Supreme Court Decisions

G.R. No. 42449 July 5, 1989 - C and C COMMERCIAL CORPORATION, ET AL. v. PHILIPPINE NATIONAL BANK, ET AL.

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THIRD DIVISION

[G.R. No. 42449. July 5, 1989.]

C & C COMMERCIAL CORPORATION and CLARA REYES PASTOR and other STOCKHOLDERS OF C & C COMMERCIAL CORPORATION similarly situated, Petitioners, v. PHILIPPINE NATIONAL BANK, NATIONAL INVESTMENT DEVELOPMENT CORPORATION, PROVINCIAL SHERIFF OF RIZAL, CITY SHERIFF OF MANILA and THE HON. JUDGE AUGUSTO VALENCIA, Presiding Judge, Quezon City Branch XXXI, Court of First Instance of Rizal, Respondents.

Raymundo A. Armovit, for Petitioners.

Arcilla & Atencio for petitioner-movant Reyes-Pastor.

Domingo A. Santiago, Jr., Tomas N. Prado and Manuel S. Abedo for respondent PNB.

Rolando P. De Cuesta, Cecilio G. Parco and Gaudencio A. Palafox for respondent NIDC.

SYLLABUS

1. REMEDIAL LAW; SPECIAL CIVIL ACTION; CERTIORARI. — This Court possesses no authority to rule on motion for termination of receivership, since the only question involved in certiorari is jurisdiction. Besides, it is premature to act on said motion for reconsideration of the lower court’s order denying petitioner’s omnibus motion to annul the joint receivership is still pending resolution.

2. COMMERCIAL LAW; BANKING LAWS; P.D. 385 MANDATORY FORECLOSURE SALES FOR GOVERNMENT FINANCIAL INSTITUTION. — The law makes it "mandatory for government financial institutions . . . to foreclosure the collaterals and/or securities for any loan, credit, accommodation and/or guarantees granted by them whenever the arrearages on such account, including accrued interest and other charges amount to at least twenty percent (20%) of the total outstanding obligations, including interests and other charges, as appearing in the books of account and/or related records of the financial institution concerned. (P.D. 385, Sec. 1.)

3. ID.; ID.; ID.; WHEN INJUNCTION LIES. — An injunction will not lie against foreclosure sales sought by government financial institution concerned that twenty percent (20%) of the outstanding arrearages had been paid after the filing of foreclosure proceedings.

4. ID.; ID.; ID.; ID.; UNSECURED OBLIGATIONS CANNOT BE SATISFIED IN THE FORECLOSURE SALES. — While it is mandatory for government financial institution to foreclose a mortgage upon failure of the debtor to meet his obligation, an injunction will lie against the foreclosure sales if included among the obligation sought to be satisfied by it is an unsecured obligation. The prohibition in P.D. 385 is not intended to make the debtor’s mortgaged property answer for an unsecured obligation.

5. ID.; ID.; ID.; ID.; MISMANAGEMENT AND MISAPPROPRIATION BY GOVERNMENT FINANCIAL INSTITUTIONS. — notwithstanding P.D. 385 the government financial institutions who were charged with misappropriation and/or mismanagement of the proceeds of the loan should be enjoined from proceeding with the sale at public auction of the foreclosed chattels pending determination of said issues, including the issue of failure of consideration.

6. CIVIL LAW; CREDIT TRANSACTIONS; ASSIGNMENT OF CREDITS; CONSENT OF DEBTOR, NOT NECESSARY. — The assignment of the mortgage becomes valid when there is a meeting of the minds between the assignor of the credit and his assignee. The consent of the debtor is not necessary and it is sufficient that the assignment be brought to his knowledge in order to be binding upon him.

D E C I S I O N

CORTES, J.:

The applicability to the case at bar of Presidential Decree No. 385, dated January 31, 1974, prohibiting the issuance of injunctions against foreclosure sales sought by government financial institutions is the principal problem that needs to be resolved in the instant special civil action for certiorari.

The controversy now before this Court traces its roots to the period between February 27, 1957 and December 20, 1960 when petitioner C & C Commercial Corporation (now Asbestos Cements Products Phil. Inc., hereinafter referred to as ACPPI) opened seven letters of credit with the respondent Philippine National Bank (hereinafter referred to as PNB) to import machines and equipment for its plant. Since petitioner’s obligations under the said letters of credit totalling five million four hundred fifty-one thousand eight hundred fifty-one pesos and eighty-three centavos (P5,451,851.83) as of January 31, 1968 were not paid, PNB instituted on March 13, 1968 a collection suit with a prayer for preliminary attachment against ACPPI, impleading Clara Reyes Pastor as party defendant in her capacity as joint and solidary debtor and controlling stockholder.

However, instead of proceeding with the collection suit, PNB agreed, at the behest of Mrs. Pastor, as majority stockholder of ACPPI, to enter into a Voting Trust Agreement on March 5, 1969 to protect PNB’s interests in ACPPI. The collection suit was therefore dismissed without prejudice. Private respondents, PNB and its subsidiary or affiliate, the National Investment Development Corporation (hereinafter referred to as NIDC), as the trustees named under the said agreement, immediately proceeded to take over the management of ACPPI pursuant to the agreement which granted them "full authority, subject only to the limitations set by law and the other conditions set forth herein, to manage the affairs and the accounts and properties of C & C Commercial Corporation, Inc.; to choose its directors and key officers; to safeguard its interest and those of its creditors; and in general, to exercise all such powers and discharge such functions as inherently pertain to the ownership and/or management of such corporation" for a period of five (5) years from the date of its execution or up to March 1974 [Rollo, pp. 32-40].

During the time that the Voting Trust Agreement was in force, ACPPI executed a chattel mortgage dated September 6, 1971 over its personal properties in favor of NIDC as security for the loan of seven hundred thousand pesos (P700,000.00) granted by the latter to the former to finance the production of asbestos cement products and their exportation to Brunei and to repair/rehabilitate its plant building which had been damaged by typhoon "Yoling"

On August 27, 1973, the accounting firm of Sycip, Gorres and Velayo, after examining the management and operations of ACPPI for the first three years under the Voting Trust Agreement, submitted a report finding that the PNB/NIDC management of ACPPI was a complete and disastrous failure. In view of this report, petitioners ACPPI (then C & C Commercial Corporation), Clara Reyes Pastor and other stockholders of ACPPI similarly situated filed a complaint on October 16, 1973 in the Quezon City Branch of the Court of First Instance of Rizal for the termination of the Voting Trust Agreement with a prayer for an award of damages in the sum of about twenty-seven million pesos (P27 M) alleging, inter alia, that by reason of the grossly negligent or incompetent management of ACPPI by private respondents, the corporation suffered huge losses. In the aforesaid case, which was docketed as Civil Case No. Q-18176, ACPPI also sought as an ancillary remedy the appointment of a receiver.

On November 27, 1973, the respondents PNB and NIDC filed their answer to the complaint denying the charge of mismanagement and alleging that ACPPI’s indebtedness to PNB had reached an amount of eleven million five hundred thirty-eight thousand twenty-nine pesos and sixty-three centavos (P11,538,029.63) as of August 31, 1973 excluding daily interest, and to NIDC, one million two hundred nineteen thousand nine hundred eighty-two pesos (P1,219,982.00) as of April 15, 1973 excluding daily interest.

On January 22, 1974, the lower court issued an order appointing Bayani Barzaga as receiver. But subsequently, in an order dated November 13, 1974 — pursuant to an agreement reached between ACPPI, PNB and NIDC to provide a mutually acceptable mechanism for management of ACPPI pending the settlement negotiations between them — the court a quo converted the one-man receivership of Barzaga into a joint receivership, with PNB-NIDC nominee Atty. Ricardo L. Sadac and ACPPI nominee Atty. Roberto L. Bautista assuming office as joint receivers together with Barzaga.

In the meantime, on December 19, 1973, Development Bank of the Philippines (hereinafter referred to as DBP) executed a deed of assignment in favor of PNB whereby the former assigned to the latter its rights and interests under the promissory notes and deeds of real estate mortgages executed on May 16, 1960 and May 8, 1961 by ACPPI in favor of DBP for the principal amounts of four hundred ninety thousand pesos (P490,000.00) and seven hundred ninety-six thousand pesos (P796,000.00), respectively.

On March 11, 1974, PNB filed with the Provincial Sheriff of Rizal a "PETITION FOR SALE UNDER ACT 3135 AS AMENDED." The foreclosure sale initiated by PNB was not only to recover on the allegedly defaulted secured loans of four hundred ninety thousand pesos (P490,000.00) and seven hundred ninety-six thousand pesos (P796,000.00) assigned by DBP to PNB but also for: 1) the unsecured advances granted by PNB to ACPPI relating to the letters of credit opened sometime between 1957 and 1960; 2) the unsecured advances from PNB during the five-year period of the Voting Trust Agreement; and, 3) the interests, penalties and charges computed thereon during the same five-year period when PNB controlled and managed ACPPI. A foreclosure sale was thus sought to satisfy ACCPI’s total indebtedness to PNB in the amount of fourteen million five hundred seventy-one thousand seven hundred thirty-six pesos and eighty-seven centavos (P14,571,736.87) as of January 31, 1974.

ACPPI wrote a letter to the Board of Directors of PNB expressing its opposition to the contemplated extrajudicial foreclosure sale. In reply, PNB sent a letter agreeing to meet with ACPPI in settlement negotiations. However, ACPPI’s proposals for the settlement of its accounts with PNB were rejected for not being economically feasible and so, PNB made a final demand for payment with a warning that unless full payment or other satisfactory arrangement was made, PNB would proceed with the scheduled auction sale of the mortgaged properties on September 30, 1975.

On September 22, 1975, Civil Case No. 22047, a suit for nullification of the extrajudicial foreclosure proceedings with prayer for a writ of injunction, was filed by ACPPI against PNB and the Provincial Sheriff of Rizal in the Pasig Branch of the Court of First Instance of Rizal, contesting PNB’s foreclosure of the mortgage and the auction sale scheduled for September 30, 1975. Said court subsequently issued an order dated September 30, 1975 restraining the scheduled foreclosure sale and directing the maintenance of the status quo until further orders of the court.

Meanwhile, NIDC foreclosed the chattel mortgage executed by ACPPI on September 6, 1971 and filed with the Sheriff of the City of Manila a petition for the auction sale of "all the finished products in inventory located at the MORTGAGOR’s (ACPPI) plant at Barrio Napindan, Taguig, Rizal . . ." [Rollo, p. 165] in order to satisfy an alleged total indebtedness of ACPPI to NIDC amounting to one million eight hundred forty-five thousand one hundred nine pesos and twenty-two centavos (P1,845,109.22). On October 3, 1975, ACPPI instituted with the same Pasig Branch of the Court of First Instance of Rizal Civil Case No. 22133 for the nullification of the extrajudicial foreclosure proceedings sought by NIDC scheduled for October 16, 1975. The lower court also granted a temporary restraining order in the latter case.

On December 17, 1975, on separate motions to dismiss filed by the respondents PNB and NIDC in Civil Cases Nos. 22047 and 22133, respectively, the Court of First Instance dismissed said civil cases in separate decisions but on the common ground that these cases violate the procedural rule against splitting a single cause of action and also, that ACPPI, being under receivership, was without legal capacity to contest the foreclosures.

On January 5, 1976, ACPPI moved for leave to file a supplemental complaint with a prayer for the issuance of a writ of preliminary injunction in Civil Case No. Q-18176, the action for termination of the Voting Trust Agreement, in order to submit for adjudication in the same proceeding and before said court the renewed threats by PNB and NIDC to effect the sale at public auction of the foreclosed properties.

The lower court in an Order dated January 15, 1976 admitted the supplemental complaint but denied the application for injunction on account of the provision of Presidential Decree No. 385 prohibiting the issuance of restraining orders and temporary or permanent injunctions against any government financial institution in any action taken by such institution in compliance with the mandatory foreclosure provided in said decree.

Petitioners filed a motion for reconsideration of the order but the motion was denied. Hence, petitioners’ recourse to this Court by way of a special civil action for certiorari with injunction, alleging grave abuse of discretion on the part of respondent Judge Augusto Valencia, Presiding Judge of the Court of First Instance of Rizal, Quezon City Branch XXXI, in issuing the aforementioned orders.

In a resolution dated January 20, 1976, this Court resolved to issue a temporary restraining order to enjoin the sale by PNB and NIDC of the foreclosed properties scheduled on January 21 and 30, 1976.

On October 7, 1976, petitioner-movant Clara Reyes Pastor filed in the instant case a Motion for Termination of Receivership with Alternative Motion for Substitution of Receiver.

This Court however finds no legal basis for granting said motion as the receivership of ACPPI is not at all an issue in the instant case. Time and again, this Court has acknowledged that it possesses no authority to rule upon non-jurisdictional issues in a certiorari proceeding. Thus, "it is settled to the point of being elementary that the only question involved in certiorari is jurisdiction, either want of jurisdiction or excess thereof . . ." [F.S. Divinagracia Agro-Commercial Inc. v. Court of Appeals, G.R. No. L-47350, April 21, 1981, 104 SCRA 180, 191].

Besides, the said motion was premature. It must be noted that on September 25, 1975, petitioner ACPPI filed before the lower court an omnibus motion to annul the joint receivership, to which motion respondents filed their joint opposition on October 2, 1975. On October 8, 1975, the lower court issued an order denying petitioner’s aforementioned omnibus motion. Petitioner moved to reconsider the said order and this motion is still awaiting resolution by the trial court. In view of the pendency of the aforesaid motion for reconsideration, it would be premature for this Court to act on the motion for termination of receivership filed before it. Petitioners should await resolution by the lower court of their omnibus motion to annul joint receivership before resorting to this Court.chanrobles law library

The crucial problem to be dealt with in this petition is whether the trial court’s refusal to grant an injunction against the threatened foreclosure sales by PNB and NIDC constitutes grave abuse of judicial discretion amounting to lack or excess of jurisdiction.

The court a quo’s basis for denying the injunction sought by ACPPI is P.D. 385 which makes it "mandatory for government financial institutions. . .to foreclose the collaterals and/or securities for any loan, credit, accommodation and/or guarantees granted by them whenever the arrearages on such account, including accrued interest and other charges, amount to at least twenty percent (20%) of the total outstanding obligations, including interests and other charges, as appearing in the books of account and/or related records of the financial institution concerned." [Section 1, P.D. 385].

Pursuant to the aforesaid law:chanrob1es virtual 1aw library

Sec. 2. No restraining order temporary or permanent injunction shall be issued by the court against any government financial institution in any action taken by such institution in compliance with the mandatory foreclosure provided in Section 1 hereof whether such restraining order, temporary or permanent injunction is sought by the borrower(s) or any third party or parties, except after due hearing in which it is established by the borrower and admitted by the government financial institution concerned that twenty percent (20%) of the outstanding arrearages had been paid after the filing of foreclosure proceedings . . . [Emphasis supplied].

x x x

Since the arrearages on the PNB and NIDC loans cover the entire amount of the indebtedness, thus more than satisfying the 20% arrearages requirement under the law, it would seem that this case falls within the purview of the general rule laid down in P.D. 385. Injunction will not be granted except upon payment of twenty percent (20%) of the outstanding arrearages after filing of the foreclosure proceedings. This has not been done here. Nevertheless, the Court believes that, in view of the peculiar factual circumstances obtaining in the case, P.D. 385 should not have been applied peremptorily by the respondent trial judge.

I. THE PNB FORECLOSURE SALE:chanrob1es virtual 1aw library

The extrajudicial foreclosure sale sought by PNB is based on two deeds of real estate mortgage executed on May 16, 1960 and May 8, 1961, respectively, by ACPPI in favor of DBP to secure promissory notes for the principal amounts of four hundred ninety thousand pesos (P490,000.00) and seven hundred ninety-six thousand pesos (P796,000.00), respectively. PNB acquired all the rights and interests under the aforementioned deeds of mortgage by virtue of a deed of assignment executed by DBP in its favor on December 19, 1973.

But the PNB foreclosure sale seeks to satisfy not only the amounts stated in the secured promissory notes but also the unsecured advances amounting to some five million four hundred thousand pesos (P5.4 M) granted by PNB on account of the opening of letters of credit by ACPPI sometime between 1957 and 1960 before DBP assigned the mortgages to PNB in 1973. The Court’s inquiry is thus centered on whether the foreclosure sale pursuant to the DBP-assigned mortgage should proceed as ordered by the respondent trial judge considering that the sale also seeks to satisfy previously incurred unsecured obligations.

A. As to the DBP-assigned credits, there is no doubt that foreclosure can proceed as these were secured by appropriate mortgages. Moreover, contrary to petitioner’s pretensions, the validity of the assignment of the mortgage credit by DBP to PNB is beyond question. Article 1624 of the Civil Code provides that "an assignment of credits and other incorporeal rights shall be perfected in accordance with the provisions of Article 1475" which in turn states that "the contract of sale is perfected at the moment there is a meeting of the minds upon the thing which is the object of the contract and upon the price." The meeting of the minds contemplated here is that between the assignor of the credit and his assignee, there being no necessity for the consent of the debtor, contrary to petitioner’s claim. It is sufficient that the assignment be brought to his knowledge in order to be binding upon him. This may be inferred from Article 1626 of the Civil Code which declares that "the debtor who, before having knowledge of the assignment, pays his creditor shall be released from the obligation." This view of Manresa was already quoted with approval by this Tribunal. Thus:chanrob1es virtual 1aw library

x x x

The above-mentioned article (Article 1527 of the Old Civil Code) states that a debtor who, before having knowledge of the assignment, should pay the creditor shall be released from the obligation.

In the first place, the necessity for the notice to the debtor in order that the assignment may fully produce its legal effects may be inferred from the above. It refers to a notice and not to a petition for the consent which is not necessary. We say that the notice is not necessary in order that the legal effects may be fully produced, because if it should be omitted, such omission will not imply that the assignment will not exist legally, but that its effects will be limited to the parties thereto; at least, they will not reach the debtor [Sison v. Yap Tico, 37 Phil. 584, 587 (1918); Emphasis supplied].

As the petitioner does not claim absence of any notice of the assignment but only lack of its consent thereto, the validity of DBP’s assignment of the mortgage credit as well as the right of PNB as assignee, to foreclose the assigned mortgage, cannot be doubted.

B. However, petitioners question the inclusion of the unsecured obligations of ACPPI in the foreclosure sale. In this regard, petitioner advances the following proposition: The unsecured advances by PNB to ACPPI relating to the opening of letters of credit in 1957 cannot be tacked on to the mortgage loans acquired by PNB through assignment from DBP which are now being foreclosed. To do so would be to allow an originally unsecured loan to be covered by a mortgage securing another loan without the consent of the mortgagor. Since the foreclosure sale sought by PNB includes such unsecured obligations, petitioners argue that the same should be enjoined [Rollo, p. 25].

PNB sought to justify its inclusion of the unsecured obligations in the aggregate amount of indebtedness secured by the mortgages to be foreclosed by citing a provision in the assigned DBP Mortgage Contract which states:chanrob1es virtual 1aw library

Now, therefore, for and in consideration of the premises and as security for the payment of the note or notes approved in order and/or the interest there and/or other obligation arising thereunder or hereunder, the mortgagor does hereby transfer and convey by way of first mortgage, unto the Mortgagee, its successors and assigns, the real and/or personal properties described in the list appearing on the back of this document . . . [Rollo, p. 388].

However, the aforequoted terms of the mortgage contract do not support PNB’s conclusions. The mortgage contract clearly secures only the amount of the promissory note executed by ACPPI and the interest thereon and other obligations which may arise under the promissory note (hence, the word "thereunder") and under the mortgage contract (hence, the word "hereunder"). Certainly, the previously incurred debt of ACPPI cannot be embraced within the terms of the DBP mortgage contract which merely extends security to future, ** but not past obligations. PNB also argues in vain that the inclusion of the unsecured obligations in the contemplated foreclosure proceedings finds support in the law which states that" (i)t shall be mandatory . . . to foreclose the collaterals and/or securities for any loan, . to foreclose the collaterals and/or securities for any loan, credit accommodation and/or guarantees granted by them whenever the arrearages on such account, including accrued interest and other charges, amount to at least twenty percent of the total outstanding obligations, including interest and other charges, as appearing in the books of accounts and/or related records of the government financial institution concerned . . ." [Section 1, P.D. 385]. PNB maintains that the phrase "related records" may be interpreted to mean such records evidencing the mortgage credit assigned and other records of another government financial institution which are related to the assigned obligation. PNB’s stand is that the credits appearing in the records of the mortgagor or any other government financial institution, whether secured or unsecured must necessarily be included as long as they are related to the mortgage being foreclosed.

This argument must be rejected. The law, in authorizing a mandatory foreclosure by government financial institutions, contemplates secured obligations appearing in the books of accounts and/or related records of the government financial institution concerned. The clear terms of the law indicate that foreclosure shall be made on the "collaterals and/or securities for any loan, credit accommodation and/or guarantees granted by them" [Section 1, P.D. 385]. Since the original advances by PNB were not secured by any mortgage, these cannot be included in the foreclosure proceedings sought by PNB for the simple reason that foreclosure of mortgage presupposes an unpaid obligation secured by the mortgage. In addition, the rule is well settled that an action to foreclose a mortgage must be limited to the amount mentioned in the mortgage except in mortgage contracts securing future advancements [Lim Julian v. Lutero, 49 Phil. 703 (1926)].

In view of the fact that an unsecured obligation is being included among the obligations of ACPPI sought to be satisfied by the PNB foreclosure sale, the lower court’s blanket application of P.D. 385 and the consequent denial of ACPPI’s application for injunction against the threatened foreclosure by PNB constitute grave abuse of discretion. P.D. 385, in laying down the prohibition on the issuance of an injunction, did not intend to make the debtor’s mortgaged property answer for an unsecured obligation.

Since the petition for the PNB foreclosure sale was materially defective in that it included in the amount of the total indebtedness to be satisfied by the sale previously incurred unsecured obligations, the assailed order of the respondent judge denying ACPPI’s motion for the issuance of a preliminary injunction must accordingly be set aside and the extrajudicial foreclosure sale sought by PNB should be enjoined. This is without prejudice however to the right of PNB to petition for an extrajudicial foreclosure sale to satisfy the obligations specifically secured by the DBP-assigned mortgage after due publication of an appropriate notice of sale.

II. THE NIDC FORECLOSURE SALE:chanrob1es virtual 1aw library

ACPPI challenges the right of NIDC to foreclose the chattel mortgage in its favor on the grounds that (1) part of the principal loan secured by the NIDC mortgage was not expended for the purposes for which it was intended; and (2) the subsequent advances granted by NIDC during the time that the Voting Trust Agreement was in force are merely "fictitious" amounts and therefore, do not constitute valid and demandable obligations; hence, the mortgage securing the same is likewise void [Petition, p. 21; Rollo, p. 24].

In this case, NIDC sought to include certain advances granted to ACPPI during the lifetime of the Voting Trust Agreement in the total amount of the mortgage indebtedness secured by the chattel mortgage. Such action was based on an all-embracing clause in the mortgage contract allowing said mortgage to "stand as security for said obligations and any and all other obligations of the MORTGAGOR to the MORTGAGEE of whatever kind and nature, whether such obligations have been contracted before, during or after the constitution of this mortgage" [Rollo, p. 226].

Without passing upon the validity of this clause, the Court rules that in view of the dictum laid down in Filipinas Marble Corporation v. Court of Appeals [G.R. No. 68010, May 30, 1986, 142 SCRA 180], the foreclosure sale sought by NIDC should have been enjoined. The rationale for enjoining a foreclosure sale sought by a government financial institution charged with mismanagement and misappropriation of the proceeds of the loan secured by its mortgage, as aptly expressed in the aforementioned decision penned by Mr. Justice Gutierrez finds relevance in the instant case. Thus:chanrob1es virtual 1aw library

x x x

Presidential Decree No. 385 was issued primarily to see to it that government financial institutions are not denied substantial cash inflows, which are necessary to finance development projects all over the country, by large borrowers, who when they become delinquent, resort to court actions in order to prevent or delay the government’s collection of their debts and loans.

The government however is bound by basic principles of fairness and decency under the due process clause of the Bill of Rights. P.D. 385 was never meant to protect officials of government lending institutions who take over the management of a borrower corporation, lead that corporation to bankruptcy through mismanagement or misappropriation of its funds, and who, after ruining it, use the mandatory provisions of the decree to avoid the consequences of their misdeeds.

The designated officers of the government financing institution cannot simply walk away and then state that since the loans were obtained in the corporation’s name, then P.D. 385 must be peremptorily applied and that there is no way the borrower corporation can prevent the automatic foreclosure of the mortgage on its properties once the arrearages reach twenty percent (20%) of the total obligation no matter who was responsible. [At 188-189; Emphasis supplied].

x x x

In the Filipinas Marble case, petitioner Filipinas Marble Corporation (FMC) applied for a loan in the amount of five million dollars ($5 M) with respondent Development Bank of the Philippines (DBP) which was granted subject to the conditions, inter alia, that petitioner shall have to enter into a management contract with respondent Bancom Systems Control, Inc. (Bancom) and that the key officers/executives to be chosen by Bancom for the corporation shall be appointed only with DBP’s prior approval and made directly responsible to DBP. Pursuant to these conditions, FMC entered into a management contract with Bancom whereby the latter agreed to manage the company for a period of three years.

Subsequently, FMC filed a complaint seeking annulment of the deeds of mortgage and deed of assignment which it executed in favor of DBP in order to secure the five million dollars ($5 M) loan, averring failure of consideration with regard to the execution of the said deeds and claiming that the respondents and their directors/officers mismanaged and misspent the loan, leaving the petitioner "desolate and devastated." It charged respondents DBP and Bancom of abandoning the petitioner’s project for which the approved loan was intended.

This Court ruled that it cannot make any conclusions as to whether DBP and Bancom actually misappropriated and misspent the five million dollars ($5 M) loan as this matter should rightfully be litigated below in the main action. It thus held that

. . . (p)ending the outcome of such litigation, P.D. 385 cannot automatically be applied for if it is really proven that respondent DBP is responsible for the misappropriation of the loan, even if only in part, then the foreclosure of the petitioners’ properties under the provisions of PD. 335 to satisfy the whole amount of the loan would be a gross mistake. It would unduly prejudice the petitioner, its employees and their families.

Only after trial on the merits of the case can the true amount of the loan which was applied wisely or not, for the benefit of the petitioner, be determined. Consequently, the extent of the loan where there was no failure of consideration and which may be properly satisfied by foreclosure proceedings under P.D. 385 will have to await the presentation of evidence in a trial on the merits.. [Id. at 189-190].

In fine, since the issue of misappropriation of the proceeds of the loan is still being litigated, the liability of FMC for the loan which was the basis of the mortgage being foreclosed was not yet settled; hence, the Court’s allowance of an injunction against the foreclosure sale.

In the instant controversy, the liability of ACPPI for the loans secured by the NIDC chattel mortgage is likewise still in dispute in the proceedings below inasmuch as petitioners are seeking nullification of said loans for failure or lack of consideration in the pending action before the court a quo. Petitioners contend that the portion of the principal NIDC loan supposed to be used to fund the repairs on the ACPPI plant building had not been expended for such intended purpose. Also, they challenge the adequacy of consideration of the additional advances allegedly granted by NIDC to ACPPI for the payment of the various services availed of or utilized by NIDC/PNB which petitioners claim to be fictitious.

Thus, although initially, the issue before the lower court was limited to whether petitioners herein are entitled to a termination of the Voting Trust Agreement, additional issues concerning the validity of the NIDC loans were raised in the supplemental complaint filed before said court [See Rollo, p. 179, et seq.]. In line with the Filipinas Marble ruling, pending determination by the lower court of these issues involving the misappropriation and/or mismanagement of the proceeds of the NIDC loans and the larger issue of failure of consideration, the sale at public auction of the foreclosed chattels should be enjoined, P.D. 385 notwithstanding.

IN VIEW OF THE FOREGOING, the instant petition for certiorari is hereby GRANTED and the questioned order of the respondent trial judge dated January 15, 1976 denying petitioners’ application for a writ of preliminary injunction is hereby SET ASIDE. The respondent sheriffs are hereby ordered to DESIST from carrying out the extrajudicial foreclosure sales sought by PNB and NIDC in the petitions dated March 11, 1974 and September 25, 1975, respectively. The temporary restraining order issued by the Court dated January 20, 1976 is accordingly made PERMANENT, subject to the qualifications stated in the following paragraph.

This judgment is without prejudice to the right of PNB, after due publication of an appropriate notice of sale specifying the amount of the secured obligations, to cause the foreclosure sale on the DBP-assigned real estate mortgages dated May 6, 1960 and May 8, 1961. On the other hand, the NIDC foreclosure sale, upon filing of a bond in such amount as the trial court may deem adequate, from an indubitably solvent bonding company, shall be enjoined until the final resolution by the court a quo of Civil Case No. Q-18176.

Finally, as stated at the outset, petitioner Clara Reyes Pastor’s "Motion for Termination of Receivership with Alternative Motions" is DENIED.

SO ORDERED.

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

Feliciano, J., In the result.

Endnotes:

** Thus, the DBP mortgage also provides that" (i)n the event that the mortgagor executes subsequent promissory note or notes either as a renewal of the former note, as extension thereof, or as a new loan, this mortgage shall stand as security for the payment of said note or notes without the necessity of executing a new contract and this mortgage shall have the same force and effect as if the said promissory note or notes were existing on the date hereof’ [Rollo, pp. 388-389; Emphasis supplied].

G.R. No. 45322 July 5, 1989 - GOVERNMENT SERVICE INSURANCE SYSTEM v. CFI OF ILOILO BRANCH III, ILOILO CITY, ET AL.

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FIRST DIVISION

[G.R. No. 45322. July 5, 1989.]

GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS), Petitioner, v. THE COURT OF FIRST INSTANCE OF ILOILO BRANCH III, ILOILO CITY and NELITA M. VDA. DE BACALING & MARIA TERESA INTEGRATED DEVELOPMENT CORPORATION, Respondents.

J. T. Barrera and Associates for respondent MATIDO.

Ramon A. Gonzales for Nenita Bacaling.

SYLLABUS

1. REMEDIAL LAW; SPECIAL CIVIL ACTION; FORECLOSURE OF MORTGAGE; NO RIGHT OF REDEMPTION EXISTS AFTER A JUDICIAL FORECLOSURE SALE; GOVERNMENT SERVICE INSURANCE SYSTEM, NOT A BANK OR BANKING INSTITUTION. — There is no right of redemption from a judicial foreclosure sale after the confirmation of the sale, except those granted by banks or banking institutions as provided by the General Banking Act (Limpin v. Intermediate Appellate Court, G.R. No. 70987, Sept. 29, 1988). This has been the consistent interpretation of Rule 68 in a long line of decisions of this Court. Since the GSIS is not a bank or banking institution, its mortgage is covered by the general rule that there is no right of redemption after the judicial foreclosure sale has been confirmed.

D E C I S I O N

GRIÑO-AQUINO, J.:

The legal issue presented in this appeal by certiorari is whether, after the judicial foreclosure of a real estate mortgage and the confirmation of the sale, the trial court may grant or fix another period for the redemption of the foreclosed property by the assignee of the mortgagor’s equity of redemption.

In 1957, a real estate loan of P600,000 payable in monthly installments within a period of ten (10) years with 7% interest per annum, was granted to the spouses Ramon and Nelita Bacaling by the petitioner, Government Service Insurance System (hereafter GSIS) for the development of the Bacaling-Moreno subdivision. To secure the repayment of the loan, the Bacalings executed in favor of the GSIS a real estate mortgage on four (4) lots owned by them. Out of the approved loan of P600,000, only P240,000 had been released to them by the GSIS as of November 11, 1957.chanrobles virtual lawlibrary

The Bacalings failed to finish the subdivision project and pay the amortizations on the loan so the GSIS, on May 22, 1959, filed in the Court of First Instance of Iloilo a complaint for judicial foreclosure of the mortgage (Civil Case No. 5233). During the pendency of the case, Ramon Bacaling passed away.

In a decision dated October 5, 1960, the court ordered the widow, for herself and as administratrix of the estate of Ramon Bacaling, to pay the GSIS:chanrob1es virtual 1aw library

(1) P240,000 with interest at 7% per annum from May 22, 1959 until the amount was fully paid;

(2) to pay the sum of P21,879.56 as accumulated interests on the debt up to February 11, 1959 plus 7% interest per annum, from February 12, 1959 until fully paid;

(3) to pay 10% of the judgment as attorney’s fees and costs; and

(4) should she fail to pay, or deposit with the Clerk of Court, the above amounts within a period of ninety (90) days from receipt of a copy of the decision, the four mortgaged lots would be sold at public auction to satisfy the mortgage debt, and the surplus if any should be delivered to the defendant Nelita Vda. de Bacaling. (pp. 12-13, Record on Appeal.)

Mrs. Bacaling failed to pay the judgment debt within 90 days after receipt of the decision of the court. Consequently, the mortgaged lots were sold at public auction on February 28, 1961. The GSIS was the highest bidder at the sale.

On March 1, 1961, the GSIS filed a motion for confirmation of the sale of the property to it (p. 25, Record on Appeal). On October 10, 1961, it reiterated said motion and further asked for a deficiency judgment against the mortgagor, its bid of P74,558.25 being inadequate to cover the judgment debt which had swelled to P339,302.58 as of August 31, 1961 (p. 30, Record on Appeal).chanrobles law library

On December 18, 1972, respondent Maria Teresa Integrated Development Corporation (MTIDC), as alleged assignee of the mortgagor’s "right of redemption," filed a "Motion to Exercise the Right of Redemption" (p. 34, Record on Appeal). The motion was granted by the trial court in an order dated December 20, 1972. Check No. MK-45594 of the China Banking Corporation in the amount of P1,100,000 was delivered by MTIDC to the GSIS as payment of the redemption price. However, the check was dishonored by the drawee bank because it was drawn against a closed account.

On motion of the GSIS the court issued on February 3, 1973 an order declaring null and void the redemption of the property by respondent MTIDC.

Thereafter, written proposals were sent by said respondent to the GSIS for the redemption of the foreclosed property, but the GSIS required cash payment of the redemption price.

On October 25, 1975, respondent Nelita Bacaling filed a motion to re-open the case so she could prove the inadequacy of the price of the sale of the mortgaged property (p. 63, Record on Appeal). The GSIS filed an opposition. In an order dated December 8, 1975, respondent court denied Nelita’s motion, confirmed the sale of the mortgaged property, and rendered a deficiency judgment in favor of GSIS (p. 76, Record on Appeal).

On December 19, 1975, fourteen (14) years after the foreclosure sale on February 28, 1961 and almost three (3) years after the court had annulled on February 3, 1973 its redemption of the foreclosed property, respondent MTIDC filed a motion for reconsideration of the court’s order and sought the restoration of its right of redemption. The court, over the strong opposition of the GSIS, reconsidered on January 19, 1976 its order of December 8, 1975 and granted MTIDC a period of one year after the finality of its order of January 19, 1976 to redeem the Bacaling properties (p. 94, Record on Appeal).

The GSIS sought a reconsideration of that order on the ground that the court may not extend the period for the redemption of the property (p. 95, Record on Appeal).

On February 12, 1976, the court modified its order of January 19, 1976 by giving MTIDC one (1) year from January 19, 1976 within which to redeem the Bacaling property, instead of one year from the finality of the January 19, 1976 order (p. 101, Record on Appeal). Petitioner received a copy of this last order on February 12, 1976.

On March 1, 1976, the GSIS appealed by certiorari to this Court raising purely legal questions (p. 102, Record on Appeal).

In her Comment on the petition for review, Nelita Vda. de Bacaling asked for the dismissal of GSIS’ petition on the grounds that: (1) the appeal has become moot and academic because the one-year redemption period fixed by the trial court had expired without the properties being redeemed; and (2) the questioned order (dated February 12, 1976) is also pending appeal in the Court of Appeals (CA-G.R. No. 60842) hence, this case should be remanded to that Court.

The respondent MTIDC, in its Comment, alleged the same grounds for the dismissal of the appeal, and further argued the legality of the lower court’s order because anyway the GSIS entertained and encouraged its overtures for the redemption of the foreclosed property.

On May 30, 1977, this Court, through the First Division, gave due course to the petition.

On October 21, 1977, We denied the motion to remand this appeal to the Court of Appeals.

After the respondents had filed their Comments, the case was declared submitted for decision on January 27, 1978.

Considering the long lapse of the time that this case has been awaiting adjudication, and apprehensive that supervening events may have rendered the issues moot and academic, this Court on September 21, 1988 gave the parties ten (10) days from notice to manifest whether they are still interested in prosecuting the case. In a Manifestation filed November 16, 1988, the GSIS declared that it is still interested in prosecuting its appeal.

We find merit in the appeal. Sections 2 and 3, Rule 68 of the Rules of Court provide:jgc:chanrobles.com.ph

"SEC. 2. Judgment on foreclosure for payment or sale. — If upon the trial in such action the court shall find the facts set forth in the complaint to be true, it shall ascertain the amount due to the plaintiff upon the mortgage debt or obligation, including interest and costs, and shall render judgment for the sum so found due and order that the same be paid into court within a period of not less than ninety (90) days from the date of the service of such order, and that in default of such payment the property be sold to realize the mortgage debt and costs."cralaw virtua1aw library

"SEC. 3. Sale of mortgaged property; effect. — When the defendant, after being directed to do so as provided in the last preceding section, fails to pay the principal, interest, and costs at the time directed in the order, the court shall order the property to be sold in the manner and under the regulations that govern sales of real estate under execution. Such sale shall not affect the rights of persons holding prior encumbrances upon the property or a part thereof, and when confirmed by an order of the court, it shall operate to divest the rights of all the parties to the action and to vest their rights in the purchaser, subject to such rights of redemption as may be allowed by law." (Emphasis supplied.)

There is no right of redemption from a judicial foreclosure sale after the confirmation of the sale, except those granted by banks or banking institutions as provided by the General Banking Act (Limpin v. Intermediate Appellate Court, G.R. No. 70987, Sept. 29, 1988). This has been the consistent interpretation of Rule 68 in a long line of decisions of this Court.

"We may say, furthermore, that this Court has already held that in mortgage foreclosures the rights of the mortgagee and persons holding under him are cut off by the sale, when duly confirmed, and with them the equity of redemption. The reason for that holding is that the right of redemption being purely statutory, and there being no statute conferring that right, it does not exist." (Benedicto v. Yulo, 26 Phil. 166; Emphasis ours.)

". . . When the foreclosure sale is validly confirmed by the court title vests upon the purchaser in the foreclosure sale, and the confirmation retroacts to the date of the sale (Binalbagan Estate, Inc. v. Gatuslao, Et Al., 74 Phil. 128). Only foreclosure of mortgages to banking institutions (including the Rehabilitation Finance Corporation) and those made extrajudicially are subject to legal redemption, by express provision of statute, and the present case does not come under exceptions." (Villar v. Javier de Paderanga, 97 Phil. 608-609; Emphasis ours.)

"Where the foreclosure is judicially affected, however, no equivalent right of redemption exists. The law (Sec. 3, Rule 68, Rules of Court) declares that a judicial foreclosure sale, ‘when confirmed by an order of the court, . . . shall operate to divest the rights of all the parties to the action and to vest their rights in the purchaser, subject to such rights of redemption as may be allowed by law.’ Such rights exceptionally ‘allowed by law’ (i.e., even after confirmation by an order of the court) are those granted by the charter of the Philippine National Bank (Acts No. 2747 and 2938), and the General Banking Act (R.A. 337) (See Moran, Comments on the Rules, 1970 Ed., Vol. 3, p. 273, citing Gonzales v. PNB, 48 Phil. 824, 828; and Martin, Rules of Court, etc., 3rd Ed., Vol. 3, p. 289, citing Villar v. Javier de Paderanga, 97 Phil. 64; Piano v. Cayanong, 7 SCRA 397). These laws confer on the mortgagor, his successors in interest or any judgment creditor of the mortgagor, the right to redeem the property sold on the foreclosure — after confirmation by the court of the foreclosure sale — which right may be exercised within a period of one (1) year, counted from the date of registration of the certificate of sale in the Registry of Property.

"But, to repeat, no such right of redemption exists in case of judicial foreclosure of a mortgage if the mortgagee is not the PNB or a bank or banking institution. In such a case, the foreclosure sale, ‘when confirmed by an order of the court, . . . shall operate to divest the rights of all the parties to the action and to vest their rights in the purchaser.’ There then exists only what is known as the equity of redemption. This is simply the right of the defendant mortgagor to extinguish the mortgage and retain ownership of the property by paying the secured debt within the 90-day period after the judgment becomes final, in accordance with Rule 68, or even after the foreclosure sale but prior to its confirmation." (Limpin v. Intermediate Appellate Court, G.R. No. 70987, September 29, 1988.)

Since the GSIS is not a bank or banking institution, its mortgage is covered by the general rule that there is no right of redemption after the judicial foreclosure sale has been confirmed. Hence, Judge Numeriano Estenzo exceeded his jurisdiction and acted with grave abuse of discretion in granting the respondent, MTIDC, another one-year period to redeem the Bacaling properties over the opposition of petitioner GSIS as mortgagee-purchaser thereof at the public sale. His orders dated January 19, 1976 and February 12, 1976 are null and void.

WHEREFORE, the petition for certiorari is granted. The appealed orders dated January 19, 1976 and February 12, 1976 of Judge Numeriano Estenzo in Civil Case No. 5233 are hereby annulled and set aside. Costs against the private respondents.

SO ORDERED.

Narvasa, Cruz, Gancayco and Medialdea, JJ., concur.

G.R. No. 58494 July 5, 1989 - PHILIPPINE NATIONAL OIL COMPANY-ENERGY DEVELOPMENT CORP. v. VICENTE T. LEOGARDO, ET AL.

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SECOND DIVISION

[G.R. No. 58494. July 5, 1989.]

PHILIPPINE NATIONAL OIL COMPANY-ENERGY DEVELOPMENT CORPORATION, Petitioner, v. HON. VICENTE T. LEOGARDO, DEPUTY MINISTER OF LABOR AND VICENTE D. ELLELINA, Respondents.

SYLLABUS

1. PUBLIC CORPORATIONS; GOVERNMENT OWNED OR CONTROLLED CORPORATIONS; BASIS OF APPLICABILITY OF CIVIL SERVICE OF LABOR CODE. — Thus, under the present state of the law, the test in determining whether a government-owned or controlled corporation is subject to the Civil Service Law is the manner of its creation such that government corporations created by special charter are subject to its provisions while those incorporated under the general Corporation Law are not within its coverage.

2. ID.; ID.; PNOC-EDC, SUBJECT TO LABOR CODE. — We hold, therefore, that the PNOC-EDC, having been incorporated under the general Corporation Law, is a government-owned or controlled corporation whose employees are subject to the provisions of the Labor Code. This is apparently the intendment in the NASECO case notwithstanding the fact that the NASECO therein was a subsidiary of the PNB, a government-owned corporation.

3. CONSTITUTIONAL LAW; CONSTITUTION ENFORCED AT THE TIME OF DECISION APPLIES. — In NASECO v. NLRC (G.R. No. 69870, November 29, 1988), we had occasion to apply the present Constitution in deciding whether or not the employees of NASECO (a subsidiary of the NIDC, which is in turn a subsidiary wholly-owned by the PNB, a government-owned corporation) are covered by the Civil Service Law or the Labor Code notwithstanding that the case arose at the time when the 1973 Constitution was still in effect. We held that the NLRC has jurisdiction over the employees of NASECO "on the premise that it is the 1987 Constitution that governs because it is the Constitution in place at the time of decision;" and that being a corporation without an original charter, the employees of NASECO are subject to the provisions of the Labor Code.

4. LABOR CODE; TERMINATION OF EMPLOYMENT; DISMISSAL NOT JUSTIFIED IN CASE AT BAR. — The application for clearance was premised on Ellelina’s alleged commission of a crime (Alarm or Public Scandal) during a Christmas party on 19 December 1977 at petitioner’s camp in Uling, Cebu, when, because of the refusal of the raffle committee to give him the prize corresponding to his lost winning ticket, he tried to grab the armalite rifle of the PC Officer outside the building despite the warning shots fired by the latter. In so far as Ellelina is concerned, we hold that the reinstatement ordered by public respondent, without loss of seniority rights, is proper. However, consistent with the rulings of the Court, backwages should be limited to three years from 1 February 1978. The dismissal ordered by petitioner was a bit too harsh considering the nature of the act which he had committed and that it was his first offense.

D E C I S I O N

MELENCIO-HERRERA, J.:

Through this Petition for Certiorari, Philippine National Oil Company-Energy Development Corporation (PNOC-EDC) seeks to declare null and void, for lack of jurisdiction, the Order of public respondent, the Deputy Minister of Labor, sustaining his jurisdiction over the instant controversy.

Petitioner PNOC-EDC is a subsidiary of the Philippine National Oil Company (PNOC). On 20 January 1978, it filed with the Ministry of Labor and Employment, Regional Office No. VII, Cebu City (MOLE), a clearance application to dismiss/terminate the services of private respondent, Vicente D. Ellelina, a contractual employee.chanrobles virtual lawlibrary

The application for clearance was premised on Ellelina’s alleged commission of a crime (Alarm or Public Scandal) during a Christmas party on 19 December 1977 at petitioner’s camp in Uling, Cebu, when, because of the refusal of the raffle committee to give him the prize corresponding to his lost winning ticket, he tried to grab the armalite rifle of the PC Officer outside the building despite the warning shots fired by the latter.

Clearance to dismiss was initially granted by MOLE but was subsequently revoked and petitioner was ordered to reinstate Ellelina to his former position, without loss of seniority rights, and with backwages from 1 February 1978 up to his actual reinstatement.

Petitioner appealed to the Minister of Labor who, acting through public respondent, affirmed, on 14 August 1981, the appealed Order. Hence, this Petition predicated substantially on the following grounds:chanrob1es virtual 1aw library

1. Under Article 277 of the Labor Code, the Ministry of Labor and Employment has no jurisdiction over petitioner because it is a government-owned or controlled corporation;

2. Ellelina’s dismissal is valid and just because it is based upon the commission of a crime.

On the other hand, public respondent contends:chanrob1es virtual 1aw library

(a) While the petitioner is a subsidiary of the PNOC, it is still covered by the Labor Code and, therefore, within the jurisdiction of the Ministry of Labor inasmuch as petitioner was organized as a private corporation under the Corporation Law and registered with the Securities and Exchange Commission;

(b) Petitioner is estopped from assailing the Labor Department’s jurisdiction, having subjected itself to the latter when it filed the application for clearance to terminate Ellelina’s services; and

(c) Dismissal is too harsh a penalty.

The issues that confront us, therefore, are (1) whether or not public respondent committed grave abuse of discretion in holding that petitioner is governed by the Labor Code; and (2) whether or not Ellelina’s dismissal was justified.

Under the laws then in force, employees of government-owned and/or controlled corporations were governed by the Civil Service Law and not by the Labor Code. Thus,

Article 277 of the Labor Code (PD 442) then provided:jgc:chanrobles.com.ph

"The terms and conditions of employment of all government employees, including employees of government-owned and controlled corporations shall be governed by the Civil Service Law, rules and regulations . . ."cralaw virtua1aw library

In turn, the 1973 Constitution provided:jgc:chanrobles.com.ph

"The Civil Service embraces every branch, agency, subdivision and instrumentality of the government, including government-owned or controlled corporations."cralaw virtua1aw library

In National Housing Corporation v. Juco (L-64313, January 17, 1985, 134 SCRA 172), we laid down the doctrine that employees of government-owned and/or controlled corporations, whether created by special law or formed as subsidiaries under the general Corporation Law, are governed by the Civil Service Law and not by the Labor Code.

However, the above doctrine has been supplanted by the present Constitution, which provides:jgc:chanrobles.com.ph

"The Civil Service embraces all branches, subdivisions, instrumentalities and agencies of the Government, including government-owned or controlled corporations with original charters." (Article IX-B, Section 2 [1])

Thus, under the present state of the law, the test in determining whether a government-owned or controlled corporation is subject to the Civil Service Law is the manner of its creation such that government corporations created by special charter are subject to its provisions while those incorporated under the general Corporation Law are not within its coverage.

In NASECO v. NLRC (G.R. No. 69870, November 29, 1988), we had occasion to apply the present Constitution in deciding whether or not the employees of NASECO (a subsidiary of the NIDC, which is in turn a subsidiary wholly-owned by the PNB, a government-owned corporation) are covered by the Civil Service Law or the Labor Code notwithstanding that the case arose at the time when the 1973 Constitution was still in effect. We held that the NLRC has jurisdiction over the employees of NASECO "on the premise that it is the 1987 Constitution that governs because it is the Constitution in place at the time of decision;" and that being a corporation without an original charter, the employees of NASECO are subject to the provisions of the Labor Code.

We see no reason to depart from the ruling in the aforesaid case.

We hold, therefore, that the PNOC-EDC, having been incorporated under the general Corporation Law, is a government-owned or controlled corporation whose employees are subject to the provisions of the Labor Code. This is apparently the intendment in the NASECO case notwithstanding the fact that the NASECO therein was a subsidiary of the PNB, a government-owned corporation.

In so far as Ellelina is concerned, we hold that the reinstatement ordered by public respondent, without loss of seniority rights, is proper. However, consistent with the rulings of the Court, backwages should be limited to three years from 1 February 1978. The dismissal ordered by petitioner was a bit too harsh considering the nature of the act which he had committed and that it was his first offense.

WHEREFORE, the Petition is DISMISSED, and the judgment of respondent public official is hereby AFFIRMED No costs.

SO ORDERED.

Paras, Padilla, Sarmiento and Regalado, JJ., concur.

G.R. No. 59075 July 5, 1989 - MERCEDES P. GUASCH v. COURT OF APPEALS, ET AL.

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FIRST DIVISION

[G.R. No. 59075. July 5, 1989.]

MERCEDES P. GUASCH, Petitioner, v. HON. COURT OF APPEALS and ATTY. ARTURO L. RODRIGUEZ, Respondents.

Braulio R.G. Tansinsin for Petitioner.

Dante O. Tinga for Private Respondent.

SYLLABUS

1. CIVIL LAW; OBLIGATIONS AND CONTRACTS; NON-FULFILLMENT OF OBLIGATIONS; REMEDY IS EITHER RESCISSION OR FULFILLMENT. — Article 1191 of the Civil Code provides that "the injured party may choose between the fulfillment and rescission of the obligation, with payment of damages in either case. He may also seek rescission, even after he has chosen fulfillment, if the latter should become impossible." The rescission of the contract as sought by the private respondent is therefore legally justified (Siy v. Court of Appeals, 138 SCRA 536; Ayson-Simon v. Adamos, 131 SCRA 439).

2. REMEDIAL LAW; COURT OF FIRST INSTANCE; JURISDICTION; COURT OF FIRST INSTANCE HAS JURISDICTION OVER COMPLAINT FOR RESCISSION OF A LEASE CONTRACT. — The court of first instance, now the regional trial court, had jurisdiction over the complaint for rescission of the lease contract and, for a judicial declaration that as of February 1, 1977, when the contract was terminated, the plaintiff(lessor) became the owner of the building constructed by the defendant on the leased premises. The complaint neither alleged forcible entry by the defendant upon the premises nor illegal detainer of the same, for as pointed out by the Court of Appeals, Rodriguez was not yet the owner of the building occupied by the petitioner. Hence, the action did not come within the jurisdiction of an inferior court. Courts of first instance (now regional trial courts) have original jurisdiction in civil actions involving the title to or possession of real property or any interest therein except actions for forcible entry and unlawful detainer (Sec. 44[b], Judiciary Law and Sec. 19[2] of Batas Pambansa Blg. 129).

D E C I S I O N

GRIÑO-AQUINO, J.:

This is a petition for review of the decision dated August 28, 1981 of the Court of Appeals in CA-G.R. No. 66145-R, entitled "Arturo L. Rodriguez v. Mercedes Guasch," affirming the decision of the Court of First Instance of Rizal, which ordered the petitioner to vacate the private respondent’s property but set aside the order for reimbursement of the petitioner’s insurance premiums and expenses for repairs of the building.

The private respondent, Arturo L. Rodriguez, owned a building which stood on his 1,277 square-meter land on Samson Road, Caloocan City.

On May 27, 1968, the petitioner leased Rodriguez’s land and building for a nominal monthly rental under a contract entitled "Lease of Land" (Exh. A) wherein the petitioner bound herself to build within three (3) years from the date of the contract, a new building on the land which would become the property of the lessor, after the expiration of twenty (20) years from the date of their agreement, without any obligation to reimburse the lessee therefor. The pertinent provisions of the contract read as follows:jgc:chanrobles.com.ph

"3. That notwithstanding the existing building, the LESSEE may have same demolished and constructed in lieu thereof a new two-storey concrete reinforced building worth not less than P200,000 as shown by the plan, photostat copy marked as Annex ‘A’ and specifications of materials marked as Annex ‘B’ and made an integral part hereof;

"4. That the said building be constructed in accordance with the government rules and regulations with no less than one first class toilet and bath on the second floor and on the ground floor one of first class toilet and bath and another of the second class and made strictly in accordance with the specification stated therein;

"5. This building shall be finished not later than three (3) years from date hereof and the LESSOR or his legal representative may from time to time check on the construction and any deviation from the plan and specification that may be found shall be changed and so made strictly in pursuance to (sic) the agreement herein." (Italics supplied; Record on Appeal, pp. 8-9; pp. 33-34, Rollo.)

They also agreed that the new building would be insured at the lessee’s expense for the benefit of the lessor:jgc:chanrobles.com.ph

"9. The building shall be insured by the LESSEE at her expense for P50,000 and in case of damage or fire the proceeds shall be payable to the LESSOR herein and in which amount will be expended for the repair of the damaged building. The insurance Company underwriting must be acceptable to the LESSEE herein." (Italics ours; Record on Appeal, pp. 9-10.)

The parties further agreed that failure of the lessee to pay three successive monthly rentals, or any violation of the lease covenants, would be a ground for the cancellation of the lease, in which event, the building and all the improvements introduced by the lessee would be forfeited to the lessor without payment of indemnity to the lessee.

The lessee failed to comply with her obligation to construct a new two-storey reinforced concrete building in accordance with the plan (Exh. A-1). What she built were three (3) cheap accessoria-type tenements of wood and stone worth only P50,000, and completely different from the approved plans and specifications. Moreover, although she did insure the building, the beneficiary of the policies was herself or the "Mercedes Commercial Enterprises and Automotive Services," (p. 74, Record on Appeal) instead of the lessor. Rodriguez’s demands for the delivery of the fire insurance policies to him were ignored by her. On February 1, 1977, the lessor advised her in writing of the termination of the lease (Exh. D).

On February 22, 1977, Rodriguez filed a complaint for rescission of the lease contract and to recover possession of the leased premises, with damages in the Court of First Instance of Rizal.

Petitioner filed a motion to dismiss the action, arguing that the Court of First Instance did not have jurisdiction over the case, as it was essentially one for ejectment, hence, cognizable by an inferior court. After her motion to dismiss was denied, she filed an answer denying that she had violated any conditions of the lease.

On October 8, 1979, the trial court rendered a decision finding that the petitioner (then the defendant) violated two conditions of the lease, namely: (1) her obligation to construct a new two-storey reinforced concrete building in accordance with the plan (Exh. A-1); and, (2) her obligation to procure insurance for the benefit of the lessor, plaintiff Rodriguez. The court declared the plaintiff entitled to cancel the lease contract.

The dispositive portion of the decision reads:jgc:chanrobles.com.ph

"WHEREFORE, judgment is hereby rendered declaring the lease contract entered into by the parties on May 27, 1978 (sic) terminated and cancelled as of February 1, 1977 and all improvements constructed and existing on the leased premises are hereby declared as belonging to the plaintiff from the aforementioned date. Defendant is directed to immediately deliver the possession of these improvements to the possession of the plaintiff. She is further required to deliver immediately to the plaintiff all the rentals she received corresponding for the period from February 1, 1977 up to actual delivery less all rentals she paid to plaintiff for the land, as well as all expenses [incurred] by her for the procurement of the insurance coverage and for the repair of the buildings from February 1, 1977 up to the present. Defendant is furthermore condemned to pay plaintiff the amount of P1,000 as attorney’s fees and P1,000 as liquidated damages. The counterclaim is dismissed. Costs in this instance against defendant." (p. 10, Rollo.)

Both parties appealed, the lessor’s appeal being limited only to the portion of the judgment ordering him to reimburse the lessee for the insurance premium paid and for repairs made on the building after February 1, 1977.

On August 28, 1981, the Court of Appeals rendered a decision, the dispositive portion of which reads:jgc:chanrobles.com.ph

"WHEREFORE, the decision appealed from is hereby modified in the sense that plaintiff-appellant should not be required to reimburse defendant-appellant’s expenses incurred by the latter for the procurement of the insurance coverage and for the repair of the building from February 1, 1977. In all other respects, the decision appealed from is hereby affirmed, with costs against defendant-appellant." (p. 48, Rollo.)

After her motion for reconsideration of the decision was denied by the Appellate Court in a Resolution dated December 2, 1981, Guasch filed this petition for review wherein she assigned eight (8) errors against the Appellate Court. However, the resolution of those alleged errors hinge upon the lone factual issue of whether or not she violated the conditions of the lease agreement.

The Appellate Court’s finding that she did is supported by the evidence, and its conclusion that her lessor was entitled to rescind the lease contract with damages is in accord with applicable laws and jurisprudence.

Article 1191 of the Civil Code provides that "the injured party may choose between the fulfillment and rescission of the obligation, with payment of damages in either case. He may also seek rescission, even after he has chosen fulfillment, if the latter should become impossible." The rescission of the contract as sought by the private respondent is therefore legally justified (Siy v. Court of Appeals, 138 SCRA 536; Ayson-Simon v. Adamos, 131 SCRA 439).

The court of first instance, now the regional trial court, had jurisdiction over the complaint for rescission of the lease contract and, for a judicial declaration that as of February 1, 1977, when the contract was terminated, the plaintiff(lessor) became the owner of the building constructed by the defendant on the leased premises. The complaint neither alleged forcible entry by the defendant upon the premises nor illegal detainer of the same, for as pointed out by the Court of Appeals, Rodriguez was not yet the owner of the building occupied by the petitioner. Hence, the action did not come within the jurisdiction of an inferior court. Courts of first instance (now regional trial courts) have original jurisdiction in civil actions involving the title to or possession of real property or any interest therein except actions for forcible entry and unlawful detainer (Sec. 44[b], Judiciary Law and Sec. 19[2] of Batas Pambansa Blg. 129).

WHEREFORE, the petition for review is denied for lack of merit. The appealed judgment is affirmed in toto, with costs against the petitioner.

SO ORDERED.

Narvasa, Cruz, Gancayco and Medialdea, JJ., concur.

G.R. Nos. 59241-44 July 5, 1989 - PEDRO TANDOC, ET AL. v. RICARDO P. RESULTAN

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SECOND DIVISION

[G.R. Nos. 59241-44. July 5, 1989.]

PEDRO TANDOC, ROGELIO ERCELLA, RUDY DIAZ, JUAN ROSARIO, AND FRED MENOR, Petitioners, v. THE HONORABLE RICARDO P. RESULTAN, in his capacity as Presiding Judge of the City Court of San Carlos City (Pangasinan), ARNULFO PAYOPAY, MANUEL CANCINO, and CONRADO PAYOPAY, SR., Respondents.

SYLLABUS

1. REMEDIAL LAW; CRIMINAL PROCEDURE; PRELIMINARY INVESTIGATION; PURPOSE. — A preliminary investigation is intended to protect the accused from the inconvenience, expense and burden of defending himself in a formal trial unless the reasonable probability of his guilt shall have been first ascertained in a fairly summary proceeding by a competent officer. It is also intended to protect the state from having to conduct useless and expensive trials.

2. ID.; ID.; ID.; STAGES. — There are two (2) stages in a preliminary investigation; first, the preliminary examination of the complainant and his witnesses prior to the arrest of the accused to determine whether or not there is ground to issue a warrant of arrest; second, preliminary investigation proper, wherein the accused, after his arrest, is informed of the complaint filed against him and is given access to the testimonies and evidence presented, and he is also permitted to introduce evidence in his favor. The purpose of this stage of investigation is to determine whether or not the accused should be released or held before trial.

3. ID.; ID.; ID.; MERELY INQUISITORIAL. — Preliminary investigation is merely inquisitorial, and it is often the only means of discovering the persons who may be reasonably charged with a crime, to enable the fiscal to prepare his complaint or information. It is not a trial of the case on the merits and has no purpose except that of determining whether a crime has been committed and whether there is probable cause to believe that the accused is guilty thereof, and it does not place the person against whom it is taken in jeopardy.

4. ID.; ID.; PRELIMINARY INVESTIGATION PROPER; ACCUSED NOT ENTITLED TO BE HEARD IN CASES FALLING WITHIN THE EXCLUSIVE JURISDICTION OF INFERIOR COURTS AND IN CASES WITHIN THE CONCURRENT JURISDICTION OF CITY OR MUNICIPAL COURTS WITH COURTS OF FIRST INSTANCE. — Under Section 10, Rule 112 of the 1964 Revised Rules of Criminal Procedure, in cases falling within the exclusive jurisdiction of an inferior court, as well as in cases within the concurrent jurisdiction of the city courts or municipal courts with Courts of First Instance, the accused was not entitled to be heard in a preliminary investigation proper.

5. ID.; ID.; ID.; REASON. — The loss of time entailed in the conduct of preliminary investigations, with the consequent extension of deprivation of the accused’s liberty, in case he fails to post bail, which at times outlasts the period of the penalty provided by law for the offense, besides the mental anguish suffered in protracted litigations, are eliminated with the assurance of a speedy and expeditious trial for the accused, upon his arraignment (without having to undergo the second stage of the preliminary investigation), and of a prompt verdict on his guilt or innocence. On the other hand, the so-called first stage of preliminary investigation or the preliminary examination, conducted by the duly authorized officer, as borne out by the examination and sworn written statement of the complainants and their witnesses, generally suffices to establish the existence of reasonable ground to charge the accused with having committed the offense complained of.

6. ID.; ID.; PRELIMINARY EXAMINATION; PURPOSE. — The preliminary examination prior to the issuance of a warrant of arrest and the sworn statements of the complainant and his witnesses are sufficient to establish whether "there is a reasonable ground to believe that an offense has been committed and the accused is probably guilty thereof", to prevent needless waste or duplication of time and effort.

7. ID.; ID.; PRELIMINARY INVESTIGATION CONDUCTED BY THE CITY FISCAL UNNECESSARY IN CASES FALLING WITHIN THE JURISDICTION OF CITY COURTS. — The offenses charged against petitioners for "Trespass to Dwelling", "Grave Threats" and "Physical Injuries" were all within the jurisdiction of the City Court of San Carlos City. Under the circumstances, the complaints could be filed directly with the City Court which is empowered to conduct a preliminary examination for purposes of issuance of warrants of arrest, and thereafter to proceed with the trial of the cases on the merits. The preliminary investigation proper conducted by the Office of the City Fiscal could have been dispensed with.

8. CONSTITUTIONAL LAW; BILL OF RIGHTS; DOUBLE JEOPARDY; DO NOT EXIST BY THE DISMISSAL OF COMPLAINTS BY THE FISCAL. — Neither did the earlier order of dismissal of the complaints by the investigating fiscal bar the filing of said complaints with the city court on the ground of double jeopardy.

9. CRIMINAL LAW; EXTINCTION OF CRIMINAL LIABILITY; PRESCRIPTION; COURTS HAVE THE POWER TO CONDUCT PRELIMINARY EXAMINATION AND TRIAL OVER ALL OFFENSES FALLING WITHIN ITS JURISDICTION WHICH HAVE NOT YET PRESCRIBED. — As long as the offense charged has not prescribed, the city court has the power and authority to conduct a preliminary examination and proceed with the trial of the case properly within its jurisdiction. The prescriptive period of a crime depends upon the penalty imposed by law. The penalty of arresto mayor is imposed by law for the crimes of Trespass to Dwelling", "Grave Threats", which is not subject to a condition and "Less Serious Physical Injuries" which has incapacitated the offended party for ten (10) days or shall require medical attendance for the same period; for "Serious Physical Injuries" which has caused illness or incapacity for labor for more than thirty (30) days, the penalty is arresto mayor in its maximum period to prision correccional in its minimum period. The prescriptive period of offenses punishable by arresto mayor is five (5) years, while crimes punishable by correctional penalties prescribe in ten (10) years. The incident at bar occurred on 19 October 1980, while the complaints were filed with the City Court nine (9) months from said occurrence or on 28 July 1981, thus, the crimes charged had not yet prescribed under the given facts.

10. REMEDIAL LAW; CRIMINAL PROCEDURE, MOTION FOR RE-INVESTIGATION BY THE FISCAL OF PRELIMINARY INVESTIGATION CONDUCTED BY THE CITY COURT; RULES. — From the order of the City Court finding reasonable ground to believe that a crime was committed and the accused probably guilty thereof, petitioners cannot seek a re-investigation by the Office of the City Fiscal. The re-investigation sought by petitioners applies only to instances where a case is cognizable by the Court of First Instance but filed with the City Court for purposes of preliminary investigation only and thereafter dismissed by the latter on the ground that no prima facie case exists. However, for cases cognizable by inferior courts and filed with the same not only for purposes of preliminary investigation but for trial on the merits, the Office of the City Fiscal has no authority to re-investigate.

D E C I S I O N

PADILLA, J.:

Petition for certiorari assailing the Orders 1 of the City Court of San Carlos City, Pangasinan, dated 13 August 1981, finding reasonable ground to believe that petitioners Pedro Tandoc, Rogelio Ercella, Rudy Diaz, Juan Rosario and Fred Menor had probably committed the crimes of "Trespass to Dwelling", "Serious Physical Injuries", "Less Serious Physical Injuries" and "Grave Threats", docketed as Criminal Cases Nos. 2105, 2106, 2107 and 2108; and the Order 2 dated 21 October 1981, denying petitioners’ motion for a re-investigation of the complaint by the Office of the City Fiscal of San Carlos City. The incident which gave rise to the petition at bar is as follows:chanrob1es virtual 1aw library

On 19 October 1980, a criminal complaint docketed as I.S. No. 80-198 was lodged with the Office of the City Fiscal of San Carlos City, Pangasinan, with the charges of "Serious Physical Injuries", filed by Bonifacio Menor against respondent Arnulfo (Arnold) Payopay; "Slight Physical Injuries", filed by Fred de la Vega against respondent Beda Acosta, and "Trespass to Dwelling", filed by Pacita Tandoc against respondents Arnulfo (Arnold) Payopay, Beda Acosta, Manuel Cancino, Nadong Fernandez and Arturo Syloria.

Pending the resolution of said complaint, Arnulfo (Arnold) Payopay and his father Conrado Payopay, Sr., together with Manuel Cancino, also filed a complaint on 2 December 1980 3 with the Office of the City Fiscal, San Carlos City, Pangasinan, against Pedro Tandoc, Pacita Tandoc, Rudy Diaz, Fred Menor, Rogelio Ercella, Juan Rosario and Fred de la Vega, with the charges of "Trespass to Dwelling", "Serious Oral Defamation", "Grave Threats" and "Physical Injuries", docketed as I.S. No. 80-233.

On 10 December 1980, the investigating fiscal found reasonable ground to believe that respondents Arnulfo (Arnold) Payopay, Beda Acosta, Manuel Cancino, Nadong Fernandez and Arturo Syloria committed the crimes charged in I.S. 80-198, 4 thus:jgc:chanrobles.com.ph

"The evidence in the above-cited complaints tend to show that at about 6:35 o’clock in the afternoon of October 19, 1980, at the house of Pacita B. Tandoc, situated at Rizal Avenue, SCC, the respondents entered the store and dinning [sic] room of the complainant without her permission. There was a sort of altercation between the complainant and respondent, Arnold Payopay, regarding the stoning of the store and house of complainant, Tandoc. In the course of their altercation, respondent Arnold Payopay picked up stones and struck the complainant Tandoc but instead her helper Bonifacio Menor was hit and suffered physical injuries which according to the medico-legal certificate will heal for [sic] more than thirty days. She further declared that respondent, Beda Acosta, who was behind Arnold Payopay picked up stone [sic] struck her but unfortunately her helper, Fred de la Vega, was hit and suffered injuries which injury will heal in less than nine days according to the medical certificate. The matter was reported to the Barangay Chairman of the place and to the Office of the Station Commander. In support of the complaint are the sworn statements of Bonifacio Menor, Fred de la Vega and Barangay Chairman Hermogenes Salangad.

x x x

"After evaluating the evidence on hand and the entries in the police blotter the undersigned finds that there is reasonable ground to believe that the crime of Trespass To Dwelling, has been committed by all respondents; Serious Physical Injuries, has been committed by respondent Arnold Payopay; and Slight Physical Injuries, has been committed by respondent Beda Acosta. The latter case has not been referred to the Barangay Chairman as the case will soon prescribe and that the affidavit of complainant was just endorsed on November 28, 1980. I most respectfully recommend that the corresponding Informations be filed in Court.

From the aforequoted resolution, respondents filed a Motion for Reconsideration, but the same was denied in a resolution dated 5 January 1981. 5 Consequently, the corresponding informations for "Slight Physical Injuries", "Trespass to Dwelling" and "Serious Physical Injuries" were filed with the City Court of San Carlos City, docketed as Criminal Cases Nos. 1992, 2000 and 2001, respectively. 6

With respect to the criminal complaint docketed as I.S. No. 80-233 filed by Arnulfo (Arnold) Payopay and Manuel Cancino against petitioners for "Serious Oral Defamation", "Grave Threats" and "Physical Injuries", the Office of the City Fiscal recommended the dropping of said charges on the ground that they "were found to be in a [sic] nature of a counter charge, the same having been filed after more than one (1) month from the date of the alleged incident of 19 October 1980." However, as to the charge of "Trespass to Dwelling" filed by Conrado Payopay, Sr. against Pedro Tandoc, a prima facie case was found by the investigating fiscal. 7 Thus, on 28 January 1981, an information 8 for "Trespass to Dwelling" was filed with the City Court of San Carlos City, docketed as Criminal Case No. 2017.

On 28 July 1981, respondents Arnulfo (Arnold) Payopay, Conrado Payopay, Sr. and Manuel Cancino, directly lodged with the City Court of San Carlos City the following criminal complaints against herein petitioners, 9 to wit:chanrob1es virtual 1aw library

— Criminal Case No. 2105, entitled "People v. Pedro Tandoc, Rogelio Ercella, Rudy Diaz, Juan Rosario and Fred Menor", for Serious Physical Injuries, filed by Arnulfo (Arnold) Payopay as private complainant.

— Criminal Case No. 2106, entitled "People v. Rudy Diaz, Juan Rosario and Fred Menor", for Trespass to Dwelling, filed by Conrado Payopay, Sr. as private complainant.

— Criminal Case No. 2107, entitled "People v. Pedro Tandoc, Rudy Diaz, Juan Rosario and Fred dela Vega", for Less Serious Physical Injuries, filed by Manuel Cancino as private complainant.

— Criminal Case No. 2108, entitled "People v. Pedro Tandoc, Rudy Diaz, Rogelio Ercella, Juan Rosario & Fred Menor", for Grave Threats to Kill, with Arnulfo (Arnold) Payopay as private complainant.

On 13 August 1981, the City Court of San Carlos City issued several Orders 10 which are the subject of the petition at bar, whereby the court a quo, after conducting a preliminary examination of the four (4) aforementioned cases, found reasonable ground to believe that the offenses charged may have been committed by the accused (now petitioners) and that the latter were probably guilty thereof. The issuance of warrants of arrest was ordered against herein petitioners, although said warrants were later suspended upon motion of the petitioners. A motion for reconsideration of the aforesaid resolution was filed by petitioners, but it was denied. 11 They moved for a re-investigation of the cases by the Office of the City Fiscal. On 21 October 1981, the court a quo denied said motion. 12 Petitioners sought a reconsideration of said order, but it was likewise denied, 13 hence, this petition.

The sole issue to be resolved in the case at bar is whether or not the city court has the power and authority to conduct anew a preliminary examination of charges, which were previously the subject of a preliminary investigation conducted by the Office of the City Fiscal and thereafter dismissed by the latter.

A preliminary investigation is intended to protect the accused from the inconvenience, expense and burden of defending himself in a formal trial unless the reasonable probability of his guilt shall have been first ascertained in a fairly summary proceeding by a competent officer. It is also intended to protect the state from having to conduct useless and expensive trials. 14

There are two (2) stages in a preliminary investigation; first, the preliminary examination of the complainant and his witnesses prior to the arrest of the accused to determine whether or not there is ground to issue a warrant of arrest; second, preliminary investigation proper, wherein the accused, after his arrest, is informed of the complaint filed against him and is given access to the testimonies and evidence presented, and he is also permitted to introduce evidence in his favor. The purpose of this stage of investigation is to determine whether or not the accused should be released or held before trial. 15

Preliminary investigation is merely inquisitorial, and it is often the only means of discovering the persons who may be reasonably charged with a crime, to enable the fiscal to prepare his complaint or information. 16 It is not a trial of the case on the merits and has no purpose except that of determining whether a crime has been committed and whether there is probable cause to believe that the accused is guilty thereof, and it does not place the person against whom it is taken in jeopardy. 17

Under Section 10, Rule 112 of the 1964 Revised Rules of Criminal Procedure, in cases falling within the exclusive jurisdiction of an inferior court, as well as in cases within the concurrent jurisdiction of the city courts or municipal courts with Courts of First Instance, the accused was not entitled to be heard in a preliminary investigation proper. 18 The reason behind this rule is as follows:jgc:chanrobles.com.ph

"Indeed, balancing the considerations, the withholding of the right of the preliminary investigation from the accused in cases triable by the inferior courts involving offenses with lower penalties than those exclusively cognizable by courts of first instance, could not be termed an unjust or unfair distinction. The loss of time entailed in the conduct of preliminary investigations, with the consequent extension of deprivation of the accused’s liberty, in case he fails to post bail, which at times outlasts the period of the penalty provided by law for the offense, besides the mental anguish suffered in protracted litigations, are eliminated with the assurance of a speedy and expeditious trial for the accused, upon his arraignment (without having to undergo the second stage of the preliminary investigation), and of a prompt verdict on his guilt or innocence. On the other hand, the so-called first stage of preliminary investigation or the preliminary examination, conducted by the duly authorized officer, as borne out by the examination and sworn written statement of the complainants and their witnesses, generally suffices to establish the existence of reasonable ground to charge the accused with having committed the offense complained of." 19

The preliminary examination prior to the issuance of a warrant of arrest and the sworn statements of the complainant and his witnesses are sufficient to establish whether "there is a reasonable ground to believe that an offense has been committed and the accused is probably guilty thereof", to prevent needless waste or duplication of time and effort. 20

In the case at bar, the offenses charged against petitioners for "Trespass to Dwelling", "Grave Threats" and "Physical Injuries" were all within the jurisdiction of the City Court of San Carlos City. Under the circumstances, the complaints could be filed directly with the City Court which is empowered to conduct a preliminary examination for purposes of issuance of warrants of arrest, and thereafter to proceed with the trial of the cases on the merits. The preliminary investigation proper conducted by the Office of the City Fiscal could have been dispensed with. Neither did the earlier order of dismissal of the complaints by the investigating fiscal bar the filing of said complaints with the city court on the ground of double jeopardy.

". . . The result of a preliminary investigation can neither constitute nor give rise to the defense of double jeopardy in any case, because such preliminary investigation is not and does not in itself constitute a trial or even any part thereof. The only purpose of a preliminary investigation is to determine, before the presentation of evidence by the prosecution and by the defense, if the latter party should wish to present any, whether or not there are reasonable grounds for proceeding formally and resolutely against the accused (People v. Peji Bautista, G.R. No. 45739, April 25, 1939; U.S. v. Yu Tuico, 34 Phil. 209). In order that the defense of jeopardy may lie, there must be a former judgment, either of acquittal or of conviction, rendered by a court competent to render the same, not only by reason of the offense committed, which must be the same or at least comprised within it, but also by reason of the place where it was committed. Under the established facts it cannot be stated that the same circumstances exist in the case under consideration. Consequently, the defense of double jeopardy is untenable." 21

As long as the offense charged has not prescribed, the city court has the power and authority to conduct a preliminary examination and proceed with the trial of the case properly within its jurisdiction. The prescriptive period of a crime depends upon the penalty imposed by law. The penalty of arresto mayor is imposed by law for the crimes of Trespass to Dwelling", 22 "Grave Threats", which is not subject to a condition 23 and "Less Serious Physical Injuries" which has incapacitated the offended party for ten (10) days or shall require medical attendance for the same period; 24 for "Serious Physical Injuries" which has caused illness or incapacity for labor for more than thirty (30) days, the penalty is arresto mayor in its maximum period to prision correccional in its minimum period. 25 The prescriptive period of offenses punishable by arresto mayor is five (5) years, while crimes punishable by correctional penalties prescribe in ten (10) years. 26 The incident at bar occurred on 19 October 1980, while the complaints were filed with the City Court nine (9) months from said occurrence or on 28 July 1981, thus, the crimes charged had not yet prescribed under the given facts.

From the order of the City Court finding reasonable ground to believe that a crime was committed and the accused probably guilty thereof, petitioners cannot seek a re-investigation by the Office of the City Fiscal. The re-investigation sought by petitioners applies only to instances where a case is cognizable by the Court of First Instance but filed with the City Court for purposes of preliminary investigation only and thereafter dismissed by the latter on the ground that no prima facie case exists. However, for cases cognizable by inferior courts and filed with the same not only for purposes of preliminary investigation but for trial on the merits, the Office of the City Fiscal has no authority to re-investigate.

WHEREFORE, the petition is hereby DISMISSED. Costs against petitioners.

SO ORDERED.

Melencio-Herrera, Paras, Sarmiento and Regalado, JJ., concur.

Endnotes:

1. Penned by Judge Ricardo P. Resultan, Rollo, pp. 39, 41, 43 & 45.

2. Ibid., pp. 48-51.

3. Rollo, p. 29.

4. Ibid., pp. 19-20.

5. Ibid., p. 24.

6. Ibid., pp. 25-28.

7. Ibid., p. 35.

8. Ibid., p. 36.

9. Ibid., pp. 38, 40, 42 and 44.

10. Ibid., pp. 39, 40, 42 and 44.

11. Ibid., p. 24.

12. Ibid., pp. 48-51.

13. Ibid., pp. 56-58.

14. Salta v. CA, L-41395, 31 July 1986, 143 SCRA 228.

15. Biron v. Cea, G.R. No. 48110, 16 Sept. 1942, 73 Phil. 673; Hashim v. Boncan, 24 Phil. 116.

16. People v. Badilla, L-23792, 17 February 1926, 48 Phil. 718.

17. U.S. v. Yu Toico, L-1115, 10 March 1916, 34 Phil. 209; People v. Medted, L-46108, 22 Sept. 1939, 68 Phil. 485.

18. Under Sec. 9, Rule 112 of the 1985 Rules on Criminal Procedure, cases not falling under the original jurisdiction of the Regional Trial Courts and those covered by the Rules on Summary Procedure do not require a preliminary investigation, to wit:jgc:chanrobles.com.ph

"Sec. 9. Cases not falling under the original jurisdiction of the Regional Trial Courts nor covered by the Rule on Summary Procedure.

(a) Where filed with the fiscal. — If the complaint is filed directly with the fiscal or state prosecutor, the procedure outlined in Section 3(a) of this Rule shall be observed. The fiscal shall take appropriate action based on the affidavits and other supporting documents submitted by the complainant.

(b) Where filed directly with the Municipal Trial Court. — If the complaint or information is filed directly with the Municipal Trial Court, the procedure provided for in Section 3(a) of this Rule shall likewise be observed. If the judge finds no sufficient ground to hold the respondent for trial, he shall dismiss the complaint or information. Otherwise, he shall issue a warrant of arrest after personally examining in writing and under oath the complainant and his witnesses in the form of searching questions and answers. (n)"

19. Banzon v. Cabato, L-31447, 27 June 1975, 64 SCRA 419.

20. Fabie v. Ong, L-46773, 16 July 1979, 91 SCRA 451.

21. People v. Medted, G.R. No. L-46108, 22 Sept. 1939, 68 Phil. 489.

22. Revised Penal Code, Art. 280.

23. Ibid., Art. 282.

24. Ibid., Art. 265.

25. Ibid., Art. 263.

26. Ibid., Art. 90.

G.R. No. 69210 July 5, 1989 - PEOPLE OF THE PHIL. v. GUILLERMO LAYUSO

2012-11-11T16:53:05+00:00

THIRD DIVISION

[G.R. No. 69210. July 5, 1989.]

PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. GUILLERMO LAYUSO, Accused-Appellant.

SYLLABUS

1. CONSTITUTIONAL LAW; BILL OF RIGHTS; RIGHTS TO COUNSEL; REQUIREMENT FULFILLED IN CASE AT BAR. — We rule that the constitutional requirement on assistance of counsel was fulfilled. There is no claim or showing that the accused asked for a lawyer from the moment he was apprehended or that he was not informed of his right to counsel from the time that the warning or information should have been given to him or that the alleged earlier questioning was already part of his confession. The appeal is hazy on these points.

2. ID.; ID.; ID.; LAWYER’S DECISION AGAINST ADVISING ACCUSED NOT TO ADMIT THE CRIME, A COMPLIANCE WITH LAWYER’S OATH AND ACCUSED’S DESIRE. — The attempt to now discredit him has no merit. If the lawyer decided against advising the accused not to admit the crime, he was only complying with his oath as a lawyer to abide by the truth and with the expressed desire of the accused to unburden his conscience of the load it was carrying.

3. ID.; ID.; ID.; NOT INTENDED TO STOP ACCUSED FROM SAYING SELF-INCRIMINATORY STATEMENTS; PURPOSE IS TO ASCERTAIN TRUTH. — This Court denounces in the strongest terms possible the widespread misconception that the presence of a lawyer under the "right to counsel" provision of the Constitution is intended to stop an accused from saying anything which might incriminate him. The right to counsel is intended to preclude the slightest coercion as would lead the accused to admit something false. The lawyer, however, should never prevent an accused from freely and voluntarily telling the truth. Whether it is an extra-judicial statement or testimony in open court, the purpose is always the ascertainment of truth.

4. REMEDIAL LAW; EVIDENCE; EXTRA-JUDICIAL CONFESSION; COERCION AND MALTREATMENT NOT ESTABLISHED IN CASE AT BAR. — The alleged coercion and maltreatment are not sustained by the records. There was a lawyer present while the statement was being taken. The appellant did not complain to the Fiscal before whom the oath was administered. In fact, the allegations are in the form of general conclusions. There is no specific statement as to what constituted the coercion and maltreatment.(People v. Canete, 129 SCRA 451 [1984]; People v. Villanueva, 128 SCRA 488 [1984]).

5. ID.; ID.; ID.; CONVICTION MAY BE HAD IF THERE IS ENOUGH EVIDENCE ASIDE FROM CONFESSION. — Moreover, the judgment of conviction was not made solely on the basis of the disputed extra-judicial confession. Layuso admits the killing. The physical evidence such as the ten stab wounds and three lacerated wounds; the bloodied plastic bag and the testimonies of Cesar Avila and two other disinterested persons, namely Lorenzo Bagang and Restituto Castillo are all consistent with robbery with homicide. In fact, even if an extra-judicial confession is disregarded, the accused may still be convicted if there is enough evidence aside from the confession itself. (People v. Nillos, 127 SCRA 207 [1984]).

6. ID.; ID.; ID.; CONFESSION REPLETE WITH DETAILS ONLY APPELLANTS COULD HAVE KNOWN ARE PRESUMABLY VOLUNTARY. — The narration of the appellant as to how he appropriated for himself the items mentioned as well as the sequence of the struggle could not have been supplied by any of those interviewed by police investigators and neither by the police themselves because it is replete with details known only to the appellant. As held in People v. Ribadajo (142 SCRA 637 [1986]), confessions replete with details only the appellants could have known are presumably voluntary.

7. ID.; ID.; WEIGHT AND SUFFICIENCY; INCONSISTENCY CANNOT BE GIVEN CREDENCE CONSIDERING THE WITNESSES’ UNCONTRADICTORY INCULPATORY STATEMENTS. — In the accused-appellant’s extrajudicial confession, he admitted taking the things from Cesar Avila’s house. Avila, in turn, identified these as the items which were lost. Avila’s testimony closely interlocks with the appellant’s statement on how he took the missing items. In his court testimony, the appellant denied taking anything. This inconsistency cannot be given credence on account of the uncontradicted testimonies of the two tricycle drivers who saw him bringing a bloodied plastic bag containing items inside.

8. ID.; ID.; WITNESSES’ LACK OF IMPROPER MOTIVES RENDERS THEIR TESTIMONIES CREDIBLE. — There is no evidence on record which would show that Lorenzo Bagang and Restituto Castillo were actuated by improper motives. Their testimonies should, therefore, be entitled to full faith and credit (People v. Patog, 144 SCRA 429 [1986]; People v. Adones, 144 SCRA 364 [1986]). Their testimonies were also corroborated by the testimony of Cesar Avila and by Layuso himself. The credibility of the appellant suffers when taken against the testimonies of the other witnesses. The appellant merely resorts to denial as to the robbery and a claim of self-defense as to the killing.

9. ID.; ID.; CIRCUMSTANTIAL EVIDENCE; NECESSITY; REQUISITES TO SUSTAIN CONVICTION. — In the case of People v. Pineda and Garcia (157 SCRA 71, January 15, 1988), this Court once more recognized the necessity of resorting to circumstantial evidence. We quote: "Crimes are usually committed in secret and under conditions where concealment is highly probable. To require direct testimony in all cases would result in the acquittal of guilty parties leaving them free to once more wreak havoc on society. We find the circumstantial evidence attending this case sufficient to warrant a conviction. Rule 134, Sec. 5 of the Rules of Court states that there is sufficiency in circumstantial evidence when: 1) there is more than one circumstance; 2) the facts from which the inferences are derived are proven; 3) the combination of all the circumstances is such as to produce a conviction beyond reasonable doubt. The requirements are satisfied in this case."cralaw virtua1aw library

10. CRIMINAL LAW; JUSTIFYING CIRCUMSTANCES; SELF-DEFENSE; TESTIMONY IN CASE AT BAR IS ILLOGICAL AND UNCONVINCING; INFLICTING MULTIPLE WOUNDS ON VICTIM IS INEXPLICABLE. — The appellant’s contention of self-defense must fail. His narration of the sequence of events is clearly illogical and unconvincing primarily on account of its inconsistency. The testimony of the accused cited by the trial judge in eleven (11) pages of his decision (Rollo, pp. 325-336) clearly shows its lack of credibility. In his testimony in court, Layuso claims that he and the victim were sweethearts and that after telling her he was going abroad to work, she got mad, tore his shirt, and the struggle ensued. On the other hand, he likewise claims in his extrajudicial confession that when he was on his way down, he met the victim who must have suspected that he had stolen something and that when he went near her to bid her goodbye, she suddenly stabbed him. Assuming that they were sweethearts, the victim’s alleged violent objections to his trip to Saudi Arabia was correctly held unbelievable. Under the same circumstances, a sweetheart would normally have welcomed the idea for the sake of a better future for both of them. Granting that the victim objected, the objection could not have taken such a violent form as to move the victim to resort to stabbing the appellant to prevent him from leaving. It is likewise unbelievable that the victim would suddenly stab him when he came near her only to say goodbye. And it is even more inexplicable why he would inflict so many multiple wounds on various parts of her body under the circumstances that he alleges.

D E C I S I O N

GUTIERREZ, JR., J.:

This is an automatic review of the decision of the Regional Trial Court of Pasig, Branch 153, convicting the accused, Guillermo Layuso of the crime of ROBBERY with HOMICIDE and imposing on him the supreme penalty of death.

The information reads:jgc:chanrobles.com.ph

"That on or about the 14th day of October 1980, in the municipality of Pateros, Metro Manila, Philippines and within the jurisdiction of this Honorable Court, the above-named accused, with intent of gain and without the knowledge and consent of the owner thereof, that is by then and there entering the residence of one Cesar C. Avila, thru an opening not intended for egress or ingress, thru which he gained entrance, and once inside, did then and there wilfully, unlawfully and feloniously take, steal and carry away the following articles, to wit:jgc:chanrobles.com.ph

"One (1) Radio Digital Alarm Clock valued P2,310.00

"One (1) JVC brand Portable Radio/Tape recorder

cassette valued 1,500.00

"One Plated Unisex wrist watch value 500.00

"One (1) set of collector’s silver coin (CBP) 500.00

P4,810.00

all in the total amount of P4,810.00 belonging to said Cesar C. Avila, to the damage and prejudice of the owner thereof in the aforementioned amount of P4,810.00.

"That on the said occasion, the above-named accused, did then and there wilfully, unlawfully and feloniously attack, assault and stab one Lucresia R. Dagsaan with bladed weapons (knives), thereby inflicting upon the latter stab wounds which directly caused her death.

"Contrary to law." (Rollo. p. 5)

Upon arraignment on April 22, 1981, the accused assisted by a counsel-de-oficio, pleaded "NOT GUILTY." Trial on the merits ensued and a decision was subsequently rendered on September 12, 1984. The dispositive portion of the decision reads:jgc:chanrobles.com.ph

"WHEREFORE, premises considered and it appearing that the commission of the crime was attended by the aggravating circumstances of dwelling, lack of respect due the victim on account of her sex and that the accused took advantage of his superior strength, without having been off-set by any mitigating circumstance, the Court hereby sentences the accused Guillermo M. Layuso to suffer the penalty of Death, to indemnify the heirs of Lucresia Dagsaan in the sum of Twelve Thousand (P12,000.00) Pesos; to return to Cesar C. Avila the things robbed and/or their value, as follows:jgc:chanrobles.com.ph

"1. One (1) Radio Digital Alarm Clock worth P2,310.00

"2. One (1) JVC Brand Portable Radio/Tape

Recorder cassette worth 1,500.00

"3. One (1) plated unisex wrist watch worth 500.00

"4. One (1) set of collectors silver coin worth 500.00

P4,810.00

without subsidiary imprisonment in case of insolvency and to pay the costs.

"Pursuant to the provisions of Section 9, Rule 122 of the Rules of Court, let the records of the above-entitled case be forwarded to the Supreme Court of the Philippines for review as law and justice shall dictate." (Rollo, p. 35)

The facts of the case are summarized by the trial court as follows:jgc:chanrobles.com.ph

"From the evidence adduced by prosecution, it has been duly established that the accused Guillermo Layuso was one of the carpenters, who worked in the construction of Cesar C. Avila’s house, located at Agujo St., Pateros, Metro Manila. After completion of the house, Cesar Avila used to hire Guillermo Layuso to do carpentry work in said house. The last work done by Guillermo Layuso was the construction of the garage.

"At about noontime of October 14, 1980, somebody entered into the house of Cesar Avila and killed his maid named Lucresia Dagsaan. The injuries sustained by Lucresia Dagsaan, who was pronounced dead on arrival by the doctors at the Rizal Provincial Hospital, were established thru the testimony of Dr. Ruben M. Angobung, who conducted the autopsy, post mortem examination.

x x x

"In a follow-up investigation, the police found out that the culprit is Guillermo Layuso. Upon physical investigation and examination of the house by the police investigators accompanied by Cesar Avila, they found the following articles or things missing from the house: ‘A digital alarm clock worth P2,310.00; a unisex watch worth P500.00; a radio tape recorder worth P1,500.00, and silver coin collection of P500.00. They also found bloodstains in the sala; in the kitchen; in the master’s bedroom, particularly on the carpets; on the handle of the door knob to the office on the ground floor of the house; and in the carpet inside the bedroom at the second floor. A kitchen knife was found in the sala and another was found in the kitchen. There were broken bottles in front of the bar and a broken bottle of catsup was also found in the kitchen.

"Sometime after the incident, Cesar Avila received a letter from the accused. This letter although previously marked as Exhibit "A", could not be found in the record of the case. Neither was the same turned over to the Minutes Clerk when the Prosecuting Fiscal made an oral offer of evidence on April 9, 1984.

"Through the testimony of tricycle drivers Lorenzo S. Bagang and Restituto Castillo, it has been established that the accused Guillermo Layuso, stripped of clothes from the waist up, with blood on the left shoulder and wound on the hand, boarded the tricycle, first of Lorenzo Bagang, at the place near the house of Cesar Avila at about noontime of October 14, 1980. He was bringing something in a plastic bag, the height of which was demonstrated to be about twenty four inches. The contents of the plastic bag were not seen by these witnesses because it was closed and the accused placed the same between his legs. The accused asked Lorenzo Bagang to take him to Rosario but the latter refused because he had to fetch a passenger from the Municipal Hall. The accused disembarked from the tricycle of Lorenzo Bagang at Morcilla Street.

"The accused, who was described by witness Restituto Castillo as ‘sporting a long hair’ with ‘a high bridged nose’ and ‘bringing along a plastic bag’, boarded the latter’s (witness) tricycle at P. Herrera Street and alighted near a basketball court, near the river, in Buting. The plastic bag, according to this witness, has blood all over it.

"Both Lorenzo Bagang and Restituto Castillo categorically identified the accused in open court as the person who boarded their respective tricycles on October 14, 1980." (Rollo, pp. 74-78).

The appellant admits he is guilty of homicide but assigns the following errors:chanrob1es virtual 1aw library

1. THAT THE LOWER COURT GRAVELY ERRED IN CONVICTING THE HEREIN APPELLANT FOR A SERIOUS CRIME OF ROBBERY WITH HOMICIDE.

2. THAT THE LOWER COURT ERRED IN NOT CONVICTING APPELLANT OF THE CRIME OF SIMPLE HOMICIDE. (Rollo, p. 103; Appellee’s Brief, p. 5)

The only issue raised in the case at bar is whether or not the appellant should be convicted of the crime of robbery with homicide instead of the crime of simple homicide.

The accused-appellant contends that the prosecution has failed to prove that the articles allegedly stolen were in fact in the house of Cesar Avila and it was the appellant who took them. He states that the finding was based on his extra-judicial statement which he claims was extracted through the use of force and intimidation.

The appellant admits that the confession was taken in the presence of counsel, a certain Atty. Casiano Atuel, Jr. However, he states that the counsel was not present during the custodial interrogation which preceded the taking down of his statement. He also questions the sufficiency of the lawyer’s representation. He states in his appeal that the lawyer should have participated by also asking him questions.

The alleged coercion and maltreatment are not sustained by the records. There was a lawyer present while the statement was being taken. The appellant did not complain to the Fiscal before whom the oath was administered. In fact, the allegations are in the form of general conclusions. There is no specific statement as to what constituted the coercion and maltreatment.(People v. Canete, 129 SCRA 451 [1984]; People v. Villanueva, 128 SCRA 488 [1984]; and People v. Dejaresco, 129 SCRA 576 [1984]).

We rule that the constitutional requirement on assistance of counsel was fulfilled. There is no claim or showing that the accused asked for a lawyer from the moment he was apprehended or that he was not informed of his right to counsel from the time that the warning or information should have been given to him or that the alleged earlier questioning was already part of his confession. The appeal is hazy on these points.

What is established was the presence of counsel during the taking of the confession. The attempt to now discredit him has no merit. If the lawyer decided against advising the accused not to admit the crime, he was only complying with his oath as a lawyer to abide by the truth and with the expressed desire of the accused to unburden his conscience of the load it was carrying.

This Court denounces in the strongest terms possible the widespread misconception that the presence of a lawyer under the "right to counsel" provision of the Constitution is intended to stop an accused from saying anything which might incriminate him. The right to counsel is intended to preclude the slightest coercion as would lead the accused to admit something false. The lawyer, however, should never prevent an accused from freely and voluntarily telling the truth. Whether it is an extra-judicial statement or testimony in open court, the purpose is always the ascertainment of truth.

Moreover, the judgment of conviction was not made solely on the basis of the disputed extra-judicial confession. Layuso admits the killing. The physical evidence such as the ten stab wounds and three lacerated wounds; the bloodied plastic bag and the testimonies of Cesar Avila and two other disinterested persons, namely Lorenzo Bagang and Restituto Castillo are all consistent with robbery with homicide. In fact, even if an extra-judicial confession is disregarded, the accused may still be convicted if there is enough evidence aside from the confession itself. (People v. Nillos, 127 SCRA 207 [1984]).

The narration of the appellant as to how he appropriated for himself the items mentioned as well as the sequence of the struggle could not have been supplied by any of those interviewed by police investigators and neither by the police themselves because it is replete with details known only to the appellant. As held in People v. Ribadajo (142 SCRA 637 [1986]), confessions replete with details only the appellants could have known are presumably voluntary.

In the accused-appellant’s extrajudicial confession, he admitted taking the things from Cesar Avila’s house. Avila, in turn, identified these as the items which were lost. Avila’s testimony closely interlocks with the appellant’s statement on how he took the missing items. In his court testimony, the appellant denied taking anything. This inconsistency cannot be given credence on account of the uncontradicted testimonies of the two tricycle drivers who saw him bringing a bloodied plastic bag containing items inside. (tsn., July 20, 1981, p. 23).

There is no evidence on record which would show that Lorenzo Bagang and Restituto Castillo were actuated by improper motives. Their testimonies should, therefore, be entitled to full faith and credit (People v. Patog, 144 SCRA 429 [1986]; People v. Adones, 144 SCRA 364 [1986]). Their testimonies were also corroborated by the testimony of Cesar Avila and by Layuso himself. The credibility of the appellant suffers when taken against the testimonies of the other witnesses. The appellant merely resorts to denial as to the robbery and a claim of self-defense as to the killing.

The fact that no one saw the accused take the items is of no consequence. There is credible testimony regarding the loss. It is established that there were such articles of value. He ran away and boarded two tricycles carrying a plastic bag with items inside it. The extra-judicial confession of the accused discloses that he took the missing items.

The appellant’s contention of self-defense must fail. His narration of the sequence of events is clearly illogical and unconvincing primarily on account of its inconsistency. The testimony of the accused cited by the trial judge in eleven (11) pages of his decision (Rollo, pp. 325-336) clearly shows its lack of credibility. In his testimony in court, Layuso claims that he and the victim were sweethearts and that after telling her he was going abroad to work, she got mad, tore his shirt, and the struggle ensued. On the other hand, he likewise claims in his extrajudicial confession that when he was on his way down, he met the victim who must have suspected that he had stolen something and that when he went near her to bid her goodbye, she suddenly stabbed him.

Assuming that they were sweethearts, the victim’s alleged violent objections to his trip to Saudi Arabia was correctly held unbelievable. Under the same circumstances, a sweetheart would normally have welcomed the idea for the sake of a better future for both of them. Granting that the victim objected, the objection could not have taken such a violent form as to move the victim to resort to stabbing the appellant to prevent him from leaving. It is likewise unbelievable that the victim would suddenly stab him when he came near her only to say goodbye. And it is even more inexplicable why he would inflict so many multiple wounds on various parts of her body under the circumstances that he alleges.

In the case of People v. Pineda and Garcia (157 SCRA 71, January 15, 1988), this Court once more recognized the necessity of resorting to circumstantial evidence. We quote:jgc:chanrobles.com.ph

"Crimes are usually committed in secret and under conditions where concealment is highly probable. To require direct testimony in all cases would result in the acquittal of guilty parties leaving them free to once more wreak havoc on society.

"We find the circumstantial evidence attending this case sufficient to warrant a conviction. Rule 134, Sec. 5 of the Rules of Court states that there is sufficiency in circumstantial evidence when: 1) there is more than one circumstance; 2) the facts from which the inferences are derived are proven; 3) the combination of all the circumstances is such as to produce a conviction beyond reasonable doubt. The requirements are satisfied in this case."cralaw virtua1aw library

The record further shows that not only dwelling aggravated the commission of the crime, but there was also a very patent display of lack of respect due the victim on account of her sex and the viciousness of the wounds inflicted upon her.

WHEREFORE, the appealed judgment is hereby AFFIRMED with the MODIFICATION that the penalty of death is commuted to reclusion perpetua in accordance with the Constitution, Section 19, Article III. The indemnity to the heirs of Lucresia Dagsaan is also increased to THIRTY THOUSAND PESOS (P30,000.00) in consonance with the latest rulings of this Court.

SO ORDERED.

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

G.R. No. 77827 July 5, 1989 - MACARIO D. ZAPATA v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

2012-11-11T16:53:05+00:00

SECOND DIVISION

[G.R. No. 77827. July 5, 1989.]

MACARIO D. ZAPATA, Petitioner, v. NATIONAL LABOR RELATIONS COMMISSION and PEDRO T. SICCION, Respondents.

SYLLABUS

1. REMEDIAL LAW; SPECIAL CIVIL ACTION; CERTIORARI WILL NOT LIE ABSENT A GRAVE ABUSE OF DISCRETION. — A careful perusal of the records of this case yields the irresistible conclusion that respondent NLRC was correct in holding that private respondent is entitled to and should be granted his aforesaid separation pay and overtime pay. It is evident, therefore, that respondent commission did not fall into error in the exercise of its discretion, much less did it commit a grave abuse thereof. There is nothing arbitrary, capricious, or oppressive, as to amount to lack of jurisdiction, in the decision of said public Respondent. Said decision being based on substantial evidence with no infirmity or circumstance in the factual findings which would detract from the conclusiveness thereof, We are without authority to amend or otherwise revoke the same. Whatever flaw could conceivably be attributed to respondent NLRC would, at most, be a mere error of judgment which the Court has consistently ruled, because Rule 65 so mandates, cannot be a proper subject of the special civil action for certiorari. Consequently, the extraordinary writ prayed for will not lie.

2. LABOR LAW AND SOCIAL LEGISLATIONS; NATIONAL LABOR RELATIONS COMMISSION; MOTION FOR RECONSIDERATION, A PREREQUISITE BEFORE ANY FURTHER REMEDY MAY BE PURSUED. — Fatal to this action is petitioner’s failure to move for the reconsideration of the assailed decision on the dubious pretext that it will be a mere rehash of the arguments and issues previously raised in his position paper, but which stratagem conveniently skirts as a consequence the reglementary period therefor, especially if the same has already expired. The implementing rules of respondent NLRC are unequivocal in requiring that a motion for reconsideration of the order, resolution, or decision of respondent commission should be seasonably filed as a precondition for pursuing any further or subsequent remedy, otherwise the said order, resolution, or decision shall become final and executory after ten calendar days from receipt thereof.

3. ID.; ID.; ID.; RATIONALE. — The rationale therefor is that the law intends to afford the NLRC an opportunity to rectify such errors or mistakes it may have lapsed into before resort to the courts of justice can be had. This merely adopts the rule that the function of a motion for reconsideration is to point out to the court the error that it may have committed and to give it a chance to correct itself. Petitioner cannot, on its bare and self-serving representation that reconsideration is unnecessary, unilaterally disregard what the law requires and deny respondent NLRC its right to review its pronouncements before being haled to court to account therefor. On policy considerations, such prerequisite would provide an expeditious termination to labor disputes and assist in the decongestion of court dockets by obviating improvident and unnecessary recourse to judicial proceedings. The present case exemplifies the very contingency sought to be, and which could have been, avoided by the observance of said rules.

D E C I S I O N

REGALADO, J.:

The antecedent facts of this case, as chronologized by the Solicitor General and based on the findings of respondent National Labor Relations Commission (NLRC, for brevity), are as follows:jgc:chanrobles.com.ph

"1. Private respondent Pedro T. Siccion started working as a laborer since December 1958 with Celilu Manufacturing Corporation, owned and managed by herein petitioner, Macario D. Zapata.

"2. In 1960, when Celilu transferred to Cainta, Rizal, private respondent was promoted to inspector, determining the quality of the finished wire products until Celilu closed shop in 1976.

"3. However, private respondent continued working with the petitioner in the manufacture of wire products and also as security guard in 1978 when the regular security guard was dismissed.

"4. On September 15, 1983, he was informed of the loss of a heavy-duty Singer Sewing machine for which he was advised as terminated by September 30, 1983 with termination pay, which the petitioner complied with although he was not given the promised termination pay.

"5. This prompted the private respondent to file on October 11, 1983 the instant complaint against the petitioner with the National Capital Region of the Ministry of Labor, for illegal dismissal and overtime pay.

"6. After the parties had filed their respective position papers and supporting documentary evidence, the Labor Arbiter rendered a decision on December 28, 1984, the dispositive portion of which reads:chanrob1es virtual 1aw library

‘IN VIEW OF THE FOREGOING, respondent Macario D. Zapata should be, as he is hereby directed to pay complainant Pedro T. Siccion the amount of Two Thousand (2,000.00) Pesos as separation pay. The complaint for overtime pay is dismissed without prejudice for lack of basis.’

"7. However, on appeal by private respondent, the respondent Commission promulgated on February 4, 1987 a Decision modifying the afore-quoted Labor Arbiter’s decision, by ordering the petitioner to pay the private respondent a separation pay at the rate of one month salary for every year of service starting from 1958 up to 1983, and overtime pay from the year 1978 up to 1983 . . ." 1

Hence, this petition for certiorari to set aside said decision of respondent commission. 2

Petitioner avers that public respondent committed a grave abuse of discretion in modifying the labor arbiter’s decision by granting separation pay at the rate of one month salary for every year of service for the period from 1958 to 1983, and granting overtime pay from 1978 to 1983.

We find this petition meritless both substantively and procedurally.

A careful perusal of the records of this case yields the irresistible conclusion that respondent NLRC was correct in holding that private respondent is entitled to and should be granted his aforesaid separation pay and overtime pay.

Respondent commission correctly justified such award for separation pay from 1958 to 1983, thus:jgc:chanrobles.com.ph

"It is not disputed that complainant was previously employed in 1958 as laborer of Celilu Manufacturing Corporation, a company owned and managed by herein respondent Macario D. Zapata. Evidence submitted showed that Celilu closed shop in 1976. Complainant, however, continued working with respondent Macario D. Zapata in the manufacture of wire products and as security guard when the regular security guard was dismissed in 1978 . . .

"As for the cause of complainant’s dismissal, respondent accused the former of having stolen some properties of the latter. This accusation has no factual basis. In respondent’s own position paper, Zapata alleges that one Singer sewing machine, 20 pieces of G.I. pipes and 22 rolls of canvass were missing. However, in his affidavit, he enumerates the loss of one sewing machine, one adding machine and one chair. These contradictory assertion (sic) would reflect respondent’s doubtful and weak averments. Inferentially, it could be deduced that the alleged pilferage is based merely on assumption of fact without substantial evidence in support thereof. On this score, the dismissal in question is illegal for which complainant is entitled to reinstatement with backwages. Considering, however, complainant’s prayer is one for payment of separation pay, the same should be, as it is hereby ordained to be computed from 1958 up to the date of his dismissal." (Italics supplied). 3

The grant of overtime pay was likewise not without basis, for as categorically found by said public respondent —

"Complainant further claims that the Arbiter committed an error in concluding that he (complainant) failed to ventillate (sic) his claims for overtime compensation. Accordingly, the Arbiter dismissed the claims without prejudice. However, it is noted that complainant categorically stated in his sworn statement (sinumpaang salaysay) that from 1978 he acted as security guard from 5:00 a.m. up to 8:00 in the evening. This specific allegation was never denied nor controverted by the respondent who merely posed the defense of complainant’s househelper employment status." 4

It is evident, therefore, that respondent commission did not fall into error in the exercise of its discretion, much less did it commit a grave abuse thereof. There is nothing arbitrary, capricious, or oppressive, as to amount to lack of jurisdiction, in the decision of said public Respondent. Said decision being based on substantial evidence with no infirmity or circumstance in the factual findings which would detract from the conclusiveness thereof, We are without authority to amend or otherwise revoke the same. Whatever flaw could conceivably be attributed to respondent NLRC would, at most, be a mere error of judgment which the Court has consistently ruled, because Rule 65 so mandates, cannot be a proper subject of the special civil action for certiorari. Consequently, the extraordinary writ prayed for will not lie.

Furthermore, fatal to this action is petitioner’s failure to move for the reconsideration of the assailed decision on the dubious pretext that it will be a mere rehash of the arguments and issues previously raised in his position paper, but which stratagem conveniently skirts as a consequence the reglementary period therefor, especially if the same has already expired. The implementing rules of respondent NLRC are unequivocal in requiring that a motion for reconsideration of the order, resolution, or decision of respondent commission should be seasonably filed as a precondition for pursuing any further or subsequent remedy, otherwise the said order, resolution, or decision shall become final and executory after ten calendar days from receipt thereof. 5 Obviously, the rationale therefor is that the law intends to afford the NLRC an opportunity to rectify such errors or mistakes it may have lapsed into before resort to the courts of justice can be had. This merely adopts the rule that the function of a motion for reconsideration is to point out to the court the error that it may have committed and to give it a chance to correct itself. 6

Petitioner cannot, on its bare and self-serving representation that reconsideration is unnecessary, unilaterally disregard what the law requires and deny respondent NLRC its right to review its pronouncements before being haled to court to account therefor. On policy considerations, such prerequisite would provide an expeditious termination to labor disputes and assist in the decongestion of court dockets by obviating improvident and unnecessary recourse to judicial proceedings. The present case exemplifies the very contingency sought to be, and which could have been, avoided by the observance of said rules.

ACCORDINGLY, the petition is DISMISSED and the decision of respondent National Labor Relations Commission is hereby AFFIRMED in toto. This decision is immediately executory.

SO ORDERED.

Melencio-Herrera (Chairman), Paras, Padilla and Sarmiento, JJ., concur.

Endnotes:

1. Comment, 1-3; Rollo, 51-53.

2. NLRC-NCR-Case No. 10-4534-83; penned by Presiding Commissioner Daniel M. Lucas, Jr., with the concurrence of Commissioners Domingo M. Zapanta and Oscar N. Abella.

3. Rollo, 22-23.

4. Ibid., 23.

5. Sec. 9, Rule X and Sec. 2, Rule XI, New Rules of the NLRC.

6. Gonzales v. Santos, 1 SCRA 1151 (1961); Luzon Stevedoring Co., Inc. Et. Al. v. Court of Industrial Relations, Et Al., 8 SCRA 447 (1963); Guerra Enterprises Company, Inc. v. Court of First Instance of Lanao del Sur, Et Al., 32 SCRA 314 (1970); Phil. Advertising Counsellors Inc. v. Revilla, Et Al., 52 SCRA 246 (1973); Siy v. Court of Appeals, Et. Al. 138 SCRA 536 (1985).

G.R. No. 78011 July 5, 1989 - RURAL BANK OF SARIAYA, INC. v. BENJAMIN YACON, ET AL.

2012-11-11T16:53:05+00:00

SECOND DIVISION

[G.R. No. 78011. July 5, 1989.]

RURAL BANK OF SARIAYA, INC., Petitioner, v. BENJAMIN YACON, MAXIMA BAUTISTA, HONORIO BAUTISTA, ISABEL ALVAREZ, PAULINO BAUTISTA, CONSUELO YACON, and COURT OF APPEALS, Respondents. **

Lorenzo F. Miravite for Petitioner.

Gilbert Camaligan for Private Respondents.

SYLLABUS

1. CIVIL LAW; LAND REGISTRATION; MORTGAGE; MORTGAGE HAS RIGHT TO RELY ON WHAT APPEARS ON THE CERTIFICATE OF TITLE. — Where the certificate of title is in the name of the mortgagor when the land is mortgaged, the innocent mortgagee for value has the right to rely on what appears on the certificate of title. In the absence of anything to excite or arouse suspicion, said mortgagee is under no obligation to look beyond the certificate and investigate the title of the mortgagor appearing on the face of said certificate. Although Article 2085 of the Civil Code provides that absolute ownership of the mortgaged property by the mortgagor is essential, the subsequent declaration of a title as null and void is not a ground for nullifying the mortgage right of a mortgagee in good faith.

2. COMMERCIAL LAW; BANKING LAWS; INVESTIGATION OF LAND OFFERED AS COLLATERAL; A COMMON PRACTICE OF BANKS AND FAILURE TO DO SO IS NEGLIGENCE; BANKS NOT PROTECTED BY ACT 496. — We took judicial notice of the common practice of banks, before approving a loan, to send a representative to the premises of the land offered as collateral and duly investigate who are the true owners thereof. Failure to do so was considered as constitutive of negligence on the part of the banks. This is in keeping with the bank’s responsibility to exercise care and prudence in dealing even with registered land, more than in the case of private individuals. The banks’ business is "affected with public interest, keeping in trust money belonging to their depositors, which they should guard against loss by not committing any act of negligence which amount to lack of good faith by which they would be denied the protective mantle of the land registration statute, Act No. 496 (now Presidential Decree No. 1529), extended only to purchasers for value and in good faith, as well as to mortgagees of the same character and description."cralaw virtua1aw library

3. REMEDIAL LAW; APPEAL; FINDINGS OF COURT OF APPEALS NOT DISTURBED ON APPEAL. — There being an exiguity of countervailing evidence, We see no reason for disturbing the findings of the Court of Appeals confirmatory of those of the trial court, which findings are consequently entitled to respect.

