1. ACTIONS; TO QUIET TITLE AND ACCION PUBLICIANA; DIFFERENT CAUSES OF ACTION; FINAL JUDGMENT IN ONE IS NOT A BAR TO ANOTHER. — Where the previous case was merely a plenary action for recovery of possession or acción publiciana, involving only the question of who, between the parties, had the better right to possess the property in question, and in the present case between the same parties, plaintiffs seek to compel the other to execute a formal deed of sale over the same property to enable him to obtain a transfer certificate of title in his name and quiet his title over the same, the second action is not barred by final judgment in the previous case, which is res judicata only in so far as one of the parties was held to have the better right of possession.

In Civil Case No. 19883 of the Court of First Instance of Manila, plaintiffs Marcelo Tesoro, Antonia Tesoro, and David Tesoro sought to recover from the spouses Dalmacio Cabañero and Maria Limjuco the possession of a house and lot situated in Barrio Obrero, City of Manila, registered in the name of plaintiffs’ deceased father, Cirilo Tesoro, under Transfer Certificate of Title No. 38022 of The Register of Deeds of Manila. In defense, defendants claimed to have purchased the property in question from the late Cirilo Tesoro, the registered owner. After trial, the court found that plaintiffs, as the heirs of the registered owner, were entitled to the possession of the property in question, without prejudice to defendants’ right to prove their alleged purchase in a proper action; and rendered judgment for the plaintiffs. On appeal to the Court of Appeals by defendants, the appellate Court held the sale of the property by Cirilo Tesoro to defendants-appellants to have been duly established and that appellants were the ones entitled to the possession thereof by virtue of said purchase; and reversed the judgment of the court below and dismissed the complaint. Plaintiffs-appellees tried to appeal the judgment to this Court, but we dismissed the petition for review (G. R. No. L-10138) for lack of merit.

Subsequently, the spouses Dalmacio Cabañero and Maria Limjuco filed against the Tesoro Civil Case No. 32502 in the Manila Court, to compel the latter to execute in their favor the formal deed of sale of the same property involved in the first case between the same parties and sold to the plaintiff spouses by the registered owner Cirilo Tesoro under a private deed of sale, to quiet their title over the property and to enable them to obtain a transfer certificate of title in their name. Defendants Tesoros moved to dismiss the complaint on the ground of res judicata, alleging that the question raised by the complaint had already been adjudicated by the Court of Appeals and this Court in the previous Civil Case No. 19883 between the same parties. The trial court found favorably for the motion and dismissed the complaint. Plaintiffs moved to reconsider the order of dismissed but failed. Whereupon, they appealed to this Court.

We agree with appellants that the lower court erred in holding that their present action for quieting of title and execution of a formal deed of sale is barred by res judicata or prior judgment in Civil Case No. 19883 between the same parties.

The previous case between the parties herein was merely a plenary action for recovery of possession or acción publiciana. In such an action, the only question involved is who, as between the parties, has the better right to possess the premises in question (Bishop of Cebu v. Mangaron, 6 Phil. 286; Ledesma v. Marcos, 9 Phil. 618; Roman Catholic Bishop of Lipa v. Municipality of San Jose, Batangas, 27 Phil., 571). Thus, the Court of Appeals though it found in the first case (C. C. No. 19883) that defendants (now plaintiffs-appellants) had purchased the premises in question from the registered owner Cirilo Tesoro, limited its judgment to holding that "the appellants are entitled to the possession of the property in question and that this action for recovery of possession is devoid of cause and should be dismissed" (Record on Appeal, pp. 23-24), and accordingly ordered the dismissal of the complaint for recovery of possession. Since the right to the possession of the property in question was the only issue before the court, it could not have disposed of any other issue than possession.

The lower court held, and appellees herein urge, that this Court has resolved the question of ownership in said Civil Case No. 19883 when, refusing to give due course to plaintiffs Tesoros’ petition for the review of the decision of the Court of Appeals dismissing their complaint for recovery of possession, we said that "the question of title or ownership may not be invoked" in said case. We are at a loss how this statement can possibly be interpreted as a passing upon the question of title in that particular case when, precisely, we refused to entertain the question of title urged in the petition for review, with the effect that the conclusions and findings of the Court of Appeals as to herein appellant’s superior right to possess became conclusive and binding on the parties.

The present case, upon the other hand, involves a matter and cause of action distinct and apart from the previous issue of possession raised and adjudged by the Court of Appeals in Civil Case No. 19883 between the same parties. In this case, appellants seek to compel the appellees, as heirs of the registered owner Cirilo Tesoro who, during his lifetime, sold the property in question to them under a private writing, to execute a formal deed of sale over said property, to enable them (appellants) to obtain a transfer certificate of title in their name and quiet their title over the premises. This accion is authorized by Article 1357, in relation to Article 476, of the New Civil Code, and is not barred by the final judgment in Civil Case No. 19883 that is res judicata only in so far as herein appellants were held to have the better right to possess the property in question.

The order dismissing appellants’ complaint is, therefore, reversed and set aside, and the case shall be remanded to the court of origin for further proceedings on the merits. Costs against appellees Tesoro.

Paras, C.J., Bengzon, Padilla, Montemayor, Bautista Angelo, Labrador, Concepción, Endencia, Barrera and Gutiérres David, JJ., concur.

1. OBLIGATIONS AND CONTRACTS; SOLIDARY OBLIGATIONS; PAYMENT BY ONE SOLIDARY DEBTOR; WHEN APPEAL IS NOT NECESSARY. — Article 1217 of the new Civil Code provides that "payment made by one of the solidary debtors extinguishes the obligation." The payment by one solidary debtor to the creditor, therefore, extinguished the obligation, and the juridical tie between the creditor and the solidary debtors was dissolved thereby. For this reason, there is no more need to maintain an appeal by one solidary debtor from the decision of the lower court ordering him and his co-debtor to pay their obligation to their creditor.

2. ID.; DEFENSE OF USURY; DEMANDABILITY AND MATURITY OF DEBT; NOT AFFECTED BY THE DEFENSE. — Where a promissory note is long overdue, the defense of usury does not in any way affect its maturity and demandability of a debt, but if sustained would only reduce the creditor’s recovery.

3. ID; ID.; PAYMENT BY A SOLIDARY DEBTOR; EFFECT ON DEFENSE. — Payment by a solidary debtor does not extinguish the defense of usury available to his co-debtor. The latter may still set up that defense against his co-debtor when he is sued by the latter.

On July 13, 1956, herein respondent Leon G. Moya sued petitioner Pedro C. Camus and the Luzon Surety Co., Inc. in the Court of First Instance of Negros Occidental for the payment of a promissory note in the sum of P2,500, signed by Camus, and guaranteed by a surety bond of the Luzon Surety Co., Inc. At the trial, petitioner Camus failed to appear; whereupon, the court heard plaintiff’s evidence and thereafter rendered judgment condemning the defendants to pay, jointly and severally, the amount claimed by plaintiff. Camus sought reconsideration of the judgment and a new trial, alleging, inter alia, that he had a good defense to the complaint, namely, usury; and when the court denied both, he filed his notice of appeal, record on appeal and appeal bond. Said appeal was, however, disallowed by the court because Camus’ motion for reconsideration and new trial was found to be pro forma. Camus applied to the Court of Appeals for a writ of mandamus to have his appeal allowed, but the latter court sustained the disallowance thereof by the trial court. From this last judgment, Camus appealed to this Court by certiorari.

After the filing of appellant’s brief, appellee Moya moved to dismiss the present appeal for the reason that appellant’s co- defendant, the Luzon Surety Co., Inc., had already paid the judgment of the court below in his favor, so that the issues in this case had become academic; and waived the filing of an appellee’s brief. Consideration of the motion for dismissal was deferred by us until the case is set for deliberation on the merits.

We find no necessity to go into the merits of the appeal, for, upon a careful consideration of the reasons adduced in appellee’s motion to dismiss, we agree that the appeal should be dismissed.

Appellant does not deny that his co-defendant and solidary co- debtor, the Luzon Surety Co., Inc., had already paid the judgment of the lower court during the pendency of his petition for mandamus in the Court of Appeals. Article 1217, New Civil Code, provides that payment "made by one of the solidary debtors extinguishes the obligation." The payment by the Luzon Surety Co., Inc. to appellee, therefore, extinguished the obligation of the two solidary co-debtors to appellee Moya, and the juridical tie between the creditor on the one hand, and the solidary debtors, on the other, was dissolved thereby. For this reason, there is no more need to maintain appellant Camus’ appeal from the decision of the lower court ordering him and his co-debtor to pay their obligation to appellee Moya. Whatever controversy remains from here on is solely between the two co-debtors.

Appellant argues, however, that the payment made by his co-debtor was premature and, therefore, did not extinguish the principal obligation. We can not see how said payment can be premature when the obligation of appellant Camus and the surety company to appellee was based on a promissory note that was long overdue when the complaint was filed. Even assuming that appellant’s only alleged defense of usury to the complaint is true, the same does not in any way affect the maturity and demandability of the debt but if sustained would only reduce the creditor’s recovery. There is no question, of course, that the payment by appellant’s co-debtor to appellee did not extinguish his defense of usury, which he may still set up against his co-debtor when he is sued by the latter; but until the surety company files such action against appellant, it is purely an academic matter whether appellant is entitled to such defense or not.

Appellant also urges that the Luzon Surety Co., Inc. should be substituted as plaintiff in this action to avoid multiplicity of suits. We have no power to order such substitution, since the surety company has not even intervened or shown any interest in these proceedings relative to appellant’s right to appeal from the lower court’s judgment. Neither we nor appellant can dictate the step which the surety company may choose to take against appellant for the protection of its interests.

Finally, appellant claims that the dismissal of this case would necessitate the filing of another action by him against the appellee for the recovery of whatever usurious interest the latter had exacted from him. The claim is completely untenable. Appellant can file such action against appellee only if he had already paid his indebtedness to the latter plus the alleged usurious interest. But it was precisely his failure to pay that compelled the appellee to sue him for payment of the debt, and appellant’s defense of usury, even if true, would, as already stated, only reduce his liability to his creditor, but would not entitle him to recover any amounts from the latter. And even if appellant’s solidary co-debtor, the surety company, had paid appellee more than it should (granting arguendo that the promissory note sued upon represented capital plus usurious interest, as appellant claims), such overpayment gives appellant no cause of action to collect from appellee what his solidary co-debtor had overpaid the latter, but his defense of usury would only serve to reduce his liability when he is sued by the surety company.

All in all, we agree with appellee that it would serve no useful purpose to still decide the present appeal, since no actual relief or practical result can follow therefrom. As we held in Velasco v. Rosenberg, 29 Phil., 212, "if pending an appeal, an event occurs which renders it impossible for the appellate court to grant any relief", and "similarly, where a litigation has ceased to be between parties having an adverse interest, the appeal will be dismissed."

As to the merits of the case, suffice it to point out that appellant Camus has not appended to his petition for review any copy of his motion for new trial in the Court of First Instance, and without it, this Court is in no position to say that the Court of Appeals committed error in declaring it insufficient and merely pro forma.

Wherefore, the present appeal is dismissed. Costs against appellant Pedro Camus.

Paras, C.J., Bengzon, Padilla, Montemayor, Bautista Angelo, Labrador, Concepción Endencia, Barerra and Gutierrez David, JJ., concur.

1. CRIMINAL PROCEDURE; WHEN CIVIL LIABILITY ARISING FROM CRIME MAY BE DETERMINED IN THE CRIMINAL CASE. — The civil liability arising from crime may be determined in the criminal proceedings if the offended party does not waive to have it adjudged, or does not reserve his right to institute a separate civil action against the defendant.

2. ID.; WHEN OFFENDED PARTY MAY INTERVENE IN THE PROSECUTION OF THE CRIMINAL CASE. — An offended party in a criminal case may intervene, personally or by attorney, in the prosecution of the offense, only if he has not waived the civil action or expressly reserved his right of institute it, subject, always, to the direction and control of the prosecuting fiscal.

3. ID.; ID.; PURPOSE OF INTERVENTION. — The right of intervention reserved to the offended party is for the sole purpose of enforcing the civil liability born of the criminal act and not of demanding punishment of the accused.

4. ID.; ID.; LIABILITY OF OFFENDER FOR DAMAGES; FAILURE TO ALLEGE DAMAGES IN THE INFORMATION OR COMPLAINT, EFFECT OF. — Even if the complaint or information is silent as to damages or the intention to prove and claim them, the offender is still liable for them, and the offended has the right to prove and claim for them in the criminal case, unless a waiver or the reserving of the civil action is made.

5. ID.; RES JUDICATA; WHEN JUDGMENT IN CRIMINAL ACTION BARS CIVIL ACTION FOR DAMAGES. — Where, as in the present case, the offended party elected to claim damages arising from the offense charged in the criminal case through her appearance or intervention as private prosecutor, the final judgment rendered therein constitutes a bar to the subsequent civil action for damages based upon the same cause.

6. ID.; ID.; JUDGMENT CONCLUSIVE AS TO FUTURE PROCEEDINGS. — Under the principle of res judicata, that judgment is conclusive as to future proceedings at law not only as to every matter which was offered and received to sustain the claim or demand, but as to any admissible matter that could have been offered for that purpose.

Direct appeal to this Court from an order of the Court of First Instance of Pampanga dismissing plaintiff’s complaint for damages upon defendants’ motion on the ground that it was barred by prior judgment.

The facts are not disputed. In Criminal Case No. 1225 of the court below, Segunda de la Cruz, one of herein defendants, was charged with serious oral defamation. The offended party, herein plaintiff Maria C. Roa, did not waive the civil action or reserve her right to institute it, but intervened through counsel in the prosecution of the offense. After trial, the court on April 30, 1957 rendered a decision finding the defendant Segunda de la Cruz guilty a slight slander and sentencing her to pay a fine of P50.00. It, likewise, ordered her to suffer subsidiary imprisonment in case of insolvency, with costs, but made no award as to damages.

About a month later, or on May 28, 1957, the offended party Maria C. Roa filed the present action in the same court below against Segunda de la Cruz and her husband Juan Aguas to recover moral and exemplary damages. The cause of action was based on the defamatory remarks which were the subject matter of the criminal action against Segunda de la Cruz. The aggregate amount sought to be recovered, including attorney’s fees, was P28.000.00.

Instead of filing an answer, defendants moved for the dismissal of the complaint on the grounds that it was barred by prior judgment and that it did not state a cause of action. Sustaining the motion on the first ground, the court below dismissed the complaint. Plaintiff in due time filed a motion for reconsideration, but the same was denied. Hence, this appeal.

Article 33 of the new Civil Code provides:jgc:chanrobles.com.ph

"Art. 33. In case of defamation, fraud, and physical injuries, a civil action for damages, entirely separate and distinct from the criminal action, may be brought by the injured party. Such civil action shall proceed independently of the criminal prosecution, and shall require only a preponderance of evidence."cralaw virtua1aw library

Under the above provisions, independently of a criminal action for defamation, a civil suit for the recovery of damages arising therefrom may be brought by the injured party. It is apparent, however, from the use of the words "may be", that the institution of such suit is optional. (An Outline of Philippine Civil Law by J.B.L. Reyes and R. C. Puno, Vol. I, p. 54.) In other words, the civil liability arising from the crime charged may still be determined in the criminal proceedings if the offended party does not waive to have it adjudged, or does not reserve his right to institute a separate civil action against the defendant. 1 (Dionisio v. Alvendia, 102 Phil., 443; 55 Off. Gaz. [25] 4633.)

In the instant case, it is not disputed that plaintiff Maria C. Roa — upon whose initiative the criminal action for defamation against the defendant Segunda de la Cruz was filed — did not reserve her right to institute an independent civil action. Instead, she chose to intervene in the criminal proceedings as private prosecutor through counsel employed by her. Such intervention, as observed by the court below, could only be for the purpose of claiming damages or indemnity, and not to secure the conviction and punishment of the accused therein as plaintiff now pretends. This must be so because an offended party in a criminal case may intervene, personally or by attorney, in the prosecution of the offense, only if he has not waived the civil action or expressly reserved his right to institute it, subject, always, to the direction and control of the prosecuting fiscal. (Section 15 in connection with section 4 of Rule 106, Rules of Court; Lim Tek Goan v. Yatco, 94 Phil., 197). The reason of the law in not permitting the offended party to intervene in the prosecution of the offense if he had waived or reserved his right to institute the civil action is that by such action her interest in the criminal case has disappeared. Its prosecution becomes the sole function of the public prosecutor. (Gorospe, Et Al., v. Gatmaitan, Et Al., 98 Phil., 600; 52 Off. Gaz., [5] 2526.) The rule, therefore, is that the right of intervention reserved to the injured party is for the sole purpose of enforcing the civil liability born of the criminal act and not of demanding punishment of the accused. (People v. Orais, 65 Phil. 744; People v. Velez, 77 Phil., 1026; People v. Flores Et. Al., G. R. No. L-7528, December 18, 1957; see also U. S. v. Malabon, 1 Phil., 731; U. S. v. Heery, 25 Phil. 600.)

Plaintiff having elected to claim damages arising from the offense charged in the criminal case through her appearance or intervention as private prosecutor, we hold that the final judgment rendered therein constitutes a bar to the present civil action for damages based upon the same cause. (See Tan v. Standard Vacuum Oil Co., Et Al., 91 Phil., 672; 48 Off. Gaz., [7] 2745.)

". . . A judgment upon the merit bars a subsequent suit upon the same cause, brought in a different form of action, and a party, therefore, cannot by varying the form of action or adopting a different method of presenting his case escape the operation of the principle that one and the same cause of action shall not be twice litigated." (Francisco v. Blas, Et Al., 93 Phil., 1.)

The fact that there is no claim or allegation of damages in the complaint or information is of no legal consequence. Every person criminally liable for a felony is also civilly liable. (Art. 100, Revised Penal Code.) It has, therefore, been held that even if the complaint or information is silent as to damages or the intention to prove and claim them, the offender is still liable for them, and the offended case, unless a waiver or the reservation of the civil action is made, (People v. Oraza, 83 Phil., 633; 46 Off. Gaz. Supp. No. 11, p. 86.) As already stated, herein plaintiff not only did not waive or reserve her right to file a separate civil action but actually intervened in the criminal action.

The criminal court, it is true, did not enter a judgment for indemnity when it was duty bound to do so because of the intervention of the offended party. See People v. Ursua, 60 Phil., 253.) It would appear, however, that plaintiff failed to submit evidence of her damages. For such failure, she has only herself or her counsel to blame. Of course, she could have still filed a motion for reconsideration or an appeal to rectify the error. But his she failed to do, thus allowing the decision to become final and executory. Under the principle of res judicata, that judgment is conclusive as to future proceedings at law not only as to every matter which was offered and received to sustain the claim or demand, but as to any other admissible matter that could have been offered for that purpose. (Miranda v. Tiangco, Et Al., 96 Phil., 526; 51 Off. Gaz., [3] 1366; NAMARCO v. Judge Macadaeg, 98 Phil., 185; 52 Off. Gaz. 182.)

In view of the foregoing, the order of dismissal appealed from is hereby affirmed. Without pronouncement as to costs.

Bengzon, Padilla, Montemayor, Bautista Angelo, Labrador, Concepción, Reyes, J. B. L., Endencia and Barrera, JJ., concur.

Endnotes:

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1. The case of Reyes v. de la Rosa (52 Off. Gaz., [25] 6548; 99 Phil., 1013) cited by plaintiff in support of her contention that under Art. 33 of the New Civil Code the injured party is not required to reserve her right to institute the civil action, is not applicable to the present case. There was no showing in that case that the offended party intervened in the prosecution of the offense, and the amount of damages sought to be recovered was beyond the jurisdiction of the criminal court so that a reservation of the civil action was useless or unnecessary.

1. RETIREMENT; COMMONWEALTH ACT 186; WHO ARE GRANTED THE BENEFIT. — The decedent FA, his widow or his legal heirs are not entitled to the benefit granted or provided for in the first paragraph of Section 30, Commonwealth Act No. 186, as amended by Republic Acts No. 660, 728, and 1123 because FA died on 24 July 1955 long after the basic law, Republic Act No. 660, took effect. The benefits are granted to those who died in the service within three years before the act went into effect.

2. ID.; ID.; POSITION NOT ABOLISHED NOR SEPARATED DUE TO REORGANIZATIONS. — Neither is the decedent FA entitled under the second paragraph of Section 30 of Commonwealth Act No. 186, because his office or position was not abolished nor was he separated from the service as a consequence of a reorganization, he having voluntarily retired upon his petition under Act No. 2589 while holding the position of technical adviser in the office of the President.

This is an appeal from a judgment rendered by the Court of First Instance of Rizal dismissing the plaintiffs’ complaint in civil case No. 3852. In their notice of appeal to this Court, the appellants state "that they intend to raise on appeal only questions of law."cralaw virtua1aw library

The findings of the trial court are:chanrob1es virtual 1aw library

. . . Faustino Aguilar entered Government service on July 7, 1913 as a clerk in the Philippine Assembly. Thereafter, he served continuously in various government positions. On July 1, 1947, Aguilar was appointed Manager of the Rural Progress Administration and he remained in that position until October 10, 1949 when he was appointed Technical Adviser in the Office of His Excellency, The President. On October 7, 1950, while still serving as a technical adviser in the Office of the President, Aguilar was retired upon his application under Act No. 2589 (Osmeña Act), and he was paid a gratuity of P12,000 thereunder. On the date of his retirement, Aguilar was 69 years, 7 months and 23 days old, and he had 36 years, 11 months and 29 days of government service to his credit (Exh. B). On July 15, 1951 (should be June 16), Republic Act No. 660 was enacted; and he filed a claim for retirement under Section 26 thereof with the Government Service Insurance System which entity made a final rejection of his claim after the claimant had already died. . . . .

Paragraphs 1 and 2, section 30, Commonwealth Act No. 186, as amended by Republic Act No. 660, which amendment took effect on 16 June 1951, provide:chanrob1es virtual 1aw library

Notwithstanding the provisions of this Act to the contrary, any officer or employee who died in the service within three years before said Act went into effect and who had rendered at least thirty-five years of service and who was entitled to or who could have established his right to the retirement gratuity provided for in Act Numbered Twenty-five hundred and eighty-nine, as amended, or to any other retirement benefits from any pension fund created by law shall be considered retired under the provisions of this Act his wife, or in her default, his other legal heirs shall so elect and notify the System to that effect. Upon making such election, the wife or legal heirs of the deceased officer or employee shall be paid the monthly annuity for five consecutive years or such other benefits as provided in said Act, in lieu of the retirement gratuity or retirement benefits to which the deceased was entitled at the time of his death; and any portion of such gratuity or retirement benefits already paid to his wife or other legal heirs shall be refunded to the System: Provided, That contributions corresponding to his last five years of service shall be deducted monthly from his life annuity.

Notwithstanding any provisions of this Act to the contrary, any officer or employee whose position was abolished or who was separated from the service as a consequence of the reorganization provided for in Republic Act Numbered Four hundred and twenty-two may be retired under the provisions of this Act if qualified: Provided, That any gratuity or retirement benefit already received by him shall be refunded to the System: Provided, further, That contributions corresponding to his last five years of service shall be paid as provided in section twelve of this Act. This provision shall also apply to any member of the judiciary who, prior to the approval of this Act, was separated from the service after reaching seventy years of age and rendering at least thirty years of service and who is not entitled to retirement benefit under any law.1

The decedent Faustino Aguilar, his widow, or his legal heirs are not entitled to the benefits granted or provided for in the first paragraph of section 30, Commonwealth Act No. 186, as amended by Republic Acts Nos. 660, 728 and 1123, because Faustino Aguilar died on 24 July 1955 long after the basic law, Commonwealth Act No. 186, and the first amendatory law, Republic Act No. 660, took effect. The benefits are granted to those who died in the service within three years before the Act went into effect.

Neither is the decedent Faustino Aguilar entitled under the second paragraph of the above quoted provisions of law, because his office or position was not abolished nor was he separated from the service as a consequence of a reorganization referred to therein, he having voluntarily retired upon his petition on 7 October 1950 under Act No. 2589, while holding the position of technical adviser in the office of the President.

When on 6 January 1950, Republic Act No. 422, authorizing the President to reorganize within one year the different executive departments, etc., including corporations owned or controlled by the Government, was enacted, and when on 28 November 1950, Executive Order No. 376 was promulgated by the President, abolishing the Rural Progress Administration and transferring its functions to the Bureau of Lands, the late Faustino Aguilar already had left voluntarily the service of the Rural Progress Administration to accept the office or position of Technical Adviser to the President. Hence, his position was neither abolished nor was he separated from the service as a consequence of the reorganization of the Government as authorized and provided for in Republic Act No. 422.

The judgment appealed from is affirmed, with costs against the appellants.

Paras, C.J., Bengzon, Montemayor, Bautista Angelo, Labrador, Concepción, Reyes, J. B. L., Endencia, Barrera and Gutiérrez David, JJ., concur.

Endnotes:

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1. Further amended by Republic Acts Nos. 728, which took effect on 18 June 1952, which took effect on 16 June 1954. However the amendments are not decisive of the issues raised in this appeal.

1. ADMINISTRATIVE LAW; OFFICERS; DECISION OF COMMISSIONER OF CIVIL SERVICE; EFFECT OF APPEAL TO CIVIL SERVICE BOARD OF APPEALS. — An appeal taken by a government employee pursuant to Section 695 of the Revised Administrative Code, as amended, to the Civil Service Board of Appeals from the decision of the Commissioner of Civil Service finding him guilty of grave misconduct and requiring him to resign from the service with prejudice to reinstatement, precludes the execution of the decision of the Commissioner of Civil Service. In other words, the decision did, not become final and executory.

2. ID.; ID.; ID.; DECISION OF THE CIVIL SERVICE BOARD OF APPEALS; FINAL IF NOT REVERSED BY PRESIDENT; REINSTATEMENT MINISTERIAL; BACK SALARY. — The decision of the Civil Service Board of Appeals reversing that of the Commissioner of Civil Service and absolving the employee from the charge, not having been reversed by the President, it became the final decision on the employee’s case, pursuant to Section 2 of Commonwealth Act No. 598. Consequently, the employee’s removal from office was not in accordance with law; his reinstatement became a ministerial duty of the proper authority; and the payment of back salary was merely incidental to reinstatement.

3. ID.; ID.; PENDENCY OF APPEAL; EMPLOYEE’S EMPLOYMENT IN OTHER BRANCH OF GOVERNMENT; NOT ABANDONMENT OF FORMER POSITION; BACK SALARIES. — The fact that during the time his appeal was pending and was thus deprived of his office and salary, an employee sought and found employment in another branch of the government, does not constitute abandonment of his former position. To deny him the right to collect his back salaries during such period would be tantamount to punishing him after his exoneration from the charge which caused his dismissal from the service.

This is a petition for review of the decision of the Auditor General denying the former’s claim for back salaries.

The petitioner was head teacher in Habuhab barrio school, Caibiran, Leyte, with P140 monthly salary or P1680 annually. In a complaint filed with the Bureau of Civil Service, he was charged with gross misconduct for an immoral act committed in the evening of 4 June 1948 (administrative case No. R-2533). On 14 June 1949 the Commissioner of Civil Service found him guilty as charged and required him "to resign from the service, with prejudice to reinstatement in the teaching service, effective on his last day of duty with pay." He appealed to the Civil Service Board of Appeals. On 26 June 1954 the Civil Service Board of Appeals reversed the decision of the Commissioner of Civil Service and acquitted him of the charge. On 4 June 1955 the petitioner wrote to the Division Superintendent of Schools of Leyte "accepting the reinstatement offered to take effect on June 13, 1955 if the same comes within the purview of section 260 of the Revised Administrative Code." However, in view of ill health he applied "for an indefinite sick leave of absence." Attached to the letter was a certificate issued by Dr. Vicente L. Ramo stating that the petitioner was suffering from "Hypertension, (labile)" and that he was advised to take a rest. On 14 July 1955 he wrote to the Division Superintendent of Schools of Leyte requesting payment of back salaries from 6 August 1949 to 12 June 1955, inclusive, at the rate of P1680 per annum, or a total of P9,598.58. According to the Accounting Officer of the Bureau of Public Schools, the salary due the petitioner as teacher at P140 monthly from 6 August 1949 to 17 February 1955 was P9,294.20. Deducting therefrom the sum of P5,509.63 which he received as salary for services rendered as clerk in the Office of the Provincial Treasurer of Leyte from 2 March 1951 to 17 February 1955, the sum of P3,784.57 was still due the petitioner. On 23 November 1955 the Director of Public Schools recommended to the Secretary of Education that the sum of P3,784.57 be paid to the petitioner. On 16 February 1956 the Undersecretary of Education disregarded the Director’s recommendation and denied the petitioner’s claim on the ground that he was out of the service from 6 August 1949 to 1 March 1951, inclusive, he having been dismissed by the Commissioner of Civil Service for grave misconduct; that although the decision of the Commissioner was reversed on appeal by the Civil Service Board of Appeals, payment of back salaries to him during the period of removal from office was a matter of discretion; and that funds were not available.

On 6 June 1956 the petitioner filed his claim for back salaries in the amount of P9,598.58 with the Auditor General. On 20 June 1956 the Auditor General referred the claim together with the pertinent papers to the Director of Public Schools requesting comment thereon. The Director of Public Schools must have forwarded the papers regarding the petitioner’s claim to the Secretary of Education for on 10 September 1956 the latter returned them to the former with the comment that the petitioner’s removal from office by the Commissioner of Civil Service "was final and executory, and regardless of the favorable outcome of the appeal made by petitioner to the Civil Service Board of Appeals, petitioner is not entitled to any benefit while out of the service," and denied his claim for back salaries but interposed no objection to his reinstatement to the service. On 9 November 1956 the Assistant Division Superintendent of Schools of Leyte wrote to the petitioner furnishing him with a copy of the indorsement of the Secretary of Education dated 10 September 1956 denying his claim.

On 12 December 1956 the petitioner again requested the Auditor General to approve his claim for back salaries. On 26 December 1956 the Auditor General indorsed the petitioner’s claim to the Commissioner of Civil Service through the Secretary of Education and requested his comment thereon. On 18 January 1957 the Secretary of Education transmitted the petitioner’s claim to the Commissioner of Civil Service with the comment that the Department reiterates its previous decision on the petitioner’s claim. On 27 February 1957 the Commissioner of Civil Service returned the petitioner’s claim to the Auditor General with the comment that "as it appears that the Secretary of Education, has, in the exercise of his discretion, already denied the claim of Mr. Tan for the payment of his alleged back salaries, which was reiterated in the preceding indorsement hereon, this Office is obviously not in a position to rule otherwise." On 9 March 1957 the Auditor General returned to the petitioner the papers on his claim with the statement that he concurs "in the views of the Commissioner of Civil Service expressed in the next preceding indorsement." On 27 March 1957 the petitioner requested the Auditor General to reconsider his decision. On 29 April 1957 the Auditor General denied his request for reconsideration.

Section 695 of the Revised Administrative Code, as amended by Commonwealth .Act No. 598, partly provides:.

. . . From any decision of the Commissioner of Civil Service on administrative investigations, an appeal may be taken by the officer or employee concerned to the Civil Service Board of Appeals within thirty days after receipt by him of the decision.

Section 2, Commonwealth Act No. 598, establishing a Civil Service Board of Appeals, partly provides:chanrob1es virtual 1aw library

. . . The Civil Service Board of Appeals shall have the power and authority to hear and decide all administrative cases brought before it on appeal, and its decision in such cases shall be final, unless reversed or modified by the President of the Philippines . . . .

The appeal taken by the petitioner to the Civil Service Board of Appeals from the decision of the Commissioner of Civil Service finding him guilty of grave misconduct and requiring him to resign from the service with prejudice to reinstatement precluded the execution of the decision of the Commissioner of Civil Service. In other words, the decision did not become final and executory. The decision of the Civil Service Board of Appeals reversing that of the Commissioner of Civil Service and absolving the petitioner from the charge was not reversed or modified by the President. It, therefore, became the final decision on the petitioner’s case. Consequently, the petitioner’s removal from office was not in accordance with law; his reinstatement became a ministerial duty of the proper authority; and the payment of back salary was merely incidental to reinstatement 1

The fact that during the pendency of the petitioner’s appeal in the Civil Service Board of Appeals, he worked as clerk in the Office of the Provincial Treasurer of Leyte from 2 March 1951 to 17 February 1955 and received the salary as such in the total sum of P5,509.63, does not constitute abandonment of his former position. He was ordered to resign from the service with prejudice to reinstatement pursuant to the decision of the Commissioner of Civil Service and by virtue thereof was prevented from exercising the functions of his position and receiving the corresponding compensation therefor. While thus deprived of his office and emoluments thereunto appertaining the petitioner had to find means to support himself and his family. The fact that during the time his appeal was pending and was thus deprived of his office and salary, he sought and found employment in another branch of the government does not constitute abandonment of his former position. To deny him the right to collect his back salaries during such period would be tantamount to punishing him after his exoneration from the charge which caused his dismissal from the service. However, as provided for in section 259 of the Revised Administrative Code, the sum of P5,509.63 received by the petitioner as clerk in the Office of the Provincial Treasurer of Leyte from 2 March 1951 to 17 February 1955 must be deducted from the total amount due him during the period of his illegal suspension.

It appears that the petitioner was deprived of his position and the corresponding compensation therefor since 6 August 1949. There is, however, no sufficient evidence to support his claim that on 17 February 1955 he was being reinstated only as a substitute teacher, hence he declined the offer of reinstatement. Consequently, he should be paid only up to that date when he was offered reinstatement in the service.

According to the Accounting Officer of the Bureau of Public Schools, the salary due the petitioner as teacher from 6 August 1949 to 17 February 1955 at the rate of P140 a month was P9,294.20. Deducting therefrom the sum of P5,509.63 the petitioner is still entitled to receive the sum of P3,784.57.

The decision of the Auditor General under review is reversed. Judgment is hereby rendered declaring the petitioner entitled to receive and the Government bound to pay him the sum of P3,784.57, without pronouncement as to costs.

Paras, C.J., Bengzon, Montemayor, Bautista Angelo, Labrador, Concepción, Reyes, J. B. L., Endencia, Barrera and Gutierrez David, JJ., concur.

Endnotes:

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1. Batungbakal v. National Development Co., 93 Phil., 182; 49 Off. Gaz., 2290, 2299; NARIC v. NARIC Workers Union, 98 Phil., 563; 52 Off. Gaz., 6928; Tabora v. Montelibano, 98 Phil., 800; 52 Off. Gaz., 3058.

1. COLLECTIVE BARGAINING; EMPLOYEES HAVING COMMUNITY OF INTEREST ENTITLED TO SEPARATE COLLECTIVE BARGAINING UNIT. — It appearing that the employees in the administrative, sales, and dispensary departments of the petitioner company, with the exception of the supervisors, security guards, and confidential employees therein, are engaged in an entirely different kind of work which does not involve production and maintenance and the places where they work are separate from those of the workers in the other department of the company, it can be said that they have a community of interest among themselves which justifies their formation or existence as a separate appropriate collective bargaining unit. The existence of such a unit will insure to said employees in the departments aforementioned the full benefit of their right to self-organization and collective bargaining and, thereby, effectuate the policies enunciated in the Industrial Peace Act (Republic Act No. 875, as amended).

2. ID.; ID.; EXTENSION OF BENEFITS UNDER EXISTING COLLECTIVE BARGAINING AGREEMENT TO EMPLOYEES NOT COVERED BY IT, NOT IMPEDIMENT TO FORMATION OF SEPARATE COLLECTIVE BARGAINING UNIT BY SUCH EMPLOYEES. — While it may be true that the benefits granted under the existing collective bargaining agreements entered into between the petitioner Union and the Company were extended to, and enjoyed, by all the workers in all the departments of the company, the fact remains that those in the administrative, sales, and dispensary departments were not expressly covered, and should the company, at any time, decide not to extend to them said benefits, they cannot legally demand their extension to them, as they would have nothing to invoke in support of said demand. In fine, they have no legal right to said benefit enforceable before the courts.

This is a petition for review on certiorari the order of the Court of Industrial Relations (in Case No. 392-MC) dated December 12, 1956, and its resolution en banc of December 27, 1957.

Respondent Alhambra Employees’ Association (PAFLU) filed with the above-mentioned court a petition, which was later amended, praying that it be certified as the sole and exclusive bargaining agent for all the employees, 82 in number, in the administrative, sales, engineering, and dispensary departments of petitioner Alhambra Cigar & Cigarette Manufacturing Company. Petitioner company, later joined by the co-petitioner Kapisanan Ng Manggagawa sa Alhambra (FOITAF), as Intervenor, opposed the petition, on the ground that there was in force an existing collective bargaining agreement covering all the workers of the company, signed by the latter and Intervenor union.

The case was referred to Hearing Examiner Antonio P. Amistad who, on November 19, 1956, submitted his report to the court, which reads as follows:chanrob1es virtual 1aw library

REPORT

"This concerns an amended petition filed by the Alhambra Employees’ Association (PAFLU), a legitimate labor organization, in which it is prayed that said union be certified as the sole and exclusive bargaining agent for all the employees paid either on the monthly, daily or commission basis in the administrative, sales, engineering and dispensary departments of the Alhambra Cigar and Cigarette Manufacturing Company, a business concern existing under and by virtue of the laws of the Philippines, engaged in the manufacture of cigars and cigarettes, with postal address at 31 Tayuman Street, Tondo, Manila.

"The petition is opposed by the Company and another legitimate labor organization, the Federation Obrera de la Industria Tabaquera de Filipinas (FOITAF). The opposition is based principally on two grounds, namely, that the appropriate collective bargaining unit is the employer unit not the smaller unit sought by petitioner and that there is an existing collective bargaining agreement between the company and the FOITAF which constitute a bar to the instant certification proceeding.

"The first issue to be resolved by the Court concerns the composition of the appropriate unit. The petitioner contends that all the employees paid on the monthly, daily or commission basis in the administrative, sales, engineering, and dispensary departments constitute an appropriate unit, while both the company and the FOITAF maintain that the appropriate unit is the employer unit. While the two contending unions as well as the company were agreed that confidential employees should be excluded, they could not agreed on the exclusion or inclusion of the technical employees. The FOITAF’S stand is that technical employees should also be excluded, while the petitioner favors their inclusion. The company on the other hand, manifested that it did not care whether the technical employees are included or not in the bargaining unit.

"The evidence shows that there are eight departments existing in the company, namely, the administrative department, manlalasi or raw leaf department, cigar department, cigarette department, engineering department and garage, precinteria department, dispensary, and sales department.

"In the manlalasi or raw leaf department, the work consists mainly of classifying the tobacco leaves removing the middle ribs from them. The cigar and cigarette departments are engaged in producing cigars and cigarettes while the packing of the finished products is done in the precinteria department. The work in the engineering department and garage is devoted to operation of the machines and the maintenance of the machineries, buildings, garage as well as all the vehicles used by the company. The employees in the sales department are engaged in selling the products of the company and they perform their duties outside the factory premises. The dispensary department consists of one doctor and two nurses. In the administrative department are found the office personnel, watchmen, porters and cleaners.

"Judging from the nature of the work performed in the different departments, the workers in the manlalasi, cigar, cigarette, precinteria and engineering departments may be considered as production and maintenance employees because they are engaged directly in producing the manufactured products of the company and in operating and maintaining its machines, buildings and vehicles.

"On the other hand the employees in the administrative, sales and dispensary departments are engaged in an entirely different kind of work which does not involve production and maintenance and the places where they work are separate from those of the workers in the other departments. It can be said therefore that they have a community of interest among themselves which is entirely separate and distinct from the production and maintenance employees. This paramount consideration has led the undersigned to conclude that all the employees in the administrative, sales and dispensary departments constitute an appropriate collective bargaining unit subject to the exclusions which are discussed hereinbelow. However, petitioner’s contention that the employee in the engineering department ang garage should also be included in said unit is without merit. As pointed out earlier, the workers in said department are maintenance employees and for purposes of collective bargaining it is the better policy to group together production and maintenance employees.

"The second issue which was raised in this case is whether or not the collective bargaining agreement entered into between the company and the FOITAF constitutes a bar to the instant proceeding. Said agreement, marked as Exh.’3-Alhambra’, Exh.’S-Petitioner’, and Exh.’1-Intervenor’, was entered into on Aug. 18, 1954 and it was stipulated that the agreement would be effective until June 30, 1955. The effectivity was extended to June 30, 1957, pursuant to a subsequent agreement entered into on Feb. 24, 1955. (Exh.’3-A Alhambra’, Exh.’T-Petitioner’, and Exh.’2-Intervenor’.)

"After a close examination of the agreement in question, the undersigned notes that in so far as the fixing of the terms and conditions of employment is concerned it did not expressly cover the employees in the administrative, dispensary and sales departments. As a matter of fact, the recognition clause states that the FOITAF was acting ’in representation of all the laborers of the ’ALHAMBRA’ and certainly it can not be said that all the employees in the administrative, dispensary and sales departments are laborers’. Furthermore, almost all the persons referred to with definite particularity in paragraph 6 of the agreement (Exh.’3-Alhambra’.) are those working in the production and maintenance departments. The same observation applies to the two subsequent agreements marked as Exh.’3-A Alhambra’ and Exh.’3-B Alhambra’. It was only in the agreement entered into on June 25, 1956 (Exh.’3-C Alhambra’, Exh.’V- Petitioner’, and Exh.’4-Intervenor’) that employees in the administrative department were specifically covered. The coverage, however, was extended only to the security guards. Under the premises, the undersigned is of the opinion that the interests of the employees in the administrative, dispensary, and sales departments with the exception of the security guards are not adequately protected in the collective bargaining agreement between the company and the FOITAF and said agreement therefore could not be validly invoked as a bar to the instant proceeding.

"The evidence also shows that there are 45 employees in the administrative department, 3 in the dispensary, and 19 in the sales department so that all in all there are 67 employees in said departments. The evidence for the company shows that the watchmen and porters in the administrative department numbering 16 in all are security guards. (See Exh.’3-C Alhambra’). Following established precedents of this Court, these security guards should be excluded from the bargaining unit sought to be represented by the petitioner. In the sales department there are 2 sales supervisors, who should also be excluded pursuant to a specific provision of Rep. Act No. 875. Although it was agreed upon by all the parties that confidential employees should also be excluded, the evidence does not indicate the particular employees whose positions are confidential. Excluding the 16 security guards and 2 sales supervisors, there are 49 employees who are eligible for inclusion in the appropriate unit in this case.

"The evidence also conclusively shows that 23 employees in the administrative department, 2 in the dispensary, and 16 in the sales department or a total of 41 are members of the petitioning union. There is no question therefore that said union has been duly selected or designated as the exclusive representative for collective bargaining purposes by the majority of the employees in an appropriate bargaining unit.

"In view of all the foregoing, it is respectfully recommended that the Alhambra Employees Association (PAFLU) be certified as the exclusive bargaining representative of all the employees in the administrative, dispensary and sales departments of the Alhambra Cigar and Cigarette Manufacturing Company with the exception of supervisors, security guards and confidential employees." (Italics supplied.)

On December 12, 1956, the court, by a vote of three to one, with one abstention, adopted the above-quoted report in toto, in its order which, in part, states:jgc:chanrobles.com.ph

"The foregoing report has been found to be completely in accordance with the evidence and the entire record of the case, and the conclusions therein contained are hereby adopted in toto.

"Wherefore, and as recommended by the Hearing Examiner, the Alhambra Employees’ Association (PAFLU) is hereby certified as the exclusive collective bargaining representative of all the employees in the administrative, dispensary, and sales departments of the Alhambra Cigar and Cigarette Manufacturing Company with the exception of supervisors, security guards and confidential employees. So ordered."cralaw virtua1aw library

Their motions for reconsideration of the foregoing order having been denied, the Company and FOITAF filed the present petition for review.

Petitioners claim that the lower court erred (1) in holding that all the employees in the administrative, sales, and dispensary departments of petitioner company, with the exception of the supervisors, security guards, and confidential employees therein, constitute an appropriate separate collective bargaining unit; (2) in holding that the collective bargaining agreement between petitioner company and petitioner labor union (FOITAF) did not cover said employees; and (3) in including in said independent unit the physician and two nurses composing the dispensary department.

1. In arriving at the conclusion that all the employees in the administrative, sales, and dispensary departments of the company, with the exception of the supervisors, security guards, and confidential employees therein, constitute an appropriate collective bargaining unit, the lower court considered the fact that said employees are engaged in "an entirely different kind of work" which does not involve production and maintenance, and the additional fact that the places where they work are separate from those of the workers in the other departments of the company.

We find no reason to disturb said finding of the lower court. There can hardly be any doubt that, since said employees in the administrative, sales, and dispensary departments perform work which have nothing to do with production and maintenance, unlike those in the raw leaf (manlalasi), cigar, cigarette, packing (precinteria), and engineering and garage departments whose functions involve production and maintenance, they have a community of interest which justifies their formation or existence as a separate appropriate collective bargaining unit. (II Teller, Labor Disputes and Collective Bargaining, 925-931.) 1 The existence of such a unit will, it is believed, insure to said employees in the three departments the full benefit of their right to self-organization and collective bargaining and, thereby, effectuate the policies enunciated in the Industrial Peace Act 2

2. Examination of the collective bargaining agreement entered into between the company and FOITAF on August 18, 1954 (Exh. 3-Alhambra) and the agreements entered subsequent thereto between the same parties dated February 24, 1955 (Exh. 3-A Alhambra) and August 25, 1955 (Exh. 3-B Alhambra) discloses beyond doubt that they expressly cover only the workers in the five departments of the company, namely, the raw leaf (manlalasi), cigar, cigarette, packing (precinteria) and engineering and garage departments. Exhibits 3 Alhambra and 3-A Alhambra are conspicuous for their repeated use of the term "laborers." In no single instance is the term "employees" mentioned to convey the idea that those in the other three departments, namely, the administrative, sales, and dispensary departments, are also covered by said agreements. Exhibit 3-B Alhambra consistently uses the term "Precinteros", referring to the workers in the packing or precinteria department. It is, furthermore, significant to note that the workers who are divided into several categories in Exhibit 3-Alhambra, all belong to the five-mentioned departments of the company, which again unmistakably conveys the impression that said agreement was not intended to cover or apply to those workers or employees in the administrative, sales, and dispensary departments.

We agree with the observation of the lower court that it is only in Exhibit 3-C Alhambra (executed on June 25, 1956) that the employees in the three-mentioned departments were expressly covered. Nevertheless, said coverage was limited or confined only to the security guards in said departments.

While it may be true the benefits granted under said agreements were extended to, and enjoyed by, all the workers in all the eight departments of the company, the fact remains that those in the administrative, sales, and dispensary departments were not expressly covered and, should the company, at any time, decide not to extend to them said benefits, they can not legally demand their extension to them as they would have nothing to invoke in support of said demand. In fine, they have no legal right to said benefits enforceable before the courts.

3. Although the physician and two nurses in the dispensary department perform functions which may properly be designated as technical or professional, the lower court, in our opinion, did not err in including them in the bargaining unit sought to be represented by respondent labor organization, since, as already stated, they are performing functions which have nothing to do with production and maintenance and, consequently, have a community of interest with the employees in the administrative and sales department.

Wherefore, finding no reversible error in the order and resolution of the court a quo appealed from, the same are hereby affirmed in all respects, with costs against the petitioners. So ordered.

Paras, C.J. Bengzon, Montemayor, Bautista Angelo, Labrador, Reyes, J.B.L., Endencia and Gutierrez David, JJ., concur.

Endnotes:

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1. See alo Rothenberg on Labor Relations, 489-490; Democratic Labor Association v. Cebu Stevedoring Company, Et Al., G. R. No. L-10321, prom. February 28, 1958.

2. Rep. Act No. 875, as amended.

1. CITIZENSHIP; ERRORS MADE IN GOOD FAITH BY APPLICANT. — The fact that there was a discrepancy in the surname of the petitioner for naturalization for the reason that his application bore the name of "Ramon L. Ching "whereas when testifying at the hearing he gave his name as "Ramon L. Cheng", and the fact that in one or two of his residence certificates it appeared that he was a Filipino, which matters were satisfactorily explained to have been errors made in good faith, are not sufficient grounds for denying the petition.

The Republic of the Philippines is appealing the decision of the Court of First Instance of Cavite, granting the petition for naturalization of Ramon L. Cheng.

Petitioner Ramon L. Cheng filed his application for naturalization on August 6, 1955, which application was duly published as required by law. Mariano V. Benedicto, Provincial Fiscal and Acting City Attorney, filed a written opposition to the application, alleging that the applicant did not possess all the necessary qualifications required by Commonwealth Act 473, as amended by Act 535; that the applicant had no sincere desire to become a Filipino citizen, his petition being motivated by his desire for economic convenience, and that during his stay in the country, he had not mingled socially with Filipinos or evinced his sincere desire to learn the ideals and embrace the customs and traditions of Filipinos. At the hearing, the applicant presented oral and documentary evidence. The Government also presented evidence in support of its opposition. Thereafter, the trial court rendered a decision dated March 29, 1957, which is now on appeal.

We have examined the record of the case and we are satisfied that the findings of the trial court are amply supported by the evidence. We quote with favor pertinent portions of said decision:red:chanrobles.com.ph

"Attached to the petition is the joint affidavit of witnesses Ex-Governor Ramon Samonte and Mr. Jose Auditor, both of the City of Cavite.

"From the documentary and oral evidence presented by the petitioner, it has been established that he was born in Cavite City on September 14, 1934 of Chinese parentage; that he is single and more than 21 years of age at the time of the hearing of this petition; that by reason of his birth he was issued a native born certificate of residence and has registered himself as an alien with the Bureau of Immigration; that he received his primary and secondary education in private schools recognized by the Government and not limited to any race or nationality. Thus, petitioner is exempted from the requirement of the law to make a declaration of intention, it was also established that he has never left the Philippines.

"Also, from the oral and documentary evidence adduced, it was satisfactorily shown that petitioner is an assistant manager in the Central Grocery receiving a monthly salary of P250.00, which satisfies the legal requirement that petitioner must have a lucrative trade, profession or lawful occupation.

"Regarding the moral character of the petitioner, we have before us his uncontroverted testimony and that of the two witnesses presented by him, namely, ex-Governor Ramon Samonte and Mr. Jose Auditor.

"Mr. Ramon Samonte, testified that he stood as the sponsor at the baptism of the petitioner and has known him since then; that he knows the petitioner to be a person of good repute and morally irreproachable, attached the principles underlying the Philippine Constitution and well disposed to good order and happiness in the Philippines; that in his opinion, petitioner has all the qualifications necessary to become a citizen of the Philippines; that he ratifies the contents of the Affidavit of Witnesses.

"Jose Auditor, Ex-Councilor of Cavite City, testified that he knows petitioner since birth; that because they were neighbors the knows petitioner to be continuously residing at Cavite City; that petitioner is a person of good repute and morally irreproachable a believer in the principles underlying the Philippine Constitution and in his opinion, petitioner is fit to become a Filipino citizen.

"From the evidence adduced by the petitioner, it was also established unrebutted that the petitioner has conducted himself in a proper and irreproachable manner in his relation with the constituted government as well as with the community in which he lives.

"This Court is satisfactorily convinced of petitioner’s ability to speak and write English and Tagalog languages, he having received elementary and secondary education in the XIII Martires College and in the St. Joseph’s College. It further appears that he is well informed of the Philippine social life; has mingled socially with the Filipinos; that he has evinced a sincere desire to learn and embrace the customs, traditions and ideals of the Filipinos. In fact, petitioner testified that he does not know Chinese customs because he was born here, grew up here and has come to imbibe the Filipino way of life.

"Petitioner testified that he is not opposed to organized government nor is he affiliated with any association or group of persons who uphold and teach doctrines antagonistic to organized government; that he does not believe in the necessity of violence for the predominance of one’s ideas. Petitioner is single and does not believe in the practice of polygamy. He has not been convicted of any crime involving moral turpitude. He is not suffering from mental alienation or incurable contagious diseases. Petitioner testified that he is a follower of Nationalist China, which is not at war with the Philippines. This Court takes judicial notice that the laws of Nationalist China permit Filipinos to be naturalized in the country (Yee Ho Mann v. Republic of the Philippines 83 Phil., 749; 46 Off. Gaz. [11] 201)."cralaw virtua1aw library

The Government in its appeal raises several points which in our opinion, are either of minor importance or are not supported by the evidence. For instance, it claims that there is a discrepancy in the surname of petitioner, for the reason that his application bore the name of "Ramon L. Ching" whereas when testifying at the hearing, applicant gave his name as "Ramon L. Cheng." It was explained, however, that the discrepancy was an error committed in good faith because the applicant had been indiscriminately called Ching and Cheng by his friends, and for this reason, during the hearing, he moved for the correction of the spelling of his surname, which was granted by the trial court in an order directing that the name be credited from Ching to Cheng. This was done without any opposition on the part of the Government.

The Government also doubts that the applicant was earning P250.00 a month at the Central Grocery and that he was the manager or assistant manager of said grocery. It is a fact, however, that the very witness for the Government, Atty. Amable Ibañez, labor attorney in the Bureau of Labor, assigned to Cavite City, who has occasion to investigate the applicant and his business and verify his report on the employees of the Central Grocery and their wages, found that the applicant was really the assistant manager of said grocery, sometimes acting as manager in the absence of the real manager, and that he was earning a salary of P250.00 a month.

Then the Government claims that in one or two of applicant’s residence certificates, he made it appear that he was a Filipino, which was not true. This point was adequately discussed and passed upon by the trial court, as shown by the portion of its decision which we reproduce below:jgc:chanrobles.com.ph

"The City Fiscal likewise maintains that petitioner caused it to appear in his 1955 residence certificate, Exhibit ’4’, that he is a ’Filipino’ when in fact he is a Chinese national. He argues that by this act of the petitioner, the Filipino people would be misled as to his true citizenship. According to the petitioner, he gave his 1954 Residence Certificate to the issuing clerk who just merely copied its contents in the certificate in question. He further explained that because he was in a hurry he was not able to read the entries therein and consequently, did not notice the word ’Filipino’ written in said certificate. The Court does not view with sympathetic regard the argument of the City Fiscal that with this act of the petitioner, the Filipino people would be misled thereby. That fear or apprehension of the Fiscal is merely in the realm of surmise or conjecture because he did not adduce any evidence which would shoe or attempt to show that any Filipino was misled, or that some damage was caused due to this alleged act of petitioner. On the contrary, to show that it was error on the part of the issuing clerk and could not have been done by him, petitioner called the attention of the former that his citizenship is Chinese and not Filipino as stated in Exhibit ’4’ when he got his 1956 and 1957 residence certificates, Exhibit ’Y’. In fact, it appears in his 1953 residence certificate, Exhibit ’X’, that he is a Chinese and as testified to by him, the same is true with his 1954 residence certificates."cralaw virtua1aw library

We deem it unnecessary to discuss the other points raised in the Government’s appeal. We are satisfied and agree with the trial court that the applicant has more than satisfied the requirements of the law for naturalization, and that he is entitled to become a Filipino citizen. Said the trial court in the latter part of its decision:jgc:chanrobles.com.ph

"The Court had occasion to observe petitioner in the courtroom and from his aspect and demeanor in the witness stand, the way he spoke and dressed, coupled with the manner he behaved, among the crowd or spectors inside the courtroom before and after the hearings, this Court is fully persuaded that he has evinced a sincere desire not only to learn and like Filipino customs, habits, traditions and way of life by he has also already embraced them and acts as if he is already a Filipino."cralaw virtua1aw library

In view of the foregoing, the appealed decision is hereby affirmed. No costs.

Paras, C.J., Bengzon, Padilla, Bautista, Angelo, Labrador, Concepción, Reyes, J. B .L., Endencia, Barrera and Gutiérrez David, JJ., concur.

1. LEGAL SEPARATION; CONFESSION OF JUDGMENT; EXISTENCE OF EVIDENCE OF ADULTERY INDEPENDENTLY OF CONFESSION. — Where there is evidence of the adultery independently of the defendant’s statement agreeing to the legal separation, the decree of separation should be granted, since it would not be based on the confession but upon the evidence presented by the plaintiff. What the law prohibits is a judgment based exclusively on defendant’s confession.

2. ID.; ID.; ADMISSIBILITY OF CONFESSION MADE OUTSIDE OF COURT. — Article 101 of the new Civil Code does not exclude, as evidence, any admission or confession made by the defendant outside of the court.

3. ID.; ID.; COLLUSION MAY NOT BE INFERRED FROM CONFESSION. — Collusion may not be inferred from the mere fact that the guilty party confesses to the offense of adultery, desires the divorce and makes no defense.

4. ID.; CONDONATION; FAILURE OF HUSBAND TO SEARCH FOR ERRING WIFE. — In the case at bar, the wife left her husband after the latter discovered her dates with other men. Held: The failure of the husband actively to search for his wife and take her home does not constitute condonation or consent to the adultery. It was not his duty to search for her.

Action for legal separation by Jose de Ocampo against his wife Serafina, on the ground of adultery. The court of first instance of Nueva Ecija dismissed it. The Court of Appeals affirmed, holding there was confession of judgment, plus condonation or consent to the adultery and prescription.

We granted certiorari to consider the application of articles 100 and 101 of the New Civil Code, which for convenience are quoted herewith:jgc:chanrobles.com.ph

"ART. 100. — The legal separation may be claimed only by the innocent spouse, provided there has been no condonation of or consent to the adultery or concubinage. Where both spouses are offenders, a legal separation cannot be claimed by either of them. Collusion between the parties to obtain legal separation shall cause the dismissal of the petition."cralaw virtua1aw library

"ART. 101. — No decree of legal separation shall be promulgated upon a stipulation of facts or by confession of judgment.

In case of non-appearance of the defendant, the court shall order the prosecuting attorney to inquire whether or not a collusion between the parties exists. If there is no collusion, the prosecuting attorney shall intervene for the State in order to take care that the evidence for the plaintiff is not fabricated."cralaw virtua1aw library

The record shows that on July 5, 1955, the complaint for legal separation was filed. As amended, it described their marriage performed in 1938, and the commission of adultery by Serafina, in March 1951 with Jose Arcalas, and in June 1955 with Nelson Orzame.

Because the defendant made no answer, the court defaulted her, and pursuant to Art. 101 above, directed the provincial fiscal to investigate whether or not collusion existed between the parties. The fiscal examined the defendant under oath, and then reported to the Court that there was no collusion. The plaintiff presented his evidence consisting of the testimony of Vicente Medina, Ernesto de Ocampo, Cesar Enriquez, Mateo Damo, Jose de Ocampo and Capt. Serafin Gubat.

According to the Court of Appeals, the evidence thus presented shows that "plaintiff and defendant were married in April 5, 1938 by a religious ceremony in Guimba, Nueva Ecija, and had lived thereafter as husband and wife. They begot several children who are now living with plaintiff. In March, 1951, plaintiff discovered on several occasions that his wife was betraying his trust by maintaining illicit relations with one Jose Arcalas. Having found the defendant carrying marital relations with another man plaintiff sent her to Manila in June 1951 to study beauty culture, where she stayed for one year. Again, plaintiff discovered that while in the said city defendant was going out with several other men, aside from Jose Arcalas. Towards the end of June, 1952, when defendant had finished studying her course, she left plaintiff and since then they had lived separately.

"On June 18, 1955, plaintiff surprised his wife in the act of having illicit relations with another man by the name of Nelson Orzame. Plaintiff signified his intention of filing a petition for legal separation, to which defendant manifested her conformity provided she is not charged with adultery in a criminal action. Accordingly, plaintiff filed on July 5, 1955, a petition for legal separation."cralaw virtua1aw library

The Court of Appeals held that the husband’s right to legal separation on account of the defendant’s adultery with Jose Arcalas had prescribed, because his action was got filed within one year from March 1951 when plaintiff discovered her infidelity. (Art. 102, New Civil Code) We must agree with the Court of Appeals on this point 1

As to the adultery with Nelson Orzame, the appellate court found that in the night of June 18, 1955, the husband upon discovering the illicit connection, expressed his wish to file a petition for legal separation and defendant readily agreed to such filing. And when she was questioned by the Fiscal upon orders of the court, she reiterated her conformity to the legal separation even as she admitted having had sexual relations with Nelson Orzame. Interpreting these facts virtually to mean a confession of judgment the Appellate Court declared that under Art. 101, legal separation could not be decreed.

