Jurisprudence

G.R. No.

SUPREME COURT
Manila

EN BANC

DECISION

February 28, 2007

G.R. No.
, ,
vs.
, .

, J.:

Before this Court is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Court seeking the reversal and setting aside of the Decision,2 dated 29 January 2001, and Resolution,3 dated 14 November 2002, of the Court of Appeals in CA-G.R. SP No. 54862. In its assailed Decision, the Court of Appeals reversed the Resolution,4 dated 27 July 1998, of the Department of Justice (DOJ), which affirmed the Resolution,5 dated 7 October 1997, of the Makati City Prosecution Office, finding no probable cause and dismissing the herein respondent?s complaint, docketed as I.S. No. 97-22188-191; and, instead, disposed as follows ?

WHEREFORE, the resolution of the Department of Justice dated November 26, 1997, is hereby set aside. The Prosecutor of Makati, is hereby Ordered to file an information of Estafa against the respondents.

During the time material to the Petition at bar, petitioners Francisco A. Cruz (Cruz), Edgardo C. Cataguis (Cataguis), Atty. Joselia J. Poblador (Atty. Poblador), Jose De Lusong (De Lusong), Eduardo A. Ricardo (Ricardo), and Atty. Ariel F. Abonal (Atty. Abonal) were serving, in various capacities, as officials of Caltex Philippines, Inc. (CPI). Petitioner Cruz was the Vice President for Corporate Planning and a member of the Board of Directors of CPI; petitioner Cataguis was the General Manager for Marketing and also a member of the Board of Directors of CPI; petitioner Atty. Poblador was the Corporate Secretary and General Manager for Legal and Tax of CPI; petitioner De Lusong was the General Manager for Marketing Retail of CPI; petitioner Ricardo was the General Manager for Marketing of CPI for the years 1990-1996; and petitioner Atty. Abonal was the internal Legal Counsel of CPI.

On 3 May 1997, respondent Tarcisio S. Calilung (Atty. Calilung), a lawyer and a businessman, instituted a Complaint, docketed as I.S. No. 97-22188-191, against the aforementioned petitioners and several others. Respondent included in his complaint R.R. Paredes, W.S. Tiffany, T.R. Kotze, H. Mussain, and E.M. Lapuz, who had likewise served as officials of CPI but are no longer connected with the company and whose whereabouts as of present time are unknown. They did not participate in any proceedings. Respondent also included in his complaint Adolfo B. Garcia (Garcia), the Deputy Sheriff of the Manila Regional Trial Court (RTC), Branch 31, who participated in the proceedings before the Makati City Prosecution Office and the DOJ, but no longer participated in the instant petition.

In his complaint before the Makati City Prosecution Office, respondent charged petitioners, et al., with several counts of estafa. Respondent?s Original Complaint was summarized in the Resolution,6 dated 7 October 1997, of the Makati City Prosecution Office, to wit ?

[Herein respondent] Tarcisio S. Calilung alleged that [herein petitioner] Atty. Joselia Poblador, Chief Legal Counsel of Caltex Philippines (Caltex for brevity) negotiated to him the sale of several parcels of land consisting of 228.9 hectares, more or less[,] situated at Barrio Alibagu, Ilagan, Isabela. Atty. Poblador represented to [respondent] that Caltex is the absolute owner of all the parcels [of] land as it acquired the same at a Sheriff?s Auction Sale, a copy of a Sheriff?s Certificate of Final Sale was shown to [respondent]. Likewise, Atty. Poblador represented and assured complainant that subject property is not covered by the Agrarian Reform Program and that the adverse occupants thereof are mere squatters. Consequently, [respondent] paid the total amount of P3.5 Million for all the said parcels of land in two payments. Thereupon, a Deed of Assignment with Consolidation of Title dated June 22, 1995 was executed between Caltex Philippines and Tarcisio S. Calilung. Later, [respondent] discovered that none of the representations made to him by [petitioner] Atty. Poblador is true. Contrary to Atty. Poblador?s representation, Caltex Philippines is not the absolute owner of the several parcels of land sold to him. Accordingly, the several parcels of land are owned by the heirs of Antonia Medina (sic). Caltex Philippines is the owner of only one share of the co-heirs which it acquired at the Sheriff?s Auction. Further, [respondent] learned that on August 3, 1993, Caltex thru E.A. Ricardo, manager for Marketing, has already sold the subject parcels of land to the Department of Agrarian Reform under Voluntary Offer To Sell program of the Government. Also, complainant averred that the Sheriff?s Certificate of Final Sale executed by Deputy Sheriff Adolfo Garcia shown to him was falsified as it showed that Caltex?s bid of P2.7 Million was successful and it is the absolute owner of all the parcels of land. The truth however, is that Caltex is the owner of only one share of one of the co-heirs. Lastly, Caltex through E.A. Ricardo misrepresented to the Department of Agrarian Reform that the subject property is agricultural inorder (sic) that it will qualify and be sold under the Agrarian Reform Program. The truth of the matter is the said parcels of land are pasturelands thus, exempt from the coverage of the Agrarian Reform Program. Hence, [respondent] filed this complaint for Estafa against R.H. Paredes, W.S. Tiffany, T.R. Kotze, H. Mussain, F.A. Cruz, E.C. Cataguis, E.M. Lauz who are members of the Board of Caltex Philippines, Atty. Joselia Poblador, Chief Legal Counsel, Jose De Lusong, signatory of the Deed of Assignment and E.A. Ricardo, manager for Marketing and Atty. Ariel F. Abonal, assistant Secretary to the Board of Caltex Philippines who according to him acted in concert in perpetrating the crime charged. Likewise, a complaint for Falsification is instituted against Adolfo Garcia who connived with the above-mentioned officers/members of the Board of Caltex Philippines for falsification.

To answer the respondent?s accusations against them, petitioners Atty. Poblador, Cruz, Cataguis, De Lusong, and Ricardo, submitted their Joint Counter-Affidavit,7 averring that the respondent?s complaint was without basis in fact and in law, and that they could not be held liable for estafa. The contents of their Joint Counter-Affidavit were concisely recounted by the Makati City Prosecutor in her Resolution,8 dated 7 October 1997 ?

Jose de Lusong and Atty. Poblador claimed that they did not at any time represent that Caltex Philippines is the absolute owner of the entire subject parcels of land.

[Herein petitioners] narrated that Caltex?s rights and interests on subject parcels of land arose from Civil Case No. 84-22434 entitled Caltex Philippines vs. Antonia Vda. de Medina at Branch 31, RTC-Manila. Antonia Vda. de Medina is Caltex?s judgment debtor and is [respondent?s] mother-in-law. During the pendency of the case, or on February 7, 1984, 5 Notices of Levy on Attachment were issued against the rights, titles and interest of [respondent?s] mother-in-law. The undivided shares of the other heirs, two (2) children of Antonia Vda. de Medina were never levied. On September 17, 1984, a decision was rendered in favor of Caltex Philippines and the same became final and executory. On July 24, 1989, a Writ of Execution was issued. On July 24, 1989, Deputy Sheriff Adolfo B. Garcia issued a Notice of Levy Execution [sic] where only the shares, rights and interests of [respondent?s] mother-in-law over subject parcels of land were levied upon. Likewise, a notice of Sheriff?s Sale was issued. On August 23, 1989, Caltex, through Atty. Rafael Durian bidded P4.5 Million for the purchase of the rights, shares of [respondent?s] mother-in-law in subject parcels of land. Consequently, the subject parcels of land (shares and interests of Antonia Vda. de Medina which is 66.67% of the entire property) were sold to Caltex Philippines in the amount of P2,785,620.00. After the execution of the sale, [respondent?s] mother-in-law was given one (1) year within which to redeem her interest over the subject land.

After the lapse of the one (1) year redemption period given to Antonia Vda. de Medina, [respondent] went to Caltex office and propose [sic] to reacquire the interest of Antonia Vda. de Medina and to pay the defficiency (sic) judgment obligation of his mother-in-law. Caltex Philippines, through its office accepted the proposal of [respondent] to buy the parcels of land. Complainant further requested that all cases against his mother-in-law be withdrawn. Caltex Philippines agreed and the sale of the said subject parcels of land to [respondent] in the amount of P3.5 Million materialized. On the first payment made by the [respondent], Caltex Philippines executed a Deed of Waiver and Quitclaim in all cases filed against [respondent?s] mother-in-law. Thereupon, a Deed of Assignment with Consolidation of Title was executed by herein parties after the balance [thereof] was tendered by [respondent].

On the alleged sale by Caltex Philippines of subject parcels of land to the Department of Agrarian Reform, [petitioners] denied having sold the same to DAR. According to [petitioners], it was Antonia Vda. de Medina through her attorney-in-fact Carlito Baluang who transacted the voluntary Officer (sic) To Sell with the Department of Agrarian Reform sometime in 1988 and 1989. Subsequently, by virtue of the Deed of Assignment (With Special Power of Attorney Couple (sic) With Interest) executed by Antonia Vda. de Medina ceded in favor of Caltex Philippines, wherein Antonia Vda. de Medina "all her rights, interests, claims and participation from the proceeds of land compensation for all the property that she has voluntarily offered to sell" to Caltex Philippines and constituted the latter as its (sic) exclusive attorney-in-fact to follow-up with the Department of Agrarian Reform. Accordingly, this matter is make (sic) known to [respondent]. It was on the strength of [respondent?s] relation to Antonia Vda. de Medina and his assurance that he has connections with DAR that CPI decided to sell subject property to [respondent].

[Petitioners] denied the allegation of [respondent] that Caltex officers and directors conspire (sic) with Deputy Sheriff Adolfo B. Garcia and notary Public Atty. Ariel Abonal in the falsification of the Sheriff?s Certificate of Final Sale by representing that Caltex bidded for the entirety of all the parcels of land subject of the sale and using the said falsified documents to convince [respondent] of Caltex?s absolute title over the subject parcels of land.

Lastly, the declaration [of] Mr. Eduardo A. Ricardo that subject parcels of land is (sic) agricultural in nature in the Voluntary Officer (sic) To Sell to the DAR can hardly be considered a crime moreso that there is no other proof presented than the mere self-serving statement of Mr. Ricardo. Besides, in the Deed of Assignment with Consolidation of Title, there is not (sic) warranty as to the properties[?] classification or primary use given.

Deputy Sheriff Garcia submitted his own Counter-Affidavit with a Counter-Complaint for Perjury.9 He essentially affirmed the narration made in the petitioners? Joint Counter-Affidavit, particularly, the events arising from Civil Case No. 84-22434, instituted by CPI against respondent?s mother-in-law, Antonia Vda. de Medina, before the Manila RTC. After the Decision, dated 17 September 1984, rendered by the Manila RTC against Antonia Vda. de Medina, became final and executory, and upon failure of Antonia Vda. de Medina to pay her judgment debt to CPI, Deputy Sheriff Garcia proceeded to implement the Writ of Execution which levied upon Antonia Vda. de Medina?s rights, interests, title and participation in the subject real properties. At the execution sale held on 24 August 1989, CPI won the bidding. It bought Antonia Vda. de Medina?s limited interests over the subject real properties in the total amount of P4.5 Million. CPI?s winning bid was broken down10 as follows ?

P2,785,620.00

For the parcels of land covered by TCT Nos. T-132694, T-133034, T-94234, T-124684, T-139590, T-138153, T-138154, T-138155, T-133033, T-133021, T-133022, T-133023, T-133024, T-133025, T-133026, T-133027, T-133028, T-133029, T-133030, T-133031, T-133032, T-133033 and T-133034; and,

P1,714,380.00

For the parcels of land covered by Tax Declaration Nos. 01-262, 01-265, 01-25080, 01-29376 and 01-23470

P4,500,000.00

Total

When Antonia Vda. de Medina failed to redeem her interest in the subject real properties within a year from the execution sale, ownership over the said interest was consolidated in CPI. Deputy Sheriff Garcia explained that he prepared the Final Certification of Sale on 24 October 1990, although it was notarized only on 1 February 1994. He denied that he ever conspired with CPI, through its officers and directors, to make false representations to respondent that CPI was the absolute owner of the subject real properties; to maliciously conceal from respondent that CPI already sold the subject real properties to the Department of Agrarian Reform (DAR); or to falsify the Sheriff?s Certificate of Final Sale so as to convince respondent that CPI had absolute title over the subject real properties. He averred that he conducted the execution sale as part of his official duties and in accordance with the Rules of Court and the judgment issued by the Manila RTC in Civil Case No. 84-22434. He also maintained that only the rights and interests of Antonia Vda. de Medina over the subject real properties were covered by the execution.

Respondent submitted a Reply-Affidavit in which he insisted that the concealment of a prior sale, the falsification of the Sheriff?s Certificate of Final Sale and the conspiracy among the petitioners, et al., and the others can be readily seen. Once again, reference is herein made to the Resolution, dated 7 October 1997 of the Makati City Prosecution Office which related11 thus ?

[Herein respondent] alleged that he married the daughter of Antonia Vda. de Medina on November 22, 1994. In early November of 1994, Atty. Villacorta, [respondent?s] counsel, inquired from Caltex about the redemption of subject parcels of land. Caltex refused their offer to redeem the property because the period for redemptions (sic) has long expired. However, Caltex proposed that if they are interested in the remaining subject properties, they can purchase the same, Caltex demanded for P9 Million for the fourteen (14) parcels of land consisting of 228.9 hectares. Caltex never informed [respondent] or his counsel that the entire properties were sold to DAR for [P]1 Million. On November 1994, [respondent] formally offered to buy the entire fourteen (14) parcels of land [pay for] P3.5 Million as earnest money which was accepted by Atty. Poblador. Even if the titles over the subject parcels of land was (sic) still in the name of Antonia Medina (sic), he believed Atty. Poblador?s representation that Caltex is the absolute owner by virtue of the Sheriff?s Certificate of Final Sale handed to him. Nowhere in the Sheriff?s Certificate of Final Sale that only ? undivided share of Antonia Medina was auctioned.

The certificate of Final Sale was dated October 24, 1990 but notarized only on November 15, 1994, which is more than a week before he paid the earnest money on November 29, 1994. Lastly, the declared sale price of P2,785,620.00 does not correspond to the written winning bid by Caltex for P4.5 Million.

To support his foregoing allegations, respondent also submitted the Affidavit12 of his counsel, Atty. Rolando A. Villacorta (Atty. Villacorta), who supposedly represented and assisted him during the negotiations with CPI for the purchase of the subject real properties. Atty. Villacorta attested that he met with both petitioners Attys. Poblador and Abonal of CPI regarding respondent?s offer to purchase the subject real properties; that Atty. Poblador, in response to a direct query by respondent, expressly denied that the subject real properties were covered by the Comprehensive Agrarian Reform Program (CARP) of the Government; and that respondent was never informed that what he was purchasing was not the whole of the subject real properties, consisting of 229 hectares, but only an undivided share therein.

In their Joint Rejoinder,13 petitioners Cruz, Cataguis, De Lusong, Ricardo and Attys. Poblador and Abonal denied meeting and talking to Atty. Villacorta. According to petitioners Attys. Poblador and Abonal, at the beginning of their negotiations for the purchase by respondent of the subject real properties from CPI, the latter was accompanied, not by Atty. Villacorta, but an Atty. Karl Miranda from the Office of the Solicitor General (OSG), acting as a broker. During their meeting, they discussed about the redemption of the rights, interests, and title of Antonia Vda. de Medina over the subject real properties. In their succeeding meetings, petitioners stressed that respondent was informed that CPI was selling and assigning only the limited rights, interests, and title of Antonia Vda. de Medina over the subject real properties, and that the subject real properties were under the coverage of CARP and were subject of a Voluntary Offer to Sell (VOS). Petitioners pointed out that respondent himself admitted that he was purchasing only the limited interest of Antonia Vda. de Medina in the subject real properties when he stated in his letter,14 dated 29 November 1994, addressed to CPI, that, "We are pleased to inform you that we accept your offer to sell to us for P3.5 Million your interest in the foreclosed Medina properties."

Moreover, to belie the attestations of respondent and Atty. Villacorta in their affidavits, petitioners presented the Affidavits of Attys. Rodrigo B. Libunao, Jr.15 and Catherine T. Manahan,16 Legal Counsel and Tax Counsel, respectively, of CPI, who were also present during the meetings of petitioner Atty. Poblador with respondent. They both alleged that they were called to join the meeting in October 1994 wherein respondent was accompanied, not by Atty. Villacorta, but Atty. Miranda of the OSG; that respondent claimed to be married to Ma. Luisa Victoria Medina, the daughter of Antonia Vda. de Medina, and he was interested in acquiring CPI?s rights, interests, and title to the subject real properties in exchange for CPI?s execution of a waiver or quitclaim to secure the release of Antonia Vda. de Medina who was in prison by reason of the criminal cases filed by CPI against her; and that Atty. Poblador made full disclosure to respondent that CPI had, and was assigning to respondent, only the limited rights, interests, and title of Antonia Vda. de Medina over the subject real properties, and that the subject real properties were under the coverage of CARP and the subject of the VOS initiated by Antonia Vda. de Medina herself, through her attorney-in-fact Carlito Balauag.

Atty. Libunao further claimed that on 1 December 1994, when respondent came unaccompanied to the CPI Office to pay the P1 Million earnest money, Atty. Libunao again explained to him in detail the following ?

a. That CPI was merely a co-owner of the said properties as there were other heirs to the estate, one of whom was his wife, and that only the undivided share pertaining to Antonia Vda. de Medina which we acquired in an execution sale in Civil Case No. 84-22434 could be transferred to him.

b. That photocopies of the TCT?s to the subject parcels of land were furnished, and exhibited to, him and he carefully noted that the subject parcels of land were in the name of "Heirs of Antonio Medina."

c. That the subject parcels of land were covered by the Comprehensive Agrarian Reform Program (CARP) by virtue of a Voluntary Offer to Sell signed by Antonia Vda. de Medina, through her attoreney-in-fact, Mr. Carlito Balauag. A copy of this document was also furnished Atty. Calilung.

d. That out of the sixteen (16) parcels of land under process by the DAR, two (2) lots are ready for compensation and that the money has already been deposited by the DAR in a trust account in the Landbank branch in Tuguegarao, Cagayan.

e. That the fourteen (14) subject parcels of land are still under process by the MARO in Ilagan, Isabela and that the latter has started to identify the actual occupants and proposed beneficiaries of the same.

f. That payment of compensation under the CARP was being delayed by the fact that the heirs of Antonio Medina have not initiated any estate settlement proceeding and that none of the heirs has ever participated in the DAR conferences, despite notice.17

When Atty. Libunao again asked him if he really understood the complexities of the CARP issues affecting the subject real properties, respondent allegedly "confidently replied that he had been successful in preserving his and his family?s landholdings in Pampanga and that he will do the same for the subject parcels of land."18

On 7 October 1997, the Makati City Prosecution Office wrapped up its preliminary investigation and issued its Resolution, in which it made the following findings and recommendations19 ?

After a careful examination of the evidence obtaining in this case the undersigned finds that: (1) there appears no conceivable fraudulent representations committed by [herein petitioners, et al.] (Caltex Officers) in the negotiation and sale of subject parcels of land, (2) there is no sufficient proof to show that the Sheriff?s Certificate of Final Sale was falsified by [Deputy Sheriff Garcia] in connivance with [petitioners, et al.] Caltex Officers; and (3) that there is insufficient evidence to substantiate [respondent?s] claim that [petitioners, et al.] (Caltex Officers) made false declaration that subject parcels of land are productive agricultural land so these parcels of land may be covered and sold under the Agrarian Reform Program of the Government.

x x x x

Seemingly, [respondent] would want to extricate himself from a bad bargain and annul the effects of an unwise act. If the [respondent] failed to apprise himself of the consequence of his purchase of subject parcels of land from Caltex[,] he was simply unfortunate. As it would appear all documents and informations (sic) about the parcels of land subject matter of the sale transactions entered by the parties are in [respondent?s] hands for his scrutiny. [Respondent] is a lawyer and as such it can be presumed that he knows the complexities/controversies attached to the interests and rights of his mother-in-law (Antonia Vda. de Medina) over the parcels of land he wants to purchase from [petitioners, et al.] Caltex Officers. Clearly, there was no misrepresentation and/or concealment regarding the ownership of Caltex over subject parcels of land. Neither was there falsification committed on the Sheriff?s Certificate of Title.

x x x x

WHEREFORE, premises considered, it is respectfully recommended that complainant (sic) against [petitioners, et al.] Caltex Officers and Adolfo Garcia be dismissed, as it is hereby upon, approval, dismissed.

Likewise, it is recommended that the counter-charge of perjury against [respondent] be dismissed.

Aggrieved, respondent filed with the DOJ a Petition for Review of the Resolution, dated 7 October 1997, of the Makati City Prosecution Office. However, on 27 July 1998, the DOJ resolved20 to dismiss his Petition for Review, ratiocinating thus ?

The record clearly shows that the subject parcels of land were previously owned by the late Antonio Medina. Upon the latter?s death, the said properties were inherited by Antonia Vda. de Medina and her children through intestate succession. When Caltex filed a civil case against Antonia Vda. de Medina, who is [herein respondent?s] mother-in-law, the latter?s rights, title and interests over the subject properties were levied on attachment during the pendency of the said case. Thereafter, upon judgment in favor of Caltex in the said civil case; and, pursuant to the writ of execution issued therein, the rights, title and interests of Antonia Vda. de Medina over the said parcels of land were levied on execution and, consequently, sold at public auction with Caltex eventually winning the bid. Finally, a certificate of sheriff?s sale was issued and based thereon Caltex became the owner of the undivided interest of Antonia Vda. de Medina over the subject parcels of land.

We find it incredible for [respondent] not to have known the foregoing circumstances. It must be stressed that [respondent is] a member of the family of Antonia Vda. de Medina. It taxes one?s credulity that [respondent] would have had no personal knowledge about the family?s properties which were the subject of the sale transaction [respondent] had with Caltex. Besides, [respondent is] a lawyer [himself]. As such, not only [was respondent] expected to know the intricacies and complexities of the sale transaction [he] entered with Caltex but also [respondent] had all the means and resources to check and counter-check the veracity of [herein petitioners, et al.?s] representations. Indeed, it is hard to believe that [respondent] chose to just take the word of [petitioners, et al.] that Caltex is the owner of all the subject properties rather than examine the documents pertaining thereto before parting with a substantial amount of money. We take with a grain of salt [respondent?s] allegation that during the sale negotiations [respondent was] unaware of the extent of the ownership of Caltex over the properties in question not only because of [respondent?s] stature as a lawyer-businessman but also because of [his] personal knowledge thereon by reason of [his] being a member of the family of Antonia Vda. de Medina from whom Caltex acquired the subject properties. Under this milieu, no amount of fraudulent misrepresentations from [petitioners, et al.] could have misled [him] into executing with Caltex the Deed of Assignment with Consolidation of Title over the properties in question.

The foregoing circumstances not only create suspicion as to [respondent?s] actual motive in filing the instant complaint but also strengthen [petitioners?] claim that there is, indeed, reasonable ground to believe that [respondent] entered into the transaction in question knowing fully well that what was being sold by Caltex was only the undivided interest of [his] mother-in-law who is one (1) of the co-heirs in (sic) the subject parcels of land.

Besides, no clearer acknowledgment by [respondent] of [his] knowledge on (sic) the circumstances surrounding the subject properties than as stated in par. 3, p. 5, of the Deed of Assignment with Consolidation of Title can be made, which states thus ?

x x x x

"4. ASSIGNEE [respondent] further acknowledges that he is fully aware of the circumstances under which these Properties were acquired by ASSIGNOR [CPI] and that he has examined the title and inspected the said properties and has verified their location together with their boundaries." x x x

As regards the findings of the City Prosecutor on [respondent?s] other charges for estafa under Article 315, par. (3) of the Revised Penal Code and falsification/use of falsified documents, we can find no cogent reason to alter, modify much less reverse the same.

WHEREFORE, [respondent?s] instant petition for review is hereby dismissed.

Respondent?s Motion for Reconsideration was denied by the DOJ in another Resolution dated 30 June 1999.

This prompted respondent to file with the Court of Appeals a Petition for Certiorari under Rule 65 of the Rules of Court, contending that the DOJ and the Makati City Prosecution Office committed grave abuse of discretion amounting to lack or excess of jurisdiction in dismissing respondent?s complaint in I.S. No. 97-22188-191. The Court of Appeals, in its Decision,21 dated 29 January 2001, reversed the findings of the DOJ and the Makati City Prosecution Office, and ordered the filing of an information for estafa against the petitioners, based on the following raison d’être ?

The Court after a perusal over (sic) the ruling of the Department of Justice believes that said resolution deserves scant consideration. This is so because the issue on double sale was just taken in passing by the Department of Justice, when that issue is paramount in the case.

It appears on record that E.A. Ricardo, General Manager ? Marketing commercial of Caltex offered for sell (sic) to DAR the subject property.

x x x x

It should be noted that the sale to DAR is unlike the ordinary contract to sell transactions wherein one could determine when a sale is consummated. But at this instance, where voluntary offer to sell has been made, where process has been undergoing at that time, We opine that there is already sale considering the unique circumstance of selling the subject landholding to the DAR.

This is so because under Administrative Order No. 5 series of 1992, it provides that landowners who entered into Voluntary Offer to sell can no longer back out, except under the exceptional circumstances as earlier illustrated. The present case is one that is not of the exception. Hence, if a landowner can no longer back out since he entered into that kind of transaction and by entering into another sale such as in this case, fully knowing of the circumstances but without divulging the same to the petitioner, would that not tantamount to misrepresentation, fraud and deceit.

A careful perusal on (sic) the comments and arguments of the [herein petitioners] that it (sic) did not refute in whatever manner that there was a sale that took place between the Department of Agrarian Reform and the CPI. As a matter of fact, a reading of the foregoing, in consonance with the VOS would connote that the sale has indeed been entered into because Caltex knew that a process has been undertaken by the DAR (p. 175 [petitioners?] Comment) x x x.

These are an admission (sic) so far, that there was indeed a previous transfer of the subject parcels of land to the DAR as they never disputed that there was a sale between CPI and DAR. The words of CALTEX are simple and explicit, there was an "offer" and "transfer" and that there was already an ongoing process of the VOS. Hence, there was a sale by virtue of the voluntary offer to sell under the Comprehensive Agrarian Reform Program. The only thing is that, Caltex denies responsibility that it was the one who offered the sale to DAR, but it claim (sic) instead that it was Antonia Vda. de Medina. But this argument bears no weight. Regardless of whether or not Antonia Vda. de Medina was the one who offered to sell the property to DAR, CALTEX can?t absolve itself from any responsibility.

x x x x

So whether or not the first voluntary offer to sell to the Department of Agrarian Reform was made by Antonia Vda. de Medina and the second offer was made by CALTEX to DAR, to our mind is, of no moment. One thing is thus, clear, CALTEX who duly executed the necessary documents. There is nothing on record which would reveal that [petitioners] was (sic) able to prove that [herein respondent] was fully informed of the first sale made to DAR.

Further, [petitioners] claimed that being a son-in-law,it (sic) would be impossible for [respondent] not to know it. This is not sufficient reason to conclude that [respondent] was aware of the attending circumstances. And we cannot therefore, agree with the conclusion of the DOJ.

Clearly then, the evidence points out that what appears to have been sold were the properties described in the 14 TCT?s without any qualification thereon. And that the existence of a double sale can?t be contested, there being an admission by the [petitioners] that there was a sale made to DAR prior to herein [respondent].

x x x x

With the acts of CALTEX in the case at bar it can be gleaned therefrom that there was no clear transactions [sic] that took place, thus, there was an evident misrepresentation to the damage and prejudice of the [respondent]. As supported by the Deed of Assignment itself, the assurances given by the assignor CALTEX to [respondent] is a grave misrepresentation to the [respondent] who is the buyer of the properties in question. That where there was no divulgement made by the CALTEX to petitioner of the sale to DAR, there is no question that deceit is present. The presence of damage and deceit are (sic) apparent in the present case, hence, the very elements of Estafa exist.

Even granting that the sale was only with respect to the individual share or interest of CALTEX, it can?t be denied that deceit was committed by [petitioners, et al.] in not being fair, honest in not revealing the real status of the subject lot. x x x Had it not been of such misrepresentation, the Court believes that [respondent] would not have parted substantial amount of money.

From the foregoing premises, a prima facie case of ESTAFA was herein committed by the [petitioners, et al.] on the ground of double sale. And the only way to determine whether [petitioners, et al.] herein are guilty or not is in a full blown trial before a Court. However, we do not find any participation of the Deputy Sheriff Adolfo Garcia on the issue of double sale, it appearing that he has nothing to do with the transaction between CALTEX and Department of Agrarian Reform. This Court is convinced that the Deputy Sheriff had just performed a ministerial duty imposed upon him by law.

After their Motion for Reconsideration was denied by the Court of Appeals, in its Resolution,22 dated 14 November 2002, petitioners come before this Court via a Petition for Review on Certiorari under Rule 45 of the Rules of Court. Petitioners posit that the Court of Appeals erred in finding that there exists a prima facie case against them considering that: (1) Petitioners never deceived respondent with regard to the background circumstances of the subject real properties; (2) There was no "double sale" made by CPI of its rights and interests in the subject real properties; and (3) There exists no proof of specific overt acts or omission of each of the petitioners which would constitute conspiracy in committing the alleged crime of estafa.

This Court finds the Petition at bar meritorious.

In his complaint, respondent charges petitioners, together with other persons no longer part of the present Petition, of two counts of estafa by means of deceit: (1) estafa by means of false pretenses, under Article 315(2)(a) of the Revised Penal Code; and (2) estafa by means of concealment, under Article 315(3)(c) of the same Code. Relevant provisions of the Revised Penal Code expressly read thus ?

ART. 315. Swindling (estafa). ? Any person who shall defraud another by any of the means mentioned hereinbelow shall be punished by:

x x x x

[P]rovided that in the four cases mentioned, the fraud be committed by any of the following means:

x x x x

(2) By means of any of the following false pretenses or fraudulent acts executed prior to or simultaneous with the commission of the fraud:

(a) By using a fictitious name, or falsely pretending to possess power, influence, qualifications, property, credit, agency, business or imaginary transactions, or by means of other similar deceits;

x x x x

(3) Through any of the following fraudulent means:

x x x x

(c) By removing, concealing or destroying, in whole or in part, any court record, office files, document or any other paper.

The elements of estafa by means of deceit,23 whether committed by false pretenses or concealment, are the following ?

a. That there must be a false pretense, fraudulent act or fraudulent means.

b. That such false pretense, fraudulent act or fraudulent means must be made or executed prior to or simultaneously with the commission of the fraud.

c. That the offended party must have relied on the false pretense, fraudulent act, or fraudulent means, that is, he was induced to part with his money or property because of the false pretense, fraudulent act, or fraudulent means.

d. That as a result thereof, the offended party suffered damage.

Now the question is whether there exists probable cause that petitioners committed the crime of estafa by means of deceit which would warrant the filing of an information against them before the trial court.

Probable cause has been defined as the existence of such facts and circumstances as would excite the belief, in a reasonable mind, acting on the facts within the knowledge of the prosecutor, that the person charged was guilty of the crime for which he was prosecuted. Probable cause is a reasonable ground of presumption that a matter is, or may be, well-founded, such a state of facts in the mind of the prosecutor as would lead a person of ordinary caution and prudence to believe, or entertain an honest or strong suspicion, that a thing is so. The term does not mean “actual and positive cause” nor does it import absolute certainty. It is merely based on opinion and reasonable belief. Thus, a finding of probable cause does not require an inquiry into whether there is sufficient evidence to procure a conviction. It is enough that it is believed that the act or omission complained of constitutes the offense charged. Precisely, there is a trial for the reception of evidence of the prosecution in support of the charge.24 While probable cause demands more than “bare suspicion,” it requires “less than evidence which would justify conviction.” A finding of probable cause merely binds over the suspect to stand trial. It is not a pronouncement of guilt.25

The conduct of preliminary investigation for the purpose of determining the existence of probable cause is executive in nature.26 The prosecution of crimes appertains to the executive department of the government whose principal power and responsibility is to see that the laws of the land are faithfully executed. A necessary component of this power to execute the laws is the right to prosecute their violators. The right to prosecute vests the prosecutor with a wide range of discretion, the discretion of whether, what and whom to charge, the exercise of which depends on a smorgasbord of factors which are best appreciated by prosecutors.27

The main function of a government prosecutor during his conduct of preliminary investigation is to determine the existence of probable cause and to file the corresponding information should he find it to be so.28 The purpose of a preliminary investigation is to secure the innocent against hasty, malicious and oppressive prosecution, and to protect him from an open and public accusation of crime, from the trouble, expense and anxiety of a public trial, and also to protect the state from useless and expensive trials. A preliminary investigation serves not only the purposes of the State. More important, it is a part of the guarantees of freedom and fair play which are birthrights of all who live in this country. It is, therefore, imperative upon the fiscal to relieve the accused from the pain of going through a trial once it is ascertained that no probable cause exists to form a sufficient belief as to the guilt of the accused.29

A prosecutor, by the nature of his office, is under no compulsion to file a particular criminal information where he is not convinced that he has evidence to prop up the averments thereof, or that the evidence at hand points to a different conclusion. This is not to discount the possibility of the commission of abuses on the part of the prosecutor. But this Court must have to recognize that a prosecutor should not be unduly compelled to work against his conviction.30 Although the power and prerogative of the prosecutor, to determine whether or not the evidence at hand is sufficient to form a reasonable belief that a person committed an offense, is not absolute but subject to judicial review, it would be embarrassing for him to be compelled to prosecute a case when he is in no position to do so, because in his opinion he does not have the necessary evidence to secure a conviction, or he is not convinced of the merits of the case.31

Hence, this Court consistently adheres to its policy of non-interference in the conduct of preliminary investigations, and to leave to the investigating prosecutor sufficient latitude of discretion in the determination of what constitutes sufficient evidence as will establish probable cause for the filing of an information against a supposed offender.32

In the present case, the Makati City Prosecution Office, as well as the DOJ, found no probable cause that petitioners committed estafa by deceit to the damage of respondent. There was no factual or legal basis for the Court of Appeals to reverse the findings of the prosecutor who conducted the preliminary investigation in I.S. No. 97-22188-191.

It should do well for the Court of Appeals to remember that the DOJ Resolutions, dated 27 July 1998 and 30 June 1999, affirming the dismissal by the Makati City Prosecution Office of respondent?s complaint against petitioners, were brought before it via a Petition on Certiorari under Rule 65 of the Rules of Court. Its duty is confined to determining whether the executive determination of probable cause was done without or in excess of jurisdiction or with grave abuse of discretion. Thus, although it is entirely possible that the investigating prosecutor may erroneously exercise the discretion lodged in him by law, this does not render his act amenable to correction and annulment by the extraordinary remedy of certiorari, absent any showing of grave abuse of discretion amounting to excess of jurisdiction.33

For the courts to grant the extraordinary writ of certiorari, so as to justify the reversal of the investigating prosecutor?s finding on the existence or absence of probable cause to file an information, the one seeking the writ must be able to establish the following ?

For grave abuse of discretion to prosper as a ground for certiorari, it must first be demonstrated that the lower court or tribunal has exercised its power in an arbitrary and despotic manner, by reason of passion or personal hostility, and it must be patent and gross as would amount to an evasion or to a unilateral refusal to perform the duty enjoined or to act in contemplation of law. Grave abuse of discretion is not enough. Excess of jurisdiction signifies that the court, board or office, has jurisdiction over the case but has transcended the same or acted without authority. 34

Try as we might, this Court cannot find grave abuse of discretion on the part of the DOJ, when it affirmed the finding of the Makati City Prosecution Office, that there was no probable cause to file an information for estafa by means of deceit against petitioners and resolved to dismiss respondent?s complaint. There is absolutely no showing that the DOJ, in the exercise of its power to review on appeal the findings of the Makati City Prosecution Office, acted in an arbitrary and despotic manner, so patent or gross as to amount to an evasion or unilateral refusal to perform its legally-mandated duty. On the contrary, this Court finds the Resolutions of the DOJ, as well as that of the Makati City Prosecution Office, to be more in accordance with the evidence on record and relevant laws and jurisprudence than the assailed Decision of the Court of Appeals.