D E C I S I O N

REGALADO, J.:

This case originated from the then Court of First Instance of Quezon, Branch III in Lucena City, where respondents herein filed a complaint for the cancellation of Transfer Certificate of Title No. T-142490 of the Register of Deeds of Quezon and for the declaration of the nullity of the following documents: (1) Special Power of Attorney, dated October 30, 1976, recorded as Doc. No. 105, Page No. 22, Book No. XXIII, Series of 1976, of the Notarial Register of Notary Public Godofredo B. Bañez; (2) Deed of Absolute Sale, dated November 17, 1976, notarized as Doc. No. 176, Page No. 37, Book No. XXIII, Series of 1976, of the same notary public; and (3) Deed of Real Estate Mortgage executed by one Luis Parco on December 13, 1976 in favor of petitioner Rural Bank of Sariaya, Inc., identified as Doc. No. 1559, Page No. 100, Book No. XII, Series of 1976, of Notary Public Angelito Arana.

Named as defendants therein were Luis B. Parco, Florentino B. Alcantara, Aniano Tantuco, Efren Rocha, Gregorio Cordero, Godofredo Bañez and petitioner Rural Bank of Sariaya, Inc. 1

The factual background, which was established and became the basis of the decision appealed from, is succinctly stated by respondent Court of Appeals, as follows:jgc:chanrobles.com.ph

"The plaintiffs alleged in their complaint that they are the registered owners and possessors of the land in question, containing an area of 11.8717 hectares more or less. Sometime in October 1976, plaintiffs entrusted their owner’s copy of their TCT No. T-38632 covering the land in question to their nephew, defendant Florentino Alcantara, whom they approached for the purpose of obtaining a bigger loan from a bank in Manila with the land as collateral. Alcantara promised he can work for it. After a few days, Alcantara returned to plaintiffs’ house and he brought with him plaintiffs to the house of one Gregorio Cordero who lives in Candelaria, Quezon, wherein Alcantara introduced to plaintiffs Aniano Tantuco, Efren Rocha and Cordero who told plaintiffs that they have prepared the latter’s application for a real estate mortgage. These people convinced plaintiffs to sign said papers as a requirement for securing a loan from the Bank in Manila.

"Without understanding the contents thereof as plaintiffs do not understand English, the language in which the documents were written and having trust and confidence in their nephew, Alcantara, plaintiffs signed the prepared documents in their behalf that they were indeed applications for a loan. The defendants assured plaintiffs that they would be notified as soon as the loan would be ready for release.

"Plaintiffs never heard from defendants until in April 1977, plaintiffs discovered that their Transfer Certificate of Title No. T-38632 had been cancelled and in lieu thereof Transfer Certificate of Title No. T-142490 had been issued in favor of defendant Luis Parco. Plaintiffs also found that the papers they were made to sign in Cordero’s house included a Special Power of Attorney in favor of Alcantara with authority to ‘negotiate, to mortgage and to sell’ the property.

"Defendant Parco was able to transfer the title covering the land in his name and he was able to mortgage the land in favor of the defendant Rural Bank of Sariaya, Inc., for a loan of P24,500.00.

"Plaintiff (sic) never received the proceeds of the sale neither did they ever intend to sell the property. Plaintiffs never authorized Alcantara to sell the land and plaintiffs had always been in possession of the land to the present. Plaintiffs filed this instant action for annulment of documents and damages against all defendants.

"Defendant Luis Parco filed his answer admitting that he bought the land from Alcantara and mortgaged it with the Rural Bank of Sariaya, Inc., for a loan of P24,500.00 but denied the rest of the material allegations of the complaint. He set up the affirmative defense of being a buyer in good faith.

"Defendant Sariaya, Inc., alleged it acted in good faith in granting the loan of P24,500.00 in favor of defendant Parco and it had no knowledge about the truth of the averments in the complaint.

"All other defendants denied the material averments of the complaint and prayed for dismissal of the complaint against them.

"Defendant Florentino Alcantara admitted the averments in the complaint alleging he himself was deceived into signing the documents in question. He stated he never executed a deed of sale covering the property in favor of defendant Parco and he never went to Manila to execute and acknowledge the same before any Notary Public. He never received from defendant Parco any consideration for the sale. Defendant Alcantara likewise prayed for the declaration of nullity of documents in question." 2

On December 17, 1982, the court a quo 3 rendered judgment nullifying the special power of attorney and deed of real estate mortgage hereinbefore mentioned, and cancelling Transfer Certificate of Title No. T-142490 and restoring the validity and legal effect of Transfer Certificate of Title No. T-38632. The defendants, except Godofredo Bañez, were ordered to pay jointly and severally the plaintiffs forty thousand pesos (P40,000.00) as actual and moral damages, twenty thousand pesos (P20,000.00) as litigation expenses, and ten thousand pesos (P10,000.00) as attorney’s fees. 4

Petitioner bank and its co-defendant Luis Parco seasonably appealed to the then Intermediate Appellate Court, but said appeal resulted in the affirmance of the decision of the trial court. 5 Petitioner bank’s motion for reconsideration was denied on March 27, 1987, hence this petition.

The rule applicable to this controversy, with the exception thereto, is well settled. Where the certificate of title is in the name of the mortgagor when the land is mortgaged, the innocent mortgagee for value has the right to rely on what appears on the certificate of title. In the absence of anything to excite or arouse suspicion, said mortgagee is under no obligation to look beyond the certificate and investigate the title of the mortgagor appearing on the face of said certificate. Although Article 2085 of the Civil Code provides that absolute ownership of the mortgaged property by the mortgagor is essential, the subsequent declaration of a title as null and void is not a ground for nullifying the mortgage right of a mortgagee in good faith. 6

The rationale for this rule is stated thus:jgc:chanrobles.com.ph

"The main purpose of the Torrens System is to avoid possible conflicts of title to real estate and to facilitate transactions relative thereto by giving the public the right to rely upon the face of a Torrens certificate of title and to dispense with the need of inquiring further, except when the party concerned had actual knowledge of facts and circumstances that should impel a reasonably cautious man to make such further inquiry (Pascua v. Capuyoc, 77 SCRA 78). Thus, where innocent third persons relying on the correctness of the certificate thus issued, acquire rights over the property, the court cannot disregard such rights (Director of Land v. Abache, Et Al., 73 Phil. 606). The lien of the petitioner, an innocent mortgagee for value, must be respected and protected (Blanco v. Esquierdo, 110 Phil. 494)." 7

The applicability of the foregoing rule in the case at bar is not being questioned here. Neither is there a dispute as to the right of respondents to have the title of defendant Parco cancelled. What is in controversy is petitioner’s insistence that it is a mortgagee in good faith for value. Consequently, it submits that the circumstances of this case do not justify the imposition on it of the duty to look beyond Parco’s title.

Petitioner correspondingly dissects and takes exception to the following circumstances which the appellate court took into account in ruling against it, viz:jgc:chanrobles.com.ph

"a. When the Respondents-plaintiffs still had the torrens title in their names, Petitioner bank was willing to lend them P5,000.00 only; when defendant applied he was granted a P24,500.00 loan for the same land;

b. Petitioner bank did not inquire into the persons in possession of the same;

c. Respondents had used the same land as collateral in an earlier loan applied for by them;

d. Respondents have lived in Sariaya for a long time, while defendant Parco is a new client of the bank;

e. Petitioner bank could have inquired from the respondents about the fact that the sale of the land was through the alleged attorney in fact Alcantara and not from the plaintiffs themselves directly." 8

There is no ground to reject or deviate from the findings of both the trial court and the Court of Appeals. In cases heretofore decided by this Court, We took judicial notice of the common practice of banks, before approving a loan, to send a representative to the premises of the land offered as collateral and duly investigate who are the true owners thereof. Failure to do so was considered as constitutive of negligence on the part of the banks. This is in keeping with the bank’s responsibility to exercise care and prudence in dealing even with registered land, more than in the case of private individuals. The banks’ business is "affected with public interest, keeping in trust money belonging to their depositors, which they should guard against loss by not committing any act of negligence which amount to lack of good faith by which they would be denied the protective mantle of the land registration statute, Act No. 496 (now Presidential Decree No. 1529), extended only to purchasers for value and in good faith, as well as to mortgagees of the same character and description." 9

The finding that the petitioner bank failed to make adequate inquiries with the person in possession of the land had adequate evidentiary support. The testimony of the bank inspector, Ricardo Aro, Jr., that he went to the land together with an assistant inspector does not bespeak the diligent verification required in the circumstances. As earlier stated, the prudent practice is to investigate who are the true owners of the properties sought to be mortgaged. What appears to have been done in the present case is that petitioner merely went through the motions of sending a representative to the premises. When the inspector found nobody on the land on the date of inspection, he only counted the coconut trees, without bothering to look for the person in possession of the same. 10 He further testified that he did not bother to find out who was in actual possession of the property when he went to the premises, relying on the fact that the vice-president of the bank had already talked to Luis Parco. 11 Petitioner is, therefore, not in a position to assail the finding that Luis Parco never took possession of the land in question and that the respondents continuously and openly possessed the land without any disturbance. 12

On the other circumstances which merited the appellate court’s conclusion that petitioner acted with negligence amounting to bad faith, We agree that, considered in conjunction with one another and the other facts of record, petitioner’s present stance is far from tenable. One further consideration is the haste on the part of Luis Parco in applying for a loan, a circumstance which could not have escaped the attention of the bank’s personnel. As found by the court below, the loan application was filed on December 11, 1976, three days after the cancellation of respondents’ Transfer Certificate of Title No. T-38632 on December 8, 1976. 13 This hurried application for a loan is matched by petitioner bank’s dispatch in approving the same two days thereafter on December 13, 1976. 14 One can only view with puzzlement and suspicion this concordance of events, especially since Parco was a new client of the bank living in a town distant from Sariaya.

There being an exiguity of countervailing evidence, We see no reason for disturbing the findings of the Court of Appeals confirmatory of those of the trial court, which findings are consequently entitled to respect.

ACCORDINGLY, the appealed judgment is hereby AFFIRMED.

SO ORDERED.

Melencio-Herrera (Chairman), Paras, Padilla and Sarmiento, JJ., concur.

Endnotes:

** The former Intermediate Appellate Court, now the Court of Appeals, is deemed impleaded and is included in the caption of this case as the public Respondent.

1. Rollo, 31-38.

2. Ibid., 91-93.

3. Presided over by Judge Milagros V. Caguioa.

4. Rollo, 85-86.

5. Tenth Division; Justice Jose C. Campos, Jr., ponente, Justices Reynato S. Puno and Venancio D. Aldecoa, Jr., concurring.

6. Penullar v. Philippine National Bank, 90 SCRA 171 (1983); Duran, Et Al., v. Intermediate Appellate Court, Et Al., 138 SCRA 489 (1985); Philippine National Cooperative Bank v. Carrandang-Villalon, etc., Et Al., 139 SCRA 570 (1985); Philippine National Bank v. Court of Appeals, Et Al., 153 SCRA 435 (1987); Gonzales v. Intermediate Appellate Court, 157 SCRA 587 (1988).

7. St. Dominic Corporation v. Intermediate Appellate Court, Et Al., 151 SCRA 577, 586-587 (1987).

8. Petition, 10; Rollo, 11.

9. Gaotian v. Gaffud 27 SCRA 706, 714-15 (1969); Tomas, Et Al., v. Tomas, Et Al., 98 SCRA 280, 286 (1980); Gonzales v. Intermediate Appellate Court, Et Al., 157 SCRA 587, 596 (1988).

10. Rollo, 19-21.

11. TSN, March 25, 1981, 23.

12. Rollo, 81-95.

13. Ibid., 80-81.

14. Rollo, 81.

G.R. No. 78282 July 5, 1989 - BRIGIDO RAMOS, ET AL. v. INTERMEDIATE APPELLATE COURT, ET AL.

2012-11-11T16:53:05+00:00

SECOND DIVISION

[G.R. No. 78282. July 5, 1989.]

BRIGIDO RAMOS and FELICIDAD JUAN, Petitioners, v. INTERMEDIATE APPELLATE COURT, RODOLFO RAMOS and GERTRUDES MERCADO, Respondents.

Emilio G. Garcia & Associates, for Petitioners.

Teofilo Ragodon for Private Respondents.

SYLLABUS

1. CIVIL LAW; LAND REGISTRATION; PUBLIC LAND; APPLICANT DEEMED TO HAVE ACKNOWLEDGED STATE’S OWNERSHIP OVER LAND. — The applicant should be deemed to have acknowledged that the land belongs to the State when they filed an application for its purchase with the administrative office concerned. It would have been absurd for them to have applied for the purchase of property which they believed was theirs.

2. ID.; OWNERSHIP OF ACCESSION; RIVER BEDS ABANDONED BY CHANGING COURSE OF WATER; ACQUISITION OF OWNER OF ADJOINING LOTS BY PAYMENT OF VALUE. — They contended that the land in dispute, being supposedly a part of an abandoned river bed, is automatically owned by them as owners of the adjoining lot. Had the petitioners proceeded to read the succeeding provisions of the Civil Code, they would not have missed Article 461 thereof which provides that "river beds which are abandoned through the natural change in the course of the waters ipso facto belong to the owners of the land occupied by the new course" with the owners of the adjoining lots having the right to acquire them only after paying their value.

3. ID.; PRESCRIPTION; ACTION FOR RECONVEYANCE PRESCRIBES AFTER 10 YEARS FROM REGISTRATION OF TITLES. — A scrutiny of the basic complaint which commenced this case, however, shows that petitioners based their claim for recovery on an alleged implied trust. Consequently, the action for reconveyance prescribes after ten years counted from the date adverse title to the property was asserted, that is, from the registration of the title.

4. REMEDIAL LAW; APPEAL; ISSUES NOT RAISED IN ANSWER OR TRIAL CANNOT BE RAISED FOR THE FIRST TIME ON APPEAL. — An issue which was neither averred in the complaint nor raised during the trial in the court below cannot be raised for the first time on appeal as it would be offensive to the basic rules of fair play, justice and due process.

5. ID.; ID.; FINDINGS OF LAND AUTHORITY ARE BINDING ON THE SUPREME COURT. — As the body empowered by law to approve applications to purchase and dispose of lots under its administration, the determination of the Land Authority in favor of private respondents is binding on this Court, there being a demonstrated absence of any grave abuse of discretion, collusion, fraud or clear error of law and fact.

D E C I S I O N

REGALADO, J.:

The usual conflicting claims of ownership culminated in this case involving a parcel of land in Tanawan, Bustos, Bulacan covered by Transfer Certificate of Title No. T-92071 in the name of private respondent Rodolfo Ramos. Said realty was formerly part of the public land constituting the Buenavista Estate which was under the administration of and subject to disposition by the Land Tenure Administration pursuant to Republic Act No. 1400 and, later, by the Land Authority under Republic Act No. 3844.

The evidence of record show that respondent Rodolfo Ramos filed with the Land Authority an application, dated January 5, 1965, for the purchase of the parcel of land in question 1 and was later compelled to file a complaint therein against another claimant in CLA Case No. 40, entitled "Rodolfo Ramos v. Gerardo Ramos." The case resulted in the adjudication to Rodolfo Ramos of an area of 24,793 square meters of the land applied for and an area of 1,810.05 square meters to Gerardo Ramos after the Acting Governor of said office, Remigio T. Eusebio, found both claimants qualified to purchase said portions. Consequently, a contract of sale was executed between private respondent Rodolfo Ramos and the Land Authority of February 5, 1968, 2 which became the basis for the issuance of the aforesaid Transfer Certificate of Title No. T-92071 on February 9, 1968. 3

Annotated as encumbrances on said certificate of title are the conditions that, except by hereditary succession, the land shall not be subdivided, sold or in any manner transferred or encumbered, without the prior written consent of the Governor of the Land Authority and only to qualified persons specified therein.

On January 19, 1978, without the prior consent of the Minister of Land Reform who had succeeded the Governor of the Land Authority, petitioner spouses filed a complaint docketed as Civil Case No. 845-B before the former Court of First Instance of Bulacan, Branch IV, praying for the cancellation of the name of respondent Rodolfo Ramos in the aforesaid certificate of title, to be replaced with petitioners’ names. Petitioners alleged that the property in question was titled in the name of respondent Rodolfo Ramos for convenience and in trust, petitioners claiming to be the beneficial owners thereof all along. They attempted to prove in the proceedings below that they acquired the property from a certain Patricio Cruz sometime in 1959, after which they had the same tenanted by one Ramon Samson in 1969. After the latter’s death, Pancracio Lopez supposedly took over as tenant from 1969 to 1976. Evidence was likewise adduced to prove that petitioner Felicidad Juan applied for the purchase of said property sometime in 1960 but her application was withdrawn allegedly because of some family problems. 4 Thereafter, petitioners were supposed to have requested their nephew, respondent Rodolfo Ramos, to have the title of the land issued in his name with petitioner Brigido Ramos pursuing the application with the former Land Tenure Administration. Petitioner further claim that respondent Rodolfo Ramos took over the tenancy rights to the land in 1976.

After considering all the evidence presented, the trial court rendered a decision 5 dismissing the complaint and the counterclaim, for insufficiency of evidence to warrant a declaration that petitioners are entitled to reconveyance of the property. Also, said the court below, there was failure to establish petitioners’ ownership over the land and to prove the alleged oral agreement between the parties to have the land titled in the name of private respondent Rodolfo Ramos. Furthermore, the court a quo observed that the approval of the application of said private respondent by the administrative body to which such function belongs may not be interfered with by the courts. 6

Finding no reversible error on the part of the trial court, the then Intermediate Appellate Court affirmed said decision on appeal. 7

The amply supported judgment of respondent court commends itself for approval. It being undisputed that the parcel of land in question originally formed part of the public land, with the present ownership thereof duly acquired by private respondents subject to the encumbrances annotated on the certificate of title thereto, as hereinbefore noted, petitioners have no basis to ask for reconveyance of the land to them. Also, as pointed out earlier, they claim to have acquired the rights to the land from one Patricio Cruz, but they utterly failed to show how the latter acquired said rights in the first place. Aside from their bare assertions, neither did petitioners adduce evidence of the transfer of such rights to them. Furthermore, they should be deemed to have acknowledged that the land belongs to the State when they filed an application for its purchase with the administrative office concerned. It would have been absurd for them to have applied for the purchase of property which they believed was theirs.

Despite such inconsistent postures, petitioners shift to a new tack, this time on a claim of ownership of the land by invoking Article 440 of the Civil Code on accession natural. We do not have to unduly dwell on this issue which was only raised by petitioners for the first time on appeal. An issue which was neither averred in the complaint nor raised during the trial in the court below cannot be raised for the first time on appeal as it would be offensive to the basic rules of fair play, justice and due process. 8 Besides, We cannot but note petitioners’ apocryphal submissions on the matter. They contend that the land in dispute, being supposedly a part of an abandoned river bed, is automatically owned by them as owners of the adjoining lot. Had the petitioners proceeded to read the succeeding provisions of the Civil Code, they would not have missed Article 461 thereof which provides that "river beds which are abandoned through the natural change in the course of the waters ipso facto belong to the owners of the land occupied by the new course" with the owners of the adjoining lots having the right to acquire them only after paying their value.

With the undisputable absence of any legal right to the land in favor of petitioners, the award to private respondents consequent to their purchase of said land should be given the respect it deserves. As the body empowered by law to approve applications to purchase and dispose of lots under its administration, the determination of the Land Authority in favor of private respondents is binding on this Court, there being a demonstrated absence of any grave abuse of discretion, collusion, fraud or clear error of law and fact. 9

Incidentally, We digress to clarify what appears to have been an oversight on the part of respondent court when it noted that the action herein had prescribed after four years from registration of the deed of sale in favor of private respondent Rodolfo Ramos. This was premised on the assumption that the action was for annulment of a contract on the ground of fraud. A scrutiny of the basic complaint 10 which commenced this case, however, shows that petitioners based their claim for recovery on an alleged implied trust. Consequently, the action for reconveyance prescribes after ten years counted from the date adverse title to the property was asserted, that is, from the registration of the title. 11 At any rate, such misperception would not affect the adjudication made by respondent court since, as already explained, there is no ownership of petitioners over the land on which they can anchor their fancied theory of an implied trust in their favor.

WHEREFORE, the decision of respondent court is AFFIRMED.

SO ORDERED.

Melencio-Herrera (Chairman), Paras, Padilla and Sarmiento, JJ., concur.

Endnotes:

1. Exhibits 2, 2-a and 3; Original Record, 219-220.

2. Exhibits 5; Ibid., 225-226.

3. Exhibit 6; Ibid., 227.

4. Original Record, 277.

5. Penned by Judge Natividad G. Dizon, Regional Trial Court, Branch XIII, Malolos, Bulacan.

6. Original Record, 278.

7. CA-G.R. CV. No. 07309; Coquia, J., ponente, Bellosillo and Aldecoa, JJ., concurring.

8. De la Santa v. Court of Appeals, Et Al., 140 SCRA 44 (1985); Dihiansan, Et. Al. v. Court of Appeals, Et Al., 153 SCRA 712 (1987); Dulos Realty & Development Corporation v. Court of Appeals, 157 SCRA 425 (1988).

9. Batangas Transportation Company v. Rivera, Et Al., 109 Phil. 175 (1960); Timbancaya v. Vicente, 9 SCRA 852 (1963); Lim v. Secretary of Agriculture and Natural Resources, 34 SCRA 751 (1970).

10. Original Record, 1-5.

11. Villagonzalo, Et. Al. v. Intermediate Appellate Court, Et Al., G.R. No. 71110, Nov. 22, 1988.

G.R. No. 78585 July 5, 1989 - JOSE ANTONIO MAPA v. JOKER ARROYO, ET AL.

2012-11-11T16:53:05+00:00

SECOND DIVISION

[G.R. No. 78585. July 5, 1989.]

JOSE ANTONIO MAPA, Petitioner, v. HON. JOKER ARROYO, in his Capacity as Executive Secretary, and LABRADOR DEVELOPMENT CORPORATION, Respondents.

Francisco T. Mamaug for Petitioner.

Emiliano S. Samson for Private Respondent.

SYLLABUS

1. ADMINISTRATIVE LAW; ADMINISTRATIVE AGENCY; FINDINGS THEREOF WITHIN ITS COMPETENCE WILL NOT BE DISTURBED BY THE COURTS. — It is jurisprudentially settled that absent a clear, manifest and grave abuse of discretion amounting to want of jurisdiction, the findings of the administrative agency on matters falling within its competence will not be disturbed by the courts. Specifically with respect to factual findings, they are accorded respect, if not finality, because of the special knowledge and expertise gained by these tribunals from handling the specific matters falling under their jurisdiction. Such factual findings may be disregarded only if they "are not supported by evidence; where the findings are vitiated by fraud, imposition or collusion; where the procedure which led to the factual findings is irregular; when palpable errors are committed; or when grave abuse of discretion, arbitrariness or capriciousness is manifest."cralaw virtua1aw library

2. CIVIL LAW; SALES; THE SUBDIVISION AND CONDOMINIUM BUYERS’ PROTECTIVE DECREE (P.D. 957); NO RETROACTIVE EFFECT. — Petitioner’s insistence on the applicability of Presidential Decree No. 957 must be rejected. Said decree was issued on July 12, 1976 long after the execution of the contracts involved. Obviously and necessarily, what subsequently were statutorily provided therein as obligations of the owner or developer could not have been intended by the parties to be a part of their contracts. No intention to give restrospective application to the provisions of said decree can be gathered from the language thereof. Section 20, in relation to Section 21, of the decree merely requires the owner or developer to construct the facilities, improvements, infrastructures and other forms of development but only such as are offered and indicated in the approved subdivision or condominium plans, brochures, prospectus, printed matters, letters or in any form of advertisements. Other than what are provided in Clause 20 of the contract, no further written commitment was made by the developer in this respect. To read into the contract the matters desired by petitioner would have the law impose additional obligations on the parties to a contract executed before that very law existed or was contemplated.

3. ID.; ID.; SUSPENSION OF PAYMENTS ON THE GROUND OF NON-DEVELOPMENT, NOT PROPER IN CASE AT BAR. — As the OAALA noted, petitioner "stopped payments of his monthly obligations as early as December, 1976, which is a mere five months after the effectivity of P.D. No. 957 or about a year after the execution of the contracts. This means that respondent still has 1 and 1/2 years to comply with its legal obligation to develop the subdivision under said P.D. and two years to do so under the agreement, hence, it was improper for complainant to have suspended payments in December, 1976 on the ground of non-development since the period allowed for respondent’s obligation to undertake such development has not yet expired."cralaw virtua1aw library

4. STATUTORY CONSTRUCTION; DOCTRINE OF LAST ANTECEDENT; WORD "AND", A CONJUNCTION TO DENOTE JOINDER OR UNION. — While this subserves his purpose, such bifurcation, whereby the supposed adjectival phrase is set apart from the antecedent words, is illogical and erroneous. The complete and applicable rule is ad proximum antecedens fiat relatio nisi impediatur sentencia. Relative words refer to the nearest antecedent, unless it be prevented by the context. In the present case, the employment of the word "and" between "facilities, improvements, infrastructures" and "other forms of development," far from supporting petitioner’s theory, enervates it instead since it is basic in legal hermeneutics that "and" is not meant to separate words but is a conjunction used to denote a joinder or union.

D E C I S I O N

REGALADO, J.:

We are called upon once again, in this special civil action for certiorari, for a pronouncement as to whether or not there has been grave abuse of discretion amounting to lack or excess of jurisdiction on the part of the executive branch of Government, particularly in the adjudication of a controversy originally commenced in one of its regulatory agencies.

Petitioner herein seeks the reversal of the decision of the Office of the President, rendered by the Deputy Executive Secretary on April 24, 1987, 1 which dismissed his appeal from the resolution of the Commission Proper, Human Settlements Regulatory Commission (HSRC, for short), promulgated on January 10, 1986 and affirming the decision of July 3, 1985 of the Office of Adjudication and Legal Affairs (OAALA, for brevity) of HSRC. Petitioner avers that public respondent "gravely transcended the sphere of his discretion" in finding that Presidential Decree No. 957 is inapplicable to the contracts to sell involved in this case and in consequently dismissing the same. 2

The established facts on which the assailed decision is based are set out therein as follows:jgc:chanrobles.com.ph

"Records disclose that, on September 18, 1975, appellant Jose Antonio Mapa and appellee Labrador Development Corporation (Labrador, for short), owner/developer of the Barangay Hills Subdivision in Antipolo, Rizal, entered into two contracts to sell over lots 12 and 13 of said subdivision. On different months in 1976, they again entered into two similar contracts involving lots 15 and 16 in the same subdivision. Under said contracts, Mapa undertook to make a total monthly installment of P2,137.54 over a period of ten (10) years. Mapa, however, defaulted in the payment thereof starting December 1976, prompting Labrador to send to the former a demand letter, dated May 5, 1977, giving him until May 18, 1977, within which to settle his unpaid installments for the 4 lots amounting to P15,411.66, with a warning that non-payment thereof will result in the cancellation of the four (4) contracts. Despite receipt of said letter on May 6, 1977, Mapa failed to take any action thereon. Labrador subsequently wrote Mapa another letter, dated June 15, 1982, which the latter received on June 21, 1982, reminding him of his total arrears amounting to P180,065.27 and demanding payment within 5 days from receipt thereof, but which letter Mapa likewise ignored. Thus, on August 16, 1982, Labrador sent Mapa a notarial cancellation of the four (4) contracts to sell, which Mapa received on August 20, 1982. On September 10, 1982, however, Mapa’s counsel sent Labrador a letter calling Labrador’s attention to, and demanding its compliance with, Clause 20 of the four (4) contracts to sell which relates to Labrador’s obligation to provide, among others, lighting/water facilities to subdivision lot buyers.

"On September 10, 1982, Labrador issued a certification ‘holding the implementation of the letter dated August 16, 1982 (re notarial cancellation) pending the complete development of road lot cul de sac within the properties of Mapa at Barangay Hills Subdivision.’ Thereafter, on October 25, 1982, Labrador sent Mapa a letter informing him ‘that the construction of road, sidewalk, curbs and gutters adjacent to Block 11 Barangay Hills Subdivision are already completed’ and further requesting Mapa to ‘come to our office within five (5) days upon receipt of this letter to settle your account.’

"On December 10, 1982, Mapa tendered payment by means of a check in the amount of P2,187.54, but Labrador refused to accept payment for the reason that it was agreed ‘that after the development of the cul de sac, he (complainant) will pay in full the total amount due,’ which Labrador computed at P260,138.61. On December 14, 1982, Mapa wrote Labrador claiming that ‘you have not complied with the requirements for water and light facilities in lots 12, 13, 15 & 16 Block 2 of Barangay Hills Subdivision.’ The following day, Mapa filed a complaint against Labrador for the latter’s neglect to put 1) a water system that meets the minimum standard as specified by HSRC, and 2) electrical power supply. By way of relief, Mapa requested the HSRC to direct Labrador to provide the facilities aforementioned, and to issue a cease and desist order enjoining Labrador from cancelling the contracts to sell.

"After due hearing/investigation, which included an on-site inspection of the subdivision, OAALA issued its decision of July 3, 1985, dismissing the complaint and declaring that ‘after the lapse of 5 years from complainant’s default respondent had every right to rescind the contract pursuant to Clause 7 thereof . . .’’

"Per its resolution of January 10, 1986, the Commission Proper, HSRC, affirmed the aforesaid OAALA decision." 3

It was petitioner’s adamant submission in the administrative proceedings that the provisions of Presidential Decree No. 957 4 and implementing rules form part of the contracts to sell executed by him and respondent corporation, hence the obligations imposed therein had to be complied with by Labrador within the period provided. Since, according to petitioner, Labrador failed to perform the aforementioned obligations, it is precluded from rescinding the subject contracts to sell since petitioner consequently did not incur in delay on his part.

Such intransigent position of petitioner has not changed in the petition at bar and unyielding reliance is placed on the provisions of Presidential Decree No. 957 and its implementing rules. The specific provisions of the Decree which are persistently relied upon read:jgc:chanrobles.com.ph

"SEC. 20. Time of Completion. — Every owner or developer shall construct and provide the facilities, improvements, infrastructures and other forms of development, including water supply and lighting facilities, which are offered and indicated in the approved subdivision or condominium plans, brochures, prospectus, printed matters, letters or in any form of advertisements, within one year from the date of the issuance of the license for the subdivision or condominium project or such other period of time as may be fixed by the Authority.

"SEC. 21. Sales Prior to Decree. — In cases of subdivision lots or condominium units sold or disposed of prior to the effectivity of this Decree, it shall be incumbent upon the owner or developer of the subdivision or condominium project to complete compliance with his or its obligations as provided in the preceding section within two years from the date of this Decree unless otherwise extended by the Authority or unless an adequate performance bond is filed in accordance with Section 6 hereof.

"Failure of the owner or developer to comply with the obligations under this and the preceding provisions shall constitute a violation punishable under Sections 38 and 39 of this Decree."cralaw virtua1aw library

Rule V of the implementing rules, on the other hand, requires two (2) sources of electric power, two (2) deepwell and pump sets with a specified capacity and two standard fire hose flows with a capacity of 175 gallons per minute. 5

The provision, in said contracts to sell which, according to petitioner, includes and incorporates the aforequoted statutory provisions, is Clause 20 of said contracts which provides:jgc:chanrobles.com.ph

"Clause 20 — SUBDIVISION DEVELOPMENT — To insure the physical development of the subdivision, the SELLER hereby obliges itself to provide the individual lot buyer with the following:chanrob1es virtual 1aw library

a) PAVED ROADS

b) UNDERGROUND DRAINAGE

c) CONCRETE CURBS AND GUTTERS

d) WATER SYSTEM

e) PARK AND OPEN SPACE.

"These improvements shall apply only to the portions of the subdivision which are for sale or have been sold.

"All improvements except those requiring the services of a public utility company or the government shall be completed within a period of three (3) years from date of this contract. Failure by the SELLER to reasonably comply with the above schedule shall permit the BUYER/S to suspend his monthly installments without any penalties or interest charges until such time that these improvements shall have been made as scheduled. 6

As recently reiterated, it is jurisprudentially settled that absent a clear, manifest and grave abuse of discretion amounting to want of jurisdiction, the findings of the administrative agency on matters falling within its competence will not be disturbed by the courts. 7 Specifically with respect to factual findings, they are accorded respect, if not finality, because of the special knowledge and expertise gained by these tribunals from handling the specific matters falling under their jurisdiction. Such factual findings may be disregarded only if they "are not supported by evidence; where the findings are vitiated by fraud, imposition or collusion; where the procedure which led to the factual findings is irregular; when palpable errors are committed; or when grave abuse of discretion, arbitrariness or capriciousness is manifest." 8

A careful scrutiny of the records of the instant case reveals that the circumstances thereof do not fall under the aforesaid excepted cases, with the findings duly supported by the evidence.

Petitioner’s insistence on the applicability of Presidential Decree No. 957 must be rejected. Said decree was issued on July 12, 1976 long after the execution of the contracts involved. Obviously and necessarily, what subsequently were statutorily provided therein as obligations of the owner or developer could not have been intended by the parties to be a part of their contracts. No intention to give restrospective application to the provisions of said decree can be gathered from the language thereof. Section 20, in relation to Section 21, of the decree merely requires the owner or developer to construct the facilities, improvements, infrastructures and other forms of development but only such as are offered and indicated in the approved subdivision or condominium plans, brochures, prospectus, printed matters, letters or in any form of advertisements. Other than what are provided in Clause 20 of the contract, no further written commitment was made by the developer in this respect. To read into the contract the matters desired by petitioner would have the law impose additional obligations on the parties to a contract executed before that very law existed or was contemplated.

We further reject petitioner’s strained and tenuous application of the so-called doctrine of last antecedent in the interpretation of Section 20 and, correlatively, of Section 21. He would thereby have the enumeration of "facilities, improvements, infrastructures and other forms of development" interpreted to mean that the demonstrative phrase "which are offered and indicated in the approved subdivision plans, etc." refer only to "other forms of development" and not to "facilities, improvements and infrastructures." While this subserves his purpose, such bifurcation, whereby the supposed adjectival phrase is set apart from the antecedent words, is illogical and erroneous. The complete and applicable rule is ad proximum antecedens fiat relatio nisi impediatur sentencia. 9 Relative words refer to the nearest antecedent, unless it be prevented by the context. In the present case, the employment of the word "and" between "facilities, improvements, infrastructures" and "other forms of development," far from supporting petitioner’s theory, enervates it instead since it is basic in legal hermeneutics that "and" is not meant to separate words but is a conjunction used to denote a joinder or union.

Thus, if ever there is any valid ground to suspend the monthly installments due from petitioner, it would only be based on non-performance of the obligations provided in Clause 20 of the contract, particularly the alleged non-construction of the cul-de-sac. But, even this is unavailing and is obviously being used only to justify petitioner’s default. The on-site inspection of the subdivision conducted by the OAALA and its subsequent report reveal that Labrador substantially complied with its obligation. 10

Furthermore, the initial non-construction of the cul-de-sac, as private respondent Labrador explained, was because petitioner Mapa requested the suspension of its construction since his intention was to purchase the adjoining lots and thereafter enclose the same. 11 If these were not true, petitioner would have invoked that supposed default in the first instance. As the OAALA noted, petitioner "stopped payments of his monthly obligations as early as December, 1976, which is a mere five months after the effectivity of P.D. No. 957 or about a year after the execution of the contracts. This means that respondent still has 1 and 1/2 years to comply with its legal obligation to develop the subdivision under said P.D. and two years to do so under the agreement, hence, it was improper for complainant to have suspended payments in December, 1976 on the ground of non-development since the period allowed for respondent’s obligation to undertake such development has not yet expired." 12

ON THE FOREGOING CONSIDERATIONS, the petition should be, as it is hereby DISMISSED.

SO ORDERED.

Melencio-Herrera (Chairman), Paras, Padilla and Sarmiento, JJ., concur.

Endnotes:

1. Annex K. Petition; Rollo, 35-40.

2. Rollo, 16-17.

3. Ibid., 35-36.

4. The Subdivision and Condominium Buyers’ Protective Decree, effective July 12, 1976.

5. Rollo, 208.

6. Annex A, Petition; Rollo, 18.

7. Sagun, Et. Al. v. People’s Homesite and Housing Corporation, G.R. No. 44738, June 22, 1988.

8. Alcuaz, Et. Al. v. Philippine School of Business Administration, etc. Et. Al., 161 SCRA 7 (1988), citing Ateneo de Manila University v. Court of Appeals, 145 SCRA 106 (1986).

9. See Black’s Law Dictionary, 4th Ed., 57, citing Brown v. Brown, Del., 3 Terry 157, 29 A2d 149, 153.

10. Rollo, 83.

11. Ibid., 256; TSN, Jan. 24, 1984, 7; TSN, Feb. 6, 1984, 18-19.

12. Ibid., 84-85.

G.R. No. 80141 July 5, 1989 - SAN MIGUEL CORPORATION EMPLOYEES UNION, ET AL. v. PURA FERRER CALLEJA, ET AL.

2012-11-11T16:53:05+00:00

SECOND DIVISION

[G.R. No. 80141. July 5, 1989.]

SAN MIGUEL CORPORATION EMPLOYEES UNION — PTGWO, RICARDO ANGELES, ROBERTO AZANES, ROLANDO BINCE, DANILO CRUZ, REYNALDO DECENA, RODOLFO DESTURA, IRENEO GALLABO, TOMAS GALVEZ, RAYMUNDO HIPOLITO, JR., TEODORO ISLETA, ROMEO SANTOS, DECLARITO TORRES, DIONISIO VALERIO, ROQUE YAP, and JOHN ZAFE in their capacities as UNION OFFICERS, Petitioners, v. HONORABLE PURA FERRER CALLEJA, DIRECTOR — BUREAU OF LABOR RELATIONS-DOLE; NAPOLEON FERNANDO IN HIS CAPACITY AS MED-ARBITER, NATIONAL CAPITAL REGION, MANILA, Respondents.

Raymundo Hipolito III, for Petitioners.

Romeo C. Lagman for intervenors.

SYLLABUS

1. REMEDIAL LAW; CONSOLIDATION OF CASES; FAILURE TO PRAY FOR CONSOLIDATION OF BOTH PETITIONS IN CASE AT BAR, A MOCKERY OF JUDICIAL PROCEEDINGS. — Petitioners had filed an election protest with the Med-Arbiter. Without waiting for its resolution, petitioners filed the instant petition for certiorari (G.R. No. 80141) and in their petition they did not mention the pendency of the election protest. After the said election protest was dismissed for lack of merit, the petitioners elevated the same to this Court by way of another petition for certiorari (G.R. No. 82183). Although both petitions seek the nullification of the election held on October 5, 1987, petitioners did not pray for their consolidation. This mockery of judicial proceedings should not be countenanced.

2. ID.; PROVISIONAL REMEDIES; INJUNCTION; DOES NOT LIE WHERE THE ACT TO BE ESTABLISHED HAS ALREADY BEEN CONSUMMATED. — In its resolution dated November 6, 1987, public respondent already declared and certified the candidates in said election garnering the highest number of votes as the duly elected officers, committee members and board of directors of SMCEU-PTGWO. This is the very act of public respondent that petitioners seek to be restrained. Since the act has already been consummated, injunction or restraining order does not lie. Moreover, it does not appear that petitioners are entitled to the main relief sought, so there is no legal justification for a restraining order or preliminary injunction.

3. ID.; SPECIAL CIVIL ACTION; CONTEMPT; PROCLAMATION OF WINNERS BEFORE ISSUANCE OF RESTRAINING ORDER NOT A CONTUMACIOUS ACT. — The records show that on December 9, 1987, this Court issued a temporary restraining order enjoining "respondents from proclaiming the alleged winners in the union local election held last October 5, 1987 particularly that of Daniel Borbon as new president of the union." But the winners in said election were already proclaimed and sworn into office on November 11, 1987 by virtue of the order dated November 6, 1987 of the Med-Arbiter in the election protest filed by petitioners. Thus, the act intended to be restrained was already" fait accompli." Accordingly, said public respondents have not violated any order of this Court which would make them guilty of contempt.

4. LABOR CODE; COLLECTIVE BARGAINING; ELECTIONS; PETITIONERS ESTOPPED FROM CLAIMING PETITION DID NOT MEET REQUIREMENT. — Petitioners contend that public respondents acted with grave abuse of discretion amounting to lack of jurisdiction when they set the local election on October 5, 1987. In support of their allegation, they state that there was no petition for the holding of election of union officers meeting the requirements of Book V, Rule VIII, Sections 1, 2 and 3 of the Implementing Rules and Regulations of the Labor Code and that they were deprived of due process of law. The above contentions are without merit. Assuming that the requirements as delineated in said Sections 1, 2 and 3 of the Implementing Rules and Regulations of the Labor Code apply to election of union officers, petitioners are in estoppel to invoke the same. They filed the petition praying for the conduct of an election to select the union officers. By filing the petition, they necessarily affirmed that the petition was sufficient in form and substance. They therefore cannot now claim that the petition did not meet legal requirements.

5. CONSTITUTIONAL LAW; BILL OF RIGHTS; DUE PROCESS; NOT VIOLATED BY DENIAL OF MOTION FOR RECONSIDERATION. — Anent their claim that they were denied due process, records show that they were given their day in court. Their motion for Reconsideration/Appeal dated September 28, 1978 was duly considered by public Respondent. The mere fact that their motion was denied does not mean that they were denied due process of law.

D E C I S I O N

PARAS, J.:

The instant petition seeks to set aside the decision/orders of public respondent calling for an election of the officers of petitioner San Miguel Corporation Employees Union on October 5, 1987; to nullify the election if held and restrain the enforcement of its results; and to hold public respondents in contempt of this Court.

The controversy originated with a petition filed on December 2, 1984 by San Miguel Corporation Employees Union with the Department of Labor and Employment for the election of its officers. The last election conducted in the union was in December 1981 when Raymundo Hipolito, Jr. was elected president of the union for a term of three (3) years.

After the required pre-election conferences, the election was scheduled on December 11, 1984. However, a restraining order dated December 10, 1984, issued by the National Capital Region, Metro Manila, (NCR for brevity) suspended the election. Nevertheless the group of Ricardo Bandal, one of the contending parties proceeded with the election and won. This was questioned by Raymundo Hipolito as the election was conducted in violation of the restraining order. The NCR sustained Hipolito and the Bandal group appealed to the Bureau of Labor Relations (BLR for brevity). On July 22,1985, the BLR dismissed the appeal and ordered the holding of another election. This order became final and so the parties were again summoned for pre-election conferences. Subsequently, another date for the election was set, this time on November 25, 1985. Thereafter, however, protracted legal debates delayed the implementation of the BLR order for the holding of election. Hipolito raised the issue that the unit should be described as "SMCEU — PTGWO" instead of SMCEU only. After his belated motion for the reconsideration of the July 22, 1985 order of the BLR which was denied, he came to this Court by way of a petition for certiorari with prayer for the issuance of a restraining order to enjoin the holding of the election which was rescheduled anew to December 10, 1985. In the petition he also prayed that the acronym PTGWO be added to SMCEU.

This Court restrained the holding of the scheduled election and allowed the inclusion of PTGWO as suffix to SMCEU.

From this Court, the case was remanded to the NCR on July 7, 1985. There being no further legal impediment to the holding of the elections, the NCR again called the parties for the continuance of the pre-election conference.

Apparently, having a change of mind due perhaps to considerations of union politics, Hipolito submitted to the Med-Arbiter two (2) motions dated July 25, 1986 and August 19, 1986, praying for the dismissal of the petition which the petitioners filed with the Department of Labor and Employment on December 2, 1984. He insisted that in view of the on-going collective bargaining negotiations between the union and San Miguel Corporation, it would be in the interest of everybody that said negotiations be concluded first before holding the election.

The NCR accommodated Hipolito repeatedly. But after the signing of the Collective Bargaining Agreement, another pre-election conference was called on July 2, 1987. Finally, on August 11, 1987, the Med-Arbiter issued an Order the dispositive portion of which reads:jgc:chanrobles.com.ph

"WHEREFORE, in the light of the foregoing, the election of officers of the San Miguel Corporation Employees Union-PTGWO is hereby set on 15 September 1987 under the supervision of National Capital Region (NCR). Let a copy of this Order given the widest dissemination to the members of the union and all union members interested to run for office are given until August 31, 1987 to submit their respective certificates of candidacy.

"SO ORDERED." (P. 127, Rollo)

Petitioners filed a motion for the reconsideration of the aforesaid Order on August 27, 1987. Subsequently, however, they filed their Manifestation requesting that they would participate in the election provided that the date of said election which is on September 15, 1987 be moved to another date to be fixed by the parties, or failing which, by the assigned Representation Officer. In the same manifestation, they signified that if their request is granted, their motion for reconsideration can be considered moot and academic.

On September 4, 1987, the Med-Arbiter issued his now assailed Order reading as follows:jgc:chanrobles.com.ph

"Acting on the Manifestation with Motion to re-schedule election of officers of SMCEU-PTGWO filed by SMCEU-PTGWO officers led by Raymundo Hipolito, Jr. on September 4, 1987 to be well taken and is in consonance with the attainment of Industrial peace in the company, the Order of this Office dated August 11, 1987 in so far as fixing of the date of the election of union officers on September 15, 1987 is hereby ordered set aside. The new date of the election may be agreed upon by the parties during the pre-election conference but, should the parties fail to agree on the date of the election, the Representation Officer is hereby directed to fix the date of the said election.

"Further, pursuant to the abovementioned Manifestation, filed on September 4, 1987, the petitioners’ Motion for Reconsideration dated August 26, 1987 is hereby ordered denied for being moot and academic.

"SO ORDERED." (p. 24, Rollo)

So pre-election conferences were again held. On September 22, 1987, the Representation Officer pursuant to the aforesaid Order of September 4, 1987 fixed the date of the election for October 5, 1987.

In a last effort to again delay the election, petitioners filed a motion for reconsideration. The same was denied.

Hence, this petition for certiorari filed with this Court on October 17, 1987. Sometime in November 1987, petitioners filed a Supplemental Petition alleging that the election had been held under the supervision of the Department of Labor (after almost three (3) years from the filing of the petition for the conduct of the election and after almost six (6) years from the last election of officers of petitioner union.)

All the individual petitioners herein filed their certificates of candidacy and actually participated in the election of October 5, 1987. Petitioner Raymundo Hipolito, Jr. lost the presidency to intervenor Daniel Borbon II.

Before filing the instant petition for certiorari, petitioners had filed likewise an election protest in the original case which was dismissed for lack of merit on November 6, 1987. This order was appealed (petition for certiorari) by petitioners to this Court under G.R. No. 82183.

On May 4, 1988 this Court (First Division) denied the said petition for lack of merit. The said Resolution reads:jgc:chanrobles.com.ph

"After deliberating on the petition and its annexes we find that the respondent Director of the Bureau of Labor Relations did not commit a grave abuse of discretion nor any reversible error in affirming the order of the Med-Arbiter dismissing petitioner’s protest against the election of respondent Daniel Borbon as president of the San Miguel Corporation Employees Union-PTGWO, in the local election on October 5, 1987, as it appears that the petitioner himself, as the president of the SMCEU-PTGWO filed the petition for election of union officers on December 2, 1984 because the last union election was held in December 1981 and the 3-year term of office of the incumbent union officers as provided in Article 242(c) of the Labor Code, was about to expire; that petitioner was estopped from withdrawing his said petition because the order directing the conduct of the election had already been implemented and petitioner himself participated as a candidate for president in the election; that 261 union members led by Borbon filed a petition to hold the election and demand an accounting of union funds; that petitioner’s petition to disqualify Daniel Borbon from running for office in the union had already been resolved in BLR Case No. 10-354-87 (NCR OD-M-5-421-87) where Borbon was declared a rank and file employee, hence, qualified to join, form or assist in the formation of a labor organization; and, finally, petitioner who lost in the election, failed to present evidence of fraud in the conduct of the election. Respondent Calleja’s resolution dated February 18, 1988 (Annex A) dismissing petitioner’s appeal from the Med-Arbiter’s order of November 6, 1987 (Annex B) is correct." (pp. 75-76, Rollo of G.R. No. 82183)

The petitioners in the said petition (who are the same petitioners in this case) moved to reconsider the dismissal. The same was denied in the Resolution of the First Division dated June 15, 1988 which reads:jgc:chanrobles.com.ph

"The motion for reconsideration mentions for the first time the pendency before the Second Division of this Court of G.R. No. 80141 which, in the petitioner’s own words, involves ‘the same subject matter, issues and parties.’ In both cases, the petitioner prays this Court `to cancel and nullify the local election held on October 5, 1987’ and to set aside the proclamation of Daniel Borbon as the duly elected president of the SMCEU-PTGWO. Petitioner now asks that Our resolution of May 4, 1988 dismissing this case be set aside and/or its implementation be deferred until G.R. No. 80141 shall have been resolved by the Second Division.

"Since the petitioners in G.R. No. 80141, (are the same petitioners here) We have here a clear case of trifling with proceedings in this Court. Petitioner had probably hoped to obtain from the First Division of the Court the reliefs which up to this time they have failed to obtain from the Second Division where their earlier petition (G.R. No. 80141) has been pending. Only when We adversely disposed of their second petition did they reveal the pendency of the first. Since they themselves set in motion the processes of this Court by filing this case, they are estopped to ask for the suspension of these proceedings on account of the pendency of their earlier petition." (pp. 96-97, Rollo of G.R. No. 82183)

On June 27, 1988, intervenors filed a motion to dismiss the instant petition in view of the dismissal of G.R. No. 82183.

Indeed, this case is a clear instance of trifling with judicial and quasi-judicial proceedings. Petitioners filed a petition for election alleging that there was basis for calling such election. Then, they turned around and claimed their petition was not proper; that the election that was held, in which they lost, be nullified.

Petitioners had filed an election protest with the Med-Arbiter. Without waiting for its resolution, petitioners filed the instant petition for certiorari (G.R. No. 80141) and in their petition they did not mention the pendency of the election protest.

After the said election protest was dismissed for lack of merit, the petitioners elevated the same to this Court by way of another petition for certiorari (G.R. No. 82183). Although both petitions seek the nullification of the election held on October 5, 1987, petitioners did not pray for their consolidation. This mockery of judicial proceedings should not be countenanced.

In its resolution dated November 6, 1987, public respondent already declared and certified the candidates in said election garnering the highest number of votes as the duly elected officers, committee members and board of directors of SMCEU-PTGWO. This is the very act of public respondent that petitioners seek to be restrained. Since the act has already been consummated, injunction or restraining order does not lie. Moreover, it does not appear that petitioners are entitled to the main relief sought, so there is no legal justification for a restraining order or preliminary injunction.

Petitioners contend that public respondents acted with grave abuse of discretion amounting to lack of jurisdiction when they set the local election on October 5, 1987. In support of their allegation, they state that there was no petition for the holding of election of union officers meeting the requirements of Book V, Rule VIII, Sections 1, 2 and 3 of the Implementing Rules and Regulations of the Labor Code and that they were deprived of due process of law.

The above contentions are without merit. Assuming that the requirements as delineated in said Sections 1, 2 and 3 of the Implementing Rules and Regulations of the Labor Code apply to election of union officers, petitioners are in estoppel to invoke the same. They filed the petition praying for the conduct of an election to select the union officers. By filing the petition, they necessarily affirmed that the petition was sufficient in form and substance. They therefore cannot now claim that the petition did not meet legal requirements.

Anent their claim that they were denied due process, records show that they were given their day in court. Their motion for Reconsideration/Appeal dated September 28, 1978 was duly considered by public Respondent. The mere fact that their motion was denied does not mean that they were denied due process of law.

In their Supplemental Petition, petitioners pray that respondent Pura Ferrer-Calleja and Med-Arbiter Fernando be held in contempt of court for proceeding to take action on the petition for election.

The records show that on December 9, 1987, this Court issued a temporary restraining order enjoining "respondents from proclaiming the alleged winners in the union local election held last October 5, 1987 particularly that of Daniel Borbon as new president of the union." (Resolution dated December 9, 1987, p. 203, Rollo) But the winners in said election were already proclaimed and sworn into office on November 11, 1987 by virtue of the order dated November 6, 1987 of the Med-Arbiter in the election protest filed by petitioners. Thus, the act intended to be restrained was already" fait accompli." Accordingly, said public respondents have not violated any order of this Court which would make them guilty of contempt.

WHEREFORE, for lack of merit, the instant petition is DISMISSED.

SO ORDERED.

Melencio-Herrera (Chairman) and Regalado, JJ., concur.

Padilla, J., (No part in the deliberations.).

Regalado, J., No part, former Director of S.M.C.

G.R. No. 80500 July 5, 1989 - ROBUSTA AGRO MARINE PRODUCTS, INC., ET AL. v. BALTAZAR GOROMBALEM, ET AL.

2012-11-11T16:53:05+00:00

FIRST DIVISION

[G.R. No. 80500. July 5, 1989.]

ROBUSTA AGRO MARINE PRODUCTS, INC. and MARIO SANTOS, JR., Petitioners, v. BALTAZAR GOROMBALEM, NATIONAL LABOR RELATIONS COMMISSION (NLRC), Second Division, DEPARTMENT OF LABOR AND EMPLOYMENT, Manila, and VICENTE MANZANO, Labor Arbiter, NLRC, Arbitration Branch, Region IV, Respondents.

Joaquin G. Chung, Jr. Law Offices for Petitioner.

Emerito Salva for Private Respondent.

SYLLABUS

1. POLITICAL LAW; ADMINISTRATIVE DUE PROCESS; DEFINED. — The simple meaning of procedural due process is that a party to a case must be given sufficient opportunity to be heard. Its very essence is to allow all parties opportunity to present evidence.

2. ID.; ID.; RIGHT TO HEARING; ESSENTIAL. — In administrative cases, the requirement of due process is the right to a hearing, including the right of the party interested or affected to present his own case and submit evidence to support his allegation.

3. LABOR AND LOCAL LEGISLATION; LABOR CODE; NATIONAL LABOR RELATIONS COMMISSION; TECHNICAL RULES; NOT BINDING. — In proceedings before the NLRC or a labor arbiter, technical rules of procedure and evidence are not binding. Even under the revised rules of the NLRC an expeditious procedure is provided for. Simplification of procedure, without regard to technicalities of law or procedure and without sacrificing the fundamental requisites of due process, is mandated to insure a speedy administration of social justice. This Court construed Article 221 of the Labor Code as to allow the NLRC or a labor arbiter to decide a case on the basis of position papers and other documents submitted without resorting to technical rules of evidence as observed in regular courts of justice.

4. POLITICAL LAW; ADMINISTRATIVE DUE PROCESS; RESOLUTION OF LABOR CASES ON THE BASIS OF POSITION PAPERS AND WITHOUT HEARING; NOT A DENIAL OF DUE PROCESS; REASON. — In the present case, it is crystal clear from the record, that petitioner was given several opportunities to present evidence in its favor, but it failed to do so. At no time did petitioner ever ask that there be a trial on the merits. All that it submitted was its position paper. It was within the competence of the labor arbiter to determine if there was a need for a hearing. In this case, the labor arbiter did not deem it necessary to conduct a hearing. The petitioner was never denied administrative due process.

5. ID.; ID.; TERMINATION WITHOUT GIVING THE EMPLOYEE A CHANCE TO PRESENT HIS SIDE, A DENIAL OF THE RIGHT. — If truly the private respondent committed an act which was a lawful cause or justification for his dismissal, petitioner should have given him the opportunity to explain or present his side. There should not be an outright termination of the services of private respondent without affording him due process. Otherwise, it will be a violation of private respondent’s right to security of tenure.

D E C I S I O N

GANCAYCO, J.:

The principal issue in this case is whether or not administrative due process was denied the petitioners when the respondent labor arbiter rendered a decision based on position papers filed by the parties without conducting a trial.

The petition is erroneously captioned "Petition for Review on Certiorari." This error notwithstanding, and in the interest of justice, the Court resolved to treat the instant petition as a special civil action for certiorari on account of the jurisdictional issue raised herein. 1

The undisputed facts are as follows:chanrob1es virtual 1aw library

On June 14, 1985, private respondent Baltazar C. Gorombalem filed a complaint with the Regional Arbitration Branch of the National Labor Relations Commission (NLRC) against petitioner Robusta Agro Marine Products, Inc., (Robusta for short), for unfair labor practice, illegal suspension, non-payment of overtime pay and premium pay for holiday and rest day, violation of various decrees on minimum wage and allowances, unpaid wages or commission, night shift differential pay, and separation pay. The case was docketed as NLRC Case No. RB IV-6-1639-85.

Initial hearing was scheduled for June 27, 1985. Notice was sent by registered mail to Robusta. As there was no appearance for both Robusta and Gorombalem, the hearing was reset. Robusta attended the July 1, 1985 hearing which was again reset for July 9 inasmuch as Gorombalem failed to appear. On July 9 Robusta failed to appear so the hearing was reset for July 19. Both parties were represented during the July 19 hearing. Nevertheless, the hearing was reset again to July 21 for possible amicable settlement. On July 26, 1985, both parties were again represented. However, upon their agreement, the hearing was reset to August 8, 1985.

In the August hearing, the parties failed to amicably settle the case. Gorombalem filed his sinumpaang salaysay (sworn statement), with a copy furnished to Robusta. Robusta was directed by the labor arbiter to file its answer within 10 days.

On August 20, 1985, Robusta filed a Manifestation and Urgent Motion for Extension of Time To File Counter Affidavit Ex-Parte, requesting that it be given fifteen (15) days from said date within which to file its counter affidavit. The labor arbiter granted the motion.

On September 4, 1985, Robusta filed a Second Motion For Extension of Further Time To File Position Paper/Counter Affidavit, requesting another extension of fifteen days from September 4, 1985. The labor arbiter granted the same.

On September 18, 1985, Robusta filed a third Motion For Extension of Further Time To File Counter Affidavit, ex-parte requesting a period of fifteen (15) days from September 19, 1985 within which to file evidence.

On October 4, 1985, Robusta filed an Addendum to Motion For Extension of Further Time to file Counter Affidavit, ex-parte asking for another fifteen (15) days from October 4, 1985. This time, the labor arbiter in a notice sent on October 4, 1985, denied the motion for a fourth extension of time, but gave Robusta three days (3) from receipt of notice within which to file its position paper and evidence, with a warning that after the expiration of the three-day period, the case would be decided on the basis of the documents submitted and that no further motion for reconsideration shall be entertained.

Robusta received the notice on October 7, 1985, and it forthwith submitted its position paper on October 10, 1985 refuting the Sinumpaang Salaysay of Gorombalem and stating therein that the submission is subject to Robusta’s right to finally submit a more extensive supplemental position paper and counter-affidavit of witnesses.

The Sinumpaang Salaysay submitted by Gorombalem alleges that from June 15, 1981 to August 30, 1981, he worked as a fishpond guard with Robusta in the latter’s fishpond in Barangay Subay, Carmona Rizal with a salary of P300.00 a month plus a ration of two gantas of rice every week. As fishpond guard, he worked from 6:00 p.m. to 6:00 a.m., Monday to Sunday. He had no rest day. He was not paid overtime pay, holiday pay, night shift differential pay and cost of living allowance. From September 1981 to December 31, 1982, he did not report for work. On January 1, 1983, he returned to work and Robusta assigned him again as fishpond guard with a monthly salary of P400.00 and a ration of two gantas of rice every week. His tour of duty was from 6:00 p.m. to 6:00 a.m. Again, he had no rest day, and Robusta did not pay him overtime pay, holiday pay, night shift differential pay, 13th month pay, and cost of living allowance.

On January 1, 1985, Gorombalem was given an additional salary of P50.00 a month, but his ration of two gantas of rice per week was reduced to one ganta of rice per week.

On June 6, 1985, private respondent inquired from Honesto Subida, Robusta’s general manager, about the reduction of his ration. Subida got angry and told him that he did not like to see his (Gorombalem’s) face anymore. Subida also prohibited him from reporting for work. Thus, Gorombalem no longer reported for work.

In its position paper Robusta, denied that Gorombalem was illegally dismissed. It claimed that Gorombalem stopped working voluntarily because he was afraid of retaliation from a victim who charged him with frustrated homicide before the Court of First Instance of Rizal in a case docketed as Criminal Case No. 4457 and filed on September 1, 1981, and for which a warrant of arrest was issued against him on September 3, 1981. Robusta maintained that Gorombalem stopped working from September 1, 1981 and that he returned to work only on January 1, 1983. Robusta also invoked prescription against the claim for benefits from June 15, 1981 to August 30, 1981 and January 1, 1983 to January 1984.

The labor arbiter rendered a decision on October 24, 1985, ordering Robusta to reinstate Gorombalem and to pay him backwages, overtime pay, night shift differential pay, premium pay for holidays and premium pay for rest days in the total amount of P37,393.72. 2

Robusta appealed the decision to the NLRC on the grounds that the labor arbiter committed a grave abuse of discretion in rendering the decision as well as serious errors in the findings of fact which, if not corrected, would cause grave or irreparable injury to Robusta. Robusta claimed it was denied a trial on the merits which is indispensable for purposes of administrative due process. 3

In a decision promulgated on July 1, 1987, the Second Division of the NLRC 4 modified the decision of the labor arbiter by deleting the award of overtime pay, night differential pay and premium pay for holidays and rest days because of lack of evidence to support the claims. The NLRC affirmed the labor arbiter’s award for backwages arising from Robusta’s violation of the various Wage Orders issued by the government. 5

Gorombalem filed a motion for reconsideration of the NLRC Decision, asking that the labor arbiter’s decision be affirmed in toto. 6 Robusta also filed a motion for reconsideration of the NLRC decision on the ground, among others, that the labor arbiter failed to afford Robusta administrative due process by denying it a trial on the merits. 7

In a resolution promulgated on October 9, 1987, the NLRC denied Robusta’s motion for reconsideration for lack of merit and for having been filed out of time. 8

Hence, the present petition anchored on the ground that petitioner was denied administrative due process.

The petition is devoid of merit.

What clearly appears in the record is contrary to petitioner’s claim that it was denied administrative due process. The simple meaning of procedural due process is that a party to a case must be given sufficient opportunity to be heard. Its very essence is to allow all parties opportunity to present evidence. 9

In administrative cases, the requirement of due process is the right to a hearing, including the right of the party interested or affected to present his own case and submit evidence to support his allegation. 10

The record of the case discloses that the labor arbiter gave petitioner Robusta ample opportunity to present its side and to give evidence. It is petitioner’s fault if it failed to do so. It is a well-known rule that in proceedings before the NLRC or a labor arbiter, technical rules of procedure and evidence are not binding. 11 Even under the revised rules of the NLRC an expeditious procedure is provided for. 12

Under the aforementioned rules, after the initial conference for a possible amicable settlement of the case, the parties are required to submit their position papers accompanied by supporting documents and affidavits of witnesses. Under Section 3 of the same Rule VII, the labor arbiter has the discretion to determine the necessity for a formal hearing or investigation. This procedure was observed by the labor arbiter in this case.

Simplification of procedure, without regard to technicalities of law or procedure and without sacrificing the fundamental requisites of due process, is mandated to insure a speedy administration of social justice. This Court construed Article 221 of the Labor Code as to allow the NLRC or a labor arbiter to decide a case on the basis of position papers and other documents submitted without resorting to technical rules of evidence as observed in regular courts of justice. 13

In the present case, it is crystal clear from the record, that petitioner was given several opportunities to present evidence in its favor, but it failed to do so. At no time did petitioner ever ask that there be a trial on the merits. All that it submitted was its position paper. It was within the competence of the labor arbiter to determine if there was a need for a hearing. In this case, the labor arbiter did not deem it necessary to conduct a hearing. The petitioner was never denied administrative due process.

The court also takes note of the inconsistent stand of petitioner on the matter of Gorombalem’s separation from the service. Petitioner’s theory in its position paper was that the private respondent was not illegally dismissed as he resigned voluntarily because he was afraid of retaliatory action by the victim of a criminal incident for which he was charged. On the other hand, in its Motion for Reconsideration of the NLRC Decision, petitioner maintained that the criminal charge against private respondent should have been considered as a justification for the dismissal of private Respondent. This inconsistent position is an eloquent indication that the private respondent was dismissed from the service in an irregular manner and not in accordance with law.

Indeed, if truly the private respondent committed an act which was a lawful cause or justification for his dismissal, petitioner should have given him the opportunity to explain or present his side. There should not be an outright termination of the services of private respondent without affording him due process. Otherwise, it will be a violation of private respondent’s right to security of tenure. 14

WHEREFORE, the petition is DISMISSED for lack of merit, with costs against petitioner.

This decision is immediately executory.

SO ORDERED.

Narvasa, Cruz, Griño-Aquino and Medialdea, JJ., concur.

Endnotes:

1. Dentech Manufacturing Corporation v. National Labor Relations Commission, G.R. No. 81477, April 19, 1989.

2. Pages 23-29, Rollo.

3. Pages 36-40, Rollo.

4. The Second Division of the NLRC was then composed of Presiding Commissioner Daniel M. Lucas, Jr., Commissioners Domingo H. Zapanta and Oscar N. Abella.

5. Pages 42-48, Rollo.

6. Pages 49-57, Rollo.

7. Pages 60-62, Rollo.

8. Pages 74-76, Rollo.

9. Banco Español-Filipino v. Palanca, 37 Phil. 921 (1918).

10. Ang Tibay v. Court of Industrial Relations, 69 Phil. 635 (1940).

11. Article 221, Labor Code.

12. Section 2, Rule VII.

13. Manila Doctors Hospital v. NLRC, 135 SCRA 262, 265-267 (1985).

14. Article 3, Labor Code; Section 3, Article XIII, 1987 Constitution.

G.R. No. 80544 July 5, 1989 - ROSEMARIE M. LEE v. JOSEFINA CRUZ RODIL, ET AL.

2012-11-11T16:53:05+00:00

FIRST DIVISION

[G.R. No. 80544. July 5, 1989.]

ROSEMARIE M. LEE, Petitioner, v. HON. JOSEFINA CRUZ RODIL, Judge of Regional Trial Court, Branch X, Manila and PEOPLE OF THE PHILIPPINES, Respondents.

Manuel B. Imbong for Petitioner.

SYLLABUS

1. MERCANTILE LAW; TRUST RECEIPT LAW (P.D. 115); A VIOLATION THEREOF CONSTITUTE ESTAFA. — The violation of a trust receipt agreement constitutes the crime of estafa. (Sec. 13 of P.D. No. 115)

2. ID.; ID.; ID.; CASE AT BAR IS DIFFERENT FROM THE CUEVO AND SIA CASES; REASON. — The two decisions cited by the petitioner shows attendant facts that are different from those in the instant case. In the Cuevo and Sia cases, both violations of the trust receipt agreements happened in the 1960’s, way before the promulgation of P.D. 115 in 1973. (Rollo, p. 55) In the present case, the accused was charged in 1985 for an act committed in 1982. While the Cuevo and Sia cases were decided when P.D. 115 had already been promulgated, the decree was not applied in either of the cases because the questioned acts were committed before its effectivity. Thus, the view held by the Court in the Sia case that violation of a trust receipt only gives rise to civil liability did not take into consideration P.D. 115.

3. ID.; ID.; CRIMINAL LIABILITY FOR VIOLATION OF TRUST AGREEMENTS ATTACHES FROM DATE OF PROMULGATION OF P.D. 115. — Acts involving the violation of trust receipt agreements occurring after 29 January 1973 would make the accused criminally liable for estafa under paragraph 1 (b), Article 315 of the Revised Penal Code, pursuant to the explicit provision in Sec. 13 of P.D. 115. (Sia v. Court of Appeals, G.R. No. 40324, October 5, 1988)

4. ID.; ID.; ID.; DOES NOT CONFLICT WITH THE CONSTITUTIONAL PROVISION AGAINST IMPRISONMENT FOR NON-PAYMENT OF DEBT. — The petitioner questions the constitutionality of Sec. 13 of P.D. 115. She contends that it is violative of the constitutional right that "No person shall be imprisoned for debt or non-payment of a poll tax." The petitioner failed to make out a strong case that P.D. 115 conflicts with the constitutional prohibition against imprisonment for non-payment of debt. A convincing showing is needed to overcome the presumption of the validity of an existing statute. The criminal liability springs from the violation of the trust receipt. The loan feature is separate and distinct from the trust receipt. The violation of a trust receipt committed by disposing of the goods covered thereby and failing to deliver the proceeds of such sale has been squarely made to fall under Art. 315 (1)(b) of the Revised Penal Code.

5. ID.; ID.; TRUST RECEIPT; NATURE. — A letter of credit-trust receipt arrangement is endorsed with its own distinctive features and characteristics. Under that set-up, a bank extends a loan covered by the letter of credit, with the trust receipt as a security for the loan. In other words, the transaction involves a loan feature represented by the letter of credit, and a security feature which is in the covering trust receipt. (Vintola cases, 150 SCRA 578 [1987])

6. ID.; ID.; PERSON PREJUDICED NEED NOT BE THE OWNER OF THE GOODS. — The fact that the bank does not become the factual owner of the goods does not make the law unconstitutional (See the Vintola cases, supra) The language of the above-mentioned penal provision has been clarified by P.D. 115. The person who is prejudiced through the misappropriation or conversion of the goods need not be the owner, thereof; if such had been the intention of the authors of the Code, the phrase "to the prejudice of another" would have read "to the prejudice of the owner." (People v. Yu Chai Ho, 53 Phil. 874, 877-878).

7. ID.; ID.; A VALID EXERCISE OF POLICE POWER. — P.D. 115 is a valid exercise of police power and is not repugnant to the constitutional provision on non-imprisonment for non-payment of debt. (Losano v. Martinez, 146 SCRA 323)

D E C I S I O N

GUTIERREZ, JR., J.:

In this petition we are asked to reconsider the liability for estafa of an entrustee in a trust receipt agreement who disposes of the goods covered by it but fails to deliver the proceeds of the sale to the bank.

Petitioner Rosemarie M. Lee was charged with estafa in an information which alleged:jgc:chanrobles.com.ph

"That on or about July 26, 1982 in the City of Manila, Philippines, the said accused, did then and there wilfully, unlawfully and feloniously defraud the Philippine Bank of Communications, a banking institution duly organized and existing under the laws of the Republic of the Philippines, in the following manner, to wit: the said accused, being then the duly authorized representative of C.S. Lee Enterprises, Inc., after opening letter of credit with the said bank under L/C No. 63251 dated July 26, 1982, for the amount of P154,711.97, covering the purchase price of a certain merchandise consisting of 23 ctns. Lab. Culture Media in favor of said bank, received from the latter the necessary document and thereafter the said merchandise and forthwith, executed trust receipt for the aforesaid merchandise dated July 26, 1982, by virtue of which, the said accused obligated herself to hold said merchandise in trust with liberty to sell the same in cash for the account of the said bank and to account for the proceeds of the sale thereof, if sold or of returning the said merchandise to said bank in case of failure to sell the same, on or before October 24, 1982, but the said accused, once in possession of the said merchandise, far from complying with her aforesaid obligation and despite the lapse of a long period of time and repeated demands made upon her to that effect, did then and there willfully, unlawfully and feloniously, with intent to defraud, misappropriate, misapply and convert the said merchandise or the value thereof, to her own personal use and benefit, to the damage and prejudice of the said Philippine Bank of Communications in the amount of P154,711.97, Philippine currency." (Rollo, p. 19)

The accused moved to quash this information on the ground that the facts charged do not constitute an offense. She alleges that the violation of a trust receipt agreement does not constitute estafa notwithstanding an express provision in the "Trust Receipts Law" (P.D. 115) characterizing such violation as estafa. She attacks P.D. 115 for being unconstitutional.

The trial court, in its order dated August 21, 1987 denied the motion to quash the information and upheld the constitutionality of P.D. No. 115.

The subsequent Motion for Reconsideration was also denied for lack of merit in an order dated October 12, 1987.

Hence, this petition.

The issue posed in this case is whether or not the violation of a trust receipt agreement constitutes the crime of estafa.

We answer in the affirmative in the light of a specific provision in P.D. No. 115.

Sec. 13 of P.D. No. 115 provides:jgc:chanrobles.com.ph

". . . Penalty clause. — The failure of an entrustee to turn over the proceeds of the sale of the goods, documents or instruments covered by a trust receipt to the extent of the amount owing to the entruster or as appears in the trust receipt or to return said goods, documents or instruments if they were not sold or disposed of in accordance with the terms of the trust receipt shall constitute the crime of estafa, punishable under the provisions of Article Three Hundred and Fifteen, Paragraph One (b) of Act Numbered Three Thousand Eight Hundred and Fifteen, as amended, otherwise known as the Revised Penal Code. If the violation or offense is committed by a corporation, partnership, association or other juridical entities, the penalty provided for in this Decree shall be imposed upon the directors, officers, employees or other officials or persons therein responsible for the offense without prejudice to the civil liabilities arising from the criminal offense." (Emphasis supplied).

The petitioner cites the cases of People v. Cuevo, (104 SCRA 312 [1981]) and Sia v. People, (121 SCRA 655 [1983]) to support her stand that the violation of a trust receipt does not constitute estafa.

The petitioner’s citation of People v. Cuevo, supra does not strengthen her case at all. Of the eleven (11) members of the Court, a majority of six (6) were clearly of the view that the violation of a trust receipt constitutes estafa. The Chief Justice concurred with them on the issue of absence of double jeopardy. Two Justices inhibited themselves. Only two (2) out of the eleven members strongly adhered to the view now presented by the petitioner. However, for want of one vote needed to reverse the dismissal order of the lower court, the view of the dissenting Justices prevailed as the result in that case. Excerpts from the majority opinion show as follows:jgc:chanrobles.com.ph

". . . (I)t is a well-entrenched rule in our jurisprudence that the conversion by the importer of the goods covered by a trust receipt constitutes estafa through misappropriation under article 315(1)(b) of the Revised Penal Code. (People v. Yu Chai Ho, 53 Phil. 874 and Samo v. People, 115 Phil. 346. As to civil cases, see National Bank v. Viuda e Hijos de Angel Jose, 63 Phil. 814; Philippine National Bank v. Catipon, 98 Phil. 286 and Philippine National Bank v. Arrozal, 103 Phil. 213).

x x x

"As noted by Justice Street in People v. Yu Chai Ho, supra, the conversion by the trustee in a trust receipt of the proceeds of the sale falls ‘most literally and directly under’ the provisions of article 315(1)(b).

Thus, it was held that where, notwithstanding repeated oral and written demands by the bank, the petitioner had failed either to turn over to the said bank the proceeds of the sale of the goods, or to return said goods if they were not sold, the petitioner is guilty of estafa under article 315 (1)(b) (Samo v. People, 115 Phil. 346).

"In this connection, it is relevant to state that Presidential Decree No. 115, the Trust Receipts Law, regulating trust receipt transactions, was issued on January 29, 1973.

x x x

"The enactment of the said penal provision is confirmatory of existing jurisprudence and should not be construed as meaning that, heretofore, the misappropriation of the proceeds of a sale made under a trust receipt was not punishable under article 315. That penal provision removed any doubt as to the criminal liability of the holder of a trust receipt who misappropriated the proceeds of the sale."cralaw virtua1aw library

It was the lower court in the Cuevo case which ruled that violation of a trust receipt gives rise to a civil action only. This was not the ruling in the Supreme Court’s decision.

It was made quite clear in the majority opinion that the lower court erred in holding that the accused did not commit estafa under article 315 (1)(b). (104 SCRA 312, 316).

The petitioner quotes the dissenting opinion of Justice De Castro in this case that:jgc:chanrobles.com.ph

"The parties, therefore, are deemed to have consciously entered into a purely commercial transaction that could give rise only to civil liability, never to subject the ‘entrustee’ to criminal prosecution. Unlike, for instance, when several pieces of jewelry are received by a person from the owner for sale on commission, and the former misappropriates for his personal use and benefit, either the jewelries or the proceeds of the sale, instead of returning them to the owner as is his obligation, the bank is not in the same concept as the jewelry owner with full power of disposition of the goods, which the bank does not have, for the bank has previously extended a loan which the L/C represents to the importer, and by that loan, the importer should be the real owner of the goods. If under the trust receipt, the bank is made to appear as the owner, it was but an artificial expedient, more of a legal fiction than fact, for it were really so, it could dispose of the goods in any manner it wants, which it cannot do, just to give consistency with the purpose of the trust receipt by giving a stronger security for the loan obtained by the importer. To consider the bank as the true owner from the inception of the transaction would be to disregard the loan feature thereof, a feature totally absent in the case of the transaction between the jewel-owner and his agent."cralaw virtua1aw library

Equally emphatic is the dissent of then Senior Associate Justice Claudio Teehankee that:jgc:chanrobles.com.ph

"I concur with the dissent of Mr. Justice De Castro insofar as it upholds the more liberal interpretation to the trust receipt transaction which would give rise only to civil liability on the part of the offender. The very definition of trust receipt as given in the main opinion (at pp. 4-5), ‘(A) trust receipt is considered as a security transaction intended to aid in financing importers and retail dealers who do not have sufficient funds or resources to finance the importation or purchase of merchandise, and who may not be able to acquire credit except through utilization, as collateral, of the merchandise imported or purchased’ (53 Am. Jr. 961, cited in Samo v. People, 115 Phil. 346, 349),’ sustains the lower court’s rationale in dismissing the information that the contract covered by a trust receipt is merely a secured loan. The goods imported by the small importer and retail dealer through the bank’s financing remain of their own property and risk and the old capitalist orientation of putting them in jail for estafa for non-payment of the secured loan (granted after they had been fully investigated by the bank as good credit risks) through the fiction of the trust receipt device should no longer be permitted in this day and age."cralaw virtua1aw library

It should, however, be noted that even as Justice de Castro filed a dissent, he also made the following observations:jgc:chanrobles.com.ph

"The question is whether the violation of the terms of a trust receipt would constitute estafa. There is no more doubt that under P.D. 115, the violation is defined as estafa, but before the promulgation of said decree, I have entertained grave doubts to such extent that I would acquit a person accused of the crime allegedly committed before said decree, the promulgation of which serves to confirm my doubts. For if there had been no such doubt, especially as some decisions had already been rendered by this Court holding that estafa is committed where there is a violation of a trust receipt, there would have been no need for P.D. 115." (Emphasis supplied)

The dissenting opinions later became the Court’s ruling on the matter when the Sia decision penned by Justice De Castro was promulgated.

In the Sia case, supra, it was held that:jgc:chanrobles.com.ph

"Consequently, if only from the fact that the trust receipt transaction is susceptible to two reasonable interpretation(s), one as giving rise only to civil liability for the violation of the condition thereof, and the other, as generating also criminal liability, the former should be adopted as more favorable to the supposed offender. . . ."cralaw virtua1aw library

A closer look at the two decisions cited by the petitioner shows attendant facts that are different from those in the instant case.

As noted by the Solicitor General, in the Cuevo and Sia cases, both violations of the trust receipt agreements happened in the 1960’s, way before the promulgation of P.D. 115 in 1973. (Rollo, p. 55) In the present case, the accused was charged in 1985 for an act committed in 1982.

While the Cuevo and Sia cases were decided when P.D. 115 had already been promulgated, the decree was not applied in either of the cases because the questioned acts were committed before its effectivity.

Thus, the view held by the Court in the Sia case that violation of a trust receipt only gives rise to civil liability did not take into consideration P.D. 115, as it ruled:jgc:chanrobles.com.ph

"We consider the view that the trust receipt arrangement gives rise only to civil liability as the more feasible, before the promulgation of P.D. 115." (121 SCRA 655, 664) (Emphasis supplied).

Acts involving the violation of trust receipt agreements occurring after 29 January 1973 would make the accused criminally liable for estafa under paragraph 1 (b), Article 315 of the Revised Penal Code, pursuant to the explicit provision in Sec. 13 of P.D. 115. (Sia v. Court of Appeals, G.R. No. 40324, October 5, 1988).

The petitioner questions the constitutionality of Sec. 13 of P.D. 115. She contends that it is violative of the constitutional right that "No person shall be imprisoned for debt or non-payment of a poll tax."

The petitioner has failed to make out a strong case that P.D. 115 conflicts with the constitutional prohibition against imprisonment for non-payment of debt. A convincing showing is needed to overcome the presumption of the validity of an existing statute.

The criminal liability springs from the violation of the trust receipt.

We bear in mind the nature of a trust receipt agreement. This Court pronounced in the Vintola cases, 150 SCRA 578 (1987); G.R. No. 78671, March 25, 1988 that:jgc:chanrobles.com.ph

". . . A letter of credit-trust receipt arrangement is endorsed with its own distinctive features and characteristics. Under that set-up, a bank extends a loan covered by the letter of credit, with the trust receipt as a security for the loan. In other words, the transaction involves a loan feature represented by the letter of credit, and a security feature which is in the covering trust receipt." (Emphasis supplied)

Therefore, the loan feature is separate and distinct from the trust receipt. The violation of a trust receipt committed by disposing of the goods covered thereby and failing to deliver the proceeds of such sale has been squarely made to fall under Art. 315 (1)(b) of the Revised Penal Code, which provides:jgc:chanrobles.com.ph

". . . Swindling (estafa). — Any person who shall defraud another by any of the means mentioned herein below shall be punished by:chanrob1es virtual 1aw library

x x x

"a. With unfaithfulness or abuse of confidence, namely:chanrob1es virtual 1aw library

x x x

"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."cralaw virtua1aw library

The fact that the bank does not become the factual owner of the goods does not make the law unconstitutional (See the Vintola cases, supra) The language of the above-mentioned penal provision has been clarified by P.D. 115. The person who is prejudiced through the misappropriation or conversion of the goods need not be the owner, thereof; if such had been the intention of the authors of the Code, the phrase "to the prejudice of another" would have read "to the prejudice of the owner." (People v. Yu Chai Ho, 53 Phil. 874, 877-878).

Moreover, we agree with the Solicitor General who expressed the policy behind the law:jgc:chanrobles.com.ph

"Verily, P.D. 115 is a declaration by the legislative authority that, as a matter of public policy, the failure of a person to turn over the proceeds of the sale of goods covered by a trust receipt or to return said goods if not sold is a public nuisance to be abated by the imposition of penal sanctions. As held in Lozano v. Martinez, (146 SCRA 323, 338):jgc:chanrobles.com.ph

"‘. . . certainly it is within the authority of the lawmaking body to prescribe certain acts deemed pernicious and inimical to public welfare. Acts mala in se are not the only acts that the law can punish. An act may not be considered by society as inherently wrong, hence, not malum in se, but because of the harm that it inflicts on the community, it can be outlawed and criminally punished as malum prohibitum. The State can do this in the exercise of its police power.’

"In fine, P.D. 115 is a valid exercise of police power and is not repugnant to the constitutional provision on non-imprisonment for non-payment of debt."cralaw virtua1aw library

The undersigned ponente concurred in the Sia decision in 1983 because the allegedly criminal act was committed before the pointedly deliberate expression of legislative intent was manifested in a statute. There were then doubts as to the susceptibility of a trust receipt transaction to two different interpretations, one which limits the effects of a violation to civil liability and the other to include criminal responsibility. Certain factual considerations in the Sia case strengthened the arguments for acquittal of the accused. There have been two legislatures since then — the Batasang Pambansa and the present Congress of the Philippines — but no repeal of P.D. 115 has been made. To declare this law unconstitutional is an entirely different proposition from merely choosing one of two reasonable alternatives.

An examination of P.D. 115 shows the growing importance of trust receipts in Philippine business, the need to provide for the rights and obligations of parties to a trust receipt transaction, the study of the problems involved and the action by monetary authorities, and the necessity of regulating the enforcement of rights arising from default or violations of trust receipt agreements. The legislative intent to meet a pressing need is clearly expressed. We see no unconstitutionality in the means deliberately employed to enforce the integrity of trust receipts.

WHEREFORE, the trial court’s orders are AFFIRMED and the case is remanded to the trial court for further proceedings.

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

G.R. No. 82113 July 5, 1989 - PEOPLE OF THE PHIL. v. ROMULO CANETE

2012-11-11T16:53:05+00:00

THIRD DIVISION

[G.R. No. 82113. July 5, 1989.]

PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. ROMULO CAÑETE, Accused-Appellant.

The Solicitor General for Plaintiff-Appellee.

Antonio S. Ramas-Uypitching counsel de oficio for Accused-Appellant.

SYLLABUS

1. REMEDIAL LAW; CRIMINAL PROCEDURE; FACT THAT A CORROBORATIVE WITNESS WAS NOT PRESENTED, DOES NOT WORK AGAINST THE PROSECUTION. — The fact that the other two eyewitnesses were not presented as prosecution witnesses at the trial does not work against the prosecution nor invalidate the judgment of conviction. Their testimony, at best, would have been merely corroborative. (See People v. Jandayan, G.R. No. 74871, February 27, 1989).

2. ID.; EVIDENCE; CREDIBILITY, NOT AFFECTED BY RELATIONSHIP. — In the absence of improper motive on the part of the prosecution witnesses, the fact that they are related to the victim does not render their clear and positive testimony less worthy of full faith and credit. (People v. Abonada, G.R. No. 50041, January 27, 1989; People v. Alvarez, G.R. No. 70446, January 31, 1989).

3. CRIMINAL LAW; JUSTIFYING CIRCUMSTANCE; SELF-DEFENSE; REQUISITES. — The requisites to prove the claim of self-defense as stated in paragraph 1 of Article 11 of the Revised Penal Code, namely: (1) unlawful aggression; (2) reasonable necessity of the means employed to prevent or repel it; and (3) lack of sufficient provocation on the part of the person defending himself. (paragraph I, Article II of the Revised Penal Code)

4. ID.; ID.; ID.; UNLAWFUL AGGRESSION, INDISPENSABLE. — It is elementary that the first requisite of self-defense is indispensable. The trial court ruled in the instant case that this was not satisfactorily proven. Thus there is no self-defense to speak of as it was not proven that there was unlawful aggression on the part of the victim. There being no unlawful aggression, there is nothing to prevent or repel. (Ortega v. Sandiganbayan, G.R. No. 57664, February 8, 1989).

5. REMEDIAL LAW; EVIDENCE; FINDINGS OF FACT OF THE TRIAL COURT, GENERALLY NOT DISTURBED ON APPEAL. — On the presence of the qualifying circumstance of treachery, the Court finds no reason to disturb the trial court’s findings on this point considering that it had the privilege of examining and observing the deportment of the witnesses.

D E C I S I O N

GUTIERREZ, JR., J.:

This is an appeal from the decision of the Regional Trial Court of Negros Oriental, Branch 30, Dumaguete City, the dispositive portion of which provides:jgc:chanrobles.com.ph

"IN VIEW OF THE FOREGOING, the Court finds Accused Romulo Cañete guilty beyond reasonable doubt of the crime of Murder charged in the information, defined and penalized in Art. 248 of the Revised Penal Code, and considering the aggravating circumstance of dwelling against him, there being no mitigating circumstance, he is hereby sentenced to suffer the penalty of Reclusion Perpetua with the accessory penalties provided by law, to indemnify the heirs of Zacarias Tampipi in the amount of Thirty Thousand Pesos (P30,000.00), and to pay the costs." (Rollo, p. 33)

The information filed against the accused alleged:jgc:chanrobles.com.ph

"That on or about October 20, 1985, at sitio Abaca, Brgy. Cawitan, Sta. Catalina, Negros Oriental, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, with intent to kill, treachery and taking advantage of darkness, did then and there wilfully, unlawfully and feloniously assault, attack, stab and hack, one Zacarias Tampipi, with the use of a bolo, with which the accused was then armed and provided, thereby inflicting upon the victim mortal stab and hack wounds in the different parts of the body, to wit:jgc:chanrobles.com.ph

"1) Stab wound, 2 inches wide perforating the abdominal cavity with herniation of the large intestine at the left lateral side of the abdominal region.

"2) Hacked wound at the elbow cutting off the head of the humerus extending from the medial to the lateral side of the elbow joint.

"3) Two superficial hacked wounds, 1 inch wide, 2 inches apart from each other at the posterior left forearm.

which wounds caused the death of said Zacarias Tampipi shortly thereafter." (Rollo, p. 6)

The prosecution’s evidence upon which the trial court based its finding of guilt beyond reasonable doubt is narrated by it as follows:jgc:chanrobles.com.ph

"The version of the Prosecution, thru witnesses Dra. Rosita Muñoz, Dominador Manayon and Norma Tampipi, is as follows: That on October 20, 1985, Zacarias Tampipi, Dominador Manayon, Bomby Lastimosa and Tony Pantoja were in the poblacion of Barangay Cawitan, Sta. Catalina, Negros Oriental to sell bananas. On their return they all dropped by the house of Zacarias Tampipi in sitio Abaca, upon invitation of the latter, arriving there at about 8:30 o’clock in the evening. Zacarias Tampipi thereupon gathered about 4 liters of tuba from his coconut trees and the four of them (Zacarias, Dominador Manayon, Bomby Lastimosa and Tony Pantoja) had a drinking spree at the open porch of the house of Zacarias which was about 3 feet and 9 inches high from the ground. While Dominador Manayon, Bomby Lastimosa and Tony Pantoja were standing on the ground beside the edge of the porch, Zacarias Tampipi was seated at the nearby corner thereof and his wife Norma was seated across him near the door leading to the living room. Beside Norma was a small wick lamp which furnished the illumination around the porch. At about 11:00 o’clock that same night Accused suddenly appeared from behind and stabbed Zacarias Tampipi on the left side with a long, sharp bolo, causing the latter to fall to the ground. Dominador Manayon moved back while Bomby Lastimosa and Tony Pantoja ran away. While Zacarias Tampipi was already lying on the ground, Accused kept on hacking him with the bolo until he was told to stop by Dominador Manayon and Norma Tampipi. Then accused left. When Accused was no longer there, Bomby Lastimosa and Tony Pantoja came back and, together with Dominador Manayon, they carried Zacarias Tampipi upstairs where he died not long after.

"At the time of his death Zacarias Tampipi was only 39 years old and was an overseer of the sugar cane plantation of Junior Ferraren with a salary of P500.00 a month. His widow, Norma Tampipi, has spent P4,000.00 for his burial and for the customary 9-days prayer." (Rollo, pp. 25-26)

The accused raises the following assignment of errors in this appeal, to wit:chanrob1es virtual 1aw library

THAT SUBSTANTIAL FACTS AND CIRCUMSTANCE WERE OVERLOOKED BY THE TRIAL COURT AND WHICH, IF WERE PROPERLY CONSIDERED MIGHT HAVE AFFECTED THE RESULT OF THE CASE AT BAR.

ASSUMING ARGUENDO THAT ACCUSED-APPELLANT WAS GUILTY OF COMMITTING A CRIME, THE SAME SHOULD ONLY BE THAT OF HOMICIDE AND NOT MURDER AS ERRONEOUSLY HELD BY THE TRIAL COURT. (Rollo, p. 53).

The records sustain the factual findings of the trial court and its assessment of the credibility of witnesses. We affirm its decision.

On the first assigned error, the accused questions the non-production of two other witnesses who allegedly witnessed the commission of the crime. Only the wife and the neighbor of the victim were presented by the prosecution and their testimonies are allegedly biased.

The fact that the other two eyewitnesses were not presented as prosecution witnesses at the trial does not work against the prosecution nor invalidate the judgment of conviction. Their testimony, at best, would have been merely corroborative. (See People v. Jandayan, G.R. No. 74871, February 27, 1989).

Moreover, one was in fact presented as a witness for the defense.

As noted by the Solicitor General, to wit:jgc:chanrobles.com.ph

"More importantly, the number of witnesses to be presented and whom to present are matters within the prosecution’s prerogative to decide. Besides, the two witnesses alluded to by the defense as having been not presented are Antonio Pantoja and a certain Bomby Lastimosa, and the records show that Antonio Pantoja is the brother-in-law of the accused, his wife Vicenta Cañete being the sister of accused Romulo Cañete. Being an adverse witness, the prosecution did not present him as Government witness.

At any rate, Antonio Pantoja was in fact presented as a witness for the defense and was cross-examined by the prosecution. Hence, his testimony was already taken into consideration by the trial court in rendering the judgment appealed from.

As to Bomby Lastimosa, the record shows that the prosecution sought his attendance through the issuance of Subpoena (p. 104, rec.) but he failed to appear despite notice (p. 111, rec.), prompting the prosecution to dispense with his testimony in order not to delay the administration of justice. Besides, his testimony would only be corroborative, and not so indispensable. At any rate, in the determination of the values and credibility of evidence, witnesses are to be weighed and not numbered (People v. Nabaunag, 79 SCRA 33 [1977]). For the testimony of only one witness, if credible and trustworthy, is sufficient to convict (People v. Nabaunag, supra).

Moreover, the accused has all the right and opportunity to have called Bomby Lastimosa as his own witness. Nothing could have prevented accused from doing so. For the accused has the right to use the processes of the court to compel the attendance of witnesses. This the accused failed to avail of. He should not lay the blame on the prosecution." (At pp. 10-11, Rollo)

The relationship between the prosecution witnesses and the victim does not work against the credibility of the former. This Court has held that where there is no showing of improper motive on the part of the prosecution witnesses, the fact that they are related to the victim does not render their clear and positive testimony less worthy of full faith and credit. (People v. Abonada, G.R. No. 50041, January 27, 1989; People v. Alvarez, G.R. No. 70446, January 31, 1989).

The accused points out to alleged improbabilities in the narration of the prosecution witnesses to impugn their credibility. He contends that it is improbable that the victim and the witnesses would drink before taking supper, that there was no "pulutan" and that the witnesses stood for two hours.

The trial court observed that" [I]t is customary for village people in order to drive away fatigue and boredom, to "refresh" themselves with tuba (a cheap local drink taken from coconut sap) and while away the evening hours with conversation. And Zacarias Tampipi did just that with Dominador Manayon, Bomby Lastimosa and Antonio Pantoja who went with him and his wife to and from the poblacion of Barangay Cawitan on that same fateful day." (Rollo, p. 30).

It is not incredible that there would be no "pulutan" and that some of them would stand. Nothing was to prevent them from sitting on the floor as is often done in the barrios.

There is actually no doubt that the accused killed the victim. He admitted the killing, although he claims it was done in self-defense.

This claim, however, must fail.

There are three requisites to prove the claim of self-defense as stated in paragraph 1 of Article 11 of the Revised Penal Code, namely: (1) unlawful aggression; (2) reasonable necessity of the means employed to prevent or repel it; and (3) lack of sufficient provocation on the part of the person defending himself.

It is elementary that the first requisite of self-defense is indispensable. The trial court ruled in the instant case that this was not satisfactorily proven. Thus there is no self-defense to speak of as it was not proven that there was unlawful aggression on the part of the victim. There being no unlawful aggression, there is nothing to prevent or repel. (Ortega v. Sandiganbayan, G.R. No. 57664, February 8, 1989).

As held in the case of Ebajan v. Court of Appeals, G.R. Nos. 77930-31, February 9, 1989:jgc:chanrobles.com.ph

"A person who seeks justification for his act must prove by clear and convincing evidence the presence of the necessary justifying circumstance for having admitting wounding or killing his adversary, and he is criminally liable unless he is able to satisfy the court that he acted in legitimate self-defense."cralaw virtua1aw library

The accused contends that his voluntary surrender shows that he has nothing to hide and attacks the delay in reporting the incident.

We agree with the Solicitor General who stated:jgc:chanrobles.com.ph

"Third, contrary to appellant’s claim, the fact that accused surrendered voluntarily (p. 11, rec.) does not give rise to the presumption that he had nothing to hide. From the evidence of the prosecution, it is more plausible that accused surrendered himself because the evidence against him was overwhelming. There being at least four (4) persons who witnessed the killing, Accused surrendered voluntarily, for there is no chance to escape his liability.

"Fourth, appellant contends that the prosecution witnesses failed to report the incident right away, claiming that the wife of the victim gave her statement to the police authority only on March 24, 1986 while prosecution witness Dominador Manayon gave his statement only after three (should be four) days after the incident took place. The long failure allegedly `would indicate that they never witnessed the incident as they have claimed during the trial. (p. 8, id.)

"The contention is specious. Record shows that the killing of the victim was reported immediately to the police authorities. What was taken four days after on October 24, 1985 (p. 7, rec.) was the affidavit of witness Dominador Manayon. On the other hand, the wife of the victim was interviewed immediately by the police after the incident. The reporting of the incident to the police authorities is not reckoned by the date of the execution of the sworn statements of would-be prosecution witnesses but by the actual reporting of the incident to the authorities concerned although no statements were taken. Besides, it is not the fault of the victim’s wife if her statement was not reduced into writing by the policemen when she reported the incident . . ."cralaw virtua1aw library

Appellee’s Brief, pp. 15-16)

x x x

"Lastly, appellant questions the credibility of witness Dominador Manayon considering his alleged behavior and manner when testifying on the witness stand.

"Again, this is a matter of credibility of witnesses. As earlier stated, on matters of credibility of witnesses, the findings of the trial court carry great weight and command favorable consideration (People v. Bernat, supra).

"From the foregoing, the alleged substantial facts and circumstances overlooked by the trial court are neither substantial nor overlooked by the trial court which would call for a judgment of acquittal." (Appellee’s Brief, pp. 18-19).

On the presence of the qualifying circumstance of treachery, the Court finds no reason to disturb the trial court’s findings on this point considering that it had the privilege of examining and observing the deportment of the witnesses.

The trial court held:jgc:chanrobles.com.ph

"The stabbing of Zacarias Tampipi by accused was, as the evidence of the Prosecution shows, sudden and unexpected, without the former having any expectation of its being done to him nor any warning of its happening.

"The unexpected assault (People v. Ventura, 80 SCRA 515) or the attack which was sudden and unexpected (People v. Ursal, 121 SCRA 410) has sufficiently proved the presence of treachery in the commission of the offense ‘as accused employed means and methods in the execution of the offense which tended directly and specially to insure its execution without risk to himself arising from the defense that the victim might have made.’ (People v. Yap, 125 SCRA 203; People v. de la Fuente, 126 SCRA 518).

"When Zacarias Tampipi was assaulted, he was unarmed entirely defenseless and the accused, who came from the dark behind the victim, was totally unexposed to any risk that might have come from him since he was not at all in a position to fight back. The offense charged against accused was, therefore, properly categorized as Murder in view of the presence of the qualifying circumstance of treachery." (Rollo, pp. 32-33)

WHEREFORE, the guilt of the accused having been proved beyond reasonable doubt, the appealed decision is hereby AFFIRMED.

SO ORDERED.

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

G.R. No. 82737 July 5, 1989 - PEOPLE OF THE PHIL. v. AUREO G. ROJO

2012-11-11T16:53:05+00:00

FIRST DIVISION

[G.R. No. 82737. July 5, 1989.]

PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. AUREO ROJO y GABRIEL, Defendant-Appellant.

The Solicitor General for Plaintiff-Appellee.

Alfredo M. Cargo, for Defendant-Appellant.

SYLLABUS

1. REMEDIAL LAW; EVIDENCE; CONVICTION MUST BE BASED ON THE STRENGTH OF THE PROSECUTION’S EVIDENCE AND NOT ON THE WEAKNESS OF THE DEFENSE. — It is a fundamental rule that a judgment of conviction must be predicated on the strength of the evidence for the prosecution and not on the weakness of the evidence for the defense. The trial court cannot merely depend upon probabilities and improbabilities of alleged events. It must determine whether or not the alleged events actually happened based on the evidence adduced.

2. ID.; ID.; ID.; FAILURE TO MEET THE CRITERIA IN CASE AT BAR. — The facts as found by the trial court which show that none of the prosecution witnesses actually saw the appellant deliver the alleged bag of flowering tops of marijuana which was allegedly sold to the informant. It also indicates that they did not see the informant pay the alleged consideration of the sale with a 10-peso bill. They just assumed that the transaction was consummated upon a signal from the informant. There is, therefore, no direct evidence, much less conclusive proof, to establish the alleged unlawful sale of marijuana being pinned on the Appellant.

3. ID.; CRIMINAL PROCEDURE; FAILURE TO PRESENT VITAL WITNESS GIVES RISE TO THE PRESUMPTION THAT EVIDENCE WILFULLY SUPPRESSED WOULD BE ADVERSE IF PRODUCED. — If truly there was such an entrapment that was undertaken in this case, the informant would be the best witness for the prosecution. Inasmuch as he was not presented, the case of the prosecution must fall. The police officers and the prosecution aver that they did not present the informant as his identity was a confidential matter. If the purpose is to conceal the identity of the informant from the appellant and for the personal security of said informant, the said objective cannot be attained by withholding the testimony of the informant during the trial. The informant must be well known if not familiar to the appellant otherwise the latter would not readily sell the marijuana to the former. Thus, the identity of the informant was known to the appellant all the time and when immediately thereafter the appellant was apprehended and arrested by the police officers and the informant was not similarly taken into custody, the only logical conclusion is that the appellant right then and there found out that he was the victim of an entrapment and that the informant was in collusion with the police authorities. There is, therefore, no reason why the prosecution could not and did not present the informant as a prosecution witness. He is the best witness to establish the charge against the appellant who denies the charge. As the appellant correctly observed, such a failure to present the informant as a witness gives rise to the presumption that such evidence wilfully suppressed would be adverse if produced.

4. ID.; EVIDENCE; DEFENSE OF DENIAL ASSUMES IMPORTANCE WHERE THE EVIDENCE FOR THE PROSECUTION IS WEAK. — In the light of the shaky evidence of the prosecution, the defense of the appellant consisting not only of a categorical denial of the imputation against him but an assertion that it was a frame-up and that the policemen attempted to extort money from him becomes significant.

D E C I S I O N

GANCAYCO, J.:

Once again, this Court must determine if the judgment of conviction rendered by the trial court imposing a sentence of life imprisonment on the defendant-appellant is proper against the theory of the defense that the accused was never found in possession of marijuana or caught selling the same and that the case filed against him was instigated by policemen who were allegedly extorting money as a consideration for the release of the accused.

In an information that was filed by the Office of the City Fiscal of Manila with Branch 15 of the Regional Trial Court of Manila, appellant was charged with violation of Section 4, Article II, Republic Act No. 6425, as amended by Presidential Decree No. 1675, as follows:jgc:chanrobles.com.ph

"That on or about April 15, 1987, in the City of Manila, Philippines, the said accused, not being authorized by law to distribute any prohibited drug, did then and there wilfully and unlawfully deliver, give away, distribute, sell or offer for sale, dried flowering tops of marijuana, which is prohibited drug.

Contrary to law." 1

The case was docketed as Criminal Case No. 87-54030.

Upon his arraignment on September 17, 1987, the appellant, assisted by counsel, pleaded not guilty. After trial, the court 2 convicted the appellant in a decision dated February 17, 1988, the dispositive portion of which reads:jgc:chanrobles.com.ph

"WHEREFORE, in the light of all the foregoing considerations, the Court finds the accused, AUREO ROJO Y GABRIEL, guilty beyond reasonable doubt of the crime of violation of Section 4, Article II, of Republic Act No. 6425, otherwise known as the Dangerous Drugs Act of 1972, as amended by Presidential Decree No. 1675, and as charged in the Information, and, accordingly, hereby sentences him to suffer the penalty of reclusion perpetua, with all the necessary penalties provided for by law; to pay a fine of TWENTY THOUSAND PESOS (P20,000.00), without subsidiary imprisonment in case of insolvency, and to pay the costs.

Once this Decision shall become final and executory, the dried flowering tops of marijuana (Exhibit "F-1") shall be turned over to the Dangerous Drugs Board through the Director, National Bureau of Investigation, Taft Avenue, Manila, for proper disposition. On the other hand, the marked money which is a P10.00 bill with Serial No. ZF-222446 (Exhibit "G") shall be returned to P/Sgt. Jimmy Carbonel.

SO ORDERED." 3

In this appeal, appellant assigns the following errors on the part of the trial court, to wit:chanrob1es virtual 1aw library

THE COURT A QUO GRAVELY ERRED IN CONVICTING THE APPELLANT FOR VIOLATION OF SECTION 4 OF ARTICLE II, R A. 6425, AS AMENDED, DESPITE THE WANT OF EVIDENCE SUFFICIENT TO ESTABLISH HIS GUILT BEYOND REASONABLE DOUBT.

THE COURT A QUO GRAVELY ERRED IN GIVING WEIGHT AND CREDENCE TO THE TESTIMONIES OF THE PROSECUTION WITNESSES AND IN DISREGARDING THE THEORY OF THE DEFENSE." 4

The findings of fact of the trial court are as follows:jgc:chanrobles.com.ph

"The Special Operations Unit [or the Narcotics Control and Investigation Section (NCIS)] received numerous complaints through telephone calls on the rampant drug-pushing going on at Barreto St., Pandacan, that month of April 1987. The NCIS operatives looked for an informant to help them bust such operations until finally, Pat. Maniquiz saw his former informant living within the vicinity of Barreto St., Pandacan, Manila. Said informant, upon Maniquiz invitation, came to the Special Operations Unit at around 10:00 o’clock that night of April 14, 1987 and confirmed the rampant activities of drug pushers at Barreto St., identifying the pushers as ‘Jay jay’, ‘Pete’ and ‘Bong’. Sgt. Carbonel immediately organized a team — he as the team leader and Patrolmen Maniquiz, Ramon Alferos, Danilo Peltra, Jorge Balatbat and Zaldy Papa as team members. Once organized they proceeded with the informant to Barreto St., Pandacan, to conduct a surveillance to ascertain/verify whether drug-pushing was really rampant at that area. They conducted the necessary surveillance by posting themselves at strategic places and observing what was going on. In due time, they saw the accused, alias ‘Bong’, talking to teenagers (some riding on bicycles and others walking), after which he (accused) gave something to the teenagers whom he talked to and in turn, he received something from the recipients. Convinced that drug-pushers really proliferated in that area, the team-members returned to the Ford Fiera vehicle which they used and where their team leader, Sgt. Carbonel, was waiting, and reported what they saw. Then and there, Carbonel briefed them and told them to implement their ‘buy-bust’ operations with the informant as the poseur-buyer, using a P10.00 bill marked money (Exhibit ‘G’) to buy marijuana. Pat. Maniquiz was told to stay near the informant which he did by staying 5-7 meters from him. Sgt. Carbonel and Pat. Balatbat acted as perimeter security while Patrolmen Alferos, Peltra and Papa will be the arresting officers. The police informant proceeded to where the accused was at that time which is right in front of their (accused) house. The place was well lighted by MERALCO street lamps. Alferos was 10 meters from the informant and the accused while the others stayed at a fair distance so as not to arouse suspicion. Carbonel and Balatbat stayed in their jeep parked at Beata St., which is some 100 meters from the scene. It was agreed that the moment their informant, would give the signal (his left hand to scratch the left side of his head to indicate that the marijuana was already handed to him and he, in turn, gave the money to the pusher), they will immediately converge and effect the arrest. So, when they saw the informant scratching the left side of his head, the team members converged and closed in. Maniquiz identified himself as a policeman to the accused, after which he, with the assistance of Alferos, arrested him for selling one tea bag of dried flowering tops of marijuana (Exhibits ‘F-1’). The arrest was effected at 12:45 o’clock in the early morning of April 15, 1987. They then brought the accused, together with the evidence, to the NCIS office. Once they reached their office, Carbonel turned over to the police investigator, Pat. Eliseo Zamora, the body of the accused and the subject marijuana (Exhibit ‘F-1’) and the marked money (Exhibit ‘G’). Zamora informed Rojo of his constitutional rights to remain silent, to counsel and the nature of the accusation against him which is drug pushing. Then, he prepared a written request to the NBI for examination of the specimen, which together with said specimen, he handcarried to the NBI Forensic Chemistry Laboratory for the determination of whether the same is positive of marijuana or not. Meanwhile, Carbonel and the others executed a joint affidavit of arrest (Exhibit ‘A’ and ‘A-1’).

"The accused, known as Bong, was not only the pusher in that place. For he has companions like Jayjay (somewhat fat with a height of 5’5") and Pete (medium built and brown complexion). Actually, the three pushers were their objective that night but it was only Rojo who appeared.

"After Rojo was arrested, he was asked by Pat. Maniquiz to empty his pockets. The marked money (Exhibit ‘G’) was one of those brought out from the front right pocket of his (Rojo) pants. Maniquiz took it while their informant delivered the marijuana to Carbonel. Pat. Zaldy Papa later affixed his initials (Exhibit ‘G-1’) on the P10.00 bill while Pat. Zamora placed his initials ‘EZ’ and date (Exhibit ‘F-1-A’) on the rolling paper inside the plastic tea bag containing dried marijuana leaves to insure that they were the very same articles involved in the ‘buy-bust’ operations conducted herein." 5

The theory of the defense is as follows:jgc:chanrobles.com.ph

"Defense evidence tends to show that at around 12:30 o’clock in the morning of April 15, 1987, appellant was in front of his house conversing with his relatives relative to the passion-week reading (pabasa) which he failed to attend. After their conversation, his relatives left to eat and proceeded to the bakery. Soon after he was left alone, two men approached him. Asked who they were by the appellant and what crime did he commit, he was nevertheless frisked and told to stand. They collared him and accused him of being a drug pusher. Maintaining his innocence, he was brought to their service vehicle parked not far away. Because he does not know of any offense which he has committed, appellant struggled to free himself. While he was frisked by the 2 policemen, Pat. Maniquiz placed the marked money (Exh. "G") in his pocket. Then again Pat. Maniquiz showed him a small tea bag of marijuana (Exh. "F-1"). They then forced him to board their vehicle and appellant was accompanied by his uncle Conrado Gabriel to Precinct 5. The policemen were asking P5,000.00 in consideration of the appellant’s release which amount was later on reduced to P3,000.00. Appellant denied selling marijuana." 6

The question now before Us is — in the light of the conflicting evidence presented, is there sufficient evidence beyond reasonable doubt to sustain a conviction? The charge is a grave one that carries with it a penalty of reclusion perpetua. Hence, the evidence must be evaluated with extreme care.

It is a fundamental rule that a judgment of conviction must be predicated on the strength of the evidence for the prosecution and not on the weakness of the evidence for the defense. The trial court cannot merely depend upon probabilities and improbabilities of alleged events. It must determine whether or not the alleged events actually happened based on the evidence adduced. In this case, the alleged entrapment must be established by clear and convincing evidence.

The theory of the prosecution is that the informant acted as buyer in the entrapment proceedings. However, the alleged informant was never presented as a witness. His identity was never revealed because it was supposed to be confidential information.

The evidence of the prosecution on the matter of the participation of the informant as alleged buyer in the entrapment proceedings is contradictory. Thus, according to the testimony of witness Sgt. Jimmy Carbonel, the person who acted as buyer in the entrapment proceedings was Patrolman Francisco Maniquiz, with Patrolmen Ramon Alferos, Danilo Peltra and Rizal Papa as arresting officers, and Patrolman George Balatbat in charge of perimeter security. He testified as follows:jgc:chanrobles.com.ph

"DIRECT EXAMINATION BY THE FISCAL:jgc:chanrobles.com.ph

"Q. Will you tell the court the names of the members of your team who participated in this operation and their respective participation?

"A. The one who acted as poseur-buyer was Pat. Francisco Maniquiz with Pat. Ramon Alfero and Pat. Danilo Peltra and Rizal Papa as the arresting officers and myself, Pat. George Balatbat as perimeter security (sic).

"Q. How about your informant, did he have any participation?

"A. He went with the poseur-buyer in the area of the suspect and conducted the buy-bust operation.

"Q. What exactly did the poseur-buyer, Pat. Francisco Maniquiz do, if you know?

"A. With the assistance of the informant who transacted the negotiation and after a few minutes the buy-bust operation was already conducted and the suspect was arrested.

x x x

"Q. Why was he arrested?

"A. He was arrested because of selling one tea bag of a special marijuana.

"Q. To whom?

"A. To the informant with the poseur-buyer." (Emphasis supplied.) 7

On the other hand, prosecution witness Patrolman Francisco Maniquiz testified otherwise in that the informant was the one who acted as buyer in the entrapment proceedings. His testimony follows:jgc:chanrobles.com.ph

"DIRECT EXAMINATION BY THE FISCAL:jgc:chanrobles.com.ph

"Q. What else did you do after you saw . . . you allegedly saw the accused Rojo transacting with persons?

"A. We then had a briefing in the jeep and we told the informant what he will do.

"Q. What happened next?

"A. Then Sgt. Carbonel gave the marked money to him and he will buy to the pusher. Aureo Rojo, . . . in order for him to buy marijuana.

"Q. And how about you, what did you do?

"A. When the informant was already buying we positioned ourselves at the place.

"Q. Where specifically is this place where your informant and the accused allegedly had a transaction?

"A. In front of the house of Aureo Rojo.

"Q. Where is this?

"A. Barreto street.

"Q. Where? What district or city?

"A. Pandacan, Manila.

"Q. And where were you at the time when the accused allegedly handed marijuana to your informant?

"A. Around 5 to 7 meters." (Emphasis supplied.) 8

Obviously, there is a fatal flaw in the prosecution’s evidence on how the alleged entrapment proceedings took place. The so-called informant was never presented as a witness and he was never identified. His having acted as buyer in the alleged entrapment proceedings was not established as a fact by evidence beyond reasonable doubt because of the contradictory evidence as to who really posed as buyer. There is now even a doubt as to whether or not the entrapment proceedings ever took place at all.

In a prosecution for violation of Section 4, Article II of Republic Act. No. 6425 as amended by Presidential Decree No. 1675 which penalizes any person who, unless authorized by law, shall sell, administer, deliver, give away to another, distribute, dispatch in transit or transport any prohibited drug, or shall act as a broker in any such transactions, the prosecution must be able to establish by clear and convincing evidence that the person charged at a particular time, date and place committed any of said unlawful acts.

In this particular case, the witnesses for the prosecution who were members of the police team at the time of the alleged "buy-bust operation," particularly Sgt. Carbonel and Pat. Balatbat, were in their jeep parked at Beata street, some 100 meters away from the scene. Pat. Alferos was 10 meters away from the informant and the appellant while Pat. Maniquiz was about seven (7) meters away and the others stayed at a far distance so as not to arouse suspicion. It was only after the informant gave the signal by scratching the left side of his head with his left hand to indicate that the marijuana was already handed to him and that he in turn gave the money to the appellant that the said police officers converged and arrested the Appellant.

