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EN BANC [G.R. No. L-63915. December 29, 1986.] LORENZO M. TAADA, ABRAHAM F.

SARMIENTO, and MOVEMENT OF ATTORNEYS FOR BROTHERHOOD, INTEGRITY AND NATIONALISM, INC. (MABINI), petitioners, vs. HON. JUAN C. TUVERA. in his capacity as Executive Assistant to the President, HON. JOAQUIN VENUS, in his capacity as Deputy Executive Assistant to the President, MELQUIADES P. DE LA CRUZ, ETC., ET AL., respondents. SYLLABUS FERNAN, J., concurring: 1. CIVIL LAW; EFFECT AND APPLICATION OF LAWS; ARTICLE 2, CIVIL CODE; PUBLICATION OF LAWS MADE TO ENSURE CONSTITUTIONAL RIGHT TO DUE PROCESS AND TO INFORMATION. The categorical statement by this Court on the need for publication before any law be made effective seeks to prevent abuses on the part if the lawmakers and, at the time, ensure to the people their constitutional right to due process and to information on matter of public concern. RESOLUTION CRUZ, J p: Due process was invoked by the petitioners in demanding the disclosure or a number of presidential decrees which they claimed had not been published as required by law. The government argued that while publication was necessary as a rule, it was not so when it was "otherwise provided," as when the decrees themselves declared that they were to become effective immediately upon their approval. In the decision of this case on April 24, 1985, the Court affirmed the necessity for the publication of some of these decrees, declaring in the dispositive portion as follows: "WHEREFORE, the Court hereby orders respondents to publish to the Official Gazette all unpublished presidential issuances which are of general application, and unless so published, they shall have no binding force and effect." The petitioners are now before us again, this time to move for reconsideration/clarification of that decision. Specifically, they ask the following questions: 1. 2. 3. 4. 5. What is meant by "law of public nature" or "general applicability"? Must a distinction be made between laws of general applicability and laws which are not? What is meant by "publication"? Where is the publication to be made? When is the publication to be made?

Resolving their own doubts, the petitioners suggest that there should be no distinction between laws of general applicability and those which are not; that publication means complete publication; and that the publication must be made forthwith in the Official Gazette. In the Comment required of the then Solicitor General, he claimed first that the motion was a request for an advisory opinion and should therefore be dismissed, and, on the merits, that the clause "unless it is otherwise provided" in Article 2 of the Civil Code meant that the publication required therein was not always imperative; that publication, when necessary, did not have to be made in the Official Gazette; and that in any case the subject decision was concurred in only by three justices and consequently not binding. This elicited a Reply 4 refuting these arguments. Came next the February Revolution and the Court required the new Solicitor General to file a Rejoinder in view of the supervening events, under Rule 3, Section 18, of the Rules of Court. Responding, he submitted that issuances intended only for the interval administration of a government agency or for particular persons did not have to be published; that publication when necessary must be in full and in the Official Gazette;

and that, however, the decision under reconsideration was not binding because it was not supported by eight members of this Court. 5 The subject of contention is Article 2 of the Civil Code providing as follows: "ART. 2. Laws shall take effect after fifteen days following the completion of their publication in the Official Gazette, unless it is otherwise provided. This Code shall take effect one year after such publication." After a careful study of this provision and of the arguments of the parties, both on the original petition and on the instant motion, we have come to the conclusion, and so hold, that the clause "unless it is otherwise provided" refers to the date of effectivity and not to the requirement of publication itself, which cannot in any event be omitted. This clause does not mean that the legislature may make the law effective immediately upon approval, or on any other date, without its previous publication. Publication is indispensable in every case, but the legislature may in its discretion provide that the usual fifteen-day period shall be shortened or extended. An example, as pointed out by the present Chief Justice in his separate concurrence in the original decision, 6 is the Civil Code which did not become effective after fifteen days from its publication in the Official Gazette but "one year after such publication." The general rule did not apply because it was "otherwise provided." It is not correct to say that under the disputed clause publication may be dispensed with altogether. The reason is that such omission would offend due process insofar as it would deny the public knowledge of the laws that are supposed to govern it. Surely, if the legislature could validly provide that a law shall become effective immediately upon its approval notwithstanding the lack of publication (or after an unreasonably short period after publication), it is not unlikely that persons not aware of it would be prejudiced as a result; and they would be so not because of a failure to comply with it but simply because they did not know of its existence. Significantly, this is not true only of penal laws as is commonly supposed. One can think of many non-penal measures, like a law on prescription, which must also be communicated to the persons they may affect before they can begin to operate. LexLib We note at this point the conclusive presumption that every person knows the law, which of course presupposes that the law has been published if the presumption is to have any legal justification at all. It is no less important to remember that Section 6 of the Bill of Rights recognizes "the right of the people to information on matters of public concern," and this certainly applies to, among others, and indeed especially, the legislative enactments of the government. The term "laws" should refer to all laws and not only to those of general application, for strictly speaking all laws relate to the people in general albeit there are some that do not apply to them directly. An example is a law granting citizenship to a particular individual, like a relative of President Marcos who was decreed instant naturalization. It surely cannot be said that such a law does not affect the public although it unquestionably does not apply directly to all the people. The subject of such law is a matter of public interest which any member of the body politic may question in the political forums or, if he is a proper party, even in the courts of justice. In fact, a law without any bearing on the public would be invalid as an intrusion of privacy or as class legislation or as an ultra vires act of the legislature. To be valid, the law must invariably affect the public interest even if it might be directly applicable only to one individual, or some of the people only, and not to the public as a whole. We hold therefore that all statutes, including those of local application and private laws, shall be published as a condition for their effectivity, which shall begin fifteen days after publication unless a different effectivity date is fixed by the legislature. LibLex Covered by this rule are presidential decrees and executive orders promulgated by the President in the exercise of legislative powers whenever the same are validly delegated by the legislature or, at present, directly conferred by the Constitution. Administrative rules and regulations must also be published if their purpose is to enforce or implement existing law pursuant also to a valid delegation. Interpretative regulations and those merely internal in nature, that is, regulating only the personnel of the administrative agency and not the public, need not be published. Neither is publication required of the so-called letters of instructions issued by administrative superiors concerning the rules or guidelines to be followed by their subordinates in the performance of their duties. cdasia

Accordingly, even the charter of a city must be published notwithstanding that it applies to only a portion of the national territory and directly affects only the inhabitants of that place. All presidential decrees must be published, including even, say, those naming a public place after a favored individual or exempting him from certain prohibitions or requirements. The circulars issued by the Monetary Board must be published if they are meant not merely to interpret but to "fill in the details" of the Central Bank Act which that body is supposed to enforce. However, no publication is required of the instructions issued by, say, the Minister of Social Welfare on the case studies to be made in petitions for adoption or the rules laid down by the head of a government agency on the assignments or workload of his personnel or the wearing of office uniforms. Parenthetically, municipal ordinances are not covered by this rule but by the Local Government Code. We agree that the publication must be in full or it is no publication at all since its purpose is to inform the public of the contents of the laws. As correctly pointed out by the petitioners, the mere mention of the number of the presidential decree, the title of such decree, its whereabouts (e.g., "with Secretary Tuvera"), the supposed date of effectivity, and in a mere supplement of the Official Gazette cannot satisfy the publication requirement. This is not even substantial compliance. This was the manner, incidentally, in which the General Appropriations Act for FY 1975, a presidential decree undeniably of general applicability and interest, was "published" by the Marcos administration. 7 The evident purpose was to withhold rather than disclose information on this vital law. Coming now to the original decision, it is true that only four justices were categorically for publication in the Official Gazette 8 and that six others felt that publication could be made elsewhere as long as the people were sufficiently informed. 9 One reserved his vote 10 and another merely acknowledged the need for due publication without indicating where it should be made, 11 It is therefore necessary for the present membership of this Court to arrive at a clear consensus on this matter and to lay down a binding decision supported by the necessary vote. There is much to be said of the view that the publication need not be made in the Official Gazette, considering its erratic releases and limited readership. Undoubtedly, newspapers of general circulation could better perform the function of communicating the laws to the people as such periodicals are more easily available, have a wider readership, and come out regularly. The trouble, though, is that this kind of publication is not the one required or authorized by existing law. As far as we know, no amendment has been made of Article 2 of the Civil Code. The Solicitor General has not pointed to such a law, and we have no information that it exists. If it does, it obviously has not yet been published. At any rate, this Court is not called upon to rule upon the wisdom of a law or to repeal or modify it if we find it impractical. That is not our function. That function belongs to the legislature. Our task is merely to interpret and apply the law as conceived and approved by the political departments of the government in accordance with the prescribed procedure. Consequently, we have no choice but to pronounce that under Article 2 of the Civil Code, the publication of laws must be made in the Official Gazette, and not elsewhere, as a requirement for their effectivity after fifteen days from such publication or after a different period provided by the legislature. LLphil We also hold that the publication must be made forthwith, or at least as soon as possible, to give effect to the law pursuant to the said Article 2. There is that possibility, of course, although not suggested by the parties that a law could be rendered unenforceable by a mere refusal of the executive, for whatever reason, to cause its publication as required. This is a matter, however, that we do not need to examine at this time. Finally, the claim of the former Solicitor General that the instant motion is a request for an advisory opinion is untenable, to say the least, and deserves no further comment. The days of the secret laws and the unpublished decrees are over. This is once again an open society, with all the acts of the government subject to public scrutiny and available always to public cognizance. This has to be so if our country is to remain democratic, with sovereignty residing in the people and all government authority emanating from them. Although they have delegated the power of legislation, they retain the authority to review the work of their delegates and to ratify or reject it according to their lights, through their freedom of expression and their right of suffrage. This they cannot do if the acts of the legislature are concealed.

Laws must come out in the open in the clear light of the sun instead of skulking in the shadows with their dark, deep secrets. Mysterious pronouncements and rumored rules cannot be recognized as binding unless their existence and contents are confirmed by a valid publication intended to make full disclosure and give proper notice to the people. The furtive law is like a scabbarded saber that cannot feint, parry or cut unless the naked blade is drawn. WHEREFORE, it is hereby declared that all laws as above defined shall immediately upon their approval, or as soon thereafter as possible, be published in full in the Official Gazette, to become effective only after fifteen days from their publication, or on another date specified by the legislature, in accordance with Article 2 of the Civil Code. dctai SO ORDERED.

[G.R. No. 178902. April 21, 2010.] MANUEL O. FUENTES and LETICIA L. FUENTES, petitioners, vs. CONRADO G. ROCA, ANNABELLE R. JOSON, ROSE MARIE R. CRISTOBAL and PILAR MALCAMPO, respondents. DECISION ABAD, J p: This case is about a husband's sale of conjugal real property, employing a challenged affidavit of consent from an estranged wife. The buyers claim valid consent, loss of right to declare nullity of sale, and prescription. IHCDAS The Facts and the Case Sabina Tarroza owned a titled 358-square meter lot in Canelar, Zamboanga City. On October 11, 1982 she sold it to her son, Tarciano T. Roca (Tarciano) under a deed of absolute sale. 1 But Tarciano did not for the meantime have the registered title transferred to his name. Six years later in 1988, Tarciano offered to sell the lot to petitioners Manuel and Leticia Fuentes (the Fuentes spouses). They arranged to meet at the office of Atty. Romulo D. Plagata whom they asked to prepare the documents of sale. They later signed an agreement to sell that Atty. Plagata prepared 2 dated April 29, 1988, which agreement expressly stated that it was to take effect in six months. The agreement required the Fuentes spouses to pay Tarciano a down payment of P60,000.00 for the transfer of the lot's title to him. And, within six months, Tarciano was to clear the lot of structures and occupants and secure the consent of his estranged wife, Rosario Gabriel Roca (Rosario), to the sale. Upon Tarciano's compliance with these conditions, the Fuentes spouses were to take possession of the lot and pay him an additional P140,000.00 or P160,000.00, depending on whether or not he succeeded in demolishing the house standing on it. If Tarciano was unable to comply with these conditions, the Fuentes spouses would become owners of the lot without any further formality and payment. The parties left their signed agreement with Atty. Plagata who then worked on the other requirements of the sale. According to the lawyer, he went to see Rosario in one of his trips to Manila and had her sign an affidavit of consent. 3 As soon as Tarciano met the other conditions, Atty. Plagata notarized Rosario's affidavit in Zamboanga City. On January 11, 1989 Tarciano executed a deed of absolute sale 4 in favor of the Fuentes spouses. They then paid him the additional P140,000.00 mentioned in their agreement. A new title was issued in the name of the spouses 5 who immediately constructed a building on the lot. On January 28, 1990 Tarciano passed away, followed by his wife Rosario who died nine months afterwards. SacTCA Eight years later in 1997, the children of Tarciano and Rosario, namely, respondents Conrado G. Roca, Annabelle R. Joson, and Rose Marie R. Cristobal, together with Tarciano's sister, Pilar R. Malcampo, represented by her son, John Paul M. Trinidad (collectively, the Rocas), filed an action for annulment of sale and reconveyance of the land against the Fuentes spouses before the Regional Trial Court (RTC) of Zamboanga City in Civil Case 4707. The Rocas claimed that the sale to the spouses was void since Tarciano's wife, Rosario, did not give her consent to it. Her signature on the affidavit of consent had been forged. They thus prayed that the property be reconveyed to them upon reimbursement of the price that the Fuentes spouses paid Tarciano. 6 The spouses denied the Rocas' allegations. They presented Atty. Plagata who testified that he personally saw Rosario sign the affidavit at her residence in Paco, Manila, on September 15, 1988. He admitted, however, that he notarized the document in Zamboanga City four months later on January 11, 1989. 7 All the same, the Fuentes spouses pointed out that the claim of forgery was personal to Rosario and she alone could invoke it. Besides, the four-year prescriptive period for nullifying the sale on ground of fraud had already lapsed. Both the Rocas and the Fuentes spouses presented handwriting experts at the trial. Comparing Rosario's standard signature on the affidavit with those on various documents she signed, the Rocas' expert testified that the signatures were not written by the same person. Making the same comparison, the spouses' expert concluded that they were. 8

On February 1, 2005 the RTC rendered judgment, dismissing the case. It ruled that the action had already prescribed since the ground cited by the Rocas for annulling the sale, forgery or fraud, already prescribed under Article 1391 of the Civil Code four years after its discovery. In this case, the Rocas may be deemed to have notice of the fraud from the date the deed of sale was registered with the Registry of Deeds and the new title was issued. Here, the Rocas filed their action in 1997, almost nine years after the title was issued to the Fuentes spouses on January 18, 1989. 9 Moreover, the Rocas failed to present clear and convincing evidence of the fraud. Mere variance in the signatures of Rosario was not conclusive proof of forgery. 10 The RTC ruled that, although the Rocas presented a handwriting expert, the trial court could not be bound by his opinion since the opposing expert witness contradicted the same. Atty. Plagata's testimony remained technically unrebutted. 11 HSATIC Finally, the RTC noted that Atty. Plagata's defective notarization of the affidavit of consent did not invalidate the sale. The law does not require spousal consent to be on the deed of sale to be valid. Neither does the irregularity vitiate Rosario's consent. She personally signed the affidavit in the presence of Atty. Plagata. 12 On appeal, the Court of Appeals (CA) reversed the RTC decision. The CA found sufficient evidence of forgery and did not give credence to Atty. Plagata's testimony that he saw Rosario sign the document in Quezon City. Its jurat said differently. Also, upon comparing the questioned signature with the specimen signatures, the CA noted significant variance between them. That Tarciano and Rosario had been living separately for 30 years since 1958 also reinforced the conclusion that her signature had been forged. Since Tarciano and Rosario were married in 1950, the CA concluded that their property relations were governed by the Civil Code under which an action for annulment of sale on the ground of lack of spousal consent may be brought by the wife during the marriage within 10 years from the transaction. Consequently, the action that the Rocas, her heirs, brought in 1997 fell within 10 years of the January 11, 1989 sale. Considering, however, that the sale between the Fuentes spouses and Tarciano was merely voidable, the CA held that its annulment entitled the spouses to reimbursement of what they paid him plus legal interest computed from the filing of the complaint until actual payment. Since the Fuentes spouses were also builders in good faith, they were entitled under Article 448 of the Civil Code to payment of the value of the improvements they introduced on the lot. The CA did not award damages in favor of the Rocas and deleted the award of attorney's fees to the Fuentes spouses. 13 Unsatisfied with the CA decision, the Fuentes spouses came to this court by petition for review. 14 The Issues Presented The case presents the following issues: 1. Whether or not Rosario's signature on the document of consent to her husband Tarciano's sale of their conjugal land to the Fuentes spouses was forged; 2. 3. Whether or not the Rocas' action for the declaration of nullity of that sale to the spouses already prescribed; and Whether or not only Rosario, the wife whose consent was not had, could bring the action to annul that sale. HCTAEc

The Court's Rulings First. The key issue in this case is whether or not Rosario's signature on the document of consent had been forged. For, if the signature were genuine, the fact that she gave her consent to her husband's sale of the conjugal land would render the other issues merely academic. The CA found that Rosario's signature had been forged. The CA observed a marked difference between her signature on the affidavit of consent 15 and her specimen signatures. 16 The CA gave no weight to Atty. Plagata's testimony that he saw Rosario sign the document in Manila on September 15, 1988 since this clashed with his declaration in the jurat that Rosario signed the affidavit in Zamboanga City on January 11, 1989.

The Court agrees with the CA's observation that Rosario's signature strokes on the affidavit appears heavy, deliberate, and forced. Her specimen signatures, on the other hand, are consistently of a lighter stroke and more fluid. The way the letters "R" and "s" were written is also remarkably different. The variance is obvious even to the untrained eye. Significantly, Rosario's specimen signatures were made at about the time that she signed the supposed affidavit of consent. They were, therefore, reliable standards for comparison. The Fuentes spouses presented no evidence that Rosario suffered from any illness or disease that accounted for the variance in her signature when she signed the affidavit of consent. Notably, Rosario had been living separately from Tarciano for 30 years since 1958. And she resided so far away in Manila. It would have been quite tempting for Tarciano to just forge her signature and avoid the risk that she would not give her consent to the sale or demand a stiff price for it. What is more, Atty. Plagata admittedly falsified the jurat of the affidavit of consent. That jurat declared that Rosario swore to the document and signed it in Zamboanga City on January 11, 1989 when, as Atty. Plagata testified, she supposedly signed it about four months earlier at her residence in Paco, Manila on September 15, 1988. While a defective notarization will merely strip the document of its public character and reduce it to a private instrument, that falsified jurat, taken together with the marks of forgery in the signature, dooms such document as proof of Rosario's consent to the sale of the land. That the Fuentes spouses honestly relied on the notarized affidavit as proof of Rosario's consent does not matter. The sale is still void without an authentic consent. Second. Contrary to the ruling of the Court of Appeals, the law that applies to this case is the Family Code, not the Civil Code. Although Tarciano and Rosario got married in 1950, Tarciano sold the conjugal property to the Fuentes spouses on January 11, 1989, a few months after the Family Code took effect on August 3, 1988. TIDaCE When Tarciano married Rosario, the Civil Code put in place the system of conjugal partnership of gains on their property relations. While its Article 165 made Tarciano the sole administrator of the conjugal partnership, Article 166 17 prohibited him from selling commonly owned real property without his wife's consent. Still, if he sold the same without his wife's consent, the sale is not void but merely voidable. Article 173 gave Rosario the right to have the sale annulled during the marriage within ten years from the date of the sale. Failing in that, she or her heirs may demand, after dissolution of the marriage, only the value of the property that Tarciano fraudulently sold. Thus: Art. 173. The wife may, during the marriage, and within ten years from the transaction questioned, ask the courts for the annulment of any contract of the husband entered into without her consent, when such consent is required, or any act or contract of the husband which tends to defraud her or impair her interest in the conjugal partnership property. Should the wife fail to exercise this right, she or her heirs, after the dissolution of the marriage, may demand the value of property fraudulently alienated by the husband. But, as already stated, the Family Code took effect on August 3, 1988. Its Chapter 4 on Conjugal Partnership of Gains expressly superseded Title VI, Book I of the Civil Code on Property Relations Between Husband and Wife. 18 Further, the Family Code provisions were also made to apply to already existing conjugal partnerships without prejudice to vested rights. 19 Thus: Art. 105. . . . The provisions of this Chapter shall also apply to conjugal partnerships of gains already established between spouses before the effectivity of this Code, without prejudice to vested rights already acquired in accordance with the Civil Code or other laws, as provided in Article 256. (n) Consequently, when Tarciano sold the conjugal lot to the Fuentes spouses on January 11, 1989, the law that governed the disposal of that lot was already the Family Code. In contrast to Article 173 of the Civil Code, Article 124 of the Family Code does not provide a period within which the wife who gave no consent may assail her husband's sale of the real property. It simply provides that without the other spouse's written consent or a court order allowing the sale, the same would be void. Article 124 thus provides: Art. 124. . . . In the event that one spouse is incapacitated or otherwise unable to participate in the administration of the conjugal properties, the other spouse may assume sole powers of administration. These powers do not include the powers of disposition or encumbrance which must have the authority of the court or the written consent of the other spouse. In the absence of such authority or consent, the disposition or encumbrance shall be void. . . .

Under the provisions of the Civil Code governing contracts, a void or inexistent contract has no force and effect from the very beginning. And this rule applies to contracts that are declared void by positive provision of law, 20 as in the case of a sale of conjugal property without the other spouse's written consent. A void contract is equivalent to nothing and is absolutely wanting in civil effects. It cannot be validated either by ratification or prescription. 21 But, although a void contract has no legal effects even if no action is taken to set it aside, when any of its terms have been performed, an action to declare its inexistence is necessary to allow restitution of what has been given under it. 22 This action, according to Article 1410 of the Civil Code does not prescribe. Thus: Art. 1410. The action or defense for the declaration of the inexistence of a contract does not prescribe. HTCESI

Here, the Rocas filed an action against the Fuentes spouses in 1997 for annulment of sale and reconveyance of the real property that Tarciano sold without their mother's (his wife's) written consent. The passage of time did not erode the right to bring such an action. Besides, even assuming that it is the Civil Code that applies to the transaction as the CA held, Article 173 provides that the wife may bring an action for annulment of sale on the ground of lack of spousal consent during the marriage within 10 years from the transaction. Consequently, the action that the Rocas, her heirs, brought in 1997 fell within 10 years of the January 11, 1989 sale. It did not yet prescribe. The Fuentes spouses of course argue that the RTC nullified the sale to them based on fraud and that, therefore, the applicable prescriptive period should be that which applies to fraudulent transactions, namely, four years from its discovery. Since notice of the sale may be deemed given to the Rocas when it was registered with the Registry of Deeds in 1989, their right of action already prescribed in 1993. But, if there had been a victim of fraud in this case, it would be the Fuentes spouses in that they appeared to have agreed to buy the property upon an honest belief that Rosario's written consent to the sale was genuine. They had four years then from the time they learned that her signature had been forged within which to file an action to annul the sale and get back their money plus damages. They never exercised the right. If, on the other hand, Rosario had agreed to sign the document of consent upon a false representation that the property would go to their children, not to strangers, and it turned out that this was not the case, then she would have four years from the time she discovered the fraud within which to file an action to declare the sale void. But that is not the case here. Rosario was not a victim of fraud or misrepresentation. Her consent was simply not obtained at all. She lost nothing since the sale without her written consent was void. Ultimately, the Rocas ground for annulment is not forgery but the lack of written consent of their mother to the sale. The forgery is merely evidence of lack of consent. Third. The Fuentes spouses point out that it was to Rosario, whose consent was not obtained, that the law gave the right to bring an action to declare void her husband's sale of conjugal land. But here, Rosario died in 1990, the year after the sale. Does this mean that the right to have the sale declared void is forever lost? The answer is no. As stated above, that sale was void from the beginning. Consequently, the land remained the property of Tarciano and Rosario despite that sale. When the two died, they passed on the ownership of the property to their heirs, namely, the Rocas. 23 As lawful owners, the Rocas had the right, under Article 429 of the Civil Code, to exclude any person from its enjoyment and disposal. In fairness to the Fuentes spouses, however, they should be entitled, among other things, to recover from Tarciano's heirs, the Rocas, the P200,000.00 that they paid him, with legal interest until fully paid, chargeable against his estate. Further, the Fuentes spouses appear to have acted in good faith in entering the land and building improvements on it. Atty. Plagata, whom the parties mutually entrusted with closing and documenting the transaction, represented that he got Rosario's signature on the affidavit of consent. The Fuentes spouses had no reason to believe that the lawyer had violated his commission and his oath. They had no way of knowing that Rosario did not come to Zamboanga to give her consent. There is no evidence that they had a premonition that the requirement of consent presented some difficulty. Indeed, they willingly made a 30 percent down payment on the selling price months earlier on the assurance that it was forthcoming. DHAcET

Further, the notarized document appears to have comforted the Fuentes spouses that everything was already in order when Tarciano executed a deed of absolute sale in their favor on January 11, 1989. In fact, they paid the balance due him. And, acting on the documents submitted to it, the Register of Deeds of Zamboanga City issued a new title in the names of the Fuentes spouses. It was only after all these had passed that the spouses entered the property and built on it. He is deemed a possessor in good faith, said Article 526 of the Civil Code, who is not aware that there exists in his title or mode of acquisition any flaw which invalidates it. As possessor in good faith, the Fuentes spouses were under no obligation to pay for their stay on the property prior to its legal interruption by a final judgment against them. 24 What is more, they are entitled under Article 448 to indemnity for the improvements they introduced into the property with a right of retention until the reimbursement is made. Thus: Art. 448. The owner of the land on which anything has been built, sown or planted in good faith, shall have the right to appropriate as his own the works, sowing or planting, after payment of the indemnity provided for in Articles 546 and 548, or to oblige the one who built or planted to pay the price of the land, and the one who sowed, the proper rent. However, the builder or planter cannot be obliged to buy the land if its value is considerably more than that of the building or trees. In such case, he shall pay reasonable rent, if the owner of the land does not choose to appropriate the building or trees after proper indemnity. The parties shall agree upon the terms of the lease and in case of disagreement, the court shall fix the terms thereof. (361a) The Rocas shall of course have the option, pursuant to Article 546 of the Civil Code, 25 of indemnifying the Fuentes spouses for the costs of the improvements or paying the increase in value which the property may have acquired by reason of such improvements. WHEREFORE, the Court DENIES the petition and AFFIRMS WITH MODIFICATION the decision of the Court of Appeals in CAG.R. CV 00531 dated February 27, 2007 as follows: 1. The deed of sale dated January 11, 1989 that Tarciano T. Roca executed in favor of Manuel O. Fuentes, married to Leticia L. Fuentes, as well as the Transfer Certificate of Title T-90,981 that the Register of Deeds of Zamboanga City issued in the names of the latter spouses pursuant to that deed of sale are DECLARED void; 2. The Register of Deeds of Zamboanga City is DIRECTED to reinstate Transfer Certificate of Title 3533 in the name of Tarciano T. Roca, married to Rosario Gabriel; 3. Respondents Gonzalo G. Roca, Annabelle R. Joson, Rose Marie R. Cristobal, and Pilar Malcampo are ORDERED to pay petitioner spouses Manuel and Leticia Fuentes the P200,000.00 that the latter paid Tarciano T. Roca, with legal interest from January 11, 1989 until fully paid, chargeable against his estate; 4. Respondents Gonzalo G. Roca, Annabelle R. Joson, Rose Marie R. Cristobal, and Pilar Malcampo are further ORDERED, at their option, to indemnify petitioner spouses Manuel and Leticia Fuentes with their expenses for introducing useful improvements on the subject land or pay the increase in value which it may have acquired by reason of those improvements, with the spouses entitled to the right of retention of the land until the indemnity is made; and DEIHSa 5. The RTC of Zamboanga City from which this case originated is DIRECTED to receive evidence and determine the amount of indemnity to which petitioner spouses Manuel and Leticia Fuentes are entitled. SO ORDERED.

[G.R. No. 179579. February 1, 2012.] COMMISSIONER OF CUSTOMS and the DISTRICT COLLECTOR OF THE PORT OF SUBIC, petitioners, vs. HYPERMIX FEEDS CORPORATION, respondent. DECISION SERENO, J p: Before us is a Petition for Review under Rule 45, 1 assailing the Decision 2 and the Resolution 3 of the Court of Appeals (CA), which nullified the Customs Memorandum Order (CMO) No. 27-2003 4 on the tariff classification of wheat issued by petitioner Commissioner of Customs. The antecedent facts are as follows: On 7 November 2003, petitioner Commissioner of Customs issued CMO 27-2003. Under the Memorandum, for tariff purposes, wheat was classified according to the following: (1) importer or consignee; (2) country of origin; and (3) port of discharge. 5 The regulation provided an exclusive list of corporations, ports of discharge, commodity descriptions and countries of origin. Depending on these factors, wheat would be classified either as food grade or feed grade. The corresponding tariff for food grade wheat was 3%, for feed grade, 7%. CMO 27-2003 further provided for the proper procedure for protest or Valuation and Classification Review Committee (VCRC) cases. Under this procedure, the release of the articles that were the subject of protest required the importer to post a cash bond to cover the tariff differential. 6 A month after the issuance of CMO 27-2003, on 19 December 2003, respondent filed a Petition for Declaratory Relief 7 with the Regional Trial Court (RTC) of Las Pias City. It anticipated the implementation of the regulation on its imported and perishable Chinese milling wheat in transit from China. 8 Respondent contended that CMO 27-2003 was issued without following the mandate of the Revised Administrative Code on public participation, prior notice, and publication or registration with the University of the Philippines Law Center. Respondent also alleged that the regulation summarily adjudged it to be a feed grade supplier without the benefit of prior assessment and examination; thus, despite having imported food grade wheat, it would be subjected to the 7% tariff upon the arrival of the shipment, forcing them to pay 133% more than was proper. Furthermore, respondent claimed that the equal protection clause of the Constitution was violated when the regulation treated non-flour millers differently from flour millers for no reason at all. Lastly, respondent asserted that the retroactive application of the regulation was confiscatory in nature. On 19 January 2004, the RTC issued a Temporary Restraining Order (TRO) effective for twenty (20) days from notice. 9 Petitioners thereafter filed a Motion to Dismiss. 10 They alleged that: (1) the RTC did not have jurisdiction over the subject matter of the case, because respondent was asking for a judicial determination of the classification of wheat; (2) an action for declaratory relief was improper; (3) CMO 27-2003 was an internal administrative rule and not legislative in nature; and (4) the claims of respondent were speculative and premature, because the Bureau of Customs (BOC) had yet to examine respondent's products. They likewise opposed the application for a writ of preliminary injunction on the ground that they had not inflicted any injury through the issuance of the regulation; and that the action would be contrary to the rule that administrative issuances are assumed valid until declared otherwise. On 28 February 2005, the parties agreed that the matters raised in the application for preliminary injunction and the Motion to Dismiss would just be resolved together in the main case. Thus, on 10 March 2005, the RTC rendered its Decision 11 without having to resolve the application for preliminary injunction and the Motion to Dismiss. The trial court ruled in favor of respondent, to wit:

WHEREFORE, in view of the foregoing, the Petition is GRANTED and the subject Customs Memorandum Order 27-2003 is declared INVALID and OF NO FORCE AND EFFECT. Respondents Commissioner of Customs, the District Collector of Subic or anyone acting in their behalf are to immediately cease and desist from enforcing the said Customs Memorandum Order 272003. SO ORDERED. 12 The RTC held that it had jurisdiction over the subject matter, given that the issue raised by respondent concerned the quasilegislative powers of petitioners. It likewise stated that a petition for declaratory relief was the proper remedy, and that respondent was the proper party to file it. The court considered that respondent was a regular importer, and that the latter would be subjected to the application of the regulation in future transactions. With regard to the validity of the regulation, the trial court found that petitioners had not followed the basic requirements of hearing and publication in the issuance of CMO 27-2003. It likewise held that petitioners had "substituted the quasi-judicial determination of the commodity by a quasi-legislative predetermination." 13 The lower court pointed out that a classification based on importers and ports of discharge were violative of the due process rights of respondent. Dissatisfied with the Decision of the lower court, petitioners appealed to the CA, raising the same allegations in defense of CMO 27-2003. 14 The appellate court, however, dismissed the appeal. It held that, since the regulation affected substantial rights of petitioners and other importers, petitioners should have observed the requirements of notice, hearing and publication. Hence, this Petition. Petitioners raise the following issues for the consideration of this Court: I. THE COURT OF APPEALS DECIDED A QUESTION OF SUBSTANCE WHICH IS NOT IN ACCORD WITH THE LAW AND PREVAILING JURISPRUDENCE. II. CASE. THE COURT OF APPEALS GRAVELY ERRED IN DECLARING THAT THE TRIAL COURT HAS JURISDICTION OVER THE

The Petition has no merit. We shall first discuss the propriety of an action for declaratory relief. Rule 63, Section 1 provides: Who may file petition. Any person interested under a deed, will, contract or other written instrument, or whose rights are affected by a statute, executive order or regulation, ordinance, or any other governmental regulation may, before breach or violation thereof, bring an action in the appropriate Regional Trial Court to determine any question of construction or validity arising, and for a declaration of his rights or duties, thereunder. The requirements of an action for declaratory relief are as follows: (1) there must be a justiciable controversy; (2) the controversy must be between persons whose interests are adverse; (3) the party seeking declaratory relief must have a legal interest in the controversy; and (4) the issue involved must be ripe for judicial determination. 15 We find that the Petition filed by respondent before the lower court meets these requirements. First, the subject of the controversy is the constitutionality of CMO 27-2003 issued by petitioner Commissioner of Customs. In Smart Communications v. NTC, 16 we held: The determination of whether a specific rule or set of rules issued by an administrative agency contravenes the law or the constitution is within the jurisdiction of the regular courts. Indeed, the Constitution vests the power of judicial review or the power to declare a law, treaty, international or executive agreement, presidential decree, order, instruction, ordinance, or regulation in the courts, including the regional trial courts. This is within the scope of judicial power, which includes the authority of the courts to determine in an appropriate action the validity of the acts of the political departments. Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable

and enforceable, and to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government. (Emphasis supplied) Meanwhile, in Misamis Oriental Association of Coco Traders, Inc. v. Department of Finance Secretary, 17 we said: . . . [A] legislative rule is in the nature of subordinate legislation, designed to implement a primary legislation by providing the details thereof. . . . In addition such rule must be published. On the other hand, interpretative rules are designed to provide guidelines to the law which the administrative agency is in charge of enforcing. Accordingly, in considering a legislative rule a court is free to make three inquiries: (i) whether the rule is within the delegated authority of the administrative agency; (ii) whether it is reasonable; and (iii) whether it was issued pursuant to proper procedure. But the court is not free to substitute its judgment as to the desirability or wisdom of the rule for the legislative body, by its delegation of administrative judgment, has committed those questions to administrative judgments and not to judicial judgments. In the case of an interpretative rule, the inquiry is not into the validity but into the correctness or propriety of the rule. As a matter of power a court, when confronted with an interpretative rule, is free to (i) give the force of law to the rule; (ii) go to the opposite extreme and substitute its judgment; or (iii) give some intermediate degree of authoritative weight to the interpretative rule. (Emphasis supplied) Second, the controversy is between two parties that have adverse interests. Petitioners are summarily imposing a tariff rate that respondent is refusing to pay. Third, it is clear that respondent has a legal and substantive interest in the implementation of CMO 27-2003. Respondent has adequately shown that, as a regular importer of wheat, on 14 August 2003, it has actually made shipments of wheat from China to Subic. The shipment was set to arrive in December 2003. Upon its arrival, it would be subjected to the conditions of CMO 27-2003. The regulation calls for the imposition of different tariff rates, depending on the factors enumerated therein. Thus, respondent alleged that it would be made to pay the 7% tariff applied to feed grade wheat, instead of the 3% tariff on food grade wheat. In addition, respondent would have to go through the procedure under CMO 27-2003, which would undoubtedly toll its time and resources. The lower court correctly pointed out as follows: . . . As noted above, the fact that petitioner is precisely into the business of importing wheat, each and every importation will be subjected to constant disputes which will result into (sic) delays in the delivery, setting aside of funds as cash bond required in the CMO as well as the resulting expenses thereof. It is easy to see that business uncertainty will be a constant occurrence for petitioner. That the sums involved are not minimal is shown by the discussions during the hearings conducted as well as in the pleadings filed. It may be that the petitioner can later on get a refund but such has been foreclosed because the Collector of Customs and the Commissioner of Customs are bound by their own CMO. Petitioner cannot get its refund with the said agency. We believe and so find that Petitioner has presented such a stake in the outcome of this controversy as to vest it with standing to file this petition. 18 (Emphasis supplied) Finally, the issue raised by respondent is ripe for judicial determination, because litigation is inevitable 19 for the simple and uncontroverted reason that respondent is not included in the enumeration of flour millers classified as food grade wheat importers. Thus, as the trial court stated, it would have to file a protest case each time it imports food grade wheat and be subjected to the 7% tariff. It is therefore clear that a petition for declaratory relief is the right remedy given the circumstances of the case. Considering that the questioned regulation would affect the substantive rights of respondent as explained above, it therefore follows that petitioners should have applied the pertinent provisions of Book VII, Chapter 2 of the Revised Administrative Code, to wit: Section 3. Filing. (1) Every agency shall file with the University of the Philippines Law Center three (3) certified copies of every rule adopted by it. Rules in force on the date of effectivity of this Code which are not filed within three (3) months from that date shall not thereafter be the bases of any sanction against any party of persons. xxx xxx xxx

Section 9. Public Participation. (1) If not otherwise required by law, an agency shall, as far as practicable, publish or circulate notices of proposed rules and afford interested parties the opportunity to submit their views prior to the adoption of any rule. (2) In the fixing of rates, no rule or final order shall be valid unless the proposed rates shall have been published in a newspaper of general circulation at least two (2) weeks before the first hearing thereon. (3) In case of opposition, the rules on contested cases shall be observed.

When an administrative rule is merely interpretative in nature, its applicability needs nothing further than its bare issuance, for it gives no real consequence more than what the law itself has already prescribed. When, on the other hand, the administrative rule goes beyond merely providing for the means that can facilitate or render least cumbersome the implementation of the law but substantially increases the burden of those governed, it behooves the agency to accord at least to those directly affected a chance to be heard, and thereafter to be duly informed, before that new issuance is given the force and effect of law. 20 Likewise, in Taada v. Tuvera, 21 we held: The clear object of the above-quoted provision is to give the general public adequate notice of the various laws which are to regulate their actions and conduct as citizens. Without such notice and publication, there would be no basis for the application of the maxim "ignorantia legis non excusat." It would be the height of injustice to punish or otherwise burden a citizen for the transgression of a law of which he had no notice whatsoever, not even a constructive one. Perhaps at no time since the establishment of the Philippine Republic has the publication of laws taken so vital significance that at this time when the people have bestowed upon the President a power heretofore enjoyed solely by the legislature. While the people are kept abreast by the mass media of the debates and deliberations in the Batasan Pambansa and for the diligent ones, ready access to the legislative records no such publicity accompanies the law-making process of the President. Thus, without publication, the people have no means of knowing what presidential decrees have actually been promulgated, much less a definite way of informing themselves of the specific contents and texts of such decrees. (Emphasis supplied) Because petitioners failed to follow the requirements enumerated by the Revised Administrative Code, the assailed regulation must be struck down. Going now to the content of CMO 27-2003, we likewise hold that it is unconstitutional for being violative of the equal protection clause of the Constitution. The equal protection clause means that no person or class of persons shall be deprived of the same protection of laws enjoyed by other persons or other classes in the same place in like circumstances. Thus, the guarantee of the equal protection of laws is not violated if there is a reasonable classification. For a classification to be reasonable, it must be shown that (1) it rests on substantial distinctions; (2) it is germane to the purpose of the law; (3) it is not limited to existing conditions only; and (4) it applies equally to all members of the same class. 22 Unfortunately, CMO 27-2003 does not meet these requirements. We do not see how the quality of wheat is affected by who imports it, where it is discharged, or which country it came from. Thus, on the one hand, even if other millers excluded from CMO 27-2003 have imported food grade wheat, the product would still be declared as feed grade wheat, a classification subjecting them to 7% tariff. On the other hand, even if the importers listed under CMO 27-2003 have imported feed grade wheat, they would only be made to pay 3% tariff, thus depriving the state of the taxes due. The regulation, therefore, does not become disadvantageous to respondent only, but even to the state. It is also not clear how the regulation intends to "monitor more closely wheat importations and thus prevent their misclassification." A careful study of CMO 27-2003 shows that it not only fails to achieve this end, but results in the opposite. The application of the regulation forecloses the possibility that other corporations that are excluded from the list import food grade wheat; at the same time, it creates an assumption that those who meet the criteria do not import feed grade wheat. In

the first case, importers are unnecessarily burdened to prove the classification of their wheat imports; while in the second, the state carries that burden. Petitioner Commissioner of Customs also went beyond his powers when the regulation limited the customs officer's duties mandated by Section 1403 of the Tariff and Customs Law, as amended. The law provides: Section 1403. Duties of Customs Officer Tasked to Examine, Classify, and Appraise Imported Articles. The customs officer tasked to examine, classify, and appraise imported articles shall determine whether the packages designated for examination and their contents are in accordance with the declaration in the entry, invoice and other pertinent documents and shall make return in such a manner as to indicate whether the articles have been truly and correctly declared in the entry as regard their quantity, measurement, weight, and tariff classification and not imported contrary to law. He shall submit samples to the laboratory for analysis when feasible to do so and when such analysis is necessary for the proper classification, appraisal, and/or admission into the Philippines of imported articles. Likewise, the customs officer shall determine the unit of quantity in which they are usually bought and sold, and appraise the imported articles in accordance with Section 201 of this Code. Failure on the part of the customs officer to comply with his duties shall subject him to the penalties prescribed under Section 3604 of this Code. The provision mandates that the customs officer must first assess and determine the classification of the imported article before tariff may be imposed. Unfortunately, CMO 23-2007 has already classified the article even before the customs officer had the chance to examine it. In effect, petitioner Commissioner of Customs diminished the powers granted by the Tariff and Customs Code with regard to wheat importation when it no longer required the customs officer's prior examination and assessment of the proper classification of the wheat. It is well-settled that rules and regulations, which are the product of a delegated power to create new and additional legal provisions that have the effect of law, should be within the scope of the statutory authority granted by the legislature to the administrative agency. It is required that the regulation be germane to the objects and purposes of the law; and that it be not in contradiction to, but in conformity with, the standards prescribed by law. 23 In summary, petitioners violated respondent's right to due process in the issuance of CMO 27-2003 when they failed to observe the requirements under the Revised Administrative Code. Petitioners likewise violated respondent's right to equal protection of laws when they provided for an unreasonable classification in the application of the regulation. Finally, petitioner Commissioner of Customs went beyond his powers of delegated authority when the regulation limited the powers of the customs officer to examine and assess imported articles. WHEREFORE, in view of the foregoing, the Petition is DENIED. SO ORDERED.

[G.R. No. 46623. December 7, 1939.] MARCIAL KASILAG, petitioner, vs. RAFAELA RODRIGUEZ, URBANO ROQUE, SEVERO MAPILISAN and IGNACIO DEL ROSARIO, respondents. Luis M. Kasilag; for petitioner. Fortunato de Leon; for respondents. SYLLABUS 1. CONTRACTS, INTERPRETATION; MORTGAGE OF IMPROVEMENTS UPON LAND ACQUIRED AS HOMESTEAD. The cardinal rule in the interpretation of contracts is to the effect that the intention of the contracting parties should always prevail because their will has the force of law between them. Article 1281 of the Civil Code consecrates this rule and provides, further, that if the terms of a contract are clear and leave no doubt as to the intention of the contracting parties, the literal sense of its stipulations shall be followed; and if the words appear to be contrary to the evident intention of the contracting parties, the intention shall prevail. The contract set out in Exhibit 1' should be interpreted in accordance with these rules. As the terms thereof are clear and leave no room for doubt, it should be interpreted according to the literal meaning of its clauses. The words used by the contracting parties in Exhibit 1 clearly show that they intended to enter into the principal contract of loan in the amount of P1,000, with interest at 12 per cent per annum, and into the accessory contract of mortgage of the improvements on the land acquired as homestead, the parties having, moreover, agreed upon the pacts and conditions stated in the deed. In other words, the parties entered into a contract of mortgage of the improvements on the land acquired as homestead, to secure the payment of the indebtedness for P1,000 and the stipulated interest thereon. 2. ID.; ID.; ID.; ANTICHRESIS. Another fundamental rule in the interpretation of contracts, not less important than those indicated is to the effect that the terms, clauses and conditions contrary to law, morals and public order should be separated from the valid and legal contract when such separation can be made because they are independent of the valid contract which expresses the will of the contracting parties. Addressing ourselves now to the contract entered into by the parties, set out in Exhibit 1, we stated that the principal contract is that of loan and the accessory that of mortgage of the improvements upon the land acquired as a homestead. There is no question that the first of these contracts is valid as it is not against the law. The second, or the mortgage of the improvements, is expressly authorized by section 116 of Act No. 2874, as amended by section 23 of Act No. 3517. It will be recalled that by clause VIII of Exhibit 1 the parties agreed that should E. A. fail to redeem the mortgage within the stipulated period of four and a half years, by paying the loan together with interest, she would execute in favor of the petitioner an absolute deed of sale of the land for P1,000, including the interest stipulated and owing. This stipulation was verbally modified by the same parties after the expiration of one year, in the sense that the petitioner would take possession of the land and would benefit by the fruits thereof on condition that he would condone the payment of interest upon the loan and he would attend to the payment of the land tax. These pacts made by the parties independently, were calculated to alter the mortgage contract clearly entered into, converting the latter into a contract of antichresis (article 1881 of the Civil Code). The contract of antichresis, being a real incumbrance burdening the land, is illegal and void because it is condemned by section 116 of Act No. 2874, as amended, but the clauses regarding the contract of antichresis being independent and separable from the contract of mortgage, can be eliminated, thereby leaving the latter in being because it is legal and valid. 3. ID.; ID.; ID.; ID.; POSSESSION IN GOOD FAITH. It is a fact that the petitioner is not conversant with the laws because he is not a lawyer. In accepting the mortgage of the improvements he proceeded on the well-grounded belief that he was not violating the prohibition regarding the alienation of the land. In taking possession thereof and in consenting to receive its fruits, he did not know, as clearly as a jurist does, that the possession and enjoyment of the fruits are attributes of the contract of antichresis and that the latter, as a lien, was prohibited by section 116. These considerations again bring us to the conclusion that, as to the petitioner, his ignorance of the provisions of section 116 is excusable and may, therefore, be the basis of his good faith. We do not give much importance to the change of the tax declaration, which consisted in making the petitioner appear as the owner of the land, because such an act may only be considered as a sequel to the change of possession and enjoyment of the fruits by the petitioner, about which we have stated that the petitioner's ignorance of the law is possible and excusable. We, therefore, hold that the petitioner acted in good faith in taking possession of the land and enjoying its fruits.

4. ID.; ID.; ID.; ID.; ID. The petitioner being a possessor in good faith within the meaning of article 433 of the Civil Code and having introduced the improvements upon the land as such, the provisions of article 361 of the same Code are applicable; wherefore, the respondents are entitled to have the improvements and plants upon indemnifying the petitioner the value thereof which we fix at P3,000, as appraised by the trial court; or the respondents may elect to compel the petitioner to have the land by paying its market value to be fixed by the court of origin. DECISION IMPERIAL, J p: This is an appeal taken by the defendant-petitioner from the decision of the Court of Appeals which modified that rendered by the Court of First Instance of Bataan in civil case No. 1504 of said court and held: that the contract, Exhibit "1" is entirely null and void and without effect; that the plaintiffs-respondents, then appellants, are the owners of the disputed land, with its improvements, in common ownership with their brother Gavino Rodriguez, hence, they are entitled to the possession thereof; that the defendant-petitioner should yield possession of the land in their favor, with all the improvements thereon and free from any lien; that the plaintiffs-respondents jointly and severally pay to the defendant-petitioner the sum of P1,000 with interest at 6 per cent per annum from the date of the decision; and absolved the plaintiffs-respondents from the crosscomplaint relative to the value of the improvements claimed by the defendant-petitioner. The appealed decision also ordered the registrar of deeds of Bataan to cancel certificate of title No. 325, in the name of the deceased Emiliana Ambrosio and to issue in lieu thereof another certificate of title in favor of the plaintiffs-respondents and their brother Gavino Rodriguez, as undivided owners in equal parts, free of all liens and incumbrances except those expressly provided by law, without special pronouncement as to the costs. The respondents, children and heirs of the deceased Emiliana Ambrosio, commenced the aforesaid civil case to the end that they recover from the petitioner the possession of the land and its improvements granted by way of homestead to Emiliana Ambrosio under patent No. 16074 issued on January 11, 1931, with certificate of title No. 325 issued by the registrar of deeds of Bataan on June 27, 1931 in her favor, under section 122 of Act. No. 496, which land was surveyed and identified in the cadastre of the municipality of Limay, Province of Bataan, as lot No. 285; that the petitioner pay to them the sum of P650 being the approximate value of the fruits which he received from the land; that the petitioner sign all the necessary documents to transfer the land and its possession to the respondents; that the petitioner be restrained, during the pendency of the case, from conveying or encumbering the land and its improvements; that the registrar of deeds of Bataan cancel certificate of title No. 325 and issue in lieu thereof another in favor of the respondents, and that the petitioner pay the costs of suit. The petitioner denied in his answer all the material allegations of the complaint and by way of special defense alleged that he was in possession of the land and that he was receiving the fruits thereof by virtue of a mortgage contract, entered into between him and the deceased Emiliana Ambrosio on May 16, 1932, which was duly ratified by a notary public; and in counterclaim asked that the respondents pay him the sum of P1,000 with 12 per cent interest per annum which the deceased owed him and that, should the respondents be declared to have a better right to the possession of the land, that they be sentenced to pay him the sum of P5,000 as value of all the improvements which he introduced upon the land. On May 16, 1932 Emiliana Ambrosio, in life, and the petitioner executed the following public deed: "This agreement, made and entered into this 16th day of May, 1932, by and between Emiliana Ambrosio, Filipino, of legal age, widow and resident of Limay, Bataan, P. I., hereinafter called the party of the first part, and Marcial Kasilag, Filipino, of legal age, married to Asuncion Roces, and resident at 312 Perdigon Street, Manila, P. I., hereinafter called party of the second part. "WITNESSETH: That the parties hereto hereby covenant and agree to and with each other as follows: "ARTICLE I. That the party of the first part is the absolute registered owner of a parcel of land in the barrio of Alagan, municipality of Limay, Province of Bataan, her title thereto being evidenced by homestead certificate of title No. 325 issued by the bureau of Lands on June 11, 1931, said land being lot No. 285 of the Limay Cadastre, General Land Registration Office Cadastral Record No. 1054, bounded and described as follows: "Beginning at point marked 1 on plan E-57394, N. 84 32' W. 614.82 m. from B. B. M. No. 3, thence N. 66 35' E. 307.15 m. to point "2"; S. 5 07' W. to point "5"; 6 10' E. 104.26 m. to point "4"; S. 82 17' W. to point "5"; S. 28 63' W. 72.26 m. to point "6"; N. 71 09' W. to point "7"; N. 1 42' E. 173.72 m. to point 1, point of beginning,

"Containing an area of 6.7540 hectares. "Points 1, 2, 6 and 7, B. L.; points 3, 4 and 5, stakes; points 4, 5 and 6 on bank of Alagan River. "Bounded on the North, by property claimed by Maria Ambrocio; on the East, by Road; on the South, by Alagan River and property claimed by Maxima de la Cruz; and on the West, by property claimed by Jose del Rosario. "Bearing true. Declination 0 51' E. "Surveyed under authority of sections 12-22, Act No. 2874 and in accordance with existing regulations of the Bureau of Lands, by Mamerto Jacinto, public land surveyor, on July 8, 1927 and approved on February 25, 1931. "ARTICLE II. That the improvements on the above described land consist of the following:

"Four (4) mango trees, fruit bearing: one hundred ten (110) hills of bamboo trees; one (1) tamarind and six (6) bonga trees. "ARTICLE III. That the assessed value of the land is P940 and the assessed value of the improvements is P860, as evidenced by tax declaration No. 3531 of the municipality of Limay, Bataan. "ARTICLE IV. That for and in consideration of the sum of one thousand pesos (P1,000) Philippine currency, paid by the party of second part to the party of the first part, receipt whereof is hereby acknowledged, the party of the first part hereby encumbers and hypothecates, by way of mortgage, only the improvements described in Articles II and III hereof, of which improvements the party of the first part is the absolute owner. "ARTICLE V. That the condition of said mortgage is such that if the party of the first part shall well and truly pay, or cause to be paid to the party of the second part, his heirs, assigns, or executors, on or before the 16th day of November, 1936, or four and one-half (41) years after date of the execution of this instrument, the aforesaid sum of one thousand pesos (P1,000) with interest at 12 Per cent per annum, then said mortgage shall be and become null and void; otherwise the same shall be and shall remain in full force and effect, and subject to foreclosure in the manner and form provided by law for the amount due thereunder, with costs and also attorney's fees in the event of such foreclosure. "ARTICLE VI. That the party of the first part shall pay all taxes and assessments which are or may become due on the above described land and improvements during the term of this agreement "ARTICLE VII. That within thirty (30) days after date of execution of this agreement, the party of the first part shall file a motion before the Court of First Instance at Balanga, Bataan, P. I., requesting cancellation of Homestead Certificate of Title No. 325 referred to in Article I hereof and the issuance, in lieu thereof, of a certificate of title under the provisions of Land Registration Act No. 496, as amended by Act 3901. "ARTICLE VIII. It is further agreed that if upon the expiration of the period of time (4) years stipulated in this mortgage, the mortgagor should fail to redeem this mortgage, she would execute a deed of absolute sale of the property herein described for the same amount as this mortgage, including all unpaid interests at the rate of 12 per cent per annum, in favor of the mortgagee. "ARTICLE IX. That in the event the contemplated motion under Article VII hereof is not approved by the Court, the foregoing contract of sale shall automatically become null and void, and the mortgage stipulated under Article IV and V shall remain in full force and effect. "In testimony whereof, the parties hereto have hereunto set their hands the day and year first hereinbefore written. ( Sgd. ) "MARCIAL KASILAG ( Sgd. ) EMILIANA AMBROSIO "Signed in the presence of: ( Sgd. ) "ILLEGIBLE ( Sgd. ) GAVINO RODRIGUEZ

PHILIPPINE ISLANDS BALANGA, BATAAN

} } ss.

"Before me this day personally appeared Emiliana Ambrosio without cedula by reason of her sex, to me known and known to me to be the person who signed the foregoing instrument, and acknowledged to me that she executed the same as her free and voluntary act and deed. "I hereby certify that this instrument consists of three (3) pages including this page of the acknowledgment and that each page thereof is signed by the parties to the instrument and the witnesses in their presence and in the presence of each other, and that the land treated in this instrument consists of only one parcel. "In witness whereof I have hereunto set my hand and affixed my notarial seal, this 16th day of May, 1932.

(Sgd.) "NICOLAS NAVARRO Notary Public

My commission expires December 31, 1933

"DOC. NO. 178 Page 36 of my register Book NO. IV"

One year after the execution of the aforequoted deed, that is, in 1933, it came to pass that Emiliana Ambrosio was unable to pay the stipulated interest as well as the tax on the land and its improvements. For this reason, she and the petitioner entered into another verbal contract whereby she conveyed to the latter the possession of the land on condition that the latter would not collect the interest on the loan, would attend to the payment of the land tax, would benefit by the fruits of the land, and would introduce improvements thereon. By virtue of this verbal contract, the petitioner entered upon the possession of the land, gathered the products thereof, did not collect the interest on the loan, introduced improvements upon the land valued at P5,000, according to him and on May 22, 1934 the tax declaration was transferred in his name and on March 6, 1936 the assessed value of the land was in- creased from P1,020 to P2,180. After an analysis of the conditions of Exhibit "1" the Court of Appeals came to the conclusion and so held that the contract entered into by and between the parties, set out in the said public deed, was one of absolute purchase and sale of the land and its improvements. And upon this ruling it held null and void and without legal effect the entire Exhibit 1 as well as the subsequent verbal contract entered into between the parties, ordering, however, the respondents to pay to the petitioner, jointly and severally, the loan of P1,000, with legal interest at 6 per cent per annum from the date of the decision. In this first assignment of error the petitioner contends that the Court of appeals violated the law in holding that Exhibit 1 is an absolute deed of sale of the land and its improvements and that it is void and without any legal effect. The cardinal rule in the interpretation of contracts is to the effect that the intention of the contracting parties should always prevail because their will has the force of law between them. Article 1281 of the Civil Code consecrates this rule and provides, that if the terms of a contract are clear and leave no doubt as to the intention of the contracting parties, the literal sense of its

stipulations shall be followed; and if the words appear to be contrary to the evident intention of the contracting parties, the intention shall prevail. The contract set out in Exhibit I should be interpreted in accordance with these rules. As the terms thereof are clear and leave no room for doubt, it should be interpreted according to the literal meaning of its clauses. The words used by the contracting parties in Exhibit 1 clearly show that they intended to enter into the principal contract of loan in the amount of P1,000, with interest at 12 per cent per annum, and into the accessory contract of mortgage of the improvements on the land acquired as homesteads the parties having, moreover, agreed upon the pacts and conditions stated in the deed. In other words, the parties entered into a contract of mortgage of the improvements on the land acquired as homestead, to secure the payment of the indebtedness for P1,000 and the stipulated interest thereon. In clause V the parties stipulated that Emiliana Ambrosio was to pay, within four and a half years, or until November 16, 1936, the debt with interest thereon, in which event the mortgage would not have any effect; in clause VI the parties agreed that the tax on the land and its improvements, during the existence of the mortgage, should be paid by the owner of the land; in clause VII it was covenanted that within thirty days from the date of the contract, the owner of the land would file a motion in the Court of First Instance of Bataan asking that certificate of title No. 325 be cancelled and that in lieu thereof another be issued under the provisions of the Land Registration Act, No. 496, as amended by Act No. 3901; in clause VIII the parties agreed that should Emiliana Ambrosio fail to redeem the mortgage within the stipulated period of four years and a half, she would execute an absolute deed of sale of the land in favor of the mortgagee, the petitioner, for the same amount of the loan of P1,000 including unpaid interest; and in clause IX it was stipulated that in case the motion to be presented under clause VII should be disapproved by the Court of First Instance of Bataan, the contract of sale would automatically become void and the mortgage would subsist in all its force. Another fundamental rule in the interpretation of contracts, not less important than those indicated, is to the effect that the terms, clauses and conditions contrary to law, morals and public order should be separated from the valid and legal contract when such separation can be made because they are independent of the valid contract which expresses the will of the contracting parties. Manresa, commenting on article 1255 of the Civil Code and stating the rule of separation just mentioned, gives his views as follows: "On the supposition that the various pacts, clauses or conditions are valid, no difficulty is presented; but should they be void, the question is as to what extent they may produce the nullity of the principal obligation. Under the view that such features of the obligation are added to it and do not go to its essence, a criterion based upon the stability of juridical relations should tend to consider the nullity as confined to the clause or pact suffering therefrom, except in case where the latter, by an established connection or by manifest intention of the parties, is inseparable from the principal obligation, and is a condition, juridically speaking, of that the nullity of which it would also occasion." ( Manresa, Commentaries on the Civil Code, Volume 8, p. 575.) The same view prevails in the Anglo-American law, as condensed in the following words: "Where an agreement founded on a legal consideration contains several promises, or a promise to do several things, and a part only of the things to be done are illegal, the promises which can be separated, or the promise, so far as it can be separated, from the illegality, may be valid. The rule is that a lawful promise made for a lawful consideration is not invalid merely because an unlawful promise was made at the same time and for the same consideration, and this rule applies, although the invalidity is due to violation of a statutory provision, unless the statute expressly or by necessary implication declares the entire contract void. . . " (13 C. J., par. 470, p. 512; New York Cent. etc. R. Co. v. Gray, 239 U. S., 583; 60 Law. ed., 451; U. S. v. Moran, 97 U. S., 413, 24 Law. ed., 1017: U. S. v. Ilodson, 10 Wall, 395; 19 Law ed. 937; Gelpcke v. Dubuque, 1 Wall. 175, 17 Law. ed., 520; U. S. v. Bradly, 10 Pet. 343, 9 Law. ed., 448; Borland v. Prindle, 144 Fed. 713; Western Union Tel. Co. v. Kansas Pac. R. Co., 4 Fed., 284; Northern Pac. R. Co. v. U. S., 15 Ct. Cl., 428.) Addressing ourselves now to the contract entered into by the parties, set out in Exhibit 1, we stated that the principal contract is that of loan and the accessory that of mortgage of the improvements upon the land acquired as a homestead. There is no question that the first of these contracts is valid as it is not against the law. The second, or the mortgage of the improvements, is expressly authorized by section 116 of Act No. 2874, as amended by section 23 of Act No. 3517, reading: "SEC. 116. Except in favor of the Government or any of its branches, units, or institutions, or legally constituted banking corporations, lands acquired under the free patent or homestead provisions shall not be subject to encumbrance or alienation from the date of the approval of the application and for a term of five years from and after the date of issuance of the patent or grant, nor shall they become liable to the satisfaction of any debt contracted prior to the expiration of said period; but the improvements or crops on the land may be mortgaged or pledged to qualified persons, associations, or corporations."

It will be recalled that by clause VIII of Exhibit 1 the parties agreed that should Emiliana Ambrosio fail to redeem the mortgage within the stipulated period of four and a half years, by paying the loan together with interest, she would execute in favor of the petitioner an absolute deed of sale of the land for P1,000, including the interest stipulated and owing. This stipulation was verbally modified by the same parties after the expiration of one year, in the sense that the petitioner would take possession of the land and would benefit by the fruits thereof on condition that he would condone the payment of interest upon the loan and he would attend to the payment of the land tax. These pacts made by the parties independently were calculated to alter the mortgage contract clearly entered into, converting the latter into a contract of antichresis. (Article 1881 of the Civil Code.) The contract of antichresis, being a real encumbrance burdening the land, is illegal and void because it is condemned by section 116 of Act No. 2874, as amended, but the clauses regarding the contract of antichresis, being independent of and separable from the contract of mortgage, can be eliminated, thereby leaving the latter in being because it is legal and valid. The foregoing considerations bring us to the conclusion that the first assignment of error is well-founded and that error was committed in holding that the contract entered into between the parties was one of absolute sale of the land and its improvements and that Exhibit 1 is null and void. In the second assignment of error the petitioner contends that the Court of Appeals erred in holding that he is guilty of violating the Public Land Act because he entered into the contract, Exhibit 1. The assigned error is vague and not specific. If it attempts to show that the said document is valid in its entirety, it is not well-founded because we have already said that certain pacts thereof are illegal because they are prohibited by section 116 of Act No. 2874, as amended. In the third assignment of error the petitioner insists that his testimony, as to the verbal agreement entered into between him and Emiliana Ambrosio, should have been accepted by the Court of Appeals; and in the fourth and last assignment of error the same petitioner contends that the Court of Appeals erred in holding that he acted in bad faith in taking possession of the land and in taking advantage of the fruits thereof, resulting in the denial of his right to be reimbursed for the value of the improvements introduced by him. We have seen that subsequent to the execution of the contract, Exhibit 1, the parties entered into another verbal contract whereby the petitioner was authorized to take possession of the land, to receive the fruits thereof and to introduce improvements thereon, provided that he would renounce the payment of stipulated interest and he would assume payment of the land tax. The possession by the petitioner and his receipt of the fruits of the land, considered as integral elements of the contract of antichresis, are illegal and void agreements because, as already stated, the contract of antichresis is a lien and as such is expressly prohibited by section 116 of Act No. 2874, as amended. The Court of Appeals held that the petitioner acted in bad faith in taking possession of the land because he knew that the contract he made with Emiliana Ambrosio was an absolute deed of sale and, further, that the latter could not sell the land because it is prohibited by section 116. The Civil Code does not expressly define what is meant by bad faith, but section 433 provides that "Every person who is unaware of any flaw in his title, or in the manner of its acquisition, by which it is invalidated, shall be deemed a possessor in good faith"; and provides, further, that "Possessors aware of such flaw are deemed possessors in bad faith." Article 1950 of the same Code, covered by Chapter II relative to prescription of ownership and other real rights, provides, in turn, that "Good faith on the part of the possessor consists in his belief that the person from whom he received the thing was the owner of the same, and could transmit the title thereto." We do not have before us a case of prescription of ownership, hence, the last article is not squarely in point. In resume, it may be stated that a person is deemed a possessor in bad faith when he knows that there is a flaw in his title or in the manner of its acquisition, by which it is invalidated. Borrowing the language of Article 433, the question to be answered is whether the petitioner should be deemed a possessor in good faith because he was unaware of any flaw in his title or in the manner of its acquisition by which it is invalidated. It will be noted that ignorance of the flaw is the keynote of the rule. From the facts found established by the Court of Appeals we can neither deduce nor presume that the petitioner was aware of a flaw in his title or in the manner of its acquisition, aside from the prohibition contained in section 116. This being the case, the question is whether good faith may be premised upon ignorance of the laws. Manresa, commenting on article 434 in connection with the preceding article, sustains the affirmative. He says: "We do not believe that in real life there are not many cases of good faith founded upon an error of law. When the acquisition appears in a public document, the capacity of the parties has already been passed upon by competent authority, and even established by appeals taken from final judgments and administrative remedies against the qualification of registrars, and the possibility of error is remote under such circumstances; but, unfortunately, private documents and even verbal agreements

far exceed public documents in number, and while no one should be ignorant of the law, the truth is that even we who are called upon to know and apply it fall into error not infrequently. However, a clear, manifest, and truly unexcusable ignorance is one thing, to which undoubtedly refers article 2, and another and different thing is possible and excusable error arising from complex legal principles and from the interpretation of conflicting doctrines. "But even ignorance of the law may be based upon an error of fact, or better still, ignorance of a fact is possible as to the capacity to transmit and as to the intervention of certain persons, compliance with certain formalities and appreciation of certain acts, and an error of law is possible in the interpretation of doubtful doctrines." (Manresa, Commentaries on the Spanish Civil Code. Volume IV, pp. 100, 101 and 102.) According to this author, gross and inexeusable ignorance of the law may not be the basis of good faith, but possible, excusable ignorance may be such basis. It is a fact that the petitioner is not conversant with the laws because he is not a lawyer. In accepting the mortgage of the improvements he proceeded on the well-grounded belief that he was not violating the prohibition regarding the alienation of the land. In taking possession thereof and in consenting to receive its fruits, he did not know, as clearly as a jurist does, that the possession and enjoyment of the fruits are attributes of the contract of antichresis and that the latter, as a lien, was prohibited by section 116. These considerations again bring us to the conclusion that, as to the petitioner, his ignorance of the provisions of section 116 is excusable and may, therefore, be the basis of his good faith. We do not give much importance to the change of the tax declaration, which consisted in making the petitioner appear as the owner of the land, because such an act may only be considered as a sequel to the change of possession and enjoyment of the fruits by the petitioner, to about which we have stated that the petitioner's ignorance of the law is possible and excusable. We, therefore, hold that the petitioner acted in good faith in taking possession of the land and enjoying its fruits. The petitioner being a possessor in good faith within the meaning of article 433 of the Civil Code and having introduced the improvements upon the land as such, the provisions of article 361 of the same Code are applicable; wherefore, the respondents are entitled to have the improvements and plants upon indemnifying the petitioner the value thereof which we fix at P3,000, as appraised by the trial court; or the respondents may elect to compel the petitioner to have the land by paying its market value to be fixed by the court of origin. The respondents also prayed in their complaint that the petitioner be compelled to pay them the sum of P650, being the approximate value of the fruits obtained by the petitioner from the land. The Court of Appeals affirmed the judgment of the trial court denying the claim or indemnity for damages, being of the same opinion as the trial court that the respondents have not established such damages. Under the verbal contract between the petitioner and the deceased Emiliana Ambrosio, during the latter's lifetime, the former would take possession of the land and would receive the fruits of the mortgaged improvements on condition that he would no longer collect the stipulated interest and that he would attend to the payment of the land tax. This agreement, at bottom, is tantamount to the stipulation that the petitioner should apply the value of the fruits of the land to the payment of stipulated interest on the loan of P1,000 which is, in turn, another of the elements characterizing the contract of antichresis under article 1881 of the Civil Code. It was not possible for the parties to stipulate further that the value of the fruits be also applied to the payment of the capital, because the truth was that nothing remained after paying the interest at 12% per annum. This interest, at the rate fixed, amounted to P120 per annum, whereas the market value of the fruits obtainable from the land hardly reached said amount in view of the fact that the assessed value of said improvements was, according to the decision, P860. To this should be added the fact that, under the verbal agreement, from the value of the fruits had to be taken a certain amount to pay the annual land tax. We mention these data here to show that the petitioner is also not bound to render an accounting of the value of the fruits of the mortgaged improvements for the reason stated that said value hardly covers the interest earned by the secured indebtedness. For all the foregoing considerations, the appealed decision is reversed, and we hereby adjudge: (1) that the contract of mortgage of the improvements, set out in Exhibit 1, is valid and binding (2) that the contract of antichresis agreed upon verbally by the parties is a real incumbrance which burdens the land and, as such, is null and without effect; (3) that the petitioner is a possessor in good faith; (4) that the respondents may elect to have the improvements introduced by the petitioner by paying the latter the value thereof, P3,000, or to compel the petitioner to buy and have the land where the improvements or plants are found, by paying them its market value to be fixed by the court of origin, upon hearing the parties; (5) that the respondents have a right to the possession of the land and to enjoy the mortgaged improvements; and (6) that the respondents may redeem the mortgage of the improvements by paying to the petitioner within three months the amount of P1,000, without interest, as that stipulated is set off by the value of the fruits of the mortgaged improvements which the petitioner received; and in default thereof the petitioner may ask for the public sale of said improvements for the purpose of

applying the proceeds thereof to the payment of his said credit. Without special pronouncement as to the costs in all instances. So ordered. Diaz, J., concur. Separate Opinions VILLA-REAL, J., concurring and dissenting: According to the contract entered into on May 16, 1932, between Emiliana Ambrosio, in life, and the petitioner Marcial Kasilag, the first, in consideration of the sum of P1,000 given to her by the second, constituted a mortgage on the improvements only of the land which she acquired by way of homestead. The improvements which she mortgaged consisted of four fruit-bearing mango trees, one hundred ten hills of bamboo trees, 1 tamarind tree and 6 betelnut trees, the assessed value of which was P660. The conditions of the loan were that if the mortgagor should pay the mortgagee on November 16, 1936, that is, four and a half years after the execution of the deed, said sum of P1,000 with interest thereon at 12% per annum, the aforesaid mortgage would become null and void, otherwise it would remain in full force and effect and would be subject to foreclosure in the manner provided by law; that the mortgagor would pay all the land taxes on the land and its improvements during the duration of the contract; and that if after the expiration of the said period of four and a half years the mortgagor should fail to redeem the mortgage, she would execute in favor of the mortgagee an absolute deed of sale of the property described in the contract for the same sum of P1,000 plus interest due and unpaid at the rate of 12 per cent per annum. The principal rule in the interpretation of contracts is that "If the terms of a contract are clear and leave no doubt as to the intention of the contracting parties, the literal sense of its stipulations shall be followed. If the words appear to be contrary to the evident intention of the contracting parties, the intention shall prevail" (article 1281, Civil Code). "In order to judge as to the intention of the contracting parties, attention must be paid principally to their conduct at the time of making the contract and subsequently thereto." (Article 1282.) Now, then, what is the true nature of the contract entered into between the parties by virtue of the deed of sale executed by them on May 16, 1932? The Court of Appeals held that it is an absolute deed of sale of a land with a homestead certificate of title, under the guise of a loan secured by a mortgage upon its improvements in order to go around the prohibition contained in section 116 of Act No. 2874, as amended by section 23 of Act No. 3517. Closely examined, the only clauses of the contract which may lead to the conclusion that it is one of sale are those which state that if at the expiration of the period of four years and a half the mortgagor should fail to pay the amount of the loan plus interest due and unpaid at the rate of 12 per cent per annum, she would execute in favor of the mortgagee a deed of absolute sale of the land whose improvements were mortgaged for the amount of the loan and the interest owing. It will be seen that the sale would not be made until after the lapse of four and a half years from the execution of the deed, if the mortgagor should fail or should not wish to redeem the mortgaged improvements. Consequently, the obligation contracted by said mortgagor was no more than a conditional promise to sell. Now, then, is this promise to sell valid? Like any other onerous, consensual and mutually binding contract, that of promise to sell requires for its legal existence and validity the concurrence of consent, consideration and subject-matter. The contract before us does not show what is the cause or consideration for such promise to sell. Assuming that it was the economic impotence of the mortgagor to redeem the mortgaged improvements, before she could be compelled to comply with her obligation to sell, there is need to wait until she should fail to exercise the right to redeem either due to lack of funds or to abandonment. The cause will come into being only upon the happening of said event after the four and a half years and only then will the said contract of promise to sell have juridical existence. The P1,000 and its interest, should the mortgagor fail to redeem the improvements upon the maturity of the indebtedness, would be the consideration of the sale; because the promise to sell is a contract different and distinct from that of sale and each requires a consideration for its legal existence and validity. The terms of the contract are clear and explicit and do not leave room for doubt that the intention of the contracting parties was to constitute a mortgage on the improvements of the land in litigation to secure the payment of the loan for P1,000, with interest thereon at 12 per cent per annum. It cannot be said that this contract is simulated because the assessed value of the improvements is P860 only. It is well known that rural properties are valued for assessment purposes not less than half of their market value. The true value of the said improvements may therefore be P1,720, and the mortgagee may have considered that adequate. Moreover, the petitioner could not have the property whose improvements were mortgaged to him

even should the mortgagor default in the payment of interest. He could only have the mortgaged improvements in case of foreclosure should he bid therefor at the sale. Neither could the mortgagor sell the same property to the mortgagee, even after the expiration of five years from the issuance of the homestead certificate of title, for then the sale would be in satisfaction of an obligation contracted during the five years, which is prohibited by the of mentioned section 116 of Act No. 2874, as amended by section 23 of Act No. 3517. The fact that after one year the contracting parties had novated the contract of loan secured by a mortgage, converting the same into a contract of antichresis because of the mortgagor's failure to pay the accrued interest, does not show that they intended to enter into a contract of sale, because the conversion in this case of the contract of loan secured by a mortgage into one of antichresis was accidental, due to the mortgagor's default in the payment of unpaid interest for the first year. If the parties' intention from the beginning had been to sell the property, the mortgagee would have immediately entered upon the possession of the land instead of waiting until after the expiration of one year. The transfer of the Torrens certificate of title to the homestead by the original owner to the mortgagee in 1934 was only a consequence of the conversion of the mortgage loan into an antichretic loan, the parties having erroneously believed that it was necessary to make such a transfer. The setting off of the interest on the debt against the fruits of the property given in antichresis finds authority in article 1885 of the Civil Code. There is, therefore, no ambiguity in the terms of the contract warranting the search outside its four corners for the true intention of the contracting parties other than that of entering into a contract of loan secured by the said improvements. If the true intention of the contracting parties, as clearly gathered from the terms of the contract, was to enter into a contract of loan secured by a mortgage upon the improvements, although they should convert it into a contract of antichresis after one year and although after the maturity of the loan with interest they may wish to convert it into one of absolute sale-both conversions being illegal and, hence, void,-the original intention of entering into a contract of loan secured by a mortgage upon the improvements would prevail, the said contract of loan being the only one legal and valid, and the petitioner having acted in good faith in making it. The verbal contract of antichresis, entered into by the petitioner Marcial Kasilag and Emiliana Ambrosio, being null and void ab initio and without any legal effect because it is in violation of the express prohibition of section 116 of Act No. 2874, as amended by section 23 of Act No. 3517, (article 4 of the Civil Code), the contracting parties should restore to each other the things which have been the subject-matter of the contract, together with their fruits, and the price paid therefor, together with interest, pursuant to Article 1303 of the same Code. Marcial Kasilag, therefore, should return to Emiliana Ambrosio or to her heirs the possession of the homestead and the improvements thereon with its fruits, and Emiliana Ambrosio or her heirs should pay him the sum of P1,000, being the amount of the loan, plus interest due and unpaid. As to the improvements introduced upon the land by the petitioner, having done so with the knowledge and consent of its owner Emiliana-Ambrosio, the former acted in good faith, and under article 361 of the Civil Code, the owner of the land may have the said improvements upon paying the indemnity provided in articles 453 and 454, or may compel the said Marcial Kasilag, who introduced the said improvements, to pay the price of the land. If the herein respondents, as heirs of Emiliana Ambrosio, do not wish or are unable to pay for said improvements, and Marcial Kasilag does not wish or is unable to pay for the land, said petitioner would lose his right of retention over the same (Bernardo vs. Batclan, 37 Off. G., No. 74, p. 1382), provided that he may remove the improvements which he had introduced in good faith. In view of the foregoing, I concur in the majority opinion except insofar as it holds that the interest is set off against the fruits of the mortgaged improvements, because as a result of the nullity of the contract of antichresis the petitioner should return to the respondents the products of the mortgaged improvements, and the latter should pay to the petitioner the amount of the loan plus interest due and unpaid at the rate of 12 per cent per annum from the date of the contract until fully paid. LAUREL, J., concurring: On August 27, 1918, Emiliana Ambrosio put in a home- stead application for lot No. 285 of the Limay Cadastre, Province of Bataan. After complying with the requisite legal formalities, she obtained therefor homestead patent No. 16074 and homestead certificate of title 325 on June 11, 1931, the same having been recorded in the registry of Deeds of Bataan on June 26, 1931. On May 16, 1932, she entered with the herein petitioner, Marcial Kasilag, into a contract, Exhibit 1, inserted in the foregoing majority opinion. Sometime in 1933, or a year after the execution of the aforequoted deed, the patentee failed to pay the stipulated interest and land taxes, whereupon, the mortgagee, Marcial Kasilag, and the mortgagor, Emiliana Ambrosio, verbally agreed that the former would pay the land taxes and waive the unpaid interest, enter into the possession of the property in question, introducing improvements thereon, and thereafter be reimbursed for the value of such improvements. Under this verbal pact,

Kasilag went into possession of the property, planted it with fruit trees allegedly valued at P5,000, and, on May 22, 1934, declared the same for taxation purposes. In 1934 the original homesteader, Emiliana Ambrosio, died leaving as heirs her children, Rafaela Rodriguez, Severo Mapilisan, Ignacio del Rosario and Gavino Rodriguez. On May 16, 1936, the said heirs, with the exception of Gavino Rodriguez who testified for the defendant, sued Marcial Kasilag in the Court of First Instance of Bataan to recover the possession of the aforesaid property belonging to their mother. For answer, the defendant put in as a general denial plea, a special defense that his possession was in good faith with the knowledge and tolerance of the plaintiffs, a counterclaim for P1,000 representing the loan to the deceased homesteader with stipulated interest thereon, and a recoupment for P5,000 allegedly the value of the improvements he had introduced upon the land. On the issues thus joined, the trial court gave judgment for the defendant couched in the following language: "Resuming all that has been said above, the court finds and declares that the deed of combined mortgage and sale executed by Emiliana Ambrosio in favor of the defendant Marcial Kasilag and dated May 16, 1932, is null and void as a contract for a future conveyance or sale of the homestead, but valid as an equitable mortgage on the improvements for the sum of P1,000; and that the possession of the homestead by the defendant Marcial Kasilag by virtue of paid contract or by virtue of any other agreement is null and void, but that the making of the improvements thereon by him, which the court finds to be valued at P3,000, by virtue of the verbal agreement entered into after the executing of the original instrument of mortgage, was in good faith, entitling the said Marcial Kasilag to be reimbursed of their actual value, the above-mentioned amount. Where- fore, let judgment be entered declaring that the plaintiffs are entitled to the possession as owners of the homestead subject of the present suit, lot No. 285 of the Limay cadastral survey, subject to an encumbrance of the improvements for the sum of P1,000 in favor of the defendant, ordering the defendant to deliver unto the plaintiffs the possession of said homestead, and directing the said plaintiffs in turn to pay unto the defendant jointly and severally, as heirs of their deceased mother Rafaela Rodriguez the sum of P3,000, value of improvements introduced on said homestead by defendant. Let there be no pronouncement as to costs." On appeal by the plaintiffs, the Third Division of the Court of Appeals reached a different result and modified the judgment of the trial court as follows: "Wherefore, the appealed judgment is hereby modified by declaring that the contract, Exhibit '1', is entirely null and void; that the plaintiffs and appellants are the owners of the lot in question together with all the improvements thereon in common with their brother, Gavino Rodriguez, and are, therefore, entitled to the possession thereof; ordering the defendant and appellee to vacate and deliver the possession of the aforesaid lot together with all the improvements thereon to the aforementioned plaintiffs and appellants free from any encumbrance; requiring the latter, however, to pay jointly and severally to the said appellee the sum of P1,000 with interest thereon at the rate of 6 per cent per annum from and including the date this decision becomes final; and absolving the said plaintiffs and appellants from the cross-complaint with respect to the value of the improvements claimed by the appellee. "It is further ordered that the register of deeds of Bataan cancel the certificate of title No. 325 in the name of the deceased, Emiliana Ambrosio, and issue in lieu thereof a new certificate of title in favor of the herein plaintiffs and appellants and their brother, Gavino Rodriguez, as owners pro indiviso and in equal shares free from any lien or encumbrance except those expressly provided by law. "Without special pronouncement as to the costs." The case is before us on petition for certiorari which was given due course, filed by defendant-appellee, Marcial Kasilag, now petitioner, against plaintiffs-appellants, Rafaela Rodriguez and others, now respondents. The burden of petitioner's case is condensed in the following assignments of error: The Honorable Court of Appeals erred: "I. In having interpreted that document Exhibit '1' is an absolute sale and declared it entirely null and void, and in not having interpreted and declared that it is a deed of combined mortgage and future sale which, if void as a contract for the future conveyance of the homestead in question is, however, valid as an equitable mortgage on the improvements thereof for the sum of P1,000 loaned by the petitioner Marcial Kasilag to the homestead owner Emiliana Ambrosio. "II. In holding that the petitioner was guilty of the violation of the public land law for having entered into said contract Exhibit '1'.