Respondent charges petitioners with the crime of estafa because they allegedly employed deceit to induce respondent to enter into a contract of sale with CPI by (1) falsely misrepresenting that CPI was the owner of and, thus, could assign to respondent the entire subject real properties, when in truth, CPI only acquired and could assign to respondent the limited interest of Antonia Vda. de Medina in the subject real properties; and (2) fraudulently concealing the fact that the subject real properties were covered by CARP and were actually the subject of a pending VOS with the DAR.

It is worth stressing that it was respondent who initiated the complaint before the Makati City Prosecution Office. Thus, upon him rests the burden of supporting his charges with affidavits and any other evidence, for it is upon these evidence thus adduced, that the investigating prosecutor determines the existence, or in this case, the absence, of probable cause to hold the petitioners for trial for the crimes charged. Respondent must have necessarily tendered evidence, independent of and in support of the allegations in his affidavit-complaint, of such quality as to engender belief in an ordinarily prudent and cautious man that the offense charged therein has been committed by the petitioners. Indeed, probable cause need not be based on clear and convincing evidence of guilt, neither on evidence establishing guilt beyond reasonable doubt and definitely, not on evidence establishing absolute certainty of guilt, but it certainly demands more than bare suspicion and can never be left to presupposition, conjecture, or even convincing logic.35

Respondent, however, miserably failed to present sufficient evidence to establish probable cause for the filing of an information against petitioners for estafa by means of deceit. The only evidence presented by respondent that would directly establish the deceit allegedly perpetrated by the petitioners consists of his very own affidavits and that of his alleged counsel, Atty. Villacorta. These had been sufficiently rebutted by the evidence of the petitioners. The affidavits of petitioners, Deputy Sheriff Garcia, and witnesses Attys. Libunao and Manahan, all presented a consistent, coherent, and credible version of events, adequately supported by other documentary evidence. Even respondent?s own documentary evidence was satisfactorily explained or was even consistent with the version of events as presented by petitioners and their witnesses. The sale of CPI?s interest in the subject real properties to respondent was a legitimate business transaction, done in the course of CPI?s business, and petitioners did nothing more than to carry out their respective functions as officers of CPI to perfect and execute the sale.
Moreover, as between the mere denial constituting self-serving negative assertions of respondent that he did not fully know of the circumstances and the current status of the subject real properties he acquired from CPI, and the positive and categorical declarations of petitioners and their witnesses that respondent was duly informed thereof, the choice is not hard to make, for the jurisprudence on the matter is that positive statement is stronger and attains greater evidentiary weight than negative evidence.36
Also, this Court seriously doubts that, given the particular circumstances of this case, respondent was indeed clueless or ignorant of the true state of affairs of the subject real properties.
First, Antonia Vda. de Medina, from whom CPI acquired its interest in the subject real properties, is the respondent?s mother-in-law. He is married to Ma. Luisa Victoria Medina, one of the co-heirs and co-owners of the subject real properties. The Court of Appeals brushed aside the relations between Antonia Vda. de Medina and respondent as insufficient to conclude that respondent knew of the circumstances and status of the subject real properties. Although it may not constitute as conclusive evidence, the relations between Antonia Vda. de Medina and respondent casts serious doubts on respondent?s assertions. Given the close-knit relations among Filipino family members, it is almost impossible that his mother-in-law Antonia Vda. de Medina, his wife Ma. Luisa Victoria Medina, and respondent, never talked about the subject real properties; more so, if we consider that respondent is a lawyer who can freely and readily give legal advice to his mother-in-law and his wife to protect their remaining rights and interests in the subject real properties.
Neither can this Court give credence to respondent?s contention that his wife Ma. Luisa Victoria Medina, born 30 January 1972, was only a minor when CPI instituted Civil Case No. 84-22434 against her mother Antonia Vda. de Medina, before the Manila RTC on 18 February 1984; when judgment was rendered therein against her mother on 17 September 1984; and when the subject real properties were sold in favor of CPI at the execution sale on 24 August 1989. Respondent avers that his wife then still failed to grasp the significance of the events taking place as regards CPI, her mother, and the subject real properties. Respondent seems to ignore the fact that his wife grew up, and the likelihood that she eventually came to understand the history and legal problems besetting the subject real properties. In fact, respondent does not deny that on 26 September 1996, his wife Ma. Luisa Victoria Medina, together with the other heirs of her deceased father Antonio Medina, filed a civil complaint with the RTC of Ilagan, Isabela, docketed as Civil Case No. 948, in which they questioned and, thus, admitted knowledge of the VOS made by CPI in favor of DAR.37 And if Ma. Luisa Victoria Medina already knew that the subject real properties were voluntarily offered for sale by CPI to the DAR, it is highly unlikely that she would have kept such information from respondent, her husband.
It should also be recalled that it was respondent who approached CPI first and sought the purchase of its interest in the subject real properties. Respondent never explained how he knew of CPI?s interest in the subject real properties. Neither did respondent allege nor prove that CPI actively offered for sale to the public its interest in the subject real properties. The only logical deduction would be that respondent came to know of CPI?s interest in the subject real properties through his wife and/or mother-in-law. In fact, in consideration of respondent?s purchase of the interest of CPI in the subject real properties for P3.5 Million, respondent was able to secure the execution by CPI of the Deed of Waiver and Quitclaim, dated 22 December 1994, by virtue of which, CPI waived any further claim for sum of money and damages from respondent?s mother-in-law Antonia Vda. de Medina, and discharged the latter from any and all pending court case liabilities, whether civil or criminal, filed by CPI against her. That respondent sought the execution by CPI of the said Deed of Waiver and Quitclaim, which obviously benefited his mother-in-law, only supports the view that respondent not only knew of the current status of the subject real properties, but also the history of the legal tussle between Antonia Vda. de Medina and CPI, which resulted in the transfer of Antonia Vda. de Medina?s interest in the subject real properties to CPI.
Respondent?s contention of his seeming disconnection and isolation from the affairs of his wife?s family is undoubtedly contrary to the common family life experience of Filipinos. Reference is made herein to the quote of Vice-Chancellor Van Fleet, reproduced in Pacheco v. Hon Court of Appeals and People of the Philippines38 ?
Evidence to be believed must not only proceed from the mouth of a credible witness but must be credible in itself – such as the common experience and observation of mankind can approve as probable under the circumstances. We have no test of the truth of human testimony, except its conformity to our knowledge, observation and experience. Whatever is repugnant to these belongs to the miraculous, and is outside of judicial cognizance.39
Second, there is a clear paper trail by which respondent could have traced and uncovered the true status of the subject real properties. CPI itself provided respondent with some of these documents, while the others are part of public records to which respondent had access.
There is scant evidence on record that CPI or any of its officers, including herein petitioners, had willfully and maliciously made false misrepresentations to respondent that CPI owned the subject real properties in its entirety. Again, only the affidavits of respondent and Atty. Villacorta directly and positively describe how the alleged false misrepresentations were made, and, even therein, they could only attribute the same to petitioner Atty. Poblador, and no other. Thus, it behooves this Court how, from respondent?s self-serving and unsubstantiated allegations, it can jump off to conclude that all the petitioners, in conspiracy and with criminal intent, made false misrepresentations on behalf of CPI to the damage of respondent.
Instead, the documentary evidence on record establishes that CPI laid claim on and actually acquired only the limited interest of Antonia Vda. de Medina in the subject real properties and nothing more.
The Notice of Levy on Attachment40 issued on 7 February 1984 by Deputy Sheriff Garcia to the Register of Deeds of Ilagan, Isabela, during the pendency of Civil Case No. 84-22434 before the Manila RTC, clearly stated that what was being levied upon was limited to "the rights, interest, title and participation" which Antonia Vda. de Medina may have in the real properties enumerated therein.
In its letter,41 dated 23 August 1989, addressed to Deputy Sheriff Garcia, CPI presented its bid of P4.5 Million at the auction sale of the properties of Antonia Vda. de Medina, held to satisfy the latter?s judgment debt to CPI in Civil Case No. 84-22434. CPI?s bid was conditioned on the following ?

[2] With respect to property under the exclusive name of Antonia Caragayan Vda. de Medina, the Certificate of Sale shall indicate that the said property together with improvements thereon, is sold to the successful bidder.
[3] With respect to property registered in the name of Heirs of Antonio Medicna and/or Antonia Vda. de Medina representing or as Administration [sic] of Estate of Antonio of Antonio Medina the Certificate of Sale shall refer only [to] the rights, interests, claims and participation of Antonia Vda. de Medina in the covered property and improvements since she has co-heirs, a son and a daughter. In the computation of the undivided interest of Antonia Vda. de Medina and the two heirs, since the property appear to be conjugal, two thirds [66.67%] of the property pertains to Antonia Vda. de Medina while the remaining one-third [33.34%] pertains to the heirs, son and daughter. (Emphasis supplied.)

Respondent himself, in his letter,42 dated 29 November 1994, addressed to CPI, wrote in the first paragraph that, "We are pleased to inform you that we accept your offer to sell to us for P3.5 Million your interest in the foreclosed Medina properties." CPI?s interest in the subject real properties, as referred to in respondent?s letter, could be nothing more than the same interest therein of Antonia Vda. de Medina.
Thus, although the Deed of Assignment with Consolidation of Title43 executed between CPI and respondent on 22 June 1995, provides that ?

1. For and in consideration of the sum of THREE MILLION FIVE HUNDRED THOUSAND PERSOS (P3,500,000.00), Philippine Currency, receipt of which is acknowledged, [CPI] hereby assigns, transfers and conveys unto and in favor of [respondent], his heirs, executors and assigns, the Properties aforedescribed.
it should not be taken to mean that what CPI was assigning to respondent was the entirety of the subject real properties, instead of merely the limited interest therein acquired by CPI from Antonia Vda. de Medina. The reference in the said paragraph, as well as in any other part of the Deed, to "Properties" without particularly limiting or qualifying the same to the undivided interest of CPI in the subject real properties, could be more of a problem of imprecise use of terms rather than a criminal intent to defraud and mislead respondent. Even so, the afore-quoted paragraph should be read in conjunction with the rest of the Deed, especially the succeeding paragraphs, to wit ?
3. [Respondent] acknowledges that he is fully aware of the circumstances under which these Properties were acquired by [CPI] and that he examined the title and inspected the properties and verified their location together with their boundaries. [CPI] shall therefore be no longer obliged to submit to [respondent] a location survey plan of the Properties nor pinpoint the same to [respondent].
4. [Respondent] further acknowledges that the Properties are presently occupied by squatters and other adverse occupants and that [CPI] makes no warranty that possession can be immediately delivered to [respondent] free and clear of these squatters and other adverse occupants. All the expenses for the eviction of these persons shall be borne by [respondent].
5. [CPI] warrants the genuineness of its interest over said Properties and that it shall, if necessary, execute any additional documents to complete the title of [respondent] to above-described Properties. No warranty, however, as to the Properties? classification or primary use is hereby given.

Respondent, by virtue of paragraphs 3 and 4 of the Deed of Assignment with Consolidation of Title, explicitly acknowledges that he is fully aware of the circumstances by which CPI acquired its interest in the subject real properties; that he has examined the title; that he has inspected the properties; and that he acknowledges that the subject real properties are occupied by squatters and other adverse occupants. The said acknowledgments made by respondent dispute any claim on his part that he was misled to believe that when he entered into the contract of sale with CPI, he was acquiring the entirety of the subject real properties.
Respondent had every opportunity to verify what he was actually purchasing from CPI. He already admits knowing the circumstances by which CPI acquired its interest in the subject real properties. If this is truly so, respondent should have known that the subject real properties were inherited, intestate, by Antonia Vda. de Medina and her co-heirs, from Antonia?s deceased husband, Antonio; that Antonia Vda. de Medina is just one of the heirs of the late Antonio Medina, so she co-owns with the other heirs, in undivided shares or interests, the subject real properties; that Antonia Vda. de Medina?s undivided interest in the subject real properties was sold at an auction sale held to satisfy her judgment debt to CPI in Civil Case No. 84-22434; that CPI gave the highest bid at the auction sale and was thus awarded Antonia Vda. de Medina?s limited interest in the subject real properties; that when Antonia Vda. de Medina failed to redeem her interest in the subject real properties within a year, title was thereby consolidated in CPI; and that even before CPI acquired Antonia Vda. de Medina?s interest in the subject real properties, she, together with all the other heirs of her late husband Antonio Medina, had already voluntarily offered to sell the subject real properties to DAR. With respondent?s knowledge of the foregoing circumstances, coupled with his extensive legal knowledge as a lawyer, then respondent should have realized that what he was acquiring from CPI shall be nothing more than the same limited interest in the subject real properties acquired by CPI from Antonia Vda. de Medina.
Even if the Deed of Assignment with Consolidation of Title was prepared entirely by CPI, respondent cannot claim that the same was a contract of adhesion, in which he had no other participation but to adhere to. There were several meetings between CPI and respondent precisely for the purpose of negotiating the terms of their contract. Contrary to respondent?s contention that the Deed contained "so many ambiguities, subterfurge and clever craft" to allow CPI a "back-door retreat," if necessary, this Court finds that it is actually couched in simple terms easily understandable, and capable of no other possible and reasonable interpretation than what this Court had already discussed in the preceding paragraphs. Respondent, as a lawyer, is very capable of reviewing the Deed himself. He must also know that he had a legal right to revise certain terms or provisions thereof if he found these too ambiguous. Respondent was actually given time to review and revise the Deed, and for some unexplained reason, his only revision was to change his status from "married" to "single."
Furthermore, assuming that respondent had absolutely no knowledge of the circumstances surrounding CPI?s acquisition of its interest in the subject real properties from Antonia Vda. de Medina, then his examination of the transfer certificates of title (TCTs) should have revealed to him such circumstances or, at the very least, led him to ask questions about the same. The court processes44 issued by the Manila RTC in Civil Case No. 84-22434, affecting the subject real properties, and duly served on the Register of Deeds, were clearly annotated on the TCTs covering the subject real properties. What is more, the TCTs were all still in the name of the Heirs of Antonio Medina, not CPI. Such a fact should have been a caveat to respondent to proceed with the transaction with more prudence and to inquire into CPI?s title to or interest in the subject properties, as well as the circumstances attendant to its acquisition thereof. According to a well-established rule in our jurisdiction ?
The law protects to a greater degree a purchaser who buys from the registered owner himself. Corollarily, it requires a higher degree of prudence from one who buys from a person who is not the registered owner, although the land object of the transaction is registered. While one who buys from the registered owner does not need to look behind the certificate of title, one who buys from one who is not the registered owner is expected to examine not only the certificate of title but all factual circumstances necessary for him to determine if there are any flaws in the title of the transferor, or in his capacity to transfer the land.45 (Emphasis supplied.)
Respondent could be reasonably assumed to be familiar with the foregoing since he is a lawyer.
Third, respondent is a lawyer and, as such, he is presumed to know the law.46 Though respondent may not be actively practicing law as a profession, the legal rules and principles applicable to the present Petition are so basic and fundamental, and which respondent must have learned even while he was still studying law. Respondent is also a businessman who must possess some degree of shrewdness in his dealings so as to protect his business interests. With respondent?s qualifications as a lawyer and a businessman, while they may not protect him absolutely, make him less susceptible to deception as compared to an ordinary layperson.
The Court of Appeals, in its Decision, dated 29 January 2001, found that CPI committed a double sale of the subject real properties when it sold the same first to the DAR, then second to the respondent. It declared that a VOS is already a consummated sale because landowners who made such an offer can no longer back out. This declaration by the Court of Appeals has no basis in law or jurisprudence.
Respondent?s mother-in-law Antonia Vda. de Medina decided to avail of the VOS under Republic Act No. 6657, otherwise known as the Comprehensive Agrarian Reform Law (CARL) of 1988. On 5 April 1988, she executed a Special Power of Attorney (SPA)47 designating a certain Carlito Balauag to represent her and her children in any and all transactions with the DAR and the Landbank of the Philippines (Landbank) and to place the subject real properties under the voluntary coverage of CARP. Worth noting is the fact that the SPA covers not just Antonia Vda. de Medina?s share but all of the subject real properties. Pursuant to his SPA, Carlito Balauag submitted on 10 March 1989 the VOS Forms covering the subject real properties to the DAR. He signed the said forms on behalf of the landowners, who he identified as the "Heirs of Antonio Medina."
However, just a few days earlier, on 22 February 1989, Antonia Vda. de Medina executed a Deed of Assignment (with Special Power of Attorney Coupled with Interest),48 in which, for and in consideration of her unpaid obligations to CPI, she assigned all of her "rights, interests, claims and participation from the proceeds of land compensation" for the property she voluntarily offered to sell and transfer under the CARP. She claimed in the same Deed that the VOS was already under process for indorsement to the Landbank. Hence, she was appointing CPI as her exclusive attorney-in-fact to follow-up the processing of the VOS papers with the DAR and the Landbank. On 13 August 1993, CPI, pursuant to the authority granted to it by Antonia Vda. de Medina under the same Deed, submitted new VOS Forms covering the subject real properties.
By virtue of the foregoing, should the VOS covering the subject real properties already be deemed a consummated sale? This Court rules in the negative.
The CARL of 1988 encourages landowners to voluntarily offer for sale their lands by giving an additional five percent compensation to those who avail of this option.49 To implement the VOS scheme under the CARL of 1988, the DAR issued Administrative Order No. 3, series of 1989, subsequently revised by Administrative Order No. 9, series of 1990, which provided for the rules and procedure governing the acquisition by the government of land subject of a VOS. A cursory reading of these Administrative Orders would reveal that a VOS undergoes a long process. It is initiated by the filing by the landowner of the VOS Form and other required documents. The VOS is reviewed, among other personalities, by the Municipal Agrarian Reform Officer (MARO), the Provincial Agrarian Reform Officer (PARO), the DAR Regional Director, the Bureau of Land Acquisition and Development (BLAD), and the Landbank, for purposes of identifying the land and the qualified tenants, the valuation of the land, and payment of just compensation to the landowner.
In the case of Government Service Insurance Systems, Inc. v. Court of Appeals,50 this Court already ruled that ?
While it is true that under DAR Administrative Order No. 3, series of 1989, it is not necessary that the voluntary offeror of the lot be the registered owner thereof, private respondent failed to show that the DAR accepted and approved his offer to sell. Without said approval and acceptance, private respondent cannot safely presume that his voluntary offer to sell was accepted by the DAR. Notably, the word "offer," is subject to acceptance. The voluntary offer to sell is in fact reviewed and evaluated by the DAR before a corresponding notice of acceptance is sent to the landowner. The applicable rules and procedure governing voluntary offer to sell (VOS) at the time private respondent made his offer provides:
x x x x
Evidently, without the notice informing the landowner of the DAR?s conformity with the offer to sell, private respondent cannot validly presume that his offer to sell has been accepted by the DAR and that the latter will now assume the payment of the loan to the GSIS. (Emphasis supplied.)
Hence, a VOS, as its name implies, is a voluntary offer to sell the land to the government so that the latter can distribute the same to qualified tenants. While a landowner who voluntarily offered his land for sale is precluded from withdrawing his offer except under specified circumstances, such a condition does not make the mere offer a consummated sale. It bears to emphasize that the offer still needs to be accepted by the DAR on behalf of the government, and just compensation for the land determined and paid to the landowner. The sale is deemed consummated when the landowner has received payment or deposit by the DAR of just compensation with an accessible bank, in cash or Landbank bonds, since only then is ownership of the land finally transferred from the landowner to the government.51
In the present case, the VOS covering the subject real properties is still being processed by the DAR. There has so far been no express acceptance by the DAR of the said VOS or payment of just compensation to CPI. There being no consummated sale of the subject real properties to DAR, CPI could not have committed a double sale of the same. It remained a co-owner of the subject real properties, together with the other heirs of Antonio Medina, and, thus, it could still legally sell its share or interest therein to another person, such as respondent. Should the DAR finally approve the VOS covering the subject real properties, then respondent, after acquiring the interest of CPI, shall be entitled to just compensation corresponding to his interest.
After finding that petitioners did not deceive respondent into purchasing CPI?s limited interest in the subject real properties, then it necessarily follows that there can be no conspiracy to commit such deception. This Court would still want to point out that respondent?s accusation of conspiracy was so stretched that he implicated in his complaint members of the CPI Board of Directors who did nothing more than sign a resolution authorizing the sale of CPI?s interest in the subject real properties to respondent. Yet again, the existence of conspiracy among the CPI officers rests on no other evidence but respondent?s own allegations in his affidavits. Conspiracy cannot be established by mere inferences or conjectures.52 It is incumbent upon respondent to prove that each of the petitioners performed an overt act in pursuance or furtherance of the alleged complicity, so as to convince the investigating prosecutor that there is probable cause that petitioners conspired with one another to commit the crime.53 However, respondent?s general accusations against petitioners and the other CPI officers do little to persuade.
WHEREFORE, premises considered, the instant Petition is hereby GRANTED. The Decision, dated 29 January 2001, and Resolution, dated 14 November 2002, of the Court of Appeals in CA-G.R. SP No. 54862, are hereby REVERSED and SET ASIDE. Respondent?s complaint in I.S. No. 97-22188-191 is hereby ordered DISMISSED.
SO ORDERED.
MINITA V. CHICO-NAZARIOAssociate Justice
WE CONCUR:
CONSUELO YNARES-SANTIAGOAssociate JusticeChairperson

MA. ALICIA AUSTRIA-MARTINEZAssociate Justice
On leave.ROMEO J. CALLEJO, SR.Asscociate Justice
ANTONIO EDUARDO B. NACHURAAssociate Justice
A T T E S T A T I O N
I attest that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court?s Division.
CONSUELO YNARES-SANTIAGOAssociate JusticeChairperson, Third Division
C E R T I F I C A T I O N
Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson?s Attestation, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court?s Division.
REYNATO S. PUNOChief Justice

Footnotes

1 Rollo, pp. 14-71.
2 Penned by Associate Justice Eloy R. Bello, Jr. with Associate Justices Eugenio S. Labitoria and Perlita J. Tria Tirona, concurring; id. at 82-92.
3 Id. at 94-97.
4 Id. at 394-399.
5 Id. at 262-268.
6 Id. at 267-268.
7 Id. at 211-227.
8 Id. at 266-267.
9 Id. at 96-103.
10 Id. at 98-99.
11 Id. at 265.
12 Id. at 269-270.
13 Id. at 20-30.
14 Id. at 127.
15 Id. at 15-19.
16 Id. at 12-14.
17 Id. at 17-18.
18 Id. at 18.
19 Id. at 262-264.
20 Id. at 394-395.
21 Rollo, pp. 85, 87, 89, 91-92.
22 Id. at 94-97.
23 Luis B.Reyes, The Revised Penal Code: Criminal Law, Book II, 1993 ed., p. 684.
24 Pilapil v. Sandiganbayan, G.R. No. 101978, 7 April 1993, 221 SCRA 349, 360.
25 Webb v. Hon. De Leon, 317 Phil. 758, 789 (1995).
26 Lim, Sr. v. Felix, G.R. Nos. 94054-57, 19 February 1991, 194 SCRA 292, 304.
27 Supra note 25 at 800.
28 Cruz, Jr. v. People, G.R. No. 110436, 27 June 1994, 233 SCRA 439, 459.
29 Salonga v. Cruz Paño, G.R. No. L-59524, 18 February 1985, 134 SCRA 438, 461-462.
30 People v. Hon. Pineda, 127 Phil. 150, 157 (1967).
31 Bautista v. City Fiscal of Dagupan, 216 Phil. 125, 129 (1984); Alberto v. De la Cruz, G.R. No. L-31839, 30 June 1980, 98 SCRA 406, 411.
32 Andres v. Cuevas, G.R. No. 150869, 9 June 2005, 460 SCRA 38, 52.
33 D.M. Consunji, Inc. v. Esguerra, 328 Phil. 1168, 1185 (1996).
34 Sarigumba, v. Sandiganbayan, G.R. Nos. 154239-41, 16 February 2005, 451 SCRA 533, 549.
35 Kilosbayan, Inc. v. COMELEC, G.R. No. 128054, 16 October 1997, 345 SCRA 1141, 1174.
36 People v. Delos Reyes. G.R. No. 85771, 19 November 1991, 203 SCRA 707, 723.
37 Petitioners? Memorandum; rollo, pp. 748-749.
38 377 Phil. 627 (1999).
39 Records, p. 641.
40 Id. at 94-95.
41 Id. at 57-58.
42 Id. at 127.
43 Id. at 119-124.
44 Namely, the Order of Attachment, the Notice of Levy on Attachment, the Notice of Levy on Execution, and the Writ of Execution.
45 Bautista v. Court of Appeals, G.R. No. 106042, 28 February 1994, 230 SCRA 446, 456; Egao v. Court of Appeal, G.R. No. 79787, 29 June 1989, 174 SCRA 484, 493; Barrios v. Court of Appeals, G.R. No. L-32531, 31 August 1977, 78 SCRA 427, 433.
46 Director of Lands v. Abagat, 53 Phil. 147, 148 (1929).
47 Records, pp. 105-106.
48 Id. at 104.
49 Section 19.
50 427 Phil. 281, 292 (2002).
51 Roxas & Co., Inc. v. Court of Appeals, 378 Phil. 727, 756 (1999).
52 People v. Maluenda, 351 Phil. 467, 493 (1998).
53 People v. Roche, 386 Phil. 287, 308 (2000).

G.R. No.

SUPREME COURT
Manila

EN BANC

DECISION

February 28, 2007

G.R. No.
, ,
vs.
, .

, J.:

On pure questions of law, petitioner People of the Philippines has directly come to this Court via this petition for review on certiorari to nullify and set aside the Resolution1 dated 13 March 1997 of the Regional Trial Court of Manila, Branch 18, in Criminal Case Nos. 96-149990 to 96-149992, entitled People of the Philippines v. Lawrence Wang y Chen, granting private respondent Lawrence C. Wang?s Demurrer to Evidence and acquitting him of the three (3) charges filed against him, namely: (1) Criminal Case No. 96-149990 for Violation of Section 16, Article III in relation to Section 2(e)(2), Article I of Republic Act (R.A.) No. 6425 (Dangerous Drugs Act); (2) Criminal Case No. 96-149991 for Violation of Presidential Decree No. 1866 (Illegal Possession of Firearms); and (3) Criminal Case No. 96-149992 for Violation of Comelec Resolution No. 2828 in relation to R.A. No. 7166 (COMELEC Gun Ban).

The three (3) separate Informations filed against Lawrence C. Wang in the court of origin respectively read:

Criminal Case No. 96-149990 (Violation of Dangerous Drugs Act):

That on or about the 17th day of May 1996, in the City of Manila, Philippines, the said accused did then and there willfully, unlawfully and knowingly have in his possession and under his custody and control a bulk of white and yellowish crystalline substance known as SHABU contained in thirty-two (32) transparent plastic bags weighing approximately 29.2941 kilograms, containing methamphetamine hydrochloride, a regulated drug, without the corresponding license or prescription therefor.

Contrary to law.2

Criminal Case No. 96-149991 (Illegal Possession of Firearms):

That on or about the 17th day of May 1996, in the City of Manila, Philippines, the said accused did then and there willfully, unlawfully and knowingly have in his possession and under his custody and control one (1) DAEWOO Cal. 9mm, automatic pistol with one loaded magazine and one AMT Cal. .380 9mm automatic backup pistol with magazine loaded with ammunitions without first having secured the necessary license or permit therefor from the proper authorities.

Contrary to law. 3

Criminal Case No. 96-149992 (Violation of Comelec Gun Ban):

That on or about the 17th day of May 1996, in the City of Manila, Philippines, the said accused did then and there willfully, unlawfully and knowingly have in his possession and under his custody and control one (1) DAEWOO Cal. 9mm automatic pistol with one loaded magazine and one (1) AMT Cal. 380 9mm automatic backup pistol with magazine loaded with ammunitions, carrying the same along Maria Orosa St., Ermita, Manila, which is a public place, on the date which is covered by an election period, without first securing the written permission or authority from the Commission on Elections, as provided by the COMELEC Resolution 2828 in relation to Republic Act 7166.

Contrary to law. 4

During his arraignment, accused Wang refused to enter a plea to all the Informations and instead interposed a continuing objection to the admissibility of the evidence obtained by the police operatives. Thus, the trial court ordered that a plea of "Not Guilty" be entered for him.5 Thereafter, joint trial of the three (3) consolidated cases followed.

The pertinent facts are as follows:

On 16 May 1996, at about 7:00 p.m., police operatives of the Public Assistance and Reaction Against Crime of the Department of Interior and Local Government, namely, Captain Margallo, Police Inspector Cielito Coronel and SPO3 Reynaldo Cristobal, arrested SPO2 Vergel de Dios, Rogelio Anoble and a certain Arellano, for unlawful possession of methamphetamine hydrochloride, a regulated drug popularly known as shabu. In the course of the investigation of the three arrested persons, Redentor Teck, alias Frank, and Joseph Junio were identified as the source of the drug. An entrapment operation was then set after the three were prevailed upon to call their source and pretend to order another supply of shabu.

At around 11:00 p.m. that same date, Redentor Teck and Joseph Junio were arrested while they were about to hand over another bag of shabu to SPO2 De Dios and company. Questioned, Redentor Teck and Joseph Junio informed the police operatives that they were working as talent manager and gymnast instructor, respectively, of Glamour Modeling Agency owned by Lawrence Wang. Redentor Teck and Joseph Junio did not disclose their source of shabu but admitted that they were working for Wang.6 They also disclosed that they knew of a scheduled delivery of shabu early the following morning of 17 May 1996, and that their employer (Wang) could be found at the Maria Orosa Apartment in Malate, Manila. The police operatives decided to look for Wang to shed light on the illegal drug activities of Redentor Teck and Joseph Junio. Police Inspector Cielito Coronel and his men then proceeded to Maria Orosa Apartment and placed the same under surveillance.

Prosecution witness Police Inspector Cielito Coronel testified that at about 2:10 a.m. of 17 May 1996, Wang, who was described to the operatives by Teck, came out of the apartment and walked towards a parked BMW car. On nearing the car, he (witness) together with Captain Margallo and two other police officers approached Wang, introduced themselves to him as police officers, asked his name and, upon hearing that he was Lawrence Wang, immediately frisked him and asked him to open the back compartment of the BMW car.7 When frisked, there was found inside the front right pocket of Wang and confiscated from him an unlicensed AMT Cal. 380 9mm automatic Back-up Pistol loaded with ammunitions. At the same time, the other members of the operatives searched the BMW car and found inside it were the following items: (a) 32 transparent plastic bags containing white crystalline substance with a total weight of 29.2941 kilograms, which substance was later analyzed as positive for methamphetamine hydrochloride, a regulated drug locally known as shabu; (b) cash in the amount of P650,000.00; (c) one electronic and one mechanical scales; and (d) an unlicensed Daewoo 9mm Pistol with magazine. Then and there, Wang resisted the warrantless arrest and search.8

On 6 December 1996, the prosecution rested its case and upon motion, accused Wang was granted 25 days from said date within which to file his intended Demurrer to Evidence.9 On 19 December 1996, the prosecution filed a Manifestation10 to the effect that it had rested its case only in so far as the charge for Violation of the Dangerous Drugs Act in Criminal Case No. 96-149990 is concerned, and not as regards the two cases for Illegal Possession of Firearms (Crim. Case No. 96-149991) and Violation of the Comelec Gun Ban (Crim. Case No. 96-149992). Accordingly, trial continued.

On 9 January 1997, Wang filed his undated Demurrer to Evidence,11 praying for his acquittal and the dismissal of the three (3) cases against him for lack of a valid arrest and search warrants and the inadmissibility of the prosecution?s evidence against him. Considering that the prosecution has not yet filed its Opposition to the demurrer, Wang filed an Amplification12 to his Demurrer of Evidence on 20 January 1997. On 12 February 1997, the prosecution filed its Opposition13 alleging that the warrantless search was legal as an incident to the lawful arrest and that it has proven its case, so it is now time for the defense to present its evidence.

On 13 March 1997, the respondent judge, the Hon. Perfecto A.S. Laguio, Jr., issued the herein assailed Resolution14 granting Wang?s Demurrer to Evidence and acquitting him of all charges for lack of evidence, thus:

WHEREFORE, the accused’s undated Demurrer to Evidence is hereby granted; the accused is acquitted of the charges against him for the crimes of Violation of Section 16, Article III of the Dangerous Drugs Act, Illegal Possession of Firearms, and Violation of Comelec Gun Ban, for lack of evidence; the 32 bags of shabu with a total weight of 29.2941 kilograms and the two unlicensed pistols, one AMT Cal. .380 9mm and one Daewoo Cal. 9mm. are ordered confiscated in favor of the government and the branch clerk is directed to turn over the 32 bags of shabu to the Dangerous Drugs Board in Intramuros, Manila, and the two firearms to the Firearms and Explosive Units, PNP, Camp Crame, Quezon City, for proper disposition, and the officer-in-charge of PARAC, Department of Interior and Local Government, is ordered to return the confiscated amount of P650,000.00 to the accused, and the confiscated BMW car to its registered owner, David Lee. No costs.

SO ORDERED.

Hence, this petition15 for review on certiorari by the People, submitting that the trial court erred -

I

XXX IN HOLDING THAT THE UNDISPUTED FACTS AND CIRCUMSTANCES DID NOT CONSTITUTE PROBABLE CAUSE WITHIN THE CONTEMPLATION OF SECTION 2, ARTICLE III OF THE CONSTITUTION, AND IN HOLDING THAT SUCH FACTS AND CIRCUMSTANCES NEITHER JUSTIFIED THE WARRANTLESS SEARCH OF ACCUSED’S VEHICLE AND THE SEIZURE OF THE CONTRABAND THEREIN.

ll

XXX IN HOLDING, IN EFFECT, THAT A WARRANTLESS SEARCH IS CONSTITUTIONALLY ALLOWABLE AND CAN ONLY BE VALID AS AN INCIDENT TO A LAWFUL ARREST.

lII

XXX IN DECLARING THE WARRANTLESS ARREST OF THE ACCUSED AND THE SEARCH AND SEIZURE OF HIS HANDGUNS UNLAWFUL.

IV

XXX IN NOT DECLARING THE ACCUSED AS HAVING WAIVED, AS A RESULT OF HIS SUBMISSION AND FAILURE TO PROTEST THE SEARCH AND HIS ARREST, HIS CONSTITUTIONAL RIGHT AGAINST UNREASONABLE SEARCH AND SEIZURE AND HIS OBJECTION TO THE ADMISSION OF THE EVIDENCE SEIZED.

V

XXX IN NOT ADMITTING IN EVIDENCE THE EVIDENCE SEIZED AND OFFERED BY THE PROSECUTION AND IN NOT DENYING ACCUSED’S DEMURRER TO EVIDENCE.

In its Resolution16 of 9 July 1997, the Court, without giving due course to the petition, required the public and private respondents to comment thereon within ten days from notice. Private respondent Wang filed his comment17on 18 August 1997.

On 10 September 1997, the Court required the People to file a reply,18 which the Office of the Solicitor General did on 5 December 1997, after several extensions.19

On 20 October 2004, the Court resolved to give due course to the petition and required the parties to submit their respective memoranda,20 which they did.

The case presents two main issues: (a) whether the prosecution may appeal the trial court?s resolution granting Wang?s demurrer to evidence and acquitting him of all the charges against him without violating the constitutional proscription against double jeopardy; and (b) whether there was lawful arrest, search and seizure by the police operatives in this case despite the absence of a warrant of arrest and/or a search warrant.

First off, it must be emphasized that the present case is an appeal filed directly with this Court via a petition for review on certiorari under Rule 45 in relation to Rule 41, Section 2, paragraph (c) of the Rules of Court raising only pure questions of law, ordinary appeal by mere filing of a notice of appeal not being allowed as a mode of appeal directly to this Court. Then, too, it bears stressing that the right to appeal is neither a natural right nor a part of due process, it being merely a statutory privilege which may be exercised only in the manner provided for by law (Velasco v. Court of Appeals21). Although Section 2, Rule 122 of the Rules on Criminal Procedure states that any party may appeal, the right of the People to appeal is, in the very same provision, expressly made subject to the prohibition against putting the accused in double jeopardy. It also basic that appeal in criminal cases throws the whole records of the case wide open for review by the appellate court, that is why any appeal from a judgment of acquittal necessarily puts the accused in double jeopardy. In effect, the very same Section 2 of Rule 122 of the Rules on Criminal Procedure, disallows appeal by the People from judgments of acquittal.

