JUDICIAL ADMISSION

1.  Republic Glass Corporation vs. Qua, G.R. No. 144413, 30 July 2004

Petitioners Republic Glass Corporation ("RGC") and Gervel, Inc. ("Gervel") together with
respondent Lawrence C. Qua ("Qua") were stockholders of Ladtek, Inc. ("Ladtek"). Ladtek obtained
loans from Metropolitan Bank and Trust Company ("Metrobank")[5] and
Private Development Corporation of the Philippines[6] ("PDCP") with RGC, Gervel and Qua as
sureties. Among themselves, RGC, Gervel and Qua executed Agreements for Contribution,
Indemnity and Pledge of Shares of Stocks ("Agreements").
The Agreements all state that in case of default in the payment of Ladtek's loans, the parties would
reimburse each other the proportionate share of any sum that any might pay to the creditors.
Under the same Agreements, Qua pledged 1,892,360 common shares of stock of General Milling
Corporation ("GMC") in favor of RGC and Gervel. The pledged shares of stock served as security
for the payment of any sum which RGC and Gervel may be held liable under the Agreements.
Ladtek defaulted on its loan obligations to Metrobank and PDCP. Hence, Metrobank filed a
collection case against Ladtek, RGC, Gervel and Qua... which was raffled to the Regional Trial Court
of Makati
During the pendency of Collection Case No. 8364, RGC and Gervel paid Metrobank P7 million. 
Later, Metrobank executed a waiver and quitclaim dated 7 September 1988 in favor of RGC and
Gervel. Based on this waiver and quitclaim,[9] Metrobank, RGC and Gervel filed on 16 September
1988 a joint motion to dismiss Collection Case No. 8364 against RGC and Gervel.  Accordingly,
RTC-Branch 149 dismissed the case against RGC and Gervel, leaving Ladtek and Qua as defendants.
RGC and Gervel's counsel, Atty. Antonio C. Pastelero, demanded that Qua pay P3,860,646, or
42.22% of P8,730,543.55,[11] as reimbursement of the total amount RGC and Gervel paid to
Metrobank and PDCP. Qua... refused to reimburse the amount to RGC and Gervel.  Subsequently,
RGC and Gervel furnished Qua with notices of foreclosure of Qua's pledged shares.
Qua filed a complaint for injunction and damages with application for a temporary restraining order...
with RTC-Branch 63 to prevent RGC and Gervel from foreclosing the pledged shares.
ISSUE
Whether or not judicial admission is present in this case
RULING
An admission , verbal or written, made by a party in the course of the proceedings in the same case
does not require proof. The admission may be contradicted only by showing that it was made through
palpable mistake or that no such admission was made.
A party may make judicial admissions in:
a. The pleadings filed by the parties
b. During the trial either by verbal or written  manifestations or stipulations
c. In other stages of the judicial proceeding
The elements of judicial admissions are absent in this case. Qua made conflicting statements ‘not in
the same case” (Collection Case and Foreclosure Case) as required in Section 4 of Rule 129. To
constitute judicial admission, the admission must be made in the same case in which it is offered. 
If made in another case or in another court, the fact of such admission must be proved as in the case
of any other fact, although if made in a judicial proceeding, it is entitled to greater weight.
 
2.  Programe Incorporated vs. Province of Bataan, G.R. No. 144635, 26 June 2006

Corona, J.:

FACTS: BASECO was the owner of Piazza Hotel and Mariveles Lodge, both located in
Mariveles, Bataan. On May 14, 1986, BASECO granted petitioner a contract of lease over Piazza
Hotel at a monthly rental of P6,500 for 3 years, from Jan. 1, 1986 to Jan. 1, 1989. In April 1989,
the PCGG issued a sequestration order against BASECO and among the properties provisionally
seized and taken over was the lot on which Piazza Hotel stood.

On July 19, 1989, Piazza Hotel was sold at a public auction for non-payment of taxes to
respondent Province of Bataan. The title of the property was transferred to respondent. 

On July 21, 1989, petitioner filed a complaint for preliminary injunction and collection of sum of
money against BASEC. Respondent, as the new owner of the property, filed a motion for leave
to intervene. It prayed that petitioner be ordered to vacate Piazza Hotel and Mariveles Lodge for
lack of legal interest.

After trial on the merits, the trial court rendered judgment in favor of respondent Province of
Bataan. CA affirmed said ruling.

ISSUE: WHETHER OR NOT Province of Bataan was the legitimate owner of the Piazza Hotel
and Mariveles Lodge

RULING: YES. 

The evidence clearly established respondent’s ownership of Piazza Hotel. First, the title of the
land on which Piazza Hotel stands was in the name of respondent. Second, Tax Declaration No.
12782 was in the name of respondent as owner of Piazza Hotel. Third, petitioner was doubtlessly
just a lessee. In the lease contract annexed to the complaint, petitioner in fact admitted
BASECO’s ownership then of the subject property. A stipulation in the contract read:

WHEREAS, the lessor (BASECO) is the owner of the building PIAZZA HOTEL and its outlet
MARIVELES LODGE located at BASECO, Mariveles, Bataan x x x (emphasis ours) 

The Rules of Court states that “[a]n admission, verbal or written, made by a party in the course
of the proceedings in the same case, does not require proof. The admission may be contradicted
only by showing that it was made through palpable mistake or that no such admission was
made.”

In its own complaint for preliminary injunction and sum of money, petitioner acknowledged that
it was not the owner of the property when it stated that “BASECO leased to petitioner the
building Piazza Hotel and its outlet Mariveles Lodge for monthly rentals of P6,500.00.”
Petitioner could not possibly be the owner of a building leased to it.

3.  Camitan vs. Fidelity Insurance Corporation, G.R. No. 163684, 16 April 2008

FACTS:
Petitioners Camitan and Lopez filed a petition for issuance of another duplicate copy of TCT
before the RTC in Calamba, alleging that the owner’s copy was lost and cannot be found. This
was granted by the Calamba RTC. Fidelity filed a petition for annulment of judgment and
cancellation of the TCT alleging that they had the owner’s duplicate of the TCT, obtained
through purchase, and that they have been in open and continuous possession of the subject land
for about 27 years. The Court of Appeals gave due course to the petition and ordered Fidelity to
present the TCT during the Preliminary Conference. During the Preliminary Conference, the
counsel for petitioners admitted to the genuineness of the TCT presented by Fidelity. Petitioner’s
counsel, in a subsequent memorandum retracted his statement citing honest mistake and
negligence owing to his excitement and nervousness in appearing before the Court of Appeals.
They also pointed out some irregularities in the TCT (the purported duplicate copy of the title in
question submitted by the respondent to the Court of Appeals, the judicial form thereof was
already small and it clearly appeared that it might have been NEWLY ISSUED NEW COPY OF
TITLE. It might be the revised new form in 1988 that is presently used in the Register of Deeds).
Fidelity argues that Petitioners are bound by the Judicial Admission made by their counsel
during the preliminary conference. The court of appeals held that the judicial admission is
conclusive upon the party making it and cannot be contradicted unless previously shown to have
been made through palpable mistake or that no such admission was made. It also held that honest
mistake and negligence are not sufficient grounds to invalidate the admission.

 ISSUE: Whether the Court of Appeals erred when it did not consider that the judicial admission
of petitioners counsel was a palpable mistake

 RULING: NO. The transcript of the preliminary conference indubitably shows that
counsel for petitioners made a judicial admission and failed to refute that admission during
the said proceedings despite the opportunity to do so. As correctly pointed out by the CA,
such an admission may only be refuted upon a proper showing of palpable mistake or that
no such admission was made. Thus, the claim of “honest mistake and negligence” on the
part of the counsel due to his excitement and nervousness in appearing before the CA did
not suffice.

 Upon examination of the said exhibits on record, it appears that the alleged discrepancies are
more imagined than real. Had these purported discrepancies been that evident during the
preliminary conference, it would have been easy for petitioners’ counsel to object to the
authenticity of the owner’s duplicate copy of the TCT presented by Fidelity. As shown in the
transcript of the proceedings, there was ample opportunity for petitioners’ counsel to examine the
document, retract his admission, and point out the alleged discrepancies. But he chose not to
contest the document. Thus, it cannot be said that the admission of the petitioners’ counsel was
made through palpable mistake. The mistake or negligence of the client’s counsel, which may
result in the rendition of an unfavorable judgment, generally binds the client. To rule otherwise
would encourage every defeated party, to claim neglect or mistake on the part of his counsel.
Then, there would be no end to litigation.