These are the facts as found by the trial court which show that none of the prosecution witnesses actually saw the appellant deliver the alleged bag of flowering tops of marijuana which was allegedly sold to the informant. It also indicates that they did not see the informant pay the alleged consideration of the sale with a 10-peso bill. They just assumed that the transaction was consummated upon a signal from the informant. There is, therefore, no direct evidence, much less conclusive proof, to establish the alleged unlawful sale of marijuana being pinned on the Appellant.

If truly there was such an entrapment that was undertaken in this case, the informant would be the best witness for the prosecution. Inasmuch as he was not presented, the case of the prosecution must fall. The police officers and the prosecution aver that they did not present the informant as his identity was a confidential matter. If the purpose is to conceal the identity of the informant from the appellant and for the personal security of said informant, the said objective cannot be attained by withholding the testimony of the informant during the trial. The informant must be well known if not familiar to the appellant otherwise the latter would not readily sell the marijuana to the former. Thus, the identity of the informant was known to the appellant all the time and when immediately thereafter the appellant was apprehended and arrested by the police officers and the informant was not similarly taken into custody, the only logical conclusion is that the appellant right then and there found out that he was the victim of an entrapment and that the informant was in collusion with the police authorities.

There is, therefore, no reason why the prosecution could not and did not present the informant as a prosecution witness. He is the best witness to establish the charge against the appellant who denies the charge. 9 As the appellant correctly observed, such a failure to present the informant as a witness gives rise to the presumption that such evidence wilfully suppressed would be adverse if produced. 10

On the other hand, assuming that the testimony of Sgt. Carbonel is correct in that the poseur-buyer was not the informant but Pat. Francisco Maniquiz, then with more reason the theory of entrapment of the prosecution become even more incredible. The appellant did not know Pat. Maniquiz. It is improbable that the appellant would risk selling marijuana to a person he met for the first time.

Moreover, the transaction was allegedly consummated in a public street within the view of the public including some teenagers. The street light was bright and shining. If the appellant was really a drug pusher, he would not have so openly sold marijuana in such a public place within the view of so many people. He would have attempted to conceal the transaction. It allegedly transpired in front of his house. Hence appellant could have asked the buyer to go up his house or behind the house if only to insure its secrecy.

In the light of the shaky evidence of the prosecution, the defense of the appellant consisting not only of a categorical denial of the imputation against him but an assertion that it was a frame-up and that the policemen attempted to extort money from him becomes significant.

Conrado Gabriel, uncle of the appellant, testified that immediately after the arrest of the appellant by the policemen, they asked the arresting policemen what crime the appellant committed and they were told that he was a drug pusher and that if they wanted his release, they must raise the amount of P5,000.00: that he went home to raise the amount but was only able to bring P2,000.00; that the policemen refused to accept the amount and insisted on P3,000.00 instead; and that he did not remember the name of said policemen.

The appellant corroborates the testimony of his uncle in that when he was locked inside the cell, his uncle talked to the arresting officer after which he was told by his uncle that they were asking for P5,000.00 as consideration for his release. He told the policemen that they could not afford such amount. This prompted Sgt. Carbonel to lower their demand to P3,000.00. The haggling took place inside the cell of Police Precinct No. 5.

Natalia Gabriel, mother of the appellant, also testified that in the early morning of April 16, 1987, Conrado Gabriel returned and told her that the arresting policemen were demanding money for her son’s release; that she went to the police headquarters that morning and learned that the arresting policemen were Sgt. Carbonel, Patrolmen Balatbat and Maniquiz; that they haggled for a lesser amount and she was advised to talk to the police investigator, Pat. Eliseo Zamora; and that after several days she was able to talk to Zamora who told her it was too late because the case against her son was already filed.

The Court is disturbed by this evidence tending to show that members of the law enforcement agencies who figured in this case tried to extort money from the appellant and his family. Although it is true as observed by the court a quo that no complaint was filed against said policemen by the appellant, it should be understandable not only because the transaction was not consummated but that appellant and his relatives would certainly think twice before filing such complaint against the police.

This matter should be inquired into. Three witnesses attest to the incident. Said law enforcement agents should be held liable if proven to be true. By the same token they should be given a chance to clear their names, if it is without basis.

It is about time that shady characters in police uniform should be weeded out.

There can be no dispute that drug pushing is a serious offense that should be relentlessly ferreted out and the persons responsible prosecuted. They are peddlers of destruction. It cannot be denied that one of the most effective means of their apprehension is through a "buy-bust" operation with the assistance of an informant. As above discussed, in such an instance, the prosecution could easily prove its case with the informant as its witness.

On the other hand, it is a matter of fact that opium, marijuana or any other prohibited drug can easily be planted by some corrupt law enforcement agents on innocent victims as a convenient vehicle of extortion. And many such persons would rather buy peace than risk a prosecution however false it maybe.

In any case the courts must be vigilant. A handy defense in such cases is that it is a frame-up and that the police attempted to extort from the accused. Extreme caution must be exercised in appreciating such defense. It is just as easy to concoct as a frame-up. At all times the police, the prosecution and the courts must be always on guard against these hazards in the administration of criminal justice.

WHEREFORE, the decision appealed from is hereby REVERSED and SET ASIDE and another judgment is hereby rendered ACQUITTING appellant Aureo Rojo y Gabriel, with costs de oficio. Let a copy of this Decision be furnished the National Police Commission (NAPOLCOM) for such appropriate action as may be deemed proper against the members of the law enforcement agency alluded to in this case.

SO ORDERED.

Narvasa, Griño-Aquino and Medialdea, JJ., concur.

Separate Opinions

CRUZ, J., concurring:chanrob1es virtual 1aw library

I concur in the acquittal insofar as it is based on the finding that there is not enough evidence to sustain a conviction. With regret, however, I am unable to agree that the presentation of the supposed informer at the trial was indispensable to the cause of the prosecution. The decision itself recognizes the reason for not exposing him but declares just the same that he should have been called to testify. It says the sale to him would have been believable, presuming he was a friend of the accused, but not to the police officers, who were total strangers. Perhaps so. But what to me was fatal to the People was its own evidence that the sale took place in a brightly-lit public street in plain view of some other people and just in front of the defendant’s house. That is what I find implausible. Even supposing that the accused was really a drug pusher, I do not think he would have made the sale in such a place and such circumstances, not even if the informer was a friend. That flaw rendered more credible the charge of police extortion, which broke the camel’s back.

Endnotes:

1. Page 65, Rollo.

2. Judge Procoro J. Donato of Branch 12 of the Regional Trial Court of Manila wrote the decision.

3. Page 58, Rollo.

4. Page 71, Rollo.

5. Page 67-70, Rollo.

6. Page 4, Appellant’s Brief.

7. T.S.N. dated November 4, 1987, page 4; page 6, Appellant’s Brief.

8. T.S.N. dated December 15, 1987, page 4.

9. People v. Ale, 145 SCRA 50, at 62 (1986).

10. Section 5(e), Rule 131, Rules of Court.

G.R. No. 84975 July 5, 1989 - ZENAIDA GALINDEZ, ET AL. v. RURAL BANK OF LLANERA, INC., ET AL.

2012-11-11T16:53:05+00:00

SECOND DIVISION

[G.R. No. 84975. July 5, 1989.]

ZENAIDA GALINDEZ, CAROLINA JUNIO AND GERONIMO SERNADILLA, Petitioners, v. RURAL BANK OF LLANERA, INC., NATIONAL LABOR RELATIONS COMMISSION, Respondents.

[G.R. No. 85211. July 5, 1989.]

RURAL BANK OF LLANERA (N. E.), INC., Petitioner, v. DEPARTMENT OF LABOR AND EMPLOYMENT AND ZENAIDA GALINDEZ, Respondents.

Carlito T. Frias for the Bank.

Victor W. Galang for Zenaida Galindez.

SYLLABUS

1. REMEDIAL LAW; ACTIONS; A FINAL AND EXECUTIVE JUDGMENT GENERALLY CANNOT BE ALTERED OR MODIFIED; EXCEPTIONS. — The general rule is, indeed, that once a judgment becomes final and executory, said judgment can no longer be disturbed, altered, or modified. That principle, however, admits of exceptions as in cases where, because of supervening events, it becomes imperative, in the higher interest of justice, to direct its modification in order to harmonize the disposition with the prevailing circumstances (Seavan Carrier, Inc., v. GTI Sportswear Corp., No. L-65953, July 16, 1985, 137 SCRA 580) or whenever it is necessary to accomplish the aims of justice (Pascual v. Tan, 85 Phil. 164 [1949]; Central Textile Mills, Inc., v. United [CMC] Textile Workers Union-TGWF, No. L-51077, December 27, 1979, 94 SCRA 883).

2. ID.; ID.; ID.; CASE AT BAR. — In the case at bar, the modification of the judgment, rendered by the Labor Arbiter on 4 May 1983, is warranted by the fact that the Bank had been placed under liquidation thereby permanently foreclosing any possibility for the Bank to resume its business. Reinstatement of Galindez, as Cashier, therefore, was rendered inappropriate considering the Bank’s eventual closure and that the position of Cashier has been abolished as a result of liquidation.

3. LABOR AND SOCIAL LEGISLATION; LABOR CODE; SEPARATION PAY; GRANT THEREOF PROPER WHERE REINSTATEMENT IS NO LONGER FEASIBLE. — The grant of separation pay, which was awarded in lieu of reinstatement, was likewise proper were the establishment has closed or ceased operations or where his former position no longer exists at the time of reinstatement not attributable to the fruit of the employer. (Section 4(b), Rule 1, Book VI of the Omnibus Rules Implementing the Labor Code)

4. ID., ID.; BACKWAGES; NOT IN COMPATIBLE WITH REINSTATEMENT. — Backwages and reinstatement are two different forms of relief. In Santos v. NLRC (No. L-76721, September 21, 1987, 154 SCRA 166), it was squarely held: "The two forms of relief are distinct and separate, one from the other. Though the grant of reinstatement commonly carries with it an award of backwages, the inappropriateness or non-availability of one does not carry with it the inappropriateness or non-availability of the other."cralaw virtua1aw library

5. MERCANTILE LAW; BANKING; CLAIMS AGAINST A BANK PLACED UNDER RECEIVERSHIP MUST BE COURSED THROUGH FORMAL CLAIMS WITH THE LIQUIDATION COURT. — The Bank contends that the award of separation pay (for Galindez, Junio and Sernadilla), and backwages (for Galindez) should be enforced through formal claims with the Liquidation Court. We agree, considering that the Regional Trial Court, Cabanatuan City, Branch 23, is now such a Court by virtue of its Order, dated 13 July 1983, in connection with a "Petition for Assistance in Liquidation" filed by the Central Bank before it. This is but in keeping with the cardinal rule against multiplicity of suits and in order that the assets of the Bank may not be unduly depleted to the prejudice of other creditors.

D E C I S I O N

MELENCIO-HERRERA, J.:

Arising from the same facts and involving the same issues and questions of law, these separate Petitions were ordered consolidated in this Court’s Resolution of 9 November 1988.

The undisputed facts follows:chanrob1es virtual 1aw library

Zenaida Galindez, petitioner in G.R. No. 84975, was, since March 1979, the Cashier of the Rural Bank of Llanera, Inc. (Nueva Ecija), which is the petitioner in G.R. No. 85211 (the Bank, for short).

Sometime in January of 1981, the said Bank was placed under receivership by the Central Bank, with a Receiver designated to take over the management of the Bank as well as its reorganization.

On 3 April 1981, the Receiver applied for clearance with the Regional Office No. III, Nueva Ecija Labor Office, at Cabanatuan City (docketed as RO3 NELO Case No. 700), to terminate the services of Zenaida Galindez (Galindez, for brevity) and two of her co-employees, namely, Carolina Junio and Geronimo Sernadilla, based on retrenchment. Prior to that, however, or on 1 April 1981, notice of termination was sent to them informing them of the termination of their services effective 16 April 1981.

All three, namely, Galindez, Junio and Sernadilla opposed the application for clearance on 20 April 1981. On 4 May 1981 the Nueva Ecija Labor Office recommended the approval of the application and the dismissal of the employees’ opposition. The case was thereupon referred to the Arbitration Branch, Region 3, San Fernando, Pampanga.

Pending resolution of the Bank’s application for clearance, the Central Bank filed a "Petition for Assistance in the Liquidation of the Bank" with the Regional Trial Court of Cabanatuan City, Branch 23, on 23 August 1982. This was granted by the Trial Court on 13 July 1983.

In the interim, or on 4 May 1983, the Labor Arbiter rendered a Decision denying the Bank’s application for clearance to terminate Galindez and, instead, ordered her reinstatement. The dispositive portion of that Decision reads:jgc:chanrobles.com.ph

"WHEREFORE, the application for clearance is hereby denied and the applicant Rural Bank of Llanera is ordered to reinstate oppositor Zenaida Galindez to her former position as Cashier without loss of seniority rights and privileges, with full backwages from April 16, 1981 up to her actual date of reinstatement, including all the mandatory benefits provided by law.

"Applicant is further ordered to pay separation pay benefits to oppositors Carolina Junio and Geronimo Sernadilla equivalent to one (1) month salary for every year of service.

"SO ORDERED." (p. 22, Rollo, G.R. No. 84975).

No appeal having been filed within the reglementary period, the Labor Arbiter issued a Writ of Execution.

On 22 August 1983, the Bank filed a "Petition to Alter or Modify Judgment" which, however, was denied by the Labor Arbiter on 16 September 1983 on the principal ground that the Decision of 4 May 1983 had become final and executory.

On 7 October 1983, the Bank interposed an appeal to the NLRC by way of a "Notice of Appeal with Injunction to Stay Execution" of the Labor Arbiter Decision of 4 May 1983.

On 24 August 1984, the NLRC, in an en banc Resolution, dismissed the appeal holding that the Decision of 4 May 1983 had already become final and executory.

On 28 November 1984, the Labor Arbiter issued an Alias Writ of Execution commanding the Sheriff to reinstate petitioner and to collect the sum of P63,707.20 the newly computed liability of the Bank. However, the said Writ could not be enforced because the Regional Trial Court, at Cabanatuan City, Branch 23, issued a Restraining Order suspending its enforcement on the ground that the monetary claims against the Bank should be coursed through the said Court as the Liquidation Court.

On 28 January 1985, the Bank filed with the Labor Arbiter a "Petition for Relief from Judgment" principally on the ground that execution could no longer issue because the Bank was already in the process of liquidation. Said Petition was denied by the Labor Arbiter for lack of merit on 30 January 1985. The Bank appealed the Order to the NLRC on 16 February 1985.

On 8 July 1986, since almost two (2) years had elapsed without any implementation of the Decision of the Labor Arbiter and the NLRC (en banc), Galindez filed a "Petition for Mandamus with Damages" before the Regional Trial Court of Cabanatuan City, Branch 29 (Spec. Procs. No. 1936), seeking reinstatement to her former position as Cashier and payment of her backwages and mandatory benefits. The Bank filed its Opposition thereto on 6 August 1986.

On 2 December 1986, said Trial Court issued an Order disposing as follows:jgc:chanrobles.com.ph

"WHEREFORE, upon the filing of a bond in the sum of P106,817.00 which shall answer for all damages that may be sustained by the respondent Rural Bank of Llanera, Inc., in case this petition is finally decided in its favor, let a peremptory writ of mandamus issue to implement this order.

"SO ORDERED." (p. 38, Rollo of G.R. No. 84975).

On 29 January 1988, the Court of Appeals, Fifth Division, to which said Order was elevated, rendered a Decision in CA-G.R. Nos. 12136 and 11047-SP, the pertinent portion of which reads:jgc:chanrobles.com.ph

". . . What the Court a quo acted upon is within the exclusive and original jurisdiction of the Labor Commission and not with the Regional Trial Court. In fact, a Decision having been rendered already by the NLRC, appeal therefrom, if still available, should be by petition for certiorari with the Supreme Court to review the Decision of the NLRC. Neither the Regional Trial Court, nor even this Court can review the decisions issued under the Labor Code (No. 16-E of the Interim Rules of Court; Callanta v. Carnation Philippines, Inc., 145 SCRA 268)." (p. 10, Rollo of G.R. No. 84975)

On 10 May 1988, acting on the appeal of the Bank from the Order of the Labor Arbiter, dated 30 January 1985, the NLRC, through its Second Division, issued the questioned Resolution modifying the Labor Arbiter’s Decision of 4 May 1983. The pertinent portion of the assailed Resolution reads:jgc:chanrobles.com.ph

"Since reinstatement is no longer possible due to the liquidation of the bank, oppositor-appellee should be awarded separation pay equivalent to one-half month salary for every year of service.

"WHEREFORE, the May 4, 1983 decision of the Labor arbiter is Modified, the applicant Rural Bank is ordered to pay oppositor-appellee separation pay equivalent to one-half month salary for every year of service, a fraction of at least six months being considered as one whole year, in lieu of reinstatement. The award for backwages is hereby limited to three (3) years without any qualification or deduction. No other pronouncements.

"SO ORDERED." (p. 34, Rollo of G.R. No. 84975)

Motions for Reconsideration filed by both parties having been denied, Galindez and the Bank filed these separate Petitions for Certiorari with this Court, alleging grave abuse of discretion on the part of the NLRC. We resolved to give due course.

The issues raised by the parties may be summed up thus:chanrob1es virtual 1aw library

1. Whether or not the NLRC acted with grave abuse of discretion in modifying a final and executory judgment of the Labor Arbiter;

2. Whether or not backwages can be awarded without the grant of reinstatement; and

3. Whether or not the award of backwages and separation pay can be enforced directly with the bank or should be coursed through the Court taking cognizance of the liquidation proceedings against the Bank.

Galindez claims grave abuse of discretion on the part of the NLRC in that the NLRC cannot modify the Decision of the Labor Arbiter and affirmed by the NLRC en banc, which had attained finality, and that the only ministerial duty of the Labor Arbiter is to execute it.

The general rule is, indeed, that once a judgment becomes final and executory, said judgment can no longer be disturbed, altered, or modified. That principle, however, admits of exceptions as in cases where, because of supervening events, it becomes imperative, in the higher interest of justice, to direct its modification in order to harmonize the disposition with the prevailing circumstances (Seavan Carrier, Inc., v. GTI Sportswear Corp., No. L-65953, July 16, 1985, 137 SCRA 580) or whenever it is necessary to accomplish the aims of justice (Pascual v. Tan, 85 Phil. 164 [1949]; Central Textile Mills, Inc., v. United [CMC] Textile Workers Union-TGWF, No. L-51077, December 27, 1979, 94 SCRA 883).

In the case at bar, the modification of the judgment, rendered by the Labor Arbiter on 4 May 1983, is warranted by the fact that the Bank had been placed under liquidation thereby permanently foreclosing any possibility for the Bank to resume its business. Reinstatement of Galindez, as Cashier, therefore, was rendered inappropriate considering the Bank’s eventual closure.

As correctly pointed out by the Solicitor General, another reason which militates strongly against Galindez’s reinstatement is the fact that the position of cashier has been abolished as a result of liquidation. In point is the ruling in Pizza Inn v. NLRC, G.R. No. 74531, June 28, 1988, reading:jgc:chanrobles.com.ph

"Reinstatement presupposes that the previous position from which one had been removed still exists or there is an unfilled position more or less of similar nature as the one previously occupied by the employee. Admittedly, no such position is available. Reinstatement therefore becomes a legal impossibility. The law cannot exact compliance with what is impossible."cralaw virtua1aw library

It is true that in the Order of the Regional Trial Court of Cabanatuan City, Branch 29, dated 2 December 1986, it disbelieved that the position of Cashier had been abolished stating that one "Mrs. Aurora Lazaro signed the receipts as Bookkeeper-Cashier of the respondent bank and collected certain amounts from the bank borrowers" (p. 4 Order, Sp. Procs. No. 1936). As is obvious, however, the two positions were already merged thereby showing that the Bank was, in fact, retrenching its employees in the process of liquidation. That merger cannot be construed to mean that the position of Cashier was being retained.chanrobles virtual lawlibrary

Reinstatement having been rendered non-available, the modification of the Labor Arbiter’s Decision by the NLRC (Second Division) by the deletion of the same, was thus in order. A circumstance had transpired which rendered execution of the said Decision legally impossible. The separation pay, which was awarded in lieu of reinstatement, was likewise proper, Section 4(b), Rule 1, Book VI of the Omnibus Rules Implementing the Labor Code being explicit in that:jgc:chanrobles.com.ph

"(b) In case the establishment where the employee is to be reinstated has closed or ceased operations or where his former position no longer exists at the time of reinstatement for reasons not attributable to the fault of the employer, the employee shall be entitled to separation pay equivalent to at least one month salary or to one month salary for every year of service, whichever is higher, a fraction of at least six months being considered as one whole year."cralaw virtua1aw library

As to the second issue, it is the Bank’s position that entitlement to backwages necessitates the grant of reinstatement. That is not so. They are two different forms of relief In Santos v. NLRC (No. L-76721, September 21, 1987, 154 SCRA 166), it was squarely held:jgc:chanrobles.com.ph

"The two forms of relief are distinct and separate, one from the other. Though the grant of reinstatement commonly carries with it an award of backwages, the inappropriateness or non-availability of one does not carry with it the inappropriateness or non-availability of the other."cralaw virtua1aw library

Besides, the modification by the NLRC (Second Division) of the Labor Arbiter’s Decision of 4 May 1983 was limited to the matter of reinstatement. The original award of backwages had to remain as there was no extraordinary circumstance which rendered the execution of backwages impossible or impractical. The NLRC, however, correctly reduced it to three (3) years following doctrinal jurisprudence.

We come now to the third and final issue. The Bank contends that the award of separation pay (for Galindez, Junio and Sernadilla), and backwages (for Galindez) should be enforced through formal claims with the Liquidation Court. We agree, considering that the Regional Trial Court, Cabanatuan City, Branch 23, is now such a Court by virtue of its Order, dated 13 July 1983, in connection with a "Petition for Assistance in Liquidation" filed by the Central Bank before it. This is but in keeping with the cardinal rule against multiplicity of suits and in order that the assets of the Bank may not be unduly depleted to the prejudice of other creditors.

"The fact that the insolvent bank is forbidden to do business, that its assets are turned over to the Superintendent of Banks, as a receiver, for conversion into cash, and that its liquidation is undertaken with judicial intervention means that, as far as lawful and practicable, all claims against the insolvent bank should be filed in the liquidation proceedings. The judicial liquidation is intended to prevent multiplicity of action against the insolvent bank" (Hernandez v. Rural Bank of Lucena, Inc., January 10, 1978, No. L-29791, 81 SCRA 75).

So also was the rule laid down in the case of Lipana v. Development Bank of Rizal (G.R. No. L-73884, September 24, 1987, 154 SCRA 257) that:jgc:chanrobles.com.ph

"In the instant case, the stay of execution of judgment is warranted by the fact that the respondent bank was placed under receivership. To execute the judgment would unduly deplete the assets of respondent bank to the obvious prejudice of other depositors/creditors, since, as aptly stated in Central Bank of the Philippines v. Hon. Morfe (63 SCRA 114), after the Monetary Board has declared that a bank is insolvent and has ordered it to cease operations, the Board becomes the trustee of its assets for the equal benefit of all the creditors, including the depositors. The assets of the insolvent banking institution are held in trust for the equal benefit of all creditors, and after its insolvency, one cannot obtain an advantage or preference over another by an attachment, execution, or otherwise."cralaw virtua1aw library

x x x

"The time of the filing of the complaint is immaterial. It is the execution that will obviously prejudice the other depositors and creditors. Moreover, as stated in the said Morfe case, the effect of the judgment is only to fix the amount of debt, and not to give priority to other depositors and creditors."cralaw virtua1aw library

WHEREFORE, the Resolution of the National Labor Relations Commission (NLRC), through its Second Division, dated 10 May 1988, which modified the Labor Arbiter’s Decision of 4 May 1983, is hereby AFFIRMED. The monetary awards adjudged therein, however, must be enforced through formal claims filed with the Regional Trial Court, Cabanatuan City, Branch 23, which is taking cognizance of the liquidation proceedings of the Rural Bank of Llanera, Inc. No costs.

SO ORDERED.

Paras, Padilla, Sarmiento and Regalado, JJ., concur.

G.R. No. 85595 July 5, 1989 - MARIA ARCIAGA VDA. DE UMALI, ET AL. v. COURT OF APPEALS, ET AL.

2012-11-11T16:53:05+00:00

FIRST DIVISION

[G.R. No. 85595. July 5, 1989.]

MARIA ARCIAGA VDA. DE UMALI & HEIRS OF THE LATE GREGORIO UMALI, Petitioners, v. THE HONORABLE COURT OF APPEALS & METEOR COMPANY, INC., Respondents.

Agustin V. Velante, for Petitioners.

Zosimo de Mesa for Private Respondents.

SYLLABUS

1. CIVIL LAW; OBLIGATIONS AND CONTRACTS; FAILURE TO COMPLY WITH AN OBLIGATION WARRANTS RESCISSION OF CONTRACT. — Meteor has no one to blame but itself for its failure to comply with its obligation under paragraph 2(b) of the "Kasunduan" to secure payment of the balance of the purchase price within 120 days after the termination of Civil Case No. 8973 in favor of the Umalis. Payment of the first 25% of the price within the time frame agreed upon was a condition sine qua non for the transfer of the property by the Umalis to Meteor under a Deed of Sale with Mortgage. Since Meteor failed to pay within the stipulated period, the Umalis were released from the bargain. They are entitled to the rescission of the "Kasunduan" with respect to the remaining unsold lots covered by their TCT Nos. 13517 and 13616.

D E C I S I O N

GRIÑO-AQUINO, J.:

The petitioners pray this Court to overturn the decision dated September 13, 1988 of the Court of Appeals in CA-G.R. CV No. 12681, entitled "Meteor Company. Inc., plaintiff-appellee v. Sps. Gregorio Umali and Maria Arciaga, defendants-appellants," affirming in toto the decision dated January 27, 1986 of the Regional Trial Court of Rizal in Civil Case No. 3705 which ordered the parties to comply with the provisions of the contract to sell ("Kasunduan nang Pagbibilihan") dated December 21, 1967 which the late Gregorio Umali and his wife, petitioner Maria Arciaga Vda. de Umali, made in favor of the private respondent, Meteor Company, Inc., a real estate developer.

The dispositive part of the trial court’s decision dated January 27, 1986 reads as follows:jgc:chanrobles.com.ph

"WHEREFORE, judgment is hereby rendered ordering the defendants to execute, upon payment by the plaintiff to them of the amount equivalent to 25% of the total purchase price agreed upon in the ‘KASUNDUAN NANG PAGBIBILIHAN’ (Exh. A) dated December 21, 1967, the Deed of Sale with Mortgage or ‘BILIHAN NA MAY SANLA’ adverted to in paragraph 3 of Exhibit A, covering the parcels of land described in Transfer Certificates of Title Nos. 13517 and 13616 of the Registry of Deeds of Rizal, under the terms, conditions and stipulations agreed upon by the plaintiff and the spouses Gregorio Umali and Maria Arciaga as contained and delineated in Exhibit A.

"The defendants are further ordered to pay, jointly and severally, to the plaintiff the amount of P5,000.00 as attorney’s fees, aside from costs of suit." (pp. 36-37, Rollo.)

The spouses Gregorio Umali and Maria Arciaga were the registered owners of three (3) parcels of land with a total area of four (4) hectares more or less, covered by TCTs Nos. 13517, 13616, and 13224 of the Rizal Registry. These parcels of land adjoin a subdivision of Meteor Company, Inc.

On December 21, 1967, the Umali spouses signed a "Kasunduan nang Pagbibilihan" (Exh. A) in favor of Meteor Company, Inc. agreeing to sell those lots to Meteor for the price of P10 per square meter, deducting the portion subject of a right-of-way which they had earlier sold to Meteor for the construction of an access road to its adjoining subdivision. Meteor made a downpayment of P5,000.00. The balance of the price would be paid in four (4) installments after the termination of Civil Case No. 8973 which was filed by Eligio Hernandez against the Umalis in the Court of First Instance of Rizal involving the parcels of land subject of the "Kasunduan." Paragraphs 2(b), 3 and 4 of the agreement which are crucial to this case provided thus:jgc:chanrobles.com.ph

"2. . . .

"‘b) Isang daan at dalawangpung araw (120) simula sa malinis, matapos at malagay na sa tahimik ang mga lupang nabanggit dahil sa ang asuntong nabanggit at pasyahan na nang pangkatapusan (final) nang Hukuman para sa mga NAGBIBILE, ang BUMIBILE ay muling magbabayad sa NAGBIBILE nang halagang dalawangput limang porciento (25%) nang Kabuuang halaga nang lupa, ibabawas ang P5,000.00 na ibayad na, at patuloy ang pagbabayad nang BUMIBILE sa NAGBIBILE sa tuwing ika-anim (6) na buwan, sa halagang 25% nang kabuuan halagang nabanggit hanggang sa matapusan ito.

"3. Na sa pagbayad nang katimbang nang 25% sa unang pagkakataon nabanggit sa itaas, ang NAGBIBILE at BUMIBILE ay lalagda nang BILIHAN NA MAY SANLA (Deed of Sale with Mortgage), na ililipat ang lupa sa BUMIBILE at ito naman ay ipananagot ang lupa din ito sa NAGBIBILE sa utang natitira;

"4. Na ang BUMIBILE ay maaring paghatihatiin ang lupa at gawin nang isang subdivision upang ipagbile sa publico, at bagamat ito’y nakasangla sa NAGBIBILE, ay sa tuwing magbabayad itong BUMIBILE ay halagang P10.00 bawat metro cuadrado ay ilalabas ang sangla ang loteng piliin na BUMIBILE (Partial Release of Mortgage). Ang lahat na naibayad nang BUMIBILE ay pagbabatayan sa paglabas nang mga lote sa sangla." (pp. 40-41, Rollo.)

Subsequently, it was discovered that the third parcel of land covered by TCT No. 13224 was not after all involved in Civil Case No. 8973, so the Umalis deeded the same to Meteor for the sum of P12,245. It is now titled in the name of Meteor.

On October 3, 1969, the Umalis signed a "Pagpapatibay" acknowledging and confirming the transactions with Meteor.

On November 22, 1976, Meteor’s counsel wrote a letter to the Umalis reminding them to "inform us as to what is now the status of said case (Civil Case No. 8973) so that in the event that the case is terminated in your favor we have to implement the agreement mentioned." (pp. 16-17, Rollo.) The Umalis received the letter on November 30, 1976, but they did not answer it.

On April 9, 1980, Meteor sent another letter on the same subject and affirming that "soon as the case is terminated in your favor, we will immediately comply with the obligation incumbent upon the Meteor Company, Inc." (p. 17, Rollo.) The Umalis rejected personal service of the letter on them, so it was sent by registered mail and received for them by Natividad Umali. Again they did not respond.

The ominous silence of the Umalis should have put Meteor on guard that the Umalis had lost interest in consummating the "Kasunduan." But Meteor inexplicably took no steps to find out for itself the status of Civil Case No. 8973 on which depended the consummation of their deal with the Umalis.

Ultimately, Civil Case No. 8973 was resolved in favor of the Umalis by the Court of Appeals in its decision of May 16, 1980 which became final on June 13, 1980.

On November 12, 1980, one month after the 120-day period had expired, Meteor discovered that Civil Case No. 8973 had already been decided by the Court of Appeals in favor of the Umalis on May 16, 1980 (CA-G.R. No. 50909-R) so, Meteor hastily advised the Umalis thus:jgc:chanrobles.com.ph

"Supplementing our letter to you dated April 5, 1980 which you received on April 10, 1980, we have followed the progress of the case involving the parcels of land entitled Eligio Fernandez, Plaintiff- Appellant versus Gregorio Umali and Maria Arciaga, Defendants-Appellees in the Court of Appeals which appears to have been decided since May 16, 1980, affirming your rights as owners thereof.

"In accordance with the agreement (Kasunduan ng Pagbibilihan) dated December 21, 1967 which you executed for consideration with my client Meteor Company, Inc., you are supposed to sell to them the properties mentioned therein under the terms and conditions set forth in said agreement soon as the case is terminated. In fact, one of the parcels of land which was not litigated covered by TCT No. 13Z24 has been conveyed by you in favor of same client.

"In the event, that the records of the case have already been remanded to the court of origin, we demand that you immediately notify us so we can pay you the equivalent 25% of the balance in accordance with the agreement.

"Your refusal to comply to the above will leave us no other recourse but to bring this matter to the proper court and hold you responsible for whatever damages my clients may incur in the enforcement of their rights under the agreement." (pp. 46-47, Rollo.)

As might be expected, the Umalis ignored said letter.

Meteor filed an action for specific performance with damages against the Umali spouses (later Gregorio Umali, upon his death, was substituted by his children and grandchildren) which was docketed as Civil Case No. 3705 in the Regional Trial Court of Rizal, Branch 148, in Makati. The Umalis argued that the buyer’s failure to comply with paragraph 2(b) of their agreement had released them from its bind.

As previously stated, the decision of the trial court upholding the "Kasunduan" was affirmed by the Court of Appeals, hence, this petition for review by the widow Maria Arciaga Vda. de Umali and her children, raising the following issues:chanrob1es virtual 1aw library

1. Whether or not private respondent has complied with its obligation under Paragraph 2(b) of the "Kasunduan ng Pagbibilihan" or Contract to Sell (Exh. A);

2. Whether or not private respondent’s three (3) letters (Exhs. D, F and G) may be considered as its compliance with its obligation under Paragraph 2(b) of the "Kasunduan" (Exh. A); and

3. Whether or not private respondent has any cause of action for specific performance against petitioners.

These issues boil down to the legal issue of the proper interpretation of paragraphs 2(b), 3 and 4 of the "Kasunduan." That "Kasunduan" which was prepared by Meteor itself, should be strictly construed against it.

The Court of Appeals held that "the fault lies . . . with appellants" (Umalis) for "the failure of appellee (Meteor) to pay the first 25% of the purchase price within 120 days from the finality of the judgment mentioned in paragraph 2(6) [should be 2(b)] of the contract" because "it behooves . . . for the sellers to notify the buyer when the case against them was finally terminated by the rendition of a judgment in their favor." (p. 49, Rollo.)

That ruling is erroneous. There is no stipulation whatsoever in the "Kasunduan" obligating the sellers to notify the buyer when Civil Case No. 8973 (or CA-G.R. No. 50909-R) will have been finally terminated by a final judgment in their favor. Meteor was fully aware of the pendency of the case in the Court of Appeals, hence, it could have followed up (as it subsequently did, but too late) the status of the case instead of relying on the illiterate spouses to inform it. It has no one to blame but itself for its failure to comply with its obligation under paragraph 2(b) of the "Kasunduan."cralaw virtua1aw library

Admittedly the judgment of the Court of Appeals in CA-G.R. No. 50909-R became final on June 13, 1980. That final judgment cleared and quieted ("malinis, matapos, at malagay na sa tahimik") (p. 40, Rollo) the title of the Umalis to the parcels of land in question. Nothing else remained to be done but to count 120 days thereafter (up to October 11, 1980) within which the buyer should pay 25% of the purchase price of the property which it had contracted to buy from the Umalis.

It is noteworthy that under paragraphs 2(b), 3 and 4 of the "Kasunduan" earlier quoted, payment of the first 25% of the purchase price within 120 days after the termination of Civil Case No. 8973 in favor of the Umalis should precede the execution of a Deed of Sale with Mortgage by the parties to secure payment of the balance of the purchase price to the Umalis. Paragraph 3 provides thus:jgc:chanrobles.com.ph

"3. Na sa pagbabayad nang katimbang nang 25% sa unang pagkakataon nabanggit sa itaas, ang NAGBIBILE at BUMIBILE ay lalagda nang BILIHAN NA MAY SANLA (Deed of Sale with Mortgage) . . ." (Emphasis supplied; p. 40, Rollo.)

Clearly, payment of the first 25% of the price within the time frame agreed upon was a condition sine qua non for the transfer of the property by the Umalis to Meteor under a Deed of Sale with Mortgage. Since Meteor failed to pay within the stipulated period, the Umalis were released from the bargain. They are entitled to the rescission of the "Kasunduan" with respect to the remaining unsold lots covered by their TCT Nos. 13517 and 13616. Accordingly, they should return to Meteor the sum of P5,000 which they received as downpayment for those lots (Art. 1191, Civil Code; Newton Jison, Et. Al. v. CA, G.R. No. L-45349, August 15, 1988; Gaite v. Fonacier, 2 SCRA 830).

WHEREFORE, the decision of the Court of Appeals in CA-G.R. CV No. 12681 is hereby reversed and set aside. The complaint for specific performance with damages filed by Meteor Company, Inc. against the petitioners (Civil Case No. 3705, Regional Trial Court of Rizal) is dismissed. The "Kasunduan nang Pagbibilihan" is declared rescinded and the petitioners are ordered to return the downpayment of Five Thousand Pesos (P5,000) which they received from the private respondent on December 21,1967 with legal interest as of that date until full restitution shall have been made. Costs against the private Respondent.

SO ORDERED.

Narvasa, Cruz, Gancayco and Medialdea, JJ., concur.

G.R. Nos. 28508-9 July 7, 1989 - ESSO STANDARD EASTERN, INC. v. COMMISSIONER OF INTERNAL REVENUE

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FIRST DIVISION

[G.R. Nos. 28508-9. July 7, 1989.]

ESSO STANDARD EASTERN, INC., (formerly, Standard-Vacuum Oil Company), Petitioner, v. THE COMMISSIONER OF INTERNAL REVENUE, Respondent.

Padilla Law Office for Petitioner.

SYLLABUS

1. STATUTORY CONSTRUCTION; LEGISLATIVE HISTORY OF AN ACT RESORTED TO ONLY WHERE THE LANGUAGE OF THE STATUTE IS AMBIGUOUS. — Only in extremely doubtful matters of interpretation does the legislative history of an act of Congress become important. As a matter of fact, there may be no resort to the legislative history of the enactment of a statute, the language of which is plain and unambiguous, since such legislative history may only be resorted to for the purpose of solving doubt, not for the purpose of creating it. [50 Am. Jur. 328.]

2. TAXATION; REPUBLIC ACT NO. 2009, MARGIN FEE; NOT A TAX BUT AN EXACTION. — A margin fee is not a tax but an exaction designed to curb the excessive demands upon our international reserve. (Caltex [Phil.] Inc. v. Acting Commissioner of Customs, 22 SCRA 779; Chamber of Agriculture and Natural Resources of the Philippines v. Central Bank, 14 SCRA 630).

3. ID.; ID.; AN EXERCISE OF POLICE POWER. — The margin fee under Republic Act No. 2009 was imposed by the State in the exercise of its police power and not the power of taxation.

4. ID.; ID.; NOT A DEDUCTIBLE EXPENSE; REASON. — The fees were paid for the remittance by ESSO as part of the profits to the head office in the United States. Such remittance was an expenditure necessary and proper for the conduct of its corporate affairs. As stated in the Lopez case, the margin fees are not expenses in connection with the production or earning of petitioner’s incomes in the Philippines. They were expenses incurred in the disposition of said incomes; expenses for the remittance of funds after they have already been earned by petitioner’s branch in the Philippines for the disposal of its Head Office in New York which is already another distinct and separate income taxpayer.

5. ID.; NATIONAL INTERNAL REVENUE CODE; INCOME TAX ON BUSINESS; CONDITIONS FOR DEDUCTIBILITY OF EXPENSE. — We come, then, to the statutory test of deductibility where it is axiomatic that to be deductible as a business expense, three conditions are imposed, namely: (1) the expense must be ordinary and necessary, (2) it must be paid or incurred within the taxable year, and (3) it must be paid or incurred in carrying on a trade or business. In addition, not only must the taxpayer meet the business test, he must substantially prove by evidence or records the deductions claimed under the law, otherwise, the same will be disallowed. The mere allegation of the taxpayer that an item of expense is ordinary and necessary does not justify its deduction. (Atlas Consolidated Mining and Development Corporation v. Commissioner of Internal Revenue, 102 SCRA 246)

6. ID.; ID.; CLAIMS FOR DEDUCTIONS, A MATTER OF LEGISLATIVE GRACE AND CONSTRUED STRICTLY AGAINST THE TAXPAYER. — The paramount rule is that claims for deductions are a matter of legislative grace and do not turn on mere equitable considerations. . . . The taxpayer in every instance has the burden of justifying the allowance of any deduction claimed.

D E C I S I O N

CRUZ, J.:

On appeal before us is the decision of the Court of Tax Appeals 1 denying petitioner’s claims for refund of overpaid income taxes of P102,246.00 for 1959 and P434,234.93 for 1960 in CTA Cases No. 1251 and 1558 respectively.

In CTA Case No. 1251, petitioner ESSO deducted from its gross income for 1959, as part of its ordinary and necessary business expenses, the amount it had spent for drilling and exploration of its petroleum concessions. This claim was disallowed by the respondent Commissioner of Internal Revenue on the ground that the expenses should be capitalized and might be written off as a loss only when a "dry hole" should result. ESSO then filed an amended return where it asked for the refund of P323,279.00 by reason of its abandonment as dry holes of several of its oil wells. Also claimed as ordinary and necessary expenses in the same return was the amount of P340,822.04, representing margin fees it had paid to the Central Bank on its profit remittances to its New York head office.

On August 5, 1964, the CIR granted a tax credit of P221,033.00 only, disallowing the claimed deduction for the margin fees paid.

In CTA Case No. 1558, the CR assessed ESSO a deficiency income tax for the year 1960, in the amount of P367,994.00, plus 18% interest thereon of P66,238.92 for the period from April 18, 1961 to April 18, 1964, for a total of P434,232.92. The deficiency arose from the disallowance of the margin fees of P1,226,647.72 paid by ESSO to the Central Bank on its profit remittances to its New York head office.chanrobles.com:cralaw:red

ESSO settled this deficiency assessment on August 10, 1964, by applying the tax credit of P221,033.00 representing its overpayment on its income tax for 1959 and paying under protest the additional amount of P213,201.92. On August 13, 1964, it claimed the refund of P39,787.94 as overpayment on the interest on its deficiency income tax. It argued that the 18% interest should have been imposed not on the total deficiency of P367,944.00 but only on the amount of P146,961.00, the difference between the total deficiency and its tax credit of P221,033.00.

This claim was denied by the CIR, who insisted on charging the 18% interest on the entire amount of the deficiency tax. On May 4, 1965, the CIR also denied the claims of ESSO for refund of the overpayment of its 1959 and 1960 income taxes, holding that the margin fees paid to the Central Bank could not be considered taxes or allowed as deductible business expenses.

ESSO appealed to the CTA and sought the refund of P102,246.00 for 1959, contending that the margin fees were deductible from gross income either as a tax or as an ordinary and necessary business expense. It also claimed an overpayment of its tax by P434,232.92 in 1960, for the same reason. Additionally, ESSO argued that even if the amount paid as margin fees were not legally deductible, there was still an overpayment by P39,787.94 for 1960, representing excess interest.

After trial, the CTA denied petitioner’s claim for refund of P102,246.00 for 1959 and P434,234.92 for 1960 but sustained its claim for P39,787.94 as excess interest. This portion of the decision was appealed by the CIR but was affirmed by this Court in Commissioner of Internal Revenue v. ESSO, G.R. No. L-28502-03, promulgated on April 18, 1989. ESSO for its part appealed the CTA decision denying its claims for the refund of the margin fees P102,246.00 for 1959 and P434,234.92 for 1960. That is the issue now before us.

The first question we must settle is whether R.A. 2009, entitled An Act to Authorize the Central Bank of the Philippines to Establish a Margin Over Banks’ Selling Rates of Foreign Exchange, is a police measure or a revenue measure. If it is a revenue measure, the margin fees paid by the petitioner to the Central Bank on its profit remittances to its New York head office should be deductible from ESSO’s gross income under Sec. 30(c) of the National Internal Revenue Code. This provides that all taxes paid or accrued during or within the taxable year and which are related to the taxpayer’s trade, business or profession are deductible from gross income.

The petitioner maintains that margin fees are taxes and cites the background and legislative history of the Margin Fee Law showing that R.A. 2609 was nothing less than a revival of the 17% excise tax on foreign exchange imposed by R.A. 601. This was a revenue measure formally proposed by President Carlos P. Garcia to Congress as part of, and in order to balance, the budget for 1959-1960. It was enacted by Congress as such and, significantly, properly originated in the House of Representatives. During its two and a half years of existence, the measure was one of the major sources of revenue used to finance the ordinary operating expenditures of the government. It was, moreover, payable out of the General Fund.

On the claimed legislative intent, the Court of Tax Appeals, quoting established principles, pointed out that —

We are not unmindful of the rule that opinions expressed in debates, actual proceedings of the legislature, steps taken in the enactment of a law, or the history of the passage of the law through the legislature, may be resorted to as an aid in the interpretation of a statute which is ambiguous or of doubtful meaning. The courts may take into consideration the facts leading up to, confident with, and in any way connected with, the passage of the act, in order that they may properly interpret the legislative intent. But it is also well-settled jurisprudence that only in extremely doubtful matters of interpretation does the legislative history of an act of Congress become important. As a matter of fact, there may be no resort to the legislative history of the enactment of a statute, the language of which is plain and unambiguous, since such legislative history may only be resorted to for the purpose of solving doubt, not for the purpose of creating it. [50 Am. Jur. 328.]

Apart from the above consideration, there are at least two cases where we have held that a margin fee is not a tax but an exaction designed to curb the excessive demands upon our international reserve.

In Caltex (Phil.) Inc. v. Acting Commissioner of Customs, 2 the Court stated through Justice Jose P. Bengzon:chanrob1es virtual 1aw library

A margin levy on foreign exchange is a form of exchange control or restriction designed to discourage imports and encourage exports, and ultimately, `curtail any excessive demand upon the international reserve’ in order to stabilize the currency. Originally adopted to cope with balance of payment pressures, exchange restrictions have come to serve various purposes, such as limiting non-essential imports, protecting domestic industry — and when combined with the use of multiple currency rates — providing a source of revenue to the government, and are in many developing countries regarded as a more or less inevitable concomitant of their economic development programs. The different measures of exchange control or restriction cover different phases of foreign exchange transactions, i.e., in quantitative restriction, the control is on the amount of foreign exchange allowable. In the case of the margin levy, the immediate impact is on the rate of foreign exchange; in fact, its main function is to control the exchange rate without changing the par value of the peso as fixed in the Bretton Woods Agreement Act. For a member nation is not supposed to alter its exchange rate (at par value) to correct a merely temporary disequilibrium in its balance of payments. By its nature, the margin levy is part of the rate of exchange as fixed by the government.

As to the contention that the margin levy is a tax on the purchase of foreign exchange and hence should not form part of the exchange rate, suffice it to state that We have already held the contrary for the reason that a tax is levied to provide revenue for government operations, while the proceeds of the margin fee are applied to strengthen our country’s international reserves.

Earlier, in Chamber of Agriculture and Natural Resources of the Philippines v. Central Bank, 3 the same idea was expressed, though in connection with a different levy, through Justice J.B.L. Reyes:chanrob1es virtual 1aw library

Neither do we find merit in the argument that the 20% retention of exporter’s foreign exchange constitutes an export tax. A tax is a levy for the purpose of providing revenue for government operations, while the proceeds of the 20% retention, as we have seen, are applied to strengthen the Central Bank’s international reserve.

We conclude then that the margin fee was imposed by the State in the exercise of its police power and not the power of taxation.

Alternatively, ESSO prays that if margin fees are not taxes, they should nevertheless be considered necessary and ordinary business expenses and therefore still deductible from its gross income. The fees were paid for the remittance by ESSO as part of the profits to the head office in the United States. Such remittance was an expenditure necessary and proper for the conduct of its corporate affairs.

The applicable provision is Section 30(a) of the National Internal Revenue Code reading as follows:chanrob1es virtual 1aw library

SEC. 30. Deductions from gross income.— In computing net income there shall be allowed as deductions —

(a) Expenses:chanrob1es virtual 1aw library

(1) In general. — All the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business, including a reasonable allowance for salaries or other compensation for personal services actually rendered; traveling expenses while away from home in the pursuit of a trade or business; and rentals or other payments required to be made as a condition to the continued use or possession, for the purpose of the trade or business, of property to which the taxpayer has not taken or is not taking title or in which he has no equity.

(2) Expenses allowable to non-resident alien individuals and foreign corporations. — In the case of a non-resident alien individual or a foreign corporation, the expenses deductible are the necessary expenses paid or incurred in carrying on any business or trade conducted within the Philippines exclusively.

In the case of Atlas Consolidated Mining and Development Corporation v. Commissioner of Internal Revenue, 4 the Court laid down the rules on the deductibility of business expenses, thus:chanrob1es virtual 1aw library

The principle is recognized that when a taxpayer claims a deduction, he must point to some specific provision of the statute in which that deduction is authorized and must be able to prove that he is entitled to the deduction which the law allows. As previously adverted to, the law allowing expenses as deduction from gross income for purposes of the income tax is Section 30(a) (1) of the National Internal Revenue which allows a deduction of ‘all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business.’ An item of expenditure, in order to be deductible under this section of the statute, must fall squarely within its language.

We come, then, to the statutory test of deductibility where it is axiomatic that to be deductible as a business expense, three conditions are imposed, namely: (1) the expense must be ordinary and necessary, (2) it must be paid or incurred within the taxable year, and (3) it must be paid or incurred in carrying on a trade or business. In addition, not only must the taxpayer meet the business test, he must substantially prove by evidence or records the deductions claimed under the law, otherwise, the same will be disallowed. The mere allegation of the taxpayer that an item of expense is ordinary and necessary does not justify its deduction.

While it is true that there is a number of decisions in the United States delving on the interpretation of the terms ‘ordinary and necessary, as used in the federal tax laws, no adequate or satisfactory definition of those terms is possible. Similarly, this Court has never attempted to define with precision the terms ‘ordinary and necessary.’ There are however, certain guiding principles worthy of serious consideration in the proper adjudication of conflicting claims. Ordinarily, an expense will be considered `necessary, where the expenditure is appropriate and helpful in the development of the taxpayer’s business. It is ‘ordinary’ when it connotes a payment which is normal in relation to the business of the taxpayer and the surrounding circumstances. The term ‘ordinary’ does not require that the payments be habitual or normal in the sense that the same taxpayer will have to make them often; the payment may be unique or non-recurring to the particular taxpayer affected.

There is thus no hard and fast rule on the matter. The right to a deduction depends in each case on the particular facts and the relation of the payment to the type of business in which the taxpayer is engaged. The intention of the taxpayer often may be the controlling fact in making the determination. Assuming that the expenditure is ordinary and necessary in the operation of the taxpayer’s business, the answer to the question as to whether the expenditure is an allowable deduction as a business expense must be determined from the nature of the expenditure itself, which in turn depends on the extent and permanency of the work accomplished by the expenditure.

In the light of the above explanation, we hold that the Court of Tax Appeals did not err when it held on this issue as follows:chanrob1es virtual 1aw library

Considering the foregoing test of what constitutes an ordinary and necessary deductible expense, it may be asked: Were the margin fees paid by petitioner on its profit remittances to its Head Office in New York appropriate and helpful in the taxpayer’s business in the Philippines? Were the margin fees incurred for purposes proper to the conduct of the affairs of petitioner’s branch in the Philippines? Or were the margin fees incurred for the purpose of realizing a profit or of minimizing a loss in the Philippines? Obviously not. As stated in the Lopez case, the margin fees are not expenses in connection with the production or earning of petitioner’s incomes in the Philippines. They were expenses incurred in the disposition of said incomes; expenses for the remittance of funds after they have already been earned by petitioner’s branch in the Philippines for the disposal of its Head Office in New York which is already another distinct and separate income taxpayer.

x x x

Since the margin fees in question were incurred for the remittance of finds to petitioner’s Head Office in New York, which is a separate and distinct income taxpayer from the branch in the Philippines, for its disposal abroad, it can never be said therefore that the margin fees were appropriate and helpful in the development of petitioner’s business in the Philippines exclusively or were incurred for purposes proper to the conduct of the affairs of petitioner’s branch in the Philippines exclusively or for the purpose of realizing a profit or of minimizing a loss in the Philippines exclusively. If at all, the margin fees were incurred for purposes proper to the conduct of the corporate affairs of Standard Vacuum Oil Company in New York, but certainly not in the Philippines.

ESSO has not shown that the remittance to the head office of part of its profits was made in furtherance of its own trade or business. The petitioner merely presumed that all corporate expenses are necessary and appropriate in the absence of a showing that they are illegal or ultra vires. This is error. The public respondent is correct when it asserts that "the paramount rule is that claims for deductions are a matter of legislative grace and do not turn on mere equitable considerations . . . The taxpayer in every instance has the burden of justifying the allowance of any deduction claimed." 5

It is clear that ESSO, having assumed an expense properly attributable to its head office, cannot now claim this as an ordinary and necessary expense paid or incurred in carrying on its own trade or business.chanrobles virtual lawlibrary

WHEREFORE, the decision of the Court of Tax Appeals denying the petitioner’s claims for refund of P102,246.00 for 1959 and P434,234.92 for 1960, is AFFIRMED, with costs against the petitioner.

SO ORDERED.

Narvasa, Gancayco, Griño-Aquino and Medialdea, JJ., concur.

Endnotes:

1. Penned by Associate Judge E. Alvarez, with Presiding Judge Umali and Associate Judge Avanceña concurring.

2. 22 SCRA 779.

3. 14 SCRA 630.

4. 102 SCRA 246.

5. Merten’s, Law of Federal Income Taxation, Section 25.03.

G.R. No. 70037 July 7, 1989 - PEOPLE OF THE PHIL. v. TEOFISTA BRAGAT VDA. DE CABANGAHAN

2012-11-11T16:53:05+00:00

FIRST DIVISION

[G.R. No. 70037. July 7, 1989.]

PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. TEOFISTA BRAGAT VDA. DE CABANGAHAN, Accused-Appellant.

The Solicitor General for Plaintiff-Appellee.

Gerardo D. Paguio for Accused-Appellant.

SYLLABUS

1. REMEDIAL LAW; EVIDENCE; ADMISSION MADE BY AN ACCUSED AS TESTIFIED TO BY THE INVESTIGATING OFFICER, HEARSAY. — Testimony as to the admission of an accused which was not made in the presence of the witness and of which the latter only learned from another person who was never presented to testify, is hearsay.

2. CONSTITUTIONAL LAW; BILL OF RIGHTS; RIGHT TO REMAIN SILENT AND TO COUNSEL; ADMISSION MADE WITHOUT BEING INFORMED OF SUCH RIGHTS, INADMISSIBLE. — Admissions made during custodial investigation by an accused who had not been given cautionary advise of her rights to silence and to consume mandated by the 1973 Constitution, are not admissible in evidence against her.

3. ID.; ID.; ID.; PRESUMPTION OF REGULAR PERFORMANCE OF OFFICIAL DUTY WILL NOT SUFFICE AS PROOF OF THE PEREMPTORY CHARACTER OF CONSTITUTIONAL ADMONITION. — Corollary to the peremptory character of the Constitutional admonition about giving these pre-interrogation advisories, there must be clear proof that they were given. The presumption of regular performance of official duty that might otherwise arise from the making of an admission or confession to a police officer will not suffice in lieu of such proof.

4. REMEDIAL LAW; EVIDENCE; PART OF THE RES GESTAE; STATEMENTS MADE SOMETIME AFTER A STARTLING OCCURRENCE, THE DECLARANT IN FULL POSSESSION OF HER FACULTIES, NOT EMBRACED THEREIN. — To be so admissible, as part of the res gestae, declaration sought to be made under the immediate influence of a startling occurrence without time or opportunity to devise or contrive so that in effect, it is the event speaking through the witness not the witness speaking of the event. Here, however, the circumstances show that the accused was no longer under shock and had had time to compose herself when she gave her statement to the investigating officer. Indeed, there is nothing in the record to suggest that she was otherwise than in full possession of her faculties at that time.

5. ID.; ID.; DEFENDANT’S NEGLECT OR REFUSAL TO BE A WITNESS WILL NOT IN ANY MANNER PREJUDICE HIM. — The law imposes no obligation on a defendant in a criminal action to supply gaps in the prosecution evidence by taking the witness stand himself, even if it should appear that he is the only one in possession of the relevant information. It is the duty of the prosecution to furnish the answers to all questions relative to the guilt of the accused in the form of clear and convincing evidence. If it is unable to give acceptable answers to some of those questions, it cannot look to the accused for them. It is the defendant’s right to testify, or not to testify at all. And if he should choose not to testify, no adverse implication is allowed to be drawn therefrom. Of this the law leaves no doubt. The defendant’s "neglect or refusal to be a witness shall not in any manner prejudice or be used against him."

D E C I S I O N

NARVASA, J.:

Teofista Bragat was convicted by the Regional Trial Court of Lanao del Norte 1 of the felony of parricide for having killed her husband, Zacarias Cabangahan, on April 8, 1978, and was sentenced to suffer the penalty of reclusion perpetua and to indemnify the heirs of the deceased in the sum of P12,000.00 without subsidiary imprisonment in case of insolvency, to suffer as well the accessory penalties of the law, and to pay the costs. Teofista and Zacarias were married on November 25, 1950 before a Catholic priest in Malingao, Tubod, Lanao del Norte. 2 The conviction was grounded on circumstantial evidence, there being no eye-witnesses to the killing.

It appears that on April 8, 1978, at about midnight, Titing Manoop, a neighbor of the spouses Zacarias Cabangahan and Teofista Bragat at Barangay Candis, Municipality of Tubod, Lanao del Norte went to the residence of Pat. Corsino Vicoy of the Integrated National Police of Tubod, roused him from sleep, and asked him to investigate a killing which had taken place at Barangay Candis.

Before proceeding to Candis, however, Pat. Vicoy first went to the Municipal Hall of Tubod to see if verification could be had of Manoop’s report. There he saw Teofista Bragat, and learned from the guard on duty that she had "surrendered to him." 3 According to Vicoy, he had asked her, "Why are you here?" and she had "answered that she (had) killed her husband." 4 Pat. Vicoy then made the following entries in the police blotter, in his own hand, to wit: 5

ENTRY NO. DATE TIME.

070-78 04-09-78 022OH VOLUNTARY SURRENDERED.

One Teofista Cabangahan y Bragat, 49 years old, married, farmer and a resident of Candis, Tubod, Lanao del Norte, voluntarily surrendered in this station for she allegedly killed her husband, Zacarias Cabangahan, 48 years old, married and a resident of Candis, Tubod, Lanao del Norte. Motive is family trouble.

0240H — Pat. Corsino Vicoy, INP, investigator of Tubod Police Station (left station) with Dr. Marcelino Robles, PHU, Tubod, Lanao del Norte, left station and went to the scene of the incident to investigate.

Thereafter Pat. Vicoy went to Barangay Candis to investigate the crime, in the company of Dr. Marcelino Robles, the Municipal Health Officer. They came upon the lifeless body of Zacarias Cabangahan. Dr. Robles’ post-mortem examination of the cadaver which disclosed several "deep, hacking" wounds in the head, neck and left shoulder. In the autopsy report he subsequently drew up, 6 Dr. Robles detailed the number and nature of the decedent’s wounds, and set down the "Cause of Death" as "Shock, due to hemorrhage, secondary to multiple hacking wound." Dr. Robles also later declared, on the witness stand, that the victim’s wounds had been caused by a sharp-edged instrument, like a bolo, and all the wounds were fatal. 7 The bolo supposedly used in the killing was turned over to Pat. Vicoy by the barrio captain, and later presented in evidence at Teofista’s trial. 8

On his return to the Municipal Building, Pat. Vicoy made another entry in the police blotter, 9 as follows:chanrob1es virtual 1aw library

0530H Pat. Corsino Vicoy arrived station from Candis, Tubod, Lanao del Norte; investigated the incident and it was found out that one Zacarias Cabangahan was already dead. The said incident was happened at about 12:00 midnight April 8, 1978.

He asked Teofista, who by then had been placed in a cell, why she had killed her husband. Her reply, according to Vicoy, was that "she can’t bear any more because he was always quarreling with her." 10 He made no further effort to investigate Teofista because when he asked his station commander if he should make an investigation in writing, the latter had said, "never mind." 11

Teofista was in due course charged with parricide in the Regional Trial Court. Upon arraignment she entered a plea of not guilty with the assistance of counsel de oficio. The prosecution thereafter presented evidence, tending to establish the facts narrated in the preceding paragraphs.

In her defense, Teofista’s lawyer presented two (2) witnesses. The first was Vicente Remocaldo. He testified that he had attended a prayer meeting in connection with the death of a barangay resident held at Candis on April 8, 1978 at about 8 o’clock in the evening, that Teofista was present at the meeting, that snacks were served after the prayers, and the women started to leave at about 9:30 o’clock that night. 12 Teofista’s second witness was Agripino Llangoren, who deposed that he knew Teofista and her husband Zacarias Cabangahan, because they were his neighbors; that Zacarias was a drunkard and when drunk, always quarreled with his family; that at about 7:00 o’clock in the evening of April 8, 1978, he had heard loud noises emanating from the Cabangahan spouses’ residence, followed by complete silence moments later; that at around 10:00 o’clock, when Teofista had returned from a prayer meeting held at a nearby residence, loud noises had again emanated from her house; that he had then repaired to the Cabangahans’ house to find out what was going on; that he was met at the door by Teofista who asked him to bring her to the Municipal Building of Tubod; and that he had escorted her to the place and left her there. 13 The defense opted not to present the accused herself as witness, after having been given about a month’s time by the Trial Judge to consider and come to a decision about the matter.

On November 12, 1984, the Trial Court promulgated its verdict, finding Teofista guilty beyond reasonable doubt of parricide, as aforestated, 14 and sentencing her accordingly.

Teofista has appealed and before this Court pleads for reversal of her conviction, contending that the Court a quo erred in finding her and her victim to have been legally married, and that her guilt had been proven beyond reasonable doubt.

As observed in this opinion’s opening paragraph, there were no witnesses at all to the killing. Not one of the witnesses who gave evidence made any claim to having seen Teofista kill her husband. There was no competent proof to establish that the bolo given to Pat. Vicoy by the barangay captain was indeed the weapon used in the killing, or that it even belonged to Teofista. 15

Neither was there any proof of the time of the victim’s death, In fact, Dr. Robles frankly acknowledged his inability to make an estimate of that time. 16 The evidence shows that on the day in question, Teofista was out of the house from about 7:30 o’clock to 10 o’clock in the evening. From aught that appears, the killing could as well have taken place while she was out of the house as upon her return.

It is true that Teofista had gone to the Municipal Building that night, having been escorted there at her request by her neighbor, Llangoren. The latter had gone to her home because he had heard loud noises coming from the place. Pat. Vicoy had first seen her there, at the police station, and learned from the guard that she had come to give herself up, in other words, to turn herself over to the custody of the police. It was under these circumstances, after Vicoy had been asked to investigate a killing and Teofista had placed herself in police custody — in fact she was afterwards detained in a cell — that as testified to by Pat. Vicoy, she had twice admitted killing her husband: first, to explain her appearance at the police station, and later that same night, upon his return from his investigation at the scene of the crime, when she also disclosed the motive for the deed, that she could no longer endure her spouse’s constant quarreling with her. 17

True, Vicoy declared on direct questioning that it was he who had elicited both admissions from Teofista. But to all intents and purposes he recanted that testimony at least as to the first alleged admission, when under cross-examination, he had to admit otherwise and that he was only informed about it by the jail guard: 18

"Q In your direct examination, you said that you were in your house past midnight when somebody came to you on April 7, 1978?

A Yes, sir.

Q That is the only time you knew about this case when you reached the police station?

WITNESS:chanrob1es virtual 1aw library

After that time.

Q And it was when you arrived at the police station that you knew the accused was already there?

A Yes, sir.

Q The entries that you made mentioned Exhibit C-1 you actually have no knowledge of the contents?

A I have because I was informed by the guard.

Q Your knowledge is thru information?

A Yes, sir.

Q So, all the things that you wrote is what the guard told you?

A Yes, sir.

Q So that, what you wrote in that entries is not with your own knowledge but from other sources?

A The other paragraph, sir.

Q What paragraph in this entries in Exhibit C-1?

A The first paragraph, sir.

Q What is the other paragraph?

A I was referring to Exhibit C-1.

Q This Exhibit C-1?

A Yes, sir."cralaw virtua1aw library

Apart, therefore, from any other consideration bearing on its admissibility or competence, Vicoy’s testimony as to Teofista’s initial admission must be dismissed as mere hearsay, said admission not being made to him or in his presence, and of which he learned only at second hand from the jail guard who, incidentally, was never presented to testify. Even, however, positing the contrary, the fact remains that both alleged admissions of Teofista were made when she was already in police custody or otherwise deprived of her freedom of action in some significant way. 19 In such a case, it was required by the 1973 Constitution (then in force) that any interrogation of her be preceded by the cautionary advice of her "right to remain silent and to counsel," 20 which, if the record is any indication, was never given. Consequently, any answers given by her under questioning were inadmissible in evidence against her and should have been so treated by the Trial Court.

"If this case were to be decided under the 1935 Constitution, the trial court’s judgment of conviction could be affirmed. But we have to decide it under the rule in the 1973 Constitution as to a confession obtained while the confessant is under police custody. And that rule applies squarely to this case (Magtoto v. Manguera, Simeon v. Villaluz and People v. Isnani, L-37201-02, L-37424 and L-38929, March 3, 1975, 63 SCRA 4.)

"Inasmuch as the prosecution in this case failed to prove that before Duero made his alleged oral confession he was informed of his rights to remain silent and to have counsel and because there is no proof that he knowingly and intelligently waived those rights, his confession is inadmissible in evidence." 21

It may be stated as a corollary that in view of the peremptory character of the Constitutional admonition about giving these pre-interrogation advisories, there must be clear proof that they were given. The presumption of regular performance of official duty that might otherwise arise from the making of an admission or confession to a police officer will not suffice in lieu of such proof.

The Trial Court’s view that Teofista’s declarations may be regarded as part of the res gestae is incorrect. It assumes in the first place, that said declarations — that she had gone to the police station because she had killed her husband, and she had killed him because his constant quarreling with her had become unbearable — are hearsay. They are not. They were actually made to Pat. Vicoy, and actually heard by him. So that when Pat. Vicoy subsequently spoke about those statements on the witness stand, he was not speaking of facts which he had merely learned from others, but of those which he knew of his own knowledge, derived from his own perception. 22 Teofista’s statements may more properly be considered admissions, declarations of a party as to a relevant fact, which might otherwise have been given in evidence against her, 23 had they not been rendered inadmissible by the failure of Pat. Vicoy himself to observe the cardinal requisites prescribed by the Constitution for custodial interrogation.

In second place, even if Teofista’s answers to Pat. Vicoy’s questions be considered hearsay, they would not in the premises still qualify as part of the res gestae. To be so admissible, it should appear that Teofista’s answers had been made under the immediate influence of a startling occurrence, 24 in this case, obviously her husband’s slaying, without time or opportunity to devise or contrive; 25 that, as has so often been said in reference to the rule, it is the event speaking through the witness not the witness speaking of the event. Here, however, the circumstances show Teofista to be no longer under shock; some time had already passed from the startling occurrence to the time that she was questioned by Pat. Vicoy at the police station; she had time to compose herself; indeed, there is nothing in the record to suggest that she was otherwise than in full possession of her faculties at that time.

The Trial Judge evinced some perplexity as to why Teofista did not take the witness stand. In His Honor’s view, she might have provided the answers to some questions left unanswered by the evidence of the prosecution. There is, however, no obligation imposed by law on a defendant in a criminal action to supply gaps in the prosecution evidence by taking the witness stand himself, even if it should appear that he is the only one in possession of the relevant information. It is after all the duty of the prosecution to furnish the answers to all questions relative to the guilt of the accused in the form of clear and convincing evidence. If it is unable to give acceptable answers to some of those questions, it cannot look to the accused for them. It is the defendant’s right to testify, 26 or not to testify at all. 27 And if he should choose not to testify, no adverse implication is allowed to be drawn therefrom. Of this the law leaves no doubt. The defendant’s "neglect or refusal to be a witness shall not in any manner prejudice or be used against him." 28

WHEREFORE, the appellant Teofista Bragat Vda. de Cabangahan is ACQUITTED on reasonable doubt, and the bail given for her provisional liberty DISCHARGED, with costs de oficio.

Gancayco, Griño-Aquino and Medialdea, JJ., concur.

Separate Opinions

CRUZ, J., concurring:chanrob1es virtual 1aw library

There are three things that puzzle me about this case, viz., why the accused voluntarily went to the police station and was subsequently detained; why no effort was taken to secure a statement from her under all the safeguards of the Bill of Rights, including the presence and advice of counsel; and why the guard to whom she had allegedly confessed was not presented at the trial. I think the investigation and prosecution of this case were mishandled. While I have the suspicion that the accused is guilty as charged, I nevertheless must concur in her acquittal because of the constitutional presumption of innocence. No one could have been convicted on the slipshod evidence of the prosecution.

Endnotes:

1. Branch IV at Iligan City, Hon. Jesus O. Ibay, presiding.

2. Exh. E-1, p. 5, Rec.; TSN, Jan. 23, 1981, pp. 20-22; Rollo, pp. 47-49.

3. TSN, Sept. 3, 1980, p. 38.

4. Id, p. 39-43.

5. Exhs. C-1, and C-2, respectively, p. 112, Record; a typewritten certification was afterwards prepared by him under date of August 21, 1978 (Exh. B) reproducing these entries (Exhs. B-1 and B-2, respectively), and one (1) other (Exh. B-3), TSN, Sept. 3, 1980, pp. 43 et seq.

6. Exh. A, p. 3, Record.

7. TSN, July 18, 1980, pp. 9-13.

8. TSN, Sept. 3, 1980, p. 47; Exh. D.

9. Exh. C-3; see footnote 5, supra.

10. TSN, Sept. 3, 1980, pp. 53-54.

11. Id., p. 54.

12. Rollo, pp. 49-50.

13. Id., p. 50.

14. SEE footnote 2, at p. 1, supra.

15. TSN, Sept. 3, 1980, p. 47; Oct. 15, 1980, pp. 65-66.

16. TSN, July 18, 1980, pp. 21-22.

17. See footnote 5, at p. 2: Transcript of stenographic notes, Sept. 3, 1980, pp. 53-54, supra.

18. TSN, Oct. 15, 1980, pp. 63-64.

19. People v. Caguioa, 95 SCRA 2, 9, quoting Miranda v. Arizona, 384 U.S. 436, 16 L. Ed. 694, 10 ALR, 3d. 974.

20. Sec. 20, Art. IV, 1973 Constitution.

21. People v. Duero, 104 SCRA 379, 385-386; People v. Caguioa, supra; People v. Taylaran, 108 SCRA 373.

22. Sec. 30, Rule 130, Rules of Court.

23. Sec. 22, Rule 130, Rules of Court.

24. Sec. 36, Rule 130, Rules of Court.

25. See Moran, Comments on the Rules, 1980 ed., Vol. 5, pp. 348-349.

26. Sec. 1 (d), Rule 115, 1964 Rules of Court.

27. Sec. 1 (e), Rule 115, 1964 Rules of Court.

28. Sec. 1 (d), Rule 115, 1964 Rules of Court. The rule has been amended by the 1985 Rules on Criminal Procedure, and now reads, "His silence shall not in any manner prejudice him."

G.R. No. 70403 July 7, 1989 - SANTIAGO SYJUCO, INC. v. JOSE P. CASTRO, ET AL.

2012-11-11T16:53:05+00:00

FIRST DIVISION

[G.R. No. 70403. July 7, 1989.]

SANTIAGO SYJUCO, INC., Petitioner, v. HON. JOSE P. CASTRO, AS PRESIDING JUDGE OF THE REGIONAL TRIAL COURT OF THE NATIONAL CAPITAL JUDICIAL REGION, BRANCH LXXXV, QUEZON CITY, THE CITY SHERIFF OF THE CITY OF MANILA, THE CITY REGISTER OF DEEDS OF THE CITY OF MANILA, EUGENIO LIM, ARAMIS LIM, MARIO LIM, PAULINO LIM, LORENZO LIM, NILA LIM and/or THE PARTNERSHIP OF THE HEIRS OF HUGO LIM and ATTORNEY PATERNO P. CANLAS, Respondents.

Doroteo B. Daguna and Felix D. Carao for Petitioner.

Paterno Canlas for Private Respondents.

SYLLABUS

1. REMEDIAL LAW; SUPREME COURT; SANCTIONS AGAINST TRIFLING WITH JUDICIAL PROCESSES; CASE AT BAR. — The Court cannot but condemn in the strongest terms this trifling with the judicial process which degrades the administration of justice, mocks, subverts and misuses that process for purely dilatory purposes, thus tending to bring it into disrepute, and seriously erodes public confidence in the will and competence of the courts to dispense swift justice. The Lims and their partnership acted in bad faith and with intent to defraud is manifest in the record of their actuations, presenting as they did, piecemeal and in one case after another, defenses to the foreclosure or claims in derogation thereof that were available to them from the very beginning — actuations that were to stave off the liquidation of an undenied debt for more than twenty years and culminated in the clandestine filing and prosecution of the action subject of the present petition. The private respondents (the Lims, the Partnership of the Heirs of Hugo Lim and Atty. Paterno R. Canlas) are sentenced, jointly and severally, to pay the petitioner P25,000.00 as nominal damages and P100,000.00 as exemplary damages, as well as treble costs.

2. ID.; ACTION JURIDICAL PERSONALITY; LEGAL FICTION OF SEPARATE JURIDICAL PERSONALITY AND EXISTENCE, NOT A SHIELD FROM KNOWLEDGE WHICH NATURALLY AND IRRESISTIBLY FLOWS FROM UNDENIED FACTS; CASE AT BAR. — The respondent partnership is composed exclusively of the individual Lims in whose name all the cases herein referred to, with the sole exception of Civil Case No. Q-36485, were brought and prosecuted, their contribution to the partnership consisting chiefly, if not solely, of the property subject of the Syjuco mortgage. It is also a fact that despite its having been contributed to the partnership, allegedly on March 30, 1959, the property was never registered with the Register of Deeds in the name of the partnership, but to this date remains registered in the names of the Lims as owners in common. The original mortgage deed of November 14, 1964 was executed by the Lims as such owners, as were all subsequent amendments of the mortgage. There can be no dispute that in those circumstances, the respondent partnership was chargeable with knowledge of the mortgage from the moment of its execution. The legal fiction of a separate juridical personality and existence will not shield it from the conclusion of having such knowledge which naturally and irresistibly flows from the undenied facts. It would violate all precepts of reason, ordinary experience and common sense to propose that a partnership, as such, cannot be held accountable with knowledge of matters commonly known to all the partners or of acts in which all of the latter, without exception, have taken part, where such matters or acts affect property claimed as its own by said partnership.

3. CIVIL LAW; ESTOPPEL; FAILURE TO IMPUGN MORTGAGE FOR MORE THAN SEVENTEEN YEARS. — If, therefore, the respondent partnership was inescapably chargeable with knowledge of the mortgage executed by all the partners thereof, its silence and failure to impugn said mortgage within a reasonable time, let alone a space of more than seventeen years, brought into play the doctrine of estoppel to preclude any attempt to avoid the mortgage as allegedly unauthorized.

4. ID.; ID.; ESTOPPEL BY SILENCE. —." . . an estoppel may arise from silence as well as from words.’Estoppel by silence’ arises where a person, who by force of circumstances is under a duty to another to speak, refrains from doing so and thereby leads the other to believe in the existence of a state of facts in reliance on which he acts to his prejudice. Silence may support an estoppel whether the failure to speak is intentional or negligent.

5. ID.; OBLIGATIONS & CONTRACTS; PARTNERSHIP; ACTS OF ALL THE INDIVIDUAL MEMBERS ARE CONSIDERED ACTS OF THE PARTNERSHIP. — Despite the concealment of the existence of the partnership, for all intents and purposes and consistently with the Lims’ own theory, it was that partnership which was the real party in interest in all the actions; it was actually represented in said actions by all the individual members thereof, and consequently, those members’ acts, declarations and omissions cannot be deemed to be simply the individual acts of said members, but in fact and in law, those of the partnership.

6. REMEDIAL LAW; ACTIONS; SPLITTING OF CAUSES OF ACTION; MANIFEST IN CASE AT BAR. — What was done by the Lims — or by the partnership of which they were the only members — was to split their cause of action in violation of the well known rule that only one suit may be instituted for a single cause of action. The right sought to be enforced by them in all their actions was, at bottom, to strike down the mortgage constituted in favor of Syjuco, a right which, in their view, resulted from several circumstances, namely that the mortgage was constituted over property belonging to the partnership without the latter’s authority; that the principal obligation thereby secured was usurious; that the publication of the notice of foreclosure sale was fatally defective, circumstances which had already taken place at the time of the institution of the actions. They instituted four (4) actions for the same purpose on one ground or the other, making each ground the subject of a separate action. Upon these premises, application of the sanction indicated by law is called for, i.e., the judgment on the merits in any one is available as a bar in the others.

7. ID.; ID.; RES JUDICATA; REQUISITES PRESENT IN CASE AT BAR. — The first judgment — rendered in Civil Case No. 75180 and affirmed by both the Court of Appeals (CA-G.R. No. 51752) and this Court (G.R. No. L-45752) should therefore have barred all the others, all the requisites of res judicata being present. The judgment was a final and executory judgment; it had been rendered by a competent court; and there was, between the first and subsequent cases, not only identity of subject-matter and of cause of action, but also of parties.

8. ID.; ID.; ID.; JUDGMENT IN THE FIRST CASE, REGARDED AS CONCLUSIVE IN ALL OTHER ACTIONS AS TO ANY MATTER THAT COULD HAVE BEEN RAISED IN RELATION THERETO. — Under the doctrine of res judicata, the judgment in the first was and should have been regarded as conclusive in all other actions not only "with respect to the matter directly adjudged," but also "as to any other matter that could have been raised in relation thereto."cralaw virtua1aw library

9. ID.; ID.; SERVICE OF SUMMONS; STRICT COMPLIANCE, ENJOINED; PURPOSE. — In the case of Delta Motor Sales Corporation v. Mangosing 49 it was held that:" (a) strict compliance with the mode of service is necessary to confer jurisdiction of the court over a corporation. The officer upon whom service is made must be one who is named in the statute; otherwise the service is insufficient. "The purpose is to render it reasonably certain that the corporation will receive prompt and proper notice in an action against it or to insure that the summons be served on a representative so integrated with the corporation that such person will know what to do with the legal papers served on him. In other words, ‘to bring home to the corporation notice of the filing of the action’. (35 A C.J.S. 288 citing Jenkins v. Lykes Bros. S.S. Co., 48 F. Supp. 848; MacCarthy v. Langston, D.C. Fla., 23 F.R.D. 249).

10. ID.; EVIDENCE; BURDEN OF PROOF AND PRESUMPTIONS; PRESUMPTION OF REGULARITY IN THE PERFORMANCE OF OFFICIAL FUNCTIONS WILL NOT LIE WHERE THERE IS DEFECTIVE SERVICE OF SUMMONS. — Where the sheriff’s return is defective the presumption of regularity in the performance of official functions will not lie.

11. ID.; ACTIONS; SERVICE OF SUMMONS; DEFECTIVE RETURN SERVICE OF SUMMON DOES NOT VEST COURT WITH JURISDICTION; CASE AT BAR. — The defective sheriff’s return thus being insufficient and incompetent to prove that summons was served in the manner prescribed for service upon corporations, there is no alternative to affirming the petitioner’s claim that it had not been validly summoned in Civil Case No. Q-36485. It goes without saying that lacking such valid service, the Trial Court did not acquire jurisdiction over the petitioner Syjuco, rendering null and void all subsequent proceedings and issuances in the action from the order of default up to and including the judgment by default and the order for its execution.

12. ID.; SPECIAL CIVIL ACTION; CERTIORARI; APPROPRIATE REMEDY AGAINST JUDGMENT RENDERED WITHOUT VALID SERVICE OF SUMMONS. — In Matanguihan v. Tengco where, by declaring that an action for annulment of judgment is not a plain, speedy and adequate remedy, this Court in effect affirmed that certiorari is an appropriate remedy against judgments or proceedings alleged to have been rendered or had without valid service of summons.

13. ID.; ID.; ID.; FAILURE TO RESOLVE ISSUE ON THE MERITS GROUNDED ON ABSENCE OF VALID SERVICE OF SUMMONS, A GRAVE ABUSE OF DISCRETION. — Respondent Judge Castro begged the question when, instead of resolving on the merits the issue of the invalidity of his default judgment and of the proceedings leading thereto because of absence of valid service of summons on the defendant, which had been expressly raised in the defendant’s motion for reconsideration, he simply refused to do so on the excuse that he had lost jurisdiction over the case. This refusal was, in the premises, a grave abuse of judicial discretion which must be rectified.

14. ID.; ID.; MOTION TO DISMISS; ESTOPPEL BY SILENCE AND CONVEYANCE OF PROPERTY BY THE PARTIES, GROUNDS. — Estoppel by silence and Article 1819, last paragraph, of the Civil Code, do not constitute grounds for motion to dismiss under Rule 16 of the Rules of Court.

15. LEGAL ETHICS; ATTORNEY-CLIENT RELATIONSHIP; WHATEVER STEPS A CLIENT TAKES SHOULD BE WITHIN THE KNOWLEDGE AND RESPONSIBILITY OF COUNSEL. — In Surigao Mineral Reservation Board v. Cloribel, it held that a party’s lawyer of record has control of the proceedings and that" (w)hatever steps his client takes should be within his knowledge and responsibility."

D E C I S I O N

NARVASA, J.:

This case may well serve as a textbook example of how judicial processes, designed to promote the swift and efficient disposition of disputes at law, can be so grossly abused and manipulated as to produce precisely the opposite result; how they can be utilized by parties with small scruples to forestall for an unconscionably long time so essentially simple a matter as making the security given for a just debt answer for its payment.

The records of the present proceedings and of two other cases already decided by this Court expose how indeed the routine procedure of an extrajudicial foreclosure came — by dint of brazen forum shopping and other devious maneuvering — to grow into a veritable thicket of litigation from which the mortgagee has been trying to extricate itself for the last twenty years.

Back in November 1964, Eugenio Lim, for and in his own behalf and as attorney-in-fact of his mother, the widow Maria Moreno (now deceased) and of his brother Lorenzo, together with his other brothers, Aramis, Mario and Paulino, and his sister, Nila, all hereinafter collectively called the Lims, borrowed from petitioner Santiago Syjuco, Inc. (hereinafter, Syjuco only) the sum of P800,000.00. The loan was given on the security of a first mortgage on property registered in the names of said borrowers as owners in common under Transfer Certificates of Title Numbered 75413 and 75415 of the Registry of Deeds of Manila. Thereafter additional loans on the same security were obtained by the Lims from Syjuco, so that as of May 8, 1967, the aggregate of the loans stood at P2,460,000.00, exclusive of interest, and the security had been augmented by bringing into the mortgage other property, also registered as owned pro indiviso by the Lims under two titles: TCT Nos. 75416 and 75418 of the Manila Registry.

There is no dispute about these facts, nor about the additional circumstance that as stipulated in the mortgage deed the obligation matured on November 8, 1967; that the Lims failed to pay it despite demands therefor; that Syjuco consequently caused extra-judicial proceedings for the foreclosure of the mortgage to be commenced by the Sheriff of Manila; and that the latter scheduled the auction sale of the mortgaged property on December 27,1968. 1 The attempt to foreclose triggered off a legal battle that has dragged on for more than twenty years now, fought through five (5) cases in the trial courts, 2 two (2) in the Court of Appeals, 3 and three (3) more in this Court, 4 with the end only now in sight.

1. CIVIL CASE NO. 75180, CFI MANILA, BR. 5; CA-G.R. NO. 00242-R; G.R. NO. L-34683

To stop the foreclosure, the Lims — through Atty. Marcial G. Mendiola, who was later joined by Atty. Raul Correa — filed Civil Case No. 75180 On December 24, 1968 in the Court of First Instance of Manila (Branch 5). In their complaint they alleged that their mortgage was void, being usurious for stipulating interest of 23% on top of 11% that they had been required to pay as "kickback." An order restraining the auction sale was issued two days later, on December 26, 1968, premised inter alia on the Lims’ express waiver of "their rights to the notice and re-publication of the notice of sale which may be conducted at some future date." 5

On November 25, 1970, the Court of First Instance (then presided over by Judge Conrado M. Vasquez 6) rendered judgment finding that usury tainted the mortgage without, however, rendering it void, declaring the amount due to be only P1,136,235.00 and allowing the foreclosure to proceed for satisfaction of the obligation reckoned at only said amount. 7

Syjuco moved for new trial to enable it to present additional evidence to overthrow the finding of usury, and the Court ordered the case reopened for that purpose. The Lims tried to negate that order of reopening in the Court of Appeals, the proceedings being docketed as CA-G.R. No. 00242-R. They failed. The Court of Appeals upheld the Trial Court. The Lims then sought to nullify this action of the Appellate Court; towards that end, they filed with this Court a petition for certiorari and prohibition, docketed as G.R. No. L-34683. But here, too, they failed; their petition was dismissed. 8

Thereafter, and on the basis of the additional evidence adduced by Syjuco on remand of the case from this Court, the Trial Court promulgated an amended decision on August 16, 1972, reversing its previous holding that usury had flawed the Lims’ loan obligation. It declared that the principal of said obligation indeed amounted to P2,460,000.00, exclusive of interest at the rate of 12% per annum from November 8, 1967, and, that obligation being already due, the defendants (Syjuco and the Sheriff of Manila) could proceed with the extrajudicial foreclosure of the mortgage given to secure its satisfaction. 9

2. APPEAL FROM CIVIL CASE NO. 75180; CA-G.R. NO. 51752; G.R. NO. L-45752

On September 9, 1972, Atty. Paterno R. Canlas entered his appearance in Civil Case No. 75180 as counsel for the Lims in collaboration with Atty. Raul Correa, and on the same date appealed to the Court of Appeals from the amended decision of August 16, 1972. 10 In that appeal, which was docketed as CA-G.R. No. 51752, Messrs. Canlas and Correa prayed that the loans be declared usurious; that the principal of the loans be found to be in the total amount of P1,269,505.00 only, and the interest thereon fixed at only 6% per annum from the filing of the complaint; and that the mortgage be also pronounced void ab initio. 11

The appeal met with no success. In a decision promulgated on October 25, 1976, the Court of Appeals affirmed in toto the Trial Court’s amended decision. 12

The Lims came to this Court seeking reversal of the appellate Court’s decision. However, their petition for review — filed in their behalf by Canlas, and Atty. Pio R. Marcos, and docketed as G.R. No. L-45752 — was denied for lack of merit in a minute resolution dated August 5, 1977. The Lims’ motion for reconsideration was denied and entry of judgment was made on September 24, 1977. 13 Here the matter should have ended; it marked only the beginning of Syjuco’s travails.

3. CIVIL CASE NO. 112762, CFI MANILA BRANCH 9

Syjuco then resumed its efforts to proceed with the foreclosure. It caused the auction sale of the mortgaged property to be scheduled on December 20, 1977, only to be frustrated again by another action filed by the Lims on December 19, 1977, docketed as Civil Case No. 112762 of the Court of First Instance of Manila. 14 The action sought to stop the sale on the ground that the notice of foreclosure had not been republished; this, notwithstanding that as earlier stressed, the restraining order of December 26, 1968 issued in Civil Case No 75180 explicitly declared itself to be predicated on the Lims’ waiver of "their rights to the notice and republication of the notice of sale which may be conducted at some future date." 15 An order restraining the sale issued in the case, although the petition for preliminary injunction was subsequently denied. A supplemental complaint was also filed by the Lims seeking recovery of some P1 million in damages allegedly suffered by reason of said lack of republication. 16

4. CIVIL CASE NO. 75180

That very same claim — that there had been no republication of the notice of sale, which was the foundation of the Lims’ action in Civil Case No. 112762 as aforesaid — was made by the Lims the basis of an urgent motion filed on December 15, 1977 in Civil Case No. 75180, in which, as earlier narrated, the judgment authorizing the foreclosure had been affirmed by both the Court of Appeals and this Court, and had become final and executory. And that motion sought exactly the same remedy prayed for in Civil Case No. 112762 (filed by the Lims four [4] days later, on December 19,1977), i.e., the prevention of the auction sale. The Court — Branch 5, then presided over by Judge Jose H. Tecson — granted the restraining order on December 19, 1977, 17 the very same day that the Lims commenced Civil Case No. 112762 in the same Court and in which subsequent action they asked for and obtained a similar restraining order.

The Lims’ counsel thus brought about the anomalous situation of two (2) restraining orders directed against the same auction sale, based on the same ground, issued by different courts having cognizance of two (2) separate proceedings instituted for identical objectives. This situation lasted for all of three (3) years, despite the republication of the notice of sale caused by Syjuco in January, 1978 in an effort to end all dispute about the matter, and despite Judge Tecson’s having been made aware of Civil Case No. 112762. It should have been apparent to Judge Tecson that there was nothing more to be done in Civil Case No. 75180 except to enforce the judgment, already final and executory, authorizing the extrajudicial foreclosure of the mortgage, a judgment sanctioned, to repeat, by both the Court of Appeals and the Supreme Court; that there was in truth no need for another publication of the notice since the Lims had precisely waived such republication, this waiver having been the condition under which they had earlier obtained an order restraining the first scheduled sale; that, in any event, the republication effected by Syjuco had removed the only asserted impediment to the holding of the same; and that, finally, the Lims were acting in bad faith: they were maintaining proceedings in two (2) different courts for essentially the same relief. 18 Incredibly, not only did Judge Tecson refuse to allow the holding of the auction sale, as was the only just and lawful course indicated by the circumstances, 19 he authorized the Lims to sell the mortgaged property in a private sale, 20 with the evident intention that the proceeds of the sale, which he directed to be deposited in court, would be divided between Syjuco and the Lims; this, in line with the patently specious theory advocated by the Lims’ counsel that the bond filed by them for the postponement of the sale, set at P6 million by the Court (later increased by P3 million) had superseded and caused novation of the mortgage. 21 The case lay fallow for a year, certain other incidents arising and remaining unresolved on account of numerous postponements.

5. G.R. No. L-56014

Finally, on January 28, 1981, Syjuco betook itself to this Court, presumably no longer disposed to await Judge Tecson’s pleasure or the Lims’ convenience. It filed a petition for certiorari and prohibition, docketed as G.R. No. L-56014, alleging that in Civil Case No. 75180, Judge Tecson had gravely abused discretion in:chanrob1es virtual 1aw library

(1) unreasonably delaying the foreclosure of the mortgage;

(2) entertaining the Lims’ motion to discharge said mortgage grounded on the theory that it had been superseded and novated by the Lims’ act of filing the bond required by Judge Tecson in connection with the postponement of the foreclosure sale, and unreasonably delaying resolution of the issue; and

(3) authorizing the Lims to negotiate and consummate the private sale of the mortgaged property and motu proprio extending the period granted the Lims for the purpose, in disregard of the final and executory judgment rendered in the case.

By judgment rendered on September 21, 1982, after due proceedings, this Court 22 issued the writ prayed for and nullified the orders and actuations of Judge Tecson in Civil Case No. 75180. The judgment declared that:chanrob1es virtual 1aw library

(1) the republication by Syjuco of the notice of foreclosure sale rendered the complaint in Civil Case No. 112762 moot and academic; hence, said case could not operate to bar the sale;

(2) the Lims’ bonds (of P6 million and P3 million), having by the terms thereof been given to guarantee payment of damages to Syjuco and the Sheriff of Manila resulting from the suspension of the auction sale, could not in any sense and from any aspect have the effect of superseding the mortgage or novating it;

(3) in fact, the bonds had become worthless when, as shown by the record, the bondsman’s authority to transact non-life insurance business in the Philippines was not renewed, for cause, as of July 1, 1981.

The decision consequently decreed that the Sheriff of Manila should proceed with the mortgage sale, there being no further impediment thereto. 23

Notice of the decision was served on the Lims, through Atty. Canlas, on October 2, 1982. A motion for reconsideration was filed, 24 but the same was denied with finality for lack of merit and entry of final judgment was made on March 22, 1983.25cralaw:red

6. THE SECRET ACTION: CIVIL CASE NO. Q-36845 OF THE REGIONAL TRIAL COURT, QUEZON CITY, JUDGE JOSE P. CASTRO, PRESIDING

Twelve (12) days after the Lims were served, as above mentioned, with notice of this Court’s judgment in G.R. No. 56014, or on October 14, 1982, they caused the filing with the Regional Trial Court of Quezon City of still another action, the third, also designed, like the first two, to preclude enforcement of the mortgage held by Syjuco.

This time the complaint was presented, not in their individual names, but in the name of a partnership of which they themselves were the only partners: "Heirs of Hugo Lim." The complaint advocated the theory that the mortgage which they, together with their mother, had individually constituted (and thereafter amended during the period from 1964 to 1967) over lands standing in their names in the Property Registry as owners pro indiviso, in fact no longer belonged to them at that time, having been earlier deeded over by them to the partnership, "Heirs of Hugo Lim," more precisely, on March 30, 1959, hence, said mortgage was void because executed by them without authority from the partnership.

The complaint was signed by a lawyer other than Atty. Canlas, but the records disclose that Atty. Canlas took over as counsel as of November 4, 1982. The case, docketed as Civil Case No. Q-39295, was assigned to Branch 35 of the Quezon City Regional Trial Court, then presided over by Judge Jose P. Castro.

Judge Castro issued a restraining order on October 15, 1982. Then, Sheriff Perfecto G. Dalangin submitted a return of summons to the effect that on December 6, 1982 he —

". . . served personally and left a copy of summons together with a copy of Complaint and its annexes . . . upon defendant’s office formerly at 313 Quirino Ave., Parañaque, Metro-Manila and now at 407 Doña Felisa Syjuco Building, Remedios St., corner Taft Avenue, Manila, through the Manager, a person of sufficient age and discretion, duly authorized to receive service of such nature, but who refused to accept service and signed receipt thereof." 26

A vaguer return will be hard to find. It is impossible to discern from it where precisely the summons was served, whether at Quirino Avenue, Parañaque, or Taft Avenue, Manila; and it is inexplicable that the name of the person that the sheriff had been able to identify as the manager is not stated, the latter being described merely as "a person of sufficient age and discretion." In any event, as it was to claim later, Syjuco asserts that it was never so served with summons, or with any other notice, pleading, or motion relative to the case, for that matter.

On February 10, 1983, Atty. Canlas filed an ex parte motion to declare Syjuco in default. The order of default issued the next day, also directing the plaintiff partnership to present evidence ex parte within three (3) days. On February 22, 1983, judgment by default was rendered, declaring void the mortgage in question because executed by the Lims without authority from the partnership which was and had been since March 30, 1959 the exclusive owner of the mortgaged property, and making permanent an injunction against the foreclosure sale that had issued on January 14, 1983. 27 Service of notice of the default judgment was, according to the return of the same Sheriff Perfecto Dalangin, effected on the following day, February 23, 1983. His return is a virtual copy of his earlier one regarding service of summons: it also states the place of service as the defendant’s office, either at its former location, 313 Quirino Avenue, Parañaque, or at the later address, 407 Doña Felisa, Syjuco Building, Taft Avenue, Manila; and it also fails to identify the person on whom service was made, describing him only as "the clerk or person in charge" of the office. 28

Unaccountably, and contrary to what might be expected from the rapidity with which it was decided — twelve (12) days from February 10, 1983, when the motion to declare defendant Syjuco in default was filed — the case was afterwards allowed by Atty. Canlas to remain dormant for seventeen (17) months. He made no effort to have the judgment executed, or to avail of it in other actions instituted by him against Syjuco. The judgment was not to be invoked until sometime in or after July, 1984, again to stop the extrajudicial mortgage sale scheduled at or about that time at the instance of Syjuco, as shall presently be recounted.

7. Other Actions in the Interim:chanrob1es virtual 1aw library

a. CIVIL CASE NO. 83-19018, RTC MANILA

While the Lims, through their partnership ("Heirs of Hugo Lim"), were prosecuting their action in the sala of Judge Castro, as above narrated, Syjuco once again tried to proceed with the foreclosure after entry of judgment had been made in G.R. No. 56014 on March 22, 1983. It scheduled the auction sale on July 30, 1983. But once again it was frustrated. Another obstacle was put up by the Lims and their counsel, Atty. Canlas. This was Civil Case No. 83-19018 of the Manila Regional Trial Court. The case was filed to stop the sale on the theory that what was sought to be realized from the sale was much in excess of the judgment in Civil Case No. 75180, and that there was absence of the requisite notice. It is significant that the judgment by default rendered by Judge Castro in Civil Case No. Q-36485 was not asserted as additional ground to support the cause of action. Be this as it may, a restraining order was issued on July 20,1983 in said Civil Case No. 83-19018. 29

b. CIVIL CASE NO. Q-32924, RTC QUEZON CITY

What the outcome of this case, No. 83-19018, is not clear. What is certain is (1) that the auction sale was re-scheduled for September 20, 1983, (2) that it was aborted because the Lims managed to obtain still another restraining order in another case commenced by their lawyer, Atty. Canlas: Civil Case No. Q-32924 of the Court of First Instance of Quezon City, grounded on the proposition that the publication of the notice of sale was defective; and (3) that the action was dismissed by the Regional Trial Court on February 3, 1984. 30

No other salient details about these two (2) cases are available in the voluminous records before the Court, except that it was Atty. Canlas who had filed them. He admits having done so unequivocally: "Thus, the undersigned counsel filed injunction cases in Civil Case No. 83-19018 and Civil Case No. 39294, Regional Trial Courts of Manila and Quezon City. . ." 31

7. REACTIVATION OF CIVIL CASE NO. Q-36485, RTC, QUEZON CITY, BRANCH XXXV

Upon the dismissal of Civil Case No. 39294, Syjuco once more resumed its efforts to effect the mortgage sale which had already been stymied for more than fifteen (15) years. At its instance, the sheriff once again set a date for the auction sale. But on the date of the sale, a letter of Atty. Canlas was handed to the sheriff drawing attention to the permanent injunction of the sale embodied in the judgment by default rendered by Judge Castro in Civil Case No. Q-36485. 32 Syjuco lost no time in inquiring about Civil Case No. Q-36485, and was very quickly made aware of the judgment by default therein promulgated and the antecedent events leading thereto. It was also made known that on July 9, 1984, Judge Castro had ordered execution of the judgment; that Judge Castro had on July 16, 1984 granted Atty. Canlas’ motion to declare cancelled the titles to the Lims’ mortgaged properties and as null and void the annotation of the mortgage and its amendments on said titles, and to direct the Register of Deeds of Manila to issue new titles, in lieu of the old, in the name of the partnership, "Heirs of Hugo Lim." 33

On July 17, 1984, Syjuco filed in said Civil Case No. Q-36485 a motion for reconsideration of the decision and for dismissal of the action, alleging that it had never been served with summons; that granting arguendo that service had somehow been made, it had never received notice of the decision and therefore the same had not and could not have become final; and that the action should be dismissed on the ground of bar by prior judgment premised on the final decisions of the Supreme Court in G.R. No. L-45752 and G.R. No. 56014.

Two other motions by Syjuco quickly followed. The first, dated July 20, 1984, prayed for abatement of Judge Castro’s order decreeing the issuance of new certificates of title over the mortgaged lands in the name of the plaintiff partnership. 34 The second, filed on July 24, 1984, was a supplement to the motion to dismiss earlier filed, asserting another ground for the dismissal of the action, i.e., failure to state a cause of action, it appearing that the mortgaged property remained registered in the names of the individual members of the Lim family notwithstanding that the property had supposedly been conveyed to the plaintiff partnership long before the execution of the mortgage and its amendments, — and that even assuming ownership of the property by the partnership, the mortgage executed by all the partners was valid and binding under Articles 1811 and 1819 of the Civil Code. 35

The motions having been opposed in due course by the plaintiff partnership, they remained pending until January 31, 1985 when Syjuco moved for their immediate resolution. Syjuco now claims that Judge Castro never acted on the motions. The latter however states that he did issue an order on February 22, 1985 declaring that he had lost jurisdiction to act thereon because, petitio principii, his decision had already become final and executory.

8. G.R. NO. L-70403; THE PROCEEDING AT BAR

For the third time Syjuco is now before this Court on the same matter. It filed on April 3, 1985 the instant petition for certiorari, prohibition and mandamus. It prays in its petition that the default judgment rendered against it by Judge Castro in said Civil Case No. Q-36485 be annulled on the ground of lack of service of summons, res judicata and laches, and failure of the complaint to state a cause of action; that the sheriff be commanded to proceed with the foreclosure of the mortgage on the property covered by Transfer Certificates of Title Numbered 75413, 75415, 75416 and 75418 of the Manila Registry; and that the respondents — the Lims, Judge Castro, the Sheriff and the Register of Deeds of Manila, the partnership known as "Heirs of Hugo Lim," and Atty. Paterno R. Canlas, counsel for the Lims and their partnership — be perpetually enjoined from taking any further steps to prevent the foreclosure.

The comment filed for the respondents by Atty. Canlas in substance alleged that (a) Syjuco was validly served with summons in Civil Case No. Q-36485, hence, that the decision rendered by default therein was also valid and, having been also duly served on said petitioner, became final by operation of law after the lapse of the reglementary appeal period; (b) finality of said decision removed the case from the jurisdiction of the trial court, which was powerless to entertain and act on the motion for reconsideration and motion to dismiss; (c) the petition was in effect an action to annul a judgment, a proceeding within the original jurisdiction of the Court of Appeals; (d) the plea of res judicata came too late because raised after the decision had already become final; moreover, no identity of parties existed between the cases invoked, on the one hand, and Civil Case No. Q-36485, on the other, the parties in the former being the Lims in their personal capacities and in the latter, the Lim Partnership, a separate and distinct juridical entity; and the pleaded causes of action being different, usury in the earlier cases and authority of the parties to encumber partnership property in the case under review; (e) the plea of laches also came too late, not having been invoked in the lower court; and (f) the property involved constituted assets of the Lim partnership, being registered as such with the Securities and Exchange Commission. 36

On his own behalf Atty. Canlas submitted that he had no knowledge of the institution of Civil Case No. Q-36485 (though he admitted being collaborating counsel in said case); that he did not represent the Lims in all their cases against Syjuco, having been counsel for the former only since 1977, not for the last seventeen years as claimed by Syjuco; and that he had no duty to inform opposing counsel of the pendency of Civil Case No. Q-36485. 37

Respondent Judge Castro also filed a comment 38 disclaiming knowledge of previous controversies regarding the mortgaged property. He asserted that Syjuco had been properly declared in default for having failed to answer the complaint despite service of summons upon it, and that his decision in said case which was also properly served on Syjuco became final when it was not timely appealed, after which he lost jurisdiction to entertain the motion for reconsideration and motion to dismiss. He also denied having failed to act on said motions, adverting to an alleged order of February 22, 1985 where he declared his lack of jurisdiction to act thereon.

The respondent Register of Deeds for his part presented a comment wherein he stated that by virtue of an order of execution in Civil Case No. Q-36485, he had cancelled TCT’s Nos. 75413, 75415, 75416 and 75418 of his Registry and prepared new certificates of title in lieu thereof, but that cancellation had been held in abeyance for lack of certain registration requirements and by reason also of the motion of Syjuco’s Atty. Formoso to hold in abeyance enforcement of the trial court’s order of July 16, 1984 as well as of the temporary restraining order subsequently issued by the Court. 39

It is time to write finis to this unedifying narrative which is notable chiefly for the deception, deviousness and trickery which have marked the private respondents’ thus far successful attempts to avoid the payment of a just obligation. The record of the present proceeding and the other records already referred to, which the Court has examined at length, make it clear that the dispute should have been laid to rest more than eleven years ago, with entry of judgment of this Court (on September 24, 1977) in G.R. No. L-45752 sealing the fate of the Lims’ appeal against the amended decision in Civil Case No. 75180 where they had originally questioned the validity of the mortgage and its foreclosure. That result, the records also show, had itself been nine (9) years in coming, Civil Case No. 75180 having been instituted in December 1968 and, after trial and judgment, gone through the Court of Appeals (in CA-G.R. No. 00242-R) and this Court (in G.R. No. 34683), both at the instance of the Lims, on the question of reopening before the amended decision could be issued.

Unwilling, however, to concede defeat, the Lims moved (in Civil Case No. 75180) to stop the foreclosure sale on the ground of lack of republication. On December 19, 1977 they obtained a restraining order in said case, but this notwithstanding, on the very same date they filed another action (Civil Case No. 117262) in a different branch of the same Court of First Instance of Manila to enjoin the foreclosure sale on the same ground of alleged lack of republication. At about this time, Syjuco republished the notice of sale in order, as it was later to manifest, to end all further dispute.

That move met with no success. The Lims managed to persuade the judge in Civil Case No. 75180, notwithstanding his conviction that the amended decision in said case had already become final, not only to halt the foreclosure sale but also to authorize said respondents to dispose of the mortgaged property at a private sale upon posting a bond of P6,000,000.00 (later increased by P3,000,000.00) to guarantee payment of Syjuco’s mortgage credit. This gave the Lims a convenient excuse for further suspension of the foreclosure sale by introducing a new wrinkle into their contentions - that the bond superseded the mortgage which should, they claimed, therefore be discharged instead of foreclosed.

Thus from the final months of 1977 until the end of 1980, a period of three years, Syjuco found itself fighting a legal battle on two fronts: in the already finally decided Civil Case No. 75180 and in Civil Case No. 117262, upon the single issue of alleged lack of republication, an issue already mooted by the Lims’ earlier waiver of republication as a condition for the issuance of the original restraining order of December 26, 1968 in Civil Case No. 75180, not to mention the fact that said petitioner had also tried to put an end to it by actually republishing the notice of sale.

With the advent of 1981, its pleas for early resolution having apparently fallen on deaf ears, Syjuco went to this Court (in G.R. No. L-56014) from which, on September 21, 1982, it obtained the decision already referred to holding, in fine, that there existed no further impediment to the foreclosure sale and that the sheriff could proceed with the same.

Said decision, instead of deterring further attempts to derail the foreclosure, apparently gave the signal for the clandestine filing — this time by the Partnership of the Heirs of Hugo Lim — on October 14, 1982 of Civil Case No. Q-36485, the subject of the present petition, which for the first time asserted the claim that the mortgaged property had been contributed to the plaintiff partnership long before the execution of the Syjuco’s mortgage in order to defeat the foreclosure.

Syjuco now maintains that it had no actual knowledge of the existence and pendency of Civil Case No. Q-36485 until confronted, in the manner already adverted to, with the fait accompli of a "final" judgment with permanent injunction therein, and nothing in the record disabuses the Court about the truth of this disclaimer. Indeed, considering what had transpired up to that denouement, it becomes quite evident that actuations of the Lims and their lawyer had been geared to keeping Syjuco in the dark about said case. Their filing of two other cases also seeking to enjoin the foreclosure sale (Civil Case No. 83-19018, Regional Trial Court of Manila in July 1983, and Civil Case No. Q-32924, Regional Trial Court of Quezon City in September of the same year) after said sale had already been permanently enjoined by default judgment in Civil Case No. Q-36485, appears in retrospect to be nothing but a brace of feints calculated to keep Syjuco in that state of ignorance and to lull any apprehensions it may have harbored about encountering further surprises from any other quarter.

Further credence is lent to this appraisal by the unusually rapid movement of Civil Case No. Q-36485 itself in its earlier stages; which saw the motion to declare Syjuco in default filed, an order of default issued, evidence ex parte for the plaintiffs received and judgment by default rendered, all within the brief span of twelve days, February 10-22, 1983. Notice of said judgment was "served" on February 23, 1983, the day after it was handed down, only to be followed by an unaccountable lull of well over a year before it was ordered executed on July 9, 1984 — unaccountable, considering that previous flurry of activity, except in the context of a plan to rush the case to judgment and then divert Syjuco’s attention to the Lims’ moves in other directions so as to prevent discovery of the existence of the case until it was too late.

The Court cannot but condemn in the strongest terms this trifling with the judicial process which degrades the administration of justice, mocks, subverts and misuses that process for purely dilatory purposes, thus tending to bring it into disrepute, and seriously erodes public confidence in the will and competence of the courts to dispense swift justice.

Upon the facts, the only defense to the foreclosure that could possibly have merited the full-blown trial and appeal proceedings it actually went through was that of alleged usury pleaded in Civil Case No. 75180 and finally decided against the respondent Lims in G.R. No. L-45752 in September 1977. The other issues of failure to republish and discharge of mortgage by guarantee set up in succeeding actions were sham issues, questions without substance raised only for purposes of delay by the private respondents, in which they succeeded only too well. The claim urged in this latest case: that the mortgaged property had been contributed to the respondent partnership and was already property of said partnership when the individual Lims unauthorizedly mortgaged it to Syjuco, is of no better stripe, and this, too, is clear from the undisputed facts and the legal conclusions to be drawn therefrom.

The record shows that the respondent partnership is composed exclusively of the individual Lims in whose name all the cases herein referred to, with the sole exception of Civil Case No. Q-36485, were brought and prosecuted, their contribution to the partnership consisting chiefly, if not solely, of the property subject of the Syjuco mortgage. It is also a fact that despite its having been contributed to the partnership, allegedly on March 30, 1959, the property was never registered with the Register of Deeds in the name of the partnership, but to this date remains registered in the names of the Lims as owners in common. The original mortgage deed of November 14, 1964 was executed by the Lims as such owners, as were all subsequent amendments of the mortgage. There can be no dispute that in those circumstances, the respondent partnership was chargeable with knowledge of the mortgage from the moment of its execution. The legal fiction of a separate juridical personality and existence will not shield it from the conclusion of having such knowledge which naturally and irresistibly flows from the undenied facts. It would violate all precepts of reason, ordinary experience and common sense to propose that a partnership, as such, cannot be held accountable with knowledge of matters commonly known to all the partners or of acts in which all of the latter, without exception, have taken part, where such matters or acts affect property claimed as its own by said partnership.

If, therefore, the respondent partnership was inescapably chargeable with knowledge of the mortgage executed by all the partners thereof, its silence and failure to impugn said mortgage within a reasonable time, let alone a space of more than seventeen years, brought into play the doctrine of estoppel to preclude any attempt to avoid the mortgage as allegedly unauthorized.

The principles of equitable estoppel, sometimes called estoppel in pais, are made part of our law by Art. 1432 of the Civil Code. Coming under this class is estoppel by silence, which obtains here and as to which it has been held that:jgc:chanrobles.com.ph

". . . an estoppel may arise from silence as well as from words.’Estoppel by silence’ arises where a person, who by force of circumstances is under a duty to another to speak, refrains from doing so and thereby leads the other to believe in the existence of a state of facts in reliance on which he acts to his prejudice. Silence may support an estoppel whether the failure to speak is intentional or negligent.

"Inaction or silence may under some circumstances amount to a misrepresentation and concealment of the facts, so as to raise an equitable estoppel. When the silence is of such a character and under such circumstances that it would become a fraud on the other party to permit the party who has kept silent to deny what his silence has induced the other to believe and act on, it will operate as an estoppel. This doctrine rests on the principle that if one maintains silence, when in conscience he ought to speak, equity will debar him from speaking when in conscience he ought to remain silent. He who remains silent when he ought to speak cannot be heard to speak when he should be silent." 40

And more to the point:jgc:chanrobles.com.ph

"A property owner who knowingly permits another to sell or encumber the property, without disclosing his title or objecting to the transaction, is estopped to set up his title or interest as against a person who has been thereby misled to his injury.

x x x

"An owner of real property who stands by and sees a third person selling or mortgaging it under claim of title without asserting his own title or giving the purchaser or mortgagee any notice thereof is estopped, as against such purchaser or mortgagee, afterward to assert his title; and, although title does not pass under these circumstances, a conveyance will be decreed by a court of equity. Especially is the rule applicable where the party against whom the estoppel is claimed, in addition to standing by, takes part in making the sale or mortgage." 41

"More specifically, the concept to which that species of estoppel which results from the nondisclosure of an estate or interest in real property has ordinarily been referred is fraud, actual or constructive . . . Although fraud is not an essential element of the original conduct working the estoppel, it may with perfect property be said that it would be fraudulent for the party to repudiate his conduct, and to assert a right or claim in contravention thereof." 42

Equally or even more preclusive of the respondent partnership’s claim to the mortgaged property is the last paragraph of Article 1819 of the Civil Code, which contemplates a situation duplicating the circumstances that attended the execution of the mortgage in favor of Syjuco and therefore applies foursquare thereto:jgc:chanrobles.com.ph

"Where the title to real property is in the names of all the partners a conveyance executed by all the partners passes all their rights in such property."cralaw virtua1aw library

The term "conveyance" used in said provision, which is taken from Section 10 of the American Uniform Partnership Act, includes a mortgage.