"III. In not giving probative value to the uncontradicted testimony of the petitioner Marcial Kasilag that he was expressly authorized by the homestead owner Emiliana Ambrosio to introduce improvements in said homestead. "IV. In not declaring that the possession by the petitioner Marcial Kasilag of said homestead and the introduction by him of improvements therein by virtue of the verbal agreement entered into after the execution of the original instrument of mortgage was in good faith, entitling him to be reimbursed of the actual value of improvements he introduced." Boiled down to the fundamentals, there are only two propositions which stand to be resolved in this appeal: (1) What is the legal nature of the agreement, Exhibit 1, entered into by and between the parties? and (2) Is Marcial Kasilag guilty of bad faith in entering upon the possession of the homestead, paying the land tax and introducing improvements thereon? The numerous adjudications in controversies of this nature will show that each case must be decided in the light of the attendant circumstances and the situation of the parties which, upon the whole, mark its character. However, for the purpose of ascertaining the manner and extent to which persons have intended to be bound by their written agreements, the safe criterion, the time honored test, is their intention which is intimately woven into the instrument itself. It is true that resort to extrinsic evidence is imperative when the contract is ambiguous and is susceptible of divergent interpretations; nevertheless, the primary obligation of the courts is to discover the intention of the contracting parties, as it is expressed by the language of the document itself. We are not authorized to make a contract for the parties. In the trial court as in the Court of Appeals, the discussion centered on the nature and validity of the document, Exhibit 1. This is the correct approach. The Court of Appeals, however, rejected the conclusion of the trial court that it is a deed of combined mortgage and sale, and ruled that it is an absolute deed of sale which is null and void in its entirety because it is banned by section 116, as amended of the Public Land Act. The ruling is now assailed by the petitioner. I share petitioner's view that the deed is not what it was construed to be by the Court of Appeals. From Article I to III thereof is a description of the homestead and the improvements existing thereon. By its Article IV the homesteader, Emiliana Ambrosio, "encumbers and hipothecates, by way of mortgage, only the improvements described in Articles II and III" under the conditions set out in Articles V, VI and VII. Its closing Articles VIII and IX, particularly relied upon by the Court of Appeals, speak, not of a present deed of absolute sale, but of one to be executed "upon the expiration of the period of time (41, years) stipulated in the mortgage" if "the mortgagor should fail to redeem this mortgage". In other words, the redemption of the mortgage by the payment of the loan may bring about the frustration of the contemplated sale, hence, to hold unqualifiedly that the whole of Exhibit 1, or even a part thereof, is an absolute deed of sale would be to do violence to the terms of the document itself. Still other tokens drive home the same conviction. The intimation by the Court of Appeals that the petitioner "know, therefore, that the land subject of the patent could not be alienated by express prohibition of law," is an argument that the petitioner could not have brazenly disregarded the law by intending Exhibit 1 to be an absolute deed of sale. Its further observation that "the stipulation under article VIII of the contract, Exhibit '1' . . . clearly indicates that there was nothing left to be done except the execution of the deed of absolute sale," is a concession that no such sale has yet been executed. Finally, it will be recalled that under Article VII of Exhibit 1, "within thirty (30) days after date of execution of this agreement the party of the first part shall file a motion before the Court of First Instance of Balanga, Bataan, P. I., requesting cancellation of homestead certificate of title No. 325 referred to in Article 1 hereof and the issuance, in lieu thereof, of a certificate of title under the provisions of Land Registration Act 496, as amended by Act 3901." And by its Article IX it provides "That in the event the contemplated motion under Article VII hereof is not approved by the Court, the foregoing contract of sale shall automatically become null and void." (Emphasis is mine.) We have nothing in the record to show that the required motion was filed within thirty days or thereafter, by Emiliana Ambrosio in life, or by her successors-in-interest after her death. Indeed, Homestead Certificate of Title No. 325, sought to be substituted by another through the said motion, still stands. It is, evident, therefore, that the projected sale has and may never come into being, because under Article IX of Exhibit 1, it became automatically null and void. This view, incidentally, precludes further consideration of the validity or invalidity of the sale clause of Exhibit 1, as it will be purely academic to dwell upon the nature and effect of a contract that has passed out of existence in the contemplation of the parties. Having reached the conclusion, upon its plain language and unequivocal import, that Exhibit 1 is essentially and fundamentally a mortgage upon the improvements found on the questioned homestead, with a conditional clause for the future sale of said homestead and improvements which has become a "dead twig" still attached to a living tree because the

condition has never been performed, I would, under Articles 1281 and 1283 of the Civil Code, be otherwise content in resting our decision of this aspect of the case on this interpretation. But I do not propose to so limit my inquiry in view of the fact that the Court of Appeals points to contemporaneous and subsequent circumstances, beyond the four corners of the document, Exhibit 1, allegedly revelatory of petitioner's concealed but evident intention to circumvent the law. I may state, at the outset, that these circumstances are fairly susceptible of legitimate explanations. The appealed decision could not conceive of a man, of petitioner's intelligence, who "would accept improvements valued at only P860 as security for the payment of a larger amount of P1,000." But we are concerned with an assessed valuation which is not always nor even frequently the value that it can command in the market. To ignore this is to live in monastic seclusion. The appealed decision would imply from the fact that petitioner subsequently paid the land taxes and from the further fact that Emiliana never paid stipulated interest on the one thousand-peso loan, that Exhibit 1 was meant to vest absolute title irretrievably in the petitioner. It could hardly be supposed at the time of the execution of Exhibit 1 that the homesteader would fail to make these payments, nor does it seem just to draw from these circumstances, induced by Emiliana's own neglect, deductions unfavorable to the petitioner. That the petitioner went upon the possession of the questioned property is not proof that he was even then already the would-be owner thereof, for as elsewhere stated, the said possession came practically at the suggestion of or at least with the consent of Emiliana Ambrosio as a result of her failure to live up to her part of the bargain. Finally, the Court of Appeals asked: "If the real purpose was to mortgage the improvements only as specified in article IV of the contract, why is it that in article VIII thereof it was provided that in case of failure to redeem the alleged mortgage the grantor would be required to execute a deed of absolute sale of the property described therein for the same amount of the mortgage in favor of the grantee, and not of 'the improvements only'?" The precaution which the petitioner took to have the sale clause of Exhibit I so phrased that the said sale would not be effected until after the expiration of the five- year period prohibited by law, at which time the alienation of the homestead would then have been perfectly legitimate, may not be without significance to show petitioner's respect for and intention to be on the side of the law. The very mention of the word "sale" in the document in question argues against any attempt at concealment, for if the said document was intended as a cover and cloak of an illegal alienation, then the reference to the contract of sale therein was illtimed and foolhardy. The question next at hand is whether or not the mortgage constituted upon the improvements of the homestead is valid. It is, under express provisions of section 116 of the Public Land Act, before 2nd after its amendment, reading pertinently that "the improvements or crops on the land may be mortgaged or pledged to qualified persons, associations, or corporations." I find no occasion to dispute this legislative policy however mistaken it may be. It is sufficient to observe that what the law permits may be done. Upon the other hand, I find no occasion to test the legality of the sale provisions of Exhibit 1 for, as I have heretofore said, this question is, in my opinion, moot. Moreover, the petitioner, technically, is barred from raising this question, as he did not appeal from and, therefore, abided by the decision of the trial court which outlawed this sale clause as violative of the provisions of section 116 of the Public Land Act. This part of the decision of the trial court was affirmed by the Court of Appeals when the latter struck down Exhibit 1 in its entirety and, even now, petitioner does not complain against the destruction of Exhibit 1 with respect to its sale clause. In other words, counsel for petitioner concedes all along that the said sale clause may be properly legislated out. As the mortgage provisions of Exhibit 1 are independent of and severable from the rest thereof, the same are perfectly enforceable. Where a part of the contract is perfectly valid and separable from the rest, the valid portion should not be avoided. (Ollendorff vs. Abrahamson, 38 Phil., 585.) The question yet to be answered is whether the petitioner's possession of the questioned homestead was in good faith so as to entitle him to reimbursement for improvements introduced upon the land. The basis of petitioner's possession was a verbal agreement with the original homesteader whereby, for failure of the latter to comply with her obligations to pay land taxes and stipulated interest on the loan, the former assumed the said obligations for the privilege of going into possession of the property, introducing improvements thereon, and thereafter being reimbursed for the value of such improvements. The petitioner did enter upon such possession, planted the land to fruit trees valued at P5,000, according to him, and P3,000, according to the trial judge. It should be stated, in passing, that the Court of Appeals was unable to belie this verbal agreement, although it was of the opinion "that the trial court erred in giving probative value to the testimony of the appellee with reference to the alleged verbal agreement". Its reason for the opinion is not because the testimony is untrue, but because even if it were true, "it only tends to corroborate the allegation that he acted in bad faith when he took possession of the property and made improvements thereon, because then he knew full well that the homestead owner could not enter into an agreement involving the future final and absolute alienation of the homestead in his favor." As the said opinion and the reason back of it does not involve a question of strict fact, it is in our power to inquire into its soundness. The weakness of the argument lies, first, in its (a) inconsistency and (b) in the misconception of the legal principle involved: inconsistency, because it considers entry of possession, payment of land tax as facts tending to show the real character of the transaction and as

evidencing bad faith on the part of the petitioner, but at the same time it improperly rejects the verbal agreement by which such facts are established. It is clear that we cannot directly reject the verbal agreement between the parties in so far as it is favorable to Ambrosio and indirectly reject it in so far as it is favorable to the petitioner. The misconception proceeds from the erroneous legal conclusion that, upon the facts, the good faith is atributable to the petitioner alone and that Ambrosio was not to be blamed for the prohibited alienation of the homestead, as I shall presently proceed to discuss. In holding that the petitioner was a possessor in bad faith, the decision sought to be reviewed first laid down the premise that such possession is banned by law at least for five years from the issuance of patent (section 116, Public Land Act), assumed that the petitioner had knowledge of such law, and then drew the conclusion that petitioner was aware of the illegality of his possession. We think that the assumption and conclusion are precipitate. As observed in the foregoing majority opinion-citing Manresa-knowledge of a legal provision does not necessarily mean knowledge of its true meaning and scope, or of the interpretation which the courts may place upon it. In this particular case, what section 116 of the Public Land Act prohibits is the "incumbrance or alienation" of land acquired thereunder within the period prescribed therein. We may concede, as assumed by the appealed decision, that the petitioner was cognizant of said section 116, but this is not saying that petitioner knew that his possession came under the phrase "incumbrance or alienation" prohibited by law, and that the petitioner, therefore, knew that his possession was illegal. The import of the phrase "incumbrance or alienation" is a subject upon which "men of reason may reasonably differ," in the same way that we ourselves have differed in the deliberation of this case. It is not correct to assume that the petitioner had knowledge of the illegality of his possession. The contrary assumption, namely, that petitioner had no idea of such illegality, would have been more in accord with the experience of everyday, for petitioner would not have invested money and labor in the land and assumed obligations incumbent upon the homesteader if he had even the least suspicion that all his efforts would count for nothing and would in the end entangle him in a mild scandal. As possession in bad faith does not necessarily mean possession illegal under the law, is being necessary that the possessor be aware of such illegality, it follows that the petitioner's possession of the homestead of the respondents was in good faith. (Art. 433, Civil Code.) "Good faith is always presumed, and the burden of proving bad faith on the part of the possessor rests upon the person alleging it" (article 434, Civil Code.) As a bona fide possessor, and it being unquestioned that the improvements introduced by him upon the land redounded to its benefit, the petitioner is by law entitled to be paid for the value of such improvements in the amount of P3,000, as found by the trial judge. "Useful expenditures shall be paid the possessor in good faith with the same right of retention, the person who has defeated him in his possession having the option of refunding the amount of such expenditures or paying him the increase in value which the thing has acquired by reason thereof." (Article 453, 2nd par., Civil Code). The reimbursement in this particular case is the more in order in view of the express undertaking of respondents' predecessor-in-interest to pay therefor. Even the equities of the case militate against the respondents and in favor of the petitioner. There is a concession that the petitioner's possession was neither imposed upon nor wrested from the homesteader; on the contrary, it came about by virtue of a mutual agreement whereby the said homesteader and the herein respondents were spared the burden of paying for land taxes and stipulated interest and extended the benefit of having their land improved on condition that they pay the value of such improvements upon redeeming the land. We also have uncontradicted fact that P400 of the one thousand-peso loan were given to the herein respondents and the balance kept by their mother. They may not reap and retain these benefits and at the same time repudiate and go back upon contractual obligations solemnly entered into. But let me grant that the contract, Exhibit 1, is one of absolute sale, as found by the Court of Appeals, what then? As the land could not be alienated for five years from the date of the issuance of the patent, the sale was illegal and void because it was entered into in violation of section 116 of the Public Land Act, as amended. By whom was the law violated? Certainly, not by Kasilag alone but by Ambrosio as well. Both are presumed to know the law, and we cannot justly charge Kasilag alone with that knowledge on the alleged reason that Kasilag is rich and Ambrosio is poor. Neither can we proceed on the bare assumption that because Exhibit 1 was written in English it was prepared by Kasilag as if he were the only English speaking person in the Province of Bataan where the document was executed. Are we already living in the midst of a communistic society that we shall have to incline invariably the balance in favor of a litigant because he happens to be poor and against the litigant who happens to be well-to-do, regardless of the merits of the case? And to this end, shall we, by a series of assumptions and deductions, impute to a party malice aforethought dishonesty and bad faith, in entering into a transaction made in the open sun, publicly recorded and whose effectiveness was even conditioned by the approval of a court of justice? If so, then I dare say that we have not profited by the admonition of Aristotle in his Metaphysics centuries ago that "justice is a virtue of the soul which discards party, friendship and sentiment and is therefore always represented as blind." There is a charm in rhetoric but its value in cool judicial reasoning is nil.

And if as we are confidently told we should relax the legal principle with reference to Ambrosio, because she was "poor and ignorant," I am reluctant to believe that she was ignorant of the condition against the alienation inserted in all homestead patents, and my knowledge of the Public Land Law, of the activities of the Department and bureau charged with the administration of public lands, gives me just the contrary impression. Every homestead patent contains that condition. Circulars and instructions and general information have been issued in pursuance with law. (Sec. 5, Act No. 2874; see also sec. 5, Commonwealth Act No. 141.) I must presume that the Government and its officials charged with the administration of public lands have complied with the law and their duties in this connection, and I cannot believe that Ambrosio, when she alienated the property, was unaware of the legal prohibition. Under the circumstances, then, it is reasonable to conclude that on the hypothesis that the document, Exhibit 1, was a contract of absolute sale between Kasilag and Ambrosio, both of them were guilty of infraction of the law. If this is correct, what is the legal situation of the parties? Justinian who, by his Corpus Juris Civiles, still speaks through practically all the civil codes of Continental Europe, considers both as having acted in good faith. "Realmente," bluntly observes Manresa, "si los dos que se encuentran en lucha sobre la propiedad han provocado el conflicto por su voluntad; a ciencia y paciencia del dueo del suelo, ante cuya vista las obras se han ejecutado, y con conciencia, por parte del que edifica o planta, de que el terreno no es suyo, no hay razon alguna que abone derecho preferente en favor de ninguno de los dos; deben, por tanto, tratarse como si los dos hubiesen obrado de buena fe; la mala fe del uno extingue y neutraliza, en justa reciprocidad, la del otro." (Manresa, Codigo Civil, segunda edicion Tomo III pag. 203.)Article 364 of our Civil Code then comes into play. "When there has been bad faith, not only on the part of the person who built, sewed, or planted on another's land, but also on the part of the owner of the latter, the rights of both shall be the same as if they had acted in good faith. Bad faith on the part of the owner is deemed to exist whenever the act has been done in his presence, with his knowledge and tolerance, and without opposition on his part." (Article 364, Civil Code; see also arts. 1303, 1306 ibid.) The codal section is evidently based upon the venerable maxim of equity that one who comes into equity must come with clean hands. A court which seeks to enforce on the part of the defendant uprightness, fairness, and conscientiousness also insists that, if relief is to be granted, it must be to a plaintiff whose conduct is not inconsistent with the standards he seeks to have applied to his adversary. Fundamenta justitiae sunt, ut ne cui noceatur, deinde ut communi serviatur. I therefore concur in the result. CONCEPCION, J., dissenting: In view of the findings of fact of the Court of Appeals, which are final according to law, I dissent from the majority opinion as to the legal denomination of the contract really entered into by the petitioner and the now deceased Emiliana Ambrosio. The facts according to the decision of the Court of Appeals are as follows: "On August 27, 1918, the deceased, Emiliana Ambrosio applied for the land in question as a homestead, now known as lot No. 285 of the Limay cadastral survey of Bataan, and the application was approved on September 10, 1919. A final proof was submitted on November 10, 1927 which was approved on October 17, 1929. The homestead patent No. 16074 and homestead certificate of title No. 325 were issued in favor of the applicant on June 11, 1931 which were re- corded on June 26, 1931 in the office of the register of deeds in accordance with the provisions of section 122 of ,Act 496. "On or about May 16, 1932, the homestead owner, Emiliana Ambrosio offered to sell the property to the defendant and appellee, Marcial Kasilag. The latter, upon examining her title found that it was a homestead patent and knew, therefore, that the land subject of the patent could not be alienated by express prohibition of law, so he devised a means by which the proposed sale might not appear in any document and had the patentee, Emiliana Ambrosio, execute a public instrument, Exhibit '1', purporting to be a mere mortgage of the improvements thereon consisting of four mango trees, fruit bearing; 110 hills of bamboo trees, 1 tamarind, and 6 bonga trees, with the assessed value of P860, in consideration of the sum of P1,000 alleged to have been loaned by the said Kasilag to the said patentee, Emiliana Ambrosio. It was expressly stipulated in that document that the aforementioned amount should be paid within four and a half years from the date of the instrument (May 16, 1932), the condition being that if she would fail to redeem the alleged mortgage at the expiration of the stipulated period, she would execute a deed of absolute sale of the property therein described for the same amount of the alleged mortgage (P1,000) including all unpaid interest at the rate of 12 per cent per annum in favor of the alleged mortgagee. It was further stipulated therein that the said Emiliana should pay all the taxes and assessment which might become due on the land and improvements during the term of the agreement and that within thirty days after the date of the execution thereof she should file a motion before the Court of First Instance of Bataan requesting the cancellation of the homestead certificate No. 325

above referred to and the issuance in lieu thereof a certificate of title under the provisions of the Land Registration Act 496, as amended by Act 3901. "The lot in question was originally declared for land tax purposes in the name of the homestead (owner) Emiliana Ambrosio, and assessed at P1,020 in 1933; but on May 22, 1934, the tax declaration was transferred in the name of the appellee, Marcial Kasilag, and on March 6, 1936 the assessed value was raised to P2,180. "Emiliana, however, never paid any interest on the alleged loan of P1,000 or paid taxes on the land since the execution of the contract. "The evidence further discloses that the appellant entered upon the actual possession of the land and had been holding the same up to the present time, having planted various kinds of fruit trees valued according to him at P5,000, and collected the products thereof for his own exclusive benefit." Relying upon the foregoing facts, the majority contends that the contract executed by the parties was one of mortgage, as per Exhibit 1, with a promise to sell the land in question. I cannot hold to these rulings of the majority, because the nature of the contract of mortgage is inconsistent with the idea that the creditor should immediately enter upon the possession of the mortgaged land; that he should pay the land tax; that he should introduce improvements thereon, and that he should accept as security something whose values does not cover the amount of the loan sought to be secured, for in this case the supposed loan was P1,000, and what were mortgaged were only the improvements consisting of 4 mango trees, 110 hills of bamboo trees, 1 tamarind tree and 6 betelnut trees, assessed at P860. I believe that the contract which the parties intended to execute is a promise to sell the land, for which reason Ambrosio retained the right of ownership of the land and its improvements while the deed of the promised sale had not been executed. Under the terms of the deed Exhibit 1, Kasilag could not be considered the owner of the land, nor could he execute any act premised upon the assumption of ownership, nor could he alienate the same as he had no title to it. But the parties, in consideration of the fact that Kasilag paid in advance the price of the land and assumed the obligation to pay the tax thereon, which Ambrosio could not pay, agreed that Kasilag may enter upon the enjoyment of the land until the promise to sell is converted in fact into an absolute sale by the execution of the corresponding deed by Ambrosio. It was stipulated, however, that if the sale is not approved by the Court, Kasilag would collect the amount of P1,000 paid by him as a mortgage credit, with all the interest due and payable. Under these circumstances, the conclusion of law that Kasilag acted in bad faith is not supported by the established facts. Wherefore, the plaintiffs are bound to comply with the contract as heirs of Ambrosio, by executing in favor of Kasilag the deed of sale of the land, but should the sale, for any reason, be not approved, Kasilag may collect the amount of P1,000 with all the interests thereon, and may execute the judgment obtained by him upon the land and all its improvements, deducting, however, in his favor the value of the improvements which he introduced upon the land in good faith. In view of the foregoing, I am of the opinion that the decision of the Court of Appeals should be reversed and that another should be entered against the respondents, requiring them to execute the deed of sale of the land in favor of the petitioner, provided that if the sale, for any reason, be not approved by the court, the petitioner may execute his credit upon the land and all its improvements, after deducting the value of the improvements introduced by him upon the land. MORAN, J., dissenting: According to section 116 of Act No. 2874, as amended by section 23 of Act No. 3517, "lands acquired under the free patent or homestead provisions shall not be subject to en- cumbrance or alienation from the date of the approval of the application and for a term of five years from and after the date of issuance of the patent or grant, nor shall they become liable to the satisfaction of any debt contracted prior to the expiration of said period." About June 11, 1931, homestead patent No. 16074 was issued to Emiliana Ambrosio, now deceased. On May 16, 1932 Emiliana Ambrosio offered the sale of the said homestead to the herein petitioner, Marcial Kasilag, and in view of the abovequoted legal prohibition, the parties executed the document Exhibit 1, copied in the majority decision. The heirs of Emiliana Ambrosio filed a complaint for the annulment of the contract in the Court of First Instance of Bataan, and from the judgment rendered by said court an appeal was taken to the Court of Appeals, which held that the true contract between the parties is

one of absolute sale, wherefore, it is null and void under the already cited legal prohibition. Marcial Kasilag comes to this court on certiorari, and this Court reverses the decision of the Court of Appeals. The only question is as to the true contract between the parties at the time of the execution of the deed Exhibit 1: Kasilag contends that the contract is that set out in the document Exhibit 1, that is, a mortgage of the improvements of the homestead to secure a loan of one thousand pesos given to Emiliana Ambrosio; and the latter's heirs, in turn, contend that the contract is one of absolute sale of the homestead, wherefore, it is null and void. The findings of the Court of Appeals are as follows: "The pertinent facts as disclosed by the evidence of record are as follows: "On August 27, 1918 the deceased, Emiliana Ambrosio, applied for the land in question as a homestead, now known as lot No. 285 of the Limay cadastral survey of Bataan, and the application was approved on September 10, 1919. A final proof was submitted on November 10, 1927 which was approved on October 17, 1929. The homestead patent No. 16074 and homestead certificate of title No. 325 were issued in favor of the applicant on June 11, 1931 which were recorded on June 26, 1931 in the office of the register of deeds in accordance with the provisions of Section 122 of Act No. 496. "On or about May 16, 1932, the homestead owner Emiliana Ambrosio offered to sell the property to the defendant and appellee, Marcial Kasilag. The latter, upon examining her title found that its was a homestead patent and knew, therefore, that the land subject of the patent could not be alienated by express prohibition of law, so he devised means by which the proposed sale might not appear in any document and had the patentee, Emiliana Ambrosio, execute a public instrument, Exhibit 1, purporting to be a mere mortgage of the improvements thereon consisting of four mango trees, fruit bearing; one hundred ten hills of bamboo trees, one thousand and six bonga trees, with the assessed value of P860, in consideration of the sum of P1,000 alleged to have been loaned by the said Kasilag to the said patentee Emiliana Ambrosio. It was expressly stipulated in that document that the aforementioned amount should be paid within four and a half years from the date of the instrument (May 16, 1932), the condition being that if she failed to redeem the alleged mortgage at the expiration of the stipulated period, she would execute a deed of absolute sale of the property therein described for the same amount of the alleged mortgage (P1,000) including all unpaid interest at the rate of 12 per cent per annum in favor of the alleged mortgagee. It was further stipulated therein that the said Emiliana should pay all the taxes and assessment which might become due on the land and improvements during the term of the agreement and that within thirty days after the date of the execution thereof she should file a motion before the Court of First Instance of Bataan requesting the cancellation of the homestead certificate No. 325 above referred to and the issuance in lieu thereof of a certificate of title under the provisions of the Land Registration Act No. 496, as amended by Act No. 3901. "The lot in question was originally declared for land tax purposes in the name of the homestead owner, Emiliana Ambrosio, and assessed at P1,020 in 1933; but on May 22, 1934, the tax declaration was transferred in the name of the appellee, Marcial Kasilag, and on March 6, 1936 the assessed value was raised to P2,180. "Emiliana, however, never paid any interest on the alleged loan of P1,000 or paid taxes on the land since the execution of the contract. "The evidence further discloses that the appellee entered upon the actual possession of the land and had been holding the same up to the present time, having planted various kinds of fruit trees valued according to him at P5,000, and collected the products thereof for his own exclusive benefit. "Construing the contract, Exhibit 1, in the light of all the foregoing facts and circumstances under which it was executed in relation to the subsequent acts of the contracting parties, we are led to the inescapable conclusion that their real intention was to execute an agreement of absolute sale of the homestead together with the improvements thereon. The stipulation concerning an alleged mortgage in the instrument is a mere devise to circumvent the law which expressly prohibits the alienation or encumbrance of the homestead during the period of five years from the date of the issuance of the homestead patent. (Sec. 116 of Act No. 2874 as amended by Act No. 3517.) "It is inconceivable, and, therefore, we refuse to believe that the appellee, Marcial Kasilag, being an intelligent man far above the average, would accept improvements valued at only P860 as security for the payment of a larger amount of P1,000, the alleged loan. We entertain no doubt that at the time the execution of the contract, Exhibit 1, the appellee knew that the homestead owner, Emiliana Ambrosio, a poor ignorant woman, was badly in need of money and that she was determined to dispose of and alienate definitely her homestead, as evidenced by the fact testified to by Gavino Rodriguez as witness for the

said appellee that she actually offered to sell the land to the latter. He also knew that she would not be able to pay back to him such a large amount with interest of 12 per cent per annum because she had no other income except what she would derive from the homestead. Under such circumstances, there is reason to believe that she was no longer concerned with the form in which the contract would be drawn, as long as she could obtain the amount of P1,000 which was agreeable to her as the price of the homestead she offered to sell to the appellee. This conclusion is supported in part by the subsequent action of Emiliana in not paying any interest on the alleged loan of P1,000 or the land taxes thereon since the execution of the contract and by the action of the appellee in declaring the land for tax purposes in his own name as owner thereof, notwithstanding that he had no interest in the land, as he alleged, except in the improvements only. "The contract of absolute sale was consummated, because the grantor, Emiliana, received full payment of the purchase price disguised as a loan of P1,000 and placed the grantee, Marcial Kasilag, in absolute possession and control of the land conveyed to him with all the improvements thereon. The stipulation under article VIII of the contract, Exhibit 1, to the effect that the grantor 'would execute a deed of absolute sale of the property herein described for the said amount of this mortgage including all unpaid interest at the rate of 12 per cent per annum in favor of the mortgagee,' clearly indicates that there was nothing left to be done except the execution of the deed of absolute sale, which is merely a matter of form in contracts of this nature, which was postponed until after the expiration of four and a half years because by that time the period of five years within which the property could not be alienated nor encumbered in any way, as provided by section 116 of Act No. 2874 as amended by Act No. 3517, supra, would have already expired. If the real purpose was to mortgage the improvements only as specified in article IV of the contract, why is it that in article VIII thereof it was provided that in case of failure to redeem the alleged mortgage the grantor would be required to execute a deed of absolute sale of the property described therein for the same amount of the mortgage in favor of the grantee, and not of 'the improvements only'? It is clear, therefore, that the real contract under Exhibit 1, was one of absolute sale and not a mortgage with future sale." In other words, although the document Exhibit 1 states that it is a mortgage of the improvements, with a stipulation regarding a future sale of the land in case of failure to comply with the mortgage obligations, in reality the true contract between the parties is one of absolute sale in the light of the circumstances of the case, among them the following: First. Emiliana Ambrosio offered the sale, not the mortgage, of her homestead to Marcial Kasilag, and it is a fact found established by the Court of Appeals that she was agreeable to the sum of one thousand pesos as the price of the sale offered by her. If this is so, it is unlikely that Kasilag would refuse the offer of sale of the homestead and would accept in lieu thereof a simple mortgage of the improvements, for the same sum of one thousand pesos; Second. In the deed it is stipulated that, if at the expiration of the period of four and a half years, the debtor should fail to redeem the mortgage, she would execute in favor of the creditor, Marcial Kasilag, a deed of absolute sale not only of the mortgaged improvements but also of the land for the same amount of the loan of one thousand pesos. This magic conversion of the mortgage of the improvements into an absolute sale of the land at the expiration of four and a half years and without any additional consideration can only mean that the two contracts are one and the same thing, and that the first has been availed of to go around the legal prohibition. The scheme is very obvious, and to make any attempt to reconcile it with good faith is simply to fall into it. The mortgage of the improvements could not have been intended because the supposed loan which it guaranteed was the same price of the stipulated sale to be later executed, and further because Kasilag knew, according to the findings of fact of the Court of Appeals, that Emiliana Ambrosio was a poor and ignorant woman who was not in a position to return the one thousand pesos; Third. Kasilag had always considered the contract as one of sale of the land and not as a mortgage of the improvements, because he put the tax declaration of the land in his name, paid the corresponding land tax, took possession of the land, received the fruits thereof for his exclusive use, and introduced thereon permanent improvements, one of them being a summer house, all of which were valued at about five thousand pesos. It is not an attribute of a contract of mortgage that the creditor should take possession of the mortgaged property, or that he should pay the taxes thereon. Kasilag would not spend five thousand pesos for permanent improvements if he knew that his possession was precarious. Fourth. In the document it is stipulated that the debtor would pay interest, but she did not pay any, and the alleged t mortgage was not foreclosed thereby, which shows that the stipulation was nothing but a ruse.

Fifth. The deed Exhibit 1 was drawn by Kasilag, because it is in English, and the other party is a poor and ignorant woman, wherefore, all doubts and uncertainties arising therefrom should be resolved against Kasilag. It is to be noted that in this document are phrases indicative of the real contract between the parties. For instance: in clause IV the word paid and not loaned is used in referring to the loan of one thousand pesos; and clause IX of the document states "the foregoing contract of sale". Under all these circumstances, the irresistible conclusion is that the real contract between the parties is an absolute sale, and that the contract of mortgage was made to appear in the document Exhibit 1 for the sole purpose of defeating the legal prohibition. Nevertheless, the majority of this Court, brushing aside the findings of fact made by the Court of Appeals without stating its reasons therefor, holds as to the document Exhibit 1, that "as the terms thereof are clear and leave no room for doubt, it should be interpreted according to the literal meaning of its clauses." I have already shown in speaking of the second circumstance, that the context itself of the document Exhibit 1 discloses strong tokens that the contract between the parties was one of sale and not of mortgage. Moreover, the rule relied upon by the majority is only applicable in the absence of any allegation that the document does not express the real contract between the parties. Under section 285, No. 1, of Act No. 190, a document, however clear its conditions may be, may and should be rejected when it is alleged and shown by evidence aliunde that it does not express the true intent of the parties. We have often considered a document, by its terms a contract of absolute sale, as one of mortgage because it has been so alleged and established by convincing oral evidence. (Cuyugan vs. Santos, 34 Phil., 100; Villa vs. Santiago, 38 Phil., 167; Laureano vs. Kilayco, 34 Phil., 148; Cuyugan vs. Santos, 39 Phil., 970; Rodriguez vs. Pamintuan, 37 Phil., 876; see also Manalo vs. Gueco, 42 Phil., 925; Gatmaitan vs. Nepomuceno, 42 Phil., 295.) The majority decision does not only pass over the findings of fact made by the Court of Appeals, but, further, gives weight to certain facts which said court finds not to have been established. For instance, we have the following passages from the majority decision: "One year after the execution of the aforequoted deed, that is, in 1933, it came to pass that Emiliana Ambrosio was unable to pay the stipulated interest as well as the tax on the land and its improvements. For this reason, she and the petitioner entered into another verbal contract whereby she conveyed to the latter the possession of the land on condition that the latter would not collect the interest on the loan, would attend to the payment of the land tax, would benefit by the fruits of the land, and would introduce improvements thereon. . . . . . This stipulation was verbally modified by the same parties after the expiration of one year, in the sense that the petitioner would take possession of the land and would benefit by the fruits thereof on condition that he would condone the payment of interest upon the loan and he would attend to the payment of the land tax. . . " These two paragraphs state as an established fact the supposed verbal contract between the parties which Kasilag tried to prove by his testimony. However, the Court of Appeals expressly held: "We believe, however, that the trial court erred in giving probative value to the testimony of the appellee (Marcial Kasilag) with reference to the alleged verbal agreement with the deceased, Emiliana Ambrosio, and based thereon the conclusion that the appellee acted in good faith." (Words in parenthesis are mine.) Rule 47, paragraph (b), of our Rules, provides expressly that in appeals to this court on certiorari, "only questions of law may be raised and must be distinctly set forth." And we have held in various decisions that in passing upon the legal conclusions of the Court of Appeals, we shall abide by the findings of fact of said court. I, moreover, find certain ambiguities in the majority decision, for while it states on the one hand that the verbal contract had for its purpose the "alteration of the mortgage contract clearly entered into, converting the latter into a contract of antichresis," (underscoring mine) thereby implying that the mortgage contract was abandoned by the parties and ceased to exist, in the dispositive part of its decision, the majority holds that the mortgage of the improvements is valid and binding, and gives to the respondents the right to "redeem the mortgage of the improvements by paying to the petitioner within three months the amount of P1,000 . . ." It, therefore, requires compliance with a contract that has ceased to exist. While on the one hand the majority states that the aforesaid verbal contract is one of antichresis and that it is void, on the other hand, it gives force thereto by holding that the interest on the loan of one thousand pesos is sufficiently "set off by the value of the fruits of the mortgaged improvements which the petitioner received." And, furthermore, why should the interest be set off against the fruits of the improvements only and not against those of the entire land? And if the verbal contract of

antichresis is void, why is Kasilag not required to render an accounting of the fruits of the land received by him which may exceed the total amount of interest, taxes and even the principal itself ? The majority states that Kasilag, in taking possession of the homestead, receiving its fruits and introducing improvements thereon did so under the void contract of antichresis, and did so in good faith as he was excusably unaware of the legal provision which prohibits the incumbrance of the homestead within the period of five years. Whether Kasilag was aware or unaware of the legal prohibition is again a factual question resolved by the Court of Appeals as follows: "the appellee (Marcial Kasilag) was also aware of these provisions which were incorporated in the homestead patent shown to him at the beginning of the transaction" (Words in parenthesis are mine). I do not understand how we can disturb this factual finding. I found, moreover, that in the majority decision it is ordered that, if the heirs of Emiliana Ambrosio cannot pay the value of the permanent improvements introduced by Marcial Kasilag, the latter may have the homestead by paying to them its price in the market. The improvements were appraised by the trial court at three thousand pesos, and as the heirs of Emiliana Ambrosio probably inherited nothing from the latter but poverty, they will eventually be unable to pay the said amount and, in the last analysis, will lose the homestead of their mother. The practical effect, therefore, of the majority decision is that the heirs of Emiliana Ambrosio will be deprived of the homestead by virtue of a void antichretic obligation contracted by her within the period of five years from the granting of the homestead. And this, at least, is in violation of the spirit of section 116 of the Homestead Act. I have other reasons which I need not set out to bring this dissent to a close. But before I conclude, I should like to state that the Homestead Act has been enacted for the welfare and protection of the poor. The law gives a needy citizen a piece of land where he may build a modest house for himself and family and plant what is necessary for subsistence and for the satisfaction of life's other needs. The right of the citizens to their homes and to the things necessary for their subsistence is as vital as the right to life itself. They have a right to live with a certain degree of comfort as become human beings, and the State which looks after the welfare of the people's happiness is under a duty to safeguard the satisfaction of this vital right. Moreover, a man with a home and a means of subsistence is a lover of peace and order and will profess affection for his country, whereas one without a home and in penury is not only a social parasite but also a dangerous element in the social order. The Homestead Act at once aims at the promotion of wholesome and happy citizenship and the wiping out of the germs of social discontent found everywhere. Considering the social and economic ends of the Homestead Act, the courts should exercise supreme care and strict vigilance towards faithful compliance with all its benign provisions and against the defeat, directly or indirectly, of its highly commendable purposes. And it is my firm conviction that where, as in the present case, a rich and clever man attempts to wrest a homestead granted to a poor and ignorant woman, the slightest tokens of illegality should be enough to move the courts to apply the strong arm of the law. I dissent from the majority decision and vote for the affirmance of the decision of the Court of Appeals. Avancea, C.J., concurs.

ILDEFONSO O. ELEGADO, as Ancillary Administrator of the Testate Estate of the late WARREN Taylor GRAHAM, petitioner, vs. HON. COURT OF TAX APPEALS and COMMISSIONER OF INTERNAL REVENUE, respondents. Agrava, Lucero & Gineta for petitioner. The Office of the Solicitor General for public respondents. SYLLABUS 1. TAXATION; NATIONAL INTERNAL REVENUE CODE; ESTATE TAX; SECOND ASSESSMENT OF LESSER AMOUNT DOES NOT CANCEL PREVIOUS ASSESSMENT WHICH HAS BECOME FINAL AND EXECUTORY. It is noted that in the letter of July 3, 1980, imposing the second assessment of P72,948.87, the Commissioner made it clear that "the aforesaid amount is considered provisional only based on the estate tax return filed subject to investigation by this Office for final determination of the correct estate tax due from the estate. Any amount that may be found due after said investigation will be assessed and collected later." It is illogical to suggest that a provisional second assessment of P72,948.87 can supersede an earlier assessment of P96,509.35 which had clearly become final and executory for failure to contest the assessment for six (6) years. 2. CIVIL LAW; EFFECT AND APPLICATION OF LAWS; IGNORANCE OF THE LAW EXCUSES NO ONE FROM COMPLIANCE THEREWITH; APPLICABLE WITH EQUAL FORCE AND EFFECT ON TAX CASES; CASE AT BAR. The petitioner cannot be serious when he argues that the first assessment was invalid because the foreign lawyers who filed the return on which it was based were not familiar with our tax laws and procedure. Is the petitioner suggesting that they are excused from compliance therewith because of their ignorance? If our own lawyers and taxpayers cannot claim a similar preference because they are not allowed to claim a like ignorance, it stands to reason that foreigners cannot be any less bound by our own laws in our own country. A more obvious and shallow discrimination than that suggested by the petitioner is indeed difficult to find. 3. REMEDIAL LAW; SPECIAL CIVIL ACTION; CERTIORARI; ISSUES WHICH HAD ATTAINED FINALITY CAN NO LONGER BE RAISED ANEW ON APPEAL; CASE AT BAR. In view of the finality of the first assessment, the petitioner cannot now raise the question of its validity before this Court any more than he could have done so before the Court of Tax Appeals. What the estate of the decedent should have done earlier, following the denial of its protest on July 7, 1978, was to appeal to the Court of Tax Appeals within the reglementary period of 30 days after it received notice of said denial. It was in such appeal that the petitioner could then have raised the first two issues he now raises without basis in the present petition. DECISION CRUZ, J p: What the petitioner presents as a rather complicated problem is in reality a very simple question from the viewpoint of the Solicitor General. We agree with the latter. There is actually only one issue to be resolved in this action. That issue is whether or not the respondent Court of Tax Appeals erred in dismissing the petitioner's appeal on grounds of jurisdiction and lack of a cause of action. Appeal from what? That indeed is the question. But first the facts. On March 14, 1976, Warren Taylor Graham, an American national formerly resident in the Philippines, died in Oregon, U.S.A. 1 As he left certain shares of stock in the Philippines, his son, Ward Graham, filed an estate tax return on September 16, 1976, with the Philippine Revenue Representative in San Francisco, U.S.A. 2 On the basis of this return, the respondent Commissioner of Internal Revenue assessed the decedent's estate an estate tax in the amount of P96,509.35 on February 9, 1978. 3 This assessment was protested on March 7, 1978, by the law firm of Bump, Young and Walker on behalf of the estate. 4 The protest was denied by the Commissioner on July 7, 1978. 5 No further action was taken by the estate in pursuit of that protest. cdll Meanwhile, on January 18, 1977, the decedent's will had been admitted to probate in the Circuit Court of Oregon. 6 Ward Graham, the designated executor, then appointed Ildefonso Elegado, the herein petitioner, as his attorney-in-fact for the allowance of the will in the Philippines. 7

Pursuant to such authority, the petitioner commenced probate proceedings in the Court of First Instance of Rizal. 8 The will was allowed on December 18, 1978, with the petitioner as ancillary administrator. 9 As such, he filed a second estate tax return with the Bureau of Internal Revenue on June 4, 1980. 10 On the basis of this second return, the Commissioner imposed an assessment on the estate in the amount of P72,948.87. 11 This was protested on behalf of the estate by the Agrava, Lucero and Gineta Law Office on August 13, 1980. 12 While this protest was pending, the Commissioner filed in the probate proceedings a motion for the allowance of the basic estate tax of P96,509.35 as assessed on February 9, 1978. 13 He said that this liability had not yet been paid although the assessment had long become final and executory. The petitioner regarded this motion as an implied denial of the protest filed on August 13, 1980, against the second assessment of P72,948.87. 14 On this understanding, he filed on September 15, 1981, a petition for review with the Court of Tax Appeals challenging the said assessment. 15 The Commissioner did not immediately answer (in fact, as the petitioner stressed, no answer was filed during a delay of 195 days) and in the end instead cancelled the protested assessment in a letter to the decedent's estate dated March 31, 1982. 16 This cancellation was notified to the Court of Tax Appeals in a motion to dismiss on the ground that the protest had become moot and academic. 17 The motion was granted and the petition dismissed on April 25, 1984. 18 The petitioner then came to this Court on certiorari under Rule 45 of the Rules of Court. The petitioner raises three basic questions, to wit, (1) whether the shares of stocks left by the decedent should be treated as his exclusive, and not conjugal, property; (2) whether the said stocks should be assessed as of the time of the owner's death or six months thereafter; and (3) whether the appeal filed with the respondent court should be considered moot and academic. We deal first with the third issue as it is decisive of this case. In the letter to the decedent's estate dated March 31, 1982, the Commissioner of Internal Revenue wrote as follows: Estate of WARREN T. GRAHAM c/o Mr. ILDEFONSO O. ELEGADO Ancillary Administrator Philex Building cor. Brixton & Fairlane Sts. Pasig, Metro Manila Sir: This is with regard to the estate of the late WARREN TAYLOR GRAHAM, who died a resident of Oregon, U.S.A. on March 14, 1976. It appears that two (2) letters of demand were issued by this Bureau. One is for the amount of P96,509.35 based on the first return filed, and the other in the amount of P72,948.87, based on the second return filed. It appears that the first assessment of P96,509.35 was issued on February 9, 1978 on the basis of the estate tax return filed on September 16, 1976. The said assessment was, however, protested in a letter dated March 7, 1978 but was denied on July 7, 1978. Since no appeal was made within the regulatory period, the same has become final. In view thereof, it is requested that you settle the aforesaid assessment for P96,509.35 within fifteen (15) days upon receipt thereof to the Receivable Accounts Division, this Bureau, BIR National Office Building, Diliman, Quezon City. The assessment for P72,949.57 dated July 3, 1980, referred to above is hereby cancelled. Very truly yours,

(SGD.) RUBEN B. ANCHETA Acting Commissioner 19 It is obvious from the express cancellation of the second assessment for P72,948.87 that the petitioner had been deprived of a cause of action as it was precisely from this assessment that he was appealing. In its decision, the Court of Tax Appeals said that the petition questioning the assessment of July 3, 1980, was "premature" since the protest to the assessment had not yet been resolved. 20 As a matter of fact it had: the said assessment had been cancelled by virtue of the above-quoted letter. The respondent court was on surer ground, however, when it followed with the finding that the said cancellation had rendered the petition moot and academic. There was really no more assessment to review. cdphil The petitioner argues that the issuance of the second assessment on July 3, 1980, had the effect of canceling the first assessment of February 9, 1978, and that the subsequent cancellation of the second assessment did not have the effect of automatically reviving the first. Moreover, the first assessment is not binding on him because it was based on a return filed by foreign lawyers who had no knowledge of our tax laws or access to the Court of Tax Appeals. The petitioner is clutching at straws. It is noted that in the letter of July 3, 1980, imposing the second assessment of P72,948.87, the Commissioner made it clear that "the aforesaid amount is considered provisional only based on the estate tax return filed subject to investigation by this Office for final determination of the correct estate tax due from the estate. Any amount that may be found due after said investigation will be assessed and collected later. 21 It is illogical to suggest that a provisional assessment can supersede an earlier assessment which had clearly become final and executory. The second contention is no less flimsy. The petitioner cannot be serious when he argues that the first assessment was invalid because the foreign lawyers who filed the return on which it was based were not familiar with our tax laws and procedure. Is the petitioner suggesting that they are excused from compliance therewith because of their ignorance? If our own lawyers and taxpayers cannot claim a similar preference because they are not allowed to claim a like ignorance, it stands to reason that foreigners cannot be any less bound by our own laws in our own country. A more obvious and shallow discrimination than that suggested by the petitioner is indeed difficult to find. But the most compelling consideration in this case is the fact that the first assessment is already final and executory and can no longer be questioned at this late hour. The assessment was made on February 9, 1978. It was protested on March 7, 1978. The protest was denied on July 7, 1978. As no further action was taken thereon by the decedent's estate, there is no question that the assessment has become final and executory. In fact, the law firm that had lodged the protest appears to have accepted its denial. In his motion with the probate court, the respondent Commissioner stressed that "in a letter dated January 29, 1980, the Estate of Warren Taylor Graham thru the aforesaid foreign law firm informed claimant that they have paid said tax liability thru the Agrava, Velarde, Lucero and Puno, Philippine law firm of 313 Buendia Avenue Ext., Makati, Metro Manila that initiated the instant ancillary proceedings" although he added that such payment had not yet been received. 22 This letter was an acknowledgment by the estate of the validity and finality of the first assessment. Significantly, it has not been denied by the petitioner. llcd In view of the finality of the first assessment, the petitioner cannot now raise the question of its validity before this Court any more than he could have done so before the Court of Tax Appeals. What the estate of the decedent should have done earlier, following the denial of its protest on July 7, 1978, was to appeal to the Court of Tax Appeals within the reglementary period of 30 days after it received notice of said denial. It was in such appeal that the petitioner could then have raised the first two issues he now raises without basis in the present petition. The question of whether or not the shares of stock left by the decedent should be considered conjugal property or belonging to him alone is immaterial in these proceedings. So too is the time at which the assessment of these shares of stock should have been made by the BIR. These questions were not resolved by the Court of Tax Appeals because it had no jurisdiction to

act on the petitioner's appeal from an assessment that had already been cancelled. The assessment being no longer controversial or renewable, there was no justification for the respondent court to rule on the petition except to dismiss it. If indeed the Commissioner of Internal Revenue committed an error in the computation of the estate tax, as the petitioner insists, that error can no longer be rectified because the original assessment has long become final and executory. If that assessment was not challenged on time and in accordance with the prescribed procedure, that error for error it was was committed not by the respondents but by the decedent's estate itself which the petitioner represents. So how can he now complain? WHEREFORE, the petition is DENIED, with costs against the petitioner. It is so ordered. Narvasa, Grio-Aquino and Medialdea, JJ., concur. Gancayco, J., is on leave.

EN BANC [G.R. No. 180236. January 17, 2012.] GEMMA P. CABALIT, petitioner, vs. COMMISSION ON AUDIT-REGION VII, respondent. [G.R. No. 180341. January 17, 2012.] FILADELFO S. APIT, petitioner, vs. COMMISSION ON AUDIT (COA) Legal and Adjudication, Region VII, respondent. [G.R. No. 180342. January 17, 2012.] LEONARDO G. OLAIVAR, in his capacity as Transportation Regulation Officer and Officer-In-Charge of Land Transportation Office, Jagna, Province of Bohol, petitioner, vs. HON. PRIMO C. MIRO, in his official capacity as Deputy Ombudsman for Visayas, EDGARDO G. CANTON, in his capacity as Graft Investigator Officer, ATTY. ROY L. URSAL, in his capacity as Regional Cluster Director, Commission on Audit, Cebu City, respondents. DECISION VILLARAMA, JR., J p: Three employees from the Land Transportation Office (LTO) in Jagna, Bohol were found by the Ombudsman to have perpetrated a scheme to defraud the government of proper motor vehicle registration fees. They now seek in the present consolidated petitions a judgment from this Court annulling the January 18, 2006 Decision 1 and September 21, 2007 Resolution 2 of the Court of Appeals (CA) which affirmed with modification the Decision 3 of the Office of the OmbudsmanVisayas dismissing them from government service. cDAEIH The facts follow: On September 4, 2001, the Philippine Star News, a local newspaper in Cebu City, reported that employees of the LTO in Jagna, Bohol, are shortchanging the government by tampering with their income reports. 4 Accordingly, Regional Director Ildefonso T. Deloria of the Commission on Audit (COA) directed State Auditors Teodocio D. Cabalit and Emmanuel L. Coloma of the Provincial Revenue Audit Group to conduct a fact-finding investigation. A widespread tampering of official receipts of Motor Vehicle Registration during the years 1998, 1999, 2000 and 2001 was then discovered by the investigators. According to the investigators, a total of 106 receipts were tampered. The scheme was done by detaching the Plate Release and Owner's copy from the set of official receipts then typing thereon the correct details corresponding to the vehicle registered, the owner's name and address, and the correct amount of registration fees. The other copies, consisting of the copies for the Collector, EDP, Record, Auditor, and Regional Office, meanwhile, were typed on to make it appear that the receipts were issued mostly for the registration of motorcycles with much lower registration charges. Incorrect names and/or addresses were also used on said file copies. The difference between the amounts paid by the vehicle owners and the amounts appearing on the file copies were then pocketed by the perpetrators, and only the lower amounts appearing on the retained duplicate file copies were reported in the Report of Collections. 5 According to State Auditors Cabalit and Coloma in their Joint-Affidavit, the scheme was perpetrated by LTO employees Leonardo G. Olaivar, Gemma P. Cabalit, Filadelfo S. Apit and Samuel T. Alabat, and resulted in an unreported income totaling P169,642.50. 6 aCTcDH On August 8, 2002, COA Regional Cluster Director Atty. Roy L. Ursal reported the tampering of official receipts to Deputy Ombudsman Primo C. Miro. 7 According to Atty. Ursal, the irregularity is penalized under Article 217, in relation to Article 171 of the Revised Penal Code; 8 Section 3 (e) 9 of the Anti-Graft and Corrupt Practices Act, and likewise violates Republic Act (R.A.) No. 6713. 10 In a Joint Evaluation Report, Graft Investigators Pio R. Dargantes and Virginia Palanca-Santiago found grounds to conduct a preliminary investigation. 11 Hence, a formal charge for dishonesty was filed against Olaivar, Cabalit, Apit and Alabat before the Office of the Ombudsman-Visayas, and the parties were required to submit their counter-affidavits. In compliance, Olaivar, Cabalit, Apit and Alabat submitted separate counter-affidavits, all essentially denying knowledge and responsibility for the anomalies. As to Olaivar, he maintained that the receipts were typed outside his office by regular and

casual employees. He claimed that the receipts were presented to him only for signature and he does not receive the payment when he signs the receipts. 12 Cabalit, for her part, claimed that her duty as cashier was to receive collections turned over to her and to deposit them in the Land Bank of the Philippines in Tagbilaran City. She claimed that she was not even aware of any anomaly in the collection of fees prior to the investigation. 13 As to Apit, he admitted that he countersigned the official receipts, but he too denied being aware of any illegal activity in their office. He claimed that upon being informed of the charge, he verified the photocopies of the tampered receipts and was surprised to find that the signatures above his name were falsified. 14 Alabat, meanwhile, claimed he did not tamper, alter or falsify any public document in the performance of his duties. He insisted that the initial above his name on Official Receipt No. 64056082 was Apit's, while the initial on Official Receipt No. 64056813 was that of Olaivar. 15 TASCEc During the hearing before Graft Investigator Pio R. Dargantes, State Auditor Cabalit testified on the investigation he conducted in the LTO in Jagna, Bohol. He testified that he was furnished with the owner's and duplicate copies of the tampered receipts. Upon comparison of the Owner's copy with the Collector or Record's copy, he noticed that the amounts shown in the original copies were much bigger than those appearing in the file copies. State Auditor Cabalit also declared that the basis for implicating Olaivar is the fact that his signature appears in all the 106 tampered official receipts and he signed as verified correct the Report of Collections, which included the tampered receipts. As to Apit and Cabalit, they are the other signatories of the official receipts. 16 In some official receipts, the Owner's copy is signed by F.S. Apit as Computer Evaluator, G.P. Cabalit as Cashier, and Leonardo Olaivar as District Head, but their signatures do not appear on the file copies. 17 On February 12, 2004, the Office of the Ombudsman-Visayas directed 18 the parties to submit their position papers pursuant to Administrative Order (A.O.) No. 17, dated September 7, 2003, amending the Rules of Procedure of the Office of the Ombudsman. 19 No cross-examination of State Auditor Cabalit was therefore conducted. SIEHcA Complying with the above Order, the COA submitted its position paper on March 18, 2004. Olaivar, Cabalit and Apit, for their part, respectively submitted their position papers on April 29, 2004, March 18, 2004 and March 15, 2004. In its position paper, 20 the COA pointed out that the signatures of Cabalit, Apit and Olaivar were indispensable to the issuance of the receipts. As to Olaivar, the original receipts bear his signature, thereby showing that he approved of the amounts collected for the registration charges. However, when the receipts were reported in the Report of Collections, the data therein were already tampered reflecting a much lesser amount. By affixing his signature on the Report of Collections and thereby attesting that the entries therein were verified by him as correct, he allowed the scheme to be perpetrated. As to Cabalit, the COA pointed out that as cashier, Cabalit's signature on the receipts signified that she received the registration fees. The correct amounts should have therefore appeared in the Report of Collections, but as already stated, lesser amounts appeared on the Report of Collections, which she prepares. In the same manner, Apit, as computer evaluator, also signed the subject receipts allowing the irregularities to be perpetuated. In his position paper, 21 Olaivar meanwhile insisted that he had no participation in the anomalies. He stressed that his only role in the issuance of the official receipts was to review and approve the applications, and that he was the last one to sign the official receipts. He argued that based on the standard procedure for the processing of applications for registration of motor vehicles, it could be deduced that there was a concerted effort or conspiracy among the evaluator, typist and cashier, while he was kept blind of their modus operandi. Cabalit, for her part, questioned the findings of the investigators. She stressed in her position paper 22 that had there been a thorough investigation of the questioned official receipts, the auditors would have discovered that the signatures appearing above her name were actually that of Olaivar. She outlined the standard paper flow of a regular transaction at the LTO. It begins when the registrant goes to the computer evaluator for the computation of applicable fees and proceeds to the cashier for payment. After paying, the typist will prepare the official receipts consisting of seven (7) copies, which will be routed to the computer evaluator, to the district head, and to the cashier for signature. The cashier retains the copies for the EDP, Regional Office, Collector and Auditor, while the remaining copies (Owner, Plate Release and Record's copy) will be forwarded to the Releasing Section for distribution and release. HEScID Cabalit insisted that on several occasions Olaivar disregarded the standard procedure and directly accommodated some registrants who were either his friends or referred to him by friends. For such transactions, Olaivar assumes the functions of computer evaluator, typist and cashier, as he is the one who computes the fees, receives the payment and prepares the official

receipts. Olaivar would then remit the payment to her. As the cashier, she has to accept the payment as a matter of ministerial duty. Apit, meanwhile, stressed in his position paper 23 that the strokes of the signatures appearing above his typewritten name on the official receipts are different, indicating that the same are falsified. He also explained that considering that the LTO in Jagna issues around 20 to 25 receipts a day, he signed the receipts relying on the faith that his co-employees had properly accomplished the forms. He also pointed out that Engr. Dano admitted signing accomplished official receipts when the regular computer encoder is out, which just shows that other personnel could have signed above the name of F.S. Apit. IHAcCS On May 3, 2004, the Office of the Ombudsman-Visayas rendered judgment finding petitioners liable for dishonesty for tampering the official receipts to make it appear that they collected lesser amounts than they actually collected. The OMBVisayas ruled: WHEREFORE, premises considered, it is hereby resolved that the following respondents be found guilty of the administrative infraction of DISHONESTY and accordingly be meted out the penalty of DISMISSAL FROM THE SERVICE with the accessory penalties of cancellation of civil service eligibility, forfeiture of retirement benefits and disqualification from re-employment in the government service: 1. Leonardo G. Olaivar Transportation Regulation Officer II/Office[r]-In-Charge LTO Jagna District Office Jagna, Bohol; 2. 3. Gemma P. Cabalit Cashier II, LTO Jagna District Office Jagna, Bohol; Filadelpo S. Apit Clerk II, LTO Jagna District Office Jagna, Bohol;

The complaint against respondent Samuel T. Alabat, presently the Head of Apprehension Unit of the Tagbilaran City LTO, is hereby DISMISSED for insufficiency of evidence. The complaint regarding the LTO official receipts/MVRRs issued by the LTO Jagna District Office, which are not covered by original copies are hereby DISMISSED without prejudice to the filing of the appropriate charges upon the recovery of the original copies thereof. SO DECIDED. 24 IaHAcT Petitioners sought reconsideration of the decision, but their motions were denied by the Ombudsman. 25 Thus, they separately sought recourse from the CA. On January 18, 2006, the CA promulgated the assailed Decision in CA-G.R. SP. Nos. 86256, 86394 and 00047. The dispositive portion of the CA decision reads, WHEREFORE, premises considered, judgment is hereby rendered by US DISMISSING the instant consolidated petitions. The assailed decision of the Office of the Ombudsman-Visayas dated May 3, 2004 in OMB-V-A-02-0415-H is hereby AFFIRMED with a modification that petitioner Olaivar be held administratively liable for gross neglect of duty which carries the same penalty as provided for dishonesty. No pronouncement as to costs. SO ORDERED. 26 According to the CA, it was unbelievable that from 1998 to 2001, Cabalit and Apit performed vital functions by routinely signing LTO official receipts but did not have any knowledge of the irregularity in their office. With regard to Olaivar, the CA believed that the tampering of the receipts could have been avoided had he exercised the required diligence in the performance of his duties. Thus, the CA held him liable merely for gross neglect of duty. ACTEHI Petitioners sought reconsideration of the CA decision, but the CA denied their motions. 27 Hence, they filed the instant petitions before the Court.

In her petition, petitioner Cabalit argues that I. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE OMBUDSMAN'S DECISION WHICH GAVE RETROACTIVE EFFECT TO THE NEW ADMINISTRATIVE ORDER NO. 17 IN THE PROCEEDINGS BELOW THAT WAS ALREADY ON TRIAL IN ACCORDANCE WITH ADMINISTRATIVE ORDER NO. 07. II. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT ALTHOUGH THE TRIAL TYPE HEARING UNDER ADMINISTRATIVE ORDER NO. 07 DID NOT PUSH THRU, PETITIONER WAS STILL ACCORDED HER RIGHT TO DUE PROCESS UNDER THE SUMMARY PROCEEDINGS PURSUANT TO ADMINISTRATIVE ORDER NO. 17. III. THE HONORABLE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR WHEN IT AFFIRMED THE DECISION OF RESPONDENT OMBUDSMAN DESPITE HAVING FAILED TO MAKE A CATEGORICAL RULING ON THE ISSUE OF WHETHER THE QUESTIONED AND/OR FORGED SIGNATURES BELONG TO PETITIONER GEMMA CABALIT. IV. THE HONORABLE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR WHEN IT FAILED TO RULE ON THE DOCTRINAL VALUE AND/OR APPLICABILITY OF THE TAPIADOR VS. OFFICE OF THE OMBUDSMAN (G.R. [129124], MARCH 15, 2002) RULING HERE IN THE INSTANT CASE. 28 Meanwhile, Apit interposes the following arguments in his petition: I. ONLY. II. THE COURT OF APPEALS ERRED IN LIMITING ADMINISTRATIVE DUE PROCESS AS AN OPPORTUNITY TO BE HEARD

THE COURT OF APPEALS ERRED IN CONCLUDING THE DEFENSE OF PETITIONER APIT AS MERE DENIAL.

III. THE COURT OF APPEALS ERRED IN ITS FAILURE TO RECONSIDER THE EVIDENCE THAT CLEARLY PROVED THAT THE SIGNATURES ABOVE THE NAME OF PETITIONER APIT IN THE QUESTIONED RECEIPTS ARE ALL FORGED AND FALSIFIED. 29 As for Olaivar, he assails the CA Decision raising the following issues: I. WHETHER THE HONORABLE COURT OF APPEALS ERRED IN FINDING THAT PETITIONER LEONARDO G. OLAIVAR IS ADMINISTRATIVELY LIABLE FOR GROSS NEGLIGENCE. acCETD II. WHETHER THE HONORABLE COURT OF APPEALS ERRED WHEN IT HELD THAT PETITIONER LEONARDO G. OLAIVAR WAS NOT DENIED DUE PROCESS WHEN THE OFFICE OF THE OMBUDSMAN VISAYAS FOUND HIM GUILTY FOR DISHONESTY AND METED OUT THE PENALTY OF DISMISSAL FROM SERVICE. 30 On January 15, 2008, said petitions were consolidated. 31 Essentially, the issues for our resolution are: (1) whether there was a violation of the right to due process when the hearing officer at the Office of the Ombudsman-Visayas adopted the procedure under A.O. No. 17 notwithstanding the fact that the said amendatory order took effect after the hearings had started; and (2) whether Cabalit, Apit and Olaivar are administratively liable. As regards the first issue, petitioners claim that they were denied due process of law when the investigating lawyer proceeded to resolve the case based only on the affidavits and other evidence on record without conducting a formal hearing. They lament that the case was submitted for decision without giving them opportunity to present witnesses and cross-examine the witnesses against them. Petitioner Cabalit also argues that the Office of the Ombudsman erred in applying the amendments under A.O. No. 17 to the trial of the case, which was already in progress under the old procedures under A.O. No. 07. She stressed that under A.O. No. 07, she had the right to choose whether to avail of a formal investigation or to submit the case for resolution on the basis of the evidence on record. Here, she was not given such option and was merely required to submit her position paper. Petitioners' arguments deserve scant consideration.

Suffice to say, petitioners were not denied due process of law when the investigating lawyer proceeded to resolve the case based on the affidavits and other evidence on record. Section 5 (b) (1) 32 Rule 3, of the Rules of Procedure of the Office of the Ombudsman, as amended by A.O. No. 17, plainly provides that the hearing officer may issue an order directing the parties to file, within ten days from receipt of the order, their respective verified position papers on the basis of which, along with the attachments thereto, the hearing officer may consider the case submitted for decision. It is only when the hearing officer determines that based on the evidence, there is a need to conduct clarificatory hearings or formal investigations under Section 5 (b) (2) and Section 5 (b) (3) that such further proceedings will be conducted. But the determination of the necessity for further proceedings rests on the sound discretion of the hearing officer. As the petitioners have utterly failed to show any cogent reason why the hearing officer's determination should be overturned, the determination will not be disturbed by this Court. We likewise find no merit in their contention that the new procedures under A.O. No. 17, which took effect while the case was already undergoing trial before the hearing officer, should not have been applied. SCEHaD The rule in this jurisdiction is that one does not have a vested right in procedural rules. In Tan, Jr. v. Court of Appeals, 33 the Court elucidated: Statutes regulating the procedure of the courts will be construed as applicable to actions pending and undetermined at the time of their passage. Procedural laws are retroactive in that sense and to that extent. The fact that procedural statutes may somehow affect the litigants' rights may not preclude their retroactive application to pending actions. The retroactive application of procedural laws is not violative of any right of a person who may feel that he is adversely affected. Nor is the retroactive application of procedural statutes constitutionally objectionable. The reason is that as a general rule no vested right may attach to, nor arise from, procedural laws. It has been held that "a person has no vested right in any particular remedy, and a litigant cannot insist on the application to the trial of his case, whether civil or criminal, of any other than the existing rules of procedure. (Emphasis supplied.) While the rule admits of certain exceptions, such as when the statute itself expressly or by necessary implication provides that pending actions are excepted from its operation, or where to apply it would impair vested rights, petitioners failed to show that application of A.O. No. 17 to their case would cause injustice to them. Indeed, in this case, the Office of the Ombudsman afforded petitioners every opportunity to defend themselves by allowing them to submit counter-affidavits, position papers, memoranda and other evidence in their defense. Since petitioners have been afforded the right to be heard and to defend themselves, they cannot rightfully complain that they were denied due process of law. Well to remember, due process, as a constitutional precept, does not always and in all situations require a trial-type proceeding. It is satisfied when a person is notified of the charge against him and given an opportunity to explain or defend himself. In administrative proceedings, the filing of charges and giving reasonable opportunity for the person so charged to answer the accusations against him constitute the minimum requirements of due process. More often, this opportunity is conferred through written pleadings that the parties submit to present their charges and defenses. 34 But as long as a party is given the opportunity to defend his or her interests in due course, said party is not denied due process. 35 Neither is there merit to Cabalit's assertion that she should have been investigated under the "old rules of procedure" of the Office of the Ombudsman, and not under the "new rules." In Marohomsalic v. Cole, 36 we clarified that the Office of the Ombudsman has only one set of rules of procedure and that is A.O. No. 07, series of 1990, as amended. There have been various amendments made thereto but it has remained, to date, the only set of rules of procedure governing cases filed in the Office of the Ombudsman. Hence, the phrase "as amended" is correctly appended to A.O. No. 7 every time it is invoked. A.O. No. 17 is just one example of these amendments. But did the CA correctly rule that petitioners Cabalit and Apit are liable for dishonesty while petitioner Olaivar is liable for gross neglect of duty? Cabalit argues that the CA erred in affirming the decision of the Ombudsman finding her liable for dishonesty. She asserts that it was not established by substantial evidence that the forged signatures belong to her. Meanwhile, Apit contends that the CA erred in not considering evidence which proves that the signatures appearing above his name are falsified. However, we note that both Cabalit and Apit raise essentially factual issues which are not proper in petitions filed under Rule 45. Settled jurisprudence dictates that subject to a few exceptions, only questions of law may be brought before the Court via a petition for review on certiorari. In Diokno v. Cacdac, 37 the Court held: IEAaST

. . . [T]he scope of this Court's judicial review of decisions of the Court of Appeals is generally confined only to errors of law, and questions of fact are not entertained. We elucidated on our fidelity to this rule, and we said: Thus, only questions of law may be brought by the parties and passed upon by this Court in the exercise of its power to review. Also, judicial review by this Court does not extend to a reevaluation of the sufficiency of the evidence upon which the proper . . . tribunal has based its determination. (Emphasis supplied.) It is aphoristic that a re-examination of factual findings cannot be done through a petition for review on certiorari under Rule 45 of the Rules of Court because this Court is not a trier of facts; it reviews only questions of law. The Supreme Court is not duty-bound to analyze and weigh again the evidence considered in the proceedings below. 38 Here, the CA affirmed the findings of fact of the Office of the Ombudsman-Visayas which are supported by substantial evidence such as affidavits of witnesses and copies of the tampered official receipts. 39 The CA found that a perusal of the questioned receipts would easily reveal the discrepancies between the date, name and vehicle in the Owner's or Plate Release copies and the File, Auditor, and Regional Office copies. It upheld the factual findings of the Ombudsman that petitioners Cabalit and Apit tampered with the duplicates of the official receipts to make it appear that they collected a lesser amount. Their participation was found to have been indispensable as the irregularities could not have been committed without their participation. They also concealed the misappropriation of public funds by falsifying the receipts. Now, superior courts are not triers of facts. When the findings of fact of the Ombudsman are supported by substantial evidence, it should be considered as conclusive. 40 This Court recognizes the expertise and independence of the Ombudsman and will avoid interfering with its findings absent a finding of grave abuse of discretion. 41 Hence, being supported by substantial evidence, we find no reason to disturb the factual findings of the Ombudsman which are affirmed by the CA. As for Olaivar, he insists that the CA erred in holding him administratively liable for gross negligence when he relied to a reasonable extent and in good faith on the actions of his subordinates in the preparation of the applications for registration. He questions the appellate court's finding that he failed to exercise the required diligence in the performance of his duties. While as stated above, the general rule is that factual findings of the CA are not reviewable by this Court, we find that Olaivar's case falls in one of the recognized exceptions laid down in jurisprudence since the CA's findings regarding his liability are premised on the supposed absence of evidence but contradicted by the evidence on record. 42 The Office of the Ombudsman-Visayas found Olaivar administratively liable for dishonesty while the CA ruled that he may not be held liable for dishonesty supposedly for lack of sufficient evidence. The CA ruled that there was no substantial evidence to show that Olaivar participated in the scheme, but the tampering of the official receipts could have been avoided had he exercised the required diligence in the performance of his duties as officer-in-charge of the Jagna District Office. Thus, the CA found him liable only for gross neglect of duty. This, however, is clear error on the part of the CA. For one, there is clear evidence that Olaivar was involved in the anomalies. Witness Joselito Taladua categorically declared in his affidavit 43 that he personally paid Olaivar the sum of P2,675 for the renewal of registration of a jeep for which he was issued Official Receipt No. 47699853. Much to his dismay, Taladua later found out that his payment was not reflected correctly in the Report of Collections, and that the vehicle was deemed unregistered for the year 2000. HSCATc More, Cabalit pointed to Olaivar as the person behind the anomaly in the LTO-Jagna District Office. She narrated in her position paper that on several times, Olaivar directly accommodated some registrants and assumed the functions of computer evaluator, typist and cashier, and computed the fees, received payment and prepared the official receipts for those transactions. She also revealed that Olaivar would ask her for unused official receipts and would later return the duplicate copies to her with the cash collections. Later, he would verify the Report of Collections as correct. 44 Likewise, Motor Vehicle Inspector Engr. Lowell A. Dano confirmed that in several instances, he witnessed Olaivar type the data himself in the official receipts even if they have a typist in the office to do the job. Engr. Dano added that after typing, Olaivar personally brought the accomplished official receipts for him (Engr. Dano) to sign. 45 Moreover, Jacinto Jalop, the records officer of the LTO in Jagna, Bohol, illustrated how the official receipts were tampered. He disclosed that the correct charges were typed in the Owner's copy and the Plate Release copy of the official receipts, but a

much lower charge and an incorrect address were indicated in the other copies. He asserted that Olaivar was responsible for tampering the official receipts. 46 Neglect of duty implies only the failure to give proper attention to a task expected of an employee arising from either carelessness or indifference. 47 However, the facts of this case show more than a failure to mind one's task. Rather, they manifest that Olaivar committed acts of dishonesty, which is defined as the concealment or distortion of truth in a matter of fact relevant to one's office or connected with the performance of his duty. It implies a disposition to lie, cheat, deceive, or defraud; untrustworthiness; lack of integrity; lack of honesty, probity, or integrity in principle. 48 Hence, the CA should have found Olaivar liable for dishonesty. But be that as it may, still, the CA correctly imposed the proper penalty upon Olaivar. Under Section 52, Rule IV of the Uniform Rules on Administrative Cases in the Civil Service, dishonesty, like gross neglect of duty, is classified as a grave offense punishable by dismissal even if committed for the first time. 49 Under Section 58, 50 such penalty likewise carries with it the accessory penalties of cancellation of civil service eligibility, forfeiture of retirement benefits and disqualification from reemployment in the government service. EcTDCI One final note. Cabalit contends that pursuant to the obiter in Tapiador v. Office of the Ombudsman, 51 the Office of the Ombudsman can only recommend administrative sanctions and not directly impose them. However, in Office of the Ombudsman v. Masing, 52 this Court has already settled the issue when we ruled that the power of the Ombudsman to determine and impose administrative liability is not merely recommendatory but actually mandatory. We held, We reiterated this ruling in Office of the Ombudsman v. Laja, where we emphasized that "the Ombudsman's order to remove, suspend, demote, fine, censure, or prosecute an officer or employee is not merely advisory or recommendatory but is actually mandatory." Implementation of the order imposing the penalty is, however, to be coursed through the proper officer. Recently, in Office of the Ombudsman v. Court of Appeals, we also held 'While Section 15(3) of RA 6770 states that the Ombudsman has the power to "recommend . . . removal, suspension, demotion . . ." of government officials and employees, the same Section 15(3) also states that the Ombudsman in the alternative may "enforce its disciplinary authority as provided in Section 21" of RA 6770.' (emphasis supplied.) 53 Subsequently, in Ledesma v. Court of Appeals, 54 and Office of the Ombudsman v. Court of Appeals, 55 the Court upheld the Ombudsman's power to impose the penalty of removal, suspension, demotion, fine, censure, or prosecution of a public officer or employee found to be at fault in the exercise of its administrative disciplinary authority. In Office of the Ombudsman v. Court of Appeals, we held that the exercise of such power is well founded in the Constitution and R.A. No. 6770, otherwise known as The Ombudsman Act of 1989, thus: The Court further explained in Ledesma that the mandatory character of the Ombudsman's order imposing a sanction should not be interpreted as usurpation of the authority of the head of office or any officer concerned. This is because the power of the Ombudsman to investigate and prosecute any illegal act or omission of any public official is not an exclusive authority but a shared or concurrent authority in respect of the offense charged. By stating therefore that the Ombudsman "recommends" the action to be taken against an erring officer or employee, the provisions in the Constitution and in Republic Act No. 6770 intended that the implementation of the order be coursed through the proper officer. Consequently in Ledesma, the Court affirmed the appellate court's decision which had, in turn, affirmed an order of the Office of the Ombudsman imposing the penalty of suspension on the erring public official. 56 The duty and privilege of the Ombudsman to act as protector of the people against the illegal and unjust acts of those who are in the public service emanate from no less than the 1987 Constitution. Section 12 of Article XI thereof states: Section 12. The Ombudsman and his Deputies, as protectors of the people, shall act promptly on complaints filed in any form or manner against public officials or employees of the Government, or any subdivision, agency or instrumentality thereof, including government-owned or controlled corporations, and shall, in appropriate cases, notify the complainants of the action taken and the result thereof. In addition, Section 15 (3) of R.A. No. 6770, provides:

SEC. 15. Powers, Functions and Duties. The Office of the Ombudsman shall have the following powers, functions and duties: xxx xxx xxx

(3) Direct the officer concerned to take appropriate action against a public officer or employee at fault or who neglects to perform an act or discharge a duty required by law, and recommend his removal, suspension, demotion, fine, censure, or prosecution, and ensure compliance therewith; or enforce its disciplinary authority as provided in Section 21 of this Act: Provided, That the refusal by any officer without just cause to comply with an order of the Ombudsman to remove, suspend, demote, fine, censure or prosecute an officer or employee who is at fault or who neglects to perform an act or discharge a duty required by law shall be a ground for disciplinary action against said officer. DHcEAa xxx xxx xxx

Section 19 of R.A. No. 6770 grants to the Ombudsman the authority to act on all administrative complaints: SEC. 19. Administrative Complaints. The Ombudsman shall act on all complaints relating, but not limited to acts or omissions which: (1) (2) (3) (4) (5) (6) Are contrary to law or regulation; Are unreasonable, unfair, oppressive or discriminatory; Are inconsistent with the general course of an agency's functions, though in accordance with law; Proceed from a mistake of law or an arbitrary ascertainment of facts; Are in the exercise of discretionary powers but for an improper purpose; or Are otherwise irregular, immoral or devoid of justification.

In the exercise of his duties, the Ombudsman is given full administrative disciplinary authority. His power is not limited merely to receiving, processing complaints, or recommending penalties. He is to conduct investigations, hold hearings, summon witnesses and require production of evidence and place respondents under preventive suspension. This includes the power to impose the penalty of removal, suspension, demotion, fine, or censure of a public officer or employee. 57 The provisions in R.A. No. 6770 taken together reveal the manifest intent of the lawmakers to bestow on the Office of the Ombudsman full administrative disciplinary authority. These provisions cover the entire gamut of administrative adjudication which entails the authority to, inter alia, receive complaints, conduct investigations, hold hearings in accordance with its rules of procedure, summon witnesses and require the production of documents, place under preventive suspension public officers and employees pending an investigation, determine the appropriate penalty imposable on erring public officers or employees as warranted by the evidence, and, necessarily, impose the said penalty. 58 Thus, it is settled that the Office of the Ombudsman can directly impose administrative sanctions. We find it worthy to state at this point that public service requires integrity and discipline. For this reason, public servants must exhibit at all times the highest sense of honesty and dedication to duty. By the very nature of their duties and responsibilities, public officers and employees must faithfully adhere to hold sacred and render inviolate the constitutional principle that a public office is a public trust; and must at all times be accountable to the people, serve them with utmost responsibility, integrity, loyalty and efficiency. 59 WHEREFORE, the petitions for review on certiorari are DENIED. The assailed Decision dated January 18, 2006 and Resolution dated September 21, 2007 of the Court of Appeals in CA-G.R. SP. Nos. 86256, 86394 and 00047 are AFFIRMED with MODIFICATION. Petitioner Leonardo G. Olaivar is held administratively liable for DISHONESTY and meted the penalty of dismissal from the service as well as the accessory penalties inherent to said penalty. With costs against petitioners. AHDacC SO ORDERED.

Corona, C.J., Carpio, Velasco, Jr., Leonardo-de Castro, Peralta, Bersamin, Del Castillo, Abad, Perez, Mendoza, Sereno, Reyes and Perlas-Bernabe, JJ., concur. Brion, J., is on official leave.

SECOND DIVISION [G.R. No. 187512. June 13, 2012.] REPUBLIC OF THE PHILIPPINES, petitioner, vs. YOLANDA CADACIO GRANADA, respondent. DECISION SERENO, J p: This is a Rule 45 Petition seeking the reversal of the Resolutions dated 23 January 2009 1 and 3 April 2009 2 issued by the Court of Appeals (CA), which affirmed the grant by the Regional Trial Court (RTC) of the Petition for Declaration of Presumptive Death of the absent spouse of respondent. TIEHDC In May 1991, respondent Yolanda Cadacio Granada (Yolanda) met Cyrus Granada (Cyrus) at Sumida Electric Philippines, an electronics company in Paraaque where both were then working. The two eventually got married at the Manila City Hall on 3 March 1993. Their marriage resulted in the birth of their son, Cyborg Dean Cadacio Granada. Sometime in May 1994, when Sumida Electric Philippines closed down, Cyrus went to Taiwan to seek employment. Yolanda claimed that from that time, she had not received any communication from her husband, notwithstanding efforts to locate him. Her brother testified that he had asked the relatives of Cyrus regarding the latter's whereabouts, to no avail. After nine (9) years of waiting, Yolanda filed a Petition to have Cyrus declared presumptively dead. The Petition was raffled to Presiding Judge Avelino Demetria of RTC Branch 85, Lipa City, and was docketed as Sp. Proc. No. 2002-0530. On 7 February 2005, the RTC rendered a Decision declaring Cyrus as presumptively dead. ADSTCI On 10 March 2005, petitioner Republic of the Philippines, represented by the Office of the Solicitor General (OSG), filed a Motion for Reconsideration of this Decision. Petitioner argued that Yolanda had failed to exert earnest efforts to locate Cyrus and thus failed to prove her well-founded belief that he was already dead. However, in an Order dated 29 June 2007, the RTC denied the motion. Petitioner filed a Notice of Appeal to elevate the case to the CA, presumably under Rule 41, Section 2 (a) of the Rules of Court. Yolanda filed a Motion to Dismiss on the ground that the CA had no jurisdiction over the appeal. She argued that her Petition for Declaration of Presumptive Death, based on Article 41 of the Family Code, was a summary judicial proceeding, in which the judgment is immediately final and executory and, thus, not appealable. In its 23 January 2009 Resolution, the appellate court granted Yolanda's Motion to Dismiss on the ground of lack of jurisdiction. Citing Republic v. Bermudez-Lorino, 3 the CA ruled that a petition for declaration of presumptive death under Rule 41 of the Family Code is a summary proceeding. Thus, judgment thereon is immediately final and executory upon notice to the parties. TacADE Petitioner moved for reconsideration, but its motion was likewise denied by the CA in a Resolution dated 3 April 2009. 4 Hence, the present Rule 45 Petition. Issues 1. Whether the CA seriously erred in dismissing the Petition on the ground that the Decision of the RTC in a summary proceeding for the declaration of presumptive death is immediately final and executory upon notice to the parties and, hence, is not subject to ordinary appeal 2. Whether the CA seriously erred in affirming the RTC's grant of the Petition for Declaration of Presumptive Death under Article 41 of the Family Code based on the evidence that respondent presented Our Ruling 1. On whether the CA seriously erred

in dismissing the Petition on the ground that the Decision of the RTC in a summary proceeding for the declaration of presumptive death is immediately final and executory upon notice to the parties and, hence, is not subject to ordinary appeal EHSIcT In the assailed Resolution dated 23 January 2009, the CA dismissed the Petition assailing the RTC's grant of the Petition for Declaration of Presumptive Death of the absent spouse under Article 41 of the Family Code. Citing Republic v. BermudezLorino, 5 the appellate court noted that a petition for declaration of presumptive death for the purpose of remarriage is a summary judicial proceeding under the Family Code. Hence, the RTC Decision therein is immediately final and executory upon notice to the parties, by express provision of Article 247 of the same Code. The decision is therefore not subject to ordinary appeal, and the attempt to question it through a Notice of Appeal is unavailing. We affirm the CA ruling. Article 41 of the Family Code provides: Art. 41. A marriage contracted by any person during the subsistence of a previous marriage shall be null and void, unless before the celebration of the subsequent marriage, the prior spouse had been absent for four consecutive years and the spouse present has a well-founded belief that the absent spouse was already dead. In case of disappearance where there is danger of death under the circumstances set forth in the provisions of Article 391 of the Civil Code, an absence of only two years shall be sufficient. TAcDHS For the purpose of contracting the subsequent marriage under the preceding paragraph the spouse present must institute a summary proceeding as provided in this Code for the declaration of presumptive death of the absentee, without prejudice to the effect of reappearance of the absent spouse. (Underscoring supplied.) Clearly, a petition for declaration of presumptive death of an absent spouse for the purpose of contracting a subsequent marriage under Article 41 of the Family Code is a summary proceeding "as provided for" under the Family Code. Further, Title XI of the Family Code is entitled "Summary Judicial Proceedings in the Family Law." Subsumed thereunder are Articles 238 and 247, which provide: Art. 238. Until modified by the Supreme Court, the procedural rules in this Title shall apply in all cases provided for in this Code requiring summary court proceedings. Such cases shall be decided in an expeditious manner without regard to technical rules. AaCTcI xxx xxx xxx

Art. 247. The judgment of the court shall be immediately final and executory. Further, Article 253 of the Family Code reads: ART. 253. The foregoing rules in Chapters 2 and 3 hereof shall likewise govern summary proceedings filed under Articles 41, 51, 69, 73, 96, 124 and 217, insofar as they are applicable. Taken together, Articles 41, 238, 247 and 253 of the Family Code provide that since a petition for declaration of presumptive death is a summary proceeding, the judgment of the court therein shall be immediately final and executory.

In Republic v. Bermudez-Lorino, 6 the Republic likewise appealed the CA's affirmation of the RTC's grant of respondent's Petition for Declaration of Presumptive Death of her absent spouse. The Court therein held that it was an error for the Republic to file a Notice of Appeal when the latter elevated the matter to the CA, to wit: ECSaAc In Summary Judicial Proceedings under the Family Code, there is no reglementary period within which to perfect an appeal, precisely because judgments rendered thereunder, by express provision of Section 247, Family Code, supra, are "immediately final and executory." xxx xxx xxx

But, if only to set the records straight and for the future guidance of the bench and the bar, let it be stated that the RTC's decision dated November 7, 2001, was immediately final and executory upon notice to the parties. It was erroneous for the OSG to file a notice of appeal, and for the RTC to give due course thereto. The Court of Appeals acquired no jurisdiction over the case, and should have dismissed the appeal outright on that ground. Justice (later Chief Justice) Artemio Panganiban, who concurred in the result reached by the Court in Republic v. BermudezLorino, additionally opined that what the OSG should have filed was a petition for certiorari under Rule 65, not a petition for review under Rule 45. HaTDAE In the present case, the Republic argues that Bermudez-Lorino has been superseded by the subsequent Decision of the Court in Republic v. Jomoc, 7 issued a few months later. In Jomoc, the RTC granted respondent's Petition for Declaration of Presumptive Death of her absent husband for the purpose of remarriage. Petitioner Republic appealed the RTC Decision by filing a Notice of Appeal. The trial court disapproved the Notice of Appeal on the ground that, under the Rules of Court, 8 a record on appeal is required to be filed when appealing special proceedings cases. The CA affirmed the RTC ruling. In reversing the CA, this Court clarified that while an action for declaration of death or absence under Rule 72, Section 1 (m), expressly falls under the category of special proceedings, a petition for declaration of presumptive death under Article 41 of the Family Code is a summary proceeding, as provided for by Article 238 of the same Code. Since its purpose was to enable her to contract a subsequent valid marriage, petitioner's action was a summary proceeding based on Article 41 of the Family Code, rather than a special proceeding under Rule 72 of the Rules of Court. Considering that this action was not a special proceeding, petitioner was not required to file a record on appeal when it appealed the RTC Decision to the CA. aTEHCc We do not agree with the Republic's argument that Republic v. Jomoc superseded our ruling in Republic v. Bermudez-Lorino. As observed by the CA, the Supreme Court in Jomoc did not expound on the characteristics of a summary proceeding under the Family Code. In contrast, the Court in Bermudez-Lorino expressly stated that its ruling on the impropriety of an ordinary appeal as a vehicle for questioning the trial court's Decision in a summary proceeding for declaration of presumptive death under Article 41 of the Family Code was intended "to set the records straight and for the future guidance of the bench and the bar." At any rate, four years after Jomoc, this Court settled the rule regarding appeal of judgments rendered in summary proceedings under the Family Code when it ruled in Republic v. Tango: 9 This case presents an opportunity for us to settle the rule on appeal of judgments rendered in summary proceedings under the Family Code and accordingly, refine our previous decisions thereon. IEAHca Article 238 of the Family Code, under Title XI: SUMMARY JUDICIAL PROCEEDINGS IN THE FAMILY LAW, establishes the rules that govern summary court proceedings in the Family Code: ART. 238. Until modified by the Supreme Court, the procedural rules in this Title shall apply in all cases provided for in this Code requiring summary court proceedings. Such cases shall be decided in an expeditious manner without regard to technical rules. In turn, Article 253 of the Family Code specifies the cases covered by the rules in chapters two and three of the same title. It states:

ART. 253. The foregoing rules in Chapters 2 and 3 hereof shall likewise govern summary proceedings filed under Articles 41, 51, 69, 73, 96, 124 and 217, insofar as they are applicable. (Emphasis supplied.) DEICHc In plain text, Article 247 in Chapter 2 of the same title reads: ART 247. The judgment of the court shall be immediately final and executory.

By express provision of law, the judgment of the court in a summary proceeding shall be immediately final and executory. As a matter of course, it follows that no appeal can be had of the trial court's judgment in a summary proceeding for the declaration of presumptive death of an absent spouse under Article 41 of the Family Code. It goes without saying, however, that an aggrieved party may file a petition for certiorari to question abuse of discretion amounting to lack of jurisdiction. Such petition should be filed in the Court of Appeals in accordance with the Doctrine of Hierarchy of Courts. To be sure, even if the Court's original jurisdiction to issue a writ of certiorari is concurrent with the RTCs and the Court of Appeals in certain cases, such concurrence does not sanction an unrestricted freedom of choice of court forum. From the decision of the Court of Appeals, the losing party may then file a petition for review on certiorari under Rule 45 of the Rules of Court with the Supreme Court. This is because the errors which the court may commit in the exercise of jurisdiction are merely errors of judgment which are the proper subject of an appeal. IDASHa In sum, under Article 41 of the Family Code, the losing party in a summary proceeding for the declaration of presumptive death may file a petition for certiorari with the CA on the ground that, in rendering judgment thereon, the trial court committed grave abuse of discretion amounting to lack of jurisdiction. From the decision of the CA, the aggrieved party may elevate the matter to this Court via a petition for review on certiorari under Rule 45 of the Rules of Court. Evidently then, the CA did not commit any error in dismissing the Republic's Notice of Appeal on the ground that the RTC judgment on the Petition for Declaration of Presumptive Death of respondent's spouse was immediately final and executory and, hence, not subject to ordinary appeal. 2. On whether the CA seriously erred

in affirming the RTC's grant of the Petition for Declaration of Presumptive Death under Article 41 of the Family Code based on the evidence that respondent had presented aDCIHE Petitioner also assails the RTC's grant of the Petition for Declaration of Presumptive Death of the absent spouse of respondent on the ground that she had not adduced the evidence required to establish a well-founded belief that her absent spouse was already dead, as expressly required by Article 41 of the Family Code. Petitioner cites Republic v. Nolasco, 10 United States v. Biasbas 11 and Republic v. Court of Appeals and Alegro 12 as authorities on the subject. In Nolasco, petitioner Republic sought the reversal of the CA's affirmation of the RTC's grant of respondent's Petition for Declaration of Presumptive Death of his absent spouse, a British subject who left their home in the Philippines soon after giving birth to their son while respondent was on board a vessel working as a seafarer. Petitioner Republic sought the reversal of the ruling on the ground that respondent was not able to establish his "well-founded belief that the absentee is already dead," as required by Article 41 of the Family Code. In ruling thereon, this Court recognized that this provision imposes more stringent requirements than does Article 83 of the Civil Code. 13 The Civil Code provision merely requires either that there be no news that the absentee is still alive; or that the absentee is generally considered to be dead and is believed to be so by the spouse present, or is presumed dead under Articles 390 and 391 of the Civil Code. In comparison, the Family Code provision prescribes a "well-founded belief" that the absentee is already dead before a petition for declaration of presumptive death can be granted. As noted by the Court in that case, the four requisites for the declaration of presumptive death under the Family Code are as follows: DHcESI

1. That the absent spouse has been missing for four consecutive years, or two consecutive years if the disappearance occurred where there is danger of death under the circumstances laid down in Article 391, Civil Code; 2. 3. 4. That the present spouse wishes to remarry; That the present spouse has a well-founded belief that the absentee is dead; and That the present spouse files a summary proceeding for the declaration of presumptive death of the absentee.