An order granting an accused?s demurrer to evidence is a resolution of the case on the merits, and it amounts to an acquittal. Generally, any further prosecution of the accused after an acquittal would violate the constitutional proscription on double jeopardy. To this general rule, however, the Court has previously made some exceptions.

The celebrated case of Galman v. Sandiganbayan22 presents one exception to the rule on double jeopardy, which is, when the prosecution is denied due process of law:

No court whose Presiding Justice has received "orders or suggestions" from the very President who by an amendatory decree (disclosed only at the hearing of oral arguments on November 8, 1984 on a petition challenging the referral of the Aquino-Galman murder cases to the Tanodbayan and Sandiganbayan instead of to a court martial, as mandatorily required by the known P.D. 1850 at the time providing for exclusive jurisdiction of courts martial over criminal offenses committed by military men) made it possible to refer the cases to the Sandiganbayan, can be an impartial court, which is the very essence of due process of law. As the writer then wrote, "jurisdiction over cases should be determined by law, and not by preselection of the Executive, which could be much too easily transformed into a means of predetermining the outcome of individual cases." This criminal collusion as to the handling and treatment of the cases by public respondents at the secret Malacañang conference (and revealed only after fifteen months by Justice Manuel Herrera) completely disqualified respondent Sandiganbayan and voided ab initio its verdict. This renders moot and irrelevant for now the extensive arguments of respondents accused, particularly Generals Ver and Olivas and those categorized as accessories, that there has been no evidence or witness suppressed against them, that the erroneous conclusions of Olivas as police investigator do not make him an accessory of the crimes he investigated and the appraisal and evaluation of the testimonies of the witnesses presented and suppressed. There will be time and opportunity to present all these arguments and considerations at the remand and retrial of the cases herein ordered before a neutral and impartial court.

The Supreme Court cannot permit such a sham trial and verdict and travesty of justice to stand unrectified. The courts of the land under its aegis are courts of law and justice and equity. They would have no reason to exist if they were allowed to be used as mere tools of injustice, deception and duplicity to subvert and suppress the truth, instead of repositories of judicial power whose judges are sworn and committed to render impartial justice to all alike who seek the enforcement or protection of a right or the prevention or redress of a wrong, without fear or favor and removed from the pressures of politics and prejudice. More so, in the case at bar where the people and the world are entitled to know the truth, and the integrity of our judicial system is at stake. In life, as an accused before the military tribunal Ninoy had pleaded in vain that as a civilian he was entitled to due process of law and trial in the regular civil courts before an impartial court with an unbiased prosecutor. In death, Ninoy, as the victim of the "treacherous and vicious assassination" and the relatives and sovereign people as the aggrieved parties plead once more for due process of law and a retrial before an impartial court with an unbiased prosecutor. The Court is constrained to declare the sham trial a mock trial ? the non-trial of the century ? and that the predetermined judgment of acquittal was unlawful and void ab initio.

1. No double jeopardy. ? It is settled doctrine that double jeopardy cannot be invoked against this Court’s setting aside of the trial courts’ judgment of dismissal or acquittal where the prosecution which represents the sovereign people in criminal cases is denied due process. As the Court stressed in the 1985 case of People vs. Bocar,

Where the prosecution is deprived of a fair opportunity to prosecute and prove its case, its right to due process is thereby violated.

The cardinal precept is that where there is a violation of basic constitutional rights, courts are ousted of their jurisdiction. Thus, the violation of the State’s right to due process raises a serious jurisdictional issue (Gumabon vs. Director of the Bureau of Prisons, L-30026, 37 SCRA 420 [Jan. 30, 1971]) which cannot be glossed over or disregarded at will. Where the denial of the fundamental right of due process is apparent, a decision rendered in disregard of that right is void for lack of jurisdiction (Aducayen vs. Flores, L-30370 [May 25, 19731, 51 SCRA 78; Shell Co. vs. Enage, L-30111-12, 49 SCRA 416 Feb. 27, 1973]). Any judgment or decision rendered notwithstanding such violation may be regarded as a "lawless thing, which can be treated as an outlaw and slain at sight, or ignored wherever it exhibits its head" (Aducayen vs. Flores, supra).

Respondent Judge’s dismissal order dated July 7, 1967 being null and void for lack of jurisdiction, the same does not constitute a proper basis for a claim of double jeopardy (Serino vs. Zosa, supra).

xxx xxx xxx

Legal jeopardy attaches only (a) upon a valid indictment, (b) before a competent court, (c) after arraignment, (d) a valid plea having been entered; and (e) the case was dismissed or otherwise terminated without the express consent of the accused (People vs. Ylagan, 58 Phil. 851). The lower court was not competent as it was ousted of its jurisdiction when it violated the right of the prosecution to due process.

In effect, the first jeopardy was never terminated, and the remand of the criminal case for further hearing and/or trial before the lower courts amounts merely to a continuation of the first jeopardy, and does not expose the accused to a second jeopardy.

Another exception is when the trial court commits grave abuse of discretion in dismissing a criminal case by granting the accused?s demurrer to evidence. In point is the fairly recent case of People v. Uy,23 which involved the trial court?s decision which granted the two separate demurrers to evidence filed by the two accused therein, both with leave of court, resulting in their acquittal of their respective charges of murder due to insufficiency of evidence. In resolving the petition for certiorari filed directly with this Court, we had the occasion to explain:

The general rule in this jurisdiction is that a judgment of acquittal is final and unappealable. People v. Court of Appeals explains the rationale of this rule:

In our jurisdiction, the finality-of-acquittal doctrine as a safeguard against double jeopardy faithfully adheres to the principle first enunciated in Kepner v. United States. In this case, verdicts of acquittal are to be regarded as absolutely final and irreviewable. The cases of United States v. Yam Tung Way, People v. Bringas, Gandicela v. Lutero, People v. Cabarles, People v. Bao, to name a few, are illustrative cases. The fundamental philosophy behind the constitutional proscription against double jeopardy is to afford the defendant, who has been acquitted, final repose and safeguard him from government oppression through the abuse of criminal processes. As succinctly observed in Green v. United States “(t)he underlying idea, one that is deeply ingrained in at least the Anglo-American system of jurisprudence, is that the State with all its resources and power should not be allowed to make repeated attempts to convict an individual for an alleged offense, thereby subjecting him to embarrassment, expense and ordeal and compelling him to live in a continuing state of anxiety and insecurity, as well as enhancing the possibility that even though innocent, he may be found guilty.” (Underscoring supplied)

The same rule applies in criminal cases where a demurrer to evidence is granted. As held in the case of People v. Sandiganbayan:

The demurrer to evidence in criminal cases, such as the one at bar, is "filed after the prosecution had rested its case," and when the same is granted, it calls "for an appreciation of the evidence adduced by the prosecution and its sufficiency to warrant conviction beyond reasonable doubt, resulting in a dismissal of the case on the merits, tantamount to an acquittal of the accused." Such dismissal of a criminal case by the grant of demurrer to evidence may not be appealed, for to do so would be to place the accused in double-jeopardy. The verdict being one of acquittal, the case ends there. (Italics in the original)

Like any other rule, however, the above-said rule is not absolute. By way of exception, a judgment of acquittal in a criminal case may be assailed in a petition for certiorari under Rule 65 of the Rules of Court upon a clear showing by the petitioner that the lower court, in acquitting the accused, committed not merely reversible errors of judgment but also grave abuse of discretion amounting to lack or excess of jurisdiction or a denial of due process, thus rendering the assailed judgment void. (Emphasis supplied.)

In Sanvicente v. People,24 the Court allowed the review of a decision of the Court of Appeals (CA) which reversed the accused?s acquittal upon demurrer to evidence filed by the accused with leave of court, the CA ruling that the trial court committed grave abuse of discretion in preventing the prosecution from establishing the due execution and authenticity of certain letter marked therein as Exhibit "LL," which supposedly "positively identified therein petitioner as the perpetrator of the crime charged." The Court, in a petition for certiorari, sustained the CA?s power to review the order granting the demurrer to evidence, explaining thus:

Under Rule 119, Section 23 of the Revised Rules of Criminal Procedure, as amended, the trial court may dismiss the action on the ground of insufficiency of evidence upon a demurrer to evidence filed by the accused with or without leave of court. In resolving accused?s demurrer to evidence, the court is merely required to ascertain whether there is competent or sufficient evidence to sustain the indictment or support a verdict of guilt.

The grant or denial of a demurrer to evidence is left to the sound discretion of the trial court and its ruling on the matter shall not be disturbed in the absence of a grave abuse of discretion. Significantly, once the court grants the demurrer, such order amounts to an acquittal and any further prosecution of the accused would violate the constitutional proscription on double jeopardy. This constitutes an exception to the rule that the dismissal of a criminal case made with the express consent of the accused or upon his own motion bars a plea of double jeopardy. The finality-of-acquittal rule was stressed thus in People v. Velasco:

The fundamental philosophy highlighting the finality of an acquittal by the trial court cuts deep into the "humanity of the laws and in jealous watchfulness over the rights of the citizens, when brought in unequal contest with the State xxx. Thus Green expressed the concern that "(t)he underlying idea, one that is deeply ingrained in at least the Anglo-American system of jurisprudence, is that the State with all its resources and power should not be allowed to make repeated attempts to convict an individual for an alleged offense thereby subjecting him to embarrassment, expense and ordeal and compelling him to live in a continuing state of anxiety and insecurity, as well as enhancing the possibility that even though innocent, he may be found guilty."

It is axiomatic that on the basis of humanity, fairness and justice, an acquitted defendant is entitled to the right of repose as a direct consequence of the finality of his acquittal. The philosophy underlying this rule establishing the absolute nature of acquittals is "part of the paramount importance criminal justice system attaches to the protection of the innocent against wrongful conviction." The interest in the finality-of-acquittal rule, confined exclusively to verdicts of not guilty, is easy to understand: it is a need for "repose", a desire to know the exact extent of one?s liability. With this right of repose, the criminal justice system has built in a protection to insure that the innocent, even those whose innocence rests upon a jury?s leniency, will not be found guilty in a subsequent proceeding.

Given the far-reaching scope of an accused?s right against double jeopardy, even an appeal based on an alleged misappreciation of evidence will not lie. The only instance when double jeopardy will not attach is when the trial court acted with grave abuse of discretion amounting to lack or excess of jurisdiction, such as where the prosecution was denied the opportunity to present its case or where the trial was a sham. However, while certiorari may be availed of to correct an erroneous acquittal, the petitioner in such an extraordinary proceeding must clearly demonstrate that the trial court blatantly abused its authority to a point so grave as to deprive it of its very power to dispense justice. (Emphasis supplied.)

By this time, it is settled that the appellate court may review dismissal orders of trial courts granting an accused?s demurrer to evidence. This may be done via the special civil action of certiorari under Rule 65 based on the ground of grave abuse of discretion, amounting to lack or excess of jurisdiction. Such dismissal order, being considered void judgment, does not result in jeopardy. Thus, when the order of dismissal is annulled or set aside by an appellate court in an original special civil action via certiorari, the right of the accused against double jeopardy is not violated.

Unfortunately, what petitioner People of the Philippines, through then Secretary of Justice Teofisto T. Guingona, Jr. and then Solicitor General Silvestre H. Bello, III, filed with the Court in the present case is an appeal by way of a petition for review on certiorari under Rule 45 raising a pure question of law, which is different from a petition for certiorari under Rule 65.

In Madrigal Transport Inc. v. Lapanday Holdings Corporation,25 we have enumerated the distinction between the two remedies/actions, to wit:

Appeal and Certiorari Distinguished

Between an appeal and a petition for certiorari, there are substantial distinctions which shall be explained below.

As to the Purpose. Certiorari is a remedy designed for the correction of errors of jurisdiction, not errors of judgment. In Pure Foods Corporation v. NLRC, we explained the simple reason for the rule in this light:

"When a court exercises its jurisdiction, an error committed while so engaged does not deprive it of the jurisdiction being exercised when the error is committed. If it did, every error committed by a court would deprive it of its jurisdiction and every erroneous judgment would be a void judgment. This cannot be allowed. The administration of justice would not survive such a rule. Consequently, an error of judgment that the court may commit in the exercise of its jurisdiction is not correct[a]ble through the original civil action of certiorari."

The supervisory jurisdiction of a court over the issuance of a writ of certiorari cannot be exercised for the purpose of reviewing the intrinsic correctness of a judgment of the lower court — on the basis either of the law or the facts of the case, or of the wisdom or legal soundness of the decision. Even if the findings of the court are incorrect, as long as it has jurisdiction over the case, such correction is normally beyond the province of certiorari. Where the error is not one of jurisdiction, but of an error of law or fact — a mistake of judgment — appeal is the remedy.

As to the Manner of Filing. Over an appeal, the CA exercises its appellate jurisdiction and power of review. Over a certiorari, the higher court uses its original jurisdiction in accordance with its power of control and supervision over the proceedings of lower courts. An appeal is thus a continuation of the original suit, while a petition for certiorari is an original and independent action that was not part of the trial that had resulted in the rendition of the judgment or order complained of. The parties to an appeal are the original parties to the action. In contrast, the parties to a petition for certiorari are the aggrieved party (who thereby becomes the petitioner) against the lower court or quasi-judicial agency, and the prevailing parties (the public and the private respondents, respectively).

As to the Subject Matter. Only judgments or final orders and those that the Rules of Court so declared are appealable. Since the issue is jurisdiction, an original action for certiorari may be directed against an interlocutory order of the lower court prior to an appeal from the judgment; or where there is no appeal or any plain, speedy or adequate remedy.

As to the Period of Filing. Ordinary appeals should be filed within fifteen days from the notice of judgment or final order appealed from. Where a record on appeal is required, the appellant must file a notice of appeal and a record on appeal within thirty days from the said notice of judgment or final order. A petition for review should be filed and served within fifteen days from the notice of denial of the decision, or of the petitioner?s timely filed motion for new trial or motion for reconsideration. In an appeal by certiorari, the petition should be filed also within fifteen days from the notice of judgment or final order, or of the denial of the petitioner?s motion for new trial or motion for reconsideration.

On the other hand, a petition for certiorari should be filed not later than sixty days from the notice of judgment, order, or resolution. If a motion for new trial or motion for reconsideration was timely filed, the period shall be counted from the denial of the motion.

As to the Need for a Motion for Reconsideration. A motion for reconsideration is generally required prior to the filing of a petition for certiorari, in order to afford the tribunal an opportunity to correct the alleged errors. Note also that this motion is a plain and adequate remedy expressly available under the law. Such motion is not required before appealing a judgment or final order.

Also in Madrigal, we stressed that the special civil action of certiorari and appeal are two different remedies mutually exclusive; they are neither alternative nor successive. Where appeal is available, certiorari will not prosper. In the dismissal of a criminal case upon demurrer to evidence, appeal is not available as such an appeal will put the accused in double jeopardy. Certiorari, however, is allowed.

For being the wrong remedy taken by petitioner People of the Philippines in this case, this petition is outrightly dismissible. The Court cannot reverse the assailed dismissal order of the trial court by appeal without violating private respondent?s right against double jeopardy.

Even assuming that the Court may treat an "appeal" as a special civil action of certiorari, which definitely this Court has the power to do, when there is a clear showing of grave abuse of discretion committed by the lower court, the instant petition will nevertheless fail on the merits as the succeeding discussion will show.

There are actually two (2) acts involved in this case, namely, the warrantless arrest and the warrantless search. There is no question that warrantless search may be conducted as an incident to a valid warrantless arrest. The law requires that there be first a lawful arrest before a search can be made; the process cannot be reversed.26 However, if there are valid reasons to conduct lawful search and seizure which thereafter shows that the accused is currently committing a crime, the accused may be lawfully arrested in flagrante delicto27 without need for a warrant of arrest.

Finding that the warrantless arrest preceded the warrantless search in the case at bar, the trial court granted private respondent’s demurrer to evidence and acquitted him of all the three charges for lack of evidence, because the unlawful arrest resulted in the inadmissibility of the evidence gathered from an invalid warrantless search. The trial court?s ratiocination is quoted as follows:

The threshold issue raised by the accused in his Demurrer to Evidence is whether his warrantless arrest and search were lawful as argued by the prosecution, or unlawful as asserted by the defense.

Under Section 5, Rule 113 of the New Rules of Court, a peace officer may arrest a person without a warrant: (a) when in his presence, the person to be arrested has committed, is actually committing, or is attempting to commit an offense; (b) when an offense has in fact just been committed, and he has personal knowledge of facts indicating that the person to be arrested has committed it, and (c) when the person to be arrested is a prisoner who has escaped from a penal establishment or place where he is serving final judgment or temporarily confined while being transferred from one confinement to another. None of these circumstances were present when the accused was arrested. The accused was merely walking from the Maria Orosa Apartment and was about to enter the parked BMW car when the police officers arrested and frisked him and searched his car. The accused was not committing any visible offense at the time of his arrest. Neither was there an indication that he was about to commit a crime or that he had just committed an offense. The unlicensed AMT Cal.380 9mm Automatic Back-up Pistol that the accused had in his possession was concealed inside the right front pocket of his pants. And the handgun was bantam and slim in size that it would not give an outward indication of a concealed gun if placed inside the pant’s side pocket as was done by the accused. The arresting officers had no information and knowledge that the accused was carrying an unlicensed handgun, nor did they see him in possession thereof immediately prior to his arrest.

Ditto on the 32 bags of shabu and the other unlicensed Daewoo Cal. 9mm Pistol with magazine that were found and seized from the car. The contraband items in the car were not in plain view. The 32 bags of shabu were in the trunk compartment, and the Daewoo handgun was underneath the driver?s seat of the car. The police officers had no information, or knowledge that the banned articles were inside the car, or that the accused had placed them there. The police officers searched the car on mere suspicion that there was shabu therein.

On this matter, pertinent portions of the testimonies of Police Inspector Cielito Coronel and SP03 Reynaldo are hereunder quoted:

POLICE INSPECTOR CIELITO CORONEL?S TESTIMONY

"PROSECUTOR TO WITNESS: Direct-Examination

Q. Mr. Witness, what was your role or participation in this case?

A. I am one of those responsible for the arrest of the accused.

xxx xxx xxx

Q. Where did you make that arrest, Mr. Witness?

A. The apprehension was made in front of an apartment along Maria Orosa Street, Ermita, Manila.

Q. What date was that when you arrested the accused?

A. It was on May 17, 1996, at about 2:10 a.m.

xxx xxx xxx

Q. What was the reason why you together with other policemen effected the arrest of the accused?

A. We arrested him because of the information relayed to us by one of those whom we have previously apprehended in connection with the delivery of shabu somewhere also in Ermita, Manila.

xxx xxx xxx

Q. When you established that he was somewhere at Maria Orosa, what did you do?

A. We waited for him.

xxx xxx xxx

Q. You yourself, Mr. Witness, where did you position yourself during that time?

A. I was inside a vehicle waiting for the accused to appear.
Q. What about your other companions where were they?
A. They were position in strategic places within the area.
Q. What happened when you and your companions were positioned in that place?
A. That was when the accused arrived.
Q. How many of your approached him.
A. Inspector Margallo, myself and two other operatives.
Q. What happened when you approached the accused, Mr. Witness?
A. We introduced ourselves as police officers and we frisked him and we asked him to open the back compartment of his car.
Q. You said you frisked him, what was the result of that?
A. He was found in possession of one back-up pistol with one loaded magazine and likewise when the compartment was opened several plastic bags containing white crystalline substance suspected to be shabu (were found).
Q. What did you do when you found out Mr. Witness?
A. When the car was further search we later found another firearm, a Daewoo Pistol at the place under the seat of the driver.
Q. Then what happened?
A. He was brought to our headquarters at Mandaluyong for further investigation.
Q. What about the suspected shabu that you recovered, what did you do with that?
A. The suspected shabu that we recovered were forwarded to the NBI for laboratory examination.
Q. Did you come to know the results?
A. It was found positive for methamphetamine hydrochloride. (TSN, pp. 3-8, November 15, 1996).
ATTY. LOZANO TO WITNESS: CROSS
Q. You arrested Joseph Junio and Redentor Teck for alleged transporting of shabu on May 16, 1996, at 11:00 p.m., is it not?
A. Yes, Sir.
Q. You asked Redentor Teck where he is employed, is it not?
A. Yes, Sir.
xxx xxx xxx
Q. Redentor Teck told you that he is a talent manager at the Glenmore Modeling Agency, is it not?
A. Yes, Sir.
.Q. The Glenmore Modeling Agency is owned by Lawrence Wang, is it not?
A. I supposed, Sir.
Q. And that is why immediately after Redentor Teck told you that he is an employee of the Glenmore Modeling Agency owned by Lawrence Wang, naturally, you and your companions look for Lawrence Wang to shed light on the transporting of shabu by Redentor Teck and Joseph Junio, is it not?
A. Yes, Sir.
Q. Thereafter, you spotted a person previously described by Redentor Teck as Lawrence Wang, is it not?
A. Yes, Sir.
Q. While you were arresting Lawrence Wang, your companions at the same time searched the BMW car described in your affidavit of arrest, is it not?
A. Yes, Sir.
xxx xxx xxx
Q. Lawrence Wang was not inside the BMW car while the same was searched, is it not?
A. He was outside, Sir.
Q. The driver of the car was inside the car when the arrest and search were made, is it not?
A. He was likewise outside, Sir.
Q. Lawrence Wang did resist arrest and search is it not?
A. Yes, Sir.
Q. When you effected the arrest, there was no warrant of arrest, is it not?
A. Yes, Sir.
Q. When the search was made on the BMW car, there was no search warrant, is it not?
A. Yes, none, Sir. (TSN, pp. 3-12, November 15, 1996)
SPO3 REYNALDO CRISTOBAL?S TESTIMONY
PROSECUTOR TO WITNESS: DIRECT EXAMINATION
Q. What is you role or participation in this case?
A. I was one of the arresting officers and investigator, Sir.
xxx xxx xxx
Q. What kind of specific offense did the accused allegedly do so that you arrested him, Mr. Witness?
A. He was arrested on the basis of the recovered drugs in his possession placed inside his car.
xxx xxx xxx
Q. Mr. witness, you said that you recovered drug from the car of the accused, please tell us the antecedent circumstances which led you to recover or confiscate these items?
A. Earlier in the evening about 11:00 p.m. of May 16, we arrested one Redentor Teck and Joseph Junio.
COURT: Where did you arrest these people?
A They were arrested in Metro Manila also.
COURT: The same date?
A. May 16, about 11:00 p.m. They were arrested and when they were investigated, Teck mentioned the name of Lawrence Wang as his employer.
COURT: Why were these people, arrested?
A. For violation of R.A. 6425.
COURT: How were they arrested?
A. They were arrested while in the act of transporting shabu or handling shabu to another previously arrested person. It was a series of arrest.
COURT: So, this involved a series of operation?
A. Yes, Your Honor. About 11:00 p.m. of May 16, we arrested three (3) persons, SPO2 Vergel de Dios, a certain Arellano and a certain Rogelio Noble. When they were arrested they divulged the name of the source.
COURT: They were arrested for what, for possession?
A. Yes, Your Honor. For unlawful possession of shabu . Then they divulged to us the name of the person from whom they get shabu.
COURT: Whose name did they mention:
A. One Alias Frank, who turned out to be Redentor Teck and Joseph Junio. We let them call Redentor Teck and Joseph Junio thru the cellphone and pretend and to order another supply of shabu.
COURT: So there was an entrapment?
A. Yes, Your Honor.
COURT: So, these two (2) were arrested?
A. While they were about to hand over another bag of shabu to Noble and company.
COURT: And these two reveals (revealed) some information to you as to the source of the shabu?
A. Yes, Your Honor.
COURT: What was the information?
A. Teck told us that he is an employee of Lawrence Wang.
COURT: What did you do when you were told about that?
A. They also told us that there was an ongoing delivery of shabu on that morning.
COURT: When?
A. Of that date early morning of May 17, 1996.
COURT: At what place?
A. We asked them where we could find Lawrence Wang and Teck lead us to Maria Orosa Apartment where we conducted a stake out which lasted up to 2:00 a.m.
xxx xxx xxx
COURT: What happened during the stake out?
A. When the person of the accused was identified to us, we saw him opening his car together with his driver.
COURT: So, he was about to leave when you saw him?
A. Probably, Sir.
COURT: What did you do?
A. We saw him opened his car and we have a suspicion that there was a shabu inside the compartment of the car.
xxx xxx xxx
COURT: All right, when you saw the accused opened his car, what did you do?
A. We approached him.
COURT: What happened when you approached him?
A. We suspected the shabu inside the compartment of his car.
COURT: And this shabu that you saw inside the compartment of the car, what did you do with that?
A. Well, he was first arrested by Captain Margallo and Lt. Coronel while I was the one who inspected and opened the compartment of the car and saw the shabu. (TSN, pp. 15-24, December 16, 1996).
CLARIFICATORY QUESTIONING OF SPO3 CRISTOBAL BY THE COURT
COURT: From your testimony and that of Police Inspector Cielito Coronel, this Court has gathered that prior to the arrest of the accused there were three (3) men that your team arrested. One of whom is a police officer.
A: Yes, Sir.
xxx xxx xxx
COURT: And on the occasion of the arrest of these three men shabu were confiscated from them?
A: Yes, Sir.
Q: And in the course of the investigation of these three men, you were able to discover that Redentor Teck and Joseph Junio were the source of the regulated drug that were confiscated from the three men that you have arrested?
A: Yes, Sir.
Q: Now, thru entrapment base[d] on your testimony you were able to apprehend also these two men, Redentor Teck and Joseph Junio?
A: Yes, Sir.
xxx xxx xxx
Q: These two men, Redentor Teck and Joseph Junio they were also investigated by your team?
A: Yes, Sir.
Q: You were present while they were investigated?
A: I was the one whom investigated them.
xxx xxx xxx
Q: Did you ask Redentor and Joseph the source of shabu that you confiscated from them at the time of the (their) arrest?
A: Yes, Sir. They refuse to say the source, however, they told me that they were working for the accused.
Q: You also testified that Redentor informed you that there was another delivery of shabu scheduled that morning of (stop) was it May 16 or 17? The other delivery that is scheduled on?
A: On the 17th.
xxx xxx xxx
Q: Did he tell you who was to make the delivery?
A: No, Sir.
xxx xxx xxx
Q: At that time when you decided to look for the accused to ask him to shed light on the matter concerning the arrest of these two employees in possession of shabu. Did you and did your team suspect the accused as being involved in the transaction that lead (led) to the arrest of Redentor and Joseph?
A: Yes, Sir. We suspected that he was the source of the shabu.
xxx xxx xxx
Q: When you saw the accused walking towards his car, did you know whether he was carrying a gun?
A: No, Sir. It cannot be seen.
Q: It was concealed?
A: Yes, Sir.
Q: So, the only time that you and your team learned that he was in possession of the gun is when he was bodily search?
A: Yes, Sir. That is the only time that I came to know about when Capt. Margallo handed to me the gun.
Q: Other than walking towards his car, the accused was not doing anything else?
A: None, Sir.
Q: That would invite your suspicion or give indication that he was intending to do something unlawful or illegal?
A: No, Sir.
Q: When you searched the car, did the accused protest or try to prevent your team from searching his car?
A: No, Sir." (TSN pp. 3-16, Feb. 26, 1997)
Clearly therefore, the warrantless arrest of the accused and the search of his person and the car were without probable cause and could not be licit. The arrest of the accused did not fall under any of the exception to the requirements of warrantless arrests, (Sec. 5, Rule 113, Rules of Court) and is therefore, unlawful and derogatory of his constitutional right of liberty. x x x
The trial court resolved the case on the basis of its findings that the arrest preceded the search, and finding no basis to rule in favor of a lawful arrest, it ruled that the incidental search is likewise unlawful. Any and all pieces of evidence acquired as a consequence thereof are inadmissible in evidence. Thus, the trial court dismissed the case for lack of evidence.
Contrary to its position at the trial court, the People, however, now posits that "inasmuch as it has been shown in the present case that the seizure without warrant of the regulated drugs and unlicensed firearms in the accused?s possession had been validly made upon probable cause and under exigent circumstances, then the warrantless arrest of the accused must necessarily have to be regarded as having been made on the occasion of the commission of the crime in flagrante delicto, and therefore constitutionally and statutorily permissible and lawful."28 In effect, the People now contends that the warrantless search preceded the warrantless arrest. Since the case falls under an exception to the general rule requiring search warrant prior to a valid search and seizure, the police officers were justified in requiring the private respondent to open his BMW car?s trunk to see if he was carrying illegal drugs.
The conflicting versions as to whether the arrest preceded the search or vice versa, is a matter of credibility of evidence. It entails appreciation of evidence, which may be done in an appeal of a criminal case because the entire case is thrown open for review, but not in the case of a petition for certiorari where the factual findings of the trial court are binding upon the Court. Since a dismissal order consequent to a demurrer to evidence is not subject to appeal and reviewable only by certiorari, the factual finding that the arrest preceded the search is conclusive upon this Court. The only legal basis for this Court to possibly reverse and set aside the dismissal order of the trial court upon demurrer to evidence would be if the trial court committed grave abuse of discretion in excess of jurisdiction when it ruled that there was no legal basis to lawfully effect a warrantless arrest.
The pertinent provisions of Rule 113 of the Rules on Criminal Procedure on warrantless arrest provide:
Sec. 5. Arrest without warrant; when lawful. – A peace officer or a private person may, without a warrant, arrest a person:

a) When, in his presence, the person to be arrested has committed, is actually committing, or is attempting to commit an offense;
b) When an offense has just been committed, and he has probable cause to believe based on personal knowledge of facts or circumstances that the person to be arrested has committed it; and
c) When the person to be arrested is a prisoner who has escaped from a penal establishment or place where he is serving final judgment or is temporarily confined while his case is pending, or has escaped while being transferred from one confinement to another.

Section 5, above, provides three (3) instances when warrantless arrest may be lawfully effected: (a) arrest of a suspect in flagrante delicto; (b) arrest of a suspect where, based on personal knowledge of the arresting officer, there is probable cause that said suspect was the author of a crime which had just been committed; (c) arrest of a prisoner who has escaped from custody serving final judgment or temporarily confined while his case is pending.
For a warrantless arrest of an accused caught in flagrante delicto under paragraph (a) of Section 5 to be valid, two requisites must concur: (1) the person to be arrested must execute an overt act indicating that he has just committed, is actually committing, or is attempting to commit a crime; and (2) such overt act is done in the presence or within the view of the arresting officer.29
The facts and circumstances surrounding the present case did not manifest any suspicious behavior on the part of private respondent Lawrence Wang that would reasonably invite the attention of the police. He was merely walking from the Maria Orosa Apartment and was about to enter the parked BMW car when the police operatives arrested him, frisked and searched his person and commanded him to open the compartment of the car, which was later on found to be owned by his friend, David Lee. He was not committing any visible offense then. Therefore, there can be no valid warrantless arrest in flagrante delicto under paragraph (a) of Section 5. It is settled that "reliable information" alone, absent any overt act indicative of a felonious enterprise in the presence and within the view of the arresting officers, is not sufficient to constitute probable cause that would justify an in flagrante delicto arrest.30
Neither may the warrantless arrest be justified under paragraph (b) of Section 5. What is clearly established from the testimonies of the arresting officers is that Wang was arrested mainly on the information that he was the employer of Redentor Teck and Joseph Junio who were previously arrested and charged for illegal transport of shabu. Teck and Junio did not even categorically identify Wang to be their source of the shabu they were caught with in flagrante delicto. Upon the duo?s declaration that there will be a delivery of shabu on the early morning of the following day, May 17, which is only a few hours thereafter, and that Wang may be found in Maria Orosa Apartment along Maria Orosa Street, the arresting officers conducted "surveillance" operation in front of said apartment, hoping to find a person which will match the description of one Lawrence Wang, the employer of Teck and Junio. These circumstances do not sufficiently establish the existence of probable cause based on personal knowledge as required in paragraph (b) of Section 5.
And doubtless, the warrantless arrest does not fall under paragraph (c) of Section 5.
The inevitable conclusion, as correctly made by the trial court, is that the warrantless arrest was illegal. Ipso jure, the warrantless search incidental to the illegal arrest is likewise unlawful.
In People v. Aminnudin,31 the Court declared as inadmissible in evidence the marijuana found in appellant?s possession during a search without a warrant, because it had been illegally seized, in disregard of the Bill of Rights:
In the case at bar, the accused-appellant was not, at the moment of his arrest, committing a crime nor was it shown that he was about to do so or that he had just done so. What he was doing was descending the gangplank of the M/V Wilcon 9 and there was no outward indication that called for his arrest. To all appearances, he was like any of the other passengers innocently disembarking from the vessel. It was only when the informer pointed to him as the carrier of the marijuana that he suddenly became a suspect and so subject to apprehension. It was the fugitive finger that triggered his arrest. The identification of the informer was the probable cause as determined by the officer (and not a judge) that authorized them to pounce upon Aminnudin and immediately arrest him.
The People?s contention that Wang waived his right against unreasonable search and seizure has no factual basis. While we agree in principle that consent will validate an otherwise illegal search, however, based on the evidence on record, Wang resisted his arrest and the search on his person and belongings.32 The implied acquiescence to the search, if there was any, could not have been more than mere passive conformity given under intimidating or coercive circumstances and is thus considered no consent at all within the purview of the constitutional guarantee.33 Moreover, the continuing objection to the validity of the warrantless arrest made of record during the arraignment bolsters Wang?s claim that he resisted the warrantless arrest and search.
We cannot close this ponencia without a word of caution: those who are supposed to enforce the law are not justified in disregarding the rights of the individual in the name of order. Order is too high a price for the loss of liberty. As Justice Holmes once said, "I think it is less evil that some criminals should escape than that the government should play an ignoble part." It is simply not allowed in free society to violate a law to enforce another, especially if the law violated is the Constitution itself.34
WHEREFORE, the instant petition is DENIED.
SO ORDERED.
CANCIO C. GARCIAAssociate Justice
WE CONCUR:
REYNATO S. PUNOChief JusticeChairperson

ANGELINA SANDOVAL-GUTIERREZAssociate Justice
RENATO C. CORONAAsscociate Justice
ADOLFO S. AZCUNAAssociate Justice
C E R T I F I C A T I O N
Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court?s Division.
REYNATO S. PUNOChief Justice

Foonotes

1 Penned by Judge Perfecto A.S. Laguio, Jr.; Annex “A” of the petition, Rollo, pp. 41-55.
2 RTC records, p. 2.
3 Id. at 3.
4 Id. at 4.
5 Id. at 36.
6 TSN, February 26, 1997, p. 6.
7 TSN, November 15, 1996, p. 7.
8 Id. at 11.
9 RTC records, p. 45.
10 Id. at 47-49.
11 Id. at 51-76.
12 Id. at 78-85.
13 Id. at 109-115.
14 Original Record, pp. 135-149.
15 Rollo, pp. 8-38.
16 Id. at 57.
17 Id. at 58-60.
18 Id. at 181.
19 Id. at 316-337.
20 Id. at 353.
21 G.R. No. L-31018, June 29, 1973, 51 SCRA 349.
22 G.R. No. L-72670, September 12, 1986, 144 SCRA 43.
23 G.R. No. 158157, September 30, 2005, 471 SCRA 668.
24 441 Phil. 139 (2002).
25 G.R. No. 156067, August 11, 2004, 436 SCRA 123.
26 Malacat v. Court of Appeals, G.R. No. 123595, December 12, 1997, 283 SCRA 159.
27 People v. Claudio, G.R. No. L-72564, April 15, 1988, 160 SCRA 646.
28 Petition, p. 21; Rollo, p. 23.
29 Supra, citing the Concurring Opinion of then Justice, later Chief Justice Artemio V. Panganiban in People v. Doria, supra.
30 People v. Binad Sy Chua, 444 Phil. 757 (2003), citing People v. Molina, G.R. No. 133917, February 19, 2001, 352 SCRA 174.
31 G.R. No. L-74869, July 6, 1988, 163 SCRA 402.
32 TSN, November 15, 1996, p. 11 and December 6, 1995, p. 24.
33 People v. Compacion, 414 Phil. 68 (2001).
34 Supra note 32, at 411.

G.R. No.

SUPREME COURT
Manila

EN BANC

DECISION

February 28, 2007

G.R. No.
, ,
vs.
, .