"Interpreting Sec. 10 of the Uniform Partnership Act, it has been held that the right to mortgage is included in the right to convey. This is different from the rule in agency that a special power to sell excludes the power to mortgage (Art. 1879)." 43

As indisputable as the propositions and principles just stated is that the cause of action in Civil Case No. Q-36485 is barred by prior judgment. The right subsumed in that cause is the negation of the mortgage, postulated on the claim that the parcels of land mortgaged by the Lims to Syjuco did not in truth belong to them but to the partnership. Assuming this to be so, the right could have been asserted at the time that the Lims instituted their first action on December 24,1968 in the Manila Court of First Instance, Civil Case No. 75180, or when they filed their subsequent actions: Civil Case No. 112762, on December 19, 1977; Civil Case No. 83-19018, in 1983, and Civil Case No. Q-39294, also in 1983. The claim could have been set up by the Lims, as members composing the partnership, "Heirs of Hugo Lim." It could very well have been put forth by the partnership itself, as co-plaintiff in the corresponding complaints, considering that the actions involved property supposedly belonging to it and were being prosecuted by the entire membership of the partnership, and therefore, the partnership was in actuality, the real party in interest. In fact, consistently with the Lims’ theory, they should be regarded, in all the actions presented by them, as having sued for vindication, not of their individual rights over the property mortgaged, but those of the partnership. There is thus no reason to distinguish between the Lims, as individuals, and the partnership itself, since the former constituted the entire membership of the latter. In other words, despite the concealment of the existence of the partnership, for all intents and purposes and consistently with the Lims’ own theory, it was that partnership which was the real party in interest in all the actions; it was actually represented in said actions by all the individual members thereof, and consequently, those members’ acts, declarations and omissions cannot be deemed to be simply the individual acts of said members, but in fact and in law, those of the partnership.

What was done by the Lims — or by the partnership of which they were the only members — was to split their cause of action in violation of the well known rule that only one suit may be instituted for a single cause of action. 44 The right sought to be enforced by them in all their actions was, at bottom, to strike down the mortgage constituted in favor of Syjuco, a right which, in their view, resulted from several circumstances, namely that the mortgage was constituted over property belonging to the partnership without the latter’s authority; that the principal obligation thereby secured was usurious; that the publication of the notice of foreclosure sale was fatally defective, circumstances which had already taken place at the time of the institution of the actions. They instituted four (4) actions for the same purpose on one ground or the other, making each ground the subject of a separate action. Upon these premises, application of the sanction indicated by law is called for, i.e., the judgment on the merits in any one is available as a bar in the others. 45

The first judgment — rendered in Civil Case No. 75180 and affirmed by both the Court of Appeals (CA-G.R. No. 51752) and this Court (G.R. No. L-45752) should therefore have barred all the others, all the requisites of res judicata being present. The judgment was a final and executory judgment; it had been rendered by a competent court; and there was, between the first and subsequent cases, not only identity of subject-matter and of cause of action, but also of parties. As already pointed out, the plaintiffs in the first four (4) actions, the Lims, were representing exactly the same claims as those of the partnership, the plaintiff in the fifth and last action, of which partnership they were the only members, and there was hence no substantial difference as regards the parties plaintiff in all the actions. Under the doctrine of res judicata, the judgment in the first was and should have been regarded as conclusive in all other actions not only "with respect to the matter directly adjudged," but also "as to any other matter that could have been raised in relation thereto." 46 It being indisputable that the matter of the partnership’s being the owner of the mortgaged properties "could have been raised in relation" to those expressly made issuable in the first action, it follows that matter could not be re-litigated in the last action, the fifth.

Though confronted with the facts thus precluding the respondent partnership’s claim to the property under both the principle of estoppel and the provisions of Article 1819, last paragraph, of the Civil Code, as well as the familiar doctrine of res judicata, the respondent Judge refused to act on Syjuco’s motions on the ground that he no longer had jurisdiction to do so because they were filed after judgment by default against Syjuco, which failed to answer the complaint despite valid service of summons, had been rendered and become final. The sheriff’s return, however, creates grave doubts about the correctness of the Judge’s basic premise that summons had been validly served on Syjuco. For one thing, the return 47 is unspecific about where service was effected. No safe conclusion about the place of service can be made from its reference to a former and a present office of Syjuco in widely separate locations, with nothing to indicate whether service was effected at one address or the other, or even at both. A more serious defect is the failure to name the person served who is, with equal ambiguity, identified only as "the Manager" of the defendant corporation (petitioner herein). Since the sheriff’s return constitutes primary evidence of the manner and incidents of personal service of a summons, the Rules are quite specific about what such a document should contain:jgc:chanrobles.com.ph

"SEC. 20. Proof of service. — The proof of service of a summons shall be made in writing by the server and shall set forth the manner, place and date of service; shall specify any papers which have been served with the process and the name of the person who received the same; and shall be sworn to when made by a person other than a sheriff or his deputy." 48

In the case of Delta Motor Sales Corporation v. Mangosing 49 it was held that:jgc:chanrobles.com.ph

"(a) strict compliance with the mode of service is necessary to confer jurisdiction of the court over a corporation. The officer upon whom service is made must be one who is named in the statute; otherwise the service is insufficient. So, where the statute requires that in the case of a domestic corporation summons should be served on `the president or head of the corporation, secretary, treasurer, cashier or managing agent thereof’, service of summons on the secretary’s wife did not confer jurisdiction over the corporation in the foreclosure proceeding against it. Hence, the decree of foreclosure and the deficiency judgment were void and should be vacated (Reader v. District Court, 94 Pacific 2nd 858).

"The purpose is to render it reasonably certain that the corporation will receive prompt and proper notice in an action against it or to insure that the summons be served on a representative so integrated with the corporation that such person will know what to do with the legal papers served on him. In other words, `to bring home to the corporation notice of the filing of the action’. (35 A C.J.S. 288 citing Jenkins v. Lykes Bros. S.S. Co., 48 F. Supp. 848; MacCarthy v. Langston, D.C. Fla., 23 F.R.D. 249).

"The liberal construction rule cannot be invoked and utilized as a substitute for the plain legal requirements as to the manner in which summons should be served on a domestic corporation (U.S. v. Mollenhauer Laboratories, Inc., 267 Fed. Rep. 2nd 260)."cralaw virtua1aw library

The rule cannot be any less exacting as regards adherence to the requirements of proof of service, it being usually by such proof that sufficiency of compliance with the prescribed mode of service is measured. Here the only proof of service of summons is the questioned sheriff’s return which, as already pointed out, is not only vague and unspecific as to the place of service, but also neglects to identify by name the recipient of the summons as required by Rule 20, Section 14, of the Rules of Court. Where the sheriff’s return is defective the presumption of regularity in the performance of official functions will not lie. 50 The defective sheriff’s return thus being insufficient and incompetent to prove that summons was served in the manner prescribed for service upon corporations, there is no alternative to affirming the petitioner’s claim that it had not been validly summoned in Civil Case No. Q-36485. It goes without saying that lacking such valid service, the Trial Court did not acquire jurisdiction over the petitioner Syjuco, rendering null and void all subsequent proceedings and issuances in the action from the order of default up to and including the judgment by default and the order for its execution. 51

The respondents’ contention that the petition is in effect an action to annul a judgment which is within the exclusive original jurisdiction of the Court of Appeals 52 has already been answered in Matanguihan v. Tengco 53 where, by declaring that an action for annulment of judgment is not a plain, speedy and adequate remedy, this Court in effect affirmed that certiorari is an appropriate remedy against judgments or proceedings alleged to have been rendered or had without valid service of summons. 54

Respondent Judge Castro begged the question when, instead of resolving on the merits the issue of the invalidity of his default judgment and of the proceedings leading thereto because of absence of valid service of summons on the defendant, which had been expressly raised in the defendant’s motion for reconsideration, he simply refused to do so on the excuse that he had lost jurisdiction over the case. This refusal was, in the premises, a grave abuse of judicial discretion which must be rectified.

What has been said makes unnecessary any further proceedings in the Court below, which might otherwise be indicated by the consideration that two of the postulates of petitioner’s unresolved motions which the Court considers equally as decisive as res judicata, to wit: estoppel by silence and Article 1819, last paragraph, of the Civil Code, do not constitute grounds for a motion to dismiss under rule 16, of the Rules of Court. Such a step would only cause further delay. And delay has been the bane of petitioner’s cause, defying through all these years all its efforts to collect on a just debt.

The undenied and undisputable facts make it perfectly clear that the claim to the mortgaged property belatedly and in apparent bad faith pressed by the respondent partnership is foreclosed by both law and equity. Further proceedings will not make this any clearer than it already is. The Court is clothed with ample authority, in such a case, to call a halt to all further proceedings and pronounce judgment on the basis of what is already manifestly of record.

So much for the merits; the consequences that should attend the inexcusable and indefensible conduct of the respondents Lims, the respondent partnership and their counsel, Atty. Paterno R. Canlas, should now be addressed. That the Lims and their partnership acted in bad faith and with intent to defraud is manifest in the record of their actuations, presenting as they did, piecemeal and in one case after another, defenses to the foreclosure or claims in derogation thereof that were available to them from the very beginning — actuations that were to stave off the liquidation of an undenied debt for more than twenty years and culminated in the clandestine filing and prosecution of the action subject of the present petition.

What has happened here, it bears repeating, is nothing less than an abuse of process, a trifling with the courts and with the rights of access thereto, for which Atty. Canlas must share responsibility equally with his clients. The latter could not have succeeded so well in obstructing the course of justice without his aid and advice and his tireless espousal of their claims and pretensions made in the various cases chronicled here. That the cause to which he lent his advocacy was less than just or worthy could not have escaped him, if not at the start of his engagement, in the years that followed when with his willing assistance, if not instigation, it was shuttled from one forum to another after each setback. This Court merely stated what is obvious and cannot be gainsaid when, in Surigao Mineral Reservation Board v. Cloribel, 55 it held that a party’s lawyer of record has control of the proceedings and that" (w)hatever steps his client takes should be within his knowledge and responsibility."cralaw virtua1aw library

In Prudential Bank v. Castro, 56 strikingly similar actuations in a case, which are described in the following paragraph taken from this Court’s decision therein:jgc:chanrobles.com.ph

"Respondents’ foregoing actuations reveal an ‘unholy alliance’ between them and a clear indication of partiality for the party represented by the other to the detriment of the objective dispensation of justice. Writs of Attachment and Execution were issued and implemented with lightning speed; the case itself was railroaded to a swift conclusion through a similar judgment; astronomical sums were awarded as damages and attorney’s fees; and topping it all, the right to appeal was foreclosed by clever maneuvers," and which, the Court found, followed a pattern of conduct in other cases of which judicial notice was taken, were deemed sufficient cause for disbarment.

Atty. Canlas even tried to mislead this Court by claiming that he became the Lims’ lawyer only in 1977, 57 when the record indubitably shows that he has represented them since September 9, 1972 when he first appeared for them to prosecute their appeal in Civil Case No. 75180. 58 He has also quite impenitently disclaimed a duty to inform opposing counsel in Civil Case No. Q-39294 of the existence of Civil Case No. Q-36485, as plaintiffs’ counsel in both actions, even while the former, which involved the same mortgage, was already being litigated when the latter was filed, although in the circumstances such disclosure was required by the ethics of his profession, if not indeed by his lawyer’s oath.

A clear case also exists for awarding at least nominal damages to petitioner, though damages are not expressly prayed for, under the general prayer of the petition for "such other reliefs as may be just and equitable under the premises," and the action being not only of certiorari and prohibition, but also of mandamus — in which the payment of "damages sustained by the petitioner by reason of the wrongful acts of the defendant" is expressly authorized. 59

There is no question in the Court’s mind that such interests as may have accumulated on the mortgage loan will not offset the prejudice visited upon the petitioner by the excruciatingly long delay in the satisfaction of said debt that the private respondents have engineered and fomented.

These very same considerations dictate the imposition of exemplary damages in accordance with Art. 2229 of the Civil Code.

WHEREFORE, so that complete justice may be dispensed here and, as far as consistent with that end, all the matters and incidents with which these proceedings are concerned may be brought to a swift conclusion:chanrob1es virtual 1aw library

(1) the assailed judgment by default in Civil Case No. Q-36485, the writ of execution and all other orders issued in implementation thereof, and all proceedings in the case leading to said judgment after the filing of the complaint are DECLARED null and void and are hereby SET ASIDE; and the complaint in said case is DISMISSED for being barred by prior judgment and estoppel, and for lack of merit;

(2) the City Sheriff of Manila is ORDERED, upon receipt of this Decision, to schedule forthwith and thereafter conduct with all due dispatch the sale at public auction of the mortgaged property in question for the satisfaction of the mortgage debt of the respondents Lims to petitioner, in the principal amount of P2,460,000.00 as found in the amended decision in Civil Case No. 75180 of the Court of First Instance of Manila, interests thereon at the rate of twelve (12%) percent per annum from November 8, 1967 until the date of sale, plus such other and additional sums for commissions, expenses, fees, etc. as may be lawfully chargeable in extrajudicial foreclosure and sale proceedings;

(3) the private respondents, their successors and assigns, are PERPETUALLY ENJOINED from taking any action whatsoever to obstruct, delay or prevent said auction sale;

(4) the private respondents (the Lims, the Partnership of the Heirs of Hugo Lim and Atty. Paterno R. Canlas) are sentenced, jointly and severally, to pay the petitioner P25,000.00 as nominal damages and P100,000.00 as exemplary damages, as well as treble costs; and

(5) let this matter be referred to the Integrated Bar of the Philippines for investigation, report, and recommendation insofar as the conduct of Atty. Canlas as counsel in this case and in the other cases hereinabove referred to is concerned.

SO ORDERED.

Cruz, Gancayco, Griño-Aquino and Medialdea, JJ., concur.

Endnotes:

1. Record on Appeal, Civil Case No. 75180, pp. 3-4, 10, 35, Rollo, G.R. No. 45752, p. 197.

2. Civil Cases Numbered 75180 (CFI, Manila), 112762 (CFI, Manila), 83-19018 (RTC, Manila), Q-32924 (RTC, QC), and Q-36485 (RTC, QC).

3. CA-G.R. No. 00242-R; CA-G.R. No. 51752.

4. G.R. No. L-34683; G.R. No. L-45752; G.R. No. L-56014.

5. Record on Appeal, Civil Case No. 75180, pp. 1-13, 32, 33; Rollo G.R. No. L-45752, p. 197.

6. Later Associate Justice of the Supreme Court and now Ombudsman.

7. Rollo, G.R. No. L-45752, pp. 316-338.

8. Rollo, G.R. No. L-45752. pp. 211-214.

9. Record on Appeal, Civil Case No. 75180, pp. 683-737; Rollo, G.R. No. L-45752, p. 197.

10. Record on Appeal, Civil Case No. 75180, pp. 737-740; Rollo, G.R. No. L-45752, p. 197.

11. Rollo, G.R. No. L-45752, p. 198.

12. Id, pp. 105-134.

13. Id, at pp. 244 et seq.

14. Branch 9, presided over by Hon. Manuel Reyes, later Associate Justice, C.A.

15. SEE footnote 5 at p. 3, supra.

16. Rollo, G.R. No. L-56014, p. 5.

17. Referred to in the later Order of February 19, 1979 in Civil Case No. 75180; Rollo, G.R. No. 56014, p. 27.

18. His Honor was made aware of Civil Case No. 112762 when the Lims filed a motion for the consolidation of that case with Civil Case No. 75180.

19. Rollo, G.R. No. 56014, p. 27 (Order, Feb. 19,1979, supra; p. 28 (order March 6, 1979).

20. Id., pp. 103-106 (Order, Aug. 10, 1979); pp. 151-152 (Orders, Nov. 26, 1979 and Jan. 28, 1980).

21. Id., pp. 89-93, 94-97.

22. Second Division, per Barredo, J.

23. Rollo, G.R. No. 56014, pp. 415-423.

24. Id., pp. 424-442.

25. Id., pp. 498-500.

26. Rollo, G.R. No. 70403, p. 65.

27. Rollo, G.R. No. 70403, pp. 66-68 (Annex E, Petition).

28. Id., p. 69.

29. Rollo, G.R. No. 70403, p. 222.

30. Id., p. 223.

31. His comment dated June 7, 1985; Rollo, G.R. No. 70403, p. 226.

32. Rollo, G.R. No. 70403, p. 9.

33. Rollo, G.R. No. 70403, pp. 191-194.

34. Id., pp. 83-85.

35. Id., pp. 86-93.

36. Rollo, G.R. No. L-70403, pp. 221-250.

37. Id., at pp. 223, 225, 227.

38. Id, pp. 265-271.

39. Rollo, G.R. No. L-70403, pp. 171-172.

40. 31 C.J.S. pp. 490-494.

41. Id., pp. 498-499.

42. 28 Am. Jur. 2d pp. 727.

43. Padilla, Civil Code, 1987 ed., Vol. VI, p. 153; see also Tolentino, Civil Code, 1959 ed., Vol. V, p. 303, citing Bosler v. Sealfon, 82 Pa. Sup. Ct., 254.

44. Sec. 3, Rule 2, Rules of Court.

45. Sec. 4, Rule 2, Rules of Court.

46. Sec. 49, Rule 39, Rules of Court, which provides that the effect of a judgment rendered by a court having jurisdiction is, in proceedings other than those in rem, "with respect to the matter directly adjudged or as to any other matter that could have been raised in relation thereto, conclusive between the parties and their successors in interest by title subsequent to the commencement of the action or special proceeding, litigating for the same thing and under the same title and in the same capacity."cralaw virtua1aw library

47. SEE footnote 26 at p. 12, supra.

48. Rule 14, Rules of Court (Emphasis supplied).

49. 70 SCRA 598, 602-603.

50. Venturanza v. CA, 156 SCRA 305, 313.

51. I. Moran, Comments on the Rules of Court, 1979 ed., p. 435, citing Salmon, Et. Al. v. Tan Cuenco, 36 Phil. 556, Echevarria v. Parsons Hardware Co., 51 Phil. 980, and Reyes v. Paz, 60 Phil. 440; see also Keister v. Navarro, 77 SCRA 209, citing Pantaleon v. Asuncion, 105 Phil. 761, Gov’t. v. Bator, 69 Phil. 130, Caneda v. CA, 116 Phil. 283, and Trimica, Inc. v. Polaris Marketing Corp., 60 SCRA 321-325; I Francisco’s Revised Rules of Court, 2nd ed., p. 761.

52. Sec. 9 (2) B.P. 129, The Judiciary Reorganization Act of 1980.

53. 95 SCRA 478, 485.

54. See also the following cases where the Court took cognizance of, and resolved, similar petitions without regard to the question of whether or not an action for annulment was the appropriate recourse;

55. 31 SCRA 1, 23.

56. 155 SCRA 604, 621.

57. Rollo, G.R. No. L-70403, p. 225.

58. SEE footnote 10 on p. 5, supra.

59. Rule 65, Sec. 3, Rules of Court.

G.R. No. 84362 July 7, 1989 - PEOPLE OF THE PHIL. v. FERNANDO PEREZ

2012-11-11T16:53:05+00:00

THIRD DIVISION

[G.R. No. 84362. July 7, 1989.]

PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. FERNANDO PEREZ alias "ROGELIO PEREZ", Accused-Appellant.

The Solicitor General for Plaintiff-Appellee.

Bartolome P. Reus and Martina L. Millan for Accused-Appellant.

SYLLABUS

1. REMEDIAL LAW; EVIDENCE; IDENTITY OF THE ACCUSED, ESTABLISHED IN CASE AT BAR. — The trial court found that Christine had on two occasions unequivocably pointed to appellant as the man who had sexually assaulted her. The first time she did so was right after the arrest of appellant by the Roxas City police who immediately brought appellant to Christine’s home and there, "in the presence of the apprehending officers and many other people" she pointed to him as the attacker. The second time she identified appellant was at the Police Station, in the presence of her parents and police investigators. The clarity and definiteness of Christine’s pointing to appellant as her attacker are all the more impressive when it is recalled that the police had earlier presented to her three (3) other possible suspects and that she had denied the involvement of any of the three (3) in the attack upon her.

2. ID.; ID.; FINDINGS OF FACT OF THE TRIAL COURT AFFECTING CREDIBILITY OF WITNESS WHO HAD NO EVIL MOTIVE TO IMPUTE A SERIOUS CRIME, GENERALLY NOT DISTURBED ON APPEAL. — It is firmly settled doctrine that the finding of the trial court, which had the inestimable advantage of observing the detailed demeanor of the witnesses, are entitled to great respect. We find no reason at all to doubt the findings of the trial court here. It must be noted that these witnesses had no known reason falsely to impute a serious charge against the appellant. (People v. Patog, 144 SCRA 429 [1985])

3. ID.; ID.; ALIBI; NOT AVAILING WHERE THERE WAS A POSSIBILITY THAT ACCUSED MAY HAVE BEEN AT THE SCENE OF THE CRIME DURING ITS OMISSION. — Appellant also put up the defense of alibi. He claimed that early in the evening of 3 June 1987, at about the time the rape was committed, he was visiting his girlfriend, Mercedita de la Cruz, in her house "in the upper and hilly portion of the PHHC Housing Project where, incidentally, the house of the offended party’s parents was also located." The trial court disposed of this defense quickly and decisively: ". . . Where the crime was committed could hardly be a few hundred meters away from Mercedita’s house. Being familiar with the place, the Court takes judicial notice of the fact that the PHHC Housing Project in this City is laced with good, all-weather roads. It is not a big housing complex, with an area of a few hectares only, and it would not take a man more than 30 minutes to walk [at] ordinary pace from one end to the other. So from where he said he was at the time, it would have taken the accused only a few minutes to reach the offended party’s house. It was that near and accessible." As the trial court noted, appellant had himself testified that on the evening when Christine Dorado was sexually assaulted, he was "in the vicinity of the crime scene (sic) and not in a distant town."cralaw virtua1aw library

4. ID.; ID.; ADMISSIBILITY; ADMISSION OBTAINED IN VIOLATION OF ACCUSED’S CONSTITUTIONAL RIGHTS, INADMISSIBLE, ADMISSION DISREGARDED IN THE RENDITION ON JUDGMENT OF CONVICTION. — Appellant claims, predictably, that he was forced to admit the crime imputed to him because he could no longer endure the brutalities inflicted upon him by the police authorities; that he was not assisted by counsel when he made said admission; that such maltreatment was even unqualifiedly attested to by the victim herself. It is argued that the trial court gravely erred when it appreciated and admitted said admission as evidence against the appellant. The foregoing allegation need not detain us for long. The case against appellant herein was not founded solely nor even principally on the said admission but rather on the positive identification of the appellant by victim. The basis of the trial court’s finding of guilt was not the said admission but the evidence adduced by the prosecution quite independently of that admission. In fact, in its decision, the court made only a passing reference to the admission appellant now attacks. Appellant tries to make capital of the testimony of Christine Dorado apparently attesting to the fact of the said forced admission. Assuming arguendo that appellant had indeed been made to admit to the crime by the exercise of force and intimidation by the police, it should be noted that even before said admission was given, the victim had already positively identified him as her assailant. Appellant’s extrajudicial confession may and should be disregarded, if, as here, the other evidence submitted by the prosecution is sufficient to prove his guilt beyond reasonable doubt.

5. CIVIL LAW; DAMAGES; CIVIL LIABILITY FOR AN EIGHT (8) YEAR OLD CHILD RAISED TO P50,000.00. — The sexual violence inflicted upon the eight-year old child is a particularly appalling outrage. The trauma sustained by her is not merely physical and may be expected to remain with her for a long, long time, possible for life. We believe that in this case, the victim is entitled to the heightened level of moral and exemplary damages that the trial court awarded her — P50,000.00.

D E C I S I O N

FELICIANO, J.:

Accused-appellant Fernando Perez was charged before the Regional Trial Court of Roxas City with the crime of rape committed as follows:jgc:chanrobles.com.ph

"That on or about the 3rd day of June, 1987, in the City of Roxas, Philippines, and within the jurisdiction of this Honorable Court, the above accused, armed with a knife and with the use of force and intimidation, did then and there wilfully, unlawfully and feloniously, have carnal knowledge [of] one CHRISTINE DORADO, an 8-year old girl, against the will of the said Christine Dorado, in the following manner; that the accused grabbed the said Christine Dorado, pointing a knife at her body and telling her not to shout otherwise, he will kill her, removing her underpants, making her to spread her legs, lie with and have carnal knowledge [of] Christine Dorado against her will.

CONTRARY TO LAW." 1

After trial, the trial court rendered a decision dated 6 June 1988, the dispositive portion of which reads as follows:jgc:chanrobles.com.ph

"WHEREFORE, in view of all the foregoing this Court finds the accused Fernando Perez, alias "Rogelio Perez", GUILTY beyond reasonable doubt of the crime of Rape as defined and punished under Article 335 of the Revised Penal Code, as amended by Republic Acts No. 2632 and 4111, and sentences him to suffer imprisonment for life (reclusion perpetua) and to pay the complainant and offended party P50,000.00 in moral and exemplary damages. Pursuant to the provisions of Art. 29 of the Revised Penal Code, the accused, who is a detention prisoner, shall be credited in the service of his sentence with the full time during which he had undergone preventive imprisonment, provided he agrees voluntarily in writing to abide by the disciplinary rules imposed upon convicted prisoners.

SO ORDERED." 2

The present appeal assigns the following as errors said to have been committed by the trial court:chanrob1es virtual 1aw library

The trial court erred in convicting accused despite failure of prosecution to present sufficient evidence to establish his identity as the rapist of Christine Dorado.

The trial court erred in convicting accused despite insufficiency of evidence to prove his guilt beyond reasonable doubt."cralaw virtua1aw library

The facts of the case as found and summarized by the trial court are as follows:jgc:chanrobles.com.ph

"It appears from the testimony of the offended party, Christine Dorado, at 8 a girl of tender years and a Grade III pupil, that at about 7 o’clock in the evening of June 3, 1987, while she was alone washing some dishes on a cemented portion outside the kitchen of their house at the PHHC Housing Project in Brgy. Lawa-an, Roxas City, the accused, whom she identified in court as her assailant, surreptitiously approached her from behind, poked a knife at her, threatened to kill her if she shouted, and then forced to lie down. When she was already lying on the ground, the accused held her by her hands, raised her skirt and forcibly removed her underwear. When the accused forced his sex organ into her genitals.

This assault inflicted upon the complainant a fresh hymenal laceration with slight bleeding at 5 o’clock position and a lacerated wound with moderate bleeding at the vaginal mucosa, as shown in the medical certificate issued by Dr. Evelyn B. Sicad who examined her at the Roxas Memorial General Hospital. According to the examining physician, there was complete penetration as the hymen was almost completely broken. This finding of the doctor was confirmed by the testimony of the young complainant herself who said that when the accused forced his sexual organ into her genitals, there was complete penetration, causing her vagina to bleed profusely and making her feel severe pain that made her cry. That the young girl bled profusely as a result of the sexual assault committed against her cannot be denied. She identified in court the pink dress she was then wearing which was full of bloodstains. She likewise identified the underwear she had on which the accused, according to her, forcibly removed, thereby tearing the garter, in order to realize his carnal desires.

Before pointing in court to the accused as her assailant that fateful early evening of June 3, 1987, young Christine Dorado had twice clearly and positively identified the accused as the man who criminally assaulted her. The first time she did so was when immediately after the arrest of the accused by the Roxas City Police he was taken to their house and then and there, in the presence of the apprehending officers and many other people, she identified and pointed to him as her assailant. She did this again at the Roxas City Police Station in the presence of her parents and police investigators during the investigation of this case by the police. At the police station, following his identification by the complainant, the accused admitted his guilt." 3

Appellant controverts the trial court’s findings of fact and submits the following recital:jgc:chanrobles.com.ph

" [Accused Fernando Perez testified] that in the evening of June 3, 1987, he was at the house of his girlfriend located at the upper portion of Homesite, Brgy. Lawa-an, Roxas City. He was working at the fishpond in Tico, Pontevedra and was brought there by Tawi Aga-in. He was apprehended at the house of his girlfriend, Mercidita. Then he was handcuffed and brought to the house of the victim for identification, however, the victim could not recognize him. But after the victim had talked to the police, victim pointed him as her assailant. He was then brought to the police station where he was manhandled and forced him to admit that he raped the victim. He fainted, then they splashed water on his face and after regaining consciousness, he was made to stand and was hit by the butt of an armalite on his forehead. He was forced to admit the crime because he could not withstand the maltreatment. He has never been accused of rape or acts of lasciviousness." 4

The appellant principally contends that there is no evidence sufficient to show that his identity was fully established by prosecution; that the identification made by the victim of the appellant as her rapist was not made "spontaneously." 5 This, appellant contends, is shown by testimony of the victim herself which went as follows:jgc:chanrobles.com.ph

"CROSS EXAMINATION:chanrob1es virtual 1aw library

ATTY. CONANAN:chanrob1es virtual 1aw library

Q When for the first time did you meet the accused Fernando Perez in this case?

COURT:chanrob1es virtual 1aw library

After June 3 or before, because she mentioned that she had not met him before June 3.

ATTY. CONANAN:chanrob1es virtual 1aw library

Q After June 3, 1987?

A When he was brought to the Police Station.

Q Were you there at the Police Station when he was brought?

FISCAL POSADAS:chanrob1es virtual 1aw library

Precisely, your Honor.

COURT: Witness may answer.

A Yes sir.

ATTY. CONANAN:chanrob1es virtual 1aw library

Q Why were you there?

A Because the police ordered me to be there, sir.

Q Was it not a fact that accused Fernando Perez was brought to your house before he was brought to the Police Station?

A He was brought to our house, sir.

Q And when he was brought to your house, you do not know him?

A No, sir.

Q And then after that he was brought to the Police Station together with you and your mother?

A Yes, sir.

Q Now, since you were there at the police station, what did the police do with the accused Fernando Perez?

A He was manhandled sir.

x x x

Q And he was manhandled and castigated by the policemen and the accused Perez then acknowledged that he was the one who raped you?

A Yes, sir.

Q And it was the first time that you knew that he was the one who raped you because he told you that he was the one who raped you after he was castigated by the police?

A Yes, sir.

x x x

COURT:chanrob1es virtual 1aw library

x x x

Q But while he was in your house, you did not point to him?

A I did your Honor because the Police asked to point to him your Honor.

Q While there in your house?

A Yes, your Honor.

Q While there in your house, did the accused admit that he was the one who raped you?

A No, he did not your Honor.

Q And it was only in the Police Station that he admitted?

A After he was manhandled, he admitted before the Police your Honor." 6

From the aforequoted testimony the defense suggests that the victim did not even recognize the accused as her assailant when the latter was first brought to her residence; that she pointed to him as the rapist only after the police asked her to do so; that the victim only knew that the accused was her attacker when the latter admitted having committed the crime. 7

Apropos the allegation that Christine Dorado had not clearly identified the appellant as her assailant, the trial court found that Christine had on two occasions unequivocably pointed to appellant as the man who had sexually assaulted her. The first time she did so was right after the arrest of appellant by the Roxas City police who immediately brought appellant to Christine’s home and there, "in the presence of the apprehending officers and many other people" she pointed to him as the attacker. The second time she identified appellant was at the Police Station, in the presence of her parents and police investigators. The clarity and definiteness of Christine’s pointing to appellant as her attacker are all the more impressive when it is recalled that the police had earlier presented to her three (3) other possible suspects and that she had denied the involvement of any of the three (3) in the attack upon her. 8

Appellant’s contention that Christine was not in a position to have seen the face of her assailant in the course of the rape was negated by the following testimony given by Christine:jgc:chanrobles.com.ph

"Q If you could still recall Christine Dorado, what does (sic) Fernando Perez wearing at that time?

A He was wearing something brown.

Q Was he wearing long pants or short pants?

A Long pants, sir. 9

x x x

Q Now, you said you know that accused as Fernando Perez, how did you know considering that it was night time?

A Because there was light sir, as the 3 flourescent lamp of our neighbors were switch on and lighted his face." 10 (Emphasis supplied)

Further, there is no merit to appellant’s suggestion that Christine did not recognize him as the attacker when asked if she knew him at the time he was brought to her residence. An examination of victim’s testimony before the lower court would show that the victim was confused by the question and that her answer thereto referred to the name of the appellant, not to his identity as the rapist. Her testimony was as follows:jgc:chanrobles.com.ph

"Q But that time you do not know actually who was the person who raped you, isn’t it?

COURT:chanrob1es virtual 1aw library

The name of the person.

A I did not know him first at that time." 11 (Emphasis supplied)

What emerges from examination of the transcript of Christine’s testimony is that appellant’s above suggestion was made possible principally by the weakness of the translation of the proceedings (both questions and answers) into English. The verb "to know" was used where "to see" or "to recognize" would have been more precise; "to know a person" was used where "to know the name of a person" was really meant.

As against appellant’s suggestion and denial, the trial court found the victim’s testimony clear, definite and entitled to full credence:jgc:chanrobles.com.ph

". . . After such a careful study and evaluation of the evidence adduced during the trial, the Court has come to the inescapable conclusion that the evidence presented by the prosecution is more credible and convincing, and thus entitled to greater weight, than that adduced by the defense. The Court, observing the demeanor and the obvious honesty and innocence of so young a victim as Christine Dorado on the witness stand, has found no reason at all to doubt the veracity of her testimony and that when she clearly, unhesitatingly and positively pointed to and identified the accused as the man who ravished her near the kitchen of their house in the early evening of June 3, 1987, she was telling the truth, the whole truth, and nothing but the truth. The fact that the young girl admitted that it was only at the time of the incident that she saw the accused for the first time and that she did not know him before does not in any way diminish the weight that should be given to her clear and convincing testimony. The Court is convinced that the girl is quite sure of the identity of the accused, so much so that when several suspects were presented to her by the police for identification she readily told the police that the culprit was not one of them. It was only when the herein accused was brought before her that she was able to tell the police that they had finally found the man they were looking for." 12

That an innocent eight-year old child would impute a crime as serious as the one at bar to a person she had never met before the attack, if indeed he had not assaulted her, strains belief excessively. The further suggestion that the child may have been influenced by her parents and the police to make a false charge must fail, absent any showing of malice or ill motive on the part of either parents or police.

The testimony of Christine was moreover corroborated by the testimony of other witnesses:jgc:chanrobles.com.ph

" [Testimony of Mr. Ambrosio Dorado]

Q Now, you said that after your daughter Christine Dorado was examined by the Nurse at the Saint Anthony Hospital, she told you that she was assaulted by someone, whom she could recognize by face, is it right?

A Yes. Your Honor.

Q Since then, has your daughter ever pointed to a man who allegedly assaulted her?

A She said that she could only recognize the face but not his name.

Q Has she ever pointed to a man after she told you that, as having criminally assaulted her?

A As of now she has pointed somebody.

Q That man your daughter pointed to you as having criminally assaulted her inside this room?

A Yes, Your Honor.

Q Will you point to him?

A He is there. (Witness pointing to the accused Fernando Perez). 13

[Testimony of Norma Dorado].

ATTY. CONANAN:chanrob1es virtual 1aw library

Q By the way, when your daughter Christine Dorado already recovered, you asked her how does the alleged rapist who raped her look like?

A Yes. I asked her.

Q And what was her answer?

A Short and stocky fellow and had a squinting eyes.

Q And in fact his hair was curly?

A No, sir.

x x x

Q Mrs. Dorado, how many times did the policemen investigate you or your daughter after the alleged incident on June 3, 1987?

A Twice sir.

Q Was that investigation in your house in the National Housing Authority or at the Police Station?

FISCAL POSADAS:chanrob1es virtual 1aw library

I object to the word ‘investigation on the announcer.’

ATTY. CONANAN:chanrob1es virtual 1aw library

Policemen.

A At the Police Station.

Q And during that investigation there were already several suspects presented by the Police Station and all of them were presented to you and your daughter?

A Yes, sir.

Q Now, if you can still recall, how many of them?

A I cannot remember. There were several of them.

Q Now, and all of them were not identified by your daughter?

A No, sir. The ones who were brought to the hospital she did not identify.

Q Now, the accused in this case Fernando Perez was apprehended several days after the alleged raped of your daughter and he was brought to your house in the National Housing Authority, Lawa-an, Roxas City, can you still recall that?

A Yes, sir.

Q And at the time when the accused was brought to your house, your daughter was in your house?

A Yes, sir.

Q And you were not there according to you because you were in the well fetching water?

A Yes, sir.

Q Now, how far is this well where you fetch water from your house?

A About one and half (1-1/2) kilometer, it is near the TELECOM Station.

Q And when you arrived in your house after fetching water, the accused Fernando Perez was still in your house?

A Yes, sir.

Q And it was when you arrived that your daughter Christine Dorado pointed the accused as the man who raped her?

A Yes, sir. 14

[Testimony of Pat. Ernesto Apruebo]

A After he was booked by the Desk Officer and investigated, we brought him back to Lawa-an for identification of the victim and the victim Dorado pointed to him as her assailant.

Q Was the accused Fernando Perez the only suspect whom you showed to the victim Christine Dorado?

A There were others sir who were picked up and apprehended by Pat. Dorde.

Q Do you know if Pat. Dorde showed the suspects he apprehended to the victim Christine Dorado?

A Yes, he did but the victim did not point to them as her assailant.

x x x

Q Do you know if being investigated the victim Christine Dorado pointed to the accused as her assailant?

A Yes, she did your Honor when Pat. Olendo asked her to identify the accused.

Q Did you actually see the victim point to her assailant in the Roxas City Police Station?

A Yes, your Honor." 15 (Italics supplied)

The trial court found the above-quoted testimonies credible and convincing. It is firmly settled doctrine that the finding of the trial court, which had the inestimable advantage of observing the detailed demeanor of the witnesses, are entitled to great respect. 16 We find no reason at all to doubt the findings of the trial court here. It must be noted that these witnesses had no known reason falsely to impute a serious charge against the appellant. As held by this Court in People v. Patog, 17" [W]here there is no evidence and nothing to indicate the principal witness for the prosecution was [moved] by improper motives the presumption is that he was not so [moved] and his testimony is entitled to full faith and credit."cralaw virtua1aw library

Appellant also put up the defense of alibi. He claimed that early in the evening of 3 June 1987, at about the time the rape was committed, he was visiting his girlfriend, Mercedita de la Cruz, in her house "in the upper and hilly portion of the PHHC Housing Project where, incidentally, the house of the offended party’s parents was also located." 18 The trial court disposed of this defense quickly and decisively:jgc:chanrobles.com.ph

". . . Where the crime was committed could hardly be a few hundred meters away from Mercedita’s house. Being familiar with the place, the Court takes judicial notice of the fact that the PHHC Housing Project in this City is laced with good, all-weather roads. It is not a big housing complex, with an area of a few hectares only, and it would not take a man more than 30 minutes to walk [at] ordinary pace from one end to the other. So from where he said he was at the time, it would have taken the accused only a few minutes to reach the offended party’s house. It was that near and accessible." 19

As the trial court noted, appellant had himself testified that on the evening when Christine Dorado was sexually assaulted, he was "in the vicinity of the crime scene (sic) and not in a distant town." 20

It is also contended by appellant that the trial court disregarded his constitutional right, against self-incrimination, when it held that:jgc:chanrobles.com.ph

". . . the accused has been positively identified by the offended party as the perpetrator of the crime and who, in fact, has admitted his culpability in the presence of a number of witnesses." 21

Appellant claims, predictably, that he was forced to admit the crime imputed to him because he could no longer endure the brutalities inflicted upon him by the police authorities; that he was not assisted by counsel when he made said admission; that such maltreatment was even unqualifiedly attested to by the victim herself. It is argued that the trial court gravely erred when it appreciated and admitted said admission as evidence against the Appellant.

The foregoing allegation need not detain us for long. The case against appellant herein was not founded solely nor even principally on the said admission but rather on the positive identification of the appellant by victim. The basis of the trial court’s finding of guilt was not the said admission but the evidence adduced by the prosecution quite independently of that admission. In fact, in its decision, the court made only a passing reference to the admission appellant now attacks.

Appellant tries to make capital of the testimony of Christine Dorado apparently attesting to the fact of the said forced admission. Assuming arguendo that appellant had indeed been made to admit to the crime by the exercise of force and intimidation by the police, it should be noted that even before said admission was given, the victim had already positively identified him as her assailant. Appellant’s extrajudicial confession may and should be disregarded, if, as here, the other evidence submitted by the prosecution is sufficient to prove his guilt beyond reasonable doubt. 22

In sum, we agree with the trial court that the guilt of the appellant has been proven beyond reasonable doubt. The sexual violence inflicted upon the eight-year old child is a particularly appalling outrage. The trauma sustained by her is not merely physical and may be expected to remain with her for a long, long time, possible for life. We believe that in this case, the victim is entitled to the heightened level of moral and exemplary damages that the trial court awarded her — P50,000.00.

WHEREFORE, the judgment of the trial court is AFFIRMED in its totality. Costs against Appellant.

SO ORDERED.

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

Endnotes:

1. Complaint, Records, p. 1.

2. Appealed Decision, p. 7; Records, p. 212.

3. Id., pp. 207-208.

4. Appellant’s Brief, p. 1; Rollo, p. 224.

5. Id., p. 232.

6. TSN, 23 November 1987, pp. 31-34; Records, pp. 107-110.

7. Appellant’s Brief, p. 11; Rollo, p. 234.

8. TSN, 23 November 1987, p. 26; Records, p. 102.

9. Id., pp. 9-10; Records, p. 86.

10. Id., pp. 12-13; Records, p. 88.

11. Id., p. 24; Records, p. 100.

12. Decision, p. 5; Rollo, p. 210; Italics supplied.

13 . TSN, 11 November 1987, pp. 21-22 Records pp. 74-75.

14. TSN, 20 October 1987, pp. 19, 21-22; Records, pp. 19, 21-22.

15. TSN, 15 December 1987, p. 29, Records, p. 141.

16. People v. Aboga, 147 SCRA 404 (1987).

17. 144 SCRA 429 (1985).

18. Decision of the trial court, p. 4; Rollo, p. 209.

19. Ibid.

20. Decision, p. 5; Rollo. p. 210.

21. Appellant’s Brief, p. 11; Rollo, p. 234.

22. People v. Polo, 147 SCRA 552 (1987).

G.R. No. 85215 July 7, 1989 - PEOPLE OF THE PHIL. v. RUBEN AYSON

2012-11-11T16:53:05+00:00

FIRST DIVISION

[G.R. No. 85215. July 7, 1989.]

THE PEOPLE OF THE PHILIPPINES, Petitioner, v. HON. JUDGE RUBEN AYSON, Presiding over Branch 6, Regional Trial Court, First Judicial Region, Baguio City, and FELIPE RAMOS, Respondents.

Nelson Lidua for Private Respondent.

SYLLABUS

1. CONSTITUTIONAL LAW; BILL OF RIGHTS; RIGHTS OF THE ACCUSED; RIGHT AGAINST SELF-INCRIMINATION; RIGHT CONSTRUED. — The right against self-incrimination, mentioned in Section 20, Article IV of the 1973 Constitution, is accorded to every person who gives evidence, whether voluntarily or under compulsion of subpoena, in any civil, criminal, or administrative proceeding. The right is NOT to "be compelled to be a witness against himself." It prescribes an "option of refusal to answer incriminating questions and not a prohibition of inquiry." It simply secures to a witness, whether he be a party or not, the right to refuse to answer any particular incriminatory question, i.e., one the answer to which has a tendency to incriminate him for some crime.

2. ID.; ID.; ID.; ID.; TIME TO ASSERT RIGHT. — The right can be claimed only when the specific question, incriminatory in character, is actually put to the witness. It cannot be claimed at any other time. It does not give a witness the right to disregard a subpoena, to decline to appear before the court at the time appointed, or to refuse to testify altogether. The witness receiving a subpoena must obey it, appear as required, take the stand, be sworn and answer questions. It is only when a particular question is addressed to him, the answer to which may incriminate him for some offense, that he may refuse to answer on the strength of the constitutional guaranty.

3. ID.; ID.; ID.; ID.; NOT A SELF-EXECUTING RIGHT. — The right against self-incrimination is not self-executing or automatically operational. It must be claimed. If not claimed by or in behalf of the witness, the protection does not come into play. It follows that the right may be waived, expressly, or impliedly, as by a failure to claim it at the appropriate time.

4. ID.; ID.; ID.; OTHER RIGHTS OF THE ACCUSED. — The accused in a criminal case in court has other rights in the matter of giving testimony or refusing to do so. An accused "occupies a different tier of protection from an ordinary witness." Under the Rules of Court, in all criminal prosecutions the defendant is entitled among others — 1) to be exempt from being a witness against himself, and 2) to testify as witness in his own behalf; but if he offers himself as a witness he may be cross-examined as any other witness; however, his neglect or refusal to be a witness shall not in any manner prejudice or be used against him.

5. ID.; ID.; ID.; RIGHT TO BE EXEMPT FROM BEING A WITNESS AGAINST HIMSELF, CONSTRUED. — The right of the defendant in a criminal case "to be exempt from being a witness against himself" signifies that he cannot be compelled to testify or produce evidence in the criminal case in which he is the accused, or one of the accused. He cannot be compelled to do so even by subpoena or other process or order of the Court. He cannot be required to be a witness either for the prosecution, or for a co-accused, or even for himself. In other words — unlike an ordinary witness (or a party in a civil action) who may be compelled to testify by subpoena, having only the right to refuse to answer a particular incriminatory question at the time it is put to him — the defendant in a criminal action can refuse to testify altogether. He can refuse to take the witness stand, be sworn, answer any question. And, as the law categorically states, "his neglect or refusal to be a witness shall not in any manner prejudice or be used against him."cralaw virtua1aw library

6. ID.; ID.; ID.; RIGHTS OF THE ACCUSED BEFORE AND AFTER THE CASE IS FILED IN THE COURT. — A person suspected of having committed a crime and subsequently charged with its commission in court, has the following rights in that matter of his testifying or producing evidence, to wit: 1) BEFORE THE CASE IS FILED IN COURT (or with the public prosecutor, for preliminary investigation), but after having been taken into custody or otherwise deprived of his liberty in some significant way, and on being interrogated by the police: the continuing right to remain silent and to counsel, and to be informed thereof, not to be subjected to force, violence, threat, intimidation or any other means which vitiates the free will; and to have evidence obtained in violation of these rights rejected; and 2) AFTER THE CASE IS FILED IN COURT — a) to refuse to be a witness; b) not to have any prejudice whatsoever result to him by such refusal; c) to testify to his own behalf, subject to cross-examination by the persecution; d) WHILE TESTIFYING, to refuse to answer a specific question which tends to incriminate him for some time other than that for which he is prosecuted.

7. ID.; ID.; ID.; RIGHTS DURING CUSTODIAL INVESTIGATION DOES NOT ENCOMPASS STATEMENTS MADE DURING AN ADMINISTRATIVE INQUIRY; CASE AT BAR. — Felipe Ramos was not in any sense under custodial interrogation, as the term should be properly understood, prior to and during the administrative inquiry into the discovered irregularities in ticket sales in which he appeared to have had a hand. The constitutional rights of a person under custodial interrogation under Section 20, Article IV of the 1973 Constitution did not therefore come into play, were of no relevance to the inquiry. It is also clear, too, that Ramos had voluntarily answered questions posed to him on the first day of the administrative investigation, February 9, 1986 and agreed that the proceedings should be recorded, the record having thereafter been marked during the trial of the criminal action subsequently filed against him as Exhibit A, just as it is obvious that the note (later marked as Exhibit K) that he sent to his superiors on February 8, 1986, the day before the investigation, offering to compromise his liability in the alleged irregularities, was a free and even spontaneous act on his part. They may not be excluded on the ground that the so-called "Miranda rights" had not been accorded to Ramos.

D E C I S I O N

NARVASA, J.:

What has given rise to the controversy at bar is the equation by the respondent Judge of the right of an individual not to "be compelled to be a witness against himself" accorded by Section 20, Article III of the Constitution, with the right of any person "under investigation for the commission of an offense . . . to remain silent and to counsel, and to be informed of such right," granted by the same provision. The relevant facts are not disputed.

Private respondent Felipe Ramos was a ticket freight clerk of the Philippine Airlines (PAL), assigned at its Baguio City station. It having allegedly come to light that he was involved in irregularities in the sales of plane tickets, 1 the PAL management notified him of an investigation to be conducted into the matter of February 9, 1986. That investigation was scheduled in accordance with PAL’s Code of Conduct and Discipline, and the Collective Bargaining Agreement signed by it with the Philippine Airlines Employees’ Association (PALEA) to which Ramos pertained. 2

On the day before the investigation, February 8, 1986, Ramos gave to his superiors a handwritten note 3 reading as follows:jgc:chanrobles.com.ph

"2-8-86

TO WHOM IT MAY CONCERN:chanrob1es virtual 1aw library

THE UNDERSIGNED WOULD LIKE TO STATE THAT HE IS WILLING TO SETTLE IRREGULARITIES ALLEGEDLY CHARGED VS. HIM IN THE AMT. OF P76,000 (APPROX.) SUBJECT TO CONDITIONS AS MAY BE IMPOSED BY PAL ON OR BEFORE 1700/9 FEB 86.

(s) Felipe Ramos

(Printed) F. Ramos"

At the investigation of February 9, 1986, conducted by the PAL Branch Manager in Baguio City, Edgardo R. Cruz, in the presence of Station Agent Antonio Ocampo, Ticket Freight Clerk Rodolfo Quitasol, and PALEA Shop Steward Cristeta Domingo, Felipe Ramos was informed "of the finding of the Audit Team." Thereafter, his answers in response to questions by Cruz, were taken down in writing. Ramos’ answers were to the effect inter alia that he had not indeed made disclosure of the tickets mentioned in the Audit Team’s findings, that the proceeds had been "misused" by him, that although he had planned on paying back the money, he had been prevented from doing so, "perhaps (by) shame," that he was still willing to settle his obligation, and proferred a "compromise . . . to pay on staggered basis, (and) the amount would be known in the next investigation;" that he desired the next investigation to be at the same place, "Baguio CTO," and that he should be represented therein by "Shop stewardees ITR Nieves Blanco;" and that he was willing to sign his statement (as he in fact afterwards did). 4 How the investigation turned out is not dealt with the parties at all; but it would seem that no compromise agreement was reached much less consummated.

About two (2) months later, an information was filed against Felipe Ramos charging him with the crime of estafa allegedly committed in Baguio City during the period from March 12, 1986 to January 29, 1987. In that place and during that time, according to the indictment, 5 he (Ramos) —

". . . with unfaithfulness and/or abuse of confidence, did then and there willfully . . . defraud the Philippine Airlines, Inc., Baguio Branch, . . . in the following manner, to wit: said accused . . . having been entrusted with and received in trust fare tickets of passengers for one-way-trip and round-trip in the total amount of P76,700.65, with the express obligation to remit all the proceeds of the sale, account for it and/or to return those unsold, . . . once in possession thereof and instead of complying with his obligation, with intent to defraud, did then and there . . . misappropriate, misapply and convert the value of the tickets in the sum of P76,700.65 and in spite of repeated demands, . . . failed and refused to make good his obligation, to the damage and prejudice of the offended party . . ."cralaw virtua1aw library

On arraignment on this charge, Felipe Ramos entered a plea of "Not Guilty," and trial thereafter ensued. The prosecution of the case was undertaken by lawyers of PAL under the direction and supervision of the Fiscal.

At the close of the people’s case, the private prosecutors made a written offer of evidence dated June 21, 1988, 6 which included "the (above mentioned) statement of accused Felipe J. Ramos taken on February 9, 1986 at PAL Baguio City Ticket Office," which had been marked as Exhibit A, as well as his "handwritten admission . . . given on February 8, 1986," also above referred to, which had been marked as Exhibit K.

The defendant’s attorneys filed "Objections/Comments to Plaintiffs Evidence." 7 Particularly as regards the peoples’ Exhibit A, the objection was that "said document, which appears to be a confession, was taken without the accused being represented by a lawyer." Exhibit K was objected to "for the same reasons interposed under Exhibits ‘A’ and ‘J.’"

By Order dated August 9, 1988, 8 the respondent judge admitted all the exhibits "as part of the testimony of the witnesses who testified in connection therewith and for whatever they are worth," except Exhibits A and K, which it rejected. His Honor declared Exhibit A "inadmissible in evidence, it appearing that it is the statement of accused Felipe Ramos taken on February 9, 1986 at PAL Baguio City Ticket Office, in an investigation conducted by the Branch Manager . . . since it does not appear that the accused was reminded of this constitutional rights to remain silent and to have counsel, and that when he waived the same and gave his statement, it was with the assistance actually of a counsel." He also declared inadmissible "Exhibit K, the handwritten admission made by accused Felipe J. Ramos, given on February 8, 1986 . . . for the same reason stated in the exclusion of Exhibit ‘A’ since it does not appear that the accused was assisted by counsel when he made said admission."cralaw virtua1aw library

The private prosecutors filed a motion for reconsideration. 9 It was denied, by Order dated September 14, 1988. 10 In justification of said Order, respondent Judge invoked this Court’s rulings in Morales, Jr. v. Juan Ponce Enrile, Et Al., 121 SCRA 538, Peo. v. Galit, 135 SCRA 467, Peo. v. Sison, 142 SCRA 219, and Peo. v. Decierdo, 149 SCRA 496, among others, to the effect that "in custodial investigations the right to counsel may be waived but the waiver shall not be valid unless made with the assistance of counsel," and the explicit precept in the present Constitution that the rights in custodial investigation "cannot be waived except in writing and in the presence of counsel." He pointed out that the investigation of Felipe Ramos at the PAL Baguio Station was one "for the offense of allegedly misappropriating the proceeds of the tickets issued to him’ and therefore clearly fell "within the coverage of the constitutional provisions;" and the fact that Ramos was not detained at the time, or the investigation was administrative in character could not operate to except the case "from the ambit of the constitutional provision cited."cralaw virtua1aw library

These Orders, of August 9, 1988 and September 14, 1988 are now assailed in the petition for certiorari and prohibition at bar, filed in this Court by the private prosecutors in the name of the People of the Philippines. By Resolution dated October 26, 1988, the Court required Judge Ayson and Felipe Ramos to comment on the petition, and directed issuance of a "TEMPORARY RESTRAINING ORDER . . . ENJOINING the respondents from proceeding further with the trial and/or hearing of Criminal Case No. 3488-R (People . . . v. Felipe Ramos), including the issuance of any order, decision or judgment in the aforesaid case or on any matter in relation to the same case, now pending before the Regional Trial Court of Baguio City, Br. 6, First Judicial Region." The Court also subsequently required the Solicitor General to comment on the petition. The comments of Judge Ayson, Felipe Ramos, and the Solicitor General have all been filed. The Solicitor General has made common cause with the petitioner and prays "that the petition be given due course and thereafter judgment be rendered setting aside respondent Judge’s Orders . . . and ordering him to admit Exhibits ‘A’ and ‘K’ of the prosecution." The Solicitor General has thereby removed whatever impropriety might have attended the institution of the instant action in the name of the People of the Philippines by lawyers de parte of the offended party in the criminal action in question.

The Court deems that there has been full ventilation of the issue — of whether or not it was grave abuse of discretion for respondent Judge to have excluded the People’s Exhibits A and K. It will now proceed to resolve it.

At the core of the controversy is Section 20, Article IV of the 1973 Constitution, 11 to which respondent Judge has given a construction that is disputed by the People. The section reads as follows:chanrob1es virtual 1aw library

SEC. 20. No person shall be compelled to be a witness against himself. Any person under investigation for the commission of an offense shall have the right to remain silent and to counsel, and to be informed of such right. No force, violence, threat, intimidation, or any other means which vitiates the free will shall be used against him. Any confession obtained in violation of this section shall be inadmissible in evidence.

It should at once be apparent that there are two (2) rights, or sets of rights, dealth with in the section, namely:chanrob1es virtual 1aw library

1) the right against self-incrimination — i.e., the right of a person not to be compelled to be a witness against himself — set out in the first sentence, which is a verbatim reproduction of Section 18, Article III of the 1935 Constitution, and is similar to that accorded by the Fifth Amendment of the American Constitution, 12 and

2) the rights of a person in custodial interrogation, i.e., the rights of every suspect "under investigation for the commission of an offense."cralaw virtua1aw library

Parenthetically, the 1987 Constitution indicates much more clearly the individuality and disparateness of these rights. It has placed the rights in separate sections. The right against self-incrimination, "No person shall be compelled to be a witness against himself," is now embodied in Section 17, Article III of the 1987 Constitution. The rights of a person in custodial interrogation, which have been made more explicit, are now contained in Section 12 of the same Article III. 13

Right Against Self-Incrimination

The first right, against self-incrimination, mentioned in Section 20, Article IV of the 1973 Constitution, is accorded to every person who gives evidence, whether voluntarily or under compulsion of subpoena, in any civil, criminal, or administrative proceeding. 14 The right is NOT to "be compelled to be a witness against himself."cralaw virtua1aw library

The precept set out in that first sentence has a settled meaning. 15 It prescribes an "option of refusal to answer incriminating questions and not a prohibition of inquiry." 16 It simply secures to a witness, whether he be a party or not, the right to refuse to answer any particular incriminatory question, i.e., one the answer to which has a tendency to incriminate him for some crime. However, the right can be claimed only when the specific question, incriminatory in character, is actually put to the witness. It cannot be claimed at any other time. It does not give a witness the right to disregard a subpoena, to decline to appear before the court at the time appointed, or to refuse to testify altogether. The witness receiving a subpoena must obey it, appear as required, take the stand, be sworn and answer questions. It is only when a particular question is addressed to him, the answer to which may incriminate him for some offense, that he may refuse to answer on the strength of the constitutional guaranty.

That first sentence of Section 20, Article IV of the 1973 Constitution does not impose on the judge, or other officer presiding over a trial, hearing or investigation, any affirmative obligation to advise a witness of his right against self-incrimination. It is a right that a witness knows or should know, in accordance with the well known axiom that every one is presumed to know the law, that ignorance of the law excuses no one. Furthermore, in the very nature of things, neither the judge nor the witness can be expected to know in advance the character or effect of a question to be put to the latter. 17

The right against self-incrimination is not self-executing or automatically operational. It must be claimed. If not claimed by or in behalf of the witness, the protection does not come into play. It follows that the right may be waived, expressly, or impliedly, as by a failure to claim it at the appropriate time. 18

Rights in Custodial Interrogation

Section 20, Article IV of the 1973 Constitution also treats of a second right, or better said, group of rights. These rights apply to persons "under investigation for the commission of an offense," i.e., "suspects" under investigation by police authorities; and this is what makes these rights different from that embodied in the first sentence, that against self-incrimination which, as aforestated, indiscriminately applies to any person testifying in any proceeding, civil, criminal, or administrative.

This provision granting explicit rights to persons under investigation for an offense was not in the 1935 Constitution. It is avowedly derived from the decision of the U.S. Supreme Court in Miranda v. Arizona, 19 a decision described as an "earthquake in the world of law enforcement." 20

Section 20 states that whenever any person is "under investigation for the commission of an offense" —

1) he shall have the right to remain silent and to counsel, and to be informed of each right, 21

2) nor force, violence, threat, intimidation, or any other means which vitiates the free will shall be used against him; 22 and

3) any confession obtained in violation of . . . (these rights shall be inadmissible in evidence. 23

In Miranda, Chief Justice Warren summarized the procedural safeguards laid down for a person in police custody, "in-custody interrogation" being regarded as the commencement of an adversary proceeding against the suspect. 24

He must be warned prior to any questioning that he has the right to remain silent, that anything he says can be used against him in a court of law, that he has the right to the presence of an attorney, and that if he cannot afford an attorney one will be appointed for him prior to any questioning if he so desires. Opportunity to exercise those rights must be afforded to him throughout the interrogation. After such warnings have been given, such opportunity afforded him, the individual may knowingly and intelligently waive these rights and agree to answer or make a statement. But unless and until such warnings and waivers are demonstrated by the prosecution at the trial, no evidence obtained as a result of interrogation can be used against him.

The objective is to prohibit "incommunicado interrogation of individuals in a police-dominated atmosphere, resulting in self-incriminating statement without full warnings of constitutional rights."25cralaw:red

The rights above specified, to repeat, exist only in "custodial interrogations," or "in-custody interrogation of accused persons." 26 And, as this Court has already stated, by custodial interrogation is meant "questioning initiated by law enforcement officers after a person has been taken into custody or otherwise deprived of his freedom of action in any significant way." 27 The situation contemplated has also been more precisely described by this Court. 28

. . . After a person is arrested and his custodial investigation begins a confrontation arises which at best may be termed unequal. The detainee is brought to an army camp or police headquarters and there questioned and "cross-examined" not only by one but as many investigators as may be necessary to break down his morale. He finds himself in strange and unfamiliar surroundings, and every person he meets he considers hostile to him. The investigators are well-trained and seasoned in their work. They employ all the methods and means that experience and study have taught them to extract the truth, or what may pass for it, out of the detainee. Most detainees are unlettered and are not aware of their constitutional rights. And even if they were, the intimidating and coercive presence of the officers of the law in such an atmosphere overwhelms them into silence. Section 20 of the Bill of Rights seeks to remedy this imbalance."cralaw virtua1aw library

Not every statement made to the police by a person involved in some crime is within the scope of the constitutional protection. If not made "under custodial interrogation," or "under investigation for the commission of an offense," the statement is not protected. Thus, in one case, 29 where a person went to a police precinct and before any sort of investigation could be initiated, declared that he was giving himself up for the killing of an old woman because she was threatening to kill him by barang, or witchcraft, this Court ruled that such a statement was admissible, compliance with the constitutional procedure on custodial interrogation not being exigible under the circumstances.

Rights of Defendant in Criminal Case

As Regards Giving of Testimony

It is pertinent at this point to inquire whether the rights just discussed, i.e., (1) that against self-incrimination and (2) those during custodial interrogation apply to persons under preliminary investigation or already charged in court for a crime.

It seems quite evident that a defendant on trial or under preliminary investigation is not under custodial interrogation. His interrogation by the police, if any there had been would already have been ended at the time of the filing of the criminal case in court (or the public prosecutors’ office). Hence, with respect to a defendant in a criminal case already pending in court (or the public prosecutor’s office), there is no occasion to speak of his right while under "custodial interrogation" laid down by the second and subsequent sentences of Section 20, Article IV of the 1973 Constitution, for the obvious reason that he is no longer under "custodial interrogation."cralaw virtua1aw library

But unquestionably, the accused in court (or undergoing preliminary investigation before the public prosecutor), in common with all other persons, possesses the right against self-incrimination set out in the first sentence of Section 20 Article IV of the 1973 Constitution, i.e., the right to refuse to answer a specific incriminatory question at the time that it is put to him. 30

Additionally, the accused in a criminal case in court has other rights in the matter of giving testimony or refusing to do so. An accused "occupies a different tier of protection from an ordinary witness." Under the Rules of Court, in all criminal prosecutions the defendant is entitled among others —

1) to be exempt from being a witness against himself, 31 and

2) to testify as witness in his own behalf; but if he offers himself as a witness he may be cross-examined as any other witness; however, his neglect or refusal to be a witness shall not in any manner prejudice or be used against him. 32

The right of the defendant in a criminal case "to be exempt from being a witness against himself" signifies that he cannot be compelled to testify or produce evidence in the criminal case in which he is the accused, or one of the accused. He cannot be compelled to do so even by subpoena or other process or order of the Court. He cannot be required to be a witness either for the prosecution, or for a co-accused, or even for himself. 33 In other words — unlike an ordinary witness (or a party in a civil action) who may be compelled to testify by subpoena, having only the right to refuse to answer a particular incriminatory question at the time it is put to him — the defendant in a criminal action can refuse to testify altogether. He can refuse to take the witness stand, be sworn, answer any question. 34 And, as the law categorically states, "his neglect or refusal to be a witness shall not in any manner prejudice or be used against him." 35

If he should wish to testify in his own behalf, however, he may do so. This is his right. But if he does testify, then he "may be cross-examined as any other witness." He may be cross-examined as to any matters stated in his direct examination, or connected therewith. 36 He may not on cross-examination refuse to answer any question on the ground that the answer that he will give, or the evidence he will produce, would have a tendency to incriminate him for the crime with which he is charged.

It must however be made clear that if the defendant in a criminal action be asked a question which might incriminate him, not for the crime with which he is charged, but for some other crime, distinct from that of which he is accused, he may decline to answer that specific question, on the strength of the right against self-incrimination granted by the first sentence of Section 20, Article IV of the 1973 Constitution (now Section 17 of the 1987 Constitution). Thus, assuming that in a prosecution for murder, the accused should testify in his behalf, he may not on cross-examination refuse to answer any question on the ground that he might be implicated in that crime of murder; but he may decline to answer any particular question which might implicate him for a different and distinct offense, say, estafa.

In fine, a person suspected of having committed a crime and subsequently charged with its commission in court, has the following rights in that matter of his testifying or producing evidence, to wit:chanrob1es virtual 1aw library

1) BEFORE THE CASE IS FILED IN COURT (or with the public prosecutor, for preliminary investigation), but after having been taken into custody or otherwise deprived of his liberty in some significant way, and on being interrogated by the police: the continuing right to remain silent and to counsel, and to be informed thereof, not to be subjected to force, violence, threat, intimidation or any other means which vitiates the free will; and to have evidence obtained in violation of these rights rejected; and

2) AFTER THE CASE IS FILED IN COURT — 37

a) to refuse to be a witness;

b) not to have any prejudice whatsoever result to him by such refusal;

c) to testify to his own behalf, subject to cross-examination by the prosecution;

d) WHILE TESTIFYING, to refuse to answer a specific question which tends to incriminate him for some time other than that for which he is prosecuted.

It should by now be abundantly apparent that respondent Judge has misapprehended the nature and import of the disparate rights set forth in Section 20, Article IV of the 1973 Constitution. He has taken them as applying to the same juridical situation, equating one with the other. In so doing, he has grossly erred. To be sure, His Honor sought to substantiate his thesis by arguments he took to be cogent and logical. The thesis was however so far divorced from the actual and correct state of the constitutional and legal principles involved as to make application of said thesis to the case before him tantamount to totally unfounded, whimsical or capricious exercise of power. His Orders were thus rendered with grave abuse of discretion. They should be as they are hereby, annulled and set aside.

It is clear from the undisputed facts of this case that Felipe Ramos was not in any sense under custodial interrogation, as the term should be properly understood, prior to and during the administrative inquiry into the discovered irregularities in ticket sales in which he appeared to have had a hand. The constitutional rights of a person under custodial interrogation under Section 20, Article IV of the 1973 Constitution did not therefore come into play, were of no relevance to the inquiry. It is also clear, too, that Ramos had voluntarily answered questions posed to him on the first day of the administrative investigation, February 9, 1986 and agreed that the proceedings should be recorded, the record having thereafter been marked during the trial of the criminal action subsequently filed against him as Exhibit A, just as it is obvious that the note (later marked as Exhibit K) that he sent to his superiors on February 8, 1986, the day before the investigation, offering to compromise his liability in the alleged irregularities, was a free and even spontaneous act on his part. They may not be excluded on the ground that the so-called "Miranda rights" had not been accorded to Ramos.

His Honor adverts to what he perceives to be the "greater danger . . (of) the violation of the right of any person against self-incrimination when the investigation is conducted by the complaining parties, complaining companies, or complaining employers because being interested parties, unlike the police agencies who have no propriety or pecuniary interest to protect, they may in their overeagerness or zealousness bear heavily on their hapless suspects, whether employees or not, to give statements under an atmosphere of moral coercion, undue ascendancy, and undue influence." It suffices to draw attention to the specific and peremptory requirement of the law that disciplinary sanctions may not be imposed on any employee by his employer until and unless the employee has been accorded due process, by which is meant that the latter must be informed of the offenses ascribed to him and afforded adequate time and opportunity to explain his side. The requirement entails the making of statements, oral or written, by the employee under such administrative investigation in his defense, with opportunity to solicit the assistance of counsel, or his colleagues and friends. The employee may, of course, refuse to submit any statement at the investigation, that is his privilege. But if he should opt to do so, in his defense to the accusation against him, it would be absurd to reject his statements, whether at the administrative investigation, or at a subsequent criminal action brought against him, because he had not been accorded, prior to his making and presenting them, his "Miranda rights" (to silence and to counsel and to be informed thereof, etc.) which, to repeat, are relevant only in custodial investigations. Indeed, it is self-evident that the employee’s statements, whether called "position paper," "answer," etc., are submitted by him precisely so that they may be admitted and duly considered by the investigating officer or committee, in negation or mitigation of his liability.

Of course the possibility cannot be discounted that in certain instances the judge’s expressed apprehensions may be realized, that violence or intimidation, undue pressure or influence be brought to bear on an employee under investigation — or for that matter, on a person being interrogated by another whom he has supposedly offended. In such an event, any admission or confession wrung from the person under interrogation would be inadmissible in evidence, on proof of the vice or defect vitiating consent, not because of a violation of Section 20, Article IV of the 1973 Constitution, but simply on the general, incontestable proposition that involuntary or coerced statements may not in justice be received against the makers thereof, and really should not be accorded any evidentiary value at all.

WHEREFORE, the writ of certiorari is granted annulling and setting aside the Orders of the respondent Judge in Criminal Case No. 3488-R, dated August 9, 1988 and September 14, 1988, and he is hereby ordered to admit in evidence Exhibits "A" and "K" of the prosecution in said Criminal Case No. 3488-R, and thereafter proceed with the trial and adjudgment thereof. The temporary restraining order of October 26, 1988 having become functus oficio, is now declared of no further force and effect.

Cruz, Gancayco, Griño-Aquino and Medialdea, JJ., concur.

Endnotes:

1. Rollo, P. 21, 34.

2. Id., p. 13.

3. Id., p. 29.

4. Rollo, pp. 6, 28.

5. Id., p. 19.

6. Rollo, pp. 8, 21-27.

7. Id., pp. 30-32.

8. Id., pp. 8-9, 33.

9. Id., pp. 34-44.

10. Id., pp. 48-55.

11. The admissions were allegedly made on February 8 and 9, 1986, at which time the 1987 Constitution was not yet in effect, indeed had not yet been conceived or drafted.

12. SEE, e.g., Tañada & Fernando, Constitution of the Phil., Anno., 2d ed., pp. 378-379.

13. The provision reads as follows:chanrob1es virtual 1aw library

SEC. 12. (1) Any person under investigation for the commission of an offense shall have the right to be informed of his right to remain silent and to have competent and independent counsel preferably of his own choice. If the person cannot afford the services of counsel, he must be provided with one. These rights cannot be waived except in writing and in the presence of counsel.(2) No torture, force, violence, threat, intimidation, or any other means which vitiate the free will shall be used against him. Secret detention places, solitary, incommunicado, or other similar forms of detention are prohibited.(3) Any confession or admission obtained in violation of this or the preceding section shall be inadmissible in evidence against him.(4) The law shall provide for penal and civil sanctions for violations of this section as well as compensation to and rehabilitation of victims of torture or similar practices, and their families.

14. Bermudez v. Castillo, 64 Phil. 483; Gonzales v. Secretary of Labor, 94 Phil. 325; Suarez v. Tengco, 2 SCRA 71; Pascual v. Board of Medical Examiners, 28 SCRA 844.

15. SEE Chavez v. C.A., 24 SCRA 663; Suarez v. Tengco, supra, 2 SCRA 71; Gonzales v. Secretary of Labor, supra, 94 Phil. 325, citing Jones on Evidence, Vol. 6, pp. 4926-7.

16. Suarez v. Tengco, supra, at p. 73.

17. SEE Cruz, I.A., Constitutional Law, 1987 ed., p. 275.

18. U.S. v. Molina, 317 U.S., 424; U.S. v. Binayoh, 35 Phil. 23; SEE also Tañada & Fernando, op. cit., p. 379.

19. 384 U.S. 436, 16 L. Ed. 694. 10 A.L.R. 3d, 974.

20. Peo. v. Duero, 104 SCRA 379.

21. The 1987 Constitution (Sec. 12, ART. III) makes clear that the person’s right to "counsel" refers to "competent and independent counsel preferably of his own choice," that if "the person cannot afford the services of (such) counsel, he must be provided with one," and, as suggested in Peo. v. Galit, 135 SCRA 465, that the rights to silence and to counsel "cannot be waived except in writing and in the presence of counsel" (SEE Cruz, op. cit., p. 282).

22. The 1987 Constitution adds that "Secret detention places, solitary, incommunicado or other similar forms of detention are prohibited."cralaw virtua1aw library

23. The proviso, as now found in the 1987 Constitution, makes inadmissible in evidence any confession or admission obtained not only in infringement of the rights mentioned (to silence, to counsel, etc.) but also in violation of Sec. 11, Art. III, to the effect that "Free access to the courts and quasi-judicial bodies and adequate legal assistance shall not be denied to any person by reason of poverty." The new charter also requires that "The law shall provide for penal and civil sanctions for violations of this section as well as compensation to and rehabilitation of victims of torture or similar practices, and their families."cralaw virtua1aw library

24. SEE Peo. v. Duero, supra, 104 SCRA 379; Peo. v. Jimenez, 71 SCRA 186; Peo. v. Robles, 104 SCRA 450; Peo. v. Caguioa, 95 SCRA 2.

25. Peo. v. Duero, supra, at p. 388.

26. Peo. v. Duero, supra, at p. 386.

The Solicitor General’s Comment, rollo, pp. 95, 102-103, states that the 1971 Constitutional Convention defined "investigation" as "investigation conducted by the police authorities which will include investigations conducted by the municipal police, the PC and the NBI and such other police agencies in our government’ (Session, November 25, 1972)."cralaw virtua1aw library

27. Peo. v. Caguioa, 95 SCRA 2, 9, quoting Miranda.

The Solicitor General’s Comment (rollo, p. 103) states that according to Escobedo v. Illinois, 378 U.S. 478, which preceded Miranda, 384 U.S. 436, "the right to counsel attaches when `the investigation is no longer a general inquiry into an unsolved crime but has begun to focus on a particular suspect, the suspect has been taken into police custody, the police carry out a process of interrogations that lends itself to eliciting incriminating statements.’" The Comment (rollo, p. 108) also draws attention to Gamboa v. Cruz, G.R. No. 56292, June 27, 1988 where this Court declared that "The right to counsel attaches only upon the start of an investigation, when the police officer starts to ask questions designed to elicit information and/or confessions or admissions from the accused."cralaw virtua1aw library

28. Morales v. Enrile, et al; Moncupa, Jr. v. Enrile, Et Al., 121 SCRA 538, 553.

29. Peo. v. Taylaran, 108 SCRA 373.

In this connection, the Solicitor General opines that so-called "on-the-scene questioning" of citizens by police officers in the fact-finding process are "undoubtedly admissible," for, as "distinguished from all questioning of a suspect, in . . . (such a) situation the compelling atmosphere inherent in the process of in-custody interrogation is not necessarily present." According to him, "when investigating crimes, an officer may inquire of persons not under restraint (Constitutional Law, Klotter/Kanovitz, 4th ed., 1984) . . . and ‘such general on-the-scene questions are not thought to be accusatory because they lack the compelling atmosphere inherent in the process of in-custody interrogation’ (Civil Rights and Liberties, A.L. Bonnicksen, 1982 ed.)."cralaw virtua1aw library

30. See footnotes 2 to 5 and related text, at p. 5, supra.

31. Sec. 1 (e), Rule 115 of the 1964 Rules of Court. The 1985 Rules on Criminal Procedure have amended the provision to read, "to be exempt from being compelled to be a witness against himself."cralaw virtua1aw library

32. Sec. 1 (d), Rule 115. The 1985 Rules on Criminal Procedure amended the provision to read: "To testify as a witness in his own behalf but subject to cross-examination on matters covered by direct examination. His silence — instead of merely his "neglect or refusal to be a witness — shall not in any manner prejudice him."cralaw virtua1aw library

33. Chavez v. C.A., supra, 24 SCRA 663.

34. Id., at pp. 677-678, citing; Cabal v. Kapunan, L-19052, Dec. 29, 1962; 21 Am. Jur. 2d., p. 383; 98 C.J.S., p. 265; Wigmore, Evidence, 1961 ed., p. 406; 3 Wharton’s Criminal Evidence, 11th ed., p. 1959-1960, all cited in Gupit, Jr., Rules of Criminal Procedure, 1986 ed., p. 240.

35. See People v. Gargoles, 83 SCRA 282.

36. However, as already pointed out, the rule now limits cross-examination of an accused only to "matters covered by direct examination."cralaw virtua1aw library

37. Or during preliminary investigation before a Judge or public prosecutor.

A.C. No. 1892 July 7, 1989 - LUIS V. ARTIAGA, JR. v. ENRIQUE C. VILLANUEVA

2012-11-11T16:53:05+00:00

EN BANC

[A.C. No. 1892. July 7, 1989.]

ATTY. LUIS V. ARTIAGA, JR., Complainant, v. ATTY. ENRIQUE C. VILLANUEVA, Respondent.

Rustico F. de los Reyes, Jr. for Respondent.

SYLLABUS

1. LEGAL ETHICS; ATTORNEYS; SUSPENSION FROM THE PRACTICE OF LAW; LIFTING OF SUSPENSION PROPER WHERE ACTS COMPLAINED OF WERE ATTRIBUTED TO HIS EXTREME ZEAL AND ENTHUSIASM IN PROSECUTING THE CAUSE OF HIS CLIENT. — A careful reexamination of the records of the case shows that the acts of respondent may be attributed to his extreme zeal and enthusiasm in prosecuting the cause of his client. There is no proof of any dishonest motive or fraud, much less of any contemptuous act committed by him towards the courts or towards the adverse party or counsel. While the courses of action he took tended to delay the disposition of the controversy and were redundant, his suspension from the practice of law is sufficient disciplinary action against him. Moreover, there is proof that the fault cannot be attributed entirely to the Respondent. Complainant and his counsel also contributed to the delay in filing Civil Case No. 183 for recovery of possession, which is still pending appeal, and in failing to comply with the agreement to settle the dispute by arbitration. Respondent and his client Aquino were willing to settle the problem but Estolano and his counsel did not care to pursue this course of action which could have terminated the matter once and for all. The attestations of responsible persons in the public and private sector as to the integrity and good moral character of respondent show that he has rehabilitated himself as to deserve another chance to resume the practice of law.

FELICIANO, J., dissenting:chanrob1es virtual 1aw library

1. REMEDIAL LAW; EVIDENCE; SUSPENSION OF ATTORNEYS; LIFTING OF SUSPENSION FROM THE PRACTICE OF LAW MUST BE SUPPORTED BY SUFFICIENT BASIS. — I am compelled to dissent from the majority opinion basically for the reason that, in my view, the Resolution on the Motion for Reconsideration has reversed the unanimous decision of this Court dated July 29, 1988 which "suspended indefinitely [the respondent] from the practice of law from date of notice until such time that he can demonstrate to the Court that he has rehabilitated himself and deserves to resume the practice of law." This Court may, of course, reverse itself on a motion for reconsideration where it finds that indeed it had committed serious error in rendering its original decision or resolution. However, the Court must, I respectfully submit, specify the basis which it has found sufficient for reversing its earlier unanimous decision.

2. ID.; ID.; ID.; ID.; ABSENCE OF ANY ADEQUATE LEGAL OR FACTUAL BASIS FOR LIFTING SUSPENSION, CASE AT BAR. — In the instant administrative case, the majority resolution on respondent’s Motion for Reconsideration omits any indication of any adequate legal or factual basis for reversing itself. In its original Decision dated July 29, 1988, the Court found respondent Atty. Villanueva guilty of the following unethical practices with which he had been charged:" [1] that respondent had caused his client to perjure himself; [2] that he lacks candor and respect toward his adversary and the courts; and [3] that he had been abusive of the right of recourse to the courts." Reconsideration, the majority found that the acts of respondent may be attributed to his extreme zeal and enthusiasm in prosecuting the cause of his client and there is no proof of any dishonest motive or fraud, much less of any contemptuous act committed by him towards the courts or towards the adverse party or counsel. I respectfully submit that the above subsequent findings are quite inconsistent with the findings set out in the original unanimous decision of the Court. The nature and character of the acts of which respondent attorney was found guilty by the Court in its original decision is such that they only could have been committed with "dishonest motive[s]." At the very least, it was incumbent upon respondent to prove that notwithstanding the obvious nature of those acts, he in fact acted from some pure and commendable internal motive visible only to himself. Respondent attorney has not, however, submitted any such proof other than his own assertion that he had acted "in good faith and fidelity" for "his poor and unlettered client."cralaw virtua1aw library

3. ID.; ID.; ID.; ID.; ID.; PROOF THAT RESPONDENT COUNSEL HAS REHABILITATED HIMSELF, WANTING. — The present majority resolution refers to a number of circumstances relating to respondent attorney, such as: his having represented tenant-farmers from Laguna, Cavite and Rizal; his appointment as Provincial Fiscal of Laguna on 9 February 1987; his having joined the Cursillo, Christian Charismatic and Christian Family Movements; and his being a YMCA Director and life member. Without detracting from whatever merit one may find in these circumstances, it should be pointed out that none of the circumstances appear to have materialized after July 29, 1988, the date of the promulgation of the original decision of this Court. As such, they do not appear to be proof that respondent attorney has "rehabilitated himself." Finally, assuming that the above circumstances materialized after July 29, 1988, I do not believe that such, by themselves and without more, would constitute adequate proof that respondent attorney has indeed rehabilitated himself .

R E S O L U T I O N

PER CURIAM:

Before the Court is a motion filed by the respondent seeking a reconsideration of the decision of this Court dated July 29, 1988 suspending respondent indefinitely from the practice of law until such time when he can demonstrate that he has rehabilitated himself and deserves to resume the practice of law. The following grounds are recited:chanrob1es virtual 1aw library

RESPONDENT DID NOT WITTINGLY OR WILLINGLY PROMOTE OR SUE IN BEHALF OF HIS POOR AND UNLETTERED CLIENT FOR MONEY OR MALICE IN THE SUBJECT CIVIL CASES AGAINST A VERY WEALTHY PUBLIC LAND APPLICANT FROM SAN JUAN, METRO MANILA, BUT AFTER BEING CONVINCED IN GOOD FAITH THAT HIS SAID CLIENT’S CAUSE SEEKING FOR JUSTICE IS LAWFUL, TRUE, JUST AND VALID UNDER THE FACTS AND EXISTING LAW ON SOCIAL LEGISLATION AND PUBLIC POLICY ON GIVING PUBLIC LAND TO THE LANDLESS AND NOT GROUNDLESS SUITS.

RESPONDENT IN GOOD FAITH AND FIDELITY TOOK UP THE CHALLENGE OF HANDLING OF THE CAUSE OF THE POOR UNLETTERED LANDLESS CLIENT AS THIS IS HIS DUTY AS DICTATED BY HIS CONSCIENCE AND CONVICTION.

III

RESPONDENT-MOVANT HEREIN HAS ONLY A FEW MORE MONTHS REMAINING FOR HIM TO SERVE IN THE PROSECUTION ARM OF THIS PRESENT DISPENSATION. HIS ONLY REMAINING ASPIRATION AT PRESENT IS TO REDEEM HIS NAME, HONOR AND INTEGRITY AGAINST THESE CHARGES OF ALLEGED PERJURY AND DELAY OF JUSTICE COMING FROM THE ADVERSE PARTY COUNSEL BEFORE HIS LIFE ENDS FOR, WITHOUT HONOR IS, FOR HIM, EQUIVALENT TO UNTIMELY DEATH AS A MEMBER OF THE BAR, AS PROVINCIAL FISCAL AND AS A CITIZEN."cralaw virtua1aw library

In the said decision, the Court found respondent guilty of unethical practices in: (1) causing his client to perjure himself; (2) that he lacks candor and respect towards his adversary and the courts; and (3) that he had been abusive of his right of recourse to the courts.

On the first charge, the Court found that respondent filed a verified complaint for ejectment docketed as Civil Case No. 192 in the Municipal Court of Los Baños, Laguna wherein it is alleged that in the early part of 1960 defendant Julian Estolano dispossessed plaintiff Glicerio Aquino of a portion of the property in question, while in an amended complaint it is alleged that Estolano deprived Aquino of a portion of said property in the early part of 1973 to enable the inferior court to acquire jurisdiction over the case.

Respondent now argues that he filed the said pleadings in good faith and that he had no intention to cause his client to commit perjury. He stressed that Aquino had been a bona fide occupant of the property in question even before 1958 and that his right was recognized by the Director of Lands in a decision dated August 13, 1962; that said property is an alienable portion of public land known as Camp Eldrige at Barangay Bambang, Los Baños, Laguna which is disposable under Republic Acts No. 274 and 730, with preferential right expressly given to actual occupants as Aquino; and that all he did was to exert his utmost and relentless time and effort in defending the cause of his poor, oppressed and unlettered landless client.

On the second and third charges for lacking candor towards his adversary and the courts and for abusing his right of recourse to the courts, respondent asserts that he only did his duty to protect the interests of his client.

The antecedents are the following:chanrob1es virtual 1aw library

Respondent filed an ejectment case in the Municipal Court of Los Baños, Laguna against Estolano on April 13, 1974, docketed as Civil Case No. 192. A writ of preliminary mandatory injunction was issued by the trial court on May 21, 1974 restoring Aquino in the possession of the property upon his filing a bond.

On May 15, 1974, respondent as counsel of Aquino, filed in the Court of First Instance (CFI) of Laguna an action for the annulment of the title of Estolano docketed as Civil Case No. 179-C. It was denied on April 26, 1976 for lack of cause of action and lack of jurisdiction.

In the meanwhile, on June 15, 1974, Estolano filed an action for recovery of possession of the property against Aquino also in the CFI of Laguna, docketed as Civil Case No. 183. This case was resolved in favor of Estolano and was appealed by Aquino to the Court of Appeals where it is still pending.

On January 5, 1977, the Municipal Court dismissed Civil Case No. 192 for lack of jurisdiction and the writ issued was dissolved. Said judgment was not executed as Aquino appealed to the CFI. Nevertheless, the appeal was dismissed. After the judgment had become final and executory, Estolano filed an ex parte motion for the execution of the same. Respondent filed an opposition stating that he filed a petition for certiorari in the CFI of Laguna. In deference to the same, the Municipal Court held in abeyance further action on the Estolano motion.

On July 1, 1977, respondent filed in behalf of Aquino an action against the Director of Lands and Estolano in the Court of Agrarian Relations (CAR) in San Pablo, Laguna for a determination of the preferential acquisitive rights and/or security of tenure of Aquino under Republic Acts No. 274 and 730 and Presidential Decrees No. 27 and 152 and Land Administrative Order No. 29. The case was docketed as CAR Case No. 7043. Upon an ex parte motion of respondent, the CAR issued a restraining order on July 2, 1977 enjoining the Director of Lands and Estolano from enforcing an earlier decision of the Director of Lands dated May 27, 1964 recognizing the prior right of Estolano to the questioned property and reversing his decision dated August 13, 1962 awarding to Aquino the preferential right to the property. However, this case was also dismissed on May 18, 1979 for lack of jurisdiction. On appeal, said decision was affirmed by the Court of Appeals on February 5, 1981.

Respondent argues that in all these cases that he filed in court his primary interest was to defend what he believes is the lawful cause of his client Glicerio Aquino. He asserts that he filed the ejectment case inasmuch as Aquino’s possession and preferential right to the property had been upheld in the decision of the Director of Lands dated August 13, 1962. Although the Director of Lands, in a subsequent decision dated May 27, 1964, reversed himself and sustained the claim of Estolano over the property, respondent alleges that said decision is null and void on the ground that the same is against public policy and that it was procured through deceit, fraud, corruption and undue influence. He also refers to Resolution No. 9, S-72 dated February 24, 1972 of the Presidential Action Committee on Justice and Agrarian Reform which in effect set aside said decision as it ordered a relocation survey of the property to determine once and for all the conflicting claims of Aquino and Estolano.

Respondent explains that these are the reasons why he filed the action for annulment of the title of Estolano. He states that he filed the complaint in the agrarian court also to enforce the right of Aquino as a tenant tilling the land who is given preferential right to the property under the law. He emphasizes that he did not deceive the CAR when he sought the issuance of a restraining order against the enforcement of the decision of the Director of Lands inasmuch as the parties had submitted their controversy to arbitration by then Secretary Ronaldo Zamora, Presidential Assistant on Legal Affairs, 1 but Estolano reneged on this agreement. Respondent concludes that Estolano and his counsel are responsible for the protracted litigation.

In March, 1988, an order of execution was issued by the trial court pending appeal of Civil Case 183-C. Thus, Aquino was effectively dispossessed of the property in question.

The filing of this administrative complaint on April 2, 1978, notwithstanding, respondent went on with his practice of law for several years. Most of his clients were poor/landless and indigent tenant-farmers from Laguna and Cavite, and from Parañaque, Bayumbong, and Jala-Jala, Rizal. 2

On January 20, 1987, he represented the Laguna chapter of the Integrated Bar of the Philippines (IBP) in the Government/NPC, Laguna Committee on Reconciliation and Ceasefire. 3 Thereafter, President Aquino appointed him Municipal Councilor of Sta. Cruz, Laguna. 4

Upon recommendation of the then Minister of Justice and the officials and members of the Laguna chapter of the IBP attesting to his probity, integrity, trustworthiness, exemplary life and character, 5 President Aquino appointed him Provincial Fiscal of Laguna 6 which position he assumed on February 9, 1987. Upon his suspension from the practice of law by this Court, he took an indefinite leave of absence effective August 11, 1988.

Respondent points out that except for this administrative case, no complaint, whether civil or criminal, has ever been filed against him. He also points out that he performed his duty as government prosecutor with dedication so much so that he received an award of appreciation from the PC/INP Command of Laguna. 7 Respondent adds that since 1978, he joined the Cursillo movement, the Christian Charismatic Movement and the Christian Family Movement. It also appears that he is a YMCA director and life member. 8

Respondent also contends that when he handled the case of Glicerio Aquino, his only motivation was to defend him from oppression and to protect him against a rich landowner, and that he received no monetary remuneration for his long and dedicated service except some tokens in the form of vegetable crops as camotes, guavas, mangos, star apples, etc. He maintains that all his actuations were predicated on good faith and the honest belief that they were proper.

After due investigation, the Office of the Solicitor General recommended a suspension of six (6) months from the practice of law as penalty. Respondent has been suspended since August 11, 1988, or for a period of about ten (10) months to date. He is due to retire as Provincial Fiscal of Laguna in July, 1989.

A careful reexamination of the records of the case shows that the acts of respondent may be attributed to his extreme zeal and enthusiasm in prosecuting the cause of his client. There is no proof of any dishonest motive or fraud, much less of any contemptuous act committed by him towards the courts or towards the adverse party or counsel. While the courses of action he took tended to delay the disposition of the controversy and were redundant, his suspension from the practice of law is sufficient disciplinary action against him. Moreover, there is proof that the fault cannot be attributed entirely to the Respondent. Complainant and his counsel also contributed to the delay in filing Civil Case No. 183 for recovery of possession, which is still pending appeal, and in failing to comply with the agreement to settle the dispute by arbitration. Respondent and his client Aquino were willing to settle the problem but Estolano and his counsel did not care to pursue this course of action which could have terminated the matter once and for all.

The attestations of responsible persons in the public and private sector as to the integrity and good moral character of respondent show that he has rehabilitated himself as to deserve another chance to resume the practice of law. 9

WHEREFORE, the motion for reconsideration is GRANTED in that the suspension of respondent from the practice of law is hereby lifted. This resolution is immediately executory.

SO ORDERED.

Fernan (C.J.), Narvasa, Gutierrez, Jr., Cruz, Paras, Gancayco, Padilla, Bidin, Sarmiento, Cortes, Griño-Aquino, Medialdea and Regalado, JJ., concur.

Melencio-Herrera, J., I concur in the dissent of Justice Feliciano.

Separate Opinions

FELICIANO, J., dissenting:chanrob1es virtual 1aw library

I am compelled to dissent from the majority opinion basically for the reason that, in my view, the Resolution on the Motion for Reconsideration has reversed the unanimous decision of this Court dated July 29, 1988 which "suspended indefinitely [the respondent] from the practice of law from date of notice until such time that he can demonstrate to the Court that he has rehabilitated himself and deserves to resume the practice of law." This Court may, of course, reverse itself on a motion for reconsideration where it finds that indeed it had committed serious error in rendering its original decision or resolution. However, the Court must, I respectfully submit, specify the basis which it has found sufficient for reversing its earlier unanimous decision.

In the instant administrative case, the majority resolution on respondent’s Motion for Reconsideration omits any indication of any adequate legal or factual basis for reversing itself.

In its original Decision dated July 29, 1988, the Court found respondent Atty. Villanueva guilty of the following unethical practices with which he had been charged:jgc:chanrobles.com.ph

" [1] that respondent had caused his client to perjure himself;

[2] that he lacks candor and respect toward his adversary and the courts; and.

[3] that he had been abusive of the right of recourse to the courts." (Decision, pp. 5-6)

1. The original decision found that:jgc:chanrobles.com.ph

"Anent the first charge, the complaint and amended complaint for forcible entry in Civil Case No. 192 filed by respondent’s client are clear proofs that respondent had indeed caused his client Glicerio Aquino to perjure himself as to the date he lost possession of the subject property so as to place the case within the jurisdiction of the court." (Decision, p. 6; Italics supplied)

The Court went on to say that:jgc:chanrobles.com.ph

"Such action of respondent counsel is a clear violation of his oath that ‘he will do no falsehood nor consent to the doing of any in court.’ A legal counsel is of course expected to defend his client’s cause with zeal but not at the disregard of truth . . . He violated his oath of office when he resorted to deception . . . Instead of safeguarding the interests of his client as his responsibility dictates, he did exactly the opposite by causing his client to commit a felony." (Decision, pp. 7-8; Emphasis supplied)

2. In respect of the second charge against respondent, the Court in its original decision made the following findings:jgc:chanrobles.com.ph

"Indeed, the manner in which respondent counsel handled the forcible entry case filed against the client of complainant shows his total lack of candor and respect for the courts and the rights of his adversary. He had employed every step necessary to forestall complainant’s client from taking rightful possession of subject property. He has shown utter disregard of the proper rules of procedure to suit his purpose. While he filed his urgent ex-parte motion for clarification, he chose not to wait for its resolution and instead perfected his appeal to the Court of First Instance. When finally the decision became executory because of his failure to appeal to the Court of Appeals, he filed a petition ‘for certiorari against the decision of the CFI which petition is obviously frivolous and a mere tactic to delay enforcement of the court’s decision. In the meantime, the clients of respondent refused to obey the order of execution.

A lawyer should obey all lawful orders and rulings of the court. He should have counseled his clients to submit to the order of the court instead of encouraging them to resist such order. The actuations of respondent of employing dilatory tactics by filing a clearly frivolous case amounts to obstruction of the administration of justice which constitutes misconduct and justifies disciplinary action against him.

Respondent counsel further demonstrated his questionable motive by filing another case, this time for annulment of the title of complainant’s client to the other 2-1/2 hectares of subject land with the Court of First Instance of Laguna, Branch VI. This case was dismissed on the ground of res judicata and prescription. Respondent appealed this ruling to the Court of Appeals where it was pending resolution at the time the instant complaint for disbarment was filed. The decision of the trial court was affirmed and remanded to the lower court for execution.

Not satisfied with the above-mentioned appeal, respondent counsel brought another case against complainant’s client this time before the Court of Agrarian Relations (CAR Case No. 7043) for determination allegedly of who had a better right over the subject property when he was well aware of the absence of any tenancy relationship between the parties.

An examination of the records shows that respondent did not disclose before the Court of Agrarian Relations (CAR) prior lawsuits and decisions rendered relative to the subject land . . ." (Decision, pp. 9-11; Emphasis supplied; Citations omitted)

3. In respect of the third charge against him, the findings of the Court in its original decision were as follows:jgc:chanrobles.com.ph

"The cause of respondent’s clients is obviously bereft of merit. Respondent was aware of this fact so he resorted to forum shopping, continuously seeking the court where he may possibly obtain favorable judgment, thereby adding to the already clogged dockets of the courts with the unmeritorious cases he filed. He grossly abused his right of recourse to the courts by filing multiple petitions or complaints for a cause that had been previously rejected in the false hope of getting some favorable action, somehow, thus, obstructing the administration of justice. He was derelict in his duty as counsel to maintain such actions or proceedings only as appears to him to be just, and such defenses only as he believes to be honestly debatable under the law. He had thus prostituted his office at the expense of justice.

The practice of law is a privilege accorded only to those who measure up to certain standards of mental and moral fitness. For a counsel who has been sworn to assist in the administration of justice and to uphold the rule of law, respondent has miserably failed to live up to the standards expected of a member of the Bar. Instead of assisting in the speedy disposition of cases, he made a mockery of our system of justice, thus deserving to be censured and penalized by this Court. No doubt, respondent is guilty of gross misconduct in office." (Decision, pp. 12-13, Emphasis supplied; Citations omitted)

In its present Resolution on the Motion for Reconsideration, the majority’s findings are as follows:jgc:chanrobles.com.ph

"A careful re-examination of the records of the case shows that the acts of respondent may be attributed to his extreme zeal and enthusiasm in prosecuting the cause of his client. There is no proof of any dishonest motive or fraud, much less of any contemptuous act committed by him towards the courts or towards the adverse party or counsel." (Emphasis supplied)

I respectfully submit that the above subsequent findings are quite inconsistent with the findings set out in the original unanimous decision of the Court. It is very difficult to understand how "a clear violation of [the lawyer’s] oath", "deception", "lack of candor and honesty [towards] the courts and his adversary", "utter disregard of the proper rules on procedure to suit his purpose", "obstruction of the administration of justice" "questionable motive", knowingly filing suits which are "obviously bereft of merit", " forum shopping", " prostitut[ing] his office at the expense of justice" and "miserably fail[ing] to live up to the standards expected of the member of the Bar" can be reasonably attributed to respondent’s "extreme zeal and enthusiasm in prosecuting the cause of his client." Moreover, I am unable to understand what proof of "dishonest motive or fraud" or contemptuous act" the majority is looking for. The nature and character of the acts of which respondent attorney was found guilty by the Court in its original decision is such that they only could have been committed with "dishonest motive[s]." At the very least, it was incumbent upon respondent to prove that notwithstanding the obvious nature of those acts, he in fact acted from some pure and commendable internal motive visible only to himself Respondent attorney has not, however, submitted any such proof other than his own assertion that he had acted "in good faith and fidelity" for "his poor and unlettered client."cralaw virtua1aw library

The present majority resolution refers to a number of circumstances relating to respondent attorney, such as: his having represented tenant-farmers from Laguna, Cavite and Rizal; his appointment as Provincial Fiscal of Laguna on 9 February 1987; his having joined the Cursillo, Christian Charismatic and Christian Family Movements; and his being a YMCA Director and life member. Without detracting from whatever merit one may find in these circumstances, it should be pointed out that none of the circumstances appear to have materialized after July 29, 1988, the date of the promulgation of the original decision of this Court. As such, they do not appear to be proof that respondent attorney has "rehabilitated himself." Finally, assuming that the above circumstances materialized after July 29, 1988, I do not believe that such, by themselves and without more, would constitute adequate proof that respondent attorney has indeed rehabilitated himself .

Accordingly, I vote for DENYING the Motion for Reconsideration.

Endnotes:

1. Annexes K to K-8 of Motion for Reconsideration.

2. Annex A, ibid.

3. Annex C, ibid.

4. Annex D, ibid.

5. Annexes E-1 to E-3, ibid.

6. Annex E, ibid.

7. Annex F, ibid.

8. Annex G, ibid.

9. Annexes B, C, D, E to E-3, F, G, H To H-4, and I to I-4, ibid.

G.R. Nos. 82405-06 July 10, 1989 - BANQUE DE L'INDOCHINE ET DE SUEZ, ET AL. v. RAMON AM. TORRES

2012-11-11T16:53:05+00:00

SECOND DIVISION

[G.R. Nos. 82405-06. July 10, 1989.]

BANQUE DE L’INDOCHINE ET DE SUEZ and BANQUE FRANCAIS DU COMMERCE EXTERIEUR, Petitioners, v. HONORABLE RAMON AM. TORRES, Presiding Judge, Regional Trial Court, Cebu City (Branch VII), HON. RICARDO DIAZ, Presiding Judge Regional Trial Court Manila (Branch XXVIII), CEBU SHIPYARD AND ENGINEERING WORKS, INC., SEVEN BROTHERS SHIPPING CORPORATION, YU HUE, JOHNNY YU, THE PHILIPPINE COAST GUARD, BUREAU OF CUSTOMS, PHILIPPINE PORTS AUTHORITY, HON. REGINO T. VERIDIANO II, Presiding Judge, Regional Trial Court, Manila (Branch XXXI), Deputy Sheriff RAMON G. ENRIQUEZ, PN Captain NAPOLEON C. BAYLON, GENSTAR CONTAINER CORPORATION, JOSE SISON, STARSHIP SHIPPING AGENCIES, INC., EXPRESS TRANSPORT CORPORATION, and MARITIME COMPANY OF THE PHILIPPINES, Respondents.

R E S O L U T I O N

PARAS, J.:

This is a Motion for Clarification and/or Reconsideration of Our decision promulgated November 24, 1988 where We dismissed the petition for being moot and academic. Finding the motion well taken, We hereby issue the following resolution.chanrobles virtual lawlibrary

Petitioners Banque de L’Indochine et de Suez (Banque Indosuez) and Banque Francais Du Commerce Exterieur (Banque Francais) are two (2) of the strongest commercial banks in France.

Banque Indosuez is licensed by our Central Bank to engage, as it is actually engaged, in offshore banking business in the Philippines.

Sometime in 1979, petitioners extended separate loans in the amounts of US$2,520,000.00 and $850,000.00, respectively, to Maritime Company Overseas, Inc. (MCO, for brevity) a Liberian corporation to finance its acquisition of the vessel MV "Mayon." To secure the payment thereof, MCO executed on July 5, 1979, a first preferred mortgage in favor of Banque Francais and a second preferred mortgage in favor of Banque Indosuez over MV "Mayon." MCO defaulted on its aforesaid loans so much so that at the time of the filing of this petition, it has an unpaid balance of US$802,832.78 exclusive of interests.

In 1984, petitioners intervened in a court action in the Regional Trial Court of Cebu to protect their mortgage rights over MV "Mayon." That case was filed by Cebu Shipyard and Engineering Works, Inc. against Maritime Company of the Philippines for collection of a sum of money arising from alleged repairs and other expenses on several vessels including MV "Mayon." The Cebu court issued a writ of preliminary attachment against MV "Mayon", authorized the sale of the vessel and in the hotly contested auction sale in 1985, Seven Brothers Shipping Corporation was the winning bidder. It changed the name MV "Mayon" to MV "Diamond Elephant"

Petitioners challenged the validity of the sale in a petition filed with the Court of Appeals in August 1985. Two years later, the Court of Appeals rendered a decision annulling the sale and ordering the vessel returned to the Cebu court, the appellate court ruling that the vessel was owned not by Maritime Company of the Philippines but by Maritime Company Overseas Inc., which was not a party to the Cebu case. This decision of the Court of Appeals became final and executory on September 23, 1987.

The sale of the subject vessel having been annulled, petitioners subsequently withdrew their intervention in the Cebu case. But they filed with the Regional Trial Court of Makati a petition for the arrest of MV "Mayon" preparatory to extrajudicial foreclosure in accordance with PD 1521, otherwise known as the Ship Mortgage Decree of 1978.

The Makati court issued on Sept. 25, 1987 an arrest order directing the Makati Sheriff to seize the MV "Mayon" now bearing the name MV "Diamond Elephant" and to transfer the same to the typhoon shelter of the Manila Yacht Club.

On September 28, 1987, the Makati Sheriff seized the vessel in Mariveles, Bataan and towed it to the Manila Yacht Club.

On September 30, 1987, Seven Brothers Shipping Corp. filed an Urgent Motion to Discharge Order of Arrest contending inter alia that (a) Seven Brothers was the owner of MV "Mayon" being the highest bidder at the public auction sale directed by the Cebu court; (b) this vessel was under preliminary attachment by the Cebu court, and (c) Seven Brothers allegedly incurred expenses "for rebuilding, repair and remodelling of the vessel in the amount of P30,000,000.00 for which it now asserts a claim (pp. 25-26, Rollo, Vol. I).

In an Order dated November 4, 1987, the Makati court denied the motion and ordered Deputy Sheriff Cristobal Jobson to deliver the possession of the vessel to petitioners to enable them to extrajudicially foreclose their mortgage thereon.chanrobles.com:cralaw:red

Banque Indosuez, acting pursuant to its express rights under the mortgage contract and realizing that the best possible price for the vessel could be obtained only if it were sold in Hongkong proceeded to tow MV "Mayon" to Hongkong. But just about the same time Banque Indosuez was preparing to tow the vessel to Hongkong, Cebu Shipyard, plaintiff in the Cebu case filed an Urgent Ex-parte motion praying for an order directing the Provincial sheriff of Cebu "to repossess the vessel MV "Mayon." . . and take said vessel into his custody and deliver the same to the custody and control of the Cebu court." (p. 31, Rollo, Vol. I).

Acting on this motion, the Cebu court issued an order dated November 6, 1987, stating that "per force of the decision (of the Court of Appeals dated September 23, 1987) the status of the vessel MV "Mayon" was necessarily reverted to its original one, that is, under attachment, per Order issued on May 18, 1984, and should remain therefore, attached, with the bond still subsisting in order to prevent a failure of justice." (p. 3, Rollo, Vol. I).

On November 7, 1987, the Cebu sheriff accompanied by Coast Guard escorts intercepted the MV "Mayon" near Zambales while it was being towed by a tugboat of the Malayan Towage and Salvage Inc. The Cebu sheriff then had the vessel towed to the Manila North Harbor by a tugboat of the Transpacific Towage, Inc.

However on November 12, 1987, Deputy Sheriff Arthur Flores, who was designated Special Sheriff by the Makati court recovered possession of MV "Mayon" on behalf of Banque Indosuez by posting on board two Coast Guard escorts deputized by him.

Then, on November 13, 1987, Seven Brothers filed a civil suit for damages, with the Regional Trial Court of Manila, Branch 27 presided over by Judge Ricardo Diaz, against Banque Indosuez, as well as Fredo Clemo and Malayan Towage the husbanding agent and tug company, respectively, of Banque Indosuez. This case, docketed as Civil Case No. 87-42758 (Manila case) was filed by Seven Brothers for reimbursement of expenses it allegedly incurred in engineering and coordinating the interception of MV "Mayon" by the Cebu sheriff on November 7, 1987. By way of provisional relief, Seven Brothers sought preliminary injunction to enjoin Banque Indosuez from foreclosing its mortgage on the vessel.

On the same day the complaint was filed, Judge Diaz issued a temporary restraining order enjoining Banque Indosuez from moving or relocating the vessel. After hearing on the motion the restraining order which would expire on December 3, 1987 was extended to December 18, 1987. 1

Meanwhile on November 27, 1987, Seven Brothers filed with the Manila Court an amended complaint impleading Jean Tirant, Banque Indosuez’s General Manager, as party defendant. The same was admitted on December 2, 1987 and the temporary restraining order was accordingly amended to include said defendant. And in an Order dated December 17, 1987, Judge Diaz directed the issuance of a writ of preliminary injunction. The writ was actually issued on December 23, 1987.

Going back to the Cebu case, Cebu Shipyard, plaintiff therein, filed on November 12, 1987 an amended complaint to implead MV "Mayon" and Maritime Company Overseas (MCO) as party defendants. Seven Brothers also filed a motion to admit attached complaint in intervention with prayer for preliminary attachment.

On November 17, 1987, Judge Torres issued an order directing the issuance of a writ of preliminary attachment against the properties of MCO including the MV "Mayon"

However, on December 20, 1987, Cebu Shipyard filed a motion to lift preliminary attachment because it found it "unproductive and expensive to be paying for the premium of the attachment bond." (p. 41, Rollo, Vol. I)

Then, on December 27, 1987, Cebu Shipyard considering that no answer has yet been filed to its complaint, filed a notice of Dismissal, "withdrawing its complaint as well as the amended complaint, including the writ of attachment executed in its favor for which the vessel MV "Mayon" was consequently attached." (pp. 41-42, Rollo, Vol. I)

On January 5, 1988, the Cebu court issued an order declaring that "the interests of substantial justice transcend the technicalities of law, such as the notice of dismissal filed by plaintiff herein", reiterating that MV "Mayon" was still within "the jurisdiction of the Court," and directing the sheriff of Manila or any of its deputies "to take all measures necessary to put the vessel MV "Mayon" wherever found under attachment and prevent the same vessel from being taken away from Philippine waters." (p. 45, Rollo, Vol. I)

Thus, Banque Indosuez, apparently prejudiced by the Manila Court’s interference with the jurisdiction previously acquired by the Makati court over MV "Mayon" filed on December 22, 1987 with the Court of Appeals a petition for certiorari with prayer for preliminary injunction, docketed therein as AC G.R. Sp. No. 13554, entitled "Banque Indosuez v. Hon. Ricardo Diaz, Seven Brothers Shipping Co., Yu Hue and Johnny Yu."cralaw virtua1aw library

On December 22, 1987, the Court of Appeals, in order to maintain the status quo resolved to issue a restraining order, restraining respondent Judge and private respondents and all persons acting under or through them from implementing his order dated December 17, 1987 directing the issuance of a writ of preliminary injunction and from further proceeding with Civil Case No. 87-42758 (Manila Case).

But when the sheriff of the Court of Appeals assisted by Coast Guard escorts tried twice on December 29 and 30, 1987 to board the vessel to implement the restraining order, the agents of Seven Brothers refused to lower the ladder.

Hence, petitioners were constrained to file the instant petition against Hon. Ramon. A. Torres, presiding judge RTC Cebu; Hon. Ricardo Diaz, presiding judge RTC Manila; Cebu Shipyard & Engineering Works Inc.; Seven Brothers Shipping Corporation; Yu Hue; Johnny Yu; The Philippine Coast Guard; Bureau of Customs and Philippine Ports Authority. They pray that —

1. Upon filing of this petition, this Honorable Court issue a temporary restraining order enjoining respondent Judges Torres and Diaz from further proceeding with their respective cases, and directing Seven Brothers to deliver possession of the subject vessel to petitioners Banque Indosuez, or at the very least, to the Philippine Coast Guard or the Bureau of Customs for safekeeping and maintenance of said vessel for the benefit of all parties subject to the outcome of case;

2. This Honorable Court give due course to this petition;

3. After notice and hearing, and the filing of such bond as may be required, this Honorable Court convert the temporary restraining order prayed for into a writ of preliminary injunction; and

4. After due proceeding, this Honorable Court issue a writ of certiorari and prohibition directing as follows:chanrob1es virtual 1aw library

a) Nullifying and setting aside the questioned orders of respondent Judges Torres and Diaz;

b) Directing respondents Judges Torres and Diaz to desist from further proceeding with the Cebu and Manila cases;

c) Declaring the Cebu case dismissed in toto as of the filing by Cebu Shipyard of the notice of dismissal;

d) Ordering the Manila case dismissed;

e) Declaring petitioner Banque Indosuez entitled to the possession of the vessel, and directing whoever is in possession of the vessel, to deliver, or allow Banque Indosuez to take delivery of, the vessel, preparatory to Banque Indosuez’s foreclosure of its preferred mortgage on the vessel; and

f) Directing Seven Brothers and all other parties asserting claims on the vessel to litigate their claims in the Makati case.

On April 27, 1988, petitioners filed a pleading captioned "Urgent Motion to Cite for Contempt and for Protective Order." They alleged that on April 25, 1988, Banque Indosuez learned for the first time that in another case pending in the Regional Trial Court, Manila, Branch 31, presided over by Judge Veridiano II, entitled "Genstar Container Corporation Et. Al. v. Maritime Company of the Phil. ("MCP") Civil Case No. 85-30-134, (hereinafter referred to as the "Genstar case") a move was underway to spirit the MV "Mayon" out of the reach of this Court on the pretext that the vessel is MV "Puerto Princesa" ; that MV "Puerto Princesa" was inexistent. She had been arrested in Hongkong in May 1986 by virtue of a warrant issued by the Supreme Court of Hongkong on complaint of herein petitioner Banque Indosuez, was ordered sold at a bidding in Hongkong and was actually sold to the highest bidder Greenfield Shipping Limited in August 1984. She was later brought to Taiwan for breaking and disposition as scrap iron. It was formerly owned by Maritime Company Overseas Inc. which was not a party to the Genstar case.

It appears that in the Genstar case which according to petitioners provided setting for Seven Brothers scheme "to pass off MV "Mayon" as the MV "Puerto Princesa" (p. 1415 Rollo Vol. III) Genstar is a judgment creditor which obtained a valid, final and executory judgment against Maritime Company of the Phil. wayback on November 29, 1985. To satisfy said judgment, Genstar thru attorney-in-fact Jose C. Sison requested for an alias writ of execution last December 3, 1987 after the previous writs issued were returned partially satisfied. Accordingly, sheriff Enriquez issued a "Notice of Levy Upon Personal Properties etc." addressed to the Commanding Officer First Coast Guard District PCG, Manila, covering the vessel MV "Puerto Princesa." Since the said vessel was apparently in the custody of another person who according to the sheriff was a certain Tseng Tao, Genstar thru Jose C. Sison filed an ex-parte Urgent Motion for the remeasurement of the vessel, to verify its true identity and ownership before any execution sale is conducted. This motion was granted by Judge Veridiano II. The findings of the coast guard shows that the vessel is MV "Puerto Princesa."cralaw virtua1aw library

On December 16, 1987 sheriff Enriquez issued a Certificate of Sale attesting that the vessels MV "Balintawak", MV "Nasipit" and MV "Puerto Princesa" were sold at public auction to Starship, for a total sum of P4,200,000.00.