Exception: where the counsel’s mistake is so great and serious that the client is deprived of
his day in court or of his property without due process of law. In these cases, the client is
not bound by his counsel’s mistakes and the case may even be reopened. In the case at bar,
however, these exceptional circumstances do not obtain.
4.  Cuenco vs. Talisay Tourist Sports Complex, G.R. No. 174154, 17 October 2008

FACTS:

Petitioner leased from respondent a property to be operated as a cockpit. Upon expiration of the
contract, respondent company conducted a public bidding for the lease of the property. Petitioner
participated in the bidding. The lease was eventually awarded to another bidder. Thereafter,
petitioner formally demanded, through several demand letters, for the return of his deposit in the
sum of P500, 000.00. It, however, all remained unheeded.

Thus, petitioner filed a Complaint for sum of money maintaining that respondents acted in bad
faith in withholding the amount of the deposit without any justifiable reason. In their Answer,
respondents countered that petitioner caused physical damage to the leased premises and the cost
of repair and replacement of materials amounted to more than P500,000.00.

The RTC issued a Pre-trial Order in which respondent admitted that there is no inventory of
damages. The respondents later offered an inventory which was admitted by the said trial court.
The RTC ruled favorably for the petitioner. The CA reversed said decision.

ISSUES: Whether a judicial admission is conclusive and binding upon a party making the
admission.

HELD: Yes.

Obviously, it was on Coronado's testimony, as well as on the documentary evidence of an

alleged property inventory conducted on June 4, 1998, that the CA based its conclusion that the
amount of damage sustained by the leased premises while in the possession of petitioner
exceeded the amount of petitioner's deposit. This contradicts the judicial admission made by
respondents' counsel which should have been binding on the respondents.

Section 4, Rule 129 of the Rules of Court provides:

SEC. 4. Judicial admissions. - An admission, verbal or written, made by a party in the course of
the proceedings in the same case, does not require proof. The admission may be contradicted
only by a showing that it was made through palpable mistake or that no such admission was
made.

A party may make judicial admissions in (1) the pleadings, (2) during the trial, by verbal or
written manifestations or stipulations, or (3) in other stages of the judicial proceeding. The
stipulation of facts at the pre-trial of a case constitutes judicial admissions. The veracity of
judicial admissions require no further proof and may be controverted only upon a clear showing
that the admissions were made through palpable mistake or that no admissions were made. Thus,
the admissions of parties during the pre-trial, as embodied in the pre-trial order, are binding and
conclusive upon them.
Respondents did not deny the admission made by their counsel, neither did they claim that the
same was made through palpable mistake. As such, the stipulation of facts is incontrovertible and
may be relied upon by the courts. The pre-trial forms part of the proceedings and matters dealt
therein may not be brushed aside in the process of decision-making. Otherwise, the real essence
of compulsory pre-trial would be rendered inconsequential and worthless. Furthermore, an act
performed by counsel within the scope of a "general or implied authority" is regarded as an act of
the client which renders respondents in estoppel. By estoppel is meant that an admission or
representation is conclusive upon the person making it and cannot be denied or disproved as
against the person relying thereon.

Thus, respondents are bound by the admissions made by their counsel at the pre-trial.
Accordingly, the CA committed an error when it gave ample evidentiary weight to respondents'
evidence contradictory to the judicial admission.

5.  Asia Pacific Planners vs. City of Urdaneta, G.R. no. 162525, 23 September 2008

FACTS:

This case stemmed from a Complaint for annulment of contracts with prayer for preliminary
prohibitory injunction and TRO filed by respondent Del Castillo, in his capacity as
taxpayer,against respondents City of Urdaneta and Capalad doing business under the name
JJEFWA Builders, and petitioners APP and APP Construction and Dev’t. Corp. (APPCDC).

Del Castillo alleged that then Urdaneta City Mayor entered into 5 contracts for the preliminary
design, construction and management of a 4-storey twin cinema commercial center and hotel
amounting to P250M, funded by a loan from the PNB. For minimal work, the contractor was
allegedly paid P95M. Del Castillo claimed that all the contracts are void because the object is
outside the commerce of men, which is a piece of land belonging to the public domain and which
remains devoted to a public purpose as a public elementary school. He also claimed that the
contracts are void because they were all awarded solely to the Goco family.

In their Answer, APP and APPCDC, and Urdaneta City asserted that the contracts were valid.
Respondent Capalad, through counsel, likewise filed an Answer with compulsory counterclaim
and motion to dismiss on the ground that Del Castillo has no legal standing to sue.

After pre-trial, Urdaneta City filed an Omnibus Motion with prayer to (1) withdraw Urdaneta
City’s Answer; (2) drop Urdaneta City as defendant and be joined as plaintiff; (3) admit
Urdaneta City’s complaint; and (4) conduct a new pre-trial, which the RTC granted.

The RTC also granted Capalad’s motion to expunge all pleadings filed by his counsel. Capalad
was dropped as defendant, and his complaint was admitted and consolidated with the complaints
of Del Castillo and Urdaneta City.
Aggrieved, APP and APPCDC filed a petition for certiorari before the CA, which was dismissed.
APP and APPCDC’s subsequent MR was likewise denied.

ISSUE:

WON the RTC erred and commited grave abuse of discretion in allowing respondents Capalad
and Urdaneta City to switch from being defendants to becoming complainants.

RULING: No, the court may allow amendment of pleadings. Sec. 5, Rule 10 of the Rules of
Court pertinently provides that if evidence is objected to at the trial on the ground that it is not
within the issues raised by the pleadings, the court may allow the pleadings to be amended and
shall do so with liberality if the presentation of the merits of the action and the ends of
substantial justice will be subserved thereby. Objections need not even arise in this case since the
Pre-trial Order already defined as an issue whether the contracts are valid. Thus, what is needed
is presentation of the parties’ evidence on the issue. Any evidence of the city for or against the
validity of the contracts will be relevant and admissible. Note also that under Sec. 5, Rule 10,
necessary amendments to pleadings may be made to cause them to conform to the evidence. In
addition, despite Urdaneta City’s judicial admissions, the RTC is still given leeway to consider
other evidence to be presented for said admissions may not necessarily prevail over documentary
evidence, e.g., the contracts assailed. A party’s testimony in open court may also override
admissions in the Answer.

6.  Spouses JESUS CUENCO vs. TALISAY TOURIST SPORTS COMPLEX, INC. and
MATIAS B. AZNAR III [G.R. No. 174154, October 17, 2008]

FACTS:

Petitioner leased from respondent a property to be operated as a cockpit. Upon expiration of the
contract, respondent company conducted a public bidding for the lease of the property. Petitioner
participated in the bidding. The lease was eventually awarded to another bidder. Thereafter,
petitioner formally demanded, through several demand letters, for the return of his deposit in the
sum of P500, 000.00. It, however, all remained unheeded.

Thus, petitioner filed a Complaint for sum of money maintaining that respondents acted in bad
faith in withholding the amount of the deposit without any justifiable reason. In their Answer,
respondents countered that petitioner caused physical damage to the leased premises and the cost
of repair and replacement of materials amounted to more than P500,000.00.

The RTC issued a Pre-trial Order in which respondent admitted that there is no inventory of
damages. The respondents later offered an inventory which was admitted by the said trial court.
The RTC ruled favorably for the petitioner. The CA reversed said decision.

ISSUES: Whether a judicial admission is conclusive and binding upon a party making the
admission.
HELD: Yes.

Obviously, it was on Coronado's testimony, as well as on the documentary evidence of an

alleged property inventory conducted on June 4, 1998, that the CA based its conclusion that the
amount of damage sustained by the leased premises while in the possession of petitioner
exceeded the amount of petitioner's deposit. This contradicts the judicial admission made by
respondents' counsel which should have been binding on the respondents.

Section 4, Rule 129 of the Rules of Court provides:

SEC. 4. Judicial admissions. - An admission, verbal or written, made by a party in the course of
the proceedings in the same case, does not require proof. The admission may be contradicted
only by a showing that it was made through palpable mistake or that no such admission was
made.