, J.:

Petitioners, Heirs of Nicolas Jugalbot, represented by their attorney-in-fact Leonila Jugalbot, assail the Decision1 of the Court of Appeals dated October 19, 2005 in CA-G.R. SP No. 81823 where the petitioners? title to the disputed property, as evidenced by Transfer Certificate of Title (TCT) No. E-103, was cancelled and the previous title, TCT No. T-11543, was reinstated in the name of Virginia A. Roa. The appellate court reversed the Decision2 and Resolution3 of the Department of Agrarian Reform Adjudication Board (DARAB) Central Office in DARAB Case No. 7966, affirming the Decision4 of the Provincial Adjudicator and the Order5 denying the motion for reconsideration in DARAB Case No. X (06-1358) filed in Misamis Oriental, for Cancellation of TCT No. E-103, Recovery of Possession and Damages.

On September 28, 1997, an Emancipation Patent (EP) was issued to Nicolas Jugalbot based on the latter?s claim that he was the tenant of Lot 2180-C of the Subdivision plan (LRC) TSD-10465, subject property of the case at bar, with an area of 6,229 square meters, located at Barangay Lapasan, Cagayan de Oro City. The subject property was registered in the name of Virginia A. Roa under Transfer Certificate of Title (TCT) No. T-11543, the same being issued on April 1, 1970 in the name of "Virginia A. Roa married to Pedro N. Roa." The property was originally registered in the name of Marcelino Cabili from whom Virginia A. Roa purchased the same sometime in 1966.6

Nicolas Jugalbot alleged that he was a tenant of the property continuously since the 1950s. On a Certification dated January 8, 1988 and issued by Department of Agrarian Reform (DAR) Team Leader Eduardo Maandig, the subject property was declared to be tenanted as of October 21, 1972 and primarily devoted to rice and corn. On March 1, 1988, the Emancipation Patent was registered with the Register of Deeds and Nicolas Jugalbot was issued TCT No. E-103.7

On August 10, 1998, the heirs of Virginia A. Roa, herein private respondents, filed before the DARAB Provincial Office of Misamis Oriental a Complaint for Cancellation of Title (TCT No. E-103), Recovery of Possession and Damages against Nicolas Jugalbot, docketed as DARAB Case No. X (06-1358).8

On October 23, 1998, a Decision was rendered by the DARAB Provincial Adjudicator dismissing private respondents? complaint and upholding the validity of the Emancipation Patent. Private respondents? motion for reconsideration was denied.9

On appeal, the DARAB Central Office affirmed the Provincial Adjudicator?s decision on the sole ground that private respondents? right to contest the validity of Nicolas Jugalbot?s title was barred by prescription. It held that an action to invalidate a certificate of title on the ground of fraud prescribes after the expiration of one year from the decree of registration.10

On November 10, 2003, the DARAB denied private respondents? motion for reconsideration,11 hence they filed a petition for review before the Court of Appeals which was granted. The appellate court reversed the Decision and Resolution of the DARAB Central Office on four grounds: (1) the absence of a tenancy relationship; (2) lack of notice to Virginia Roa by the DAR; (3) the area of the property which was less than one hectare and deemed swampy, rainfed and kangkong-producing; and (4) the classification of the subject property as residential, which is outside the coverage of Presidential Decree No. 27.

Hence, this petition for review on certiorari under Rule 45.

The sole issue for determination is whether a tenancy relationship exists between petitioners Heirs of Nicolas Jugalbot, and private respondents, Heirs of Virginia A. Roa, under Presidential Decree No. 27. Simply stated, are petitioners de jure tenants of private respondents?

As clearly laid down in Qua v. Court of Appeals12 and subsequently in Benavidez v. Court of Appeals,13 the doctrine is well-settled that the allegation that an agricultural tenant tilled the land in question does not automatically make the case an agrarian dispute. It is necessary to first establish the existence of a tenancy relationship between the party litigants. The following essential requisites must concur in order to establish a tenancy relationship: (a) the parties are the landowner and the tenant; (b) the subject matter is agricultural land; (c) there is consent; (d) the purpose is agricultural production; (e) there is personal cultivation by the tenant; and (f) there is a sharing of harvests between the parties.14

Valencia v. Court of Appeals15 further affirms the doctrine that a tenancy relationship cannot be presumed. Claims that one is a tenant do not automatically give rise to security of tenure. The elements of tenancy must first be proved in order to entitle the claimant to security of tenure. There must be evidence to prove the allegation that an agricultural tenant tilled the land in question. Hence, a perusal of the records and documents is in order to determine whether there is substantial evidence to prove the allegation that a tenancy relationship does exist between petitioner and private respondents. The principal factor in determining whether a tenancy relationship exists is intent.16

Tenancy is not a purely factual relationship dependent on what the alleged tenant does upon the land. It is also a legal relationship, as ruled in Isidro v. Court of Appeals.17 The intent of the parties, the understanding when the farmer is installed, and their written agreements, provided these are complied with and are not contrary to law, are even more important.18

Petitioners allege that they are bona fide tenants of private respondents under Presidential Decree No. 27. Private respondents deny this, citing inter alia, that Virginia A. Roa was not given a notice of coverage of the property subject matter of this case; that Virginia A. Roa and the private respondents did not have any tenant on the same property; that the property allegedly covered by Presidential Decree No. 27 was residential land; that the lot was paraphernal property of Virginia A. Roa; and the landholding was less than seven (7) hectares.

The petition is devoid of merit.

The petitioners are not de jure tenants of private respondents under Presidential Decree No. 27 due to the absence of the essential requisites that establish a tenancy relationship between them.

Firstly, the taking of subject property was done in violation of constitutional due process. The Court of Appeals was correct in pointing out that Virginia A. Roa was denied due process because the DAR failed to send notice of the impending land reform coverage to the proper party. The records show that notices were erroneously addressed and sent in the name of Pedro N. Roa who was not the owner, hence, not the proper party in the instant case. The ownership of the property, as can be gleaned from the records, pertains to Virginia A. Roa. Notice should have been therefore served on her, and not Pedro N. Roa.

Spouses Estonina v. Court of Appeals19 held that the presumption under civil law that all property of the marriage belongs to the conjugal partnership applies only when there is proof that the property was acquired during the marriage. Otherwise stated, proof of acquisition during the marriage is a condition sine qua non for the operation of the presumption in favor of the conjugal partnership.20 In Spouses Estonina, petitioners were unable to present any proof that the property in question was acquired during the marriage of Santiago and Consuelo Garcia. The fact that when the title over the land in question was issued, Santiago Garcia was already married to Consuelo as evidenced by the registration in the name of "Santiago Garcia married to Consuelo Gaza," does not suffice to establish the conjugal nature of the property.21

In the instant case, the Court of Appeals correctly held that the phrase "married to" appearing in certificates of title is no proof that the properties were acquired during the spouses? coverture and are merely descriptive of the marital status of the person indicated therein. The clear import from the certificate of title is that Virginia is the owner of the property, the same having been registered in her name alone, and being "married to Pedro N. Roa" was merely descriptive of her civil status.22 Since no proof was adduced that the property was acquired during the marriage of Pedro and Virginia Roa, the fact that when the title over the land in question was issued, Virginia Roa was already married to Pedro N. Roa as evidenced by the registration in the name of "Virginia A. Roa married to Pedro N. Roa," does not suffice to establish the conjugal nature of the property.

In addition, the defective notice sent to Pedro N. Roa was followed by a DAR certification signed by team leader Eduardo Maandig on January 8, 1988 stating that the subject property was tenanted as of October 21, 1972 and primarily devoted to rice and corn despite the fact that there was no ocular inspection or any on-site fact-finding investigation and report to verify the truth of the allegations of Nicolas Jugalbot that he was a tenant of the property. The absence of such ocular inspection or on-site fact-finding investigation and report likewise deprives Virginia A. Roa of her right to property through the denial of due process.

By analogy, Roxas & Co., Inc. v. Court of Appeals23 applies to the case at bar since there was likewise a violation of due process in the implementation of the Comprehensive Agrarian Reform Law when the petitioner was not notified of any ocular inspection and investigation to be conducted by the DAR before acquisition of the property was to be undertaken. Neither was there proof that petitioner was given the opportunity to at least choose and identify its retention area in those portions to be acquired.24 Both in the Comprehensive Agrarian Reform Law and Presidential Decree No. 27, the right of retention and how this right is exercised, is guaranteed by law.

Since land acquisition under either Presidential Decree No. 27 and the Comprehensive Agrarian Reform Law govern the extraordinary method of expropriating private property, the law must be strictly construed. Faithful compliance with legal provisions, especially those which relate to the procedure for acquisition of expropriated lands should therefore be observed. In the instant case, no proper notice was given to Virginia A. Roa by the DAR. Neither did the DAR conduct an ocular inspection and investigation. Hence, any act committed by the DAR or any of its agencies that results from its failure to comply with the proper procedure for expropriation of land is a violation of constitutional due process and should be deemed arbitrary, capricious, whimsical and tainted with grave abuse of discretion.

Secondly, there is no concrete evidence on record sufficient to establish that Nicolas Jugalbot or the petitioners personally cultivated the property under question or that there was sharing of harvests, except for their self-serving statements. Clearly, there is no showing that Nicolas Jugalbot or any of his farm household cultivated the land in question. No proof was presented except for their self-serving statements that they were tenants of Virginia A. Roa. Independent evidence, aside from their self-serving statements, is needed to prove personal cultivation, sharing of harvests, or consent of the landowner, and establish a tenancy relationship.

Furthermore, in the findings of fact of the Court of Appeals, it was undisputed that Nicolas Jugalbot was a soldier in the United States Army from June 15, 1946 to April 27, 194925 and upon retirement, migrated to the United States and returned to the Philippines sometime in 1998.26 It was established that Jugalbot?s wife Miguela and daughter Lilia P. Jugalbot are residents of 17623 Grayland Avenue, Artesia, California, U.S.A., where Nicolas Jugalbot spent his retirement.27 Thus, the DAR, in particular its team leader Eduardo Maandig, haphazardly issued a certification dated January 8, 1988 that the subject property was tenanted as of October 21, 1972 by Nicolas Jugalbot and primarily devoted to rice and corn without the benefit of any on-site fact-finding investigation and report. This certification became the basis of the emancipation patent and subsequently, TCT No. E-103 issued on March 1, 1988, which was less than two months from the issuance of the unsubstantiated DAR certification. Coincidentally, October 21, 1972 is the date Presidential Decree No. 27 was signed into law.

Neither was there any evidence that the landowner, Virginia A. Roa, freely gave her consent, whether expressly or impliedly, to establish a tenancy relationship over her paraphernal property.

As declared in Castillo v. Court of Appeals,28 absent the element of personal cultivation, one cannot be a tenant even if he is so designated in the written agreement of the parties.29

In Berenguer, Jr. v. Court of Appeals,30 we ruled that the respondents? self-serving statements regarding their tenancy relations could not establish the claimed relationship. The fact alone of working on another?s landholding does not raise a presumption of the existence of agricultural tenancy. Substantial evidence does not only entail the presence of a mere scintilla of evidence in order that the fact of sharing can be established; there must be concrete evidence on record adequate enough to prove the element of sharing.31 We further observed in Berenguer, Jr.:

With respect to the assertion made by respondent Mamerto Venasquez that he is not only a tenant of a portion of the petitioner?s landholding but also an overseer of the entire property subject of this controversy, there is no evidence on record except his own claim in support thereof. The witnesses who were presented in court in an effort to bolster Mamerto?s claim merely testified that they saw him working on the petitioner?s landholding. More importantly, his own witnesses even categorically stated that they did not know the relationship of Mamerto and the petitioner in relation to the said landholding. x x x The fact alone of working on another?s landholding does not raise a presumption of the existence of agricultural tenancy. Other factors must be taken into consideration like compensation in the form of lease rentals or a share in the produce of the landholding involved. (Underscoring supplied)

x x x x

In the absence of any substantial evidence from which it can be satisfactorily inferred that a sharing arrangement is present between the contending parties, we, as a court of last resort, are duty-bound to correct inferences made by the courts below which are manifestly mistaken or absurd. x x x

Without the essential elements of consent and sharing, no tenancy relationship can exist between the petitioner and the private respondents. (Underscoring supplied)32

Bejasa v. Court of Appeals33 likewise held that to prove sharing of harvests, a receipt or any other evidence must be presented as self-serving statements are deemed inadequate. Proof must always be adduced.34 In addition ?

The Bejasas admit that prior to 1984, they had no contact with Candelaria. They acknowledge that Candelaria could argue that she did not know of Malabanan?s arrangement with them. True enough Candelaria disavowed any knowledge that the Bejasas during Malabanan?s lease possessed the land. However, the Bejasas claim that this defect was cured when Candelaria agreed to lease the land to the Bejasas for P20,000.00 per annum, when Malabanan died in 1983. We do not agree. In a tenancy agreement, consideration should be in the form of harvest sharing. Even assuming that Candelaria agreed to lease it out to the Bejasas for P20,000 per year, such agreement did not create a tenancy relationship, but a mere civil law lease.35

Thirdly, the fact of sharing alone is not sufficient to establish a tenancy relationship. In Caballes v. Department of Agrarian Reform,36 we restated the well-settled rule that all the requisites must concur in order to create a tenancy relationship between the parties and the absence of one or more requisites does not make the alleged tenant a de facto tenant as contradistinguished from a de jure tenant. This is so because unless a person has established his status as a de jure tenant he is not entitled to security of tenure nor is he covered by the Land Reform Program of the Government under existing tenancy laws.37 The security of tenure guaranteed by our tenancy laws may be invoked only by tenants de jure, not by those who are not true and lawful tenants.38

As reiterated in Qua,39 the fact that the source of livelihood of the alleged tenants is not derived from the lots they are allegedly tenanting is indicative of non-agricultural tenancy relationship.40

Finally, it is readily apparent in this case that the property under dispute is residential property and not agricultural property. Zoning Certification No. 98-084 issued on September 3, 1998 clearly shows that the subject property Lot 2180-C covered by TCT No. T-11543 with an area of 6,229 square meters and owned by Virginia A. Roa is located within the Residential 2 District in accordance with paragraph (b), Section 9, Article IV of Zoning Ordinance No. 880, Series of 1979 issued by the City Planning and Development Office of Cagayan de Oro City.41 To bolster the residential nature of the property, it must also be noted that no Barangay Agrarian Reform Council was organized or appointed by the DAR existed in Barangay Lapasan, Cagayan de Oro City, as all lands have been classified as residential or commercial, as certified by Barangay Captain of Lapasan.42

In Gonzales v. Court of Appeals,43 we held that an agricultural leasehold cannot be established on land which has ceased to be devoted to cultivation or farming because of its conversion into a residential subdivision. Petitioners were not agricultural lessees or tenants of the land before its conversion into a residential subdivision in 1955. Not having been dispossessed by the conversion of the land into a residential subdivision, they may not claim a right to reinstatement.44

This Court in Spouses Tiongson v. Court of Appeals45 succinctly ruled that the land surrounded by a residential zone is always classified as residential. The areas surrounding the disputed six hectares are now dotted with residences and, apparently, only this case has kept the property in question from being developed together with the rest of the lot to which it belongs. The fact that a caretaker plants rice or corn on a residential lot in the middle of a residential subdivision in the heart of a metropolitan area cannot by any strained interpretation of law convert it into agricultural land and subject it to the agrarian reform program.46

Despite the apparent lack of evidence establishing a tenancy relationship between petitioners and private respondents, the DARAB improperly recognized the existence of such a relationship in complete disregard of the essential requisites under Presidential Decree No. 27. DARAB committed grave abuse of discretion amounting to lack of jurisdiction in issuing an Emancipation Patent to Nicolas Jugalbot.

Once again, Benavidez v. Court of Appeals47 is illustrative in its pronouncement that an alleged agricultural tenant tilling the land does not automatically make the case an agrarian dispute which calls for the application of the Agricultural Tenancy Act and the assumption of jurisdiction by the DARAB. It is absolutely necessary to first establish the existence of a tenancy relationship between the party litigants. In Benavidez, there was no showing that there existed any tenancy relationship between petitioner and private respondent. Thus, the case fell outside the coverage of the Agricultural Tenancy Act; consequently, it was the Municipal Trial Court and not the DARAB which had jurisdiction over the controversy between petitioner and private respondent.48

Verily, Morta, Sr. v. Occidental49 ruled that for DARAB to have jurisdiction over a case, there must exist a tenancy relationship between the parties. In order for a tenancy agreement to take hold over a dispute, it would be essential to establish all the indispensable elements of a landlord-tenant relationship:

The regional trial court ruled that the issue involved is tenancy-related that falls within the exclusive jurisdiction of the DARAB. It relied on the findings in DARAB Case No. 2413 that Josefina Opiana-Baraclan appears to be the lawful owner of the land and Jaime Occidental was her recognized tenant. However, petitioner Morta claimed that he is the owner of the land. Thus, there is even a dispute as to who is the rightful owner of the land, Josefina Opiana-Baraclan or petitioner Morta. The issue of ownership cannot be settled by the DARAB since it is definitely outside its jurisdiction. Whatever findings made by the DARAB regarding the ownership of the land are not conclusive to settle the matter. The issue of ownership shall be resolved in a separate proceeding before the appropriate trial court between the claimants thereof.50

At any rate, whoever is declared to be the rightful owner of the land, the case cannot be considered as tenancy-related for it still fails to comply with the other requirements. Assuming arguendo that Josefina Opiana-Baraclan is the owner, then the case is not between the landowner and tenant. If, however, Morta is the landowner, Occidental cannot claim that there is consent to a landowner-tenant relationship between him and Morta. Thus, for failure to comply with the above requisites, we conclude that the issue involved is not tenancy-related cognizable by the DARAB. 51

In Vda. de Tangub v. Court of Appeals,52 the jurisdiction of the Department of Agrarian Reform is limited to the following: (a) adjudication of all matters involving implementation of agrarian reform; (b) resolution of agrarian conflicts and land tenure related problems; and (c) approval and disapproval of the conversion, restructuring or readjustment of agricultural lands into residential, commercial, industrial and other non-agricultural uses.53

To recapitulate, petitioners are not de jure tenants of Virginia A. Roa, to which Presidential Decree No. 27 is found to be inapplicable; hence, the DARAB has no jurisdiction over this case. The DARAB not only committed a serious error in judgment, which the Court of Appeals properly corrected, but the former likewise committed a palpable error in jurisdiction which is contrary to law and jurisprudence. For all the foregoing reasons, we affirm the appellate court decision and likewise hold that the DARAB gravely abused its discretion amounting to lack of jurisdiction on the grounds that the subject matter of the present action is residential, and not agricultural, land, and that all the essential requisites of a tenancy relationship were sorely lacking in the case at bar.

On one final note, it may not be amiss to stress that laws which have for their object the preservation and maintenance of social justice are not only meant to favor the poor and underprivileged. They apply with equal force to those who, notwithstanding their more comfortable position in life, are equally deserving of protection from the courts. Social justice is not a license to trample on the rights of the rich in the guise of defending the poor, where no act of injustice or abuse is being committed against them.54

As the court of last resort, our bounden duty to protect the less privileged should not be carried out to such an extent as to deny justice to landowners whenever truth and justice happen to be on their side. For in the eyes of the Constitution and the statutes, EQUAL JUSTICE UNDER THE LAW remains the bedrock principle by which our Republic abides.

WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals in CA-G.R. SP No. 81823 promulgated on October 19, 2005 is AFFIRMED. The Register of Deeds of Cagayan de Oro City is ordered to CANCEL Transfer Certificate of Title No. E-103 for having been issued without factual and legal basis, and REINSTATE Transfer Certificate of Title No. T-11543 in the name of Virginia A. Roa. The city Assessor?s Office of Cagayan de Oro is likewise directed to CANCEL Tax Declaration No. 80551 issued to Nicolas Jugalbot and RESTORE Tax Declaration No. 270922 in the name of Virginia Angcod Roa. The heirs of Nicolas Jugalbot, represented by Leonila B. Jugalbot or any other person claiming a right or interest to the disputed lot through the latter?s title are directed to VACATE the premises thereof and peaceably turn over its possession to petitioners Heirs of Virginia A. Roa, represented by Lolita R. Gorospe. No pronouncement as to costs.

SO ORDERED.

CONSUELO YNARES-SANTIAGOAssociate Justice

WE CONCUR:

MA. ALICIA AUSTRIA-MARTINEZAssociate Justice

ROMEO J. CALLEJO, SR.Associate Justice

MINITA V. CHICO-NAZARIOAsscociate Justice

ANTONIO EDUARDO B. NACHURAAssociate Justice

A T T E S T A T I O N

I attest that the conclusions in the above decision were reached in consultation before the case was assigned to the writer of the opinion of the Court?s Division.

CONSUELO YNARES-SANTIAGOAssociate Justice Chairperson, Third Division

C E R T I F I C A T I O N

Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson?s Attestation, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court?s Division.

REYNATO S. PUNOChief Justice

Footnotes

1 Rollo, pp. 28-41. Penned by Associate Justice Rodrigo F. Lim, Jr. and concurred in by Associate Justices Teresita Dy-Liacco Flores and Ramon R. Garcia.

2 Id. at 44-49. Penned by DAR Assistant Secretary Lorenzo R. Reyes, DARAB Vice-Chairman, and concurred in by Undersecretary Federico A. Poblete, Assistant Secretary Augusto P. Quijano, Assistant Secretary Wilfredo M. Peñaflor and Assistant Secretary Edwin C. Sales, Members. DAR Secretary Horacio R. Morales, Jr., Chairman and Undersecretary Conrado S. Navarro, Member, did not take part.

3 Id. at 60-61. Penned by DAR Assistant Secretary Lorenzo R. Reyes, DARAB Vice-Chairman, and concurred in by Undersecretary Rolando G. Mangulabnan, Assistant Secretary Augusto P. Quijano, Assistant Secretary Edgar A. Igano, and Assistant Secretary Rustico T. de Belen, Members. DAR Secretary Roberto M. Pagdanganan, Chairman and Undersecretary Ricardo S. Arlanza, Member, did not take part.

4 Id. at 55-58. Penned by Provincial Adjudicator Leandricia M. Monsanto.

5 Id. at 59. Penned by Adjudicator Abeto A. Salcedo, Jr.

6 Id. at 29-30.

7 Id. at 30.

8 Id.

9 Id. at 31.

10 Id.

11 Id.

12 G.R. No. 95318, June 11, 1991, 198 SCRA 236.

13 G.R. No. 125848, September 6, 1999, 313 SCRA 714.

14 Id. at 719.

15 449 Phil. 711 (2003).

16 Id. at 736.

17 G.R. No. 105586, December 15, 1993, 228 SCRA 503.

18 Id. at 511.

19 334 Phil. 577 (1997).

20 Id. at 586.

21 Id.

22 Rollo, p. 39.

23 G.R. No. 127876, December 17, 1999, 321 SCRA 106.

24 Id. at 147.

25 Rollo, p. 102.

26 Id. at 37.

27 Id.

28 G.R. No. 98028, January 27, 1992, 205 SCRA 529.

29 Id. at 536.

30 G.R. No. L-60287, August 17, 1988, 164 SCRA 431.

31 Id. at 439.

32 Id. at 439-440.

33 G.R. No. 108941, July 6, 2000, 335 SCRA 190.

34 Id. at 199.

35 Id.

36 G.R. No. L-78214, December 5, 1998, 168 SCRA 247.

37 Id. at 254.

38 Philippine National Railways v. Del Valle, G.R. No. L-29381, September 30, 1969, 29 SCRA 573, 580.

39 Supra note 13.
40 Id. at 239-240.
41 Rollo, p. 143.
42 Id. at 145.
43 G.R. No. 36213, June 29, 1989, 174 SCRA 398.
44 Id. at 401.
45 215 Phil. 430 (1984).
46 Id. at 438.
47 Supra note 14.
48 Id. at 719-720.
49 367 Phil. 438 (1999).
50 Id. at 446.
51 Id. at 447.
52 UDK No. 9864, December 3, 1990, 191 SCRA 885.
53 Id. at 889.
54 Roxas & Co., Inc. v. Court of Appeals, supra note 24 at 176. Ynares-Santiago, J., concurring and dissenting.

G.R. No.

SUPREME COURT
Manila

EN BANC

DECISION

February 28, 2007

G.R. No.
, ,
vs.
, .

, J.:

In a Complaint docketed as Civil Case No. 94-70655 for replevin and damages filed with the Regional Trial Court (RTC) of Manila, Branch XVIII, by respondent BPI Family Savings Bank, Inc. (BPI) against petitioners Rodelio and Alicia Poltan, BPI alleged that on 11 November 1991, the petitioners obtained a loan evidenced by a promissory note1 from Mantrade Development Corporation (Mantrade) secured by a chattel mortgage2 over a 1-unit Nissan Sentra Motor Vehicle, more particularly described as follows:

ONE (1) N. SENTRA 1400 4-DOOR SED. IX

MODEL: 1991 with Aircon, Stereo & Magwheels

MOTOR NO.: GA14-440327B

SERIAL NO.: BCAB13-A37402

COLOR: PLATINUM GREEN

On 11 November 1991, Mantrade, with notice to the petitioners, assigned to BPI, by way of a Deed of Assignment,>3 all its rights, title and interest to the promissory note and chattel mortgage. The petitioners defaulted in complying with the terms and conditions of the promissory note and chattel mortgage when they failed to pay five consecutive monthly installments which fell due on 15 January 1994 up to 15 May 1994. BPI demanded4 from the petitioners the whole balance of the promissory note in the amount of P286,540.06, including accrued interest, or to return to BPI the possession of the motor vehicle for the purpose of foreclosure in accordance with the undertaking stated in the chattel mortgage. Petitioners failed and refused to heed said demand. It is specifically provided in the promissory note and chattel mortgage that failure to pay any installment when due shall make the subsequent installments and the entire balance of the obligation due and payable.5 BPI, in its complaint, further prayed for the award of attorney?s fees, liquidated damages and other expenses incurred in connection with the petitioners? failure to pay their balance on the loan.

In their Answer to the Complaint,6 the petitioners did not deny that they purchased the vehicle from Mantrade on installment and the same loan was subsequently assigned to BPI. They disclosed that BPI required them to obtain a motor vehicle insurance policy from FGU Insurance Corporation (FGU Insurance). They had been religiously paying the monthly installments on the vehicle until it figured in an accident where it became a total wreck. Under the terms of the insurance policy from FGU Insurance, the vehicle had to be replaced or its value paid to them. Due to the failure and refusal of FGU Insurance to replace the vehicle or pay its value, the petitioners stopped the payment of the monthly installment.

On the date agreed upon by the parties for the pre-trial of the case, the petitioners failed to appear. Upon motion of BPI, the petitioners were declared as in default and BPI was allowed to present its evidence ex-parte.7 The petitioners filed a Motion for Reconsideration8 which the trial court granted in its Order, dated 27 February 1995.9 When the pre-trial conference was terminated, the trial court set the case for hearing on the merits.10 BPI then filed a motion for judgment on the pleadings contending that the answer of the petitioners failed to tender an issue and admitted the material allegations in the Complaint.11 This was opposed by the petitioners who argued that though they did not specifically deny their outstanding obligation, the amount due was in the form of damages that must be proven by competent and admissible evidence.12

In a Decision13 dated 14 June 1995, the trial court granted the Motion for Judgment on the Pleadings filed by BPI and held:

WHEREFORE, judgment is hereby rendered ordering the defendants to pay, jointly and severally, the plaintiff the sum of P286,540.06 with penalty charges thereon for late payment at the rate of 36% per annum from May 28, 1994, until fully paid, and attorney?s fees in the sum of P10,000.00, plus the costs of this suit.14

The petitioners appealed to the Court of Appeals. In a Decision15 dated 19 May 1997, the Court of Appeals acted favorably on the appeal of the petitioners, set aside the RTC Decision and remanded the case to the trial court for trial on the merits.

On remand, the schedules of hearing of the case as set by the trial court were postponed for several times. The hearing was finally set on 10 January 2000. Again, petitioners, as well as their counsel, failed to appear despite due notice and without just cause. Thus, BPI was allowed to present its evidence ex-parte on 10 January 2000. The trial court then rendered its Decision on 6 April 2000 and held ?

WHEREFORE, judgment is hereby rendered ordering the defendants to pay, jointly and severally, the plaintiff the sum of P286,340.00 with penalty charges thereon for late payment at the rate of 36% per annum from May 20, 1994, until fully paid, and attorney?s fees in an amount equivalent to 25% of the sum due, plus the costs of this suit.16

Aggrieved by the Decision, petitioners again appealed to the Court of Appeals.17 In a Decision, dated 30 June 2004, the Court of Appeals denied the appeal and affirmed in toto the Decision of the trial court.18

Hence, this Petition filed by the petitioners where they raise the following issues:

1. WHETHER OR NOT THE PETITIONERS HAD BEEN UNJUSTLY DEPRIVED BY THE TRIAL COURT A QUO AND THE COURT OF APPEALS OF THEIR CONSTITUTIONAL AND STATUTORY RIGHT TO PROCEDURAL AND SUBSTANTIVE DUE PROCESS OF LAW WHEN THE TRIAL COURT, MOVED BY AN UNFAIR ATTITUDE OF DISCRIMINATION AND UNFAIRNESS, SUDDENLY ALLOWED THE BPI TO PRESENT EVIDENCE EX PARTE ON JANUARY 11, 2000 ? THUS, TOTALLY ELIMINATING THE OPPORTUNITY OF THE PETITIONERS POLTAN TO BE HEARD ? SIMPLY BECAUSE THEIR FORMER LAWYER ATTY. DOMINGO S. CRUZ, WAS ABSENT DURING THAT PARTICULAR HEARING (JANUARY 10, 2000), DESPITE THE FACT THAT THE TRIAL COURT KNEW FROM THE RECORD THAT ATTY. CRUZ HAD BEEN PRESENT IN THE PAST MANY HEARINGS PRIOR TO JANUARY 10, 2000, WHILE THE COUNSEL FOR RESPONDENT HAD BEEN ABSENT IN FOR MANY HEARINGS PRIOR TO JANUARY 10, 2000;

2. WHETHER OR NOT PETITIONERS POLTAN HAD BEEN DEPRIVED OF THEIR CONSTITUTIONAL AND STATUTORY RIGHT TO PROCEDURAL AND SUBSTANTIVE DUE PROCESS OF LAW AS SHOWN BY THE BIASED PATTERN OF BEHAVIOR OF THE PRESIDING JUDGE OF THE TRIAL COURT SINCE 1995, IN THAT, THE PRESIDING JUDGE IN 1995, WITHOUT ANY VALID BASIS AS SHOWN BY THE (FIRST) 1997 DECISION OF THE COURT OF APPEALS (EXHIBIT "H"), ALLOWED A BASELESS MOTION FOR JUDGMENT ON THE PLEADINGS, THUS, DEPRIVING THE PETITIONERS POLTAN OF THEIR RIGHT TO PRESENT EVIDENCE, FOR THE FIRST TIME; AND IN THAT, THE PRESIDING JUDGE IN 2000, FOR THE SECOND TIME, PRESUMABLY IRKED BY THE 1997 APPELLATE REVERSAL, AGAIN DEPRIVED THE PETITIONERS POLTAN OF THEIR RIGHT TO DUE PROCESS OF LAW BY SUDDENLY ALLOWING THE RESPONDENT TO PRESENT EVIDENCE EX PARTE AND BY ISSUING THE QUESTIONED EX PARTE DECISION, WHICH THE COURT OF APPEALS LATER ERRONEOUSLY AFFIRMED IN ITS QUESTIONED DECISION DATED JUNE 30, 2004;

3. WHETHER OR NOT THE PETITIONERS POLTAN HAD BEEN DEPRIVED OF THEIR CONSTITUTIONAL AND STATUTORY RIGHT TO PROCEDURAL AND SUBSTANTIVE DUE PROCESS OF LAW, IN THAT THE UNEXPLAINED GROSS NEGLIGENCE OF THEIR FORMER COUNSEL, ATTY. DOMINGO S. CRUZ, TO APPEAR DURING THE HEARING SET ON JANUARY 10, 2000, DESPITE NOTICE, AND WITHOUT OFFERING AN EXPLANATION TO THE TRIAL COURT OR FILING A MOTION FOR RECONSIDERATION OF THE ORDER, DATED JANUARY 10, 2000, HAD UNJUSTIFIABLY RESULTED IN A GRAVE MISCARRIAGE OF JUSTICE TO THE EXTREME PREJUDICE OF THE PETITIONERS POLTAN, WHO ARE NOW EXPOSED TO THE GREAT AND HIGHLY DETRIMENTAL RISK OF PAYING THE RESPONDENT BPI THE HUGE AMOUNT OF ALMOST TWO MILLION PESOS (P2,000,000.00), IF WE CONSIDER THE TOTALITY AND CURRENT STATUS OF THE JUDGMENT AWARD MADE IN FAVOR OF BPI, WITHOUT AFFORDING THE PETITIONERS POLTAN A FAIR CHANCE AND OPPORTUNITY TO BE HEARD;

4. WHETHER OR NOT THE PETITIONERS POLTAN HAD BEEN DEPRIVED OF THEIR CONSTITUTIONAL AND STATUTORY RIGHT TO PROCEDURAL AND SUBSTANTIVE DUE PROCESS OF LAW WHEN THE TRIAL COURT, AS AFFIRMED BY THE COURT OF APPEALS, ALLOWED ON JANUARY 21, 2000 THE FORMER COUNSEL FOR THE RESPONDENT, I.E., THE LABAGUIS LOYOLA FELIPE ATIENZA SANCHEZ LAW OFFICES, WHICH HAD PREVIOUSLY WITHDRAWN AS COUNSEL FOR RESPONDENT, TO PRESENT EVIDENCE, EX PARTE, AND TO MOVE FOR THE REINSTATEMENT OF THE FIRST QUESTIONED DECISION OF TRIAL COURT (SEE ANNEX J TO J-4 OF THE PETITION) FOR AND IN BEHALF OF THE RESPONDENT BPI;

5. WHETHER OR NOT THE TRIAL COURT HAD THE LAWFUL JURISDICTION AND THE POWER TO HEAR AND DECIDE THE CASE EX PARTE ON THE BASIS OF THE EVIDENCE PRESENTED BY A LAW OFFICE WHICH HAD PREVIOUSLY WITHDRAWN ITS FORMAL APPEARANCE AND THUS HAD LOST ANY LEGAL ROLE, AUTHORITY, STANDING AND RIGHT TO PARTICIPATE IN THE PROCEEDINGS;

6. WHETHER OR NOT THE CONTRACTS PRESENTED IN EVIDENCE, EX PARTE, BY THE RESPONDENT WERE UNJUST AND UNACCEPTABLE CONTRACTS OF ADHESION WHOSE UNCONSCIONABLE TERMS AND CONDITIONS SHOULD BE REJECTED BY THIS HONORABLE COURT, IN THE INTEREST OF EQUITY AND JUSTICE, E.G., THE IMPOSITION OF 36% PENALTY CHARGE PER ANNUM AND 25% ATTORNEY?S FEES, ON THE BASIS ALONE OF A SUDDEN EX PARTE HEARING HELD ON JANUARY 11, 2000;

7. WHETHER OR NOT THE TERMS AND CONDITIONS OF THE COMPREHENSIVE CAR INSURANCE POLICY ISSUED BY FGU INSURANCE CORP., WHICH IS A SISTER COMPANY OF THE RESPONDENT CORPORATION, SHOULD BE DEEMED AS HAVING AUTOMATICALLY AND IPSO FACTO OPERATED IN FAVOR OF THE RESPONDENT BPI, AS THE ASSURED MORTGAGEE, AT THE TIME OF THE TOTAL-WRECK ACCIDENT INVOLVING THE CAR, ABOUT WHICH THE INSURER AND THE SAID ASSURED RESPONDENT BPI HAD BEEN DULY NOTIFIED; AND IF SO, WHETHER SUCH AUTOMATIC OPERATION SHOULD BE DEEMED AS HAVING RESULTED IN THE EXTINGUISHMENT OF THE OBLIGATION OF THE PETITIONERS TO THE RESPONDENT, AS THE ASSURED MORTGAGEE.19

The appeal is not meritorious.

The first three issues may be summed up into whether the allowance of the ex-parte presentation of evidence is proper and whether the petitioners were denied due process.