On February 8, 1988, Starship filed a "Motion to Direct the Deputy Sheriff Enriquez to take possession of the vessels mentioned in the Sheriff Certificate of Sale dated December 16, 1987."cralaw virtua1aw library

Acting on said motion Judge Veridiano II issued an order the following day, February 9, 1988, directing sheriff Enriquez "to take possession of the aforementioned vessels and to sell the same at public auction, for the satisfaction of the writ of execution . . ."cralaw virtua1aw library

On March 9, 1988, sheriff Enriquez issued a second Sheriff’s Certificate of Sale attesting that on that day, the MV "Puerto Princesa" was sold at public auction to the highest bidder, Starship for P4,262,000.00.

Then, on April 12, 1988 Enriquez issued a third Sheriffs Certificate of Sale attesting that on that day, the MV "Puerto Princesa" was sold at public auction to the highest bidder, Express for P2,500,000.00. The certificate bears the approval of Judge Veridiano II.

On the same day, Genstar issued a certification attesting receipt from Enriquez of the amount of P2,500,000.00.

On April 13, 1988, Judge Veridiano II issued an order confirming and approving the third sheriff’s certificate of Sale, directing the PCG to register the sale and to assist the sheriff in placing the custody of the vessel to Express.

On April 14, 1988 Baylon of the PCG issued a Certificate of Ownership over MV "Puerto Princesa" in favor of Express.

On April 26, 1988, Banque Indosuez filed (in the Genstar case) an urgent manifestation and motion to withhold delivery of the vessel. Judge Veridiano granted the motion in his Order dated April 27, 1988.

Petitioners then alleged that the removal of MV "Mayon" through the above-described scheme involving Seven Brothers, Genstar, Starship and Deputy Sheriff Ramon Enriquez constitutes an improper conduct tending directly or indirectly, to impede, obstruct or degrade the administration of justice, and an abuse of process and unlawful interference with the proceedings of this Court, for which they should be punished for contempt (Sec. 3, Rule 71, Rules of Court). That in the meantime, as a protective remedy, Seven Brothers, Genstar, Starship and Deputy Sheriff Ramon Enriquez should be ordered to withhold delivery of MV "Mayon" to any other entity or individual, immediately return or cause the return of the vessel to its previous location or to the Port of Manila and place the vessel under the custody and control of the Philippine Coast Guard or the Bureau of Customs.

On April 28, 1988, the Court resolved (1) to grant a temporary restraining order, enjoining the respondent Judges Torres and Diaz from further proceeding with their respective cases (2) to issue upon the posting by the petitioners of a bond, approved by this Court, in the amount of P3,000,000.00 a writ of Preliminary Mandatory Injunction ordering the private respondents herein to deliver to the Bureau of Customs as soon as notice hereof is received, the vessel which the private respondents tried to and actually seized (3) to require the private respondents to comment on petitioners’ urgent motion to cite for contempt.

It turned out, however, that at 2:00 o’clock a.m. of April 27, 1988, the vessel had been removed from its anchorage at Limay, Bataan and towed out of the country. It is now in Kaoshiung, Taiwan.

On May 6, 1988, petitioners filed an Urgent Supplemental Petition alleging the foregoing events that transpired in the "Genstar case" and impleading as additional parties the following: Hon. Regino T. Veridiano II as Presiding Judge of the Regional Trial Court, Manila, Branch 31, Ramon G. Enriquez as Deputy Sheriff of Manila, Napoleon Baylon as officer of the Phil. Coast Guard (PCG), Genstar Container Corp., Atty. Jose C. Sison, Maritime Company of the Philippines, Starship Shipping Agencies Inc. and Express Transport Corporation.

Petitioners submit that being the preferred mortgagees of the MV "Mayon" with a right to take possession thereof, they are entitled to vindicate this right by filing the Urgent Supplemental Petition considering that —

a) The levy and sale on execution of the MV "Mayon" were an absolute nullity and conferred no rights whatsoever;

b) The ordinary remedy of appeal was inappropriate because petitioners were not parties in Civil Case No. 85-30134 and could not have made any appeal from respondent Judge Veridiano’s decision or any of its final orders therein;

c) This Court had already assumed jurisdiction of the MV "Mayon." Petitioner filed their Petition with this Court on March 23, 1988. Therefore, when petitioners filed their Urgent Supplemental Petition, they were merely seeking relief in connection with a new and supervening stage in the continuing conspiratorial act of fraud being committed by respondents. This Court having assumed jurisdiction over the Petition and all the issues raised therein, is thus the proper tribunal to take jurisdiction over the new issues raised in the Urgent Supplemental Petition, it appearing that the former and the latter issues invariably pertain to the disposition of the MV "Mayon."

d) Any doubt about the technical propriety of vindicating petitioners’ claim to the MV "Mayon" by means of the Urgent Supplemental Petition should be laid to rest by the well-settled principle that the wooden adherence to procedural form should never sacrifice the ends of justice.

Thus, petitioners pray that after due proceeding, this Court issue a writ of certiorari and prohibition directing as follows:chanrob1es virtual 1aw library

a) Nullifying and setting aside the questioned acts, proceedings, reports and Certificates of Sale of respondent Sheriff;

b) Nullifying and setting aside the levy and sale of public auction of the supposed MV "Mayon" ;

c) Nullifying and setting aside the questioned orders and proceedings of respondent Judge Veridiano;

d) Nullifying and setting aside the questioned acts and proceedings of respondent Baylon and the PCG;

e) Declaring as null and void the delivery of the subject vessel to Express and any party claiming or tracing title from Express, and the removal of the vessel from its previous location at Limay, Bataan; and

f) Ordering Express and any party claiming or tracing title from Express to surrender the vessel and/or to desist from taking or retaking delivery of the vessel. (p. 1429, Rollo, Vol. III)

In the Resolution dated May 16, 1988, the respondents were required to comment-on the petition, within ten (10) days from notice.

Respondents Seven Brothers, Yu Hue and Johnny Yu blame the Philippine Coast Guard, respondents Deputy Sheriff Enriquez, Genstar, Starship and Baylon by claiming that the latter had intimidated them into giving up the MV "Mayon."

Respondents Genstar and Sison would pass the buck on to respondent Deputy Sheriff Enriquez, maintaining that it was the latter who located the MV "Mayon" and determined it to be the MV "Puerto Princesa."

Deputy Sheriff Enriquez, for his part, would appear to have relied solely on the determination of the Marine & Industrial Surveyors of the PCG and the Claimsmen Adjustment Corporation that the MV "Mayon" is the MV "Puerto Princesa."

The PCG, as well as respondent Baylon, would insist that they did nothing that was not expressly ordered to be done by respondent Judge Veridiano.

Meanwhile, petitioners have filed a petition in Taiwan in order to prevent the scrapping of MV "Mayon." By virtue thereof, petitioners have secured an order of provisional seizure for the said vessel.

In Our Decision promulgated November 24, 1988 We dismissed the petition for being moot and academic.

On December 26, 1988, petitioners filed a Motion for Clarification and/or Reconsideration. They allege that a declaration that the present case has become moot and academic with the removal of the vessel would give the wrong and unjust impression that the taking of the vessel was lawful and that the vessel was MV "Puerto Princesa" and not MV "Mayon", and that respondent Judge Veridiano’s orders that allowed the vessel to be taken out of the country are final, binding and conclusive. This would work grave injustice upon petitioners who are then left with no ordinary, speedy and adequate remedy.

Petitioners further allege that the present case, which involves original and supplemental petitions, is not limited to the issue of possession of the vessel. While the original petition seeks a declaration of petitioners’ right to actual possession of the vessel the supplemental petition prays for the nullification of certain proceedings and orders relative to the fraudulent removal of the vessel. These challenged orders and proceedings, if not nullified and set aside, are presumed by comity to be valid and binding for all intents and purposes in all parts of the world, including Taiwan.

It appears that the adverse parties in the Taiwan case, one of which is respondent Starship herein, have put up as their defense the alleged validity of the levy and execution sale conducted by respondent Deputy Sheriff Enriquez and approved by respondent Judge Veridiano II. This makes it imperative for this Court to rule once and for all on the validity of the questioned execution and sale of the subject vessel.

Petitioners claim that the MV "Puerto Princesa" no longer existed at the time of the alleged sale and that the MV "Mayon" subject of this case was unlawfully taken by respondent Deputy Sheriff Enriquez from respondent Seven Brothers and smuggled out of the country as the MV "Puerto Princesa." In support thereof, petitioners attached as Annex A to their Manifestation and Urgent Motion for Restraining Order dated April 13, 1988, the duly authenticated affidavit of Mr. Jonathan Lyne dated May 10, 1988 which shows that —

(a) On 30 May 1984, the Supreme Court of Hongkong issued an admiralty writ of arrest on the MV "Puerto Princesa." (Exhibit WJCL-1 (b) of Lyne’s Affidavit).

(b) On 10 August 1984, the M/V "Puerto Princesa" was sold at public auction to Greenfield Shipping Ltd., which sale was confirmed by the Supreme Court of Hongkong on 14 August 1984. (Exhibits WTCh-1(d) WJCL-1(f) of Lyne’s Affidavit).

(c) On 27 September 1984, Greenfield Shipping Ltd. sold and delivered the MV "Puerto Princesa" to Chian Yu Steel Industrial Co. Ltd. of 593 Kuant Fu Road, Chao Chou Town, Ping Tung, Taiwan. (Exhibits WJCJ-1(a) and WJEL-1(h) of Lyne’s Affidavit).

(d) According to Lloyds Confidential Index, the MV "Puerto Princesa" was broken up on 29 November 1984. In fact, the name MV "Puerto Princesa" does not appear in the list of vessels in the 1985/ 1986, 1986/1987 and 1987/1988 Lloyds Register of Ships.

To erase all doubts that the MV "Puerto Princesa" was scrapped in 1984, petitioners also submit as Annexes "C & D" (pp. 1643-1647 Rollo Vol. III) a copy each of the Original Records of Scrapped Vessels and the English translation thereof, clearly showing that the MV "Puerto Princesa" was demolished for scrap during the period starting November 10, 1984 until November 29, 1984 by Chien Yu Steel Industrial Co. Ltd. at Da Zen District Scrapping Pier No. 18 by virtue of Demolition Permit No. 3808. Also submitted in evidence is the official certification of the Lloyds Registry of Shipping which states that the vessel was delisted from Lloyds Registry after 1985 because it had previously been broken up. (p. 1617 Rollo Vol. III)

The respondents have not rebutted the foregoing evidence. On the contrary, respondents Seven Brothers, Yu Hue and Johnny Yu admitted in their Manifestation (p. 1480, Rollo, Vol. III) that they cannot comply with the directive of this Court to surrender possession of the MV Mayon to petitioners because the vessel "Mayon" or "Diamond Elephant" was taken from their custody on April 23, 1988 at around 12:00 p.m.

More revealing is the sworn statement (Ang Aming Salaysay) dated April 24, 1988 (p. 1483 Rollo, Vol. III) of respondents Seven Brothers. In this sworn statement, they declared that those who boarded the vessel removed the name "Diamond Elephant" on the vessel and painted the name "Puerto Princesa." It should be recalled that Seven Brothers had painted the name "Diamond Elephant" on the MV "Mayon."

The foregoing is further confirmed by the findings of the Salvage Association, Hongkong, whose surveyor, Mr. Malcolm Bird, conducted a survey on May 13, 1988 on the subject vessel. This survey disclosed that the serial number plates were still attached to the main engine receivers. Prominently indicated on these plates is No. 277 which is the yacht number of the shipyard where the MV "Mayon" was built. (pp. 1630-1634, Rollo Vol. III)

WHEREFORE, this Court hereby issues the extraordinary writs of certiorari and prohibition, and:chanrob1es virtual 1aw library

a) Nullifies and sets aside the questioned acts, proceedings, reports and Certificates of Sale of respondent Sheriff;

b) Nullifies and sets aside the levy and sale of public auction of the supposed MV "Mayon" ;

c) Nullifies and sets aside the questioned orders and proceedings of respondent Judge Veridiano;

d) Nullifies and sets aside the questioned acts and proceedings of respondent Baylon and the PCG;

e) Declares as null and void the delivery of the subject vessel to Express and any party claiming or tracing title from Express, and the removal of the vessel from its previous location at Limay, Bataan; and

f) Orders Express and any party claiming or tracing title from Express to surrender the vessel and/or to desist from taking or retaking delivery of the vessel.

SO ORDERED.

Melencio-Herrera (Chairman), Padilla, Sarmiento and Regalado, JJ., concur.

Endnotes:

1. The extension would ordinarily be disallowed. However here, an injunction was subsequently granted, therefore the defect has been cured.

G.R. No. 83551 July 11, 1989 - RODOLFO B. ALBANO v. RAINERIO O. REYES, ET AL.

2012-11-11T16:53:05+00:00

EN BANC

[G.R. No. 83551. July 11, 1989.]

RODOLFO B. ALBANO, Petitioner, v. HON. RAINERIO O. REYES, PHILIPPINE PORTS AUTHORITY, INTERNATIONAL CONTAINER TERMINAL SERVICES, INC., E. RAZON, INC., ANSCOR CONTAINER CORPORATION, and SEALAND SERVICES. LTD., Respondents.

Vicente Abad Santos for Petitioner.

Bautista, Picazo, Buyco & Tan for Private Respondents.

SYLLABUS

1. ADMINISTRATIVE LAW; PHILIPPINE PORTS AUTHORITY; AUTHORIZED TO CONTRACT WITH PRIVATE ENTITY TO HANDLE CARGOES AND OTHER PORT RELATED SERVICES. — While the PPA has been tasked, under E.O. No. 30, with the management and operation of the Manila International Port Complex and to undertake the providing of cargo handling and port related services thereat, the law provides that such shall be "in accordance with P.D. 857 and other applicable laws and regulations." On the other hand, P.D. No. 857 expressly empowers the PPA to provide services within Port Districts "whether on its own, by contract, or otherwise" [Sec. 6(a) (v)]. Therefore, under the terms of E.O. No. 30 and P.D. No. 857, the PPA may contract with the International Container Terminal Services, Inc. (ICTSI) for the management, operation and development of the MICP. In the instant case, the PPA, in the exercise of the option granted it by P.D. No. 857, chose to contract out the operation and management of the MICP to a private corporation. This is clearly within its power to do. Thus, PPA’s acts of privatizing the MICT and awarding the MICT contract to ICTSI are wholly within the jurisdiction of the PPA under its Charter which empowers the PPA to "supervise, control, regulate, construct, maintain, operate and provide such facilities or services as are necessary in the ports vested in, or belonging to the PPA." (Section 6(a) ii, P.D. 857).

2. MERCANTILE LAW; PUBLIC SERVICE ACT; LEGISLATIVE FRANCHISE, NOT ALWAYS NECESSARY IN THE OPERATION OF PUBLIC UTILITY. — Franchises issued by Congress are not required before each and every public utility may operate. Thus, the law has granted certain administrative agencies the power to grant licenses for or to authorize the operation of certain public utilities. (See E.O. Nos. 172 and 202)

3. CONSTITUTIONAL LAW; NATIONAL ECONOMY AND PATRIMONY; POWER TO AMEND, ALTER OR REPEAL AUTHORIZATION BY CONGRESS FOR OPERATION OF PUBLIC UTILITY, NOT AN IMPLICATION THAT ONLY CONGRESS HAS POWER TO GRANT AUTHORIZATION. — That the Constitution provides in Art. XII, Sec. 11 that the issuance of a franchise, certificate or other form of authorization for the operation of a public utility shall be subject to amendment, alteration or repeal by Congress does not necessarily imply, as petitioner posits, that only Congress has the power to grant such authorization. Our statute books are replete with laws granting specified agencies in the Executive Branch the power to issue such authorization for certain classes of public utilities.

4. REMEDIAL LAW; ACTIONS; CAPACITY TO SUE; A TAXPAYER AND MEMBER OF CONGRESS, WITH CAPACITY TO ASSAIL CONTRACT ENTERED INTO BY THE PHILIPPINE PORTS AUTHORITY. — That petitioner herein is suing as a citizen and taxpayer and as a Member of the House of Representatives, sufficiently clothes him with the standing to institute the instant suit questioning the validity of the assailed contract. While the expenditure of public funds may not be involved under the contract, public interest is definitely involved considering the important role of the MICP in the economic development of the country and the magnitude of the financial consideration involved. Consequently, the disclosure provision in the Constitution would constitute sufficient authority for upholding petitioner’s standing. [Cf. Tañada v. Tuvera, G.R. No. 63915, April 24, 1985, 136 SCRA 27, citing Severino v. Governor General, 16 Phil. 366 (1910), where the Court considered the petitioners with sufficient standing to institute an action where a public right is sought to be enforced.]

5. ID.; COURTS; AS A RULE, WILL REFUSE TO INTERFERE WITH ADMINISTRATIVE PROCEEDINGS. — The determination of whether or not the winning bidder is qualified to undertake the contracted service should be left to the sound judgment of the PPA. The PPA, having been tasked with the formulation of a plan for the development of port facilities and its implementation [Sec. 6(a) (i)], is the agency in the best position to evaluate the feasibility of the projections of the bidders and to decide which bid is compatible with the development plan. Neither the Court, nor Congress, has the time and the technical expertise to look into this matter. (Manuel v. Villena G.R. No. L-28218, February 27, 1971, 37 SCRA 745)

GUTIERREZ, JR., J., concurring:chanrob1es virtual 1aw library

1. ADMINISTRATIVE LAW; PHILIPPINE PORTS AUTHORITY; AUTHORITY TO CONTRACT ARRASTRE SERVICES; QUALIFICATIONS OF BIDDER, LEFT TO THE SOUND DISCRETION. — The determination of whether or not the winning bidder is qualified to undertake the contracted service should be left to the sound judgment of the Philippine Ports Authority (PPA). I agree that the PPA is the agency which can best evaluate the comparative qualifications of the various bidding contractors and that in making such evaluation it has the technical expertise which neither this Court nor Congress possesses.

D E C I S I O N

PARAS, J.:

This is a Petition for Prohibition with prayer for Preliminary Injunction or Restraining Order seeking to restrain the respondents Philippine Ports Authority (PPA) and the Secretary of the Department of Transportation and Communications Rainerio O. Reyes from awarding to the International Container Terminal Services, Inc. (ICTSI) the contract for the development, management and operation of the Manila International Container Terminal (MICT).

On April 20, 1987, the PPA Board adopted its Resolution No. 850 directing PPA management to prepare the Invitation to Bid and all relevant bidding documents and technical requirements necessary for the public bidding of the development, management and operation of the MICT at the Port of Manila, and authorizing the Board Chairman, Secretary Rainerio O. Reyes, to oversee the preparation of the technical and the documentation requirements for the MICT leasing as well as to implement this project.

Accordingly, respondent Secretary Reyes, by DOTC Special Order 87-346, created a seven (7) man "Special MICT Bidding Committee" charged with evaluating all bid proposals, recommending to the Board the best bid, and preparing the corresponding contract between the PPA and the winning bidder or contractor. The Bidding Committee consisted of three (3) PPA representatives, two (2) Department of Transportation and Communications (DOTC) representatives, one (1) Department of Trade and Industry (DTI) representative and one (1) private sector representative. The PPA management prepared the terms of reference, bid documents and draft contract which materials were approved by the PPA Board.chanrobles virtual lawlibrary

The PPA published the Invitation to Bid several times in a newspaper of general circulation which publication included the reservation by the PPA of "the right to reject any or all bids and to waive any informality in the bids or to accept such bids which may be considered most advantageous to the government."cralaw virtua1aw library

Seven (7) consortia of companies actually submitted bids, which bids were opened on July 17, 1987 at the PPA Head Office. After evaluation of the several bids, the Bidding Committee recommended the award of the contract to develop, manage and operate the MICT to respondent International Container Terminal Services, Inc. (ICTSI) as having offered the best Technical and Financial Proposal. Accordingly, respondent Secretary declared the ICTSI consortium as the winning bidder.

Before the corresponding MICT contract could be signed, two successive cases were filed against the respondents which assailed the legality or regularity of the MICT bidding. The first was Special Civil Action 55489 for "Prohibition with Preliminary Injunction" filed with the RTC of Pasig by Basilio H. Alo, an alleged "concerned taxpayer", and, the second was Civil Case 88-43616 for "Prohibition with Prayer for Temporary Restraining Order (TRO)" filed with the RTC of Manila by C.F. Sharp Co., Inc., a member of the nine (9) firm consortium — "Manila Container Terminals, Inc." which had actively participated in the MICT Bidding.

Restraining Orders were issued in Civil Case 88-43616 but these were subsequently lifted by this Court in Resolutions dated March 17, 1988 (in G.R. No. 82218 captioned "Hon. Rainerio O. Reyes etc., Et. Al. v. Hon. Doroteo N. Caneba, etc., Et. Al.) and April 14, 1988 (in G.R. No. 81947 captioned "Hon. Rainerio O. Reyes etc., Et. Al. v. Court of Appeals, Et. Al.")

On May 18, 1988, the President of the Philippines approved the proposed MICT Contract, with directives that "the responsibility for planning, detailed engineering, construction, expansion, rehabilitation and capital dredging of the port, as well as the determination of how the revenues of the port system shall be allocated for future port works, shall remain with the PPA; and the contractor shall not collect taxes and duties except that in the case of wharfage or tonnage dues and harbor and berthing fees, payment to the Government may be made through the contractor who shall issue provisional receipts and turn over the payments to the Government which will issue the official receipts." (Annex "I").

The next day, the PPA and the ICTSI perfected the MICT Contract (Annex "3") incorporating therein by "clarificatory guidelines" the aforementioned presidential directives. (Annex "4").

Meanwhile, the petitioner, Rodolfo A. Albano filed the present petition as citizen and taxpayer and as a member of the House of Representatives, assailing the award of the MICT contract to the ICTSI by the PPA. The petitioner claims that since the MICT is a public utility, it needs a legislative franchise before it can legally operate as a public utility, pursuant to Article 12, Section 11 of the 1987 Constitution.

The petition is devoid of merit.

A review of the applicable provisions of law indicates that a franchise specially granted by Congress is not necessary for the operation of the Manila International Container Port (MICP) by a private entity, a contract entered into by the PPA and such entity constituting substantial compliance with the law.

1. Executive Order No. 30, dated July 16, 1986, provides:chanrob1es virtual 1aw library

WHEREFORE, I, CORAZON C. AQUINO, President of the Republic of the Philippines, by virtue of the powers vested in me by the Constitution and the law, do hereby order the immediate recall of the franchise granted to the Manila International Port Terminals, Inc. (MIPTI) and authorize the Philippine Ports Authority (PPA) to take over, manage and operate the Manila International Port Complex at North Harbor, Manila and undertake the provision of cargo handling and port related services thereat, in accordance with P.D. 857 and other applicable laws and regulations.

Section 6 of Presidential Decree No. 857 (the Revised Charter of the Philippine Ports Authority) states:chanrob1es virtual 1aw library

a) The corporate duties of the Authority shall be:chanrob1es virtual 1aw library

x x x

(ii) To supervise, control, regulate, construct, maintain, operate, and provide such facilities or services as are necessary in the ports vested in, or belonging to the Authority.

x x x

(v) To provide services (whether on its own, by contract, or otherwise) within the Port Districts and the approaches thereof, including but not limited to —

— berthing, towing, mooring, moving, slipping, or docking of any vessel;

— loading or discharging any vessel;

— sorting, weighing, measuring, storing, warehousing, or otherwise handling goods.

x x x

b) The corporate powers of the Authority shall be as follows:chanrob1es virtual 1aw library

x x x

(vi) To make or enter into contracts of any kind or nature to enable it to discharge its functions under this Decree.

x x x

[Emphasis supplied.]

Thus, while the PPA has been tasked, under E.O. No. 30, with the management and operation of the Manila International Port Complex and to undertake the providing of cargo handling and port related services thereat, the law provides that such shall be "in accordance with P.D. 857 and other applicable laws and regulations." On the other hand, P.D. No. 857 expressly empowers the PPA to provide services within Port Districts "whether on its own, by contract, or otherwise" [Sec. 6(a) (v)]. Therefore, under the terms of E.O. No. 30 and P.D. No. 857, the PPA may contract with the International Container Terminal Services, Inc. (ICTSI) for the management, operation and development of the MICP.

2. Even if the MICP be considered a public utility, 1 or a public service 2 on the theory that it is a "wharf" or a "dock" 3 as contemplated under the Public Service Act, its operation would not necessarily call for a franchise from the Legislative Branch. Franchises issued by Congress are not required before each and every public utility may operate. Thus, the law has granted certain administrative agencies the power to grant licenses for or to authorize the operation of certain public utilities. (See E.O. Nos. 172 and 202)

That the Constitution provides in Art. XII, Sec. 11 that the issuance of a franchise, certificate or other form of authorization for the operation of a public utility shall be subject to amendment, alteration or repeal by Congress does not necessarily imply, as petitioner posits, that only Congress has the power to grant such authorization. Our statute books are replete with laws granting specified agencies in the Executive Branch the power to issue such authorization for certain classes of public utilities. 4

As stated earlier, E.O. No. 30 has tasked the PPA with the operation and management of the MICP, in accordance with P.D. 857 and other applicable laws and regulations. However, P.D. 857 itself authorizes the PPA to perform the service by itself, by contracting it out, or through other means. Reading E.O. No. 30 and P.D. No. 857 together, the inescapable conclusion is that the lawmaker has empowered the PPA to undertake by itself the operation and management of the MICP or to authorize its operation and management by another by contract or other means, at its option. The latter power having been delegated to the PPA, a franchise from Congress to authorize an entity other than the PPA to operate and manage the MICP becomes unnecessary.

In the instant case, the PPA, in the exercise of the option granted it by P.D. No. 857, chose to contract out the operation and management of the MICP to a private corporation. This is clearly within its power to do. Thus, PPA’s acts of privatizing the MICT and awarding the MICT contract to ICTSI are wholly within the jurisdiction of the PPA under its Charter which empowers the PPA to "supervise, control, regulate, construct, maintain, operate and provide such facilities or services as are necessary in the ports vested in, or belonging to the PPA." (Section 6(a) ii, P.D. 857).

The contract between the PPA and ICTSI, coupled with the President’s written approval, constitute the necessary authorization for ICTSI’s operation and management of the MICP. The award of the MICT contract approved by no less than the President of the Philippines herself enjoys the legal presumption of validity and regularity of official action. In the case at bar, there is no evidence which clearly shows the constitutional infirmity of the questioned act of government.chanrobles virtual lawlibrary

For these reasons the contention that the contract between the PPA and ICTSI is illegal in the absence of a franchise from Congress appears bereft of any legal basis.

3. On the peripheral issues raised by the party, the following observations may be made:chanrob1es virtual 1aw library

A. That petitioner herein is suing as a citizen and taxpayer and as a Member of the House of Representatives, sufficiently clothes him with the standing to institute the instant suit questioning the validity of the assailed contract. While the expenditure of public funds may not be involved under the contract, public interest is definitely involved considering the important role of the MICP in the economic development of the country and the magnitude of the financial consideration involved. Consequently, the disclosure provision in the Constitution 5 would constitute sufficient authority for upholding petitioner’s standing. [Cf. Tañada v. Tuvera, G.R. No. 63915, April 24, 1985, 136 SCRA 27, citing Severino v. Governor General, 16 Phil. 366 (1910), where the Court considered the petitioners with sufficient standing to institute an action where a public right is sought to be enforced.]

B. That certain committees in the Senate and the House of Representatives have, in their respective reports, and the latter in a resolution as well, declared their opinion that a franchise from Congress is necessary for the operation of the MICP by a private individual or entity, does not necessarily create a conflict between the Executive and the Legislative Branches needing the intervention of the Judicial Branch. The court is not faced with a situation where the Executive Branch has contravened an enactment of Congress. As discussed earlier, neither is the Court confronted with a case of one branch usurping a power pertaining to another.

C. Petitioner’s contention that what was bid out, i.e., the development, management and operation of the MICP, was not what was subsequently contracted, considering the conditions imposed by the President in her letter of approval, thus rendering the bids and projections immaterial and the procedure taken ineffectual, is not supported by the established facts. The conditions imposed by the President did not materially alter the substance of the contract, but merely dealt on the details of its implementation.

D. The determination of whether or not the winning bidder is qualified to undertake the contracted service should be left to the sound judgment of the PPA. The PPA, having been tasked with the formulation of a plan for the development of port facilities and its implementation [Sec. 6(a) (i)], is the agency in the best position to evaluate the feasibility of the projections of the bidders and to decide which bid is compatible with the development plan. Neither the Court, nor Congress, has the time and the technical expertise to look into this matter.

Thus, the Court in Manuel v. Villena (G.R. No. L-28218, February 27, 1971, 37 SCRA 745] stated:chanrob1es virtual 1aw library

[C]ourts, as a rule, refuse to interfere with proceedings undertaken by administrative bodies or officials in the exercise of administrative functions. This is so because such bodies are generally better equipped technically to decide administrative questions and that non-legal factors, such as government policy on the matter, are usually involved in the decisions. rat p. 750.]

In conclusion, it is evident that petitioner has failed to show a clear case of grave abuse of discretion amounting to lack or excess of jurisdiction as to warrant the issuance of the writ of prohibition.

WHEREFORE, the petition is hereby DISMISSED.

SO ORDERED.

Fernan (C.J.), Narvasa, Melencio-Herrera, Cruz, Gancayco, Bidin, Cortes, Griño-Aquino, Medialdea and Regalado, JJ., concur.

Feliciano, J., In the result.

Padilla, J., No part in the deliberations.

Sarmiento, J., No part. One of the respondents was my client.

Separate Opinions

GUTIERREZ, JR., J., concurring:chanrob1es virtual 1aw library

I concur in the Court’s decision that the determination of whether or not the winning bidder is qualified to undertake the contracted service should be left to the sound judgment of the Philippine Ports Authority (PPA). I agree that the PPA is the agency which can best evaluate the comparative qualifications of the various bidding contractors and that in making such evaluation it has the technical expertise which neither this Court nor Congress possesses.

However, I would feel more comfortable in the thought that the above rulings are not only grounded on firm legal foundations but are also factually accurate if the PPA shows greater consistency in its submissions to this Court.

I recall that in E. Razon, Inc. v. Philippine Ports Authority (151 SCRA 233 [1977]), this Court decided the case in favor of the PPA because, among others, of its submissions that: (1) the petitioner therein committed violations as to outside stevedoring services, inadequate equipment, delayed submission of reports, and non-compliance with certain port regulations; (2) respondent Marina Port Services and not the petitioner was better qualified to handle arrastre services; (3) the petitioner being controlled by Alfredo Romualdez could not enter into a management contract with PPA and any such contract would be null and void; and (4) even if the petitioner may not have shared in the illegal intention behind the transfer of majority shares, it shared in the benefits of the violation of law.

I was surprised during the oral arguments of the present petition to hear the counsel for PPA submit diametrically different statements regarding the capabilities and worth of E. Razon, Inc., as an arrastre operator. It now turns out that the Manila International Container Terminal will depend a great deal on the expertise, reliability and competence of E. Razon, Inc., for its successful operations. The time difference between the two petitions is insubstantial. After going over the pleadings of the present petition, I am now convinced that it is the submissions of PPA in this case and not its contentions in G.R. No. 75197 which are accurate and meritorious. There is the distinct possibility that we may have been unfair in the earlier petition because of assertions made therein which are contradictory to the submissions in the instant petition. No such doubts would exist if the Government is more consistent in its pleadings on such important factual matters as those raised in these two petitions.

Endnotes:

1. A "public utility" is a business or service engaged in regularly supplying the public with some commodity or service of public consequence such as electricity, gas, water, transportation, telephone or telegraph service. Apart from statutes which define the public utilities that are within the purview of such statutes, it would be difficult to construct a definition of a public utility which would fit every conceivable case. As its name indicates, however, the term public utility implies a public use and service to the public. (Am. Jur. 2d V. 64, p. 549).

2. The Public Service Act (C.A. No. 146, as amended) provides that the term public service "includes every person that now or hereafter may own, operate, manage, or control in the Philippines, for hire or compensation, with general or limited clientele, whether permanent, occasional or accidental, and done for general business purposes, any common carrier, railroad, street railway, traction railway, sub-way motor vehicle, either for freight or passenger, or both with or without fixed route and whatever may be its classification, freight or carrier service of any class, express service, steamboat, or steamship line, pontines, ferries, and water craft, engaged in the transportation of passengers and freight or both, shipyard, marine railway, refrigeration plant, canal, irrigation system, gas, electric light, heat and power, water supply and power, petroleum, sewerage system, wire or wireless communications system, wire or wireless broasting stations and other similar public services.." [Sec. 13 (b).].

3. Under P.D. 857 the term dock "includes locks, cuts entrances, graving docks, inclined planes, slipways, quays, and other works and things appertaining to any dock", while wharf "means a continuous structure built parallel to along the margin of the sea or alongside riverbanks, canals, or waterways where vessels may lie alongside to receive or discharge cargo, embark or disembark passengers, or lie at rest." [Sec. 3(j) and (o).].

4. Examples of such agencies are:chanrob1es virtual 1aw library

1. The Land Transportation Franchising and Regulatory Board created under E.O. No. 202, which is empowered to "issue, amend, revise, suspend or cancel Certificates of Public Convenience or permits authorizing the operation of public land transportation services provided by motorized vehicles, and to prescribe the appropriate terms and conditions therefor." [Sec. 5(b).].

2. The Board of Energy, reconstituted into the Energy Regulatory Board created under E.O. No. 172, is empowered to license refineries and regulate their capacities and to issue certificates of public convenience for the operation of electric power utilities and services, except electric cooperatives [Sec. 9 (d) and (e), P.D. No. 1206.].

5. Art. II, Sec. 28. Subject to reasonable conditions prescribed by law, the State adopts and implements a policy of full disclosure of all its transactions involving public interest.

G.R. No. 78763 July 12, 1989 - MANILA ELECTRIC COMPANY v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

2012-11-11T16:53:05+00:00

FIRST DIVISION

[G.R. No. 78763. July 12, 1989.]

MANILA ELECTRIC COMPANY, Petitioner, v. THE NATIONAL LABOR RELATIONS COMMISSION, and APOLINARIO M. SIGNO, Respondents.

Angara, Abello, Concepcion, Regala & Cruz for Petitioner.

Dominador Maglalang for Private Respondent.

SYLLABUS

1. LABOR AND SOCIAL LEGISLATIONS; TERMINATION OF EMPLOYMENT; EMPLOYER CAN GENERALLY DISMISS OR LAY-OFF AN EMPLOYEE FOR JUST AND AUTHORIZED CAUSES UNDER ARTICLES 282 AND 283 OF LABOR CODE. — The power to dismiss is the normal prerogative of the employer. An employer, generally, can dismiss or lay-off an employee for just and authorized causes enumerated under Articles 282 and 283 of the Labor Code.

2. ID.; ID.; ID.; RIGHT OF EMPLOYER TO FREELY DISCHARGE HIS EMPLOYEES, SUBJECT TO REGULATION BY THE STATE IN THE EXERCISE OF ITS PARAMOUNT POLICE POWER; REASON. — The right of an employer to freely discharge his employees is subject to regulation by the State, basically in the exercise of its paramount police power. This is so because the preservation of the lives of the citizens is a basic duty of the State, more vital than the preservation of corporate profits (Euro-Linea, Phil. Inc. v. NLRC, G.R. No. 75782, December 1, 1987, 156 SCRA 78).

3. REMEDIAL LAW; APPEAL; FINDINGS OF ADMINISTRATIVE AGENCIES GENERALLY ACCORDED NOT ONLY RESPECT BUT EVEN FINALITY; REVIES LIMITED TO ISSUES OF JURISDICTION OR GRAVE ABUSE OF DISCRETION. — Well-established is the principle that findings of administrative agencies which have acquired expertise because their jurisdiction is confined to specific matters are generally accorded not only respect but even finality. Judicial review by this Court on labor cases does not go so far as to evaluate the sufficiency of the evidence upon which the proper labor officer or office based his or its determination but is limited to issues of jurisdiction or grave abuse of discretion (Special Events and Central Shipping Office Workers Union v. San Miguel Corporation, G.R. Nos. L-51002-06, May 30, 1983, 122 SCRA 557).

4. LABOR AND SOCIAL LEGISLATIONS; TERMINATION OF EMPLOYMENT; DISMISSAL OF AN EMPLOYEE EVEN FOR A VALID CAUSE SHOULD NOT BE IMPOSED; LENGTH OF TIME OF EMPLOYEE’S SERVICE, CONSTRUED. — This Court has held time and again, in a number of decisions, that notwithstanding the existence of a valid cause for dismissal, such as breach of trust by an employee, nevertheless, dismissal should not be imposed, as it is too severe a penalty if the latter has been employed for a considerable length of time in the service of his employer. (Itogon-Suyoc Mines, Inc. v. NLRC, Et Al., G.R. No. L-54280, September 30, 1982, 117 SCRA 523 and other cases cited.)

5. ID.; LABOR CODE; WORKMEN’S WELFARE IS PRIMORDIAL AND PARAMOUNT CONSIDERATION IN THE INTERPRETATION OF PROVISIONS AND IMPLEMENTING REGULATIONS. — In carrying out and interpreting the Labor Code’s provisions and its implementing regulations, the workingman’s welfare should be the primordial and paramount consideration. This kind of interpretation gives meaning and substance to the liberal and compassionate spirit of the law as provided for in Article 4 of the New Labor Code which states that "all doubts in the implementation and interpretation of the provisions of the Labor Code including its implementing rules and regulations shall be resolved in favor of labor" (Abella v. NLRC, G.R. No. 71812, July 30, 1987, 152 SCRA 140).

6. ID.; TERMINATION OF EMPLOYMENT; REINSTATEMENT OF RESPONDENT PROPER BUT WITHOUT AWARD OF BACKWAGES; CASE AT BAR. — Reinstatement of respondent Signo is proper in the instant case, but without the award of backwages, considering the good faith of the employer in dismissing the Respondent.

D E C I S I O N

MEDIALDEA, J.:

This is a petition for certiorari under Rule 65 of the Rules of Court seeking the annulment of the resolution of the respondent National Labor Relations Commission dated March 12, 1987 (p. 28, Rollo) in NLRC Case No. NCR-8-3808-83, entitled, "Apolinario M. Signo, Complainant, versus Manila Electric Company, Respondents", affirming the decision of the Labor Arbiter which ordered the reinstatement of private respondent herein, Apolinario Signo, to his former position without backwages.

The antecedent facts are as follows:chanrob1es virtual 1aw library

Private respondent Signo was employed in petitioner company as supervisor-leadman since January 1963 up to the time when his services were terminated on May 18, 1983.chanroblesvirtualawlibrary

In 1981, a certain Fernando de Lara filed an application with the petitioner company for electrical services at his residence at Peñafrancia Subdivision, Marcos Highway, Antipolo, Rizal. Private respondent Signo facilitated the processing of the said application as well as the required documentation for said application at the Municipality of Antipolo, Rizal. In consideration thereof, private respondent received from Fernando de Lara the amount of P7,000.00. Signo thereafter filed the application for electric services with the Power Sales Division of the company.

It was established that the area where the residence of de Lara was located is not yet within the serviceable point of Meralco, because the place was beyond the 30-meter distance from the nearest existing Meralco facilities. In order to expedite the electrical connections at de Lara’s residence, certain employees of the company, including respondent Signo, made it appear in the application that the sari-sari store at the corner of Marcos Highway, an entrance to the subdivision, is applicant de Lara’s establishment, which, in reality is not owned by the latter.chanrobles law library : red

As a result of this scheme, the electrical connections to de Lara’s residence were installed and made possible. However, due to the fault of the Power Sales Division of petitioner company, Fernando de Lara was not billed for more than a year.

Petitioner company conducted an investigation of the matter and found respondent Signo responsible for the said irregularities in the installation. Thus, the services of the latter were terminated on May 18, 1983.

On August 10, 1983, respondent Signo filed a complaint for illegal dismissal, unpaid wages, and separation pay.

After the parties had submitted their position papers, the Labor Arbiter rendered a decision (p. 79, Rollo) on April 29, 1985, which stated, inter alia:jgc:chanrobles.com.ph

"Verily, complainant’s act of inducing the Meralco employees to effectuate the installation on Engr. de Lara’s residence prejudiced the respondent, and therefore, complainant himself had indeed became a participant in the transactions, although not directly, which turned out to be illegal, not to mention that some of the materials used therein belongs to Meralco, some of which were inferior quality . . ."cralaw virtua1aw library

"While complainant may deny the violation, he cannot do away with company’s Code on Employee Discipline, more particularly Section 7, par. 8 and Section 6, par. 24 thereof. However, as admitted by the respondent, the infraction of the above cited Code is punishable by reprimand to dismissal."cralaw virtua1aw library

". . . And in this case, while considering that complainant indeed committed the above-cited infractions of company Code of Employee Discipline, We shall also consider his records of uninterrupted twenty (20) years of service coupled with two (2) commendations for honesty. Likewise, We shall take note that subject offense is his first, and therefore, to impose the extreme penalty of dismissal is certainly too drastic. A penalty short of dismissal is more in keeping with justice, and adherence to compassionate society.

"WHEREFORE, respondent Meralco is hereby directed to reinstate complainant Apolinario M. Signo to his former position as Supervisor Leadman without backwages, considering that he is not at all faultless. He is however, here warned, that commission of similar offense in the future, shall be dealt with more severely.

"SO ORDERED."cralaw virtua1aw library

Both parties appealed from the decision to the respondent Commission. On March 12, 1987, the respondent Commission dismissed both appeals for lack of merit and affirmed in toto the decision of the Labor Arbiter.

On June 23, 1987, the instant petition was filed with the petitioner contending that the respondent Commission committed grave abuse of discretion in affirming the decision of the Labor Arbiter. A temporary restraining order was issued by this Court on August 3, 1987, enjoining the respondents from enforcing the questioned resolution of the respondent Commission.

The issue to resolve in the instant case is whether or not respondent Signo should be dismissed from petitioner company on grounds of serious misconduct and loss of trust and confidence.

Petitioner contends that respondent Signo violated Sections 6 and 7 of the company’s Code on Employee Discipline, which provide:jgc:chanrobles.com.ph

"Section 6, Par. 24 — Encouraging, inducing or threatening another employee to perform an act constituting a violation of this Code or of company work, rules or an offense in connection with the official duties of the latter, or allowing himself to be persuaded, induced or influenced to commit such offense.

"Penalty — Reprimand to dismissal, depending upon the gravity of the offense.

"Section 7, Par. 8 — Soliciting or receiving money, gift, share, percentage or benefits from any person, personally or through the mediation of another, to perform an act prejudicial to the Company.

"Penalty — Dismissal." (pp. 13-14, Rollo)

Petitioner further argues that the acts of private respondent constituted breach of trust and caused the petitioner company economic losses resulting from the unbilled electric consumption of de Lara; that in view thereof, the dismissal of private respondent Signo is proper considering the circumstances of the case.

The power to dismiss is the normal prerogative of the employer. An employer, generally, can dismiss or lay-off an employee for just and authorized causes enumerated under Articles 282 and 283 of the Labor Code. However, the right of an employer to freely discharge his employees is subject to regulation by the State, basically in the exercise of its paramount police power. This is so because the preservation of the lives of the citizens is a basic duty of the State, more vital than the preservation of corporate profits (Euro-Linea, Phil. Inc. v. NLRC, G.R. No. 75782, December 1, 1987, 156 SCRA 78).chanrobles virtual lawlibrary

There is no question that herein respondent Signo is guilty of breach of trust and violation of company rules, the penalty for which ranges from reprimand to dismissal depending on the gravity of the offense. However, as earlier stated, the respondent Commission and the Labor Arbiter found that dismissal should not be meted to respondent Signo considering his twenty (20) years of service in the employ of petitioner, without any previous derogatory record, in addition to the fact that petitioner company had awarded him in the past, two (2) commendations for honesty. If ever the petitioner suffered losses resulting from the unlisted electric consumption of de Lara, this was found to be the fault of petitioner’s Power Sales Division.

We find no reason to disturb these findings. Well-established is the principle that findings of administrative agencies which have acquired expertise because their jurisdiction is confined to specific matters are generally accorded not only respect but even finality. Judicial review by this Court on labor cases does not go so far as to evaluate the sufficiency of the evidence upon which the proper labor officer or office based his or its determination but is limited to issues of jurisdiction or grave abuse of discretion (Special Events and Central Shipping Office Workers Union v. San Miguel Corporation, G.R. Nos. L-51002-06, May 30, 1983, 122 SCRA 557).

This Court has held time and again, in a number of decisions, that notwithstanding the existence of a valid cause for dismissal, such as breach of trust by an employee, nevertheless, dismissal should not be imposed, as it is too severe a penalty if the latter has been employed for a considerable length of time in the service of his employer. (Itogon-Suyoc Mines, Inc. v. NLRC, Et Al., G.R. No. L-54280, September 30, 1982, 117 SCRA 523; Meracap v. International Ceramics Manufacturing Co., Inc., Et Al., G.R. Nos. L-48235-36, July 30, 1979, 92 SCRA 412; Sampang v. Inciong, G.R. No. 50992, June 19, 1985, 137 SCRA 56; De Leon v. NLRC, G.R. No. L-52056, October 30, 1980, 100 SCRA 691; Philippine Airlines, Inc. v. PALEA, G.R. No. L-24626, June 28, 1974, 57 SCRA 489).

In a similar case, this Court ruled:jgc:chanrobles.com.ph

"As repeatedly been held by this Court, an employer cannot legally be compelled to continue with the employment of a person who admittedly was guilty of breach of trust towards his employer and whose continuance in the service of the latter is patently inimical to its interest. The law in protecting the rights of the laborers, authorized neither oppression nor self-destruction of the employer.

"However, taking into account private respondent’s `twenty-three (23) years of service which undisputedly is unblemished by any previous derogatory record’ as found by the respondent Commission itself, and since he has been under preventive suspension during the pendency of this case, in the absence of a showing that the continued employment of private respondent would result in petitioner’s oppression or self destruction, We are of the considered view that his dismissal is a drastic punishment . . .

x x x

"The ends of social and compassionate justice would therefore be served if private respondent is reinstated but without backwages in view of petitioner’s obvious good faith." (Itogon-Suyoc Mines, Inc. v. NLRC, Et Al., 117 SCRA 528)

Further, in carrying out and interpreting the Labor Code’s provisions and its implementing regulations, the workingman’s welfare should be the primordial and paramount consideration. This kind of interpretation gives meaning and substance to the liberal and compassionate spirit of the law as provided for in Article 4 of the New Labor Code which states that "all doubts in the implementation and interpretation of the provisions of the Labor Code including its implementing rules and regulations shall be resolved in favor of labor" (Abella v. NLRC, G.R. No. 71812, July 30, 1987, 152 SCRA 140).

In view of the foregoing, reinstatement of respondent Signo is proper in the instant case, but without the award of backwages, considering the good faith of the employer in dismissing the Respondent.chanrobles virtual lawlibrary

ACCORDINGLY, premises considered, the petition is hereby DISMISSED and the assailed decision of the National Labor Relations Commission dated March 12, 1987 is AFFIRMED. The temporary restraining order issued on August 3, 1987 is lifted.

SO ORDERED.

Narvasa, Cruz, Gancayco and Griño-Aquino, JJ., concur.

G.R. No. 84113 July 12, 1989 - FEDERICO N. TRISTE, JR. v. EXECUTIVE SECRETARY, ET AL.

2012-11-11T16:53:05+00:00

EN BANC

[G.R. No. 84113. July 12, 1989.]

FEDERICO N. TRISTE, JR., Petitioner, v. EXECUTIVE SECRETARY, HON. CATALINO MACARAIG, JR., SECRETARY OF PUBLIC WORKS & HIGHWAYS, HON. JUANITO N. FERRER, SECRETARY OF BUDGET & MANAGEMENT, HON. GUILLERMO CARAGUE, HON. PROCESO T. GONZALES, & COMMISSION ON AUDIT, Respondents.

Ballon, Triste & Suratos for Petitioner.

SYLLABUS

1. CONSTITUTIONAL LAW; EXECUTIVE DEPARTMENT; POWER OF CONTROL; OFFICIAL ACTS OF DEPARTMENT SECRETARIES ARE PRESUMPTIVELY ACTS OF CHIEF EXECUTIVE UNLESS DISAPPROVED OR REPROBATED BY THE LATTER. — There is no merit in the petitioner’s argument that his courtesy resignation was not accepted by competent authority because the acceptance was done by Secretary Mercado, not by the appointing authority, the President. The Department secretaries are representatives of the President and their official acts are presumptively the acts of the Chief Executive unless disapproved or reprobated by the latter (Villena v. Sec. of Interior, 67 Phil. 463; and other cases cited). Hence, Minister Mercado’s acceptance of the petitioner’s courtesy resignation is deemed to be the act of the President.

2. LAW ON PUBLIC OFFICERS; TERMINATION OF OFFICIAL RELATIONS; PETITIONER DEEMED TO HAVE IRREVOCABLY RESIGNED FROM GOVERNMENT SERVICE BY APPLYING FOR AND RECEIVING RETIREMENT BENEFITS DUE HIM UNDER REPUBLIC ACT NO. 1616. — Seizing upon the public respondent’s argument that he could be removed from his position as Assistant Secretary for Comptrollership and Financial Management Services at any time because his appointment to that office was in an acting capacity only (Abano v. Guipo, 15 SCRA 604), the petitioner, in his amended petition, pleads for reversion to his former permanent position as Assistant Regional Director of the COA. That plea is untenable because by applying for and receiving the retirement benefits due him under Republic Act No. 1616, he may be deemed to have irrevocably resigned from the government service. Moreover, there is no showing that his former job in the COA is in fact vacant.

D E C I S I O N

GRIÑO-AQUINO, J.:

This petition involves a ranking department official who tendered his courtesy resignation upon the change of administration after the EDSA revolution, but now asks the court to annul the acceptance of his resignation, reinstate him to his position, and set aside the appointment of his successor.

The petitioner, Federico Triste, Jr., was an Assistant Regional Director in the Commission on Audit (COA), with a permanent appointment to that position (Annexes B, B-1, Amended Petition). On April 11, 1983, he was detailed in the Department of Public Works and Highways (Annexes C & D, Amended Petition), and, on March 24, 1984 was appointed as Acting Assistant Minister of Comptrollership of the Ministry of Public Works and Highways by former President Ferdinand E. Marcos (Annex E, Amended Petition). The office was later renamed the Office of the Assistant Secretary of Comptrollership and Financial Management.chanrobles virtualawlibrary chanrobles.com:chanrobles.com.ph

On February 26, 1986, after the EDSA revolution and in compliance with President Corazon C. Aquino’s Proclamation No. 1 dated February 25, 1986, requiring, as a first step in the reorganization of the government, "all appointive public officials to submit their courtesy resignation beginning with the members of the Supreme Court," petitioner submitted two (2) courtesy resignations, one coursed through then Public Works Minister Jesus Hipolito and another through the newly-appointed Minister Rogaciano M. Mercado (Annexes D & E).

On March 25, 1986, a Provisional (Freedom) Constitution was promulgated. To deal with the flood of courtesy resignations many of which had not been acted upon, resulting in the lowering of the morale and diminishing the efficiency of the civil service, Article III, Section 2, of the Provisional Constitution fixed a deadline for the President and her ministers to appoint replacements for the resignees, thus:jgc:chanrobles.com.ph

"SECTION 2. All elective and appointive officials and employees under the 1973 Constitution shall continue in office until otherwise provided by proclamation or executive order or upon the designation or appointment and qualification of their successors, if such is made within a period of one year from February 25, 1986.

"SECTION 3. Any public official or employee separated from the service as a result of the reorganization effected under this Proclamation shall, if entitled under the laws then in force, receive the retirement and other benefits accruing thereunder."cralaw virtua1aw library

On May 22, 1986, Minister Mercado designated Gregorio Alvarez as Officer-in-Charge of the Office of the Assistant Minister for Comptrollership, replacing the petitioner (Annex F).

On July 23, 1986, Executive Secretary Joker P. Arroyo "By authority of the President," appointed Alvarez as Assistant Minister for Comptrollership, Ministry of Public Works and Highways (Annex 1, Comment, p. 57, Rollo).

In a letter dated August 4, 1986, which the petitioner received on August 15, 1986, Minister Mercado accepted the petitioner’s courtesy resignation (Annex H).

On August 25, 1986, the petitioner appealed Minister Mercado’s action to the Review Committee which was created under E.O. No. 17, Series of 1986. He also sent a letter to the Career Executive Service Board requesting for reinstatement. The action of the Board is not disclosed in the petition for certiorari. On the other hand, on October 15, 1986 the Review Committee dismissed his appeal for lack of jurisdiction (Annex J).

On December 2, 1986, the petitioner appealed to the Office of the President (Annex K) which referred the matter to the Ministry (now Department) of Public Works and Highways for comment.

On July 21, 1987, an appointment list of six (6) Assistant Secretaries in the Department of Public Works and Highways, including Alvarez as Assistant Secretary for Comptrollership and Financial Management was signed by the President. Also in the list was respondent Proceso T. Gonzales as Assistant Secretary for Internal Audit Service (Annex 2, Comment, p. 58, Rollo).

On December 7, 1987, DPWH Undersecretary T.G. Gener, replying to the President’s referral of December 2, 1986 regarding the petitioner’s appeal, informed the Office of the President that the petitioner’s request for reinstatement could not be accommodated because his successor, Gregorio S. Alvarez, had been appointed by the President in the position in question on July 27, 1987 (should be July 21, 1987) and took his oath of office on August 3, 1987.

On March 24, 1988, Alvarez was promoted to the position of Undersecretary of the DPWH, and Proceso T. Gonzales, the Assistant Secretary for Internal Audit Service, was reassigned by the Department Secretary to the position vacated by Alvarez. In view of that development, petitioner contends that the position of Assistant Secretary for Comptrollership and Financial Management (to which he desires to be reinstated) is still vacant because Gonzales was merely "reassigned," not appointed, to that office.chanroblesvirtualawlibrary

On April 8, 1988, Deputy Executive Secretary Magdangal B. Elma, acting by authority of the President, denied the petitioner’s appeal. On April 29, 1988, the petitioner received the order of denial which is quoted below:jgc:chanrobles.com.ph

"This refers to the petition of Federico N. Triste, Jr. for reinstatement to his former position as Assistant Minister for Comptrollership, Department of Public Works and Highways.

"Records disclose that, in a memorandum, dated August 4, 1986, of the then Minister (now Secretary) of Public Works and Highways, petitioner was advised that his tender of resignation ‘is deemed accepted’ and his employment terminated effective on even date. On August 21, 1986, Petitioner, sought reconsideration of his separation from the service with the Review Committee created under Executive Order No. 17, series of 1986. The committee, in its resolution, dated October 15, 1986, dismissed the petition for reconsideration for lack of jurisdiction. Hence, the instant request for reinstatement.

In a 1st indorsement, dated January 6, 1987, this Office referred petitioner’s request to the Ministry (now Department) of Public Works and Highways for comment. In a letter dated December 7, 1987, DPWH Undersecretary T.G. Gener advised this Office that it cannot accommodate petitioner’s request for reappointment into the service of the DPWH, considering that his successor, Gregorio S. Alvarez, had been appointed by the President to the position in question on July 21, 1987, and had taken his oath of office on August 3, 1987.

"The instant petition for reinstatement is without merit. Petitioner lost sight of the fact that his separation from the government service was as a consequence of the reorganization undertaken by the government pursuant to the provisions of Article Ill, Section 2 of Proclamation No. 8, issued by the President on March 25, 1986, which reads:jgc:chanrobles.com.ph

"‘SECTION 2. All elective and appointive officials and employees under the 1973 Constitution shall continue in office until otherwise provided by proclamation or executive order or upon the designation or appointment and qualification of their successors, if such is made within a period of one year from February 25, 1986.’

WHEREFORE, premises considered, the instant petition for reinstatement of Federico N. Triste, Jr. is hereby DENIED." (pp. 37-38, Rollo.)

On May 9, 1988, petitioner filed a motion for reconsideration, but did not wait for its resolution before filing on July 25, 1988 this petition for certiorari and mandamus (later amended to include the Commission on Audit as additional respondent), alleging that:chanrob1es virtual 1aw library

1. His courtesy resignation was not a complete and effective act of resignation;

2. His courtesy resignation was not accepted by competent authority;

3. The appointment of Alvarez and the designation of Gonzales as his successors were not legal; and

4. He may be deemed to have continued in office because his termination and replacement were not effected within one year from February 25, 1986, the deadline fixed in Article III, Section 2 of the Provisional Constitution.

The petition is without merit.

There is no doubt that the petitioner’s resignation as Assistant Secretary for Comptrollership and Financial Management of the DPWH, submitted in obedience to President Aquino’s Proclamation No. 1, was involuntary, and a derogation of his right to security of tenure under Section 3, Article XII of the 1973 Constitution which provided that "No officer or employee in the Civil Service shall be suspended or dismissed except for cause as provided by law."cralaw virtua1aw library

However, as that protective mantle of the 1973 Constitution was removed upon the partial dismantling of the said Constitution and its replacement by the revolutionary or provisional Constitution of March 25, 1986, Section 2, Article III of which provided that "all elective and appointive officials and employees under the 1973 Constitution (whose courtesy resignations had not yet been submitted and/or accepted) shall continue in office until otherwise provided by proclamation or executive order or upon the designation or appointment and qualification of their successors, if such is made within a period of one year from February 25, 1986," the petitioner’s tenure was effectively terminated when:chanrob1es virtual 1aw library

1. His successor, Alvarez, was designated on May 22, 1986 by Secretary Mercado; formally appointed on July 23, 1986 by Executive Secretary Joker P. Arroyo "by authority of the President;" and reappointed by the President herself on July 21, 1987;

2. His courtesy resignation was accepted by Secretary Mercado on August 4, 1986; and

3. He applied for, and received, retirement and other benefits under Republic Act No. 1616 (p. 166, Rollo) as provided in Section 3, Article III of the Provisional Constitution. His application for retirement benefits validated his otherwise vitiated consent to his resignation. He could not thereafter reclaim the position from which he had resigned. He could not eat his cake and have it too.

There is no merit in the petitioner’s argument that his courtesy resignation was not accepted by competent authority because the acceptance was done by Secretary Mercado, not by the appointing authority, the President. The Department secretaries are representatives of the President and their official acts are presumptively the acts of the Chief Executive unless disapproved or reprobated by the latter (Villena v. Sec. of Interior, 67 Phil. 463; Roque v. Dir. of Lands, 72 SCRA 1; Angangco v. Castillo, 9 SCRA 619; Noblejas v. Salas, 67 SCRA 47; Federation of Free Workers & Allied Sugar Centrals Employees and Workers Union — FFW v. Hon. Amado Inciong, Et Al., G.R. No. L-48848, May 11, 1988). Hence, Minister Mercado’s acceptance of the petitioner’s courtesy resignation is deemed to be the act of the President.

Petitioner’s contention that he was illegally terminated because his replacement by Alvarez came after the lapse of "one year from February 25, 1986" is not correct. His tenure ended on August 4, 1986, upon Minister Mercado’s acceptance of his courtesy resignation, not upon the appointment of his successor. In any event, his replacement came before February 25, 1987 by the appointment of Alvarez on July 23, 1986 by the President through her Executive Secretary. Alvarez’ appointment was ratified by President Aquino on July 21, 1987 (Annex 2, Comment).chanrobles virtual lawlibrary

Seizing upon the public respondent’s argument that he could be removed from his position as Assistant Secretary for Comptrollership and Financial Management Services at any time because his appointment to that office was in an acting capacity only (Abano v. Guipo, 15 SCRA 604), the petitioner, in his amended petition, pleads for reversion to his former permanent position as Assistant Regional Director of the COA. That plea is untenable because by applying for and receiving the retirement benefits due him under Republic Act No. 1616, he may be deemed to have irrevocably resigned from the government service. Moreover, there is no showing that his former job in the COA is in fact vacant.

WHEREFORE, the petition for certiorari is denied for lack of merit, with costs against petitioner.

SO ORDERED.

Fernan (C.J.), Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin, Sarmiento, Cortes, Medialdea and Regalado, JJ., concur.

A.M. No. RTJ-87-141 July 12, 1989 - ASSOCIATION OF COURT EMPLOYEES OF PANABO, DAVAO v. MARIANO C. TUPAS

2012-11-11T16:53:05+00:00

EN BANC

[A.M. No. RTJ-87-141. July 12, 1989.]

ASSOCIATION OF COURT EMPLOYEES OF PANABO, DAVAO, Complainant, v. MARIANO C. TUPAS, Presiding Judge, Regional Trial Court, Branch 4, Panabo, Davao, Respondent.

SYLLABUS

1. JUDICIAL ETHICS; JUDGES; MUST BE BEYOND REPROACH AND SUSPICION, FREE FROM ANY APPEARANCE OF IMPROPRIETY IN THEIR PERSONAL BEHAVIOR. — This Court has, time and again, reminded members of the Judiciary to so conduct themselves as to be beyond reproach and suspicion, and be free from any appearance of impropriety in their personal behaviour, not only in the discharge of their official duties but also in their everyday life, for as we have earlier stressed, "no position exacts a greater demand on moral righteousness and uprightness of an individual than a seat in the Judiciary" so that" (a) magistrate of the law must comport himself at all times in such a manner that his conduct, official or otherwise, can bear the most searching scrutiny of the public that looks up to him as the epitome of integrity and justice."

R E S O L U T I O N

PER CURIAM:

In a sworn "Charge Sheet" dated November 23, 1987 and filed with the Court on December 1, 1987, which was signed by nine (9) employees of the Regional Trial Court, Branch 4, in Panabo, Davao, in the name of the Association of Court Employees of Panabo, of which they professed to be members, said Association accused the presiding judge of said court, Mariano C. Tupas, of corruption and dishonesty (10 counts), oppression and abusive and immoral conduct unbecoming a judge (2 counts), and sought an investigation and hearing of the charges and imposition of the appropriate penalty. 1

The Court acted on the charges by issuing a Resolution on December 10, 1987 placing the respondent Judge under preventive suspension and directing him to answer the charges within ten (10) days. 2 On December 21, 1987, the respondent filed a 12-page verified answer with nineteen (19) annexes 3 and, simultaneously, a motion to lift his suspension and to detail him to another RTC sala. 4 The Court Administrator favorably endorsed the motion and on January 12, 1988, the Court issued a Resolution 5 lifting the respondent’s suspension effective immediately, detailing the latter to Branch 19, Regional Trial Court, Digos, Davao del Sur, and referring the complaint to Associate Justice Hector C. Fule of the Court of Appeals for investigation, report and recommendation.

Upon receipt of the record of the case, Justice Fule scheduled daily hearings for two successive weeks: March 7-11, 1988 and March 14-18, 1988, in his chambers in Manila for reception of the evidence of the parties, the case thereafter to be deemed submitted for resolution. 6 He subsequently denied a motion of the complainant association to conduct the investigation in Davao. 7

The complainant, however, took its plea for a change of venue to this Court, 8 which granted the same, set aside that portion of its earlier Resolution referring the complaint to Justice Fule for investigation and instead directed Deputy Court Administrator Juanito C. Ranjo to conduct and terminate said investigation in Davao City in the chambers of the Executive Judge of that City, from April 11 to 15, 1988, and to submit his report and recommendation within thirty days. 9

In carrying out the Court’s directive, Deputy Court Administrator Ranjo received the testimony of twenty-five (25) witnesses, eleven (11) for the complainant and fourteen (14) for the respondent, in Davao City, during the period April 11-16, 1988. He also admitted thirteen (13) exhibits, some with integral markings, for the complainant and fifty-nine (59) exhibits, also with integral markings, for the Respondent. Memorandums were thereafter submitted, and on August 8, 1988, the Investigator submitted a 42-page report and recommendation dated August 1, 1988.

The Investigator’s report groups the specific charges against the respondent under four (4) general headings, as follows:jgc:chanrobles.com.ph

"I. Corruption and dishonesty for (1) using the cash collections of the Court; (2) collecting P150.00 as fee for solemnizing marriage; (3) incurring obligations without any intention of paying them; (4) ordering police officers to cut narra, knowing the same to be prohibited, and without paying for the same; (5) receiving one truckload of ramie roots which are the subject matter of Civil Case No. 86-36, entitled ‘Margarito Hadia v. Santos Barbarona’; (6) directing Station Commander P/Capt. Celestino Donayre, Jr., P/Cpl. Ruperto Cagape and P/Cpl. Rafael B. Dolon to order lumber from lumberyards without paying for it, thus forcing said police officers to pay the same out of their own pockets; (7) always asking gasoline from the municipal mayor who had to give cash from his own pocket; (8) convincing the defendant in Civil Case No. 87-29 entitled ‘Rebecca Longa v. Leonardo Longo,’ to discharge his lawyer Atty. Samuel Oscena, so he could arrange (fix) the case for a fee; (9) exacting money from litigants and employees; and (10) requiring the Deputy Sheriff to give him P100.00 to P300.00 for every foreclosure, attachment or execution the sheriff conducted.

"II. Oppression, Abusive and Immoral Conduct for: (1) interfering with the court stenographers for the payment of transcript of stenographic notes; (2) making immoral advances on female employees; (3) ordering lawyers to file charges against his own employees; and (4) actively participating in the settlement of cases and sharing in the money settlement.

"III. Inefficiency for: (1) not reporting on Mondays, holding sessions at 9:30 A.M., and leaving the Court at 2:00 P.M., and issuing Certificates of Service showing that he is reporting on Mondays as prescribed by law; and (2) not disposing of cases within the prescribed 90-day period.

"IV. Conduct unbecoming a Judge for: (1) selling raffle tickets of the Knights of Rizal of which he is a ranking officer; and (2) openly drinking in the company of friends at public places." 10

The Court has carefully considered the Investigator’s Report in the light of the testimonial and documentary evidence presented. Said document not only comprehensively summarizes the evidence for both sides; it also exhaustively analyzes the same and details the reasons for the Investigator’s assessment of its weight and credibility. There appears no reason for faulting that notable effort in any particular and, indeed, every reason to uphold it as correct and in accordance with the proffered proof in every substantive aspect.

Accordingly, the Court hereby adopts the findings set out in the Report of the Investigator, and approves the recommendations made therein for the dismissal, for insufficiency of evidence and/or want of merit, of all the charges alleged in the complaint except those of (a) receiving gasoline, or money with which to purchase it, from parties directly or indirectly interested in cases pending in his (respondent’s) court, and (b) accepting from Leo Caballero, OIC Branch Clerk of Court of respondent’s former sala, the amount of P1,000.00 to help defray his expenses in travelling to the Supreme Court, Manila, to requisition supplies, accountable forms and books while the recommendation of said Mr. Caballero to the position of Legal Researcher was being considered by him (respondent), which acts were either admitted by said respondent or sufficiently established by the evidence.

This Court has, time and again, reminded members of the Judiciary to so conduct themselves as to be beyond reproach and suspicion, and be free from any appearance of impropriety in their personal behaviour, not only in the discharge of their official duties but also in their everyday life, for as we have earlier stressed, "no position exacts a greater demand on moral righteousness and uprightness of an individual than a seat in the Judiciary" so that" (a) magistrate of the law must comport himself at all times in such a manner that his conduct, official or otherwise, can bear the most searching scrutiny of the public that looks up to him as the epitome of integrity and justice." 11

The aforestated proven or admitted actuations of respondent constitute serious misconduct meriting commensurate administrative sanction.

WHEREFORE, Judge Mariano C. Tupas is held guilty of grave misconduct. He is hereby SUSPENDED from office for six (6) months without pay effective immediately, and sternly warned that commission of other acts of misconduct will warrant more severe sanctions from the Court.

SO ORDERED.

Fernan (C.J.), Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin, Sarmiento, Cortes, Griño-Aquino, Medialdea and Regalado, JJ., concur.

Endnotes:

1. Record, pp. 1-4.

2. Id., p 7.

3. Id., pp. 9-41.

4. Id., pp. 42-44.

5. Id., pp. 96-97.

6. Id., p. 99.

7. Id., pp. 100, 102.

8. Id., (Vol. II), pp. 2-4.

9. Id., (Vol. II), pp. 25-26.

10. Report and Recommendation, pp. 1-2.

11. Dia-Anonuevo v. Bercacio, 68 SCRA 81; See also Quiz v. Castaño, 107 SCRA 196; Fonacier Abano v. Ancheta, 107 SCRA 538; Cabrera v. Pajares, 142 SCRA 127.

G.R. No. 47258 July 13, 1989 - ANTONIO R. BANZON, ET AL. v. COURT OF APPEALS, ET AL.

2012-11-11T16:53:05+00:00

THIRD DIVISION

[G.R. No. 47258. July 13, 1989.]

ANTONIO R. BANZON and ROSA BALMACEDA, Petitioners, v. COURT OF APPEALS, MAXIMO R. STA. MARIA and VALERIANA R. STA. MARIA, Respondents.

Bausa, Ampil & Suarez, for Petitioners.

Rosendo Tansinsin for Respondents.

SYLLABUS

1. CIVIL LAW; SPECIAL CONTRACTS; GUARANTY; GENERALLY, GUARANTOR MUST FIRST PAY OUTSTANDING AMOUNTS DUE BEFORE IT CAN EXACT PAYMENT FROM PRINCIPAL DEBTOR. — What appears to us as error is the trial court’s conclusion that private respondents are responsible for the prejudice caused petitioners. This conclusion is in opposition to our clear and unequivocal pronouncement in Banzon v. Cruz case that the wrongful taking of petitioners’ two lots was the direct result of three premature acts, to wit: 1) the action of Associated Insurance and Surety, Inc. against petitioner Banzon; 2) the execution of the 1957 judgment in Civil Case No. 31237; 3) the act of the Sheriff of Caloocan City in demolishing the improvements on one of the lots. These acts do not fall under any of the situations provided for in Article 2071 of the Civil Code wherein the guarantor even before paying may proceed against the principal debtors. Otherwise stated, as a general rule, the guarantor must first pay the outstanding amounts due before it can exact payment from the principal debtor. Hence, since Associated had not paid nor compelled private respondent to pay the bank, it had no right in law or equity to so execute the judgment against Banzon as indemnitor.

2. ID.; DAMAGES; MORAL DAMAGES; MAY BE RECOVERED IF THEY ARE PROXIMATE RESULT OF DEFENDANT’S WRONGFUL ACT OR OMISSION. — It is a settled principle that moral damages may be recovered if they are the proximate result of the defendant’s wrongful act or omission.

3. ID.; ID.; ACTUAL DAMAGES; LIABILITY IS FOR THE NATURAL AND PROBABLE CONSEQUENCES OF THE ACT OR OMISSION COMPLAINED OF. — Under the Civil Code, the damages for which a defendant may be held liable are those which are the natural and probable consequences of the act or omission complained of. As above explained, the prejudice caused petitioners cannot be said to be the natural and probable consequence of private respondents’ mere failure to pay their crop loans as such prejudice arose due to active supervening forces or events.

D E C I S I O N

FERNAN, J.:

In this petition for review on certiorari, We affirm the decision of the Court of Appeals 1 dated July 16, 1976 in CA-G.R. No. 54075-R, entitled "Antonio Banzon, Et Al., Plaintiffs-Appellees, versus Maximo R. Sta. Maria, Et Al., Defendants-Appellants" absolving herein private respondents Maximo R. Sta. Maria and Valeriana R. Sta. Maria from any liability arising from petitioners’ complaint.

The antecedents are accurately narrated in the decision of the trial court 2 as follows:jgc:chanrobles.com.ph

"Sometime in the year 1952, defendant Maximo R. Sta. Maria, obtained several crop loans from PNB. For these loans, Associated acted as surety for defendant Maximo R. Sta. Maria by filing surety bonds in favor of PNB to guarantee and answer for the prompt and faithful repayment of said loans. In turn, plaintiff Antonio R. Banzon and one Emilio R. Naval acted as indemnitors of Associated in the indemnity agreements, obligating themselves to indemnify and hold it harmless from any liabilities.

"It further appears, however, that defendant Maximo R. Sta. Maria failed to pay his crop loan obligations in favor of PNB when the same fell due, and accordingly, the bank demanded payment thereof from Associated as surety. Instead of paying the bank, Associated filed a complaint dated November 19, 1956 in the Court of First Instance of Manila against Maximo R. Sta. Maria and indemnitors Banzon and Naval, claiming that the outstanding obligation of defendant Maximo R. Sta. Maria with PNB, as guaranteed by it, amounted to P6,100.00, P9,346.44 and P14,807.52, or an aggregate total of P30,257.86 exclusive of interests. The case was docketed as Civil Case No. 31237 of the said court. On December 11, 1957, a judgment was rendered by said Court sentencing the aforesaid defendants therein to pay jointly and severally unto plaintiff for the benefit of the Philippine National Bank the amounts mentioned above, with interests thereon at 12% per annum, P593.76 for premiums and documentary stamps due and 15% attorney’s fees — the 15% and the interest to be paid for the benefit only of the plaintiff. (Exhibit "C" and Exhibit "2")

"The abovementioned decision in Civil Case No. 31237 became final and executory, and thus, the corresponding writ of execution was issued and the properties of plaintiff Antonio R. Banzon covered by TCT Nos. 39685 and 53759 Registry of Deeds of Rizal, now Caloocan City, were levied and later on sold in execution, with Associated, the judgment creditor, as the highest bidder for the total sum of P44,000.00. On June 27, 1957, the corresponding certificate of sale was issued and the same was duly registered on June 30, 1959. The redemption period having expired, the judgment creditor, the Associated, obtained in due time the final certificate of sale which was likewise duly registered. Demands were made upon plaintiff Antonio R. Banzon to deliver to Associated the owner’s duplicates of TCT Nos. 39685 and 53759 but the latter failed to do so. Consequently, Associated filed against Banzon in the Court of First Instance of Rizal in Case No. 3885 G.L.R.O. Rec. No. 11267, a petition for an order directing Banzon to produce and surrender his owner’s duplicates of TCT Nos. 39685 and 53759 to the Register of Deeds of Rizal, for cancellation, and for the latter to subsequently issue new titles in the name of Associated. This petition was vigorously opposed by Banzon based on legal grounds. The Court, in Case No. 3885, issued an order granting the relief prayed for, directing Banzon to surrender the owner’s duplicates of TCT Nos. 39685 and 53759. Banzon appealed (G.R. No. L-23971, 26 SCRA 268) and sought reversal of said order, but the Supreme Court in its decision of November 29, 1968 affirmed the lower court’s decision.

"The record shows that sometime in 1965, even before ownership over the aforementioned two (2) parcels of land belonging to the Banzons could be consolidated in the name of Associated, the spouses Pedro Cardenas and Leonila Baluyot were able to execute upon and buy one of the said two parcels of land (that covered by TCT No. 39685-Rizal, Lot 6, Block 176 of subdivision plan Psd-2896, G.L.R.O. Rec. No. 11267) to satisfy a judgment debt of Associated in favor of the Cardenas spouses. Parenthetically, that judgment was in favor of the Cardenas spouses as judgment creditors-plaintiffs against Victoria Vda. de Tengco and Pablo Tuazon, judgment-debtors-defendants in Civil Case No. 36194, CFI of Manila and Associated issued a counter-bond in behalf of said defendants to cover Cardenas’ judgment.

"Cardenas, being the lone bidder in the auction sale for execution of his judgment for P5,100.00 against Associated, was awarded the property in full satisfaction of his judgment, and eventually succeeded in cancelling Banzon’s title and in having a new one (TCT No. 8567-Caloocan City) issued in his name. The Cardenas spouses in due time filed with the Court of First Instance of Rizal, Caloocan City, Branch XII, Reg. Case No. C-211, (LRC Case No. 11267) entitled ‘Pedro Cardenas Et. Al., petitioner v. Antonio Banzon, Et Al., Respondents, for the purpose of securing possession from the Banzons of the lot covered by TCT No. 8567. Accordingly, a writ of possession was issued in said case on May 21, 1965, but its enforcement was suspended in view of the filing with the same court of Civil Case No. C-531 entitled ‘Antonio Banzon, Et Al., v. Pedro Cardenas and Leonila Baluyot, Associated Insurance and Surety Co., Inc. and Benito Macrohon’. However, in Civil Case No. 531, the court dismissed Banzons’ complaint on August 6, 1969, and upheld the validity and legality of the transfer of the property in question to the Cardenas spouses. As a result, Cardenas filed on October 13, 1969, a motion in Case No. C-211 for the issuance of an alias writ of possession which was granted on October 23, 1969. The Banzons, however refused to vacate the premises and to remove the improvements thereon. Because of this, an order was issued on December 9, 1969 for the issuance of a writ of demolition, but its enforcement was not carried out for the reason that a temporary restraining order, later changed to a writ of preliminary injunction, was issued by the Court of Appeals on December 13, 1969 in CA-G.R. No. 44391-R ‘Antonio Banzon and Rosa Balmaceda, petitioners v. Hon. Fernando Cruz and spouses Pedro Cardenas and Leonila Baluyot, respondents’, in view of the filing by the Banzons with the said appellate court of a petition for injunction.

On February 28, 1970, the Court of Appeals dismissed the petition filed in CA-G.R. No. 44391-R. Cardenas thereafter filed a motion for the enforcement of the order of demolition and writ of possession previously issued in Reg. Case No. C-211. On March 13, 1970, Judge Fernando A. Cruz, of the CFI of Rizal, Caloocan City, Branch XII issued an order granting the aforesaid motion. On March 16, 1970, the Sheriff of Caloocan City gave the Banzons until March 20, 1970 to vacate and deliver possession of the parcel of land covered by TCT No. 8567, and to remove the improvements thereon. The Banzons elevated the matter to the Supreme Court on March 20, 1970 by way of a petition for injunction (G.R. No. L-31789, 45 SCRA 475). The Supreme Court, on March 24, 1970, restrained respondents (Hon. Fernando Cruz, Cardenas spouses and Associated) and their representatives from enforcing the writ of possession and order of demolition and respondent Associated from disposing of its rights and interests over the two lots in question. Cardenas spouses in due time filed their answer, alleging among other things, that ownership of Lot 6, Block 176, covered by TCT No. 8567 had already absolutely and irrevocably vested in them and that there was no longer anything to be restrained considering that per Sheriff’s return on March 23, 1970, he had enforced on said date the writ of possession and order of demolition, and had demolished all the improvements erected on the premises. It appears that, in reality, a special deputy sheriff of Rizal succeeded in demolishing Banzon’s building erected on the lot in question notwithstanding the fact that said Sheriff was duly informed by Banzon of the existence of a restraining order. After accomplishing the demolition work, the Sheriff and his men left the premises.

"In the final analysis, the Supreme Court, in G.R. No. L-31789, June 29, 1972, decided as follows:chanrob1es virtual 1aw library

‘WHEREFORE, the petition for a permanent injunction, during the pendency of Civil Case No. 79244 of the Court of First Instance of Manila against the disposition in any manner of the two parcels of land subject of said case other than their reconveyance to petitioners as the true and rightful owners thereof as expressly recognized by the insurance commissioner as liquidator of Associated is hereby granted. In lieu of the permanent injunction against enforcement of respondent court’s order dated March 13, 1970 in Case No. C-211 thereof ordering the delivery of possession of the property covered by TCT No. 8567 to respondents Cardenas and demolition of petitioners Banzons’ improvements thereon (which were prematurely carried out by respondent court’s sheriff on March 23, 1970) a writ of mandatory injunction commanding respondent court to forthwith restore the status ante quo and the property and enjoyment of the fruits and rentals thereof under the terms and conditions stated in the next preceding paragraph is hereby issued, which shall be immediately executory upon promulgation of this decision. With costs against respondents Pedro Cardenas and Leonila Baluyot.

‘This decision is without prejudice to such civil and criminal liability as the officers of the defunct Associated Insurance & Surety Co., Inc., may have incurred by virtue of their acts of commission and omission which have resulted in grave prejudice and damage to petitioners as well as the public interests, as in the suppression from and non-surrender to the Insurance Commissioner as liquidator of the records of the relevant antecedent cases, and in the possible misrepresentation to the courts therein that Associated had duly discharged to the bank its liability as surety and could therefore lawfully levy on the properties of Banzon as indemnitor, which would have resulted in respondents’ unjust enrichment at Banzon’s expense. The Insurance Commissioner is directed to conduct the corresponding investigation for the purpose of filing such criminal and other appropriate actions as may be warranted against the responsible parties. So Ordered.’ (45 SCRA 507-508)" 3

This is the fourth time that this case has reached the Supreme Court. The first was in G.R. No. L-23971 — Associated Insurance & Surety Co., Inc. v. Banzon; 4 the second in G.R. No. L-24765 — PNB v. Sta. Maria Et. Al.; 5 and the third in G.R. No. L-31789 — Banzon v. Cruz. 6

The facts therefore, have been well established and the resolutions of issues raised have reached finality.

Among others, it has been finally settled in Banzon v. Cruz, supra, that Associated in proceeding against the indemnitor Banzon before proceeding against the principal debtor acted prematurely and it is now holding in trust by force of Article 1456 of the Civil Code, the two lots of Banzon it has wrongfully levied upon in execution and which it is legally bound to return to Banzon, their true and rightful owner.

At any rate, on March 4, 1971, pending resolution of G.R. No. L-31789, petitioners spouses Antonio Banzon and Rosa Balmaceda filed before the then Court of First Instance of Rizal, Caloocan City, a complaint 7 against therein private respondents Maximo and Valeriana Sta. Maria for actual and moral damages in the total amount of P251,750.00 allegedly arising from the deprivation of their property due to the Sta. Marias’ failure and refusal to pay their plain, valid and just obligations with the PNB.

In due course, judgment was rendered by the trial court on July 14, 1973, the dispositive portion of which reads as follows:jgc:chanrobles.com.ph

"FOR ALL THE FOREGOING CONSIDERATIONS, judgment is hereby rendered in favor of the plaintiffs and against the defendants MAXIMO R. STA. MARIA AND VALERIANA R. STA. MARIA, ordering them to pay jointly and severally to plaintiffs the following amounts:chanrob1es virtual 1aw library

(1) P6,750.00 as actual and compensatory damages which the plaintiffs are obligated to Atty. Feliberto V. Castillo by way of attorney’s fees;

(2) P10,000.00 as actual damages by way of reimbursement of attorney’s fees paid by plaintiffs to Atty. Arsenio O. de Leon;(3) P150,000.00 corresponding to the fair value of the lot evidenced by TCT No. 8567-Caloocan City acquired by the Cardenas spouses if in the meantime, it has passed into the hands of an innocent purchaser for value and recovery thereof by plaintiffs become impossible;

(4) P10,000.00 as actual damages representing the fair value of the house of the plaintiffs which was demolished from their lot located at Caloocan City evidenced by TCT No. 39685 (now TCT No. 8567), plus the unrealized income thereon at the rate of P200.00 per month from April, 1970 until fully paid;

(5) P50,000.00 as and by way of moral damages; and

(6) P15,000.00 as attorney’s fees incident to the handling of this case, plus costs of the action.

SO ORDERED." 8

On appeal, however, by herein private respondents, the Court of Appeals reversed the trial court’s decision, thus:jgc:chanrobles.com.ph

"WHEREFORE, in view of the foregoing, this Court hereby reverses and sets aside the appealed decision of the court a quo, and renders this judgment absolving the defendants-appellants from any liability arising from plaintiffs-appellees’ Complaint.

"No pronouncement as to costs.

"SO ORDERED." 9

Both parties moved for a reconsideration, but were denied the relief sought. Consequently, the spouses Banzon filed the instant petition for review on certiorari, raising as issues the following:chanrob1es virtual 1aw library

1. Whether or not respondent court committed error in sustaining the affirmative/special defense of respondent Valeriana R. Sta. Maria to the effect that the complaint states no cause of action; and in ruling that the cause of action is barred by prior judgment and/or estoppel and laches;

2. Whether or not respondent court erred in basing its decision solely on the judgment of the Supreme Court in an earlier case, Banzon v. Cruz, G.R. No. L-31789 promulgated on June 29, 1972. 10

The main issue in this case is whether or not respondent Maximo and Valeriana Sta. Maria are liable to the petitioners for the prejudice and damages the latter suffered in this case.

Petitioners contend that the appellate court erred in disposing of the case on the basis alone of the decision of this Court in Banzon v. Cruz, G.R. No. L-31789, June 29, 1972 (45 SCRA 475) when the evidence on record and the law show that there are valid causes of action against private respondents as the latter are "guilty of bad faith and with a common plan or design to place Antonio R. Banzon in a bad predicament." They stress that had the private respondents been candid and truthful and not try to avoid their just and valid obligations to the PNB when they had sufficient properties to answer therefor, the Banzons’ properties would not have been levied upon and sold in execution. 11

As earlier indicated, we affirm.

No error was committed by the appellate court in basing its decision upon this Court’s findings in Banzon v. Cruz supra. Said decision was offered as evidence by both parties; as Exhibit "P" for petitioners as plaintiffs therein 12 and as Exhibit "16" for private respondents as defendants. 13 In fact, the decision under consideration was utilized by the lower court in arriving at its findings of facts, thus:jgc:chanrobles.com.ph

"From the mass of evidence adduced by the parties, and after taking into consideration the pleadings respectively submitted by their counsels as well as the pertinent Supreme Court decisions reported in 26 SCRA 268, 29 SCRA 303, and 45 SCRA 475, the following facts stand out clear in the records of the case." 14

What appears to us as error is the trial court’s conclusion that private respondents are responsible for the prejudice caused petitioners. This conclusion is in opposition to our clear and unequivocal pronouncement in said Banzon v. Cruz case that the wrongful taking of petitioners’ two lots was the direct result of three premature acts, to wit: 1) the action of Associated Insurance and Surety, Inc. against petitioner Banzon; 2) the execution of the 1957 judgment in Civil Case No. 31237; 3) the act of the Sheriff of Caloocan City in demolishing the improvements on one of the lots. These acts do not fall under any of the situations provided for in Article 2071 of the Civil Code wherein the guarantor even before paying may proceed against the principal debtors. Otherwise stated, as a general rule, the guarantor must first pay the outstanding amounts due before it can exact payment from the principal debtor. Hence, since Associated had not paid nor compelled private respondent to pay the bank, it had no right in law or equity to so execute the judgment against Banzon as indemnitor. Coming back to the issue, the appellate court exhibited a higher degree of perception when it held:jgc:chanrobles.com.ph

"In the first place, it was well established that it was not the defendants who started the series of litigations but the Associated. Instead of fulfilling its obligations to discharge, as a surety, the Sta. Marias’ indebtedness, Associated instituted the premature court action against its indemnitors, including Sta. Maria. This premature action of the Associated consequently resulted in the levy and sale of the two lots thereby depriving plaintiffs of their property." 15

On the other hand, it is a settled principle that moral damages may be recovered if they are the proximate result of the defendant’s wrongful act or omission. 16

While ideally this debacle could have been avoided by private respondents’ payment of their obligations to PNB, such fact of non-payment alone, without Associated’s premature action and subsequent fraudulent acts, could not possibly have resulted in the prejudice and damage complained of. Thus, while private respondents’ non-payment was admittedly the remote cause or the factor which set in motion the ensuing events, Associated’s premature action and execution were the immediate and direct causes of the damage and prejudice suffered by petitioners. In other words, active supervening events, consisting of said premature and fraudulent acts of the Associated Insurance and Surety, Inc. had broken the causal connection between the fact of non-payment and the damage suffered by petitioners, so that their claim should be directed not against private respondents but against Associated. Parenthetically, this right of action against Associated had been reserved in petitioners’ favor in the Banzon v. Cruz case.

We are convinced that the failure of private respondents to pay their obligations with the PNB was not attended by bad faith or wilfull intent to cause injury to petitioners. For as found in Banzon v. Cruz, supra:jgc:chanrobles.com.ph

". . . It should be noted therefore, that the debtor Sta. Maria had been making payments all along to the bank on account of his crop loans so much so that by 1963, the total principal due and amount outstanding thereon amounted only to P15,446.44. This amounts to practically one-half of the advance judgment for the total amount of P30,257.86, excluding interests, obtained by Associated six (6) years earlier in 1957 against Banzon ‘for the benefit of the Philippine National Bank’ allegedly as the amount due from Sta. Maria and which Associated as surety would have to pay the bank, and which as it turns out, Associated never paid to the bank." 17

Consequently, Associated, in not discharging its liability notwithstanding that it had already executed its 1957 judgment against Banzon as indemnitor and taken in execution Banzon’s two properties committed rank fraud.

Moreover, under the Civil Code, the damages for which a defendant may be held liable are those which are the natural and probable consequences of the act or omission complained of. 18 As above explained, the prejudice caused petitioners cannot be said to be the natural and probable consequence of private respondents’ mere failure to pay their crop loans as such prejudice arose due to active supervening forces or events.

There is no denying that the damage and prejudice suffered by petitioners is too high a price to pay for an act of benevolence. By now, however, they should have obtained adequate relief in accordance with our ruling in Banzon v. Cruz, supra, the pertinent portion of which bears reiterating:jgc:chanrobles.com.ph

"In the case at bar, with the insurance commissioner as liquidator of Associated, recognizing through the Solicitor General that the Banzons’ two lots wrongfully taken from them by Associated’s premature actions should be reconveyed to them, there is established a clear and indubitable showing on the record that the petitioners are entitled to a writ of restoring the status quo ante. A mandatory writ shall therefore issue commanding respondent court to forthwith restore petitioners to their possession of Lot 6, Block 176, covered by TCT 8567 from which they have been removed by enforcement of said respondent court’s enjoined order of demolition and writ of possession dated March 13, 1970, Annex "F" of the petition. As to petitioners’ building thereon claimed to be worth P10,000.00 (but countered by Cardenas to be a mere ‘barong-barong’), respondent court shall at Banzon’s petition cause respondents Cardenases to restore the demolished building or pay Banzon the determined value thereof. As to the fruits of possession of the land, with Cardenas acknowledging that he has been leasing the same to a third person at P200.00 a month, respondents Cardenases shall forthwith pay to petitioners Banzons the whole amount of rentals so received by them to the time that possession of the lot is effectively restored to petitioners. By the very nature of this mandatory writ, the same shall be immediately executory upon promulgation of this decision." 19

WHEREFORE, the instant petition for review is hereby DENIED. No pronouncement as to costs.

SO ORDERED.

Gutierrez, Jr., Bidin and Cortes, JJ., concur.

Feliciano, J., on leave.

Endnotes:

1. Penned by Associate Justice Mariano V. Agcaoili and concurred in by Associate Justices Lourdes P. San Diego and Ameurfina Melencio-Herrera.

2. Presided by Judge Alberto Q. Ubay.

3. pp. 128-136, Record on Appeal; p. 55, Rollo. Italics ours.

4. 26 SCRA 268-271 [1968].

5. 29 SCRA 303 [1969].

6. 45 SCRA 475 [1972].

7. Docketed as Civil Case No. C-2052.

8. pp. 145-146, Record on Appeal, p. 55, Rollo.

9. pp. 50-51, Rollo.

10. p. 24, Ibid.

11. pp. 25-26, Ibid.

12. p. 88, Record on Appeal, p. 55, Rollo.

13. p. 106, Ibid; Ibid.

14. pp. 127-128, Ibid; Ibid.

15. pp. 43-44, Rollo.

16. Danao v. C.A., 154 SCRA 448 [1987]; Filinvest Credit Corp. v. Mendez, 152 SCRA 593 [1987].

17. at p. 483; Emphasis in the original.

18. See Articles 2201 and 2202.

19. at pp. 506-507; Emphasis in the original.

G.R. No. 72764 July 13, 1989 - STATE INVESTMENT HOUSE v. INTERMEDIATE APPELLATE COURT, ET AL.

2012-11-11T16:53:05+00:00

THIRD DIVISION

[G.R. No. 72764. July 13, 1989.]

STATE INVESTMENT HOUSE, Petitioner, v. INTERMEDIATE APPELLATE COURT, ANITA PEÑA CHUA and HARRIS CHUA, Respondents.

Macalino, Salonga & Associates for Petitioner.

Edgardo F. Sundiam for Respondents.

SYLLABUS

1. COMMERCIAL LAW; NEGOTIABLE INSTRUMENT LAW; HOLDER IN DUE COURSE; REQUISITES THEREFOR, CITED. — Section 52(c) of the Negotiable Instruments Law defines a holder in due course as one who takes the instrument "in good faith and for value." On the other hand, Section 52(d) provides that in order that one may be a holder in due course, it is necessary that "at the time the instrument was negotiated to him he had no notice of any . . . defect in the title of the person negotiating it." However, under Section 59 every holder is deemed prima facie to be a holder in due course.

2. ID.; ID.; CHECKS CROSSED CHECK A CHECK WITH TWO PARALLEL LINES IN UPPER LEFT HAND CORNER MEANS THAT IT COULD ONLY BE DEPOSITED AND NOT CONVERTED IN CASH DUTY OF PAYEE. — The Negotiable Instruments Law regulating the issuance of negotiable checks as well as the rights and liabilities arising therefrom, does not mention "crossed checks." But this Court has taken cognizance of the practice that a check with two parallel lines in the upper left hand corner means that it could only be deposited and may not be converted into cash. Consequently, such circumstance should put the payee on inquiry and upon him devolves the duty to ascertain the holder’s title to the check or the nature of his possession. Failing in this respect, the payee is declared guilty of gross negligence amounting to legal absence of good faith and as such the consensus of authority is to the effect that the holder of the check is not a holder in good faith.

3. ID.; ID.; ID.; EFFECTS OF CROSSING A CHECK, CITED. — Relying on the ruling in Ocampo v. Gatchalian (supra), the Intermediate Appellate Court (now Court of Appeals), correctly elucidated that the effects of crossing a check are: the check may not be encashed but only deposited in the bank; the check may be negotiated only once — to one who has an account with a bank; and the act of crossing the check serves as a warning to the holder that the check has been issued for a definite purpose so that he must inquire if he has received the check pursuant to that purpose, otherwise he is not a holder in due course.

4. ID.; ID.; ID.; CROSSED CHECK; DONE BY PLACING TWO PARALLEL LINES DIAGONALLY ON LEFT TOP PORTION OF CHECK; KINDS OF, EXPLAINED. — Under usual practice, crossing a check is done by placing two parallel lines diagonally on the left top portion of the check. The crossing may be special wherein between the two parallel lines is written the name of a bank or a business institution, in which case the drawee should pay only with the intervention of that bank or company, or crossing may be general wherein between two parallel diagonal lines are written the words "and Co." or none at all as in the case at bar, in which case the drawee should not encash the same but merely accept the same for deposit.

5. ID.; ID.; ID.; EFFECT OF CROSSING A CHECK RELATES TO MODE OF ITS PRESENTMENT FOR PAYMENT. — The effect of crossing a check relates to the mode of its presentment for payment. Under Section 72 of the Negotiable Instruments Law, presentment for payment to be sufficient must be made (a) by the holder, or by some person authorized to receive payment on his behalf . . . As to who the holder or authorized person will be depends on the instructions stated on the face of the check.

6. ID.; ID.; ID.; PRESENTMENT; IN THE ABSENCE OF DUE PRESENTMENT, DRAWER NOT LIABLE; CASE AT BAR. — The three subject checks in the case at bar had been crossed generally and issued payable to New Sikatuna Wood Industries, Inc. which could only mean that the drawer had intended the same for deposit only by the rightful person, i.e., the payee named therein. Apparently, it was not the payee who presented the same for payment and therefore, there was no proper presentment, and the liability did not attach to the drawer. Thus, in the absence of due presentment, the drawer did not become liable. Consequently, no right of recourse is available to petitioner against the drawer of the subject checks, private respondent wife, considering that petitioner is not the proper party authorized to make presentment of the checks in question.

7. ID.; ID.; HOLDER IN DUE COURSE; HOLDER WHO IS NOT A HOLDER IN DUE COURSE MAY RECOVER ON THE INSTRUMENT; DISADVANTAGE OF A HOLDER WHO IS NOT IN DUE COURSE, CITED; CASE AT BAR. — Yet it does not follow as a legal proposition that simply because petitioner was not a holder in due course as found by the appellate court for having taken the instruments in question with notice that the same is for deposit only to the account of payee named in the subject checks, petitioner could not recover on the checks. The Negotiable Instruments Law does not provide that a holder who is not a holder in due course may not in any case recover on the instrument for in the case at bar, petitioner may recover from the New Sikatuna Wood Industries, Inc. if the latter has no valid excuse for refusing payment. The only disadvantage of a holder who is not in due course is that the negotiable instrument is subject to defenses as if it were non-negotiable.

8. ID.; ID.; ID.; NON-COMPLIANCE WITH THE CONDITION THAT PRIVATE RESPONDENTS ON DUE DATE WOULD MAKE BACK-UP DEPOSIT FOR ISSUED SUBJECT CHECKS, A GOOD DEFENSE AGAINST PETITIONER WHO IS NOT A HOLDER IN DUE COURSE. — That the subject checks had been issued subject to the condition that private respondents on due date would make the back up deposit for said checks but which condition apparently was not made, thus resulting in the non-consummation of the loan intended to be granted by private respondents to New Sikatuna Wood Industries, Inc., constitutes a good defense against petitioner who is not a holder in due course.

D E C I S I O N

FERNAN, J.:

Petitioner State Investment House seeks a review of the decision of respondent Intermediate Appellate Court (now Court of Appeals) in AC-G.R. CV No. 04523 reversing the decision of the Regional Trial Court of Manila, Branch XXXVII dated April 30, 1984 and dismissing the complaint for collection filed by petitioner against private respondents Spouses Anita Peña Chua and Harris Chua.

It appears that shortly before September 5, 1980, New Sikatuna Wood Industries, Inc. requested for a loan from private respondent Harris Chua. The latter agreed to grant the same subject to the condition that the former should wait until December 1980 when he would have the money. In view of this agreement, private respondent-wife, Anita Peña Chua issued three (3) crossed checks payable to New Sikatuna Wood Industries, Inc. all postdated December 22, 1980 as follows:chanrob1es virtual 1aw library

DRAWEE BANK CHECK NO. DATE AMOUNT

1. China Banking

Corporation 589053 Dec. 22, 1980 P98,750.00

2. International

Corporate Bank 04045549 Dec. 22, 1980 102,313.00

3. Metropolitan

Bank & Trust Co. 036512 Dec. 22, 1980 98,387.00

The total value of the three (3) postdated checks amounted to P299,450.00.

Subsequently, New Sikatuna Wood Industries, Inc. entered into an agreement with herein petitioner State Investment House, Inc. whereby for and in consideration of the sum of P1,047,402.91 under a deed of sale, the former assigned and discounted with petitioner eleven (11) postdated checks including the aforementioned three (3) postdated checks issued by herein private respondent-wife Anita Peña Chua to New Sikatuna Wood Industries, Inc.

When the three checks issued by private respondent Anita Peña Chua were allegedly deposited by petitioner, these checks were dishonored by reason of "insufficient funds", "stop payment" and "account closed", respectively. Petitioner claims that despite demands on private respondent Anita Peña to make good said checks, the latter failed to pay the same necessitating the former to file an action for collection against the latter and her husband Harris Chua before the Regional Trial Court of Manila, Branch XXXVII docketed as Civil Case No. 82-10547.

Private respondents-defendants filed a third party complaint against New Sikatuna Wood Industries, Inc. for reimbursement and indemnification in the event that they be held liable to petitioner-plaintiff. For failure of third party defendant to answer the third party complaint despite due service of summons, the latter was declared in default.

On April 30, 1984, the lower court 1 rendered judgment against herein private respondents spouses, the dispositive portion of which reads:jgc:chanrobles.com.ph

"WHEREFORE, judgment is hereby rendered in favor of the plaintiff or against the defendants ordering the defendants to pay jointly and severally to the plaintiff the following amounts:jgc:chanrobles.com.ph

"1. P229,450.00 with interest at the rate of 12% per annum from February 24, 1981 until fully paid;

"2. P29,945.00 as and for attorney’s fees; and

"3. the costs of suit.

"On the third party complaint, third party defendant New Sikatuna Wood Industries, Inc. is ordered to pay third party plaintiffs Anita Peña Chua and Harris Chua all amounts said defendants-third party plaintiffs may pay to the plaintiff on account of this case." 2

On appeal filed by private respondents in AC-G.R. CV No. 04523, the Intermediate Appellate Court 3 (now Court of Appeals) reversed the lower court’s judgment in the now assailed decision, the dispositive portion of which reads:jgc:chanrobles.com.ph

"WHEREFORE, finding this appeal meritorious, We Reverse and Set Aside the appealed judgment, dated April 30, 1984 and a new judgment is hereby rendered dismissing the complaint, with costs against plaintiff-appellee." 4

Hence, this petition.

The pivotal issue in this case is whether or not petitioner is a holder in due course as to entitle it to proceed against private respondents for the amount stated in the dishonored checks.

Section 52(c) of the Negotiable Instruments Law defines a holder in due course as one who takes the instrument "in good faith and for value." On the other hand, Section 52(d) provides that in order that one may be a holder in due course, it is necessary that "at the time the instrument was negotiated to him he had no notice of any . . . defect in the title of the person negotiating it." However, under Section 59 every holder is deemed prima facie to be a holder in due course.

Admittedly, the Negotiable Instruments Law regulating the issuance of negotiable checks as well as the rights and liabilities arising therefrom, does not mention "crossed checks." But this Court has taken cognizance of the practice that a check with two parallel lines in the upper left hand corner means that it could only be deposited and may not be converted into cash. Consequently, such circumstance should put the payee on inquiry and upon him devolves the duty to ascertain the holder’s title to the check or the nature of his possession. Failing in this respect, the payee is declared guilty of gross negligence amounting to legal absence of good faith and as such the consensus of authority is to the effect that the holder of the check is not a holder in good faith. 5

Petitioner submits that at the time of the negotiation and endorsement of the checks in question by New Sikatuna Wood Industries, it had no knowledge of the transaction and/or arrangement made between the latter and private respondents.

We agree with respondent appellate court.

Relying on the ruling in Ocampo v. Gatchalian (supra), the Intermediate Appellate Court (now Court of Appeals), correctly elucidated that the effects of crossing a check are: the check may not be encashed but only deposited in the bank; the check may be negotiated only once — to one who has an account with a bank; and the act of crossing the check serves as a warning to the holder that the check has been issued for a definite purpose so that he must inquire if he has received the check pursuant to that purpose, otherwise he is not a holder in due course.

Further, the appellate court said:jgc:chanrobles.com.ph

"It results therefore that when appellee rediscounted the check knowing that it was a crossed check he was knowingly violating the avowed intention of crossing the check. Furthermore, his failure to inquire from the holder, party defendant New Sikatuna Wood Industries, Inc., the purpose for which the three checks were crossed, despite the warning of the crossing, prevents him from being considered in good faith and thus he is not a holder in due course. Being not a holder in due course, plaintiff is subject to personal defenses, such as lack of consideration between appellants and New Sikatuna Wood Industries. Note that under the facts the checks were postdated and issued only as a loan to New Sikatuna Wood Industries, Inc. if and when deposits were made to back up the checks. Such deposits were not made, hence no loan was made, hence the three checks are without consideration (Sec. 28, Negotiable Instruments Law).

"Likewise New Sikatuna Wood Industries negotiated the three checks in breach of faith in violation of Article (sic) 55, Negotiable Instruments Law, which is a personal defense available to the drawer of the check." 6

In addition, such instruments are mentioned in Section 541 of the Negotiable Instruments Law as follows:jgc:chanrobles.com.ph

"Sec. 541. The maker or any legal holder of a check shall be entitled to indicate therein that it be paid to a certain banker or institution, which he shall do by writing across the face the name of said banker or institution, or only the words "and company."cralaw virtua1aw library

"The payment made to a person other than the banker or institution shall not exempt the person on whom it is drawn, if the payment was not correctly made."cralaw virtua1aw library

Under usual practice, crossing a check is done by placing two parallel lines diagonally on the left top portion of the check. The crossing may be special wherein between the two parallel lines is written the name of a bank or a business institution, in which case the drawee should pay only with the intervention of that bank or company, or crossing may be general wherein between two parallel diagonal lines are written the words "and Co." or none at all as in the case at bar, in which case the drawee should not encash the same but merely accept the same for deposit.

The effect therefore of crossing a check relates to the mode of its presentment for payment. Under Section 72 of the Negotiable Instruments Law, presentment for payment to be sufficient must be made (a) by the holder, or by some person authorized to receive payment on his behalf . . . As to who the holder or authorized person will be depends on the instructions stated on the face of the check.

The three subject checks in the case at bar had been crossed generally and issued payable to New Sikatuna Wood Industries, Inc. which could only mean that the drawer had intended the same for deposit only by the rightful person, i.e., the payee named therein. Apparently, it was not the payee who presented the same for payment and therefore, there was no proper presentment, and the liability did not attach to the drawer. Thus, in the absence of due presentment, the drawer did not become liable. 7 Consequently, no right of recourse is available to petitioner against the drawer of the subject checks, private respondent wife, considering that petitioner is not the proper party authorized to make presentment of the checks in question.

Yet it does not follow as a legal proposition that simply because petitioner was not a holder in due course as found by the appellate court for having taken the instruments in question with notice that the same is for deposit only to the account of payee named in the subject checks, petitioner could not recover on the checks. The Negotiable Instruments Law does not provide that a holder who is not a holder in due course may not in any case recover on the instrument for in the case at bar, petitioner may recover from the New Sikatuna Wood Industries, Inc. if the latter has no valid excuse for refusing payment. The only disadvantage of a holder who is not in due course is that the negotiable instrument is subject to defenses as if it were non-negotiable. 8

That the subject checks had been issued subject to the condition that private respondents on due date would make the back up deposit for said checks but which condition apparently was not made, thus resulting in the non-consummation of the loan intended to be granted by private respondents to New Sikatuna Wood Industries, Inc., constitutes a good defense against petitioner who is not a holder in due course.

WHEREFORE, the decision appealed from is hereby AFFIRMED with costs against petitioner.

SO ORDERED.

Gutierrez, Jr., Bidin and Cortes, JJ., concur.

Feliciano, J., on leave.

Endnotes:

1. Presided over by then Judge (now Court of Appeals Justice) Bienvenido C. Ejercito.

2. Petition, Annex "A", RTC Decision, Rollo, pp. 42-43.

3. Penned by Justice Eduardo P. Caguioa, concurred in by Presiding Justice Ramon G. Gaviola, Jr., Justices Ma. Rosario Quetulio-Losa and Leonor Ines-Luciano.

4. Rollo, p. 51.

5. Ocampo & Co. V. Gatchalian, 3 SCRA 603 (1961).

6. Petition, Annex "B", IAC Decision, Rollo, pp. 50-51.

7. Chan Wan v. Tan Kim and Chen So, L-15380, September 30, 1960, 109 Phil. 706 (1960).

8. Chan Wan v. Tan Kim and Chen So, supra.

G.R. No. 78596 July 13, 1989 - IN RE: LUCIEN TRAN VAN NGHIA v. RAMON J. LIWAG

2012-11-11T16:53:05+00:00

THIRD DIVISION

[G.R. No. 78596. July 13, 1989.]

IN THE MATTER OF THE PETITION FOR HABEAS CORPUS OF: LUCIEN TRAN VAN NGHIA, Petitioner, v. HON. RAMON J. LIWAG, Acting Commissioner of the Commission on Immigration and Deportation (CID) AND JOHN DOES, agents of the CID, Respondents.

Emmanuel O. Sales for Petitioner.

SYLLABUS

1. CONSTITUTIONAL LAW; BILL OF RIGHTS; RIGHT OF THE PEOPLE TO BE SECURE IN THEIR PERSONS, HOUSES, PAPERS AND EFFECTS; PROBABLE CAUSE, ABSENT AS PETITIONER WAS "INVITED" ON THE STRENGTH OF MISSION ORDER. — The particular circumstances obtaining in the case at bar have seriously placed on doubt the legality and propriety of petitioner’s apprehension by respondent Commissioner. For unlike in the Harvey case where the warrantless capture of two suspected alien pedophiles was based on probable cause ascertained only after close surveillance for a three-month period during which their activities were monitored, herein petitioner was "invited" by a combined team of CID agents and police officers at his apartment unit on the strength of a mission order issued by the Commissioner on Immigration based on a sworn complaint of a single individual. The essential requisite of probable cause was conspicuously absent.

2. REMEDIAL LAW; SPECIAL PROCEEDINGS; HABEAS CORPUS; GENERALLY, RELEASE WHETHER PERMANENT OR TEMPORARY OF A DETAINED PERSON RENDERS PETITION MOOT AND ACADEMIC. — Petitioner is no longer under confinement. On June 20, 1987, petitioner was released upon the posting and approval of a personal bailbond on June 19, 1987 in the amount of P20,000.00 during the pendency of the administrative proceedings by the CID or until further orders of the Court. The general rule in a number of cases is that the release, whether permanent or temporary, of a detained person renders the petition for habeas corpus moot and academic, unless there are restraints attached to his release which precludes freedom of action, in which case the Court can still inquire into the nature of his involuntary restraint under the Villavicencio v. Lukban rule.

3. ID.; ID.; ID.; FORMAL DEPORTATION PROCEEDINGS RENDERS RESTRAINT AGAINST PETITIONER’S PERSON LEGAL. — Records show that formal deportation proceedings have been initiated against petitioner before the Board of Special Inquiry of the CID. The restraint (if any) against petitioner’s person has therefore become legal. The writ of habeas corpus has served its purpose.

D E C I S I O N

FERNAN, J.:

This is a petition for the issuance of a writ of habeas corpus filed by Lucien Tran Van Nghia alleging that he was arrested without warrant and deprived of his liberty by respondent Commissioner of Immigration and Deportation and his agents.

Petitioner Lucien Tran Van Nghia is a French national with temporary address in Sta. Ana, Manila. Originally admitted to the Philippines on November 1, 1981 as a temporary visitor, his status was changed to that of an immigrant on November 16, 1984 based on his representation that he is financially capable and will invest in the Philippines. To date, however, petitioner has not made any investment and has engaged only in French tutoring and practice of acupressure.chanrobles lawlibrary : rednad

On May 28, 1987, respondent CID Commissioner Ramon J. Liwag received a sworn complaint from a certain Dionisio G. Cabrera, Jr., allegedly petitioner’s landlord, accusing petitioner of being an undesirable alien for "committing acts inimical to public safety and progress." 1

Acting thereon, respondent Commissioner Liwag issued on June 1, 1987 a mission order to a team of seven (7) CID agents for them "to locate and bring subject to Intelligence Division for proper disposition" and "submit report." 2

On June 2, 1987, the aforementioned CID agents went to petitioner’s residence in Sta. Ana to invite the latter to the CID headquarters for verification of his status but petitioner and his then lady companion reportedly locked themselves inside their bedroom and refused to talk to the agents.

The immigration agents then sought the assistance of members of the Western Police District. Once again petitioner adamantly refused to be taken in and in the ensuing struggle, both petitioner and the lawmen were injured. Finally, petitioner was subdued and immediately taken to the CID Intelligence Office.

A warrant of arrest was issued by respondent Commissioner on June 2, 1987 but there is nothing in the records to convince this Court that said warrant was served on petitioner prior to his apprehension. Said warrant was based on the following acts and circumstances:jgc:chanrobles.com.ph

"That he applied for and was granted permanent status on his representation that he is financially capable of investing in the Philippines but he made no investments but engaged in tutoring in French and practice of acupressure; that he wilfully refused to recognize the authority of immigration agents who were sent to invite him to CID for verification of his status and physically resisted being taken in by the agents resulting in physical injuries to himself and the agents; that he has thereby made himself an undesirable alien subject to deportation." 3

By reason of the injuries he allegedly sustained when he was "brutally seized" by the CID agents, Petitioner, upon request of the French consul, was transferred from his detention cell at the immigration office to the Philippine General Hospital for urgent medical treatment.

On June 10, 1987, petitioner’s counsel filed the instant petition for habeas corpus to avert the "threatened removal" of petitioner from PGH and to question the validity of his detention by respondent Commissioner. A return of the writ was filed by the Solicitor General and the Court heard the case on oral argument on June 17, 1987. Thereafter, the parties were required to submit their respective memoranda.

The core issue is the legality of the arrest and detention of petitioner by the Immigration Commissioner preparatory to deportation proceedings. Petitioner insists that respondent official has no power, authority or jurisdiction to cause his arrest because under the 1987 Constitution, it is provided that "no search warrant or warrant of arrest shall issue except upon probable cause to be determined personally by the judge after examination under oath or affirmation of the complainant and the witnesses he may produce . . ." 4

The aforesaid argument raised by petitioner has been resolved in the case of Harvey v. Defensor-Santiago, G.R. No. 82544, June 28, 1988, where the Court, through Madame Justice Melencio-Herrera, said:jgc:chanrobles.com.ph

"‘The requirement of probable cause to be determined by a Judge, does not extend to deportation proceedings.’ (Morano v. Vivo, supra, citing Tiu Chun Hai v. Commissioner, infra). There need be no ‘truncated’ recourse to both judicial and administrative warrants in a single deportation proceeding.

"The foregoing does not deviate from the ruling in Qua Chee Gan v. Deportation Board (G.R. No. 10280, September 30, 1963, 9 SCRA 27 [1963] reiterated in Vivo v. Montesa, supra, that ‘under the express terms of our Constitution (the 1935 Constitution), it is therefore even doubtful whether the arrest of an individual may be ordered by authority other than a judge if the purpose is merely to determine the existence of a probable cause, leading to an administrative investigation.’