In evaluating whether the present spouse has been able to prove the existence of a "well-founded belief" that the absent spouse is already dead, the Court in Nolasco cited United States v. Biasbas, 14 which it found to be instructive as to the diligence required in searching for a missing spouse. In Biasbas, the Court held that defendant Biasbas failed to exercise due diligence in ascertaining the whereabouts of his first wife, considering his admission that that he only had a suspicion that she was dead, and that the only basis of that suspicion was the fact of her absence. TCaADS Similarly, in Republic v. Court of Appeals and Alegro, petitioner Republic sought the reversal of the CA ruling affirming the RTC's grant of the Petition for Declaration of Presumptive Death of the absent spouse on the ground that the respondent therein had not been able to prove a "well-founded belief" that his spouse was already dead. The Court reversed the CA, granted the Petition, and provided the following criteria for determining the existence of a "well-founded belief" under Article 41 of the Family Code: For the purpose of contracting the subsequent marriage under the preceding paragraph, the spouse present must institute a summary proceeding as provided in this Code for the declaration of presumptive death of the absentee, without prejudice to the effect of reappearance of the absent spouse. The spouse present is, thus, burdened to prove that his spouse has been absent and that he has a well-founded belief that the absent spouse is already dead before the present spouse may contract a subsequent marriage. The law does not define what is meant by a well-grounded belief. Cuello Callon writes that "es menester que su creencia sea firme se funde en motivos racionales." TAHIED Belief is a state of the mind or condition prompting the doing of an overt act. It may be proved by direct evidence or circumstantial evidence which may tend, even in a slight degree, to elucidate the inquiry or assist to a determination probably founded in truth. Any fact or circumstance relating to the character, habits, conditions, attachments, prosperity and objects of life which usually control the conduct of men, and are the motives of their actions, was, so far as it tends to explain or characterize their disappearance or throw light on their intentions, competence [sic] evidence on the ultimate question of his death. The belief of the present spouse must be the result of proper and honest to goodness inquiries and efforts to ascertain the whereabouts of the absent spouse and whether the absent spouse is still alive or is already dead. Whether or not the spouse present acted on a well-founded belief of death of the absent spouse depends upon the inquiries to be drawn from a great many circumstances occurring before and after the disappearance of the absent spouse and the nature and extent of the inquiries made by present spouse. (Footnotes omitted, underscoring supplied.) aCITEH Applying the foregoing standards to the present case, petitioner points out that respondent Yolanda did not initiate a diligent search to locate her absent husband. While her brother Diosdado Cadacio testified to having inquired about the whereabouts of Cyrus from the latter's relatives, these relatives were not presented to corroborate Diosdado's testimony. In short, respondent was allegedly not diligent in her search for her husband. Petitioner argues that if she were, she would have sought information from the Taiwanese Consular Office or assistance from other government agencies in Taiwan or the Philippines. She could have also utilized mass media for this end, but she did not. Worse, she failed to explain these omissions. The Republic's arguments are well-taken. Nevertheless, we are constrained to deny the Petition. The RTC ruling on the issue of whether respondent was able to prove her "well-founded belief" that her absent spouse was already dead prior to her filing of the Petition to declare him presumptively dead is already final and can no longer be

modified or reversed. Indeed, "[n]othing is more settled in law than that when a judgment becomes final and executory, it becomes immutable and unalterable. The same may no longer be modified in any respect, even if the modification is meant to correct what is perceived to be an erroneous conclusion of fact or law." 15 DSAICa WHEREFORE, premises considered, the assailed Resolutions of the Court of Appeals dated 23 January 2009 and 3 April 2009 in CA-G.R. CV No. 90165 are AFFIRMED. SO ORDERED.

SECOND DIVISION [G.R. No. 190102. July 11, 2012.] ACCENTURE, INC., petitioner, vs. COMMISSIONER OF INTERNAL REVENUE, respondent. DECISION SERENO, J p: This is a Petition filed under Rule 45 of the 1997 Rules of Civil Procedure, praying for the reversal of the Decision of the Court of Tax Appeals En Banc (CTA En Banc) dated 22 September 2009 and its subsequent Resolution dated 23 October 2009. 1 IASTDE Accenture, Inc. (Accenture) is a corporation engaged in the business of providing management consulting, business strategies development, and selling and/or licensing of software. 2 It is duly registered with the Bureau of Internal Revenue (BIR) as a Value Added Tax (VAT) taxpayer or enterprise in accordance with Section 236 of the National Internal Revenue Code (Tax Code). 3 On 9 August 2002, Accenture filed its Monthly VAT Return for the period 1 July 2002 to 31 August 2002 (1st period). Its Quarterly VAT Return for the fourth quarter of 2002, which covers the 1st period, was filed on 17 September 2002; and an Amended Quarterly VAT Return, on 21 June 2004. 4 The following are reflected in Accenture's VAT Return for the fourth quarter of 2002: 5 Purchases Amount Input VAT 12,312,722.00 64,789,507.90 P1,231,272.20 6,478,950.79

Domestic Purchases Capital Goods Domestic Purchases Goods other than capital Goods Domestic Purchases Services Total Input Tax Zero-rated Sales Total Sales P9,355,809.80 P316,113,513.34 P335,640,544.74

16,455,868.10

1,645,586.81

Accenture filed its Monthly VAT Return for the month of September 2002 on 24 October 2002; and that for October 2002, on 12 November 2002. These returns were amended on 9 January 2003. Accenture's Quarterly VAT Return for the first quarter of 2003, which included the period 1 September 2002 to 30 November 2002 (2nd period), was filed on 17 December 2002; and the Amended Quarterly VAT Return, on 18 June 2004. The latter contains the following information: 6 IcCATD Purchases Amount Input VAT 80,765,294.10 P8,076,529.41

Domestic Purchases Capital Goods Domestic Purchases Goods other than capital Goods Domestic Purchases Services

132,820,541.70 13,282,054.17

63,238,758.00

6,323,875.80

Total Input Tax Zero-rated Sales Total Sales

P27,682,459.38 P545,686,639.18 P572,880,982.68

The monthly and quarterly VAT returns of Accenture show that, notwithstanding its application of the input VAT credits earned from its zero-rated transactions against its output VAT liabilities, it still had excess or unutilized input VAT credits. These VAT credits are in the amounts of P9,355,809.80 for the 1st period and P27,682,459.38 for the 2nd period, or a total of P37,038,269.18. 7 Out of the P37,038,269.18, only P35,178,844.21 pertained to the allocated input VAT on Accenture's "domestic purchases of taxable goods which cannot be directly attributed to its zero-rated sale of services." 8 This allocated input VAT was broken down to P8,811,301.66 for the 1st period and P26,367,542.55 for the 2nd period. 9 The excess input VAT was not applied to any output VAT that Accenture was liable for in the same quarter when the amount was earned or to any of the succeeding quarters. Instead, it was carried forward to petitioner's 2nd Quarterly VAT Return for 2003. 10 Thus, on 1 July 2004, Accenture filed with the Department of Finance (DoF) an administrative claim for the refund or the issuance of a Tax Credit Certificate (TCC). The DoF did not act on the claim of Accenture. Hence, on 31 August 2004, the latter filed a Petition for Review with the First Division of the Court of Tax Appeals (Division), praying for the issuance of a TCC in its favor in the amount of P35,178,844.21. DaScCH The Commissioner of Internal Revenue (CIR), in its Answer, 11 argued thus: 1. The sale by Accenture of goods and services to its clients are not zero-rated transactions.

2. Claims for refund are construed strictly against the claimant, and Accenture has failed to prove that it is entitled to a refund, because its claim has not been fully substantiated or documented. In a 13 November 2008 Decision, 12 the Division denied the Petition of Accenture for failing to prove that the latter's sale of services to the alleged foreign clients qualified for zero percent VAT. 13 In resolving the sole issue of whether or not Accenture was entitled to a refund or an issuance of a TCC in the amount of P35,178,844.21, 14 the Division ruled that Accenture had failed to present evidence to prove that the foreign clients to which the former rendered services did business outside the Philippines. 15 Ruling that Accenture's services would qualify for zerorating under the 1997 National Internal Revenue Code of the Philippines (Tax Code) only if the recipient of the services was doing business outside of the Philippines, 16 the Division cited Commissioner of Internal Revenue v. Burmeister and Wain Scandinavian Contractor Mindanao, Inc. (Burmeister) 17 as basis. Accenture appealed the Division's Decision through a Motion for Reconsideration (MR). 18 In its MR, it argued that the reliance of the Division on Burmeister was misplaced 19 for the following reasons: TcDIaA 1. The issue involved in Burmeister was the entitlement of the applicant to a refund, given that the recipient of its service was doing business in the Philippines; it was not an issue of failure of the applicant to present evidence to prove the fact that the recipient of its services was a foreign corporation doing business outside the Philippines. 20 2. Burmeister emphasized that, to qualify for zero-rating, the recipient of the services should be doing business outside the Philippines, and Accenture had successfully established that. 21 3. Having been promulgated on 22 January 2007 or after Accenture filed its Petition with the Division, Burmeister cannot be made to apply to this case. 22 Accenture also cited Commissioner of Internal Revenue v. American Express (Amex) 23 in support of its position. The MR was denied by the Division in its 12 March 2009 Resolution. 24

Accenture appealed to the CTA En Banc. There it argued that prior to the amendment introduced by Republic Act No. (R.A.) 9337, 25 there was no requirement that the services must be rendered to a person engaged in business conducted outside the Philippines to qualify for zero-rating. The CTA En Banc agreed that because the case pertained to the third and the fourth quarters of taxable year 2002, the applicable law was the 1997 Tax Code, and not R.A. 9337. 26 Still, it ruled that even though the provision used in Burmeister was Section 102 (b) (2) of the earlier 1977 Tax Code, the pronouncement therein requiring recipients of services to be engaged in business outside the Philippines to qualify for zero-rating was applicable to the case at bar, because Section 108 (B) (2) of the 1997 Tax Code was a mere reenactment of Section 102 (b) (2) of the 1977 Tax Code. The CTA En Banc concluded that Accenture failed to discharge the burden of proving the latter's allegation that its clients were foreign-based. 27 Resolute, Accenture filed a Petition for Review with the CTA En Banc, but the latter affirmed the Division's Decision and Resolution. 28 A subsequent MR was also denied in a Resolution dated 23 October 2009. TcDAHS Hence, the present Petition for Review 29 under Rule 45. In a Joint Stipulation of Facts and Issues, the parties and the Division have agreed to submit the following issues for resolution: 1. Whether or not Petitioner's sales of goods and services are zero-rated for VAT purposes under Section 108(B)(2)(3) of the 1997 Tax Code. 2. Whether or not petitioner's claim for refund/tax credit in the amount of P35,178,884.21 represents unutilized input VAT paid on its domestic purchases of goods and services for the period commencing from 1 July 2002 until 30 November 2002. 3. Whether or not Petitioner has carried over to the succeeding taxable quarter(s) or year(s) the alleged unutilized input VAT paid on its domestic purchases of goods and services for the period commencing from 1 July 2002 until 30 November 2002, and applied the same fully to its output VAT liability for the said period. 4. Whether or not Petitioner is entitled to the refund of the amount of P35,178,884.21, representing the unutilized input VAT on domestic purchases of goods and services for the period commencing from 1 July 2002 until 30 November 2002, from its sales of services to various foreign clients. 5. Whether or not Petitioner's claim for refund/tax credit in the amount of P35,178,884.21, as alleged unutilized input VAT on domestic purchases of goods and services for the period covering 1 July 2002 until 30 November 2002 are duly substantiated by proper documents. 30 AcHEaS For consideration in the present Petition are the following issues: 1. Should the recipient of the services be "doing business outside the Philippines" for the transaction to be zero-rated under Section 108 (B) (2) of the 1997 Tax Code? 2. Has Accenture successfully proven that its clients are entities doing business outside the Philippines?

Recipient of services must be doing business outside the Philippines for the transactions to qualify as zerorated. Accenture anchors its refund claim on Section 112 (A) of the 1997 Tax Code, which allows the refund of unutilized input VAT earned from zero-rated or effectively zero-rated sales. The provision reads: SEC. 112. Refunds or Tax Credits of Input Tax.

(A) Zero-Rated or Effectively Zero-Rated Sales. Any VAT-registered person, whose sales are zero-rated or effectively zero-rated may, within two (2) years after the close of the taxable quarter when the sales were made, apply for the issuance of a tax credit certificate or refund of creditable input tax due or paid attributable to such sales, except transitional input tax, to the extent that such input tax has not been applied against output tax: Provided, however, That in the case of zero-rated sales under Section 106(A)(2)(a)(1), (2) and (B) and Section 108 (B)(1) and (2), the acceptable foreign currency exchange proceeds thereof had been duly accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP): Provided, further, That where the taxpayer is engaged in zero-rated or effectively zero-rated sale and also in taxable or exempt sale of goods of properties or services, and the amount of creditable input tax due or paid cannot be directly and entirely attributed to any one of the transactions, it shall be allocated proportionately on the basis of the volume of sales. IEHaSc Section 108 (B) referred to in the foregoing provision was first seen when Presidential Decree No. (P.D.) 1994 31 amended Title IV of P.D. 1158, 32 which is also known as the National Internal Revenue Code of 1977. Several Decisions have referred to this as the 1986 Tax Code, even though it merely amended Title IV of the 1977 Tax Code. Two years thereafter, or on 1 January 1988, Executive Order No. (E.O.) 273 33 further amended provisions of Title IV. E.O. 273 by transferring the old Title IV provisions to Title VI and filling in the former title with new provisions that imposed a VAT. The VAT system introduced in E.O. 273 was restructured through Republic Act No. (R.A.) 7716. 34 This law, which was approved on 5 May 1994, widened the tax base. Section 3 thereof reads: SECTION 3. Section 102 of the National Internal Revenue Code, as amended, is hereby further amended to read as follows: CAaSED "SEC. 102. xxx xxx Value-added tax on sale of services and use or lease of properties. . . . xxx

"(b) Transactions subject to zero-rate. The following services performed in the Philippines by VAT-registered persons shall be subject to 0%: "(1) Processing, manufacturing or repacking goods for other persons doing business outside the Philippines which goods are subsequently exported, where the services are paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP). "(2) Services other than those mentioned in the preceding sub-paragraph, the consideration for which is paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP)." Essentially, Section 102 (b) of the 1977 Tax Code as amended by P.D. 1994, E.O. 273, and R.A. 7716 provides that if the consideration for the services provided by a VAT-registered person is in a foreign currency, then this transaction shall be subjected to zero percent rate. The 1997 Tax Code reproduced Section 102 (b) of the 1977 Tax Code in its Section 108 (B), to wit: (B) Transactions Subject to Zero Percent (0%) Rate. The following services performed in the Philippines by VATregistered persons shall be subject to zero percent (0%) rate. IEaCDH (1) Processing, manufacturing or repacking goods for other persons doing business outside the Philippines which goods are subsequently exported, where the services are paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP); (2) Services other than those mentioned in the preceding paragraph, the consideration for which is paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP); . . . . On 1 November 2005, Section 6 of R.A. 9337, which amended the foregoing provision, became effective. It reads:

SEC. 6. Section 108 of the same Code, as amended, is hereby further amended to read as follows: "SEC. 108. Value-added Tax on Sale of Services and Use or Lease of Properties.

(B) Transactions Subject to Zero Percent (0%) Rate. The following services performed in the Philippines by VATregistered persons shall be subject to zero percent (0%) rate: (1) Processing, manufacturing or repacking goods for other persons doing business outside the Philippines which goods are subsequently exported, where the services are paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP); "(2) Services other than those mentioned in the preceding paragraph rendered to a person engaged in business conducted outside the Philippines or to a nonresident person not engaged in business who is outside the Philippines when the services are performed, the consideration for which is paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP); . . . ." (Emphasis supplied) ACcTDS The meat of Accenture's argument is that nowhere does Section 108 (B) of the 1997 Tax Code state that services, to be zerorated, should be rendered to clients doing business outside the Philippines, the requirement introduced by R.A. 9337. 35 Required by Section 108 (B), prior to the amendment, is that the consideration for the services rendered be in foreign currency and in accordance with the rules of the Bangko Sentral ng Pilipinas (BSP). Since Accenture has complied with all the conditions imposed in Section 108 (B), it is entitled to the refund prayed for. In support of its claim, Accenture cites Amex, in which this Court supposedly ruled that Section 108 (B) reveals a clear intent on the part of the legislators not to impose the condition of being "consumed abroad" in order for the services performed in the Philippines to be zero-rated. 36 The Division ruled that this Court, in Amex and Burmeister, did not declare that the requirement that the client must be doing business outside the Philippines can be disregarded, because this requirement is expressly provided in Article 108 (2) of the Tax Code. 37 ITScAE Accenture questions the Division's application to this case of the pronouncements made in Burmeister. According to petitioner, the provision applied to the present case was Section 102 (b) of the 1977 Tax Code, and not Section 108 (B) of the 1997 Tax Code, which was the law effective when the subject transactions were entered into and a refund was applied for. In refuting Accenture's theory, the CTA En Banc ruled that since Section 108 (B) of the 1997 Tax Code was a mere reproduction of Section 102 (b) of the 1977 Tax Code, this Court's interpretation of the latter may be used in interpreting the former, viz.: In the Burmeister case, the Supreme Court harmonized both Sections 102(b)(1) and 102(b)(2) of the 1977 Tax Code, as amended, pertaining to zero-rated transactions. A parallel approach should be accorded to the renumbered provisions of Sections 108(B)(2) and 108(B)(1) of the 1997 NIRC. This means that Section 108(B)(2) must be read in conjunction with Section 108(B)(1). Section 108(B)(2) requires as follows: a) services other than processing, manufacturing or repacking rendered by VAT registered persons in the Philippines; and b) the transaction paid for in acceptable foreign currency duly accounted for in accordance with BSP rules and regulations. The same provision made reference to Section 108(B)(1) further imposing the requisite c) that the recipient of services must be performing business outside of Philippines. Otherwise, if both the provider and recipient of service are doing business in the Philippines, the sale transaction is subject to regular VAT as explained in the Burmeister case . . . . TDCcAE xxx xxx xxx

Clearly, the Supreme Court's pronouncements in the Burmeister case requiring that the recipient of the services must be doing business outside the Philippines as mandated by law govern the instant case. 38 Assuming that the foregoing is true, Accenture still argues that the tax appeals courts cannot be allowed to apply to Burmeister this Court's interpretation of Section 102 (b) of the 1977 Tax Code, because the Petition of Accenture had already been filed before the case was even promulgated on 22 January 2007, 39 to wit:

. . . . While the Burmeister case forms part of the legal system and assumes the same authority as the statute itself, however, the same cannot be applied retroactively against the Petitioner because to do so will be prejudicial to the latter. 40 The CTA en banc is of the opinion that Accenture cannot invoke the non-retroactivity of the rulings of the Supreme Court, whose interpretation of the law is part of that law as of the date of its enactment. 41 We rule that the recipient of the service must be doing business outside the Philippines for the transaction to qualify for zerorating under Section 108 (B) of the Tax Code. DIECTc This Court upholds the position of the CTA en banc that, because Section 108 (B) of the 1997 Tax Code is a verbatim copy of Section 102 (b) of the 1977 Tax Code, any interpretation of the latter holds true for the former. Moreover, even though Accenture's Petition was filed before Burmeister was promulgated, the pronouncements made in that case may be applied to the present one without violating the rule against retroactive application. When this Court decides a case, it does not pass a new law, but merely interprets a preexisting one. 42 When this Court interpreted Section 102 (b) of the 1977 Tax Code in Burmeister, this interpretation became part of the law from the moment it became effective. It is elementary that the interpretation of a law by this Court constitutes part of that law from the date it was originally passed, since this Court's construction merely establishes the contemporaneous legislative intent that the interpreted law carried into effect. 43 HCTaAS Accenture questions the CTA's application of Burmeister, because the provision interpreted therein was Section 102 (b) of the 1977 Tax Code. In support of its position that Section 108 of the 1997 Tax Code does not require that the services be rendered to an entity doing business outside the Philippines, Accenture invokes this Court's pronouncements in Amex. However, a reading of that case will readily reveal that the provision applied was Section 102 (b) of the 1977 Tax Code, and not Section 108 of the 1997 Tax Code. As previously mentioned, an interpretation of Section 102 (b) of the 1977 Tax Code is an interpretation of Section 108 of the 1997 Tax Code, the latter being a mere reproduction of the former. This Court further finds that Accenture's reliance on Amex is misplaced. We ruled in Amex that Section 102 of the 1977 Tax Code does not require that the services be consumed abroad to be zerorated. However, nowhere in that case did this Court discuss the necessary qualification of the recipient of the service, as this matter was never put in question. In fact, the recipient of the service in Amex is a nonresident foreign client. The aforementioned case explains how the credit card system works. The issuance of a credit card allows the holder thereof to obtain, on credit, goods and services from certain establishments. As proof that this credit is extended by the establishment, a credit card draft is issued. Thereafter, the company issuing the credit card will pay for the purchases of the credit card holders by redeeming the drafts. The obligation to collect from the card holders and to bear the loss in case they do not pay rests on the issuer of the credit card. cCaATD The service provided by respondent in Amex consisted of gathering the bills and credit card drafts from establishments located in the Philippines and forwarding them to its parent company's regional operating centers outside the country. It facilitated in the Philippines the collection and payment of receivables belonging to its Hong Kong-based foreign client. The Court explained how the services rendered in Amex were considered to have been performed and consumed in the Philippines, to wit: Consumption is "the use of a thing in a way that thereby exhausts it." Applied to services, the term means the performance or "successful completion of a contractual duty, usually resulting in the performer's release from any past or future liability . . . ." The services rendered by respondent are performed or successfully completed upon its sending to its foreign client the drafts and bills it has gathered from service establishments here. Its services, having been performed in the Philippines, are therefore also consumed in the Philippines. 44 SIcCTD The effect of the place of consumption on the zero-rating of the transaction was not the issue in Burmeister. Instead, this Court addressed the squarely raised issue of whether the recipient of services should be doing business outside the Philippines for the transaction to qualify for zero-rating. We ruled that it should. Thus, another essential condition for qualification for zero-

rating under Section 102 (b) (2) of the 1977 Tax Code is that the recipient of the business be doing that business outside the Philippines. In clarifying that there is no conflict between this pronouncement and that laid down in Amex, we ruled thus: . . . . As the Court held in Commissioner of Internal Revenue v. American Express International, Inc. (Philippine Branch), the place of payment is immaterial, much less is the place where the output of the service is ultimately used. An essential condition for entitlement to 0% VAT under Section 102 (b) (1) and (2) is that the recipient of the services is a person doing business outside the Philippines. In this case, the recipient of the services is the Consortium, which is doing business not outside, but within the Philippines because it has a 15-year contract to operate and maintain NAPOCOR's two 100-megawatt power barges in Mindanao. (Emphasis in the original) 45 In Amex we ruled that the place of performance and/or consumption of the service is immaterial. In Burmeister, the Court found that, although the place of the consumption of the service does not affect the entitlement of a transaction to zero-rating, the place where the recipient conducts its business does. THCSAE Amex does not conflict with Burmeister. In fact, to fully understand how Section 102 (b) (2) of the 1977 Tax Code and consequently Section 108 (B) (2) of the 1997 Tax Code was intended to operate, the two aforementioned cases should be taken together. The zero-rating of the services performed by respondent in Amex was affirmed by the Court, because although the services rendered were both performed and consumed in the Philippines, the recipient of the service was still an entity doing business outside the Philippines as required in Burmeister. That the recipient of the service should be doing business outside the Philippines to qualify for zero-rating is the only logical interpretation of Section 102 (b) (2) of the 1977 Tax Code, as we explained in Burmeister: This can only be the logical interpretation of Section 102 (b) (2). If the provider and recipient of the "other services" are both doing business in the Philippines, the payment of foreign currency is irrelevant. Otherwise, those subject to the regular VAT under Section 102 (a) can avoid paying the VAT by simply stipulating payment in foreign currency inwardly remitted by the recipient of services. To interpret Section 102 (b) (2) to apply to a payer-recipient of services doing business in the Philippines is to make the payment of the regular VAT under Section 102 (a) dependent on the generosity of the taxpayer. The provider of services can choose to pay the regular VAT or avoid it by stipulating payment in foreign currency inwardly remitted by the payer-recipient. Such interpretation removes Section 102 (a) as a tax measure in the Tax Code, an interpretation this Court cannot sanction. A tax is a mandatory exaction, not a voluntary contribution. ECaScD xxx xxx xxx

Further, when the provider and recipient of services are both doing business in the Philippines, their transaction falls squarely under Section 102 (a) governing domestic sale or exchange of services. Indeed, this is a purely local sale or exchange of services subject to the regular VAT, unless of course the transaction falls under the other provisions of Section 102 (b). Thus, when Section 102 (b) (2) speaks of "[s]ervices other than those mentioned in the preceding subparagraph," the legislative intent is that only the services are different between subparagraphs 1 and 2. The requirements for zero-rating, including the essential condition that the recipient of services is doing business outside the Philippines, remain the same under both subparagraphs. (Emphasis in the original) 46 Lastly, it is worth mentioning that prior to the promulgation of Burmeister, Congress had already clarified the intent behind Sections 102 (b) (2) of the 1977 Tax Code and 108 (B) (2) of the 1997 Tax Code amending the earlier provision. R.A. 9337 added the following phrase: "rendered to a person engaged in business conducted outside the Philippines or to a nonresident person not engaged in business who is outside the Philippines when the services are performed." Accenture has failed to establish that the recipients of its services do business outside the Philippines. Accenture argues that based on the documentary evidence it presented, 47 it was able to establish the following circumstances: DCASIT

1. The records of the Securities and Exchange Commission (SEC) show that Accenture's clients have not established any branch office in which to do business in the Philippines. 2. For these services, Accenture bills another corporation, Accenture Participations B.V. (APB), which is likewise a foreign corporation with no "presence in the Philippines." 3. Only those not doing business in the Philippines can be required under BSP rules to pay in acceptable currency for their purchase of goods and services from the Philippines. Thus, in a domestic transaction, where the provider and recipient of services are both doing business in the Philippines, the BSP cannot require any party to make payment in foreign currency. 48 Accenture claims that these documentary pieces of evidence are supported by the Report of Emmanuel Mendoza, the Courtcommissioned Independent Certified Public Accountant. He ascertained that Accenture's gross billings pertaining to zerorated sales were all supported by zero-rated Official Receipts and Billing Statements. These documents show that these zerorated sales were paid in foreign exchange currency and duly accounted for in the rules and regulations of the BSP. 49 In the CTA's opinion, however, the documents presented by Accenture merely substantiate the existence of the sales, receipt of foreign currency payments, and inward remittance of the proceeds of these sales duly accounted for in accordance with BSP rules. Petitioner presented no evidence whatsoever that these clients were doing business outside the Philippines. 50 Accenture insists, however, that it was able to establish that it had rendered services to foreign corporations doing business outside the Philippines, unlike in Burmeister, which allegedly involved a foreign corporation doing business in the Philippines. 51 CcADHI We deny Accenture's Petition for a tax refund. The evidence presented by Accenture may have established that its clients are foreign. This fact does not automatically mean, however, that these clients were doing business outside the Philippines. After all, the Tax Code itself has provisions for a foreign corporation engaged in business within the Philippines and vice versa, to wit: SEC. 22. Definitions. When used in this Title: xxx xxx xxx

(H) The term "resident foreign corporation" applies to a foreign corporation engaged in trade or business within the Philippines. (I) The term 'nonresident foreign corporation' applies to a foreign corporation not engaged in trade or business within the Philippines. (Emphasis in the original) Consequently, to come within the purview of Section 108 (B) (2), it is not enough that the recipient of the service be proven to be a foreign corporation; rather, it must be specifically proven to be a nonresident foreign corporation. There is no specific criterion as to what constitutes "doing" or "engaging in" or "transacting" business. We ruled thus in Commissioner of Internal Revenue v. British Overseas Airways Corporation: 52 . . . . There is no specific criterion as to what constitutes "doing" or "engaging in" or "transacting" business. Each case must be judged in the light of its peculiar environmental circumstances. The term implies a continuity of commercial dealings and arrangements, and contemplates, to that extent, the performance of acts or works or the exercise of some of the functions normally incident to, and in progressive prosecution of commercial gain or for the purpose and object of the business organization. "In order that a foreign corporation may be regarded as doing business within a State, there must be continuity of conduct and intention to establish a continuous business, such as the appointment of a local agent, and not one of a temporary character." 53 ADETca A taxpayer claiming a tax credit or refund has the burden of proof to establish the factual basis of that claim. Tax refunds, like tax exemptions, are construed strictly against the taxpayer. 54

Accenture failed to discharge this burden. It alleged and presented evidence to prove only that its clients were foreign entities. However, as found by both the CTA Division and the CTA En Banc, no evidence was presented by Accenture to prove the fact that the foreign clients to whom petitioner rendered its services were clients doing business outside the Philippines. As ruled by the CTA En Banc, the Official Receipts, Intercompany Payment Requests, Billing Statements, Memo InvoicesReceivable, Memo Invoices-Payable, and Bank Statements presented by Accenture merely substantiated the existence of sales, receipt of foreign currency payments, and inward remittance of the proceeds of such sales duly accounted for in accordance with BSP rules, all of these were devoid of any evidence that the clients were doing business outside of the Philippines. 55 WHEREFORE, the instant Petition is DENIED. The 22 September 2009 Decision and the 23 October 2009 Resolution of the Court of Tax Appeals En Banc in C.T.A. EB No. 477, dismissing the Petition for the refund of the excess or unutilized input VAT credits of Accenture, Inc., are AFFIRMED. SEHTAC SO ORDERED.

FIRST DIVISION [G.R. No. 171182. August 23, 2012.] UNIVERSITY OF THE PHILIPPINES, JOSE V. ABUEVA, RAUL P. DE GUZMAN, RUBEN P. ASPIRAS, EMMANUEL P. BELLO, WILFREDO P. DAVID, CASIANO S. ABRIGO, and JOSEFINA R. LICUANAN, petitioners, vs. HON. AGUSTIN S. DIZON, in his capacity as Presiding Judge of the Regional Trial Court of Quezon City, Branch 80, STERN BUILDERS, INC., and SERVILLANO DELA CRUZ, respondents. DECISION BERSAMIN, J p: Trial judges should not immediately issue writs of execution or garnishment against the Government or any of its subdivisions, agencies and instrumentalities to enforce money judgments. 1 They should bear in mind that the primary jurisdiction to examine, audit and settle all claims of any sort due from the Government or any of its subdivisions, agencies and instrumentalities pertains to the Commission on Audit (COA) pursuant to Presidential Decree No. 1445 (Government Auditing Code of the Philippines). aHTEIA The Case On appeal by the University of the Philippines and its then incumbent officials (collectively, the UP) is the decision promulgated on September 16, 2005, 2 whereby the Court of Appeals (CA) upheld the order of the Regional Trial Court (RTC), Branch 80, in Quezon City that directed the garnishment of public funds amounting to P16,370,191.74 belonging to the UP to satisfy the writ of execution issued to enforce the already final and executory judgment against the UP. Antecedents On August 30, 1990, the UP, through its then President Jose V. Abueva, entered into a General Construction Agreement with respondent Stern Builders Corporation (Stern Builders), represented by its President and General Manager Servillano dela Cruz, for the construction of the extension building and the renovation of the College of Arts and Sciences Building in the campus of the University of the Philippines in Los Baos (UPLB). 3 IASTDE In the course of the implementation of the contract, Stern Builders submitted three progress billings corresponding to the work accomplished, but the UP paid only two of the billings. The third billing worth P273,729.47 was not paid due to its disallowance by the Commission on Audit (COA). Despite the lifting of the disallowance, the UP failed to pay the billing, prompting Stern Builders and dela Cruz to sue the UP and its co-respondent officials to collect the unpaid billing and to recover various damages. The suit, entitled Stern Builders Corporation and Servillano R. Dela Cruz v. University of the Philippines Systems, Jose V. Abueva, Raul P. de Guzman, Ruben P. Aspiras, Emmanuel P. Bello, Wilfredo P. David, Casiano S. Abrigo, and Josefina R. Licuanan, was docketed as Civil Case No. Q-93-14971 of the Regional Trial Court in Quezon City (RTC). 4 After trial, on November 28, 2001, the RTC rendered its decision in favor of the plaintiffs, 5 viz.: ISTHED Wherefore, in the light of the foregoing, judgment is hereby rendered in favor of the plaintiff and against the defendants ordering the latter to pay plaintiff, jointly and severally, the following, to wit: 1. 2. 3. 4. 5. P503,462.74 amount of the third billing, additional accomplished work and retention money P5,716,729.00 in actual damages P10,000,000.00 in moral damages P150,000.00 and P1,500.00 per appearance as attorney's fees; and Costs of suit.

SO ORDERED.

Following the RTC's denial of its motion for reconsideration on May 7, 2002, 6 the UP filed a notice of appeal on June 3, 2002. 7 Stern Builders and dela Cruz opposed the notice of appeal on the ground of its filing being belated, and moved for the execution of the decision. The UP countered that the notice of appeal was filed within the reglementary period because the UP's Office of Legal Affairs (OLS) in Diliman, Quezon City received the order of denial only on May 31, 2002. On September 26, 2002, the RTC denied due course to the notice of appeal for having been filed out of time and granted the private respondents' motion for execution. 8 CDESIA The RTC issued the writ of execution on October 4, 2002, 9 and the sheriff of the RTC served the writ of execution and notice of demand upon the UP, through its counsel, on October 9, 2002. 10 The UP filed an urgent motion to reconsider the order dated September 26, 2002, to quash the writ of execution dated October 4, 2002, and to restrain the proceedings. 11 However, the RTC denied the urgent motion on April 1, 2003. 12 On June 24, 2003, the UP assailed the denial of due course to its appeal through a petition for certiorari in the Court of Appeals (CA), docketed as CA-G.R. No. 77395. 13 On February 24, 2004, the CA dismissed the petition for certiorari upon finding that the UP's notice of appeal had been filed late, 14 stating: Records clearly show that petitioners received a copy of the Decision dated November 28, 2001 and January 7, 2002, thus, they had until January 22, 2002 within which to file their appeal. On January 16, 2002 or after the lapse of nine (9) days, petitioners through their counsel Atty. Nolasco filed a Motion for Reconsideration of the aforesaid decision, hence, pursuant to the rules, petitioners still had six (6) remaining days to file their appeal. As admitted by the petitioners in their petition (Rollo, p. 25), Atty. Nolasco received a copy of the Order denying their motion for reconsideration on May 17, 2002, thus, petitioners still has until May 23, 2002 (the remaining six (6) days) within which to file their appeal. Obviously, petitioners were not able to file their Notice of Appeal on May 23, 2002 as it was only filed on June 3, 2002. SEIcAD In view of the said circumstances, We are of the belief and so holds that the Notice of Appeal filed by the petitioners was really filed out of time, the same having been filed seventeen (17) days late of the reglementary period. By reason of which, the decision dated November 28, 2001 had already become final and executory. "Settled is the rule that the perfection of an appeal in the manner and within the period permitted by law is not only mandatory but jurisdictional, and failure to perfect that appeal renders the challenged judgment final and executory. This is not an empty procedural rule but is grounded on fundamental considerations of public policy and sound practice." (Ram's Studio and Photographic Equipment, Inc. vs. Court of Appeals, 346 SCRA 691, 696). Indeed, Atty. Nolasco received the order of denial of the Motion for Reconsideration on May 17, 2002 but filed a Notice of Appeal only on June 3, 3003. As such, the decision of the lower court ipso facto became final when no appeal was perfected after the lapse of the reglementary period. This procedural caveat cannot be trifled with, not even by the High Court. 15 TDEASC The UP sought a reconsideration, but the CA denied the UP's motion for reconsideration on April 19, 2004. 16 On May 11, 2004, the UP appealed to the Court by petition for review on certiorari (G.R. No. 163501). On June 23, 2004, the Court denied the petition for review. 17 The UP moved for the reconsideration of the denial of its petition for review on August 29, 2004, 18 but the Court denied the motion on October 6, 2004. 19 The denial became final and executory on November 12, 2004. 20 In the meanwhile that the UP was exhausting the available remedies to overturn the denial of due course to the appeal and the issuance of the writ of execution, Stern Builders and dela Cruz filed in the RTC their motions for execution despite their previous motion having already been granted and despite the writ of execution having already issued. On June 11, 2003, the RTC granted another motion for execution filed on May 9, 2003 (although the RTC had already issued the writ of execution on October 4, 2002). 21 On June 23, 2003 and July 25, 2003, respectively, the sheriff served notices of garnishment on the UP's depository banks, namely: Land Bank of the Philippines (Buendia Branch) and the Development Bank of the Philippines (DBP), Commonwealth Branch. 22 The UP assailed the garnishment through an urgent motion to quash the notices of garnishment; 23 and a motion to quash the writ of execution dated May 9, 2003. 24 cDAEIH

On their part, Stern Builders and dela Cruz filed their ex parte motion for issuance of a release order. 25 On October 14, 2003, the RTC denied the UP's urgent motion to quash, and granted Stern Builders and dela Cruz's ex parte motion for issuance of a release order. 26 The UP moved for the reconsideration of the order of October 14, 2003, but the RTC denied the motion on November 7, 2003. 27 On January 12, 2004, Stern Builders and dela Cruz again sought the release of the garnished funds. 28 Despite the UP's opposition, 29 the RTC granted the motion to release the garnished funds on March 16, 2004. 30 On April 20, 2004, however, the RTC held in abeyance the enforcement of the writs of execution issued on October 4, 2002 and June 3, 2003 and all the ensuing notices of garnishment, citing Section 4, Rule 52, Rules of Court, which provided that the pendency of a timely motion for reconsideration stayed the execution of the judgment. 31 cDCIHT On December 21, 2004, the RTC, through respondent Judge Agustin S. Dizon, authorized the release of the garnished funds of the UP, 32 to wit: WHEREFORE, premises considered, there being no more legal impediment for the release of the garnished amount in satisfaction of the judgment award in the instant case, let the amount garnished be immediately released by the Development Bank of the Philippines, Commonwealth Branch, Quezon City in favor of the plaintiff. SO ORDERED. The UP was served on January 3, 2005 with the order of December 21, 2004 directing DBP to release the garnished funds. 33 On January 6, 2005, Stern Builders and dela Cruz moved to cite DBP in direct contempt of court for its non-compliance with the order of release. 34 Thereupon, on January 10, 2005, the UP brought a petition for certiorari in the CA to challenge the jurisdiction of the RTC in issuing the order of December 21, 2004 (CA-G.R. CV No. 88125). 35 Aside from raising the denial of due process, the UP averred that the RTC committed grave abuse of discretion amounting to lack or excess of jurisdiction in ruling that there was no longer any legal impediment to the release of the garnished funds. The UP argued that government funds and properties could not be seized by virtue of writs of execution or garnishment, as held in Department of Agriculture v. National Labor Relations Commission, 36 and citing Section 84 of Presidential Decree No. 1445 to the effect that "[r]evenue funds shall not be paid out of any public treasury or depository except in pursuance of an appropriation law or other specific statutory authority;" and that the order of garnishment clashed with the ruling in University of the Philippines Board of Regents v. Ligot-Telan 37 to the effect that the funds belonging to the UP were public funds. On January 19, 2005, the CA issued a temporary restraining order (TRO) upon application by the UP. 38 SITCcE On March 22, 2005, Stern Builders and dela Cruz filed in the RTC their amended motion for sheriff's assistance to implement the release order dated December 21, 2004, stating that the 60-day period of the TRO of the CA had already lapsed. 39 The UP opposed the amended motion and countered that the implementation of the release order be suspended. 40 On May 3, 2005, the RTC granted the amended motion for sheriff's assistance and directed the sheriff to proceed to the DBP to receive the check in satisfaction of the judgment. 41 The UP sought the reconsideration of the order of May 3, 2005. 42 On May 16, 2005, DBP filed a motion to consign the check representing the judgment award and to dismiss the motion to cite its officials in contempt of court. 43 On May 23, 2005, the UP presented a motion to withhold the release of the payment of the judgment award. 44 HSDIaC On July 8, 2005, the RTC resolved all the pending matters, 45 noting that the DBP had already delivered to the sheriff Manager's Check No. 811941 for P16,370,191.74 representing the garnished funds payable to the order of Stern Builders and dela Cruz as its compliance with the RTC's order dated December 21, 2004. 46 However, the RTC directed in the same order

that Stern Builders and dela Cruz should not encash the check or withdraw its amount pending the final resolution of the UP's petition for certiorari, to wit: 47 To enable the money represented in the check in question (No. 00008119411) to earn interest during the pendency of the defendant University of the Philippines application for a writ of injunction with the Court of Appeals the same may now be deposited by the plaintiff at the garnishee Bank (Development Bank of the Philippines), the disposition of the amount represented therein being subject to the final outcome of the case of the University of the Philippines, et al. vs. Hon. Agustin S. Dizon, et al., (CA G.R. 88125) before the Court of Appeals. Let it be stated herein that the plaintiff is not authorized to encash and withdraw the amount represented in the check in question and enjoy the same in the fashion of an owner during the pendency of the case between the parties before the Court of Appeals which may or may not be resolved in plaintiff's favor. cTAaDC With the end in view of seeing to it that the check in question is deposited by the plaintiff at the Development Bank of the Philippines (garnishee bank), Branch Sheriff Herlan Velasco is directed to accompany and/or escort the plaintiff in making the deposit of the check in question. SO ORDERED. On September 16, 2005, the CA promulgated its assailed decision dismissing the UP's petition for certiorari, ruling that the UP had been given ample opportunity to contest the motion to direct the DBP to deposit the check in the name of Stern Builders and dela Cruz; and that the garnished funds could be the proper subject of garnishment because they had been already earmarked for the project, with the UP holding the funds only in a fiduciary capacity, 48 viz.: Petitioners next argue that the UP funds may not be seized for execution or garnishment to satisfy the judgment award. Citing Department of Agriculture vs. NLRC, University of the Philippines Board of Regents vs. Hon. Ligot-Telan, petitioners contend that UP deposits at Land Bank and the Development Bank of the Philippines, being government funds, may not be released absent an appropriations bill from Congress. TcIAHS The argument is specious. UP entered into a contract with private respondents for the expansion and renovation of the Arts and Sciences Building of its campus in Los Baos, Laguna. Decidedly, there was already an appropriations earmarked for the said project. The said funds are retained by UP, in a fiduciary capacity, pending completion of the construction project. We agree with the trial Court [sic] observation on this score: "4. Executive Order No. 109 (Directing all National Government Agencies to Revert Certain Accounts Payable to the Cumulative Result of Operations of the National Government and for Other Purposes) Section 9. Reversion of Accounts Payable, provides that, all 1995 and prior years documented accounts payable and all undocumented accounts regardless of the year they were incurred shall be reverted to the Cumulative Result of Operations of the National Government (CROU). This shall apply to accounts payable of all funds, except fiduciary funds, as long as the purpose for which the funds were created have not been accomplished and accounts payable under foreign assisted projects for the duration of the said project. In this regard, the Department of Budget and Management issued Joint-Circular No. 99-6 4.0 (4.3) Procedural Guidelines which provides that all accounts payable that reverted to the CROU may be considered for payment upon determination thru administrative process, of the existence, validity and legality of the claim. Thus, the allegation of the defendants that considering no appropriation for the payment of any amount awarded to plaintiffs appellee the funds of defendant-appellants may not be seized pursuant to a writ of execution issued by the regular court is misplaced. Surely when the defendants and the plaintiff entered into the General Construction of Agreement there is an amount already allocated by the latter for the said project which is no longer subject of future appropriation." 49 cADEHI After the CA denied their motion for reconsideration on December 23, 2005, the petitioners appealed by petition for review. Matters Arising During the Pendency of the Petition On January 30, 2006, Judge Dizon of the RTC (Branch 80) denied Stern Builders and dela Cruz's motion to withdraw the deposit, in consideration of the UP's intention to appeal to the CA, 50 stating:

Since it appears that the defendants are intending to file a petition for review of the Court of Appeals resolution in CA-G.R. No. 88125 within the reglementary period of fifteen (15) days from receipt of resolution, the Court agrees with the defendants stand that the granting of plaintiffs' subject motion is premature. Let it be stated that what the Court meant by its Order dated July 8, 2005 which states in part that the "disposition of the amount represented therein being subject to the final outcome of the case of the University of the Philippines, et al. vs. Hon. Agustin S. Dizon, et al., (CA G.R. No. 88125 before the Court of Appeals) is that the judgment or resolution of said court has to be final and executory, for if the same will still be elevated to the Supreme Court, it will not attain finality yet until the highest court has rendered its own final judgment or resolution. 51 CAScIH However, on January 22, 2007, the UP filed an Urgent Application for A Temporary Restraining Order and/or A Writ of Preliminary Injunction, 52 averring that on January 3, 2007, Judge Maria Theresa dela Torre-Yadao (who had meanwhile replaced Judge Dizon upon the latter's appointment to the CA) had issued another order allowing Stern Builders and dela Cruz to withdraw the deposit, 53 to wit: DcAEIS It bears stressing that defendants' liability for the payment of the judgment obligation has become indubitable due to the final and executory nature of the Decision dated November 28, 2001. Insofar as the payment of the [sic] judgment obligation is concerned, the Court believes that there is nothing more the defendant can do to escape liability. It is observed that there is nothing more the defendant can do to escape liability. It is observed that defendant U.P. System had already exhausted all its legal remedies to overturn, set aside or modify the decision (dated November 28, 2001 (rendered against it. The way the Court sees it, defendant U.P. System's petition before the Supreme Court concerns only with the manner by which said judgment award should be satisfied. It has nothing to do with the legality or propriety thereof, although it prays for the deletion of [sic] reduction of the award of moral damages. It must be emphasized that this Court's finding, i.e., that there was sufficient appropriation earmarked for the project, was upheld by the Court of Appeals in its decision dated September 16, 2005. Being a finding of fact, the Supreme Court will, ordinarily, not disturb the same was said Court is not a trier of fact. Such being the case, defendants' arguments that there was no sufficient appropriation for the payment of the judgment obligation must fail. While it is true that the former Presiding Judge of this Court in its Order dated January 30, 2006 had stated that: Let it be stated that what the Court meant by its Order dated July 8, 2005 which states in part that the "disposition of the amount represented therein being subject to the final outcome of the case of the University of the Philippines, et al. vs. Hon. Agustin S. Dizon, et al., (CA G.R. No. 88125 before the Court of Appeals) is that the judgment or resolution of said court has to be final and executory, for if the same will still be elevated to the Supreme Court, it will not attain finality yet until the highest court has rendered its own final judgment or resolution. ITDHcA it should be noted that neither the Court of Appeals nor the Supreme Court issued a preliminary injunction enjoining the release or withdrawal of the garnished amount. In fact, in its present petition for review before the Supreme Court, U.P. System has not prayed for the issuance of a writ of preliminary injunction. Thus, the Court doubts whether such writ is forthcoming. The Court honestly believes that if defendants' petition assailing the Order of this Court dated December 31, 2004 granting the motion for the release of the garnished amount was meritorious, the Court of Appeals would have issued a writ of injunction enjoining the same. Instead, said appellate [c]ourt not only refused to issue a wit of preliminary injunction prayed for by U.P. System but denied the petition, as well. 54 The UP contended that Judge Yadao thereby effectively reversed the January 30, 2006 order of Judge Dizon disallowing the withdrawal of the garnished amount until after the decision in the case would have become final and executory. EHSAaD Although the Court issued a TRO on January 24, 2007 to enjoin Judge Yadao and all persons acting pursuant to her authority from enforcing her order of January 3, 2007, 55 it appears that on January 16, 2007, or prior to the issuance of the TRO, she had already directed the DBP to forthwith release the garnished amount to Stern Builders and dela Cruz; 56 and that DBP had forthwith complied with the order on January 17, 2007 upon the sheriff's service of the order of Judge Yadao. 57

These intervening developments impelled the UP to file in this Court a supplemental petition on January 26, 2007, 58 alleging that the RTC (Judge Yadao) gravely erred in ordering the immediate release of the garnished amount despite the pendency of the petition for review in this Court. The UP filed a second supplemental petition 59 after the RTC (Judge Yadao) denied the UP's motion for the redeposit of the withdrawn amount on April 10, 2007, 60 to wit: TESICD This resolves defendant U.P. System's Urgent Motion to Redeposit Judgment Award praying that plaintiffs be directed to redeposit the judgment award to DBP pursuant to the Temporary Restraining Order issued by the Supreme Court. Plaintiffs opposed the motion and countered that the Temporary Restraining Order issued by the Supreme Court has become moot and academic considering that the act sought to be restrained by it has already been performed. They also alleged that the redeposit of the judgment award was no longer feasible as they have already spent the same. It bears stressing, if only to set the record straight, that this Court did not in its Order dated January 3, 2007 (the implementation of which was restrained by the Supreme Court in its Resolution dated January 24, 2002) direct that that garnished amount "be deposited with the garnishee bank (Development Bank of the Philippines)". In the first place, there was no need to order DBP to make such deposit, as the garnished amount was already deposited in the account of plaintiffs with the DBP as early as May 13, 2005. What the Court granted in its Order dated January 3, 2007 was plaintiff's motion to allow the release of said deposit. It must be recalled that the Court found plaintiff's motion meritorious and, at that time, there was no restraining order or preliminary injunction from either the Court of Appeals or the Supreme Court which could have enjoined the release of plaintiffs' deposit. The Court also took into account the following factors: DCASIT a) b) c) d) and e) the Decision in this case had long been final and executory after it was rendered on November 28, 2001; the propriety of the dismissal of U.P. System's appeal was upheld by the Supreme Court; a writ of execution had been issued; defendant U.P. System's deposit with DBP was garnished pursuant to a lawful writ of execution issued by the Court;

the garnished amount had already been turned over to the plaintiffs and deposited in their account with DBP.

The garnished amount, as discussed in the Order dated January 16, 2007, was already owned by the plaintiffs, having been delivered to them by the Deputy Sheriff of this Court pursuant to par. (c), Section 9, Rule 39 of the 1997 Rules of Civil Procedure. Moreover, the judgment obligation has already been fully satisfied as per Report of the Deputy Sheriff. TCaADS Anent the Temporary Restraining Order issued by the Supreme Court, the same has become functus oficio, having been issued after the garnished amount had been released to the plaintiffs. The judgment debt was released to the plaintiffs on January 17, 2007, while the Temporary Restraining Order issued by the Supreme Court was received by this Court on February 2, 2007. At the time of the issuance of the Restraining Order, the act sought to be restrained had already been done, thereby rendering the said Order ineffectual. After a careful and thorough study of the arguments advanced by the parties, the Court is of the considered opinion that there is no legal basis to grant defendant U.P. System's motion to redeposit the judgment amount. Granting said motion is not only contrary to law, but it will also render this Court's final executory judgment nugatory. Litigation must end and terminate sometime and somewhere, and it is essential to an effective administration of justice that once a judgment has become final the issue or cause involved therein should be laid to rest. This doctrine of finality of judgment is grounded on fundamental considerations of public policy and sound practice. In fact, nothing is more settled in law than that once a judgment attains finality it thereby becomes immutable and unalterable. It may no longer be modified in any respect, even if the modification is meant to correct what is perceived to be an erroneous conclusion of fact or law, and regardless of whether the modification is attempted to be made by the court rendering it or by the highest court of the land. WHEREFORE, premises considered, finding defendant U.P. System's Urgent Motion to Redeposit Judgment Award devoid of merit, the same is hereby DENIED. AScHCD

SO ORDERED. Issues The UP now submits that: I THE COURT OF APPEALS COMMITTED GRAVE ERROR IN DISMISSING THE PETITION, ALLOWING IN EFFECT THE GARNISHMENT OF UP FUNDS, WHEN IT RULED THAT FUNDS HAVE ALREADY BEEN EARMARKED FOR THE CONSTRUCTION PROJECT; AND THUS, THERE IS NO NEED FOR FURTHER APPROPRIATIONS. DcCEHI II THE COURT OF APPEALS COMMITTED GRAVE ERROR IN ALLOWING GARNISHMENT OF A STATE UNIVERSITY'S FUNDS IN VIOLATION OF ARTICLE XIV, SECTION 5(5) OF THE CONSTITUTION. III IN THE ALTERNATIVE, THE UNIVERSITY INVOKES EQUITY AND THE REVIEW POWERS OF THIS HONORABLE COURT TO MODIFY, IF NOT TOTALLY DELETE THE AWARD OF P10 MILLION AS MORAL DAMAGES TO RESPONDENTS. IV THE RTC-BRANCH 80 COMMITTED GRAVE ERROR IN ORDERING THE IMMEDIATE RELEASE OF THE JUDGMENT AWARD IN ITS ORDER DATED 3 JANUARY 2007 ON THE GROUND OF EQUITY AND JUDICIAL COURTESY. IHDCcT V THE RTC-BRANCH 80 COMMITTED GRAVE ERROR IN ORDERING THE IMMEDIATE RELEASE OF THE JUDGMENT AWARD IN ITS ORDER DATED 16 JANUARY 2007 ON THE GROUND THAT PETITIONER UNIVERSITY STILL HAS A PENDING MOTION FOR RECONSIDERATION OF THE ORDER DATED 3 JANUARY 2007. VI THE RTC-BRANCH 80 COMMITTED GRAVE ERROR IN NOT ORDERING THE REDEPOSIT OF THE GARNISHED AMOUNT TO THE DBP IN VIOLATION OF THE CLEAR LANGUAGE OF THE SUPREME COURT RESOLUTION DATED 24 JANUARY 2007. The UP argues that the amount earmarked for the construction project had been purposely set aside only for the aborted project and did not include incidental matters like the awards of actual damages, moral damages and attorney's fees. In support of its argument, the UP cited Article 12.2 of the General Construction Agreement, which stipulated that no deductions would be allowed for the payment of claims, damages, losses and expenses, including attorney's fees, in case of any litigation arising out of the performance of the work. The UP insists that the CA decision was inconsistent with the rulings in Commissioner of Public Highways v. San Diego 61 and Department of Agriculture v. NLRC 62 to the effect that government funds and properties could not be seized under writs of execution or garnishment to satisfy judgment awards. HaECDI Furthermore, the UP contends that the CA contravened Section 5, Article XIV of the Constitution by allowing the garnishment of UP funds, because the garnishment resulted in a substantial reduction of the UP's limited budget allocated for the remuneration, job satisfaction and fulfillment of the best available teachers; that Judge Yadao should have exhibited judicial courtesy towards the Court due to the pendency of the UP's petition for review; and that she should have also desisted from declaring that the TRO issued by this Court had become functus officio. Lastly, the UP states that the awards of actual damages of P5,716,729.00 and moral damages of P10 million should be reduced, if not entirely deleted, due to its being unconscionable, inequitable and detrimental to public service. aECSHI In contrast, Stern Builders and dela Cruz aver that the petition for review was fatally defective for its failure to mention the other cases upon the same issues pending between the parties (i.e., CA-G.R. No. 77395 and G.R. No. 163501); that the UP was evidently resorting to forum shopping, and to delaying the satisfaction of the final judgment by the filing of its petition for

review; that the ruling in Commissioner of Public Works v. San Diego had no application because there was an appropriation for the project; that the UP retained the funds allotted for the project only in a fiduciary capacity; that the contract price had been meanwhile adjusted to P22,338,553.25, an amount already more than sufficient to cover the judgment award; that the UP's prayer to reduce or delete the award of damages had no factual basis, because they had been gravely wronged, had been deprived of their source of income, and had suffered untold miseries, discomfort, humiliation and sleepless years; that dela Cruz had even been constrained to sell his house, his equipment and the implements of his trade, and together with his family had been forced to live miserably because of the wrongful actuations of the UP; and that the RTC correctly declared the Court's TRO to be already functus officio by reason of the withdrawal of the garnished amount from the DBP. EAICTS The decisive issues to be considered and passed upon are, therefore: (a) whether the funds of the UP were the proper subject of garnishment in order to satisfy the judgment award; and (b) whether the UP's prayer for the deletion of the awards of actual damages of P5,716,729.00, moral damages of P10,000,000.00 and attorney's fees of P150,000.00 plus P1,500.00 per appearance could be granted despite the finality of the judgment of the RTC. Ruling The petition for review is meritorious. I. UP's funds, being government funds, are not subject to garnishment The UP was founded on June 18, 1908 through Act 1870 to provide advanced instruction in literature, philosophy, the sciences, and arts, and to give professional and technical training to deserving students. 63 Despite its establishment as a body corporate, 64 the UP remains to be a "chartered institution" 65 performing a legitimate government function. It is an institution of higher learning, not a corporation established for profit and declaring any dividends. 66 In enacting Republic Act No. 9500 (The University of the Philippines Charter of 2008), Congress has declared the UP as the national university 67 "dedicated to the search for truth and knowledge as well as the development of future leaders." 68 ASIDTa Irrefragably, the UP is a government instrumentality, 69 performing the State's constitutional mandate of promoting quality and accessible education. 70 As a government instrumentality, the UP administers special funds sourced from the fees and income enumerated under Act No. 1870 and Section 1 of Executive Order No. 714, 71 and from the yearly appropriations, to achieve the purposes laid down by Section 2 of Act 1870, as expanded in Republic Act No. 9500. 72 All the funds going into the possession of the UP, including any interest accruing from the deposit of such funds in any banking institution, constitute a "special trust fund," the disbursement of which should always be aligned with the UP's mission and purpose, 73 and should always be subject to auditing by the COA. 74 Presidential Decree No. 1445 defines a "trust fund" as a fund that officially comes in the possession of an agency of the government or of a public officer as trustee, agent or administrator, or that is received for the fulfillment of some obligation. 75 A trust fund may be utilized only for the "specific purpose for which the trust was created or the funds received." 76 The funds of the UP are government funds that are public in character. They include the income accruing from the use of real property ceded to the UP that may be spent only for the attainment of its institutional objectives. 77 Hence, the funds subject of this action could not be validly made the subject of the RTC's writ of execution or garnishment. The adverse judgment rendered against the UP in a suit to which it had impliedly consented was not immediately enforceable by execution against the UP, 78 because suability of the State did not necessarily mean its liability. 79 DacASC A marked distinction exists between suability of the State and its liability. As the Court succinctly stated in Municipality of San Fernando, La Union v. Firme: 80 A distinction should first be made between suability and liability. "Suability depends on the consent of the state to be sued, liability on the applicable law and the established facts. The circumstance that a state is suable does not necessarily mean that it is liable; on the other hand, it can never be held liable if it does not first consent to be sued. Liability is not conceded by the

mere fact that the state has allowed itself to be sued. When the state does waive its sovereign immunity, it is only giving the plaintiff the chance to prove, if it can, that the defendant is liable. Also, in Republic v. Villasor, 81 where the issuance of an alias writ of execution directed against the funds of the Armed Forces of the Philippines to satisfy a final and executory judgment was nullified, the Court said: CDaTAI . . . The universal rule that where the State gives its consent to be sued by private parties either by general or special law, it may limit claimant's action "only up to the completion of proceedings anterior to the stage of execution" and that the power of the Courts ends when the judgment is rendered, since government funds and properties may not be seized under writs of execution or garnishment to satisfy such judgments, is based on obvious considerations of public policy. Disbursements of public funds must be covered by the corresponding appropriation as required by law. The functions and public services rendered by the State cannot be allowed to be paralyzed or disrupted by the diversion of public funds from their legitimate and specific objects, as appropriated by law. DHITSc The UP correctly submits here that the garnishment of its funds to satisfy the judgment awards of actual and moral damages (including attorney's fees) was not validly made if there was no special appropriation by Congress to cover the liability. It was, therefore, legally unwarranted for the CA to agree with the RTC's holding in the order issued on April 1, 2003 that no appropriation by Congress to allocate and set aside the payment of the judgment awards was necessary because "there (were) already an appropriations (sic) earmarked for the said project." 82 The CA and the RTC thereby unjustifiably ignored the legal restriction imposed on the trust funds of the Government and its agencies and instrumentalities to be used exclusively to fulfill the purposes for which the trusts were created or for which the funds were received except upon express authorization by Congress or by the head of a government agency in control of the funds, and subject to pertinent budgetary laws, rules and regulations. 83 Indeed, an appropriation by Congress was required before the judgment that rendered the UP liable for moral and actual damages (including attorney's fees) would be satisfied considering that such monetary liabilities were not covered by the "appropriations earmarked for the said project." The Constitution strictly mandated that "(n)o money shall be paid out of the Treasury except in pursuance of an appropriation made by law." 84 TEacSA II COA must adjudicate private respondents' claim before execution should proceed The execution of the monetary judgment against the UP was within the primary jurisdiction of the COA. This was expressly provided in Section 26 of Presidential Decree No. 1445, to wit: cSTHaE Section 26. General jurisdiction. The authority and powers of the Commission shall extend to and comprehend all matters relating to auditing procedures, systems and controls, the keeping of the general accounts of the Government, the preservation of vouchers pertaining thereto for a period of ten years, the examination and inspection of the books, records, and papers relating to those accounts; and the audit and settlement of the accounts of all persons respecting funds or property received or held by them in an accountable capacity, as well as the examination, audit, and settlement of all debts and claims of any sort due from or owing to the Government or any of its subdivisions, agencies and instrumentalities. The said jurisdiction extends to all government-owned or controlled corporations, including their subsidiaries, and other selfgoverning boards, commissions, or agencies of the Government, and as herein prescribed, including non-governmental entities subsidized by the government, those funded by donations through the government, those required to pay levies or government share, and those for which the government has put up a counterpart fund or those partly funded by the government. It was of no moment that a final and executory decision already validated the claim against the UP. The settlement of the monetary claim was still subject to the primary jurisdiction of the COA despite the final decision of the RTC having already validated the claim. 85 As such, Stern Builders and dela Cruz as the claimants had no alternative except to first seek the approval of the COA of their monetary claim. ASHaDT

On its part, the RTC should have exercised utmost caution, prudence and judiciousness in dealing with the motions for execution against the UP and the garnishment of the UP's funds. The RTC had no authority to direct the immediate withdrawal of any portion of the garnished funds from the depository banks of the UP. By eschewing utmost caution, prudence and judiciousness in dealing with the execution and garnishment, and by authorizing the withdrawal of the garnished funds of the UP, the RTC acted beyond its jurisdiction, and all its orders and issuances thereon were void and of no legal effect, specifically: (a) the order Judge Yadao issued on January 3, 2007 allowing Stern Builders and dela Cruz to withdraw the deposited garnished amount; (b) the order Judge Yadao issued on January 16, 2007 directing DBP to forthwith release the garnish amount to Stern Builders and dela Cruz; (c) the sheriff's report of January 17, 2007 manifesting the full satisfaction of the writ of execution; and (d) the order of April 10, 2007 denying the UP's motion for the redeposit of the withdrawn amount. Hence, such orders and issuances should be struck down without exception. ScHADI Nothing extenuated Judge Yadao's successive violations of Presidential Decree No. 1445. She was aware of Presidential Decree No. 1445, considering that the Court circulated to all judges its Administrative Circular No. 10-2000, 86 issued on October 25, 2000, enjoining them "to observe utmost caution, prudence and judiciousness in the issuance of writs of execution to satisfy money judgments against government agencies and local government units" precisely in order to prevent the circumvention of Presidential Decree No. 1445, as well as of the rules and procedures of the COA, to wit: In order to prevent possible circumvention of the rules and procedures of the Commission on Audit, judges are hereby enjoined to observe utmost caution, prudence and judiciousness in the issuance of writs of execution to satisfy money judgments against government agencies and local government units. Judges should bear in mind that in Commissioner of Public Highways v. San Diego (31 SCRA 617, 625 [1970]), this Court explicitly stated: TSAHIa "The universal rule that where the State gives its consent to be sued by private parties either by general or special law, it may limit claimant's action 'only up to the completion of proceedings anterior to the stage of execution' and that the power of the Court ends when the judgment is rendered, since government funds and properties may not be seized under writs of execution or garnishment to satisfy such judgments, is based on obvious considerations of public policy. Disbursements of public funds must be covered by the corresponding appropriation as required by law. The functions and public services rendered by the State cannot be allowed to be paralyzed or disrupted by the diversion of public funds from their legitimate and specific objects, as appropriated by law. IaHSCc Moreover, it is settled jurisprudence that upon determination of State liability, the prosecution, enforcement or satisfaction thereof must still be pursued in accordance with the rules and procedures laid down in P.D. No. 1445, otherwise known as the Government Auditing Code of the Philippines (Department of Agriculture v. NLRC, 227 SCRA 693, 701-02 [1993] citing Republic vs. Villasor, 54 SCRA 84 [1973]). All money claims against the Government must first be filed with the Commission on Audit which must act upon it within sixty days. Rejection of the claim will authorize the claimant to elevate the matter to the Supreme Court on certiorari and in effect, sue the State thereby (P.D. 1445, Sections 49-50). However, notwithstanding the rule that government properties are not subject to levy and execution unless otherwise provided for by statute (Republic v. Palacio, 23 SCRA 899 [1968]; Commissioner of Public Highways v. San Diego, supra) or municipal ordinance (Municipality of Makati v. Court of Appeals, 190 SCRA 206 [1990]), the Court has, in various instances, distinguished between government funds and properties for public use and those not held for public use. Thus, in Viuda de Tan Toco v. Municipal Council of Iloilo (49 Phil. 52 [1926]), the Court ruled that "[w]here property of a municipal or other public corporation is sought to be subjected to execution to satisfy judgments recovered against such corporation, the question as to whether such property is leviable or not is to be determined by the usage and purposes for which it is held." The following can be culled from Viuda de Tan Toco v. Municipal Council of Iloilo: TaCEHA 1. Properties held for public uses and generally everything held for governmental purposes are not subject to levy and sale under execution against such corporation. The same rule applies to funds in the hands of a public officer and taxes due to a municipal corporation. 2. Where a municipal corporation owns in its proprietary capacity, as distinguished from its public or government capacity, property not used or used for a public purpose but for quasi-private purposes, it is the general rule that such property may be seized and sold under execution against the corporation.

3. Property held for public purposes is not subject to execution merely because it is temporarily used for private purposes. If the public use is wholly abandoned, such property becomes subject to execution. This Administrative Circular shall take effect immediately and the Court Administrator shall see to it that it is faithfully implemented. Although Judge Yadao pointed out that neither the CA nor the Court had issued as of then any writ of preliminary injunction to enjoin the release or withdrawal of the garnished amount, she did not need any writ of injunction from a superior court to compel her obedience to the law. The Court is disturbed that an experienced judge like her should look at public laws like Presidential Decree No. 1445 dismissively instead of loyally following and unquestioningly implementing them. That she did so turned her court into an oppressive bastion of mindless tyranny instead of having it as a true haven for the seekers of justice like the UP. TaCDIc III Period of appeal did not start without effective service of decision upon counsel of record; Fresh-period rule announced in Neypes v. Court of Appeals can be given retroactive application The UP next pleads that the Court gives due course to its petition for review in the name of equity in order to reverse or modify the adverse judgment against it despite its finality. At stake in the UP's plea for equity was the return of the amount of P16,370,191.74 illegally garnished from its trust funds. Obstructing the plea is the finality of the judgment based on the supposed tardiness of UP's appeal, which the RTC declared on September 26, 2002. The CA upheld the declaration of finality on February 24, 2004, and the Court itself denied the UP's petition for review on that issue on May 11, 2004 (G.R. No. 163501). The denial became final on November 12, 2004. caSDCA It is true that a decision that has attained finality becomes immutable and unalterable, and cannot be modified in any respect, 87 even if the modification is meant to correct erroneous conclusions of fact and law, and whether the modification is made by the court that rendered it or by this Court as the highest court of the land. 88 Public policy dictates that once a judgment becomes final, executory and unappealable, the prevailing party should not be deprived of the fruits of victory by some subterfuge devised by the losing party. Unjustified delay in the enforcement of such judgment sets at naught the role and purpose of the courts to resolve justiciable controversies with finality. 89 Indeed, all litigations must at some time end, even at the risk of occasional errors. But the doctrine of immutability of a final judgment has not been absolute, and has admitted several exceptions, among them: (a) the correction of clerical errors; (b) the so-called nunc pro tunc entries that cause no prejudice to any party; (c) void judgments; and (d) whenever circumstances transpire after the finality of the decision that render its execution unjust and inequitable. 90 Moreover, in Heirs of Maura So v. Obliosca, 91 we stated that despite the absence of the preceding circumstances, the Court is not precluded from brushing aside procedural norms if only to serve the higher interests of justice and equity. Also, in Gumaru v. Quirino State College, 92 the Court nullified the proceedings and the writ of execution issued by the RTC for the reason that respondent state college had not been represented in the litigation by the Office of the Solicitor General. We rule that the UP's plea for equity warrants the Court's exercise of the exceptional power to disregard the declaration of finality of the judgment of the RTC for being in clear violation of the UP's right to due process. aAcHCT Both the CA and the RTC found the filing on June 3, 2002 by the UP of the notice of appeal to be tardy. They based their finding on the fact that only six days remained of the UP's reglementary 15-day period within which to file the notice of appeal because the UP had filed a motion for reconsideration on January 16, 2002 vis--vis the RTC's decision the UP received on

January 7, 2002; and that because the denial of the motion for reconsideration had been served upon Atty. Felimon D. Nolasco of the UPLB Legal Office on May 17, 2002, the UP had only until May 23, 2002 within which to file the notice of appeal. The UP counters that the service of the denial of the motion for reconsideration upon Atty. Nolasco was defective considering that its counsel of record was not Atty. Nolasco of the UPLB Legal Office but the OLS in Diliman, Quezon City; and that the period of appeal should be reckoned from May 31, 2002, the date when the OLS received the order. The UP submits that the filing of the notice of appeal on June 3, 2002 was well within the reglementary period to appeal. TAEcSC We agree with the submission of the UP. Firstly, the service of the denial of the motion for reconsideration upon Atty. Nolasco of the UPLB Legal Office was invalid and ineffectual because he was admittedly not the counsel of record of the UP. The rule is that it is on the counsel and not the client that the service should be made. 93 That counsel was the OLS in Diliman, Quezon City, which was served with the denial only on May 31, 2002. As such, the running of the remaining period of six days resumed only on June 1, 2002, 94 rendering the filing of the UP's notice of appeal on June 3, 2002 timely and well within the remaining days of the UP's period to appeal. Verily, the service of the denial of the motion for reconsideration could only be validly made upon the OLS in Diliman, and no other. The fact that Atty. Nolasco was in the employ of the UP at the UPLB Legal Office did not render the service upon him effective. It is settled that where a party has appeared by counsel, service must be made upon such counsel. 95 Service on the party or the party's employee is not effective because such notice is not notice in law. 96 This is clear enough from Section 2, second paragraph, of Rule 13, Rules of Court, which explicitly states that: "If any party has appeared by counsel, service upon him shall be made upon his counsel or one of them, unless service upon the party himself is ordered by the court. Where one counsel appears for several parties, he shall only be entitled to one copy of any paper served upon him by the opposite side." As such, the period to appeal resumed only on June 1, 2002, the date following the service on May 31, 2002 upon the OLS in Diliman of the copy of the decision of the RTC, not from the date when the UP was notified. 97 TaEIcS Accordingly, the declaration of finality of the judgment of the RTC, being devoid of factual and legal bases, is set aside. Secondly, even assuming that the service upon Atty. Nolasco was valid and effective, such that the remaining period for the UP to take a timely appeal would end by May 23, 2002, it would still not be correct to find that the judgment of the RTC became final and immutable thereafter due to the notice of appeal being filed too late on June 3, 2002. In so declaring the judgment of the RTC as final against the UP, the CA and the RTC applied the rule contained in the second paragraph of Section 3, Rule 41 of the Rules of Court to the effect that the filing of a motion for reconsideration interrupted the running of the period for filing the appeal; and that the period resumed upon notice of the denial of the motion for reconsideration. For that reason, the CA and the RTC might not be taken to task for strictly adhering to the rule then prevailing. However, equity calls for the retroactive application in the UP's favor of the fresh-period rule that the Court first announced in mid-September of 2005 through its ruling in Neypes v. Court of Appeals, 98 viz.: THEDcS To standardize the appeal periods provided in the Rules and to afford litigants fair opportunity to appeal their cases, the Court deems it practical to allow a fresh period of 15 days within which to file the notice of appeal in the Regional Trial Court, counted from receipt of the order dismissing a motion for a new trial or motion for reconsideration. The retroactive application of the fresh-period rule, a procedural law that aims "to regiment or make the appeal period uniform, to be counted from receipt of the order denying the motion for new trial, motion for reconsideration (whether full or partial) or any final order or resolution," 99 is impervious to any serious challenge. This is because there are no vested rights in rules of procedure. 100 A law or regulation is procedural when it prescribes rules and forms of procedure in order that courts may be able to administer justice. 101 It does not come within the legal conception of a retroactive law, or is not subject of the general rule prohibiting the retroactive operation of statutes, but is given retroactive effect in actions pending and undetermined at the time of its passage without violating any right of a person who may feel that he is adversely affected. AEIcSa We have further said that a procedural rule that is amended for the benefit of litigants in furtherance of the administration of justice shall be retroactively applied to likewise favor actions then pending, as equity delights in equality. 102 We may even

relax stringent procedural rules in order to serve substantial justice and in the exercise of this Court's equity jurisdiction. 103 Equity jurisdiction aims to do complete justice in cases where a court of law is unable to adapt its judgments to the special circumstances of a case because of the inflexibility of its statutory or legal jurisdiction. 104 It is cogent to add in this regard that to deny the benefit of the fresh-period rule to the UP would amount to injustice and absurdity injustice, because the judgment in question was issued on November 28, 2001 as compared to the judgment in Neypes that was rendered in 1998; absurdity, because parties receiving notices of judgment and final orders issued in the year 1998 would enjoy the benefit of the fresh-period rule but the later rulings of the lower courts like that herein would not. 105 Consequently, even if the reckoning started from May 17, 2002, when Atty. Nolasco received the denial, the UP's filing on June 3, 2002 of the notice of appeal was not tardy within the context of the fresh-period rule. For the UP, the fresh period of 15days counted from service of the denial of the motion for reconsideration would end on June 1, 2002, which was a Saturday. Hence, the UP had until the next working day, or June 3, 2002, a Monday, within which to appeal, conformably with Section 1 of Rule 22, Rules of Court, which holds that: "If the last day of the period, as thus computed, falls on a Saturday, a Sunday, or a legal holiday in the place where the court sits, the time shall not run until the next working day." aIETCA IV Awards of monetary damages, being devoid of factual and legal bases, did not attain finality and should be deleted Section 14 of Article VIII of the Constitution prescribes that express findings of fact and of law should be made in the decision rendered by any court, to wit: Section 14. No decision shall be rendered by any court without expressing therein clearly and distinctly the facts and the law on which it is based. No petition for review or motion for reconsideration of a decision of the court shall be refused due course or denied without stating the legal basis therefor. cDHAES Implementing the constitutional provision in civil actions is Section 1 of Rule 36, Rules of Court, viz.: Section 1. Rendition of judgments and final orders. A judgment or final order determining the merits of the case shall be in writing personally and directly prepared by the judge, stating clearly and distinctly the facts and the law on which it is based, signed by him, and filed with the clerk of the court. (1a) The Constitution and the Rules of Court apparently delineate two main essential parts of a judgment, namely: the body and the decretal portion. Although the latter is the controlling part, 106 the importance of the former is not to be lightly regarded because it is there where the court clearly and distinctly states its findings of fact and of law on which the decision is based. To state it differently, one without the other is ineffectual and useless. The omission of either inevitably results in a judgment that violates the letter and the spirit of the Constitution and the Rules of Court. EAcIST The term findings of fact that must be found in the body of the decision refers to statements of fact, not to conclusions of law. 107 Unlike in pleadings where ultimate facts alone need to be stated, the Constitution and the Rules of Court require not only that a decision should state the ultimate facts but also that it should specify the supporting evidentiary facts, for they are what are called the findings of fact. The importance of the findings of fact and of law cannot be overstated. The reason and purpose of the Constitution and the Rules of Court in that regard are obviously to inform the parties why they win or lose, and what their rights and obligations are. Only thereby is the demand of due process met as to the parties. As Justice Isagani A. Cruz explained in Nicos Industrial Corporation v. Court of Appeals: 108

It is a requirement of due process that the parties to a litigation be informed of how it was decided, with an explanation of the factual and legal reasons that led to the conclusions of the court. The court cannot simply say that judgment is rendered in favor of X and against Y and just leave it at that without any justification whatsoever for its action. The losing party is entitled to know why he lost, so he may appeal to a higher court, if permitted, should he believe that the decision should be reversed. A decision that does not clearly and distinctly state the facts and the law on which it is based leaves the parties in the dark as to how it was reached and is especially prejudicial to the losing party, who is unable to pinpoint the possible errors of the court for review by a higher tribunal. AECacS Here, the decision of the RTC justified the grant of actual and moral damages, and attorney's fees in the following terse manner, viz.: . . . The Court is not unmindful that due to defendants' unjustified refusal to pay their outstanding obligation to plaintiff, the same suffered losses and incurred expenses as he was forced to re-mortgage his house and lot located in Quezon City to Metrobank (Exh. "CC") and BPI Bank just to pay its monetary obligations in the form of interest and penalties incurred in the course of the construction of the subject project. 109 The statement that "due to defendants' unjustified refusal to pay their outstanding obligation to plaintiff, the same suffered losses and incurred expenses as he was forced to re-mortgage his house and lot located in Quezon City to Metrobank (Exh. "CC") and BPI Bank just to pay its monetary obligations in the form of interest and penalties incurred in the course of the construction of the subject project" was only a conclusion of fact and law that did not comply with the constitutional and statutory prescription. The statement specified no detailed expenses or losses constituting the P5,716,729.00 actual damages sustained by Stern Builders in relation to the construction project or to other pecuniary hardships. The omission of such expenses or losses directly indicated that Stern Builders did not prove them at all, which then contravened Article 2199, Civil Code, the statutory basis for the award of actual damages, which entitled a person to an adequate compensation only for such pecuniary loss suffered by him as he has duly proved. As such, the actual damages allowed by the RTC, being bereft of factual support, were speculative and whimsical. Without the clear and distinct findings of fact and law, the award amounted only to an ipse dixit on the part of the RTC, 110 and did not attain finality. ICacDE There was also no clear and distinct statement of the factual and legal support for the award of moral damages in the substantial amount of P10,000,000.00. The award was thus also speculative and whimsical. Like the actual damages, the moral damages constituted another judicial ipse dixit, the inevitable consequence of which was to render the award of moral damages incapable of attaining finality. In addition, the grant of moral damages in that manner contravened the law that permitted the recovery of moral damages as the means to assuage "physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury." 111 The contravention of the law was manifest considering that Stern Builders, as an artificial person, was incapable of experiencing pain and moral sufferings. 112 Assuming that in granting the substantial amount of P10,000,000.00 as moral damages, the RTC might have had in mind that dela Cruz had himself suffered mental anguish and anxiety. If that was the case, then the RTC obviously disregarded his separate and distinct personality from that of Stern Builders. 113 Moreover, his moral and emotional sufferings as the President of Stern Builders were not the sufferings of Stern Builders. Lastly, the RTC violated the basic principle that moral damages were not intended to enrich the plaintiff at the expense of the defendant, but to restore the plaintiff to his status quo ante as much as possible. Taken together, therefore, all these considerations exposed the substantial amount of P10,000,000.00 allowed as moral damages not only to be factually baseless and legally indefensible, but also to be unconscionable, inequitable and unreasonable. cSTDIC Like the actual and moral damages, the P150,000.00, plus P1,500.00 per appearance, granted as attorney's fees were factually unwarranted and devoid of legal basis. The general rule is that a successful litigant cannot recover attorney's fees as part of the damages to be assessed against the losing party because of the policy that no premium should be placed on the right to litigate. 114 Prior to the effectivity of the present Civil Code, indeed, such fees could be recovered only when there was a stipulation to that effect. It was only under the present Civil Code that the right to collect attorney's fees in the cases mentioned in Article 2208 115 of the Civil Code came to be recognized. 116 Nonetheless, with attorney's fees being allowed in the concept of actual damages, 117 their amounts must be factually and legally justified in the body of the decision and not stated for the first time in the decretal portion. 118 Stating the amounts only in the dispositive portion of the judgment is not enough; 119 a rendition of the factual and legal justifications for them must also be laid out in the body of the decision. 120

That the attorney's fees granted to the private respondents did not satisfy the foregoing requirement suffices for the Court to undo them. 121 The grant was ineffectual for being contrary to law and public policy, it being clear that the express findings of fact and law were intended to bring the case within the exception and thereby justify the award of the attorney's fees. Devoid of such express findings, the award was a conclusion without a premise, its basis being improperly left to speculation and conjecture. 122 ETAICc Nonetheless, the absence of findings of fact and of any statement of the law and jurisprudence on which the awards of actual and moral damages, as well as of attorney's fees, were based was a fatal flaw that invalidated the decision of the RTC only as to such awards. As the Court declared in Velarde v. Social Justice Society, 123 the failure to comply with the constitutional requirement for a clear and distinct statement of the supporting facts and law "is a grave abuse of discretion amounting to lack or excess of jurisdiction" and that "(d)ecisions or orders issued in careless disregard of the constitutional mandate are a patent nullity and must be struck down as void." 124 The other item granted by the RTC (i.e., P503,462.74) shall stand, subject to the action of the COA as stated herein. aETAHD WHEREFORE, the Court GRANTS the petition for review on certiorari; REVERSES and SETS ASIDE the decision of the Court of Appeals under review; ANNULS the orders for the garnishment of the funds of the University of the Philippines and for the release of the garnished amount to Stern Builders Corporation and Servillano dela Cruz; and DELETES from the decision of the Regional Trial Court dated November 28, 2001 for being void only the awards of actual damages of P5,716,729.00, moral damages of P10,000,000.00, and attorney's fees of P150,000.00, plus P1,500.00 per appearance, in favor of Stern Builders Corporation and Servillano dela Cruz. The Court ORDERS Stern Builders Corporation and Servillano dela Cruz to redeposit the amount of P16,370,191.74 within 10 days from receipt of this decision. Costs of suit to be paid by the private respondents. SO ORDERED. TaHDAS

SECOND DIVISION [G.R. No. 197528. September 5, 2012.] PERT/CPM MANPOWER EXPONENT CO., INC., petitioner, vs. ARMANDO A. VINUYA, LOUIE M. ORDOVEZ, ARSENIO S. LUMANTA, JR., ROBELITO S. ANIPAN, VIRGILIO R. ALCANTARA, MARINO M. ERA, SANDY O. ENJAMBRE and NOEL T. LADEA, respondents. DECISION BRION, J p: We resolve the present petition for review on certiorari 1 assailing the decision 2 dated May 9, 2011 and the resolution 3 dated June 23, 2011 of the Court of Appeals (CA) in CA-G.R. SP No. 114353. ACTISE The Antecedents On March 5, 2008, respondents Armando A. Vinuya, Louie M. Ordovez, Arsenio S. Lumanta, Jr., Robelito S. Anipan, Virgilio R. Alcantara, Marino M. Era, Sandy O. Enjambre and Noel T. Ladea (respondents) filed a complaint for illegal dismissal against the petitioner Pert/CPM Manpower Exponent Co., Inc. (agency), and its President Romeo P. Nacino. The respondents alleged that the agency deployed them between March 29, 2007 and May 12, 2007 to work as aluminum fabricator/installer for the agency's principal, Modern Metal Solution LLC/MMS Modern Metal Solution LLC (Modern Metal) in Dubai, United Arab Emirates. The respondents' employment contracts, 4 which were approved by the Philippine Overseas Employment Administration (POEA), provided for a two-year employment, nine hours a day, salary of 1,350 AED with overtime pay, food allowance, free and suitable housing (four to a room), free transportation, free laundry, and free medical and dental services. They each paid a P15,000.00 processing fee. 5 On April 2, 2007, Modern Metal gave the respondents, except Era, appointment letters 6 with terms different from those in the employment contracts which they signed at the agency's office in the Philippines. Under the letters of appointment, their employment was increased to three years at 1,000 to 1,200 AED and food allowance of 200 AED. CHDAEc The respondents claimed that they were shocked to find out what their working and living conditions were in Dubai. They were required to work from 6:30 a.m. to 6:30 p.m., with a break of only one hour to one and a half hours. When they rendered overtime work, they were most of the time either underpaid or not paid at all. Their housing accommodations were cramped and were shared with 27 other occupants. The lodging house was in Sharjah, which was far from their jobsite in Dubai, leaving them only three to four hours of sleep a day because of the long hours of travel to and from their place of work; there was no potable water and the air was polluted. When the respondents received their first salaries (at the rates provided in their appointment letters and with deductions for placement fees) and because of their difficult living and working conditions, they called up the agency and complained about their predicament. The agency assured them that their concerns would be promptly addressed, but nothing happened. HCEcaT On May 5, 2007, Modern Metal required the respondents to sign new employment contracts, 7 except for Era who was made to sign later. The contracts reflected the terms of their appointment letters. Burdened by all the expenses and financial obligations they incurred for their deployment, they were left with no choice but to sign the contracts. They raised the matter with the agency, which again took no action. On August 5, 2007, despondent over their unbearable living and working conditions and by the agency's inaction, the respondents expressed to Modern Metal their desire to resign. Out of fear, as they put it, that Modern Metal would not give them their salaries and release papers, the respondents, except Era, cited personal/family problems for their resignation. 8 Era mentioned the real reason "because I dont (sic) want the company policy" 9 for his resignation. cHCaIE