On the issue of validity of presentation of evidence ex-parte, be it noted that upon the remand of the case to the trial court by the Court of Appeals, both BPI and the petitioners were duly notified of the scheduled date of the hearing of the case by the trial court. At the hearing scheduled on 10 January 2000 where the petitioners were absent and where BPI was allowed to present evidence ex?parte, both parties were given notice that the hearing of the case was scheduled on that date. Specifically, the petitioners were notified through their representative Rizaldy Impi of the scheduled hearing on 10 January 2000.20 This notwithstanding, the petitioners failed to appear. Lest it be forgotten, the case was previously decided based on judgment on the pleadings and the same was elevated to the Court of Appeals which resolved to remand the case to the trial court for further hearing. After the remand of the case, the same was initially set for hearing on 25 January 1999.21 This was postponed upon motion of the counsel of the petitioners22 who moved that the same be reset to 22 February 1999 which the trial court granted.23 The petitioners were again absent on the latter date and they were notified that the hearing was reset to 19 April 1999.24 The hearing scheduled on 19 April 1999 was again reset to 17 May 1999 upon their motion.25 Upon agreement of both parties, the hearing scheduled on 17 May 1999 was reset to 5 July 1999.26 Similarly, both parties again agreed to reset the scheduled hearing of 5 July 1999 to 23 August 1999.27 Then again, the 23 August 1999 schedule was reset to 11 October 1999, likewise, upon agreement of both parties.28 All these negate the claim of denial of due process. The petitioners were given more than ample opportunity to be heard through counsel. The claim of denial of due process is clearly without basis. What the fundamental law prohibits is total absence of opportunity to be heard. When a party has been afforded opportunity to present his side, he cannot feign denial of due process.29

Admittedly, there was a hearing conducted without the presence of the petitioners on 10 January 2000, and BPI was allowed to present evidence ex-parte. BPI adduced in evidence the following:

EXHIBIT A & B ? Promissory Note and Chattel Mortgage

A-1 ? Signature of the defendants;

A-3 ? Acceleration clause to prove the obligation;

A-4 ? Stipulation on Attorney?s fees;

C ? Deed of Assignment;

D ? Demand Letter;

E ? Statement of Account to prove the obligation of the defendants as of the time of the filing of this suit.30

Relative to the fourth and fifth issues raised by the petitioners on the matter of whether the counsel of BPI had adequate authority to represent BPI at the time of the ex-parte presentation of evidence in view of the earlier withdrawal of the said counsel, while it may be true that the counsel of BPI filed before the trial court a notice of withdrawal of appearance on 27 December 1999,31 the same was not acted upon by the trial court. Instead, the withdrawal of appearance of BPI?s counsel was "approved and noted on 31 January 2000.32 Therefore, undoubtedly, when the said former counsel of BPI conducted the ex-parte presentation of evidence on 11 January 2000, he still had authority to do so.

Anent the sixth issue relating to the contract signed by the petitioners being in the nature of a contract of adhesion, the accepted rule is that a contract of adhesion is not per se inefficacious.

A contract of adhesion is defined as one in which one of the parties imposes a ready-made form of contract, which the other party may accept or reject, but which the latter cannot modify. One party prepares the stipulation in the contract, while the other party merely affixes his signature or his "adhesion" thereto, giving no room for negotiation and depriving the latter of the opportunity to bargain on equal footing.33

Contracts of adhesion wherein one party imposes a ready-made form of contract on the other are not entirely prohibited. The one who adheres to the contract is in reality free to reject it entirely; if he adheres, he gives his consent.34 A contract of adhesion is just as binding as ordinary contracts. It is true that this Court had, on occasion, struck down such contracts as being assailable when the weaker party is left with no choice by the dominant bargaining party and is thus completely deprived of the opportunity to bargain effectively. Nevertheless, contracts of adhesion are not prohibited even as the courts remain careful in scrutinizing the factual circumstances underlying each case to determine the respective claims of contending parties on their efficacy.35

The petitioners failed to show that they were under duress or forced to sign the loan documents. They were presumed to have signed the assailed documents with full knowledge of their import.

As held in the case of Lee v. Court of Appeals,36 it is presumed that a person takes ordinary care of his concerns.37 The natural presumption is that one does not sign a document without first informing himself of its contents and consequences. The petitioners obtained a loan evidenced by a promissory note. They admit that they obtained the loan and the due execution of the promissory note. They also admit the due execution of the chattel mortgage and the deed of assignment in favor of BPI.38

We also resolve the seventh issue raised by petitioners in the negative. The petitioners failed to show any provision in the insurance policy or mortgage contract providing that the loss of the mortgaged vehicle extinguishes their principal obligation to BPI. Similarly, the petitioners? contention that their obligation had been extinguished because of the provision in the contract that the proceeds of the insurance policy is for the benefit of the mortgagee is, likewise, unacceptable.

As very well expressed by the Court of Appeals, while it is true that the proceeds from the insurance policy over the mortgaged chattel is for the benefit of BPI,39 this will result in partial or full satisfaction of the obligation only if the insurer pays the mortgagee, BPI, or if the insurance proceeds were paid to BPI. In the case at bar, upon the loss of the vehicle due to total wreck, the petitioners filed a claim under the insurance policy, collected and received the proceeds thereof,40 but did not settle their obligation with BPI which remained outstanding despite the loss of the vehicle.41

Upon the views we have laid, we find that the obligation of the petitioners has been adequately proven, and that it has not been extinguished.

We now hew to the issue of the award of damages.

The trial court, in conformity with the terms of the promissory note, awarded to BPI the amount of P286,340.00 with penalty charges thereon for late payment at the rate of 36% per annum from May 20, 1994, until fully paid, and attorney?s fees in an amount equivalent to 25% of the amount due, plus the costs of this suit.42 This award was affirmed by the Court of Appeals.

In certain cases, a stipulated penalty may be reduced by the courts. This is sanctioned by Article 1229 of the Civil Code, which states:

Art. 1229. The judge shall equitably reduce the penalty when the principal obligation has been partly or irregularly complied with by the debtor. Even if there has been no performance, the penalty may also be reduced by the courts if it is iniquitous or unconscionable.

Equity dictates that we review the amounts of the award, considering the excessive interest rate and the too onerous penalty and the resulting excessive attorney?s fees.43

We underscore the pronouncement of this Court in the case of Ruiz v. Court of Appeals44 regarding interest rates:

We affirm the ruling of the appellate court, striking down as invalid the 10% compounded monthly interest, the 10% surcharge per month stipulated in the promissory notes dated May 23, 1995 and December 1, 1995, and the 1% compounded monthly interest stipulated in the promissory note dated April 21, 1995. The legal rate of interest of 12% per annum shall apply after the maturity dates of the notes until full payment of the entire amount due. Also, the only permissible rate of surcharge is 1% per month, without compounding. We also uphold the award of the appellate court of attorney?s fees, the amount of which having been reasonably reduced from the stipulated 25% (in the March 22, 1995 promissory note) and 10% (in the other three promissory notes) of the entire amount due, to a fixed amount of P50,000.00. However, we equitably reduce the 3% per month or 36% per annum interest present in all four (4) promissory notes to 1% per month or 12% per annum interest.

The foregoing rates of interests and surcharges are in accord with Medel vs. Court of Appeals [299 SCRA 481], Garcia vs. Court of Appeals [167 SCRA 815], Bautista vs. Pilar Development Corporation [312 SCRA 611], and the recent case of Spouses Solangon vs. Salazar [G.R. No. 125944, 29 June 2001]. This Court invalidated a stipulated 5.5% per month or 66% per annum interest on a P500,000.00 loan in Medel and a 6% per month or 72% per annum interest on a P60,000.00 loan in Solangon for being excessive, iniquitous, unconscionable and exorbitant. In both cases, we reduced the interest rate to 12% per annum. We held that while the Usury Law has been suspended by Central Bank Circular No. 905, s. 1982, effective on January 1, 1983, and parties to a loan agreement have been given wide latitude to agree on any interest rate, still stipulated interest rates are illegal if they are unconscionable. Nothing in the said circular grants lenders carte blanche authority to raise interest rates to levels which will either enslave their borrowers or lead to a hemorrhaging of their assets. On the other hand, in Bautista vs. Pilar Development Corp., this Court upheld the validity of a 21% per annum interest on a P142,326.43 loan, and in Garcia vs. Court of Appeals, sustained the agreement of the parties to a 24% per annum interest on an P8,649,250.00 loan. It is on the basis of these cases that we reduce the 36% per annum interest to 12%. An interest of 12% per annum is deemed fair and reasonable. While it is true that this Court invalidated a much higher interest rate of 66% per annum in Medel and 72% in Solangon it has sustained the validity of a much lower interest rate of 21% in Bautista and 24% in Garcia. We still find the 36% per annum interest rate in the case at bar to be substantially greater than those upheld by this Court in the two (2) aforecited cases.

The courts shall reduce equitably liquidated damages,45 whether intended as an indemnity or a penalty, if they are iniquitous or unconscionable.46

The question of whether a penalty is reasonable or iniquitous is addressed to the sound discretion of the courts. To be considered in fixing the amount of penalty are factors such as ? but not limited to ? the type, extent and purpose of the penalty; the nature of the obligation; the mode of the breach and its consequences; the supervening realities; the standing and relationship of the parties; and the like.47

Applying settled jurisprudence in this case, we find that the interest stipulated upon by the parties in the promissory note at the rate of 36% is iniquitous and unconscionable. Consequently, an interest of 12% per annum and an attorney?s fees of P50,000.00 is deemed reasonable.48

Wherefore, premises considered, the Decision of the Court of Appeals dated 30 June 2004, affirming the Decision of trial court, dated 14 June 1995, is Affirmed with the modification that the interest rate be reduced to 12% per annum from 24 May 1994 until fully paid, and the award of attorney?s fees be reduced to P50,000.00. Costs against petitioners.

SO ORDERED.

MINITA V. CHICO-NAZARIOAssociate Justice

WE CONCUR:

CONSUELO YNARES-SANTIAGOAssociate Justice Chairperson

MA. ALICIA AUSTRIA-MARTINEZAssociate Justice

(On leave)ROMEO J. CALLEJO, SR.Asscociate Justice

ANTONIO EDUARDO B. NACHURAAssociate Justice

A T T E S T A T I O N

I attest that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court?s Division.

CONSUELO YNARES-SANTIAGOAssociate JusticeChairperson, Third Division

C E R T I F I C A T I O N

Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson?s Attestation, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court?s Division.

REYNATO S. PUNOChief Justice

Footnotes

1 Records, p. 10.

2 Id. at 12.

3 Id. at 10.

4 Id. at 18.

5 Id. at 10.

6 Id. at 38.

7 Id. at 83.

8 Id. at 88.

9 The 27 February 1995 order reads:

In the interest of substantial justice, and considering that the plaintiff had failed to present its evidence ex-parte on January 18, 1995, at 10:00 a.m., this Court?s order of January 16, 1995, declaring the defendants as in default due to their non-appearance on the scheduled pre-trial of this case, is hereby reconsidered and set aside.

Accordingly, let the pre-trial of this case be set for April 17, 1995, at 9:00 o?clock in the morning and copies of this order furnished the counsels for the parties. In this regard, the counsels for the plaintiff and the defendants are directed to notify their respective clients of the scheduled pre-trial conference. (Id. at 95.)

10 Id. at 106.

11 Id. at 88.

12 Id. at 88 and 127.

13 Penned by Judge Perfecto A.S Laguio , Jr.

14 Records, p. 166.

15 Docketed as CA-G.R. CV No. 50980; penned by then Associate Justice Salome A. Montoya with Associate Justices Eugenio S. Labitoria and Omar U. Amin, concurring; records, p. 226.

16 Records, p. 275.

17 Docketed as CA-G.R. CV No. 66950.

18 Penned by Associate Justice Rebecca De Guia-Salvador with Associate Justices Salvador J. Valdes and Aurora Santiago?Lagman, concurring.

19 Rollo, pp. 255-257.

20 Records, p. 266.

21 Id. at 232.

22 Id. at 235.

23 Id. at 238.

24 Id. at 241.

25 Id. at 245.

26 Id. at 251.

27 Id. at 256.

28 Id. at 258.

29 Development Bank of the Philippines v. Court of Appeals, 362 Phil. 1, 13-14 (1999), cited in Dayrit v. Philippine Bank of Communications, 435 Phil. 120, 126 (2002).
30 TSN, 11 January 2000, p. 6.
31 Records, p. 269.
32 Id. at 269.
33 Philippine Commercial International Bank v. Court of Appeals, 325 Phil. 588, 597 (1996).
34 Ayala Corporation v. Ray Burton Development Corporation, 355 Phil. 475, 497 (1998).
35 Pilipino Telephone Corporation v. Tecson, G.R. No. 156966, 7 May 2004, 428 SCRA 378, 381.
36 426 Phil. 290 (2002).
37 Section 3(d), Rule 131, Rules of Court.
38 Records, pp. 106-107.
39 Rollo, p. 86.
40 Records, p. 106; Id. at 89.
41 Rollo. p. 39.
42 Records, p. 277.
43 Permanent Savings and Loan Bank v. Velarde, G.R. No. 140608, 5 Feb 2007.
44 449 Phil. 419, 433-435 (2003).
45 Art. 2226. Liquidated damages are those agreed upon by the parties to a contract, to be paid in case of breach thereof.
46 Article 2227 of the Civil Code of the Philippines provides:

Art. 2227. Liquidated damages, whether intended as an indemnity or a penalty, shall be equitably reduced if they are iniquitous or unconscionable.

47 Pryce Corporation v. Philippine Amusement and Gaming Corporation, G.R. No. 157480, 6 May 2005, 458 SCRA 164, 182.
48 Ruiz v. Court of Appeals, supra note 44 at 433.

G.R. No.

SUPREME COURT
Manila

EN BANC

DECISION

February 28, 2007

G.R. No.
, ,
vs.
, .

, J.:

Judicial proceedings must end some time. As Justice Malcolm remarked, public policy and sound practice demand that, at the risk of occasional errors, judgments of courts should become final at some definite date fixed by law.1 And once a judgment becomes final and executory, the prevailing party should not be denied the fruits of victory by some subterfuge devised by the losing party.2 So it must be in this long-drawn case which started as a simple suit for ejectment.

In this petition for review on certiorari under Rule 45 of the Rules of Court, petitioner Rosario M. Reyes seeks to nullify and set aside the Decision3 dated January 11, 2002 of the Court of Appeals (CA) in CA-G.R. SP No. 68007, as reiterated in its Resolution4 of May 27, 2002 denying the petitioner?s motion for reconsideration.

From the petition and the comment thereto, with their respective annexes, and other pleadings, the Court gathers the following facts:

The legal dispute between the private parties started when, on June 30, 1980, in the Municipal Trial Court in Cities (MTCC), Davao City, herein private respondent Alsons Development and Investment Corporation (Alsons, for short) filed a complaint5 for unlawful detainer against herein petitioner Rosario M. Reyes. Docketed as Civil Case No. 3781-G, the case was raffled to Branch VII of the court. On February 6, 1985, the trial court came out with its decision6 finding for private respondent Alsons, the petitioner being ordered to pay the former a certain amount until she vacates the Alsons-owned leased commercial building. Other pay items included attorney?s fees and litigation expenses.

On appeal, the Regional Trial Court (RTC) of Davao City, Branch 8 (RTC-Davao-8), in its decision7 in Civil Case No. 17,505 affirmed that of the MTCC.

The RTC?s decision soon become final and executory for petitioner?s failure to interpose a timely appeal therefrom. Private respondent Alsons then moved for the execution of the MTCC decision which the RTC-Davao-8 granted per its order8 of September 20, 1985. Pursuant to the corresponding writ of execution issued, the sheriff levied on two (2) titled lots owned by the petitioner. Following the usual notice and publication required by law, these lots were eventually sold at a public auction to private respondent Alsons as sole and naturally the highest bidder.

The following events and proceedings then transpired:

1) On March 30, 1987, the sheriff issued a provisional certificate of sale in favor of respondent Alsons.

2) Before the lapse of the period of redemption, petitioner filed a complaint before the RTC-Davao (Br. 15) to cancel the provisional certificate of sale issued considering that the alleged combined value of the two (2) lots thus levied and sold exceeded the aggregate amount of the judgment award. The complaint, docketed as Civil Case No. 18980, was dismissed by the RTC on November 2, 1988.9

Petitioner?s appeal from the November 2, 1988 RTC order would, on October 17, 1991, be dismissed by the CA in CA-G.R. CV No. 20189 10 and finally by this Court per its Resolution dated May 27, 199211 in G.R. No. 104572.

3) Meanwhile, or on January 2, 1989, a final certificate of sale12 was issued over the unredeemed two (2) auctioned lots.

4) On February 22, 1993, RTC-Davao-8 ordered the Register of Deeds of Davao City to issue new certificates of title over the two lots in favor of respondent Alsons.

5) On March 12, 1993, the petitioner filed in Civil Case No. 17,505 an omnibus motion to (1) vacate the order dated February 22, 1993; (2) set aside all execution proceedings conducted by the sheriff; and (3) remand the case to the court of origin for execution of its judgment.

Alsons opposed the omnibus motion since the petitioner never questioned the RTC?s lack of jurisdiction to order the execution of the judgment of the trial court.

On September 17, 1993, RTC-Davao – 8 issued an order denying the motion to set aside its order dated February 22, 1993 but granting the desired remand of the case to MTCC VII. However, on October 1, 1993, the court recalled its earlier order to remand and directed the execution of the judgment.13

6. On October 25, 1993, the petitioner interposed a special civil action for certiorari before the CA, docketed thereat as CA-G.R. No. SP-32449, to nullify certain orders, writs and processes issued by RTC Davao-8 in Civil Case No. 17,505. Foremost of these are:

(1) Order of September 20, 198514 directing the execution of the judgment of MTCC VII- Davao; the corresponding writ of execution dated January 5, 1987;

(2) Sheriff?s provisional certificate of sale dated March 30, 1987;

(3) Order dated February 22, 1993 directing the Davao City Registry to cancel petitioner Reyes? two (2) transfer certificates of title;

(4) Order of September 17, 1993, as amended on October 1, 1993, denying petitioner Reyes?s omnibus motion aforestated.

On April 7, 1995, the CA issued a decision15 denying the petition for certiorari on the ground of laches, rationalizing as follows:

However, xxx the case has dragged on more than a decade xxx. The Supreme Court has consistently ruled that a pleading filed under Rule 65 [of the Rules of Court] should be within a reasonable period of time xxx.Thus, petitioner should have raised this question [of whether or not the RTC, acting as court of appellate jurisdiction, is empowered to execute the judgment of the MTCC] within a reasonable time from the date of the issuance of the execution order dated September 20, 1985, the writ of execution dated January 5, 1987 and the sheriff?s provisional certificate of sale dated March 30, 1987. Suffice it to say that eight (8) years does not and cannot fall within the category of "reasonable time." xxx.

To allow the petitioner to successfully question the order issued by the [RTC] would be rewarding her lack of vigilance in pursuing the case. xxx, this Court will not place a premium on apathy and sloth. As the maxim goes xxx The laws aid those who are vigilant not those who sleep on their rights. The petitioner is, thus guilty of laches xxx.

Besides, xxx [T]he properties of the petitioner have already been levied and sold at a public auction; and the corresponding certificates of sale have already been issued xxx.

Furthermore, the Rules of Court xxx are designed to facilitate xxx the expeditious settlement of controversies and, with it, the prompt dispensation of justice xxx. Thus the questioned orders should not be tampered anymore as Rule 39, Section 8 is a procedural rule which should not be interpreted to overturn an order which has long become final and executory and has not been shown to have been made with patent error, and which had it been remanded, would have the same effect anyway, that is, the [MTCC] would also have issued an order of execution, the Sheriff would also have levied on the execution and would have held a public auction to sell the properties. What the petitioner is actually seeking is a delay of the inevitable ?. (Words in bracket and emphasis added.)

7) Petitioner moved for reconsideration but her motion was denied on July 1995.

8) Petitioner then challenged the CA?s ruling in CA-G.R. SP-32449 via a petition for review before this Court, docketed as G.R. No. 121081.16 This petition, however, was denied per our Resolution of August 30, 1995,17 the denial effectively reiterated in another Resolution of November 20, 1995.18

The series of setbacks the petitioner experienced from the RTC, the CA and this Court did not appear to dampen her spirit. For, six (6) years after the Court issued its November 20, 1995 Resolution adverted to, petitioner, in December 2001, went again to the CA, this time in the guise of a petition for annulment of judgment or final orders and resolutions mentioned in his omnibus motion filed on March 12, 1993 in Civil Case No. 17,505 of RTC-Davao-8. The petition was docketed as CA-G.R. SP No. 68007.

On January 11, 2002, the CA issued its herein assailed decision19 dismissing the petition, the dismissal predicated on the interplay of the forum shopping rule and the res judicata doctrine. The fallo of the CA decision reads:

WHEREFORE, premises considered, the instant case is OUTRIGHTLY DISMISSED with a stern warning to petitioner?s counsel that a similar infraction in the future shall be dealt with more severely.

SO ORDERED.

Petitioner?s motion for reconsideration was denied in the appellate court?s equally assailed resolution of May 27, 2002.20

Hence, this recourse by the petitioner on the lone submission that the CA erred in dismissing her petition for annulment of judgment on the ground of forum shopping and res judicata.

Petitioner maintains that the anti-forum-shopping rule cannot be set up against her, absent the elements of litis pendentia. As she puts it:

Based on [my] personal knowledge?there is no other action or proceeding that is pending before the [Court], the [CA] or any tribunal or administrative bodies involving the same issues or subject matter as in this case. This is the only pending case which challenges the assailed Resolutions and Orders of the respondent RTC. Thus, petitioner believes that there is no forum shopping because the elements of litis pendentia are not present. (Words in bracket added)

The contention is not well-taken. It is, to be sure, a strained attempt by the petitioner to resuscitate a lost cause by foisting on the Court a cock-eyed application of the forum shopping rule. Contrary to the petitioner?s appreciation, the prescription against forum shopping contextually operates regardless of whether or not one of the two (2) or more identical suits commenced or claims filed are pending.

The essence of forum shopping is the filing by a party against whom an adverse judgment has been rendered in one forum of another suit other than by appeal or special civil action for certiorari;21 the act of filing of multiple suits involving the same parties for the same cause of action, either simultaneously or successively for the purpose of obtaining a favorable judgment.22 Forum shopping exists where the elements of litis pendentia are present or where a final judgment in one case will amount to res judicata in the action under consideration. 23

In CA-G.R. SP No. 68007, the decision in which is the subject of the present recourse, the petitioner presented the core issue of lack of jurisdiction of the RTC to enforce the judgment of the MTCC in its Civil Case No. 3781-G. It is the same issue she earlier raised in CA-G.R. SP No. 32449 and which the appellate court dismissed via its decision24 of April 7, 1995. And as may be recalled, the Court veritably wrote finis to the jurisdictional issue when it resolved to affirm the dismissal action of the CA.25

Upon the foregoing perspective, private respondent Alsons is correct in saying that the petition for annulment of judgment is barred by res judicata as all the elements of this preclusive doctrine are present, to wit: 1) there is a final judgment or order on the merits; 2) the court rendering it has jurisdiction over the subject matter and the parties; and 3) there is between the two cases identity or parties, subject matter and causes of action.26

It is petitioner?s submission that the element of identity of causes of action does not, under the premises, obtain because the petition in CA-G.R. SP No. 32449 is for certiorari under Rule 65 of the Rules of Court, whereas CA-G.R. SP No. 68007 is a petition for annulment of judgment under Rule 47 of the Rules based on lack of jurisdiction. Petitioner?s posture is untenable. As earlier explained, the identicality of the issues raised in both cases is unmistakable. The same relief is in fact sought in both cases, i.e., to annul the orders, writs and processes issued by RTC-Davao-8 to enforce the decision of the MTCC in Civil Case No. 3781-G. The differing designations of the petitions thus filed, i.e., certiorari for the first, and for annulment of judgment for the second, are really of no moment. For, it is not the caption of the pleading but the allegations therein made that determine the nature of the action and the court shall grant relief warranted by the allegations.27

Accordingly, we accord concurrence to the following observations of the CA:

The Court, through its former Fourteenth Division, denied [in CA G.R. SP No. 32449] the petition finding laches on the part of the petitioner having filed the petition more than eight (8) years from the accrual of her cause of action. The Court also reasoned out that to order the remand of the case to the court of origin would not serve the best interest of justice considering that execution was already effected at the level of public respondent and that the MTCC would, just the same, order the execution of the same judgment.

After almost seven (7) years from the time the Court?s decision in CA-G.R. SP No. 32449 was promulgated, the same petitioner is again ? assailing the same Orders, writs and processes but this time through a petition for annulment of judgment, final orders and resolution under Rule 47 of the 1997 Rules of Civil Procedure.

This is clearly forum-shopping and a devious disregard of the principle of res judicata.

xxx xxx xxx

The xxx propriety of the issuance of the questioned orders, resolutions and writs was already judiciously put to rest by the decision of this Court in CA-G.R. SP No. 32449. As such, it cannot again be passed upon in any proceeding before any court without transgressing the principle of res judicata and the declared policy on forum shopping. And it matters not that the subsequent proceeding is disguised as a different action governed by separate rules. xxx.

Petitioner?s other unmeritorious contention that her petition for annulment of judgment based on lack of jurisdiction is imprescriptible need not detain us long. Section 3, Rule 47 of the Rules of Court provides that an action for annulment of judgment based on lack of jurisdiction may be filed any time, unless laches has, in the meantime, set in.28

To reiterate, the RTC-Davao-8 issued on September 20, 1985 the underlying order29 granting private respondent Alson?s motion for a writ of execution. Petitioner?s challenge against the jurisdiction of the RTC to issue such order came initially in the form of an omnibus motion filed some eight (8) years later in March 1993, followed, after the denial of the omnibus motion, by an appeal to the CA in CA-G.R. SP No. 32449. It cannot be over-emphasized that the April 7, 1995 CA?s ruling in CA-G.R. SP No. 32449 declared the petitioner as already precluded, on the ground of laches, from questioning the RTC?s jurisdiction to order the enforcement of the judgment of the MTCC of Davao City. The Court, in its Resolution30 of August 30, 1995 in G.R. No. 121081, agreed with the ratio of the CA?s case disposition and thus affirmed the same.

At bottom, the petitioner had trifled with the inter-related rules and jurisprudence on forum shopping and res judicata all for the purpose of frustrating the satisfaction of a final judgment. In the process, she unduly taxed the manpower and financial resources not only of the judiciary, but those of the prevailing party as well. This loathsome practice cannot be countenanced. Accordingly, the petitioner and her counsel are thus forewarned that any attempt to revive this case in whatever form shall be appropriately dealt with.

WHEREFORE, the instant petition for review is hereby DENIED. This denial is FINAL.

With treble costs against the petitioner.

SO ORDERED.

CANCIO C. GARCIAAssociate Justice

WE CONCUR:

REYNATO S. PUNOChief JusticeChairperson

ANGELINA SANDOVAL-GUTIERREZAssociate Justice

RENATO C. CORONAAsscociate Justice

(ON OFFICIAL LEAVE)ADOLFO S. AZCUNAAssociate Justice

C E R T I F I C A T I O N

Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court?s Division.

REYNATO S. PUNOChief Justice

Footnotes

1 Dy Cay v. Crossfield & O?Brien, 38 Phil. 527 (1918).

2 Rubenito v. Lagata, G.R. No. 140959, December 21, 2004, 447 SCRA 417, citing Nasser v. Court of Appeals, G.R. No. 115829, June 5, 1995, 245 SCRA 20.

3 Penned by Associate Justice Rodrigo V. Cosico, concurred in by Associate Justices Eubulo G. Verzola and Eliezer R. De Los Santos (now both deceased); Rollo, pp. 36-40.

4 Id. at 41.

5 Id. at 42 et seq.

6 Id. at 51 et seq.

7 Id. at 62 et seq.

8 Id. at 66.

9 Id. at 67 et seq.

10 Id. at 116 et seq.

11 Id. at 123.

12 Id. at 70-72.

13 CA Decision in CA-G.R. SP No. 32449, p. 9; id. at 90.

14 Supra note 8.

15 Rollo, pp. 82 et seq.

17 Id. at 144.

18 Id. at 145.

19 Supra note 3.

20 Supra note 4.

21 Heirs of Trinidad de Leon Vda. De Roxas v. Court of Appeals, G.R. No. 138660, February 5, 2004, 422 SCRA 101.

22 Executive Secretary v. Gordon, G.R. No. 134171, November 18, 1998, 298 SCRA 736.

23 Marcopper Mining Corporation v. Solidbank Corporation, G.R. No. 134049, June 17, 2004, 432 SCRA 360, citing cases.

24 Supra note 15.

25 Supra note 17 & note 18.

26 Romero v. Tan, G.R. No. 147570, February 27, 2004, 424 SCRA 108.

27 Solid Homes, Inc. v. Court of Appeals, G.R. No. 108451, April 11, 1997, 271 SCRA 157, citing Ras v. Sua, G.R. No. L-23302, September 25, 1968, 25 SCRA 153.

28 Sec. 3 Period for filing action. – If based on extrinsic fraud, the action [for annulment of judgment] must be filed within four (4) years from its discovery, and if based on lack of jurisdiction, before it is barred by laches or estoppel.

29 Supra note 8.

30 Supra note 17.

G.R. No.

SUPREME COURT
Manila

EN BANC

DECISION

February 28, 2007

G.R. No.
, ,
vs.
, .

, J.:

Before this Court is a Petition for Review on Certiorari under Rule 45 of the 1997 Revised Rules of Civil Procedure seeking to annul and set aside the Decision1 and Resolution2 of the Court of Appeals in CA-G.R. CV No. 60450 entitled, Spouses Jose Lumbao and Proserfina Lumbao v. Spouses Virgilio F. Santos and Esperanza Lati, Spouses Victorino F. Santos and Lagrimas F. Santos, Ernesto F. Santos and Tadeo F. Santos, dated 8 June 2005 and 29 July 2005, respectively, which granted the appeal filed by herein respondents Spouses Jose Lumbao and Proserfina Lumbao (Spouses Lumbao) and ordered herein petitioners Spouses Virgilio F. Santos and Esperanza Lati, Spouses Victorino F. Santos and Lagrimas F. Santos, Ernesto F. Santos and Tadeo F. Santos to reconvey to respondents Spouses Lumbao the subject property and to pay the latter attorney?s fees and litigation expenses, thus, reversing the Decision3 of the Regional Trial Court (RTC) of Pasig City, dated 17 June 1998 which dismissed the Complaint for Reconveyance with Damages filed by respondents Spouses Lumbao for lack of merit.

Herein petitioners Virgilio, Victorino, Ernesto and Tadeo, all surnamed Santos, are the legitimate and surviving heirs of the late Rita Catoc Santos (Rita), who died on 20 October 1985. The other petitioners Esperanza Lati and Lagrimas Santos are the daughters-in-law of Rita.

Herein respondents Spouses Jose Lumbao and Proserfina Lumbao are the alleged owners of the 107-square meter lot (subject property), which they purportedly bought from Rita during her lifetime.

The facts of the present case are as follows:

On two separate occasions during her lifetime, Rita sold to respondents Spouses Lumbao the subject property which is a part of her share in the estate of her deceased mother, Maria Catoc (Maria), who died intestate on 19 September 1978. On the first occasion, Rita sold 100 square meters of her inchoate share in her mother?s estate through a document denominated as "Bilihan ng Lupa," dated 17 August 1979.4 Respondents Spouses Lumbao claimed the execution of the aforesaid document was witnessed by petitioners Virgilio and Tadeo, as shown by their signatures affixed therein. On the second occasion, an additional seven square meters was added to the land as evidenced by a document also denominated as "Bilihan ng Lupa," dated 9 January 1981.5

After acquiring the subject property, respondents Spouses Lumbao took actual possession thereof and erected thereon a house which they have been occupying as exclusive owners up to the present. As the exclusive owners of the subject property, respondents Spouses Lumbao made several verbal demands upon Rita, during her lifetime, and thereafter upon herein petitioners, for them to execute the necessary documents to effect the issuance of a separate title in favor of respondents Spouses Lumbao insofar as the subject property is concerned. Respondents Spouses Lumbao alleged that prior to her death, Rita informed respondent Proserfina Lumbao she could not deliver the title to the subject property because the entire property inherited by her and her co-heirs from Maria had not yet been partitioned.

On 2 May 1986, the Spouses Lumbao claimed that petitioners, acting fraudulently and in conspiracy with one another, executed a Deed of Extrajudicial Settlement,6 adjudicating and partitioning among themselves and the other heirs, the estate left by Maria, which included the subject property already sold to respondents Spouses Lumbao and now covered by TCT No. 817297 of the Registry of Deeds of Pasig City.

On 15 June 1992, respondents Spouses Lumbao, through counsel, sent a formal demand letter8 to petitioners but despite receipt of such demand letter, petitioners still failed and refused to reconvey the subject property to the respondents Spouses Lumbao. Consequently, the latter filed a Complaint for Reconveyance with Damages9 before the RTC of Pasig City.

Petitioners filed their Answer denying the allegations that the subject property had been sold to the respondents Spouses Lumbao. They likewise denied that the Deed of Extrajudicial Settlement had been fraudulently executed because the same was duly published as required by law. On the contrary, they prayed for the dismissal of the Complaint for lack of cause of action because respondents Spouses Lumbao failed to comply with the Revised Katarungang Pambarangay Law under Republic Act No. 7160, otherwise known as the Local Government Code of 1991, which repealed Presidential Decree No. 150810 requiring first resort to barangay conciliation.

Respondents Spouses Lumbao, with leave of court, amended their Complaint because they discovered that on 16 February 1990, without their knowledge, petitioners executed a Deed of Real Estate Mortgage in favor of Julieta S. Esplana for the sum of P30,000.00. The said Deed of Real Estate Mortgage was annotated at the back of TCT No. PT-81729 on 26 April 1991. Also, in answer to the allegation of the petitioners that they failed to comply with the mandate of the Revised Katarungang Pambarangay Law, respondents Spouses Lumbao said that the Complaint was filed directly in court in order that prescription or the Statute of Limitations may not set in.

During the trial, respondents Spouses Lumbao presented Proserfina Lumbao and Carolina Morales as their witnesses, while the petitioners presented only the testimony of petitioner Virgilio.

The trial court rendered a Decision on 17 June 1998, the dispositive portion of which reads as follows:

Premises considered, the instant complaint is hereby denied for lack of merit.

Considering that [petitioners] have incurred expenses in order to protect their interest, [respondents spouses Lumbao] are hereby directed to pay [petitioners], to wit: 1) the amount of P30,000.00 as attorney?s fees and litigation expenses, and 2) costs of the suit.11

Aggrieved, respondents Spouses Lumbao appealed to the Court of Appeals. On 8 June 2005, the appellate court rendered a Decision, thus:

WHEREFORE, premises considered, the present appeal is hereby GRANTED. The appealed Decision dated June 17, 1998 of the Regional Trial Court of Pasig City, Branch 69 in Civil Case No. 62175 is hereby REVERSED and SET ASIDE. A new judgment is hereby entered ordering [petitioners] to reconvey 107 square meters of the subject [property] covered by TCT No. PT-81729 of the Registry of Deeds of Pasig City, Metro Manila, and to pay to [respondents spouses Lumbao] the sum of P30,000.00 for attorney?s fees and litigation expenses.

No pronouncement as to costs.12

Dissatisfied, petitioners filed a Motion for Reconsideration of the aforesaid Decision but it was denied in the Resolution of the appellate court dated 29 July 2005 for lack of merit.

Hence, this Petition.

The grounds relied upon by the petitioners are the following:

I. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR IN REVERSING THE DECISION OF THE TRIAL COURT, THEREBY CREATING A VARIANCE ON THE FINDINGS OF FACTS OF TWO COURTS.

II. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR IN ORDERING THE PETITIONERS TO RECONVEY THE SUBJECT [PROPERTY] TO THE RESPONDENTS [SPOUSES LUMBAO] AND IN NOT RULING THAT THEY ARE GUILTY OF LACHES, HENCE THEY CANNOT RECOVER THE LOT ALLEGEDLY SOLD TO THEM.

III. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR IN NOT FINDING HEREIN PETITIONER[S] TO BE IN GOOD FAITH IN EXECUTING THE "DEED OF EXTRAJUDICIAL SETTLEMENT" DATED [2 MAY 1986].