"What is essential is that there should be a specific charge against the alien intended to be arrested and deported, that a fair hearing be conducted (Section 37 [c]) with the assistance of counsel, if desired, and that the charge be substantiated by competent evidence . . ."cralaw virtua1aw library

The particular circumstances obtaining in the case at bar have seriously placed on doubt the legality and propriety of petitioner’s apprehension by respondent Commissioner. For unlike in the Harvey case where the warrantless capture of two suspected alien pedophiles was based on probable cause ascertained only after close surveillance for a three-month period during which their activities were monitored, herein petitioner was "invited" by a combined team of CID agents and police officers at his apartment unit on the strength of a mission order issued by the Commissioner on Immigration based on a sworn complaint of a single individual. The essential requisite of probable cause was conspicuously absent.

But even assuming that the arrest of petitioner was not legal at the beginning, certain events have supervened to render his petition moot and academic or to otherwise cure whatever defect there was at the inception of his arrest.chanrobles virtual lawlibrary

Firstly, petitioner is no longer under confinement. On June 20, 1987, petitioner was released upon the posting and approval of a personal bailbond on June 19, 1987 in the amount of P20,000.00 during the pendency of the administrative proceedings by the CID or until further orders of the Court. 5 The general rule in a number of cases is that the release, whether permanent or temporary, of a detained person renders the petition for habeas corpus moot and academic, unless there are restraints attached to his release which precludes freedom of action, in which case the Court can still inquire into the nature of his involuntary restraint under the Villavicencio v. Lukban rule. 6

In Moncupa v. Enrile, supra, the Court granted the writ of habeas corpus inspite of the fact that petitioner Moncupa had been temporarily released from detention on orders of the defense minister. In the Moncupa case, it was shown that attached to his discharge was the prohibition to travel, to change his abode and to grant interviews to members of the mass media without official permission. He was also ordered to report regularly to the military authorities. The Court subsequently nullified said conditions and ruled:jgc:chanrobles.com.ph

"Such restrictions limit the freedom of movement of the petitioner. It is not physical restraint alone which is inquired into by the writ of habeas corpus . . . 7

"Where a person continues to be unlawfully denied one or more of his constitutional freedoms, where there is present a denial of due process, where the restraints are not merely involuntary but appear to be unnecessary, and where a deprivation of freedom originally valid has, in the light of subsequent developments, become arbitrary, the person concerned or those applying in his behalf may still avail themselves of the privilege of the writ." 8

Petitioner Lucien Tran Van Nghia is not similarly restrained. The only condition in his bailbond is that ordinarily found in any other analogous undertaking, which is "to appear and answer the complaint . . .; will at all times hold himself . . . amenable to the orders and processes of the Court; and after conviction, he will surrender himself . . . in execution of such judgment . . ." 9

Secondly, records show that formal deportation proceedings have been initiated against petitioner before the Board of Special Inquiry of the CID. 10 The restraint (if any) against petitioner’s person has therefore become legal. The writ of habeas corpus has served its purpose. 11

WHEREFORE, the petition is DISMISSED.

So ordered.

Gutierrez, Jr., Bidin and Cortes, JJ., concur.

Feliciano, J., on leave.

Endnotes:

1. Rollo, p. 38.

2. Rollo, p. 41.

3. Rollo, p. 44.

4. Article III, Section 2.

5. Rollo, pp. 46, 52 and 72.

6. Toyoto v. Fidel Ramos, G.R. No. 69270, October 15, 1985, 139 SCRA 316; Moncupa v. Enrile, G.R. No. 63345, January 30, 1986, 141 SCRA 233.

7. Supra, p. 236.

8. Supra, pp. 238-239.

9. Rollo, p. 52.

10. Rollo, p. 122.

11. Harvey v. Defensor-Santiago, supra.

G.R. No. 78742 July 14, 1989 - ASSOCIATION OF SMALL LANDOWNERS IN THE PHILIPPINES, INC., ET AL. v. SEC. OF AGRARIAN REFORM

2012-11-11T16:53:05+00:00

EN BANC

[G.R. No. 78742. July 14, 1989.]

ASSOCIATION OF SMALL LANDOWNERS IN THE PHILIPPINES, INC., JUANITO D. GOMEZ, GERARDO B. ALARCIO, FELIFE A. GUICO, JR., BERNARDO M. ALMONTE, CANUTO RAMIR B. CABRITO, ISIDRO T. GUICO, FELISA I. LLAMIDO, FAUSTO J. SALVA, REYNALDO G. ESTRADA, FELISA C. BAUTISTA, ESMENIA J. CABE, TEODORO B. MADRIAGA, AUREA J. PRESTOSA, EMERENCIANA J. ISLA, FELICISIMA C. APRESTO, CONSUELO M. MORALES, BENJAMIN R. SEGISMUNDO, CIRILA A. JOSE & NAPOLEON S. FERRER, Petitioners, v. HONORABLE SECRETARY OF AGRARIAN REFORM, Respondent.

[G.R. No. 79310. July 14, 1989.]

ARSENIO AL. ACUÑA, NEWTON JISON, VICTORINO FERRARIS, DENNIS JEREZA, HERMINIGILDO GUSTILO, PAULINO D. TOLENTINO and PLANTERS’ COMMITTEE, INC., Victorias Mill District, Victorias, Negros Occidental, Petitioners, v. JOKER ARROYO, PHILIP E. JUICO and PRESIDENTIAL AGRARIAN REFORM COUNCIL, Respondents.

[G.R. No. 79744. July 14, 1989.]

INOCENTES PABICO, Petitioner, v. HON. PHILIP E. JUICO, SECRETARY OF THE DEPARTMENT OF AGRARIAN REFORM, HON. JOKER ARROYO, EXECUTIVE SECRETARY OF THE OFFICE OF THE PRESIDENT, and Messrs. SALVADOR TALENTO, JAIME ABOGADO, CONRADO AVANCEÑA, and ROBERTO TAAY, Respondents.

[G.R. No. 79777. July 14, 1989.]

NICOLAS S. MANAAY and AGUSTIN HERMANO, JR., Petitioners, v. HON. PHILIP ELLA JUICO, as Secretary of Agrarian Reform, and LAND BANK OF THE PHILIPPINES, Respondents.

SYLLABUS

1. CONSTITUTIONAL LAW; SUPREME COURT; ROLE. — Although holding neither purse nor sword and so regarded as the weakest of the three departments of the government, the judiciary is nonetheless vested with the power to annul the acts of either the legislative or the executive or of both when not conformable to the fundamental law. This is the reason for what some quarters call the doctrine of judicial supremacy.

2. ID.; SEPARATION OF POWERS; CONSTRUED. — The doctrine of separation of powers imposes upon the courts a proper restraint, born of the nature of their functions and of their respect for the other departments, in striking down the acts of the legislative and the executive as unconstitutional. The policy, indeed, is a blend of courtesy and caution. To doubt is to sustain. The theory is that before the act was done or the law was enacted, earnest studies were made by Congress or the President, or both, to insure that the Constitution would not be breached.

3. ID.; SUPREME COURT; POWER TO DECLARE AN ACT OR LAW UNCONSTITUTIONAL; CONSTITUTIONS. — The Constitution itself lays down stringent conditions for a declaration of unconstitutionality, requiring therefor the concurrence of a majority of the members of the Supreme Court who took part in the deliberations and voted on the issue during their session en banc.

4. ID.; ID.; ID.; JUDICIAL INQUIRY; REQUISITES. — The Court will assume jurisdiction over a constitutional question only if it is shown that the essential requisites of a judicial inquiry into such a question are first satisfied. Thus, there must be an actual case or controversy involving a conflict of legal rights susceptible of judicial determination, the constitutional question must have been opportunely raised by the proper party, and the resolution of the question is unavoidably necessary to the decision of the case itself.

5. REMEDIAL LAW; ACTIONS; PROPER PARTY; CASE AT BAR. — With particular regard to the requirement of proper party as applied in the cases before us, we hold that the same is satisfied by the petitioners and intervenors because each of them has sustained or is in danger of sustaining an immediate injury as a result of the acts or measures complained of.

6. CONSTITUTIONAL LAW; SUPREME COURT; POWER TO DECLARE AN ACT OR LAW UNCONSTITUTIONAL; TRIBUNAL WITH WIDE DISCRETION TO WAIVE REQUIREMENT. — Even if, strictly speaking, they are not covered by the definition, it is still within the wide discretion of the Court to waive the requirement and so remove the impediment to its addressing and resolving the serious constitutional questions raised.

7. ID.; ID.; JUDICIAL SUPREMACY. — . . . When the judiciary mediates to allocate constitutional boundaries, it does not assert any superiority over the other departments; it does not in reality nullify or invalidate an act of the Legislature, but only asserts the solemn and sacred obligation assigned to it by the Constitution to determine conflicting claims of authority under the Constitution and to establish for the parties in an actual controversy the rights which that instrument secures and guarantees to them. This is in truth all that is involved in what is termed "judicial supremacy" which properly is the power of judicial review under the Constitution.

8. ID.; 1973 CONSTITUTION; PRESIDENT; EXERCISE OF LEGISLATIVE POWER DURING MARTIAL LAW, SUSTAINED. — The promulgation of P.D. No. 27 by President Marcos in the exercise of his powers under martial law has already been sustained in Gonzales v. Estrella and we find no reason to modify or reverse it on that issue.

9. ID.; 1987 CONSTITUTION; PRESIDENT; LEGISLATIVE POWER, AUTHORIZED. — As for the power of President Aquino to promulgate Proc. No. 131 and E.O. Nos. 228 and 229, the same was authorized under Section 6 of the Transitory Provisions of the 1987 Constitution, quoted above. The said measures were issued by President Aquino before July 27, 1987, when the Congress of the Philippines was formally convened and took over legislative power from her. They are not "midnight" enactments intended to pre-empt the legislature because E.O. No. 228 was issued on July 17, 1987, and the other measures, i.e., Proc. No. 131 and E.O. No. 229, were both issued on July 22, 1987.

10. ID.; ID.; ID.; MEASURES PROMULGATED REMAINS VALID EVEN AFTER LOST OF LEGISLATIVE POWER; RATIONALE. — Neither is it correct to say that these measures ceased to be valid when she lost her legislative power for, like any statute, they continue to be in force unless modified or repealed by subsequent law or declared invalid by the courts. A statute does not ipso facto become inoperative simply because of the dissolution of the legislature that enacted it. By the same token, President Aquino’s loss of legislative power did not have the effect of invalidating all the measures enacted by her when and as long as she possessed it.

11. ID.; STATUTES; PROCLAMATION REMAINS VALID EVEN AFTER LOST OF LEGISLATIVE POWER; RATIONALE. — Proc. No. 131 is not an appropriation measure even if it does provide for the creation of said fund, for that is not its principal purpose. An appropriation law is one the primary and specific purpose of which is to authorize the release of public funds from the treasury. The creation of the fund is only incidental to the main objective of the proclamation, which is agrarian reform.

12. ID.; ID.; PROCLAMATION NO. 131 AND EXECUTIVE ORDER NO. 229; ABSENCE OF RETENTION LIMIT PROVIDED FOR IN REPUBLIC ACT NO. 6657. — The argument of some of the petitioners that Proc. No. 131 and E.O. No. 229 should be invalidated because they do not provide for retention limits as required by Article XIII, Section 4 of the Constitution is no longer tenable. R.A. No. 6657 does provide that in no case shall retention by the landowner exceed five (5) hectares. three (3) hectares may be awarded to each child of the landowner, subject to two (2) qualification which is now in Section 6 of the law.

13. ID.; ID.; TITLE OF A BILL NEED NOT BE CATALOGUED. — The title of the bill does not have to be a catalogue of its contents and will suffice if the matters embodied in the text are relevant to each other and may be inferred from the title.

14. CIVIL LAW; EFFECT AND APPLICATION OF LAWS; ISSUANCES FROM THE PRESIDENT REQUIRE PUBLICATION FOR EFFECTIVITY. — But for all their peremptoriness, these issuances from the President Marcos still had to comply with the requirement for publication as this Court held in Tañada v. Tuvera. Hence, unless published in the Official Gazette in accordance with Article 2 of the Civil Code, they could not have any force and effect if they were among those enactments successfully challenged in that case. (LOI 474 was published, though, in the Official Gazette dated November 29, 1976.)

15. REMEDIAL LAW; SPECIAL CIVIL ACTION; MANDAMUS; OFFICE. — Mandamus will lie to compel the discharge of the discretionary duty itself but not to control the discretion to be exercised. In other words, mandamus can issue to require action only but not specific action.

16. ID.; ID.; ID.; GENERALLY NOT AVAILABLE WHERE THERE IS A PLAIN, SPEEDY REMEDY; EXCEPTION. — While it is true that as a rule the writ will not be proper as long as there is still a plain, speedy and adequate remedy available from the administrative authorities, resort to the courts may still be permitted if the issue raised is a question of law.

17. POLITICAL LAW; POLICE POWER AND EMINENT DOMAIN; TRADITIONAL DISTINCTIONS. — There are traditional distinctions between the police power and the power of eminent domain that logically preclude the application of both powers at the same time on the same subject. The cases before us present no knotty complication insofar as the question of compensable taking is concerned. To the extent that the measures under challenge merely prescribe retention limits for landowners, there is an exercise of the police power for the regulation of private property in accordance with the Constitution. But where, to carry out such regulation, it becomes necessary to deprive such owners of whatever lands they may own in excess of the maximum area allowed, there is definitely a taking under the power of eminent domain for which payment of just compensation is imperative. The taking contemplated is not a mere limitation of the use of the land. What is required is the surrender of the title to and the physical possession of the said excess and all beneficial rights accruing to the owner in favor of the farmer-beneficiary. This is definitely an exercise not of the police power but of the power of eminent domain.

18. BILL OF RIGHTS; EQUAL PROTECTION CLAUSE; CLASSIFICATION; DEFINED. — Classification has been defined as the grouping of persons or things similar to each other in certain particulars and different from each other in these same particulars.

19. ID.; ID.; ID.; REQUISITES.; EQUAL PROTECTION CLAUSE; CLASSIFICATION; DEFINED. — To be valid, it must conform to the following requirements: (1) it must be based on substantial distinctions; (2) it must be germane to the purposes of the law; (3) it must not be limited to existing conditions only; and (4) it must apply equally to all the members of the class.

20. ID.; ID.; ID.; MEANING. — Equal protection simply means that all persons or things similarly situated must be treated alike both as to the rights conferred and the liabilities imposed.

21. POLITICAL LAW; EMINENT DOMAIN; NATURE. — Eminent domain is an inherent power of the State that enables it to forcibly acquire private lands intended for public use upon payment of just compensation to the owner.

22. ID.; ID.; WHEN AVAILED OF. — Obviously, there is no need to expropriate where the owner is willing to sell under terms also acceptable to the purchaser, in which case an ordinary deed of sale may be agreed upon by the parties. It is only where the owner is unwilling to sell, or cannot accept the price or other conditions offered by the vendee, that the power of eminent domain will come into play to assert the paramount authority of the State over the interests of the property owner. Private rights must then yield to the irresistible demands of the public interest on the time-honored justification, as in the case of the police power, that the welfare of the people is the supreme law.

23. ID.; ID.; REQUIREMENTS. — Basically, the requirements for a proper exercise of the power are: (1) public use and (2) just compensation.

24. ID.; POLITICAL QUESTION; DEFINED. — The term "political question" connotes what it means in ordinary parlance, namely, a question of policy. It refers to "those questions which, under the Constitution, are to be decided by the people in their sovereign capacity; or in regard to which full discretionary authority has been delegated to the legislative or executive branch of the government." It is concerned with issues dependent upon the wisdom, not legality, of a particular measure. (Tañada v. Cuenco, 100 Phil. 1101)

25. ID.; EMINENT DOMAIN JUST COMPENSATION; DEFINED. — Just compensation is defined as the full and fair equivalent of the property taken from its owner by the expropriator.

26. ID.; ID.; ID.; WORD "JUST", EXPLAINED. — It has been repeatedly stressed by this Court that the measure is not the taker’s gain but the owner’s loss. The word "just" is used to intensify the meaning of the word "compensation" to convey the idea that the equivalent to be rendered for the property to be taken shall be real, substantial, full, ample.

27. ID.; ID.; ID.; COMPENSABLE TAKING; CONDITIONS. — There is compensable taking when the following conditions concur: (1) the expropriator must enter a private property; (2) the entry must be for more than a momentary period; (3) the entry must be under warrant or color of legal authority; (4) the property must be devoted to public use or otherwise informally appropriated or injuriously affected; and (5) the utilization of the property for public use must be in such a way as to oust the owner and deprive him of beneficial enjoyment of the property.

28. ID.; ID.; ID.; DEPOSIT NOT NECESSARY WHERE THE EXPROPRIATOR IS THE ESTATE. — Where the State itself is the expropriator, it is not necessary for it to make a deposit upon its taking possession of the condemned property, as "the compensation is a public charge, the good faith of the public is pledged for its payment, and all the resources of taxation may be employed in raising the amount."cralaw virtua1aw library

29. ID.; ID.; ID.; DETERMINATION THEREOF, ADDRESSED TO THE COURTS OF JUSTICE. — The determination of just compensation is a function addressed to the courts of justice and may not be usurped by any other branch or official of the government.

30. ID.; ID.; ID.; EMINENT DOMAIN UNDER THE COMPREHENSIVE AGRARIAN REFORM LAW; DETERMINATION MADE BY THE DEPARTMENT OF AGRARIAN RELATIONS, ONLY PRELIMINARY. — The determination of the just compensation by the DAR is not by any means final and conclusive upon the landowner or any other interested party, for Section 16 (f) clearly provides: Any party who disagrees with the decision may bring the matter to the court of proper jurisdiction for final determination of just compensation. The determination made by the DAR is only preliminary unless accepted by all parties concerned. Otherwise, the courts of justice will still have the right to review with finality the said determination in the exercise of what is admittedly a judicial function. —

31. ID.; ID.; ID.; PAYMENT IN MONEY ONLY NOT APPLICABLE IN REVOLUTIONARY KIND OF EXPROPRIATION. — We do not deal here with the traditional exercise of the power of eminent domain. This is not an ordinary expropriation where only a specific property of relatively limited area is sought to be taken by the State from its owner for a specific and perhaps local purpose. What we deal with here is a revolutionary kind of expropriation. The expropriation before us affects all private agricultural lands whenever found and of whatever kind as long as they are in excess of the maximum retention limits allowed their owners. Such a program will involve not mere millions of pesos. The cost will be tremendous. Considering the vast areas of land subject to expropriation under the laws before us, we estimate that hundreds of billions of pesos will be needed, far more indeed than the amount of P50 billion initially appropriated, which is already staggering as it is by our present standards. The Court has not found in the records of the Constitutional Commission any categorial agreement among the members regarding the meaning to be given the concept of just compensation as applied to the comprehensive agrarian reform program being contemplated. On the other hand, there is nothing in the records either that militates against the assumptions we are making of the general sentiments and intention of the members on the content and manner of the payment to be made to the landowner in the light of the magnitude of the expenditure and the limitations of the expropriator. Therefore, payment of the just compensation is not always required to be made fully in money.

32. ID.; ID.; ID.; PRINCIPLE THAT TITLE SHALL PASS ONLY UPON FULL PAYMENT OF JUST COMPENSATION, NOT APPLICABLE. — Title to the property expropriated shall pass from the owner to the expropriator only upon full payment of the just compensation. The CARP Law, for its part, conditions the transfer of possession and ownership of the land to the government on receipt by the landowner of the corresponding payment or the deposit by the DAR of the compensation in cash or LBP bonds with an accessible bank. Until then, title also remains with the landowner. No outright change of ownership is contemplated either. Hence, that the assailed measures violate due process by arbitrarily transferring title before the land is fully paid for must also be rejected.

33. ADMINISTRATIVE LAW; EXHAUSTION OF ADMINISTRATIVE REMEDIES; CASE AT BAR. — It does not appear in G.R. No. 78742 that the appeal filed by the petitioners with the Office of the President has already been resolved. Although we have said that the doctrine of exhaustion of administrative remedies need not preclude immediate resort to judicial action, there are factual issues that have yet to be examined on the administrative level, especially the claim that the petitioners are not covered by LOI 474 because they do not own other agricultural lands than the subjects of their petition. Obviously, the Court cannot resolve these issues.

D E C I S I O N

CRUZ, J.:

In ancient mythology, Antaeus was a terrible giant who blocked and challenged Hercules for his life on his way to Mycenae after performing his eleventh labor. The two wrestled mightily and Hercules flung his adversary to the ground thinking him dead, but Antaeus rose even stronger to resume their struggle. This happened several times to Hercules’ increasing amazement. Finally, as they continued grappling, it dawned on Hercules that Antaeus was the son of Gaea and could never die as long as any part of his body was touching his Mother Earth. Thus forewarned, Hercules then held Antaeus up in the air, beyond the reach of the sustaining soil, and crushed him to death.

Mother Earth. The sustaining soil. The giver of life, without whose invigorating touch even the powerful Antaeus weakened and died.

The cases before us are not as fanciful as the foregoing tale. But they also tell of the elemental forces of life and death, of men and women who, like Antaeus, need the sustaining strength of the precious earth to stay alive.

"Land for the Landless" is a slogan that underscores the acute imbalance in the distribution of this precious resource among our people. But it is more than a slogan. Through the brooding centuries, it has become a battlecry dramatizing the increasingly urgent demand of the dispossessed among us for a plot of earth as their place in the sun.chanroblesvirtuallawlibrary

Recognizing this need, the Constitution in 1935 mandated the policy of social justice to "insure the well-being and economic security of all the people, "1 especially the less privileged. In 1973, the new Constitution affirmed this goal, adding specifically that "the State shall regulate the acquisition, ownership, use, enjoyment and disposition of private property and equitably diffuse property ownership and profits.’ 2 Significantly, there was also the specific injunction to "formulate and implement an agrarian reform program aimed at emancipating the tenant from the bondage of the soil." 3

The Constitution of 1987 was not to be outdone. Besides echoing these sentiments, it also adopted one whole and separate Article XIII on Social Justice and Human Rights, containing grandiose but undoubtedly sincere provisions for the uplift of the common people. These include a call in the following words for the adoption by the State of an agrarian reform program:chanrob1es virtual 1aw library

SEC. 4. The State shall, by law, undertake an agrarian reform program founded on the right of farmers and regular farmworkers, who are landless, to own directly or collectively the lands they till or, in the case of other farmworkers, to receive a just share of the fruits thereof. To this end, the State shall encourage and undertake the just distribution of all agricultural lands, subject to such priorities and reasonable retention limits as the Congress may prescribe, taking into account ecological, developmental, or equity considerations and subject to the payment of just compensation. In determining retention limits, the State shall respect the right of small landowners. The State shall further provide incentives for voluntary land-sharing.

Earlier, in fact, R.A. No. 3844, otherwise known as the Agricultural Land Reform Code, had already been enacted by the Congress of the Philippines on August 8, 1963, in line with the above-stated principles. This was substantially superseded almost a decade later by P.D. No. 27, which was promulgated on October 21, 1972, along with martial law, to provide for the compulsory acquisition of private lands for distribution among tenant-farmers and to specify maximum retention limits for landowners.

The people power revolution of 1986 did not change and indeed even energized the thrust for agrarian reform. Thus, on July 17, 1987, President Corazon C. Aquino issued E.O. No. 228, declaring full land ownership in favor of the beneficiaries of P.D. No. 27 and providing for the valuation of still unvalued lands covered by the decree as well as the manner of their payment. This was followed on July 22, 1987 by Presidential Proclamation No. 131, instituting a comprehensive agrarian reform program (CARP), and E.O. No. 229, providing the mechanics for its implementation.

Subsequently, with its formal organization, the revived Congress of the Philippines took over legislative power from the President and started its own deliberations, including extensive public hearings, on the improvement of the interests of farmers. The result, after almost a year of spirited debate, was the enactment of R.A. No. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988, which President Aquino signed on June 10, 1988. This law, while considerably changing the earlier mentioned enactments, nevertheless gives them suppletory effect insofar as they are not inconsistent with its provisions. 4

The above-captioned cases have been consolidated because they involve common legal questions, including serious challenges to the constitutionality of the several measures mentioned above. They will be the subject of one common discussion and resolution. The different antecedents of each case will require separate treatment, however, and will must be explained hereunder.

G.R. No. 79777

Squarely raised in this petition is the constitutionality of P.D. No. 27, E.O. Nos. 228 and 229, and R.A. No. 6657.

The subjects of this petition are a 9-hectare riceland worked by four tenants and owned by petitioner Nicolas Manaay and his wife and a 5-hectare riceland worked by four tenants and owned by petitioner Augustin Hermano, Jr. The tenants were declared full owners of these lands by E.O. No. 228 as qualified farmers under P.D. No. 27.

The petitioners are questioning P.D. No. 27 and E.O. Nos. 228 and 229 on grounds inter alia of separation of powers, due process, equal protection and the constitutional limitation that no private property shall be taken for public use without just compensation.

They contend that President Aquino usurped legislative power when she promulgated E.O. No. 228. The said measure is invalid also for violation of Article XIII, Section 4, of the Constitution, for failure to provide for retention limits for small landowners. Moreover, it does not conform to Article VI, Section 25(4) and the other requisites of a valid appropriation.

In connection with the determination of just compensation, the petitioners argue that the same may be made only by a court of justice and not by the President of the Philippines. They invoke the recent cases of EPZA v. Dulay 5 and Manotok v. National Food Authority. 6 Moreover, the just compensation contemplated by the Bill of Rights is payable in money or in cash and not in the form of bonds or other things of value.

In considering the rentals as advance payment on the land, the executive order also deprives the petitioners of their property rights as protected by due process. The equal protection clause is also violated because the order places the burden of solving the agrarian problems on the owners only of agricultural lands. No similar obligation is imposed on the owners of other properties.

The petitioners also maintain that in declaring the beneficiaries under P.D. No. 27 to be the owners of the lands occupied by them, E.O. No. 228 ignored judicial prerogatives and so violated due process. Worse, the measure would not solve the agrarian problem because even the small farmers are deprived of their lands and the retention rights guaranteed by the Constitution.

In his Comment, the Solicitor General stresses that P.D. No. 27 has already been upheld in the earlier cases of Chavez v. Zobel, 7 Gonzales v. Estrella, 8 and Association of Rice and Corn Producers of the Philippines, Inc. v. the National Land Reform council 9 The determination of just compensation by the executive authorities conformably to the formula prescribed under the questioned order is at best initial or preliminary only. It does not foreclose judicial intervention whenever sought or warranted. At any rate, the challenge to the order is premature because no valuation of their property has as yet been made by the Department of Agrarian Reform. The petitioners are also not proper parties because the lands owned by them do not exceed the maximum retention limit of 7 hectares.

Replying, the petitioners insist they are proper parties because P.D. No. 27 does not provide for retention limits on tenanted lands and that in any event their petition is a class suit brought in behalf of landowners with landholdings below 24 hectares. They maintain that the determination of just compensation by the administrative authorities is a final ascertainment. As for the cases invoked by the public respondent, the constitutionality of P.D. No. 27 was merely assumed in Chavez, while what was decided in Gonzales was the validity of the imposition of martial law.

In the amended petition dated November 22, 1988, it is contended that P.D. No. 27, E.O. Nos. 228 and 229 (except Sections 20 and 21) have been impliedly repealed by R.A. No. 6657. Nevertheless, this statute should itself also be declared unconstitutional because it suffers from substantially the same infirmities as the earlier measures.

A petition for intervention was filed with leave of court on June 1, 1988 by Vicente Cruz, owner of a 1.83-hectare land, who complained that the DAR was insisting on the implementation of P.D. No. 27 and E.O. No. 228 despite a compromise agreement he had reached with his tenant on the payment of rentals. In a subsequent motion dated April 10, 1989, he adopted the allegations in the basic amended petition that the above-mentioned enactments have been impliedly repealed by R.A. No. 6657.

G.R. No. 79310

The petitioners herein are landowners and sugar planters in the Victorias Mill District, Victorias, Negros Occidental. Co-petitioner Planters’ Committee, Inc. is an organization composed of 1,400 planter-members. This petition seeks to prohibit the implementation of Proc. No. 131 and E.O. No. 229.

The petitioners claim that the power to provide for a Comprehensive Agrarian Reform Program as decreed by the Constitution belongs to Congress and not the President. Although they agree that the President could exercise legislative power until the Congress was convened, she could do so only to enact emergency measures during the transition period. At that, even assuming that the interim legislative power of the President was properly exercised, Proc. No. 131 and E.O. No. 229 would still have to be annulled for violating the constitutional provisions on just compensation, due process, and equal protection.

They also argue that under Section 2 of Proc. No. 131 which provides:chanrob1es virtual 1aw library

Agrarian Reform Fund. — There is hereby created a special fund, to be known as the Agrarian Reform Fund, an initial amount of FIFTY BILLION PESOS (P50,000,000,000.00) to cover the estimated cost of the Comprehensive Agrarian Reform Program from 1987 to 1992 which shall be sourced from the receipts of the sale of the assets of the Asset Privatization Trust and Receipts of sale of ill-gotten wealth received through the Presidential Commission on Good Government and such other sources as government may deem appropriate. The amounts collected and accruing to this special fund shall be considered automatically appropriated for the purpose authorized in this Proclamation.

the amount appropriated is in futuro, not in esse. The money needed to cover the cost of the contemplated expropriation has yet to be raised and cannot be appropriated at this time.

Furthermore, they contend that taking must be simultaneous with payment of just compensation as it is traditionally understood, i.e., with money and in full, but no such payment is contemplated in Section 5 of the E.O. No. 229. On the contrary, Section 6, thereof provides that the Land Bank of the Philippines "shall compensate the landowner in an amount to be established by the government, which shall be based on the owner’s declaration of current fair market value as provided in Section 4 hereof, but subject to certain controls to be defined and promulgated by the Presidential Agrarian Reform Council." This compensation may not be paid fully in money but in any of several modes that may consist of part cash and part bond, with interest, maturing periodically, or direct payment in cash or bond as may be mutually agreed upon by the beneficiary and the landowner or as may be prescribed or approved by the PARC.

The petitioners also argue that in the issuance of the two measures, no effort was made to make a careful study of the sugar planters’ situation. There is no tenancy problem in the sugar areas that can justify the application of the CARP to them. To the extent that the sugar planters have been lumped in the same legislation with other farmers, although they are a separate group with problems exclusively their own, their right to equal protection has been violated.

A motion for intervention was filed on August 27, 1987 by the National Federation of Sugarcane Planters (NASP) which claims a membership of at least 20,000 individual sugar planters all over the country. On September 10, 1987, another motion for intervention was filed, this time by Manuel Barcelona, Et Al., representing coconut and riceland owners. Both motions were granted by the Court.

NASP alleges that President Aquino had no authority to fund the Agrarian Reform Program and that, in any event, the appropriation is invalid because of uncertainty in the amount appropriated. Section 2 of Proc. No. 131 and Sections 20 and 21 of E.O. No. 229 provide for an initial appropriation of fifty billion pesos and thus specifies the minimum rather than the maximum authorized amount. This is not allowed. Furthermore, the stated initial amount has not been certified to by the National Treasurer as actually available.

Two additional arguments are made by Barcelona, to wit, the failure to establish by clear and convincing evidence the necessity for the exercise of the powers of eminent domain, and the violation of the fundamental right to own property.

The petitioners also decry the penalty for non-registration of the lands, which is the expropriation of the said land for an amount equal to the government assessor’s valuation of the land for tax purposes. On the other hand, if the landowner declares his own valuation, he is unjustly required to immediately pay the corresponding taxes on the land, in violation of the uniformity rule.

In his consolidated Comment, the Solicitor General first invokes the presumption of constitutionality in favor of Proc. No. 131 and E.O. No. 229. He also justifies the necessity for the expropriation as explained in the "whereas" clauses of the Proclamation and submits that, contrary to the petitioner’s contention, a pilot project to determine the feasibility of CARP and a general survey on the people’s opinion thereon are not indispensable prerequisites to its promulgation.

On the alleged violation of the equal protection clause, the sugar planters have failed to show that they belong to a different class and should be differently treated. The Comment also suggests the possibility of Congress first distributing public agricultural lands and scheduling the expropriation of private agricultural lands later. From this viewpoint, the petition for prohibition would be premature.

The public respondent also points out that the constitutional prohibition is against the payment of public money without the corresponding appropriation. There is no rule that only money already in existence can be the subject of an appropriation law. Finally, the earmarking of fifty billion pesos as Agrarian Reform Fund, although denominated as an initial amount, is actually the maximum sum appropriated. The word "initial" simply means that additional amounts may be appropriated later when necessary.

On April 11, 1988, Prudencio Serrano, a coconut planter, filed a petition on his own behalf, assailing the constitutionality of E.O. No. 229. In addition to the arguments already raised, Serrano contends that the measure is unconstitutional because:chanrob1es virtual 1aw library

(1) Only public lands should be included in the CARP;

(2) E.O. No. 229 embraces more than one subject which is not expressed in the title;

(3) The power of the President to legislate was terminated on July 2, 1987; and

(4) The appropriation of a P50 billion special fund from the National Treasury did not originate from the House of Representatives.

G.R. No. 79744

The petitioner alleges that the then Secretary of Department of Agrarian Reform, in violation of due process and the requirement for just compensation, placed his landholding under the coverage of Operation Land Transfer. Certificates of Land Transfer were subsequently issued to the private respondents, who then refused payment of lease rentals to him.

On September 3, 1986, the petitioner protested the erroneous inclusion of his small landholding under Operation Land Transfer and asked for the recall and cancellation of the Certificates of Land Transfer in the name of the private respondents. He claims that on December 24, 1986, his petition was denied without hearing. On February 17, 1987, he filed a motion for reconsideration, which had not been acted upon when E.O. Nos. 228 and 229 were issued. These orders rendered his motion moot and academic because they directly effected the transfer of his land to the private respondents.

The petitioner now argues that:chanrob1es virtual 1aw library

(1) E.O. Nos. 228 and 229 were invalidly issued by the President of the Philippines.

(2) The said executive orders are violative of the constitutional provision that no private property shall be taken without due process or just compensation.

(3) The petitioner is denied the right of maximum retention provided for under the 1987 Constitution.

The petitioner contends that the issuance of E.O Nos. 228 and 229 shortly before Congress convened is anomalous and arbitrary, besides violating the doctrine of separation of powers. The legislative power granted to the President under the Transitory Provisions refers only to emergency measures that may be promulgated in the proper exercise of the police power.

The petitioner also invokes his rights not to be deprived of his property without due process of law and to the retention of his small parcels of riceholding as guaranteed under Article XIII, Section 4 of the Constitution. He likewise argues that, besides denying him just compensation for his land, the provisions of E.O. No. 228 declaring that:chanrob1es virtual 1aw library

Lease rentals paid to the landowner by the farmer-beneficiary after October 21, 1972 shall be considered as advance payment for the land.

is an unconstitutional taking of a vested property right. It is also his contention that the inclusion of even small landowners in the program along with other landowners with lands consisting of seven hectares or more is undemocratic.

In his Comment, the Solicitor General submits that the petition is premature because the motion for reconsideration filed with the Minister of Agrarian Reform is still unresolved. As for the validity of the issuance of E.O. Nos. 228 and 229, he argues that they were enacted pursuant to Section 6, Article XVIII of the Transitory Provisions of the 1987 Constitution which reads:chanrob1es virtual 1aw library

The incumbent president shall continue to exercise legislative powers until the first Congress is convened.

On the issue of just compensation, his position is that when P.D. No. 27 was promulgated on October 21, 1972, the tenant-farmer of agricultural land was deemed the owner of the land he was tilling. The leasehold rentals paid after that date should therefore be considered amortization payments.

In his Reply to the public respondents, the petitioner maintains that the motion he filed was resolved on December 14, 1987. An appeal to the Office of the President would be useless with the promulgation of E.O. Nos. 228 and 229, which in effect sanctioned the validity of the public respondent’s acts.

G.R. No. 78742

The petitioners in this case invoke the right of retention granted by P.D. No. 27 to owners of rice and corn lands not exceeding seven hectares as long as they are cultivating or intend to cultivate the same. Their respective lands do not exceed the statutory limit but are occupied by tenants who are actually cultivating such lands.

According to P.D. No. 316, which was promulgated in implementation of P.D. No. 27:chanrob1es virtual 1aw library

No tenant-farmer in agricultural lands primarily devoted to rice and corn shall be ejected or removed from his farmholding until such time as the respective rights of the tenant-farmers and the landowner shall have been determined in accordance with the rules and regulations implementing P.D. No. 27.

The petitioners claim they cannot eject their tenants and so are unable to enjoy their right of retention because the Department of Agrarian Reform has so far not issued the implementing rules required under the above-quoted decree. They therefore ask the Court for a writ of mandamus to compel the respondent to issue the said rules.

In his Comment, the public respondent argues that P.D. No. 27 has been amended by LOI 474 removing any right of retention from persons who own other agricultural lands of more than 7 hectares in aggregate area or lands used for residential, commercial, industrial or other purposes from which they derive adequate income for their family. And even assuming that the petitioners do not fall under its terms, the regulations implementing P.D. No. 27 have already been issued, to wit, the Memorandum dated July 10, 1975 (Interim Guidelines on Retention by Small Landowners, with an accompanying Retention Guide Table), Memorandum Circular No. 11 dated April 21, 1978, (Implementation Guidelines of LOI No. 474), Memorandum Circular No. 18-81 dated December 29, 1981 (Clarificatory Guidelines on Coverage of P.D. No. 27 and Retention by Small Landowners), and DAR Administrative Order No. 1, series of 1985 (Providing for a Cut-off Date for Landowners to Apply for Retention and/or to Protest the Coverage of their Landholdings under Operation Land Transfer pursuant to P.D. No. 27). For failure to file the corresponding applications for retention under these measures, the petitioners are now barred from invoking this right.

The public respondent also stresses that the petitioners have prematurely initiated this case notwithstanding the pendency of their appeal to the President of the Philippines. Moreover, the issuance of the implementing rules, assuming this has not yet been done, involves the exercise of discretion which cannot be controlled through the writ of mandamus. This is especially true if this function is entrusted, as in this case, to a separate department of the government.

In their Reply, the petitioners insist that the above-cited measures are not applicable to them because they do not own more than seven hectares of agricultural land. Moreover, assuming arguendo that the rules were intended to cover them also, the said measures are nevertheless not in force because they have not been published as required by law and the ruling of this Court in Tañada v. Tuvera. 10 As for LOI 474, the same is ineffective for the additional reason that a mere letter of instruction could not have repealed the presidential decree.

Although holding neither purse nor sword and so regarded as the weakest of the three departments of the government, the judiciary is nonetheless vested with the power to annul the acts of either the legislative or the executive or of both when not conformable to the fundamental law. This is the reason for what some quarters call the doctrine of judicial supremacy. Even so, this power is not lightly assumed or readily exercised. The doctrine of separation of powers imposes upon the courts a proper restraint, born of the nature of their functions and of their respect for the other departments, in striking down the acts of the legislative and the executive as unconstitutional. The policy, indeed, is a blend of courtesy and caution. To doubt is to sustain. The theory is that before the act was done or the law was enacted, earnest studies were made by Congress or the President, or both, to insure that the Constitution would not be breached.

In addition, the Constitution itself lays down stringent conditions for a declaration of unconstitutionality, requiring therefor the concurrence of a majority of the members of the Supreme Court who took part in the deliberations and voted on the issue during their session en banc. 11 And as established by judge-made doctrine, the Court will assume jurisdiction over a constitutional question only if it is shown that the essential requisites of a judicial inquiry into such a question are first satisfied. Thus, there must be an actual case or controversy involving a conflict of legal rights susceptible of judicial determination, the constitutional question must have been opportunely raised by the proper party, and the resolution of the question is unavoidably necessary to the decision of the case itself. 12

With particular regard to the requirement of proper party as applied in the cases before us, we hold that the same is satisfied by the petitioners and intervenors because each of them has sustained or is in danger of sustaining an immediate injury as a result of the acts or measures complained of. 13 And even if, strictly speaking, they are not covered by the definition, it is still within the wide discretion of the Court to waive the requirement and so remove the impediment to its addressing and resolving the serious constitutional questions raised.

In the first Emergency Powers Cases, 14 ordinary citizens and taxpayers were allowed to question the constitutionality of several executive orders issued by President Quirino although they were invoking only an indirect and general interest shared in common with the public. The Court dismissed the objection that they were not proper parties and ruled that "the transcendental importance to the public of these cases demands that they be settled promptly and definitely, brushing aside, if we must, technicalities of procedure." We have since then applied this exception in many other cases. 15

The other above-mentioned requisites have also been met in the present petitions.

In must be stressed that despite the inhibitions pressing upon the Court when confronted with constitutional issues like the ones now before it, it will not hesitate to declare a law or act invalid when it is convinced that this must be done. In arriving at this conclusion, its only criterion will be the Constitution as God and its conscience give it the light to probe its meaning and discover its purpose. Personal motives and political considerations are irrelevancies that cannot influence its decision. Blandishment is as ineffectual as intimidation.

For all the awesome power of the Congress and the Executive, the Court will not hesitate to "make the hammer fall, and heavily," to use Justice Laurel’s pithy language, where the acts of these departments, or of any public official, betray the people’s will as expressed in the Constitution.

It need only be added, to borrow again the words of Justice Laurel, that —

. . . when the judiciary mediates to allocate constitutional boundaries, it does not assert any superiority over the other departments; it does not in reality nullify or invalidate an act of the Legislature, but only asserts the solemn and sacred obligation assigned to it by the Constitution to determine conflicting claims of authority under the Constitution and to establish for the parties in an actual controversy the rights which that instrument secures and guarantees to them. This is in truth all that is involved in what is termed "judicial supremacy" which properly is the power of judicial review under the Constitution. 16

The cases before us categorically raise constitutional questions that this Court must categorically resolve. And so we shall.

We proceed first to the examination of the preliminary issues before resolving the more serious challenges to the constitutionality of the several measures involved in these petitions.chanroblesvirtual|awlibrary

The promulgation of P.D. No. 27 by President Marcos in the exercise of his powers under martial law has already been sustained in Gonzales v. Estrella and we find no reason to modify or reverse it on that issue. As for the power of President Aquino to promulgate Proc. No. 131 and E.O. Nos. 228 and 229, the same was authorized under Section 6 of the Transitory Provisions of the 1987 Constitution, quoted above.

The said measures were issued by President Aquino before July 27, 1987, when the Congress of the Philippines was formally convened and took over legislative power from her. They are not "midnight" enactments intended to pre-empt the legislature because E.O. No. 228 was issued on July 17, 1987, and the other measures, i.e., Proc. No. 131 and E.O. No. 229, were both issued on July 22, 1987. Neither is it correct to say that these measures ceased to be valid when she lost her legislative power for, like any statute, they continue to be in force unless modified or repealed by subsequent law or declared invalid by the courts. A statute does not ipso facto become inoperative simply because of the dissolution of the legislature that enacted it. By the same token, President Aquino’s loss of legislative power did not have the effect of invalidating all the measures enacted by her when and as long as she possessed it.

Significantly, the Congress she is alleged to have undercut has not rejected but in fact substantially affirmed the challenged measures and has specifically provided that they shall be suppletory to R.A. No. 6657 whenever not inconsistent with its provisions. 17 Indeed, some portions of the said measures, like the creation of the P50 billion fund in Section 2 of Proc. No. 131, and Sections 20 and 21 of E.O. No. 229, have been incorporated by reference in the CARP Law. 18

That fund, as earlier noted, is itself being questioned on the ground that it does not conform to the requirements of a valid appropriation as specified in the Constitution. Clearly, however, Proc. No. 131 is not an appropriation measure even if it does provide for the creation of said fund, for that is not its principal purpose. An appropriation law is one the primary and specific purpose of which is to authorize the release of public funds from the treasury. 19 The creation of the fund is only incidental to the main objective of the proclamation, which is agrarian reform.

It should follow that the specific constitutional provisions invoked, to wit, Section 24 and Section 25(4) of Article VI, are not applicable. With particular reference to Section 24, this obviously could not have been complied with for the simple reason that the House of Representatives, which now has the exclusive power to initiate appropriation measures, had not yet been convened when the proclamation was issued. The legislative power was then solely vested in the President of the Philippines, who embodied, as it were, both houses of Congress.

The argument of some of the petitioners that Proc. No. 131 and E.O. No. 229 should be invalidated because they do not provide for retention limits as required by Article XIII, Section 4 of the Constitution is no longer tenable. R.A. No. 6657 does provide for such limits now in Section 6 of the law, which in fact is one of its most controversial provisions. This section declares:chanrob1es virtual 1aw library

Retention Limits. — Except as otherwise provided in this Act, no person may own or retain, directly or indirectly, any public or private agricultural land, the size of which shall vary according to factors governing a viable family-sized farm, such as commodity produced, terrain, infrastructure, and soil fertility as determined by the Presidential Agrarian Reform Council (PARC) created hereunder, but in no case shall retention by the landowner exceed five (5) hectares. Three (3) hectares may be awarded to each child of the landowner, subject to the following qualifications: (1) that he is at least fifteen (15) years of age; and (2) that he is actually tilling the land or directly managing the farm; Provided, That landowners whose lands have been covered by Presidential Decree No. 27 shall be allowed to keep the area originally retained by them thereunder, further, That original homestead grantees or direct compulsory heirs who still own the original homestead at the time of the approval of this Act shall retain the same areas as long as they continue to cultivate said homestead.

The argument that E.O. No. 229 violates the constitutional requirement that a bill shall have only one subject, to be expressed in its title, deserves only short attention. It is settled that the title of the bill does not have to be a catalogue of its contents and will suffice if the matters embodied in the text are relevant to each other and may be inferred from the title. 20

The Court wryly observes that during the past dictatorship, every presidential issuance, by whatever name it was called, had the force and effect of law because it came from President Marcos. Such are the ways of despots. Hence, it is futile to argue, as the petitioners do in G.R. No. 79744, that LOI 474 could not have repealed P.D. No. 27 because the former was only a letter of instruction. The important thing is that it was issued by President Marcos, whose word was law during that time.cralawnad

But for all their peremptoriness, these issuances from the President Marcos still had to comply with the requirement for publication as this Court held in Tañada v. Tuvera. 21 Hence, unless published in the Official Gazette in accordance with Article 2 of the Civil Code, they could not have any force and effect if they were among those enactments successfully challenged in that case. (LOI 474 was published, though, in the Official Gazette dated November 29, 1976.)

Finally, there is the contention of the public respondent in G.R. No. 78742 that the writ of mandamus cannot issue to compel the performance of a discretionary act, especially by a specific department of the government. That is true as a general proposition but is subject to one important qualification. Correctly and categorically stated, the rule is that mandamus will lie to compel the discharge of the discretionary duty itself but not to control the discretion to be exercised. In other words, mandamus can issue to require action only but not specific action.

Whenever a duty is imposed upon a public official and an unnecessary and unreasonable delay in the exercise of such duty occurs, if it is a clear duty imposed by law, the courts will intervene by the extraordinary legal remedy of mandamus to compel action. If the duty is purely ministerial, the courts will require specific action. If the duty is purely discretionary, the courts by mandamus will require action only. For example, if an inferior court, public official, or board should, for an unreasonable length of time, fail to decide a particular question to the great detriment of all parties concerned, or a court should refuse to take jurisdiction of a cause when the law clearly gave it jurisdiction, mandamus will issue, in the first case to require a decision, and in the second to require that jurisdiction be taken of the cause.22

And while it is true that as a rule the writ will not be proper as long as there is still a plain, speedy and adequate remedy available from the administrative authorities, resort to the courts may still be permitted if the issue raised is a question of law. 23

III

There are traditional distinctions between the police power and the power of eminent domain that logically preclude the application of both powers at the same time on the same subject. In the case of City of Baguio v. NAWASA, 24 for example, where a law required the transfer of all municipal waterworks systems to the NAWASA in exchange for its assets of equivalent value, the Court held that the power being exercised was eminent domain because the property involved was wholesome and intended for a public use. Property condemned under the police power is noxious or intended for a noxious purpose, such as a building on the verge of collapse, which should be demolished for the public safety, or obscene materials, which should be destroyed in the interest of public morals. The confiscation of such property is not compensable, unlike the taking of property under the power of expropriation, which requires the payment of just compensation to the owner.

In the case of Pennsylvania Coal Co. v. Mahon, 25 Justice Holmes laid down the limits of the police power in a famous aphorism: "The general rule at least is that while property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking." The regulation that went "too far" was a law prohibiting mining which might cause the subsidence of structures for human habitation constructed on the land surface. This was resisted by a coal company which had earlier granted a deed to the land over its mine but reserved all mining rights thereunder, with the grantee assuming all risks and waiving any damage claim. The Court held the law could not be sustained without compensating the grantor. Justice Brandeis filed a lone dissent in which he argued that there was a valid exercise of the police power. He said:chanrob1es virtual 1aw library

Every restriction upon the use of property imposed in the exercise of the police power deprives the owner of some right theretofore enjoyed, and is, in that sense, an abridgment by the State of rights in property without making compensation. But restriction imposed to protect the public health, safety or morals from dangers threatened is not a taking. The restriction here in question is merely the prohibition of a noxious use. The property so restricted remains in the possession of its owner. The state does not appropriate it or make any use of it. The state merely prevents the owner from making a use which interferes with paramount rights of the public. Whenever the use prohibited ceases to be noxious — as it may because of further changes in local or social conditions — the restriction will have to be removed and the owner will again be free to enjoy his property as heretofore.

Recent trends, however, would indicate not a polarization but a mingling of the police power and the power of eminent domain, with the latter being used as an implement of the former like the power of taxation. The employment of the taxing power to achieve a police purpose has long been accepted. 26 As for the power of expropriation, Prof. John J. Costonis of the University of Illinois College of Law (referring to the earlier case of Euclid v. Ambler Realty Co., 272 US 365, which sustained a zoning law under the police power) makes the following significant remarks:chanrob1es virtual 1aw library

Euclid, moreover, was decided in an era when judges located the police and eminent domain powers on different planets. Generally speaking, they viewed eminent domain as encompassing public acquisition of private property for improvements that would be available for "public use," literally construed. To the police power, on the other hand, they assigned the less intrusive task of preventing harmful externalities, a point reflected in the Euclid opinion’s reliance on an analogy to nuisance law to bolster its support of zoning. So long as suppression of a privately authored harm bore a plausible relation to some legitimate "public purpose," the pertinent measure need have afforded no compensation whatever. With the progressive growth of government’s involvement in land use, the distance between the two powers has contracted considerably. Today government often employs eminent domain interchangeably with or as a useful complement to the police power — a trend expressly approved in the Supreme Court’s 1954 decision in Berman v. Parker, which broadened the reach of eminent domain’s "public use" test to match that of the police power’s standard of "public purpose." 27

The Berman case sustained a redevelopment project and the improvement of blighted areas in the District of Columbia as a proper exercise of the police power. On the role of eminent domain in the attainment of this purpose, Justice Douglas declared:chanrob1es virtual 1aw library

If those who govern the District of Columbia decide that the Nation’s Capital should be beautiful as well as sanitary, there is nothing in the Fifth Amendment that stands in the way.

Once the object is within the authority of Congress, the right to realize it through the exercise of eminent domain is clear.

For the power of eminent domain is merely the means to the end. 28

In Penn Central Transportation Co. v. New York City, 29 decided by a 6-3 vote in 1978, the U.S. Supreme Court sustained the respondent’s Landmarks Preservation Law under which the owners of the Grand Central Terminal had not been allowed to construct a multi-story office building over the Terminal, which had been designated a historic landmark. Preservation of the landmark was held to be a valid objective of the police power. The problem, however, was that the owners of the Terminal would be deprived of the right to use the airspace above it although other landowners in the area could do so over their respective properties. While insisting that there was here no taking, the Court nonetheless recognized certain compensatory rights accruing to Grand Central Terminal which it said would "undoubtedly mitigate" the loss caused by the regulation. This "fair compensation," as he called it, was explained by Prof. Costonis in this wise:chanrob1es virtual 1aw library

In return for retaining the Terminal site in its pristine landmark status, Penn Central was authorized to transfer to neighboring properties the authorized but unused rights accruing to the site prior to the Terminal’s designation as a landmark — the rights which would have been exhausted by the 59-story building that the city refused to countenance atop the Terminal. Prevailing bulk restrictions on neighboring sites were proportionately relaxed, theoretically enabling Penn Central to recoup its losses at the Terminal site by constructing or selling to others the right to construct larger, hence more profitable buildings on the transferee sites. 30

The cases before us present no knotty complication insofar as the question of compensable taking is concerned. To the extent that the measures under challenge merely prescribe retention limits for landowners, there is an exercise of the police power for the regulation of private property in accordance with the Constitution. But where, to carry out such regulation, it becomes necessary to deprive such owners of whatever lands they may own in excess of the maximum area allowed, there is definitely a taking under the power of eminent domain for which payment of just compensation is imperative. The taking contemplated is not a mere limitation of the use of the land. What is required is the surrender of the title to and the physical possession of the said excess and all beneficial rights accruing to the owner in favor of the farmer-beneficiary. This is definitely an exercise not of the police power but of the power of eminent domain.

Whether as an exercise of the police power or of the power of eminent domain, the several measures before us are challenged as violative of the due process and equal protection clauses.

The challenge to Proc. No. 131 and E.O. Nos. 228 and 299 on the ground that no retention limits are prescribed has already been discussed and dismissed. It is noted that although they excited many bitter exchanges during the deliberation of the CARP Law in Congress, the retention limits finally agreed upon are, curiously enough, not being questioned in these petitions. We therefore do not discuss them here. The Court will come to the other claimed violations of due process in connection with our examination of the adequacy of just compensation as required under the power of expropriation.

The argument of the small farmers that they have been denied equal protection because of the absence of retention limits has also become academic under Section 6 of R.A. No. 6657. Significantly, they too have not questioned the area of such limits. There is also the complaint that they should not be made to share the burden of agrarian reform, an objection also made by the sugar planters on the ground that they belong to a particular class with particular interests of their own. However, no evidence has been submitted to the Court that the requisites of a valid classification have been violated.

Classification has been defined as the grouping of persons or things similar to each other in certain particulars and different from each other in these same particulars. 31 To be valid, it must conform to the following requirements: (1) it must be based on substantial distinctions; (2) it must be germane to the purposes of the law; (3) it must not be limited to existing conditions only; and (4) it must apply equally to all the members of the class. 32 The Court finds that all these requisites have been met by the measures here challenged as arbitrary and discriminatory.

Equal protection simply means that all persons or things similarly situated must be treated alike both as to the rights conferred and the liabilities imposed.33 The petitioners have not shown that they belong to a different class and entitled to a different treatment. The argument that not only landowners but also owners of other properties must be made to share the burden of implementing land reform must be rejected. There is a substantial distinction between these two classes of owners that is clearly visible except to those who will not see. There is no need to elaborate on this matter. In any event, the Congress is allowed a wide leeway in providing for a valid classification. Its decision is accorded recognition and respect by the courts of justice except only where its discretion is abused to the detriment of the Bill of Rights.

It is worth remarking at this juncture that a statute may be sustained under the police power only if there is a concurrence of the lawful subject and the lawful method. Put otherwise, the interests of the public generally as distinguished from those of a particular class require the interference of the State and, no less important, the means employed are reasonably necessary for the attainment of the purpose sought to be achieved and not unduly oppressive upon individuals. 34 As the subject and purpose of agrarian reform have been laid down by the Constitution itself, we may say that the first requirement has been satisfied. What remains to be examined is the validity of the method employed to achieve the constitutional goal.chanrobles law library

One of the basic principles of the democratic system is that where the rights of the individual are concerned, the end does not justify the means. It is not enough that there be a valid objective; it is also necessary that the means employed to pursue it be in keeping with the Constitution. Mere expediency will not excuse constitutional shortcuts. There is no question that not even the strongest moral conviction or the most urgent public need, subject only to a few notable exceptions, will excuse the bypassing of an individual’s rights. It is no exaggeration to say that a person invoking a right guaranteed under Article III of the Constitution is a majority of one even as against the rest of the nation who would deny him that right.

That right covers the person’s life, his liberty and his property under Section 1 of Article III of the Constitution. With regard to his property, the owner enjoys the added protection of Section 9, which reaffirms the familiar rule that private property shall not be taken for public use without just compensation.

This brings us now to the power of eminent domain.

Eminent domain is an inherent power of the State that enables it to forcibly acquire private lands intended for public use upon payment of just compensation to the owner. Obviously, there is no need to expropriate where the owner is willing to sell under terms also acceptable to the purchaser, in which case an ordinary deed of sale may be agreed upon by the parties. 35 It is only where the owner is unwilling to sell, or cannot accept the price or other conditions offered by the vendee, that the power of eminent domain will come into play to assert the paramount authority of the State over the interests of the property owner. Private rights must then yield to the irresistible demands of the public interest on the time-honored justification, as in the case of the police power, that the welfare of the people is the supreme law.

But for all its primacy and urgency, the power of expropriation is by no means absolute (as indeed no power is absolute). The limitation is found in the constitutional injunction that "private property shall not be taken for public use without just compensation" and in the abundant jurisprudence that has evolved from the interpretation of this principle. Basically, the requirements for a proper exercise of the power are: (1) public use and (2) just compensation.

Let us dispose first of the argument raised by the petitioners in G.R. No. 79310 that the State should first distribute public agricultural lands in the pursuit of agrarian reform instead of immediately disturbing property rights by forcibly acquiring private agricultural lands. Parenthetically, it is not correct to say that only public agricultural lands may be covered by the CARP as the Constitution calls for "the just distribution of all agricultural lands." In any event, the decision to redistribute private agricultural lands in the manner prescribed by the CARP was made by the legislative and executive departments in the exercise of their discretion. We are not justified in reviewing that discretion in the absence of a clear showing that it has been abused.

A becoming courtesy admonishes us to respect the decisions of the political departments when they decide what is known as the political question. As explained by Chief Justice Concepcion in the case of Tañada v. Cuenco: 36

The term "political question" connotes what it means in ordinary parlance, namely, a question of policy. It refers to "those questions which, under the Constitution, are to be decided by the people in their sovereign capacity; or in regard to which full discretionary authority has been delegated to the legislative or executive branch of the government." It is concerned with issues dependent upon the wisdom, not legality, of a particular measure.

It is true that the concept of the political question has been constricted with the enlargement of judicial power, which now includes the authority of the courts "to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government." 37 Even so, this should not be construed as a license for us to reverse the other departments simply because their views may not coincide with ours.

The legislature and the executive have been seen fit, in their wisdom, to include in the CARP the redistribution of private landholdings (even as the distribution of public agricultural lands is first provided for, while also continuing space under the Public Land Act and other cognate laws). The Court sees no justification to interpose its authority, which we may assert only if we believe that the political decision is not unwise, but illegal. We do not find it to be so.

In U.S. v. Chandler-Dunbar Water Power Company, 38 it was held:chanrob1es virtual 1aw library

Congress having determined, as it did by the Act of March 3, 1909 that the entire St. Mary’s river between the American bank and the international line, as well as all of the upland north of the present ship canal, throughout its entire length, was "necessary for the purpose of navigation of said waters, and the waters connected therewith," that determination is conclusive in condemnation proceedings instituted by the United States under that Act, and there is no room for judicial review of the judgment of Congress . . .

As earlier observed, the requirement for public use has already been settled for us by the Constitution itself. No less than the 1987 Charter calls for agrarian reform, which is the reason why private agricultural lands are to be taken from their owners, subject to the prescribed maximum retention limits. The purposes specified in P.D. No. 27, Proc. No. 131 and R.A. No. 6657 are only an elaboration of the constitutional injunction that the State adopt the necessary measures "to encourage and undertake the just distribution of all agricultural lands to enable farmers who are landless to own directly or collectively the lands they till." That public use, as pronounced by the fundamental law itself, must be binding on us.

The second requirement, i.e., the payment of just compensation, needs a longer and more thoughtful examination.

Just compensation is defined as the full and fair equivalent of the property taken from its owner by the expropriator. 39 It has been repeatedly stressed by this Court that the measure is not the taker’s gain but the owner’s loss. 40 The word "just" is used to intensify the meaning of the word "compensation" to convey the idea that the equivalent to be rendered for the property to be taken shall be real, substantial, full, ample. 41

It bears repeating that the measures challenged in these petitions contemplate more than a mere regulation of the use of private lands under the police power. We deal here with an actual taking of private agricultural lands that has dispossessed the owners of their property and deprived them of all its beneficial use and enjoyment, to entitle them to the just compensation mandated by the Constitution.

As held in Republic of the Philippines v. Castellvi, 42 there is compensable taking when the following conditions concur: (1) the expropriator must enter a private property; (2) the entry must be for more than a momentary period; (3) the entry must be under warrant or color of legal authority; (4) the property must be devoted to public use or otherwise informally appropriated or injuriously affected; and (5) the utilization of the property for public use must be in such a way as to oust the owner and deprive him of beneficial enjoyment of the property. All these requisites are envisioned in the measures before us.

Where the State itself is the expropriator, it is not necessary for it to make a deposit upon its taking possession of the condemned property, as "the compensation is a public charge, the good faith of the public is pledged for its payment, and all the resources of taxation may be employed in raising the amount." 43 Nevertheless, Section 16(e) of the CARP Law provides that:chanrob1es virtual 1aw library

Upon receipt by the landowner of the corresponding payment or, in case of rejection or no response from the landowner, upon the deposit with an accessible bank designated by the DAR of the compensation in cash or in LBP bonds in accordance with this Act, the DAR shall take immediate possession of the land and shall request the proper Register of Deeds to issue a Transfer Certificate of Title (TCT) in the name of the Republic of the Philippines. The DAR shall thereafter proceed with the redistribution of the land to the qualified beneficiaries.chanrobles virtual lawlibrary

Objection is raised, however, to the manner of fixing the just compensation, which it is claimed is entrusted to the administrative authorities in violation of judicial prerogatives. Specific reference is made to Section 16(d), which provides that in case of the rejection or disregard by the owner of the offer of the government to buy his land —

. . . the DAR shall conduct summary administrative proceedings to determine the compensation for the land by requiring the landowner, the LBP and other interested parties to submit evidence as to the just compensation for the land, within fifteen (15) days from the receipt of the notice. After the expiration of the above period, the matter is deemed submitted for decision. The DAR shall decide the case within thirty (30) days after it is submitted for decision.

To be sure, the determination of just compensation is a function addressed to the courts of justice and may not be usurped by any other branch or official of the government. EPZA v. Dulay 44 resolved a challenge to several decrees promulgated by President Marcos providing that the just compensation for property under expropriation should be either the assessment of the property by the government or the sworn valuation thereof by the owner, whichever was lower. In declaring these decrees unconstitutional, the Court held through Mr. Justice Hugo E. Gutierrez, Jr.:chanrob1es virtual 1aw library

The method of ascertaining just compensation under the aforecited decrees constitutes impermissible encroachment on judicial prerogatives. It tends to render this Court inutile in a matter which under this Constitution is reserved to it for final determination.

Thus, although in an expropriation proceeding the court technically would still have the power to determine the just compensation for the property, following the applicable decrees, its task would be relegated to simply stating the lower value of the property as declared either by the owner or the assessor. As a necessary consequence, it would be useless for the court to appoint commissioners under Rule 67 of the Rules of Court. Moreover, the need to satisfy the due process clause in the taking of private property is seemingly fulfilled since it cannot be said that a judicial proceeding was not had before the actual taking. However, the strict application of the decrees during the proceedings would be nothing short of a mere formality or charade as the court has only to choose between the valuation of the owner and that of the assessor, and its choice is always limited to the lower of the two. The court cannot exercise its discretion or independence in determining what is just or fair. Even a grade school pupil could substitute for the judge insofar as the determination of constitutional just compensation is concerned.

x x x

In the present petition, we are once again confronted with the same question of whether the courts under P.D. No. 1533, which contains the same provision on just compensation as its predecessor decrees, still have the power and authority to determine just compensation, independent of what is stated by the decree and to this effect, to appoint commissioners for such purpose.

This time, we answer in the affirmative.

x x x

It is violative of due process to deny the owner the opportunity to prove that the valuation in the tax documents is unfair or wrong. And it is repulsive to the basic concepts of justice and fairness to allow the haphazard work of a minor bureaucrat or clerk to absolutely prevail over the judgment of a court promulgated only after expert commissioners have actually viewed the property, after evidence and arguments pro and con have been presented, and after all factors and considerations essential to a fair and just determination have been judiciously evaluated.

A reading of the aforecited Section 16(d) will readily show that it does not suffer from the arbitrariness that rendered the challenged decrees constitutionally objectionable. Although the proceedings are described as summary, the landowner and other interested parties are nevertheless allowed an opportunity to submit evidence on the real value of the property. But more importantly, the determination of the just compensation by the DAR is not by any means final and conclusive upon the landowner or any other interested party, for Section 16(f) clearly provides:chanrob1es virtual 1aw library

Any party who disagrees with the decision may bring the matter to the court of proper jurisdiction for final determination of just compensation.

The determination made by the DAR is only preliminary unless accepted by all parties concerned. Otherwise, the courts of justice will still have the right to review with finality the said determination in the exercise of what is admittedly a judicial function.

The second and more serious objection to the provisions on just compensation is not as easily resolved.

This refers to Section 18 of the CARP Law providing in full as follows:chanrob1es virtual 1aw library

SEC. 18. Valuation and Mode of Compensation. — The LBP shall compensate the landowner in such amount as may be agreed upon by the landowner and the DAR and the LBP, in accordance with the criteria provided for in Sections 16 and 17, and other pertinent provisions hereof, or as may be finally determined by the court, as the just compensation for the land.

The compensation shall be paid in one of the following modes, at the option of the landowner:chanrob1es virtual 1aw library

(1) Cash payment, under the following terms and conditions:chanrob1es virtual 1aw library

(a) For lands above fifty (50) hectares, insofar as the excess hectarage is concerned — Twenty-five percent (25%) cash, the balance to be paid in government financial instruments negotiable at any time.

(b) For lands above twenty-four (24) hectares and up to fifty (50) hectares — Thirty percent (30%) cash, the balance to be paid in government financial instruments negotiable at any time.

(c) For lands twenty-four (24) hectares and below — Thirty-five percent (35%) cash, the balance to be paid in government financial instruments negotiable at any time.

(2) Shares of stock in government-owned or controlled corporations, LBP preferred shares, physical assets or other qualified investments in accordance with guidelines set by the PARC;

(3) Tax credits which can be used against any tax liability;

(4) LBP bonds, which shall have the following features:chanrob1es virtual 1aw library

(a) Market interest rates aligned with 91-day treasury bill rates. Ten percent (10%) of the face value of the bonds shall mature every year from the date of issuance until the tenth (10th) year: Provided, That should the landowner choose to forego the cash portion, whether in full or in part, he shall be paid correspondingly in LBP bonds;

(b) Transferability and negotiability. Such LBP bonds may be used by the landowner, his successors-in-interest or his assigns, up to the amount of their face value, for any of the following:chanrob1es virtual 1aw library

(i) Acquisition of land or other real properties of the government, including assets under the Asset Privatization Program and other assets foreclosed by government financial institutions in the same province or region where the lands for which the bonds were paid are situated;

(ii) Acquisition of shares of stock of government owned or controlled corporations or shares of stock owned by the government in private corporations;

(iii) Substitution for surety or bail bonds for the provisional release of accused persons, or for performance bonds;

(iv) Security for loans with any government financial institution, provided the proceeds of the loans shall be invested in an economic enterprise, preferably in a small and medium-scale industry, in the same province or region as the land for which the bonds are paid;

(v) Payment for various taxes and fees to government: Provided, That the use of these bonds for these purposes will be limited to a certain percentage of the outstanding balance of the financial instruments; Provided, further, That the PARC shall determine the percentages mentioned above;

(vi) Payment for tuition fees of the immediate family of the original bondholder in government universities, colleges, trade schools, and other institutions;

(vii) Payment for fees of the immediate family of the original bondholder in government hospital; and

(viii) Such other uses as the PARC may from time to time allow.

The contention of the petitioners in G.R. No. 79777 is that the above provision is unconstitutional insofar as it requires the owners of the expropriated properties to accept just compensation therefor in less than money, which is the only medium of payment allowed. In support of this contention, they cite jurisprudence holding that:chanrob1es virtual 1aw library

The fundamental rule in expropriation matters is that the owner of the property expropriated is entitled to a just compensation, which should be neither more nor less, whenever it is possible to make the assessment, than the money equivalent of said property. Just compensation has always been understood to be the just and complete equivalent of the loss which the owner of the thing expropriated has to suffer by reason of the expropriation. 45 (Emphasis supplied.)

In J.M. Tuazon Co. v. Land Tenure Administration, 46 this Court held:chanrob1es virtual 1aw library

It is well-settled that just compensation means the equivalent for the value of the property at the time of its taking. Anything beyond that is more, and anything short of that is less, than just compensation. It means a fair and full equivalent for the loss sustained, which is the measure of the indemnity, not whatever gain would accrue to the expropriating entity. The market value of the land taken is the just compensation to which the owner of condemned property is entitled, the market value being that sum of money which a person desirous, but not compelled to buy, and an owner, willing, but not compelled to sell, would agree on as a price to be given and received for such property. (Emphasis supplied.)

In the United States, where much of our jurisprudence on the subject has been derived, the weight of authority is also to the effect that just compensation for property expropriated is payable only in money and not otherwise. Thus —

The medium of payment of compensation is ready money or cash. The condemnor cannot compel the owner to accept anything but money, nor can the owner compel or require the condemnor to pay him on any other basis than the value of the property in money at the time and in the manner prescribed by the Constitution and the statutes. When the power of eminent domain is resorted to, there must be a standard medium of payment, binding upon both parties, and the law has fixed that standard as money in cash. 47 (Emphasis supplied.)

Part cash and deferred payments are not and cannot, in the nature of things, be regarded as a reliable and constant standard of compensation. 48

"Just compensation" for property taken by condemnation means a fair equivalent in money, which must be paid at least within a reasonable time after the taking, and it is not within the power of the Legislature to substitute for such payment future obligations, bonds, or other valuable advantage. 49 (Emphasis supplied.)

It cannot be denied from these cases that the traditional medium for the payment of just compensation is money and no other. And so, conformably, has just compensation been paid in the past solely in that medium. However, we do not deal here with the traditional exercise of the power of eminent domain. This is not an ordinary expropriation where only a specific property of relatively limited area is sought to be taken by the State from its owner for a specific and perhaps local purpose. What we deal with here is a revolutionary kind of expropriation.

The expropriation before us affects all private agricultural lands whenever found and of whatever kind as long as they are in excess of the maximum retention limits allowed their owners. This kind of expropriation is intended for the benefit not only of a particular community or of a small segment of the population but of the entire Filipino nation, from all levels of our society, from the impoverished farmer to the land-glutted owner. Its purpose does not cover only the whole territory of this country but goes beyond in time to the foreseeable future, which it hopes to secure and edify with the vision and the sacrifice of the present generation of Filipinos. Generations yet to come are as involved in this program as we are today, although hopefully only as beneficiaries of a richer and more fulfilling life we will guarantee to them tomorrow through our thoughtfulness today. And, finally, let it not be forgotten that it is no less than the Constitution itself that has ordained this revolution in the farms, calling for "a just distribution" among the farmers of lands that have heretofore been the prison of their dreams but can now become the key at least to their deliverance.

Such a program will involve not mere millions of pesos. The cost will be tremendous. Considering the vast areas of land subject to expropriation under the laws before us, we estimate that hundreds of billions of pesos will be needed, far more indeed than the amount of P50 billion initially appropriated, which is already staggering as it is by our present standards. Such amount is in fact not even fully available at this time.

We assume that the framers of the Constitution were aware of this difficulty when they called for agrarian reform as a top priority project of the government. It is a part of this assumption that when they envisioned the expropriation that would be needed, they also intended that the just compensation would have to be paid not in the orthodox way but a less conventional if more practical method. There can be no doubt that they were aware of the financial limitations of the government and had no illusions that there would be enough money to pay in cash and in full for the lands they wanted to be distributed among the farmers. We may therefore assume that their intention was to allow such manner of payment as is now provided for by the CARP Law, particularly the payment of the balance (if the owner cannot be paid fully with money), or indeed of the entire amount of the just compensation, with other things of value. We may also suppose that what they had in mind was a similar scheme of payment as that prescribed in P.D. No. 27, which was the law in force at the time they deliberated on the new Charter and with which they presumably agreed in principle.

The Court has not found in the records of the Constitutional Commission any categorial agreement among the members regarding the meaning to be given the concept of just compensation as applied to the comprehensive agrarian reform program being contemplated. There was the suggestion to "fine tune" the requirement to suit the demands of the project even as it was also felt that they should "leave it to Congress" to determine how payment should be made to the landowner and reimbursement required from the farmer-beneficiaries. Such innovations as "progressive compensation" and "State-subsidized compensation" were also proposed. In the end, however, no special definition of the just compensation for the lands to be expropriated was reached by the Commission. 50

On the other hand, there is nothing in the records either that militates against the assumptions we are making of the general sentiments and intention of the members on the content and manner of the payment to be made to the landowner in the light of the magnitude of the expenditure and the limitations of the expropriator.

With these assumptions, the Court hereby declares that the content and manner of the just compensation provided for in the afore-quoted Section 18 of the CARP Law is not violative of the Constitution. We do not mind admitting that a certain degree of pragmatism has influenced our decision on this issue, but after all this Court is not a cloistered institution removed from the realities and demands of society or oblivious to the need for its enhancement. The Court is as acutely anxious as the rest of our people to see the goal of agrarian reform achieved at last after the frustrations and deprivations of our peasant masses during all these disappointing decades. We are aware that invalidation of the said section will result in the nullification of the entire program, killing the farmer’s hopes even as they approach realization and resurrecting the spectre of discontent and dissent in the restless countryside. That is not in our view the intention of the Constitution, and that is not what we shall decree today.

Accepting the theory that payment of the just compensation is not always required to be made fully in money, we find further that the proportion of cash payment to the other things of value constituting the total payment, as determined on the basis of the areas of the lands expropriated, is not unduly oppressive upon the landowner. It is noted that the smaller the land, the bigger the payment in money, primarily because the small landowner will be needing it more than the big landowners, who can afford a bigger balance in bonds and other things of value. No less importantly, the government financial instruments making up the balance of the payment are "negotiable at any time." The other modes, which are likewise available to the landowner at his option, are also not unreasonable because payment is made in shares of stock, LBP bonds, other properties or assets, tax credits, and other things of value equivalent to the amount of just compensation.

Admittedly, the compensation contemplated in the law will cause the landowners, big and small, not a little inconvenience. As already remarked, this cannot be avoided. Nevertheless, it is devoutly hoped that these countrymen of ours, conscious as we know they are of the need for their forebearance and even sacrifice, will not begrudge us their indispensable share in the attainment of the ideal of agrarian reform. Otherwise, our pursuit of this elusive goal will be like the quest for the Holy Grail.

The complaint against the effects of non-registration of the land under E.O. No. 229 does not seem to be viable any more as it appears that Section 4 of the said Order has been superseded by Section 14 of the CARP Law. This repeats the requisites of registration as embodied in the earlier measure but does not provide, as the latter did, that in case of failure or refusal to register the land, the valuation thereof shall be that given by the provincial or city assessor for tax purposes. On the contrary, the CARP Law says that the just compensation shall be ascertained on the basis of the factors mentioned in its Section 17 and in the manner provided for in Section 16.chanroblesvirtual|awlibrary

The last major challenge to CARP is that the landowner is divested of his property even before actual payment to him in full of just compensation, in contravention of a well-accepted principle of eminent domain.

The recognized rule, indeed, is that title to the property expropriated shall pass from the owner to the expropriator only upon full payment of the just compensation. Jurisprudence on this settled principle is consistent both here and in other democratic jurisdictions. Thus:chanrob1es virtual 1aw library

Title to property which is the subject of condemnation proceedings does not vest the condemnor until the judgment fixing just compensation is entered and paid, but the condemnor’s title relates back to the date on which the petition under the Eminent Domain Act, or the commissioner’s report under the Local Improvement Act, is filed. 51

. . . although the right to appropriate and use land taken for a canal is complete at the time of entry, title to the property taken remains in the owner until payment is actually made. 52 (Emphasis supplied.)

In Kennedy v. Indianapolis, 53 the US Supreme Court cited several cases holding that title to property does not pass to the condemnor until just compensation had actually been made. In fact, the decisions appear to be uniformly to this effect. As early as 1838, in Rubottom v. McLure, 54 it was held that "actual payment to the owner of the condemned property was a condition precedent to the investment of the title to the property in the State" albeit "not to the appropriation of it to public use." In Rexford v. Knight, 55 the Court of Appeals of New York said that the construction upon the statutes was that the fee did not vest in the State until the payment of the compensation although the authority to enter upon and appropriate the land was complete prior to the payment. Kennedy further said that "both on principle and authority the rule is . . . that the right to enter on and use the property is complete, as soon as the property is actually appropriated under the authority of law for a public use, but that the title does not pass from the owner without his consent, until just compensation has been made to him."cralaw virtua1aw library

Our own Supreme Court has held in Visayan Refining Co. v. Camus and Paredes, 56 that:chanrob1es virtual 1aw library

If the laws which we have exhibited or cited in the preceding discussion are attentively examined it will be apparent that the method of expropriation adopted in this jurisdiction is such as to afford absolute reassurance that no piece of land can be finally and irrevocably taken from an unwilling owner until compensation is paid . . . (Emphasis supplied.)

It is true that P.D. No. 27 expressly ordered the emancipation of tenant-farmer as October 21, 1972 and declared that he shall "be deemed the owner" of a portion of land consisting of a family-sized farm except that "no title to the land owned by him was to be actually issued to him unless and until he had become a full-fledged member of a duly recognized farmers’ cooperative." It was understood, however, that full payment of the just compensation also had to be made first, conformably to the constitutional requirement.

When E.O. No. 228, categorically stated in its Section 1 that:chanrob1es virtual 1aw library

All qualified farmer-beneficiaries are now deemed full owners as of October 21, 1972 of the land they acquired by virtue of Presidential Decree No. 27. (Emphasis supplied.)

it was obviously referring to lands already validly acquired under the said decree, after proof of full-fledged membership in the farmers’ cooperatives and full payment of just compensation. Hence, it was also perfectly proper for the Order to also provide in its Section 2 that the "lease rentals paid to the landowner by the farmer-beneficiary after October 21, 1972 (pending transfer of ownership after full payment of just compensation), shall be considered as advance payment for the land."cralaw virtua1aw library

The CARP Law, for its part, conditions the transfer of possession and ownership of the land to the government on receipt by the landowner of the corresponding payment or the deposit by the DAR of the compensation in cash or LBP bonds with an accessible bank. Until then, title also remains with the landowner. 57 No outright change of ownership is contemplated either.

Hence, the argument that the assailed measures violate due process by arbitrarily transferring title before the land is fully paid for must also be rejected.

It is worth stressing at this point that all rights acquired by the tenant-farmer under P.D. No. 27, as recognized under E.O. No. 228, are retained by him even now under R.A. No. 6657. This should counterbalance the express provision in Section 6 of the said law that "the landowners whose lands have been covered by Presidential Decree No. 27 shall be allowed to keep the area originally retained by them thereunder, further, That original homestead grantees or direct compulsory heirs who still own the original homestead at the time of the approval of this Act shall retain the same areas as long as they continue to cultivate said homestead."cralaw virtua1aw library

In connection with these retained rights, it does not appear in G.R. No. 78742 that the appeal filed by the petitioners with the Office of the President has already been resolved. Although we have said that the doctrine of exhaustion of administrative remedies need not preclude immediate resort to judicial action, there are factual issues that have yet to be examined on the administrative level, especially the claim that the petitioners are not covered by LOI 474 because they do not own other agricultural lands than the subjects of their petition.

Obviously, the Court cannot resolve these issues. In any event, assuming that the petitioners have not yet exercised their retention rights, if any, under P.D. No. 27, the Court holds that they are entitled to the new retention rights provided for by R.A. No. 6657, which in fact are on the whole more liberal than those granted by the decree.

The CARP Law and the other enactments also involved in these cases have been the subject of bitter attack from those who point to the shortcomings of these measures and ask that they be scrapped entirely. To be sure, these enactments are less than perfect; indeed, they should be continuously re-examined and rehoned, that they may be sharper instruments for the better protection of the farmer’s rights. But we have to start somewhere. In the pursuit of agrarian reform, we do not tread on familiar ground but grope on terrain fraught with pitfalls and expected difficulties. This is inevitable. The CARP Law is not a tried and tested project. On the contrary, to use Justice Holmes’s words, "it is an experiment, as all life is an experiment," and so we learn as we venture forward, and, if necessary, by our own mistakes. We cannot expect perfection although we should strive for it by all means. Meantime, we struggle as best we can in freeing the farmer from the iron shackles that have unconscionably, and for so long, fettered his soul to the soil.cralawnad

By the decision we reach today, all major legal obstacles to the comprehensive agrarian reform program are removed, to clear the way for the true freedom of the farmer. We may now glimpse the day he will be released not only from want but also from the exploitation and disdain of the past and from his own feelings of inadequacy and helplessness. At last his servitude will be ended forever. At last the farm on which he toils will be his farm. It will be his portion of the Mother Earth that will give him not only the staff of life but also the joy of living. And where once it bred for him only deep despair, now can he see in it the fruition of his hopes for a more fulfilling future. Now at last can he banish from his small plot of earth his insecurities and dark resentments and "rebuild in it the music and the dream."cralaw virtua1aw library

WHEREFORE, the Court holds as follows:chanrob1es virtual 1aw library

1. R.A. No. 6657, P.D. No. 27, Proc. No. 131, and E.O. Nos. 228 and 229 are SUSTAINED against all the constitutional objections raised in the herein petitions.

2. Title to all expropriated properties shall be transferred to the State only upon full payment of compensation to their respective owners.

3. All rights previously acquired by the tenant-farmers under P.D. No. 27 are retained and recognized.

4. Landowners who were unable to exercise their rights of retention under P.D. No. 27 shall enjoy the retention rights granted by R.A. No. 6657 under the conditions therein prescribed.

5. Subject to the above-mentioned rulings, all the petitions are DISMISSED, without pronouncement as to costs.

SO ORDERED.

Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Paras, Feliciano, Gancayco, Padilla, Bidin, Sarmiento, Cortes, Griño-Aquino, Medialdea and Regalado, JJ., concur.

Endnotes:

1. Art. II, Sec. 5.

2. 1973 Constitution, Art. II, Sec. 6.

3. Ibid., Art. XIV, Sec. 12.

4. R.A No. 6657, Sec. 15.

5. 149 SCRA 305.

6. 150 SCRA 89.

7. 55 SCRA 26.

8. 91 SCRA 294.

9. 113 SCRA 798.

10. 136 SCRA 27; 146 SCRA 446.

11. Art. VIII, Sec. 4(2).

12. Dumlao v. COMELEC, 95 SCRA 392.

13. Ex Parte Levitt, 303 US 633.

14. Araneta v. Dinglasan, 84 Phil. 368.

15. Pascual v. Secretary of Public Works, 110 Phil. 331; PHILCONSA v. Gimenez, 15 SCRA 479; Sanidad v. COMELEC, 73 SCRA 333.

16. Angara v. Electoral Commission, 63 Phil. 139.

17. R.A. No. 6657, Sec. 75.

18. Ibid., Sec. 63.

19. Bengzon v. Secretary of Justice, 299 US 410.

20. Alalayan v. NPC, 24 SCRA 172; Sumulong v. COMELEC, 73 Phil. 288; Tio v. Videogram Regulatory Board, 151 SCRA 208.

21. Supra.

22. Lamb v. Phipps, 22 Phil. 456.

23. Malabanan v. Ramento, 129 SCRA 359; Español v. Chairman, Philippine Veterans Administration, 137 SCRA 314.

24. 106 Phil. 144.

25. 260 US 393.

26. Powell v. Pennsylvania, 127 US 678; Lutz v. Araneta, 98 Phil. 148; Tio v. Videogram Regulatory Board, supra.

27. John J. Costonis, "The Disparity Issue: A Context for the Grand Central Terminal Decision, "Harvard Law Review, Vol. 91:40, 1977, p. 404.

28. 348 US 1954.

29. 438 US 104.

30. See note 27.

31. International Harvester Co. v. Missouri, 234 US 199.

32. People v. Cayat, 68 Phil. 12.

33. Ichong v. Hernandez, 101 Phil. 1155.

34. US v. Toribio, 15 Phil. 85; Fabie v. City of Manila, 21 Phil. 486; Case v. Board of Health, 24 Phil. 256.

35. Noble v. City of Manila, 67 Phil. 1.

36. 100 Phil. 1101.

37. 1987 Constitution, Art. VIII, Sec. 1.

38. 57 L ed. 1063.

39. Manila Railroad Co. v. Velasques, 32 Phil. 286.

40. Province of Tayabas v. Perez, 66 Phil. 467; J.M. Tuazon & Co., Inc. v. Land Tenure Administration, 31 SCRA 413; Municipality of Daet v. Court of Appeals, 93 SCRA 503; Manotok v. National Housing Authority, 150 SCRA 89.

41. City of Manila v. Estrada, 25 Phil. 208.

42. 58 SCRA 336.

43. Lewis, Law of Eminent Domain, 3rd Edition, pp. 1166-1167.

44. 149 SCRA 305.

45. Manila Railroad Co. v. Velasquez, 32 Phil. 286; Province of Tayabas v. Perez, supra, at note 40.

46. 31 SCRA 413.

47. Mandl v. City of Phoenix, 18 p 2d 273.

48. Sacremento Southern R. Co. v. Heilbron, 156 Cal. 408, 104 pp. 979, 980.

49. City of Waterbury v. Platt Bros. & Co., 56 A 856, 76 Conn, 435 citing Butler v. Ravine Road Sewer Com’rs, 39 N.J.L. 665; Bloodgood v. Mohawk v. H.R.R. Co., N.Y. 18 Wend. 9 35, 31 Am. Dec. 313; Sanborn v. Helden, 51 Cal 266; Burlington & C.R. Co. v. Schweikart, 14 p. 329, 10 Colo, 178; 23 Words and Phrases, pl. 460.

50. Record of the Constitutional Commission, Vol. 2, pp. 647, 704; Vol. 3, pp. 16-20, 243-247.

51. Chicago Park Dist. v. Downey Coal Co., 1 Ill. 2d 54.

52. Kennedy v. Indianapolis, 103 US 599, 26 L ed 550.

53. Ibid.

54. 4 Blkf., 508.

55. 11 NY 314.

56. 40 Phil. 550.

57. Sec. 16 (d).

G.R. No. 72827 July 18, 1989 - LUCIA EUROPA v. HUNTER GARMENTS MFG. (PHIL.) INC., ET AL.

2012-11-11T16:53:05+00:00

SECOND DIVISION

[G.R. No. 72827. July 18, 1989.]

LUCIA EUROPA (Mother of Deceased Lucrecia Europa), Petitioner, v. HUNTER GARMENTS MFG. (PHIL.) INC. and INTERMEDIATE APPELLATE COURT, Respondents.

SYLLABUS

1. REMEDIAL LAW; COURTS; JURISDICTION; ACQUIRED WHEN RESPONDENT FILED A MOTION FOR RECONSIDERATION OF THE JUDGMENT BY DEFAULT AND A MOTION TO ADMIT ANSWER BASED ON EXCUSABLE NEGLIGENCE. — Assuming arguendo that the court below originally did not acquire jurisdiction over the private respondent, the latter certainly submitted to it when private respondent filed a motion for reconsideration of the judgment by default and a motion to admit answer on the ground of excusable negligence. Therefore, the lower court’s denial of both motions is binding on private Respondent. (Soriano v. Palacio, 12 SCRA 449).

2. CIVIL LAW; QUASI DELICT; ALL DAMAGES FOR THE NATURAL AND PROBABLE CONSEQUENCES OF THE ACT OR OMISSION COMPLAINED OF ARE RECOVERABLE. — In actions based on quasi-delict as in this case, all damages for the natural and probable consequences of the act or omission complained of are recoverable. (Article 2202 of the New Civil Code).

D E C I S I O N

PARAS, J.:

This is a petition for certiorari to annul the Court of Appeals decision which set aside the order of default and judgment by default rendered by the Court of First Instance of Rizal Branch XIII in Civil Case No. 37848 for Damages.

The facts of the case are briefly as follows:chanrob1es virtual 1aw library

In 1973, the petitioner’s daughter, Lucrecia Europa, was employed as sample maker by the private respondent Hunter Garments Manufacturing (Philippines) Incorporated. Sometime during the course of her employment, or on March 9, 1978, Lucrecia got electrocuted by the high speed sewing machine which had been assigned to her by the private Respondent.

Thus, on July 18, 1980, the petitioner filed an action for damages against private respondent based on quasi-delict.

Summons, together with a copy of the complaint, was served on its production manager, Mr. Simplicio A. Garcia.

No answer to the complaint was ever filed. Thus, private respondent was declared in default and the petitioner was allowed to present evidence ex parte.

On April 8, 1981, the trial court rendered judgment, the dispositive portion of which reads;

"WHEREFORE, the plaintiff having established her cause of action, judgment is rendered against the defendant corporation ordering the latter to pay the plaintiff the following:chanrob1es virtual 1aw library

a) for the death of Lucrecia, the sum of P12,000.00;

b) for actual expenses for the wake, the funeral and burial expenses, and other miscellaneous expenses, the sum of P5,580.00;

c) for loss of income, the sum of P30,000.00;

d) for moral damages, the sum of P10,000.00;

e) for attorney’s fees, the sum of P5,000.00;

and pay the costs." (p. 39, Rollo)

Private respondent filed a motion for reconsideration of the aforesaid decision and a motion to admit answer, alleging its failure to seasonably file an answer was due to the excusable negligence of Ms. Lilia Jimenez, the production manager’s secretary, who failed to forward the summons and the copy of the complaint to the company president, despite instructions to do so by her superior. The trial court denied both motions.

Thus, private respondent appealed to the Court of Appeals, assigning the following errors:jgc:chanrobles.com.ph

"The Honorable Court, a quo, erred in not ruling that defendant-appellant’s failure to seasonably file its Answer was due to excusable negligence;"

"The Honorable Court, a quo, erred in declaring defendant-appellant in default and in allowing plaintiff-appellee to present her evidence ex parte despite the fact that summons had not been properly served;" and

"Assuming, arguendo, that the Honorable Court, a quo, had validly acquired jurisdiction over the person of defendant-appellant, it erred in rendering a decision which is not supported by law and the facts of the case." (p. 42, Rollo)

Finding that the trial court never acquired jurisdiction over the person of private respondent as summons was improperly served (the production manager not being the same "manager" referred to in Section 13 Rule 14 of the Revised Rules of Court for purposes of service of summons upon a domestic private corporation), the Court of Appeals set aside the default order and judgment by default and directed the trial court to conduct further proceedings for the adjudication of the case. (p. 22, Rollo)

The petitioner filed a motion for reconsideration of the aforesaid decision but the same was denied.

Hence, the instant petition for certiorari.

There is merit in this petition. Assuming arguendo that the court below originally did not acquire jurisdiction over the private respondent, the latter certainly submitted to it when private respondent filed a motion for reconsideration of the judgment by default and a motion to admit answer on the ground of excusable negligence. Therefore, the lower court’s denial of both motions is binding on private Respondent. (Soriano v. Palacio, 12 SCRA 449).

Private respondent likewise appealed from the judgment by default, thus, We shall proceed to review the evidence presented and the propriety of damages awarded by the lower court.

The evidence on record discloses that on March 9, 1978, Lucrecia Europa was electrocuted by the sewing machine owned by private Respondent. The autopsy conducted by Dr. Nieto M. Salvador confirmed that Lucrecia died from "shock probably secondary to electrocution" (Annex "A" of the complaint).

The facts and circumstances of the case point to the reasonableness of the damages awarded. There is an express finding of gross negligence on the part of private respondent in the judgment of the lower court, thus:jgc:chanrobles.com.ph

". . . There are at least two incidents, according to De la Cruz where high speed sewing machines of the defendant corporation were grounded. These incidents were brought to the attention of the management of the defendant corporation. Apparently, nothing was done by way of checking these grounded machines.

"At one time, Fornoza claimed that when her machine was grounded and she complained about it, she was told by the management `to get out of there.’ The defendant corporation does not employ a duly-licensed electrical engineer but only has three (3) electricians whose services clearly proved inadequate for maintaining the safety of the machines in the factory.

"There is no indication that the management had ever shown any serious concern for the safety of those operating said machines. As it was, the defendant corporation even tended to be apathetic to the plight of its employees manning the factory sewing machines . . .

"If the machines were frequently and regularly checked or properly maintained, the death of Lucrecia by electrocution would surely not have come to pass, . . . (p. 2, Decision).

In actions based on quasi-delict as in this case, all damages for the natural and probable consequences of the act or omission complained of are recoverable. (Article 2202 of the New Civil Code).

WHEREFORE, the decision of the Court of Appeals is hereby set aside and the decision of the lower court is hereby reinstated except that the indemnity for the death itself is increased to Thirty Thousand (P30,000.00) Pesos.

SO ORDERED.

Melencio-Herrera, (Chairman), Padilla, Sarmiento and Regalado, JJ., concur.

G.R. No. 74170 July 18, 1989 - REPUBLIC OF THE PHIL. v. INTERMEDIATE APPELLATE COURT, ET AL.

2012-11-11T16:53:05+00:00

FIRST DIVISION

[G.R. No. 74170. July 18, 1989.]

REPUBLIC OF THE PHILIPPINES, Petitioner, v. INTERMEDIATE APPELLATE COURT, GUILLERMO GONZALVES, ** respondents.

Amando Fabio, Jr. for Private Respondent.

D E C I S I O N

NARVASA, J.:

The chief question presented in the appeal at bar concerns the validity of a conveyance of residential land to an alien prior to his acquisition of Filipino citizenship by naturalization.

The Trial Court’s description of the factual background is largely undisputed. The case principally concerns Chua Kim @ Uy Teng Be, who became a naturalized Filipino citizen, taking his oath as such, on January 7, 1977. 1 He was the adopted son of Gregorio Reyes Uy Un.

The case involved three (3) parcels of land, which were among those included in Land Registration Cases Numbered 405 and 14817 of the Court of First Instance of Quezon Province: Lots Numbered 1 and 2, plan Psu-57676, 2 and Lot No. 549 of plan AP-7521 — identical to Plan Psu-54565. 3 These were respectively adjudicated in said land registration cases to two persons, as follows:chanrob1es virtual 1aw library

1) Lots 1 and 2, Psu-57676, to the Spouses Benigno Mañosca and Julia Daguison (in Opposition No. 51); 4 and

2) Lot 549, AP-7521 (Psu-54565), to Gaspar Marquez, married to Marcela Masaganda (in Opposition No. 155). 5 However, no decree of confirmation and registration was entered at the time.

Lots 1 and 2, Psu-57676, were sold by the owners, the Mañosca Spouses, to Gregorio Reyes Uy Un on Dec. 30, 1934. 6 Lot 549, Psu-54565, was also sold by the Marquez Spouses to Gregorio Reyes Uy Un on December 27, 1934. 7

Subsequently, Gregorio Reyes Uy Un died, and his adopted son, Chua Kim @ Uy Teng, took possession of the property.

The three (3) parcels of land above mentioned, together with several others, later became subject of a compromise agreement in a litigation in the Court of First Instance of Quezon Province, docketed as Civil Case No. C-385. 8 The compromise agreement was executed not only by the parties in the case (plaintiffs Domingo Reyes and Lourdes Abustan, and the defendants, So Pick, Et. Al.) — respectively described as "First Parties" and "Second Parties" — but also Chua Kim @ Ting Be Uy, designated therein as "Third Party," although he had not been impleaded as a party to the case. In the agreement, in consideration of Chua Kim’s renunciation (a) of "any right or claim of whatever nature in . . . (certain specifically identified) parcels of land" and (b) of any other claim against the First Parties and Second Parties, both the latter, in turn, waived "any claim of ownership or other right in or to the parcels of land, or the improvements thereon, in Buenavista, Quezon covered by OCT Nos. 3697, 3696, 3439 and 4382 of the Registry of Deeds of Quezon," in the name of Gregorio Reyes Uy Un, Chua Kim’s adoptive father, and that they (the First and Second Parties) "will not oppose the transfer, by means not contrary to law, of the ownership thereof to the Third Party," said Chua Kim. The compromise agreement was afterwards submitted to the Court 9 which rendered judgment on July 29, 1970 (amended by Order dated July 31, 1970), approving the same. 10

Chua Kim then filed a petition for issuance of decree of confirmation and registration in Land Registration Case No. 405 (LRC Rec. No. 14817) of the Court of First Instance of Quezon Province. 11

After due proceedings, and on the basis of the foregoing facts found to have been duly proven by the evidence, the Court of First Instance of Quezon 12 promulgated on January 14, 1982 the following Order, to wit:chanrob1es virtual 1aw library

WHEREFORE, premises considered, this Court finds that herein petitioner Chua Kim alias Uy Teng Be has duly established his registerable title over the properties in question in this land registration case in so far as Oppositions Nos. 51 and 155 are concerned, and hereby GRANTS his petition. The decision rendered on January 14, 1933 in so far as Opposition Nos. 51 and 155 are concerned, is hereby amended adjudicating the said properties, better known now as Lots 1 and 2 of plan Psu-57676 in Opposition No. 51 and as Lot 549 of plan Ap-7521, which is identical to plan Psu-54565 in Opposition No. 155, to herein petitioner Chua Kim alias Uy Teng Be. Upon this order becoming final, let the corresponding decrees of confirmation and registration be entered and thereafter upon payment of the fees required by law, let the corresponding certificate of titles be issued in the name of petitioner, Chua Kim alias Uy Teng Be, married to Amelia Tan, of legal age, a naturalized Filipino citizen, and a resident of the Municipality of Buenavista, Province of Quezon, as his own exclusive properties, free from all liens and encumbrances.

SO ORDERED.

The Republic of the Philippines, through the Solicitor General, challenged the correctness of the Order and appealed it to the Court of Appeals. That Court, however, affirmed the Order "in all respects," in a decision promulgated on March 25, 1986. 13

Still not satisfied, the Republic has come to this Court on appeal by certiorari, in a final attempt to prevent the adjudication of the property in question to Chua Kim. The Solicitor General argues that —

1) the deeds and instruments presented by Chua Kim to prove the conveyance to him of the lands in question by the successor-in-interest of the original adjudicatees are inadequate for the purpose; and

2) Chua Kim has not proven his qualification to own private agricultural land at the time of the alleged acquisition of the property in question.

The Republic’s theory is that the conveyances to Chua Kim were made while he was still an alien, i.e., prior to his taking oath as a naturalized Philippine citizen on January 7, 1977, at a time when he was disqualified to acquire ownership of land in the Philippines (ART XIII, SEC. 5, 1935 Constitution; ART. XIV, Sec. 14, 1973 Constitution); hence, his asserted titles are null and void. 14 It is also its contention that reliance on the decision and amendatory order in Civil Case No. C-385 of the CFI, Rizal 15 is unavailing, since neither document declares that the property in question was adjudicated to Chua Kim as his inheritance from his adoptive father, Gregorio Reyes Uy Un. 16

The conclusions of fact of the Intermediate Appellate Court, sustaining those of the Land Registration Court, reached after analysis and assessment of the evidence presented at a formal hearing by the parties, are by firmly entrenched rule binding on and may not be reviewed by this Court. 17 Those facts thus found to exist, and the legal principles subsumed in them, impel rejection of the Republic’s appeal.

It is a fact that the lands in dispute were properly and formally adjudicated by a competent Court to the Spouses Gaspar and to the Spouses Marquez in fee simple, and that the latter had afterwards conveyed said lands to Gregorio Reyes Uy Un, Chua Kim’s adopting parent, by deeds executed in due form on December 27, 1934 and December 30, 1934, respectively. Plainly, the conveyances were made before the 1935 Constitution went into effect, i.e., at a time when there was no prohibition against acquisition of private agricultural lands by aliens. 18 Gregorio Reyes Uy Un therefore acquired good title to the lands thus purchased by him, and his ownership was not at all affected either (1) by the principle subsequently enunciated in the 1935 Constitution that aliens were incapacitated to acquire lands in the country, since that constitutional principle has no retrospective application, 19 or (2) by his and his successor’s omission to procure the registration of the property prior to the coming into effect of the Constitution. 20

It is a fact, furthermore, that since the death of Gregorio Reyes Uy Un in San Narciso, Quezon, in 1946, Chua Kim @ Uy Teng Be had been in continuous possession of the lands in concept of owner, as the putative heir of his adoptive father, said Gregorio Reyes; 21 this, without protest whatever from any person. It was indeed Chua Kim’s being in possession of the property in concept of owner, and his status as adopted son of Gregorio Reyes, that were the factors that caused his involvement in Civil Case No. C-385 of the CFI at Calauag, Quezon, at the instance of the original parties thereto, 22 and his participation in the Compromise Agreement later executed by all parties. As already mentioned, that compromise agreement, approved by judgment rendered on July 29, 1970, 23 implicitly recognized Chua Kim’s title to the lands in question.

Be this as it may, the acquisition by Chua Kim of Philippine citizenship should foreclose any further debate regarding the title to the property in controversy, in line with this Court’s rulings relative to persons similarly situated. 24 In Sarsosa Vda. de Barsobia v. Cuenco, 113 SCRA 547, for instance, the ruling was as follows:chanrob1es virtual 1aw library

. . . The litigated property is now in the hands of a naturalized Filipino. It is no longer owned by a disqualified vendee. Respondent, as a naturalized citizen, was constitutionally qualified to own the subject property. There would be no more public policy to be served in allowing petitioner Epifania to recover the land as it is already in the hands of a qualified person. Applying by analogy the ruling of this Court in Vasquez v. Giap and Li Seng Giap & Sons (96 Phil. 447 [1955]),

. . . if the ban on aliens from acquiring not only agricultural but also urban lands, as construed by this Court in the Krivenko case, is to preserve the nation’s land for future generations of Filipinos, that aim or purpose would not be thwarted but achieved by making lawful the acquisition of real estate by aliens who became Filipino citizens by naturalization.

WHEREFORE, the petition is DISMISSED, and the judgment of the Intermediate Appellate Court subject thereof AFFIRMED in toto.

SO ORDERED.

Cruz, Gancayco, Griño-Aquino and Medialdea, JJ., concur.

Endnotes:

** Actually, Guillermo Gonzalves should not have been impleaded as respondent in this case at all; he was an unsuccessful applicant in the registration proceedings before the Cadastral Court (Land Reg. Cases No. 405 and 14817), but has not taken part in any of the subsequent proceedings in the Court of Appeals or this Court. The real party respondent is Chua Kim @ Uy Teng Be, who was also a petitioner/applicant, and eventually the prevailing party, in the registration proceedings; and it is his right to the lands in question that is challenged by the Republic.

1. Exhs. A, A-1.

2. Exhs. B, B-1 and B-2.

3. Exhs. C, C-1 and C-2.

4. Exh. D-1.

5. Exh. D-2.

6. Exh. F.

7. Exh. G.

8. The plaintiffs were Domingo Reyes and Lourdes Abustan; the defendant was So Pic or Pick @ Ignacia Te @ Kui Tin or Siu Tin Te.

9. Chua Kim thereby voluntarily submitted himself to the jurisdiction of the Court.

10. Exh. J.

11. See footnotes 2 and 3, supra.

12. Branch IV, Calauag, Quezon Province, Hon. Conrado R. Antona, presiding.

13. Ejercito, J., ponente, with whom concurred Coquia, Zosa and Bartolome, JJ.,

14. Rollo, p. 32.

15. Exhs. H and I, respectively.

16. Rollo, p. 33.

17. Cailes, Et. Al. v. Mayuga, Et Al., G.R. No. L-30859, Feb. 20, 1989; Dihiansan Et. Al. v. C.A., 153 SCRA 712 (1987); Rebuleda v. IAC, 155 SCRA 520 (1987); Korean Airlines, Ltd. v. C.A., 154 SCRA 211 (1987), cited in Sabena Belgian World Airlines v. C.A. Et. Al., G.R. No. 82068, March 31, 1989.

18. Tejido v. Zamacoma, 138 SCRA 78; (1985), citing Herrera v. Luy Kim Guan, 1 SCRA 413; Heirs of Francisco Parco v. Haw Pia, 45 SCRA 164 (1983); see, also, Almario v. Corrales, CA-G.R. No. 923-R, Nov. 24, 1947, 45 O.G. 795.

19. Tejido v. Zamacoma, 138 SCRA 78, supra; Heirs of Francisco Parco v. Haw Pia, 45 SCRA 164, supra; Falcasantos v. Haw Suy Ching, 91 Phil. 456.

20. See Heirs of Francisco Parco v. Haw Pia, supra, and Bautista v. Dy Bun Chin, CA-G.R. No. 6983-R, Oct. 30, 1953, 49 O.G. 179.

21. Par. 4, p. 9, Record.

22. As earlier pointed out (footnote 6, supra), the plaintiffs were Domingo Reyes and Lourdes Abustan; the defendant was So Pic or Pick @ Ignacia Te @ Kui Tin or Sui Tin Te.

23. Exh. H.

24. E.G., Sarsosa Vda. de Barsobia v. Cuenco, 133 SCRA 547, reiterated in Godines v. Fong Pak Luen, 120 SCRA 223 (1983) and Yap v. Grageda, 121 SCRA 244 (1983); de Castro v. Joaguin Teng Queen Tan Et. Al., 129 SCRA 85 (1984).

G.R. No. 43886 July 19, 1989 - IRENE DINO v. AUGUSTO L. VALENCIA

2012-11-11T16:53:05+00:00

SECOND DIVISION

[G.R. No. 43886. July 19, 1989.]

IRENE DINO, Petitioner, v. HON. AUGUSTO L. VALENCIA in his capacity as Presiding Judge of the Court of First Instance of Rizal, Quezon City, Branch XXXI and FRANCISCO L. ONG, Respondents.

SYLLABUS

1. REMEDIAL LAW; CIVIL PROCEDURE; JUDGMENT ON THE PLEADINGS; DEFENSE THAT ORIGINAL AGREEMENT OF PARTIES HAD ALREADY BEEN NOVATED AND DISREGARDED, A SHAM AND FALSE DEFENSE WHICH DID NOT TENDER AN ISSUE. — The petitioner’s defense that the original agreement of the parties had already been novated and disregarded after the issuance of the checks mentioned in private respondent’s complaint and after the private respondent had executed and signed the Affidavit and Memorandum of Quitclaim, is a sham and false defense and did not tender an issue that would require a hearing for the reception of evidence. It is a mere device or scheme to avoid or delay the immediate payment of petitioner’s obligation to the private respondent under the Affidavit and Memorandum of Quitclaim.

2. ID.; ID.; ID.; FAILURE TO DENY UNDER OATH GENUINENESS AND DUE EXECUTION OF INSTRUMENT CONSIDERED AN ADMISSION. — Section 8, Rule 8 of the Rules of Court provides that when an action is founded upon a written instrument, copied in or attached to the corresponding pleading, the genuineness and due execution of the instrument shall be deemed admitted unless the adverse party, under oath, specifically denies them. In the present case, the petitioner is deemed to have admitted the genuineness and due execution of the "Affidavit and Memorandum of Quitclaim" for her failure to deny the same under oath; consequently, the judgment on the pleadings rendered by respondent Judge was proper.

3. ID.; ID.; ID.; A MOTION THEREFOR, MAY BE CONSIDERED EX-PARTE, REASON. — Section 1, Rule 19 of the Rules of Court which states that where an answer "admits the material allegations of the adverse party’s pleading, the court may, on motion of that party, direct judgment on such pleading’, does not state whether the motion for judgment on the pleading may be considered ex-parte or only after notice of hearing served on the adverse party. A motion for a judgment on the pleadings, where the answer admits all the material averments of the complaint, as in the present case, is one that may be considered ex-parte because, upon the particular facts thus presented and laid before the court, the plaintiff is entitled to the judgment.

4. ID.; ID.; ID.; A FINAL JUDGMENT HENCE APPEALABLE. — At any rate, the questioned judgment on the pleadings is a final judgment; hence, it is appealable. Petitioner therefore could have appealed from the aforesaid judgment, but she did not. Having failed to appeal from the said judgment, she may not avail of the writ of certiorari to offset the adverse effect of her omission.

5. ID.; ID.; MOTIONS; PURPOSE OF LAW IN REQUIRING FILING THEREOF AT LEAST THREE DAYS BEFORE HEARING THEREOF, CITED; CASE AT BAR. — The purpose of the law in requiring the filing of motions, at least three (3) days before the hearing thereof, is to avoid surprises upon the opposite party and to give the latter time to study and meet the arguments of the movant. This purpose has been sufficiently complied with, the petitioner having filed an opposition to the said motion.

D E C I S I O N

PADILLA, J.:

This is a petition for certiorari, mandamus and prohibition to annul and set aside the judgment on the pleadings, dated 26 January 1976, rendered by the respondent Judge in Civil Case No. Q-20350 as well as his order dated 14 April 1976 denying the petitioner’s motion for reconsideration, and to compel the said respondent Judge to allow her to, present evidence.

The record discloses the following facts:chanrob1es virtual 1aw library

Petitioner Irene Dino is the registered owner of a parcel of land together with all the improvements thereon, situated at No. 94 West Kaunlaran Street, Philamlife Homes, Quezon City, covered by Transfer Certificate of Title No. 140987 issued by the Register of Deeds of Quezon City.

Private respondent Francisco L. Ong is the adverse claimant of the said parcel of land, having filed an Affidavit of Adverse Claim with the Register of Deeds of Quezon City, as evidenced by Entry No. 5608 on the said TCT No. 140987.

On 26 April 1974, private respondent executed a document entitled "AFFIDAVIT AND MEMORANDUM OF QUITCLAIM," 1 wherein he waived and renounced all his claims, rights and credits over and against the aforesaid parcel of land, the pertinent part of which reads as follows:jgc:chanrobles.com.ph

"2. That for and in consideration of the sum of NINETY THOUSAND PESOS, payable as follows:chanrob1es virtual 1aw library

‘(a) Downpayment of FORTY THOUSAND PESOS (P40,000.00) on or before February 15, 1974, receipt of which (sic) hereby acknowledged; and the future sums covered by postdated checks in denominations of:chanrob1es virtual 1aw library

‘(b) TEN THOUSAND PESOS (P10,000.00) payable or redeemable on or before April 15, 1974; and,

‘(c) EIGHT THOUSAND PESOS (P10,000.00) (sic) EACH payable or redeemable on or before the 15th of June, August, October, December of 1974 and February of 1975, respectively, and for a total of FORTY THOUSAND PESOS (P40,000.00),

I hereby waive and renounce forever and in a manner absolute all my claims, rights and credits over and against the aforesaid parcel of land covered by Transfer Certificate of Title No. 140987 and likewise release the registered owner, IRENE DINO, her heirs, assigns, or representatives, from all obligations including those credits (sic) claimant;

"(3) That it is the essence of this Affidavit and Memorandum of Quitclaim that should said IRENE DINO fail or refuse to comply with the payments stipulated about (sic) or default in any single payment, then the full and existing balance shall become due and demandable without further necessity of demand, and that said IRENE DINO undertakes to pay the further sum of TWENTY THOUSAND PESOS (P20,000.00) by way of liquidated damages;

"(4) That this Affidavit and Memorandum of Quitclaim is executed for the sole purpose of cancelling my adverse claim and the corresponding Entry thereof on Transfer Certificate of Title No. 140987 and for no other purpose contrary to law; as well as the Deed of Sale With Assumption of Mortgage dated September 21, 1970."cralaw virtua1aw library

Apparently, petitioner failed to comply with her obligations under the aforestated document, for on 20 March 1975, private respondent filed with the Court of First Instance of Rizal, Quezon City, Branch XXI, a complaint 2 against the petitioner for breach of contract and damages, docketed therein as Civil Case No. Q-20350, alleging inter alia:jgc:chanrobles.com.ph

"3. That, during the period from June 21, 1974 to February 21, 1975, Defendant issued in favor of the Plaintiff herein, Philippine Commercial and Industrial Bank (PCIB) — Greenhills Branch — Checks Nos. 14872 to 14876, inclusive, each in the amount of P8,000.00, all of which were dishonored by the drawee bank; the first two, for having been ‘drawn against insufficient funds,’ and the last three thereof, for ‘account closed’;

"4. That the aforementioned checks were drawn by the Defendant in payment to the Plaintiff of the remaining P40,00.00 balance on a total amount of P90,000.00 which Defendant undertook to pay the Plaintiff in consideration on the latter’s executing the AFFIDAVIT AND MEMORANDUM OF QUITCLAIM (contents of which are self-explanatory) dated February 26, 1974, a xerox copy of which is hereto attached as ANNEX ‘A’ and made an integral part hereof;

"5. That Paragraph 3 thereof, to which Defendant conformed and accepted, clearly states:chanrob1es virtual 1aw library

‘3. That it is the essence of this Affidavit and Memorandum of Quitclaim that should said IRENE DINO fail or refuse to comply with the payments stipulated above or defaulted (sic) in any single payment, then the full and existing balance shall become due and demandable without further necessity of demand, and that said IRENE DINO undertakes to pay the further sum of TWENTY THOUSAND PESOS (P20,000.00) by way of liquidated damages;

"6. That when Defendant issued the checks mentioned in Par. 3 of this Complaint, she was aware that she did not have sufficient funds with the drawee bank and had already closed her account with the bank when the last three checks were presented for payment;

"7. That, in view thereof, the ‘full and existing balance’ of Defendant’s obligation to the Plaintiff, which now stands at P32,000.00 (one of the five dishonored checks having been replaced with one good check), is now ‘due and demandable without further necessity of demand,’ and Defendant is further obligated to pay the Plaintiff the amount of P20,000.00 by way of liquidated damages;

"8. That, despite repeated demands by Plaintiff on the Defendant, the latter has failed and still continues to fail to pay the P52,000.00 due to the Plaintiff, in view of which Plaintiff was constrained to file this case in Court to protect his rights and was thus forced to engage the services of counsel and to defray the costs of this suit."cralaw virtua1aw library

In her answer, 3 petitioner alleged:jgc:chanrobles.com.ph

"2. That she admits the allegations contained in paragraph 3 of the complaint insofar only as the issuance of check Nos. 14872 to 14876 of the PCIB and that they were at P8,000.00 each are concerned, but specifically denies the rest, the truth being that not all of the said checks were dishonored by the bank, but only four (4) and also that the original agreement of the parties as to the payment of the said checks had already been novated and disregarded by the parties after the issuance of the said checks and after the Affidavit and Memorandum of Quitclaim dated February 26, 1974, had been signed and executed by the parties, considering the fact that plaintiff agreed to the request of the defendant not to deposit the said checks but wait for sometime to pay the said amount of P40,000.00 in one lump sum, that as a matter of fact, defendant (sic) deposited the said checks long, long after the supposed date of issuance of the same.

