
the deed of assignment was meant to be read in conjunction with the LSPA does not fall within any of these classes of information.
the LSPA. Moreover, the privilege is not absolute, and the court may compel
disclosure where it is indispensable for doing justice.
Remedial Law; Evidence; Documentary Evidence; Rule 132,
Section 17 of the Rules of Court allows a party to inquire into the LEONEN, J.:
whole of the writing or record when a part of it is given in
evidence by the other party.—Rule 132, Section 17 of the Rules of For resolution is respondent Cameron Granville 3 Asset
Court allows a party to inquire into the whole of the writing or Management, Inc. 's motion for reconsideration1 of our April 10,
record when a part of it is given in evidence by the other party. 2013 decision,2 which reversed and set aside the Court of
Since the deed of assignment was produced in court by Appeals' resolutions3 and ordered respondent to produce the
respondent and marked as one of its documentary exhibits, the Loan Sale and Purchase Agreement (LSPA) dated April 7, 2006,
LSPA which was made a part thereof by explicit reference and including its annexes and/or attachments, if any, in order that
which is necessary for its understanding may also be inquired petitioners may inspect or photocopy the same.
into by petitioners.
Petitioners Eagleridge Development Corporation, Marcelo N.
Same; Same; Privileged Communications; Privileged Naval, and Crispin I. Oben filed on June 7, 2013 their motion to
communications under the rules of evidence is premised on an ad.mit attached opposition.4 Subsequently, respondent filed its
accepted need to protect a trust relationship.—Respondent’s reply5 and petitioners their motion to admit attached rejoinder.6
contention that the LSPA is privileged and confidential is likewise
untenable. Indeed, Rule 27 contains the proviso that the The motion for reconsideration raises the following points:
documents sought to be produced and inspected must not be
privileged against disclosure. Rule 130, Section 24 describes the (1) The motion for production was filed out of time;7
types of privileged communication. These are communication
between or involving the following: (a) between husband and wife; (2) The production of the LSPA would violate the parol evidence
(b) between attorney and client; (c) between physician and rule; and8

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always a requisite [in assignment of credits, and] an assignee may

(3) The LSPA is a privileged and confidential document.9 maintain an action based on his title and it is immaterial whether
ornot he paid any consideration [therefor][.]"20
Respondent asserts that there was no "insistent refusal" on its
part to present the LSPA, but that petitioners filed their motion Respondent also contends that: (1) the production of the LSPA
for production way out of time, even beyond the protracted pre- will violate the parol evidence rule21 under Rule 130, Section 9 of
trial period from September 2005 to 2011.10 Hence, petitioners the Rules of Court; (2) the LSPA is a privileged/confidential bank
had no oneto blame but themselves when the trial court denied document;22 and (3) under the Special Purpose Vehicle Act, "the
their motion as it was filed only during the trial proper.11 only obligation of both the assignor (bank) and the assignee (the
SPV; respondent Cameron) is to give notice to the debtor
Respondent further submits that "Article 1634 [of the] Civil Code (Eagleridge, Naval,and Oben) that its account has been
had been inappropriately cited by [p]etitioners"12 inasmuch as it assigned/transferred to a special purpose vehicle (Sec. 12, R.A.
is Republic Act No. 9182 (Special Purpose Vehicle Act) that is 9182) [and] [i]t does not require of the special purpose vehicle or
applicable.13 Nonetheless, even assuming that Article 1634 is the bank to disclose all financial documents included in the
applicable, respondent argued that petitioners are: 1) still liable to assignment/sale/transfer[.]"23
pay the whole of petitioner Eagleridge Development Corporation’s
(EDC) loanobligation, i.e., ₱10,232,998.00 exclusive of interests Finally, respondent points out that the deed of assignment is a
and/or damages;14 and 2) seven (7) years late in extinguishing contested document. "Fair play would be violated if the LSPA is
petitioner EDC’s loan obligation because pursuant to Article produced without [p]etitioners acknowledging that respondent
1634, they should have exercised their right of extinguishment Cameron Granville 3 Asset Management, Inc. is the real party-in-
within 30 days from the substitution of Export and Industry Bank interest because petitioners . . . would [thereafter] use . . . the
or EIB (the original creditor) by respondent in December 2006.15 contents of a document (LSPA) to its benefit while at the same
According to respondent, the trial court order "granting the time"24 refuting the integrity of the deed and the legal personality
substitution constituted sufficient judicial demand as of respondent to sue petitioners.25
contemplated under Article 1634."16 Also, maintaining that the
LSPA is immaterial or irrelevant to the case, respondent contends For their part, petitioners counter that their motion for
that the "[o]rder of substitution settled the issue of [respondent’s] production was not filed out of time, and "[t]here is no
standing before the [c]ourt and its right to fill in the shoes of proscription, under Rule 27 or any provision of the Rules of
[EIB]."17 It argues that the production of the LSPA will neither Court, from filing motions for production, beyond the pre-trial."26
prevent respondent from pursuing its claim of 10,232,998.00,
exclusive of interests and penalties, from petitioner EDC, nor Further, assuming that there was a valid transfer of the loan
write off petitioner EDC’s liability to respondent.18 The primordial obligation of petitioner EDC, Article 1634 is applicable and,
issue of whether petitioners owe respondent a sum of money via therefore, petitioners must be informed of the actual transfer
the deed of assignment can allegedly "be readily resolved by price, which information may only be supplied by the LSPA.27
application of Civil Code provisions and/or applicable Petitioners argue that the substitution of respondent in the case a
jurisprudence and not by the production/inspection of the quowas "not sufficient ‘demand’as contemplated under Article
LSPA[.]"19 Respondent also argues that "a consideration is not 1634 of the Civil Code inasmuch asrespondent Cameron

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CASES ON EVIDENCE

failed . . . to inform petitioner EDC of the price it paid for the In their rejoinder, petitioners clarified that their consistent
[transfer of the] loan obligation,"28 which made it "impossible for position was always to assail the validity of the deed of
petitioners to reimburse what was paid for the acquisition of assignment; that alternatively, they invoked the application of
the . . . loan obligation [of EDC]."29 Additionally, petitioners Article 1634 should the court uphold the validity of the transfer of
contend that respondent was not a party to the deed of their alleged loan obligation; and that Rule 8, Section 2 of the
assignment, but Cameron Granville Asset Management (SPV- Rules of Court "permits parties to set forth alternative causes of
AMC), Inc., hence, "as [to] the actual parties to the Deed of action or defenses."38
Assignment are concerned, no such demand has yet been
made."30 We deny the motion for reconsideration.
Discovery mode of
Petitioners add that the amount of their liability to respondent is production/inspection of
one of the factual issues to be resolved as stated in the November document may be availed of
21, 2011 pretrial order of the Regional Trial Court, which makes even beyond pre-trial upon a
the LSPA clearly relevant and material to the disposition of the showing of good cause
case.31
The availment of a motion for production, as one of the modes of
Petitioners next argue that the parol evidence rule is not discovery, is not limited to the pre-trial stage. Rule 27 does not
applicable to them because they were not parties tothe deed of provide for any time frame within which the discovery mode of
assignment, and "they cannot be prevented from seeking evidence production or inspection of documents can be utilized. The rule
to determine the complete terms of the Deed of Assignment."32 only requires leave of court "upon due application and a showing
Besides, the deedof assignment made express reference to the of due cause."39 Rule 27, Section 1 of the 1997 Rules of Court,
LSPA, hence,the latter cannot be considered as extrinsic to it.33 states:

As to respondent’s invocation that the LSPA is SECTION 1. Motion for production or inspection order — Upon
privileged/confidential, petitioners counter that "it has not been motion of any party showing good cause therefor the court in
shown that the parties fall under . . . or, at the very least . . . which an action is pending may (a) order any party to produce
analogous to [any of the relationships enumerated in Rule 130, and permit the inspection and copying or photographing, by or on
Section 124] that would exempt [respondent] from disclosing behalf of the moving party, of any designated documents, papers,
information as to their transaction."34 books, accounts, letters, photographs, objects or tangible things,
not privileged, which constitute or contain evidence material to
In reply, respondent argues that "[petitioners] cannot accept and any matter involved in the action and which are in his
reject the same instrument at the same time."35 According to possession, custody or control[.] (Emphasis supplied)
respondent, by allegedly "uphold[ing] the truth of the contents as
well as the validity of [the] Deed of Assignment [in] seeking the In Producers Bank of the Philippines v. Court of Appeals,40 this
production of the [LSPA],"36 petitioners could no longer be court held that since the rules are silent asto the period within
allowed to impugn the validity of the same deed.37 which modes of discovery (in that case, written interrogatories)
may still be requested, it is necessary to determine: (1) the

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CASES ON EVIDENCE

purposeof discovery; (2) whether, based on the stage of the his debt was computed, and should he be dissatisfied with that
proceedings and evidence presented thus far, allowing it is proper statement, pursuant to Rule 27 of the Rules of Court, to allow
and would facilitate the disposition of the case; and (3) whether him to inspect and copy bank records supporting the items in
substantial rights of parties would be unduly prejudiced.41 This that statement.50 This was held to be "in consonance with the
court further held that "[t]he use of discovery is encouraged, for it rules on discovery and the avowed policy of the Rules of Court . . .
operates with desirable flexibility under the discretionary control to require the parties to lay their cards on the table to facilitate a
of the trial court."42 settlement of the case before the trial."51

In Dasmariñas Garments, Inc. v. Reyes,43 this court declared We have determined that the LSPA isrelevant and material to the
that depositions, as a mode ofdiscovery, "may be taken at any issue on the validity of the deed of assignment raised by
time after the institution of any action [as there is] no prohibition petitioners in the court a quo, and allowing its production and
against the taking of depositions after pre-trial."44 Thus: inspection by petitioners would be more in keeping with the
objectives of the discovery rules. We find no great practical
Dasmariñas also contends that the "taking of deposition is a difficulty, and respondent continuously fails to allege any, in
mode of pretrial discovery to be availed of before the action comes presenting the document for inspection and copying of
to trial." Not so. Depositions may be taken at any time after the petitioners. On the other hand, to deny petitioners the
institution of any action, whenever necessary or convenient. opportunity to inquire into the LSPA would bar their access to
There is no rule that limits deposition-taking only to the period of relevant evidence and impair their fundamental right to due
pre-trial or before it; no prohibition against the taking of process.52
depositions after pre-trial. Indeed, the law authorizes the taking
of depositions of witnesses before or after an appeal is taken from Article 1634 of the New Civil Code is applicable
the judgment of a Regional Trial Court "to perpetuate their
testimony for use in the event of further proceedings in the said Contrary to respondent’s stance, Article 1634 of the Civil Code on
court" (Rule 134, Rules of Court), and even during the process of assignment of credit in litigation is applicable.
execution of a final and executory judgment (East Asiatic Co. v.
C.I.R., 40 SCRA 521, 544).45 Section 13 of the Special Purpose Vehicle Act clearly provides that
in the transfer of the non-performing loans to a special purpose
"The modes of discovery are accorded a broad and liberal vehicle, "the provisions on subrogation and assignment of credits
treatment."46 The evident purpose of discovery procedures is "to under the New Civil Code shall apply." Thus:
enable the parties, consistent with recognized privileges, to obtain
the fullest possible knowledge of the issues and facts before civil Sec. 13. Nature of Transfer. – All sales or transfers of NPAs to an
trials"47 and, thus, facilitating an amicable settlement or SPV shall be in the nature of a true sale after proper notice in
expediting the trial of the case.48 accordance with the procedures asprovided for in Section 12:
Provided, That GFIs and GOCCs shall be subject to existing law
Technicalities in pleading should be avoided in order to obtain on the disposition of assets: Provided, further, That in the
substantial justice. In Mutuc v. Judge Agloro,49 this court transfer of the NPLs, the provisions on subrogation and
directed the bank to give Mutuc a complete statement asto how assignment of credits under the New Civil Code shall apply.

202
CASES ON EVIDENCE

the deed of assignment on the groundsthat it did not comply with

Furthermore, Section 19 of the Special Purpose Vehicle Act the mandatory requirements of the Special Purpose Vehicle
expressly states that redemption periods allowed to borrowers Act,53 and it referred to Cameron Granville Asset Management
under the banking law, the Rules of Court, and/or other laws are (SPV-AMC), Inc., as the assignee, and not respondent Cameron
applicable. Hence, the right of redemption allowed to a debtor Granville 3 Asset Management, Inc.54 The law requires that
under Article 1634 of the Civil Code is applicable to the case a payment should be made only "to the person in whose favor the
quo. obligation has been constituted, or his [or her] successor in
interest, or any person authorized to receive it."55 It was held
Accordingly, petitioners may extinguish their debt by paying the that payment made to a person who is not the creditor, his or her
assignee-special purpose vehicle the transfer price plus the cost successor-in-interest, or a person who is authorized to receive
of money up to the time of redemption and the judicial costs. payment, even through error or good faith, is not effective
payment which will bind the creditor or release the debtor from
Petitioners’ right to the obligation to pay.56 Therefore, it was important for petitioners
extinguish their debt has not to determine for sure the proper assignee of the EIB credit or who
yet lapsed to pay, in order to effectively extinguish their debt.

Petitioners’ right to extinguish their debt under Article 1634 on Moreover, even assuming that respondent is the proper assignee
assignment of credits has not yet lapsed. The pertinent provision of the EIB credit, petitioners could not exercise their right of
is reproduced here: extinguishment because they were not informed of the
consideration paid for the assignment.57
Art. 1634. When a credit or other incorporeal right in litigation is
sold, the debtor shall have a right to extinguish it by reimbursing Respondent must, pursuant to Article 1634 of the Civil Code,
the assignee for the price the latter paid therefor, the judicial disclose how much it paid to acquire the EIB credit, so that
costs incurred by him, and the interest on the price from the day petitioners could make the corresponding offer to pay, by way of
on which the same was paid. A credit or other incorporeal right redemption, the same amount in final settlement of their
shall be considered in litigation from the time the complaint obligation.
concerning the same is answered.
Respondent insists that the transfer price of the EIB credit is
The debtor may exercise his right within thirty days from the date ₱10,232,998.00 (the actual amount and value of the credit), and
the assignee demands payment from him. (Emphasis supplied) that petitioners should have paid the said amount within 30 days
from the December 8, 2006 order of the Regional Trial Court
Under the last paragraph of Article 1634, the debtor may approving its substitution of EIB.58 Petitioners believe otherwise,
extinguish his or her debt within 30 days from the date the and as the deed of assignment was silent on the matter, it
assignee demands payment. In this case, insofar as the actual becomes necessary to verify the amount of the consideration from
parties to the deed of assignment are concerned, no demand has the LSPA.
yet been made, and the 30-day period did not begin to run.
Indeed, petitioners assailed before the trial court the validity of

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CASES ON EVIDENCE

Assuming indeed that respondent acquired the EIB credit for a

lesser consideration, it cannot compel petitioners to pay or The term "agreement" includes wills.
answer for the entire original EIB credit, or more thanwhat it paid
for the assignment. We disagree.

Under the circumstances of this case, the 30-day period under The parol evidence rule does notapply to petitioners who are not
Article 1634 within which petitioners could exercise their right to parties to the deed of assignment and do not base a claim on it.59
extinguish their debt should begin to run only from the time they Hence, they cannot be prevented from seeking evidence to
were informed of the actual price paid by the assignee for the determine the complete terms of the deed of assignment.
transfer of their debt. Parol evidence rule is not applicable
Even assuming that Rule 130, Section 9 is applicable, an
Claiming further the impropriety of allowing the production of the exception to the rule under the second paragraph iswhen the
LSPA, respondent contends that the presentation of the document party puts in issue the validity of the written agreement, as in the
and its annexes would violate the parol evidence rule in Rule 130, case a quo.
Section 9:
Besides, what is forbidden under the parol evidence rule is the
SEC. 9. Evidence of written agreements.—When the terms of an presentation of oral or extrinsic evidence, not those expressly
agreement have been reduced to writing, it is considered as referred to in the written agreement. "[D]ocuments canbe read
containing all the terms agreed upon and there can be, between together when one refers to the other."60 By the express terms of
the parties and their successors in interest, no evidence of such the deed of assignment, it is clear that the deed of assignment
terms other than the contents of the written agreement. was meant to be read in conjunction with the LSPA.

However, a party may present evidence to modify, explain or add As we have stated in our decision, Rule 132, Section 1761 of the
to the terms of the written agreement ifhe puts in issue in his Rules of Court allows a party to inquire into the whole of the
pleading: writing or record when a part of it is given in evidence by the
other party. Since the deed of assignment was produced in court
(a) An intrinsic ambiguity, mistake or imperfection in the written by respondent and marked as one of its documentary exhibits,
agreement; the LSPA which was made a part thereof by explicit reference and
which is necessary for its understanding may also be inquired
(b) The failure of the written agreement to express the true intent into by petitioners.
and agreement of the parties thereto;
The LSPA is not privileged
(c) The validity of the written agreement; or and confidential in nature

(d) The existence of other terms agreed to by the parties or their Respondent’s contention that the LSPAis privileged and
successors in interest after the execution of the written confidential is likewise untenable.
agreement.

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CASES ON EVIDENCE

Indeed, Rule 27 contains the proviso that the documents sought because the same law in relation to Article 1634 allows the debtor
to be produced and inspected must not be privileged against to extinguish its debt by reimbursing the assignee-special
disclosure. Rule 130, Section 24 describes the types of privileged purpose vehicle of the actual price the latter paid for the
communication. These are communication between or involving assignment.
the following: (a) between husband and wife; (b) between attorney
and client; (c) between physician and patient; (d) between priest An assignment of a credit "produce[s] no effect as against third
and penitent; and (e) public officers and public interest. persons, unless it appears ina public instrument[.]"66 It strains
reason why the LSPA, which by law must be a publicinstrument
Privileged communications under the rules of evidence is to be binding against third persons such as petitioners-debtors, is
premised on an accepted need to protect a trust relationship. It privileged and confidential.
has not been shown that the parties to the deed of assignment fall
under any of the foregoing categories. Alternative defenses are
allowed under the Rules
This court has previously cited other privileged matters such as
the following: "(a) editors may not be compelled to disclose the Finally, respondent’s contention that petitioners cannot claim the
source of published news; (b) voters may not be compelled to validity and invalidity of the deed ofassignment at the same time
disclose for whom they voted; (c) trade secrets; (d) information is untenable.
contained in tax census returns; . . . (d) bank deposits"62
(pursuant to the Secrecy of Bank Deposits Act); (e) national The invocation by petitioners of Article 1634, which presupposes
security matters and intelligence information;63 and (f) criminal the validity of the deed of assignment orthe transfer of the EIB
matters.64 Nonetheless, the LSPA does not fall within any of credit to respondent, even if it would run counter to their defense
these classes of information. Moreover, the privilegeis not on the invalidity of the deed of assignment, is proper and
absolute, and the court may compel disclosure where it is sanctioned by Rule 8, Section 2 of the Rules of Court, which
indispensable for doing justice. reads:

At any rate, respondent failed to discharge the burden of showing SEC. 2. Alternative causes of action or defenses. — A party may
that the LSPA is a privileged document.1âwphi1 Respondent did set forth two or more statements of a claim or defense
not present any law or regulation that considers bank documents alternatively or hypothetically, either in one causeof action or
such as the LSPA as classified information. Its contention that the defense or in separate causes of action or defenses. When two or
Special Purpose Vehicle Act65 only requires the creditor-bank to more statements are made in the alternative and one of them if
give notice to the debtor of the transfer of his or her account to a made independently would be sufficient, the pleading is not made
special purpose vehicle, and that the assignee-special purpose insufficient by the insufficiency of one or more of the alternative
vehicle has no obligation to disclose other financial documents statements. (Emphasis supplied)
related to the sale, is untenable. The Special Purpose Vehicle Act
does not explicitly declare these financial documents as privileged All told, respondent failed to allege sufficient reasons for us to
matters. Further, as discussed, petitioners are not precluded from reconsider our decision. Verily, the production and inspection of
inquiring as to the true consideration of the assignment, precisely the LSPA and its annexes fulfill the discovery-procedures

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CASES ON EVIDENCE

objective of making the trial "less a game of blind man’s buff and
morea fair contest with the basic issues and facts disclosed to the
fullest practicable extent."67

WHEREFORE, the motion for reconsideration is DENIED WITH

FINALITY.

SO ORDERED.

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CASES ON EVIDENCE

31. SPS PARAS VS KIMWA CONSTRUCTION not been objected to by the adverse party; and second, that the
parol evidence sought to be presented serves to form the basis of
Remedial Law; Evidence; Parol Evidence Rule; Rule 130, Section 9 the conclusion proposed by the presenting party.—Provided that a
of the Revised Rules on Evidence provides for the Parol Evidence party puts in issue in its pleading any of the four (4) items
Rule, the rule on admissibility of documentary evidence when the enumerated in the second paragraph of Rule 130, Section 9, “a
terms of an agreement have been reduced into writing; Per this party may present evidence to modify, explain or add to the terms
rule, reduction to written form, regardless of the formalities of the agreement[.]” Raising any of these items as an issue in a
observed, “forbids any addition to, or contradiction of, the terms pleading such that it falls under the exception is not limited to
of a written agreement by testimony or other evidence purporting the party initiating an action.  In Philippine National Railways v.
to show that different terms were agreed upon by the parties, Court of First Instance of Albay, 83 SCRA 569 (1978), this court
varying the purport of the written contract.”—Rule 130, Section 9 noted that “if the defendant set up the affirmative defense that
of the Revised Rules on Evidence provides for the Parol Evidence the contract mentioned in the complaint does not express the
Rule, the rule on admissibility of documentary evidence when the true agreement of the parties, then parol evidence is admissible to
terms of an agreement have been reduced into writing: Section 9. prove the true agreement of the parties[.]”  Moreover, as with all
Evidence of written agreements.—When the terms of an possible objections to the admission of evidence, a party’s failure
agreement have been reduced to writing, it is considered as to timely object is deemed a waiver, and parol evidence may then
containing all the terms agreed upon and there can be, between be entertained. Apart from pleading these exceptions, it is equally
the parties and their successors-in-interest, no evidence of such imperative that the parol evidence sought to be introduced points
terms other than the contents of the written agreement. However, to the conclusion proposed by the party presenting it.  That is, it
a party may present evidence to modify, explain or add to the must be relevant, tending to “induce belief in [the] existence” of
terms of written agreement if he puts in issue in his pleading: (a) the flaw, true intent, or subsequent extraneous terms averred by
An intrinsic ambiguity, mistake or imperfection in the written the party seeking to introduce parol evidence. In sum, two (2)
agreement; (b) The failure of the written agreement to express the things must be established for parol evidence to be admitted:
true intent and agreement of the parties thereto; (c) The validity of first, that the existence of any of the four (4) exceptions has been
the written agreement; or (d) The existence of other terms agreed put in issue in a party’s pleading or has not been objected to by
to by the parties or their successors-in-interest after the the adverse party; and second, that the parol evidence sought to
execution of the written agreement. The term “agreement” be presented serves to form the basis of the conclusion proposed
includes wills. Per this rule, reduction to written form, regardless by the presenting party.
of the formalities observed, “forbids any addition to, or
contradiction of, the terms of a written agreement by testimony or Same; Same; Our evidentiary rules impel us to proceed from the
other evidence purporting to show that different terms were position (unless convincingly shown otherwise) that individuals
agreed upon by the parties, varying the purport of the written act as rational human beings, i.e., “[t]hat a person takes ordinary
contract.” care of his concerns.”—Our evidentiary rules impel us to proceed
from the position (unless convincingly shown otherwise) that
Same; Same; Same; Two (2) things must be established for parol individuals act as rational human beings, i.e., “[t]hat a person
evidence to be admitted: first, that the existence of any of the four takes ordinary care of his concerns[.]” This basic evidentiary
(4) exceptions has been put in issue in a party’s pleading or has stance, taken with the supporting evidence petitioners Spouses

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CASES ON EVIDENCE

Paras adduced, respondent Kimwa’s awareness of the conditions Lucia as supplier to Kimwa.12 Kimwa was to pick up the allotted
under which petitioner Lucia Paras was bound, and the aggregates at Lucia’s permitted area in Toledo City13 at ₱240.00
Agreement’s own text specifying exclusive allotment for per truckload.14
respondent Kimwa, supports petitioners Spouses Paras’ position
that respondent Kimwa was obliged to haul 40,000 cubic meters The entirety of this Agreement reads:
of aggregates on or before May 15, 1995. As it admittedly hauled
only 10,000 cubic meters, respondent Kimwa is liable for breach AGREEMENT FOR SUPPLY OF AGGREGATES
of contract in respect of the remaining 30,000 cubic meters.
KNOW ALL MEN BY THESE PRESENTS:
LEONEN, J.:
This Agreement made and entered into by and between:
This resolves the Petition for Review on Certiorari1 under Rule 45
of the 1997 Rules of Civil Procedure praying that the assailed LUCIA PARAS, of legal age, Filipino, married and resident of
Decision2 dated July 4, 2005 and Resolution3 dated February 9, Poblacion, Toledo City, Province of Cebu, hereinafter referred to
2006 of the Court of Appeals Special 20th Division in CA-G.R. CV as the SUPPLIER:
No. 74682 be reversed and set aside, and that the Decision4 of
Branch 55 of the Regional Trial Court, Mandaue City dated May -and-
16, 2001 in Civil Case No. MAN-2412 be reinstated.5
KIMWA CONSTRUCTION AND DEVELOPMENT CORP., a
The trial court's May 16, 2001 Decision ruled in favor of corporation duly organized and existing under the laws of the
petitioners Spouses Bonifacio and Lucia Paras (plaintiffs before Philippines with office address at Subangdaku, Mandaue City,
the Regional Trial Court) in their action for breach of contract hereinafter represented by its President MRS. CORAZON Y. LUA,
with damages against respondent Kimwa Construction and of legal age, Filipino and a resident of Subangdaku, Mandaue
Development Corporation (Kimwa).6 The assailed Decision of the City[,] hereinafter referred to as the CONTRACTOR;
Court of Appeals reversed and set aside the trial court’s May 16,
2001 Decision and dismissed Spouses Paras’ Complaint.7 The W I T N E S S E T H:
Court of Appeals’ assailed Resolution denied Spouses Paras’
Motion for Reconsideration.8 That the SUPPLIER is [sic] Special Permittee of (Rechanelling
Block # VI of Sapang Daco River along Barangay Ilihan) located at
Lucia Paras (Lucia) was a "concessionaire of a sand and gravel Toledo City under the terms and conditions:
permit at Kabulihan, Toledo City[.]"9 Kimwa is a "construction
firm that sells concrete aggregates to contractors and haulers 1. That the aggregates is [sic] to be picked-up by the
in . . . Cebu."10 CONTRACTOR at the SUPPLIER [sic] permitted area at the rate of
TWO HUNDRED FORTY (P 240.00) PESOS per truck load;
On December 6, 1994, Lucia and Kimwa entered into a contract
denominated "Agreement for Supply of Aggregates" (Agreement)
where 40,000 cubic meters of aggregates were "allotted"11 by

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2. That the volume allotted by the SUPPLIER to the enter into a contract with Kimwa "provided the forty thousand
CONTRACTOR is limited to 40,000 cu.m.; 3. That the said cubic meter[s] w[ould] be withdrawn or completely extracted and
Aggregates is [sic] for the exclusive use of the Contractor; hauled before 15 May 1995[.]"22 Kimwa then assured Lucia that
it would take only two to three months for it to completely haul
4. That the terms of payment is Fifteen (15) days after the receipt the 40,000 cubic meters of aggregates.23 Convinced of Kimwa’s
of billing; assurances, Lucia and Kimwa entered into the Agreement.24

5. That there is [sic] no modification, amendment, assignment or Spouses Paras added that within a few days, Kimwa was able to
transfer of this Agreement after acceptance shall be binding upon extract and haul 10,000 cubic meters of aggregates. However,
the SUPPLIER unless agreed to in writing by and between the after extracting and hauling this quantity, Kimwa allegedly
CONTRACTOR and SUPPLIER. transferred to the concession area of a certain Mrs. Remedios dela
Torre in violation of their Agreement. They then addressed
IN WITNESS WHEREOF, we have hereunto affixed our signatures demand letters to Kimwa. As these went unheeded, Spouses
this 6th day of December, 1994 at Mandaue City, Cebu, Paras filed their Complaint.25
Philippines.
In its Answer,26 Kimwa alleged that it never committed to obtain
LUCIA PARAS(sgd.) 40,000 cubic meters of aggregates from Lucia. It argued that the
Supplier CORAZON Y. LUA(sgd.) controversial quantity of 40,000 cubic meters represented only an
Contractor upper limit or the maximum quantity that it could haul.27 It
(Emphasis supplied) likewise claimed that it neither made any commitment to haul
40,000 cubic meters of aggregates before May 15, 1995 nor
Pursuant to the Agreement, Kimwa hauled 10,000 cubic meters of represented that the hauling of this quantity could be completed
aggregates. Sometime after this, however, Kimwa stopped hauling in two to three months.28 It denied that the hauling of 10,000
aggregates.16 cubic meters of aggregates was completed in a matter of days and
countered that it took weeks to do so. It also denied transferring
Claiming that in so doing, Kimwa violated the Agreement, Lucia, to the concession area of a certain Mrs. Remedios dela Torre.29
joined by her husband, Bonifacio, filed the Complaint17 for
breach of contract with damages that is now subject of this Kimwa asserted that the Agreement articulated the parties’ true
Petition. intent that 40,000 cubic meters was a maximum limit and that
May 15, 1995 was never set as a deadline. Invoking the Parol
In their Complaint, Spouses Paras alleged that sometime in Evidence Rule, it insisted that Spouses Paras were barred from
December 1994, Lucia was approached by Kimwa expressing its introducing evidence which would show that the parties had
interest to purchase gravel and sand from her.18 Kimwa allegedly agreed differently.30
asked that it be "assured"19 of 40,000 cubic meters worth of
aggregates.20 Lucia countered that her concession area was due On May 16, 2001, the Regional Trial Court rendered the Decision
to be rechanneled on May 15,1995, when her Special Permit in favor of Spouses Paras. The trial court noted that the
expires.21 Thus, she emphasized that she would be willing to Agreement stipulated that the allotted aggregates were set aside

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CASES ON EVIDENCE

exclusively for Kimwa. It reasoned that it was contrary to human We reverse the Decision of the Court of Appeals and reinstate that
experience for Kimwa to have entered into an Agreement with of the Regional Trial Court. Respondent Kimwa is liable for failing
Lucia without verifying the latter’s authority as a to haul the remainder of the quantity which it was obliged to
concessionaire.31 Considering that the Special Permit32 granted acquire from petitioner Lucia Paras.
to Lucia (petitioners’ Exhibit "A" before the trial court) clearly
indicated that her authority was good for only six (6) months from I
November 14, 1994, the trial court noted that Kimwa must have
been aware that the 40,000 cubic meters of aggregates allotted to Rule 130, Section 9 of the Revised Rules on Evidence provides for
it must necessarily be hauled by May 15, 1995. As it failed to do the Parol Evidence Rule, the rule on admissibility of documentary
so, it was liable to Spouses Paras for the total sum of evidence when the terms of an agreement have been reduced into
₱720,000.00, the value of the 30,000 cubic meters of aggregates writing:
that Kimwa did not haul, in addition to attorney’s fees and costs
of suit.33 Section 9. Evidence of written agreements. — When the terms of
an agreement have been reduced to writing, it is considered as
On appeal, the Court of Appeals reversed the Regional Trial containing all the terms agreed upon and there can be, between
Court’s Decision. It faulted the trial court for basing its findings the parties and their successors in interest, no evidence of such
on evidence presented which were supposedly in violation of the terms other than the contents of the written agreement.
Parol Evidence Rule. It noted that the Agreement was clear that
Kimwa was under no obligation to haul 40,000 cubic meters of However, a party may present evidence to modify, explain or add
aggregates by May 15, 1995.34 to the terms of written agreement if he puts in issue in his
pleading:
In a subsequent Resolution, the Court of Appeals denied
reconsideration to Spouses Paras.35 (a) An intrinsic ambiguity, mistake or imperfection in the written
agreement;
Hence, this Petition was filed.
(b) The failure of the written agreement to express the true intent
The issue for resolution is whether respondent Kimwa and agreement of the parties thereto;
Construction and Development Corporation is liable to petitioners
Spouses Paras for (admittedly) failing to haul 30,000 cubic meters (c) The validity of the written agreement; or
of aggregates from petitioner Lucia Paras’ permitted area by May
15, 1995. (d) The existence of other terms agreed to by the parties or their
successors in interest after the execution of the written
To resolve this, it is necessary to determine whether petitioners agreement.
Spouses Paras were able to establish that respondent Kimwa was
obliged to haul a total of 40,000 cubic meters of aggregates on or The term "agreement" includes wills.
before May 15, 1995.

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Per this rule, reduction to written form, regardless of the Court of First Instance of Albay,42 this court noted that "if the
formalities observed,36 "forbids any addition to, or contradiction defendant set up the affirmative defense that the contract
of, the terms of a written agreement by testimony or other mentioned in the complaint does not express the true agreement
evidence purporting to show that different terms were agreed of the parties, then parol evidence is admissible to prove the true
upon by the parties, varying the purport of the written agreement of the parties[.]"43 Moreover, as with all possible
contract."37 objections to the admission of evidence, a party’s failure to timely
object is deemed a waiver, and parol evidence may then be
This rule is animated by a perceived wisdom in deferring to the entertained.
contracting parties’ articulated intent. In choosing to reduce their
agreement into writing, they are deemed to have done so Apart from pleading these exceptions, it is equally imperative that
meticulously and carefully, employing specific — frequently, even the parol evidence sought to be introduced points to the
technical — language as are appropriate to their context. From an conclusion proposed by the party presenting it. That is, it must be
evidentiary standpoint, this is also because "oral testimony . . . relevant, tending to "induce belief in [the] existence"44 of the flaw,
coming from a party who has an interest in the outcome of the true intent, or subsequent extraneous terms averred by the party
case, depending exclusively on human memory, is not as reliable seeking to introduce parol evidence.
as written or documentary evidence. Spoken words could be
notoriously unreliable unlike a written contract which speaks of a In sum, two (2) things must be established for parol evidence to
uniform language."38 As illustrated in Abella v. Court of be admitted: first, that the existence of any of the four (4)
Appeals:39 exceptions has been put in issue in a party’s pleading or has not
been objected to by the adverse party; and second, that the parol
Without any doubt, oral testimony as to a certain fact, depending evidence sought to be presented serves to form the basis of the
as it does exclusively on human memory, is not as reliable as conclusion proposed by the presenting party.
written or documentary evidence.1âwphi1 "I would sooner trust
the smallest slip of paper for truth," said Judge Limpkin of II
Georgia, "than the strongest and most retentive memory ever
bestowed on mortal man." This is especially true in this case Here, the Court of Appeals found fault in the Regional Trial Court
where such oral testimony is given by . . . a party to the case who for basing its findings "on the basis of evidence presented in
has an interest in its outcome, and by . . . a witness who claimed violation of the parol evidence rule."45 It proceeded to fault
to have received a commission from the petitioner.40 petitioners Spouses Paras for showing "no proof . . . of
[respondent Kimwa’s] obligation."46 Then, it stated that "[t]he
This, however, is merely a general rule. Provided that a party puts stipulations in the agreement between the parties leave no room
in issue in its pleading any of the four(4) items enumerated in the for interpretation."47
second paragraph of Rule 130, Section 9, "a party may present
evidence to modify, explain or add to the terms of the The Court of Appeals is in serious error.
agreement[.]"41 Raising any of these items as an issue in a
pleading such that it falls under the exception is not limited to At the onset, two (2) flaws in the Court of Appeals’ reasoning must
the party initiating an action. In Philippine National Railways v. be emphasized. First, it is inconsistent to say, on one hand, that

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CASES ON EVIDENCE

the trial court erred on the basis of "evidence presented"48 (albeit 10. Convinced of the assurances, plaintiff-wife and the defendant
supposedly in violation of the Parol Evidence Rule),and, on the entered into a contract for the supply of the aggregates sometime
other, that petitioners Spouses Paras showed "no proof."49 on 6 December 1994 or thereabouts, at a cost of Two Hundred
Second, without even accounting for the exceptions provided by Forty (₱240.00) Pesos per truckload[.]50
Rule 130, Section 9, the Court of Appeals immediately concluded
that whatever evidence petitioners Spouses Paras presented was It is true that petitioners Spouses Paras’ Complaint does not
in violation of the Parol Evidence Rule. specifically state words and phrases such as "mistake,"
"imperfection," or "failure to express the true intent of the
Contrary to the Court of Appeal’s conclusion, petitioners Spouses parties." Nevertheless, it is evident that the crux of petitioners
Paras pleaded in the Complaint they filed before the trial court a Spouses Paras’ Complaint is their assertion that the Agreement
mistake or imperfection in the Agreement, as well as the "entered into . . . on 6 December 1994 or thereabouts"51 was
Agreement’s failure to express the true intent of the parties. founded on the parties’ supposed understanding that the quantity
Further, respondent Kimwa, through its Answer, also responded of aggregates allotted in favor of respondent Kimwa must be
to petitioners Spouses Paras’ pleading of these issues. This is, hauled by May 15, 1995, lest such hauling be rendered
thus, an exceptional case allowing admission of parol evidence. impossible by the rechanneling of petitioner Lucia Paras’
permitted area. This assertion is the very foundation of
Paragraphs 6 to 10 of petitioners’ Complaint read: petitioners’ having come to court for relief.

6. Sensing that the buyers-contractors and haulers alike could Proof of how petitioners Spouses Paras successfully pleaded and
easily consumed [sic] the deposits defendant proposed to the put this in issue in their Complaint is how respondent Kimwa felt
plaintiff-wife that it be assured of a forty thousand (40,000) cubic it necessary to respond to it or address it in its Answer.
meter [sic]; Paragraphs 2 to 5 of respondent Kimwa’s Answer read:

7. Plaintiff countered that the area is scheduled to be rechanneled 2. The allegation in paragraph six of the complaint is admitted
on 15 May 1995 and by that time she will be prohibited to sell the subject to the qualification that when defendant offered to buy
aggregates; aggregates from the concession of the plaintiffs, it simply asked
the plaintiff concessionaire if she could sell a sufficient supply of
8. She further told the defendant that she would be willing to aggregates to be used in defendant’s construction business and
enter into a contract provided the forty thousand cubic meter [sic] plaintiff concessionaire agreed to sell to the defendant aggregates
will be withdrawn or completely extracted and hauled before 15 from her concession up to a limit of 40,000 cubic meters at the
May 1995, the scheduled rechanneling; price of ₱240.00 per cubic meter.

9. Defendant assured her that it will take them only two to three 3. The allegations in paragraph seven and eight of the complaint
months to haul completely the desired volume as defendant has are vehemently denied by the defendant. The contract which was
all the trucks needed; entered into by the plaintiffs and the defendant provides only that
the former supply the latter the volume of 40,000.00 cubic meters
of aggregates. There is no truth to the allegation that the plaintiff

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wife entered into the contract under the condition that the
aggregates must be quarried and hauled by defendant completely III
before May 15, 1995, otherwise this would have been
unequivocally stipulated in the contract. Of course, this admission and availability for consideration is no
guarantee of how exactly the parol evidence adduced shall be
4. The allegation in paragraph nine of the complaint is hereby appreciated by a court. That is, they do not guarantee the
denied. The defendant never made any assurance to the plaintiff probative value, if any, that shall be attached to them. In any
wife that it will take only two to three months to haul the case, we find that petitioners have established that respondent
aforesaid volume of aggregates. Likewise, the contract is silent on Kimwa was obliged to haul 40,000 cubic meters of aggregates on
this aspect for in fact there is no definite time frame agreed upon or before May 15, 1995. Considering its admission that it did not
by the parties within which defendant is to quarry and haul haul 30,000 cubic meters of aggregates, respondent Kimwa is
aggregates from the concession of the plaintiffs. liable to petitioners.

5. The allegation in paragraph ten of the complaint is admitted The Pre-Trial Order issued by the Regional Trial Court in Civil
insofar as the execution of the contract is concerned. However, Case No. MAN-2412 attests to respondent Kimwa’s admission
the contract was executed, not by reason of the alleged that:
assurances of the defendant to the plaintiffs, as claimed by the
latter, but because of the intent and willingness of the plaintiffs to 6) Prior to or during the execution of the contract[,] the Plaintiffs
supply and sell aggregates to it. It was upon the instance of the furnished the Defendant all the documents and requisite papers
plaintiff that the defendant sign the subject contract to express in in connection with the contract, one of which was a copy of the
writing their agreement that the latter would haul aggregates from Plaintiff’s [sic] special permit indicating that the Plaintiff’s [sic]
plaintiffs’ concession up to such point in time that the maximum authority was only good for (6) months from November 14,
limit of 40,000 cubic meters would be quarried and hauled 1994.53
without a definite deadline being set. Moreover, the contract does
not obligate the defendant to consume the allotted volume of This Special Permit was, in turn, introduced by petitioners in
40,000 cubic meters.52 evidence as their Exhibit "A,"54 with its date of issuance and
effectivity being specifically identified as their Exhibit "A-1."55
Considering how the Agreement’s mistake, imperfection, or Relevant portions of this Special Permit read:
supposed failure to express the parties’ true intent was
successfully put in issue in petitioners Spouses Paras’ Complaint To All Whom It May Concern:
(and even responded to by respondent Kimwa in its Answer), this
case falls under the exceptions provided by Rule 130, Section 9 of PERMISSION is hereby granted to:
the Revised Rules on Evidence. Accordingly, the testimonial and
documentary parol evidence sought to be introduced by Name Address
petitioners Spouses Paras, which attest to these supposed flaws
and what they aver to have been the parties’ true intent, may be LUCIA PARAS Poblacion, Toledo City
admitted and considered.

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CASES ON EVIDENCE

to undertake the rechannelling of Block No. VI of Sapang Daco

River along Barangay Ilihan, Toledo City, subject to following Likewise, the condition that the Special Permit shall be valid for
terms and conditions: only six (6) months from November 14,1994 lends credence to
petitioners Spouses Paras’ assertion that, in entering into the
1. That the volume to be extracted from the area is approximately Agreement with respondent Kimwa, petitioner Lucia Paras did so
40,000 cubic meters; because of respondent Kimwa's promise that hauling can be
completed by May 15, 1995. Bound as she was by the Special
.... Permit, petitioner Lucia Paras needed to make it eminently clear
to any party she was transacting with that she could supply
This permit which is valid for six (6) months from the date hereof aggregates only up to May 15, 1995 and that the other party's
is revocable anytime upon violation of any of the foregoing hauling must be completed by May 15, 1995. She was merely
conditions or in the interest of public peace and order. acting with due diligence, for otherwise, any contract she would
enter into would be negated; any commitment she would make
Cebu Capitol, Cebu City, November 14, 1994.56 beyond May 15, 1995 would make her guilty of
misrepresentation, and any prospective income for her would be
Having been admittedly furnished a copy of this Special Permit, rendered illusory.
respondent Kimwa was well aware that a total of only about
40,000 cubic meters of aggregates may be extracted by petitioner Our evidentiary rules impel us to proceed from the position
Lucia from the permitted area, and that petitioner Lucia Paras’ (unless convincingly shown otherwise) that individuals act as
operations cannot extend beyond May 15, 1995, when the Special rational human beings, i.e, "[t]hat a person takes ordinary care of
Permit expires. his concerns[.]"58 This basic evidentiary stance, taken with the.
supporting evidence petitioners Spouses Paras adduced,
The Special Permit’s condition that a total of only about 40,000 respondent Kimwa's awareness of the conditions under which
cubic meters of aggregates may be extracted by petitioner Lucia petitioner Lucia Paras was bound, and the Agreement's own text
Paras from the permitted area lends credence to the position that specifying exclusive allotment for respondent Kimwa, supports
the aggregates "allotted" to respondent Kimwa was in petitioners Spouses Paras' position that respondent Kimwa was
consideration of its corresponding commitment to haul all 40,000 obliged to haul 40,000 cubic meters of aggregates on or before
cubic meters. This is so, especially in light of the Agreement’s own May 15, 1995. As it admittedly hauled only 10,000 cubic meters,
statement that "the said Aggregates is for the exclusive use of respondent Kimwa is liable for breach of contract in respect of the
[respondent Kimwa.]"57 By allotting the entire 40,000 cubic remaining 30,000 cubic meters.
meters, petitioner Lucia Paras bound her entire business to
respondent Kimwa. Rational human behavior dictates that she WHEREFORE, the Petition is GRANTED. The assailed Decision
must have done so with the corresponding assurances from it. It dated July 4, 2005 and Resolution dated February 9, 2006 of the
would have been irrational, if not ridiculous, of her to oblige Court of Appeals Special 20th Division in CA-G.R. CV No. 74682
herself to make this allotment without respondent Kimwa’s are REVERSED and SET ASIDE. The Decision of Branch 55 of the
concomitant undertaking that it would obtain the entire amount Regional Trial Court, Mandaue City dated May 16, 2001 in Civil
allotted. Case No. MAN-2412 is REINSTATED.

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CASES ON EVIDENCE

terms agreed to by the parties or their successors-in-interest after

A legal interest of 6% per annum shall likewise be imposed on the the execution of the written agreement.
total judgment award from the finality of this Decision until full
satisfaction. BRION, J.:

SO ORDERED. Pursuant to Rule 45 of the Rules of Court, we review the

decision1 and the resolution2 of the Court of Appeals (CA) in CA-
G.R. CR No. 29371 which denied the appeal of Nenita Carganillo
(petitioner). The CA affirmed, with modification as to penalty, the
judgment3 of the Regional Trial Court (RTC), Branch 30,
Cabanatuan City, convicting the petitioner of the crime of estafa,
32. CARGANILLO VS PEOPLE defined and penalized under Article 315, paragraph l(b) of the
Revised Penal Code, as amended.
Remedial Law; Evidence; Parol Evidence Rule; It is settled that
the agreement or contract between the parties is the formal THE CASE
expression of the parties’ rights, duties, and obligations and is the
best evidence of the parties’ intention.—It is settled that the On September 23, 1998, Teresita Lazaro, a rice trader in Rizal,
agreement or contract between the parties is the formal Nueva Ecija, gave the petitioner the amount of ₱132,000.00 for
expression of the parties’ rights, duties, and obligations and is the the purpose of buying palay. The petitioner, who was alleged tobe
best evidence of the parties’ intention. Thus, when the terms of an an "ahente" or agent in the buy-and-sell of palay, agreed to deliver
agreement have been reduced into writing, it is considered as the palayto the Lazaro Palay Buying Station on or before
containing all the terms agreed upon and there can be, between November 28, 1998. According to the "Kasunduan" signed by the
the parties and their successors-in-interest, no evidence of such petitioner, the parties agreed that for every kilo of palaybought
terms other than the contents of the written agreement. However, the petitioner shall earn a commission of twenty centavos (P0.20).
this rule, known as the Parol Evidence Rule, admits of exceptions. But if no palayis purchased and delivered on November 28, the
petitioner must return the ₱132,000.00 to Teresita within one (1)
Same; Same; Same; Section 9, Rule 130 of the Rules of Court week after November 28.
provides that a party to a written agreement may present evidence
to modify, explain or add to the terms of the agreement.—Section After failing to receive any palayor the ₱132,000.00 on November
9, Rule 130 of the Rules of Court provides that a party to a 28 and one (1) week thereafter, respectively, Teresita made oral
written agreement may present evidence to modify, explain or add and written demands to the petitioner for the return of the
to the terms of the agreement if he puts in issue in his pleading ₱132,000.00 but her demands were simply ignored. She thus filed
the follow ing: (a) An intrinsic ambiguity, mistake or imperfection an affidavit-complaint for estafa against the petitioner before the
in the written agreement; (b) The failure of the written agreement Fiscal’s Office. Thereafter, an Information4 for the crime of
to express the true intent and agreement of the parties thereto; (c) estafawas filed in court.
The validity of the written agreement; or (d) The existence of other

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CASES ON EVIDENCE

The petitioner pleaded not guilty tothe crime and denied that she to refute Teresita’s claim that she went to the petitioner’s house to
entered into a "principal-agent" agreement with, and received the ask for the palayand/or the return of the ₱132,000.00.11
₱132,000.00 from, Teresita. She alleged that she owedTeresita a
balance of ₱13,704.32 for the fertilizers and rice that she The CA, however, found error inthe RTC’s computation of the
purchased from the latter in 1995 and 1996,5 and that, in penalty and imposed upon the petitioner an indeterminate
November 1996, she was made to sign a blank "Kasunduan" that penalty of four (4) years and two (2) months of prision
reflected no written date and amount.6 She likewise denied correccional, as minimum, to eight (8) years of prision mayor, as
personally receiving any written demand letter from Teresita.7 maximum, plus one (1) year for each additional ₱10,000.00 (in
excess of ₱22,000.00), equivalent to eleven (11) years, or a total of
In a decision dated November 19, 2004, the RTC convicted the nineteen (19) years.12
petitioner of the crime of estafaand sentenced her to suffer,
applying the Indeterminate Sentence Law, imprisonment ranging The petitioner elevated her judgment of conviction to the Court by
from four (4) years and one (1) day of prision correccional as filing a petition for review on certiorari under Rule 45.
minimum to twenty (20) years of reclusion temporal as
maximum.8 Also, the RTC ordered the petitioner to indemnify THE PETITION
Teresita the sum of ₱132,000.00 representing the amount
embezzled and to pay the costs of suit.9 In her petition, the petitioner raisesthe sole issue of whether the
CA erred in affirming (with modification)the judgment of
On appeal, the CA affirmed the petitioner’s conviction.10 The CA conviction against her, despite the prosecution’s failure to prove
held that the prosecution properly established the elements of the her guilt of the crime of estafa beyond reasonable doubt.
crime of estafa. In debunking petitioner’s claim that her
agreement with Teresita was merely a money loan, the CA stated The petitioner maintains that she isnot engaged in the business
that: of buying and selling palayand that the "Kasunduan" between her
and Teresita does not contain their real agreement of a simple
In this case, the Kasunduan dated September 23, 1998, which- money loan. She argues that the prosecution failed to establish
accusedappellant admittedly signed, is clear inits tenor and the all the elements of estafa because she never received the
failure to comply therewith makes out a case for estafa. Accused- ₱132,000.00 from Teresita; that an element of the crime is that
appellant’s insistence that she signed the said Kasunduan in "the offender receives the money, or goods or other personal
blank is belied by her admission of "the existence or authenticity property in trust, or on commission, or for administration, or
of the documentary exhibits x x x" during the prosecution’s under any other obligations involving the duty to deliver, or to
formal offer of evidence and her own testimony x x x. return, the same."

Further, the CA ruled as immaterial the petitioner’s defense that THE COURT’S RULING
she did not personally receive a writtenletter of demand from
Teresita. The CA held that even a verbal query as tothe We deny the present petition. The CA did not commit any
whereabouts of the money suspected to be misappropriated reversible error in its decision of September 10, 2007.
isalready tantamount to a demand, and that the petitioner failed

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CASES ON EVIDENCE

Under Article 315, paragraph 1(b) of the Revised Penal Code, as when the terms of an agreement have been reduced into writing,
amended, the offense of estafacommitted with abuse of confidence it is considered as containing all the terms agreed upon and there
requires the following elements: can be, between the parties and their successors in interest, no
evidence of such terms other than the contents of the written
(a) that money, goods or other personal property is received by the agreement.14 However, this rule, known as the Parol Evidence
offender in trust or on commission, orfor administration, or under Rule, admits of exceptions.
any other obligation involving the duty to make delivery of or to
return the same[;] Section 9, Rule 130 of the Rules of Court provides that a party to
a written agreement may present evidence to modify, explain or
(b) that there be misappropriation or conversion of such money or add to the terms of the agreement if he puts in issue in his
property by the offender, or denial on his part of such receipt[;] pleading the following:

(c) that such misappropriation or conversion or denial is to the (a) An intrinsic ambiguity, mistake or imperfection in the written
prejudice of another; and agreement;

(d) there is demand by the offended party to the offender.13 (b) The failure of the written agreement to express the true intent
and agreement of the parties thereto;
We find that all the elements of estafa are present in this case:
that the petitioner received in trust the amount of ₱132,000.00 (c) The validity of the written agreement; or
from Teresita for the purpose of buying palayand misappropriated
it when she failed to return the said amount to Teresita upon (d) The existence of other terms agreed to by the parties or their
demand. successors in interest after the execution of the written
agreement.
As the CA and the RTC did, we find worthy of credit and belief the
"Kasunduan" presented in evidence by the prosecution that was xxxx
admittedly signed by the petitioner and which contained the
terms of agreement between her and Teresita. This document In this case, the petitioner alleges that the subject "Kasunduan"
clearly stated that the petitioner received in trust the amount of failed to express the real agreement between her and Teresita;
₱132,000.00 from Teresita for the purpose of buying palaywith that theirs was a plain and simple loan agreement and not that of
the corresponding obligationsto (1) deliver the palay to the Lazaro a principal-agent relationship in the buy-and-sell of palay. The
Palay Buying Station on or before November 28, 1998, and (2) documentary and testimonial evidence presented by the
return the ₱132,000.00 to Teresita one week after November 28 in petitioner, however, fail to support her claims.
the event that the petitioner failed to make palay purchases.
The RTC found that the receipts presented by the petitioner to
It is settled that the agreement or contract between the parties is prove her loan obligation with Teresitawere vague, undated and
the formal expression of the parties’ rights, duties, and unsigned.15 Also, the RTC observed that the witnesses who
obligations and is the best evidence of the parties’ intention.Thus, testified that they saw the petitioner sign the "Kasunduan" were

217
CASES ON EVIDENCE

not even certain of the real transaction between the petitioner and within prisión correccional minimum and medium (i.e., from 6
Teresita.16 These findings of fact and evidence, which were months and 1 day to 4 years and 2 months). xxx
affirmed by the CA, are accorded respect and finality by this
Court. Where the factual findings of the trial court are affirmed in On the other hand, the maximum term is taken from the
toto by the Court of Appeals, there is great reason not to disturb prescribed penalty of prisión correccional maximum to prisión
these findings and to regard them not reviewable by this Court.17 mayor minimum in its maximum period, adding 1 year of
imprisonment for every ₱10,000.00 in excess of ₱22,000.00,
Also, we cannot sustain the petitioner’s claim that she had been provided that the total penalty shall not exceed 20 years. xxx To
the victim of a fraud becauseTeresita deceived her into signing a compute the maximum period of the prescribed penalty, prisión
blank document; that she signed the "Kasunduan," even if it had correccional maximum to prisión mayor minimum should be
no date and amount written on it, because Teresita led her to divided into three equal portions oftime each of which portion
believe that the document would be used merely for show shall be deemed to form one period in accordance with Article 65
purposes with the bank.18 of the RPC. Following this procedure,the maximum period of
prisión correccional maximum to prisión mayor minimum is from
For fraud to vitiate consent, the deception employed must be the 6 years, 8 months and 21 days to 8 years. The incremental
causal (dolo causante) inducement to the making of the penalty, when proper, shall thus be added to anywhere from6
contract,19 and must be serious in character.20 It must be years, 8 months and 21 days to 8 years, at the discretion of the
sufficient to impress or lead an ordinarily prudent person into court.
error, taking into account the circumstances of each case.21
In computing the incremental penalty, the amount defrauded
In this case, we find no vitiated consent on the part of the shall be subtracted by ₱22,000.00, and the difference shall be
petitioner. In her Memorandum22 to this Court, she narrated divided by ₱10,000.00. Any fraction of a year shall be discarded
that after she signed the "Kasunduan," Teresita subsequently as was done starting with the case of People v. Pabalan in
made her execute a deed of sale over her property, which deed consonance with the settled rule that penal laws shall be
she refused to sign.23 This statement negates the petitioner’s construed liberally in favor of the accused. xxx"25
self-serving allegation that she was tricked by Teresita into
signing a blank "Kasunduan," as she was fully aware of the In the recent case of Lito Corpuz v. People of the Philippines,26
possible implications of the act of signing a document. we recognized the "perceived injustice" brought about by the
range of penalties that the courts continue to impose on crimes
We affirm the correctness of the penalty imposed by the CA, as it against property, such as estafa, committed today based on the
is fully in accordance with the law.1âwphi1 We explained in amount of damage measured by the value of money eight years
People v. Temporada24 that: ago in 1932. This Court, however, cannot modify these range of
penalties in our decisions, as such action would be an
"The prescribed penalty for estafaunder Article 315, par. 2(d) of impermissible encroachment upon the power of the legislative
the RPC, when the amount defrauded exceeds ₱22,000.00, is branch of government and would constitute proscribed judicial
prisión correccional maximum to prisión mayor minimum. The legislation.
minimum term is taken from the penalty next lower or anywhere

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CASES ON EVIDENCE

WHEREFORE, premises considered, we DENY the petition for agreement of the parties thereto in its Complaint. There was
lack of merit. We AFFIRM the decision dated September 10, 2007 therefore no error on the part of the appellate court when it
and the resolution dated March 18, 2008 of the Court of Appeals affirmed the RTC’s Order disallowing the recall of Tubianosa to
in CA-G.R. CR No. 29371, finding petitioner Nenita Carganillo the witness stand, for such disallowance is in accord with the rule
GUILTY beyond reasonable doubt of estafa penalized under that when the terms of an agreement have been reduced to
Article 315, paragraph l(b) of the Revised Penal Code, as writing, it is considered as containing all the terms agreed upon
amended. and there can be, between the parties and their successors-in-
interest, no evidence of such other terms other than the contents
SO ORDERED. of the written agreement.

KAPUNAN, J.:

Before this Court is a petition for review on certiorari under Rule

45 of the 1997 Rules of Civil Procedure, assailing the Decision of
the Court of Appeals, Sixth Division, dated July 30, 1999 in
CA-G.R. S.P. No. 297491 which dismissed petitioner Pilipinas
Bank's petition for certiorari,2 and the Resolution, dated
33. PILIPINAS BANK VS CA September 17, 19993 denying petitioner's Urgent Motion for
Extension of Time to file Motion for Reconsideration,
Remedial Law; Parol Evidence; For parol evidence to be Manifestation and Motion to Admit Motion for Reconsideration.
admissible to vary the terms of the written agreement, the
mistake or imperfection thereof or its failure to express the true The facts of the case are as follows:
agreement of the parties should be put in issue by the pleadings.
—Section 9, Rule 130 of the Revised Rules of Court expressly On January 8, 1995, petitioner obtained from private respondent
requires that for parol evidence to be admissible to vary the terms Meridian Assurance Corporation a Money Securities and Payroll
of the written agreement, the mistake or imperfection thereof or Comprehensive Policy which was effective from January 13, 1985
its failure to express the true agreement of the parties should be to January 13, 1986. On November 25, 1985, at about 9:15 a.m.,
put in issue by the pleadings. while the policy was in full force and effect, petitioner's armored
vehicle bearing Plate No. NBT 379 which was on its way to deliver
Same; Same; When the terms of an agreement have been reduced the payroll withdrawal of its client Luzon Development Bank
to writing, it is considered as containing all the terms agreed ACLEM Paper Mills, was robbed by two armed men wearing police
upon and there can be, between the parties and their successors- uniforms along Magsaysay Road, San Antonio, San Pedro,
in-interest, no evidence of such other terms other than the Laguna. Petitioner's driver, authorized teller and two private
contents of the written agreement.—As correctly noted by the armed guards were on board the armored vehicle when the same
appellate court, petitioner failed to raise the issue of an intrinsic was robbed. The loss suffered by petitioner as a result of the heist
ambiguity, mistake or imperfection in the terms of the Policy, or amounted to P545,301.40.
of the failure of said contract to express the true intent and

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CASES ON EVIDENCE

Petitioner filed a formal notice of claim under its insurance policy After the case was remanded to the RTC and the latter set the
with private respondent on December 3, 1985, invoking Section II case for pre-trial, petitioner filed its Pre-Trial Brief, stating among
of the Policy which states: others, that it would present as one of its witnesses Mr. Cesar R.
Tubianosa to testify on the existence and due execution of the
Section II-MONEY AND SECURITIES OUTSIDE PREMISES insurance policy, particularly on the negotiations that were held
prior to the execution thereof, including negotiations that led to
The Company will subject to the Limits of this Section as the attachment warranties, to prove that the loss subject of
hereinafter provided indemnify the insured against loss by any petitionerss claim is covered by the Policy. Petitioner identified the
cause whatsoever occuring (sic) outside the premises of Money issues of the case as follows:
and Securities in the personal charge of a Messenger in transit on
a Money Route x x x.4 1. Whether or not the loss due to the hold-up/robbery is covered
by the Insurance Policy;
and the warranty/rider attached to the Policy which provides
that- 2. In the affirmative, whether or not, defendant is liable to
plaintiff for said loss, inclusive of other damages prayed for in the
WARRANTED that in respect of PILIPINAS BANK Head Office and Complaint.
all its branches, pick-up and/or deposits and withdrawals
without the use of armored car, company car, or official's car On September 18, 1991, when petitioner was about to present
shall be covered by this policy. x x x5 Mr. Tubianosa to testify, private respondent objected and argued
that said witness testimony regarding the negotiations on the
Private respondent denied petitioner's claim and averred that the terms and conditions of the policy would be violative of the best
insurance does not cover the deliveries of the withdrawals to evidence rule. However, private respondents objection was
petitioner's clients. overruled and Tubianosa was allowed to take the stand. Private
respondent again objected to the questions regarding the
Petitioner thereafter filed a complaint against private respondent negotiations on the terms and conditions on the policy, and the
with the Regional Trial Court of Manila. Private respondent filed a trial court sustained the objection in part and overruled it in part
motion to dismiss which was later granted by the RTC. Petitioner by allowing petitioner to adduce evidence pertaining to the
then moved to reconsider the trial court's order, but the same was negotiations other than what appears in the insurance policy.
denied. Tubianosas testimony was completed on said date.

Aggrieved, petitioner filed a petition for certiorari with the Court of On June 18, 1992, petitioner filed a Motion to Recall Witness,
Appeals assailing the RTC's order dismissing the complaint.6 The praying that it be allowed to recall Tubianosa to testify on the
appellate court granted the petition and remanded the case to the negotiations pertaining to the terms and conditions of the policy
RTC for further proceedings. Private respondent filed with this before its issuance to determine the intention of the parties
Court a petition for review of the appellate court's decision, but regarding the said terms and conditions. Private respondent
the same was dismissed in a Resolution dated July 5, 1989. objected thereto, on the ground that the same would violate the
parol evidence rule.

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CASES ON EVIDENCE

its failure to express the true agreement of the parties should be

The RTC issued an Order dated July 24, 1999, denying put in issue by the pleadings.7 1âwphi1
petitioners motion to recall Tubianosa to the witness stand, ruling
that the same would violate the parol evidence rule. Petitioners As correctly noted by the appellate court, petitioner failed to raise
motion for reconsideration was also denied by the lower court. the issue of an intrinsic ambiguity, mistake or imperfection in the
terms of the Policy, or of the failure of said contract to express the
On December 21, 1992, petitioner filed a petition for certiorari true intent and agreement of the parties thereto in its Complaint.
with the Court of Appeals assailing the aforementioned Orders of There was therefore no error on the part of the appellate court
the RTC. In its Decision dated July 30, 1999, the appellate court when it affirmed the RTCs Order disallowing the recall of
dismissed the petition and held that there was no grave abuse of Tubianosa to the witness stand, for such disallowance is in
discretion on the part of respondent judge. It held that there is no accord with the rule that when the terms of an agreement have
ambiguity in the provisions of the Policy which would necessitate been reduced to writing, it is considered as containing all the
the presentation of extrinsic evidence to clarify the meaning terms agreed upon and there can be, between the parties and
thereof. The Court of Appeals also stated that petitioner failed to their successors-in-interest, no evidence of such other terms other
set forth in its Complaint a specific allegation that there is an than the contents of the written agreement.8
intrinsic ambiguity in the insurance policy which would warrant
the presentation of further evidence to clarify the intent of the The rationale behind the foregoing rule was explained in Ortanez
contracting parties. vs. Court of Appeals,9 where we stated:

Hence, the present petition. The parol evidence herein introduced is inadmissible. First,
private respondents oral testimony on the alleged conditions,
We find no cogent reason to disturb the findings of the Court of coming from a party who has an interest in the outcome of the
Appeals. case, depending exclusively on human memory, is not as reliable
as written or documentary evidence. Spoken words could be
Petitioners Complaint merely alleged that under the provisions of notoriously undesirable unlike a written contract which speaks of
the Policy, it was entitled to recover from private respondent the a uniform language. Thus, under the general rule in Section 9 of
amount it lost during the heist. It did not allege therein that the Rule 130 of the Rules of Court, when the terms of an agreement
Policys terms were ambiguous or failed to express the true were reduced to writing, as in this case, it is deemed to contain all
agreement between itself and private respondent. Such being the the terms agreed upon and no evidence of such terms can be
case, petitioner has no right to insist that it be allowed to present admitted other than the contents thereof. xxx.10
Tubianosas testimony to shed light on the alleged true agreement
of the parties, notwithstanding its statement in its Pre-Trial Brief WHEREFORE, the instant petition is hereby DENIED. The
that it was presenting said witness for that purpose. Decision of the Court of Appeals is hereby AFFIRMED.

Section 9, Rule 130 of the Revised Rules of Court expressly SO ORDERED.

requires that for parol evidence to be admissible to vary the terms
of the written agreement, the mistake or imperfection thereof or

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CASES ON EVIDENCE

GARCIA, J.:

Under consideration is this appeal by way of a petition for review

on certiorari under Rule 45 of the Rules of Court to nullify and set
aside the following issuances of the Court of Appeals in CA-G.R.
CV No. 45488, to wit:

1. Decision dated 15 October 1999,1 affirming an earlier decision

of the Regional Trial Court at Olongapo City in a suit for
annulment, redemption and damages with prayer for preliminary
injunction and/or temporary restraining order, thereat
commenced by the herein private respondent against the
petitioners; and

2. Resolution dated 10 April 2000,2 denying petitioners’ motion

for reconsideration.

The case is cast against the following factual backdrop:

34. MADRIGAL VS CA
Private respondent Jose Mallari and his wife Fermina Mallari are
ales; Mortgages; Parol Evidence; Even if the document appears to the owners of a 340-square meter residential lot with a 2-storey
be a sale, parol evidence may be resorted to if the same does not residential house erected thereon, situated at Olongapo City. The
express the true intent of the parties.—There is the ruling of this couple had ten (10) children, five (5) of whom are staying with
Court in Lustan vs. CA to the effect that even if the document them in the same house while the other five (5) are either residing
appears to be a sale, parol evidence may be resorted to if the abroad or elsewhere in the Philippines.
same does not express the true intent of the parties. In the very
words of Lustan: “Even when a document appears on its face to In need of money for his wife’s planned travel to the United
be a sale, the owner of the property may prove that the contract is States, Jose thought of mortgaging the above property with a
really a loan with mortgage by raising as an issue the fact that bank. However, his son Virgilio Mallari who is residing with his
the document does not express the true intent of the parties. In own family somewhere in San Ildefonso, Bulacan convinced Jose
this case, parol evidence then becomes competent and admissible not to proceed with the intended mortgage and to instead assign
to prove that the instrument was in truth and in fact given merely to him a portion of the same property, assuring his father that the
as a security for the repayment of a loan. And upon proof of the latter could continue in occupancy of the property and that he
truth of such allegations, the court will enforce the agreement or will allow his sister Elizabeth who operates a store thereat to
understanding in consonance with the true intent of the parties continue with the same. Virgilio told his father, however, that he
at the time of the execution of the contract.” will occupy one of the rooms in the house in case he goes to

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CASES ON EVIDENCE

Olongapo City on vacation and that he will renovate the other with prayer for preliminary injunction/temporary restraining
room and reserve it for his mother when she comes back from the order in this case. In his complaint, docketed in the same court
States. Virgilio assured his father that he will not dispose of the as Civil Case No. 481-0-88 and raffled to Branch 72 thereof,
property without his father’s consent and that the latter could plaintiff Jose Mallari prayed that the Deed of Absolute Sale
redeem the said property any time he acquires money. executed by him and his wife Fermina on 22 October 1987 in
favor of their son Virgilio Mallari be declared null and void, or, in
And so, finding no reason to doubt Virgilio’s words, Jose did not the alternative, that he be allowed to redeem the subject property
anymore proceed with his original idea of mortgaging the property at a reasonable price. He likewise prayed the court for a writ of
with a bank. Instead, on 22 October 1987, he and his wife preliminary injunction and/or to issue ex parte a temporary
Fermina executed a document denominated as "Deed of Absolute restraining order enjoining defendants Virgilio Mallari and
Sale", whereunder the couple appeared to have conveyed to their Edenbert Madrigal from entering, demolishing or introducing
son Virgilio Mallari the house and lot in question for a improvements on the subject properties, plus an award of actual
consideration of ₱50,000.00 although the property easily and moral damages and attorney’s fees.
commands much more at that time. Worse, the deed of
conveyance described the properties sold as a one-storey After due proceedings, the trial court, in a decision dated 29
residential house and the 135-square meter lot whereon it stands September 1993,3 rendered judgment for plaintiff Jose Mallari by
even as the subject properties actually consist of a 2-storey ordering defendant Edenbert Madrigal to allow the former to
residential house sitting on a 340-square meter parcel of land. redeem the subject property based on the same amount it was
sold to him by his co-defendant Virgilio Mallari, and for the two
Things turned for the worse to the unsuspecting Jose Mallari (2) defendants jointly and severally to pay plaintiff Jose Mallari
when, without his knowledge, his son Virgilio, via a document moral and exemplary damages, attorney’s fees and the cost of
bearing date 25 June 1988 and entitled "Kasulatan ng Bilihang suit. More specifically, the trial court’s decision dispositively
Tuluyan", sold the same property for the same amount of reads:
₱50,000.00 to Edenbert Madrigal, a longtime neighbor of the
Mallaris in the area. "PREMISES CONSIDERED, this Court finds and so holds that
since plaintiff has sufficiently established preponderance of
True enough, sometime thereafter, to Jose’s great shock, he was evidence against the defendants, judgment is hereby rendered
demanded by Edenbert Madrigal to vacate the subject property. It ordering defendant Edenbert Madrigal to allow plaintiff to redeem
was then that Jose came to know for the first time of the sale of the subject property based on the consideration of sale marked as
his property by his son Virgilio in favor of Edenbert Madrigal thru Exhibit ‘B’; and for defendants jointly and severally to pay plaintiff
the aforementioned June 25, 1988 "Kasulatan ng Bilihang (1) moral damages in the sum of ₱15,000.00; (2) exemplary
Tuluyan". damages of ₱5,000.00; (3) ₱10,000.00 as attorney’s fees; and (4)
to pay the cost of suit.
It was against the foregoing backdrop of events when, on 7
September 1988, in the Regional Trial Court at Olongapo City, All claims of defendants are denied for lack of merit.
Jose Mallari filed against his son Virgilio Mallari and Edenbert
Madrigal the complaint for annulment, redemption and damages SO ORDERED."

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CASES ON EVIDENCE

WHETHER OR NOT THE COURT OF APPEALS ERRED IN

Obviously dissatisfied, both defendants went on appeal to the AFFIRMING THE TRIAL COURT’S DECISION AWARDING MORAL,
Court of Appeals whereat their recourse was docketed as CA-G.R. EXEMPLARY DAMAGES AND ATTORNEY’S FEES IN FAVOR OF
CV No. 45488. PRIVATE RESPONDENT"

As stated at threshold hereof, the Court of Appeals, in a decision We DENY.

dated 15 October 1999,4 affirmed en toto the appealed decision of
the trial court, thus: Petitioners fault the two (2) courts below for construing the Deed
of Absolute Sale executed by private respondent Jose Mallari and
WHEREFORE, finding that the lower court did not err in issuing his wife Fermina Mallari in favor of their son Virgilio Mallari as an
the assailed Decision, this Court hereby AFFIRMS the same in its equitable mortgage and not as an outright sale as the document
entirety. itself proclaims.

SO ORDERED. We rule and so hold that both courts correctly construed the
aforementioned Deed of Absolute Sale as an equitable mortgage
In time, appellants Virgilio Mallari and Edenbert Madrigal moved and not a sale, as it purports to be. As aptly pointed out by the
for a reconsideration but their motion was denied by the appellate Court of Appeals in its assailed decision of 15 October 1999, to
court in its Resolution of 10 April 2000.5 which we are in full accord:

Hence, their present recourse, submitting for our consideration "xxx. Evidence clearly shows that there was indeed no intent to
the following issues: sell the subject property. Rather, what transpired between the
parties, who were father and son, was only a mortgage involving
"I ₱50,000.00 over a portion of a lot with a house in Olongapo City.
Circumstances surrounding the transaction between [respondent
WHETHER OR NOT THE COURT OF APPEALS ERRED IN Jose Mallari] and [petitioner] Virgilio Mallari pointed only to one
RULING THAT THE QUESTIONED DEED OF SALE IS A thing, that [respondent Jose Mallari] was in need of money to
MORTGAGE finance the US trip of his wife and he planned to mortgage the
subject property with a bank but he was prevailed by his son,
II herein [petitioner] Virgilio Mallari, not to proceed with his plan
and he gave a tempting offer to his father which the latter cannot
WHETHER OR NOT THE COURT OF APPEALS ERRED IN NOT refuse. In dire need of money, coupled with the fact that the one
RULING THAT PETITIONER EDENBERT MADRIGAL WAS A who offered help was his son who agreed to all the conditions
BUYER ON (sic) GOOD FAITH such as, the property will not be disposed without the consent of
[respondent]; petitioner [Virgilio Mallari]will renovate a room
III which will be used by his mother upon her return from the US;
[petitioner Virgilio Mallari] will allow his sister to continue using a
portion of the property as a store; one room will be for [petitioner

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CASES ON EVIDENCE

Virgilio Mallari’s] use while on vacation; and [respondent Jose with mortgage by raising as an issue the fact that the document
Mallari] would redeem the property as soon as his finances will does not express the true intent of the parties. In this case, parol
improve and for [petitioner Virgilio Mallari] to return the same, evidence then becomes competent and admissible to prove that
[respondent Jose Mallari] signed a document, a Deed of Sale, the instrument was in truth and in fact given merely as a security
although the agreement was only a mortgage. The consideration for the repayment of a loan. And upon proof of the truth of such
appearing in the Deed of Sale is grossly inadequate considering allegations, the court will enforce the agreement or understanding
the location of the property, the area and the fact that it was a in consonance with the true intent of the parties at the time of the
two-storey building or house. If the intention was really to sell, execution of the contract".
why was there a need for [petitioner Virgilio Mallari] to seek the
consent of [respondent Jose Mallari] if the property will be sold to In any event, at bottom of petitioners’ first submission is their
third person?" inability to accept the factual findings of the two (2) courts below
that the transaction between petitioner Virgilio Mallari and his
Consistent with their thesis that the aforesaid Deed of Absolute parents, albeit denominated as one of absolute sale, is in reality
Sale executed by Virgilio’s parents is clearly a document of sale as an equitable mortgage. In short, petitioners would want us to
its very language unmistakably states, petitioners fault the trial revisit the factual findings of both courts, scrutinize and examine
court for receiving parol evidence to establish that the instrument those findings anew and calibrate the validity of their conclusions
in question is actually one of equitable mortgage. Indirectly, on the basis of our own factual assessment.
petitioners also put the Court of Appeals to task for giving weight
to those evidence instead of rejecting them, conformably with the The desired task cannot be done. Time and again, we have made
Parol Evidence Rule under Section 9, Rule 130 of the Rules of it clear that this Court is not a trier of facts, and that in a petition
Court. for review under Rule 45, only questions of law may be raised in
this Court. To reiterate what we have said in Bernardo vs. CA:7
We are not persuaded.
"The Supreme Court’s jurisdiction is limited to reviewing errors of
To begin with, we cannot view the Deed of Absolute Sale in law that may have been committed by the lower court. The
question in isolation of the circumstances under which the same Supreme Court is not a trier of facts. It leaves these matters to
was executed by Virgilio’s parents, more so in the light of his the lower court, which have more opportunity and facilities to
father’s disavowal of what the document, on its face, purports to examine these matters. This same Court has declared that it is
state. the policy of the Court to defer to the factual findings of the trial
judge, who has the advantage of directly observing the witnesses
Then, too, there is the ruling of this Court in Lustan vs. CA6 to on the stand and to determine their demeanor whether they are
the effect that even if the document appears to be a sale, parol telling or distorting the truth."
evidence may be resorted to if the same does not express the true
intent of the parties. In the very words of Lustan: And again in Remalante vs. Tibe:8

"Even when a document appears on its face to be a sale, the "The rule in this jurisdiction is that only questions of law may be
owner of the property may prove that the contract is really a loan raised in a petition for certiorari under Rule 45 of the Revised

225
CASES ON EVIDENCE

Rules of Court. ‘The jurisdiction of the Supreme Court in cases evidence and contradicted by the evidence on record; and (11)
brought to it from the Court of Appeals is limited to reviewing and when the Court of Appeals manifestly overlooked certain relevant
revising the errors of law imputed to it, its findings of fact being facts not disputed by the parties, which, if properly considered,
conclusive.’ [Chan vs. Court of Appeals, G.R. No. L-27488, June would justify a different conclusion."
30, 1970, 33 SCRA 737, reiterating a long line of decisions]. This
Court has emphatically declared that ‘it is not the function of the Unfortunately for the petitioners, however, we have made a close
Supreme Court to analyze or weigh such evidence all over again, hard look into this case and found none of the foregoing
its jurisdiction being limited to reviewing errors of law that might exceptions as obtaining herein to warrant our departure from the
have been committed by the lower court’ [Tiongco v. De la Merced, established norm.
G.R. No. L-24426, July 25, 1974, 58 SCRA 89; Corona vs. Court
of Appeals, G.R. No. L-62482, April 28, 1983, 121 SCRA 865; Nor are we inclined to disturb the findings of the two (2) courts
Banigued vs. Court of Appeals, G.R. No. L-47531, February 20, below that petitioner Edenbert Madrigal is not buyer in good
1984, 127 SCRA 596]." faith. Again, a reversal of such finding would impose upon us a
reevaluation of the same set of facts appreciated by said courts in
We do acknowledge that the rule thus stated is not casts in stone. arriving at their common conclusion that Madrigal, contrary to
For sure, it admits of exceptions. So it is that in Insular Life what he proclaims himself to be, is not a buyer in good faith. At
Assurance Company, Ltd. Vs. CA,9 we wrote: any rate, we nonetheless took the pains of reviewing the factors
taken into account by both courts in rejecting Madrigal’s claim of
"[i]t is a settled rule that in the exercise of the Supreme Court’s being a buyer in good faith and found no reason to disagree with
power of review, the Court is not a trier of facts and does not their rejection thereof.
normally undertake the re-examination of the evidence presented
by the contending parties during the trial of the case considering With the view we take of this case, petitioners’ lament against the
that the findings of facts of the CA are conclusive and binding on award of moral and exemplary damages and attorney’s fees in
the Court. However, the Court had recognized several exceptions favor of respondent Jose Mallari, based as their lament is on their
to this rule, to wit: (1) when the findings are grounded entirely on contention that respondent has no cause of action against them,
speculation, surmises or conjectures; (2) when the inference made must simply fall.
is manifestly mistaken; (3) when there is grave abuse of
discretion; (4) when the judgment is based on a misapprehension WHEREFORE, the instant petition is hereby DENIED and the
of facts; (5) when the findings of facts are conflicting; (6) when in assailed decision and resolution of the Court of Appeals
making its findings the Court of Appeals went beyond the issues AFFIRMED.
of the case, or its findings are contrary to the admissions of both
the appellant and the appellee; (7) when the findings are contrary Costs against petitioners.
to the trial court; (8) when the findings are conclusions without
citation of specific evidence on which they are based; (9) when the SO ORDERED.
facts set forth in the petition as well as in the petitioner’s main
and reply briefs are not disputed by the respondent; (10) when
the findings of fact are premised on the supposed absence of

226
CASES ON EVIDENCE

effort to have it stricken from the minutes or disregarded by the

trial court, he cannot, after the trial has closed and the case has
been decided against him, invoke the rule in order to secure a
reversal of the judgment by an appellate court. Here, the records
are devoid of any indication that petitioners ever objected to the
admissibility of parole evidence introduced by the private
respondent in open court. The court cannot disregard evidence
which would ordinarily be incompetent under the rules but has
been rendered admissible by the failure of a party to object
thereto. Petitioners have no one to blame but themselves in this
regard.

HERMOSISIMA, JR., J.:

Assailed in this petition for review under Rule 45 is the November

8, 1991 Decision of respondent Court of Appeals in CA-G.R. CV
No. 25069. It affirmed in toto the judgment of Branch 19,
Regional Trial Court of Malolos, Bulacan, in Civil Case No. 8470-
M. The action therein sought to declare null and void the
"Kasulatan Ng Bilihang Tuluyan Ng Lupa" executed on July 18,
1971 by the late Paula Arcega, sister of private respondent, in
favor of herein petitioners over a parcel of land consisting of 927
square meters, situated in Barangay Tabing Ilog, Marilao,
Bulacan.

Paula Arcega was the registered owner of that certain parcel of

land covered by Transfer Certificate of Title No. T-115510. Her
35. SANTIAGO VS CA residential house stood there until 1970 when it was destroyed by
a strong typhoon.
Remedial Law; Civil Procedure; Parol Evidence; The court cannot
disregard evidence which would ordinarily be incompetent under On December 9, 1970, Paula Arcega executed what purported to
the rules but has been rendered admissible by the failure of a be a deed of conditional sale over the land in favor of Josefina
party to object thereto.—Moreover, the parol evidence rule may be Arcega and the spouses Regalado Santiago and Rosita Palabyab,
waived by failure to invoke it, as by failure to object to the the petitioners herein, for and in consideration of P20,000.00. The
introduction of parol evidence. And, where a party who is entitled vendees were supposed to pay P7,000.00 as downpayment. It was
to the benefit of the rule waives the benefit thereof by allowing expressly provided that the vendor would execute and deliver to
such evidence to be received without objection and without any the vendees an absolute deed of sale upon full payment by the

227
CASES ON EVIDENCE

vendees of the unpaid balance of the purchase price of October 24, 1985 or more than fourteen (14) years from the time
P13,000.00. the cause of action accrued. Petitioners also deny that the sale
was fictitious. They maintain that the purchase price was actually
Subsequently, on July 18, 1971, supposedly upon payment of the paid to Paula Arcega and that said amount was spent by the
remaining balance, Paula Arcega executed a deed of absolute sale deceased in the construction of her three-door apartment on the
of the same parcel of land in favor of petitioners. Thereupon, on parcel of land in question.
July 20, 1971, TCT No. T-115510, in the name of Paula Arcega,
was cancelled and a new title, TCT No. T-148989 was issued in Josefina Arcega, the other petitioner, was declared in default for
the name of petitioners. failure to file her answer within the reglementary period.

On April 10, 1985, Paula Arcega died single and without issue, After trial, the RTC rendered judgment in favor of private
leaving as heirs his two brothers, Narciso Arcega1 and private respondent Quirico Arcega, viz.:
respondent Quirico Arcega.
(a) Declaring as null and void and without legal force and effect
Incidentally, before Paula Arcega died, a house of four bedrooms the "Kasulatan Ng Bilihang Tuluyan Ng Lupa" dated July 18,
with a total floor area of 225 square meters was built over the 1971 executed by the deceased Paula Arcega covering a parcel of
parcel of land in question. Significantly, the master's bedroom, land embraced under TCT No. T-115510 in favor of the
with toilet and bath, was occupied by Paula Arcega until her defendants;
death despite the execution of the alleged deed of absolute sale.
The three other bedrooms, smaller than the master's bedroom, (b) Declaring TCT No. T-148989 issued and registered in the
were occupied by the petitioners who were the supposed vendees names of defendants Josefina Arcega and spouses Regalado
in the sale. Santiago and Rosita Palabyab as null and void;

Private respondent Quirico Arcega, as heir of his deceased sister, (c) Ordering the reconveyance of the property including all
filed on October 24, 1985 Civil Case No. 8470-M before the RTC improvements thereon covered by TCT No. T-115510 now TCT No.
of Malolos, Bulacan, seeing to declare null ad void the deed of T-148989, to the plaintiff, subject to real estate mortgage with the
sale executed by his sister during her lifetime in favor of the Social Security System; and
petitioners on the ground that said deed was fictitious since the
purported consideration therefor of P20,000.00 was not actually (d) To pay jointly and severally the amount of P10,000.00 as
paid by the vendees to his sister. attorney's fees.

Answering the complaint before the RTC, petitioner spouses On the counterclaim, the same is hereby dismissed for lack of
averred that private respondent's cause of action was already legal and/or factual basis (p. 6, decision, pp. 295-300, rec.).2
barred by the statute of limitations considering that the disputed
deed of absolute sale was executed in their favor on July 18, In ruling for private respondent, the trial court, as affirmed in toto
1971, by which TCT No. 148989 was issued on July 20, 1971, by the public respondent Court of Appeals, found that:
while private respondent's complaint was filed in court only on

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On the basis of the evidence adduced, it appears that plaintiff funds in her possession in the amount of P30,000.00, deemed it
Quirico Arcega and his brother Narciso Arcega are the only wise to augment her funds for construction purposes by way of a
surviving heirs of the deceased Paula Arcega who on April 10, mortgage with the SSS which only defendants could possibly
1985 died single and without issue. Sometime in 1970, a strong effect they being members of the SSS. Since the SSS requires the
typhoon destroyed the house of Paula Arcega and the latter collateral to be in the name of the mortgagors, Paula Arcega
together with the defendants decided to construct a new house. executed a simulated deed of sale (Kasulatan ng Bilihang Tuluyan
All the defendants 3 being members of the SSS, Paula Arcega ng Lupa) for P20,000.00 dated July 18, 1971 in favor of the
deemed it wise to lend her title to them for purposes of loan with defendants and the same was notarized by Atty. Luis Cuvin who
the SSS. She executed a deed of sale to effect the transfer of the emphatically claimed that no money was involved in the
property in the name of defendants and thereafter the later transaction as the parties have other agreement. The allegations
mortgaged the same for P30,000.00 but the amount actually of the defendants that the property was given to them (Kaloob) by
released was only P25,000.00. Paula Arcega spent the initial the deceased has no evidentiary value. While it is true that Rosita
amount of P30,000.000 out of her savings for the construction of Palabyab stayed with the deceased since childhood, the same
the house sometime in 1971 and after the same and the proceeds cannot be said with respect to defendant Josefina Arcega, distant
of the loan were exhausted, the same was not as yet completed. relative and a niece of the wife of Narciso Arcega, who stayed with
Paula Arcega and her brothers sold the property which they the deceased sometime in 1966 at the age of 19 years and already
inherited for P45,000.00 and the same all went to the additional working as a saleslady in Manila. Did the deceased indeed give
construction of the house, however, the said amount is not defendant Josefina Arcega half of her property out of love and
sufficient. Thereafter, Paula Arcega and her brothers sold another gratitude? Such circumstance appears illogical if not highly
property which they inherited for P805,950.00 and one third (1/3) improbable. As a matter of fact defendant Josefna Arcega in her
thereof went to Paula Arcega which she spent a portion of which unguarded moment unwittingly told the truth that the couple
for the finishing touches of the house. The house as finally (Regalado Santiago and Rosita Palabyab) had indeed borrowed the
finished in 1983 is worth more than P100,000.00 with a floor title and then mortgaged the same with the SSS as shown in her
area of 225 square meters consisting of four bedrooms. A big direct testimony which reads:
master's bedroom complete with a bath and toilet was occupied
by Paula Arcega up to the time of her death on April 10, 1985 and Atty. Villanueva:
the other three smaller bedrooms are occupied by spouses,
defendants Regalado Santiago and Rosita Palabyab, and Josefina Q Why did you say that the house is owned by the spouses
Arcega. After the death of Paula Arcega defendant Josefina Arcega Santiago but the lot is bought by you and Rosita?
and Narciso Arcega constructed their own house at back portion
of the lot in question. A Because at that time, the couple4 borrowed the title and then
mortgaged the property with the SSS. There is only one title but
There is a clear indication that the deed of sale which is both of us owned it. (TSN dtd. 19 Oct '88, p. 5)5
unconscionably low for 937 square meters in favor of the
defendants sometime on July 18, 1971 who are all members of On appeal, the public respondent Court of Appeals dismissed the
the SSS, is merely designed as an accommodation for purposes of same, affirming in all respects the RTC judgment.
loan with the SSS. Paula Arcega cognizant of the shortage of

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CASES ON EVIDENCE

Hence, this petition. stood as owner, he would have collected rentals from Federico for
the use and occupation of the land and its improvements. All that
The petition is unmeritorious. the late Rafael had was a title in his name.