IV. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR IN NOT FINDING THAT PETITIONERS ARE NOT LEGALLY BOUND TO COMPLY WITH THE SUPPOSED BILIHAN NG LUPA DATED [17 AUGUST 1979] AND [9 JANUARY 1981] THAT WERE SUPPOSEDLY EXECUTED BY THE LATE RITA CATOC.

V. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR IN NOT FINDING THAT RESPONDENTS [SPOUSES LUMBAO?S] ACTION FOR RECONVEYANCE WITH DAMAGES CANNOT BE SUPPORTED WITH AN UNENFORCEABLE DOCUMENTS, SUCH AS THE BILIHAN NG LUPA DATED [17 AUGUST 1979] AND [9 JANUARY 1981].

VI. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR IN NOT FINDING THAT RESPONDENTS [SPOUSES LUMBAO?S] COMPLAINT FOR RECONVEYANCE IS DISMISSABLE (SIC) FOR NON COMPLIANCE OF THE MANDATE OF [P.D. NO.] 1508, AS AMENDED BY Republic Act No. 7160.

VII. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR IN NOT FINDING THAT RESPONDENTS [SPOUSES LUMBAO] SHOULD BE HELD LIABLE FOR PETITIONERS? CLAIM FOR DAMAGES AND ATTORNEY[?]S FEES.

Petitioners ask this Court to scrutinize the evidence presented in this case, because they claim that the factual findings of the trial court and the appellate court are conflicting. They allege that the findings of fact by the trial court revealed that petitioners Virgilio and Tadeo did not witness the execution of the documents known as "Bilihan ng Lupa"; hence, this finding runs counter to the conclusion made by the appellate court. And even assuming that they were witnesses to the aforesaid documents, still, respondents Spouses Lumbao were not entitled to the reconveyance of the subject property because they were guilty of laches for their failure to assert their rights for an unreasonable length of time. Since respondents Spouses Lumbao had slept on their rights for a period of more than 12 years reckoned from the date of execution of the second "Bilihan ng Lupa," it would be unjust and unfair to the petitioners if the respondents will be allowed to recover the subject property.

Petitioners allege they are in good faith in executing the Deed of Extrajudicial Settlement because even respondents Spouses Lumbao?s witness, Carolina Morales, testified that neither petitioner Virgilio nor petitioner Tadeo was present during the execution of the "Bilihan ng Lupa," dated 17 August 1979 and 9 January 1981. Petitioners affirm that the Deed of Extrajudicial Settlement was published in a newspaper of general circulation to give notice to all creditors of the estate subject of partition to contest the same within the period prescribed by law. Since no claimant appeared to interpose a claim within the period allowed by law, a title to the subject property was then issued in favor of the petitioners; hence, they are considered as holders in good faith and therefore cannot be barred from entering into any subsequent transactions involving the subject property.

Petitioners also contend that they are not bound by the documents denominated as "Bilihan ng Lupa" because the same were null and void for the following reasons: 1) for being falsified documents because one of those documents made it appear that petitioners Virgilio and Tadeo were witnesses to its execution and that they appeared personally before the notary public, when in truth and in fact they did not; 2) the identities of the properties in the "Bilihan ng Lupa," dated 17 August 1979 and 9 January 1981 in relation to the subject property in litigation were not established by the evidence presented by the respondents Spouses Lumbao; 3) the right of the respondents Spouses Lumbao to lay their claim over the subject property had already been barred through estoppel by laches; and 4) the respondents Spouses Lumbao?s claim over the subject property had already prescribed.

Finally, petitioners claim that the Complaint for Reconveyance with Damages filed by respondents Spouses Lumbao was dismissible because they failed to comply with the mandate of Presidential Decree No. 1508, as amended by Republic Act No. 7160, particularly Section 412 of Republic Act No. 7160.

Given the foregoing, the issues presented by the petitioners may be restated as follows:

I. Whether or not the Complaint for Reconveyance with Damages filed by respondents spouses Lumbao is dismissible for their failure to comply with the mandate of the Revised Katarungang Pambarangay Law under R.A. No. 7160.

II. Whether or not the documents known as "Bilihan ng Lupa" are valid and enforceable, thus, they can be the bases of the respondents spouses Lumbao?s action for reconveyance with damages.

III. Whether or not herein petitioners are legally bound to comply with the "Bilihan ng Lupa" dated 17 August 1979 and 9 January 1981 and consequently, reconvey the subject property to herein respondents spouses Lumbao.

It is well-settled that in the exercise of the Supreme Court?s power of review, the court is not a trier of facts and does not normally undertake the re-examination of the evidence presented by the contending parties during the trial of the case considering that the findings of fact of the Court of Appeals are conclusive and binding on the Court.13 But, the rule is not without exceptions. There are several recognized exceptions14 in which factual issues may be resolved by this Court. One of these exceptions is when the findings of the appellate court are contrary to those of the trial court. This exception is present in the case at bar.

Going to the first issue presented in this case, it is the argument of the petitioners that the Complaint for Reconveyance with Damages filed by respondents Spouses Lumbao should be dismissed for failure to comply with the barangay conciliation proceedings as mandated by the Revised Katarungang Pambarangay Law under Republic Act No. 7160. This argument cannot be sustained.

Section 408 of the aforesaid law and Administrative Circular No. 14-9315 provide that all disputes between parties actually residing in the same city or municipality are subject to barangay conciliation. A prior recourse thereto is a pre-condition before filing a complaint in court or any government offices. Non-compliance with the said condition precedent could affect the sufficiency of the plaintiff?s cause of action and make his complaint vulnerable to dismissal on ground of lack of cause of action or prematurity; but the same would not prevent a court of competent jurisdiction from exercising its power of adjudication over the case before it, where the defendants failed to object to such exercise of jurisdiction.16

While it is true that the present case should first be referred to the Barangay Lupon for conciliation because the parties involved herein actually reside in the same city (Pasig City) and the dispute between them involves a real property, hence, the said dispute should have been brought in the city in which the real property, subject matter of the controversy, is located, which happens to be the same city where the contending parties reside. In the event that respondents Spouses Lumbao failed to comply with the said condition precedent, their Complaint for Reconveyance with Damages can be dismissed. In this case, however, respondents Spouses Lumbao?s non-compliance with the aforesaid condition precedent cannot be considered fatal. Although petitioners alleged in their answer that the Complaint for Reconveyance with Damages filed by respondents spouses Lumbao should be dismissed for their failure to comply with the condition precedent, which in effect, made the complaint prematurely instituted and the trial court acquired no jurisdiction to hear the case, yet, they did not file a Motion to Dismiss the said complaint.

Emphasis must be given to the fact that the petitioners could have prevented the trial court from exercising jurisdiction over the case had they filed a Motion to Dismiss. However, instead of doing so, they invoked the very same jurisdiction by filing an answer seeking an affirmative relief from it. Worse, petitioners actively participated in the trial of the case by presenting their own witness and by cross-examining the witnesses presented by the respondents Spouses Lumbao. It is elementary that the active participation of a party in a case pending against him before a court is tantamount to recognition of that court?s jurisdiction and a willingness to abide by the resolution of the case which will bar said party from later on impugning the court?s jurisdiction.17 It is also well-settled that the non-referral of a case for barangay conciliation when so required under the law is not jurisdictional in nature and may therefore be deemed waived if not raised seasonably in a motion to dismiss.18 Hence, herein petitioners can no longer raise the defense of non-compliance with the barangay conciliation proceedings to seek the dismissal of the complaint filed by the respondents Spouses Lumbao, because they already waived the said defense when they failed to file a Motion to Dismiss.

As regards the second issue, petitioners maintain that the "Bilihan ng Lupa," dated 17 August 1979 and 9 January 1981 are null and void for being falsified documents as it is made to appear that petitioners Virgilio and Tadeo were present in the execution of the said documents and that the identities of the properties in those documents in relation to the subject property has not been established by the evidence of the respondents Spouses Lumbao. Petitioners also claim that the enforceability of those documents is barred by prescription of action and laches.

It is the petitioners? incessant barking that the "Bilihan ng Lupa" documents dated 17 August 1979 and 9 January 1981 were falsified because it was made to appear that petitioners Virgilio and Tadeo were present in the executions thereof, and their allegation that even respondents Spouses Lumbao?s witness Carolina Morales proved that said petitioners were not present during the execution of the aforementioned documents. This is specious.

Upon examination of the aforesaid documents, this Court finds that in the "Bilihan ng Lupa," dated 17 August 1979, the signatures of petitioners Virgilio and Tadeo appeared thereon. Moreover, in petitioners? Answer and Amended Answer to the Complaint for Reconveyance with Damages, both petitioners Virgilio and Tadeo made an admission that indeed they acted as witnesses in the execution of the "Bilihan ng Lupa," dated 17 August 1979.19 However, in order to avoid their obligations in the said "Bilihan ng Lupa," petitioner Virgilio, in his cross-examination, denied having knowledge of the sale transaction and claimed that he could not remember the same as well as his appearance before the notary public due to the length of time that had passed. Noticeably, petitioner Virgilio did not categorically deny having signed the "Bilihan ng Lupa," dated 17 August 1979 and in support thereof, his testimony in the cross-examination propounded by the counsel of the respondents Spouses Lumbao is quoted hereunder:

ATTY. CHIU:

Q. Now, you said, Mr. Witness?Virgilio Santos, that you don?t know about this document which was marked as Exhibit "A" for the [respondents spouses Lumbao]?

ATTY. BUGARING:

The question is misleading, your Honor. Counsel premised the question that he does not have any knowledge but not that he does not know.

ATTY. CHIU:

Q. Being? you are one of the witnesses of this document? [I]s it not?

WITNESS:

A. No, sir.

Q. I am showing to you this document, there is a signature at the left hand margin of this document Virgilio Santos, will you please go over the same and tell the court whose signature is this?

A. I don?t remember, sir, because of the length of time that had passed.

Q. But that is your signature?

A. I don?t have eyeglasses? My signature is different.

Q. You never appeared before this notary public Apolinario Mangahas?

A. I don?t remember.20

As a general rule, facts alleged in a party?s pleading are deemed admissions of that party and are binding upon him, but this is not an absolute and inflexible rule. An answer is a mere statement of fact which the party filing it expects to prove, but it is not evidence.21 And in spite of the presence of judicial admissions in a party?s pleading, the trial court is still given leeway to consider other evidence presented.22 However, in the case at bar, as the Court of Appeals mentioned in its Decision, "[herein petitioners] had not adduced any other evidence to override the admission made in their [A]nswer that [petitioners Virgilio and Tadeo] actually signed the [Bilihan ng Lupa dated 17 August 1979] except that they were just misled as to the purpose of the document, x x x."23 Virgilio?s answers were unsure and quibbled. Hence, the general rule that the admissions made by a party in a pleading are binding and conclusive upon him applies in this case.

On the testimony of respondents Spouses Lumbao?s witness Carolina Morales, this Court adopts the findings made by the appellate court. Thus -

[T]he trial court gave singular focus on her reply to a question during cross-examination if the [petitioners Virgilio and Tadeo] were not with her and the vendor [Rita] during the transaction. It must be pointed out that earlier in the direct examination of said witness, she confirmed that [respondents spouses Lumbao] actually bought the lot from [Rita] ("nagkabilihan"). Said witness positively identified and confirmed the two (2) documents evidencing the sale in favor of [respondents spouse Lumbao]. Thus, her subsequent statement that the [petitioners Virgilio and Tadeo] were not with them during the transaction does not automatically imply that [petitioners Virgilio and Tadeo] did not at any time sign as witnesses as to the deed of sale attesting to their mother?s voluntary act of selling a portion of her share in her deceased mother?s property. The rule is that testimony of a witness must be considered and calibrated in its entirety and not by truncated portions thereof or isolated passages therein.24

Furthermore, both "Bilihan ng Lupa" documents dated 17 August 1979 and 9 January 1981 were duly notarized before a notary public. It is well-settled that a document acknowledged before a notary public is a public document25 that enjoys the presumption of regularity. It is a prima facie evidence of the truth of the facts stated therein and a conclusive presumption of its existence and due execution.26 To overcome this presumption, there must be presented evidence that is clear and convincing. Absent such evidence, the presumption must be upheld.27 In addition, one who denies the due execution of a deed where one?s signature appears has the burden of proving that contrary to the recital in the jurat, one never appeared before the notary public and acknowledged the deed to be a voluntary act. Nonetheless, in the present case petitioners? denials without clear and convincing evidence to support their claim of fraud and falsity were not sufficient to overthrow the above-mentioned presumption; hence, the authenticity, due execution and the truth of the facts stated in the aforesaid "Bilihan ng Lupa" are upheld.

The defense of petitioners that the identities of the properties described in the "Bilihan ng Lupa," dated 17 August 1979 and 9 January 1981 in relation to the subject property were not established by respondents Spouses Lumbao?s evidence is likewise not acceptable.

It is noteworthy that at the time of the execution of the documents denominated as "Bilihan ng Lupa," the entire property owned by Maria, the mother of Rita, was not yet divided among her and her co-heirs and so the description of the entire estate is the only description that can be placed in the "Bilihan ng Lupa, dated 17 August 1979 and 9 January 1981" because the exact metes and bounds of the subject property sold to respondents Spouses Lumbao could not be possibly determined at that time. Nevertheless, that does not make the contract of sale between Rita and respondents Spouses Lumbao invalid because both the law and jurisprudence have categorically held that even while an estate remains undivided, co-owners have each full ownership of their respective aliquots or undivided shares and may therefore alienate, assign or mortgage them.28 The co-owner, however, has no right to sell or alienate a specific or determinate part of the thing owned in common, because such right over the thing is represented by an aliquot or ideal portion without any physical division. In any case, the mere fact that the deed purports to transfer a concrete portion does not per se render the sale void. The sale is valid, but only with respect to the aliquot share of the selling co-owner. Furthermore, the sale is subject to the results of the partition upon the termination of the co-ownership.29

In the case at bar, when the estate left by Maria had been partitioned on 2 May 1986 by virtue of a Deed of Extrajudicial Settlement, the 107- square meter lot sold by the mother of the petitioners to respondents Spouses Lumbao should be deducted from the total lot, inherited by them in representation of their deceased mother, which in this case measures 467 square meters. The 107-square meter lot already sold to respondents Spouses Lumbao can no longer be inherited by the petitioners because the same was no longer part of their inheritance as it was already sold during the lifetime of their mother.

Likewise, the fact that the property mentioned in the two "Bilihan ng Lupa" documents was described as "a portion of a parcel of land covered in Tax Declarations No. A-018-01674," while the subject matter of the Deed of Extrajudicial Settlement was the property described in Transfer Certificate of Title (TCT) No. 3216 of the Registry of Deeds of the Province of Rizal in the name of Maria is of no moment because in the "Bilihan ng Lupa," dated 17 August 1979 and 9 January 1981, it is clear that there was only one estate left by Maria upon her death. And this fact was not refuted by the petitioners. Besides, the property described in Tax Declaration No. A-018-01674 and the property mentioned in TCT No. 3216 are both located in Barrio Rosario, Municipality of Pasig, Province of Rizal, and almost have the same boundaries. It is, thus, safe to state that the property mentioned in Tax Declaration No. A-018-01674 and in TCT No. 3216 are one and the same.

The defense of prescription of action and laches is likewise unjustifiable. In an action for reconveyance, the decree of registration is respected as incontrovertible. What is sought instead is the transfer of the property or its title which has been wrongfully or erroneously registered in another person?s name to its rightful or legal owner, or to the one with a better right. It is, indeed, true that the right to seek reconveyance of registered property is not absolute because it is subject to extinctive prescription. However, when the plaintiff is in possession of the land to be reconveyed, prescription cannot set in. Such an exception is based on the theory that registration proceedings could not be used as a shield for fraud or for enriching a person at the expense of another.30

In the case at bar, the right of the respondents Spouses Lumbao to seek reconveyance does not prescribe because the latter have been and are still in actual possession and occupation as owners of the property sought to be reconveyed, which fact has not been refuted nor denied by the petitioners. Furthermore, respondents Spouses Lumbao cannot be held guilty of laches because from the very start that they bought the 107-square meter lot from the mother of the petitioners, they have constantly asked for the transfer of the certificate of title into their names but Rita, during her lifetime, and the petitioners, after the death of Rita, failed to do so on the flimsy excuse that the lot had not been partitioned yet. Inexplicably, after the partition of the entire estate of Maria, petitioners still included the 107-square meter lot in their inheritance which they divided among themselves despite their knowledge of the contracts of sale between their mother and the respondents Spouses Lumbao.

Under the above premises, this Court holds that the "Bilihan ng Lupa" documents dated 17 August 1979 and 9 January 1981 are valid and enforceable and can be made the basis of the respondents Spouses Lumbao?s action for reconveyance. The failure of respondents Spouses Lumbao to have the said documents registered does not affect its validity and enforceability. It must be remembered that registration is not a requirement for validity of the contract as between the parties, for the effect of registration serves chiefly to bind third persons. The principal purpose of registration is merely to notify other persons not parties to a contract that a transaction involving the property had been entered into. Where the party has knowledge of a prior existing interest which is unregistered at the time he acquired a right to the same land, his knowledge of that prior unregistered interest has the effect of registration as to him.31 Hence, the "Bilihan ng Lupa" documents dated 17 August 1979 and 9 January 1981, being valid and enforceable, herein petitioners are bound to comply with their provisions. In short, such documents are absolutely valid between and among the parties thereto.

Finally, the general rule that heirs are bound by contracts entered into by their predecessors-in-interest applies in the present case. Article 131132 of the NCC is the basis of this rule. It is clear from the said provision that whatever rights and obligations the decedent have over the property were transmitted to the heirs by way of succession, a mode of acquiring the property, rights and obligations of the decedent to the extent of the value of the inheritance of the heirs.33 Thus, the heirs cannot escape the legal consequence of a transaction entered into by their predecessor-in-interest because they have inherited the property subject to the liability affecting their common ancestor. Being heirs, there is privity of interest between them and their deceased mother. They only succeed to what rights their mother had and what is valid and binding against her is also valid and binding as against them. The death of a party does not excuse nonperformance of a contract which involves a property right and the rights and obligations thereunder pass to the personal representatives of the deceased. Similarly, nonperformance is not excused by the death of the party when the other party has a property interest in the subject matter of the contract.34

In the end, despite the death of the petitioners? mother, they are still bound to comply with the provisions of the "Bilihan ng Lupa," dated 17 August 1979 and 9 January 1981. Consequently, they must reconvey to herein respondents Spouses Lumbao the 107-square meter lot which they bought from Rita, petitioners? mother. And as correctly ruled by the appellate court, petitioners must pay respondents Spouses Lumbao attorney?s fees and litigation expenses for having been compelled to litigate and incur expenses to protect their interest.35 On this matter, we do not find reasons to reverse the said findings.

WHEREFORE, premises considered, the instant Petition is hereby DENIED. The Decision and Resolution of the Court of Appeals dated 8 June 2005 and 29 July 2005, respectively, are hereby AFFIRMED. Herein petitioners are ordered to reconvey to respondents Spouses Lumbao the subject property and to pay the latter attorney?s fees and litigation expenses. Costs against petitioners.

SO ORDERED.

MINITA V. CHICO-NAZARIOAssociate Justice

WE CONCUR:

CONSUELO YNARES-SANTIAGOAssociate JusticeChairperson

MA. ALICIA AUSTRIA MARTINEZAssociate Justice

On leaveROMEO J. CALLEJO, SR.Asscociate Justice

ANTONIO EDUARDO B. NACHURAAssociate Justice

A T T E S T A T I O N

I attest that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court?s Division.

CONSUELO YNARES-SANTIAGOAssociate JusticeChairperson, Third Division

C E R T I F I C A T I O N

Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson?s attestation, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court?s Division.

REYNATO S. PUNOChief Justice

Foonotes

1 Penned by Associate Justice Martin S. Villarama, Jr. with Associate Justices Lucas P. Bersamin and Lucenito N. Tagle, concurring, rollo, pp. 47-62.

2 Id. at 64.

3 Penned by Judge Ma. Cristina C. Estrada, rollo, pp. 103-114.

4 Id. at 73-74.

5 Id. at 77-78.

6 Id. at 80-82.

7 Id. at 83.

8 Id. at 84-86.

9 Id. at 66-72.

10 A decree, "Establishing a System of Amicably Settling Disputes at the Barangay Level."

11 Rollo, p. 114.

12 Id. at 61.

13 Almendrala v. Ngo, G.R. No. 142408, 30 September 2005, 471 SCRA 311, 322.

14 Recognized exceptions to this rule are: (1) when the findings are grounded entirely on speculation, surmises or conjectures; (2) when the inference made is manifestly mistaken, absurd or impossible; (3) when there is grave abuse of discretion; (4) when the judgment is based on misapprehension of facts; (5) when the finding of facts are conflicting; (6) when in making its findings the Court of Appeals went beyond the issues of the case, or its findings are contrary to the admissions of both the appellee and the appellant; (7) when the findings are contrary to the trial court; (8) when the findings are conclusions without citation of specific evidence on which they are based; (9) when the 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 evidence and contradicted by the evidence on record; or (11) when the Court of Appeals manifestly overlooked certain relevant facts not disputed by the parties, which, if properly considered, would justify a different conclusion [Langkaan Realty Development, Inc. v. United Coconut Planters Bank, G.R. No. 139437, 8 December 2000, 347 SCRA 542; Nokom v. National Labor Relations Commissions, 390 Phil. 1228, 1243 (2000); Commissioner of Internal Revenue v. Embroidery and Garments Industries (Phils.), Inc., 364 Phil. 541, 546-547 (1999); Sta. Maria v. Court of Appeals, 349 Phil. 275, 282-283 (1998); Almendrala v. Ngo, G.R. No. 142408, 30 September 2005, 471 SCRA 311, 322].

15 Guidelines on the Katarungang Pambarangay Conciliation Procedure to Prevent Circumvention of the Revised Katarungang Pambarangay Law [Sections 399-442, Chapter VII, Title I, Book III, R.A. No. 7160,otherwise known as the Local Government Code of 1991] issued by the Supreme Court on 15 July 1993.
16 Royales v. Intermediate Appellate Court, G.R. No. L-65072, 31 January 1984, 127 SCRA 470, 473-474.
17 Sta. Rosa Realty Development Corporation v. Amante, G.R. No. 112526, 16 March 2005, 453 SCRA 432, 477.
18 Bañares II v. Balising, G.R. No. 132624, 13 March 2000, 328 SCRA 36, 50-51.
19 Rollo, pp. 87, 97.
20 TSN, 12 September 1996. Records, pp. 13-14.
21 Atillo III v. Court of Appeals, G.R. No. 119053, 23 January 1997, 266 SCRA 596, 604.
22 Id. at 605.
23 Rollo, p. 55.
24 Id. at 55-56.
25 Rule 132, Section 19(b) of the Revised Rules on Evidence.
26 Id., Section 23 of the Revised Rules on Evidence; Medina v. Greenfield Development Corporation, G.R. No. 140228, 19 November 2004, 443 SCRA 150, 160; Agasen v. Court of Appeals, G.R. No. 115508, 15 February 2000, 325 SCRA 504, 511.
27 Medina v. Greenfield Development Corporation, id.
28 Barcenas v. Tomas, G.R. No. 150321, 31 March 2005, 454 SCRA 593, 610-611.
29 Heirs of the Late Spouses Aurelio and Esperanza Balite v. Lim, G.R. No. 152168, 10 December 2004, 446 SCRA 56, 71.
30 Heirs of Pomposa Saludares v. Court of Appeals, G.R. No. 128254, 16 January 2004, 420 SCRA 51, 56-58.
31 Heirs of Eduardo Manlapat v. Court of Appeals, G.R. No. 125585, 8 June 2005, 459 SCRA 412, 426.
32 Art. 1311. Contracts take effect only between the parties, their assigns and heirs, except in case where the rights and obligations arising from the contract are not transmissible by their nature, or by stipulation or by provision of law. The heir is not liable beyond the value of the property he received from the decedent.
33 Tanay Recreation Center and Development Corp. v. Fausto, G.R. No. 140182, 12 April 2005, 455 SCRA 436, 446
34 DKC Holdings Corporation v. Court of Appeals, G.R. No. 118248, 5 April 2000, 329 SCRA 666, 674-675.
35 Art. 2208. In the absence of stipulation, attorney?s fees and expenses of litigation, other than judicial costs cannot be recovered, except:

(1) x x x
(2) When the defendant?s act or omission has compelled the plaintiff to litigate with third persons or to incur expenses to protect his interest;
(3) x x x

G.R. No.

SUPREME COURT
Manila

EN BANC

DECISION

February 28, 2007

G.R. No.
, ,
vs.
, .

, J.:

This is a petition for review under Rule 45 of the Rules of Court assailing the decision1 and resolution2 of the Court of Appeals (CA) in CA-G.R. CR No. 25992 entitled People of the Philippines v. Vicia D. Pascual.

The facts follow.

Petitioner was elected vice-president of the Assumption College Parents Council for the school year 1996-1997. When the council?s president suffered a stroke, she took over as acting president from October 1996-June 1997. The council?s funds, at that time deposited in the United Coconut Planters Bank (UCPB) and Asianbank, were entrusted to her.

In 1998, when Joyce M. O? Hara became president, petitioner was requested to turn over the council?s money to the new set of officers but despite several demands, petitioner failed to do so. Later, O? Hara discovered that petitioner had already withdrawn the money from UCPB and Asianbank. Although petitioner opened a new account in the council?s name at Philippine National Bank, she, however, failed to deposit about P578,208.96 of the council?s money.

Two criminal cases for estafa were filed in the Regional Trial Court of Makati City, Branch 135, against petitioner, Criminal Case No. 98-1014 and Criminal Case No. 98-1015.

In Criminal Case No. 98-1014, Asianbank accused petitioner of falsely representing to it that she had been authorized by the council to withdraw the latter?s deposits from the bank. On the other hand, in Criminal Case No. 98-1015, the council charged petitioner with misappropriating the money entrusted to her as acting president.

When arraigned, petitioner pleaded not guilty to the twin charges. A joint trial ensued.

At the trial, Ms. O? Hara presented the following as evidence: (1) statements of account issued by UCPB and Asianbank showing the amounts withdrawn by petitioner; (2) the council?s checks issued by petitioner, payable to herself and (3) demand letters asking petitioner to return the money.3

Petitioner, who was also the defense?s sole witness, denied the charges against her. She claimed that the council authorized her to withdraw the money from UCPB and Asianbank to finance the construction of a covered walk in Assumption College. To support this claim, she presented a Secretary?s Certificate signed by a certain Marietta Veneracion.

On the other hand, Asianbank failed to continue participating in the trial of Criminal Case No. 98-1014; hence, this case was dismissed for failure to prosecute. On manifestation of petitioner?s former counsel, the evidence in Criminal Case No. 98-1014 was adopted and offered as the defense?s evidence in Criminal Case No. 98-1015.

After trial, the court a quo found petitioner liable for estafa under Article 315, paragraph 1(b)4 of the Revised Penal Code (RPC). Accordingly, the trial court declared:

WHEREFORE, premises considered, it having been proven beyond reasonable [doubt] the guilt of [petitioner] VICIA DAVID PASCUAL in Criminal Case No. 98-1015, for the crime of estafa under [Article 315,] paragraph 1 [b], as principal, with no aggravating and mitigating circumstances, she is hereby sentenced to an indeterminate prison term penalty of four [4] years two [2] months of prision correcional in its medium period, as minimum to twenty [20] years of reclusion temporal in its medium period, as maximum; to indemnify complainant Assumption College Parents Council the amount of P578,208.96 with legal interest thereon from the date of the filing of the information until fully paid; and to pay the costs.

For failure to prosecute, Criminal Case No. 98-1014 is hereby dismissed.

SO ORDERED.5

Petitioner moved for new trial and offered to submit to the trial court her affidavit that she gave the council?s money to a contractor hired to build a covered walk for Assumption College and that this contractor supposedly ran away with the money. Attached to this affidavit were documents which she claimed were newly-discovered evidence, namely: (1) the approved resolution of the council and a sketch of the proposed construction of the covered walk; (2) approval of the project by the president of Assumption College; and (3) approval by the San Lorenzo Village Association of the covered walk project.6

When the trial court denied petitioner?s motion for new trial, she appealed to the CA. There, she argued that, due to her former lawyer?s negligence, she failed to submit her affidavit during the trial proper. Although petitioner averred that she gave the money to the contractor, she claimed she could no longer locate the receipt issued to her.

Except for the penalty imposed by the trial court, the CA affirmed petitioner?s conviction for estafa. The CA held:

The alleged loss of receipt is unbelievable as it is not duly proven. And the construction for which payment was allegedly made turned out to be non-existent. There is no other logical conclusion save that she merely misappropriated the money. Otherwise stated, [petitioner] abused the confidence the Council reposed on her by misusing and/or detaining its money from the use it was intended to be applied.

?[A]fter a thorough review, [w]e find no cogent reason to disturb the findings and conclusion of the trial Court, save as to the penalty imposed upon [petitioner].

The penalty for estafa is prision correccional in its maximum period to prision mayor in its minimum period, if the amount of the fraud is over [P]12,000 but does not exceed [P] 22,000; and if such amount exceeds the latter sum, the penalty provided shall be imposed in its maximum period, adding one year for each additional [P]10,000; but the total penalty which may be imposed shall not exceed twenty years. In such cases, and in connection with the accessory penalties which may be imposed and for the purpose of other provisions of this Code, the penalty shall be termed prision mayor or reclusion temporal, as the case may be.

Considering the amount of P 578,208.96 misappropriated by [petitioner], the corresponding penalty obviously reached the twenty-year limit. Absent any modifying circumstance, the maximum should be within the maximum twenty years of reclusion temporal while the minimum term should be anywhere within prision mayor, the penalty next lower in degree from reclusion temporal.

xxx xxx xxx

WHEREFORE, the appealed decision is hereby AFFIRMED with the MODIFICATION that [petitioner] VICIA D. PASCUAL is sentenced to an indeterminate penalty of EIGHT (8) Years and ONE (1) Day of prision mayor, as minimum, to TWENTY (20) Years of reclusion temporal, as maximum. All other aspects of the decision are maintained.7

Petitioner moved for reconsideration of the above decision but the same was denied,8 thus this petition.

Petitioner essentially argues that the CA erred in affirming her conviction. She reiterates her arguments in the lower courts that: (1) she was denied her constitutional right to due process because of her former counsel?s failure to present the necessary evidence on her behalf and (2) the CA erred in not giving credence to her affidavit attesting that she did not misappropriate the money.9 She added that the notice of preliminary investigation was defective and the trial court never acquired jurisdiction over her person.

The petition must fail.

Petitioner Was Accorded Her Constitutional Right To Due Process

Petitioner was not denied due process on the mere premise that she was not able to submit her affidavit regarding where she allegedly spent the council?s money. Due process means that a party has been given the opportunity to be heard.10 When a party has been afforded a chance to present his or her own side, he cannot feign denial of due process.11 In this case, the records are evident that petitioner herself participated as the only witness for the defense during the trial. She cannot now claim very belatedly that her constitutional right to due process was violated and that she was denied her day in court. What is repugnant to due process is the absolute absence of the opportunity to be heard through pleadings or otherwise,12 which is not the case here.

Petitioner likewise contends that it was due to her former counsel?s incompetence and negligence that she failed to offer her affidavit as evidence during the trial. This contention does not hold ground considering that she neither objected nor called the attention of her former lawyer when the latter manifested in open court that petitioner (as then accused) was adopting in Criminal Case No. 98-1015 the evidence in Criminal Case No. 98-1014,13 which evidence did not include petitioner?s affidavit. Had petitioner truly believed that her counsel then was inept and careless, she could have easily terminated his services at that very instance. In failing to do so, we can only conclude that she acquiesced to the manner her former lawyer handled her case.

The doctrinal rule is that litigants should suffer the consequences of the negligence or incompetence of their counsel whom they themselves hired and had full authority to fire at anytime and replace even without any justifiable cause.14

Petitioner?s Affidavit

Was Self-Serving

Petitioner avers that her affidavit was crucial in determining whether or not she indeed committed estafa. She insists that, had the trial court allowed its submission, she would have been acquitted of the charges.

We disagree.

Lest petitioner forget, the affidavit she insisted on submitting as evidence in the trial court was her own affidavit. Her statements in that affidavit were self-serving. At any rate, even if offered and accepted as evidence, the affidavit was also unsubstantiated considering that petitioner adduced no other convincing evidence to prove that, indeed, the money was paid to the contractor of the covered walk. The affidavit alone was not enough to overthrow the prosecution?s evidence pointing to petitioner as the author of the crime.

The Defective Notice of Preliminary Investigation Was An Issue Belatedly Raised

We likewise hold that petitioner is now barred from attacking the validity of the notice of preliminary investigation. Petitioner should have raised this issue in the lower courts, particularly during the arraignment. A question never raised in the courts below cannot be raised for the first time on appeal without offending the basic rules of fair play, justice and due process.15

Moreover, an inquiry into this issue necessitates a review of factual and evidentiary matters which is proscribed in a petition for review on certiorari under Rule 45 of the Rules.16

Notwithstanding the above disquisitions, petitioner ought to know that the absence or defect in the conduct of a preliminary investigation does not affect the court?s jurisdiction over a case.17 Nor does it impair the validity of the information or render it defective.18

Petitioner Committed estafa Under Article 315, Paragraph 1(b) Of The RPC

In estafa through misappropriation under Article 315, paragraph 1 (b) of the RPC, the following essential elements must be present: (1) that money, goods, or other personal property is received by the accused in trust or on commission or for administration or under any obligation involving the duty to make delivery of or to return the same; (2) that there is misappropriation or conversion of such money or property by the accused or denial on his part of such receipt; (3) that such misappropriation or conversion or denial is to the prejudice of another and (4) that there is a demand made by the offended party on the accused.19

All the elements concur in this case. First, petitioner received the money in trust or for administration as the council?s acting president; second, she failed to substantiate her claim that she did not misappropriate the money; third, the council was prejudiced by such misappropriation and fourth, she failed to return the money to the council despite repeated demands to do so.

Finally, we find no conflict in the findings of fact of the lower courts. Well-settled is the rule that factual findings of the trial court, especially when affirmed by the CA, are conclusive on us.20 Without any cogent or compelling proof that the lower courts committed reversible error in their decisions, we shall not deviate from the rule. We therefore affirm the findings of both the trial court and the CA that petitioner committed estafa punishable under Article 315, paragraph 1(b) of the RPC.

WHEREFORE, the decision and resolution of the Court of Appeals in CA-G.R. CR No. 25992 are hereby AFFIRMED. Accordingly, the petition is DENIED.

Costs against petitioner.

SO ORDERED.

RENATO C. CORONAAssociate Justice

WE CONCUR:

REYNATO S. PUNOChief JusticeChairperson

ANGELINA SANDOVAL-GUTIERREZAssociate Justice

ADOLFO S. AZCUNAAsscociate Justice

CANCIO C. GARCIAAssociate Justice

C E R T I F I C A T I O N

Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court?s Division.

REYNATO S. PUNOChief Justice

Foonotes

1 Penned by Associate Justice Ruben T. Reyes (now Presiding Justice of the Court of Appeals), and concurred in by Associate Justices Remedios Salazar-Fernando and Edgardo F. Sundiam of the Seventh Division of the Court of Appeals. Rollo, pp. 72-88.

2 Id., p. 100.

3 Id., pp. 33-34.

4 ART. 315. Swindling (estafa). − Any person who shall defraud another by any of the means mentioned hereinbelow?

x x x

1. With unfaithfulness or abuse of confidence, namely:

(b) By misappropriating or converting, to the prejudice of another, money, goods, or any other personal property received by the offender in trust or on commission, or for administration, or under any other obligation involving the duty to make delivery of or to return the same, even though such obligation be totally or partially guaranteed by a bond; or by denying having received such money, goods, or other property. xxx

5 Decided by Judge Francisco B. Ibay, RTC, Makati City, Branch 135. Rollo, pp. 31-37.

6 Id., p. 82.

7 Id., pp. 83-88.

8 Supra note 2.

9 Rollo, pp. 17-18.

10 Roxas v. Vasquez, 432 Phil. 148 (2002).

11 Dayrit v. Philippine Bank of Communications, 435 Phil. 120 (2002); Development Bank of the Philippines v. Court of Appeals, 362 Phil. 1 (1999).