As we understand the article, it does not exclude, as evidence, any admission or confession made by the defendant outside of the court. It merely prohibits a decree of separation upon a confession of judgment. Confession of judgment usually happens when the defendant appears in court and confesses the right of plaintiff to judgment or files a pleading expressly agreeing to the plaintiff’s demand. 2 This did not occur.

Yet, even supposing that the above statement of defendant constituted practically a confession of judgment, inasmuch as there is evidence of the adultery independently of such statement, the decree may and should be granted, since it would not be based on her confession, but upon evidence presented by the plaintiff. What the law prohibits is a judgment based exclusively or mainly on defendant’s confession. If a confession defeats the action ipso facto, any defendant who opposes the separation will immediately confess judgment, purposely to prevent it.

The mere circumstance that defendant told the Fiscal that she "liked also" to be legally separated from her husband, is no obstacle to the successful prosecution of the action. When she refused to answer the complaint, she indicated her willingness to be separated. Yet, the law does not order the dismissal. Allowing the proceeding to continue, it takes precautions against collusion, which implies more than consent or lack of opposition to the agreement.

Needless to say, when the court is informed that defendant equally desires the separation and admitted the commission of the offense, it should be doubly careful lest a collusion exists. (The Court of Appeals did not find collusion.)

Collusion in divorce or legal separation means the agreement.

". . . between husband and wife for one of them to commit, or to appear to commit, or to be represented in court as having committed, a matrimonial offense, or to suppress evidence of a valid defense, for the purpose of enabling the other to obtain a divorce. This agreement, if not express, may be implied from the acts of the parties. It is a ground for denying the divorce." (Griffiths v. Griffiths, 69 N. J. Eq. 689 60 Atl. 1099; Sandoz v. Sandoz, 107 Ore. 282, 214 Pas. 590.)

In this case, there would be collusion if the parties had arranged to make it appear that a matrimonial offense had been committed although it was not, or if the parties had connived to bring about a legal separation even in the absence of grounds therefor.

Here, the offense of adultery had really taken place, according to the evidence. The defendant could not have falsely told the adulterous acts to the Fiscal, because her story might send her to jail the moment her husband requests the Fiscal to prosecute. She could not have practiced deception at such a personal risk.

In this connection, it has been held that collusion may not be inferred from the mere fact that the guilty party confesses to the offense and thus enables the other party to procure evidence necessary to prove it. (Williams v. Williams, [N. Y. ] 40 N. E. (2d) 1017; Rosenweig v. Rosenweig, 246 N. Y. Suppl. 231; Conyers, v. Conyers, 224 S. W. [2d] 688.)

And proof that the defendant desires the divorce and makes no defense, is not by itself collusion. (Pohlman v. Pohlman, [N. J. ] 46 Atl. Rep. 658.)

We do not think plaintiff’s failure actively to search for defendant and take her home (after the latter had left him in 1952) constituted condonation or consent to her adulterous relations with Orzame. It will be remembered that she "left" him after having sinned with Arcalas and after he had discovered her dates with other men. Consequently, it was not his duty to search for her to bring her home. Hers was the obligation to return. Two decisions 3 are cited wherein from apparently similar circumstances, this Court inferred the husband’s consent to or condonation of his wife’s misconduct. However, upon careful examination, a vital difference will be found: in both instances, the husband had abandoned his wife; here it was the wife who "left" her husband.

Wherefore, finding no obstacles to the aggrieved husband’s petition we hereby reverse the appealed decision and decree a legal separation between these spouses, with all the consequent effects. Costs of all instances against Serafina Florenciano. So ordered.

Paras, C.J., Padilla, Montemayor, Labrador, Concepción, Reyes, J. B. L., Endencia, Barrera and Gutiérrez David, JJ., concur.

Endnotes:

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1. Brown v. Yambao, 102 Phil., 168.

2. Cf. Phil. National Bank v. Ingersoll, 43 Phil., 444, See generally Corpus Juris Secundum "Judgments" sec. 134.

3. People v. Sensano, 58 Phil., 73; People v. Guinucud, 58 Phil., 621.

1. PLEADINGS; ARGUMENT OF COUNSEL, PART OF PLEADING. — The argument of counsel in a pleading is a part thereof; and if the pleading is included in the record on appeal — because it is material — the argument may not be suppressed.

2. ID.; RECORD ON APPEAL; INCLUSION OF PLEADINGS DISCRETIONARY ON TRIAL JUDGE. — The inclusion of pleadings in the record on appeal is addressed to the sound discretion of the trial judge.

3. ID.; ID.; OBJECTION TO INCLUSION OF PLEADINGS DUE TO ADDITIONAL EXPENSE IN PRINTING. — The appellant may not object to the inclusion of the pleadings in the record on appeal on the ground that it will entail additional expense in the printing thereof, since appellant is entitled to recover such expense from the appellee as part of the costs if he wins the appeal.

4. ID.; ID.; APPELLEE MUST BE FURNISHED WITH A CORRECT COPY OF RECORD ON APPEAL. — It is the duty of the appellant to furnish the appellee with a correct copy of the record on appeal, complete and accurate.

Petition to compel the respondent judge to approve the record on appeal in Civil Case No. 3921 of his Iloilo Court.

It appears that having lost that case, herein petitioners, as defendants, took steps to elevate it to a higher court by presenting on time their notice of appeal, appeal bond and record on appeal. But upon objection of the plaintiff, the respondent judge required defendants to amend their record by correcting certain errors and by inserting,.

(a) the motion to dismiss counterclaim;

(b) the answer to such motion;

(c) the application for appointment of receiver;

(d) the opposition to such appointment;

(e) the reply to opposition; and

(f) the order of the court on the matter.

Objecting to such requirements, defendants filed this petition after their motion to reconsider had been denied.

I. There is no question as to the materiality of the two pleadings on the counterclaim. As a matter of fact, the record on appeal tendered to the court stated that such pleadings had been filed, and then copied the first parts thereof. As to (a) it said that such motion to dismiss had been filed "on the ground that the court has no jurisdiction over the subject matter of the counterclaim" ; and as to (b) that "the defendants maintained that this Court has the jurisdiction to entertain the subject matter of the counterclaim alleged in the answer." The record on appeal omitted the subsequent parts of the two pleadings wherein the attorneys explained the reasons in support of the motion and of the answer, respectively.

Petitioners here maintain it was unnecessary to include such portions of the pleadings because they merely contained the "argument" of counsel, and this Court has ruled in Aliño v. Villamor (2 Phil., 234) that the argument of counsel need not be reproduced in the bill of exceptions — now record on appeal. We find their position to be untenable, because our aforesaid ruling referred to oral argument during the trial — which is not the case here. The argument of counsel in a pleading, is a part thereof, and if the pleading is included in a record on appeal, — because it is material — the argument may not be suppressed. In the case now before us, the appellate court would not understand why counsel on one side disputed the court’s jurisdiction, even as the other side sustained it.

II. During the trial of the case, the plaintiff asked for receivership in a written petition, defendants opposed it and the court after considering the matter, refused to appoint a receiver. Refusing to include the pleadings on the matter, petitioners claim they are immaterial, and object to the court’s order for their inclusion. Plaintiff-appellee Hodges replies that appellants may consider the papers immaterial for their purposes on appeal, but "as appellee, I have the right to raise other points than those raised by appellants, and those papers may contain matter in support of my position and in support of the appealed decision." At this stage of the action, Hodge’s contention cannot be tested, and as the lower court decided in his favor, we are not in a position to impute or find any abuse of discretion, having in mind our pronouncements recommending liberality in the inclusion of pleadings in the record on appeal, and expressing prima facie reliance on the discretion of the trial judge. 1 Of course, appellee’s insistence entails additional expense for the appellants in the printing of their record on appeal; however, they have no legitimate ground to object on that score, since they are entitled to recover such expenses from appellee as part of the costs, 2 if, as they expect, they win their appeal.

III. As to the clerical errors and/or omissions, the appellants assert that they were merely in the copy furnished to the appellee; that the original filed in court was entirely correct; and that appellee should or could correct the said errors or omissions in his copy. On this aspect of the case and speaking in general, we must say that it is the duty of the appellant to furnish the appellee with a correct copy of the record on appeal, complete and accurate. Once we permit service of a copy where a line or a date is omitted — leaving it to the appellee to fill in the blanks — there is nothing to prevent appellants in other cases from furnishing appellees with copies omitting material portions of the pleadings. 3

IV. This petition may not, therefore, be granted. If they wish to go ahead with their appeal, petitioners must comply with the order requiring amendment of their record on appeal. Fortunately for them, the judge has not fixed a period for compliance. They may still do so within ten days after this decision becomes final.

Petition dismissed, with costs. The preliminary injunction heretofore issued is dissolved. So ordered.

Paras, C.J., Padilla, Montemayor, Bautista Angelo, Labrador, Concepción, Reyes, J. B. L., Endencia, Barrera and Gutiérrez David, JJ., concur.

Endnotes:

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1. Smith Bell & Co. v. Sta. Maria, 49 Phil., 820; Pratts & Co. v. Phoenix Ins. Co., 52 Phil., 807; Jai Alai v. Court of First Instance, 96 Phil., 407; 51 Off. Gaz., 710.

2. Sec. 11(b) Rule 131.

3. Needless to add, the court may use its discretion as to minor mistakes, to discourage cavil or pettifoggery.

1. EVIDENCE; ALIBI; MUST BE CLEARLY ESTABLISHED. — In order to prosper, alibi, must be clearly established and must not leave any room for doubting its accuracy, plausibility and verity.

2. ID.; ID.; POSITIVE IDENTIFICATION OF ACCUSED. — An alibi cannot prevail over an identification of the accused which is substantially clear and satisfactory (People v. Aguipo, L-12123-34, July 31, 1958; People v. Moises y Fernando, Et Al., L-10876, September 23, 1958; People v. Dara-ug, L-11470, September 30, 1957).

3. ID.; ID.; PROOF OF MOTIVE; WHEN IT IS NOT INDISPENSABLE. — Proof of motive is not indispensable where guilt is otherwise established by efficient evidence. In other words, motive need not be established if the identity of the accused is otherwise shown beyond reasonable doubt (People v. Sespene, 102 Phil., 199; People v. Divinagracia, 105 Phil., 281; People v. Arcillas, L-11792, June 30, 1959; People v. Bugagao, L-11328, April 16, 1958).

4. CRIMINAL LAW; QUALIFYING CIRCUMSTANCES; EVIDENT PREMEDITATION; QUESTION OF TIME ESSENTIAL. — Evident premeditation cannot be considered to qualify murder where it is not shown when the plan to kill was hatched, or what time elapsed before it was carried out. There is, therefore, no basis for determining whether the accused had sufficient time between the inception of the plan and its fulfillment to dispassionately consider and accept its consequences; and this time is essential to premeditation (People v. Custodio, 97 Phil., 698.)

5. ID.; ID.; TREACHERY; SUDDEN AND UNEXPECTED ATTACK. — The killing is qualified by treachery where the attack was sudden and unexpected because the deceased had his back turned when he was first struck on the back of the head at the inception of the aggression, catching him totally unprepared to make a defense of his persons. Under such circumstances, defendants-appellants employed means, methods or forms in the execution of the crime which tended directly and specially to insure its execution without risk to themselves (People v. Felipe, L- 4619, February 25, 1952; People v. Cagoco, 58 Phil., 524).

This is an appeal from a decision of the Court of First Instance of Pangasinan convicting defendants-appellants Olimpio Corpuz and Julian Serquiña of murder and sentencing each of them to the penalty of reclusión perpetua; to jointly and severally indemnify the heirs of the deceased, Juan Tobias, in the sum of P4,000.00 and to pay proportionally the costs.

A review of the records discloses the following facts:chanrob1es virtual 1aw library

On the night of May 12, 1953, at around 9 o’clock in barrio San Leon, Balungao, Pangasinan, the occupants of the house of Juan Tobias were roused by the barking of dogs. Peeping from the side of the house, Francisco Bartolome, a nine-year old boy, and Pedro Quibolen, who helped Tobias work his lands, saw and recognized Julian Serquiña, and a little farther off, the other accused, Olimpio Corpuz, revealed by the light of a petroleum lamp hung outside the door. Juan Tobias invited defendants-appellants to come up, but instead, Julian Serquiña told him to come down and asked him to lead them to Esmeralda, "even up to the stream only" ; and when his request was refused, Julian Serquiña ordered Tobias to go ahead of him. When Tobias was already on the ground with his back turned to defendants-appellants, both of them struck Tobias several times with Exhibit "B", a shovel, and Exhibit "C", a handle of a plow, felling him. While running away, witnesses for the prosecution Pedro Quibolen and Francisco Bartolome still heard the deceased being struck repeatedly by defendants-appellants.

From the place of the killing, Pedro Quibolen and Francisco Bartolome ran to the house of Francisco Tobias, brother of the deceased, to call for help, but the latter, seized with fear, would not go to the scene of the crime but instead reported the killing first, to the Philippine Constabulary barracks nearby, and, in the early morning of May 13, 1953, to the municipal authorities who, after an investigation conducted at the scene of the crime, arrested both accused and brought them to the Municipal Building at about 11:00 a.m. The deceased Juan Tobias suffered multiple wounds, particularly described in Exhibit "A", the medical certificate prepared by Dr. Triumfo Magpali, Municipal Health Officer.

Defendants-appellants claim that they never left their respective houses on the night of May 12, 1953, and that, as a matter of fact, they went to sleep at about 7 o’clock that evening. This is sought to be corroborated for Olimpio Corpuz by the testimonies of Juan Corpus and Teofilo Ancheta, son and son-in-law, respectively, of Olimpio; and for Julian Serquiña, by the testimony of her sister, Felipa Serquiña, who claims that her brother never left their house on the night in question. This defense of alibi cannot be given much credence. By a long line of decisions, it has been held that, in order to prosper, alibi must be clearly established and must not leave any room for doubting its accuracy, plausibility and verity. Clearly, the alibi offered herein does not meet this test, for the only persons seeking to confirm the assertion of the accused that they never left their houses that night are very close relatives who would naturally testify in their favor. 1

Moreover, defendants-appellants were living only a short distance away from the house of the deceased Juan Tobias. As admitted by Olimpio Corpuz, his house was just around one kilometer from the house of Juan Tobias. For his part, Julian Serquiña estimated that he was residing about 1-1/2 kilometers from barrio San Leon where the killing took place. Due to their proximity to the place of the deceased, it could not have been impossible for the accused to go to the house of Juan Tobias and return to their houses at a later hour of the evening. As has been previously held, for an alibi to be given credence, it must clearly appear that it was physically impossible for the accused to be at the place of the crime at the time it occurred. 2

Another factor weighing heavily against the defense of alibi put up by defendants-appellants is the fact that they have been clearly identified by the witness Pedro Quibolen and also by Francisco Bartolome. While the latter testified that the companion of Julian Serquiña that night was merely "very similar to Olimpio Corpuz", the testimony of Pedro Quibolen definitely identifying Olimpio Corpuz makes the evidence sufficient to establish also the latter’s identity, considering among other things that the witness was familiar with his features, having known him for years. An alibi cannot prevail over an identification of the accused which is substantially clear and satisfactory. 3

Indeed, there is no reason why the testimony of the witness Pedro Quibolen and Francisco Bartolome should not be believed, for, as admitted by both accused, there is no motive for these witnesses to testify falsely against them. This lack of a motive to make a false imputation against the accused further strengthens the credibility of the eyewitnesses and is one more factor that discredits the alibi relied on by the accused. 4 The record shows that the two accused were promptly arrested in the morning of May 13, 1953, and it can hardly be believed that between the killing done late in the previous night and the next morning, Pedro Quibolen and Francisco Bartolome, without any motive, could have connived to implicate innocent persons in a charge as serious as the one at bar. The early revelation of the identity of the killers which led to their prompt arrest bespeaks of a spontaneity of reaction not dictated by ulterior considerations.

The defense further alleges that there was no motive on the part of defendants-appellants sufficient to have induced them to commit the crime charged. It does appear of record, however, that the manager of the hacienda wherein the deceased and the accused Serquiña were tenants, proposed that both should exchange lots, but the plan fell through because of the objections of the late Tobias. Anyway, as repeatedly held, proof of motive is not indispensable where guilt is otherwise established by sufficient evidence. In other words, motive need not be established if the identity of the accused is otherwise shown beyond reasonable doubt. 5

The lower court found that the murder was qualified by evident premeditation. This is not borne out by the evidence in this case, because it is not shown when the plan to kill Juan Tobias was hatched, or what time elapsed before it was carried out. There is no basis for determining whether defendants-appellants had sufficient time between the inception of the plan and its fulfillment, dispassionately to consider and accept its consequences; and this time is essential to premeditation. 6

However, the record shows that the killing was qualified by treachery, for, aside from the fact that the attack was sudden and unexpected, the deceased Juan Tobias had his back turned when he was first struck on the back of the head at the inception of the aggression, catching him totally unprepared to make a defense of his person. Under such circumstances, defendants-appellants employed means, methods or forms in the execution of the crime which tended directly and specially to insure its execution without risk to themselves. 7

Although the crime was committed at nighttime, nocturnity is absorbed by treachery. 8

There is no evidence that the crime was committed in an uninhabited place because for this factor to be appreciated, it must be proven that there were no houses nearby; 9 but this was not done in this case.

There is no showing that the crime was committed in the dwelling of the deceased, it not appearing that the latter was attacked or killed in any part of the house or its dependencies.

Wherefore, with the modification that the killing is qualified by treachery instead of premeditation, the judgment of the lower court is affirmed, with costs against defendants-appellants.

Paras, C.J., Bengzon, Montemayor, Bautista Angelo, Labrador, Concepción, Endencia, Barrera and Gutiérrez, David, JJ., concur.

Endnotes:

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1. People v. Masilungan, 104 Phil., 621; 56 Off. Gaz. (7) 1406; People v. Villaroya, 101 Phil., 1061; People v. de la Cruz, 76 Phil., 601; 43 Off. Gaz., 137; People v. Badilla, 43 Phil., 718.

2. People v. Saladino, No. L-11893, Prom. May 23, 1958; People v. Divinagracia, 105 Phil., 281; People v. Andam, L-11383, April 30, 1958.

3. People v. Aguipo, L-12123-34, July 31, 1958; People v. Moises Fernando, Et Al., L-10876, September 23, 1958; People v. Dara-ug, L-11470, September 30, 1957.

4. People v. Garciola, 90 Phil., 285; People v. Baltazar, L-5850, January 4, 1956.

5. People v. Sespene, 102 Phil., 199; People v. Divinagracia, 105 Phil., 281; People v. Arcillas, L-11792, June 30, 1959; People v. Bugagao, L-11328, April 16, 1958.

6. People v. Custodio, Et Al., 97 Phil., 698; 52 Off. Gaz., (4) 1999 and cases cited therein.

7. People v. Felipe, L-4619, February 25, 1952; People v. Cagoco, 58 Phil., 524; People v. Ambis, 68 Phil., 635.

8. People v. Jimenez, 99 Phil., 285; 54 Off. Gaz., (5) 1361; People v. Balines, Et Al., L-9045, September 28, 1956.

9. People v. Piring, 35 Off. Gaz., (13) 2272.

1. HABEAS CORPUS; PERSONS IN CUSTODY PURSUANT TO FINAL JUDGMENT; ISSUANCE OF WRIT ONLY FOR WANT OF JURISDICTION OF COURT. — With reference to persons in custody pursuant to a final judgment, the rule is that the writ of habeas corpus can issue only for want of jurisdiction of the sentencing court, and can not function as a writ of error. Hence, the writ will not lie to correct mere mistakes of fact or of law which do not nullify the proceedings taken by a court in the exercise of its functions, if the court has jurisdiction over the crime and over the person of the defendant (Talabon v. Prov. Warden, 78 Phil., 599; Perkins v. Director of Prisons, 58 Phil. 271; Pagunatalan v. Director of Prisons, 57 Phil., 140; Trono Felipe v. Director of Prisons, 24 Phil., 121; U.S. v. Jayme 24 Phil., 90; McMicking v. Schields, 238 U.S. 99; 41 Phil., 971).

2. ID.; EXCESSIVE SENTENCE OR PENALTY IMPOSES BY FINAL JUDGMENT; WHEN WRIT MAY ISSUE. — While the Supreme Court has ruled that an excessive sentence or penalty imposed by final judgment may be corrected by habeas corpus, the cases where such ruling was applied involved penalties that could not be imposed under any circumstances for the crime for which the prisoner was convicted.

3. JUDICIAL DOCTRINES; PROSPECTIVE OPERATION. — The rule is that judicial doctrines have only prospective operation and do not apply to cases previously decided (People v. Pinuila, 103 Phil., 992; 55 Off. Gaz., [23] 4228).

4. CRIMINAL LAW; COMPLEX CRIMES; APPRECIATION OF FACTS AND LAW BY COURTS. — In providing for complex crimes, the Revised Penal Code did not set up a category of crimes, independent of the component ones, but only for an aggravated form thereof. This rule was impelled by the desire to impose only one penalty for all offenses resulting from one and the same criminal impulse. Whether or not the offenses are so related as to constitute one single punishable violation evidently depends upon the Court’s appreciation of the facts of the case and the applicable law, and not upon its jurisdiction, where it is not contested that the various component crimes were within the Court’s power to try and adjudicate.

5. APPEAL AND ERROR; ERROR OF COURTS IN THE ESTIMATE OF FACTS AND CONCLUSIONS OF LAW; JURISDICTION NOT AFFECTED; REMEDY IS APPEAL. — The error of the sentencing court in the estimate of the facts and its conclusions as to the governing law does not render it powerless to act upon the premises or deprive it of authority to impose the penalty that in its view of the case is appropriate. To take that view is not such capricious and whimsical exercise of judgment or grave abuse of discretion as would amount to lack or excess of jurisdiction. The error is correctible only by seasonable appeal and not by an attack on the sentencing court’s jurisdiction.

Appeal by the state from a decision of the Court of First Instance of Rizal in habeas corpus proceedings instituted by William Pomeroy and his wife Celia Mariano, directing that both prisoners be released from custody.

On June 7, 1952, William Pomeroy and Celia Mariano were charged in the Court of First Instance of Manila (Criminal Case No. 19166) with the complex crime of rebellion with murder, arson and robbery committed in pursuance of the rebellion. Arraigned on June 18, 1952, the accused entered a plea of guilty, whereupon the court found them guilty as charged and sentenced both to reclusión perpetua. On the same day, both prisoners entered prison and began serving their sentence.

On August 18, 1958, the spouses filed petitions for writs of habeas corpus, invoking the decisions of this Court in People v. Hernandez, 99 Phil., 515; 52 Off. Gaz., (12) 5506; People v. Gerónimo, 100 Phil., 90; 53 Off. Gaz., (1) 68; and People v. Togonon, 101 Phil., 804; 54 Off. Gaz., (36) 8237, wherein this Court declared that acts of violence committed in pursuance of rebellion did not give rise to a complex crime, but only to simple rebellion punishable under Article 134 and 135 of the Revised Penal Code with prisión mayor and a fine of not more than 20,000 pesos. They averred that according to the decisions cited, the Court of First Instance of Manila had no power to sentence them to reclusión perpetua; that in view of their plea of guilty, they could, at most, be sentenced to prisión mayor in its minimum degree; that in so far as it exceeded said penalty, the sentence imposed upon them is void; that they had served the minimum of prisión mayor, after the deductions for good conduct provided by law; and prayed for their release.

Notwithstanding the vigorous objection of the Solicitor General, in representation of the Director of Prisons, the Court of First Instance of Rizal, by decision of August 27, 1958, found that the petitioning prisoners had served 6 years, 2 months and 9 days to date; that crediting them with the corresponding good conduct time allowance and one-half of the preventive imprisonment, starting from their arrest on April 1, 1952 until the day the two began to serve sentence on June 17, 1952,

"the Court is of the opinion that petitioners have already served more than the full period of imprisonment which could be lawfully imposed upon them and therefore are entitled to be released.

WHEREFORE, the Court hereby orders the release of the petitioners unless there exist any other legal and valid cause for their further detention. Without costs."cralaw virtua1aw library

From that decision the State attorneys resorted to this Court assigning the following errors:chanrob1es virtual 1aw library

1. The court a quo erred in not holding itself without jurisdiction to entertain the petition for habeas corpus.

2. The court a quo erred in holding that habeas corpus is a proper remedy in this case.

3. The court a quo erred in finding that the petitioners- appellees have already served their lawful sentence.

4. The court a quo erred in granting the writ of habeas corpus and ordering the release of the appellees.

Upon appellant’s petition, we issued a preliminary injunction.

With reference to persons in custody pursuant to a final judgment, the rule is that the writ of habeas corpus can issue only for want of jurisdiction of the sentencing court, and can not function as a writ of error. Hence, the writ will not lie to correct mere mistakes of fact or of law which do not nullify the proceedings taken by a court in the exercise of its functions, if the court has jurisdiction over the crime and over the person of the defendant (Talabon v. Prov. Warden, 78 Phil., 599; Perkins v. Director of Prisons, 58 Phil., 271; Paguntalan v. Director of Prisons, 57 Phil., 140; Trono Felipe v. Director of Prisons, 24 Phil., 121; U.S. v. Jayme, 24 Phil., 90; McMicking v. Schields, 238 U. S. 99; 41 Phil., 971).

In the case at bar, the applicant prisoners do not question the jurisdiction of the court to take cognizance of the various crimes of rebellion, murder, arson, etc., alleged in the information to which they pleaded guilty. Nor do they question that the Court of First Instance could have properly sentenced them for the crime of rebellion complexed with murder, arson, etc. if such crimes could properly be deemed as constituting one single complex offense. Their precise contention (upheld by the court below) is that since rebellion can not form a complex with common crimes, because the latter are either absorbed by the rebellion itself or are punishable as independent offenses (as subsequently decided by this court), the penalty of reclusión perpetua meted out to them is excessive and void in so far as it goes beyond the prisión mayor and fine not exceeding P20,000 prescribed by Article 135 of the Revised Penal Code.

It will be seen that the prisoners’ stand assumes that doctrines and rulings of the Supreme Court operate retrospectively, and that they can claim the benefit of our decisions in People v. Hernandez, People v. Geronimo, and People v. Togonon (ante), promulgated four or more years after the prisoner applicants had been convicted by final judgment and started serving sentence. However, the rule adopted by this Court (and by the Federal Supreme Court) is that judicial doctrines have only prospective operation and do not apply to cases previously decided (People v. Pinuila, 103 Phil., 992; 55 Off. Gaz., [23] 4228).

"The decision of this Court on that appeal by the government from the order of dismissal, holding that said appeal did not place the appellants, including Absalon Bignay, in double jeopardy, signed and concurred in by six Justices as against three dissenters headed by the Chief Justice, promulgated way back in the year 1962, has long become the law of the case. It may be erroneous, judged by the law on double jeopardy as recently interpreted by this same Tribunal. Even so, it may not be disturbed and modified. Our recent interpretation of the law may be applied to new cases, but certainly not to an old one finally and conclusively determined. As already stated, the majority opinion in that appeal is now the law of the case."cralaw virtua1aw library

The U. S. Court of Appeals for the District of Columbia in Warring v. Colpoys, 136 A. L. R. 1025, considered the same question and arrived at the same result. Said the Court:jgc:chanrobles.com.ph

"All of the loose ends presented in this discussion on the effect of altering the law can be pretty well tied together when it is realized that law is not a pure science, that law loses its vital meaning if it is not correlated to the organic society in which it lives, that law is a present and prospective force, that law needs some stability of administration, that the law is all the law there is, that law is more for the parties than for the courts, that people will rely upon and adjust their behavior in accordance with all the law be it legislative or judicial or both."cralaw virtua1aw library

These considerations should guide the lawmakers and the law appliers in making their determinations in respect of whether a change in the law is to be effective only for the future or also for the past, and if the latter, to what extent. 1 And these considerations should be applicable to both sides of a potential litigation, civil or criminal, so that we may have our rules of the game as we go. The Supreme Court in the Nye case applied its new law to the litigation then before it. Inasmuch as personal liberty was involved and the courts usually apply law this much after the fact, such a result was meritorious. But the Court did not indicate whether its new law was to be applied to cases decided under the old law previous to its decision. That question is now for us, another court.

We believe that appellant is not entitled to discharge upon the habeas corpus writ. The District Court had the power to sentence him in a criminal contempt proceeding in 1939. The Nye case of 1941 should not be applied so as to sweep away that power as of 1939. This collateral attack, then, is unavailing. We reject the idea that if a court was considered to have the power in 1939 to do a certain thing under existing statutory construction, and in 1941 that construction is changed so that it no longer has the power to do that thing, it should be concluded that it never had the power in 1939. It has often been said that the living should not be governed by the dead, for that would be to close our eyes to the changing conditions which time imposes. It seems even sounder to say that the living should not be governed by their posterity, for that, in turn, would be downright chaotic."cralaw virtua1aw library

It is thus apparent that it cannot be properly said that the sentence meted out to the applicants Pomeroy was erroneous and beyond the court’s jurisdiction. But, assuming that it was error for the Court to consider that the murders and other common crimes charged against the prisoners could be "complexed" with the rebellion and warranted imposition of a penalty beyond prisión mayor, there remains the issue whether the mistake was or may be considered jurisdictional. We think not.

In providing for complex crimes, the Revised Penal Code did not set up a category of crimes independent of the component ones, but only for an aggravated form thereof. This rule was impelled by the desire to impose only one penalty for all offenses resulting from one and the same criminal impulse. Whether or not the offenses are so related as to constitute one single punishable violation evidently depends upon the Court’s appreciation of the facts of the case and the applicable law, and not upon its jurisdiction, since it is not contested that the various component crimes were within the Court’s power to try and adjudicate. Granting that the sentencing court’s estimate of the facts and its conclusion as to the governing law were erroneous, the mistake did not render it powerless to act upon the premises nor deprive it of authority to impose the penalty that in its view of the case was appropriate. The view it had taken was not such capricious and whimsical exercise of judgment or grave abuse of discretion as would amount to lack or excess of jurisdiction, since at that time the Supreme Court had affirmed convictions for the complex crime of treason with murder and other offenses. 2 As a matter of fact, the existence of the "complexed" rebellion is still upheld to this day by a sizable number of lawyers, prosecutors, judges and even justices of this Court. Hence the error committed was correctible only by seasonable appeal, not by attack on the jurisdiction of the sentencing Court.

While this court has also ruled that an excessive sentence or penalty imposed by final judgment may be corrected by habeas corpus, the cases where such ruling was applied involved penalties that could not be imposed under any circumstances for the crime for which the prisoner was convicted (subsidiary imprisonment for violation of special acts, in Cruz v. Director of Prisons, 17 Phil., 269; imprisonment for contempt by refusal to execute a conveyance, instead of having the conveyance executed as provided by sec. 10 of Rule 39, in Caluag v. Potenciano Pecson, 82 Phil., 8). In the present case, there is no question that the sentence meted out was the one provided by law for the complex crime of which herein applicants were indicted and convicted.

The situation of petitioners Pomeroy is not unique in our judicial annals. A previously adjudicated case, similar in all essential respects, is Paguntalan v. Director of Prisons, 57 Phil., 140. There a prisoner, convicted of robbery, was sentenced to ten years’ imprisonment, plus an additional five years for habitual delinquency in view of his four previous convictions for analogous offenses. He contested the additional penalty for habitual delinquency, on the strength of a subsequent doctrine of this Court that all crimes committed prior to the first conviction should be counted as only one for the purpose of imposing the additional penalty for habitual delinquency; and applied for a writ of habeas corpus, seeking his release after serving the principal term of imprisonment. This Court denied the writ, saying (cas. cit., pp. 143-144):jgc:chanrobles.com.ph

"In the present case the petitioner does not invoke the benefit of article 22 of the Revised Penal Code, giving retroactive effect to penal provisions so far as they are favorable to the accused, provided he is not a habitual criminal, but seeks the review of a sentence which has proved erroneous in view of a subsequent doctrine laid down by this court the error consisting in that, instead of counting the various convictions as one only, due to the proximity and almost simultaneity of the commission of the several crimes of which the petitioner was convicted, the same were considered as separate convictions for the purposes of the law establishing habitual delinquency. This error could have been corrected by appeal, for it was rather an error of judgment and not an undue exercise of judicial powers which vitiates and nullifies the proceeding. This court has repeatedly held that mere errors of fact or law which do not nullify the proceedings taken by a court in the exercise of its functions, having jurisdiction over the crime and over defendant, cannot be corrected through the special remedy of habeas corpus (Trono Felipe v. Director of Prisons, 24 Phil., 121; U.S. v. Jayme, 24 Phil., 90; McMicking v. Schields, 238 U.S., 99; 41 Phil., 971.)"

The case of Trono Felipe v. Director of Prisons (24 Phil., 121) may also be cited. There the prisoner applied for habeas corpus and release, on the ground that he was erroneously convicted and sentenced for abduction with consent of a virgin above 18 years of age, when according to a subsequent ruling of the Supreme Court the woman abducted should be less than 18 years old. This Court again denied the release (cas. cit., pp. 123-124), ruling that the error was not jurisdictional:jgc:chanrobles.com.ph

"We agree with counsel for the petitioners that under the doctrine laid down in the Fideldia case, judgment of conviction was erroneously entered by the trial court and erroneously affirmed by us, if the allegations of the petitioners are true, and if it is a fact that the record in the case in which these petitioners were convicted and sentenced does not disclose that the woman whom they were charged with having abducted was less than 18 years of age at the time when the alleged crime was committed. But such an error, if in fact it was committed, in no wise affected the jurisdiction of the court below to render judgment of conviction and to sentence the petitioners for the crime of which they were convicted. Throughout the entire course of those proceedings in the trial court, that court had jurisdiction of both of the persons of the accused and of the crime with which they were charged, and it did not and could not lose that jurisdiction as a consequence of mistake or error committed by the trial judge in his finding of fact as to the age of the woman, or in his conclusions of law as to the bearing of the woman’s age upon the question of the guilt or innocence of the accused of the crime with which they were charged." (Italics supplied)

In consonance with the foregoing precedents, we find that the Court of First Instance of Rizal erred in ordering the release of the prisoners William Pomeroy and Celia Mariano. While the penalty of reclusión perpetua imposed upon them by final judgment is considerably longer than that imposed by us in subsequent similar cases, the remedy lies in the hands of the Chief Executive and not in the Courts.

The decision appealed from is reversed and set aside, and the petition for habeas corpus is ordered dismissed, with costs de oficio. So ordered.

Bengzon, Padilla, Montemayor, Labrador, Concepción and Endencia, JJ., concur.

PARAS, C.J., dissenting:chanrob1es virtual 1aw library

This petition for habeas corpus was presented in the Court of First Instance of Rizal on the strength of the petitioners’ reliance that the decisions of the Supreme Court will be enforced.

The petitioners in the court below, who are now appellees, were sentenced to a penalty of reclusión perpetua after entering a plea of guilty to an information charging them with the complex crime of rebellion with murders, robberies and kidnappings.

We have held in People v. Hernandez Et. Al., 99 Phil., 515; 52 Off. Gaz., (12) 5506, that rebellion cannot be complexed with other common crimes. We have adhered to and reiterated this ruling in People v. Geronimo, 100 Phil., 90; 53 Off. Gaz., (1) 68; People v. Togonon, 101 Phil., 804; 54 Off. Gaz., (36) 8237, People v. Romagosa, 103 Phil., 20; 52 Off. Gaz., [14] 2946 and People v. Santos, 104 Phil., 551; 56 Off. Gaz., [19] 3546. And the Revised Penal Code penalizes rebellion with prisión mayor (Art. 135).

Following the doctrine laid down in the Hernandez case and consistently repeated in our decisions, the maximum penalty to which the appellees could have been sentenced, upon their plea of guilty, was the minimum period of prisión mayor which ranges from 6 years and 1 day to 8 years.

In Cruz v. The Director of Prisons, 17 Phil., 269-73, this Court has held that when a sentence imposed punishment in excess of the power of the court, the sentence is void as to such excess and a prisoner confined thereunder is entitled to be released on a writ of habeas corpus if he has served so much of the sentence that could have been lawfully imposed.

Again, in Caluag v. Pecson (82 Phil., 8; 46 Off. Gaz., (2) 514, 516) this Court said:jgc:chanrobles.com.ph

"A sentence which imposes upon the defendant in a criminal prosecution a penalty different from or in excess of the maximum which the court is authorized by law to impose for the offense of which the defendant was convicted, is void for want or excess of jurisdiction, as to the excess in the latter case. And a judgment of imprisonment which the court has no constitutional or statutory power to impose, as in the present case, may also be collaterally attacked for want or rather in excess of jurisdiction."cralaw virtua1aw library

Considering that at this time, by crediting their good conduct time allowance and one-half of the period of their preventive imprisonment, the appellees have served the maximum period of imprisonment that could have been lawfully imposed upon them, they are entitled to the writ prayed for.

Some members of the Court would prefer to adhere to their dissenting opinion in the rebellion cases above cited to the effect that there exists in our legal system the complex crime of rebellion, notwithstanding the settled doctrine of this Court on the matter which has precipitated a move in the Congress of the Philippines after the promulgation of the Hernandez and Geronimo cases to amend the penal code so as to make the crime of rebellion a capital offense. Other members of the Court believe that the remedy of appellees, if any, would be an application for pardon, thus making the right to liberty of an accused under similar circumstances dependent upon the discretion of the Chief Executive and depriving him of his remedy in courts of justice. From the different opinions of the members of the Court, I regret to dissent and express my vote to give effect to the doctrines enunciated in our decisions which are relied upon by the appellees.

It is unfortunate that the majority cites as authority the case of People v. Pinuila, Et Al., 103 Phil., 992; 55 Off. Gaz. [23] 4228, promulgated on May 30, 1958. I would like to point out that when this Court interpreted Article 135 of the Revised Penal Code, we simply meant that our interpretation was the law since the Code’s enactment. Rooted on this notion, I now quote the dissenting opinion of Mr. Justice Felix in the Pinuila case, as follows:jgc:chanrobles.com.ph

"I concur in the dissenting opinion of the Chief Justice and make mine his reasons in support of his contention. I wish, however, to add another reason which, I know, may be more realistic than juridical.

"There is no dispute among the members of the Court that the decision We rendered in this case when it was first brought up to Us, was erroneous because by that time, the defendant had already been placed in double jeopardy. Nonetheless, this Tribunal ruled that the lower court had jurisdiction over the case and remanded the same to the lower Court for further proceedings. Needless to say that when this case was elevated to Us for the second time and despite our previous ruling aforementioned, the defendant had not ceased to be in double jeopardy, and it is my considered opinion that We cannot sanction or approve our said ruling under the theory that it was then the law of the case. Once Aristotle said that he was "amicus Plato sed magis amica veritas", and in paraphrasing this statement that history passed on to us and sanctioned with its approval, I may say that although I am prone to follow the principle of stare decisis and maintain the law of the case, as already stated, yet I am always more determined to uphold the TRUTH and recognize an error that this Court may have previously committed."cralaw virtua1aw library

Bautista Angelo, J., concurs.

Endnotes:

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1. Snyder, Retrospect Operation of Over-ruling Decisions (1940) 35 III. L. Rev. 121; Freeman, The Protection Afforded Against the Retroactive Operation of an Overruling Decision (1918) 18 Col. L. Rev. 230; (1933) 42 Yale L. J. 779; (1938) 25 Va. L. Rev. 210. Compare 38 ALR 1514 et seq; but see, United States v. Hill, 3 Cir., 70 F(2d) 1006, certiorari denied 292 US 634, 54 S Ct 719, 78 L ed 1487; Compare Hoiser v. Aderhold, 5 Cir, 71 F(2d) 422 and Rives v. O’Hearne, 64 App (DC) 48, 73 F(2d) 984; Ellerbee v. Aderhold, DCND(Ga) 5 F Supp 1022.

2. See People v. Labra, 81 Phil., 377; People v. Albano, 82 Phil., 767; People v. Vilo, 82 Phil., 524; People v. Jardinico, 85 Phil., 410.

1. EVIDENCE; MURDER CHARGE IN RETALIATION FOR ILLEGAL DETENTION CHARGE AGAINST WITNESSES; ACQUITTAL. — Where the evidence of record strongly indicates that the appellants were included in the murder charge solely in retaliation for their having accused some of the prosecution witnesses with illegal detention, they should be acquitted.

2. ID.; CREDIBILITY; SHOWING OF MURDER WEAPON TO STRANGER INCREDIBLE. — It is difficult to believe that persons meeting to plan the commission of murder would have the effrontery and carelessness of exhibiting the murder weapon to a total stranger.

Tomas Moquiadi, Danis Bagulin, Pedro Dacucus and Polindo Dacucus were charged before the Court of First Instance of La Union with the crime of murder, in two separate informations, for the killing of Pedro Cabading and Mariano Bunagan (Criminal Cases Nos. 1297 and 1302). Polindo Dacucus, one of the defendants in the murder indictments, was also accused in another information filed before the same court with illegal possession of firearm (Criminal Case No. 1301).

In view of the relation of facts in the three cases all were tried jointly upon agreement of the parties. After trial, the lower court found guilty of murder, in Criminal Cases Nos. 1297 and 1302, defendants Pedro Dacucus, Tomas Moquiadi and Danis Bagulin as principals and Polindo Dacucus as accomplice, and accordingly sentenced each of the first three accused in each case to reclusión perpetua and Polindo Dacucus in each case to an indeterminate penalty of from six (6) years and one (1) day of prisión mayor to thirteen (13) years of reclusión temporal. All were likewise ordered to indemnify, jointly and severally, the heirs of the deceased victims in the amount of P6,000.00 for each. In Criminal Case No. 1301, Polindo Dacucus was further sentenced to an indeterminate penalty of from five (5) years and one (1) day to six (6) years of imprisonment.

From the joint decision, only Pedro Dacucus and Polindo Dacucus appealed to this Court, while Moquiadi and Bagulin started serving their respective sentences.

It is a fact in evidence that around midnight of the 27th of October, 1951, in sitio Ayusip, barrio of Alibangsay, municipality of Bagulin, La Union, Pedro Cabading and Mariano Bunagan were shot to death inside their respective houses by a group of armed men.

The prosecution established that while the deceased Pedro Cabading was already asleep in his house with his family, he was awakened by someone calling from the yard. Upon inquiry as to what the intruder wanted, the latter asked for some water. In the meantime, Mienda Balaan, the wife of the deceased, who was also awakened, had gotten hold of a flashlight and upon flashing it outside, she saw and recognized Tomas Moquiadi standing on the second rung of the stairway and Danis Bagulin in the yard about 1-1/2 meters behind Moquiadi. She also noticed other men around but was not able to identify them. As her husband Cabading stepped out and was about to hand over the glass of water, a volley of shots met him and death was instantaneous. Scared, Mienda sought cover.

A few minutes later, in the house of Mariano Bunagan, not far away from the Cabadings, a similar fate befell the inmates. Bunagan, also awakened by a group of armed men, lighted a lamp hanging from the middle beam of the house and as he opened the door, he was forthwith greeted with a volley of shots that felled him and caused him to expire a little later.

The prosecution implicated the appellants Pedro Dacucus and Polindo Dacucus in the crimes upon the testimony of Pablo Dingcug, Pancho Angadol, Macario Awingan, Pedro Gamlosen and Wagsey Sayang-od.

Wagsey Sayang-od, a resident of barrio Nagyoboyoban, San Fernando, La Union, asserted that he spent the night in the house of deceased Bunagan on the date of the incident; that upon seeing the latter hit by bullet shots, he jumped out of the window only to be met on the ground by someone who grabbed him by the shoulder; that as he struggled to free himself, he recognized his assailant by the light of the lamp thrown against the latter to be Pedro Dacucus; and that soon after he was able to escape the attacker’s hold, Wagsey fled under cover of darkness.

Pedro Dingcug testified that in the afternoon of October 27, 1951, while in the house of Polindo Dacucus, he saw the latter hand over to his brother, Pedro, who was allegedly then with Moquiadi and Bagulin, something that was wrapped in a sack and which, when taken out, turned out to be a gun; and that as the trio were about to leave the premises, Pedro supposedly told Polindo, "You may remain."

Pancho Angadol’s testimony is to the effect that on the 28th of November, 1951, Polindo Dacucus came to see him (Pancho) at his residence at sitio Lay-laya, barrio Cardiz, Bagulin; that Polindo then and there turned over to him a carbine for safe-keeping, with instruction that should he be questioned about the gun, to say that it was given to him since August of 1951; that on the same occasion, Polindo confided to this witness his participation in the wrongs committed against Cabading and Bunagan by delivering the gun to Pedro Dacucus, Moquiadi and Bagulin, with knowledge of the unlawful plot of the trio. The next morning, the carbine was, according to Pancho’s declaration, surrendered by him to Macario Awingan, a civilian ranger of Lonoy, San Gabriel, La Union.

Macario Awingan declared that on December 3, 1951, when he reputedly investigated Polindo Dacucus in Ayusip about the gun, the latter owned the same upon being confronted with it; that Polindo likewise admitted having given the gun to Pancho Angadol, instructing the latter that should there be any inquiry about the same, to state that it was delivered to him since August of 1951; and that he confessed handing over the carbine to his co-accused with knowledge that it was to be used in the killing of the two deceased, Cabading and Bunagan. On this occasion, he added, a written statement was executed by Polindo (Exhibit E).

Pedro Gamlosen, a brother of the deceased Mariano Bunagan, testified that the accused Dacucus brothers tried to make repeated offer for an amicable settlement to which he initially refused by later acceded, leading to the execution of the "arreglo particular" (Exhibit 8), dated December 7, 1951, which, nevertheless was not finally consummated.

The accused-appellants not only denied the commission of the crime, but introduced evidence that on the night of the murder they were elsewhere attending a wake or cuñao that lasted the whole night, that about a month or so after the crime, some relatives of the deceased specifically the prosecution witnesses Gamlosen and the two Angadols (Venancio and Villano) and other companions, all fully armed, forcibly seized the appellants and, under threats of death, compelled them (the brothers Dacucus) to surrender two carabaos in settlement of the case, and to sign the "arreglo particular", Exhibit 8, and the admission, Exhibit E; and that when the brothers complained of the coercion and charged Gamlosen and the Angadols with illegal detention, the appellants were included in the murder charge that had been initially filed against Moquiadi and Bagulin exclusively.

Notwithstanding the opinion of the trial court, our scrutiny of the record shows inconsistencies that, in the evidence of the prosecution, cast a strong doubt upon the guilt of appellants.

It is peculiar and highly suspicious that, while Moquiadi and Bagulin were immediately accused, the appellant brothers were not charged until September 2, 1952, about ten months after the murder, and seven months after they had accused the witnesses for the prosecution Venancio Angadol, Villano Angadol and Pedro Gamlosen (brother of the deceased Mariano Bunagan), with illegal detention and with compelling them to enter into an "arreglo particular" to pay for Bunagan’s death. Barrio Lieutenant Evaristo Wacling actually saw the brothers Dacucus taken by the Angadols and Gamlosen, the latter being armed; and he so reported to the Chief of Police Cornelio Estero, who corroborated that fact. That the brothers Dacucus were pressured into surrendering their two carabaos to the relatives of the late Bunagan is admitted by Venancio Angadol himself, from whose possession the carabaos were taken by the Constabulary Lieutenant Dumlao, when the owners (Dacucus) complained of their animals being forcibly taken from them; and by the fact that the certificates of ownership still remained in the name of the appellants herein.

The "arreglo particular" itself signed by Dacucus and Gamlosen (Exhibit 8) and dated December 7, 1951, reveals nothing more than that Dacucus was suspected by the relatives of the deceased Bunagan, because the admitted culprits Moquiadi and Bagulin happened to stop at his house after the murder; without any indication, however, that Dacucus received the killers with knowledge of the perpetration of the crime. Note should be taken of the fact that it was not until ten months afterwards that the brothers Dacucus were formally charged as co-principals in the crime.

As to the alleged eyewitness Wagsey Sayang-od, who claimed to have jumped from Bunagan’s house, wrestled with Pedro Dacucus, and run away when Bunagan was killed, his presence at the murder scene was not confirmed. On the contrary, Inabuey Quindang, Bunagan’s widow, stated under oath in her affidavit (Exhibit 16-A) that she and the deceased were alone in their house on the fatal evening. Moreover, Sayang-od admitted having returned to the house the next day, yet he failed to report the murder and four months after its commission, he kept silent. To cap it all, page 85 and 104 of the transcript contain admission of this witness that he was at Bunagan’s house "the night they say when Mariano Bunagan was shot" and that he returned the next day to the same place "because I was informed that Mariano Bunagan and Pedro Cabading were killed" These details render it dubious that Sayang-od really witnessed Bunagan’s murder.

The trial court also relied on the written statement of Polindo Dacucus, Exhibit E, confessing that the murders were committed by Moquiadi, Bagulin and his brother Pedro Dacucus with the carbine, Exhibit C, which Polindo delivered to Pedro with full knowledge of the use to which the weapon would be put; and that on November 28, 1951, Polindo entrusted the weapon to Pancho Angadol for hiding. This confession (dated almost the same day as the "arreglo particular," Exhibit 8) was not only attacked by the appellants as coerced, but two of the witnesses thereto declared that they signed it themselves through fear of the Angadols and of Gamlosen. Considering further that the ranger Macario Awingan, who prepared it, also drafted the "arreglo particular", Exhibit 8, on December 7, 1951, yet failed to disclose their contents to the Constabulary officers that investigated him in January, 1952, it readily appears that the said "confession" can not constitute adequate proof.

We further notice that in his original affidavit of December 3, 1951, Pancho Angadol made no mention of any admission by Polindo Dacucus that he had previous knowledge or participation in the killings. He admitted under cross-examination that he was prompted to alter his former version and testify against the Dacucus brothers because they had filed complaint for illegal detention against his father, Venancio Angadol, his uncle, Villano Angadol, and Pedro Gamlosen. And it is very likely that the same reason motivated the testimony of the latter against the herein accused.

All in all, even disregarding the evidence of alibi, the evidence of record strongly indicates that the appellants were included in the murder charge solely in retaliation for their having accused Gamlosen and the Angadols with illegal detention. It is apparent, moreover, that if the appellants were really guilty and had voluntarily come to terms with the relatives of the victims, they would not have complained to the authorities of the loss of their carabaos, and, would have established from filing charges for illegal detention.

The case for illegal possession for firearms against Polindo Dacucus rests primarily on the testimony of Pancho Angadol, the written confession, Exhibit E, and the declarations of witness Pablo Dingcug. The first two are discredited by the circumstances adverted to in the discussion of the murder charge. As to the asseverations of Dingcug, we find it difficult to believe that persons meeting to plan the commission of murder would have the effrontery and carelessness of exhibiting the murder weapon to a total stranger. And since possession of the firearm is not duly established, that it was not licensed becomes irrelevant.

We find that the guilt of the appellants has not been proved beyond reasonable doubt as required by law.

Wherefore, the judgment of conviction is reversed and set aside, and the appellants Pedro and Polindo Dacucus are hereby acquitted, with costs de oficio.

Paras, C.J., Bengzon, Bautista Angelo, Labrador, Concepción, Endencia, Barrera and Gutiérrez David, JJ., concur.

1. ACTIONS; PENDENCY OF ACTION; WHEN IT IS A BAR TO ANOTHER. — The test by which to determine whether or not the pendency of another action is a bar to a second action is whether or not "the judgment to be rendered in the action first instituted will be such that, regardless of which party is successful, it will amount to res adjudicata against the second action." (Hongkong & Shanghai Banking Corporation v. Aldecoa & Co., 30 Phil., 255.)

2. ID.; ID.; WHEN ACTION FOR EJECTMENT IS NOT A BAR TO AN ACTION IN THE COURT OF FIRST INSTANCE. — The action for ejectment in the Justice of the Peace Court may not bar plaintiff’s suit in the Court of First Instance praying, among other things, that defendant be restrained from operating the mining properties without necessarily ejecting him therefrom, because if it is finally decided that defendant should be ejected from the mining premises in the illegal detainer case, plaintiff could still prosecute his causes of action against defendant in the Court of First Instance.

3. ID.; ID.; UNLAWFUL DETAINER; WHY ABANDONMENT OR DISMISSAL OF CASE WILL NOT AFFECT PLAINTIFF’S RIGHTS. — The abandonment or dismissal of the unlawful detainer case will not substantially affect the rights of the plaintiff over the property in litigation, particularly, possession thereof, for the reason that such possession may well be included in the relief prayed for in the Court of First Instance under the prayer at the end of the complaint that "plaintiff further respectfully prays the Honorable Court to such other relief as to it may seem just and equitable under the premises."

This is an appeal by plaintiff Zambales Chromite Mining Co. from the order of the Court of First Instance of Zambales, dated April 23, 1957, dismissing plaintiff’s first, third, fourth and fifth causes of action, and from the order of July 23, 1957, denying plaintiff’s motion for reconsideration.

On March 17, 1953, Jose Robles, later referred to as the operator, and the Zambales Chromite Mining Co., later mentioned as the Mining company, executed a contract later supplemented by a "supplementary agreement", ratified on August 14, 1953. According to these two documents, the mining company which owned or had possession of several mineral claims containing mineral deposits, principally chrome ore, delivered them to Robles who undertook to operate them, extract chrome ore in a minimum amount of 2,000 tons a month and to pay the company a royalty of P3.00 per ton net. The other terms of the agreements were that Robles was to repair and rehabilitate at his own expense within a certain period, the roads and bridges of the mining camp and points of mining operations to the provincial road in Sta. Cruz, Zambales, for the purpose of transporting the chrome ore to the Acoje pier or to shipping points of Sta. Cruz, Zambales, and to spend for said repair and rehabilitation at least P30,000; that as operator, Robles guaranteed the prompt payment of the wages and salaries, at the minimum wage rate, of all laborers and employees; that any violation of any of the terms and conditions of the agreements was sufficient ground for the cancellation of the same by the aggrieved party; and that at the termination or cancellation of the agreements, all improvements placed on or undertaken by the operator at his expenses on the premises, such as, buildings, development work, roads, bridges and the like, which are not movable machinery or equipment, shall become the property of the mining company, without obligation to pay for the same.

Appellant claiming that Robles had violated the terms and conditions of the agreement and that notwithstanding demands made by it on him to comply therewith, he refused to do so, advised him in writing on October 10, 1956 that it had cancelled and resolved the contract and demanded that he vacate the mining properties. On November 28, 1956, it filed an action for unlawful detainer against him in the Justice of the Peace Court of Sta. Cruz, Zambales. Robles moved for dismissal of the case on the ground that the Justice of the Peace Court had no jurisdiction over the same, involving as it did mineral land. His motion was denied by the Justice of the Peace Court as well as the Court of First Instance of Zambales before which he raised the question of jurisdiction. Not satisfied, Robles brought the case to this Tribunal in a petition for certiorari (Robles v. Zambales Chromite Mining Co., Et Al., 104 Phil., 688; 55 Off. Gaz. [31] 6012). In our decision promulgated on September 30, 1958, we ruled that the Justice of the Peace Court had jurisdiction to take cognizance of the unlawful detainer case, although it involved mineral land.

In the meantime, on January 7, 1957, plaintiff-appellant filed the present action. Its complaint contained six causes of action. Under the first cause of action, plaintiff claims that defendant Robles failed to extract at least 2,000 tons of chrome ore a month, beginning August 15, 1953, he having produced only the total of about 3,158 tons of chrome ore, instead of a total of 76,000 tons up to October 15, 1956; that defendant failed to pay plaintiff at least the sum of P12,000 per month beginning August 15, 1953, computed at 12% of the total value of said 76,000 tons computed at the selling price of P48.00 per ton, defendant having paid the plaintiff as of October 11, 1956, only the total sum of P3,426.25; that defendant Robles did not spend at least P30,000, Philippine currency, as agreed upon for the rehabilitation and repair of plaintiff’s roads and bridges; that he also failed to promptly pay the wages and salaries of his laborers and employees working at the said mines, causing many of said laborers to quit their jobs, thereby contributing largely to defendant’s failure to comply with the other terms of the agreements; and that despite the cancellation and dissolution of the contract by plaintiff, defendant continued to operate the mining mineral claims and had removed a total of at least 1,258.22 tons of chrome ore between October 11 and 31, 1956, of which 858.22 tons defendant shipped on board a steamer and sold at a total price of P43, 280.44, and the remaining 400 tons were deposited by him along the bank of the Nayum River in Sta. Cruz, Zambales, preparatory to their being shipped out and removed from the municipality of Sta. Cruz, Zambales. For the protection of the rights and interest of the plaintiff, it later asked the court to perpetually restrain Robles and his co-defendants from further mining, extracting and removing chrome ore from the aforementioned mineral claims.

Under the second cause of action, plaintiff alleges that contrary to the stipulations of the contract, plaintiff had been reliably informed that Robles and his co-defendants, representatives and employees, were contemplating or threatening to remove and destroy or tear down the buildings, roads, and bridges and other permanent improvements and installations belonging to the plaintiff and within its mining properties. Plaintiff asked that defendants be restrained from removing and destroying or tearing down said improvements.

Under the third cause of action, plaintiff alleges that although under the conditions of the contract, plaintiff had the right to send and station its representatives at the mines to verify the status of the same and to take the necessary precautions to protect its properties, Domingo Sison and Juan Francisco, acting for themselves and/or representatives of defendant Robles, with the aid of the Philippine Constabulary, ejected the representatives sent by the plaintiff on or about January 2, 1957; that inasmuch as Robles had lost any right to occupy the mineral claims and extract chrome ore therefrom because of the cancellation of the contract, he had no right to prevent plaintiff or its authorized representatives from entering the mines and from using its buildings, roads, and bridges and other permanent improvements; consequently, defendant should be restrained from preventing plaintiff or any of its representatives from entering the mining premises and using the buildings, roads, bridges, etc.

Under the fourth cause of action, plaintiff asks that defendants be required jointly and severally to pay the sum of P43,280.44, which represents the value of 858.22 tons of chrome ore referred to in the first cause of action.

Under the fifth cause of action, plaintiff claims delivery by or payment from defendants of the balance of 400 tons of chrome ore removed from the mines after the cancellation of the contract and deposited along the bank of the Nayum River, mentioned in the first cause of action.

Under the sixth cause of action, plaintiff claims the sum of P10,000 attorney’s fees plus expenses of litigation.

Robles filed his answer to the complaint with a motion to dismiss the first, fourth and fifth causes of action and that after trial on the merits, the second, third and sixth causes of action be likewise dismissed.

On April 23, 1957, the trial court dismissed plaintiff’s first, third, fourth and fifth causes of action and at the same time ordered that the second and sixth causes of action be set for hearing. For purposes of reference, we reproduce said order:jgc:chanrobles.com.ph

"Acting on the defendant’s petition to dismiss plaintiff’s instant complaint and it appearing that there is pending before the Justice of the Peace Court of Sta. Cruz, Zambales, Civil Case No. 127 entitled ’Zambales Chromite Mining Co. v. Jose Robles’, for ejectment; that this Court has found in Civil Case No. 1878 of this court, which is a certiorari case filed by Jose Robles against the Justice of the Peace of Sta. Cruz, Zambales, in connection with said case No. 127, that said Justice of the Peace has jurisdiction to try said Civil Case No. 127; that between said Case No. 127 and the instant case there is identity of parties and rights asserted, as well as substantial identity in the relief prayed for, so that any judgment which may be rendered in said Case No. 127 will undoubtedly amount to res judicata with respect to plaintiff’s First, Third, Fourth, and Fifth causes of action in this case; that the proper remedy for these causes of action is an action for recovery of possession and rents; that it has been held that an injunction should not be a substitute for an ordinary action of forcible entry and detainer (Sofia Devera v. Crispin Arbes, 13 Phil., pp. 273, 277), the Court finds the dismissal of plaintiff’s first, third, fourth and fifth causes of action to be in order.