"3. That she admits the allegations contained in paragraph 3 of the complaint subject to the allegations contained in the next preceding paragraph.

"4. That she admits the reproduction of No. 3 of the Affidavit and Memorandum of Quitclaim insofar only as they are consistent with the contents of paragraph 3 of the said document and also subject to the allegations contained in paragraph 2 above.

"5. That she specifically denies the allegations contained in the paragraph 6 of the complaint, the truth of the matter being that when said checks were issued, they were postdated and plaintiff knew for a fact they did not have sufficient funds, but plaintiff just the same accepted them subject to the conditions of availability of funds by the plaintiff (sic). In other words said checks were issued only to guarantee the payment of the P40,000.00 but not as payment itself, that is why plaintiff as a matter of fact agreed not to deposit the said checks until after further notice from the defendant, as alleged in paragraph 2 above.

"6. That she admits that the outstanding balance due the plaintiff is P32,000.00 as alleged in paragraph 2 hereof, but denies specifically that they are now ‘due and demandable without further necessity of demand’, the truth of the matter being that said agreement was already novated and voided as alleged in paragraph 2 above. (Par. 7, comp)

"7. That she specifically denies the allegations contained in paragraph 8 of the complaint the truth of the matter being those contained in paragraph 2 above."cralaw virtua1aw library

Private respondent (as plaintiff) filed a reply, 4 alleging that petitioner should be declared in default for having filed her answer on 1 September 1975, or two (2) days beyond the extended period, or in the alternative, that a judgment on the pleadings be rendered at the pre-trial, for the reason that the petitioner virtually admitted the material averments of the complaint, having failed to deny under oath the genuineness and due execution of the Affidavit and Memorandum of Quitclaim, as required by Sec. 8 of Rule 8 of the Rules of Court, and that petitioner admitted in par. 6 of her answer that the outstanding balance due to him (private respondent) is P32,000.00, which negates her gratuitous allegation that the said Affidavit and Memorandum of Quitclaim was novated or voided.

During the pre-trial conference, petitioner through counsel, offered to pay her obligations by monthly installments but the same was unacceptable to the private respondent; hence, the pre-trial conference was considered terminated. Thereafter, private respondent’s counsel manifested in open court, and without objection on the part of petitioner’s counsel, that he was submitting for resolution by the court his alternative motions to declare petitioner in default or for a judgment on the pleadings. Likewise, in open court, respondent judge denied the private respondent’s motion to declare petitioner in default but made it clear that he was considering the alternative motion for a judgment on the pleadings, and gave petitioner sufficient time to file a responsive pleading or opposition to the said motion. 5 Petitioner filed an opposition 6 thereto, dated 22 November 1975, alleging that there is no room for a judgment on the pleadings as her answer to the complaint tendered an issue, and that the private respondent’s reply is, in fact, a motion to declare petitioner in default or for a judgment on the pleadings, and since said motion does not contain a notice of hearing, the same is nothing but a useless piece of paper.

On 26 January 1976, respondent Judge rendered the questioned judgment on the pleadings, 7 the dispositive part of which reads:jgc:chanrobles.com.ph

"WHEREFORE, judgment on the pleadings is hereby rendered in favor of the plaintiff, ordering the defendant to pay him the balance of P32,000.00 plus liquidated damages of P20,000.00, and cost of suit." 8

Petitioner moved to reconsider, 9 which the private respondent opposed. 10 On 14 April 1976, respondent Judge issued an order 11 denying the petitioner’s motion for reconsideration.

Hence, petitioner filed the instant petition, claiming that respondent Judge acted in excess of his jurisdiction or with grave abuse of discretion in rendering the judgment on the pleadings and in issuing the order denying her motion for reconsideration, and that she has no remedy nor any other plain, speedy and adequate remedy in the course of law except through the present petition.

Petitioner maintains that her answer to the complaint tendered an issue, as it did not only deny the material allegations contained therein but it also set up special as well as affirmative defenses. Hence, she argues, there is no room for a judgment on the pleadings. 12

The petitioner’s contention is untenable. Her defense that the original agreement of the parties had already been novated and disregarded after the issuance of the checks mentioned in private respondent’s complaint and after the private respondent had executed and signed the Affidavit and Memorandum of Quitclaim, 13 is a sham and false defense and did not tender an issue that would require a hearing for the reception of evidence. It is a mere device or scheme to avoid or delay the immediate payment of petitioner’s obligation to the private respondent under the Affidavit and Memorandum of Quitclaim. Thus, as aptly observed by the court a quo —

"A novation under the rules of civil law, where the term has been introduced into the modern nomenclature of our common law jurisprudence, was a mode of extinguishing one obligation by another; the substitution, not of a new paper or rate but of a new obligation in lieu of an old one, the effect of which was to pay, dissolve or otherwise discharge it (ibid).

"It will be noted that the original contract (Annex "A") was not actually altered or changed. The defendant, as a matter of fact, and for all intents and purposes, had issued checks in payment of her obligation as prestated by the contract but asserts that the same were issued only to guarantee but not as a payment in itself, but it is not denying the fact that one of the five checks were cashed, thus making the balance of only P32,000.00, that is without mention the liquidated damage of P20,000.00. The ambivalent attitude of the defendant could only mean or should be construed as a mere pretense to avoid an immediate demand for the payment of her obligation.

"In order that an obligation may be extinguished by another which substitutes the same, it is imperative that it be so declared in unequivocal terms, or that the old and new obligation be on every point incompatible with each other (Art. 1292-New Civil Code.)

"In the present case the contract referred to did not expressly extinguish the obligation existing in said affidavit and memorandum of quitclaim. On the contrary, it expressly recognized the obligation between the parties and expressly provide a method by which the same shall be extinguished, which method was expressly provided in the aforementioned contract, by means of periodical payments.

"For all the foregoing considerations, the court believes, and so holds, that the aforementioned contract has never been altered, charged or novated. For what the herein defendant actually did is not absolutely incompatible with the prestation of the existing contract but rather she expressly ratified such obligation through the issuance of postdated checks, some of which were cashed and others not for reason of insufficiency of funds or ‘account closed.’" 14

Besides, the private respondent’s cause of action is based on the "Affidavit and Memorandum of Quitclaim," the substance of which was properly alleged in the complaint, and copies thereof, were attached thereto. Section 8, Rule 8 of the Rules of Court provides that when an action is founded upon a written instrument, copied in or attached to the corresponding pleading, the genuineness and due execution of the instrument shall be deemed admitted unless the adverse party, under oath, specifically denies them. In the present case, the petitioner is deemed to have admitted the genuineness and due execution of the "Affidavit and Memorandum of Quitclaim" for her failure to deny the same under oath; consequently, the judgment on the pleadings rendered by respondent Judge was proper. 15

In her memorandum, 16 petitioner further contends that the private respondent’s reply should not have been treated as a motion for a judgment on the pleadings for non-compliance with the three-day notice rule and for lack of a notice of hearing. 17

Again, the petitioner’s contention is devoid of merit. Section 1, Rule 19 of the Rules of Court which states that where an answer "admits the material allegations of the adverse party’s pleading, the court may, on motion of that party, direct judgment on such pleading’, does not state whether the motion for judgment on the pleading may be considered ex-parte or only after notice of hearing served on the adverse party. A motion for a judgment on the pleadings, where the answer admits all the material averments of the complaint, as in the present case, is one that may be considered ex-parte because, upon the particular facts thus presented and laid before the court, the plaintiff is entitled to the judgment. 18 Besides, the purpose of the law in requiring the filing of motions, at least three (3) days before the hearing thereof, is to avoid surprises upon the opposite party and to give the latter time to study and meet the arguments of the movant. 19 This purpose has been sufficiently complied with, the petitioner having filed an opposition to the said motion.

At any rate, the questioned judgment on the pleadings is a final judgment; hence, it is appealable. Petitioner therefore could have appealed from the aforesaid judgment, but she did not. Having failed to appeal from the said judgment, she may not avail of the writ of certiorari to offset the adverse effect of her omission. 20

WHEREFORE, the petition is this case is DISMISSED with costs against petitioner.

SO ORDERED.

Melencio-Herrera (Chairman), Paras, Sarmiento and Regalado, JJ., concur.

Endnotes:

1. Rollo, p. 71.

2. Id., p. 27.

3. Id., p. 30.

4. Rollo, p. 33.

5. Id., p. 64.

6. Rollo, p. 42.

7. Id., p. 42.

8. Id., p. 49.

9. Id., p. 50.

10. Id., p. 61.

11. Id., p. 61.

12. Sec. 1, Rule 19 of the Rules of Court provides:jgc:chanrobles.com.ph

"Where an answer fails to tender an issue, or otherwise admits the material allegations of the adverse party’s pleading, the court may, on motion of that party, direct judgment on such pleading. . . ."cralaw virtua1aw library

13. Answer, pars. 2 and 6, supra.

14. Rollo, pp. 47-49.

15. Young v. Young, 124 SCRA 897-898.

16. Rollo, pp. 96, 111-112.

17. Sections 4 and 5, Rule 15 of the Rules of Court.

18. Cruz v. Oppen. Inc., 22 SCRA 608, 614.

19. J.M. Tuazon & Co., Inc. v. Magdangal, 4 SCRA 84, 86.

20. Tolentino vs Escalona, 26 SCRA 613, 617.

G.R. No. 54216 July 19, 1989 - PHILIPPINE AMERICAN LIFE INSURANCE COMPANY v. GREGORIO G. PINEDA

2012-11-11T16:53:05+00:00

SECOND DIVISION

[G.R. No. 54216. July 19, 1989.]

THE PHILIPPINE AMERICAN LIFE INSURANCE COMPANY, Petitioner, v. HONORABLE GREGORIO G. PINEDA, in his capacity as Judge of the Court of First Instance of Rizal, and RODOLFO C. DIMAYUGA, Respondents.

D E C I S I O N

PARAS, J.:

Challenged before Us in this petition for review on certiorari are the Orders of the respondent Judge dated March 19, 1980 and June 10, 1980 granting the prayer in the petition in Sp. Proc. No. 9210 and denying petitioner’s Motion for Reconsideration, respectively.

The undisputed facts are as follows:chanrob1es virtual 1aw library

On January 15, 1968, private respondent procured an ordinary life insurance policy from the petitioner company and designated his wife and children as irrevocable beneficiaries of said policy.

Under date February 22, 1980 private respondent filed a petition which was docketed as Civil Case No. 9210 of the then Court of First Instance of Rizal to amend the designation of the beneficiaries in his life policy from irrevocable to revocable.

Petitioner, on March 10, 1980 filed an Urgent Motion to Reset Hearing. Also on the same date, petitioner filed its Comment and/or Opposition to Petition.

When the petition was called for hearing on March 19, 1980, the respondent Judge Gregorio G. Pineda, presiding Judge of the then Court of First Instance of Rizal, Pasig Branch XXI, denied petitioner’s Urgent Motion, thus allowing the private respondent to adduce evidence, the consequence of which was the issuance of the questioned Order granting the petition.

Petitioner promptly filed a Motion for Reconsideration but the same was denied in an Order June 10, 1980. Hence, this petition raising the following issues for resolution:chanrob1es virtual 1aw library

WHETHER OR NOT THE DESIGNATION OF THE IRREVOCABLE BENEFICIARIES COULD BE CHANGED OR AMENDED WITHOUT THE CONSENT OF ALL THE IRREVOCABLE BENEFICIARIES.

WHETHER OR NOT THE IRREVOCABLE BENEFICIARIES HEREIN, ONE OF WHOM IS ALREADY DECEASED WHILE THE OTHERS ARE ALL MINORS, COULD VALIDLY GIVE CONSENT TO THE CHANGE OR AMENDMENT IN THE DESIGNATION OF THE IRREVOCABLE BENEFICIARIES.

We are of the opinion that his Honor, the respondent Judge, was in error in issuing the questioned Orders.

Needless to say, the applicable law in the instant case is the Insurance Act, otherwise known as Act No. 2427 as amended, the policy having been procured in 1968. Under the said law, the beneficiary designated in a life insurance contract cannot be changed without the consent of the beneficiary because he has a vested interest in the policy (Gercio v. Sun Life Ins. Co. of Canada, 48 Phil. 53; Go v. Redfern and the International Assurance Co., Ltd., 72 Phil. 71).

In this regard, it is worth noting that the Beneficiary Designation Indorsement in the policy which forms part of Policy Number 0794461 in the name of Rodolfo Cailles Dimayuga states that the designation of the beneficiaries is irrevocable (Annex "A" of Petition in Sp. Proc. No. 9210, Annex "C" of the Petition for Review on Certiorari), to wit:chanrob1es virtual 1aw library

It is hereby understood and agreed that, notwithstanding the provisions of this policy to the contrary, inasmuch as the designation of the primary/contingent beneficiary/beneficiaries in this Policy has been made without reserving the right to change said beneficiary/beneficiaries, such designation may not be surrendered to the Company, released or assigned; and no right or privilege under the Policy may be exercised, or agreement made with the Company to any change in or amendment to the Policy, without the consent of the said beneficiary/beneficiaries. (Petitioner’s Memorandum, p. 72, Rollo)

Be it noted that the foregoing is a fact which the private respondent did not bother to disprove.

Inevitably therefore, based on the aforequoted provision of the contract, not to mention the law then applicable, it is only with the consent of all the beneficiaries that any change or amendment in the policy concerning the irrevocable beneficiaries may be legally and validly effected. Both the law and the policy do not provide for any other exception, thus, abrogating the contention of the private respondent that said designation can be amended if the Court finds a just, reasonable ground to do so.

Similarly, the alleged acquiescence of the six (6) children beneficiaries of the policy (the beneficiary-wife predeceased the insured) cannot be considered an effective ratification to the change of the beneficiaries from irrevocable to revocable. Indubitable is the fact that all the six (6) children named as beneficiaries were minors at the time, ** for which reason, they could not validly give their consent. Neither could they act through their father-insured since their interests are quite divergent from one another. In point is an excerpt from the Notes and Cases on Insurance Law by Campos and Campos, 1960, reading —

"The insured . . . can do nothing to divest the beneficiary of his rights without his consent. He cannot assign his policy, nor even take its cash surrender value without the consent of the beneficiary. Neither can the insured’s creditors seize the policy or any right thereunder. The insured may not even add another beneficiary because by doing so, he diminishes the amount which the beneficiary may recover and this he cannot do without the beneficiary’s consent."cralaw virtua1aw library

Therefore, the parent-insured cannot exercise rights and/or privileges pertaining to the insurance contract, for otherwise, the vested rights of the irrevocable beneficiaries would be rendered inconsequential.

Of equal importance is the well-settled rule that the contract between the parties is the law binding on both of them and for so many times, this court has consistently issued pronouncements upholding the validity and effectivity of contracts. Where there is nothing in the contract which is contrary to law, good morals, good customs, public policy or public order the validity of the contract must be sustained. Likewise, contracts which are the private laws of the contracting parties should be fulfilled according to the literal sense of their stipulations, if their terms are clear and leave no room for doubt as to the intention of the contracting parties, for contracts are obligatory, no matter in what form they may be, whenever the essential requisites for their validity are present (Phoenix Assurance Co., Ltd. v. United States Lines, 22 SCRA 675, Phil. American General Insurance Co., Inc. v. Mutuc, 61 SCRA 22.)

In the recent case of Francisco Herrera v. Petrophil Corporation, 146 SCRA 385, this Court ruled that:jgc:chanrobles.com.ph

". . . it is settled that the parties may establish such stipulations, clauses, terms, and conditions as they may want to include; and as long as such agreements are not contrary to law, good morals, good customs, public policy or public order, they shall have the force of law between them."cralaw virtua1aw library

Undeniably, the contract in the case at bar, contains the indispensable elements for its validity and does not in any way violate the law, morals, customs, orders, etc. leaving no reason for Us to deny sanction thereto.

Finally, the fact that the contract of insurance does not contain a contingency when the change in the designation of beneficiaries could be validly effected means that it was never within the contemplation of the parties. The lower court, in gratuitously providing for such contingency, made a new contract for them, a proceeding which we cannot tolerate. Ergo, We cannot help but conclude that the lower court acted in excess of its authority when it issued the Order dated March 19, 1980 amending the designation of the beneficiaries from "irrevocable" to "revocable" over the disapprobation of the petitioner insurance company.

WHEREFORE, premises considered, the questioned Orders of the respondent Judge are hereby nullified and set aside.

SO ORDERED.

Melencio-Herrera (Chairman), Sarmiento and Regalado, JJ., concur.

Padilla, J., No part in the deliberations.

Endnotes:

** Annex "C", Petition, p. 18, Rollo.

G.R. No. 64935 July 19, 1989 - PEOPLE OF THE PHIL. v. CHARLIE R. REPE, ET AL.

2012-11-11T16:53:05+00:00

SECOND DIVISION

[G.R. No. 64935. July 19, 1989.]

THE PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. CHARLIE REPE y REVECENCIO alias FELICIANO RECAFORTE, JOVENCIO RONTALE alias HERNAN RONTALE y REPE, ROMEO RONTALE y REPE, ROGELIO DAGUMBOY y BALICOL, ALFREDO DAGUMBOY Y BALICOL, JORGE SIGNO y BALICOL and JOEL DOMINGO y SILVERIO, Defendants.

David A. Ponce de Leon co-counsel for Alfredo Dagumboy.

Pablo Ebol co-counsel for C. Repe.

Avelino M. Sebastian, Jr. for defendants Dagumboy, Signo and Domingo.

SYLLABUS

1. CONSTITUTIONAL LAW; BILL OF RIGHTS; RIGHT OF ACCUSED DURING CUSTODIAL INVESTIGATION; NON-COMPLIANCE WITH REQUIREMENT RENDERS EXTRAJUDICIAL CONFESSION INADMISSIBLE. — The rule is that, when an investigation conducted upon an accused did not conform to the requirements set forth in People v. Galit, the extrajudicial confession taken therein is inadmissible.

2. ID.; ID.; ID.; ID.; COMPLIANCE MUST NOT BE SUPERFICIAL AND A MECHANICAL ACT; INVESTIGATOR MUST EXPLAIN RIGHT. — It is clear from the records of this case that the way the investigating officer apprised the appellants of their constitutional rights, was pro forma and perfunctory. The three (3) extrajudicial statements in issue appear to have contained the same afore-quoted prefatory statements, which indicate that the "appraisal" made was a purely mechanical act. In People v. Newman and Tolentino, this Court held — The ‘informing’ done by the police in the case at bar was nothing more than a superficial and mechanical act, performed not so much to attain the objectives of the fundamental law, as to give a semblance of compliance therewith. The right of a person under interrogation to be informed of his rights to remain silent and to counsel, implies a correlative obligation on the part of the police investigator to explain and contemplates an effective communication that results in an understanding of what is conveyed. Short of this, there is a denial of the right, as it cannot truly be said that the accused has been `informed’ of his rights."cralaw virtua1aw library

3. ID.; ID.; ID.; CONFESSION EVEN IF "GOSPEL TRUTH" AND VOLUNTARILY GIVEN IS INADMISSIBLE IF MADE WITHOUT COUNSEL’S ASSISTANCE. — While it is true that the trial court observed that appellants’ extrajudicial confessions are interlocking and replete with many minor details that could have been known only to the appellants, and hence indicate that they were voluntarily given, still, one cannot be unmindful of the equally-settled rule that even if the confession of the accused is "gospel truth", if it was made without the assistance of counsel, it is inadmissible in evidence regardless of the absence of coercion or even if it had been voluntarily given.

4. REMEDIAL LAW; EVIDENCE; ALIBI; A WEAK DEFENSE AND CANNOT PREVAIL OVER POSITIVE IDENTIFICATION OF ACCUSED. — Alibi is, as a rule, a weak defense. It cannot, in this case, overthrow witnesses Fabrigas’ and Jardin’s positive identification of the said appellants as the men who came to their nipa hut on that fateful early morning of 9 June 1976.

5. CRIMINAL LAW; CONSPIRACY; ESTABLISHED IN CASE AT BAR. — Apart from the testimony of the spouses Fabrigas and Rosita Jardin as to the arrival at their nipa hut in the early morning of 9 June 1976, of the three (3) appellants herein, with victim Margarita being held by the hand by Alfredo, several other prosecution witnesses testified as to the acts of the other persons charged in the instant case, before, during and after the commission of the crime. As to Charlie Repe, he admitted in his testimony that before the crime occurred, his three (3) friends, namely, Rogelio Dagumboy, Herman Rontale and Romeo Rontale, who are co-accused with the appellants, came to his house and invited him for a drinking spree; that the said spree lasted until 9:00 o’ clock in the evening, during which his three (3) friends invited him to buy pig that night at Dipla. The totality of the foregoing facts and circumstances establish that conspiracy existed in the case at bar.

6. ID.; ID.; GUILT OF ONE IS THE GUILT OF ALL. — There being conspiracy and the settled rule being that, in conspiracy, the guilt of one is the guilt of all, we find all the three (3) appellants herein guilty of the crime of robbery with homicide, with the aggravating circumstances of abuse of superior strength and use of motorized vehicle.

7. ID.; AGGRAVATING CIRCUMSTANCES; EVIDENT PREMEDITATION; NOT APPRECIATED ABSENT PROOF HOW AND WHEN THE PLAN WAS HATCHED. — When conspiracy is merely inferred from the acts of the accused in the perpetration of the crime, evident premeditation may not be appreciated in the absence of proof as to how and when the plan to kill the victim was hatched, or what period of time elapsed before it was carried out.

8. ID.; ID.; TREACHERY; MUST BE ESTABLISHED BY POSITIVE EVIDENCE. — As regards treachery, we also do not see any reason for appreciating this aggravating circumstance. It must be noted that, in the instant case, there is no direct evidence pointing to the actual commission of the crime charged. Not one of the prosecution witnesses saw who killed the robbed couple. The settled rule is that treachery must be established by positive evidence in order to be appreciated. No treachery may be said to have attended the commission of the offense, as it was not clearly proved with convincing and positive evidence.

9. ID.; ID.; ABUSE OF SUPERIOR STRENGTH AND USE OF MOTORIZED VEHICLES APPRECIATED IN CASE AT BAR. — As to the aggravating circumstances of abuse of superior strength and use of motorized watercraft, the records of the case clearly show the presence of these aggravating circumstances. Certainly, the seven (7) persons charged in this case, including herein three (3) appellants, being armed with weapons, surely and deliberately used excessive force on the persons of their helpless victims. Further, all the accused, including the three (3) appellants, used a motorized banca/watercraft to facilitate the commission of the crime.

D E C I S I O N

PADILLA, J.:

This case is before the Court on automatic review of the decision ** of the Regional Trial Court of Palawan, Fourth Judicial Region, Branch XLVII, in Criminal Case No. 2021, finding all the four (4) accused, namely: Charlie Repe, Alfredo Dagumboy, Jorge Signo and Joel Domingo guilty beyond reasonable doubt of the crime of robbery with homicide and sentencing them to suffer the maximum penalty of death, to indemnify jointly and severally the heirs of Sofronio Parangue and Margarita Parangue in the sum of P5,450.00, the amount stolen, and in the further sum of P24,000.00 for the death of said spouses, and to pay costs.chanroblesvirtualawlibrary

Under an information dated 10 October 1977, 1 filed with the Court of First Instance of Palawan, the following accused, namely: Charlie Repe y Revencio alias Feliciano Recaforte, Jovencio Rontale alias Hernan Rontale y Repe, Romeo Rontale y Repe, Rogelio Dagumboy y Balicol, Alfredo Dagumboy y Balicol, Jorge Signo y Balicol and Joel Domingo y Silverio were charged with the crime of Robbery in Band with Double Homicide. The Information docketed as Criminal Case No. 2021 alleged:jgc:chanrobles.com.ph

"That on or about the 9th day of June, 1976, in Sitio Marilao, Barrio of Dipla, Municipality of Taytay, Province of Palawan, Philippines, and within the jurisdiction of this Honorable Court, the said accused, conspiring, confederating together and mutually helping one another, and armed with guns and other deadly weapons and with the use of a motor banca, did then and there willfully, unlawfully and feloniously and by means of force, violence and intimidation on the persons, and with intent of gain and against the consent of the owners thereof SOFRONIO and MARGARITA PARANGUE, took (sic) and carried (sic) away the following pieces of personal property, to wit: two (2) sacks of rice, one (1) fish net and cash money amounting to THIRTY THOUSAND PESOS (P30,000.00) Philippine Currency to the damage and prejudice of the owner thereof in the total sum of THIRTY FIVE THOUSAND PESOS (P35,000.00) that on the occasion of the said robbery and for the purpose of enabling them to take steal and carry away the articles above-mentioned the above-named accused, in pursuance of their conspiracy, did then and there willfully, unlawfully and feloniously and with evident premeditation and taking advantage of their superior number and strength and with intent to kill, treacherously attack, assault, stab and use personal violence upon Margarita and Sofronio Parangue thereby inflicting upon them multiple wounds on different vital parts of their bodies which caused their instantaneous death.

"CONTRARY TO LAW and with the aggravating circumstances of alevosia, evident premeditation, night-time, use of motorized water craft, use of superior number and strength and penalized under Article 294 in relation with (sic) Article 296 of the Revised Penal Code."cralaw virtua1aw library

Upon arraignment on 11 November 1977, the four (4) accused who were arrested, namely: Charlie Repe, Alfredo Dagumboy, Jorge Signo and Joel Domingo pleaded not guilty to the crime charged. The trial proceeded against said four (4) accused, while the other three (3) accused, namely: Jovencio Rontale, Romeo Rontale and Rogelio Dagumboy have remained at large to this day.

The evidence for the prosecution, as seen by the court a quo, is as follows:jgc:chanrobles.com.ph

"In the evening of June 8, 1976, the accused Charlie Repe y Revecencio alias Feliciano Recaforte, Alfredo Dagumboy y Balicol, Jorge Signo y Balicol, Joel Domingo y Silverio, Jovencio Rontale alias Herman Rontale y Repe, Romeo Rontale y Repe, Rogelio Dagumboy y Balicol, had a drinking spree ("inuman") in the house of Jovencio (alias Herman) Rontale in Barrio Sandoval, Taytay, Palawan, where they planned the robbery in question, that is to rob the spouses Sofronio and Margarita Parangue of Barrio Dipla, same municipality of Taytay, Palawan. Alfredo Dagumboy was to operate (makinista) the motorized banca (pumpboat) they will use in going to the house of the aforesaid spouses, which Jovencio borrowed from its owner, Pablo Repe.

"As previously planned, they proceeded to the house of the Parangues, boarding the motorized banca (pumpboat) at Binyangan, Alfredo being the makinista. On reaching Barrio Dipla, Taytay, Palawan, Romeo Rontale, Jovencio (alias Herman) Rontale, Jorge Signo, Joel Domingo and Alfredo Dagumboy got down from the pumpboat leaving Charlie Repe and Rogelio Dagumboy behind in the pumpboat. Jovencio had a sack with him. Along the way, Jovencio got from inside of the sack a .22 caliber gun which he gave to Alfredo. Romeo was armed with a .25 caliber gun and Joel with an air gun. When they reached the house of the spouses, Joel stayed below and Alfredo near the door upstairs, both to act as "lookouts", while Jovencio, Jorge, and Romeo entered the house. Romeo held the hair of the old woman Margarita who opened the door and pointed his gun at her with Jovencio and Jorge following behind them. Inside the house, Jovencio held the old man, tied his hands and asked him where their money was. Margarita got their money and gave it to Jovencio who asked where their other money was. Margarita told him that it was with their grandchild. On hearing this, Jovencio told Alfredo and Romeo to bring the old man to their pumpboat and they will proceed to the house of the grandchild of the spouses. Upon reaching the pumpboat, Alfredo who carried the sack containing the money handed the same to Jovencio while Romeo who brought the old man along, turned him over to Rogelio who placed the old man at one end of the pumpboat.

"Alfredo and Romeo returned to the house of the spouses and joined their companions who all proceeded to the house of the mentioned grandchild of the spouses about half a kilometer away, the same barrio of Dipla. It turned out that the spouses had no money there. This enraged Romeo, who right then and there, stabbed the old woman who died as a result thereof. They went back to the house of the spouses and ransacked the place and were able to get a bamboo piggy bank full with loose change and two (2) sacks of rice which Jovencio and Romeo carried (a sack each) to the pumpboat.

"When they reached the pumpboat, Rogelio who learned that the old woman was already dead, stabbed the old man Sofronio several times and then he threw him overboard." 2

On the other hand, the version of the defense, as summarized by the appellants, reads:jgc:chanrobles.com.ph

". . . the evidence for the accused appellants, Domingo and Signo showed that on 9 June 1976, the day the alleged crime was committed, Domingo and Signo were not at Sto. Marilao, Barrio Dipla, Taytay, Palawan the place where the crime was committed, but were at Sitio Topacao, Barrio Silangga, Taytay, Palawan making charcoal together with Anecito de la Cruz and Placido Gregorio. This was testified to by Anecito de la Cruz and Placido Gregorio and corroborated by the testimonies of accused-appellants Domingo and Signo. Subsequently, the two accused were later arrested and jailed. While in jail, Accused-appellants Domingo and Signo were repeatedly mauled by one Patrolman Adolfo Jaymis who, against their will, forced them to sign separate extra-judicial confessions which they later swore to before Municipal Trial Court Judge Cosme Martinez.

"As to accused-appellant Alfredo Dagumboy, evidence shows that he was not at Barrio Dipla when the alleged crime took place, as he was then residing at the house of Prudencio Bering at Barrio Topacao, where he was working as a fisherman. The latter place was several hours away by boat from the former. Furthermore, the records show that when Alfredo Dagumboy was arrested and jailed, he was also mauled repeatedly by Patrolman Adolfo Jaymis who, against his will, forced him to sign an extra-judicial confession which was subsequently sworn to by him before Municipal Trial Court Judge Cosme Martinez. 3

After trial, a decision was rendered on 27 May 1983 by the court a quo, convicting the herein four (4) accused-appellants, the dispositive portion of which reads:jgc:chanrobles.com.ph

"WHEREFORE, finding all the four (4) accused guilty beyond reasonable doubt of the crime of robbery with homicide as charged in the information and taking into consideration the aggravating circumstances stated above, the Court sentences said accused Charlie Repe y Revecencio, Alfredo Dagumboy y Balicol, Jorge Signo y Balicol and Joel Domingo y Silverio to suffer the maximum penalty of death, to indemnify jointly and severally the heirs of Sofronio Parangue and Margarita Parangue in the sum of P5,450.00, the amount stolen, and the sum of P24,000.00 for the death of Sofronio and Margarita Parangue and to pay cost." 4

Subsequently, on motion of accused-appellant Charlie Repe, this Court resolved to grant said Charlie Repe’s withdrawal of appeal. 5 Consequently, the judgment of conviction as to Charlie Repe became final and executory. 6 Hence, this review only as to the remaining three (3) accused-appellants, namely: Alfredo Dagumboy, Jorge Signo and Joel Domingo.

The main argument of the appellants is that their extra-judicial confessions are inadmissible in evidence for they were taken without the appellants having been properly informed of their constitutional rights during their custodial investigation. They principally contend that the waiver of their constitutional rights was inadequate and ineffective for it was made without the assistance of counsel. It is noted that, during the trial, they already assailed the admissibility of the said confessions on the ground that they were extracted through force, intimidation and maltreatment. Their assault against said extrajudicial confessions has persisted in this appeal.

We find merit in the appellants’ contention that the assailed extrajudicial confessions are inadmissible in evidence.

As to appellant Alfredo Dagumboy, his extrajudicial confession starts in this manner —

"PASUBALI : Ginoong Alfredo Dagumboy, ipinagbibigay alam namin sa inyo na kayo’y inuusig tungkol sa isang kasalanan. Pinaaalala namin sa inyo ang magsawalang kibo at magkaroon ng patnubay ng manananggol na sarili ninyong pili. Ito ba ay nauunawaan ninyo?

SAGOT: Opo.

TANONG: Pagkatapos na maipabatid sa inyo and inyong karapatan sa ilalim ng ating bagong Saligang Batas na magsawalang kibo, nais ba ninyong ipagpatuloy ang imbistigasyong ito?

SAGOT: Opo, hindi ko po kailangan ang manananggol sa imbistigasyong ito.

TANONG: Ipinaaalala rin namin sa inyo na anumang salaysay and inyong sasabihin sa imbistigasyong ito ay maaaring gamiting ebidensya laban o panig sa inyo sa alinmang Hukuman dito sa Pilipinas, ito ba ay nauunawaan ninyo?

SAGOT: Opo.

TANONG: Matapos na maipaalam sa inyo and inyong karapatan sa ilalim ng ating Bagong Saligang Batas, Artikulo 4, Seksyon 20, na magsawalang kibo at magkaroon ng sariling manananggol, handa ka na bang magbigay ng isang kusangloob na salaysay?

SAGOT: Opo." 7

As to the extrajudicial confessions of the other two (2) appellants, Joel Domingo and Jorge Signo, the questions and answers appearing therein in regard to apprisal of their constitutional rights, and waiver of such rights, are in the same tenor as that contained in Alfredo Dagomboy’s aforequoted confession. 8 Each of the appellants signed and subscribed his extrajudical confession before the municipal judge at Taytay, Palawan in May 1977.

Looking at said extrajudicial confessions, it appears that the appellants were informed of their right to remain silent and right to counsel, and that they understood such rights. They further affirmed in said confessions that, although they have been informed of such rights, they would voluntarily proceed with the custodial investigation even without the assistance of counsel. Moreover, they affirmed that they were aware that any statement taken from them could be used against them.

However, after a careful examination of the entire records of the case at bar, the Court regrets to say that the appellants were not properly apprised of their constitutional rights before their custodial investigation took place, such that their extrajudicial confessions are inadmissible in evidence.

In People v. Galit, 9 this Court set forth the requirements for investigating officers to follow before and during custodial investigations. Thus: —

"10. This Court, in the case of Morales v. Ponce Enrile, laid down the correct procedure for peace officers to follow when making an arrest and in conducting a custodial investigation, and which We reiterate:chanrob1es virtual 1aw library

‘7. At the time a person is arrested, it shall be the duty of the arresting officer to inform him of the reason for the arrest and he must be shown the warrant of arrest, if any. He shall be informed of his constitutional rights to remain silent and to counsel, and that any statement he might make could be used against him. The person arrested shall have the right to communicate with his lawyer, a relative, or anyone he chooses by the most expedient means — by telephone if possible — or by letter or messenger. It shall be the responsibility of the arresting officer to see to it that this is accomplished. No custodial investigation shall be conducted unless it be in the presence of counsel engaged by the person arrested, by any person on his behalf, or appointed by the court upon petition either of the detainee himself or by anyone on his behalf. The right to counsel may be waived but the waiver shall not be valid unless made with the assistance of counsel. Any statement obtained in violation of the procedure herein laid down, whether exculpatory or inculpatory, in whole or in part, shall be inadmissible in evidence.

The rule, therefore, is that, when an investigation conducted upon an accused did not conform to the requirements set forth in People v. Galit, the extrajudicial confession taken therein is inadmissible. 10

Moreover, it is clear from the records of this case that the way the investigating officer apprised the appellants of their constitutional rights, was pro forma and perfunctory. The three (3) extrajudicial statements in issue appear to have contained the same afore-quoted prefatory statements, which indicate that the "appraisal" made was a purely mechanical act.

In People v. Newman and Tolentino, 11 this Court held —

"It can be gleaned from the record of the case that the advice as to constitutional rights of the accused, given by the investigating officer, was perfunctory and pro-forma, intended obviously to pay lip service to the prescribed norms, through a recitation by rote of the sacramental advice. This stereotyped ‘advice’ appearing in practically all extrajudicial confessions which are later repudiated, has assumed the nature of a ‘legal form’ or model. Its tired, punctilious, fixed and artificially stately style does not create an impression of voluntariness or even understanding on the part of the accused. The showing of a spontaneous, free and unconstrained giving up of a right is missing. In the case at bar, the two (2) extrajudicial statements and waivers carry the same quoted prefatory statement. This, to the mind of the Court, indicates the lack of zeal and initiative on the part of the investigating officers to fully and truly inform the accused of their rights to remain silent and to counsel during the custodial investigation. The ‘informing’ done by the police in the case at bar was nothing more than a superficial and mechanical act, performed not so much to attain the objectives of the fundamental law, as to give a semblance of compliance therewith. The right of a person under interrogation to be informed of his rights to remain silent and to counsel, implies a correlative obligation on the part of the police investigator to explain and contemplates an effective communication that results in an understanding of what is conveyed. Short of this, there is a denial of the right, as it cannot truly be said that the accused has been `informed’ of his rights."cralaw virtua1aw library

While it is true that the trial court observed that appellants’ extrajudicial confessions are interlocking and replete with many minor details that could have been known only to the appellants, and hence indicate that they were voluntarily given, still, one cannot be unmindful of the equally-settled rule that even if the confession of the accused is "gospel truth", if it was made without the assistance of counsel, it is inadmissible in evidence regardless of the absence of coercion or even if it had been voluntarily given. 12

The Court, therefore, rules that the conviction of the appellants cannot be based on the extrajudicial confessions in issue.

Excluded such extrajudicial confessions, the next question is, did the prosecution establish nonetheless the guilt of the appellants beyond reasonable doubt?

It did.

The three (3) prosecution witnesses, namely, the spouses Rosalyn and Nemesio Fabrigas and Rosita Jardin, who is Rosalyn’s sister, positively identified the herein three (3) appellants as participants in the crime charged. They testified that in that early and fateful morning of 9 June 1976, several men with the struggling Margarita Parangue, who was being held by one of them, came to the said witnesses’ nipa hut, asking for the money which the said men believed to be owned by Margarita and safekept in the witnesses’ hut. The same witnesses testified that it was appellant Alfredo Dagumboy who was holding Margarita and who lit the lamp that lighted the hut; that they (witnesses) saw the other (2) appellants outside of the hut, as there was moonlight — Jorge Signo was standing and Joel Domingo was holding an airgun; that thereafter they (the witnesses) jumped out of the hut, left the old woman and the several men behind and sought help; and that later in that same early morning, they saw the dead bloodied body of Margarita Parangue lying on the ground near the hut. 13

Thus, these three (3) prosecution witnesses were able to recognize and positively identified the three (3) appellants as the ones who came to their nipa hut on 9 June 1976; they declared that the lamp inside the nipa hut was lit by the appellant Alfredo himself; that the moon was then shining bright outside the hut where Jorge Signo and Joel Domingo were seen by them standing; and that coupled with these circumstances was the fact that the surrounding area of the nipa hut was clear, there being no other house nor trees planted or shrubs growing around the place that could have obstructed the light thrown by the moon. 14

The defense of the three (3) appellants is alibi. Alfredo Dagumboy testified that prior to 9 June 1976, he, as a fisherman, was at Maruyog-ruyog, Linapacan, Palawan intending to go fishing; that he arrived at Tapacao from Maruyug-ruyog only on 20 June 1976. 15 On the other hand, Joel Domingo and Jorge Signo, in their testimony, stated that the whole day of 9 June 1976, they, as co-workers, were at Tapacao, Silanga, Taytay, Palawan making charcoal. 16 It is noted that, as the records show, Marilao, Dipla, Taytay, Palawan, the place where the crime was committed, is only about seven (7) kilometers from Tapacao. 17

Alibi is, as a rule, a weak defense. It cannot, in this case, overthrow witnesses Fabrigas’ and Jardin’s positive identification of the said appellants as the men who came to their nipa hut on that fateful early morning of 9 June 1976.

Moreover, it is material to note that the appellants together with all the other accused in the case at bar are in one way or another related to each other or at least, known and friends to one another. 18 They are also residents of barrios/barangays Tapacao and Sandoval, both of which are in the municipality of Taytay, Palawan. 19 The residence of the appellants, together with that of their co-accused in this case, and the place of the commission of the crime are all found in one municipality, that is Taytay, Province of Palawan.

All told, the Court finds that the participation and the guilt of the appellants in the crime charged were established by the prosecution with moral certainty and convincing proof.

The trial court found conspiracy in the case at bar. We agree that conspiracy among the seven (7) co-accused, including the appellants herein, has been clearly established by the testimony of the prosecution witnesses and that of co-accused Charlie Repe himself. Apart from the testimony of the spouses Fabrigas and Rosita Jardin as to the arrival at their nipa hut in the early morning of 9 June 1976, of the three (3) appellants herein, with victim Margarita being held by the hand by Alfredo, several other prosecution witnesses testified as to the acts of the other persons charged in the instant case, before, during and after the commission of the crime. These witnesses testified as follows:chanrob1es virtual 1aw library

1. Gregorio Lorena, on separate occasions after the crime occurred, saw Charlie Repe at the "dance" party, with the latter’s wallet full of money bills. 20

2. Apolonio Soriano was invited by Herman Rontale (one of the accused at large) to go to Barrio Dipla to get "fat" pig, which invitation Apolonio rejected as he knew that there was no fat pig in Dipla and that instead, something bad would be done. 21

3. Pablo Repe, the owner of the pumpboat named "Rosanna", and uncle of Charlie Repe, testified that it was Herman Rontale who borrowed the boat on 8 June 1976 and returned it to him on 9 June 1976 in the morning. 22

4. Antonio Hontra saw blood in the middle portion of "Rosanna" on 13 June 1976. 23

5. Ernesto Repe, owner of an airgun testified that Romeo Rontale (another accused at large) borrowed the said gun and returned it on 9 June 1976. 24

As to Charlie Repe, he admitted in his testimony that before the crime occurred, his three (3) friends, namely, Rogelio Dagumboy, Herman Rontale and Romeo Rontale, who are co-accused with the appellants, came to his house and invited him for a drinking spree; that the said spree lasted until 9:00 o’ clock in the evening, during which his three (3) friends invited him to buy pig that night at Dipla.25cralaw:red

The totality of the foregoing facts and circumstances establish that conspiracy existed in the case at bar.

However, we note that the trial court ruled that four (4) aggravating circumstances — treachery, abuse of superior strength, evident premeditation and use of motorized watercraft — attended the commission of the crime.

On evident premeditation, we do not agree that it should be appreciated in the commission of the crime charged. Although conspiracy existed, it should be observed that this conspiracy was established by circumstantial evidence only. As ruled in one case, 26 when conspiracy is merely inferred from the acts of the accused in the perpetration of the crime, evident premeditation may not be appreciated in the absence of proof as to how and when the plan to kill the victim was hatched, or what period of time elapsed before it was carried out.

As regards treachery, we also do not see any reason for appreciating this aggravating circumstance. It must be noted that, in the instant case, there is no direct evidence pointing to the actual commission of the crime charged. Not one of the prosecution witnesses saw who killed the robbed couple. The settled rule is that treachery must be established by positive evidence in order to be appreciated. 27 No treachery may be said to have attended the commission of the offense, as it was not clearly proved with convincing and positive evidence.

However, as to the aggravating circumstances of abuse of superior strength and use of motorized watercraft, the records of the case clearly show the presence of these aggravating circumstances. Certainly, the seven (7) persons charged in this case, including herein three (3) appellants, being armed with weapons, surely and deliberately used excessive force on the persons of their helpless victims. Further, all the accused, including the three (3) appellants, used a motorized banca/watercraft to facilitate the commission of the crime.

Thus, there being conspiracy and the settled rule being that, in conspiracy, the guilt of one is the guilt of all, 28 we find all the three (3) appellants herein guilty of the crime of robbery with homicide, with the aggravating circumstances of abuse of superior strength and use of motorized vehicle.

Under Article 294 of the Revised Penal Code, the penalty for the crime of robbery with homicide is reclusion perpetua to death. There being two (2) aggravating circumstances present, with no mitigating circumstance, applying Article 63 of the said code, the penalty applicable is death.

However, in view of the 1987 Constitution under which the death penalty is not imposable, the appropriate penalty is reclusion perpetua.

WHEREFORE, the appealed judgment is AFFIRMED, with the modification that the appellants are sentenced to suffer the penalty of RECLUSION PERPETUA, and ordered to indemnify jointly and severally the heirs of Sofronio Parangue and Margarita Parangue in the sum of P5,450.00, the amount stolen, and in the further sum of P60,000.00 for the death of said spouses, and to pay the costs.chanrobles law library

SO ORDERED.

Regalado, J., concur.

Separate Opinions

SARMIENTO, J., concurring and dissenting:chanrob1es virtual 1aw library

Subject to the concurring and dissenting opinion of Justice Melencio-Herrera in G.R. Nos. L-38968-70, which I joined.

Melencio-Herrera and Paras, JJ., concur.

Endnotes:

** Penned by Judge Jose S. Solidum.

1. Original records, pp. 126-127.

2. RTC Decision, Rollo, 36-38.

3. Rollo, Appellants’ Brief, p. 224.

4. Original Records, p. 482.

5. Resolution dated 2 February 1988, Rollo, p. 304.

6. Entry of Judgment, 64935, Rollo, p. 318-B.

7. Rollo, p. 40.

8. Ibid, pp. 46 and 57.

9. L-51770, March 20, 1985, 135 SCRA 465.

10. Olaes v. People, 78347-49, Nov. 9, 1987, 155 SCRA 486.

11. L-45354, July 26, 1988.

12. People v. Pineda, 72400, Jan. 15, 1988, 157 SCRA 71.

13. Rollo, pp. 15-19.

14. Tsn, December 15, 1977, pp. 9-11.

15. Tsn, October 31, 1979, pp. 3-9.

16. Tsn, September 20, 1978, pp. 214-A, 260; September 25, 1978, pp. 274, 308.

17. Tsn, June 19, 1978, pp. 508-509.

18. Tsn, October 31, 1979, pp. 11, 12, 16, 18, 19, and 53; TSN, September 25, 1978, pp. 277-278, 315-316.

19. Tsn, October 31, 1979, pp. 3-4, and 68.

20. Rollo, pp. 19-20.

21. Ibid., p. 20.

22. Ibid.

23. Ibid., p. 21.

24. Ibid.

25. Tsn, December 5, 1980, pp. 422-424.

26. People v. Custodio, G.R. No. L-7442, Oct. 24, 1955, 97 Phil. 698.

27. People v. Atienza, G.R. No. 68481, Feb. 27, 1987, 148 SCRA 147.

28. People v. Veloso, L-38551-53, Feb. 27, 1987, 148 SCRA 60.

G.R. No. 71499 July 19, 1989 - PHILIPPINE LONG DISTANCE TELEPHONE COMPANY v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

2012-11-11T16:53:05+00:00

FIRST DIVISION

[G.R. No. 71499. July 19, 1989.]

PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, Petitioner, v. THE NATIONAL LABOR RELATIONS COMMISSION & JAIME L. ALEJANDRINO, Respondents.

D E C I S I O N

GRIÑO-AQUINO, J.:

The petitioner, Philippine Long Distance Telephone Company (or PLDT), seeks a review of the NLRC’s decision ordering it to reinstate without backwages its employee, Jaime Alejandrino, a telephone installer, who was caught siphoning gasoline from his PLDT service vehicle, and was dismissed as a consequence thereof.

On November 17, 1982, at a little past noon, Alejandrino was apprehended by two (2) Quezon City policemen in the act of siphoning gasoline into a plastic container, from the gas tank of a PLDT service vehicle No. 1647, a Ford Fiera bearing Plate No. NBL-729-Pil ‘82, near his house on Leyland Drive, Baesa, Quezon City.

During the investigation at the police station, he admitted that he had been stealing gasoline from his employer’s vehicle. A charge of qualified theft was filed by the police in the fiscal’s office (I.S. No. 82-26727). As recommended by the fiscal in his Disposition Report, an information for qualified theft was filed in the Metropolitan Trial Court, Branch XI at Quezon City (Crim. Case No. 214328) and a bail of P8,000 was fixed for the provisional liberty of the accused.

Upon being apprised of the incident, the PLDT asked Alejandrino to explain in writing why he should not be dismissed from the service for "theft or misappropriation of company property." (p. 31, Rollo.)

In his explanation, Alejandrino denied having committed the theft. He alleged that he was framed up by a certain Cris Torres who may have suspected Alejandrino of having a dalliance with his wife; that the policemen may have been Torres’ friends; and that the evidences against him (the siphon and plastic container with gasoline) were planted. He concluded his explanation with a statement that "I am ready to be heard if you consider that there are certain matters to be clarified from me in a formal inquiry by an officer" (p. 33, Rollo).

On April 14, 1983, he was discharged by the company on the basis of his earlier sworn admission, the affidavits of the arresting officers, and the disposition report of the inquest fiscal.

Alejandrino filed a complaint in the NLRC for illegal dismissal.

The Labor Arbiter "after a careful study of the records and the testimonies of the witnesses (policemen)," held that "there was justifiable ground to warrant the dismissal of complainant" (p. 16, Rollo). He dismissed the complaint for lack of merit (p. 18, Rollo).

However, on appeal by Alejandrino, the NLRC reversed the decision of the Labor Arbiter on the ground that Alejandrino was dismissed without a proper hearing or without due process. It ordered PLDT to reinstate him "to his former position without loss of seniority rights but without backwages." (p. 38, Rollo.).

The company filed this petition for certiorari alleging that the NLRC gravely abused its discretion in holding that Alejandrino was dismissed without due process.

We find merit in the petition.

"Due process as a constitutional precept does not, always and in all situations require the trial-type proceeding" (Zaldivar v. Gonzalez, G.R. No. 80578, Oct. 7, 1988). The requirements of due process were satisfied when Alejandrino was notified of the charge of dishonesty against him and he was given an opportunity to explain or defend himself, which he did in writing to his District Manager, E. A. Toledo (pp. 31-33, Rollo) (Adamson & Adamson, Inc. v. Amores, 152 SCRA 237). The essence of due process is simply an opportunity to be heard (Bermejo v. Barrios, 31 SCRA 764), or as applied to administrative proceedings, an opportunity to explain one’s side (Tajonera v. Lamaroza, 110 SCRA 438; Gas Corporation of the Phils. v. Hon. Inciong, 93 SCRA 653; Cebu Institute of Technology v. Minister of Labor, 113 SCRA 257), or, an opportunity to seek a reconsideration of the action or ruling complained of (Dormitorio v. Fernandez, 72 SCRA 388). Alejandrino did not ask for a formal hearing. He merely expressed his readiness to face one "if . . . there are certain matters to be clarified from me." (p . 33, Rollo.) The company may not be taken to task for not holding a formal inquiry since it found no further need for clarification of the evidence in its possession.

There was ample evidence that Alejandrino committed the theft charged. The Labor Arbiter found that the policemen "detailedly explained what actually transpired — from the time they received the tip up to the time complainant was brought to the Police Headquarters for investigation. The Labor Arbiter had "no cause . . . to doubt the testimonies of the witnesses who testified candidly and openly. The presumption of regularity in the performance of their duties must be upheld in the absence of a showing to the contrary." (pp. 17-18, Rollo.)

The Labor Arbiter rejected Alejandrino’s allegation that he was "made to sign his sworn statement without giving him the opportunity to read the same under threat and intimidation" (p. 16, Rollo). The Labor Arbiter observed that in Alejandrino’s answer to Question No. 4, where he admitted that he siphoned the gasoline from the Ford Fiera, Alejandrino added in his own handwriting an explanation: "Dahil inabonohan ko ang nakuhang P30.00 dahil malapit ng maubusan" (p. 17, Rollo). The implication of that statement is that he was merely trying to get back the P30 worth of gasoline which he allegedly purchased with his own money (inabonohan ko). On the other hand, if indeed he advanced P30 to put gasoline in the Fiera, why would he siphon it out instead of securing a refund of the amount which he advanced?

The fact that the policemen may have conducted their surveillance of Alejandrino upon a tip from a jealous husband (Cris Torres) is not an exempting or exculpatory circumstance. He admitted that he committed the theft more than once. Under the circumstances, considering the seriousness of his misconduct, it would not be proper to require his employer to take him back (PLDT v. NLRC, G.R. No. 75927, Oct. 5, 1988; Firestone Tire & Rubber Co. of the Phil. v. Lariosa, 148 SCRA 187). Acts of dishonesty in the use of company property are a valid ground for the dismissal of an employee.

WHEREFORE, the petition for certiorari is granted. The decision of the NLRC is set aside and that of the Labor Arbiter is reinstated. No costs.

SO ORDERED.

Narvasa, Cruz, Gancayco and Medialdea, JJ., concur.

G.R. No. 74658 July 19, 1989 - PEOPLE OF THE PHIL. v. EMETERIO VELASCO, ET AL.

2012-11-11T16:53:05+00:00

FIRST DIVISION

[G.R. No. 74658. July 19, 1989.]

THE PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. EMETERIO VELASCO and JUANITO COMEL, Accused-Appellants.

Manalo, Figura, Puno, Mendoza & Associates for Accused-Appellants.

SYLLABUS

1. REMEDIAL LAW; EVIDENCE; CREDIBILITY OF WITNESSES; MINOR INCONSISTENCIES IN WITNESSES’ NARRATIONS DO NOT AFFECT THEIR CREDIBILITY. — There are inconsistencies in the separate narrations made by Clarita and Domingo Puri but only on minor points that do not detract from their essential credibility. Whether Sergio Puri was standing or sitting shortly before he was shot or whether Clarita stayed by the window for thirty seconds or three minutes is not really that important as long as the testimony of the witness is on the whole credible. What is important is that, although Clarita and Domingo may have differed on some of the details, their common declaration was that they saw the two accused-appellants walking away from under the house minutes after the shots were fired.

2. ID.; ID.; ID.; TESTIMONY THAT ACCUSED MERELY WALKED AWAY AFTER THE COMMISSION OF THE CHIEF BOLSTERS WITNESS’ TRUTHFULNESS. — One may well wonder why a 69-year old man would go out on that windy and rainy night to accompany the killer and, stranger still, why they would simply walk away after the shooting. But the fact is that Emeterio Velasco and Juanito Comel were actually seen together that night under the house of the slain Sergio Puri and they were not running but simply walking away. It would have been more believable for Clarita and Domingo, if they wanted to be more convincing, to say that the two men they saw were running, for this was the natural thing to do. The fact that these witnesses did not do so is perhaps an index itself of their truthfulness. The muddy soil might have been the reason why the accused-appellants were not running but carefully treading their way so as not to slip.

3. ID.; ID.; CIRCUMSTANTIAL EVIDENCE; VARIOUS CIRCUMSTANCES IN CASE AT BAR SUFFICIENT TO CONVICT ACCUSED. — The Court has carefully analyzed the evidence against the accused-appellants and finds that, although only circumstantial, it is sufficient to convict them. The various circumstances pointing to them as the killers have successfully overcome the constitutional presumption of their innocence and established their guilt beyond reasonable doubt. They were seen immediately after Sergio Puri was shot and killed from under his house. Velasco was carrying a shotgun, later identified at the trial as a carbine. That same night six spent carbine shells were found at the scene of the crime. Juanito Comel was not in his house on the night of the killing when the policemen went to see him, and Velasco for his part was also missing. And there was also motive: the alleged killing by Sergio Puri of Filemon Comel, Juanito’s brother, and Juanito’s dismissal of the Puris as harvesters in his farm, as a result of which they and his family ceased to be on speaking terms.

4. CRIMINAL LAW; CONSPIRACY; ACCUSED EQUALLY GUILTY OF MURDER. — The trial court was correct in finding that there was a conspiracy between Velasco and Comel as they evidently acted in concert in pursuit of a common design. They were properly found equally guilty of the crime of murder, qualified by treachery, but without the aggravating circumstances of evident premeditation and night-time, which were not established. There is no reason why these factual findings should be reversed or modified, absent a showing that they were reached without basis or with grave abuse of discretion.

D E C I S I O N

CRUZ, J.:

It was nine o’clock in the evening of July 17, 1977, and the members of the Puri family were inside their house in the town of San Antonio in Quezon Province. Outside it was windy and rainy. Suddenly, several shots rang out from under the house and Sergio Puri moaned in pain, evidently hit. Moments later, he was dead with wounds in his neck, chest, arms and knee.

The sound of the shots and Gloria Puri’s shouts for help drew neighbors to the house. The matter was immediately reported to the authorities and that same night three policemen came to investigate. They found six empty carbine shells under the house. They also went in search of the two persons claimed to have been seen walking away from the scene of the crime after its commission.

On August 29, 1977, an information for murder was filed against Emeterio Velasco, Juanito Comel and Rodrigo Comel. Upon reinvestigation on their motion, Rodrigo Comel was dropped from the charge for insufficiency of evidence. After arraignment and trial, the two remaining accused were found guilty. They were sentenced to reclusion perpetua plus payment of indemnity to the victim’s heirs in the sum of P20,000.00. 1

In this appeal, both Velasco and Comel claim that they were invalidly convicted on insufficient circumstantial evidence in disregard of their constitutional right to the presumption of innocence.

The principal witnesses for the prosecution were Clarita Puri and Domingo Puri, who both pointed to the two accused-appellants as their brother’s killers. In their separate testimonies, they said that when they heard the shots, they went to the window and saw the two accused walking away. Velasco had a shotgun. Clarita was at the time carrying an oil lamp and Domingo a flashlight. They heard Sergio moaning and it was then they realized he had been shot. It was too late to help him. 2

Pat. Demetrio Andaya, also testifying for the prosecution, said that he had investigated the killing that same night, together with three other policemen. They found six used carbine shells under the Puri house. Clarita reported to him that she saw the two accused walking away from under their house minutes after she heard the shots. He told her to go to the municipal building and make a formal statement. 3

He was corroborated by Pat. Nemesio Alcantara, who was also in the investigating team. This witness said they found footprints under the house that led to the house of Juanito Comel. 4

Another investigator, Pat. Manuel Vasquez, had a slightly different story. While confirming their discovery of the spent carbine shells, he testified that when Clarita was interviewed by Andaya and Alcantara, she could not tell who her brother’s assailants were. 5

Emeterio Velasco, testifying for himself, denied killing Sergio Puri and said he was residing in Tagkawayan, another town in Quezon, at the time of the killing. 6 As for Juanito Comel, who also took the stand, he said he was in his house with his family the whole night of July 17, 1977, and could not have committed the killing. Moreover, he was already 69 years old and had poor eyesight, which was the reason he had stopped working in his farm the year before. 7 Dr. Cornelio Maninang confirmed Comel’s defective vision, saying the accused was suffering from presbyopia and cataract. 8

Another witness was Capt. Valentino Gaerlan of the PC Crime Laboratory, who testified that he paraffin-tested Anselmo Comel, Casiano Comel and Armando Mercado on July 19, 1977, and found them negative for powder burns. 9 Me did not say he had also tested the two Accused-Appellants.

It was disclosed at the trial that the Puri family used to be employed in Juanito Comel’s farm as their harvesters but he had dismissed them several years earlier. Emeterio Velasco replaced them and became a close friend of Juanito Comel. Sergio Puri was charged with having killed Filemon Comel, Juanito’s brother, but the case was dismissed in the fiscal’s office after Sergio made a cash settlement with the family of the victim. 10

These circumstances were regarded by the trial judge as the basis for the motive in the killing of Sergio Puri. Judge Palattao said the motive was revenge. This revenge was carried out by the two accused, with Velasco as the actual gunman in conspiracy with his close friend and employer, Juanito Comel, who had accompanied him that night. The fact that they were both not at home when the policemen went looking for them that same night indicated that they were hiding. Velasco was even seen crossing the river on the way to Tiaong, presumably to escape.

It bears noting at this juncture that the house where the victim was shot, like many houses in the province, was a one-story structure raised on pillars and with an empty space underneath.

The elevation of the floor was about two-and-one half meters. Any person in this area could look up and see the occupants inside the house through its bamboo flooring. As the room where Sergio Puri was standing and mending a fish net (or sitting, according to Domingo) was lit with three oil lamps, it was easy for the killer or killers to identify and shoot him from below.

The Court does find it strange that the killing should have been done under these circumstances but the fact is that it did happen. It is not disputed that Sergio Puri died from the shots fired from under him. The only question is whether the killers were Emeterio Velasco and Juanito Comel, as the trial judge held.

Although the offense was committed on July 17, 1977, the record shows that it took one month before the accused-appellants were formally indicted. Moreover, although three persons were originally charged, one of them was dismissed after a reinvestigation. It is also noted that two days after the killing three persons were paraffin-tested by the police but not either of the two Accused-Appellants. This was a curious omission in light of the report made by Clarita Puri to Pat. Andaya on the very night of the killing that she saw Velasco and Comel leaving the scene of the crime immediately after she heard the shots.

The explanation given by the prosecution is that the Puri family was afraid to press charges, especially so since the former station commander was partial to the accused and was protecting them. It was only when he was replaced that the complainants dared to come forward and accuse Velasco and Comel. 11

There are inconsistencies in the separate narrations made by Clarita and Domingo Puri but only on minor points that do not detract from their essential credibility. Whether Sergio Puri was standing or sitting shortly before he was shot or whether Clarita stayed by the window for thirty seconds or three minutes is not really that important as long as the testimony of the witness is on the whole credible. What is important is that, although Clarita and Domingo may have differed on some of the details, their common declaration was that they saw the two accused-appellants walking away from under the house minutes after the shots were fired.

The defense theorizes that Clarita and Domingo could not have failed to see that Sergio had been shot and that their first reaction would have been to go to him instead of to the window. Sergio was in fact talking with Domingo, according to Clarita, when the shots were fired. Moreover, the room where they were all in at the time was after all not big and all the occupants were within sight of each other.

We can also only conjecture like the defense but the other plausible view is that Clarita’s and Domingo’s first impulse was to go to the window to see where the shots had come from, not yet realizing that one of them had been shot. It was Clarita who said Sergio and Domingo were conversing when Sergio was shot. Domingo never said that; what he said was that he was behind his brother shortly before he heard the shots. 12

One may well wonder why a 69-year old man would go out on that windy and rainy night to accompany the killer and, stranger still, why they would simply walk away after the shooting. But the fact is that Emeterio Velasco and Juanito Comel were actually seen together that night under the house of the slain Sergio Puri and they were not running but simply walking away. It would have been more believable for Clarita and Domingo, if they wanted to be more convincing, to say that the two men they saw were running, for this was the natural thing to do. The fact that these witnesses did not do so is perhaps an index itself of their truthfulness.

The testimony of Alcantara that they found footprints in the mud leading from the Puri house to Juanito Comel’s house must be taken with a grain of salt. It is doubtful how the footprints could have been preserved on that rainy night, let alone the fact that there were allegedly many such footprints and none was identified as belonging to either of the Accused-Appellants. On the other hand, the muddy soil might have been the reason why the accused-appellants were not running but carefully treading their way so as not to slip.

It is also noteworthy that when the investigators reached Juanito Comel’s house and asked for him they were told he was not there. 13 Comel himself did not deny this particular statement of Pat. Alcantara although he insisted that he was at home all night on July 17, 1977. If he was really there and had nothing to hide, Comel would have come out and talked to the investigators. Velasco was also nowhere to be found that night after the killing and did not deny that he was seen crossing the river on the way to Tiaong.

The Court has carefully analyzed the evidence against the accused-appellants and finds that, although only circumstantial, it is sufficient to convict them. The various circumstances pointing to them as the killers have successfully overcome the constitutional presumption of their innocence and established their guilt beyond reasonable doubt.

They were seen immediately after Sergio Puri was shot and killed from under his house. Velasco was carrying a shotgun, later identified at the trial as a carbine. That same night six spent carbine shells were found at the scene of the crime. Juanito Comel was not in his house on the night of the killing when the policemen went to see him, and Velasco for his part was also missing. And there was also motive: the alleged killing by Sergio Puri of Filemon Comel, Juanito’s brother, and Juanito’s dismissal of the Puris as harvesters in his farm, as a result of which they and his family ceased to be on speaking terms.

Given these circumstances, it was inevitable that the accusing finger should point to Juanito Comel and his friend and employee, Velasco. And more so since there does not seem to be any other plausible explanation for the killing of Sergio Puri, who was an ordinary fisherman. Definitely, the killers did not come to rob, for they left immediately after the slaying. The only target was Sergio Puri although there were other occupants in the house who were equally exposed and defenseless. It has not been shown either that there were other persons who had a grudge against the victim and could themselves have committed the killing.

The trial court was correct in finding that there was a conspiracy between Velasco and Comel as they evidently acted in concert in pursuit of a common design. They were properly found equally guilty of the crime of murder, qualified by treachery, but without the aggravating circumstances of evident premeditation and night-time, which were not established. There is no reason why these factual findings should be reversed or modified, absent a showing that they were reached without basis or with grave abuse of discretion.

WHEREFORE, the appealed judgment is AFFIRMED except for the civil indemnity, which is increased to P30,000.00. Costs against the Accused-Appellants.

SO ORDERED.

Narvasa, Gancayco, Griño-Aquino and Medialdea, JJ., concur.

Endnotes:

1. Rollo, p. 28, Decision penned by Judge Rodolfo G. Palattao, Regional Trial Court, Branch LIII, Lucena City.

2. TSN, June 25, 1980, pp. 23, 25 and 34; TSN, July 7, 1980, p. 17.

3. Decision, p. 6; rollo, p. 33.

4. TSN, December 3, 1980, p. 36.

5. Decision, p. 9; rollo, p. 36.

6. Ibid., p. 12; rollo, p. 39.

7. Decision, supra.

8. Ibid., p. 11; rollo, p. 38.

9. Id.

10. Id., pp. 16 and 19; rollo, pp. 43 and 46.

11. Id., p. 17; rollo, p. 44.

12. TSN, August 15, 1980, p. 2.

13. TSN, December 3, 1980, p. 12.

G.R. No. 75704 July 19, 1989 - RUBBERWORLD (PHILS.), INC., ET AL. v. NATIONAL LABOR RELATIONS COMMISSION

2012-11-11T16:53:05+00:00

FIRST DIVISION

[G.R. No. 75704. July 19, 1989.]

RUBBERWORLD (PHILS.), INC. and ELPIDIO HIDALGO, Petitioners, v. THE NATIONAL LABOR RELATIONS COMMISSION (THIRD DIVISION) and NESTOR MALABANAN, Respondents.

SYLLABUS

1. REMEDIAL LAW; APPEAL; FACTUAL FINDINGS OF ADMINISTRATIVE AGENCY ARE CONCLUSIVE AND BINDING IF SUPPORTED BY SUBSTANTIAL EVIDENCE. — The question of whether an employee was dismissed because of his union activities is essentially a question of fact as to which the findings of the administrative agency concerned are conclusive and binding if supported by substantial evidence.

2. ID.; EVIDENCE; SUBSTANTIAL EVIDENCE; MEANING OF, EXPLAINED. — Substantial evidence has been defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. It means such evidence which affords a substantial basis from which the fact in issue can be reasonably inferred (Philippine Metal Foundries, Inc. v. Court of Industrial Relations, et. al., No. L-34948-49, May 15, 1979, 90 SCRA 135).

3. LABOR AND SOCIAL LEGISLATION; LABOR RELATIONS; UNFAIR LABOR PRACTICE; NO COMMISSION THEREOF BY PETITIONER COMPANY IN CASE AT BAR; REASON. — The findings of the Labor Arbiter on the non-existence of unfair labor practice on the part of the company are more in accord and supported by the evidence submitted by the parties in the instant case. Nowhere in the records can We find that the company actually performed positive acts to restrain the union participation of private Respondent. For one, it is doubtful whether Malabanan was really engaged in the organization of a labor union affiliated with the federation TUPAS. The only evidence presented by him to prove this contention is his affidavit and that of his father. It is therefore, not in accordance with ordinary experience and common practice that the private respondent pursued his battle alone, without the aid and support of his co-members in the union and his federation especially in a case of serious nature as this one involving company intervention with union activity. We are compelled to agree with the latter that the petitioner company did not commit any unfair labor practice in transferring and thereafter dismissing private Respondent.

4. ID.; ID.; ID.; ID.; PREROGATIVE OF COMPANY TO PROMOTE, TRANSFER OR EVEN DEMOTE ITS EMPLOYEE TO OTHER POSITIONS WHEN INTERESTS OF COMPANY REASONABLY DEMAND. — As a rule, it is the prerogative of the company to promote, transfer or even demote its employees to other positions when the interests of the company reasonably demand it. Unless there are instances which directly point to interference by the company with the employees’ right to self-organization, the transfer of private respondent should be considered as within the bounds allowed by law. Furthermore, although private respondent was transferred to a lower position, his original rank and salary remained undiminished, which fact was not refuted or questioned by private Respondent.

5. ID.; TERMINATION OF EMPLOYMENT; PENALTY OF DISMISSAL CRUEL AND UNJUST IF NOT PROPORTIONATE TO GRAVITY OF MISDEED. — It does not appear that private respondent Malabanan is an incorrigible offender or that what he did inflicted serious damage to the company so much so that his continuance in the service would be patently inimical to the employer’s interest. Assuming, in gratia argumenti that the private respondent had indeed committed the said mistakes in the posting of accurate data, this was only his first infraction with regard to his duties. It would thus be cruel and unjust to mete out the drastic penalty of dismissal, for it is not proportionate to the gravity of the misdeed.

6. ID.; ID.; FAIR AND REASONABLE CRITERIA USED IN SELECTING EMPLOYERS TO BE DISMISSED. — The promotion of the private respondent from the position of ordinary clerk to production scheduler establishes the presumption that his performance of his work is acceptable to the company. The petitioner even admitted that it was due to heavy financial and business reverses that the company assigned the private respondent to the position of Stock Clerk and not because of his unsatisfactory performance as production scheduler (p. 6, Rollo). It has been held that there must be fair and reasonable criteria to be used in selecting employees to be dismissed (Asiaworld Publishing House, Inc. v. Ople, No. L-56398, July 23, 1987, 152 SCRA 219).

7. ID.; ID.; PREROGATIVE OF MANAGEMENT TO DISMISS OR LAY-OFF AN EMPLOYEE MUST BE WITHOUT ABUSE OF DISCRETION; REASON. — It is worthy to note that the prerogative of management to dismiss or lay-off an employee must be done without abuse of discretion, for what is at stake is not only petitioner’s position, but also his means of livelihood. This is so because the preservation of the lives of the citizens is a basic duty of the State, more vital than the preservation of corporate profits (Euro-Linea, Phils., Inc. v. NLRC, L-75782, December 1, 1987, 156 SCRA 79).

8. ID.; CONSTRUCTION IN FAVOR OF LABOR; LABOR DETERMINATIONS SHOULD NOT ONLY BE SECUNDUM RATIONEM BUT ALSO SECUNDUM CARITATEM. — The law regards the worker with compassion. Our society is a compassionate one. Where a penalty less punitive would suffice, whatever missteps may be committed by the worker should not be visited by the supreme penalty of dismissal. This is not only because of the law’s concern for the working man. There is in addition, his family to consider. After all, labor determinations should not only be secundum caritatem but also secundum caritatem (Almira, Et Al., v. BF Goodrich Philippines, Inc., Et Al., G.R. No. L-34974, July 25, 1974, 58 SCRA 120).

9. ID.; ID.; REINSTATEMENT OF PRIVATE RESPONDENT TO FORMER OF SUBSTANTIALLY EQUIVALENT POSITION WITH BACKWAGES; PAYMENT OF SEPARATION PAY IF REINSTATEMENT IS NOT POSSIBLE. — The decision of the public respondent is hereby MODIFIED to the effect that petitioner company is ordered to reinstate private respondent Nestor Malabanan to the position of stock clerk or substantially equivalent position, with the same rank and salary he is enjoying at the time of his termination, with three years backwages and without loss of seniority rights and benefits appurtenant thereto. Should the reinstatement of the private respondent as herein ordered be rendered impossible by the supervention of circumstances which prevent the same, the petitioner is further ordered to pay private respondent separation pay equivalent to one (1) month’s salary for every year of service rendered, computed at his last rate of salary.

D E C I S I O N

MEDIALDEA, J.:

This is a petition for certiorari under Rule 65 of the Rules of Court seeking the annulment of the decision of the respondent National Labor Relations Commission dated June 17, 1986 (p. 23, Rollo) in NLRC NCR Case No. 6-2158-84 entitled "Nestor Malabanan and Jonathan Transmil, Complainants, versus Rubberworld (Phils.), Inc. and Elpidio Hidalgo, Respondents," reversing the decision of the Labor Arbiter which dismissed the complaint for illegal dismissal for lack of merit.chanrobles lawlibrary : rednad

The antecedent facts are as follows:chanrob1es virtual 1aw library

Respondent Malabanan was employed by petitioner Rubberworld (Phils.), Inc. on September 25, 1978 as an ordinary clerk. In May, 1980, he was promoted to the position of production scheduler with a corresponding salary increase. He was again transferred to the Inventory Control Section as stock clerk on September 1, 1983.

On April 6, 1984, Elpidio Hidalgo, the Plant I General Manager of petitioner company, received a copy of the Financial Audit Report from the Internal Audit Department of the company showing a significant material variance between the year-end actual inventory and that of the Cards (SC)/EDP Control Records. As a result thereof, Noel Santiago, Section Head of the Inventory Control Section, where respondent Malabanan was assigned, conducted an investigation of the reported discrepancies in the stock cards upon the request of the Plant General Manager. Santiago then submitted his report to the general manager recommending the dismissal of respondent Malabanan.

Consequently, Malabanan’s case was endorsed to the Human Resources Division of petitioner company, which conducted a reinvestigation on the matter and which affirmed the recommendation of the Inventory Control Section Head for the termination of employment of respondent Malabanan.

On June 6, 1984, respondent Malabanan was dismissed by petitioner company.

On June 16, 1984, respondent Malabanan, along with another complainant named Jonathan Transmil, filed a complaint for unfair labor practice and illegal dismissal against petitioner company alleging that they (respondent Malabanan and complainant Transmil) were members of the monthly salaried employees’ union affiliated with TUPAS; that petitioner company forced them to disaffiliate from the union; and that due to their refusal to resign from the union, they were ultimately dismissed from employment by petitioner company.

Petitioner company on the other hand, denied complainants’ allegations and averred that respondent Malabanan’s dismissal was due to gross and habitual neglect of his duty and not due to his union affiliation.

During the hearing of the case, the other complainant, Jonathan Transmil withdrew from the case since he already found another employment abroad.

On January 30, 1985, the Labor Arbiter rendered a decision (pp. 17-22, Rollo), the dispositive portion of which reads:jgc:chanrobles.com.ph

"WHEREFORE, premises considered, this case should be, as it is hereby, DISMISSED, for lack of merit.

"SO ORDERED."cralaw virtua1aw library

Respondent Malabanan appealed from the adverse decision to the respondent Commission. On June 17, 1986, respondent Commission reversed the appealed decision of the Labor Arbiter and stated, inter alia:jgc:chanrobles.com.ph

"Confronted with this factual backgrounds, we find ourselves inclined to the view that the appealed decision merits a reversal.

x x x

"WHEREFORE, premises considered, the appealed decision should be, as it is hereby REVERSED. Consequently, the respondents are directed to reinstate complainant Nestor Malabanan to his former position as production scheduler, with full backwages from the time he was illegally terminated up to actual reinstatement, without loss of seniority rights and benefits appurtenant thereto.

"SO ORDERED." (pp. 23-27, Rollo)

The petitioner company moved for a reconsideration on the ground that the respondent Commission’s decision is not in accordance with facts and evidence on record. On July 23, 1986, the said motion for reconsideration was denied.

On September 3, 1986, petitioner filed the instant petition contending that the respondent Commission committed grave abuse of discretion amounting to lack of jurisdiction in reversing the Labor Arbiter’s decision.

The two issues to be resolved in the instant case are: (1) whether or not the dismissal of respondent Malabanan is tainted with unfair labor practice; and (2) whether or not a just and valid cause exists for the dismissal of private respondent Malabanan.

Petitioner alleges that the National Labor Relations Commission gravely erred in concluding that the demotion of Malabanan from production scheduler to a stock clerk at the Stock and Inventory Section was intended to discourage Malabanan from union membership. It argued that the Labor Arbiter was correct in finding that the private respondent had not shown ample proof to the effect that he was a member of a labor organization prior to his transfer to another position.

We believe that the foregoing contentions are impressed with merit. Art. 248 of the Labor Code, PD No. 442, as amended, provides:jgc:chanrobles.com.ph

"Art. 248. Unfair labor practices of employers. — It shall be unlawful for an employer to commit any of the following unfair labor practices:chanrob1es virtual 1aw library

(a) To interfere with, restrain or coerce employees in the exercise of their right to self-organization;

"x x x"

The question of whether an employee was dismissed because of his union activities is essentially a question of fact as to which the findings of the administrative agency concerned are conclusive and binding if supported by substantial evidence. Substantial evidence has been defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. It means such evidence which affords a substantial basis from which the fact in issue can be reasonably inferred (Philippine Metal Foundries, Inc. v. Court of Industrial Relations, et. al., No. L-34948-49, May 15, 1979, 90 SCRA 135). The findings of the Labor Arbiter on the non-existence of unfair labor practice on the part of the company are more in accord and supported by the evidence submitted by the parties in the instant case, to wit:jgc:chanrobles.com.ph

"Complainant had stated that he was a member of the monthly salaried employees union affiliated with TUPAS. He, however, offered no proof to support his allegation. In fact, no evidence was presented to prove the existence of such union. We [note] from the records that, as the usual practice, in cases like this one, complainant is usually supported by the union of which he is a member. And ordinarily, the union itself is impleaded as a co-complainant. Such circumstances, surprisingly, [are not present in this case. In fact, complainant categorically alleged that he had solicited the services of the PAFLU Labor Union in filing this case. It is, indeed, surprising that complainant had to solicit the help of a labor union (PAFLU) of which he was not a member instead of soliciting the aid of the labor union (TUPAS) of which he was allegedly a member. These circumstances alone [destroy] the credibility of complainant’s allegations." (p. 21, Rollo).

Nowhere in the records can We find that the company actually performed positive acts to restrain the union participation of private Respondent. For one, it is doubtful whether Malabanan was really engaged in the organization of a labor union affiliated with the federation TUPAS. The only evidence presented by him to prove this contention is his affidavit and that of his father. It is therefore, not in accordance with ordinary experience and common practice that the private respondent pursued his battle alone, without the aid and support of his co-members in the union and his federation especially in a case of serious nature as this one involving company intervention with union activity.

As a rule, it is the prerogative of the company to promote, transfer or even demote its employees to other positions when the interests of the company reasonably demand it. Unless there are instances which directly point to interference by the company with the employees’ right to self-organization, the transfer of private respondent should be considered as within the bounds allowed by law. Furthermore, although private respondent was transferred to a lower position, his original rank and salary remained undiminished, which fact was not refuted or questioned by private Respondent.

In view of the foregoing conclusions of the Labor Arbiter, We are compelled to agree with the latter that the petitioner company did not commit any unfair labor practice in transferring and thereafter dismissing private Respondent.

The remaining issue to be resolved on this point is whether the dismissal of respondent Malabanan was for a just and lawful cause. Article 282 of the Labor Code, as amended, provides:jgc:chanrobles.com.ph

"Article 282. Termination by employer. An employer may terminate an employment for any of the following just causes:chanrob1es virtual 1aw library

x x x

b) Gross and habitual neglect by the employee of his duties;

x x x"

Petitioner contends that private respondent Malabanan was guilty of gross negligence when he caused the posting of incorrect entries in the stock card without counter checking the actual movement status of the items at the warehouse, thereby resulting into unmanageable inaccuracies in the data posted in the stock cards. The respondent Commission correctly ruled:jgc:chanrobles.com.ph

"Penultimately, even assuming for the sake of argument that herein complainant "posted entries in the stock card without counter checking the actual movement status of the items at the warehouse, thereby resulting in an inaccurate posting of data on the stock cards," to our impression does not constitute as a just cause for dismissal. Records show that he was only transferred to the Inventory Control Section on September 1, 1983 and was not so familiar and experienced as a stock clerk, and prior to his transfer, the record shows no derogatory records in terms of his performance. His failure to carry out efficiently his duties as a stock clerk is not so gross and habitual. In other words he was not notoriously negligent to warrant his severance from the service. Considering that there is nothing on record that shows that he wilfully defied instructions of his superior with regards to his duties and that he gained personal benefit of the discrepancy, his dismissal is unwarranted" (p. 26, Rollo).

It does not appear that private respondent Malabanan is an incorrigible offender or that what he did inflicted serious damage to the company so much so that his continuance in the service would be patently inimical to the employer’s interest. Assuming, in gratia argumenti that the private respondent had indeed committed the said mistakes in the posting of accurate data, this was only his first infraction with regard to his duties. It would thus be cruel and unjust to mete out the drastic penalty of dismissal, for it is not proportionate to the gravity of the misdeed.

In fact, the promotion of the private respondent from the position of ordinary clerk to production scheduler establishes the presumption that his performance of his work is acceptable to the company. The petitioner even admitted that it was due to heavy financial and business reverses that the company assigned the private respondent to the position of Stock Clerk and not because of his unsatisfactory performance as production scheduler (p. 6, Rollo). It has been held that there must be fair and reasonable criteria to be used in selecting employees to be dismissed (Asiaworld Publishing House, Inc. v. Ople, No. L-56398, July 23, 1987, 152 SCRA 219).chanrobles virtual lawlibrary

It is worthy to note that the prerogative of management to dismiss or lay-off an employee must be done without abuse of discretion, for what is at stake is not only petitioner’s position, but also his means of livelihood. This is so because the preservation of the lives of the citizens is a basic duty of the State, more vital than the preservation of corporate profits (Euro-Linea, Phils., Inc. v. NLRC, L-75782, December 1, 1987, 156 SCRA 79).

The law regards the worker with compassion. Our society is a compassionate one. Where a penalty less punitive would suffice, whatever missteps may be committed by the worker should not be visited by the supreme penalty of dismissal. This is not only because of the law’s concern for the working man. There is in addition, his family to consider. After all, labor determinations should not only be secundum caritatem but also secundum caritatem (Almira, Et Al., v. BF Goodrich Philippines, Inc., Et Al., G.R. No. L-34974, July 25, 1974, 58 SCRA 120).

ACCORDINGLY, the petition is DISMISSED for lack of merit. However, the decision of the public respondent is hereby MODIFIED to the effect that petitioner company is ordered to reinstate private respondent Nestor Malabanan to the position of stock clerk or substantially equivalent position, with the same rank and salary he is enjoying at the time of his termination, with three years backwages and without loss of seniority rights and benefits appurtenant thereto.

Should the reinstatement of the private respondent as herein ordered be rendered impossible by the supervention of circumstances which prevent the same, the petitioner is further ordered to pay private respondent separation pay equivalent to one (1) month’s salary for every year of service rendered, computed at his last rate of salary.chanrobles lawlibrary : rednad

SO ORDERED.

Narvasa, Cruz, Gancayco and Griño-Aquino, JJ., concur.

G.R. No. 77133 July 19, 1989 - MARCIANO BANDOY, ET AL. v. COURT OF APPEALS, ET AL.

2012-11-11T16:53:05+00:00

FIRST DIVISION

[G.R. No. 77133. July 19, 1989.]

SPOUSES MARCIANO BANDOY and SEGUNDINA BANDOY, Petitioners, v. HON. COURT OF APPEALS and DOMINGO P. EMPAYNADO, Respondents.

Gil S. San Diego, for Petitioners.

Benjamin G. Galima for Private Respondent.

SYLLABUS

1. REMEDIAL LAW; ACTIONS; EJECTMENT; NOTICE TO VACATE, A JURISDICTIONAL REQUISITE. — It is a settled rule that "where the complaint contains no allegation that a demand had been made upon the defendant to vacate the premises but only an allegation that a demand was made for payment of the rentals agreed upon, it is held that such allegation is insufficient to confer jurisdiction upon a justice of the peace court" (Casilan v. Tomassi, Et Al., 10 SCRA 261, 264; Santos v. Vivas, 96 Phil. 538, 540).

2. ID.; ID.; ID.; ID.; CERTIFICATION OF BARANGAY CAPTAIN NOT CONCLUSIVE AS TO THE JURISDICTION OF THE COURT. — The certification issued by the office of the barangay captain is not conclusive as to the jurisdiction of the court to which the case was subsequently filed. What was certified by the barangay captain was that no settlement was reached by the parties in the barangay level. It did not certify that all the requisites for the filing of an unlawful detainer case had been complied with.

3. ID.; ID.; ID.; ID.; ACTUAL OR DEFINITE DEMAND, NOT INTENTION TO OUST, CONFERS JURISDICTION. — In the case at bar, the complaint was defective because of its failure to allege that there was a prior demand to vacate. The defect was not cured because no evidence of a prior demand to vacate was presented in the trial court. The affidavit of Empaynado relied upon by the trial judge to the effect that: "na ako ang tinutukoy ni Marciano Tamis Bandoy dahil di umano’y sa di magandang asal namin na gusto niyang paalisin sa kanyang extension", does not prove that the spouses demanded that he vacate the premises. What Empaynado admitted in the said affidavit was that the spouses intended to expel him out of the premises ("gusto niyang paalisin") but has not actually or definitely demanded that he vacate the premises. An intention to oust is different from an actual or definite demand to vacate. It is the latter which confers jurisdiction upon the municipal court.

D E C I S I O N

MEDIALDEA, J.:

This is an appeal by certiorari of the decision (pp. 27-31, Rollo) of the Court of Appeals dated January 13, 1987 in CA-G.R. SP. No. 09391 entitled "Spouses Marciano and Segundina Bandoy, Petitioners, v. Hon. Luis L. Victor, in his capacity as Presiding Judge, Branch XCVI, RTC, and Domingo Empaynado, Respondents," which affirmed the decision of the Regional Trial Court, National Capital Region, Branch XCVI, Quezon City, dismissing the herein petitioner’s complaint for ejectment on the ground of lack of jurisdiction due to the lack of demand to pay rentals and to vacate the premises.

The antecedent facts of the case are as follows:chanrob1es virtual 1aw library

Spouses Marciano and Segundina Bandoy herein petitioners, were lessees of a residential house and lot owned by the University of the Philippines and located at No. 88-D, Phase 4, Pook Amorsolo, U.P. Campus, Quezon City.

Sometime in April 1984, petitioners sublet certain spaces of the property to Eduardo Empaynado, herein private respondent, for a monthly rental of P550.00. Empaynado failed to pay the rental for the month of July, 1985. Upon demand by petitioners, Empaynado still failed and refused to pay.

Petitioners brought the matter to the office of the barangay captain for settlement, but to no avail. On August 20, 1985, a certification to file action against Domingo Empaynado for ejectment and non-payment of house rentals including light and water (Annex "A" to the petition, p. 10, Rollo) was issued by the office of the barangay captain.

On November 26, 1985, petitioners filed a complaint for ejectment against Empaynado and attached thereto the certification to file action issued by the barangay captain. The case was filed with the Metropolitan Trial Court of Metro Manila, Quezon City and docketed as Civil Case No. XXXV-48898.

In his answer, Empaynado admitted that he did not pay the rentals since July 1985 but denied that there was a demand to vacate and pay made upon him by spouses Marciano and Segundina Bandoy.

After trial, judgment was rendered in favor of the spouses. The decision, dated March 6, 1986 reads, in part:jgc:chanrobles.com.ph

"x       x       x

"At any rate, the court is of the view that a demand to vacate before the barangay court is a substantial equivalent of the required extrajudicial demand to pay and vacate required by the Rules of Court prior to the filing of an ejectment case in court.

"x       x       x

"ACCORDINGLY, judgment is hereby rendered in favor of plaintiff spouses Marciano and Segundina Bandoy ordering the defendant Domingo Empaynado and all persons claiming rights under him to vacate the residential house or extension thereof at the lot known as No. 88-D, Phase 4, Pook Amorsolo, U.P. Campus and to surrender the same peacefully to the plaintiffs. The defendant is likewise required to pay all unpaid rentals at the rate of P550.00 a month from July 1985 up to the time the defendant vacates the premises at bar; and to pay the plaintiff P700.00 as reasonable attorney’s fee and the costs of suit.

"SO ORDERED." (pp. 21-22, Rollo)

Domingo Empaynado appealed the decision to the Regional Trial Court which rendered a decision dated June 2, 1986 dismissing the case for ejectment for lack of jurisdiction on the part of the trial court. The decision reads:jgc:chanrobles.com.ph

"ACCORDINGLY, in the light of the foregoing disquisition, on the ground of lack of jurisdiction, the decision appealed from is hereby set aside and this case ordered dismissed, without pronouncement as to costs.

"SO ORDERED." (p. 25, Rollo)

Spouses Marciano and Segundina Bandoy filed a petition for review of the decision of the Regional Trial Court to the Court of Appeals. In a decision promulgated on January 14, 1987, the Court of Appeals dismissed the case also for lack of jurisdiction on the part of the trial court. The decision reads, in part:jgc:chanrobles.com.ph

"x       x       x

"And where the Metropolitan Trial Court did not acquire jurisdiction, the above jurisprudence would hold and all we can do is to dismiss the case for lack of jurisdiction.

"WHEREFORE, there having been no error committed by the Regional Trial Court, the petition for review is hereby DENIED.

"SO ORDERED." (pp. 30-31, Rollo)

Not satisfied with the decision of the Court of Appeals, petitioners come to Us on a lone assignment of error, that:jgc:chanrobles.com.ph

"THE HONORABLE COURT OF APPEALS ERRED IN DENYING THE PETITION FOR REVIEW AND IN AFFIRMING THE RULING OF THE REGIONAL TRIAL COURT THAT THE METROPOLITAN TRIAL COURT DID NOT ACQUIRE JURISDICTION OVER THE CASE."cralaw virtua1aw library

It is the contention of petitioners that no further demand to vacate was made by petitioners after the certification to file was issued by the Barangay captain for the reason that the case was already certified for court action. Under this situation, any further demand to vacate was merely repetitive and unnecessary.

There is no merit in this contention.

It is not disputed that the complaint contains no allegation that there was a prior demand to vacate made by the petitioners upon private Respondent. It is a settled rule that "where the complaint contains no allegation that a demand had been made upon the defendant to vacate the premises but only an allegation that a demand was made for payment of the rentals agreed upon, it is held that such allegation is insufficient to confer jurisdiction upon a justice of the peace court" (Casilan v. Tomassi, Et Al., 10 SCRA 261, 264; Santos v. Vivas, 96 Phil. 538, 540). The certification issued by the office of the barangay captain is not conclusive as to the jurisdiction of the court to which the case was subsequently filed. What was certified by the barangay captain was that no settlement was reached by the parties in the barangay level. It did not certify that all the requisites for the filing of an unlawful detainer case had been complied with.

In the case of Co Tiamco v. Diaz, L-7, January 22, 1946 (75 Phil. 672), relied upon by petitioners, there was no allegation in the complaint that a notice to quit or vacate was made upon the defendants. However, during the presentation of evidence, plaintiffs offered Exhibit "A" as evidence, which is a notice to quit alleged to have been served upon defendants prior to the filing of the action. This was objected to by the defendants and the objection was sustained by the trial court. The defendants filed with the Court of First Instance a petition for mandamus to compel the municipal court judge to admit Exhibit "A." By virtue of a writ of mandamus issued by the Court of First Instance, the evidence was admitted. In that case, it was held that:jgc:chanrobles.com.ph

"even supposing without conceding, that the complaint is deficient (in not alleging the notice to quit) the deficiency was cured by the evidence." (p. 679, supra)

But, the above case of Co Tiamco cannot be applied in this case. In the Co Tiamco case, it was proven that there was indeed a notice to quit or demand to vacate served upon the defendants. The notice to vacate was offered and admitted in evidence. In the case at bar, the complaint was defective because of its failure to allege that there was a prior demand to vacate. The defect was not cured because no evidence of a prior demand to vacate was presented in the trial court. The affidavit of Empaynado relied upon by the trial judge to the effect that: "na ako ang tinutukoy ni Marciano Tamis Bandoy dahil di umano’y sa di magandang asal namin na gusto niyang paalisin sa kanyang extension", does not prove that the spouses demanded that he vacate the premises. What Empaynado admitted in the said affidavit was that the spouses intended to expel him out of the premises ("gusto niyang paalisin") but has not actually or definitely demanded that he vacate the premises. An intention to oust is different from an actual or definite demand to vacate. It is the latter which confers jurisdiction upon the municipal court.

ACCORDINGLY, the petition is DENIED. The decision of respondent Court of Appeals is affirmed. No costs.

SO ORDERED.

Narvasa, Cruz, Gancayco and Griño-Aquino, JJ., concur.

G.R. No. 77266 July 19, 1989 - ARTHUR PAJUNAR, ET AL. v. COURT OF APPEALS, ET AL.

2012-11-11T16:53:05+00:00

SECOND DIVISION

[G.R. No. 77266. July 19, 1989.]

ARTHUR PAJUNAR and INVENCIA PAJUNAR, Petitioners, v. HON. COURT OF APPEALS, MAURO ELUNA and TEOFILA ELUNA, Respondents.

SYLLABUS

1. REMEDIAL LAW; APPEAL; WHEN FINDINGS OF FACTS OF THE TRIAL COURT CARRY GREAT WEIGHT. — The trial court’s findings of facts carry great weight for having the advantage of having examined the deportment and demeanor of the witnesses. The only exception to the rule is when the trial court plainly overlooked certain facts and circumstances of weight and influence which, if considered, will materially alter the result of the case (People v. Ramos, 153 SCRA 276 [1987]; People v. Camay, 152 SCRA 401 [1987]).

2. ID.; ID.; WHEN FINDINGS OF FACTS OF THE COURT OF APPEALS GENERALLY BINDING ON THE SUPREME COURT. — Well-settled is the rule that findings of facts of the Appellate Court are generally binding on this Court (People v. Atanacio, 128 SCRA 22 [1984] Aguirre v. People, 155 SCRA 337 [1987]; Cue Bie v. Intermediate Appellate Court, 154 SCRA 599 [1987]). However, there are exceptions to the general rule that findings of facts of the Court of Appeals are binding upon the Supreme Court as when the Court of Appeals clearly misconstrued and misapplied the law, drawn from incorrect conclusions of fact established by evidence and otherwise at certain conclusions which are based on misapprehension of facts and pure conjectures, and made inferences which are manifestly mistaken and absurd (Chase v. Buencamino, Jr., 136 SCRA 365 [1985]; and other case cited).

3. ID.; ID.; PERSON CONSIDERED POSSESSOR IN GOOD FAITH. — Respondents are not possessors in good faith, as a possessor in good faith is one not aware that there exists in his title or mode of acquisition any flaw which invalidates it. Furthermore, failure of a party to exercise precaution to acquaint himself with the defects in the title of his vendor precludes him claiming possession in good faith (Caram v. Laureta, 103 SCRA [1981] cited in Manotok Realty, Inc. v. Court of Appeals, 134 SCRA 325 [1985]).

4. ID.; ID.; PRESCRIPTIVE PERIODS FOR POSSESSOR IN GOOD FAITH AND POSSESSOR IN BAD FAITH, NOT APPLICABLE IN CASE AT BAR; OWNER MAY RECOVER MOVABLE THAT HAS BEEN LOST OR ILLEGALLY TAKEN WITHOUT REIMBURSEMENT. — The duty to make a closer inquiry into the certificate of registration of the female carabao which was the subject of the barter, defendant Mauro Eluna should have performed but did not. Thus, his being in bad faith, in acquiring the carabao from his vendor, Aurelio Enopia. Thus, as has been stressed by this Court: "A purchaser cannot close his eyes to facts which should put a reasonable man upon his guard, and then claim that he acted in good faith under the belief that there was no defect in the title of the vendor. His mere refusal to believe that such defect exists, or his willful closing of the eyes to the possibility of the existence of a defect in his vendor’s title will not make him an innocent purchaser for value, if it afterwards develops that the title was in fact defective and it appears that he had such notice of the defect would have led to its discovery had he acted with the measure of precaution which may reasonably be required of a prudent man in a like situation." (Leung Lee v. Strong, 37 Phil. 644). It is clear from the foregoing that possession in good faith for four (4) years is not applicable, neither can possession in bad faith of eight (8) years benefit respondents, for when the owner of a movable has lost or has been illegally deprived of his property he can recover the same without need to reimburse the possessor, as provided in Art. 559 of the Civil Code. Neither can Art. 716 of the Civil Code apply, for this article evidently refers to a possessor in good faith.

D E C I S I O N

PARAS, J.:

This is a petition for review on certiorari seeking to set aside the decision of the Second Division of the Court of Appeals ** in C.A. G.R. No. SP. 02247 (UDK 7544), entitled "Arthur & Invencia Pajunar v. Hon. Pedro Gabaton, Judge, RTC, Branch XLI, Negros Oriental, Mauro Eluna and Teofila Eluna" for Recovery of Personal Property with Writ of Replevin which affirmed the Order of the aforenamed Regional Trial Court of Negros Oriental *** which reads:jgc:chanrobles.com.ph

"This is a case of Recovery of Personal Property with a Writ of Replevin filed by one Arthur and Invencia Pajunar as plaintiffs, against one Mauro and Teofila Eluna as defendants, tried and decided by the Municipal Court of Siaton.

"The decision is in favor of the defendants and against the plaintiffs apparently based primarily on the preponderance of evidence and prescription.

"Upon close reading of the exhaustive memorandum submitted by each of the parties in this case and a close perusal of all the evidences on record and checking them against the decision itself appealed, this court is of the opinion and so holds that the grounds upon which this decision is based are well taken, so that there is nothing that this court can add neither can deduct for the same conforms to the thinking of this court.

"WHEREFORE, premises considered, the appealed decision of the above-entitled case rendered by the Municipal Court of Siaton is hereby affirmed." (Rollo, p. 9)

The facts of the case as found by public respondent Court of Appeals are as follows:chanrob1es virtual 1aw library

Sometime in 1969, respondent Mauro Eluna bartered his three-year old male cow for one year old female carabao then in the possession of Aurelio Enopia. The female carabao, which is the one in question, bore the brand "ART" in her front and hind legs at the time she was acquired by Mauro. Although the animal was branded, said respondent did not or could not register the transfer to him.chanrobles virtual lawlibrary

In March, 1980, petitioner Arthur Pajunar learned that the disputed carabao was in the possession of respondent Eluna. Claiming that he was the original owner of the carabao which got lost in 1974, petitioner demanded her return. He demanded also the delivery to him of the two offsprings of the carabao which were five years and eight months old at the time they were registered in 1980. When Eluna refused to do so despite repeated demands, petitioner went to court to recover possession. (Rollo, pp. 10-11).

From the adverse order of the Regional Trial Court, plaintiff appealed to public respondent Court of Appeals.

In its decision dated October 30, 1986, the Court of Appeals affirmed the decision of the lower court, with appellate tribunal declaring:jgc:chanrobles.com.ph

"Consequently, since respondent Eluna had possessed the carabao since 1969, that is, for more than ten (10) years, he acquired ownership by prescription under Article 1132 of the Civil Code.

"ART. 1132. The ownership of movables prescribes through uninterrupted possession for four years in good faith.

"The ownership of personal property also prescribes through uninterrupted possession for eight years, without need of any other condition.

"With regard to the right of the owner to recover personal property lost or of which he has been illegally deprived, as well as with respect to movables acquired in a public sale, fair or market, or from a merchant’s store, the provisions of articles 559 and 1505 of this Code shall be observed. (1955a)."cralaw virtua1aw library

On March 23, 1987, the Court resolved, after considering the pleadings filed by both respondent and petitioner, to give due course to the petition.

The three assignments of error raised by the petitioner (Rollo, p. 4) in this case, may be reduced to one main issue:jgc:chanrobles.com.ph

"Whether or not the findings of the lower court which were affirmed by the Court of Appeals are supported by substantial evidence."cralaw virtua1aw library

Petitioner contends that private respondent Eluna has failed to establish his ownership of the mestisa carabao found in his possession. Since the female carabao bears the brand "ART" on the fore and hind legs of the animal as branded by petitioners before it got lost (Rollo, p. 4), failure of defendant Mauro Eluna to register in his name the said carabao, constitutes a flaw in his ownership as required by law (Rollo, pp. 10-11).

Private respondents claim that the female carabao has been in their possession for more than ten (10) years as the subject carabao was acquired by the defendants now respondents through barter from one Aurelio Enopia in 1969. The incident was discovered by the plaintiffs only in March, 1980. Hence respondents acquired ownership of said carabao by prescription under Article 1132 of the Civil Code (Rollo, p. 12) as found by public respondent Court of Appeals.

The trial court’s findings of facts carry great weight for having the advantage of having examined the deportment and demeanor of the witnesses. The only exception to the rule is when the trial court plainly overlooked certain facts and circumstances of weight and influence which, if considered, will materially alter the result of the case (People v. Ramos, 153 SCRA 276 [1987]; People v. Camay, 152 SCRA 401 [1987]).

A careful examination of the records shows that there are circumstances of substance and value which were overlooked and which affect the result of the case.

This can be gleaned from the decision of the Court of Appeals, when it stated:jgc:chanrobles.com.ph

"In issuing the foregoing order, the respondent Judge apparently relied on the findings of fact and conclusions of law made by the Municipal Court of Siaton, Negros Oriental. Unfortunately, the decision of the Municipal Court was wanting in many respects particularly in its findings. It failed, for instance, to make a determination of certain factual matters which could have helped in the faster disposition of the case. Instead of general statements explaining why he was adopting the decision of the Municipal Court, it would have been better if the respondent Judge had made his own finding and analysis of the evidence on record. This was called for because the respondent Judge was acting in the exercise of the appellate jurisdiction of his court." (Emphasis supplied) (Rollo, p. 10)

Well-settled is the rule that findings of facts of the Appellate Court are generally binding on this Court (People v. Atanacio, 128 SCRA 22 [1984] Aguirre v. People, 155 SCRA 337 [1987]; Cue Bie v. Intermediate Appellate Court, 154 SCRA 599 [1987]). However, there are exceptions to the general rule that findings of facts of the Court of Appeals are binding upon the Supreme Court as when the Court of Appeals clearly misconstrued and misapplied the law, drawn from incorrect conclusions of fact established by evidence and otherwise at certain conclusions which are based on misapprehension of facts and pure conjectures, and made inferences which are manifestly mistaken and absurd (Chase v. Buencamino, Jr., 136 SCRA 365 [1985]; Baliwag Transit, Inc. v. CA, 147 SCRA 82 [1987]; International Harvester, Inc. v. Joson & CA, 149 SCRA 641 [1987]; Maclan v. Santos, 156 SCRA 542 [1987]; Mendoza v. CA, 156 SCRA 597 [1987]).chanrobles virtualawlibrary chanrobles.com:chanrobles.com.ph

From the records it is clear that although the animal was branded "ART" in her front and hind legs at the time she was acquired by respondent Mauro, said respondent did not or could not register the transfer to him in accordance with Section 529 of the Revised Administrative Code (Rollo, p. 11).

Section 529 of the Revised Administrative Code provides:jgc:chanrobles.com.ph

"Registration necessary to validity of transfer. No transfer shall be valid unless the same is registered and a certificate of transfer obtained as herein provided, but the large cattle under two years of age may be registered and branded gratis for the purpose of effecting a valid transfer, if the registration and transfer are made at the same time."cralaw virtua1aw library

The records show that respondents did not comply with this requirement (Petition, p. 2; Rollo, p. 3). Respondents are not possessors in good faith, as a possessor in good faith is one not aware that there exists in his title or mode of acquisition any flaw which invalidates it. Furthermore, failure of a party to exercise precaution to acquaint himself with the defects in the title of his vendor precludes him claiming possession in good faith (Caram v. Laureta, 103 SCRA [1981] cited in Manotok Realty, Inc. v. Court of Appeals, 134 SCRA 325 [1985]).

This duty to make a closer inquiry into the certificate of registration of the female carabao which was the subject of the barter, defendant Mauro Eluna should have performed but did not. Thus, his being in bad faith, in acquiring the carabao from his vendor, Aurelio Enopia.

Thus, as has been stressed by this Court:jgc:chanrobles.com.ph

"A purchaser cannot close his eyes to facts which should put a reasonable man upon his guard, and then claim that he acted in good faith under the belief that there was no defect in the title of the vendor. His mere refusal to believe that such defect exists, or his willful closing of the eyes to the possibility of the existence of a defect in his vendor’s title will not make him an innocent purchaser for value, if it afterwards develops that the title was in fact defective and it appears that he had such notice of the defect would have led to its discovery had he acted with the measure of precaution which may reasonably be required of a prudent man in a like situation." (Leung Lee v. Strong, 37 Phil. 644, see also Emos v. Zusuarregui, 53 Phil. 197, cited in Francisco v. Court of Appeals, 153 SCRA 330).

It is clear from the foregoing that possession in good faith for four (4) years is not applicable, neither can possession in bad faith of eight (8) years benefit respondents, for when the owner of a movable has lost or has been illegally deprived of his property he can recover the same without need to reimburse the possessor, as provided in Art. 559 of the Civil Code which states:jgc:chanrobles.com.ph

"Art. 559. The possession of movable property acquired in good faith is equivalent to a title. Nevertheless, one who has lost any movable or has been unlawfully deprived thereof, may recover it from the person in possession of the same.chanrobles.com.ph : virtual law library

"If the possessor of a movable lost or of which the owner has been unlawfully deprived, has acquired it in good faith at a public sale, the owner cannot obtain its return without reimbursing the price paid therefor." (464a)

Neither can Art. 716 of the Civil Code apply, for this article evidently refers to a possessor in good faith. Art. 716 say:jgc:chanrobles.com.ph

"The owner of a swarm of bees shall have a right to pursue them to another’s land, indemnifying the possessor of the latter for the damage. If the owner has not pursued the swarm, or ceases to do so within two consecutive days, the possessor of the land may occupy or retain the same. The owner of domesticated animals may also claim them within twenty days to be counted from their occupation by another person. This period having expired, they shall pertain to him who has caught and kept them." (612a)

PREMISES CONSIDERED, the decision of the Court of Appeals in CA-G.R. SP No. 02247 is REVERSED and SET ASIDE and petitioners Arthur Pajunar and Invencia Pajunar are declared the owners of the carabaos in question.

SO ORDERED.

Melencio-Herrera, (Chairman), Padilla, Sarmiento and Regalado, JJ., concur.

Endnotes:

** Penned by Justice Ricardo L. Pronove, Jr., concurred in by Justices Crisolito Pascual and Luis A. Javellana.

*** Rendered by Hon. Pedro Gabaton, Judge, RTC Branch XLI, Negros Oriental.

G.R. No. 78755 July 19, 1989 - GOLDEN FARMS, INC. v. PURA FERRER-CALLEJA, ET AL.

2012-11-11T16:53:05+00:00

SECOND DIVISION

[G.R. No. 78755. July 19, 1989.]

GOLDEN FARMS, INC., Petitioner, v. THE HONORABLE DIRECTOR PURA FERRER-CALLEJA, BUREAU OF LABOR RELATIONS and NATIONAL FEDERATION OF LABOR, Respondents.

J.V. Yap Law Office for Petitioner.

Beethoven L. Orcullo for Private Respondent.

SYLLABUS

1. LABOR LAWS; COLLECTIVE BARGAINING AGREEMENT; MUST BE RESPECTED WHEN VOLUNTARILY AND FREELY ENTERED; PARTY MAY NOT BE COMPELLED TO ACCEPT CHANGES DURING ITS DURATION. — Respondents do not dispute the existence of said collective bargaining agreement. We must therefore respect this CBA which was freely and voluntarily entered into as the law between the parties for the duration of the period agreed upon. Until then no one can be compelled to accept changes in the terms of the collective bargaining agreement.

2. ID.; ID.; MANAGERIAL EMPLOYEES; DISQUALIFIED FROM BARGAINING BY THE NATURE AND FUNCTIONS OF POSITION. — The signatories to the petition for certification election are the very type of employees by the nature of their positions and functions which We have decreed as disqualified from bargaining with management in case of Bulletin Publishing Co. Inc. v. Hon. Augusto Sanchez, etc. (144 SCRA 628) reiterating herein the rationale for such ruling as follows: if these managerial employees would belong to or be affiliated with a Union, the latter might not be assured of their loyalty to the Union in view of evident conflict of interests or that the Union can be company-dominated with the presence of managerial employees in Union membership.

3. ID.; ID.; ID.; DEFINITION. — A managerial employee is defined under Art. 212 (k) of the new Labor Code as "one who is vested with powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees, or to effectively recommend such managerial actions. All employees not falling within this definitions are considered rank-and-file employees for purposes of this book."cralaw virtua1aw library

4. ID.; ID.; ID.; CONFIDENTIAL EMPLOYEES ARE LIKEWISE DISQUALIFIED. — This rationale holds true also for confidential employees such as accounting personnel, radio and telegraph operators, who having access to confidential information, may become the source of undue advantage. Said employee(s) may act as a spy or spies of either party to a collective bargaining agreement. This is specially true in the present case where the petitioning Union is already the bargaining agent of the rank-and-file employees in the establishment. To allow the confidential employees to join the existing Union of the rank-and-file would be in violation of the terms of the Collective Bargaining Agreement wherein this kind of employees by the nature of their functions/positions are expressly excluded.

5. ID.; ID.; ID.; COMPANY FOREMEN ARE ALSO DISQUALIFIED. — As to the company foremen, while in the performance of supervisory functions, they may be the extension or alter ego of the management. Adversely, the foremen, by their actuation, may influence the workers under their supervision to engage in slow down commercial activities or similar activities detrimental to the policy, interest or business objectives of the company or corporation, hence they also cannot join.

D E C I S I O N

PARAS, J.:

Petitioner Golden Farms, Inc., seeks a reversal of the resolution of public respondent Department of Labor and Employment Director Pura Ferrer-Calleja in BLR Case No. A-2-56-87 which affirmed on appeal the decision of Labor Arbiter Conrado 0. Macasa, Sr., in NLRC Case No. R-418-ROXI-MED-UR-88-86, issuing a directive as follows:jgc:chanrobles.com.ph

"In view of the foregoing, the herein petition for certification election filed by the National Federation of Labor (NFL) is hereby DISMISSED; whereas, its resultant and relevant consequence of its recognized representation of the entire rank-and-file employees of the bargaining unit should be given life and meaning, as it is hereby directed, and Employer Golden Farms, Incorporated likewise enjoined to negotiate for a supplementary collective bargaining agreement, or for the inclusion of the herein monthly paid rank-and-file employees at Luna, Kapalong, Davao del Norte, and Lanang, Davao City in the still existing negotiated contract, whichever the parties may consider just and appropriate under the circumstances."cralaw virtua1aw library

SO ORDERED. (p. 29, Rollo)

The case originated as a Petition for Direct Certification Election or Recognition filed by herein private respondent in behalf of certain office employees and foremen before Regional Office No. XI, Davao City of the Ministry of Labor and Employment. Petitioner herein opposed said petition on the ground among others that a perusal of the names allegedly supporting the said petition showed that said persons by the nature of their jobs are performing managerial functions and/or occupying confidential positions such that they cannot validly constitute a separate or distinct group from the existing collective bargaining unit also represented by private Respondent.chanrobles lawlibrary : rednad

Petitioner is a corporation engaged in the production of bananas for export. Private respondent Union represents the employees/workers of petitioner corporation, who were the same signatories to an earlier Petition for Certification Election filed in 1984 before the Ministry of Labor known as ROXI Case No. UR-70-84, which was dismissed by a Resolution issued by Med-Arbiter Conchita Martinez when it was established that a collective bargaining unit (NFL) between the Corporation and the rank-and-file employees was and is in existence at the time of the filing of the said petition for certification election until the present filing. However, in the order of dismissal, it was stated:jgc:chanrobles.com.ph

"After taking into consideration the functions exercised by the foremen as contained in their joint affidavits (Annexes "A-1", "A-2" & "A-3", Petitioner’s Position Paper) apparently, they fall within the classification of rank-and-file employees. For, as consistently ruled in a long line of decisions, mere supervisory designations in the position titles, do not make the holders of such positions any less rank and filers, without the convincing proof that such supervisory designations are coupled with actual performance of managerial functions. In the cases at bar, what was submitted by the respondent companies are only lists of employees holding the positions of foremen and confidential positions and as such are not covered by the bargaining unit. Such piece of evidence alone does not constitute convincing proof for us to adapt respondents’ stance (Annexes "A", "B", "C", & "D"). Comment on Petition).