It took the agency several weeks to repatriate the respondents to the Philippines. They all returned to Manila in September 2007. Except for Ordovez and Enjambre, all the respondents shouldered their own airfare. For its part, the agency countered that the respondents were not illegally dismissed; they voluntarily resigned from their employment to seek a better paying job. It claimed that the respondents, while still working for Modern Metal, applied with another company which offered them a higher pay. Unfortunately, their supposed employment failed to materialize and they had to go home because they had already resigned from Modern Metal. The agency further alleged that the respondents even voluntarily signed affidavits of quitclaim and release after they resigned. It thus argued that their claim for benefits, under Section 10 of Republic Act No. (R.A.) 8042, damages and attorney's fees is unfounded. TcADCI The Compulsory Arbitration Rulings On April 30, 2008, Labor Arbiter Ligerio V. Ancheta rendered a decision 10 dismissing the complaint, finding that the respondents voluntarily resigned from their jobs. He also found that four of them Alcantara, Era, Anipan and Lumanta even executed a compromise agreement (with quitclaim and release) before the POEA. He considered the POEA recourse a case of forum shopping. The respondents appealed to the National Labor Relations Commission (NLRC). They argued that the labor arbiter committed serious errors in (1) admitting in evidence the quitclaims and releases they executed in Dubai, which were mere photocopies of the originals and which failed to explain the circumstances behind their execution; (2) failing to consider that the compromise agreements they signed before the POEA covered only the refund of their airfare and not all their money claims; and (3) ruling that they violated the rule on non-forum shopping. SHIETa On May 12, 2009, the NLRC granted the appeal. 11 It ruled that the respondents had been illegally dismissed. It anchored its ruling on the new employment contracts they were made to sign in Dubai. It stressed that it is illegal for an employer to require its employees to execute new employment papers, especially those which provide benefits that are inferior to the POEA-approved contracts. The NLRC rejected the quitclaim and release executed by the respondents in Dubai. It believed that the respondents executed the quitclaim documents under duress as they were afraid that they would not be allowed to return to the Philippines if they did not sign the documents. Further, the labor tribunal disagreed with the labor arbiter's opinion that the compromise agreement they executed before the POEA had effectively foreclosed the illegal dismissal complaint before the NLRC and that the respondents had been guilty of forum shopping. It pointed out that the POEA case involved pre-deployment issues; whereas, the complaint before the NLRC is one for illegal dismissal and money claims arising from employment. DIETcH Consequently, the NLRC ordered the agency, Nacino and Modern Metal to pay, jointly and severally, the respondents, as follows: WHEREFORE, the Decision dated 30 April 2008 is hereby REVERSED and SET ASIDE, a new Decision is hereby issued ordering the respondents PERT/CPM MANPOWER EXPONENTS CO., INC., ROMEO NACINO, and MODERN METAL SOLUTIONS, INC. to jointly and severally, pay the complainants the following: Employee Salary Underpaid fee the Placement Damages Salary for Exemplary

unexpired portion of the contract (1350 x 6 months)

Vinuya, 150 x 6 = ARMANDO Alcantara VIRGILIO Era, 900 AED

USD 400 8100 AED

P20,000.00

150 X 4 = 600 AED

USD 400 8100 AED

P20,000.00

350 x 4 =

USD 400 8100 AED

P20,000.00

MARINO 1400 AED Ladea, NOEL 150 x 5 = 750 AED 250 X 3 = USD 400 8100 AED P20,000.00 USD 400 8100 AED P20,000.00

Ordovez, LOUIE 750 AED

Anipan, 150 x 4 = ROBELITO Enjambre, SANDY 600 AED Lumanta, ARSENIO 600 AED

USD 400 8100 AED

P20,000.00

150 x 4 =

USD 400 8100 AED

P20,000.00

250 x 5 = 1250 AED

USD 400 8100 AED

P20,000.00

TOTAL: 6,850 AED

US$3,200

64,800 AED

P400,000.00

or their peso equivalent at the time of actual payment plus attorney[']s fees equivalent to 10% of the judgment award. 12 The agency moved for reconsideration, contending that the appeal was never perfected and that the NLRC gravely abused its discretion in reversing the labor arbiter's decision. IECAaD The respondents, on the other hand, moved for partial reconsideration, maintaining that their salaries should have covered the unexpired portion of their employment contracts, pursuant to the Court's ruling in Serrano v. Gallant Maritime Services, Inc. 13 The NLRC denied the agency's motion for reconsideration, but granted the respondents' motion. 14 It sustained the respondents' argument that the award needed to be adjusted, particularly in relation to the payment of their salaries, consistent with the Court's ruling in Serrano. The ruling declared unconstitutional the clause, "or for three (3) months for every year of the unexpired term, whichever is less," in Section 10, paragraph 5, of R.A. 8042, limiting the entitlement of illegally dismissed overseas Filipino workers to their salaries for the unexpired term of their contract or three months, whichever is less. Accordingly, it modified its earlier decision and adjusted the respondents' salary entitlement based on the following matrix: EaHIDC Employee Contract contract Vinuya, 2 years 29 March 2007 8 August 2007 19 months Duration of Departure date Date dismissed Unexpired

portion of

ARMANDO Alcantara, VIRGILIO Era, MARINO Ladea, NOEL Ordovez, LOUIE Anipan, 2 years 3 April 2007 ROBELITO Enjambre, SANDY Lumanta, ARSENIO 2 years 29 March 2007 2 years 29 March 2007 2 years 12 May 2007 2 years 3 April 2007

and 21 days 8 August 2007 and 5 days 8 August 2007 and 4 days 8 August 2007 and 21 days 2 years 3 April 2007 26 July 2007 21 months 19 months 21 months 20 months

and 23 days 8 August 2007 20 months

and 5 days 26 July 2007 20 months

and 3 days 2 years 29 March 2007 8 August 2007 and 21 days 15 19 months

Again, the agency moved for reconsideration, reiterating its earlier arguments and, additionally, questioning the application of the Serrano ruling in the case because it was not yet final and executory. The NLRC denied the motion, prompting the agency to seek recourse from the CA through a petition for certiorari. IATHaS The CA Decision The CA dismissed the petition for lack of merit. 16 It upheld the NLRC ruling that the respondents were illegally dismissed. It found no grave abuse of discretion in the NLRC's rejection of the respondents' resignation letters, and the accompanying quitclaim and release affidavits, as proof of their voluntary termination of employment. The CA stressed that the filing of a complaint for illegal dismissal is inconsistent with resignation. Moreover, it found nothing in the records to substantiate the agency's contention that the respondents' resignation was of their own accord; on the contrary, it considered the resignation letters "dubious for having been lopsidedly-worded to ensure that the petitioners (employer[s]) are free from any liability." 17 The appellate court likewise refused to give credit to the compromise agreements that the respondents executed before the POEA. It agreed with the NLRC's conclusion that the agreements pertain to the respondents' charge of recruitment violations against the agency distinct from their illegal dismissal complaint, thus negating forum shopping by the respondents. aHADTC Lastly, the CA found nothing legally wrong in the NLRC correcting itself (upon being reminded by the respondents), by adjusting the respondents' salary award on the basis of the unexpired portion of their contracts, as enunciated in the Serrano case. The agency moved for, but failed to secure, a reconsideration of the CA decision. 18 The Petition The agency is now before the Court seeking a reversal of the CA dispositions, contending that the CA erred in:

1.

affirming the NLRC's finding that the respondents were illegally dismissed; TCDcSE

2. holding that the compromise agreements before the POEA pertain only to the respondents' charge of recruitment violations against the agency; and 3. affirming the NLRC's award to the respondents of their salaries for the unexpired portion of their employment contracts, pursuant to the Serrano ruling. The agency insists that it is not liable for illegal dismissal, actual or constructive. It submits that as correctly found by the labor arbiter, the respondents voluntarily resigned from their jobs, and even executed affidavits of quitclaim and release; the respondents stated family concerns for their resignation. The agency posits that the letters were duly proven as they were written unconditionally by the respondents. It, therefore, assails the conclusion that the respondents resigned under duress or that the resignation letters were dubious. TAEcSC The agency raises the same argument with respect to the compromise agreements, with quitclaim and release, it entered into with Vinuya, Era, Ladea, Enjambre, Ordovez, Alcantara, Anipan and Lumanta before the POEA, although it submitted evidence only for six of them. Anipan, Lumanta, Vinuya and Ladea signing one document; 19 Era 20 and Alcantara 21 signing a document each. It points out that the agreement was prepared with the assistance of POEA Conciliator Judy Santillan, and was duly and freely signed by the respondents; moreover, the agreement is not conditional as it pertains to all issues involved in the dispute between the parties. On the third issue, the agency posits that the Serrano ruling has no application in the present case for three reasons. First, the respondents were not illegally dismissed and, therefore, were not entitled to their money claims. Second, the respondents filed the complaint in 2007, while the Serrano ruling came out on March 24, 2009. The ruling cannot be given retroactive application. Third, R.A. 10022, which was enacted on March 8, 2010 and which amended R.A. 8042, restored the subject clause in Section 10 of R.A. 8042, declared unconstitutional by the Court. cdrep The Respondents' Position In their Comment (to the Petition) dated September 28, 2011, 22 the respondents ask the Court to deny the petition for lack of merit. They dispute the agency's insistence that they resigned voluntarily. They stand firm on their submission that because of their unbearable living and working conditions in Dubai, they were left with no choice but to resign. Also, the agency never refuted their detailed narration of the reasons for giving up their employment. The respondents maintain that the quitclaim and release affidavits, 23 which the agency presented, betray its desperate attempt to escape its liability to them. They point out that, as found by the NLRC, the affidavits are ready-made documents; for instance, in Lumanta's 24 and Era's 25 affidavits, they mentioned a certain G & A International Manpower as the agency which recruited them a fact totally inapplicable to all the respondents. They contend that they had no choice but to sign the documents; otherwise, their release papers and remaining salaries would not be given to them, a submission which the agency never refuted. CSEHIa On the agency's second line of defense, the compromise agreement (with quitclaim and release) between the respondents and the agency before the POEA, the respondents argue that the agreements pertain only to their charge of recruitment violations against the agency. They add that based on the agreements, read and considered entirely, the agency was discharged only with respect to the recruitment and pre-deployment issues such as excessive placement fees, non-issuance of receipts and placement misrepresentation, but not with respect to post-deployment issues such as illegal dismissal, breach of contract, underpayment of salaries and underpayment and nonpayment of overtime pay. The respondents stress that the agency failed to controvert their contention that the agreements came about only to settle their claim for refund of their airfare which they paid for when they were repatriated. Lastly, the respondents maintain that since they were illegally dismissed, the CA was correct in upholding the NLRC's award of their salaries for the unexpired portion of their employment contracts, as enunciated in Serrano. They point out that the Serrano ruling is curative and remedial in nature and, as such, should be given retroactive application as the Court declared in Yap v. Thenamaris Ship's Management. 26 Further, the respondents take exception to the agency's contention that the Serrano ruling cannot, in any event, be applied in the present case in view of the enactment of R.A. 10022 on March 8, 2010, amending

Section 10 of R.A. 8042. The amendment restored the subject clause in paragraph 5, Section 10 of R.A. 8042 which was struck down as unconstitutional in Serrano. DISEaC The respondents maintain that the agency cannot raise the issue for the first time before this Court when it could have raised it before the CA with its petition for certiorari which it filed on June 8, 2010; 27 otherwise, their right to due process will be violated. The agency, on the other hand, would later claim that it is not barred by estoppel with respect to its reliance on R.A. 10022 as it raised it before the CA in CA-G.R. SP No. 114353. 28 They further argue that RA 10022 cannot be applied in their case, as the law is an amendatory statute which is, as a rule, prospective in application, unless the contrary is provided. 29 To put the issue to rest, the respondents ask the Court to also declare unconstitutional Section 7 of R.A. 10022. Finally, the respondents submit that the petition should be dismissed outright for raising only questions of fact, rather than of law. The Court's Ruling The procedural question We deem it proper to examine the facts of the case on account of the divergence in the factual conclusions of the labor arbiter on the one hand, and, of the NLRC and the CA, on the other. 30 The arbiter found no illegal dismissal in the respondents' loss of employment in Dubai because they voluntarily resigned; whereas, the NLRC and the CA adjudged them to have been illegally dismissed because they were virtually forced to resign. HCITcA The merits of the case We find no merit in the petition. The CA committed no reversible error and neither did it commit grave abuse of discretion in affirming the NLRC's illegal dismissal ruling. The agency and its principal, Modern Metal, committed flagrant violations of the law on overseas employment, as well as basic norms of decency and fair play in an employment relationship, pushing the respondents to look for a better employment and, ultimately, to resign from their jobs. First. The agency and Modern Metal are guilty of contract substitution. The respondents entered into a POEA-approved twoyear employment contract, 31 with Modern Metal providing among others, as earlier discussed, for a monthly salary of 1350 AED. On April 2, 2007, Modern Metal issued to them appointment letters 32 whereby the respondents were hired for a longer three-year period and a reduced salary, from 1,100 AED to 1,200 AED, among other provisions. Then, on May 5, 2007, they were required to sign new employment contracts 33 reflecting the same terms contained in their appointment letters, except that this time, they were hired as "ordinary laborer," no longer aluminum fabricator/installer. The respondents complained with the agency about the contract substitution, but the agency refused or failed to act on the matter. TCaEIc The fact that the respondents' contracts were altered or substituted at the workplace had never been denied by the agency. On the contrary, it admitted that the contract substitution did happen when it argued, "[a]s to their claim for [underpayment] of salary, their original contract mentioned 1350 AED monthly salary, which includes allowance while in their Appointment Letters, they were supposed to receive 1,300 AED. While there was [a] difference of 50 AED monthly, the same could no longer be claimed by virtue of their Affidavits of Quitclaims and Desistance[.]" 34 Clearly, the agency and Modern Metal committed a prohibited practice and engaged in illegal recruitment under the law. Article 34 of the Labor Code provides: Art. 34. Prohibited Practices. It shall be unlawful for any individual, entity, licensee, or holder of authority: cAaETS xxx xxx xxx

(i) To substitute or alter employment contracts approved and verified by the Department of Labor from the time of actual signing thereof by the parties up to and including the periods of expiration of the same without the approval of the Secretary of Labor[.] Further, Article 38 of the Labor Code, as amended by R.A. 8042, 35 defined "illegal recruitment" to include the following act:

(i) To substitute or alter to the prejudice of the worker, employment contracts approved and verified by the Department of Labor and Employment from the time of actual signing thereof by the parties up to and including the period of the expiration of the same without the approval of the Department of Labor and Employment[.] Second. The agency and Modern Metal committed breach of contract. Aggravating the contract substitution imposed upon them by their employer, the respondents were made to suffer substandard (shocking, as they put it) working and living arrangements. Both the original contracts the respondents signed in the Philippines and the appointment letters issued to them by Modern Metal in Dubai provided for free housing and transportation to and from the jobsite. The original contract mentioned free and suitable housing. 36 Although no description of the housing was made in the letters of appointment except: "Accommodation: Provided by the company," it is but reasonable to think that the housing or accommodation would be "suitable." SDHTEC As earlier pointed out, the respondents were made to work from 6:30 a.m. to 6:30 p.m., with a meal break of one to one and a half hours, and their overtime work was mostly not paid or underpaid. Their living quarters were cramped as they shared them with 27 other workers. The lodging house was in Sharjah, far from the jobsite in Dubai, leaving them only three to four hours of sleep every workday because of the long hours of travel to and from their place of work, not to mention that there was no potable water in the lodging house which was located in an area where the air was polluted. The respondents complained with the agency about the hardships that they were suffering, but the agency failed to act on their reports. Significantly, the agency failed to refute their claim, anchored on the ordeal that they went through while in Modern Metal's employ. Third. With their original contracts substituted and their oppressive working and living conditions unmitigated or unresolved, the respondents' decision to resign is not surprising. They were compelled by the dismal state of their employment to give up their jobs; effectively, they were constructively dismissed. A constructive dismissal or discharge is "a quitting because continued employment is rendered impossible, unreasonable or unlikely, as, an offer involving a demotion in rank and a diminution in pay." 37 Without doubt, the respondents' continued employment with Modern Metal had become unreasonable. A reasonable mind would not approve of a substituted contract that pays a diminished salary from 1350 AED a month in the original contract to 1,000 AED to 1,200 AED in the appointment letters, a difference of 150 AED to 250 AED (not just 50 AED as the agency claimed) or an extended employment (from 2 to 3 years) at such inferior terms, or a "free and suitable" housing which is hours away from the job site, cramped and crowded, without potable water and exposed to air pollution. cSEaTH We thus cannot accept the agency's insistence that the respondents voluntarily resigned since they personally prepared their resignation letters 38 in their own handwriting, citing family problems as their common ground for resigning. As the CA did, we find the resignation letters "dubious," 39 not only for having been lopsidedly worded to ensure that the employer is rendered free from any liability, but also for the odd coincidence that all the respondents had, at the same time, been confronted with urgent family problems so that they had to give up their employment and go home. The truth, as the respondents maintain, is that they cited family problems as reason out of fear that Modern Metal would not give them their salaries and their release papers. Only Era was bold enough to say the real reason for his resignation to protest company policy. We likewise find the affidavits 40 of quitclaim and release which the respondents executed suspect. Obviously, the affidavits were prepared as a follow through of the respondents' supposed voluntary resignation. Unlike the resignation letters, the respondents had no hand in the preparation of the affidavits. They must have been prepared by a representative of Modern Metal as they appear to come from a standard form and were apparently introduced for only one purpose to lend credence to the resignation letters. In Modern Metal's haste, however, to secure the respondents' affidavits, they did not check on the model they used. Thus, Lumanta's affidavit 41 mentioned a G & A International Manpower as his recruiting agency, an entity totally unknown to the respondents; the same thing is true for Era's affidavit. 42 This confusion is an indication of the employer's hurried attempt to avoid liability to the respondents. The respondents' position is well-founded. The NLRC itself had the same impression, which we find in order and hereunder quote: HEDSIc

The acts of respondents of requiring the signing of new contracts upon reaching the place of work and requiring employees to sign quitclaims before they are paid and repatriated to the Philippines are all too familiar stories of despicable labor practices which our employees are subjected to abroad. While it is true that quitclaims are generally given weight, however, given the facts of the case, We are of the opinion that the complainants-appellants executed the same under duress and fear that they will not be allowed to return to the Philippines. 43 Fourth. The compromise agreements (with quitclaim and release) 44 between the respondents and the agency before the POEA did not foreclose their employer-employee relationship claims before the NLRC. The respondents, except Ordovez and Enjambre, aver in this respect that they all paid for their own airfare when they returned home 45 and that the compromise agreements settled only their claim for refund of their airfare, but not their other claims. 46 Again, this submission has not been refuted or denied by the agency. On the surface, the compromise agreements appear to confirm the agency's position, yet a closer examination of the documents would reveal their true nature. Copy of the compromise agreement is a standard POEA document, prepared in advance and readily made available to parties who are involved in disputes before the agency, such as what the respondents filed with the POEA ahead (filed in 2007) of the illegal dismissal complaint before the NLRC (filed on March 5, 2008). EHaCID Under the heading "Post-Deployment," the agency agreed to pay Era 47 and Alcantara 48 P12,000.00 each, purportedly in satisfaction of the respondents' claims arising from overseas employment, consisting of unpaid salaries, salary differentials and other benefits, including money claims with the NLRC. The last document was signed by (1) Anipan, (2) Lumanta, (3) Ladea, (4) Vinuya, (5) Jonathan Nangolinola, and (6) Zosimo Gatchalian (the last four signing on the left hand side of the document; the last two were not among those who filed the illegal dismissal complaint). 49 The agency agreed to pay them a total of P72,000.00. Although there was no breakdown of the entitlement for each of the six, but guided by the compromise agreement signed by Era and Alcantara, we believe that the agency paid them P12,000.00 each, just like Era and Alcantara. The uniform insubstantial amount for each of the signatories to the agreement lends credence to their contention that the settlement pertained only to their claim for refund of the airfare which they shouldered when they returned to the Philippines. The compromise agreement, apparently, was intended by the agency as a settlement with the respondents and others with similar claims, which explains the inclusion of the two (Nangolinola and Gatchalian) who were not involved in the case with the NLRC. Under the circumstances, we cannot see how the compromise agreements can be considered to have fully settled the respondents' claims before the NLRC illegal dismissal and monetary benefits arising from employment. We thus find no reversible error nor grave abuse of discretion in the rejection by the NLRC and the CA of said agreements. cIHSTC Fifth. The agency's objection to the application of the Serrano ruling in the present case is of no moment. Its argument that the ruling cannot be given retroactive effect, because it is curative and remedial, is untenable. It points out, in this respect, that the respondents filed the complaint in 2007, while the Serrano ruling was handed down in March 2009. The issue, as the respondents correctly argue, has been resolved in Yap v. Thenamaris Ship's Management, 50 where the Court sustained the retroactive application of the Serrano ruling which declared unconstitutional the subject clause in Section 10, paragraph 5 of R.A. 8042, limiting to three months the payment of salaries to illegally dismissed Overseas Filipino Workers. Undaunted, the agency posits that in any event, the Serrano ruling has been nullified by R.A. No. 10022, entitled "An Act Amending Republic Act No. 8042, Otherwise Known as the Migrant Workers and Overseas Filipinos Act of 1995, As Amended, Further Improving the Standard of Protection and Promotion of the Welfare of Migrant Workers, Their Families and Overseas Filipinos in Distress, and for Other Purposes." 51 It argues that R.A. 10022, which lapsed into law (without the Signature of the President) on March 8, 2010, restored the subject clause in the 5th paragraph, Section 10 of R.A. 8042. The amendment, contained in Section 7 of R.A. 10022, reads as follows: In case of termination of overseas employment without just, valid or authorized cause as defined by law or contract, or any unauthorized deductions from the migrant worker's salary, the worker shall be entitled to the full reimbursement "of" his placement fee and the deductions made with interest at twelve percent (12%) per annum, plus his salaries for the unexpired portion of his employment contract or for three (3) months for every year of the unexpired term, whichever is less. 52 (emphasis ours) HcACTE This argument fails to persuade us. Laws shall have no retroactive effect, unless the contrary is provided. 53 By its very nature, the amendment introduced by R.A. 10022 restoring a provision of R.A. 8042 declared unconstitutional cannot be

given retroactive effect, not only because there is no express declaration of retroactivity in the law, but because retroactive application will result in an impairment of a right that had accrued to the respondents by virtue of the Serrano ruling entitlement to their salaries for the unexpired portion of their employment contracts. All statutes are to be construed as having only a prospective application, unless the purpose and intention of the legislature to give them a retrospective effect are expressly declared or are necessarily implied from the language used. 54 We thus see no reason to nullify the application of the Serrano ruling in the present case. Whether or not R.A. 10022 is constitutional is not for us to rule upon in the present case as this is an issue that is not squarely before us. In other words, this is an issue that awaits its proper day in court; in the meanwhile, we make no pronouncement on it. cCSEaA WHEREFORE, premises considered, the petition is DENIED. The assailed Decision dated May 9, 2011 and the Resolution dated June 23, 2011 of the Court of Appeals in CA-G.R. SP No. 114353 are AFFIRMED. Let this Decision be brought to the attention of the Honorable Secretary of Labor and Employment and the Administrator of the Philippine Overseas Employment Administration as a black mark in the deployment record of petitioner Pert/CPM Manpower Exponent Co., Inc., and as a record that should be considered in any similar future violations. Costs against the petitioner. SO ORDERED.

FIRST DIVISION [G.R. No. 167057. April 11, 2012.] NERWIN INDUSTRIES CORPORATION, petitioner, vs. PNOC-ENERGY DEVELOPMENT CORPORATION, and ESTER R. GUERZON, Chairman, Bids and Awards Committee, respondents. DECISION BERSAMIN, J p: Republic Act No. 8975 1 expressly prohibits any court, except the Supreme Court, from issuing any temporary restraining order (TRO), preliminary injunction, or preliminary mandatory injunction to restrain, prohibit or compel the Government, or any of its subdivisions or officials, or any person or entity, whether public or private, acting under the Government's direction, from: (a) acquiring, clearing, and developing the right-of-way, site or location of any National Government project; (b) bidding or awarding of a contract or project of the National Government; (c) commencing, prosecuting, executing, implementing, or operating any such contract or project; (d) terminating or rescinding any such contract or project; and (e) undertaking or authorizing any other lawful activity necessary for such contract or project. Accordingly, a Regional Trial Court (RTC) that ignores the statutory prohibition and issues a TRO or a writ of preliminary injunction or preliminary mandatory injunction against a government contract or project acts contrary to law. IcADSE Antecedents The following antecedents are culled from the assailed decision of the Court of Appeals (CA) promulgated on October 22, 2004, 2 viz.: In 1999, the National Electrification Administration ("NEA") published an invitation to pre-qualify and to bid for a contract, otherwise known as IPB No. 80, for the supply and delivery of about sixty thousand (60,000) pieces of woodpoles and twenty thousand (20,000) pieces of crossarms needed in the country's Rural Electrification Project. The said contract consisted of four (4) components, namely: PIA, PIB and PIC or woodpoles and P3 or crossarms, necessary for NEA's projected allocation for Luzon, Visayas and Mindanao. In response to the said invitation, bidders, such as private respondent [Nerwin], were required to submit their application for eligibility together with their technical proposals. At the same time, they were informed that only those who would pass the standard pre-qualification would be invited to submit their financial bids. Following a thorough review of the bidders' qualifications and eligibility, only four (4) bidders, including private respondent [Nerwin], qualified to participate in the bidding for the IPB-80 contract. Thereafter, the qualified bidders submitted their financial bids where private respondent [Nerwin] emerged as the lowest bidder for all schedules/components of the contract. NEA then conducted a pre-award inspection of private respondent's [Nerwin's] manufacturing plants and facilities, including its identified supplier in Malaysia, to determine its capability to supply and deliver NEA's requirements. In the Recommendation of Award for Schedules PIA, PIB, PIC and P3 IBP No. 80 [for the] Supply and Delivery of Woodpoles and Crossarms dated October 4, 2000, NEA administrator Conrado M. Estrella III recommended to NEA's Board of Directors the approval of award to private respondent [Nerwin] of all schedules for IBP No. 80 on account of the following: aTEHCc a. Nerwin is the lowest complying and responsive bidder;

b. The price difference for the four (4) schedules between the bid of Nerwin Industries (lowest responsive and complying bidder) and the second lowest bidder in the amount of $1.47 million for the poles and $0.475 million for the crossarms, is deemed substantial and extremely advantageous to the government. The price difference is equivalent to 7,948 pcs. of poles and 20.967 pcs. of crossarms; c. The price difference for the three (3) schedules between the bids of Nerwin and the Tri-State Pole and Piling, Inc. approximately in the amount of $2.36 million for the poles and $0.475 million for the crossarms are equivalent to additional 12.872 pcs. of poles and 20.967 pcs. of crossarms; and

d. The bidder and manufacturer are capable of supplying the woodpoles and specified in the bid documents and as based on the pre-award inspection conducted. However, on December 19, 2000, NEA's Board of Directors passed Resolution No. 32 reducing by 50% the material requirements for IBP No. 80 "given the time limitations for the delivery of the materials, . . . , and with the loan closing date of October 2001 fast approaching". In turn, it resolved to award the four (4) schedules of IBP No. 80 at a reduced number to private respondent [Nerwin]. Private respondent [Nerwin] protested the said 50% reduction, alleging that the same was a ploy to accommodate a losing bidder. AHcCDI On the other hand, the losing bidders Tri State and Pacific Synnergy appeared to have filed a complaint, citing alleged false or falsified documents submitted during the pre-qualification stage which led to the award of the IBP-80 project to private respondent [Nerwin]. Thus, finding a way to nullify the result of the previous bidding, NEA officials sought the opinion of the Government Corporate Counsel who, among others, upheld the eligibility and qualification of private respondent [Nerwin]. Dissatisfied, the said officials attempted to seek a revision of the earlier opinion but the Government Corporate Counsel declared anew that there was no legal impediment to prevent the award of IPB-80 contract to private respondent [Nerwin]. Notwithstanding, NEA allegedly held negotiations with other bidders relative to the IPB-80 contract, prompting private respondent [Nerwin] to file a complaint for specific performance with prayer for the issuance of an injunction, which injunctive application was granted by Branch 36 of RTC-Manila in Civil Case No. 01102000. IaAHCE In the interim, PNOC-Energy Development Corporation purporting to be under the Department of Energy, issued Requisition No. FGJ 30904R1 or an invitation to pre-qualify and to bid for wooden poles needed for its Samar Rural Electrification Project ("O-ILAW project"). Upon learning of the issuance of Requisition No. FGJ 30904R1 for the O-ILAW Project, Nerwin filed a civil action in the RTC in Manila, docketed as Civil Case No. 03106921 entitled Nerwin Industries Corporation v. PNOC-Energy Development Corporation and Ester R. Guerzon, as Chairman, Bids and Awards Committee, alleging that Requisition No. FGJ 30904R1 was an attempt to subject a portion of the items covered by IPB No. 80 to another bidding; and praying that a TRO issue to enjoin respondents' proposed bidding for the wooden poles. Respondents sought the dismissal of Civil Case No. 03106921, stating that the complaint averred no cause of action, violated the rule that government infrastructure projects were not to be subjected to TROs, contravened the mandatory prohibition against non-forum shopping, and the corporate president had no authority to sign and file the complaint. 3 On June 27, 2003, after Nerwin had filed its rejoinder to respondents' reply, the RTC granted a TRO in Civil Case No. 03106921. 4 IDSEAH On July 30, 2003, the RTC issued an order, 5 as follows: WHEREFORE, for the foregoing considerations, an order is hereby issued by this Court: 1. 2. DENYING the motion to consolidate; DENYING the urgent motion for reconsideration;

3. DISQUALIFYING Attys. Michael A. Medado, Datu Omar S. Sinsuat and Mariano H. Paps from appearing as counsel for the defendants; 4. 5. DECLARING defendants in default; GRANTING the motion for issuance of writ of preliminary injunction. TcDAHS

Accordingly, let a writ of preliminary injunction issue enjoining the defendant PNOC-EDC and its Chairman of Bids and Awards Committee Esther R. Guerzon from continuing the holding of the subject bidding upon the plaintiffs filing of a bond in the amount of P200,000.00 to answer for any damage or damages which the defendants may suffer should it be finally adjudged that petitioner is not entitled thereto, until final determination of the issue in this case by this Court.

This order shall become effective only upon the posting of a bond by the plaintiffs in the amount of P200,000.00. Let a copy of this order be immediately served on the defendants and strict compliance herein is enjoined. Furnish the Office of the Government Corporate Counsel copy of this order. SO ORDERED. Respondents moved for the reconsideration of the order of July 30, 2003, and also to set aside the order of default and to admit their answer to the complaint. On January 13, 2004, the RTC denied respondents' motions for reconsideration, to set aside order of default, and to admit answer. 6 ITSaHC Thence, respondents commenced in the Court of Appeals (CA) a special civil action for certiorari (CA-G.R. SP No. 83144), alleging that the RTC had thereby committed grave abuse of discretion amounting to lack or excess of jurisdiction in holding that Nerwin had been entitled to the issuance of the writ of preliminary injunction despite the express prohibition from the law and from the Supreme Court; in issuing the TRO in blatant violation of the Rules of Court and established jurisprudence; in declaring respondents in default; and in disqualifying respondents' counsel from representing them. 7 On October 22, 2004, the CA promulgated its decision, 8 to wit: WHEREFORE, the petition is GRANTED. The assailed Orders dated July 30 and December 29, 2003 are hereby ANNULED and SET ASIDE. Accordingly, Civil Case No. 03106921, private respondent's complaint for issuance of temporary restraining order/writ of preliminary injunction before Branch 37 of the Regional Trial Court of Manila, is DISMISSED for lack of merit. SO ORDERED. Nerwin filed a motion for reconsideration, but the CA denied the motion on February 9, 2005. 9 cCTIaS Issues Hence, Nerwin appeals, raising the following issues: I. Whether or not the CA erred in dismissing the case on the basis of Rep. Act 8975 prohibiting the issuance of temporary restraining orders and preliminary injunctions, except if issued by the Supreme Court, on government projects. II. Whether or not the CA erred in ordering the dismissal of the entire case on the basis of Rep. Act 8975 which prohibits the issuance only of a preliminary injunction but not injunction as a final remedy. III. Ruling The petition fails. In its decision of October 22, 2004, the CA explained why it annulled and set aside the assailed orders of the RTC issued on July 20, 2003 and December 29, 2003, and why it altogether dismissed Civil Case No. 03106921, as follows: DcSACE It is beyond dispute that the crux of the instant case is the propriety of respondent Judge's issuance of a preliminary injunction, or the earlier TRO, for that matter. Respondent Judge gravely abused his discretion in entertaining an application for TRO/preliminary injunction, and worse, in issuing a preliminary injunction through the assailed order enjoining petitioners' sought bidding for its O-ILAW Project. The same is a palpable violation of RA 8975 which was approved on November 7, 2000, thus, already existing at the time respondent Judge issued the assailed Orders dated July 20 and December 29, 2003. Section 3 of RA 8975 states in no uncertain terms, thus: Whether or not the CA erred in dismissing the case considering that it is also one for damages.

Prohibition on the Issuance of temporary Restraining Order, Preliminary Injunctions and Preliminary Mandatory Injunctions. No court, except the Supreme Court, shall issue any temporary restraining order, preliminary injunction or preliminary mandatory injunction against the government, or any of its subdivisions, officials, or any person or entity, whether public or private, acting under the government's direction, to restrain, prohibit or compel the following acts: xxx (b) xxx xxx xxx

Bidding or awarding of contract/project of the national government as defined under Section 2 hereof; aSCHcA xxx xxx

This prohibition shall apply in all cases, disputes or controversies instituted by a private party, including but not limited to cases filed by bidders or those claiming to have rights through such bidders involving such contract/project. This prohibition shall not apply when the matter is of extreme urgency involving a constitutional issue, such that unless a temporary restraining order is issued, grave injustice and irreparable injury will arise. . . . The said proscription is not entirely new. RA 8975 merely supersedes PD 1818 which earlier underscored the prohibition to courts from issuing restraining orders or preliminary injunctions in cases involving infrastructure or National Resources Development projects of, and public utilities operated by, the government. This law was, in fact, earlier upheld to have such a mandatory nature by the Supreme Court in an administrative case against a Judge. Moreover, to bolster the significance of the said prohibition, the Supreme Court had the same embodied in its Administrative Circular No. 11-2000 which reiterates the ban on issuance of TRO or writs of Preliminary Prohibitory or Mandatory Injunction in cases involving Government Infrastructure Projects. Pertinent is the ruling in National Housing Authority vs. Allarde "As regards the definition of infrastructure projects, the Court stressed in Republic of the Phil. vs. Salvador Silverio and Big Bertha Construction: The term 'infrastructure projects' means 'construction, improvement and rehabilitation of roads, and bridges, railways, airports, seaports, communication facilities, irrigation, flood control and drainage, water supply and sewerage systems, shore protection, power facilities, national buildings, school buildings, hospital buildings and other related construction projects that form part of the government capital investment." SDaHEc Thus, there is nothing from the law or jurisprudence, or even from the facts of the case, that would justify respondent Judge's blatant disregard of a "simple, comprehensible and unequivocal mandate (of PD 1818) prohibiting the issuance of injunctive writs relative to government infrastructure projects." Respondent Judge did not even endeavor, although expectedly, to show that the instant case falls under the single exception where the said proscription may not apply, i.e., when the matter is of extreme urgency involving a constitutional issue, such that unless a temporary restraining order is issued, grave injustice and irreparable injury will arise. Respondent Judge could not have legally declared petitioner in default because, in the first place, he should not have given due course to private respondent's complaint for injunction. Indubitably, the assailed orders were issued with grave abuse of discretion amounting to lack or excess of jurisdiction. SaIHDA Perforce, this Court no longer sees the need to resolve the other grounds proffered by petitioners. 10 The CA's decision was absolutely correct. The RTC gravely abused its discretion, firstly, when it entertained the complaint of Nerwin against respondents notwithstanding that Nerwin was thereby contravening the express provisions of Section 3 and Section 4 of Republic Act No. 8975 for its seeking to enjoin the bidding out by respondents of the O-ILAW Project; and, secondly, when it issued the TRO and the writ of preliminary prohibitory injunction. Section 3 and Section 4 of Republic Act No. 8975 provide: Section 3. Prohibition on the Issuance of Temporary Restraining Orders, Preliminary Injunctions and Preliminary Mandatory Injunctions. No court, except the Supreme Court, shall issue any temporary restraining order, preliminary injunction or preliminary mandatory injunction against the government, or any of its subdivisions, officials or any person or entity, whether public or private, acting under the government's direction, to restrain, prohibit or compel the following acts: SACEca

(a) Acquisition, clearance and development of the right-of-way and/or site or location of any national government project; (b) (c) (d) (e) Bidding or awarding of contract/project of the national government as defined under Section 2 hereof; Commencement, prosecution, execution, implementation, operation of any such contract or project; Termination or rescission of any such contract/project; and The undertaking or authorization of any other lawful activity necessary for such contract/project.

This prohibition shall apply in all cases, disputes or controversies instituted by a private party, including but not limited to cases filed by bidders or those claiming to have rights through such bidders involving such contract/project. This prohibition shall not apply when the matter is of extreme urgency involving a constitutional issue, such that unless a temporary restraining order is issued, grave injustice and irreparable injury will arise. The applicant shall file a bond, in an amount to be fixed by the court, which bond shall accrue in favor of the government if the court should finally decide that the applicant was not entitled to the relief sought. If after due hearing the court finds that the award of the contract is null and void, the court may, if appropriate under the circumstances, award the contract to the qualified and winning bidder or order a rebidding of the same, without prejudice to any liability that the guilty party may incur under existing laws. DHITCc Section 4. Nullity of Writs and Orders. Any temporary restraining order, preliminary injunction or preliminary mandatory injunction issued in violation of Section 3 hereof is void and of no force and effect. The text and tenor of the provisions being clear and unambiguous, nothing was left for the RTC to do except to enforce them and to exact upon Nerwin obedience to them. The RTC could not have been unaware of the prohibition under Republic Act No. 8975 considering that the Court had itself instructed all judges and justices of the lower courts, through Administrative Circular No. 11-2000, to comply with and respect the prohibition against the issuance of TROs or writs of preliminary prohibitory or mandatory injunction involving contracts and projects of the Government. CEDHTa It is of great relevance to mention at this juncture that Judge Vicente A. Hidalgo, the Presiding Judge of Branch 37 of the RTC, the branch to which Civil Case No. 03106921 had been raffled, was in fact already found administratively liable for gross misconduct and gross ignorance of the law as the result of his issuance of the assailed TRO and writ of preliminary prohibitory injunction. The Court could only fine him in the amount of P40,000.00 last August 6, 2008 in view of his intervening retirement from the service. That sanction was meted on him in A.M. No. RTJ-08-2133 entitled Sinsuat v. Hidalgo, 11 where this Court stated: The Court finds that, indeed, respondent is liable for gross misconduct. As the CA explained in its above-stated Decision in the petition for certiorari, respondent failed to heed the mandatory ban imposed by P.D. No. 1818 and R.A. No. 8975 against a government infrastructure project, which the rural electrification project certainly was. He thereby likewise obstinately disregarded this Court's various circulars enjoining courts from issuing TROs and injunctions against government infrastructure projects in line with the proscription under R.A. No. 8975. Apropos are Gov. Garcia v. Hon. Burgos and National Housing Authority v. Hon. Allarde wherein this Court stressed that P.D. No. 1818 expressly deprives courts of jurisdiction to issue injunctive writs against the implementation or execution of a government infrastructure project. DAHEaT Reiterating the prohibitory mandate of P.D. No. 1818, the Court in Atty. Caguioa v. Judge Lavia faulted a judge for grave misconduct for issuing a TRO against a government infrastructure project thus: . . . It appears that respondent is either feigning a misunderstanding of the law or openly manifesting a contumacious indifference thereto. In any case, his disregard of the clear mandate of PD 1818, as well as of the Supreme Court Circulars enjoining strict compliance therewith, constitutes grave misconduct and conduct prejudicial to the proper administration of justice. His claim that the said statute is inapplicable to his January 21, 1997 Order extending the dubious TRO is but a contrived subterfuge to evade administrative liability.

In resolving matters in litigation, judges should endeavor assiduously to ascertain the facts and the applicable laws. Moreover, they should exhibit more than just a cursory acquaintance with statutes and procedural rules. Also, they are expected to keep abreast of and be conversant with the rules and the circulars which the Supreme Court has adopted and which affect the disposition of cases before them. Although judges have in their favor the presumption of regularity and good faith in the performance of their judicial functions, a blatant disregard of the clear and unmistakable terms of the law obviates this presumption and renders them susceptible to administrative sanctions. (Emphasis and underscoring supplied) cSATDC The pronouncements in Caguioa apply as well to respondent. The questioned acts of respondent also constitute gross ignorance of the law for being patently in disregard of simple, elementary and well-known rules which judges are expected to know and apply properly. IN FINE, respondent is guilty of gross misconduct and gross ignorance of the law, which are serious charges under Section 8 of Rule 140 of the Rules of Court. He having retired from the service, a fine in the amount of P40,000 is imposed upon him, the maximum amount fixed under Section 11 of Rule 140 as an alternative sanction to dismissal or suspension. 12 Even as the foregoing outcome has rendered any further treatment and discussion of Nerwin's other submissions superfluous and unnecessary, the Court notes that the RTC did not properly appreciate the real nature and true purpose of the injunctive remedy. This failing of the RTC presses the Court to use this decision to reiterate the norms and parameters long standing jurisprudence has set to control the issuance of TROs and writs of injunction, and to now insist on conformity to them by all litigants and lower courts. Only thereby may the grave misconduct committed in Civil Case No. 03106921 be avoided. cDCaTS A preliminary injunction is an order granted at any stage of an action or proceeding prior to the judgment or final order, requiring a party or a court, agency or person, to refrain from a particular act or acts. 13 It is an ancillary or preventive remedy resorted to by a litigant to protect or preserve his rights or interests during the pendency of the case. As such, it is issued only when it is established that: (a) The applicant is entitled to the relief demanded, and the whole or part of such relief consists in restraining the commission or continuance of the act or acts complained of, or in requiring the performance of an act or acts, either for a limited period or perpetually; or (b) The commission, continuance or non-performance of the act or acts complained of during the litigation would probably work injustice to the applicant; or aSTECA (c) A party, court, agency or a person is doing, threatening, or is attempting to do, or is procuring or suffering to be done, some act or acts probably in violation of the rights of the applicant respecting the subject of the action or proceeding, and tending to render the judgment ineffectual. 14 The existence of a right to be protected by the injunctive relief is indispensable. In City Government of Butuan v. Consolidated Broadcasting System (CBS), Inc., 15 the Court elaborated on this requirement, viz.: As with all equitable remedies, injunction must be issued only at the instance of a party who possesses sufficient interest in or title to the right or the property sought to be protected. It is proper only when the applicant appears to be entitled to the relief demanded in the complaint, which must aver the existence of the right and the violation of the right, or whose averments must in the minimum constitute a prima facie showing of a right to the final relief sought. Accordingly, the conditions for the issuance of the injunctive writ are: (a) that the right to be protected exists prima facie; (b) that the act sought to be enjoined is violative of that right; and (c) that there is an urgent and paramount necessity for the writ to prevent serious damage. An injunction will not issue to protect a right not in esse, or a right which is merely contingent and may never arise; or to restrain an act which does not give rise to a cause of action; or to prevent the perpetration of an act prohibited by statute. Indeed, a right, to be protected by injunction, means a right clearly founded on or granted by law or is enforceable as a matter of law. 16 Conclusive proof of the existence of the right to be protected is not demanded, however, for, as the Court has held in Saulog v. Court of Appeals, 17 it is enough that: IaSAHC

. . . for the court to act, there must be an existing basis of facts affording a present right which is directly threatened by an act sought to be enjoined. And while a clear showing of the right claimed is necessary, its existence need not be conclusively established. In fact, the evidence to be submitted to justify preliminary injunction at the hearing thereon need not be conclusive or complete but need only be a "sampling" intended merely to give the court an idea of the justification for the preliminary injunction pending the decision of the case on the merits. This should really be so since our concern here involves only the propriety of the preliminary injunction and not the merits of the case still pending with the trial court. Thus, to be entitled to the writ of preliminary injunction, the private respondent needs only to show that it has the ostensible right to the final relief prayed for in its complaint . . . . 18 In this regard, the Rules of Court grants a broad latitude to the trial courts considering that conflicting claims in an application for a provisional writ more often than not involve and require a factual determination that is not the function of the appellate courts. 19 Nonetheless, the exercise of such discretion must be sound, that is, the issuance of the writ, though discretionary, should be upon the grounds and in the manner provided by law. 20 When that is done, the exercise of sound discretion by the issuing court in injunctive matters must not be interfered with except when there is manifest abuse. 21 Moreover, judges dealing with applications for the injunctive relief ought to be wary of improvidently or unwarrantedly issuing TROs or writs of injunction that tend to dispose of the merits without or before trial. Granting an application for the relief in disregard of that tendency is judicially impermissible, 22 for it is never the function of a TRO or preliminary injunction to determine the merits of a case, 23 or to decide controverted facts. 24 It is but a preventive remedy whose only mission is to prevent threatened wrong, 25 further injury, 26 and irreparable harm 27 or injustice 28 until the rights of the parties can be settled. Judges should thus look at such relief only as a means to protect the ability of their courts to render a meaningful decision. 29 Foremost in their minds should be to guard against a change of circumstances that will hamper or prevent the granting of proper reliefs after a trial on the merits. 30 It is well worth remembering that the writ of preliminary injunction should issue only to prevent the threatened continuous and irremediable injury to the applicant before the claim can be justly and thoroughly studied and adjudicated. 31 DEcSaI WHEREFORE, the Court AFFIRMS the decision of the Court of Appeals; and ORDERS petitioner to pay the costs of suit. The Court Administrator shall disseminate this decision to the lower courts for their guidance. SO ORDERED.

FIRST DIVISION [G.R. No. 137873. April 20, 2001.] D.M. CONSUNJI, INC., petitioner, vs. COURT OF APPEALS and MARIA J. JUEGO, respondents. Castillo Laman Tan Pantaleon and San Jose Law Offices for petitioner. Manuel Y. Fausto for respondent. SYNOPSIS Jose Juego was a construction worker of D.M. Consunji, Inc. when he fell to his death from the 14th floor of Renaisance Tower. He was performing his work as a carpenter at the elevator core of the building when suddenly the platform on which he was on board fell down to the basement of the core. His widow filed a complaint for damages against D.M. Consunji, Inc. Consunji raised the defense that the widow availed of the benefits from the State Insurance Fund. After trial, the Regional Trial Court (RTC) rendered a decision in favor of the widow. On appeal by D.M. Consunji, the Court of Appeals (CA) affirmed the decision of the RTC in toto. D.M. Consunji seeks the reversal of the CA decision questioning the admissibility of the police report as evidence of the negligence of the petitioner, the applicability of the doctrine of res ipsa loquitur, the presumption of negligence under Article 2180 of the Civil Code, and that the respondent was not precluded from recovering damages under the Civil Code. EASCDH The Supreme Court ruled that the police report in this case was inadmissible for the purpose of proving the truth of the statements contained therein but was admissible insofar as it constituted part of the testimony of the police officer involved. However, such inadmissibility loses relevance in the face of the application of res ipsa loquitur. The effect of the doctrine is to warrant the presumption that the mere fall of the elevator was a result of the person having charge of the instrumentality was negligent. Petitioner in this case was unable to present evidence to rebut the inference or presumption of negligence arising from the application of res ipsa loquitur. The Court also ruled that the respondent was not precluded from recovering damages under the Civil Code. There was no showing that she knew of the remedies available to her when the claim before the ECC was filed. The case was remanded to the Regional Trial Court to determine whether the award decreed in its decision was more than that of the ECC. Should the award be greater, payments already made to the private respondent pursuant to the ECC shall be deducted therefrom. The decision of the Court of Appeals was affirmed. cCHITA SYLLABUS 1. REMEDIAL LAW; EVIDENCE; HEARSAY RULE; CONSTRUED. The Rules of Court provide that a witness can testify only to those facts which he knows of his personal knowledge, that is, which are derived from his perception. A witness, therefore, may not testify as what he merely learned from others either because he was told or read or heard the same. Such testimony is considered hearsay and may not be received as proof of the truth of what he has learned. This is known as the hearsay rule. Hearsay is not limited to oral testimony or statements; the general rule that excludes hearsay as evidence applies to written, as well as oral statements. The theory of the hearsay rule is that the many possible deficiencies, suppressions, sources of error and untrustworthiness, which lie underneath the bare untested assertion of a witness, may be best brought to light and exposed by the test of cross-examination. The hearsay rule, therefore, excludes evidence that cannot be tested by cross-examination. ADSIaT 2. ID.; ID.; ID.; EXCEPTION; ENTRIES IN OFFICIAL RECORDS; REQUISITES. The Rules of Court allow several exceptions to the rule, among which are entries in official records. Section 44, Rule 130 provides: Entries in official records made in the performance of his duty by a public officer of the Philippines, or by a person in the performance of a duty specially enjoined by law are prima facie evidence of the facts therein stated. In Africa, et al. vs. Caltex (Phil.), Inc., et al., this Court, citing the work of Chief Justice Moran, enumerated the requisites for admissibility under the above rule: (a) that the entry was made by a public officer or by another person specially enjoined by law to do so; (b) that it was made by the public officer in the performance of his duties, or by such other person in the performance of a duty specially enjoined by law; and (c) that the public officer or other person had sufficient knowledge of the facts by him stated, which must have been acquired by him personally or through official information.

3. ID.; ID.; RES IPSA LOQUITUR; DEFINED AND CONSTRUED. As a rule of evidence, the doctrine of res ipsa loquitur is peculiar to the law of negligence which recognizes that prima facie negligence may be established without direct proof and furnishes a substitute for specific proof of negligence. The concept of res ipsa loquitur has been explained in this wise: While negligence is not ordinarily inferred or presumed, and while the mere happening of an accident or injury will not generally give rise to an inference or presumption that it was due to negligence on defendant's part, under the doctrine of res ipsa loquitur, which means, literally, the thing or transaction speaks for itself, or in one jurisdiction, that the thing or instrumentality speaks for itself, the facts or circumstances accompanying an injury may be such as to raise a presumption, or at least permit an inference of negligence on the part of the defendant, or some other person who is charged with negligence. . . . where it is shown that the thing or instrumentality which caused the injury complained of was under the control or management of the defendant, and that the occurrence resulting in the injury was such as in the ordinary course of things would not happen if those who had its control or management used proper care, there is sufficient evidence, or, as sometimes stated, reasonable evidence, in the absence of explanation by the defendant, that the injury arose from or was caused by the defendant's want of care. One of the theoretical bases for the doctrine is its necessity, i.e., that necessary evidence is absent or not available. The res ipsa loquitur doctrine is based in part upon the theory that the defendant in charge of the instrumentality which causes the injury either knows the cause of the accident or has the best opportunity of ascertaining it and that the plaintiff has no such knowledge, and therefore is compelled to allege negligence in general terms and to rely upon the proof of the happening of the accident in order to establish negligence. The inference which the doctrine permits is grounded upon the fact that the chief evidence of the true cause, whether culpable or innocent, is practically accessible to the defendant but inaccessible to the injured person. It has been said that the doctrine of res ipsa loquitur furnishes a bridge by which a plaintiff, without knowledge of the cause, reaches over to defendant who knows or should know the cause, for any explanation of care exercised by the defendant in respect of the matter of which the plaintiff complains. The res ipsa loquitur doctrine, another court has said, is a rule of necessity, in that it proceeds on the theory that under the peculiar circumstances in which the doctrine is applicable, it is within the power of the defendant to show that there was no negligence on his part, and direct proof of defendant's negligence is beyond plaintiff's power. Accordingly, some courts add to the three prerequisites for the application of the res ipsa loquitur doctrine the further requirement that for the res ipsa loquitur doctrine to apply, it must appear that the injured party had no knowledge or means of knowledge as to the cause of the accident, or that the party to be charged with negligence has superior knowledge or opportunity for explanation of the accident. DITEAc 4. ID.; ID.; ID.; PROCEDURAL EFFECT OF THE DOCTRINE; APPLICATION IN CASE AT BAR. Petitioner does not dispute the existence of the requisites for the application of res ipsa loquitur, but argues that the presumption or inference that it was negligent did not arise since it "proved that it exercised due care to avoid the accident which befell respondent's husband". Petitioner apparently misapprehends the procedural effect of the doctrine. As stated earlier, the defendant's negligence is presumed or inferred when the plaintiff establishes the requisites for the application of res ipsa loquitur. Once the plaintiff makes out a prima facie case of all the elements, the burden then shifts to defendant to explain. The presumption or inference may be rebutted or overcome by other evidence and, under appropriate circumstances a disputable presumption, such as that of due care or innocence, may outweigh the inference. It is not for the defendant to explain or prove its defense to prevent the presumption or inference from arising. Evidence by the defendant of say, due care, comes into play only after the circumstances for the application of the doctrine has been established. ADSTCa 5. ID.; ID.; AFFIDAVITS; INADMISSIBLE UNDER THE HEARSAY RULE; RATIONALE; EXCEPTION. Affidavits are inadmissible as evidence under the hearsay rule, unless the affiant is placed on the witness stand to testify thereon. The inadmissibility of this sort of evidence is based not only on the lack of opportunity on the part of the adverse party to crossexamine the affiant, but also on the commonly known fact that, generally, an affidavit is not prepared by the affiant himself but by another who uses his own language in writing the affiant's statements which may either be omitted or misunderstood by the one writing them. Petitioner, therefore, cannot use said statement as proof of its due care any more than private respondent can use it to prove the cause of her husband's death. Regrettably, petitioner does not cite any other evidence to rebut the inference or presumption of negligence arising from the application of res ipsa loquitur, or to establish any defense relating to the incident. CEcaTH 6. LABOR AND SOCIAL LEGISLATION; LABOR RELATIONS; DEATH BENEFITS; RECOVERY OF DAMAGES FROM WORKMEN'S COMPENSATION ACT AND TO PROSECUTE AN ORDINARY CIVIL ACTION; CHOICE OF ONLY ONE REMEDY SHOULD BE AVAILABLE FOR THE HEIRS; EXCEPTION. Addressing the issue of whether the heirs had a choice of remedies, majority of the Court En Banc, following the rule in Pacaa vs. Cebu Autobus Company, held in the affirmative. We now come to the query as to whether or not the injured employee or his heirs in case of death have a right of selection or choice of action

between availing themselves of the worker's right under the Workmen's Compensation Act and suing in the regular courts under the Civil Code for higher damages (actual, moral and exemplary) from the employers by virtue of the negligence or fault of the employers or whether they may avail themselves cumulatively of both actions, i.e., collect the limited compensation under the Workmen's Compensation Act and sue in addition for damages in the regular courts. In disposing of a similar issue, this Court in Pacaa vs. Cebu Autobus Company, 32 SCRA 442, ruled that an injured worker has a choice of either to recover from the employer the fixed amounts set by the Workmen's Compensation Act or to prosecute an ordinary civil action against the tortfeasor for higher damages but he cannot pursue both courses of action simultaneously. Nevertheless, the Court allowed some of the petitioners in said case to proceed with their suit under the Civil Code despite having availed of the benefits provided under the Workmen's Compensation Act. The Court reasoned: With regard to the other petitioners, it was alleged by Philex in its motion to dismiss dated May 14, 1968 before the court a quo, that the heirs of the deceased employees, namely Emerito Obra, Larry Villar, Jr., Aurelio Lanuza, Lorenzo Isla and Saturnino submitted notices and claims for compensation to the Regional Office No. 1 of the then Department of Labor and all of them have been paid in full as of August 25, 1967, except Saturnino Martinez whose heirs decided that they be paid in installments . . . . Such allegation was admitted by herein petitioners in their opposition to the motion to dismiss dated May 27, 1968 . . . in the lower court, but they set up the defense that the claims were filed under the Workmen's Compensation Act before they learned of the official report of the committee created to investigate the accident which established the criminal negligence and violation of law by Philex, and which report was forwarded by the Director of Mines to then Executive Secretary Rafael Salas in a letter dated October 19, 1967 only . . . . We hold that although the other petitioners had received the benefits under the Workmen's Compensation Act, such may not preclude them from bringing an action before the regular court because they became cognizant of the fact that Philex has been remiss in its contractual obligations with the deceased miners only after receiving compensation under the Act. Had petitioners been aware of said violation of government rules and regulations by Philex, and of its negligence, they would not have sought redress under the Workmen's Compensation Commission which awarded a lesser amount for compensation. The choice of the first remedy was based on ignorance or a mistake of fact, which nullifies the choice as it was not an intelligent choice. The case should therefore be remanded to the lower court for further proceedings. However, should the petitioners be successful in their bid before the lower court, the payments made under the Workmen's Compensation Act should be deducted from the damages that may be decreed in their favor. The ruling in Floresca providing the claimant a choice of remedies was reiterated in Ysmael Maritime Corporation vs. Avelino, Vda. de Severo vs. Feliciano-Go, and Marcopper Mining Corp. vs. Abeleda. In the last case, the Court again recognized that a claimant who had been paid under the Act could still sue under the Civil Code. The Court said: In the Robles case, it was held that claims for damages sustained by workers in the course of their employment could be filed only under the Workmen's Compensation Law, to the exclusion of all further claims under other laws. In Floresca, this doctrine was abrogated in favor of the new rule that the claimants may invoke either the Workmen's Compensation Act or the provisions of the Civil Code, subject to the consequence that the choice of one remedy will exclude the other and that the acceptance of compensation under the remedy chosen will preclude a claim for additional benefits under the other remedy. The exception is where a claimant who has already been paid under the Workmen's Compensation Act may still sue for damages under the Civil Code on the basis of supervening facts or developments occurring after he opted for the first remedy. cda 7. ID.; ID.; ID.; ID.; ID.; WAIVER OF REMEDIES THROUGH ELECTION; EFFECT THEREOF. When a party having knowledge of the facts makes an election between inconsistent remedies, the election is final and bars any action, suit, or proceeding inconsistent with the elected remedy, in the absence of fraud by the other party. The first act of election acts as a bar. Equitable in nature, the doctrine of election of remedies is designed to mitigate possible unfairness to both parties. It rests on the moral premise that it is fair to hold people responsible for their choices. The purpose of the doctrine is not to prevent any recourse to any remedy, but to prevent a double redress for a single wrong. The choice of a party between inconsistent remedies results in a waiver by election. Hence, the rule in Floresca that a claimant cannot simultaneously pursue recovery under the Labor Code and prosecute an ordinary course of action under the Civil Code. The claimant, by his choice of one remedy, is deemed to have waived the other. Waiver is the intentional relinquishment of a known right. [It] is an act of understanding that presupposes that a party has knowledge of its rights, but chooses not to assert them. It must be generally shown by the party claiming a waiver that the person against whom the waiver is asserted had at the time knowledge, actual or constructive, of the existence of the party's rights or of all material facts upon which they depended. Where one lacks knowledge of a right, there is no basis upon which waiver of it can rest. Ignorance of a material fact negates waiver, and waiver cannot be established by a consent given under a mistake or misapprehension of fact. A person makes a knowing and intelligent waiver when that person knows that a right exists and has adequate knowledge upon which to make an intelligent decision. Waiver requires a knowledge of the facts basic to the exercise of the right waived, with an awareness of its

consequences. That a waiver is made knowingly and intelligently must be illustrated on the record or by the evidence. cCaATD 8. ID.; ID.; ID.; ID.; ID.; ID.; WHEN NULLIFIED; APPLICATION IN CASE AT BAR. That lack of knowledge of a fact that nullifies the election of a remedy is the basis for the exception in Floresca. It is in light of the foregoing principles that we address petitioner's contentions. Waiver is a defense, and it was not incumbent upon private respondent, as plaintiff, to allege in her complaint that she had availed of benefits from the ECC. It is, thus, erroneous for petitioner to burden private respondent with raising waiver as an issue. On the contrary, it is the defendant who ought to plead waiver, as petitioner did in pages 2-3 of its Answer; otherwise, the defense is waived. It is, therefore, perplexing for petitioner to now contend that the trial court had no jurisdiction over the issue when petitioner itself pleaded waiver in the proceedings before the trial court. Does the evidence show that private respondent knew of the facts that led to her husband's death and the rights pertaining to a choice of remedies? It bears stressing that what negates waiver is lack of knowledge or a mistake of fact. In this case, the "fact" that served as a basis for nullifying the waiver is the negligence of petitioner's employees, of which private respondent purportedly learned only after the prosecutor issued a resolution stating that there may be civil liability. In Floresca, it was the negligence of the mining corporation and its violation of government rules and regulations. Negligence, or violation of government rules and regulations, for that matter, however, is not a fact, but a conclusion of law, over which only the courts have the final say. Such a conclusion binds no one until the courts have decreed so. It appears, therefore, that the principle that ignorance or mistake of fact nullifies a waiver has been misapplied in Floresca and in the case at bar. HAECID 9. CIVIL LAW; CIVIL CODE; IGNORANCE OF THE LAW EXCUSES NO ONE FROM COMPLIANCE THEREWITH (ARTICLE 3); LIMITED TO MANDATORY OR PROHIBITORY LAWS. The application of Article 3 of the Civil Code is limited to mandatory and prohibitory laws. This may be deduced from the language of the provision, which, notwithstanding a person's ignorance, does not excuse his or her compliance with the laws. The rule in Floresca allowing private respondent a choice of remedies is neither mandatory nor prohibitory. Accordingly, her ignorance thereof cannot be held against her. TIaCcD DECISION KAPUNAN, J p: At around 1:30 p.m., November 2, 1990, Jose Juego, a construction worker of D.M. Consunji, Inc., fell 14 floors from the Renaissance Tower, Pasig City to his death. THIECD PO3 Rogelio Villanueva of the Eastern Police District investigated the tragedy and filed a report dated November 25, 1990, stating that: . . . . [The] [v]ictim was rushed to [the] Rizal Medical Center in Pasig, Metro Manila where he was pronounced dead on arrival (DOA) by the attending physician, Dr. Errol de Yzo[,] at around 2:15 p.m. of the same date. Investigation disclosed that at the given time, date and place, while victim Jose A. Juego together with Jessie Jaluag and Delso Destajo [were] performing their work as carpenter[s] at the elevator core of the 14th floor of the Tower D, Renaissance Tower Building on board a [p]latform made of channel beam (steel) measuring 4.8 meters by 2 meters wide with pinulid plywood flooring and cable wires attached to its four corners and hooked at the 5 ton chain block, when suddenly, the bolt or pin which was merely inserted to connect the chain block with the [p]latform, got loose . . . causing the whole [p]latform assembly and the victim to fall down to the basement of the elevator core, Tower D of the building under construction thereby crushing the victim to death, save his two (2) companions who luckily jumped out for safety. It is thus manifest that Jose A. Juego was crushed to death when the [p]latform he was then on board and performing work, fell. And the falling of the [p]latform was due to the removal or getting loose of the pin which was merely inserted to the connecting points of the chain block and [p]latform but without a safety lock. 1 On May 9, 1991, Jose Juego's widow, Maria, filed in the Regional Trial Court (RTC) of Pasig a complaint for damages against the deceased's employer, D.M. Consunji, Inc. The employer raised, among other defenses, the widow's prior availment of the benefits from the State Insurance Fund. After trial, the RTC rendered a decision in favor of the widow Maria Juego. The dispositive portion of the RTC decision reads:

WHEREFORE, judgment is hereby rendered ordering defendant to pay plaintiff, as follows: 1. 2. 3. 4. 5. P50,000.00 for the death of Jose A. Juego. P10,000.00 as actual and compensatory damages. P464,000.00 for the loss of Jose A. Juego's earning capacity. P100,000.00 as moral damages. P20,000.00 as attorney's fees, plus the costs of suit.

SO ORDERED. 2 On appeal by D.M. Consunji, the Court of Appeals (CA) affirmed the decision of the RTC in toto. D.M. Consunji now seeks the reversal of the CA decision on the following grounds: THE APPELLATE COURT ERRED IN HOLDING THAT THE POLICE REPORT WAS ADMISSIBLE EVIDENCE OF THE ALLEGED NEGLIGENCE OF PETITIONER. THE APPELLATE COURT ERRED IN HOLDING THAT THE DOCTRINE OF RES IPSA LOQUITOR [sic] IS APPLICABLE TO PROVE NEGLIGENCE ON THE PART OF PETITIONER. THE APPELLATE COURT ERRED IN HOLDING THAT PETITIONER IS PRESUMED NEGLIGENT UNDER ARTICLE 2180 OF THE CIVIL CODE, AND THE APPELLATE COURT ERRED IN HOLDING THAT RESPONDENT IS NOT PRECLUDED FROM RECOVERING DAMAGES UNDER THE CIVIL CODE. 3 Petitioner maintains that the police report reproduced above is hearsay and, therefore, inadmissible. The CA ruled otherwise. It held that said report, being an entry in official records, is an exception to the hearsay rule. The Rules of Court provide that a witness can testify only to those facts which he knows of his personal knowledge, that is, which are derived from his perception. 4 A witness, therefore, may not testify as what he merely learned from others either because he was told or read or heard the same. Such testimony is considered hearsay and may not be received as proof of the truth of what he has learned. 5 This is known as the hearsay rule. HAICcD Hearsay is not limited to oral testimony or statements; the general rule that excludes hearsay as evidence applies to written, as well as oral statements. 6 The theory of the hearsay rule is that the many possible deficiencies, suppressions, sources of error and untrustworthiness, which lie underneath the bare untested assertion of a witness, may be best brought to light and exposed by the test of crossexamination. 7 The hearsay rule, therefore, excludes evidence that cannot be tested by cross-examination. 8 The Rules of Court allow several exceptions to the rule, 9 among which are entries in official records. Section 44, Rule 130 provides: Entries in official records made in the performance of his duty made in the performance of his duty by a public officer of the Philippines, or by a person in the performance of a duty specially enjoined by law are prima facie evidence of the facts therein stated. In Africa, et al. vs. Caltex (Phil. ), Inc., et al., 10 this Court, citing the work of Chief Justice Moran, enumerated the requisites for admissibility under the above rule: (a) that the entry was made by a public officer or by another person specially enjoined by law to do so;

(b) that it was made by the public officer in the performance of his duties, or by such other person in the performance of a duty specially enjoined by law; and (c) that the public officer or other person had sufficient knowledge of the facts by him stated, which must have been acquired by him personally or through official information. The CA held that the police report meets all these requisites. Petitioner contends that the last requisite is not present. The Court notes that PO3 Villanueva, who signed the report in question, also testified before the trial court. In Rodriguez vs. Court of Appeals, 11 which involved a Fire Investigation Report, the officer who signed the fire report also testified before the trial court. This Court held that the report was inadmissible for the purpose of proving the truth of the statements contained in the report but admissible insofar as it constitutes part of the testimony of the officer who executed the report. . . . . Since Major Enriquez himself took the witness stand and was available for cross-examination, the portions of the report which were of his personal knowledge or which consisted of his perception and conclusions were not hearsay. The rest of the report, such as the summary of the statements of the parties based on their sworn statements (which were annexed to the Report) as well as the latter, having been included in the first purpose of the offer [as part of the testimony of Major Enriquez], may then be considered as independently relevant statements which were gathered in the course of the investigation and may thus be admitted as such, but not necessarily to prove the truth thereof. It has been said that: "Where regardless of the truth or falsity of a statement, the fact that it has been made is relevant, the hearsay rule does not apply, but the statement may be shown. Evidence as to the making of such statement is not secondary but primary, for the statement itself may constitute a fact in issue, or be circumstantially relevant as to the existence of such a fact." When Major Enriquez took the witness stand, testified for petitioners on his Report and made himself available for crossexamination by the adverse party, the Report, insofar as it proved that certain utterances were made (but not their truth), was effectively removed from the ambit of the aforementioned Section 44 of Rule 130. Properly understood, this section does away with the testimony in open court of the officer who made the official record, considers the matter as an exception to the hearsay rule and makes the entries in said official record admissible in evidence as prima facie evidence of the facts therein stated. The underlying reasons for this exceptionary rule are necessity and trustworthiness, as explained in Antillon v. Barcelon. The litigation is unlimited in which testimony by officials is daily needed; the occasions in which the officials would be summoned from his ordinary duties to declare as a witness are numberless. The public officers are few in whose daily work something is not done in which testimony is not needed from official sources. Were there no exception for official statements, hosts of officials would be found devoting the greater part of their time to attending as witnesses in court or delivering deposition before an officer. The work of administration of government and the interest of the public having business with officials would alike suffer in consequence. For these reasons, and for many others, a certain verity is accorded such documents, which is not extended to private documents. (3 Wigmore on Evidence, Sec. 1631). AEDCHc The law reposes a particular confidence in public officers that it presumes they will discharge their several trusts with accuracy and fidelity; and, therefore, whatever acts they do in discharge of their duty may be given in evidence and shall be taken to be true under such a degree of caution as to the nature and circumstances of each case may appear to require. It would have been an entirely different matter if Major Enriquez was not presented to testify on his report. In that case the applicability of Section 44 of Rule 143 would have been ripe for determination, and this Court would have agreed with the Court of Appeals that said report was inadmissible since the aforementioned third requisite was not satisfied. The statements given by the sources of information of Major Enriquez failed to qualify as "official information," there being no showing that, at the very least, they were under a duty to give the statements for record. Similarly, the police report in this case is inadmissible for the purpose of proving the truth of the statements contained therein but is admissible insofar as; it constitutes part of the testimony of PO3 Villanueva. In any case, the Court holds that portions of PO3 Villanueva's testimony which were of his personal knowledge suffice to prove that Jose Juego indeed died as a result of the elevator crash. PO3 Villanueva had seen Juego's remains at the morgue, 12 making the latter's death beyond dispute. PO3 Villanueva also conducted an ocular inspection of the premises of the building

the day after the incident 13 and saw the platform for himself. 14 He observed that the platform was crushed 15 and that it was totally damaged. 16 PO3 Villanueva also required Garcia and Fabro to bring the chain block to the police headquarters. Upon inspection, he noticed that the chain was detached from the lifting machine, without any pin or bolt. 17 What petitioner takes particular exception to is PO3 Villanueva's testimony that the cause of the fall of the platform was the loosening of the bolt from the chain block. It is claimed that such portion of the testimony is mere opinion. Subject to certain exceptions, 18 the opinion of a witness is generally not admissible. 19 Petitioner's contention, however, loses relevance in the face of the application of res ipsa loquitur by the CA. The effect of the doctrine is to warrant a presumption or inference that the mere fall of the elevator was a result of the person having charge of the instrumentality was negligent. As a rule of evidence, the doctrine of res ipsa loquitur is peculiar to the law of negligence which recognizes that prima facie negligence may be established without direct proof and furnishes a substitute for specific proof of negligence. 20 The concept of res ipsa loquitur has been explained in this wise: While negligence is not ordinarily inferred or presumed, and while the mere happening of an accident or injury will not generally give rise to an inference or presumption that it was due to negligence on defendant's part, under the doctrine of res ipsa loquitur, which means, literally, the thing or transaction speaks for itself, or in one jurisdiction, that the thing or instrumentality speaks for itself, the facts or circumstances accompanying an injury may be such as to raise a presumption, or at least permit an inference of negligence on the part of the defendant, or some other person who is charged with negligence. . . . where it is shown that the thing or instrumentality which caused the injury complained of was under the control or management of the defendant, and that the occurrence resulting in the injury was such as in the ordinary course of things would not happen if those who had its control or management used proper care, there is sufficient evidence, or, as sometimes stated, reasonable evidence, in the absence of explanation by the defendant, that the injury arose from or was caused by the defendant's want of care. 21 One of the theoretical bases for the doctrine is its necessity, i.e., that necessary evidence is absent or not available. 22 The res ipsa loquitur doctrine is based in part upon the theory that the defendant in charge of the instrumentality which causes the injury either knows the cause of the accident or has the best opportunity of ascertaining it and that the plaintiff has no such knowledge, and therefore is compelled to allege negligence in general terms and to rely upon the proof of the happening of the accident in order to establish negligence. The inference which the doctrine permits is grounded upon the fact that the chief evidence of the true cause, whether culpable or innocent, is practically accessible to the defendant but inaccessible to the injured person. It has been said that the doctrine of res ipsa loquitur furnishes a bridge by which a plaintiff, without knowledge of the cause, reaches over to defendant who knows or should know the cause, for any explanation of care exercised by the defendant in respect of the matter of which the plaintiff complains. The res ipsa loquitur doctrine, another court has said, is a rule of necessity, in that it proceeds on the theory that under the peculiar circumstances in which the doctrine is applicable, it is within the power of the defendant to show that there was no negligence on his part, and direct proof of defendant's negligence is beyond plaintiff's power. Accordingly, some courts add to the three prerequisites for the application of the res ipsa loquitur doctrine the further requirement that for the res ipsa loquitur doctrine to apply, it must appear that the injured party had no knowledge or means of knowledge as to the cause of the accident, or that the party to be charged with negligence has superior knowledge or opportunity for explanation of the accident. 23 The CA held that all the requisites of res ipsa loquitur are present in the case at bar: SHIETa There is no dispute that appellee's husband fell down from the 14th floor of a building to the basement while he was working with appellant's construction project, resulting to his death. The construction site is within the exclusive control and management of appellant. It has a safety engineer, a project superintendent, a carpenter leadman and others who are in complete control of the situation therein. The circumstances of any accident that would occur therein are peculiarly within the knowledge of the appellant or its employees. On the other hand, the appellee is not in a position to know what caused the accident. Res ipsa loquitur is a rule of necessity and it applies where evidence is absent or not readily available, provided the following requisites are present: (1) the accident was of a kind which does not ordinarily occur unless someone is negligent;

(2) the instrumentality or agency which caused the injury was under the exclusive control of the person charged with negligence; and (3) the injury suffered must not have been due to any voluntary action or contribution on the part of the person injured. . . . . No worker is going to fall from the 14th floor of a building to the basement while performing work in a construction site unless someone is negligent[;] thus, the first requisite for the application of the rule of res ipsa loquitur is present. As explained earlier, the construction site with all its paraphernalia and human resources that likely caused the injury is under the exclusive control and management of appellant[;] thus[,] the second requisite is also present. No contributory negligence was attributed to the appellee's deceased husband[;] thus[,] the last requisite is also present. All the requisites for the application of the rule of res ipsa loquitur are present, thus a reasonable presumption or inference of appellant's negligence arises. . . . 24 Petitioner does not dispute the existence of the requisites for the application of res ipsa loquitur, but argues that the presumption or inference that it was negligent did not arise since it "proved that it exercised due care to avoid the accident which befell respondent's husband." Petitioner apparently misapprehends the procedural effect of the doctrine. As stated earlier, the defendant's negligence is presumed or inferred 25 when the plaintiff establishes the requisites for the application of res ipsa loquitur. Once the plaintiff makes out a prima facie case of all the elements, the burden then shifts to defendant to explain. 26 The presumption or inference may be rebutted or overcome by other evidence and, under appropriate circumstances a disputable presumption, such as that of due care or innocence, may outweigh the inference. 27 It is not for the defendant to explain or prove its defense to prevent the presumption or inference from arising. Evidence by the defendant of say, due care, comes into play only after the circumstances for the application of the doctrine has been established. In any case, petitioner cites the sworn statement of its leadman Ferdinand Fabro executed before the police investigator as evidence of its due care. According to Fabro's sworn statement, the company enacted rules and regulations for the safety and security of its workers. Moreover, the leadman and the bodegero inspect the chain block before allowing its use. It is ironic that petitioner relies on Fabro's sworn statement as proof of its due care but, in arguing that private respondent failed to prove negligence on the part of petitioner's employees, also assails the same statement for being hearsay. Petitioner is correct. Fabro's sworn statement is hearsay and inadmissible. Affidavits are inadmissible as evidence under the hearsay rule, unless the affiant is placed on the witness stand to testify thereon. 28 The inadmissibility of this sort of evidence is based not only on the lack of opportunity on the part of the adverse party to cross-examine the affiant, but also on the commonly known fact that, generally, an affidavit is not prepared by the affiant himself but by another who uses his own language in writing the affiant's statements which may either be omitted or misunderstood by the one writing them. 29 Petitioner, therefore, cannot use said statement as proof of its due care any more than private respondent can use it to prove the cause of her husband's death. Regrettably, petitioner does not cite any other evidence to rebut the inference or presumption of negligence arising from the application of res ipsa loquitur, or to establish any defense relating to the incident. Next, petitioner argues that private respondent had previously availed of the death benefits provided under the Labor Code and is, therefore, precluded from claiming from the deceased's employer damages under the Civil Code. Article 173 of the Labor Code states: ARTICLE 173. Extent of liability. Unless otherwise provided, the liability of the State Insurance Fund under this Title shall be exclusive and in place of all other liabilities of the employer to the employee, his dependents or anyone otherwise entitled to receive damages on behalf of the employee or his dependents. The payment of compensation under this Title shall not bar the recovery of benefits as provided for in Section 699 of the Revised Administrative Code, Republic Act Numbered Eleven hundred sixty-one, as amended, Republic Act Numbered Six hundred ten, as amended, Republic Act Numbered Fortyeight hundred sixty-four as amended, and other laws whose benefits are administered by the System or by other agencies of the government. The precursor of Article 173 of the Labor Code, Section 5 of the Workmen's Compensation Act, provided that: DcCEHI

SECTION 5. Exclusive right to compensation. The rights -and remedies granted by this Act to an employee by reason of a personal injury entitling him to compensation shall exclude all other rights and remedies accruing to the employee, his personal representatives, dependents or nearest of kin against the employer under the Civil Code and other laws because of said injury . . . . Whether Section 5 of the Workmen's Compensation Act allowed recovery under said Act as well as under the Civil Code used to be the subject of conflicting decisions. The Court finally settled the matter in Floresca vs. Philex Mining Corporation, 30 which involved a cave-in resulting in the death of the employees of the Philex Mining Corporation. Alleging that the mining corporation, in violation of government rules and regulations, failed to take the required precautions for the protection of the employees, the heirs of the deceased employees filed a complaint against Philex Mining in the Court of First Instance (CFI). Upon motion of Philex Mining, the CFI dismissed the complaint for lack of jurisdiction. The heirs sought relief from this Court. Addressing the issue of whether the heirs had a choice of remedies, majority of the Court En Banc, 31 following the rule in Pacaa vs. Cebu Autobus Company, held in the affirmative. WE now come to the query as to whether or not the injured employee or his heirs in case of death have a right of selection or choice of action between availing themselves of the worker's right under the Workmen's Compensation Act and suing in the regular courts under the Civil Code for higher damages (actual, moral and exemplary) from the employers by virtue of the negligence or fault of the employers or whether they may avail themselves cumulatively of both actions, i.e., collect the limited compensation under the Workmen's Compensation Act and sue in addition for damages in the regular courts. In disposing of a similar issue, this Court in Pacaa vs. Cebu Autobus Company, 32 SCRA 442, ruled that an injured worker has a choice of either to recover from the employer the fixed amounts set by the Workmen's Compensation Act or to prosecute an ordinary civil action against the tort-feasor for higher damages but he cannot pursue both courses of action simultaneously. [Emphasis supplied.] Nevertheless, the Court allowed some of the petitioners in said case to proceed with their suit under the Civil Code despite having availed of the benefits provided under the Workmen's Compensation Act. The Court reasoned: With regard to the other petitioners, it was alleged by Philex in its motion to dismiss dated May 14, 1968 before the court a quo, that the heirs of the deceased employees, namely Emerito Obra, Larry Villar, Jr., Aurelio Lanuza, Lorenzo Isla and Saturnino submitted notices and claims for compensation to the Regional Office No. 1 of the then Department of Labor and all of them have been paid in full as of August 25, 1967, except Saturnino Martinez whose heirs decided that they be paid in installments . . . . Such allegation was admitted by herein petitioners in their opposition to the motion to dismiss dated May 27, 1968 . . . in the lower court, but they set up the defense that the claims were filed under the Workmen's Compensation Act before they learned of the official report of the committee created to investigate the accident which established the criminal negligence and violation of law by Philex, and which report was forwarded by the Director of Mines to then Executive Secretary Rafael Salas in a letter dated October 19, 1967 only . . . . WE hold that although the other petitioners had received the benefits under the Workmen's Compensation Act, such may not preclude them from bringing an action before the regular court because they became cognizant of the fact that Philex has been remiss in its contractual obligations with the deceased miners only after receiving compensation under the Act. Had petitioners been aware of said violation of government rules and regulations by Philex, and of its negligence, they would not have sought redress under the Workmen's Compensation Commission which awarded a lesser amount for compensation. The choice of the first remedy was based on ignorance or a mistake of fact, which nullifies the choice as it was not an intelligent choice. The case should therefore be remanded to the lower court for further proceedings. However, should the petitioners be successful in their bid before the lower court, the payments made under the Workmen's Compensation Act should be deducted from the damages that may be decreed in their favor. [Emphasis supplied.] The ruling in Floresca providing the claimant a choice of remedies was reiterated in Ysmael Maritime Corporation vs. Avelino, 32 Vda. de Severo vs. Feliciano-Go, 33 and Marcopper Mining Corp. vs. Abeleda. 34 In the last case, the Court again recognized that a claimant who had been paid under the Act could still sue under the Civil Code. The Court said: aIHCSA In the Robles case, it was held that claims for damages sustained by workers in the course of their employment could be filed only under the Workmen's Compensation Law, to the exclusion of all further claims under other laws. In Floresca, this doctrine was abrogated in favor of the new rule that the claimants may invoke either the Workmen's Compensation Act or the

provisions of the Civil Code, subject to the consequence that the choice of one remedy will exclude the other and that the acceptance of compensation under the remedy chosen will preclude a claim for additional benefits under the other remedy. The exception is where a claimant who has already been paid under the Workmen's Compensation Act may still sue for damages under the Civil Code on the basis of supervening facts or developments occurring after he opted for the first remedy. (Emphasis supplied.) Here, the CA held that private respondent's case came under the exception because private respondent was unaware of petitioner's negligence when she filed her claim for death benefits from the State Insurance Fund. Private respondent filed the civil complaint for damages after she received a copy of the police investigation report and the Prosecutor's Memorandum dismissing the criminal complaint against petitioner's personnel. While stating that there was no negligence attributable to the respondents in the complaint, the prosecutor nevertheless noted in the Memorandum that, "if at all," the "case is civil in nature." The CA thus applied the exception in Floresca: . . . We do not agree that appellee has knowledge of the alleged negligence of appellant as early as November 25, 1990, the date of the police investigator's report. The appellee merely executed her sworn statement before the police investigator concerning her personal circumstances, her relation to the victim, and her knowledge of the accident. She did not file the complaint for "Simple Negligence Resulting to Homicide" against appellant's employees. It was the investigator who recommended the filing of said case and his supervisor referred the same to the prosecutor's office. This. is a standard operating procedure for police investigators which appellee may not have even known. This may explain why no complainant is mentioned in the preliminary statement of the public prosecutor in her memorandum dated February 6, 1991, to wit: "Respondent Ferdinand Fabro . . . are being charged by complaint of "Simple Negligence Resulting to Homicide." It is also possible that the appellee did not have a chance to appear before the public prosecutor as can be inferred from the following statement in said memorandum: "Respondents who were notified pursuant to Law waived their rights to present controverting evidence," thus there was no reason for the public prosecutor to summon the appellee. Hence, notice of appellant's negligence cannot be imputed on appellee before she applied for death benefits under ECC or before she received the first payment therefrom. Her using the police investigation report to support her complaint filed on May 9, 1991 may just be an afterthought after receiving a copy of the February 6, 1991 Memorandum of the Prosecutor's Office dismissing the criminal complaint for insufficiency of evidence, stating therein that: "The death of the victim is not attributable to any negligence on the part of the respondents. If at all and as shown by the records this case is civil in nature." (Emphasis supplied.) Considering the foregoing, We are more inclined to believe appellee's allegation that she learned about appellant's negligence only after she applied for and received the benefits under ECC. This is a mistake of fact that will make this case fall under the exception held in the Floresca ruling. 35 The CA further held that not only was private respondent ignorant of the facts, but of her rights as well: . . . . Appellee [Maria Juego] testified that she has reached only elementary school for her educational attainment; that she did not know what damages could be recovered from the death of her husband; and that she did not know that she may also recover more from the Civil Code than from the ECC. . . . . 36 Petitioner impugns the foregoing rulings. It contends that private respondent "failed to allege in her complaint that her application and receipt of benefits from the ECC were attended by ignorance or mistake of fact. Not being an issue submitted during the trial, the trial court had no authority to hear or adjudicate that issue." Petitioner also claims that private respondent could not have been ignorant of the facts because as early as November 28, 1990, private respondent was the complainant in a criminal complaint for "Simple Negligence Resulting to Homicide" against petitioner's employees. On February 6, 1991, two months before the filing of the action in the lower court, Prosecutor Lorna Lee issued a resolution finding that, although there was insufficient evidence against petitioner's employees, the case was "civil in nature." These purportedly show that prior to her receipt of death benefits from the ECC on January 2, 1991 and every month thereafter, private respondent also knew of the two choices of remedies available to her and yet she chose to claim and receive the benefits from the ECC. IcTEaC When a party having knowledge of the facts makes an election between inconsistent remedies, the election is final and bars any action, suit, or proceeding inconsistent with the elected remedy, in the absence of fraud by the other party. The first act of election acts as a bar. 37 Equitable in nature, the doctrine of election of remedies is designed to mitigate possible unfairness to

both parties. It rests on the moral premise that it is fair to hold people responsible for their choices. The purpose of the doctrine is not to prevent any recourse to any remedy, but to prevent a double redress for a single wrong. 38 The choice of a party between inconsistent remedies results in a waiver by election. Hence, the rule in Floresca that a claimant cannot simultaneously pursue recovery under the Labor Code and prosecute an ordinary course of action under the Civil Code. The claimant, by his choice of one remedy, is deemed to have waived the other. Waiver is the intentional relinquishment of a known right. 39 [It] is an act of understanding that presupposes that a party has knowledge of its rights, but chooses not to assert them. It must be generally shown by the party claiming a waiver that the person against whom the waiver is asserted had at the time knowledge, actual or constructive, of the existence of the party's rights or of all material facts upon which they depended. Where one lacks knowledge of a right, there is no basis upon which waiver of it can rest. Ignorance of a material fact negates waiver, and waiver cannot be established by a consent given under a mistake or misapprehension of fact. A person makes a knowing and intelligent waiver when that person knows that a right exists and has adequate knowledge upon which to make an intelligent decision. Waiver requires a knowledge of the facts basic to the exercise of the right waived, with an awareness of its consequences. That a waiver is made knowingly and intelligently must be illustrated on the record or by the evidence. 40 That lack of knowledge of a fact that nullifies the election of a remedy is the basis for the exception in Floresca. It is in light of the foregoing principles that we address petitioner's contentions. Waiver is a defense, and it was not incumbent upon private respondent, as plaintiff, to allege in her complaint that she had availed of benefits from the ECC. It is, thus, erroneous for petitioner to burden private respondent with raising waiver as an issue. On the contrary, it is the defendant who ought to plead waiver, as petitioner did in pages 2-3 of its Answer; 41 otherwise, the defense is waived. It is, therefore, perplexing for petitioner to now contend that the trial court had no jurisdiction over the issue when petitioner itself pleaded waiver in the proceedings before the trial court. Does the evidence show that private respondent knew of the facts that led to her husband's death and the rights pertaining to a choice of remedies? It bears stressing that what negates waiver is lack of knowledge or a mistake of fact. In this case, the "fact" that served as a basis for nullifying the waiver is the negligence of petitioner's employees, of which private respondent purportedly learned only after the prosecutor issued a resolution stating that there may be civil liability. In Floresca, it was the negligence of the mining corporation and its violation of government rules and regulations. Negligence, or violation of government rules and regulations, for that matter, however, is not a fact, but a conclusion of law, over which only the courts have the final say. Such a conclusion binds no one until the courts have decreed so. It appears, therefore, that the principle that ignorance or mistake of fact nullifies a waiver has been misapplied in Floresca and in the case at bar. In any event, there is no proof that private respondent knew that her husband died in the elevator crash when on November 15, 1990 she accomplished her application for benefits from the ECC. The police investigation report is dated November 25, 1990, 10 days after the accomplishment of the form. Petitioner filed the application in her behalf on November 27, 1990. There is also no showing that private respondent knew of the remedies available to her when the claim before the ECC was filed. On the contrary, private respondent testified that she was not aware of her rights. Petitioner, though, argues that under Article 3 of the Civil Code, ignorance of the law excuses no one from compliance therewith. As judicial decisions applying or interpreting the laws or the Constitution form part of the Philippine legal system (Article 8, Civil Code), private respondent cannot claim ignorance of this Court's ruling in Floresca allowing a choice of remedies. AaSHED The argument has no merit. The application of Article 3 is limited to mandatory and prohibitory laws. 42 This may be deduced from the language of the provision, which, notwithstanding a person's ignorance, does not excuse his or her compliance with

the laws. The rule in Floresca allowing private respondent a choice of remedies is neither mandatory nor prohibitory. Accordingly, her ignorance thereof cannot be held against her. Finally, the Court modifies the affirmance of the award of damages. The records do not indicate the total amount private respondent ought to receive from the ECC, although it appears from Exhibit "K" 43 that she received P3,581.85 as initial payment representing the accrued pension from November 1990 to March 1991. Her initial monthly pension, according to the same Exhibit "K," was P596.97 and present total monthly pension was P716.40. Whether the total amount she will eventually receive from the ECC is less than the sum of P644,000.00 in total damages awarded by the trial court is subject to speculation, and the case is remanded to the trial court for such determination. Should the trial court find that its award is greater than that of the ECC, payments already received by private respondent under the Labor Code shall be deducted from the trial court's award of damages. Consistent with our ruling in Floresca, this adjudication aims to prevent double compensation. WHEREFORE, the case is REMANDED to the Regional Trial Court of Pasig City to determine whether the award decreed in its decision is more than that of the ECC. Should the award decreed by the trial court be greater than that awarded by the ECC, payments already made to private respondent pursuant to the Labor Code shall be deducted therefrom. In all other respects, the Decision of the Court of Appeals is AFFIRMED. SO ORDERED.