"PREMISES CONSIDERED, the plaintiffs first, third, fourth and fifth causes of action in this case, are hereby dismissed, and the case is set for hearing on June 12, 1957 at 9:00 o’clock in the morning with respect to plaintiff’s Second and Sixth causes of action." (Record pp. 84-85).

In asking for the dismissal of the first cause of action, Robles claimed that there was another action pending between the same parties and for the same causes before the Justice of the Peace Court of Sta. Cruz, Zambales, Case No. 127, referring to the illegal detainer case already mentioned. In answer, plaintiff contends that the pendency of another action may not be invoked in the instant case because although the basis of the complaint for ejectment and the present action arose from the same cause, namely, violation by the defendant of the terms and conditions of the contract, nevertheless, the relief prayed for and the rights asserted are different. In the ejectment case, plaintiff seeks to obtain possession of the mining premises, while in the present action, in its first cause of action, plaintiff merely asks that defendant be restrained from operating the mining properties without necessarily being ejected therefrom. Moreover, other causes of action set forth in plaintiff’s complaint, such as the recovery of P43,280.44 (fourth cause of action) and the recovery of 400 tons of chrome ore or its value (fifth cause of action) are well beyond the jurisdiction of the Justice of the Peace Court, and what is more, the same do not represent back rentals or damages on account of the unlawful detainer.

Defendant, however, asserts that the first cause of action is in the guise of a separate action of injunction and is in effect a petition for preliminary injunction in aid of its action for illegal detainer, a remedy which the Justice of the Peace Court may not grant; naturally, plaintiff may not obtain such relief by filing a separate action for injunction in the Court of First Instance based on the same set of facts. As to the distinction sought to be made by plaintiff between the right to possess the mining properties and the right to operate them, such distinction according to defendant is untenable for the reason that both rights are co-existent on the question of whether the contract between the parties still exists. And as regards the fourth and fifth causes of action, defendant urges that an action for injunction is not the proper remedy, but rather the filing of an ordinary action for the recovery of a sum of money and for replevin, respectively.

The test by which to determine whether or not the pendency of another action is a bar to a second action, is whether or not "the judgment to be rendered in the action first instituted will be such that, regardless of which party is successful, it will amount to res adjudicata against the second action." (Hongkong & Shanghai Banking Corporation v. Aldecoa & Co., 30 Phil., 255). In said case, it was held that to sustain the plea of another action —

". . . there must be the same parties, or at least such as represent the same interests. There must be the same rights asserted and the same relief prayed for. This relief must be founded on the same facts, and the title or essential basis of the relief sought must be the same. The identity of these particulars should be such that if the pending case had already been disposed of, it could be pleaded in bar as a former adjudication of the same matter between the parties."cralaw virtua1aw library

In that case, it was held that an action to annul the mortgage was not a bar to an action for foreclosure of the same, for the reason that although a final judgment in the first case declaring the mortgage null and void, would preclude the bank from foreclosing the mortgage, and therefore dismiss its foreclosure suit, still a decision holding such mortgage valid would pave the way for the foreclosure of the same. So, in the present case, the action for ejectment in the Justice of the Peace Court may not bar plaintiff’s suit in the Court of First Instance, or rather some of his causes of action because if it is finally decided that defendant should be ejected from the mining premises in the illegal detainer case, plaintiff could still prosecute his causes of action against defendant in the Court of First Instance. It is argued that injunction should not be a substitute for an ordinary action for forcible entry and detainer (Sofia Devesa v. Crispin Arbes, 13 Phil., 277, cited in the appealed order). However, in the four causes of action dismissed by the trial court, plaintiff does not seek to deprive defendant of the possession of the property. In the first cause of action, plaintiff merely asks that defendant be restrained from operating the mines or otherwise extracting ore from the same; in the third cause of action, the relief sought was to restrain defendant from preventing plaintiff’s representatives from entering the premises, and from using the buildings, roads, bridges, etc. on the premises. The fourth and fifth causes of action only ask for the recovery of sums of money or the possession of chrome ore, other than damages due to illegal detainer. Incidentally, it will be observed that although defendant Robles in his answer did not ask for the dismissal of the third cause of action, nevertheless, the trial court motu propio dismissed the same.

There is another and practical reason for holding that the unlawful detainer case in the Justice of the Peace Court of Sta. Cruz, Zambales, does not bar the causes of action of plaintiff company in the Court of First Instance, dismissed by the latter, and it is this. Said unlawful detainer case may for all practical purposes now be considered abandoned and if it has not yet been tried and decided by the justice of the Peace Court, plaintiff company may well ask for its dismissal.

It is highly possible that plaintiff company, seeing that the final determination of the unlawful detainer case would be unduly delayed, as in fact it was, and consequently, it could not obtain the possession of the property in question in the immediate future, it filed the present case in the Court of First Instance in 1957, in order to obtain appropriate relief and minimize damages and losses. But then it could not well ask for the dismissal of said unlawful detainer case, for the reason that the Justice of the Peace Court had temporarily lost jurisdiction over the same, the case having been finally taken to this Tribunal on appeal, and said appeal was not decided by us until September 30, 1958.

The abandonment or dismissal of the unlawful detainer case would not substantially affect the rights of the mining company over the property in litigation, particularly, possession thereof, for the reason that such possession may well be included in the relief prayed for in the Court of First Instance under the prayer at the end of its complaint that "plaintiff further respectfully prays the Honorable Court to such other relief as to it may seem just and equitable under the premises." Besides, the Court of First Instance in the present action would be in a much better position to determine the relative rights of the parties over the property in question, and from the standpoint of the plaintiff company, grant it all the relief it is entitled to. Ordinarily, the relief that a plaintiff in an unlawful detainer case is entitled to is the possession of the property under litigation, and damages in the form of accrued rentals or the reasonable value of the use and occupation of the premises. In the present case, however, the rentals and property were to be in the form of royalties based on the production of chrome ore as a result of the operation of the mineral claims by the defendant. However, there looms an incompatibility, namely, that in order to pay said royalties, the defendant must operate the mines and produce chrome ore, but according to the relief prayed for by plaintiff’s complaint, it does not want defendant to continue operating the mines. Besides, there are other reliefs demanded by plaintiff company which are not available in an unlawful detainer case, such as, the payment of royalties, preventing defendant from removing, burning, or otherwise destroying any of the buildings, roads, bridges and other permanent improvement and installations on the premises; preventing defendant from impeding plaintiff’s representatives from entering and staying on the properties as agreed upon in the contract; the payment by defendant to the plaintiff of about P43,000 for chrome ore said to have been sold by him, and for the delivery of chrome ore deposited by defendant along the bank of the river, preparatory to the shipment thereof abroad, or value of said ore.

In view of the foregoing, the order appealed from is set aside and the case is ordered remanded to the trial court for further proceedings, with costs.

Paras, C.J., Bengzon, Bautista Angelo, Reyes, J. B. L., Endencia, Barrera and Gutiérrez David, JJ., concur.

Labrador and Concepción, JJ., concur in the result.

1. COURT OF INDUSTRIAL RELATIONS; AWARDS; WHY NOTICE IS REQUIRED BEFORE THEY CAN BE TERMINATED. — Since an award by the Court of Industrial Relations is made as a result of a controversy and is binding upon the parties, its effectivity cannot be terminated ex parte unless the period of its duration is specified therein. The reason is obvious: since the award is made in favor of the employee, it is but fair and just that he be heard before his right thereto is terminated, otherwise the employer might act arbitrarily or to his prejudice. That is why section 17 of Commonwealth Act No. 103 requires that notice of termination be given to the court. This requirement is not merely pro forma. This is to give the court the right to intervene in order that the interest of labor may not be jeopardized.

On February 14, 1957, Cesar Cabrera and seventy-one (71) other employees of the former Metropolitan Water District, filed with the Court of Industrial Relations a motion praying for the execution of an award contained in a resolution issued by said court on November 25, 1950 in Case No. 349-V granting an increase of P0.50 per day to all employees of the Metropolitan Water District and alleging that pursuant to said award the Metropolitan Water District paid to said employees the salary increase granted therein, but that in November, 1953 the Metropolitan Water District stopped paying the salary increase for which reason they prayed that an order be issued directing the said district to pay them the salary increase from the time that it was stopped designating an examiner of the court to make a computation of the amounts to which they are entitled.

On March 11, 1957, the National Waterworks and Sewerage Authority (NAWASA,) which succeeded the Metropolitan Water District, filed an opposition to the motion contending that there is no award to be executed because the same has already been terminated pursuant to the provisions of Section 17 of Commonwealth Act No. 103, as amended. The NAWASA alleged that, the award made by the Court of Industrial Relations on November 25, 1950 not having specified the time during which it should be valid and effective, it gave notice of its termination on December 29, 1953 to said court in Case No. 359-V furnishing a copy thereof to the union with which the movants were affiliated.

On July 19, 1957, the Court of Industrial Relations issued an order stating that the award contained in its resolution of November 25, 1950 could not have been terminated by merely serving a notice of termination on the part of the NAWASA even if the same does not specify the time during which it shall be effective because the approval of the court was still necessary for its validity, and since no approval has been obtained, the award is still valid and effective. Wherefore, the court directed its examiner to compute the amounts to which the movants were entitled by way of salary increase. The NAWASA filed a motion for reconsideration, and when the same was denied, it interposed the present petition for review.

The background which gave rise to the incident subject of the present petition for review may be stated as follows: The Metropolitan Water District Worker’s Union filed with the predecessor of the NAWASA (Metropolitan Water District) a set of demands one of which was the reallocation and arrangement of the salaries and wages of its employees and laborers in accordance with the standardized plan prepared by the union. The parties tried to reach an amicable settlement but failed, whereupon the members of the union went on strike on October 18, 1949. Without delay, the Court of Industrial Relations intervened summoning the representatives of both employer and employees to a conference during which it was agreed to grant a general increase of P0.50 a day effective October 21, 1949 to all laborers on the daily basis and to those employees who are on the monthly basis but are on strike. This agreement was reduced to writing and was approved on October 20, 1949. It was expressly stated therein that the agreement was temporary in nature and would only remain in force until the court fixes the reasonable and just compensation to which the strikers were entitled. Immediately after the execution of said agreement, the court proceeded to receive evidence on the strength of which it handed down an order on June 13, 1950 adopting a new scale for wages. Neither of the parties was satisfied and both moved for a reconsideration. The result was the order issued on November 25, 1950, which amends the previous order in manner more favorable and acceptable to the employees.

It would therefore appear that the award contained in the order of November 25, 1950 which grants to the employees of the NAWASA the salary increase of P0.50 a day was not the result of a compromise arrived at between the parties but rather it was fixed by the Court of Industrial Relations as the reasonable increase to which the employees and laborers were entitled after a mature study and consideration of the evidence submitted by the parties at the hearing set by the court for the purpose. The question that now arises is: Can the NAWASA terminate the effectivity of the award by simply giving notice thereof to the court and the union under Section 17 of Commonwealth Act No. 103?

Said Section 17 provides:jgc:chanrobles.com.ph

"An award, order or decision of the Court shall be valid and effective during the time therein specified. In the absence of such specification, any party or parties to a controversy may terminate the effectiveness of an award, order or decision after three years have elapsed from the date of said award, order or decision by giving notice to that effect to the Court."cralaw virtua1aw library

Since the award did not specify the time during which it shall be valid and effective, considering that it was not the result of a compromise arrived at between the parties, it is the theory of petitioner that it can terminate the same by giving notice to the court after the lapse of three years from the date of the award. Here this period has already elapsed, and so petitioner contends that the notice given by it of its termination was in accordance with law. The Court of Industrial Relations disagrees with this theory, for it is of their opinion that before said notice of termination could have any validity, it first needs the sanction of the court. On this point, it made the following comment: "The Court maintains the policy that Section 17 of Commonwealth Act No. 103, as amended could not be mechanically invoked nor availed of by the party by refusing to comply with such award through the sending of a notice of termination. In the interest of justice and equity, the Court maintains the policy that all cases of termination of award, order, or decision, it must be properly heard in order that the laborers or the parties could not be deprived arbitrarily of their lawful earning."cralaw virtua1aw library

The foregoing interpretation of the law is correct. Since an award is made as a result of a controversy and is binding upon both parties, it would appear logical that its effectivity cannot be terminated ex parte unless the period of its duration is specified therein. The reason is obvious: since the award is made in favor of the employee, it is but fair and just that he be heard before his right thereto is terminated, otherwise the employer might act arbitrarily or to his prejudice. that is why the law requires that notice of termination be given to the court. This requirement is not merely pro forma. This is to give the court the right to intervene in order that the interest of labor may not be jeopardized.

Wherefore, petition is dismissed, without pronouncement as to costs.

Paras, C.J., Labrador, Concepción, Reyes, J. B. L., Endencia, Barrera and Gutiérrez David, JJ., concur.

1. VENUE; SALE OF LAND UNDER LEASE; VENUE DETERMINED BY THE NATURE OF PRINCIPAL CLAIM. — Where the lessee seeks to establish an interest in an hacienda that runs with the land and one that must be respected by the purchase of the land even if the latter is not a party to the original lease contract, the question of whether or not the standing crop is immovable property become irrelevant, for venue is determined by the nature of the principal claim. Since the lessee is primarily interested in establishing his right to recover possession of the land for the purpose of enabling him to gather his share of the crops, his action is real and must be brought in the locality where the land is situated.

Petition for certiorari and prohibition with preliminary injunction to enjoin the respondent Hon. Higinio B. Macadaeg, in his capacity as judge of the Court of First Instance of Manila, from enforcing his order of December 20, 1957 in Civil Case No. 34453.

On December 9, 1957, respondent Alejandro Lim filed a complaint with injunction against the petitioners herein before the Court of First Instance of Manila. The complaint alleges substantially that the plaintiff was the lessee of two parcels of riceland, known as "Hacienda de Leon", situated in the Municipality of Talavera, Nueva Ecija, with Transfer Certificate of Title Nos. NT-21932 and NT-21866. Sometime in August, 1957, the owners of the said Hacienda sold it to the Land Tenure Administration for purposes of subdivision and resale to tenants, pursuant to Republic Act No. 1400. Plaintiff, however, claims that he has planted rice in the land in dispute with consequent ownership of 30% of the harvest for the agricultural year 1957-58, and prayed that the defendant Land Tenure Administration (petitioner herein) be restrained from preventing the plaintiff’s entry in the land for the purpose of gathering the standing crops therein and to enjoin the other defendants, officials of the Land Tenure Administration, from taking and appropriating the same for the benefit of the Administration.

The defendants made a special appearance before the court seeking the dismissal of the complaint on the ground of improper venue. The respondent Judge denied the motion, and in the same order of denial, issued the writ of preliminary injunction prayed for by the plaintiff. Hence this petition.

In a resolution of this Court, dated the 27th of December 1957, the Clerk of Court was authorized to issue, without bond, a writ of preliminary injunction to restrain the enforcement of the lower court’s order of December 20, 1957 until further notice from this Supreme Court.

The question of venue is the sole issue here. The petitioners argue that the standing crops referred to in the complaint are real or immovable property under Article 415 (2) of the Civil Code of the Philippines, and, therefore, the action should have been instituted in the Court of First Instance of Nueva Ecija, where the property is situated. Respondent Lim, on the other hand, contends (and the lower court so held) that standing crops, when owned by one other than the owner of the land in which they grow, are considered personality, and thus the suit may be filed in any court of proper jurisdiction where either of the parties reside or may be found at the election of the plaintiff.

In our opinion, the problem was incorrectly posed. Analysis of the complaint filed in the Court below reveals that respondent Alejandro T. Lim’s basic stand, and which he sought to vindicate, was the continuation of his leasehold rights notwithstanding the sale of the Hacienda de Leon to the Land Tenure Administration by the original owners and lessors. The claim of ownership of 30% of the crop is accessory to the leasehold, and but a consequence thereof. This is apparent from the following allegations (Annex A, petition):chanrob1es virtual 1aw library

4

"At the time, however, that the said Hacienda was sold to the Land Tenure Administration as mentioned above, plaintiff was still the lessee of the same and had already planted the property to palay for the agricultural year 1957-58, through his tenants, and which crops now existing on the said Hacienda are now partly being harvested and will be totally harvested by the months of December, 1957, and January, 1958;"

7

"After the sale of the said Hacienda de Leon to the Land Tenure Administration, defendants refused to recognized the leasehold rights of the plaintiff over the said property, and now maintain that said property was purchased (sic) by the said government entity from the former owners, free form all liens and encumbrances, and now also refuse to allow plaintiff to enter into possession of the property, and to gather the standing crops, notwithstanding the fact that both the former owners (lessors) and the present owner, the Land Tenure Administration, had nothing to do with the preparation, cultivation and planting of the crops;"

8

"As there were already standing crops on the said Hacienda at the time it was sold by the former owners to the Land Tenure Administration, and as said property was then still under lease to plaintiff who made the plantings, the said lease, being one on rural land, was not and cannot be terminated by the defendants who had knowledge of the existence of the lease, until after the harvest. Even assuming that defendants had no knowledge of the said lease, which is not the fact, and that the buyer made use of its right to terminate the same, the plaintiff nevertheless has the right to enter the premises to gather the crops for the current agricultural year (Article 1676, Civil Code).

In other words, the respondent Lim sought to establish an interest in the Hacienda de Leon that ran with the land and one that must be respected by the purchaser, even if the latter was not a party to the original lease contract. That being the case, whether the standing crop is or is not immovable property is not relevant, for venue is determined by the nature of the principal claim. It is apparent that the plaintiff is primarily interested in establishing his right to recover possession of the land for the purpose of enabling him to gather his share of the crops. Hence, his action is real and must be brought in the locality where the land is situated. Section 3, Rule 5 of the Rules of Court provides:jgc:chanrobles.com.ph

"SEC. 3. Real action. — Actions affecting title to, or for recovery of possession, or for partition or condemnation of, or foreclosure of mortgage on, real property, shall be commenced and tried in the province where the property or any part thereof lies."cralaw virtua1aw library

In De la Cruz v. Seminary of the Archdiocese of Manila (18 Phil., 330) this Court, quoting from Neill v. Owen, 3 Tex. 145, laid the rule on venue to be as follows:jgc:chanrobles.com.ph

"If the action is founded on privity of contract between the parties, then the action, whether debt or covenant, is transitory. But if there is no privity of contract, and the action is founded on privity of estate only, such as a covenant that runs with the land in the hands of the remove grantees, then the action is local and must be brought in the country wherein the land lies." (Italics supplied)

The action brought by respondent Lim falls squarely under the second rule given in the quoted paragraph. It is uncontested that the Land Tenure Administration was neither a party to the lease contract nor an assignee thereof. The Land Tenure Administration is sued on the theory that it is duty bound to recognize and respect Lim’s rights as lessee, the implied premise being that the lease operates against the new owner of the land leased even if the lease is not recorded, because the Land Tenure Administration’s knowledge of the existence of the lease supplies the want of registration. Hence, petitioners correctly contend that Lim’s action must be brought in the Court of First Instance of Nueva Ecija, the province where the land lies, and not in the courts of the City of Manila.

Wherefore, the petition for a writ of certiorari is granted. The order of December 20, 1957, appealed from, is set aside and the action instituted by Alejandro T. Lim in the Court of First Instance of Manila (Civil Case No. 34453) is ordered dismissed, but without prejudice to its renewal in the Court of First Instance of Nueva Ecija. The preliminary injunction heretofore issued by this Court is made permanent. Costs against respondent Lim. So ordered.

Paras, C.J., Bengzon, Montemayor, Bautista Angelo, Labrador, Concepción, Endencia, Barrera and Gutiérrez David, JJ., concur.

1. APPEALS; FACTUAL FINDING ON COUNTERCLAIM; JURISDICTION OF COURT OF APPEALS. — Where the trial court not merely dismissed the complaint because it found that the action had already prescribed, but after proceeding to receive evidence on defendant’s counterclaim, ruled that the preponderance of evidence disclosed that certain imputations contained in the complaint were false, malicious and defamatory, which caused defendants mental anguish, besmirched reputation, wounded feelings, moral shock and similar injuries, and ordered plaintiffs to pay moral damages to defendants, the case comes within the appellate jurisdiction of the Court of Appeals, because the finding of the trial court on the counterclaim, which is now assigned as error, is one of the fact.

Plaintiffs brought this action against defendants before the Court of First Instance of Samar to recover the ownership and possession of a parcel of land and the damages which they claimed to have suffered as a result of their dispossession. Defendants answered the complaint setting up the defense that plaintiffs’ cause of action has already prescribed. They also set up a counterclaim for moral damages and attorneys’ fees in the total sum of P25,000.00.

When the case was called for trial, counsel for defendants moved to dismiss the complaint on the ground that the action of plaintiffs, being based on fraud, has already prescribed, and finding the same well taken, the court dismissed the complaint, but allowed defendants to present evidence on their counterclaim. Thereafter the court rendered judgment condemning plaintiffs to pay, jointly and severally, defendants the amount of P5,000.00 as moral damages and the amount of P500.00 as attorneys’ fees. From this decision plaintiffs appealed to this Court alleging as main error that the lower court dismissed the complaint on the ground of prescription.

The complaint alleges that plaintiffs are the exclusive and absolute owners of a parcel of land situated in Taft, Samar, by virtue of a decision rendered in their favor in a civil case; that sometime in 1946, the land became tax delinquent and so plaintiffs approached one Escolastico Chicano to request him to pay the same on condition that they will mutually share its produce and administration until after he is reimbursed of what he would pay; that having Chicano agreed to the proposal, he had a written agreement prepared which purportedly contained their understanding and in this belief the same was thumbmarked by plaintiffs who were not given a chance to read its contents nor given any copy of the document because they were assured that everything was in order; that plaintiffs affixed their signatures on said document relying on the good faith of defendants and on their assurance that what was orally agreed upon between them was embodied in that document; that plaintiffs, however, learned and discovered the fraud committed against them only in November, 1950, after the death of Escolastico Chicano, when they were driven by force and intimidation from the possession of the land; and that they repeatedly demanded from defendants that they be restored to its possession and when they refused they brought the present action. Plaintiff instituted the action on February 11, 1957.

Appellants’ theory is that inasmuch as the purpose of their action is to recover the ownership and possession of real property, the same can be brought within 10 years after the cause of action accrues, which period has not yet expired considering that they were dispossessed of the property in 1950. Appellees, on the other hand, contend that since their right to recover the property is based on fraud, the same should be brought within 4 years from its discovery. The trial court sustained this theory of appellees and dismissed the complaint.

But the trial court did not merely dismiss the complaint but proceeded to receive evidence on the counterclaim of defendants. In this respect, the trial court said: "With respect to the counterclaim alleged in the amended answer of the said defendants, the preponderance of evidence discloses that the imputations contained in the complaint that the late Escolastico G. Chicano, husband of Coleta de Chicano and father of Elpidio Chicano had acquired the land in question from the plaintiffs through fraud and that the said defendants’ taking advantage of the ignorance of the plaintiffs herein managed fraudulently to transfer the tax declaration of the land in question in the name of the plaintiffs to the name of defendants are false, malicious and defamatory to the memory of the late Escolastico Chicano and the reputation of his heirs, Elpidio Chicano and Coleta de Chicano, thus causing the latter mental anguish, besmirched reputation, wounded feelings, moral shocks and similar injuries", and accordingly, ordered plaintiffs to pay the sum of P5,000.00 as moral damages.

Considering that the foregoing finding is a question of fact which involves an evaluation of the evidence, and the same is now assigned as error, we are jurisdiction of the Court of Appeals.

Wherefore, it is ordered that this case be certified to the Court of Appeals for adjudication in accordance with law.

Paras, C.J., Bengzon, Labrador, Concepción, Reyes, J.B.L. Endencia, Barrera and Gutiérrez David, JJ., concur.

1. EMPLOYEES AND EMPLOYEES; RECOVERY OF SALARY DIFFERENTIALS BASED ON AGREEMENT; WHEN CLAIM DESERVES PREFERENTIAL CONSIDERATION. — The action taken by the employees and laborers of a company to recover their salary differentials on the basis of a memorandum of agreement executed between the company and the labor union with which the employees and laborers were affiliated, to the effect that any wage differential would be paid to them when "funds for the purpose are available", cannot be considered premature simply because the company was then losing in its business. The company, with the exercise of a more sympathetic judgment, could have appropriated the necessary amount out of its funds even if it had to pay some peremptory obligations, for this is a claim which deserves preferential consideration because it is owed to the poor.

On August 7, 1950, plaintiffs filed a complaint before the Municipal Court of Manila praying that defendant be ordered to pay them their respective salary differentials resulting from the standardization of salaries of defendant’s employees, among whom were plaintiffs, for the period of February 1 to June 30, 1949 in the total amount of P7,878.15. The action was based on a memorandum of agreement executed on November 21, 1948 between defendant and two labor unions representing its employees and laborers. Paragraph 2 of said agreement provides: ". . . upon the exhaustion of the amount of P400,000.00, the employees and laborers affected by the standardized plan will receive their present salaries provided that any wage differential from date of exhaustion will be paid when funds for the purpose are available."cralaw virtua1aw library

On September 12, 1956, defendant filed a motion to dismiss which was denied, and thereafter, it filed its answer wherein it reiterated its prayer for dismissal on the ground, among others, that the clause "provided that any wage differential from date of exhaustion will be paid when funds for the purpose are available" was understood by the parties to mean that the payment of said salary differentials will be made when the company is no longer losing in its operations, and that, since the obligation assumed by defendant is subject to a suspensive condition which had not yet happened, said obligation is not yet due and demandable; hence, the present action is premature.

On December 26, 1956, the municipal court rendered judgment in favor of plaintiffs ordering defendant to appropriate the sum of P6,922.81 not later than March 31, 1957 to be paid to plaintiffs, with legal interest thereon, and to pay the costs. Defendant appealed to the court of first instance, where the case was tried de novo, and having defendant succeeded in proving that it only realized profits during the fiscal year 1956-1957 the court found the action premature and dismissed the complaint. Hence the present appeal.

The main basis on which the decision of the trial court dismissing the case is predicated is that the action taken by appellants in the municipal court in August, 1956 is premature it appearing that defendant company only realized profits in its operations during the fiscal year 1956-1957 making in this respect the following comment:jgc:chanrobles.com.ph

"It was shown that the company had only realized profits in the fiscal year 1956-1957 as shown by Exhibit 1 and consequently, the claim of the plaintiffs for the payment of their salary differential in accordance with the memorandum agreement, Exhibit A, did not take place until the fiscal year 1956-57. Consequently, the fixing by the lower court of the obligation on the part of the defendant to appropriate the amount to pay the said salary differential not later than March 31, 1957 is premature because they filed this case in the Municipal Court in August, 1956."cralaw virtua1aw library

The above finding is undoubtedly based upon the theory, as entertained by appellee, that the clause "provided that any wage differential from the date of exhaustion will be paid when funds for the purpose are available" was understood by the parties to mean that the payment of the salary differentials will be made when the company is no longer losing in its operations, or when its financial position would warrant the payment of said salary differentials, and since it was here shown that appellee realized profits only in the fiscal year 1956-1957, the instant action is premature.

We submit that the foregoing interpretation runs counter to the opinion expressed by this Court on a similar case wherein another group of employees of appellee tried to recover the balance of their salary differentials under the same memorandum of agreement on which appellants now base their claim in the present case (Tiglao, Et. Al. v. The Manila Railroad Company, 98 Phil., 181; 52 Off., Gaz., [1] 179). Indeed, in that case, in refusing to pay the salary differentials, the company did not repudiate the agreement, but merely contended that pursuant to its terms the salary differentials would only be payable when "funds for the purpose of available," which, as counsel contends, was not then the case because the company was then losing in its business. In fact, the company presented as evidence some summary statements of its accounting department showing that it has sustained losses during the fiscal year ending June 30, 1953 and during the month of July next following.

In dismissing this contention as untenable, this Court made the following comment: "Those statements, however, do not necessarily prove that, in a multimillion peso business such as that of the defendant, funds for the payment of a debt of P7,275.00 due the plaintiffs could not have been raised or made available because of the losses suffered in one year and one month. The memorandum of agreement does not stipulate that the salary differentials shall be paid only from surplus profits. In fact the agreement provides that the standardized salaries — with the resulting salary differentials, naturally — are ’to be carried in all the subsequent budgets of the company.’ And we think it may be admitted that in a going concern the availability of funds for a particular purpose is a matter that does not necessarily depend upon the case position of the company by rather upon the judgment of its board of directors in the choice of projects, measures or expenditures that should be given preference or priority, or in the choice between alternatives. So if defendant was able to raise or appropriate funds to meet other obligations notwithstanding the fact that it was losing, we think it could have done likewise with respect to its debt to the plaintiffs, an obligation which is deserving of preferential attention because it is owned to the poor."cralaw virtua1aw library

The same observation may be made with regard to the claim of herein appellants which only amounts to the relatively small sum of P6,922.81 which appellee, with the exercise of a more sympathetic judgment, could have appropriated out of its funds even if it had to pay some observed, this is a claim which deserves preferential consideration because it is owned to the poor. We find, therefore, incorrect the filing of the trial court that this action is premature on the mere ground that appellee has realized profits in its operation only in the fiscal year 1956-1957.

Wherefore, the decision appealed from is reversed. Instead, judgment is hereby rendered ordering appellee to pay appellant the sum of P6,922.81, with legal interest thereon from the date of the filing of the complaint, without pronouncement as to costs.

Paras, C.J., Bengzon, Montemayor, Labrador, Concepción, Reyes, J. B. L., Endencia, Barrera and Gutiérrez David, JJ., concur.

1. JUDGMENTS; COUNTERCLAIM IN A PRIOR CASE; WHEN THERE IS RES JUDICATA. — The decision rendered in a former case where a counterclaim, which in substance is the basis of the present action, was already in issue, has the effect of a prior judgment in the present case under the principle of res judicata.

2. ID.; ID.; MATTERS AS TO WHICH AN ADJUDICATION IS FINALLY CONCLUSIVE. — An adjudication is finally conclusive not only as to the matter actually determined, but as to every other matter which the parties might have litigated and have had decided incident to or essentially connected with the subject-matter of obligation, and every matter coming within the legitimate purview of the original action, both with respect to matters of claim and of defense (2 Freeman on Judgments, Sections 574).

This is an appeal from an order of the Court of First Instance of Laguna dismissing the complaint filed by plaintiff against defendant for damages in Civil Case No. B-132. The dismissal is predicated on the ground that the complaint is barred by a prior judgment between the same parties.

The facts which gave rise to the present case are: On December 15, 1953, Eulogio Lapitan, now defendant filed an action against Alfredo Pua, now plaintiff, before the Court of First Instance of Laguna for specific performance and for damages. In the complaint, it was alleged that Pua, taking advantage of the ignorance and confidence of Lapitan, and by the use of fraud, deceit and misrepresentation, caused Lapitan and his wife to sign a document which purported to be a lease agreement when their true understanding was that they would enter into a partnership contract whereby they would share alike the profits that may be derived therefrom, and that because of said fraud, deceit and misrepresentation, Lapitan and his family "suffered mental anguish, wounded their feelings, besmirched their reputation in the community, and consequently the plaintiff suffered moral damages in the amount of P5,000.00" (Case No. 9739).

Pua answered the complaint denying the imputation of fraud, deceit and misrepresentation contained therein and, as a counterclaim, alleged that "as a result of the unjustified and unwarranted filing of the complaint by the plaintiff, the defendant who has never been involved on any court litigation and who was quietly and lawfully pursuing a legal and decent business activity, and who has lived up to the terms of the lease agreement, suffered mental torture and anguish, his reputation having been adversely affected, thereby suffering in the form of moral damages to the tune of P10,000.00." He also prayed for attorney’s fees in the amount of P1,000.00.

After trial, the court rendered judgment in favor of Lapitan declaring that the contract entered into between the parties was one of partnership and, therefore, it ordered defendant to make a liquidation of the income derived from the business within 30 days from the date the judgment becomes final and to pay P500.00 as attorneys’ fees. But on appeal to the Court of Appeals, the appellate court reversed the judgment and dismissed the complaint with costs against Lapitan. The court, however, did not make any mention of the counterclaim of Pua.

It is as a result of the decision of the Court of Appeals justifying the claim of Alfredo Pua to the effect that the contract entered into between him and Eulagio Lapitan is one of lease and not of partnership which implies that the imputations of fraud, deceit and misrepresentation hurled against him by Lapitan were not true, that Pua commenced the present action before the same court of first instance for actual and moral damages and attorneys’ fees in the total sum of P49,500.00.

The main basis of the complaint is that "by reason of defendant’s malicious imputations and false accusations, that plaintiff exercised fraud, misrepresentation and deceit in obtaining defendant and his wife to sign a lease agreement in Civil Case No. 9739, plaintiff being then a successful businessman or merchant suffered embarrassment, loss of prestige towards his patrons and the public thereby regarding his business; standing; goodwill; trust, confidence and commercial credit." Against this complaint defendant filed a motion to dismiss on the ground that its cause of action is barred by a prior judgment, to which plaintiff filed a written opposition, and after proper hearing, the court found the motion well taken, and dismissed the complaint. Hence this appeal.

There is no merit in the appeal. It should be noted that when appellee filed before the same court an action for specific performance and damages against appellant (Civil Case No. 979), wherein the former imputed to the latter certain acts of fraud, deceit and misrepresentation in connection with the execution of an alleged contract entered into between them, the latter, not only set up specific defenses, but a counterclaim wherein he claimed the sum of P10,000.00 as moral damages and P1,000.00 as attorneys’ fees, the basis of his counterclaim being that because of the imputation of fraud, deceit and misrepresentation made against him by appellee, he suffered mental torture and anguish, while his reputation has been adversely affected, for which reason he asked that he be awarded moral damages in the amount above stated. The trial court in that case rendered judgment against appellant, whereupon he appealed to the Court of Appeals, however, did not mention anything about the counterclaim of appellant for it merely dismissed the case. It can therefore be said that appellant won in that case in the sense that he succeeded in having the case of appellee thrown out of court though not to the extent of obtaining a judgment on his counterclaim. Why he failed in his counterclaim the record does not shoe, but it cannot be denied that such counterclaim was then in issue and could have been passed upon by the court had he pressed action thereon. Apparently, he waived his right to such counterclaim, or the court found no evidence to support it, and for that reason the same was passed up sub silentio by the court. If such counterclaim, which in substance is the basis of the present action of appellant, was already in issue in the former case, it is logical that the decision rendered therein has now the effect of a prior judgment in the present under the principle of res judicata. Such being the case, we cannot but hold that the trial court acted correctly in dismissing the complaint on that ground.

In Bingham v. Kearney, 136 Cal., 175, cited in Palanca v. Quiros, 10 Phil., 360, the Court said:jgc:chanrobles.com.ph

"It is a rule, long recognized in this country, that a judgment between the same parties is conclusive, not only as to the subject- matter in controversy in the action upon which it is based but also in all other actions involving the same question, and upon all matters involved in the issues which might have been litigated and decided in the case, the presumption being that all such issues were met and decided. It is the policy of the law to put an end to litigation, and to aid the vigilant and not those who sleep upon their rights. It is not the policy of the law to allow a new and different suit between the same parties, concerning the same subject-matter, that has already been litigated; neither will the law allow the parties to trifle with the courts by piecemeal litigation."cralaw virtua1aw library

On the strength of the above ruling, it is clear that "an adjudication is finally conclusive not only as to the matter actually determined, but as to every other matter which the parties might have litigated and have had decided incident to or essentially connected with the subject-matter of litigation, and every matter coming within the legitimate purview of the original action, both with respect to matter of claim and of defense" (2 Freeman on Judgments, Section 574). 1 The purpose of this ruling is to avoid multiplicity of actions.

Wherefore, the order appealed form is affirmed, with costs against Appellant.

Paras, C.J., Bengzon, Padilla, Montemayor, Labrador, Concepción, Reyes, J. B. L., Endencia, Barrera and Gutiérrez David, JJ., concur.

Endnotes:

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1. Miranda v. Tiangco, Et Al., 96 Phil., 526; 51 Off. Gaz., (3) 1366; NAMARCO v. Judge Macadaeg, 98 Phil., 185; 52 Off. Gaz., 182.

1. WILLS; TESTATRIX’S FAILURE TO SIGN LEFT MARGIN. — Where a will consist of two pages and the last page had been duly signed by the testatrix and the three testimonial witnesses who also signed the first page but the testatrix failed to sign the left margin of the first page, Held: that the will was not executed in accordance with law. Section 618 of Act 190, as amended, requires that the testator sign the will and each and every page thereof in the presence of the testator and of each other, which requirement should be expressed in the attestation clause. This requirement is mandatory, for failure to comply with it is fatal to the validity of the will (Rodriguez v. Alcala, 55 Phil., 150). It has been held that "statutes prescribing the formalities to be observed in the execution of wills are very strictly construed.

This concerns the probate of a document which purports to be the last will and testament of one Petronila Tampoy. After the petition was published in accordance with law and petitioner had presented oral and documentary evidence, the trial court denied the petition on the ground that the left hand margin of the first page of the will does not bear the thumbmark of the testatrix. Petitioner appealed from this ruling but the Court of Appeals certified the case to us because it involves purely a question of law.

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

"De las pruebas resulta que Petronila Tampoy, ya viuda y sin hijos, rogó a Bonifacio Miñoza que la leyera el testamento Exhibito A y la explicara su contenido en su casa en la calle San Miguel, del municipio de Argao, provincia de Ceb

1. EVIDENCE; CREDIBILITY; MISTAKE OF WITNESSES AS TO EXACT SPOTS OF BLOWS ON DECEASED NOT FATAL TO TESTIMONY. — The two eye-witnesses who testified that they saw one of the accused beat the deceased on the back and on the nape, although the medical officer who examined the deceased did not find any ecchymosis, discoloration or laceration at the back and nape, could not be expected to tell the exact spots where the blows had landed, considering that it was nighttime and those fleeting moments cannot be recalled with exact precision.

2. MURDER; PRINCIPALS BY DIRECT PARTICIPATION; ACTS THAT INDICATE UNITY OF PURPOSE. — Where one of the accused accompanied the other in going to the houses of the deceased, held both hands of the deceased while his co-accused was hitting her and pulled the deceased by the hands while his co-accused continued clubbing her, there was clearly a concert of design between the two accused or unity of purpose in the execution of the act. Hence, both were principals.

3. ID.; AGGRAVATING CIRCUMSTANCES; DISREGARD OF SEX AND AGE WHERE DECEASED WAS FRAIL AND OLD WOMAN. — Where the evidence positively demonstrates that the accused disregarded the age and sex of the deceased, it appearing that she was a frail woman 65 years of age, weighing only around 100 pounds and only 4 feet 8 inches in height, while the accused were young men, the aggravating circumstance of disregard of sex and age should be considered against them.

4. ID.; MITIGATING CIRCUMSTANCES; OBFUSCATION DUE TO BELIEF OF ACCUSED THAT DECEASED WAS A WITCH. — The mitigating circumstances of obfuscation should be appreciated in favor of the accused who committed murder in the belief that the deceased had cast a spell of witchcraft upon the wife of one of them which caused her serious illness.

Appeal from the decision of the Court of First Instance of Abra convicting Rufelino Zapata and Fernandico Tubadeza of the crime of murder, as principal and accomplice, respectively, and sentencing the former to reclusion perpetua, and the latter to an indeterminate penalty of from 6 years, 1 month and 11 days of prisión mayor, as minimum, to 12 years, 5 months and 11 days of reclusión temporal, as maximum, both to indemnify the heirs of the deceased in the sum of P6,000.

It appears from the evidence on record that on the evening of February 15, 1951, at about eight o’clock, while Fausta Tubadeza, a sexagenarian, was cutting firewood near her house at the barrio of Camcamiring, municipality of Dolores, Abra, appellants Rufelino Zapata and Fernandico Tubadeza approached her, and Zapata, after telling her ’You are the old woman who bewitched my wife," repeatedly beat her with a piece of wood about 2 1/2 feet long and 3 inches in diameter, on different parts of her body, while Fernandico Tubadeza dragged her by the arms. Her husband Mariano Bondame, also a sexagenarian, attracted by the noise outside their house, looked out of the window and saw his wife being dragged by Fernandico Tubadeza and clubbed by Rufelino Zapata. Mariano Bondame immediately set to go down to help his wife, but Zapata met him at the stairs and threatened him bodily harm should he intervene. Bondame helplessly saw his wife being beaten and dragged towards the direction of the house of councilor Simeon Tubadeza. Bondame then went to the house of Estanislao Elvena to ask for help and followed appellants to the house of councilor Tubadeza, where he saw his wife already sprawled on the yard uttering, "I am going to die now," so he approached and embraced her. Fausta then told her husband she had been maltreated and that some of her teeth were broken.

The evidence further shows that Fausta was taken to the house of councilor Tubadeza, who told appellant Zapata and one Florencio Pilor to go to Fausta’s house, and upon their return they brought a bottle of wine and a bottle of oil and told the councilor, "Here are the ingredients for witchcraft that we took from her house." The councilor then wrote on a piece of paper (Exhibit A) a statement that Fausta practiced witchcraft on Zapata’s wife and had the same thumbmarked by Fausta. Likewise Bondame was forced to sign it. Fausta died that same evening at the house of councilor Tubadeza.

Dr. Paterno Millare who made a post-mortem examination of Fausta’s body, found that the cause of her death was:jgc:chanrobles.com.ph

"Fracture, compound, complicating, Rib 5th, postero-lateral portion, right; Hemorrhage, internal, acute; Wound, lacerated, lung, right; and Contusion, multiple and ecchymosis, abrasion evulsion, teeth, upper incisor, canine, jaw, left, and etc."cralaw virtua1aw library

Appellant Fernandico Tubadeza submitted a defense of alibi, attempting to show that on the night of February 15, 1951, he was in Bantay, Ilocos Sur, in the house of the parents of his wife; while Rufelino Zapata offered the following defense: That on the night in question, his wife Carolina Mercurio was seriously ill; that in view of the barking of dogs and whining of pigs in his yard he, went down and saw Fausta Tubadeza, who had a reputation in their barrio of being a witch, run away; that while he was chasing her, she fell face down; that when he overtook her, she confessed that she had bewitched his wife, whereupon Zapata took her to the house of councilor Simeon Tubadeza; that the latter, being a near relative of Fausta and ashamed of her admission of having practiced witchcraft, kicked her a number of times in her right side; that councilor Tubadeza then ordered appellant Zapata to fetch her husband Mariano Bondame, and when Bondame arrived and knew of his wife’s admission, he became angry and also kicked her a number of times on the right side, below the armpit; and that councilor Tubadeza then wrote affidavit Exhibit A whereby Fausta assumed responsibility should Zapata’s wife die.

By and large, the issue in this appeal is credibility of witnesses.

Referring to the alibi put up by Fernandico Tubadeza, we give it little or no evidence at all not only because this kind of defense can be fittingly conceived and conveniently adjusted to suit any time and place ad libitum but that his witnesses are all his relatives. On the other hand, prosecution witnesses Salvador Turqueza, Relito Claro and Mariano Bondame positively identified and pointed him as the one who dragged the deceased while his co-defendant Rufelino Zapata clubbed her.

Appellant Zapata’s defense that the deceased died from the hands of Simeon Tubadeza, Florendo Pilor and her own husband Mariano Bondame, who all kicked her, is likewise unworthy of belief. Although it is true that, originally, Simeon Tubadeza and Florendo Pilor were included as defendants in the complaint filed before the justice of the peace, upon reinvestigation of the case, however, the same was dismissed as against them for lack of evidence and the fiscal had to exclude them from the information. Besides, Mariano Bondame was not among those originally indicted. It is hard to believe that Mariano Bondame, the aged husband of the deceased, would ever attempt to harm his wife, let alone kick her several times in the presence of many people, just for the flimsy reason of having admitted that she was a witch. On the contrary, Bondame positively testified that he tried in vain to rescue his wife from the hands of appellants when he saw her being beaten up, only to be confronted by Zapata at the stairs and threatened with bodily harm.

Zapata further contends that prosecution witnesses Salvador Turqueza and Relito Claro who testified having seen him beat the deceased on the back and on the nape, did not tell the truth because Dr. Millare contradicted them by saying that he did not find any ecchymosis, discoloration or laceration at the back and nape. We do not, however find any inconsistency between the two versions, rather they complement each other, for while these eye witnesses said that they saw appellant Zapata beat the deceased on the back, Dr. Millare, in his post-mortem examination found:jgc:chanrobles.com.ph

"External: The body is cold and in rigor mortis. The height is about 4 ft. and 8 inches. The weight is about 100 pounds more or less. There is presence of contusions and abrasions with ecchymosis on the left face and with avulsion of the teeth, upper incisor and canine, left upper jaw. Presence of a compound complicating fracture of the 5th rib at the right postero-lateral portion of the chest wall. Presence of contusions on the anterior portions of the legs and thighs.

"Internal: On opening the chest wall, there is a fracture, compound, complicating, of the 5th rib, right, postero-lateral portion of the chest; with wound, lacerated on the right lung and internal hemorrhage of the right-lung. There is approximately 150 cc of unclotted blood on the right chest cavity. Heart and left lung are apparently normal"

which evidently shows that the deceased was beaten mercilessly not only on the head but also on different parts of the body as shown by the avulsion of the teeth, abrasions and ecchymosis on the left face, the compound fracture of the 5th rib, on the postero-lateral portion. These two eyewitnesses could not be expected to tell the exact spots where the blows had landed, considering that it was nighttime and those fleeting moments cannot be recalled with exact precision. At all events, both witnesses are agreed that it was appellant Zapata who clubbed the deceased.

The Solicitor-General points out that Fernandico Tubadeza should not be held merely as an accomplice as found by the lower court but as coprincipal, because.

"It is to be observed that while it may be true as the trial court has stated, that ’there is no showing in what manner Fernandico took part in the torture, so much so that the evidence discloses that only the accused Rufelino Zapata was provided with a club,’ yet the established facts that (a) Fernandico accompanied Zapata in going to the house of the deceased; (b) he held both hands of the deceased while Zapata was hitting her and (c) he pulled the deceased by the hands while Zapata continued clubbing her clearly show the existence of concert of design between the two. At any rate, even granting that there existed no previous understanding between the two appellants, yet it may be implied from the acts of Fernandico, as stated above, that they had the same unity of purpose in the execution of the act (People v. Ging Sam, Et. Al. 94 Phil., 139; People v. Binasing, Et Al., 98 Phil., 902).

We agree with the Solicitor-General.

We likewise agree with his observation that evident premeditation is not present in this case, but that abuse of superior strength should be taken in its stead as the qualifying circumstance for murder, considering that the deceased was a frail and undersized woman sexagenarian.

As to the aggravating circumstances of disregard of sex and age and nocturnity alleged in the information, we find that while the evidence fails to show that nighttime was purposely sought by appellants to commit the crime, it positively demonstrates that they disregarded the age and sex of the deceased, it appearing that she was a frail woman of 65, weighing only around 100 pounds and only 4 feet and 8 inches in height, while Zapata and Tubadeza were 32 and 27 years of age, respectively, when the crime was committed.

On the other hand, we believe that appellants are entitled to the mitigating circumstance of lack of intention to commit so grave a wrong as that committed, as it was evident that they merely wanted to denounce her as a witch before councilor Tubadeza when she was beaten and dragged to the councilor’s house, but that she received a beating more than she could take, for which she died that same evening. In addition, the mitigating circumstance of obfuscation should be appreciated in their favor, as we so held in U. S. v. Macalintal, 2 Phil., 448, and People v. Balneg, Et Al., 79 Phil., 805, for it clearly appears that appellants committed the crime in the belief that the deceased had cast a spell of witchcraft upon the wife of Zapata which caused her serious illness.

Considering that there are two mitigating circumstances as against one aggravating in the case, appellants are entitled to the minimum penalty prescribed by Art. 248 of the Revised Penal Code which is reclusión temporal in its maximum period. Applying the Indeterminate Sentence Law, the penalty that should be imposed is 10 years and 1 day of prisión mayor as minimum, and 17 years, 4 months and 1 day of reclusión temporal as maximum.

With the above modifications, the decision appealed from is affirmed in all other respects.

Paras, C.J., Bengzon, Montemayor, Bautista Angelo, Labrador, Concepción, Reyes, J. B. L., Barrera and Gutiérrez David, JJ., concur.

1. ACTIONS; ACQUITTAL OF EMPLOYER IN CRIMINAL ACTION; EFFECT ON CIVIL ACTION AGAINST EMPLOYER. — The acquittal of an employee in a criminal case because his criminal negligence was not proved, cannot be invoked as a defense in an action for damages against the employer based on Articles 1902 and 1903 of the old Civil Code, because under the said articles the liability of the employer is primary and direct, based upon his own negligence (culpa aquiliana) and not on that of his employees or servants.

2. PLEADING AND PRACTICE; PRESENTATION OF EVIDENCE ON ISSUE NOT RAISED IN PLEADINGS; WAIVER OF OBJECTION. — Although a party was merely referred to in the complaint as employer, and was not at all charged with negligence, if, as in the case at bar, it did not object to the presentation of evidence, during the trial, as to its negligent acts, and it even introduced evidence of its own tending to show that it had employed the diligence of a good father of a family to prevent the damage, the issue must be considered as if it had been raised on the pleadings.

On May 3, 1949, Julito Sto. Domingo and Igmidio Rico, employees of the Standard Vacuum Oil Company (hereinafter referred to as STANVAC), were delivering gasoline from a tank trailer to the Rural Transit Co. at its garage at Rizal Avenue Extension, City of Manila. While the gasoline was being discharged to a subterranean tank, the discharge hose suddenly caught fire. It spread to the rear part of the tank truck, and as somebody shouted, "Fire, fire!" Sto. Domingo, who was then busy writing his report inside the cab of the truck, went down to investigate. He saw that his helper, Rico, had already removed the hose and closed the cap screw of the tank. Obeying the signal of Rico, who sustained burns on his face, Sto. Domingo drove out the truck from the gasoline station compound towards Rizal Avenue Extension. But upon reaching the street, he abandoned the truck without setting its parking brake. Consequently, the vehicle continued moving to the opposite side of the street causing three houses on that side — one of them belonging to Anita Tan — to be burned and destroyed.

Julito Sto. Domingo and Igmidio Rico were subsequently charged with arson through reckless imprudence in the Court of First Instance of Manila. Both were, however, acquitted after due trial because their negligence was not proven and nobody knew what caused or started the fire, it being just "an unfortunate accident."cralaw virtua1aw library

Anita Tan then filed a complaint in the Court of First Instance of Manila against STANVAC, Julito Sto. Domingo and Igmidio Rico, seeking to recover the sum of P12,000.00 which was the cost of the construction and repair of her house, plus legal interests. This complaint was later amended to ask for actual and moral damages and to include as defendant the Rural Transit Company. Upon defendants’ motion the complaint was dismissed. But on appeal, the order of dismissal was affirmed by this Court only with respect to defendants Sto. Domingo and Rico, and reversed with regard to the other two defendants. (Anita Tan v. Standard Vacuum Oil Co., Et Al., 91 Phil., 672.)

In the court a quo after the case had been remanded, the complaint was finally amended to include additional party defendants and to substitute the name of Rural Transit Co. with Bachrach Motor Co., Inc., it having been found that the former was but a garage and gasoline station owned and operated on the latter.

After the issues had been joined and several hearings held, the trial court rendered judgment, the dispositive part of which reads:jgc:chanrobles.com.ph

"In view of all the foregoing considerations, an alternative and conditional judgment is hereby rendered as follows:jgc:chanrobles.com.ph

"1. Under the first cause of action for culpa aquiliana, the defendants Standard Vacuum Oil Company and the Bachrach Motor Company are hereby ordered to pay the plaintiff, jointly and severally, (a) the sum of P10,630.80 for what plaintiff has spent in the reconstruction of her house No. 2540, Rizal Avenue Extension, this City, with interest thereon at the rate of 6% per annum from January 6, 1950, the date of the filing of the original complaint in this case; (b) P2,700.00 for rentals which she failed to receive while said house was under construction; (c) P1,000.00 for moral damages; (d) fifteen per cent (15%) of the amounts mentioned in (a), (b) and (c) of this paragraph for attorney’s fees; and (d) to pay the costs;

"2. Under the second cause of action and in pursuance of the provisions of Art. 101, 2nd par. of the Revised Penal Code, defendants Pilar T. Bautista, Milagros G. Tinio, and the Heirs of the deceased Inocencio Gochangco, to wit, Severina L. Gochangco, Conrado Gochangco, Segundina Alcazar and Noemi G. Palma (these heirs as one), are hereby ordered to pay plaintiff the same amounts which appear in No. 1 of the dispositive part of this decision in proportion to the values of their respective properties as above set forth but, if this judgment is executed against them and they do pay, their payment shall be without prejudice to seek proportional reimbursement from defendants Gloria Posadas Arkonel and the Bachrach Motor Company, whose properties have also been saved from the conflagration;

"3. Plaintiff shall not be entitled to both of the remedies mentioned in Nos. 1 and 2 hereof, nor can the defendants in either number seek reimbursement from those in the other."cralaw virtua1aw library

From that judgment, the two defendant companies appealed to the Court of Appeals. On September 18, 1957, that court rendered its decision absolving Bachrach Motor Co., Inc., from any liability, but affirming the appealed judgment with respect to STANVAC, with the modification that it shall pay plaintiff Anita Tan only the amount of P13,036.60, plus legal interest. STANVAC in due time filed a motion for reconsideration, but the same having been denied, it filed the present petition for review on certiorari.

The Court of Appeals in the decision complained of expressly found that "the record of the case at bar is replete with evidence showing that if the fire that gutted the house of Anita Tan was not caused by Sto. Domingo’s and Rico’s criminal negligence, evidently it was so caused by their fault and lack of equanimity in the presence of the fire which suddenly and for unknown reasons sparked in the discharge hose and which could have been put out by the proper and opportune use of the fire extinguishers with which the tank-trailer was equipped." It also found that there was negligence on the part of the employer, herein petitioner STANVAC itself, in the direction or supervision of its two employees. To better show the acts or omissions constituting the fault or negligence of petitioner and its two employees, the pertinent portion of the decision of the Court of Appeals is hereunder quoted as follows:jgc:chanrobles.com.ph

"It is admitted that the Rural Transit Station had a shaded portion and an open cemented space. The main opening of its subterranean tank was nearer the shaded part than Rizal Avenue Extension. It is presumed that during the discharge operation the tank-trailer was parked in the middle of the open space which had an area of 65 feet by 55 feet (Exh.’Q’). Hence, had the tank-trailer truck been left in that open space, appellee’s house would not have been burned nor would an explosion of the underground tank have occurred because, according to Sto. Domingo himself, when he drove the truck out to the street, Rico had already removed the hose from the opening of said tank and closed it with the cap screw (t.s.n., p. 100 Santiago). This conclusion is fully sustained by then Acting Deputy Chief of the Manila Fire Department, Braulio Aloña who, when asked if the subterranean tank would have exploded had not the tank-trailer been removed from the place where it caught fire, categorically answered, ’No, señor, no explotaria.’ (t.s.n., p. 9 — Quimpo.)

"It is likewise admitted that the two fire extinguishers which the tank-trailer carried (appellant’s brief, p. 24), were not detached and put to use by Sto. Domingo and Rico. Instead, in open violation of condition No. 8 of the Permit, for the Transportation of Combustible by Tank Truck (Exh.’X-2’) — which provides that ’Whenever refilling or filling work is conducted, fire extinguisher must be on hand and readied for fire emergency by an experienced operator until the fill or discharge operation is completed’ — Sto. Domingo went into the cab of the truck to write his report while Rico watched with empty hands the unloading of the gasoline. Had both employees of appellant oil company complied with the condition just quoted by closely observing the discharge operation with the fire extinguishers in their hands ready for use, they could have used these instruments instantly and would certainly have been able to put out the spark that ignited the hose during the discharge operation - just as the foreman of Rural Transit Station succeeded in putting out the fire at the mouth of the underground tank by the proper usage of the station’s only extinguisher.

"The above transcribed condition speaks of an ’experienced operator’ who must use and operate the fire extinguisher. Yet, Sto. Domingo, who, according to appellant’s evidence, had some training and took periodic refresher courses on the proper way of making delivery of its highly inflammable products by means of tank trailer, including the use and operation of the fire extinguisher, did not personally attend to the discharge of the gasoline but entrusted this very delicate and most risky task to Igmidio Rico, who had no training at all — or if he had some, it was not proven during the trial.

"While the discharge of the gasoline to the underground tank was undertaken, there were many persons waiting for the passenger truck ’about two or three meters’ from the tank-trailer truck, milling about it (t.s.n., pp. 9 and 10 - Garcia). Even Sto. Domingo admitted that when he stopped writing and turned around because of the shout of ’fire, fire!’ he saw a woman at the left side of his truck who ran towards a bus inside the Rural Transit garage (Exh.’N-2’). It was indeed lack of foresight, bordering on culpable negligence, on the part of Sto. Domingo and Rico to have allowed many persons to roam around near the tank-trailer while the discharge of the gasoline was under way, considering the high volatility and inflammability of this liquid.

"Sixta Lazaro, who lived directly across the street from the Rural Transit Station, declared: ’On May 3, 1949. between 3 and 3:30 o’clock in the afternoon I was picking clothes stretched under the sun and I heard somebody shouting "sunog, sunog" ("fire, fire"). When I turned my head to look at the direction from which the shout came, I saw inside the garage of the Rural Transit Company a green truck discharging gasoline, with the rear part already aflame. I went to our bathroom to see better what was happening. I saw the driver started the truck perhaps to drive it out from the premises but before the truck reached the street the driver jump out from his seat. I saw the truck coming right to the direction of our house so I picked up my boy about two years old and I went downstairs. We have just reached downstairs when I heard the truck was jummed at the ditch in front of our house.’ (t.s.n., pp. 21 and 22, Garcia). According to this witness, after the driver jumped out, ’the truck continued in motion’ (t.s.n., p. 26 — Garcia and the same at the rear part of the truck was still ’about one foot high from the bottom of the tank’, (t.s.n., p. 28 — Garcia) in a place marked as circle 1 in Exhibit ’D’. Evidently, Sto. Domingo was seized with panic and abandoned the truck without setting its parking brake and without using the extinguisher which was ’placed on the usual place on the side of the truck’ (t.s.n., p. 25 — Garcia). Had he stopped the truck on the western side of Rizal Avenue Extension and operated the fire extinguisher instead of running away from the scene of occurrence, most probably he could have checked the fire and prevented the burning of appellee’s house, because even at that moment the fire in the rear part of the tank-trailer was only about one foot high.

"The facts narrated in the five preceding paragraphs prove that the employees of appellant oil company did not exercise special care and diligence required by the exceptional character of the work they were undertaking on May 3, 1949, in the ordinary course of their employment in the service of appellant oil company.

"Another equally unmeritorious contention of appellant oil company is that the trial court erred in holding that this appellant was negligent in not having appropriately instructed its employees.

"It is of common knowledge that gasoline is a highly volatile and combustible liquid. For this reason, aside from the requirements that tank-trailers should have drag chains or other flexible metallic devices long enough to reach the ground; that it should use only electric lights with fuses or automatic circuit breakers; that smoking is absolutely prohibited during deliveries or when the tank is being filled; and others (Exh.’K-2’), the owners or sellers of said liquid must properly instruct their laborers and employees charged with the delivery or handling of the liquid on how to manipulate the fire extinguishers so that they may instantly put out any spark. They should likewise be given the location of the nearest fire alarm for immediate notification of the fire department if the spark assumes proportions greater than can be extinguished by the small hand apparatus. It has not been shown that Igmidio Rico received any such instruction or training from appellant; and Julito Sto. Domingo, who underwent some training, testified that during his training period and three years of service, he was not instructed on the usage and shown the locations of the fire alarms in the vicinity of the stations where he used to deliver gasoline, neither was he given by appellant any sketch or map to show the location of said fire alarms (t.s.n., pp. 31 and 32 - Boaquiña). Thus, he was not able to locate any fire alarm during his ten-minute laborious search. Had an early warning from Sto. Domingo been received by the fire department, the destruction of appellee’s house might have been prevented by the prompt action of the firemen.