A party may make judicial admissions in (1) the pleadings, (2) during the trial, by verbal or
written manifestations or stipulations, or (3) in other stages of the judicial proceeding. The
stipulation of facts at the pre-trial of a case constitutes judicial admissions. The veracity of
judicial admissions require no further proof and may be controverted only upon a clear showing
that the admissions were made through palpable mistake or that no admissions were made. Thus,
the admissions of parties during the pre-trial, as embodied in the pre-trial order, are binding and
conclusive upon them.

Respondents did not deny the admission made by their counsel, neither did they claim that the
same was made through palpable mistake. As such, the stipulation of facts is incontrovertible and
may be relied upon by the courts. The pre-trial forms part of the proceedings and matters dealt
therein may not be brushed aside in the process of decision-making. Otherwise, the real essence
of compulsory pre-trial would be rendered inconsequential and worthless. Furthermore, an act
performed by counsel within the scope of a "general or implied authority" is regarded as an act of
the client which renders respondents in estoppel. By estoppel is meant that an admission or
representation is conclusive upon the person making it and cannot be denied or disproved as
against the person relying thereon.

Thus, respondents are bound by the admissions made by their counsel at the pre-trial.
Accordingly, the CA committed an error when it gave ample evidentiary weight to respondents'
evidence contradictory to the judicial admission.

Santos vs. Spouses Lumbao, G.R. No. 169129, 28 March 2007

CHICO-NAZARIO, J.:

Facts:

On two separate occasions during her lifetime, Rita sold to respondents Spouses Lumbao the
subject property which is a part of her share in the estate of her deceased mother, Maria Catoc.
On the first occasion, Rita sold 100 square meters of her inchoate share to respondents through a
document denominated as “Bilihan ng Lupa”. Respondents claim that the document was
witnessed by petitioners Virgilio and Tadeo Santos as shown by their signatures in said
document. On the second occasion Rita sold 7 square meters as evidence by a “Bilihan ng Lupa”

The respondent Spouses Lumbao then took possession of the lot and built a house thereon which
they have been occupying. They made several demands upon Rita to execute the necessary
documents for the issuance of a separate title to them. Rita replied that she could not do so since
the estate of her mother, Maria is yet to be partitioned. 

On May 2, 1986 the Spouses Lumbao claimed that the petitioners conspired and fraudulently
executed an extrajudicial settlement, partitioning and dividing among themselves the estate of
Maria which included the lot sold to them. The respondents through counsel sent demand letters
to petitioners but petitioners refused to reconvey the subject lot. Respondents then filed a
Complaint for Reconveyance with Damages. The RTC ruled in favor of petitioners. On appeal
the Court of Appeals reversed the decision of the RTC.

ISSUES:

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

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

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

RULING:

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

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

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

 Yes. Finally, the general rule that heirs are bound by contracts entered into by their
predecessors-in-interest applies in the present case. Article 1311 of the NCC is the basis of this
rule. It is clear from the said provision that whatever rights and obligations the decedent have
over the property were transmitted to the heirs by way of succession, a mode of acquiring the
property, rights and obligations of the decedent to the extent of the value of the inheritance of the
heirs.

7.  Casent Realty Development vs. Philbanking Corporation, G.R. No. 150731, 14
September 2007

Facts:

In 1984, petitioner Casent Realty Development Corporation executed 2 promissory notes in

favor of Rare Realty Corporation (Rare Realty) involving the amounts of PhP 300,000 (PN No.
84-04) and PhP 681,500 (PN No. 84-05). It was agreed the loans would earn an interest of 36%
and 18% per annum, respectively and penalty of 12% in case of non-payment on due dates. On
August 8, 1986, these promissory notes were assigned to  respondent Philbanking Corporation
through a Deed of Assignment.
Respondent alleged that despite demands, petitioner failed to pay the promissory notes upon
maturity such that its obligation already amounted to PhP 5,673,303.90 as of July 15, 1993.
Respondent filed on July 20, 1993 a complaint before the RTC for the collection of said amount.
In its Answer, petitioner raised the following as special/affirmative defenses, among others:

xxx

1. On August 27, 1986, the parties executed a Dacion en Pago (Dacion) which ceded and
conveyed petitioner’s property in Iloilo City to respondent, with the intention of totally
extinguishing petitioner’s outstanding accounts with respondent. Petitioner presented a
Confirmation Statement dated April 3, 1989 issued by respondent stating that petitioner
had no loans with the bank as of December 31, 1988.
2. Petitioner complied with the condition in the Dacion regarding the repurchase of the
property since the obligation was fully paid. Respondent sent confirmation statements in
the latter months of 1989, which showed that petitioner had no more outstanding loan;
and

Xxx

Thus, petitioner, by way of compulsory counterclaim, alleged that it made an overpayment of

approximately PhP 4 million inclusive of interest based on Central Bank Reference Lending
Rates on dates of overpayment. The parties failed to reach an amicable settlement during the
pre- trial conference. Thereafter, respondent presented its evidence and formally offered its
exhibits. Petitioner then filed a Motion for Judgment on Demurrer to the Evidence, pointing out
that the plaintiff’s failure to file a Reply to the Answer which raised the Dacion and Confirmation
Statement constituted an admission of the genuineness and execution of said documents; and
that since the Dacion obliterated petitioner’s obligation covered by the promissory notes, the
bank had no right to collect anymore.

Issues:

1. Does respondent’s failure to file a Reply and deny the Dacion and Confirmation
Statement under oath constitute a judicial admission of the genuineness and due
execution of these documents?
2. Should judicial admissions be considered in resolving a demurrer to evidence? If yes,
are the judicial admissions in this case sufficient to warrant the dismissal of the
complaint?

Ruling:
1. Yes. Rule 8, Section 8 specifically applies to actions or defenses founded upon a written
instrument and provides the manner of denying it. It is more controlling than Rule 6, Section 10
which merely provides the effect of failure to file a Reply. Thus, where the defense in the
Answer is based on an actionable document, a Reply specifically denying it under oath must be
made; otherwise, the genuineness and due execution of the document will be deemed admitted.
Since respondent failed to deny the genuineness and due execution of the Dacion and
Confirmation Statement under oath, then these are deemed admitted and must be considered
by the court in resolving the demurrer to evidence. We held in Philippine American General
Insurance Co., Inc. v. Sweet Lines, Inc., 212 SCRA 194 (1992), that “[w]hen the due execution
and genuineness of an instrument are deemed admitted because of the adverse party’s failure
to make a specific verified denial thereof, the instrument need not be presented formally in
evidence for it may be considered an admitted fact.”

2. Yes. What should be resolved in a motion to dismiss based on a demurrer to evidence is

whether the plaintiff is entitled to the relief based on the facts and the law. The evidence
contemplated by the rule on demurrer is that which pertains to the merits of the case, excluding
technical aspects such as capacity to sue.22 However, the plaintiff’s evidence should not be the
only basis in resolving a demurrer to evidence. The “facts” referred to in Section 8 should
include all the means sanctioned by the Rules of Court in ascertaining matters in judicial
proceedings. These include judicial admissions, matters of judicial notice, stipulations made
during the pre-trial and trial, admissions, and presumptions, the only exclusion being the
defendant’s evidence.

8.  Republic vs. Sandiganbayan, G.R. No.166859, 12 April 2011 

BERSAMIN, J.:

FACTS:

On July 31,1987 , the Republic commenced Civil Case No. 0033 in the Sandiganbayan
by complaint, impleading as defendants respondent Eduardo M. Conjuangco Jr. and 59
individuals defendants. The Republic up until August 31, 1991 amended its complaint several
times to include additional defendants including President Ferdinand Marcos and First Lady
Imelda Marcos. 

The Sandiganbayan allowed the subdivision of civil case no. 0033 into eight complaints
each pertaining to different transactions and properties and impleading as defendants only those
who have allegedly participated in the said transactions. One of which is Civil Case No. 0033F
which pertains to the acquisition of SMC shares of stock.  Allegedly, Conjuangco purchased
33,000,000 shares of stock of SMC through 14 holding compaies owned by CII Oil mills.