Verily, this case is on all fours with Suntay v. Court of Appeals. 6 xxx xxx xxx
There, a certain Federico Suntay was the registered owner of a
parcel of land in Sto. Niño, Hagonoy, Bulacan. A rice miller, . . . The fact that, notwithstanding the title transfer, Federico
Federico applied on September 30, 1960 as a miller-contractor of remained in actual possession, cultivation and occupation of the
the then National Rice and Corn Corporation (NARIC), but his disputed lot from the time the deed of sale was executed until the
application was disapproved because he was tied up with several present, is a circumstance which is unmistakably added proof of
unpaid loans. For purposes of circumvention, he thought of the fictitiousness of the said transfer, the same being contrary to
allowing his nephew-lawyer, Rafael Suntay, to make the the principle of ownership.8
application for him. To achieve this, Rafael prepared a notarized
Absolute Deed of Sale whereby Federico, for and in consideration In the case before us, while petitioners were able to occupy the
of P20,000.00, conveyed to Rafael said parcel of land with all its property in question, they were relegated to a small bedroom
existing structures. Upon the execution and registration of said without bath and toilet, 9 while Paula Arcega remained virtually
deed, Certificate of Title No. 0-2015 in the name of Federico was in full possession of the completed house and lot using the big
cancelled and, in lieu thereof, TCT No. T-36714 was issued in the master's bedroom with bath and toilet up to the time of her death
name of Rafael. Sometime in the months of June to August, on April 10, 1985. 10 If, indeed, the transaction entered into by
1969,7 Federico requested Rafael to deliver back to him the the petitioners and the late Paula Arcega on July 18, 1971 was a
owner's duplicate of the transfer certificate of title over the veritable deed of absolute sale, as it was purported to be, then
properties in question for he intended to use the property as Ms. Arcega had no business whatsoever remaining in the property
collateral in securing a bank loan to finance the expansion of his and, worse, to still occupy the big master's bedroom with all its
rice mill. Rafael, however, without just cause, refused to deliver amenities until her death on April 10, 1985. Definitely, and
the title insisting that said property was "absolutely sold and legitimate vendee of real property who paid for the property with
conveyed [to him] . . . for a consideration of P20,000.00, good money will not accede to an arrangement whereby the
Philippine currency, and for other valuable consideration." We vendor continues occupying the most favored room in the house
therein ruled in favor of Federico Suntay and found that the deed while he or she, as new owner, endures the disgrace and
of sale in question was merely an absolutely simulated contract absurdity of having to sleep in a small bedroom without bath and
for the purpose of accommodation and therefore void. In toilet as if he or she is a guest or a tenant in the house. In any
retrospect, we observed in that case: case, if petitioners really stood as legitimate owners of the
property, they would have collected rentals from Paula Arcega for
Indeed the most protuberant index of simulation is the complete the use and occupation of the master's bedroom as she would
absence of an attempt in any manner on the part of the late then be a mere lessee of the property in question. However, not a
Rafael to assert his rights of ownership over the land and rice mill single piece of evidence was presented to show that this was the
in question. After the sale, he should have entered the land and case. All told, the failure of petitioners to take exclusive
occupied the premises thereof. He did not even attempt to. If he possession of the property allegedly sold to them, or in the

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CASES ON EVIDENCE

alternative, to collect rentals from the alleged vendee Paula which they were able to register in their names through the
Arcega, is contrary to the principle of ownership and a clear simulated sale, as collateral.
badge of simulation that renders the whole transaction void and
without force and effect, pursuant to Article 1409 of the New Civil The fact that petitioners were able to secure a title in their names,
Code: TCT No. 148989, did not operate to vest upon petitioners
ownership over Paula Arcega's property. That act has never been
The following contracts are inexistent and void from the recognized as a mode of acquiring ownership. As a matter of fact,
beginning: even the original registration of immovable property does not vest
title thereto. 12 The Torrens system does not create or vest title. It
xxx xxx xxx only confirms and records title already existing and vested. It
does not protect a usurper from the true owner. It cannot be a
(2) Those which are absolutely simulated or fictitious; shield for the commission of fraud. It does not permit one to
enrich himself at the expense of another. 13 Where one does not
xxx xxx xxx have any rightful claim over a real property, the Torrens system of
registration can confirm or record nothing.
The conceded fact that subject deed of absolute sale executed by
Paula Arcega in favor of petitioners is a notarized document does Petitioners, nevertheless, insist that both the trial court and the
not justify the petitioners' desired conclusion that said sale is respondent court should have followed the Parole Evidence Rule
undoubtedly a true conveyance to which the parties thereto are and prevented evidence, like the testimony of Notary Public, Atty.
irrevocably and undeniably bound. To be considered with great Luis Cuvin, private respondent Quirico Arcega, among others,
significance is the fact that Atty. Luis Cuvin who notarized the which impugned the two notarized deeds of sale.
deed disclaimed the truthfulness of the document when he
testified that "NO MONEY WAS INVOLVED IN THE The rule on parole evidence under Section 9, Rule 130 is qualified
TRANSACTION." 11 Furthermore, though the notarization of the by the following exceptions:
deed of sale in question vests in its favor the presumption of
regularity, it is not the intention nor the function of the notary However, a party may present evidence to modify, explain or add
public to validate and make binding an instrument never, in the to the terms of the written agreement if he puts in issue in his
first place, intended to have any binding legal effect upon the pleading:
parties thereto. The intention of the parties still is and always will
be the primary consideration in determining the true nature of a (a) An intrinsic ambiguity, mistake or imperfection in the written
contract. Here, the parties to the "Kasulatan ng Bilihang Tuluyan agreement;
ng Lupa," as shown by the evidence and accompanying
circumstances, never intended to convey the property thereto (b) The failure of the written agreement to express the true intent
from one party to the other for valuable consideration. Rather, the and agreement of the parties thereto;
transaction was merely used to facilitate a loan with the SSS with
petitioners-mortgagors using the property in question, the title to (c) The validity of the written agreement; or

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CASES ON EVIDENCE

(d) The existence of other terms agreed to by the parties or their

successors in interest after the execution of the written 10. That defendants pursuing their unlawful scheme registered
agreement. the said void and inexistent "KASULATAN NG BILIHANG
TULUYAN NG LUPA" with the office of the Register of Deeds of
The term "agreement" includes wills." Bulacan, procured the cancellation of Transfer Certificate of Title
No. 115510, in the name of PAULA ARCEGA and the issuance of
In this case, private respondent Quirico Arcega was able to put in Transfer Certificate of Title No. 148989, in their names, a xeroxed
issue in his complaint before the Regional Trial Court the validity copy of which is hereto attached as Annex "C" and made integral
of the subject deeds of sale for being a simulated transaction: part hereof.

6. That in 1971, the defendants, who by then were already 11. That still in furtherance of their unjust and unlawful
employed in private firms and had become members of the Social schemes, defendants secured a loan from the Social Security
Security System by virtue of their respective employments, System in the amount of P30,000.00, securing the payment
decided among themselves to build a new house on the property thereof with a Real Estate Mortgage on the above-described
of PAULA ARCEGA above described and to borrow money from property then already titled in their names as aforestated (pp. 2-
the Social Security System to finance the proposed construction. 3, complaint, pp. 1-5, rec.). 14

7. That in order to secure the loan from the Social Security Moreover, the parol evidence rule may be waived by failure to
System it was necessary that the lot on which the proposed house invoke it, as by failure to object to the introduction of parol
would be erected should be registered and titled in the names of evidence. And, where a party who is entitled to the benefit of the
the defendants. rule waives the benefit thereof by allowing such evidence to be
received without objection and without any effort to have it
xxx xxx xxx stricken from the minutes or disregarded by the trial court, he
cannot, after the trial has closed and the case has been decided
9. That in conformity with the above plans and schemes of the against him, invoke the rule in order to secure a reversal of the
defendants, they made PAULA ARCEGA execute and sign a judgment by an appellate court. 15 Here, the records are devoid
fictitious, hence null and void "KASULATAN NG BILIHANG of any indication that petitioners ever objected to the admissibility
TULUYAN NG LUPA" on July 18, 1971, before Notary Public LUIS of parole evidence introduced by the private respondent in open
CUVIN, of Bulacan and entered in his register as Doc. No. 253, court. The court cannot disregard evidence which would
Page No. 52, Book No. XIX, Series of 1971, by which PAULA ordinarily be incompetent under the rules but has been rendered
ARCEGA purportedly conveyed(sic) in favor of the defendants admissible by the failure of a party to object thereto. 16
JOSEFINA ARCEGA and the spouse REGALADO SANTIAGO and Petitioners have no one to blame but themselves in this regard.
ROSITA PALABYAB, the whole parcel of land above described for
the sum of TWENTY THOUSAND (P20,000.00), as consideration Finally, petitioners argue that private respondent's complaint filed
which was not actually, then or thereafter paid either wholly or before the trial court on October 24, 1985 is already barred by the
partially. A copy of said document is hereto attached as Annex "B" statute of limitations and laches considering that the deed of
and made integral part hereof. absolute sale was executed in their favor by the deceased Paula

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CASES ON EVIDENCE

Arcega on July 20, 1971. Indeed, more than fourteen (14) years it is the negligence or omission to assert a right within a
had elapsed from the time his cause of action accrued to the time reasonable time, warranting a presumption that the party entitled
that the complaint was filed. Articles 1144 and 1391 of the New to assert it either has abandoned it or declined to assert it. 18 But
Civil Code provide: there is, to be sure, no absolute rule as to what constitutes laches
or staleness of demand; each case is to be determined according
Art. 1141. The following actions must be brought within ten years to its particular circumstances. The question of laches is
from the time the right of action accrues: addressed to the sound discretion of the court, and since laches
is an equitable doctrine, its application is controlled by equitable
(1) Upon a written contract; considerations. It cannot be worked to defeat justice or to
perpetrate fraud and injustice. 19 In the case under
(2) Upon an obligation created by law; consideration, it would not only be impractical but well-nigh
unjust and patently inequitous to apply laches against private
(3) Upon a judgment. respondent and vest ownership over a valuable piece of real
property in favor of petitioners by virtue of an absolutely
Art. 1391. The action for annulment shall be brought within four simulated deed of sale never, in the first place, meant to convey
years. any right over the subject property. It is the better rule that
courts, under the principle of equity, will not be guided or bound
This period shall begin: strictly by the statute of limitations or the doctrine of laches when
to do so, manifest wrong or injustice would result. 20
In cases of intimidation, violence or undue influence, from the
time the defect of the consent ceases. WHEREFORE, premises considered, the petition is hereby
DENIED with costs against petitioners.
In cases of mistake or fraud, from the time of the discovery of the
same. SO ORDERED.

And when the action refers to contracts entered into by minors or

other incapacitated persons, from the time the guardianship
ceases.

This submission is utterly without merit, the pertinent provision

being Article 1410 of the New Civil Code which provides
unequivocably that "[T]he action or defense for the declaration of
the inexistence of a contract does not prescribe." 17

As for laches, its essence is the failure or neglect, for an

unreasonable and unexplained length of time to do that which, by
exercising due diligence, could or should have been done earlier;

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CASES ON EVIDENCE

36. `PEOPLE OF THE PHILIPPINES VS BUSTOS

VILLA-REAL, J.:

This is an appeal taken by the accused Francisco Bustos and

Antonio Macaspac from the judgment of the Court of First
Instance of Rizal convicting each of them of the crime of homicide,
and sentencing Antonio Macaspac to fourteen years, eight months
and one day reclusion temporal, and Francisco Bustos to twelve
years and one day reclusion temporal, taking into consideration
in favor of the latter the mitigating circumstance of provocation by
the deceased; further sentencing both accused to the accessories
of the law, to indemnify, jointly and severally, the heirs of
deceased in the sum of P1,00, to pay the costs of the action.

In support of his appeal Antonio Macaspac assigns the following

alleged errors as committed by the lower court in its decision, to
wit: (1) The lower court erred in finding the appellant Antonio
Macaspac liable beyond a reasonable doubt, as coprincipal, for
the death of Felipe del Castillo; (2) the lower court erred in not
finding the accused Antonio Macaspac's alibi proven.

Francisco Bustos, in turn, in support of his, assigns the following

alleged errors as committed by the trial court in its decisions, to
wit: (1) The lower court erred in basing its decision principally
upon the testimonies of Isabel Encarnacion ( a deaf-mute) and
Laureana Yumul, and upon the following findings: "However,
immediately after the occurrence, Francisco Bustos met the
Spaniard Juan T. Lechea and told him that Angel Castillo's son
had thrown stones at him in his own house. He said nothing of
having been assaulted by Angel del Castillo, Felipe del Castillo
and one Delfin. Francisco Bustos made the same statement to
Nicanor Garcia, municipal president of San Pedro Macati, except
that he said that it was old man Castillo, the deceased's father,
who threw stones at him. The absence of any traces of blood

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CASES ON EVIDENCE

between Francisco Busto's house and the place where the Castillo stretched out on the ground wounded, expiring a few
deceased fell, shows that the latter was wounded in the latter moments later. The autopsy performed by Dr. Eugenio Santos
place. The wound below the sternum was necessarily mortal. We disclosed the following wounds: A sharp wound 7 centimeters
doubt that the deceased could have walked one hundred fifty long and 4 centimeters deep on the left arm at the level of the
(150) meters — the distance between Francisco Bustos's house humero-cubital articulation, penetrating the flesh and two bones;
and the place where he fell wounded — and traverse that distance two sharp wounds on the posterior internal surface of the lower
without leaving a trail of blood behind him." (Decision, page 4.) (2) third of the same arm, running obliquely, and penetrating the
The lower court erred in convicting the herein defendant- cubitus and the radius; and a penetrating wound below the
appellant Francisco Bustos and sentencing him to twelve years sternum, involving the stomach, and running obliquely
imprisonment reclusion temporal. downwards from left to right 8, centimeters deep. The physician
was of opinion that the last wound was necessarily fatal. (Exhibit
The alleged errors assigned by both of the accused in support of B.)
their respective simmer down to the single proposition that the
trial court erred in finding each of them guilty, beyond any doubt, That same night Francisco Bustos presented himself to the
of the crime with which they are charged in the information. municipal president with a wound on his forehead, stating that
he had been stoned by someone. He was taken to the General
The following facts, without contradiction, were proved at the Hospital where he was examined and found to have a wound on
trial: his forehead and several bruises on his nose and lips, caused by
a blunt instrument which might have been a stone.
On the afternoon of October 24, 1925, while trying to determine
the boundaries of the lands which they respectively occupied on The only question of fact to determine in this appeal is: Who is or
the Gadalupe, Estate, Francisco Bustos and Angel del Castillo are responsible for the wounds found on Felipe del Castillo's
became engaged in a dispute finally resulting in the former body, which caused death?
catching the latter by the neck. Attracted by the cries of the
people, Mariano Montemayor and his ward, Antonio Macaspac, On this point Laureana Yumul testified to the effect that when
ran to the place of the fight, Antonio Macaspac catching hold of she repaired to the place pointed out by her deaf-mute daughter,
Francisco Bustos, and Mariano Montemayor of Angel del Castillo, she found her son stretched out on the ground, wounded, and
thus separating the combatants. Mariano Montemayor she asked him who had inflicted the wounds on him; that her son
entertained Angel del Castillo on the street by conversing with answered: "Mother, go to the municipality and report this,
him. Antonio Macaspac took Francisco Bustos to the latter's because Francisco Bustos and Antonio Macaspac have hacked me
house. Laureana Yumul, Angel del Castillo's wife, who was also up;" that upon hearing this, should shouted for help several
there went to her house, leaving her husband. On nearing her times; that after the lapse of sufficient time for one to finish
home, she heard the desperate cries of her deaf-mute daughter, smoking a cigarette, her son expired; that some time thereafter,
Soledad Encarnacion, who was under a mango tree gesticulating the agents of authority arrived, but her son was already dead.
and making signs, failing upon her knees and getting up again,
without knowing what to do. Going in the direction pointed out by The defense impeached the veracity of this witness by means of
her daughter, Laureana Yumul came upon her son Felipe del the testimony of the municipal president, Nicanor Garcia, and

235
CASES ON EVIDENCE

Cristino Basay, who testified that they were the first to arrive at extent of enabling the blind to read by means of the sense of
the place where the deceased lay and that when Laureana Yumul touch and deaf-mutes to receive instruction through conventional
came up, she asked them what had happened to her son, and signs and objects, nevertheless, with respect to deaf-mutes, it is
who had killed him. necessary that he who is to communicate with them know the
meaning of their signs, either from having had them taught to
The court below found Laureana Yumul's testimony more him, or from having acquired a knowledge of them through
credible. Taking into account the circumstances of the case and frequent contact with the same. Without these circumstances,
the number of persons in the vicinity who must have gone to the although it is possible to guess part of what deaf-mutes mean by
place of the occurrence; it is highly probable that some of the their signs even without having had much to do with them, still
curious ones asked such questions without anyone taking notice much of what they wish to say escapes us, and in our eagerness
of who they were, due to the excitement of the moment; and when to understand them, we resort to enjecture. It will be seen how
municipal president Nicanor Garcia and Crisostomo Basay dangerous then in such a procedure to arrive at the truth, and
testified on this point at the trial months afterwards, in harking above all when the life and liberty of an accused man are at stake.
back to the events of the removal of the body, it may be that in This was shown in the present case, in which during the course
the midst of the confusion of thoughts they got the idea that it of interpretation, there were times when the interpreter could not
was the deceased's mother who had asked them such questions. make out what the witness meant by such signs as she uses, and
Laureana Yumul stoutly denies having asked such questions as this is due to the fact that the deaf-mute had never been a pupil
are attributed to her. of the interpreter, nor had the latter previously had anything to
do with the former, such as would have given her an opportunity
Aside from the ante-mortem declaration of Felipe del Castillo, as to acquire some knowledge of the meaning of the signs the deaf-
to who had inflicted the wounds that caused his death, we have mute used. In view of this, it would not be prudent to admit the
the testimony of Mariano del Castillo, the 8-year-old brother of deaf-mute's testimony as interpreted by the teacher.
the deceased, to the effect that on his return from having
pastured his carabaos, he saw his brother pursued by Francisco The accused Francisco Bustos, testifying in his own behalf,
Bustos and Antonio Macaspac, the former armed with a dagger attempted to prove that after the encounter with Angel del
and the latter with a bolo. As he became frightened he ran to his Castillo, and while he was in his own house, said Angel del
house, where he met his father, Angel del Castillo, to whom he Castillo, accompanied by his son Felipe del Castillo and a certain
related what he had seen. When Angel del Castillo had heard his individual named Delfin, as also his wife Laureana Yumul, called
son's story, he picked up a bolo and went in search of his son's upon him to come down because he, the said Angel del Castillo,
aggressors, but did not find them in their respective homes. wanted to kill him; that because he did not accept the challenge,
the challenger and his companions went up into his house; that,
The prosecution also presented Soledad Encarnacion, deaf-mute in order to defend himself, he picked up his dagger and with it
daughter of Laureana Yumul, who was interpreted by a teacher dealt someone a blow, he knew not whom, having received a blow
from the deaf and dumb school who had never taught the with a bolo on his forehead which left him unconscious on the
witness; nor had the latter ever been to such a school. While it is ground. By this the accused no doubt meant it to be understood
true that modern pedagogy has made tremendous strides in the that the one who received the blow with the dagger was Felipe del
instruction and education of persons so afflicted, even to the Castillo, who was found to have a deep wound below the sternum,

236
CASES ON EVIDENCE

which caused his death. The character of the wound on the of the prosecution concerning his participation in the assault
accused Francisco Bustos's forehead when he presented himself upon Felipe del Castillo.
to the municipal president Nicanor Garcia and his declaration
that he had been stoned by someone, contradicts his own The evidence adduced at the trial conclusively establishes the fact
testimony. The blood stains found in his house do not corroborate that on the afternoon in question the accused Francisco Bustos
his testimony, because if Felipe del Castillo had received the fatal and Antonio Macaspac, on meeting Felipe del Castillo, son of
wound in said accused's house, he would not have had strength Angel del Castillo, with whom Francisco Bustos had just had a
enough to get to where he was found stretched out, which is 150 quarrel, and in which Antonio Macaspac had intervened, the said
meters from said house, and besides, there would have been accused pursued him; that Felipe del Castillo threw a stone at his
blood stains along the trail. The said blood stains are not pursuers which struck Francisco Bustos wounding him on the
incompatible with the prosecution's version, since after having forehead; that the accused continued to pursue their victim until
been stoned by Felipe del Castillo, when the latter was pursued they overtook him, inflicting several wounds upon him as a result
by the accused, Francisco Bustos must have repaired to his of which he died a few minutes later.
house where some of the drops of blood issuing from his forehead
must have fallen. These acts constitute the crime of homicide as defined and
penalized in article 404 of the Penal Code, the herein accused
Francisco Bustos's declaration, then, far from detracting the being criminally liable as principals by direct participation, and
evidence presented by the prosecution, actually corroborates it. the penalty provided by the law being reclusion temporal to its
full extent.
The accused Antonio Macaspac pleaded an alibi, maintaining that
he was absent from Guadalupe from 6:30 in the evening until In applying the penalty, no modifying circumstance of criminal
11:30 at night, having gone to Manila. liability can be taken into consideration, because neither can the
fact there were two aggressors be held to constitute abuse of
Taking into consideration the time when Felipe del Castillo was superior strength, since the relative physical strength of the
found wounded, which must have been shortly before nightfall, it aggressors and the assaulted party does not appear of record; nor
is not improbable that he might have left for Manila after the can the fact that the deceased stoned Francisco Bustos be
assault with the object of preparing an alibi. considered a provocation, since it does not clearly appear that the
deceased was the one who started the fight and not the one who
The wounds found on Felipe del Castillo's body, besides the stab, was provoked. On the contrary, it may be inferred from the ante-
show that the assault upon he was made with two kinds of mortem declaration of Felipe del Castillo that he took to stoning
weapons, one sharp-edged and the other pointed, thus only upon being pursued by the deceased.
corroborating the deceased's ante-mortem declaration and
witness Mariano del Castillo's testimony. The virtue of the foregoing, the judgment appealed from is
modified, as recommended by the Attorney-General sentencing
Therefore, the evidence of the alibi presented by the accused the accused Francisco Bustos to fourteen years, eight months
Antonio Macaspac cannot prevail over the clear and positive proof and one day reclusion temporal, and confirmed in all other

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respects, with one-half of the costs against each of the appellants.

So ordered.

37. PEOPLE OF THE PHILIPPINES VS ZHENG BAI HUI @

CARLOS TAN TY and NELSON HONG TY @ SAO YU

Witnesses; Oaths; Waiver; The failure of a witness to take an oath

prior to his testimony is a defect that may be waived by the
parties.—The failure of a witness to take an oath prior to his
testimony is a defect that may be waived by the parties. Appellant
Nelson Hong Ty concedes to this rule. He asserts, however, that
he did not waive his right to object to the lack of oath, since the
inadvertence was discovered only after the judgment of conviction
by the trial court when counsel was preparing the brief for
automatic review by this Court.

Same; Same; Same; The better test to determine whether there

was a waiver of the lack of oath is not whether a party had
knowledge of the lack of oath but whether he had the opportunity
to know of the lack of oath—if a party ought to have known of the
lack of oath but did not object thereto, he cannot later be heard
raising such an objection.—Langford states that “knowledge or
want of knowledge is the true test” in determining whether there
was a waiver of the lack of oath. We find, however, that this test
would open the door to fraud since any party can claim want of
knowledge of the defect before verdict is rendered. Such a claim
would be exceedingly difficult to verify. We believe that the better
test would be not whether a party had knowledge of the lack of
oath but whether he had the opportunity to know of the lack of
oath. If a party ought to have known of the lack of oath but did

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not object thereto, he cannot later be heard raising such an with an evident desire to secure a conviction, or that he had
objection. intimidated the witnesses for the defense. The trial judge must be
accorded a reasonable leeway in putting such questions to
Same; Judges; The averted gaze, in our culture, is a telltale sign witnesses as may be essential to elicit relevant facts to make the
of prevarication, and a witness’ reticent demeanor no doubt raises record speak the truth. Trial judges in this jurisdiction are judges
suspicions in the judge’s mind that his testimony may be a of both the law and the facts, and they would be negligent in the
fabrication; It would be to curtail or limit unduly the discretion of performance of their duties if they permitted a miscarriage of
a trial judge to impute with a sinister significance such minute justice as a result of a failure to propound a proper question to a
and searching queries from the bench, especially in light of the witness which might develop some material bearing upon the
witness’ suspicious behavior.—The averted gaze, in our culture, is outcome. In the exercise of sound discretion, he may put such
a telltale sign of prevarication, and Norlito’s reticent demeanor no question to the witness as will enable him to formulate a sound
doubt raised suspicions in the judge’s mind that his testimony opinion as to the ability or the willingness of the witness to tell
may be a fabrication. The judge also noted in her Order denying the truth. A judge may examine or cross-examine a witness. He
the motion to disqualify her that the witness was evasive. Of may propound clarificatory questions to test the credibility of the
course, the witness’ behavior could be attributed to shyness, or witness and to extract the truth. He may seek to draw out
even nervousness, since the witness was testifying in court for the relevant and material testimony though that testimony may tend
first time. In any case, it was incumbent upon the trial judge to to support or rebut the position taken by one or the other party. It
confirm or dispel her suspicions. It was, after all, her duty to cannot be taken against him if the clarificatory questions he
ascertain the credibility of the witness to enable her to arrive at a propounds happen to reveal certain truths which tend to destroy
just verdict. In the fulfillment of this duty, the judge dwelt at the theory of one party.
length on how Norlito and Mary Ann first met and whether Norlito
was paid in exchange for his testimony. It would be to curtail or Witnesses; Judges; The judge need not wait for an objection from
limit unduly the discretion of a trial judge to impute with a opposing counsel to bar immaterial questions—if the opposing
sinister significance such minute and searching queries from the counsel does not object to such questions, the judge cannot stand
bench, especially in light of the witness’ suspicious behavior. idly by and allow the examining counsel to propound endlessly
questions that are clearly irrelevant, immaterial, improper or tend
Same; Same; A severe examination by a trial judge of some of the to be repetitious.—The judge need not have waited for an
witnesses for the defense in an effort to develop the truth and to objection from opposing counsel to bar immaterial questions. A
get at the real facts affords no justification for a charge that he judge has the duty to see to the expeditious administration of
has assisted the prosecution with an evident desire to secure a justice. If the opposing counsel does not object to such questions,
conviction, or that he had intimidated the witnesses for the the judge cannot stand idly by and allow the examining counsel
defense—it cannot be taken against him if the clarificatory to propound endlessly questions that are clearly irrelevant,
questions he propounded happen to reveal certain truths which immaterial, improper or tend to be repetitious. The action by the
tend to destroy the theory of one party.—In any case, a severe judge in this case, therefore, cannot be deemed prejudicial;
examination by a trial judge of some of the witness for the defense indeed, it is entirely proper.
in an effort to develop the truth and to get at the real facts affords
no justification for a charge that he has assisted the prosecution

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Dangerous Drugs Act; Witnesses; Informers; As a rule, informers identification, as well as show how the identity of the informer is
are not presented in court because of the need to preserve their essential to their defense.—Before disclosure of the informer’s
cover so they can continue their invaluable service to the police.— identity may be allowed, however, the defense must, before or
As a rule, informers are not presented in court because of the during the trial, request the production of the confidential
need to preserve their cover so they can continue their invaluable informant or his identification. (Thus, in Roviaro the accused
service to the police. Equally strong reasons include the repeatedly demanded disclosure.) In addition, the defendants
maintenance of the informant’s health and safety and the must show how the identity of the informer is essential to their
encouragement of others to report wrongdoing to police defense.
authorities. The rule against disclosure is not absolute, however.
In Roviaro v. United States, the United States Supreme Court Same; Same; Same; The burden of showing need for disclosure of
declared: What is usually referred to as the informer’s privilege is informers is upon the defendant, and a mere speculation an
in reality the Government’s privilege to withhold from disclosure informer may be helpful is not enough to carry the burden and
the identity of persons who furnish information of violations of overcome the public interest in the protection of the informer.—
law to officers charged with enforcement of that law. [Citations The burden of showing need for disclosure is upon defendants.
omitted.] The purpose of the privilege is the furtherance and The necessity for disclosure depends upon “the particular
protection of the public interest in effective law enforcement. The circumstances of each case, taking into consideration the crime
privilege recognizes the obligation of citizens to communicate charged, the possible defenses, the possible significance of the
their knowledge of the commission of crimes to law-enforcement informer’s testimony, and other relevant factors.” Appellants did
officials and, by preserving their anonymity, encourages them to not develop any such criteria with reference to the merits of the
perform that obligation. The scope of the privilege is limited by its case. A mere request during a witness’ examination indicates
underlying purpose. Thus, where the disclosure of the contents of speculation on the relevancy of his testimony; and mere
a communication will not tend to reveal the identity of an speculation an informer may be helpful is not enough to carry the
informer, the contents are not privileged. Like wise, once the burden and overcome the public interest in the protection of the
identity of the informer has been disclosed to those who would informer. Hence, the trial court did not err in sustaining the
have cause to resent the communication, the privilege is no refusal of the witness to reveal the identity of Stardust.
longer applicable. A further limitation on the applicability of the
privilege arises from the fundamental requirements of fairness. Same; Same; Same; Except when the accused vehemently denies
Where the disclosure of an informer’s identity, or of the contents selling prohibited drugs and there are material inconsistencies in
of his communication, is relevant and helpful to the defense of an the testimonies of the arresting officers, or there are reasons to
accused, or is essential to a fair determination of a cause, the believe that the arresting officers had motives to testify falsely
privilege must give way. In these situations the trial court may against the accused, or that only the informant as the poseur-
require disclosure and, if the Government withholds the buyer actually witnessed the entire transaction, the testimony of
information, dismiss the action. the informant may be dispensed with as it will be merely
corroborative of the apprehending officer’s eyewitness
Same; Same; Same; Before disclosure of the informer’s identity testimonies.—The rule in determining whether the informer
may be allowed, the defense must, before or during the trial, should be presented for a successful prosecution in cases
request the production of the confidential informant or his involving buy-bust operations is best stated in People vs. Doria:

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CASES ON EVIDENCE

Except when the appellant vehemently denies selling prohibited selection of appropriate and effective means of entrapping drug
drugs and there are material inconsistencies in the testimonies of traffickers is best left to the discretion of police authorities.
the arresting officers, or there are reasons to believe that the
arresting officers had motives to testify falsely against the Same; Same; The sale of prohibited drugs to complete strangers,
appellant, or that only the informant as the poseur-buyer actually openly and in public places, has become a common occurrence.—
witnessed the entire transaction, the testimony of the informant That the sale was in public does not diminish the prosecution
may be dispensed with as it will be merely corroborative of the witnesses’ credibility or the trustworthiness of their testimony. In
apprehending officers’ eyewitness testimonies. There is no need to People vs. Zervoulakos, we observed that “the sale of prohibited
present the informant in court where the sale was actually drugs to complete strangers, openly and in public places, has
witnessed and adequately proved by prosecution witnesses. None become a common occurrence. Indeed, it is sad to note the
of the above circumstances obtains in this case. While appellants effrontery and growing casualness of drug pushers in the pursuit
do deny selling shabu, there are no material inconsistencies in of their illicit trade, as if it were a perfectly legitimate operation.”
the testimonies of the arresting officers. The arresting officers had
no motive to testify against appellants; the claims of extortion Same; Same; It is not improbable for large transactions involving
against the arresting officers, as will be shown later, were not drugs to take place under the cover of commonplaceness.—
firmly established. Finally, the informer was not even the poseur- Appellants submit, however, that this ruling applies only to “small
buyer in the operation. The sale was actually witnessed and level drug trafficking,” and not to cases involving a substantial
adequately proved by the prosecution witnesses. The presumption amount of drugs, such as the one at bar. The distinction is
laid down in Section 3(e), Rule 131 of the Rules of Court, to wit: illusory for it is not improbable for large transactions involving
“(e) [t]hat evidence willfully suppressed would be adverse if drugs to take place under the cover of commonplaceness. A kilo of
produced,” therefore, does not apply since the testimony of the shabu can be transported and delivered with facility in public and
informer would be merely corroborative. it does not tax credulity that such transactions indeed occur.
While the sale may have been made to a stranger, the lure for
Same; Buy-Bust Operations; That no test buy was conducted easy profits can easily outweigh the risk of arrest and
before the arrest is of no moment for there is no rigid or textbook prosecution. Moreover, the risk was reduced by the introduction
method of conducting buy-bust operations—the Court will not by the informant, who had regular contact with appellant Carlos
pretend to establish on a priori basis what detailed acts police Tan Ty, of the poseur-buyer to the latter.
authorities might credibly undertake and carry out in their
entrapment operations.—That no test buy was conducted before Same; Same; Police Blotters; A prior blotter report is neither
the arrest is of no moment for there is no rigid or textbook indispensable nor required in buy-bust operations.—Equally
method of conducting buy-bust operations. For the same reason, without merit is the argument that since the buy-bust was not
the absence of evidence of a prior surveillance does not affect the recorded in the police blotter, it is proof of a sham buy-bust. A
regularity of a buy-bust operation, especially when, like in this prior blotter report is neither indispensable nor required in buy-
case, the buy-bust team members were accompanied to the scene bust operations.
by their informant. The Court will not pretend to establish on a
priori basis what detailed acts police authorities might credibly Same; Same; Like a prior blotter report, the use of fluorescent
undertake and carry out in their entrapment operations. The powder is not indispensable in buy-bust operations; The use of

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CASES ON EVIDENCE

initials to mark the money used in the buy-bust operation has that the law enforcers instigated appellants to sell shabu to them.
been accepted by the Supreme Court.—The failure of the We find no instigation in this case, x x x The general rule is that it
NARCOM agents to use fluorescent powder on the boodle money is no defense to the perpetrator of a crime that facilities for its
is no indication that the buy-bust operation did not take place. commission were purposely placed in his way, or that the
Like a prior blotter report, the use of fluorescent powder is not criminal act was done at the ‘decoy solicitation’ of persons
indispensable in such operations. The use of initials to mark the seeking to expose the criminal, or that detectives feigning
money used in the buy-bust operation has been accepted by this complicity in the act were present and apparently assisting in its
Court. The prosecution has the prerogative to choose the manner commission. Especially is this true in that class of cases where
of marking the money to be used in the buy-bust operation. the offense is one of a kind habitually committed, and the
Same; Same; Frame-Ups; Frame-up is the usual defense of those solicitation merely furnishes evidence of a course of conduct.
accused in drug related cases, and it is viewed by the Supreme Mere deception by the detective will not shield defendant, if the
Court with disfavor since it is an allegation that can be made with offense was committed by him free from the influence or the
ease.—Appellants raise the defense of frame-up. Frame-up is the instigation of the detective.
usual defense of those accused in drug related cases, and it is
viewed by the Court with disfavor since it is an allegation that can Same; Searches and Seizures; Warrantless Arrests; Where a
be made with ease. For this claim to prosper, the defense must person commits a crime in the presence of a police officer, the
adduce clear and convincing evidence to overcome the latter may validly arrest the offender without first obtaining a
presumption that government officials have performed their warrant of arrest.—Contrary to appellants’ contentions, no tinge
duties in a regular and proper manner. of unconstitutionally attended the arrest of appellants. What we
said in People vs. Liquen is sufficient to dispose of this argument:
Same; Same; Same; Extortion; Like an alleged frame-up, a In the case at bar, the buy-bust operation was formed by the
supposed extortion by police officers is a standard defense in drug police officers precisely to test the veracity of the tip and in order
cases and must also be proven by clear and convincing evidence. to apprehend the perpetrator. Having caught the culprit red-
—The claim of extortion is similarly untenable. Like an alleged handed as a result of the buy-bust operation, Garcia and his
frame-up, a supposed extortion by police officers is a standard team-mates were not only authorized but were also under
defense in drug cases and must also be proven by clear and obligation to apprehend the drug pusher even without a warrant
convincing evidence. Again, appellants have failed to discharge of arrest. Section 5 (a) of Rule 113 of the Revised Rule on
this burden. Such a claim is supported only by the same Criminal Procedure, reads in part as follows: “Sec. 5. Arrest
unreliable evidence to support the claim of frame-up. without warrant; when lawful—A peace officer or a private person
may, without a warrant, arrest a person: (a) When, in his
Same; Same; Entrapment; The general rule is that it is no defense presence, the person to be arrested has committed, is actually
to the perpetrator of a crime that facilities for its commission were committing, or is attempting to commit an offense; x x x.” Clearly,
purposely placed in his way, or that the criminal act was done at the situation in the case at bar is one where a person commits a
the “decoy solicitation” of persons seeking to expose the criminal, crime in the presence of a police officer; hence, the latter may
or that detectives feigning complicity in the act were present and validly arrest the offender even without first obtaining a warrant
apparently assisting in its commission.—Appellants submit in the of arrest.
alternative that the facts as presented by the prosecution reveal

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Same; Conspiracy; Where the transaction was successfully same Act.” In this case, the crime (the sale of regulated drugs),
consummated between the poseur-buyer and the accused, and not only the conspiracy (to sell the same) was actually
together with his companion, with one receiving the marked committed. To hold appellants liable for violation of Section 15
money and the other delivering the contraband to the poseur alone, therefore, would be more precise and more in accord with
buyer, no other logical conclusion would follow from the duo’s the principles of criminal law.
concerted action except that they had a common purpose and
community of interest, the accepted indicia that could establish Same; Penalties; The penalty for the sale of regulated drugs is
the existence of conspiracy.—Conspiracy between the appellants based, as a rule, on the quantity thereof, and the exception is
was evident. The transaction was successfully consummated where the victim is a minor or where the regulated drug involved
between the poseur-buyer and appellant Carlos Tan Ty, together is the proximate cause of the death of the victim, in which case,
with his companion, appellant Nelson Hong Ty, with one receiving the maximum penalty prescribed in Section 15, i.e., death, shall
the marked money and the other delivering the contraband to the be imposed, regardless of the quantity of the prohibited drugs
poseur buyer. No other logical conclusion would follow from the involved.—From the foregoing provisions, the penalty for the sale
duo’s concerted action except that they had a common purpose of regulated drugs is based, as a rule, on the quantity thereof.
and community of interest, the accepted indicia that could The exception is where the victim is a minor or where the
establish the existence of conspiracy. Conspiracy having been regulated drug involved is the proximate cause of the death of the
established, the accused are answerable as co-principals victim. In such cases, the maximum penalty prescribed in Section
regardless of the degree of their participation. 15, i.e., death, shall be imposed, regardless of the quantity of the
prohibited drugs involved. Appellants, therefore, cannot be
Same; Same; When the conspiracy relates to a crime actually sentenced to suffer the death penalty under this exception, the
committed, the conspiracy is absorbed—it does not constitute a conditions for its imposition not being present. Their penalty
separate crime, but is only a manner of incurring criminal ought to be determined by the quantity of methamphetamine
liability.—”Conspiracy,” as used herein, refers to the manner of hydrochloride involved in the sale.
incurring criminal liability, and not a crime in itself. Conspiracy is
not punishable except when the law specifically provides a Same; If the prosecution proves that the sample is positive for
penalty therefor, such as in conspiracies to commit treason, coup methamphetamine hydrochloride, it can be presumed that the
d’etat, rebellion, sedition, and the sale of dangerous drugs. The entire substance seized is shabu.—Thus, if the prosecution
last is punishable under Section 2(b) of the Dangerous Drugs Act. proves that the sample is positive for methamphetamine
When the conspiracy relates to a crime actually committed, the hydrochloride, it can be presumed that the entire substance
conspiracy is absorbed; it does not constitute a separate crime, seized is shabu. The burden of evidence shifts to the accused who
but is only a manner of incurring criminal liability. The must prove otherwise. Appellants in this case have not presented
participants to the crime are merely held equally liable since the any evidence to overcome the presumption.
act of one is the act of all. It was thus error for the
KAPUNAN, J.:
trial court to convict appellants for “Section 15, Article III, RA
6425 [punishing the sale of regulated drugs] in relation to Section For the sale of methamphetamine hydrochloride, otherwise
21-B [penalizing the conspiracy to sell regulated drugs] of the known as "shabu," Zheng Bai Hui alias Carlos Tan Ty and Nelson

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CASES ON EVIDENCE

Hong Ty alias Sao Yu were sentenced by the Caloocan City Acting on the information furnished by Stardust, the NARCOM
Regional Trial Court to suffer the death penalty. Their case is now agents organized a buy-bust operation to apprehend the reputed
before this Court on automatic review. drug pushers. Stardust called up Carlos Tan Ty that same
morning and introduced SPO3 Gilbert Santos over the cellular
Appellants were charged in an information stating: phone. Pretending to be a "pusher-buyer" in Parañaque, SPO3
Santos told Carlos that he was willing to buy shabu if Carlos had
That on or about the 24th day of October 1994 at Kalookan City, any stock. Carlos replied that they had stock that was yellow in
Metro-Manila, Philippines and within the jurisdiction of this color. SPO3 Santos and Carlos subsequently reached an
Honorable Court, the above-named accused, without authority of agreement for the former to buy from the latter one (1) kilo of
law, conspiring together and mutually helping with one another, shabu for P500,000 and to meet at the Mercury Drug Store in
did then and there wilfully, unlawfully and feloniously sell and Monumento later that afternoon. Carlos would bring the shabu
deliver to SPOI GILBERT G. SANTOS who posed as buyer, One (1) and SPO3 Santos the money. Carlos informed SPO3 Santos that
blue plastic bag labelled "SM Shoemart" containing one (1) piece he would be wearing a striped T-shirt and that he would be
of newsprint with one (1) transparent plastic bag containing bringing with him a companion. Per Carlos’ instructions, SPO3
yellowish crystalline substance "METHAMPHETAMINE Santos would come alone.
HYDROCLORIDE" (Shabu) and having a weight of 992.30 grams,
a regulated drugs, knowing the same to be such. SPO3 Santos and Police Sr. Insp. Mabanag then prepared the
"boodle money" consisting of seven (7) bundles of newspaper
CONTRARY TO LAW.1 cuttings6 that was supposed to represent the P500,000 purchase
money. A genuine P500 bill7 was placed on top of one of the
Arraigned on November 4, 1994, appellants pleaded not guilty to bundles and another P500 bill8 at the bottom of the same bundle.
the above charges. Trial ensued thereafter. SPO3 Santos initialed the red portion of the Philippine flag in
each of the bills.9 Between the bills were the newspaper cuttings.
The prosecution’s version, as pieced together from the testimonies The bundles, each about three (3) inches thick, were wrapped
of witnesses SPO3 Gilbert Santos,2 SPO1 Gerico Bacani,3 PO2 with straps from the United Coconut Planters Bank and tied with
Elleonito Apduhan4 and PO3 Noel Castañeto,5 is as follows: a rubber band. The boodle money was then placed in plastic10
and sealed with scotch tape.11 SPO3 Santos rehearsed how he
In the morning of October 24, 1994, a police informant code- would show the drug pushers the boodle money.
named "Stardust" arrived at the Narcotics Command (NARCOM)
in Camp Ricardo Papa, Bicutan, Taguig, and informed Police Sr. The police held a briefing and formed a team led by Inspector
Insp. Franklin Moises Mabanag of two Chinese nationals who Rolando Ibañez. The members of the team included SPO3 Santos,
were supposedly "big time" drug pushers. She claimed to have SPO1 Gerico Bacani, PO3 Elleonito Apduhan, PO1 Noel
regular contact with one of the alleged drug pushers, a certain Castañeto, and a certain SPO1 Juspid. SPO3 Santos was
Carlos Tan Ty. Stardust, the informant, was a woman who had designated poseur-buyer and SPO1 Apduhan, his backup. The
previously provided the police with information that led to the team then proceeded to the meeting area for reconnaissance.
confiscation of one (1) kilo of shabu.

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CASES ON EVIDENCE

SPO3 Santos and the rest of the buy-bust team, dressed in Leslie Maala,15 a forensic chemist from the PNP, received a letter-
civilian attire, arrived at the Mercury Drug Store at the corner of request16 from Police Sr. Insp. Franklin Moises Mabanag to
Edsa, Monumento, Caloocan City later that afternoon. SPO3 conduct a laboratory examination on the substance taken from
Santos and Stardust waited inside the Mercury Drug Store while the accused. Ms. Maala took random samples of about one (1)
the other agents strategically positioned themselves several gram from different parts of the substance and, per their
meters from the store, where the suspects could not spot them. standard operation procedure, performed physical, chemical and
confirmatory examinations thereon. The physical examination
The suspects arrived at around 6:00 in the evening. Stardust consisted of weighing the entire substance. The chemical
pointed to SPO3 Santos two (2) Chinese nationals, later identified examination, in turn, consisted of the Simons test and the
as the accused, alighting from a tax. SPO3 Santos stepped out of Marquis’ test. Thence, a thin layer chromatography test was
the store and introduced himself to the two (2) Chinese nationals performed. The examinations were supervised by the Chief of the
as the person whom they talked with over the phone that Chemistry Division.
morning. He told the suspects that he brought the money with
him, and showed the accused the boodle money by opening the From the examinations thus conducted, Ms. Maala concluded
wrapper and showing half of the bundle with the P500 bill on top. that the sample was positive for methamphethamine
He then gave the money to one of the Chinese nationals, later hydrochloride. The results of Ms. Maala’s examination were
identified as the accused Carlos Tan Ty. The latter’s companion, reflected in her initial (Chemistry Report No. 0-793-94 dated
later identified as accused Nelson Hong Ty, in turn handed SPO3 October 25, 1994),17 as well as in her final (Physical Sciences
Santos a blue plastic bag12 with the marking of "SM" or Report D-793-94 of even date)18 report. The final report states
"Shoemart." The two looked at the money while SPO3 Santos that the entire substance weighed 992.3 grams.
opened the bag handed to him by Nelson Hong Ty. SPO3 Santos
found a yellowish substance13 sealed in transparent plastic and The accused, in their defense, countered that no buy-bust
wrapped in newspapers. The accused identified the substance as operation took place. They denied selling any shabu and accused
shabu. Thereupon, SPO3 Santos held Carlos by the hand as the the police of extortion.
other members of the team came to help him effect the arrest of
the two suspects, who were later brought to Camp Crame, Accused Carlos Tan Ty,19 38, described himself as married and
Quezon City. engaged in the business of buying and selling lumber and
furniture. At the time of his testimony, he had been staying in the
After the buy-bust operation, SPO3 Santos, PO3 Bacani and PO3 Philippines for more than ten years, although sometimes he
Apduhan placed their respective signatures14 on the SM plastic would go home to Mainland China. Previously, he owned a
bag, the newspaper wrappings and the transparent plastic sawmill business in Malanday but shifted to the furniture
containing the substance. The yellowish substance, together with business in 1987, with Peter Chua and Nestor Lim as his
its wrappings, was then delivered by SP01 Noel Castañeto to the partners. Their office is located in Karuhatan near a gasoline
Crime Laboratory of the Philippine National Police (PNP). The station along the MacArthur Highway. Their customers include
boodle money was handed over to the property custodian. Arenas Furniture and Unicorn Furniture. The business is not
registered in Carlos’ name, however, since he is a Chinese citizen.

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Accused Nelson Hong Ty,20 24, and originally from Fuchu, by eight men. Carlos and Nelson asked what was happening. The
China, had been residing in the Philippines for around seven (7) men, who were in civilian attire, shoved Carlos and Nelson into a
years before his arrest. Though not licensed or authorized to work red Nissan Sentra. The two were not able to shout for help.
in the country, Nelson was employed as a factory worker and
electrician in Everwood Furniture, a business owned by one Inside the car, Carlos was blindfolded.
Jessie Cua and located in Lincoln Street, Malinta, Valenzuela.
Carlos and Nelson were then taken to the Anito Hotel in
Testifying with the aid of an interpreter,21 they narrated their Monumento and brought to separate rooms.
account of the events that transpired on October 24, 1994.
Once inside the hotel room, Carlos was ordered to face the wall.
That afternoon, Carlos was in Everwood Furniture in Lincoln His blindfold was removed but he was boxed every time he looked
Street, Malinta conducting some business with the shop owner at the men. The men frisked him, seized his wallet and took
when Nelson, an employee there, entered the office. Nelson had therefrom cash amounting to P78,000. His license, cellular
just come from the factory and had gone to the Everwood office in phone, pager and watch were also taken from him.
Malinta to report to his boss. Nelson asked how Carlos’ business
was going. Carlos replied that it was okay. Seeing it was almost Carlos’ captors sat him on the bed and one of them (a policeman,
5:00 p.m., Carlos asked Nelson if he was done working. Nelson according to Carlos) asked him questions like what business he
replied, "Yes, my work is finished," and that he was in fact on his was engaged in. Carlos tried to answer the man’s questions but
way home. Carlos told him that he was supposed to meet a they could not understand him. They got mad and boxed him.
customer, a certain Chua Ping, in Monumento to take some
orders. Carlos offered to bring Nelson home to the latter’s house An hour later, a Chinese-speaking man armed with a gun entered
in Navotas if Nelson was willing to wait. the room. Carlos pleaded with the man to help him since he did
not know why he was arrested. The man asked him if he had any
Earlier that afternoon, Chua Ping called up Carlos and said he money. He said Carlos must have money since he had a business.
needed lumber and plywood for his new house. He wanted to The man offered to help him in exchange for P500,000. If Carlos
meet with Carlos in Monumento so Chua Ping’s carpenter could would not give the money, the man warned, he would not arrange
give Carlos a list of the lumber he needed. He told Carlos to meet with the police for a settlement; Carlos "might [even] be thrown in
him between 5:00 and 6:00 p.m. at a restaurant located at the Marikina." Carlos told the man that he did not have that kind of
ground floor of No. 316, Monumento, along Edsa. money. He said that with the help of his friends he could raise
only P50,000. The interpreter told Carlos to wait for him and he
Nelson took Carlos’ offer to take him home and rode with Carlos will talk to the policemen.
to Monumento in Carlos’ car, a red Toyota. Upon arriving in
Monumento at around 6:00 p.m., Carlos parked his car in front of Nelson was also brought to one of the hotel rooms and instructed
the Prudential Bank. A boy even offered to clean the car. to sit on the bed. Two men were in the room with him. After an
hour, a person who knew how to speak Chinese entered the room.
The two walked along EDSA to meet Chua Ping. They were about The man, who did not identify himself, carried a firearm. He
15 arms-length from the car when they were suddenly accosted demanded P50,000 from Nelson, otherwise, the man warned,

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something bad will happen to him. "Papatungan ako ng kaso," vehicle signaled them to stop. They proceeded to Camp Crame
Nelson said in court. Nelson told the man, "I am just working. thereafter.
Where can I get such a big amount?"
At Camp Crame, Carlos and Nelson were placed in handcuffs.
Carlos and Nelson were then brought to their captor’s vehicles. Later in the evening of October 25, 1994, they were provided with
Carlos was handed his cellular phone so he could call up friends a piece of paper with some writings. The two were made to sign
or relatives who could help him produce the sum of P200,000. the paper and place their thumb marks thereon. They told Carlos
Carlos attempted to call them up but there was no reply. that he would be released lunchtime the next day, October 26,
when his wife brought the money they demanded. Nelson was
Riding in separate vehicles, Carlos and Nelson were brought to given the same assurance of release.
the latter’s house in Navotas between 9:00 and 9:30 p.m. Nelson
and some of the policemen went inside the house while Carlos Carlos and Nelson were not released the following day, however.
remained in the car. The men took Nelson’s clothes, an electric At around 11:00 a.m., October 26, Carlos and Nelson were
fan, a gas stove, and a round plastic table from the house, and presented to the media.
loaded them into the car.
Carlos’ common-law wife, May Ann Ty, testified to corroborate the
The Chinese-speaking man asked Carlos if he was married. accused’s testimony. Mary Ann and Carlos have been living
Carlos told him he was. The man informed him that they would together since 1989, and have three children. According to Mary
next go to Carlos’ house. He instructed Carlos to tell his wife to Ann, appellant has been engaged in the furniture business since
borrow from her friends the money they demanded. 1989.

Carlos and his captors arrived at his house at around 11:00 p.m. Mary Ann testified that between 11 in the evening of October 24,
Carlos’ wife answered the door. Four (4) of the men accompanied 1994 and 12 midnight the next day, Carlos, along with a group of
Carlos into the house, one of them holding him by the shirt. about six (6) men in civilian attire arrived at the couple’s
Carlos told his wife that his companions were policemen who residence. They asked her if she knew Carlos. "Yes," Mary Ann
arrested him "because of the lumber," and were now demanding replied, and inquired what they needed from him. She also asked
P200,000 from him. Carlos added that he had left his car in the men who they were but they did not say anything. (In court,
Monumento. Carlos’ captors then brought him back to their car. Mary Ann identified one of them as "Abduhan," apparently
From the car, Carlos saw his wife ride in one of the policemen’s referring to PO3 Elleonito Apduhan, one of the agents who
vehicles. Carlos was told that his wife was going to see her testified against the accused.) The group informed her that Carlos
friends. "was arrested in connection with the woods." It occurred to Mary
Ann that appellant was arrested "perhaps [because] he was able
The vehicle Carlos was riding proceeded to Karuhatan when one to buy woods without receipts." The men demanded that Mary
of the policemen received a message from a pager, and the group Ann produce the sum of P200,000, or else "something bad will
transferred to the BB gasoline station. They stayed there for 15 to happen to [Carlos]." They told her that they would return at 2:30
20 minutes until the policeman received another message from in the morning. Before they left, the men searched the house and
his pager. They drove to Monumento when a hand from another took her baby’s thermos and the batteries of a cellular phone.

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went to Camp Crame in the afternoon of October 25, 1994 to

After the men left, Mary Ann changed her clothes and woke up inquire about her husband, she saw the same white car parked in
her brother so that he could accompany her to borrow the money. front of one of the offices. The vehicle bore the same plate number
One of her friends, a certain John Ang, subsequently promised to as the one the men brought with them.
lend her P130,000 through his secretary who would bring the
money to Karuhatan. Mary Ann returned home at past one in the The night the men came, Mary Ann learned from Carlos that he
morning and waited. left his car in front of the Prudential Bank at the Monumento
Circle. Mary Ann was able to retrieve the car, a Toyota, two days
Two of the men returned at about 5:00 that same morning. Two after Carlos’ arrest, or on October 26, 1994, at past eight in the
minutes later, Carlos entered the room, pushed by one of the morning. When she went to recover the car, a teenaged boy
men. "What will you do to me?" Carlos asked in broken Tagalog. approached her and asked her if she owned the car. "Yes," she
The man replied by ordering him, "Bumalik ka na sa kotse." replied.22

The men then told Mary Ann to go with them so they could get Norlito Dotimas, 18, and a resident of Bagong Barrio, Caloocan
the money from John Ang’s secretary. Mary Ann thus rode with City was the teenaged boy from the parking lot. Presented as a
the men in a white vehicle. She decided to go with them alone witness for the defense, Norlito testified that since April 1994 he
since her relatives were busy. The vehicle first proceeded to had been earning a living guarding and washing cars parked in
Maysilo, Bulacan and then to Karuhatan, Valenzuela where Mary the Prudential Bank. The bank is beside the Mercury Drug Store
Ann received $4,000 and P30,000 in cash from John Ang’s in front of the Monumento in Caloocan. Norlito works in the
secretary. Back in the car with the money, Mary Ann asked the parking lot from eight in the morning to seven in the evening.
men where her husband was. They told her she would see her
husband when she went home before sunset. Norlito narrated that at about 5:30 in the afternoon of October
24, 1994, a red car arrived at the Prudential Bank parking lot.
Mary Ann then asked to whom should she give the money. They Two men, who later turned out to be the accused, alighted from
replied, "Of course for us," and the man to her left immediately the car. Norlito offered "the tall guy," referring to accused Carlos
grabbed it from her. They kept on uttering words to the effect that Tan Ty, to watch and wash the latter’s car. Carlos agreed and
"something bad will happen to [her] husband." They said they walked on. Norlito stared at the two men as they left, wondering
planned to bring her husband to the doctor for a check-up so in whether they were Chinese or Japanese. Norlito said that the men
case the couple filed a complaint, there would be no proof that were not carrying anything with them.
anything happened to him. The men dropped Mary Ann off along
Karuhatan in MacArthur Highway. Mary Ann jotted down the Norlito had just started washing the back of Carlos’ car when he
plate number of the men’s white car then went home to saw that the two men, then about ten (10) meters away, were
Valenzuela. "pinagkakaguluhan." The taller man (Carlos) was held by the
collar and then pushed into the car. The smaller one (Nelson) was
The men did not return Carlos home despite their assurances. poked with a gun on his right temple, handcuffed and also forced
Mary Ann’s father managed to trace the whereabouts of her into the car.
husband through the vehicle’s plate number. When Mary Ann

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At around 8:00 a.m. the next day, October 25, 1994, someone
took Carlos’ car from the Prudential Bank parking lot. Norlito was (3) The accused were immediately brought to Camp Crame after
not able to charge for watching and washing that car, however, their arrest. Sr. Insp. Mabanag prepared a spot report, which he
since he was busy washing another. submitted to Supt. Charles Galinan, chief of the NARCOM Special
Operation Unit. The buy-bust operation was not only reflected in
Norlito admitted that he was requested by Maryann Ty, whom he said spot report but also in a pre-operation report prepared by Sr.
first met on December 9, 1994 in the Prudential Bank parking lot, Insp. Mabanag before the operation, and in a logbook containing
to testify regarding her husband’s disappearance. Norlito agreed the details thereof. Not all the entries in the pre-operation report,
to testify, and Mary Ann promised to pay him P200, the such as the denominations of the bills used as boodle money,
equivalent of his daily earnings.23 were entered in the logbook, however. Sr. Insp. Mabanag claimed
they did not maintain a police blotter since they were a special
The defense also offered the testimony of Sr. Insp. Franklin operation unit.
Moises Mabanag, who was presented as a hostile witness. Sr.
Insp. Mabanag was the chief of the Second Operation Group- (4) Sr. Insp. Mabanag denied that his operatives demanded
Special Operation Unit of the NARCOM when the accused were money from the accused in exchange for the latter’s release.24
arrested. He testified to certain aspects of the buy-bust operation
that led to the arrest of the accused. The defense also presented, as hostile witnesses, SPO3 Gilbert
Santos, PO3 Elleonito Apduhan and PNP forensic chemist Leslie
(1) At the time he testified, Sr. Insp. Mabanag had known Maala, all of whom previously testified for the prosecution.
Stardust for more than two (2) years, having first met her in the
place where she worked nightly. He eventually convinced her to The testimony of SPO3 Santos yielded the following additional
work with them, and gave her the code-name "Stardust." Sr. Insp. information:
Mabanag declined to divulge Stardust’s real name in court "for
security reasons." He revealed, however, that Stardust was (1) The serial numbers and the denominations of the genuine
neither a drug pusher nor a drug user; she did not have any money used in the buy-bust operation were not recorded in their
arrest record. She was usually given cash as "incentive" for the police logbook, since their Commanding Officer said it was no
information she provided; Sr. Insp. Mabanag, though, could not longer necessary. They did not place any fluorescent powder on
remember how much he gave her in this case. He described the boodle money.
Stardust’s participation in the operation as "indispensable."
(2) He had never met either of the accused before their arrest nor
(2) The first time Sr. Insp. Mabanag first heard about Carlos Tan did he have any record or any "A-1 information" regarding them.
Ty was when Stardust reported on October 24, 1994 that the
accused was actively engaged in the business of selling shabu. (3) They did not conduct a "test-buy" or a surveillance of the
They conducted a backgrounder on the accused, and their activities of the accused to determine the veracity of the
investigation yielded several persons with the same name as information Stardust had provided.
Carlos Tan. They could not verify, however, if any one of these
persons was actually the accused Zheng Bai Hui.

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CASES ON EVIDENCE

(4) They were not armed with a warrant when they effected the I. That the trial court erred in depriving the accused of the prized
arrest of the accused.25 ideal of ‘the cold neutrality’ of an impartial judge as part of
procedural process. It assumed the role of the prosecutor and
PO3 Elleonito Apduhan also testified that he did not know any of judge in the case, and further unduly and arbitrarily curtailed the
the accused before their arrest. He confirmed that no test buy right of the accused on the cross examination of the witnesses
was conducted by their office. He denied having gone to the house against them.
of accused Carlos Tan Ty and demanding money from the latter’s
wife.26 II. That the trial court erred in giving credence to the so-called
"buy-bust" story of the prosecution despite the unmistakable
Leslie Maala, for her part, expounded on the examinations she hallmarks of fabrication thereof, and corollarily, in concluding
conducted on the subject substance. Quite pertinently, she that both accused were caught in flagrante delicto in the act of
testified that the tests she performed, namely, the Simons test, selling methamphetamine hydrochloride to a police poseur buyer.
the Marquis’ test and the thin layer chromatography, are
qualitative, not quantitative tests. They are not designed to III. That the trial court erred in refusing disclosure of the identity
determine the purity of the specimen. Ms. Maala admitted she of and putting on the witness stand the alleged confidential
never conducted any quantitative test on the substance since informant who supposedly arranged the buy-bust that led to the
there was no request for such an examination.27 arrest of both accused, and thereby, infringed upon the
fundamental right of the accused to confront and cross-examine a
The trial concluded, Judge Adoracion Angeles of the Caloocan material witness against them.
City Regional Trial Court, Branch 121, rendered a decision
convicting both accused thus: IV. That the trial court erred in convicting both accused on the
basis of the evidence of the prosecution showing they were the
WHEREFORE, premises considered, the accused ZHENG BAI HUI victims of police instigation, which entitles them to acquittal.
a.k.a. CARLOS TAN TY and NELSON HONG TY a.k.a. SAO YU are
hereby found GUILTY beyond reasonable doubt of the offense of V. That the trial court erred in imposing upon the accused the
Violation of Section 15, Article III, RA 6425 in relation to Section capital penalty of death despite the absence of expert evidence on
21-B of the same Act and each is accordingly sentenced to suffer the percentage of the pure quantity of the alleged shabu sued
the penalty of DEATH and to pay a fine of TEN MILLION PESOS upon called for in Resolution No. 3, dated March 8, 1979 of the
(P10,000,000.00). With costs. Dangerous Drugs Board, and of Sec. 16, Art. III, of RA 6425.29

SO ORDERED.28 Appellant Nelson Hong Ty, in whose behalf Atty. Leven Puno filed
another brief, assigns similar errors on the part of the trial court:
The case is now before this Court for automatic review.
I THE TRIAL COURT COMMITTED A GRAVE ERROR WHEN IT
Appellants, in the brief filed by Atty. Nestor Ifurung, contends: KNOWINGLY DEPRIVED THE ACCUSED OF THE "COLD
NEUTRALITY" OF AN IMPARTIAL JUDGE AS A PART OF THEIR
RIGHT TO PROCEDURAL PROCESS.

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CASES ON EVIDENCE

2. THE COURT ERRED IN CONVICTING THE ACCUSED BEYOND

II THE TRIAL COURT COMMITTED A GRAVE ERROR IN GIVING REASONABLE DOUBT.31
FULL FAITH AND CREDIT TO THE "BUY-BUST" STORY OF THE
POLICE OFFICERS. The arguments raised by appellants may be reduced to the
following issues:
III THE TRIAL COURT COMMITTED A GRAVE ERROR IN
FINDING AND CONCLUDING THAT BOTH ACCUSED WERE (1) Whether the failure of a prosecution witness to take his oath
CAUGHT IN FLAGRANTE DELICTO IN THE ACT OF SELLING invalidates the proceedings before the trial court.
METHAMPHETAMINE HYDROCHLORIDE TO A POSEUR BUYER.
(2) Whether appellants were denied their right to an impartial and
IV THE TRIAL COURT COMMITTED A GRAVE ERROR IN disinterested tribunal.
REFUSING DISCLOSURE OF THE IDENTITY AND REFUSING TO
PUT ON THE WITNESS STAND THE ALLEGED CONFIDENTIAL (3) Whether the refusal of the trial judge to allow disclosure of the
INFORMANT WHO ALLEGEDLY ARRANGED THE BUY-BUST identity of the informer deprived appellants of their right to
DRAMA THAT LED TO THE ARREST OF BOTH ACCUSED. confront and cross-examine said witness.
THERE WAS DENIAL BY THE TRIAL COURT THE RIGHT OF THE
ACCUSED TO CONFRONT AND CROSS-EXAMINE A WITNESS (4) Whether the prosecution proved appellants’ guilt beyond
AGAINST THEM. reasonable doubt.

V THE TRIAL COURT COMMITTED A GRAVE ERROR IN (5) Whether the death penalty should be imposed upon
CONVICTING BOTH ACCUSED AND SENTENCING THEM TO appellants.
THE CAPITAL PUNISHMENT OF DEATH DESPITE THE FACT
THAT THEIR GUILT HAS NOT BEEN PROVED BEYOND I
REASONABLE DOUBT. UNDER THE LAW THEY ARE ENTITLED
TO AN ACQUITTAL ON THE GROUND OF REASONABLE Appellant Nelson Hong Ty argues that the failure of SPO1 Jerico
DOUBT.30 Bacani to take an oath before he testified deprived the accused of
their right to due process. It is contended that they are entitled to
In his supplemental brief, appellant Nelson Hong Ty adds that: a new trial.

1. THE TRIAL COURT COMMITED GRAVE ABUSE OF That SPO1 Bacani, a witness for the prosecution, did not take an
DISCRETION AMOUNTING TO LACK OR EXCESS OF oath before his testimony is undisputed. The omission appears to
JURISDICTION IN RENDERING THE ASSAILED DECISION have been brought about by circumstances starting from the
BASED PARTLY ON THE TESTIMONY OF A WITNESS WHO hearing of November 14, 1994. SPO3 Gilbert Santos was
THROUGH INADVERTENCE WAS NOT SWORN, BEFORE testifying on cross-examination when Atty. Leven Puno, counsel
TESTIFYING FOR THE PROSECUTION. for the defense, moved for a continuance.32 The trial court
granted counsel’s motion.33 At the start of the next hearing, on
November 17, 1994, the prosecutor called on SPO1 Jerico Bacani

251
CASES ON EVIDENCE

as a witness34 notwithstanding SPO3 Santos’ unfinished

testimony. Atty. Puno objected and reminded the court that he Langford makes reference to the following excerpt in Hawks v.
was still cross-examining SPO3 Santos.35 In response, the Baker,45 also cited by appellant:
prosecutor informed the court that SPO3 Santos was not present
in the courtroom36 despite notice.37 After some discussion It is the duty of the counsel offering a witness to move that he
between the court and counsel for the respective parties,38 Atty. may be sworn, and thus be qualified to testify. * * * Thus far the
Puno acceded to continue the cross-examination of SPO3 Santos counsel for the opposite party has no concern with the
at a subsequent date.39 The court even dictated an order to that transaction. He has a right to presume that the person taking the
effect.40 The prosecutor then offered the testimony of SPO1 stand in the character of a witness has been duly sworn. Of
Bacani,41 and conducted the direct examination, without the course, his omission to inquire and ascertain the fact cannot be
witness having first taken an oath. Neither did SPO1 Bacani take considered as any waiver of his right to object to the incorrectness
an oath at the continuation of his testimony on November 23, of the proceeding if the person supposed to be sworn was in fact
1994. never sworn. No man can be considered waiving a right which he
is unconscious of possessing. * * * The defendant has not had a
The failure of a witness to take an oath prior to his testimony is a trial of his cause on legal evidence, but partly on that which is
defect that may be waived by the parties.42 Appellant Nelson illegal.
Hong Ty concedes to this rule.43 He asserts, however, that he did
not waive his right to object to the lack of oath, since the Langford states that "knowledge or want of knowledge is the true
inadvertence was discovered only after the judgment of conviction test" in determining whether there was a waiver of the lack of
by the trial court when counsel was preparing the brief for oath. We find, however, that this test would open the door to
automatic review by this Court. As authority for this argument, fraud since any party can claim want of knowledge of the defect
appellant cites Langford v. United States,44 where the Court of before verdict is rendered. Such a claim would be exceedingly
Appeals of the Indian Territory declared that: difficult to verify. We believe that the better test would be not
whether a party had knowledge of the lack of oath but whether he
x x x it would seem that knowledge or want of knowledge [of the had the opportunity to know of the lack of oath. If a party ought
lack of oath] is the true test in this class of cases. In a note to to have known of the lack of oath but did not object thereto, he
section 264b of Wigmore’s Edtion (16th) of Greenleaf on Evidence cannot later be heard raising such an objection. Thus, in State v.
the following appears: "Whether he may [have a new trial] if a Embrey,46 the Supreme Court of New Mexico held:
witness on the other side, testified without having been sworn at
all quære? If the omission of the oath was known at the time, it The testimony or declarations of any unsworn person, given or
seems he cannot; but, if it was not discovered until after trial, he made in the presence of the trial judge and of the parties and
may." Mr. Thompson, in his work on Trials (volume 1, § 365) their attorneys, under such circumstances that they knew or
says: "It is the duty of the party calling the witness to see that he should have known what the unsworn individual was doing and
is sworn, though, if the oath is inadvertently omitted, the saying, may be considered by the jury as that of any sworn
objection will not be good after verdict;" but at once adds, "The witness. Where no objection is promptly made to such a
objection must be made as soon as it is discovered, or it will be proceeding, it is too late to urge the objection on motion for new
deemed waived." x x x. trial. (Italics supplied.)

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First, they assert that the judge "actively assumed the role of the
In the case at bar, defendant and his counsel were present at the prosecutor"48 in the examination of Norlito Dotimas. Norlito, the
hearing of November 17, 1994 when SPO1 Bacani was presented "watch-your-car boy," testified that appellants did not arrive in a
as a witness. They did not, however, object to the lack of oath. taxi but in a car driven by appellant Carlos Tan Ty. In resolving
Nor did they pose any objection when SPO1 Bacani continued his this argument, it would be helpful to examine the entire
testimony on November 23, 1994; Atty. Puno even cross- transcript of Norlito’s cross-examination and the circumstances
examined the witness. In State v. Doud,47 the Supreme Court of surrounding the questioning appellants find so objectionable.
Oregon had occasion to rule that:
The prosecutor began the cross-examination by asking the
If the defendant had wished that the x x x witness should have witness who requested him to testify. Norlito answered that it was
been sworn, he should have been observant and should have Mary Ann Ty, the wife of appellant Carlos Ty. Asked when he was
mentioned the matter in the trial court. We are certain that had requested to testify, Norlito replied he could not remember. The
the matter then been mentioned an appropriate oath would have prosecutor continued:
been administered. In all likelihood, it would have produced no
different effect, for all thought that an oath had been Q But you are sure that when you came to this Court this
administered. It is now too late to present the objection. This morning, she accompanied you, is that correct?
assignment of error is dismissed as lacking in merit.
A Yes, sir.
So we hold in this case.
Q And you neither received a subpoena coming from the Court to
In any event, the granting of a new trial because of said omission testify today, is that correct?
would be pointless because even if testimony of SPO1 Bacani
were excluded, it would not materially affect the totality of the A None, sir.
evidence for the prosecution. His testimony is merely
corroborative of those of SPO3 Gilbert Santos, PO2 Elleonito Q And where did she pick you up before you came to this Court?
Apduhan and PO3 Noel Castañeto and could therefore be
dispensed with, without affecting the prosecution’s case or A From Arte Subdivision, sir.
prejudicing that of the defense.
Q Where is that Arte Subdivision?
II
A In BBB, sir.
Appellants also contend that they were deprived of their right to
the cold neutrality of an impartial judge, and attempt to establish COURT:
a pattern of partiality on the part of RTC Judge Adoracion
Angeles. Q Valenzuela?

A Yes, your Honor.49

253
CASES ON EVIDENCE

A Yes, your Honor.

A couple more questions were asked by the prosecutor when the
judge interrupted him. Apparently, the judge wanted to clarify COURT:
where Mary Ann picked up Norlito because when he recited his
personal circumstances, he said that he resided in Bagong Barrio, Q Tell to the Court how did Mary Ann Ty came to know your
Caloocan. The clarification led to several more questions involving residence?
when and where Norlito and Mary Ann agreed to meet in Arte
Subdivision. Thereafter, she ordered the prosecutor to continue A I accompanied her in our house, your Honor.
with the cross-examination.
COURT:
Before the prosecutor could continue, however, the judge again
asked a series of questions, all pertaining to when Norlito and Q So, prior to December 9, 1994, Mary Ann Ty had already talked
Mary Ann first met. These questions, the defense claims, were with your relative to this case?
aimed "to discredit"50 the witness:
A No, your Honor.
FISCAL MANANQUIL:
COURT:
Q After the incident, Mr. Witness, you did not even…(interrupted).
Q When did you accompany Mary Ann Ty to your house then?
COURT: (Butts in for clarificatory questions…)
A When I was washing cars, your Honor.
Q What was the date on Friday?
COURT:
A December 9, 1994, your Honor.
Q When was that?
Q In other words, is it your testimony now that it was only on
December 9, 1994 that you came to know that you will become a A I cannot remember, sir/your Honor.
witness in this case?
COURT:
A I was told by a woman by the name of Mary Ann, your Honor.
Q How many days prior to December 9, 1994?
COURT:
A I cannot remember, sir/your Honor.
Q Going back to the question of the Court. Is it your testimony
now that it was only on Friday afternoon of December 9, 1994 COURT:
that you came to know that you will be a witness in this case?

254
CASES ON EVIDENCE

Q Could it be two (2) weeks or two (2) days prior to December 9,

1994? Q Is it your testimony now that you watched only four (4) cars
from morning up to the evening?
A I cannot remember, your Honor.
A Yes, your Honor.
Continue fiscal.51
COURT:
After several questions by the prosecutor, the judge made this
telling observation: Q What are the colors of the car of the three other cars which you
washed and watched on that day, together with the car owned by
Make it on record that the Court has observed that from the very the accused driven by Carlos Ty?
start of the testimony of the witness, he was looking in only one
direction, outside. He never look to the persons profounding [sic] A White, light green and blue, your Honor.
the questions, whether the Court, Whether to the prosecutor, or
to the interpreter or even to the counsel for the accused.52 COURT:

Another question was then posed by the prosecutor. The witness Q Do you also know the owners?
answered, but the judge promptly noted—
A No, your Honor.
Likewise, make it on record that after the Court has observed,
that he started to look at the persons profounding [sic] the FISCAL MANANQUIL:
questions.53
Q You said that you cannot remember the time….
The prosecutor continued with the cross-examination, delving on
the scene before and during appellants’ arrest. This was followed (interrupted)
by another series of questions from the judge which, according to
appellants, "make it appear that [the witness] gave testimony for COURT: (Clarificatory questions …)
the defense because he was bribed"54 by Mary Ann Ty.
Q By the way, how much were you paid for the car which you
COURT: washed and watched?

Q Tell to the Court how many cars did you wash and watched on A It depends upon the amount given by the customer.
that particular day when the two accused were allegedly arrested?
COURT:
A Four (4) cars, your Honor.
Q On that day, how much was given to you by the owners of the
COURT: cars you washed, the four (4) cars.

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CASES ON EVIDENCE

Q Did she (referring to Mary Ann Ty) promise you to give

A P20.00 something?

COURT: A No, your Honor.

Q For four (4) cars? COURT:

A Only one, per car, your Honor. Q Is it your testimony now that you come to the Court without
receiving a subpoena and yet you abandon your work as a car-
COURT: wash boy and you will not receive any single cent?

Q P20.00 for each car? A There was, your Honor.

A Yes, your Honor. COURT:

COURT: Q How much were you paid today?

Q Is it your testimony now that you are paid for P20.00 for each A None, yet, your Honor.
car you washed?
COURT:
A Yes, your Honor.
Q How much did she promise to give you?
COURT:
ATTY. PUNO:
Q In other words, you received P80.00 on that particular day?
May I request your Honor to specify the person, he might not
A Yes, your Honor. know ….

COURT: COURT:

Q So today you will earn anything? Q According to him, it was Mary Ann Ty, who fetched you at Arte
Subdivision. Is it your testimony now that it was Mary Ann Ty
A None, your Honor. who brought you to this Court now?

COURT: A Yes, your Honor.

COURT:

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CASES ON EVIDENCE

Q You testified a while ago that .......Was she the one who Q You testified that you met Mary Ann Ty in the parking lot on
promised to give you? December 9, 1994, was it right?

A Yes, your Honor. A Yes, your Honor.

COURT: COURT:

Q How much? How much did Mary Ann Ty promise to give you Q And also, on that day, that you agreed with Mary Ann Ty that
today? she will fetch you at the Arte Subdivision at BBB, Valenzuela,
Metro Manila?
A The amount I will earn for this day, your Honor.
A Yes, your Honor.
COURT:
COURT:
Q How much?
Q Tell to this Court why do you still accompany her to your house
ATTY. PUNO: and show your house to her at Bagong Barrio, Caloocan City on
December 9, 1994?
"Kikitain".. His earning this day, your Honor is what he said.
A So, that, I can relate to her the incident, your Honor.
COURT:
COURT:
Q Precisely, how much?
Q Why? Could you tell to the Court today? You cannot tell to her
A I cannot estimate, your Honor. the place where you were working, and that you still have to
accompany her to your house?
FISCAL MANANQUIL:
A No, sir.
Q More or less?
COURT:
A P200.00, sir.55
Continue, Fiscal.56
The judge then returned to the subject of Mary Ann and Norlito’s
initial meeting. The cross-examination by the prosecutor proceeded until the
judge again propounded questions, picking up where she left off.
COURT: (clarificatory questions from the Court).

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The defense construes this line of questioning as "badgering"57

on the part of the judge: Q What time do you usually leave the parking area, your regular
time for leaving?
COURT:
A 6:00 o’clock in the evening, your Honor.
Q Why did you abandon your work on December 9, 1994 and you
accompanied Mary Ann Ty to your house and showed to her your COURT:
house?
Q So, in other words, you did not earn for two (2) hours anymore?
A I left my work, because I narrated to her the incident, your
Honor. A Yes, your Honor.

COURT: COURT:

Q Did she give you something on that day on December 9? Q And yet, you claimed that you were not paid by Mary Ann Ty?

A No, your Honor. A Yes, your Honor.

COURT: COURT:

Q Are you sure? Anymore, Fiscal?58

A Yes, your Honor. The cross-examination ended with a question from the
prosecutor. The judge also propounded a few more questions
COURT: again relating to the alleged meeting between Norlito and
Maryann.
Q What time did you leave at the parking area?
Thereafter, Atty. Puno proceeded with the witness’ re-direct
A In the afternoon, sir/your Honor. examination. After several questions by Atty. Puno pertaining to
the conversation Norlito had with Mary Ann at the witness’ house,
COURT: the judge interjected with her own questions on the subject. At
this point, Atty. Puno tried to protest since the witness was
Q About what time? "getting confused." The judge, according to appellants, only
"exhibited greater vehemence and further tried to push him to the
A 4:00 o’clock in the afternoon, your Honor. wall,"59 thus:

COURT: ATTY. PUNO:

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CASES ON EVIDENCE

Q In the parking lot … Did she tell you in the parking lot?
Q In fairness to the witness, he is getting confused, your Honor.
A No, your Honor.
COURT:
COURT:
The question is one by one. I am trying to find out the
truthfullness of his testimony, counsel Q How did you bring her to your house?

COURT: A She went with me, because I told her to go with me, your
Honor.
Q Is that what happened? She just glanced at you? Who started
introducing one’s self, yourself or herself? COURT:

A The person by the name of Mary Ann Ty, your Honor. Q The first time that you and Mary Ann met each other at the
parking lot, where you were working as a car-wash boy, what
COURT: transpired between you and Mary Ann Ty in the afternoon of
October 24, 1994?
Q Who described each of you? Was she or were you the one?
A I was the person whom she asked or inquired to, your Honor.60
A She told me and I volunteered – "lakas-loob". She told me to
testify in this case, your Honor. It is also claimed that the judge then "exploit[ed] the confusion of
the witness" by "a maze of baffling trivials [sic]":61
COURT:
COURT:
Q And you agreed?
Q So, at the parking lot, she already asked you to testify in this
A And I readily agreed, your Honor. case.

COURT: A Not yet, your Honor..

Q Where did it happen when she said you will testify and you COURT:
agreed?
Q What REALLY transpired between you and Mary Ann at the
A In our house, sir/your Honor. parking lot?

COURT: A She asked me, your Honor.

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CASES ON EVIDENCE

COURT:
COURT:
Q Is it your testimony that she immediately approached you at
the parking lot? Q Tell to the Court what precipitated you to accompany her to
your house?
A She asked me, your Honor.
A So that she will know my house, your Honor.
COURT
COURT:
Q In other words, she approached you at the parking lot?
Q Why do you want her to know your house?
A Yes, your Honor.
A So that we can talk, your Honor.
COURT:
COURT:
Q What then were you doing at that time?
Q Why, when you can already talk at the parking lot?
A I was washing car, your Honor.
A Because I was busy then, your Honor.
COURT:
COURT:
Q How did she introduced herself?
Q The more you will lose your job, if you go home?
A She introduced herself to me, your Honor.
A I was busy and I accompanied her to our place, your Honor.
COURT:
COURT:
Q How did she introduced herself to you?
Q Why did she want to go to your house, if you know?
A She told me that she is the wife of Carlos Ty.
A So that I can narrate to her the whole incident, your Honor.
COURT:
COURT:
Q What did you talked about at the parking lot before you
accompanied her to your house? Q Why? What did you tell her exactly before going to your house?

A No more, your Honor. A About the whole incident, your Honor.

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CASES ON EVIDENCE

Atty. Puno manifested that the judge herself was actually

COURT: conducting the cross-examination, and a spirited discussion
between counsel and the judge ensued:
Q In other words, you already narrated to her everything before
you went to your house? ATTY. PUNO:

A No, your Honor. I do not know how to tell this to the Court, Your Honor, but I will
not be true to my duty to my client if I will not express this to the
COURT: Court—that the Presiding Judge actually was doing the cross-
examination.
Q What did you tell her exactly?
COURT:
A She introduced herself to me, your Honor.
No, counsel, that’s for clarification of the Court. I would like to
COURT: find out also some matters.

Q Did you volunteer to accompany her to your house or she ATTY. PUNO:
volunteered to you to go to your house? What is which?
This is very honest, that is no longer clarificatory questions, but
A She was the one who volunteered, your Honor. that is actually cross-examination for the prosecution… I am very
sorry to say this, Your Honor. I am telling this with all honesty
COURT: and I felt your Honor, I will not be true to my duty to my client if I
will not express this. And I want that to be placed/put on record
Q So, it was not true that she went there in order that you can …
tell her the whole incident, because she was the one who
volunteered herself to go to your house? COURT:

A She volunteered to go with me to our house, so that we can Those questions were asked by the Presiding Judge for
talk, your Honor. clarification… for clarificatory questions, because there are
matters which are very vague to the Court.
COURT:
ATTY. PUNO:
Q For how long did you talk with each other at the parking lot?
That is my manifestation, your Honor.
A Only few seconds, your Honor.62
COURT:

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And that is also the observation of the Court on the matter. intelligent witness and because of this cross-examination
conducted by the Presiding Judge of this Court---and I am very
ATTY. PUNO: sorry to say this---. May I place it on record that this witness
actually got confused
Do not know if this will be all that … (interrupted).
COURT:
FISCAL MANANQUIL:
That is your assessment, simply because the Court was able to
Besides, it was the witness himself who testified that she was find out, in the conduct of its clarificatory questions, some
requested by Mary Ann Ty to testify, that’s precisely why we are matters which were not taken up by the Prosecuting Fiscal, like
going deeper … (interrupted) for example, the testimony of the witness that she was paid by
such Mary Ann Ty, and probably that’s the reason why you did
COURT: not like the Court to ask that question. That’s your observation
and this is the observation of the Court.
No. The observation is not only in the particular point. The
prosecution and the defense is entitled to their own observation in ATTY. PUNO:
the same way that the Court is entitled to its own observation.
Because, the trial court has to observe the demeanor of the May I take exception to the observation of the Court with regards
witness while testifying. As a matter of fact, even on appeal, the to payment ….. I believe your Honor, that he was paid for the
findings of the trial court with respect to findings of fact will be amount of his "gana" …..
given much weight, because we, Judges in the trial court has the
capacity to observe the demeanor of the parties to witnesses being COURT:
presented in Court. Therefore, I have to make it on record the
demeanor of the witness or the witnesses, so that, when I make Everything were placed on records. Never mind, you and I cannot
the proper evaluation and assessment by the time a decision will change the testimony of the witness at this point in time. So, let
be rendered in this case, everything will have to appear on record, us not make any alteration in the testimony of this witness. At
for the guidance of the Court. It is the prerogative of the Presiding this point in time, the Court is not yet in a position to evaluate
Judge to ask clarificatory questions on matters which are still the evidence, as the Court is still in the process of receiving the
very vague to Him or to Her, in order that He or She will not be evidence for the defense. But, the Court should not be divested of
misguided in the proper evaluation and assessment of the facts of its prerogative to conduct clarificatory questions on the matter
the case….. That’s it… which are still very vague ….

ATTY. PUNO: ATTY. PUNO:

Your Honor, please, I agree that clarificatory questions were to be This is my manifestation, your Honor.
asked by the Presiding Judge, as the latter is entitled to it. The
only thing, if your Honor please, is that, this witness is not an COURT:

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CASES ON EVIDENCE

fact in their pleadings. It is in the context of the judge’s

Everything is on record. observations, however, that her questioning must be construed.

COURT: The averted gaze, in our culture, is a telltale sign of prevarication,

and Norlito’s reticent demeanor no doubt raised suspicions in the
After all, it is the duty of the member of the Bench to always aid judge’s mind that his testimony may be a fabrication. The judge
the Court in the proper administration of Justice, so that the also noted in her Order denying the motion to disqualify her that
Court should not be divested of its right to conduct clarificatory the witness was evasive.69 Of course, the witness’ behavior could
questions. And, neither the lawyer should be a bar if the Court be attributed to shyness, or even nervousness, since the witness
asks clarificatory questions on matters which are vague, so much was testifying in court for the first time.70 In any case, it was
so, that the Court is not interested in this case. If at all, the Court incumbent upon the trial judge to confirm or dispel her
asks clarificatory questions, it is for the purpose of finding out the suspicions. It was, after all, her duty to ascertain the credibility of
truth and for the purpose of aiding the Court in the proper the witness to enable her to arrive at a just verdict. In the
evaluation and assessment of facts and evidence on records, in fulfillment of this duty, the judge dwelt at length on how Norlito
order, further, that the law may be acquired properly.63 and Mary Ann first met and whether Norlito was paid in exchange
for his testimony. It would be to curtail or limit unduly the
On that note, the hearing of December 12, 1994 ended. discretion of a trial judge to impute with a sinister significance
such minute and searching queries from the bench,71 especially
A week later, the accused filed a "Motion to Inhibit/Disqualify in light of the witness’ suspicious behavior.
Presiding Judge,"64 contending that the judge exhibited bias
against the accused in her questioning. The judge denied the In any case, a severe examination by a trial judge of some of the
motion in an Order65 ated December 20, 1994, prompting the witness for the defense in an effort to develop the truth and to get
accused to file a petition for certiorari66 before the Court of at the real facts affords no justification for a charge that he has
Appeals. The Court of Appeals initially issued a temporary assisted the prosecution with an evident desire to secure a
restraining order enjoining Judge Angeles from hearing the conviction, or that he had intimidated the witnesses for the
case.67 The appellate court, however, eventually dismissed the defense.72 The trial judge must be accorded a reasonable leeway
petition for lack of merit and lifted the restraining order,68 in putting such questions to witnesses as may be essential to
thereby allowing trial to continue. elicit relevant facts to make the record speak the truth.73 Trial
judges in this jurisdiction are judges of both the law and the
Like the Court of Appeals, we find no prejudice in the judge’s facts, and they would be negligent in the performance of their
questioning. duties if they permitted a miscarriage of justice as a result of a
failure to propound a proper question to a witness which might
From the outset, Her Honor had observed that the witness Norlito develop some material bearing upon the outcome.74 In the
Dotimas never looked at any of the persons propounding the exercise of sound discretion, he may put such question to the
questions—that is, until the judge made her observations of witness as will enable him to formulate a sound opinion as to the
record. Understandably, appellants did not care to mention this ability or the willingness of the witness to tell the truth.75 A judge
may examine or cross-examine a witness.76 He may propound

263
CASES ON EVIDENCE

clarificatory questions to test the credibility of the witness and to Q I ask you Mr. Santos, are you a forensic chemist?
extract the truth.77 He may seek to draw out relevant and
material testimony though that testimony may tend to support or A No, sir.
rebut the position taken by one or the other party.78 It cannot be
taken against him if the clarificatory questions he propounds Q. Have you ever been trained in the detection and identification
happen to reveal certain truths which tend to destroy the theory of drugs?
of one party.79
A Yes, sir.
To prop up their theory of bias, the defense claims that the judge
in asking questions to prosecution witnesses SPO3 Gilbert Q. You would be able to determine a drug without use of a
Santos,80 SPO1 Gerico Bacani,81 SPO3 Noel Castañeto,82 and laboratory examination?
Leslie Maala83 Actually "helped" the prosecution.84 We do not
agree. As we held in People vs. Angcap:85 A Yes, because that is similar with the one brought to the
laboratory, sir.
x x x. At the most, there was the effort of the trial judge to arrive
at the truth and do justice to the parties. It would be a distorted Q Would you be able to differentiate from other crystalline like
concept of due process if in pursuance of such a valid objective "tawas" without conducting laboratory examination?
the trial judge is to be stigmatized as being guilty of an act of
unfairness. x x x. "There is nothing on record to show that anyone A The appearance of tawas is …. (interrupted)
of the judges of the trial court attempted to help the prosecution.
The questions propounded by the judge, subject of appellant’s COURT:
complaint, appeared to have been intended to elicit the truth from
the witnesses. The inquisitiveness complained of by appellant’s The witness is not testifying as an expert witness…
counsel did not have the purpose of unduly harming the
substantial rights of the accused. It was only to be expected from ATTY. IFURUNG:
the judges who, with full consciousness of their responsibilities,
could not easily be satisfied with incompleteness and obscurities But he effected the arrest, your Honor.
in the testimonies." This assignment of error is therefore
unfounded.86 COURT:

Next, it is claimed that the judge "prevented the defense from But you are practically asking him of the opinion on shabu…
pursuing intensive inquiries of witnesses."87 Instances are cited
where the judge allegedly "blocked off"88 questions by defense FISCAL CAJIGAL:
counsel even when the prosecutor failed to object. Thus, when
SPO3 Santos was testifying for the defense as a hostile witness, The witness is incompetent. He is not a chemist who can
Atty. Ifurung, the counsel for the defense, asked him: determine whether the substance was shabu or not…

264
CASES ON EVIDENCE

ATTY. IFURUNG: A Romeo Reyes, sir.