"On the other hand, appellant oil company knew of the practice of Sto. Domingo of writing his reports in the cab of the truck during discharge operations, and yet appellant oil company did not advise him against it nor prohibit him from doing it (t.s.n., pp. 60, 63 and 64 — Santiago). Had appellant ordered Sto. Domingo to stop this practice and instructed him to personally attend to the discharge of the gasoline with the fire extinguisher ready, he would indubitably have been able to check the fire at its inception, taking into account his special training which Rico did not have.

"Obviously, those considerations frustrate appellant’s attempt to exculpate itself under the last paragraph of Article 1903 of the old Civil Code, by trying to futilely prove that it exercised the diligence of a good father of a family to prevent the damage to appellee’s property."cralaw virtua1aw library

Counsel for petitioner STANVAC contends that since its employees Sto. Domingo and Rico had previously been found by competent court to be not negligent - referring to the court acquitting them in the criminal case for arson thru reckless imprudence — said petitioner cannot now be held liable for damages. The contention, in our opinion, cannot be sustained. It is admitted that respondent Anita Tan sought to hold STANVAC liable under Articles 1902 and 1903 of the old Civil Code, the law in force at the time the fire in question occurred. Under those articles, the liability of the employer is primary and direct, based upon his own negligence (culpa aquiliana) and not on that of his employees or servants. (Cangco v. Manila Railroad Co., 38 Phil., 768.) The present proceeding, therefore, is entirely unrelated to the judgment in the criminal case where petitioner’s two employees were acquitted because their criminal negligence was not proved and the cause of the fire could not be determined. Parenthetically, after the trial court had ordered the dismissal of respondent Anita Tan’s complaint, this Court on appeal reversed that order as to STANVAC and authorized the proceedings against said company, which was sued "not precisely because of the negligent acts of its two employees but because of acts of its own which might have contributed to the fire that destroyed the house of plaintiff (herein respondent Anita Tan)." Continuing, this Court further observed that —

". . . The complaint contains definite allegations of negligent acts properly attributable to the company which if proven and not refuted may serve as basis of its civil liability. Thus, in paragraph 5 of the first cause of action, it is expressly alleged that this company, through its employees, failed to take the necessary precautions or measures to insure safety and avoid harm to persons and damage to property as well as to observe that degree of care, precaution and vigilance which the circumstances justly demanded, thereby causing the gasoline they were unloading to catch fire. The precautions or measures which this company has allegedly failed to take to prevent fire are not clearly stated, but they are matters of evidence which need not now be determined. Suffice it to say, that such allegation furnishes enough basis if or a cause of action against this company. . . . ."cralaw virtua1aw library

Taking great pains in minutely scrutinizing the allegations in the complaint, counsel for petitioner avers that STANVAC was merely referred to therein as the employer and was not at all charged with negligence. Be that as it may, it is undisputed that no objection was made to the presentation of evidence as to the negligent acts of STANVAC during the trial of the case. As a matter of fact, it even tried to overcome that evidence by introducing evidence of its own tending to show that it had employed the diligence of a good father of a family to prevent the damage. The issue, therefore, regarding the negligence of petitioner STANVAC - even assuming that the complaint does not really contain allegations of negligent acts properly attributable to it - must be considered as if it had been raised in the pleadings. And the Court of Appeals, whose factual findings are final and conclusive upon this Court, having found that petitioner company did fail to take necessary precautions or measures to prevent fire, and that the fire that destroyed respondent Anita Tan’s house could have been avoided had petitioner exercised due care in the supervision or control of its employees, the appellate court’s ruling on its liability cannot now be disturbed.

In view of the foregoing, the decision sought to be reviewed is hereby affirmed, with costs against petitioner.

Paras, C.J., Bengzon, Montemayor, Bautista Angelo, Labrador, Concepción, Reyes, J.B.L., Endencia and Barrera, JJ., concur.

1. MUNICIPAL CORPORATIONS; GRANT OF FISHING PRIVILEGES; REQUIREMENT OF COMPETITIVE BIDDING. — The law (Sec. 2323 of the Revised Administrative Code) requires that when the exclusive privilege of fishery or the right to conduct a fish-breeding ground is granted to a private party, the same shall be let to the highest bidder in the same manner as is being done, in exploiting a ferry, a market or a slaughterhouse belonging to the municipality (See Municipality of San Luis v. Ventura, Et Al., 56 Phil., 329). The requirement of competitive bidding is for the purpose of inviting competition and to guard against favoritism, fraud and corruption in letting of fishery privileges (See 3 McQuillin, Municipal Corporations, 2nd Ed., p. 1170; Harles Gaslight Co. v. New York, 83 N.Y. 309; and 2 Dillon, Municipal Corporations, p. 1219).

2. ID.; ID.; ID.; EXTENSION OF LEASE OF MUNICIPAL WATERS WITHOUT PUBLIC BIDDING, EFFECT OF. — Statutes requiring public bidding apply to amendments of any contract already in compliance with the law where such amendments alter the original contract in some vital and essential particular (See Morse v. Buston, 148 N.E. 813; 253 Mass. 247.) . The period in a lease is a vital and essential part to the contract, and its extension without public bidding is not in accordance with law. In case at bar, the municipal resolution extending the original 51 year lease to another 5 years without public bidding is null and void.

3. ID.; POWER TO EXECUTE CONTRACTS; WHEN ESTOPPEL CANNOT APPLY AGAINST A MUNICIPAL CORPORATION. — The doctrine of estoppel cannot be applied as against a municipal corporation to validate a contract which it has no power to make, or which it is authorized to make only under prescribed conditions, within prescribed limitations, or in a prescribed mode or manner, although the corporation has accepted the benefits thereof and the other party has fully performed his part of the agreement, or has expanded large sums in preparation for performance. A reason frequently assigned for this rule is that to apply the doctrine of estoppel against a municipality in such case would be to enable it to do indirectly what it cannot do directly. Also, where a contract is violative of public policy, the municipality executing it cannot be estopped to assert the invalidity on this ground; nor can it be estopped to assert the invalidity of a contract which has ceded away, controlled, or embarrassed its legislative or government powers. (38 Am. Jur., pp. 202-204).

4. CONTRACTS; CONSTITUTIONAL PROVISION ON IMPAIRMENT OF CONTRACTS. — The constitutional provision on impairment of contracts refers only to contracts legally executed.

5. ID.; DOCTRINE OF "PARI DELICTO" ; WHEN COURT MAY GRANT RELIEF AT SUIT OF A PARTY ALTHOUGH THE PARTIES ARE IN "PARI DELICTO." — Although the parties are in pari delicto, the court may interfere and grant relief at the suit of one of them, where public policy requires its intervention, even though the result may be that a benefit will be derived by a plaintiff who is in equal guilt with defendant. But here the guilt of the parties is not considered as equal to the higher right of the public, and the guilty party to whom the relief is granted is simply the instrument by which the public is served. (13 C. J., p. 497).

Following a public bidding conducted by the municipality of Naujan, Oriental Mindoro for the lease of its municipal waters, Resolution 46, series of 1947 was passed by the municipal council thereof awarding the concession of the Butas River and the Naujan Lake to the highest bidder Bartolome San Diego. Consequently, a contract was entered into between the said San Diego and the municipality, stipulating that for a period of five (5) years, from January 1, 1948 to December 31, 1952, the former was to be the lessee of "the exclusive privilege of erecting fish corrals along the Butas River beginning from its junction with the San Agustin River up to the Naujan Lake itself," for an annual rental of P26,300.00, or a total of P131,500.00 for five years. Upon petition by the lessee, however, the said council reduced the annual rental by 20% by virtue of Resolution 59, series of 1949.

On September 5, 1950, the lessee requested for a five year extension of the original lease period. The request was, for some time, left pending before the municipal council, but on December 1, 1951, after the lessee had reiterated his petition for extension, for the reason that the typhoon "Wanda", which took place that month, destroyed most of his fish corrals, the council adopted Resolution 222, series of 1951 extending the lease for another five (5) years beginning January 1, 1952, with the express condition that the plaintiff would waive the privilege to seek for reduction of the amount of rent which was to be based on the original contract. After the resolution had been approved by the Provincial Board of Oriental Mindoro, the lessor and the lessee, on December 23, 1951, contracted for the extension of the period of the lease. The contract was approved and confirmed on December 29, 1951 by Resolution 229, series of 1951, of the municipal council of Naujan whose term was then about to expire. Pursuant to the said contract, the lessee filed a surety bond of P52,000.00 and then reconstructed his fish corrals and stocked the Naujan Lake with bañgus fingerlings.

On January 2, 1952, the municipal council of Naujan, this time composed of a new set of members, adopted Resolution 3, series of 1952, revoking Resolution 222, series of 1951. On the same date, the new council also passed Resolution 11, revoking Resolution 229 of the old council which confirmed the extension of the lease period. The lessee requested for reconsideration and recall of Resolution 3, on the ground, among others, that it violated the contract executed between him and the municipality on December 23, 1951, and, therefore, contrary to Article III, section 1, clause 10 of the Constitution. The request, however, was not granted.

On September 4, 1952, the lessee instituted this proceedings in the court below seeking to have Resolution 3, series of 1952, of the municipal council of Naujan, declared null and void, for being unconstitutional, and praying for an order enjoining the defendant municipality from conducting a public bidding for the leasing of the Naujan fisheries to any person other than the plaintiff during the period from January 1, 1953 to December 31, 1957.

Answering the complaint, the defendant asserted the validity of Resolution 3, series of 1951, alleging by way of special defense that the resolutions authorizing the original lease contract, reducing the lease rentals and renewing the lease are null and void for not having been passed in accordance with law. Defendant further put up a counterclaim for the amount representing the illegal reduction of 20% of the original rentals, plus the sum of P2,191.60 per month beginning December 1, 1952 until the case shall have been terminated.

After trial, the lower court rendered judgment upholding the validity of the lease contract, as well as its extension, and declaring Resolution 3, series of 1952, null and void. The municipality of Naujan has taken this appeal.

The main question to be decided is whether or not Resolution No. 3, series of 1952, revoking Resolution 222, series of 1951, of the municipal council of Naujan is valid.

For clarity, we have to reiterate that Resolution 222, series of 1951, is an approval of plaintiff-appellee’s petition for extension for another five years, effective January 1, 1953, of his five-year lease concession granted under Resolution 46, series of 1947. Said Resolution 222, however, was revoked by the municipal council under a new set of members in its Resolution 3, series of 1952, for the reason, among others, that the extension was illegal, it having been granted without competitive public bidding. It is this last mentioned resolution that has been declared null and void by the trial court.

The law (Sec. 2323 of the Revised Administrative Code) requires that when the exclusive privilege of fishery or the right to conduct a fish-breeding ground is granted to a private party, the same shall be let to the highest bidder in the same manner as is being done in exploiting a ferry, a market or a slaughterhouse belonging to the municipality (See Municipality of San Luis v. Ventura, Et Al., 56 Phil., 329). The requirement of competitive bidding is for the purpose of inviting competition and to guard against favoritism, fraud and corruption in the letting of fishery privileges (See 3 McQuillin, Municipal Corporations, 2nd Ed., p. 1170; Harles Gaslight Co. v. New York, 33 N.Y. 309; and 2 Dillon, Municipal Corporations, p. 1219).

There is no doubt that the original lease contract in this case was awarded to the highest bidder, but the reduction of the rental and the extension of the term of the lease appear to have been granted without previous public bidding. In the case of Caltex (Phil.) , Inc., Et. Al. v. Delgado Bros., Inc., Et Al., 96 Phil., 368, the amendment to an arrastre contract was declared null and void on the ground that it was made without previous public bidding. In so declaring, this Court has adopted the following opinion:jgc:chanrobles.com.ph

". . . it is the opinion of the Court that the said agreement . . . executed and entered into without previous public bidding, is null and void, and cannot adversely affect the rights of third parties . . . and of the public in general. The Court agrees with the contention of counsel for the plaintiffs that the due execution of a contract after public bidding is a limitation upon the right of the contracting parties to alter or amend it without another public bidding, for otherwise what would a public bidding be good for if after the execution of a contract after public bidding, the contracting parties may alter or amend the contract or even cancel it, at their will? Public biddings are held for the protection of the public, and to give the public the best possible advantages by means of open competition between the bidders. He who bids or offers the best terms is awarded the contract subject of the bid, and it is obvious that such protection and best possible advantages to the public will disappear if the parties to a contract executed after public bidding may alter or amend it without another previous public bidding."cralaw virtua1aw library

While in that case we ruled that although the "arrastre contract" therein questioned authorized the parties to alter or amend any of the terms thereof, such authority must be considered as being subject to the requirement of previous public bidding, a formality observed before the original contract was awarded, with more reason should the rule requiring such public bidding be strictly applied in the instant case where no such authority to alter or amend the terms of the contract was reserved.

Furthermore, it has been ruled that statutes requiring public bidding apply to amendments of any contract already executed in compliance with the law where such amendments alter the original contract in some vital and essential particular (See Morse v. Boston, 148 N.E. 813 253 Mass. 247.) . Inasmuch as the period in a lease is a vital and essential particular to the contract, we believe that the extension of the lease period in this case, which was granted without the essential requisite of public bidding, is not in accordance with law. And it follows that Resolution 222, series of 1951, and the contract authorized thereby, extending the original five-year lease to another five years are null and void as contrary to law and public policy.

We agree with the defendant-appellant in that the questioned Resolution 3 is not an impairment of the obligation of contract, because the constitutional provision on impairment refers only to contract legally executed. While, apparently, Resolution 3 tended to abrogate the contract extending the lease, legally speaking, there was no contract abrogated because, as we have said, the extension contract is void and inexistent.

The lower court, in holding that the defendant-appellant municipality has been estopped from assailing the validity of the contract into which it entered on December 23, 1951, seems to have overlooked the general rule that —

". . . the doctrine of estoppel cannot be applied as against a municipal corporation to validate a contract which it has no power to make or which it is authorized to make only under prescribed conditions, within prescribed limitations, or in a prescribed mode or manner, although the corporation has accepted the benefits thereof and the other party has fully performed his part of the agreement, or has expended large sums in preparation for performance. A reason frequently assigned for this rule is that to apply the doctrine of estoppel against a municipality in such case would be to enable it to do indirectly what it cannot do directly. Also, where a contract is violative of public policy, the municipality executing it cannot be estopped to essert the invalidity on this ground; nor can it be estopped to assert the invalidity of a contract which has ceded away, controlled, or embarrassed its legislative or government powers." (38 Am. Jur. pp. 202-204).

As pointed out above, "public biddings are held for the best protection of the public and to give the public the best possible advantages by means of open competition between the bidders." Thus, contracts requiring public bidding affect public interest, and to change them without complying with that requirement would indeed be against public policy. There is, therefore, nothing to plaintiff- appellee’s contention that the parties in this case being in pari delicto should be left in the situation where they are found, for "although the parties are in pari delicto yet the court may interfere and grant relief at the suit of one of them, where public policy requires its intervention, even though the result may be that a benefit will be derived by a plaintiff who is in equal guilt with defendant. But here the guilt of the parties is not considered as equal to the higher right of the public, and the guilty party to whom the relief is granted is simply the instrument by which the public is served." (13 C. J. p. 497).

In view of the foregoing, we hold that the municipal council of Naujan acted aright in adopting Resolution 3, series of 1952, now in question.

In consonance with the principles enunciated above, Resolution 59, series of 1947, reducing the rentals by 20% of the original price, which was also passed without public bidding, should likewise be held void, since a reduction of the rental to be paid by the lessee is a substantial alteration in the contract, making it a distinct and different lease contract which requires the prescribed formality of public bidding.

There seems to be no necessity of passing on the validity of Resolution 46, series of 1947, for defendant-appellant, apparently, did not mean to have it annulled, as may be seen from its prayer in the court below and also in this appeal. At any rate, the validity of said resolution does not alter our finding to the effect that Resolution 59, series of 1949, and Resolution 222, series of 1951, are illegal and void; and that Resolution 3, series of 1952, is valid.

Wherefore, the appealed judgment is reversed; plaintiff-appellee is hereby ordered to pay the defendant-appellant under the latter’s counterclaim the sum of P17,971.60 representing the approved and ineffective reduction by 20% of the originally stipulated rental, for the period from July 1, 1949 to December 1, 1952, plus the further sum of P2,191.60 per month beginning December 1, 1952 to December 31, 1957, as reasonable compensation for the illegal retention of the Naujan fisheries. Without special pronouncement as to costs.

Bengzon, Montemayor, Bautista Angelo, Labrador, Concepción, Reyes, J.B.L., Endencia and Barrera, JJ., concur.

R E S O L U T I O N

April 18, 1960 - GUTIERREZ DAVID, J.:

In the above entitled case, which was decided on February 29, 1960, the plaintiff-appellee moves for reconsideration of the decision on the grounds (1) that in virtue of the dispositive portion thereof the plaintiff-appellee is ordered to pay the sum of P2,191.60 per month beginning December 1, 1952 to December 31, 1957 as reasonable compensation for the illegal retention of the Naujan fisheries, while the contract, which was declared illegal and void covered the period January 1, 1953 to December 31, 1957, so the period of payment of the sum of P2,191.60 should begin not from December 1, 1952 but from January 1, 1953; (2) that plaintiff-appellee has already paid to the defendant-appellant the said sum of P2,191.60 every month, from January 1, 1953 to December 31, 1957; (3) that by clerical error in the statement of facts of the decision (second paragraph) it appears that the extension of the lease contract commenced January 1, 1952, instead of January 1, 1953; and (4) that this Court ordered the plaintiff-appellee to pay defendant-appellant the sum of P17,971.60 representing the unapproved and ineffective reduction by 20% of the originally stipulated rental, which order, from the strictly legal point of view, cannot be assailed, yet on equitable grounds relief from such payment of the sum could be given for the reasons alleged in the motion.

The defendant-appellant, on the other hand, filed an "Answer to the Motion for Reconsideration and Application for Damages." The answer states:jgc:chanrobles.com.ph

"According to the evidence in this case, after the approval, in June, 1949, of Resolution 59, series of 1949, reducing the rental by 20%, the plaintiff-appellee paid defendant-appellant the reduced rentals from July 1, 1949 to December 31, 1952. The original lease contract "Exhibit "A", stipulates an annual rental of P26,300.00 payable every trimester, and 20% thereof is P5,260.00 or P1,315.00 per trimester, which amount plaintiff consequently failed to pay from July 1, 1949 to December 31, 1952. Since the period from July 1, 1949 to December 31, 1952 consists of 14 trimesters, the plaintiff-appellee failed to pay accordingly, the amount of P18,410.00 during the said period (session of April 12, 1955, t.s.n. pp. 10-11). However, this Honorable Court, in ordering the plaintiff to pay the sum of P17,971.60 computed and based the said amount from July 1, 1949 to December 1, 1952, such that the rental corresponding to the month of December, 1952 was not included in the decision (P18,410 - P438.34 [representing 20% monthly reduction] - P17,971.60 (which should be P17,971.66 to be exact). And since the total unpaid reduction amounting to P17,971.60 as found by the court in its decision, does not include the rental for the month of December, 1952, this Court consequently had to order the plaintiff to pay defendant the full amount of the rental of P2,191.60 (P2,191.66 to be exact), which is one-twelfth (1/2) of P26,300.00, commencing from December 1, 1952 to December 31, 1967, otherwise, there would be a gap of one month, that is, there would be no rental for the entire month of December 1952. . . ."cralaw virtua1aw library

After a careful consideration of grounds 1, 2 and 3 of the motion and the answer thereto, which involve clerical errors, this Court deems it necessary to amend the decision as follows:chanrob1es virtual 1aw library

Part of the second paragraph to read:jgc:chanrobles.com.ph

". . . the council adopted Resolution 222, series of 1901 extending the lease for another five (5) years beginning January 1, 1953, with the express condition that the plaintiff would waive the privilege to seek for reduction of the amount of rent which was to be based on the original contract."cralaw virtua1aw library

The dispositive portion to read:chanrob1es virtual 1aw library

Wherefore, the appealed judgment is reversed; plaintiff-appellee is hereby ordered to pay the defendant-appellant under the latter’s counterclaim the sum of P18,410.00 representing the unapproved and ineffective reduction by 20% of the originally stipulated rental, for the period from July 1, 1949 to December 31, 1952, plus the further sum of P2,191.60 per month beginning January 1, 1953 to December 31, 1957, as reasonable compensation for the illegal retention of the Naujan fisheries, unless the said sum of P2,191.60 per month has already been paid by the plaintiff-appellee to the defendant-appellant during the said period."cralaw virtua1aw library

Ground 4 of the Motion for Reconsideration is denied for lack of merit. And defendant-appellant’s application for damages is likewise denied, but without prejudice to the filing of the same in the proper court.

Paras, C.J., Bengzon, Montemayor, Bautista Angelo, Labrador, Concepción, Reyes, J. B. L. and Barrera, JJ., concur.

1. RETIREMENT GRATUITY; CONDITIONS FOR RETIREMENT UNDER REPUBLIC ACT 660. — To enjoy the retirement benefits of Republic Act No. 660, a member must pay contributions to the retirement fund for at least five years, and if he has not, such contributions will have to be deducted from the retirement annuity in such manner as may be approved by the GSIS Board, at the request of said member.

Felix V. Valencia has appealed from the ruling of the Auditor- General approving the deductions made by the Government Service Insurance System from his retirement gratuity.

On November 16, 1950, Valencia was dismissed from the service of the Cebu Portland Cement Co., as general superintendent. He immediately complained to the Court of Industrial Relations, which court, after hearing, ordered his reinstatement with back pay. Such order was, on appeal, confirmed by this Court in March 1954. However, upon motion for reconsideration which asked a modification of the decision so as to require reinstatement with back pay only up to June 17, 1951, when Valencia could be considered retired under Republic Acts 660 and 728, this Court modified its affirmance by adding,

". . . subject to the provisions of such law or laws or regulations as may have been promulgated since the institution of the case and which may be applicable to the Respondent."cralaw virtua1aw library

It appears that on June 17, 1951, when Republic Act 660 was enacted, Felix V. Valencia had reached the 65-year compulsory retirement age fixed by such law. Accordingly, in compliance with our decision, he received back salary up to June 17, 1951 and was declared automatically separated from the service as of that date under Republic Act 660, with its retirement benefits.

Whereupon, the Government Service Insurance System, charged with the implementation of Republic Act 660, paid Valencia his 5-year lump sum retirement annuity, but deducted therefrom the amount of P2,250.00 representing unpaid retirement premiums (contributions) for five years. He questioned this deduction before the Auditor-General’s Office. There the deduction was upheld.

The Government Service Insurance System holds that under section 12(a) of Republic Act 660, any member who retires or is retired, must have made contributions (premiums) to the retirement fund for at least five years, and if he has not, such contributions (5-year or less as the case may be) will have to be deducted from the retirement annuity in such manner as may be approved by the Board, at the request of the member. This section reads as follows:jgc:chanrobles.com.ph

"SEC. 12. Conditions for retirement. — (a) On completion of thirty years of total service and attainment of age fifty-seven years, a member shall have the option to retire. In all cases, the last three years of service before retirement must be continuous, and he has made contributions for at least five years, which contributions may, upon his request approved by the Board, be deducted from his life annuity under such terms and conditions as the Board may prescribe. . . ." (Italics Ours.)

We think the Government Service Insurance System has read the section properly. The underlined portion is not very explicit and clear; but reading it in connection with sec. 26, specially the provisos thereof, 1 one gets the definite idea that to enjoy the retirement benefits of the Act, a person must pay contributions for at least five years.

There is no question that Felix V. Valencia has made no contributions (premiums) to the retirement fund because such contributions were for the first time required in June 17, 1951 — the day he retired. Here he makes no serious effort to question the interpretation given above to section 12(a). However, his main contention is that his case falls under sec. 12(c) — a paragraph that does not mention five-year contributions. In Espejo v. Auditor-General, 97 Phil., 216; 51 Off. Gaz., 2862, this matter was discussed and through Mr. Justice J. B. L. Reyes, this Court held that the expression "in all cases" in paragraph (a) means it is also applicable to paragraph (c). Here again, a reading of sec. 26 of the law 2 will convince any one of the legislators’ intention to require contributions for at least five years from beneficiaries of the retirement fund.

Petitioner points out that sec. 5 of Republic 728 amending Republic Act 660 provides that "there shall be no discount from the annuity for the first five years of those who are sixty-five years of age or more on the date of approval of Republic Act 660." It is significant that this amends section 11; whereas the deductions are mentioned in section 12. And it seems to refer to the 5% discount which the Government Service Insurance System used to charge for advancing the five-year annuity payments. We know this from Espejo v. Auditor-General, supra, and Bautista v. Auditor-General, 104 Phil., 428. Furthermore, there is no reason to exempt the class of retirees under sec. 11 from the burdens imposed on the classes specified in sec. 26.

Wherefore, the ruling under review is sustained with costs against petitioner. So ordered.

Paras, C.J., Montemayor, Bautista Angelo, Labrador, Concepción, Reyes, J. B. L., Endencia, Barrera and Gutierrez David, JJ., concur.

Endnotes:

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1. . . . Provided, That contributions corresponding to his last five years of service shall be deducted monthly from his life annuity. . . . Provided further, That contributions corresponding to his last five years of service shall be paid as provided in section twelve of this Act. . . . .

2. See footnote 1.

1. LEASE; LESSOR’S RIGHT TO TERMINATE LEASE WHEN TERM EXPIRES; OFFER TO THE LESSEE TO PURCHASE THE PROPERTY BEFORE TERMINATION OF THE LEASE; EFFECT OF LESSEE’S FAILURE TO ACCEPT OFFER. — In a contract of lease for a certain period, when the term expires the lessor may terminate the lease and order the lessee to vacate the premises. If the lessor makes an offer to the lessee to purchase the property on or before the termination of the lease, and the lessee fails to accept the offer or makes the purchase on time, the lessee loses his right to buy the property later on the terms and conditions set in the offer.

2. ID.; YEAR-TO-YEAR BASIS; IMPLIED EXTENSION; WHEN COURTS MAY DETERMINE WHAT IS A REASONABLE RENTAL. — There may be an implied extension of a lease where the same is not for a fixed period but from year to year, and if at the end of the year the owner demands a rental which is exhorbitant, the courts may determine what is a reasonable rental and allow the lessee to continue with the lease. It would be different if at the end of the year the owner, instead of demanding an increased and exhorbitant rental, insists that the lessee vacate the premises.

3. EJECTMENT; SUSPENSION OF PROCEEDINGS FOR EJECTMENT OF TENANTS UNDER REPUBLIC ACT NO. 1162; WHEN NOT APPLICABLE. — The suspension of proceedings for the tenants provided in Republic Act No. 1162, as amended by Republic Act No. 1599, has no application to a case where expropriation proceedings by the Government have not been commenced.

These five cases involve lots comprised in two large parcels of land, one belonging to plaintiff Antonio Tuason, Jr., and the other to plaintiff Nieves Tuason de Barreto, subdivided into a number of lots and leased to the defendants and their predecessors-in-interest for a period ranging from 25 to 33 years, the lease contracts ail expiring on December 31, 1953. For these reasons, in passing upon these five cases now before us on appeal, we are consolidating them in one single decision, specially since many and the most important facts and questions of law involved in these five cases are similar, if not identical.

Defendant Augusto de Asis is occupying Lot No. 15, with an area of 608.30 square meters, having an assessed value of P19,570. Defendant Dolores Vda. de Earnshaw occupies Lot No. 26, with an area of 2,234.10 square meters, assessed at P24,620. Defendant Dely Cacho is holding as tenant Lot No. 16-B, with an area of 829.4 square meters, assessed at P13,220. Defendant Emeterio Barcelon is occupying Lot No. 9-B-3-B, with an area of 4,422.80 square meters, with an assessed value of P59,050. And defendant Meliton Limlingan occupies Lot No. 7-B-3-E-3-B-9, with an area of 1,419.2 square meters, assessed at P16,973. The first four lots form part of the parcel situated in Sta. Mesa, Sampaloc, Manila, belonging to Antonio Tuason, Jr., while the last Lot No. 7-B-3-E-3-B-9 is a part of the parcel located at Sta. Mesa Boulevard, Manila, owned by plaintiff Nieves Tuason de Barreto.

Shortly before the expiration of the contracts of lease, the two owners-lessors notified their lessees as follows: That they (lessees) were to vacate the premises respectively occupied by them on or before December 31, 1953, or if they wished, to either buy said lots or enter into new contracts of lease at an increased rent; Augusto de Asis may purchase his lot at P65.00 per square meter or lease the same for one year at a rental of P1,957.00 plus the real estate tax which amounted to P293.53 a year; Dolores A. Vda. de Earnshaw to either buy her lot at P25.00 per square meter or lease the same for one year at a rental of P2,462.00 per annum plus the realty tax of P369.30 per annum; Dely Cacho to buy the lot at P35.00 per square meter or lease the same for a year at a rental of P1,322.00 per annum plus the realty tax of P198.30; Emeterio Barcelon to buy his lot at P35.00 per square meter, payable in cash or 20% down and the balance to be paid in 60 consecutive months with interest at 10% per annum, or lease the same for one year from January 1, 1954, at an annual rental of P5,905.00, plus the realty tax of P885.75, and that should Barcelon not buy the property or remove his house therefrom by December 31, 1953, it was to be understood that he was agreeable to the lease under the terms specified; and Meliton Limlingan to buy the lot at P30.00 per square meter or lease the same for one year from January 1, 1954, at an annual rental of P1,697.30, plus the realty tax amounting to P254.60.

All the defendants failed or refused to vacate the lots occupied by them; neither did they accede to the proposal to buy or lease the same, they claiming that although they were willing to make the purchase or enter into a new contract of lease, the amounts fixed for the sale or lease were unreasonable and excessive. As a result, plaintiffs Antonio Tuason, Jr. and Nieves Tuason de Barreto filed against them separate actions of illegal detainer in the Municipal Court of Manila. In all five cases, judgments were rendered in favor of plaintiffs.

On appeal to the Court of First Instance of Manila, the first three cases were decided by Judge Bienvenido A. Tan, who ordered appellants Augusto de Asis, Dolores Vda. de Earnshaw, and Dely Cacho to vacate the premises respectively occupied by them and to remove their improvements thereon. In the case of De Asis, the latter was ordered to pay the plaintiff by way of damages for the use and occupation of the premises the sum of P163.10 monthly, plus the yearly tax of P293.55, from January 1, 1954 until he left the premises, plus costs. In the case of Earnshaw, she was ordered to pay plaintiff a monthly rental of P205.17, from January 1, 1954, until possession was restored to plaintiff, plus the yearly realty tax of P369.30, and the further sum of P76.22 unpaid balance of realty tax for the year 1953, plus costs. Dely Cacho and her husband Antonio Castillejos were ordered to pay by way of damages for the use and occupation of the premises the sum of P110.17 a month, plus the yearly tax of P198.30, from January 1, 1954 until they vacated the lot, plus costs.

In the case of Emeterio Barcelon, Judge Bonifacio Ysip before whose sala the case was heard, rendered a decision, the dispositive part of which reads as follows:jgc:chanrobles.com.ph

"En vista de las consideraciones arriba expuestas, este Tribunal dicta sentencia alternativa del tenor siguiente: (1) que el demandado pague el demandante si quisiese optar por la compra del terreno arrendado por dicho demandado, al precio exigido por el demandante a razon de P35.00 por metro cuadrado, segun los terminos y condiciones del documento Exh. A; o (2) si el demandado no estuviere dispuesto en la compra del terreno arrendado por el al precio arriba mencionado, dicho demandado debe remover todas las mejoras introducidas por el y vacar la propiedad entregando la posesion al demandante dentro del plazo de ciento veinte (120) dias a contar desde que esta decision quede firme y ejecutoria; condena ademas al demandado a pagar al demandante la cantidad de P492.08 mensualmente por el uso y ocupacion de la propiedad desde el mes de Enero de 1954 hasta la entrega de la posesion al demandante, tal como ha sido fijada por el Juzgado Inferior; y al pago de las costas del presente juicio."cralaw virtua1aw library

In the case of Meliton Limlingan, heard in the sala of Judge Gregorio Narvasa, the latter rendered decision, the dispositive part of which reads as follows:jgc:chanrobles.com.ph

"Wherefore, judgment is hereby rendered, sentencing defendant to pay to plaintiff, beginning January 1, 1954, a yearly rental of P207.58 plus an amount commensurate with the increase of the assessment of the land, together with the annual tax thereon, payable in advance; otherwise, he shall be ousted from the land, and shall be liable for the amount of the rents due. Defendant shall pay the costs."cralaw virtua1aw library

All the five cases were appealed to the Court of Appeals, the first three by defendants Asis, Earnshaw, and Cacho; and the last two by plaintiffs Antonio Tuason and Nieves Tuason and by defendant Barcelon.

In the first three cases, after the Court of Appeals had rendered judgment in favor of the appellee, in the cases against Asis and Earnshaw, but before the judgment became final, and before it could decide the case against Dely Cacho, all three appellants filed identical motions to suspend further proceedings, invoking the provisions of Republic Act No. 1162, as amended by Republic Act No. 1599. Acting on said motions and the opposition of appellee who vigorously raised the question of constitutionality of the law, the Court of Appeals in separate resolutions certified the three cases to this Tribunal. We however, returned the cases to the Court of Appeals by resolution of October 23, 1956, reading as follows:jgc:chanrobles.com.ph

"Considering that the number of houses in appellee’s land is a question of fact; that unless such number is ascertained, the applicability of Republic Act 1599 to these cases cannot be determined; and that if Republic Act No. 1599 is not applicable, there is no call to pass upon its constitutionality; the Court RESOLVED to order that the records of these cases be returned to the Court of Appeals for ascertainment of the facts that would determine whether Republic Act No. 1599 is applicable."cralaw virtua1aw library

In pursuance of our resolution, the Court of Appeals appointed a Commissioner to ascertain the facts indicated by us. After receiving the Commissioner’s report, the Court of Appeals again elevated the said three cases to this Tribunal by its resolution of December 26, 1956, the pertinent portion of which reads:jgc:chanrobles.com.ph

"Considerando que estos hechos contenidos en el informe del comisionado justifican la aplicación de las leyes mencionadas, por lo mismo que el Art. 1 de la No. 1599, que enmienda al Art. 1 de la No. 1162, dispone expresamente que se autoriza la expropriación no solamente las haciendas, sino que tambien los terrenos que anteriormente formaban parte de las mismas, que se dieron en arrendamiento por un period no menor de lo años siempre y cuando que haya en dichos terrenos no menos de 50 casas; y considerando ademas que aparte de la inaplicabilidad se ataca tambien la constitucionalidad de las leyes aqui disputadas;

"Por la presente se resuelve devolver, como por la presente devuelven, los expedientes de estas causas a la Hon. Corte Suprema para su final resolución y adjudicación."cralaw virtua1aw library

In the other two cases, Barcelon and Limlingan also asked the Court of Appeals to suspend further proceedings, equally invoking the provisions of Republic Act No. 1162 as amended by Republic Act No. 1599; so, both cases were elevated by the Court of Appeals to us.

On this question of suspension of court proceedings pursuant to the provisions of Republic Act No. 1162, as amended by Republic Act No. 1599, we have already had occasion to rule on the same. In the case of Teresa Realty, Inc. v. State Construction and Supply Co., 105 Phil., 353, speaking through Mr. Justice Angelo Bautista, we said:jgc:chanrobles.com.ph

"One of the issues raised refers to the denial by the trial court of the motion filed by defendants to suspend the present ejectment case invoking in their favor the provisions of Republic Act No. 1162, particularly Section 5, which provides that ’From the approval of this Act, and until the expropriation herein provided, no ejectment proceedings shall be instituted or prosecuted against any tenant or occupant of any landed estates or haciendas herein authorized to be expropriated if be pays his current rentals.’ It is claimed that said Act was approved on June 18, 1954 and since this action was instituted on March 31, 1954, and remained pending when said Act was approved, it was the duty of the court to suspend the case in order that the purpose of said Act may be carried out which is to expropriate the land and subdivide it into small lots for sale at cost to its bona fide tenants or occupants.

"Appellee, on the other hand, contends that said Act is inapplicable to the present case for the reason that there is no evidence showing that the property in question forms part of a landed estate within the meaning of said Act, and even if it were so, still the act cannot apply because there is no showing that the Government has ever taken any step relative to the expropriation of the property.

"We are inclined to agree to appellee’s contention for it cannot be supposed that Congress in approving Republic Act No. 1162 had intended to actually suspend the prosecution of an ejectment proceeding even before any definite step or action is taken by the Government relative to the expropriation of the property, for to hold otherwise would be to deprive a landlord of his right to protect his interest by merely claiming that the Government may someday act on the matter thereby placing him at the mercy of an unscrupulous tenant. While it is laudable and proper that a landed estate be expropriated in order that it may be subdivided and sold to bona fide tenants or occupants, the same should be undertaken in a manner not repugnant to law or to the Constitution. In other words, the suspension of an ejectment proceeding should only be made after the Government has taken step or action relative to the expropriation of the property in accordance with the procedure laid down by law, otherwise the action would place the interest of the landlord in jeopardy. Such cannot be the intendment of the law. As aptly explained by the Court of Appeals in several cases involving the applicability of Republic Act No. 1162, to which we agree, ’until such a proceeding is actually commenced the right of a landowner to prosecute an action for ejectment under existing laws cannot be deemed suspended under section 5 of Republic Act No. 1162. To hold otherwise, that is, to deprive a landlord of his remedy because of the possibility that the Government may someday, in the near or distant future, act to expropriate his property, would be to place him at the mercy of a thoroughly uncertain contingency. . . . We think that the prohibition against the institution or prosecution of ejectment proceedings applies only when expropriation has actually commenced.’ (Barcelon v. Isip, CA-G.R. Nos. 13650-R, Oct. 14, 1954; see also Cacho v. Tan, CA-G.R. Nos. 13888-R to 13891-R, Dec. 10, 1954; Antonio Tuason, Jr. v. Narvasa, CA-G.R. No. 14479-R, July 30, 1955).

"In the case of Republic v. Cirilo P. Baylosis, 96 Phil., 461, this Court, speaking of the effect of an attempt to expropriate certain property by the government on the right of a landlord to protect his interest, made the following pronouncement:chanrob1es virtual 1aw library

‘. . . We hold that mere notice of the intention of the Government to expropriate lands in the future does not and cannot bind the landowner and prevent him from dealing with the property. To bind the land to be expropriated and the owner thereof, the expropriation must be commenced in court and even then we are not certain that the owner may not deal with his property, thereafter, mortgage or even sell it if he can find persons who would step into his shoes and deal with the Government, either resist the expropriation and remain with what is left of the property if the entire property is not needed by the Government.’

"It is obvious from the foregoing that the trial court did not err in holding that Republic Act No. 1162 is inapplicable to this case for there is no showing that an expropriation proceeding has actually been commenced by the Government which would give defendants the right to demand the suspension of the ejectment case within the meaning of said act."cralaw virtua1aw library

In all these five cases now before us on appeal, there is no showing that expropriation proceedings by the Government have actually been commenced. Consequently, the two laws invoked are not applicable and there is or was no reason to suspend court proceedings.

In the case against Limlingan, Judge Narvasa, citing the case of Roman Catholic Archbishop of Manila v. Ver, 73 Phil. 363, did not order him to vacate the premises, but allowed him to continue with the lease at a rental of P207.58, plus an amount commensurate with the increase in the assessment value, plus the annual tax. In other words, his Honor did not find Limlingan in default, and in effect held that the contract of lease was extended. In the other four cases, appellants Asis, Earnshaw, Cacho and Barcelon claim that the trial court erred in not considering the contracts of lease as extended as long as they were willing to pay a reasonable rental.

This theory of extension we find untenable. In the case of Archbishop of Manila v. Ver, supra, the lease was from year to year and this Court said that in such a case, the lessor may not terminate the lease because of the failure of the lessee to pay an exorbitant rental demanded by the lessor, based on alleged increase in the assessed value of the land. However, in the later case of Co Tiamco v. Diaz, 75 Phil., 672, this Tribunal held that where the contract of lease fixes a term, upon the expiration of the period, the lessor may consider the lease terminated and eject the lessee, citing Articles 1565 of the Old Civil Code, which finds its counterpart in Article 1669 of the New Civil Code. Inasmuch as in these five cases, the contracts of lease provided for the termination of the same on December 31, 1953, and before the said termination, the lessors asked the lessees to vacate the premises, although giving them the option to either buy their respective lots or lease them for one year, at amounts fixed by said lessors, the lessors Antonio Tuason and Nieves Tuason were authorized to eject the lessees, for the reason that the latter failed or refused to either buy or lease the lots occupied by them, on the terms specified by the owners.

In the case of Barcelon, G. R. No. L-13508, where the trial court gave him the option to buy his lot at the rate of P35.00 per square meter, appellant Antonio Tuason claims, and correctly, that his offer to sell the lot at P35.00 per square meter was good up to December 31, 1953, which price was the prevailing market value of the property at the time, and that it would be unfair to compel him to sell the same three or four years later at the same price. We find merit in that contention. As we have already said, there was no extension of the contract of lease beyond December 31, 1953, and the owner was authorized to eject the lessee thereafter. The offer to sell the lot to Barcelon at P35.00 per square meter was made provided he accepted the offer on or before December 31, 1953, which Barcelon failed to accept. Plaintiff’s letter, Exhibit A, to Barcelon contains this statement: "Should you not buy the property nor remove the house by December 31, 1953, it is understood that you agree to lease the property." Because of this, and because of the failure of Barcelon to make the purchase or remove his house by December 31, 1953, he was understood to have agreed to lease the property for one year upon the terms set by the owner.

The trial court in its alternative judgment said that Barcelon, should he refuse to buy the lot, should vacate the same and pay the sum of P492.08 as monthly rental from January 1, 1954 until he left the property. Appellant Antonio Tuason claims that the trial court erred in not including therein the payment of realty tax. Again, we find this contention to be correct, because adding this realty tax to the rental, the total would still be within the 12 per cent allowed by the law.

With respect to the case case of Limlingan, G. R. No. L-13504, in view of our holding that in neither of these five cases was there an extension of the lease contract, the trial court erred in allowing Limlingan to continue leasing the property by paying a yearly rental of P207.58, plus an amount commensurate with the increase of the assessment of the lot, together with the annual realty tax. He should have been ordered to vacate the property and to pay a rental from January 1, 1954 up to the time when he actually vacates the premises, at the rate fixed by plaintiff Nieves Tuason, namely, P1,697.40 a year, plus the realty tax amounting to P264.00, the total of which is still within the 12 per cent of the assessed value allowed by law. In this connection, reference may be made to our decision in the case of Teresa Realty v. State Construction and Supply Co., supra, where we said:jgc:chanrobles.com.ph

"It should be noted that defendants have occupied the property under lease for thirty years or more until 1953 when plaintiff, upon the expiration of the contract of lease, made a re-appraisal of the rental and fixed a new rate on the basis of 12 percent of the current assessed value of the property. This rental can hardly be considered excessive considering that Section 3 of Republic Act 1162 expressly provides that ’in the event of lease, the rentals that may be charged by the Government shall not exceed twelve percent per annum of the assessed valuation of the property lease.’ This is an express recognition that a rental not exceeding 12 percent per annum of the assessed value of the property is not excessive. Indeed, defendants can not pretend to pay the same or similar rentals to what they had paid during the 30-year period covered by their contract of lease. It is a matter of general knowledge that the values of real estate have steadily gone up with the passing of the years and it is but fair that their productivity be correspondingly increased. The error assigned has therefore no merit."cralaw virtua1aw library

In all these five cases, the rentals fixed by the owners, including the realty taxes, would, according to our computation, only amount to about 11 1/2% of the assessed value of the lots involved; consequently, they are reasonable and proper.

In conclusion, we hold that in a contract of lease for a certain period, when the term expires, the lessor may terminate the lease and order the lessee to vacate the premises; that where the lessor makes an offer to the lessee to purchase the property on or before the termination of the lease, and the lessee fails to accept the offer or make the purchase on time, then the lessee loses his right to buy the property later on the terms and conditions set in the offer; third, that there may be an implied extension of a lease where the same is not for a fixed period but from year to year, and if at the end of the year, the owner demands a rental which is exorbitant, in that case, the courts may determine what is a reasonable rental and allow the lessee to continue with the lease. It would be different if at the end of the year, the owner instead of demanding an increased and exorbitant rental, insists that the lessee vacates the premises. Fourth, that Republic Act No. 1162, as amended by Republic Act No. 1599, about the suspension of proceedings for the ejectment of tenants has no application to a case where expropriation proceedings by the Government have not been commenced.

In view of the foregoing, the decision in the first three cases, G. R. Nos. L-11319, L-11320, and L-13507 against Asis, Earnshaw and Cacho, respectively, are hereby affirmed. In the fourth case, G. R. No. L-13508, against Barcelon, the appealed decision is set aside in so far as it allows defendant Barcelon to buy his lot at the rate of P35.00 a square meter and modified as to the amount of rental that he has to pay from January 1, 1954 until he vacates the premises; in addition to the rental fixed by the trial court at P492.08, Barcelon will pay the realty tax. In the fifth case against Limlingan, G. R. No. L-13504, the appealed decision is hereby reversed in so far as it allows defendant Limlingan to continue with the lease. The rental to be paid by him from January 1, 1954 until he vacates the premises will be P1,697.30, plus the annual realty tax amounting to P254.60. All five defendants will pay the costs.

Paras, C.J., Bautista Angelo, Labrador, Concepcion, Reyes, J. B. L., Endencia, Barrera and Gutierrez David, JJ., concur.

1. PUBLIC SERVICE COMMISSION; GRANTING OF NEW CERTIFICATES OF PUBLIC CONVENIENCE; INCREASE IN POPULATION AND IN NUMBER OF PASSENGERS TO BE CONSIDERED. — Where the Public Service Commission, after finding that the operation and maintenance of 22 passenger buses specified in the certificate of public convenience was of public need and that the convenience of the public needed the operation of said 22 units, granted a franchise for 25 years to an applicant to operate 20 passenger buses and 2 additional auto trucks, it stands to reason that 7 years from said grant such need for the operation of said units continued to exist, there being no evidence to the contrary and there being positive evidence that there had been an increase in population and in the number of passengers along the lines for which the certificate was issued by the Public Service Commission.

Respondent M. Ruiz Highway Transit, Inc. has filed a motion to reconsider the decision of this Court promulgated on November 28, 1959, in which decision we reversed that of the Public Service Commission in the above-entitled cases and denied the application of the respondent for authority to operate for public service six auto trucks on the following lines: Santa Maria (Laguna-San Pablo City via Pila, 2 trucks, Lumban (Laguna)-Manila, Nagcarlan (Laguna)-Manila, Majayjay (Laguna)-Manila and Santa Cruz (Laguna)-Majayjay (Laguna), 1 truck each. The grounds stated in the motion for reconsideration are as follows: that in 1946 respondent-movant was authorized to operate auto trucks for the transportation of passengers and freight from Laguna to Manila and back, and that in the year 1950 the certificate of public convenience was converted into a franchise; that by reason of shortage of tires and spare parts and the failure to obtain necessary dollar allocations to purchase the same abroad, respondent-movant was not able to maintain full operational strength, for which reason the Commission reduced the grant of the original franchise in 1946 population and business have increased in the areas where the respondent-movant operated its buses; that the findings of fact of the Public Service Commission as to public necessity are not interferred with by this Court and the latter is not authorized to substitute its discretion or judgment insofar as the grant of certificates of public convenience and that the Court, therefore, diverted from this ruling and policy in reversing the grant of the petition of the respondent-movant. Other grounds were alleged but they need not be herein restated. The petitioner Laguna Tayabas Bus Company opposed the motion for reconsideration, alleging that this Court has reviewed evidence in various cases, the most important of which are: Batangas Transportation Co. Et. Al., v. Biñan Transportation Co. and Jose Silva, 99 Phil., 918; Padua v. Ocampo, Et Al., G. R. No. L-7589, July 30, 1955; Bachrach Motor Co., etc. v. Hipolito, G. R. No. L-9278, April 26, 1957; that we did not make any mistake in relying on the reports of checkers stationed by the Commission at major points to determine the passengers aboard the trucks operating along the lines covered by the application; that at the hearing the reports of checkers had not been impugned, etc. The respondent-movant has also filed a reply, so the motion in question is now before us for final consideration and decision.

It is true that in considering the evidence submitted before the Public Service Commission reliance was placed by us mainly on the reports of checkers. So that if the evidences alone submitted by respondent-movant on one side and the petitioner on the other are considered, it seems we are fully justified in concluding that the evidence submitted by petitioner is credible and convincing, because it cannot be denied that the actual counting of passengers aboard passenger trucks is indeed absolutely more reliable than impressions of some casual passengers or of bystanders as to the number of passengers aboard the buses. There is one material point, however, which we have overlooked and which we believe should be considered in relation with the evidence submitted by respondent-movant in support of its application. Said evidence is the fact that respondent had been granted a franchise to operate 20 passenger buses and two additional auto trucks in a decision of the Public Service Commission dated August 17, 1950, and said certificate of public convenience was to be valid for a period of 25 years from the date of the decision. In the above decision the Public Service Commission had found as a fact that the operation and maintenance of 22 passenger buses specified in the certificate of public convenience was of public need and that the convenience of the public then needed the operation of said 22 units. If as early as 1950, the Public Service Commission had already found public necessity for the operation by respondent-movant of 22 buses, it stands to reason that when it presented its petition in the above entitled cases and when the Public Service Commission rendered decision in said cases on January 5, 1957, or some seven years after the grant of the original certificate of public convenience, such need for the operation of said trucks which were found to exist as early as 1950, continued to exist, there being no evidence to the contrary and there being positive evidence submitted by the respondent-movant that there has been increase in population and increase in number of passengers along the lines for which the certificate was issued by the Public Service Commission. In short, since a public necessity existed in 1950, such public necessity continued, if it did not increase, in 1957, in view of the increase in population and the number of passengers along the lines covered by the certificate.

We have taken into account the fact that in various decisions of the Public Service Commission, dated August 13, 1951, August 29, 1953, August 20, 1954, June 29, 1955, the respondent-movant had committed violations of the certificate of public convenience by irregular service and that some of the lines being operated had been cancelled. The irregular operation of the lines by the respondent-movant, however, appear to have been due to difficulties in getting the necessary tires and spare parts for the use of its buses. In none of the orders of the Commission finding the respondent-movant guilty of irregular service nor in that cancelling the operation of some of its lines, is it indicated that the reason for the irregularity of service or the cancellation of some lines is the absence or insufficiency of passengers along the lines.

Considering the respondent-movant had an original franchise for the operation of 20 trucks as early as 1950 and that she has proved that there has been an increase in population and an increase in passengers along the lines applied for, we are constrained to reverse our previous stand. We declare that the evidence submitted before the Public Service Commission is sufficient to sustain the finding of said Commission that there is public necessity for the operation of the revived lines granted in the decision of the Public Service Commission subject of the present petition for review. We have again gone over the reports of the checkers which we have previously studied and we know that while the buses are not overloaded at the time of the inspection of the buses, there are instances where they had 51 passengers, 47 passengers, 42 passengers, 50 passengers, 40 passengers, etc. which shows that the finding of the Public Service Commission that there was need, is not without foundation. If the buses would carry ordinarily some 15 to 20 passengers it might be said that there is no need for additional buses, but when they have from 40 to 50 passengers, most likely some more buses are needed for the convenience of the public.

Wherefore, our decision above mentioned is hereby reconsidered and set aside, and one is hereby entered declaring that upon the reexamination of the evidence, both of the original petitioner M. Ruiz Highway Transit, Inc. and the Laguna Tayabas Bus Company, the decision of the Public Service Commission subject of review is justified by the evidence on record.

The original decisions of the Public Service Commission subject of the petition for review are, therefore, affirmed, without costs.

Paras, C.J., Montemayor, Bautista Angelo, Concepción, Reyes, J.B.L., Endencia, Barrera and Gutierrez David, JJ., concur.

1. LIBEL; PRESCRIPTION OF CIVIL ACTION; STARTING POINT OF PRESCRIPTIVE PERIOD. — A civil action arising from libel prescribes in one year. (Article 1147, new Civil Code; Tejuco v. E. R. Squibb and Son Phil. Corp., Et Al., 103 Phil., 594; Inciong, Et. Al. v. Tolentino, 106 Phil. 207; 56 Off. Gaz., [50] 7618.) There being no special provision which ordains otherwise, that period must be counted from the day the action could have been brought. (Article 1150, new Civil Code.) It is the legal possibility of bringing the action which determines the starting point for the computation of the period. (Tolentino’s Code, Vol. IV, p. 39, citing Sentencia May 8, 1903 and Manresa 896.) In case at bar, the limitation prescribed by law should be counted, not from October 23, 1955, when the alleged libelous letter was sent to the Office of the President, but from January 6, 1956, when the contents thereof came to appellant’s knowledge, because although a written defamation becomes actionable upon its publication, it is evident that the libelous matter must first be exhibited to the person libeled before the action could be brought. A person defamed could hardly be expected to institute the proceedings for damages arising from libel when he has no knowledge of the said libel.

2. PLEADING AND PRACTICE; MOTION TO DISMISS; PURPOSE OF HEARING. — A motion to dismiss is set for hearing to allow the presentation of evidence in support of and against the contention of the defendant, except when the motion is based on the ground of lack of cause of action. (Zobel v. Abreu, Et Al., 98 Phil., 343; 52 Off. Gaz., [7] 3592; Asejo v. Leonso, 78 Phil., 467.)

This is an appeal from an order of dismissal based upon the ground of prescription.

The record shows that on January 5, 1957, Gregorio I. Alcantara and Juan Ruelo filed in the Court of First Instance of Rizal the present action against defendant Norberto S. Amoranto, the incumbent mayor of Quezon City, for the recovery of damages allegedly suffered by them as a result of a libelous letter. It is alleged in paragraph 5 of the complaint —

"5. That on October 23, 1955 the defendant, with the intent of injuring the plaintiffs and of besmirching their good reputation addressed a letter to the Office of the President of the Philippines and caused the same to be published wherein he made the following libelous statements against the plaintiffs, to wit: ’complainants are trouble makers, drunkards, and have many pending cases against them.’"

Instead of answering, defendant moved to dismiss the complaint on the ground of prescription. It was argued that "from the face of the complaint the alleged defamatory imputations were made on October 23, 1955," so that when the complaint was filed on January 5, 1957, more than one year after the action may be brought had already elapsed. Plaintiffs opposed the motion alleging that while the defamatory statements are contained in a letter dated October 23, 1955, the said letter was first sent to the Office of the President by the defendant and endorsed to plaintiffs on December 3, 1955; that plaintiff Alcantara received a copy of the letter on January 5, 1956, while his co-plaintiff Ruelo received another copy on January 6, 1956; that the contents of the letter came to their knowledge only on January 6, 1956, when it was translated to them into Tagalog by a certain Honesto Vitug; and that the one-year period of prescription, which should commence from the day the action may be brought, must be computed from January 6, 1956, when the defamatory statements contained in the letter came to their knowledge.

Sustaining the motion to dismiss, the lower court on January 19, 1957 issued the following order:jgc:chanrobles.com.ph

"The time within which to file the action in the above-entitled case having already prescribed,

"As prayed for in the Motion to dismiss filed by the defendant, the above-entitled case is ordered dismissed, without costs. So ordered."cralaw virtua1aw library

Plaintiffs in due time filed a motion for reconsideration, which was opposed by defendant. On April 3, 1957, the motion was denied, the court holding that under paragraph 5 of the complaint the alleged libelous letter was sent and published by defendant since October 23, 1955 and that the motion for reconsideration states "foreign matters . . . which are not part of the complaint." From that order, only plaintiff Alcantara has appealed directly to this Court.

A civil action arising from libel prescribes in one year. (Article 1147, new Civil Code; Tejuco v. E. R. Squibb & Son Phil. Corp. Et. Al., 103 Phil., 594; Inciong Et. Al., v. Tolentino,* 56 Off. Gaz. [50] 7618.) There being no special provisions which ordains otherwise, that period must be counted from the day the action could have been brought. (Article 1150, new Civil Code.) It is the legal possibility of bringing the action which determines the starting point for the computation of the period. (Tolentino’s Civil Code, Vol. IV, p. 39, citing Sentencia of May 8, 1903 and Manresa 896.)

In the present proceedings, we do not think the lower court correctly applied the law in dismissing appellant’s complaint on the ground of prescription. The one-year limitation prescribed by law should be counted, not from October 23, 1955, when the alleged libelous letter was sent to the Office of the President, but from January 6, 1956, when the contents thereof came to appellant’s knowledge. A written defamation, it is true, becomes actionable upon its publication — that is to say, when communicated to third person or persons as the term is understood in the law of libel. It is evident, however, that the libelous matter must first be exhibited to the person libeled before the action could be brought. A person defamed, as pointed out by appellant, could hardly be expected to institute the proceedings for damages arising from libel when he has no knowledge of the said libel. It may not be amiss to state here that under the Revised Penal Code the period of prescription for defamation commences to run from the day on which the crime is discovered by the offended party. (People v. Aquino, 68 Phil., 588.)

Defendant-appellee assails as unbelievable and self-serving appellant’s claim that he actually learned of the alleged defamatory statements only when the letter containing them was translated to him on January 6, 1956. No evidence, however, appears to have been presented to show the contrary. And the lower court did not make any finding on the claim although it conducted hearings on the motion to dismiss and on the motion for reconsideration. Instead, it regarded said claim as "a foreign matter, which is not part of the complaint." Apparently, the court overlooked the fact that under the Rules a motion to dismiss is set for hearing precisely to allow the presentation of evidence in support of and against the contention of the defendant, except when the motion is based on the ground of lack of cause of action. (Zobel v. Abreu, Et Al., 98 Phil., 343; 52 Off. Gaz., [7] 3592; Asejo v. Leonso, 78 Phil., 467.)

Wherefore, the order of dismissal appealed from is hereby set aside and the case in so far as appellant Alcantara’s complaint is concerned is ordered remanded to the court below for further proceedings. Without costs.

Paras, C.J. Montemayor, Bautista Angelo, Labrador, Concepción, Reyes, J.B.L., Endencia and Barrera, JJ., concur.

1. HORSE RACING; HOLDING OF RACES BY PRIVATE INDIVIDUALS AND ENTITIES MERELY PERMISSIVE. — Section 4 of Republic Act No. 309, as amended by Republic Act No. 983, specifically reserved 23 Sundays and 16 Saturdays for the Philippine Anti-Tuberculosis Society, the White Cross, Inc. and the Philippine Charity Sweepstakes Office, and 12 Saturdays to the President for other charitable, relief or civic purposes. The remaining racing days were assigned to private individuals and entities duly licensed by the Games and Amusements Board, like the appellants. When Republic Act No. 1502 increased the sweepstakes draw and races to twelve but without specifying the days on which they are to be run, the Games and Amusement Board resolved to reduce the number of racing days assigned to private individuals and entities by six. Appellants protested, contending that the said increase should be taken from the Saturdays reserved to the President, or should be assigned to any other day of the week besides Sunday, Saturday, and legal holiday. Held: Appellants have no vested right to the unreserved racing days because their holding of races on those days is merely permissive, subject to the licensing and determination by the Games and Amusements Board. When, therefore, Republic Act No. 1502 increased by six the sweepstakes draw and races but without specifying the days for holding them, the Board had no alternative except to make room for the additional races from among the only available racing days unreserved by the law.

2. ID.; ID.; HORSE RACING ON WEEK DAYS PROHIBITED. — The law does not authorize the holding of horse races with betting on week days (Article 198 of the Revised Penal Code).