SECOND DIVISION [G.R. No. 193484. January 18, 2012.] HYPTE R. AUJERO, petitioner, vs. PHILIPPINE COMMUNICATIONS SATELLITE CORPORATION, respondent. DECISION REYES, J p: This is a Petition for Review under Rule 45 of the Rules of Court from the November 12, 2009 Decision 1 and July 28, 2010 Resolution 2 of the Court of Appeals (CA) in CA-G.R. SP No. 107233 entitled "Hypte R. Aujero v. National Labor Relations Commission and Philippine Communications Satellite Corporation." In its November 12, 2009 Decision, the CA dismissed the petitioner's petition for certiorari under Rule 65 of the Rules of Court from the National Labor Relations Commission's (NLRC) July 4, 2008 and September 29, 2008 Resolutions, the dispositive portion of which states: WHEREFORE, the petition is DISMISSED. The assailed Resolutions dated July 4, 2008 and September 29, 2008 of public respondent National Labor Relations Commission in NLRC NCR Case No. 00-07-08921-2004 [NLRC NCR CA No. 049644-06] are AFFIRMED. DTcHaA SO ORDERED. 3 The petitioner filed a Motion for Reconsideration from the above Decision but this was likewise denied by the CA in its July 28, 2010 Resolution. The Antecedent Facts It was in 1967 that the petitioner started working for respondent Philippine Communications Satellite Corporation (Philcomsat) as an accountant in the latter's Finance Department. On August 15, 2001 or after thirty-four (34) years of service, the petitioner applied for early retirement. His application for retirement was approved, effective September 15, 2001, entitling him to receive retirement benefits at a rate equivalent to one and a half of his monthly salary for every year of service. At that time, the petitioner was Philcomsat's Senior Vice-President with a monthly salary of Two Hundred SeventyFour Thousand Eight Hundred Five Pesos (P274,805.00). 4 On September 12, 2001, the petitioner executed a Deed of Release and Quitclaim 5 in Philcomsat's favor, following his receipt from the latter of a check in the amount of Nine Million Four Hundred Thirty-Nine Thousand Three Hundred Twenty-Seven and 91/100 Pesos (P9,439,327.91). 6 Almost three (3) years thereafter, the petitioner filed a complaint for unpaid retirement benefits, claiming that the actual amount of his retirement pay is Fourteen Million Fifteen Thousand and Fifty-Five Pesos (P14,015,055.00) and the P9,439,327.91 he received from Philcomsat as supposed settlement for all his claims is unconscionable, which is more than enough reason to declare his quitclaim as null and void. According to the petitioner, he had no choice but to accept a lesser amount as he was in dire need thereof and was all set to return to his hometown and he signed the quitclaim despite the considerable deficiency as no single centavo would be released to him if he did not execute a release and waiver in Philcomsat's favor. 7 aHSAIT The petitioner claims that his right to receive the full amount of his retirement benefits, which is equivalent to one and a half of his monthly salary for every year of service, is provided under the Retirement Plan that Philcomsat created on January 1, 1977 for the benefit of its employees. 8 On November 3, 1997, Philcomsat and the United Coconut Planters Bank (UCPB) executed a Trust Agreement, where UCPB, as trustee, shall hold, administer and manage the respective contributions of Philcomsat and its employees, as well as the income derived from the investment thereof, for and on behalf of the beneficiaries of the Retirement Plan. 9 The petitioner claims that Philcomsat has no right to withhold any portion of his retirement benefits as the trust fund created pursuant to the Retirement Plan is for the exclusive benefit of Philcomsat employees and Philcomsat had expressly recognized

that it has no right or claim over the trust fund even on the portion pertaining to its contributions. 10 As Section 4 of the Trust Agreement provides: Section 4. The Companies, in accordance with the provisions of the Plan, hereby waive all their rights to their contributions in money or property which are and will be paid or transferred to the Trust Fund, and no person shall have any right in, or with respect to, the Trust Fund or any part thereof except as expressly provided herein or in the Plan. At no time, prior to the satisfaction of all liabilities with respect to the participants and their beneficiaries under the Plan, shall any part of the corpus or income of the Fund be used for or diverted to purposes other than for the exclusive benefit of Plan participants and their beneficiaries. 11 cDTSHE The petitioner calls attention to the August 15, 2001 letter of Philcomsat's Chairman and President, Mr. Carmelo Africa, addressed to UCPB for the release of P9,439,327.91 to the petitioner and P4,575,727.09 to Philcomsat, which predated the execution of his quitclaim on September 12, 2001. 12 According to the petitioner, this indicates Philcomsat's pre-conceived plans to deprive him of a significant portion of his retirement pay. On May 31, 2006, Labor Arbiter Joel S. Lustria (LA Lustria) issued a Decision 13 in the petitioner's favor, directing Philcomsat to pay him the amount of P4,575,727.09 and P274,805.00, representing the balance of his retirement benefits and salary for the period from August 15 to September 15, 2001, respectively. LA Lustria found it hard to believe that the petitioner would voluntary waive a significant portion of his retirement pay. He found the consideration supporting the subject quitclaim unconscionable and ruled that the respondent failed to substantiate its claim that the amount received by the petitioner was a product of negotiations between the parties. Thus: It would appear from the tenor of the letter that, rather that the alleged agreement, between complainant and respondent, respondent is claiming payment for an "outstanding due to Philcomsat" out of the retirement benefits of complainant. This could hardly be considered as proof of an agreement to reduce complainant's retirement benefits. Absent any showing of any agreement or authorization, the deductions from complainant's retirement benefits should be considered as improper and illegal. If we were to give credence to the claim of respondent, it would appear that complainant has voluntarily waived a total amount of [P]4,575,727.09. Given the purpose of retirement benefits to provide for a retiree a source of income for the remainder of his years, it defies understanding how complainant could accept such an arrangement and lose more than [P]4.5 million in the process. One can readily see the unreasonableness of such a proposition. By the same token, the Quitclaim and Waiver over benefits worth millions is apparently unconscionable and unacceptable under normal circumstances. The Supreme Court has consistently ruled that waivers must be fair, reasonable, and just and must not be unconscionable on its face. The explanation of the complainant that he was presented with a lower amount on pain that the entire benefits will not be released is more believable and consistent with evidence. We, therefore, rule against the effectivity of the waiver and quitclaim, thus, complainant is entitled to the balance of his retirement benefits in the amount of [P]4,575,727.09. 14 HISAET In its July 4, 2008 Resolution, 15 the NLRC granted Philcomsat's appeal and reversed and set aside LA Lustria's May 31, 2006 Decision. The NLRC dismissed the petitioner's complaint for unpaid retirement benefits and salary in consideration of the Deed of Release and Quitclaim he executed in September 12, 2001 following his receipt from Philcomsat of the amount of P9,439,327.91, which constitutes the full settlement of all his claims against Philcomsat. According to the NLRC, the petitioner failed to allege, much less, adduce evidence that Philcomsat employed means to vitiate his consent to the quitclaim. The petitioner is well-educated, a licensed accountant and was Philcomsat's Senior Vice-President prior to his retirement; he cannot therefore claim that he signed the quitclaim without understanding the consequences and implications thereof. The relevant portions of the NLRC's July 4, 2008 Resolution states: After analyzing the antecedent, contemporaneous and subsequent facts surrounding the alleged underpayment of retirement benefits, We rule that respondent-appellant have no more obligation to the complainant-appellee. The complainant-appellee willingly received the check for the said amount, without having filed any objections nor reservations thereto, and even executed and signed a Release and Quitclaim in favor of the respondent-appellant. Undoubtedly, the quitclaim the complainant-appellee signed is valid. Complainant-appellee has not denied at any time its due execution and authenticity. He never imputed claims of coercion, undue influence, or fraud against the respondent-appellant. His statement in his reply to the respondent-appellant's position paper that the quitclaim is void alleging that it was obtained

through duress is only an afterthought to make his claim appear to be convincing. If it were true, complainant-appellee should have asserted such fact from the very beginning. Also, there was no convincing proof shown by the complainant-appellee to prove existence of duress exerted against him. His stature and educational attainment would both negate that he can be forced into something against his will. ESTCDA It should be stressed that complainant-appellee even waited for a period of almost three (3) years before he filed the complaint. If he really felt aggrieved by the amount he received, prudence dictates that he immediately would call the respondent-appellant's attention and at the earliest opportune shout his objections, rather than wait for years, before deciding to claim his supposed benefits, [e]specially that his alleged entitlement is a large sum of money. Thus, it is evident that the filing of the instant case is a clear case of afterthought, and that complainant-appellee simply had a change of mind. This We cannot allow. xxx xxx xxx

In the instant case, having willingly signed the Deed of Release and Quitclaim dated September 12, 2001, it is hard to conclude that the complainant-appellee was merely forced by the necessity to execute the quitclaim. Complainant-appellee is not a gullible or unsuspecting person who can easily be tricked or inveigled and, thus, needs the extra protection of law. He is welleducated and a highly experienced man. The release and quitclaim executed by the complainant-appellee is therefore considered valid and binding on him and the respondent-appellant. He is already estopped from questioning the same. 16 Philcomsat's appeal to the NLRC from LA Lustria's May 31, 2006 Decision was filed and its surety bond posted beyond the prescribed period of ten (10) days. On June 20, 2006, a copy of LA Lustria's Decision was served on Maritess Querubin (Querubin), one of Philcomsat's executive assistants, as Philcomsat's counsel and the executive assistant assigned to her were both out of the office. It was only the following day that Querubin gave a copy of the said Decision to the executive assistant of Philcomsat's counsel, leading the latter to believe that it was only then that the said Decision had been served. In turn, this led Philcomsat's counsel to believe that it was on June 21, 2006 that the ten (10) day-period started to run. SEDIaH Having in mind that the delay was only one (1) day and the explanation offered by Philcomsat's counsel, the NLRC disregarded Philcomsat's procedural lapse and proceeded to decide the appeal on its merits. Thus: It appears that on June 20[,] 2006[,] copy of the Decision was received by one (Maritess) who is not the Secretary of respondents-appellants' counsel and therefore not authorized to receive such document. It was only the following day, June 21, 2006, that respondents-appellants['] counsel actually received the Decision which was stamped received on said date. Verily, counsel has until July 3, 2006 within which to perfect the appeal, which he did. In PLDT vs. NLRC, et al., G.R. No. 60250, March 26, 1984, the Honorable Supreme Court held that: "where notice of the Decision was served on the receiving station at the ground floor of the defendant's company building, and received much later at the office of the legal counsel on the ninth floor of said building, which was his address of record, service of said decision has taken effect from said later receipt at the aforesaid office of its legal counsel." Be that as it may, the provisions of Section 10, Rule VII of the NLRC Rules of Procedure, states, that: HAEDIS "SECTION 10. TECHNICAL RULES NOT BINDING. The rules of procedure and evidence prevailing in courts of law and equity shall not be controlling and the Commission shall use every and all reasonable means to ascertain the facts in each case speedily and objectively, without regard to technicalities of law or procedure, all in the interest of due process. . . ." Additionally, the Supreme Court has allowed appeals from decisions of the Labor Arbiter to the NLRC, even if filed beyond the reglementary period, in the interest of justice. Moreover, under Article 218 (c) of the Labor Code, the NLRC may, in the exercise of its appellate powers, correct, amend or waive any error, defect or irregularity whether in substance or in form. Further, Article 221 of the same provides that: In any proceedings before the Commission or any of the Labor Arbiters, the rules of evidence prevailing in courts of law or equity shall not be controlling and it is the spirit and intention of this Code that the Commission and its members and the Labor Arbiters shall use in each case speedily and objectively and without regard to technicalities of law or procedure, all in the interest of due process. 17 In his petition for certiorari under Rule 65 of the Rules of Court to the CA, the petitioner accused the NLRC of grave abuse of discretion in giving due course to the respondent's belated appeal by relaxing the application of one of the fundamental requirements of appeal. An appeal, being a mere statutory right, should be exercised in a manner that strictly conforms to the

prescribed procedure. As of July 3, 2006, or when Philcomsat filed its appeal and posted its surety bond, LA Lustria's Decision had become final and executory and Philcomsat's counsel's failure to verify when the copy of said Decision was actually received does not constitute excusable negligence. The petitioner likewise anchored his allegation of grave abuse of discretion against the NLRC on the latter's refusal to strike as invalid the quitclaim he executed in Philcomsat's favor. According to the petitioner, his retirement pay amounts to P14,015,055.00 and P9,439,327.91 he received from Philcomsat as supposed settlement for all his claims against it is unconscionable and this is more than enough reason to declare his quitclaim as null and void. By way of the assailed Decision, the CA found no merit in the petitioner's claims, holding that the NLRC did not act with grave abuse of discretion in giving due course to the respondent's appeal. IcCDAS The Supreme Court has ruled that where a copy of the decision is served on a person who is neither a clerk nor one in charge of the attorney's office, such service is invalid. In the case at bar, it is undisputed that Maritess Querubin, the person who received a copy of the Labor Arbiter's decision, was neither a clerk of Atty. Yanzon, private respondent's counsel, nor a person in charge of Atty. Yanzon's office. Hence, her receipt of said decision on June 20, 2006 cannot be considered as notice to Atty. Yanzon. Since a copy of the decision was actually delivered by Maritess to Atty. Yanzon's secretary only on June 21, 2006, it was only on this date that the ten-day period for the filing of private respondent's appeal commenced to run. Thus, private respondent's July 3, 2006 appeal to the NLRC was seasonably filed. Similarly, the provision of Article 223 of the Labor Code requiring the posting of a bond for the perfection of an appeal of a monetary award must be given liberal interpretation in line with the desired objective of resolving controversies on the merits. If only to achieve substantial justice, strict observance of the reglementary periods may be relaxed if warranted. However, this liberal interpretation must be justified by substantial compliance with the rule. As the Supreme Court ruled in Buenaobra v. Lim King Guan: cAHIST xxx xxx xxx

We note that in the instant case, private respondent substantially complied with the filing of its appeal and the required appeal bond on July 3, 2006 the next working day after July 1, 2006, the intervening days between the said two dates being a Saturday and a Sunday. Substantial justice dictates that the present case be decided on the merits, especially since there was a mere one-day delay in the filing by private respondent of its appeal and appeal bond with the NLRC. . . . . 18 (citation omitted) The CA further ruled that the NLRC was correct in upholding the validity of the petitioner's quitclaim. Thus: In the same vein, this Court finds that the NLRC did not act with grave abuse of discretion amounting to lack or excess of jurisdiction in declaring as valid the Deed of Release and Quitclaim dated September 12, 2001 absolving private respondent from liability arising from any and all suits, claims, demands or other causes of action of whatever nature in consideration of the amount petitioner received in connection with his retirement signed by petitioner. . . . xxx xxx xxx

The assertion of petitioner that the Deed of Release and Quitclaim he signed should be struck down for embodying unconscionable terms is simply untenable. Petitioner himself admits that he has received the amount of [P]9,327,000.00 representing his retirement pay and other benefits from private respondent. By no stretch of the imagination could the said amount be considered unconscionably low or shocking to the conscience, so as to warrant the invalidation of the Deed of Release and Quitclaim. Granting that the source of the retirement pay of petitioner is the trust fund maintained by private respondent at the UCPB for the payment of the retirement pay of private-respondent's employees, the said circumstance would still not justify the invalidation of the Deed of Release and Quitclaim, for petitioner clearly understood the contents thereof at the time of its execution but still choose to sign the deed. The terms thereof being reasonable and there being no showing that private respondent employed coercion, fraud or undue influence upon petitioner to compel him to sign the same, the subject Deed of Release and Quitclaim signed by petitioner shall be upheld as valid. 19 (citations omitted) CHDaAE The petitioner ascribes several errors on the part of the CA. Specifically, the petitioner claims that the CA erred in not dismissing the respondent's appeal to the NLRC, which was filed beyond the prescribed period. There is no dispute that

Querubin was authorized to receive mails and correspondences on behalf of Philcomsat's counsel and her receipt of LA Lustria's Decision on June 20, 2006 is binding on Philcomsat. Also, the failure of Philcomsat's counsel to ascertain when exactly the copy of LA Lustria's Decision was received by Querubin is inexcusable negligence. Since the perfection of an appeal within the ten (10)-day period is a mandatory and jurisdictional requirement, Philcomsat's failure to justify its delay should have been reason enough to dismiss its appeal. The petitioner also claims that the CA erred in upholding the validity of the subject quitclaim. The respondent has no right to retain a portion of his retirement pay and the consideration for the execution of the quitclaim is simply unconscionable. The petitioner submits that the CA should have taken into account that Philcomsat's retirement plan was for the exclusive benefit of its employees and to allow Philcomsat to appropriate a significant portion of his retirement pay is a clear case of unjust enrichment. On the other hand, Philcomsat alleges that the petitioner willfully and knowingly executed the subject quitclaim in consideration of his receipt of his retirement pay. Albeit his retirement pay was in the reduced amount of P9,439,327.91, Philcomsat alleges that this was arrived at following its negotiations with the petitioner and the latter participated in the computation thereof, taking into account his accountabilities to Philcomsat and the latter's financial debacles. AECacS Philcomsat likewise alleges that the NLRC is clothed with ample authority to set aside technical rules; hence, the NLRC did not act with grave abuse of discretion in entertaining Philcomsat's appeal in consideration of the circumstances surrounding the late filing thereof and the amount subject of the dispute. Issues In view of the conflicting positions adopted by the parties, this Court is confronted with two (2) issues that are far from being novel, to wit: a. Whether the delay in the filing of Philcomsat's appeal and posting of surety bond is inexcusable; and

b. Whether the quitclaim executed by the petitioner in Philcomsat's favor is valid, thereby foreclosing his right to institute any claim against Philcomsat. ATcEDS Our Ruling A petition for certiorari under Rule 65 of the Rules of Court is confined to the correction of errors of jurisdiction and will not issue absent a showing of a capricious and whimsical exercise of judgment, equivalent to lack of jurisdiction. Not every error in a proceeding, or every erroneous conclusion of law or of fact, is an act in excess of jurisdiction or an abuse of discretion. 20 The prerogative of writ of certiorari does not lie except to correct, not every misstep, but a grave abuse of discretion. 21 Procedural rules may be relaxed to give way to the full determination of a case on its merits. Confronted with the task of determining whether the CA erred in not finding grave abuse of discretion in the NLRC's decision to give due course to Philcomsat's appeal despite its being belatedly filed, this Court rules in Philcomsat's favor. Procedural rules may be waived or dispensed with in absolutely meritorious cases. A review of the cases cited by the petitioner, Rubia v. Government Service Insurance System 22 and Videogram Regulatory Board v. Court of Appeals, 23 where this Court adhered to the strict implementation of the rules and considered them inviolable, shows that the patent lack of merit of the appeals render liberal interpretation pointless and naught. The contrary obtains in this case as Philcomsat's case is not entirely unmeritorious. Specifically, Philcomsat alleged that the petitioner's execution of the subject quitclaim was voluntary and he made no claim that he did so. Philcomsat likewise argued that the petitioner's educational attainment and the position he occupied in Philcomsat's hierarchy militate against his claim that he was pressured or coerced into signing the quitclaim. CHcTIA

The emerging trend in our jurisprudence is to afford every party-litigant the amplest opportunity for the proper and just determination of his cause free from the constraints of technicalities. 24 Far from having gravely abused its discretion, the NLRC correctly prioritized substantial justice over the rigid and stringent application of procedural rules. This, by all means, is not a case of grave abuse of discretion calling for the issuance of a writ of certiorari. Absent any evidence that any of the vices of consent is present and considering the petitioner's position and education, the quitclaim executed by the petitioner constitutes a valid and binding agreement. In Goodrich Manufacturing Corporation v. Ativo, 25 this Court reiterated the standards that must be observed in determining whether a waiver and quitclaim has been validly executed: Not all waivers and quitclaims are invalid as against public policy. If the agreement was voluntarily entered into and represents a reasonable settlement, it is binding on the parties and may not later be disowned simply because of a change of mind. It is only where there is clear proof that the waiver was wangled from an unsuspecting or gullible person, or the terms of settlement are unconscionable on its face, that the law will step in to annul the questionable transaction. But where it is shown that the person making the waiver did so voluntarily, with full understanding of what he was doing, and the consideration for the quitclaim is credible and reasonable, the transaction must be recognized as a valid and binding undertaking. 26 (emphasis supplied) In Callanta v. National Labor Relations Commission, 27 this Court ruled that: It is highly unlikely and incredible for a man of petitioner's position and educational attainment to so easily succumb to private respondent company's alleged pressures without even defending himself nor demanding a final audit report before signing any resignation letter. Assuming that pressure was indeed exerted against him, there was no urgency for petitioner to sign the resignation letter. He knew the nature of the letter that he was signing, for as argued by respondent company, petitioner being "a man of high educational attainment and qualification, . . . he is expected to know the import of everything that he executes, whether written or oral." 28 EScaIT While the law looks with disfavor upon releases and quitclaims by employees who are inveigled or pressured into signing them by unscrupulous employers seeking to evade their legal responsibilities, a legitimate waiver representing a voluntary settlement of a laborer's claims should be respected by the courts as the law between the parties. 29 Considering the petitioner's claim of fraud and bad faith against Philcomsat to be unsubstantiated, this Court finds the quitclaim in dispute to be legitimate waiver.

While the petitioner bewailed as having been coerced or pressured into signing the release and waiver, his failure to present evidence renders his allegation self-serving and inutile to invalidate the same. That no portion of his retirement pay will be released to him or his urgent need for funds does not constitute the pressure or coercion contemplated by law. That the petitioner was all set to return to his hometown and was in dire need of money would likewise not qualify as undue pressure sufficient to invalidate the quitclaim. "Dire necessity" may be an acceptable ground to annul quitclaims if the consideration is unconscionably low and the employee was tricked into accepting it, but is not an acceptable ground for annulling the release when it is not shown that the employee has been forced to execute it. 30 While it is our duty to prevent the exploitation of employees, it also behooves us to protect the sanctity of contracts that do not contravene our laws. 31

The petitioner is not an ordinary laborer. He is mature, intelligent and educated with a college degree, who cannot be easily duped or tricked into performing an act against his will. As no proof was presented that the said quitclaim was entered into through fraud, deception, misrepresentation, the same is valid and binding. The petitioner is estopped from questioning the said quitclaim and cannot renege after accepting the benefits thereunder. This Court will never satisfy itself with surmises, conjectures or speculations for the purpose of giving imprimatur to the petitioner's attempt to abdicate from his obligations under a valid and binding release and waiver. The petitioner's educational background and employment stature render it improbable that he was pressured, intimidated or inveigled into signing the subject quitclaim. This Court cannot permit the petitioner to relieve himself from the consequences of his act, when his knowledge and understanding thereof is expected. Also, the period of time that the petitioner allowed to lapse before filing a complaint to recover the supposed deficiency in his retirement pay clouds his motives, leading to the reasonable conclusion that his claim of being aggrieved is a mere afterthought, if not a mere pretention. DcITaC The CA and the NLRC were unanimous in holding that the petitioner voluntarily executed the subject quitclaim. The Supreme Court (SC) is not a trier of facts, and this doctrine applies with greater force in labor cases. Factual questions are for the labor tribunals to resolve and whether the petitioner voluntarily executed the subject quitclaim is a question of fact. In this case, the factual issues have already been determined by the NLRC and its findings were affirmed by the CA. Judicial review by this Court does not extend to a reevaluation of the sufficiency of the evidence upon which the proper labor tribunal has based its determination. 32 Factual findings of labor officials who are deemed to have acquired expertise in matters within their respective jurisdictions are generally accorded not only respect, but even finality, and are binding on the SC. Verily, their conclusions are accorded great weight upon appeal, especially when supported by substantial evidence. Consequently, the SC is not duty-bound to delve into the accuracy of their factual findings, in the absence of a clear showing that the same were arbitrary and bereft of any rational basis. 33 WHEREFORE, premises considered, the Petition is hereby DENIED. The assailed November 12, 2009 Decision and July 28, 2010 Resolution of the Court of Appeals in CA-G.R. SP No. 107233 are hereby AFFIRMED. No pronouncements as to cost. EDHTAI SO ORDERED.

[G.R. No. 151258. February 1, 2012.] ARTEMIO VILLAREAL, petitioner, vs. PEOPLE OF THE PHILIPPINES, respondent. [G.R. No. 154954. February 1, 2012.] PEOPLE OF THE PHILIPPINES, petitioner, vs. THE HONORABLE COURT OF APPEALS, ANTONIO MARIANO ALMEDA, DALMACIO LIM, JR., JUNEL ANTHONY AMA, ERNESTO JOSE MONTECILLO, VINCENT TECSON, ANTONIO GENERAL, SANTIAGO RANADA III, NELSON VICTORINO, JAIME MARIA FLORES II, ZOSIMO MENDOZA, MICHAEL MUSNGI, VICENTE VERDADERO, ETIENNE GUERRERO, JUDE FERNANDEZ, AMANTE PURISIMA II, EULOGIO SABBAN, PERCIVAL BRIGOLA, PAUL ANGELO SANTOS, JONAS KARL B. PEREZ, RENATO BANTUG, JR., ADEL ABAS, JOSEPH LLEDO, AND RONAN DE GUZMAN, respondents. [G.R. No. 155101. February 1, 2012.] FIDELITO DIZON, petitioner, vs. PEOPLE OF THE PHILIPPINES, respondent. [G.R. Nos. 178057 & 178080. February 1, 2012.] GERARDA H. VILLA, petitioner, vs. MANUEL LORENZO ESCALONA II, MARCUS JOEL CAPELLAN RAMOS, CRISANTO CRUZ SARUCA, JR., and ANSELMO ADRIANO, respondents. DECISION SERENO, J p: The public outrage over the death of Leonardo "Lenny" Villa the victim in this case on 10 February 1991 led to a very strong clamor to put an end to hazing. 1 Due in large part to the brave efforts of his mother, petitioner Gerarda Villa, groups were organized, condemning his senseless and tragic death. This widespread condemnation prompted Congress to enact a special law, which became effective in 1995, that would criminalize hazing. 2 The intent of the law was to discourage members from making hazing a requirement for joining their sorority, fraternity, organization, or association. 3 Moreover, the law was meant to counteract the exculpatory implications of "consent" and "initial innocent act" in the conduct of initiation rites by making the mere act of hazing punishable or mala prohibita. 4 CSHEAI Sadly, the Lenny Villa tragedy did not discourage hazing activities in the country. 5 Within a year of his death, six more cases of hazing-related deaths emerged those of Frederick Cahiyang of the University of Visayas in Cebu; Raul Camaligan of San Beda College; Felipe Narne of Pamantasan ng Araullo in Cabanatuan City; Dennis Cenedoza of the Cavite Naval Training Center; Joselito Mangga of the Philippine Merchant Marine Institute; and Joselito Hernandez of the University of the Philippines in Baguio City. 6 Although courts must not remain indifferent to public sentiments, in this case the general condemnation of a hazing-related death, they are still bound to observe a fundamental principle in our criminal justice system "[N]o act constitutes a crime . . . unless it is made so by law." 7 Nullum crimen, nulla poena sine lege. Even if an act is viewed by a large section of the populace as immoral or injurious, it cannot be considered a crime, absent any law prohibiting its commission. As interpreters of the law, judges are called upon to set aside emotion, to resist being swayed by strong public sentiments, and to rule strictly based on the elements of the offense and the facts allowed in evidence. Before the Court are the consolidated cases docketed as G.R. No. 151258 (Villareal v. People), G.R. No. 154954 (People v. Court of Appeals), G.R. No. 155101 (Dizon v. People), and G.R. Nos. 178057 and 178080 (Villa v. Escalona). FACTS The pertinent facts, as determined by the Court of Appeals (CA) 8 and the trial court, 9 are as follows: In February 1991, seven freshmen law students of the Ateneo de Manila University School of Law signified their intention to join the Aquila Legis Juris Fraternity (Aquila Fraternity). They were Caesar "Bogs" Asuncion, Samuel "Sam" Belleza, Bienvenido "Bien" Marquez III, Roberto Francis "Bert" Navera, Geronimo "Randy" Recinto, Felix Sy, Jr., and Leonardo "Lenny" Villa (neophytes).

On the night of 8 February 1991, the neophytes were met by some members of the Aquila Fraternity (Aquilans) at the lobby of the Ateneo Law School. They all proceeded to Rufo's Restaurant to have dinner. Afterwards, they went to the house of Michael Musngi, also an Aquilan, who briefed the neophytes on what to expect during the initiation rites. The latter were informed that there would be physical beatings, and that they could quit at any time. Their initiation rites were scheduled to last for three days. After their "briefing," they were brought to the Almeda Compound in Caloocan City for the commencement of their initiation. HDTcEI Even before the neophytes got off the van, they had already received threats and insults from the Aquilans. As soon as the neophytes alighted from the van and walked towards the pelota court of the Almeda compound, some of the Aquilans delivered physical blows to them. The neophytes were then subjected to traditional forms of Aquilan "initiation rites." These rites included the "Indian Run," which required the neophytes to run a gauntlet of two parallel rows of Aquilans, each row delivering blows to the neophytes; the "Bicol Express," which obliged the neophytes to sit on the floor with their backs against the wall and their legs outstretched while the Aquilans walked, jumped, or ran over their legs; the "Rounds," in which the neophytes were held at the back of their pants by the "auxiliaries" (the Aquilans charged with the duty of lending assistance to neophytes during initiation rites), while the latter were being hit with fist blows on their arms or with knee blows on their thighs by two Aquilans; and the "Auxies' Privilege Round," in which the auxiliaries were given the opportunity to inflict physical pain on the neophytes. During this time, the neophytes were also indoctrinated with the fraternity principles. They survived their first day of initiation. On the morning of their second day 9 February 1991 the neophytes were made to present comic plays and to play rough basketball. They were also required to memorize and recite the Aquila Fraternity's principles. Whenever they would give a wrong answer, they would be hit on their arms or legs. Late in the afternoon, the Aquilans revived the initiation rites proper and proceeded to torment them physically and psychologically. The neophytes were subjected to the same manner of hazing that they endured on the first day of initiation. After a few hours, the initiation for the day officially ended. After a while, accused non-resident or alumni fraternity members 10 Fidelito Dizon (Dizon) and Artemio Villareal (Villareal) demanded that the rites be reopened. The head of initiation rites, Nelson Victorino (Victorino), initially refused. Upon the insistence of Dizon and Villareal, however, he reopened the initiation rites. The fraternity members, including Dizon and Villareal, then subjected the neophytes to "paddling" and to additional rounds of physical pain. Lenny received several paddle blows, one of which was so strong it sent him sprawling to the ground. The neophytes heard him complaining of intense pain and difficulty in breathing. After their last session of physical beatings, Lenny could no longer walk. He had to be carried by the auxiliaries to the carport. Again, the initiation for the day was officially ended, and the neophytes started eating dinner. They then slept at the carport. EDACSa After an hour of sleep, the neophytes were suddenly roused by Lenny's shivering and incoherent mumblings. Initially, Villareal and Dizon dismissed these rumblings, as they thought he was just overacting. When they realized, though, that Lenny was really feeling cold, some of the Aquilans started helping him. They removed his clothes and helped him through a sleeping bag to keep him warm. When his condition worsened, the Aquilans rushed him to the hospital. Lenny was pronounced dead on arrival. Consequently, a criminal case for homicide was filed against the following 35 Aquilans: In Criminal Case No. C-38340(91) 1. 2. 3. 4. 5. 6. Fidelito Dizon (Dizon) Artemio Villareal (Villareal) Efren de Leon (De Leon) Vincent Tecson (Tecson) Junel Anthony Ama (Ama) Antonio Mariano Almeda (Almeda)

7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26.

Renato Bantug, Jr. (Bantug) Nelson Victorino (Victorino) Eulogio Sabban (Sabban) Joseph Lledo (Lledo) Etienne Guerrero (Guerrero) Michael Musngi (Musngi) Jonas Karl Perez (Perez) Paul Angelo Santos (Santos) Ronan de Guzman (De Guzman) Antonio General (General) ICTHDE Jaime Maria Flores II (Flores) Dalmacio Lim, Jr. (Lim) Ernesto Jose Montecillo (Montecillo) Santiago Ranada III (Ranada) Zosimo Mendoza (Mendoza) Vicente Verdadero (Verdadero) Amante Purisima II (Purisima) Jude Fernandez (J. Fernandez) Adel Abas (Abas) Percival Brigola (Brigola)

In Criminal Case No. C-38340 1. 2. 3. 4. 5. 6. 7. 8. 9. Manuel Escalona II (Escalona) Crisanto Saruca, Jr. (Saruca) Anselmo Adriano (Adriano) Marcus Joel Ramos (Ramos) Reynaldo Concepcion (Concepcion) Florentino Ampil (Ampil) Enrico de Vera III (De Vera) Stanley Fernandez (S. Fernandez) Noel Cabangon (Cabangon)

Twenty-six of the accused Aquilans in Criminal Case No. C-38340(91) were jointly tried. 11 On the other hand, the trial against the remaining nine accused in Criminal Case No. C-38340 was held in abeyance due to certain matters that had to be resolved first. 12 HCTDIS On 8 November 1993, the trial court rendered judgment in Criminal Case No. C-38340(91), holding the 26 accused guilty beyond reasonable doubt of the crime of homicide, penalized with reclusion temporal under Article 249 of the Revised Penal Code. 13 A few weeks after the trial court rendered its judgment, or on 29 November 1993, Criminal Case No. C-38340 against the remaining nine accused commenced anew. 14 On 10 January 2002, the CA in (CA-G.R. No. 15520) 15 set aside the finding of conspiracy by the trial court in Criminal Case No. C-38340(91) and modified the criminal liability of each of the accused according to individual participation. Accused De Leon had by then passed away, so the following Decision applied only to the remaining 25 accused, viz.: 1. Nineteen of the accused-appellants Victorino, Sabban, Lledo, Guerrero, Musngi, Perez, De Guzman, Santos, General, Flores, Lim, Montecillo, Ranada, Mendoza, Verdadero, Purisima, Fernandez, Abas, and Brigola (Victorino et al.) were acquitted, as their individual guilt was not established by proof beyond reasonable doubt. 2. Four of the accused-appellants Vincent Tecson, Junel Anthony Ama, Antonio Mariano Almeda, and Renato Bantug, Jr. (Tecson et al.) were found guilty of the crime of slight physical injuries and sentenced to 20 days of arresto menor. They were also ordered to jointly pay the heirs of the victim the sum of P30,000 as indemnity. 3. Two of the accused-appellants Fidelito Dizon and Artemio Villareal were found guilty beyond reasonable doubt of the crime of homicide under Article 249 of the Revised Penal Code. Having found no mitigating or aggravating circumstance, the CA sentenced them to an indeterminate sentence of 10 years of prision mayor to 17 years of reclusion temporal. They were also ordered to indemnify, jointly and severally, the heirs of Lenny Villa in the sum of P50,000 and to pay the additional amount of P1,000,000 by way of moral damages. CDaSAE On 5 August 2002, the trial court in Criminal Case No. 38340 dismissed the charge against accused Concepcion on the ground of violation of his right to speedy trial. 16 Meanwhile, on different dates between the years 2003 and 2005, the trial court denied the respective Motions to Dismiss of accused Escalona, Ramos, Saruca, and Adriano. 17 On 25 October 2006, the CA in CA-G.R. SP Nos. 89060 & 90153 18 reversed the trial court's Orders and dismissed the criminal case against Escalona, Ramos, Saruca, and Adriano on the basis of violation of their right to speedy trial. 19 From the aforementioned Decisions, the five (5) consolidated Petitions were individually brought before this Court. G.R. No. 151258 Villareal v. People The instant case refers to accused Villareal's Petition for Review on Certiorari under Rule 45. The Petition raises two reversible errors allegedly committed by the CA in its Decision dated 10 January 2002 in CA-G.R. No. 15520 first, denial of due process; and, second, conviction absent proof beyond reasonable doubt. 20 While the Petition was pending before this Court, counsel for petitioner Villareal filed a Notice of Death of Party on 10 August 2011. According to the Notice, petitioner Villareal died on 13 March 2011. Counsel thus asserts that the subject matter of the Petition previously filed by petitioner does not survive the death of the accused. G.R. No. 155101 Dizon v. People Accused Dizon filed a Rule 45 Petition for Review on Certiorari, questioning the CA's Decision dated 10 January 2002 and Resolution dated 30 August 2002 in CA-G.R. No. 15520. 21 Petitioner sets forth two main issues first, that he was denied due process when the CA sustained the trial court's forfeiture of his right to present evidence; and, second, that he was deprived of due process when the CA did not apply to him the same "ratio decidendi that served as basis of acquittal of the other accused." 22 As regards the first issue, the trial court made a ruling, which forfeited Dizon's right to present evidence during trial. The trial court expected Dizon to present evidence on an earlier date since a co-accused, Antonio General, no longer presented separate evidence during trial. According to Dizon, his right should not have been considered as waived because he was justified in

asking for a postponement. He argues that he did not ask for a resetting of any of the hearing dates and in fact insisted that he was ready to present evidence on the original pre-assigned schedule, and not on an earlier hearing date. DHEcCT Regarding the second issue, petitioner contends that he should have likewise been acquitted, like the other accused, since his acts were also part of the traditional initiation rites and were not tainted by evil motives. 23 He claims that the additional paddling session was part of the official activity of the fraternity. He also points out that one of the neophytes admitted that the chairperson of the initiation rites "decided that [Lenny] was fit enough to undergo the initiation so Mr. Villareal proceeded to do the paddling. . . ." 24 Further, petitioner echoes the argument of the Solicitor General that "the individual blows inflicted by Dizon and Villareal could not have resulted in Lenny's death." 25 The Solicitor General purportedly averred that, "on the contrary, Dr. Arizala testified that the injuries suffered by Lenny could not be considered fatal if taken individually, but if taken collectively, the result is the violent death of the victim." 26 Petitioner then counters the finding of the CA that he was motivated by ill will. He claims that Lenny's father could not have stolen the parking space of Dizon's father, since the latter did not have a car, and their fathers did not work in the same place or office. Revenge for the loss of the parking space was the alleged ill motive of Dizon. According to petitioner, his utterances regarding a stolen parking space were only part of the "psychological initiation." He then cites the testimony of Lenny's coneophyte witness Marquez who admitted knowing "it was not true and that he was just making it up. . . ." 27 Further, petitioner argues that his alleged motivation of ill will was negated by his show of concern for Villa after the initiation rites. Dizon alludes to the testimony of one of the neophytes, who mentioned that the former had kicked the leg of the neophyte and told him to switch places with Lenny to prevent the latter's chills. When the chills did not stop, Dizon, together with Victorino, helped Lenny through a sleeping bag and made him sit on a chair. According to petitioner, his alleged ill motivation is contradicted by his manifestation of compassion and concern for the victim's well-being. G.R. No. 154954 People v. Court of Appeals This Petition for Certiorari under Rule 65 seeks the reversal of the CA's Decision dated 10 January 2002 and Resolution dated 30 August 2002 in CA-G.R. No. 15520, insofar as it acquitted 19 (Victorino et al.) and convicted 4 (Tecson et al.) of the accused Aquilans of the lesser crime of slight physical injuries. 28 According to the Solicitor General, the CA erred in holding that there could have been no conspiracy to commit hazing, as hazing or fraternity initiation had not yet been criminalized at the time Lenny died. caTESD In the alternative, petitioner claims that the ruling of the trial court should have been upheld, inasmuch as it found that there was conspiracy to inflict physical injuries on Lenny. Since the injuries led to the victim's death, petitioner posits that the accused Aquilans are criminally liable for the resulting crime of homicide, pursuant to Article 4 of the Revised Penal Code. 29 The said article provides: "Criminal liability shall be incurred . . . [b]y any person committing a felony (delito) although the wrongful act done be different from that which he intended." Petitioner also argues that the rule on double jeopardy is inapplicable. According to the Solicitor General, the CA acted with grave abuse of discretion, amounting to lack or excess of jurisdiction, in setting aside the trial court's finding of conspiracy and in ruling that the criminal liability of all the accused must be based on their individual participation in the commission of the crime. G.R. Nos. 178057 and 178080 Villa v. Escalona Petitioner Villa filed the instant Petition for Review on Certiorari, praying for the reversal of the CA's Decision dated 25 October 2006 and Resolution dated 17 May 2007 in CA-G.R. S.P. Nos. 89060 and 90153. 30 The Petition involves the dismissal of the criminal charge filed against Escalona, Ramos, Saruca, and Adriano. Due to "several pending incidents," the trial court ordered a separate trial for accused Escalona, Saruca, Adriano, Ramos, Ampil, Concepcion, De Vera, S. Fernandez, and Cabangon (Criminal Case No. C-38340) to commence after proceedings against the 26 other accused in Criminal Case No. C-38340(91) shall have terminated. On 8 November 1993, the trial court found the 26 accused guilty beyond reasonable doubt. As a result, the proceedings in Criminal Case No. C-38340 involving the nine other co-accused recommenced on 29 November 1993. For "various reasons," the initial trial of the case did not commence until 28 March 2005, or almost 12 years after the arraignment of the nine accused.

Petitioner Villa assails the CA's dismissal of the criminal case involving 4 of the 9 accused, namely, Escalona, Ramos, Saruca, and Adriano. She argues that the accused failed to assert their right to speedy trial within a reasonable period of time. She also points out that the prosecution cannot be faulted for the delay, as the original records and the required evidence were not at its disposal, but were still in the appellate court. AHTICD We resolve herein the various issues that we group into five. ISSUES 1. Whether the forfeiture of petitioner Dizon's right to present evidence constitutes denial of due process;

2. Whether the CA committed grave abuse of discretion, amounting to lack or excess of jurisdiction when it dismissed the case against Escalona, Ramos, Saruca, and Adriano for violation of the right of the accused to speedy trial; 3. Whether the CA committed grave abuse of discretion, amounting to lack or excess of jurisdiction, when it set aside the finding of conspiracy by the trial court and adjudicated the liability of each accused according to individual participation; 4. Whether accused Dizon is guilty of homicide; and

5. Whether the CA committed grave abuse of discretion when it pronounced Tecson, Ama, Almeda, and Bantug guilty only of slight physical injuries. DISCUSSION Resolution on Preliminary Matters G.R. No. 151258 Villareal v. People In a Notice dated 26 September 2011 and while the Petition was pending resolution, this Court took note of counsel for petitioner's Notice of Death of Party. According to Article 89 (1) of the Revised Penal Code, criminal liability for personal penalties is totally extinguished by the death of the convict. In contrast, criminal liability for pecuniary penalties is extinguished if the offender dies prior to final judgment. The term "personal penalties" refers to the service of personal or imprisonment penalties, 31 while the term "pecuniary penalties" (las pecuniarias) refers to fines and costs, 32 including civil liability predicated on the criminal offense complained of (i.e., civil liability ex delicto). 33 However, civil liability based on a source of obligation other than the delict survives the death of the accused and is recoverable through a separate civil action. 34 aCcADT Thus, we hold that the death of petitioner Villareal extinguished his criminal liability for both personal and pecuniary penalties, including his civil liability directly arising from the delict complained of. Consequently, his Petition is hereby dismissed, and the criminal case against him deemed closed and terminated. G.R. No. 155101 (Dizon v. People) In an Order dated 28 July 1993, the trial court set the dates for the reception of evidence for accused-petitioner Dizon on the 8th, 15th, and 22nd of September; and the 5th and 12 of October 1993. 35 The Order likewise stated that "it will not entertain any postponement and that all the accused who have not yet presented their respective evidence should be ready at all times down the line, with their evidence on all said dates. Failure on their part to present evidence when required shall therefore be construed as waiver to present evidence." 36 However, on 19 August 1993, counsel for another accused manifested in open court that his client Antonio General would no longer present separate evidence. Instead, the counsel would adopt the testimonial evidence of the other accused who had already testified. 37 Because of this development and pursuant to the trial court's Order that the parties "should be ready at all times down the line," the trial court expected Dizon to present evidence on the next trial date 25 August 1993 instead of his originally assigned dates. The original dates were supposed to start two weeks later, or on 8 September 1993. 38 Counsel for accused Dizon was not able to present evidence on the accelerated date. To address the situation, counsel filed a Constancia on 25 August 1993, alleging that he had to appear in a previously scheduled case, and that he would be ready to

present evidence on the dates originally assigned to his clients. 39 The trial court denied the Manifestation on the same date and treated the Constancia as a motion for postponement, in violation of the three-day-notice rule under the Rules of Court. 40 Consequently, the trial court ruled that the failure of Dizon to present evidence amounted to a waiver of that right. 41 Accused-petitioner Dizon thus argues that he was deprived of due process of law when the trial court forfeited his right to present evidence. According to him, the postponement of the 25 August 1993 hearing should have been considered justified, since his original pre-assigned trial dates were not supposed to start until 8 September 1993, when he was scheduled to present evidence. He posits that he was ready to present evidence on the dates assigned to him. He also points out that he did not ask for a resetting of any of the said hearing dates; that he in fact insisted on being allowed to present evidence on the dates fixed by the trial court. Thus, he contends that the trial court erred in accelerating the schedule of presentation of evidence, thereby invalidating the finding of his guilt. aEAcHI The right of the accused to present evidence is guaranteed by no less than the Constitution itself. 42 Article III, Section 14 (2) thereof, provides that "in all criminal prosecutions, the accused . . . shall enjoy the right to be heard by himself and counsel. . ." This constitutional right includes the right to present evidence in one's defense, 43 as well as the right to be present and defend oneself in person at every stage of the proceedings. 44 In Crisostomo v. Sandiganbayan, 45 the Sandiganbayan set the hearing of the defense's presentation of evidence for 21, 22 and 23 June 1995. The 21 June 1995 hearing was cancelled due to "lack of quorum in the regular membership" of the Sandiganbayan's Second Division and upon the agreement of the parties. The hearing was reset for the next day, 22 June 1995, but Crisostomo and his counsel failed to attend. The Sandiganbayan, on the very same day, issued an Order directing the issuance of a warrant for the arrest of Crisostomo and the confiscation of his surety bond. The Order further declared that he had waived his right to present evidence because of his nonappearance at "yesterday's and today's scheduled hearings." In ruling against the Order, we held thus: Under Section 2(c), Rule 114 and Section 1(c), Rule 115 of the Rules of Court, Crisostomo's non-appearance during the 22 June 1995 trial was merely a waiver of his right to be present for trial on such date only and not for the succeeding trial dates. . .

xxx

xxx

xxx

Moreover, Crisostomo's absence on the 22 June 1995 hearing should not have been deemed as a waiver of his right to present evidence. While constitutional rights may be waived, such waiver must be clear and must be coupled with an actual intention to relinquish the right. Crisostomo did not voluntarily waive in person or even through his counsel the right to present evidence. The Sandiganbayan imposed the waiver due to the agreement of the prosecution, Calingayan, and Calingayan's counsel. In criminal cases where the imposable penalty may be death, as in the present case, the court is called upon to see to it that the accused is personally made aware of the consequences of a waiver of the right to present evidence. In fact, it is not enough that the accused is simply warned of the consequences of another failure to attend the succeeding hearings. The court must first explain to the accused personally in clear terms the exact nature and consequences of a waiver. Crisostomo was not even forewarned. The Sandiganbayan simply went ahead to deprive Crisostomo of his right to present evidence without even allowing Crisostomo to explain his absence on the 22 June 1995 hearing. DCHIAS Clearly, the waiver of the right to present evidence in a criminal case involving a grave penalty is not assumed and taken lightly. The presence of the accused and his counsel is indispensable so that the court could personally conduct a searching inquiry into the waiver . . . . 46 (Emphasis supplied) The trial court should not have deemed the failure of petitioner to present evidence on 25 August 1993 as a waiver of his right to present evidence. On the contrary, it should have considered the excuse of counsel justified, especially since counsel for another accused General had made a last-minute adoption of testimonial evidence that freed up the succeeding trial dates; and since Dizon was not scheduled to testify until two weeks later. At any rate, the trial court pre-assigned five hearing dates for the reception of evidence. If it really wanted to impose its Order strictly, the most it could have done was to forfeit one out of the five days set for Dizon's testimonial evidence. Stripping the accused of all his pre-assigned trial dates constitutes a patent denial of the constitutionally guaranteed right to due process.

Nevertheless, as in the case of an improvident guilty plea, an invalid waiver of the right to present evidence and be heard does not per se work to vacate a finding of guilt in the criminal case or to enforce an automatic remand of the case to the trial court. 47 In People v. Bodoso, we ruled that where facts have adequately been represented in a criminal case, and no procedural unfairness or irregularity has prejudiced either the prosecution or the defense as a result of the invalid waiver, the rule is that a guilty verdict may nevertheless be upheld if the judgment is supported beyond reasonable doubt by the evidence on record. 48 We do not see any material inadequacy in the relevant facts on record to resolve the case at bar. Neither can we see any "procedural unfairness or irregularity" that would substantially prejudice either the prosecution or the defense as a result of the invalid waiver. In fact, the arguments set forth by accused Dizon in his Petition corroborate the material facts relevant to decide the matter. Instead, what he is really contesting in his Petition is the application of the law to the facts by the trial court and the CA. Petitioner Dizon admits direct participation in the hazing of Lenny Villa by alleging in his Petition that "all actions of the petitioner were part of the traditional rites," and that "the alleged extension of the initiation rites was not outside the official activity of the fraternity." 49 He even argues that "Dizon did not request for the extension and he participated only after the activity was sanctioned." 50 IECcAT For one reason or another, the case has been passed or turned over from one judge or justice to another at the trial court, at the CA, and even at the Supreme Court. Remanding the case for the reception of the evidence of petitioner Dizon would only inflict further injustice on the parties. This case has been going on for almost two decades. Its resolution is long overdue. Since the key facts necessary to decide the case have already been determined, we shall proceed to decide it. G.R. Nos. 178057 and 178080 (Villa v. Escalona) Petitioner Villa argues that the case against Escalona, Ramos, Saruca, and Adriano should not have been dismissed, since they failed to assert their right to speedy trial within a reasonable period of time. She points out that the accused failed to raise a protest during the dormancy of the criminal case against them, and that they asserted their right only after the trial court had dismissed the case against their co-accused Concepcion. Petitioner also emphasizes that the trial court denied the respective Motions to Dismiss filed by Saruca, Escalona, Ramos, and Adriano, because it found that "the prosecution could not be faulted for the delay in the movement of this case when the original records and the evidence it may require were not at its disposal as these were in the Court of Appeals." 51 The right of the accused to a speedy trial has been enshrined in Sections 14 (2) and 16, Article III of the 1987 Constitution. 52 This right requires that there be a trial free from vexatious, capricious or oppressive delays. 53 The right is deemed violated when the proceeding is attended with unjustified postponements of trial, or when a long period of time is allowed to elapse without the case being tried and for no cause or justifiable motive. 54 In determining the right of the accused to speedy trial, courts should do more than a mathematical computation of the number of postponements of the scheduled hearings of the case. 55 The conduct of both the prosecution and the defense must be weighed. 56 Also to be considered are factors such as the length of delay, the assertion or non-assertion of the right, and the prejudice wrought upon the defendant. 57 We have consistently ruled in a long line of cases that a dismissal of the case pursuant to the right of the accused to speedy trial is tantamount to acquittal. 58 As a consequence, an appeal or a reconsideration of the dismissal would amount to a violation of the principle of double jeopardy. 59 As we have previously discussed, however, where the dismissal of the case is capricious, certiorari lies. 60 The rule on double jeopardy is not triggered when a petition challenges the validity of the order of dismissal instead of the correctness thereof. 61 Rather, grave abuse of discretion amounts to lack of jurisdiction, and lack of jurisdiction prevents double jeopardy from attaching. 62 IDaEHS We do not see grave abuse of discretion in the CA's dismissal of the case against accused Escalona, Ramos, Saruca, and Adriano on the basis of the violation of their right to speedy trial. The court held thus: An examination of the procedural history of this case would reveal that the following factors contributed to the slow progress of the proceedings in the case below: xxx xxx xxx

5) The fact that the records of the case were elevated to the Court of Appeals and the prosecution's failure to comply with the order of the court a quo requiring them to secure certified true copies of the same.

xxx

xxx

xxx

While we are prepared to concede that some of the foregoing factors that contributed to the delay of the trial of the petitioners are justifiable, We nonetheless hold that their right to speedy trial has been utterly violated in this case . . . . xxx xxx xxx

[T]he absence of the records in the trial court [was] due to the fact that the records of the case were elevated to the Court of Appeals, and the prosecution's failure to comply with the order of the court a quo requiring it to secure certified true copies of the same. What is glaring from the records is the fact that as early as September 21, 1995, the court a quo already issued an Order requiring the prosecution, through the Department of Justice, to secure the complete records of the case from the Court of Appeals. The prosecution did not comply with the said Order as in fact, the same directive was repeated by the court a quo in an Order dated December 27, 1995. Still, there was no compliance on the part of the prosecution. It is not stated when such order was complied with. It appears, however, that even until August 5, 2002, the said records were still not at the disposal of the trial court because the lack of it was made the basis of the said court in granting the motion to dismiss filed by co-accused Concepcion . . . . DASEac xxx xxx xxx

It is likewise noticeable that from December 27, 1995, until August 5, 2002, or for a period of almost seven years, there was no action at all on the part of the court a quo. Except for the pleadings filed by both the prosecution and the petitioners, the latest of which was on January 29, 1996, followed by petitioner Saruca's motion to set case for trial on August 17, 1998 which the court did not act upon, the case remained dormant for a considerable length of time. This prolonged inactivity whatsoever is precisely the kind of delay that the constitution frowns upon . . . . 63 (Emphasis supplied) This Court points out that on 10 January 1992, the final amended Information was filed against Escalona, Ramos, Saruca, Ampil, S. Fernandez, Adriano, Cabangon, Concepcion, and De Vera. 64 On 29 November 1993, they were all arraigned. 65 Unfortunately, the initial trial of the case did not commence until 28 March 2005 or almost 12 years after arraignment. 66 As illustrated in our ruling in Abardo v. Sandiganbayan, the unexplained interval or inactivity of the Sandiganbayan for close to five years since the arraignment of the accused amounts to an unreasonable delay in the disposition of cases a clear violation of the right of the accused to a speedy disposition of cases. 67 Thus, we held: The delay in this case measures up to the unreasonableness of the delay in the disposition of cases in Angchangco, Jr. vs. Ombudsman, where the Court found the delay of six years by the Ombudsman in resolving the criminal complaints to be violative of the constitutionally guaranteed right to a speedy disposition of cases; similarly, in Roque vs. Office of the Ombudsman, where the Court held that the delay of almost six years disregarded the Ombudsman's duty to act promptly on complaints before him; and in Cervantes vs. Sandiganbayan, where the Court held that the Sandiganbayan gravely abused its discretion in not quashing the information which was filed six years after the initiatory complaint was filed and thereby depriving petitioner of his right to a speedy disposition of the case. So it must be in the instant case, where the reinvestigation by the Ombudsman has dragged on for a decade already. 68 (Emphasis supplied) From the foregoing principles, we affirm the ruling of the CA in CA-G.R. SP No. 89060 that accused Escalona et al.'s right to speedy trial was violated. Since there is nothing in the records that would show that the subject of this Petition includes accused Ampil, S. Fernandez, Cabangon, and De Vera, the effects of this ruling shall be limited to accused Escalona, Ramos, Saruca, and Adriano. DHETIS G.R. No. 154954 (People v. Court of Appeals) The rule on double jeopardy is one of the pillars of our criminal justice system. It dictates that when a person is charged with an offense, and the case is terminated either by acquittal or conviction or in any other manner without the consent of the accused the accused cannot again be charged with the same or an identical offense. 69 This principle is founded upon the law of reason, justice and conscience. 70 It is embodied in the civil law maxim non bis in idem found in the common law of England and undoubtedly in every system of jurisprudence. 71 It found expression in the Spanish Law, in the Constitution of the United States, and in our own Constitution as one of the fundamental rights of the citizen, 72 viz.:

Article III Bill of Rights Section 21. No person shall be twice put in jeopardy of punishment for the same offense. If an act is punished by a law and an ordinance, conviction or acquittal under either shall constitute a bar to another prosecution for the same act. Rule 117, Section 7 of the Rules of Court, which implements this particular constitutional right, provides as follows: 73 SEC. 7. Former conviction or acquittal; double jeopardy. When an accused has been convicted or acquitted, or the case against him dismissed or otherwise terminated without his express consent by a court of competent jurisdiction, upon a valid complaint or information or other formal charge sufficient in form and substance to sustain a conviction and after the accused had pleaded to the charge, the conviction or acquittal of the accused or the dismissal of the case shall be a bar to another prosecution for the offense charged, or for any attempt to commit the same or frustration thereof, or for any offense which necessarily includes or is necessarily included in the offense charged in the former complaint or information. The rule on double jeopardy thus prohibits the state from appealing the judgment in order to reverse the acquittal or to increase the penalty imposed either through a regular appeal under Rule 41 of the Rules of Court or through an appeal by certiorari on pure questions of law under Rule 45 of the same Rules. 74 The requisites for invoking double jeopardy are the following: (a) there is a valid complaint or information; (b) it is filed before a competent court; (c) the defendant pleaded to the charge; and (d) the defendant was acquitted or convicted, or the case against him or her was dismissed or otherwise terminated without the defendant's express consent. 75 ESTcIA As we have reiterated in People v. Court of Appeals and Galicia, "[a] verdict of acquittal is immediately final and a reexamination of the merits of such acquittal, even in the appellate courts, will put the accused in jeopardy for the same offense. The finality-of-acquittal doctrine has several avowed purposes. Primarily, it prevents the State from using its criminal processes as an instrument of harassment to wear out the accused by a multitude of cases with accumulated trials. It also serves the additional purpose of precluding the State, following an acquittal, from successively retrying the defendant in the hope of securing a conviction. And finally, it prevents the State, following conviction, from retrying the defendant again in the hope of securing a greater penalty." 76 We further stressed that "an acquitted defendant is entitled to the right of repose as a direct consequence of the finality of his acquittal." 77 This prohibition, however, is not absolute. The state may challenge the lower court's acquittal of the accused or the imposition of a lower penalty on the latter in the following recognized exceptions: (1) where the prosecution is deprived of a fair opportunity to prosecute and prove its case, tantamount to a deprivation of due process; 78 (2) where there is a finding of mistrial; 79 or (3) where there has been a grave abuse of discretion. 80 The third instance refers to this Court's judicial power under Rule 65 to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the government. 81 Here, the party asking for the review must show the presence of a whimsical or capricious exercise of judgment equivalent to lack of jurisdiction; a patent and gross abuse of discretion amounting to an evasion of a positive duty or to a virtual refusal to perform a duty imposed by law or to act in contemplation of law; an exercise of power in an arbitrary and despotic manner by reason of passion and hostility; 82 or a blatant abuse of authority to a point so grave and so severe as to deprive the court of its very power to dispense justice. 83 In such an event, the accused cannot be considered to be at risk of double jeopardy. 84 The Solicitor General filed a Rule 65 Petition for Certiorari, which seeks the reversal of (1) the acquittal of Victorino et al. and (2) the conviction of Tecson et al. for the lesser crime of slight physical injuries, both on the basis of a misappreciation of facts and evidence. According to the Petition, "the decision of the Court of Appeals is not in accordance with law because private complainant and petitioner were denied due process of law when the public respondent completely ignored the a) Position Paper . . . b) the Motion for Partial Reconsideration . . . and c) the petitioner's Comment . . . ." 85 Allegedly, the CA ignored evidence when it adopted the theory of individual responsibility; set aside the finding of conspiracy by the trial court; and failed to apply Article 4 of the Revised Penal Code. 86 The Solicitor General also assails the finding that the physical blows were inflicted only by Dizon and Villareal, as well as the appreciation of Lenny Villa's consent to hazing. 87 IEHaSc In our view, what the Petition seeks is that we reexamine, reassess, and reweigh the probative value of the evidence presented by the parties. 88 In People v. Maquiling, we held that grave abuse of discretion cannot be attributed to a court simply because it allegedly misappreciated the facts and the evidence. 89 Mere errors of judgment are correctible by an appeal or a petition for review under Rule 45 of the Rules of Court, and not by an application for a writ of certiorari. 90 Therefore, pursuant to the

rule on double jeopardy, we are constrained to deny the Petition contra Victorino et al. the 19 acquitted fraternity members. We, however, modify the assailed judgment as regards Tecson, Ama, Almeda, and Bantug the four fraternity members convicted of slight physical injuries. Indeed, we have ruled in a line of cases that the rule on double jeopardy similarly applies when the state seeks the imposition of a higher penalty against the accused. 91 We have also recognized, however, that certiorari may be used to correct an abusive judgment upon a clear demonstration that the lower court blatantly abused its authority to a point so grave as to deprive it of its very power to dispense justice. 92 The present case is one of those instances of grave abuse of discretion. In imposing the penalty of slight physical injuries on Tecson, Ama, Almeda, and Bantug, the CA reasoned thus: Based on the medical findings, it would appear that with the exclusion of the fatal wounds inflicted by the accused Dizon and Villareal, the injuries sustained by the victim as a result of the physical punishment heaped on him were serious in nature. However, by reason of the death of the victim, there can be no precise means to determine the duration of the incapacity or the medical attendance required. To do so, at this stage would be merely speculative. In a prosecution for this crime where the category of the offense and the severity of the penalty depend on the period of illness or incapacity for labor, the length of this period must likewise be proved beyond reasonable doubt in much the same manner as the same act charged [People v. Codilla, CA-G.R. No. 4079-R, June 26, 1950]. And when proof of the said period is absent, the crime committed should be deemed only as slight physical injuries [People v. De los Santos, CA, 59 O.G. 4393, citing People v. Penesa, 81 Phil. 398]. As such, this Court is constrained to rule that the injuries inflicted by the appellants, Tecson, Ama, Almeda and Bantug, Jr., are only slight and not serious, in nature. 93 (Emphasis supplied and citations included) cCaSHA The appellate court relied on our ruling in People v. Penesa 94 in finding that the four accused should be held guilty only of slight physical injuries. According to the CA, because of "the death of the victim, there can be no precise means to determine the duration of the incapacity or medical attendance required." 95 The reliance on Penesa was utterly misplaced. A review of that case would reveal that the accused therein was guilty merely of slight physical injuries, because the victim's injuries neither caused incapacity for labor nor required medical attendance. 96 Furthermore, he did not die. 97 His injuries were not even serious. 98 Since Penesa involved a case in which the victim allegedly suffered physical injuries and not death, the ruling cited by the CA was patently inapplicable. On the contrary, the CA's ultimate conclusion that Tecson, Ama, Almeda, and Bantug were liable merely for slight physical injuries grossly contradicts its own findings of fact. According to the court, the four accused "were found to have inflicted more than the usual punishment undertaken during such initiation rites on the person of Villa." 99 It then adopted the NBI medico-legal officer's findings that the antecedent cause of Lenny Villa's death was the "multiple traumatic injuries" he suffered from the initiation rites. 100 Considering that the CA found that the "physical punishment heaped on [Lenny Villa was] serious in nature," 101 it was patently erroneous for the court to limit the criminal liability to slight physical injuries, which is a light felony. Article 4 (1) of the Revised Penal Code dictates that the perpetrator shall be liable for the consequences of an act, even if its result is different from that intended. Thus, once a person is found to have committed an initial felonious act, such as the unlawful infliction of physical injuries that results in the death of the victim, courts are required to automatically apply the legal framework governing the destruction of life. This rule is mandatory, and not subject to discretion. The CA's application of the legal framework governing physical injuries punished under Articles 262 to 266 for intentional felonies and Article 365 for culpable felonies is therefore tantamount to a whimsical, capricious, and abusive exercise of judgment amounting to lack of jurisdiction. According to the Revised Penal Code, the mandatory and legally imposable penalty in case the victim dies should be based on the framework governing the destruction of the life of a person, punished under Articles 246 to 261 for intentional felonies and Article 365 for culpable felonies, and not under the aforementioned provisions. We emphasize that these two types of felonies are distinct from and legally inconsistent with each other, in that the accused cannot be held criminally liable for physical injuries when actual death occurs. 102 HcaATE Attributing criminal liability solely to Villareal and Dizon as if only their acts, in and of themselves, caused the death of Lenny Villa is contrary to the CA's own findings. From proof that the death of the victim was the cumulative effect of the multiple injuries he suffered, 103 the only logical conclusion is that criminal responsibility should redound to all those who

have been proven to have directly participated in the infliction of physical injuries on Lenny. The accumulation of bruising on his body caused him to suffer cardiac arrest. Accordingly, we find that the CA committed grave abuse of discretion amounting to lack or excess of jurisdiction in finding Tecson, Ama, Almeda, and Bantug criminally liable for slight physical injuries. As an allowable exception to the rule on double jeopardy, we therefore give due course to the Petition in G.R. No. 154954. Resolution on Ultimate Findings According to the trial court, although hazing was not (at the time) punishable as a crime, the intentional infliction of physical injuries on Villa was nonetheless a felonious act under Articles 263 to 266 of the Revised Penal Code. Thus, in ruling against the accused, the court a quo found that pursuant to Article 4 (1) of the Revised Penal Code, the accused fraternity members were guilty of homicide, as it was the direct, natural and logical consequence of the physical injuries they had intentionally inflicted. 104 The CA modified the trial court's finding of criminal liability. It ruled that there could have been no conspiracy since the neophytes, including Lenny Villa, had knowingly consented to the conduct of hazing during their initiation rites. The accused fraternity members, therefore, were liable only for the consequences of their individual acts. Accordingly, 19 of the accused Victorino et al. were acquitted; 4 of them Tecson et al. were found guilty of slight physical injuries; and the remaining 2 Dizon and Villareal were found guilty of homicide. The issue at hand does not concern a typical criminal case wherein the perpetrator clearly commits a felony in order to take revenge upon, to gain advantage over, to harm maliciously, or to get even with, the victim. Rather, the case involves an ex ante situation in which a man driven by his own desire to join a society of men pledged to go through physically and psychologically strenuous admission rituals, just so he could enter the fraternity. Thus, in order to understand how our criminal laws apply to such situation absent the Anti-Hazing Law, we deem it necessary to make a brief exposition on the underlying concepts shaping intentional felonies, as well as on the nature of physical and psychological initiations widely known as hazing. DcCASI Intentional Felony and Conspiracy Our Revised Penal Code belongs to the classical school of thought. 105 The classical theory posits that a human person is essentially a moral creature with an absolute free will to choose between good and evil. 106 It asserts that one should only be adjudged or held accountable for wrongful acts so long as free will appears unimpaired. 107 The basic postulate of the classical penal system is that humans are rational and calculating beings who guide their actions with reference to the principles of pleasure and pain. 108 They refrain from criminal acts if threatened with punishment sufficient to cancel the hope of possible gain or advantage in committing the crime. 109 Here, criminal liability is thus based on the free will and moral blame of the actor. 110 The identity of mens rea defined as a guilty mind, a guilty or wrongful purpose or criminal intent is the predominant consideration. 111 Thus, it is not enough to do what the law prohibits. 112 In order for an intentional felony to exist, it is necessary that the act be committed by means of dolo or "malice." 113 The term "dolo" or "malice" is a complex idea involving the elements of freedom, intelligence, and intent. 114 The first element, freedom, refers to an act done with deliberation and with power to choose between two things. 115 The second element, intelligence, concerns the ability to determine the morality of human acts, as well as the capacity to distinguish between a licit and an illicit act. 116 The last element, intent, involves an aim or a determination to do a certain act. 117 The element of intent on which this Court shall focus is described as the state of mind accompanying an act, especially a forbidden act. 118 It refers to the purpose of the mind and the resolve with which a person proceeds. 119 It does not refer to mere will, for the latter pertains to the act, while intent concerns the result of the act. 120 While motive is the "moving power" that impels one to action for a definite result, intent is the "purpose" of using a particular means to produce the result. 121 On the other hand, the term "felonious" means, inter alia, malicious, villainous, and/or proceeding from an evil heart or purpose. 122 With these elements taken together, the requirement of intent in intentional felony must refer to malicious intent, which is a vicious and malevolent state of mind accompanying a forbidden act. Stated otherwise, intentional felony requires the existence of dolus malus that the act or omission be done "willfully," "maliciously," "with deliberate evil intent," and "with malice aforethought." 123 The maxim is actus non facit reum, nisi mens sit rea a crime is not committed if the mind of the person performing the act complained of is innocent. 124 As is required of the other elements of a felony, the existence of malicious intent must be proven beyond reasonable doubt. 125 AcICHD

In turn, the existence of malicious intent is necessary in order for conspiracy to attach. Article 8 of the Revised Penal Code which provides that "conspiracy exists when two or more persons come to an agreement concerning the commission of a felony and decide to commit it" is to be interpreted to refer only to felonies committed by means of dolo or malice. The phrase "coming to an agreement" connotes the existence of a prefaced "intent" to cause injury to another, an element present only in intentional felonies. In culpable felonies or criminal negligence, the injury inflicted on another is unintentional, the wrong done being simply the result of an act performed without malice or criminal design. 126 Here, a person performs an initial lawful deed; however, due to negligence, imprudence, lack of foresight, or lack of skill, the deed results in a wrongful act. 127 Verily, a deliberate intent to do an unlawful act, which is a requisite in conspiracy, is inconsistent with the idea of a felony committed by means of culpa. 128 The presence of an initial malicious intent to commit a felony is thus a vital ingredient in establishing the commission of the intentional felony of homicide. 129 Being mala in se, the felony of homicide requires the existence of malice or dolo 130 immediately before or simultaneously with the infliction of injuries. 131 Intent to kill or animus interficendi cannot and should not be inferred, unless there is proof beyond reasonable doubt of such intent. 132 Furthermore, the victim's death must not have been the product of accident, natural cause, or suicide. 133 If death resulted from an act executed without malice or criminal intent but with lack of foresight, carelessness, or negligence the act must be qualified as reckless or simple negligence or imprudence resulting in homicide. 134 Hazing and other forms of initiation rites The notion of hazing is not a recent development in our society. 135 It is said that, throughout history, hazing in some form or another has been associated with organizations ranging from military groups to indigenous tribes. 136 Some say that elements of hazing can be traced back to the Middle Ages, during which new students who enrolled in European universities worked as servants for upperclassmen. 137 It is believed that the concept of hazing is rooted in ancient Greece, 138 where young men recruited into the military were tested with pain or challenged to demonstrate the limits of their loyalty and to prepare the recruits for battle. 139 Modern fraternities and sororities espouse some connection to these values of ancient Greek civilization. 140 According to a scholar, this concept lends historical legitimacy to a "tradition" or "ritual" whereby prospective members are asked to prove their worthiness and loyalty to the organization in which they seek to attain membership through hazing. 141 ITHADC Thus, it is said that in the Greek fraternity system, custom requires a student wishing to join an organization to receive an invitation in order to be a neophyte for a particular chapter. 142 The neophyte period is usually one to two semesters long. 143 During the "program," neophytes are required to interview and to get to know the active members of the chapter; to learn chapter history; to understand the principles of the organization; to maintain a specified grade point average; to participate in the organization's activities; and to show dignity and respect for their fellow neophytes, the organization, and its active and alumni members. 144 Some chapters require the initiation activities for a recruit to involve hazing acts during the entire neophyte stage. 145 Hazing, as commonly understood, involves an initiation rite or ritual that serves as prerequisite for admission to an organization. 146 In hazing, the "recruit," "pledge," "neophyte," "initiate," "applicant" or any other term by which the organization may refer to such a person is generally placed in embarrassing or humiliating situations, like being forced to do menial, silly, foolish, or other similar tasks or activities. 147 It encompasses different forms of conduct that humiliate, degrade, abuse, or physically endanger those who desire membership in the organization. 148 These acts usually involve physical or psychological suffering or injury. 149 The concept of initiation rites in the country is nothing new. In fact, more than a century ago, our national hero Andres Bonifacio organized a secret society named Kataastaasan Kagalanggalangang Katipunan ng mga Anak ng Bayan (The Highest and Most Venerable Association of the Sons and Daughters of the Nation). 150 The Katipunan, or KKK, started as a small confraternity believed to be inspired by European Freemasonry, as well as by confraternities or sodalities approved by the Catholic Church. 151 The Katipunan's ideology was brought home to each member through the society's initiation ritual. 152 It is said that initiates were brought to a dark room, lit by a single point of illumination, and were asked a series of questions to determine their fitness, loyalty, courage, and resolve. 153 They were made to go through vigorous trials such as "pagsuot sa isang lungga" or "[pagtalon] sa balon." 154 It would seem that they were also made to withstand the blow of "pangherong bakal sa pisngi" and to endure a "matalas na punyal." 155 As a final step in the ritual, the neophyte Katipunero was made to sign membership papers with the his own blood. 156

It is believed that the Greek fraternity system was transported by the Americans to the Philippines in the late 19th century. As can be seen in the following instances, the manner of hazing in the United States was jarringly similar to that inflicted by the Aquila Fraternity on Lenny Villa. AcaEDC Early in 1865, upperclassmen at West Point Academy forced the fourth classmen to do exhausting physical exercises that sometimes resulted in permanent physical damage; to eat or drink unpalatable foods; and in various ways to humiliate themselves. 157 In 1901, General Douglas MacArthur got involved in a congressional investigation of hazing at the academy during his second year at West Point. 158 In Easler v. Hejaz Temple of Greenville, decided in 1985, the candidate-victim was injured during the shriner's hazing event, which was part of the initiation ceremonies for Hejaz membership. 159 The ritual involved what was known as the "mattressrotating barrel trick." 160 It required each candidate to slide down an eight- to nine-foot-high metal board onto connected mattresses leading to a barrel, over which the candidate was required to climb. 161 Members of Hejaz would stand on each side of the mattresses and barrel and fun-paddle candidates en route to the barrel. 162 In a video footage taken in 1991, U.S. Marine paratroopers in Camp Lejeune, North Carolina, were seen performing a ceremony in which they pinned paratrooper jump wings directly onto the neophyte paratroopers' chests. 163 The victims were shown writhing and crying out in pain as others pounded the spiked medals through the shirts and into the chests of the victims. 164 In State v. Allen, decided in 1995, the Southeast Missouri State University chapter of Kappa Alpha Psi invited male students to enter into a pledgeship program. 165 The fraternity members subjected the pledges to repeated physical abuse including repeated, open-hand strikes at the nape, the chest, and the back; caning of the bare soles of the feet and buttocks; blows to the back with the use of a heavy book and a cookie sheet while the pledges were on their hands and knees; various kicks and punches to the body; and "body slamming," an activity in which active members of the fraternity lifted pledges up in the air and dropped them to the ground. 166 The fraternity members then put the pledges through a seven-station circle of physical abuse. 167 In Ex Parte Barran, decided in 1998, the pledge-victim went through hazing by fraternity members of the Kappa Alpha Order at the Auburn University in Alabama. 168 The hazing included the following: (1) having to dig a ditch and jump into it after it had been filled with water, urine, feces, dinner leftovers, and vomit; (2) receiving paddlings on the buttocks; (3) being pushed and kicked, often onto walls or into pits and trash cans; (4) eating foods like peppers, hot sauce, butter, and "yerks" (a mixture of hot sauce, mayonnaise, butter, beans, and other items); (5) doing chores for the fraternity and its members, such as cleaning the fraternity house and yard, being designated as driver, and running errands; (6) appearing regularly at 2 a.m. "meetings," during which the pledges would be hazed for a couple of hours; and (7) "running the gauntlet," during which the pledges were pushed, kicked, and hit as they ran down a hallway and descended down a flight of stairs. 169 IDCcEa In Lloyd v. Alpha Phi Alpha Fraternity, decided in 1999, the victim Sylvester Lloyd was accepted to pledge at the Cornell University chapter of the Alpha Phi Alpha Fraternity. 170 He participated in initiation activities, which included various forms of physical beatings and torture, psychological coercion and embarrassment. 171 In Kenner v. Kappa Alpha Psi Fraternity, decided in 2002, the initiate-victim suffered injuries from hazing activities during the fraternity's initiation rites. 172 Kenner and the other initiates went through psychological and physical hazing, including being paddled on the buttocks for more than 200 times. 173 In Morton v. State, Marcus Jones a university student in Florida sought initiation into the campus chapter of the Kappa Alpha Psi Fraternity during the 2005-06 academic year. 174 The pledge's efforts to join the fraternity culminated in a series of initiation rituals conducted in four nights. Jones, together with other candidates, was blindfolded, verbally harassed, and caned on his face and buttocks. 175 In these rituals described as "preliminaries," which lasted for two evenings, he received approximately 60 canings on his buttocks. 176 During the last two days of the hazing, the rituals intensified. 177 The pledges sustained roughly 210 cane strikes during the four-night initiation. 178 Jones and several other candidates passed out. 179 The purported raison d'tre behind hazing practices is the proverbial "birth by fire," through which the pledge who has successfully withstood the hazing proves his or her worth. 180 Some organizations even believe that hazing is the path to enlightenment. It is said that this process enables the organization to establish unity among the pledges and, hence, reinforces and ensures the future of the organization. 181 Alleged benefits of joining include leadership opportunities; improved

academic performance; higher self-esteem; professional networking opportunities; and the esprit d'corp associated with close, almost filial, friendship and common cause. 182 Anti-Hazing laws in the U.S. The first hazing statute in the U.S. appeared in 1874 in response to hazing in the military. 183 The hazing of recruits and plebes in the armed services was so prevalent that Congress prohibited all forms of military hazing, harmful or not. 184 It was not until 1901 that Illinois passed the first state anti-hazing law, criminalizing conduct "whereby any one sustains an injury to his [or her] person therefrom." 185 EHScCA However, it was not until the 1980s and 1990s, due in large part to the efforts of the Committee to Halt Useless College Killings and other similar organizations, that states increasingly began to enact legislation prohibiting and/or criminalizing hazing. 186 As of 2008, all but six states had enacted criminal or civil statutes proscribing hazing. 187 Most anti-hazing laws in the U.S. treat hazing as a misdemeanor and carry relatively light consequences for even the most severe situations. 188 Only a few states with anti-hazing laws consider hazing as a felony in case death or great bodily harm occurs. 189 Under the laws of Illinois, hazing is a Class A misdemeanor, except hazing that results in death or great bodily harm, which is a Class 4 felony. 190 In a Class 4 felony, a sentence of imprisonment shall be for a term of not less than one year and not more than three years. 191 Indiana criminal law provides that a person who recklessly, knowingly, or intentionally performs hazing that results in serious bodily injury to a person commits criminal recklessness, a Class D felony. 192 The offense becomes a Class C felony if committed by means of a deadly weapon. 193 As an element of a Class C felony criminal recklessness resulting in serious bodily injury, death falls under the category of "serious bodily injury." 194 A person who commits a Class C felony is imprisoned for a fixed term of between two (2) and eight (8) years, with the advisory sentence being four (4) years. 195 Pursuant to Missouri law, hazing is a Class A misdemeanor, unless the act creates a substantial risk to the life of the student or prospective member, in which case it becomes a Class C felony. 196 A Class C felony provides for an imprisonment term not to exceed seven years. 197 In Texas, hazing that causes the death of another is a state jail felony. 198 An individual adjudged guilty of a state jail felony is punished by confinement in a state jail for any term of not more than two years or not less than 180 days. 199 Under Utah law, if hazing results in serious bodily injury, the hazer is guilty of a third-degree felony. 200 A person who has been convicted of a third-degree felony may be sentenced to imprisonment for a term not to exceed five years. 201 West Virginia law provides that if the act of hazing would otherwise be deemed a felony, the hazer may be found guilty thereof and subject to penalties provided therefor. 202 In Wisconsin, a person is guilty of a Class G felony if hazing results in the death of another. 203 A Class G felony carries a fine not to exceed $25,000 or imprisonment not to exceed 10 years, or both. 204 In certain states in the U.S., victims of hazing were left with limited remedies, as there was no hazing statute. 205 This situation was exemplified in Ballou v. Sigma Nu General Fraternity, wherein Barry Ballou's family resorted to a civil action for wrongful death, since there was no anti-hazing statute in South Carolina until 1994. 206 DcHaET The existence of animus interficendi or intent to kill not proven beyond reasonable doubt The presence of an ex ante situation in this case, fraternity initiation rites does not automatically amount to the absence of malicious intent or dolus malus. If it is proven beyond reasonable doubt that the perpetrators were equipped with a guilty mind whether or not there is a contextual background or factual premise they are still criminally liable for intentional felony. The trial court, the CA, and the Solicitor General are all in agreement that with the exception of Villareal and Dizon accused Tecson, Ama, Almeda, and Bantug did not have the animus interficendi or intent to kill Lenny Villa or the other neophytes. We shall no longer disturb this finding.