12 Sps. Friend, et al. v. Union Bank of the Philippines, G.R. No. 165767, 29 November 2005, 476 SCRA 453; Salonga v. Court of Appeals, G.R. No. 111478, 13 March 1997, 269 SCRA 534; Bacelonia v. Court of Appeals, 445 Phil. 300 (2003).

13 Rollo, p. 80.

14 Salva v. CA, 364 Phil. 281 (1997); Alabanzas v. Intermediate Appellate Court, 29 November 1991, 204 SCRA 304; Sps. Friend, et al. v. Union Bank of the Philippines, supra.

15 Villanueva v. Sps. Alejo and Virginia Salvador, G.R. No. 139436, 25 January 2006; People v. Chua, G.R. No. 128280, 4 April 2001, 356 SCRA 225; Ayson v. Enriquez Vda. De Carpio, G.R. No. 152438, 17 June 2004, 432 SCRA 449; Reburiano v. Court of Appeals, 361 Phil. 294 (1999).

16 Velasquez v. Court of Appeals, G.R. No. 138480, 25 March 2004, 426 SCRA 309; L.T. Datu & Co., Inc. v. Sy, G.R. No. 143701, 23 March 2004, 426 SCRA 189.

17 San Agustin v. People, G.R. No. 158211, 31 August 2004, 437 SCRA 392.

18 Id.; Villaflor v. Vivar, 402 Phil. 222 (2001).

19 Filadams Pharma, Inc. v. Court of Appeals, G.R. No. 132422, 30 March 2004, 426 SCRA 460.

20 Velasco v. People, G.R. No. 166479, 28 February 2006.

G.R. No.

SUPREME COURT
Manila

EN BANC

DECISION

February 28, 2007

G.R. No.
, ,
vs.
, .

, J.:

Before this Court is a Petition for Review on Certiorari assailing the Decision1 of the Sandiganbayan dated June 25, 2001 in Criminal Case No. 17856; and its Resolution2 of September 28, 2001, denying petitioners? Motion for Reconsideration.

Petitioner Robert Tayaban (Tayaban) was the Municipal Mayor of Tinoc, Ifugao. His co-petitioners, namely: Francisco Maddawat, Artemio Balangue, Francisco Mayumis, and Quirino Pana, were Municipal Councilors of the same municipality.

The facts of the case are as follows:

Sometime in 1988, then Mayor Tayaban submitted a project proposal to provincial governor Benjamin Cappleman for the construction of the Tinoc Public Market. Subsequently, Tayaban was informed by the Governor that his proposal was approved and that the project shall be funded by the Cordillera Executive Board (CEB).3 Subsequently, a bidding was conducted and private complainant Lopez Pugong (Pugong) won the contract for the construction of the said public market. On March 1, 1989, a formal contract4 was executed by and between Pugong, as the contractor, and the CEB, as the project owner. Actual construction of the public market was commenced in June 1989. On August 15, 1989, the Sangguniang Bayan of Tinoc adopted Resolution No. 20 which reads:

R E S O L U T I O N NO. 20

Series of 1989

WHEREAS, upon thorough discussion as regards the construction of the Public Market; it was found out that the constructors despite the several instructions, memoranda issued by the Municipal Mayor and the negotiations made by this body they insisted to erect the building pedestals on the site [that] pleases them and not on the site identified by this duly constituted body who has direct administration of the municipal ground;

WHEREFORE, on motion duly seconded be it?

RESOLVED, as it is hereby done to adopt this resolution manifesting this body?s decision to uphold and maintain the trust and confidence of the people upon this body;

RESOLVED, finally that this body agrees, and decides to demolish the erected structures for the purpose of erecting the Public Market building as identified and decided by this body; and further resolved as it is hereby done that this be a precedent for other future leaders.5

On that same day, Tayaban and his co-petitioners, together with some men, proceeded to the construction site and demolished the structures and improvements introduced thereon. As a result, Pugong filed an Affidavit-Complaint6 against herein petitioners.

Subsequently, in an Information dated June 26, 1992, herein petitioners were charged with violation of Section 3(e) of Republic Act (R.A.) No. 3019, otherwise known as the Anti-Graft and Corrupt Practices Act. The accusatory portion of the Information reads:

That on August 17, 1989 and for sometime prior or subsequent thereto, in the Municipality of Tinoc, Ifugao, Philippines and within the jurisdiction of this Honorable Court, the above-named accused Robert Tayaban, Municipal Mayor of Tinoc, Francisco Maddawat, Artemio Balangue, Francisco Mayumis and Quirino Pana, are all public officers being Municipal Councilors of Tinoc, Ifugao and in the performance of their official functions acting in evident bad faith and conspiring with each other, did then and there, willfully and unlawfully pass and unanimously approve Resolution No. 20, thereby vesting upon themselves powers and authority to demolish the half-finished Tinoc Public Market construction whereby respondents themselves personally and actually demolish [sic] it, to the damage and prejudice of the government particularly the Cordillera Executive Board, being the owner of the project.7

Upon arraignment on December 14, 1992, herein petitioners pleaded not guilty.8

After trial, the Sandiganbayan promulgated the presently assailed Decision,9 the dispositive portion of which reads:

WHEREFORE, premises considered, judgment is hereby rendered convicting all the accused ROBERT TAYABAN Y CALIPLIP, FRANCISCO MADDAWAT Y TAYOBAN, ARTEMIO BALANGUE Y LANGA, FRANCISCO MAYUMIS Y BAHEL and QUIRINO PANA Y CUYAHEN of the crime of Violation of Section 3 (e) of Republic Act No. 3019 as amended, and in the absence of mitigating and aggravating circumstances and applying the Indeterminate Sentence Law, herein accused are hereby sentenced to suffer the indeterminate penalty of imprisonment of six (6) years and one (1) month as minimum to eight (8) years as maximum and are hereby ordered jointly and severally to pay the government the amount of P134,632.80 without subsidiary imprisonment in case of insolvency.

SO ORDERED.10

Petitioners filed a Motion for Reconsideration but the Sandiganbayan denied it in a Resolution11 dated September 28, 2001.

Hence, herein petition for review with the following assignment of errors:

I

WITH ALL DUE RESPECT, THE HONORABLE SANDIGANBAYAN ERRED IN HOLDING THAT THE ACTS ALLEGEDLY COMMITTED BY THE ACCUSED CONSTITUTED A VIOLATION OF SECTION 3(E) OF R.A. NO. 3019 AS AMENDED, AND THEREFORE ACCUSED SHOULD HAVE BEEN ACQUITTED BY THE RESPONDENT COURT.

II

THE HONORABLE SANDIGANBAYAN ERRED IN NOT HOLDING THAT RESOLUTION NO. 20 IS A VALID LEGISLATION AND THAT THE DEMOLITION OF THE FIVE POSTS WAS AN IMPLEMENTATION OF LOI NO. 19 AND AN EXERCISE OF THE POLICE POWER VESTED IN LOCAL GOVERNMENT UNIT.

III

THE HONORABLE SANDIGANBAYAN, IN VIOLATION OF THE RULES OF EVIDENCE, LAWS AND JURISPRUDENCE ERRED IN CONSIDERING FACTS WITHOUT REFERRING TO THE EVIDENCE ON RECORD.12

In their first assigned error, petitioners argue that one of the elements of the offense which constitutes a violation of Section 3(e) of R.A. No. 3019 is that the government or any private party suffers undue injury by reason of the prohibited acts committed by the public officer being charged. Petitioners argue that this element was not proved because the CEB, which was supposed to be the injured party as alleged in the Information, did not complain or participate in the trial of the case. Petitioners go on to conclude that the existence of undue injury cannot be proven without the alleged injured party testifying. Petitioners further contend that the itemized list of expenses submitted in evidence by Pugong should not have been made a basis of the presently assailed Decision because such list is not supported by receipts and, therefore, self-serving. Moreover, Pugong was never mentioned in the Information as one of the injured parties. Petitioners assert that undue injury could only mean actual injury or damage which must be established by evidence.

Petitioners also contend that the element of bad faith on their part was not proved. On the contrary, they argue that their act of exerting efforts to communicate with the contractor and his foreman, by sending three letters in order to remind them of the proper site of construction, only shows that they were acting in good faith; that the eventual passage of Resolution No. 20 is also an additional evidence of good faith on their part because it was adopted by the Sangguniang Bayan as a collective body acting within the scope of its authority. Petitioners further contend that the CEB saw the propriety of the Sangguniang Bayan?s action to stop the construction of the market that was why it issued an order suspending the said construction; and that the CEB, realizing its mistake in not coordinating with petitioners, did not pursue any action against them.

In their second assigned error, petitioners argue that the Sandiganbayan erred in applying Sections 5613 and 59(a)14 of the Local Government Code (LGC) of 1991, which provide, respectively, for the review by the Sangguniang Panlalawigan of component city and municipal ordinances and resolutions approving local development plans and public investment programs and for the posting in conspicuous places in the local government unit concerned of the said resolutions and ordinances.

They argue that the applicable law at the time of the passage of Resolution No. 20 is Batas Pambansa Bilang (B.P. Blg.) 337 or the Local Government Code of 1983. Claiming that Pugong failed to obtain the requisite building permit pursuant to Presidential Decree (P.D.) No. 1096,15 petitioners assert that their act of demolishing the structures erected on the construction site is an implementation of the provisions of the Letter of Instruction (LOI) No. 1916 which empowers certain public officials, like the municipal mayor, to remove illegal constructions which were built, either in public places or private property, without permit. Petitioners further contend that the demolition is a valid exercise of police power and that their act is justified by the general welfare clause under the LGC which empowers them to enact and implement measures for the general well-being of their constituents.

In their third assigned error, petitioners argue that the Sandiganbayan erred in relying on the testimony of prosecution witness Abe Belingan considering that he is not a disinterested witness because he is given the contract of cementing the supposed second floor of the public market. Moreover, petitioners contend that the testimony of Belingan regarding the reason why Mayor Tayaban demolished the structures is mere hearsay and as such should not be given any probative value. Petitioners assert that the complaint was filed against them for purposes of political harassment considering that Pugong?s political allies who also signed Resolution No. 20 were not included in the said complaint.

In its Comment, the Office of the Solicitor General (OSG) contends that, as properly held by the Sandiganbayan, undue injury has been caused to the Government and that it is immaterial whether the CEB filed a complaint against herein petitioners because the real party-in-interest is the Government of the Republic of the Philippines. The OSG also argues that private complainant Pugong also suffered undue injury because he already incurred expenses for labor, tools, equipment, and materials for the construction project. As to the issue of credibility of witnesses, the OSG asserts that the matter of assigning values to declarations on the witness stand is a function most competently performed by the trial judge who had the opportunity to observe the witnesses and assess their credibility by the various indicia available but not reflected on record.

The Office of the Special Prosecutor (OSP) also filed its Comment, contending that it is not necessary for the CEB to initiate a complaint against herein petitioners because the real party-in-interest is the Government of the Republic of the Philippines; that there is actual injury on the part of the Government as shown by the fact that construction was commenced and that petitioners did not deny that they demolished the structures which were erected; and that the list of expenses presented by Pugong cannot be considered self-serving because the latter testified thereon.

The OSP further claims that petitioners were guilty of bad faith when they demolished the erected structures as evidenced by various acts committed by herein petitioners prior to and during the construction of the public market; and that the fact that witness Belingan has contracted the cementing of the second floor of the supposed public market is not sufficient evidence of his bias against herein petitioners.

As to petitioners? contention that the criminal complaint filed against them was merely a political harassment considering that the other members of the Sangguniang Bayan who signed the questioned Resolution but who are allies of Pugong were not included in the complaint, the OSP avers that, while the said members of the Sangguniang Bayan signed Resolution No. 20, they were not included in the complaint because they did not take part in the demolition of the public market.

The Court finds the petition without merit.

Section 3(e) of R.A. No. 3019 reads:

Sec. 3. Corrupt practices of public officers. – In addition to acts or omissions of public officers already penalized by existing law, the following shall constitute corrupt practices of any public officer and are hereby declared to be unlawful:

x x x x

(e) Causing any undue injury to any party, including the Government, or giving any private party any unwarranted benefits, advantage or preference in the discharge of his official, administrative or judicial functions through manifest partiality, evident bad faith or gross inexcusable negligence. This provision shall apply to officers and employees of offices or government corporations charged with the grant of licenses or permits or other concessions.

The following indispensable elements must be established to constitute a violation of Section 3(e) of R.A. No. 3019, as amended:

1. The accused is a public officer discharging administrative or official functions or private persons charged in conspiracy with them;

2. The public officer committed the prohibited act during the performance of his official duty in relation to his public position;

3. The public officer acted with manifest partiality, evident bad faith or gross inexcusable negligence; and

4. His action caused undue injury to the government or any private party, or gave any party any unwarranted benefit, advantage or preference to such parties.17

Herein petitioners? contention that the Sandiganbayan erred in ruling that they are guilty of bad faith and that they caused undue injury to the Government is not plausible.

With respect to the element of bad faith, the Court, in a number of cases, held:

Bad faith does not simply connote bad judgment or negligence; it imputes a dishonest purpose or some moral obliquity and conscious doing of a wrong; a breach of sworn duty through some motive or intent or ill will; it partakes of the nature of fraud. (Spiegel v. Beacon Participations, 8 NE 2nd Series, 895, 1007). It contemplates a state of mind affirmatively operating with furtive design or with some motive of self-interest or ill will for ulterior purposes. (Air France v. Carrascoso, 18 SCRA 155, 166-167). Evident bad faith connotes a manifest deliberate intent on the part of the accused to do wrong or cause damage.18

The Court agrees with the findings of the Sandiganbayan that petitioners were guilty of bad faith in causing the demolition.

Evidence of this is the fact that Resolution No. 20 was implemented on the same day that it was adopted without due notice of the planned demolition given to the CEB and the private contractor. In fact, Raymundo Madani, one of the Municipal Councilors who signed Resolution No. 20, testified that the said Resolution was passed only in the afternoon of August 15, 1989, after the subject demolition was conducted in the morning of the same day.19

Proof of petitioners? bad faith is also shown by Pugong?s testimony, which was given credence by the Sandiganbayan, that the site where his laborers began construction of the demolished public market was pointed out by petitioner Tayaban himself when the former asked the latter where they were going to erect the said market.20

Tayaban?s letter and memorandum dated July 31, 198921 and August 3, 1989,22 respectively, addressed to the laborers of Pugong directing them to stop construction may not be considered as evidence of good faith on the part of petitioners considering that they know fully well that it is the CEB which implements the said project and any grievance or complaint on their part should have been addressed to the said Board. No evidence was presented to show that petitioners made their objections known to the CEB. At the least, petitioners should have furnished the CEB or the Governor, in his capacity as a regular member of the CEB,23 a copy of the above-mentioned letter and memorandum. But they never did. The letter and memorandum were not even addressed to Pugong and there is no proof to show that he was informed of the contents thereof. Moreover, even if Pugong?s men had received the letter and memorandum, they may not be totally blamed for ignoring the letter and the memorandum because under their contract, the owner of the project is the CEB and there is nothing therein which requires them to comply with whatever directive the Mayor or the Sangguniang Bayan of Tinoc may issue. In fact, the contract signed on March 1, 1989 specifically states that the contractor shall construct the Tinoc Public Market as per plan and specification provided by the CEB technical staff.24 In consonance with the said provision in the contract, Pugong testified that the CEB sent a representative to supervise the construction.25

The following admissions made by petitioners bolster Sandiganbayan?s finding of bad faith on their part:

First, petitioner Tayaban admitted that when he submitted the project proposal for the construction of the Tinoc Public Market, he did not indicate the exact location where the market should be put up saying that he shall specify the location when the budget for the project shall have been approved.26 However, despite meeting the Governor twice in 1989, and being informed by the latter that the project had already been approved and funded, Tayaban still did not suggest to the Governor nor mention to him the specific place where he and the Sangguniang Bayan desire to have the public market erected.27 Worse, when the construction was commenced and petitioners discovered that the public market was being built allegedly in a place where it should not be, petitioner Tayaban even admits that he still did not inform the Governor of such fact.28

Second, Tayaban admits that they never bothered to check with the CEB where the latter intended to put up the public market.29 There is no evidence to show that, when the construction was commenced, petitioners informed the CEB of the alleged mistake in the location of the project. In fact, petitioner Tayaban testified that it was only in the first or second week of August, 1989 that he informed the CEB regarding the supposed error,30 even when he came to know the exact site where Pugong intended to build the market as early as April 1989.31 Moreover, when the Sangguniang Bayan convened on August 15, 1989 and passed Resolution No. 20, they did not invite any representative from the CEB.32

Third, while petitioners aver that they have come up with a Site Development Plan wherein the exact location of the public market was specified, Tayaban admits that the blue print of the said development plan was completed only in August 1989.33 However, the construction of the public market was commenced as early as June 1989.

From the foregoing, it is evident that petitioners were moved by a manifest and deliberate intent to cause damage.

It is clear from the Information filed that the injured party in the instant case is the Government, as represented by the CEB. The fact that the CEB did not initiate the filing of the instant criminal action is of no moment considering that a complaint for purposes of preliminary investigation by the fiscal need not be filed by the "offended party".34 The rule has been that, unless the subject of the complaint is one that cannot be prosecuted de oficio, the same may be filed, for preliminary investigation purposes, by any competent person.35 In the present case, it is sufficient that private contractor Pugong was the one who filed an affidavit-complaint for purposes of preliminary investigation by the OSP. Moreover, the failure of the CEB to participate in the trial of the case does not necessarily mean that the Government of the Republic of the Philippines did not suffer any injury or that such injury cannot be proven.

As to whether the Government suffered undue injury, it cannot be denied that the unceremonious demolition of the five concrete posts and the other improvements built as part of the foundation of the supposed public market resulted in damage to the Government. Evidence presented by the prosecution shows that, at the time of the questioned demolition, the CEB had already disbursed in favor of Pugong the amount of P134,632.80.36 Any further effort to rebuild the destroyed structures or to proceed with the construction of the market would necessarily entail additional expenses on the part of the Government. Hence, undue injury to the Government was proven to the point of moral certainty.

Petitioners? reliance on Llorente, Jr. v. Sandiganbayan37 is misplaced as the factual milieu in the said case is not on all fours with the present case. In Llorente, the petitioner, a municipal mayor, was charged with violation of Section 3(e) of R.A. No. 3019 for having allegedly delayed or withheld the salaries and other emoluments due to the private complainant who is a municipal employee, causing her undue injury. In acquitting petitioner, this Court ruled that the prosecution failed to sufficiently establish that the private complainant suffered undue injury after it has been proven that she subsequently received the salaries and allowances which, she claimed, were withheld from her. The Court held that, other than the amount of the withheld salaries and allowances which were eventually received, the prosecution failed to specify and to prove any other loss or damage sustained by the complainant. Moreover, the Court ruled that the alleged financial stress which complainant suffered was inadequate and largely speculative and that the long period of time that her emoluments were withheld does not constitute the kind of undue injury contemplated by law.

In the present case, it cannot be gainsaid that the destruction of the five concrete posts and the other improvements in the construction of the Tinoc public market is clear and substantial evidence to prove that the Government suffered undue injury. Under prevailing jurisprudence, proof of the extent or quantum of damage is not essential, it being sufficient that the injury suffered or benefits received can be perceived to be substantial enough and not merely negligible.38

Pugong may not be made liable to answer for the injury suffered by the Government considering that it was not he who caused the subject demolition. Neither was it alleged nor proven that he breached his contract with the CEB as to justify the destruction of the structures which were already built.

On the other hand, the prosecution has sufficiently established the individual participation of petitioners in carrying out the demolition.39 In fact, petitioners do not deny that, in their capacity as public officials, they caused the actual demolition of the structure built on the project site. Hence, they should be held answerable for the injury suffered by the Government.

Anent the second assigned error, the Court agrees with the petitioners and the OSG that Sections 56 and 59(a) of the 1991 LGC (R.A. No. 7160) are not applicable in the present case. The Sangguniang Bayan of Tinoc enacted the questioned resolution on August 15, 1989, more than two years before the effectivity of the said Code.40 The prevailing law at that time was the Local Government Code of 1983 (B.P. Blg. 337). The Court agrees with the OSG that Sections 56 and 59(a) of the 1991 LGC have no similar or counterpart provisions in the 1983 LGC. In addition, the Court agrees with petitioners that Sections 56 and 59(a) of the 1991 LGC find no application in the present case because these provisions refer, specifically, to ordinances and resolutions approving the local development plans and public investment programs formulated by the local development council.

However, the Court is not persuaded by petitioners? reliance on the provisions of P.D. No. 1096 and LOI No. 19 as their legal bases in conducting the questioned demolition. A careful reading of Resolution No. 20 reveals that petitioners? only basis in deciding to carry out the demolition was because the supposed public market was being erected in a place other than that identified by the Sangguniang Bayan of Tinoc. There was no mention whatsoever in the said Resolution that the private contractor failed to secure the requisite building permit. Neither was there any mention that the demolition was being conducted pursuant to the power vested upon the Mayor by the provisions of LOI No. 19. Even the letter sent by petitioner Tayaban to the head laborer of Pugong dated July 31, 1989, the letter to the Station Commander of the INP, Tinoc of even date,41 and the memorandum sent to the laborers of Pugong dated August 3, 1989 uniformly state that the only reason why petitioners wanted to stop the construction was because the supposed public market was being erected in the wrong place. Hence, petitioners? reliance on the provisions of P.D. No. 1096 and LOI No. 19 was merely an afterthought and as a means of justification for their acts which, in the first place, were done in bad faith.

Likewise, the Court is not persuaded by petitioners? contention that the subject demolition is a valid exercise of police power. The exercise of police power by the local government is valid unless it contravenes the fundamental law of the land, or an act of the legislature, or unless it is against public policy, or is unreasonable, oppressive, partial, discriminating, or in derogation of a common right.42 In the present case, the acts of petitioner have been established as a violation of law, particularly of the provisions of Section 3(e) of R.A. No. 3019.

Neither can petitioners seek cover under the general welfare clause authorizing the abatement of nuisances without judicial proceedings. This principle applies to nuisances per se, or those which affect the immediate safety of persons and property and may be summarily abated under the undefined law of necessity.43 Petitioners claim that the public market would pose danger to the safety and health of schoolchildren if it were built on the place being contested.44 However, petitioners never made known their supposed concerns either to the Governor or to the CEB. Instead, they took the law into their own hands and precipitately demolished the subject structures that were built without the benefit of any hearing or consultation with the proper authority, which in this case is the CEB.

As to the Sandiganbayan?s act of giving credence to the testimony of prosecution witness Abe Belingan, the settled rule is that the assessment of the credibility of a witness is primarily the function of a trial court, which had the benefit of observing firsthand the demeanor or deportment of the witness.45 It is well-settled that this Court will not reverse the trial court?s assessment of the credibility of witnesses in the absence of arbitrariness, abuse of discretion or palpable error.46 It is within the discretion of the Sandiganbayan to weigh the evidence presented by the parties, as well as to accord full faith to those it regards as credible and reject those it considers perjurious or fabricated.47 Moreover, the settled rule is that absent any evidence showing a reason or motive for prosecution witnesses to perjure their testimonies, the logical conclusion is that no improper motive exists, and that their testimonies are worthy of full faith and credit. In the present case, the fact that Belingan was contracted to cement the supposed second floor of the public market is not a compelling evidence to prove that his testimony is biased. Hence, the Court finds no cogent reason to depart from the findings of the Sandiganbayan with respect to the credibility of Belingan.

The penalty for violation of Section 3(e) of R.A. No. 3019, as provided under Section 9 of the same law, is imprisonment for not less than six years and one month nor more than 15 years, perpetual disqualification from public office, and confiscation or forfeiture in favor of the Government of any prohibited interest and unexplained wealth manifestly out of proportion to the salary and other lawful income of the accused. Under the Indeterminate Sentence Law, if the offense is punished by special law, the Court shall sentence the accused to an indeterminate penalty, the maximum term of which shall not exceed the maximum fixed by said law and the minimum term shall not be less than the minimum prescribed by the same.48 In the present case, the Court finds no error in the penalty imposed by the Sandiganbayan, except that the penalty of perpetual disqualification from public office should also be imposed.

It bears to reiterate that the injury suffered by the Government consists in the fact that it had already disbursed the amount of P134,632.80 for the purpose of commencing the construction of the Tinoc Public Market which was reduced to nothing by reason of petitioners? destruction of the structures built and the eventual stoppage of the project. On this basis, the Court agrees with the Sandiganbayan that petitioners are liable to reimburse the said amount lost by the Government.

WHEREFORE, the assailed Decision and Resolution of the Sandiganbayan are AFFIRMED with MODIFICATION. The additional penalty of perpetual disqualification from public office is imposed upon petitioners.

SO ORDERED.

MA. ALICIA AUSTRIA-MARTINEZAssociate Justice

WE CONCUR:

CONSUELO YNARES-SANTIAGOAssociate JusticeChairperson

(On leave)ROMEO J. CALLEJO, SR.Associate Justice

MINITA V. CHICO-NAZARIOAsscociate Justice

ANTONIO EDUARDO B. NACHURAAssociate Justice

A T T E S T A T I O N

I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court?s Division.

CONSUELO YNARES-SANTIAGOAssociate JusticeChairperson, Third Division

C E R T I F I C A T I O N

Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson?s Attestation, it is hereby certified that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court?s Division.

REYNATO S. PUNOChief Justice

Footnotes

* Also spelled as Balangui in other parts of the rollo and records.

1 Penned by Justice Rodolfo G. Palattao and concurred in by Justices Narciso S. Nario and Nicodemo T. Ferrer; rollo, pp. 36-55.

2 Id. at 56-60.

3 Under Executive Order (E.O.) No. 220, dated July 15, 1987, the CEB is the development body and implementing arm of the Cordillera Administrative Region (CAR).

4 Exhibit "A", folder of exhibits, p. 16.

5 Exhibits "H" and "15", id. at 28 and 49.

6 Exhibit "B", id. at 19.

7 Records, p. 1.

8 Id. at 41.

9 Id. at 261.

10 Id. at 278-279.

11 Id. at 305.

12 Rollo, p. 15.

13 Section 56. Review of Component City and Municipal Ordinances or Resolutions by the Sangguniang Panlalawigan. ?

a) Within three (3) days after approval, the secretary to the sangguniang panlungsod or sangguniang bayan shall forward to the sangguniang panlalawigan for review, copies of approved ordinances and the resolutions approving the local development plans and public investment programs formulated by the local development councils.

b) Within thirty (30) days after receipt of copies of such ordinances and resolutions, the sangguniang panlalawigan shall examine the documents or transmit them to the provincial attorney, or if there be none, to the provincial prosecutor for prompt examination. The provincial attorney or provincial prosecutor shall, within a period of ten (10) days from receipt of the documents, inform the sangguniang panlalawigan in writing of his comments or recommendations, which may be considered by the sangguniang panlalawigan in making its decision.
c) If the sangguniang panlalawigan finds that such an ordinance or resolution is beyond the power conferred upon the sangguniang panlungsod or sangguniang bayan concerned, it shall declare such ordinance or resolution invalid in whole or in part. The sangguniang panlalawigan shall enter its action in the minutes and shall advise the corresponding city or municipal authorities of the action it has taken.
d) If no action has been taken by the sangguniang panlalawigan within thirty (30) days after submission of such an ordinance or resolution, the same shall be presumed consistent with law and therefore valid.

14 Section 59. Effectivity of Ordinances or Resolutions. ?

(a) Unless otherwise stated in the ordinance or the resolution approving the local development plan and public investment program, the same shall take effect after ten (10) days from the date a copy thereof is posted in a bulletin board at the entrance of the provincial capitol or city, municipal, or barangay hall as the case may be, and in at least two (2) other conspicuous places in the local government unit concerned.
x x x x

15 Otherwise known as the National Building Code of the Philippines. Section 301, Chapter 3 of the said Code reads:

No person, firm or corporation, including any agency or instrumentality of the government shall erect, construct, alter, repair, move, convert or demolish any building or structure or cause the same to be done without first obtaining a building permit therefor from the Building Official assigned in the place where the subject building is located or the building work is to be done.

16 Pertinent portions of LOI No. 19 read as follows:

Letter of Instruction No. 19
TO: 1. The Secretary of National Defense

2. The Secretary of Public Works and Communications
3. The Secretary of Social Welfare
4. The Director of Public Works
5. The General Manager, PHHC
6. The Presidential Assistant on Housing Rehabilitation Agency
7. Governors, City Mayors and Municipal Mayors
8. City and District Engineers

Pursuant to Proclamation No. 1081 dated September 21, 1972, and in my capacity as Commander-in-Chief of all the Armed Forces of the Philippines, and in the interest of public health, safety and peace and order, you and the subordinate officials and employees under you are hereby ordered:
1. To remove all illegal constructions including buildings on and along esteros and river banks, those along railroad tracks and those built without permits on public or private property;
x x x x

17 Matalam v. Sandiganbayan, Second Division, G.R. No. 165751, April 12, 2005, 455 SCRA 736, 749-750.
18 Dugayon v. People, G.R. No. 147333, August 12, 2004, 436 SCRA 262, 272-273; Sidro v. People, G.R. No. 149685, April 28, 2004, 428 SCRA 182, 194; Alvizo v. Sandiganbayan, 454 Phil. 34, 72 (2003).
19 Exhibit "I", folder of exhibits, p. 29; TSN, August 16, 1999, p. 7.
20 TSN, June 22, 1999, p. 18.
21 Exhibit "2", folder of exhibits, p. 36.
22 Exhibit "3", id. at 37.
23 Under Section 10 of E.O. No. 220, the six governors of the provinces comprising the CAR are appointed regular members of the CEB.
24 Exhibit "A", folder of exhibits, p. 16.
25 TSN, June 22, 1999, p. 41.
26 TSN, August 18, 1999, p. 35.
27 Id. at 37.
28 Id. at 40.
29 Id. at 59.
30 Id. at 49-50.
31 Id. at 39.
32 TSN, October 7, 1999, pp. 19 and 24.
33 TSN, August 18, 1999, pp. 19 and 35.
34 Ebarle v. Sucaldito, G.R. No. L-33628, December 29, 1987, 156 SCRA 803, 819.
35 Id.
36 Exhibit "D", folder of exhibits, p. 23.
37 350 Phil. 820 (1998).
38 Soriquez v. Sandiganbayan, G.R. No. 153526, October 25, 2005, 474 SCRA 222, 230; Cabrera v. Sandiganbayan, G.R. Nos. 162314-17, October 25, 2004, 441 SCRA 377, 391, citing Fonacier v. Sandiganbayan, G.R. No. 50691, December 5, 1994, 238 SCRA 655, 688.
39 TSN, June 22, 1999, p. 57; Exhibits "G-2-A" to "G-9-A", folder of exhibits, pp. 9-15.
40 The Local Government Code of 1991 took effect on January 1, 1992.
41 Exhibit "5", folder of exhibits, p. 39.
42 City of Manila v. Laguio, Jr., G.R. No. 118127, April 12, 2005, 455 SCRA 308, 358-359.
43 Id. at 355.
44 Rollo, p. 21.
45 Peligrino v. People, 415 Phil. 94, 121 (2001).
46 Id.
47 Id.
48 Escara v. People, G.R. No. 164921, July 8, 2005, 463 SCRA 239, 253.

G.R. No. 169075, People v. Dullavin

Republic of the Philippines
SUPREME COURT
Manila

EN BANC

DECISION

February 23, 2007

G.R. No. 169075
PEOPLE OF THE PHILIPPINES, </b>Plaintiff-appellee,
vs.
CHRISTOPHER (Popop) PADUA, ALEJANDRO (Andoy) PADUA and MICHAEL (Mike or Meke) DULLAVIN, Accused-appellants.

D E C I S I O N
GARCIA, J.:

, J.:

For automatic review is the decision1 dated February 21, 2005 of the Court of Appeals (CA) in CA-G.R. CR-H.C. No. 00262 which affirmed, with modification, an earlier decision2 of the Regional Trial Court (RTC) of San Pedro, Laguna, Branch 31, in Criminal Case No. 0055-SPL, finding appellants guilty beyond reasonable doubt of the crime of Rape With Homicide and sentencing them to suffer the extreme penalty of death.

Pursuant to our pronouncement in People v. Mateo3 which modified the provisions of the Rules of Court insofar as they provide for direct appeals from the RTC to this Court in cases where the penalty imposed by the trial court is death, reclusion perpetua or life imprisonment, this case was earlier4 referred to the CA for appropriate action and disposition whereat it was docketed as CA-G.R. CR-H.C. No. 00262.

Consistent with our decision in People v. Cabalquinto,5 the real name of the rape victim in this case is withheld and instead fictitious initials are used to represent her. Also, the personal circumstances of the victim or any other information tending to establish or compromise her identity, as well as those of her immediate family or household members, are not disclosed in this decision.

In the court of origin, appellants Christopher ("Popop") Padua, Alejandro ("Andoy") Padua and Michael ("Mike" or "Meke") Dullavin were charged with Rape With Homicide in an Information6 worded as follows:

That on or about the 21st day of August, 1995 in the City of Muntinlupa, the said accused conspiring, confederating together and mutually helping one another prompted with lewd designs, did then and there, willfully, unlawfully and feloniously abduct, take and carry away XXX, a 10-year old minor, while walking together with her younger brothers YYY and ZZZ, along a narrow street leading to their house at Purok ABC, Muntinlupa City, by means of force, violence and intimidation to wit: by pulling her and carrying her at the same time covering her mouth and succeeded in forcibly bringing said XXX away to Pacita Complex I, San Vicente, in the Municipality of San Pedro, Province of Laguna, Philippines and within the jurisdiction of this Honorable Court, where the said accused, by means of force, violence and intimidation, succeeded in having sexual intercourse with her against her will, and on the occasion thereof, accused with intent to kill, with the use of superior strength and conveniently armed with a blunt instrument, did then and there willfully, unlawfully and feloniously attack, hit and choke by inserting inside the mouth of XXX with the said instrument, thereby inflicting upon the latter several wounds on her body, which had caused her death, to the damage and prejudice of her surviving heirs.

CONTRARY TO LAW.

Arraigned on November 22, 1995, all three appellants, assisted by their respective counsels, pleaded "Not Guilty" to the crime charged. Thereafter, trial on the merits ensued, in the course of which the prosecution presented the oral testimonies of YYY and ZZZ, younger brothers of the victim; their mother; Felicisima Arroyo, the victim’s neighbor; SPO3 Myrna Olegario, a member of the Criminal Investigation Group in Laguna; PO2 Ernani Mendez, a member of the Philippine National Police (PNP); and Dr. Rolando Victoria, medico-legal officer of the National Bureau of Investigation (NBI).

For its part, the defense presented a total of 11 witnesses, including the appellants themselves.

The People’s version of the incidents is succinctly summarized by the Office of the Solicitor General (OSG) in its Appellee’s Brief7 as follows:

About 9:00 o’clock in the evening of August 21, 1995, XXX, together with her younger brothers YYY and ZZZ, was watching television at the house of Felicisima Arroyo (Aling Fely). When the program ended, the siblings left Aling Fely’s house.

The house of Aling Fely is some distance away from their house, with several pathways that can be used in going to and leaving the place. YYY and ZZZ left the place first and waited for their older sister XXX at the back of the house of Lalo, one of their neighbors. However, YYY saw XXX take another route home, going by the house of Kuya Nestor, another neighbor. The place was illuminated by the lights coming from the nearby Nescafe factory compound.

YYY was about to call his sister when he saw the three accused approach XXX and snatch her. The illumination provided by the lights of the Nescafe compound allowed YYY to see appellant Dullavin cover XXX’s mouth to prevent her from making any sound. YYY also saw Christopher and Alejandro Padua hold XXX’s hands.

Since YYY was only ten years old and ZZZ much younger than him, the two were not able to do anything to help their sister. They saw XXX being dragged towards the house of Alejandro Padua. XXX was struggling to free herself or "pumapalag" as she was being dragged away.

Fearful that the trio might also snatch them, the two boys ran home. The two boys, however, did not relate what they saw to their parents since they feared that if they told their parents what they saw, the same fate might befall them also.

The next time YYY saw his sister XXX was inside the morgue of the Veronica Funeral Homes. He noticed that the body of his sister was still wearing the same clothes she had on the night she was abducted.