The Third Amended complaint of the Republic states:

“Defendant Eduardo Cojuangco, Jr. taking undue advantage of his association, influence and
connection, acting in unlawful concert with Defendants Ferdinand E. Marcos and Imelda R.
Marcos, and the individual defendants, embarked upon devices, schemes and stratagems,
including the use of defendant corporations as fronts, to unjustly enrich themselves at the
expense of Plaintiff and the Filipino people, such as when he - misused coconut levy funds to
buy out majority of the outstanding shares of stock of San Miguel Corporation in order to control
the largest agri-business, foods and beverage company in the Philippines”

On December 20, 1999 the Sandiganbayan scheduled the case for pre-trial. The parties
filed their pre-trial briefs. The pre-trial was actually held on May 24, 2000. On July 25, 2002,
before Civil Case No. 0033F could be set for trial, the Republic filed a Motion for Judgment on
the Pleadings and/or for Partial Summary Judgment. 

The Sandiganbayan issued its resolution of December 10, 2004, denying the Republic's
Motion for Partial Summary Judgment (Re: Shares in San Miguel  Corporation Registered in the
Respective Names of Defendants Eduardo M. Cojuangco, Jr. and the defendant Cojuangco
Companies) upon the following reasons:

In the instant case, a circumspect review of the records show that while there are facts which
appear to be undisputed, there are also genuine factual issues raised by the defendants which
need to be threshed out in a full-blown trial. Foremost among these issues are the following:

1) What are the "various sources" of funds, which the defendant Cojuangco and his
companies claim they utilized to acquire the disputed SMC shares?

2) Whether or not such funds acquired from alleged "various sources" can be considered
coconut levy funds;

3) Whether or not defendant Cojuangco had indeed served in the governing bodies of PC,
UCPB and/or CIIF Oil Mills at the time the funds used to purchase the SMC shares were
obtained such that he owed a fiduciary duty to render an account to these entities as well as to the
coconut farmers;

4) Whether or not defendant Cojuangco took advantage of his position and/or close ties
with then President Marcos to obtain favorable concessions or exemptions from the usual
financial requirements from the lending banks and/or coco-levy funded companies, in order to
raise the funds to acquire the disputed SMC shares; and if so, what are these favorable
concessions or exemptions?
 Answers to these issues are not evident from the submissions of the plaintiff and must
therefore be proven through the presentation of relevant and competent evidence during trial.  A
perusal of the subject Motion shows that the plaintiff hastily derived conclusions from the
defendants' statements in their previous pleadings although such conclusions were not supported
by categorical facts but only mere inferences. In the Reply dated October 2, 2003, the plaintiff
construed the supposed meaning of the phrase "various sources" (referring to the source of
defendant Cojuangco's funds which were used to acquire the subject SMC shares), which
plaintiff said was quite obvious from the defendants' admission in his Pre-Trial Brief, which we
quote:

"According to Cojuangco's own Pre-Trial Brief, these so-called `various sources', i.e., the
sources from which he obtained the funds he claimed to have used in buying the 20% SMC
shares are not in fact `various' as he claims them to be.  He says he obtained `loans' from UCPB
and `advances' from the CIIF Oil Mills. He even goes as far as to admit that his only evidence
in this case would have been `records of UCPB' and a `representative of the CIIF Oil Mills'
obviously the `records of UCPB' relate to the `loans' that Cojuangco claims to have obtained
from UCPB - of which he was President and CEO - while the `representative of the CIIF Oil
Mills' will obviously testify on the `advances' Cojuangco obtained from CIIF Oil Mills - of
which he was also the President and CEO."

ISSUE:

RULING:

No. Summary Judgment was not warranted; The Republic should have adduced
evidence to substantiate its allegations against the Respondents

We affirm the decision of November 28, 2007, because the Republic did not discharge its
burden as the plaintiff to establish by preponderance of evidence that the respondents' SMC
shares were illegally acquired with coconut-levy funds.

The decision of November 28, 2007 fully explained why the Sandiganbayan dismissed
the Republic's case against Cojuangco, et al., viz:

XXX XXX XXX

“We cannot agree with the plaintiff's contention that the defendant's statements in
his Pre-Trial Brief regarding the presentation of a possible CIIF witness as well as UCPB
records, can already be considered as admissions of the defendant's exclusive use and
misuse of coconut levy funds to acquire the subject SMC shares and defendant Cojuangco's
alleged taking advantage of his positions to acquire the subject SMC shares.  Moreover, in
ruling on a motion for summary judgment, the court "should take that view of the evidence most
favorable to the party against whom it is directed, giving such party the benefit of all favorable
inferences." Inasmuch as this issue cannot be resolved merely from an interpretation of the
defendant's statements in his brief, the UCPB records must be produced and the CIIF witness
must be heard to ensure that the conclusions that will be derived have factual basis and are thus,
valid.”
 Even assuming that, as plaintiff prayed for, the Court takes judicial notice of the evidence
it offered with respect to the Cojuangco block of SMC shares of stock, as contained in plaintiff's
manifestation of purposes, still its evidence do not suffice to prove the material allegations in the
complaint that Cojuangco took advantage of his positions in UCPB and PCA in order to acquire
the said shares.  As above-quoted, the Court, itself, has already ruled, and hereby stress that
"UCPB records must be produced and the CIIF witness must be heard to ensure that the
conclusions that will be derived have factual basis and are thus, valid." Besides, the Court found
that there are genuine factual issues raised by defendants that need to be threshed out in a full-
blown trial, and which plaintiff had the burden to substantially prove.  Thus, the Court outlined
these genuine factual issues as follows:

1) What are the "various sources" of funds, which defendant Cojuangco and his
companies claim they utilized to acquire the disputed SMC shares?

2) Whether or not such funds acquired from alleged "various sources" can be considered
coconut levy funds;

3) Whether or not defendant Cojuangco had indeed served in the governing bodies of
PCA, UCPB and/or CIIF Oil Mills at the time the funds used to purchase the SMC shares were
obtained such that he owed a fiduciary duty to render an account to these entities as well as to the
coconut farmers;

4) Whether or not defendant Cojuangco took advantage of his position and/or close ties
with then President Marcos to obtain favorable concessions or exemptions from the usual
financial requirements from the lending banks and/or coco-levy funded companies, in order to
raise the funds to acquire the disputed SMC shares; and if so, what are these favorable
concessions or exemptions?

Answers to these issues are not evident from the submissions of plaintiff and must
therefore be proven through the presentation of relevant and competent evidence during trial.  A
perusal of the subject Motion shows that the plaintiff hastily derived conclusions from the
defendants' statements in their previous pleadings although such conclusions were not supported
by categorical facts but only mere inferences.  xxx xxx xxx." 

Despite the foregoing pronouncement of the Court, plaintiff did not present any other
evidence during the trial of this case but instead made its manifestation of purposes, that later
served as its offer of evidence in the instant case, that merely used the same evidence it had
already relied upon when it moved for partial summary judgment over the Cojuangco block of
SMC shares. Altogether, the Court finds the same insufficient to prove plaintiff's allegations in
the complaint because more than judicial notices, the factual issues require the presentation of
admissible, competent and relevant evidence in accordance with Sections 3 and 4, Rule 128 of
the Rules on Evidence

9.  Republic vs. Cojuangco, et. al, G.R. No. 180702, 12 April 2011

Facts:

For over two decades, the issue of whether the sequestered sizable block of shares representing
20% of the outstanding capital stock of San Miguel Corporation (SMC) at the time of acquisition
belonged to their registered owners or to the coconut farmers has remained unresolved.

On July 31, 1987, the Republic commenced Civil Case No. 0033 in the Sandiganbayan by
complaint, impleading as defendants respondent Eduardo M. Cojuangco, Jr.  and 59 individual
defendants.

The Republic avers that defendant Eduardo Cojuangco, Jr. taking undue advantage of his
association, influence and connection, acting in unlawful concert with Defendants Ferdinand E.
Marcos and Imelda R. Marcos, and other  individuals closely associated with the Marcoses,
embarked upon devices, schemes and stratagems, including the use of various corporations as
fronts, to unjustly enrich themselves at the expense of Plaintiff and the Filipino people, such as
when he – misused coconut levy funds to buy out majority of the outstanding shares of stock of
San Miguel Corporation in order to control the largest agri-business, foods and beverage
company in the Philippines.