3. STATUTORY CONSTRUCTION; INTERPRETATION OF STATUTES; INTENTION OF AUTHOR MUST NOT ONLY BE ASCERTAINED BUT IT IS NECESSARY THAT SUCH INTENTION HAS BEEN EXPRESSED IN SUCH A WAY AS TO GIVE IT LEGAL EFFECT AND VALIDITY. — In the interpretation of a legal document, especially a statute, unlike in the interpretation of an ordinary written document, it is not enough to obtain information as to the intention or meaning of the author or authors, but also to see whether the intention or meaning has been expressed in such a way as to give it legal effect and validity. In short, the purpose of the inquiry, is not only to know what the author meant by the language he used, but also to see that the language used sufficiently expresses that meaning. The legal act, so to speak, is made up of two elements — an internal and an external one; it originates in intention and is perfected by expression. Failure of the latter may defeat the former. (59 C. J., 1017).

This is a petition for declaratory relief filed by petitioner Manila Jockey Club, Inc., in the Court of First Instance of Manila (Civil Case No. 31274), in which the Philippine Racing Club, Inc. intervened as party in interest with leave of court, praying that judgment be rendered against respondents Games and Amusements Board (GAB), Philippine Charity Sweepstakes Office (PCSO), and Executive Secretary Fortunato de Leon:jgc:chanrobles.com.ph

"(a) Interpreting Republic Acts Nos. 303 and 1502 in such a manner that the 30 Sundays unreserved for charitable institutions and therefore belonging to the private racing clubs under Section 4 of Republic Act No. 309 continue to pertain to said private entities, and that the 6 additional sweepstakes races authorized under Republic Act No. 1502 should be held on 6 of the 12 Saturdays not reserved for any private entity or particular charitable institution under Section 4 of Republic Act No. 309, or on any other day of the week besides Sunday, Saturday and legal holiday;

"(b) Holding that respondent PCSO does not have the right or power to appropriate or use the race tracks and equipment of petitioner without its consent, nor can respondents compel petitioner to so allow such use of its race tracks and equipment under pain of having its license revoked."cralaw virtua1aw library

Respondents duly filed their respective answers to said petition and the case as heard. After hearing, the court, on July 5, 1957, rendered a decision which, in part, reads:jgc:chanrobles.com.ph

"The court does not deem it necessary to rule on the deprivation of property of the petitioner and the intervenor without due process of law, as feared by them, because as they have stated, the Philippine Charity Sweepstakes Office is using their premises and equipment under separate contracts of lease voluntarily and willingly entered into by the parties upon payment of a corresponding rental. There is therefore no deprivation of property without due process of law.

"Wherefore, the court is of the opinion and so holds that once a month on a Sunday not reserved for the Anti-Tuberculosis Society, the White Cross and other charitable institutions by Section 4 of Republic Act No. 309, the Philippine Charity Sweepstakes Office is authorized to hold one regular sweepstakes draw and races, pursuant to Section 9 of Republic Act No. 1502, thus reducing the number of Sundays which may be alloted to private entities by the Games and Amusements Board. . . . ."cralaw virtua1aw library

From this judgment, petitioner and intervenor interposed the present appeal.

The issue is the proper placement of the six (6) additional racing days given to the Philippine Charity Sweepstakes Office, in virtue of Republic Act No. 1502, approved on June 16, 1956.

The authorized racing days specifically designated and distributed in Section 4 of Republic Act No. 309, the basic law on horse racing in the Philippines, as later amended by Republic Act No. 983, are as follows:chanrob1es virtual 1aw library

A. Sundays:chanrob1es virtual 1aw library

(1) For the Philippine Anti-Tuberculosis Society 12 Sundays

(2) For the Philippine Charity Sweepstakes Office

(PCSO) . . . . . . . . . . . . . . . . . . . 6 Sundays

(3) For the White Cross, Inc. . . . . . . . . . . 4 Sundays

(4) For the Grand Derby Race of the Philippine

Anti-Tuberculosis Society. . . . . . . . . . 1 Sunday

____

Total . . . . . . . . . . . . . . . . . 23 Sundays

(5) For private individuals and entities duly

licensed by the GAB, other Sundays not

reserved under this Act, as may be deter-

mined by the GAB . . . . . . . . . . . . . . 29 Sundays

or 30 for Leap years

Total for the year . . . . . . . . . . 52 Sundays

or 53 for leap years

B. Saturdays:chanrob1es virtual 1aw library

(1) For the Philippine Anti-Tuberculosis Society 12 Saturdays

(2) For the White Cross, Inc. . . . . . . . . . 4 Saturdays

(3) For private Individuals and entities duly

licensed by GAB and as may be determined

by it . . . . . . . . . . . . . . . . . . . 24 Saturdays

(4) For races authorized by the President for

charitable, relief, or civic purposes other

than the particular charitable institutions

named above, all other Saturdays not

reserved for the latter . . . . . . . . . . 12 Saturdays

____________

Total . . . . . . . . . . . . . . . . 52 Saturdays

C. Legal Holidays: All, except Thursday and Friday of the Holy Week, July 4th and December 30th, have been reserved for private individuals and entities duly licensed by the GAB.

As stated, Republic Act No. 1502 increased the sweepstakes draw and races of the PCSO to twelve but without specifying the days on which they are to be run. To accommodate these additional races, the GAB resolved to reduce the number of Sundays assigned to private individuals and entities by six. Appellants protested, contending that the said increased should be taken from the 12 Saturdays reserved to the President, for charitable, relief, or civic purposes, or should be assigned to any other day of the week besides Sunday, Saturday, and legal holiday.

Appellants’ contention cannot be sustained. Section 4 of Republic Act No. 309, as amended by Republic Act No. 983, by express terms, specifically reserved 23 Sundays and 16 Saturdays for the Philippine Anti-Tuberculosis Society, the White Cross, Inc. and the PCSO, and 12 Saturdays to the President for other charitable, relief, or civic purposes. These days can not be disposed of by the GAB without authority of law. As to the remaining racing days, the law provides:jgc:chanrobles.com.ph

"SEC. 4. Racing days. — Private individuals and entities duly licensed by the Commission on Races (now GAB) may hold horse races on Sundays not reserved under this Act, on twenty-four Saturdays as may be determined by the said Commission (GAB), and on legal holidays, except Thursday and Friday of Holy Week, July fourth, commonly known as Independence Day, and December thirtieth, commonly known as Rizal Day."cralaw virtua1aw library

It is clear from the above-quoted provision that appellants have no vested right to the unreserved Sundays, or even to the 24 Saturdays (except, perhaps, on the holidays), because their holding of races on these days is merely permissive, subject to the licensing and determination by the GAB. When, therefore, Republic Act No. 1502 was enacted increasing by six (6) the sweepstakes draw and races, but without specifying the days for holding them, the GAB had no alternative except to make room for the additional races, as it did, from among the only available racing days unreserved by any law — the Sundays on which the private individuals and entities have been permitted to hold their races, subject to licensing and determination by the GAB.

It is suggested that the GAB should have chosen any week days or Saturday afternoons. In the first place, weeks days are out of the question. The law does not authorize the holding of horse races with betting on week days (See Article 198, of the Revised Penal Code). Secondly, sweepstakes races have always been held on Sundays. Besides, it is not possible to hold them on Saturdays afternoons as, it is claimed, a whole day is necessary for the mixing of the sweepstakes balls, the drawing of winning sweepstakes numbers, and the running of the sweepstakes races. Be that as it may, since the law has given certain amount of discretion to the GAB in determining and allocating racing days not specifically reserved, and since the court does not find that a grave abuse of this discretion has been committed, there seems to be no reason, legal or otherwise, to set aside the resolution of the GAB.

Furthermore, appellants contend that even granting that the six (6) additional sweepstakes races should be run on Sundays, yet if they are held on a club race day, the GAB should only insert them in the club races and not give the whole day to the PCSO, to the exclusion of appellants. In support of this contention, the following quotation from the debate in the House of Representatives before the voting on House Bill No. 5732, which became Republic Act No. 1502, is cited:jgc:chanrobles.com.ph

"Mr. ABELEDA. If there are no more amendments, I move that we vote on the measure.

"Mr. MARCOS Mr. Speaker, before we proceed to vote on this bill, I want to make it of record that it is the clear intention of the House to increase by two the ten regular and special Sweepstakes races making it all in all, twelve, and that in cases where a sweepstakes race falls in a club race days the Sweepstakes race should be inserted in the club race.

"Mr. ABELEDA. The gentleman from Ilocos Norte is correct. . . . ." (t.s.n., Proceedings in House of Representatives, Congress, May 17, 1956; Italics supplied.)

Appellants cite in their briefs a number of authorities sustaining the view that in the interpretation of statutes susceptible of widely differing constructions, legislative debates and explanatory statements by members of the legislature may be resorted to, to throw light on the meaning of the words used in the statutes. Upon the other hand, the appellees, likewise, quote in their briefs other authorities to the effect that statements made by the individual members of the legislature as to the meaning of provisions in the bill subsequently enacted into law, made during the general debate on the bill on the floor of each legislative house, following its presentation by a standing committee, are generally held to be inadmissible as an aid in construing the statute. Legislative debates are expressive of the views and motives of individual members and are not safe guides and, hence, may not be resorted to in ascertaining the meaning and purpose of the lawmaking body. It is impossible to determine with certainty what construction was put upon an act by the members of the legislative body that passed the bill, by resorting to the speeches of the members thereof. Those who did not speak, may not have agreed with those who did; and those who spoke, might differ from each other. 1

In view of these conflicting authorities, no appreciable reliance can safely be placed on any of them. It is to be noted in the specific case before us, that while Congressmen Marcos and Abeleda were, admittedly, of the view that the additional sweepstakes races may be inserted in the club races, still there is nothing in Republic Act No. 1502, as it was finally enacted, which would indicate that such an understanding on the part of these two members of the Lower House of Congress received the sanction or conformity of their colleagues, for the law is absolutely devoid of any such indication. This is, therefore, not a case where a doubtful wording is sought to be interpreted; rather, if we adopt appellants’ theory, we would be supplying something that does not appear in the statute. It is pertinent to observe here that, as pointed out by one of appellants’ own cited authorities, 2 in the interpretation of a legal document, especially a statute, unlike in the interpretation of an ordinary written document, it is not enough to obtain information to the intention or meaning of the author or authors, but also to see whether the intention or meaning has been expressed in such a way as to give it legal effect and validity. In short, the purpose of the inquiry, is not only to know what the author meant by the language he used, but also to see that the language used sufficiently expresses that meaning. The legal act, so to speak, is made up of two elements — an internal and an external one; it originates in intention and is perfected by expression. Failure of the latter may defeat the former. The following, taken from 59 Corpus Juris 1017, is in line with this theory:jgc:chanrobles.com.ph

"The intention of the legislature to which effect must be given is that expressed in the statute and the courts will not inquire into the motives which influence the legislature, or individual members, in voting for its passage; nor indeed as to the intention of the draftsman, or the legislature, so far as it has been expressed in the act. So, in ascertaining the meaning of a statute the court will not be governed or influenced by the views or opinions of any or all members of the legislature or its legislative committees or any other persons."cralaw virtua1aw library

Upon the other hand, at the time of the enactment of Republic Act No. 1502 in June, 1956, the long, continuous, and uniform practice was that all sweepstakes draws and races were held on Sundays and during the whole day. With this background, when Congress chose not to specify in express terms how the additional sweepstakes draws and races would be held, it is safe to conclude that it did not intend to disturb the then prevailing situation and practice.

"On the principle of contemporaneous exposition, common usage and practice under the statute, or a course of conduct indicating a particular undertaking of it, will frequently be of great value in determining its real meaning, especially where the usage has been acquired in by all parties concerned and has extended over a long period of time; . . . . (59 C. J. 1023)

Likewise, the language of Republic Act No. 1502 in authorizing the increase, clearly speaks of regular sweepstakes draws and races. If the intention of Congress were to authorize additional sweepstakes draws only which could, admittedly, be inserted in the club races, the law would not have included regular races; and since regular sweepstakes races were specifically authorized, and it would be confusing, inconvenient, if not impossible to mix these sweepstakes races with the regular club races all on the same day (and it has never been done before), the conclusion seems inevitable that the additional sweepstakes draws and races were intended to be held on a whole day, separate and apart from the club races.

Appellants’ contention that to compel them to permit the PCSO to use their premises and equipment against their will would constitute deprivation of property without due process of law, deserves no serious consideration. As the lower court has found, every time the PCSO uses appellants’ premises and equipment, they are paid rentals in accordance with the terms of separate contracts of lease existing between them and the PCSO.

The decision appealed from, being in consonance with the above findings and considerations of this Court, the same is hereby affirmed, with costs against the appellants. So ordered.

Paras, C.J., Bengzon, Labrador, Concepción, Reyes, J. B. L., Endencia and Gutiérrez David, JJ., concur.

Endnotes:

---

1. Sutherland on Statutory Construction, 499-501; Ramos v. Alvarez 97 Phil., 844; 51 Off. Gaz. [II] 56087.

2. Vaughan Hawkins, in appendix to Thayer’s Preliminary Treatise on Evidence.

1. PETITION FOR RELIEF; PERIOD FOR FILING NON-EXTENDIBLE. — The petition for relief under Rule 38 of the Rules of Court must be filed within sixty days after the petitioner learns of the judgment, order or other proceeding to be set aside. The period is non-extendible and is never interrupted. It is not subject to any condition or contingency, because it is itself devised to meet a condition or contingency.

2. ID.; LOSS OF REMEDY DUE TO NEGLIGENCE OF PARTY. — Relief will not be granted to a party who seeks to be relieved from the effects of a judgment when the loss of the remedy at law was due to its negligence.

This is an appeal from an order of the Court of First Instance of Manila, denying defendant-appellant’s petition for relief from judgment under Rule 38. The appeal was taken to the Court of Appeals, but that Court has certified the case to us on the ground that the question involved is purely legal.

It appears that on March 12, 1956 a decision was rendered in civil case No. 27201 by the court a quo against the defendant- appellant and in favor of plaintiff-appellee for the amount of P2,125.00, plus attorney’s fees and costs. The court handed down the decision after hearing plaintiff’s evidence, the defendant having failed to appear at the hearing.

Defendant received a copy of the decision on March 16, 1956, but instead of appealing therefrom, it filed on April 2, 1956 a petition entitled "Relief from Judgment." The petition was, however, denied for lack of merit in an order dated April 16, copy of which was received by defendant on April 21.

The judgment subsequently became final and on May 21, 1956, upon motion filed by plaintiff with notice to defendant, the writ of execution was issued.

On May 29, 1956, defendant filed another petition for "Relief from Judgment with Preliminary Injunction." Acting upon the petition, the court a quo on July 21, 1956 denied the same, the court stating that —

"Even considering defendants’ pleading, entitled ’RELIEF FROM JUDGMENT’ dated March 31, 1956, filed on April 2, 1956, to be a mere motion for reconsideration of the decision, which was denied by the Court in its order of April 15, 1956, the proper remedy for the defendant was to appeal from the decision of March 12, 1956, after the Court had refused to reconsider said decision because at that time the decision had not as yet become final. The failure of the defendant to appeal from the decision after the Court had denied to reconsider it before it had become final, deprives the said defendant of the right to file a petition for relief from judgment under Rule 38 of the Rules of Court."cralaw virtua1aw library

The motion for reconsideration of the above-mentioned order having been also denied, defendant filed the present appeal.

The appeal is without merit.

The petition for relief under Rule 38 of the Rules of Court must be filed "within sixty days after the petitioner learns of the judgment, order or other proceeding to be set aside . . . ." The period is non-extendible and is never interrupted. As stated in the case of Palomares et al, v. Jimenez (90 Phil., 773):jgc:chanrobles.com.ph

". . . Considering the purpose behind it, the period fixed by Rule 38 is non-extendible and is never interrupted. It is not subject to any condition or contingency, because it is itself devised to meet a condition or contingency. The remedy allowed by Rule 38 is an act of grace, as it were, designed to give the aggrieved party another and last chance. Being in the position of one who begs, such party’s privilege is not to impose conditions, haggle or dilly-dally, but to grab what is offered him." (See also Rafanan v. Rafanan, 93 Phil., 162, 62 Off. Gaz., 229.)

It is not disputed that defendant received its copy of the decision sought to be set aside and learned of it on March 16, 1956. From that date to May 29, 1956, when said defendant filed its second petition for "Relief from Judgment with Preliminary Injunction", 74 days had already elapsed. The petition, therefore, could no longer be properly entertained, it having been filed 14 days too late.

Moreover, as observed by the lower court, defendant could have appealed the decision it now seeks to set aside but failed to do so, thereby allowing it to become final. Thus, even after April 21, 1956, when defendant received a copy of the order denying its first petition for relief - which may be considered a motion for reconsideration - it still had several days within which to perfect an appeal. Such being the case, it could no longer avail itself of the remedy under Rule 38. Relief will not be granted to a party who seeks to be relieved from the effects of a judgment when the loss of the remedy at law was due to its negligence. (Robles Et. Al. v. San Jose Et. Al., 99 Phil., 658; 52 Off. Gaz. 6193.)

Wherefore, the order appealed from is affirmed, with costs against defendant-appellant.

Paras, C.J., Bengzon, Montemayor, Bautista Angelo, Labrador, Concepción, Reyes, J. B. L. and Endencia, JJ., concur.

Barrera, J., concurs in the result.

1. PARTIES; ACTION TO DECLARE NULL AND VOID A COMMITTEE RESOLUTION; DISPENSABLE PARTY IN CASE AT BAR. — The Cebu Burnt Area Committee approved appellant’s application to lease a certain lot. Thereafter, the same committee approved another resolution amending the first resolution, in the sense of leasing the same lot to appellee. Later, the said committee approved a third resolution, declaring that as no lease contract was entered into by and between the committee and appellant, and the lot subject of the resolution had been leased to appellee the first resolution should be annulled and declared without effect, appellee remaining as lessee of the lot in question. Subsequently, a formal agreement of lease of the lot in question was executed between the committee and appellee. Held: The real party- defendant to the action instituted by appellant is the Cebu Burnt Area Committee, the validity of whose acts and resolutions is put in issue before the court. Such issue cannot be determined with the present defendant alone. As appellant did not include the committee as a party-defendant, the action against appellee cannot proceed.

2. JUDGMENTS; BAR BY PRIOR JUDGMENT; FAILURE TO RAISE AN ISSUE IN PREVIOUS CASE; CASE AT BAR. — The final judgment in the ejectment suit brought by appellee against appellant in case at bar is a bar to the present action between the parties, because appellant could have raised in his defense in that action for ejectment, the resolution of the committee upon which he claims his right to the lease. Having failed to do so, he may not now present said issue as a ground for the present action.

Appeal from a decision of the Court of First Instance of Cebu, Hon. Jose M. Mendoza, presiding, dismissing an action filed therein by Bernardo Benedicto against Ignacio Chiong Osmeña.

The record discloses that on March 3, 1949, the Cebu Burnt Area Committee approved the application of Bernardo Benedicto, plaintiff- appellant, to lease lot No. 2152-G for 10 years at the rate of P306.00 per annum, payable in advance. But on March 24, 1949 the same committee approved another resolution, No. 7, amending the first resolution, No. 6, dated March 3, 1949, in the sense of leasing the same lot No. 2152-G to Ignacio Chiong Osmeña, defendant-appellee herein, for 10 years at the same yearly rental of P306.00, payable in advance. And on July 30, 1949, the said committee again approved a third resolution, No. 8, declaring that as no lease contract was entered into by and between the Committee and Bernardo Benedicto, and the lot subject of the resolution had been leased to Ignacio Chiong Osmeña, Resolution No. 6, dated March 3, 1959, should be annulled and declared without effect, Ignacio Chiong Osmeña remaining as the lessee of said lot No. 2152-G. On March 30, 1949, after the approval of the second resolution, No. 7, a formal agreement of lease of the lot in question was executed between the Cebu Burnt Area Committee as lessor and Ignacio Chiong Osmeña as lessee.

Because of the revocation of the first resolution, No. 6, plaintiff-appellant filed this action in the Court of First Instance of Cebu, alleging that the land in question, No. 2152-G, had been leased to him; that he had introduced improvements thereon; that the period of his lease had not yet been terminated because it was for a period of ten years; and that the revocation of the first lease granted in his favor is illegal, the said revocation having been made without any cause and after the plaintiff had paid the rentals in accordance with the resolution. The plaintiff also alleges in his complaint that the defendant herein, had filed an action for ejectment against him, plaintiff, in the municipal court of the City of Cebu, in which defendant herein sought to oust and eject him, plaintiff, from the lot in question, and that judgment was rendered by said court against the plaintiff herein, which judgment has become final. The prayer of the complaint contains the following requests: that Resolutions Nos. 7 and 8 of the Cebu Burnt Area Committee be declared null and void and without effect and Resolution No. 6 declared as valid and subsisting; that the sheriff be enjoined from executing the judgment rendered by the municipal court in the case mentioned above.

The defendant filed an answer alleging that the lease application of the plaintiff had been voided by the resolutions of the Cebu Burnt Area Committee; that plaintiff has no lease contract with the said Committee; that the resolutions of the Cebu Burnt Area Committee are perfectly legal and valid and the defendant had a perfected lease contract with the Cebu Burnt Area Committee over the land described in the complaint. As special defenses, defendant alleged that the Cebu Burnt Area Committee was a necessary party to the action; that the defendant has already made a valid contract of lease with the Cebu Burnt Area Committee. By way of counter-claim defendant alleged that plaintiff knows that he has no right of action and his present action has caused the defendant actual damages of P3,000, moral damages of P5,000 and attorney’s fees in the sum of P1,000.

Trial having been furnished, the court below rendered the judgment dismissing the action on the following grounds: that the mere approval of Resolution No. 6 does not constitute a contract for the lease of the land between the plaintiff and the Cebu Burnt Area Committee and that, on the other hand, a contract was expressly signed after the approval of the subsequent resolutions; that the plaintiff herein failed to pay the stipulated rentals at the time it became due, wherefore, the Cebu Burnt Area Committee had the right to rescind the said contract and approve the subsequent resolutions and enter into the subsequent contract with the defendant herein. The court further held that as the action involves the determination of the validity of the official actuations of the Cebu Burnt Area Committee, the latter is an indispensable party without whom no final determination can be had.

On this appeal appellant assigns various supposed errors, but it is not necessary for us to consider them for the reason that they are not material and relevant to the present case and one important ground stated in the decision of the court below justifies the dismissal of the action. The ground for dismissal is that the action should have been against the Cebu Burnt Area Committee, the validity of whose resolutions is raised in the complaint. The real party-defendant to the action instituted by plaintiff in this case is the Cebu Burnt Area Committee, the validity of whose acts and resolutions is put in issue before the Court. Such issue cannot be determined with the present defendant alone, without including the Cebu Burnt Area Committee as a party-defendant. As plaintiff-appellant did not include the Cebu Burnt Area Committee as a party-defendant, the action against the present defendant-appellee alone cannot proceed.

Plaintiff also alleges that the defendant-appellee herein had instituted an action of ejectment against him, that judgment was rendered against plaintiff-appellant, and that the judgment had already become final. Said final judgment bars the present action. The plaintiff-appellant could have raised in his defense Resolution No. 6 upon which he claims his right to the lease, in order to thwart the action for ejectment. Having failed to do so in the previous action for ejectment against him, he may not now in this case present said issue as a ground for the present action. This ruling is supported by express provisions of the rules. (Rule 9, Section 10.) The above rule bars the present action against the defendant.

The two grounds hereinbefore mentioned are sufficient to sustain the action of the lower court dismissing the complaint filed in this case, and as indicated above, it is unnecessary for us to resolve the other questions raised in the assignments of error of the Appellant.

The judgment appealed from is hereby affirmed, with costs against plaintiff-appellant.

Paras, C.J., Bengzon, Montemayor, Bautista Angelo, Endencia, Barrera and Gutiérrez David, JJ., concur.

1. PUBLIC UTILITIES; FILING OF APPLICATION FOR CERTIFICATE OF PUBLIC CONVENIENCE; WHEN PRIORITY IN FILING CONSIDERED AN IMPORTANT FACTOR. — Priority in the filing of the application for a certificate of public convenience is, other conditions being equal, an important factor in determining the rights of the public service companies (Batangas Transportation Co. and Eliseo Silva v. Orlanes and Banaag Transportation Co., 55 Phil., 745).

2. ID.; ID.; PREVENTION OF MONOPOLY. — The fact that a present operator already owns and operates a considerable number of units, militates against his application for a certificate of public convenience to operate additional units, because giving the award to him would likely create a monopoly in his particular line of business. Prior experience, while itself useful, cannot create a vested right which would endanger the national economy.

Prior to the last war, Nicolas F. Concepcion was granted a certificate of public convenience to establish, operate and maintain a taxicab service composed of 80 units. On account of the failure of Nicolas F. Concepcion to complete the registration of 80 units despite many extensions given to him, the Public Service Commission, in its order of April 13, 1949 in Case No. 1470, amended his certificate by reducing the number of taxicabs which he could operate to 59 units. Subsequently, Nicolas F. Concepcion sold his certificate to Francisco Benitez, Jr. The sale included the right to operate the 59 units. The Public Service Commission, however, approved the sale for only 27 units, because of the inability of Nicolas F. Concepcion to register 32 of the 59 units authorized in his certificate, as amended. The sale having been approved for 27 units only, several applicants, namely: Paz M. Benitez, Mabait C. Lopez and Amador Santos, separately sought authority to operate the 32 taxicabs units.

It is well to state at this point that these 32 units form part of the total number of taxicabs which the Public Service Commission has already found and declared necessary for operation in the City of Manila and suburbs, and the only question presented before the Commission was to whom of the applicants should the authority to operate the aforesaid 32 taxicabs units be awarded.

The records discloses that Paz M. Benitez filed her applications first, followed by Mabait C. Lopez, daughter of Nicolas F. Concepcion, about two months later, and then by Amador Santos about one year and five months afterwards. Each of the applicants has adduced evidence to establish their financial capacity to purchase and operate.

After going over the evidence, the Public Service Commission awarded the certificate of public convenience to operate the 32 taxicab units to Amador Santos because in its opinion he is the best qualified, considering that Santos is presently a taxicab operator of 87 units of the Mercedez-Benz Bantam type, that he has the experience and know-how in the operation of the taxicab business, and that he has available trained mechanics, drivers, personnel, tools, shop and equipment that would insure regular, continuous and dependable service.

Both applicants, Paz M. Benitez and Mabait C. Lopez have separately filed a petition for review of the decision of the Public Service Commission, which we jointly resolve in this decision.

While it may be true that respondent Santos already has experience in operating a taxicab business and owns a repair and maintenance shop, these considerations alone do not shift the preference in his favor. Experience and availability of garage facilities, although important, are not decisive in the instant case. Evidently, these two factors cannot be expected of new applicants to this business enterprise. The latter will acquire them when they are actually given an opportunity to do so. Moreover, the other two applicants are not entirely without substantial experience in this particular kind of business. Petitioner Paz M. Benitez used to be a director and part owner of a taxicab company and petitioner Lopez gained her experience while employed in her father’s taxicab business prior to the war.

The fact that prominently stands out is that all of the applicants have proven their financial capacity to operate the 32 taxicab units. And since petitioner Paz M. Benitez was the first applicant, we believe and so hold, that she should be awarded the certificate of public convenience to operate them. This is in line with the ruling laid down in Batangas Transportation Co. and Eliseo Silva v. Orlanes and Banaag Transportation Co., 55 Phil., 745, wherein we held:jgc:chanrobles.com.ph

"Priority in the filing of the application for a certificate of public convenience is, other conditions being equal, an important factor in determining the rights of the public service companies."cralaw virtua1aw library

The further fact that respondent Santos already owns 87 taxicab units which he presently operates militates against his application, because giving the award to him would likely create a monopoly in his particular line of business. A monopolistic trend with its concomitant evils can only serve to prejudice public interest, stifling as it does enthusiasm and initiative on the part of those eager to learn. Prior experience, while itself useful, cannot create a vested right which would endanger the national economy.

Indeed, the unjustified and irregular grant of preference to an applicant who filed a petition one and a half years later than another, would obviously breed in the public’s mind, a suspicion that favoritism, with all its sinister complications, play an important role in the award of public utility benefits. To put a premium on tardiness would be to encourage opportunities for underhand transactions that can only result in a miscarriage of justice.

Wherefore, the decision appealed from is hereby reversed. The Public Service Commission is hereby ordered to award the grant of public utility operation in the instant case to first applicant, Paz M. Benitez. So ordered without pronouncement as to costs.

Bengzon, Padilla, Bautista Angelo, Reyes, J. B. L., Endencia and Gutierrez David, JJ., concur.



MONTEMAYOR, J., dissenting:chanrob1es virtual 1aw library

It is with regret that I find myself unable to agree to the learned opinion of the majority, penned by no less than our distinguished Chief Justice. But said opinion, involving as it does not only an important but at the same time a new legal principle or rule governing public utilities, which actually and in effect would reverse and abandon fundamental doctrines hitherto laid down by this Tribunal in a long line of decisions, and faithfully followed by the Public Service Commission, I feel that I am in duty bound not only to voice my dissent, but also to state and adduce the reasons for my stand.

The statement of facts contained in the majority opinion is correct and is supported by the evidence. However, perhaps for a better understanding of these cases, and to set a sort of background, I am adding the narration of facts made by the Public Service Commission, which follows:jgc:chanrobles.com.ph

"By agreement of the parties, and because the petition of each of the three applicants treats of the same subject-matter, the above cases were heard jointly and are hereby jointly decided.

"Each of the applicants, to wit, Paz M. Benitez, Mabait C. Lopez and Amador Santos, asks the Commission to grant to him the right to operate 32 taxicab units in Manila, which units were originally authorized in the certificate of public convenience granted to Nicolas F. Concepcion. Prior to the war Nicolas F. Concepcion had a certificate for 80 units which certificate was reconstituted after the war for the same number of units. By order of April 13, 1949 in Case No. 1470, and because of the failure of Nicolas F. Concepcion to complete the registration of the 80 units inspite of many extensions granted to him, the Commission amended his certificate by reducing to 59 the number of taxicab units which he could operate under his certificate. Subsequently, Nicolas F. Concepcion sold his certificate to Francisco Benitez, Jr., including in the sale the right to operate the 59 units, but the sale was approved for only 27 units, because again Nicolas F. Concepcion had failed to register 32 of the 59 units granted to him. The sale having been approved for 27 units only, which were the ones registered at the time of the sale, the balance of 32 units were considered as dropped from the 59 units authorized in Concepcion’s certificate. It is the right to operate the 32 units which the applicants herein asks the Commission to grant him.

"It should be stated that these 32 units form part of the total number of units which the Commission has already declared as necessary for operation in the City of Manila and suburbs, and the authorization of these units to another party will not result in any increase in the total number of units which the Commission has found as needed in Manila and suburbs. Each of the applicants has filed an opposition to the applications of the others, claiming to have a better right to the 32 units in question. Oppositions were likewise filed by other taxicab operators in Manila, but aside from the fact that these oppositors, with the exception of Antonio Heras and JD Taxi, did not appear at the hearing nor present any evidence, their oppositions are premised on the question of public convenience, but public convenience is not at issue here because, as already stated, these 32 units are part of the total number of taxicab units which the Commission has already declared as needed in Manila and suburbs. Antonio Heras and JD Taxi reserved the right to present a balance sheet to show that their taxicab business has not been profitable, but this balance sheet was not submitted. On the other hand, applicant Amador Santos, who actually operates a taxicab service, submitted a statement of income and expenses for the period January 1st to June 30, 1907, showing the result of the operation of his business.

This statement shows that from January thru June, 1907, applicant Santos has realized profits of from P1,350.00 to over P4,000.00 per month on his taxicab business." (Decision appended to appellants’ brief).

It is true that Paz Marquez Benitez, later referred to as Benitez, filed her application ahead of the other two, Mabait C. Lopez and Amador D. Santos, later referred to as Lopez and Santos, respectively, in fact as early as November, 1955, while that of Santos was filed in June, 1957. It would appear, however, that although Benitez filed her application in November, 1955, she evidently took no steps to follow up her application or to see to it that early action was taken on it, and that it was duly published, as required by law, and a date set for the hearing thereof. According to the record, it was only by order of July 3, 1957, that the Commission set it to be heard on July 15, 1957, at the same time order applicant to publish the order. On the other hand, Santos filed his application on June 24, 1957. He must have exercised diligence and followed it up because the Commission by order of June 28, 1957, set it for hearing on July 15, 1957 and directed him to have the order published. So did Lopez who filed her application about January 24, 1956 and the Commission by order of May 27, 1957, set it for hearing on June 28, 1957, and directed her to have the order published.

It is a matter of public knowledge that the Public Service Commission, with its limited personnel, is overburdened with numerous applications for certificates of public convenience, for increase of units, oppositions thereto, petitions, motions, complaints by public utility operators for violations of the terms and conditions of certificates of public convenience committed by other operators, complaints by the public against operators for inefficient or inadequate service, etc., and unless the applicant, movant, petitioner or complainant is diligent and follows up his application, motion, petition or complaint and have it set for hearing, or have notice of it published if necessary, the Commission is liable to overlook and fail to take action on the same. The same situation obtains in the ordinary courts of justice. How many cases, perhaps meritorious, have been dismissed for failure of plaintiffs to prosecute! A party must be diligent and vigilant in the prosecution of his case before the courts and before the Public Service Commission.

The majority opinion would appear to attach undue importance and stress on the question of priority of application and, as a matter of fact, is deciding this case solely on that point, apparently overlooking and disregarding the more important factor of service to the public and the capacity of an applicant to render said service. Courts in the United States in numerous cases have had occasion to rule that priority of application of several public utility applicants for the same certificate of public convenience and necessity, although a factor, is by far, not the most important, because it is the service to the public — safe, adequate and reliable service that is of paramount importance.

"Where two or more applicants are equally qualified, controlling effect need not be given to priority of filing (Application of National Freight Lines (Iowa), 40 N.W. 2d 612)" (Italics supplied).

"Mere priority in time of application for certificate of convenience and necessity will not of itself govern granting of certificate to carrier and does not determine who is the pioneer in the field." (Eagle Bus Lines v. Illinois Commerce Commission, 119 N. E. 2d 915). (Italics supplied).

The Supreme Court of Illinois, in the following cases declared:jgc:chanrobles.com.ph

"Mere priority in time of application would not of itself govern granting of certificate of necessity and convenience between competing motor bus companies, but it is element to be considered in connection with all other elements and facts, in determining reasonableness of action of Public Utilities Commissioners." (Chicago Motor Bus Co. v. Chicago Stage Co., 122 N.E. 477). (Emphasis supplied).

"If, in pursuance of policy of Public Utility Commission, it would not grant certificates of necessity and convenience to competing lines of motor buses, it would undoubtedly, when two corporations were asking certificate for same purpose, have authority to determine which was capable of serving public best." (Chicago Motor Bus Co. v. Chicago Stage Co., supra). (Emphasis supplied).

"The object and purpose of granting certificates of convenience and necessity for the operation of motor bus lines is to subserve the convenience and necessities of the travelling public. While priority in the field is an element to be considered, it will not of itself govern the granting of the certificate. Chicago Motorbus Co. v. Chicago Stage Co. 287 Ill, 320, 122 N.E. 477. The proper consideration in a matter of this kind is, which applicant under the facts and circumstances shown by the evidence, will best serve the public interest? (Bartonville Bus Line v. Eagle Motor Coach Line, 157 N. E. 175). (Emphasis supplied).

Considering that our legislation on Public Utilities has been patterned after that of the United States, particularly, that of New Jersey, this Tribunal has consistently followed American decisions on the subject. In the case of De los Santos v. Pasay Transportation Co., 54 Phil., 357, 360, this Court stated:jgc:chanrobles.com.ph

". . . Priority of application while an element to be considered, is not ordinarily of sufficient importance to control the granting of a certificate of public convenience. (Chicago Motor Bus co. v. Chicago Stage Co., 287 Ill. 320)." (Italics supplied).

This rule was restated in the case of Mindanao Bus Co. v. Cagayan- Misamis Land Transportation Co., 55 Phil., 827, 829, thus:jgc:chanrobles.com.ph

". . . priority of application in the granting of a certificate of public convenience, although to be considered, is not necessarily a controlling reason for the issuance of the corresponding certificate to the prior applicant. It has been repeatedly held by public utility regulatory bodies that the question to be considered in cases where there are many applications over the same territory is, which applicant or applicants can render the best service, considering the whole territory to be developed and served by the kind of service under consideration and the conditions and qualifications of the respective applicants to furnish the same. Priority in the making of application does not entitle the applicant to an absolute monopoly over the route or routes traversed by it. The priority of application is a factor to be considered, but it does not necessarily control the granting of a certificate of convenience where there are various applications. (De los Santos v. Pasay Transportation Co., 54 Phil., 357). (Emphasis supplied).

In the unpublished case of Mirasol v. Negros Transportation Co., Et Al., G. R. No. 36648, August 31, 1932 (cited in Almario, Public Service Act Annotated, p. 45), this Court stated:jgc:chanrobles.com.ph

"It is asserted that the Commission, as a general rule, passes upon the applications in the order in which they are filed, and the failure to do so is such error that this court must reverse the action of the Public Service Commission. With this contention we can not concur. Neither in the organic law, nor in the rules of the Commission, is such a doctrine laid down. With the innumerable applications that are being filed by the large number of owners of bus lines now operating in the Philippines, it would well near be a practical impossibility always to follow such a rule. Legal niceties are not the primary purpose of the Public Service Commission. The interest of the public is the basic principle that guides their actions." (Emphasis supplied).

Said this Court in the case of Red Line Transportation Co., Inc. v. Taruc, G. R. No. L-6179, November 29, 1954:jgc:chanrobles.com.ph

"‘We are satisfied,’ according to Commissioner Paredes, ’that the evidence of the applicant in this regard reasonably supports the decision granting him the certificate of public convenience therefor, the Commission having in mind that the convenience of the public is of paramount consideration.’ There is no pretense that this finding is not supported by the evidence, for in effect petitioner only disputes its sufficiency, and considering that this is a petition for review, or an appeal by certiorari, said finding cannot now be disturbed." (Emphasis supplied).

We should not lose sight of the fact that the field of public utilities, particularly that of land transportation, is quite unique. In other kinds of business, calling or industry, the important consideration is the profit or benefit to be derived by the owner or applicant. For instance, several persons apply for a particular parcel of public land in the form of homestead, sale or lease. Such applications are made for the exclusive benefit of the applicants themselves. The public is not affected and has no direct interest in the same. Naturally, priority in application is the decisive factor, provided of course, that the several applicants are equally qualified. The same thing would be true with applications for, say, fishery or lumber concession over the same body of water or portion of a public forest.

Not so with public utilities. The grant of a certificate of public convenience for, say, passenger and freight service over a certain line, or for taxicab service within the city implies that said bus or taxicab business not only will be for the benefit and profit of the grantee, but that the service be necessary, and above all, that its operation will redound to the convenience, welfare, accommodation and safety of the public that patronizes the public utility. Before granting the certificate of public convenience, specially when there are several applicants for the same, the Public Service Commission must satisfy itself not only with the capacity, financial standing, experience, training and ability of an applicant, but also that he or it has the facilities to operate the service efficiently, adequately and safely.

The regulations of the Commission require that a land transportation operator may not employ any person who has had a previous criminal record in driving. The operator may have in its employ only those who are courteous and of good moral character, this evidently to protect the public from acts of impudence, dishonesty, such as, theft of luggage, extortion such as charging more than the fare authorized, or abuse of passengers, specially females. One of the conditions imposed in the certificate of public convenience is:jgc:chanrobles.com.ph

"Applicant is hereby required to employ in the operation of his taxicab service, only chauffeurs, agents, inspectors, auditors and other employees who are courteous and of good moral character, and in no case or occasion shall applicant employ persons as chauffeur who have been convicted of homicide or serious physical injuries thru reckless negligence. Applicant is also prohibited from employing student drivers in the operation of the taxicab service herein authorized,"

The grantee of a certificate of public convenience must be in a position to use landworthy vehicles equipped with modern safety devices, specially reliable brakes, steering wheels, and good tires to avoid blow-outs which in many cases prove fatal. The operator must be in a position to guarantee that a vehicle leaving its station or terminal would in all probability reach its destination safely, without any breakdown on the way due to old broken down or faulty equipment. This is necessary not only for the convenience of passengers, but also for their safety, because if a bus or taxicab suffers a breakdown or has engine trouble in an isolated place and is benighted, its passengers may be subject to holdups, robbery, or other kinds of outrage. Incidentally, it may be stated that the certificate of public convenience covering the 32 taxicab units involved in this case, authorizes the operation of said vehicles not only within the City of Manila and suburbs, but, also from any place therein to any point within the island of Luzon, meaning that they make long trips to the provinces.

The operator must be in a position to replace all vehicles with new ones. He must offer adequate and attractive salaries so as to get the best and most competent employees, specially among its drivers. The Commission even regulates and determines the rate of charges. All this shows the care and solicitude that the law takes for the safety, convenience, and economic welfare of the public that is served. No wonder that the courts in the United States and this Tribunal have laid down the doctrine that it is the service to the public in public utilities that is of controlling and paramount importance. Priority in the application is of relatively minor importance, to be considered only when other things are equal, which they are not, in the present case.

But I am afraid that the majority opinion would in effect, perhaps unwittingly, declare the business of public utilities as "free for all", "first come first served", regardless of the qualifications of the applicants, specially their ability to render service to the public, on the basis of their experience, training and success in actual operation, as shown by their existing facilities and past performance. The majority would in effect open the gates of the business of land transportation to anyone who being financially capacitated, thinks that he can operate land transportation service; and if he files his application first, regardless of other considerations, he obtains approval of the same. This theory might be permitted and perhaps will work out in the case of virgin territory where no operator has yet ventured or dared to venture, and an applicant is willing to take the bold venture and risk his capital. The public in said territory will welcome the establishment of the service line, seeing that they have not much choice in the matter, or expectation of a better qualified operator; and the Public Service Commission, most likely, would grant the certificate for lack of other applications in a better position to give more adequate and better service. But this cannot be and may not be allowed in a territory like the City of Manila where there are about 58 persons and entities already and actually operating taxicabs, rendering service which is adequate, efficient and safe because of their experience, training and facilities.

In the present case, the Commission after a study of the case and perhaps after its agents have checked the experience and training of the three applicants and the facilities at their disposal, has found as a matter of fact that Santos is by far the most qualified. Says the Commission in its decision:jgc:chanrobles.com.ph

"Since, on the one hand, none of the applicants has shown any legal light to the units claimed and, on the other, there is no question that public convenience requires that these 32 taxicab units be placed back in operation, the determination of which of the applicants should be granted the authority or certificate to operate the units must necessarily depend on the question of who is the best qualified to put up and operate the service. We do not incline to split the units because experience has shown that a taxicab service is best rendered by an operator with a reasonably large fleet and who, on account of the number of units he operates maintains complete garage facilities and equipment necessary to keep all the vehicles continuously in good running condition, and is able, with the facilities available to him, to immediately repair defective vehicles and put them into service right away. Undoubtedly a small operator, to whom it does not pay to maintain these garage facilities because of the few units he has, in case of breakdown of vehicles, has to withdraw them from the service until such time as, with his limited facilities, he is able to place them back in operation and defective units are out of service for days and days. The three applicants have adduced evidence to establish their financial capacity but we are convince that, of the three, applicant Santos is the best qualified of all. This applicant is presently a taxicab operator of 87 units of the bantam type, Mercedez-Benz make. Our records show that he has always registered on time all the units authorized under his certificates and that the units he has registered are all brand new. He has a garage fully equipped and tooled for the immediate servicing and repair of his taxicabs. It is established that he is in a financial position to immediately acquire and register the units applied for. As to experience and know-how in the operation of a taxicab business, there is no doubt that applicant Santos has a decided advantage over the other two applicants who, according to the evidence, have never operated a taxicab business. A person with experience in and knowledge of the taxicab business undoubtedly can tender a better service and thus promote further the convenience of the public than one who ventures into it for the first time. His familiarity with the business and the ways of operating the service efficiently, the fact that he already has trained mechanics, drivers, personnel and needed shop equipment, insures the rendering to the public of a regular, continuous and dependable service. As between applicants even of identical financial capacity, we consider that the one who is actually operating and with proven experience, competence, facilities and personnel is entitled to preference."cralaw virtua1aw library

The above finding of the Commission is a question of fact amply supported by the evidence. On the basis of that finding of fact, exercising its discretion, the Commission selected Santos as the most deserving and the best qualified among the applicants. Are we authorized to overrule said finding and valid exercise of discretion? The question is answered in the negative, by a long line of cases, American and Philippine. The Supreme Court of Ohio, speaking —

"This Court has repeatedly declared that the Motor Transportation Act has for its object the securing of necessary and convenient motor transportation service to the public, and that the rights conferred upon the recipient of a certificate of convenience and necessity are only such as are incident to the accomplishing of such object, and are granted for the benefit of the public, and not for the benefit of the recipient of the certificate. Where, therefore, the Public Utilities Commission has made a selection between two or more persons, either or all of whom are qualified to efficiently serve the public, and has not abused its discretion in making such selection, its finding and order in that respect is neither unreasonable nor unlawful." (Johnson v. Public Utilities Commission of Ohio, June 8, 1927, 157 N.E. 475). (Italics supplied).

On the same subject matter, said the Court of Appeals of Tennessee, Middle Section:jgc:chanrobles.com.ph

"The court will not substitute its views and discretion for the views and discretion of the commission on questions of fact where there is material evidence to support the conclusions of fact reached by the commission." (Tennessee Cnt. Ry. Co. v. Pharr, 198 S.W. 2d 289). (Italics supplied).

Then the Supreme Court of Wisconsin has the following to say:jgc:chanrobles.com.ph

"Whether the granting of the franchise or amendment sought is in the public interest presents a matter for the exercise of legislative discretion by the commission. It cannot be answered by the application of a proposition of law. It is clear therefore that a trial court must have compelling reasons for reversal where the final conclusion of the agency is based upon a determination which is not only highly discretionary but rests upon the agency’s finding as to what is necessary and convenient in the public interest, two terms of indefinite and varying content." (Gateway Trans. Co. v. Public Service Commission, 34 N.W. 238). (Italics supplied).

"A pure question of fact is to be determined by the commission, rather than by the review court; the court will not substitute its judgment or opinion for that of the commission on a question of fact, unless the order of the commission is clearly against the weight of the evidence and is unlawful or unreasonable; and it will not review the commission’s determination of a question of fact or examine the facts further than to determine whether there is substantial evidence to sustain the determination." (73 C. J. S. 1164). (Italics supplied).

In the case of Batangas Transportation Co. v. Laguna Transportation, 104 Phil., 994; citing the case of Inchausti Steamship Co. v. Public Utility Commission, 41 Phil., 363; and Raymundo Transportation Co. v. Cervo, 91 Phil., 313; Manila Yellow Taxicab Co., Et. Al. v. Canon, 58 Phil., 75; and Padua v. Ocampo Et. Al., G. R. No. L-7579, September 17, 1955, we said that this Court will refrain from substituting its discretion on the weight of the evidence for the discretion of the Public Service Commission on questions of fact. In the case of Banaag v. Intestate Estate of Sisenando Enriquez, G. R. No. L-4266, Feb. 29, 1952, we held that so long as there is evidence for the Public Service Commission reasonably supporting its order and there is no clear abuse of powers, the Supreme Court will not interfere. The same thing was said in the case of Joson v. Santos, 79 Phil., 381, 45 Off. Gaz., 1740. Again, we said in the case of Santiago Ice Plant and Co. v. Lahoz, 87 Phil., 221; 47 Off. Gaz. (12) 403, that "this Court will not substitute its discretion for that of the Commission on questions of fact and will not interfere in the latter’s decision unless it clearly appears that there is no evidence to support it." And in the case of Halili v. Floro, G. R. No. L-3465, Oct. 25, 1951, we said that, "We are not at liberty to substitute our own findings of fact for those of the Commission reasonably supported by evidence even if we have some plausible ground to make the modification." To the same effect was our ruling in the case of Ice and Cold Storage Industries of the Philippines v. Valero, 58 Phil., 7, where we said that "the Court is not authorized to weigh the conflicting evidence and substitute its conclusion for that of the Commission." And in the case of Pangasinan Transportation Co. v. Tambot, 95 Phil., 661, again we said that:jgc:chanrobles.com.ph

"This Court even went to the extent of holding that it ’will refrain from substituting their discretion on the weight of the evidence for the discretion of the Public Service Commission on question of fact and will only reverse or modify such orders of the Public Service Commission when it really appears that the evidence is insufficient to support their conclusions.’ (Manila Yellow Taxicab Co. & Acro Taxicab Co. v. Danon, 58 Phil., 75)."cralaw virtua1aw library

In the case of Halili v. De la Cruz, 88 Phil., 699, we said:jgc:chanrobles.com.ph

"En varias decisiones este Tribunal declaro que no ha imponer su criterio en sustitución del de la Comisión del Servicio P

1. EVIDENCE; CREDIBILITY; WHEN EVIDENCE MAY BE BELIEVED. — Evidence to be believed must not only proceed from the mouth of a credible witness, but it must be credible in itself — such as the common experience and observation of mankind can approve as probable under the circumstances (Moran’s Comments on the Rules of Court, 1957 edition, Volume 3, p. 574, citing Vice Chancellor Van Fleet, in Daggin v. Van Dyk, 37 N. Y. Eq., 130, 132).

2. ID.; ID.; WHEN PROOF OF MOTIVE DEEMED SUFFICIENT. — Mere proof of motive, no matter how strong, is not sufficient to support a conviction if there is no other reliable evidence from which it may be reasonably deduced that the accused was the malefactor.

3. ID.; ID.; WHEN CONFESSION DEEMED SUFFICIENT TO WARRANT CONVICTION. — A mere naked confession uncorroborated by any circumstance inspiring belief in the truth of the confession is not sufficient to warrant the conviction of the accused for the crime of which he is charged (U.S. v. Agatea, 40 Phil., 596).

The Court of First Instance of Batangas finding Nicanor Macatangay guilty, as principal, and David Cunanan guilty as accomplice, of the crime of murder, aggravated by the circumstance of nocturnity, sentenced the former to life imprisonment, with the accessory penalties of law, to indemnify the heirs of the victim Constancio Estiron in the sum of six thousand pesos and to pay one- half of the costs; and the latter to imprisonment for an indeterminate term ranging from six (6) years, one (1) month and eleven (11) days of prisión mayor, as minimum, to twelve (12) years, five (5) months and eleven (11) days of reclusión temporal, as maximum, with the accessory penalties of law, and to pay one-half of the costs.

Both accused appealed.

The court below found appellant Macatangay guilty as charged mainly because of the testimony of two alleged eye witnesses, Marciano Sinag and Cirilo Sakdalan who supposedly saw appellant Macatangay at the scene of the crime at the time it was perpetrated and under circumstances which indubitably shows his participation therein.

The gist of their testimony is to the following effect: In the evening of December 9, 1955, in Barrio Dacanlao, Calaca, Batangas, Constancio Estiron was playing mahjong with Vicente Luistro, Francisco Bautista and Regino Murillo in the western part of the yard of Eufemio Secreto. The mah-jong table was placed under the eaves of Secreto’s house. Estiron was facing the house and had his back to the "baklad" fence enclosing the yard. In another part of the same yard a game of blackjack was going on between Apolonio Mendoza and Cirilo Sakdalan. At about nine o’clock, Mendoza and Sakdalan stopped their game. As Sakdalan was leaving the yard, he saw appellant Macatangay going towards the mango tree near the place where the mah-jong players were. Sakdalan noticed that appellant Macatangay had a lamp in his left hand and a carbine slung on his right shoulder. However, he did not greet Macatangay but proceeded on his way. Meanwhile Marciano Sinag also saw appellant Macatangay walking towards the mango tree and then leaned on it. With him was another person whom Sinag did not recognize. Shortly thereafter two successive shots were heard and the victim Constancio Estiron slumped on the mah-jong table, with blood oozing from two bullet wounds on his back. Death was instantaneous. Immediately after the shots, Sinag saw appellant Macatangay and his unidentified companion fleeing from the place.

The lower court likewise found that appellant Macatangay had the motive to kill Estiron and that prior to the actual killing he had been offering money to anybody who would undertake to kill Estiron. It based its findings on the averment of Florentino Estiron, father of the deceased, that there had been previous altercations between his son and appellant Macatangay; and on the testimony of Regino Murillo that sometime after the elections of November, 1955, appellant Macatangay and his brother, Conrado Macatangay, approached him and offered to pay him to kill Constancio Estiron.

A review of the record has convinced us that credence must not be attached to the testimony of the four prosecution witnesses mentioned above. Marciano Sinag and Cirilo Sakdalan incurred contradictions which lead us to believe that their identification of appellant Macatangay as one of the assailants cannot be relied upon. For one thing while Sinag averred that there was an unidentified person with Macatangay, Sakdalan categorically testified that Macatangay was alone. Also, Sakdalan contradicted himself as to the manner by which Macatangay was allegedly carrying his carbine. At first he demonstrated that Macatangay had the carbine slung on his right shoulder with his right hand on his shoulder holding the carbine strap in place, Then he declared that Macatangay’s "right hand was holding the firearm near the trigger."

Sakdalan likewise claimed that appellant Macatangay was carrying a lamp in his left hand, which lamp presumably helped Sakdalan to recognize him. Sinag never mentioned such an important detail regarding it. Had Macatangay been carrying one, Sinag certainly would have noticed it. It would have caught his attention especially during the time that the assailants were escaping from the scene of the crime, because the vicinity was in comparative darkness and a lighted lamp would have been conspicuous.

By itself, Sakdalan’s statement is incredible. Were appellant Macatangay indeed at the scene of the crime, with a carbine slung on his shoulder and murder in his heart, he would hardly have advertised his presence and hence invite premature discovery by carrying a lamp. If, as found by the lower court, Macatangay had deliberately sought nighttime in order that he may carry out his evil design under cover of darkness and without fear of recognition, surely he would not have brought a lamp and carried it at shoulder level, thus lighting up his own face. The inherent improbability of Sakdalan’s statement brands it as a falsehood. Evidence to be believed must not only proceed from the mouth of a credible witness, but it must be credible in itself — such as the common experience and observation of mankind can approve as probable under the circumstances (Moran’s Comments on the Rules of Court, 1957 edition, Volume 3, p. 574, citing Vice Chancellor Van Fleet, in Daggin v. Van Dyk, 37 N. J. Eq., 130, 132).

Upon the other hand, Marciano Sinag, allegedly went towards the western part of Secreto’s yard, near the "baklad" fence, in order to pass water; and while doing so the light coming from the house of a certain Turing Salazar, Secreto’s neighbor, and the light from Secreto’s house and yard combined to illumine the face of one of the assailants whom he recognized as appellant Macatangay. Yet, as admitted by Sinag himself, between Salazar’s yard and Secreto’s yard there were banana plants. These plants naturally prevented the light in Salazar’s house from penetrating into Secreto’s yard. Then, Chief of Police Benito Castillo, who investigated the incident, found that what was being used inside Secreto’s house was a mere wick lamp which provided poor illumination. True, there was a kerosene lamp in the yard but this was intended for the mah-jong game. As a matter of fact a shade had been placed over the lamp and it was suspended barely a meter above the mah-jong table so that the light therefrom was confined only to the table itself, and hardly reached a radius of four meters. The rest of Secreto’s yard was practically in complete darkness, making it impossible for Sinag to recognize the assailants. Empty shells were found about three meters from the mango tree which in turn was one and a half brazas from the western side of the house. This was where the assailant must have stood when he fired at the victim. According to Chief of Police Castillo said place was outside of the area lighted by the kerosene lamp.

It is by no means probable that Sinag had been able to see the faces of the assailants. This conclusion may be derived from his testimony. He stated that the sound of the successive shots rendered him extremely agitated and afraid for his own life, so much so that he involuntarily stopped urinating; that his eyes were directed at the lower parts of the bodies of the fleeing assailants, so that what was impressed on his mind was the color of their pants; and that immediately thereafter he himself started running away. Under these facts, he could not have seen the faces of the assailants. As a matter of fact, he could not say whether either of them sported any headgear. In such a state of mind he was incapable of observing accurately.

There are strong reasons to suspect that neither Cirilo Sakdalan nor Marciano Sinag was in the vicinity of Secreto’s yard at the time of the commission of the crime. Sakdalan resided at Barrio Pantay, Calaca, Batangas, which is about four or five kilometers from Dacanlao. He claimed to have gone there solely to take a walk. But considering that it was a moonless night and Dacanlao was a secluded barrio without electric lights, it does not seem believable that Sakdalan, a married man, would have chosen to go for a walk to Dacanlao which is a two hours walk from his barrio.

Sinag, who lived at Barrio Sampanga, Balayan, Batangas, which is about two kilometers from Dacanlao, claimed that on the night in question he had intended to go to his aunt’s house in Dacanlao on some highly urgent errand which he did not care to explain. Yet, without having attained his avowed purpose, he dropped in at Secreto’s yard in order to kibitz, he says, at the blackjack game being played there. Then when he heard the fatal shots he ran to Barrio Pantay, which is four or five kilometers from Dacanlao and in the opposite direction to his place of residence. Our doubts as to his presence in Dacanlao on the fatal night are strengthened by the positive affirmation of Pedro Dasdas, barrio lieutenant of Barrio Sampaga, that from 7:30 in the evening to abut midnight of December 9, 1955, Sinag was under Dasdas’ house in Barrio Sampaga, playing blackjack with several other persons.

Sinag’s erratic behavior after he allegedly heard the shots simply does not ring true. He could have run to his aunt’s house which was only about fifteen meters from the place of the shooting, as he had intended to do in the first place. Or he could have run home to his own barrio, Sampaga. Either would have been the natural thing for him to do. There appears no valid reason why it was to Barrio Pantay that he went. And if we are to believe him, he went back to Barrio Sampaga that same night.

If Sakdalan and Sinag had really seen appellant Macatangay at the scene of the crime, they would have immediately informed the authorities. This they did not do. When Sakdalan was questioned by the chief of police about the shooting, he answered that he knew nothing about it. He admitted this during the preliminary investigation (Exhibit 2, 3, 4 and 5), although during the trial he vehemently asserted that he never told the chief of police that he had no knowledge whatsoever about the shooting.

Sinag’s behavior after the crime was of a pattern similar to that of Sakdalan. He did not mention to anyone that he saw Macatangay immediately after the shooting. It was only on February 12, 1956, more than two months after the incident, that he went to the authorities. His long unexplained silence is an index of his lack of knowledge concerning the killing of Constancio Estiron. We doubt that the morning after the killing he informed Florentino Estiron about what he allegedly had seen. Had he done so, the elder Estiron would not have lost time in informing the authorities and the complaint against Macatangay should have been filed considerably earlier than February 13, 1956, the date when it was actually filed.

The witness who testified against appellant Macatangay were unmistakably biased. Florentino Estiron was father of the deceased. And even if we give credence to his statement respecting Macatangay’s motive, in the absence of adequate proof establishing complicity, still Macatangay cannot be convicted. Mere proof of motive, no matter how strong, is not sufficient to support a conviction if there is no other reliable evidence from which it may be reasonably deduced that the accused was the malefactor.

Sinag was a cousin of the deceased and nursed ill feelings against appellant Macatangay for the latter’s failure to intercede in behalf of Sinag’s son who was convicted of the crime of illegal possession of firearms. Sakdalan was a "compadre" of the deceased and a bitter political enemy of Macatangay. Regino Murillo was an intimate friend and frequent companion of the deceased - a fact which certainly would have deterred Macatangay from tempting him with money for the killing of Estiron. Besides, there was no need for appellant to hire anybody to kill Estiron. He could have done it himself, as in fact he did, if we are to believe the prosecution theory. But, by and large, the prosecution evidence does not adequately show that Macatangay was one of the assailants.