As regards Villareal and Dizon, the CA modified the Decision of the trial court and found that the two accused had the animus interficendi or intent to kill Lenny Villa, not merely to inflict physical injuries on him. It justified its finding of homicide against Dizon by holding that he had apparently been motivated by ill will while beating up Villa. Dizon kept repeating that his father's parking space had been stolen by the victim's father. 207 As to Villareal, the court said that the accused suspected the family of Bienvenido Marquez, one of the neophytes, to have had a hand in the death of Villareal's brother. 208 The CA then ruled as follows: The two had their own axes to grind against Villa and Marquez. It was very clear that they acted with evil and criminal intent. The evidence on this matter is unrebutted and so for the death of Villa, appellants Dizon and Villareal must and should face the consequence of their acts, that is, to be held liable for the crime of homicide. 209 (Emphasis supplied) We cannot subscribe to this conclusion. The appellate court relied mainly on the testimony of Bienvenido Marquez to determine the existence of animus interficendi. For a full appreciation of the context in which the supposed utterances were made, the Court deems it necessary to reproduce the relevant portions of witness Marquez's testimony: IEHSDA Witness We were brought up into [Michael Musngi's] room and we were briefed as to what to expect during the next three days and we were told the members of the fraternity and their batch and we were also told about the fraternity song, sir. xxx Witness We were escorted out of [Michael Musngi's] house and we were made to ride a van and we were brought to another place in Kalookan City which I later found to be the place of Mariano Almeda, sir. xxx Witness Upon arrival, we were instructed to bow our head down and to link our arms and then the driver of the van and other members of the Aquilans who were inside left us inside the van, sir. xxx Witness We heard voices shouted outside the van to the effect, "Villa akin ka," "Asuncion Patay ka" and the people outside pound the van, rock the van, sir. Atty. Tadiar Will you please recall in what tone of voice and how strong a voice these remarks uttered upon your arrival? Witness Some were almost shouting, you could feel the sense of excitement in their voices, sir. xxx Atty. Tadiar During all these times that the van was being rocked through and through, what were the voices or utterances that you heard? cSTHAC xxx xxx xxx xxx xxx xxx xxx xxx

Witness "Villa akin ka," "Asuncion patay ka," "Recinto patay ka sa amin," etc., sir. Atty. Tadiar And those utterances and threats, how long did they continue during the rocking of the van which lasted for 5 minutes? xxx Witness Even after they rocked the van, we still kept on hearing voices, sir. xxx Atty. Tadiar During the time that this rounds [of physical beating] were being inflicted, was there any utterances by anybody? Witness Yes sir. Some were piercing, some were discouraging, and some were encouraging others who were pounding and beating us, it was just like a fiesta atmosphere, actually some of them enjoyed looking us being pounded, sir. Atty. Tadiar Do you recall what were those voices that you heard? Witness One particular utterance always said was, they asked us whether "matigas pa yan, kayang-kaya pa niyan." Atty. Tadiar Do you know who in particular uttered those particular words that you quote? HDITCS Witness I cannot particularly point to because there were utterances simultaneously, I could not really pin point who uttered those words, sir. xxx Atty. Tadiar Were there any utterances that you heard during the conduct of this Bicol Express? Witness Yes, sir I heard utterances. Atty. Tadiar Will you please recall to this Honorable Court what were the utterances that you remember? Witness xxx xxx xxx xxx xxx xxx

For example, one person particularly Boyet Dizon stepped on my thigh, he would say that and I quote "ito, yung pamilya nito ay pinapatay yung kapatid ko," so that would in turn sort of justifying him in inflicting more serious pain on me. So instead of just walking, he would jump on my thighs and then after on was Lenny Villa. He was saying to the effect that "this guy, his father stole the parking space of my father," sir. So, that's why he inflicted more pain on Villa and that went on, sir. Atty. Tadiar And you were referring to which particular accused? Witness Boyet Dizon, sir. Atty. Tadiar ETHSAI When Boyet Dizon at that particular time was accusing you of having your family have his brother killed, what was your response? Witness Of course, I knew sir that it was not true and that he was just making it up sir. So he said that I knew nothing of that incident. However, he just in fact after the Bicol Express, he kept on uttering those words/statements so that it would in turn justify him and to give me harder blows, sir. xxx Atty. Tadiar You mentioned about Dizon in particular mentioning that Lenny Villa's father stole the parking space allotted for his father, do you recall who were within hearing distance when that utterance was made? Witness Yes, sir. All of the neophytes heard that utterance, sir. xxx Witness There were different times made this accusation so there were different people who heard from time to time, sir. xxx Atty. Tadiar Can you tell the Honorable Court when was the next accusation against Lenny Villa's father was made? Witness When we were line up against the wall, Boyet Dizon came near to us and when Lenny Villa's turn, I heard him uttered those statements, sir. Atty. Tadiar cCSHET What happened after he made this accusation to Lenny Villa's father? Witness He continued to inflict blows on Lenny Villa. xxx xxx xxx xxx xxx xxx

Atty. Tadiar How were those blows inflicted? Witness There were slaps and he knelt on Lenny Villa's thighs and sometime he stand up and he kicked his thighs and sometimes jumped at it, sir. xxx Atty. Tadiar We would go on to the second day but not right now. You mentioned also that accusations made by Dizon "you or your family had his brother killed," can you inform this Honorable Court what exactly were the accusations that were charged against you while inflicting blows upon you in particular? Witness While he was inflicting blows upon me, he told me in particular if I knew that his family who had his brother killed, and he said that his brother was an NPA, sir so I knew that it was just a story that he made up and I said that I knew nothing about it and he continued inflicting blows on me, sir. And another incident was when a talk was being given, Dizon was on another part of the pelota court and I was sort of looking and we saw that he was drinking beer, and he said and I quote: "Marquez, Marquez, ano ang tinitingin-tingin mo diyan, ikaw yung pamilya mo ang nagpapatay sa aking kapatid, yari ka sa akin," sir. Atty. Tadiar What else? ECaSIT Witness That's all, sir. Atty. Tadiar And on that first night of February 8, 1991, did ever a doctor or a physician came around as promised to you earlier? Witness No, sir. 210 (Emphasis supplied) On cross-examination, witness Bienvenido Marquez testified thus: Judge Purisima When you testified on direct examination Mr. Marquez, have you stated that there was a briefing that was conducted immediately before your initiation as regards to what to expect during the initiation, did I hear you right? Witness Yes, sir. Judge Purisima Who did the briefing? Witness xxx xxx

Mr. Michael Musngi, sir and Nelson Victorino. Judge Purisima Will you kindly tell the Honorable Court what they told you to expect during the initiation? Witness They told us at the time we would be brought to a particular place, we would be mocked at, sir. Judge Purisima IDAaCc So, you expected to be mocked at, ridiculed, humiliated etc., and the likes? Witness Yes, sir. Judge Purisima You were also told beforehand that there would be physical contact? Witness Yes, sir at the briefing. xxx Witness Yes, sir, because they informed that we could immediately go back to school. All the bruises would be limited to our arms and legs, sir. So, if we wear the regular school uniforms like long sleeves, it would be covered actually so we have no thinking that our face would be slapped, sir. Judge Purisima So, you mean to say that beforehand that you would have bruises on your body but that will be covered? Witness Yes, sir. Judge Purisima So, what kind of physical contact or implements that you expect that would create bruises to your body? Witness At that point I am already sure that there would be hitting by a paddling or paddle, sir. DAaIHT xxx xxx xxx xxx xxx

Judge Purisima Now, will you admit Mr. Marquez that much of the initiation procedures is psychological in nature? Witness Combination, sir. 211 (Emphasis supplied)

xxx Atty. Jimenez

xxx

xxx

The initiation that was conducted did not consist only of physical initiation, meaning body contact, is that correct? Witness Yes, sir. Atty. Jimenez Part of the initiation was the so-called psychological initiation, correct? Witness Yes, sir. Atty. Jimenez And this consisted of making you believe of things calculated to terrify you, scare you, correct? Witness Yes, sir. Atty. Jimenez In other words, the initiating masters made belief situation intended to, I repeat, terrify you, frighten you, scare you into perhaps quitting the initiation, is this correct? HIACEa Witness Sometimes sir, yes. Atty. Jimenez You said on direct that while Mr. Dizon was initiating you, he said or he was supposed to have said according to you that your family were responsible for the killing of his brother who was an NPA, do you remember saying that? Witness Yes, sir. Atty. Jimenez You also said in connection with that statement said to you by Dizon that you did not believe him because that is not true, correct? Witness Yes, sir. Atty. Jimenez In other words, he was only psychologizing you perhaps, the purpose as I have mentioned before, terrifying you, scaring you or frightening you into quitting the initiation, this is correct? Witness

No, sir, perhaps it is one but the main reason, I think, why he was saying those things was because he wanted to inflict injury. Atty. Jimenez He did not tell that to you. That is your only perception, correct? Witness HaIATC No, sir, because at one point, while he was telling this to Villareal, he was hitting me. Atty. Jimenez But did you not say earlier that you [were] subjected to the same forms of initiation by all the initiating masters? You said that earlier, right? Witness Yes, sir. Atty. Jimenez Are you saying also that the others who jumped on you or kicked you said something similar as was told to you by Mr. Dizon? Witness No, sir. Atty. Jimenez But the fact remains that in the Bicol Express for instance, the masters would run on your thighs, right? Witness Yes, sir. Atty. Jimenez This was the regular procedure that was followed by the initiating masters not only on you but also on the other neophytes? Witness Yes, sir. Atty. Jimenez In other words, it is fair to say that whatever forms of initiation was administered by one master, was also administered by one master on a neophyte, was also administered by another master on the other neophyte, this is correct? CcSEIH Witness Yes, sir. 212 (Emphasis supplied) According to the Solicitor General himself, the ill motives attributed by the CA to Dizon and Villareal were "baseless," 213 since the statements of the accused were "just part of the psychological initiation calculated to instill fear on the part of the neophytes"; that "[t]here is no element of truth in it as testified by Bienvenido Marquez"; and that the "harsh words uttered by

Petitioner and Villareal are part of 'tradition' concurred and accepted by all the fraternity members during their initiation rites." 214 We agree with the Solicitor General. The foregoing testimony of witness Marquez reveals a glaring mistake of substantial proportion on the part of the CA it mistook the utterances of Dizon for those of Villareal. Such inaccuracy cannot be tolerated, especially because it was the CA's primary basis for finding that Villareal had the intent to kill Lenny Villa, thereby making Villareal guilty of the intentional felony of homicide. To repeat, according to Bienvenido Marquez's testimony, as reproduced above, it was Dizon who uttered both "accusations" against Villa and Marquez; Villareal had no participation whatsoever in the specific threats referred to by the CA. It was "Boyet Dizon [who] stepped on [Marquez's] thigh"; and who told witness Marquez, "[I]to, yung pamilya nito ay pinapatay yung kapatid ko." It was also Dizon who jumped on Villa's thighs while saying, "[T]his guy, his father stole the parking space of my father." With the testimony clarified, we find that the CA had no basis for concluding the existence of intent to kill based solely thereon. As to the existence of animus interficendi on the part of Dizon, we refer to the entire factual milieu and contextual premise of the incident to fully appreciate and understand the testimony of witness Marquez. At the outset, the neophytes were briefed that they would be subjected to psychological pressure in order to scare them. They knew that they would be mocked, ridiculed, and intimidated. They heard fraternity members shout, "Patay ka, Recinto," "Yari ka, Recinto," "Villa, akin ka," "Asuncion, gulpi ka," "Putang ina mo, Asuncion," "Putang ina nyo, patay kayo sa amin," or some other words to that effect. 215 While beating the neophytes, Dizon accused Marquez of the death of the former's purported NPA brother, and then blamed Lenny Villa's father for stealing the parking space of Dizon's father. According to the Solicitor General, these statements, including those of the accused Dizon, were all part of the psychological initiation employed by the Aquila Fraternity. 216 DSHTaC Thus, to our understanding, accused Dizon's way of inflicting psychological pressure was through hurling make-believe accusations at the initiates. He concocted the fictitious stories, so that he could "justify" giving the neophytes harder blows, all in the context of fraternity initiation and role playing. Even one of the neophytes admitted that the accusations were untrue and made-up. The infliction of psychological pressure is not unusual in the conduct of hazing. In fact, during the Senate deliberations on the then proposed Anti-Hazing Law, former Senator Lina spoke as follows: Senator Lina. so as to capture the intent that we conveyed during the period of interpellations on why we included the phrase "or psychological pain and suffering." xxx xxx xxx

So that if no direct physical harm is inflicted upon the neophyte or the recruit but the recruit or neophyte is made to undergo certain acts which I already described yesterday, like playing the Russian roulette extensively to test the readiness and the willingness of the neophyte or recruit to continue his desire to be a member of the fraternity, sorority or similar organization or playing and putting a noose on the neck of the neophyte or recruit, making the recruit or neophyte stand on the ledge of the fourth floor of the building facing outside, asking him to jump outside after making him turn around several times but the reality is that he will be made to jump towards the inside portion of the building these are the mental or psychological tests that are resorted to by these organizations, sororities or fraternities. The doctors who appeared during the public hearing testified that such acts can result in some mental aberration, that they can even lead to psychosis, neurosis or insanity. This is what we want to prevent. 217 (Emphasis supplied) Thus, without proof beyond reasonable doubt, Dizon's behavior must not be automatically viewed as evidence of a genuine, evil motivation to kill Lenny Villa. Rather, it must be taken within the context of the fraternity's psychological initiation. This Court points out that it was not even established whether the fathers of Dizon and Villa really had any familiarity with each other as would lend credence to the veracity of Dizon's threats. The testimony of Lenny's co-neophyte, Marquez, only confirmed this view. According to Marquez, he "knew it was not true and that [Dizon] was just making it up. . . ." 218 Even the trial court did not give weight to the utterances of Dizon as constituting intent to kill: "[T]he cumulative acts of all the accused were not directed toward killing Villa, but merely to inflict physical harm as part of the fraternity initiation rites . . . ." 219 The Solicitor General shares the same view. aSTAcH

Verily, we cannot sustain the CA in finding the accused Dizon guilty of homicide under Article 249 of the Revised Penal Code on the basis of the existence of intent to kill. Animus interficendi cannot and should not be inferred unless there is proof beyond reasonable doubt of such intent. 220 Instead, we adopt and reinstate the finding of the trial court in part, insofar as it ruled that none of the fraternity members had the specific intent to kill Lenny Villa. 221 The existence of animus iniuriandi or malicious intent to injure not proven beyond reasonable doubt The Solicitor General argues, instead, that there was an intent to inflict physical injuries on Lenny Villa. Echoing the Decision of the trial court, the Solicitor General then posits that since all of the accused fraternity members conspired to inflict physical injuries on Lenny Villa and death ensued, all of them should be liable for the crime of homicide pursuant to Article 4 (1) of the Revised Penal Code. In order to be found guilty of any of the felonious acts under Articles 262 to 266 of the Revised Penal Code, 222 the employment of physical injuries must be coupled with dolus malus. As an act that is mala in se, the existence of malicious intent is fundamental, since injury arises from the mental state of the wrongdoer iniuria ex affectu facientis consistat. If there is no criminal intent, the accused cannot be found guilty of an intentional felony. Thus, in case of physical injuries under the Revised Penal Code, there must be a specific animus iniuriandi or malicious intention to do wrong against the physical integrity or well-being of a person, so as to incapacitate and deprive the victim of certain bodily functions. Without proof beyond reasonable doubt of the required animus iniuriandi, the overt act of inflicting physical injuries per se merely satisfies the elements of freedom and intelligence in an intentional felony. The commission of the act does not, in itself, make a man guilty unless his intentions are. 223 Thus, we have ruled in a number of instances 224 that the mere infliction of physical injuries, absent malicious intent, does not make a person automatically liable for an intentional felony. In Bagajo v. People, 225 the accused teacher, using a bamboo stick, whipped one of her students behind her legs and thighs as a form of discipline. The student suffered lesions and bruises from the corporal punishment. In reversing the trial court's finding of criminal liability for slight physical injuries, this Court stated thus: "Independently of any civil or administrative responsibility . . . [w]e are persuaded that she did not do what she had done with criminal intent . . . the means she actually used was moderate and that she was not motivated by ill-will, hatred or any malevolent intent." Considering the applicable laws, we then ruled that "as a matter of law, petitioner did not incur any criminal liability for her act of whipping her pupil." In People v. Carmen, 226 the accused members of the religious group known as the Missionaries of Our Lady of Fatima under the guise of a "ritual or treatment" plunged the head of the victim into a barrel of water, banged his head against a bench, pounded his chest with fists, and stabbed him on the side with a kitchen knife, in order to cure him of "nervous breakdown" by expelling through those means the bad spirits possessing him. The collective acts of the group caused the death of the victim. Since malicious intent was not proven, we reversed the trial court's finding of liability for murder under Article 4 of the Revised Penal Code and instead ruled that the accused should be held criminally liable for reckless imprudence resulting in homicide under Article 365 thereof. DAHCaI Indeed, the threshold question is whether the accused's initial acts of inflicting physical pain on the neophytes were attended by animus iniuriandi amounting to a felonious act punishable under the Revised Penal Code, thereby making it subject to Article 4 (1) thereof. In People v. Regato, we ruled that malicious intent must be judged by the action, conduct, and external acts of the accused. 227 What persons do is the best index of their intention. 228 We have also ruled that the method employed, the kind of weapon used, and the parts of the body on which the injury was inflicted may be determinative of the intent of the perpetrator. 229 The Court shall thus examine the whole contextual background surrounding the death of Lenny Villa. Lenny died during Aquila's fraternity initiation rites. The night before the commencement of the rites, they were briefed on what to expect. They were told that there would be physical beatings, that the whole event would last for three days, and that they could quit anytime. On their first night, they were subjected to "traditional" initiation rites, including the "Indian Run," "Bicol Express," "Rounds," and the "Auxies' Privilege Round." The beatings were predominantly directed at the neophytes' arms and legs.

In the morning of their second day of initiation, they were made to present comic plays and to play rough basketball. They were also required to memorize and recite the Aquila Fraternity's principles. Late in the afternoon, they were once again subjected to "traditional" initiation rituals. When the rituals were officially reopened on the insistence of Dizon and Villareal, the neophytes were subjected to another "traditional" ritual paddling by the fraternity. During the whole initiation rites, auxiliaries were assigned to the neophytes. The auxiliaries protected the neophytes by functioning as human barriers and shielding them from those who were designated to inflict physical and psychological pain on the initiates. 230 It was their regular duty to stop foul or excessive physical blows; to help the neophytes to "pump" their legs in order that their blood would circulate; to facilitate a rest interval after every physical activity or "round"; to serve food and water; to tell jokes; to coach the initiates; and to give them whatever they needed. These rituals were performed with Lenny's consent. 231 A few days before the "rites," he asked both his parents for permission to join the Aquila Fraternity. 232 His father knew that Lenny would go through an initiation process and would be gone for three days. 233 The CA found as follows: CETIDH It is worth pointing out that the neophytes willingly and voluntarily consented to undergo physical initiation and hazing. As can be gleaned from the narration of facts, they voluntarily agreed to join the initiation rites to become members of the Aquila Legis Fraternity. Prior to the initiation, they were given briefings on what to expect. It is of common knowledge that before admission in a fraternity, the neophytes will undergo a rite of passage. Thus, they were made aware that traditional methods such as mocking, psychological tests and physical punishment would take place. They knew that the initiation would involve beatings and other forms of hazing. They were also told of their right and opportunity to quit at any time they wanted to. In fact, prosecution witness Navera testified that accused Tecson told him that "after a week, you can already play basketball." Prosecution witness Marquez for his part, admitted that he knew that the initiates would be hit "in the arms and legs," that a wooden paddle would be used to hit them and that he expected bruises on his arms and legs. . . . Indeed, there can be no fraternity initiation without consenting neophytes. 234 (Emphasis supplied) Even after going through Aquila's grueling traditional rituals during the first day, Lenny continued his participation and finished the second day of initiation. Based on the foregoing contextual background, and absent further proof showing clear malicious intent, we are constrained to rule that the specific animus iniuriandi was not present in this case. Even if the specific acts of punching, kicking, paddling, and other modes of inflicting physical pain were done voluntarily, freely, and with intelligence, thereby satisfying the elements of freedom and intelligence in the felony of physical injuries, the fundamental ingredient of criminal intent was not proven beyond reasonable doubt. On the contrary, all that was proven was that the acts were done pursuant to tradition. Although the additional "rounds" on the second night were held upon the insistence of Villareal and Dizon, the initiations were officially reopened with the consent of the head of the initiation rites; and the accused fraternity members still participated in the rituals, including the paddling, which were performed pursuant to tradition. Other than the paddle, no other "weapon" was used to inflict injuries on Lenny. The targeted body parts were predominantly the legs and the arms. The designation of roles, including the role of auxiliaries, which were assigned for the specific purpose of lending assistance to and taking care of the neophytes during the initiation rites, further belied the presence of malicious intent. All those who wished to join the fraternity went through the same process of "traditional" initiation; there is no proof that Lenny Villa was specifically targeted or given a different treatment. We stress that Congress itself recognized that hazing is uniquely different from common crimes. 235 The totality of the circumstances must therefore be taken into consideration. HACaSc The underlying context and motive in which the infliction of physical injuries was rooted may also be determined by Lenny's continued participation in the initiation and consent to the method used even after the first day. The following discussion of the framers of the 1995 Anti-Hazing Law is enlightening: SENATOR GUINGONA. Most of these acts, if not all, are already punished under the Revised Penal Code. SENATOR LINA. That is correct, Mr. President.

SENATOR GUINGONA. If hazing is done at present and it results in death, the charge would be murder or homicide. SENATOR LINA. That is correct, Mr. President. SENATOR GUINGONA. If it does not result in death, it may be frustrated homicide or serious physical injuries. SENATOR LINA. That is correct, Mr. President. SENATOR GUINGONA. Or, if the person who commits sexual abuse does so it can be penalized under rape or acts of lasciviousness. SENATOR LINA. That is correct, Mr. President. SENATOR GUINGONA. So, what is the rationale for making a new offense under this definition of the crime of hazing? SENATOR LINA. To discourage persons or group of persons either composing a sorority, fraternity or any association from making this requirement of initiation that has already resulted in these specific acts or results, Mr. President. That is the main rationale. We want to send a strong signal across the land that no group or association can require the act of physical initiation before a person can become a member without being held criminally liable. xxx xxx xxx

SENATOR GUINGONA. Yes, but what would be the rationale for that imposition? Because the distinguished Sponsor has said that he is not punishing a mere organization, he is not seeking the punishment of an initiation into a club or organization, he is seeking the punishment of certain acts that resulted in death, et cetera as a result of hazing which are already covered crimes. AICHaS The penalty is increased in one, because we would like to discourage hazing, abusive hazing, but it may be a legitimate defense for invoking two or more charges or offenses, because these very same acts are already punishable under the Revised Penal Code. That is my difficulty, Mr. President. SENATOR LINA. ... Another point, Mr. President, is this, and this is a very telling difference: When a person or group of persons resort to hazing as a requirement for gaining entry into an organization, the intent to commit a wrong is not visible or is not present, Mr. President. Whereas, in these specific crimes, Mr. President, let us say there is death or there is homicide, mutilation, if one files a case, then the intention to commit a wrong has to be proven. But if the crime of hazing is the basis, what is important is the result from the act of hazing.

To me, that is the basic difference and that is what will prevent or deter the sororities or fraternities; that they should really shun this activity called "hazing." Because, initially, these fraternities or sororities do not even consider having a neophyte killed or maimed or that acts of lasciviousness are even committed initially, Mr. President. So, what we want to discourage is the so-called initial innocent act. That is why there is need to institute this kind of hazing. Ganiyan po ang nangyari. Ang fraternity o ang sorority ay magre-recruit. Wala talaga silang intensiyong makamatay. Hindi ko na babanggitin at buhay pa iyong kaso. Pero dito sa anim o pito na namatay nitong nakaraang taon, walang intensiyong patayin talaga iyong neophyte. So, kung maghihintay pa tayo, na saka lamang natin isasakdal ng murder kung namatay na, ay after the fact ho iyon. Pero, kung sasabihin natin sa mga kabataan na: "Huwag ninyong gagawin iyong hazing. Iyan ay kasalanan at kung mamatay diyan, mataas ang penalty sa inyo." xxx xxx xxx

SENATOR GUINGONA. I join the lofty motives, Mr. President, of the distinguished Sponsor. But I am again disturbed by his statement that the prosecution does not have to prove the intent that resulted in the death, that resulted in the serious physical injuries, that resulted in the acts of lasciviousness or deranged mind. We do not have to prove the willful intent of the accused in proving or establishing the crime of hazing. This seems, to me, a novel situation where we create the special crime without having to go into the intent, which is one of the basic elements of any crime. cDAISC If there is no intent, there is no crime. If the intent were merely to initiate, then there is no offense. And even the distinguished Sponsor admits that the organization, the intent to initiate, the intent to have a new society or a new club is, per se, not punishable at all. What are punishable are the acts that lead to the result. But if these results are not going to be proven by intent, but just because there was hazing, I am afraid that it will disturb the basic concepts of the Revised Penal Code, Mr. President. SENATOR LINA. Mr. President, the act of hazing, precisely, is being criminalized because in the context of what is happening in the sororities and fraternities, when they conduct hazing, no one will admit that their intention is to maim or to kill. So, we are already criminalizing the fact of inflicting physical pain. Mr. President, it is a criminal act and we want it stopped, deterred, discouraged. If that occurs, under this law, there is no necessity to prove that the masters intended to kill or the masters intended to maim. What is important is the result of the act of hazing. Otherwise, the masters or those who inflict the physical pain can easily escape responsibility and say, "We did not have the intention to kill. This is part of our initiation rites. This is normal. We do not have any intention to kill or maim." This is the lusot, Mr. President. They might as well have been charged therefore with the ordinary crime of homicide, mutilation, et cetera, where the prosecution will have a difficulty proving the elements if they are separate offenses. xxx xxx xxx

SENATOR GUINGONA. Mr. President, assuming there was a group that initiated and a person died. The charge is murder. My question is: Under this bill if it becomes a law, would the prosecution have to prove conspiracy or not anymore? SENATOR LINA. Mr. President, if the person is present during hazing . . . SENATOR GUINGONA. The persons are present. First, would the prosecution have to prove conspiracy? Second, would the prosecution have to prove intent to kill or not? CITcSH

SENATOR LINA. No more. As to the second question, Mr. President, if that occurs, there is no need to prove intent to kill. SENATOR GUINGONA. But the charge is murder. SENATOR LINA. That is why I said that it should not be murder. It should be hazing, Mr. President. 236 (Emphasis supplied) During a discussion between Senator Biazon and Senator Lina on the issue of whether to include sodomy as a punishable act under the Anti-Hazing Law, Senator Lina further clarified thus: SENATOR BIAZON. Mr. President, this Representation has no objection to the inclusion of sodomy as one of the conditions resulting from hazing as necessary to be punished. However, the act of sodomy can be committed by two persons with or without consent. To make it clearer, what is being punished here is the commission of sodomy forced into another individual by another individual. I move, Mr. President, that sodomy be modified by the phrase "without consent" for purposes of this section. SENATOR LINA. I am afraid, Mr. President, that if we qualify sodomy with the concept that it is only going to aggravate the crime of hazing if it is done without consent will change a lot of concepts here. Because the results from hazing aggravate the offense with or without consent. In fact, when a person joins a fraternity, sorority, or any association for that matter, it can be with or without the consent of the intended victim. The fact that a person joins a sorority or fraternity with his consent does not negate the crime of hazing. This is a proposed law intended to protect the citizens from the malpractices that attend initiation which may have been announced with or without physical infliction of pain or injury, Mr. President. Regardless of whether there is announcement that there will be physical hazing or whether there is none, and therefore, the neophyte is duped into joining a fraternity is of no moment. What is important is that there is an infliction of physical pain. The bottom line of this law is that a citizen even has to be protected from himself if he joins a fraternity, so that at a certain point in time, the State, the individual, or the parents of the victim can run after the perpetrators of the crime, regardless of whether or not there was consent on the part of the victim. cCTAIE xxx xxx xxx

SENATOR LINA. Mr. President, I understand the position taken by the distinguished Gentleman from Cavite and Metro Manila. It is correct that society sometimes adopts new mores, traditions, and practices. In this bill, we are not going to encroach into the private proclivities of some individuals when they do their acts in private as we do not take a peek into the private rooms of couples. They can do their thing if they want to make love in ways that are not considered acceptable by the mainstream of society. That is not something that the State should prohibit. But sodomy in this case is connected with hazing, Mr. President. Such that the act may even be entered into with consent. It is not only sodomy. The infliction of pain may be done with the consent of the neophyte. If the law is passed, that does not make the act of hazing not punishable because the neophyte accepted the infliction of pain upon himself. If the victim suffers from serious physical injuries, but the initiator said, "Well, he allowed it upon himself. He consented to it." So, if we allow that reasoning that sodomy was done with the consent of the victim, then we would not have

passed any law at all. There will be no significance if we pass this bill, because it will always be a defense that the victim allowed the infliction of pain or suffering. He accepted it as part of the initiation rites. But precisely, Mr. President that is one thing that we would want to prohibit. That the defense of consent will not apply because the very act of inflicting physical pain or psychological suffering is, by itself, a punishable act. The result of the act of hazing, like death or physical injuries merely aggravates the act with higher penalties. But the defense of consent is not going to nullify the criminal nature of the act. So, if we accept the amendment that sodomy can only aggravate the offense if it is committed without consent of the victim, then the whole foundation of this proposed law will collapse. SENATOR BIAZON. Thank you, Mr. President. SENATOR LINA. Thank you very much. cIaCTS THE PRESIDENT. Is there any objection to the committee amendment? (Silence.) The Chair hears none; the same is approved. 237 (Emphasis supplied) Realizing the implication of removing the state's burden to prove intent, Senator Lina, the principal author of the Senate Bill, said: I am very happy that the distinguished Minority Leader brought out the idea of intent or whether there it is mala in se or mala prohibita. There can be a radical amendment if that is the point that he wants to go to. If we agree on the concept, then, maybe, we can just make this a special law on hazing. We will not include this anymore under the Revised Penal Code. That is a possibility. I will not foreclose that suggestion, Mr. President. 238 (Emphasis supplied) Thus, having in mind the potential conflict between the proposed law and the core principle of mala in se adhered to under the Revised Penal Code, Congress did not simply enact an amendment thereto. Instead, it created a special law on hazing, founded upon the principle of mala prohibita. This dilemma faced by Congress is further proof of how the nature of hazing unique as against typical crimes cast a cloud of doubt on whether society considered the act as an inherently wrong conduct or mala in se at the time. It is safe to presume that Lenny's parents would not have consented 239 to his participation in Aquila Fraternity's initiation rites if the practice of hazing were considered by them as mala in se. Furthermore, in Vedaa v. Valencia (1998), we noted through Associate Justice (now retired Chief Justice) Hilario Davide that "in our nation's very recent history, the people have spoken, through Congress, to deem conduct constitutive of . . . hazing, [an] act[] previously considered harmless by custom, as criminal." 240 Although it may be regarded as a simple obiter dictum, the statement nonetheless shows recognition that hazing or the conduct of initiation rites through physical and/or psychological suffering has not been traditionally criminalized. Prior to the 1995 Anti-Hazing Law, there was to some extent a lacuna in the law; hazing was not clearly considered an intentional felony. And when there is doubt on the interpretation of criminal laws, all must be resolved in favor of the accused. In dubio pro reo. For the foregoing reasons, and as a matter of law, the Court is constrained to rule against the trial court's finding of malicious intent to inflict physical injuries on Lenny Villa, there being no proof beyond reasonable doubt of the existence of malicious intent to inflict physical injuries or animus iniuriandi as required in mala in se cases, considering the contextual background of his death, the unique nature of hazing, and absent a law prohibiting hazing. EAIcCS The accused fraternity members guilty of reckless imprudence resulting in homicide

The absence of malicious intent does not automatically mean, however, that the accused fraternity members are ultimately devoid of criminal liability. The Revised Penal Code also punishes felonies that are committed by means of fault (culpa). According to Article 3 thereof, there is fault when the wrongful act results from imprudence, negligence, lack of foresight, or lack of skill. Reckless imprudence or negligence consists of a voluntary act done without malice, from which an immediate personal harm, injury or material damage results by reason of an inexcusable lack of precaution or advertence on the part of the person committing it. 241 In this case, the danger is visible and consciously appreciated by the actor. 242 In contrast, simple imprudence or negligence comprises an act done without grave fault, from which an injury or material damage ensues by reason of a mere lack of foresight or skill. 243 Here, the threatened harm is not immediate, and the danger is not openly visible. 244 The test 245 for determining whether or not a person is negligent in doing an act is as follows: Would a prudent man in the position of the person to whom negligence is attributed foresee harm to the person injured as a reasonable consequence of the course about to be pursued? If so, the law imposes on the doer the duty to take precaution against the mischievous results of the act. Failure to do so constitutes negligence. 246 As we held in Gaid v. People, for a person to avoid being charged with recklessness, the degree of precaution and diligence required varies with the degree of the danger involved. 247 If, on account of a certain line of conduct, the danger of causing harm to another person is great, the individual who chooses to follow that particular course of conduct is bound to be very careful, in order to prevent or avoid damage or injury. 248 In contrast, if the danger is minor, not much care is required. 249 It is thus possible that there are countless degrees of precaution or diligence that may be required of an individual, "from a transitory glance of care to the most vigilant effort." 250 The duty of the person to employ more or less degree of care will depend upon the circumstances of each particular case. 251 There was patent recklessness in the hazing of Lenny Villa. SHDAEC According to the NBI medico-legal officer, Lenny died of cardiac failure secondary to multiple traumatic injuries. 252 The officer explained that cardiac failure refers to the failure of the heart to work as a pump and as part of the circulatory system due to the lack of blood. 253 In the present case, the victim's heart could no longer work as a pumping organ, because it was deprived of its requisite blood and oxygen. 254 The deprivation was due to the "channeling" of the blood supply from the entire circulatory system including the heart, arteries, veins, venules, and capillaries to the thigh, leg, and arm areas of Lenny, thus causing the formation of multiple hematomas or blood clots. 255 The multiple hematomas were wide, thick, and deep, 256 indicating that these could have resulted mainly from injuries sustained by the victim from fist blows, knee blows, paddles, or the like. 257 Repeated blows to those areas caused the blood to gradually ooze out of the capillaries until the circulating blood became so markedly diminished as to produce death. 258 The officer also found that the brain, liver, kidney, pancreas, intestines, and all other organs seen in the abdominals, as well as the thoracic organ in the lungs, were pale due to the lack of blood, which was redirected to the thighs and forearms. 259 It was concluded that there was nothing in the heart that would indicate that the victim suffered from a previous cardiac arrest or disease. 260 The multiple hematomas or bruises found in Lenny Villa's arms and thighs, resulting from repeated blows to those areas, caused the loss of blood from his vital organs and led to his eventual death. These hematomas must be taken in the light of the hazing activities performed on him by the Aquila Fraternity. According to the testimonies of the co-neophytes of Lenny, they were punched, kicked, elbowed, kneed, stamped on; and hit with different objects on their arms, legs, and thighs. 261 They were also "paddled" at the back of their thighs or legs; 262 and slapped on their faces. 263 They were made to play rough basketball. 264 Witness Marquez testified on Lenny, saying: "[T]inamaan daw sya sa spine." 265 The NBI medico-legal officer explained that the death of the victim was the cumulative effect of the multiple injuries suffered by the latter. 266 The relevant portion of the testimony is as follows: Atty. Tadiar Doctor, there was, rather, it was your testimony on various cross examinations of defense counsels that the injuries that you have enumerated on the body of the deceased Lenny Villa previously marked as Exhibit "G-1" to "G-14" individually by themselves would not cause the death of the victim. The question I am going to propound to you is what is the cumulative effect of all of these injuries marked from Exhibit "G-1" to "G-14"? ESIcaC

Witness All together nothing in concert to cause to the demise of the victim. So, it is not fair for us to isolate such injuries here because we are talking of the whole body. At the same manner that as a car would not run minus one (1) wheel. No, the more humane in human approach is to interpret all those injuries in whole and not in part. 267 There is also evidence to show that some of the accused fraternity members were drinking during the initiation rites. 268 Consequently, the collective acts of the fraternity members were tantamount to recklessness, which made the resulting death of Lenny a culpable felony. It must be remembered that organizations owe to their initiates a duty of care not to cause them injury in the process. 269 With the foregoing facts, we rule that the accused are guilty of reckless imprudence resulting in homicide. Since the NBI medico-legal officer found that the victim's death was the cumulative effect of the injuries suffered, criminal responsibility redounds to all those who directly participated in and contributed to the infliction of physical injuries. It appears from the aforementioned facts that the incident may have been prevented, or at least mitigated, had the alumni of Aquila Fraternity accused Dizon and Villareal restrained themselves from insisting on reopening the initiation rites. Although this point did not matter in the end, as records would show that the other fraternity members participated in the reopened initiation rites having in mind the concept of "seniority" in fraternities the implication of the presence of alumni should be seen as a point of review in future legislation. We further note that some of the fraternity members were intoxicated during Lenny's initiation rites. In this light, the Court submits to Congress, for legislative consideration, the amendment of the Anti-Hazing Law to include the fact of intoxication and the presence of non-resident or alumni fraternity members during hazing as aggravating circumstances that would increase the applicable penalties. It is truly astonishing how men would wittingly or unwittingly impose the misery of hazing and employ appalling rituals in the name of brotherhood. There must be a better way to establish "kinship." A neophyte admitted that he joined the fraternity to have more friends and to avail himself of the benefits it offered, such as tips during bar examinations. 270 Another initiate did not give up, because he feared being looked down upon as a quitter, and because he felt he did not have a choice. 271 Thus, for Lenny Villa and the other neophytes, joining the Aquila Fraternity entailed a leap in the dark. By giving consent under the circumstances, they left their fates in the hands of the fraternity members. Unfortunately, the hands to which lives were entrusted were barbaric as they were reckless. IHAcCS Our finding of criminal liability for the felony of reckless imprudence resulting in homicide shall cover only accused Tecson, Ama, Almeda, Bantug, and Dizon. Had the Anti-Hazing Law been in effect then, these five accused fraternity members would have all been convicted of the crime of hazing punishable by reclusion perpetua (life imprisonment). 272 Since there was no law prohibiting the act of hazing when Lenny died, we are constrained to rule according to existing laws at the time of his death. The CA found that the prosecution failed to prove, beyond reasonable doubt, Victorino et al.'s individual participation in the infliction of physical injuries upon Lenny Villa. 273 As to accused Villareal, his criminal liability was totally extinguished by the fact of his death, pursuant to Article 89 of the Revised Penal Code. Furthermore, our ruling herein shall be interpreted without prejudice to the applicability of the Anti-Hazing Law to subsequent cases. Furthermore, the modification of criminal liability from slight physical injuries to reckless imprudence resulting in homicide shall apply only with respect to accused Almeda, Ama, Bantug, and Tecson. The accused liable to pay damages The CA awarded damages in favor of the heirs of Lenny Villa in the amounts of P50,000 as civil indemnity ex delicto and P1,000,000 as moral damages, to be jointly and severally paid by accused Dizon and Villareal. It also awarded the amount of P30,000 as indemnity to be jointly and severally paid by accused Almeda, Ama, Bantug, and Tecson. Civil indemnity ex delicto is automatically awarded for the sole fact of death of the victim. 274 In accordance with prevailing jurisprudence, 275 we sustain the CA's award of indemnity in the amount of P50,000. The heirs of the victim are entitled to actual or compensatory damages, including expenses incurred in connection with the death of the victim, so long as the claim is supported by tangible documents. 276 Though we are prepared to award actual damages, the Court is prevented from granting them, since the records are bereft of any evidence to show that actual expenses were incurred or proven during trial. Furthermore, in the appeal, the Solicitor General does not interpose any claim for actual

damages. 277

The heirs of the deceased may recover moral damages for the grief suffered on account of the victim's death. 278 This penalty is pursuant to Article 2206 (3) of the Civil Code, which provides that the "spouse, legitimate and illegitimate descendants and the ascendants of the deceased may demand moral damages for mental anguish by reason of the death of the deceased." 279 Thus, we hereby we affirm the CA's award of moral damages in the amount of P1,000,000. HEISca WHEREFORE, the appealed Judgment in G.R. No. 155101 finding petitioner Fidelito Dizon guilty of homicide is hereby MODIFIED and SET ASIDE IN PART. The appealed Judgment in G.R. No. 154954 finding Antonio Mariano Almeda, Junel Anthony Ama, Renato Bantug, Jr., and Vincent Tecson guilty of the crime of slight physical injuries is also MODIFIED and SET ASIDE IN PART. Instead, Fidelito Dizon, Antonio Mariano Almeda, Junel Anthony Ama, Renato Bantug, Jr., and Vincent Tecson are found GUILTY beyond reasonable doubt of reckless imprudence resulting in homicide defined and penalized under Article 365 in relation to Article 249 of the Revised Penal Code. They are hereby sentenced to suffer an indeterminate prison term of four (4) months and one (1) day of arresto mayor, as minimum, to four (4) years and two (2) months of prision correccional, as maximum. In addition, accused are ORDERED jointly and severally to pay the heirs of Lenny Villa civil indemnity ex delicto in the amount of P50,000, and moral damages in the amount of P1,000,000, plus legal interest on all damages awarded at the rate of 12% from the date of the finality of this Decision until satisfaction. 280 Costs de oficio. The appealed Judgment in G.R. No. 154954, acquitting Victorino et al., is hereby AFFIRMED. The appealed Judgments in G.R. Nos. 178057 & 178080, dismissing the criminal case filed against Escalona, Ramos, Saruca, and Adriano, are likewise AFFIRMED. Finally, pursuant to Article 89 (1) of the Revised Penal Code, the Petition in G.R. No. 151258 is hereby dismissed, and the criminal case against Artemio Villareal deemed CLOSED and TERMINATED. Let copies of this Decision be furnished to the Senate President and the Speaker of the House of Representatives for possible consideration of the amendment of the Anti-Hazing Law to include the fact of intoxication and the presence of non-resident or alumni fraternity members during hazing as aggravating circumstances that would increase the applicable penalties. IHEAcC SO ORDERED.

SECOND DIVISION [G.R. No. 187521. March 14, 2012.] F.F. CRUZ & CO., INC., petitioner, vs. HR CONSTRUCTION CORP., respondent. DECISION REYES, J p: This is a petition for review on certiorari under Rule 45 of the Rules of Court filed by petitioner F.F. Cruz & Co., Inc. (FFCCI) assailing the Decision 1 dated February 6, 2009 and Resolution 2 dated April 13, 2009 issued by the Court of Appeals (CA) in CA-G.R. SP No. 91860. HDAECI The Antecedent Facts Sometime in 2004, FFCCI entered into a contract with the Department of Public Works and Highways (DPWH) for the construction of the Magsaysay Viaduct, known as the Lower Agusan Development Project. On August 9, 2004, FFCCI, in turn, entered into a Subcontract Agreement 3 with HR Construction Corporation (HRCC) for the supply of materials, labor, equipment, tools and supervision for the construction of a portion of the said project called the East Bank Levee and Cut-Off Channel in accordance with the specifications of the main contract. The subcontract price agreed upon by the parties amounted to P31,293,532.72. Pursuant to the Subcontract Agreement, HRCC would submit to FFCCI a monthly progress billing which the latter would then pay, subject to stipulated deductions, within 30 days from receipt thereof. The parties agreed that the requests of HRCC for payment should include progress accomplishment of its completed works as approved by FFCCI. Additionally, they agreed to conduct a joint measurement of the completed works of HRCC together with the representative of DPWH and consultants to arrive at a common quantity. aIcETS Thereafter, HRCC commenced the construction of the works pursuant to the Subcontract Agreement. On September 17, 2004, HRCC submitted to FFCCI its first progress billing in the amount of P2,029,081.59 covering the construction works it completed from August 16 to September 15, 2004. 4 However, FFCCI asserted that the DPWH was then able to evaluate the completed works of HRCC only until July 25, 2004. Thus, FFCCI only approved the gross amount of P423,502.88 for payment. Pursuant to the Subcontract Agreement, FFCCI deducted from the said gross amount P42,350.29 for retention and P7,700.05 for expanded withholding tax leaving a net payment in the amount of P373,452.54. This amount was paid by FFCCI to HRCC on December 3, 2004. 5 FFCCI and the DPWH then jointly evaluated the completed works of HRCC for the period of July 26 to September 25, 2004. FFCCI claimed that the gross amount due for the completed works during the said period was P2,008,837.52. From the said gross amount due, FFCCI deducted therefrom P200,883.75 for retention and P36,524.07 for expanded withholding tax leaving amount of P1,771,429.45 as the approved net payment for the said period. FFCCI paid this amount on December 21, 2004. 6 SEIaHT On October 29, 2004, HRCC submitted to FFCCI its second progress billing in the amount of P1,587,760.23 covering its completed works from September 18 to 25, 2004. 7 FFCCI did not pay the amount stated in the second progress billing, claiming that it had already paid HRCC for the completed works for the period stated therein. On even date, HRCC submitted its third progress billing in the amount of P2,569,543.57 for its completed works from September 26 to October 25, 2004. 8 FFCCI did not immediately pay the amount stated in the third progress billing, claiming that it still had to evaluate the works accomplished by HRCC. On November 25, 2004, HRCC submitted to FFCCI its fourth progress billing in the amount of P1,527,112.95 for the works it had completed from October 26 to November 25, 2004.

Subsequently, FFCCI, after it had evaluated the completed works of HRCC from September 26 to November 25, 2004, approved the payment of the gross amount of P1,505,570.99 to HRCC. FFCCI deducted therefrom P150,557.10 for retention and P27,374.02 for expanded withholding tax leaving a net payment of P1,327,639.87, which amount was paid to HRCC on March 11, 2005. 9 SCIcTD Meanwhile, HRCC sent FFCCI a letter 10 dated December 13, 2004 demanding the payment of its progress billings in the total amount of P7,340,046.09, plus interests, within three days from receipt thereof. Subsequently, HRCC completely halted the construction of the subcontracted project after taking its Christmas break on December 18, 2004. On March 7, 2005, HRCC, pursuant to the arbitration clause in the Subcontract Agreement, filed with the Construction Industry Arbitration Commission (CIAC) a Complaint 11 against FFCCI praying for the payment of the following: (1) overdue obligation in the reduced amount of P4,096,656.53 as of December 15, 2004 plus legal interest; (2) P1,500,000.00 as attorney's fees; (3) P80,000.00 as acceptance fee and representation expenses; and (4) costs of litigation. In its Answer, 12 FFCCI claimed that it no longer has any liability on the Subcontract Agreement as the three payments it made to HRCC, which amounted to P3,472,521.86, already represented the amount due to the latter in view of the works actually completed by HRCC as shown by the survey it conducted jointly with the DPWH. FFCCI further asserted that the delay in the payment processing was primarily attributable to HRCC inasmuch as it presented unverified work accomplishments contrary to the stipulation in the Subcontract Agreement regarding requests for payment. HCEISc Likewise, FFCCI maintained that HRCC failed to comply with the condition stated under the Subcontract Agreement for the payment of the latter's progress billings, i.e., joint measurement of the completed works, and, hence, it was justified in not paying the amount stated in HRCC's progress billings. On June 16, 2005, an Arbitral Tribunal was created composed of Engineer Ricardo B. San Juan, Joven B. Joaquin and Attorney Alfredo F. Tadiar, with the latter being appointed as the Chairman. In a Preliminary Conference held on July 5, 2005, the parties defined the issues to be resolved in the proceedings before the CIAC as follows: 1. What is the correct amount of [HRCC's] unpaid progress billing?

2. Did [HRCC] comply with the conditions set forth in subparagraph 4.3 of the Subcontract Agreement for the submission, evaluation/processing and release of payment of its progress billings? 3. 3.1 Did [HRCC] stop work on the project? TSacID If so, is the work stoppage justified?

3.2 If so, what was the percentage and value of [HRCC's] work accomplishment at the time it stopped work on the project? 4. 13 Who between the parties should bear the cost of arbitration or in what proportion should it be shared by the parties?

Likewise, during the said Preliminary Conference, HRCC further reduced the amount of overdue obligation it claimed from FFCCI to P2,768,916.66. During the course of the proceedings before the CIAC, HRCC further reduced the said amount to P2,635,397.77 the exact difference between the total amount of HRCC's progress billings (P6,107,919.63) and FFCCI's total payments in favor of the latter (P3,472,521.86). The CIAC Decision On September 6, 2005, after due proceedings, the CIAC rendered a Decision 14 in favor of HRCC, the decretal portion of which reads: WHEREFORE, judgment is hereby rendered in favor of the Claimant HR CONSTRUCTION CORPORATION and AWARD made on its monetary claim against Respondent F.F. CRUZ & CO., INC., as follows: HSIDTE

[P]2,239,452.63 as the balance of its unpaid billings and 101,161.57 as reimbursement of the arbitration costs.

[P]2,340,614.20 Total due the Claimant Interest on the foregoing amount [P]2,239,452.63 shall be paid at the rate of 6% per annum from the date of this Decision. After finality of this Decision, interest at the rate of 12% per annum shall be paid thereon until full payment of the awarded amount shall have been made . . . . SO ORDERED. 15 The CIAC held that the payment method adopted by FFCCI is actually what is known as the "back-to-back payment scheme" which was not agreed upon under the Subcontract Agreement. As such, the CIAC ruled that FFCCI could not impose upon HRCC its valuation of the works completed by the latter. The CIAC gave credence to HRCC's valuation of its completed works as stated in its progress billings. Thus: During the trial, [FFCCI's] Aganon admitted that [HRCC's] accomplishments are included in its own billings to the DPWH together with a substantial mark-up to cover overhead costs and profit. He further admitted that it is only when DPWH approves its (Respondent's) billings covering [HRCC's] scope of work and pays for them, that [FFCCI] will in turn pay [HRCC] for its billings on the sub-contracted works. HcACTE On clarificatory questioning by the Tribunal, [FFCCI] admitted that there is no "back-to-back" provision in the sub-contract as basis for this sequential payment arrangement and, therefore, [FFCCI's] imposition thereof by withholding payment to [HRCC] until it is first paid by the project owner on the Main Contract, clearly violates said sub-contract. It [is] this unauthorized implementation of a back-to-back payment scheme that is seen to be the reason for [FFCCI's] non-payment of the third progress billings. It is accordingly the holding of this Arbitral Tribunal that [FFCCI] is not justified in withholding payment of [HRCC's] third progress billing for this scheme that [HRCC] has not agreed to in the sub-contract agreement . . . . xxx xxx xxx

The total retention money deducted by [FFCCI] from [HRCC's] three progress billings, amounts to [P]395,945.14 . . . . The retention money is part of [HRCC's] progress billings and must, therefore, be credited to this account. The two amounts (deductions and net payments) total [P]3,868,467.00 . . . . This represents the total gross payments that should be credited and deducted from the total gross billings to arrive at what has not been paid to the [HRCC]. This results in the amount of [P]2,239,452.63 ([P]6,107,919.63 - [P]3,868,467.00) as the correct balance of [HRCC's] unpaid billings. 16 CHIaTc Further, the CIAC ruled that FFCCI had already waived its right under the Subcontract Agreement to require a joint measurement of HRCC's completed works as a condition precedent to the payment of the latter's progress billings. Hence: [FFCCI] admits that in all three instances where it paid [HRCC] for its progress billings, it never required compliance with the aforequoted contractual provision of a prior joint quantification. Such repeated omission may reasonably be construed as a waiver by [FFCCI] of its contractual right to require compliance of said condition and it is now too late in the day to so impose it. Article 6 of the Civil Code expressly provides that "rights may be waived unless the waiver is contrary to law, public order, public policy, morals or good customs". The tribunal cannot see any such violation in this case. xxx xxx xxx

[FFCCI's] omission to enforce the contractually required condition of payment, has led [HRCC] to believe it to be true that indeed [FFCCI] has waived the condition of joint quantification and, therefore, [FFCCI] may not be permitted to falsify such resulting position. 17 Likewise, the CIAC held that FFCCI's non-payment of the progress billings submitted by HRCC gave the latter the right to rescind the Subcontract Agreement and, accordingly, HRCC's work stoppage was justified. It further opined that, in effect,

FFCCI had ratified the right of HRCC to stop the construction works as it did not file any counterclaim against HRCC for liquidated damages arising therefrom. AHDacC FFCCI then filed a petition for review with CA assailing the foregoing disposition by the CIAC. The CA Decision On February 6, 2009, the CA rendered the herein assailed Decision 18 denying the petition for review filed by FFCCI. The CA agreed with the CIAC that FFCCI had waived its right under the Subcontract Agreement to require a joint quantification of HRCC's completed works. The CA further held that the amount due to HRCC as claimed by FFCCI could not be given credence since the same was based on a survey of the completed works conducted without the participation of HRCC. Likewise, being the main contractor, it ruled that it was the responsibility of FFCCI to include HRCC in the joint measurement of the completed works. Furthermore, the CA held that HRCC was justified in stopping its construction works on the project as the failure of FFCCI to pay its progress billings gave the former the right to rescind the Subcontract Agreement. FFCCI sought a reconsideration 19 of the said February 6, 2009 Decision but it was denied by the CA in its Resolution 20 dated April 13, 2009. Issues In the instant petition, FFCCI submits the following issues for this Court's resolution: TaSEHC [I.] . . . First, [d]oes the act of [FFCCI] in conducting a verification survey of [HRCC's] billings in the latter's presence amount to a waiver of the right of [FFCCI] to verify and approve said billings? What, if any, is the legal significance of said act? [II.] . . . Second, [d]oes the payment of [FFCCI] to [HRCC] based on the results of the above mentioned verification survey result in the former being obliged to accept whatever accomplishment was reported by the latter? [III.] . . . Third, [d]oes the mere comparison of the payments made by [FFCCI] with the contested progress billings of [HRCC] amount to an adjudication of the controversy between the parties? cADTSH [IV.] . . . Fourth, [d]oes the failure of [FFCCI] to interpose a counterclaim against [HRCC] for liquidated damages due to the latter's work stoppage, amount to a ratification of such work stoppage? [V.] . . . Fifth, [d]id the [CA] disregard or overlook significant and material facts which would affect the result of the litigation? 21 In sum, the crucial issues for this Court's resolution are: first, what is the effect of FFCCI's non-compliance with the stipulation in the Subcontract Agreement requiring a joint quantification of the works completed by HRCC on the payment of the progress billings submitted by the latter; and second, whether there was a valid rescission of the Subcontract Agreement by HRCC. The Court's Ruling The petition is not meritorious. Procedural Issue:

Finality and Conclusiveness of the CIAC's Factual Findings Before we delve into the substantial issues raised by FFCCI, we shall first address the procedural issue raised by HRCC. According to HRCC, the instant petition merely assails the factual findings of the CIAC as affirmed by the CA and, accordingly, not proper subjects of an appeal under Rule 45 of the Rules of Court. It likewise pointed out that factual findings of the CIAC, when affirmed by the CA, are final and conclusive upon this Court. cSCADE Generally, the arbitral award of CIAC is final and may not be appealed except on questions of law. Executive Order (E.O.) No. 1008 22 vests upon the CIAC original and exclusive jurisdiction over disputes arising from, or connected with, contracts entered into by parties involved in construction in the Philippines. Under Section 19 of E.O. No. 1008, the arbitral award of CIAC "shall be final and inappealable except on questions of law which shall be appealable to the Supreme Court." 23 In Hi-Precision Steel Center, Inc. v. Lim Kim Steel Builders, Inc., 24 we explained raison d' etre for the rule on finality of the CIAC's arbitral award in this wise: Voluntary arbitration involves the reference of a dispute to an impartial body, the members of which are chosen by the parties themselves, which parties freely consent in advance to abide by the arbitral award issued after proceedings where both parties had the opportunity to be heard. The basic objective is to provide a speedy and inexpensive method of settling disputes by allowing the parties to avoid the formalities, delay, expense and aggravation which commonly accompany ordinary litigation, especially litigation which goes through the entire hierarchy of courts. Executive Order No. 1008 created an arbitration facility to which the construction industry in the Philippines can have recourse. The Executive Order was enacted to encourage the early and expeditious settlement of disputes in the construction industry, a public policy the implementation of which is necessary and important for the realization of national development goals. TSacID Aware of the objective of voluntary arbitration in the labor field, in the construction industry, and in any other area for that matter, the Court will not assist one or the other or even both parties in any effort to subvert or defeat that objective for their private purposes. The Court will not review the factual findings of an arbitral tribunal upon the artful allegation that such body had "misapprehended the facts" and will not pass upon issues which are, at bottom, issues of fact, no matter how cleverly disguised they might be as "legal questions." The parties here had recourse to arbitration and chose the arbitrators themselves; they must have had confidence in such arbitrators. . . . 25 (Citation omitted) Thus, in cases assailing the arbitral award rendered by the CIAC, this Court may only pass upon questions of law. Factual findings of construction arbitrators are final and conclusive and not reviewable by this Court on appeal. This rule, however, admits of certain exceptions. In Spouses David v. Construction Industry and Arbitration Commission, 26 we laid down the instances when this Court may pass upon the factual findings of the CIAC, thus: We reiterate the rule that factual findings of construction arbitrators are final and conclusive and not reviewable by this Court on appeal, except when the petitioner proves affirmatively that: (1) the award was procured by corruption, fraud or other undue means; (2) there was evident partiality or corruption of the arbitrators or of any of them; (3) the arbitrators were guilty of misconduct in refusing to postpone the hearing upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; (4) one or more of the arbitrators were disqualified to act as such under section nine of Republic Act No. 876 and willfully refrained from disclosing such disqualifications or of any other misbehavior by which the rights of any party have been materially prejudiced; or (5) the arbitrators exceeded their powers, or so imperfectly executed them, that a mutual, final and definite award upon the subject matter submitted to them was not made. . . . 27 (Citation omitted) acIHDA

Issues on the proper interpretation of the terms of the Subcontract Agreement involve questions of law. A question of law arises when there is doubt as to what the law is on a certain state of facts, while there is a question of fact when the doubt arises as to the truth or falsity of the alleged facts. For a question to be one of law, the same must not involve an examination of the probative value of the evidence presented by the litigants or any of them. The resolution of the issue must rest solely on what the law provides on the given set of circumstances. Once it is clear that the issue invites a review of the evidence presented, the question posed is one of fact. 28 On the surface, the instant petition appears to merely raise factual questions as it mainly puts in issue the appropriate amount that is due to HRCC. However, a more thorough analysis of the issues raised by FFCCI would show that it actually asserts questions of law. FFCCI primarily seeks from this Court a determination of whether amount claimed by HRCC in its progress billing may be enforced against it in the absence of a joint measurement of the former's completed works. Otherwise stated, the main question advanced by FFCCI is this: in the absence of the joint measurement agreed upon in the Subcontract Agreement, how will the completed works of HRCC be verified and the amount due thereon be computed? The determination of the foregoing question entails an interpretation of the terms of the Subcontract Agreement vis--vis the respective rights of the parties herein. On this point, it should be stressed that where an interpretation of the true agreement between the parties is involved in an appeal, the appeal is in effect an inquiry of the law between the parties, its interpretation necessarily involves a question of law. 29 SEIaHT Moreover, we are not called upon to examine the probative value of the evidence presented before the CIAC. Rather, what is actually sought from this Court is an interpretation of the terms of the Subcontract Agreement as it relates to the dispute between the parties. First Substantive Issue: Effect of Non-compliance with the Joint Quantification Requirement on the Progress Billings of HRCC Basically, the instant issue calls for a determination as to which of the parties' respective valuation of accomplished works should be given credence. FFCCI claims that its valuation should be upheld since the same was the result of a measurement of the completed works conducted by it and the DPWH. On the other hand, HRCC maintains that its valuation should be upheld on account of FFCCI's failure to observe the joint measurement requirement in ascertaining the extent of its completed works. The terms of the Subcontract Agreement should prevail. In resolving the dispute as to the proper valuation of the works accomplished by HRCC, the primordial consideration should be the terms of the Subcontract Agreement. It is basic that if the terms of a contract are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulations shall control. 30 In Abad v. Goldloop Properties, Inc., 31 we stressed that: A court's purpose in examining a contract is to interpret the intent of the contracting parties, as objectively manifested by them. The process of interpreting a contract requires the court to make a preliminary inquiry as to whether the contract before it is ambiguous. A contract provision is ambiguous if it is susceptible of two reasonable alternative interpretations. Where the written terms of the contract are not ambiguous and can only be read one way, the court will interpret the contract as a matter of law. If the contract is determined to be ambiguous, then the interpretation of the contract is left to the court, to resolve the ambiguity in the light of the intrinsic evidence. 32 (Emphasis supplied and citation omitted) IDaEHC Article 4 of the Subcontract Agreement, in part, contained the following stipulations:

ARTICLE 4 SUBCONTRACT PRICE 4.1 The total SUBCONTRACT Price shall be THIRTY ONE MILLION TWO HUNDRED NINETY THREE THOUSAND FIVE HUNDRED THIRTY TWO PESOS & 72/100 ONLY ([P]31,293,532.72) inclusive of Value Added Tax . . . . xxx 4.3 xxx Terms of Payment xxx

FFCCI shall pay [HRCC] within thirty (30) days upon receipt of the [HRCC's] Monthly Progress Billings subject to deductions due to ten percent (10%) retention, and any other sums that may be due and recoverable by FFCCI from [HRCC] under this SUBCONTRACT. In all cases, however, two percent (2%) expanded withholding tax on the [HRCC's] income will be deducted from the monthly payments. CacEIS Requests for the payment by the [HRCC] shall include progress accomplishment of completed works (unit of work accomplished x unit cost) as approved by [FFCCI]. Cut-off date of monthly billings shall be every 25th of the month and joint measurement shall be conducted with the DPWH's representative, Consultants, FFCCI and [HRCC] to arrive at a common/agreed quantity. 33 (Emphasis supplied) Pursuant to the terms of payment agreed upon by the parties, FFCCI obliged itself to pay the monthly progress billings of HRCC within 30 days from receipt of the same. Additionally, the monthly progress billings of HRCC should indicate the extent of the works completed by it, the same being essential to the valuation of the amount that FFCCI would pay to HRCC. The parties further agreed that the extent of HRCC's completed works that would be indicated in the monthly progress billings should be determined through a joint measurement conducted by FFCCI and HRCC together with the representative of DPWH and the consultants. It is the responsibility of FFCCI to call for the joint measurement of HRCC's completed works. It bears stressing that the joint measurement contemplated under the Subcontract Agreement should be conducted by the parties herein together with the representative of the DPWH and the consultants. Indubitably, FFCCI, being the main contractor of DPWH, has the responsibility to request the representative of DPWH to conduct the said joint measurement. HDTCSI On this score, the testimony of Engineer Antonio M. Aganon, Jr., project manager of FFCCI, during the reception of evidence before the CIAC is telling, thus: MR. J. B. JOAQUIN: Engr. Aganon, earlier there was a stipulation that in all the four billings, there never was a joint quantification. PROF. A. F. TADIAR: He admitted that earlier. Pinabasa ko sa kanya. HaAIES ENGR. R. B. SAN JUAN: The joint quantification was done only between them and DPWH. xxx xxx xxx

ENGR. AGANON:

Puwede ko po bang i-explain sandali lang po regarding lang po doon sa quantification na iyon? Basically po as main contractor of DPWH, we are the ones who [are] requesting for joint survey quantification with the owner, DPWH. Ngayon po, although wala sa papel na nag-witness and [HRCC] still the same po, nandoon din po sila during that time, kaya lang ho . . . MR. J. B. JOAQUIN: Hindi pumirma? ENGR. AGANON: Hindi sila puwede pumirma kasi ho kami po ang contractor ng DPWH hindi sila. 34 (Emphasis supplied) cHEATI FFCCI had waived its right to demand for a joint measurement of HRCC's completed works under the Subcontract Agreement. The CIAC held that FFCCI, on account of its failure to demand the joint measurement of HRCC's completed works, had effectively waived its right to ask for the conduct of the same as a condition sine qua non to HRCC's submission of its monthly progress billings. We agree. In People of the Philippines v. Donato, 35 this Court explained the doctrine of waiver in this wise: Waiver is defined as "a voluntary and intentional relinquishment or abandonment of a known existing legal right, advantage, benefit, claim or privilege, which except for such waiver the party would have enjoyed; the voluntary abandonment or surrender, by a capable person, of a right known by him to exist, with the intent that such right shall be surrendered and such person forever deprived of its benefit; or such conduct as warrants an inference of the relinquishment of such right; or the intentional doing of an act inconsistent with claiming it." CEcaTH As to what rights and privileges may be waived, the authority is settled: . . . the doctrine of waiver extends to rights and privileges of any character, and, since the word 'waiver' covers every conceivable right, it is the general rule that a person may waive any matter which affects his property, and any alienable right or privilege of which he is the owner or which belongs to him or to which he is legally entitled, whether secured by contract, conferred with statute, or guaranteed by constitution, provided such rights and privileges rest in the individual, are intended for his sole benefit, do not infringe on the rights of others, and further provided the waiver of the right or privilege is not forbidden by law, and does not contravene public policy; and the principle is recognized that everyone has a right to waive, and agree to waive, the advantage of a law or rule made solely for the benefit and protection of the individual in his private capacity, if it can be dispensed with and relinquished without infringing on any public right, and without detriment to the community at large. . . . 36 (Emphasis supplied and citations omitted) Here, it is undisputed that the joint measurement of HRCC's completed works contemplated by the parties in the Subcontract Agreement never materialized. Indeed, HRCC, on separate occasions, submitted its monthly progress billings indicating the extent of the works it had completed sans prior joint measurement. Thus: THCSEA Progress Billing Period Covered Amount 1st Progress Billing dated August 16 to September 15, 2004 P2,029,081.59 September 17, 2004 37 2nd Progress Billing dated September 18 to 25, 2004 P1,587,760.23

October 29, 2004 38 3rd Progress Billing dated September 26 to October 25, 2004 P2,569,543.57 October 29, 2004 39 4th Progress Billing dated October 26 to November 25, 2004 P1,527,112.95 November 25, 2004 FFCCI did not contest the said progress billings submitted by HRCC despite the lack of a joint measurement of the latter's completed works as required under the Subcontract Agreement. Instead, FFCCI proceeded to conduct its own verification of the works actually completed by HRCC and, on separate dates, made the following payments to HRCC: Date of Payment Period Covered Amount December 3, 2004 40 December 21, 2004 41 March 11, 2005 42 April 2 to July 25, 2004 P373,452.24 P1,771,429.45 P1,327,639.87

July 26 to September 25, 2004

September 26 to November 25, 2004

FFCCI's voluntary payment in favor of HRCC, albeit in amounts substantially different from those claimed by the latter, is a glaring indication that it had effectively waived its right to demand for the joint measurement of the completed works. FFCCI's failure to demand a joint measurement of HRCC's completed works reasonably justified the inference that it had already relinquished its right to do so. Indeed, not once did FFCCI insist on the conduct of a joint measurement to verify the extent of HRCC's completed works despite its receipt of the four monthly progress billings submitted by the latter. FFCCI is already barred from contesting HRCC's valuation of the completed works having waived its right to demand the joint measurement requirement. In view of FFCCI's waiver of the joint measurement requirement, the CA, essentially echoing the CIAC's disposition, found that FFCCI is obliged to pay the amount claimed by HRCC in its monthly progress billings. The CA reasoned thus: DCTHaS Verily, the joint measurement that [FFCCI] claims it conducted without the participation of [HRCC], to which [FFCCI] anchors its claim of full payment of its obligations to [HRCC], cannot be applied, nor imposed, on [HRCC]. In other words, [HRCC] cannot be made to accept a quantification of its works when the said quantification was made without its participation. As a consequence, [FFCCI's] claim of full payment cannot be upheld as this is a result of a quantification that was made contrary to the express provisions of the Subcontract Agreement. The Court is aware that by ruling so, [FFCCI] would seem to be placed at a disadvantage because it would result in [FFCCI] having to pay exactly what [HRCC] was billing the former. If, on the other hand, the Court were to rule otherwise[,] then [HRCC] would be the one at a disadvantage because it would be made to accept payment that is less than what it was billing. TaCDAH Circumstances considered, however, the Court deems it proper to rule in favor of [HRCC] because of the explicit provision of the Subcontract Agreement that requires the participation of the latter in the joint measurement. If the Court were to rule otherwise, then the Court would, in effect, be disregarding the explicit agreement of the parties in their contract. 43 Essentially, the question that should be resolved is this: In view of FFCCI's waiver of its right to demand a joint measurement of HRCC's completed works, is FFCCI now barred from disputing the claim of HRCC in its monthly progress billings?

We rule in the affirmative. As intimated earlier, the joint measurement requirement is a mechanism essentially granting FFCCI the opportunity to verify and, if necessary, contest HRCC's valuation of its completed works prior to the submission of the latter's monthly progress billings. In the final analysis, the joint measurement requirement seeks to limit the dispute between the parties with regard to the valuation of HRCC's completed works. Accordingly, any issue which FFCCI may have with regard to HRCC's valuation of the works it had completed should be raised and resolved during the said joint measurement instead of raising the same after HRCC had submitted its monthly progress billings. Thus, having relinquished its right to ask for a joint measurement of HRCC's completed works, FFCCI had necessarily waived its right to dispute HRCC's valuation of the works it had accomplished. DHEACI Second Substantive Issue: Validity of HRCC's Rescission of the Subcontract Agreement Both the CA and the CIAC held that the work stoppage of HRCC was justified as the same is but an exercise of its right to rescind the Subcontract Agreement in view of FFCCI's failure to pay the former's monthly progress billings. Further, the CIAC stated that FFCCI could no longer assail the work stoppage of HRCC as it failed to file any counterclaim against HRCC pursuant to the terms of the Subcontract Agreement. For its part, FFCCI asserted that the work stoppage of HRCC was not justified and, in any case, its failure to raise a counterclaim against HRCC for liquidated damages before the CIAC does not amount to a ratification of the latter's work stoppage. The determination of the validity of HRCC's work stoppage depends on a determination of the following: first, whether HRCC has the right to extrajudicially rescind the Subcontract Agreement; and second, whether FFCCI is already barred from disputing the work stoppage of HRCC. EcDATH HRCC had waived its right to rescind the Subcontract Agreement. The right of rescission is statutorily recognized in reciprocal obligations. Article 1191 of the Civil Code pertinently reads: Art. 1191. The power to rescind obligations is implied in reciprocal ones, in case one of the obligors should not comply with what is incumbent upon him. The injured party may choose between the fulfillment and the rescission of the obligation, with the payment of damages in either case. He may also seek rescission, even after he has chosen fulfillment, if the latter should become impossible. The court shall decree the rescission claimed, unless there be just cause authorizing the fixing of a period. This is understood to be without prejudice to the rights of third persons who have acquired the thing, in accordance with Articles 1385 and 1388 and the Mortgage Law. ECAaTS The rescission referred to in this article, more appropriately referred to as resolution is on the breach of faith by the defendant which is violative of the reciprocity between the parties. 44 The right to rescind, however, may be waived, expressly or impliedly. 45 While the right to rescind reciprocal obligations is implied, that is, that such right need not be expressly provided in the contract, nevertheless the contracting parties may waive the same. 46

Contrary to the respective dispositions of the CIAC and the CA, we find that HRCC had no right to rescind the Subcontract Agreement in the guise of a work stoppage, the latter having waived such right. Apropos is Article 11.2 of the Subcontract Agreement, which reads: 11.2 Effects of Disputes and Continuing Obligations

Notwithstanding any dispute, controversy, differences or arbitration proceedings relating directly or indirectly to this SUBCONTRACT Agreement and without prejudice to the eventual outcome thereof, [HRCC] shall at all times proceed with the prompt performance of the Works in accordance with the directives of FFCCI and this SUBCONTRACT Agreement. 47 (Emphasis supplied) DaCEIc Hence, in spite of the existence of dispute or controversy between the parties during the course of the Subcontract Agreement, HRCC had agreed to continue the performance of its obligations pursuant to the Subcontract Agreement. In view of the provision of the Subcontract Agreement quoted above, HRCC is deemed to have effectively waived its right to effect extrajudicial rescission of its contract with FFCCI. Accordingly, HRCC, in the guise of rescinding the Subcontract Agreement, was not justified in implementing a work stoppage. The costs of arbitration should be shared by the parties equally. Section 1, Rule 142 of the Rules of Court provides: Section 1. Costs ordinarily follow results of suit. Unless otherwise provided in these rules, costs shall be allowed to the prevailing party as a matter of course, but the court shall have power, for special reasons, to adjudge that either party shall pay the costs of an action, or that the same be divided, as may be equitable. No costs shall be allowed against the Republic of the Philippines unless otherwise provided by law. (Emphasis supplied) DEcITS Although, generally, costs are adjudged against the losing party, courts nevertheless have discretion, for special reasons, to decree otherwise. Here, considering that the work stoppage of HRCC is not justified, it is only fitting that both parties should share in the burden of the cost of arbitration equally. HRCC had a valid reason to institute the complaint against FFCCI in view of the latter's failure to pay the full amount of its monthly progress billings. However, we disagree with the CIAC and the CA that only FFCCI should shoulder the arbitration costs. The arbitration costs should be shared equally by FFCCI and HRCC in view of the latter's unjustified work stoppage. WHEREFORE, in consideration of the foregoing disquisitions, the Decision dated February 6, 2009 and Resolution dated April 13, 2009 of the Court of Appeals in CA-G.R. SP No. 91860 are hereby AFFIRMED with MODIFICATION that the arbitration costs shall be shared equally by the parties herein. cSEAHa SO ORDERED.

THIRD DIVISION [G.R. No. 154598. August 16, 2004.] IN THE MATTER OF APPLICATION FOR THE ISSUANCE OF A WRIT OF HABEAS CORPUS RICHARD BRIAN THORNTON for and in behalf of the minor child SEQUEIRA JENNIFER DELLE FRANCISCO THORNTON, petitioner, vs. ADELFA FRANCISCO THORNTON, respondent. Urbano Palamos & Fabros for petitioner. SYNOPSIS Petitioner herein is an American married to a Filipina. Their union produced a baby girl. After three years of marriage, the Filipina wife became restless and irresponsible. Petitioner admonished her but she continued her carefree ways until she left home with her daughter without notifying her husband. Petitioner filed a petition for habeas corpus in the designated Family Court in Makati, but this was dismissed, presumably because of the allegation that the child was in Basilan, the place where the wife claimed she would bring the baby. Petitioner then filed another petition for habeas corpus, this time with the Court of Appeals (CA) which could issue a writ of habeas corpus enforceable in the entire country. The CA denied the petition on the ground that it did not have jurisdiction over the case. It ruled that The Family Courts Act of 1997 (RA 8369) gave family courts exclusive original jurisdiction over petitions for habeas corpus. It impliedly repealed RA 7902 (An Act Expanding the Jurisdiction of the Court of Appeals) and Batas Pambansa 129 (The Judiciary Reorganization Act of 1980). The only issue for resolution in this case, therefore, is whether the Court of Appeals has jurisdiction to issue writs of habeas corpus in cases involving custody of minors.

The Supreme Court granted the petition. According to the Court, the CA should take cognizance of the case since the provisions of RA 8369 reveal no manifest intent to revoke the jurisdiction of the Court of Appeals and the Supreme Court to issue writs of habeas corpus relating to the custody of minors. RA 8369 must be read in harmony with RA 7092 and BP 129 that family courts have concurrent jurisdiction with the Court of Appeals and the Supreme Court in petitions for habeas corpus where the custody of minors is at issue. HEacAS SYLLABUS 1. REMEDIAL LAW; FAMILY COURT; DOES NOT DIVEST THE SUPREME COURT AND COURT OF APPEALS OF THEIR JURISDICTION OVER HABEAS CORPUS CASES INVOLVING CUSTODY OF MINORS; RATIONALE. As observed by the Solicitor General: Under the Family Courts Act of 1997, the avowed policy of the State is to "protect the rights and promote the welfare of children". The creation of the Family Court is geared towards addressing three major issues regarding children's welfare cases, as expressed by the legislators during the deliberations for the law. The legislative intent behind giving Family Courts exclusive and original jurisdiction over such cases was to avoid further clogging of regular court dockets, ensure greater sensitivity and specialization in view of the nature of the case and the parties, as well as to guarantee that the privacy of the children party to the case remains protected. The primordial consideration is the welfare and best interests of the child. We rule therefore that RA 8369 did not divest the Court of Appeals and the Supreme Court of their jurisdiction over habeas corpus cases involving the custody of minors. Again, to quote the Solicitor General: To allow the Court of Appeals to exercise jurisdiction over the petition for habeas corpus involving a minor child whose whereabouts are uncertain and transient will not result in one of the situations that the legislature seeks to avoid. First, the welfare of the child is paramount. Second, the ex parte nature of habeas corpus proceedings will not result in disruption of the child's privacy and emotional well-being; whereas to deprive the appellate court of jurisdiction will result in the evil sought to be avoided by the legislature: the child's welfare and well being will be prejudiced. 2. CIVIL LAW; STATUTE; AS A RULE WHAT IS CONTROLLING IS THE SPIRIT AND INTENT, NOT THE LETTER, OF THE LAW; APPLICATION IN CASE AT BAR. It also applied the well-established rule that what is controlling is the spirit and intent, not the letter, of the law: "Idolatrous reverence" for the law sacrifices the human being. The spirit of the law insures man's survival and ennobles him. In the words of Shakespeare, "the letter of the law killeth; its spirit giveth life". . . . It is therefore patent that giving effect to the social justice guarantees of the Constitution, as implemented by the provisions of the New Civil Code, is not an exercise of the power of law-making, but is rendering obedience to the mandates of the fundamental law and the implementing legislation aforementioned. Language is rarely so free from ambiguity as to be incapable of being

used in more than one sense. Sometimes, what the legislature actually had in mind is not accurately reflected in the language of a statute, and its literal interpretation may render it meaningless, lead to absurdity, injustice or contradiction. In the case at bar, a literal interpretation of the word "exclusive" will result in grave injustice and negate the policy "to protect the rights and promote the welfare of children" under the Constitution and the United Nations Convention on the Rights of the Child. This mandate must prevail over legal technicalities and serve as the guiding principle in construing the provisions of RA 8369. acHDTE 3. ID.; ID.; STATUTORY CONSTRUCTION; IMPLIED REPEALS ARE NOT FAVORED. Settled is the rule in statutory construction that implied repeals are not favored: The two laws must be absolutely incompatible, and a clear finding thereof must surface, before the inference of implied repeal may be drawn. The rule is expressed in the maxim, interpretare et concordare leqibus est optimus interpretendi, i.e., every statute must be so interpreted and brought into accord with other laws as to form a uniform system of jurisprudence. The fundament is that the legislature should be presumed to have known the existing laws on the subject and not have enacted conflicting statutes. Hence, all doubts must be resolved against any implied repeal, and all efforts should be exerted in order to harmonize and give effect to all laws on the subject." 4. REMEDIAL LAW; SPECIAL PROCEEDINGS; HABEAS CORPUS; CONCURRENT JURISDICTION OF THE COURT OF APPEALS AND SUPREME COURT WITH THE FAMILY COURTS IN HABEAS CORPUS CASES WHERE CUSTODY OF MINORS IS CONCERNED, JUSTIFIED. The provisions of RA 8369 reveal no manifest intent to revoke the jurisdiction of the Court of Appeals and Supreme Court to issue writs of habeas corpus relating to the custody of minors. Further, it cannot be said that the provisions of RA 8369, RA 7092 and BP 129 are absolutely incompatible since RA 8369 does not prohibit the Court of Appeals and the Supreme Court from issuing writs of habeas corpus in cases involving the custody of minors. Thus, the provisions of RA 8369 must be read in harmony with RA 7029 and BP 129 that family courts have concurrent jurisdiction with the Court of Appeals and the Supreme Court in petitions for habeas corpus where the custody of minors is at issue. In any case, whatever uncertainty there was has been settled with the adoption of A.M. No. 03-03-04-SC Re: Rule on Custody of Minors and Writ of Habeas Corpus in Relation to Custody of Minors. Section 20 of the rule provides that: Section 20. Petition for writ of habeas corpus. A verified petition for a writ of habeas corpus involving custody of minors shall be filed with the Family Court. The writ shall be enforceable within its judicial region to which the Family Court belongs. . . . The petition may likewise be filed with the Supreme Court, Court of Appeals, or with any of its members and, if so granted, the writ shall be enforceable anywhere in the Philippines. The writ may be made returnable to a Family Court or to any regular court within the region where the petitioner resides or where the minor may be found for hearing and decision on the merits. From the foregoing, there is no doubt that the Court of Appeals and Supreme Court have concurrent jurisdiction with family courts in habeas corpus cases where the custody of minors is involved. SHTcDE DECISION CORONA, J p: This is a petition to review, under Rule 45 of the Rules of Court, the July 5, 2002 resolution 1 of the Court of Appeals, Sixteenth Division, in CA G.R. SP No. 70501 dismissing the petition for habeas corpus on the grounds of lack of jurisdiction and lack of substance. The dispositive portion 2 read: WHEREFORE, the Court DISMISSES the petition for habeas corpus on the grounds that: a) this Court has no jurisdiction over the subject matter of the petition; and b) the petition is not sufficient in substance. acSECT Petitioner, an American, and respondent, a Filipino, were married on August 28, 1998 in the Catholic Evangelical Church at United Nations Avenue, Manila. A year later, respondent gave birth to a baby girl whom they named Sequeira Jennifer Delle Francisco Thornton. However, after three years, respondent grew restless and bored as a plain housewife. She wanted to return to her old job as a "guest relations officer" in a nightclub, with the freedom to go out with her friends. In fact, whenever petitioner was out of the country, respondent was also often out with her friends, leaving her daughter in the care of the househelp. Petitioner admonished respondent about her irresponsibility but she continued her carefree ways. On December 7, 2001, respondent left the family home with her daughter Sequiera without notifying her husband. She told the servants that she was bringing Sequiera to Purok Marikit, Sta. Clara, Lamitan, Basilan Province.

Petitioner filed a petition for habeas corpus in the designated Family Court in Makati City but this was dismissed, presumably because of the allegation that the child was in Basilan. Petitioner then went to Basilan to ascertain the whereabouts of respondent and their daughter. However, he did not find them there and the barangay office of Sta. Clara, Lamitan, Basilan, issued a certification 3 that respondent was no longer residing there. IEaHSD Petitioner gave up his search when he got hold of respondent's cellular phone bills showing calls from different places such as Cavite, Nueva Ecija, Metro Manila and other provinces. Petitioner then filed another petition for habeas corpus, this time in the Court of Appeals which could issue a writ of habeas corpus enforceable in the entire country. However, the petition was denied by the Court of Appeals on the ground that it did not have jurisdiction over the case. It ruled that since RA 8369 (The Family Courts Act of 1997) gave family courts exclusive original jurisdiction over petitions for habeas corpus, it impliedly repealed RA 7902 (An Act Expanding the Jurisdiction of the Court of Appeals) and Batas Pambansa 129 (The Judiciary Reorganization Act of 1980): ECaScD Under Sec. 9(1), BP 129 (1981) the Intermediate Appellate Court (now Court of Appeals) has jurisdiction to issue a writ of habeas corpus whether or not in aid of its appellate jurisdiction. This conferment of jurisdiction was re-stated in Sec. 1, RA 7902 (1995), an act expanding the jurisdiction of this Court. This jurisdiction finds its procedural expression in Sec. 1, Rule 102 of the Rules of Court. In 1997, RA 8369 otherwise known as Family Courts Act was enacted. It provides: Sec. 5. Jurisdiction of Family Court. The Family Courts shall have exclusive original jurisdiction to hear and decide the following cases: xxx b. xxx xxx

Petition for guardianship, custody of children, habeas corpus in relation to the latter.

The vital question is, did RA 8369 impliedly repeal BP 129 and RA 7902 insofar as the jurisdiction of this Court to issue writ of habeas corpus in custody of minor cases is concerned? The simple answer is, yes, it did, because there is no other meaning of the word "exclusive" than to constitute the Family Court as the sole court which can issue said writ. If a court other than the Family Court also possesses the same competence, then the jurisdiction of the former is not exclusive but concurrent and such an interpretation is contrary to the simple and clear wording of RA 8369. Petitioner argues that unless this Court assumes jurisdiction over a petition for habeas corpus involving custody of minors, a respondent can easily evade the service of a writ of habeas corpus on him or her by just moving out of the region over which the Regional Trial Court issuing the writ has territorial jurisdiction. That may be so but then jurisdiction is conferred by law. In the absence of a law conferring such jurisdiction in this Court, it cannot exercise it even if it is demanded by expediency or necessity. Whether RA 8369 is a good or unwise law is not within the authority of this Court or any court for that matter to determine. The enactment of a law on jurisdiction is within the exclusive domain of the legislature. When there is a perceived defect in the law, the remedy is not to be sought from the courts but only from the legislature. The only issue before us therefore is whether the Court of Appeals has jurisdiction to issue writs of habeas corpus in cases involving custody of minors in the light of the provision in RA 8369 giving family courts exclusive original jurisdiction over such petitions. TIcAaH In his comment, the Solicitor General points out that Section 20 of the Rule on Custody of Minors and Writ of Habeas Corpus in Relation to Custody of Minors (A.M. No. 03-04-04-SC, effective May 15, 2003) has rendered the issue moot. Section 20 of the rule provides that a petition for habeas corpus may be filed in the Supreme Court, 4 Court of Appeals, or with any of its members and, if so granted, the writ shall be enforceable anywhere in the Philippines. 5 The petition is granted. The Court of Appeals should take cognizance of the case since there is nothing in RA 8369 that revoked its jurisdiction to issue writs of habeas corpus involving the custody of minors.