These so called front companies, which ACCRA Law Offices organized for Defendant
Cojuangco to be able to control more than 60% of SMC shares, were funded by institutions
which depended upon the coconut levy such as the UCPB, UNICOM, United Coconut Planters
Assurance Corp. (COCOLIFE), among others. Cojuangco and his ACCRA lawyers used the
funds from 6 large coconut oil mills and 10 copra trading companies to borrow money from the
UCPB and purchase these holding companies and the SMC stocks. Cojuangco used $150 million
from the coconut levy.

Herein defendant specifically denies the  allegations including any insinuation that whatever
association he may have had with the late Ferdinand Marcos or Imelda Marcos has been in
connection with any of the acts or transactions alleged in the complaint or for any unlawful
purpose.

During the pre-trial Sandiganbayan advised the plaintiff to present more factual evidence to
substantiate its allegations. The Republic nonetheless in choosing not to adduce evidence
proving the factual allegations, particularly the matters specifically asked by the Court, instead
plaintiff opted to pursue its claims by Motion for Summary Judgment.

On November 28, 2007, the Sandiganbayan dismissed the case  for failure of plaintiff to prove
by preponderance of evidence its causes of action against defendants.

Issues:
1) What are the "various sources" of funds, which the defendant Cojuangco and his companies
claim they utilized to acquire the disputed SMC shares?

2) Whether or not such funds acquired from alleged "various sources" can be considered coconut
levy funds;

3) Whether or not defendant Cojuangco had indeed served in the governing bodies of PC, UCPB
and/or CIIF Oil Mills at the time the funds used to purchase the SMC shares were obtained such
that he owed a fiduciary duty to render an account to these entities as well as to the coconut
farmers;

Ruling:

The Supreme Court  affirmed the decision of November 28, 2007, because the Republic did not
discharge its burden as the plaintiff to establish by preponderance of evidence that the
respondents’ SMC shares were illegally acquired with coconut-levy funds.

The Republic mainly relied on the statement made by Mr. Conjuangco on his Pre-trial brief and
hastily derived conclusions from the defendants’ statements in their previous pleadings although
such conclusions were not supported by categorical facts but only mere inferences.

"According to Cojuangco’s own Pre-Trial Brief, these so-called ‘various sources’, i.e., the
sources from which he obtained the funds he claimed to have used in buying the 20% SMC
shares are not in fact ‘various’ as he claims them to be. He says he obtained ‘loans’ from UCPB
and ‘advances’ from the CIIF Oil Mills. He even goes as far as to admit that his only evidence in
this case would have been ‘records of UCPB’ and a ‘representative of the CIIF Oil Mills’
obviously the ‘records of UCPB’ relate to the ‘loans’ that Cojuangco claims to have obtained
from UCPB – of which he was President and CEO – while the ‘representative of the CIIF Oil
Mills’ will obviously testify on the ‘advances’ Cojuangco obtained from CIIF Oil Mills – of
which he was also the President and CEO."

From the foregoing premises, plaintiff went on to conclude that:

"These admissions of defendant Cojuangco are outright admissions that he (1) took money from
the bank entrusted by law with the administration of coconut levy funds and (2) took more
money from the very corporations/oil mills in which part of those coconut levy funds (the CIIF)
was placed – treating the funds of UCPB and the CIIF as his own personal capital to buy ‘his’
SMC shares."

Plaintiff’s contention that the defendant’s statements in his Pre-Trial Brief regarding the
presentation of a possible CIIF witness as well as UCPB records, can already be considered as
admissions of the defendant’s exclusive use and misuse of coconut levy funds to acquire the
subject SMC shares and defendant Cojuangco’s alleged taking advantage of his positions to
acquire the subject SMC shares is unacceptable.. Moreover, in ruling on a motion for summary
judgment, the court "should take that view of the evidence most favorable to the party against
whom it is directed, giving such party the benefit of all inferences." Inasmuch as this issue
cannot be resolved merely from an interpretation of the defendant’s statements in his brief, the
UCPB records must be produced and the CIIF witness must be heard to ensure that that the
conclusions that will be derived have factual basis and are thus, valid.

The Court is given a very clear impression that the plaintiff does not know what documents will
be or whether they are even available to prove the causes of action in the complaint. The Court
has pursued and has exerted every form of inquiry to see if there is a way by which the plaintiff
could explain in any significant particularity the acts and the evidence which will support its
claim of wrong-doing by the defendants. The plaintiff has failed to do so.

1) What are the "various sources" of funds, which the defendant Cojuangco and his
companies claim they utilized to acquire the disputed SMC shares?

Mr. Cojuangco claimed that it came from various sources, a loan from UCPB and advances from
CIIF. How? He is not obliged to explain because the Republic failed to present preponderance of
evidence the burden of proof  has not shifted on Mr. Cojuangco.

2) Whether or not such funds acquired from alleged "various sources" can be considered
coconut levy funds?

No, since in a contract of loan the money borrowed becomes the property of the debtor. Mr.
Cojuangco’s liability at most will be the collection of sum of money. Besides the Republic failed
to present its evidence to prove this allegation.

3) Whether or not defendant Cojuangco had indeed served in the governing bodies of 
PC, UCPB and/or CIIF Oil Mills at the time the funds used to purchase the SMC shares
were obtained such that he owed a fiduciary duty to render an account to these entities as well as
to the coconut farmers?

 Although the trust relationship supposedly arose from Cojuangco’s being an officer and member
of the Board of Directors of the UCPB, the link between this alleged fact and the borrowings or
advances was not established. Nor was there evidence on the loans or borrowings, their amounts,
the approving authority, etc. As trial court, the Sandiganbayan could not presume his breach of
fiduciary duties without evidence showing so, for fraud or breach of trust is never presumed, but
must be alleged and proved.

Doctrines:

Admissions; It is fundamental that any statement, to be considered as an admission for purposes

of judicial proceedings, should be definite, certain and unequivocal—otherwise, the disputed
fact will not get settled.—

The statements found in the joint Pre-Trial Brief of Cojuangco, et al. were noticeably written
beneath the heading of Proposed Evidence. Such location indicated that the statements were only
being proposed, that is, they were not yet intended or offered as admission of any fact stated
therein. In other words, the matters stated or set forth therein might or might not be presented at
all. Also, the text and tenor of the statements expressly conditioned the proposal on the Republic
ultimately presenting its evidence in the action. After the Republic opted not to present its
evidence, the condition did not  transpire; hence, the proposed admissions, assuming that they
were that, did not materialize. Obviously, too, the statements found under the heading of
Proposed Evidence in the joint Pre-Trial Brief were incomplete and inadequate on the important
details of the supposed transactions (i.e., alleged borrowings and advances). As such, they could
not constitute admissions that the funds had come from borrowings by Cojuangco, et al. from the
UCPB or had been credit advances from the CIIF Oil Companies. Moreover, the purpose for
presenting the records of the UCPB and the representatives of the UCPB and of the still
unidentified or unnamed CIIF Oil Mills as declared in the joint Pre-Trial Brief did not at all show
whether the UCPB and/or the unidentified or unnamed CIIF Oil Mills were the only sources of
funding, or that such institutions, assuming them to be the sources of the funding, had been the
only sources of funding. Such ambiguousness disqualified the statements from being relied upon
as admissions. It is fundamental that any statement, to be considered as an admission for
purposes of judicial proceedings, should be definite, certain and unequivocal; otherwise, the
disputed fact will not get settled.

The Rules of Court has no rule that treats the statements found under the heading Proposed
Evidence as admissions binding on the party—on the contrary, the Rules of Court has even
distinguished between admitted facts and facts proposed to be admitted during the stage of pre-
trial.—

The Rules of Court has no rule that treats the statements found under the heading Proposed
Evidence as admissions binding Cojuangco, et al. On the contrary, the Rules of Court has even
distinguished between admitted facts and facts proposed to be admitted during the stage of pre-
trial. Section 6 (b), Rule 18 of the Rules of Court, requires a Pre-Trial Brief to include a
summary of admitted facts and a proposed stipulation offacts. Complying with the requirement,
the joint Pre-Trial Brief of Cojuangco, et al.  included the summary of admitted facts in its
paragraph 3.00 of its Item III, separately and distinctly from the Proposed Evidence. 