The determination of whether the substance is shabu or not is Q Will you tell us the degree of this Inspector Reyes?
important for the purpose of effecting the arrest….
A Class ’83, sir.
COURT:
Q I am asking for his academic degree.
While it may be true that the determination of the substance is
shabu or not by the witness is …. The witness is not testifying FISCAL CAJIGAL:
here as an expert witness and you are asking for an opinion,
counsel. Incompetent and immaterial…

ATTY. IFURUNG: COURT:

May we move for consideration because he said he effected the Sustained.

arrest and the reason is he said he was selling the shabu. And
now, I am testing his credibility. ATTY. IFURUNG:

COURT: He claims that he is an expert by reason of his training. I am

asking him who was his instructor. It is very material, because
Motion for reconsideration, DENIED. the witness testified that he was very sure that what he bought is
methamphetamine hydrochloride and I am testing his credibility.
xxx
COURT:
Q. Where did you undergo any training in the determination of
regulated and prohibited drugs, or did you not? While it may be true that this witness testified that he bought
shabu, he is not testifying here as forensic chemist with expertise
A Camp Crame, Quezon City, sir. on chemical analysis. He is testifying as a poseur buyer and
therefore, further questions on the witness would be out of order.
Q Will you tell us who was your instructor on that particular Hence, the Court grants the motion of the prosecuting fiscal.
training?
ATTY. IFURUNG:
A Inspector Reyes, sir.
Q I asked you, Mr. Witness, as an agent, how long have been an
Q Will you tell this Honorable Court the full name of Inspector agent of NARCOM?
Reyes?
A Six (6) years, sir.

265
CASES ON EVIDENCE

Q Have you written any book on the identification and analysis on ATTY. IFURUNG:
drugs?
We are only asking that we will be allowed to test the credibility of
FISCAL CAJIGAL: the witness on material points, but not on expertism and special
knowledge.
Objection, your Honor.
COURT:
COURT:
On this particular case, you are asking the witness on particular
Sustained. knowledge or qualification.89

ATTY. IFURUNG: The questions by counsel in court regarding the ability of the
arresting officer to distinguish between shabu and tawas without
May we ask for reconsideration… a laboratory examination, the academic degree of his training
instructor, and the officer’s authorship of books on drug identity
COURT: and analysis are irrelevant, improper and impertinent. In drug
cases, an arrest made in flagrante delicto does not require that
Denied. the arresting officer possess expert knowledge of the substance
seized, or that he perform precise scientific tests to determine its
ATTY. IFURUNG: exact nature. That would be impractical, and obstructive to
effective law enforcement. The judge was therefore correct in
He has opened the gate on this line of questionings. We wanted to disallowing these questions.
test his credibility.
The judge need not have waited for an objection from opposing
COURT: counsel to bar immaterial questions. A judge has the duty to see
to the expeditious administration of justice.90 If the opposing
Third motion for reconsideration, denied. counsel does not object to such questions, the judge cannot stand
idly by and allow the examining counsel to propound endlessly
ATTY. IFURUNG: questions that are clearly irrelevant, immaterial, improper or tend
to be repetitious. The action by the judge in this case, therefore,
In fairness to the accused. The accused here is charged with cannot be deemed prejudicial; indeed, it is entirely proper. In
capital offense. Ventura et al. vs. Judge Yatco,91 we said:

COURT: About the active part that the judge took in the trial, the court
finds that said active part was for the purpose of expediting the
The Court is aware of that. trial and directing the course thereof in accordance with the

266
CASES ON EVIDENCE

issues. While judges should as much as possibly refrain from

showing partiality to one party, it does not mean that a trial judge Q And you will agree with me that your commanding officer is the
should keep mum throughout the trial and allow parties that they one who determines whether the operation is a buy-bust or a
desire, on issues which they think are the important issues, when raid?
the former are improper and the latter, immaterial. If trials are to
be expedited, judges must take a leading part therein, by A Yes, sir.
directing counsel to submit the evidence on the facts in dispute,
by asking clarifying questions and by showing an interest in a ATTY. IFURUNG:
fast and fair trial. Judges are not mere referees like those of a
boxing bout, only to watch and decide the results of the game; This was not taken on direct-examination. He said he was the one
they have as much interest as counsel in the orderly and who arranged with Stardust, so we object with the line of
expeditious presentation of evidence, calling attention of counsel questionings.
to points at issues that are overlooked, directing them to ask
questions that would elicit the facts on the issues involved, FISCAL CAJIGAL:
clarifying ambiguous remarks by witnesses, etc. Unless they take
an active part in trials in the above form and manner, and allow I am on cross-examination.
counsel to ask questions, whether pertinent or impertinent,
material or immaterial, the speedy administration of justice which COURT:
is the aim of the Government and of the people cannot be
attained. Counsel should, therefore, not resent any interest that Overruled, witness may answer.
the judge takes in the conduct of the trial, they should be glad
that a trial judge takes such interest and help in the A Our commanding Officer, sir.
determination of the truth.
Q In this particular case, you are telling this Honorable Court
It is also argued that the judge showed her "uneven hand"92 that it was your Commanding Officer who will determine whether
when she overruled objections interposed by the defense when it the buy bust operation shall be conducted against accused Zheng
was the prosecution’s turn to examine SPO3 Santos. This was Bai Hui, is it not?
supposedly in contrast to the above actuation exhibited by the
judge when the defense was examining the same witness. A Yes, sir.

CROSS-EXAMINATION Q Likewise, Mr. witness, it was your Commanding Officer who

determines whether or not the two P500.00 paper bills which
FISCAL CAJIGAL: were used together with the boodle money should be placed with
flourescent powder or not?
Q Mr. witness, you have a Commanding Officer in your unit?
ATTY. IFURUNG:
A Yes, sir.

267
CASES ON EVIDENCE

I will object, I think the Commanding Officer would be the best Q When was that?
witness on this line of questionings.
A On October 24, 1994 between 6:00 o’clock to 7:00 o’clock in the
COURT: evening, sir.

I would like to be clarified on this. You testified during the direct- Q Was that after the fact that after you have handled the boodle
examination that you lied to the accused when you said that you money to the accused?
are a drug pusher, who has run out of stock?
ATTY. IFURUNG:
A Yes, your Honor.1âwphi1
THE FACT in the last question, he stated negative to the answer
Q Why do you say so? Why did you lie to the accused and said and I closed my examination. . . . It was answered contrary to the
that you are a drug pusher? answer of the accused. . . .

ATTY. IFURUNG: COURT:

With due respect to this Honorable Court, we will object. Because Objection, overruled, witness may answer.
in that case, the Honorable Court would be now assuming. . .
(interrupted) A Not yet. When he was able to bring it to me and who hand it to
me and I opened it, that’s the time I gave the boodle money, your
COURT: Honor/sir.

The Court, in the exercise of its duty and in order to find out the xxx
truth, can ask clarificatory questions.
RE-CROSS EXAMINATION
WITNESS:
FISCAL CAJIGAL:
In order that I could buy from him drugs, your Honor.
Q Please tell to the Court what were the specific instructions
FISCAL CAJIGAL: given by your Commanding Officer before you effected the buy-
bust operation?
x x x.
ATTY. IFURUNG:
Q And lastly, why did you effect the arrest of Mr. Tan Ty?
We object in the first place, there was no statement by the eye
A Because of the shabu which he was bringing, sir. witness as to any instruction given by his Commanding Officer
with respect to that buy-bust operation.

268
CASES ON EVIDENCE

direct examination if SPO3 Santos lied when he allegedly told the

COURT: accused that he was a drug pusher. The judge merely asked why
he lied. The question was clearly clarificatory.
Overruled, witness may answer.
Neither do we find anything objectionable to the prosecutor’s
A We conducted surveillance on the area where we are going to. question on whether the accused were arrested after SPO3 Santos
And if we were already there, I will approach him and I will pose handed over the money to them. It is not clear from the transcript
as a buyer. And if I can see that there is shabu, then I will arrest what exactly was the ground for counsel’s objection.
him, sir.93
Lastly, the judge did not err in overruling counsel’s objection to
We discern no bias in the foregoing proceedings. The questions of the questions pertaining to the Commanding Officer’s specific
the prosecutor were proper, and the objections of defense counsel instructions to SPO3 Santos for, on re-direct examination, Atty.
were correctly overruled. Ifurung, counsel for the defense, asked:

The prosecutor’s question as to whether the Commanding Officer Q What is the name of your Commanding Officer?
determines if the operation should be a buy-bust or a raid was
objected to for not having been taken up on direct examination. A Sr. Ins. Franklin Mabanag, sir.
The question, however, was merely preliminary and was posed to
lay the foundation for the next question, that is, whether it was ATTY. IFURUNG:
the Commanding Officer who determined if fluorescent powder
should be placed on the boodle money or not. The latter question, Q So, you just follow instructions from your Commanding Officer?
too, was within the bounds of the rules of evidence94 for defense
counsel had previously asked questions whether fluorescent A Yes, sir.
powder was used in the operation.95 The question was intended
to blunt any implication from defense counsel’s questions that Q And you were instructed by your Commanding Officer to effect
SPO3 Santos was somehow responsible for the non-use of the arrest of Carlos Tan Ty?
fluorescent powder in the buy-bust operation. In response, SPO3
Santos said that the decision to use fluorescent powder rested in A Yes, sir.
the Commanding Officer. Contrary to defense counsel’s objection,
SPO3 Santos was equally competent to answer this question. He Q And you were instructed to effect his arrest under any
was a subordinate of the Commanding Officer and a member of circumstances?
that particular command, and therefore knowledgeable of the
decision-making policies therein. A Yes, sir.

The judge’s query as to why SPO3 Santos pretended to be a drug FISCAL CAJIGAL:
pusher was completely relevant in determining the legality of the
entrapment. Moreover, the defense counsel had asked during the Misleading, your Honor.

269
CASES ON EVIDENCE

officers charged with enforcement of that law. [Citations omitted.]

ATTY. IFURUNG: The purpose of the privilege is the furtherance and protection of
the public interest in effective law enforcement. The privilege
That will be all, your Honor.96 recognizes the obligation of citizens to communicate their
knowledge of the commission of crimes to law-enforcement
Upon the conclusion of the re-direct examination, the adverse officials and, by preserving their anonymity, encourages them to
party may re-cross-examine the witness on matters stated in his perform that obligation.
re-direct examination.97
The scope of the privilege is limited by its underlying purpose.
In sum, we find that the judge, in propounding questions to the Thus, where the disclosure of the contents of a communication
witnesses, in overruling ungrounded objections and disallowing will not tend to reveal the identity of an informer, the contents are
improper questions by the defense, did not exhibit any bias not privileged. Likewise, once the identity of the informer has
against the accused. On the contrary, the judge demonstrated been disclosed to those who would have cause to resent the
nothing more than an unwavering quest for the truth and a communication, the privilege is no longer applicable.
rightful intolerance for impertinence, fully cognizant of her duties
and of the scope of her discretion. A further limitation on the applicability of the privilege arises from
the fundamental requirements of fairness. Where the disclosure
III of an informer’s identity, or of the contents of his communication,
is relevant and helpful to the defense of an accused, or is
Appellants contend that the trial court erred in sustaining the essential to a fair determination of a cause, the privilege must
refusal by Sr. Insp. Mabanag to divulge the identity of Stardust, give way. In these situations the trial court may require
the woman who informed the police about the two accused. It is disclosure and, if the Government withholds the information,
claimed that such refusal violated the right of the accused to dismiss the action.
confront and cross-examine said witness.98
xxx
As a rule, informers are not presented in court because of the
need to preserve their cover so they can continue their invaluable We believe that no fixed rule with respect to disclosure is
service to the police.99 Equally strong reasons include the justifiable. The problem is one that calls for balancing the public
maintenance of the informant’s health and safety and the interest in protecting the flow of information against the
encouragement of others to report wrongdoing to police individual’s right to prepare his defense. Whether a proper
authorities.100 The rule against disclosure is not absolute, balance renders nondisclosure erroneous must depend on the
however. In Roviaro v. United States,101 the United States particular circumstances of each case, taking into consideration
Supreme Court declared: the crime charged, the possible defenses, the possible significance
of the informer’s testimony, and other relevant factors.
What is usually referred to as the informer’s privilege is in reality
the Government’s privilege to withhold from disclosure the Before disclosure of the informer’s identity may be allowed,
identity of persons who furnish information of violations of law to however, the defense must, before or during the trial, request the

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production of the confidential informant or his identification.102

(Thus, in Roviaro the accused repeatedly demanded disclosure.) Atty. Ifurung:
In addition, the defendants must show how the identity of the
informer is essential to their defense.103 Your Honor please may we request the witness to give the name
of the alleged informant since according to him she is known to
In this case, counsel for appellant Carlos Tan Ty indeed requested the accused, so there is no reason for the witness to keep the
the trial court to compel Sr. Insp. Mabanag, who was then identity of the informant, so may we request that the Court
testifying on direct examination, to reveal the identity of Stardust: directs the witness to divulge the identity of the informant

Q: What is the real name of Stardust? Court:

A: For security reason, we cannot give her name, sir. She might be known but the court will not compel the witness to
divulge the identity of the informant for security reason as alleged
Q: Is it not a fact Mr. Mabanag, that this informant was the one by the witness.104
who arrange for the selling of shabu?
Appellants nevertheless failed to show at the time of their request
A: Yes, sir. how the identity of the informer or her production was essential
to their defense. In State v. Driscoll,105 the defense, during the
Q: In other words this Stardust is known to the accused? cross-examination of the State’s final witness, asked the witness
the name of the informant. The prosecution objected to the
A: Yes, sir. question for being outside the scope of the direct examination.
The court sustained the objection, stating "I will not compel him
Q: So there is no reason for you to hide the identity of the to answer that question if he desires not to at this time." The state
informant considering that according to you she is known to the rested and the defendant presented his evidence without
accused? renewing his request for the disclosure of the identity of the
informer. The defendant was subsequently convicted for burglary.
A: Yes, sir. On appeal, the defendant assigned as error the trial court’s
refusal to require disclosure of the identity of the informer. The
Q: In fact she was the one who allegedly arrange for the buying of Supreme Court of Washington held that the trial court did not
the alleged shabu? commit error in ruling thus. It held:

A: Yes, sir. In the instant case, the request came from the defendant at the
time and in the manner hereinabove set out, and was not in any
Q: Will you please give her name? fashion thereafter renewed. The defendant, at the time of the
request, did not advise the trial court of his proposed defense of
A: For security reason I cannot give her name, because we are entrapment nor undertake, in any way, to enlighten the trial
putting the very life of the informant to danger, sir court as to the materiality of relevancy of the requested

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disclosure. The ruling at that particular stage of the proceedings advise the trial court of their defense or the relevancy of such
was to the effect that disclosure would not be required at that disclosure when they demanded the production of Stardust’s
time. The door was thus open to subsequent showing and identity. When Sr. Insp. Mabanag was put on the stand, there
request. was no hint that the accused was going to raise frame-up,
extortion, and instigation as defenses. The accused had not yet
The Supreme Court of North Carolina in State v. Boles, 246 N.C. testified; neither had appellant Carlos Tan Ty’s wife, Mary Ann.
83, 85, 97 S.E. 2nd 476, 477, in considering a like claim of error The defense did not raise the question of the informer’s identity
under analogous circumstances, stated again after these witnesses testified.

"In passing on defendant’s assignments based on exceptions Nos. The burden of showing need for disclosure is upon
4 and 5, we must do so in the light of the facts before Judge defendants.106 The necessity for disclosure depends upon "the
Johnston at the time he made the ruling complained of. At that particular circumstances of each case, taking into consideration
time there was no conflict in the testimony. Nothing appeared in the crime charged, the possible defenses, the possible significance
the evidence concerning the informer except the fact that he was of the informer’s testimony, and other relevant factors."
present when the witness made the purchase. We hold that the Appellants did not develop any such criteria with reference to the
defendant did not make a sufficient showing to require the merits of the case.107 A mere request during a witness’
disclosure. The court’s refusal to order it under the examination indicates speculation on the relevancy of his
circumstances was not error. testimony; and mere speculation an informer may be helpful is
not enough to carry the burden and overcome the public interest
****** in the protection of the informer.108 Hence, the trial court did not
err in sustaining the refusal of the witness to reveal the identity of
"Had the defendant, in the light of this conflict [a conflict in the Stardust.
evidence developed by defendant’s testimony], requested the
name of the confidential informer as a possible defense witness, a IV
more serious question would have been presented. That question,
however, was not before Judge Johnston and consequently is not We come now to the sufficiency of the prosecution evidence.
before us. The propriety of disclosing the identity of an informer
must depend on the circumstances of the case and at what stage The elements necessary in every prosecution for the illegal sale of
of the proceedings the request is made. Roviaro v. United States, shabu are: (1) the identity of the buyer and the seller, the object,
[decided 25 March, 1957, 353 U.S. 53, 1 L.Ed.2d 639] 77 S.Ct. and the consideration; and (2) the delivery of the thing sold and
623." the payment therefor.109 The Court finds that the testimonies of
the prosecution witnesses adequately establish these elements.
Under the circumstances of the instant case, we hold the trial The Court has no reason to doubt the following assessment of the
court did not commit error in the ruling complained of. trial court regarding the credibility of these witnesses:

Like in Driscoll, the defense in this case did not renew their An exhaustive scrutiny of the prosecution’s evidence shows that
request for the production of the informer’s identity. Nor did they the accused were caught in flagrante delicto through a buy-bust

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operation staged b police operatives. Both accused were positively

identified by the poseur-buyer himself and by three (3) other Appellants claim that the failure of the prosecution to present the
members of the buy-bust team. These eye witnesses for the informer in court demonstrates that the informer is fictitious and
prosecution were also consistent in their testimonies concerning gives rise to the presumption that her testimony would be adverse
the important details of the sale, to wit: (1) that the informant was if produced.
at the scene and it was she who identified the two accused, (2)
that Gilbert Santos acted as poseur-buyer, (3) that the said The rule in determining whether the informer should be
poseur-buyer handed the boodle money to accused Carlos Tan Ty presented for a successful prosecution in cases involving buy-
and the latter called his co-accused Nelson Hong Ty who handed bust operations is best stated in People vs. Doria:113
to the poseur-buyer a blue plastic bag containing the regulated
drug, Methamphetamine Hydrochloride or shabu.110 Except when the appellant vehemently denies selling prohibited
drugs and there are material consistencies in the testimonies of
Appellate courts accord the highest respect to the assessment of the arresting officers, or there are reasons to believe that the
witnesses’ credibility by the trial court, because the latter was in arresting officers had motives to testify falsely against the
a position to observe their demeanor and deportment on the appellant, or that only the informant as the poseur-buyer who
witness stand.111 actually witnessed the entire transaction, the testimony of the
informant may be dispensed with as it will be merely
Appellants however attempt to poke holes in the prosecution’s corroborative of the apprehending officers’ eyewitness
case. They theorize that the buy-bust operation was merely a testimonies. There is no need to present the informant in court
contrivance as indicated by the following so-called "unmistakable where the sale was actually witnessed and adequately proved by
hallmarks": prosecution witnesses.

(a) a fictitious informant, None of the above circumstances obtains in this case. While
appellants do deny selling shabu, there are no material
(b) no pre-arrest test-buy, inconsistencies in the testimonies of the arresting officers. The
arresting officers had no motive to testify against appellants; the
(c ) absence of pre-arrest surveillance, claims of extortion against the arresting officers, as will be shown
later, were not firmly established. Finally, the informer was not
(d) use of bogus/boodle money, even the poseur-buyer in the operation. The sale was actually
witnessed and adequately proved by the prosecution witnesses.
(e) drug sale in public, The presumption laid down in Section 3(e), Rule 131 of the Rules
of Court, to wit: "(e) [t]hat evidence willfully suppressed would be
(f) no record of operation in the police blotter, adverse if produced," therefore, does not apply since the
testimony of the informer would be merely corroborative.114
(g) money not dusted with fluorescent powder.112
That no test buy was conducted before the arrest is of no moment
We are not swayed by this argument. for there is no rigid or textbook method of conducting buy-bust

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operations. For the same reason, the absence of evidence of a Appellants submit, however, that this ruling applies only to "small
prior surveillance does not affect the regularity of a buy-bust level drug trafficking," and not to cases involving a substantial
operation,115 especially when, like in this case, the buy-bust amount of drugs, such as the one at bar. The distinction is
team members were accompanied to the scene by their illusory for it is not improbable for large transactions involving
informant.116 The Court will not pretend to establish on a priori drugs to take place under the cover of commonplaceness. A kilo of
basis what detailed acts police authorities might credibly shabu can be transported and delivered with facility in public and
undertake and carry out in their entrapment operations.117 The it does not tax credulity that such transactions indeed occur.
selection of appropriate and effective means of entrapping drug While the sale may have been made to a stranger, the lure for
traffickers is best left to the discretion of police authorities.118 easy profits can easily outweigh the risk of arrest and
prosecution. Moreover, the risk was reduced by the introduction
Appellants describe as implausible the testimony that they by the informant, who had regular contact with appellant Carlos
supposedly merely "looked" at the boodle money without counting Tan Ty,122 of the poseur-buyer to the latter.
it. We find nothing dubious in appellants’ behavior. Indeed, it is
totally consistent with human nature. Appellants were engaged in Equally without merit is the argument that the buy-bust was not
an illegal activity and it was necessary that they act recorded in the police blotter is proof of a sham buy-bust.1âwphi1
inconspicuously. The sale was consummated in public and A prior blotter report is neither indispensable nor required in buy-
appellants would invite unwanted attention if they counted the bust operations.123
money right in busy Monumento.
Lastly, the failure of the NARCOM agents to use fluorescent
Appellants also fault the police officers for not observing the powder on the boodle money is no indication that the buy-bust
purported "proper procedure" in the marking and the blotter of operation did not take place. Like a prior blotter report, the use of
the P500 bills used as part of the boodle money. They failed to fluorescent powder is not indispensable in such operations. The
establish, however, that such a procedure existed. Sr. Insp. use of initials to mark the money used in the buy-bust operation
Mabanag, on the other hand, testified that they do not even has been accepted by this Court.124 The prosecution has the
maintain a police blotter119 since they were a special operation prerogative to choose the manner of marking the money to be
unit.120 used in the buy-bust operation.125

That the sale was in public does not diminish the prosecution Appellants raise the defense of frame-up. Frame-up is the usual
witnesses’ credibility or the trustworthiness of their testimony. In defense of those accused in drug related cases,126 and it is
People vs. Zervoulakos,121 we observed that "the sale of viewed by the Court with disfavor127 since it is an allegation that
prohibited drugs to complete strangers, openly and in public can be made with ease.128 For this claim to prosper, the defense
places, has become a common occurrence. Indeed, it is sad to must adduce clear and convincing evidence to overcome the
note the effrontery and growing casualness of drug pushers in the presumption that government officials have performed their
pursuit of their illicit trade, as if it were a perfectly legitimate duties in a regular and proper manner.129 Appellants have failed
operation." to provide clear and convincing evidence that they were framed by
the NARCOM agents. Appellants’ testimonies were corroborated
merely by Norlito Dotimas and Mary Ann Ty. Norlito Dotimas’

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credibility, however, remains doubtful because of his suspicious appellants in the act of delivering the shabu. Hence, appellants
behavior and evasive answers while on the witness stand. Mary were merely caught in the act of plying their illegal trade.134
Ann Ty, on the other hand, is the common-law wife of appellant
Carlos Tan Ty and the mother of his three children.130 She has a Contrary to appellants’ contentions, no tinge of
natural interest in favoring appellants. Pitted against the unconstitutionality attended the arrest of appellants. What we
presumption that government officials have performed their said in People vs. Liquen135 is sufficient to dispose of this
duties in a regular and proper manner, the evidence for the argument:
defense simply cannot prevail.
In the case at bar, the buy-bust operation was formed by the
The claim of extortion is similarly untenable. Like an alleged police officers precisely to test the veracity of the tip and in order
frame-up, a supposed extortion by police officers is a standard to apprehend the perpetrator. Having caught the culprit red-
defense in drug cases131 and must also be proven by clear and handed as a result of the buy-bust operation, Garcia and his
convincing evidence.132 Again, appellants have failed to team-mates were not only authorized but were also under
discharge this burden. Such a claim is supported only by the obligation to apprehend the drug pusher even without a warrant
same unreliable evidence to support the claim of frame-up. of arrest. Section 5 (a) of Rule 113 of the Revised Rule on
Criminal Procedure, reads in part as follows: "Sec.5. Arrest
Appellants submit in the alternative that the facts as presented without warrant; when lawful—A peace officer or a private person
by the prosecution reveal that the law enforcers instigated may, without a warrant, arrest a person: (a) When, in his
appellants to sell shabu to them. We find no instigation in this presence, the person to be arrested has committed, is actually
case. committing, or is attempting to commit an offense; x x x."

x x x the general rule is that it is no defense to the perpetrator of Clearly, the situation in the case at bar is one where a person
a crime that facilities for its commission were purposely placed in commits a crime in the presence of a police officer; hence, the
his way, or that the criminal act was done at the ‘decoy latter may validly arrest the offender even without first obtaining
solicitation’ of persons seeking to expose the criminal, or that a warrant of arrest.136
detectives feigning complicity in the act were present and
apparently assisting in its commission. Especially is this true in There can be no doubt, therefore, that appellants are guilty of the
that class of cases where the offense is one of a kind habitually sale of methamphetamine hydrochloride, a regulated drug,137 in
committed, and the solicitation merely furnishes evidence of a violation of Section 15 of the Dangerous Drugs Act,138 as
course of conduct. Mere deception by the detective will not shield amended.
defendant, if the offense was committed by him free from the
influence or the instigation of the detective.133 Conspiracy between the appellants was evident. The transaction
was successfully consummated between the poseur-buyer and
Here, the law enforcers received a report from their informant that appellant Carlos Tan Ty, together with his companion, appellant
appellants were "big time" drug pushers. Poseur-buyer SPO3 Nelson Hong Ty, with one receiving the marked money and the
Santos then pretended to be engaged in the drug trade himself other delivering the contraband to the poseur buyer. No other
and, with the help of his fellow NARCOM agents, arrested logical conclusion would follow from the duo’s concerted action

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CASES ON EVIDENCE

except that they had a common purpose and community of of reclusion perpetua to death and a fine ranging from five
interest, the accepted indicia that could establish the existence of hundred thousand persos to ten million pesos shall be imposed
conspiracy.139 Conspiracy having been established, the accused upon any person who, unless authorized by law, shall sell,
are answerable as co-principals regardless of the degree of their dispense, deliver, transport or distribute any regulated drug.
participation.140
Notwithstanding the provisions of Section 20 of this Act to the
"Conspiracy,"141 as used herein, refers to the manner of contrary, if the victim of the offense is a minor, or should a
incurring criminal liability, and not a crime in itself. Conspiracy is regulated drug involved in any offense under this Section be the
not punishable except when the law specifically provides a proximate cause of the death of a victim thereof, the maximum
penalty therefor,142 such as in conspiracies to commit penalty herein provided shall be imposed.
treason,143 coup d’etat,144 rebellion,145 sedition,146 and the
sale of dangerous drugs. The last is punishable under Section In relation thereto, Section 20 of the same law, as amended,
21(b) of the Dangerous Drugs Act.147 provides:

When the conspiracy relates to a crime actually committed, the SEC. 20. Application of Penalties, Confiscation and Forfeiture of
conspiracy is absorbed; it does not constitute a separate crime, the Proceeds or instruments of the Crime.- The penalties for
but is only a manner of incurring criminal liability. The offenses under Sections 3, 4, 7, 8 and 9 of Article II and Sections
participants to the crime are merely held equally liable since the 14, 14-A, 15 and 16 of Article III of this Act shall be applied if the
act of one is the act of all. It was thus error for the trial court to dangerous drugs involved is in any of the following quantities:
convict appellants for "Section 15, Article III, RA 6425 [punishing
the sale of regulated drugs] in relation to Section 21-B [penalizing 1. 40 grams or more of opium;
the conspiracy to sell regulated drugs] of the same Act."148 In
this case, the crime (the sale of regulated drugs), and not only the 2. 40 grams or more of morphine;
conspiracy (to sell the same) was actually committed. To hold
appellants liable for violation of Section 15 alone, therefore, would 3. 200 grams or more of shabu or methylamphetamine
be more precise and more in accord with the principles of hydrochloride;
criminal law.149
4. 40 grams of more of heroin;
V
5. 750 grams or more of indian hemp or marijuana;
We arrive at the imposition of the proper penalty.
6. 50 grams or more of marijuana resin or marijuana resin oil;
Section 15 of the Dangerous Drugs Act, as amended by Republic
Act No. 7659 states: 7. 40 grams of more of cocaine or cocaine hydrochloride; or

SEC. 15. Sale, Administration, Dispensation, Delivery, 8. In the case of other dangerous drugs, the quantity of which is
Transportation and Distribution of Regulated Drugs.- The penalty far beyond therapeutic requirements, as determined and

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CASES ON EVIDENCE

promulgated by the Dangerous Drugs Board, after public amount or quantity of drugs seized in order to determine the
consultations/hearings conducted for the purpose. proper penalty to be imposed.

Otherwise, if the quantity involved is less than the foregoing The argument is quaint and even borders on being ridiculous. In
quantities, the penalty shall range from prision correccional to the present case, even assuming that the confirmatory tests were
reclusion perpetua depending upon the quantity. conducted on samples taken from only one (1) of the plastic
packages, accused-appellant’s arguments must still fail.
From the foregoing provisions, the penalty for the sale of
regulated drugs is based, as a rule, on the quantity It will be recalled that each of the plastic packages weighed 1.1
thereof.1âwphi1 The exception is where the victim is a minor or kilograms, an amount more than sufficient to justify imposing the
where the regulated drug involved is the proximate cause of the penalty under Sec. 14 of Rep. Act. No. 6425 as amended by Rep.
death of the victim. In such cases, the maximum penalty Act No. 7659. A sample taken from one (1) of the packages is
prescribed in Section 15, i.e., death, shall be imposed, regardless logically presumed to be representative of the entire contents of
of the quantity of the prohibited drugs involved.150 Appellants, the package unless proven otherwise by accused-appellant.
therefore, cannot be sentenced to suffer the death penalty under Therefore, a positive result for the presence of drugs is indicative
this exception, the conditions for its imposition not being present. that there is 1.1 kilogram of drugs in the plastic package from
Their penalty ought to be determined by the quantity of which the sample was taken. If it is then proved, beyond
methamphetamine hydrochloride involved in the sale. reasonable doubt, x x x that accused appellant transported into
the Philippines the plastic packages from which samples were
To recall, appellants sold the NARCOM operatives a substance taken for tests, and found positive as prohibited drugs, then
weighing 992.3 grams. This amount is more than the minimum of conviction for importing "shabu" is definitely in order. (Italics in
200 grams required by the law to warrant the imposition of either the original. Underscoring supplied.)
reclusion perpetua or, if there be aggravating circumstances, the
death penalty.151 Appellants however foist the probability that Thus, if the prosecution proves that the sample is positive for
the substance sold could contain additives or adulterants, and methamphetamine hydrochloride, it can be presumed that the
not just methamphetamine hydrochloride. Thus, the actual entire substance seized is shabu. The burden of evidence shifts to
weight of pure shabu could be less than 992.3 grams, thereby the accused who must prove otherwise. Appellants in this case
possibly reducing the imposable penalty. have not presented any evidence to overcome the presumption.

The contention has no merit. We rejected a similar argument in The sale of 200 or more grams of methamphetamine
People vs. Tang Wai Lan:152 hydrochloride, a regulated drug,153 is punishable by reclusion
perpetua to death, and a fine ranging from P500,000 to
Accused-appellant then argues that the tests were not done for P10,000,000.00.154 No aggravating circumstances attended the
the entire amount of drugs allegedly found inside the bags. It is commission of the crime. Hence, appellants can only be
suggested that since the law, Republic Act No. 7659, imposes a sentenced to reclusion perpetua.
penalty dependent on the amount or quantity of drugs seized or
take, then laboratory tests should be undertaken for the entire

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The personal corporal punishment must be complemented by the On May 18, 1995 two informations were filed in court charging
pecuniary penalty provided therein. With respect to the latter, the Adel Tuangco y Dizon, Nelson Pineda Jr. alias "Jun Tattoo"1 , and
courts may determine the amount of the fine within the range Sonny Tuangco y Dizon alias "Baba" with the crimes of rape with
provided by law, subject to the rule on increasing or reducing the homicide and theft.
same by degrees as provided by the Revised Penal Code.155
The Information in Criminal Case No. 95-1609(M) states:
WHEREFORE, the decision of the Regional Trial Court of
Caloocan City is hereby AFFIRMED WITH MODIFICATIONS. "That on or about January 3, 1995, between 7:30 to 8:30 in the
Appellants Zheng Bai Hui alias Carlos Tan Ty and Sao Yu alias evening, in Sitio Dalan Baka, Barangay Sulipan, Municipality of
Nelson Hong Ty are found GUILTY beyond reasonable doubt of Apalit, Province of Pampanga, Philippines and within the
violating Section 15 of Republic Act No. 6425 and are hereby jurisdiction of this Honorable Court, the above-named accused
sentenced to each pay a fine of FIVE HUNDRED THOUSAND conspiring, confederating and mutually helping one another, did
PESOS (P500,000.00) and to suffer the penalty of RECLUSION then and there, wilfully, unlawfully and feloniously, with intent to
PERPETUA. gain which came as an afterthought to them after executing their
SO ORDERED. primordial intent to rape and kill victim AUREA EUGENIO, took
38. PEOPLE VS TUANGCO and carried away her wrist watch, three rings, earrings,
P3,000.00 cash money and camera, the total value of which
Criminal Procedure; Evidence; Witnesses; A deaf-mute is not amounts to P20,000.00, to the damage and prejudice of her heirs.
incompetent as a witness; Requisites in order for deaf-mutes to be
competent witnesses.—A deaf-mute is not incompetent as a The commission of this offense added ignominy to the natural
witness. All persons who can perceive, and perceiving, can make effects of the crime."
known their perception to others, may be witnesses. Deaf-mutes
are competent witnesses where they (1) can understand and whereas the Information in Criminal Case No. 95-1610 (M) reads:
appreciate the sanctity of an oath; (2) can comprehend facts they
are going to testify on; and (3) can communicate their ideas "That on or about January 3, 1995, between 7:30 to 8:30 in the
through a qualified interpreter. evening, in Sitio Dalan Baka, Barangay Sulipan, Municipality of
Apalit, Province of Pampanga, Philippines, and within the
PER CURIAM: jurisdiction of this Honorable Court, the above-named accused
conspiring, confederating and mutually helping one another, with
In the morning of January 4, 1995, the naked cadaver of Aurea evident premeditation, abuse of superior strength and taking
Eugenio, a bookkeeper employed by the Centro Escolar University advantage of nighttime, did then and there willfully, unlawfully,
Credit Cooperative in Manila was found lying beside a creek about feloniously and with lewd design dragged Aurea Eugenio, reclined
50 meters away from the national highway in Apalit. Her body her in a tree, opened wide her thighs, inserted a bottle of Pidol
bore multiple stab wounds and her private parts were bloodied syrup in her vaginal canal and forcibly took turns in having
and showed signs of sexual abuse. sexual intercourse with her against her will, after which, and by
reason of such rape accused with intent to kill, did then and

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CASES ON EVIDENCE

there, wilfully, unlawfully and feloniously stabbed several times inside the court room at the hearing of these cases on July 10,
Aurea Eugenio in her neck which caused her death. 1995. Accused Adel Tuangco and the person with elongated chin
are brothers. (Ibid, p. 60).
That the commission of this offense was attended by the
aggravating circumstance of evident premeditation, use of The group of eight (8) persons were drinking beer and gin inside
superior strength, nighttime which was purposely sought by the the 'beer house'. When night time came, Sanggalan, accused Adel
accused to facilitate and insure its commission. Tuangco, the person with tatoos over his body and the one with
elongated chin proceeded to the rice field where there was a
CONTRARY to Article 335 of the Revised Penal Code as amended waiting shed in which they stayed for a while. Inside the waiting
by Republic Act No. 2632 and Republic Act No. 411."2 shed, the person with tatoos over his body, known as 'Tatoo', and
the one with elongated chin, known as 'Baba', took Pidol cough
Adel Tuangco was arraigned on June 5, 1995; he pleaded not syrup. (Ibid, pp. 61-65). They went to the rice field because they
guilty to both charges. In the course of the trial accused Sonny were very drunk. (Ibid, pp. 66). The four (4) stayed at the waiting
Tuangco was apprehended and also pleaded not guilty. Nelson shed until 8:00 o'clock in the evening. (TSN, July 21 , 1995, p.
Pineda, Jr. remains at large. 12).

The principal evidence against the accused consisted of the The three, accused Adel Tuangco, 'Baba' and 'Tatoo' later left the
testimony of an eyewitness, Silvestre Sanggalan, a deaf-mute. He waiting shed and went to the rice field to follow a girl who was
gave his testimony through sign language, which was interpreted wearing a long hair. Through photographs of the deceased Aurea
by a sign language expert. The court's summation of the evidence Eugenio, witness Sanggalan identified her to be the girl whom the
is as follows: three followed into the rice field. (Ibid, pp. 14 and 27-28). As soon
as they caught up with the deceased, ‘Tatoo' pushed her. Adel
"On January 3, 1995 at around 6:00 o'clock in the evening, he Tuangco got hold of the shoulder bag which the deceased Aurea
was inside a 'beer house' along the national highway. He had Eugenio was carrying at that time. 'Baba' and 'Tattoo' then
seven (7) companions at that time. (TSN, July 10, 1995, pp. 55- pushed Aurea against a tree and stabbed her with a knife several
57). The group consisting of eight (8) persons including the times on the neck. At this point, Adel Tuangco joined the two and
witness arrived at the said place at day time. When nighttime also stabbed the deceased. The deceased fell down. (Ibid, pp. 15-
came, witness Sanggalan together with three (3) of his 19).
companions left the place and proceeded to a rice field near the
highway. (Ibid, p. 58). Sanggalan described and identified the said After the deceased fell down on the ground, 'Tatoo' inserted a
three (3) other persons as a) tricycle driver with tatoos over his bottle of Pidol cough syrup into her private parts. Then 'Baba'
body and scars on his arms; b) a person with a long chin and pushed the bottle further into the private parts of the deceased.
known as 'Baba' and c) accused Adel Tuangco. Sanggalan stepped While the bottle was being pushed, Adel Tuangco was hugging the
down from the witness stand and identified accused Adel Tuangco deceased who at that time was still alive and resisting the assault.
as one of the three (3) other persons together with whom, he went Together, the three removed the blouse, bra, skirt and panty of
to the rice field. (Ibid, pp. 58-59). The tricycle driver with tatoos Aurea Eugenio. Adel Tuangco raped the deceased. 'Tatoo' and
over his body and the person with an elongated chin were not 'Baba' likewise successively raped Aurea in that order. (Ibid, pp.

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CASES ON EVIDENCE

19-23). At the time that the three accused were raping Aurea 1. Six (6) in number, gaping, within an area of 9.0 x 6.0 cms.
Eugenio, witness Sanggalan was about three and one half (3½) located on the left side of the neck directed medially involving the
meters away from them. While Adel Tuangco was raping the skin, blood vessels, lacerating the throat and esophagus, with
victim, 'Tatoo' and 'Baba' were beside them. When 'Baba' and depths from 2-5 cms. One end is contused the other is sharp.
'Tatoo' took their respective turns in raping the victim the other
two were holding her hands. (Ibid, pp. 24-25). 2. Three (3) in number, gaping, within an area of 6.0 x 5.0 cms.
one end is contused, the other is sharp, located on the right side
After raping the victim, Adel Tuangco took her bag, 'Tatoo' got her of the neck; directed medially involving the skin, blood vessels,
camera and cash money while 'Baba got her ring, earrings and hitting the trachea with depths from 2.4 cms.
watch. (Ibid, pp. 25-26). After the incident, 'Tatoo' and 'Baba'
went to the rice field while Adel Tuangco went to the other Brain and visceral organs-very pale
direction. (Ibid, p. 29). Earlier, during the incident, Adel Tuangco,
'Tatoo' and 'Baba', on two occasions, asked witness Sanggalan to Heart chambers- contain a very small amount of dark clotted
leave. However, the witness merely hid behind the grasses and blood.
trees. (Ibid, p. 30 and TSN, August 7, 1995, p. 31). When recalled
to the witness stand on January 17, 1996, Sanggalan identified Stomach- empty
accused Sonny Tuangco as the one he referred to as 'Baba'.3
Hymen- fresh lacerations on all sides with an opening of about
Dr. Dominic Aguda, a medico legal officer at the National Bureau 4.0 x 3.0 cms., massive blood clots accumulated within vaginal
of Investigation, conducted an autopsy of the victim and made the canal.
following findings:
Perineum- V- shaped median laceration measuring about 5.0
"Pallor, marked and generalized cms. (Exhibit "E")

Hematoma- 7.0 x 5.0 cms. left frontal region, head; 3.0 x 2 cms. Dr. Aguda explained the nature of the fresh lacerations on the
right frontal region head; 7.0 x 6.0 cms. right auricular region; hymen of the victim as well as the massive blood clots
4.0 x 2.0 cms. right palm; 3.0 x 2.0 cms., left palm 2.0 x 2.0 cms. accumulated within the vaginal canal. He testified that these
chest; 3.0 x 2.0 cms. chin injuries were caused not only by human penis that penetrated the
hymen but by a hard foreign object like a bottle. (Ibid, p. 30). The
Abrasion- 3.0 x 2.0 cms., right chin; 2.0 x 1.0 cms. right breast abrasions on the left and right breast could have been caused by
2.0 x 2.0 cms. left breast. human bites. (Ibid, p. 25). The stab wounds described as gaping
and the stab wounds located within the neck area were inflicted
Lacerated wound. 2.5 cms. pre-auricular area, left on the victim by her assailant using a single bladed weapon. (Ibid,
p. 26). It is very possible that the victim was sexually abused.
Stab Wounds- (Ibid, p. 31 ). The heart chambers of the victim contained very
small amount of dark clotted blood, which means there was not
enough blood anymore in the heart as the victim suffered massive

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bleeding. This was due to the nine (9) stabbed wounds inflicted on Between 7:00 and 7:30 o'clock in the evening, the bus stopped at
the neck of the victim. The proximate cause of death of the Sitio Dalan Baka, Barangay Sulipan, Apalit, Pampanga where the
deceased was severe hemorrhage secondary to multiple stab victim Aurea Eugenio alighted. From the national highway, the
wounds. (Ibid, pp. 34-35). The abrasions and hematomas on the house of the victim was about three hundred (300) meters away.
body of the victim are indications of struggling during the sexual Although lights can be seen from the said house, it was very dark
attack on the victim. (Ibid, p. 34).4 and silent on the road going to the same and coming from the
highway. On either side of the road were tall grasses and trees.
Both accused denied the charges. Adel Tuangco testified that he On the side of the highway was a waiting shed. Inside the waiting
was at home in the evening in question, a defense which was shed were four (4) persons. They were three (3) accused, namely,
corroborated by his common-law wife Liza Reyes Tuangco,5 by Adel Tuangco y Dizon, his brother Sonny Tuangco y Dizon alias
his mother, Erlinda Dizon Tuangco6 and his sister Glessen. For 'Baba' and Nelson Pineda, Jr. alias 'Jun Tattoo' and the
his part Sonny Tuangco claimed he was alone in his house at prosecution eye witness Silvestre Sanggalan alias 'Popoy, alias
Balungao, Calumpit, Bulacan in the evening of January 3, 1995.7 'Pipi'.

The trial court made the following findings of facts: Earlier, at around 6:00 o'clock in the evening of the same day, the
three (3) accused and witness Sanggalan were inside a 'beer
"From the evidence adduced in these cases, it was established house' located along the national highway at Calumpit, Bulacan,
that- drinking beer and gin. Together with four (4) other persons, they
started their drinking spree when it was still daytime. When
The victim Aurea Eugenio, single and a resident of Sitio Dalan nighttime came, the three (3) accused and witness Sanggalan left
Baka, Barangay Sulipan, Apalit Pampanga was working as a their companions and proceeded to a rice field near the highway.
bookkeeper in Centro Escolar University Credit Cooperative They stayed in the waiting shed located at the opposite side of the
located at the City of Manila. road where the victim Aurea Eugenio alighted. The four (4) went
to the rice field because they were already drunk. While inside the
On January 3, 1995, the first working day of the year, she waiting shed, accused Sonny Tuangco and Nelson Pineda took
reported to office bringing with her a Kodak camera to take Pidol cough syrup.
pictures of her officemates for souvenir. At about 5:00 o'clock in
the afternoon of the same day, she told her officemates that she The three (3) accused left the waiting shed and went to the rice
will go to their house in Apalit, Pampanga although she was not field to follow the victim who had already crossed the national
scheduled to do so as it was an ordinary week day. She brought highway and was walking towards her house. The three (3)
with her, the camera and the P3,000.00 cash money to be spent accused asked Sanggalan to leave. However, instead of leaving,
on the occasion of their town fiesta. From the office, she Sanggalan hid behind the bushes and trees, thus, he was able to
proceeded to the terminal of Victory Liner Bus at Caloocan City, witness the incident in question.
where, at 6:00 o'clock in evening, she boarded Victory Liner Bus
No. 272. As soon as the accused caught up with the victim, Nelson Pineda,
Jr. pushed her while Adel Tuangco got hold of her shoulder bag.
Sonny Tuangco and Nelson Pineda pushed the victim Aurea

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Tuangco against a tree and stabbed her several times in the neck. was the proximate cause of the victim's death. The abrasions and
At this point, Adel Tuangco joined the two (2) and he also stabbed hematomas on the body of the victim are indications of struggling
the victim until she fell down. As the victim was lying on the during the sexual attack on the victim."8
ground, Nelson Pineda inserted the bottle of Pidol cough syrup in
her private parts. Sonny Tuangco further pushed the bottle into The trial court ruled that the guilt of the accused as charged was
the body of the victim. While the bottle was being pushed, Adel established with the required quantum of evidence and concluded
Tuangco was hugging the victim who was still alive and resisting that the three accused conspired to commit the crimes charged.
the assault being made against her person. Together, the three (3) The accused were sentenced as follows:
accused removed the blouse, bra, skirt and panty of Aurea
Eugenio. Thereafter, Adel Tuangco, Nelson Pineda, Jr. and Sonny "WHEREFORE, the Court finds the accused Adel Tuangco y Dizon
Tuangco, in that order, successively raped the victim. While Adel and Sonny Tuangco y Dizon guilty beyond reasonable doubt as
Tuangco was raping the victim, the two (2) other accused were principals of the crime of theft defined in Article 309 in relation to
beside him. When Nelson Pineda, Jr. and Sonny Tuangco were Article 308 of the Revised Penal Code and of the crime of Rape
taking their respective turns in raping the victim, the two (2) with Homicide defined in Article 335, as amended, of the same
other accused were holding her hands. Code and hereby renders judgment as follows:

After raping the victim, Adel Tuangco took her bag, Pineda got her 1. In Criminal Case No. 95-1609(M), the said accused are
camera and cash money while Sonny Tuangco got her ring, convicted of Theft and hereby sentenced to suffer the
earrings and watch. Thereafter, Nelson Pineda, Jr. and Sonny indeterminate penalty ranging from six (6) months of arresto
Tuangco went to the rice field while Adel Tuangco proceeded to mayor as minimum to two (2) years, eleven (11) months and ten
the opposite direction. (10) days of prision correccional as maximum; the said accused
are likewise ordered to indemnify the heirs of the victim Aurea
The body of the victim was already stiff when found by witness Eugenio, jointly and severally, the amount of P3,000.00.
Michael Enriquez the following day lying on the rice field owned
by his grandfather, Ignacio Enriquez. The body was lying on its 2. In Criminal Case No. 95-1610(M), the aforesaid accused are
back with the hands upraised, the blouse raised upwards and convicted of two (2) special complex crimes of Rape with Homicide
naked from the waist down. The private parts of the victim had an and each of them is hereby sentenced to two (2) death penalties;
opening of about two (2) inches and with blood all over it. both of them are ordered, jointly and severally, to indemnify the
heirs of the victim Aurea Eugenio the sum of P105,150.00 as
The fresh lacerations on the hymen of the victim as well as the actual damages, and the further sums of a) P50,000.00 for the
massive blood clots accumulated within the vaginal canal were victim's death, b) P100,000.00 as moral damages and c)
caused not only by human penis that penetrated her private parts P50,000.00 as exemplary damages, or a total of P200,000, in each
but by hard foreign object like a bottle. The abrasions on the of the two (2) crimes which they have separately committed and
breast of the victim could have been caused by human bites. The each shall pay one-half (½) of the costs.
stab wounds located within the neck area of the victim were
inflicted by her assailant using a single bladed weapon. The nine SO ORDERED.9
(9) stab wounds in the neck induced severe hemorrhage which

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CASES ON EVIDENCE

The case is before this Court on automatic review. pointed out are minor and do not detract from the positive
identification made by witness Sanggalan of the accused-
The Public Attorney's Office submits the following assignment of appellants as the persons who raped and killed Eugenio and took
errors in the appellants' brief: her personal effects.

"I After a very careful examination of the evidence of record, we

resolve to affirm the judgment of conviction. We find no cogent
THE TRIAL COURT GRAVELY ERRED IN GIVING FULL FAITH justification to disturb or set aside the finding of the trial court
AND CREDENCE TO THE ALLEGED EYEWITNESS ACCOUNT OF upholding the credibility of the deaf-mute witness, on the
SILVESTRE SANGGALAN WHO IS A DEAF-MUTE AND following rationalization:
UNSCHOOLED.
"This Court, cognizant of the physical handicap of the eyewitness
II Silvestre Sanggalan, carefully scrutinized his testimony and noted
that the same were made, on several occasions from July 10,
THE TRIAL COURT GRAVELY ERRED IN FINDING BOTH 1995 when he was called for the first time to testify until July 5,
ACCUSED-APPELLANTS GUILTY BEYOND REASONABLE DOUBT 1996 when he was recalled for the purpose of cross-examination
OF TWO (2) COUNTS OF SPECIAL COMPLEX CRIME OF RAPE on behalf of accused Sonny Tuangco, in a candid and
WITH HOMICIDE AND THEFT."10 straightforward manner. While the Court observes minor
inconsistencies in his declarations, these are not reasons to
In discrediting the testimony of the deaf-mute eyewitness, render his testimony incredible. On the contrary, it is well-
accused- appellant points out that because Silvestre Sanggalan established that minor inconsistencies in the testimony of a
has had no formal schooling in a special school for deaf-mutes, witness are indications that the same is not rehearsed and all the
the possibility that resort to conjectures and surmises, brought more should be considered credible. Thus, discrepancies in minor
about by overzealousness to understand what his witness really details indicate veracity rather than prevarication and only tend
wanted to say could not be discounted. Thus, accused-appellant to bolster the probative value of such testimony. (People vs.
cites certain portions of Sanggalan's testimony which appeared Mocasa, 229 SCRA 422).
unclear, e.g., the witness admitted that the place where the
incident happened was "very dark", and he was inconsistent as to This Court likewise evaluated very carefully, the qualifications
who, between Adel Tuangco or Jun Tatoo, was the first to rape and competence of Eva Sangco, the sign language expert utilized
the victim. Thus, his handicap prevented a truthful narration of by the prosecution and found the same to be sufficient to put on
what really transpired. record with accuracy, the declarations being made by witness
Sanggalan on the witness stand. According to Eva Sangco, sign
The Solicitor General prays for an affirmance of the decision in all language experts have different mode of communications. These
respects. He asserts that a deaf-mute is qualified to testify, and are a) oral method b) simultaneous method c) pantomine d)
the interpreter explained that through sign language, Sanggalan reverse interpretation e) speech reading f) natural signs and
demonstrated how Eugenio was raped and thereafter killed by gestures and g) interactive writings which are more on
appellants and Pineda, Jr. It is claimed that the inconsistencies dramatization and drawing illustrations. In the interpretation of

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CASES ON EVIDENCE

the declarations of witness Sanggalan, Eva Sangco employed the doubt on her motive for taking the witness stand and renders
natural homemade sign method. Eva Sangco has undergone incredible her testimony. Thus, on several times at the witness
several trainings on this particular method. (TSN, July 21, 1995, stand, she had been observed smiling and not candid with her
pp. 7-8). declarations. (TSN, February 7, 1996, p. 13). On one occasion,
after stating that Adel Tuangco and Sonny Tuangco have nothing
In its futile attempt to destroy the credibility of witness to do with the rape-slay of Aurea Eugenio, witness Baliber
Sanggalan, the defense attacked his character and present a immediately laughed. (Ibid, pp. 25-26).11
witness in the person of Merlita Baliber to show that he is a
drunkard and a drug addict. Likewise the defense presented The theory of the accused-appellant that Sanggalan "could not
documentary evidence (Exh. "3") to show that Sanggalan had truthfully and convincingly convey what really transpired on that
been accused of rape in a criminal case before the Regional Trial fateful night" because he had no formal schooling in a school for
Court of Pasig, Rizal. These evidence presented by the defense are special persons like him and the interpreter was not the one who
unavailing. In People vs. Dominguez, 217 SCRA 170, it was held had taught him is not tenable.
that even a fact of prior criminal conviction alone does not suffice
to discredit a witness. And in People vs. Tanco, 218 SCRA 494, it A deaf-mute is not incompetent as a witness. All persons who can
was held that the mere pendency of a criminal case against a perceive, and perceiving, can make known their perception to
person does not disqualify him from becoming a witness. For the others, may be witnesses.12 Deaf-mutes are competent witnesses
test to measure the value of the testimony of a witness is whether where they (1) can understand and appreciate the sanctity of an
or not such is in conformity to knowledge and consistent with oath; (2) can comprehend facts they are going to testify on; and
experience of mankind. (People vs. Morre, 217 SCRA 219). This (3) can communicate their ideas through a qualified
Court finds it unnecessary to reiterate the earlier discussion as to interpreter.13 Thus, in People vs. De Leon14 and People vs.
why it gives credence to the testimony of witness Sanggalan. Sasota,15 the accused was convicted on the basis of the
testimony of a deaf-mute. Although in People vs. Bustos16 the
If at all, the evidence of the defense with respect to the character testimony of a deaf-mute was rejected, this was because there
of Sanggalan substantiated the theory of the prosecution- that were times during his testimony that the interpreter could not
these people, witness Sanggalan, and the three (3) accused were make out what the witness meant by the signs she used. In the
often times seen drinking liquor and taking prohibited drugs. No instant case, the interpreter was a certified sign language
less than defense witness Merlita Baliber testified that on one interpreter with twenty-two (22) years teaching experience at the
occasion, she saw witness Silvestre Sanggalan and accused Philippine School for the Deaf, had exposure in television
Nelson Pineda, Jr. going out of the 'beer house' to join their three programs and had testified in five other previous court
(3) other companions walking along the highway.1ªvvph!1 That proceedings. She possessed special education and training for
Baliber would deny that accused Adel Tuangco and Sonny interpreting sign language. The trial court evaluated her
Tuangco were among those people, is expected. For, as admitted competence to put on record with accuracy the declaration made
by Baliber, she was asked by the mother of accused Adel Tuangco by witness Sanggalan on the witness stand, and she testified that
and accused Sonny Tuangco to testify in these proceedings to she employed the natural or homemade sign method.17 Needless
help the said accused. (TSN, February 7, 1996, p. 35). Then too, to stress, the manner in which the examination of a deaf-mute
the demeanor by which Baliber was testifying immediately casts should be conducted is a matter to be regulated and controlled by

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CASES ON EVIDENCE

the trial court in its discretion, and the method adopted will not Bulacan.21 In the case of Sonny Tuangco, who went into hiding
be reviewed by the appellate court in the absence of a showing after learning that his brother Adel was arrested, and who stayed
that the complaining party was in some way injured by reason of with a relative in Caloocan City for about one (1) year until he was
the particular method adopted.18 The imperfections or apprehended by the police authorities,22 his flight should be
inconsistencies cited in appellants' brief arise from the fact that taken as an admission of his guilt.
there is some difficulty in eliciting testimony where the witness is
deaf-mute, but these do not detract from the credibility of his We also find no cogent reason to disturb the finding of conspiracy
testimony, much less justify the total rejection of the same. What among the accused-appellants as rationalized by the trial court
is material is that he knew personally the accused-appellants, thus:
was with them on the fateful night when the incident happened,
and had personally witnessed the rape-slay and theft three and ½ "First, they were together drinking in a pubhouse from where they
(3 ½) meters away from the scene. He did not waver in the proceeded to the rice field and stayed inside a nearby waiting
identification of the three accused despite rigorous cross- shed.
examination, and positively pointed to the accused-appellants as
the persons who raped and killed Eugenio and took her personal Second, as soon as the victim was seen walking towards her
effects.19 The trial court's assessment of the credibility of house, the three (3) accused immediately followed her.
Sanggalan, whose testimony was found to be candid and
straightforward, deserves the highest respect of this Court. Third, when they caught up with the victim, they simultaneously
attacked her by stabbing her neck with bladed weapon.
Moreover, the testimony of Sanggalan was corroborated by the Thereafter, when the victim fell down, the accused aided each
doctor who conducted the autopsy. Dr. Aguda testified that other in raping the victim.
Eugenio had nine (9) stab wounds on the neck, fresh hymenal
lacerations and massive blood clots within the vaginal canal, Fourth, before fleeing from the scene of the crimes, the accused
caused, among others, by the entry of a hard foreign object like a took the victim's cash money and personal belongings."23
bottle and that the abrasions and hematomas on the cadaver
indicated that Eugenio struggled during the assault.20 The imposable penalty for the rape with homicide is death.
Pursuant to Article 335 of the Revised Penal Code, as amended by
The defense of alibi must yield to the positive identification of the Section 11 of the Republic Act No. 7659, "when by reason or on
accused-appellants by Sanggalan, and the attempt of the mother the occasion of the rape, a homicide is committed, the penalty
of the accused-appellants, Erlinda Tuangco, a sister, Glessen shall be death". Because of the finding of conspiracy in the
Tuangco, and the common-law wife of Adel Tuangco, Liza Reyes, commission of the complex crime of rape with homicide, the
to corroborate such a defense must fail. Moreover, no proof was imposition of two death penalties upon each of the accused-
adduced to show the physical impossibility of the accused being appellants is correct.24
at the scene of the crime; the evidence shows that the rape-slay
took place in Sitio Dalan Baka, Barangay Sulipan, Municipality of The imposable penalty for theft is prision correcional in its
Apalit, Pampanga, which was ten to fifteen minutes from the minimum and medium period, if the value of the thing stolen is
residence of Adel Tuangco in Frances Bukid, Calumpit, more than P200.00 but does not exceed P6,000.00. In this case,

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CASES ON EVIDENCE

the amount of P3,000.00 which is the cash taken from the victim,
was the only amount proven, as the value of the other objects
taken was not established. Thus, the trial court correctly imposed
an indeterminate penalty of six (6) months of arresto mayor as
minimum to two (2) years, eleven (11) months and ten (10) days of
prision correcional as maximum.

The civil indemnity must also be modified in line with prevailing

jurisprudence.25 Thus, the civil indemnity ex delicto should be
P100,000.00 for the victim's death. The award of exemplary
damages is justified in view of the presence of the aggravating
circumstances of cruelty, as the insertion of the bottle into the
private part of the victim caused unnecessary moral and physical
pain while the victim was still alive.

Four justices of this Court, however, have continued to maintain

the unconstitutionality of Republic Act No. 7659 insofar as it
prescribes the death penalty; nevertheless, they submit to the
ruling of the majority to the effect that the law is constitutional
and that the death penalty can be lawfully imposed in the case at
bar.

WHEREFORE, the judgment convicting Adel Tuangco y Dizon and

Sonny Tuangco y Dizon for the crimes of theft and rape with
homicide in Criminal Case Nos. 95-1609(M) and 95-1610(M) is
hereby affirmed with the modification that the civil indemnity ex
delicto is increased to P100,000.00.

Upon finality of this decision, let certified true copies thereof, as

well as the records of this case, be forthwith forwarded to the
Office of the President for possible exercise of the pardoning
power.

SO ORDERED.

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CASES ON EVIDENCE

perception. Concomitantly, a witness may not testify on matters

which he or she merely learned from others either because said
witness was told or read or heard those matters. Such testimony
is considered hearsay and may not be received as proof of the
truth of what the witness has learned. This is known as the
hearsay rule.

Same; Same; Same; Hearsay is not limited to oral testimony or

statements; the general rule that excludes hearsay as evidence
applies to written, as well as oral statements.—As discussed in
D.M. Consunji, Inc. v. CA, 357 SCRA 249 (2001), “Hearsay is not
limited to oral testimony or statements; the general rule that
excludes hearsay as evidence applies to written, as well as oral
statements.” There are several exceptions to the hearsay rule
under the Rules of Court, among which are entries in official
records. Section 44, Rule 130 provides: Entries in official records
made in the performance of his duty by a public officer of the
Philippines, or by a person in the performance of a duty specially
enjoined by law are prima facie evidence of the facts therein
stated. In Alvarez v. PICOP Resources, 606 SCRA 444 (2009), this
Court reiterated the requisites for the admissibility in evidence, as
an exception to the hearsay rule of entries in official records,
thus: (a) that the entry was made by a public officer or by another
person specially enjoined by law to do so; (b) that it was made by
the public officer in the performance of his or her duties, or by
such other person in the performance of a duty specially enjoined
by law; and (c) that the public officer or other person had
sufficient knowledge of the facts by him or her stated, which must
have been acquired by the public officer or other person
39. MALAYAN INSURANCE VS ALBERTO personally or through official information.

Remedial Law; Evidence; Hearsay Evidence Rule; A witness may Same; Same; Res Ipsa Loquitur; Requisites for the Application of
not testify on matters which he or she merely learned from others the Res Ipsa Loquitur.—In the case at bar, aside from the
either because said witness was told or read or heard those statement in the police report, none of the parties disputes the
matters.—Under the rules of evidence, a witness can testify only fact that the Fuzo Cargo Truck hit the rear end of the Mitsubishi
to those facts which the witness knows of his or her personal Galant, which, in turn, hit the rear end of the vehicle in front of
knowledge, that is, which are derived from the witness’ own it. Respondents, however, point to the reckless driving of the

287
CASES ON EVIDENCE

Nissan Bus driver as the proximate cause of the collision, which

allegation is totally unsupported by any evidence on record. And At around 5 o'clock in the morning of December 17, 1995, an
assuming that this allegation is, indeed, true, it is astonishing accident occurred at the corner of EDSA and Ayala Avenue,
that respondents never even bothered to file a cross-claim against Makati City, involving four (4) vehicles, to wit: (1) a Nissan Bus
the owner or driver of the Nissan Bus. What is at once evident operated by Aladdin Transit with plate number NYS 381; (2) an
from the instant case, however, is the presence of all the Isuzu Tanker with plate number PLR 684; (3) a Fuzo Cargo Truck
requisites for the application of the rule of res ipsa loquitur. To with plate number PDL 297; and (4) a Mitsubishi Galant with
reiterate, res ipsa loquitur is a rule of necessity which applies plate number TLM 732.[4]
where evidence is absent or not readily available. As explained in
D.M. Consunji, Inc., it is partly based upon the theory that the Based on the Police Report issued by the on-the-spot investigator,
defendant in charge of the instrumentality which causes the Senior Police Officer 1 Alfredo M. Dungga (SPO1 Dungga), the
injury either knows the cause of the accident or has the best Isuzu Tanker was in front of the Mitsubishi Galant with the
opportunity of ascertaining it and that the plaintiff has no such Nissan Bus on their right side shortly before the vehicular
knowledge, and, therefore, is compelled to allege negligence in incident. All three (3) vehicles were at a halt along EDSA facing
general terms and to rely upon the proof of the happening of the the south direction when the Fuzo Cargo Truck simultaneously
accident in order to establish negligence. As mentioned above, the bumped the rear portion of the Mitsubishi Galant and the rear
requisites for the application of the res ipsa loquitur rule are the left portion of the Nissan Bus. Due to the strong impact, these
following: (1) the accident was of a kind which does not ordinarily two vehicles were shoved forward and the front left portion of the
occur unless someone is negligent; (2) the instrumentality or Mitsubishi Galant rammed into the rear right portion of the Isuzu
agency which caused the injury was under the exclusive control Tanker.[5]
of the person charged with negligence; and (3) the injury suffered
must not have been due to any voluntary action or contribution Previously, particularly on December 15, 1994, Malayan
on the part of the person injured. Insurance issued Car Insurance Policy No. PV-025-00220 in favor
of First Malayan Leasing and Finance Corporation (the assured),
VELASCO JR., J.: insuring the aforementioned Mitsubishi Galant against third
party liability, own damage and theft, among others. Having
The Case insured the vehicle against such risks, Malayan Insurance
claimed in its Complaint dated October 18, 1999 that it paid the
Before Us is a Petition for Review on Certiorari under Rule 45, damages sustained by the assured amounting to PhP 700,000.[6]
seeking to reverse and set aside the July 28, 2010 Decision[1] of
the Court of Appeals (CA) and its October 29, 2010 Resolution[2] Maintaining that it has been subrogated to the rights and
denying the motion for reconsideration filed by petitioner Malayan interests of the assured by operation of law upon its payment to
Insurance Co., Inc. (Malayan Insurance). The July 28, 2010 CA the latter, Malayan Insurance sent several demand letters to
Decision reversed and set aside the Decision[3] dated February 2, respondents Rodelio Alberto (Alberto) and Enrico Alberto Reyes
2009 of the Regional Trial Court, Branch 51 in Manila. (Reyes), the registered owner and the driver, respectively, of the
Fuzo Cargo Truck, requiring them to pay the amount it had paid
The Facts to the assured. When respondents refused to settle their liability,

288
CASES ON EVIDENCE

Malayan Insurance was constrained to file a complaint for Cost of suit.

damages for gross negligence against respondents.[7] SO ORDERED.[9]

In their Answer, respondents asserted that they cannot be held Dissatisfied, respondents filed an appeal with the CA, docketed as
liable for the vehicular accident, since its proximate cause was CA-G.R. CV No. 93112. In its Decision dated July 28, 2010, the
the reckless driving of the Nissan Bus driver. They alleged that CA reversed and set aside the Decision of the trial court and ruled
the speeding bus, coming from the service road of EDSA, in favor of respondents, disposing:
maneuvered its way towards the middle lane without due regard
to Reyes' right of way. When the Nissan Bus abruptly stopped, WHEREFORE, the foregoing considered, the instant appeal is
Reyes stepped hard on the brakes but the braking action could hereby GRANTED and the assailed Decision dated 2 February
not cope with the inertia and failed to gain sufficient traction. As 2009 REVERSED and SET ASIDE. The Complaint dated 18
a consequence, the Fuzo Cargo Truck hit the rear end of the October 1999 is hereby DISMISSED for lack of merit. No costs.
Mitsubishi Galant, which, in turn, hit the rear end of the vehicle
in front of it. The Nissan Bus, on the other hand, sideswiped the SO ORDERED.[10]
Fuzo Cargo Truck, causing damage to the latter in the amount of
PhP 20,000. Respondents also controverted the results of the The CA held that the evidence on record has failed to establish
Police Report, asserting that it was based solely on the biased not only negligence on the part of respondents, but also
narration of the Nissan Bus driver.[8] compliance with the other requisites and the consequent right of
Malayan Insurance to subrogation.[11] It noted that the police
After the termination of the pre-trial proceedings, trial ensued. report, which has been made part of the records of the trial court,
Malayan Insurance presented the testimony of its lone witness, a was not properly identified by the police officer who conducted the
motor car claim adjuster, who attested that he processed the on-the-spot investigation of the subject collision. It, thus, held
insurance claim of the assured and verified the documents that an appellate court, as a reviewing body, cannot rightly
submitted to him. Respondents, on the other hand, failed to appreciate firsthand the genuineness of an unverified and
present any evidence. unidentified document, much less accord it evidentiary value.[12]

In its Decision dated February 2, 2009, the trial court, in Civil Subsequently, Malayan Insurance filed its Motion for
Case No. 99-95885, ruled in favor of Malayan Insurance and Reconsideration, arguing that a police report is a prima facie
declared respondents liable for damages. The dispositive portion evidence of the facts stated in it. And inasmuch as they never
reads: questioned the presentation of the report in evidence,
respondents are deemed to have waived their right to question its
WHEREFORE, judgment is hereby rendered in favor of the authenticity and due execution.[13]
plaintiff against defendants jointly and severally to pay plaintiff
the following: In its Resolution dated October 29, 2010, the CA denied the
The amount of P700,000.00 with legal interest from the time of motion for reconsideration. Hence, Malayan Insurance filed the
the filing of the complaint; instant petition.
Attorney's fees of P10,000.00 and;

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CASES ON EVIDENCE

The Issues WHETHER THE SUBROGATION OF MALAYAN INSURANCE HAS

PASSED COMPLIANCE AND REQUISITES AS PROVIDED UNDER
In its Memorandum[14] dated June 27, 2011, Malayan Insurance PERTINENT LAWS.
raises the following issues for Our consideration:
Essentially, the issues boil down to the following: (1) the
I admissibility of the police report; (2) the sufficiency of the
evidence to support a claim for gross negligence; and (3) the
WHETHER THE CA ERRED IN REFUSING ADMISSIBILITY OF validity of subrogation in the instant case.
THE POLICE REPORT SINCE THE POLICE INVESTIGATOR WHO
PREPARED THE SAME DID NOT ACTUALLY TESTIFY IN COURT Our Ruling
THEREON.
The petition has merit.
II
Admissibility of the Police Report
WHETHER THE SUBROGATION OF MALAYAN INSURANCE IS
IMPAIRED AND/OR DEFICIENT. Malayan Insurance contends that, even without the presentation
of the police investigator who prepared the police report, said
On the other hand, respondents submit the following issues in its report is still admissible in evidence, especially since respondents
Memorandum[15] dated July 7, 2011: failed to make a timely objection to its presentation in evidence.
[16] Respondents counter that since the police report was never
I confirmed by the investigating police officer, it cannot be
considered as part of the evidence on record.[17]
WHETHER THE CA IS CORRECT IN DISMISSING THE
COMPLAINT FOR FAILURE OF MALAYAN INSURANCE TO Indeed, under the rules of evidence, a witness can testify only to
OVERCOME THE BURDEN OF PROOF REQUIRED TO those facts which the witness knows of his or her personal
ESTABLISH THE NEGLIGENCE OF RESPONDENTS. knowledge, that is, which are derived from the witness' own
perception.[18] Concomitantly, a witness may not testify on
II matters which he or she merely learned from others either
because said witness was told or read or heard those matters.[19]
WHETHER THE PIECES OF EVIDENCE PRESENTED BY Such testimony is considered hearsay and may not be received as
MALAYAN INSURANCE ARE SUFFICIENT TO CLAIM FOR THE proof of the truth of what the witness has learned. This is known
AMOUNT OF DAMAGES. as the hearsay rule.[20]

III As discussed in D.M. Consunji, Inc. v. CA,[21] "Hearsay is not

limited to oral testimony or statements; the general rule that
excludes hearsay as evidence applies to written, as well as oral
statements."

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CASES ON EVIDENCE

There are several exceptions to the hearsay rule under the Rules Sufficiency of Evidence
of Court, among which are entries in official records.[22] Section
44, Rule 130 provides: Malayan Insurance contends that since Reyes, the driver of the
Fuzo Cargo truck, bumped the rear of the Mitsubishi Galant, he
Entries in official records made in the performance of his duty by is presumed to be negligent unless proved otherwise. It further
a public officer of the Philippines, or by a person in the contends that respondents failed to present any evidence to
performance of a duty specially enjoined by law are prima facie overturn the presumption of negligence.[26] Contrarily,
evidence of the facts therein stated. respondents claim that since Malayan Insurance did not present
any witness who shall affirm any negligent act of Reyes in driving
In Alvarez v. PICOP Resources,[23] this Court reiterated the the Fuzo Cargo truck before and after the incident, there is no
requisites for the admissibility in evidence, as an exception to the evidence which would show negligence on the part of
hearsay rule of entries in official records, thus: (a) that the entry respondents.[27]
was made by a public officer or by another person specially
enjoined by law to do so; (b) that it was made by the public officer We agree with Malayan Insurance. Even if We consider the
in the performance of his or her duties, or by such other person inadmissibility of the police report in evidence, still, respondents
in the performance of a duty specially enjoined by law; and (c) cannot evade liability by virtue of the res ipsa loquitur doctrine.
that the public officer or other person had sufficient knowledge of The D.M. Consunji, Inc. case is quite elucidating:
the facts by him or her stated, which must have been acquired by
the public officer or other person personally or through official Petitioner's contention, however, loses relevance in the face of the
information. application of res ipsa loquitur by the CA. The effect of the
doctrine is to warrant a presumption or inference that the mere
Notably, the presentation of the police report itself is admissible fall of the elevator was a result of the person having charge of the
as an exception to the hearsay rule even if the police investigator instrumentality was negligent. As a rule of evidence, the doctrine
who prepared it was not presented in court, as long as the above of res ipsa loquitur is peculiar to the law of negligence which
requisites could be adequately proved.[24] recognizes that prima facie negligence may be established without
direct proof and furnishes a substitute for specific proof of
Here, there is no dispute that SPO1 Dungga, the on-the-spot negligence.
investigator, prepared the report, and he did so in the
performance of his duty. However, what is not clear is whether The concept of res ipsa loquitur has been explained in this wise:
SPO1 Dungga had sufficient personal knowledge of the facts
contained in his report. Thus, the third requisite is lacking. While negligence is not ordinarily inferred or presumed, and while
the mere happening of an accident or injury will not generally give
Respondents failed to make a timely objection to the police rise to an inference or presumption that it was due to negligence
report's presentation in evidence; thus, they are deemed to have on defendant's part, under the doctrine of res ipsa loquitur, which
waived their right to do so.[25] As a result, the police report is still means, literally, the thing or transaction speaks for itself, or in
admissible in evidence. one jurisdiction, that the thing or instrumentality speaks for

291
CASES ON EVIDENCE

itself, the facts or circumstances accompanying an injury may be power of the defendant to show that there was no negligence on
such as to raise a presumption, or at least permit an inference of his part, and direct proof of defendant's negligence is beyond
negligence on the part of the defendant, or some other person plaintiff's power. Accordingly, some courts add to the three
who is charged with negligence. prerequisites for the application of the res ipsa loquitur doctrine
the further requirement that for the res ipsa loquitur doctrine to
x x x where it is shown that the thing or instrumentality which apply, it must appear that the injured party had no knowledge or
caused the injury complained of was under the control or means of knowledge as to the cause of the accident, or that the
management of the defendant, and that the occurrence resulting party to be charged with negligence has superior knowledge or
in the injury was such as in the ordinary course of things would opportunity for explanation of the accident.
not happen if those who had its control or management used
proper care, there is sufficient evidence, or, as sometimes stated, The CA held that all the requisites of res ipsa loquitur are present
reasonable evidence, in the absence of explanation by the in the case at bar:
defendant, that the injury arose from or was caused by the
defendant's want of care. There is no dispute that appellee's husband fell down from the
14th floor of a building to the basement while he was working
One of the theoretical bases for the doctrine is its necessity, i.e., with appellant's construction project, resulting to his death. The
that necessary evidence is absent or not available. construction site is within the exclusive control and management
of appellant. It has a safety engineer, a project superintendent, a
The res ipsa loquitur doctrine is based in part upon the theory carpenter leadman and others who are in complete control of the
that the defendant in charge of the instrumentality which causes situation therein. The circumstances of any accident that would
the injury either knows the cause of the accident or has the best occur therein are peculiarly within the knowledge of the appellant
opportunity of ascertaining it and that the plaintiff has no such or its employees. On the other hand, the appellee is not in a
knowledge, and therefore is compelled to allege negligence in position to know what caused the accident. Res ipsa loquitur is a
general terms and to rely upon the proof of the happening of the rule of necessity and it applies where evidence is absent or not
accident in order to establish negligence. The inference which the readily available, provided the following requisites are present: (1)
doctrine permits is grounded upon the fact that the chief evidence the accident was of a kind which does not ordinarily occur unless
of the true cause, whether culpable or innocent, is practically someone is negligent; (2) the instrumentality or agency which
accessible to the defendant but inaccessible to the injured person. caused the injury was under the exclusive control of the person
charged with negligence; and (3) the injury suffered must not
It has been said that the doctrine of res ipsa loquitur furnishes a have been due to any voluntary action or contribution on the part
bridge by which a plaintiff, without knowledge of the cause, of the person injured. x x x.
reaches over to defendant who knows or should know the cause,
for any explanation of care exercised by the defendant in respect No worker is going to fall from the 14th floor of a building to the
of the matter of which the plaintiff complains. The res ipsa basement while performing work in a construction site unless
loquitur doctrine, another court has said, is a rule of necessity, in someone is negligent[;] thus, the first requisite for the application
that it proceeds on the theory that under the peculiar of the rule of res ipsa loquitur is present. As explained earlier, the
circumstances in which the doctrine is applicable, it is within the construction site with all its paraphernalia and human resources

292
CASES ON EVIDENCE

that likely caused the injury is under the exclusive control and bothered to file a cross-claim against the owner or driver of the
management of appellant[;] thus[,] the second requisite is also Nissan Bus.
present. No contributory negligence was attributed to the
appellee's deceased husband[;] thus[,] the last requisite is also What is at once evident from the instant case, however, is the
present. All the requisites for the application of the rule of res presence of all the requisites for the application of the rule of res
ipsa loquitur are present, thus a reasonable presumption or ipsa loquitur. To reiterate, res ipsa loquitur is a rule of necessity
inference of appellant's negligence arises. x x x. which applies where evidence is absent or not readily available.
As explained in D.M. Consunji, Inc., it is partly based upon the
Petitioner does not dispute the existence of the requisites for the theory that the defendant in charge of the instrumentality which
application of res ipsa loquitur, but argues that the presumption causes the injury either knows the cause of the accident or has
or inference that it was negligent did not arise since it "proved the best opportunity of ascertaining it and that the plaintiff has
that it exercised due care to avoid the accident which befell no such knowledge, and, therefore, is compelled to allege
respondent's husband." negligence in general terms and to rely upon the proof of the
happening of the accident in order to establish negligence.
Petitioner apparently misapprehends the procedural effect of the
doctrine. As stated earlier, the defendant's negligence is As mentioned above, the requisites for the application of the res
presumed or inferred when the plaintiff establishes the requisites ipsa loquitur rule are the following: (1) the accident was of a kind
for the application of res ipsa loquitur. Once the plaintiff makes which does not ordinarily occur unless someone is negligent; (2)
out a prima facie case of all the elements, the burden then shifts the instrumentality or agency which caused the injury was under
to defendant to explain. The presumption or inference may be the exclusive control of the person charged with negligence; and
rebutted or overcome by other evidence and, under appropriate (3) the injury suffered must not have been due to any voluntary
circumstances a disputable presumption, such as that of due action or contribution on the part of the person injured.[29]
care or innocence, may outweigh the inference. It is not for the
defendant to explain or prove its defense to prevent the In the instant case, the Fuzo Cargo Truck would not have had hit
presumption or inference from arising. Evidence by the defendant the rear end of the Mitsubishi Galant unless someone is
of say, due care, comes into play only after the circumstances for negligent. Also, the Fuzo Cargo Truck was under the exclusive
the application of the doctrine has been established.[28] control of its driver, Reyes. Even if respondents avert liability by
putting the blame on the Nissan Bus driver, still, this allegation
In the case at bar, aside from the statement in the police report, was self-serving and totally unfounded. Finally, no contributory
none of the parties disputes the fact that the Fuzo Cargo Truck negligence was attributed to the driver of the Mitsubishi Galant.
hit the rear end of the Mitsubishi Galant, which, in turn, hit the Consequently, all the requisites for the application of the doctrine
rear end of the vehicle in front of it. Respondents, however, point of res ipsa loquitur are present, thereby creating a reasonable
to the reckless driving of the Nissan Bus driver as the proximate presumption of negligence on the part of respondents.
cause of the collision, which allegation is totally unsupported by
any evidence on record. And assuming that this allegation is, It is worth mentioning that just like any other disputable
indeed, true, it is astonishing that respondents never even presumptions or inferences, the presumption of negligence may
be rebutted or overcome by other evidence to the contrary. It is

293
CASES ON EVIDENCE

unfortunate, however, that respondents failed to present any the parties are considered bound by any outcome arising from the
evidence before the trial court. Thus, the presumption of offer of evidence properly presented.[32] (Emphasis supplied.)
negligence remains. Consequently, the CA erred in dismissing the
complaint for Malayan Insurance's adverted failure to prove Bearing in mind that the claim check voucher and the Release of
negligence on the part of respondents. Claim and Subrogation Receipt presented by Malayan Insurance
are already part of the evidence on record, and since it is not
Validity of Subrogation disputed that the insurance company, indeed, paid PhP 700,000
to the assured, then there is a valid subrogation in the case at
Malayan Insurance contends that there was a valid subrogation bar. As explained in Keppel Cebu Shipyard, Inc. v. Pioneer
in the instant case, as evidenced by the claim check voucher[30] Insurance and Surety Corporation:
and the Release of Claim and Subrogation Receipt[31] presented
by it before the trial court. Respondents, however, claim that the Subrogation is the substitution of one person by another with
documents presented by Malayan Insurance do not indicate reference to a lawful claim or right, so that he who is substituted
certain important details that would show proper subrogation. succeeds to the rights of the other in relation to a debt or claim,
including its remedies or securities. The principle covers a
As noted by Malayan Insurance, respondents had all the situation wherein an insurer has paid a loss under an insurance
opportunity, but failed to object to the presentation of its policy is entitled to all the rights and remedies belonging to the
evidence. Thus, and as We have mentioned earlier, respondents insured against a third party with respect to any loss covered by
are deemed to have waived their right to make an objection. As the policy. It contemplates full substitution such that it places the
this Court held in Asian Construction and Development party subrogated in the shoes of the creditor, and he may use all
Corporation v. COMFAC Corporation: means that the creditor could employ to enforce payment.

The rule is that failure to object to the offered evidence renders it We have held that payment by the insurer to the insured operates
admissible, and the court cannot, on its own, disregard such as an equitable assignment to the insurer of all the remedies that
evidence. We note that ASIAKONSTRUCT's counsel of record the insured may have against the third party whose negligence or
before the trial court, Atty. Bernard Dy, who actively participated wrongful act caused the loss. The right of subrogation is not
in the initial stages of the case stopped attending the hearings dependent upon, nor does it grow out of, any privity of contract. It
when COMFAC was about to end its presentation. Thus, accrues simply upon payment by the insurance company of the
ASIAKONSTRUCT could not object to COMFAC's offer of evidence insurance claim. The doctrine of subrogation has its roots in
nor present evidence in its defense; ASIAKONSTRUCT was equity. It is designed to promote and to accomplish justice; and is
deemed by the trial court to have waived its chance to do so. the mode that equity adopts to compel the ultimate payment of a
debt by one who, in justice, equity, and good conscience, ought to
Note also that when a party desires the court to reject the pay.[33]
evidence offered, it must so state in the form of a timely objection
and it cannot raise the objection to the evidence for the first time Considering the above ruling, it is only but proper that Malayan
on appeal. Because of a party's failure to timely object, the Insurance be subrogated to the rights of the assured.
evidence becomes part of the evidence in the case. Thereafter, all

294
CASES ON EVIDENCE

WHEREFORE, the petition is hereby GRANTED. The CA's July report has no probative value for being hearsay. “It is a basic rule
28, 2010 Decision and October 29, 2010 Resolution in CA-G.R. that evidence, whether oral or documentary, is hearsay, if its
CV No. 93112 are hereby REVERSED and SET ASIDE. The probative value is not based on the personal knowledge of the
Decision dated February 2, 2009 issued by the trial court in Civil witness but on the knowledge of another person who is not on the
Case No. 99-95885 is hereby REINSTATED. witness stand.” Moreover, “an unverified and unidentified private
document cannot be accorded probative value. It is precluded
No pronouncement as to cost. because the party against whom it is presented is deprived of the
right and opportunity to cross-examine the person to whom the
SO ORDERED. statements or writings are attributed. Its executor or author
should be presented as a witness to provide the other party to the
litigation the opportunity to question its contents. Being mere
hearsay evidence, failure to present the author of the letter
renders its contents suspect and of no probative value.”

DEL CASTILLO, J.:

This Petition for Review on Certiorari1 filed pursuant to Rule 45

of the Rules of Court assails the December 29, 2011 Decision2
and May 8, 2012 Resolution3 of the Court of Appeals (CA) in CA
GR. CV No. 88321, which granted the appeal filed therein by
respondent American Home Assurance Corporation (AHAC) and
reversed and set aside the October 17, 2006 Decision4 of the
Regional Trial Court (RTC), Pasig City, Branch 271 dismissing
AHAC's Complaint5 for Damages against petitioner Marina Port
Services, Inc. (MPSI).

Factual Antecedents

On September 21, 1989, Countercorp Trading PTE., Ltd. shipped

40. MARINA PORT VS AMERICAN HOME ASSURANCE from Singapore to the Philippines 10 container vans of soft wheat
flour with seals intact on board the vessel M/V Uni Fortune. The
Remedial Law; Evidence; Hearsay Evidence Rule; It is a basic rule shipment was insured against all risks by AHAC and consigned to
that evidence, whether oral or documentary, is hearsay, if its MSC Distributor (MSC).
probative value is not based on the personal knowledge of the
witness but on the knowledge of another person who is not on the Upon arrival at the Manila South Harbor on September 25, 1989,
witness stand.—The person who prepared the said report was not the shipment was discharged in good and complete order
presented in court to testify on the same. Thus, the said survey condition and with safety seals in place to the custody of the

295
CASES ON EVIDENCE

arrastre operator, MPSI. After unloading and prior to hauling,

agents of the Bureau of Customs officially broke the seals, opened Ruling of the Regional Trial Court
the container vans, and examined the shipment for tax evaluation
in the presence of MSC's broker and checker. Thereafter, the AHAC averred in its Complaint that the partial loss of the bags of
customs inspector closed the container vans and refastened them flour was due to the fault or negligence of MPSI since the loss
with safety wire seals while MSC's broker padlocked the same. happened while the shipment was still in MPSI's custody.
MPSI then placed the said container vans in a back-to-back
arrangement at the delivery area of the harbor's container yard MPSL, on the other hand, disclaimed any liability. It essentally
where they were watched over by the security guards of MPSI and maintained in its Answer7 that the bags of flour were inside
of the Philippine Ports Authority. sealed container vans when it received the same; that it handled
the subject shipment with the diligence required of it; and, mat
On October 10, 1989, MSC's representative, AD's Customs the container vans were turned over by it to MSC in the same
Services (ACS), took out five container vans for delivery to MSC. condition that they were in at the time of their discharge from the
At the compound's exit, MPSI issued to ACS the corresponding vessel. MPSI likewise countered that the failure of MSC to request
gate passes for the vans indicating its turnover of the subject for a bad order survey belied the latter's claim for loss.
shipment to MSC. However, upon receipt of the container vans at
its warehouse, MSC discovered substantial shortages in the Trial then ensued.
number of bags of flour delivered. Hence, it filed a formal claim
for loss with MPSI. On October 17, 2006, the RTC rendered a Decision8 dismissing
AHAC's Complaint. It held that while there was indeed a shortage
From October 12 to 14, 1989 and pursuant to the gate passes of 1,650 sacks of soft wheat flour, AHAC's evidence failed to
issued by MPSI, ACS took out the remaining five container vans clearly show that the loss happened while the subject shipment
from the container yard and delivered them to MSC. Upon receipt, was still under MPSI's responsibility. Hence, the dispositive
MSC once more discovered substantial shortages. Thus, MSC portion of the RTC Decision:LawlibraryofCRAlaw
filed another claim with MPSI.