(p. 13, Rollo)

Having had no opportunity to contest the abovementioned statement in the order of dismissal, petitioner herein as private respondent therein, filed a "Manifestation" stating among others:jgc:chanrobles.com.ph

"2. That since the petitions were dismissed the herein employees make clear for the record that said view would run counter to the provision of the pertinent Collective Bargaining Agreement whereby the foremen were already acknowledged and agreed upon to be managerial employees and accordingly excluded from the coverage of the said CBA;

"3. That with respect to those employees holding confidential positions, it is a basic principle that they cannot be included in any bargaining unit, the fact being that having access to confidential informations, said employees may be the source of undue advantage. Said employees may act as spies for either parties to collective bargaining agreement. This is especially true in this case where the petitioning union is already the bargaining agent of the rank-and-file employees in the establishment. To allow confidential employees to join existing bargaining unit will defeat the very purpose for which an employee holding confidential position was in the first place excluded."cralaw virtua1aw library

(p. 68, Rollo)

Private respondent herein as petitioner therein appealed the order of dismissal which was accordingly opposed (Annex "L" p. 69, Rollo) by Golden Farms, Inc., reiterating the grounds and arguments set forth in its Manifestation filed earlier. The appeal was dismissed and subsequently the National Federation of Labor Union refiled the Petition for Certification in NLRC Case No. R-418-ROX-MED-UR-88-86 which was also dismissed. Said order of dismissal is now the subject of this review for containing directives not within the power of a Med-Arbiter to issue. Petitioner Golden Farms, Inc., now poses the following questions:chanrob1es virtual 1aw library

I — HAS A MED-ARBITER THE POWER OR AUTHORITY TO DIRECT MANAGEMENT TO ENTER INTO A SUPPLEMENTAL COLLECTIVE BARGAINING AGREEMENT WITH A CONTRACTING UNION.

II — MAY SUPERVISORS, CASHIERS, FOREMEN, AND EMPLOYEES HOLDING CONFIDENTIAL/MANAGERIAL FUNCTION COMPEL MANAGEMENT TO ENTER INTO A COLLECTIVE BARGAINING AGREEMENT WITH THEM.

(p. 14, Rollo)

The petition merits Our consideration.

Respondents relied heavily on the alleged finding of Med-Arbiter Martinez that the employees who were signatories to the petition for certification election and represented by respondent Union are actually rank-and-file workers not disqualified from entering into a collective bargaining agreement with management. In said findings of fact, Med-Arbiter Martinez singled out in her classification as rank-and-file employees the foremen of Petitioner Corporation considered from their joint affidavits and for lack of convincing proof that their supervisory designations are coupled with the actual performance of managerial functions.chanrobles virtual lawlibrary

Whether or not such finding is supported by the evidence is beside the point. Respondents herein do not dispute that the signatories (listed in Annex "A", page 30, Rollo) to the Petition for certification election subject of this case, were holding the positions of cashier, purchasers, personnel officers, foremen and employees having access to confidential information such as accounting personnel, radio and telegraph operators and head of various sections. It is also a fact that respondent Union is the exclusive bargaining Unit of the rank-and-file employees of petitioner corporation and that an existing CBA between petitioner corporation and the Union representing these rank-and-file employees was still enforced at the time the Union filed a petition for certification election in behalf of the aforementioned signatories. Under the terms of said CBA (Annex "E", p. 40, Rollo) it is expressly provided that:jgc:chanrobles.com.ph

"Section 1. The COMPANY and the UNION hereby agree that the recognized bargaining unit for purposes of this agreement shall consist of regular rank-and-file workers employed by the COMPANY at the plantation presently situated at Alejal, Carmen, Davao. Consequently, all managerial personnel like, superintendents, supervisor, foremen, administrative, professional and confidential employees, and those temporary, casual, contractual, and seasonal workers are excluded from the bargaining unit and therefore, not covered by this agreement."cralaw virtua1aw library

(p, 41, Rollo)

Respondents do not dispute the existence of said collective bargaining agreement. We must therefore respect this CBA which was freely and voluntarily entered into as the law between the parties for the duration of the period agreed upon. Until then no one can be compelled to accept changes in the terms of the collective bargaining agreement.

Furthermore, the signatories to the petition for certification election are the very type of employees by the nature of their positions and functions which We have decreed as disqualified from bargaining with management in case of Bulletin Publishing Co. Inc. v. Hon. Augusto Sanchez, etc. (144 SCRA 628) reiterating herein the rationale for such ruling as follows: if these managerial employees would belong to or be affiliated with a Union, the latter might not be assured of their loyalty to the Union in view of evident conflict of interests or that the Union can be company-dominated with the presence of managerial employees in Union membership. A managerial employee is defined under Art. 212 (k) of the new Labor Code as "one who is vested with powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees, or to effectively recommend such managerial actions. All employees not falling within this definitions are considered rank-and-file employees for purposes of this Book."cralaw virtua1aw library

This rationale holds true also for confidential employees such as accounting personnel, radio and telegraph operators, who having access to confidential information, may become the source of undue advantage. Said employee(s) may act as a spy or spies of either party to a collective bargaining agreement. This is specially true in the present case where the petitioning Union is already the bargaining agent of the rank-and-file employees in the establishment. To allow the confidential employees to join the existing Union of the rank-and-file would be in violation of the terms of the Collective Bargaining Agreement wherein this kind of employees by the nature of their functions/positions are expressly excluded.

As to the company foremen, while in the performance of supervisory functions, they may be the extension or alter ego of the management. Adversely, the foremen, by their actuation, may influence the workers under their supervision to engage in slow down commercial activities or similar activities detrimental to the policy, interest or business objectives of the company or corporation, hence they also cannot join.chanrobles law library : red

WHEREFORE, finding the assailed directive of Med-Arbiter Conrado O. Macasa, Sr. which was affirmed by Director Pura Ferrer-Calleja reiterating the directive of Med-Arbiter Conchita Martinez "to negotiate for a supplementary collective bargaining agreement, or for the inclusion of the herein monthly paid rank-and-file employees" to be erroneous as it is in complete disregard of the terms of the collective bargaining agreement, the same is hereby DECLARED to be without force and effect.

SO ORDERED.

Melencio-Herrera, Padilla, Sarmiento and Regalado, JJ., concur.

G.R. No. 79913 July 19, 1989 - EDUARDO TALLA v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

2012-11-11T16:53:05+00:00

FIRST DIVISION

[G.R. No. 79913. July 19, 1989.]

EDUARDO TALLA, Petitioner, v. NATIONAL LABOR RELATIONS COMMISSION (NLRC), THIRD DIVISION, AND FIRST UNITED METAL WORKS CORPORATION, Respondents.

SYLLABUS

1. LABOR LAWS; TERMINATION OF EMPLOYMENT; WHEN EXECUTION OF A QUITCLAIM ESTOPS EMPLOYEE FROM FURTHER MONEY CLAIM. — The general rule is that once an employee resigns and executes a quitclaim in favor of the employer, he is thereby estopped from filing any further money claims against the employer arising from his employment. It is only when the voluntariness of the execution of the quitclaim or release is put into issue or when it is established that there is an unwritten agreement between the employer and employee upon resignation entitling the employee to other remuneration or benefits when such a money claim of the employee may be given due course.

2. ID.; ID.; ID.; CASE AT BAR. — In this case, it is not denied that after the resignation of the petitioner he nevertheless received three checks from the private respondent dated October 10, 1984, October 16, 1984 and October 26, 1984. He was able to encash one (1) check in the amount of P2,080.00 but the payment of the other two was stopped by private Respondent. Since petitioner had resigned as early as August 31, 1984, there was no reason why said three (3) checks would fall into his hands after he severed connections with private respondent if it were not intended as payment to him. Indeed, petitioner encashed one of the checks. The only logical conclusion is that there was a parallel agreement between the parties upon the execution of the quitclaim and release that private respondent shall pay petitioner the commissions due him for the sales he made.

3. REMEDIAL LAW; PLEADINGS AND PRACTICE; RELIEF MAY NOT BE SOUGHT IF NOT ALLEGED IN THE COMPLAINT. — Petitioner can not ask for relief not alleged and prayed for in his complaint. Since he was only claiming his commission, he cannot claim other alleged amounts due him.

D E C I S I O N

GANCAYCO, J.:

Is an employee precluded from filing any claim against the employer after his resignation and the execution of a quitclaim accompanying the same? This is the issue raised in this petition.

Petitioner was employed as a salesman of private respondent on or about December 1, 1982, with a monthly salary of P1,300.00 and a 3% commission on all of his sales. On August 31, 1984 he submitted his letter of resignation and a quitclaim releasing the private respondent from any money claims he may have. After some time, petitioner filed a complaint in the Ministry of Labor and Employment against private respondent for non-payment of commission, sick and vacation leaves and 13th month pay. The matter was referred to a labor arbiter who, after requiring the parties to submit their position papers, rendered a decision dated March 18, 1986 awarding the petitioner the amount of P35,273.92 for unpaid commissions/overprice. The other claims relating to 13th month pay, vacation and sick leaves and service incentive leave of petitioner were dismissed. Private respondent appealed to the National Labor Relations Commission (NLRC), wherein in due course a decision dated June 30, 1987 was rendered reversing the appealed decision and dismissing the complaint for lack of merit.

Hence, the herein petition wherein petitioner urges that he is not precluded from filing a money claim against the private respondent despite the resignation letter and quitclaim he executed.

The petition is impressed with merits. The general rule is that once an employee resigns and executes a quitclaim in favor of the employer, he is thereby estopped from filing any further money claims against the employer arising from his employment. It is only when the voluntariness of the execution of the quitclaim or release is put into issue or when it is established that there is an unwritten agreement between the employer and employee upon resignation entitling the employee to other remuneration or benefits when such a money claim of the employee may be given due course.

In this case, it is not denied that after the resignation of the petitioner he nevertheless received three checks from the private respondent dated October 10, 1984, October 16, 1984 and October 26, 1984. 1 He was able to encash one (1) check in the amount of P2,080.00 but the payment of the other two was stopped by private Respondent.

Private respondent admitted that during the employment of petitioner he was paid a salary of P1,300.00 monthly and he was also entitled to a 3% commission but not to overprice. However, it denied owing petitioner any amount as in fact the petitioner executed a quitclaim and release. Private respondent also points out that the three checks payable to cash were commissions to be given to certain third parties for the sale of its products.

The Court finds no merit in this pretension of private Respondent. Since petitioner had resigned as early as August 31, 1984, there was no reason why said three (3) checks would fall into his hands after he severed connections with private respondent if it were not intended as payment to him. Indeed, petitioner encashed one of the checks. The only logical conclusion is that there was a parallel agreement between the parties upon the execution of the quitclaim and release that private respondent shall pay petitioner the commissions due him for the sales he made.

The Court, however, is not persuaded that aside from the commission, the petitioner is entitled to an overprice. An examination of the original complaint filed by petitioner with the Ministry of Labor and Employment shows that he was only seeking the payment of commissions. 2 There is no mention of an overprice.

However, when petitioner was referred to the labor arbiter he was made to submit his position paper he claimed not only the commissions but for the first time the alleged overprice. The private respondent traversed this claim by asserting that only a 3% commission and not an overprice was allowed petitioner during his employment.

Suffice it to state that petitioner can not ask for relief not alleged and prayed for in his complaint. Since he was only claiming his commission, he cannot claim other alleged amounts due him. 3

In the appealed decision of the labor arbiter petitioner was awarded the total amount of P35,273.92, as follows:jgc:chanrobles.com.ph

"Complainant’s total unpaid commission/overprice is P35,273.92, computed as follows:chanrob1es virtual 1aw library

3% Commission for Saniwares — P4,515.00

Saniwares Remaining overprice — 21,250.00

Saniwares Additional — 2,560.00

Warner Lambert — 248.92

California Mfg. — 4,000.00

Saniwares — 2,700.00

P35,273.92"

In the above summary, P4,515.00 represents the 3% commission for saniwares; P248.92 is the commission due from Warner Lambert; P4,000.00 represents the commission from California Manufacturing which was paid by check No. CBC 840500 in the amount of P3,600.00 after deducting 10% tax payment, the encashment of which was stopped by private respondent; P2,700.00 representing the commission from Saniwares paid by check No. CBC 840502 dated November 16, 1984 but which was returned unpaid as payment was stopped by private respondent, or a total amount of P11,463.92. Deducting therefrom the amount of P2,080.00 which was the amount of the check encashed by petitioner, private respondent should pay the balance of P9,383.92 to petitioner as unpaid commissions.

WHEREFORE, the petition is GRANTED. The questioned decision of the respondent National Labor Relations dated June 30, 1987 is hereby SET ASIDE. In lieu thereof, another decision is hereby rendered ordering the private respondent to pay petitioner his unpaid commissions in the amount of NINE THOUSAND THREE HUNDRED EIGHTY-THREE PESOS AND NINETY-TWO CENTAVOS (P9,383.92). No costs. This decision is immediately executory.

SO ORDERED.

Narvasa, Cruz, Griño-Aquino and Medialdea, JJ., concur.

Endnotes:

1. Annexes A, B, and C of the petition of the Solicitor General.

2. Annex A to the Petition.

3. Gotamco v. Chan Seng and Razon, 46 Phil. 542, at 550 (1924).

G.R. No. 81269 July 19, 1989 - LIBERTY COMMERCIAL CENTER, INC. v. PURA FERRER CALLEJA, ET AL.

2012-11-11T16:53:05+00:00

FIRST DIVISION

[G.R. No. 81269. July 19, 1989.]

LIBERTY COMMERCIAL CENTER, INC., Petitioner, v. PURA FERRER CALLEJA-BLR DIRECTOR/SAMAHANG MANGGAGAWA NG LIBERTY COMMERCIAL CENTER-ORGANIZED LABOR ASSOCIATION IN LINE INDUSTRIES AND AGRICULTURE (SMLCC-OLALIA-KMU), Respondents.

SYLLABUS

1. LABOR LAWS; COLLECTIVE BARGAINING; UNIONS CONSIDERED REGISTERED IN THE ABSENCE OF STRONG EVIDENCE TO THE CONTRARY. — An examination of the record clearly shows that both the ALCCE and the LEA are duly registered unions of petitioner’s employees in its two separate offices, one at Tabaco, Albay and the other at Legaspi City. The certificates of registration of both unions appear to be authentic even considering that both unions were organized and registered on the same date. In the absence of strong evidence to the contrary, both ALCCE and LEA must be considered registered unions representing the employees of petitioner in two separate offices.

2. ID.; ID.; AUTHENTICITY OF NOTARIZED COLLECTIVE BARGAINING AGREEMENTS. — Notwithstanding the observation of public respondent that the certificates of registration were executed on the same dates thus casting doubt on their authenticity, it appears that the two collective bargaining agreements are notarized documents bearing the certifications of ratification and the signatures of the ratifying employees. The authenticity of both collective bargaining agreements must be sustained.

3. ID.; ID.; CERTIFICATION ELECTION; DISMISSAL OF PETITION FILED BEFORE OR AFTER THE SIXTY-DAY FREEDOM PERIOD. — The law is explicit. A petition filed before or after the sixty-day freedom period shall be dismissed outright.

4. ID.; ID.; ID.; QUESTIONABLE MOTIVES SHOWN BY COERCIVE ACTS OF PETITIONER UNION. — What could be immediately perceived in this case is that notwithstanding the existence of two legitimate labor unions (ALCCE and LEA) representing the employees of petitioner, and despite the existence of two collective bargaining agreements as ratified by an overwhelming majority of the said employees, the SMLCC-Olalia-KMU pretended to represent the employees of petitioner by committing illegal acts of picketing and by filing a petition for certification election. The said petition had only fourteen signatories and petitioner’s contention that all of them were previously dismissed employees was never controverted. The only logical conclusion is that the SMLCC-Olalia-KMU had questionable motives in filing the petition for certification election and in resorting to illegal acts to coerce petitioner to allow it to intrude upon the activities of two legitimate unions. We cannot agree with the perceptions of the public respondent who, without supporting evidence, doubted the authenticity of the certificates of registration of the two labor unions. Inasmuch as the authenticity of the certificates of registration has not been successfully assailed, this Court cannot accept the gratuitous statement of the public respondent that both unions are company unions, in the absence of evidence to establish the imputation. The SMLCC-Olalia-KMU obviously does not have any lawful basis in filing a petition for direct certification. Indeed, by its coercive acts tending to harass petitioner, it betrayed its motives to be far from sincere.

D E C I S I O N

GANCAYCO, J.:

The principal issue in this case is whether or not public respondent Pura Ferrer Calleja, in her capacity as the Director of the Bureau of Labor Relations (BLR) of the Department of Labor and Employment, can order a certification election among the rank and file employees working in the Tabaco, Albay office and in the Legaspi City office of petitioner Liberty Commercial Center, Inc., despite the existence of two separate collective bargaining agreements for each of the two said office.

Petitioner questions the decision of Director Calleja dated September 2, 1987 in BLR Case No. A-6-205-87 (MED-ARB-Case No. R05-41-87), the dispositive portion of which is as follows:jgc:chanrobles.com.ph

"WHEREFORE, premises considered the Order of the Med-Arbiter dated May 8, 1987 is hereby set aside and vacated and a new one entered, calling for a certification election among the rank and file employees of Liberty Commercial Center, Inc., Tabaco and Legaspi City, with the following choices:chanrob1es virtual 1aw library

1. Samahan ng Manggagawa sa Liberty Commercial Center-Olalia;

2. Association of L.C.C. Employees;

3. Liberty Employees Association; and

4. No union.

Let, therefore, the records of this case be immediately remanded to the Office of Origin for the conduct of the certification election.

SO ORDERED." 1

On February 10, 1988, this Court issued a temporary restraining order enjoining the execution of the said decision. 2

The undisputed pertinent facts follow:chanrob1es virtual 1aw library

Petitioner has its principal business office at Tabaco, Albay, and a branch office at Legaspi City. Private respondent SMLCC Olalia KMU is an organized labor union. The Association of Liberty Commercial Center Employees (ALCCE) and the Liberty Employees Association (LEA) are registered labor unions since July 29, 1986. 3 Their certificates of registration bear the signatures of Director of Labor Cresenciano B. Trajano and then Minister of Labor and Employment Augusto S. Sanchez. The authenticity of these two certificates has never been successfully assailed.chanroblesvirtualawlibrary

The ALCCE represented all the rank and file employees of the petitioner in Legaspi City, while the LEA represented the rank and file employees of petitioner in Tabaco, Albay. Both unions are represented by a lawyer from the Free Legal Assistance Group (FLAG).

After five months of negotiation, two separate collective bargaining agreements were executed. They both took effect on December 1, 1986, and were to last for a period of three years.

The collective bargaining agreement between the petitioner and the ALCCE is a notarized document consisting of eleven pages. 4 The said document is accompanied by a certification of union secretary Lina Pasmayor that the collective bargaining agreement was posted in two places within the premises of the office five days before ratification, and that it had been ratified by a majority of the members of the union. 5

Similarly, the collective bargaining agreement between petitioner and the LEA is a notarized document consisting of eleven (11) pages 6 together with a certification by union secretary Lorna Kallos that the said agreement was posted in two places within the premises of the office five days before ratification, and that it was ratified by a majority of the members of the union. 7

It is recorded in the minutes of the board membership meeting for the ratification of the collective bargaining agreement between petitioner and the ALCCE that the majority of the members signed for ratification (221 signatures). 8 The minutes of the general membership meeting for the ratification of the collective bargaining agreement between petitioner and the LEA also show that the majority of the members signed for ratification (124 signatures). 9

In the meantime, the SMLCC-Olalia-KMU filed a petition for certification election with the Bureau of Labor Relations.

On April 2, 1987, a group led by the SMLCC-Olalia-KMU picketed the Legaspi City office of petitioner at around 8:00 o’clock in the morning. Petitioner learned that the said group consisted of slum dwellers and employees dismissed as early as January, 1983.

At around 11:00 o’clock in the morning of the same day, Atty. Domingo Reyes, a conciliator from the Department of Labor and Employment arrived at the office of petitioner. He informed the management that a Notice of Strike was filed by the SMLCC-Olalia-KMU. In a conference organized by the conciliator and attended by the officers of petitioner, the SMLCC-Olalia-KMU demanded the reinstatement of the dismissed employees of petitioner.

While the conference was going on, the SMLCC-Olalia-KMU picket continued. As there was no settlement, the group became unruly and started to harass petitioner’s customers and other employees. Petitioner sought relief in court. In due time, the SMLCC-Olalia-KMU was ordered to desist from committing acts of grave threats, grave coercion and disturbance of the peace, and from barricading the business establishment of petitioner. After arrests were made, there was a lull.

On May 3, 1987, the same group led by the SMLCC-Olalia-KMU picketed the Tabaco, Albay office of petitioner. Inasmuch as the same acts of harassment had been committed in the picket line, petitioner sought police intervention.

On April 9, 1987, petitioner was furnished a copy of the notice setting the initial hearing of the petition for certification election, as well as the petition for direct certification filed by the SMLCC-Olalia-KMU, docketed as Med-ARB Case No. R05-41-87 and now BLR Case No. A-6-205-87.

On April 20, 1987, petitioner filed an "Answer With Motion To Dismiss the Petition For Direct Certification" on the ground that the petition has no legal and factual basis.

On May 8, 1987, the Med-Arbiter dismissed the Petition for Direct Certification on the ground that the same had been filed before the sixty-day freedom period 10 On May 22, 1987, the SMLCC-Olalia-KMU interposed an appeal to the Bureau of Labor Relations, and on September 2, 1987, the BLR Director penned the questioned decision in BLR Case No. A-6-205-87. Hence, this petition.

The petition is meritorious.

An examination of the record clearly shows that both the ALCCE and the LEA are duly registered unions of petitioner’s employees in its two separate offices, one at Tabaco, Albay and the other at Legaspi City. The certificates of registration of both unions appear to be authentic even considering that both unions were organized and registered on the same date. In the absence of strong evidence to the contrary, both ALCCE and LEA must be considered registered unions representing the employees of petitioner in two separate offices.

Likewise, there is no denying that two separate collective bargaining agreements were entered into between petitioner and the ALCCE on one hand, and between petitioner and the LEA on the other. Both agreements were to be in force until December 1, 1989. Again, notwithstanding the observation of public respondent that the certificates of registration were executed on the same dates thus casting doubt on their authenticity, it appears that the two collective bargaining agreements are notarized documents bearing the certifications of ratification and the signatures of the ratifying employees. The authenticity of both collective bargaining agreements must be sustained.

Examining the Petition for Direct Certification filed by the SMLCC-Olalia-KMU, it clearly appears that only fourteen supposed employees of petitioner signed it. 11 Petitioner contends, and this was never controverted by the SMLCC-Olalia-KMU, that those signatories are dismissed employees of petitioner. It also appears that the said petition was filed before the sixty-day freedom period prior to the expiration of the said collective bargaining agreements.

The law is explicit. A petition filed before or after the sixty-day freedom period shall be dismissed outright. 12

What could be immediately perceived in this case is that notwithstanding the existence of two legitimate labor unions (ALCCE and LEA) representing the employees of petitioner, and despite the existence of two collective bargaining agreements as ratified by an overwhelming majority of the said employees, the SMLCC-Olalia-KMU pretended to represent the employees of petitioner by committing illegal acts of picketing and by filing a petition for certification election. The said petition had only fourteen signatories and petitioner’s contention that all of them were previously dismissed employees was never controverted.chanrobles.com : virtual law library

The only logical conclusion is that the SMLCC-Olalia-KMU had questionable motives in filing the petition for certification election and in resorting to illegal acts to coerce petitioner to allow it to intrude upon the activities of two legitimate unions. We cannot agree with the perceptions of the public respondent who, without supporting evidence, doubted the authenticity of the certificates of registration of the two labor unions. Inasmuch as the authenticity of the certificates of registration has not been successfully assailed, this Court cannot accept the gratuitous statement of the public respondent that both unions are company unions, in the absence of evidence to establish the imputation.

The SMLCC-Olalia-KMU obviously does not have any lawful basis in filing a petition for direct certification. Indeed, by its coercive acts tending to harass petitioner, it betrayed its motives to be far from sincere.

WHEREFORE, the petition is GRANTED. The decision of the Director of the Bureau of Labor Relations dated September 2, 1987 in BLR Case No. A-6-205-87 is hereby SET ASIDE. The petition for certification election filed by the private respondent is hereby DISMISSED. No costs.

SO ORDERED.

Narvasa, Cruz, Griño-Aquino and Medialdea, JJ., concur.

Endnotes:

1. Pages 89 to 91, Rollo.

2. Pages 102, Rollo.

3. Pages 56 to 57, Rollo.

4. Pages 28 to 38, Rollo.

5. Page 27, Rollo.

6. Pages 40 to 55, Rollo.

7. Page 39, Rollo.

8. Pages 58 to 67, Rollo.

9. Pages 68 to 77, Rollo.

10. Pages 81 to 84, Rollo.

11. Pages 79 to 81, Rollo.

12. See Section 3, Rule V of the Implementing Regulations of the Labor Code relating to certification cases; and Article 254, Labor Code.

G.R. No. 82260 July 19, 1989 - ASSOCIATED LABOR UNIONS v. PURA FERRER-CALLEJA, ET AL.

2012-11-11T16:53:05+00:00

FIRST DIVISION

[G.R. No. 82260. July 19, 1989.]

ASSOCIATED LABOR UNIONS (ALU), Petitioner, v. HON. PURA FERRER-CALLEJA, DIRECTOR, BUREAU OF LABOR RELATIONS, DEPARTMENT OF LABOR AND EMPLOYMENT AND NATIONAL FEDERATION OF LABOR (NFL), Respondents.

SYLLABUS

1. LABOR LAW; COLLECTIVE BARGAINING; ART. 257 OF LABOR CODE APPLIES TO UNORGANIZED ESTABLISHMENTS WHICH HAVE NO CERTIFIED BARGAINING UNIT. — Art 257 of the Labor Code finds no application in the case at bar primarily because it applies to unorganized establishments. For the said provision to apply, the establishment concerned must have no certified bargaining agent. This is not the case in the present petition where there was a collective bargaining agreement entered into by the management of the Soriano Fruits Corporation and ALU, the petitioner, which was then the bargaining agent.

2. ID.; ID.; CERTIFICATION ELECTION; FILING OF PETITION, A SUFFICIENT BASIS TO GRANT CERTIFICATION ELECTION. — The provision of Article 256 which provides that the Med-Arbiter shall automatically order an election is clear and leaves no room for further interpretation. The mere filing of a petition for certification election within the freedom period is sufficient basis for the respondent Director to order the holding of a certification election.

3. ID.; ID.; ID.; ABSENCE OF UNION FROM HEARING DOES NOT AFFECT PETITION FOR CERTIFICATION ELECTION; PROCEEDINGS IS NON-ADVERSARY. — The fact that NFL did not appear during the hearings set by the Med-Arbiter is of no moment. As the Solicitor General correctly pointed out, there is no prohibition on the conduct of hearings by the Med-Arbiter on the competing stands of the unions. Neither does the law require the same to be held whereby the absence or presence therefrom of any union representative would affect the petition for certification election. In fact, it is the denial of the petition for certification election grounded solely on the absence of NFL in the scheduled hearings which is frowned upon by the law. This is consistent with the principle in labor legislation that "certification proceedings is not a litigation in the sense in which the term is ordinarily understood, but an investigation of non-adversary and fact finding character. As such, it is not bound by technical rules of evidence."cralaw virtua1aw library

4. ID.; ID.; ID.; WORKERS’ CHOICE OF REPRESENTATIVE IS OF PARAMOUNT IMPORTANCE. — Petitioner suggests that to grant the petition for certification election would "open the floodgates to unbridled and scrupulous (sic) petitions whose only objective is to prejudice the industrial peace and stability existing in the Company." This Court believes however that the workers’ choice regarding their representative who inevitably reflects and works for their common interest is of paramount importance. This policy was lengthily explained in the concurring opinion of then Chief Justice Fernando in the case of Confederation of Citizens Labor Unions (CCLU) v. National Labor Relations Commission where he categorically stated that "the slightest doubt therefore cannot be entertained that what possesses significance in a petition for certification is that through such a device the employees are given the opportunity to make known who shall have the right to represent them. What is equally important is that not only some but all of them should have the right to do so."cralaw virtua1aw library

5. ID.; ID.; ID.; 20% REQUIREMENT APPLIES TO UNORGANIZED ESTABLISHMENT. — The requirement of 20% under Art. 257 of the Labor Code applies only to unorganized establishments. It is Article 256 instead which must be applied. A perusal of the said Article would confirm the falsity of the claim of petitioner. Nowhere in the said provision does it require the written consent of twenty percent (20%) of the employees in the bargaining unit. Hence, the issue of whether or not the petition for certification election is supported by twenty percent (20%) of the bargaining unit concerned is immaterial to the case at bar. What is essential is that the petition was filed during the sixty-day freedom period.

6. ID.; ID.; ID.; ALLEGATION THAT EMPLOYEES ARE SATISFIED WITH THE SERVICES OF INCUMBENT UNION HAS NO RIGHT. — The petition to dismiss the petition for certification election filed by NFL and signed by some 224 employees signifying their satisfaction with the services of the incumbent union should not be given any weight at all. The possibility that the workers were merely coerced to sign the petition such that they did so for fear of reprisal from the members of ALU is not remote. However, this does not discount the possibility that the workers voluntarily signed the said petition. Whatever reason the workers may have had for signing the same may be ascertained once a certification election is held. It is in this democratic process that the workers are given the opportunity to freely choose, by secret ballot, who they want to represent them. In this manner, the workers are free of any undue pressure which either competing union may exert upon them.

7. ID.; ID.; ID.; CONTRACT BAR RULE; RENEWED AGREEMENT HASTILY AND PREMATURELY ENTERED IS NOT A BAR TO THE PETITION FOR CERTIFICATION ELECTION. — The collective bargaining agreement was hastily and prematurely entered into apparently in an attempt to avoid the holding of a certification election. The records show that the old collective bargaining agreement of the petitioner with Soriano Fruits Corporation was to expire on August 31, 1987. However, three (3) months and eight (8) days before its expiry date, or on June 22, 1987, the petitioner renewed the same with the consent and collaboration of management. The renewed agreement was then ratified by the members of the bargaining unit and was thereafter sent to the Bureau of Labor Relations for certification. In the meantime, on August 10, 1987 (21 days before the expiration of the old collective bargaining agreement on August 31, 1987) a petition for certification election was filed by respondent union, NFL. From the foregoing facts, it is quite obvious that the renewed agreement cannot constitute a bar to the instant petition for certification election for the very reason that the same was not yet in existence when the petition for certification election was filed on August 10, 1987 inasmuch as the same was to take effect only on September 1, 1987, after the old agreement expires on August 31, 1987.

8. ID.; ID.; COLLECTIVE BARGAINING AGREEMENT; ART. 254 OF THE LABOR CODE PROHIBITS MODIFICATION AND ALTERATION DURING THE AGREEMENT LIFETIME. — What Art. 254 prohibits is the modification and alteration of the present collective bargaining agreement during its lifetime. In the present case, the alterations and modifications were to take effect only on September 1, 1987, i.e., after the expiration of the old agreement. It must be noted that the new agreement did not suspend the old one. Neither did it terminate nor modify the same. Petitioner therefore did not commit any violation of Article 254 of the Labor Code, contrary to the allegations of the Solicitor General.

D E C I S I O N

GANCAYCO, J.:

This is a petition for the issuance of the extraordinary remedy of certiorari for the reversal of the Decision 1 of the Director of Bureau of Labor Relations ordering the holding of a certification election among the workers of Soriano Fruits Corporation.

The antecedent facts of the case are as follows:chanrob1es virtual 1aw library

Petitioner Associated Labor Unions, ALU for brevity, had a collective bargaining agreement with the employer Soriano Fruits Corporation which expired on September 30, 1987. Prior to the said date, or on June 22, 1987, petitioner and the employer signed a collective bargaining agreement which was to take effect on September 1, 1987 and was to remain so until August 31, 1990. The said collective bargaining agreement was unanimously approved and ratified by the members of the bargaining unit.

However, on August 10, 1987, private respondent National Federation of Labor (NFL), filed a petition for certification election questioning the majority status of the incumbent union, pursuant to Executive Order 111 and its Implementing Rules, there being more than majority of its members who have expressed doubts on the sincerity of the incumbent union. 2 Acting on the said petition the Med-Arbiter scheduled a hearing on August 21, 1987 to determine the majority status of herein petitioner but the NFL representative failed to appear despite due notice. Consequently, the hearing was reset to September 8, 1987 to give NFL an opportunity to substantiate its claim but again, the NFL was not represented. Thereafter, the parties were asked to submit their position papers. To bolster its claim, ALU submitted several petitions signed by members of the bargaining unit to dismiss any petition filed by any union which seeks to question the majority status of the incumbent union. The signatories to the petition also reaffirmed its loyalty to ALU.

On October 2, 1987, the Med-Arbiter promulgated an Order 3 dismissing the petition for certification election on the ground of failure to prosecute. An appeal to the Bureau of Labor Relations however, proved fruitful. On December 22, 1987 the respondent Director of the Bureau of Labor Relations held that the Med-Arbiter erred in dismissing the petition for certification election. The dispositive portion of the decision reads thus:jgc:chanrobles.com.ph

"WHEREFORE, in view of the foregoing, the appeal of petitioner, National Federation of Labor is hereby given due course and the Order of the Med-Arbiter is set aside. Let, therefore a certification election proceed at Soriano Fruits Corporation, after a pre-election conference to thresh out the list of eligible voters, with the following choices:chanrob1es virtual 1aw library

1. National Federation of Labor (NFL);

2. Associated Labor Unions (ALU).

SO ORDERED." 4

ALU sought a reconsideration of the above-cited decision but to no avail. Hence, the instant petition for certiorari.

Petitioner alleges that in granting the petition for certification election, the respondent Director acted with grave abuse of discretion amounting to lack or in excess of jurisdiction in that:jgc:chanrobles.com.ph

"I. THE HONORABLE DIRECTOR MISSED THE LEGAL INTENT OF ARTICLE 257 AS AMENDED BY EXECUTIVE ORDER 111.

II. THE HONORABLE DIRECTOR ERRED IN CLAIMING THAT THE PETITION IS SUPPORTED BY MORE THAN TWENTY (20%) OF THE RANK AND FILE.

III. THE RATIFICATION OF THE CONCLUDED COLLECTIVE BARGAINING AGREEMENT RENDERS THE CERTIFICATION ELECTION MOOT AND ACADEMIC."cralaw virtua1aw library

This Court finds the petition bereft of merit.

Petitioner hinges its claim on Art. 257 of the Labor Code which provides:jgc:chanrobles.com.ph

"Art. 257. Petitions in unorganized establishments. In any establishment where there is no certified bargaining agent, the petition for certification election filed by a legitimate labor organization shall be supported by the written consent of at least twenty (20%) percent of all the employees in the bargaining unit. Upon receipt and verification of such petition, the Med-Arbiter shall automatically order the conduct of a certification election."cralaw virtua1aw library

But this provision finds no application in the case at bar primarily because it applies to unorganized establishments. For the said provision to apply, the establishment concerned must have no certified bargaining agent. This is not the case in the present petition where there was a collective bargaining agreement entered into by the management of the Soriano Fruits Corporation and ALU, the petitioner, which was then the bargaining agent. This Court however, finds that it is Article 256 as amended by Executive Order 111 which must be considered in the resolution of the present petition. The said article states:jgc:chanrobles.com.ph

"Article 256. Representation Issues in Organized Establishments. In organized establishments, when a petition questioning the majority status of the incumbent bargaining agent is filed before the Ministry within the sixty (60) day period before the expiration of the collective bargaining agreement, the Med-Arbiter shall automatically order an election by secret ballot to ascertain the will of the employees in the appropriate bargaining unit." (Emphasis supplied)

A review of the records of this case would confirm the fact that the petition for certification election filed by NFL on August 10, 1987 was well within the prescribed sixty (60) day freedom period.

Petitioner however maintains that the respondent Director misconstrued the legal intent behind the above-cited provision and that it should not have been given a literal interpretation. Petitioner insists further that the right of the members of the bargaining unit to choose which union should represent them is not an absolute one since a prior hearing must be had to ascertain the veracity of the allegations contained in the petition.

This argument is untenable.

The provision of Article 256 which provides that the Med-Arbiter shall automatically order an election is clear and leaves no room for further interpretation. The mere filing of a petition for certification election within the freedom period is sufficient basis for the respondent Director to order the holding of a certification election. The fact that NFL did not appear during the hearings set by the Med-Arbiter is of no moment. As the Solicitor General correctly pointed out, there is no prohibition on the conduct of hearings by the Med-Arbiter on the competing stands of the unions. Neither does the law require the same to be held whereby the absence or presence therefrom of any union representative would affect the petition for certification election. In fact, it is the denial of the petition for certification election grounded solely on the absence of NFL in the scheduled hearings which is frowned upon by the law. This is consistent with the principle in labor legislation that "certification proceedings is not a litigation in the sense in which the term is ordinarily understood, but an investigation of non-adversary and fact finding character. As such, it is not bound by technical rules of evidence." 5

Petitioner suggests that to grant the petition for certification election would "open the floodgates to unbridled and scrupulous (sic) petitions whose only objective is to prejudice the industrial peace and stability existing in the Company." 6 This Court believes however that the workers’ choice regarding their representative who inevitably reflects and works for their common interest is of paramount importance. This policy was lengthily explained in the concurring opinion of then Chief Justice Fernando in the case of Confederation of Citizens Labor Unions (CCLU) v. National Labor Relations Commission 7 where he categorically stated that "the slightest doubt therefore cannot be entertained that what possesses significance in a petition for certification is that through such a device the employees are given the opportunity to make known who shall have the right to represent them. What is equally important is that not only some but all of them should have the right to do so." 8

Petitioner next contends that the respondent Director erred in relying upon the claim of the respondent Union that the petition for certification election is supported by more than twenty percent (20%) of the rank and file considering that the said petition merely contained the lone signature of the NFL representative.

This averment is likewise unmeritorious.

Petitioner bases its argument again on Article 257 which prescribes the twenty percent (20%) requirement. But it must be reiterated that the said requirement applies only to unorganized establishments. It is Article 256 instead which must be applied. A perusal of the said Article would confirm the falsity of the claim of petitioner. Nowhere in the said provision does it require the written consent of twenty percent (20%) of the employees in the bargaining unit. Hence, the issue of whether or not the petition for certification election is supported by twenty percent (20%) of the bargaining unit concerned is immaterial to the case at bar. What is essential is that the petition was filed during the sixty-day freedom period.

The petition to dismiss the petition for certification election 9 filed by NFL and signed by some 224 employees signifying their satisfaction with the services of the incumbent union should not be given any weight at all. The possibility that the workers were merely coerced to sign the petition such that they did so for fear of reprisal from the members of ALU is not remote. However, this does not discount the possibility that the workers voluntarily signed the said petition. Whatever reason the workers may have had for signing the same may be ascertained once a certification election is held. It is in this democratic process that the workers are given the opportunity to freely choose, by secret ballot, who they want to represent them. In this manner, the workers are free of any undue pressure which either competing union may exert upon them.

Finally, the petitioner assails the decision of the respondent Director on the ground that "the ratification of the collective bargaining agreement renders the certification election moot and academic." 10

This contention finds no basis in law.

The petitioner was obviously referring to the contract-bar rule where the law prohibits the holding of certification elections during the lifetime of the collective bargaining agreement. Said agreement was hastily and prematurely entered into apparently in an attempt to avoid the holding of a certification election. The records show that the old collective bargaining agreement of the petitioner with Soriano Fruits Corporation was to expire on August 31, 1987. However, three (3) months and eight (8) days before its expiry date, or on June 22, 1987, the petitioner renewed the same with the consent and collaboration of management. The renewed agreement was then ratified by the members of the bargaining unit and was thereafter sent to the Bureau of Labor Relations for certification. In the meantime, on August 10, 1987 (21 days before the expiration of the old collective bargaining agreement on August 31, 1987) a petition for certification election was filed by respondent union, NFL. From the foregoing facts, it is quite obvious that the renewed agreement cannot constitute a bar to the instant petition for certification election for the very reason that the same was not yet in existence when the petition for certification election was filed on August 10, 1987 inasmuch as the same was to take effect only on September 1, 1987, after the old agreement expires on August 31, 1987.

In the case of Associated Trade Unions-ATU v. Noriel, 11 this Court held that "it is indubitably clear from the facts heretofore unfolded that management and petitioner herein proceeded with such indecent haste in renewing their CBA way ahead of the sixty-day freedom period in their obvious desire to frustrate the will of the rank and file employees in selecting their bargaining representative. To countenance the actuation of the company and the petitioner herein would be violative of the employees constitutional right to self-organization. 12

The Solicitor General, in his comment, brought the attention of this Court to the fact that petitioner had violated the provisions of Article 254 13 when it renewed the collective bargaining agreement before the commencement of the sixty-day freedom period. This Court does not subscribe to this view. What the aforecited rule prohibits is the modification and alteration of the present collective bargaining agreement during its lifetime. In the present case, the alterations and modifications were to take effect only on September 1, 1987, i.e., after the expiration of the old agreement. It must be noted that the new agreement did not suspend the old one. Neither did it terminate nor modify the same. Petitioner therefore did not commit any violation of Article 254 of the Labor Code, contrary to the allegations of the Solicitor General.

However, it is apparent that certiorari does not lie in the instant petition for this Court does not see any substantial reason to withhold the primordial right of workers to select their bargaining representative.

WHEREFORE, premises considered, the instant petition is DISMISSED for lack of merit. The temporary restraining order issued by resolution of this Court of July 11, 1988 is hereby lifted and declared to be of no force and effect. The decision is immediately executory. No costs.

SO ORDERED.

Narvasa, Cruz, Griño-Aquino and Medialdea, JJ., concur.

Endnotes:

1. Penned by Hon. Pura Ferrer-Calleja.

2. Page 4, Rollo.

3. Penned by Hon. Conrado Macasa, Sr.

4. Page 121, Rollo.

5. LVN Pictures, Inc. v. Philippine Musician’s Guild, 110 Phil. 728 (1961).

6. Page 6, Rollo.

7. 60 SCRA 467 (1974) citing Federation of the United Workers Organization v. CIR, 54 SCRA 305 (1973).

8. Ibid.

9. Annex C, Petition.

10. Page 8, Rollo.

11. 88 SCRA 96 (1979).

12. Ibid, 101, citing Antipolo Highway Lines v. Inciong, 64 SCRA 441 (1975).

13. Article 254 provides that "when there is a collective bargaining agreement, the duty to bargain collectively shall also mean that neither party shall terminate or modify such agreement during its lifetime. However, either party can serve a written notice to terminate or modify the same at least sixty (60) days prior to its expiration date. It shall be the duty of both parties to respect the terms and conditions of the existing agreement during the sixty-day period and/or until a new agreement is reached by the parties."

G.R. No. 52081 July 21, 1989 - LUCIANA M. DE ALINO, ET AL. v. RAFAEL T. MENDOZA, ET AL.

2012-11-11T16:53:05+00:00

SECOND DIVISION

[G.R. No. 52081. July 21, 1989.]

LUCIANA M. DE ALINO, BENJAMIN ALINO and HERMOGINA M. DE UNABIA, Petitioners, v. HON. RAFAEL T. MENDOZA, Judge, Branch VI, Court of First Instance of Cebu; PROVINCIAL SHERIFF of Cebu; and/or her deputies; BENEDICTO MACABALE, BERNARDINO O. MACABALE, CESAR O. MACABALE and HERMANA O. MACABALE, Respondents.

SYLLABUS

1. REMEDIAL LAW; APPEAL; PERFECTION OF; AMENDED RECORD ON APPEAL DEEMED FILED ON PRESENTATION OF ORIGINAL. — The main issue in this petition is whether or not respondent judge erred in holding that the judgment sought to be appealed is already final and executory because the amended record on appeal was filed six (6) days late. This issue has already been laid to rest as early as 1963 in the case of Vda. de Oyzon v. Vinzon (8 SCRA 455, 458) where it was held that —." . . The fact that the amended record on appeal was submitted after the reglementary 30-day period, did not render the perfection untimely, because the amended record on appeal is deemed to have been filed on the presentation of the original, which was done within the reglementary period."cralaw virtua1aw library

2. ID.; PLEADINGS AND PRACTICES; LACK OF VALID SUBSTITUTION OF COUNSEL; LITIGATION MUST BE DECIDED ON THE MERITS AND NOT ON TECHNICALITY. — As to the fact that petitioners’ motion for reconsideration was unauthorized for lack of valid substitution of counsel, who filed the same, as he is not their counsel on record, the same may be excused in accordance with the rulings of this Court to afford every party-litigant amplest opportunity to present his case for the proper and just determination of his cause, freed from the constraints of technicalities (Rama v. Court of Appeals, 148 SCRA 496 [1987]). Litigation should, as much as possible, be decided on their merits and not on technicality (GSIS v. GSIS Supervisor Union, 89 SCRA 554 [1979]). Interest of justice may warrant waiver of the rules (Republic v. Court of Appeals, 135 SCRA 156 [1985]).

3. ID.; APPEAL; REFERRAL TO THE COURT OF APPEALS; WHERE FACTS ARE BEFORE THE SUPREME COURT, CASE MAY BE DECIDED ON THE MERITS. — As a general rule, this case should be referred to the Court of Appeals for review of the findings of facts of the trial court, but where the facts are already before this Court, the case can already be decided on the merits. (Quillan v. CA, Et. Al. G.R. No. 55457, January 20, 1989; Santos v. Ganayo, 116 SCRA 431 [1982]; Quisumbing v. Court of Appeals, 122 SCRA 703 [1983]).

4. ID.; ID.; WHEN FINDINGS OF FACT OF TRIAL COURT CARRY GREAT WEIGHT. — The conclusions and findings of fact by the trial court are entitled to great weight on appeal and should not be disturbed unless for strong and cogent reasons because the trial court is in a better position to examine real evidence, as well as to observe the demeanor of the witness while testifying.

5. CIVIL LAW; SALES; ACTION FOR RECONVEYANCE; ACCOUNTING SHOULD START FROM DATE OWNERSHIP WAS CLAIMED; CASE AT BAR. — The portion of the said decision ordering the petitioners to render an accounting of the fruits from 1931, is patently erroneous. Administration of the said property was left to Benedicto’s late wife when he left for Hawaii in 1931. Accounting should be from March 20, 1973, when petitioners claimed ownership of the land.

D E C I S I O N

PARAS, J.:

This is a petition for certiorari and prohibition with preliminary injunction seeking the annulment of the August 17, 1979 Order of the then Court of First Instance of Cebu, Branch VI, presided over by herein respondent judge, dismissing the appeal for the reason that the judgment sought to be appealed is already final and executory; and granting the motion for the issuance of a writ of execution.

The parties in this case are father and children. Herein private respondent Benedicto Macabale, an illiterate and 78 years old when he testified, is the father of the herein other private respondents and herein petitioners Luciana M. de Alino and Hermogina M. de Umabia, and the father-in-law of petitioner Benjamin Alino. The controversy involves a parcel of land, more particularly described as follows:jgc:chanrobles.com.ph

"A parcel of land (Lot No. 3925 of the Talisay-Minglanilla Friar Lands Estate, G.L.R.O. No. 3732), situated in the municipality of Talisay, Province of Cebu, Island of Cebu, bounded on the North by Lot No. 3926; on the East by Lot No. 3919; on the South by Lot No. 3924; and on the West by Lot Nos. 3930 and 3929, containing an area of TWO THOUSAND NINE HUNDRED EIGHT (2,908) square meters, more or less, and it is covered by Transfer Certificate of Title No. 2142, in the name of Benedicto Macabale, in the Registry of Deeds for the Province of Cebu, found in Book II, Page 142." (p. 18, Rollo)

acquired by Benedicto and his late wife, Maria Obejero, before Benedicto left for Hawaii in 1931. The controversy arose when herein petitioners claimed ownership over the said land by virtue of Deed of Absolute Sale thumbmarked by Benedicto and his late wife (both of them being illiterates) and acknowledged by Atty. Cesar Larrobis, Jr. on March 20, 1973. Benedicto denied having sold the land, claiming that what he and his late wife thumbmarked is a new tax declaration. Accordingly, Benedicto filed with the then Court of First Instance of Cebu, Branch VI, presided over by herein respondent judge, an action against the herein petitioners for Annulment of Deed of Sale, Reconveyance and Damages. The same was docketed therein as Civil Case No. R-15543.

Respondent judge, after trial, in a Decision dated March 29, 1979 (Rollo, pp. 18-33), ruled in favor of herein private respondents. The decretal portion of the said decision, reads:jgc:chanrobles.com.ph

"IN VIEW OF THE FOREGOING, judgment is hereby rendered declaring the Deed of Sale covering Lot No. 3925 and the Certificate of Title issued by virtue thereof as null and void; ordering the defendants to reconvey Lot No. 3925 to the plaintiff; ordering defendants to pay solidarily the amount of P5,000.00 as moral damages and P5,000.00 as attorney’s fees; ordering the defendants to render accounting of the fruits of Lot No. 3925 from 1931 up to the time plaintiff shall have taken possession of said lot; and defendants to pay the costs of the proceedings." (p. 33, Rollo)

Petitioners, on April l6, 1979, filed their Notice of Appeal and Appeal Bond; and on April 24, 1979, their original Record on Appeal.

On April 30, 1979, private respondents filed a Motion for Admission of their Second Amended Complaint (Ibid., pp. 44-48). An opposition was filed by the petitioners (Ibid., pp. 49-50), but in an Order dated June 19, 1979 (Ibid., p. 51), the same was granted by respondent judge and further ordered the petitioners to incorporate in their record on appeal certain motions, orders, pleadings and proceedings which were omitted by the defendants (petitioners) from their record on appeal.

In the order dated August 17, 1975 (Ibid., pp. 34-35), it will be gathered that a motion for approval of the amended record on appeal, an opposition thereto, and a motion for issuance of a writ of execution were filed. Respondent judge, acting on the same, ruling that the judgment sought to be appealed is already final and executory, dismissed the appeal and granted the motion for the issuance of a writ of execution. The dispositive portion of the said order, reads —

"Finding the motion of the plaintiff to be well-taken, the same is hereby granted.

"The Judgment of this Court sought to be appealed by the defendants is hereby declared final and executory and the appeal is dismissed.

"Let a Writ of Execution issue forthwith.

"SO ORDERED." (p. 41, Rollo)

On September 19, 1979, Petitioners, thru a new counsel (no formal notice of change of counsel was given to the court), filed a Motion for Reconsideration (Ibid., pp. 36-40), but the same was denied in an Order dated November 5, 1979 (Ibid., pp. 84-86).

On November 15, 1979, public respondent Provincial Sheriff of Cebu caused to be served upon petitioners a writ of execution. Hence, the instant petition.

In a Resolution dated June 11, 1980, the First Division of this Court resolved to give due course to the petition, and to require the parties to submit simultaneous memoranda (Ibid., p. 103). In compliance, private respondents filed their Memorandum on July 31, 1980 (Ibid., pp. 104-114), while petitioners filed their Memorandum on August 14, 1980 (Ibid., pp. 116-124).

Petitioners raised two assignments of error:chanrob1es virtual 1aw library

THAT THE RESPONDENT JUDGE, HON. RAFAEL T. MENDOZA, IN THE EXERCISE OF HIS JURISDICTION, BY ISSUING THE ORDERS DATED AUGUST 17, 1979 AND NOVEMBER 5, 1979, HAS EXCEEDED HIS AUTHORITY OR JURISDICTION.

THAT BY DISAPPROVING THE AMENDED RECORD ON APPEAL OF THE DEFENDANTS (PETITIONERS HEREIN) AND, INSTEAD, GRANTING THE MOTION FOR ISSUANCE OF THE WRIT OF EXECUTION OF THE PLAINTIFFS (PRIVATE RESPONDENT HEREIN), THE RESPONDENT JUDGE, HON. RAFAEL T. MENDOZA, HAS ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION.

The main issue in this petition is whether or not respondent judge erred in holding that the judgment sought to be appealed is already final and executory because the amended record on appeal was filed six (6) days late.

This issue has already been laid to rest as early as 1963 in the case of Vda. de Oyzon v. Vinzon (8 SCRA 455, 458) where it was held that —

". . . . The fact that the amended record on appeal was submitted after the reglementary 30-day period, did not render the perfection untimely, because the amended record on appeal is deemed to have been filed on the presentation of the original, which was done within the reglementary period."cralaw virtua1aw library

In the instant case, it will be recalled that petitioners filed their Notice of Appeal and Appeal Bond on April 16, 1979, and their original Record on Appeal on April 24, 1979, all within the reglementary period.

This ruling in the said Oyzon case was reiterated in the case of Rodriguez v. Court of Appeals (68 SCRA 262, 267 [1975]), and further reaffirmed in the case of De Mesa Abad v. Court of Appeals (137 SCRA 416, 421 [1985]) where it was held that —

"It is a fact that, in reference to the First Appeal, the Amended Record on Appeal was filed beyond the 10-day period granted by the trial Court and that the Orders ordered to be incorporated were still missing. It should be noted, however, that the original Record on Appeal was filed within the reglementary period on January 16, 1974. Consequently, the Amended Record on Appeal should be deemed to have been filed upon the presentation of the original. Failure to comply with the period granted by the lower Court within which to file the Amended Record on Appeal, although not to be condoned, does not necessarily render the appeal untimely. It ii the date of presentation of the original Record on Appeal which is controlling. This rule found expression in Rodriguez, Et. Al. v. Court of Appeals, (68 SCRA 262 [1975])."cralaw virtua1aw library

As to the fact that petitioners’ motion for reconsideration was unauthorized for lack of valid substitution of counsel, who filed the same, as he is not their counsel on record, the same may be excused in accordance with the rulings of this Court to afford every party-litigant amplest opportunity to present his case for the proper and just determination of his cause, freed from the constraints of technicalities (Rama v. Court of Appeals, 148 SCRA 496 [1987]). Litigation should, as much as possible, be decided on their merits and not on technicality (GSIS v. GSIS Supervisor Union, 89 SCRA 554 [1979]). Interest of justice may warrant waiver of the rules (Republic v. Court of Appeals, 135 SCRA 156 [1985]).

At this juncture, it is obvious that petitioners’ appeal should be allowed. As a general rule, this case should be referred to the Court of Appeals for review of the findings of facts of the trial court, but where the facts are already before this Court, the case can already be decided on the merits. (Quillan v. CA, Et. Al. G.R. No. 55457, January 20, 1989; Santos v. Ganayo, 116 SCRA 431 [1982]; Quisumbing v. Court of Appeals, 122 SCRA 703 [1983]).

At issue is whether or not respondent judge erred in holding that the deed of sale covering the questioned property is null and void.

It will be noted that from the March 29, 1979 decision of respondent judge (the decision sought to be appealed the substance of the testimonies of all the witnesses was produced therein. Thereafter, respondent judge made his findings of facts, and from these findings, made his conclusion, clearly stating the reasons for his conclusion.cralawnad

This case furnishes another occasion to reiterate the settled rule that conclusions and findings of fact by the trial court are entitled to great weight on appeal and should not be disturbed unless for strong and cogent reasons because the trial court is in a better position to examine real evidence, as well as to observe the demeanor of the witness while testifying. (See Chase v. Buencamino, Sr., 136 SCRA 365 [985]).In the instant case, the allegations of private respondent Benedicto Macabale that he constructed a house worth P20,000.00 in the questioned property (Rollo, p. 19) and petitioners’ witness, Plaviano Unabia, claim that such house is only worth P3,000.00 (Rollo, p. 26) are sufficient to create the doubt that the subject property including the said house and other improvements, was sold for only P454.00. Accordingly, respondent judge’s conclusion being supported by evidence on record, no cogent reason can be found to disturb the findings and conclusion of the trial court.

However, the portion of the said decision ordering the petitioners to render an accounting of the fruits from 1931, is patently erroneous. Administration of the said property was left to Benedicto’s late wife when he left for Hawaii in 1931. Accounting should be from March 20, 1973, when petitioners claimed ownership of the land.

PREMISES CONSIDERED, the March 29, 1979 decision of respondent judge is AFFIRMED, with the modification that the accounting of fruits should start only on March 20, 1973.

SO ORDERED.

Melencio-Herrera, (Chairman), Padilla, Sarmiento and Regalado, JJ., concur.

G.R. No. 54243 July 21, 1989 - INTERNATIONAL SCHOOL, INC. v. MINISTER OF LABOR AND EMPLOYMENT, ET AL.

2012-11-11T16:53:05+00:00

SECOND DIVISION

[G.R. No. 54243. July 21, 1989.]

INTERNATIONAL SCHOOL, INC., Petitioner, v. MINISTER OF LABOR AND EMPLOYMENT, LABOR ARBITER ANTONIO TRIA TIRONA, DEPUTY SHERIFF TEODORO VICENTE AND INTERNATIONAL SCHOOL ALLIANCE OF EDUCATORS, Respondents.

SYLLABUS

1. LABOR LAWS; NATIONAL LABOR RELATIONS COMMISSION; DECISION IS IMMEDIATELY EXECUTORY; PROVISIONS OF THE LABOR CODE PREVAIL OVER THE PROVISIONS OF THE RULES OF COURT. — In a much earlier case this Court ruled that the decision of the Minister of Labor is immediately executory even pending appeal. Provisions of the Labor Code making immediate executory, decisions of the Minister of Labor being a special law prevail over the provisions of the Rules of Court, being of general application (MD Transit and Taxi Co., Inc. v. Estrella, 113 SCRA 378 [1982]).

2. REMEDIAL LAW; JUDGMENT; EXECUTION; A MINISTERIAL DUTY OF THE COURT WHEN JUDGMENT IS FINAL AND EXECUTORY. — It is the ministerial duty of the court to order execution of its final and executory judgment (Service Specialists Incorporation v. Sheriff of Manila, 145 SCRA 139 [1985]).

3. ID.; ID.; ID.; EVERY LITIGATION MUST COME TO AN END. — A writ of execution is a matter of right in favor of a prevailing party once judgment becomes final and executory for failure to seasonably perfect an appeal. Execution is fittingly called the fruit and end of the law and aptly called the life of the law (Garcia v. Echiverri, 132 SCRA 631[1984]) and the end of suit (De Borja v. CA, G.R. No. 37944, June 30, 1988, Paras, J.). Once a decision becomes final, the Court can no longer amend or modify the same, much less set it aside. To allow the court to amend the final judgment will result in endless litigation (Del Carmen v. CA, G.R. No. 36021, February 29, 1980). Every litigation must come to an end. Access to the court is guaranteed. But there must be limit to it. Once a litigant’s right has been adjudicated in a valid final judgment of a competent court, he should not be granted an unbridled license to come back for another try. The prevailing party should not be harassed by subsequent suits. For, if endless litigation were to be encouraged, unscrupulous litigations will multiply in number to the detriment of the administration of justice (Ngo Bun Tiong v. Judge Sayo, G.R. No. 45825, June 30, 1988).

4. ID.; ID.; ID.; QUASHAL OF WRIT OF EXECUTION; WHEN NOT PROPER. — A writ will not be recalled by reason of any defense which could have been made at the time of the trial of the case, nor can the recall be made so as to practically change the terms of a judgment which has become final (Walfson v. Del Rosario, 46 Phil. 43 [1924]). It is likewise settled in the aforecited case that the court retains a certain amount of control over a writ of execution after it leaves its hands but control is limited and regulated by fairly definite rules of law and is not unrestricted. Moreover, a part payment of the judgment does not authorize the quashal or recall of the writ in its entirety if the full amount of the judgment is due and demandable (Walfson v. Del Rosario, supra). Likewise noteworthy in the aforecited case is the fact that an extension of time fixed by a judgment which has become final for the payment of a certain sum of money is in effect a modification of the judgment and is beyond the jurisdiction of the court. Moreover, it has been settled in the case of Itogon-Suyoc Mines v. NLRC, 117 SCRA 523 [1982]), that a party cannot impugn the correctness of a judgment not appealed from by him; and while he may make counter assignment of errors, he can do so only to sustain the judgment on other grounds, but not to seek modification or reversal thereof, for in such case he must appeal. However, a party who voluntarily executes, either partially or in toto, the execution of a judgment is not permitted to appeal from it (Asian Surety and Insurance Co., Inc. v. Relucio, 47 SCRA 225 [1972]).

5. ID.; ID.; ID.; ID.; WHEN PROPER. — A writ of execution may be quashed when it appears: a) that it has been improvidently issued, or b) that it is defective in substance, or c) is issued to the wrong party, or d) that the judgment debt has been paid or satisfied, or e) when the writ has been issued without authority, or f) there had been a change in the situation of the parties which makes such execution inequitable, or g) when it appears that the controversy had never been submitted to the judgment of the court, and therefore no judgment at all had ever been rendered thereon (Cobb-Perez v. Lantin, 23 SCRA 637).

6. ID.; ID.; ID.; DISPOSITIVE PART OF THE DECISION IS CONTROLLING. — Neither can the dispositive portion of the case be amended or modified. It has been held that the only portion of the decision that becomes the subject of execution is that ordained or decreed in the dispositive part, whatever may be found in the body of the decisions can only be considered as part of the reasons or conclusion of the court and while they may serve as guide or enlightenment to determine the ratio decidendi, what is controlling is what appears in the dispositive part of the decision (Madelo v. Gorospe, G.R. No. 41970, March 25, 1988).

7. ID.; ID.; ID.; EXECUTION MUST CONFORM TO THAT ORDAINED OR DECREED IN THE DISPOSITIVE PART; EXCEPT FOR CLERICAL ERRORS, A FINAL JUDGMENT CANNOT BE AMENDED. — The final judgment as rendered is the judgment of the court irrespective of all seemingly contrary statements in the decision. At the root of the doctrine that the premises must yield to the conclusion is, side by side with the needs of writing finis to litigation, the recognition of the truth that "the trained intention of the judge continually leads him to right results for which he is puzzled to give unimpeachable legal reasons (Madelo v. Gorospe, supra). Fundamental is the rule that execution must conform to that ordained or decreed in the dispositive part of the decision. A court cannot except for clerical error or omission, amend a judgment that has become final (Laingo v. Camilo, 130 SCRA 144 [1984]).

8. STATUTORY CONSTRUCTION; CLEAR WORDS OF LANGUAGES EXCLUDE INTERPRETATION; CLARIFICATION OF DECISION IS DENIED WHERE DECISION IS CLEAR. — It is a primary and elementary rule of construction of documents that when the words or language thereof is clear or readily understandable by an ordinary reader, there is absolutely no room for interpretation (Leveriza v. IAC, 157 SCRA 282 [1988]). Likewise it has been held that where the import of a decision is clear, the motion for clarification of the same will be denied (Baer v. Tizon, 58 SCRA 3 [1974]).

D E C I S I O N

PARAS, J.:

This is a petition for certiorari, prohibition, and Mandamus with Preliminary Injunction seeking: a) to annul and set aside the Writ of Execution dated June 16, 1980 and Notice of Garnishment issued by the respondent Minister of Labor & Employment, through respondent Labor Arbiter Antonio Tria Tirona in MOLE Case No. CA-10-12-5979 entitled "In Re: Deadlock in Collective Bargaining Negotiation (Wage Reopening Clause) between International School & International School Alliance of Educators," ; (b) to compel respondent Minister of Labor to decide immediately petitioner school’s "Petition for Review and/or Motion to Quash" dated June 20, 1980 and (c) to require the labor officials to desist from enforcing the Writ of execution in question upon the filing of this petition.

Petitioner International School Inc. (hereinafter referred to as School) is a private non-stock and non-sectarian educational institution duly organized and existing under Philippine laws while private respondent International School Alliance of Educators (hereinafter referred to as Alliance) is a legitimate labor organization duly registered with the Ministry of Labor.

The antecedent facts of the case are as follows:chanrob1es virtual 1aw library

On August 1, 1978, petitioner School and respondent Alliance entered into a collective bargaining agreement (CBA for brevity) for three years effective July 1978 which was duly authorized by the Minister of Labor providing among other things, for the adoption of a salary schedule in accordance with which members of the bargaining unit represented by respondent Alliance would be compensated. The salary schedule consists of 26 (initially 27) steps with corresponding graduated salary rates, movement through which would be based on seniority and qualification of the teachers covered. (CBA, rollo, p. 42). In addition, the CBA contains a "wage reopening clause" in the following tenor:chanrob1es virtual 1aw library

Art. VI

"Sec. 12. A twenty percent (20%) increase in the cost of living index in any one year within the term of this Agreement as shown in the Central Bank Consumer Price Index in Manila `all items’ column shall be cause for the alliance to exercise an option to renegotiate the salary schedule and other benefits."cralaw virtua1aw library

Apparently in 1979, the cost of living index increased as certified to by the Central Bank. The alliance initiated a move to renegotiate to make use of its option under the aforementioned Sec. 12 of Article VI of the CBA. The respondent Alliance proposed a 35% general salary increase in lieu of an otherwise tedious revision of the CBA’s various economic provisions to compensate for the loss in real value caused by the on-going inflation. (Rollo, p. 122.)

Thus on July 25, 17, August 1, 4, 6, 23 and September 6, 7, October 4, 12, 16 and 19, 1975, the petitioner school and the respondent alliance’s officers met for the purpose of arriving at a reasonable salary increase. However the negotiations resulted in a deadlock. The petitioner school offered an across the board increase of P250.00 in cost of living allowance a month, for all members of the bargaining unit. This was rejected by the alliance on the ground that the offered increase would substantially benefit only those in the lower pay scale and not those in the higher level of pay.

Thereafter the petitioner school changed its offer to an increase of 9.5% to salary, on top of the 15% increase granted under the CBA effective August 1, 1978. This was also refused by the respondent alliance which insisted on its original demand in addition to the 15% increase under the CBA, the faculty members be granted 25% salary increase as well as 30% cost of living allowance. In its final offer, the petitioner school increased its proposal to 10% salary increase plus 20% cost of living allowance, but the respondent alliance, stood pat on its position.

Finally, on October 23, 1979 the petitioner School filed with the Bureau of Labor Relations a petition for conciliation and/or compulsory arbitration. Acting on the petition, the Bureau of Labor Relations summoned the parties before Hearing Officer Jess Sebastian for conciliation hearings, which were held on November 7, December 8 and 21, 1979. However, despite the efforts of Officer Sebastian, the parties failed to resolve the deadlock.

Thereafter, upon the request of Officer Sebastian and upon agreement of the petitioner school and respondent alliance, the Minister of Labor intervened and assumed jurisdiction over the case pursuant to his powers under Presidential Decree No. 823, as amended.

Consequently, the Minister of Labor called the parties for hearing, unfortunately no amicable settlement could also be agreed upon. The Minister of Labor directed the parties to submit their respective Position papers and supporting documents. Accordingly, both parties submitted position papers on January 28, 1980. (Petitioner School’s position paper, Rollo, p. 22) (Respondent Alliance position paper, Rollo, p. 122).

On February 13, 1980, petitioner school filed its Reply to the respondent alliance’s Position Paper (Rollo, p. 132) while on February 25, 1980 respondent alliance submitted its rejoinder. (Rollo, p. 142).

On March 6, 1980, the Minister of Labor promulgated his Decision (Rollo, p. 155) the dispositive portion of which reads:jgc:chanrobles.com.ph

"WHEREFORE, decision is hereby rendered granting the alliance an increase of 15 percent or P786,643 for salary and P157,332 for allowances or a grand total of P943,980 effective 1 August 1979."cralaw virtua1aw library

Both parties did not appeal or move for reconsideration of the aforementioned Decision of the Minister of Labor and, thus, the same became final and executory. Meanwhile, the school granted and paid each and every faculty member covered within the bargaining unit 15% increase in salary and 20% increase in allowance amounting to P881,814.18. On the other hand, the respondent alliance on May 21, 1980 moved for execution, stating that petitioner school has not fully complied with the decision where it paid only the sum of P865,800 leaving a balance of P78,180 still due (Rollo, p. 165).

On June 11, 1980, petitioner school filed its Opposition to Motion for Execution and likewise a Motion for Entry of Satisfaction of Judgment contending that the decision dated March 6, 1980 had already been complied with. (Rollo, p. 167)

On June 16, 1980, Labor Arbiter Antonio Tria Tirona, in his capacity as Head of the Execution Arm of the Ministry of Labor and as representative of the Ministry of Labor, issued a Writ of Execution, the pertinent portion of which reads:jgc:chanrobles.com.ph

"WHEREAS, on 6 March 1980, the Hon. Deputy Minister rendered a Decision in the above entitled case, the dispositive portion of which reads:chanrob1es virtual 1aw library

‘Wherefore, decision is hereby rendered, granting the alliance an increase of 15 percent or P786,643 for salary and P157,332 for allowances or a grand total of P943,980, effective 1 August 1978.’

"Whereas, said decision has become final and in fact been partially implemented by the School which, has so far paid the alliance the sum of P865,800;

"Whereas, as of this date the School still owes the alliance the amount of P78,180 under the judgment, representing the difference between the amount of P943,980 and the payment made of P865,800." (Rollo, p. 172).

On June 20, 1980, petitioner school filed with the Minister of Labor an Urgent Ex-Parte Motion to Hold in Abeyance the Enforcement of Writ of Execution (Rollo, p. 173). Likewise, on June 23, 1980, the petitioner school filed with the Ministry of Labor a Petition for Review and/or Motion to Quash Writ of Execution, (Rollo, p. 175).

On June 30, 1980, the Execution Arm of the Ministry of Labor, through Sheriff Vicente, issued a Notice of Garnishment (Rollo, p. 185). On July 8, 1980, the Sheriff as representative of the Minister of Labor, served aforesaid Notice of Garnishment with the petitioner school’s depository bank, the First National City Bank, at Makati, Metro Manila. Petitioner school on July 9, 1980 filed with the Minister of Labor an Urgent Motion for Early Resolution and Issuance of Stay Order (Rollo, p. 186). However, no action was made by the Minister of Labor.

Hence this petition.

In their petition, petitioner school raised the following grounds to support its petition:jgc:chanrobles.com.ph

"The object failure and unreasonable delay by the Minister of Labor in resolving the school’s (a) Motion to hold in abeyance the enforcement of writ of execution, (b) Petition for Review and/or Motion to Quash writ of execution and issuance of stay order, despite their urgency, and in allowing in the meantime the execution arm of the Ministry of Labor to implement the writ of execution dated June 16, 1980, through a Notice of Garnishment dated June 30, 1980, directing the School to pay the alliance an additional amount of P78,180.00, when the School is no longer obligated therefor having already fully complied with the decision dated March 6, 1980 of the Minister of Labor, constitute grave abuse of discretion amounting to lack of jurisdiction."cralaw virtua1aw library

The petition is without merit.

The primordial issue in this case is whether or not the Minister of Labor’s failure to resolve the pending incidents before him amounts to grave abuse of discretion amounting to lack of jurisdiction.

In its petition, petitioner school contends that the Minister of Labor failed to resolve seasonably the school’s motion to Hold In Abeyance the Enforcement of Writ of Execution, Petition for Review and/or Motion to Quash Writ of Execution and Motion for Early Resolution and Issuance of Stay Order, permitting in the meantime intentionally or unintentionally the Execution Arm of the Ministry to enforce the Writ of Execution dated June 16, 1980. Such non-performance would allegedly surely cause grave and irreparable damage to the school, tantamount to grave abuse of discretion amounting to lack of jurisdiction correctible by certiorari.

On the other hand, respondent Alliance in their comment, alleged that the various motions pending before respondent Minister’s office are all designed to seek the disturbance and alteration of a long final and partially implemented decision, petitioner not having fully satisfied the judgment in MOLE Case No. CA-10-1259-79.

It has been ruled time and again that it is the ministerial duty of the court to order execution of its final and executory judgment (Service Specialists Incorporation v. Sheriff of Manila, 145 SCRA 139 [1985]). In a much earlier case this Court ruled that the decision of the Minister of Labor is immediately executory even pending appeal. Provisions of the Labor Code making immediate executory, decisions of the Minister of Labor being a special law prevail over the provisions of the Rules of Court, being of general application (MD Transit and Taxi Co., Inc. v. Estrella, 113 SCRA 378 [1982]).

A writ of execution is a matter of right in favor of a prevailing party once judgment becomes final and executory for failure to seasonably perfect an appeal. Execution is fittingly called the fruit and end of the law and aptly called the life of the law (Garcia v. Echiverri, 132 SCRA 631[1984]) and the end of suit (De Borja v. CA, G.R. No. 37944, June 30, 1988, Paras, J.). Once a decision becomes final, the Court can no longer amend or modify the same, much less set it aside. To allow the court to amend the final judgment will result in endless litigation (Del Carmen v. CA, G.R. No. 36021, February 29, 1980). Every litigation must come to an end. Access to the court is guaranteed. But there must be limit to it. Once a litigant’s right has been adjudicated in a valid final judgment of a competent court, he should not be granted an unbridled license to come back for another try. The prevailing party should not be harassed by subsequent suits. For, if endless litigation were to be encouraged, unscrupulous litigations will multiply in number to the detriment of the administration of justice (Ngo Bun Tiong v. Judge Sayo, G.R. No. 45825, June 30, 1988).

There is no dispute that the decision of the Minister of Labor in this case has become final and executory; neither petitioner nor private respondent having appealed or moved for reconsideration thereof, and that petitioner is willing to satisfy the judgment and has in fact disbursed money to private respondent for the purpose. The bone of contention however, is in the amount of the judgment. It will be noted that petitioner school never raised the issue of the supposed ambiguity of the decision of the Minister of Labor, not even in a motion for clarification.

On the other hand, the terms of the dispositive portion of the judgment are clear, that the Minister of Labor was thinking in specific amounts not in terms of percentages, although the same were based on estimates or approximations. Were it otherwise, or as petitioner school would have it, the Minister of Labor would have confined himself to statement of percentages without mentioning the total of the amount involved in each item nor the grand total of P943,980.00.

It is a primary and elementary rule of construction of documents that when the words or language thereof is clear or readily understandable by an ordinary reader, there is absolutely no room for interpretation (Leveriza v. IAC, 157 SCRA 282 [1988]). Likewise it has been held that where the import of a decision is clear, the motion for clarification of the same will be denied (Baer v. Tizon, 58 SCRA 3 [1974]).

Moreover, a lurking ambiguity if any, can be readily dissipated by a consideration of the decision in its entirety. As admitted by both petitioner and private respondent, the estimates are based on projections, so that the result of the percentages is not immediately discernible. It is therefore, obvious that the Minister decreed a fixed amount acceptable to both parties and intended to finally dispose of the case.

In addition, a writ will not be recalled by reason of any defense which could have been made at the time of the trial of the case, nor can the recall be made so as to practically change the terms of a judgment which has become final (Walfson v. Del Rosario, 46 Phil. 43 [1924]). It is likewise settled in the aforecited case that the court retains a certain amount of control over a writ of execution after it leaves its hands but control is limited and regulated by fairly definite rules of law and is not unrestricted. Thus, a writ of execution may be quashed when it appears: a) that it has been improvidently issued, or b) that it is defective in substance, or c) is issued to the wrong party, or d) that the judgment debt has been paid or satisfied, or e) when the writ has been issued without authority, or f) there had been a change in the situation of the parties which makes such execution inequitable, or g) when it appears that the controversy had never been submitted to the judgment of the court, and therefore no judgment at all had ever been rendered thereon (Cobb-Perez v. Lantin, 23 SCRA 637). However, not one of the grounds mentioned is present in the case at bar. Moreover, a part payment of the judgment does not authorize the quashal or recall of the writ in its entirety if the full amount of the judgment is due and demandable (Walfson v. Del Rosario, supra). Likewise noteworthy in the aforecited case is the fact that an extension of time fixed by a judgment which has become final for the payment of a certain sum of money is in effect a modification of the judgment and is beyond the jurisdiction of the court. Moreover, it has been settled in the case of Itogon-Suyoc Mines v. NLRC, 117 SCRA 523 [1982]), that a party cannot impugn the correctness of a judgment not appealed from by him; and while he may make counter assignment of errors, he can do so only to sustain the judgment on other grounds, but not to seek modification or reversal thereof, for in such case he must appeal. However, a party who voluntarily executes, either partially or in toto, the execution of a judgment is not permitted to appeal from it (Asian Surety and Insurance Co., Inc. v. Relucio, 47 SCRA 225 [1972]).

Neither can the dispositive portion of the case be amended or modified. It has been held that the only portion of the decision that becomes the subject of execution is that ordained or decreed in the dispositive part, whatever may be found in the body of the decisions can only be considered as part of the reasons or conclusion of the court and while they may serve as guide or enlightenment to determine the ratio decidendi, what is controlling is what appears in the dispositive part of the decision (Madelo v. Gorospe, G.R. No. 41970, March 25, 1988).

The final judgment as rendered is the judgment of the court irrespective of all seemingly contrary statements in the decision. At the root of the doctrine that the premises must yield to the conclusion is, side by side with the needs of writing finis to litigation, the recognition of the truth that "the trained intention of the judge continually leads him to right results for which he is puzzled to give unimpeachable legal reasons (Madelo v. Gorospe, supra). Fundamental is the rule that execution must conform to that ordained or decreed in the dispositive part of the decision. A court cannot except for clerical error or omission, amend a judgment that has become final (Laingo v. Camilo, 130 SCRA 144 [1984]). Similarly, in a very recent case, this Court aptly stated:jgc:chanrobles.com.ph

"We must bear in mind that final judgments are entitled to respect and should not be disturbed, as otherwise, there would be a wavering of trust in the courts. In the absence of a reasonable appeal therefrom, the questioned judgment of Judge Agana, Sr. has become final and executory. It is now the law of the case. Having been rendered by a court of competent jurisdiction acting within its authority, that judgment may no longer be altered even at the risk of legal infirmities and errors it may contain. Certainly they cannot be corrected by a special civil action of certiorari which, as in this case, was filed long after the judgment became final and executory." (San Juan v. Cuento, G.R. No. L-45063, April 15, 1988). (Italics supplied)

Under the circumstances, it is readily evident that the writs of certiorari, prohibition and mandamus will not lie. The Minister of Labor can hardly be compelled to act on motions, the end result of which would be a disturbance of an otherwise final decision.

PREMISES CONSIDERED, the petition is DISMISSED and petitioner school is directed to pay the additional amount of P78,180.00 in compliance with the decision dated March 6, 1980 of the Ministry of Labor.

SO ORDERED.

Padilla, Sarmiento and Regalado, JJ., concur.

Melencio-Herrera, J., No part. Did not participate in the deliberations.

G.R. No. 56481 July 21, 1989 - ANTONIO SORIAO v. COURT OF APPEALS, ET AL.

2012-11-11T16:53:05+00:00

FIRST DIVISION

[G.R. No. 56481. July 21, 1989.]

ANTONIO SORIAO, Petitioner, v. COURT OF APPEALS AND THE PEOPLE OF THE PHILIPPINES, Respondents.

SYLLABUS

1. REMEDIAL LAW; EVIDENCE; WEIGHT AND SUFFICIENCY; WITNESSES’ LACK OF IMPROPER MOTIVE RENDERS THEIR TESTIMONIES WORTHY OF FULL FAITH AND CREDIT. — The testimonies of the survivors of the ill-fated motor boat were uncontradicted by Soraio. We find no evidence of any improper motive on the witnesses’ part to testify against Soriao. Hence, their testimonies are worthy of full faith and credit (People v. Sawah, L-15333, June 29, 1962; 5 SCRA 385).

2. CRIMINAL LAW; MULTIPLE HOMICIDE WITH DAMAGE TO PROPERTY THRU RECKLESS IMPRUDENCE; BEING THE OWNER AND PILOT OF BOAT, DEFENDANT CANNOT INVOKE DOCTRINE OF PARI DELICTO. — A reading of the judgment of the trial court reveals that Soriao’s conviction was based not on the latter’s ownership of M/B Sweet Lord but on his role in the operation and management thereof which cost so many lives and damage to properties. Contrary to his contention, Soriao was not an ordinary passenger in that voyage. The survivors of the ill-fated M/B Sweet Lord positively declared that Soriao piloted the boat from Dinalungan up to the time just before it sank in the waters of Baler. The relatives of the victims and the survivors themselves believed that Soriao was the owner of the boat and the boss of Captain Domingo Zamora and the crew (TSNs, June 26, 1978, pp. 16, 19, 36, 82; June 27, 1978, pp. 14, 20-22). Such impression naturally would foreclose any opposition from the passengers to Soriao’s alleged suggestion that the voyage continue and his having taken the helm of the boat in lieu of Zamora. The doctrine of pari delicto would, therefore, not apply in this case.

3. ID.; ID.; DEFENSE OF ACTING UPON THE INSTINCT OF SELF-PRESERVATION; NEGATED BY THE FACT THAT ACCUSED WAS IN FULL COMMAND AND HAS MORAL ASCENDANCY OVER CO-ACCUSED. — Soriao’s claim that the instinct of self-preservation prodded him to pilot the boat because Zamora had lost control of himself and was seen just "walking back and forth on the boat" is negated by evidence which showed that he was in full command of the boat from the time he boarded the boat in Dinalungan until it proceeded on its voyage up to the time before the boat capsized. Also, We find that Soriao could easily take over the management of the boat considering his moral ascendancy over Zamora.

4. ID.; CIVIL LIABILITY; BASIS IS ART. 100 OF THE REVISED PENAL CODE. — Soriao anchors his arguments on Article 2184 of the New Civil Code which, as correctly observed by the Solicitor General, is totally irrelevant in this case. His civil liability arises from his criminal conviction pursuant to Article 100 of the Revised Penal Code.

5. ID.; ID.; INDEMNITY OF P30,000 TO THE HEIRS OF EACH VICTIM IN ADDITION TO ACTUAL DAMAGES. — The trial court likewise granted actual damages in addition to the indemnity for the death of the victims in the amount of P12,000.00 each. Presently, the indemnity for death has been increased to P30,000.00 (People v. Daniel, L-66551, April 25, 1985; 136 SCRA 92). Consequently, Soriao should indemnify the heirs of each of the victims the amount of P30,000.00 in addition to the actual damages adjudged in the decision of the trial court.

6. ID.; INDETERMINATE SENTENCE LAW; MAXIMUM TERM SHOULD BE TAKEN FROM THE MAXIMUM PERIOD OF THE PRESCRIBED PENALTY. — Considering the provisions of Article 48 of the Revised Penal Code, such maximum term should have been taken from the maximum period of the prescribed penalty of arresto mayor in its maximum period to prision correccional in its medium period under paragraph 1 of Article 365 of the same Code, that is from two (2) years, four (4) months and one (1) day to four (4) years and two (2) months. The proper penalty, therefore, that the accused Soriao should suffer is an indeterminate penalty of not less than four (4) months of arresto mayor, as minimum but not more than four (4) years and two (2) months of prision correccional, as maximum, taking into account the circumstances surrounding the offense committed.

D E C I S I O N

MEDIALDEA, J.:

This is a petition for review on certiorari under Rule 46 of the Rules of Court of the decision of the Court of Appeals dated January 30, 1981 which affirmed the decision of the Court of First Instance of Aurora Subprovince, Baler, Quezon (now the Regional Trial Court, Branch 66, at Baler, Aurora).cralawnad

The antecedent facts as summarized in the People’s brief are as follows:jgc:chanrobles.com.ph

"On January 9, 1978, at about 9:00 o’clock in the evening, M/B Sweet Lord departed from the log pond of Dibet, Casiguran, Quezon (pp. 4-5, tsn., June 27, 1978). The boat was around 44 feet in length, 5 feet in height and five feet in width (pp. 8-9, t.s.n., August 24, 1978). On board were 23 passengers, 70 sacks of copra with a weight of 80 kilos per sacks (sic), 4 sacks of rice, 4 sacks of carabao hide, luggages (sic) of the passengers, 4 pigs, 4 chickens, cash and other valuables (pp. 8, 34, t.s.n., June 27, 1978; p. 41, tsn., July 24, 1978). In addition, there were five (5) crew members among whom was the petitioner who boarded the boat in Dinalungan, Quezon (p. 5, tsn., June 27, 1978). The boat was overloaded as evidenced by the fact that only a palm’s width of its height was above the water and its waterline was already submerged (p. 8, tsn., June 27, 1978). When the boat left Casiguran, it was piloted by Domingo Zamora until the petitioner boarded. (p. 21, Id.)

"At around 1:00 o’clock the following morning the boat left Dinalungan, but this time, upon the orders of the petitioner (pp. 6, 27, tsn., id.). The waves then were as big as a hut so that the boat had to stop at the port of Dinadiawan (Id., p. 6, tsn., June 26, 1978). After three hours of waiting, the petitioner ordered the boat to resume its voyage despite the fact that the sea was still rough (pp. 6-7, Id.). Petitioner made this order over the objection of the employed captain Zamora, who said that the boat could not cope with the trip anymore (p. 6, tsn., June 27, 1978). And as expected the boat sank, causing the death of most of the passengers and the loss and destruction of the cargoes. (p. 7, Id.)" (pp. 132-134, Rollo).

Petitioner Antonio Soriao (Soriao, for brevity) and Domingo Zamora (Zamora, for brevity) were charged with the crime of multiple homicide and damage to property thru reckless imprudence before the Court of First Instance of Aurora Sub-province, Baler, Quezon, under an information which reads:jgc:chanrobles.com.ph

"That on or about the 10th day of January, 1978, on the Pacific Ocean, in the Municipality of Baler, Subprovince of Aurora Province of Quezon, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, conspiring together and helping each other, being then the persons-in-charge and operators of a motor boat, ‘SWEET LORD,’ which they had overloaded with passengers and cargoes, did then and there wilfully, unlawfully and feloniously manage and operate, or cause to be managed and operate, the said motor boat SWEET LORD, which is owned jointly by accused Antonio Soriao and his cousin, Anacleto Tejerero, in a careless, reckless and imprudent manner without taking the necessary precautions to avoid accident to persons or damage to property, thus causing by their said carelessness, recklessness and imprudence the said motor boat, to capsize and casting into the ocean all its 28 passengers and cargoes, drowning to death the following passengers, to wit: Teresita Teves, Maria Teves, Gloria Bernal, Salvacion Bernal, Jose Bernal, Rodrigo Discarga, Julio Discarga, Arturo Turno, Rosa Bernal Turno, Ricky Rodolfo, Aurora Estabaya Ocillado, Nelson Ocillado, and other missing or unidentified passengers, and causing the irretrievable loss at sea of the following properties, to wit: P5,700.00 cash money, 2 male pigs valued at P750.00, and 4 sacks of rice worth P400, belonging to Teresita Teves; P1,300.00 cash money, Titus wrist watch worth P150.00, 6 chickens, 1 goose, and two ducks all worth P128.00, owned by Dominga Teves, two luggages full of clothes worth P600.00 belonging to Teresita Teves, Dominga Teves and Maria Teves; P4,000.00 cash money and 22 pieces of dried cowhide worth P3,430.00 belonging to Jose Bernal; P700.00 cash money and Fly Wheel machine for generator worth P550.00 owned by Julio Discarga; P500 cash money of Rodrigo Discarga; P399.00 cash money of Gloria Bernal; 2 pigs worth P400.00, cash money in the sum of P3,000.00, and one bayong or bag full of clothes worth P200.00 belonging to Arturo Turno; and P500.00 cash money owned by Raul Ocillada, to the damage and prejudice of the aforementioned owners in the total sum of P22,707.00, Philippine Currency.

"Contrary to law." (pp. 1-2, Records)

The Case proceeded against Soriao only since Zamora remains at-large. On October 27, 1978, after trial on the merits, the Court of First Instance rendered judgment, the dispositive portion of which reads:jgc:chanrobles.com.ph

"WHEREFORE, the Court finds the accused Antonio Soriao guilty beyond reasonable doubt of the crime of multiple homicide with damage to property thru reckless imprudence, and applying Article 365, paragraphs 1 and 5 in connection with Article 48 of the Revised Penal Code, and the Indeterminate Sentence Law, hereby sentences him to suffer the indeterminate penalty of from four (4) months of arresto mayor as minimum to two (2) years and four (4) months of prision correccional as maximum; to indemnify the heirs of the deceased in the sums appearing opposite their respective names:chanrob1es virtual 1aw library

Benilda Temejo P12,400

Teresita Tanteo-Teves 17,728

Dominga Teves and Maria Teves (sisters) P25,300

Ricky Rodolfo P12,000

Aurora Estabaya P12,400

Nelson Osellada (Ocillado) P12,000

Emma Aseniro and Reynaldo Banania (spouses) P26,000

Gloria Bernal P12,500

Salvacion Bernal P12,000

Arturo Turno and Rosa Bernal (spouses) P27,400

Julio Discarga P13,200

Rodrigo Discarga P12,500

Jose Bernal P16,000

Leonisa Bagadiong P12,000

Edna Bagadiong P12,000

Benjie Bagadiong P12,000

Eduardo Bagadiong P12,000

and Felix Rodolfo in the sum of P1,459 and Loreto Tanteo in the sum of P2,430, without subsidiary imprisonment in case of insolvency, with all the accessory penalties of the law, and to pay one-half (1/2) of the costs.

"The accused Domingo Zamora not having been as yet arrested since the issuance of the warrant of arrest on May 2, 1978, LET another warrant of arrest be issued for his apprehension, and so that this case with respect to him may not remain pending, LET the record be sent to the files after the promulgation of this decision, without prejudice to its withdrawal therefrom as soon as he is arrested.

"The Clerk of Court shall forward the original warrant to the Commanding Officer of the Aurora District Command stationed at San Luis, Quezon, and a copy thereof to the proper station commander of the Integrated National Police.

"SO ORDERED.

"Baler, Subprovince of Aurora, Quezon, October 27, 1978." (pp. 71-72, Records)

Whereupon, Soriao appealed to the Court of Appeals which, as earlier stated, affirmed the aforesaid judgment. Hence, the present recourse.

In the resolution of July 15, 1981 (p. 42, Rollo), We required the respondents to comment on the herein petition. Said comment was filed on September 17, 1981 (p. 49, Rollo). On September 30, 1981, We denied the petition for lack of merit (p. 58, Rollo). Petitioner Soriao filed two succeeding motions for extension to file motion for reconsideration which We granted in the resolutions of November 18, 1981 (p. 71, Rollo) and December 7, 1981 (p. 86, Rollo), respectively. Subsequently, the motion for reconsideration was filed (p. 75, Rollo). In the same resolution of December 7, 1981, We required the respondents to comment thereon. Said comment was filed on January 28, 1982 (p. 93, Rollo) to which a reply thereto was filed by Soriao (p. 100, Rollo). In the resolution of March 7, 1982, We (1) set aside the resolution of September 30, 1981; and (2) gave due course to the petition (p. 107, Rollo). Thereafter, the parties were required to file their respective briefs.

The sole issue posed in the instant petition is whether or not Soriao is liable to suffer the prison term and civil damages meted out by the trial court and affirmed by the Court of Appeals (Petitioner’s Brief, p. 7).

Petitioner Soriao contends that he is neither the owner nor captain of the M/B Sweet Lord but merely a passenger thereof and submits proofs of a (1) deed of sale of the boat engine to his cousin, Cleto Tejerero on August 30, 1977; (2) Mayor’s permit which showed the registration of the boat in the name of Cleto Tejerero; (3) official receipt for fixed tax payment dated January 26, 1978; and (4) municipal tax license; that he merely suggested that the voyage continue despite the rough weather to which the other passengers did not object and thus, if he were negligent, all the others had an equal share in that negligence; that he took over the command of the boat since the boat captain had lost control of himself and was seen just "walking back and forth on the boat" (p. 11, Petitioner’s Brief); that he merely acted on the instinct of self-preservation; and that, therefore, he has no civil and criminal liability pursuant to Article 2184 of the New Civil Code.

At first blush it would appear that Soriao’s arguments could be valid. However, after a painstaking review of the records of the case, We are constrained to uphold the findings of the Court of Appeals.

Soriao asserts that he is neither the owner nor the captain but only a passenger of M/B Sweet Lord. Likewise, he maintains that he merely suggested that the voyage continue despite the stormy weather to which the other passengers did not object. Thus, he concludes that if he were negligent, then the rest of the passengers would equally share in his negligence under the doctrine of pari delicto. Soriao’s submissions deserve no merit. We are not dealing here with the issue of ownership of the boat but of Soriao’s criminal liability under Article 365 of the Revised Penal Code. A reading of the judgment of the trial court reveals that Soriao’s conviction was based not on the latter’s ownership of M/B Sweet Lord but on his role in the operation and management thereof which cost so many lives and damage to properties. Contrary to his contention, Soriao was not an ordinary passenger in that voyage. The survivors of the ill-fated M/B Sweet Lord positively declared that Soriao piloted the boat from Dinalungan up to the time just before it sank in the waters of Baler (TSNs, June 26, 1978, pp. 7, 15-16; June 27, 1978, p. 6; July 24, 1978, pp. 18 and 20). These testimonies were uncontradicted by Soriao. We find no evidence of any improper motive on the witnesses’ part to testify against Soriao. Hence, their testimonies are worthy of full faith and credit (People v. Sawah, L-15333, June 29, 1962; 5 SCRA 385). The relatives of the victims and the survivors themselves believed that Soriao was the owner of the boat and the boss of Captain Domingo Zamora and the crew (TSNs, June 26, 1978, pp. 16, 19, 36, 82; June 27, 1978, pp. 14, 20-22). Such impression naturally would foreclose any opposition from the passengers to Soriao’s alleged suggestion that the voyage continue and his having taken the helm of the boat in lieu of Zamora. The doctrine of pari delicto would, therefore, not apply in this case.

Soriao’s claim that the instinct of self-preservation prodded him to pilot the boat because Zamora had lost control of himself and was seen just "walking back and forth on the boat" is negated by evidence which showed that he was in full command of the boat from the time he boarded the boat in Dinalungan until it proceeded on its voyage up to the time before the boat capsized. Diosdado Temajo testified that Soriao instructed Zamora to go and stop at Dinadiawan to "let the big waves subside" ; that after three hours, he directed the continuation of the voyage inspite of the turbulent weather since the boat could withstand the storm; and that Soriao steered the boat sometimes (TSN, June 26, 1978, pp. 6-7). Witness Raul Ocillada corroborated Temajo’s testimony in regard to Soriao’s order to stop by Dinadiawan; that he ordered the captain not to proceed unless the order is given; and that he ordered the resumption of the trip (TSN, June 26, 1978, pp. 36, 35-39). Another witness, Felix Rodolfo testified that Soriao piloted the boat when it left Dinalungan; and that he ordered the continuation of the voyage despite the objection of Zamora (TSN, June 27, 1978). Against this backdrop, Soriao could not have just taken the helm of M/B Sweet Lord moments before the disaster occurred as he wants Us to believe. He proceeded with the voyage despite the evident risk to the lives of the passengers in view of the storm and the fact that the boat was then overloaded. The Court of Appeals noted such recklessness and ruled:jgc:chanrobles.com.ph

". . . Instead of waiting for fair weather to return, appellant ordered Domingo Zamora to resume the voyage of the boat, in the belief that their boat could cope with the weather situation. Viewed thus, there was therefore already an attendant risk brought about by the weather conditions still prevailing but appellant then entertained the reckless belief that the newly constructed vessel could cope with the situation which unfortunately turned out to be a mistake. As the vessel then was manifestly a common carrier, loaded with paying passengers and cargo it was the legal and moral duty of appellant to observe extraordinary diligence specially with regard to the safety of the passengers. Here added to the handicap of the bad weather which had not fully subsided is the overloaded condition of the boat such that the portion of the boat above the water is stated to be only the length of a palm and the indicated red water line was submerged (tsn 9, June 26, 1978)." (pp. 37-38, Rollo)

Also, We find that Soriao could easily take over the management of the boat considering his moral ascendancy over Zamora. Thus, We agree with the trial court which held that:jgc:chanrobles.com.ph

"3. Given the evidence presented by the defense itself, that the accused and Cleto Tejerero are first cousins; the M/B Sweet Lord was constructed in Dinalungan near the house of the brother of the accused, Honorio Soriao, adjacent to the house of Dominador Bagadiong for about thirty-nine days; the accused helped in its construction as a carpenter during which Cleto Tejerero and Master Carpenter Potenciano de Guzman stayed in his house; he was on the M/B Sweet Lord when it was tested for a long distance trip to Baler on January 5, 1978, together with Cleto Tejerero, Master Carpenter Potenciano de Guzman, Crispulo Udato, Eddie Bagadiong and Domingo Zamora who was its pilot and was also being tested as such; he was on the M/B Sweet Lord when it made its ill-fated trip to Baler at about 1 in the morning of January 10, 1978; and that after it capsized, he reported it to the police of Baler and he told them, among other things, that:chanrob1es virtual 1aw library

‘12. T: Bakit at sa aking pagkaka-alam sangayon sa mga tao o sakay na nakaligtas sa nasabing aksidente ikaw daw ang siyang may-ari nito?

S: Hindi po ako and may-ari kundi itong si Anacleto Tejerero at ang bilin lamang niya sa akin ng siya ay umalis patungo sa Maynila para kumuha ng lisensiya ay ibigay sa akin ang collection ng nasabing bangka hanggat hindi siya dumating galing sa Maynila.’

which instruction was given by Cleto Tejerero, in the presence of Domingo Zamora, on January 5, 1978 in the store in Cemento, Baler, Quezon where they took a snack after the successful test-trip of the M/B Sweet Lord, it is not hard to believe that the accused piloted the said M/B Sweet Lord at about 9-to-10 in the morning of January 10, 1978 when it was between Dipaculao and Baler and when it was hit by three waves and it capsized, for he being a close relative and confidant of Cleto Tejerero had ascendancy over Domingo Zamora who was a pilot-on-test . . ." (pp. 70-71, Records)

Finally, Soriao anchors his arguments on Article 2184 of the New Civil Code which, as correctly observed by the Solicitor General, is totally irrelevant in this case. His civil liability arises from his criminal conviction pursuant to Article 100 of the Revised Penal Code.

The maximum term of the indeterminate penalty imposed by the trial court on the accused Soriao and affirmed by the respondent court is not correct. Considering the provisions of Article 48 of the Revised Penal Code, such maximum term should have been taken from the maximum period of the prescribed penalty of arresto mayor in its maximum period to prision correccional in its medium period under paragraph 1 of Article 365 of the same Code, that is from two (2) years, four (4) months and one (1) day to four (4) years and two (2) months. The proper penalty, therefore, that the accused Soriao should suffer is an indeterminate penalty of not less than four (4) months of arresto mayor, as minimum but not more than four (4) years and two (2) months of prision correccional, as maximum, taking into account the circumstances surrounding the offense committed.

The trial court likewise granted actual damages in addition to the indemnity for the death of the victims in the amount of P12,000.00 each. Presently, the indemnity for death has been increased to P30,000.00 (People v. Daniel, L-66551, April 25, 1985; 136 SCRA 92). Consequently, Soriao should indemnify the heirs of each of the victims the amount of P30,000.00 in addition to the actual damages adjudged in the decision of the trial court.

ACCORDINGLY, the petition is DENIED and the decision of the Court of Appeals is hereby AFFIRMED with the modification of the penalty imposed upon Soriao and the increased amount of indemnity for death in addition to the actual damages adjudged in the decision of the trial court as above indicated. With costs against Soriao.chanroblesvirtualawlibrary

SO ORDERED.

Narvasa, Cruz, and Gancayco, JJ., concur.

Separate Opinions

GRIÑO-AQUINO, J., concurring and dissenting:chanrob1es virtual 1aw library

I concur in the affirmance of the conviction of the petitioner, but I regret to have to dissent with regard to the penalty.

The crime in this case is a complex one: multiple homicide (28 persons killed) with damage to property (worth P22,707.00) through reckless imprudence. The penalty for homicide through reckless imprudence is arresto mayor in its maximum period to prision correccional in its medium period (Art. 365, Rev. Penal Code). Since the offense is complexed with other homicides and damage to property, it should be imposed in its maximum period, i.e., prision correccional in its medium period, or two years, 4 months and 1 day to four (4) years, and two (2) months (Art. 48, Rev. Penal Code). In view of the Indeterminate Sentence Law, the accused is entitled to an indeterminate sentence the maximum term of which shall be that which in view of the attending circumstances, could be properly imposed under the Revised Penal Code and to a minimum which shall be within the range of the penalty next lower to that prescribed by the Code for the offense.

Since the penalty prescribed by the Penal Code in this particular case is prision correccional medium, what is the next lower penalty?

In computing the indeterminate penalty in this case, the Honorable Ponente took the whole range of arresto mayor maximum to prision correccional medium, consisting of three periods, which is the penalty for simple homicide through reckless imprudence, and treated it as though it were also the penalty for the complex crime of multiple homicide with damage to property through reckless imprudence. He imposed on the accused an indeterminate penalty of arresto mayor medium (4 months) as minimum, to prision correccional medium (4 years and 2 months) as maximum. In so doing, he skipped two periods: prision correccional minimum and arresto mayor maximum, which should not have been done because these periods are independent penalties; they do not form part of the penalty for the complex crime of multiple homicide with damage to property through reckless imprudence which is only prision correccional in its medium period.

In my opinion, the next lower penalty to prision correccional medium is prision correccional minimum, but as the crime is a complex one, We should take the upper limits of that penalty as the minimum penalty imposable on the accused.

The authority for this manner of graduating the penalty for a complex crime is People v. Gayrama, 60 Phil. 796 (1934) where the crime committed was homicide with assault upon an agent of authority which is punishable with reclusion temporal in its maximum period. This Court held that the next lower penalty (in view of the presence of three mitigating circumstances) was reclusion temporal medium which, in view of the Indeterminate Sentence Law, was further reduced by one degree to reclusion temporal minimum.

Gayrama was followed in Cu Unjieng, 61 Phil. 236, 302; Silvallana, 61 Phil. 636; Del Carmen, 61 Phil. 401; Co Arquiza, 62 Phil. 611; Catacutan, 64 Phil. 107; Lawas, 97 Phil. 975; and Peñas, 66 Phil. 682 and 68 Phil. 533.

Evidently, when the penalty prescribed by law consists of only one period of a divisible penalty, the next lower penalty is the period immediately following it in the scale of penalties (Vol. 1, 1987 Ed., Aquino’s Rev. Penal Code, p. 655).

I therefore suggest that an indeterminate prison term of two years and four months of prision correccional minimum, as minimum, to four years and two months of prision correccional medium, as maximum, be imposed on the petitioner in this case.

G.R. No. 59805 July 21, 1989 - LEONILA J. LICUANAN v. RICARDO D. DIAZ, ET AL.

2012-11-11T16:53:05+00:00

FIRST DIVISION

[G.R. No. 59805. July 21, 1989.]

LEONILA J. LICUANAN, Petitioner, v. HON. RICARDO D. DIAZ, Judge, Branch XXVII Court of First Instance of Manila, and AIDA PINEDA, Respondents.

SYLLABUS

1. CIVIL LAW; ORGANIZATIONS AND CONTRACTS; CONSIGNATION; DEPOSIT MADE WITH THE OFFICE FOR CIVIL RELATIONS, AFP, NOT VALID. — This issue as to whether the deposit made with the office for Civil Relations, AFP is valid consignation was already answered in the negative by this Court in the case of Landicho v. Tensuan (150 SCRA 410, 415 [1987]) wherein it stated — "Their protestation that they deposited the rentals due though belatedly in the Office of then Presidential Assistant Ronaldo Zamora does not help their cause at all. The law prescribes that such consignation or deposit of rentals should be made with the Court and/or under Batas Pambansa Blg. 25 in the bank and not elsewhere."cralaw virtua1aw library

2. ID.; ID.; ID.; JURISDICTIONAL NOTICE OF DEPOSIT TO THE LESSOR, NOT COMPLIED WITH IN CASE AT BAR. — In the case of Soco v. Militante (123 SCRA 160, 166-167 [1983]), this Court enumerated the requirements prescribed by law for a valid consignation (p. 173). One of the given requirements is that — after consignation had been made, the person interested was notified thereof (Art. 1178, Civil Code). In the instant case, perusal of the records will readily show that private respondent failed to comply with the mandatory requirement of notice to the lessor before and after the deposit. Even granting that petitioner was present when the hearing officer of the Office for Civil Relations, AFP, instructed private respondent to deposit the April rental, it will be noted that petitioner thereafter was never notified that a deposit was made in the said office; and in the succeeding monthly rentals, no tender of payment was made to petitioner, nor was she given any notice that consignation will be made or that consignation had been made.

3. ID.; ID.; ID.; ID.; REASON. — The reason for this is obvious, namely, to enable the creditor to withdraw the goods or money deposited. Indeed, it would be unjust to make him suffer the risk for any deterioration, depreciation or loss of such goods or money by reason of lack of knowledge of the consignation. (p. 181)

D E C I S I O N

PARAS, J.:

This is a petition for review on certiorari of the October 15, 1981 Decision of the then Court of First Instance of Manila affirming the August 8, 1979 Decision of the City Court of Manila.cralawnad

Herein petitioner is the owner of an apartment situated at 3415 F. Aguilar St., Bo. Obrero, Tondo, Manila, being rented by herein private respondent since March, 1973. On January 22, 1974, they executed a lease contract, and stipulated therein, among others, that the monthly rental is One Hundred Eighty Pesos (P180.00) to be paid within the first five (5) days of every month.

On April 4, 1978, the law office of Amado E. Salalongos and Associates sent private respondent a letter, the body of which, reads:jgc:chanrobles.com.ph

"Upon arrival of your lessor, Mrs. Leonila Licuanan from the United States, she found out that you have occupied her garage situated at 3415 F. Aguilar, Bo. Obrero, Tondo, Manila, which portion is not included in your lease contract, and that despite her request that you remove the aparador and other things which you have placed there as your stockpile, you have failed and refused to do so, and instead showed arrogance by telling her that it will need a court order before she removes the same and restores possession to you, in violation of the terms of your contract.chanrobles virtual lawlibrary

"In view thereof, we are giving you five (5) days from receipt hereof within which to vacate the premises at 3415 F. Aguilar, otherwise, we shall be constrained to file an ejectment suit against you."cralaw virtua1aw library

Private respondent, reacting to the said letter, on April 12, 1979, wrote the Civil Relations Service, AFP, Camp Aguinaldo, Quezon City, for help. A portion of her letter, reads:jgc:chanrobles.com.ph

"May I have the honor to solicit the help of your good office with regard to the letter I received from the law office of Amado C . Sagalongos & Associates attached herein.

"The accusations implied therein are not true and for your information, Sir, I have faithfully paid my monthly rentals from the time we occupied our apartment on March, 1973 up to March, 1978."cralaw virtua1aw library

On April 24, 1978, both petitioner and private respondent appeared before Lt. Col. Antonio Penala, Hearing Officer of the Civil Relations Service, but since the parties failed to reach any agreement, Lt. Col. Penala placed the notation "HOLD" on the pertinent document; and as precautionary measure, instructed private respondent to deposit the amount of rental due for that month so that she could not be charged with non-payment, which directive private respondent readily complied with and she was issued the corresponding receipt.

On August 30, 1978, private respondent received a letter from Atty. Manuel Melo, counsel for petitioner, demanding payment of the April to August, 1978 rentals amounting to P900.00.

On September 13, 1978, petitioner filed Civil Case No. 037226-V with the City Court of Manila, Branch VII, presided over by Hon. Priscilla C. Mijares, against private respondent for unlawful detainer with damages (Rollo, pp. 11-13). In the same, petitioner alleged, among others, that private respondent had failed to pay her monthly rentals from April to September, 1978, amounting to P1,080.00; that a demand letter dated August 23, 1978, was sent and received by private respondent on August 30, 1978, wherein it is demanded that she pay her rentals in arrears and to vacate the premises; and that despite repeated demands, written and verbal, she refuses to pay her rentals in arrears and to vacate the premises.

On September 27, 1978, private respondent filed her answer (Ibid., pp. 14-17). In the same, private respondent, among others, denies that she failed in paying her monthly rentals, claiming that petitioner has refused the rental being tendered and that upon advice of the Office of the Civil Relations, AFP, she deposited her monthly rentals with that office for the months of April to September, 1978, inclusive at P180.00 a month; and that she admits having received the letter of demand dated August 23, 1978, and claims that upon receipt of the said letter, she called up by telephone petitioner’s counsel, Atty. Manuel Melo, informing him that the rentals due for the months of April to August, 1978 have been deposited with the Office of Civil Relations, AFP, and that petitioner can withdraw the said amount due from the said office.

The trial court, in a Decision dated August 8, 1979, ruled in favor of private respondent (Ibid., pp. 37-42). The dispositive portion of the said decision reads:jgc:chanrobles.com.ph

"In view thereof, the complaint for unlawful detainer with damages is hereby dismissed for lack of merit. The petition for consignation having been rendered moot and academic, said petition is also hereby dismissed."cralaw virtua1aw library

Petitioner appealed the decision, but the then Court of First Instance of Manila, presided over by herein respondent judge, in a Decision dated October 15, 1981, affirmed the appealed judgment (Ibid., pp. 71-74). The decretal portion of the said decision reads:jgc:chanrobles.com.ph

"WHEREFORE, the decision of the lower Court dismissing the instant cases for unlawful detainer with damages and for consignation is hereby AFFIRMED.

"Defendant-appellee, Aida Pineda, is hereby ordered to pay the plaintiff the monthly rentals as provided for in the lease contract for all the succeeding months from September, 1981."cralaw virtua1aw library

A Motion for Reconsideration was filed (Ibid., pp. 75-77), but the same was denied in an Order dated February 18, 1982 (Ibid., pp. 92-93). Hence, the instant petition.chanrobles virtualawlibrary chanrobles.com:chanrobles.com.ph

Petitioner raised six (6) assignments of error to wit:jgc:chanrobles.com.ph

"Error 1, the finding as valid and legal `consignation’ Pineda’s deposit with the Office of Civilian Relations of the Armed Forces at Camp Aguinaldo, her rent due to Licuanan, instead of making proper CONSIGNATION with a court or with a bank as provided by law.

"Error 2, the finding as sufficient and valid in the law the testimony of Pineda one year after the alleged deposit with the Army.

"Error 3, in affirming the lower Court’s grave legal error of injecting a totally outlandish matter into the case and improperly converting the same to form part of the ground for its erroneous decision.

"Error 4, in not finding as REASONABLE COMPENSATION for illegally detained property the payments made by Pineda to Licuanan which were delayed far beyond the three months at any one time provided by the rental law.

"Error 5, in finding as bona fide rent what Pineda paid which was delayed for sixteen months (16) from October of 1978 to January of 1980, which was five times the three (3) months at any one time provided by law.

"Error 6, being germane to Error 1 supra, but earlier omitted by inadvertence, is in finding that Pineda tendered her rent payment to Licuanan but that Licuanan refused to accept the same."cralaw virtua1aw library

The instant petition is impressed with merit.

The main issue in this case is whether or not private respondent’s deposit of the rentals due to petitioner with Civil Relations Service, now Office for Civil Relations, AFP, is a valid consignation.

This issue was already answered in the negative by this Court in the case of Landicho v. Tensuan (150 SCRA 410, 415 [1987]) wherein it stated —

"Their protestation that they deposited the rentals due though belatedly in the Office of then Presidential Assistant Ronaldo Zamora does not help their cause at all. The law prescribes that such consignation or deposit of rentals should be made with the Court and/or under Batas Pambansa Blg. 25 in the bank and not elsewhere."cralaw virtua1aw library

In addition, it must be stated that in the case of Soco v. Militante (123 SCRA 160, 166-167 [1983]), this Court ruled that the codal provision of the Civil Code dealing with consignation (Articles 1252-1261) should be accorded a mandatory construction —

"We do not agree with the questioned decision. We hold that the essential requisites of a valid consignation must be complied with fully and strictly in accordance with the law. Articles 1256 to 1261, New Civil Code. That these Articles must be accorded a mandatory construction is clearly evident and plain from the very language of the codal provisions themselves which require absolute compliance with the essential requisites therein provided. Substantial compliance is not enough for that would render only directory construction to the law. The use of the words ‘shall’ and ‘must’ which are imperative, operating to impose a duty which may be enforced, positively indicated that all the essential requisites of a valid consignation must be complied with. The Civil Code Articles expressly and explicitly direct what must be essentially done in order that consignation shall be valid and effectual . . ."cralaw virtua1aw library

Likewise, in the said Soco case, this Court enumerated the requirements prescribed by law for a valid consignation (p. 173). One of the given requirements is that — after consignation had been made, the person interested was notified thereof (Art. 1178, Civil Code). The reason for such a requirement was given by this Court. It stated —

"The reason for the notification to the persons interested in the fulfillment of the obligation after consignation had been made, which is separate and distinct from the notification which is made prior to the consignation, is stated in Cabanos v. Calo, G.R. No. L-10927, October 30, 1958, 104 Phil. 1058, thus: ‘There should be notice to the creditor prior and after consignation as required by the Civil Code. The reason for this is obvious, namely, to enable the creditor to withdraw the goods or money deposited. Indeed, it would be unjust to make him suffer the risk for any deterioration, depreciation or loss of such goods or money by reason of lack of knowledge of the consignation.’" (p. 181)

In the instant case, perusal of the records will readily show that private respondent failed to comply with this requirement. Even granting that petitioner was present when the hearing officer of the Office for Civil Relations, AFP, instructed private respondent to deposit the April rental, it will be noted that petitioner thereafter was never notified that a deposit was made in the said office; and in the succeeding monthly rentals, no tender of payment was made to petitioner, nor was she given any notice that consignation will be made or that consignation had been made.

PREMISES CONSIDERED, the October 15, 1981, Decision of the then Court of First Instance of Manila is REVERSED and SET ASIDE, and the respondent is ordered to vacate the premises and to pay all accrued rentals.cralawnad

SO ORDERED.

Melencio-Herrera, (Chairman), Padilla, Sarmiento and Regalado, JJ., concur.