Burden of Proof; The burden of proof, according to Section 1, Rule 131 of the Rules of Court, is
“the duty of a party to present evidence on the facts in issue necessary to establish his claim or
defense by the amount of evidence required by law”; That burden requires the Republic in ill-
gotten wealth cases to demonstrate through competent evidence that the defendants had
purchased the shares of stock with the use of public funds, and that the affected shares of stock
constituted ill-gotten wealth.—

The burden of proof, according to Section 1, Rule 131 of the Rules of Court, is “the duty of a
party to present evidence on the facts in issue necessary to establish his claim or defense by the
amount of evidence required by law.” Here, the Republic, being the plaintiff, was the party that
carried the burden of proof. That burden required it to demonstrate through competent evidence
that the respondents, as  defendants, had purchased the SMC shares of stock with the use of
public funds; and that the affected shares of stock constituted ill-gotten wealth. The Republic
was well apprised of its burden of proof, first through the joinder of issues made by the
responsive pleadings of the defendants, including Cojuangco, et al. The Republic was further
reminded through the pre-trial order and the Resolution denying its Motion for Summary
Judgment, supra, of the duty to prove the factual allegations on ill-gotten wealth against
Cojuangco, et al. 
Summary Judgments; With the Republic nonetheless choosing not to adduce evidence proving
the factual allegations, particularly the aforementioned matters, and instead opting to pursue its
claims by Motion for Summary Judgment, the Sandiganbayan became completely deprived of the
means to know the necessary but crucial details of the transactions on the acquisition of the
contested block of shares.—

With the Republic nonetheless choosing not to adduce evidence proving the factual allegations,
particularly the aforementioned matters, and instead opting to pursue its claims by Motion for
Summary Judgment, the Sandiganbayan became completely deprived of the means to know the
necessary but crucial details of the transactions on the acquisition of the contested block of
shares. The Republic’s failure to adduce evidence shifted no burden to the respondents to
establish anything, for it was basic that the party who asserts, not the party who denies, must
prove. Indeed, in a civil action, the plaintiff has the burden of pleading every essential fact and
element of the cause of action and proving them by  preponderance of evidence. This means that
if the defendant merely denies each of the plaintiff’s allegations and neither side produces
evidence on any such element, the plaintiff must necessarily fail in the action. Thus, the
Sandiganbayan correctly dismissed Civil Case No. 0033-F for failure of the Republic to prove its
case by preponderant evidence. 

Upon a motion for summary judgment the court’s sole function is to determine whether there is
an issue of fact to be tried, and all doubts as to the existence of an issue of fact must be resolved
against the moving party—in ruling on a motion for summary judgment, the court should take
that view of the evidence most favorable to the party against whom it is directed, giving that
party the benefit of all favorable inferences.—A summary judgment under Rule 35 of the Rules
of Court is a procedural technique that is proper only when there is no genuine issue as to the
existence of a material fact and the moving party is entitled to a judgment as a matter of law. It is
a method intended to expedite or promptly dispose of cases where the facts appear undisputed
and certain from the pleadings, depositions, admissions, and affidavits on record. Upon a motion
for summary judgment the court’s sole function is to determine whether there is an issue of fact
to be tried, and all doubts as to the existence of an issue of fact must be resolved against the
moving party. In other words, a party who moves for summary judgment has the burden of
demonstrating clearly the absence of any genuine issue of fact, and any doubt as to the existence
of such an issue is resolved against the movant. Thus, in ruling on a motion for summary
judgment, the court should take that view of the evidence most favorable to the party against
whom it is directed, giving that party the benefit of all favorable inferences.

Words and Phrases; The term genuine issue has been defined as an issue of fact that calls for the
presentation of evidence as distinguished from an issue that is sham, fictitious, contrived, set up
in bad faith, and patently unsubstantial so as not to constitute a genuine issue for trial; The rule
on summary judgment does not invest the trial courts with jurisdiction to try summarily the
factual issues upon affidavits, but authorizes summary judgment only when it appears clear that
there is no genuine issue as to any material fact.—

The term genuine issue has been defined as an issue of fact that calls for the presentation of
evidence as distinguished from an issue that is sham, fictitious, contrived, set up in bad faith, and
patently unsubstantial so as not to constitute a genuine issue for trial. The court can determine
this on the basis of the pleadings, admissions, documents, affidavits, and counter-affidavits
submitted by the parties to the court. Where the facts pleaded by the parties are disputed or
contested, proceedings for a summary judgment cannot take the place of a trial. Well-settled is
the rule that a party who moves for summary judgment has the burden of demonstrating clearly
the absence of any genuine issue of fact. Upon that party’s shoulders rests the burden to prove
the cause of action, and to show that the defense is interposed solely for the purpose of delay.
After the burden has been discharged, the defendant has the burden to show facts sufficient to
entitle him to defend. Any doubt as to the propriety of a summary judgment shall be resolved
against the moving party. We need not stress that the trial courts have limited authority to render
summary judgments and may do so only in cases where no genuine issue as to any material fact
clearly exists between the parties. The rule on summary judgment does not invest the trial courts
with jurisdiction to try summarily the factual issues upon affidavits, but authorizes summary
judgment only when it appears clear that there is no genuine issue as to any material fact.

10.  People of the Philippines vs. Janjalani, G.R. No. 188314, 10 January 2011

People v. Janjalani
G.R. No. 188314, January 10, 2011
Sereno, J., 

Characters:
Andales – bus conductor-witness;
Asali – ASG member, prosecution’s star witness who pointed out conspiracy;
Trinidad and Baharan – men in bus; carried out the planting of the bomb;
Rohmat a.k.a. Abu Zaky – principal by inducement.

Facts: On February 14, 2005, an RRCG bus was plying its usual route from its Navotas terminal
to Alabang through EDSA. At around 6:30 to 7:30 in the evening, near Guadalupe, Makati, the
bus conductor saw two men running after the bus. The two insisted on getting on the bus, so the
conductor obliged and let them in. By the conductor Elmer Andales’ narration, the two men were
suspicious because first, they sat separate from each other, one near the bus driver’s seat and one
all the way back; they paid for each other’s fares and looked shocked when asked to pay; their
eyes were red; the man in the back looked like he was tweaking something; and the two insisted
on alighting the bus in a prohibited drop off point. While Andales thought that it was a hold up
situation, in reality, the two men planted a bomb in the bus. Immediately after the two men
alighted the bus near Ayala, Makati, there was an explosion and the next thing that Andales saw
were the passengers either lying on the road or looking traumatized, and the bus being engulfed
in flames.

             Shortly after the explosion, the spokesperson of the Abu Sayyaf Group – Abu
Solaiman – announced over a radio station interview in DZBB that the explosion was ASG’s
Valentine’s gift to President Arroyo. He warned that there will be more attacks. Three other
members were interviewed, this time in television. Trinidad gave ABS-CBN News Network an
exclusive interview some time after the incident, confessing his participation in the Valentine’s
Day bombing incident. In another exclusive interview on the network, accused Baharan likewise
admitted his role in the bombing incident. Finally, accused Asali gave a television interview,
confessing that he had supplied the explosive devices for the 14 February 2005 bombing. The
bus conductor Andales identified Trinidad and Baharan as the two men who rode the RRCG bus.

             The men were charged with multiple murder and multiple frustrated murder
before RTC Makati. They all pled guilty. Noted that during their pretrial hearing, the parties
stipulated that the men admitted that they were indeed involved in the bombing incidents. After
being discharged as state witness, accused Asali testified that while under training with the Abu
Sayyaf in 2004, Rohmat, a.k.a Abu Jackie or Zaky, and two other persons taught him how to
make bombs and explosives. The trainees were told that they were to wage battles against the
government in the city, and that their first mission was to plant bombs in malls, the Light
Railway Transit (LRT), and other parts of Metro Manila. Asali further testified the events that
transpired leading to that day of bombing, e.g., they’ve been training in making and detonating
explosives, their plans of terror against Christianity and the government, the transporting and
assembly of TNT explosives that were eventually planted in the RRCG bus, and his
correspondence with accused Rohmat who said to him after the successful mission: “sa wakas
nagsuccess din ang tinuro ko sa’yo;” as well as the two bombers Baharan and Trinidad the night
before the incident.

             The RTC Makati rendered a decision holding Baharan, Trinidad, and Romat
guilty of the complex crime of multiple murder and multiple frustrated murder, and sentenced
them to suffer the penalty of death by lethal injection. The CA modified the sentence to reclusion
perpetua. 