Per MSC, the total number of the missing bags of flour was 1,650 WHEREFORE, premises considered, the complaint is hereby
with a value of £257,083.00. DISMISSED.

MPSI denied both claims of MSC. As a result, MSC sought SO ORDERED.9

insurance indemnity for the lost cargoes from AHAC. AHAC paid
MSC the value of the missing bags of flour after finding the Ruling of the Court of Appeals
tetter's claim in order. In turn, MSC issued a subrogation receipt
in favor of AHAC. Aggrieved, AHAC appealed to the CA.

Thereafter, AHAC filed a Complaint6 for damages against MPSI In its Decision10 dated December 29, 2011, the CA stressed that
before the RTC. in a claim for loss filed by a consignee, the burden of proof to

296
CASES ON EVIDENCE

show due compliance with the obligation to deliver the goods to dated 17 October 2006 is REVERSED and SET ASIDE. Appellee
the appropriate party devolves upon the arrastre operator. In Marina Port Services, Inc. is ORDERED to pay appellant,
consonance with this, a presumption of fault or negligence for the American Home Assurance Corporation, the sum of Two Hundred
loss of the goods arises against the arrastre operator pursuant to Fifty Seven Thousand and Eighty Three Pesos (PhP257,083.00)
Articles 126511 and 198112 of the Civil Code. In this case, the with interest thereon at Six percent (6%) [per annum] from the
CA found that MPSI failed to discharge such burden and to rebut filing of this complaint on 24 September 1990 until the decision
the aforementioned presumption. Thus, it was held liable to becomes final and executory, and thereafter, at the rate of twelve
AHAC for the value of the missing bags of flour, (12) percent [per annum] until fully paid, and additionally, to pay
viz.:LawlibraryofCRAlaw the x x x sum of Fifty Thousand Pesos (PhP50,000.00) as
attorney's fees.
We conclude that x x x MPSI was negligent in the handling and
safekeeping of the subject shipment. It did not create and SO ORDERED.14
implement a more defined, concrete and effective measure to
detect, curb and prevent the loss or pilferage of cargoes in its MPSI moved for reconsideration but the CA denied the same in its
custody. This is manifested by the fact that [MPSI] never took any Resolution15 dated May 8, 2012.
action to address such complaint even after it received the formal
claim of loss in the first five (5) vans. As a consequence, more Hence, the present recourse.
bags of flour were eventually lost or pilfered in the remaining
container vans that were still in [MPSI's] custody at that time. Issue
Case law tells us that negligence is that conduct which creates
undue risk of harm to another, the failure to observe that degree The core issue to be resolved in this case is whether MPSI is liable
of care, precaution and vigilance which the circumstance[s] justly for the loss of the bags of flour.
demand, whereby that other person suffers injury. Clearly, [MPSI]
breached its arrastre obligations to the consignee for it failed to Our Ruling
deliver said bags in good and complete condition.
There is merit in the Petition.
In view of MPSI's failure to exercise that degree of diligence,
precaution and care the law [requires] of arrastre operators in the Albeit involving factual questions, the
performance of their duties to the consignee, [MPSI] is legally Court shall proceed to resolve this case
bound to reimburse [AHAC] for the value of the missing bags of since it falls under several exceptions to
flour that it paid to MSC pursuant to the insurance policy.13 the rule that only questions of law are
proper in a petition for review on
In view of the same, the said court disposed of the appeal in this certiorari.
wise:LawlibraryofCRAlaw
At the outset, it is evident that the resolution of the instant case
WHEREFORE, premises considered, the appeal is GRANTED. The requires the scrutiny of factual issues which are, however,
Decision of the Regional Trial Court of Pasig City, Branch 271 outside the scope of the present petition filed pursuant to Rule 45

297
CASES ON EVIDENCE

of the Rules of Court. However, the Court held in Asian owner of the shipped goods.18 Thus, an arrastre operator should
Terminals, Inc. v. Philam Insurance Co., Inc.16 adhere to the same degree of diligence as that legally expected of
that:LawlibraryofCRAlaw a warehouseman or a common carrier19 as set forth in Section
3[b] of the Warehouse Receipts [Act]20 and Article 1733 of the
But while it is not our duty to review, examine and evaluate or Civil Code.21 As custodian of the shipment discharged from the
weigh all over again the probative value of the evidence presented, vessel, the arrastre operator must take good care of the same and
the Court may nonetheless resolve questions of fact when the turn it over to the party entitled to its possession.22redarclaw
case falls under any of the following
exceptions:LawlibraryofCRAlaw In case of claim for loss filed by a consignee or the insurer as
(1) when the findings are grounded entirely on speculation, subrogee,23 it is the arrastre operator that carries the burden of
surmises, or conjectures; (2) when the inference made is proving compliance with the obligation to deliver the goods to the
manifestly mistaken, absurd, or impossible; (3) when there is appropriate party.24 It must show that the losses were not due to
grave abuse of discretion; (4) when the judgment is based on a its negligence or that of its employees.25 It must establish that it
misapprehension of facts; (5) when the findings of fact are observed the required diligence in handling the shipment.26
conflicting; (6) when in making its findings the Court of Appeals Otherwise, it shall be presumed that the loss was due to its
went beyond the issues of the case, or its findings are contrary to fault.27 In the same manner, an arrastre operator shall be liable
the admissions of both the appellant and the appellee; (7) when for damages if the seal and lock of the goods deposited and
the findings are contrary to those of the trial court; (8) when the delivered to it as closed and sealed, be broken through its fault.28
findings are conclusions without citation of specific evidence on Such fault on the part of the arrastre operator is likewise
which they are based; (9) when the facts set forth in the petition presumed unless there is proof to the contrary.29redarclaw
as well as in the petitioner's main and reply briefs are not
disputed by the respondent; and (10) when the findings of fact are MPSI was able to prove delivery of the
premised on the supposed absence of evidence and contradicted shipment to MSC in good and complete
by the evidence on record.17 condition and with locks and seals intact.

The Court finds that the instant case falls under the It is significant to note that MPSI, in order to prove that it
aforementioned second, fourth, fifth, and seventh exceptions. properly delivered the subject shipment consigned to MSC,
Hence, it shall proceed to delve into factual matters essential to presented 10 gate passes marked as Exhibits 4 to 13.30 Each of
the proper determination of the merits of this case. these gate passes bore the duly identified signature31 of MSC's
representative which serves, among others, as an
Several well-entrenched legal principles acknowledgement that:LawlibraryofCRAlaw
govern the relationship of an arrastre
operator and a consignee. Issuance of [the] Gate Pass constitutes delivery to and receipt by
consignee of the goods as described above in good order and
The relationship between an arrastre operator and a consignee is condition, unless an accompanying B.O. certificate duly issued
similar to that between a warehouseman and a depositor, or to and noted on the face of [the] Gate Pass appears.32
that between a common carrier and the consignee and/or the

298
CASES ON EVIDENCE

As held in International Container Terminal Services, Inc. v. A

Prudential Guarantee & Assurance Co., Inc.,33 the signature of [Y]es, your honor.35
the consignee's representative on the gate pass is evidence of xxxx
receipt of the shipment in good order and condition.34redarclaw RE-CROSS EXAMINATION
Atty. Laino
Also, that MPSI delivered the subject shipment to MSC's q
representative in good and complete condition and with lock and [B]ut did you not say that in the gate pass it is stated there as to
seals intact is established by the testimonies of MPSFs employees the external appearance of the container van?
who were directly involved in the processing of the subject a
shipment. Mr. Ponciano De Leon testified that as MPSI's delivery [I]here was no indication of any inspection of the container van x
checker, he personally examined the subject container vans and xx
issued the corresponding gate passes that were, in turn, meaning the container vans were all in good condition, sir.
countersigned by the consignee's representative. MPSI's other q
witness, Chief Claims Officer Sergio Icasiano (Icasiano), testified [Y]ou said a [while] ago that you did not receive any complaint for
that the broker, as the consignee's representative, neither broken seals, is it not?
registered any complaints nor requested for an inspection, to a
wit:LawlibraryofCRAlaw [Y]es, sir.
q
[B]ut the complaint that you received indicates that there were
RE-DIRECT EXAMINATION: losses,
Atty. Laurente a
xxxx [W]e did not receive any complaint from the broker, sir.
Q q
[A]fter receipt by the broker of the container van containing the [I]f the broker will complain they have to file a request for
cargo, do you require the broker to issue you a report or inspection of the cargo so that they will know if there [are]
certification as to the appearance of the container van? shortages x x x.
A a
[W]e only rely on the gate pass. [Y]es, sir.
Q [C]ourt
[A]nd you don't place there "the padlock is still intact or the q
wirings still intact"? [A]nd if the broker would notice or detect [something] peculiar,
A the way the door of the container van appears whether close[d] or
[I]t is stated in the gate pass, your Honor. not, they have to request for an inspection[?]
xxxx a
Q [Y]es, your honor.
[A]nd the findings [are counter-signed] by the representative of q
the broker also on the same date?

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CASES ON EVIDENCE

[O]r in the absence of the padlock or wirings, the broker will accepted the container vans on its behalf without any
request for an inspection[?] qualification. As aptly observed by the RTC:LawlibraryofCRAlaw
a
[Y]es,your honor[;] they can require for the examination of the During [the] period of tum-over of goods from the arrastre to
cargo. [ACS], there had been no protest on anything on the part of
q consignee's representative x x x. Otherwise, the complaint would
[B]ut there was no request at all by the broker? have been shown [on] the gate passes. In fact, each gate pass
a showed the date of delivery, the location of delivery, the truck
[T]here was none, your Honor.36 number of the truck used in the delivery, the actual quantity of
goods delivered, the numbers of the safety wires and padlocks of
Verily, the testimonies of the aforementioned employees of MPSI the vans and the signatures of the receiver. More importantly, the
confirm that the container vans, together with their padlocks and gate passes bared the fact that the shipments were turned-over
wirings, were in order at the time the gate passes were issued up by [MPSI] to [ACS] on the same dates of customs inspections and
to the time the said container vans were turned over to ACS. turnovers.38
There being no exception as to bad order, the subject shipment,
AHAC justifies the failure of ACS to immediately protest the therefore, appears to have been accepted by MSC, through ACS,
alleged loss or pilferage upon initial pick-up of the first batch of in good order.39 "It logically follows [then] that the case at bar
container vans. According to it, ACS could not have discovered presents no occasion for the necessity of discussing the diligence
the loss at that moment since the stripping of container vans in required of an [arrastre operator] or of the theory of [its] prima
the pier area is not allowed. The Court cannot, however, accept facie liability x x x, for from all indications, the shipment did not
such excuse. For one, AHAC's claim that stripping of the suffer loss or damage while it was under the care x x x of the
container vans is not allowed in the pier area is a mere allegation arrastre operator x x x."40redarclaw
without proof. It is settled that "[m]ere allegations do not suffice;
they must be substantiated by clear and convincing proof."37 For Even in the light of Article 1981, no
another, even assuming that stripping of the container vans is presumption of fault on the part of MPSI
indeed not allowed at the pier area, it is hard to believe that MSC arises since it was not sufficiently shown
or its representative ACS has no precautionary measures to that the container vans were re-opened
protect itself from any eventuality of loss or pilferage. To recall, or that their locks and seals were broken
ACS's representative signed the gate passes without any for the second time.
qualifications. This is despite the fact that such signature serves
as an acknowledgment of ACS's receipt of the goods in good order Indeed, Article 1981 of the Civil Code also mandates a
and condition. If MSC was keen enough in protecting its interest, presumption of fault on the part of the arrastre operator as
it (through ACS) should have at least qualified the receipt of the follows:LawlibraryofCRAlaw
goods as subject to inspection, and thereafter arrange for such an
inspection in an area where the same is allowed to be done. Article 1981. When the thing deposited is delivered closed and
However, no such action or other similar measure was shown to sealed, the depositary must return it in the same condition, and
have been undertaken by MSC. What is clear is that ACS

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CASES ON EVIDENCE

he shall be liable for damages should the seal or lock be broken However, the person who prepared the said report was not
through his fault. presented in court to testify on the same. Thus, the said survey
report has no probative value for being hearsay. "It is a basic rule
Fault on the part of the depositary is presumed, unless there is that evidence, whether oral or documentary, is hearsay, if its
proof to the contrary. probative value is not based on the personal knowledge of the
witness but on the knowledge of another person who is not on the
As regards the value of the thing deposited, the statement of the witness stand."42 Moreover, "an unverified and unidentified
depositor shall be accepted, when the forcible opening is private document cannot be accorded probative value. It is
imputable to the depositary, should there be no proof to the precluded because the party against whom it is presented is
contrary. However, the courts may pass upon the credibility of the deprived of the right and opportunity to cross-examine the person
depositor with respect to the value claimed by him. to whom the statements or writings are attributed. Its executor or
author should be presented as a witness to provide the other
When the seal or lock is broken, with or without the depositary's party to the litigation the opportunity to question its contents.
fault, he shall keep the secret of the deposit. Being mere hearsay evidence, failure to present the author of the
letter renders its contents suspect and of no probative
However, no such presumption arises in this case considering value."43redarclaw
that it was not sufficiently shown that the container vans were re-
opened or that their locks and seals were broken for the second There being no other competent evidence that the container vans
time. As may be recalled, the container vans were opened by a were reopened or that their locks and seals were broken for the
customs official for examination of the subject shipment and were second time, MPSI cannot be held liable for damages due to the
thereafter resealed with safety wires. While this fact is not alleged loss of the bags of flour pursuant to Article 1981 of the
disputed by both parties, AHAC alleges that the container vans Civil Code.
were re-opened and this gave way to the alleged pilferage. The
Court notes, however, that AHAC based such allegation solely on At any rate, the goods were shipped
the survey report of the Manila Adjuster & Surveyors Company under "Shipper's Load and Count"
(MASCO). As observed by the RTC:LawlibraryofCRAlaw arrangement. Thus, protection against
pilferage of the subject shipment was
AHAC x x x claim[s] that there were two instances when the seals the consignees lookout.
were broken. [First], when the customs officer examined the
shipment and had it resealed with safety wires. [Second], when At any rate, MPSI cannot just the same be held liable for the
the surveyor and consignee's broker visually inspected the missing bags of flour since the consigned goods were shipped
shipment and allegedly found the safety wires of the customs under "Shipper's Load and Count" arrangement. "This means that
officer to have been detached and missing which they then the shipper was solely responsible for the loading of the
replaced. This second instance is only upon their say so as there container, while the carrier was oblivious to the contents of the
is no x x x documentary or testimonial proof on the matter [other] shipment. Protection against pilferage of the shipment was the
than the [MASCO] survey report.41 consignee's lookout. The arrastre operator was, like any ordinary
depositary, duty-bound to take good care of the goods received

301
CASES ON EVIDENCE

from the vessel and to turn the same over to the party entitled to
their possession, subject to such qualifications as may have 41. PEOPLE VS PADIT
validly been imposed in the contract between the parties. The
arrastre operator was not required to verify the contents of the Same; Evidence; Witnesses; Child Witness; Settled is the rule that
container received and to compare them with those declared by testimonies of child victims are normally given full weight and
the shipper because, as earlier stated, the cargo was at the credit, since when a girl, particularly if she is a minor, says that
shipper's load and count. The arrastre operator was expected to she has been raped, she says in effect all that is necessary to
deliver to the consignee only the container received from the show that rape has, in fact, been committed.—Settled is the rule
carrier."44redarclaw that testimonies of child victims are normally given full weight
and credit, since when a girl, particularly if she is a minor, says
All told, the Court holds that MPSI is not liable for the loss of the that she has been raped, she says in effect all that is necessary to
bags of flour. show that rape has, in fact, been committed. When the offended
party is of tender age and immature, courts are inclined to give
WHEREFORE, the Petition is GRANTED. The Decision dated credit to her account of what transpired, considering not only her
December 29, 2011 and Resolution dated May 8, 2012 of the relative vulnerability but also the shame to which she would be
Court of Appeals in CA-GR. CV No. 88321 are REVERSED AND exposed if the matter to which she testified is not true. Youth and
SET ASIDE. The Decision dated October 17, 2006 of the Regional immaturity are generally badges of truth and sincerity.
Trial Court, Branch 271, Pasig City in Civil Case No. 90-54517 is Considering that AAA was only four (4) years old when she was
REINSTATED and the Complaint in the said case is DISMISSED. raped and was only five (5) years old when she took the witness
stand, she could not have invented a horrible story. For her to
SO ORDERED. fabricate the facts of rape and to charge the accused falsely of a
crime is certainly beyond her mental capacity.

Remedial Law; Evidence; Hearsay Evidence Rule; The reason for

the exclusion of hearsay evidence is that the party against whom
the hearsay testimony is presented is deprived of the right or
opportunity to cross-examine the person to whom the statements
are attributed.—The term “hearsay” as used in the law on
evidence, signifies evidence which is not founded upon the
personal knowledge of the witness from whom it is elicited and
which consequently does not depend wholly for its credibility and
weight upon the confidence which the court may have in him; its
value, if any, is measured by the credit to be given to some third
person not sworn as a witness to that fact, and consequently, not
subject to cross-examination. If one therefore testifies to facts
which he learned from a third person not sworn as a witness to
those facts, his testimony is inadmissible as hearsay evidence.

302
CASES ON EVIDENCE

The reason for the exclusion of hearsay evidence is that the party Accused-appellant then went back inside the house and, after a
against whom the hearsay testimony is presented is deprived of few minutes, brought AAA outside.
the right or opportunity to cross-examine the person to whom the
statements are attributed. Moreover, the court is without Back at their house, her mother asked AAA why she did not
opportunity to test the credibility of hearsay statements by respond to her calls. AAA then told her mother about what
observing the demeanor of the person who made them. accused-appellant did to her. Upon hearing AAA's account of her
sexual molestation committed by accused-appellant, AAA's
PERALTA, J.: mother immediately went to accused-appellant's house to
confront him. Accused-appellant, however, denied having
Before the Court is an ordinary appeal filed by accused-appellant molested AAA. Unable to elicit an admission from accused-
Victor P. Pad it (Padit) assailing the Decision1 of the Court of appellant, AAA's mother went back to their house and proceeded
Appeals (CA), dated July 19, 20 I l, in CA-GR. CEB-CR-H.C. No. to give AAA a bath. While she was washing AAA's vagina, the
00888, which affirmed with modification the Decision2 of the latter cried and asked her not to touch it because it was very
Regional Trial Comi (RTC) of Guiuan, Eastern Sarnar, Branch 3, painful.
in Criminal Case No. 2266, finding Padit guilty of the crime of
rape. The antecedents are as follows: The following morning, AAA's parents filed a complaint with their
Barangay Chairman. They also caused AAA to undergo
In the morning of May 5, 2006, the victim, AAA,3 a four-year-old physical/medical examination on May 8, 2006 wherein it was
girl, was playing inside their house while her mother was looking found that the child's vulva
after her younger brother. After a while, AAA went out of the
house to buy bread. On her way to the store, she was called by showed a slight hymenal abrasion.
accused-appellant, who is their neighbor and the uncle of her
mother, and whom AAA calls as Lolo Victor. Accused-appellant Subsequently, AAA's mother filed a criminal Complaint4 with the
brought AAA inside his house and allowed her to play. He then Prosecutor's Office of Guiuan, Eastern Samar. In an Information5
brought her upstairs, caused her to lie down and removed her dated August 2, 2006, the Office of the Public Prosecutor of
short pants. Accused-appellant also removed his short pants and Eastern Samar charged accused-appellant with the crime of rape,
proceeded to rub his penis against AAA's vagina. AAA felt pain the pertinent portions of which read as follows:
but was rendered helpless and prevented from making any sound
as accused-appellant covered her mouth with his hand. xxxx
Thereafter, accused-appellant threatened to hurt AAA with his
knife if she tells anybody about the incident. The undersigned, Public Prosecutor of the Province of Eastern
Samar, accuses Victor Padit y Padual of the crime of Rape,
Meanwhile, AAA's mother was about to serve lunch when she defined and penalized under Art. 335, Revised Penal Code,
noticed that AAA was not yet around. She then went out of their committed as follows:
house and around their neighborhood calling for AAA. While she
was in accused-appellant's yard, the latter came out of his house That on or about the 5th day of May 2006, at about 12:00 noon,
and told her that AAA is inside watching him weave baskets. Brgy. Naparaan, Salcedo, Eastern Samar, Philippines, within the

303
CASES ON EVIDENCE

jurisdiction of this Honorable Court, the aforenamed accused with seventy-five thousand pesos (P75,000.00) as moral damages; with
lewd design and by means of force and intimidation, did then and the accessory penalties provided for by law. With costs de oficio.
there wilfully, unlawfully and feloniously place and rub his penis
into the vagina of [AAA], 4-year-old girl minor, without her March 3, 2008, Guiuan, Eastern Samar, Philippines.
consent and against her will.
SO ORDERED.8
Contrary to law.
The RTC gave full faith and credence to the testimony of the
xxx victim as corroborated, in its material points, by the medical
findings of the physician who examined the victim.
In his defense, accused-appellant denied the allegations of the
prosecution contending that he could not have raped AAA Accused-appellant appealed the RTC Decision with the CA in
because his wife was with him at the time that the alleged Cebu City.9
molestation was committed. Accused-appellant's wife
corroborated his testimony on the witness stand. On July 19, 2011, the CA promulgated its assailed Decision
affirming with modification the judgment of the RTC. The
During pre-trial, the prosecution and the defense entered into a dispositive portion of the CA Decision reads, thus:
stipulation of facts wherein it was admitted that the victim was
four (4) years old at the time of the alleged rape; accused- WHEREFORE, premises considered, the appealed Decision
appellant is the same person who has been charged and dated3 March 2008 of the Regional Trial Court, Branch 3,
arraigned; and, accused-appellant and the victim and her parents Guiuan, EasternSamar in Criminal Case No. 2266, finding
are neighbors.6 accused-appellant guilty beyond reasonable doubt of
consummated rape is hereby AFFIRMED WITH MODIFICATION.
Thereafter, trial ensued In addition to the award [of] P75,000.00 as civil indemnity and
P75,000.00 as moral damages, accused-appellant is hereby
On March 3, 2008, the RTC rendered its Decision7 finding ordered to pay the amount of P30,000.00 as exemplary damages.
accusedappellant guilty as charged, the dispositive portion of
which reads as follows: SO ORDERED.10

WHEREFORE, IN THE LIGHT OF THE FOREGOING, the court The CA held that the prosecution was able to establish the
finds accused VICTOR P. PADIT, guilty beyond reasonable doubt, elements ofrape through the victim's testimony and that it found
as principal, of the consummated offense of RAPE, as defined and no cogent reason to disturb the findings of the RTC with respect
penalized under Art. 335 of the Revised Penal Code, as amended, to the credibility of the victim.
and hereby convicts him to suffer the penalty of imprisonment of
reclusion perpetua and to pay the victim, [AAA], the sum of On August 8, 2011, accused-appellant, through counsel, filed a
seventy-five thousand pesos (P75,000.00) as civil indemnity and Notice of Appeal11 manifesting his intention to appeal the CA
Decision to this Court.

304
CASES ON EVIDENCE

repealing Article 335 of the RPC. The new provisions on rape are
In its Resolution12 dated December 1, 2011, the CA gave due now found in Articles 266-A to 266-D of the said Code. In the
course to accused-appellant's Notice of Appeal and directed its instant case, the crime was committed on May 5, 2006. Hence,
Judicial Records Division to elevate the records of the case to this the applicable law is the RPC as amended by RA 8353 and that
Court. the prosecution as well as the RTC and the CA committed an
error in specifying the provision of law which was violated.
Hence, this appeal was instituted. Nonetheless, it is settled that the failure to designate the offense
by statute or to mention the specific provision penalizing the act,
In a Resolution13 dated October 11, 2012, this Court, among or an erroneous specification of the law violated, does not vitiate
others, notified the parties that they may file their respective the information if the facts alleged therein clearly recite the facts
supplemental briefs, if they so desire. constituting the crime charged.16 The character of the crime is
not determined by the caption or preamble of the information nor
In its Manifestation14 dated December 13, 2012, the Office of the by the specification of the provision of law alleged to have been
Solicitor General (OSG) informed this Court that it will no longer violated, but by the recital of the ultimate facts and
file a supplemental brief because it had already extensively circumstances in the complaint or information.17 In the instant
discussed and refuted all the arguments raised by the appellant case, the body of the Information contains an averment of the
in its brief filed before the CA, subject, however, to the reservation acts alleged to have been committed by petitioner and describes
that it will file a supplemental brief if appellant will raise new acts punishable under Article 266-A, in relation to Article 266-B,
matters and issues. of the RPC, as amended.

In the same manner, accused-appellant filed a Manifestation15 The pertinent provisions of Articles 266-A and 266-B of the
dated January 2, 2013, indicating that he no longer intends to file Revised Penal Code, as amended, provide:
a supplemental brief and is adopting in toto and reiterates the
contents and substance of his brief which was filed with the CA. Art. 266-A. Rape; When And How Committed. - Rape is
Committed - 1) By a man who shall have carnal knowledge of a
Thus, the basic issue to be resolved by this Court, in the instant woman under any of the following circumstances:
appeal, is whether the prosecution was able to prove beyond
reasonable doubt that the accused-appellant is guilty of rape. a) Through force, threat, or intimidation;

The Court rules in the affirmative. b) When the offended party is deprived of reason or otherwise
unconscious;
At the outset, the Court notes that the Information, dated August
2, 2006, specifically charged petitioner with rape under Article c) By means of fraudulent machination or grave abuse of
335 of the Revised Penal Code (RPC). However, upon the authority; and
enactment of Republic Act No. 8353 (RA 8353), otherwise known
as the Anti-Rape Law of 1997, which became effective on October
22, 1997, rape was reclassified as a crime against persons, thus,

305
CASES ON EVIDENCE

d) When the offended party is under twelve (12) years of age or is what transpired, considering not only her relative vulnerability
demented, even though none of the circumstances mentioned but also the shame to which she would be exposed if the matter
above be present. to which she testified is not true.19 Youth and immaturity are
generally badges of truth and sincerity.20 Considering that AAA
xxxx was only four (4) years old when she was raped and was only five
(5) years old when she took the witness stand, she could not have
ART. 266-B. Penalties. - Rape under paragraph 1 of the next invented a horrible story. For her to fabricate the facts of rape
preceding article shall be punished by reclusion perpetua. and to charge the accused falsely of a crime is certainly beyond
her mental capacity.
xxxx
The Court does not agree with accused-appellant's contention
The death penalty shall also be imposed if the crime of rape is that the prosecution failed to prove carnal knowledge on the
committed with any of the following aggravating/qualifying ground that AAA explicitly stated in her testimony that accused-
circumstances: appellant merely rubbed his penis against her vagina. AAA, who
was then four years old at the time of the molestation, was not
xxxx expected to be knowledgeable about sexual intercourse and every
stage thereof. The fact that she claimed that accused-appellant
5. When the victim is a child below seven (7) years old. rubbed his penis against her vagina did not mean that there was
no penetration. Carnal knowledge is defined as the act of a man
xxx having sexual bodily connections with a woman.21 This explains
why the slightest penetration of the female genitalia
Both the RTC and the CA found that the prosecution was able to consummates the rape.22 As such, a mere touching of the
prove beyond reasonable doubt all the elements of the crime external genitalia by the penis capable of consummating the
charged and this Court finds no cogent reason to depart from sexual act already constitutes consummated rape.23 In the
these findings, as will be discussed below. present case, AAA testified that she felt pain when accused-
appellant "rubbed his penis [against her] vagina."24 This Court
Accused-appellant's arguments in the instant appeal basically has held that rape is committed on the victim's testimony that
harp on the alleged loopholes, inconsistencies and improbabilities she felt pain.25 In fact, AAA still felt severe pain in her vagina
in the testimonies of the victim and her mother which supposedly when she was being given a bath by her mother after her
cast doubt on their credibility as witnesses. molestation.26 This kind of pain could not have been the result of
mere superficial rubbing of accusedappellant's sex organ with
Settled is the rule that testimonies of child-victims are normally that of the victim. Such pain could be nothing but the result of
given full weight and credit, since when a girl, particularly if she penile penetration sufficient to constitute rape.27
is a minor, says that she has been raped, she says in effect all
that is necessary to show that rape has, in fact, been Besides, the testimony of AAA is corroborated by the findings of
committed.18 When the offended party is of tender age and the physician who examined her indicating the presence of slight
immature, courts are inclined to give credit to her account of hymenal abrasion upon examination of her vulva.28 Thus, the

306
CASES ON EVIDENCE

RTC and the CA are correct in concluding that both the victim's The reason for the exclusion of hearsay evidence is that the party
positive testimony and the findings of the medico-legal officer against whom the hearsay testimony is presented is deprived of
complemented each other in the conclusion that there was the right or opportunity to cross-examine the person to whom the
penetration, however slight. statements are attributed. Moreover, the court is without
opportunity to test the credibility of hearsay statements by
The Court is neither persuaded by accused-appellant's insistence observing the demeanor of the person who made them.
that while there is no question that children, like AAA, at such an
age are incapable of lying, their credibility is not only limited to In the instant case, the declarant, AAA herself, was sworn as a
their capacity to tell the truth but also their capacity to grasp witness to the fact testified to by her mother.1âwphi1 Accused-
things that have happened, to intelligently recall them and to appellant's counsel even crossexamined AAA. Moreover, the trial
completely and accurately relate them. The fact that the offended court had the opportunity to observe AAA's manner of testifying.
party is a minor does not mean that she is incapable of perceiving Hence, the testimony of AAA's mother on the incident related to
and of making her perception known.30 In fact, AAA had her by her daughter cannot be disregarded as hearsay evidence.
consistently, positively, and categorically identified accused-
appellant as her abuser. Her testimony was direct, candid, and Even assuming that the aforementioned testimony of AAA's
replete with details of the rape. mother is hearsay, its non-admission would not save the day for
accused-appellant.
Accused-appellant also contends that the testimony of AAA's
mother that it was accused-appellant who molested her child is Such testimony is not indispensable, as it merely serves to
nothing but hearsay, considering that she only came to know of corroborate AAA's testimony that accused-appellant forced
the alleged molestation when she found AAA inside accused- himself upon her. As discussed earlier, AAA's testimony, which
appellant's house and after the child told her about it when they was found to be credible by the trial court, and was corroborated
got back home. by the findings of the medico-legal, is sufficient basis for
conviction.
The Court does not agree.
At any rate, the testimony of AAA's mother is proof of the victim's
The term "hearsay" as used in the law on evidence, signifies conduct immediately after the rape. It shows that AAA
evidence which is not founded upon the personal knowledge of immediately revealed to her mother the rape incident and the
the witness from whom it is elicited and which consequently does identity of her defiler. Such conduct is one of the earmarks of the
not depend wholly for its credibility and weight upon the truth of the charge of rape.
confidence which the court may have in him; its value, if any, is
measured by the credit to be given to some third person not The Court finds neither logic nor relevance in accused-appellant's
sworn as a witness to that fact, and consequently, not subject to argument that if he indeed committed the offense charged, why is
crossexamination.31 If one therefore testifies to facts which he it that of all times that AAA went to his yard and play it was only
learned from a third person not sworn as a witness to those facts, during the time alleged by the prosecution that accused-appellant
his testimony is inadmissible as hearsay evidence. decided to rape her. This matter is inconsequential as it has no
bearing with respect to the elements of rape. As aptly held by the

307
CASES ON EVIDENCE

CA, the decisive factor in the prosecution for rape is whether the until all the monetary awards for damages are fully paid, in
commission of the crime has been sufficiently proven. For a accordance with prevailing jurisprudence.38
discrepancy or inconsistency in the testimony of a witness to
serve as a basis for acquittal, it must refer to the significant facts WHEREFORE, the instant appeal is DISMISSED and the Decision
indispensable to the guilt or innocence of the accused for the elated July 19, 2011 of the Court of Appeals in CA-G.R. CEB CR-
crime charged.32 As the inconsistencies alleged by accused- H.C. No. 00888 is hereby AFFIRMED with the following
appellant had nothing to do with the elements of the crime of MODIFICATIONS: (I) accused-appellant VICTOR P. PADIT is
rape, they cannot be used as grounds for his acquittal. sentenced to suffer the penalty or reclusion perpetua without
eligibility for parole; and (2) that said accusedappellant is
When the offended party is under twelve (12) years of age, the additionally ordered to pay the victim interest of six percent (6c%)
crime committed is termed statutory rape as it departs from the per annum on all damages awarded from the date of finality of
usual modes of committing rape.33 What the law punishes is this Decision until fully paid.
carnal knowledge of a woman below twelve years of age.34 In the
instant case, there is no dispute that AAA was four years of age SO ORDERED.
when the crime was committed.1âwphi1 Resultantly, accused-
appellant was charged and proven guilty of statutory rape.

As to the penalty, Article 266-B of the RPC, as amended, provides

that the death penalty shall be imposed if the victim is a child
below seven years old. However, following Republic Act No.
9346,35 the RTC, as affirmed by the CA, correctly imposed upon
accused-appellant the penalty of reclusion perpetua in lieu of
death, but it should be specified that it is without eligibility for
parole, as the RTC did not state it in the dispositive portion of its
Decision. Likewise, the RTC correctly awarded in AAA's favor the
amounts of P75,000.00 as civil indemnity and P75,000.00 as
moral damages. The CA, in turn, correctly modified the RTC
ruling by awarding an additional amount of P30,000.00 as
exemplary damages. An award of civil indemnity ex delicto is
mandatory upon a finding of the fact of rape, and moral damages
may be automatically awarded in rape cases without need of proof
of mental and physical suffering.36 Exemplary damages are also
called for, by way of public example, and to protect the young
from sexual abuse.37

The Cami additionally orders accused-appellant to pay interest of

six percent (6%) per annum from the finality of this judgment

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CASES ON EVIDENCE

42. ESPINELI VS PEOPLE

Remedial Law; Evidence; Circumstantial Evidence; Under Section

4, Rule 133 of the Rules of Court, circumstantial evidence would
be sufficient to convict the offender “if i) there is more than one
circumstance; ii) the facts from which the inference is derived are
proven; and iii) the combination of all circumstances is such as to
produce a conviction beyond reasonable doubt.”—Truly, “direct
evidence of the commission of a crime is not the only basis from
which a court may draw its finding of guilt.” The rules of evidence
allow a trial court to rely on circumstantial evidence to support its
conclusion of guilt. Circumstantial evidence is that evidence
“which indirectly proves a fact in issue through an inference
which the fact-finder draws from the evidence established.” Under
Section 4, Rule 133 of the Rules of Court, circumstantial evidence
would be sufficient to convict the offender “if i) there is more than
one circumstance; ii) the facts from which the inference is derived
are proven; and iii) the combination of all circumstances is such
as to produce a conviction beyond reasonable doubt.” All the
circumstances must be consistent with one another, consistent
with the hypothesis that the accused is guilty and at the same
time inconsistent with the hypothesis that he is innocent. Thus,
conviction based on circumstantial evidence can be upheld
provided that the circumstances proved constitute an unbroken
chain which leads to one fair and reasonable conclusion that
points to the accused, to the exclusion of all others as the guilty
person.

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CASES ON EVIDENCE

Same; Same; Hearsay Evidence Rule; Evidence is hearsay when admitted that he is incompetent to testify on the truthfulness of
its probative force depends in whole or in part on the competency Reyes’ statement. Verily then, what the prosecution sought to be
and credibility of some persons other than the witness by whom it admitted was the fact that Reyes made such narration of facts in
is sought to produce.—Evidence is hearsay when its probative his sworn statement and not necessarily to prove the truth
force depends in whole or in part on the competency and thereof. Thus, the testimony of NBI Agent Segunial is in the
credibility of some persons other than the witness by whom it is nature of an independently relevant statement where what is
sought to produce. However, while the testimony of a witness relevant is the fact that Reyes made such statement and the truth
regarding a state ment made by another person given for the and falsity thereof is immaterial. In such a case, the statement of
purpose of establishing the truth of the fact asserted in the the witness is admissible as evidence and the hearsay rule does
statement is clearly hearsay evidence, it is otherwise if the not apply.
purpose of placing the statement on the record is merely to
establish the fact that the statement, or the tenor of such Same; Same; Notarized Documents; The written statement of
statement, was made. Regardless of the truth or falsity of a Reyes is a notarized document having been duly subscribed and
statement, when what is relevant is the fact that such statement sworn to before Atty. Cesar A. Bacani, a supervising agent of the
has been made, the hearsay rule does not apply and the National Bureau of Investigation (NBI). As such, it may be
statement may be shown. As a matter of fact, evidence as to the presented in evidence without further proof, the certificate of
making of the statement is not secondary but primary, for the acknowledgment being a prima facie evidence of the due
statement itself may constitute a fact in issue or is execution of this instrument or document involved pursuant to
circumstantially relevant as to the existence of such a fact. This is Section 30 of Rule 132 of the Rules of Court.—The written
known as the doctrine of independently relevant statements. statement of Reyes is a notarized document having been duly
subscribed and sworn to before Atty. Cesar A. Bacani, a
Same; Same; Independently Relevant Statements; The testimony supervising agent of the NBI. As such, it may be presented in
of National Bureau of Investigation (NBI) Agent Segunial is in the evidence without further proof, the certificate of acknowledgment
nature of an independently relevant statement where what is being a prima facie evidence of the due execution of this
relevant is the fact that Reyes made such statement and the truth instrument or document involved pursuant to Section 30 of Rule
and falsity thereof is immaterial.—The testimony of NBI Agent 132 of the Rules of Court. As held in Gutierrez v. Mendoza-Plaza,
Segunial that while he was investigating Reyes, the latter confided 607 SCRA 807 (2009), a notarized document enjoys a prima facie
to him that he (Reyes) heard petitioner telling Sotero “Ayaw ko presumption of authenticity and due execution which must be
nang abutin pa ng bukas yang si Berbon” and that he saw the rebutted by clear and convincing evidence. Here, no clear and
two (petitioner and Sotero) armed with a .45 caliber pistol and an convincing evidence was presented by petitioner to overcome such
armalite, respectively, before boarding a red car, cannot be presumption. Clearly, therefore, the CA did not err in its
regarded as hearsay evidence. This is considering that NBI Agent appreciation of Reyes’ sworn statement as testified to by NBI
Segunial’s testimony was not presented to prove the truth of such Agent Segunial.
statement but only for the purpose of establishing that on
February 10, 1997, Reyes executed a sworn statement containing DEL CASTILLO, J.:
such narration of facts. This is clear from the offer of the witness’
oral testimony. Moreover, NBI Agent Segunial himself candidly

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Jurisprudence teaches us that "for circumstantial evidence to be evident premeditation and taking advantage of superior strength,
sufficient to support a conviction, all circumstances must be did then and there, willfully, unlawfully and feloniously, attack,
consistent with each other, consistent with the hypothesis that assault and shoot one Alberto Berbon y Downie with the use of
the accused is guilty, and at the same time inconsistent with the said firearms, thereby inflicting upon the latter multiple gunshot
hypothesis that he is innocent x x x."1 Thus, conviction based on wounds on his head and different parts of his body which caused
circumstantial evidence can be upheld provided that the his instantaneous death, to the damage and prejudice of the heirs
circumstances proven constitute an unbroken chain which leads of said Alberto Berbon y Downie. CONTRARY TO LAW.10
to one fair and reasonable conclusion that points to the accused,
to the exclusion of all others, as the guilty person.2 Petitioner was arrested on July 1, 1997 and when arraigned on
July 7, 1997 with the assistance of counsel, entered a plea of not
Assailed in the present Petition for Review on Certiorari3 is the guilty.11
July 6, 2007 Decision4 of the Court of Appeals (CA) in CA-G.R.
CR-H.C. No. 02252 which modified the August 31, 1999 The facts show that in the early evening of December 15, 1996,
Decision5 of the Regional Trial Court (RTC) of Imus, Cavite, Alberto Berbon y Downie (Alberto), a 49-year old Senior Desk
Branch 90, by finding petitioner Jose Espineli a.k.a. Danilo Coordinator of the radio station DZMM, was shot in the head and
"Danny" Espineli (petitioner) guilty of the crime of homicide different parts of the body in front of his house in Imus, Cavite by
instead of murder. unidentified malefactors who immediately fled the crime scene on
board a waiting car.
Also questioned is the CA’s September 14, 2007 Resolution6
denying petitioner’s Motion for Reconsideration.7 Meanwhile, the group of Atty. Orly Dizon (Atty. Dizon) of the
National Bureau of Investigation (NBI) arrested and took into
Factual Antecedents custody one Romeo Reyes (Reyes) for the crime of Illegal
Possession of Deadly Weapon. Reyes confided to the group of Atty.
On June 24, 1997, an Information8 charging petitioner with the Dizon that he was willing to give vital information regarding the
crime of murder was filed before the RTC,9 the accusatory portion Berbon case. In due course, NBI Agent Dave Segunial(NBI Agent
of which reads as follows: Segunial) interviewed Reyes on February 10, 1997 and reduced
his statement into writing whereby Reyes claimed that on
That on or about the 15th day of December, 1996 in the December 15, 1996, he saw petitioner and Sotero Paredes
Municipality of Imus, Province of Cavite, Philippines, and within (Paredes) board a red car while armed with a .45 caliber firearm
the jurisdiction of this Honorable Court, the above-named and armalite, respectively; and that petitioner told Paredes that
accused, together with one (1) Sotero Paredes and three (3) other "ayaw ko nang abutin pa ng bukas yang si Berbon."12
unidentified persons, whose real names, identities and Subsequently, Reyes posted bail and was released on February
whereabouts are still unknown, said Sotero Paredes having been 14, 1997. Thenceforth, he jumped bail and was never again heard
earlier charged with the same offense, and is now undergoing trial of. NBI Agent Segunial testified on these facts during the trial.
before Branch 90, of the Regional Trial Court of Cavite, then
armed with firearms, conspiring, confederating and mutually The victim’s widow, Sabina Berbon (Sabina) likewise testified.
helping one another, with intent to kill, with treachery and According to her, sometime in the third week of February 1997

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CASES ON EVIDENCE

Reyes sought financial help so he could transfer his family to the PERPETUA, and is likewise ordered to pay the heirs of Alberto
province and protect them from any untoward consequence that Berbon y Downie, the civil indemnity of ₱50,000.00, and actual
may result from his giving information to the NBI regarding the and compensatory damages in the total amount of ₱135,000.00
death of Sabina’s husband. Sabina gave him the total amount of as funeral expenses (Exhibit "H"), interment fee of ₱8,360.00
₱1,500.00 and promised to help him in applying for the witness (Exhibit "C"), medical expenses in the total amount of ₱1,519.45
protection program. This was affirmed on the witness stand by (Exhibit[s] "D", "D-1" and "D-2") and for the contract fees of
Sabina’s brother, Bartolome Pakingan. After that, however, Reyes Memorial Park Care the amount of ₱15,700.00 (Exhibit "E").
never came back.
Furthermore, considering that he is a high risk prisoner, his
Another prosecution witness, Rodolfo Dayao (Rodolfo), testified transfer to the National Penitentiary at Muntinlupa City, Metro
that he sold his red Ford Escort car to three persons who came to Manila, is immediately ordered.
his residence in the afternoon of September 1, 1996. He later
identified the said car from the photographs presented to him by SO ORDERED.15
the police officers.
Petitioner seasonably appealed his conviction before this Court.
Dr. Ludivino J. Lagat (Dr. Lagat), the NBI Medico-Legal Officer Pursuant, however, to the Court’s pronouncement in People v.
who conducted a post-mortem examination on Alberto, declared Mateo,16 the case was ordered transferred to the CA for
in his Autopsy Report that the victim suffered multiple gunshot appropriate action and disposition through a Resolution17 dated
wounds in the head and body. He also stated that based on the March 22, 2006.
size of the gunshot wounds or entrance, high-powered guns were
used in the killing. Ruling of the Court of Appeals

Petitioner, on the other hand, did not adduce evidence for his In its Decision18 promulgated on July 6, 2007, the CA affirmed
defense. Instead, he filed a Demurrer to Evidence13 without leave with modification the findings of the trial court. It ratiocinated
of court. As no action whatsoever was taken thereon by the trial that since none of the prosecution witnesses saw how the killing
court, petitioner just moved that the case be deemed submitted of the victim was perpetrated, the qualifying circumstance of
for decision. abuse of superior strength cannot be appreciated. Neither can
nighttime serve as an aggravating circumstance as the time of the
Ruling of the Regional Trial Court commission of the crime was not even alleged in the Information.
In view thereof, the CA found petitioner guilty only of homicide
In its Decision14 dated August 31, 1999, the trial court adjudged instead of murder. The decretal portion of the appellate court’s
petitioner guilty of murder, thus: Decision reads:

WHEREFORE, premises considered, accused JOSE ESPINELI WHEREFORE, premises considered, the present appeal is hereby
a.k.a. DANILO "Danny" ESPINELI, is found guilty beyond DISMISSED. The appealed Decision dated August 31, 1999 of the
reasonable doubt of committing the crime of "Murder" as charged. Regional Trial Court of Imus, Cavite, Branch 90 is hereby
He is, therefore, sentenced to suffer the penalty of RECLUSION AFFIRMED with MODIFICATION in that accused-appellant is

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CASES ON EVIDENCE

hereby found GUILTY beyond reasonable doubt of the crime of

Homicide and is hereby sentenced to an indeterminate prison In sum, petitioner anchors his quest for the reversal of his
term of ten (10) years of prision mayor, as minimum, to seventeen conviction on the alleged erroneous admission in evidence of the
(17) years and four (4) months of reclusion temporal, as Sinumpaang Salaysay25 of Reyes for being hearsay and
maximum. inadmissible. He avers that the said sworn statement should not
have been given probative value because its contents were neither
In all other respects, the said decision STANDS. confirmed nor authenticated by the affiant. Thus, all
circumstances emanating from or included in the sworn
In the service of his sentence, accused-appellant shall be credited statement must be totally brushed aside as lacking any
in full with the period of his preventive imprisonment. evidentiary and probative value. Petitioner emphasizes that as
found by the courts below, there was no direct evidence linking
With costs against the accused-appellant. him to the crime; therefore, he wants this Court to review the
sufficiency of the circumstantial evidence upon which his
SO ORDERED.19 conviction was based as he believes that the same failed to
establish his guilt beyond reasonable doubt.
Dissatisfied, petitioner filed a Motion for Reconsideration20 which
the CA denied in its Resolution21 dated September 14, 2007. For its part, the Office of the Solicitor General (OSG), representing
respondent People of the Philippines, concurs with the petitioner
Hence, this Petition. and recommends his acquittal.26 It is also of the view that the
prosecution failed to discharge its burden of proving petitioner’s
Arguments of the Parties guilt beyond reasonable doubt.

Petitioner posits that the CA should not have affirmed the The Court’s Ruling
Decision of RTC as the latter erred:
The Petition is devoid of merit.
1. x x x [in admitting, considering and giving] probative value to
Exhibit "A", the "Sinumpaang Salaysay" of [Reyes] because [he] Truly, "direct evidence of the commission of a crime is not the
was not presented in court to confirm, affirm and authenticate only basis from which a court may draw its finding of guilt."27
the contents of his sworn statement. It resulted in the denial of The rules of evidence allow a trial court to rely on circumstantial
petitioner’s constitutional right to confront and cross-examine his evidence to support its conclusion of guilt. Circumstantial
accusers.22 evidence is that evidence "which indirectly proves a fact in issue
through an inference which the fact-finder draws from the
2. x x x [in convicting] the [petitioner] based on unproven, evidence established."28 Under Section 4, Rule 133 of the Rules
inadmissible circumstantial evidence.23 of Court, circumstantial evidence would be sufficient to convict
the offender "if i)there is more than one circumstance; ii) the facts
3. x x x in not acquitting the petitioner for failure of the from which the inference is derived are proven; and iii) the
prosecution to prove [his guilt] beyond reasonable doubt x x x.24 combination of all circumstances is such as to produce a

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CASES ON EVIDENCE

conviction beyond reasonable doubt."29 All the circumstances their verdict of conviction on circumstantial evidence as
must be consistent with one another, consistent with the sanctioned under Section 4, Rule 13332 of the Rules of Court.
hypothesis that the accused is guilty and at the same time The central issue now confronting this Court is whether the
inconsistent with the hypothesis that he is innocent. Thus, prosecution has amply proved by circumstantial evidence
conviction based on circumstantial evidence can be upheld petitioner’s guilt beyond reasonable doubt.
provided that the circumstances proved constitute an unbroken
chain which leads to one fair and reasonable conclusion that The circumstantial evidence relied upon by the Court of Appeals
points to the accused, to the exclusion of all others as the guilty sufficiently support petitioner’s conviction.
person.30
The Court has carefully scrutinized the evidence presented in this
In this case, the circumstances found by the CA as forming an case in the light of the standards discussed above and finds the
unbroken chain leading to one fair and reasonable conclusion foregoing circumstantial evidence sufficient to support a
that petitioner, to the exclusion of all others, is the guilty person judgment of conviction. Several reasons deserve our acceptance of
are the following: the circumstances upon which petitioner’s conviction was based,
to wit:
1. In the morning of December 15,1996, petitioner was heard
telling his co-accused Sotero Paredes (Sotero) "ayaw ko nang First, NBI Agent Segunial testified that he had investigated Reyes
abutin pa ng bukas yang si Berbon" before boarding a red car. and reduced the latter’s statement into writing declaring, among
Sotero was holding an armalite rifle while petitioner was armed others, that in the morning of December 15, 1996, he (Reyes)
with a .45 caliber pistol; overheard petitioner telling Sotero "Ayaw ko nang abutin pa ng
bukas yang si Berbon" and saw them armed with .45 caliber
2. The said red car was identified or recognized by prosecution pistol and an armalite, respectively, before boarding a red car.
witness Rodolfo to be the same car he had sold to Sotero for The CA gave weight to Reyes’ sworn statement in this wise:
₱10,000.00 in September 1996;
The probative value of Romeo Reyes’s worn statement as to the
3. The victim Alberto was fatally shot later in the day (December words spoken by appellant to his co-accused Sotero Paredes in
15, 1996) by unidentified gunmen who thereafter immediately fled the morning of December 15, 1996 cannot be disputed. x x x33
riding a red car; and
Petitioner takes vigorous exception to the said findings, insisting
4. Post-mortem examination of the victim’s body showed that he that the said sworn statement belongs to the category of hearsay
sustained multiple gunshot wounds, the nature, severity and evidence and therefore inadmissible. He asserts that its contents
characteristics of which indicate that they were inflicted using were never confirmed or authenticated by Reyes, thus, it lacks
high-powered guns, possibly anarmalite rifle and .22 caliber probative value.
pistol.31
The Court is unconvinced.
The records reveal that there was no eyewitness to the actual
killing of Alberto. Thus the courts below were forced to render

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CASES ON EVIDENCE

The hearsay evidence rule as provided under Section 36, Rule 130 narration of facts. This is clear from the offer of the witness’ oral
of the Rules of Court states: testimony.36 Moreover, NBI Agent Segunial himself candidly
admitted that he is incompetent to testify on the truthfulness of
Sec. 36. Testimony generally confined to personal knowledge; Reyes’ statement.37 Verily then, what the prosecution sought to
hearsay excluded. – A witness can testify only to those facts be admitted was the fact that Reyes made such narration of facts
which he knows of his personal knowledge; that is, which are in his sworn statement and not necessarily to prove the truth
derived from his own perception, except as otherwise provided in thereof. Thus, the testimony of NBI Agent Segunial is in the
these rules. nature of an independently relevant statement where what is
relevant is the fact that Reyes made such statement and the truth
Evidence is hearsay when its probative force depends in whole or and falsity thereof is immaterial. In such a case, the statement of
in part on the competency and credibility of some persons other the witness is admissible as evidence and the hearsay rule does
than the witness by whom it is sought to produce. However, while not apply.38 Moreover, the written statement of Reyes is a
the testimony of a witness regarding a statement made by another notarized document having been duly subscribed and sworn to
person given for the purpose of establishing the truth of the fact before Atty. Cesar A. Bacani, a supervising agent of the NBI. As
asserted in the statement is clearly hearsay evidence, it is such, it may be presented in evidence without further proof, the
otherwise if the purpose of placing the statement on the record is certificate of acknowledgment being a prima facie evidence of the
merely to establish the fact that the statement, or the tenor of due execution of this instrument or document involved pursuant
such statement, was made. Regardless of the truth or falsity of a to Section 30 of Rule 132 of the Rules of Court. As held in
statement, when what is relevant is the fact that such statement Gutierrez v. Mendoza-Plaza,39 a notarized document enjoys a
has been made, the hearsay rule does not apply and the prima facie presumption of authenticity and due execution which
statement may be shown. As a matter of fact, evidence as to the must be rebutted by clear and convincing evidence. Here, no clear
making of the statement is not secondary but primary, for the and convincing evidence was presented by petitioner to overcome
statement itself may constitute a fact in issue or is such presumption. Clearly, therefore, the CA did not err in its
circumstantially relevant as to the existence of such a fact.34 appreciation of Reyes’ sworn statement as testified to by NBI
This is known as the doctrine of independently relevant Agent Segunial.
statements.35
Second, the identification and recognition through photograph by
In the present case, the testimony of NBI Agent Segunial that Rodolfo of the 1971 Ford Escort red colored car as the same car
while he was investigating Reyes, the latter confided to him that he had sold to Sotero in September 1996 clearly and convincingly
he (Reyes) heard petitioner telling Sotero "Ayaw ko nang abutin pa prove that it was the very same red car used in the killing of
ng bukas yang si Berbon" and that he saw the two (petitioner and Alberto on December 15, 1996.
Sotero) armed with a .45 caliber pistol and an armalite,
respectively, before boardinga red car, cannot be regarded as Third, Alberto was shot and killed on December 15, 1996 and the
hearsay evidence. This is considering that NBI Agent Segunial’s gunmen immediately fled the scene riding a red car which was
testimony was not presented to prove the truth of such statement identified as the same car previously sold by Rodolfo to Sotero.
but only for the purpose of establishing that on February 10,
1997, Reyes executed a sworn statement containing such

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CASES ON EVIDENCE

Fourth, though the testimony of Dr. Lagat was limited to the post- aggressor, assuming a situation of superiority of strength
mortem examination of the cadaver of Alberto, his findings that notoriously advantageous for the aggressor, and the latter takes
the victim suffered multiple gunshot wounds and that the same advantage of it in the commission of the crime. However, as none
were caused by high-powered guns, served as corroborative of the prosecution witnesses saw how the killing was perpetrated,
evidence and contributed in a significant way in establishing the abuse of superior strength cannot be appreciated in this case.
level of proof that the law requires in convicting petitioner. Neither can nighttime serve as an aggravating circumstance, the
time of the commission of the crime was not even alleged in the
Lastly, petitioner’s escape from detention on August 26, 1998 Information.41 (Citations omitted)
while the case was pending can also be considered as another
circumstance since it is a strong indication of his guilt. The penalty prescribed by law for the crime of homicide is
reclusion temporal.42 In view of the absence of any mitigating or
All told, this Court finds the concordant combination and aggravating circumstance and applying the Indeterminate
cumulative effect of the alleged established circumstances, which Sentence Law, the maximum of the sentence should be within the
essentially were the same circumstances found by the trial court range of reclusion temporal in its medium term which has a
and the appellate court, to have satisfied the requirement of duration of fourteen (14) years, eight (8) months and one (1) day
Section 4, Rule 133 of the Rules of Court. Indeed, the to seventeen (17) years and four (4) months, while the minimum
incriminating circumstances, when taken together, constitute an should be within the range of prision mayor which has a duration
unbroken chain of events enough to arrive at the conclusion that of six (6) years and one (1) day to twelve (12) years. Thus, the
petitioner was responsible for the killing of the victim. imposition by the CA of an indeterminate prison term of ten (10)
years of prision mayor, as minimum, to seventeen (17) years and
Besides, it is "[a]n established rule in appellate review x x x that four (4) months of reclusion temporal, as maximum, is in order.
the trial court’s factual findings, including its assessment of the
credibility of the witnesses and the probative weight of their Petitioner’s Civil liability
testimonies, as well as the conclusions drawn from the factual
findings, are accorded respect, if not conclusive effect. These While the CA correctly imposed the amount of ₱50,000.00 as civil
factual findings and conclusions assume greater weight if they indemnity, it failed, however, to award moral damages. These
are affirmed by the CA,"40 as in this case. awards are mandatory without need of allegation and proof other
than the death of the victim, owing to the fact of the commission
The Crime Committed and the Proper Penalty. of murder or homicide.43 Thus, for moral damages, the award of
₱50,000.00 to the heirs of the victim is only proper.
The Court agrees with the CA that petitioner is guilty only of the
crime of homicide in view of the prosecution’s failure to prove any Anent the award of actual damages, this Court sees no reason to
of the alleged attendant circumstances of abuse of superior disturb the amount awarded by the trial court as upheld by the
strength and nighttime. As aptly observed by the appellate court: CA since the itemized medical and burial expenses were duly
supported by receipts and other documentary evidence.
The circumstance of abuse of superior strength is present
whenever there is inequality of forces between the victim and the

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CASES ON EVIDENCE

The CA did not grant any award of damages for loss of earning
capacity and rightly so. Though Sabina testified as to the monthly
salary of the deceased, the same remains unsubstantiated. "Such
indemnity cannot be awarded in the absence of documentary
evidence except where the victim was either self-employed or a
daily wage worker earning less than the minimum wage under
current labor laws.''44 The exceptions find no application in this
case.

In addition and in conformity with current policy, an interest at

the legal rate of 6% per annum is imposed on all the monetary
awards for damages from date of finality of this judgment until
fully paid.

WHEREFORE, in light of all the foregoing, the Petition is hereby

DENIED. The Decision dated July 6, 2007 and Resolution dated
September 14, 2007 of the Court of Appeals in CA-G.R. CR-H.C.
No. 02252 are AFFIRMED with the MODIFICATIONS that
petitioner JOSE ESPINEL! a.k.a. DANILO "DANNY'' ESPINEL! is
further ordered to pay the heirs of the victim ALBERTO BERBON
y DOWNIE PS0,000.00 as moral damages as well as interest on
all the damages assessed at the legal rate of 6% per annum from 43. PEOPLE VS VILLARIEZ
date of finality of this judgment until fully paid.
Same; Evidence; Dying Declaration; Statements identifying the
SO ORDERED assailant, if uttered by a victim on the verge of death, are entitled
to the highest degree of credence and respect.—Villariez’s
allegation that the dying declaration made by the victim should be
held inadmissible deserves scant consideration. We agree with the
finding of the CA that all the requisites necessary to admit
Enrique’s dying declaration to his own daughter Ana were all
present. The relevant portions state: Statements identifying the
assailant, if uttered by a victim on the verge of death, are entitled
to the highest degree of credence and respect. Persons aware of
an impending death have been known to be genuinely truthful in
their words and extremely scrupulous in their accusations. The
dying declaration is given credence on the premise that no one
who knows of one’s impending death will make a careless and

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CASES ON EVIDENCE

false accusation. Hence, not infrequently, pronouncements of Honorable Court, the above-named accused, all armed with guns
guilt have been allowed to rest solely on the dying declaration of of unknown caliber and with intent to kill, conspiring and
the deceased victim. For a dying declaration to be admissible in confederating with one another, did then and there willfully,
evidence, the following requisites must concur: (1) the dying unlawfully and without any warning or provocation shot from
declaration must concern the cause and surrounding behind one ENRIQUE OLIMBA, thereby inflicting upon the latter
circumstances of the declarant’s death; (2) at the time of making a fatal gunshot wound in the body causing the instantaneous
his declaration, the declarant was under a consciousness of death of said Enrique Olimba.
impending death; (3) the declarant must have been competent to
testify as a witness; and (4) the declaration was offered in a The crime was committed with the qualifying aggravating
criminal case for homicide, murder or parricide in which the circumstances of treachery and known premeditation.
declarant was the victim.
That because of the death of said ENRIQUE OLIMBA, his heirs
CARPIO, J.: are entitled to death indemnity of P50,000.00 plus other damages
in consonance with the provisions of the New Civil Code of the
Philippines.
The Case
CONTRARY TO LAW.4
Before the Court is an appeal assailing the Decision1 dated 20
November 2012 of the Court of Appeals (CA) in CA-G.R. CR No. On 20 July 1995, warrants of arrest were issued against the three
00882. The CA affirmed with modification the Decision2 dated 22 accused brothers - Villariez, Amado, and Tomas. Amado and
August 2007 of the Regional Trial Court (RTC) of Roxas City, Tomas surrendered and posted bail. On 26 August 1995, Amado
Branch 17, in Criminal Case No. C-4770. The CA convicted was shot dead and the case against him was dismissed. On 17
appellant Reggie Villariez alias "Toti" (Villariez) of the crime of November 1995, Tomas was arraigned and pleaded not guilty.
murder qualified by treachery and sentenced him to suffer the
penalty of reclusion perpetua. On 29 January 1997, the prosecution filed a Motion to Dismiss
Tomas from the case. Perla Olimba (Perla), the wife of the victim
The Facts Enrique Olimba (Enrique), executed an Affidavit of Desistance
because of the insufficiency of evidence to prove Tomas' guilt
On 22 September 1995, Villariez, together with his two brothers, beyond reasonable doubt. On 30 January 1997, the motion was
Amado Villariez (Amado) and Tomas Villariez (Tomas), was granted by the RTC.
charged in an Information for murder, defined and penalized
under Article 2483 of the Revised Penal Code. The Information On 6 October 1999, the RTC ordered the issuance of an alias
states:ChanRoblesvirtualLawlibrary warrant of arrest against Villariez. On 14 February 2003, the alias
warrant of arrest was returned to the RTC after Villariez was
That on July 3, 1995, at around 3:30 o'clock in the afternoon at arrested. On the same day, Villariez was taken into custody by
the compound of the Catholic Cemetery in Brgy. Casanayan, the provincial warden of the Capiz Rehabilitation Center.
Pilar, Capiz, Philippines, and within the jurisdiction of this

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CASES ON EVIDENCE

On 5 May 2003, Villariez was arraigned and pleaded not guilty. pointing their guns to people who were scampering away. The
three then fled on a motorcycle.
On 20 August 2003, at the pre-trial conference, the following
facts were admitted by the parties: (1) the name and identity of Randy testified that he was two to three meters away from his
Villariez; (2) the name and identity of the victim, Enrique; (3) that father prior to the shooting. He saw Villariez and the latter's two
on 3 July 1995, at about 3:30 p.m., a shooting incident occurred brothers Amado and Tomas position themselves behind his
in the premises of the Catholic Cemetery of Barangay Casanayan, father's back. Thereafter, he saw Villariez, with a short firearm,
Pilar, Capiz, where the victim was present and died as a result; (4) shoot his father. When the three started running away, he rose
that Villariez knows Enrique since they are second cousins; (5) and followed them. Randy saw Amado ride a motorcycle while
that Villariez is a brother of co-accused Amado and Tomas; and Tomas and Villariez passed by the rice fields. He then saw
(6) that Villariez was arrested on 14 February 2003. Villariez waving the short firearm he was carrying to some tricycle
drivers. Afterwards, Randy saw Villariez riding on a motorcycle.
On 25 March 2004, Villariez posted a personal bail bond and was
released from custody. Perla testified that while attending the burial of her uncle, she
heard an explosion. She went out and saw Villariez and his two
During the trial, the prosecution presented the following brothers run away from the place where her husband was lying.
witnesses: (1) Dr. Florentino Bermejo (Dr. Bermejo), postmortem Then she saw Ana cradling the head of her husband who was
examiner; (2) Perla; (3) Randy Olimba (Randy), son of the victim; lying on the ground. Randy approached Perla and told her that
(4) Ana Olimba (Ana), daughter of the victim; and (5) Antonio Toti was the one who shot his father. Perla went to the Barangay
Bacto, Chief of Police of Capiz. Captain to inform him that Villariez shot her husband. Perla then
returned to the cemetery. There, she found her husband already
Ana testified that on 3 July 1995, she, together with her family dead. Thereafter, Perla, Ana and Randy brought Enrique's body to
-parents Enrique and Perla and sibling Randy, attended the their house and summoned Dr. Bermejo.
burial of Perla's uncle in the cemetery of Barangay Casanayan,
Pilar, Capiz. At around 3:30 in the afternoon, while praying the Dr. Bermejo, the Rural Health Physician of Pilar, Capiz,
novena before the burial, Ana, who was on top of a tomb and performed the postmortem examination on Enrique's cadaver. Dr.
about eight meters from her father, heard a gun explode. When Bermejo testified that the victim's cause of death was severe
she turned to look at her father, she saw him spinning. Ana then hemorrhage, antecedent to a gunshot wound with the entrance of
shouted to her mother that her father was shot. Ana ran towards the bullet at the back. He further testified that both the victim
her father and saw Villariez waving a gun, accompanied by his and assailant were possibly standing when the incident
brothers Amado and Tomas. Ana held her father's head with her happened.
dress drenched in blood. She asked her father the identity of the
person who shot him. At the brink of death and with a voice she The defense, on the other hand, presented (1) Villariez; (2) Tomas;
could hardly hear, her father uttered the name "Toti." Thereafter, and (3) Reynaldo Jalbuna (Jalbuna), Villariez's friend and co-
she ran towards the road and told her mother to bring her father worker.
to the hospital. She also saw Villariez and his two brothers

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Villariez testified that he was at the Casanayan Cemetery on her father's dying declaration that it was "Toti" who shot him.
attending the burial of his uncle at around 3:30 in the afternoon The RTC, however, found that the prosecution failed to establish
of 3 July 1995. He was with Jalbuna, his friend for more than 10 the existence of the qualifying circumstances of treachery and
years. His elder brother Tomas was also present and was taking advantage of strength. Thus, it held Villariez liable for the
standing about 20-30 meters ahead of them. Around 200 people crime of homicide, punishable by reclusion temporal. The
attended the burial and while they were praying, he heard a dispositive portion of the decision
sudden outburst and saw a person fall down. The person was states:ChanRoblesvirtualLawlibrary
later identified as Enrique, the husband of his second cousin
Perla. Everyone scurried away to different directions. Together WHEREFORE, premises considered, the Court finds the accused
with Jalbuna, Villariez then proceeded to Balasan, Iloilo. guilty beyond reasonable doubt of the crime of homicide, and he
is hereby sentenced to suffer the indeterminate prison term of 6
Jalbuna testified that he was Villariez's co-worker and at the time years and 1 day of Prision Mayor, as minimum, to 12 years and 1
of the incident they were employed by Vice Mayor Samson Vedro day of Reclusion Temporal, as maximum, and to pay the heirs of
of Balasan, Iloilo. Jalbuna corroborated Villariez's testimony and the victim of the amount of P70,000.00 as civil indemnity,
stated that he was with Villariez in the afternoon of 3 July 1995 P100,000.00 as moral damages and P50,000.00 as funeral and
attending the funeral of Villariez's relative. They saw Tomas at the wake expenses, and pay the costs.
funeral but Tomas did not see them. When the shooting incident
occurred, Jalbuna saw people running away. They followed SO ORDERED.5
everyone else and left the cemetery. They then headed back to
work in Balasan, Iloilo. On 20 September 2007, Villariez filed an appeal with the CA.
Villariez raised the following errors of the
Tomas testified that he, together with his brother Amado, RTC:ChanRoblesvirtualLawlibrary
attended the burial of his uncle on 3 July 1995. He did not see
his brother Villariez during the burial. Tomas stated that he was I
about 10 meters away when he saw the man who shot Enrique
but he did not recognize the lone gunman. He further said that THE COURT A QUO GRAVELY ERRED IN DRAWING FACTUAL
Perla could not have seen the shooting incident since her CONCLUSIONS FROM THE NEBULOUS AND DOUBTFUL
husband was way behind her and that their two children, Randy TESTIMONIES OF PERLA OLIMBA, RANDY OLIMBA AND ANA
and Ana, were not present during the burial. OLIMBA, WIDOW, SON AND DAUGHTER, RESPECTIVELY OF
THE DECEASED, THAT IT WAS THE ACCUSED-APPELLANT
In its Decision dated 22 August 2007, the RTC found Villariez WHO SHOT THE LATTER;
guilty beyond reasonable doubt of the crime of homicide. The RTC
found that the seething righteous indignation of the prosecution's II
witnesses against Villariez could have arisen only from their
unadulterated knowledge of the identity of their kin's assailant. THE COURT A QUO GRAVELY ERRED IN APPRECIATING THE
The RTC also gave weight to the positive identification of Villariez ALLEGED STATEMENT OF THE DECEASED TO HER
by Randy and found no reason to disregard the testimony of Ana

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CASES ON EVIDENCE

DAUGHTER, ANA OLIMBA, AFTER THE SUBJECT SHOOTING AFFIRMED with MODIFICATION that the accused-appellant
INCIDENT AS A DYING DECLARATION; AND Reggie Villariez alias "Toti" is hereby found guilty beyond
reasonable doubt of "Murder" qualified by treachery defined and
III penalized by Article 248 of the Revised Penal Code and is hereby
meted the penalty of "RECLUSION PERPETUA."
THE COURT A QUO GRAVELY ERRED IN NOT ACQUITTING THE
ACCUSED-APPELLANT FOR THE FAILURE OF THE He is further ordered to pay the heirs of Enrique Olimba, Seventy
PROSECUTION WITNESSES TO IDENTIFY HIM BEYOND Five Thousand Pesos (P75,000.00) as civil indemnity, Seventy
REASONABLE DOUBT AS THE PERSON WHO SHOT TO DEATH Five Thousand Pesos (P75,000.00) as moral damages, Thirty
THE DECEASED.6 Thousand [Pesos] (P30,000.00) as exemplary damages, and
Twenty Five Thousand Pesos (P25,000.00) as temperate damages.
The Ruling of the CA Finally, interest on all these damages assessed at the legal rate of
6% from date of finality of this Decision until fully paid is
In its Decision dated 20 November 2012, the CA affirmed with imposed.
modification the decision of the RTC. The CA found that Randy's
testimony leaves no doubt that Villariez committed the crime. SO ORDERED.7
Randy's eyewitness account was amply supported by the
postmortem examination which revealed that the entrance The Issues
wound, located at Enrique's back, caused his father's death. The
CA also stated that the close relationship of the Olimbas' with Villariez now comes before the Court assailing the decisions of the
Villariez, being Perla's second cousin, assured the certainty of the RTC and CA for (1) failure of the prosecution to amend the
identification of Enrique's killer. The CA found the Olimbas' Information charging that he committed the crime alone and not
testimonies deserving of full faith and credit absent any ill motive in conspiracy with his conspirators-brothers; and (2) giving
on their part to testify against Villariez. Further, the positive credence to the dying declaration made by Enrique which should
identification of Randy was fully supported by the dying be held inadmissible.
declaration of his father pointing to Villariez as the person who
shot him. The CA also appreciated the qualifying circumstance of The Ruling of the Court
treachery since the shooting was swift, sudden and unforeseen
which placed Villariez at a position which afforded him no risk The appeal lacks merit.
arising from a defense which the victim might have made.
We agree with the RTC and CA in ruling that the prosecution fully
The dispositive portion of the decision established Villariez's guilt for killing Enrique. Both the RTC and
states:ChanRoblesvirtualLawlibrary CA gave full faith and credence to the testimonies of the
prosecution witnesses. Randy gave a frank and categorical
WHEREFORE, premises considered, the Appeal is DENIED. The eyewitness account that Villariez was the one who shot his father.
Decision dated August 22, 2007 of the Regional Trial Court (RTC), Randy's account was corroborated by Dr. Bermejo's postmortem
Branch 17, Roxas City in Criminal Case No. C-4770, is hereby examination which revealed that the victim's cause of death was a

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CASES ON EVIDENCE

gunshot wound to the back. Also, no ill motive was imputed to committed those acts in conspiracy with his co-accused. We ruled
the prosecution witnesses to falsely accuse and testify against that the commission of the specific acts charged against the
Villariez. The assertion of the accused that the witnesses were accused constituted the offense charged, and the failure to
biased since they were related to the victim deserves scant establish the conspiracy in no way prevented conviction of the
consideration. Mere relationship of a witness to the victim does accused for the offense charged and proven.
not impair the witness' credibility. On the contrary, a witness'
relationship to a victim of a crime would even make his or her Villariez's allegation that the dying declaration made by the victim
testimony more credible, as it would be unnatural for a relative should be held inadmissible deserves scant consideration. We
who is interested in vindicating the crime, to accuse somebody agree with the finding of the CA that all the requisites necessary
other than the real culprit.8 Further, Villariez's defense of denial to admit Enrique's dying declaration to his own daughter Ana
failed to cast doubt on the positive identification made by the were all present. The relevant portions
prosecution witnesses and this defense, being inherently weak, state:ChanRoblesvirtualLawlibrary
cannot prevail over such positive identification of the accused as
the perpetrator of the crime. Statements identifying the assailant, if uttered by a victim on the
verge of death, are entitled to the highest degree of credence and
Villariez insists that since the prosecution failed to amend the respect. Persons aware of an impending death have been known
Information charging that he committed the crime alone, and not to be genuinely truthful in their words and extremely scrupulous
in conspiracy with his brothers, then the prosecution violated his in their accusations. The dying declaration is given credence on
constitutional right to due process for not informing him of the the premise that no one who knows of one's impending death will
true nature, cause and circumstance of the commission of the make a careless and false accusation. Hence, not infrequently,
crime for which he was tried and convicted. pronouncements of guilt have been allowed to rest solely on the
dying declaration of the deceased victim.
We disagree.
For a dying declaration to be admissible in evidence, the following
In the present case, the Information charged Villariez, together requisites must concur: (1) the dying declaration must concern
with his brothers, of inflicting upon Enrique a fatal gunshot the cause and surrounding circumstances of the declarant's
wound in the body causing the latter's instantaneous death. death; (2) at the time of making his declaration, the declarant was
under a consciousness of impending death; (3) the declarant
The commission of the specific acts charged against Villariez must have been competent to testify as a witness; and (4) the
constitutes the offense charged in the Information. The declaration was offered in a criminal case for homicide, murder or
prosecution's failure to establish conspiracy due to the death of a parricide in which the declarant was the victim.
co-conspirator and the dismissal of the case against another co-
conspirator does not defeat the conviction of the accused for the These requisites are all present in the case at bar.
offense charged and proven during the trial.
First. Enrique's utterance pertains to the identity of the one who
In US v. Vitug,9 the Information charged that the accused shot him.
committed the specific acts therein attributed to him, and that he

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CASES ON EVIDENCE

Second. Contrary to the allegation of accused-appellant, it was

established that the declarant Enrique, was under a WHEREFORE, we DISMISS the appeal. We AFFIRM the
consciousness of his impending death. In the case at bench,
although he made no express statement showing that he was Decision dated 20 November 2012 of the Court of Appeals in CA-
conscious of his impending death, it was clear however, G.R. CR No. 00882.
considering the fatal quality of his injury and that he was barely
heard by Ana when he uttered accused-appellant's name, that his SO ORDERED.
death was imminent, x x x.

Third. Declarant Enrique would have been competent to testify

had he survived.

Last. His dying declaration is offered in a criminal prosecution for

murder where he was the victim.10

Further, we agree with the CA in appreciating treachery as a

qualifying circumstance. The essence of treachery is the sudden
and unexpected attack on an unsuspecting victim, depriving the
victim of any chance to defend himself. Here, Randy witnessed
that it was Villariez who shot his father at the back. Enrique,
deep in thought while listening to the burial service, was
unprepared and had no means to put up a defense. Enrique was
shot unexpectedly which insured the commission of the crime
without risk to Villariez. This treacherous act qualified the killing
to murder.

In sum, we find no cogent reason to depart from the decision of

the CA. Villariez is guilty beyond reasonable doubt of the crime of
murder and is sentenced to suffer the penalty of reclusion
perpetua. As for damages, the CA, in conformity with recent 44. PEOPLE VS BRIOSO
jurisprudence," properly awarded these amounts: (1) P75,000 as
civil indemnity; (2) P75,000 as moral damages; (3) P30,000 as Same; Evidence; Ante-mortem declaration; When statements
exemplary damages; and (4) P25,000 as temperate damages. satisfy the requirements of ante-mortem statement.— The
Moreover, the amounts of damages awarded are subject to testimony of Cecilia Bernal finds corroboration in the declaration
interest at the legal rate of 6% per annum from the date of finality of the victim, who told his wife that it was Juan Brioso and
of this Decision until fully paid. Mariano Taeza who shot him. This statement does satisfy the

323
CASES ON EVIDENCE

requirements of an ante-mortem statement. Judged by the nature

and extent of his wounds, Silvino Daria must have realized REYES, J.B.L., J.:
seriousness of his condition, and it can be safely inferred that he
made the same under the consciousness of impending death, Appeal from a judgment of the Court of First Instance of Abra, in
considering that he died only one hour after being shot. its Criminal Case No. 626, finding the two appellants Juan Brioso
and Mariano Taeza guilty of murder, and sentencing each to
Same; Same; Alibi; Alibi a weak defense.—It has been repeatedly suffer life imprisonment and to indemnify, jointly and severally,
held that in the face of direct evidence, alibi is necessarily a weak the heirs of Silvino Daria in the sum of P6,000.00 but without
defense and becomes more so if uncorroborated. It is worse if the subsidiary imprisonment in case of insolvency, and to pay the
alibi could have been corroborated by other persons mentioned by costs.
the accused but they are not presented.
An information filed by the Provincial Fiscal dated 16 January
Same; Same; Same; Alibi to be believed must be supported by 1967 charged the two accused, Juan Brioso and Mariano Taeza,
physical impossibility for the accused to have been at the scene of with the crime of murder under Article 248 of the Revised Penal
the crime.—The defense of alibi is so weak that in order to be Code, committed as follows:
believed there should be a demonstration of physical impossibility
for the accused to have been at the scene of the crime at the time That on or about the 23rd day of December, 1966, in the
of its commission. Municipality of Tayum, Province of Abra, Philippines, and within
the jurisdiction of this Honorable Court, the above-named
Same; Same; Same; Defense of alibi must be established by full, accused, armed with firearms of different calibers, by
clear and satisfactory evidence.—In case of positive identification confederating and mutually helping one another, with deliberate
of the culprit by reliable witnesses, it has been held that the intent to kill and without justifiable motive, with treachery and
defense of alibi must be established by “full, clear and satisfactory evident premeditation, did then and there willfully, unlawfully
evidence.” It is obvious that the witness, who is a close relative of and feloniously, assault, attack and shot one, Silvino Daria,
the accused, was merely presented in court in an attempt to save inflicting upon him multiple gunshot wounds on the different
Juan Brioso from punishment for the crime committed. The parts of his body, which wounds caused his death thereafter.
witness has an interest in the fate of the accused Juan Brioso,
and, therefore, his testimony should not be given credence. CONTRARY TO LAW, with the aggravating circumstances in the
commission of the crime, to wit: (a) treachery and evident
Same; Same; Locus criminis; When there is possibility to be premeditation; (b) advantage was taken of superior strength; and
present at the scene of the crime.—Evidence shows that from (c) with the use of firearm.
Tiker to Catungawan is only about nine kilometers and only a
two-hour walk. The place is also accessible by motor The records of the case show that on 23 December 1966, between
transportation, although motor vehicles are allegedly rare in the 8 and 9 in the evening, the spouses Silvino Daria and Susana
said place. As in the case of Mariano Taeza, it was not physically Tumalip were in their house at barrio Tiker, Tayum, Abra. The
impossible for Juan Brioso to be at the locus criminis at the time husband was making rope in the annex of their house, while the
the crime was committed. wife, four meters away, was applying candle wax to a flat iron.

324
CASES ON EVIDENCE

Silvino Daria was using a lamp where he worked. Outside, the 1. The lower court erred in relying on the uncorroborated and
night was bright because of the moon overhead. contradictory testimony and statement of the prosecution witness
Cecilia Bernal on the physical identity of the accused;
Cecilia Bernal, a niece and neighbor of the spouses, was alarmed
by the barking of dogs. She peeped through a crack in the wall of 2. The lower court erred in disregarding the affidavit (Exhibit 2) of
her house and saw appellants herein pass southward in the Antonio Daria, son of the deceased, clearing the accused Mariano
direction of the house of Silvino Daria that was six meters away. Taeza, which affidavit had been identified in court by the fiscal
Brioso was carrying a long gun. Her suspicions awakened, she before whom the same was executed; and
went downstairs and, shielded by the fence, witnessed each
appellant point a gun at the bamboo wall of Daria's house. Two 3. The lower court erred in finding the accused guilty of the crime
detonations followed, and thereafter she heard Daria moaning of murder.
and his wife call for help, saying her husband had been shot.
Bernal went to the house and found the victim prostrate, The assigned errors are discussed together, being closely inter-
wounded and unable to speak. The widow, however, testified that related.
right after being shot, she rushed to her husband's side and he
told her that he was shot by Juan Brioso and Mariano Taeza. We find no discrepancy in the testimony of Cecilia Bernal on the
Silvino Daria expired one hour later as a result of gunshot material points. She stated that she did not see Mariano Taeza
wounds in the abdomen and leg. A few days later, Cecilia Bernal carry a gun when both the accused passed by. But this brief
and the widow, Susana Tumalip, executed affidavits pointing to observation does not necessarily mean that he was not actually
the two accused as the killers (Exhibits "B" and "C," respectively). armed or carrying a gun on his person. The fact that he did was
proved when both the said accused were seen pointing their
The cause of the death of Silvino Daria was "Shock due to severe respective gun at the victim and each subsequently fired once at
hemorrhage secondary to gunshot wounds at the abdomen and him, Taeza using a short weapon (t.s.n. Millare, page 17) that
leg," as found by Dr. Isabelo B. Lucas, Municipal Health Officer of could have been carried concealed in his person.
Tayum, Abra, contained in his Medico-Legal Necropsy Report,
Exhibit "A". The house of Cecilia Bernal was only six meters away from that of
Silvino Daria's. The night was brightly illuminated by the moon.
The motive for the killing appears to have been the disapproval by Cecilia Bernal had known both accused for a long time and it is
the spouses Silvino and Susana Daria of Mariano Taeza's admitted that they also know her. There could have been no
courtship of their daughter, Angelita. Angelita was even sent to difficulty in identifying the accused under the circumstances.
Manila for her to avoid Mariano Taeza. The courtship is admitted
by Mariano Taeza. Cecilia Bernal had no motive to impute falsely this heinous
charge of murder against the above-said accused, considering
The two accused appealed the conviction and assigned the that Mariano Taeza is a nephew of the deceased by a first degree
following errors as committed by the court a quo: cousin. Even Juan Brioso specifically said that he knew of no
reason why she should testify against him. Hence, her statement
that she came to court only to tell the truth should be believed.

325
CASES ON EVIDENCE

The witness also stated that she was hard of hearing and could Exhibit "2," the alleged affidavit of Antonio Daria, was presented
not understand some of the questions; thus, the alleged in court to corroborate Mariano Taeza's testimony. But while the
inconsistencies in her testimony do not detract from the "positive said affidavit was identified by the Provincial Fiscal as having
and straightforward"1 identification of the accused as the ones been subscribed and sworn to before him, he also stated that he
who were seen at the scene of the crime and who actually shot did not know Antonio Daria personally and that was the only time
Silvino Daria. he appeared before him. Exhibit "2" does not have the seal of the
Fiscal's Office. Moreover, the said exhibit was never identified by
It is noteworthy that the trial judge observed witness Bernal the supposed affiant and there was no opportunity for the
closely, warning her several times not to exaggerate, yet in the prosecution to cross-examine him. As stated in People vs.
decision gave her full credence, being obviously satisfied of her Mariquina4, affidavits are generally not prepared by the affiants
truthfulness.lâwphî1.ñèt The general rule, based on logic and themselves but by another who uses his own language in writing
experience, is that the findings of the judge who tried the case the affiants' statements, which may thus be either committed or
and heard the witnesses are not disturbed on appeal, unless misunderstood by the one writing them. For this reason, and for
there are substantial facts and circumstances which have been the further reason that the adverse party is deprived of the
overlooked and which, if properly considered, might affect the opportunity to cross-examine the affiants, affidavits are generally
result of the case,2 which in this case have not been shown to rejected in a judicial proceeding as hearsay, unless the affiants
exist. themselves are placed on the witness stand to testify thereon. In
view hereof, We find Exhibit "2" of no probative value, and that
Moreover, the testimony of Cecilia Bernal finds corroboration in the lower court did not err when it rejected the same. In this
the declaration of the victim, who told his wife that it was Juan connection, it is markworthy that the prosecuting attorney stated
Brioso and Mariano Taeza who shot him. This statement does in open court that Antonio Daria had also executed another
satisfy the requirements of an ante mortem statement. Judged by affidavit (Exhibit "D") in the Fiscal's office "to the effect that he
the nature and extent of his wounds, Silvino Daria must have went to the office of defense counsel, ...... and there affixed his
realized the seriousness of his condition, and it can be safely thumbmark on a statement that was never read to him." Be that
inferred that he made the same under the consciousness of as it may, not one of the other persons who, Mariano Taeza
impending death,3 considering that he died only one hour after claimed, were with him in the barrio clinic (Narciso Valera and
being shot. Jose Cabais) was produced in court to support his alibi. Mariano
Taeza's testimony, therefore, remains uncorroborated. It has been
The defense of both the accused is alibi. Mariano Taeza's own repeatedly held that in the face of direct evidence, alibi is
account was that in the evening of 23 December 1966 he was at necessarily a weak defense and becomes more so if
the barrio clinic of Tiker playing the guitar with Antonio Daria uncorroborated. 5 It is worse if the alibi could have been
(son of the deceased), Narciso Valera and Jose Cabais. While in corroborated by other persons mentioned by the accused but they
the said place, they heard two gun explosions. Soon afterwards, are not presented.6
Macrino Arzadon and Taurino Flores came running towards
them, informing Antonio Daria that his father was already dead. By Mariano Taeza's own admission, he and the other accused,
Juan Brioso, are close friends. It was shown that Mariano Taeza's
house is only about two hundred meters from that of Silvino

326
CASES ON EVIDENCE

Daria's and that the barrio clinic is only about eighty to one they contradict each other as to what happened in the earlier
hundred meters from the said victim's place. Mariano Taeza hours or events. As already stated, Juan Brioso testified that he
himself stated that Silvino Daria died "may be less than thirty left his place in Addamay at 8 in the morning and arrived at his
minutes, may be five minutes" after his arrival at the victim's cousin's house before the noon meal of 23 December 1966; but
house with the latter's son and other persons. As held in another Nestorio Flores asserted that it was 8 in the morning when Juan
case 7 the defense of alibi is so weak that in order to be believed Brioso arrived. Brioso claimed that they cut sugar cane from 4 to
there should be a demonstration of physical impossibility for the 5 in the afternoon of the said day. His cousin testified that they
accused to have been at the scene of the crime at the time of its cut sugar cane in the morning after Brioso's arrival until
commission. Mariano Taeza was so near the victim's house that it lunchtime. Brioso stated that they milled sugar cane for the third
was easy for him to be there when the shooting occurred. time in that place in 1966, the first occasion being on 29
November, and the second on 8 December. Flores denied this,
The other accused, Juan Brioso, stated that he was in sitio saying that they did not cut sugar cane in November, 1966,
Catungawan, barrio Basbasa, Tayum, on 23 December 1966. He although in other years they did. He further stated that it was
was there upon invitation of his first cousin, Nestorio Flores, to already in December of that year that Brioso came. In fact, the
cut and mill sugar cane. He left his house in Addamay at 8 in the same witness showed uncertainty as to the exact date, when he
morning of the said day, arriving in Catungawan before the noon answered even on direct examination that "may be that was the
meal. They cut sugar cane from 4 to 5 in the afternoon. At 6:30, time when he came."9 In cases of positive identification of the
after supper, he, his cousin, and the latter's son, Felix Flores, culprit by reliable witnesses, it has been held that the defense of
started milling the sugar cane which they had cut. The milling alibi must be established by "full, clear and satisfactory evidence."
lasted up to 2 in the early morning of the following day. He never 10 It is obvious that this witness, who is a close relative of the
left the place where they were milling. He learned of the death of accused, was merely presented in court in an attempt to save
Silvino Daria only when he returned to Addamay because his Juan Brioso from punishment for the crime committed. We
parents informed him of the news. He admitted knowing Cecilia believe the trial court when it found that the witness has an
Bernal and that she likewise knows him. interest in the fate of the accused Juan Brioso, and, therefore, his
testimony should not be given credence.
He denied being a close friend of Mariano Taeza (thereby
contradicting Mariano Taeza's testimony)8; denied that he had Evidence also shows that from Tiker to Catungawan is only about
gone to the house of Angelita Daria, and his having knowledge of nine kilometers and only a two-hour walk. The place is also
the courtship of Angelita by Mariano Taeza; or that both of them accessible by motor transportation, although motor vehicles are
used to drink and go out together. On cross-examination, allegedly rare in the said place. As in the case of Mariano Taeza, it
however, he admitted that he went with Mariano Taeza when they was not physically impossible for Juan Brioso to be at the locus
attended dances. One such occasion was during the birthday of criminis at the time the crime was committed.
his first degree cousin in Addamay way back in 1965.
It has been clearly and sufficiently proved that the killing of
Nestorio Flores was presented to corroborate the alibi of the Silvino Daria was qualified by treachery (alevosia)." 11 The victim
accused. But while both exhibited wonderful memory as to what was quietly making rope in his own house. He was caught off-
happened between sunset and midnight of 23 December 1966, guard and defenseless when suddenly and unexpectedly the two

327
CASES ON EVIDENCE

accused fired at him. He had no chance either to evade or repel

the aggression. The trial court correctly held that treachery
absorbs nocturnity and abuse of superior strength. 12 But while
these aggravating circumstances are always included in the
qualifying circumstance of treachery, the commission of the crime
in the victim's dwelling is not, 13 hence the crime is murder
attended by one aggravating circumstance, which has been held
to be present where the victim was shot inside his house although
the triggerman was outside. 14 There being no mitigating
circumstance to offset it, the apposite penalty is death. However,
for lack of sufficient votes, the penalty imposable is reduced to life
imprisonment.