On August 23, 1995, the Criminal Investigation Command at Pacita Complex, San Pedro Laguna, received a report that a body of a child was found at the unfinished Pacita I Complex, San Pedro, Laguna. Policemen were dispatched by that station to investigate. Among them was PO2 Ernani Mendez. When the police reached the area, they saw the naked body of a girl lying spread-eagled in the grassy area, with a piece of wood stuck in her mouth. There was a sleeveless blouse near the upper body while the panty was placed near the dead child’s private part. The place was full of tall grass and sampaguita plants. PO2 Mendez opined that a person lying on the ground in that place could not be seen by passersby because of the sampaguita plants and tall grass.

After recovering the body, the police took the cadaver to the Veronica Funeral homes. [The victim’s father] came to the CIC Office and when taken to the morgue, identified the dead body as his missing child, XXX.

Pursuant to the Request for Examination dated August 23, 1995, signed by Police Chief Inspector Jesus Florentino, Dr. Rolando Victoria, medico-legal officer of the NBI, examined the cadaver of XXX on the same day. He found hematoma at the back of the head and back of the right ear, genital laceration at 6:00 o’clock position of the hymen and the laceration of the vaginal wall. He opined that the victim died within the 48 hours preceding his examination. He gave the cause of death as traumatic injuries resulting from fracture blood vessels in the intracania, sub-dual and sub-arachnoidal portions of the skull.

On the other hand, the defense’ version is hinged mainly on the following testimonies of the appellants:

Alejandro Padua testified that on August 21, 1995, the date the crime was committed, he was at his house at Ilaya Street, Alabang, Muntinlupa taking care of his three-year old grandchild whose mother was then confined in the hospital. At around 9 o’clock in the evening of said date, he went to sleep and did not leave their house. He was 73 years old at that time, had a failing eyesight and was also suffering from rheumatism and hypertension, hence he could no longer work or go out at night. He started losing his sexual urge when he was 72 years old as his knees became weak and his eyes blurred. The main reason for the filing of the complaint against him was the long-standing feud between his family and family of the victim.

Christopher Padua, grandson of Alejandro, declared that he was at his parents’ house at Ilaya, Alabang, Muntinlupa on August 21, 1995 and stayed there the whole day. At around 8 o’clock in the evening, his sister Cristina arrived along with her husband Michael Dullavin. They had dinner together as it was Cristina’s birthday. He slept at around 9 o’clock and did not at all see his grandfather Alejandro that evening.

Michael Dullavin, brother-in-law of Christopher, testified that on August 21, 1995, he was at the house of his parents at Bayanan, Muntinlupa as he was then repairing his passenger jeep. He went home at around 8 o’clock in the evening of that date. Then, together with his wife Cristina, the two of them went to the house of his parents-in-law at Ilaya Street, Alabang, Muntinlupa where he saw his co-appellant Christopher. His house and that of his parents-in-law are merely separated by a wall. They all had dinner together at the house to celebrate Cristina’s birthday. He and his wife went home around 9 o’clock that evening as he was not feeling well.

The other witnesses for the defense merely corroborated appellants’ testimonies that they were home when the incident happened, and that the possible reason for the filing of the complaint against appellants was the fact that the respective families of the victim and appellants were not in good terms.

On November 24, 1998, the trial court rendered its decision8 convicting appellants of the crime charged and sentencing them as follows:

WHEREFORE, finding accused Alejandro Padua y Cabalquento @ Andoy Padua, Christopher Padua y Videna @ Popop Padua and Michael Dullavin y Valencia @ Mike or Meke guilty of the crime of rape with homicide, the Court hereby sentences each of them to suffer the penalty of death, to pay the heirs of XXX the following sums: P100,000.00 as civil indemnity, P30,000.00 for the wake, burial, coffin of XXX, and P50,000.00 as moral damages. Costs against the accused. However, pursuant to Article 83 of the Revised Penal Code, as amended, the death sentence shall not be inflicted upon accused Alejandro Padua who is over 70 years of age and the same shall be commuted to the penalty of reclusion perpetua with the accessory penalty provided for in Article 40.

SO ORDERED.

The records of the case were then transmitted to this Court on automatic review. While the case was pending review by the Court, the Court received a letter from one Ma. Victoria Diaz of the Philippine Jesuit Prison Service to the effect, among others, that appellant, Christopher V. Padua, was allegedly below eighteen (18) years old at the time of the commission of the crime. Acting thereon, the Court, in its Resolution of April 1, 2003,9 referred the matter to the Executive Judge of Muntinlupa City for raffle among the RTC judges thereat for the reception of evidence as regards Christopher’s alleged minority. The matter was eventually raffled for the purpose to Branch 204 thereof. After due consideration of the evidence presented, RTC Branch 204 found that, indeed, Christopher was 17 years old at the time of the commission of the offense. Accordingly, the privileged mitigating circumstance of minority was considered in his favor and the death penalty earlier imposed on him was thus reduced by the court of origin to reclusion perpetua.

As stated at the onset hereof, the Court, in its Resolution10 of August 17, 2004 and pursuant to its ruling in People v. Mateo,11 referred the case and its records to the CA for appropriate action and disposition.

In a decision dated February 21, 2005, the CA affirmed with modifications that of the trial court. Dispositively, the CA decision reads:

WHEREFORE, the Decision dated November 24, 1998 of the trial court is affirmed subject to the following modifications:

(i) The death penalty upon accused-appellant Christopher Padua is reduced to reclusion perpetua; and,

(ii) In addition to the civil indemnity, each of the accused-appellants is ordered to pay the heirs of the victim (i) moral damages in the increased amount of P75,000.00; and (ii) temperate damages in the amount of P25,000.00, in lieu of actual damages of P30,000.00

SO ORDERED.

From the CA, the case was then elevated to this Court for automatic review. In its Resolution of September 27, 2005, the Court resolved to accept the case and required the parties to submit their respective supplemental briefs.

In a Manifestation (In lieu of Supplemental Brief) dated December 6, 2005, appellants Alejandro Padua and Christopher Padua, through the Public Attorney’s Office (PAO), informed the Court that they were no longer filing a supplemental brief and were merely adopting their appellants’ brief before the CA as their supplemental brief. For his part, appellant Michael Dullavin filed his Supplemental Brief through his private counsel, Atty. Leodegario Barayang, Sr.

The OSG, on the other hand, filed on February 9, 2006 a Supplemental Brief for the People.

In their common Appellants’ Brief12 before the CA, all three appellants assign the following errors:

I

THE TRIAL COURT ERRED IN CONVICTING ACCUSED-APPELLANTS OF THE CRIME OF RAPE WITH HOMICIDE MERELY ON THE BASIS OF CIRCUMSTANTIAL EVIDENCE.

II

THE TRIAL COURT ERRED IN RENDERING A VERDICT OF CONVICTION DESPITE THE FACT THAT THE GUILT OF ACCUSED-APPELLANTS WAS NOT PROVEN BEYOND REASONABLE DOUBT.

On the other hand, appellant Michael Dullavin, in his Supplemental Brief, similarly faulted the trial court for relying solely on circumstantial evidence in convicting him and for giving credence to the alleged exaggerated and false testimonies of the victim’s brothers, YYY and ZZZ.

Insisting that there was no direct evidence to link them to the crime, all three appellants stood to a man in asking the Court to review the sufficiency of the circumstantial evidence upon which their conviction was based, and to acquit them on ground of reasonable doubt.

The appeal must fail.

Direct evidence of the commission of a crime is not the only matrix wherefrom a trial court may draw its conclusion and finding of guilt.13 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 proves a fact or series of facts from which the facts in issue may be established by inference.14 At times, resort to circumstantial evidence is imperative since to insist on direct testimony would, in many cases, result in setting felons free and deny proper protection to the community.15

Section 4 of Rule 133 of the Rules of Court provides that circumstantial evidence is sufficient for conviction if the following requisites are complied with:

(1) there is more than one circumstance;

(2) the facts from which the inferences are derived are proven; and

(3) the combination of all the circumstances is such as to produce a conviction beyond reasonable doubt.

All the circumstances must be consistent with each other, consistent with the hypothesis that the accused is guilty, and at the same time inconsistent with the hypothesis that he is innocent.16 Thus, conviction based on circumstantial evidence can be upheld, provided the circumstances proven 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.17

After a careful scrutiny of the evidence presented in this case in the light of the standards set forth above, the Court holds that the evidence adduced by the prosecution adequately proved the guilt beyond reasonable doubt of the herein appellants. The following circumstances, when pieced together, lead to the ineluctable conclusion that appellants raped and killed the victim:

1. At around 8 p.m. on August 21, 1995, the victim, XXX, along with her younger brothers YYY and ZZZ, watched television at the house of their neighbor, Aling Fely, located at Ilaya, Alabang, Muntinlupa.

2. At around 9 pm., YYY and ZZZ left Aling Fely’s house and waited for their sister XXX at the back of the house of another neighbor, Lalo Salapaz. Then, they saw XXX take the opposite route passing through a narrow alley.

3. YYY was about to call his sister when he saw appellants Alejandro, Christopher and Michael pull and drag XXX who was then struggling to free herself. Michael even covered XXX’s mouth as she was crying.

4. The place where XXX was forcibly abducted was well-illuminated by the billboard lights of the Nescafe compound in Alabang, Muntinlupa, which made it possible for YYY and ZZZ to recognize appellants as the ones who abducted XXX.

5. That night of August 21, 1995 was the last time XXX was seen alive by her two younger brothers, as after that night, XXX never returned home.

6. Two days after or on August 23, 1995, the Criminal Investigation Command of San Pedro, Laguna received a report about a lifeless body found at the vacant lot in Pacita Complex, San Pedro, Laguna. Policemen and investigators were immediately dispatched to the place. There they saw the lifeless and naked body of a girl, with her legs spread-eagled and with a piece of wood stuck into her mouth. The body was later identified as that of XXX. Scattered beside her were the clothes she was wearing at the time she disappeared.

7. The post-mortem examination of the body of XXX revealed that she sustained hematoma at the back of her head and right ear, and had been sexually abused as shown by the hymenal laceration at 6 o’clock position, and other lacerations on her vaginal wall.

8. Dr. Rolando Victoria, the medico-legal officer who conducted the autopsy, opined that, based on the injuries and lacerations sustained by XXX, the latter must have died within 48 hours prior to the autopsy on August 23, 1995, which time is compatible to the time when she was last seen alive and being dragged by appellants on August 21, 1995.

All the aforementioned circumstances have been duly proven and established. Circumstantial evidence is considered sufficient when the facts from which the inferences are derived are themselves duly proved. Clearly then, the prosecution has established appellants’ culpability through these established facts which constitute an unbroken chain of events leading to the conclusion of guilt on the part of the appellants. There is thus moral certainty that they authored the crime charged.

Appellants also contend that the prosecution’s principal witnesses, YYY and ZZZ, are not credible as they did not actually witness the commission of the crime.

We are not persuaded.

In previous decisions, the Court has had occasions to discuss the intrinsic nature of a rape case as one which involves only two parties, the rapist and the victim. Thus, conviction or acquittal in rape cases depends entirely on the credibility of the victim’s testimony because only the participants to the crime can testify as to its occurrence.18 Unfortunately in the instant case, the Court does not have the facility of hearing the victim’s testimony as she did not survive the brutality of her assailants. Hence, the prosecution had to rely on the testimonies of its principal witnesses, YYY and ZZZ, younger siblings of victim XXX.

We have carefully gone over the testimonies of YYY and ZZZ and we agree with the trial court’s finding that despite rigorous cross-examination by no less than three defense counsels, their testimonies remained unshaken. The brothers were consistent and unwavering in their declaration that they saw appellants drag their sister XXX on the night of August 21, 1995. The trial court was in the best position to assess the credibility of YYY and ZZZ, having had the direct opportunity to observe their demeanors and manner of testifying while on the witness’ box. Well-entrenched is the rule that in the matter of credibility of witnesses, the trial court’s findings are accorded finality and should not be disturbed on appeal, unless the court has overlooked certain facts of weight and substance, which if considered, would alter the result of the case.19 We find nothing on record that would compel us to deviate from such rule or to overturn the trial court’s assessment of the credibility of both YYY and ZZZ.

Appellants argue that the failure of YYY and ZZZ to come to the rescue of their sister and to inform their parents of the incident are contrary to human experience. On this score, we agree with the Solicitor General’s rationale to wit:

YYY and ZZZ are children. As such, they cannot be expected to deliberate and act as adults do. While an adult would normally come to the rescue of a child in distress, a minor cannot be expected to do the same. Children, under ordinary circumstances, would first think of their own safety, and not of rescuing another child in trouble. As explained by the brothers, they did not dare help their sister, or even tell their parents about the abduction, since they feared that appellants, who are definitely stronger than they are, would take them away like they did their sister. This fear was heightened by the fact that appellants were neighbors who lived thereby.20

Indeed, behavioral responses of witnesses are diverse when they are confronted with startling occurrences. In fact, there is no uniform reaction or standard behavioral response to grisly events. The sealed lips of witnesses are but a natural and spontaneous reaction. They may opt to remain silent rather than to imperil their own lives and those of their own families.21 As we see it, the imputed reaction of YYY and ZZZ is thus understandable and does not at all diminish their credibility.

Appellants then resort to pointing inconsistencies/inadequacies in the testimonies of YYY and ZZZ, such as the title of the movie they watched on television in the house of Aling Fely; the exact time they arrived at the house of Aling Fely; and whether ZZZ shouted at the appellants upon seeing their sister XXX being dragged by them. To the mind of the Court, the inconsistencies/deficiencies alluded to are too trivial to merit consideration, referring as they do to minor and irrelevant matters. For sure, it is of little or no significance at all as to what time the siblings arrived at the house of Aling Fely. It is too petty, as well, to quibble over the title of the movie they watched on Aling Fely’s television. What is important is that YYY and ZZZ saw the three appellants perform the acts preparatory to their commission of the crime. The Court is thus consistent in ruling that minor incongruences even serve to strengthen, rather than weaken, the credibility of witnesses22 as they dispel the testimonies as rehearsed. Too, ample margin of error and understanding must be accorded to young witnesses like YYY, 10 years old, and ZZZ, 7 years old, who, much more than adults, would be gripped with tension due to the novelty of the experience of testifying before a court.23

Appellants claim that the charge against them was triggered by the long-standing feud between them and the victim’s parents, claiming that the parents were merely impelled by anger and revenge in implicating them. The Court finds such claim flimsy and inconceivable. For, it is highly unnatural for parents to impute such a serious crime as rape with homicide if their motive were other than a fervent desire to seek justice for their daughter.

At bottom, all that appellants could proffer by way of defense are denial and alibi, which, unfortunately for them, are inherently weak and cannot prevail over the positive and credible testimonies of the prosecution witnesses. A denial, unsubstantiated by clear and convincing evidence, is negative, self-serving and merits no weight in law.24 On the other hand, for alibi to prosper, the hornbook rule requires a showing that the accused was at another place at the time of the perpetration of the offense and that it was physically impossible for him to be at the scene of the crime at the time of its commission.25 The accused must not only prove that he was somewhere else when the crime was committed; he must also convincingly demonstrate that it was physically impossible for him to be at the locus criminis at the time of the incident.

A thorough examination of the evidence would show that appellants failed to meet the requirements of alibi. All three of them claim that they were in their respective houses when the crime happened. However, considering that their houses are located at Ilaya Street, Alabang, Muntinlupa, and the victim XXX was abducted in the same neighborhood, it is, therefore, not physically impossible for them to be present thereat when XXX was abducted, subsequently raped and killed. What is clear from the evidence is that Alejandro, Chrsitopher and Michael were all within the vicinity of Alabang, Muntinlupa on the night of August 21, 1995. Also, appellants’ presence in San Pedro, Laguna where the lifeless body of the victim was found, cannot be ruled out considering that the distance between Alabang, Muntinlupa and San Pedro, Laguna can be negotiated in 30 minutes by land transportation. In short, appellants failed to establish by clear and convincing evidence the physical impossibility of their presence at the scene of the crime on the date and time of its commission.

From the evidence on record, it is beyond doubt that the three appellants conspired in the commission of the crime charged. Their concerted actions point to their joint purpose and community of interest. We, thus, hold all appellants guilty beyond reasonable doubt of the crime of Rape With Homicide.

The courts below imposed the death penalty upon appellants pursuant to R.A. No. 765926 which imposes the penalty of death whenever the victim is raped and at the same time killed on the occasion or by reason of the rape.

In view, however, of the passage of R.A. No. 9346,27 otherwise known as the Anti-Death Penalty Law, which prohibits the imposition of death penalty, the penalty of reclusion perpetua without eligibility for parole should instead be imposed.28 Accordingly, appellants shall thus be sentenced with reclusion perpetua without eligibility for parole in lieu of the penalty of death.

With regard to the civil indemnity, we rule that the heirs of XXX are entitled to the amount of P100,000.00 in keeping with the current jurisprudence authorizing the mandatory award of P50,000.00 in case of death, and P50,000.00 upon the finding of the fact of rape.29

As to moral damages, the Court deems it just and reasonable that in cases of rape with homicide, the heirs of the victim should be awarded the amount of P75,000.00.30

As regards the actual damages, inasmuch as the actual amount of loss had not been proven, we grant the amount of P25,000.00 as temperate damages in lieu of actual damages on the ground that it was reasonable to expect that the family of the victim incurred expenses for the coffin, burial and food during the wake.31

Finally, exemplary damages in the sum of P100,000.00 are likewise imposed on appellants to serve as a deterrent to serious wrongdoings and as a vindication of undue sufferings and wanton invasion of the rights of a victim.32

WHEREFORE, the decision dated February 21, 2005 of the Court of Appeals is hereby AFFIRMED with the following MODIFICATIONS:

(1) Appellants Christopher Padua, Alejandro Padua and Michael Dullavin are each sentenced to reclusion perpetua, conformably with R.A. No. 9346, without eligibility for parole; and

(2) They are ordered to indemnify the heirs of XXX, the following: (a) P100,000.00 as civil indemnity; (b) P75,000.00 as moral damages; (c) P25,000.00 as temperate damages; and (d) P100,000.00 as exemplary damages.

Costs de oficio.

SO ORDERED.

CANCIO C. GARCIAAssociate Justice

WE CONCUR:

REYNATO S. PUNOChief Justice

LEONARDO A. QUISUMBINGAssociate Justice

CONSUELO YNARES-SANTIAGOAsscociate Justice

ANGELINA SANDOVAL-GUTIERREZAssociate Justice

ANTONIO T. CARPIOAsscociate Justice

MA. ALICIA AUSTRIA-MARTINEZAssociate Justice

RENATO C. CORONAAsscociate Justice

(ON LEAVE)CONCHITA CARPIO MORALESAssociate Justice

ROMEO J. CALLEJO, SR.Asscociate Justice

(ON OFFICIAL LEAVE)ADOLFO S. AZCUNAAssociate Justice

DANTE O. TINGAAsscociate Justice

MINITA V. CHICO-NAZARIOAssociate Justice

PRESBITERO J. VELASCO, JR.Asscociate Justice

ANTONIO EDUARDO B. NACHURAAssociate Justice

C E R T I F I C A T I O N
Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above decision were reached in consultation before the case was assigned to the writer of the opinion of the Court.
REYNATO S. PUNOChief Justice

Footnotes

1 Penned by Associate Justice Fernanda Lampas Peralta, with Presiding Justice Ruben T. Reyes and Associate Justice Josefina Guevarra-Salonga, concurring; Rollo, pp. 3-17.
2 Penned by Judge Stella Cabuco Andres; CA Rollo, pp. 82-100.
3 G.R. Nos. 147678-87, July 4, 2004, 433 SCRA 640.
4 In our Resolution of August 17, 2004.
5 G.R. No. 167693, September 19, 2006.
6 CA Rollo, pp. 14-15.
7 CA Rollo, pp. 288-309.
8 CA Rollo, pp. 82-100.
9 Administrative Matter No. 03-03-22-SC.
10 Rollo, p. 2.
11 Supra note 3.
12 CA Rollo, pp. 330-358.
13 People v. Lopez, G.R. No. 131151, August 25, 1999, 313 SCRA 114.
14 People v. Ayola, G.R. No. 138923, September 4, 1002, 364 SCRA 451.
15 People v. Ramos, G.R. No. 104497, January 18, 1995, 240 SCRA 191.
16 People v. Pabiona, G.R. No. 145803, June 30, 2004, 433 SCRA 301.
17 People v. Lopez, supra note 11.
18 People v. Tacipit, G.R. No. 109140, March 8, 1995, 242 SCRA 241; People v. Ching, G.R. No. 103800, January 19, 1995, 240 SCRA 267.
19 People v. Abatayo, G.R. No. 139456, July 7, 2004, 433 SCRA 562.
20 Rollo, p. 47.
21 People v. Jamiro, G.R. No. 117576, September 18, 1997, 279 SCRA 290.
22 People v. De Leon, G.R. No. 115367, September 28, 1995, 248 SCRA 609.
23 People v. Abaño, G.R. No. 142728, January 23, 2002, 374 SCRA 431.
24 People v. Alviz, G.R. Nos. 144551-55, June 29, 2004, 433 SCRA 164.
25 People v. Gonzales, G.R. No. 141599, June 29, 2004, 433 SCRA 102.
26 Otherwise known as the Death Penalty Law.
27 Approved on June 24, 2006.
28 Supra note 5.
29 People v. Tablon, G.R. No. 137280, March 13, 2002, 379 SCRA 280.
30 People v. Magallanes, G.R. No. 136299, August 29, 2003, 410 SCRA 183.
31 People v. Abrazaldo, G.R. No. 124392, February 6, 2003, 397 SCRA 137.
32 People v. Larrañaga, G.R. Nos. 138874-75, February 3, 2004, 421 SCRA 530.

G.R. No. 168411, Arzagon v. Ligo

Republic of the Philippines
SUPREME COURT
Manila

EN BANC

DECISION

February 15, 2007

G.R. No. 168411
BIENVENIDO A. CERBO, JR., ANGELO O. MONTILLA, and GERONIMO P. ARZAGON, </b>Petitioners,
vs.
THE COMMISSION ON ELECTIONS, SUHARTO T. MANGUDADATU, DATU PAX S. MANGUDADATU and DONATO A. LIGO, Respondents.

D E C I S I O N
CARPIO MORALES, J.:

, J.:

Petitioners Bienvenido A. Cerbo, Jr., Angelo O. Montilla, and Geronimo P. Arzagon were candidates for representative, governor and vice-governor, respectively of Sultan Kudarat in the May 10, 2004 elections.

Respondents Suharto T. Mangudadatu, Datu Pax S. Mangudadatu and Donato A. Ligo, on the other hand, were petitioners’ respective opponents for the same positions.

During the provincial canvassing of the Municipal Certificates of Canvass (COCs) by the Provincial Board of Canvassers (PBOC), petitioners objected to the inclusion of the COC of the Municipality of Palimbang, Sultan Kudarat. The PBOC overruled the objection on May 15, 2004. On even date, petitioners filed with the PBOC a notice of appeal, but they did not pursue the appeal.

The following day or on May 16, 2004, petitioners filed with the PBOC a "Petition for Correction of Manifest Errors and/or to Exclude Certificates of Canvass of the Municipalities of Palimbang and Lutayan, Sultan Kudarat."1 In said petition, petitioners prayed that the proclamation of the congressional and local positions be held in abeyance until such time that the manifest errors were rectified. The PBOC verbally denied the petition and no appeal was taken therefrom.

The PBOC thus proclaimed, also on May 16, 2004, respondents as winners of the contested positions.

On May 31, 2004, petitioners filed with the Commission on Elections (COMELEC) a "Petition for Correction of Manifest Errors and Annulment of Proclamation"2 alleging, inter alia, that the proclamation of respondents was surreptitious, haphazard and illegal as the same was made despite the filing with the PBOC of a notice of appeal of its May 15, 2004 ruling and of a petition for correction of manifest errors. They thus prayed that the proclamation of respondents be set aside and that the Municipal Board of Canvassers (MBOC) of Palimbang be directed to reconvene and make the necessary corrections, and to proclaim the winning candidates based thereon.3

In their Answer with Motion to Dismiss4 filed before the COMELEC, respondents contended that they were legally proclaimed by the PBOC after petitioners did not appeal the PBOC May 15, 2004 order overruling their objection to the exclusion of the Palimbang COC; and the PBOC had denied petitioners’ petition for correction of manifest errors which ruling, like that of May 15, 2004, petitioners did not appeal to the COMELEC.

The COMELEC First Division, by Order of June 29, 2004,5 suspended the effects of the proclamation of respondents after finding that the "documents submitted by petitioners, though convincing, cannot, without an incisive look and investigation, warrant outright annulment of the Statement of Votes or of the questioned Certificates of Canvass."6 And it resolved "to conduct an examination of the authenticity and genuineness of the elections returns pertaining to the Municipalities of Lutayan and Palimbang Sultan Kudarat using the COMELEC copy to determine their reliability as valid basis of the proclamation of Private Respondents, and thereafter render its resolution."7

Parties from both sides filed motions for reconsideration8 of the June 29, 2004 COMELEC First Division Order.

The COMELEC First Division, by Order9 of July 23, 2004, granted respondent Suharto T. Mangudadatu’s Motion for Reconsideration for lack of jurisdiction over petitioners’ petition, he having already been proclaimed as congressman. It accordingly set aside its order suspending the effects of his proclamation.

By Resolution10 dated August 16, 2004, the COMELEC First Division dismissed petitioners’ petition for correction of manifest errors, holding as follows:

As shown in the records and as admitted by the petitioners themselves, on May 14, 2004, they filed a written petition to exclude the COC from Palimbang. On May 15, 2004, the respondent PBOC denied the petition and included the same in the provincial canvass.

While the petitioners manifested their intent to appeal, no appeal was actually made and perfected. Because of this failure to appeal, the ruling of the board including the COC of Palimbang in the provincial canvass has become final.

x x x x

On the issue of correction of manifest error in the COC and SOV of Palimbang, the same cannot prosper. First, the errors to be corrected should pertain to tabulations of the entries. The cited errors by the petitioners were not relative to the tabulation but to the disparity between the number of precincts canvassed for the national and local positions; and the difference between the sequence of precincts listed in the local SOV and the national SOV.

Second, in the alleged errors of the entries in the election returns and the SOV by Precincts, the petitioners also questioned the integrity of the election returns, thereby, putting doubt whether there were indeed errors in said documents.

Third, the petition for correction of manifest error was already denied by the respondent board. The proper procedure under Section 7, Rule 27 of the Comelec Rules of Procedure should be to appeal said ruling. However, the petitioners failed to do so. The ruling, therefore, has already attained finality.

x x x x

As to the non-inclusion of the Lutayan COC in the petition [filed before the COMELEC], petitioners argued that it was mere oversight on the part of the petitioners. They asserted, moreover, that in the exercise of the broad and plenary powers of the Commission, the latter can take cognizance of the same.

We are not convinced. Granting that the [non-]inclusion of the Lutayan COC was just a mere oversight, still the Commission cannot pass upon the authenticity and genuineness of the same in the instant case. Per the aforementioned procedures, such ground should be raised before the appropriate board of canvassers. The Commission has only an appellate jurisdiction over the same.

Even if this case be considered as one for correction of manifest error of the COC/SOV of Lutayan the same must also fail. The petitioners failed to specify the errors that are supposed to be manifest and are to be corrected. What they alleged in their memorandum are grounds proper for election protest or exclusion of the COC and SOV, such as statistical improbability, abnormal turn out of voters, and other defects and abnormalities.

Furthermore, with respect to the herein case filed against respondent Datu Pax Mangudadatu, the same is deemed to have been abandoned by the filing of an election protest with the Commission by petitioner Montilla. The protest was docketed as EPC No. 2004-12. It has been held by the Supreme Court that the filing of an election protest or a petition for quo warranto precludes the subsequent filing of a pre-proclamation controversy or amounts to the abandonment of one already filed.

One of the exceptions to the above doctrine is when the protest was filed ad cautela. A scrutiny of the protest filed by Montilla, however, shows that EPC NO. 2004-12 was not filed ad cautela.

x x x x11 (Emphasis and underscoring supplied)

Petitioners moved to reconsider the August 16, 2004 Resolution of the COMELEC First Division, arguing that, among other things, it was erroneous to dispose the petition on purely procedural grounds and not to treat it as an original petition for correction of manifest errors which deserves deeper scrutiny and decisive treatment. Petitioners also argued that it was erroneous to consider petitioner Montilla’s filing of an election protest as an abandonment of his petition for correction of manifest errors.

By Resolution of May 21, 2005,12 the COMELEC En Banc denied petitioners’ Motion for Reconsideration, it finding that the issues raised therein appear to have been resolved and amply discussed by the First Division.

Hence, this petition for certiorari which faults the COMELEC to have

A.

. . . COMMITTED GRAVE ABUSE OF DISCRETION, AMOUNTING TO LACK OF JURISDICTION, IN CLOSING ITS EYES TO THE EVIDENCE ON RECORD AND IN FAULTING PETITIONERS FOR THEIR ALLEGED PROCEDURAL LAPSES.

B.

. . . EVADED THE PERFORMANCE OF A POSITIVE DUTY SPECIFICALLY ENJOINED BY LAW AND THE CONSTITUTION WHEN IT DISMISSED THE PETITION FOR CORRECTION OF MANIFEST ERRORS, THEREBY GRAVELY ABUSING ITS DISCRETION, AMOUNTING TO LACK OF JURISDICTION.

C.

. . . GRAVELY ABUSED ITS DISCRETION IN TOLERATING THE IRREGULAR PRACTICE OF ALLOWING, WITHOUT JUSTIFIABLE REASON, THE NON-PARTICIPATION OF A COMELEC COMMISSIONER IN THE ISSUANCE OF ITS RESOLUTION.

D.

. . . GRAVELY ABUSED ITS DISCRETION IN FINDING THAT PETITIONERS CERBO AND MONTILLA ARE DEEMED TO HAVE ABANDONED THEIR PETITION FOR CORRECTION OF MANIFEST ERRORS.13

The petition fails.

With respect to petitioner Cerbo who ran for the position of congressman, the COMELEC indeed had no jurisdiction over his petition, his opponent respondent Suharto T. Mangudadatu having been proclaimed as such. It is well settled that once a candidate is proclaimed as representative, the opponent’s recourse is to file an election protest with the House of Representatives Electoral Tribunal which has the sole and exclusive jurisdiction over all contests relative to the election, returns and qualifications of members of the House of Representatives, and this holds true even if there is an allegation of nullity of proclamation.14

With respect to petitioner Montilla, indeed, he abandoned his petition for correction of manifest errors when he filed an election protest against respondent Datu Pax S. Mangudadatu. Dumayas, Jr. v. Commission on Elections15 so teaches:

As a general rule, the filing of an election protest or a petition for quo warranto precludes the subsequent filing of a pre-proclamation controversy or amounts to the abandonment of one earlier filed, thus depriving the COMELEC of the authority to inquire into and pass upon the title of the protestee or the validity of his proclamation. The reason for this rule is that once the competent tribunal has acquired jurisdiction of an election protest or petition for quo warranto, all questions relative thereto will have to be decided in the case itself and not in another proceeding, so as to prevent confusion and conflict of authority.16 (Underscoring supplied)

While the filing of a protest ex abundante ad cautela17 is not considered an abandonment of the petition for correction of manifest errors, this Court quotes with approval the following observations of the COMELEC

in brushing aside as mere afterthought the claim of Montilla in a manifestation he subsequently filed that his election protest was filed ex abundante ad cautela and that he inadvertently omitted to indicate in its caption that it was one such:

In an effort perhaps to cure the defect, Montilla filed a manifestation stating that it was actually [ex abundante] ad cautela but that he inadvertently omitted to caption the protest as such. This however should not be given weight. A reading of the allegation in the protest reveals that there was no mention therein that it was only filed as a precautionary measure in case his petition for correction of manifest error is resolved adversely. There was even no mention therein that a case for correction of manifest error and annulment between the same parties is pending before the Commission. To top it all, petitioner Montilla even asked for an immediate relief in his protest, i.e. an order to direct the concerned Election Officers and Treasurers to bring all the ballot boxes and other election paraphernalia in the protested municipalities. Verily, the protest was not [ex abundante] ad cautela and the manifestation was a mere afterthought.18 (Underscoring supplied)

As for the case of petitioner Arzagon, indeed, he failed to comply with the COMELEC Rules of Procedure, the pertinent provision of which reads:

RULE 27 . . . .

x x x x

Sec. 5. Pre-proclamation Controversies Which May Be Filed Directly With the Commission. – (a) The following pre-proclamation controversies may be filed directly with the Commission:

x x x x

2) When the issue involves the correction of manifest errors in the tabulation or tallying of results during the canvassing as where (1) a copy of the election returns or certificate of canvass was tabulated more than once, (2) two or more copies of the election returns of one precinct, two or more copies of the election returns of one precinct, or two or more copies of certificate of canvass were tabulated separately, (3) there had been a mistake in the copying of figures into the statement of votes or into the certificate of canvass, or (4) so-called returns from non-existent precincts were included in the canvass, and such errors could not have been discovered during the canvassing despite the exercise of due diligence and proclamation of the winning candidates had already been made.

x x x x (Underscoring supplied)

A petition for correction of manifest errors filed directly with the COMELEC should thus pertain to errors that could not have been discovered during the canvassing, despite the exercise of due diligence. Petitioner Arzagon, however, together with the other petitioners, initially filed a petition for correction of manifest errors with the PBOC, evidently showing that the errors sought to be corrected were discovered during the canvassing.

On his failure to appeal the PBOC’s dismissal of his petition for correction of manifest errors, petitioner Arzagon claims that the PBOC did not indicate the reasons therefor, hence, he was prevented from appealing the same.

Even if, however, this Court may, in the interest of justice, treat the petition for correction of manifest errors filed with the COMELEC as an appeal from the PBOC’s verbal ruling denying petitioners’ similar petition filed with the latter, its dismissal by the COMELEC is in order.

Specifically with respect to the Palimbang COC, since its exclusion had earlier been denied by the PBOC, and the denial was not appealed, it had become final. The subsequent filing of a petition for correction of manifest errors in the Palimbang COC with the PBOC appeared to be just an attempt to substitute the lost appeal, which is impermissible.

With respect to petitioners’ prayer before this Court for correction of manifest errors in the Lutayan COC, the same cannot be considered as an appeal from the verbal denial by the PBOC of a similar petition they earlier filed. For the petition filed with the COMELEC does not include alleged manifest errors in the Lutayan COC, hence, the COMELEC had no jurisdiction to rule thereon.

WHEREFORE, the petition is DISMISSED.

Costs against petitioners.

SO ORDERED.

CONCHITA CARPIO MORALESAssociate Justice

WE CONCUR:

REYNATO S. PUNOChief Justice

LEONARDO A. QUISUMBINGAssociate Justice

ANGELINA SANDOVAL-GUTIERREZAsscociate Justice

CONSUELO YNARES- SANTIAGOAssociate Justice

ANTONIO T. CARPIOAsscociate Justice

MA. ALICIA AUSTRIA-MARTINEZAssociate Justice

(On Leave)RENATO C. CORONAAsscociate Justice

ROMEO J. CALLEJO, SR.Associate Justice

DANTE O. TINGAAsscociate Justice

ADOLFO S. AZCUNAAssociate Justice

MINITA V. CHICO-NAZARIOAsscociate Justice

CANCIO C. GARCIAAssociate Justice

PRESBITERO J. VELASCO, JR.Asscociate Justice

(On Leave)ANTONIO EDUARDO B. NACHURAAssociate Justice

C E R T I F I C A T I O N

Pursuant to Article VIII, Section 13 of the Constitution, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court.

REYNATO S. PUNOChief Justice

Footnotes

1 Rollo, pp. 94-99.

2 Id. at 82-93.

3 Id. at 91

4 Id. at 164-179.

5 Id. at 196-198.

6 Id. at 197-198.

7 Id. at 198.

8 Id. at 199-243.

9 Id. at 246-250.

10 Id. at 41-60.

11 Id. at 52-57.

12 Id. at 63-74.

13 Id. at 22.

14 Aggabao v. Commission on Elections, G.R. No. 163756, January 26, 2005, 449 SCRA 400, 404-405.

15 G.R. No. 141952-53, April 20, 2001, 357 SCRA 358.

16 Id. at 367.

17 Mitmug v. Commission on Elections, G.R. Nos. 106270-73, February 10, 1994, 230 SCRA 54, 58; Olfato, et al. v. COMELEC, et al., 191 Phil. 302, 350 (1981).

18 Rollo, p. 57.