The Court of Appeals opines that RA 8369 impliedly repealed RA 7902 and BP 129 since, by giving family courts exclusive jurisdiction over habeas corpus cases, the lawmakers intended it to be the sole court which can issue writs of habeas corpus. To the court a quo, the word "exclusive" apparently cannot be construed any other way. HCTEDa We disagree with the CA's reasoning because it will result in an iniquitous situation, leaving individuals like petitioner without legal recourse in obtaining custody of their children. Individuals who do not know the whereabouts of minors they are looking for would be helpless since they cannot seek redress from family courts whose writs are enforceable only in their respective territorial jurisdictions. Thus, if a minor is being transferred from one place to another, which seems to be the case here, the petitioner in a habeas corpus case will be left without legal remedy. This lack of recourse could not have been the intention of the lawmakers when they passed the Family Courts Act of 1997. As observed by the Solicitor General: aECSHI Under the Family Courts Act of 1997, the avowed policy of the State is to "protect the rights and promote the welfare of children." The creation of the Family Court is geared towards addressing three major issues regarding children's welfare cases, as expressed by the legislators during the deliberations for the law. The legislative intent behind giving Family Courts exclusive and original jurisdiction over such cases was to avoid further clogging of regular court dockets, ensure greater sensitivity and specialization in view of the nature of the case and the parties, as well as to guarantee that the privacy of the children party to the case remains protected. The primordial consideration is the welfare and best interests of the child. We rule therefore that RA 8369 did not divest the Court of Appeals and the Supreme Court of their jurisdiction over habeas corpus cases involving the custody of minors. Again, to quote the Solicitor General: To allow the Court of Appeals to exercise jurisdiction over the petition for habeas corpus involving a minor child whose whereabouts are uncertain and transient will not result in one of the situations that the legislature seeks to avoid. First, the welfare of the child is paramount. Second, the ex parte nature of habeas corpus proceedings will not result in disruption of the child's privacy and emotional well-being; whereas to deprive the appellate court of jurisdiction will result in the evil sought to be avoided by the legislature: the child's welfare and well being will be prejudiced. IAEcCT This is not the first time that this Court construed the word "exclusive" as not foreclosing resort to another jurisdiction. As correctly cited by the Solicitor General, in Floresca vs. Philex Mining Corporation, 6 the heirs of miners killed in a work-related accident were allowed to file suit in the regular courts even if, under the Workmen's Compensation Act, the Workmen's Compensation Commissioner had exclusive jurisdiction over such cases. We agree with the observations of the Solicitor General that: While Floresca involved a cause of action different from the case at bar, it supports petitioner's submission that the word "exclusive" in the Family Courts Act of 1997 may not connote automatic foreclosure of the jurisdiction of other courts over habeas corpus cases involving minors. In the same manner that the remedies in the Floresca case were selective, the jurisdiction of the Court of Appeals and Family Court in the case at bar is concurrent. The Family Court can issue writs of habeas corpus enforceable only within its territorial jurisdiction. On the other hand, in cases where the territorial jurisdiction for the enforcement of the writ cannot be determined with certainty, the Court of Appeals can issue the same writ enforceable throughout the Philippines, as provided in Sec. 2, Rule 102 of the Revised Rules of Court, thus: The Writ of Habeas Corpus may be granted by the Supreme Court, or any member thereof, on any day and at any time, or by the Court of Appeals or any member thereof in the instances authorized by law, and if so granted it shall be enforceable anywhere in the Philippines, and may be made returnable before the court or any member thereof, or before a Court of First Instance, or any judge thereof for hearing and decision on the merits. It may also be granted by a Court of First Instance, or a judge thereof, on any day and at any time, and returnable before himself, enforceable only within his judicial district. (Emphasis supplied) In ruling that the Commissioner's "exclusive" jurisdiction did not foreclose resort to the regular courts for damages, this Court, in the same Floresca case, said that it was merely applying and giving effect to the constitutional guarantees of social justice in the 1935 and 1973 Constitutions and implemented by the Civil Code. It also applied the well-established rule that what is controlling is the spirit and intent, not the letter, of the law:

"Idolatrous reverence" for the law sacrifices the human being. The spirit of the law insures man's survival and ennobles him. In the words of Shakespeare, "the letter of the law killeth; its spirit giveth life." xxx xxx xxx

It is therefore patent that giving effect to the social justice guarantees of the Constitution, as implemented by the provisions of the New Civil Code, is not an exercise of the power of law-making, but is rendering obedience to the mandates of the fundamental law and the implementing legislation aforementioned. Language is rarely so free from ambiguity as to be incapable of being used in more than one sense. Sometimes, what the legislature actually had in mind is not accurately reflected in the language of a statute, and its literal interpretation may render it meaningless, lead to absurdity, injustice or contradiction. 7 In the case at bar, a literal interpretation of the word "exclusive" will result in grave injustice and negate the policy "to protect the rights and promote the welfare of children" 8 under the Constitution and the United Nations Convention on the Rights of the Child. This mandate must prevail over legal technicalities and serve as the guiding principle in construing the provisions of RA 8369. TIaEDC Moreover, settled is the rule in statutory construction that implied repeals are not favored: The two laws must be absolutely incompatible, and a clear finding thereof must surface, before the inference of implied repeal may be drawn. The rule is expressed in the maxim, interpretare et concordare leqibus est optimus interpretendi, i.e., every statute must be so interpreted and brought into accord with other laws as to form a uniform system of jurisprudence. The fundament is that the legislature should be presumed to have known the existing laws on the subject and not have enacted conflicting statutes. Hence, all doubts must be resolved against any implied repeal, and all efforts should be exerted in order to harmonize and give effect to all laws on the subject." 9 The provisions of RA 8369 reveal no manifest intent to revoke the jurisdiction of the Court of Appeals and Supreme Court to issue writs of habeas corpus relating to the custody of minors. Further, it cannot be said that the provisions of RA 8369, RA 7092 and BP 129 are absolutely incompatible since RA 8369 does not prohibit the Court of Appeals and the Supreme Court from issuing writs of habeas corpus in cases involving the custody of minors. Thus, the provisions of RA 8369 must be read in harmony with RA 7029 and BP 129 that family courts have concurrent jurisdiction with the Court of Appeals and the Supreme Court in petitions for habeas corpus where the custody of minors is at issue. In any case, whatever uncertainty there was has been settled with the adoption of A.M. No. 03-03-04-SC Re: Rule on Custody of Minors and Writ of Habeas Corpus in Relation to Custody of Minors. Section 20 of the rule provides that: Section 20. Petition for writ of habeas corpus. A verified petition for a writ of habeas corpus involving custody of minors shall be filed with the Family Court. The writ shall be enforceable within its judicial region to which the Family Court belongs.

xxx

xxx

xxx

The petition may likewise be filed with the Supreme Court, Court of Appeals, or with any of its members and, if so granted, the writ shall be enforceable anywhere in the Philippines. The writ may be made returnable to a Family Court or to any regular court within the region where the petitioner resides or where the minor may be found for hearing and decision on the merits. (Emphasis Ours) From the foregoing, there is no doubt that the Court of Appeals and Supreme Court have concurrent jurisdiction with family courts in habeas corpus cases where the custody of minors is involved. IEAaST One final note. Requiring the serving officer to search for the child all over the country is not an unreasonable availment of a remedy which the Court of Appeals cited as a ground for dismissing the petition. As explained by the Solicitor General: 10 That the serving officer will have to "search for the child all over the country" does not represent an insurmountable or unreasonable obstacle, since such a task is no more different from or difficult than the duty of the peace officer in effecting a warrant of arrest, since the latter is likewise enforceable anywhere within the Philippines.

WHEREFORE, the petition is hereby GRANTED. The petition for habeas corpus in CA-G.R.-SP-No. 70501 is hereby REINSTATED and REMANDED to the Court of Appeals, Sixteenth Division. SO ORDERED. CaTSEA Panganiban and Carpio-Morales, JJ ., concur. Sandoval-Gutierrez, J ., is on leave.

[G.R. No. 196271. February 28, 2012.] DATU MICHAEL ABAS KIDA, in his personal capacity, and in representation of MAGUINDANAO FEDERATION OF AUTONOMOUS IRRIGATORS ASSOCIATION, INC., HADJI MUHMINA J. USMAN, JOHN ANTHONY L. LIM, JAMILON T. ODIN, ASRIN TIMBOL JAIYARI, MUJIB M. KALANG, ALIH AL-SAIDI J. SAPI-E, KESSAR DAMSIE ABDIL, and BASSAM ALUH SAUPI, petitioners, vs. SENATE OF THE PHILIPPINES, represented by its President JUAN PONCE ENRILE, HOUSE OF REPRESENTATIVES, thru SPEAKER FELICIANO BELMONTE, COMMISSION ON ELECTIONS, thru its Chairman, SIXTO BRILLANTES, JR., PAQUITO OCHOA, JR., Office of the President Executive Secretary, FLORENCIO ABAD, JR., Secretary of Budget, and ROBERTO TAN, Treasurer of the Philippines, respondents. [G.R. No. 196305. February 28, 2012.] BASARI D. MAPUPUNO, petitioner, vs. SIXTO BRILLANTES, in his capacity as Chairman of the Commission on Elections, FLORENCIO ABAD, JR. in his capacity as Secretary of the Department of Budget and Management, PAQUITO OCHOA, JR., in his capacity as Executive Secretary, JUAN PONCE ENRILE, in his capacity as Senate President, and FELICIANO BELMONTE, in his capacity as Speaker of the House of Representatives, respondents. [G.R. No. 197221. February 28, 2012.] REP. EDCEL C. LAGMAN, petitioner, vs. PAQUITO N. OCHOA, JR., in his capacity as the Executive Secretary, and the COMMISSION ON ELECTIONS, respondents. [G.R. No. 197280. February 28, 2012.] ALMARIM CENTI TILLAH, DATU CASAN CONDING CANA, and PARTIDO DEMOKRATIKO PILIPINO LAKAS NG BAYAN (PDPLABAN), petitioners, vs. THE COMMISSION ON ELECTIONS, through its Chairman, SIXTO BRILLANTES, JR., HON. PAQUITO N. OCHOA, JR., in his capacity as Executive Secretary, HON. FLORENCIO B. ABAD, JR., in his capacity as Secretary of the Department of Budget and Management, and HON. ROBERTO B. TAN, in his capacity as Treasurer of the Philippines, respondents. [G.R. No. 197282. February 28, 2012.] ATTY. ROMULO B. MACALINTAL, petitioner, vs. COMMISSION ON ELECTIONS and THE OFFICE OF THE PRESIDENT, through EXECUTIVE SECRETARY PAQUITO N. OCHOA, JR., respondents. [G.R. No. 197392. February 28, 2012.] LOUIS "BAROK" C. BIRAOGO, petitioner, vs. THE COMMISSION ON ELECTIONS and EXECUTIVE SECRETARY PAQUITO N. OCHOA, JR., respondents. [G.R. No. 197454. February 28, 2012.] JACINTO V. PARAS, petitioner, vs. EXECUTIVE SECRETARY PAQUITO N. OCHOA, JR., and the COMMISSION ON ELECTIONS, respondents. MINORITY RIGHTS FORUM, PHILIPPINES, INC., respondents-intervenor. RESOLUTION BRION, J p: We resolve: (a) the motion for reconsideration filed by petitioners Datu Michael Abas Kida, et al. in G.R. No. 196271; (b) the motion for reconsideration filed by petitioner Rep. Edcel Lagman in G.R. No. 197221; (c) the ex abundante ad cautelam motion for reconsideration filed by petitioner Basari Mapupuno in G.R. No. 196305; (d) the motion for reconsideration filed by petitioner Atty. Romulo Macalintal in G.R. No. 197282; (e) the motion for reconsideration filed by petitioners Almarim Centi Tillah, Datu Casan Conding Cana and Partido Demokratiko Pilipino Lakas ng Bayan in G.R. No. 197280; (f) the manifestation

and motion filed by petitioners Almarim Centi Tillah, et al. in G.R. No. 197280; and (g) the very urgent motion to issue clarificatory resolution that the temporary restraining order (TRO) is still existing and effective. cCHETI These motions assail our Decision dated October 18, 2011, where we upheld the constitutionality of Republic Act (RA) No. 10153. Pursuant to the constitutional mandate of synchronization, RA No. 10153 postponed the regional elections in the Autonomous Region in Muslim Mindanao (ARMM) (which were scheduled to be held on the second Monday of August 2011) to the second Monday of May 2013 and recognized the President's power to appoint officers-in-charge (OICs) to temporarily assume these positions upon the expiration of the terms of the elected officials. The Motions for Reconsideration The petitioners in G.R. No. 196271 raise the following grounds in support of their motion: I. THE HONORABLE COURT ERRED IN CONCLUDING THAT THE ARMM ELECTIONS ARE LOCAL ELECTIONS, CONSIDERING THAT THE CONSTITUTION GIVES THE ARMM A SPECIAL STATUS AND IS SEPARATE AND DISTINCT FROM ORDINARY LOCAL GOVERNMENT UNITS. II. III. IV. V. R.A. 10153 AND R.A. 9333 AMEND THE ORGANIC ACT. THE SUPERMAJORITY PROVISIONS OF THE ORGANIC ACT (R.A. 9054) ARE NOT IRREPEALABLE LAWS. SECTION 3, ARTICLE XVII OF R.A. 9054 DOES NOT VIOLATE SECTION 18, ARTICLE X OF THE CONSTITUTION. BALANCE OF INTERESTS TILT IN FAVOR OF THE DEMOCRATIC PRINCIPLE[.] 1 ISCTcH

The petitioner in G.R. No. 197221 raises similar grounds, arguing that: I. THE ELECTIVE REGIONAL EXECUTIVE AND LEGISLATIVE OFFICIALS OF ARMM CANNOT BE CONSIDERED AS OR EQUATED WITH THE TRADITIONAL LOCAL GOVERNMENT OFFICIALS IN THE LOCAL GOVERNMENT UNITS (LGUs) BECAUSE (A) THERE IS NO EXPLICIT CONSTITUTIONAL PROVISION ON SUCH PARITY; AND (B) THE ARMM IS MORE SUPERIOR THAN LGUs IN STRUCTURE, POWERS AND AUTONOMY, AND CONSEQUENTLY IS A CLASS OF ITS OWN APART FROM TRADITIONAL LGUs. II. THE UNMISTAKABLE AND UNEQUIVOCAL CONSTITUTIONAL MANDATE FOR AN ELECTIVE AND REPRESENTATIVE EXECUTIVE DEPARTMENT AND LEGISLATIVE ASSEMBLY IN ARMM INDUBITABLY PRECLUDES THE APPOINTMENT BY THE PRESIDENT OF OFFICERS-IN-CHARGE (OICs), ALBEIT MOMENTARY OR TEMPORARY, FOR THE POSITIONS OF ARMM GOVERNOR, VICE GOVERNOR AND MEMBERS OF THE REGIONAL ASSEMBLY. III. THE PRESIDENT'S APPOINTING POWER IS LIMITED TO APPOINTIVE OFFICIALS AND DOES NOT EXTEND TO ELECTIVE OFFICIALS EVEN AS THE PRESIDENT IS ONLY VESTED WITH SUPERVISORY POWERS OVER THE ARMM, THEREBY NEGATING THE AWESOME POWER TO APPOINT AND REMOVE OICs OCCUPYING ELECTIVE POSITIONS. IV. THE CONSTITUTION DOES NOT PROSCRIBE THE HOLDOVER OF ARMM ELECTED OFFICIALS PENDING THE ELECTION AND QUALIFICATION OF THEIR SUCCESSORS. V. THE RULING IN OSMENA DOES NOT APPLY TO ARMM ELECTED OFFICIALS WHOSE TERMS OF OFFICE ARE NOT PROVIDED FOR BY THE CONSTITUTION BUT PRESCRIBED BY THE ORGANIC ACTS. DTISaH VI. THE REQUIREMENT OF A SUPERMAJORITY OF 3/4 VOTES IN THE HOUSE OF REPRESENTATIVES AND THE SENATE FOR THE VALIDITY OF A SUBSTANTIVE AMENDMENT OR REVISION OF THE ORGANIC ACTS DOES NOT IMPOSE AN IRREPEALABLE LAW. VII. THE REQUIREMENT OF A PLEBISCITE FOR THE EFFECTIVITY OF A SUBSTANTIVE AMENDMENT OR REVISION OF THE ORGANIC ACTS DOES NOT UNDULY EXPAND THE PLEBISCITE REQUIREMENT OF THE CONSTITUTION. VIII. SYNCHRONIZATION OF THE ARMM ELECTION WITH THE NATIONAL AND LOCAL ELECTIONS IS NOT MANDATED BY THE CONSTITUTION.

IX. THE COMELEC HAS THE AUTHORITY TO HOLD AND CONDUCT SPECIAL ELECTIONS IN ARMM, AND THE ENACTMENT OF AN IMPROVIDENT AND UNCONSTITUTIONAL STATUTE IS AN ANALOGOUS CAUSE WARRANTING COMELEC'S HOLDING OF SPECIAL ELECTIONS. 2 (italics supplied) The petitioner in G.R. No. 196305 further asserts that: I. BEFORE THE COURT MAY CONSTRUE OR INTERPRET A STATUTE, IT IS A CONDITION SINE QUA NON THAT THERE BE DOUBT OR AMBIGUITY IN ITS LANGUAGE. THE TRANSITORY PROVISIONS HOWEVER ARE CLEAR AND UNAMBIGUOUS: THEY REFER TO THE 1992 ELECTIONS AND TURN-OVER OF ELECTIVE OFFICIALS. IN THUS RECOGNIZING A SUPPOSED "INTENT" OF THE FRAMERS, AND APPLYING THE SAME TO ELECTIONS 20 YEARS AFTER, THE HONORABLE SUPREME COURT MAY HAVE VIOLATED THE FOREMOST RULE IN STATUTORY CONSTRUCTION. HTCSDE xxx xxx xxx

II. THE HONORABLE COURT SHOULD HAVE CONSIDERED THAT RA 9054, AN ORGANIC ACT, WAS COMPLETE IN ITSELF. HENCE, RA 10153 SHOULD BE CONSIDERED TO HAVE BEEN ENACTED PRECISELY TO AMEND RA 9054. xxx xxx xxx

III. THE HONORABLE COURT MAY HAVE COMMITTED A SERIOUS ERROR IN DECLARING THE 2/3 VOTING REQUIREMENT SET FORTH IN RA 9054 AS UNCONSTITUTIONAL. xxx xxx xxx

IV. THE HONORABLE COURT MAY HAVE COMMITTED A SERIOUS ERROR IN HOLDING THAT A PLEBISCITE IS NOT NECESSARY IN AMENDING THE ORGANIC ACT. xxx xxx xxx

V. THE HONORABLE COURT COMMITTED A SERIOUS ERROR IN DECLARING THE HOLD-OVER OF ARMM ELECTIVE OFFICIALS UNCONSTITUTIONAL. xxx xxx xxx

VI. THE HONORABLE COURT COMMITTED A SERIOUS ERROR IN UPHOLDING THE APPOINTMENT OF OFFICERS-INCHARGE. 3 (italics and underscoring supplied) The petitioner in G.R. No. 197282 contends that: A. ASSUMING WITHOUT CONCEDING THAT THE APPOINTMENT OF OICs FOR THE REGIONAL GOVERNMENT OF THE ARMM IS NOT UNCONSTITUTIONAL TO BEGIN WITH, SUCH APPOINTMENT OF OIC REGIONAL OFFICIALS WILL CREATE A FUNDAMENTAL CHANGE IN THE BASIC STRUCTURE OF THE REGIONAL GOVERNMENT SUCH THAT R.A. NO. 10153 SHOULD HAVE BEEN SUBMITTED TO A PLEBISCITE IN THE ARMM FOR APPROVAL BY ITS PEOPLE, WHICH PLEBISCITE REQUIREMENT CANNOT BE CIRCUMVENTED BY SIMPLY CHARACTERIZING THE PROVISIONS OF R.A. NO. 10153 ON APPOINTMENT OF OICs AS AN "INTERIM MEASURE". cTIESa B. THE HONORABLE COURT ERRED IN RULING THAT THE APPOINTMENT BY THE PRESIDENT OF OICs FOR THE ARMM REGIONAL GOVERNMENT IS NOT VIOLATIVE OF THE CONSTITUTION. C.

THE HOLDOVER PRINCIPLE ADOPTED IN R.A. NO. 9054 DOES NOT VIOLATE THE CONSTITUTION, AND BEFORE THEIR SUCCESSORS ARE ELECTED IN EITHER AN ELECTION TO BE HELD AT THE SOONEST POSSIBLE TIME OR IN MAY 2013, THE SAID INCUMBENT ARMM REGIONAL OFFICIALS MAY VALIDLY CONTINUE FUNCTIONING AS SUCH IN A HOLDOVER CAPACITY IN ACCORDANCE WITH SECTION 7, ARTICLE VII OF R.A. NO. 9054. D. WITH THE CANCELLATION OF THE AUGUST 2011 ARMM ELECTIONS, SPECIAL ELECTIONS MUST IMMEDIATELY BE HELD FOR THE ELECTIVE REGIONAL OFFICIALS OF THE ARMM WHO SHALL SERVE UNTIL THEIR SUCCESSORS ARE ELECTED IN THE MAY 2013 SYNCHRONIZED ELECTIONS. 4 Finally, the petitioners in G.R. No. 197280 argue that: a) the Constitutional mandate of synchronization does not apply to the ARMM elections; cEDIAa

b) RA No. 10153 negates the basic principle of republican democracy which, by constitutional mandate, guides the governance of the Republic; c) RA No. 10153 amends the Organic Act (RA No. 9054) and, thus, has to comply with the 2/3 vote from the House of Representatives and the Senate, voting separately, and be ratified in a plebiscite; d) if the choice is between elective officials continuing to hold their offices even after their terms are over and nonelective individuals getting into the vacant elective positions by appointment as OICs, the holdover option is the better choice; e) the President only has the power of supervision over autonomous regions, which does not include the power to appoint OICs to take the place of ARMM elective officials; and f) it would be better to hold the ARMM elections separately from the national and local elections as this will make it easier for the authorities to implement election laws. In essence, the Court is asked to resolve the following questions: (a) Does the Constitution mandate the synchronization of ARMM regional elections with national and local elections?

(b) Does RA No. 10153 amend RA No. 9054? If so, does RA No. 10153 have to comply with the supermajority vote and plebiscite requirements? (c) (d) Is the holdover provision in RA No. 9054 constitutional? Does the COMELEC have the power to call for special elections in ARMM?

(e) Does granting the President the power to appoint OICs violate the elective and representative nature of ARMM regional legislative and executive offices? ECaHSI (f) Does the appointment power granted to the President exceed the President's supervisory powers over autonomous regions? The Court's Ruling We deny the motions for lack of merit. Synchronization mandate includes ARMM elections The Court was unanimous in holding that the Constitution mandates the synchronization of national and local elections. While the Constitution does not expressly instruct Congress to synchronize the national and local elections, the intention can be inferred from the following provisions of the Transitory Provisions (Article XVIII) of the Constitution, which state:

Section 1. of May, 1987.

The first elections of Members of the Congress under this Constitution shall be held on the second Monday

The first local elections shall be held on a date to be determined by the President, which may be simultaneous with the election of the Members of the Congress. It shall include the election of all Members of the city or municipal councils in the Metropolitan Manila area. Section 2. The Senators, Members of the House of Representatives, and the local officials first elected under this Constitution shall serve until noon of June 30, 1992. Of the Senators elected in the elections in 1992, the first twelve obtaining the highest number of votes shall serve for six years and the remaining twelve for three years. xxx xxx xxx

Section 5. The six-year term of the incumbent President and Vice-President elected in the February 7, 1986 election is, for purposes of synchronization of elections, hereby extended to noon of June 30, 1992. SICaDA The first regular elections for the President and Vice-President under this Constitution shall be held on the second Monday of May, 1992. To fully appreciate the constitutional intent behind these provisions, we refer to the discussions of the Constitutional Commission: MR. MAAMBONG. For purposes of identification, I will now read a section which we will temporarily indicate as Section 14. It reads: "THE SENATORS, MEMBERS OF THE HOUSE OF REPRESENTATIVES AND THE LOCAL OFFICIALS ELECTED IN THE FIRST ELECTION SHALL SERVE FOR FIVE YEARS, TO EXPIRE AT NOON OF JUNE 1992." This was presented by Commissioner Davide, so may we ask that Commissioner Davide be recognized. THE PRESIDING OFFICER (Mr. Rodrigo). Commissioner Davide is recognized. MR. DAVIDE. Before going to the proposed amendment, I would only state that in view of the action taken by the Commission on Section 2 earlier, I am formulating a new proposal. It will read as follows: "THE SENATORS, MEMBERS OF THE HOUSE OF REPRESENTATIVES AND THE LOCAL OFFICIALS FIRST ELECTED UNDER THIS CONSTITUTION SHALL SERVE UNTIL NOON OF JUNE 30, 1992." I proposed this because of the proposed section of the Article on Transitory Provisions giving a term to the incumbent President and Vice-President until 1992. Necessarily then, since the term provided by the Commission for Members of the Lower House and for local officials is three years, if there will be an election in 1987, the next election for said officers will be in 1990, and it would be very close to 1992. We could never attain, subsequently, any synchronization of election which is once every three years. EAcCHI So under my proposal we will be able to begin actual synchronization in 1992, and consequently, we should not have a local election or an election for Members of the Lower House in 1990 for them to be able to complete their term of three years each. And if we also stagger the Senate, upon the first election it will result in an election in 1993 for the Senate alone, and there will be an election for 12 Senators in 1990. But for the remaining 12 who will be elected in 1987, if their term is for six years, their election will be in 1993. So, consequently we will have elections in 1990, in 1992 and in 1993. The later election will be limited to only 12 Senators and of course to the local officials and the Members of the Lower House. But, definitely, thereafter we can never have an election once every three years, therefore defeating the very purpose of the Commission when we adopted the term of six years for the President and another six years for the Senators with the possibility of staggering with 12 to serve for six years and 12 for three years insofar as the first Senators are concerned. And so my proposal is the only way to effect the first synchronized election which would mean, necessarily, a bonus of two years to the Members of the Lower House and a bonus of two years to the local elective officials. THE PRESIDING OFFICER (Mr. Rodrigo). What does the committee say? cAaETS

MR. DE CASTRO. Mr. Presiding Officer. THE PRESIDING OFFICER (Mr. Rodrigo). Commissioner de Castro is recognized. MR. DE CASTRO. Thank you. During the discussion on the legislative and the synchronization of elections, I was the one who proposed that in order to synchronize the elections every three years, which the body approved the first national and local officials to be elected in 1987 shall continue in office for five years, the same thing the Honorable Davide is now proposing. That means they will all serve until 1992, assuming that the term of the President will be for six years and continue beginning in 1986. So from 1992, we will again have national, local and presidential elections. This time, in 1992, the President shall have a term until 1998 and the first 12 Senators will serve until 1998, while the next 12 shall serve until 1995, and then the local officials elected in 1992 will serve until 1995. From then on, we shall have an election every three years. So, I will say that the proposition of Commissioner Davide is in order, if we have to synchronize our elections every three years which was already approved by the body. Thank you, Mr. Presiding Officer. xxx xxx xxx

MR. GUINGONA. What will be synchronized, therefore, is the election of the incumbent President and Vice-President in 1992. MR. DAVIDE. Yes. EHACcT MR. GUINGONA. Not the reverse. Will the committee not synchronize the election of the Senators and local officials with the election of the President? MR. DAVIDE. It works both ways, Mr. Presiding Officer. The attempt here is on the assumption that the provision of the Transitory Provisions on the term of the incumbent President and Vice-President would really end in 1992. MR. GUINGONA. Yes. MR. DAVIDE. In other words, there will be a single election in 1992 for all, from the President up to the municipal officials. 5 (emphases and underscoring ours) The framers of the Constitution could not have expressed their objective more clearly there was to be a single election in 1992 for all elective officials from the President down to the municipal officials. Significantly, the framers were even willing to temporarily lengthen or shorten the terms of elective officials in order to meet this objective, highlighting the importance of this constitutional mandate. We came to the same conclusion in Osmea v. Commission on Elections, 6 where we unequivocally stated that "the Constitution has mandated synchronized national and local elections." 7 Despite the length and verbosity of their motions, the petitioners have failed to convince us to deviate from this established ruling. AEcTaS Neither do we find any merit in the petitioners' contention that the ARMM elections are not covered by the constitutional mandate of synchronization because the ARMM elections were not specifically mentioned in the above-quoted Transitory Provisions of the Constitution. That the ARMM elections were not expressly mentioned in the Transitory Provisions of the Constitution on synchronization cannot be interpreted to mean that the ARMM elections are not covered by the constitutional mandate of synchronization. We have to consider that the ARMM, as we now know it, had not yet been officially organized at the time the Constitution was enacted and ratified by the people. Keeping in mind that a constitution is not intended to provide merely for the exigencies of a few years but is to endure through generations for as long as it remains unaltered by the people as ultimate sovereign, a constitution should be construed in the light of what actually is a continuing instrument to govern not only the present but also the unfolding events of the indefinite future. Although the principles embodied in a constitution remain fixed and

unchanged from the time of its adoption, a constitution must be construed as a dynamic process intended to stand for a great length of time, to be progressive and not static. 8 To reiterate, Article X of the Constitution, entitled "Local Government," clearly shows the intention of the Constitution to classify autonomous regions, such as the ARMM, as local governments. We refer to Section 1 of this Article, which provides: Section 1. The territorial and political subdivisions of the Republic of the Philippines are the provinces, cities, municipalities, and barangays. There shall be autonomous regions in Muslim Mindanao and the Cordilleras as hereinafter provided. The inclusion of autonomous regions in the enumeration of political subdivisions of the State under the heading "Local Government" indicates quite clearly the constitutional intent to consider autonomous regions as one of the forms of local governments. HSTaEC That the Constitution mentions only the "national government" and the "local governments," and does not make a distinction between the "local government" and the "regional government," is particularly revealing, betraying as it does the intention of the framers of the Constitution to consider the autonomous regions not as separate forms of government, but as political units which, while having more powers and attributes than other local government units, still remain under the category of local governments. Since autonomous regions are classified as local governments, it follows that elections held in autonomous regions are also considered as local elections. The petitioners further argue that even assuming that the Constitution mandates the synchronization of elections, the ARMM elections are not covered by this mandate since they are regional elections and not local elections. In construing provisions of the Constitution, the first rule is verba legis, "that is, wherever possible, the words used in the Constitution must be given their ordinary meaning except where technical terms are employed." 9 Applying this principle to determine the scope of "local elections," we refer to the meaning of the word "local," as understood in its ordinary sense. As defined in Webster's Third New International Dictionary Unabridged, "local" refers to something "that primarily serves the needs of a particular limited district, often a community or minor political subdivision." Obviously, the ARMM elections, which are held within the confines of the autonomous region of Muslim Mindanao, fall within this definition. To be sure, the fact that the ARMM possesses more powers than other provinces, cities, or municipalities is not enough reason to treat the ARMM regional elections differently from the other local elections. Ubi lex non distinguit nec nos distinguire debemus. When the law does not distinguish, we must not distinguish. 10 RA No. 10153 does not amend RA No. 9054 The petitioners are adamant that the provisions of RA No. 10153, in postponing the ARMM elections, amend RA No. 9054. We cannot agree with their position. HETDAa A thorough reading of RA No. 9054 reveals that it fixes the schedule for only the first ARMM elections; 11 it does not provide the date for the succeeding regular ARMM elections. In providing for the date of the regular ARMM elections, RA No. 9333 and RA No. 10153 clearly do not amend RA No. 9054 since these laws do not change or revise any provision in RA No. 9054. In fixing the date of the ARMM elections subsequent to the first election, RA No. 9333 and RA No. 10153 merely filled the gap left in RA No. 9054. We reiterate our previous observations: This view that Congress thought it best to leave the determination of the date of succeeding ARMM elections to legislative discretion finds support in ARMM's recent history. To recall, RA No. 10153 is not the first law passed that rescheduled the ARMM elections. The First Organic Act RA No. 6734 not only did not fix the date of the subsequent elections; it did not even fix the specific date of the first ARMM elections, leaving the date to be fixed in another legislative enactment. Consequently, RA No. 7647, RA No. 8176, RA No. 8746, RA No. 8753, and RA No. 9012 were all enacted by Congress to fix the dates of the ARMM elections. Since these laws did not change or

modify any part or provision of RA No. 6734, they were not amendments to this latter law. Consequently, there was no need to submit them to any plebiscite for ratification. The Second Organic Act RA No. 9054 which lapsed into law on March 31, 2001, provided that the first elections would be held on the second Monday of September 2001. Thereafter, Congress passed RA No. 9140 to reset the date of the ARMM elections. Significantly, while RA No. 9140 also scheduled the plebiscite for the ratification of the Second Organic Act (RA No. 9054), the new date of the ARMM regional elections fixed in RA No. 9140 was not among the provisions ratified in the plebiscite held to approve RA No. 9054. Thereafter, Congress passed RA No. 9333, which further reset the date of the ARMM regional elections. Again, this law was not ratified through a plebiscite. From these legislative actions, we see the clear intention of Congress to treat the laws which fix the date of the subsequent ARMM elections as separate and distinct from the Organic Acts. Congress only acted consistently with this intent when it passed RA No. 10153 without requiring compliance with the amendment prerequisites embodied in Section 1 and Section 3, Article XVII of RA No. 9054. 12 (emphases supplied) DEHcTI The petitioner in G.R. No. 196305 contends, however, that there is no lacuna in RA No. 9054 as regards the date of the subsequent ARMM elections. In his estimation, it can be implied from the provisions of RA No. 9054 that the succeeding elections are to be held three years after the date of the first ARMM regional elections. We find this an erroneous assertion. Well-settled is the rule that the court may not, in the guise of interpretation, enlarge the scope of a statute and include therein situations not provided nor intended by the lawmakers. An omission at the time of enactment, whether careless or calculated, cannot be judicially supplied however later wisdom may recommend the inclusion. 13 Courts are not authorized to insert into the law what they think should be in it or to supply what they think the legislature would have supplied if its attention had been called to the omission. 14 Providing for lapses within the law falls within the exclusive domain of the legislature, and courts, no matter how well-meaning, have no authority to intrude into this clearly delineated space. Since RA No. 10153 does not amend, but merely fills in the gap in RA No. 9054, there is no need for RA No. 10153 to comply with the amendment requirements set forth in Article XVII of RA No. 9054. Supermajority vote requirement makes RA No. 9054 an irrepealable law Even assuming that RA No. 10153 amends RA No. 9054, however, we have already established that the supermajority vote requirement set forth in Section 1, Article XVII of RA No. 9054 15 is unconstitutional for violating the principle that Congress cannot pass irrepealable laws. SAHEIc The power of the legislature to make laws includes the power to amend and repeal these laws. Where the legislature, by its own act, attempts to limit its power to amend or repeal laws, the Court has the duty to strike down such act for interfering with the plenary powers of Congress. As we explained in Duarte v. Dade: 16 A state legislature has a plenary law-making power over all subjects, whether pertaining to persons or things, within its territorial jurisdiction, either to introduce new laws or repeal the old, unless prohibited expressly or by implication by the federal constitution or limited or restrained by its own. It cannot bind itself or its successors by enacting irrepealable laws except when so restrained. Every legislative body may modify or abolish the acts passed by itself or its predecessors. This power of repeal may be exercised at the same session at which the original act was passed; and even while a bill is in its progress and before it becomes a law. This legislature cannot bind a future legislature to a particular mode of repeal. It cannot declare in advance the intent of subsequent legislatures or the effect of subsequent legislation upon existing statutes. [emphasis ours] Under our Constitution, each House of Congress has the power to approve bills by a mere majority vote, provided there is quorum. 17 In requiring all laws which amend RA No. 9054 to comply with a higher voting requirement than the Constitution provides (2/3 vote), Congress, which enacted RA No. 9054, clearly violated the very principle which we sought to establish in Duarte. To reiterate, the act of one legislature is not binding upon, and cannot tie the hands of, future legislatures. 18 HDTCSI We also highlight an important point raised by Justice Antonio T. Carpio in his dissenting opinion, where he stated: "Section 1, Article XVII of RA 9054 erects a high vote threshold for each House of Congress to surmount, effectively and

unconstitutionally, taking RA 9054 beyond the reach of Congress' amendatory powers. One Congress cannot limit or reduce the plenary legislative power of succeeding Congresses by requiring a higher vote threshold than what the Constitution requires to enact, amend or repeal laws. No law can be passed fixing such a higher vote threshold because Congress has no power, by ordinary legislation, to amend the Constitution." 19 Plebiscite requirement in RA No. 9054 overly broad Similarly, we struck down the petitioners' contention that the plebiscite requirement 20 applies to all amendments of RA No. 9054 for being an unreasonable enlargement of the plebiscite requirement set forth in the Constitution. Section 18, Article X of the Constitution provides that "[t]he creation of the autonomous region shall be effective when approved by majority of the votes cast by the constituent units in a plebiscite called for the purpose[.]" We interpreted this to mean that only amendments to, or revisions of, the Organic Act constitutionally-essential to the creation of autonomous regions i.e., those aspects specifically mentioned in the Constitution which Congress must provide for in the Organic Act 21 require ratification through a plebiscite. We stand by this interpretation. STDEcA The petitioners argue that to require all amendments to RA No. 9054 to comply with the plebiscite requirement is to recognize that sovereignty resides primarily in the people. While we agree with the petitioners' underlying premise that sovereignty ultimately resides with the people, we disagree that this legal reality necessitates compliance with the plebiscite requirement for all amendments to RA No. 9054. For if we were to go by the petitioners' interpretation of Section 18, Article X of the Constitution that all amendments to the Organic Act have to undergo the plebiscite requirement before becoming effective, this would lead to impractical and illogical results hampering the ARMM's progress by impeding Congress from enacting laws that timely address problems as they arise in the region, as well as weighing down the ARMM government with the costs that unavoidably follow the holding of a plebiscite. Interestingly, the petitioner in G.R. No. 197282 posits that RA No. 10153, in giving the President the power to appoint OICs to take the place of the elective officials of the ARMM, creates a fundamental change in the basic structure of the government, and thus requires compliance with the plebiscite requirement embodied in RA No. 9054. Again, we disagree. The pertinent provision in this regard is Section 3 of RA No. 10153, which reads: Section 3. Appointment of Officers-in-Charge. The President shall appoint officers-in-charge for the Office of the Regional Governor, Regional Vice Governor and Members of the Regional Legislative Assembly who shall perform the functions pertaining to the said offices until the officials duly elected in the May 2013 elections shall have qualified and assumed office. We cannot see how the above-quoted provision has changed the basic structure of the ARMM regional government. On the contrary, this provision clearly preserves the basic structure of the ARMM regional government when it recognizes the offices of the ARMM regional government and directs the OICs who shall temporarily assume these offices to "perform the functions pertaining to the said offices." HCITDc Unconstitutionality of the holdover provision The petitioners are one in defending the constitutionality of Section 7 (1), Article VII of RA No. 9054, which allows the regional officials to remain in their positions in a holdover capacity. The petitioners essentially argue that the ARMM regional officials should be allowed to remain in their respective positions until the May 2013 elections since there is no specific provision in the Constitution which prohibits regional elective officials from performing their duties in a holdover capacity. The pertinent provision of the Constitution is Section 8, Article X which provides: Section 8. The term of office of elective local officials, except barangay officials, which shall be determined by law, shall be three years and no such official shall serve for more than three consecutive terms. [emphases ours] On the other hand, Section 7 (1), Article VII of RA No. 9054 provides:

Section 7. Terms of Office of Elective Regional Officials. (1) Terms of Office. The terms of office of the Regional Governor, Regional Vice Governor and members of the Regional Assembly shall be for a period of three (3) years, which shall begin at noon on the 30th day of September next following the day of the election and shall end at noon of the same date three (3) years thereafter. The incumbent elective officials of the autonomous region shall continue in effect until their successors are elected and qualified. TIcEDC The clear wording of Section 8, Article X of the Constitution expresses the intent of the framers of the Constitution to categorically set a limitation on the period within which all elective local officials can occupy their offices. We have already established that elective ARMM officials are also local officials; they are, thus, bound by the three-year term limit prescribed by the Constitution. It, therefore, becomes irrelevant that the Constitution does not expressly prohibit elective officials from acting in a holdover capacity. Short of amending the Constitution, Congress has no authority to extend the three-year term limit by inserting a holdover provision in RA No. 9054. Thus, the term of three years for local officials should stay at three (3) years, as fixed by the Constitution, and cannot be extended by holdover by Congress. Admittedly, we have, in the past, recognized the validity of holdover provisions in various laws. One significant difference between the present case and these past cases 22 is that while these past cases all refer to elective barangay or sangguniang kabataan officials whose terms of office are not explicitly provided for in the Constitution, the present case refers to local elective officials the ARMM Governor, the ARMM Vice Governor, and the members of the Regional Legislative Assembly whose terms fall within the three-year term limit set by Section 8, Article X of the Constitution. Even assuming that a holdover is constitutionally permissible, and there had been statutory basis for it (namely Section 7, Article VII of RA No. 9054), the rule of holdover can only apply as an available option where no express or implied legislative intent to the contrary exists; it cannot apply where such contrary intent is evident. 23 Congress, in passing RA No. 10153 and removing the holdover option, has made it clear that it wants to suppress the holdover rule expressed in RA No. 9054. Congress, in the exercise of its plenary legislative powers, has clearly acted within its discretion when it deleted the holdover option, and this Court has no authority to question the wisdom of this decision, absent any evidence of unconstitutionality or grave abuse of discretion. It is for the legislature and the executive, and not this Court, to decide how to fill the vacancies in the ARMM regional government which arise from the legislature complying with the constitutional mandate of synchronization. aHATDI COMELEC has no authority to hold special elections Neither do we find any merit in the contention that the Commission on Elections (COMELEC) is sufficiently empowered to set the date of special elections in the ARMM. To recall, the Constitution has merely empowered the COMELEC to enforce and administer all laws and regulations relative to the conduct of an election. 24 Although the legislature, under the Omnibus Election Code (Batas Pambansa Bilang [BP] 881), has granted the COMELEC the power to postpone elections to another date, this power is confined to the specific terms and circumstances provided for in the law. Specifically, this power falls within the narrow confines of the following provisions: Section 5. Postponement of election. When for any serious cause such as violence, terrorism, loss or destruction of election paraphernalia or records, force majeure, and other analogous causes of such a nature that the holding of a free, orderly and honest election should become impossible in any political subdivision, the Commission, motu proprio or upon a verified petition by any interested party, and after due notice and hearing, whereby all interested parties are afforded equal opportunity to be heard, shall postpone the election therein to a date which should be reasonably close to the date of the election not held, suspended or which resulted in a failure to elect but not later than thirty days after the cessation of the cause for such postponement or suspension of the election or failure to elect. Section 6. Failure of election. If, on account of force majeure, violence, terrorism, fraud, or other analogous causes the election in any polling place has not been held on the date fixed, or had been suspended before the hour fixed by law for the closing of the voting, or after the voting and during the preparation and the transmission of the election returns or in the custody or canvass thereof, such election results in a failure to elect, and in any of such cases the failure or suspension of election would affect the result of the election, the Commission shall, on the basis of a verified petition by any interested party and after due notice and hearing, call for the holding or continuation of the election not held, suspended or which resulted in a failure to elect on a date reasonably close to the date of the election not held, suspended or which resulted in a failure to elect

but not later than thirty days after the cessation of the cause of such postponement or suspension of the election or failure to elect. [emphases and underscoring ours] IcaHCS As we have previously observed in our assailed decision, both Section 5 and Section 6 of BP 881 address instances where elections have already been scheduled to take place but do not occur or had to be suspended because of unexpected and unforeseen circumstances, such as violence, fraud, terrorism, and other analogous circumstances. In contrast, the ARMM elections were postponed by law, in furtherance of the constitutional mandate of synchronization of national and local elections. Obviously, this does not fall under any of the circumstances contemplated by Section 5 or Section 6 of BP 881. More importantly, RA No. 10153 has already fixed the date for the next ARMM elections and the COMELEC has no authority to set a different election date. Even assuming that the COMELEC has the authority to hold special elections, and this Court can compel the COMELEC to do so, there is still the problem of having to shorten the terms of the newly elected officials in order to synchronize the ARMM elections with the May 2013 national and local elections. Obviously, neither the Court nor the COMELEC has the authority to do this, amounting as it does to an amendment of Section 8, Article X of the Constitution, which limits the term of local officials to three years. President's authority to appoint OICs The petitioner in G.R. No. 197221 argues that the President's power to appoint pertains only to appointive positions and cannot extend to positions held by elective officials. The power to appoint has traditionally been recognized as executive in nature. 25 Section 16, Article VII of the Constitution describes in broad strokes the extent of this power, thus: caCEDA Section 16. The President shall nominate and, with the consent of the Commission on Appointments, appoint the heads of the executive departments, ambassadors, other public ministers and consuls, or officers of the armed forces from the rank of colonel or naval captain, and other officers whose appointments are vested in him in this Constitution. He shall also appoint all other officers of the Government whose appointments are not otherwise provided for by law, and those whom he may be authorized by law to appoint. The Congress may, by law, vest the appointment of other officers lower in rank in the President alone, in the courts, or in the heads of departments, agencies, commissions, or boards. [emphasis ours] The 1935 Constitution contained a provision similar to the one quoted above. Section 10 (3), Article VII of the 1935 Constitution provides: (3) The President shall nominate and with the consent of the Commission on Appointments, shall appoint the heads of the executive departments and bureaus, officers of the Army from the rank of colonel, of the Navy and Air Forces from the rank of captain or commander, and all other officers of the Government whose appointments are not herein otherwise provided for, and those whom he may be authorized by law to appoint; but the Congress may by law vest the appointment of inferior officers, in the President alone, in the courts, or in the heads of departments. [emphasis ours] The main distinction between the provision in the 1987 Constitution and its counterpart in the 1935 Constitution is the sentence construction; while in the 1935 Constitution, the various appointments the President can make are enumerated in a single sentence, the 1987 Constitution enumerates the various appointments the President is empowered to make and divides the enumeration in two sentences. The change in style is significant; in providing for this change, the framers of the 1987 Constitution clearly sought to make a distinction between the first group of presidential appointments and the second group of presidential appointments, as made evident in the following exchange: MR. FOZ. Madame President . . . I propose to put a period (.) after "captain" and . . . delete "and all" and substitute it with HE SHALL ALSO APPOINT ANY. aHcACI MR. REGALADO. Madam President, the Committee accepts the proposed amendment because it makes it clear that those other officers mentioned therein do not have to be confirmed by the Commission on Appointments. 26

The first group of presidential appointments, specified as the heads of the executive departments, ambassadors, other public ministers and consuls, or officers of the Armed Forces, and other officers whose appointments are vested in the President by the Constitution, pertains to the appointive officials who have to be confirmed by the Commission on Appointments. The second group of officials the President can appoint are "all other officers of the Government whose appointments are not otherwise provided for by law, and those whom he may be authorized by law to appoint." 27 The second sentence acts as the "catch-all provision" for the President's appointment power, in recognition of the fact that the power to appoint is essentially executive in nature. 28 The wide latitude given to the President to appoint is further demonstrated by the recognition of the President's power to appoint officials whose appointments are not even provided for by law. In other words, where there are offices which have to be filled, but the law does not provide the process for filling them, the Constitution recognizes the power of the President to fill the office by appointment. Any limitation on or qualification to the exercise of the President's appointment power should be strictly construed and must be clearly stated in order to be recognized. 29 Given that the President derives his power to appoint OICs in the ARMM regional government from law, it falls under the classification of presidential appointments covered by the second sentence of Section 16, Article VII of the Constitution; the President's appointment power thus rests on clear constitutional basis. The petitioners also jointly assert that RA No. 10153, in granting the President the power to appoint OICs in elective positions, violates Section 16, Article X of the Constitution, 30 which merely grants the President the power of supervision over autonomous regions. DICSaH This is an overly restrictive interpretation of the President's appointment power. There is no incompatibility between the President's power of supervision over local governments and autonomous regions, and the power granted to the President, within the specific confines of RA No. 10153, to appoint OICs. The power of supervision is defined as "the power of a superior officer to see to it that lower officers perform their functions in accordance with law." 31 This is distinguished from the power of control or "the power of an officer to alter or modify or set aside what a subordinate officer had done in the performance of his duties and to substitute the judgment of the former for the latter." 32 The petitioners' apprehension regarding the President's alleged power of control over the OICs is rooted in their belief that the President's appointment power includes the power to remove these officials at will. In this way, the petitioners foresee that the appointed OICs will be beholden to the President, and act as representatives of the President and not of the people. Section 3 of RA No. 10153 expressly contradicts the petitioners' supposition. The provision states: Section 3. Appointment of Officers-in-Charge. The President shall appoint officers-in-charge for the Office of the Regional Governor, Regional Vice Governor and Members of the Regional Legislative Assembly who shall perform the functions pertaining to the said offices until the officials duly elected in the May 2013 elections shall have qualified and assumed office. The wording of the law is clear. Once the President has appointed the OICs for the offices of the Governor, Vice Governor and members of the Regional Legislative Assembly, these same officials will remain in office until they are replaced by the duly elected officials in the May 2013 elections. Nothing in this provision even hints that the President has the power to recall the appointments he already made. Clearly, the petitioners' fears in this regard are more apparent than real. SDTcAH RA No. 10153 as an interim measure We reiterate once more the importance of considering RA No. 10153 not in a vacuum, but within the context it was enacted in. In the first place, Congress enacted RA No. 10153 primarily to heed the constitutional mandate to synchronize the ARMM regional elections with the national and local elections. To do this, Congress had to postpone the scheduled ARMM elections for another date, leaving it with the problem of how to provide the ARMM with governance in the intervening period, between the expiration of the term of those elected in August 2008 and the assumption to office twenty-one (21) months away of those who will win in the synchronized elections on May 13, 2013.

In our assailed Decision, we already identified the three possible solutions open to Congress to address the problem created by synchronization (a) allow the incumbent officials to remain in office after the expiration of their terms in a holdover capacity; (b) call for special elections to be held, and shorten the terms of those to be elected so the next ARMM regional elections can be held on May 13, 2013; or (c) recognize that the President, in the exercise of his appointment powers and in line with his power of supervision over the ARMM, can appoint interim OICs to hold the vacated positions in the ARMM regional government upon the expiration of their terms. We have already established the unconstitutionality of the first two options, leaving us to consider the last available option. In this way, RA No. 10153 is in reality an interim measure, enacted to respond to the adjustment that synchronization requires. Given the context, we have to judge RA No. 10153 by the standard of reasonableness in responding to the challenges brought about by synchronizing the ARMM elections with the national and local elections. In other words, "given the plain unconstitutionality of providing for a holdover and the unavailability of constitutional possibilities for lengthening or shortening the term of the elected ARMM officials, is the choice of the President's power to appoint for a fixed and specific period as an interim measure, and as allowed under Section 16, Article VII of the Constitution an unconstitutional or unreasonable choice for Congress to make?" 33 STaHIC We admit that synchronization will temporarily disrupt the election process in a local community, the ARMM, as well as the community's choice of leaders. However, we have to keep in mind that the adoption of this measure is a matter of necessity in order to comply with a mandate that the Constitution itself has set out for us. Moreover, the implementation of the provisions of RA No. 10153 as an interim measure is comparable to the interim measures traditionally practiced when, for instance, the President appoints officials holding elective offices upon the creation of new local government units. The grant to the President of the power to appoint OICs in place of the elective members of the Regional Legislative Assembly is neither novel nor innovative. The power granted to the President, via RA No. 10153, to appoint members of the Regional Legislative Assembly is comparable to the power granted by BP 881 (the Omnibus Election Code) to the President to fill any vacancy for any cause in the Regional Legislative Assembly (then called the Sangguniang Pampook). 34 Executive is not bound by the principle of judicial courtesy The petitioners in G.R. No. 197280, in their Manifestation and Motion dated December 21, 2011, question the propriety of the appointment by the President of Mujiv Hataman as acting Governor and Bainon Karon as acting Vice Governor of the ARMM. They argue that since our previous decision was based on a close vote of 8-7, and given the numerous motions for reconsideration filed by the parties, the President, in recognition of the principle of judicial courtesy, should have refrained from implementing our decision until we have ruled with finality on this case. We find the petitioners' reasoning specious. cHATSI Firstly, the principle of judicial courtesy is based on the hierarchy of courts and applies only to lower courts in instances where, even if there is no writ of preliminary injunction or TRO issued by a higher court, it would be proper for a lower court to suspend its proceedings for practical and ethical considerations. 35 In other words, the principle of "judicial courtesy" applies where there is a strong probability that the issues before the higher court would be rendered moot and moribund as a result of the continuation of the proceedings in the lower court or court of origin. 36 Consequently, this principle cannot be applied to the President, who represents a co-equal branch of government. To suggest otherwise would be to disregard the principle of separation of powers, on which our whole system of government is founded upon. Secondly, the fact that our previous decision was based on a slim vote of 8-7 does not, and cannot, have the effect of making our ruling any less effective or binding. Regardless of how close the voting is, so long as there is concurrence of the majority of the members of the en banc who actually took part in the deliberations of the case, 37 a decision garnering only 8 votes out of 15 members is still a decision of the Supreme Court en banc and must be respected as such. The petitioners are, therefore, not in any position to speculate that, based on the voting, "the probability exists that their motion for reconsideration may be granted." 38 DTEHIA Similarly, the petitioner in G.R. No. 197282, in his Very Urgent Motion to Issue Clarificatory Resolution, argues that since motions for reconsideration were filed by the aggrieved parties challenging our October 18, 2011 decision in the present case, the TRO we initially issued on September 13, 2011 should remain subsisting and effective. He further argues that any attempt

by the Executive to implement our October 18, 2011 decision pending resolution of the motions for reconsideration "borders on disrespect if not outright insolence" 39 to this Court. In support of this theory, the petitioner cites Samad v. COMELEC, 40 where the Court held that while it had already issued a decision lifting the TRO, the lifting of the TRO is not yet final and executory, and can also be the subject of a motion for reconsideration. The petitioner also cites the minute resolution issued by the Court in Tolentino v. Secretary of Finance, 41 where the Court reproached the Commissioner of the Bureau of Internal Revenue for manifesting its intention to implement the decision of the Court, noting that the Court had not yet lifted the TRO previously issued. 42 aTIAES We agree with the petitioner that the lifting of a TRO can be included as a subject of a motion for reconsideration filed to assail our decision. It does not follow, however, that the TRO remains effective until after we have issued a final and executory decision, especially considering the clear wording of the dispositive portion of our October 18, 2011 decision, which states: WHEREFORE, premises considered, we DISMISS the consolidated petitions assailing the validity of RA No. 10153 for lack of merit, and UPHOLD the constitutionality of this law. We likewise LIFT the temporary restraining order we issued in our Resolution of September 13, 2011. No costs. 43 (emphases ours) In this regard, we note an important distinction between Tolentino and the present case. While it may be true that Tolentino and the present case are similar in that, in both cases, the petitions assailing the challenged laws were dismissed by the Court, an examination of the dispositive portion of the decision in Tolentino reveals that the Court did not categorically lift the TRO. In sharp contrast, in the present case, we expressly lifted the TRO issued on September 13, 2011. There is, therefore, no legal impediment to prevent the President from exercising his authority to appoint an acting ARMM Governor and Vice Governor as specifically provided for in RA No. 10153. Conclusion As a final point, we wish to address the bleak picture that the petitioner in G.R. No. 197282 presents in his motion, that our Decision has virtually given the President the power and authority to appoint 672,416 OICs in the event that the elections of barangay and Sangguniang Kabataan officials are postponed or cancelled. TCAHES We find this speculation nothing short of fear-mongering. This argument fails to take into consideration the unique factual and legal circumstances which led to the enactment of RA No. 10153. RA No. 10153 was passed in order to synchronize the ARMM elections with the national and local elections. In the course of synchronizing the ARMM elections with the national and local elections, Congress had to grant the President the power to appoint OICs in the ARMM, in light of the fact that: (a) holdover by the incumbent ARMM elective officials is legally impermissible; and (b) Congress cannot call for special elections and shorten the terms of elective local officials for less than three years. Unlike local officials, as the Constitution does not prescribe a term limit for barangay and Sangguniang Kabataan officials, there is no legal proscription which prevents these specific government officials from continuing in a holdover capacity should some exigency require the postponement of barangay or Sangguniang Kabataan elections. Clearly, these fears have neither legal nor factual basis to stand on. For the foregoing reasons, we deny the petitioners' motions for reconsideration. WHEREFORE, premises considered, we DENY with FINALITY the motions for reconsideration for lack of merit and UPHOLD the constitutionality of RA No. 10153. CEDScA SO ORDERED.

[G.R. No. 136921. April 17, 2001.] LORNA GUILLEN PESCA, petitioner, vs. ZOSIMO A. PESCA, respondent. Vigilia and Vigilia Law Offices for petitioner. Ernesto M. Tomameng for respondent. SYNOPSIS Petitioner sued respondent before the Regional Trial Court for the declaration of nullity of their marriage invoking psychological incapacity. The trial court rendered its decision declaring the marriage between petitioner and respondent to be null and void ab initio on the basis of psychological incapacity on the part of respondent and ordered the liquidation of the conjugal partnership. Respondent appealed the above decision to the Court of Appeals, contending that the trial court erred, particularly, in holding that there was legal basis to declare the marriage null and void and in denying his motion to reopen the case. The Court of Appeals reversed the decision of the trial court and declared the marriage between petitioner and respondent valid and subsisting. Petitioner, in her plea to the Court, would have the decision of the Court of Appeals reversed on the thesis that the doctrine enunciated in Santos vs. Court of Appeals, promulgated on 14 January 1995, as well as the guidelines set out in Republic vs. Court of Appeals and Molina, promulgated on 13 February 1997, should have no retroactive application and, on the assumption that the Molina ruling could be applied retroactively, the guidelines therein outlined should be taken to be merely advisory and not mandatory in nature. In any case, petitioner argued, the application of the Santos and Molina dicta should warrant only a remand of the case to the trial court for further proceedings and not its dismissal. DcTaEH The Supreme Court denied the petition and affirmed the decision of the Court of Appeals. In resolving petitioner's contention, the Court applied the "doctrine of stare decisis". The doctrine as ordained in Article 8 of the Civil Code declares that judicial decisions applying or interpreting the law shall form part of the legal system of the Philippines. The rule follows the settled legal maxim "legis interpretado legis vim obtinet" that the interpretation placed upon the written law by a competent court has the force of law. The interpretation or construction placed by the courts establishes the contemporaneous legislative intent of the law. The latter as so interpreted and construed would thus constitute a part of that law as of the date the statute is enacted. It is only when a prior ruling of the Court finds itself later overruled, and a different view is adopted, that the new doctrine may have to be applied prospectively in favor of parties who have relied on the old doctrine and have acted in good faith in accordance therewith under the familiar rule of "lex prospicit, non respicit". In the case at bar, the phrase "psychological incapacity", borrowed from Canon Law, is an entirely novel provision in our statute books, and, until the relatively recent enactment of the Family Code, the concept has escaped jurisprudential attention. It is in Santos vs. Court of Appeals when, for the first time, the Court has given life to the term. Republic vs. Court of Appeals and Molina, that followed, has additionally provided procedural guidelines to assist the courts and the parties in trying cases for annulment of marriages grounded on psychological incapacity. The Court, therefore, concluded that the Molina doctrine has strengthened, not overturned, the Santos doctrine. The Court also opined that petitioner has utterly failed, both in her allegations in the complaint and in her evidence, to make out a case of psychological incapacity on the part of respondent so as to warrant a declaration of nullity of the marriage. The Court stressed that the alleged emotional immaturity and irresponsibility of respondent, invoked by petitioner, is not synonymous with psychological incapacity. SYLLABUS 1. CIVIL LAW; DOCTRINE OF "STARE DECISIS"; EXPLAINED. The "doctrine of stare decisis", ordained in Article 8 of the Civil Code, expresses that judicial decisions applying or interpreting the law shall form part of the legal system of the Philippines. The rule follows the settled legal maxim "legis interpretado legis vim obtinet" that the interpretation placed upon the written law by a competent court has the force of law. The interpretation or construction placed by the courts establishes the contemporaneous legislative intent of the law. The latter as so interpreted and construed would thus constitute a part of that law as of the date the statute is enacted. It is only when a prior ruling of this Court finds itself later overruled, and a different view is adopted, that the new doctrine may have to be applied prospectively in favor of parties who have relied on the old doctrine and have acted in good faith in accordance therewith under the familiar rule of "lex prospicit, non respicit". TSAHIa

2. ID.; FAMILY CODE; DECLARATION OF NULLITY OF MARRIAGE BY REASON OF PSYCHOLOGICAL INCAPACITY; EMOTIONAL IMMATURITY AND IRRESPONSIBILITY CANNOT BE EQUATED WITH PSYCHOLOGICAL INCAPACITY. The phrase "psychological incapacity", borrowed from Canon Law, is an entirely novel provision in our statute books, and, until the relatively recent enactment of the Family Code, the concept has escaped jurisprudential attention. It is in Santos when, for the first time, the Court has given life to the term. Molina, that followed, has additionally provided procedural guidelines to assist the courts and the parties in trying cases for annulment of marriages grounded on psychological incapacity. Molina has strengthened, not overturned, Santos. At all events, petitioner has utterly failed, both in her allegations in the complaint and in her evidence, to make out a case of psychological incapacity on the part of respondent, let alone at the time of solemnization of the contract, so as to warrant a declaration of nullity of the marriage. Emotional immaturity and irresponsibility, invoked by her, cannot be equated with psychological incapacity. The Court reiterates its reminder that marriage is an inviolable social institution and the foundation of the family that the State cherishes and protects. While the Court commiserates with petitioner in her unhappy marital relationship with respondent, totally terminating that relationship, however, may not necessarily be the fitting denouement to it. In these cases, the law has not quite given up, neither should we. CIDcHA DECISION VITUG, J p: Submitted for review is the decision of the Court of Appeals, promulgated on 27 May 1998, in C.A. G.R. CV No 52374, reversing the decision of the Regional Trial Court ("RTC") of Caloocan City, Branch 130, which has declared the marriage between petitioner and respondent to be null and void ab initio on the ground of psychological incapacity on the part of respondent. EDACSa Petitioner Lorna G. Pesca and respondent Zosimo A. Pesca first met sometime in 1975 while on board an inter-island vessel bound for Bacolod City. After a whirlwind courtship, they got married on 03 March 1975. Initially, the young couple did not live together as petitioner was still a student in college and respondent, a seaman, had to leave the country on board an oceangoing vessel barely a month after the marriage. Six months later, the young couple established their residence in Quezon City until they were able to build their own house in Caloocan City where they finally resided. It was blissful marriage for the couple during the two months of the year that they could stay together when respondent was on vacation. The union begot four children, 19-year old Ruhem, 17-year old Rez, 11-year old Ryan, and 9-year-old Richie. It started in 1988, petitioner said, when she noticed that respondent surprisingly showed signs of "psychological incapacity" to perform his marital covenant. His "true color" of being an emotionally immature and irresponsible husband became apparent. He was cruel and violent. He was a habitual drinker, staying with friends daily from 4:00 o'clock in the afternoon until 1:00 o'clock in the morning. When cautioned to stop or, to at least, minimize his drinking, respondent would beat, slap and kick her. At one time, he chased petitioner with a loaded shotgun and threatened to kill her in the presence of the children. The children themselves were not spared from physical violence. Finally, on 19 November 1992, petitioner and her children left the conjugal abode to live in the house of her sister in Quezon City as they could no longer bear his violent ways. Two months later, petitioner decided to forgive respondent, and she returned home to give him a chance to change. But, to her dismay, things did not so turn out as expected. Indeed, matters became worse. On the morning of 22 March 1994, about eight o'clock, respondent assaulted petitioner for about half an hour in the presence of the children. She was battered black and blue. She submitted herself to medical examination at the Quezon City General Hospital, which diagnosed her injuries as contusions and abrasions. Petitioner filed a complaint with the barangay authorities, and a case was filed against respondent for slight physical injuries. He was convicted by the Metropolitan Trial Court of Caloocan City and sentenced to eleven days of imprisonment. This time, petitioner and her children left the conjugal home for good and stayed with her sister. Eventually, they decided to rent an apartment. Petitioner sued respondent before the Regional Trial Court for the declaration of nullity of their marriage invoking psychological incapacity. Petitioner likewise sought the custody of her minor children and prayed for support pendente lite. Summons, together with a copy of the complaint, was served on respondent on 25 April 1994 by personal service by the sheriff. As respondent failed to file an answer or to enter his appearance within the reglementary period, the trial court

ordered the city prosecutor to look into a possible collusion between the parties. Prosecutor Rosa C. Reyes, on 03 August 1994, submitted her report to the effect that she found no evidence to establish that there was collusion between the parties. On 11 January 1995, respondent belatedly filed, without leave of court, an answer, and the same, although filed late, was admitted by the court. In his answer, respondent admitted the fact of his marriage with petitioner and the birth of their children. He also confirmed the veracity of Annex "A" of the complaint which listed the conjugal property. Respondent vehemently denied, however, the allegation that he was psychologically incapacitated. On 15 November 1995, following hearings conducted by it, the trial court rendered its decision declaring the marriage between petitioner and respondent to be null and void ab initio on the basis of psychological incapacity on the part of respondent and ordered the liquidation of the conjugal partnership. Respondent appealed the above decision to the Court of Appeals, contending that the trial court erred, particularly, in holding that there was legal basis to declare the marriage null and void and in denying his motion to reopen the case. cDCSTA The Court of Appeals reversed the decision of the trial court and declared the marriage between petitioner and responder valid and subsisting. The appellate court said: "Definitely the appellee has not established the following: That the appellant showed signs of mental incapacity as would cause him to be truly incognizant of the basic marital covenant, as so provided for in Article 68 of the Family Code; that the incapacity is grave, has preceded the marriage and is incurable; that his incapacity to meet his marital responsibility is because of a psychological, not physical illness; that the root cause of the incapacity has been identified medically or clinically, and has been proven by an expert; and that the incapacity is permanent and incurable in nature. "The burden of proof to show the nullity of marriage lies in the plaintiff and any doubt should be resolved in favor of the existence and continuation of the marriage and against its dissolution and nullity." 1 Petitioner, in her plea to this Court, would have the decision of the Court of Appeals reversed on the thesis that the doctrine enunciated in Santos vs. Court of Appeals, 2 promulgated on 14 January 1995, as well as the guidelines set out in Republic vs. Court of Appeals and Molina, 3 promulgated on 13 February 1997, should have no retroactive application and, on the assumption that the Molina ruling could be applied retroactively, the guidelines therein outlined should be taken to be merely advisory and not mandatory in nature. In any case, petitioner argues, the application of the Santos and Molina dicta should warrant only a remand of the case to the trial court for further proceedings and not its dismissal. Be that as it may, respondent submits, the appellate court did not err in its assailed decision for there is absolutely no evidence that has been shown to prove psychological incapacity on his part as the term has been so defined in Santos. Indeed, there is no merit in the petition. The term "psychological incapacity," as a ground for the declaration of nullity of a marriage under Article 36 of the Family Code, has been explained by the Court in Santos and reiterated in Molina. The Court, in Santos, concluded: "It should be obvious, looking at all the foregoing disquisitions, including, and most importantly, the deliberations of the Family Code Revision Committee itself, that the use of the phrase 'psychological incapacity' under Article 36 of the Code has not been meant to comprehend all such possible cases of psychoses as, likewise mentioned by some ecclesiastical authorities, extremely low intelligence, immaturity, and like circumstances (cited in Fr. Artemio Balumad's 'Void and Voidable Marriages in the Family Code and their Parallels in Canon Law,' quoting from the Diagnostic Statistical Manuel of Mental Disorder by the American Psychiatric Association; Edward Hudson's 'Handbook II for Marriage Nullity Cases'). Article 36 of the Family Code cannot be taken and construed independently of, but must stand in conjunction with, existing precepts in our law on marriage. Thus correlated, 'psychological incapacity' should refer to no less than a mental (not physical) incapacity that causes a party to be truly incognizant of the basic marital covenants that concomitantly must be assumed and discharged by the parties to the marriage which, as so expressed by Article 68 of the Family Code, include their mutual obligations to live together, observe love, respect and fidelity and render help and support. There is hardly any doubt that the intendment of the law has been to confine the meaning of 'psychological incapacity' to the most serious cases of personality disorders clearly demonstrative of an utter insensitivity or inability to give meaning and significance to the marriage. This psychologic condition must exist at the time the marriage is celebrated." DTIACH

The "doctrine of stare decisis," ordained in Article 8 of the Civil Code, expresses that judicial decisions applying or interpreting the law shall form part of the legal system of the Philippines. The rule follows the settled legal maxim "legis interpretado legis vim obtinet" that the interpretation placed upon the written law by a competent court has the force of law. 4 The interpretation or construction placed by the courts establishes the contemporaneous legislative intent of the law. The latter as so interpreted and construed would thus constitute a part of that law as of the date the statute is enacted. It is only when a prior ruling of this Court finds itself later overruled, and a different view is adopted, that the new doctrine may have to be applied prospectively in favor of parties who have relied on the old doctrine and have acted in good faith in accordance therewith 5 under the familiar rule of "lex prospicit, non respicit." The phrase "psychological incapacity," borrowed from Canon law, is an entirely novel provision in our statute books, and, until the relatively recent enactment of the Family Code, the concept has escaped jurisprudential attention. It is in Santos when, for the first time, the Court has given life to the term. Molina, that followed, has additionally provided procedural guidelines to assist the courts and the parties in trying cases for annulment of marriages grounded on psychological incapacity. Molina has strengthened, not overturned, Santos. At all events, petitioner has utterly failed, both in her allegations in the complaint and in her evidence, to make out a case of psychological incapacity on the part of respondent, let alone at the time of solemnization of the contract, so as to warrant a declaration of nullity of the marriage. Emotional immaturity and irresponsibility, invoked by her, cannot be equated with psychological incapacity. The Court reiterates its reminder that marriage is an inviolable social institution and the foundation of the family 6 that the State cherishes and protects. While the Court commiserates with petitioner in her unhappy marital relationship with respondent, totally terminating that relationship, however, may not necessarily be the fitting denouement to it. In these cases, the law has not quite given up, neither should we. aTAEHc WHEREFORE, the herein petition is DENIED. No Costs. SO ORDERED.

EN BANC [G.R. No. 191002. April 20, 2010.] ARTURO M. DE CASTRO, petitioner, vs. JUDICIAL AND BAR COUNCIL (JBC) and PRESIDENT GLORIA MACAPAGAL-ARROYO, respondents. [G.R. No. 191032. April 20, 2010.] JAIME N. SORIANO, petitioner, vs. JUDICIAL AND BAR COUNCIL (JBC), respondent. [G.R. No. 191057. April 20, 2010.] PHILIPPINE CONSTITUTION ASSOCIATION (PHILCONSA), petitioner, vs. JUDICIAL AND BAR COUNCIL (JBC), respondent. [A.M. No. 10-2-5-SC. April 20, 2010.] IN RE APPLICABILITY OF SECTION 15, ARTICLE VII OF THE CONSTITUTION TO APPOINTMENTS TO THE JUDICIARY, ESTELITO P. MENDOZA, petitioner, [G.R. No. 191149. April 20, 2010.] JOHN G. PERALTA, petitioner, vs. JUDICIAL AND BAR COUNCIL (JBC), respondent. PETER IRVING CORVERA; CHRISTIAN ROBERT S. LIM; ALFONSO V. TAN, JR.; NATIONAL UNION OF PEOPLE'S LAWYERS; MARLOU B. UBANO; INTEGRATED BAR OF THE PHILIPPINES-DAVAO DEL SUR CHAPTER, represented by its Immediate Past President, ATTY. ISRAELITO P. TORREON, and the latter in his own personal capacity as a MEMBER of the PHILIPPINE BAR; MITCHELL JOHN L. BOISER; BAGONG ALYANSANG BAYAN (BAYAN) CHAIRMAN DR. CAROLINA P. ARAULLO; BAYAN SECRETARY GENERAL RENATO M. REYES, JR.; CONFEDERATION FOR UNITY, RECOGNITION AND ADVANCEMENT OF GOVERNMENT EMPLOYEES (COURAGE) CHAIRMAN FERDINAND GAITE; KALIPUNAN NG DAMAYANG MAHIHIRAP (KADAMAY) SECRETARY GENERAL GLORIA ARELLANO; ALYANSA NG NAGKAKAISANG KABATAAN NG SAMBAYANAN PARA SA KAUNLARAN (ANAKBAYAN) CHAIRMAN KEN LEONARD RAMOS; TAYO ANG PAG-ASA CONVENOR ALVIN PETERS; LEAGUE OF FILIPINO STUDENTS (LFS) CHAIRMAN JAMES MARK TERRY LACUANAN RIDON; NATIONAL UNION OF STUDENTS OF THE PHILIPPINES (NUSP) CHAIRMAN EINSTEIN RECEDES; COLLEGE EDITORS GUILD OF THE PHILIPPINES (CEGP) CHAIRMAN VIJAE ALQUISOLA; and STUDENT CHRISTIAN MOVEMENT OF THE PHILIPPINES (SCMP) CHAIRMAN MA. CRISTINA ANGELA GUEVARRA; WALDEN F. BELLO and LORETTA ANN P. ROSALES; WOMEN TRIAL LAWYERS ORGANIZATION OF THE PHILIPPINES, represented by YOLANDA QUISUMBING-JAVELLANA; BELLEZA ALOJADO DEMAISIP; TERESITA GANDIONCO-OLEDAN; MA. VERENA KASILAG-VILLANUEVA; MARILYN STA. ROMANA; LEONILA DE JESUS; and GUINEVERE DE LEON; AQUILINO Q. PIMENTEL, JR., intervenors. [G.R. No. 191342. April 20, 2010.]

ATTY. AMADOR Z. TOLENTINO, JR., (IBP Governor-Southern Luzon), and ATTY. ROLAND B. INTING (IBP Governor-Eastern Visayas), petitioners, vs. JUDICIAL AND BAR COUNCIL (JBC), respondent. [G.R. No. 191420. April 20, 2010.] PHILIPPINE BAR ASSOCIATION, INC., petitioner, vs. JUDICIAL AND BAR COUNCIL and HER EXCELLENCY GLORIA MACAPAGAL-ARROYO, respondents. RESOLUTION BERSAMIN, J p: On March 17, 2010, the Court promulgated its decision, holding: WHEREFORE, the Court: 1. Dismisses the petitions for certiorari and mandamus in G.R. No. 191002 and G.R. No. 191149, and the petition for mandamus in G.R. No. 191057 for being premature; ICHDca 2. 3. Dismisses the petitions for prohibition in G.R. No. 191032 and G.R. No. 191342 for lack of merit; and Grants the petition in A.M. No. 10-2-5-SC and, accordingly, directs the Judicial and Bar Council:

(a) To resume its proceedings for the nomination of candidates to fill the vacancy to be created by the compulsory retirement of Chief Justice Reynato S. Puno by May 17, 2010; (b) To prepare the short list of nominees for the position of Chief Justice;

(c) To submit to the incumbent President the short list of nominees for the position of Chief Justice on or before May 17, 2010; and (d) To continue its proceedings for the nomination of candidates to fill other vacancies in the Judiciary and submit to the President the short list of nominees corresponding thereto in accordance with this decision. SO ORDERED. CHDaAE MOTIONS FOR RECONSIDERATION Petitioners Jaime N. Soriano (G.R. No. 191032), Amador Z. Tolentino and Roland B. Inting (G.R. No. 191342), and Philippine Bar Association (G.R. No. 191420), as well as intervenors Integrated Bar of the Philippines-Davao del Sur (IBP-Davao del Sur, et al.); Christian Robert S. Lim; Peter Irving Corvera; Bagong Alyansang Bayan and others (BAYAN, et al.); Alfonso V. Tan, Jr.; the Women Trial Lawyers Organization of the Philippines (WTLOP); Marlou B. Ubano; Mitchell John L. Boiser; and Walden F. Bello and Loretta Ann P. Rosales (Bello, et al.), filed their respective motions for reconsideration. Also filing a motion for reconsideration was Senator Aquilino Q. Pimentel, Jr., whose belated intervention was allowed. We summarize the arguments and submissions of the various motions for reconsideration, in the aforegiven order: Soriano 1. The Court has not squarely ruled upon or addressed the issue of whether or not the power to designate the Chief Justice belonged to the Supreme Court en banc. 2. The Mendoza petition should have been dismissed, because it sought a mere declaratory judgment and did not involve a justiciable controversy. EHcaAI 3. All Justices of the Court should participate in the next deliberations. The mere fact that the Chief Justice sits as ex officio head of the JBC should not prevail over the more compelling state interest for him to participate as a Member of the Court.

Tolentino and Inting 1. A plain reading of Section 15, Article VII does not lead to an interpretation that exempts judicial appointments from the express ban on midnight appointments. 2. exists. In excluding the Judiciary from the ban, the Court has made distinctions and has created exemptions when none

3. The ban on midnight appointments is placed in Article VII, not in Article VIII, because it limits an executive, not a judicial, power. 4. Resort to the deliberations of the Constitutional Commission is superfluous, and is powerless to vary the terms of the clear prohibition. 5. The Court has given too much credit to the position taken by Justice Regalado. Thereby, the Court has raised the Constitution to the level of a venerated text whose intent can only be divined by its framers as to be outside the realm of understanding by the sovereign people that ratified it. SECIcT 6. 7. Valenzuela should not be reversed. The petitioners, as taxpayers and lawyers, have the clear legal standing to question the illegal composition of the JBC.

Philippine Bar Association 1. The Court's strained interpretation of the Constitution violates the basic principle that the Court should not formulate a rule of constitutional law broader than what is required by the precise facts of the case. 2. Considering that Section 15, Article VII is clear and straightforward, the only duty of the Court is to apply it. The provision expressly and clearly provides a general limitation on the appointing power of the President in prohibiting the appointment of any person to any position in the Government without any qualification and distinction. 3. The Court gravely erred in unilaterally ignoring the constitutional safeguard against midnight appointments. cICHTD 4. The Constitution has installed two constitutional safeguards: the prohibition against midnight appointments, and the creation of the JBC. It is not within the authority of the Court to prefer one over the other, for the Court's duty is to apply the safeguards as they are, not as the Court likes them to be. 5. The Court has erred in failing to apply the basic principles of statutory construction in interpreting the Constitution.

6. The Court has erred in relying heavily on the title, chapter or section headings, despite precedents on statutory construction holding that such headings carried very little weight. 7. The Constitution has provided a general rule on midnight appointments, and the only exception is that on temporary appointments to executive positions. 8. The Court has erred in directing the JBC to resume the proceedings for the nomination of the candidates to fill the vacancy to be created by the compulsory retirement of Chief Justice Puno with a view to submitting the list of nominees for Chief Justice to President Arroyo on or before May 17, 2010. The Constitution grants the Court only the power of supervision over the JBC; hence, the Court cannot tell the JBC what to do, how to do it, or when to do it, especially in the absence of a real and justiciable case assailing any specific action or inaction of the JBC. cCSDTI 9. The Court has engaged in rendering an advisory opinion and has indulged in speculations.

10. The constitutional ban on appointments being already in effect, the Court's directing the JBC to comply with the decision constitutes a culpable violation of the Constitution and the commission of an election offense.

11. banc.

The Court cannot reverse on the basis of a secondary authority a doctrine unanimously formulated by the Court en

12. The practice has been for the most senior Justice to act as Chief Justice whenever the incumbent is indisposed. Thus, the appointment of the successor Chief Justice is not urgently necessary. 13. The principal purpose for the ban on midnight appointments is to arrest any attempt to prolong the outgoing President's powers by means of proxies. The attempt of the incumbent President to appoint the next Chief Justice is undeniably intended to perpetuate her power beyond her term of office. IBP-Davao del Sur, et al. 1. Its language being unambiguous, Section 15, Article VII of the Constitution applies to appointments to the Judiciary. Hence, no cogent reason exists to warrant the reversal of the Valenzuela pronouncement. ASHICc 2. Section 16, Article VII of the Constitution provides for presidential appointments to the Constitutional Commissions and the JBC with the consent of the Commission on Appointments. Its phrase "other officers whose appointments are vested in him in this Constitution" is enough proof that the limitation on the appointing power of the President extends to appointments to the Judiciary. Thus, Section 14, Section 15, and Section 16 of Article VII apply to all presidential appointments in the Executive and Judicial Branches of the Government. 3. Lim 1. There is no justiciable controversy that warrants the Court's exercise of judicial review. There is no evidence that the framers of the Constitution abhorred the idea of an Acting Chief Justice in all cases.

2. The election ban under Section 15, Article VII applies to appointments to fill a vacancy in the Court and to other appointments to the Judiciary. 3. The creation of the JBC does not justify the removal of the safeguard under Section 15 of Article VII against midnight appointments in the Judiciary. IDAaCc Corvera 1. The Court's exclusion of appointments to the Judiciary from the Constitutional ban on midnight appointments is based on an interpretation beyond the plain and unequivocal language of the Constitution. 2. The intent of the ban on midnight appointments is to cover appointments in both the Executive and Judicial Departments. The application of the principle of verba legis (ordinary meaning) would have obviated dwelling on the organization and arrangement of the provisions of the Constitution. If there is any ambiguity in Section 15, Article VII, the intent behind the provision, which is to prevent political partisanship in all branches of the Government, should have controlled. 3. A plain reading is preferred to a contorted and strained interpretation based on compartmentalization and physical arrangement, especially considering that the Constitution must be interpreted as a whole. 4. Resort to the deliberations or to the personal interpretation of the framers of the Constitution should yield to the plain and unequivocal language of the Constitution. AHaETS 5. There is no sufficient reason for reversing Valenzuela, a ruling that is reasonable and in accord with the Constitution.

BAYAN, et al. 1. The Court erred in granting the petition in A.M. No. 10-2-5-SC, because the petition did not present a justiciable controversy. The issues it raised were not yet ripe for adjudication, considering that the office of the Chief Justice was not yet vacant and that the JBC itself has yet to decide whether or not to submit a list of nominees to the President.

2.

The collective wisdom of Valenzuela Court is more important and compelling than the opinion of Justice Regalado.

3. In ruling that Section 15, Article VII is in conflict with Section 4 (1), Article VIII, the Court has violated the principle of ut magis valeat quam pereat (which mandates that the Constitution should be interpreted as a whole, such that any conflicting provisions are to be harmonized as to fully give effect to all). There is no conflict between the provisions; they complement each other. 4. The form and structure of the Constitution's titles, chapters, sections, and draftsmanship carry little weight in statutory construction. The clear and plain language of Section 15, Article VII precludes interpretation. CHEIcS Tan, Jr. 1. The factual antecedents do not present an actual case or controversy. The clash of legal rights and interests in the present case are merely anticipated. Even if it is anticipated with certainty, no actual vacancy in the position of the Chief Justice has yet occurred. 2. The ruling that Section 15, Article VII does not apply to a vacancy in the Court and the Judiciary runs in conflict with long standing principles and doctrines of statutory construction. The provision admits only one exception, temporary appointments in the Executive Department. Thus, the Court should not distinguish, because the law itself makes no distinction. 3. Valenzuela was erroneously reversed. The framers of the Constitution clearly intended the ban on midnight appointments to cover the members of the Judiciary. Hence, giving more weight to the opinion of Justice Regalado to reverse the en banc decision in Valenzuela was unwarranted. DTEcSa 4. Section 15, Article VII is not incompatible with Section 4 (1), Article VIII. The 90-day mandate to fill any vacancy lasts until August 15, 2010, or a month and a half after the end of the ban. The next President has roughly the same time of 45 days as the incumbent President (i.e., 44 days) within which to scrutinize and study the qualifications of the next Chief Justice. Thus, the JBC has more than enough opportunity to examine the nominees without haste and political uncertainty. 5. When the constitutional ban is in place, the 90-day period under Section 4 (1), Article VIII is suspended.

6. There is no basis to direct the JBC to submit the list of nominees on or before May 17, 2010. The directive to the JBC sanctions a culpable violation of the Constitution and constitutes an election offense. 7. There is no pressing necessity for the appointment of a Chief Justice, because the Court sits en banc, even when it acts as the sole judge of all contests relative to the election, returns and qualifications of the President and Vice-President. Fourteen other Members of the Court can validly comprise the Presidential Electoral Tribunal. CacEID WTLOP 1. The Court exceeded its jurisdiction in ordering the JBC to submit the list of nominees for Chief Justice to the President on or before May 17, 2010, and to continue its proceedings for the nomination of the candidates, because it granted a relief not prayed for; imposed on the JBC a deadline not provided by law or the Constitution; exercised control instead of mere supervision over the JBC; and lacked sufficient votes to reverse Valenzuela. 2. In interpreting Section 15, Article VII, the Court has ignored the basic principle of statutory construction to the effect that the literal meaning of the law must be applied when it is clear and unambiguous; and that we should not distinguish where the law does not distinguish. 3. There is no urgency to appoint the next Chief Justice, considering that the Judiciary Act of 1948 already provides that the power and duties of the office devolve on the most senior Associate Justice in case of a vacancy in the office of the Chief Justice. IDCcEa Ubano 1. The language of Section 15, Article VII, being clear and unequivocal, needs no interpretation.

2. The Constitution must be construed in its entirety, not by resort to the organization and arrangement of its provisions. 3. The opinion of Justice Regalado is irrelevant, because Section 15, Article VII and the pertinent records of the Constitutional Commission are clear and unambiguous. 4. The Court has erred in ordering the JBC to submit the list of nominees to the President by May 17, 2010 at the latest, because no specific law requires the JBC to submit the list of nominees even before the vacancy has occurred. Boiser 1. Under Section 15, Article VII, the only exemption from the ban on midnight appointments is the temporary appointment to an executive position. The limitation is in keeping with the clear intent of the framers of the Constitution to place a restriction on the power of the outgoing Chief Executive to make appointments. IcEACH 2. To exempt the appointment of the next Chief Justice from the ban on midnight appointments makes the appointee beholden to the outgoing Chief Executive, and compromises the independence of the Chief Justice by having the outgoing President be continually influential. 3. The Court's reversal of Valenzuela without stating the sufficient reason violates the principle of stare decisis.