WHEREFORE, the sentence under appeal is affirmed, with the

sole modification that the amount of the indemnity is increased to
P12,000.00.

45. PEOPLE VS GATARIN

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CASES ON EVIDENCE

res gestae. Res gestae refers to the circumstances, facts, and

Remedial Law; Evidence; Hearsay Evidence Rule; Dying declarations that grow out of the main fact and serve to illustrate
Declaration; Requisites for the Admissibility of Dying Declaration its character and are so spontaneous and contemporaneous with
as an Exception to the Hearsay Evidence Rule.—A dying the main fact as to exclude the idea of deliberation and
declaration, although generally inadmissible as evidence due to fabrication. The test of admissibility of evidence as a part of the
its hearsay character, may nonetheless be admitted when the res gestae is, therefore, whether the act, declaration, or
following requisites concur, namely: (a) the declaration concerns exclamation, is so interwoven or connected with the principal fact
the cause and the surrounding circumstances of the declarant’s or event that it characterizes as to be regarded as a part of the
death; (b) it is made when death appears to be imminent and the transaction itself, and also whether it clearly negates any
declarant is under a consciousness of impending death; (c) the premeditation or purpose to manufacture testimony.
declarant would have been competent to testify had he or she
survived; and (d) the dying declaration is offered in a case in PERALTA, J.:
which the subject of inquiry involves the declarant’s death.
Assailed in this appeal is the Court of Appeals (CA) Decision1
Same; Same; Same; Same; The rule is that, in order to make a dated February 23, 2011 in CA-G.R. CR H.C. No. 03593 affirming
dying declaration admissible, a fixed belief in inevitable and the Regional Trial Court (RTC)2 Decision3 dated June 20, 2008 in
imminent death must be entered by the declarant.—In the case at Criminal Case No. 13838 convicting appellant Eduardo Quisayas
bar, it appears that not all the requisites of a dying declaration of Robbery with Homicide committed against the victim Januario
are present. From the records, no questions relative to the second Castillo y Masangcay (Januario).
requisite was propounded to Januario. It does not appear that the
declarant was under the consciousness of his impending death The facts of the case follow:
when he made the statements. The rule is that, in order to make
a dying declaration admissible, a fixed belief in inevitable and Appellant and accused Sonny Gatarin y Caballero were charged
imminent death must be entered by the declarant. It is the belief in an Information4 with Robbery with Homicide committed as
in impending death and not the rapid succession of death in point follows:
of fact that renders a dying declaration admissible. The test is
whether the declarant has abandoned all hopes of survival and That on or about the 3rd day of November, 2004, at about 8:00
looked on death as certainly impending. Thus, the utterances o’clock (sic) in the evening, at Barangay Poblacion, Municipality of
made by Januario could not be considered as a dying declaration. Mabini, Province of Batangas, Philippines and within the
jurisdiction of this Honorable Court, the above-named accused,
Same; Same; Same; Res Gestae; Words and Phrases; Res gestae armed with a bladed weapon, conspiring and confederating
refers to the circumstances, facts, and declarations that grow out together, acting in common accord and mutually helping each
of the main fact and serve to illustrate its character and are so other, with intent to gain, without the knowledge and consent of
spontaneous and contemporaneous with the main fact as to the owner thereof and with violence against or intimidation of
exclude the idea of deliberation and fabrication.—Even if person, did then and there willfully, unlawfully and feloniously
Januario’s utterances could not be appreciated as a dying take, rob, and carry away cash money amounting to Twenty
declaration, his statements may still be appreciated as part of the Thousand Pesos (₱20,000.00), Philippine Currency, belonging to

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Januario Castillo y Masangcay alias "Ka Maning," to the damage

and prejudice of the latter in the aforementioned amount and that On the same night, SPO3 Mendoza and PO1 Coronel were on
on the occasion and by reason of said robbery, the said accused board their patrol vehicle performing their routine patrol duty
with intent to kill and taking advantage of their superior strength, when they met two men, later identified as the accused, who were
did then and there willfully, unlawfully and feloniously attack, running at a fast speed. When asked why they were running, the
assault and stab with the said weapon Januario Castillo y accused did not answer prompting the policemen to chase them.
Masangcay alias "Ka Maning," thereby inflicting upon the latter The policemen, however, were unsuccessful in catching them and
the stab wounds to [the] anterior chest and right shoulder and when it became evident that they could no longer find them, they
right axilla, which directly caused his death. continued patrolling the area. There they saw Januario lying on
the street in front of Dom’s studio. As he was severely injured, the
Contrary to law.5 policemen immediately boarded Januario to the patrol vehicle and
brought him to the Zigzag Hospital. While inside the vehicle,
Appellant was arrested, while his co-accused remained at-large. SPO3 Mendoza asked Januario who hurt him. He answered that
When arraigned, he pleaded "Not Guilty." Trial on the merits it was "Jay-R and his uncle" who stabbed him. The uncle turned
thereafter ensued. out to be the appellant herein, while Jay-R is his co-accused who
remains at-large.7
The prosecution presented the testimonies of the following
witnesses: (1) Maria Castillo, the victim’s wife; (2) Howel Umali At the Zigzag Hospital, Januario was attended to by Dr. Rasa who
(Umali), who allegedly saw how the accused mauled the victim; (3) found him in critical condition. Three fatal wounds caused by a
SPO3 Gregorio G. Mendoza (SPO3 Mendoza) of the Mabini Police bladed weapon were found in Januario’s body which eventually
Station, who saw the victim lying on the floor and the accused caused his death.8
running away from the crime scene, and testified on the dying
declaration of Januario; (4) Dr. Catalino Ike A. Rasa Jr. (Dr. Maria Castillo, for her part, testified on how she learned of what
Rasa), who attended to the victim when he was brought to the happened to her husband, the victim herein, the amount allegedly
hospital; and (5) PO1 Rogelio Dizon Coronel (PO1 Coronel), who stolen from her husband, as well as on the expenses and loss
saw the accused running fast near the crime scene and who, incurred by reason of Januario’s death. She, further, quantified
likewise, testified on Januario’s ante mortem statement. the sorrow and anxiety the family suffered by reason of such
death.9
From the testimonies of the above-named witnesses, the
prosecution established the following facts: In his defense, appellant denied the accusation against him. He
claimed that he is from the Province of Samar but has been
On November 3, 2004, at 8 o’clock in the evening, Umali was residing in Cupang, Muntinlupa City since 1987. He denied
riding a bicycle on his way home when he saw Januario being knowing, much more residing in, Mabini, Batangas, as he only
mauled by two persons opposite Dom’s Studio in Poblacion, heard about the province from his employer who happens to be a
Mabini, Batangas. Upon seeing the incident, he stayed in front of resident therein. He claimed that he did not know Januario and
the church until such time that the accused ran away and were that he was, in fact, working in Muntinlupa City on the date and
chased by policemen who alighted from the police patrol vehicle.6 time the crime was allegedly committed.10

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is an exception to the hearsay rule.16 As to appellant’s defense of

The prosecution’s rebuttal witness Mr. Bienvenido Caponpon, alibi, the court gave more weight to the prosecution’s rebuttal
however, belied appellant’s claim and insisted that appellant was evidence that indeed the former was an actual resident of Mabini,
renting a house in Mabini, Batangas and that he was seen there Batangas.17
until the day the crime was committed.11
On appeal, the CA affirmed the RTC decision. Contrary, however,
On June 20, 2008, the RTC rendered a Decision against the to the RTC’s conclusion, the appellate court considered
appellant, the dispositive portion of which reads: Januario’s statement to SPO3 Mendoza, that the accused were
the ones who stabbed him and took his wallet, not only as part of
WHEREFORE, the People having proven the guilt of accused res gestae but also as a dying declaration.18
Eduardo Quisayas beyond reasonable doubt, he is hereby
declared "GUILTY" of the offense as charged. Accordingly, he is Hence, the appeal before the Court.
hereby sentenced to a prison term of Reclusion Perpetua.
We find appellant guilty beyond reasonable doubt not of robbery
Further, he is hereby ordered to pay herein offended party of the with homicide but of murder.
following:
The trial court’s factual findings, including its assessment of the
(a) civil indemnity in the amount of Php50,000.00 credibility of the witnesses, the probative weight of their
testimonies, and the conclusions drawn from the factual findings
(b) actual damages in the amount of Php20,000.00, plus are accorded great respect and even conclusive effect. We,
Php35,310.00 (funeral and hospital expenses), and nevertheless, fully scrutinize the records, since the penalty of
reclusion perpetua that the CA imposed on appellant demands no
(c) moral damages in the amount of Php100,000.00 less than this kind of careful and deliberate consideration.19

SO ORDERED.12 To sustain a conviction for robbery with homicide, the

prosecution must prove the following elements: (1) the taking of
The trial court gave credence to the testimony of Maria Castillo personal property belonging to another; (2) with intent to gain; (3)
not only as to the fact of taking money from Januario but also the with the use of violence or intimidation against a person; and (4)
amount taken.13 The fact of death was, likewise, found by the on the occasion or by reason of the robbery, the crime of
court to have been adequately proven by the testimony of Dr. homicide, as used in the generic sense, was committed.20
Rasa.14 Though there was no evidence whether the unlawful
taking preceded the killing of Januario, the court held that there First, in order to sustain a conviction for the crime of robbery
was direct and intimate connection between the two acts.15 with homicide, it is necessary that the robbery itself be proven as
conclusively as any other essential element of the crime.21 In
As to the identity of the perpetrators, the court considered the order for the crime of robbery with homicide to exist, it must be
victim’s response to SPO3 Mendoza’s question as to who established that a robbery has actually taken place and that, as a
committed the crime against him as part of the res gestae, which

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consequence or on the occasion of robbery, a homicide be

committed.22 Q Did these police officers inform you the location (sic) of where
your husband was located?
For there to be robbery, there must be taking of personal property
belonging to another, with intent to gain, by means of violence A According to the policemen, my husband was at Zigzag
against or intimidation of any person or by using force upon on Hospital, sir.
things.23 Both the RTC and the CA concluded that robbery was
committed based on the testimonies of Maria Castillo, SPO3 Q Did you go to Zigzag Hospital, Madam Witness?
Mendoza, and PO1 Coronel. A closer look at the testimonies of
these witnesses, however, failed to convince us that indeed A Yes, sir.
robbery took place.
Q What happened, Madam Witness, when you arrived at the
Maria Castillo’s testimony was offered by the prosecution to prove hospital?
that her husband, the victim herein, was a victim of robbery with
homicide and that he is a businessman, and that she suffered A I was informed by the nurse there that my husband was
damages by reason of such death. The pertinent portion of her already dead.
direct testimony is quoted below for a closer scrutiny:
ATTY. MASANGYA:
ATTY. MASANGYA:
Q Were you informed of the cause of the death of your husband?
Q The victim in this case Januario Castillo, how are you related to
him? WITNESS:

WITNESS: A According to them my husband was wounded, many wounds

and he was robbed, sir.
A My husband, sir.
Q Madam Witness, were you able to know who are the persons
Q On November 3, 2004, do you remember of any unusual responsible for the death of your husband?
incident that has occurred?
ATTY. EBORA:
A Yes, sir.
We will object. That will be misleading.
Q And what is that event?
COURT:
A At around 8:30 o’clock in the evening of November 3, 2004
while I was at home, policemen arrived and informed me that my If she is aware.
husband was wounded, sir.

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CASES ON EVIDENCE

ATTY. EBORA: A My former helper Sonny Gatarin and his uncle Eduardo
Quisayas, sir.
We submit.
Q You were told that your husband was robbed, how much was
COURT: taken from your husband, Madam Witness?

You ask her if she is aware who the perpetrators are. A ₱20,000.00.

ATTY. MASANGYA: Q And can you tell, Madam Witness, why is your husband
carrying that amount of money at the time of his death?
Q Madam Witness, were you informed who are the perpetrators of
the crime on your husband? A Yes, sir.

WITNESS: WITNESS:

A Not yet, sir. It was not told to me by the policemen because the A Those were the earnings for that day for he delivered
policemen were in a hurry. merchandise and groceries, sir.

ATTY. MASANGYA: ATTY. MASANGYA:

Q After the policemen went to your house, was there [any] person Q Do you know, Madam Witness, if your husband is engaged in
who informed you who were the perpetrators of the crime? any business?

A Yes, sir. My niece. A Yes, sir.

Q And who is that niece of yours, Madam Witness? Q And what is your proof in saying your husband is engaged in
business?
A Josephine Borbon, sir.
A Our business was we delivered bottled goods and groceries, sir.
Q Did Miss Borbon tell you about the identity of the perpetrators
of the crime, Madam Witness? Q The business wherein your husband is engaged has an existing
license with the appropriate local government?
A Yes, sir.
A Yes, sir.
Q And who are the persons did Miss Borbon mention?
Q If a copy will be shown to you, will you be able to identify the
same?

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CASES ON EVIDENCE

that she had no personal knowledge that Januario was robbed.

A Yes, sir. While she claimed that ₱20,000.00 was illegally taken from him,
no evidence was presented to show that Januario indeed had that
Q I am showing to you [a] certified copy of [the] Mayor’s permit amount at that time and that the same was in his possession. As
previously marked as Exhibit "H"? Maria Castillo claimed that the said amount was allegedly
received from their clients in their grocery business, said fact
A This is it, sir. could have been proven by receipts or testimonies of said clients.
The prosecution’s failure to present such evidence creates doubt
Q If you know, Madam Witness, how much is your husband as to the existence of the money.
earning in his sari-sari or grocery business?
The trial and appellate courts likewise relied on the testimony of
WITNESS: SPO3 Mendoza and PO1 Coronel on the statement of Januario
after the commission of the crime. While both policemen testified
A Yes, sir. as to the dying declaration of Januario pertaining to the cause
and circumstances surrounding his death, only PO1 Coronel
ATTY. MASANGYA: testified during his direct examination that when asked who
stabbed him, Januario replied that it was "Jay-Ar and his uncle
Q How much is he earning at the time? who stabbed him and took his wallet."25 In response to the
Presiding Judge’s clarificatory question, however, PO1 Coronel
A He earns ₱40,000.00. admitted that when he asked Januario who stabbed him, he
replied that it was Jay-Ar and his uncle. After which, no further
Q In a month or year? question was asked.26 On the other hand, nowhere in SPO3
Mendoza’s testimony did he talk about the alleged taking of
A ₱40,000.00 a month, sir. wallet. The pertinent portions of their testimonies read:

Q How do you feel or confront the situation that your husband is Direct Examination of PO1 Coronel:
already dead?
xxxx
A We felt deep sorrow together with my three (3) children, sir.
(Witness is crying) Q: What did you do next after boarding him inside your vehicle?

x x x x24 A We brought him at the Zigzag Hospital and we asked him who
stabbed him.
From the above testimony, it can be inferred that Maria Castillo
obviously was not at the scene of the crime on that fateful night Q What was his reply Mr. Witness?
as she was only informed that the incident took place and that
Januario was brought to the Zigzag Hospital. It, likewise, appears

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CASES ON EVIDENCE

A He told us that Jay-ar and his uncle stabbed him and took his
wallet. Direct Testimony of SPO3 Mendoza:

x x x x27 xxxx

PO1 Coronel’s Answers to the questions propounded by the Q And when you saw Januario Castillo lying on the street, what
Presiding Judge: did you do?

THE COURT: A We lifted him and boarded him in our vehicle then we brought
him to the hospital.
Alright, the Court will ask.
Q While you were travelling, were you able to talk to the victim
Q When did you talk with the victim? Januario Castillo?

A When we were inside the patrol car, your Honor. A Yes, sir.

Q What exactly did you ask from the victim? Q What was your conversation all about?

A I asked him who stabbed him, your Honor. A I asked Ka Maning Castillo as to who stabbed him and he
answered Jay-R and his uncle.
Q Did you tell the victim his condition?
x x x x29
A No, your Honor.
It is, therefore, clear from the foregoing that the evidence
Q You just asked the victim who stabbed him? presented to prove the robbery aspect of the special complex
crime of robbery with homicide, does not show that robbery
A Yes, your Honor. actually took place. The prosecution did not convincingly
establish the corpus delicti of the crime of robbery.
Q What was the answer of the victim?
Corpus delicti has been defined as the body or substance of the
A That he was stabbed by Jay-ar and his uncle, your Honor. crime and, in its primary sense, refers to the fact that a crime has
actually been committed. As applied to a particular offense, it
Q And no other question did you ask him? means the actual commission by someone of the particular crime
charged.30 In this case, the element of taking, as well as the
A None, your Honor. existence of the money alleged to have been lost and stolen by
appellant, was not adequately established.31 We find no
x x x x28 sufficient evidence to show either the amount of money stolen, or

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CASES ON EVIDENCE

if any amount was in fact stolen from Januario. Even if we death, testified to by PO1 Coronel and SPO3 Mendoza as dying
consider Januario’s dying declaration, the same pertains only to declaration and as part of res gestae.
the stabbing incident and not to the alleged robbery.
A dying declaration, although generally inadmissible as evidence
Moreover, assuming that robbery was indeed committed, the due to its hearsay character, may nonetheless be admitted when
prosecution must establish with certitude that the killing was a the following requisites concur, namely: (a) the declaration
mere incident to the robbery, the latter being the perpetrator’s concerns the cause and the surrounding circumstances of the
main purpose and objective. It is not enough to suppose that the declarant's death; (b) it is made when death appears to be
purpose of the author of the homicide was to rob; a mere imminent and the declarant is under a consciousness of
presumption of such fact is not sufficient.32 Stated in a different impending death; (c) the declarant would have been competent to
manner, a conviction requires certitude that the robbery is the testify had he or she survived; and (d) the dying declaration is
main purpose, and objective of the malefactor and the killing is offered in a case in which the subject of inquiry involves the
merely incidental to the robbery. The intent to rob must precede declarant's death.39
the taking of human life but the killing may occur before, during
or after the robbery.33 What is crucial for a conviction for the In the case at bar, it appears that not all the requisites of a dying
crime of robbery with homicide is for the prosecution to firmly declaration are present. From the records, no questions relative to
establish the offender’s intent to take personal property before the the second requisite was propounded to Januario. It does not
killing, regardless of the time when the homicide is actually appear that the declarant was under the consciousness of his
carried out.34 In this case, there was no showing of the impending death when he made the statements. The rule is that,
appellant’s intention, determined by their acts prior to, in order to make a dying declaration admissible, a fixed belief in
contemporaneous with, and subsequent to the commission of the inevitable and imminent death must be entered by the declarant.
crime, to commit robbery.35 No shred of evidence is on record It is the belief in impending death and not the rapid succession of
that could support the conclusion that appellant’s primary motive death in point of fact that renders a dying declaration admissible.
was to rob Januario and that he was able to accomplish it.36 The test is whether the declarant has abandoned all hopes of
Mere speculation and probabilities cannot substitute for proof survival and looked on death as certainly impending.40 Thus, the
required in establishing the guilt of an accused beyond utterances made by Januario could not be considered as a dying
reasonable doubt.37 Where the evidence does not conclusively declaration.
prove the robbery, the killing of Januario would be classified
either as a simple homicide or murder, depending upon the However, even if Januario’s utterances could not be appreciated
absence or presence of any qualifying circumstance, and not the as a dying declaration, his statements may still be appreciated as
crime of robbery with homicide.38 To establish the fact that part of the res gestae. Res gestae refers to the circumstances,
appellant and his co-accused killed the victim by stabbing him facts, and declarations that grow out of the main fact and serve to
with a bladed weapon, the prosecution presented Umali as an illustrate its character and are so spontaneous and
eyewitness to the mauling incident. It was this same witness who contemporaneous with the main fact as to exclude the idea of
identified the perpetrators. The trial and appellate courts also deliberation and fabrication. The test of admissibility of evidence
relied on the statement of Januario as to the circumstances of his as a part of the res gestae is, therefore, whether the act,
declaration, or exclamation, is so interwoven or connected with

336
CASES ON EVIDENCE

the principal fact or event that it characterizes as to be regarded any act of defense. Dr. Rasa, the medical doctor who attended to
as a part of the transaction itself, and also whether it clearly Januario when he was brought to the hospital, also testified as to
negates any premeditation or purpose to manufacture the nature and extent of the injury sustained by Januario. He
testimony.41 clearly stated that Januario sustained three fatal injuries which
caused his death. The pertinent portion of Dr. Rasa’s testimony
The requisites for admissibility of a declaration as part of the res reads:
gestae concur herein. When Januario gave the identity of the
assailants to SPO3 Mendoza, he was referring to a startling ATTY. MASANGYA:
occurrence which is the stabbing by appellant and his co-
accused. At that time, Januario and the witness were in the Q How many injuries were sustained by the victim, Mr. Witness?
vehicle that would bring him to the hospital, and thus, had no
time to contrive his identification of the assailant. His utterance A Three.
about appellant and his co-accused having stabbed him, in
answer to the question of SPO3 Mendoza, was made in Q In what parts of the body was the victim injured?
spontaneity and only in reaction to the startling occurrence.
Definitely, the statement is relevant because it identified the A The victim sustained three injuries: one on the left side of the
accused as the authors of the crime. Verily, the killing of parasternal border the heart (sic) and it penetrated, and then the
Januario, perpetrated by appellant, is adequately proven by the second one was on the right side of the chest near the shoulder
prosecution. and the third one was under the armpit also to the chest.

From the evidence presented, we find that as alleged in the ATTY. MASANGYA:
information, abuse of superior strength attended the commission
of the crime, and thus, qualifies the offense to murder. Abuse of Q Which of those injuries caused the death of the victim?
superior strength is considered whenever there is a notorious
inequality of forces between the victim and the aggressor, A All of them are fatal, because the one over the heart penetrated
assessing a superiority of strength notoriously advantageous for the heart and the aorta. The one in the anterior chest near the
the aggressor which the latter selected or took advantage of in the right shoulder hit the blood vessels of the armpit and the wound
commission of the crime.42 under the armpit apparently hit the lungs.

It is clear from the records of the case that Januario was then x x x x43
fifty-four (54) years old. Appellant, on the other hand, was then
forty (40) years old. Appellant committed the crime with his co- This same physician issued the Medical Certificate explaining the
accused, his nephew. Clearly, assailants are younger than the location of the stab wounds as well as the cause of death of
victim. These two accused were seen by Umali as the persons who Januario, to wit:
mauled Januario. Moreover, assailants were armed with a bladed
weapon, while Januario was unarmed. This same bladed weapon Location of Stab Wounds:
was used in repeatedly stabbing Januario, who no longer showed

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CASES ON EVIDENCE

1. Stab wound penetrating 2nd inter-costal space left para-sternal

border, 6" deep penetrating the heart chambers and aorta 1. With treachery, taking advantage of superior strength, with the
aid of armed men, or employing means to weaken the defense or
2. Stab wound over the right anterior deltoid muscle, penetrating of means or persons to insure or afford impunity.

3" into the right axilla space; injuring the axilla blood vessels. x x x x45

3. Stab wound over the right axilla, penetrating to the right chest There being neither mitigating nor aggravating circumstances,
cavity. appellant shall be meted the penalty of reclusion perpetua.

CAUSES OF DEATH Finally, the award of damages. In murder, the grant of civil
indemnity which has been fixed by jurisprudence at ₱50,000.00
Immediate Cause: Hypovolemic Shock requires no proof other than the fact of death as a result of the
crime and proof of the accused’s responsibility therefor. Moral
Antecedent Cause: Multiple stab wounds to the anterior chest, damages, on the other hand, which in this case is also
right ₱50,000.00 are awarded in view of the violent death of the
victim.46 Moreover, exemplary damages in the amount of
axilla, and right axilla penetrating the chest cavity. ₱30,000.00 should likewise be given, considering that the offense
was attended by an aggravating circumstance whether ordinary,
x x x x44 or qualifying as in this case. As duly proven by Maria Castillo,
actual damages representing the hospital and funeral expenses,
From the testimony of the eyewitness and corroborated by the as evidenced by receipts in the amount of ₱35,300.00, be
medical certificate of Dr. Rasa, it can be inferred that indeed the awarded. Finally, in addition and in conformity with current
qualifying circumstance of abuse of superior strength attended policy, we also impose on all the monetary awards for damages an
the commission of the crime. To be sure, with two assailants interest at the legal rate of six percent (6%) from date of finality of
younger than the victim, armed with a bladed weapon and this decision until full payment.47
inflicting multiple mortal wounds on the victim, there is definitely
abuse of superior strength deliberately taken advantage of by WHEREFORE, premises considered, we MODIFY the Court of
appellant and his co-accused in order to consummate the offense. Appeals Decision dated February 23, 2011 in CA-G.R. CR H.C.
No. 03593, affirming the Regional Trial Court Decision dated
Now on the penalty. Article 248 of the Revised Penal Code June 20, 2008 in Criminal Case No. 13838, convicting appellant
provides: Eduardo Quisayas of Robbery with Homicide. We find appellant
guilty beyond reasonable doubt of the crime of MURDER and is
ART. 248. Murder. – Any person who, not falling within the sentenced to suffer the penalty of reclusion perpetua.
provisions of article 246 shall kill another, shall be guilty of
murder and shall be punished by reclusion perpetua to death if We, likewise, ORDER appellant TO PAY the heirs of the victim
committed with any of the following attendant circumstances: Januario Castillo y Masangcay the following: (1) ₱35,300.00

338
CASES ON EVIDENCE

actual damages; (2) ₱50,000.00 civil indemnity; (3) ₱50,000.00 information only from the Japanese port authorities. Verily, the
moral damages; (4) ₱30,000.00 exemplary damages; plus (5) six messages can be characterized as double hearsay.
percent (6%) interest on all damages awarded from the date of the
finality of this decision until full payment. TINGA, J.:

SO ORDERED. This Petition for Certiorari1 under Rule 65 of the Rules of Court
seeks to annul the Decision2 and Resolution3 of the Court of
Appeals, dated 16 November 2005 and 2 February 2006,
respectively, which upheld the validity of the dismissal of Juanito
Talidano (petitioner). The challenged decision reversed and set
46. TALIDANO VS FALCOM MARITIME aside the Decision4 of the National Labor Relations Commission
(NLRC) and reinstated that of the Labor Arbiter.5
Evidence; Hearsay Rule; Res Gestae; Kinds of Res Gestae.—
Section 42 of Rule 130 of the Rules of Court mentions two acts Petitioner was employed as a second marine officer by Falcon
which form part of the res gestae, namely: spontaneous Maritime and Allied Services, Inc. (private respondent) and was
statements and verbal acts. In spontaneous exclamations, the res assigned to M/V Phoenix Seven, a vessel owned and operated by
gestae is the startling occurrence, whereas in verbal acts, the res Hansu Corporation (Hansu) which is based in Korea. His one (1)-
gestae are the statements accompanying the equivocal act. We year contract of employment commenced on 15 October 1996 and
find that the fax messages cannot be deemed part of the res stipulated the monthly wage at $900.00 with a fixed overtime pay
gestae. To be admissible under the first class of res gestae, it is of $270.00 and leave pay of $75.00.6
required that: (1) the principal act be a startling occurrence; (2)
the statements were made before the declarant had the time to Petitioner claimed that his chief officer, a Korean, always
contrive or devise a falsehood; and (3) that the statements must discriminated against and maltreated the vessel’s Filipino crew.
concern the occurrence in question and its immediate attending This prompted him to send a letter-complaint to the officer-in-
circumstances. Neither will the second kind of res gestae apply. charge of the International Transport Federation (ITF) in London,
The requisites for its admissibility are: (1) the principal act to be a measure that allegedly was resented by the chief officer.
characterized must be equivocal; (2) the equivocal act must be Consequently, petitioner was dismissed on 21 January 1997. He
material to the issue; (3) the statement must accompany the filed a complaint for illegal dismissal on 27 October 1999.7
equivocal act; and (4) the statements give a legal significance to
the equivocal act. Private respondent countered that petitioner had voluntarily
disembarked the vessel after having been warned several times of
Same; Same; When the author of the fax messages did not dismissal from service for his incompetence, insubordination,
witness the incident relayed in the same, the messages can be disrespect and insulting attitude toward his superiors. It cited an
characterized as double hearsay.—The material contents of the incident involving petitioner’s incompetence wherein the vessel
fax messages are unclear. The matter of route encroachment or invaded a different route at the Osaka Port in Japan due to the
invasion is questionable. The ship master, who is the author of absence of petitioner who was then supposed to be on watch
the fax messages, did not witness the incident. He obtained such duty. As proof, it presented a copy of a fax message, sent to it on

339
CASES ON EVIDENCE

the date of incident, reporting the vessel’s deviation from its other route, the safety of the vessel, her crew and cargo may be
course due to petitioner’s neglect of duty at the bridge,8 as well as endangered. She could have collided with other vessels because of
a copy of the report of crew discharge issued by the master of complainant’s failure to render watch duty.11
M/V Phoenix Seven two days after the incident.9
On appeal, the NLRC reversed the ruling of the Labor Arbiter and
Private respondent stated that since petitioner lodged the declared the dismissal as illegal. The dispositive portion of the
complaint before the Labor Arbiter two (2) years and nine (9) NLRC’s decision reads:
months after his repatriation, prescription had already set in by
virtue of Revised POEA Memorandum Circular No. 55, series of WHEREFORE, premises considered, the decision appealed from is
1996 which provides for a one-year prescriptive period for the hereby reversed and set aside and a new one entered declaring
institution of seafarers’ claims arising from employment the dismissal of the complainant as illegal. Respondents Falcon
contract.10 Maritime & Allied Services, Inc. and Hansu Corporation are
hereby ordered to jointly and severally pay complainant the
On 5 November 2001, the Labor Arbiter rendered judgment amount equivalent to his three (3) months salary as a result
dismissing petitioner’s complaint, holding that he was validly thereof.12
dismissed for gross neglect of duties. The Labor Arbiter relied on
the fax messages presented by private respondent to prove The NLRC held that the fax messages in support of the alleged
petitioner’s neglect of his duties, thus: misbehavior and neglect of duty by petitioner have no probative
value and are self-serving. It added that the ship’s logbook should
x x x The fax message said that the Master of M/V Phoenix Seven have been submitted in evidence as it is the repository of all the
received an emergency warning call from Japan Sisan Sebo Naika activities on board the vessel, especially those affecting the
Radio Authority calling attention to the Master of the vessel M/V performance or attitude of the officers and crew members, and,
Phoenix Seven that his vessel is invading other route [sic]. When more importantly, the procedures preparatory to the discharge of
the Master checked the Bridge, he found out that the Second a crew member. The NLRC also noted that private respondent
Officer (complainant) did not carry out his duty wathch. There failed to comply with due process in terminating petitioner’s
was a confrontation between the Master and the Complainant but employment.13
the latter insisted that he was right. The argument of the
Complainant asserting that he was right cannot be sustained by Private respondent moved for reconsideration,14 claiming that the
this Arbitration Branch. The fact that there was an emergency complaint was filed beyond the one-year prescriptive period. The
call from the Japanese port authority that M/V Phoenix Seven NLRC, however, denied reconsideration in a Resolution dated 30
was invading other route simply means that Complainant August 2002.15 Rejecting the argument that the complaint had
neglected his duty. The fax message stating that Complainant already prescribed, it ruled:
was not at the bridge at the time of the emergency call was
likewise not denied nor refuted by the Complainant. Under our Records show that respondent in this case had filed a motion to
jurisprudence, any material allegation and/or document which is dismiss on the ground of prescription before the Labor Arbiter a
not denied specifically is deemed admitted. If not of the timely call quo who denied the same in an Order dated August 1, 2000.
[sic] from the port authority that M/V Phoenix Seven invaded Such an Order being unappealable, the said issue of prescription

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CASES ON EVIDENCE

cannot be raised anew specially in a motion for reconsideration. shopping but also the principle of res judicata. He highlighted the
(Citations omitted)16 fact that the decision subject of the second petition before the
Court of Appeals had twice become final and executory, with
It appears that respondent received a copy of the NLRC entries of judgment made first by the NLRC and then by the
Resolution17 on 24 September 2002 and that said resolution Court of Appeals.
became final and executory on 7 October 2002.18
The appellate court ultimately settled the issue of prescription,
Private respondent brought the case to the Court of Appeals via a categorically declaring that the one-year prescriptive period
Petition for Certiorari19 on 8 October 2002. The petition, applies only to employment contracts entered into as of 1
docketed as CA-G.R. Sp. No. 73521, was dismissed on January 1997 and not those entered prior thereto, thus:
technicality in a Resolution dated 29 October 2002. The pertinent
portion of the resolution reads: x x x The question of prescription is untenable. Admittedly, POEA
Memorandum Circular [No.] 55 prescribing the standard terms of
(1) [T]he VERIFICATION AND CERTIFICATION OF NON-FORUM an employment contract of a seafarer was in effect when the
SHOPPING was signed by one Florida Z. Jose, President of respondent was repatriated on January 21, 1997. This
petitioner Falcon Maritime and Allied Services, Inc., without proof administrative issuance was released in accordance with
that she is the duly authorized representative of petitioner- Department Order [No.] 33 of the Secretary of Labor directing the
corporation; revision of the existing Standard Employment Contract to be
effective by January 1, 1997. Section 28 of this revised contract
(2) [T]here is no affidavit of service of the petition to the National states: all claims arising therefrom shall be made within one year
Labor Relations Commission and to the adverse party; from the date of the seafarer’s return to the point of hire.

(3) [T]here is no explanation to justify service by mail in lieu of the It is crystal clear that the one-year period of prescription of claims
required personal service. (Citations omitted)20 in the revised standard contract applies only to employment
contracts entered into as of January 1, 1997. If there is still any
An entry of judgment was issued by the clerk of court on 23 doubt about this, it should be removed by the provision of
November 2002 stating that the 29 October 2002 Resolution had Circular [No.] 55 which says that the new schedule of benefits to
already become final and executory.21 Meanwhile, on 12 be embodied in the standard contract will apply to any Filipino
November 2002, private respondent filed another petition before seafarer that will be deployed on or after the effectivity of the
the Court of Appeals,22 docketed as CA G.R. SP No. 73790. This circular.
is the subject of the present petition.
The respondent was deployed before January 1, 1997. As
Petitioner dispensed with the filing of a comment.23 In his acknowledged by the petitioners, the rule prior to Circular [No.]
Memorandum,24 however, he argued that an entry of judgment 55 provided for a prescriptive period of three years. We cannot
having been issued in CA-G.R. SP No. 73521, the filing of the avoid the ineluctable conclusion that the claim of the respondent
second petition hinging on the same cause of action after the first was filed within the prescriptive period.25
petition had been dismissed violates not only the rule on forum

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CASES ON EVIDENCE

Despite ruling that prescription had not set in, the appellate court The respondent’s two arguments essay on certain developments
nonetheless declared petitioner’s dismissal from employment as in the case after the NLRC rendered its decision. He points out
valid and reinstated the Labor Arbiter’s decision. with alacrity that an entry of judgment was issued twice – first by
the NLRC with respect to its decision and then by the Ninth
The appellate court relied on the fax messages issued by the ship Division of the Court of Appeals after it dismissed on technical
master shortly after petitioner had committed a serious neglect of grounds the first petition for certiorari filed by the petitioner.
his duties. It noted that the said fax messages constitute the res Neither event, for sure, militates against the institution of a
gestae. In defending the non-presentation of the logbook, it stated second petition for certiorari. A decision of the NLRC is never final
that three years had already passed since the incident and Hansu for as long as it is the subject of a petition for certiorari that is
was no longer the principal of private respondent. pending with a superior court. A contrary view only demeans our
certiorari jurisdiction and will never gain currency under our
Petitioner’s motion for reconsideration was denied. Hence he filed system of appellate court review. It is more to the point to ask if a
this instant petition. second petition can stand after the first is dismissed, but under
the particular circumstances in which the second was brought,
Citing grave abuse of discretion on the part of the Court of we hold that it can. The theory of res judicata invoked by the
Appeals, petitioner reiterates his argument that the appellate respondent to bar the filing of the second petition does not apply.
court should not have accepted the second petition in view of the The judgment or final resolution in the first petition must be on
fact that a corresponding entry of judgment already has been the merits for res judicata to inhere, and it will not be on the
issued. By filing the second petition, petitioner believes that merits if it is founded on a consideration of only technical or
private respondent has engaged in forum shopping.26 collateral points. Yet this was exactly how the first petition was
disposed of. SP 73521 was dismissed as a result of the failure of
Private respondent, for its part, defends the appellate court in the petitioner to comply with the procedural requirements of a
taking cognizance of the second petition by stressing that there is petition for certiorari. The case never touched base. There was no
no law, rule or decision that prohibits the filing of a new petition occasion for the determination of the substantive rights of the
for certiorari within the reglementary period after the dismissal of parties and, in this sense, the merits of the case were not
the first petition due to technicality.27 It rebuts petitioner’s involved. The petitioner had actually the option of either refilling
charge of forum shopping by pointing out that the dismissal of [sic] the case or seeking reconsideration in the original action. It
the first petition due to technicality has not ripened into res chose to file SP 73790 after realizing that it still had enough time
judicata, which is an essential element of forum shopping.28 left of the original period of 60 days under Rule 65 to do so.

In determining whether a party has violated the rule against Since the dismissal of the first petition did not ripen into res
forum shopping, the test to be applied is whether the elements of judicata, it may not be said that there was forum shopping with
litis pendentia are present or whether a final judgment in one the filing of the second. The accepted test for determining whether
case will amount to res judicata in the other.29 This issue has a party violated the rule against forum shopping insofar as it is
been thoroughly and extensively discussed and correctly resolved applicable to this setting is whether the judgment or final
by the Court of Appeals in this wise: resolution in the first case amounts to res judicata in the second.
Res judicata is central to the idea of forum shopping. Without it,

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CASES ON EVIDENCE

forum shopping is non-existent. The dismissal of the first petition,

moreover, if it does not amount to res judicata, need not be Private respondent insists that the appellate court is correct in
mentioned in the certification of non-forum shopping considering the fax messages as res gestae statements. It likewise
accompanying the second action. The omission will not be fatal to emphasizes that non-presentment of the logbook is justified as
the viability of the second case. (Citations omitted)30 the same could no longer be retrieved because Hansu has already
ceased to be its principal. Furthermore, it refutes the allegation of
Private respondent, in turn, questions the propriety of the instant petitioner that he was dismissed because he filed a complaint
certiorari petition and avers that the issues raised by petitioner with the ITF in behalf of his fellow crew members. It claims that
can only be dealt with under Rule 45 of the Rules of Court.31 petitioner’s allegation is a hoax because there is no showing that
Against this thesis, petitioner submits that the acceptance of the the alleged complaint has been received by the ITF and that no
petition is addressed to the sound discretion of this Court.32 action thereon was ever taken by the ITF.35

The proper remedy to assail decisions of the Court of Appeals Private respondent also asserts that petitioner was not dismissed
involving final disposition of a case is through a petition for review but that he voluntarily asked for his repatriation. This assertion,
under Rule 45. In this case, petitioner filed instead a certiorari however, deserves scant consideration. It is highly illogical for an
petition under Rule 65. Notwithstanding this procedural lapse, employee to voluntarily request for repatriation and then file a
this Court resolves to rule on the merits of the petition in the suit for illegal dismissal. As voluntary repatriation is synonymous
interest of substantial justice,33 the underlying consideration in to resignation, it is proper to conclude that repatriation is
this petition being the arbitrary dismissal of petitioner from inconsistent with the filing of a complaint for illegal dismissal.36
employment.
The paramount issue therefore boils down to the validity of
Petitioner submits that the Court of Appeals erred in relying petitioner’s dismissal, the determination of which generally
merely on fax messages to support the validity of his dismissal involves a question of fact. It is not the function of this Court to
from employment. He maintains that the first fax message assess and evaluate the facts and the evidence again, our
containing the information that the vessel encroached on a jurisdiction being generally limited to reviewing errors of law that
different route was a mere personal observation of the ship might have been committed by the trial court or administrative
master and should have thus been corroborated by evidence, and agency. Nevertheless, since the factual findings of the Court of
that these fax messages cannot be considered as res gestae Appeals and the Labor Arbiter are at variance with those of the
because the statement of the ship master embodied therein is just NLRC, we resolve to evaluate the records and the evidence
a report. He also contends that he has not caused any immediate presented by the parties.37
danger to the vessel and that if he did commit any wrongdoing,
the incident would have been recorded in the logbook. Thus, he The validity of an employee's dismissal hinges on the satisfaction
posits that the failure to produce the logbook reinforces the of two substantive requirements, to wit: (1) the dismissal must be
theory that the fax messages have been concocted to justify his for any of the causes provided for in Article 282 of the Labor
unceremonious dismissal from employment. Hence, he believes Code; and (2) the employee was accorded due process, basic of
that his dismissal from employment stemmed from his filing of which is the opportunity to be heard and to defend himself.38
the complaint with the ITF which his superiors resented.34

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CASES ON EVIDENCE

The Labor Arbiter held that petitioner’s absence during his watch these fax messages as part of the res gestae proving neglect of
duty when an emergency call was received from the Japanese duty on the part of petitioner.
port authority that M/V Phoenix Seven was "invading other route"
constituted neglect of duty, a just cause for terminating an Section 42 of Rule 13040 of the Rules of Court mentions two acts
employee. Records reveal that this information was related to which form part of the res gestae, namely: spontaneous
private respondent via two fax messages sent by the captain of statements and verbal acts. In spontaneous exclamations, the res
M/V Phoenix Seven. The first fax message dated 18 January 1997 gestae is the startling occurrence, whereas in verbal acts, the res
is reproduced below: gestae are the statements accompanying the equivocal act.41 We
find that the fax messages cannot be deemed part of the res
JUST RECEIVED PHONE CALL FROM MASTER N C/OFFICER gestae.
THAT THEY DECIDED TO DISCHARGE 2/OFFICER AT OSAKA
PORT. To be admissible under the first class of res gestae, it is required
that: (1) the principal act be a startling occurrence; (2) the
DUE TO MIS-BEHAVIOUR N RESEST [SIC] TO OFFICIAL ORDER. statements were made before the declarant had the time to
contrive or devise a falsehood; and (3) that the statements must
CAPT. HAD RECEIVED EMERGENCY WARNING CALL FROM concern the occurrence in question and its immediate attending
JAPAN BISAN SETO NAIKAI RADIO AUTHORITY THAT SHIP IS circumstances.42
INVADING OTHER ROUTE.
Assuming that petitioner’s negligence—which allegedly caused the
SO, HE WAS SURPRISED N CAME TO BRIDGE N FOUND 2/O ship to deviate from its course—is the startling occurrence, there
NOT CARRY OUT HIS WATCH DUTY. is no showing that the statements contained in the fax messages
were made immediately after the alleged incident. In addition, no
MASTER SCOLD HIM ABOUT THIS N CORRECT HIS ERROR BUT dates have been mentioned to determine if these utterances were
HE RESIST [SIC] THAT HE IS RIGHT AND THEN SAID THAT HE made spontaneously or with careful deliberation. Absent the
WILL COME BACK HOME. critical element of spontaneity, the fax messages cannot be
admitted as part of the res gestae of the first kind.
FURTHER MORE HE ASKED MASTER TO PAY HIM I.T.F. WAGE
SCALE. Neither will the second kind of res gestae apply. The requisites for
its admissibility are: (1) the principal act to be characterized must
MASTER N/CIO STRONGLY ASKED US HIS REPATRIATION be equivocal; (2) the equivocal act must be material to the issue;
WITH I.E.U. (3) the statement must accompany the equivocal act; and (4) the
statements give a legal significance to the equivocal act.43
PLS. CONFIRM YOUR OPINION ON THIS HAPPENING.39
Petitioner’s alleged absence from watch duty is simply an
The second fax message dated 20 January 1997 pertained to a innocuous act or at least proved to be one. Assuming arguendo
report of crew discharge essentially containing the same that such absence was the equivocal act, it is nevertheless not
information as the first fax message. The Court of Appeals treated accompanied by any statement more so by the fax statements

344
CASES ON EVIDENCE

adverted to as parts of the res gestae. No date or time has been In Haverton Shipping Ltd. v. NLRC,46 the Court held that the
mentioned to determine whether the fax messages were made vessel’s logbook is an official record of entries made by a person
simultaneously with the purported equivocal act. in the performance of a duty required by law.47 In Abacast
Shipping and Management Agency, Inc. v. NLRC,48 a case cited
Furthermore, the material contents of the fax messages are by petitioner, the logbook is a respectable record that can be
unclear. The matter of route encroachment or invasion is relied upon to authenticate the charges filed and the procedure
questionable. The ship master, who is the author of the fax taken against the employees prior to their dismissal.49 In Wallem
messages, did not witness the incident. He obtained such Maritime Services, Inc. v. NLRC,50 the logbook is a vital evidence
information only from the Japanese port authorities. Verily, the as Article 612 of the Code of Commerce requires the ship captain
messages can be characterized as double hearsay. to keep a record of the decisions he had adopted as the vessel's
head.51 Therefore, the non-presentation of the logbook raises
In any event, under Article 282 of the Labor Code,44 an employer serious doubts as to whether the incident did happen at all.
may terminate an employee for gross and habitual neglect of
duties. Neglect of duty, to be a ground for dismissal, must be both In termination cases, the burden of proving just or valid cause for
gross and habitual. Gross negligence connotes want of care in the dismissing an employee rests on the employer.52 Private
performance of one’s duties. Habitual neglect implies repeated respondent miserably failed to discharge this burden.
failure to perform one’s duties for a period of time, depending Consequently, the petitioner’s dismissal is illegal.
upon the circumstances. A single or isolated act of negligence
does not constitute a just cause for the dismissal of the We also note that private respondent failed to comply with the
employee.45 procedural due process requirement for terminating an employee.
Such requirement is not a mere formality that may be dispensed
Petitioner’s supposed absence from watch duty in a single with at will. Its disregard is a matter of serious concern since it
isolated instance is neither gross nor habitual negligence. constitutes a safeguard of the highest order in response to man's
Without question, the alleged lapse did not result in any innate sense of justice. The Labor Code does not, of course,
untoward incident. If there was any serious aftermath, the require a formal or trial type proceeding before an erring employee
incident should have been recorded in the ship’s logbook and may be dismissed. This is especially true in the case of a vessel
presented by private respondent to substantiate its claim. on the ocean or in a foreign port. The minimum requirement of
Instead, private respondent belittled the probative value of the due process in termination proceedings, which must be complied
logbook and dismissed it as self-serving. Quite the contrary, the with even with respect to seamen on board a vessel, consists of
ship’s logbook is the repository of all activities and transactions notice to the employees intended to be dismissed and the grant to
on board a vessel. Had the route invasion been so serious as to them of an opportunity to present their own side of the alleged
merit petitioner’s dismissal, then it would have been recorded in offense or misconduct, which led to the management's decision to
the logbook. Private respondent would have then had all the more terminate. To meet the requirements of due process, the employer
reason to preserve it considering that vital pieces of information must furnish the worker sought to be dismissed with two written
are contained therein. notices before termination of employment can be legally effected,
i.e., (1) a notice which apprises the employee of the particular
acts or omissions for which his dismissal is sought; and (2) the

345
CASES ON EVIDENCE

subsequent notice after due hearing which informs the employee

of the employer’s decision to dismiss him.531avvphi1

Private respondent’s sole reliance on the fax messages in

dismissing petitioner is clearly insufficient as these messages
were addressed only to itself. No notice was ever given to
petitioner apprising him in writing of the particular acts showing
neglect of duty. Neither was he informed of his dismissal from
employment. Petitioner was never given an opportunity to present
his side. The failure to comply with the two-notice rule only
aggravated respondent’s liability on top of dismissing petitioner
without a valid cause.

Pursuant to Section 10 of Republic Act No. 804254 or the Migrant

Worker’s Act, employees who are unjustly dismissed from work
are entitled to an amount representing their three (3) months’
salary considering that their employment contract has a term of
exactly one (1) year plus a full refund of his placement fee, with
interest at 12% per annum.55

IN LIGHT OF THE FOREGOING, the petition is GRANTED. The

Decision of the Court of Appeals is REVERSED and SET ASIDE.
The Decision of the NLRC is REINSTATED with the
MODIFICATION that in addition to the payment of the sum
equivalent to petitioner’s three (3) months’ salary, the full amount
of placement fee with 12% legal interest must be refunded.

SO ORDERED.

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CASES ON EVIDENCE

SANDOVAL-GUTIERREZ, J.:

Before us is a petition for review on certiorari1 assailing the

Decision2 of the Court of Appeals dated May 31, 2000 in CA-G.R.
SP No. 56154, entitled "Susan Ramirez, petitioner, versus, Hon.
Benjamin M. Aquino, Jr., as Judge RTC, Malabon, MM, Br. 72,
and Maximo Alvarez, respondents."

Susan Ramirez, herein respondent, is the complaining witness in

Criminal Case No. 19933-MN for arson3 pending before the
Regional Trial Court, Branch 72, Malabon City. The accused is
Maximo Alvarez, herein petitioner. He is the husband of
Esperanza G. Alvarez, sister of respondent.
47. ALVAREZ VS RAMIREZ
On June 21, 1999, the private prosecutor called Esperanza
Remedial Law; Evidence; Witnesses; Words and Phrases; Marital Alvarez to the witness stand as the first witness against
Disqualification; During their marriage, neither the husband nor petitioner, her husband. Petitioner and his counsel raised no
the wife may testify for or against the other without the consent of objection.
the affected spouse, except in a civil case by one against the
other, or in a criminal case for a crime committed by one against Esperanza testified as follows:
the other or the latter’s direct descendants or ascendants.—
Section 22, Rule 130 of the Revised Rules of Court provides: “Sec. "ATTY. ALCANTARA:
22. Disqualification by reason of marriage.—During their
marriage, neither the husband nor the wife may testify for or We are calling Mrs. Esperanza Alvarez, the wife of the accused,
against the other without the consent of the affected spouse, Your Honor.
except in a civil case by one against the other, or in a criminal
case for a crime committed by one against the other or the latter’s COURT:
direct descendants or ascendants.” The reasons given for the rule
are: 1. There is identity of interests between husband and wife; 2. Swear in the witness.
If one were to testify for or against the other, there is consequent
danger of perjury; 3. The policy of the law is to guard the security xxx
and confidences of private life, even at the risk of an occasional
failure of justice, and to prevent domestic disunion and ATTY. MESIAH: (sic)
unhappiness; and 4. Where there is want of domestic tranquility
there is danger of punishing one spouse through the hostile Your Honor, we are offering the testimony of this witness for the
testimony of the other. purpose of proving that the accused Maximo Alvarez committed
all the elements of the crime being charged particularly that

347
CASES ON EVIDENCE

accused Maximo Alvarez pour on May 29, 1998 gasoline in the

house located at Blk. 5, Lot 9, Phase 1-C, Dagat-dagatan, Q: If that Maximo Alvarez you were able to see, can you identify
Navotas, Metro Manila, the house owned by his sister-in-law him?
Susan Ramirez; that accused Maximo Alvarez after pouring the
gasoline on the door of the house of Susan Ramirez ignited and A: Yes, sir.
set it on fire; that the accused at the time he successfully set the
house on fire (sic) of Susan Ramirez knew that it was occupied by Q: If you can see him inside the Court room, can you please point
Susan Ramirez, the members of the family as well as Esperanza him?
Alvarez, the estranged wife of the accused; that as a consequence
of the accused in successfully setting the fire to the house of A: Witness pointing to a person and when asked to stand and
Susan Ramirez, the door of said house was burned and together asked his name, he gave his name as Maximo Alvarez."4
with several articles of the house, including shoes, chairs and
others. In the course of Esperanza’s direct testimony against petitioner,
the latter showed "uncontrolled emotions," prompting the trial
COURT: judge to suspend the proceedings.

You may proceed. On June 30, 1999, petitioner, through counsel, filed a motion5 to
disqualify Esperanza from testifying against him pursuant to Rule
xxx 130 of the Revised Rules of Court on marital disqualification.

DIRECT EXAMINATION Respondent filed an opposition6 to the motion. Pending resolution

of the motion, the trial court directed the prosecution to proceed
ATTY. ALCANTARA: with the presentation of the other witnesses.

xxx On September 2, 1999, the trial court issued the questioned

Order disqualifying Esperanza Alvarez from further testifying and
Q: When you were able to find the source, incidentally what was deleting her testimony from the records.7 The prosecution filed a
the source of that scent? motion for reconsideration but was denied in the other assailed
Order dated October 19, 1999.8
A: When I stand by the window, sir, I saw a man pouring the
gasoline in the house of my sister (and witness pointing to the This prompted respondent Susan Ramirez, the complaining
person of the accused inside the court room). witness in Criminal Case No. 19933-MN, to file with the Court of
Appeals a petition for certiorari9 with application for preliminary
Q: For the record, Mrs. Witness, can you state the name of that injunction and temporary restraining order.10
person, if you know?

A: He is my husband, sir, Maximo Alvarez.

348
CASES ON EVIDENCE

On May 31, 2000, the Appellate Court rendered a Decision reasons which, in the excepted cases, outweigh those in support
nullifying and setting aside the assailed Orders issued by the trial of the general rule. For instance, where the marital and domestic
court. relations are so strained that there is no more harmony to be
preserved nor peace and tranquility which may be disturbed, the
Hence, this petition for review on certiorari. reason based upon such harmony and tranquility fails. In such a
case, identity of interests disappears and the consequent danger
The issue for our resolution is whether Esperanza Alvarez can of perjury based on that identity is non-existent. Likewise, in
testify against her husband in Criminal Case No. 19933-MN. such a situation, the security and confidences of private life,
which the law aims at protecting, will be nothing but ideals,
Section 22, Rule 130 of the Revised Rules of Court provides: which through their absence, merely leave a void in the unhappy
home.12
"Sec. 22. Disqualification by reason of marriage. – During their
marriage, neither the husband nor the wife may testify for or In Ordoño vs. Daquigan,13 this Court held:
against the other without the consent of the affected spouse,
except in a civil case by one against the other, or in a criminal "We think that the correct rule, which may be adopted in this
case for a crime committed by one against the other or the latter’s jurisdiction, is that laid down in Cargil vs. State, 35 ALR 133, 220
direct descendants or ascendants." Pac. 64, 25 Okl. 314, wherein the court said:

The reasons given for the rule are: ‘The rule that the injury must amount to a physical wrong upon
the person is too narrow; and the rule that any offense remotely
1. There is identity of interests between husband and wife; or indirectly affecting domestic harmony comes within the
exception is too broad. The better rule is that, when an offense
2. If one were to testify for or against the other, there is directly attacks, or directly and vitally impairs, the conjugal
consequent danger of perjury; relation, it comes within the exception to the statute that one
shall not be a witness against the other except in a criminal
3. The policy of the law is to guard the security and confidences of prosecution for a crime committee (by) one against the other.’"
private life, even at the risk of an occasional failure of justice, and
to prevent domestic disunion and unhappiness; and Obviously, the offense of arson attributed to petitioner, directly
impairs the conjugal relation between him and his wife
4. Where there is want of domestic tranquility there is danger of Esperanza. His act, as embodied in the Information for arson filed
punishing one spouse through the hostile testimony of the against him, eradicates all the major aspects of marital life such
other.11 as trust, confidence, respect and love by which virtues the
conjugal relationship survives and flourishes.
But like all other general rules, the marital disqualification rule
has its own exceptions, both in civil actions between the spouses As correctly observed by the Court of Appeals:
and in criminal cases for offenses committed by one against the
other. Like the rule itself, the exceptions are backed by sound

349
CASES ON EVIDENCE

"The act of private respondent in setting fire to the house of his SO ORDERED.
sister-in-law Susan Ramirez, knowing fully well that his wife was
there, and in fact with the alleged intent of injuring the latter, is
an act totally alien to the harmony and confidences of marital
relation which the disqualification primarily seeks to protect. The
criminal act complained of had the effect of directly and vitally
impairing the conjugal relation. It underscored the fact that the
marital and domestic relations between her and the accused-
husband have become so strained that there is no more harmony,
peace or tranquility to be preserved. The Supreme Court has held
that in such a case, identity is non-existent. In such a situation,
the security and confidences of private life which the law aims to
protect are nothing but ideals which through their absence,
merely leave a void in the unhappy home. (People v. Castañeda,
271 SCRA 504). Thus, there is no longer any reason to apply the
Marital Disqualification Rule."

It should be stressed that as shown by the records, prior to the

commission of the offense, the relationship between petitioner
and his wife was already strained. In fact, they were separated de
facto almost six months before the incident. Indeed, the evidence
and facts presented reveal that the preservation of the marriage
between petitioner and Esperanza is no longer an interest the
State aims to protect.

At this point, it bears emphasis that the State, being interested in

laying the truth before the courts so that the guilty may be
punished and the innocent exonerated, must have the right to
offer the direct testimony of Esperanza, even against the objection
of the accused, because (as stated by this Court in Francisco14),
"it was the latter himself who gave rise to its necessity."

WHEREFORE, the Decision of the Court of Appeals is AFFIRMED.

The trial court, RTC, Branch 72, Malabon City, is ordered to allow
Esperanza Alvarez to testify against petitioner, her husband, in
Criminal Case No. 19933-MN. Costs against petitioner.

350
CASES ON EVIDENCE

admissible in evidence against his co-accused when the latter had

not been given an opportunity to hear him testify and cross-
examine him.

Same; Same; Witnesses; Marital Disqualification Rule; Murder;

Under the marital disqualification rule, the disqualification is
between husband and wife, the law not precluding the wife from
testifying when it involves other parties or accused.—With regard
to Gina Quidato’s testimony, the same must also be disregarded,
accused-appellant having timely objected thereto under the
marital disqualification rule. As correctly observed by the court a
quo, the disqualification is between husband and wife, the law
not precluding the wife from testifying when it involves other
parties or accused. Hence, Gina Quidato could testify in the
murder case against Reynaldo and Eddie, which was jointly tried
with accused-appellant’s case. This testimony cannot, however,
be used against accused-appellant directly or through the guise of
taking judicial notice of the proceedings in the murder case
without violating the marital disqualification rule. “What cannot
be done directly cannot be done indirectly” is a rule familiar even
to law students.
48. PEOPLE VS QUIDATO JR
Same; Same; Same; Suspicion, no matter how strong, should not
Criminal Law; Evidence; Extrajudicial Confessions; Witnesses; sway judgment, it being an accepted axiom that the prosecution
Hearsay Rule; Affidavits; It is hornbook doctrine that unless the cannot rely on the weakness of the defense to gain a conviction,
affiants themselves take the witness stand to affirm the but must establish beyond reasonable doubt every circumstance
averments in their affidavits, the affidavits must be excluded from essential to the guilt of the accused.—Given the inadmissibility in
the judicial proceeding, being inadmissible hearsay.—In indicting evidence of Gina Quidato’s testimony, as well as of Reynaldo and
accused-appellant, the prosecution relied heavily on the affidavits Eddie’s extrajudicial confessions, nothing remains on record with
executed by Reynaldo and Eddie. The two brothers were, however, which to justify a judgment unfavorable to accused-appellant.
not presented on the witness stand to testify on their extra- Admittedly, accused-appellant’s defense, to put it mildly, is
judicial confessions. The failure to present the two gives these dubious. His alleged acquiescence to the demand of the Malita
affidavits the character of hearsay. It is hornbook doctrine that brothers to accompany them to his father’s house on the strength
unless the affiants themselves take the witness stand to affirm of the latter’s verbal threats, his incredulous escape from the
the averments in their affidavits, the affidavits must be excluded clutches of the two, his inexplicable failure to return home
from the judicial proceeding, being inadmissible hearsay. The immediately, his failure to seek assistance from the authorities,
voluntary admissions of an accused made extrajudicially are not the fact that Eddie stayed with him immediately after the

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incident, and the nine-day lacuna between the killing and his Accused-appellant's case was tried jointly with the murder case
pointing to the Malita brothers as the culprits, all suggest a filed against his co-accused Reynaldo Malita and Eddie Malita
complicity more than that of an unwilling participant. Yet, who, however, withdrew their "not guilty" plea during the trial and
suspicion, no matter how strong, should not sway judgment, it were accordingly sentenced. Thus, only accused-appellant's case
being an accepted axiom that the prosecution cannot rely on the was tried on the merits.
weakness of the defense to gain a conviction, but must establish
beyond reasonable doubt every circumstance essential to the guilt The prosecution, in offering its version of the facts, presented as
of the accused. This the prosecution has failed to demonstrate. its witnesses accused-appellant's brother Leo Quidato, appellant's
wife Gina Quidato, as well as Patrolman Lucrecio Mara. Likewise,
ROMERO, J.: the prosecution offered in evidence affidavits containing the extra-
judicial confessions of Eddie Malita and Reynaldo Malita. The two
Before us is an appeal from the judgment of the Regional Trial brothers were, however, not presented by the prosecution on the
Court of Davao, Branch 4, dated March 2, 1994, finding accused- witness stand. Instead, it presented Atty. Jonathan Jocom to
appellant Bernardo Quidato, Jr. guilty of the crime of parricide. prove that the two were assisted by counsel when they made their
confessions. Similarly, the prosecution presented MTC Judge
On January 17, 1989, accused-appellant was charged with the George Omelio who attested to the due and voluntary execution of
crime of parricide before the Regional Trial Court of Davao. The the sworn statements by the Malita brothers.
information reads as follows:
Based on the foregoing pieces of evidence, the prosecution's
The undersigned accuses BERNARDO QUIDATO, JR. of the crime version of the facts is as follows:
of Parricide under Article 246 of the Revised Penal Code,
committed as follows: Bernardo Quidato, Sr. was the father of accused-appellant
Bernardo Quidato, Jr. and Leo Quidato. Being a widower,
That on or about September 17, 1988, in the Municipality of Bernardo lived alone in his house at Sitio Libod, Brgy. Tagbaobo,
Kaputian, Province of Davao, Philippines, and within the Kaputian, Davao. He owned sixteen hectares of coconut land in
jurisdiction of this Honorable Court, the above-named accused, the area.
conspiring, confederating and mutually helping with Reynaldo
Malita and Eddie Malita, who are charged for (sic) Murder in a On September 16, 1988, Bernardo, accompanied by his son,
separate information, did then and there wilfully, unlawfully and herein accused-appellant, and two hired hands, Reynaldo Malita
criminally, with the use of a bolo and an iron bar, assault, hack and Eddie Malita, went to Davao City to sell 41 sacks of copra.
and stab his father, Bernardo Quidato, Sr., on the different parts After selling the copra, Bernardo paid the Malita brothers for their
of his body, thereby inflicting upon him wounds which caused his labor, who thereafter left. Bernardo and accused-appellant went
death, and further causing actual, moral and compensatory back to Sitio Libod that same day.2
damage to the heirs of the victim.
According to Gina Quidato, on the evening of the next day,
Contrary to law. 1 September 17, 1988, accused-appellant and the Malita brothers
were drinking tuba at their house. She overheard the trio

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CASES ON EVIDENCE

planning to go to her father-in-law's house to get money from the Malita were the ones responsible for Bernardo's death. The two
latter. She had no idea, however, as to what later transpired were promptly arrested by the police. Aside from arresting the
because she had fallen asleep before 10:00 p.m.3 Accused- latter two, however, the police also arrested accused-appellant.
appellant objected to Gina Quidato's testimony on the ground
that the same was prohibited by the marital disqualification rule On September 29, 1988, the Malita brothers were interrogated by
found in Section 22 of Rule 130 of the Rules of Court. 4 The Patrolman Lucrecio Mara at the Kaputian Police Station. When
judge, acknowledging the applicability of the so-called rule, Mara apprised them of their constitutional rights, including their
allowed said testimony only against accused-appellant's co- right to counsel, they signified their intent to confess even in the
accused, Reynaldo and Eddie. absence of counsel. Aware that the same would be useless if given
in the absence of counsel, Mara took down the testimony of the
As adverted to earlier, the Malita brothers confessed to their two but refrained from requiring the latter to sign their affidavits.
participation in the crime, executing affidavits detailing how Instead, he escorted the Malita brothers to Davao City and
Bernardo was killed. Their version shows that Eddie had been presented them, along with their unsigned affidavits, to a CLAO
living with accused-appellant for the past four years. At around (now PAO) lawyer, Jonathan Jocom.6
6:00 p.m. of September 17, 1988, accused-appellant asked
Reynaldo to come to the former's house to discuss an important Informed of the situation, Atty. Jocom conferred with Reynaldo
matter. Upon Reynaldo's arrival at accused-appellant's house, he and Eddie, again advising the two of their constitutional rights.
saw that his brother Eddie was already there. They started The CLAO lawyer explained the contents of the affidavits, in
drinking beer. The Malita brothers alleged that it was at this Visayan, to the Malita brothers, who affirmed the veracity and
juncture that accused-appellant proposed that they rob and kill voluntary execution of the same. Only then did Reynaldo and
his father. They went to Bernardo's house only at 10:00 p.m., Eddie affix their signatures on the affidavits.7
after the rain had stopped. Reynaldo brought along a bolo. Upon
reaching the house, accused-appellant knocked on the door, In his defense, accused-appellant denied the allegations of the
asking his father to let them in. When Bernardo opened the door, Malita brothers. He claimed that the Malita brothers were not at
Eddie rushed in and knocked the old man down. Reynaldo then his house on the evening of September 17, 1988. They, however,
hacked Bernardo on the nape and neck. Accused-appellant and passed by his house at around 10:00 p.m. and asked him to come
Eddie ransacked Bernardo's aparador looking for money but they with them to his father's house, threatening him with harm if he
found none; so, the three of them left. refused. Out of fear, he led the way to Bernardo's house and even
knocked on the latter's door until Bernardo opened the same. In
The body of Bernardo was discovered the next day by accused- the ensuing commotion, he scampered away, but in his
appellant's son, who had gone there to call his Lolo for breakfast. confusion, reached his house only at around 11:00 p.m.,
The cause of death, as stated in Bernardo's death certificate was although the same was only about one hundred fifty meters away
"hypovolemic shock secondary to fatal hacking wound on the from Bernardo's house. He did not call for help. Eddie arrived a
posterior neck area." 5 while later. Accused-appellant claimed not to have seen the actual
killing, having run away earlier. He, however, admitted finding a
On September 27, 1988, Leo Quidato confronted his brother bolo, encrusted with blood, at his house. He turned the same over
regarding the incident and learned that Reynaldo and Eddie to his brother, who, in turn, surrendered the same to the police.

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CASES ON EVIDENCE

Accused-appellant did not feel uneasy having Eddie around even In indicting accused-appellant, the prosecution relied heavily on
if he knew of the latter's participation in the crime.8 the affidavits executed by Reynaldo and Eddie. The two brothers
were, however, not presented on the witness stand to testify on
After due trial, the court a quo rendered the following judgment: their extra-judicial confessions. The failure to present the two
gives these affidavits the character of hearsay. It is hornbook
WHEREFORE, IN THE LIGHT OF THE FOREGOING, the court doctrine that unless the affiants themselves take the witness
finds the accused, Bernardo Quidato, Jr., guilty beyond stand to affirm the averments in their affidavits, the affidavits
reasonable doubt as a co-principal in the offense of Parricide must be excluded from the judicial proceeding, being inadmissible
which falls under Article 246 (of the Revised Penal Code), for the hearsay. 10 The voluntary admissions of an accused made
death of his father, Bernardo Quidato, Sr., and accordingly, is extrajudicially are not admissible in evidence against his co-
hereby sentenced by this court to suffer the penalty of accused when the latter had not been given an opportunity to
RECLUSION PERPETUA, with all the accessory penalties provided hear him testify and cross-examine him.11
by law and to indemnify the other heirs of Bernardo Quidato, Sr.,
the amount of P50,000.00, in accordance with current case The Solicitor General, in advocating the admissibility of the sworn
doctrines of the Supreme Court, and to pay the costs. statements of the Malita brothers, cites Section 30, Rule 130 of
the Rules of Court which provides that "[t]he act or declaration of
SO ORDERED.9 a conspirator relating to the conspiracy and during its existence,
may be given in evidence against the co-conspirator after the
From the aforesaid judgment of conviction, appellant interposed conspiracy is shown by evidence other than such act or
the present appeal, assigning the following errors: declaration." The inapplicability of this provision is clearly
apparent. The confessions were made after the conspiracy had
1. THE TRIAL COURT ERRED IN GIVING CREDENCE TO THE ended and after the consummation of the crime. Hence, it cannot
EXTRAJUDICIAL CONFESSIONS OF REYNALDO MALITA (EXH. be said that the execution of the affidavits were acts or
C) AND EDDIE MALITA (EXH. D) IN CLEAR VIOLATION OF THE declarations made during the conspiracy's existence.
CONSTITUTIONAL RIGHTS OF THE ACCUSED-APPELLANT TO
CONFRONT WITNESSES. Likewise, the manner by which the affidavits were obtained by the
police render the same inadmissible in evidence even if they were
2. THE TRIAL COURT ERRED IN FINDING (THE) EXISTENCE OF voluntarily given. The settled rule is that an uncounseled
CONSPIRACY IN THE CASE AT BAR. extrajudicial confession without a valid waiver of the right to
counsel — that is, in writing and in the presence of counsel — is
3. THE TRIAL COURT ERRED IN DISREGARDING THE DEFENSE inadmissible in evidence. 12 It is undisputed that the Malita
RAISED BY THE ACCUSED AND DISREGARDING (ANY) ILL- brothers gave their statements to Patrolman Mara in the absence
MOTIVE OF REYNALDO AND EDDIE MALITA IN KILLING THE of counsel, although they signed the same in the presence of
VICTIM. counsel the next day. As ruled in People vs. Compil: 13

Accused-appellant must be acquitted. [T]he belated arrival of a CLAO (now PAO) lawyer the following day
even if prior to the actual signing of the uncounseled confession

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CASES ON EVIDENCE

does not cure the defect (of lack of counsel) for the investigators cannot rely on the weakness of the defense to gain a conviction,
were already able to extract incriminatory statements from but must establish beyond reasonable doubt every circumstance
accused-appellant . . . Thus, in People vs. De Jesus (213 SCRA essential to the guilt of the accused. 15 This the prosecution has
345 [1992]) we said that admissions obtained during custodial failed to demonstrate.
interrogations without the benefit of counsel although later
reduced to writing and signed in the presence of counsel are still WHEREFORE, the appeal is hereby GRANTED and the decision of
flawed under the Constitution. the Regional Trial Court of Davao City in Criminal Case No. 89-9
dated March 2, 1994, is REVERSED and SET ASIDE. Accused-
With regard to Gina Quidato's testimony, the same must also be appellant Bernardo Quidato, Jr. is hereby ACQUITTED on ground
disregarded, accused-appellant having timely objected thereto of reasonable doubt. Consequently, let the accused be
under the marital disqualification rule. As correctly observed by immediately released from his place of confinement unless there
the court a quo, the disqualification is between husband and wife, is reason to detain him further for any other legal or valid cause.
the law not precluding the wife from testifying when it involves With costs de oficio.
other parties or accused. 14 Hence, Gina Quidato could testify in
the murder case against Reynaldo and Eddie, which was jointly SO ORDERED.
tried with accused-appellant's case. This testimony cannot,
however, be used against accused-appellant directly or through
the guise of taking judicial notice of the proceedings in the
murder case without violating the marital disqualification rule.
"What cannot be done directly cannot be done indirectly" is a rule
familiar even to law students.

Given the inadmissibility in evidence of Gina Quidato's testimony,

as well as of Reynaldo and Eddie's extrajudicial confessions,
nothing remains on record with which to justify a judgment
unfavorable to accused-appellant. Admittedly, accused-
appellant's defense, to put it mildly, is dubious. His alleged
acquiescence to the demand of the Malita brothers to accompany
them to his father's house on the strength of the latter's verbal
threats, his incredulous escape from the clutches of the two, his
inexplicable failure to return home immediately, his failure to
seek assistance from the authorities, the fact that Eddie stayed
with him immediately after the incident, and the nine-day lacuna
between the killing and his pointing to the Malita brothers as the
culprits, all suggest a complicity more than that of an unwilling
participant. Yet, suspicion, no matter how strong, should not
sway judgment, it being an accepted axiom that the prosecution

355
CASES ON EVIDENCE

depriving them of their cultivatory rights.” Petitioners have no

other evidence, other than such verbal declaration, which proves
the existence of such arrangement. No written memorandum of
such agreement exists, nor have they shown that they actually
cultivated the land even if only for one cropping. No receipt
evidencing payment to the landowners of the latter’s share, or any
other documentary evidence, has been put forward. What the
PARAD, DARAB and CA failed to consider and realize is that
Amanda’s declaration in her Affidavit covering Pedro’s alleged
admission and recognition of the alternate farming scheme is
inadmissible for being a violation of the Dead Man’s Statute,
which provides that “[i]f one party to the alleged transaction is
precluded from testifying by death, insanity, or other mental
disabilities, the other party is not entitled to the undue advantage
of giving his own uncontradicted and unexplained account of the
transaction.” Thus, since Pedro is deceased, and Amanda’s
declaration which pertains to the leasehold agreement affects the
1996 “Kasunduan sa Buwisan ng Lupa” which she as assignor
entered into with petitioners, and which is now the subject matter
of the present case and claim against Pedro’s surviving spouse
and lawful successor-in-interest Dominga, such declaration
cannot be admitted and used against the latter, who is placed in
49. GARCIA VS VDA. DE CAPARAS an unfair situation by reason of her being unable to contradict or
disprove such declaration as a result of her husband-declarant
Remedial Law; Evidence; Dead Man’s Statute; If one party to the Pedro’s prior death.
alleged transaction is precluded from testifying by death, insanity,
or other mental disabilities, the other party is not entitled to the DEL CASTILLO, J.:
undue advantage of giving his own uncontradicted and
unexplained account of the transaction.—DARAB Case No. R-03- Under the Dead Man's Statute Rule, "if one party to the alleged
02-3520-96, which was filed in 1996 or long after Pedro’s death in transaction is precluded from testifying by death, insanity, or
1984, has no leg to stand on other than Amanda’s declaration in other mental disabilities, the other party is not entitled to the
her July 10, 1996 Affidavit that Pedro falsely represented to undue advantage of giving his own uncontradicted and
Makapugay and to her that he is the actual cultivator of the land, unexplained account of the transaction."1 Thus, the alleged
and that when she confronted him about this and the alleged admission of the deceased Pedro Caparas (Pedro) that he entered
alternate farming scheme between him and petitioners, Pedro into a sharing of leasehold rights with the petitioners cannot be
allegedly told her that “he and his two sisters had an used as evidence against the herein respondent as the latter
understanding about it and he did not have the intention of would be unable to contradict or disprove the same.

356
CASES ON EVIDENCE

On October 24, 1996, herein petitioners Garcia and Salamat filed

This Petition for Review on Certiorari2 seeks to reverse and set a Complaint10 for nullification of leasehold and restoration of
aside the August 31, 2007 Decision3 of the Court of Appeals (CA) rights as agricultural lessees against Pedro’s heirs, represented by
in CA-G.R. SP No. 90403;4 as well as its December 13, 2007 his surviving spouse and herein respondent Dominga. Before the
Resolution5denying petitioners' Motion for Reconsideration. office of the Provincial Agrarian Reform Adjudicator (PARAD) of
Bulacan, the case was docketed as Department of Agrarian
Factual Antecedents Reform Adjudication Board (DARAB) Case No. R-03-02-3520-96.

Flora Makapugay (Makapugay) is the owner of a 2.5-hectare farm In their Complaint, Garcia and Salamat claimed that when their
in Barangay Lugam, Malolos, Bulacan (the land) covered by father Eugenio died, they entered into an agreement with their
Transfer Certificate of Title No. (TCT) RT-65932 (T-25198)6 and brother Pedro that they would alternately farm the land on a "per-
being tilled by Eugenio Caparas (Eugenio) as agricultural lessee season basis"; that the landowner Makapugay knew of this
under a leasehold agreement. Makapugay passed away and was agreement; that when Makapugay passed away, Pedro reneged on
succeeded by her nephews and niece, namely Amanda dela Paz- their agreement and cultivated the land all by himself,
Perlas (Amanda), Justo dela Paz (Justo) and Augusto dela Paz deliberately excluding them and misrepresenting to Amanda that
(Augusto). On the other hand, Eugenio’s children – Modesta he is Eugenio’s sole heir; that as a result, Amanda was deceived
Garcia (Garcia), Cristina Salamat (Salamat) and Pedro – into installing him as sole agricultural lessee in their 1979
succeeded him. Agricultural Leasehold Contract; that when Amanda learned of
Pedro’s misrepresentations, she executed on July 10, 1996 an
Before she passed away, Makapugay appointed Amanda as her Affidavit11 stating among others that Pedro assured her that he
attorney-in-fact. After Eugenio died, or in 1974, Amanda and would not deprive Garcia and Salamat of their "cultivatory rights";
Pedro entered into an agreement entitled "Kasunduan sa that in order to correct matters, Amanda, Justo and Augusto
Buwisan",7 followed by an April 19, 1979 Agricultural Leasehold executed in their favor the 1996 "Kasunduan sa Buwisan ng
Contract,8 covering the land. In said agreements, Pedro was Lupa", recognizing them as Pedro’s co-lessees; that when Pedro
installed and recognized as the lone agricultural lessee and passed away, Dominga took over the land and, despite demands,
cultivator of the land. continued to deprive them of their rights as co-lessees; that
efforts to settle their controversy proved futile, prompting the
Pedro passed away in 1984, and his wife, herein respondent Barangay Agrarian Reform Committee to issue the proper
Dominga Robles Vda. de Caparas (Dominga), took over as certification authorizing the filing of a case; and that they suffered
agricultural lessee. damages as a consequence. Petitioners prayed that the 1979
Agricultural Leasehold Contract between Pedro and Amanda be
On July 10, 1996, the landowners Amanda, Justo and Augusto, nullified; that they be recognized as co-lessees and allowed to
on the one hand, and Pedro’s sisters Garcia and Salamat on the cultivate the land on an alternate basis as originally agreed; and
other, entered into a "Kasunduan sa Buwisan ng Lupa"9 whereby that they be awarded ₱50,000.00 attorney’s fees and costs of
Garcia and Salamat were acknowledged as Pedro’s co-lessees. litigation.

357
CASES ON EVIDENCE

In her Answer,12 herein respondent Dominga claimed that when

her father-in-law Eugenio died, only her husband Pedro 3. ORDERING plaintiffs to maintain defendant in her peaceful
succeeded and cultivated the land, and that petitioners never possession and cultivation of the subject landholding;
assisted him in farming the land; that Pedro is the sole
agricultural lessee of the land; that Amanda’s July 10, 1996 4. ORDERING the MARO of Malolos, Bulacan to execute a new
Affidavit and "Kasunduan sa Buwisan ng Lupa" of even date leasehold contract between the landowner and defendant
between her and the petitioners are self-serving and violate the Dominga Robles Vda. de Caparas;
existing 1979 Agricultural Leasehold Contract; that under Section
3813 of Republic Act No. 384414 (RA 3844), petitioners’ cause of 5. No pronouncement as to costs.
action has prescribed. Dominga further claimed that Pedro has
been in possession of the land even while Eugenio lived; that SO ORDERED.17
petitioners have never cultivated nor possessed the land even for
a single cropping; that Pedro has been the one paying the lease The PARAD held that Amanda’s act of executing the July 10,
rentals as evidenced by receipts; that when Pedro died in 1984, 1996 Affidavit and "Kasunduan sa Buwisan ng Lupa" amounted
she succeeded in his rights as lessee by operation of law, and that to dispossession of Pedro’s landholding and rights without cause;
she had been remitting lease rentals to the landowners since that Amanda’s 1996 disclaimer, after having installed Pedro as
1985; and that petitioners had no right to institute themselves as tenant in 1979, was belated and unjustified; that petitioners have
her co-lessees. She prayed that the Complaint be dismissed; that not shown by evidence that they actually cultivated the land, or
the July 10, 1996 "Kasunduan sa Buwisan ng Lupa" be nullified; that they paid rentals to the landowners; that petitioners’ cause of
that the execution of a new leasehold agreement between her and action has prescribed in accordance with Section 38 of RA 3844;
the landowners be ordered; and by way of counterclaim, that that for failure to timely question Pedro’s leasehold, his rights
moral damages15 and litigation costs be awarded her. were transferred, by operation of law, to Dominga upon his death.
Finally, the PARAD held that petitioners’ July 10, 1996
Ruling of the PARAD "Kasunduan sa Buwisan ng Lupa" is null and void for being
issued against Pedro’s existing 1979 Agricultural Leasehold
After hearing and consideration of the parties’ respective position Contract, which has not been cancelled by competent authority.
papers and other submissions, the PARAD issued on May 4, 1998
a Decision,16 which decreed as follows: DARAB Case No. 03-03-10307-99

WHEREFORE, premises considered, judgment is hereby rendered It appears that sometime after the execution of the July 10, 1996
in favor of the defendant and against the plaintiffs and Order is "Kasunduan sa Buwisan ng Lupa" and during the pendency of
hereby issued: DARAB Case No. R-03-02-3520-96, petitioners entered the land
and began tilling the same. For this reason, Dominga filed DARAB
1. ORDERING the dismissal of the case; Case No. 03-03-10307-99, for maintenance of peaceful
possession with injunctive relief, against the landowners and
2. DECLARING defendant Dominga Robles Vda. de Caparas as petitioners. On petitioners’ motion, the case was dismissed.18
lawful successor-tenant;

358
CASES ON EVIDENCE

Ruling of the DARAB this practice after succeeding Pedro prompted petitioners to file
DARAB Case No. R-03-02-3520-96 and claim the status of co-
Petitioners appealed the May 4, 1998 PARAD Decision in DARAB lessees; that Amanda’s Affidavit and the 1996 "Kasunduan sa
Case No. R-03-02-3520-96 to the DARAB, where the case was Buwisan ng Lupa" between the landowners and petitioners
docketed as DARAB Case No. 972219 (DCN 9722). Dominga cannot defeat Pedro’s 1979 Agricultural Leasehold Contract and
likewise appealed the dismissal of DARAB Case No. 03-03-10307- his rights as the sole tenant over the land; that for sleeping on
99, which appeal was docketed as DARAB Case No. 11155 (DCN their rights, petitioners are now barred by laches from claiming
11155). On motion, both appeals were consolidated. that they are co-lessees; and that petitioners’ 1996 "Kasunduan
sa Buwisan ng Lupa" is null and void for being contrary to law,
On June 15, 2005, the DARAB issued its Decision,20 the morals, public policy, and Pedro’s 1979 Agricultural Leasehold
dispositive portion of which reads, as follows: Contract, which was subsisting and which has not been cancelled
by competent authority.
WHEREFORE, premises considered, a new judgment is hereby
rendered: Ruling of the Court of Appeals

1. DECLARING Dominga Robles Vda. de Caparas as the lawful Petitioners filed before the CA a Petition for Certiorari, which was
successor-tenant of Pedro Caparas over the subject landholding; docketed as CA-G.R. SP No. 90403, seeking to set aside the
DARAB Decision. The sole basis of their Petition rests on the
2. ORDERING the plaintiffs in DCN 9722 and the respondents in argument that as a result of a May 9, 2005 Order issued by the
DCN 11155 or any person acting in their behalves [sic], to Regional Technical Director (Region III) of the Department of
maintain Dominga Robles Vda. de Caparas in peaceful possession Environment and Natural Resources, the survey returns and
and cultivation of the subject landholding; plans covering TCT RT-65932 have been cancelled, which thus
rendered the June 15, 2005 DARAB Decision null and void and a
3. ORDERING the MARO of Malolos, Bulacan, to execute a new proper subject of certiorari.
leasehold contract between the landowner and Dominga Robles
Vda. de Caparas; and On August 31, 2007, the CA issued the assailed Decision which
decreed as follows:
4. ORDERING for the dismissal of DCN 11155 for being moot and
academic. IN LIGHT OF ALL THE FOREGOING, the instant petition is
DENIED. The assailed decision is AFFIRMED in toto.
SO ORDERED.21
SO ORDERED.22
In upholding the PARAD Decision, the DARAB held that contrary
to petitioners’ claim, there was no alternate farming agreement The CA held that the issue raised by petitioners – the cancellation
between the parties, and thus petitioners may not claim that they of the survey returns and plans covering TCT RT-65932 – was not
were co-lessees; that Pedro merely shared his harvest with part of their causes of action in the PARAD or DARAB, and this
petitioners as an act of generosity, and Dominga’s act of stopping new issue changed the theory of their case against Dominga,

359
CASES ON EVIDENCE

which is not allowed. The CA added that it could not decide the BEING PUT IN SURPRISE NOR IN UNFAIR SITUATION.
case on the basis of a question which was not placed in issue CONSEQUENTLY, SHE IS THE PARTY IN ESTOPPEL. AND FROM
during the proceedings below. THE TIME BY HER ACTS OF SELF-CONVERSION OF THE LAND,
IN THE EARLY ‘90S OR EARLIER, SHE "LOST HER SECURITY OF
The CA held further that even granting that the issues are TENURE" AS AGRICULTURAL LESSEE.
resolved on the merits, the petition would fail; the cancellation of
the survey returns and plans covering TCT RT-65932 reverts the 2. THE DECISIONS OF THE DARAB PROVINCIAL
property to its original classification as agricultural land which ADJUDICATOR, DARAB CENTRAL OFFICE, AND THE
thus vindicates the leasehold agreements of the parties. And HONORABLE COURT OF APPEALS, SPEAK OF NO HOMELOT
speaking of leasehold agreements, the CA held that petitioners HAVING BEEN AWARDED BY THE DEPARTMENT OF AGRARIAN
may not be considered as Pedro’s co-lessees, for lack of proof that REFORM TO PRIVATE RESPONDENT.
they actually tilled the land and with petitioners’ own admission
in their pleadings that they merely received a share from Pedro’s 3. ACTUAL PHYSICAL CHANGE IN THE USE OF THE LAND
harvests; that the original 1974 and 1979 leasehold agreements FROM AGRICULTURAL TO "RESIDENTIAL" MAY OCCUR AFTER
between Makapugay, Amanda and Pedro categorically show that TRIAL, BUT DURING THE APPEAL, WHICH THE HON. COURT OF
Pedro is the sole designated agricultural lessee; and that without APPEALS MAY CONSIDER.
proper legal termination of Pedro’s lease in accordance with RA
3844, the landowners cannot designate other tenants to the same 4. "CONVERSION" (WHICH REQUIRES PRIOR APPROVAL BY
land in violation of the existing lessee’s rights. THE DAR) HAVING BECOME A "FAIT ACCOMPLI", SECTION 220
OF THE REAL ESTATE TAX CODE AND ARTICLE 217 OF THE
Petitioners moved for reconsideration, arguing that the land has LOCAL GOVERNMENT CODE OF 1991 AFFIRM THE
been re- classified as residential land, and has been actually used TRUSTWORTHINESS OF THE TAX DECLARATION THAT IS, THE
as such. Petitioners cited a 1997 ordinance, Malolos Municipal PREVIOUS FARMHOLD HAS BEEN CONVERTED INTO
Resolution No. 41-97,23 which adopted and approved the zoning "RESIDENTIAL" LAND, AND CONFIRMED BY THE CITY ZONING
ordinance and the Malolos Development Plan prepared jointly by DIRECTOR.
the Housing and Land Use Regulatory Board and the Malolos
Sangguniang Bayan. In the assailed December 13, 2007 5. IN NOT HAVING CONSIDERED THE TAX DECLARATION AND
Resolution,24 the CA denied the Motion for Reconsideration. THE ZONING CERTIFICATION x x x, THE HON. COURT OF
APPEALS COMMITTED A VERY FUNDAMENTAL ERROR.25
Issues
Petitioners’ Arguments
In this petition, the following errors are assigned:
In their Petition and Reply,26 petitioners this time argue that in
1. x x x RESPONDENT’S ACT OF HAVING BUILT THREE (3) building houses upon the land for herself and her children
HOUSES (FOR HERSELF AND TWO OF HER CHILDREN), WAS without a homelot award from the Department of Agrarian
"CONVERSION OF THE FARMHOLD INTO A HOUSING- Reform, Dominga converted the same to residential use; and by
RESIDENTIAL SUBDIVISION" AND THEREFORE, SHE IS NOT this act of conversion, Dominga violated her own security of

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CASES ON EVIDENCE

tenure and the land was removed from coverage of the land written memorandum of such agreement exists, nor have they
reform laws. They add that the Malolos zoning ordinance and the shown that they actually cultivated the land even if only for one
tax declaration covering the land effectively converted the cropping. No receipt evidencing payment to the landowners of the
property into residential land. latter’s share, or any other documentary evidence, has been put
forward.
Petitioners justify their change of theory, the addition of new
issues, and the raising of factual issues, stating that the What the PARAD, DARAB and CA failed to consider and realize is
resolution of these issues are necessary in order to arrive at a just that Amanda’s declaration in her Affidavit covering Pedro’s alleged
decision and resolution of the case in its totality. They add that admission and recognition of the alternate farming scheme is
the new issues were raised as a necessary consequence of inadmissible for being a violation of the Dead Man’s Statute,29
supervening events which took place after the Decisions of the which provides that "[i]f one party to the alleged transaction is
PARAD and DARAB were issued. precluded from testifying by death, insanity, or other mental
disabilities, the other party is not entitled to the undue advantage
Respondent’s Arguments of giving his own uncontradicted and unexplained account of the
transaction."30 Thus, since Pedro is deceased, and Amanda’s
In her Comment,27 Dominga argues that the Petition raises declaration which pertains to the leasehold agreement affects the
questions of fact which are not the proper subject of a Petition 1996 "Kasunduan sa Buwisan ng Lupa" which she as assignor
under Rule 45 of the Rules. She adds that petitioners raised anew entered into with petitioners, and which is now the subject matter
issues which further changed the theory of their case, and which of the present case and claim against Pedro’s surviving spouse
issues may not be raised for the first time at this stage of the and lawful successor-in-interest Dominga, such declaration
proceedings. cannot be admitted and used against the latter, who is placed in
an unfair situation by reason of her being unable to contradict or
Our Ruling disprove such declaration as a result of her husband-declarant
Pedro’s prior death.
The Petition is denied.
If petitioners earnestly believed that they had a right, under their
DARAB Case No. R-03-02-3520-96, which was filed in 1996 or supposed mutual agreement with Pedro, to cultivate the land
long after Pedro’s death in 1984, has no leg to stand on other under an alternate farming scheme, then they should have
than Amanda’s declaration in her July 10, 1996 Affidavit that confronted Pedro or sought an audience with Amanda to discuss
Pedro falsely represented to Makapugay and to her that he is the the possibility of their institution as co-lessees of the land; and
actual cultivator of the land, and that when she confronted him they should have done so soon after the passing away of their
about this and the alleged alternate farming scheme between him father Eugenio. However, it was only in 1996, or 17 years after
and petitioners, Pedro allegedly told her that "he and his two Pedro was installed as tenant in 1979 and long after his death in
sisters had an understanding about it and he did not have the 1984, that they came forward to question Pedro’s succession to
intention of depriving them of their cultivatory rights."28 the leasehold. As correctly held by the PARAD, petitioners slept
Petitioners have no other evidence, other than such verbal on their rights, and are thus precluded from questioning Pedro’s
declaration, which proves the existence of such arrangement. No 1979 agricultural leasehold contract.