Let us now analyze the bases for the conviction of appellant David Cunanan. None of the prosecution witnesses testified having seen him at the scene of the crime. Indeed, Sakdalan was positive that appellant Macatangay was alone. The lower court relied purely on Cunanan’s statements dated February 9, 1956 (Exhibit D) and June 15, 1956 (Exhibit E). While admitting his signatures on both statements, he claimed to have signed them unwillingly. Relating the circumstances under which he signed the first confession, Cunanan testified that while he was on his way to Dacanlao a PC soldier convinced him to go with him to Barrio Palico. When they arrived there said soldier and other soldiers already there tried to make Cunanan sign a prepared statement. He refused, so they maltreated him. Over his face they placed a wet towel which they then twisted from behind and they boxed him on the stomach. Unable to withstand the maltreatment, Cunanan signed the statement, Exhibit D. When the PC soldiers brought him to Justice of the Peace Eulalio Chavez so he could swear to the truth of the signed statement, Cunanan hinted to Judge Chavez that he would tell the truth in court, meaning that he would tell of the maltreatment to which he had been subjected. But inasmuch as he was still under the undue influence of the PC soldiers who were outside the room of Judge Chavez, Cunanan could not inform Chavez as to the details of the maltreatment. Cunanan’s opportunity came during the preliminary investigation conducted by Fiscal Beloso to whom he revealed that Exhibit D was extracted from him by means of force and threats. In view of his repudiation of the first statement there arose a need to get another confession from him. While Cunanan was in the New Bilibid Prisons, he was again threatened by PC Agent Felix Malabanan that should he refuse to sign Exhibit E he would be tortured by one of the prisoners there with whom Malabanan was acquainted. So Cunanan signed the second statement. One important fact supports Cunanan’s claim that he was intimidated and threatened to sign both statements — on both occasions it was PC Agent Malabanan who had interrogated him and had been instrumental in his signing Exhibits D and E.

To make it appear that Cunanan made said statements willingly, the letter (Exhibit F) was introduced in evidence. This letter purports to have been written by appellant Cunanan asking Florentino Estiron to send PC Agent Malabanan to the New Bilibid Prisons so appellant Cunanan could give another statement setting forth in detail the killing. Cunanan vehemently denied having written the letter or signing it. And we are inclined to believe him because a comparison of the signature thereon with Cunanan’s admitted signatures on Exhibits D and E reveals that said letter was signed by a person other than Cunanan.

Exhibit D contains statements which are strikingly incredible. It states that after the elections of 1955, Macatangay offered Cunanan the sum of P500.00 if he would kill Constancio Estiron. The prosecution insist that Macatangay was fully capable of, and indeed did the killing of the victim single-handed. If this were so, then it is ridiculous to think that he would still approach Cunanan with such an infamous proposal. Cunanan does not appear to have been a professional killer. Neither has it been shown that Macatangay was in a position to pay been shown that Macatangay was in a position to pay P500.00 for the killing. During the trial he stated that he was jobless.

According to the same extrajudicial confession, when Cunanan refused to kill Estiron, Macatangay still insisted on promising to pay him the same amount of money if Cunanan would only accompany him. But though Cunanan went with him, he did not commit any act that was indispensable or that materially tended to the killing of Estiron. All he seemed to have done was to witness the killing.

The statements in Exhibit E likewise cannot be believed because it states that it was Cunanan who wrote Florentino Estiron that he would like to make a second confession. But it has been convincingly proven that the letter, Exhibit F was not written by Cunanan. Exhibit E also relates that Cunanan knew the other persons involved in the plot to kill Estiron and that these persons were with Macatangay and Cunanan during the actual shooting. Yet, in Exhibit D, Cunanan says that he was the only one with Macatangay and that he did not know the others who participated in the plot.

Except for Exhibits D and E, there is no other evidence establishing Cunanan’s guilt. An extrajudicial confession made by an accused, shall not be sufficient ground for conviction, unless corroborated by evidence of corpus delicti (Section 96, Rule 123, Rules of Court). A mere naked confession uncorroborated by any circumstance inspiring belief in the truth of the confession is not sufficient to warrant the conviction of the accused for the crime of which he is charged (U. S. v. Agata, 40 Phil., 596). The lack of supporting evidence becomes particularly glaring in view of appellant Cunanan’s absolute repudiation of the two confessions. Furthermore, he presented an alibi to the effect that from December 7 to 12, 1955, he was in his sister’s house in Pasig, Rizal. This was corroborated by Emma Villamar who had attended the Pasig fiesta on December 8, 1955 and had stayed until December 10 in the house of Cunanan’s sister. During the time she was there appellant Cunanan was also there.

The prosecution evidence falls short of the settled yardstick which will justify conviction of the appellants. These have not been proven guilty beyond reasonable doubt, and, hence, are entitled to acquittal.

Wherefore, the appealed judgment is reversed and both appellants are acquitted and ordered released from the custody of the law, with costs de oficio.

Paras, C.J., Bengzon, Bautista Angelo, Labrador, Concepción and Endencia, JJ., concur.

1. HOMESTEAD; PATENTS DULY ISSUED AND REGISTERED IN CONFORMITY WITH SECTION 122 OF ACT NO. 496; COLLATERAL ATTACK NOT ALLOWED; CASE AT BAR. — A homestead patent issued according to the Public Land Act and registered in conformity with the provisions of section 122 of Act No. 496, becomes irrevocable and enjoys the same privilege as Torrens titles issued under the latter Act. The decree can not be collaterally attacked by any person claiming title to, or interest in, the land prior to the registration proceedings. In the case at bar, the homestead patents, the validity of which is sought to be impugned collaterally, were issued more than four years prior to the institution of the case. Hence, appellants’ theory that said patents are null and void has no legal basis. The remaining alternative is that they should yield the possession of the lands to appellees who, by virtue of the ruling of the Director of Lands, are the ones entitled to their possession. However, they should be given an opportunity to prove the value of the improvements they have introduced thereon.

Plaintiffs brought this action against defendants before the Court of First Instance of Zamboanga del Sur to recover the possession of three lots situated in Atimonan, Molave, Zamboanga del Sur, which were covered by Torrens title.

Defendants Ramon Tigle and Luis Descallar claim to be the owners of the lots respectively occupied by them having acquired them from one Numeriano Acasio in 1951, while Juana Sambilon claims that she is occupying a portion different from the lots in questions. Felix Temporada in turn merely claims to be a tenant of his co-defendant Luis Descallar. Defendants set up the common defense that the titles that were issued to plaintiffs over the lots in question by the Bureau of Lands are null and void because they were obtained by them through fraud and misrepresentation. By way of counterclaim, they asked for damages and attorney’s fees.

After trial, the court rendered judgment (1) ordering the relocation of the boundaries of the lots in question to determine whether the portion occupied by Juana Sambilon is covered by the lots claimed by plaintiffs: (2) declaring plaintiffs entitled to the immediate possession of the lots respectively owned by them and ordering Luis Descallar, Ramon Tigle and Felix Temporada to vacate them; and (3) granting defendants Ramon Tigle and Luis Descallar the right to amend their answer by including therein a claim for the value of the improvements they have introduced on the lots in question within 15 days from receipt of the decision with the understanding that if they should fail to do so this privilege will be deemed waived.

Defendants brought this case on appeal directly to this Court upon the plea that only questions of law are involved.

Plaintiffs Sol Samonte and Rustico Samonte are the sons of Felino Samonte who died on December 28, 1951. In 1944, they applied for homestead patents for lots Nos. 5338, 5339 and 5340 with the Bureau of Lands. On September 4, 1950, Original Certificate of Title No. P-100 covering Lot No. 5340 was issued to Rustico Samonte and Original Certificate of Title No. P-101 covering Lot No. 5339 was issued to Felino Samonte, and on October 4, 1950 Original Certificate of Title No. P-197 covering Lot No. 5338 was issued to Sol Samonte. In 1950, they entered into contracts with some tenants to work the lands with the understanding that for the first two years they will not share in the produce that might be harvested, but in 1953 their tenants informed them that they had been driven out of the lands by some squatters among whom were Luis Descallar and Ramon Tigle; and because the latter did not withdraw notwithstanding the intervention of the chief of police, plaintiffs brought the present action.

The question to be determined is whether appellants can question at this late hour the validity of the homestead patents issued by the Bureau of Lands to appellees covering the lots in question upon the ground that they obtained the same through fraud and misrepresentation. The trial court resolved the question in the negative holding that since a homestead patent for which a certificate of title is issued has the same effect and validity as a Torrens title, the same cannot be collaterally attacked. Appellants now assign this as error.

We find no error in the ruling of the trial court. In El Hogar Filipino v. Olviga, 60 Phil., 17, we held that "Once a homestead patent, issued according to the Public Land Act, is registered in conformity with the provisions of section 122 of Act No. 496, it becomes irrevocable and enjoys the same privilege as Torrens titles issued under the latter Act." (See also Aquino v. Director of Lands, 39 Phil., 850; Manalo v. Lukban and Liwanag, 48 Phil., 973.) On the other hand, we also held that "As the land in dispute is covered by plaintiff’s Torrens certificate of title and was registered in 1914, the decree of registration can no longer be impugned on the ground of fraud, error, or lack of notice to defendant, as more than one year has already elapsed from the issuance and entry of the decree. Neither could the decree be collaterally attacked by any person claiming title to, or interest in, the land prior to the registration proceedings" (Sorongon v. Makalintal, 45 Off. Gaz., 3819; See also G. M. Tuason & Co., Inc., v. Quirino Bolaños, 95 Phil., 106; Aguilar, Et. Al. v. Caoagdan, Et Al., 105 Phil., 661; 56 Off. Gaz. [28] 4546; Henderson v. Garrido, Et Al., 90 Phil., 624; Italics supplied).

It appearing that the homestead patents, the validity of which appellants are now seeking to impugn collaterally in this proceeding, were issued way back in 1950, or more than four years prior to the institution of the present case, it is evident that their claim that the trial court erred in not sustaining their theory that said patents are null and void, has no legal basis. The remaining alternative is that they have to yield the possession of the lands to appellees who, by virtue of the ruling of the Director of Lands, are the ones entitled to their possession. They should, however be given an opportunity to prove the value of the improvements they have introduced thereon, as was granted them by the trial court, which however failed to set a date for the presentation of the necessary evidence apparently through an oversight. The decision appealed from is affirmed, with the only modification that appellants should be given an opportunity to present evidence on the value of the improvements they have made on the lands on a date to be set by the trial court. No pronouncement as to costs.

Paras, C.J. Bengzon, Montemayor, Labrador, Concepción, Reyes, J. B. L., Endencia, Barrera and Gutierrez David, JJ., concur.

1. CRIMINAL PROCEDURE; CONFISCATION OF BOND; DETENTION PENDING APPEAL NOT CHANGED INTO SERVICE OF JUDGMENT BY MERE RECEIPT OF DECISION OF APPELLATE COURT. — The accused in case at bar was convicted by the Court of First Instance. He appealed to the Court of Appeals, and in the meantime he was detained in jail. The Court of Appeals found him guilty and its judgment was forwarded to the lower court for execution. The accused filed a motion praying that the promulgation of the sentence be postponed. The court recalled the commitment order it had previously issued and fixed the bond for the provisional release of the accused. The bond was accordingly posted. After another postponement of the reading of the sentence, the judge entered an order for the immediate arrest of the accused. An alias warrant for the arrest of the accused was issued to the bondsman upon its request, but after a specified number of days had elapsed without the bondsman producing the body of the accused, the judge entered an order asking the bondsman to show cause why the bond should not be forfeited. Judgment was entered against the bond. The bondsman contends that the accused was already committed in jail and in virtue of the execution of the judgment of the Court of Appeals, hence, the bond should not be confiscated, Held: The accused could not be considered as committed or placed in jail by virtue of the decision of the Court of Appeals, although he was already in jail when that judgment was received. The fact that his custody as a mere appellant pending appeal continued, and the receipt of the decision of the Court of Appeals, did not change the detention of the accused into service of the judgment. The reading of the sentence was still a necessary step previous to the actual commitment of the accused.

2. ID.; ID.; ID.; BONDSMAN ESTOPPEL FROM ASSAILING RELEASE OF PRISONER; CASE AT BAR. — The bondsman undertook by its bond to guarantee the return or the delivery of the person of the accused in execution of the judgment. The bond filed by it rests on the assumption that the accused was merely to be released before judgment is read to him in order to give him opportunity to settle his personal affairs. By filing said bond the bondsman is now estopped from attacking the release of the accused as invalid. The bondsman can not go back and assail the validity of the bond which it had furnished for a premium, on the ground that the release of the prisoner was unauthorized under the law.

3. ID.; ID.; IMMEDIATE PAYMENT, WHAT CONSTITUTES. — The bondsman in case at bar was allowed to pay immediately only 5% of the bond it had posted, because it allegedly became the victim of deceit and trickery. However, although the check for the required amount was immediately paid, it could not be converted into cash until more than a month thereafter, because the check was not honored. Hence, it can not be considered as an immediate payment, and the court was within its legal rights when it ordered the confiscation of the bond. The present case differs from that of People v. Hernandez. Et. Al., G. R. No. L-13291, August 27, 1959, wherein it was held that immediate payment does not necessarily require payment on the same day, but payment within reasonable time or without intentional delay which may include two days or seven days according to circumstances.

This is an appeal from an order of the Court of First Instance of Manila, Hon. Froilan Bayona, presiding, declaring that the full amount of a bond of P10,000 executed by the appellant Globe Assurance Company, Inc., for the temporary release of accused Horacio Tan be forfeited and that execution against said bond issue at once. The incidents giving rise to the above order are as follows:chanrob1es virtual 1aw library

Horacio Tan was found guilty of estafa by judgment of the Court of Appeals, jointly with two other accused and sentenced to suffer an indeterminate penalty of from 2 years, 11 months, and 10 days of prisión correccional to 6 years, 8 months, and 20 days of prisión mayor. The judgment having been forwarded to the court below for execution, Horacio Tan, through counsel, presented a motion dated December 7, 1955, praying that the promulgation of the sentence scheduled for December 9, 1955, at 8:30 a.m., be postponed for at least two weeks and that in the meanwhile Horacio Tan be allowed his provisional liberty upon the filing of a bond which the court may fix. This motion was granted and on December 9, 1955, Judge Bayona postponed the reading of the sentence to December 27, 1955. In consequence the court recalled the commitment issued on December 6, 1955 and fixed the bond for the provisional liberty of the accused at P10,000. The order is dated December 14, 1955.

On December 21, 1955, prior to the date previously set forth for promulgation of the sentence, counsel for Tan prayed for another postponement of the promulgation of the sentence until January 16, 1956. His motion was granted by Judge Bayona with the conformity of the fiscal on December 24, 1955. On January 12, 1956, again counsel for Horacio Tan filed an urgent motion to postpone the reading of the sentence to February 16, 1956. To this motion appellant Globe Assurance Co., Inc. gave its conformity. The fiscal also presented no objection. On January 16, the judge entered an order for the immediate arrest of Tan and the confiscation of his bond for the reason that he failed to appear notwithstanding the fact that he was duly notified of the reading of the sentence. On the same day, counsel for the appellant Globe Assurance Co., Inc. asked the court to issue an alias warrant for the arrest of Horacio Tan for use by the officers of the company in arresting the latter. This motion was also granted on January 17. On January 18, counsel for Tan presented a motion for the reconsideration of the order of confiscation and arrest of the accused to appear on January 16 was due to the fact that the motion for postponement which counsel filed on January 13, 1956, had been granted by the court. On January 19, the clerk of court asked the chief of police of Manila for the return of the warrant for the arrest of Horacio Tan on the ground that the order of arrest was set aside by an order of the court dated January 19, 1956. The record does not show that the motion for postponement of the reading of the sentence filed on January 12, 1956 had been granted and we do not find from the record what is the basis of the clerk of the court’s request for the return of the warrant of arrest. On January 25, the judge issued the alias warrant for the arrest of the accused as prayed for by the Globe Assurance Co., Inc. On January 26, the judge ordered the Globe Assurance Co., Inc. to explain why its bond of P10,000 should not be confiscated. On February 27, counsel for the Globe Assurance Co., Inc. moved the court for an extension of time to produce the body of the accused, alleging that from the time the company received the order for the presentation of the body of the accused, it has been unable to make the arrest, so another period of 30 days was prayed for. Judge Bayona in an order dated March 8, extended the period for the production of the accused for 15 days. It does not appear that from that time on the body of Horacio Tan was produced by his bondsman, so on July 19, 1956, the judge entered an order declaring that as the bondsman of Horacio Tan had failed to produce the latter’s body, it must show cause why the bond posted should not be forfeited. Judgment was expressly entered against the bond. On July 24, 1956, a writ of execution was issued to the sheriff of Manila, commanding him to collect the amount of the bond of P10,000. On December 4, 1956, counsel for the Globe Assurance Co., Inc. prayed the court that the judgment be reduced to 5% of the bond on the ground that the movant assurance company had been the victim of deceit and trickery. On December 4, 1956, the court acting upon the said bond granted the motion and ordered the Globe Assurance Co., Inc. to pay only P500.00 on its bond provided the same is immediately paid. This order is dated December 14, 1956. On January 8, 1957, the city treasurer of Manila wrote the sheriff of Manila informing him that a check in the amount of P1,536.28 drawn by the Globe Assurance Co., Inc. was not honored by the drawee bank for the reason that its account had been garnished. In view of this report and the sheriff’s return explaining that the check for P500.00 ordered paid by the court was not honored by the drawee bank, the court on January 22, 1957 ordered the forfeiture of the whole amount of the bond of P100,000.

On January 21, the city treasurer of Manila wrote to the sheriff that the check of the Globe Assurance Co., Inc. in the amount of P1,536.28 which had not been honored by the drawee bank, had been redeemed by the Globe Assurance Co., Inc. under EBC Check BC-7264 on January 16, 1957. An affidavit was presented by the president of the Globe Assurance Co., Inc. explaining that when it issued its check in the amount of P1,536.28 for criminal cases Nos. 11476 (the case at bar) and 12227, the company had no knowledge that its funds had been garnished.

After the above proceedings, counsel of the Globe Assurance Co., Inc. filed a motion for reconsideration, dated January 23, 1957, alleging that the bondsman had not knowledge that its funds had been garnished and that upon knowing such garnishment and been garnished and that upon knowing such garnishment and the failure of the sheriff to collect the amount covered by its previous check, it issued another covering the amount. The court denied this motion. A second motion for reconsideration was also denied by the court on June 13, 1957 and thereupon, the Globe Assurance Co., Inc. appealed from dais order of confiscation of the bond of P10,000 and the refusal of the court to reconsider its order to reduce the amount of the bond.

On its appeal to us, counsel for the appellant argues that the Court below erred in granting bail to Horacio Tan after the accused was ordered to be committed to serve his sentence and that it further erred in granting postponement of the hearing of the sentence after it had already committed the accused to serve his sentence. It is true that a copy of the order of commitment dated December 6, 1955, is attached to a motion before us, and said order of commitment contains the following notation: "Detained at City Jail." From this document it appears that when the appeal to the Court of Appeals was prosecuted, the accused Horacio Tan was in jail. It also appears therefrom that this order of commitment was received in the office of the municipal jail on December 8, 1955. But on December 7, 1955, counsel for Horacio Tan presented a motion to postpone reading of the sentence to the accused and on December 9, Judge Bayona postponed the reading of the sentence to December 27, 1955, at 8:30 a.m. And when the judge postponed the reading of the sentence to December 27, 1955 in its order of December 9, 1955, on December 14, 1955, he expressly set aside and considered the commitment issued on December 6, 1955.

From the above circumstances we declared that although an order of commitment had been issued, this commitment was not actually put into effect, not only because the court allowed a postponement of the reading of the sentence, but also because the court expressly recalled said order of commitment in its order of December 14, 1955. It does not follow from the mere fact that Horacio Tan was already in jail when the judgment of the Court of Appeals was received in the city jail on December 8, 1955, confirming that of the Court of First Instance, the accused Horacio Tan could be considered as committed or placed in jail by virtue of the decision of the Court of Appeals. The fact of his custody as a mere appellant pending appeal continued, and the mere fact of the receipt of the decision of the Court of Appeals cannot be considered as charging his detention, a mere detention prior to judgment, into service of the judgment. Aside from this fact, that the receipt in jail the Court of Appeals decision did not ipso facto change his character as a detention prisoner into one of prisoner serving his sentence, the judge below took the stand that a reading of the sentence of the Court of Appeals to the accused was still a necessary step previous to his actual commitment by virtue of said judgment of the Court of Appeals. The contention of counsel for the Globe Assurance Co., Inc. that appellant Horacio Tan was already committed in jail and in virtue of the execution of the judgment of the Court of Appeals is, therefore, unfounded.

But another objection to the argument of counsel for the appellant is the fact that the appellant assurance company undertook by its bond to guarantee the return or the delivery of the person of the accused in execution of the judgment. The bond filed by its rests on the assumption that Horacio Tan was not a prisoner serving sentence, and that he was merely to be released before the judgment is read to him in order to give him opportunity to settle his personal affairs. By filing said bond the appellant is now estopped from attacking the release of Horacio Tan as invalid. The Government would never have released Horacio Tan its bond. The assurance company profitted by the issuance of the bond by the receipt of the premium paid. It can not now go back and assail the validity of the bond which it had furnished for a premium, on the ground that the release of the prisoner was unauthorized under the provisions of law.

The next argument presented on this appeal is that the lower court erred in rescinding its order of December 14, 1956 after the same had been complied with the bondsman and had become final and irrevocable. We find no merit in this argument. The judge ordered the release of Horacio Tan on the bond of P500.00 "provided that the same is immediately paid" (Dec. 14, 1956), but the bondsman did not comply with the condition that the P500.00 be immediately paid because the check it issued was returned to the sheriff (because the drawee bank stated that the check of the bondsman was paid on December 14, 1956, immediately after the said order, the said check could not be converted into cash and the amount of P500.00 was not actually paid until January 16, 1957. The payment made on January 16, 1957 is not an immediate payment as required by the order of December 14, 1956. The judge was, therefore, fully justified in ordering the confiscation of the bond of P10.000 offered by the bondsman-appellant, it having failed to comply with the requirement that the amount of P500.00 be immediately paid.

Our decision in People v. Hernandez, Et Al., 106 Phil., 84 penned by Mr. Justice Cesar Bengzon, is to be distinguished from the case at bar.

In that case we held that immediate payment does not necessarily require payment on the same day, but payment within a reasonable time or without intentional delay which may include two days or seven days according to circumstances, may be interpreted as immediate payment. In the case at bar, however, payment was supposed to be made immediately on December 14, 1956. Payment was actually received more than a month later, that is, on January 16, 1957. The case at bar, therefore differs from said previous case, because the payment made through a bank was not honored and actual collection was made only after a month. Under the circumstances, it cannot be considered as an immediate payment and the court was within its legal rights when it ordered the confiscation of the bond for failure of the bondsman to comply with the condition imposed by it in its order of December 14, 1956.

We are cognizant of the fact that the appellant made good the payment of P500.00 in short time, although not immediately, and we consider that the imposition of the confiscation of the total amount of the bond of P10,000 will be inequitable. We would be lenient to a bonding company if it were not for our experience that most of them have been remiss or tardy in the compliance with their obligations to the courts. We believe that a reduction of the amount to be paid on the bonds from P10,000 to P3,000 should be made as a warning to bonding companies not to accept or to execute bonds unless they have funds with which to meet the obligations thereof.

The order appealed from is hereby modified and the appellant is hereby ordered to pay the sum of P3,000 on its bond. Without costs.

Paras, C.J., Bengzon, Concepción, Reyes, J. B. L., Endencia, Barrera and Gutierrez David, JJ., concur.

1. WORKMEN’S COMPENSATION; DEATH OF JEEPNEY DRIVER BEYOND REGULAR ROUTE; PRESUMPTION THAT DEATH OCCURRED BY REASON OF AND IN THE COURSE OF EMPLOYMENT. — The deceased in the case at bar was the driver of a jeepney operated by Respondent. He was last seen operating the said jeepney on a certain day, and the following day his dead body was found in the province of Quezon, obviously a victim of murder. The route of the jeepney driven by the deceased was within Manila and suburbs, and the Workmen’s Compensation Commission, in denying the claim for compensation filed by the heirs of the deceased, stated that there was nothing in the record which justified the presumption that the deceased was forcibly taken away, at the point of a gun or a knife, from his regular orbit of employment. Held: Section 69, par. (q), Rule 123 of the Rules of Court, establishes the presumption that "the ordinary course of business has been followed," There is no question that immediately before leaving Manila the deceased was engaged in his employment. The presumption is that he performed his duties legally and in accordance with the rules and regulations, because that was his regular obligation. It was incumbent upon respondent to prove that the deceased voluntarily went out of his route and drove his jeepney towards the province of Quezon. In the absence of evidence to that effect, it must be concluded that the deceased was forced by circumstances beyond his will to go outside his ordinary route. There being a presumption under the provisions of Section 43 of the Workmen’s Compensation Act that the deceased died while in the course of his employment, his death must be presumed to have arisen out of said employment. Consequently, his heirs are entitled to receive the compensation provided for by law.

This is a petition to review the decision of the majority of the members of the Workmen’s Compensation Commission, denying a claim for compensation of petitioners for the death of Victorio Santiago, driver of a jeepney operated by the Respondent. The said deceased was the driver of an autocalesa belonging to respondent and was last seen operating said autocalesa at 9:00 in the evening of September 26, 1955. In the morning of September 27, 1955, his dead body was found in Tayabas, Quezon obviously a victim of murder by persons who were at large and whose identities were not known. Apparently the driver must have been attacked with blunt instrument or instruments as an examination of his head disclosed that it was heavily fractured, fragmenting it into many pieces, crushing and lacerating the brain. (Stipulation of Facts). Other pertinent facts in the stipulation of facts submitted by the parties are as follows:jgc:chanrobles.com.ph

"That there is a specific instruction given by the respondent to the deceased to follow the route prescribed by the Public Service Commission. In the case of jeep driven by the deceased, its route is within Manila and suburbs;

That it has always been the practice of the respondent that, whenever the driver is accepted, specific instruction is given to him to follow faithfully the traffic rules and regulations, especially speeding and overloading, and he is requested also not to operate beyond the route given by the Public Service Commission. In case the driver goes beyond the route prescribed by the Public Service Commission, a fine of P50.00 is imposed which is paid by the Respondent. However, in case of the traffic violations especially speeding, it is the driver who pays." (p. 2, Annex "E").

Two of the members of the Commission made the following finding on the question as to whether or not the death of Victoriano Santiago arose out of and was occasioned in the court of his employment.

"There is nothing in the record which justified the assumption that he was forcibly taken away, at the point of a gun or a knife from his regular orbit of employment. The most that may be conceded, however remote it seems, is the possibility that, to use the referee’s own word, "he, the driver, might have been lured," by his assassins to get away from his regular route, only to be robbed of his earnings, the jeep, and, which is the most important, his life. But this only demonstrates the voluntariness of his act of going out to the ordinary way of fulfilling his assigned job. It only adds to the inevitable conclusion that he went with his attackers in disregard not only of the instructions or orders of his employer but also of the rules and regulations of the Public Service Commission, which rules undeniably should be regarded as having the force of law, having been set by authorities for the observance of those to whom they are addressed, this deceased driver not excluded. If there is any material finding that is to be made out in this case, it is that the drivers act in deviating from the route prescribed for his observance constituted a positive factor in bringing about his own demise. His departure from the route where his employment only required him to be, in fact, brought him to an area fraught with extra risks or hazards not foreseeably and ordinary attached to the employment for which he was hired.

This Commission finds that the deceased willfully violated public service rules and regulations and the instructions of his employer in undertaking a trip too far beyond the limits of the line in which his jeepney was authorized to operate. And with this as the basis, the correct determination of the second issue can be reached upon consideration of the following precedents: . . . ." (pp. 5-6, Annex "E").

Associate Commissioner Nieves Baens del Rosario dissented from the opinion of the majority. She says in part:jgc:chanrobles.com.ph

"In connection with the ’arising out of and in the course of employment’ requirement in relation to the presumptions in favor of the employee, Larson makes this comment:chanrob1es virtual 1aw library

‘The burden of proving his cases beyond speculation and conjecture is on the claimant. He is aided in some jurisdiction by presumptions that help to supply the minimum evidence necessary to support an award, and which shift the burden to the defendant when some connection of the injury with the work has been prove.’ (p. 232, W/O.S. by Larson, Vol. 2)

And in this jurisdiction where such presumptions in favor of the employee are provided in our Workmen’s Compensation Act, our Supreme Court in the aforecited Batangas Transportation case ruled:chanrob1es virtual 1aw library

‘Our position is that once it is proved that the employee died in the course of the employment, the legal presumption in the contrary, is that the claim comes within the provisions of the compensation law (Sec. 44). In other words, that accident arose out of the workmen’s employment (2-A).’

Another presumption created in favor of the employee and which is more specific than the all embracing presumption that the claim comes within the provisions of ’the Act’ is that one provided in sub-section 3 of Section 44. It reads: ’3. That the injury was not occasioned by the willful intention of the injured employee to bring about the injury or death of himself or of another.’ This presumption arises from the natural rule, against suicides and once the presumption is established, the burden of proof shifts to the employer. He is, under the Workmen’s Compensation Act, required to present ’substantial evidence’ to overcome such presumption.

In the case of Travellers Insurance Company v. Cardillo, 140 F-2d 10 (1943) the court stated:chanrob1es virtual 1aw library

‘The evidence necessary to overcome the presumption then must do more than create doubt or set up non-compensable alternative explanations of the accident. It must be ’evidence such as a reasonable mind must accept as adequate to support a conclusion.’

No such evidence was presented by the herein Respondent.

In explanation of this policy, the Court held in the same Batangas Transportation case:chanrob1es virtual 1aw library

‘It is not unfair; the employer has the means and the facilities to know the cause; and should not be allowed to profit by concealing it. Nay, he should take active steps to ascertain the cause of the murder; not just continue its operations unmolested.’

And in the case of Travellers Insurance Co. cited above the following reason was given:chanrob1es virtual 1aw library

‘The death of the employee usually deprives the dependent of his best witness — the employee himself — and, especially where the accident is unwitnessed, some latitude should be given the claimant. Hence, presumptions or inference that an unwitnessed death arose out of the employment are allowed in some jurisdictions, where the employer provides no contrary proof, and when last seen deceased was working or had properly recessed.’

Here, the respondent employer has not provided any contrary proof, and Santiago when he was last seen doing his regular work of driving . . ." (pp: 14-16, Annex "G").

Section 43 of the Workmen’s Compensation Act, as amended by Section 24 of Republic Act 772, establishes the following presumptions:jgc:chanrobles.com.ph

"In any proceeding for the enforcement of the claim for compensation under this Act, it shall be presumed in the absence of substantial evidence to the contrary —

1. That the claim comes within the provisions of this Act;

2. That sufficient notice thereof was given;

3. That the injury was not occasioned by the willful intention of the injured employee to bring about the injury or death of himself or of another;

4. That the injury did not result solely from the intoxication of the injured employee while on duty; and

5. That the contents of verified medical and surgical reports introduced in evidence by claimants for compensation are correct."cralaw virtua1aw library

The decision of the majority of the members of the Commission reasons out that the deceased had received specific instructions not to operate beyond the route given by the Public Service Commission (only within the city of Manila), and his act in getting outside of the city was his free and voluntary act, because he disregarded the orders of his employer as well as the rules and regulations of the Public Service Commission. The majority concludes that the deceased willfully violated Public Service Commission rules and regulations and, therefore, death did not arise out of or by reason of his employment.

The flaw in the above reasoning of the majority is that it violates the presumption expressly laid down by the following provision of Section 69, par. (q), rule 123, Rules of Court:jgc:chanrobles.com.ph

"The following presumptions are satisfactory if uncontradicted, but may be contradicted and overcome by other evidence:chanrob1es virtual 1aw library



(q) That the ordinary course of business has been followed;



There is no question that immediately before leaving Manila the deceased was engaged in his employment. The presumption is that he performed his duties legally and in accordance with the rules and regulations, because that was his regular obligation.

Inasmuch as the law established the presumption that the deceased followed the law and regulations, it was incumbent upon respondent to prove that he did otherwise, or that he failed to comply with the regulations. In other words it was incumbent upon the respondent herein to prove that the deceased voluntarily went out of his route and drove his jeepney towards the province of Quezon, not that the deceased voluntarily went to that province thereby going beyond the route provided for the vehicle that he was driving.

Petitioners claim that the deceased voluntarily went out of his ordinary route. Petitioners also have the obligation to prove this fact, this being an affirmative allegation. They failed to do so.

There being no such evidence submitted by the respondent, i.e., that the going of the deceased to Quezon province was made voluntarily by him, we must conclude, pursuant to the presumption that every person performs his duty or obligation, that he was forced by circumstances beyond his will to go outside his ordinary route; in other words that while driving in the city he must have been forced to go out and drive to the province of Quezon on the threats of the malefactors guilty of assaulting and killing him against his (deceased) will.

In the case of Batangas Transportation Co. v. Josefina de Rivera, Et Al., G. R. No. L-7658, prom. May 8, 1956, decided by this Court, in which a driver of a bus, while so driving was suddenly attacked by his assailant who boarded the bus and thereafter stabbed him, the majority of this Court held that the driver died in the course of his employment even if there were indications (not sufficient to prove) that there was personal animosity between the assailant and the victim, which may have caused the assault. In said case the reason for the decision of this Court was that circumstances or indications show that the deceased died while driving the bus, thus that his death must have been due to his employment.

The present case is stronger than the above-cited case of Batangas Transportation Co. v. de Rivera, for while in said previous case there were indications which showed personal animosities which may have been the root cause of the assault, in the case at bar, there are no such indications. On the other hand, there is a presumption that the deceased died while in the course of his employment, and therefore his death must be presumed to have arisen out of said employment.

We, therefore, find that the decision of the majority which has been appealed from is not in consonance with the law and the express provision of Section 43 of the Workmen’s Compensation Law; and that by reason of such express provision of the law, we must hold that Victoriano Santiago died by reason of and in the course of his employment and consequently his heirs are entitled to receive the compensation provided for by law in such cases.

Decision rendered by the court below is hereby set aside, and respondent is hereby ordered to pay the compensation due the heirs under the law. Without costs. So ordered.

Paras, C.J. Bengzon, Bautista Angelo, Reyes, J. B. L., Endencia, Barrera and Gutiérrez David, JJ., concur.

1. PLEADING AND PRACTICE; MOTION FOR RECONSIDERATION; FAILURE TO SET DATE FOR HEARING NOT FATAL IN CASE AT BAR. — The Court of First Instance holds its sessions in Pagadian, Zamboanga del Sur, only once a year on the dates to be fixed by the district judge (Sec. 161, Rev. Adm. Code, superseded by Sec. 54 of Republic Act No. 296). Since it is not shown, in the case at bar, that at the time plaintiff presented the motion to reconsider the order of dismissal, the judge of the Court of First Instance had already set a date for the next term, his attorney could not set the motion for hearing, not knowing on what date or in what month the next yearly session in Pagadian was to take place. Although the attorney for plaintiff could have set the motion for hearing on the first day of the term, his failure to adopt such a step could not have meant negligence or neglect on his part, for he had the alternative to set the motion for hearing as soon as the judge had fixed the following term of the court in that municipality. The rules should be interpreted liberally, and under the circumstances, the motion which was accepted by the clerk of court without the designation of the date for its hearing, cannot be considered as a mere scrap of paper; it suspended the period of appeal.

This is an original action for certiorari and prohibition filed with us to reverse an order of the court of First Instance of Zamboanga del Sur, Hon. Mateo Canonoy, presiding, setting aside a previous order of the court dated December 29, 1956, dismissing an action instituted by herein respondent Vicenta Benodin against the herein petitioners, Alberto Inesin, Eulogio Torneto and Felix Waga, which is civil case No. 194 of the Court of First Instance of Zamboanga del Sur, Pagadian.

In said civil case No. 194 herein respondent Benodin brought action against petitioners Inesin, Torneto and Waga to recover from them damages for serious physical injuries suffered by plaintiff for having been thrown out of a tartanilla in which she was riding, which was struck from behind by a bus owned and operated by Alberto Inesin and Eulogio Torneto, and driven recklessly by Felix Waga. Upon receiving the summons counsel for defendants moved to dismiss the complaint by reason of the fact that a final judgment had already been previously rendered between the same parties for the same cause of action and that Waga has not been shown to have any relation with his other co-defendants. The motion was set for hearing on September 27, 1955. The court granted the motion and dismissed the action on the ground that the driver of the bus had been prosecuted in the justice of the peace court of Pagadian for negligence, and found guilty, and in said cause case plaintiff Vicenta Benodin had not reserved the right to institute an independent civil action.

The record shows that counsel for defendants received copy of the order of dismissal on October 7, 1955 and on October 31, they presented a motion for the reconsideration of the order of dismissal. The motion for reconsideration does not give notice of the day set for the hearing thereof, but on December 6, 1956, such notice was presented asking the clerk of court to set the motion for reconsideration for hearing on December 22, 1956. The motion was opposed because it contained no notice of hearing and it therefore, should be considered as a mere scrap of paper which did not affect the running of the period for the judgment to become final. On December 29, 1956, the court below granted the motion for reconsideration and set aside the order of dismissal. Thereupon attorney for defendants presented a motion to reconsider the order which is set forth above but the court denied this motion for reconsideration on January 15, 1957.

In the case at bar it is the claim of the petitioners before us that as the motion for reconsideration, submitted by the defendant in the court below to set aside the judgment, was not accompanied by a notice of the date set for the hearing of the motion, said motion should be considered as a mere scrap of paper and did not produce the effect of suspending the period of appeal. So, it is claimed that the judge below, in setting aside the order of dismissal, acted in excess of his jurisdiction.

It is to be noted that the Court of First Instance holds its sessions in Pagadian, Zamboanga del Sur, only once a year on the dates to be fixed by the district judge (Sec. 161, Rev. Adm. Code, superseded by Sec. 54 of Republic Act No. 296). As the sessions in Pagadian are not continuous throughout the year, and since it is shown that, at the time respondents herein presented the motion to reconsider the order of dismissal, the judge of the Court of First Instance had already set a date for the next term, attorney for the movant, respondent herein, could not set the motion for hearing, not knowing on what date or in what month the next yearly session in Pagadian was to take place. It is true that the attorney for the respondent could have set the motion for hearing on the first day of the term, asking the clerk of court to set it for hearing on that date, but the failure to adopt such a step could not have meant negligence or neglect on the part of attorney for the movants, for said attorney had the alternative to set the motion for hearing as soon as the judge has fixed the following term of the court in that municipality. Under the rules, which we have enjoined to be interpreted liberally and under the circumstances, we are not prepared to declare that the motion, which was accepted by the clerk of court without the designation of the date for it hearing, was a mere scrap of paper. Judging from the order of the respondent court, the next sessions after the sessions in September, 1955, must have taken place in October, 1956, when the motion for reconsideration in question was set for hearing by counsel for the movant-respondent. Perhaps it was only in December, 1956, that the plaintiffs had been apprised that the court was going to hold its term of court during the month of December, 1956 and it was on the sixth day of that month that said attorney for the plaintiff, respondent herein, promptly notified the clerk and the adverse party of the date of said hearing. The judge, who should know this special provision of the Judiciary Act on the holding of sessions in Pagadian, denied the motion to strike out the motion for reconsideration for failure to contain a notice of the date of hearing, and he must have taken into account the fact that there is only one term of the court in Pagadian.

Wherefore, the petition should be, as it is hereby denied, without costs.

Paras, C.J., Bengzon, Montemayor, Bautista Angelo, Concepción, Reyes, J.B.L., Endencia, Barrera and Gutiérrez David, JJ., concur.

1. CRIMINAL PROCEDURE; PLEADING AND PRACTICE; PRO FORMA RULE; COMPLIANCE WITH PARAGRAPH (a), SECTION 2, RULE 117 OF THE RULES OF COURT. — Accused was convicted for theft of 15 cavans of palay. A motion for reconsideration was filed wherein it claimed that as the ownership of the land from which the palay was allegedly stolen is involved, the case should be suspended until after such ownership shall have been decided by the competent court. A supplemental motion was filed by the accused, arguing that the palay supposed to have been stolen appears to have been owned jointly by him and the complainant, and therefore could not be the subject of theft. Query: Are the motions in question pro forma? Held: They are not, because they raise valid questions of law and fact. Said motions point to errors of law in the judgment prejudicial to the substantial rights of the accused. They satisfy paragraph (a), section 2 of Rule 117 of the Rules of Court.

2. ID.; ID.; REQUIREMENT IN RULE 37 OF THE RULES OF COURT; GENERAL STATEMENT NOT SUFFICIENT. — Under Rule 37 of the Rules of Court the movant must point out the findings or conclusions in the judgment which allegedly are not supported by the evidence or are contrary to law. Hence, if a motion only makes a general statement that the evidence is insufficient to sustain the judgment or that the same is contrary to law, it cannot be said to satisfy said rule.

3. ID.; ID.; RULE APPLICABLE ONLY IN CIVIL CASES, NOT IN CRIMINAL CASES. — Rule 37 on new trial as found in the Rules of Court is applicable only in civil cases. The rule regarding new trial in criminal cases is contained in Rule 117. The pro forma rule is not applicable in criminal cases.

This is an appeal from an order of the Court of First Instance of Negros Occidental, Hon. Jose Teodoro, Sr., presiding, holding that the judgment of the Justice of the Peace court from which the appeal was made to the Court of First Instance in Criminal Case No. 4567 of said court, had already become final, by failure of the defendants to file their notice of appeal on time, and remanding the record to the Justice of the Peace for the execution of the latter’s judgment.

Defendants-appellants were charged in the Justice of the Peace court of La Castellana, for the crime of theft of 15 cavans of palay, belonging to the complainant Pedro Monsale. A trial was held in the Justice of the Peace Court, and on April 18, 1955, the Justice of the Peace found the accused guilty of theft and sentenced each of them to pay a fine of P200.00, and in case of insolvency, to suffer subsidiary imprisonment. Accused Llorico received a copy of the decision on April 27, 1955, and accused Colmenares, on April 29, 1955. On May 2, 1955, the attorney for the accused filed a motion to reconsider the judgment, on the ground that in accordance with the documentary evidence presented during the trial it appears that the case involved the question of ownership of the land from which the palay allegedly stolen was raised. Some of the documents presented at the trial show that one J. L. Vda. de Colmenares is in possession of a parcel of land for which she had applied for registration; that a portion thereof, evidently the one from which the palay was harvested, was claimed by the District Forester to be part of the national park and as a matter of fact accused Colmenares had been informed by the District Forester of the Government claim to this portion of the land. The defendants also submitted tax receipts covering the property and two applications to purchase fertilizers, accompanied by promissory notes signed by complainant Pedro Monsale and Urbano Pamonel and guaranteed by one Modesto Colmenares.

The above motion for reconsideration was set for hearing on May 27. The private prosecutor filed an opposition thereto and a petition to strike the same, on the ground that it was pro forma. We have not been able to locate the order of the court on this motion for reconsideration, but it appears that on June 1, 1955, the record of the case was received by the clerk of Court of First Instance of Negros Occidental. We presume that the Justice of the Peace court did not act on said motion for reconsideration, or denied the same. Whichever happened is immaterial in this case. Appeal bonds were filed by the accused on May 28, 1955.

Upon the docketing of the case in the Court of First Instance, and on April 10, 1956, the assistant provincial fiscal immediately presented a motion to dismiss the appeal, on the ground that the decision of the justice of the peace court sentencing the accused, having been received by the latter on April 29 and the motion for reconsideration having been denied on May 28, 1955, a period of more than 15 days had elapsed when the appeal was perfected, for the reason that the motion for reconsideration did not interrupt the period to perfect an appeal, it being a pro forma motion and, therefore, the decision of the Justice of the Peace court had become final when the appeal was entered. The Court of First Instance sustained this motion to dismiss the appeal. From this order an appeal was prosecuted to the Court of Appeals, which endorsed the case to Us as involving exclusively questions of law.

It is argued on behalf of appellants that the motion filed in the Justice of the Peace court was not a pro forma motion, and secondly, that said court had already ruled that the judgment had not become final when it forwarded the record to the Court of First Instance after appellants filed their notice of appeal. In reply, the Solicitor General supports the ruling of the court below that the motion was pro forma and that the same was apparently devoid of merit, and it was therefore presented only for delay.

If, as we find from the documentary evidence submitted at the trial, the accused Colmenares is owner or possessor of a parcel of land belonging perhaps to his mother, which parcel of land has been declared and taxes thereon paid for, the complainant must have been his tenant, and the claim that the motion was for purpose of delay is unfounded. In the motion for reconsideration in question it is claimed that as the ownership of the land is involved the case should be suspended until after such ownership shall have been decided by the competent court. In their supplemental motion dated May 16, counsel for the accused again argued that the palay supposed to have been stolen appears to have been owned jointly by the accused and the complainant and therefore could not be the subject of theft. Both the first motion for reconsideration and the subsequent one cannot be said to be pro forma; they raise valid questions of law and fact. Said motions point to an error of law in the judgment prejudicial to the substantial rights of the accused. It can not therefore be said to be merely pro forma; it satisfied paragraph (a) of Section of Rule 117 of the Rules of Court, which is as follows:jgc:chanrobles.com.ph

"SEC. 2. Grounds for a new trial. — The court shall grant a new trial on any of the following grounds.

(a) That errors of law or irregularities have been committed during the trial prejudicial to the substantial rights of the defendant;"

We also find that the pro forma rule in motions for reconsiderations has been incorrectly applied in the case at bar, a criminal case. The pro forma motion for new trial was first established in Section 497 of the original Code of Civil Procedure, which reads as follows:chanrob1es virtual 1aw library



(2) If the excepting party filed a motion in the Court of First Instance for a new trial, upon the ground that the evidence was insufficient to justify the decision, and the judge overruled said motion, and due exception was taken to his overruling the same, the Supreme Court may review the evidence and make such findings upon the facts by a preponderance of the evidence, and render such final judgment, as justice and equity may require. But, if the Supreme Court shall be of the opinion that this exception is frivolous and not made in good faith, it may impose double or treble additional costs upon the excepting party, and may order them to be paid by the counsel prosecuting the bill of exception, if in its opinion justice so requires."cralaw virtua1aw library

The pro forma motion alleged that the evidence is insufficient to justify the decision and was a requirement in order that the Supreme Court may review the evidence submitted and unless such a motion for insufficiency of evidence is presented in the trial court, the Supreme Court could not review the evidence and make its own findings of fact.

When the present Rules of Court were promulgated the above mentioned provision of Section 497 of the Code of Civil Procedure was eliminated. Under the present rules, Rule 37, the movant must point out the findings or conclusions in the judgment which allegedly are not supported by the evidence or are contrary to law. Hence if a motion only makes a general statement that the evidence is insufficient to sustain the judgment or that the same is contrary to law, it can not be said to satisfy Rule 37, Sec. 2, of the Rules of Court. Motions under the old Code of Civil Procedure were not considered as motions pro forma or intended for delay, and were not considered as interrupting the period to perfect an appeal. This change has been explained by Chief Justice Moran, as follows:jgc:chanrobles.com.ph

"When the motion is made upon the caused mentioned in subdivision (c), that is, mistake of fact or of law, it was not necessary, under the old procedure, to set forth, in detail, the reasons in support of the grounds alleged in the motion. This ruling is repealed by the new provision, which requires the motion to point out specifically the findings or conclusions of the judgment which allegedly are not supported by the evidence or are contrary to law, making express reference to the testimonial or documentary evidence or to the provisions of law alleged to be contrary to such findings or conclusion. The reason for the old rule was obvious, for a motion for new trial on the ground of mistake of fact was presented as a matter of form, as necessary antecedent to appeal. Under the new procedure, motions of that kind are no longer antecedents to appeal. For this reason, where a motion for a new trial filed under the third paragraph of this section and fails to "point out specifically the findings or conclusions of the judgment which are not supported by the evidence or which are contrary to law, making express reference to the testimonial or documentary evidence or to the provisions of law alleged to be contrary to such findings or conclusions," it shall be treated as a motion pro forma intended merely to delay the proceedings and it shall not interrupt or suspend the period of time for the perfection of an appeal." (1 Moran, 1957, pp. 515-516).

Rule 37 on mew trial as found in the new Rules is applicable only in civil cases. The rule regarding new trial in criminal cases is contained in Rule 117. The pro forma rule is, therefore, not applicable in criminal cases, and the Court below erred in applying said rule to the criminal case now under consideration.

Wherefore, the order of dismissal of the appeal must be reversed and the case remanded to the Court of First Instance of origin for trial on the merits. Without costs.

Paras, C.J. Bengzon, Montemayor, Bautista Angelo, Endencia, Barrera and Gutiérrez David, JJ., concur.

1. CONTRACTS; RULE OF PARI DELICTO; CASE AT BAR. — In the contracts entered into between petitioner and respondent and his wife, the latter were allowed to continue occupying the area possessed by them as long as they paid to petitioner the sum agreed upon the between them. In exchange, respondent and his wife renounced whatever rights they had to buy the portion of the lot occupied by them in order that petitioner might acquire the entire lot, which was being resold by the National Government to tenants pursuant to Republic Act. No. 1400. As a result a transfer certificate of title was issued to petitioner. Petitioner now assails the validity of the contract of lease on the grounds that it lacks the written consent and approval of the Secretary of Agriculture and Natural Resources, and that it was entered into by him without the consent of his wife. Held: The pari delicto rule is applicable. Petitioner would not have obtained a certificate of title over the entire lot, at least without protracted litigation, had not respondent and his wife agreed to give up their own claims over the portion they occupied. The sole consideration for respondent’s renunciation of whatever rights he might have over the lot was petitioner’s promise to allow him to remain in possession at a nominal rate. To annul this covenant now would deprive the respondent and his wife of any benefit thereunder, after petitioner had reaped full advantages from it. The interests of society demand that bad faith and fraud be severely repressed, and the Courts cannot consent to their furtherance, directly or indirectly. The pari delicto rule applies equally well to petitioner’s wife although she was not a signatory to the contract of lease and waiver, because she had sufficiently manifested by affirmative acts her unequivocal concurrence to the contract in controversy (See Montederamos v. Ynonoy, 56 Phil., 457; La Urbana v. Villamor, 59 Phil., 644). She and her husband benefited from the transaction and continuously received the agreed rentals paid by Respondent. Acceptance of benefits raises a strong presumption of knowledge and consent. Hence, the Court of Appeals correctly upheld the validity of the lease.

2. ID.; FIXING OF PERIODS; POWER OF COURTS UNDER ARTICLE 1197 OF THE CIVIL CODE. — The mere absence of a provision under Article 1687 of the new Civil Code does not prevent the court from fixing periods under the general rule of Article 1197, since the contract in case at bar was basically a compromise to settle contradictory claims and not an ordinary lease.

This is a petition for certiorari to review the decision of the Court of Appeals in CA—G. R. No. 19207—R.

For several years prior to 1944, Eduvigis Aquino was the lessee of Lots Nos. 16-B and 17, Block 3, of the "Cappellania de Concepción", better known as the Tambobong Estate, and the owner of a house of strong materials built thereon. On April 10, 1944, she (Aquino) sold the said house, together with the leasehold rights, to the spouses David Inco and Leonor Constantino, petitioners herein. In the contract of sale, it further appears that on the aforementioned lots, Andres Ochanco, Julio Sanchez, Narciso Cruz, Moises Mangali and Florentino Magkalas had their own respective residential house as sub-tenants of Aquino. In 1946, respondent Godofredo Enriquez purchased from Narciso Cruz the latter’s house which he thenceforth occupied to the present.

Sometime in 1947, the landed property constituting the Tambobong Estate was acquired by the National Government for sub-division and resale to tenants pursuant to Republic Act 1400. Both petitioners and respondent seem to have been desirous of purchasing the lots afore- described from the Government. On May 6, 1952, however, petitioner David Inco, as Party of the First Part, and respondent Godofredo Enriquez and A Santos, as Parties of the Second Part, entered into a contract of lease and waiver (Exhibit C or 3), whereby petitioner Inco agreed to allow respondent Enriquez to continue occupying the area possessed by him as long as respondent paid to Inco the sum of P1.00 a month or P12.00 a year as rental. In exchange, respondent Enriquez executed an affidavit (Exhibit D or 4) whereby he renounced whatever rights he had to buy the portion of the lot occupied by him in order that Inco might acquire the entire lot.

As a result of the agreement, Transfer Certificate of Title No. 36877 was thereafter issued to Inco and his wife. Informed of this fact, respondent Enriquez sought to have the contract of lease annotated at the back of the title. The Register of Deeds, however, refused to effect the annotation, on the ground that it did not bear the approval of the Department Secretary. Awakened by that action of the Registrar, petitioners declined to accept further payment of rentals, and on May 16, 1955, initiated an action in the Court of First Instance of Rizal to have the lease contract declared null and void or else to have the court fix the duration of the same.

From the decision of the trial court adjudging the contract of lease to be a nullity, respondent Enriquez appealed to the Court of Appeals. The latter modified the judgment by upholding the validity of the lease and fixing a term of ten years, counted from May 16, 1955, for its duration.

The spouses Inco, in their petition for certiorari, aver that the contract of lease is a nullity, and that the Court of Appeals had no authority to fix a period.

Petitioners base their first contention on the propositions that (1) the contract of lease lacks the written consent and approval of the Secretary of Agriculture and Natural Resources; and that (2) it is void without the consent of the wife of David Inco.

Reliance is placed on paragraph 16 of Administrative Order No. R-3 on Landed Estates (which took effect on November 15, 1951, having been published in the Official Gazette for December, 1951, Vol. 47, No. 12, p. 6275) providing:jgc:chanrobles.com.ph

"Prohibition to Alienate. — The applicant shall not sell, assign, encumber, mortgage, or transfer, his right under the agreement to sell or in the property subject thereof without first obtaining the written consent of the Secretary of Agriculture and Natural Resources and this condition shall subsist until the lapse of 5 years from the date of the execution of the final deed of sale in his favor and shall be annotated as an encumbrance on the certificate of title of the property that may be issued in his favor."cralaw virtua1aw library

And also upon paragraph 18 of the same order:jgc:chanrobles.com.ph

"Any sale, assignment, encumbrance, mortgage, or transfer made in violation of the provisions of the next two preceding paragraphs hereof is null void, and shall be sufficient ground for the Secretary of Agriculture and Natural Resources to cancel the deed of sale and to order the reversion of the land to the government and the forfeiture of whatever payments made on account thereof. In case, however, a deed of sale has already been issued, the violation of the said provisions shall be sufficient ground for the Secretary of Agriculture and Natural Resources to take appropriate action in court with a view to obtaining the reversion of the land involved to the government. All lands reverted to the government shall be disposed of as vacant lot."cralaw virtua1aw library

But the Court of Appeals held that said paragraphs notwithstanding the action for annulment could not prosper because the parties are in pari delicto and hence, the contract cannot be set aside or enforced by either party; for under the said doctrine, the courts will leave the parties where it finds them.

Petitioner Inco, however, urges that the application of the pari delicto doctrine is not unlimited, in that whenever public policy is considered as advance by allowing either party to sue for the relief against the transaction, the rule does not apply.

It may well be argued that the contract did not violate the administrative regulations invoked, since it was concluded before the government recognized Inco’s preferential right to the lot. But even disregarding this aspect of the case, we believe that the Court of Appeals correctly applied the pari delicto rule, and that petitioner Inco and his wife cannot invoke furtherance of the public policy in order to escape from it. Undeniably, petitioners would not obtained a certificate of title over the entire lot, at least without protracted litigation, had not the spouses Enriquez agreed to give up their own claims over the portion they occupied. It is equally obvious that the sole consideration for the withdrawal of the Enriquezes from the field was Inco’s promise to allow them to remain in possession at a nominal rental. To annul this covenant now would deprive the Enriquezes of any benefit thereunder, after the Incos had reaped full advantages from it. Without any possibility of a return to the status quo ante, the annulment would practically amount to a fraud upon the respondents Enriquez. Such a result would not further public policy but defy all justice and equity. The interests of society demand that bad faith and fraud be severely repressed, and the Courts cannot consent to their furtherance, directly or indirectly.

It is noteworthy that the prohibition against alienations of the lots in the Tambobong estate is primarily designed to protect the occupants from being rendered homeless through improvidence, ignorance, or sheer necessity. These dangers do not flow the maintenance of the contract now before us. Neither party will be deprived of a homestead, their respective houses being erected on different portions of the lot. Furthermore, the decision of the Court of Appeals limits the tenure of respondent Enriquez to ten years, and the ultimate reversion of the entire lot to the registered owner is thereby assured. Thus construed, the contract is not ultimately violative of the purposes of the statute and there is no reason, therefore, why equity should not prevail.

The pari delicto rule applies equally well to the wife, Leonora Constantino. Although not a signatory to the contract of lease and waiver, she has sufficiently manisfested by affirmative acts her unequivocal concurrence to the contract in controversy (See Montederamos v. Ynonoy, 56 Phil., 457; La Urbana v. Villamor, 59 Phil., 644). She and her husband benefited from the transaction and continuously received the agreed rentals paid by the respondent from the execution of the contract until 1955. Acceptance of benefits raises a strong presumption of knowledge and consent.

Appellants argue that Article 1687 of the new Civil Code does not authorize the Court to fix a term where the rental is payable yearly. The mere absence of a provision under Article 1687 does not prevent the court of power to fix periods under the general rule of Article 1197, since this contract was basically a compromise to settle contradictory claims and not an ordinary lease.

Wherefore, we find no error in the judgment of the court of Appeals, and hereby affirm it, with costs against petitioners David Inco and his wife, Leonora Constantino.

Paras, C.J. Bengzon, Montemayor, Bautista Angelo, Labrador, Concepción, Endencia and Barrera, JJ., concur.

1. TAXATION; APPEAL FROM DECISION OF COLLECTOR OF INTERNAL REVENUE, WHEN PERFECTED. — Under Section 11 of Republic Act 1125, any person adversely affected by a decision or ruling of the Collector of Internal Revenue, may file an appeal in the Court of Tax Appeals within 30 days after the receipt of such decision or ruling. In the case at bar since petitioners had filed their appeal (petition for review and refund) beyond the aforementioned 30-day period, the respondent Court of Tax Appeals had acquired no jurisdiction to entertain said appeal, and the dismissal of the same was proper.

2. ID.; CLAIM FOR REFUND; TAXPAYER MUST COMPLY WITH REQUIREMENTS OF BOTH SECTION 306 OF THE NATIONAL INTERNAL REVENUE CODE AND SECTION 11 OF REPUBLIC ACT NO. 1125. — A taxpayer who has paid the tax, whether under protest or not, and who is claiming a refund of the same, must comply with the requirements of both Section 306 of the National Internal Revenue Code and Section 11 of Republic Act No. 1125; that is, he must file a claim for refund with the Collector of Internal Revenue within 2 years from the date of his payment of the tax, as required by said Section 306 of the National Revenue Code, and appeal to the Court of Tax Appeals within 30 days from receipt of the Collector’s decision or ruling denying his claim for refund, as required by said Section 11 of Republic Act No. 1125. If, however, the Collector takes time in deciding the claim, and the period of two years is about to end, the suit or proceeding must be started in the Court of Tax Appeals before the end of the two-year period without awaiting the decision of the Collector. This is so because of the positive requirement of Section 306 and the doctrine that delay of the Collector in rendering decision does not extend the peremptory period fixed by the statute. (See U.S. v. Michel, 282 U.S. 656, 51 C. Ct. 284; P. J. Kiener & Co., Ltd. v. David, 92 Phil., 945, 49 Off. Gaz. [5] 1852 College of Oral & Dental Surgery v. Court of Tax Appeals, 102 Phil., 912, 54 Off. Gaz. [29] 7055.