Issue: The trial court gravely erred in finding that the guilt of accused-appellants for the crimes
charged had been proven beyond reasonable doubt.

Held: NO. In their second assignment of error, accused-appellants assert that guilt was not
proven beyond reasonable doubt. They pointed out that the testimony of the conductor was
merely circumstantial, while that of Asali as to the conspiracy was insufficient. SUPREME
COURT: Insofar as accused-appellants Baharan and Trinidad are concerned, the evidence for
the prosecution, in addition to that which can be drawn from the stipulation of facts, primarily
consisted of the testimonies of the bus conductor, Elmer Andales, and of the accused-turned-
state-witness, Asali. Andales positively identified accused Baharan and Trinidad as the two men
who had acted suspiciously while inside the bus; who had insisted on getting off the bus in
violation of a Makati ordinance; and who had scampered away from the bus moments before the
bomb exploded. On the other hand, Asali testified that he had given accused Baharan and
Trinidad the TNT used in the bombing incident in Makati City. The guilt of the accused Baharan
and Trinidad was sufficiently established by these corroborating testimonies, coupled with their
respective judicial admissions (pretrial stipulations) and extrajudicial confessions (exclusive
television interviews, as they both stipulated during pretrial) that they were indeed the
perpetrators of the Valentine’s Day bombing. Accordingly, the Court upholds the findings of
guilt made by the trial court as affirmed by the Court of Appeals.

Accused contend that the testimony of Asali is inadmissible pursuant to Sec. 30, Rule 130 of the
Rules of Court. SC: It is true that under the rule, statements made by a conspirator against a
coconspirator are admissible only when made during the existence of the conspiracy. However,
as the Court ruled in People v. Buntag, if the declarant repeats the statement in court, his
extrajudicial confession becomes a judicial admission, making the testimony admissible as to
both conspirators. Thus, in People v. Palijon, the Court held the following:

“… [W]e must make a distinction between extrajudicial and judicial confessions. An

extrajudicial confession may be given in evidence against the confessant but not against
his co-accused as they are deprived of the opportunity to cross-examine him. A judicial
confession is admissible against the declarant’s co-accused since the latter are afforded
opportunity to cross-examine the former. Section 30, Rule 130 of the Rules of Court
applies only to extrajudicial acts or admissions and not to testimony at trial where the
party adversely affected has the opportunity to cross-examine the declarant. Mercene’s
admission implicating his co-accused was given on the witness stand. It is admissible in
evidence against appellant Palijon. Moreover, where several accused are tried together
for the same offense, the testimony of a co-accused implicating his co-accused is
competent evidence against the latter.”

RTC and CA AFFIRMED.

11.  Equitable Cardnetwork, Inc. vs. Josefa Capistrano, G.R. No. 180157, 08 February 2012

Facts:

Respondent Josefa Capistrano allegedly applied for Manila Yacht Club membership. Since,
MYC and petitioner Equitable Cardnetwork, Inc. had a credit card sponsorhip agreement, Mrs.
Capistrabo was granted a Visa Credit Card. It was also alleged that her daughter, Mrs. Redulla
was authorized to receive the card.

Mrs. Redulla personally issued a P45,000.00 check as partial payment of Mrs. Capistrano’s
account with ECI. But Mrs. Redulla’s check bounced upon deposit. Because Mrs. Capistrano
was unable to settle her P217,235.36 bill, ECI demanded payment from her. But she refused to
pay, prompting ECI to file on a collection suit against her before the RTC of Cebu City.

Mrs. Capistrano denied ever applying for MYC membership and ECI credit card; that Mrs.
Redulla was not her daughter; and that she never authorized her or anyone to claim a credit card
for her. Assuming she applied for such a card, she never used it. Mrs. Redulla posed as Mrs.
Capistrano and fooled ECI into issuing the card to her.

The RTC ruled that, having failed to deny under oath the genuineness and due execution of
ECI’s actionable documents that were attached to the complaint, Mrs. Capistrano impliedly
admitted the genuineness and due execution of those documents. In effect she admitted: 1)
applying for membership at the MYC;4 2)  accomplishing the MYC membership information
sheet5 which contained a request for an ECI Visa card; 3) holding herself liable for all
obligations incurred in the use of such card; 4 ) authorizing Mrs. Redulla to receive the Visa card
issued in her name;6 5) applying for an ATM Card with ECI;7 and 6) using the credit card in
buying merchandise worth P217,235.36 as indicated in the sales slips. 
The CA reversed the RTC’s ruling stating that Mrs. Capistrano was able to prove that her
signatures were forged.

Issue:

Whether or not the CA correctly ruled that, although Mrs. Capistrano failed to make an effective
specific denial of the actionable documents attached to the complaint, she overcame this
omission by presenting parol evidence to which ECI failed to object.

Ruling:

A party’s admissions in the course of the proceedings, like an admission in the answer of the
genuineness and true execution of the plaintiff’s actionable documents, can only be contradicted
by showing that defendant made such admission through palpable mistake. Here, Mrs.
Capistrano never claimed palpable mistake in the answer she filed. It is of no moment that
plaintiff ECI failed to object to Mrs. Capistrano’s evidence at the trial that the subject documents
were forgeries. As the Court ruled in Elayda v. Court of Appeals, 199 SCRA 349 (1991), the trial
court may reject evidence that a party adduces to contradict a judicial admission he made in his
pleading since such admission is conclusive as to him. It does not matter that the other party
failed to object to the contradictory evidence so adduced.  

Notwithstanding the above, the Court holds that the CA correctly ordered the dismissal of ECI’s
action since, contrary to the RTC’s finding, Mrs. Capistrano effectively denied the genuineness
and due execution of ECI’s actionable documents. True, Mrs. Capistrano denied ECI’s
actionable documents merely “for lack of knowledge” which denial, as pointed out above, is
inadequate since by their nature she ought to know the truth of the allegations regarding those
documents. But this inadequacy was cured by her quick assertion that she was also denying the
allegations regarding those actionable documents “for the reasons as stated in her special and
affirmative defenses.” 

And, since Mrs. Capistrano in fact verified her claim that she had no part in those transactions,
she in effect denied under oath the genuineness and due execution of the documents supporting
them. For this reason, she is not barred from introducing evidence that those documents were
forged. 

NEGATIVE PREGNANT

1.  Venzon vs. Rural Bank of Buenavita, G.R. No. 178031, August 28, 2013

Facts:

Petitioner Virginia M. Venzon filed a Petition   to nullify foreclosure proceedings and Tax
Declaration issued in the name of respondent Rural Bank of Buenavista (Agusan del Norte), Inc.
Petitioner alleged that in 1983 she and her late spouse, George F. Venzon, Sr., obtained a
₱5,000.00 loan from respondent against a mortgage on their house and lot; that she was able to
pay ₱2,300.00, thus leaving an outstanding balance o f only ₱2,370.00; that sometime in March
1987, she offered to pay the said balance in full, but the latter refused to accept payment, and
instead shoved  petitioner away from the bank premises; that in March 1987, respondent
foreclosed on the mortgage, and the property was sold at auction for ₱6,472.76 to respondent,
being the highest bidder; that the foreclosure proceedings are null and void for lack of notice
and publication of the sale, lack of sheriff’s final deed of sale and notice of redemption period;
and that she paid respondent ₱6,000.00 on October 9, 1995, as evidenced by respondent’s
Official Receipt No. 410848 6 issued on October 9, 1995.

 On the other hand, respondent claimed that petitioner did not make any payment on the loan;
that petitioner never went to the bank in March 1987 to settle her obligations in full; that 
petitioner was not shoved and driven away from its premises; that the foreclosure proceedings
were regularly done and all requirements were complied with; that a certificate of sale was
issued  by the sheriff and duly recorded in the Registry of Deeds; that petitioner’s claim that she
paid ₱ 6,000.00 on October 9, 1995 is utterly false; that petitioner’s cause of action has long
prescribed as the case was filed only in 2005 or 18 years after the foreclosure sale; and that
petitioner is guilty of laches. 

 Issue: Whether or not the foreclosure proceedings were legal

 Ruling:

Interestingly, respondent did not deny being the issuer of Official Receipt No. 410848. Instead, it
averred that petitioner’s payment to it of ₱6,000.00 was false and self -serving, but in the same
breath argued that, without necessarily admitting that payment of ₱6,000.0 0 was made, the same
cannot be considered as redemption price.