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CASES ON EVIDENCE

Leasehold Contract with Pedro, she is deemed to have chosen the

Amanda, on the other hand, cannot claim that Pedro deceived her latter as Eugenio’s successor, and is presumed to have diligently
into believing that he is the sole successor to the leasehold. Part performed her duties, as Makapugay’s representative, in
of her duties as the landowner’s representative or administrator conducting an inquiry prior to making the choice.
was to know the personal circumstances of the lessee Eugenio;
more especially so, when Eugenio died. She was duty-bound to The same holds true for petitioners. They should be held to a
make an inquiry as to who survived Eugenio, in order that the faithful compliance with Section 9. If it is true that they entered
landowner – or she as representative – could choose from among into a unique arrangement with Pedro to alternately till the land,
them who would succeed to the leasehold. Under Section 9 of RA they were thus obliged to inform Makapugay or Amanda of their
3844, Makapugay, or Amanda – as Makapugay’s duly appointed arrangement, so that in the process of choosing Eugenio’s
representative or administrator – was required to make a choice, successor, they would not be left out. But evidently, they did not;
within one month from Eugenio’s death, who would succeed as they slept on their rights, and true enough, they were excluded, if
agricultural lessee. Thus: there was any such alternate farming agreement between them.
And after Pedro was chosen and installed as Eugenio’s successor,
Section 9. Agricultural Leasehold Relation Not Extinguished by they allowed 17 years to pass before coming out to reveal this
Death or Incapacity of the Parties - In case of death or permanent claimed alternate farming agreement and insist on the
incapacity of the agricultural lessee to work his landholding, the same.1âwphi1
leasehold shall continue between the agricultural lessor and the
person who can cultivate the landholding personally, chosen by With the above pronouncements, there is no other logical
the agricultural lessor within one month from such death or conclusion than that the 1996 "Kasunduan sa Buwisan ng Lupa"
permanent incapacity, from among the following: (a) the surviving between Amanda and petitioners, which is grounded on Pedro’s
spouse; (b) the eldest direct descendant by consanguinity; or (c) inadmissible verbal admission, and which agreement was entered
the next eldest descendant or descendants in the order of their into without obtaining Dominga’s consent, constitutes an undue
age: Provided, That in case the death or permanent incapacity of infringement of Dominga’s rights as Pedro’s successor-in-interest
the agricultural lessee occurs during the agricultural year, such under Section 9, and operates to deprive her of such rights and
choice shall be exercised at the end of that agricultural year: dispossess her of the leasehold against her will. Under Section
Provided, further, That in the event the agricultural lessor fails to 732 of RA 3844, Dominga is entitled to sennity of tenure; and
exercise his choice within the periods herein provided, the priority under Section 16,33 any modification of the lease agreement
shall be in accordance with the order herein established. must be done with the consent of both parties and without
prejudicing Dominga's security of tenure.
In case of death or permanent incapacity of the agricultural
lessor, the leasehold shall bind his legal heirs. (Emphasis This Court shall not delve into the issue of re-classification or
supplied) conversion of the land. Re-classification/conversion changes
nothing as between the landowners and Dominga in regard to
Amanda may not claim ignorance of the above provision, as their agreement, rights and obligations. On the contrary, re-
ignorance of the law excuses no one from compliance classification/conversion can only have deleterious effects upon
therewith.31 Thus, when she executed the 1979 Agricultural petitioners' cause. Not being agricultural lessees of the land,

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CASES ON EVIDENCE

petitioners may not benefit at all, for under the law, only the duly deceased Juan Chuidian opted to pay the same which never
designated lessee -herein respondent - is entitled to disturbance happened. The case was filed by the administrator of the estate of
compensation in case of re-classification/conversion of the the late Juan Chuidian to recover shares of stock in E. Razon,
landholding into residential, commercial, industrial or some other Inc. allegedly owned by the late Juan T. Chuidian. It is clear,
urban purposes.34 Besides, a valid re-classification of the land therefore, that the testimony of the petitioner is not within the
not only erases petitioners' supposed leasehold rights; it renders prohibition of the rule. The case was not filed against the
them illegal occupants and sowers in bad faith thereof, since from administrator of the estate, nor was it filed upon claims against
the position they have taken as alleged lessees, they are not the the estate. Furthermore, the records show that the private
owners of the land. respondent never objected to the testimony of the petitioner as
regards the true nature of his transaction with the late elder
WHEREFORE, the Petition is DENIED. The assailed August 31, Chuidian. The petitioner’s testimony was subject to cross-
2007 Decision and December 13, 2007 Resolution of the Court of examination by the private respon-dent’s counsel. Hence,
Appeals are AFFIRMED. granting that the petitioner’s testimony is within the prohibition
of Section 20(a), Rule 130 of the Rules of Court, the private
SO ORDERED. respondent is deemed to have waived the rule.

GUTIERREZ, JR., J.:

The main issue in these consolidated petitions centers on the

ownership of 1,500 shares of stock in E. Razon, Inc. covered by
Stock Certificate No. 003 issued on April 23, 1966 and registered
under the name of Juan T. Chuidian in the books of the
corporation. The then Court of First Instance of Manila, now
Regional Trial Court of Manila, declared that Enrique Razon, the
petitioner in G.R. No. 74306 is the owner of the said shares of
stock. The then Intermediate Appellate Court, now Court of
Appeals, however, reversed the trial court's decision and ruled
that Juan T. Chuidian, the deceased father of petitioner Vicente
50. RAZON VS IAC B. Chuidian in G.R. No. 74315 is the owner of the shares of stock.
Both parties filed separate motions for reconsideration. Enrique
Evidence; “Dead man’s statute.”—In the instant case, the Razon wanted the appellate court's decision reversed and the trial
testimony excluded by the appellate court is that of the defendant court's decision affirmed while Vicente Chuidian asked that all
(petitioner herein) to the effect that the late Juan Chuidian, (the cash and stock dividends and all the pre-emptive rights accruing
father of private respondent Vicente Chuidian, the administrator to the 1,500 shares of stock be ordered delivered to him. The
of the estate of Juan Chuidian) and the defendant agreed in the appellate court denied both motions. Hence, these petitions.
lifetime of Juan Chuidian that the 1,500 shares of stock in E.
Razon, Inc. are actually owned by the defendant unless the The relevant Antecedent facts are as follows:

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CASES ON EVIDENCE

On April 23, 1966, stock certificate No. 003 for 1,500 shares of
In his complaint filed on June 29, 1971, and amended on stock of defendant corporation was issued in the name of Juan T.
November 16, 1971, Vicente B. Chuidian prayed that defendants Chuidian.
Enrique B. Razon, E. Razon, Inc., Geronimo Velasco, Francisco de
Borja, Jose Francisco, Alfredo B. de Leon, Jr., Gabriel Llamas and On the basis of the 1,500 shares of stock, the late Juan T.
Luis M. de Razon be ordered to deliver certificates of stocks Chuidian and after him, the plaintiff-appellant, were elected as
representing the shareholdings of the deceased Juan T. Chuidian directors of E. Razon, Inc. Both of them actually served and were
in the E. Razon, Inc. with a prayer for an order to restrain the paid compensation as directors of E. Razon, Inc.
defendants from disposing of the said shares of stock, for a writ of
preliminary attachment v. properties of defendants having From the time the certificate of stock was issued on April 1966 up
possession of shares of stock and for receivership of the to April 1971, Enrique Razon had not questioned the ownership
properties of defendant corporation . . . by Juan T. Chuidian of the shares of stock in question and had
not brought any action to have the certificate of stock over the
xxx xxx xxx said shares cancelled.

In their answer filed on June 18, 1973, defendants alleged that all The certificate of stock was in the possession of defendant Razon
the shares of stock in the name of stockholders of record of the who refused to deliver said shares to the plaintiff, until the same
corporation were fully paid for by defendant, Razon; that said was surrendered by defendant Razon and deposited in a safety
shares are subject to the agreement between defendants and box in Philippine Bank of Commerce.
incorporators; that the shares of stock were actually owned and
remained in the possession of Razon. Appellees also alleged . . . Defendants allege that after organizing the E. Razon, Inc.,
that neither the late Juan T. Chuidian nor the appellant had paid Enrique Razon distributed shares of stock previously placed in
any amount whatsoever for the 1,500 shares of stock in the names of the withdrawing nominal incorporators to some
question . . . friends including Juan T. Chuidian

xxx xxx xxx Stock Certificate No. 003 covering 1,500 shares of stock upon
instruction of the late Chuidian on April 23, 1986 was personally
The evidence of the plaintiff shown that he is the administrator of delivered by Chuidian on July 1, 1966 to the Corporate Secretary
the intestate estate of Juan Telesforo Chuidian in Special of Attorney Silverio B. de Leon who was himself an associate of
Proceedings No. 71054, Court of First Instance of Manila. the Chuidian Law Office (Exhs. C & 11). Since then, Enrique
Razon was in possession of said stock certificate even during the
Sometime in 1962, Enrique Razon organized the E. Razon, Inc. lifetime of the late Chuidian, from the time the late Chuidian
for the purpose of bidding for the arrastre services in South delivered the said stock certificate to defendant Razon until the
Harbor, Manila. The incorporators consisted of Enrique Razon, time (sic) of defendant Razon. By agreement of the parties (sic)
Enrique Valles, Luisa M. de Razon, Jose Tuason, Jr., Victor Lim, delivered it for deposit with the bank under the joint custody of
Jose F. Castro and Salvador Perez de Tagle. the parties as confirmed by the trial court in its order of August 7,
1971.

364
CASES ON EVIDENCE

such deceased person or before such person became of unsound

Thus, the 1,500 shares of stook under Stock Certificate No. 003 mind." (Emphasis supplied)
were delivered by the late Chuidian to Enrique because it was the
latter who paid for all the subscription on the shares of stock in xxx xxx xxx
the defendant corporation and the understanding was that he
(defendant Razon) was the owner of the said shares of stock and The purpose of the rule has been explained by this Court in this
was to have possession thereof until such time as he was paid wise:
therefor by the other nominal incorporators/stockholders (TSN.,
pp. 4, 8, 10, 24-25, 25-26, 28-31, 31-32, 60, 66-68, July 22, The reason for the rule is that if persons having a claim against
1980, Exhs. "C", "11", "13" "14"). (Ro11o — 74306, pp. 66-68) the estate of the deceased or his properties were allowed to testify
as to the supposed statements made by him (deceased person),
In G.R. No. 74306, petitioner Enrique Razon assails the appellate many would be tempted to falsely impute statements to deceased
court's decision on its alleged misapplication of the dead man's persons as the latter can no longer deny or refute them, thus
statute rule under Section 20(a) Rule 130 of the Rules of Court. unjustly subjecting their properties or rights to false or
According to him, the "dead man's statute" rule is not applicable unscrupulous claims or demands. The purpose of the law is to
to the instant case. Moreover, the private respondent, as plaintiff "guard against the temptation to give false testimony in regard to
in the case did not object to his oral testimony regarding the oral the transaction in question on the part of the surviving party."
agreement between him and the deceased Juan T. Chuidian that (Tongco v. Vianzon, 50 Phil. 698; Go Chi Gun, et al. v. Co Cho, et
the ownership of the shares of stock was actually vested in the al., 622 [1955])
petitioner unless the deceased opted to pay the same; and that
the petitioner was subjected to a rigid cross examination The rule, however, delimits the prohibition it contemplates in that
regarding such testimony. it is applicable to a case against the administrator or its
representative of an estate upon a claim against the estate of the
Section 20(a) Rule 130 of the Rules of Court (Section 23 of the deceased person. (See Tongco v. Vianzon, 50 Phil. 698 [1927])
Revised Rules on Evidence) States:
In the instant case, the testimony excluded by the appellate court
Sec. 20. Disqualification by reason of interest or relationship — is that of the defendant (petitioner herein) to the affect that the
The following persons cannot testify as to matters in which they late Juan Chuidian, (the father of private respondent Vicente
are interested directly or indirectly, as herein enumerated. Chuidian, the administrator of the estate of Juan Chuidian) and
the defendant agreed in the lifetime of Juan Chuidian that the
(a) Parties or assignors of parties to a case, or persons in whose 1,500 shares of stock in E. Razon, Inc. are actually owned by the
behalf a case is prosecuted, against an executor or administrator defendant unless the deceased Juan Chuidian opted to pay the
or other representative of a deceased person, or against a person same which never happened. The case was filed by the
of unsound mind, upon a claim or demand against the estate of administrator of the estate of the late Juan Chuidian to recover
such deceased person or against such person of unsound mind, shares of stock in E. Razon, Inc. allegedly owned by the late Juan
cannot testify as to any matter of fact accruing before the death of T. Chuidian.

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CASES ON EVIDENCE

It is clear, therefore, that the testimony of the petitioner is not E. Razon, Inc. was organized in 1962 by petitioner Enrique Razon
within the prohibition of the rule. The case was not filed against for the purpose of participating in the bidding for the arrastre
the administrator of the estate, nor was it filed upon claims services in South Harbor, Manila. The incorporators were Enrique
against the estate. Razon, Enrique Valles, Luisa M. de Razon, Jose Tuazon, Jr.,
Victor L. Lim, Jose F. Castro and Salvador Perez de Tagle. The
Furthermore, the records show that the private respondent never business, however, did not start operations until 1966. According
objected to the testimony of the petitioner as regards the true to the petitioner, some of the incorporators withdrew from the
nature of his transaction with the late elder Chuidian. The said corporation. The petitioner then distributed the stocks
petitioner's testimony was subject to cross-examination by the previously placed in the names of the withdrawing nominal
private respondent's counsel. Hence, granting that the petitioner's incorporators to some friends, among them the late Juan T.
testimony is within the prohibition of Section 20(a), Rule 130 of Chuidian to whom he gave 1,500 shares of stock. The shares of
the Rules of Court, the private respondent is deemed to have stock were registered in the name of Chuidian only as nominal
waived the rule. We ruled in the case of Cruz v. Court of Appeals stockholder and with the agreement that the said shares of stock
(192 SCRA 209 [1990]): were owned and held by the petitioner but Chuidian was given
the option to buy the same. In view of this arrangement, Chuidian
It is also settled that the court cannot disregard evidence which in 1966 delivered to the petitioner the stock certificate covering
would ordinarily be incompetent under the rules but has been the 1,500 shares of stock of E. Razon, Inc. Since then, the
rendered admissible by the failure of a party to object thereto. Petitioner had in his possession the certificate of stock until the
Thus: time, he delivered it for deposit with the Philippine Bank of
Commerce under the parties' joint custody pursuant to their
. . . The acceptance of an incompetent witness to testify in a civil agreement as embodied in the trial court's order.
suit, as well as the allowance of improper questions that may be
put to him while on the stand is a matter resting in the discretion The petitioner maintains that his aforesaid oral testimony as
of the litigant. He may assert his right by timely objection or he regards the true nature of his agreement with the late Juan
may waive it, expressly or by silence. In any case the option rests Chuidian on the 1,500 shares of stock of E. Razon, Inc. is
with him. Once admitted, the testimony is in the case for what it sufficient to prove his ownership over the said 1,500 shares of
is worth and the judge has no power to disregard it for the sole stock.
reason that it could have been excluded, if it had been objected
to, nor to strike it out on its own motion (Emphasis supplied). The petitioner's contention is not correct.
(Marella v. Reyes, 12 Phil. 1.)
In the case of Embassy Farms, Inc. v. Court of Appeals (188
The issue as to whether or not the petitioner's testimony is SCRA 492 [1990]) we ruled:
admissible having been settled, we now proceed to discuss the
fundamental issue on the ownership of the 1,500 shares of stock . . . For an effective, transfer of shares of stock the mode and
in E. Razon, Inc. manner of transfer as prescribed by law must be followed (Navea
v. Peers Marketing Corp., 74 SCRA 65). As provided under
Section 3 of Batas Pambansa Bilang, 68 otherwise known as the

366
CASES ON EVIDENCE

Corporation Code of the Philippines, shares of stock may be questioned 1,500 shares of stock registered in the name of the
transferred by delivery to the transferee of the certificate properly late Juan Chuidian was never indorsed to the petitioner, the
indorsed. Title may be vested in the transferee by the delivery of inevitable conclusion is that the questioned shares of stock
the duly indorsed certificate of stock (18 C.J.S. 928, cited in belong to Chuidian. The petitioner's asseveration that he did not
Rivera v. Florendo, 144 SCRA 643). However, no transfer shall be require an indorsement of the certificate of stock in view of his
valid, except as between the parties until the transfer is properly intimate friendship with the late Juan Chuidian can not overcome
recorded in the books of the corporation (Sec. 63, Corporation the failure to follow the procedure required by law or the proper
Code of the Philippines; Section 35 of the Corporation Law) conduct of business even among friends. To reiterate,
indorsement of the certificate of stock is a mandatory requirement
In the instant case, there is no dispute that the questioned 1,500 of law for an effective transfer of a certificate of stock.
shares of stock of E. Razon, Inc. are in the name of the late Juan
Chuidian in the books of the corporation. Moreover, the records Moreover, the preponderance of evidence supports the appellate
show that during his lifetime Chuidian was ellected member of court's factual findings that the shares of stock were given to
the Board of Directors of the corporation which clearly shows that Juan T. Chuidian for value. Juan T. Chuidian was the legal
he was a stockholder of the corporation. (See Section 30, counsel who handled the legal affairs of the corporation. We give
Corporation Code) From the point of view of the corporation, credence to the testimony of the private respondent that the
therefore, Chuidian was the owner of the 1,500 shares of stock. In shares of stock were given to Juan T. Chuidian in payment of his
such a case, the petitioner who claims ownership over the legal services to the corporation. Petitioner Razon failed to
questioned shares of stock must show that the same were overcome this testimony.
transferred to him by proving that all the requirements for the
effective transfer of shares of stock in accordance with the In G.R. No. 74315, petitioner Vicente B. Chuidian insists that the
corporation's by laws, if any, were followed (See Nava v. Peers appellate court's decision declaring his deceased father Juan T.
Marketing Corporation, 74 SCRA 65 [1976]) or in accordance with Chuidian as owner of the 1,500 shares of stock of E. Razon, Inc.
the provisions of law. should have included all cash and stock dividends and all the
pre-emptive rights accruing to the said 1,500 shares of stock.
The petitioner failed in both instances. The petitioner did not
present any by-laws which could show that the 1,500 shares of The petition is impressed with merit.
stock were effectively transferred to him. In the absence of the
corporation's by-laws or rules governing effective transfer of The cash and stock dividends and all the pre-emptive rights are
shares of stock, the provisions of the Corporation Law are made all incidents of stock ownership.
applicable to the instant case.
The rights of stockholders are generally enumerated as follows:
The law is clear that in order for a transfer of stock certificate to
be effective, the certificate must be properly indorsed and that xxx xxx xxx
title to such certificate of stock is vested in the transferee by the
delivery of the duly indorsed certificate of stock. (Section 35, . . . [F]irst, to have a certificate or other evidence of his status as
Corporation Code) Since the certificate of stock covering the stockholder issued to him; second, to vote at meetings of the

367
CASES ON EVIDENCE

corporation; third, to receive his proportionate share of the profits Same; Evidence; Dead Man’s Statute; Requirements; The “Dead
of the corporation; and lastly, to participate proportionately in the Man’s Statute” provides that if one party to the alleged
distribution of the corporate assets upon the dissolution or transaction is precluded from testifying by death, insanity, or
winding up. (Purdy's Beach on Private Corporations, sec. 554) other mental disabilities, the surviving party is not entitled to
(Pascual v. Del Saz Orozco, 19 Phil. 82, 87) undue advantage of giving his own uncontradicted and
unexplained account of the transaction.—The “Dead Man’s
WHEREFORE, judgment is rendered as follows: Statute” provides that if one party to the alleged transaction is
precluded from testifying by death, insanity, or other mental
a) In G.R. No. 74306, the petition is DISMISSED. The questioned disabilities, the surviving party is not entitled to the undue
decision and resolution of the then Intermediate Appellate Court, advantage of giving his own uncontradicted and unexplained
now the Court of Appeals, are AFFIRMED. Costs against the account of the transaction. But before this rule can be
petitioner. successfully invoked to bar the introduction of testimonial
evidence, it is necessary that: “1. The witness is a party or
b) In G.R. No. 74315, the petition is GRANTED. The questioned assignor of a party to a case or persons in whose behalf a case is
Resolution insofar as it denied the petitioner's motion to clarify prosecuted. 2. The action is against an executor or administrator
the dispositive portion of the decision of the then Intermediate or other representative of a deceased person or a person of
Appellate Court, now Court of Appeals is REVERSED and SET unsound mind; 3. The subject-matter of the action is a claim or
ASIDE. The decision of the appellate court is MODIFIED in that demand against the estate of such deceased person or against
all cash and stock dividends as, well as all pre-emptive rights that person of unsound mind; 4. His testimony refers to any matter of
have accrued and attached to the 1,500 shares in E. Razon, Inc., fact which occurred before the death of such deceased person or
since 1966 are declared to belong to the estate of Juan T. before such person became of unsound mind.”
Chuidian.
Same; Same; Same; Same; When it is the executor or
SO ORDERED. administrator or representatives of the estate that sets up the
counterclaim, the plaintiff, herein respondent, may testify to
occurrences before the death of the deceased to defeat the
counterclaim.—Two reasons forestall the application of the “Dead
Man’s Statute” to this case. First, petitioners filed a compulsory
counterclaim against respondent in their answer before the trial
court, and with the filing of their counterclaim, petitioners
themselves effectively removed this case from the ambit of the
“Dead Man’s Statute.” Well entrenched is the rule that when it is
the executor or administrator or representatives of the estate that
51. SUNGA-CHAN VS CHUA sets up the counterclaim, the plaintiff, herein respondent, may
testify to occurrences before the death of the deceased to defeat
the counterclaim. Moreover, as defendant in the counterclaim,
respondent is not disqualified from testifying as to matters of fact

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CASES ON EVIDENCE

occurring before the death of the deceased, said action not having respondent, Erlinda Sy. As compensation, Jacinto would receive a
been brought against but by the estate or representatives of the manager's fee or remuneration of 10% of the gross profit and
deceased. Josephine would receive 10% of the net profits, in addition to her
wages and other remuneration from the business.
GONZAGA-REYES, J.:
Allegedly, from the time that Shellite opened for business on July
Before us is a petition for review on certiorari under Rule 45 of 8, 1977, its business operation went quite and was profitable.
the Rules of Court of the Decision1 of the Court of Appeals dated Respondent claimed that he could attest to success of their
January 31, 2000 in the case entitled "Lamberto T. Chua vs. business because of the volume of orders and deliveries of filled
Lilibeth Sunga Chan and Cecilia Sunga" and of the Resolution Shellane cylinder tanks supplied by Pilipinas Shell Petroleum
dated May 23, 2000 denying the motion for reconsideration of Corporation. While Jacinto furnished respondent with the
herein petitioners Lilibeth Sunga and Cecilia Sunga (hereafter merchandise inventories, balance sheets and net worth of Shellite
collectively referred to as petitioners). from 1977 to 1989, respondent however suspected that the
amount indicated in these documents were understated and
The pertinent facts of this case are as follows: undervalued by Jacinto and Josephine for their own selfish
reasons and for tax avoidance.
On June 22, 1992, Lamberto T. Chua (hereafter respondent) filed
a complaint against Lilibeth Sunga Chan (hereafter petitioner Upon Jacinto's death in the later part of 1989, his surviving wife,
Lilibeth) and Cecilia Sunga (hereafter petitioner Cecilia), daughter petitioner Cecilia and particularly his daughter, petitioner
and wife, respectively of the deceased Jacinto L. Sunga (hereafter Lilibeth, took over the operations, control, custody, disposition
Jacinto), for "Winding Up of Partnership Affairs, Accounting, and management of Shellite without respondent's consent.
Appraisal and Recovery of Shares and Damages with Writ of Despite respondent's repeated demands upon petitioners for
Preliminary Attachment" with the Regional Trial Court, Branch accounting, inventory, appraisal, winding up and restitution of
11, Sindangan, Zamboanga del Norte. his net shares in the partnership, petitioners failed to comply.
Petitioner Lilibeth allegedly continued the operations of Shellite,
Respondent alleged that in 1977, he verbally entered into a converting to her own use and advantage its properties.
partnership with Jacinto in the distribution of Shellane Liquefied
Petroleum Gas (LPG) in Manila. For business convenience, On March 31, 1991, respondent claimed that after petitioner
respondent and Jacinto allegedly agreed to register the business Lilibeth ran out the alibis and reasons to evade respondent's
name of their partnership, SHELLITE GAS APPLIANCE CENTER demands, she disbursed out of the partnership funds the amount
(hereafter Shellite), under the name of Jacinto as a sole of P200,000.00 and partially paid the same to respondent.
proprietorship. Respondent allegedly delivered his initial capital Petitioner Lilibeth allegedly informed respondent that the
contribution of P100,000.00 to Jacinto while the latter in turn P200,000.00 represented partial payment of the latter's share in
produced P100,000.00 as his counterpart contribution, with the the partnership, with a promise that the former would make the
intention that the profits would be equally divided between them. complete inventory and winding up of the properties of the
The partnership allegedly had Jacinto as manager, assisted by business establishment. Despite such commitment, petitioners
Josephine Sy (hereafter Josephine), a sister of the wife allegedly failed to comply with their duty to account, and

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continued to benefit from the assets and income of Shellite to the

damage and prejudice of respondent. On November 29, 1993, petitioners filed with the trial court a
Motion to Suspend Pre-trial Conference.
On December 19, 1992, petitioners filed a Motion to Dismiss on
the ground that the Securities and Exchange Commission (SEC) On December 13, 1993, the trial court granted the motion to
in Manila, not the Regional Trial Court in Zamboanga del Norte suspend pre-trial conference.
had jurisdiction over the action. Respondent opposed the motion
to dismiss. On November 15, 1994, the Court of Appeals denied the petition
for lack of merit.
On January 12, 1993, the trial court finding the complaint
sufficient in from and substance denied the motion to dismiss. On January 16, 1995, this Court denied the petition for review on
certiorari filed by petitioner, "as petitioners failed to show that a
On January 30, 1993, petitioners filed their Answer with reversible error was committed by the appellate court."2
Compulsory Counter-claims, contending that they are not liable
for partnership shares, unreceived income/profits, interests, On February 20, 1995, entry of judgment was made by the Clerk
damages and attorney's fees, that respondent does not have a of Court and the case was remanded to the trial court on April 26,
cause of action against them, and that the trial court has no 1995.
jurisdiction over the nature of the action, the SEC being the
agency that has original and exclusive jurisdiction over the case. On September 25, 1995, the trial court terminated the pre-trial
As counterclaim, petitioner sought attorney's fees and expenses of conference and set the hearing of the case of January 17, 1996.
litigation. Respondent presented his evidence while petitioners were
considered to have waived their right to present evidence for their
On August 2, 1993, petitioner filed a second Motion to Dismiss failure to attend the scheduled date for reception of evidence
this time on the ground that the claim for winding up of despite notice.
partnership affairs, accounting and recovery of shares in
partnership affairs, accounting and recovery of shares in On October 7, 1997, the trial court rendered its Decision ruling
partnership assets/properties should be dismissed and for respondent. The dispositive of the Decision reads:
prosecuted against the estate of deceased Jacinto in a probate or
intestate proceeding. "WHEREFORE, judgment is hereby rendered in favor of the
plaintiff and against the defendants, as follows:
On August 16, 1993, the trial denied the second motion to
dismiss for lack of merit. (1) DIRECTING them to render an accounting in acceptable form
under accounting procedures and standards of the properties,
On November 26, 1993, petitioners filed their Petition for assets, income and profits of the Shellite Gas Appliance Center
Certiorari, Prohibition and Mandamus with the Court of Appeals Since the time of death of Jacinto L. Sunga, from whom they
docketed as CA-G.R. SP No. 32499 questioning the denial of the continued the business operations including all businesses
motion to dismiss. derived from Shellite Gas Appliance Center, submit an inventory,

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CASES ON EVIDENCE

and appraisal of all these properties, assets, income, profits etc.

to the Court and to plaintiff for approval or disapproval; On October 28, 1997, petitioners filed a Notice of Appeal with the
trial court, appealing the case to the Court of Appeals.
(2) ORDERING them to return and restitute to the partnership
any and all properties, assets, income and profits they misapplied On January 31, 2000, the Court of Appeals dismissed the appeal.
and converted to their own use and advantage the legally pertain The dispositive portion of the Decision reads:
to the plaintiff and account for the properties mentioned in pars.
A and B on pages 4-5 of this petition as basis; "WHEREFORE, the instant appeal is dismissed. The appealed
decision is AFFIRMED in all respects."4
(3) DIRECTING them to restitute and pay to the plaintiff ½ shares
and interest of the plaintiff in the partnership of the listed On May 23, 2000, the Court of Appeals denied the motion for
properties, assets and good will (sic) in schedules A, B and C, on reconsideration filed by petitioner.
pages 4-5 of the petition;
Hence, this petition wherein petitioner relies upon following
(4) ORDERING them to pay the plaintiff earned but unreceived grounds:
income and profits from the partnership from 1988 to May 30,
1992, when the plaintiff learned of the closure of the store the "1. The Court of Appeals erred in making a legal conclusion that
sum of P35,000.00 per month, with legal rate of interest until there existed a partnership between respondent Lamberto T.
fully paid; Chua and the late Jacinto L. Sunga upon the latter'' invitation
and offer and that upon his death the partnership assets and
(5) ORDERING them to wind up the affairs of the partnership and business were taken over by petitioners.
terminate its business activities pursuant to law, after delivering
to the plaintiff all the ½ interest, shares, participation and equity 2. The Court of Appeals erred in making the legal conclusion that
in the partnership, or the value thereof in money or money's laches and/or prescription did not apply in the instant case.
worth, if the properties are not physically divisible;
3. The Court of Appeals erred in making the legal conclusion that
(6) FINDING them especially Lilibeth Sunga-Chan guilty of breach there was competent and credible evidence to warrant the finding
of trust and in bad faith and hold them liable to the plaintiff the of a partnership, and assuming arguendo that indeed there was a
sum of P50,000.00 as moral and exemplary damages; and, partnership, the finding of highly exaggerated amounts or values
in the partnership assets and profits."5
(7) DIRECTING them to reimburse and pay the sum of
P25,000.00 as attorney's (sic) and P25,000.00 as litigation Petitioners question the correctness of the finding of the trial
expenses. court and the Court of Appeals that a partnership existed
between respondent and Jacinto from 1977 until Jacinto's death.
NO special pronouncements as to COSTS. In the absence of any written document to show such partnership
between respondent and Jacinto, petitioners argues that these
SO ORDERED."3 courts were proscribes from hearing the testimonies of

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CASES ON EVIDENCE

respondent and his witness, Josephine, to prove the alleged applies to this case so as to render inadmissible respondent's
partnership three years after Jacinto's death. To support this testimony and that of his witness, Josephine.
argument, petitioners invoke the "Dead Man's Statute' or
"Survivorship Rule" under Section 23, Rule 130 of the Rules of The "Dead Man's Statute" provides that if one party to the alleged
Court that provides: transaction is precluded from testifying by death, insanity, or
other mental disabilities, the surviving party is not entitled to the
"SEC. 23. Disqualification by reason of death or insanity of undue advantage of giving his own uncontradicted and
adverse party. – Parties or assignors of parties to a case, or unexplained account of the transaction.9 But before this rule can
persons in whose behalf a case is prosecuted, against an executor be successfully invoked to bar the introduction of testimonial
or administrator or other representative of a deceased person, or evidence, it is necessary that:
against a person of unsound mind, upon a claim or demand
against the estate of such deceased person, or against such "1. The witness is a party or assignor of a party to case or persons
person of unsound mind, cannot testify as to any matter of fact in whose behalf a case in prosecuted.
occurring before the death of such deceased person or before
such person became of unsound mind." 2. The action is against an executor or administrator or other
representative of a deceased person or a person of unsound mind;
Petitioners thus implore this Court to rule that the testimonies of
respondent and his alter ego, Josephine, should not have been 3. The subject-matter of the action is a claim or demand against
admitted to prove certain claims against a deceased person the estate of such deceased person or against person of unsound
(Jacinto), now represented by petitioners. mind;

We are not persuaded. 4. His testimony refers to any matter of fact of which occurred
before the death of such deceased person or before such person
A partnership may be constituted in any form, except where became of unsound mind."10
immovable property of real rights are contributed thereto, in
which case a public instrument shall necessary.6 Hence, based Two reasons forestall the application of the "Dead Man's Statute"
on the intention of the parties, as gathered from the facts and to this case.
ascertained from their language and conduct, a verbal contract of
partnership may arise.7 The essential profits that must be proven First, petitioners filed a compulsory counterclaim11 against
to that a partnership was agreed upon are (1) mutual respondents in their answer before the trial court, and with the
contribution to a common stock, and (2) a joint interest in the filing of their counterclaim, petitioners themselves effectively
profits.8 Understandably so, in view of the absence of the written removed this case from the ambit of the "Dead Man's Statute".12
contract of partnership between respondent and Jacinto, Well entrenched is the rule that when it is the executor or
respondent resorted to the introduction of documentary and administrator or representatives of the estates that sets up the
testimonial evidence to prove said partnership. The crucial issue counterclaim, the plaintiff, herein respondent, may testify to
to settle then is to whether or not the "Dead Man's Statute" occurrences before the death of the deceased to defeat the
counterclaim.13 Moreover, as defendant in the counterclaim,

372
CASES ON EVIDENCE

respondent is not disqualified from testifying as to matters of established between respondent and Jacinto. Based not only on
facts occurring before the death of the deceased, said action not the testimonial evidence, but the documentary evidence as well,
having been brought against but by the estate or representatives the trial court and the Court of Appeals considered the evidence
of the deceased.14 for respondent as sufficient to prove the formation of partnership,
albeit an informal one.
Second, the testimony of Josephine is not covered by the "Dead
Man's Statute" for the simple reason that she is not "a party or Notably, petitioners did not present any evidence in their favor
assignor of a party to a case or persons in whose behalf a case is during trial. By the weight of judicial precedents, a factual matter
prosecuted." Records show that respondent offered the testimony like the finding of the existence of a partnership between
of Josephine to establish the existence of the partnership between respondent and Jacinto cannot be inquired into by this Court on
respondent and Jacinto. Petitioners' insistence that Josephine is review.17 This Court can no longer be tasked to go over the proofs
the alter ego of respondent does not make her an assignor presented by the parties and analyze, assess and weigh them to
because the term "assignor" of a party means "assignor of a cause ascertain if the trial court and the appellate court were correct in
of action which has arisen, and not the assignor of a right according superior credit to this or that piece of evidence of one
assigned before any cause of action has arisen."15 Plainly then, party or the other.18 It must be also pointed out that petitioners
Josephine is merely a witness of respondent, the latter being the failed to attend the presentation of evidence of respondent.
party plaintiff. Petitioners cannot now turn to this Court to question the
admissibility and authenticity of the documentary evidence of
We are not convinced by petitioners' allegation that Josephine's respondent when petitioners failed to object to the admissibility of
testimony lacks probative value because she was allegedly the evidence at the time that such evidence was offered.19
coerced coerced by respondent, her brother-in-law, to testify in
his favor, Josephine merely declared in court that she was With regard to petitioners' insistence that laches and/or
requested by respondent to testify and that if she were not prescription should have extinguished respondent's claim, we
requested to do so she would not have testified. We fail to see how agree with the trial court and the Court of Appeals that the action
we can conclude from this candid admission that Josephine's for accounting filed by respondents three (3) years after Jacinto's
testimony is involuntary when she did not in any way death was well within the prescribed period. The Civil Code
categorically say that she was forced to be a witness of provides that an action to enforce an oral contract prescribes in
respondent. six (6) years20 while the right to demand an accounting for a
partner's interest as against the person continuing the business
Also, the fact that Josephine is the sister of the wife of respondent accrues at the date of dissolution, in the absence of any contrary
does not diminish the value of her testimony since relationship agreement.21 Considering that the death of a partner results in
per se, without more, does not affect the credibility of the dissolution of the partnership22 , in this case, it was Jacinto's
witnesses.16 death that respondent as the surviving partner had the right to
an account of his interest as against petitioners. It bears stressing
Petitioners' reliance alone on the "Dead Man's Statute" to defeat that while Jacinto's death dissolved the partnership, the
respondent's claim cannot prevail over the factual findings of the dissolution did not immediately terminate the partnership. The
trial court and the Court of Appeals that a partnership was Civil Code23 expressly provides that upon dissolution, the

373
CASES ON EVIDENCE

partnership continues and its legal personality is retained until

the complete winding up of its business, culminating in its
termination.24

In a desperate bid to cast doubt on the validity of the oral

partnership between respondent and Jacinto, petitioners
maintain that said partnership that had initial capital of
P200,000.00 should have been registered with the Securities and 52. SANTOS VS SANTOS
Exchange Commission (SEC) since registration is mandated by
the Civil Code, True, Article 1772 of the Civil Code requires that Evidence; Witnesses; Dead Man’s Statute; Where a party fails to
partnerships with a capital of P3,000.00 or more must register appeal an order allowing the other party who is covered by the
with the SEC, however, this registration requirement is not dead man’s statute to testify, he waives his right to invoke the
mandatory. Article 1768 of the Civil Code25 explicitly provides said rule; Protection under the dead man’s statute is effectively
that the partnership retains its juridical personality even if it fails waived by counsel’s cross-examination of the other party on
to register. The failure to register the contract of partnership does matter occurring during the deceased’s lifetime.—Lastly,
not invalidate the same as among the partners, so long as the petitioner in her memorandum seeks to expunge the testimony of
contract has the essential requisites, because the main purpose Rosa Santos-Carreon before the trial court in view of Sec. 23,
of registration is to give notice to third parties, and it can be Rule 130 of the Revised Rules of Court, otherwise known as the
assumed that the members themselves knew of the contents of “Dead Man’s Statute.” It is too late for petitioner, however, to
their contract.26 In the case at bar, non-compliance with this invoke said rule. The trial court in its order dated February 5,
directory provision of the law will not invalidate the partnership 1990, denied petitioner’s motion to disqualify respondent Rosa as
considering that the totality of the evidence proves that a witness. Petitioner did not appeal therefrom. Trial ensued and
respondent and Jacinto indeed forged the partnership in Rosa testified as a witness for respondents and was cross-
question. examined by petitioner’s counsel. By her failure to appeal from
the order allowing Rosa to testify, she waived her right to invoke
WHEREFORE, in view of the foregoing, the petition is DENIED the dead man’s statute. Further, her counsel cross-examined
and the appealed decision is AFFIRMED. Rosa on matters that occurred during Salvador’s lifetime. In Goñi
vs. CA, 144 SCRA 222, 231 (1986), we held that protection under
SO ORDERED. the dead man’s statute is effectively waived when a counsel for a
petitioner cross-examines a private respondent on matters
occurring during the deceased’s lifetime. The Court of Appeals
cannot be faulted in ignoring petitioner on Rosa’s disqualification.

QUISUMBING, J.:

This petition for review1 seeks to annul and set aside the decision
date March 10, 1998 of the Court of Appeals that affirmed the

374
CASES ON EVIDENCE

decision of the Regional Trial Court of Manila, Branch 48, dated for his business and providing him with greater business
March 17, 1993. Petitioner also seeks to annul the resolution that flexibility.
denied her motion for reconsideration.
In her Answer, Zenaida denied the material allegations in the
Petitioner Zenaida M. Santos is the widow of Salvador Santos, a complaint as special and affirmative defenses, argued that
brother of private respondents Calixto, Alberto, Antonio, all Salvador was the registered owner of the property, which could
surnamed Santos and Rosa Santos-Carreon. only be subjected to encumbrances or liens annotated on the title;
that the respondents' right to reconveyance was already barred by
The spouses Jesus and Rosalia Santos owned a parcel of land prescription and laches; and that the complaint state no cause of
registered under TCT No. 27571 with an area of 154 square action.
meters, located at Sta. Cruz Manila. On it was a four-door
apartment administered by Rosalia who rented them out. The On March 17, 1993, the trial court decided in private
spouses had five children, Salvador, Calixto, Alberto, Antonio and respondents' favor, thus:
Rosa.
WHEREFORE, viewed from all the foregoing considerations,
On January 19, 1959, Jesus and Rosalia executed a deed of sale judgment is hereby made in favor of the plaintiffs and against the
of the properties in favor of their children Salvador and Rosa. TCT defendants:
No. 27571 became TCT No. 60819. Rosa in turn sold her share to
Salvador on November 20, 1973 which resulted in the issuance of a) Declaring Exh. "B", the deed of sale executed by Rosalia Santos
a new TCT No. 113221. Despite the transfer of the property to and Jesus Santos on January 19, 1959, as entirely null and void
Salvador, Rosalia continued to lease receive rentals form the for being fictitious or stimulated and inexistent and without any
apartment units.1âwphi1.nêt legal force and effect:

On November 1, 1979, Jesus died. Six years after or on January b) Declaring Exh. "D", the deed of sale executed by Rosa Santos in
9, 1985, Salvador died, followed by Rosalia who died the following favor of Salvador Santos on November 20, 1973, also as entirely
month. Shortly after, petitioner Zenaida, claiming to be Salvador's null and void for being likewise fictitious or stimulated and
heir, demanded the rent from Antonio Hombrebueno,2 a tenant of inexistent and without any legal force and effect;
Rosalia. When the latter refused to pay, Zenaida filed and
ejectment suit against him with the Metropolitan Trial Court of c) Directing the Register of Deeds of Manila to cancel Transfer
Manila, Branch 24, which eventually decided in Zenaida's favor. Certificate of Title No. T-113221 registered in the name of
Salvador Santos, as well as, Transfer Certificate of Title No. 60819
On January 5, 1989, private respondents instituted an action for in the names of Salvador Santos, Rosa Santos, and consequently
reconveyance of property with preliminary injunction against thereafter, reinstating with the same legal force and effect as if
petitioner in the Regional Trial Court of Manila, where they the same was not cancelled, and which shall in all respects be
alleged that the two deeds of sale executed on January 19, 1959 entitled to like faith and credit; Transfer Certificate of Title No. T-
and November 20, 1973 were simulated for lack of consideration. 27571 registered in the name of Rosalia A. Santos, married to
They were executed to accommodate Salvador in generation funds

375
CASES ON EVIDENCE

Jesus Santos, the same to be partitioned by the heirs of the said

registered owners in accordance with law; and WHEREFORE, finding no reversible error in the decision appealed
from, the same is hereby AFFIRMED. No pronouncement as to
d) Making the injunction issued in this case permanent. costs.

Without pronouncement as to costs. SO ORDERED.6

SO OREDERED.3 Hence, this petition where petitioner avers that the Court of
Appeals erred in:
The trial court reasoned that notwithstanding the deeds of sale
transferring the property to Salvador, the spouses Rosalia and I.
Jesus continued to possess the property and to exercise rights of
ownership not only by receiving the monthly rentals, but also by … HOLDING THAT THE OWNERSHIP OVER THE LITIGATED
paying the realty taxes. Also, Rosalia kept the owner's duplicate PROPERTY BY THE LATE HUSBAND OF DEFENDANT-
copy of the title even after it was already in the name of Salvador. APPELLANT WAS AFFECTED BY HIS FAILURE TO EXERCISE
Further, the spouses had no compelling reason in 1959 to sell the CERTAIN ATTRIBUTES OF OWNERSHIP.
property and Salvador was not financially capable to purchase it.
The deeds of sale were therefore fictitious. Hence, the action to II.
assail the same does not prescribe.4
…HOLDING THAT DUE EXECUTION OF A PUBLIC INSTRUMENT
Upon appeal, the Court of Appeals affirmed the trial court's IS NOT EQUIVALENT TO DELIVERY OF THE LAND IN DISPUTE.
decision dated March 10, 1998. It held that in order for the
execution of a public instrument to effect tradition, as provided in III.
Article 1498 of the Civil Code,5 the vendor shall have had control
over the thing sold, at the moment of sale. It was not enough to …NOT FINDING THAT THE CAUSE OF ACTION OF ROSALIA
confer upon the purchaser the ownership and the right of SANTOS HAD PRESCRIBED AND/OR BARRED BY LACHES.
possession. The thing sold must be placed in his control. The
subject deeds of sale did not confer upon Salvador the ownership IV.
over the subject property, because even after the sale, the original
vendors remained in dominion, control, and possession thereof. … IGNORING PETITIONER'S ALLEGATION TO THE EFFECT
The appellate court further said that if the reason for Salvador's THAT PLAINTIFF DR. ROSA [S.] CARREON IS NOT
failure to control and possess the property was due to his DISQUALIFIED TO TESTIFY AS TO THE QUESTIONED DEEDS
acquiescence to his mother, in deference to Filipino custom, OF SALE CONSIDERING THAT SALVADOR SANTOS HAS LONG
petitioner, at least, should have shown evidence to prove that her BEEN DEAD.7
husband declared the property for tax purposes in his name or
paid the land taxes, acts which strongly indicate control and In this petition, we are asked to resolve the following:
possession. The appellate court disposed:

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CASES ON EVIDENCE

1. Are payments of realty taxes and retention of possession

indications of continued ownership by the original owners? Petitioner argues that Salvador, in allowing her mother to use the
property even after the sale, did so out of respect for her and out
2. Is a sale through a public instrument tantamount to delivery of of generosity, a factual matter beyond the province of this
the thing sold? Court.14 Significantly, in Alcos vs. IAC 162 SCRA 823, 837
(1988), we noted that the buyer's immediate possession and
3. Did the cause of action of Rosalia Santos and her heirs occupation of the property corroborated the truthfulness and
prescribe? authenticity of the deed of sale. Conversely, the vendor's
continued possession of the property makes dubious the contract
4. Can petitioner invoke the "Dead Man's Statute?"8 of sale between the parties.

On the first issue, petitioner contends that the Court of Appeals On the second issue, is a sale through a public instrument
erred in holding that despite the deeds of sale in Salvador's favor, tantamount to delivery of the thing sold? Petitioner in her
Jesus and Rosalia still owned the property because the spouses memorandum invokes Article 147715 of the Civil Code which
continued to pay the realty taxes and possess the property. She provides that ownership of the thing sold is transferred to the
argues that tax declarations are not conclusive evidence of vendee upon its actual or constructive delivery. Article 1498, in
ownership when not supported by evidence. She avers that turn, provides that when the sale is made through a public
Salvador allowed his mother to possess the property out of instrument, its execution is equivalent to the delivery of the thing
respect to her in accordance with Filipino values. subject of the contract. Petitioner avers that applying said
provisions to the case, Salvador became the owner of the subject
It is true that neither tax receipts nor declarations of ownership property by virtue of the two deeds of sale executed in his favor.
for taxation purposes constitute sufficient proof of ownership.
They must be supported by other effective proofs.9 These Nowhere in the Civil Code, however, does it provide that execution
requisite proofs we find present in this case. As admitted by of a deed of sale is a conclusive presumption of delivery of
petitioner, despite the sale, Jesus and Rosalia continued to possession. The Code merely said that the execution shall be
possess and administer the property and enjoy its fruits by equivalent to delivery. The presumption can be rebutted by clear
leasing it to third persons.10 Both Rosa and Salvador did not and convincing evidence.16 Presumptive delivery can be negated
exercise any right of ownership over it.11 Before the second deed by the failure of the vendee to take actual possession of the land
of sale to transfer her ½ share over the property was executed by sold.17
Rosa, Salvador still sought she permission of his mother.12
Further, after Salvador registered the property in his name, he In Danguilan vs. IAC, 168 SCRA 22, 32 (1988), we held that for
surrendered the title to his mother.13 These are clear indications the execution of a public instrument to effect tradition, the
that ownership still remained with the original owners. In Serrano purchaser must be placed in control of the thing sold. When there
vs. CA, 139 SCRA 179, 189 (1985), we held that the continued is no impediment to prevent the thing sold from converting to
collection of rentals from the tenants by the seller of realty after tenancy of the purchaser by the sole will of the vendor, symbolic
execution of alleged deed of sale is contrary to the notion of delivery through the execution of a public instrument is
ownership. sufficient. But if, notwithstanding the execution of the

377
CASES ON EVIDENCE

instrument, the purchaser cannot have the enjoyment and action for the declaration of its nullity, which does not prescribe.
material tenancy nor make use of it himself or through another in This applies squarely to the present case. The complaint filed by
his name, then delivery has not been effected. respondent in the court a quo was for the reconveyance of the
subject property to the estate of Rosalia since the deeds of sale
As found by both the trial and appellate courts and amply were simulated and fictitious. The complaint amounts to a
supported by the evidence on record, Salvador was never placed declaration of nullity of a void contract, which is imprescriptible.
in control of the property. The original sellers retained their Hence, respondents' cause of action has not prescribed.
control and possession. Therefore, there was no real transfer of
ownership. Neither is their action barred by laches. The elements of laches
are: 1) conduct on the part of the defendant, or of one under
Moreover, in Norkis Distributors, Inc. vs. CA, 193 SCRA 694, whom he claims, giving rise to the situation of which the
698-699 (1991), citing the land case of Abuan vs. Garcia, 14 complaint seeks a remedy; 2) delay in asserting the complainant's
SCRA 759 (1965), we held that the critical factor in the different rights, the complainant having had knowledge or notice of the
modes of effecting delivery, which gives legal effect to the act is defendant's conduct as having been afforded an opportunity to
the actual intention of the vendor to deliver, and its acceptance by institute a suit; 3) lack of knowledge or notice on the part of the
the vendee. Without that intention, there is no tradition. In the defendant that the complainant would assert the right in which
instant case, although the spouses Jesus and Rosalia executed a he bases his suit; and 4) injury or prejudice to the defendant in
deed of sale, they did not deliver the possession and ownership of the event relief is accorded to the complainant, or the suit is not
the property to Salvador and Rosa. They agreed to execute a deed held barred.18 These elements must all be proved positively. The
of sale merely to accommodate Salvador to enable him to generate conduct which caused the complaint in the court a quo was
funds for his business venture. petitioner's assertion of right of ownership as heir of Salvador.
This started in December 1985 when petitioner demanded
On the third issue, petitioner argues that from the date of the sale payment of the lease rentals from Antonio Hombrebueno, the
from Rosa to Salvador on November 20, 1973, up to his death on tenant of the apartment units. From December 1985 up to the
January 9, 1985, more or less twelve years had lapsed, and from filing of the complaint for reconveyance on January 5, 1989, only
his death up to the filing of the case for reconveyance in the court less than four years had lapsed which we do not think is
a quo on January 5, 1989, four years had lapsed. In other words, unreasonable delay sufficient to bar respondents' cause of action.
it took respondents about sixteen years to file the case below. We likewise find the fourth element lacking. Neither petitioner nor
Petitioner argues that an action to annul a contract for lack of her husband made considerable investments on the property from
consideration prescribes in ten years and even assuming that the the time it was allegedly transferred to the latter. They also did
cause of action has not prescribed, respondents are guilty of not enter into transactions involving the property since they did
laches for their inaction for a long period of time. not claim ownership of it until December 1985. Petitioner stood to
lose nothing. As we held in the same case of Lacsamana vs. CA,
Has respondents' cause of action prescribed? In Lacsamana vs. cited above, the concept of laches is not concerned with the lapse
CA, 288 SCRA 287, 292 (1998), we held that the right to file an of time but only with the effect of unreasonble lapse. In this case,
action for reconveyance on the ground that the certificate of title the alleged 16 years of respondents' inaction has no adverse effect
was obtained by means of a fictitious deed of sale is virtually an on the petitioner to make respondents guilty of laches.

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CASES ON EVIDENCE

Lastly, petitioner in her memorandum seeks to expunge the

testimony of Rosa Santos-Carreon before the trial court in view of
Sec. 23, Rule 130 of the Revised Rules of Court, otherwise known
as the "Dead Man's Statute."19 It is too late for petitioner,
however, to invoke said rule. The trial court in its order dated
February 5, 1990, denied petitioner's motion to disqualify
respondent Rosa as a witness. Petitioner did not appeal
therefrom. Trial ensued and Rosa testified as a witness for
respondents and was cross-examined by petitioner's counsel. By
her failure to appeal from the order allowing Rosa to testify, she
waived her right to invoke the dean man's statute. Further, her
counsel cross-examined Rosa on matters that occurred during
Salvadors' lifetime. In Goñi vs. CA, 144 SCRA 222, 231 (1986) we 53. NERI VS SENATE COMMITTEEES ON ACCOUNTABILITY
held that protection under the dead man's statute is effectively OF PUBLIC OFFICERS AND INVERSTIGATIONS
waived when a counsel for a petitioner cross-examines a private
respondent on matters occurring during the deceased's lifetime. Same; Rules of Procedure; It cannot be gainsaid that rules of
The Court of appeals cannot be faulted in ignoring petitioner on proceedings are a necessity in preserving order, decency and
Rosa's disqualification.1âwphi1.nêt regularity in a dignified public body.—It cannot be gainsaid that
rules of proceedings are a necessity in preserving order, decency
WHEREFORE, the instant petition is DENIED. The assailed and regularity in a dignified public body. These rules are weapons
decision dated March 10, 1998 of the Court of Appeals, which of the weaker party to defend themselves from irregularities and
sustained the judgment of the Regional Trial Court dated March abuses “which the wantonness of power is but too often apt to
17, 1993, in favor of herein private respondents, is AFFIRMED. suggest to large and successful majorities.” Thomas Jefferson
Costs against petitioner. stated in the opening of his widely used, A Manual of
Parliamentary Practice, viz.: “Mr. Onslow, the ablest among the
SO ORDERED. Speakers of the House of Commons, used to say, ‘It was a maxim
he had often heard when he was a young man, from old and
experienced members, that nothing tended more to throw power
into the hands of the administration and those who acted with
the majority of the House of Commons, than in neglect of, or
departure from, the rules of proceeding; that these forms, as
instituted by our ancestors, operated as a check, and control, on
the actions of the majority; and that they were, in many
instances, a shelter and protection to the minority, against the
attempts of power.’ ”

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Same; Same; Same; The unbroken practice of the Senate of not at decisions in the exercise of the functions of the Presidency
adopting Rules of Procedure Governing Inquiries and publishing under the Constitution. The confidentiality of the President’s
the same in every Congress, owing to its nature as a continuing conversations and correspondence is not unique. It is akin to the
body, is not something to be lightly brushed aside, especially confidentiality of judicial deliberations. It possesses the same
considering the grave consequences of cutting this continuity; value as the right to privacy of all citizens and more, because it is
Where rights are not violated, the Court ought not like lightning dictated by public interest and the constitutionally ordained
strike down a valid rule and practice of a co-equal branch of separation of governmental powers.
government, lest the walls delineating powers be burned.—The
unbroken practice of the Senate of not adopting Rules of In these proceedings, this Court has been called upon to exercise
Procedure Governing Inquiries and publishing the same in every its power of review and arbitrate a hotly, even acrimoniously,
Congress, owing to its nature as a continuing body, is not debated dispute between the Court’s co-equal branches of
something to be lightly brushed aside, especially considering the government. In this task, this Court should neither curb the
grave consequences of cutting this continuity. Holding itself to be legitimate powers of any of the co-equal and coordinate branches
a continuing body, the Senate has dispensed with the adoption of government nor allow any of them to overstep the boundaries
not only of Rules of Procedure Governing Inquiries, but also of set for it by our Constitution. The competing interests in the case
Senate rules (of proceedings) at the start of every Congress in the at bar are the claim of executive privilege by the President, on the
last ten years. As a consequence of the absence of rules if the one hand, and the respondent Senate Committees’ assertion of
Senate is held to be not a continuing body, its acts during these their power to conduct legislative inquiries, on the other. The
Congresses may be put into question. A mathematical calculation particular facts and circumstances of the present case, stripped
of a quorum in view of the staggered terms of the Senate of the politically and emotionally charged rhetoric from both sides
membership cannot simply subvert the deeply-entrenched and viewed in the light of settled constitutional and legal
thought-out rationale for the design of a continuing and stable doctrines, plainly lead to the conclusion that the claim of
Senate, shown to be necessary in promoting effective government executive privilege must be upheld.
and protecting liberties. Where rights are not violated, the Court
ought not like lightning strike down a valid rule and practice of a Assailed in this motion for reconsideration is our Decision dated
co-equal branch of government, lest the walls delineating powers March 25, 2008 (the "Decision"), granting the petition for
be burned. certiorari filed by petitioner Romulo L. Neri against the
respondent Senate Committees on Accountability of Public
LEONARDO-DE CASTRO, J.: Officers and Investigations,1 Trade and Commerce,2 and National
Defense and Security (collectively the "respondent Committees").3
Executive privilege is not a personal privilege, but one that
adheres to the Office of the President. It exists to protect public A brief review of the facts is imperative.
interest, not to benefit a particular public official. Its purpose,
among others, is to assure that the nation will receive the benefit On September 26, 2007, petitioner appeared before respondent
of candid, objective and untrammeled communication and Committees and testified for about eleven (11) hours on matters
exchange of information between the President and his/her concerning the National Broadband Project (the "NBN Project"), a
advisers in the process of shaping or forming policies and arriving project awarded by the Department of Transportation and

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Communications ("DOTC") to Zhong Xing Telecommunications discharge of her duties and responsibilities, if she is not protected
Equipment ("ZTE"). Petitioner disclosed that then Commission on by the confidentiality of her conversations.
Elections ("COMELEC") Chairman Benjamin Abalos offered him
P200 Million in exchange for his approval of the NBN Project. He The context in which executive privilege is being invoked is that
further narrated that he informed President Gloria Macapagal the information sought to be disclosed might impair our
Arroyo ("President Arroyo") of the bribery attempt and that she diplomatic as well as economic relations with the People’s
instructed him not to accept the bribe. However, when probed Republic of China. Given the confidential nature in which these
further on President Arroyo and petitioner’s discussions relating information were conveyed to the President, he cannot provide the
to the NBN Project, petitioner refused to answer, invoking Committee any further details of these conversations, without
"executive privilege." To be specific, petitioner refused to answer disclosing the very thing the privilege is designed to protect.
questions on: (a) whether or not President Arroyo followed up the
NBN Project,4 (b) whether or not she directed him to prioritize it,5 In light of the above considerations, this Office is constrained to
and (c) whether or not she directed him to approve it.6 invoke the settled doctrine of executive privilege as refined in
Senate v. Ermita, and has advised Secretary Neri accordingly.
Respondent Committees persisted in knowing petitioner’s
answers to these three questions by requiring him to appear and Considering that Sec. Neri has been lengthily interrogated on the
testify once more on November 20, 2007. On November 15, 2007, subject in an unprecedented 11-hour hearing, wherein he has
Executive Secretary Eduardo R. Ermita wrote to respondent answered all questions propounded to him except the foregoing
Committees and requested them to dispense with petitioner’s questions involving executive privilege, we therefore request that
testimony on the ground of executive privilege.7 The letter of his testimony on 20 November 2007 on the ZTE / NBN project be
Executive Secretary Ermita pertinently stated: dispensed with.

Following the ruling in Senate v. Ermita, the foregoing questions On November 20, 2007, petitioner did not appear before
fall under conversations and correspondence between the respondent Committees upon orders of the President invoking
President and public officials which are considered executive executive privilege. On November 22, 2007, the respondent
privilege (Almonte v. Vasquez, G.R. 95637, 23 May 1995; Chavez Committees issued the show-cause letter requiring him to explain
v. PEA, G.R. 133250, July 9, 2002). Maintaining the why he should not be cited in contempt. On November 29, 2007,
confidentiality of conversations of the President is necessary in in petitioner’s reply to respondent Committees, he manifested
the exercise of her executive and policy decision making process. that it was not his intention to ignore the Senate hearing and that
The expectation of a President to the confidentiality of her he thought the only remaining questions were those he claimed to
conversations and correspondences, like the value which we be covered by executive privilege. He also manifested his
accord deference for the privacy of all citizens, is the necessity for willingness to appear and testify should there be new matters to
protection of the public interest in candid, objective, and even be taken up. He just requested that he be furnished "in advance
blunt or harsh opinions in Presidential decision-making. as to what else" he "needs to clarify."
Disclosure of conversations of the President will have a chilling
effect on the President, and will hamper her in the effective Respondent Committees found petitioner’s explanations
unsatisfactory. Without responding to his request for advance

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notice of the matters that he should still clarify, they issued the unavailability of the information elsewhere by an appropriate
Order dated January 30, 2008; In Re: P.S. Res. Nos. 127,129,136 investigating authority. As to the second ground, we found that
& 144; and privilege speeches of Senator Lacson and Santiago (all respondent Committees committed grave abuse of discretion in
on the ZTE-NBN Project), citing petitioner in contempt of issuing the contempt order because (a) there was a valid claim of
respondent Committees and ordering his arrest and detention at executive privilege, (b) their invitations to petitioner did not
the Office of the Senate Sergeant-at-Arms until such time that he contain the questions relevant to the inquiry, (c) there was a
would appear and give his testimony. cloud of doubt as to the regularity of the proceeding that led to
their issuance of the contempt order, (d) they violated Section 21,
On the same date, petitioner moved for the reconsideration of the Article VI of the Constitution because their inquiry was not in
above Order.8 He insisted that he had not shown "any accordance with the "duly published rules of procedure," and (e)
contemptible conduct worthy of contempt and arrest." He they issued the contempt order arbitrarily and precipitately.
emphasized his willingness to testify on new matters, but
respondent Committees did not respond to his request for On April 8, 2008, respondent Committees filed the present motion
advance notice of questions. He also mentioned the petition for for reconsideration, anchored on the following grounds:
certiorari he previously filed with this Court on December 7,
2007. According to him, this should restrain respondent I
Committees from enforcing the order dated January 30, 2008
which declared him in contempt and directed his arrest and CONTRARY TO THIS HONORABLE COURT’S DECISION, THERE
detention. IS NO DOUBT THAT THE ASSAILED ORDERS WERE ISSUED BY
RESPONDENT COMMITTEES PURSUANT TO THE EXERCISE OF
Petitioner then filed his Supplemental Petition for Certiorari (with THEIR LEGISLATIVE POWER, AND NOT MERELY THEIR
Urgent Application for TRO/Preliminary Injunction) on February OVERSIGHT FUNCTIONS.
1, 2008. In the Court’s Resolution dated February 4, 2008, the
parties were required to observe the status quo prevailing prior to II
the Order dated January 30, 2008.
CONTRARY TO THIS HONORABLE COURT’S DECISION, THERE
On March 25, 2008, the Court granted his petition for certiorari CAN BE NO PRESUMPTION THAT THE INFORMATION
on two grounds: first, the communications elicited by the three (3) WITHHELD IN THE INSTANT CASE IS PRIVILEGED.
questions were covered by executive privilege; and second,
respondent Committees committed grave abuse of discretion in III
issuing the contempt order. Anent the first ground, we considered
the subject communications as falling under the presidential CONTRARY TO THIS HONORABLE COURT’S DECISION, THERE
communications privilege because (a) they related to a IS NO FACTUAL OR LEGAL BASIS TO HOLD THAT THE
quintessential and non-delegable power of the President, (b) they COMMUNICATIONS ELICITED BY THE SUBJECT THREE (3)
were received by a close advisor of the President, and (c) QUESTIONS ARE COVERED BY EXECUTIVE PRIVILEGE,
respondent Committees failed to adequately show a compelling CONSIDERING THAT:
need that would justify the limitation of the privilege and the

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A. THERE IS NO SHOWING THAT THE MATTERS FOR WHICH C. RESPONDENTS DULY ISSUED THE CONTEMPT ORDER IN
EXECUTIVE PRIVILEGE IS CLAIMED CONSTITUTE STATE ACCORDANCE WITH THEIR INTERNAL RULES.
SECRETS.
D. RESPONDENTS DID NOT VIOLATE THE REQUIREMENTS
B. EVEN IF THE TESTS ADOPTED BY THIS HONORABLE COURT UNDER ARTICLE VI, SECTION 21 OF THE CONSTITUTION
IN THE DECISION IS APPLIED, THERE IS NO SHOWING THAT REQUIRING THAT ITS RULES OF PROCEDURE BE DULY
THE ELEMENTS OF PRESIDENTIAL COMMUNICATIONS PUBLISHED, AND WERE DENIED DUE PROCESS WHEN THE
PRIVILEGE ARE PRESENT. COURT CONSIDERED THE OSG’S INTERVENTION ON THIS
ISSUE WITHOUT GIVING RESPONDENTS THE OPPORTUNITY TO
C. ON THE CONTRARY, THERE IS ADEQUATE SHOWING OF A COMMENT.
COMPELLING NEED TO JUSTIFY THE DISCLOSURE OF THE
INFORMATION SOUGHT. E. RESPONDENTS’ ISSUANCE OF THE CONTEMPT ORDER IS
NOT ARBITRARY OR PRECIPITATE.
D. TO UPHOLD THE CLAIM OF EXECUTIVE PRIVILEGE IN THE
INSTANT CASE WOULD SERIOUSLY IMPAIR THE In his Comment, petitioner charges respondent Committees with
RESPONDENTS’ PERFORMANCE OF THEIR PRIMARY FUNCTION exaggerating and distorting the Decision of this Court. He avers
TO ENACT LAWS. that there is nothing in it that prohibits respondent Committees
from investigating the NBN Project or asking him additional
E. FINALLY, THE CONSTITUTIONAL RIGHT OF THE PEOPLE TO questions. According to petitioner, the Court merely applied the
INFORMATION, AND THE CONSTITUTIONAL POLICIES ON rule on executive privilege to the facts of the case. He further
PUBLIC ACCOUNTABILITY AND TRANSPARENCY OUTWEIGH submits the following contentions: first, the assailed Decision did
THE CLAIM OF EXECUTIVE PRIVILEGE. not reverse the presumption against executive secrecy laid down
in Senate v. Ermita; second, respondent Committees failed to
IV overcome the presumption of executive privilege because it
appears that they could legislate even without the
CONTRARY TO THIS HONORABLE COURT’S DECISION, communications elicited by the three (3) questions, and they
RESPONDENTS DID NOT COMMIT GRAVE ABUSE OF admitted that they could dispense with petitioner’s testimony if
DISCRETION IN ISSUING THE ASSAILED CONTEMPT ORDER, certain NEDA documents would be given to them; third, the
CONSIDERING THAT: requirement of specificity applies only to the privilege for State,
military and diplomatic secrets, not to the necessarily broad and
A. THERE IS NO LEGITIMATE CLAIM OF EXECUTIVE PRIVILEGE all-encompassing presidential communications privilege; fourth,
IN THE INSTANT CASE. there is no right to pry into the President’s thought processes or
exploratory exchanges; fifth, petitioner is not covering up or
B. RESPONDENTS DID NOT VIOLATE THE SUPPOSED hiding anything illegal; sixth, the Court has the power and duty
REQUIREMENTS LAID DOWN IN SENATE V. ERMITA. to annul the Senate Rules; seventh, the Senate is not a
continuing body, thus the failure of the present Senate to publish
its Rules of Procedure Governing Inquiries in Aid of Legislation

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CASES ON EVIDENCE

(Rules) has a vitiating effect on them; eighth, the requirement for (2) whether or not there is factual or legal basis to hold that the
a witness to be furnished advance copy of questions comports communications elicited by the three (3) questions are covered by
with due process and the constitutional mandate that the rights executive privilege;
of witnesses be respected; and ninth, neither petitioner nor
respondent has the final say on the matter of executive privilege, (3) whether or not respondent Committees have shown that the
only the Court. communications elicited by the three (3) questions are critical to
the exercise of their functions; and
For its part, the Office of the Solicitor General maintains that: (1)
there is no categorical pronouncement from the Court that the (4) whether or not respondent Committees committed grave abuse
assailed Orders were issued by respondent Committees pursuant of discretion in issuing the contempt order.
to their oversight function; hence, there is no reason for them "to
make much" of the distinction between Sections 21 and 22, We shall discuss these issues seriatim.
Article VI of the Constitution; (2) presidential communications
enjoy a presumptive privilege against disclosure as earlier held in I
Almonte v. Vasquez9 and Chavez v. Public Estates Authority
(PEA)10; (3) the communications elicited by the three (3) There Is a Recognized Presumptive
questions are covered by executive privilege, because all the Presidential Communications Privilege
elements of the presidential communications privilege are
present; (4) the subpoena ad testificandum issued by respondent Respondent Committees ardently argue that the Court’s
Committees to petitioner is fatally defective under existing law declaration that presidential communications are presumptively
and jurisprudence; (5) the failure of the present Senate to publish privileged reverses the "presumption" laid down in Senate v.
its Rules renders the same void; and (6) respondent Committees Ermita11 that "inclines heavily against executive secrecy and in
arbitrarily issued the contempt order. favor of disclosure." Respondent Committees then claim that the
Court erred in relying on the doctrine in Nixon.
Incidentally, respondent Committees’ objection to the Resolution
dated March 18, 2008 (granting the Office of the Solicitor Respondent Committees argue as if this were the first time the
General’s Motion for Leave to Intervene and to Admit Attached presumption in favor of the presidential communications privilege
Memorandum) only after the promulgation of the Decision in this is mentioned and adopted in our legal system. That is far from the
case is foreclosed by its untimeliness. truth. The Court, in the earlier case of Almonte v. Vasquez,12
affirmed that the presidential communications privilege is
The core issues that arise from the foregoing respective fundamental to the operation of government and inextricably
contentions of the opposing parties are as follows: rooted in the separation of powers under the Constitution. Even
Senate v. Ermita,13 the case relied upon by respondent
(1) whether or not there is a recognized presumptive presidential Committees, reiterated this concept. There, the Court enumerated
communications privilege in our legal system; the cases in which the claim of executive privilege was recognized,
among them Almonte v. Chavez, Chavez v. Presidential
Commission on Good Government (PCGG),14 and Chavez v.

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CASES ON EVIDENCE

PEA.15 The Court articulated in these cases that "there are

certain types of information which the government may withhold Obviously, the last sentence of the above-quoted paragraph in
from the public,16" that there is a "governmental privilege against Senate v. Ermita refers to the "exemption" being claimed by the
public disclosure with respect to state secrets regarding military, executive officials mentioned in Section 2(b) of E.O. No. 464,
diplomatic and other national security matters";17 and that "the solely by virtue of their positions in the Executive Branch. This
right to information does not extend to matters recognized as means that when an executive official, who is one of those
‘privileged information’ under the separation of powers, by which mentioned in the said Sec. 2(b) of E.O. No. 464, claims to be
the Court meant Presidential conversations, correspondences, exempt from disclosure, there can be no presumption of
and discussions in closed-door Cabinet meetings."18 authorization to invoke executive privilege given by the President
to said executive official, such that the presumption in this
Respondent Committees’ observation that this Court’s Decision situation inclines heavily against executive secrecy and in favor of
reversed the "presumption that inclines heavily against executive disclosure.
secrecy and in favor of disclosure" arises from a piecemeal
interpretation of the said Decision. The Court has repeatedly held Senate v. Ermita 20 expounds on the premise of the foregoing
that in order to arrive at the true intent and meaning of a ruling in this wise:
decision, no specific portion thereof should be isolated and
resorted to, but the decision must be considered in its entirety.19 Section 2(b) in relation to Section 3 virtually provides that, once
the head of office determines that a certain information is
Note that the aforesaid presumption is made in the context of the privileged, such determination is presumed to bear the
circumstances obtaining in Senate v. Ermita, which declared void President’s authority and has the effect of prohibiting the official
Sections 2(b) and 3 of Executive Order (E.O.) No. 464, Series of from appearing before Congress, subject only to the express
2005. The pertinent portion of the decision in the said case reads: pronouncement of the President that it is allowing the appearance
of such official. These provisions thus allow the President to
From the above discussion on the meaning and scope of executive authorize claims of privilege by mere silence.
privilege, both in the United States and in this jurisprudence, a
clear principle emerges. Executive privilege, whether asserted Such presumptive authorization, however, is contrary to the
against Congress, the courts, or the public, is recognized only in exceptional nature of the privilege. Executive privilege, as already
relation to certain types of information of a sensitive character. discussed, is recognized with respect to information the
While executive privilege is a constitutional concept, a claim confidential nature of which is crucial to the fulfillment of the
thereof may be valid or not depending on the ground invoked to unique role and responsibilities of the executive branch, or in
justify it and the context in which it is made. Noticeably absent is those instances where exemption from disclosure is necessary to
any recognition that executive officials are exempt from the duty the discharge of highly important executive responsibilities. The
to disclose information by the mere fact of being executive doctrine of executive privilege is thus premised on the fact that
officials. Indeed, the extraordinary character of the exemptions certain information must, as a matter of necessity, be kept
indicates that the presumption inclines heavily against executive confidential in pursuit of the public interest. The privilege being,
secrecy and in favor of disclosure. (Emphasis and underscoring by definition, an exemption from the obligation to disclose
supplied) information, in this case to Congress, the necessity must be of

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CASES ON EVIDENCE

such high degree as to outweigh the public interest in enforcing Constitution. Being of American origin, it is best understood in
that obligation in a particular case. light of how it has been defined and used in the legal literature of
the United States.
In light of this highly exceptional nature of the privilege, the Court
finds it essential to limit to the President the power to invoke the Schwart defines executive privilege as "the power of the
privilege. She may of course authorize the Executive Secretary to Government to withhold information from the public, the courts,
invoke the privilege on her behalf, in which case the Executive and the Congress. Similarly, Rozell defines it as "the right of the
Secretary must state that the authority is "By order of the President and high-level executive branch officers to withhold
President", which means that he personally consulted with her. information from Congress, the courts, and ultimately the public."
The privilege being an extraordinary power, it must be wielded x x x In this jurisdiction, the doctrine of executive privilege was
only by the highest official in the executive hierarchy. In other recognized by this Court in Almonte v. Vasquez. Almonte used the
words, the President may not authorize her subordinates to term in reference to the same privilege subject of Nixon. It quoted
exercise such power. There is even less reason to uphold such the following portion of the Nixon decision which explains the
authorization in the instant case where the authorization is not basis for the privilege:
explicit but by mere silence. Section 3, in relation to Section 2(b),
is further invalid on this score. "The expectation of a President to the confidentiality of his
conversations and correspondences, like the claim of
The constitutional infirmity found in the blanket authorization to confidentiality of judicial deliberations, for example, he has all the
invoke executive privilege granted by the President to executive values to which we accord deference for the privacy of all citizens
officials in Sec. 2(b) of E.O. No. 464 does not obtain in this case. and, added to those values, is the necessity for protection of the
public interest in candid, objective, and even blunt or harsh
In this case, it was the President herself, through Executive opinions in Presidential decision-making. A President and those
Secretary Ermita, who invoked executive privilege on a specific who assist him must be free to explore alternatives in the process
matter involving an executive agreement between the Philippines of shaping policies and making decisions and to do so in a way
and China, which was the subject of the three (3) questions many would be unwilling to express except privately. These are
propounded to petitioner Neri in the course of the Senate the considerations justifying a presumptive privilege for
Committees’ investigation. Thus, the factual setting of this case Presidential communications. The privilege is fundamental to the
markedly differs from that passed upon in Senate v. Ermita. operation of government and inextricably rooted in the separation
of powers under the Constitution x x x " (Emphasis and italics
Moreover, contrary to the claim of respondents, the Decision in supplied)
this present case hews closely to the ruling in Senate v. Ermita,21
to wit: Clearly, therefore, even Senate v. Ermita adverts to "a
presumptive privilege for Presidential communication," which was
Executive privilege recognized early on in Almonte v. Vasquez. To construe the
passage in Senate v. Ermita adverted to in the Motion for
The phrase "executive privilege" is not new in this jurisdiction. It Reconsideration of respondent Committees, referring to the non-
has been used even prior to the promulgation of the 1986 existence of a "presumptive authorization" of an executive official,

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CASES ON EVIDENCE

to mean that the "presumption" in favor of executive privilege Hold that the Communications Elicited by the
"inclines heavily against executive secrecy and in favor of Three (3) Questions Are Covered by Executive Privilege
disclosure" is to distort the ruling in the Senate v. Ermita and
make the same engage in self-contradiction. Respondent Committees claim that the communications elicited
by the three (3) questions are not covered by executive privilege
Senate v. Ermita22 expounds on the constitutional underpinning because the elements of the presidential communications
of the relationship between the Executive Department and the privilege are not present.
Legislative Department to explain why there should be no implied
authorization or presumptive authorization to invoke executive A. The power to enter into an executive agreement is a
privilege by the President’s subordinate officials, as follows: "quintessential and non-delegable presidential power."

When Congress exercises its power of inquiry, the only way for First, respondent Committees contend that the power to secure a
department heads to exempt themselves therefrom is by a valid foreign loan does not relate to a "quintessential and non-delegable
claim of privilege. They are not exempt by the mere fact that they presidential power," because the Constitution does not vest it in
are department heads. Only one executive official may be the President alone, but also in the Monetary Board which is
exempted from this power - the President on whom executive required to give its prior concurrence and to report to Congress.
power is vested, hence, beyond the reach of Congress except
through the power of impeachment. It is based on he being the This argument is unpersuasive.
highest official of the executive branch, and the due respect
accorded to a co-equal branch of governments which is The fact that a power is subject to the concurrence of another
sanctioned by a long-standing custom. (Underscoring supplied) entity does not make such power less executive. "Quintessential"
is defined as the most perfect embodiment of something, the
Thus, if what is involved is the presumptive privilege of concentrated essence of substance.24 On the other hand, "non-
presidential communications when invoked by the President on a delegable" means that a power or duty cannot be delegated to
matter clearly within the domain of the Executive, the said another or, even if delegated, the responsibility remains with the
presumption dictates that the same be recognized and be given obligor.25 The power to enter into an executive agreement is in
preference or priority, in the absence of proof of a compelling or essence an executive power. This authority of the President to
critical need for disclosure by the one assailing such enter into executive agreements without the concurrence of the
presumption. Any construction to the contrary will render Legislature has traditionally been recognized in Philippine
meaningless the presumption accorded by settled jurisprudence jurisprudence.26 Now, the fact that the President has to secure
in favor of executive privilege. In fact, Senate v. Ermita reiterates the prior concurrence of the Monetary Board, which shall submit
jurisprudence citing "the considerations justifying a presumptive to Congress a complete report of its decision before contracting or
privilege for Presidential communications."23 guaranteeing foreign loans, does not diminish the executive
nature of the power.
II
The inviolate doctrine of separation of powers among the
There Are Factual and Legal Bases to legislative, executive and judicial branches of government by no

387
CASES ON EVIDENCE

means prescribes absolute autonomy in the discharge by each confining it to White House staff, and not to staffs of the agencies,
branch of that part of the governmental power assigned to it by and then only to White House staff that has "operational
the sovereign people. There is the corollary doctrine of checks and proximity" to direct presidential decision-making, thus:
balances, which has been carefully calibrated by the Constitution
to temper the official acts of each of these three branches. Thus, We are aware that such an extension, unless carefully
by analogy, the fact that certain legislative acts require action circumscribed to accomplish the purposes of the privilege, could
from the President for their validity does not render such acts less pose a significant risk of expanding to a large swath of the
legislative in nature. A good example is the power to pass a law. executive branch a privilege that is bottomed on a recognition of
Article VI, Section 27 of the Constitution mandates that every bill the unique role of the President. In order to limit this risk, the
passed by Congress shall, before it becomes a law, be presented presidential communications privilege should be construed as
to the President who shall approve or veto the same. The fact that narrowly as is consistent with ensuring that the confidentiality of
the approval or vetoing of the bill is lodged with the President the President’s decision-making process is adequately protected.
does not render the power to pass law executive in nature. This is Not every person who plays a role in the development of
because the power to pass law is generally a quintessential and presidential advice, no matter how remote and removed from the
non-delegable power of the Legislature. In the same vein, the President, can qualify for the privilege. In particular, the privilege
executive power to enter or not to enter into a contract to secure should not extend to staff outside the White House in executive
foreign loans does not become less executive in nature because of branch agencies. Instead, the privilege should apply only to
conditions laid down in the Constitution. The final decision in the communications authored or solicited and received by those
exercise of the said executive power is still lodged in the Office of members of an immediate White House advisor’s staff who have
the President. broad and significant responsibility for investigation and
formulating the advice to be given the President on the particular
B. The "doctrine of operational proximity" was laid down precisely matter to which the communications relate. Only
to limit the scope of the presidential communications privilege communications at that level are close enough to the President to
but, in any case, it is not conclusive. be revelatory of his deliberations or to pose a risk to the candor of
his advisers. See AAPS, 997 F.2d at 910 (it is "operational
Second, respondent Committees also seek reconsideration of the proximity" to the President that matters in determining whether
application of the "doctrine of operational proximity" for the "[t]he President’s confidentiality interests" is implicated).
reason that "it maybe misconstrued to expand the scope of the (Emphasis supplied)
presidential communications privilege to communications
between those who are ‘operationally proximate’ to the President In the case at bar, the danger of expanding the privilege "to a
but who may have "no direct communications with her." large swath of the executive branch" (a fear apparently
entertained by respondents) is absent because the official
It must be stressed that the doctrine of "operational proximity" involved here is a member of the Cabinet, thus, properly within
was laid down in In re: Sealed Case27precisely to limit the scope the term "advisor" of the President; in fact, her alter ego and a
of the presidential communications privilege. The U.S. court was member of her official family. Nevertheless, in circumstances in
aware of the dangers that a limitless extension of the privilege which the official involved is far too remote, this Court also
risks and, therefore, carefully cabined its reach by explicitly mentioned in the Decision the organizational test laid down in

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CASES ON EVIDENCE

Judicial Watch, Inc. v. Department of Justice.28 This goes to

show that the operational proximity test used in the Decision is The context in which executive privilege is being invoked is that
not considered conclusive in every case. In determining which test the information sought to be disclosed might impair our
to use, the main consideration is to limit the availability of diplomatic as well as economic relations with the People’s
executive privilege only to officials who stand proximate to the Republic of China. Given the confidential nature in which this
President, not only by reason of their function, but also by reason information were conveyed to the President, he cannot provide the
of their positions in the Executive’s organizational structure. Committee any further details of these conversations, without
Thus, respondent Committees’ fear that the scope of the privilege disclosing the very thing the privilege is designed to protect.
would be unnecessarily expanded with the use of the operational (emphasis supplied)
proximity test is unfounded.
Even in Senate v. Ermita, it was held that Congress must not
C. The President’s claim of executive privilege is not merely based require the Executive to state the reasons for the claim with such
on a generalized interest; and in balancing respondent particularity as to compel disclosure of the information which the
Committees’ and the President’s clashing interests, the Court did privilege is meant to protect. This is a matter of respect for a
not disregard the 1987 Constitutional provisions on government coordinate and co-equal department.
transparency, accountability and disclosure of information.
It is easy to discern the danger that goes with the disclosure of
Third, respondent Committees claim that the Court erred in the President’s communication with her advisor. The NBN Project
upholding the President’s invocation, through the Executive involves a foreign country as a party to the agreement. It was
Secretary, of executive privilege because (a) between respondent actually a product of the meeting of minds between officials of the
Committees’ specific and demonstrated need and the President’s Philippines and China. Whatever the President says about the
generalized interest in confidentiality, there is a need to strike the agreement - particularly while official negotiations are ongoing -
balance in favor of the former; and (b) in the balancing of interest, are matters which China will surely view with particular interest.
the Court disregarded the provisions of the 1987 Philippine There is danger in such kind of exposure. It could adversely affect
Constitution on government transparency, accountability and our diplomatic as well as economic relations with the People’s
disclosure of information, specifically, Article III, Section 7;29 Republic of China. We reiterate the importance of secrecy in
Article II, Sections 2430 and 28;31 Article XI, Section 1;32 Article matters involving foreign negotiations as stated in United States
XVI, Section 10;33 Article VII, Section 20;34 and Article XII, v. Curtiss-Wright Export Corp., 38 thus:
Sections 9,35 21,36 and 22.37
The nature of foreign negotiations requires caution, and their
It must be stressed that the President’s claim of executive success must often depend on secrecy, and even when brought to
privilege is not merely founded on her generalized interest in a conclusion, a full disclosure of all the measures, demands, or
confidentiality. The Letter dated November 15, 2007 of Executive eventual concessions which may have been proposed or
Secretary Ermita specified presidential communications privilege contemplated would be extremely impolitic, for this might have a
in relation to diplomatic and economic relations with another pernicious influence on future negotiations or produce immediate
sovereign nation as the bases for the claim. Thus, the Letter inconveniences, perhaps danger and mischief, in relation to other
stated: powers. The necessity of such caution and secrecy was one cogent

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reason for vesting the power of making treaties in the President, The nature of diplomacy requires centralization of authority and
with the advice and consent of the Senate, the principle on which expedition of decision which are inherent in executive action.
the body was formed confining it to a small number of members. Another essential characteristic of diplomacy is its confidential
To admit, then, a right in the House of Representatives to demand nature. Although much has been said about "open" and "secret"
and to have as a matter of course all the papers respecting a diplomacy, with disparagement of the latter, Secretaries of State
negotiation with a foreign power would be to establish a Hughes and Stimson have clearly analyzed and justified the
dangerous precedent. practice. In the words of Mr. Stimson:

US jurisprudence clearly guards against the dangers of allowing "A complicated negotiation …cannot be carried through without
Congress access to all papers relating to a negotiation with a many, many private talks and discussion, man to man; many
foreign power. In this jurisdiction, the recent case of Akbayan tentative suggestions and proposals. Delegates from other
Citizens Action Party, et al. v. Thomas G. Aquino, et al.39 upheld countries come and tell you in confidence of their troubles at
the privileged character of diplomatic negotiations. In Akbayan, home and of their differences with other countries and with other
the Court stated: delegates; they tell you of what they would do under certain
circumstances and would not do under other circumstances… If
Privileged character of diplomatic negotiations these reports… should become public… who would ever trust
American Delegations in another conference? (United States
The privileged character of diplomatic negotiations has been Department of State, Press Releases, June 7, 1930, pp. 282-284)
recognized in this jurisdiction. In discussing valid limitations on
the right to information, the Court in Chavez v. PCGG held that xxxx
"information on inter-government exchanges prior to the
conclusion of treaties and executive agreements may be subject to There is frequent criticism of the secrecy in which negotiation
reasonable safeguards for the sake of national interest." Even with foreign powers on nearly all subjects is concerned. This, it is
earlier, the same privilege was upheld in People’s Movement for claimed, is incompatible with the substance of democracy. As
Press Freedom (PMPF) v. Manglapus wherein the Court discussed expressed by one writer, "It can be said that there is no more rigid
the reasons for the privilege in more precise terms. system of silence anywhere in the world." (E.J. Young, Looking
Behind the Censorship, J. B. Lipincott Co., 1938) President
In PMPF v. Manglapus, the therein petitioners were seeking Wilson in starting his efforts for the conclusion of the World War
information from the President’s representatives on the state of declared that we must have "open covenants, openly arrived at."
the then on-going negotiations of the RP-US Military Bases He quickly abandoned his thought.
Agreement. The Court denied the petition, stressing that "secrecy
of negotiations with foreign countries is not violative of the No one who has studied the question believes that such a method
constitutional provisions of freedom of speech or of the press nor of publicity is possible. In the moment that negotiations are
of the freedom of access to information." The Resolution went on started, pressure groups attempt to "muscle in." An ill-timed
to state, thus: speech by one of the parties or a frank declaration of the
concession which are exacted or offered on both sides would
quickly lead to a widespread propaganda to block the

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negotiations. After a treaty has been drafted and its terms are
fully published, there is ample opportunity for discussion before it With respect to respondent Committees’ invocation of
is approved. (The New American Government and Its Works, constitutional prescriptions regarding the right of the people to
James T. Young, 4th Edition, p. 194) (Emphasis and information and public accountability and transparency, the
underscoring supplied) Court finds nothing in these arguments to support respondent
Committees’ case.
Still in PMPF v. Manglapus, the Court adopted the doctrine in
U.S. v. Curtiss-Wright Export Corp. that the President is the sole There is no debate as to the importance of the constitutional right
organ of the nation in its negotiations with foreign countries,viz: of the people to information and the constitutional policies on
public accountability and transparency. These are the twin
"x x x In this vast external realm, with its important, complicated, postulates vital to the effective functioning of a democratic
delicate and manifold problems, the President alone has the government. The citizenry can become prey to the whims and
power to speak or listen as a representative of the nation. He caprices of those to whom the power has been delegated if they
makes treaties with the advice and consent of the Senate; but he are denied access to information. And the policies on public
alone negotiates. Into the field of negotiation the Senate cannot accountability and democratic government would certainly be
intrude; and Congress itself is powerless to invade it. As Marshall mere empty words if access to such information of public concern
said in his great arguments of March 7, 1800, in the House of is denied.
Representatives, "The President is the sole organ of the nation in
its external relations, and its sole representative with foreign In the case at bar, this Court, in upholding executive privilege
nations." Annals, 6th Cong., col. 613… (Emphasis supplied; with respect to three (3) specific questions, did not in any way
underscoring in the original) curb the public’s right to information or diminish the importance
of public accountability and transparency.
Considering that the information sought through the three (3)
questions subject of this Petition involves the President’s dealings This Court did not rule that the Senate has no power to
with a foreign nation, with more reason, this Court is wary of investigate the NBN Project in aid of legislation. There is nothing
approving the view that Congress may peremptorily inquire into in the assailed Decision that prohibits respondent Committees
not only official, documented acts of the President but even her from inquiring into the NBN Project. They could continue the
confidential and informal discussions with her close advisors on investigation and even call petitioner Neri to testify again. He
the pretext that said questions serve some vague legislative need. himself has repeatedly expressed his willingness to do so. Our
Regardless of who is in office, this Court can easily foresee Decision merely excludes from the scope of respondents’
unwanted consequences of subjecting a Chief Executive to investigation the three (3) questions that elicit answers covered by
unrestricted congressional inquiries done with increased executive privilege and rules that petitioner cannot be compelled
frequency and great publicity. No Executive can effectively to appear before respondents to answer the said questions. We
discharge constitutional functions in the face of intense and have discussed the reasons why these answers are covered by
unchecked legislative incursion into the core of the President’s executive privilege. That there is a recognized public interest in
decision-making process, which inevitably would involve her the confidentiality of such information is a recognized principle in
conversations with a member of her Cabinet.