3. ID.; TAX ASSESSMENT; APPEAL MUST BE FILED WITHIN 30 DAYS FROM RECEIPT OF COLLECTOR’S ASSESSMENT. — In the case of a taxpayer who has not yet paid the tax and who is protesting the assessment made by the Collector of Internal Revenue, he must file his appeal with the Court of Tax Appeals within 30 days from his receipt of the Collector’s assessment, as required by Section 11 of Republic Act No. 1125. Otherwise, his failure to comply with said statutory requirement would bar his appeal and deprive the Court of Tax Appeals of its jurisdiction to entertain or determine the same.

4. ID.; AUTHORITY OF THE DEPUTY COLLECTOR OF INTERNAL REVENUE TO DEAL ON REFUND CASE. — Section 309 of the National Internal Revenue Code and Par. 4 (9), Section 7, as amended, of the Internal Revenue Manual on Audit and Investigation Procedure and General Circular No. V-182, vest exclusively in the Collector of Internal Revenue the authority to compromise, or to credit or refund taxes erroneously or illegally received, that is, when the action, in a manner of speaking, is against the Government. The purpose is to assure that no improper compromise, credit, or refund is made to the prejudice of the Government. But where the action to be taken is to deny the request for refund and demand the payment of the deficiency tax from the taxpayer, the same is well within the authority of the Deputy Collector and is final and binding unless revoked by the Collector.

From the resolution of respondent Court of Tax Appeals (in C.T.A. Case No. 418) dismissing, for lack of jurisdiction, their petition for review and refund of income taxes paid, petitioners Allison J. Gibbs and Esther K. Gibbs, interposed the present petition for review.

On March 14, 1956, petitioners protested the deficiency income tax assessment in the amount of P12,284.00, exclusive of surcharge and interest, for the year 1950, issued against them by the respondent Collector of Internal Revenue, on the ground that said deficiency assessment was based on a disallowance of bad debts and losses claimed in their income tax return for 1950.

On August 28, 1956, respondent Collector rejected petitioners’ protest and reiterated his demand. On October 3, 1956, petitioners sent a check in the amount of P12,284.00 (Check No. C-643963) to respondent Collector as payment of said deficiency assessment, at the same time demanding the immediate refund of the amount paid.

On October 26, 1956, respondent Collector denied the request for refund, and required petitioners to pay the amounts of P1,469.04 and P1,997.26 as surcharge, interest, and compromise penalty. Notice of said denial was received by petitioners on November 14, 1956.

On September 27, 1957, petitioners filed with respondent Court a petition for review and refund, with a motion for suspension of collection of penalties. On October 7, 1957, respondent Collector filed a motion to dismiss, on the ground that the petition was filed beyond the 30-day period provided under Section 11, in relation to Section 7, of Republic Act No. 1125, which motion, was opposed by petitioners on October 24, 1957.

On December 2, 1957, respondent court dismissed the petition, in a resolution which, in part, reads:jgc:chanrobles.com.ph

"Petitioners paid the tax in question on October 3, 1956, at the same time asking for the refund of the same. He received the letter of respondent denying said request for refund on November 14, 1956. Pursuant to Section 11 of Republic Act No. 1125, petitioners had only 30 days from November 14, 1956, or up to December 15, 1956, within which to file their appeal to this Court. However, petitioners appealed from the aforesaid decision of respondent only on September 27, 1957, more than ten (10) months from November 14, 1956. Obviously, the appeal has been filed beyond the 30-day period set by law.

"Petitioners contend that Section 306 of the Revenue Code provides that judicial proceedings may be instituted for recovery of an internal revenue tax within two years from the date of payment. This was so before the enactment of the Republic Act No. 1125. . . .

". . . petitioners should have appealed to this Court within 30 days from November 14, 1956, that is, not later than December 15, 1956, pursuant to Section 11 of Republic Act No. 1125. As the appeal was filed on September 27, 1957, we have no jurisdiction to entertain the same."cralaw virtua1aw library

On December 11, 1957, petitioners filed a motion for reconsideration of said order, but the same was denied by respondent court on January 31, 1958. Hence, this petition for review.

The only issue to be resolved in this case is whether or not petitioner’s appeal (petition for review and refund) from the decision of respondent Collector of Internal Revenue, was filed with respondent Court of Tax Appeals within the statutory period.

Section 7 of Republic Act No. 1125, 1 in part, provides:jgc:chanrobles.com.ph

"SEC. 7. Jurisdiction. — The Court of Tax Appeals shall exercise exclusive appellate jurisdiction to review by appeal, as herein provided:jgc:chanrobles.com.ph

"(1) Decisions of the Collector of Internal Revenue in cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties imposed in relation thereto, or other matters arising under the National Internal Revenue Code or other law or part of law administered by the Bureau of Internal Revenue; . . . ." (Emphasis supplied.)

And Section 11 of the same Act, in part, states that:jgc:chanrobles.com.ph

"SEC. 11. Who may appeal; effect of appeal. — Any person, association or corporation adversely affected by a decision or ruling of the Collector of Internal Revenue, the Collector of Customs or any provincial or city Board of Assessment Appeals may file an appeal in the Court of Tax Appeals within thirty days after the receipt of such decision or ruling. . . ." (Emphasis supplied.)

It is not disputed that petitioners received on November 14, 1956, notice of respondent Collector’s decision denying their request for a refund of the deficiency assessment paid by them. Pursuant to the above-quoted provision of Section 11 of Republic Act 1125, they had 30 days from said date within which to file their appeal (petition for review and refund) with respondent court. However, they filed said appeal only on September 27, 1957, or more than ten (10) months thereafter, much beyond the aforementioned 30-day period within which to file the same. Consequently, respondent court had acquired no jurisdiction to entertain said appeal and the dismissal of the same was proper.

Petitioners, however, contend that although their appeal was filed beyond said 30-day period, respondent court still had jurisdiction over the same, by virtue of the provision of Section 306 of the National Internal Revenue Code, 2 which reads:jgc:chanrobles.com.ph

"SEC. 306. Recovery of tax erroneously or illegally collected. — No suit or proceeding shall be maintained in any court for the recovery of any national internal-revenue tax hereafter alleged to have been erroneously or illegally assessed or collected, or of any penalty claimed to have been collected without authority, or of any sum alleged to have been excessive or in any manner wrongfully collected, until a claim for refund or credit has been duly filed with the Collector of Internal Revenue; but such suit or proceeding may be maintained, whether or not such tax penalty, or sum has been paid under protest or duress. In any case, no such suit or proceeding shall be begun after the expiration of two years from the date of payment of the tax or penalty." (Emphasis supplied.)

The contention is devoid of any merit. In the case of Johnston Lumber Co., Inc. v. Court of Tax Appeals, Et. Al. 101 Phil. 654; 43 Off. Gaz. [16] 5226, we held:jgc:chanrobles.com.ph

"It is contention of petitioner that the aforequoted provisions cannot stand side by side because, whereas Section 306 of the Tax Code required the filing of a claim before an action in court may be maintained, Republic Act No. 1125 which confers jurisdiction upon the Court of Tax Appeals to take cognizance of appeals from the decisions of the Collector of Internal Revenue does not require any more the filing of said claim but merely provides that said appeal may be filed within 30 days from receipt of such decision or ruling.

"A careful analysis of the provisions of both enactments would negative the assertion of petitioner. The specific provision of Republic Act No. 1125 regarding appeal (Section 11) was intended to cope with a situation where the taxpayer, upon receipt of a decision or ruling of the Collector of Internal Revenue, elects to appeal to the Court of Tax Appeals instead of paying the tax. For this reason, the latter part of said Section 11, provides that no such appeal would suspend the payment of the tax demanded by the Government, unless for special reasons, the Court of Tax Appeals would deem it fit to restrain said collection. Section 306, of the Tax Code, on the other hand, contemplates of a case wherein the taxpayer paid the tax, whether under protest or not, and later on decides to go to court for its recovery. We can, therefore, conclude that where payment has already been made and the taxpayer is merely asking for its refund, he must first file with the Collector of Internal Revenue a claim for refund before taking the matter to the Court, as required by Section 306 of the National Internal Revenue Code and that appeals from decisions or rulings of the Collector of Internal Revenue to the Court of Tax Appeals must always be perfected within 30 days after the receipt of the decision or ruling that is being appealed, as required by Section 11 of Republic Act No. 1125. We see no conflict between the aforementioned sections of said laws." (Emphasis supplied.)

Under the above ruling, it is clear that Section 306 of the National Internal Revenue Code should be construed together with Section 11 of Republic Act No. 1125. In fine, a taxpayer who has paid the tax, whether under protest or not, and who is claiming a refund of the same, must comply with the requirements of both sections, that is, he must file a claim for refund with the Collector of Internal Revenue within 2 years from the date of his payment of the tax, as required by said Section 306 of the National Internal Revenue Code, and appeal to the Court of Tax Appeals within 30 days from receipt of the Collector’s decision or ruling denying his claim for refund, as required by said Section 11 of Republic Act No. 1125. If however, the Collector takes time in deciding the claim, and the period of two years is about to end, the suit or proceeding must be started in the Court of Tax Appeals before the end of the two-year period without awaiting the decision of the Collector. This is so because of the positive requirement of Section 306 and the doctrine that delay of the Collector in rendering decision does not extend the peremptory period fixed by the statute. 3

In the case of a taxpayer who has not yet paid the tax and who is protesting the assessment made by the Collector of Internal Revenue, he must file his appeal with the Court of Tax Appeals within 30 days from his receipt of the Collector’s assessment, as required by said Section 11 of Republic Act No. 1125. Otherwise, his failure to comply with said statutory requirement would bar his appeal and deprive the Court of Tax Appeals of its jurisdiction to entertain or determine the same.

We do not find the cases of Collector of Internal Revenue v. Avelino, et al (100 Phil., 327; 53 Off. Gaz. 645) and Collector of Internal Revenue v. Zulueta, Et. Al. (100 Phil. 872; 52 Off. Gaz. [19] 6532) invoked by petitioners applicable to the instant case. The issue presented in both cited cases was whether or not the Court of Tax Appeals may enjoin the Collector of Internal Revenue from collecting through summary administrative methods, the income tax liabilities of Messrs. Avelino and Zulueta, 3 years after the filing of their income tax returns, and not whether their petition for review was seasonably filed with said court, in accordance with Section 11 of Republic Act No. 1125, or Section 306 of the National Internal Revenue Code. Furthermore, the instant case involves a refund of taxes paid, while the cited cases involved the legality of the collection of taxes by summary administrative methods.

Appellants, in their supplemental brief, urge two additional grounds for the revocation of respondent court’s decision. It is claimed that since the letter-decision dated October 26, 1956 denying their request for refund of the deficiency income tax paid by them, was signed not by the Collector, but merely by the Deputy Collector of Internal Revenue, it could not be considered as a final decision on their said request. They cite as authority, Section 309 of the National Internal Revenue Code reading partly:jgc:chanrobles.com.ph

"SEC. 309. Authority of Collector to make compromise and to refund taxes. — The Collector of Internal Revenue may compromise any civil or other case arising under this Code or other law or part of law administered by the Bureau of Internal Revenue, may credit or refund taxes erroneously or illegally received, or penalties imposed without authority, and may remit before payment any tax that appears to be unjustly assessed or excessive.



"The authority of the Collector of Internal Revenue to credit or refund taxes or penalties under this section can only be exercised if the claim for credit or refund is made in writing and filed with him within two years after the payment of the tax or penalty." (Emphasis supplied.)

and No. 9 of Paragraph 4, Section 7, as amended, of the Internal Revenue Manual on Audit and Investigation Procedure and General Circular No. V-182, providing:jgc:chanrobles.com.ph

"9. The authority to remit before payment any tax that appears to be unjustly assessed or excessive, or credit or refund taxes erroneously or illegally received under Section 309 of the National Internal Revenue Code shall be exercised exclusively by the Collector of Internal Revenue." (Emphasis supplied.)

Appellants contend that under the above-quoted provisions, only the Collector has the authority to deal in refund cases. This is fallacious. In the first place, the cited provisions refer to the authority of the Collector of Internal Revenue to compromise, or to credit or refund taxes erroneously or illegally received, that is, when the action, in a manner of speaking, is against the Government. In such case, the authority is vested exclusively in the Collector himself. The purpose is to assure that no improper compromise, credit, or refund, is made to the prejudice of the Government. But in the case before us, the action taken by the Deputy Collector in his letter of October 26, 1956, was precisely to deny the request for refund and demand the payment of the deficiency tax from petitioners. Certainly, this is well within the authority of the Deputy Collector and is final and binding unless revoked by the Collector.

The other point raised that the letter of October 26 is not final because in addition to denying the refund it demanded payment of surcharges and interests is, likewise, without merit. The ruling in the case of St. Stephen’s Association, Et. Al. v. Collector of Internal Revenue (104 Phil., 314; 55 Off. Gaz. [13] 2243) cited by petitioners, is inapplicable to the instant case, for there the Collector wrote two letters to the taxpayers, one on April 6, 1955, denying their first request for the withdrawal and cancellation of the assessment, and another on July 11, 1955, denying their second request and stating in its last paragraph: "This decision becomes final thirty days after your receipt hereof unless an appeal is taken to the Court of Tax Appeals within the same period, in accordance with the provisions of Republic Act No. 1125." Undoubtedly, this second letter, and not the first was the final decision of the Collector in that case, because it finally resolved the then pending petition for reconsideration filed by the taxpayers. In the instant case, after the letter of October 26, 1956 denying petitioners’ request for refund, no further action was taken either by petitioners or the Collector, both parties treating the letter-decision as final. In fact, petitioner’s next move was to file their petition for review and refund with respondent court. The Collector on the other hand, consequent to his understanding that said letter-decision was final, filed his motion to dismiss with respondent court, on the ground that petitioners’ petition was filed out of time and, therefore, the court acquired no jurisdiction to entertain the same.

Wherefore, finding no error in the decision of the court a quo, the same is hereby affirmed, with costs against the petitioners. So ordered.

Paras, C.J. Bengzon, Montemayor, Bautista Angelo, Labrador, Concepción, Reyes, J. B. L., Endencia and Gutierrez, David, JJ., concur.

Endnotes:

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1. Effective June 16, 1954.

2. Com. Act No. 466, as amended.

3. U.S. v. Michel, 282 U.S. 656, 51 S. Ct. 284; P.J. Kiener & Co., Ltd. v. David, 92 Phil., 945, 49 Off. Gaz. [5] 1852, College of Oral & Dental Surgery v. Court of Tax Appeals, 102 Phil., 912; 54 Off. Gaz. [29] 7055).

1. RETIREMENT GRATUITY; REPUBLIC ACT 660; EMPLOYEES ENTITLED TO ITS BENEFITS. — Republic Act 660 applies only to employees in the Government service at the time of its enactment on June 16, 1951, with some exceptions, mentioned therein.

2. ID.; ID.; ID.; CONDITIONS FOR RETIREMENT; THREE-YEARS CONTINUOUS SERVICE. — Section 12(a) of Republic Act 660 requires as a condition sine qua non, three years continuous service immediately before retirement.

3. ID.; ID.; APPROVAL OF RETIREMENT EFFECTIVE MONTHS OR YEARS BEFORE. — Applications for retirement or resignation may be approved effective months or years before.

The Government Service Insurance System has appealed the decision of the Manila court of first instance requiring it to give Apolonio Nicdao the retirement benefits of Republic Act 660 as amended.

He is not entitled to retirement, maintains the appellant, because he was not in the Government service on June 16, 1951, when Act 660 took effect.

According to the Manila court, "Apolonio Nicdao worked as a blacksmith in the Bureau of Public Works continuously from 1921 to 1941. From June 4, 1947 to September 30, 1949, he was again employed in the Bureau of Public Works as a blacksmith with a salary of P5.50 a day. On October 1, 1949, he was laid off due to lack of funds. on March 16, 1950, he worked again in the same bureau and as a blacksmith at the same rate of P5.50 a day, until March 31, 1950 when he was again laid off due to lack of funds." Said court also found he filed an application for retirement under Act No. 2589, which application was granted by the Office of the President on October 11, 1955.

There is no denying that Republic Act 660 applies only to those in the Government service at the time of its enactment, with some exceptions mentioned in the Act itself. But Nicdao contends (and the court below maintains) that he was in the service on June 16, 1951, and/or that he belongs to one class of exceptions.

Basis of his first contention is the approval of the retirement on October 1, 1955. If I was retired on October 1955, argues Nicdao, that means I was in the service up to that time. But the President’s approval said, "retired effective on the day following his last day of service" - which was April 1, 1950. Obviously, Nicdao could not be in the service in 1951, because he was retired in 1950. To uphold his contention, would entail payment of salary up to October 1955. In administrative practice, there is nothing unusual in the approval of a retirement or resignation effective or years before.

Even admitting for the sake of argument, says Nicdao, that I was separated from the service in April 1950, my case falls under section 26 of Republic Act 660 that extends the benefits thereof to "any officer or employee whose position was abolished" before June 16, 1951.

The contention is untenable. When he was "laid off" for lack of funds, his position was not "abolished." In fact in 1950, he was again employed after he had been "laid off" a few months before (1949) - which could not have been done if his position had been "abolished" when he was laid off in 1949.

In this connection the official statement of the Bureau of Public Works on the matter (Exh. 3) reads:jgc:chanrobles.com.ph

". . . He (Nicdao) was laid off not due to the reorganization under Republic Act No. 422 nor due to the elimination of his position and salary under Republic Act No. 563, because he was last assigned to work on special project (project No. 1010-844, Marking and Crating of 10 steel towers 110 ft.) with a limited appropriation of only P2,800.00. Simultaneously, said project was finished and funds exhausted on March 31, 1950, hence his lay-off from the service on April 1, 1950."cralaw virtua1aw library

But the strongest argument of appellant rests on Sec. 12(a) of Republic Act 660 which requires as a condition sine qua non, three years continuous service immediately before retirement. From the service records of Nicdao, as hereinbefore related he can not be held to have rendered such three-years continuous service.

Before concluding, we may advert to appellee’s motion to dismiss the appeal on the ground that it was filed out of time. We find that his computation is based on the service of copy of the decision on the Government Corporate Counsel — not on actual receipt thereof by Atty. Leovigildo Monasterial and/or Atty. Panganiban, both of the Government Service Insurance System. The records show that the Government Corporate Counsel never filed its appearance for the respondent- appellant. All pleadings for respondent had always been signed by said two attorneys. In fact as early as October 18, 1957 (before the decision in November 9, 1957), the Government Corporate Counsel had filed a "manifestation" that his office was not appearing for the G. S. I. S. and that the latter’s counsel of record were Attorney’s Monasterial and Panganiban.

Wherefore, the judgment is revoked, and the Government Service Insurance System is absolved from Nicdao’s claims. So ordered.

Paras, C.J. Montemayor, Bautista Angelo, Labrador, Concepción, Reyes, J. B. L., Endencia, Barrera and Gutierrez David, JJ., concur.

1. COURTS; CONCURRENT JURISDICTION; FIRST COURT TO ACQUIRE IT EXCLUDES OTHERS. — The rule is that when two or more courts have concurrent jurisdiction, the first to validly acquire it takes it to the exclusion of the rest (Valdez v. Lucero, 43 Off. Gaz., No. 11, 2835; People v. Livera, 94 Phi., 771, see also Lumpay Et. Al., v. Hon. Moscoso, G. R. No. L-14723, May 27, 1959).

2. ID.; ID.; CHOICE OF COURT A MATTER OF PROCEDURE; WHEN IT BECOMES ONE OF JURISDICTION. — While the choice of the court where to bring an action, where there are two or more courts having concurrent jurisdiction thereon, is a matter of procedure and not of jurisdiction, the moment such choice has been exercised the matter becomes jurisdictional. Such choice is deemed made when the proper complaint or information is filed with the court having jurisdiction over the crime, and said court acquires jurisdiction over the person of the defendant, from which time the right and power of the court to try the accused attaches. It is not for the defendant to exercise that choice, which is lodged upon those who may validly file or subscribe to the complaint or information under sections 2 and 3 of Rule 106 of the Rules of Court.

In criminal Case No. 305, petitioner-appellant Quirico Alimajen was charged with the crime of qualified theft in a complaint filed before the Justice of the Peace Court of Barotac Nuevo, Iloilo, by the Chief of Police of the town. It appears that the accused was arrested upon warrant issued by the Justice of the Peace Court, but was subsequently released when his application for bail bond, dated December 14, 1957, was approved. On December 23, 1957, he filed a motion waiving his right to a preliminary investigation and asking that the case be certified instead to the Court of First Instance of Iloilo for trial on the merits. The Justice of the Peace denied the motion, claiming that it had already acquired original jurisdiction over the criminal case. Defendant moved for a consideration of the order, but the motion was likewise denied; whereupon, he filed with the Court of First Instance of Iloilo a petition for a writ of preliminary injunction and prohibition against the respondent Justice of the Peace. On February 19, 1958, the petition was dismissed for lack of merit. This dismissal is now the subject of the instant appeal.

That the Justice of the Peace Court has concurrent jurisdiction with the Court of First Instance of Iloilo in this case, by virtue of section 87, subsection (c), No. 3 of the Judiciary Act of 1948 (Rep. Act 296), the amount involved in the criminal charge being only P183.30, is not questioned. The main point of inquiry is whether or not the respondent Justice of the Peace erred in refusing to forward the criminal case to the Court of First Instance of Iloilo on the basis that his court already acquired original jurisdiction over the same. The answer, we believe, must be in the negative. The rule is that when two or more courts have concurrent jurisdiction, the first to validly acquire it takes it to the exclusion of the other or the rest (Valdez v. Lucero, 76 Phil, 356; 42 Off. Gaz. No. 11, 2835; People v. Livera, 94 Phil., 771; see also Lumpay, Et Al., v. Hon. Moscoso, 105 Phil., 968; 58 Off. Gaz. [30] 5185).

While the choice of the court where to bring an action, where there are two or more courts having concurrent jurisdiction thereon, is a matter of procedure and not jurisdiction, as suggested by the appellant, the moment such choice has been exercised, the matter becomes jurisdictional. Such choice is deemed made when the proper complaint or information is filed with the court having jurisdiction over the crime, and said court acquires jurisdiction over the person of the defendant; from which time the right and power of the court to try the accused attaches (see People v. Blanco, 85 Phil., 296; 47 Off. Gaz., [7] 3425; Crisologo v. People, 94 Phil., 477; 50 Off. Gaz., [3] 1021). It is not for the defendant to exercise that choice, which is lodged upon those who may validly file or subscribe to the complaint or information under sections 2 and 3 of Rule 106 of the Rules of Court.

The complaint in Criminal Case No. 305 was filed by the Chief of Police, and the Justice of the Peace was able to place the accused under its authority and control (jurisdiction) thru the coercive power of arrest and in later allowing his release on bail. There is no indication that the case was brought before the inferior court merely for purposes of preliminary investigation as the appellant would tend to imply in liking this case with that of Reñaria v. Judge Veluz, 91 Phil., 473. In fact, the lower court had already set the case for hearing. Of course, the right to preliminary investigation, being statutory, may be waived, but the fact that appellant manifested in the Justice of the Peace Court a waiver of such right does not prove that the complaint was filed therein only for that purpose and not likewise to try the case on the merits, which was for those who filed it to determine, and for the lower court to appreciate.

Wherefore, the appeal should be dismissed and the case remanded to the Justice of the Peace Court for the trial on the merits. Costs against Appellant.

Paras, C.J., Bengzon, Montemayor, Bautista Angelo, Labrador, Concepción, Endencia, Barrera, and Gutiérrez David, JJ., concur.

1. JUDGMENTS BY DEFAULT; INFERIOR COURTS; FAILURE TO APPEAR SOLE GROUND FOR DEFAULT; TELEGRAPHIC MOTION FOR POSTPONEMENT EQUIVALENT TO APPEARANCE. — Failure to appear, not failure to answer, is the sole ground for default in inferior courts, and a telegraphic motion for postponement sent on the day of the hearing is equivalent to an appearance therein.

2. ID.; ID.; ID.; EXCESS OF JURISDICTION. — In the case at bar, while it is true, that the justice of the peace court did not learn of defendant’s telegraphic motion for postponement until after the hearing in which an order of default was entered against him, said court was already aware of said motion when, on the following day, it rendered a judgment of default against defendant. In so doing, the court exceeded its jurisdiction and appellant acted within his right when he filed a motion with the same court for the lifting of the default judgment and for a new trial.

3. ID.; ID.; ID.; DENIAL OF MOTION TO LIFT JUDGMENT; GRAVE ABUSE OF DISCRETION. — Where it appears that defendant’s failure to be present at the hearing in the justice of the peace court was due to excusable negligence, and he had a good and meritorious defense to the complaint, it was grave abuse of discretion for the inferior court to refuse to lift its default judgment and give defendant a chance to present his defense.

4. ID.; ID.; ID.; WHEN CERTIORARI MAY BE ALLOWED. — While the proper remedy against an inferior court’s order denying the appellant’s motion to life the default judgment and for new trial is seasonable appeal and not certiorari, the latter remedy may be allowed in meritorious cases where the right to appeal has been lost through excusable negligence or mistake of petitioner, and where the denial of the writ would leave petitioner without a remedy.

5. ID.; PETITION FOR RELIEF; WHEN ORDER OR JUDGMENT IS FINAL; OTHERWISE, NEW TRIAL IS THE REMEDY. — It is a well-known rule that a petition for relief under Rule 38 of the Rules of Court may be filed only when the order or judgment from which it is sought has already become final and executory, so that as long as the judgment against which relief is sought has not yet become final, said petition is not available as a remedy. Instead, the aggrieved party may file a motion for new trial, under Rule 37 in courts of first instance, and under section 16, Rule 4, in inferior courts, in order that the court may correct any errors, mistakes or injustices committed in its judgment.

Sometime in December, 1955, Domingo Sabordo, Et Al., filed against Ponciano Punzalan Civil Case No. 111 in the Justice of the Peace Court of Bula, Camarines Sur, for the recovery of wage differentials and overtime pay. On January 27, 1956, service of summons was made on Punzalan by the sheriff of Manila by leaving a copy thereof with his nephew at his residence at 2126 Misericordia, Sta. Cruz, Manila. Punzalan was at the time in Cagayan and did not come to know of the summons until he returned to Manila on February 9, 1956, the same day fixed in the summons for him to appear, answer the complaint and present his evidence. Without losing any time, Punzalan on the same day sent a telegraphic motion to the Justice of the Peace of Bula, Camarines Sur, asking for the postponement of the hearing. Unfortunately, said telegram was not received by the judge until after the hearing, so that when the case was called for trial at 2 o’clock in the afternoon of February 9, Punzalan was declared in default.

Eight days later, on February 17, 1956, Punzalan received a letter from plaintiff’s counsel informing him that a default judgment had been rendered against him in the case, and proposing a compromise by reducing the amount of the judgment by one half. That was the first time Punzalan learned of said default judgment, and even if he had not been served a copy thereof, he filed, on February 24, a motion to lift the same and for a new trial on the ground that he learned of the summons only on February 9, the date of the hearing, and did not have enough time to attend trial. Punzalan’s motion was, however, denied by the court, notice of which denial Punzalan received on March 5, 1956, and the day following, Punzalan received a copy of the judgment by default rendered February 10, 1956.

Instead of appealing the order of the inferior court denying his motion for new trial, Punzalan filed, on March 19, 1956, with the Court of First Instance of Camarines Sur, a petition for certiorari urging (1) that the inferior court acted without jurisdiction over his person because, contrary to section 4, Rule 124, Rules of Court, the summons was served upon him outside the boundary of the province of Camarines Sur without the approval of the court of first instance of the province; and (2) that the inferior court acted with grave abuse of discretion in refusing to lift the judgment by default. The petition for certiorari was, however, dismissed by the Court of First Instance, upon the grounds (1) that the inferior court did not act without jurisdiction over Punzalan’s person because the latter voluntarily submitted to the jurisdiction of the court when he filed a motion for the postponement of the hearing; and (2) that Punzalan’s remedy was a petition for relief under Rule 38, which he failed to avail himself of. From this judgment, Punzalan appealed to this Court.

On the question of the alleged lack of jurisdiction of the inferior court over appellant’s person, it is to be noted that appellant altogether failed to raise the question of the defective service of summons upon him at any time in the justice of the peace court of Bula. Assuming that his telegraphic motion for postponement was intended only as a limited and special appearance to give him an opportunity to raise the question of jurisdiction at the trial, appellant, nevertheless, failed to raise the question of defective process in his motion to set aside the default judgment, wherein he merely explained his absence at the trial and asserted that he had a good and meritorious defense to the complaint. It was only in the court of first instance that appellant raised the question of defective service of summons for the first time. Under the principle that defects in jurisdiction arising from defective process, or even absence of process, may be waived by failure to make seasonable objection (De Castro v. Cebu Portland Cement Co., 71 Phil., 479), the lower court correctly ruled that appellant had waived the lack of valid service of summons upon him in the inferior court.

Considering, however, that failure to appear, not failure to answer, is the sole ground for default in inferior courts (Caraballo v. Encarnacion, 92 Phil., 974, 49 Off. Gaz. [4] 1383; Quisan v. Arellano, 90 Phil., 644), judgment by default was not properly taken against appellant in the justice of the peace court because his telegraphic motion for postponement, sent on the day of the hearing, February 9, 1956 (it was deemed filed on the day send under sec. 2, Rule 27), was equivalent to an appearance therein. It is true that the justice of the peace court did not learn of said telegraphic motion until after the hearing in which an order of default was entered against appellant. The court, however, was already aware of said motion when, on the following day, February 10, it still rendered a judgment of default against appellant. We think the court exceeded its jurisdiction when it promulgated said judgment by default, and that appellant acted within his rights when he filed a motion with the same court for the lifting of the default judgment and for a new trial.

But even granting that appellant was validly declared in default and that judgment by default was also validly taken against him, it still appears that a petition for relief under Rule 38 was not the proper remedy under the circumstances. It is a well-known rule that such petition may be filed only when the order or judgment from which it is sought has already become final and executory (Veluz v. J. P. of Sariaya, 42 Phil., 557; Anuran v. Aquino, 38 Phil., 29; Quirino v. PNB, 101 Phil., 705; 54 Off. Gaz. [14] 4248), so that as long as the judgment against which relief is sought has not yet become final, the petition aforesaid is not available as a remedy. Instead, the aggrieved party may file a motion for a new trial, under Rule 37 in courts of first instance, and under section 16, Rule 4, in inferior courts, in order that the court may correct any errors, mistakes, or injustices committed in its judgment. Thus, we have held that the proper remedy of the aggrieved party against a judgment by default of an inferior court, before the finality of such judgment, is a motion for new trial under section 16, Rule 4 (Veluz v. J. P. of Sariaya and Quirino v. PNB, supra). This was the course that appellant - took namely, file a motion to lift default judgment and ask for a new trial, since only fourteen days had elapsed and the judgment by default had not yet become final and executory. The lower court was, therefore, clearly in error in dismissing appellant’s petition on the ground that he did not file a petition for relief under Rule 38.

Coming now to the merits of appellant’s motion for setting aside the default judgment and for a new trial, it appears that appellant failed to be present at the hearing of February 9, 1956 in the justice of the peace court of Bula due to excusable accident; i.e., he did not know of the summons until the very day of the hearing, and it was physically impossible for him them to attend trial because the court was many miles away from his residence in Manila. Appellant did the only thing he could under the circumstances - send a telegraphic motion for postponement. It also appears that appellant has a good and meritorious defense to the complaint. This was pleaded in his motion for new trial, alleged in paragraph 9 of his petition in the First Instance, and is admitted by respondents in the court below (Orig. Records, p. 37). Under the circumstances obtaining, it was grave abuse of discretion for the inferior court to refuse to lift its default judgment and give defendant a chance to present his defense.

Appellees argued in the court below that the proper remedy against the inferior court’s order denying appellant’s motion to lift the default judgment and for a new trial was seasonable appeal and not certiorari; and since the writ will not lie as a substitute for appeal, appellant’s petition for certiorari was properly dismissed. There have been instances, however, in which certiorari has been allowed in meritorious cases where the right to appeal had been lost through excusable negligence or mistake of petitioner, and where the denial of the writ would leave petitioner without a remedy (e.g. Cavan v. Wislezenus, 48 Phil., 632; Dais v. CFI, 51 Phil., 396; Domingo, etc. v. Yatco, 101 Phil., 226; 55 Off. Gaz. [5] 811). Petitioner mistook the remedy of certiorari for appeal because he believed that the inferior court did not acquire jurisdiction over him in view of the defective service of summons. And although we hold against him on this court, we nevertheless found that the inferior court acted with grave abuse of discretion amounting to excess of jurisdiction in rendering a default judgment against appellant, in refusing later to set it aside, and in denying a new trial. Appellant’s period for appeal has long expired, so that a denial of the writ now would leave him without any other remedy. In view of the particular merits of appellant’s case, we feel that we should take a liberal attitude in applying the rules of procedure, and grant appellant the writ of certiorari in order that the judgment of default in the justice of the peace court of Bula could be set aside and the appellant afforded an opportunity to present his admittedly meritorious defense to the complaint.

Wherefore, the decision appealed from is reversed and another one entered, setting aside the order and judgment of default against appellant in the justice of the peace court of Bula, Camarines Sur. The records shall be remanded to said court for a new trial, after which a new judgment shall be rendered based on all the evidence of the parties. Costs against appellees Domingo Sabordo, Et. Al.

Paras, C.J., Bengzon, Montemayor, Bautista Angelo, Labrador, Concepción, Endencia, Barrera, and Gutiérrez David, JJ., concur.

1. ARRASTRE SERVICE; LIMITATION OF ARRASTRE OPERATOR’S LIABILITY; VALIDITY OF PARAGRAPH 15 OF MANAGEMENT CONTRACT BETWEEN ARRASTRE OPERATOR AND BUREAU OF CUSTOMS. — The limitation of the arrastre operator’s liability under Paragraph 15 of the Management Contract entered into between it and the Bureau of Customs is not absolute or unqualified, for under the said contract, if the value of the merchandise is specified or manifested by the consignee, and the corresponding arrastre charges are paid on the basis of the declared value, the limitation does not apply. Consequently, the provision is neither unfair nor arbitrary, because the consignee has it in his hands to hold the arrastre operator responsible for the full value of his merchandise by merely specifying it in any of the various documents required of him in claiming the merchandise from the customs.

2. ID.; ID.; ID.; RELATIONSHIP BETWEEN CONSIGNEE AND COMMON CARRIER SIMILAR TO THAT OF CONSIGNEE AND ARRASTRE OPERATOR. — The legal relationship created between the consignee or owner of the imported goods who withdraws them from the customhouse and the arrastre operator whose services are utilized for the purpose, is akin to that existing between the consignee or owner of shipped goods and the common carrier or that between a depositor and the warehouseman, and it has been held that a provision in the bill of lading limiting the carrier’s liability to a specific amount, unless the shipper expressly declares a higher valuation and pays the corresponding rate thereon, is valid and binding. (H.E. Heacock Company v. Macondray & Company, Inc. 42 Phil., 205; Freixas and Company v. Pacific Mail Steamship Co., 42 Phil., 199; McCarthy v. Barber Steamship Lines, Inc. 45 Phil., 488)

3. ID.; ID.; ID.; CONSIGNEE CONSIDERED PARTY TO MANAGEMENT CONTRACT THROUGH NOT SIGNATORY THERETO. — Paragraph 15 of the Management Contract entered into between the arrastre operator and the Bureau of Customs contains provision which are in the nature of stipulations pour autrui, that is, for the benefit or in favor of a third party, the consignee or importer. By virtue thereof, the arrastre operator is expected to render service, not to the Bureau of Customs, but to the importer or consignee of the cargoes. Upon compliance with certain conditions, the importer or consignee is entitled to certain conditions, the importer or consignee is entitled to receive< and the arrastre contractor is obliged to discharge and deliver< the cargoes or merchandise described in the delivery permit. In case at bar, the consignee obtained the delivery permit and gate pass subject to the terms and conditions of the Management Contract and took delivery of its cargo from the arrastre operator. Although it was not a signatory to the said contract, it therefore legally became a party thereto.

4. APPEALS; CHANGE OF THEORY ON APPEAL NOT ALLOWED. — No question will be considered by the appellate court which has not been raised in the court below. (Toribio v. Decasa, 55 Phil., 461; San Agustin v. Barrios, 68 Phil., 475.) When a party deliberately adopts a certain theory, and the case is tried and decided upon that theory in the court below, he will not be permitted to change his theory on appeal because, to permit him to do so, would be unfair to the adverse party. (Molina v. Somes 24 Phil., 49; Agoncillo v. Javier, 38 Phil., 424.)

This is an appeal interposed directly with this Court by plaintiff Northern Motors Inc., as owner of certain imported articles, from the decision of the Court of First Instance of Manila (in Civil Case No. 29098) ordering defendant Delgado Brothers, Inc., as the Arrastre Contractor in the Port of Manila, to pay said plaintiff the amount of P500.00 and costs, instead of P3,117.53 as demanded by it in its complaint. The facts as found and considered by the trial court must, therefore, control the resolution of this appeal.

Plaintiff-appellant is the owner, by transfer from Liddel & Co., Inc., of a consignment of merchandise, consisting of 33 cases of auto spare parts and accessories, covered by Bill of Lading No. 19, discharged in Manila into the custody of defendant Delgado Brothers, Inc., and later cleared and taken delivery of by Luzon Brokerage Co., Inc., as agents of the consignee, upon presentation of the corresponding release papers from the Bureau of Customs. However, instead of 33 cases, only 32 were delivered to plaintiff’s broker. Plaintiff, thereupon, demanded payment of the reasonable value (P3,117.53) of the missing case from defendant Delgado Brothers, Inc., but later offered to refund only P500.00, claiming that under paragraph 15 of its Management Contract, its liability is limited only to P500.00 unless the value of the merchandise is otherwise specified or manifested. Such was the issue presented by the pleadings, after the case was taken to court. After a short trial consisting in admissions and stipulations, the court rendered a decision which, in part, reads:jgc:chanrobles.com.ph

"It appearing that defendant Delgado Brothers, Inc. admitted having received the 33 cases in good order condition from the shipper and that it delivered only 32 cases to the consignee, the other defendants are now exempt from any liability. The only question for us to resolve is, as to whether or not paragraph 15 of the management contract limiting the liability of the arrastre contractor to P500.00 may be invoked by the Delgado Brothers, Inc. Plaintiff contends that the management contract in question is not binding upon it for the reason that it was not a party thereto.

"We have had occasion to resolve a similar question in the case of Jose Bernabe and co. v. Delgado Brothers, Inc., Civil Case No. 306150, Court of First Instance, Manila. We advanced the opinion in that case, that paragraph 15 of the management contract is binding upon the importer or consignee. In that case we said:chanrob1es virtual 1aw library

‘The Court is of the opinion that the plaintiff is bound by the provisions of the management contract. As a matter of fact, it complied with such provisions as were necessary for it to take delivery of the cargo. Plaintiff should not take advantage of the management contract when it suits him to do so, and reject its provisions when it thinks otherwise.’

"We have no reason to change our opinion. We believe that in the instant case, as in the case we have mentioned above, plaintiff is bound by the provisions of the management contract. The general rule that only parties to the contract are bound to its provisions is not absolute. (Mendoza v. PAL, Inc., G.R. No. L-3673 promulgated on February 29, 1952 and Krauffman v. PNB, 42 Phil., 182)."cralaw virtua1aw library

Plaintiff’s motion for reconsideration having been denied, the present appeal was interposed.

The two legal issues to be determined in this appeal are (1) whether the provisions of Paragraph 15 of the Management Contract between appellee Delgado Brothers, Inc. and the Bureau of Customs are valid, and (2) in the affirmative, whether plaintiff-appellant is bound by said provisions.

Anent the first issue, Paragraph 15 of the Management Contract, where pertinent, provides:jgc:chanrobles.com.ph

"15. It is further understood and strictly agreed that the CONTRACTOR (appellee) shall at its own expenses handle all merchandise upon or over said piers, wharves and other designated places, and at its own expense perform all work undertaken by it hereunder diligently and in a skillful workmanlike and efficient manner; and the CONTRACTOR (appellee) shall be solely responsible as an independent contractor for, and promptly pay to the steamship company, consignee, consignor, or other interested party or parties the invoice value of each package but which in no case shall be more than five hundred pesos (P500.00) for each package, unless the value is otherwise specified or manifested, and the corresponding arrastre charges had been paid, including all damages that may be suffered on account of loss, destruction, or damage of any merchandise while in the custody or under the control of the CONTRACTOR (appellee) upon any pier, wharf or other designated place under the supervision of the BUREAU , . . ." (Italics supplied)

Appellant claims that the above quoted provision is null and void, as it limits the liability of appellee for the loss, destruction or damage of any merchandise, to P500.00 per package, contending that to sustain the validity of the limitation would be to encourage acts of conversion and unjust enrichment on the part of the arrastre operator. Appellant, however, overlooks the fact that the limitation of appellee’s liability under said provision, is not absolutely or unqualified, for if the value of the merchandise is specified or manifested by the consignee, and the corresponding arrastre charges are paid on the basis of the declared value, the limitation does not apply. Consequently, the questioned provision is neither unfair nor arbitrary, as contended, because the consignee has it in his hands to hold, if he so wishes, the arrastre operator responsible for the full value of his merchandise by merely specifying it in any of the various documents required by him, 1 in clearing the merchandise form the customs. For then, the appellee arrastre operator, by reason of the payment to it of a commensurate charge based on the higher declared value of the merchandise, could and should take extraordinary care of the special or valuable cargo. In this manner, there would be mutuality. What would, indeed, be unfair and arbitrary is to hold the arrastre operator liable for the full value of the merchandise after the consignee has paid the arrastre charges only a basis much lower than the true value of the goods.

This Court has held as valid and binding a similar provision in a bill of lading limiting the carrier’s liability to a specific amount, unless the shipper expressly declares a higher valuation and pays the corresponding rate thereon. (H.E. Heacock Company v. Macondray & Company, Inc., 42 Phil., 205; Freixas and Company v. Pacific Mail Steamship Co., 42 Phil., 199. )2 In the H.E. Heacock Company case, we stated that -

"Three kinds of stipulation have often been made in the bill of lading. The first is one exempting the carrier from any and all liability for loss or damage occasioned by its own negligence. The second is one providing for an unqualified limitation of such liability to an agreed valuation. And the third is one limiting the liability of the carrier to an agreed valuation unless the shipper declares a higher value and pays a higher rate of freight. According to an almost uniform weight of authority, the first and second kinds of stipulations are invalid as being contrary to public policy, but the third is valid and enforceable." (Italics supplied.)

The principle above enunciated was finally incorporated as law in Article 1749 of the new Civil Code, which reads:jgc:chanrobles.com.ph

"ART. 1749. A stipulation that the common carrier’s liability is limited to the value of the goods appearing in the bill of lading, unless the shipper or owner declares a greater value, is binding."cralaw virtua1aw library

The same is true in the warehousing business where limitation on the warehouseman’s liability is universally recognized and upheld. Thus -

"However, in the absence of prohibitory statute, the validity of a limitation of the amount of liability is generally upheld, where with a view to obtaining a compensation commensurate to the risk assumed, the warehouseman stipulates that unless the valuation of the property committed to his care is disclosed, his responsibility for loss or damage shall not exceed a certain amount or that in case of loss or damages the valuation fixed in the receipt shall be controlling." (Am. Jur., Vol. 56, p. 419, citing Taussig v. Bode, 134 Cal. 260, 66 P. 159, 54 LRA 772, 86 Am. St. Rep. 250; Central Storage Whse. Co. v. Pickering, 114 Ohio St. 76, 151 NE 29, 141 ALR 768).

The legal relationship created between the consignee or owner of the imported goods who withdraws them from the customshouse and the arrastre operator whose services are utilized for the purpose, is sufficiently akin to that existing between the consignee or owner of shipped goods and the common carrier or that between a depositor and the warehouseman, to warrant, in our opinion, the application of the same or similar principle. Consequently, we hold that the provisions of Paragraph 15 of the Management Contract in question are valid and legal.

In the case of Caltex (Philippines), Inc., Et. Al. v. Delgado Brothers, Inc., Et Al., (96 Phil. 368), this Court, speaking through the Chief Justice, characterized this same Management Contract between appellee and the Bureau of Customs as "Not an ordinary agreement involving merely the parties therein as the same affect the public in general, particularly as to the rates of an exemptions from the arrastre charges." In fact, the contract is awarded only after a public bidding in which the conditions thereof are made public for consideration by prospective bidders.

We come now to the determination of the second issue of whether appellant was bound by the provisions of said Paragraph 15 of the Management Contract. Appellant contends that since it was not a party to the said contract, it was not bound by its provisions. The facts of this case and the law applicable thereto do not support this view.

Article 1311 of the new Civil Code, states:jgc:chanrobles.com.ph

"ART. 1311. Contracts take effect only between the parties, their assigns and heirs, except in case where the rights and obligations arising from the contract are not transmissible by their nature, or by stipulation or by provision of law. The heir is not liable beyond the value of the property he received from the decedent.

"If a contact should contain some stipulation in favor of a third person, he may demand its fulfillment provided he communicated his acceptance to the obligor before its revocation. A mere incidental benefit or interest of a person is not sufficient. The contracting parties must have clearly and deliberately conferred a favor upon a third person."cralaw virtua1aw library

Tested in the light of the above legal provision, Paragraph 15 of the Management Contract in question, it is believed, contains provisions which are in the nature of stipulations pour autrui, that is, for the benefit or in favor of a third party, the appellant in the case at bar. By virtue thereof, appellee is expected to render service, not to the Bureau of Customs, but specifically and principally to the importers or consignees of the cargoes. Upon the importer’s or consignee’s compliance with certain conditions, namely, presentation of approved delivery permits, payment of arrastre fees, etc., he is entitled to receive, and the appellee arrastre contractor is obliged to discharge and deliver, the cargoes or merchandise corresponding to those described in the delivery permit of said importer or consignee. There can scarcely be any doubt that by said provision in the contract, appellee and the Bureau of Customs deliberately and purposely conferred benefit upon appellant, because it is to the latter the merchandise was to be delivered in good order and payment made, in the event of damage, destruction, or loss thereof while in appellee’s control or custody.

Having arrived at the conclusion that said contract contains provisions which clearly and deliberately confer a favor upon a third person (using the language of the article aforecited), the next inquiry is whether the beneficiary, herein appellant, has accepted said favor and communicated his acceptance to the obligor, herein appellee.

In the pleadings filed by the parties, as well as in the decision of the court a quo, we find ample evidence of appellant’s acceptance of said favor in its communication thereof to appellee.

Paragraph III of appellant’s complaint 3 contains the following allegation:jgc:chanrobles.com.ph

"Delgado Brothers had been the operator of the arrastre service at the Port of Manila up to February 29, 1956 and was authorized as such to deliver cargoes discharged by carrying vessels into its custody on presentation of release papers from the Bureau of Customs and the steamship carrier and/or its agents."cralaw virtua1aw library

Stipulation Nos. 1 and 2 4 read:jgc:chanrobles.com.ph

"1. That the Delgado Brothers received 33 cases from the carrier.

"2. That Delgado Brothers only delivered 32 cases to Luzon Brokerage Company, Inc." (Appellant’s agent)."cralaw virtua1aw library

We quote from the decision. 5

". . . The parties agreed.

"(1) That defendant Delgado Brothers, Inc. received from the carrier, goods covered by bill of lading NO. 19;" (2) That in the said bill of lading, 33 cases of auto space parts and accessories were included;" (3) That Delgado Brothers, Inc. in its capacity as arrastre contractor received the 33 cases in apparent good order and condition as per corresponding tally sheets;" (4) That Delgado Brothers, Inc. only delivered to the consignee 32 cases out of the 33 cases;" (5) That paragraph 15 of the management contract entered into by the Delgado Brothers, Inc. and the Bureau of Customs limits to only P500.00 the liability of the arrastre contractor for undeclared value of goods received.." . . As a matter of fact it (appellant) complied with such provisions (of the Management Contract) as were necessary for it to take delivery of the cargo. . . ."cralaw virtua1aw library

It is undisputed, therefore, that appellant took delivery of its cargo from appellee, as arrastre operator under the Management Contract, and after the presentation and signing by it, through its duly authorized broker, of the pertinent documents covering the release of said cargoes.

According to the law, 6 before delivery of the cargo could be made, the consignee or owner, or his representative must first clear them from the Bureau of Customs and obtain therefrom a Delivery Permit and a Gate Pass. Among the conditions imposed by law for this purpose is for the owner or consignee to submit to the Collector of Customs a written declaration containing, inter alia, a "just and faithful account of the actual cost of said merchandise, including and specifying the value of all containers or coverings, and that nothing has been omitted therefrom or concealed whereby the Government of the Republic of the Philippines might be defrauded of any part of the duties lawfully due on the merchandise." In the delivery permit thus obtained, the following "Important Notice" is stamped or printed:jgc:chanrobles.com.ph

"IMPORTANT NOTICE

"All cargo covered by this permit are delivered to and received by Consignee’s and importer’s representative subject to all the terms and conditions of the Management Contract between the Bureau of Customs and Delgado Brothers, Inc. (appellee), (or whoever may be the arrastre contractor) dated October 21, 1950, and all amendments thereto or alterations thereof, particularly but not limited to Paragraph 15 thereof limiting the company liability to P500.00 per package, unless the value of the goods is otherwise specified or manifested and the corresponding arrastre charges have been paid . . . (Italics supplied.)

In the Gate pass which covers the receipt and release of the cargo duly signed by the importer’s or consignee’s representative, the following annotation also appears:jgc:chanrobles.com.ph

"The undersigned, duly authorized to respectively represent the Bureau of Customs, the above named consignee, and the arrastre service operator, hereby certify to the correctness of the above description of the goods covered by this Gate Pass. Issuance of this Gate Pass constitutes delivery to, and receipt by CONSIGNEE of the goods as described herein, subject to all the terms and conditions contained in the Management Contract between the Bureau of Customs and Delgado Brothers, Inc. (appellee) (or whoever may be the arrastre contractor) dated October 21, 1950, and all amendments thereto or alterations thereon, particularly but not limited to Paragraph 15 thereof limiting the company liability to P500.00 per package, unless the value of the goods is otherwise specified or manifested . . ." (Italics supplied.)

Even, therefore, if appellant was not a signatory to said Management Contract, it legally became a party thereto when it (through its broker, the Luzon Brokerage Co. Inc.) obtained the delivery permit and gate pass in the above manner prescribed by law and, making use of them, demanded from appellee the delivery of the 33 cases, pursuant to appellee’s undertaking in virtue of the very same Management Contract. Again, it became bound when it brought court action against appellee, also by virtue of the latter’s obligations as the arrastre contractor under the same Management Contract, for the purpose of recovering the reasonable value of the missing case of auto spare parts and accessories. Under the circumstances, as the trial court aptly observed: "Plaintiff should not take advantage of the Management Contract when it suits him to do so and reject its provisions when it thinks otherwise." The principle is the same or similar to that involved in the case of Mendoza v. Philippine Air Lines, Inc. (90 Phil., 836), wherein it was held that -

". . . even if the LVN Pictures, Inc. as a consignor of its own initiative, and acting independently of Mendoza for the time being, made Mendoza as consignee, a stranger to the contract, if that is possible, nevertheless, when he, Mendoza, appeared at the Pili Air Port armed with the copy of the Air way Bill (Exh. 1) demanding the delivery of the shipment to him, he thereby made himself a party to the contract of . transportation. . . . His demand for the delivery of the can of film to him at the Pili Air Port may be regarded as a notice of his acceptance of the stipulation of the delivery in his favor contained in the contract of carriage and delivery. In this case, he also made himself a party to the contract, or at least has come to court to enforce it. His cause of action must necessarily be founded on its breach." (Italics supplied.)

We do not find it necessary to pass, in detail, upon appellant’s claim (which we find without merit) that the limited liability provision in Paragraph 15 of the Management Contract in question has not statutory basis under Act No. 3002, as amended, inasmuch as the question was never raised by appellant in the court a quo. The rule is well-settled that no question will be considered by the appellate court which has not been raised in the court below. (Toribio v. Decasa, 55 Phil., 461; Sanagustin v. Barrios, 68 Phil. 475.) When a party deliberately adopts a certain theory, and the case is tried and decided upon the theory in the court below, he will not be permitted to change his theory on appeal because, to permit him to do so, would be unfair to the adverse party. (Molina v. Somes, 24 Phil., 49; Agoncillo v. Javier, 38 Phil., 424.)

Wherefore, finding no reversible error in the decision appealed from, the same is hereby affirmed, with costs against the plaintiff- appellant. So ordered.

Bengzon, Montemayor, Bautista Angelo, Labrador, Reyes, J.B.L., and Endencia, JJ., concur.

Endnotes:

---

1. Pursuant to Sections 1267-68 (f) and 1273 of the Revised Administrative Code. 2 See also McCarthy v. Barber Steamship Lines Inc., 45 Phil., 488.

3. Page 9, Record on Appeal.

4. Pages 2 and 3, Record on Appeal.

5. Pages 25-26, and 27, Record on Appeal.

6. Secs. 1267, 1268-(b), 1269 and 1273, Rev. Adm. Code.

1. WAGE ADMINISTRATION SERVICE; DECISION AS TO THE MERITS OF CLAIMS A CONDITION PRECEDENT TO COURT ACTION; EXECUTION; NECESSITY OF WRITTEN AGREEMENT BETWEEN PARTIES TO SUBMIT THEIR DISPUTE. — Where the parties did not enter into a written agreement to submit their dispute to the Wage Administration Service for arbitration, whatever decision or judgment the Wage Administration Service may have rendered in the case is not binding upon the parties, and a writ of execution issued by the Court of First Instance to enforce it is unauthorized and illegal. (Garcia v. Garcia, 57 Off. Gaz. [3] 460; Ortega v. Saulog Transit, Inc., 57 Off. Gaz. [46] 8299; 105 Phil. 907; Potente v. Saulog Transit, Inc.; G. R. No. L-1230, April 24, 1959; Winch v. P. J. Kiener Co., Ltd., 104 Phil., 735; 55 Off. Gaz. [30] 7337.)

On April 16, 1956, Severino Ponce (appellee herein) filed a claim with the Wage Administration Service, Manila, for the recovery from Co King Lian (herein appellant) unpaid wages, overtime pay, and separation pay (Case No. C-6074). After hearing before investigator Felipe N. Aurea, wherein both parties were present, said investigator, on June 25, 1956, rendered his "Findings and Recommendations", the last paragraph of which reads:red:chanrobles.com.ph

"WHEREFORE, the respondent is requested to deposit the aforequoted amount of P19,366.38 with this Office within five days from receipt hereof, which in turn will be given to the complainant."cralaw virtua1aw library

As no deposit was made by Co King Lian in accordance with the above request, the officer-in-charge of the prosecution section of Department of Labor Regional Office No. 1 sent him a letter giving him five days within which to make the necessary deposit or said office would take the necessary steps to enforce the judgment in the case. Still no deposit was made by Co King Lian; whereupon, claimant Ponce, on November 12, 1956, filed a petition with the Court of First Instance of Rizal, alleging that the decision of the Wage Administration Service in his favor in its Case No. C-6074 against Co King Lian had become res judicata, and asking that the court render judgment in accordance therewith. Co King Lian moved to dismiss the petition on the ground that it did not state any cause of action. On March 16, 1957, the court denied the motion to dismiss, and on the 21st of the same month, without waiting for Co King Lian’s answer and without any hearing, issued an order stating, after a narration of the facts that took place in the Wage Administration Service, that the decision of that office in Case No. C-6074 "has already become final and executory", and ordering the issuance of the corresponding writ of execution for the satisfaction of said decision. From this order, Co King Lian appealed to the Court of Appeals, which certified the case to us because it raises purely questions of law.

The main question raised by the appeal is whether or not the lower court may order the execution of the findings and recommendation of the investigator of the Wage Administration Service in C-6074 without any hearing and trial. This question has already been settled by this Court in a number of decisions of recent date.

The first of these decisions is Winch v. P. J. Kiener Co., Ltd., 104 Phil., 735; 55 Off. Gaz. (35) 7337, wherein we pointed out the three steps or ways by which a claimant for uncollected pay or wages may enforce his claim; namely, mediation, arbitration, and court action. Describing each of these remedies, we said:jgc:chanrobles.com.ph

"The Minimum Wage Law does not specify in precise terms the duties and functions of the wage Administration Service . . but because of the vagueness of the law in this regard, it deemed proper to confer on said Secretary broad powers to make and issue such rules and regulations as may be necessary to carry out the provisions of the Act (Section 11). This was done when the Secretary of Labor approved a Code of Rules and Regulations wherein he outlined the steps, procedure and manner in which the claim of an employee against an employer may be filed and enforced. Thus, in Chapter III, Article 7 of said Code, we find provisions relative to how a claim should be filed and the different methods an employee may pursue to enforce the same. They postulate that, once a claim is filed, the same shall be assigned to an investigator whose function shall be to mediate and endeavor to induce the parties to settle the claim by amicable agreement. This function is called mediation. If an agreement is arrived at then the same becomes binding and must be complied with.

Another method refers to arbitration. This is resorted to if no amicable agreement is arrived at between the parties. The investigator shall ask the parties whether they are willing to submit the case to arbitration and if they do then they should subscribe to an agreement in writing which shall be signed by them before the investigator. If they do agree to arbitration as stated, the decision of the arbitrator shall be binding, final and conclusive between them. But the rule requires that the agreement shall be made in writing and signed by both parties before an investigator could arbitrate, otherwise no arbitration can take place.

Finally, the rule provides that in the event mediation fails and the parties are not willing to arbitrate, then the claim shall be assigned to a Claims Attorney who, if he finds the claim meritorious and the employee is indigent, shall prepare the corresponding complaint to be submitted to a competent court within one week after receiving the case.

There are therefore three steps that a claimant may pursue in the enforcement of his claim; mediation, arbitration, and court action. As may be noted, the first step is purely administrative in character, the second is a quasi-judicial function, while the third is an auxiliary remedy extended to an employee who may not be financially able to get legal assistance in court."cralaw virtua1aw library

We held in Potente v. Saulog Transit, Inc., 105 Phil., 525, that only through these modes — mediation, arbitration, or court action — may the Wage Administration Service cause the employer to satisfy the employee’s claim for unpaid wages, and that the Wage Administration Service "has no authority to render a decision’ — in the sense this term is used in legal parlance — on the claim for wages, except insofar as it has to determine whether, in its opinion, the claim is meritorious, as a condition precedent to the institution, before ’any competent court’, of an ordinary ’action’ for the recovery of the sum of money it considers due to the claimant. But, then, no writ of execution shall issue, except when the judgment rendered by said court — after due notice and hearing, as demanded by the tenets of due process and provided in the Rules of Court — shall have become final and executory." And still later, in Ortega v. Saulog Transit, Inc., 105 Phil., 907; 57 Off. Gaz. (46) 8229, we ruled that "it is only when an arbitration agreement or compromise is entered into between the parties that a judgment can be rendered by the Wage Administration Service and enforced by the courts." Finally, following the above rulings, we held in Garcia v. Garcia, 106 Phil., 413; 57 Off. Gaz. [3] 460, that where the parties did not enter into a written agreement to submit their dispute to the Wage Administration Service for arbitration, "whatever ’decision’ or ’judgment’ the Wage Administration Service may have rendered in the case is not binding upon the parties, and a writ of execution issued by the Court of First Instance to enforce it is unauthorized and illegal."cralaw virtua1aw library

In the instant case, although the claim of appellee against appellant was heard in the presence of both parties and decided by an investigator of the Wage Administration Service, it does not appear that the parties had submitted the case to arbitration in an agreement in writing signed before the investigator. Consequently, the findings and recommendations of the investigator in the case in favor of the claim are not binding and conclusive on appellant, and cannot be executed by mere petition for execution presented by appellee in the court below without trial and decision on the merits.