Bello, et al. 1. Section 15, Article VII does not distinguish as to the type of appointments an outgoing President is prohibited from making within the prescribed period. Plain textual reading and the records of the Constitutional Commission support the view that the ban on midnight appointments extends to judicial appointments. 2. Supervision of the JBC by the Court involves oversight. The subordinate subject to oversight must first act not in accord with prescribed rules before the act can be redone to conform to the prescribed rules. 3. The Court erred in granting the petition in A.M. No. 10-2-5-SC, because the petition did not present a justiciable controversy. HAEDCT Pimentel 1. Any constitutional interpretative changes must be reasonable, rational, and conformable to the general intent of the Constitution as a limitation to the powers of Government and as a bastion for the protection of the rights of the people. Thus, in harmonizing seemingly conflicting provisions of the Constitution, the interpretation should always be one that protects the citizenry from an ever expanding grant of authority to its representatives. 2. The decision expands the constitutional powers of the President in a manner totally repugnant to republican constitutional democracy, and is tantamount to a judicial amendment of the Constitution without proper authority. COMMENTS The Office of the Solicitor General (OSG) and the JBC separately represent in their respective comments, thus: OSG 1. cdphil 2. 3. The JBC may be compelled to submit to the President a short list of its nominees for the position of Chief Justice.

The incumbent President has the power to appoint the next Chief Justice. Section 15, Article VII does not apply to the Judiciary.

4. The principles of constitutional construction favor the exemption of the Judiciary from the ban on midnight appointments.

5. JBC

The Court has the duty to consider and resolve all issues raised by the parties as well as other related matters.

1. The consolidated petitions should have been dismissed for prematurity, because the JBC has not yet decided at the time the petitions were filed whether the incumbent President has the power to appoint the new Chief Justice, and because the JBC, having yet to interview the candidates, has not submitted a short list to the President. 2. The statement in the decision that there is a doubt on whether a JBC short list is necessary for the President to appoint a Chief Justice should be struck down as bereft of constitutional and legal basis. The statement undermines the independence of the JBC. aTADcH 3. The JBC will abide by the final decision of the Court, but in accord with its constitutional mandate and its implementing rules and regulations. For his part, petitioner Estelito P. Mendoza (A.M. No. 10-2-5-SC) submits his comment even if the OSG and the JBC were the only ones the Court has required to do so. He states that the motions for reconsideration were directed at the administrative matter he initiated and which the Court resolved. His comment asserts: 1. The grounds of the motions for reconsideration were already resolved by the decision and the separate opinion.

2. The administrative matter he brought invoked the Court's power of supervision over the JBC as provided by Section 8 (1), Article VIII of the Constitution, as distinguished from the Court's adjudicatory power under Section 1, Article VIII. In the former, the requisites for judicial review are not required, which was why Valenzuela was docketed as an administrative matter. Considering that the JBC itself has yet to take a position on when to submit the short list to the proper appointing authority, it has effectively solicited the exercise by the Court of its power of supervision over the JBC. ISDHcT 3. To apply Section 15, Article VII to Section 4 (1) and Section 9, Article VIII is to amend the Constitution.

4. The portions of the deliberations of the Constitutional Commission quoted in the dissent of Justice Carpio Morales, as well as in some of the motions for reconsideration do not refer to either Section 15, Article VII or Section 4 (1), Article VIII, but to Section 13, Article VII (on nepotism). RULING We deny the motions for reconsideration for lack of merit, for all the matters being thereby raised and argued, not being new, have all been resolved by the decision of March 17, 2010. Nonetheless, the Court opts to dwell on some matters only for the purpose of clarification and emphasis. First: Most of the movants contend that the principle of stare decisis is controlling, and accordingly insist that the Court has erred in disobeying or abandoning Valenzuela. 1 The contention has no basis. Stare decisis derives its name from the Latin maxim stare decisis et non quieta movere, i.e., to adhere to precedent and not to unsettle things that are settled. It simply means that a principle underlying the decision in one case is deemed of imperative authority, controlling the decisions of like cases in the same court and in lower courts within the same jurisdiction, unless and until the decision in question is reversed or overruled by a court of competent authority. The decisions relied upon as precedents are commonly those of appellate courts, because the decisions of the trial courts may be appealed to higher courts and for that reason are probably not the best evidence of the rules of law laid down. 2 ADTEaI Judicial decisions assume the same authority as a statute itself and, until authoritatively abandoned, necessarily become, to the extent that they are applicable, the criteria that must control the actuations, not only of those called upon to abide by them, but also of those duty-bound to enforce obedience to them. 3 In a hierarchical judicial system like ours, the decisions of the higher courts bind the lower courts, but the courts of co-ordinate authority do not bind each other. The one highest court does not bind itself, being invested with the innate authority to rule according to its best lights. 4

The Court, as the highest court of the land, may be guided but is not controlled by precedent. Thus, the Court, especially with a new membership, is not obliged to follow blindly a particular decision that it determines, after re-examination, to call for a rectification. 5 The adherence to precedents is strict and rigid in a common-law setting like the United Kingdom, where judges make law as binding as an Act of Parliament. 6 But ours is not a common-law system; hence, judicial precedents are not always strictly and rigidly followed. A judicial pronouncement in an earlier decision may be followed as a precedent in a subsequent case only when its reasoning and justification are relevant, and the court in the latter case accepts such reasoning and justification to be applicable to the case. The application of the precedent is for the sake of convenience and stability. For the intervenors to insist that Valenzuela ought not to be disobeyed, or abandoned, or reversed, and that its wisdom should guide, if not control, the Court in this case is, therefore, devoid of rationality and foundation. They seem to conveniently forget that the Constitution itself recognizes the innate authority of the Court en banc to modify or reverse a doctrine or principle of law laid down in any decision rendered en banc or in division. 7 AIaDcH Second: Some intervenors are grossly misleading the public by their insistence that the Constitutional Commission extended to the Judiciary the ban on presidential appointments during the period stated in Section 15, Article VII. The deliberations that the dissent of Justice Carpio Morales quoted from the records of the Constitutional Commission did not concern either Section 15, Article VII or Section 4 (1), Article VIII, but only Section 13, Article VII, a provision on nepotism. The records of the Constitutional Commission show that Commissioner Hilario G. Davide, Jr. had proposed to include judges and justices related to the President within the fourth civil degree of consanguinity or affinity among the persons whom the President might not appoint during his or her tenure. In the end, however, Commissioner Davide, Jr. withdrew the proposal to include the Judiciary in Section 13, Article VII "(t)o avoid any further complication," 8 such that the final version of the second paragraph of Section 13, Article VII even completely omits any reference to the Judiciary, to wit: Section 13. ...

The spouse and relatives by consanguinity or affinity within the fourth civil degree of the President shall not during his tenure be appointed as Members of the Constitutional Commissions, or the Office of the Ombudsman, or as Secretaries, Undersecretaries, chairmen or heads of bureaus or offices, including government-owned or controlled corporations and their subsidiaries. ASTIED Last: The movants take the majority to task for holding that Section 15, Article VII does not apply to appointments in the Judiciary. They aver that the Court either ignored or refused to apply many principles of statutory construction. The movants gravely err in their posture, and are themselves apparently contravening their avowed reliance on the principles of statutory construction. For one, the movants, disregarding the absence from Section 15, Article VII of the express extension of the ban on appointments to the Judiciary, insist that the ban applied to the Judiciary under the principle of verba legis. That is selfcontradiction at its worst. Another instance is the movants' unhesitating willingness to read into Section 4 (1) and Section 9, both of Article VIII, the express applicability of the ban under Section 15, Article VII during the period provided therein, despite the silence of said provisions thereon. Yet, construction cannot supply the omission, for doing so would generally constitute an encroachment upon the field of the Constitutional Commission. Rather, Section 4 (1) and Section 9 should be left as they are, given that their meaning is clear and explicit, and no words can be interpolated in them. 9 Interpolation of words is unnecessary, because the law is more than likely to fail to express the legislative intent with the interpolation. In other words, the addition of new words may alter the thought intended to be conveyed. And, even where the meaning of the law is clear and sensible, either with or without the omitted word or words, interpolation is improper, because the primary source of the legislative intent is in the language of the law itself. 10 AIcECS Thus, the decision of March 17, 2010 has fittingly observed: Had the framers intended to extend the prohibition contained in Section 15, Article VII to the appointment of Members of the Supreme Court, they could have explicitly done so. They could not have ignored the meticulous ordering of the provisions. They would have easily and surely written the prohibition made explicit in Section 15, Article VII as being equally applicable

to the appointment of Members of the Supreme Court in Article VIII itself, most likely in Section 4 (1), Article VIII. That such specification was not done only reveals that the prohibition against the President or Acting President making appointments within two months before the next presidential elections and up to the end of the President's or Acting President's term does not refer to the Members of the Supreme Court. We cannot permit the meaning of the Constitution to be stretched to any unintended point in order to suit the purposes of any quarter. cSDIHT FINAL WORD It has been insinuated as part of the polemics attendant to the controversy we are resolving that because all the Members of the present Court were appointed by the incumbent President, a majority of them are now granting to her the authority to appoint the successor of the retiring Chief Justice. The insinuation is misguided and utterly unfair. The Members of the Court vote on the sole basis of their conscience and the merits of the issues. Any claim to the contrary proceeds from malice and condescension. Neither the outgoing President nor the present Members of the Court had arranged the current situation to happen and to evolve as it has. None of the Members of the Court could have prevented the Members composing the Court when she assumed the Presidency about a decade ago from retiring during her prolonged term and tenure, for their retirements were mandatory. Yet, she is now left with an imperative duty under the Constitution to fill up the vacancies created by such inexorable retirements within 90 days from their occurrence. Her official duty she must comply with. So must we ours who are tasked by the Constitution to settle the controversy. ACCORDINGLY, the motions for reconsideration are denied with finality. DTAIaH SO ORDERED.

[G.R. No. 188302. June 27, 2012.] NANCY L. TY, petitioner, vs. BANCO FILIPINO SAVINGS and MORTGAGE BANK, respondent. DECISION BRION, J p: We resolve the petition for review on certiorari, 1 filed by Nancy L. Ty (petitioner), to challenge the March 31, 2009 decision 2 and the June 10, 2009 resolution 3 of the Court of Appeals (CA) in CA-G.R. SP No. 107104. The CA decision dismissed the petitioner's petition for certiorari for lack of merit. The CA resolution denied the petitioner's subsequent motion for reconsideration. SEIcHa THE FACTUAL ANTECEDENTS Sometime in 1979, the Banco Filipino Savings and Mortgage Bank (respondent) wanted to purchase real properties as new branch sites for its expansion program. Since the General Banking Act 4 limits a bank's real estate holdings to no more than 50% of its capital assets, the respondent's Board of Directors decided to warehouse some of its existing properties and branch sites to allow more flexibility in the opening of branches, and to enable it to acquire new branch sites. 5 The petitioner, a major stockholder and a director of the respondent, persuaded two other major stockholders, Pedro Aguirre and his brother Tomas Aguirre, to organize and incorporate Tala Realty Services Corporation (Tala Realty) to hold and purchase real properties in trust for the respondent. 6 Subsequently, Remedios A. Dupasquier prodded her brother Tomas to endorse to her his shares in Tala Realty and she registered them in the name of her controlled corporation, Add International Services, Inc. 7 The petitioner, Remedios, and Pedro controlled Tala Realty through their respective nominees. 8 TDCaSE In implementing their trust agreement, the respondent sold to Tala Realty some of its properties. Tala Realty simultaneously leased to the respondent the properties for 20 years, renewable for another 20 years at the respondent's option with a right of first refusal in the event Tala Realty decides to sell them. 9 However, in August 1992, Tala Realty repudiated the trust, claimed the titles for itself, and demanded payment of rentals, deposits, and goodwill, with a threat to eject the respondent. 10 Thus, from 1995 to 1996, the respondent filed 17 complaints against Tala Realty, the petitioner, Pedro, Remedios, and their respective nominees for reconveyance of different properties with 17 Regional Trial Courts (RTCs) nationwide, including Civil Case No. 2506-MN before Branch 170 of the RTC of Malabon (Malabon case), subject of the present case. 11 The petitioner and her co-defendants moved to dismiss the Malabon case for forum shopping and litis pendentia, citing the 16 other civil cases filed in various courts 12 involving the same facts, issues, parties, and reliefs pleaded in the respondent's complaint. 13 DTEIaC The Malabon RTC denied the motion to dismiss, 14 finding no commonality in the 16 other civil cases since they involved different causes of action. The Malabon RTC also denied 15 the subsequent motions for reconsideration and for suspension of proceedings. 16 After the petitioner and her co-defendants filed their respective answers ad cautelam, 17 the petitioner filed a motion to hold proceedings in abeyance, 18 citing the pendency with this Court of G.R. No. 127611 19 that assailed the denial of their motion to dismiss Civil Case No. 4521 before the Batangas City RTC (Branch 84), and also prayed for a writ of prohibition to order the 17 RTC branches and the three CA divisions, where the same cases were pending, to desist from further proceeding with the trial of the cases. The Malabon RTC granted to hold proceedings in abeyance. 20 When the Malabon RTC denied 21 the respondent's motion for reconsideration, the respondent elevated its case to the CA via a Rule 65 petition for certiorari. 22 The CA initially dismissed the petition, 23 but on motion for reconsideration, it modified its ruling, setting aside the RTC's order to hold proceedings in abeyance for mootness, due to this Court's dismissal of G.R. No. 127611 for late filing. 24 aEAIDH

Subsequently, the respondent moved for pre-trial. 25 Tala Realty opposed the motion and filed again a motion to suspend proceedings, 26 citing the pendency with this Court of G.R. No. 132703, 27 a petition for certiorari that assailed the CA's affirmance 28 of the dismissal order of the Iloilo City RTC (Branch 28) in Civil Case No. 22493. 29 The petitioner filed her separate opposition to the respondent's motion for pre-trial and a motion to hold proceedings in abeyance, stating that after the dismissal of G.R. No. 127611, two other similar petitions have been elevated to this Court: (1) G.R. No. 130184, 30 involving the CA's reversal of the dismissal of Civil Case No. Q-95-24830 in the Quezon City RTC (Branch 91), and (2) G.R. No. 132703. 31 The Malabon RTC granted the motion, and again ordered to hold proceedings in abeyance. 32 Six years later, the Malabon RTC directed the parties' counsels to inform it of the status of the pending cases. 33 In her compliance, 34 the petitioner summarized this Court's rulings in the consolidated cases of G.R. Nos. 130184 and 139166, 35 and in G.R. No. 132703, 36 and reported on the other cases involving the same parties decided by this Court, such as G.R. Nos. 129887, 37 137980, 38 132051, 39 137533, 40 143263, 41 and 142672, 42 as well as the other related cases decided by this Court, i.e., G.R. Nos. 144700, 43 147997, 44 167255, 45 and 144705. 46 TSIaAc On the other hand, the respondent filed its compliance with motion to revive proceedings, 47 citing the Court's consolidated decision in G.R. Nos. 130184 and 139166, 48 and the decisions in G.R. Nos. 144700, 49 167255, 50 and 144705, 51 commonly holding that there existed no forum shopping, litis pendentia and res judicata among the respondent's reconveyance cases pending in the other courts of justice. In her comment to the respondent's motion to revive proceedings, 52 the petitioner argued that the proceedings should not be revived since all the reconveyance cases are grounded on the same theory of implied trust which this Court in G.R. No. 137533 53 found void for being illegal as it was a scheme to circumvent the 50% limitation on real estate holdings under the General Banking Act. Tala Realty, on the other hand, pointed out that it was the court's prerogative to suspend or not its proceedings pending the resolution of issues by another court, in order to avoid multiplicity of suits and prevent vexatious litigations. 54 TDcAaH THE RTC RULING In its May 6, 2008 order, the RTC granted the respondent's motion to revive proceedings, noting that res judicata is not applicable since there are independent causes of action for each of the properties sought to be recovered. 55 When the RTC denied 56 the petitioner's motion for reconsideration, 57 she elevated her case to the CA via a Rule 65 petition for certiorari, assailing the RTC orders. 58 THE CA RULING In its March 31, 2009 decision, the CA affirmed the RTC's orders. 59 It noted that res judicata does not apply since the issue of validity or enforceability of the trust agreement was raised in an ejectment case, not an action involving title or ownership, citing the Court's pronouncement in G.R. No. 144705 60 that G.R. No. 137533 61 does not put to rest all pending litigations involving the issues of ownership between the parties since it involved only an issue of de facto possession. HAICTD When the CA denied 62 her motion for reconsideration, 63 the petitioner filed the present petition. THE PETITION The petitioner argues that the CA erred in refusing to apply G.R. No. 137533 under the principle of res judicata by conclusiveness of judgment and stare decisis, and ignoring the November 26, 2007 minute resolution in G.R. No. 177865 64 and the April 7, 2009 consolidated decision in G.R. Nos. 130088, 131469, 155171, 155201, and 166608 65 that reiterated the Court's pronouncement in G.R. No. 137533. THE CASE FOR THE RESPONDENT

The respondent submits that the petitioner is estopped from amending the issues since she never raised the pendency of the consolidated cases of G.R. Nos. 130088, 131469, 155171, 155201 and 166608 in her CA petition, which was based only on the Court's rulings in G.R. No. 137533 and G.R. No. 177865. aIcDCH THE ISSUE The core issues boil down to whether the Court's ruling in G.R. No. 137533 applies as stare decisis to the present case. OUR RULING We grant the petition. The case at bar presents the same issue that the Court already resolved on April 7, 2009 in G.R. Nos. 130088, 131469, 155171, 155201 and 166608, wherein we applied the Court's November 22, 2002 decision in G.R. No. 137533, one of several ejectment cases filed by Tala Realty against the respondent arising from the same trust agreement in the reconveyance case subject of the present petition, that the trust agreement is void and cannot thus be enforced. We quoted therein the Court's ruling in G.R. No. 137533, thus: cTDECH The Bank alleges that the sale and twenty-year lease of the disputed property were part of a larger implied trust "warehousing agreement." Concomitant with this Court's factual finding that the 20-year contract governs the relations between the parties, we find the Bank's allegation of circumstances surrounding its execution worthy of credence; the Bank and Tala entered into contracts of sale and lease back of the disputed property and created an implied trust "warehousing agreement" for the reconveyance of the property. In the eyes of the law, however, this implied trust is inexistent and void for being contrary to law. 66 An implied trust could not have been formed between the Bank and Tala as this Court has held that "where the purchase is made in violation of an existing statute and in evasion of its express provision, no trust can result in favor of the party who is guilty of the fraud." 67 . . . [T]he bank cannot use the defense of nor seek enforcement of its alleged implied trust with Tala since its purpose was contrary to law. As admitted by the Bank, it "warehoused" its branch site holdings to Tala to enable it to pursue its expansion program and purchase new branch sites including its main branch in Makati, and at the same time avoid the real property holdings limit under Sections 25(a) and 34 of the General Banking Act which it had already reached . . . . ESCacI Clearly, the Bank was well aware of the limitations on its real estate holdings under the General Banking Act and that its "warehousing agreement" with Tala was a scheme to circumvent the limitation. Thus, the Bank opted not to put the agreement in writing and call a spade a spade, but instead phrased its right to reconveyance of the subject property at any time as a "first preference to buy" at the "same transfer price". This agreement which the Bank claims to be an implied trust is contrary to law. Thus, while we find the sale and lease of the subject property genuine and binding upon the parties, we cannot enforce the implied trust even assuming the parties intended to create it. In the words of the Court in the Ramos case, "the courts will not assist the payor in achieving his improper purpose by enforcing a resultant trust for him in accordance with the 'clean hands' doctrine." The Bank cannot thus demand reconveyance of the property based on its alleged implied trust relationship with Tala. 68 (italics supplied.) TIaEDC The Bank and Tala are in pari delicto, thus, no affirmative relief should be given to one against the other. The Bank should not be allowed to dispute the sale of its lands to Tala nor should Tala be allowed to further collect rent from the Bank. The clean hands doctrine will not allow the creation or the use of a juridical relation such as a trust to subvert, directly or indirectly, the law. Neither the Bank nor Tala came to court with clean hands; neither will obtain relief from the court as the one who seeks equity and justice must come to court with clean hands. 69 (emphases ours; citation omitted) G.R. No. 137533, as reiterated in G.R. Nos. 130088, 131469, 155171, 155201 and 166608, is binding and applicable to the present case following the salutary doctrine of stare decisis et non quieta movere, which means "to adhere to precedents, and not to unsettle things which are established." 70 Under the doctrine, when this Court has once laid down a principle of law as applicable to a certain state of facts, it will adhere to that principle, and apply it to all future cases, where facts are substantially the same; regardless of whether the parties and property are the same. 71 The doctrine of stare decisis is based

upon the legal principle or rule involved and not upon the judgment, which results therefrom. In this particular sense, stare decisis differs from res judicata, which is based upon the judgment. 72 HASTCa The doctrine of stare decisis is one of policy grounded on the necessity for securing certainty and stability of judicial decisions, thus: Time and again, the Court has held that it is a very desirable and necessary judicial practice that when a court has laid down a principle of law as applicable to a certain state of facts, it will adhere to that principle and apply it to all future cases in which the facts are substantially the same. Stare decisis et non quieta movere. Stand by the decisions and disturb not what is settled. Stare decisis simply means that for the sake of certainty, a conclusion reached in one case should be applied to those that follow if the facts are substantially the same, even though the parties may be different. It proceeds from the first principle of justice that, absent any powerful countervailing considerations, like cases ought to be decided alike. Thus, where the same questions relating to the same event have been put forward by the parties similarly situated as in a previous case litigated and decided by a competent court, the rule of stare decisis is a bar to any attempt to relitigate the same [issue]. 73 (italics supplied) aDIHCT It bears stressing that the basic facts of the present case and those of G.R. No. 137533 and G.R. Nos. 130088, 131469, 155171, 155201 and 166608 are the same. Clearly, in light of G.R. No. 137533 and G.R. Nos. 130088, 131469, 155171, 155201 and 166608, which the Court follows as precedents, the present action for reconveyance cannot prosper. It is the Court's duty to apply the previous rulings in G.R. No. 137533 and in G.R. Nos. 130088, 131469, 155171, 155201 and 166608 to the present case. Once a case has been decided one way, any other case involving exactly the same point at issue, as in the present case, should be decided in the same manner. 74 aSDCIE WHEREFORE, the petition is GRANTED. The assailed decision and resolution of the Court of Appeals in CA-G.R. SP No. 107104 are hereby REVERSED and SET ASIDE. Civil Case No. 2506-MN before Branch 170 of the Regional Trial Court of Malabon, Metro Manila is hereby DISMISSED. SO ORDERED.

[G.R. No. 187451. August 29, 2012.] JESUS VIRTUCIO, represented by ABDON VIRTUCIO, petitioner, vs. JOSE ALEGARBES, respondent. DECISION MENDOZA, J p: This petition for review on certiorari under Rule 45 seeks to reverse and set aside the February 25, 2009 Decision 1 of the Court of Appeals (CA), in CA-G.R. CV No. 72613, reversing and setting aside the February 19, 2001 Decision 2 of the Regional Trial Court, Branch 1, Isabela, Basilan (RTC), in Civil Case No. 685-627, an action for "Recovery of Possession and Ownership with Preliminary Injunction." IcDESA The Facts Respondent Jose Alegarbes (Alegarbes) filed Homestead Application No. V-33203 (E-V-49150) for a 24-hectare tract of unsurveyed land situated in Baas, Lantawan, Basilan in 1949. His application was approved on January 23, 1952. 3 In 1955, however, the land was subdivided into three (3) lots Lot Nos. 138, 139 and 140, Pls-19 as a consequence of a public land subdivision. Lot 139 was allocated to Ulpiano Custodio (Custodio), who filed Homestead Application No. 18-4493 (E-182958). Lot 140 was allocated to petitioner Jesus Virtucio (Virtucio), who filed Homestead Application No. 18-4421 (E-182924). 4 Alegarbes opposed the homestead applications filed by Custodio and Virtucio, claiming that his approved application covered the whole area, including Lot Nos. 139 and 140. 5 On October 30, 1961, the Director of Lands rendered a decision denying Alegarbes' protest and amending the latter's application to exclude Lots 139 and 140. Only Lot 138 was given due course. The applications of Custodio and Virtucio for Lots 139 and 140, respectively, were likewise given due course. 6 Alegarbes then appealed to the Secretary of Agriculture and Natural Resources, who dismissed his appeal on July 28, 1967. He then sought relief from the Office of the President (OP), which, however, affirmed the dismissal order of the Secretary of Agriculture and Natural Resources in a decision, dated October 25, 1974. Alegarbes moved for a reconsideration, but the motion was subsequently denied. 7 On May 11, 1989, an order of execution 8 was issued by the Lands Management Bureau of the Department of Environment and Natural Resources to enforce the decision of the OP. It ordered Alegarbes and all those acting in his behalf to vacate the subject lot, but he refused. aASEcH On September 26, 1997, Virtucio then filed a complaint 9 for "Recovery of Possession and Ownership with Preliminary Injunction" before the RTC. In his Answer, 10 Alegarbes claimed that the decision of the Bureau of Lands was void ab initio considering that the Acting Director of Lands acted without jurisdiction and in violation of the provisions of the Public Land Act. Alegarbes argued that the said decision conferred no rights and imposed no duties and left the parties in the same position as they were before its issuance. He further alleged that the patent issued in favor of Virtucio was procured through fraud and deceit, thus, void ab initio. Alegarbes further argued, by way of special and/or affirmative defenses, that the approval of his homestead application on January 23, 1952 by the Bureau of Lands had already attained finality and could not be reversed, modified or set aside. His possession of Lot Nos. 138, 139 and 140 had been open, continuous, peaceful and uninterrupted in the concept of an owner for more than 30 years and had acquired such lots by acquisitive prescription. In his Amended and Supplemental Answer, 11 Alegarbes also averred that his now deceased brother, Alejandro Alegarbes, and the latter's family helped him develop Lot 140 in 1955. Alejandro and his family, as well as Alegarbes' wife and children, had been permanently occupying the said lot and, introducing permanent improvements thereon since 1960. The RTC Ruling

The RTC rendered its decision on February 19, 2001, favoring Virtucio. The decretal portion of which reads: CEHcSI WHEREFORE, upon the merit of this case, this court finds for the plaintiff and against the defendant by: 1. Ordering the defendant and all those acting in his behalf to vacate Lot No. 140, Pls-19, located at Lower Baas, Lantawan, Basilan and surrender the possession and ownership thereof to plaintiff; 2. Ordering the defendant to pay the plaintiff the amount of Fifteen Thousand Pesos (P15,000.00) as attorney's fees and another Ten Thousand Pesos (P10,000.00) as expenses for litigation; and 3. To pay the cost of the suit in the amount of Five Hundred Pesos (P500.00).

SO ORDERED. 12 Not in conformity, Alegarbes appealed his case before the CA. The CA Ruling On February 25, 2009, the CA promulgated its decision declaring Alegarbes as the owner of Lot No. 140, Pls-19, thereby reversing and setting aside the decision of the RTC. The CA ruled that Alegarbes became ipso jure owner of Lot 140 and, therefore, entitled to retain possession of it. Consequently, the awards of attorney's fees, litigation expenses and costs of suit were deleted. cAEDTa In so ruling, the CA explained that even if the decision to approve Virtucio's homestead application over Lot 140 had become final, Alegarbes could still acquire the said lot by acquisitive prescription. The decisions on the issues of the approval of Virtucio's homestead application and its validity were impertinent as Alegarbes had earlier put in issue the matter of ownership of Lot 140 which he claimed by virtue of adverse possession. The CA also found reversible error on the part of the RTC in disregarding the evidence before it and relying entirely upon the decisions of the administrative bodies, none of which touched upon the issue of Alegarbes' open, continuous and exclusive possession of over thirty (30) years of an alienable land. The CA held that the Director of Lands, the Secretary of Agriculture and Natural Resources and the OP did not determine whether Alegarbes' possession of the subject property had ipso jure segregated Lot 140 from the mass of public land and, thus, was beyond their jurisdiction. Aggrieved, Virtucio filed this petition. ISSUES Virtucio assigned the following errors in seeking the reversal of the assailed decision of the CA, to wit: 1. The Court of Appeals erred in setting aside the judgment of the trial court, which awarded the lot in question to the respondent by virtue of acquisitive prescription and ordered herein petitioner to surrender the ownership and possession of the same to them. 13 2. The Court of Appeals gravely erred in disregarding the decision in CA-G.R. CV-26286 for Recovery of Possession and Ownership, Custodio vs. Alegarbes which contains same factual circumstances as in this case and ruled against JOSE ALEGARBES. 14 3. The Court of Appeals erred in deleting the award of attorney's fees to the petitioner. 15

The lone issue in this case is whether or not Alegarbes acquired ownership over the subject property by acquisitive prescription. IcHEaA Ruling of the Court The petition must fail.

Indeed, it is fundamental that questions of fact are not reviewable in petitions for review on certiorari under Rule 45 of the Rules of Court. Only questions of law distinctly set forth shall be raised in the petition. 16 Here, the main issue is the alleged acquisition of ownership by Alegarbes through acquisitive prescription and the character and length of possession of a party over a parcel of land subject of controversy is a factual issue. 17 The Court, however, is not precluded from reviewing facts when the case falls within the recognized exceptions, to wit: (a) (b) (c) (d) (e) When the findings are grounded entirely on speculation, surmises, or conjectures; When the inference made is manifestly mistaken, absurd, or impossible; When there is grave abuse of discretion; SACEca When the judgment is based on a misapprehension of facts; When the findings of facts are conflicting;

(f) When in making its findings the CA went beyond the issues of the case, or its findings are contrary to the admissions of both the appellant and the appellee; (g) (h) When the CA's findings are contrary to those by the trial court; When the findings are conclusions without citation of specific evidence on which they are based;

(i) When the facts set forth in the petition as well as in the petitioner's main and reply briefs are not disputed by the respondent; (j) When the findings of fact are premised on the supposed absence of evidence and contradicted by the evidence on record; or (k) When the CA manifestly overlooked certain relevant facts not disputed by the parties, which, if properly considered, would justify a different conclusion. 18 [Emphasis supplied] In the case at bench, the findings and conclusions of the CA are apparently contrary to those of the RTC, hence, the need to review the facts in order to arrive at the proper conclusion. TcDHSI On Acquisitive Prescription Virtucio insists that the period of acquisitive prescription was interrupted on October 30, 1961 (or in 1954 when Alegarbes filed the protest) when the Director of Lands rendered a decision giving due course to his homestead application and that of Ulpiano Custodio. Virtucio further claims that since 1954, several extrajudicial demands were also made upon Alegarbes demanding that he vacate said lot. Those demands constitute the "extrajudicial demand" contemplated in Article 1155, thus, tolling the period of acquisitive prescription. 19 Article 1106 of the New Civil Code, in relation to its Article 712, provides that prescription is a mode of acquiring ownership through the lapse of time in the manner and under the conditions laid down by law. Under the same law, it states that acquisitive prescription may either be ordinary or extraordinary. 20 Ordinary acquisitive prescription requires possession of things in good faith and with just title for a period of ten years, 21 while extraordinary acquisitive prescription requires uninterrupted adverse possession of thirty years, without need of title or of good faith. 22 There are two kinds of prescription provided in the Civil Code. One is acquisitive, that is, the acquisition of a right by the lapse of time as expounded in par. 1, Article 1106. Other names for acquisitive prescription are adverse possession and usucapcion. The other kind is extinctive prescription whereby rights and actions are lost by the lapse of time as defined in Article 1106 and par. 2, Article 1139. Another name for extinctive prescription is litigation of action. 23 These two kinds of prescription should not be interchanged. Article 1155 of the New Civil Code refers to the interruption of prescription of actions. Interruption of acquisitive prescription, on the other hand, is found in Articles 1120-1125 of the same Code. Thus, Virtucio's reliance on Article 1155 for purposes of

tolling the period of acquisitive prescription is misplaced. The only kinds of interruption that effectively toll the period of acquisitive prescription are natural and civil interruption. 24 Civil interruption takes place with the service of judicial summons to the possessor. 25 When no action is filed, then there is no occasion to issue a judicial summons against the respondents. The period of acquisitive prescription continues to run. acCTSE In this case, Virtucio claims that the protest filed by Alegarbes against his homestead application interrupted the thirty (30)year period of acquisitive prescription. The law, as well as jurisprudence, however, dictates that only a judicial summons can effectively toll the said period. In the case of Heirs of Marcelina Azardon-Crisologo v. Raon, 26 the Court ruled that a mere Notice of Adverse Claim did not constitute an effective interruption of possession. In the case of Heirs of Bienvenido and Araceli Tanyag v. Gabriel, 27 which also cited the Raon Case, the Court stated that the acts of declaring again the property for tax purposes and obtaining a Torrens certificate of title in one's name cannot defeat another's right of ownership acquired through acquisitive prescription. 28 In the same vein, a protest filed before an administrative agency and even the decision resulting from it cannot effectively toll the running of the period of acquisitive prescription. In such an instance, no civil interruption can take place. Only in cases filed before the courts may judicial summons be issued and, thus, interrupt possession. Records show that it was only in 1997 when Virtucio filed a case before the RTC. The CA was, therefore, correct in ruling that Alegarbes became ipso jure owner of Lot 140 entitling him to retain possession of it because he was in open, continuous and exclusive possession for over thirty (30) years of alienable public land. Virtucio emphasizes that the CA erred in disregarding the decisions of the administrative agencies which amended Alegarbes' homestead application excluding Lot 140 and gave due course to his own application for the said lot, which decisions were affirmed by the RTC. Well-settled is the rule that factual findings of the lower courts are entitled to great weight and respect on appeal and, in fact, are accorded finality when supported by substantial evidence on the record. 29 It appears, however, that the conclusion made by the RTC was not substantially supported. Even the RTC itself noted in its decision: The approval of a Homestead Application merely authorizes the applicant to take possession of the land so that he could comply with the requirements prescribed by law before a final patent could be issued in his favor what divests the government of title to the land is the issuance of a patent and its subsequent registration with the Register of Deeds. 30 A perusal of the records would reveal that there was no issuance of any patent in favor of either parties. This simply means that the land subject of the controversy remains to be in the name of the State. Hence, neither Virtucio nor Alegarbes can claim ownership. There was, therefore, no substantial and legal basis for the RTC to declare that Virtucio was entitled to possession and ownership of Lot 140. CDScaT It can be argued that the lower court had the decisions of the administrative agencies, which ultimately attained finality, as legal bases in ruling that Virtucio had the right of possession and ownership. In fact, the Department of Environment and Natural Resources (DENR) even issued the Order of Execution 31 on May 11, 1989 ordering Alegarbes to vacate Lot 140 and place Virtucio in peaceful possession of it. The CA, however, was correct in finding that: But appellant had earlier put in issue the matter of ownership of Lot 140 which he claims by virtue of adverse possession. On this issue, the cited decisions are impertinent. Even if the decision to approve appellee's homestead application over Lot 140 had become final, appellant could still acquire the said lot by acquisitive prescription. 32 In the case of Heirs of Gamos v. Heirs of Frando, 33 the Court ruled that the mere application for a patent, coupled with the fact of exclusive, open, continuous and notorious possession for the required period, is sufficient to vest in the applicant the grant applied for. 34 It likewise cited the cases of Susi v. Razon 35 and Pineda v. CA, 36 where the Court ruled that the possession of a parcel of agricultural land of the public domain for the prescribed period of 30 years ipso jure converts the lot into private property. 37

In this case, Alegarbes had applied for homestead patent as early as 1949. He had been in exclusive, open, continuous and notorious possession of Lot 140 for at least 30 years. By the time the DENR issued its order of execution in 1989, Alegarbes had Lot 140 in his possession for more than 30 years. Even more so when Virtucio filed the complaint before the RTC in 1997, Alegarbes was already in possession of the subject property for forty-eight (48) years. aHSTID The CA correctly observed that the RTC erred in disregarding the evidence before it and relying entirely upon the decisions of the Director of Lands, the Secretary of Agriculture and Natural Resources and the OP, which never touched the issue of whether Alegarbes' open, continuous and exclusive possession of over thirty (30) years of alienable land had ipso jure segregated Lot 140 from the mass of public land and beyond the jurisdiction of these agencies. 38 When the CA ruled that the RTC was correct in relying on the abovementioned decisions, it merely recognized the primary jurisdiction of these administrative agencies. It was of the view that the RTC was not correct in the other aspects of the case. Thus, it declared Alegarbes as owner ipso jure of Lot 140 and entitled to retain possession of it. There is no reason for the Court to disturb these findings of the CA as they were supported by substantial evidence, hence, are conclusive and binding upon this Court. 39 On the CA Decision involving a similar case Virtucio insists that the CA gravely erred in disregarding its decision in Custodio v. Alegarbes, CA-G.R. CV 26286, for Recovery of Possession and Ownership, which involved the same factual circumstances and ruled against Alegarbes. It must be noted that the subject property in the said case was Lot 139 allocated to Custodio and that Virtucio was not a party to that case. The latter cannot enjoy whatever benefits said favorable judgment may have had just because it involved similar factual circumstances. The Court also found from the records that the period of acquisitive prescription in that case was effectively interrupted by Custodio's filing of a complaint, which is wanting in this case. Moreover, it is settled that a decision of the CA does not establish judicial precedent. 40 "The principle of stare decisis enjoins adherence by lower courts to doctrinal rules established by this Court in its final decisions. It is based on the principle that once a question of law has been examined and decided, it should be deemed settled and closed to further argument." 41 The Court agrees with the position of Alegarbes that by Virtucio's insistence that it was erroneous for the CA to disregard its earlier decision in CA-G.R. CV 26286, he, in effect, calls upon this Court to adhere to that decision by invoking the stare decisis principle, which is not legally possible because only final decisions of this Court are considered precedents. 42 In view of the foregoing, the Court need not dwell on the complaint of Virtucio with regard to the deletion of the award of attorney's fees in his favor. It is ludicrous for the CA to order Alegarbes to pay attorney's fees, as a measure of damages, and costs, after finding him to have acquired ownership over the property by acquisitive prescription. AHCTEa WHEREFORE, the petition is DENIED. SO ORDERED.

[G.R. No. 88582. March 5, 1991.] PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. HEINRICH S. RITTER, accused-appellant. The Solicitor General for plaintiff-appellee. Esteban B. Bautista for accused-appellant. SYLLABUS 1. REMEDIAL LAW; EVIDENCE; ADMISSIBILITY OF ORAL EVIDENCE; REQUISITES. For oral evidence to be admissible under this Rule, the requisites are: "(1) That the declarant must be dead or outside of the Philippines or unable to testify; (2) That pedigree is in issue; (3) That the person whose pedigree is in question must be related to the declarant by birth or marriage; (4) That the declaration must be made before the controversy occurred or ante litem motam; and (5) That the relationship between the declarant and the person whose pedigree is in question must as a general rule be shown by evidence other than such act or declaration." 2. ID.; ID.; CREDIBILITY; HUMAN MEMORY ON DATES, FRAIL. Human memory on dates or days is frail and unless the day is an extraordinary or unusual one for the witness, there is no reasonable assurance of its correctness. (People v. Dasig, 93 Phil. 618, 632 [1953]). 3. ID.; ID.; BAPTISMAL CERTIFICATE; CONCLUSIVE PROOF ONLY OF BAPTISM. A baptismal certificate is conclusive proof only of the baptism administered, in conformity with the rites of the Catholic Church by the priest who baptized the child, but it does not prove the veracity of the declarations and statements contained in the certificate that concern the relationship of the person baptized. Such declarations and statements, in order that their truth may be admitted, must indispensably be shown by proof recognized by law. (Macadangdang v. Court of Appeals, 100 SCRA 73 [1980]) 4. ID.; ID.; BURDEN OF PROOF AND PRESUMPTIONS; IN CASES OF STATUTORY RAPE, IT IS INCUMBENT UPON THE PROSECUTION TO PROVE VICTIM'S AGE WAS LESS THAN 12 YEARS. It is not incumbent upon the defense to prove Rosario's age. The burden of proof lies on the prosecution to prove that Rosario was less than 12 years old at the time of the alleged incident in a charge of statutory rape. The prosecution failed in this respect. 5. CRIMINAL LAW; RAPE; WHERE CARNAL KNOWLEDGE DOES NOT FALL UNDER STATUTORY RAPE, PROSECUTION MUST ESTABLISH THAT FORCE OR INTIMIDATION ATTENDED THE CRIME; CIRCUMSTANCE NEGATED IN CASE AT BAR. Since Rosario was not established to have been under 12 years of age at the time of the alleged sexual violation, it was necessary to prove that the usual elements of rape were present; i.e. that there was force of intimidation or that she was deprived of reason or otherwise unconscious in accordance with Article 335 of the Revised Penal Code. We agree with the defense that there was no proof of such facts. On the contrary, the evidence shows that Rosario submitted herself to the sexual advances of the appellant. In fact, she appears to have consented to the act as she was paid P300.00 the next morning while her companion, Jessie Ramirez was paid P200.00 . The environmental circumstances coupled with the testimonies and evidence presented in court clearly give the impression that Rosario Baluyot, a poor street child, was a prostitute inspite of her tender age. Circumstances in life may have forced her to submit to sex at such a young age but the circumstances do not come under the purview of force or intimidation needed to convict for rape. In view of these clear facts which the prosecution failed to refute, no rape was committed. 6. REMEDIAL LAW; EVIDENCE HEARSAY; PART OF THE RES GESTAE; STATEMENT MUST BE MADE IMMEDIATELY AFTER A STARTLING OCCURRENCE; PRINCIPLE DOES NOT APPLY IN CASE AT BAR. Jessie Ramirez was not all certain about the sexual vibrator because he did not actually see it in the possession of the appellant. What he merely remembers is the revelation made by Rosario the next morning that the foreigner inserted something inside her vagina. The trial court admitted such statement as part of the res gestae. In a strained effort to accept such statement as part of res gestae, the trial court focused the test of admissibility on the lapse of time between the event and the utterance. For the average 13 years old, the insertion of a mechanical device or anything for that matter into the vagina of a young girl is undoubtedly startling. For Rosario and Jessie, however, there must be more evidence to show that the statement, given after a night's sleep had intervened, was given instinctively because the event was so startling. Res gestae does not apply. (Section 42, Rule 130, Rules of Court).

7. ID.; ID.; CREDIBILITY; EVIDENCE MUST NOT ONLY PROCEED FROM THE MOUTH OF A CREDIBLE WITNESS BUT MUST BE CREDIBLE IN ITSELF. Evidence 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. (People vs. Patog, 144 SCRA 429 [1986]). 8. ID.; ID.; EXPERT OPINION; CONTROLLING AND BINDING ON THE SUPREME COURT; CASE AT BAR. The trial court, ruled that "there is no hard and fast rule as to the time frame wherein infection sets in upon insertion of a foreign body in the vagina canal. It should be clarified that the time frame depends upon the kind of foreign body lodged inside the body. The subject object is certainly not considered as inert and based on Dr. Solis' testimony, it is more likely that infection should set in much earlier. Considering also that the object was inserted inside the vagina which is part of the generative organ of a woman, an organ which is lined with a very thin layer of membrane with plenty of blood supply, this part of the body is more susceptible to infection. The truth of Dr. Solis' testimony is more probable under the circumstances of the case. We see no reason why his opinions qualified by training and experience should not be controlling and binding upon the Court in the determination of guilt beyond reasonable doubt. (People v. Tolentino, 166 SCRA 469 [1988]). 9. CRIMINAL LAW; CRIMINAL LIABILITY; DEATH OF THE VICTIM MUST BE THE LOGICAL CONSEQUENCE OF THE WOUND INFLICTED BY THE ACCUSED. The death of the victim must be the direct, natural and logical consequence of the wounds inflicted upon him by the accused. And since we are dealing with a criminal conviction, the proof that the accused caused the victim's death must convince a rational mind beyond reasonable doubt. (Urbano v. Intermediate Appellate Court 157 SCRA 1 [1988]) 10. ID.; ID.; ID.; CASE AT BAR. The evidence for the accused may be numerically less as against the number of witnesses and preponderance of evidence presented by the prosecution but there is no direct and convincing proof that the accused was responsible for the vibrator left inside the victim's vagina which caused her death seven (7) months after its insertion. What the prosecution managed to establish were mere circumstances which were not sufficient to overcome the constitutional presumption of innocence. 11. REMEDIAL LAW; EVIDENCE, CIRCUMSTANTIAL EVIDENCE; REQUISITES TO SUPPORT A CONVICTION. While circumstantial evidence may suffice to support a conviction it is imperative, though, that the following requisites should concur: (a)There is more than one circumstance; (b) The facts from which the inferences are derived are proven; and (c) The combination of all the circumstances is such as to produce a conviction beyond reasonable doubt. (Rule 133, Sec. 4 Revised Rules of Court) 12. ID.; ID.; ID.; MUST EXCLUDE EVERY HYPOTHESIS OF INNOCENCE. Before conviction can be had upon circumstantial evidence, the circumstances proved should constitute an unbroken chain which leads to one fair and reasonable conclusion pointing to the defendant, to the exclusion of all others, as the author of the crime (People v. Subano, 73 Phil. 692 [1942] ). It must fairly exclude every reasonable hypothesis of innocence (Dorado v. Court of Appeals, 153 SCRA 420, 433 [1987]). 13. ID.; ID.; GUILT BEYOND REASONABLE DOUBT; NOT PROVEN IN CASE AT BAR. It was improbable, according to expert medical testimony, for a foreign object with active properties to cause pain, discomfort, and serious infection only after seven months inside a young girl's vaginal canal. Infection would have set in much earlier. The long delay of seven (7) months after the incident in reporting the alleged crime renders the evidence for the prosecution insufficient to establish appellant's guilty connection with the requisite moral certainty. (See People v. Mula Cruz, 129 SCRA 156 [1984]). 14 ID.; ID.; SUSPICIONS AND IMPROBABILITIES, NOT TAKEN AGAINST AN ACCUSED. Suspicions and possibilities are not evidence and therefore should not be taken against the accused. (People v. Tolentino, supra) 15. ID., CRIMINAL PROCEDURE; EVERY CIRCUMSTANCE FAVORABLE TO THE ACCUSED SHOULD BE DULY TAKEN INTO ACCOUNT. Every circumstance favorable to the accused should be duly taken into account. This rule applies even to hardened criminals or those whose bizarre behaviour violates the mores of civilized society. The evidence against the accused must survive the test of reason. The strongest suspicion must not be allowed to sway judgment. (See Sacay v. Sandiganbayan, 142 SCRA 593 [1986]). 16. ID.; EVIDENCE; PROOF BEYOND REASONABLE DOUBT, CONSTRUED. The requirement of proof beyond reasonable doubt calls for moral certainty of guilt. It has been defined as meaning such proof 'to the satisfaction of the court,

keeping in mind the presumption of innocence, as precludes every reasonable hypothesis except that which it is given to support. It is not sufficient for the proof to establish a probability, even though strong, that the fact charged is more likely to be true than the contrary. It must establish the truth of the fact to a reasonable and moral certainty a certainty that convinces and satisfies the reason and the conscience of those who are to act upon it." (Moreno, Philippine Law Dictionary, 1972 Edition, p. 379, citing U.S. v. Reyes, 3 Phil. 3; People v. Ng, 142 SCRA 615 [1986]) 17. CONSTITUTIONAL LAW; DECLARATION OF PRINCIPLES AND STATE POLICIES; PEDOPHILIA; AN INFRINGEMENT THEREOF. Pedophilia is clearly a behavior offensive to public morals and violative of the declared policy of the state to promote and protect the physical, moral, spiritual and social well-being of our youth. (Article II, Section 13, 1987 Constitution; Harvey v. Defensor Santiago, 162 SCRA 840, 848 [1989]). 18. ID.; ID.; ID.; ID.; EXPULSION OF ALIEN FROM THE PHILIPPINES, WARRANTED. In this case, there is reasonable ground to believe that the appellant committed acts injurious not only to Rosario Baluyot but also to the public good and domestic tranquility of the people. The state has expressly committed itself to defend the right of children to assistance and special protection from all forms of neglect, abuse, cruelty, exploitation and other conditions prejudicial to their development. (Art. XV, Section 3 [2] . . . (Harvey v. Santiago, supra). The appellant has abused Filipino children, enticing them with money. The appellant should be expelled from the country. 19 REMEDIAL LAW; ACTIONS; A PERSON WHILE NOT CRIMINALLY LIABLE MAY STILL BE CIVILLY LIABLE It does not necessarily follow that the appellant is also free from civil liability which is impliedly instituted with the criminal action. (Rule III, Section 1) The well-settled doctrine is that a person while not criminally liable, may still be civilly liable. The appellant is ordered to pay the amount of P30,000.00 by way of moral and exemplary damages to the heirs of Rosario Baluyot. DECISION GUTIERREZ, JR., J p: The appellant challenges his conviction of the crime involving a young girl of about 12 years old who had been allegedly raped and who later died because of a foreign object left inside her vaginal canal. LLpr Heinrich Stefan Ritter was charged with the crime of rape with homicide under an information which reads: "That on or about the tenth (10th) day of October, 1986 in the City of Olongapo, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused with lewd design and with intent to kill one Rosario Baluyot, a woman under twelve (12) years of age, did then and there wilfully, unlawfully and feloniously have carnal knowledge of said Rosario Baluyot and inserted a foreign object into the vaginal canal of said Rosario Baluyot which caused her death shortly thereafter, to the damage and prejudice of her relatives." (66) When arraigned, the accused pleaded "Not Guilty". Thereafter, the case was set for trial on the merits. To prove the guilt of the accused, the prosecutor presented the following witnesses, namely: (1) Jessie Ramirez, (2) Maria Burgos y Turla, (3) P/Cpl. Mariano Victoria, (4) Policarpio Baluyot, (5) Dr. Reino Rosete, (6) Sumulong Daniel, (7) Jessica Herrera, (8) Sister Eva Palencia, (9) Conrado Salonga, (10) Dr. Devonne Loop, (11) Dr. Leo Cruz, (12) Paul Maclor, (13) Aida Sarmiento, (14) Patricia Prollamanta, (15) Mel Santos, (16) Lorna Limos, (17) Eduard Lee Bungarner, (18) Ronaldo Marquez, (19) Tom Bonte, (20) 2nd Asst. City Fiscal Nini Alcala, (21) 1st Asst. City Fiscal Dorentino Z. Floresta, (22) Corazon Caber, (23) Rodolfo Mercurio and (24) Fe Israel. On the other hand, the defense offered in evidence Exhibits "1" to "24" and the testimonies of (1) Heinrich S. Ritter, (2) Father Roque Villanueva, (3) Angelita Amulong, (4) Gaspar Alcantara, (5) Dr. Val Barcinal and (6) Dr. Pedro C. Solis. The facts of the case upon which the lower court based its finding of guilt beyond reasonable doubt are summarized in its decision, as follows: "The people's evidence show that on October 10, 1986 about midnight, accused Heinrich Stefan Ritter brought a boy and girl namely: Jessie Ramirez and Rosario Baluyot inside his hotel room at MGM Hotel along Magsaysay Drive, Olongapo City. These two (2) children were chosen from among a bunch of street children. Once inside the hotel room accused told them to take a

bath. Jessie Ramirez, alias 'Egan', was the first to take a bath and when he came out Rosario Baluyot went to the bathroom to do the same. While Rosario Baluyot was inside the bathroom, accused Ritter took out some pictures depicting dressed up young boys, and put them on top of the table. Other things which were taken out and placed on top of a table were three (3) other objects which he described as like that of a vicks inhaler. One of these objects the accused played with his hands and placed it on his palms. The color of which is grayish blue which turned out later to be the foreign object which was inserted inside the vagina of Rosario Baluyot. The other objects were later established to be anti-nasal inhalers against pollution purchased by the accused in Bangkok when he went there as a tourist. While Rosario was in the bathroom, accused told Ramirez to lay down on bed, and so did the accused. He then started masturbating the young boy and also guided the boy's hand for him to be masturbated, so that they masturbated each other, while they were both naked, and he gave Jessie Ramirez an erection. When Rosario Baluyot came out of the bathroom, she was told to remove her clothes by accused and to join him in bed. The accused then placed himself between the two (2) children and accused started fingering Rosario. At this time, Ramirez was already sleepy, but Rosario touched him to call his attention. He looked, and he saw accused placing his penis against the vagina of Rosario and that he was trying to penetrate the vagina but it would not fit. After what he saw, Ramirez did not anymore bother to look because he was sleepy and fell asleep. The following morning, the accused, whom the juveniles described as an 'American, paid Ramirez alias 'Egan' P200.00 and Rosario P300.00. He then left them in the hotel. After the American left, they went downstairs, and Rosario told Egan that the American inserted something in her vagina. But they could not do anything anymore, because the American had already left, and neither did they report the matter to the police. Sometime the following day, Jessie saw Rosario and he asked her whether the object was already removed from her body and Rosario said 'Yes'. However, Jessie Ramirez claimed that on the evening of that same date, he saw Rosario and she was complaining of pain in her vagina and when Egan asked her, she said that the foreign object was not yet removed. Then there was another occasion wherein Jessie was summoned and when he came he saw Rosario writhing in pain and when he tried to talk to Rosario she scolded him with defamatory remarks. Thereafter, he did not see Rosario anymore because he already went home to his aunt's house who resided at Barrio Barretto and resumed his studies in the primary grades. On May 14, 1987, Gaspar Alcantara, a defense witness, while garbage scavenging at Lot 21, near the gate of the U.S. Naval Base saw Rosario at Magsaysay Drive near the Happy Bake Shop near Lot 21, being ogled by people because Rosario's skirt was bloodied and she was unconscious and foul smelling. Since nobody helped Rosario, he took pity on her condition and brought her to the Olongapo City General Hospital in an unconscious condition, via jeepney. He went to the Information desk and he was the one who gave the personal circumstances of Rosario as to her name, age, her residence as Nagbakulaw, Lower Kalaklan, and Gaspar Alcantara signed as 'guardian' of Rosario, while Rosario was already in the emergency room. Although Gaspar Alcantara denied that he did not know the name of Rosario Baluyot when he brought her to the hospital, this is belied by the testimony of the Information clerk Lorna Limos, who was then on duty. Limos testified that it was Alcantara who supplied the personal circumstances of Rosario. The Court gives more credence to the testimony of Miss Limos as against Gaspar Alcantara who became a defense witness, for the reason that through his own testimony, Gaspar Alcantara claimed that even prior to May 14, 1987, he had already known Rosario Baluyot for more than one (1 ) year, because he has seen the said girl go to the house of his twin brother, Melchor Alcantara, who is his immediate neighbor. Rosario used to visit a girl by the name of 'Nora' who was then in the custody of his brother. His brother Melchor was also living with their mother, brother and sister-in-law and their two (2) children in his house. Rosario as per Gaspar's testimony even stays for one week or a few days at his brother's house when she visits Nora. So the Court can safely assume that of all the more than one (1) year that he had regularly seen Rosario at his brother's house, he must have already did come to know the name of Rosario Baluyot including her age. In his testimony in Court he stated that he even asked Rosario for movie and softdrinks money which can safely be concluded that he knows her very well. It is against normal behavior especially to a Filipino who have a characteristic of curiosity not to have found out the real name of the girl he claims to know only as 'Tomboy'. While Rosario Baluyot was confined at the Olongapo City General Hospital, nobody was attending to her since she is a street child, having stowed away from the custody of her grandmother. Three (3) good samaritans who belong to religious and civic organizations, in the persons of Jessica Herrera, Fe Israel and Sr. Eva Palencia, in one of their missions in the hospital chanced upon Rosario Baluyot who was all alone with no relatives attending to her and after finding out that she was only 12 years old decided to help her. After a short interview with Rosario, regarding her name and age only because she clamped up about her residence and her relatives, they decided to help her by providing her the medicine she needed during her confinement in readiness for an operation. It was Fe Israel who was able to get the name and age of Rosario Baluyot from Rosario Baluyot

herself when she saw her for the first time. For Fe Israel, the age of Rosario Baluyot was an important factor because their program assisted only indigent patients from infants up to 13 years old. Rosario's first ailment at the Olongapo City General Hospital was loose bowel movement and vomiting, which was first suspected as gastro-enteritis, but which came out later as symptoms of peritonitis due to a massive infection in the abdominal cavity. Subsequently, on May 17, 1987, after she was examined by the physicians at the hospital, it was found out that there was a foreign object lodged in her vaginal canal and she had vaginal discharge tinged with blood and foul smelling odor emanating from her body. One of the doctors who attended to her was Dr. Barcinal, an OB-GYNE. Dr. Barcinal tried to extract the foreign object by means of a forceps, but several attempts proved futile because said object was deeply embedded in the vaginal canal and was covered by tissues. Her abdomen was enlarged, tender and distended, symptoms of peritonitis. The patient was feverish and incoherent when she was scheduled for operation on May 19, 1987, after the first attempt for an operation on May 17 was aborted allegedly because the consent of Dr. Reino Rosete, the hospital director was not obtained. The surgeon who operated on her was Dr. Rosete himself. He testified that Rosario had to be operated even in that condition in order to save her life. Her condition was guarded. This was corroborated by Dr. Leo Cruz, the anesthesiologist during Rosario's operation. It was in the evening of May 19 at about 7:00 p.m. when Dr. Rosete opened her abdomen by making a 5 inch incision on her stomach. He found out that the fallopian tubes were congested with pus, and so with the peritonium, and the pelvic cavity, and patches of pus in the liver, although the gallbladder and kidney appeared to have septicemia, poisoning of the blood. The peritonitis and septicemia were traced to have been caused through infection by the foreign object which has been lodged in the intra-vaginal canal of Rosario. The foreign object which was already agreed upon by both parties that it is a portion of a sexual vibrator was extracted from the vagina of Rosario while under anesthesia. Said object was coated with tissues, pus and blood. Dr. Rosete gave it to the assisting surgical nurse for safekeeping and gave instructions to release it to the authorized person. This object was shown by the nurse to Dr. Leo Cruz. Dr. Rosete considered the operation successful and the patient was alive when he left her under Dr. Cruz. Dr. Cruz stayed with said patient in the ward for about 30 minutes and thereafter he left. The following day, Rosario got serious and it was Dr. Leo Cruz who pronounced her death at 2:00 to 2:15 in the afternoon of May 20, 1987. Thereafter, a death certificate was prepared under the direction of Dr. Cruz which was indicated therein that the cause of death was cardio-respiratory arrest, secondary to septicemia caused by the foreign object lodged in the intra uteral vaginal canal of Rosario Baluyot. The foreign object was washed by nurse Obedina, then placed it in a transparent small jar and labelled "Rosario Baluyot". Jessica Herrera asked the nurse for the foreign object, and it was given to her under proper receipt. Herrera then showed the same to the persons who helped financially Rosario's case, and afterwards she gave it to Sister Eva Palencia. Sis. Palencia was in custody of the said object until Mr. Salonga came and asked her for the object. After Rosario Baluyot died, Sis. Palencia and a companion went to Gaspar Alcantara to ask him in locating the relatives of Rosario. They were able to trace Rosario's grandmother, Mrs. Maria Burgos Turla, and informed her that her granddaughter was already dead and lying in state at St. Martin Funeral Parlor. Mrs. Turla went there with her son, who shouldered all the burial expenses for Rosario. Subsequently, Sis. Palencia, Fr. Cullens and Mr. Salonga came to her residence at Sta. Rita and asked her if she was interested in filing a case against the person who caused the death of her granddaughter. Of course she agreed. Hence, she was brought to the Fiscal's (City) Office to file the same. After the case was filed against the herein accused, Atty. Edmundo Legaspi with his messenger came to her house and told her that the accused was willing to settle the case, but that accused Ritter had only P15,000.00. The old woman did not accept it because she knows that the accused is liable to pay damages anyway. After that, she received a letter from Atty. Legaspi telling her to get a lawyer for her case. By this time, Mrs. Turla, who wanted to have the case settled once and for all giving the reason that she can no longer bear the situation, sent her nephew, Conrado Marcelo to Atty. Legaspi. Her nephew obliged and told her that she will be paid at the office of Atty. Legaspi. On a date not clear in the records, she went with her nephew Conrado Marcelo, and Roberto Sundiam, an assistant barangay tanod of Sta. Rita, and while they were there, she saw Ritter arrive at the law office. Ritter and Atty. Legaspi talked at the office near the bathroom, and thereafter Ritter left. After he left, Atty. Legaspi told Rosario's grandmother that they are willing to settle for P20,000.00, but that Ritter left only P15,000.00, so she received the money with the understanding that there was a balance of P5,000.00 yet. She was made to sign a statement, and she was asked to change the age of her granddaughter Rosario. With the document prepared, she and the lawyer's messenger went to

the Fiscal's office to have it subscribed, and was subscribed before an assistant city fiscal. But the balance of P5,000.00 was not paid, because later on Atty. Legaspi became the OIC of Olongapo City and he could no longer attend to it. Atty. Legaspi, during one of the hearings before the Court even apologized to her. As to the case, P/Cpl Marino Victoria, as criminal investigator of Station "A", was directed by Col. Daos, Station Commander of the Olongapo Police Department to make a follow up of the case of Rosario Baluyot. On the other hand, since the suspect who inserted the foreign object inside Rosario's vagina was said to be an American, the NISRA, Subic Naval Base also conducted its investigation headed by criminal investigator Agent Conrado Salonga. Coordinating with the local police and with Sister Eva Palencia, since Rosario was a street child at Magsaysay Drive, they rounded up about 43 street children and from some of them they learned that Rosario Baluyot was with Jessie Ramirez with an American at the MGM Hotel when the foreign object was inserted in her vagina. After finding Jessie Ramirez, they asked him about Rosario Baluyot. They found out that indeed he was with Rosario Baluyot sometime before Christmas of 1986 with an American, who brought them to the said hotel. Jessie Ramirez was taken inside the U.S. Naval Base, Olongapo City and took his statement. Then he was brought to Mr. Edward Lee Bungarner, a cartographer, and out of the description supplied by Ramirez, a composite drawing was photocopied and copies thereof were distributed to the local police and to the sentries at the gate of the U.S. Naval Base. Some American servicemen who had resemblance to the composite drawing were photographed and these were shown to Jessie Ramirez, but the result was negative. Aside from the physical description by Ramirez about the appearance of the suspect, he also described him as having the mannerisms of a homo-sexual. After obtaining information that foreign homo-sexuals frequented Ermita, Manila, and thinking that the so-called American may be European or Australian national, the team composed of Agent Salonga, Mr. Heinsell, P/Cpl Marino Victoria and P/Cpl Andres Montaon, Jessie Ramirez and Michael Johnson, another juvenile, proceeded to Manila. They first went to the Manila NISRA Office, and thereafter checked in a hotel. That was on September 23, 1987. On the first night, they went to Luneta Park where foreign homo-sexuals were said to be frequenting, but the result was negative. Then on September 25, at about 11:00 p.m., while they were standing at the corner of A. Mabini and M.H. del Pilar Street, a male caucasian who looked like a homosexual stopped by admiringly infront of the two (2) juveniles, Ramirez and Johnson. Jessie Ramirez then reported to Mr. Salonga that this foreigner had a similarity with the American suspect, so the two minors were instructed to follow the foreigner and to strike a conversation. They did, and when they returned, Jessie Ramirez told them that indeed the said foreigner was the one who brought him and Rosario Baluyot to the MGM Hotel. Bobby Salonga told Ramirez that this foreigner had no beard while the one previously described by Ramirez had a beard. Jessie Ramirez told them that maybe he have just shaved it off. The said caucasian then entered a bar, and after several minutes he came out, and Jessie Ramirez upon his signal with his thumbs up, as a signal to confirm that the said foreigner is the suspect, arrested Ritter and brought him to the Manila Western Police District. It could be mentioned at this stage that in this operation they were accompanied by two (2) policemen from the Western Police District. The foreigner was hand cuffed and was told that he was a suspect for Rape with Homicide. After the arrest, they first went to the pension house of the suspect in Ermita, Manila to get his shoulder bag which contained his personal belongings, and from there they brought him to the Western Police Department. At the said police headquarters, they were allowed a permissive search by the foreigner of his clutch bag and his small shoulder bag and confiscated his passport, I.D., 3 inhalers, money in the form of dollars and travellers checks amounting about $1,500.00 and about P100.00, all duly receipted for. From the passport they learned that the suspect's name was Heinrich Stefan Ritter, an Austrian national. During the questioning of Ritter, Salonga and his team already left the headquarters and went to their hotel, because at this time Jessie Ramirez was already shaking with fear after he identified the accused. The following day, they brought the accused to Olongapo and was detained at the Olongapo City Jail. The case for Rape with Homicide was filed against him at the City Fiscal of Olongapo. At the preliminary investigation, accused was assisted by his own counsel. The private complainant was Maria Burgos Turla because it was she who had custody of Rosario Baluyot after her mother Anita Burgos died on January 12, 1982, and their father Policarpio Baluyot had left them under her custody. When this case was filed, the father's whereabouts was unknown, and he only appeared when the trial of this case before the Court was already in progress. And upon his (Policarpio Baluyot) own admission, he only learned about the death of his daughter Rosario Baluyot from the newspaper, long after Rosario was already gone. The defense tried to dislodge the case by claiming that there could be no crime of Rape with Homicide because the suspect was described as an American while Ritter is an Austrian. Also advanced by the defense is that, it is a case of mistaken identity. That Rosario Baluyot was at the time of the commission of the offense, already more than 13 years old, she having been born on December 26, 1973 as per baptismal certificate, wherein it appears that Rosario Baluyot was baptized on December 25,

1974 and was born on December 26, 1973 as testified to by Fr. Roque Villanueva of St. James Parish Church who issued the Baptismal Certificate, having custody and possession of the book of baptism for the year 1975, but admitted that he had no personal knowledge about the matters or entries entered therein. 1ikewise, the defense's stand is that the accused cannot be liable for Homicide because a vibrator is not a weapon of death but it is a thing for the purpose of giving sexual pleasure, and that the death of Rosario Baluyot was due to the incompetence of Dr. Rosete, the surgeon and Director of the Olongapo City General Hospital, who operated on her." (Rollo, pp. 109-116) On March 29, 1989, the trial court rendered its decision. The dispositive portion of the decision reads as follows: "WHEREFORE, IN VIEW OF ALL THE FOREGOING, the Court holds, that the prosecution has established the GUILT of the accused beyond reasonable doubt for the crime of Rape with Homicide as defined and penalized in Art. 335 No. 3 of the Revised Penal Code, and hereby sentences HEINRICH STEFAN RITTER to a penalty of RECLUSION PERPETUA, to indemnify the heirs of the deceased in the sum of SIXTY THOUSAND PESOS (P60,000.00) Philippine Currency, and TEN THOUSAND PESOS (P10,000.00) by way of attorney's fees to the private prosecutors and to pay the costs." (Rollo, p. 126) The accused now comes to this Court on the following assigned errors allegedly committed by the court: I THE TRIAL COURT GRAVELY ERRED AND ABUSED ITS DISCRETION IN FINDING THAT THE ALLEGED OFFENSE WAS COMMITTED ON OCTOBER 10, 1986 AND THAT IT WAS ACCUSED-APPELLANT WHO COMMITTED IT. II THE TRIAL COURT GRAVELY ERRED AND ABUSED ITS DISCRETION IN FINDING THAT ROSARIO BALUYOT WAS LESS THAN TWELVE (12) YEARS OLD WHEN THE ALLEGED OFFENSE WAS COMMITTED AND IN HOLDING THAT THERE WAS RAPE WITH HOMICIDE. III THE TRIAL COURT GRAVELY ERRED AND ABUSED ITS DISCRETION IN GIVING CREDENCE TO AND NOT REJECTING THE PROSECUTION'S EVIDENCE AND IN NOT UPHOLDING THAT OF THE DEFENSE AND ACQUITTING THE ACCUSED. Inasmuch as it is the bounden duty of this Court to affirm a judgment of conviction only if the guilt of the accused has been proved beyond reasonable doubt, it behooves us to exert the most painstaking effort to examine the records in the light of the arguments of both parties if only to satisfy judicial conscience that the appellant indeed committed the criminal act (See People v. Villapana, 161 SCRA 73 [1988]). The appellant was convicted by the trial court of the crime of rape with homicide of a young girl who died after the rape because of a foreign object, believed to be a sexual vibrator, left inside her vagina. As stated by the trial court one crucial issue in this case is the age of the victim whether or not Rosario Baluyot was less than twelve (12) years old at the time the alleged incident happened on October 10, 1986. The age is important in determining whether or not there was statutory rape. Article 335 of the Revised Penal Code defines the third type of rape as having carnal knowledge of a woman under 12 years of age, in which case force, intimidation, deprivation of reason or unconscious state do not have to be present. prLL The trial court found that Rosario was below 12 years old when she was sexually abused by the accused and, therefore, rape was committed inspite of the absence of force or intimidation. In resolving the issue, the trial court put great weight on the testimonies of the victim's grandmother and father who testified that she was born on December 22, 1975. These oral declarations were admitted pursuant to then Rule 130, Section 33 of the Rules of Court where, in the absence of a birth certificate, the act or declaration about pedigree may be received in evidence on any notable fact in the life of a member of the family. Since birth is a matter of pedigree within the rule which permits the admission of hearsay evidence, oral declarations are therefore admissible as proof of birth (Decision, p. 54). llcd

The grandmother, Maria Burgos Turla, testified that she remembered Rosario's birth date because her brother died in Pampanga and her daughter, Anita (Rosario's mother) was the only one who failed to attend the funeral because the latter has just given birth allegedly to Rosario (T.S.N. p. 8, Jan. 13, 1988). The father likewise testified that as far as he could remember, Rosario was born on December 22, 1975 (T.S.N., p. 4, Jan. 27, 1988) and he was certain that Rosario was more than one (1) year old when she was baptized (T.S.N., p. 45, Jan. 27, 1988). The trial court further added that their testimony is supported by the clinical record and the death certificate indicating that she was 12 years old when she was admitted at the Olongapo City General Hospital for treatment. The age was supplied by Rosario's alleged guardian, Gaspar Alcantara to the hospital's clinical record clerk, Lorna Limos. Fe Israel, a social worker who interviewed Rosario Baluyot also testified that she was told by Rosario that she was 12 years old. The trial court accepted this as adequate evidence of the truth. Moreover, Jessie Ramirez, the principal witness in this case declared that he was born on September 5, 1973 and that he was older than Rosario Baluyot. Therefore, since he was 13 years old in 1986, Rosario must have been less than 12 years old in 1986. (Decision, p. 55) Cdpr The trial court concluded that the oral declarations of the grandmother and father supported by other independent evidence such as the clinical record, death certificate and the testimonies of Fe Israel and Jessie Ramirez, rendered the baptismal certificate presented by the defense without any probative or evidentiary value. (Decision, p. 55) The findings of the trial court with respect to Rosario Baluyot's age cannot stand the application of evidentiary rules. The trial court relied on Section 33, Rule 130 (now Section 40 of Rule 130 of the 1989 Revised Rules of Court). For oral evidence to be admissible under this Rule, the requisites are: (1) (2) (3) (4) That the declarant must be dead or outside of the Philippines or unable to testify; That pedigree is in issue; That the person whose pedigree is in question must be related to the declarant by birth or marriage; That the declaration must be made before the controversy occurred or ante litem motam; and

(5) That the relationship between the declarant and the person whose pedigree is in question must as a general rule be shown by evidence other than such act or declaration." These requirements were not satisfied by the evidence for the prosecution nor do the declarations fall within the purview of the rule. The victim's grandmother and father whose declarations regarding Rosario's age were admitted by the trial court are both alive, in the Philippines and able to testify as they both did testify in court. Their declarations were made at the trial which is certainly not before the controversy arose. The other witnesses who testified on Rosario's age are not members of the victim's family. The testimonies of Rosario's relatives must be weighed according to their own personal knowledge of what happened and not as hearsay evidence on matters of family history. cdphil At this point, we find the evidence regarding Rosario's age of doubtful value. The trial court justified the admissibility of the grandmother's testimony pursuant to the ruling laid down in U.S. v. Bergantino, (3 Phil., 118 [1903]) where the Court accepted the testimony of the mother that her daughter was 14 years old and 4 months old. The mother stated that she knew the age because the child was born about the time of the cholera epidemic of 1889. This was not hearsay, but came from one who had direct knowledge of the child's birth. It is however, equally true that human memory on dates or days is frail and unless the day is an extraordinary or unusual one for the witness, there is no reasonable assurance of its correctness. (People v. Dasig, 93 Phil. 618, 632 [1953]). With respect to the grandmother's testimony, the date of the brother's death or funeral was never established, which indicates that the day was rather insignificant to be remembered. The father's declaration is likewise not entirely reliable. His testimony

in court does not at all show that he had direct knowledge of his daughter's birth. He was certain though that she was more than one (1) year old at the time she was baptized. The other witnesses are not at all competent to testify on the victim's age, nor was there any basis shown to establish their competence for the purpose. The clinical records were based on Gaspar Alcantara's incompetent information given when he brought the victim to the hospital. Alcantara came to know her only about a year before her death. He had absolutely no knowledge about the circumstances of Rosario's birth. The death certificate relied upon by the trial court was merely based on the clinical records. It is even less reliable as a record of birth. All the evidence presented by the prosecution showing that Rosario Baluyot was less than 12 years old at the time of the alleged incident are not adequate to establish the exact date of birth, much less offset a documentary record showing a different date. The defense presented Rosario Baluyot's baptismal certificate which the trial court rejected as being hearsay and of no value. As against the oral declarations made by interested witnesses establishing Rosario's age to be less than 12 years old, the evidence on record is more convincing and worthy of belief. (See Filinvest Land, Inc. v. Court of Appeals, 183 SCRA 664, 673 [1990]). By virtue of a subpoena duces tecum and ad testificandum, issued by the lower court to the St. James Parish Church, Subic, Zambales, Fr. Roque Villanueva a Roman Catholic priest testified and stated that he is the head of said parish. He brought with him Baptismal Register No. 9 entitled "Liber Baptisnorum", a latin term for baptismal book or record. On page 151, No. 3 of the said Registry Book, there appears the name of Rosario Baluyot who was baptized on December 25, 1974, and born on December 26, 1973. Parents are Policarpio Baluyot and Anita Burgos, residents of Subic, Zambales. Edita R. Milan appears as the only sponsor with Olongapo City as her address. LLjur In the case of Macadangdang v. Court of Appeals (100 SCRA 73 [1980]), we held that: xxx xxx xxx

"In our jurisprudence, this Court has been more definite in its pronouncements on the value of baptismal certificates. It thus ruled that while baptismal and marriage certificates may be considered public documents, they are evidence only to prove the administration of the sacraments on the dates therein specified but not the veracity of the status or declarations made therein with respect to his kinsfolk and/or citizenship (Paa v. Chan, L-25945, Oct. 31, 1967). Again, in the case of Fortus v. Novero (L-22378, 23 SCRA 1331 [1968]), this Court held that a baptismal certificate is conclusive proof only of the baptism administered, in conformity with the rites of the Catholic Church by the priest who baptized the child, but it does not prove the veracity of the declarations and statements contained in the certificate that concern the relationship of the person baptized. Such declarations and statements, in order that their truth may be admitted, must indispensably be shown by proof recognized by law." (At pp. 84-85) In the same light, the entries made in the Registry Book may be considered as entries made in the course of business under Section 43 of Rule 130, which is an exception to the hearsay rule. The baptisms administered by the church are one of its transactions in the exercise of ecclesiastical duties and recorded in a book of the church during the course of its business. (U.S. v. de Vera, 28 Phil. 105 [1914]) Hence, the certificate (Exhibit "22") presented by the defense that Rosario Baluyot was baptized on December 25, 1974 may be admitted in evidence as proof of baptism. Policarpio Baluyot, the victim's father testified that he had in his possession a baptismal certificate different from the one presented in court. However, no other baptismal record was ever presented to prove a date different from that brought by the official custodian. Since the baptismal certificate states that Rosario was baptized on December 25, 1974, it is therefore highly improbable that Rosario could have been born on December 22, 1975. She could not have been baptized before she was born. Exhibit "22" may be proof only of baptism but it puts a lie to the declaration that Rosario was born in 1975. With the father's assertion that Rosario was more than one (1) year old when she was baptized, we are then more inclined to agree that Rosario was born in 1973 as stated in the Baptismal Registry. Cdpr In the case of People v. Rebancos (172 SCRA 425 [1989]), the Court stated: xxx xxx xxx

". . . Although no birth certificate was presented because her birth had allegedly not been registered, her baptismal certificate, coupled by her mother's testimony, was sufficient to establish that Mary Rose was below twelve years old when she was violated by Rebancos." (At. p. 426) Unfortunately, in the instant case, nobody could corroborate the date on a more reliable document as to Rosario's birth which could serve as sufficient proof that she was born on December 26, 1973. Therefore, she was more than 12 years old at the time of the alleged incident on October 10, 1986. Moreover, it is not incumbent upon the defense to prove Rosario's age. The burden of proof lies on the prosecution to prove that Rosario was less than 12 years old at the time of the alleged incident in a charge of statutory rape. The prosecution failed in this respect. Since Rosario was not established to have been under 12 years of age at the time of the alleged sexual violation, it was necessary to prove that the usual elements of rape were present; i.e. that there was force of intimidation or that she was deprived of reason or otherwise unconscious in accordance with Article 335 of the Revised Penal Code. We agree with the defense that there was no proof of such facts. On the contrary, the evidence shows that Rosario submitted herself to the sexual advances of the appellant. In fact, she appears to have consented to the act as she was paid P300.00 the next morning while her companion, Jessie Ramirez was paid P200.00 (T.S.N. p. 50, January 6, 1988). The environmental circumstances coupled with the testimonies and evidence presented in court clearly give the impression that Rosario Baluyot, a poor street child, was a prostitute inspite of her tender age. Circumstances in life may have forced her to submit to sex at such a young age but the circumstances do not come under the purview of force or intimidation needed to convict for rape. In view of these clear facts which the prosecution failed to refute, no rape was committed. But was Ritter guilty of homicide? The trial court justified its ruling by saying that the death of the victim was a consequence of the insertion of the foreign object into the victim's vagina by the appellant. We now ask "Was the appellant responsible for the sexual vibrator left inside Rosario's vagina which led to her death? The trial court convicted the accused based on circumstantial evidence. Unfortunately, the circumstances are capable of varying interpretations and are not enough to justify conviction. Jessie Ramirez, the principal witness did not actually see the object inserted in Rosario's vagina. Neither could he identify the object (Exhibit "C-2") taken from Rosario as the same object which the appellant was holding at that time of the alleged incident. In his sworn statement given to the police investigator on September 4, 1987, he answered that: xxx xxx xxx

"T Habang kayo ay nasa loob ng kuwarto ng otel, mayroon ka bang napansin na inilabas ng kano sa kanyang daladalahan kung mayroon man? S Ang Amerikano ay may dala-dalang shoulder bag na kulay itim, at napansin ko na may inilabas siya sa kanyang bag na parang vicks inhaler, na kanyang inamoy-amoy habang nasa otel kami at pagkatapos niya ay inilapag niya sa lamiseta. T Ilarawan mo nga sa akin ang bagay na nakita mong inilabas ng Amerikano?

S Ito ay may habang tatlong pulgada at ang takip nito ay may habang dalawang pulgada. Iyong takip ay bilog na patulis at may tabang mga kalahating pulgada. Hindi ko napansin ang hugis ng dulo ng bagay na may takip dahil natatakpan ng kamay at ilong ng Amerikano. T Ipinakikita ko sa iyo ang isang larawan. Tignan mong mabuti ang larawang ito at sabihin mo nga sa akin kung makikilala mo ang mga bagay na nasa larawang ito, na may kinalaman sa nakita mong kinuha ng Amerikano sa kanyang bag?

S Napansin ko na ang kulay asul na bagay sa larawan ay katulad na katulad noong takip ng bagay na inilabas ng Amerikano sa kanyang bag. Kaya lang ay bakit naging kulay asul gayong ng makita ko ito ay kulay puti? (Exhibit "A", p. 2; Emphasis Supplied). Presumably, what Jessie Ramirez saw was merely the Vicks inhaler which the appellant does not deny having possessed at that time. He was certain that the object was white. (T.S.N. p. 91, January 6, 1988). Later, Ramirez retracted and corrected himself. He said that it was grayish in color with color blue (Medyo kulay abo na may kulay na parang blue). (T.S.N. p. 92, January 6, 1988) The inconsistency of the witness' testimony casts doubt as to the veracity of the statements made especially when he answered on additional cross-examination that the reason why he concluded that Exhibit "C-2" was the same object being held by Ritter was because it was the only one shown to him by the prosecution (T.S.N. pp. 109-110, January 6, 1988). Jessie Ramirez was not all certain about the sexual vibrator because he did not actually see it in the possession of the appellant. What he merely remembers is the revelation made by Rosario the next morning that the foreigner inserted something inside her vagina. The trial court admitted such statement as part of the res gestae. In a strained effort to accept such statement as part of res gestae, the trial court focused the test of admissibility on the lapse of time between the event and the utterance. For the average 13 years old, the insertion of a mechanical device or anything for that matter into the vagina of a young girl is undoubtedly startling. For Rosario and Jessie, however, there must be more evidence to show that the statement, given after a night's sleep had intervened, was given instinctively because the event was so startling. Res gestae does not apply. (Section 42, Rule 130, Rules of Court). Even if it were established that the appellant did insert something inside Rosario's vagina, the evidence is still not adequate to impute the death of Rosario to the appellant's alleged act. Jessie Ramirez testified that Rosario was able to remove the object inserted in her vagina. We quote: "Q Now, you also stated on direct examination that later on Rosario even categorically admitted to you that she was already able to remove the object allegedly inserted inside her vagina, is that correct? A xxx Yes, sir. xxx xxx

ATTY. CARAAN: Q Will you kindly tell to this Honorable Court the exact words used by Rosario Baluyot later on when you met her when you asked her and when she told you that she was already able to remove that object from her vagina? A "Oy, Jessie, natanggal na, "she told me that. I asked her, "Was it already removed?" And she answered, 'Yes, it was removed.' But the same night, she again complained of pain of her stomach. She sent one of her friends to call for me. And as a matter of fact, Tomboy was uttering defamatory words against me as she was groaning in pain." (TSN, Jan. 6, 1988, pp. 72-73). This encounter happened on the night of the day following the day after both children were invited by the foreigner to the hotel. (T.S.N. p. 73, January 6, 1988). Rosario was said to be groaning in pain so we can just imagine the distress she was undergoing at this point in time. If the device inserted by the appellant caused the pain, it is highly inconceivable how she was able to endure the pain and discomfort until May, 1987, seven (7) months after the alleged incident. Evidence 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. (People vs. Patog, 144 SCRA 429 [1986]). At this juncture, we find Dr. Pedro Solis' testimony rather significant. Dr. Pedro Solis, a witness for the defense is considered an expert witness. (A Doctor of Medicine and a graduate of the State University in 1940, a degree of Bachelor of Laws and member of the Bar 1949, and a graduate of the Institute of Criminology University. He was awarded Post Graduate Diploma in Criminology in 1963, and also a graduate of United Nations Asia and Far East Asia Institute on the Prevention of Crimes in Tokyo Japan 1965. He was appointed Medico Legal Officer of the National Bureau of Investigation in 1940 until 1944. He became Chief Medico Legal Officer in 1970 and became the Deputy Director of the NBI up to 1984. He is at present a

Professorial Lecturer on Legal Medicine at the UP, FEU, UE, and Fatima College of Medicine; a Medico Legal Consultant of the PGH Medical Center, Makati Medical Center, UERM Medical Center, MCU Medical Center. He has been with the NBI for 43 years. He has attended no less than 13 conferences abroad. He is the author of the textbooks entitled "Legal Medicine" and "Medical Jurisprudence".) With his impressive legal and medical background, his testimony is too authoritative to ignore. We quote the pertinent portions of his testimony: Q Now Dr. Solis, would you kindly go over this object marked as Exh. 'C-2' which object was described as a part of a sexual vibrator battery operated. Now, given this kind of object, would you kindly tell us what would be the probable effect upon a 12 years old girl when it is inserted into her vagina? A Well, this vibrator must be considered a foreign body placed into a human being and as such be considered a foreign object. As a foreign object, the tendency of the body may be: No. 1 expel the foreign body No. 2. The tendency of the body is to react to that foreign body. One of the reactions that may be manifested by the person wherein such foreign body is concerned is to cover the foreign body with human tissue, in a way to avoid its further injury to the body. Now, the second reaction is irritation thereby producing certain manifest symptoms and changes in the area where the foreign body is located. In severe cases, the symptoms' manifestation might not only be localized but may be felt all over the body, we call it systemic reaction. Now, considering the fact that this foreign body as shown to me is already not complete, this shows exposure of its different parts for the body to react. If there is mechanism to cause the foreign body to vibrate, there must be some sort of power from within and that power must be a dry cell battery. [The] composition of the battery are, manganese dioxide ammonium, salts, water and any substance that will cause current flow. All of these substances are irritants including areas of the container and as such, the primary reaction of the body is to cause irritation on the tissues, thereby inflammatory changes develop and in all likelihood, aside from those inflammatory changes would be a supervening infection in a way that the whole generative organ of the woman will suffer from diseased process causing her the systemic reaction like fever, swelling of the area, and other systemic symptoms. . . . (TSN., pp. 13-15, October 19, 1988) xxx xxx xxx

Q Now, given this object, how long would it take, Doctor before any reaction such as an infection would set in, how many days after the insertion of this object in the vagina of a 12 year old girl? A In the example given to me, considering that one of the ends is exposed, in a way that vaginal secretion has more chance to get in, well, liberation of this irritant chemicals would be enhanced and therefore in a shorter period of time, there being this vaginal reaction. Q How many days or weeks would you say would that follow after the insertion?

A As I said, with my experience at the NBI, insertion of any foreign body in the vaginal canal usually developed within a period of two (2) weeks . . .. xxx xxx xxx

Q . . . [T]he subject in this case was allegedly raped, and a sexual vibrator was inserted in her vagina on October 10, 1986 and she was operated on, on May 19, 1987 the following year, so it took more than 7 months before this was extracted, would you say that it will take that long before any adverse infection could set-in inside the vagi