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CASES ON EVIDENCE

other democratic States. To put it simply, the right to information Incidentally, the right primarily involved here is the right of
is not an absolute right. respondent Committees to obtain information allegedly in aid of
legislation, not the people’s right to public information. This is the
Indeed, the constitutional provisions cited by respondent reason why we stressed in the assailed Decision the distinction
Committees do not espouse an absolute right to information. By between these two rights. As laid down in Senate v. Ermita, "the
their wording, the intention of the Framers to subject such right demand of a citizen for the production of documents pursuant to
to the regulation of the law is unmistakable. The highlighted his right to information does not have the same obligatory force
portions of the following provisions show the obvious limitations as a subpoena duces tecum issued by Congress" and "neither
on the right to information, thus: does the right to information grant a citizen the power to exact
testimony from government officials." As pointed out, these rights
Article III, Sec. 7. The right of the people to information on belong to Congress, not to the individual citizen. It is worth
matters of public concern shall be recognized. Access to official mentioning at this juncture that the parties here are respondent
records, and to documents, and papers pertaining to official Committees and petitioner Neri and that there was no prior
records, and to documents, and papers pertaining to official acts, request for information on the part of any individual citizen. This
transactions, or decisions, as well as to government research data Court will not be swayed by attempts to blur the distinctions
used as basis for policy development, shall be afforded the citizen, between the Legislature's right to information in a legitimate
subject to such limitations as may be provided by law. legislative inquiry and the public's right to information.

Article II, Sec. 28. Subject to reasonable conditions prescribed by For clarity, it must be emphasized that the assailed Decision did
law, the State adopts and implements a policy of full public not enjoin respondent Committees from inquiring into the NBN
disclosure of all its transactions involving public interest. Project. All that is expected from them is to respect matters that
(Emphasis supplied) are covered by executive privilege.

In Chavez v. Presidential Commission on Good Government,40 it III.

was stated that there are no specific laws prescribing the exact
limitations within which the right may be exercised or the Respondent Committees Failed to Show That
correlative state duty may be obliged. Nonetheless, it enumerated the Communications Elicited by the Three Questions
the recognized restrictions to such rights, among them: (1) Are Critical to the Exercise of their Functions
national security matters, (2) trade secrets and banking
transactions, (3) criminal matters, and (4) other confidential In their Motion for Reconsideration, respondent Committees
information. National security matters include state secrets devote an unusually lengthy discussion on the purported
regarding military and diplomatic matters, as well as information legislative nature of their entire inquiry, as opposed to an
on inter-government exchanges prior to the conclusion of treaties oversight inquiry.
and executive agreements. It was further held that even where
there is no need to protect such state secrets, they must be At the outset, it must be clarified that the Decision did not pass
"examined in strict confidence and given scrupulous protection." upon the nature of respondent Committees’ inquiry into the NBN
Project. To reiterate, this Court recognizes respondent

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CASES ON EVIDENCE

Committees’ power to investigate the NBN Project in aid of Court further ratiocinated, through its ruling extensively quoted
legislation. However, this Court cannot uphold the view that when in the Honorable Chief Justice Puno's dissenting opinion, as
a constitutionally guaranteed privilege or right is validly invoked follows:
by a witness in the course of a legislative investigation, the
legislative purpose of respondent Committees’ questions can be "... this presumptive privilege must be considered in light of our
sufficiently supported by the expedient of mentioning statutes historic commitment to the rule of law. This is nowhere more
and/or pending bills to which their inquiry as a whole may have profoundly manifest than in our view that 'the twofold aim (of
relevance. The jurisprudential test laid down by this Court in past criminal justice) is that guild shall not escape or innocence
decisions on executive privilege is that the presumption of suffer.' Berger v. United States, 295 U.S., at 88, 55 S.Ct., at 633.
privilege can only be overturned by a showing of compelling need We have elected to employ an adversary system of criminal justice
for disclosure of the information covered by executive privilege. in which the parties contest all issues before a court of law. The
need to develop all relevant facts in the adversary system is both
In the Decision, the majority held that "there is no adequate fundamental and comprehensive. The ends of criminal justice
showing of a compelling need that would justify the limitation of would be defeated if judgments were to be founded on a partial or
the privilege and of the unavailability of the information elsewhere speculative presentation of the facts. The very integrity of the
by an appropriate investigating authority." In the Motion for judicial system and public confidence in the system depend on
Reconsideration, respondent Committees argue that the full disclosure of all the facts, within the framework of the rules of
information elicited by the three (3) questions are necessary in the evidence. To ensure that justice is done, it is imperative to the
discharge of their legislative functions, among them, (a) to function of courts that compulsory process be available for the
consider the three (3) pending Senate Bills, and (b) to curb graft production of evidence needed either by the prosecution or by the
and corruption. defense.

We remain unpersuaded by respondents’ assertions. xxx xxx xxx

In U.S. v. Nixon, the U.S. Court held that executive privilege is The right to the production of all evidence at a criminal trial
subject to balancing against other interests and it is necessary to similarly has constitutional dimensions. The Sixth Amendment
resolve the competing interests in a manner that would preserve explicitly confers upon every defendant in a criminal trial the
the essential functions of each branch. There, the Court weighed right 'to be confronted with the witness against him' and 'to have
between presidential privilege and the legitimate claims of the compulsory process for obtaining witnesses in his favor.'
judicial process. In giving more weight to the latter, the Court Moreover, the Fifth Amendment also guarantees that no person
ruled that the President's generalized assertion of privilege must shall be deprived of liberty without due process of law. It is the
yield to the demonstrated, specific need for evidence in a pending manifest duty of the courts to vindicate those guarantees, and to
criminal trial. accomplish that it is essential that all relevant and admissible
evidence be produced.
The Nixon Court ruled that an absolute and unqualified privilege
would stand in the way of the primary constitutional duty of the In this case we must weigh the importance of the general privilege
Judicial Branch to do justice in criminal prosecutions. The said of confidentiality of Presidential communications in performance

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CASES ON EVIDENCE

of the President's responsibilities against the inroads of such a information which, according to said respondents, would "aid"
privilege on the fair administration of criminal justice. (emphasis them in crafting legislation.
supplied)
Senate Select Committee on Presidential Campaign Activities v.
xxx xxx xxx Nixon41 expounded on the nature of a legislative inquiry in aid of
legislation in this wise:
...the allowance of the privilege to withhold evidence that is
demonstrably relevant in a criminal trial would cut deeply into The sufficiency of the Committee's showing of need has come to
the guarantee of due process of law and gravely impair the basic depend, therefore, entirely on whether the subpoenaed materials
function of the courts. A President's acknowledged need for are critical to the performance of its legislative functions. There is
confidentiality in the communications of his office is general in a clear difference between Congress' legislative tasks and the
nature, whereas the constitutional need for production of relevant responsibility of a grand jury, or any institution engaged in like
evidence in a criminal proceeding is specific and central to the fair functions. While fact-finding by a legislative committee is
adjudication of a particular criminal case in the administration of undeniably a part of its task, legislative judgments normally
justice. Without access to specific facts a criminal prosecution depend more on the predicted consequences of proposed
may be totally frustrated. The President's broad interest in legislative actions and their political acceptability, than on precise
confidentiality of communication will not be vitiated by disclosure reconstruction of past events; Congress frequently legislates on
of a limited number of conversations preliminarily shown to have the basis of conflicting information provided in its hearings. In
some bearing on the pending criminal cases. contrast, the responsibility of the grand jury turns entirely on its
ability to determine whether there is probable cause to believe
We conclude that when the ground for asserting privilege as to that certain named individuals did or did not commit specific
subpoenaed materials sought for use in a criminal trial is based crimes. If, for example, as in Nixon v. Sirica, one of those crimes
only on the generalized interest in confidentiality, it cannot is perjury concerning the content of certain conversations, the
prevail over the fundamental demands of due process of law in grand jury's need for the most precise evidence, the exact text of
the fair administration of criminal justice. The generalized oral statements recorded in their original form, is undeniable. We
assertion of privilege must yield to the demonstrated, specific see no comparable need in the legislative process, at least not in
need for evidence in a pending criminal trial. (emphasis supplied) the circumstances of this case. Indeed, whatever force there
might once have been in the Committee's argument that the
In the case at bar, we are not confronted with a court’s need for subpoenaed materials are necessary to its legislative judgments
facts in order to adjudge liability in a criminal case but rather has been substantially undermined by subsequent events.
with the Senate’s need for information in relation to its legislative (Emphasis supplied)
functions. This leads us to consider once again just how critical is
the subject information in the discharge of respondent Clearly, the need for hard facts in crafting legislation cannot be
Committees’ functions. The burden to show this is on the equated with the compelling or demonstratively critical and
respondent Committees, since they seek to intrude into the specific need for facts which is so essential to the judicial power
sphere of competence of the President in order to gather to adjudicate actual controversies. Also, the bare standard of
"pertinency" set in Arnault cannot be lightly applied to the instant

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CASES ON EVIDENCE

case, which unlike Arnault involves a conflict between two (2) recurring by remedial legislation, the answer to those three
separate, co-equal and coordinate Branches of the Government. questions will not necessarily bolster or inhibit respondents from
proceeding with such legislation. They could easily presume the
Whatever test we may apply, the starting point in resolving the worst of the president in enacting such legislation.
conflicting claims between the Executive and the Legislative
Branches is the recognized existence of the presumptive For sure, a factual basis for situations covered by bills is not
presidential communications privilege. This is conceded even in critically needed before legislatives bodies can come up with
the Dissenting Opinion of the Honorable Chief Justice Puno, relevant legislation unlike in the adjudication of cases by courts
which states: of law. Interestingly, during the Oral Argument before this Court,
the counsel for respondent Committees impliedly admitted that
A hard look at Senate v. Ermita ought to yield the conclusion that the Senate could still come up with legislations even without
it bestowed a qualified presumption in favor of the Presidential petitioner answering the three (3) questions. In other words, the
communications privilege. As shown in the previous discussion, information being elicited is not so critical after all. Thus:
U.S. v. Nixon, as well as the other related Nixon cases Sirica and
Senate Select Committee on Presidential Campaign Activities, et CHIEF JUSTICE PUNO
al., v. Nixon in the D.C. Court of Appeals, as well as subsequent
cases all recognize that there is a presumptive privilege in favor of So can you tell the Court how critical are these questions to the
Presidential communications. The Almonte case quoted U.S. v. lawmaking function of the Senate. For instance, question Number
Nixon and recognized a presumption in favor of confidentiality of 1 whether the President followed up the NBN project. According to
Presidential communications. the other counsel this question has already been asked, is that
correct?
The presumption in favor of Presidential communications puts
the burden on the respondent Senate Committees to overturn the ATTY. AGABIN
presumption by demonstrating their specific need for the
information to be elicited by the answers to the three (3) Well, the question has been asked but it was not answered, Your
questions subject of this case, to enable them to craft legislation. Honor.
Here, there is simply a generalized assertion that the information
is pertinent to the exercise of the power to legislate and a broad CHIEF JUSTICE PUNO
and non-specific reference to pending Senate bills. It is not clear
what matters relating to these bills could not be determined Yes. But my question is how critical is this to the lawmaking
without the said information sought by the three (3) questions. As function of the Senate?
correctly pointed out by the Honorable Justice Dante O. Tinga in
his Separate Concurring Opinion: ATTY. AGABIN

…If respondents are operating under the premise that the I believe it is critical, Your Honor.
president and/or her executive officials have committed
wrongdoings that need to be corrected or prevented from CHIEF JUSTICE PUNO

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CASES ON EVIDENCE

Why? CHIEF JUSTICE PUNO

ATTY. AGABIN Again, that is speculative.

For instance, with respect to the proposed Bill of Senator Miriam ATTY. AGABIN
Santiago, she would like to indorse a Bill to include Executive
Agreements had been used as a device to the circumventing the That is why they want to continue with the investigation, Your
Procurement Law. Honor.

CHIEF JUSTICE PUNO CHIEF JUSTICE PUNO

But the question is just following it up. How about the third question, whether the President said to go
ahead and approve the project after being told about the alleged
ATTY. AGABIN bribe. How critical is that to the lawmaking function of the
Senate? And the question is may they craft a Bill a remedial law
I believe that may be the initial question, Your Honor, because if without forcing petitioner Neri to answer this question?
we look at this problem in its factual setting as counsel for
petitioner has observed, there are intimations of a bribery scandal ATTY. AGABIN
involving high government officials.
Well, they can craft it, Your Honor, based on mere speculation.
CHIEF JUSTICE PUNO And sound legislation requires that a proposed Bill should have
some basis in fact.42
Again, about the second question, were you dictated to prioritize
this ZTE, is that critical to the lawmaking function of the Senate? The failure of the counsel for respondent Committees to pinpoint
Will it result to the failure of the Senate to cobble a Bill without the specific need for the information sought or how the
this question? withholding of the information sought will hinder the
accomplishment of their legislative purpose is very evident in the
ATTY. AGABIN above oral exchanges. Due to the failure of the respondent
Committees to successfully discharge this burden, the
I think it is critical to lay the factual foundations for a proposed presumption in favor of confidentiality of presidential
amendment to the Procurement Law, Your Honor, because the communication stands. The implication of the said presumption,
petitioner had already testified that he was offered a P200 Million like any other, is to dispense with the burden of proof as to
bribe, so if he was offered a P200 Million bribe it is possible that whether the disclosure will significantly impair the President’s
other government officials who had something to do with the performance of her function. Needless to state this is assumed, by
approval of the contract would be offered the same amount of virtue of the presumption.
bribes.

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CASES ON EVIDENCE

Anent respondent Committees’ bewailing that they would have to this Court. It cannot abdicate that obligation mandated by the
"speculate" regarding the questions covered by the privilege, this 1987 Constitution, although said provision by no means does
does not evince a compelling need for the information sought. away with the applicability of the principle in appropriate
Indeed, Senate Select Committee on Presidential Campaign cases.46 (Emphasis supplied)
Activities v. Nixon43 held that while fact-finding by a legislative
committee is undeniably a part of its task, legislative judgments There, the Court further ratiocinated that "the contemplated
normally depend more on the predicted consequences of proposed inquiry by respondent Committee is not really ‘in aid of
legislative actions and their political acceptability than on a legislation’ because it is not related to a purpose within the
precise reconstruction of past events. It added that, normally, jurisdiction of Congress, since the aim of the investigation is to
Congress legislates on the basis of conflicting information find out whether or not the relatives of the President or Mr.
provided in its hearings. We cannot subscribe to the respondent Ricardo Lopa had violated Section 5 of R.A. No. 3019, the Anti-
Committees’ self-defeating proposition that without the answers Graft and Corrupt Practices Act, a matter that appears more
to the three (3) questions objected to as privileged, the within the province of the courts rather than of the
distinguished members of the respondent Committees cannot Legislature."47 (Emphasis and underscoring supplied)
intelligently craft legislation.
The general thrust and the tenor of the three (3) questions is to
Anent the function to curb graft and corruption, it must be trace the alleged bribery to the Office of the President.48 While it
stressed that respondent Committees’ need for information in the may be a worthy endeavor to investigate the potential culpability
exercise of this function is not as compelling as in instances when of high government officials, including the President, in a given
the purpose of the inquiry is legislative in nature. This is because government transaction, it is simply not a task for the Senate to
curbing graft and corruption is merely an oversight function of perform. The role of the Legislature is to make laws, not to
Congress.44 And if this is the primary objective of respondent determine anyone’s guilt of a crime or wrongdoing. Our
Committees in asking the three (3) questions covered by privilege, Constitution has not bestowed upon the Legislature the latter
it may even contradict their claim that their purpose is legislative role. Just as the Judiciary cannot legislate, neither can the
in nature and not oversight. In any event, whether or not Legislature adjudicate or prosecute.
investigating graft and corruption is a legislative or oversight
function of Congress, respondent Committees’ investigation Respondent Committees claim that they are conducting an
cannot transgress bounds set by the Constitution. inquiry in aid of legislation and a "search for truth," which in
respondent Committees’ view appears to be equated with the
In Bengzon, Jr. v. Senate Blue Ribbon Committee,45 this Court search for persons responsible for "anomalies" in government
ruled: contracts.

The "allocation of constitutional boundaries" is a task that this No matter how noble the intentions of respondent Committees
Court must perform under the Constitution. Moreover, as held in are, they cannot assume the power reposed upon our
a recent case, "the political question doctrine neither interposes prosecutorial bodies and courts. The determination of who is/are
an obstacle to judicial determination of the rival claims. The liable for a crime or illegal activity, the investigation of the role
jurisdiction to delimit constitutional boundaries has been given to played by each official, the determination of who should be haled

397
CASES ON EVIDENCE

to court for prosecution and the task of coming up with constitutionally guaranteed rights of all persons, parties and
conclusions and finding of facts regarding anomalies, especially witnesses alike, are protected and safeguarded.
the determination of criminal guilt, are not functions of the
Senate. Congress is neither a law enforcement nor a trial agency. Should respondent Committees uncover information related to a
Moreover, it bears stressing that no inquiry is an end in itself; it possible crime in the course of their investigation, they have the
must be related to, and in furtherance of, a legitimate task of the constitutional duty to refer the matter to the appropriate agency
Congress, i.e. legislation. Investigations conducted solely to or branch of government. Thus, the Legislature’s need for
gather incriminatory evidence and "punish" those investigated are information in an investigation of graft and corruption cannot be
indefensible. There is no Congressional power to expose for the deemed compelling enough to pierce the confidentiality of
sake of exposure.49 In this regard, the pronouncement in information validly covered by executive privilege. As discussed
Barenblatt v. United States50 is instructive, thus: above, the Legislature can still legislate on graft and corruption
even without the information covered by the three (3) questions
Broad as it is, the power is not, however, without limitations. subject of the petition.
Since Congress may only investigate into the areas in which it
may potentially legislate or appropriate, it cannot inquire into Corollarily, respondent Committees justify their rejection of
matters which are within the exclusive province of one of the petitioner’s claim of executive privilege on the ground that there is
other branches of the government. Lacking the judicial power no privilege when the information sought might involve a crime or
given to the Judiciary, it cannot inquire into matters that are illegal activity, despite the absence of an administrative or judicial
exclusively the concern of the Judiciary. Neither can it supplant determination to that effect. Significantly, however, in Nixon v.
the Executive in what exclusively belongs to the Executive. Sirica,52 the showing required to overcome the presumption
(Emphasis supplied.) favoring confidentiality turned, not on the nature of the
presidential conduct that the subpoenaed material might reveal,
At this juncture, it is important to stress that complaints relating but, instead, on the nature and appropriateness of the function in
to the NBN Project have already been filed against President the performance of which the material was sought, and the degree
Arroyo and other personalities before the Office of the to which the material was necessary to its fulfillment.
Ombudsman. Under our Constitution, it is the Ombudsman who
has the duty "to investigate any act or omission of any public Respondent Committees assert that Senate Select Committee on
official, employee, office or agency when such act or omission Presidential Campaign Activities v. Nixon does not apply to the
appears to be illegal, unjust, improper, or inefficient."51 The case at bar because, unlike in the said case, no impeachment
Office of the Ombudsman is the body properly equipped by the proceeding has been initiated at present. The Court is not
Constitution and our laws to preliminarily determine whether or persuaded. While it is true that no impeachment proceeding has
not the allegations of anomaly are true and who are liable been initiated, however, complaints relating to the NBN Project
therefor. The same holds true for our courts upon which the have already been filed against President Arroyo and other
Constitution reposes the duty to determine criminal guilt with personalities before the Office of the Ombudsman. As the Court
finality. Indeed, the rules of procedure in the Office of the has said earlier, the prosecutorial and judicial arms of
Ombudsman and the courts are well-defined and ensure that the government are the bodies equipped and mandated by the
Constitution and our laws to determine whether or not the

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CASES ON EVIDENCE

allegations of anomaly in the NBN Project are true and, if so, who Respondent Committees’ second argument rests on the view that
should be prosecuted and penalized for criminal conduct. the ruling in Senate v. Ermita, requiring invitations or subpoenas
to contain the "possible needed statute which prompted the need
Legislative inquiries, unlike court proceedings, are not subject to for the inquiry" along with the "usual indication of the subject of
the exacting standards of evidence essential to arrive at accurate inquiry and the questions relative to and in furtherance thereof"
factual findings to which to apply the law. Hence, Section 10 of is not provided for by the Constitution and is merely an obiter
the Senate Rules of Procedure Governing Inquiries in Aid of dictum.
Legislation provides that "technical rules of evidence applicable to
judicial proceedings which do not affect substantive rights need On the contrary, the Court sees the rationale and necessity of
not be observed by the Committee." Court rules which prohibit compliance with these requirements.
leading, hypothetical, or repetitive questions or questions calling
for a hearsay answer, to name a few, do not apply to a legislative An unconstrained congressional investigative power, like an
inquiry. Every person, from the highest public official to the most unchecked Executive, generates its own abuses. Consequently,
ordinary citizen, has the right to be presumed innocent until claims that the investigative power of Congress has been abused
proven guilty in proper proceedings by a competent court or body. (or has the potential for abuse) have been raised many times.53
Constant exposure to congressional subpoena takes its toll on the
IV ability of the Executive to function effectively. The requirements
set forth in Senate v. Ermita are modest mechanisms that would
Respondent Committees Committed Grave not unduly limit Congress’ power. The legislative inquiry must be
Abuse of Discretion in Issuing the Contempt Order confined to permissible areas and thus, prevent the "roving
commissions" referred to in the U.S. case, Kilbourn v.
Respondent Committees insist that they did not commit grave Thompson.54 Likewise, witnesses have their constitutional right
abuse of discretion in issuing the contempt order because (1) to due process. They should be adequately informed what matters
there is no legitimate claim of executive privilege; (2) they did not are to be covered by the inquiry. It will also allow them to prepare
violate the requirements laid down in Senate v. Ermita; (3) they the pertinent information and documents. To our mind, these
issued the contempt order in accordance with their internal requirements concede too little political costs or burdens on the
Rules; (4) they did not violate the requirement under Article VI, part of Congress when viewed vis-à-vis the immensity of its power
Section 21 of the Constitution requiring the publication of their of inquiry. The logic of these requirements is well articulated in
Rules; and (5) their issuance of the contempt order is not the study conducted by William P. Marshall,55 to wit:
arbitrary or precipitate.
A second concern that might be addressed is that the current
We reaffirm our earlier ruling. system allows committees to continually investigate the Executive
without constraint. One process solution addressing this concern
The legitimacy of the claim of executive privilege having been fully is to require each investigation be tied to a clearly stated purpose.
discussed in the preceding pages, we see no reason to discuss it At present, the charters of some congressional committees are so
once again. broad that virtually any matter involving the Executive can be
construed to fall within their province. Accordingly, investigations

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CASES ON EVIDENCE

can proceed without articulation of specific need or purpose. A courtesy. In this regard, the pronouncement in Arroyo v. De
requirement for a more precise charge in order to begin an inquiry Venecia56 is enlightening, thus:
should immediately work to limit the initial scope of the
investigation and should also serve to contain the investigation "Cases both here and abroad, in varying forms of expression, all
once it is instituted. Additionally, to the extent clear statements of deny to the courts the power to inquire into allegations that, in
rules cause legislatures to pause and seriously consider the enacting a law, a House of Congress failed to comply with its own
constitutional implications of proposed courses of action in other rules, in the absence of showing that there was a violation of a
areas, they would serve that goal in the context of congressional constitutional provision or the rights of private individuals.
investigations as well.
United States v. Ballin, Joseph & Co., the rule was stated thus:
The key to this reform is in its details. A system that allows a ‘The Constitution empowers each House to determine its rules of
standing committee to simply articulate its reasons to investigate proceedings. It may not by its rules ignore constitutional
pro forma does no more than imposes minimal drafting burdens. restraints or violate fundamental rights, and there should be a
Rather, the system must be designed in a manner that imposes reasonable relation between the mode or method of proceeding
actual burdens on the committee to articulate its need for established by the rule and the result which is sought to be
investigation and allows for meaningful debate about the merits of attained."
proceeding with the investigation. (Emphasis supplied)
In the present case, the Court’s exercise of its power of judicial
Clearly, petitioner’s request to be furnished an advance copy of review is warranted because there appears to be a clear abuse of
questions is a reasonable demand that should have been granted the power of contempt on the part of respondent Committees.
by respondent Committees. Section 18 of the Rules provides that:

Unfortunately, the Subpoena Ad Testificandum dated November "The Committee, by a vote of majority of all its members, may
13, 2007 made no specific reference to any pending Senate bill. It punish for contempt any witness before it who disobey any order
did not also inform petitioner of the questions to be asked. As it of the Committee or refuses to be sworn or to testify or to answer
were, the subpoena merely commanded him to "testify on what he proper questions by the Committee or any of its members."
knows relative to the subject matter under inquiry." (Emphasis supplied)

Anent the third argument, respondent Committees contend that In the assailed Decision, we said that there is a cloud of doubt as
their Rules of Procedure Governing Inquiries in Aid of Legislation to the validity of the contempt order because during the
(the "Rules") are beyond the reach of this Court. While it is true deliberation of the three (3) respondent Committees, only seven
that this Court must refrain from reviewing the internal processes (7) Senators were present. This number could hardly fulfill the
of Congress, as a co-equal branch of government, however, when majority requirement needed by respondent Committee on
a constitutional requirement exists, the Court has the duty to Accountability of Public Officers and Investigations which has a
look into Congress’ compliance therewith. We cannot turn a blind membership of seventeen (17) Senators and respondent
eye to possible violations of the Constitution simply out of Committee on National Defense and Security which has a
membership of eighteen (18) Senators. With respect to respondent

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CASES ON EVIDENCE

Committee on Trade and Commerce which has a membership of to expect that he can be cited in contempt only through a
nine (9) Senators, only three (3) members were present.57 These majority vote in a proceeding in which the matter has been fully
facts prompted us to quote in the Decision the exchanges between deliberated upon. There is a greater measure of protection for the
Senators Alan Peter Cayetano and Aquilino Pimentel, Jr. whereby witness when the concerns and objections of the members are
the former raised the issue of lack of the required majority to fully articulated in such proceeding. We do not believe that
deliberate and vote on the contempt order. respondent Committees have the discretion to set aside their
rules anytime they wish. This is especially true here where what
When asked about such voting during the March 4, 2008 hearing is involved is the contempt power. It must be stressed that the
before this Court, Senator Francis Pangilinan stated that any Rules are not promulgated for their benefit. More than anybody
defect in the committee voting had been cured because two-thirds else, it is the witness who has the highest stake in the proper
of the Senators effectively signed for the Senate in plenary observance of the Rules.
session.58
Having touched the subject of the Rules, we now proceed to
Obviously the deliberation of the respondent Committees that led respondent Committees’ fourth argument. Respondent
to the issuance of the contempt order is flawed. Instead of being Committees argue that the Senate does not have to publish its
submitted to a full debate by all the members of the respondent Rules because the same was published in 1995 and in 2006.
Committees, the contempt order was prepared and thereafter Further, they claim that the Senate is a continuing body; thus, it
presented to the other members for signing. As a result, the is not required to republish the Rules, unless the same is
contempt order which was issued on January 30, 2008 was not a repealed or amended.
faithful representation of the proceedings that took place on said
date. Records clearly show that not all of those who signed the On the nature of the Senate as a "continuing body," this Court
contempt order were present during the January 30, 2008 sees fit to issue a clarification. Certainly, there is no debate that
deliberation when the matter was taken up. the Senate as an institution is "continuing", as it is not dissolved
as an entity with each national election or change in the
Section 21, Article VI of the Constitution states that: composition of its members. However, in the conduct of its day-
to-day business the Senate of each Congress acts separately and
The Senate or the House of Representatives or any of its independently of the Senate of the Congress before it. The Rules
respective committees may conduct inquiries in aid of legislation of the Senate itself confirms this when it states:
in accordance with its duly published rules of procedure. The
rights of person appearing in or affected by such inquiries shall RULE XLIV
be respected. (Emphasis supplied) UNFINISHED BUSINESS

All the limitations embodied in the foregoing provision form part SEC. 123. Unfinished business at the end of the session shall be
of the witness’ settled expectation. If the limitations are not taken up at the next session in the same status.
observed, the witness’ settled expectation is shattered. Here, how
could there be a majority vote when the members in attendance All pending matters and proceedings shall terminate upon the
are not enough to arrive at such majority? Petitioner has the right expiration of one (1) Congress, but may be taken by the

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CASES ON EVIDENCE

succeeding Congress as if present for the first time. (emphasis

supplied) RULE LII
DATE OF TAKING EFFECT
Undeniably from the foregoing, all pending matters and
proceedings, i.e. unpassed bills and even legislative SEC. 137. These Rules shall take effect on the date of their
investigations, of the Senate of a particular Congress are adoption and shall remain in force until they are amended or
considered terminated upon the expiration of that Congress and it repealed. (emphasis supplied)
is merely optional on the Senate of the succeeding Congress to
take up such unfinished matters, not in the same status, but as if Section 136 of the Senate Rules quoted above takes into account
presented for the first time. The logic and practicality of such a the new composition of the Senate after an election and the
rule is readily apparent considering that the Senate of the possibility of the amendment or revision of the Rules at the start
succeeding Congress (which will typically have a different of each session in which the newly elected Senators shall begin
composition as that of the previous Congress) should not be their term.
bound by the acts and deliberations of the Senate of which they
had no part. If the Senate is a continuing body even with respect However, it is evident that the Senate has determined that its
to the conduct of its business, then pending matters will not be main rules are intended to be valid from the date of their adoption
deemed terminated with the expiration of one Congress but will, until they are amended or repealed. Such language is
as a matter of course, continue into the next Congress with the conspicuously absent from the Rules. The Rules simply state
same status. "(t)hese Rules shall take effect seven (7) days after publication in
two (2) newspapers of general circulation."59 The latter does not
This dichotomy of the continuity of the Senate as an institution explicitly provide for the continued effectivity of such rules until
and of the opposite nature of the conduct of its business is they are amended or repealed. In view of the difference in the
reflected in its Rules. The Rules of the Senate (i.e. the Senate’s language of the two sets of Senate rules, it cannot be presumed
main rules of procedure) states: that the Rules (on legislative inquiries) would continue into the
next Congress. The Senate of the next Congress may easily adopt
RULE LI different rules for its legislative inquiries which come within the
AMENDMENTS TO, OR REVISIONS OF, THE RULES rule on unfinished business.

SEC. 136. At the start of each session in which the Senators The language of Section 21, Article VI of the Constitution
elected in the preceding elections shall begin their term of office, requiring that the inquiry be conducted in accordance with the
the President may endorse the Rules to the appropriate duly published rules of procedure is categorical. It is incumbent
committee for amendment or revision. upon the Senate to publish the rules for its legislative inquiries in
each Congress or otherwise make the published rules clearly
The Rules may also be amended by means of a motion which state that the same shall be effective in subsequent Congresses or
should be presented at least one day before its consideration, and until they are amended or repealed to sufficiently put public on
the vote of the majority of the Senators present in the session notice.
shall be required for its approval. (emphasis supplied)

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CASES ON EVIDENCE

If it was the intention of the Senate for its present rules on Ermita’s claim of executive privilege, they curtly dismissed it as
legislative inquiries to be effective even in the next Congress, it unsatisfactory and ordered the arrest of petitioner. They could
could have easily adopted the same language it had used in its have informed petitioner of their ruling and given him time to
main rules regarding effectivity. decide whether to accede or file a motion for reconsideration.
After all, he is not just an ordinary witness; he is a high- ranking
Lest the Court be misconstrued, it should likewise be stressed official in a co-equal branch of government. He is an alter ego of
that not all orders issued or proceedings conducted pursuant to the President. The same haste and impatience marked the
the subject Rules are null and void. Only those that result in issuance of the contempt order, despite the absence of the
violation of the rights of witnesses should be considered null and majority of the members of the respondent Committees, and their
void, considering that the rationale for the publication is to subsequent disregard of petitioner’s motion for reconsideration
protect the rights of witnesses as expressed in Section 21, Article alleging the pendency of his petition for certiorari before this
VI of the Constitution. Sans such violation, orders and Court.
proceedings are considered valid and effective.
On a concluding note, we are not unmindful of the fact that the
Respondent Committees’ last argument is that their issuance of Executive and the Legislature are political branches of
the contempt order is not precipitate or arbitrary. Taking into government. In a free and democratic society, the interests of
account the totality of circumstances, we find no merit in their these branches inevitably clash, but each must treat the other
argument. with official courtesy and respect. This Court wholeheartedly
concurs with the proposition that it is imperative for the
As we have stressed before, petitioner is not an unwilling witness, continued health of our democratic institutions that we preserve
and contrary to the assertion of respondent Committees, the constitutionally mandated checks and balances among the
petitioner did not assume that they no longer had any other different branches of government.
questions for him. He repeatedly manifested his willingness to
attend subsequent hearings and respond to new matters. His only In the present case, it is respondent Committees’ contention that
request was that he be furnished a copy of the new questions in their determination on the validity of executive privilege should be
advance to enable him to adequately prepare as a resource binding on the Executive and the Courts. It is their assertion that
person. He did not attend the November 20, 2007 hearing their internal procedures and deliberations cannot be inquired
because Executive Secretary Ermita requested respondent into by this Court supposedly in accordance with the principle of
Committees to dispense with his testimony on the ground of respect between co-equal branches of government. Interestingly,
executive privilege. Note that petitioner is an executive official it is a courtesy that they appear to be unwilling to extend to the
under the direct control and supervision of the Chief Executive. Executive (on the matter of executive privilege) or this Court (on
Why punish petitioner for contempt when he was merely directed the matter of judicial review). It moves this Court to wonder: In
by his superior? Besides, save for the three (3) questions, he was respondent Committees’ paradigm of checks and balances, what
very cooperative during the September 26, 2007 hearing. are the checks to the Legislature’s all-encompassing, awesome
power of investigation? It is a power, like any other, that is
On the part of respondent Committees, this Court observes their susceptible to grave abuse.
haste and impatience. Instead of ruling on Executive Secretary

403
CASES ON EVIDENCE

While this Court finds laudable the respondent Committees’ well-

intentioned efforts to ferret out corruption, even in the highest
echelons of government, such lofty intentions do not validate or
accord to Congress powers denied to it by the Constitution and
granted instead to the other branches of government.

There is no question that any story of government malfeasance

deserves an inquiry into its veracity. As respondent Committees
contend, this is founded on the constitutional command of
transparency and public accountability. The recent clamor for a
"search for truth" by the general public, the religious community
and the academe is an indication of a concerned citizenry, a
nation that demands an accounting of an entrusted power.
However, the best venue for this noble undertaking is not in the
political branches of government. The customary partisanship
and the absence of generally accepted rules on evidence are too
great an obstacle in arriving at the truth or achieving justice that
meets the test of the constitutional guarantee of due process of
law. We believe the people deserve a more exacting "search for
truth" than the process here in question, if that is its objective.

WHEREFORE, respondent Committees’ Motion for

Reconsideration dated April 8, 2008 is hereby DENIED.

SO ORDERED.

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CASES ON EVIDENCE

Same; Same; Justifying Circumstances; Self-Defense; It is

hornbook doctrine that self-defense must be proved with certainty
by sufficient, satisfactory and convincing evidence that excludes
any vestige of criminal aggression on the part of the person
invoking it.—It is hornbook doctrine that self-defense must be
proved with certainty by sufficient, satisfactory and convincing
54. LADIANA VS PEOPLE evidence that excludes any vestige of criminal aggression on the
part of the person invoking it. It cannot be entertained if it is
Same; Same; Evidence; Admissions Distinguished from uncorroborated by any separate and competent evidence, and it is
Confessions; Sections 26 and 33 of Rule 130 of the Revised Rules also doubtful. The question whether the accused acted in self-
on Evidence distinguish one from the other.—Sections 26 and 33 defense is essentially a question of fact properly evaluated by the
of Rule 130 of the Revised Rules on Evidence distinguish one lower court; in this case, the Sandiganbayan.
from the other as follows: “SEC. 26. Admissions of a party.—The
act, declaration or omission of a party as to a relevant fact may be PANGANIBAN, J.:
given in evidence against him. “SEC. 33. Confession.—The
declaration of an accused acknowledging his guilt of the offense The Constitution bars the admission in evidence of any statement
charged, or of any offense necessarily included therein, may be extracted by the police from the accused without the assistance of
given in evidence against him.” In a confession, there is an competent and independent counsel during a custodial
acknowledgment of guilt; in an admission, there is merely a investigation. However, a counter-affidavit voluntarily presented
statement of fact not directly involving an acknowledgment of by the accused during the preliminary investigation, even if made
guilt or of the criminal intent to commit the offense with which without the assistance of counsel, may be used as evidence
one is charged. against the affiant.

Same; Same; Same; Admissions; In general, admissions may be The Case

rebutted by confessing their untruth or by showing they were
made by mistake.—In general, admissions may be rebutted by Before us is a Petition for Review under Rule 45 of the Rules of
confessing their untruth or by showing they were made by Court, assailing the April 10, 2000 Decision1 and August 4, 2000
mistake. The party may also establish that the response that Resolution2 of the Sandiganbayan (First Division) in Criminal
formed the admission was made in a jocular, not a serious, Case No. 16988. The dispositive portion of the assailed Decision
manner; or that the admission was made in ignorance of the true reads as follows:
state of facts. Yet, petitioner never offered any rationalization why
such admissions had been made, thus, leaving them unrebutted. "WHEREFORE, judgment is hereby rendered finding accused
In addition, admissions made under oath, as in the case at bar, JOSUE R. LADIANA GUILTY beyond reasonable doubt of the
are evidence of great weight against the declarant. They throw on crime of homicide and, in the absence of any modifying
him the burden of showing a mistake. circumstance, sentencing the said accused to: (a) suffer an
indeterminate sentence of imprisonment of ten (10) years of
prision mayor, as minimum, to seventeen (17) years and four (4)

405
CASES ON EVIDENCE

months of reclusion temporal, as maximum[;] (b) suffer all the insure the safety of persons passing along the said street and
appropriate accessory penalties consequent thereto; (c) indemnify when Francisco San Juan told the accused that the latter has no
the heirs of the victim, Francisco San Juan, in the total amount business in stopping him, said accused who was armed with a
of Fifty Six Thousand Five Hundred Pesos (P56,500.00); and (d) firearm, with intent to kill and with treachery, did then and there
pay the costs."3 willfully, unlawfully and feloniously attack and sho[o]t Francisco
San Juan with the firearm hitting Francisco San Juan at his head
The assailed Resolution denied petitioner’s Motion for and neck inflicting upon him fatal wounds thereby causing the
Reconsideration. death of Francisco San Juan."7

Petitioner was originally charged with murder before the During his arraignment on May 8, 1992, petitioner, assisted by
Sandiganbayan in an Information4 dated August 5, 1991. his counsel de parte,8 pled not guilty.9 After due trial, the
However, the anti-graft court issued an Order5 dated October 14, Sandiganbayan found him guilty of homicide, not murder.
1991, noting that "besides the allegation that the crime was
allegedly committed by the accused while he was ‘taking The Facts
advantage of his official position,’ nothing else is in the
Information to indicate this fact so that, as the Information In their Memoranda, both the prosecution and the defense
stands, nothing except a conclusion of fact exists to vest substantially relied upon the Sandiganbayan’s narration of the
jurisdiction [in] this Court over the accused and over the crime for facts as follows:
which he is charged."
"The prosecution presented five (5) witnesses, namely: Caridad M.
Further, the Order gave the government sufficient time to amend San Juan, PO2 Leopoldo Cacalda, Dr. Rogelio M. Javan, SPO2
the Information to show adequate facts to vest the Percival A. Gabinete, and Maria T. Cortez. Their respective
Sandiganbayan with jurisdiction over the case. Subsequently, an testimonies, in essence are as follows, to wit:
Amended Information,6 still charging petitioner with murder, was
filed on April 1, 1992. The accusatory portion reads as follows: "1. CARIDAD MARGALLO SAN JUAN (hereinafter, ‘Caridad’)
declared that she is the wife of Francisco San Juan (hereinafter
"That on or about the 29th day of December 1989, in the ‘Francisco’), the victim in the case at bar. Caridad testified that
Municipality of Lumban, Laguna, Philippines, and within the Francisco was the Barangay Captain of Barangay Salac, Lumban,
jurisdiction of this Honorable Court, the above-named accused, a Laguna, until he was shot and killed by accused Ladiana, who
public officer, being then a member of the Integrated National happens to be also a distant relative of the decedent.
Police (INP now PNP) assigned at the Lumban Police Station,
Lumban, Laguna, acting in relation to his duty which is primarily "Caridad recounted that, on December 29, 1989, she was in her
to enforce peace and order within his jurisdiction, taking house when an unidentified woman came and told her that her
advantage of his official position confronted Francisco San Juan husband was killed by accused Ladiana. She immediately called
why the latter was removing the steel pipes which were previously up her sister-in-law before rushing to Jacinto Street where the
placed to serve as barricade to prevent the entry of vehicles along gruesome incident allegedly transpired. Thereat, many people
P. Jacinto Street, Barangay Salac, Lumban, Laguna, purposely to were milling around, and Caridad saw the lifeless body of

406
CASES ON EVIDENCE

Francisco lying in the middle of the road and being examined by "Finally, Caridad recalled that, on the date of the incident, her
[SPO2] Percival A. Gabinete. husband was with his close friend, a certain Rodolfo Cabrera, and
some other persons, and that they went to Jacinto Street to repair
"Caridad recalled that it was around 11:00 o’clock a.m. when she the steel humps which were used to block the street during
reached the place of the subject incident. At that point in time, school days for the protection and safety of the school children.
she was not even allowed by the police to touch, much less get
near to, the cadaver of Francisco. Caridad, expectedly, was crying "2. PO2 LEOPOLDO DE RAMOS CACALDA, JR. (hereinafter,
and one of her aunts advised her to go home. ‘CACALDA’) declared that he is a policeman assigned at the
Lumban Police Station in Lumban, Laguna. He has been
"Caridad maintained that she was aware that her husband was designated as the radio operator of the station since 1989.
killed by accused Ladiana because this was what the woman
actually told her. Moreover, accused Ladiana had given himself "Cacalda recounted that, on December 29, 1989, at around 11:00
up to the police authorities. o’clock a.m., somebody, whose name he could no longer recall,
reported to him about an existing trouble along Jacinto Street in
"Caridad went on to narrate that, on December 30, 1989, she was Barangay Salac Cacalda responded by going to the scene, where
at the police station, where she gave her written statement before he was accompanied by Alberto Mercado, a member of the
police investigator PFC Virgilio Halili (hereinafter, ‘Halili’). CAGFIL. Thereat, Cacalda saw the lifeless body of Francisco lying
face up on the road. Cacalda did not examine the body of
"Additionally, Caridad presented the Death Certificate of her Francisco. He left the place of the incident when [SPO2] Percival
husband and testified that he was eventually buried at the A. Gabinete and other policemen subsequently arrived.
Lumban Cemetery. She declared that she had incurred about
Twenty Thousand Pesos (P20,000.00) for the funeral, burial and "Cacalda had gathered from the people milling around the body of
other incidental expenses by reason of the death of Francisco. Francisco that it was accused Ladiana who shot and killed
Francisco. Cacalda immediately left to look for accused Ladiana.
"On cross-examination, Caridad testified that, on December 29, However, he eventually saw accused Ladiana already inside the
1989, she was in her house and that she did not hear any jail of the police station and thereafter learned that said accused
gunshot between 10:30 and 11:00 o’clock a.m. Caridad also had surrendered to the police authority.
admitted she did not witness the killing of her husband.
"Cacalda recalled that he was later on investigated by Halili
"On questions propounded by the Court, Caridad narrated that because he was the responding policeman who went to the scene
her husband suffered two gunshot wounds - one on the upper of the incident. Consequently, Cacalda executed a written
right temple and the other on the left cheek. However, Caridad statement in relation to the subject incident.
stated that she was told that the wounds were the entry and the
exit points. She also told the Court that her husband was wearing "On cross-examination, Cacalda testified that he was a radio
short pants at the time of his death and that she found some operator and not an investigator of the police station. He also
bruises on his knees. testified that he did not witness the incident subject matter of the
case at bar.

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CASES ON EVIDENCE

C’, the assailant likewise must be behind the victim, at a distance

"Cacalda went on to testify that the people milling around the of more than twenty-four (24) inches away.
place of the incident told him that accused Ladiana had already
left. Because of this development, Cacalda proceeded to accused "Lastly, Javan testified that he was not able to retrieve any bullet
Ladiana’a house but was told that he had already gone to the during the examination. However, judging from the size of the
police station. Cacalda accordingly went to the police station wound and the point of entry, Javan opined that the firearm used
where he saw accused Ladiana already locked inside the jail. He was probably a caliber 38.
also saw a stab wound on accused Ladiana’s right bicep but he
did not anymore ask him how he sustained the said injury. "On questions propounded by the Court, Javan testified that
‘Gunshot wound A’ could have been fired first because the
"3. DR. ROGELIO JAVAN y MAGRACIA (hereinafter, ‘Javan’) trajectory is on the same level so much so that the assailant and
declared that he is a physician and the Municipal Health Officer the victim could have been both standing. Javan inferred that
of Lumban, Laguna. ‘Gunshot wound C’ could have been inflicted while the victim was
already falling down. Javan then stressed that both wounds are
"Javan recounted that he was the one who performed the fatal in nature.
necropsy on the cadaver of Francisco and that he had prepared
the corresponding reports and/or documents relating thereto. "4. SPO2 PERCIVAL AMBROSIO GABINETE (hereinafter,
Javan made a sketch representing the anterior and posterior ‘Gabinete’) declared that he is a police officer and a resident of No.
views of the body of Francisco, and labeled and placed red 4055 Villa Josefina Subdivision, Sta. Cruz, Laguna.
markings on the gunshot wounds found on the said cadaver. The
marking ‘Gunshot wound A’ is the point of entry, which is one (1) "The testimony of Gabinete was subsequently dispensed with,
centimeter in diameter and situated two (2) inches behind the left upon the admission of the defense that he was part of the group
ear. The marking ‘Gunshot wound B’ is the point of exit of of policemen who proceeded to the place of the subject incident
‘Gunshot wound A’, which is two (2) centimeters in diameter and and that he found the body of Francisco lying along the road.
found above the right cheekbone and one (1) inch below the right Additionally, the defense admitted the existence of the receipt
eye. Javan also testified that there is another gunshot wound and issued by Funeraria de Mesa dated January 3, 1990 in the sum
the point of entry and exit are labeled as ‘Gunshot wound C’ and of Six Thousand Five Hundred Pesos (P6,500.00).
‘Gunshot wound D’, respectively. ‘Gunshot wound D’ is one and
one-half (1-1/2) centimeters in diameter and located at the left "5. MARIO TALAVERA CORTEZ (hereinafter, ‘Cortez’) declared
cheek, three and one-half (3-1/2) centimeters below the left eye, that he is a retired Assistant Prosecutor of Laguna.
while ‘Gunshot wound C’ is one (1) centimeter in diameter and
found at the right lateral aspect of the neck, at the level of the "Prior to the conduct of the examination-in-chief on Cortez, the
adam’s apple. defense counsel made an admission as to the authorship,
authenticity, and voluntariness of the execution of the counter-
"According to Javan, the assailant must be behind the victim affidavit of accused Ladiana, which was subscribed and sworn to
when he inflicted ‘Gunshot wound A’. As regards ‘Gunshot wound before Cortez. In said counter-affidavit, accused Ladiana allegedly
admitted to making the fatal shots on Francisco. However,

408
CASES ON EVIDENCE

accused Ladiana allegedly did so in self-defense as Francisco was "On September 2, 1996, in view of his perception that the
then purportedly attacking accused Ladiana and had, in fact, evidence submitted by the prosecution is allegedly inadequate to
already inflicted a stab wound on the arm of accused Ladiana. sustain a conviction, accused Ladiana, through counsel, waived
his right to present controverting evidence. Instead, he asked for
"However, Cortez emphasized that he was not the one who time to file a written memorandum. Thus, both parties were given
conducted the preliminary investigation of the complaint which time within which to do so, after which the case shall be deemed
led to the filing of the subject case. Additionally, Cortez testified submitted for resolution.
that he would not be able to anymore recognize the face of the
affiant in the said counter-affidavit, but maintained that there "Thereafter, this Court received on October 25, 1996 by mail the
was a person who appeared and identified himself as Josue Memorandum for the defense. As for the prosecution, it opted not
Ladiana before he affixed his signature on the counter-affidavit. to file any."10 (Citations omitted)

"After the presentation of Cortez, the prosecution filed its formal Ruling of the Sandiganbayan
offer of evidence and rested its case.
The Sandiganbayan ruled that the prosecution had been able to
"On May 31, 1995, this Court issued a resolution admitting all establish the guilt of petitioner beyond reasonable doubt. The
the documentary evidence submitted by the prosecution. court a quo held that his Counter-Affidavit,11 in which he had
admitted to having fired the fatal shots that caused the victim’s
"On August 20, 1996, accused Ladiana filed a Motion for Leave of death,12 may be used as evidence against him. It underscored
Court to File Demurrer to Evidence dated August 16, 1995, the admission made by the defense as to the authorship, the
claiming that: (i) a review of the documentary and testimonial authenticity and the voluntariness of the execution of the
evidence adduced by the prosecution allegedly failed to show that Counter-Affidavit.13 In short, it ruled that the document had
the accused is guilty of the offense charged; (ii) at best, the sufficiently established his responsibility for the death of the
evidence submitted by the prosecution are allegedly hearsay in victim. However, it found no evidence of treachery; thus, it
character, considering that the supposed eyewitness in the convicted him of homicide only.14
person of Rodolfo Cabrera was never presented in court; and (iii)
the prosecution was allegedly merely able to prove the fact of Hence, this Petition.15
death of the victim, but not the identity of the person who caused
said death. Issues

"On August 23, 1996, this Court issued an Order of even date In his Memorandum, petitioner raises the following issues for this
holding that the filing of a demurrer to evidence is no longer Court’s consideration:
appropriate considering that accused Ladiana received a copy of
this Court’s resolution dated May 31, 1995 on the admission of "I. Whether or not the Sandiganbayan may convict the accused-
the prosecution’s documentary exhibits as early as May 25, 1995. petitioner beyond reasonable doubt of the crime of homicide even
in the absence of any eyewitness who personally saw the
sho[o]ting of the victim by the accused, basing it only on the

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testimony of the prosecutor who had administered the oath on This Court’s Ruling
the Counter-affidavit filed by petitioner-accused.
The Petition is not meritorious.
"II. Whether or not the prosecution has presented proof beyond
reasonable doubt to overcome the constitutional presumption of First Issue:
innocence of the accused and his right against self-incrimination
on the basis of the Counter-affidavit whose execution was Admissibility of Counter-Affidavit
admitted by the counsel of the petitioner, but not by the accused
personally. Undeniably, the resolution of this case hinges mainly on the
admissibility of the Counter-Affidavit17 submitted by petitioner
"III. Whether or not the Counter-affidavit of the accused-petitioner during the preliminary investigation. He argues that no counsel
which was considered by the Sandiganbayan in its decision as was present when the Affidavit was executed. In support of his
similar to an extrajudicial confession may [be] admitted against argument, he cites the Constitution thus:
him as evidenc[e] of guilt beyond reasonable doubt even if he was
not assi[s]ted then by counsel and while he was under custodial "SEC. 12. (1) Any person under investigation for the commission
investigation. of an offense shall have the right to be informed of his right to
remain silent and to have competent and independent counsel
"IV. Whether or not the Sandiganbayan is constitutionally and preferably of his own choice. If the person cannot afford the
legally correct in issuing the Order of August 23, 1996 denying services of counsel, he must be provided with one. These rights
the Motion for Leave of Court to File Demurrer to Evidence dated cannot be waived except in writing and in the presence of
August 16, 1995 filed by the accused in accordance with Sec. 15 counsel.
of Rule 120 of the 1985 Rules on Criminal Procedure in relation
to Rule XXI of the Revised Rules of Sandiganbayan. xxx xxx xxx

"V. Whether or not accused is entitled to the mitigating (3) Any confession or admission obtained in violation of this or
circumstance of voluntary surrender which fact was admitted by Section 17 hereof shall be inadmissible in evidence against
the prosecution as it even used the same as proof of the guilt of him."18
the accused."16
It is well-settled that the foregoing legal formalities required by
In short, petitioner raises the following questions in this appeal: the fundamental law of the land apply only to extra-judicial
(1) whether the Counter-Affidavit he executed during the confessions or admissions obtained during custodial
preliminary investigation of this case is admissible proof showing investigations.19 Indeed, the rights enumerated in the
his complicity in the crime, (2) whether the Sandiganbayan erred constitutional provision "exist only in custodial interrogations, or
in denying his Motion for Leave to File a Demurrer to Evidence, in-custody interrogation of accused persons."20
and (3) whether he is entitled to the mitigating circumstance of
voluntary surrender. Custodial interrogation is the questioning initiated by law
enforcement officers after a person has been taken into custody

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CASES ON EVIDENCE

or otherwise deprived of his freedom of action in any significant was under custody or interrogation. Hence, the constitutional
way.21 rights of a person under custodial investigation as embodied in
Article III, Section 12 of the 1987 Constitution, are not at issue in
In the present case, petitioner admits that the questioned this case.
statements were made during the preliminary investigation, not
during the custodial investigation. However, he argues that the However, the accused -- whether in court or undergoing
right to competent and independent counsel also applies during preliminary investigation before the public prosecutor --
preliminary investigations. unquestionably possess rights that must be safeguarded. These
include: 1) the right to refuse to be made witnesses; 2) the right
We disagree. A preliminary investigation is an inquiry or a not to have any prejudice whatsoever imputed to them by such
proceeding to determine whether there is sufficient ground to refusal; 3) the right to testify on their own behalf, subject to
engender a well-founded belief that a crime has been committed, cross-examination by the prosecution; and 4) while testifying, the
and that the respondent is probably guilty thereof and should be right to refuse to answer a specific question that tends to
held for trial.22 incriminate them for some crime other than that for which they
are being prosecuted.25
Evidently, a person undergoing preliminary investigation before
the public prosecutor cannot be considered as being under We do not, however, agree with the Sandiganbayan’s
custodial investigation. In fact, this Court has unequivocally characterization of petitioner’s Counter-Affidavit as an
declared that a defendant on trial or under preliminary extrajudicial confession. It is only an admission. Sections 26 and
investigation is not under custodial interrogation.23 It explained 33 of Rule 130 of the Revised Rules on Evidence distinguish one
as follows: from the other as follows:

"His [accused] interrogation by the police, if any there had been "SEC. 26. Admissions of a party. – The act, declaration or
would already have been ended at the time of the filing of the omission of a party as to a relevant fact may be given in evidence
criminal case in court (or the public prosecutor’s office). Hence, against him.
with respect to a defendant in a criminal case already pending in
court (or the public prosecutor’s office), there is no occasion to "SEC. 33. Confession. – The declaration of an accused
speak of his right while under ‘custodial interrogation’ laid down acknowledging his guilt of the offense charged, or of any offense
by the second and subsequent sentences of Section 20, Article IV necessarily included therein, may be given in evidence against
of the 1973 Constitution [now Section 12, Article III of the 1987 him."
Constitution], for the obvious reason that he is no longer under
‘custodial interrogation.’"24 In a confession, there is an acknowledgment of guilt; in an
admission, there is merely a statement of fact not directly
There is no question that even in the absence of counsel, the involving an acknowledgment of guilt or of the criminal intent to
admissions made by petitioner in his Counter-Affidavit are not commit the offense with which one is charged.26 Thus, in the
violative of his constitutional rights. It is clear from the case at bar, a statement by the accused admitting the
undisputed facts that it was not exacted by the police while he commission of the act charged against him but denying that it

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CASES ON EVIDENCE

was done with criminal intent is an admission, not a weight against the declarant. They throw on him the burden of
confession.27 showing a mistake.30

The Counter-Affidavit in question contains an admission that Petitioner contends that nowhere in the transcripts of this case
petitioner actually shot the victim when the latter was attacking can it be found that he has admitted to the authorship, the
him. We quote the pertinent portion: authenticity or the voluntariness of the Counter-Affidavit. We
quote verbatim the proceedings in the Sandiganbayan:
"[K]aya itong si Kapitan San Juan ay sumugod at hinawakan ako
sa may leeg ng aking suot na T-shirt upang ako ay muling "PJ GARCHITORENA
saksakin; sa dahilang hindi ako makatakbo o makaiwas sa kabila
ng aking pananalag hanggang magpaputok ako ng pasumala sa Well, he will identify the person who took the oath before him.
kanya; sa bilis ng pangyayari ay hindi ko alam na siya ay Will you deny that it was your client who took the oath before the
tinamaan;"28 Fiscal at the preliminary investigation?

Through the above statement, petitioner admits shooting the ATTY. ILAGAN
victim -- which eventually led to the latter’s death -- but denies
having done it with any criminal intent. In fact, he claims he did We will admit that, your Honor.
it in self-defense. Nevertheless, whether categorized as a
confession or as an admission, it is admissible in evidence against PJ GARCHITORENA
him.
So in that case we will have no question about the authorship,
Further, we do not doubt the voluntariness of the Counter- authenticity and the voluntariness of the execution of the
Affidavit. Petitioner himself submitted it to the public prosecutor counter-affidavit dated July 31, 1990? Companiero?
to justify his actions in relation to the charges hurled against
him. It escapes this Court how he can cavalierly deny a document ATTY ILAGAN
that he has voluntarily submitted and originally relied upon in his
defense. Admitted, your Honor."31

In general, admissions may be rebutted by confessing their The admissions of petitioner made through his counsel cannot be
untruth or by showing they were made by mistake. The party may any clearer. To be sure, the unbroken stream of judicial dicta is
also establish that the response that formed the admission was that, in the conduct of their case, clients are bound by the actions
made in a jocular, not a serious, manner; or that the admission of their counsels, save when the latter’s negligence is so gross,
was made in ignorance of the true state of facts.29 Yet, petitioner reckless and inexcusable that the former are deprived of their day
never offered any rationalization why such admissions had been in court.32 Also, clients, being bound by the actions of their
made, thus, leaving them unrebutted. In addition, admissions counsels, cannot complain that the result of the litigation might
made under oath, as in the case at bar, are evidence of great have been different had their lawyers proceeded differently.33 A
counsel may err as to the competency of witnesses, the

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CASES ON EVIDENCE

sufficiency and the relevance of evidence, the proper defense, the by sufficient, satisfactory and convincing evidence that excludes
burden of proof, the introduction or the withholding of witnesses any vestige of criminal aggression on the part of the person
or pieces of evidence, or the manner of arguing the case. This invoking it.39 It cannot be entertained if it is uncorroborated by
Court, however, has ruled several times that those are not even any separate and competent evidence, and it is also doubtful.40
proper grounds for a new trial, unless the counsel’s incompetence The question whether the accused acted in self-defense is
is so gross that the clients are prevented from fairly presenting essentially a question of fact properly evaluated by the lower
their case.34 court; in this case, the Sandiganbayan.41

Having admitted that he had fatally shot the victim, petitioner By itself, the Counter-Affidavit miserably fails to establish the
had the duty of showing that the killing was justified, and that requisites of self-defense enumerated in the law.42 Had petitioner
the latter incurred no criminal liability therefor.35 Petitioner been more vigilant in protecting his rights, he could have
should have relied on the strength of his own evidence and not on presented clear and cogent evidence to prove those elements. But,
the weakness of that for the prosecution. Even if his evidence be as found by the court a quo, he not only failed to discharge the
weak, it cannot be disbelieved after the accused has admitted the burden of proving the existence of the justifying circumstance of
killing.36 self-defense; he did not even bother to present any evidence at
all.43 So, we do not see how the Sandiganbayan could have been
Petitioner argues that it was the prosecution that indirectly raised selective in its treatment of his Counter-Affidavit.
the issue of self-defense. Hence, he could not be bound by it. This
argument deserves scant consideration. As discussed earlier, the Verily, if the accused fails to discharge the burden of proving the
declarations contained in his Counter-Affidavit are admissions existence of self-defense or of any other circumstance that
that may be used as evidence against him.37 The Sandiganbayan eliminates criminal liability, his conviction shall of necessity
did not unfairly presume that he had indeed raised the theory of follow, on the basis of his admission of the killing.44 Upholding
self-defense, because this argument had already been laid out in this principle does not in any way violate his right to be presumed
his Counter-Affidavit. No presumption was necessary, because innocent until proven guilty. When he admitted to having killed
the admission was clear and unequivocal. the victim, the burden of proving his innocence fell on him. It
became his duty to establish by clear and convincing evidence the
Neither do we believe petitioner’s claim that the anti-graft court lawful justification for the killing.
"miserably failed to give equal effect or treatment to all the
allegations found therein (Counter-Affidavit) choosing deliberately Therefore, petitioner can no longer invoke his constitutional right
and without reasonable basis the parts which are incriminating in to be presumed innocent of the crime charged.45 As far as he is
character, and ignoring without sufficient legal basis the concerned, homicide has already been established. The fact of
exculpatory assertions of the accused."38 death and its cause were established by his admissions coupled
with the other prosecution evidence including the Certificate of
The unsubstantiated and uncorroborated statements of petitioner Death,46 the Certificate of Post-Mortem Examination47 and the
in his Counter-Affidavit are utterly insufficient to discharge his Medico-Legal Findings.48 The intent to kill is likewise presumed
burden of proving that the act of killing was justified. It is from the fact of death.49
hornbook doctrine that self-defense must be proved with certainty

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CASES ON EVIDENCE

Second Issue: to surrender unconditionally, either because they acknowledge

their guilt or wish to save the authorities the trouble and the
Denial of Motion for Leave to File Demurrer expense that will necessarily be incurred in searching for and
capturing them.56
Petitioner then argues that the Sandiganbayan erred in not giving
due course to his Motion for Leave to File Demurrer to Evidence. The only pieces of evidence in support of the plea of voluntary
He brands this denial as legally and constitutionally wrong.50 surrender made by petitioner are statements made by two (2)
prosecution witnesses that they were allegedly told by other
We disagree. Prior leave to file a demurrer to evidence is people that he had already gone to the police station. There is no
discretionary upon the trial court.51 And, unless there is grave showing that he was not actually arrested; or that when he went
abuse amounting to lack or excess of jurisdiction in its denial, the to the police station, he surrendered himself to a person in
trial court’s resolution may not be disturbed.52 authority. Neither is there any finding that he has evinced a
desire to own to any complicity in the killing.1âwphi1
Final Issue:
We have ruled in the past that the accused who had gone to the
Voluntary Surrender police headquarters merely to report the shooting incident did not
evince any desire to admit responsibility for the killing. Thus, he
After vigorously arguing against his own Counter-Affidavit, could not be deemed to have voluntarily surrendered.57 In the
petitioner, in a surprising change of tenor, implores this Court to absence of sufficient and convincing proof showing the existence
consider his voluntary surrender to the police authorities as a of indispensable circumstances, we cannot appreciate voluntary
mitigating circumstance. He argues that two of the prosecution surrender to mitigate petitioner’s penalty.
witnesses testified that he had surrendered to the police
authorities after the shooting incident.53 To buttress his WHEREFORE, the Petition is DENIED and the assailed Decision
argument, he contends that the "main reason for his voluntary and Resolution AFFIRMED. Costs against petitioner.
surrender is that he sincerely believe[d] that he was legally
justified in defending himself as a policeman when he fought the SO ORDERED.
victim after he was attacked by the latter."54 It goes without
saying that this statement only reaffirms the admissions
contained in his Counter-Affidavit, which he so vehemently tried
to discredit.

For voluntary surrender to mitigate criminal liability, the

following elements must concur: 1) the offender has not been
actually arrested, 2) the offender surrenders himself to a person
in authority or to the latter’s agent, and 3) the surrender is
voluntary.55 To be sufficient, the surrender must be spontaneous
and made in a manner clearly indicating the intent of the accused

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CASES ON EVIDENCE

Evidence; Words and Phrases; Preponderance of evidence means

evidence which is more convincing to the court as worthy of belief
than that which is offered in opposition thereto.—In civil cases,
the party bearing the burden of proof must establish his case by
preponderance of evidence. Preponderance of evidence means
evidence which is more convincing to the court as worthy of belief
than that which is offered in opposition thereto.

TINGA, J.:

This is a petition for review on certiorari under Rule 45 of the

1997 Rules of Civil Procedure, assailing the Court of Appeals’
Decision1 in CA-G.R. CV No. 69674 which affirmed the Decision2
of the Regional Trial Court (RTC) of Pampanga, Branch 43. The
RTC Decision dismissed petitioner’s action for damages against
respondents.

The following factual antecedents are matters of record.

55. REPUBLIC VS BAUTISTA
Herein petitioner Department of Health (DOH), represented by its
Evidence; Alibis and Denials; The rule is that the positive and then Regional Director, Dr. Ricardo T. Trinidad, engaged the
categorical assertions of witnesses generally prevail over bare services of Rescue Security Services (Rescue Security), owned by
denials—such accordance of greater probative value to evidence respondent Donatilla Bautista, to guard the DOH premises
that is positive in nature than that which is negative in character against theft, pilferage, robbery, arson and other unlawful acts of
is a timehonored principle.—The Court of Appeals sweepingly strangers. On 21 December 1995, Dr. Trinidad and Elena Palma,
brushed aside Liangco’s testimony and was persuaded by the Branch Manager of Rescue Security, signed a Contract of
Macabulos’ rebuttal testimony denying that she had spoken to Security Services3 effective from 1 January 1996 to 31 December
Liangco about the incident. The rule is that the positive and 1996.4
categorical assertions of witnesses generally prevail over bare
denials. Such accordance of greater probative value to evidence In the morning of 8 April 1996, petitioner’s personnel discovered
that is positive in nature than that which is negative in character that the ceiling of Storeroom No. 1 was forcibly detached. After
is a time-honored principle. Denial is a self-serving negative the matter was reported to the police authorities, they conducted
evidence that cannot be given greater weight than the declaration an inventory and discovered that medicines worth ₱4,244,385.32
of credible witnesses who testified on affirmative matters. were missing.5 The report of the Criminal Investigation Group of
Accordingly, Liangco’s testimony that he was informed about the the Philippine National Police categorically stated that a robbery
incident must be upheld.

415
CASES ON EVIDENCE

occurred inside the storeroom and pegged the loss at

₱6,369,837.04.6 The dispositive portion of the RTC Decision reads:

Petitioner repeatedly notified Rescue Security about the loss. The WHEREFORE, all the foregoing considered, the court hereby
last of such notification was on 5 July 1996 through a letter sent renders its decision in favor of the defendants and against the
by Dr. Trinidad.7 On 9 August 1996, petitioner sent Rescue plaintiff.
Security a notice of termination of the contract of services. Rescue
Security refused to pay the total amount of loss, prompting In view hereof, the prayers for the payment to the plaintiff by the
petitioner to institute an action for damages against respondents defendant of actual and exemplary damages and costs of suit are
based on Rescue Security’s contractual undertaking that it would DENIED for lack of merit.
guarantee the payment of any loss or damage to petitioner’s
property. The complaint was docketed as Civil Case No. 11099 Likewise, the prayers of defendant Palma for award of moral,
and raffled to the RTC of Pampanga, Branch 43. attorney’s and appearance fees are denied for lack of merit.

Respondent Bautista did not appear despite proper service of Costs against the plaintiff.
summons on her. Only respondent Palma filed an answer8 and
participated in the proceedings. SO ORDERED.11

During trial, respondent Palma denied the loss of the medicines From the RTC Decision, petitioner elevated the matter to the
and further alleged that they were never placed under the custody Court of Appeals. Petitioner questioned the trial court’s ruling
of Rescue Security or any of its security guards assigned at the that the absence of inventory negated its claim that the medicines
DOH premises. Respondent Palma also pointed out that no had been placed under the custody of Rescue Security. Petitioner
notification was made within 48 hours from discovery of the loss also disputed the trial court’s finding that the DOH failed to
in violation of Paragraph 6 of the Contract of Security Services.9 report the loss within 48 hours from the incident.12

On 28 April 2000, the RTC rendered a Decision10 dismissing the On 26 September 2005, the Court of Appeals rendered the
complaint. While the trial court found that the medicines worth assailed Decision,13 affirming the RTC Decision with respect to
₱4,220,293.35 were indeed lost, it ruled that petitioner’s evidence its conclusion that petitioner failed to notify respondents about
failed to establish that the medicines had already been placed the loss within 48 hours from its occurrence. As regards the issue
inside the storeroom when the robbery took place. The trial court of whether an inventory of the medicines was a requirement
found that there was no proof that the medicines had been placed before they could be considered placed under the control or
under the control and protection of Rescue Security since the custody of Rescue Security, the Court of Appeals differed from the
latter was not furnished with an inventory of the medicines. The RTC’s opinion. It concluded that the petitioner and Rescue
trial court also based the dismissal of petitioner’s complaint on its Security were in agreement that as long as the medicines were
conclusion that petitioner failed to notify Rescue Security of the placed within the DOH premises, "they were already considered to
loss within 48 hours from its occurrence, although the RTC have been placed under the control of the security guards and
decision did not elaborate on this finding.

416
CASES ON EVIDENCE

any loss that may occur shall be the responsibility of the discretion; (4) the judgment is based on a misapprehension of
latter."14 facts; (5) the findings of fact are conflicting; (6) the Court of
Appeals went beyond the issues of the case and its findings are
Just the same, the Court of Appeals affirmed the dismissal of contrary to the admissions of both appellant and appellees; (7)
petitioner’s complaint because of petitioner’s failure to notify the findings of fact of the Court of Appeals are contrary to those of
Rescue Security of the fact of loss within 48 hours from the the trial court; (8) said findings of fact are conclusions without
incident. citation of specific evidence on which they are based; (9) the facts
set forth in the petition as well as in the petitioner's main and
Hence, the instant petition which raises the sole issue of whether reply briefs are not disputed by the respondents; and (10) the
the Court of Appeals was correct in concluding that petitioner findings of fact of the Court of Appeals are premised on the
failed to comply with the 48-hour notice requirement. supposed absence of evidence and contradicted by the evidence
on record.16
The Court of Appeals acknowledged that the RTC Decision did not
elaborate on its finding that petitioner failed to comply with the An examination of the decisions of the courts below warrants the
required notification and that the testimonies of witnesses on this review of their common finding that Rescue Security was not
factual issue were conflicting. Thus, the Court of Appeals was notified within 48 hours about the loss of the medicines. The RTC
"constrained to uphold the trial court’s finding that there was no Decision did not cite the specific evidence on which it relied in
notification about the loss."15 Furthermore, the Court of Appeals concluding that petitioner failed to immediately notify Rescue
deduced from the contents of the 5 July 1996 letter sent by Dr. Security. The Court of Appeals overlooked relevant testimonial
Trinidad that petitioner had notified the security guard only after evidence, which, if properly appreciated, would justify a different
two weeks from the incident. conclusion.

On the other hand, petitioner insists that based on the records of As pointed out by petitioner, Rescue Security’s own personnel
the case, Rescue Security, as well as its security guards posted at officer, Oliver Liangco, testified that in the morning of 8 April
the DOH premises and its personnel officer, had actual notice of 1996, he went to the DOH premises after he received at work a
the incident on the day the loss was discovered. phone call from a certain Lourdes Macabulos, Planning Officer of
DOH-Region 3. According to Liangco, Macabulos informed him
At the outset, it should be noted that the jurisdiction of this Court about the incident, prompting him to proceed to the DOH
in a petition for review on certiorari under Rule 45 of the Rules of premises and make an ocular inspection of the storeroom.
Court is limited to reviewing only errors of law. This Court is not a Furthermore, Liangco testified that Macabulos accompanied him
trier of facts. It is a settled doctrine that findings of fact of the when he inspected the storeroom and even verbally conveyed to
Court of Appeals are generally binding and conclusive on this him that the drugs inside the storeroom were missing.17 This fact
Court. Such factual findings alone is sufficient proof that Rescue Security had been informed
of the loss through its personnel, Oliver Liangco. Under Rule 130,
shall not be disturbed, unless: (1) the conclusion is a finding Section 26 of the Rules on Evidence, the act, declaration or
grounded entirely on speculation, surmise and conjecture; (2) the omission of a party as to a relevant fact may be given in evidence
inference made is manifestly mistaken; (3) there is grave abuse of

417
CASES ON EVIDENCE

against him. This rule is based upon the notion that no man AGENCY’s security guards, the agency shall not be held liable.
would make any declaration against himself, unless it is true.18 (Emphasis supplied)22

On cross-examination, respondent Palma likewise testified that It is a cardinal rule in the interpretation of contracts that if the
Liangco reported to her about the inspection he had conducted on terms of a contract are clear and leave no doubt on the intention
the DOH premises on the day of the alleged loss.19 Her testimony of the contracting parties, the literal meaning of its stipulation
corroborated Liangco’s testimony that on the day of the discovery shall control.23 When the language of the contract is explicit, as
of the loss, Liangco was summoned to the DOH premises where in the case at bar, leaving no doubt as to the intention of the
the reported loss took place. drafters thereof, the courts may not read into it any other
intention that would contradict its plain import.24
The Court of Appeals sweepingly brushed aside Liangco’s
testimony and was persuaded by Macabulos’ rebuttal testimony Unfortunately, the Contract of Security Services does not define
denying that she had spoken to Liangco about the incident. The the requisite notice. Neither does it specify the manner of
rule is that the positive and categorical assertions of witnesses reporting the loss, whether it should be written or verbal, or the
generally prevail over bare denials. Such accordance of greater employee responsible should convey or receive the notice. The
probative value to evidence that is positive in nature than that contract plainly states that the loss or damage should be reported
which is negative in character is a time-honored principle.20 to Rescue Security within 48 hours from its occurrence as a
Denial is a self-serving negative evidence that cannot be given condition for the payment of the loss of property.
greater weight than the declaration of credible witnesses who
testified on affirmative matters.21 Accordingly, Liangco’s Thus, the reportorial requirement should be construed in its plain
testimony that he was informed about the incident must be and literal import.1âwphi1 The Court cannot further qualify the
upheld. requisite or read into it any other meaning not expressed in the
contract. Accordingly, as long as Rescue Security is informed in
Now, does the notice to Liangco sufficiently comply with the any manner whatsoever about the loss of the property, the
requirement under the Contract of Security Services? requisite notice should be deemed satisfied. In the case at bar,
Liangco received the information, not only once but twice, in his
Paragraph 6 of the Contract of Security Services provides: capacity as an officer of Rescue Security. The notice to Liangco
was notice to Rescue Security.
6. The AGENCY shall guarantee payment of any loss or damage to
the CLIENT’s property, provided such property is placed under Be that as it may, Rescue Security countered by way of defense
the control of the AGENCY’s security guards during their tour of that it should not be made liable for the loss because the loss was
duties and the loss or damage is reported to the AGENCY within not caused by its fault or negligence.25 The trial court agreed,
48 hours from occurrence. Should the AGENCY be made to pay, it stating that the evidence failed to establish that the loss was
subrogates the right of the CLIENT against the party or parties caused by the fault or negligence of Rescue Security or of its
responsible for such loss or damage. However, when such loss or security guards.26
damage is caused by force m[a]jeure, fortuitous events, or factors
which do not involve negligence or carelessness on the part of the

418
CASES ON EVIDENCE

While it is true that the question of negligence on the part of guilty of negligence in performing the security services it
Rescue Security was never made an issue either before the Court undertook to provide under the contract which include shielding
of Appeals or in this petition, nonetheless this Court deems it the DOH premises from robbery and other unlawful acts.
proper to resolve the same to arrive at a complete determination
of this case. After all, it would be far-fetched to expect Rescue After a painstaking review of the records of the case, the Court
Security to raise the matter of negligence as an issue since it was finds that petitioner failed to present preponderant evidence
itself the appellee before the Court of Appeals and the trial court showing that the negligence or carelessness of the security guards
ruled that negligence could not be pinned on Rescue Security in was the proximate cause of the loss of the medicines. A perusal of
the absence of evidence on the aspect. their testimonies reveals that the security guards posted at
petitioner’s premises during the period that the robbery took
Anyhow, the issue of negligence is related to the issue of Rescue place had performed their duties in the manner reasonably
Security’s liability for the loss of the medicines because the expected of them under the circumstances. Petitioner failed to
absence thereof is one of the exculpating circumstances expressly present proof to rebut this evidence. It is possible that there were
recognized in Paragraph 627 of the Contract of Security Services. security lapses during the long holidays on the occasion of which
Indeed, this Court has the authority to waive the lack of proper the loss was thought to have occurred. However, absent any
assignment of errors if the unassigned errors closely relate to evidence showing a direct link between the loss and the conduct
errors properly pinpointed out or if the unassigned errors refer to of the security guards, the Court cannot make Rescue Security
matters upon which depends the determination of the questions answerable for the loss.
raised by the errors properly assigned.28 In the instant case, the
determination of the issue of whether Rescue Security may be WHEREFORE, the petition for review on certiorari is DENIED.
held liable under the contract will depend upon the Court’s The Decision of the Court of Appeals in CA-G.R. CV No. 69674 is
finding of negligence on the part of Rescue Security’s security hereby AFFIRMED. Costs against petitioner.
guards.
SO ORDERED.
In civil cases, the party bearing the burden of proof must
establish his case by preponderance of evidence. Preponderance
of evidence means evidence which is more convincing to the court
as worthy of belief than that which is offered in opposition
thereto.29

From a reading of the Contract of Security Services,30 it can be

fairly deduced that the fact of negligence on the part of Rescue
Security cannot be presumed in the event of loss. Thus, in order
to impute liability to Rescue Security in case of loss, it is
incumbent upon petitioner to prove that Rescue Security and or
its security guards were

419
CASES ON EVIDENCE

that he has resigned. In our Decision, we used the totality test to

arrive at the conclusion that petitioner has resigned. We referred
to and analyzed events that were prior, contemporaneous and
posterior to the oath-taking of respondent Arroyo as president. All
these events are facts which are well-established and cannot be
refuted. Thus, we adverted to prior events that built up the
irresistable pressure for the petitioner to resign, x x x All these
prior events are facts which are within judicial notice by this
Court. There was no need to cite their news accounts. The
reference by the Court to certain newspapers reporting them as
they happened does not make them inadmissible evidence for
being hearsay. The news account only buttressed these facts as
facts. For all his loud protestations, petitioner has not singled out
any of these facts as false.