Appellee relies upon our decision in the case of Brillantes v. Castro, 99 Phil., 497; 56 Off. Gaz. (29) 4621, to the effect that a ruling of the Wage Administration Service not appealed from becomes final, conclusive, and executory. But there was in that case an express arbitration agreement signed by the parties submitting their cases to the investigation and decision of the Wage Administration Service. As we later ruled in Winch v. P. J. Kiener Co., supra; Santos v. Perez Vda. de Caparas, 105 Phil., 992; and Figueroa v. Eliseo Saulog, 105 Phil., 1012; 57 Off. Gaz., (8) 1395, the holding in the Brillantes v. Castro case cannot be invoked where the parties did not submit to an arbitration agreement in the Wage Administration Service, as in this case.

The appellee also invokes the provisions of Section 20 of Reorganization Plan 20-A. We need not delve into these provisions, because the award in the case at bar was made long before the Reorganization Plan went into effect in January of 1957.

Consequently, the order of the court below sustaining the petition for a writ of execution to enforce the findings of the Wage Administration Service in C-6074, without giving the appellant the benefit of an answer and a hearing, finds no support in law. And with this conclusion, it is needless to inquire further into appellant’s second claim that the findings and recommendations of a mere investigator of the Wage Administration Service do not amount to a "decision" or "order" of that office in legal contemplation.

The order appealed from is set aside, and the petition dismissed, without prejudice to appellee’s filing an appropriate action against appellant to enforce his claim. Costs against appellee Severino Ponce.

Paras, C.J., Bengzon, Montemayor, Bautista Angelo, Labrador, Concepción, Endencia, Barrerra, and Gutiérrez David, JJ., concur.

1. JUDGMENTS; ORDER OF EXECUTION, APPEAL FROM. — Although ordinarily an order of execution of a final judgment is not appealable, where in the opinion of the defeated party such order of execution varies the terms of the judgment and does not conform to the essence thereof, or when the terms of the judgment are not entirely clear and there is room for interpretation and the interpretation given by the trial court as contained in its order of execution is wrong in the opinion of the defeated party, the latter should be allowed to appeal from the said order so that the appellate court may pass upon the legality and the correctness of the said order. (Castro v. Surtida, Et Al., 47 Off. Gaz., Supp. No. 12, p. 351.)

2. ID.; JUDGMENT TO CONFORM WITH PLEADINGS AND PROOF; CASE AT BAR. — A judgment must conform to the pleadings and proof. In case at bar, plaintiffs’ cause of action in their complaint was based solely upon the promissory note, which from the allegations therein appears to be defendant wife’s personal undertaking. No cause of action was alleged against the defendant husband. Neither was there any allegation in the complaint that the loan was a conjugal partnership liability, or that it was incurred by defendant wife with her husband’s consent, or that it was used for the benefit of the family. In the answer to the complaint it is alleged that the loan had partially been paid by defendant wife herself, which allegation was admitted by plaintiffs. At the hearing of the case, it was she who confessed judgment, assuming the payment of the balance of the loan. In the circumstances, defendant husband cannot, together with his co-defendant wife, legally be held liable on the promissory note.

3. ID.; AMENDMENT OR CORRECTION AFTER JUDGMENT BECOMES FINAL; CASE AT BAR. — The rule is absolute that after a judgment becomes final by the expiration of the time to appeal, no further amendment or correction can be made by the court except for clerical errors or mistakes. (Marasigan v. Ronquillo, 94 Phil., 237. In case at bar, the amendment of the judgment by making plural the word "defendant" in the dispositive portion thereof would not really be a correction of a mere clerical error. To allow such an amendment would make the defendant husband, who was not included in the judgment, or the conjugal partnership, liable for an obligation for which the defendant wife alone has been held answerable, her authority to bind the partnership not having been alleged or proved. Assuming that the court erred, the error is one of judgment, which can only be corrected by appeal, and not by the recourse to the power of the court to correct clerical errors or misprisions. (Henderson v. Tan, G. R. No. L-3223, October 10, 1950

Appeal from an order of the Court of First Instance of Manila to the Court of Appeals but certified here by that court on the ground that the question involved is purely legal.

The record shows that on November 12, 1954, plaintiffs filed a complaint against the defendants Imelda V. Natividad and Marciano Natividad, the latter being "joined in this suit as husband of the former", to collect the sum of P10,000 with interest, plus moral damages, attorney’s fees and costs. The complaint is based upon a promissory note dated March 5, 1954 executed by defendant Imelda V. Natividad in favor of plaintiff Trinidad M. Salonga in the following tenor:red:chanrobles.com.ph

"For consideration received, I promise to pay Mrs. Salonga the sum of Ten Thousand Pesos (P10,000.00) on or before March 28, 1954.

(Sgd.) Imelda V. Natividad.

Witnesses:.

(Sgd.) Illegible

(Sgd.) Illegible"

Answering the complaint, Defendants, through counsel, admitted the execution of the promissory note by defendant Imelda V. Natividad. They claimed, however, that said defendant had already paid the amount of P1,000.00 of the indebtedness. They, likewise, expressed willingness to pay the balance of P9,000.00 but pleaded for time to comply with said obligation in view of business reverses and the fact that defendant Imelda V. Natividad had been ill of tumor and was confined in a hospital.

At the hearing held on November 17, 1955, plaintiffs admitted the payment of P1,000.00 and the defendant Imelda V. Natividad "confessed judgment assuming the payment of the balance of P9,000.00." On that same date, the lower court rendered a decision as follows:jgc:chanrobles.com.ph

"After hearing the argument of both parties in this case, the Court finds that the complaint is based on a promissory note on a loan of Ten Thousand (P10,000.00) Pesos without any interest and the defendant admitted that the accounting having been paid thereon is the amount of One Thousand (P1,000.00) Pesos which is also admitted by the plaintiff.

"Wherefore, judgment is hereby rendered condemning the herein defendant to pay Nine Thousand (P9,000.00) Pesos without interest as there is no such thing stated in the promissory note signed by the defendant, to pay attorney’s fees in the sum of Two Hundred (P200.00) Pesos and to pay the costs."cralaw virtua1aw library

After the above decision had become final and executory, or on January 3, 1956, plaintiffs moved to execute the judgment. The motion was granted, but the writ of execution issued by the clerk of court, ostensibly pursuant to the dispositive part of the judgment, referred only to defendant Imelda V. Natividad to the exclusion of her husband. On January 16, 1956, after the writ was returned unsatisfied, plaintiffs filed with the court an ex parte motion for correction of a clerical error in the decision. It was argued that the word "defendant" in the dispositive part of the judgment should have been in plural or "defendants" since the case was lodged against the defendant spouses and not merely against one of them. Plaintiffs thus prayed for the issuance of another writ of execution which would include defendant Marciano Natividad therein.

Acting upon the motion, the trial court on January 31, 1956 issued the following order:jgc:chanrobles.com.ph

"Finding the motion of Atty. Salonga & Associates, in representation of the plaintiffs, dated January 16, 1956 to be well taken, this Court hereby amends its decision dated November 17, 1955 in the sense that the word defendant in the second (2) line as well as in the fourth (4) line of second (2) paragraph thereon should be changed to ’defendants’. Let another writ of execution be issued so as to include the husband of the defendant, Imelda Natividad for the enforcement of the judgment in this case."cralaw virtua1aw library

On September 14, 1956, defendant spouses, by counsel, filed a petition to set aside the alias writ of execution on the grounds that plaintiffs’ ex parte motion for correction of the supposed clerical error was filed out of time, and that original decision which referred singularly to defendant Imelda V. Natividad was correct as the latter’s husband was merely joined in the suit as such husband and the complaint was based on a promissory note executed solely by defendant Imelda V. Natividad. On September 19, defendant Marciano Natividad alone and by new counsel, lodged a verified petition to set aside the court’s order of January 31, 1956, to recall the writ of execution thereunder and to lift the garnishment effected on his salary in pursuance thereof. This defendant’s petition alleged that plaintiffs’ complaint states no cause of action against him, the same being based upon the promissory note executed by his wife alone; that the decision plaintiffs sought to amend had become final and executory; and that the amendment thus prayed for was not merely to correct a clerical but a substantial error. Defendant Marciano Natividad also contended that the amendatory order was unwarranted as it aimed to make him solidarily liable with his wife for a debt incurred exclusively by the latter without his knowledge and consent, and that the obligation involved in the promissory note is not a proper charge against the conjugal partnership.

Sustaining the petition of defendant Marciano Natividad, the trial court, on September 24, 1956, set aside its order of January 31, 1956 and lifted the garnishment effected on his salary. Motion for reconsideration of this last order having been denied, plaintiffs took the present appeal.

Passing first upon the question of the propriety of the instant appeal, as raised by defendants-appellees in their brief, the rule is that ordinarily, an order of execution of a final judgment is not appealable. Otherwise, as was said in the case of Molina v. De la Riva (18 Phil., 571), a case could never end, for as often as an order for execution of judgment was made it could be excepted to and the case brought here for review. This Court, however, has held that "where such order of execution in the opinion of the defeated party varies the terms of the judgment and does not conform to the essence thereof, or when the terms of the judgment are not entirely clear and there is room for interpretation and the interpretation given by the trial court as contained in its order of execution is wrong in the opinion of the defeated party, the latter should be allowed to appeal from the said order so that this appellate Tribunal may pass upon the legality and the correctness of the said order." (Castro v. Surtida, Et Al., 87 Phil., 166; 47 Off. Gaz., Supp. No. 12, p. 351.) Conformably to the above doctrine and considering the circumstances of the case, there can, we think, be no valid objection to the allowance of the present appeal.

Going now into the question of the legality of the writ of execution issued only against the defendant wife, Imelda V. Natividad, we find that the trial court in rendering its decision of November 17, 1955 really intended to hold liable said defendant wife alone to the exclusion of her husband. As stated by the court in its order of September 24, 1956, "the defendant Marciano Natividad has not signed the promissory note jointly with his wife and consequently cannot be made to pay for the value of the note executed and signed by his wife." It is to be observed that plaintiffs’ cause of action in their complaint was based solely upon the promissory note, which from the allegations therein appears to be the defendant wife’s personal undertaking. No cause of action was alleged against Marciano Natividad, the defendant husband. Neither was there any allegations in the complaint that the loan was a conjugal partnership liability or, more specifically, that it was incurred by the defendant wife with her husband’s consent, or that it was used for the benefit of the family. On the other hand, in the answer to the complaint, it is alleged that the loan had partially been paid by the defendant wife herself, which allegation was admitted by plaintiffs. And at the hearing of the case, it was also she "who confessed judgment assuming the payment of the balance of P9,000.00." In the circumstances, we do not think the defendant husband could, together with his co-defendant wife, legally be held liable on the promissory note in question. A judgment must conform to the pleadings and proof.

It is argued that defendants in their answer admitted their liability on the promissory note and further expressed their willingness to pay the same. What appears to have actually been admitted, however, was the existence of the indebtedness incurred by the wife as evidenced by the note. Such an admission cannot, of course, be enlarged so as to make the defendant husband liable for the said indebtedness, there being nothing alleged in the complaint to hold him so liable either personally or jointly with his wife.

In any event, the rule is absolute that after a judgment becomes final by the expiration of the time to appeal, no further amendment or correction can be made by the court except for clerical errors or mistakes. (Marasigan v. Ronquillo, 94 Phil., 237. Taking into account the circumstances of the present case, it is apparent that the amendment of the judgment by making plural the word "defendant" in the dispositive portion thereof would not really be a correction of a mere clerical error. For to allow such an amendment would make the defendant husband, Marciano Natividad, who was not included in the judgment, or the conjugal partnership, liable for an obligation for which the defendant wife alone has been held answerable, her authority to bind the partnership not having been alleged or proved. And assuming that the trial court erred in not holding said defendant husband liable on the strength of the alleged admission in the answer already referred to the error is obviously one of judgment, which can only be corrected by appeal, and not by the recourse to the power of the court to correct clerical errors or misprisions. (Henderson v. Tan, 87 Phil., 466.) .

In view of the foregoing, the order of the court a quo denying plaintiffs-appellants’ motion for reconsideration dated September 24, 1956, is hereby affirmed, with costs against appellants.

Paras, C.J., Bengzon, Montemayor, Bautista Angelo, Labrador, Concepción, Reyes, J. B. L., Endencia, and Barrera, JJ., concur.

1. EMPLOYERS AND EMPLOYEES; UNFAIR LABOR PRACTICE; REFUSAL OF SHIPPING AGENCY TO EMPLOY GUARDS UNLESS THEY FURNISH BOND AN EXERCISE OF A LEGITIMATE RIGHT. — The refusal of a shipping agency to employ guards affiliated with a security or watchmen agency that does not furnish a bond to respond for any negligence, misfeasance or malfeasance can not constitute an unfair labor practice. Such refusal is merely the exercise by the shipping agency of a legitimate right to protect its own interests, especially where the guards in question had previously abandoned a ship they were guarding without notice and exposed the ship to losses due to theft and pilferage.

The Republic Ships Security Agency is one of three agencies employed by certain shipping agencies in the City of Manila and respondent Macondray and Company, Inc., in guarding ships or vessels arriving at the port of Manila and discharging cargo on its piers. The other watchmen and security agencies are the K. Tagle Ship Watchmen Agency and the City Watchmen and Security Agency. Thirty-eight affiliates of the Republic Ships Security Agency belong to the petitioner labor union.

On or about February 18, 1956, petitioner union and its members declared a strike against 19 shipping firms in the City of Manila. The strike was certified by the President of the Philippines to the Court of Industrial Relations and the latter court immediately took cognizance of the strike. Attempts were made by the Court of Industrial Relations to settle the strike. At the hearing or conference before the court on March 16, 1956, the strikers, through counsel, expressed their desire to return back to work and maintain the status quo. Attorney for the respondents offered to see the shipping companies concerned and to ask them to try to have the 47 watchmen, who claim to have been discharged, to be reemployed. The strikers agreed to this proposal and on April 6, 1956, a petition was filed before the Court of Industrial Relations asking for reinstatement of 47 strikers who belong to the petitioner Associated Watchmen and Security Union (PTWO). The manager of respondent Macondray and Company, Inc. expressed willingness to employ the strikers belonging to the petitioner union under the condition that the agency to which they belong file a bond in the sum of P5,000 in favor of Macondray and Company, Inc. to respond for any negligence, misfeasance or malfeasance of any of the watchmen of petitioner (Exhibit "1", respondent). This requirement of filing a bond was also demanded of the other two security agencies, the K. Tagle Ship Watchmen Agency and the City Watchmen and Security Agency. However, the Republic Ships Security Agency, to which most of the members of the petitioner union belonged, failed to comply with the demands of Macondray and Company, Inc. that they furnish such a bond. The manager of the agency was one by the name of Fernando Derupe. Because of the failure of the Republic Ships Security Agency to furnish a bond, Macondray and Company, Inc. refused to employ watchmen from the said agency. Some of the members of the agency transferred to the other two agencies that had furnished a bond and after having joined the said agencies they were employed as watchmen by the respondent Macondray and Company, Inc.

On November 15, 1956, Macondray and Company, Inc. was charged with unfair labor practice for having dismissed and refused to employ 38 members of the petitioner herein. Macondray and Company, Inc. answered the complaint alleging that the members of the petitioner union are not its employees, but employees of the Republic Ships Security Agency; that the respondent had not demanded a bond from the members of the petitioner union but from the Republic Ships Security Agency; that it has not discriminated against members of the petitioner union.

The judge of the Court of Industrial Relations who tried the case was Judge Jose S. Bautista. The said judge made the following findings of fact:red:chanrobles.com.ph

"1. On February 18, 1956 there were three (3) watchmen agencies servicing the respondent company with watchmen, namely, the City Watchmen and Security Agency, K. Tagle Ship Watchmen Agency and Republic Ship Security Agency.

"Of these three (3) agencies, only the members of the complainant union working under the Republic Ship Security Agency, struck and abandoned vessels of the respondent company. (Testimony of Gunner pp. 49-53, Hearing of November 2, 1957.) .

"After the said strike of the complaining union on February 18, 1956, a bond of P5,000 was required by the respondent company. No bond was required by the company before the strike. Whereas, K. Tagle Ship Watchmen and the City Watchmen and Security Agency, which did not strike and abandon vessels of the company, filed the required bond, the striking union Associated Watchmen and Security Union refused to file said bond. Consequently, the company stopped giving vessels to Republic Ship Security Agency, hence the watchmen working under said agency were refused reinstatement.

"2. It is an admitted fact that the said 38 individuals are members of the complainant union, working under the Republic Ship Security Agency. (Testimony of Fernando Derupe pp. 42-43, Bearing of September 16, 1957.) .



"In other words, the 38 watchmen were compelled to join the other two agencies who had bonds and resign from the complainant union. They had to do this or help Fernando Derupe to post a bond (which Derupe himself did not want to post) or post the bond themselves, which they could not afford to do.

"By imposing the posting of the bond as a prerequisite for the reinstatement of the strikers, the company could select agencies, which did not join the strike, could control Derupe, their checker and employee, not to post a bond which in fact Derupe did not post."cralaw virtua1aw library

Judge Bautista, as a consequence, held that defendant-respondent is guilty of unfair labor practice in view of the circumstances of the case. He reasoned that by imposing the condition of posting a bond on the agency to which members of the petitioner are affiliated, and by the refusal of the owner of the agency to post the bond, the latter as agent of respondent rendered it impossible for the strikers to go back to work. He, therefore, ordered the members of the union to be reinstated with full back wages from February 18, 1956 up to their actual reinstatement and prohibited the respondent from committing further acts of unfair labor practice. The respondent appealed this decision to the court in banc. On the appeal, three of the judges of the court, Judges Lanting, Martinez and Tabigne, voted to reverse the decision of the trial judge and to dismiss the petition for lack of merit. The other two judges voted for the affirmance of the decision.

From the majority decision a petition has been filed with us, alleging that the respondent judges abused their discretion in making findings of fact without sufficient evidence. The majority decision found that there never was a relationship between petitioner union and respondent Macondray and Company, Inc., and that the agencies with which respondent had dealt with were the City Watchmen and Security Agency, K. Tagle Ship Watchmen Agency and the Republic Ships Security Agency. The majority further found that members of the petitioner union who had transferred to the two security agencies which had furnished the bond, were admitted to work, notwithstanding the fact that they continued to be members of the petitioner union; that if members of the petitioner union could not be employed by the respondent, it is because the agency under which they worked, the Republic Ships Security Agency, had not furnished the bond required of them, which bond was furnished by the two other agencies. We believe that the above findings or conclusions are supported by the evidence.

We also find that the demand of the respondent that the watchmen agencies furnish a bond had become necessary in view of the fact that on or about March 18, 1956, three guards from the Republic Ships Security Agency left the "M/V Talleyrand," a ship of which respondent was an agent, without notice, abandoning their work, and then went on strike without giving advance notice of their intention or desire to do so. The requirement of a bond was, therefore, fully justified by the acts of the members of the petitioner union who were affiliated with the Republic Ships Security Agency and who struck without previous notice.

On the whole, therefore, we find that the majority decision is fully supported by the evidence and by the documents and papers on the record, insofar as it declares that respondent has not been guilty of unfair labor practice.

Judge Bautista, in his dissenting opinion, cites the cases of United States Lines, Et. Al. v. Associated Watchmen and Security Union (PTWO), G.R. No. L-12208-11, May 21, 1958, and Maligaya Shipwatchmen Agency, Et. Al. v. Associated Watchmen & Security Union (PTWO), 55 Off. Gaz. [52] 10681, 103 Phil., 920 in which we held that watchmen and security agencies are not contractors of the shipping agencies or shipping companies, but are merely agents of the same in the recruitment of guards, and that the relationship of employer and employee exists between the shipping lines and the security guards themselves. Our decision in the above cases has no materiality or relevance to the question at issue in the case at bar. The refusal of the respondent to employ guards affiliated with a security or watchmen agency that does not furnish a bond can not constitute an unfair labor practice. Such refusal is merely the exercise of respondent’s legitimate right to protect its own interests, especially as the members of the petitioner had abandoned a ship they were guarding without previous notice and exposed the ship to losses due to theft and pilferage. It is to be noted that the requirement of filing of a bond was not demanded from any of the labor unions, or from the petitioner union herein. We cannot conclude that because the respondent company refused to employ the guards affiliated with the Republic Ships Security Agency, which affiliates are members of the petitioner union, respondent committed an unfair labor practice or a discrimination against petitioner union. As the majority of the court below says, respondent never had any contract or agreement with the petitioner union; respondent secured security guards through the three watchmen agencies above mentioned, without reference to the unions to which the different guards may have pertained. The members of the petitioner union or of the shipping agencies are not ordinary permanent and continuous employees, but merely casual guards who are employed only when there is a ship to be guarded and during the stay of the ship in the port of Manila. Under the above circumstances, the judgment of the minority to the effect that members of the petitioner union be returned to their work and paid back wages is not justifiable.

Wherefore, we find no sufficient reasons for disturbing the findings of the majority of the judges of the court below to the effect that the acts of the respondent Macondray and Company, Inc. do not constitute an unfair labor practice, and we, therefore, affirm the decision of the said majority, with costs against the petitioner herein.

Bengzon, Montemayor, Bautista Angelo, Concepción, Reyes, J. B. L., Endencia, and Gutiérrez David, JJ., concur.

1. TORRENS CERTIFICATE OF TITLE; ENCUMBRANCE BY AN IMPOSTOR; DUTY TO ASCERTAIN IDENTITY OF PERSON WITH WHOM ONE IS DEALING. — Where a surety company acted as a co-signer of a promissory note, and as a security therefor made the person with whom it was dealing execute an indemnity agreement in its favor, and said person turned out not to be the owner of the land but an impostor, the company cannot now shield itself behind the protective fold of the Land Registration Act, which protects one who deals in good faith with lands covered by Torrens title by relying on what appears on the title itself. The company should have taken the necessary precaution to ascertain the identity of the person with whom it was dealing, or that he was the real person mentioned in the document. Since it merely relied on the assurance given by the impostor rather than on the intrinsic value of the title itself, it undertook the transaction at its own peril.

The Manila Surety & Fidelity Co., Inc. brought this action against Jose M. Luna before the Court of First Instance of Manila to recover the sum of P3,506.90, with 12 per cent interest thereon from January 2, 1947, and 15 per cent on the principal amount as attorneys’ fees.

Luna answered the complaint disclaiming responsibility for the amount claimed therein but at the same time he impleaded as third party defendants Jose Calderon, Precioso S. Peña and Jose B. Herrera alleging connivance on their part in the commission of the forgery which plaintiff company now wants to pin on him. In due time, the third party defendants answered the complaint of Luna setting up certain specific defenses.

The case having been submitted on a stipulation of facts, the court, on April 26, 1956, rendered decision in favor of plaintiff and against defendant Jose M. Luna, ordering the latter to pay plaintiff the sum of P3,506.90, with 6 per cent interest thereon from January 4, 1947, and the sum of P350.00 as attorneys’ fees, plus the costs of action. After Luna had taken the case on appeal to the Court of Appeals, the case was certified to us on the ground that only questions of law are involved.

The facts, as found by the trial court, are:jgc:chanrobles.com.ph

"From the pleadings and the stipulation of facts submitted by the parties, the following facts appear: Defendant Jose M. Luna was the registered owner of a parcel of land and the improvements thereon, located at No. 410 Peñarubia, Manila, and covered by Transfer Certificate of Title No. 44225 of the Register of Deeds of Manila. The said property was previously mortgaged to El Hogar Filipino but was, sometime in 1946, redeemed by the defendant for the purpose of having the same negotiated. He entrusted the same to Jose Calderon sometime in the middle of 1946 in order that the latter may find and contact someone who would be willing to extend a loan of P5,000 or P6,000 on the guaranty of the property. Somehow, or another, the said title with other documents evidencing ownership of the property came into the hands of another person who went to the Manila Surety and Fidelity Co., Inc., and representing himself to be Jose M. Luna solicited for a credit accommodation of P5,000.00 to P6,000.00. That on September 4, 1946, the surety company agreed to accommodate the credit solicited and accordingly signed a promissory note, as co-maker with the person who represented himself as the defendant, in favor of the Philippine National Bank for the sum of P3,500. This promissory note was taken by that person to the Philippine National Bank and a cashier’s check for P3,430.60 was issued by the bank. Said individual, continuing the masquerade, signed the check as payee thereof and withdrew the face value thereof. As security in favor of the surety company, this person also executed as indemnity agreement in favor of said company and delivered the title of the property and the other documents evidencing title under a deed of mortgage. The promissory note in favor the Philippine National Bank fell due and the surety company sent a letter of notification to Jose M. Luna. This notice was received by the defendant in this case sometime in December, 1946, and he went to the company to inform them that he had not entered into the transaction mentioned in the letter of notification. When the promissory note fell due, the surety company had no choice but to pay the Philippine National Bank and then instituted the present action to recover the amount it had paid to the Bank."cralaw virtua1aw library

In reaching the conclusion that defendant Luna must bear the loss occasioned by the forgery committed by the person who impersonated him when he approached the officials of the plaintiff company seeking its accommodation for a loan he wanted to obtain from the Philippine National Bank, the trial court made the following observation:jgc:chanrobles.com.ph

"Defendant Jose M. Luna admits that sometime in the middle part of 1946 he parted with his title to the property and other documents evidencing ownership over the same. He claimed to have delivered them to Jose Calderon whom he had authorized to look for a person who would be willing to give a loan on the property in the sum of P5,000 or P6,000.00. While there is nothing in the records to show that Jose Calderon was the person who represented himself to the plaintiff company as Jose M. Luna, nor to the effect that the person who negotiated with the surety company was a sub-agent or person connected with Jose Calderon, yet, the act remains that the defendant had clothed a third person with apparent, if not real authority, to negotiate his property for a loan. The rule of equity and which is the rule in our jurisdiction is — As between two innocent persons, one of whom must suffer the consequence of a breach of trust, the one who made it possible by his act of confidence must bear the loss. (Blondeau v. Nano, 61 Phil., 625.) Applying this principle on the case at bar, the Court must necessarily arrive at the conclusion that the defendant must bear the loss."cralaw virtua1aw library

This ruling is now assigned as error, appellant contending that he cannot be made to answer for the loss because while he entrusted his title and other pertinent papers to one Jose Calderon it was merely for a specific purpose and not to authorize him to make use of them in any transaction to his prejudice. We are inclined to uphold this contention. To begin with, we are of the opinion that the ruling in the Blondeau case cited by the trial court in support of its conclusion that defendant Luna must bear the loss cannot be invoked in the instant case considering that the facts obtaining in both cases are different. The Blondeau case refers to the foreclosure of a mortgage on a land belonging to one Jose Vallejo whose signature was forged by one Agustin Nano even if the documents of title were entrusted by Vallejo to Nano which made it possible for the latter to commit the fraud. The property was covered by a Torrens title, and on the strength of that title Angela Blondeau, the creditor, was inveigled into agreeing to grant the loan only to find later that the signature of the owner has been forged. In holding that between the owner and the mortgagee the latter should be protected, this Court said: "When a mortgagee relies upon a Torrens title and loans money in all good faith on the basis of the title standing in the name of the mortgagor, only thereafter to discover one defendant to be an alleged forger and the other defendant to have by his negligence or acquiescence made it possible for the fraud to transpire, as between two innocent persons, the mortgagee and one of the mortgagors, the latter who made the fraud possible by his act of confidence must bear the loss." And in explaining the philosophy behind this ruling, the Court made this significant pronouncement: "The Torrens Act permits a forged transfer, when duly entered in the registry, to become the root of a valid title in a bona fide purchaser. The act erects a safeguard against a forged transfer being registered, by the requirement that no transfer shall be registered unless the owner’s certificate was produced along with the instrument of transfer. An executed transfer of registered lands placed by the registered owner thereof in the hands of another operates as a representation to a third party that the holder of the transfer is authorized to deal with the lands.."

The facts obtaining in the present case are different. While it is true that defendant Luna entrusted to one Jose Calderon his owner’s duplicate copy of Transfer Certificate of Title No. 4425 and other pertinent papers in order to enable Calderon to contact the person whom he assured was willing to extend a loan on the guarantee of the property, and availing himself of said documents the impostor approached plaintiff company and represented himself to be the person mentioned in said documents, the company however limited itself to agreeing to act as a co-signer of a promissory note and as a security therefor it merely made the impostor execute an indemnity agreement in its favor. In other words, the company did not obtain in its favor a mortgage on the land belonging to Luna, but contented itself with obtaining his personal guarantee. Such being the case, the company cannot now shield itself behind the protective fold of the Land Registration Act which protects one who deals in good faith with lands covered by Torrens title by relying on what appears on the title itself. We have here, therefore, a case where plaintiff merely relied on the assurance given by the impostor himself rather than on the intrinsic value of the title itself, or to be more specific, this case resolves itself into a question of identification.

In dealing with the impostor, the company should have taken the necessary precaution to ascertain his identity, or that he is the real person mentioned in the document, and having failed to do so, it undertook the transaction at its own peril. Such failure is considered more glaring considering that plaintiff is a business enterprise dealing with the public and is assisted by a notary public whose duty is to ascertain the identity of the person who appears before him. It is not without a purpose that the law requires that a party who appears before a notary public should exhibit his certificate of residence to avoid any impersonation, and if this was made possible here, it must be because the notary public failed to act with the diligence required by the circumstances. To plaintiff, therefore, applies fittingly the following admonition of this Court:red:chanrobles.com.ph

". . . But, where the title was still in the name of the real owner when the land was mortgaged to the plaintiffs by the impostor, although it was not incumbent upon them to inquire into the ownership of the property and so beyond what was stated on the face of the certificate of title, it was their duty to ascertain the identity of the man with whom they were dealing, as well as his legal authority to convey. That duty devolves upon all persons buying property of any kind, and one who neglects it does so at his peril." (De Lara, Et. Al. v. Ayroso, 95 Phil., 185, 50 Off. Gaz. No. 10, 4838; Italics supplied.) .

Wherefore, the decision appealed from is reversed. The complaint is dismissed, with costs against appellee.

Paras, C.J., Bengzon, Montemayor, Labrador, Concepción, Reyes, J. B. L., Endencia, and Gutiérrez David, JJ., concur.

Barrera, J., concurs in the result.

1. ARRASTRE SERVICE; LIMITATION OF ARRASTRE OPERATORS LIABILITY; ACCEPTANCE OF BENEFITS BY CONSIGNEE EFFECT OF. — When a third person accepts the benefits of a contract, he is also bound to accept the concomitant obligations corresponding thereto. In case at bar the consignee accepted the benefits under the Management Contract between the arrastre operator and the Bureau of Customs. Consequently, it became liable to the obligations under the said contract.

2. ID.; ID.; VALIDITY OF PARAGRAPH 16 OF MANAGEMENT CONTRACT BETWEEN ARRASTRE OPERATOR AND BUREAU OF CUSTOMS. — The validity of Paragraph 15 of the Management Contract between the arrastre operator and the Bureau of Customs, limiting the liability of the former unless the value of the cargo is specified, cannot be assailed by an importer or consignee, because it can adequately protect itself by simply specifying or manifesting the actual value of the imported cargo in the various documents required under the law, and by paying the corresponding arrastre charges of the same.

Plaintiff-appellant Jose Bernabe & Co., owner of a shipment of machine spare parts unloaded into the custody of defendant-appellee Delgado Brothers, Inc., as arrastre operator in the Port of Manila, filed in the Court of First Instance of Manila (in Civil Case No. 30615) a complaint against appellee, seeking to recover from the latter the sum of P2,835.00, representing the replacement value of a diesel machine flywheel damaged, allegedly, while in the custody of appellee. Appellee in his answer denied liability therefor, and on the date of the hearing, the case was submitted upon the following:jgc:chanrobles.com.ph

"STIPULATION OF FACTS

"COME NOW the parties in the above-entitled case, through their respective counsel, and to this Honorable Court respectfully submit the following Stipulation of Facts:jgc:chanrobles.com.ph

"1. That plaintiff is the owner of a shipment consisting of machine spare parts unloaded from the S. S.’BENCLEUCH’ in the Port of Manila, under Registry No. 1434, Bill of Lading No. 22, which arrived in Manila on December 5, 1955;

"2. That at the time the S. S.’BENCLEUCH’ arrived in Manila and unloaded her cargo, the defendant was the arrastre contractor for the Port of Manila and, as such, in charge of receiving cargo unloaded from vessels unto the piers, and delivery of same to consignee or their duly authorized representatives, pursuant to and subject to the Management Contract entered into between the Bureau of Customs and herein defendant a copy of which is hereto attached, marked ANNEX ’A’ and made a part hereof. The parties stipulate, however, that plaintiff is not a signatory to the said Management Contract;"

3. That the aforementioned shipment included a Diesel Engine GL913 (FLYWHEEL FOR TANGYE) which was unloaded from the S. S.’BENCLEUCH’ and was received at nighttime by defendant in the course of its arrastre operations uncrated and unpacked and in apparent good order condition, and the corresponding clean Tally Sheet therefore was issued, as per attached ANNEX ’B’;

"4. That at the time plaintiff’s representative broker appeared before the defendant to take delivery of said shipment consigned to plaintiff, said representative requested for a Bad Order Examination of the Flywheel which inspection was conducted by a representative of the defendant in the presence of plaintiff’s representative, and the result of the examination appears in the B. O. Examination Report hereto attached, marked ANNEX ’C’;

"5. That as a result of the findings of the B. O. Examination of the Flywheel in question, plaintiff’s representative filed a Formal Claim on December 28, 1955 in further reference to claim under Ref. 8193-E-12-55;

"6. That plaintiff’s representative or broker took delivery of the Flywheel in question from the defendant by signing and presenting permit to deliver imported goods with entry No. 99075, File No. 5100, and in reverse side of which there appears the following notice in rubber stamp, to wit:chanrob1es virtual 1aw library

‘IMPORTANT NOTICE

‘This permit is presented subject to all the terms and conditions of the Management Contract between the Bureau of Customs and Delgado Brothers, Inc., dated October 21, 1950, and amendments thereof or alterations thereof, particularly but not limited to Paragraph 15 thereof limiting the Company liability to P500.00 per package, unless the value of the goods is otherwise specified, declared or manifested and the corresponding arrastre charges have been paid; providing exemptions or restrictions from liability unless suit is brought within one (1) year from the date of the arrival of the goods has been rejected, provided such claim is filed with the Company within 15 days from date of arrival of goods.’

a photostatic copy of which is hereto attached and marked ANNEX ’D’ hereof;

"7. That upon the presentation of the permit to deliver imported goods with the defendant, herein defendant issued a Gate Pass, No. 36051, and in which there appears the following printed words, to wit:chanrob1es virtual 1aw library

‘The undersigned, duly authorized to respectively represent the Bureau of Customs the above named CONSIGNEE and the Arrastre Service Operator hereby certify to the correctness of the above description of the goods covered by this Gate Pass. Issuance of this Gate Pass constitutes delivery to and receipt by CONSIGNEE of the goods as described herein, subject to all the terms and conditions contained in the Management Contract between the Bureau of Customs and Delgado Brothers, Inc., dated October 21, 1950, and all amendments thereto or alterations thereof, particularly but not limited to Paragraph 15 thereof limiting the company liability to P500.00 per package, unless the value of the goods is otherwise specified or manifested, providing exemptions from liability unless suit is brought within one (1) year from the date when the claim for the value of the goods has been rejected, provided such claim is filed with the Company within 15 days from the date of the arrival of the goods.’"

a photostatic copy of which is hereto attached and marked ANNEX ’E’.

"The Gate Pass containing the above notation was also duly signed by plaintiff’s representative or broker.

"8. That the parties herein reserve the right to present evidence on points not covered by the above Stipulation of Facts;

"9. That the parties herein reserve the right to present simultaneous memoranda within thirty days from receipt of order admitting the Stipulation of Facts."cralaw virtua1aw library

Subsequently, the parties submitted a "Supplemental Stipulation of Facts", as follows:jgc:chanrobles.com.ph

"SUPPLEMENTAL STIPULATION OF FACTS

"COME NOW the parties in the above-entitled case, and in accordance with the commitment made in open court on December 18, 1956, respectfully submit this Supplemental Stipulation of Facts:jgc:chanrobles.com.ph

"1. That the parties admit that, as the replacement cost of Flywheel GL-913, had plaintiff presented a witness, he would have identified the attached Letter, dated December 15, 1956, of the Pacific Exchange Corporation giving quotation of replacement cost, and which letter is hereto attached marked as Annex ’E’ and made an integral part hereof;

"2. That to date plaintiff has not as yet received the replacement for the said Flywheel."cralaw virtua1aw library

On the basis of the foregoing Stipulation and Supplemental Stipulation of Facts, the court rendered decision which, in part, reads:jgc:chanrobles.com.ph

"The Court is of the opinion that the plaintiff is bound by the provisions of the management contract. As a matter of fact, it complied with such provisions as were necessary for it to take delivery of the cargo. Plaintiff should not take advantage of the management contract when it suits him to do so, and reject its provisions when it thinks otherwise.

"The management contract provides for a liability of not more than P500.00. This being the case, defendant is only liable to this amount.

"IN VIEW OF THE FOREGOING, judgment is hereby rendered in favor of the plaintiff and against the defendant, ordering the latter to pay to the former, the amount of P500.00, plus 25% of this amount as attorney’s fees. Defendant shall also pay the costs."cralaw virtua1aw library

Not satisfied with said decision, plaintiff appealed to the Court of Appeals, but said court, in its resolution dated August 5, 1958, elevated the case to us, on the ground that it involves only question of law.

The pivotal issue presented by the appeal is whether the provisions of Paragraph 15 of the Management Contract between appellee and the Bureau of Customs, limiting appellee’s liability to P500.00 per package of merchandise, unless the value thereof is otherwise specified or manisfested, and the corresponding arrastre charges had been paid, are binding upon plaintiff-appellant, despite the fact that the latter was never a signatory to the contract.

Paragraph 15 of the Management Contract in question, reads in part, as follows:jgc:chanrobles.com.ph

"15. It is further understood and strictly agreed that the CONTRACTOR (appellee) shall at its own expense handle all merchandise upon or over said piers, wharves and other designated places, and at its own expense perform all work undertaken by it hereunder diligently and in a skillful workmanlike and efficient manner; and the CONTRACTOR (appellee) shall be solely responsible as an independent contractor for, and promptly pay to the steamship company, consignee, consignor, or other interested party or parties the invoice value of each package but which in no case shall be more than five hundred pesos (P500.00) for each package, unless the value is otherwise specified or manifested, and the corresponding arrastre charges had been paid, including all damages that may be suffered on account of loss, destruction, or damage of any merchandise while in the custody or under the control of the CONTRACTOR (appellee) upon any pier, wharf or other designated place under the supervision of the BUREAU, . . ." (Italics supplied.)

In support of appellant’s contention that the above contractual provision (the intrinsic validity of which is not questioned in this case) is not binding upon it, reliance is placed on the provisions of Article 1311 of the Civil Code, reading thus:jgc:chanrobles.com.ph

"ART. 1311. Contracts take effect only between the parties, their assigns and heirs, except in case where the rights and obligations arising from the contract are not transmissible by their nature, or by stipulation or by provision of law. The heir is not liable beyond the value of the property he received from the decedent.

"If a contract should contain some stipulation in favor of a third person, he may demand its fulfillment provided he communicated his acceptance to the obligor before its revocation. A mere incidental benefit or interest of a person is not sufficient. The contracting parties must have clearly and deliberately conferred a favor upon a third person."cralaw virtua1aw library

Appellant argues, that in the light of the above-quoted article, contracts are binding and enforceable only between the parties, their assigns and heirs, the only exception being a third person not a party thereto, in whose favor a benefit is clearly and deliberately conferred. Although appellant admits that the aforementioned Management Contract contains provisions "benefitting persons not parties thereto for said contract pertains to serving the public (sic)", and that "anyone desiring to avail of such services has the right to demand it despite the fact that he was not a party to the Management Contract", it claims, nevertheless, that such third parties can not be bound by stipulations and conditions thereunder which are onerous or prejudicial to them. Appellant’s argument does not accord with and is not justified by the spirit (if not the letter) if the law. When a third person accepts the benefits of a contract, he is also bound to accept the concomitant obligations corresponding thereto. As the lower court correctly observed: "Plaintiff should not take advantage of the management contract when it suits him to do so, and reject its provisions when it thinks otherwise."cralaw virtua1aw library

Appellant, further, contends that the contractual obligation in the aforequoted Paragraph 15 of the Management Contract limiting appellee’s liability is arbitrary, unjust, and unreasonable being practically forced upon it, since there was absolutely no way for it to receive the imported cargo except by engaging appellee’s services as sole operator of the arrastre service in the Port of Manila. Its consent, it is claimed, was not voluntary, and hence, not valid.

In answer, it may be stated that appellant could adequately protect itself, by simply specifying or manifesting the actual value of the imported cargo in the various documents required of it under the law, 1 and paying the corresponding arrastre charges of the same, pursuant to the provisions of said Paragraph 15, and of the "Important Notice" contained in the Delivery Permit and Gate Pass which its representatives or broker accepts, signs, and utilizes, upon taking delivery of the imported cargo from appellee arrastre operator, in which event, the latter expressly binds itself and undertakes to reimburse appellant the actual value of the cargo, in case of its damage, destruction, or loss while under its custody. If appellant failed to so stated the value of its merchandise in any of these documents required by law before it cleared its goods, and paid only the arrastre charge based on a lesser value, it can not in justice now demand the full undeclared value.

We, find, therefore, that Paragraph 15 of the Management Contract is binding upon the herein plaintiff-appellant. Decision appealed from is hereby affirmed, with costs against the plaintiff-appellant. So ordered.

Bengzon, Montemayor, Bautista Angelo, Labrador, Reyes, J. B. L., and Endencia, JJ., concur.

Endnotes:

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1. Import entry (Sec. 1267, Rev. Adm. Code); written declaration (Sec. 1268-6, in connection with Secs. 1269 and 1271, Rev. Adm. Code).

MUNICIPAL CORPORATIONS; LEASE OF MUNICIPAL PROPERTY; INCREASE OR DECREASE OF RENTALS. — Where a municipal council by resolution grants to the municipal mayor authority to enter into a contract of lease of certain portion of the municipal land with private individuals, on condition that the municipal council may, by ordinance, increase or decrease the rental should conditions warrant the same, the burden of proof is on the municipality to prove that the conditions warrants an increase in rental in order that the ordinance passed by it raising the rental may have binding effect on the contract of lease.

Plaintiffs brought this action against defendant before the Court of First Instance of Nueva Ecija seeking to declare Ordinance No. 12, series of 1956, null and void on the ground that it impairs the contract of lease entered into between them covering portions of the facing the public market belonging to the City of Cabanatuan.

Defendant set up the defense that said ordinance does not have the effect of impairing any contractual obligation because the contract of lease mentioned in the complaint is null and void for having been executed by the mayor in excess of his authority.

After trial, the court held that Ordinance No. 12, insofar as it raises the rental of the portions of land covered by the contract of lease entered into between the parties, has no binding effect upon said contract for it will be a violation of a contractual obligation. It dismissed defendant’s counterclaim without pronouncement as to costs. Defendant took to the Court of Appeals, but appellate court certified the case to us on the ground that only questions of the law are involved.

Prior to January 4, 1950, Lot 1511 of the Cadastral Survey of Cabanatuan belonging to the City of Cabanatuan was leased to several persons. On said date, Aurora Rodriguez, Et Al., plaintiffs herein, wrote letter to the Municipal Council of Cabanatuan requesting that the mayor be authorized to enter into a contract of lease with them regarding portions of said lot which were already occupied by them for a period of not exceeding 10 years with an option to renew for a like period at the same rate per square meter they were then paying which was P0.30 per square meter considering that the present month to month lease they have leaves them no security of tenure, and acting on this request the municipal council approved Resolution No. 2 granting the municipal mayor the requisite authority to enter into the petition provided that the municipal council may, by ordinance, increase or decrease the rental should conditions warrant said increase or decrease.

Pursuant to said resolution, the City of Cabanatuan entered into separate contracts of lease with the plaintiffs covering different portions of the lot wherein the lessees agreed to pay a rental at the rate of P0.30 per square meter per month. This was the rate which plaintiffs paid until April, 1956, when the Municipal Board of Cabanatuan City approved Ordinance No. 12 raising the rental from P0.01 per square meter a day to P0.03 per square meter a day. And considering this ordinance violative of their contracts of lease, plaintiffs instituted the present action.

In the contract of lease entered into between plaintiffs and defendant, one of the stipulations agreed upon is as follows: "That the rate of rental stipulated under paragraph 2 may be increased or decreased should the Municipal Council find it advisable to effect such increase or decrease and the party of the second part is willing to pay such new rental as fixed by the Municipal Council on condition that any decrease or increase in the rate of rental shall be within (50%) per cent of the present rate agreed upon." It is appellee’s contention that in view of this limitation in the rate of rental that may be decreased or increased, appellant cannot now impose a rate beyond the limit fixed, otherwise it will be violative of the contract. Appellant, on the other hand, contends that that limitation is ineffective because it is in excess of the authority conferred upon the mayor by Resolution No. 2 which provides that only the municipal council may by ordinance increase or decrease such rental if conditions should warrant, which conditions cannot be limited by the mayor.

The trial court, however, did not find it necessary to pass upon the question of whether the limitation which was acceded to by the former mayor who signed the lease contract is or is not beyond his authority because it entertained the opinion that regardless of such limitation the important question to determine was whether the increase in the rental in accordance with Ordinance No. 12 was warranted by the conditions then prevailing at the time it was adopted by the Municipal Board of Cabanatuan City. In this respect, the trial court made the following interesting observation:jgc:chanrobles.com.ph

"Under Resolution No. 2 of Cabanatuan City, the Municipal Board may by ordinance increase or decrease the rental should conditions warrant such increase or decrease." Under the terms of the resolution which had been accepted by the lessees, the Municipal Council may increase or decrease. The resolution does not reserve to the Municipal Board the absolute power to raise or decrease the rental at its whim caprice. The conditions must warrant the increase. And it is but fair and reasonable that the Municipal Council should not have the absolute power and authority to increase the rental, for if it had, such reservation will be void for it leaves the fulfillment of the contract to one party; and secondly, to give that authority to the Municipal Board, assuming it to be valid would subject the lessees to the mercies of the Municipal Board. . . .

"To repeat, the Municipal Council under Resolution 2 could increase or decrease the rental during the period of the lease only when the conditions warrant. The authority is dependent upon the fulfillment of this condition. What these conditions which would warrant the increase or decrease of the rental are, do not appear from Resolution No. 2. But it may be presumed that the conditions which should warrant the increase of the rental would be the rise in the value of real property, increased volume of business, and such other circumstances which would show that the lease has been profitable to the lessee. In raising the rental to three times the rental agreed upon in the contract of lease in Section 2 of Ordinance No. 12, Municipal Board has acted arbitrarily. Nothing in Ordinance No. 12 appears to show that the conditions warrant the raising of the rental as authorized in Resolution No. 2, and no evidence had been presented by the defendant that the condition warranted such increase of the rental from P0.01 per square meter a day to P0.03 per square meter a day, or three times the rental agreed upon. On the contrary, it is admitted that the lot of Samahang Magsasaka which is adjacent to Lot 1511 of the defendant City of Cabanatuan charges the same rate of P0.01 per square meter a day as is now charged to the present lessees by the defendant City of Cabanatuan. It is true that the City of Cabanatuan charges a rental P0.05 per square meter a day on the market lots which is on the opposite side of the street. But this alone does not prove that the conditions warrant the raising of the rental on Lot 1511. Conditions in the market site are different from conditions existing on the lot in question even if they are on the same street. A market is a place where people converge especially during market hours. People who go to the market would not take the trouble of crossing the street and making their purchase on the other side. What they can purchase in the market site they would purchase there. And moreover, the right or authority of the defendant to charge a rental on the market site is different from its authority to raise the rental under the contract of lease entered into by the plaintiffs. The authority of the defendant to raise the rental is subject to the limitation that the condition should warrant the raise. The burden is upon the defendant to prove that the conditions warrant such a raise. This it had not done. On the contrary, if one is to judge from the rental charged by the Samahang Magsasaka, the conditions did not warrant the raising of the rental."cralaw virtua1aw library

We have nothing to add to the foregoing observation of the trial court which we find warranted by the circumstances surrounding the contract of lease entered into between the parties. Indeed, even if we give emphasis to Resolution No. 2 which served as the basis of the authority exercised by the Mayor of Cabanatuan in entertaining into said contract as appellant wants to have it, we would find that the increase in the rental embodied in Ordinance No. 12 would still appear arbitrary for, as the trial court said, defendant has not adduced any proof justifying the increase of the rental by 300%. Note that said resolution expressly provides that the municipal council may authorize the increase only when existing conditions would warrant. The exercise of such authority is therefore predicated upon a condition which in this case was not complied with. This being a matter which is evidentiary in character, we are not now justified in disturbing the appreciation of the situation made by the trial evidence. We are therefore persuaded to affirm, as we hereby do, decision of the trial court.

Wherefore, the decision is hereby affirmed, without pronouncement as to costs.

Paras, C.J., Bengzon, Montemayor, Labrador, Concepción, Reyes, J. B. L., Endencia, Barrera and Gutiérrez David, JJ., concur.

ACTIONS; SUFFICIENCY OF CAUSE OF ACTION; EXHAUSTION OF ADMINISTRATIVE REMEDY NOT NECESSARY IN CASE AT BAR. — In case at bar the parties had to agree and the court had to approve the agreement that the Director of Public Schools shall recommend to the proper officials not later than June 30, 1958 and before the closing of office hours on that date the commitment of the sum of P840.00 claimed by petitioner to be due him under Republic Act No. 842, to accounts payable in order to prevent its reversion. This is a recognition by the parties as well as the court of the validity and urgency of the action taken by petitioner. Under the circumstances, petitioner should be deemed to have had sufficient cause of action at the time he filed his petition for mandamus on June 11, 1958, and in view of the special situation, resort to the court without awaiting for the final decision of the administrative officers is not premature.

Anacleto Alzate, Principal of the South Provincial High School in Agoo, La Union Province, had taken this present appeal from an order of the Court of First Instance of La Union in Civil Case No. 1308 dismissing his petition for mandamus to compel herein respondents Director of Public Schools and the Division Superintendent of Schools for La Union, to adjust his salary pursuant to the provisions of Section 4, paragraphs (a) and (b) of Republic Act No. 842, entitled Public School Salary Act of 1953. The order of dismissal is predicated on the finding that the same was premature, petitioner not having exhausted all the administrative remedies available to him.

The records show that on December 20, 1957, petitioner wrote to the respondent Director of Public Schools claiming that taking into account his 24-years service in the Bureau of Public Schools in various capacities, the last one as secondary principal, he (petitioner) was entitled under Section 4, paragraph (a) of Republic Act No. 842 to an automatic salary increase of 4 rates (1 rate for every 5 years of service) after his salary has been adjusted to the minimum, and to an additional automatic salary increase of 1 rate, pursuant to paragraph (b) of the same section and Act, for having passed the examination for Superintendent of Private Schools given by the Civil Service Commission. The Director of Public Schools, in his 2nd Indorsement dated March 10, 1958, addressed to the Division Superintendent of Schools for La Union, denied petitioner’s request contending that in the adjustment of salary of secondary principals, only the actual number of years of service as such secondary principal would be considered, and as petitioner has to his credit in that capacity 9 years, 8 months and 15 days, he would be entitled only to one rate of salary increase; and since the examination taken and passed by petitioner was only for the Bureau of Private Schools, petitioner was not entitled to the benefit of paragraph (b) of the Public School Salary Act. This indorsement of denial was received by the petitioner on April 14, 1958. On May 17, 1958, petitioner requested for a reconsideration of the aforementioned ruling, citing in support thereof an opinion of the Secretary of Justice (Op. No. 144, S-1956) that in the adjustment of salaries under Republic Act No. 842, the length of service in the educational branch of the government and not merely that in the position occupied at the time of the adjustment, should be considered. This letter for reconsideration was received by the Bureau of Public Schools on May 23, 1958. It appears that on May 30, 1958, the same has been processed by a certain Mr. Samson of the Bureau of Public Schools and a memorandum thereon was submitted to Dr. Aldana, Dr. Bernardino, and Dr. Guiang, all of the same bureau.

On June 11, 1958, Petitioner, not having received any ruling on his request for reconsideration and fearing that the amount appropriated for the payment of the salary adjustment of public schools teachers and officials, if not disbursed or committed before the expiration of the fiscal year on June 30, 1958, would be reverted to the general funds of the Government, filed a mandamus proceeding in the Court of First Instance of La Union for the purpose indicated in the beginning of this opinion.

On June 27, 1958, after due hearing on the petition for a writ of preliminary preventive and mandatory injunction, the court in its order of the same date made the following observation:jgc:chanrobles.com.ph

"After a conscientious deliberation between the petitioner and the representatives of the respondents with the assistance of their respective counsel, it has been agreed in open court that the Director of Public Schools shall recommend to the proper officials not later than June 30, 1958 and before the close of office hours on that date the sum of P840.00 to accounts receivable the amount being claimed by the herein petitioner and all other sums that the Director of Public Schools may believe necessary for the interest of all other school officials and teachers who may be benefited with whatever favorable decision, if any, that may be secured by the petitioner in this case. By reason of such assurance, the petitioner desisted in pressing for the resolution on his prayer for the issuance of a writ of preliminary mandatory injunction regarding the certification to accounts payable of said amount of P840.00."cralaw virtua1aw library

Thereafter, respondents filed their motion to dismiss on the grounds that the petition stated no cause of action against respondents; that petitioner had not exhausted all administrative remedies before coming to court, and that the lower court had acquired no jurisdiction over the case.

On July 31, 1958, the court a quo, acting on the motion to dismiss and the objection thereto, made the following observation:jgc:chanrobles.com.ph

"There is no question that the petitioner following the opinion rendered by the Secretary of Justice may be right in his contention that in making salary adjustments under Republic Act 842, the length of service rendered in the educational branch of the government and not merely that in the position occupied at the time of the adjustment ought to be considered’. But this court believes and so holds that notwithstanding such opinion, the present action taken and filed by the petitioner is quite premature because all the administrative remedies have not as yet been exhausted."cralaw virtua1aw library

Accordingly, the petition was dismissed without prejudice to the right of the petitioner to file an appropriate action at the opportune time.

The only question presented in this appeal is whether really the petition filed on June 11, 1958, while the Director of Public Schools was still considering petitioner’s request for reconsideration of the previous ruling of March 10, 1958, stated no cause of action in view of the non-exhaustion of administrative remedies. It appears from the petition that the reason for its filing without awaiting the final action on the part of the respondent Director of Public Schools was the urgency of preventing the automatic reversion as of July 1, 1958, after the expiration of the then current fiscal year, of the sum appropriated in Republic Act No. 2042 for the adjustment of salary of public school officials and teachers pursuant to Republic Act No. 842. Petitioner contends that if he waited for the final decision on his petition for reconsideration which was not forthcoming, and in fact did not come, before June 30, 1958, whatever action may thereafter be taken by respondent, even if favorable to petitioner, would be of no avail after the reversion of the funds appropriated for the purpose of salary adjustment. Hence, he claims, that to require him to exhaust the administrative remedies would, in the circumstances of the case, in effect amount to a nullification of his claim.

There is merit in petitioner’s contention. The fact that the parties had to agree and the court had to approve the agreement that the Director of Public Schools shall recommend to the proper officials not later than June 30, 1958 and before the closing of office hours on that date the commitment of the sum of P840.00 claimed by petitioner, to accounts payable in order to prevent its reversion, is a recognition by the parties as well as the court of the validity and urgency of the action taken by the petitioner-appellant. It would seem, therefore, that in the particular circumstances of the present case, petitioner had sufficient cause of action at the time of the filing of his petition on June 11, 1958, and a resort to the court without awaiting for the final decision of the administrative officers is not, in view of the special situation, premature.

Wherefore, the order appealed from is hereby set aside and the case remanded to the court of origin for further proceedings. Without costs. So ordered.

Paras, C.J., Bengzon, Montemayor, Bautista Angelo, Labrador, Concepción, Reyes, J. B. L., and Endencia, JJ., concur.

1. ESTAFA; CHATTEL MORTGAGE; WHEN THERE IS FALSE REPRESENTATION AND DECEIT. — Where a person received from another a certain sum of money by way of loan, and to secure the same he executed in favor of the latter a deed of chattel mortgage on a two-story house, expressly warranting therein that the same was free from any lien or encumbrance, which warranty is untrue since the same property had already been previously mortgaged by him in favor of another, and said mortgage is still subsisting, there was, on the part of the borrower, false representation or deceit, which is one of the elements constituting the crime of estafa.

2. ID.; ID.; NON-EXPIRATION OF THE PERIOD OF MORTGAGE IMMATERIAL; WHEN THERE IS DAMAGE OR INJURY. — The fact that the mortgage is for a period of five years and that period has not yet expired does not mean that the mortgagee has not suffered any damage or injury as a consequence of the fraud, for he has been deprived of the use of his money because of such fraud while he stands to lose it in view of his failure to obtain the registration of the deed of mortgage. Such failure has caused damage or injury to the mortgagee, and constitutes one of the elements of estafa.

Charged and convicted of estafa by the Court of First Instance of Manila, Andres C. Galsim was sentenced to suffer the penalty of 2 months and 1 day of arresto mayor, with the accessory penalties prescribed by law, to pay a fine of P2,500.00, to indemnify the offended party in the same amount, with subsidiary imprisonment in case of insolvency, and to pay the costs. After appealing from this decision, the Court of Appeals certified the case to us on the ground that only questions of law are involved.

On September 4, 1953, the accused obtained a loan from one Mauro Magno in the amount of P2,500.00 payable within a period of five years, and to secure its payment the former executed in favor of the latter a deed of chattel mortgage assigning and conveying by way of first mortgage a two-story house located in the City of Manila. One month after the transaction, Mauro Magno tried to insure the property mortgaged with the Central Surety & Insurance Company for the sum of P3,000.00 and on that occasion the company informed Magno that the house in question had already been previously mortgaged by its owner to a certain Dela Torre. Upon verification of the matter made by Magno in the office of the register of deeds, he found that the information was correct and that the accused had not yet redeemed the first mortgage nor paid the obligation covered by it which was still subsisting. As a result, the deed of mortgage executed by the accused in favor of Magno was refused registration by the register of deeds. Magno demanded the return of his money from the accused but the latter failed to do so.

Appellant does not deny having received from the complainant the sum of P2,500.00 by way of loan and that to secure the same he executed in his favor a deed of chattel mortgage on a two-story house expressly warranting therein that the same was free from any lien or encumbrance. It developed however that such warranty is not true for it was later discovered that the same property had already been previously mortgaged by appellant in favor of spouses Alejandro Anatolio and Juliana dela Torre which mortgage was still subsisting. It is evident that the appellant obtained the loan from complainant through false representation or deceit which is one of the elements constituting the crime of estafa. It is apparent that the complainant had granted the loan to appellant in the belief that the security offered was good and sufficient to guarantee his investment because it was free from any lien or encumbrance. Had he known that it was already encumbered, the likelihood was that he would not have granted the loan, which proves the fraud of which he was a victim.

But appellant contends that under the facts proven he cannot be guilty of estafa for there is nothing to show that complainant has suffered any damage or injury as a result of the execution of the second mortgage. This contention is untenable. While the mortgage executed by appellant in favor of complainant is for a period of five years and that period has not yet expired, it does not follow that complainant has not suffered any damage or injury as a consequence of the fraud for indeed he has been deprived of the use of his money because of such fraud while he stands to lose it in view of his failure to obtain the registration of the deed of mortgage. It must be noted that when complainant tried to register the mortgage in the office of the register of deeds the latter refused registration for the apparent reason that the same could not be registered as first encumbrance on the property. In the circumstances, the damage or injury that such failure of registration has caused the complainant is apparent and constitutes one of the elements of estafa under the law (U.S. v. Goyenechea, 8 Phil., 117; U.S. v. Malong, 36 Phil., 821).

The decision appealed from being in accordance with law and the evidence, the same is hereby affirmed, with costs against Appellant.

Paras, C.J., Padilla, Montemayor, Labrador, Concepción, Reyes J. B. L., Endencia, Barrera and Gutierréz David, JJ., concur.