Same; Same; Same; Same; The Court used the Angara Diary to
decipher the intent to resign on the part of the former president—
it is not unusual for courts to distill a person’s subjective intent
from the evidence before them.—We now come to some events of
January 20, 2001 contemporaneous to the oath taking of
respondent Arroyo. We used the Angara Diary to decipher the
intent to resign on the part of the petitioner. Let it be emphasized
that it is not unusual for courts to distill a person’s subjective
intent from the evidence before them. Everyday, courts ascertain
intent in criminal cases, in civil law cases involving last wills and
testaments, in commercial cases involving contracts and in other
56. ESTRADA VS DISIERTO similar cases. As will be discussed below, the use of the Angara
Diary is not prohibited by the hearsay rule. Petitioner may
Presidency; Resignation; Evidence; Hearsay Evidence; disagree with some of the inferences arrived at by the Court from
Newspapers; The Supreme Court used the totality test to arrive at the facts narrated in the Diary but that does not make the Diary
the conclusion that the former President has resigned, and the inadmissible as evidence.
reference by the Court to certain newspapers reporting the events
as they happened does not make them inadmissible evidence for Same; Same; Same; Hearsay Evidence; Words and Phrases;
being hearsay as the merely buttressed known facts to the court. Evidence is called hearsay when its probative force depends, in
—Petitioner insists he is the victim of prejudicial publicity. Among whole or in part, on the competency and credibility of some
others, he assails the Decision for adverting to newspaper persons other than the witness by whom it is sought to produce
accounts of the events and occurrences to reach the conclusion it; Not all hearsay evidence is inadmissible as evidence—over the

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years, a huge body of hearsay evidence has been admitted by bureaucracy, intriga. (I am very tired. I don’t want any more of
courts due to their relevance, trustworthiness and necessity.— this—it’s too painful. I’m tired of the red tape, the bureaucracy,
Even assuming arguendo that the Angara Diary was an out of the intrigue). I just want to clear my name, then I will go.” We
court statement, still its use is not covered by the hearsay rule. noted that days before, petitioner had repeatedly declared that he
Evidence is called hearsay when its probative force depends, in would not resign despite the growing clamor for his resignation.
whole or in part, on the competency and credibility of some The reason for the meltdown is obvious - - - his will not to resign
persons other than the witness by whom it is sought to produce has wilted.
it. There are three reasons for excluding hearsay evidence: (1)
absence of cross examination; (2) absence of demeanor evidence, Same; Same; Same; Same; Words and Phrases; Doctrine of
and (3) absence of the oath. Not all hearsay evidence, however, is Adoptive Admission; An adoptive admission is a party’s reaction
inadmissible as evidence. Over the years, a huge body of hearsay as an admission of something stated or implied by the other
evidence has been admitted by courts due to their relevance, person.—It is, however, argued that the Angara Diary is not the
trustworthiness and necessity. diary of the petitioner, hence, non-binding on him. The argument
overlooks the doctrine of adoptive admission. An adoptive
Same; Same; Same; Same; A more circumspect examination of admission is a party’s reaction to a statement or action by
our rules of exclusion will show that they do not cover admissions another person when it is reasonable to treat the party’s reaction
of a party and the Angara Diary belongs to this class.—A complete as an admission of something stated or implied by the other
analysis of any hearsay problem requires that we further person. Jones explains that the “basis for admissibility of
determine whether the hearsay evidence is one exempted from the admissions made vicariously is that arising from the ratification
rules of exclusion. A more circumspect examination of our rules or adoption by the party of the statements which the other person
of exclusion will show that they do not cover admissions of a had made.” To use the blunt language of Mueller and Kirkpatrick,
party and the Angara Diary belongs to this class. Section 26 of “this process of attribution is not mumbo jumbo but common
Rule 130 provides that “the act, declaration or omission of a party sense.” In the Angara Diary, the options of the petitioner started
as to a relevant fact may be given in evidence against him.” It has to dwindle when the armed forces withdrew its support from him
long been settled that these admissions are admissible even if as President and commander-in-chief. Thus, Executive Secretary
they are hearsay. Angara had to ask Senate President Pimentel to advise petitioner
to consider the option of “dignified exit or resignation.” Petitioner
Same; Same; Same; Same; The Angara Diary contains direct did not object to the suggested option but simply said he could
statements of the former president which can be categorized as never leave the country. Petitioner’s silence on this and other
admissions of a party.—The Angara Diary contains direct related suggestions can be taken as an admission by him.
statements of petitioner which can be categorized as admissions
of a party: his proposal for a snap presidential election where he Same; Same; Same; Same; Res Inter Alios Acta Rule; One of the
would not be a candidate; his statement that he only wanted the exceptions to the res inter alios acta rule is with respect to
five-day period promised by Chief of Staff Angelo Reyes; his admissions by a copartner or agent, and Executive Secretary
statements that he would leave by Monday if the second envelope Angara as such was an alter ego of the former president—he was
would be opened by Monday and “Pagod na pagod na ako. Ayoko the Little President—as, indeed, he was authorized by the former
na, masyado nang masakit. Pagod na ako sa red tape, president to act for him in the critical hours and days before he

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CASES ON EVIDENCE

abandoned Malacañang Palace.—Again, petitioner errs in his by an agent, either in making a contract for his principal, or at
contention. The res inter alios acta rule has several exceptions. the time and accompanying the performance of any act within the
One of them is provided in section 29 of Rule 130 with respect to scope of his authority, having relation to, and connected with,
admissions by a co-partner or agent. Executive Secretary Angara and in the course of the particular contract or transaction in
as such was an alter ego of the petitioner. He was the Little which he is then engaged, or in the language of the old writers,
President. Indeed, he was authorized by the petitioner to act for dum fervet opus is, in legal effect, said by his principal and
him in the critical hours and days before he abandoned admissible in evidence against such principal.”
Malacañang Palace. Thus, according to the Angara Diary, the
petitioner told Secretary Angara: “Mula umpisa pa lang ng Same; Same; Same; Same; The ban on hearsay evidence does not
kampanya, Ed, ikaw na lang pinakikinggan ko. At hanggang sa cover independently relevant statements—those statements which
huli, ikaw pa rin.” (Since the start of the campaign, Ed, you have are relevant independently of whether they are true or not.—
been the only one I’ve listened to. And now at the end, you still Moreover, the ban on hearsay evidence does not cover
are.)” This statement of full trust was made by the petitioner after independently relevant statements. These are statements which
Secretary Angara briefed him about the progress of the first are relevant independently of whether they are true or not. They
negotiation. True to this trust, the petitioner had to ask Secretary belong to two (2) classes: (1) those statements which are the very
Angara if he would already leave Malacañang after taking their facts in issue, and (2) those statements which are circumstantial
final lunch on January 20, 2001 at about 1:00 p.m. The Angara evidence of the facts in issue. The second class includes the
Diary quotes the petitioner as saying to Secretary Angara: “Ed, following: a. Statement of a person showing his state of mind,
kailangan ko na bang umalis? (Do I have to leave now?)” that is, his mental condition, knowledge, belief, intention, ill will
Secretary Angara told him to go and he did. Petitioner cannot and other emotions; b. Statements of a person which show his
deny that Secretary Angara headed his team of negotiators that physical condition, as illness and the like; c. Statements of a
met with the team of the respondent Arroyo to discuss the person from which an inference may be made as to the state of
peaceful and orderly transfer of power after his relinquishment of mind of another, that is, the knowledge, belief, motive, good or
the powers of the presidency. The Diary shows that petitioner was bad faith, etc. of the latter; d. Statements which may identity the
always briefed by Secretary Angara on the progress of their date, place and person in question; and e. Statements showing
negotiations. Secretary Angara acted for and in behalf of the the lack of credibility of a witness.
petitioner in the crucial days before respondent Arroyo took her
oath as President. Consequently, petitioner is bound by the acts Same; Same; Same; Best Evidence Rule; Production of the
and declarations of Secretary Angara. original may be dispensed with, in the trial court’s discretion,
whenever in the case in hand the opponent does not bonafide
Same; Same; Same; Same; Same; Under our rules of evidence, dispute the contents of the document and no other useful
admissions of an agent (Executive Secretary) are binding on the purpose will be served by requiring production.—It is true that
principal (former president).—Under our rules of evidence, the Court relied not upon the original but only a copy of the
admissions of an agent (Secretary Angara) are binding on the Angary Diary as published in the Philippine Daily Inquirer on
principal (petitioner). Jones very well explains the reasons for the February 4-6, 2001. In doing so, the Court, did not, however,
rule, viz.: “What is done, by agent, is done by the principal violate the best evidence rule. Wigmore, in his book on evidence,
through him, as through a mere instrument. So, whatever is said states that: “Production of the original may be dispensed with, in

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CASES ON EVIDENCE

the trial court’s discretion, whenever in the case in hand the to object to the admissibility of the Angara Diary when he filed his
opponent does not bona fide dispute the contents of the Memorandum dated February 20, 2001, Reply Memorandum
document and no other useful purpose will be served by requiring dated February 22, 2001, Supplemental Memorandum dated
production. February 23, 2001, and Second Supplemental Memorandum
dated February 24, 2001. He was therefore not denied due
Same; Same; Same; Authentication of Private Writings; A party process. In the words of Wigmore, supra, petitioner had “been
who does not deny the genuineness of a proffered instrument may given an opportunity to inspect” the Angara Diary but did not
not object that it was not properly identified before it was object to its admissibility. It is already too late in the day to raise
admitted in evidence.—On the rule of authentication of private his objections in an Omnibus Motion, after the Angara Diary has
writings, Francisco states that: “A proper foundation must be laid been used as evidence and a decision rendered partly on the basis
for the admission of documentary evidence; that is, the identity thereof.
and authenticity of the document must be reasonably established
as a pre-requisite to its admission. (Rouw v. Arts, 174 Ark. 79, PUNO, J.:
294 S.W. 993, 52 A.L.R. 1263, and others) However, a party who
does not deny the genuineness of a proffered instrument may not On the line in the cases at bar is the office of the President.
object that it was not properly identified before it was admitted in Petitioner Joseph Ejercito Estrada alleges that he is the President
evidence. (Strand v. Halverson, 220 Iowa 1276, 264 N.W. 266, on leave while respondent Gloria Macapagal-Arroyo claims she is
103 A.L.R. 835).” the President. The warring personalities are important enough
but more transcendental are the constitutional issues embedded
Same; Same; Same; Same; Where the former president was given on the parties' dispute. While the significant issues are many, the
an opportunity to inspect the Angara Diary but did not object to jugular issue involves the relationship between the ruler and the
its admissibility, it is already too late in the day to raise his ruled in a democracy, Philippine style.
objections in an Omnibus Motion, after the Angara Diary has
been used as evidence and a decision rendered partly on the basis First, we take a view of the panorama of events that precipitated
thereof—Petitioner cites the case of State Prosecutors v. Muro, the crisis in the office of the President.
which frowned on reliance by courts on newspaper accounts. In
that case, Judge Muro was dismissed from the service for relying In the May 11, 1998 elections, petitioner Joseph Ejercito Estrada
on a newspaper account in dismissing eleven (11) cases against was elected President while respondent Gloria Macapagal-Arroyo
Mrs. Imelda Romualdez Marcos. There is a significant difference, was elected Vice-President. Some ten (10) million Filipinos voted
however, between the Muro case and the cases at bar. In the for the petitioner believing he would rescue them from life's
Muro case, Judge Muro dismissed the cases against Mrs. Marcos adversity. Both petitioner and the respondent were to serve a six-
on the basis of a newspaper account without affording the year term commencing on June 30, 1998.
prosecution “the basic opportunity to be heard on the matter by
way of a written comment or on oral argument. . . (this is) not From the beginning of his term, however, petitioner was plagued
only a blatant denial of elementary due process to the by a plethora of problems that slowly but surely eroded his
Government but is palpably indicative of bad faith and partiality.” popularity. His sharp descent from power started on October 4,
In the instant cases, however, the petitioner had an opportunity 2000. Ilocos Sur Governor, Luis "Chavit" Singson, a longtime

423
CASES ON EVIDENCE

friend of the petitioner, went on air and accused the petitioner, and later asked for petitioner's resignation.7 However, petitioner
his family and friends of receiving millions of pesos from jueteng strenuously held on to his office and refused to resign.
lords.1
The heat was on. On November 1, four (4) senior economic
The exposẻ immediately ignited reactions of rage. The next day, advisers, members of the Council of Senior Economic Advisers,
October 5, 2000, Senator Teofisto Guingona, Jr., then the Senate resigned. They were Jaime Augusto Zobel de Ayala, former Prime
Minority Leader, took the floor and delivered a fiery privilege Minister Cesar Virata, former Senator Vicente Paterno and
speech entitled "I Accuse." He accused the petitioner of receiving Washington Sycip.8 On November 2, Secretary Mar Roxas II also
some P220 million in jueteng money from Governor Singson from resigned from the Department of Trade and Industry.9 On
November 1998 to August 2000. He also charged that the November 3, Senate President Franklin Drilon, and House
petitioner took from Governor Singson P70 million on excise tax Speaker Manuel Villar, together with some 47 representatives
on cigarettes intended for Ilocos Sur. The privilege speech was defected from the ruling coalition, Lapian ng Masang Pilipino.10
referred by then Senate President Franklin Drilon, to the Blue
Ribbon Committee (then headed by Senator Aquilino Pimentel) The month of November ended with a big bang. In a tumultuous
and the Committee on Justice (then headed by Senator Renato session on November 13, House Speaker Villar transmitted the
Cayetano) for joint investigation.2 Articles of Impeachment11 signed by 115 representatives, or more
than 1/3 of all the members of the House of Representatives to
The House of Representatives did no less. The House Committee the Senate. This caused political convulsions in both houses of
on Public Order and Security, then headed by Representative Congress. Senator Drilon was replaced by Senator Pimentel as
Roilo Golez, decided to investigate the exposẻ of Governor Senate President. Speaker Villar was unseated by Representative
Singson. On the other hand, Representatives Heherson Alvarez, Fuentebella.12 On November 20, the Senate formally opened the
Ernesto Herrera and Michael Defensor spearheaded the move to impeachment trial of the petitioner. Twenty-one (21) senators took
impeach the petitioner. their oath as judges with Supreme Court Chief Justice Hilario G.
Davide, Jr., presiding.13
Calls for the resignation of the petitioner filled the air. On October
11, Archbishop Jaime Cardinal Sin issued a pastoral statement in The political temperature rose despite the cold December. On
behalf of the Presbyteral Council of the Archdiocese of Manila, December 7, the impeachment trial started.14 The battle royale
asking petitioner to step down from the presidency as he had lost was fought by some of the marquee names in the legal profession.
the moral authority to govern.3 Two days later or on October 13, Standing as prosecutors were then House Minority Floor Leader
the Catholic Bishops Conference of the Philippines joined the cry Feliciano Belmonte and Representatives Joker Arroyo, Wigberto
for the resignation of the petitioner.4 Four days later, or on Tañada, Sergio Apostol, Raul Gonzales, Oscar Moreno, Salacnib
October 17, former President Corazon C. Aquino also demanded Baterina, Roan Libarios, Oscar Rodriguez, Clavel Martinez and
that the petitioner take the "supreme self-sacrifice" of Antonio Nachura. They were assisted by a battery of private
resignation.5 Former President Fidel Ramos also joined the prosecutors led by now Secretary of Justice Hernando Perez and
chorus. Early on, or on October 12, respondent Arroyo resigned now Solicitor General Simeon Marcelo. Serving as defense counsel
as Secretary of the Department of Social Welfare and Services6 were former Chief Justice Andres Narvasa, former Solicitor
General and Secretary of Justice Estelito P. Mendoza, former City

424
CASES ON EVIDENCE

Fiscal of Manila Jose Flaminiano, former Deputy Speaker of the resignation of the public prosecutors. Chief Justice Davide
House Raul Daza, Atty. Siegfried Fortun and his brother, Atty. granted the motion.20
Raymund Fortun. The day to day trial was covered by live TV and
during its course enjoyed the highest viewing rating. Its high and January 18 saw the high velocity intensification of the call for
low points were the constant conversational piece of the petitioner's resignation. A 10-kilometer line of people holding
chattering classes. The dramatic point of the December hearings lighted candles formed a human chain from the Ninoy Aquino
was the testimony of Clarissa Ocampo, senior vice president of Monument on Ayala Avenue in Makati City to the EDSA Shrine to
Equitable-PCI Bank. She testified that she was one foot away symbolize the people's solidarity in demanding petitioner's
from petitioner Estrada when he affixed the signature "Jose resignation. Students and teachers walked out of their classes in
Velarde" on documents involving a P500 million investment Metro Manila to show their concordance. Speakers in the
agreement with their bank on February 4, 2000.15 continuing rallies at the EDSA Shrine, all masters of the physics
of persuasion, attracted more and more people.21
After the testimony of Ocampo, the impeachment trial was
adjourned in the spirit of Christmas. When it resumed on On January 19, the fall from power of the petitioner appeared
January 2, 2001, more bombshells were exploded by the inevitable. At 1:20 p.m., the petitioner informed Executive
prosecution. On January 11, Atty. Edgardo Espiritu who served Secretary Edgardo Angara that General Angelo Reyes, Chief of
as petitioner's Secretary of Finance took the witness stand. He Staff of the Armed Forces of the Philippines, had defected. At 2:30
alleged that the petitioner jointly owned BW Resources p.m., petitioner agreed to the holding of a snap election for
Corporation with Mr. Dante Tan who was facing charges of President where he would not be a candidate. It did not diffuse
insider trading.16 Then came the fateful day of January 16, when the growing crisis. At 3:00 p.m., Secretary of National Defense
by a vote of 11-1017 the senator-judges ruled against the opening Orlando Mercado and General Reyes, together with the chiefs of
of the second envelope which allegedly contained evidence all the armed services went to the EDSA Shrine.22 In the
showing that petitioner held P3.3 billion in a secret bank account presence of former Presidents Aquino and Ramos and hundreds
under the name "Jose Velarde." The public and private of thousands of cheering demonstrators, General Reyes declared
prosecutors walked out in protest of the ruling. In disgust, that "on behalf of Your Armed Forces, the 130,000 strong
Senator Pimentel resigned as Senate President.18 The ruling members of the Armed Forces, we wish to announce that we are
made at 10:00 p.m. was met by a spontaneous outburst of anger withdrawing our support to this government."23 A little later, PNP
that hit the streets of the metropolis. By midnight, thousands had Chief, Director General Panfilo Lacson and the major service
assembled at the EDSA Shrine and speeches full of sulphur were commanders gave a similar stunning announcement.24 Some
delivered against the petitioner and the eleven (11) senators. Cabinet secretaries, undersecretaries, assistant secretaries, and
bureau chiefs quickly resigned from their posts.25 Rallies for the
On January 17, the public prosecutors submitted a letter to resignation of the petitioner exploded in various parts of the
Speaker Fuentebella tendering their collective resignation. They country. To stem the tide of rage, petitioner announced he was
also filed their Manifestation of Withdrawal of Appearance with ordering his lawyers to agree to the opening of the highly
the impeachment tribunal.19 Senator Raul Roco quickly moved controversial second envelope.26 There was no turning back the
for the indefinite postponement of the impeachment proceedings tide. The tide had become a tsunami.
until the House of Representatives shall have resolved the issue of

425
CASES ON EVIDENCE

January 20 turned to be the day of surrender. At 12:20 a.m., the It is for this reason that I now leave Malacañang Palace, the seat
first round of negotiations for the peaceful and orderly transfer of of the presidency of this country, for the sake of peace and in
power started at Malacañang'' Mabini Hall, Office of the Executive order to begin the healing process of our nation. I leave the Palace
Secretary. Secretary Edgardo Angara, Senior Deputy Executive of our people with gratitude for the opportunities given to me for
Secretary Ramon Bagatsing, Political Adviser Angelito Banayo, service to our people. I will not shirk from any future challenges
Asst. Secretary Boying Remulla, and Atty. Macel Fernandez, head that may come ahead in the same service of our country.
of the Presidential Management Staff, negotiated for the
petitioner. Respondent Arroyo was represented by now Executive I call on all my supporters and followers to join me in to
Secretary Renato de Villa, now Secretary of Finance Alberto promotion of a constructive national spirit of reconciliation and
Romulo and now Secretary of Justice Hernando Perez.27 Outside solidarity.
the palace, there was a brief encounter at Mendiola between pro
and anti-Estrada protesters which resulted in stone-throwing and May the Almighty bless our country and beloved people.
caused minor injuries. The negotiations consumed all morning
until the news broke out that Chief Justice Davide would MABUHAY!
administer the oath to respondent Arroyo at high noon at the
EDSA Shrine. (Sgd.) JOSEPH EJERCITO ESTRADA"

At about 12:00 noon, Chief Justice Davide administered the oath It also appears that on the same day, January 20, 2001, he
to respondent Arroyo as President of the Philippines.28 At 2:30 signed the following letter:31
p.m., petitioner and his family hurriedly left Malacañang
Palace.29 He issued the following press statement:30 "Sir:

"20 January 2001 By virtue of the provisions of Section 11, Article VII of the
Constitution, I am hereby transmitting this declaration that I am
STATEMENT FROM unable to exercise the powers and duties of my office. By
operation of law and the Constitution, the Vice-President shall be
PRESIDENT JOSEPH EJERCITO ESTRADA the Acting President.

At twelve o'clock noon today, Vice President Gloria Macapagal- (Sgd.) JOSEPH EJERCITO ESTRADA"
Arroyo took her oath as President of the Republic of the
Philippines. While along with many other legal minds of our A copy of the letter was sent to former Speaker Fuentebella at
country, I have strong and serious doubts about the legality and 8:30 a.m. on January 20.23 Another copy was transmitted to
constitutionality of her proclamation as President, I do not wish Senate President Pimentel on the same day although it was
to be a factor that will prevent the restoration of unity and order received only at 9:00 p.m.33
in our civil society.
On January 22, the Monday after taking her oath, respondent
Arroyo immediately discharged the powers the duties of the

426
CASES ON EVIDENCE

Presidency. On the same day, this Court issued the following President Gloria Macapagal-Arroyo as President of the Republic of
Resolution in Administrative Matter No. 01-1-05-SC, to wit: the Philippines, extending its congratulations and expressing its
support for her administration as a partner in the attainment of
"A.M. No. 01-1-05-SC — In re: Request of Vice President Gloria the nation's goals under the Constitution."39
Macapagal-Arroyo to Take her Oath of Office as President of the
Republic of the Philippines before the Chief Justice — Acting on On January 26, the respondent signed into law the Solid Waste
the urgent request of Vice President Gloria Macapagal-Arroyo to Management Act.40 A few days later, she also signed into law the
be sworn in as President of the Republic of the Philippines, Political Advertising ban and Fair Election Practices Act.41
addressed to the Chief Justice and confirmed by a letter to the
Court, dated January 20, 2001, which request was treated as an On February 6, respondent Arroyo nominated Senator Teofisto
administrative matter, the court Resolve unanimously to confirm Guingona, Jr., as her Vice President.42 The next day, February 7,
the authority given by the twelve (12) members of the Court then the Senate adopted Resolution No. 82 confirming the nomination
present to the Chief Justice on January 20, 2001 to administer of Senator Guingona, Jr.43 Senators Miriam Defensor-Santiago,
the oath of office of Vice President Gloria Macapagal-Arroyo as Juan Ponce Enrile, and John Osmena voted "yes" with
President of the Philippines, at noon of January 20, reservations, citing as reason therefor the pending challenge on
2001.1âwphi1.nêt the legitimacy of respondent Arroyo's presidency before the
Supreme Court. Senators Teresa Aquino-Oreta and Robert
This resolution is without prejudice to the disposition of any Barbers were absent.44 The House of Representatives also
justiciable case that may be filed by a proper party." approved Senator Guingona's nomination in Resolution No.
178.45 Senator Guingona, Jr. took his oath as Vice President two
Respondent Arroyo appointed members of her Cabinet as well as (2) days later.46
ambassadors and special envoys.34 Recognition of respondent
Arroyo's government by foreign governments swiftly followed. On On February 7, the Senate passed Resolution No. 83 declaring
January 23, in a reception or vin d' honneur at Malacañang, led that the impeachment court is functus officio and has been
by the Dean of the Diplomatic Corps, Papal Nuncio Antonio terminated.47 Senator Miriam Defensor-Santiago stated "for the
Franco, more than a hundred foreign diplomats recognized the record" that she voted against the closure of the impeachment
government of respondent Arroyo.35 US President George W. court on the grounds that the Senate had failed to decide on the
Bush gave the respondent a telephone call from the White House impeachment case and that the resolution left open the question
conveying US recognition of her government.36 of whether Estrada was still qualified to run for another elective
post.48
On January 24, Representative Feliciano Belmonte was elected
new Speaker of the House of Representatives.37 The House then Meanwhile, in a survey conducted by Pulse Asia, President
passed Resolution No. 175 "expressing the full support of the Arroyo's public acceptance rating jacked up from 16% on January
House of Representatives to the administration of Her Excellency, 20, 2001 to 38% on January 26, 2001.49 In another survey
Gloria Macapagal-Arroyo, President of the Philippines."38 It also conducted by the ABS-CBN/SWS from February 2-7, 2001,
approved Resolution No. 176 "expressing the support of the results showed that 61% of the Filipinos nationwide accepted
House of Representatives to the assumption into office by Vice President Arroyo as replacement of petitioner Estrada. The survey

427
CASES ON EVIDENCE

also revealed that President Arroyo is accepted by 60% in Metro

Manila, by also 60% in the balance of Luzon, by 71% in the Thus, the stage for the cases at bar was set. On February 5,
Visayas, and 55% in Mindanao. Her trust rating increased to petitioner filed with this Court GR No. 146710-15, a petition for
52%. Her presidency is accepted by majorities in all social prohibition with a prayer for a writ of preliminary injunction. It
classes: 58% in the ABC or middle-to-upper classes, 64% in the D sought to enjoin the respondent Ombudsman from "conducting
or mass class, and 54% among the E's or very poor class.50 any further proceedings in Case Nos. OMB 0-00-1629, 1754,
1755, 1756, 1757 and 1758 or in any other criminal complaint
After his fall from the pedestal of power, the petitioner's legal that may be filed in his office, until after the term of petitioner as
problems appeared in clusters. Several cases previously filed President is over and only if legally warranted." Thru another
against him in the Office of the Ombudsman were set in motion. counsel, petitioner, on February 6, filed GR No. 146738 for Quo
These are: (1) OMB Case No. 0-00-1629, filed by Ramon A. Warranto. He prayed for judgment "confirming petitioner to be the
Gonzales on October 23, 2000 for bribery and graft and lawful and incumbent President of the Republic of the Philippines
corruption; (2) OMB Case No. 0-00-1754 filed by the Volunteers temporarily unable to discharge the duties of his office, and
Against Crime and Corruption on November 17, 2000 for plunder, declaring respondent to have taken her oath as and to be holding
forfeiture, graft and corruption, bribery, perjury, serious the Office of the President, only in an acting capacity pursuant to
misconduct, violation of the Code of Conduct for Government the provisions of the Constitution." Acting on GR Nos. 146710-15,
Employees, etc; (3) OMB Case No. 0-00-1755 filed by the Graft the Court, on the same day, February 6, required the respondents
Free Philippines Foundation, Inc. on November 24, 2000 for "to comment thereon within a non-extendible period expiring on
plunder, forfeiture, graft and corruption, bribery, perjury, serious 12 February 2001." On February 13, the Court ordered the
misconduct; (4) OMB Case No. 0-00-1756 filed by Romeo consolidation of GR Nos. 146710-15 and GR No. 146738 and the
Capulong, et al., on November 28, 2000 for malversation of public filing of the respondents' comments "on or before 8:00 a.m. of
funds, illegal use of public funds and property, plunder, etc.; (5) February 15."
OMB Case No. 0-00-1757 filed by Leonard de Vera, et al., on
November 28, 2000 for bribery, plunder, indirect bribery, On February 15, the consolidated cases were orally argued in a
violation of PD 1602, PD 1829, PD 46, and RA 7080; and (6) OMB four-hour hearing. Before the hearing, Chief Justice Davide, Jr.51
Case No. 0-00-1758 filed by Ernesto B. Francisco, Jr. on and Associate Justice Artemio Panganiban52 recused themselves
December 4, 2000 for plunder, graft and corruption. on motion of petitioner's counsel, former Senator Rene A.
Saguisag. They debunked the charge of counsel Saguisag that
A special panel of investigators was forthwith created by the they have "compromised themselves by indicating that they have
respondent Ombudsman to investigate the charges against the thrown their weight on one side" but nonetheless inhibited
petitioner. It is chaired by Overall Deputy Ombudsman Margarito themselves. Thereafter, the parties were given the short period of
P. Gervasio with the following as members, viz: Director Andrew five (5) days to file their memoranda and two (2) days to submit
Amuyutan, Prosecutor Pelayo Apostol, Atty. Jose de Jesus and their simultaneous replies.
Atty. Emmanuel Laureso. On January 22, the panel issued an
Order directing the petitioner to file his counter-affidavit and the In a resolution dated February 20, acting on the urgent motion
affidavits of his witnesses as well as other supporting documents for copies of resolution and press statement for "Gag Order" on
in answer to the aforementioned complaints against him.

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respondent Ombudsman filed by counsel for petitioner in G.R. Assuming that the petitions present a justiciable controversy,
No. 146738, the Court resolved: whether petitioner Estrada is a President on leave while
respondent Arroyo is an Acting President.
"(1) to inform the parties that the Court did not issue a resolution
on January 20, 2001 declaring the office of the President vacant III
and that neither did the Chief Justice issue a press statement
justifying the alleged resolution; Whether conviction in the impeachment proceedings is a
condition precedent for the criminal prosecution of petitioner
(2) to order the parties and especially their counsel who are Estrada. In the negative and on the assumption that petitioner is
officers of the Court under pain of being cited for contempt to still President, whether he is immune from criminal prosecution.
refrain from making any comment or discussing in public the
merits of the cases at bar while they are still pending decision by IV
the Court, and
Whether the prosecution of petitioner Estrada should be enjoined
(3) to issue a 30-day status quo order effective immediately on the ground of prejudicial publicity.
enjoining the respondent Ombudsman from resolving or deciding
the criminal cases pending investigation in his office against We shall discuss the issues in seriatim.
petitioner, Joseph E. Estrada and subject of the cases at bar, it
appearing from news reports that the respondent Ombudsman I
may immediately resolve the cases against petitioner Joseph E.
Estrada seven (7) days after the hearing held on February 15, Whether or not the cases
2001, which action will make the cases at bar moot and
academic."53 At bar involve a political question

The parties filed their replies on February 24. On this date, the Private respondents54 raise the threshold issue that the cases at
cases at bar were deemed submitted for decision. bar pose a political question, and hence, are beyond the
jurisdiction of this Court to decide. They contend that shorn of its
The bedrock issues for resolution of this Court are: embroideries, the cases at bar assail the "legitimacy of the Arroyo
administration." They stress that respondent Arroyo ascended the
I presidency through people power; that she has already taken her
oath as the 14th President of the Republic; that she has exercised
Whether the petitions present a justiciable controversy. the powers of the presidency and that she has been recognized by
foreign governments. They submit that these realities on ground
II constitute the political thicket, which the Court cannot enter.

We reject private respondents' submission. To be sure, courts

here and abroad, have tried to lift the shroud on political question

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CASES ON EVIDENCE

but its exact latitude still splits the best of legal minds. Developed of the political question doctrine when it expanded the power of
by the courts in the 20th century, the political question doctrine judicial review of this court not only to settle actual controversies
which rests on the principle of separation of powers and on involving rights which are legally demandable and enforceable but
prudential considerations, continue to be refined in the mills of also to determine whether or not there has been a grave abuse of
constitutional law.55 In the United States, the most authoritative discretion amounting to lack or excess of jurisdiction on the part
guidelines to determine whether a question is political were of any branch or instrumentality of government.59 Heretofore, the
spelled out by Mr. Justice Brennan in the 1962 case or Baker v. judiciary has focused on the "thou shalt not's" of the Constitution
Carr,56 viz: directed against the exercise of its jurisdiction.60 With the new
provision, however, courts are given a greater prerogative to
"x x x Prominent on the surface of any case held to involve a determine what it can do to prevent grave abuse of discretion
political question is found a textually demonstrable constitutional amounting to lack or excess of jurisdiction on the part of any
commitment of the issue to a coordinate political department or a branch or instrumentality of government. Clearly, the new
lack of judicially discoverable and manageable standards for provision did not just grant the Court power of doing nothing. In
resolving it, or the impossibility of deciding without an initial sync and symmetry with this intent are other provisions of the
policy determination of a kind clearly for non-judicial discretion; 1987 Constitution trimming the so called political thicket.
or the impossibility of a court's undertaking independent Prominent of these provisions is section 18 of Article VII which
resolution without expressing lack of the respect due coordinate empowers this Court in limpid language to "x x x review, in an
branches of government; or an unusual need for unquestioning appropriate proceeding filed by any citizen, the sufficiency of the
adherence to a political decision already made; or the potentiality factual basis of the proclamation of martial law or the suspension
of embarrassment from multifarious pronouncements by various of the privilege of the writ (of habeas corpus) or the extension
departments on question. Unless one of these formulations is thereof x x x."
inextricable from the case at bar, there should be no dismissal for
non justiciability on the ground of a political question's presence. Respondents rely on the case of Lawyers League for a Better
The doctrine of which we treat is one of 'political questions', not of Philippines and/or Oliver A. Lozano v. President Corazon C.
'political cases'." Aquino, et al.61 and related cases62 to support their thesis that
since the cases at bar involve the legitimacy of the government of
In the Philippine setting, this Court has been continuously respondent Arroyo, ergo, they present a political question. A more
confronted with cases calling for a firmer delineation of the inner cerebral reading of the cited cases will show that they are
and outer perimeters of a political question.57 Our leading case is inapplicable. In the cited cases, we held that the government of
Tanada v. Cuenco,58 where this Court, through former Chief former President Aquino was the result of a successful revolution
Justice Roberto Concepcion, held that political questions refer "to by the sovereign people, albeit a peaceful one. No less than the
those questions which, under the Constitution, are to be decided Freedom Constitution63 declared that the Aquino government
by the people in their sovereign capacity, or in regard to which was installed through a direct exercise of the power of the Filipino
full discretionary authority has been delegated to the legislative or people "in defiance of the provisions of the 1973 Constitution, as
executive branch of the government. It is concerned with issues amended." In is familiar learning that the legitimacy of a
dependent upon the wisdom, not legality of a particular measure." government sired by a successful revolution by people power is
To a great degree, the 1987 Constitution has narrowed the reach beyond judicial scrutiny for that government automatically orbits

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CASES ON EVIDENCE

out of the constitutional loop. In checkered contrast, the preserved when the United States acquired jurisdiction over the
government of respondent Arroyo is not revolutionary in Philippines. In the Instruction to the Second Philippine
character. The oath that she took at the EDSA Shrine is the oath Commission of April 7, 1900 issued by President McKinley, it is
under the 1987 Constitution.64 In her oath, she categorically specifically provided "that no law shall be passed abridging the
swore to preserve and defend the 1987 Constitution. Indeed, she freedom of speech or of the press or of the rights of the people to
has stressed that she is discharging the powers of the presidency peaceably assemble and petition the Government for redress of
under the authority of the 1987 Constitution. grievances." The guaranty was carried over in the Philippine Bill,
the Act of Congress of July 1, 1902 and the Jones Law, the Act of
In fine, the legal distinction between EDSA People Power I EDSA Congress of August 29, 1966.66
People Power II is clear. EDSA I involves the exercise of the people
power of revolution which overthrew the whole government. EDSA Thence on, the guaranty was set in stone in our 1935
II is an exercise of people power of freedom of speech and freedom Constitution,67 and the 197368 Constitution. These rights are
of assembly to petition the government for redress of grievances now safely ensconced in section 4, Article III of the 1987
which only affected the office of the President. EDSA I is extra Constitution, viz:
constitutional and the legitimacy of the new government that
resulted from it cannot be the subject of judicial review, but "Sec. 4. No law shall be passed abridging the freedom of speech,
EDSA II is intra constitutional and the resignation of the sitting of expression, or of the press, or the right of the people peaceably
President that it caused and the succession of the Vice President to assemble and petition the government for redress of
as President are subject to judicial review. EDSA I presented a grievances."
political question; EDSA II involves legal questions. A brief
discourse on freedom of speech and of the freedom of assembly to The indispensability of the people's freedom of speech and of
petition the government for redress of grievance which are the assembly to democracy is now self-evident. The reasons are well
cutting edge of EDSA People Power II is not inappropriate. put by Emerson: first, freedom of expression is essential as a
means of assuring individual fulfillment; second, it is an essential
Freedom of speech and the right of assembly are treasured by process for advancing knowledge and discovering truth; third, it
Filipinos. Denial of these rights was one of the reasons of our is essential to provide for participation in decision-making by all
1898 revolution against Spain. Our national hero, Jose P. Rizal, members of society; and fourth, it is a method of achieving a more
raised the clarion call for the recognition of freedom of the press adaptable and hence, a more stable community of maintaining
of the Filipinos and included it as among "the reforms sine quibus the precarious balance between healthy cleavage and necessary
non."65 The Malolos Constitution, which is the work of the consensus."69 In this sense, freedom of speech and of assembly
revolutionary Congress in 1898, provided in its Bill of Rights that provides a framework in which the "conflict necessary to the
Filipinos shall not be deprived (1) of the right to freely express his progress of a society can take place without destroying the
ideas or opinions, orally or in writing, through the use of the society."70 In Hague v. Committee for Industrial Organization,71
press or other similar means; (2) of the right of association for this function of free speech and assembly was echoed in the
purposes of human life and which are not contrary to public amicus curiae filed by the Bill of Rights Committee of the
means; and (3) of the right to send petitions to the authorities, American Bar Association which emphasized that "the basis of
individually or collectively." These fundamental rights were the right of assembly is the substitution of the expression of

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CASES ON EVIDENCE

opinion and belief by talk rather than force; and this means talk The issue brings under the microscope the meaning of section 8,
for all and by all."72 In the relatively recent case of Subayco v. Article VII of the Constitution which provides:
Sandiganbayan,73 this Court similar stressed that "… it should
be clear even to those with intellectual deficits that when the "Sec. 8. In case of death, permanent disability, removal from office
sovereign people assemble to petition for redress of grievances, all or resignation of the President, the Vice President shall become
should listen. For in a democracy, it is the people who count; the President to serve the unexpired term. In case of death,
those who are deaf to their grievances are ciphers." permanent disability, removal from office, or resignation of both
the President and Vice President, the President of the Senate or,
Needless to state, the cases at bar pose legal and not political in case of his inability, the Speaker of the House of
questions. The principal issues for resolution require the proper Representatives, shall then act as President until the President or
interpretation of certain provisions in the 1987 Constitution, Vice President shall have been elected and qualified.
notably section 1 of Article II,74 and section 875 of Article VII,
and the allocation of governmental powers under section 1176 of x x x."
Article VII. The issues likewise call for a ruling on the scope of
presidential immunity from suit. They also involve the correct The issue then is whether the petitioner resigned as President or
calibration of the right of petitioner against prejudicial publicity. should be considered resigned as of January 20, 2001 when
As early as the 1803 case of Marbury v. Madison,77 the doctrine respondent took her oath as the 14th President of the Public.
has been laid down that "it is emphatically the province and duty Resignation is not a high level legal abstraction. It is a factual
of the judicial department to say what the law is . . ." Thus, question and its elements are beyond quibble: there must be an
respondent's in vocation of the doctrine of political question is but intent to resign and the intent must be coupled by acts of
a foray in the dark. relinquishment.78 The validity of a resignation is not government
by any formal requirement as to form. It can be oral. It can be
II written. It can be express. It can be implied. As long as the
resignation is clear, it must be given legal effect.
Whether or not the petitioner
Resigned as President In the cases at bar, the facts show that petitioner did not write
any formal letter of resignation before he evacuated Malacañang
We now slide to the second issue. None of the parties considered Palace in the afternoon of January 20, 2001 after the oath-taking
this issue as posing a political question. Indeed, it involves a legal of respondent Arroyo. Consequently, whether or not petitioner
question whose factual ingredient is determinable from the resigned has to be determined from his act and omissions before,
records of the case and by resort to judicial notice. Petitioner during and after January 20, 2001 or by the totality of prior,
denies he resigned as President or that he suffers from a contemporaneous and posterior facts and circumstantial evidence
permanent disability. Hence, he submits that the office of the bearing a material relevance on the issue.
President was not vacant when respondent Arroyo took her oath
as President. Using this totality test, we hold that petitioner resigned as
President.

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CASES ON EVIDENCE

To appreciate the public pressure that led to the resignation of to call for a snap presidential election and stressed he would not
the petitioner, it is important to follow the succession of events be a candidate. The proposal for a snap election for president in
after the exposẻ of Governor Singson. The Senate Blue Ribbon May where he would not be a candidate is an indicium that
Committee investigated. The more detailed revelations of petitioner had intended to give up the presidency even at that
petitioner's alleged misgovernance in the Blue Ribbon time. At 3:00 p.m., General Reyes joined the sea of EDSA
investigation spiked the hate against him. The Articles of demonstrators demanding the resignation of the petitioner and
Impeachment filed in the House of Representatives which initially dramatically announced the AFP's withdrawal of support from the
was given a near cipher chance of succeeding snowballed. In petitioner and their pledge of support to respondent Arroyo. The
express speed, it gained the signatures of 115 representatives or seismic shift of support left petitioner weak as a president.
more than 1/3 of the House of Representatives. Soon, petitioner's According to Secretary Angara, he asked Senator Pimentel to
powerful political allies began deserting him. Respondent Arroyo advise petitioner to consider the option of "dignified exit or
quit as Secretary of Social Welfare. Senate President Drilon and resignation."81 Petitioner did not disagree but listened intently.82
former Speaker Villar defected with 47 representatives in tow. The sky was falling fast on the petitioner. At 9:30 p.m., Senator
Then, his respected senior economic advisers resigned together Pimentel repeated to the petitioner the urgency of making a
with his Secretary of Trade and Industry. graceful and dignified exit. He gave the proposal a sweetener by
saying that petitioner would be allowed to go abroad with enough
As the political isolation of the petitioner worsened, the people's funds to support him and his family.83 Significantly, the
call for his resignation intensified. The call reached a new petitioner expressed no objection to the suggestion for a graceful
crescendo when the eleven (11) members of the impeachment and dignified exit but said he would never leave the country.84 At
tribunal refused to open the second envelope. It sent the people to 10:00 p.m., petitioner revealed to Secretary Angara, "Ed, Angie
paroxysms of outrage. Before the night of January 16 was over, (Reyes) guaranteed that I would have five days to a week in the
the EDSA Shrine was swarming with people crying for redress of palace."85 This is proof that petitioner had reconciled himself to
their grievance. Their number grew exponentially. Rallies and the reality that he had to resign. His mind was already concerned
demonstration quickly spread to the countryside like a brush fire. with the five-day grace period he could stay in the palace. It was a
matter of time.
As events approached January 20, we can have an authoritative
window on the state of mind of the petitioner. The window is The pressure continued piling up. By 11:00 p.m., former
provided in the "Final Days of Joseph Ejercito Estrada," the diary President Ramos called up Secretary Angara and requested, "Ed,
of Executive Secretary Angara serialized in the Philippine Daily magtulungan tayo para magkaroon tayo ng (let's cooperate to
Inquirer.79 The Angara Diary reveals that in the morning of ensure a) peaceful and orderly transfer of power."86 There was no
January 19, petitioner's loyal advisers were worried about the defiance to the request. Secretary Angara readily agreed. Again,
swelling of the crowd at EDSA, hence, they decided to create an we note that at this stage, the problem was already about a
ad hoc committee to handle it. Their worry would worsen. At 1:20 peaceful and orderly transfer of power. The resignation of the
p.m., petitioner pulled Secretary Angara into his small office at petitioner was implied.
the presidential residence and exclaimed: "Ed, seryoso na ito.
Kumalas na si Angelo (Reyes) (Ed, this is serious. Angelo has The first negotiation for a peaceful and orderly transfer of power
defected.)"80 An hour later or at 2:30 p.m., the petitioner decided immediately started at 12:20 a.m. of January 20, that fateful

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CASES ON EVIDENCE

Saturday. The negotiation was limited to three (3) points: (1) the 7:30 a.m. – Rene arrives with Bert Romulo and (Ms. Macapagal's
transition period of five days after the petitioner's resignation; (2) spokesperson) Rene Corona. For this round, I am accompanied by
the guarantee of the safety of the petitioner and his family, and Dondon Bagatsing and Macel.
(3) the agreement to open the second envelope to vindicate the
name of the petitioner.87 Again, we note that the resignation of Rene pulls out a document titled "Negotiating Points." It reads:
petitioner was not a disputed point. The petitioner cannot feign
ignorance of this fact. According to Secretary Angara, at 2:30 '1. The President shall sign a resignation document within the
a.m., he briefed the petitioner on the three points and the day, 20 January 2001, that will be effective on Wednesday, 24
following entry in the Angara Diary shows the reaction of the January 2001, on which day the Vice President will assume the
petitioner, viz: Presidency of the Republic of the Philippines.

"x x x 2. Beginning to day, 20 January 2001, the transition process for

the assumption of the new administration shall commence, and
I explain what happened during the first round of negotiations. persons designated by the Vice President to various positions and
The President immediately stresses that he just wants the five- offices of the government shall start their orientation activities in
day period promised by Reyes, as well as to open the second coordination with the incumbent officials concerned.
envelope to clear his name.
3. The Armed Forces of the Philippines and the Philippine
If the envelope is opened, on Monday, he says, he will leave by National Police shall function under the Vice President as
Monday. national military and police authority effective immediately.

The President says. "Pagod na pagod na ako. Ayoko na masyado 4. The Armed Forced of the Philippines, through its Chief of Staff,
nang masakit. Pagod na ako sa red tape, bureaucracy, intriga. (I shall guarantee the security of the President and his family as
am very tired. I don't want any more of this – it's too painful. I'm approved by the national military and police authority (Vice
tired of the red tape, the bureaucracy, the intrigue.) President).

I just want to clear my name, then I will go."88 5. It is to be noted that the Senate will open the second envelope
in connection with the alleged savings account of the President in
Again, this is high grade evidence that the petitioner has the Equitable PCI Bank in accordance with the rules of the
resigned. The intent to resign is clear when he said "x x x Ayoko Senate, pursuant to the request to the Senate President.
na masyado nang masakit." "Ayoko na" are words of resignation.
Our deal
The second round of negotiation resumed at 7:30 a.m. According
to the Angara Diary, the following happened: We bring out, too, our discussion draft which reads:

"Opposition's deal The undersigned parties, for and in behalf of their respective
principals, agree and undertake as follows:

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CASES ON EVIDENCE

Vice President Gloria Macapagal-Arroyo shall issue a public

'1. A transition will occur and take place on Wednesday, 24 statement in the form and tenor provided for in "Annex A"
January 2001, at which time President Joseph Ejercito Estrada heretofore attached to this agreement."89
will turn over the presidency to Vice President Gloria Macapagal-
Arroyo. The second round of negotiation cements the reading that the
petitioner has resigned. It will be noted that during this second
'2. In return, President Estrada and his families are guaranteed round of negotiation, the resignation of the petitioner was again
security and safety of their person and property throughout their treated as a given fact. The only unsettled points at that time
natural lifetimes. Likewise, President Estrada and his families are were the measures to be undertaken by the parties during and
guarantee freedom from persecution or retaliation from after the transition period.
government and the private sector throughout their natural
lifetimes. According to Secretary Angara, the draft agreement, which was
premised on the resignation of the petitioner was further refined.
This commitment shall be guaranteed by the Armed Forces of the It was then, signed by their side and he was ready to fax it to
Philippines (AFP) through the Chief of Staff, as approved by the General Reyes and Senator Pimentel to await the signature of the
national military and police authorities – Vice President United Opposition. However, the signing by the party of the
(Macapagal). respondent Arroyo was aborted by her oath-taking. The Angara
diary narrates the fateful events, viz;90
'3. Both parties shall endeavor to ensure that the Senate sitting
as an impeachment court will authorize the opening of the second "xxx
envelope in the impeachment trial as proof that the subject
savings account does not belong to President Estrada. 11:00 a.m. – Between General Reyes and myself, there is a firm
agreement on the five points to effect a peaceful transition. I can
'4. During the five-day transition period between 20 January hear the general clearing all these points with a group he is with.
2001 and 24 January 2001 (the 'Transition Period"), the incoming I hear voices in the background.
Cabinet members shall receive an appropriate briefing from the
outgoing Cabinet officials as part of the orientation program. Agreement.

During the Transition Period, the AFP and the Philippine National The agreement starts: 1. The President shall resign today, 20
Police (PNP) shall function Vice President (Macapagal) as national January 2001, which resignation shall be effective on 24 January
military and police authorities. 2001, on which day the Vice President will assume the presidency
of the Republic of the Philippines.
Both parties hereto agree that the AFP chief of staff and PNP
director general shall obtain all the necessary signatures as xxx
affixed to this agreement and insure faithful implementation and
observance thereof. The rest of the agreement follows:

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CASES ON EVIDENCE

2. The transition process for the assumption of the new

administration shall commence on 20 January 2001, wherein And General Reyes answers: ' Oo nga, I delete na natin, sir (yes,
persons designated by the Vice President to various government we're deleting the part).'
positions shall start orientation activities with incumbent officials.
Contrary to subsequent reports, I do not react and say that there
'3. The Armed Forces of the Philippines through its Chief of Staff, was a double cross.
shall guarantee the safety and security of the President and his
families throughout their natural lifetimes as approved by the But I immediately instruct Macel to delete the first provision on
national military and police authority – Vice President. resignation since this matter is already moot and academic.
Within moments, Macel erases the first provision and faxes the
'4. The AFP and the Philippine National Police (PNP) shall function documents, which have been signed by myself, Dondon and
under the Vice President as national military and police Macel, to Nene Pimentel and General Reyes.
authorities.
I direct Demaree Ravel to rush the original document to General
'5. Both parties request the impeachment court to open the Reyes for the signatures of the other side, as it is important that
second envelope in the impeachment trial, the contents of which the provisions on security, at least, should be respected.
shall be offered as proof that the subject savings account does not
belong to the President. I then advise the President that the Supreme Court has ruled that
Chief Justice Davide will administer the oath to Gloria at 12
The Vice President shall issue a public statement in the form and noon.
tenor provided for in Annex "B" heretofore attached to this
agreement. The President is too stunned for words:

11:20 a.m. – I am all set to fax General Reyes and Nene Pimentel Final meal
our agreement, signed by our side and awaiting the signature of
the United opposition. 12 noon – Gloria takes her oath as president of the Republic of
the Philippines.
And then it happens. General Reyes calls me to say that the
Supreme Court has decided that Gloria Macapagal-Arroyo is 12:20 p.m. – The PSG distributes firearms to some people inside
President and will be sworn in at 12 noon. the compound.

'Bakit hindi naman kayo nakahintay? Paano na ang agreement The president is having his final meal at the presidential
(why couldn't you wait? What about the agreement)?' I asked. Residence with the few friends and Cabinet members who have
gathered.
Reyes answered: 'Wala na, sir (it's over, sir).'
By this time, demonstrators have already broken down the first
I ask him: Di yung transition period, moot and academic na?' line of defense at Mendiola. Only the PSG is there to protect the

436
CASES ON EVIDENCE

Palace, since the police and military have already withdrawn their the oath-taking of the respondent as President of the Republic
support for the President. albeit with reservation about its legality; (2) he emphasized he
was leaving the Palace, the seat of the presidency, for the sake of
1 p.m. – The President's personal staff is rushing to pack as many peace and in order to begin the healing process of our nation. He
of the Estrada family's personal possessions as they can. did not say he was leaving the Palace due to any kind inability
and that he was going to re-assume the presidency as soon as the
During lunch, Ronnie Puno mentions that the president needs to disability disappears: (3) he expressed his gratitude to the people
release a final statement before leaving Malacañang. for the opportunity to serve them. Without doubt, he was
referring to the past opportunity given him to serve the people as
The statement reads: At twelve o'clock noon today, Vice President President (4) he assured that he will not shirk from any future
Gloria Macapagal-Arroyo took her oath as President of the challenge that may come ahead in the same service of our
Republic of the Philippines. While along with many other legal country. Petitioner's reference is to a future challenge after
minds of our country, I have strong and serious doubts about the occupying the office of the president which he has given up; and
legality and constitutionality of her proclamation as President, I (5) he called on his supporters to join him in the promotion of a
do not wish to be a factor that will prevent the restoration of unity constructive national spirit of reconciliation and solidarity.
and order in our civil society. Certainly, the national spirit of reconciliation and solidarity could
not be attained if he did not give up the presidency. The press
It is for this reason that I now leave Malacañang Palace, the seat release was petitioner's valedictory, his final act of farewell. His
of the presidency of this country, for the sake of peace and in presidency is now in the part tense.
order to begin the healing process of our nation. I leave the Palace
of our people with gratitude for the opportunities given to me for It is, however, urged that the petitioner did not resign but only
service to our people. I will not shirk from any future challenges took a temporary leave dated January 20, 2001 of the petitioner
that may come ahead in the same service of our country. sent to Senate President Pimentel and Speaker Fuentebella is
cited. Again, we refer to the said letter, viz:
I call on all my supporters and followers to join me in the
promotion of a constructive national spirit of reconciliation and "Sir.
solidarity.
By virtue of the provisions of Section II, Article VII of the
May the Almighty bless our country and our beloved people. Constitution, I am hereby transmitting this declaration that I am
unable to exercise the powers and duties of my office. By
MABUHAY!"' operation of law and the Constitution, the Vice President shall be
the Acting president.
It was curtain time for the petitioner.
(Sgd.) Joseph Ejercito Estrada"
In sum, we hold that the resignation of the petitioner cannot be
doubted. It was confirmed by his leaving Malacañang. In the To say the least, the above letter is wrapped in mystery.91 The
press release containing his final statement, (1) he acknowledged pleadings filed by the petitioner in the cases at bar did not

437
CASES ON EVIDENCE

discuss, may even intimate, the circumstances that led to its sponsorship speech, Senator Arturo Tolentino, the author of the
preparation. Neither did the counsel of the petitioner reveal to the bill, "reserved to propose during the period of amendments the
Court these circumstances during the oral argument. It strikes inclusion of a provision to the effect that no public official who is
the Court as strange that the letter, despite its legal value, was under prosecution for any act of graft or corruption, or is under
never referred to by the petitioner during the week-long crisis. To administrative investigation, shall be allowed to voluntarily resign
be sure, there was not the slightest hint of its existence when he or retire."92 During the period of amendments, the following
issued his final press release. It was all too easy for him to tell the provision was inserted as section 15:
Filipino people in his press release that he was temporarily
unable to govern and that he was leaving the reins of government "Sec. 15. Termination of office – No public official shall be allowed
to respondent Arroyo for the time bearing. Under any to resign or retire pending an investigation, criminal or
circumstance, however, the mysterious letter cannot negate the administrative, or pending a prosecution against him, for any
resignation of the petitioner. If it was prepared before the press offense under the Act or under the provisions of the Revised Penal
release of the petitioner clearly as a later act. If, however, it was Code on bribery.
prepared after the press released, still, it commands scant legal
significance. Petitioner's resignation from the presidency cannot The separation or cessation of a public official form office shall
be the subject of a changing caprice nor of a whimsical will not be a bar to his prosecution under this Act for an offense
especially if the resignation is the result of his reputation by the committed during his incumbency."93
people. There is another reason why this Court cannot given any
legal significance to petitioner's letter and this shall be discussed The bill was vetoed by then President Carlos P. Garcia who
in issue number III of this Decision. questioned the legality of the second paragraph of the provision
and insisted that the President's immunity should extend after
After petitioner contended that as a matter of fact he did not his tenure.
resign, he also argues that he could not resign as a matter of law.
He relies on section 12 of RA No. 3019, otherwise known as the Senate Bill No. 571, which was substantially similar Senate Bill
Anti-graft and Corrupt Practices Act, which allegedly prohibits his No. 293, was thereafter passed. Section 15 above became section
resignation, viz: 13 under the new bill, but the deliberations on this particular
provision mainly focused on the immunity of the President, which
"Sec. 12. No public officer shall be allowed to resign or retire was one of the reasons for the veto of the original bill. There was
pending an investigation, criminals or administrative, or pending hardly any debate on the prohibition against the resignation or
a prosecution against him, for any offense under this Act or retirement of a public official with pending criminal and
under the provisions of the Revised Penal Code on bribery." administrative cases against him. Be that as it may, the intent of
the law ought to be obvious. It is to prevent the act of resignation
A reading of the legislative history of RA No. 3019 will hardly or retirement from being used by a public official as a protective
provide any comfort to the petitioner. RA No. 3019 originated shield to stop the investigation of a pending criminal or
form Senate Bill No. 293. The original draft of the bill, when it administrative case against him and to prevent his prosecution
was submitted to the Senate, did not contain a provision similar under the Anti-Graft Law or prosecution for bribery under the
to section 12 of the law as it now stands. However, in his Revised Penal Code. To be sure, no person can be compelled to

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render service for that would be a violation of his constitutional III

right.94 A public official has the right not to serve if he really
wants to retire or resign. Nevertheless, if at the time he resigns or Whether or not the petitioner Is only temporarily unable to Act as
retires, a public official is facing administrative or criminal President.
investigation or prosecution, such resignation or retirement will
not cause the dismissal of the criminal or administrative We shall now tackle the contention of the petitioner that he is
proceedings against him. He cannot use his resignation or merely temporarily unable to perform the powers and duties of
retirement to avoid prosecution. the presidency, and hence is a President on leave. As aforestated,
the inability claim is contained in the January 20, 2001 letter of
There is another reason why petitioner's contention should be petitioner sent on the same day to Senate President Pimentel and
rejected. In the cases at bar, the records show that when Speaker Fuentebella.
petitioner resigned on January 20, 2001, the cases filed against
him before the Ombudsman were OMB Case Nos. 0-00-1629, 0- Petitioner postulates that respondent Arroyo as Vice President
00-1755, 0-00-1756, 0-00-1757 and 0-00-1758. While these has no power to adjudge the inability of the petitioner to
cases have been filed, the respondent Ombudsman refrained from discharge the powers and duties of the presidency. His significant
conducting the preliminary investigation of the petitioner for the submittal is that "Congress has the ultimate authority under the
reason that as the sitting President then, petitioner was immune Constitution to determine whether the President is incapable of
from suit. Technically, the said cases cannot be considered as performing his functions in the manner provided for in section 11
pending for the Ombudsman lacked jurisdiction to act on them. of article VII."95 This contention is the centerpiece of petitioner's
Section 12 of RA No. 3019 cannot therefore be invoked by the stance that he is a President on leave and respondent Arroyo is
petitioner for it contemplates of cases whose investigation or only an Acting President.
prosecution do not suffer from any insuperable legal obstacle like
the immunity from suit of a sitting President. An examination of section 11, Article VII is in order. It provides:

Petitioner contends that the impeachment proceeding is an "SEC. 11. Whenever the President transmits to the President of
administrative investigation that, under section 12 of RA 3019, the Senate and the Speaker of the House of Representatives his
bars him from resigning. We hold otherwise. The exact nature of written declaration that he is unable to discharge the powers and
an impeachment proceeding is debatable. But even assuming duties of his office, and until he transmits to them a written
arguendo that it is an administrative proceeding, it can not be declaration to the contrary, such powers and duties shall be
considered pending at the time petitioner resigned because the discharged by the Vice-President as Acting President.
process already broke down when a majority of the senator-
judges voted against the opening of the second envelope, the Whenever a majority of all the Members of the Cabinet transmit to
public and private prosecutors walked out, the public prosecutors the President of the Senate and to the Speaker of the House of
filed their Manifestation of Withdrawal of Appearance, and the Representatives their written declaration that the President is
proceedings were postponed indefinitely. There was, in effect, no unable to discharge the powers and duties of his office, the Vice-
impeachment case pending against petitioner when he resigned. President shall immediately assume the powers and duties of the
office as Acting President.

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CASES ON EVIDENCE

ADMINISTRATION AS A PARTNER IN THE ATTAINMENT OF THE

Thereafter, when the President transmits to the President of the NATION'S GOALS UNDER THE CONSTITUTION
Senate and to the Speaker of the House of Representatives his
written declaration that no inability exists, he shall reassume the WHEREAS, as a consequence of the people's loss of confidence on
powers and duties of his office. Meanwhile, should a majority of the ability of former President Joseph Ejercito Estrada to
all the Members of the Cabinet transmit within five days to the effectively govern, the Armed Forces of the Philippines, the
President of the Senate and to the Speaker of the House of Philippine National Police and majority of his cabinet had
Representatives their written declaration that the President is withdrawn support from him;
unable to discharge the powers and duties of his office, the
Congress shall decide the issue. For that purpose, the Congress WHEREAS, upon authority of an en banc resolution of the
shall convene, if it is not in session, within forty-eight hours, in Supreme Court, Vice President Gloria Macapagal-Arroyo was
accordance with its rules and without need of call. sworn in as President of the Philippines on 20 January 2001
before Chief Justice Hilario G. Davide, Jr.;
If the Congress, within ten days after receipt of the last written
declaration, or, if not in session, within twelve days after it is WHEREAS, immediately thereafter, members of the international
required to assemble, determines by a two-thirds vote of both community had extended their recognition to Her Excellency,
Houses, voting separately, that the President is unable to Gloria Macapagal-Arroyo as President of the Republic of the
discharge the powers and duties of his office, the Vice-President Philippines;
shall act as President; otherwise, the President shall continue
exercising the powers and duties of his office." WHEREAS, Her Excellency, President Gloria Macapagal-Arroyo
has espoused a policy of national healing and reconciliation with
That is the law. Now, the operative facts: justice for the purpose of national unity and development;

Petitioner, on January 20, 2001, sent the above letter claiming WHEREAS, it is axiomatic that the obligations of the government
inability to the Senate President and Speaker of the House; cannot be achieved if it is divided, thus by reason of the
Unaware of the letter, respondent Arroyo took her oath of office as constitutional duty of the House of Representatives as an
President on January 20, 2001 at about 12:30 p.m.; institution and that of the individual members thereof of fealty to
Despite receipt of the letter, the House of Representatives passed the supreme will of the people, the House of Representatives must
on January 24, 2001 House Resolution No. 175;96 ensure to the people a stable, continuing government and
On the same date, the House of the Representatives passed therefore must remove all obstacles to the attainment thereof;
House Resolution No. 17697 which states:
WHEREAS, it is a concomitant duty of the House of
"RESOLUTION EXPRESSING THE SUPPORT OF THE HOUSE OF Representatives to exert all efforts to unify the nation, to eliminate
REPRESENTATIVES TO THE ASSUMPTION INTO OFFICE BY fractious tension, to heal social and political wounds, and to be
VICE PRESIDENT GLORIA MACAPAGAL-ARROYO AS PRESIDENT an instrument of national reconciliation and solidarity as it is a
OF THE REPUBLIC OF THE PHILIPPINES, EXTENDING ITS direct representative of the various segments of the whole nation;
CONGRATULATIONS AND EXPRESSING ITS SUPPORT FOR HER

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WHEREAS, without surrending its independence, it is vital for the WHEREAS, pursuant to Section 9, Article VII of the Constitution,
attainment of all the foregoing, for the House of Representatives the President in the event of such vacancy shall nominate a Vice
to extend its support and collaboration to the administration of President from among the members of the Senate and the House
Her Excellency, President Gloria Macapagal-Arroyo, and to be a of Representatives who shall assume office upon confirmation by
constructive partner in nation-building, the national interest a majority vote of all members of both Houses voting separately;
demanding no less: Now, therefore, be it
WHEREAS, Her Excellency, President Gloria Macapagal-Arroyo
Resolved by the House of Representatives, To express its support has nominated Senate Minority Leader Teofisto T. Guingona Jr.,
to the assumption into office by Vice President Gloria Macapagal- to the position of Vice President of the Republic of the Philippines;
Arroyo as President of the Republic of the Philippines, to extend
its congratulations and to express its support for her WHEREAS, Senator Teofisto T. Guingona Jr., is a public servant
administration as a partner in the attainment of the Nation's endowed with integrity, competence and courage; who has served
goals under the Constitution. the Filipino people with dedicated responsibility and patriotism;

Adopted, WHEREAS, Senator Teofisto T. Guingona, Jr. possesses sterling

qualities of true statesmanship, having served the government in
(Sgd.) FELICIANO BELMONTE JR. various capacities, among others, as Delegate to the
Speaker Constitutional Convention, Chairman of the Commission on
Audit, Executive Secretary, Secretary of Justice, Senator of the
This Resolution was adopted by the House of Representatives on Philippines – qualities which merit his nomination to the position
January 24, 2001. of Vice President of the Republic: Now, therefore, be it

(Sgd.) ROBERTO P. NAZARENO Resolved as it is hereby resolved by the House of Representatives,

Secretary General" That the House of Representatives confirms the nomination of
Senator Teofisto T. Guingona, Jr. as the Vice President of the
On February 7, 2001, the House of the Representatives passed Republic of the Philippines.
House Resolution No. 17898 which states:
Adopted,
"RESOLUTION CONFIRMING PRESIDENT GLORIA MACAPAGAL-
ARROYO'S NOMINATION OF SENATOR TEOFISTO T. GUINGONA, (Sgd.) FELICIANO BELMONTE JR.
JR. AS VICE PRESIDENT OF THE REPUBLIC OF THE Speaker
PHILIPPINES
This Resolution was adopted by the House of Representatives on
WHEREAS, there is a vacancy in the Office of the Vice President February 7, 2001.
due to the assumption to the Presidency of Vice President Gloria
Macapagal-Arroyo; (Sgd.) ROBERTO P. NAZARENO
Secretary General"

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CASES ON EVIDENCE

(4) Also, despite receipt of petitioner's letter claiming inability, WHEREAS, Her Excellency, President Gloria Macapagal-Arroyo
some twelve (12) members of the Senate signed the following: has nominated Senate Minority Leader Teofisto T. Guingona, Jr.
to the position of Vice President of the Republic of the Philippines;
"RESOLUTION
WHEREAS, Sen. Teofisto T. Guingona, Jr. is a public servant
WHEREAS, the recent transition in government offers the nation endowed with integrity, competence and courage; who has served
an opportunity for meaningful change and challenge; the Filipino people with dedicated responsibility and patriotism;

WHEREAS, to attain desired changes and overcome awesome WHEREAS, Sen. Teofisto T. Guingona, Jr. possesses sterling
challenges the nation needs unity of purpose and resolve cohesive qualities of true statemanship, having served the government in
resolute (sic) will; various capacities, among others, as Delegate to the
Constitutional Convention, Chairman of the Commission on
WHEREAS, the Senate of the Philippines has been the forum for Audit, Executive Secretary, Secretary of Justice, Senator of the
vital legislative measures in unity despite diversities in land - which qualities merit his nomination to the position of Vice
perspectives; President of the Republic: Now, therefore, be it

WHEREFORE, we recognize and express support to the new Resolved, as it is hereby resolved, That the Senate confirm the
government of President Gloria Macapagal-Arroyo and resolve to nomination of Sen. Teofisto T. Guingona, Jr. as Vice President of
discharge and overcome the nation's challenges." 99 the Republic of the Philippines.

On February 7, the Senate also passed Senate Resolution No. Adopted,

82100 which states:
(Sgd.) AQUILINO Q. PIMENTEL JR.
"RESOLUTION CONFIRMING PRESIDENT GLORIA MACAPAGAL President of the Senate
ARROYO'S NOMINATION OF SEM. TEOFISTO T. GUINGONA, JR.
AS VICE PRESIDENT OF THE REPUBLIC OF THE PHILIPPINES This Resolution was adopted by the Senate on February 7, 2001.

WHEREAS, there is vacancy in the Office of the Vice President (Sgd.) LUTGARDO B. BARBO
due to the assumption to the Presidency of Vice President Gloria Secretary of the Senate"
Macapagal-Arroyo;
On the same date, February 7, the Senate likewise passed Senate
WHEREAS, pursuant to Section 9 Article VII of the Constitution, Resolution No. 83101 which states:
the President in the event of such vacancy shall nominate a Vice
President from among the members of the Senate and the House "RESOLUTION RECOGNIZING THAT THE IMPEACHMENT
of Representatives who shall assume office upon confirmation by COURT IS FUNCTUS OFFICIO
a majority vote of all members of both Houses voting separately;

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CASES ON EVIDENCE

Resolved, as it is hereby resolved. That the Senate recognize that

the Impeachment Court is functus officio and has been (7) Despite the lapse of time and still without any functioning
terminated. Cabinet, without any recognition from any sector of government,
and without any support from the Armed Forces of the
Resolved, further, That the Journals of the Impeachment Court Philippines and the Philippine National Police, the petitioner
on Monday, January 15, Tuesday, January 16 and Wednesday, continues to claim that his inability to govern is only momentary.
January 17, 2001 be considered approved.
What leaps to the eye from these irrefutable facts is that both
Resolved, further, That the records of the Impeachment Court houses of Congress have recognized respondent Arroyo as the
including the "second envelope" be transferred to the Archives of President. Implicitly clear in that recognition is the premise that
the Senate for proper safekeeping and preservation in accordance the inability of petitioner Estrada. Is no longer temporary.
with the Rules of the Senate. Disposition and retrieval thereof Congress has clearly rejected petitioner's claim of inability.
shall be made only upon written approval of the Senate president.
The question is whether this Court has jurisdiction to review the
Resolved, finally. That all parties concerned be furnished copies of claim of temporary inability of petitioner Estrada and thereafter
this Resolution. revise the decision of both Houses of Congress recognizing
respondent Arroyo as president of the Philippines. Following
Adopted, Tañada v. Cuenco,102 we hold that this Court cannot exercise its
judicial power or this is an issue "in regard to which full
(Sgd.) AQUILINO Q. PIMENTEL, JR. discretionary authority has been delegated to the Legislative xxx
President of the Senate branch of the government." Or to use the language in Baker vs.
Carr,103 there is a "textually demonstrable or a lack of judicially
This Resolution was adopted by the Senate on February 7, 2001. discoverable and manageable standards for resolving it." Clearly,
the Court cannot pass upon petitioner's claim of inability to
(Sgd.) LUTGARDO B. BARBO discharge the power and duties of the presidency. The question is
Secretary of the Senate" political in nature and addressed solely to Congress by
constitutional fiat. It is a political issue, which cannot be decided
(5) On February 8, the Senate also passed Resolution No. 84 by this Court without transgressing the principle of separation of
"certifying to the existence of vacancy in the Senate and calling on powers.
the COMELEC to fill up such vacancy through election to be held
simultaneously with the regular election on May 14, 2001 and the In fine, even if the petitioner can prove that he did not resign,
Senatorial candidate garnering the thirteenth (13th) highest still, he cannot successfully claim that he is a President on leave
number of votes shall serve only for the unexpired term of on the ground that he is merely unable to govern temporarily.
Senator Teofisto T. Guingona, Jr.' That claim has been laid to rest by Congress and the decision
that respondent Arroyo is the de jure, president made by a co-
(6) Both houses of Congress started sending bills to be signed into equal branch of government cannot be reviewed by this Court.
law by respondent Arroyo as President.

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CASES ON EVIDENCE

IV performance of his official duties. The judiciary has full power to,
and will, when the mater is properly presented to it and the
Whether or not the petitioner enjoys immunity from suit. occasion justly warrants it, declare an act of the Governor-
General illegal and void and place as nearly as possible in status
Assuming he enjoys immunity, the extent of the immunity quo any person who has been deprived his liberty or his property
by such act. This remedy is assured to every person, however
Petitioner Estrada makes two submissions: first, the cases filed humble or of whatever country, when his personal or property
against him before the respondent Ombudsman should be rights have been invaded, even by the highest authority of the
prohibited because he has not been convicted in the state. The thing which the judiciary can not do is mulct the
impeachment proceedings against him; and second, he enjoys Governor-General personally in damages which result from the
immunity from all kinds of suit, whether criminal or civil. performance of his official duty, any more than it can a member
of the Philippine Commission of the Philippine Assembly. Public
Before resolving petitioner's contentions, a revisit of our legal policy forbids it.
history executive immunity will be most enlightening. The
doctrine of executive immunity in this jurisdiction emerged as a Neither does this principle of nonliability mean that the chief
case law. In the 1910 case of Forbes, etc. vs. Chuoco Tiaco and executive may not be personally sued at all in relation to acts
Crosfield,104 the respondent Tiaco, a Chinese citizen, sued which he claims to perform as such official. On the contrary, it
petitioner W. Cameron Forbes, Governor-General of the Philippine clearly appears from the discussion heretofore had, particularly
Islands. J.E. Harding and C.R. Trowbridge, Chief of Police and that portion which touched the liability of judges and drew an
Chief of the Secret Service of the City of Manila, respectively, for analogy between such liability and that of the Governor-General,
damages for allegedly conspiring to deport him to China. In that the latter is liable when he acts in a case so plainly outside of
granting a writ of prohibition, this Court, speaking thru Mr. his power and authority that he can not be said to have exercised
Justice Johnson, held: discretion in determining whether or not he had the right to act.
What is held here is that he will be protected from personal
" The principle of nonliability, as herein enunciated, does not liability for damages not only when he acts within his authority,
mean that the judiciary has no authority to touch the acts of the but also when he is without authority, provided he actually used
Governor-General; that he may, under cover of his office, do what discretion and judgement, that is, the judicial faculty, in
he will, unimpeded and unrestrained. Such a construction would determining whether he had authority to act or not. In other
mean that tyranny, under the guise of the execution of the law, words, in determining the question of his authority. If he decide
could walk defiantly abroad, destroying rights of person and of wrongly, he is still protected provided the question of his
property, wholly free from interference of courts or legislatures. authority was one over which two men, reasonably qualified for
This does not mean, either that a person injured by the executive that position, might honestly differ; but he s not protected if the
authority by an act unjustifiable under the law has n remedy, but lack of authority to act is so plain that two such men could not
must submit in silence. On the contrary, it means, simply, that honestly differ over its determination. In such case, be acts, not
the governors-general, like the judges if the courts and the as Governor-General but as a private individual, and as such
members of the Legislature, may not be personally mulcted in must answer for the consequences of his act."
civil damages for the consequences of an act executed in the

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CASES ON EVIDENCE

Mr. Justice Johnson underscored the consequences if the Chief President outside the scope of official duties. And third, we
Executive was not granted immunity from suit, viz "xxx. Action broadened its coverage so as to include not only the President but
upon important matters of state delayed; the time and substance also other persons, be they government officials or private
of the chief executive spent in wrangling litigation; disrespect individuals, who acted upon orders of the President. It can be
engendered for the person of one of the highest officials of the said that at that point most of us were suffering from AIDS (or
state and for the office he occupies; a tendency to unrest and absolute immunity defense syndrome)."
disorder resulting in a way, in distrust as to the integrity of
government itself."105 The Opposition in the then Batasan Pambansa sought the repeal
of this Marcosian concept of executive immunity in the 1973
Our 1935 Constitution took effect but it did not contain any Constitution. The move was led by them Member of Parliament,
specific provision on executive immunity. Then came the tumult now Secretary of Finance, Alberto Romulo, who argued that the
of the martial law years under the late President Ferdinand E. after incumbency immunity granted to President Marcos violated
Marcos and the 1973 Constitution was born. In 1981, it was the principle that a public office is a public trust. He denounced
amended and one of the amendments involved executive the immunity as a return to the anachronism "the king can do no
immunity. Section 17, Article VII stated: wrong."107 The effort failed.

"The President shall be immune from suit during his tenure. The 1973 Constitution ceased to exist when President Marcos was
Thereafter, no suit whatsoever shall lie for official acts done by ousted from office by the People Power revolution in 1986. When
him or by others pursuant to his specific orders during his the 1987 Constitution was crafted, its framers did not reenact the
tenure. executive immunity provision of the 1973 Constitution. The
following explanation was given by delegate J. Bernas vis:108
The immunities herein provided shall apply to the incumbent
President referred to in Article XVII of this Constitution. "Mr. Suarez. Thank you.

In his second Vicente G. Sinco professional Chair lecture entitled, The last question is with reference to the Committee's omitting in
"Presidential Immunity and All The King's Men: The Law of the draft proposal the immunity provision for the President. I
Privilege As a Defense To Actions For Damages,"106 petitioner's agree with Commissioner Nolledo that the Committee did very
learned counsel, former Dean of the UP College of Law, Atty. well in striking out second sentence, at the very least, of the
Pacificao Agabin, brightened the modifications effected by this original provision on immunity from suit under the 1973
constitutional amendment on the existing law on executive Constitution. But would the Committee members not agree to a
privilege. To quote his disquisition: restoration of at least the first sentence that the President shall
be immune from suit during his tenure, considering that if we do
"In the Philippines, though, we sought to do the Americans one not provide him that kind of an immunity, he might be spending
better by enlarging and fortifying the absolute immunity concept. all his time facing litigation's, as the President-in-exile in Hawaii
First, we extended it to shield the President not only form civil is now facing litigation's almost daily?
claims but also from criminal cases and other claims. Second, we
enlarged its scope so that it would cover even acts of the

445
CASES ON EVIDENCE

Fr. Bernas. The reason for the omission is that we consider it

understood in present jurisprudence that during his tenure he is Mr. Aquino. On another point, if an impeachment proceeding has
immune from suit. been filed against the President, for example, and the President
resigns before judgement of conviction has been rendered by the
Mr. Suarez. So there is no need to express it here. impeachment court or by the body, how does it affect the
impeachment proceeding? Will it be necessarily dropped?
Fr. Bernas. There is no need. It was that way before. The only
innovation made by the 1973 Constitution was to make that Mr. Romulo. If we decide the purpose of impeachment to remove
explicit and to add other things. one from office, then his resignation would render the case moot
and academic. However, as the provision says, the criminal and
Mr. Suarez. On that understanding, I will not press for any more civil aspects of it may continue in the ordinary courts."
query, Madam President.
This is in accord with our ruling In Re: Saturnino Bermudez111
I think the Commissioner for the clarifications." that 'incumbent Presidents are immune from suit or from being
brought to court during the period of their incumbency and
We shall now rule on the contentions of petitioner in the light of tenure" but not beyond. Considering the peculiar circumstance
this history. We reject his argument that he cannot be prosecuted that the impeachment process against the petitioner has been
for the reason that he must first be convicted in the impeachment aborted and thereafter he lost the presidency, petitioner Estrada
proceedings. The impeachment trial of petitioner Estrada was cannot demand as a condition sine qua non to his criminal
aborted by the walkout of the prosecutors and by the events that prosecution before the Ombudsman that he be convicted in the
led to his loss of the presidency. Indeed, on February 7, 2001, the impeachment proceedings. His reliance on the case of Lecaroz vs.
Senate passed Senate Resolution No. 83 "Recognizing that the Sandiganbayan112 and related cases113 are inapropos for they
Impeachment Court is Functus Officio."109 Since, the have a different factual milieu.
Impeachment Court is now functus officio, it is untenable for
petitioner to demand that he should first be impeached and then We now come to the scope of immunity that can be claimed by
convicted before he can be prosecuted. The plea if granted, would petitioner as a non-sitting President. The cases filed against
put a perpetual bar against his prosecution. Such a submission petitioner Estrada are criminal in character. They involve
has nothing to commend itself for it will place him in a better plunder, bribery and graft and corruption. By no stretch of the
situation than a non-sitting President who has not been subjected imagination can these crimes, especially plunder which carries
to impeachment proceedings and yet can be the object of a the death penalty, be covered by the alleged mantle of immunity
criminal prosecution. To be sure, the debates in the of a non-sitting president. Petitioner cannot cite any decision of
Constitutional Commission make it clear that when impeachment this Court licensing the President to commit criminal acts and
proceedings have become moot due to the resignation of the wrapping him with post-tenure immunity from liability. It will be
President, the proper criminal and civil cases may already be filed anomalous to hold that immunity is an inoculation from liability
against him, viz:110 for unlawful acts and conditions. The rule is that unlawful acts of
public officials are not acts of the State and the officer who acts
"xxx

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CASES ON EVIDENCE

illegally is not acting as such but stands in the same footing as shall maintain honesty and integrity in the public service and
any trespasser.114 take positive and effective measures against graft and
corruptio."119 it ordained that "public officers and employees
Indeed, critical reading of current literature on executive must at all times be accountable to the people, serve them with
immunity will reveal a judicial disinclination to expand the utmost responsibility, integrity, loyalty, and efficiency act with
privilege especially when it impedes the search for truth or patriotism and justice, and lead modest lives."120 It set the rule
impairs the vindication of a right. In the 1974 case of US v. that 'the right of the State to recover properties unlawfully
Nixon,115 US President Richard Nixon, a sitting President, was acquired by public officials or employees, from them or from their
subpoenaed to produce certain recordings and documents nominees or transferees, shall not be barred by prescription,
relating to his conversations with aids and advisers. Seven latches or estoppel."121 It maintained the Sandiganbayan as an
advisers of President Nixon's associates were facing charges of anti-graft court.122 It created the office of the Ombudsman and
conspiracy to obstruct Justice and other offenses, which were endowed it with enormous powers, among which is to "investigate
committed in a burglary of the Democratic National Headquarters on its own, or on complaint by any person, any act or omission of
in Washington's Watergate Hotel during the 972 presidential any public official, employee, office or agency, when such act or
campaign. President Nixon himself was named an unindicted co- omission appears to be illegal, unjust improper or inefficient."123
conspirator. President Nixon moved to quash the subpoena on the The Office of the Ombudsman was also given fiscal autonomy.124
ground, among others, that the President was not subject to These constitutional policies will be devalued if we sustain
judicial process and that he should first be impeached and petitioner's claim that a non-sitting president enjoys immunity
removed from office before he could be made amenable to judicial from suit for criminal acts committed during his incumbency.
proceedings. The claim was rejected by the US Supreme Court. It
concluded that "when the ground for asserting privilege as to V
subpoenaed materials sought for use in a criminal trial is based
only on the generalized interest in confidentiality, it cannot Whether or not the prosecution of petitioner
prevail over the fundamental demands of due process of law in
the fair administration of criminal justice." In the 1982 case of Estrada should be enjoined due to prejudicial publicity
Nixon v. Fitzgerald,116 the US Supreme Court further held that
the immunity of the president from civil damages covers only Petitioner also contends that the respondent Ombudsman should
"official acts." Recently, the US Supreme Court had the occasion be stopped from conducting the investigation of the cases filed
to reiterate this doctrine in the case of Clinton v. Jones117 where against him due to the barrage of prejudicial publicity on his
it held that the US President's immunity from suits for money guilt. He submits that the respondent Ombudsman has developed
damages arising out of their official acts is inapplicable to bias and is all set file the criminal cases violation of his right to
unofficial conduct. due process.

There are more reasons not to be sympathetic to appeals to There are two (2) principal legal and philosophical schools of
stretch the scope of executive immunity in our jurisdiction. One thought on how to deal with the rain of unrestrained publicity
of the great themes of the 1987 Constitution is that a public office during the investigation and trial of high profile cases.125 The
is a public trust.118 It declared as a state policy that "the State British approach the problem with the presumption that publicity

447
CASES ON EVIDENCE

will prejudice a jury. Thus, English courts readily stay and stop part of our everyday menu of the facts and fictions of life. For
criminal trials when the right of an accused to fair trial suffers a another, our idea of a fair and impartial judge is not that of a
threat.126 The American approach is different. US courts assume hermit who is out of touch with the world. We have not installed
a skeptical approach about the potential effect of pervasive the jury system whose members are overly protected from
publicity on the right of an accused to a fair trial. They have publicity lest they lose there impartially. xxx xxx xxx. Our judges
developed different strains of tests to resolve this issue, i.e., are learned in the law and trained to disregard off-court evidence
substantial; probability of irreparable harm, strong likelihood, and on-camera performances of parties to litigation. Their mere
clear and present danger, etc. exposure to publications and publicity stunts does not per se
fatally infect their impartiality.
This is not the first time the issue of trial by publicity has been
raised in this Court to stop the trials or annul convictions in high At best, appellant can only conjure possibility of prejudice on the
profile criminal cases.127 In People vs. Teehankee, Jr.,128 later part of the trial judge due to the barrage of publicity that
reiterated in the case of Larranaga vs. court of Appeals, et al.,129 characterized the investigation and trial of the case. In Martelino,
we laid down the doctrine that: et al. v. Alejandro, et al., we rejected this standard of possibility of
prejudice and adopted the test of actual prejudice as we ruled
"We cannot sustain appellant's claim that he was denied the right that to warrant a finding of prejudicial publicity, there must be
to impartial trial due to prejudicial publicity. It is true that the allegation and proof that the judges have been unduly influenced,
print and broadcast media gave the case at bar pervasive not simply that they might be, by the barrage of publicity. In the
publicity, just like all high profile and high stake criminal trials. case at a bar, the records do not show that the trial judge
Then and now, we rule that the right of an accused to a fair trial developed actual bias against appellants as a consequence of the
is not incompatible to a free press. To be sure, responsible extensive media coverage of the pre-trial and trial of his case. The
reporting enhances accused's right to a fair trial for, as well totality of circumstances of the case does not prove that the trial
pointed out, a responsible press has always been regarded as the judge acquired a fixed opinion as a result of prejudicial publicity,
criminal field xxx. The press does not simply publish information which is incapable of change even by evidence presented during
about trials but guards against the miscarriage of justice by the trial. Appellant has the burden to prove this actual bias and
subjecting the police, prosecutors, and judicial processes to he has not discharged the burden.'
extensive public scrutiny and criticism.
We expounded further on this doctrine in the subsequent case of
Pervasive publicity is not per se prejudicial to the right of an Webb vs. Hon. Raul de Leon, etc.130 and its companion cases,
accused to fair trial. The mere fact that the trial of appellant was viz:
given a day-to-day, gavel-to-gavel coverage does not by itself prove
that the publicity so permeated the mind of the trial judge and "Again petitioners raise the effect of prejudicial publicity on their
impaired his impartiality. For one, it is impossible to seal the right to due process while undergoing preliminary investigation.
minds of members of the bench from pre-trial and other off-court We find no procedural impediment to its early invocation
publicity of sensational criminal cases. The state of the art of our considering the substantial risk to their liberty while undergoing
communication system brings news as they happen straight to a preliminary investigation.
our breakfast tables and right to our bedrooms. These news form

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xxx reasons as valid today as in centuries past, it must be concluded

that a presumption of openness inheres in the very nature of a
The democratic settings, media coverage of trials of sensational criminal trial under this Nation's system of justice, Cf., e,g.,
cases cannot be avoided and oftentimes, its excessiveness has Levine v. United States, 362 US 610, 4 L Ed 2d 989, 80 S Ct
been aggravated by kinetic developments in the 1038.
telecommunications industry. For sure, few cases can match the The freedoms of speech. Press and assembly, expressly
high volume and high velocity of publicity that attended the guaranteed by the First Amendment, share a common core
preliminary investigation of the case at bar. Our daily diet of facts purpose of assuring freedom of communication on matters
and fiction about the case continues unabated even today. relating to the functioning of government. In guaranteeing
Commentators still bombard the public with views not too many freedom such as those of speech and press, the First Amendment
of which are sober and sublime. Indeed, even the principal actors can be read as protecting the right of everyone to attend trials so
in the case – the NBI, the respondents, their lawyers and their as give meaning to those explicit guarantees; the First
sympathizers have participated in this media blitz. The possibility Amendment right to receive information and ideas means, in the
of media abuses and their threat to a fair trial notwithstanding, context of trials, that the guarantees of speech and press,
criminal trials cannot be completely closed to the press and standing alone, prohibit government from summarily closing
public. In the seminal case of Richmond Newspapers, Inc. v. courtroom doors which had long been open to the public at the
Virginia, it was time the First Amendment was adopted. Moreover, the right of
assembly is also relevant, having been regarded not only as an
xxx independent right but also as a catalyst to augment the free
exercise of the other First Amendment rights with which the
The historical evidence of the evolution of the criminal trial in draftsmen deliberately linked it. A trial courtroom is a public
Anglo-American justice demonstrates conclusively that at the place where the people generally and representatives of the media
time this Nation's organic laws were adopted, criminal trials both have a right to be present, and where their presence historically
here and in England had long been presumptively open, thus has been thought to enhance the integrity and quality of what
giving assurance that the proceedings were conducted fairly to all takes place.
concerned and discouraging perjury, the misconduct of Even though the Constitution contains no provision which be its
participants, or decisions based on secret bias or partiality. In terms guarantees to the public the right to attend criminal trials,
addition, the significant community therapeutic value of public various fundamental rights, not expressly guaranteed, have been
trials was recognized when a shocking crime occurs a community recognized as indispensable to the enjoyment of enumerated
reaction of outrage and public protest often follows, and rights. The right to attend criminal trial is implicit in the
thereafter the open processes of justice serve an important guarantees of the First Amendment: without the freedom to
prophylactic purpose, providing an outlet for community concern, attend such trials, which people have exercised for centuries,
hostility and emotion. To work effectively, it is important that important aspects of freedom of speech and of the press be
society's criminal process satisfy the appearance of justice,' Offutt eviscerated.
v. United States, 348 US 11, 14, 99 L ED 11, 75 S Ct 11, which Be that as it may, we recognize that pervasive and prejudicial
can best be provided by allowing people to observe such process. publicity under certain circumstances can deprive an accused of
From this unbroken, uncontradicted history, supported by his due process right to fair trial. Thus, in Martelino, et al. vs.

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CASES ON EVIDENCE

Alejandro, et al., we held that to warrant a finding of prejudicial panel has yet to come out with its findings and the Court cannot
publicity there must be allegation and proof that the judges have second guess whether its recommendation will be unfavorable to
been unduly influenced, not simply that they might be, by the the petitioner.1âwphi1.nêt
barrage of publicity. In the case at bar, we find nothing in the
records that will prove that the tone and content of the publicity The records show that petitioner has instead charged respondent
that attended the investigation of petitioners fatally infected the Ombudsman himself with bias. To quote petitioner's submission,
fairness and impartiality of the DOJ Panel. Petitioners cannot just the respondent Ombudsman "has been influenced by the barrage
rely on the subliminal effects of publicity on the sense of fairness of slanted news reports, and he has buckled to the threats and
of the DOJ Panel, for these are basically unbeknown and beyond pressures directed at him by the mobs."132 News reports have
knowing. To be sure, the DOJ Panel is composed of an Assistant also been quoted to establish that the respondent Ombudsman
Chief State Prosecutor and Senior State Prosecutors. Their long has already prejudged the cases of the petitioner133 and it is
experience in criminal investigation is a factor to consider in postulated that the prosecutors investigating the petitioner will be
determining whether they can easily be blinded by the klieg lights influenced by this bias of their superior.
of publicity. Indeed, their 26-page Resolution carries no
indubitable indicia of bias for it does not appear that they Again, we hold that the evidence proffered by the petitioner is
considered any extra-record evidence except evidence properly insubstantial. The accuracy of the news reports referred to by the
adduced by the parties. The length of time the investigation was petitioner cannot be the subject of judicial notice by this Court
conducted despite its summary nature and the generosity with especially in light of the denials of the respondent Ombudsman as
which they accommodated the discovery motions of petitioners to his alleged prejudice and the presumption of good faith and
speak well of their fairness. At no instance, we note, did regularity in the performance of official duty to which he is
petitioners seek the disqualification of any member of the DOJ entitled. Nor can we adopt the theory of derivative prejudice of
Panel on the ground of bias resulting from their bombardment of petitioner, i.e., that the prejudice of respondent Ombudsman
prejudicial publicity." (emphasis supplied) flows to his subordinates. In truth, our Revised Rules of Criminal
Procedure, give investigation prosecutors the independence to
Applying the above ruling, we hold that there is not enough make their own findings and recommendations albeit they are
evidence to warrant this Court to enjoin the preliminary reviewable by their superiors.134 They can be reversed but they
investigation of the petitioner by the respondent Ombudsman. can not be compelled cases which they believe deserve dismissal.
Petitioner needs to offer more than hostile headlines to discharge In other words, investigating prosecutors should not be treated
his burden of proof.131 He needs to show more weighty social like unthinking slot machines. Moreover, if the respondent
science evidence to successfully prove the impaired capacity of a Ombudsman resolves to file the cases against the petitioner and
judge to render a bias-free decision. Well to note, the cases the latter believes that the findings of probable cause against him
against the petitioner are still undergoing preliminary is the result of bias, he still has the remedy of assailing it before
investigation by a special panel of prosecutors in the office of the the proper court.
respondent Ombudsman. No allegation whatsoever has been
made by the petitioner that the minds of the members of this VI.
special panel have already been infected by bias because of the
pervasive prejudicial publicity against him. Indeed, the special Epilogue

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A word of caution to the "hooting throng." The cases against the

petitioner will now acquire a different dimension and then move
to a new stage - - - the Office of the Ombudsman. Predictably, the
call from the majority for instant justice will hit a higher decibel
while the gnashing of teeth of the minority will be more
threatening. It is the sacred duty of the respondent Ombudsman
to balance the right of the State to prosecute the guilty and the
right of an accused to a fair investigation and trial which has
been categorized as the "most fundamental of all freedoms."135
To be sure, the duty of a prosecutor is more to do justice and less
to prosecute. His is the obligation to insure that the preliminary
investigation of the petitioner shall have a circus-free atmosphere.
He has to provide the restraint against what Lord Bryce calls "the
impatient vehemence of the majority." Rights in a democracy are
not decided by the mob whose judgment is dictated by rage and
not by reason. Nor are rights necessarily resolved by the power of
number for in a democracy, the dogmatism of the majority is not
and should never be the definition of the rule of law. If democracy
has proved to be the best form of government, it is because it has
respected the right of the minority to convince the majority that it
is wrong. Tolerance of multiformity of thoughts, however offensive
they may be, is the key to man's progress from the cave to
civilization. Let us not throw away that key just to pander to some
people's prejudice.

IN VIEW WHEREOF, the petitions of Joseph Ejercito Estrada

challenging the respondent Gloria Macapagal-Arroyo as the de
jure 14th President of the Republic are DISMISSED.

SO ORDERED.

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