 By making such an ambiguous allegation in its Answer with Counterclaims, respondent is
deemed to have admitted receiving the amount of ₱6,000.00 from petitioner as evidenced by
Official Receipt No. 410848, which amount under the circumstances it had no right to receive. If
an allegation is not specifically denied or the denial is a negative pregnant, the allegation is
deemed admitted. Where a fact is alleged with some qualifying or modifying language, and the
denial is conjunctive, a ‘negative pregnant’ exists, and only the qualification or modification is
denied, while the fact itself is admitted. 

 A denial in the form of a negative pregnant is an ambiguous pleading, since it cannot be

ascertained whether it is the fact or only the qualification that is intended to be denied.  
Profession of ignorance about a fact which is patently and necessarily within the pleader's
knowledge, or means of knowing as ineffectual, is no denial at all. In fine, respondent failed to
refute petitioner’s claim of having paid the amount of ₱6,000.00.

 Since respondent was not entitled to receive the said amount, as it is deemed fully paid from the
foreclosure of petitioner’s property since its bid price at the auct ion sale covered all that 
petitioner owed it by way of principal, interest, attorney’s fees and charges, it must return the
same to petitioner.

2.  Mahilum vs. Spouses Ilano, G.R. No. 197923, June 22, 2015
Facts: Petitioner Ruby Ruth S. Serrano Mahilum is the registered owner of a parcel of land
covered by a transfer certificate of title. She entrusted the original owner’s duplicate copy of
TCT to Teresa Perez (Perez) – a purported real estate broker – who claimed that she can assist
petitioner in obtaining a loan with the TCT as collateral. After several months, petitioner
demanded the return of the title, but Perez failed to produce the same; after much prodding,
Perez admitted that the title was lost. In June 2004, petitioner executed an Affidavit of Loss and
caused the same to be annotated upon the original registry copy of the transfer certificate of title.
Petitioner was informed however that her TCT was not lost, but that it was presented to the
registry by respondents, spouses Edilberto and Lourdes Ilano, who claimed that the property
covered by the title was sold to them. The respondents however did not register the alleged sale.

Petitioner confronted respondents, who showed her a notarized Agreement with right of
repurchase and an unnotarized and undated Deed of Absolute Sale on which documents
petitioner’s purported signatures were affixed. Petitioner denied having executed said document
and claimed that her purported signatures therein were in fact falsified and forged. She
demanded the return of her TCT which respondents refused.

Thereafter the petitioner filed an action for “annulment of agreement and deed of
absolute sale.

On appeal the CA dismissed the petitioner’s case for failure to state a cause of action –
for failure of the complaint to allege that respondents were purchasers in bad faith.

Hence this petition.

Issue: Whether or not respondents can interpose the defense of being innocent purchasers for

value

Held:  NO. Since a new title was never issued in respondents’ favor and, instead, title remained
in petitioner’s name, the former never came within the coverage and protection of the Torrens
system, where the issue of good or bad faith becomes relevant. Since respondents never acquired
a new certificate of title in their name, the issue of their good or bad faith which is central in an
annulment of title case is of no consequence; petitioner’s case is for annulment of the Agreement
and Deed of Absolute Sale, and not one to annul title since the certificate of title is still in her
name. The jurisprudential bases for the CA’s pronouncement that there is a failure to state a
cause of action if there is no allegation in the complaint that respondents were purchasers in bad
faith – Castillo v. Heirs of Vicente Madrigal and Heirs of Julian Tiro v. Philippine Estates
Corporation – involved complaints for annulment of new titles issued to the buyers; they cannot
apply to petitioner’s case where title remains in her name.

Petitioner’s case is to annul the agreement and deed of sale based on the allegation that
they are forgeries, and that respondents were parties to the fraud; since no new title was issued in
respondents’ favor, there is no new title to annul. Indeed, if the agreement and deed of sale are
forgeries, then they are a nullity and convey no title. The underlying principle is that no one can
give what one does not have. Nemo dat quod non habet. 
 In this case, it is petitioner who must be protected under the Torrens system – as the
registered owner of the subject property. “A certificate of title serves as evidence of an
indefeasible and incontrovertible title to the property in favor of the person whose name appears
therein. The real purpose of the Torrens system of land registration is to quiet title to land and
put a stop forever to any question as to the legality of the title.”

IMPLIED JUDICIAL ADMISSIONS

1.  PNB vs. Refrigeration Industries, Inc., G.R. No. 156178, 20 January 2006

Prior to 1984, respondent RII occupied a portion of the assembly plant of Delta Motor Corporation
(DMC). RII installed in the plant equipment, machinery and other chattels RII used in its business.3
In February 1984, PNB, then a government-owned and controlled bank, foreclosed several parcels
of real estate and chattels of DMC located at the DMC Compound. In an auction of the foreclosed
properties, PNB was the highest bidder. Thus, it took possession of all chattels inside the DMC
compound, both as owner of chattels and as mortgagee of the remaining properties.

On June 18, 1984 when PNB took possession of the DMC compound, RII demanded the release of
its properties still inside the compound, now the subject of the case, after RII made statements
claiming ownership over them. PNB allowed RII to remove some of its personal properties from the
DMC compound, upon the latter’s showing of proof of ownership. However, respondent failed to
produce any proof of ownership.

 
PNB’s refusal to release the subject properties led to the filing of a complaint by RII for Recovery of
Possession with Damages before the RTC of Makati on June 10, 1986.
At all the scheduled pre-trial conferences, PNB consistently manifested in court its willingness to
release the chattels conditioned upon RII’s showing of evidence of ownership. Eventually, some of
the properties were released.
By virtue of Proclamation No. 50 as implemented by Administrative Circular No. 14 dated February
27, 1989, certain properties of RII inside DMC’s compound, with some other acquired assets of PNB
covered by the Circular, were transferred to the Asset Privatization Trust (APT). Hence in 1992, APT
was impleaded as a party-defendant. Pursuant to Republic Act No. 8758,6 the corporate existence of
APT expired on December 31, 2000. On December 6, 2000, former President Joseph Estrada
signed Executive Order No. 323 creating the Privatization and Management Office (PMO) which
succeeded the APT. At the time, RII had not yet shown additional evidence to support its claim over
the remaining personal properties in PNB’s possession.
Six (6) years later, on February 10, 1995, RII filed a Motion for Summary Judgment.7 It averred
that there was no genuine issue to any material fact except the issue on damages, costs and
attorneys’ fees. RII alleged that during the pre-trial conference, PNB manifested to APT, in a letter 8
dated May 11, 1989, that the machineries and equipments of RII listed in Annex "C" of the complaint
were erroneously transferred to APT, and that in a letter 9 dated May 31, 1989, APT acknowledged
the mistakes and agreed to release the properties to the authorized representative of RII.
Both PNB and APT (PMO) opposed the motion on the ground that there still existed a genuine
factual issue, which was the ownership of the chattels.
On August 7, 1995, a Summary Judgment was rendered favoring RII.
Issue:
W/N the CA DID NOT CONSIDER THE EXISTENCE OF A GENUINE ISSUE IN THIS CASE, THAT
OF THE OWNERSHIP OF THE CONTESTED CHATTELS, THAT WOULD PRECLUDE ISSUANCE
OF SUMMARY JUDGMENT
Ruling:
We agree that the Court of Appeals correctly held that the summary judgment was properly rendered
by the trial court.
Firstly, it may be noted that PNB admitted in its May 11, 1989 letter to APT that the contested
chattels belonged to RII, but were erroneously taken during the foreclosure of DMC’s properties; that
these were eventually transferred to APT. Secondly, we also note that APT admitted that PNB wrote
the letter dated May 11, 1989; and that APT wrote a letter dated May 29, 1989 to PNB. With these
admissions, there is no genuine issue concerning RII’s ownership of the chattels and their erroneous
delivery to APT had remained. A "genuine issue" is an issue of fact which requires the presentation
of evidence. When the facts as pleaded appear uncontested or undisputed, then there is no real or
genuine issue or question as to the facts.lvvphil.

Summary judgment, as prescribed by the rules must then ensue as a matter of law, to weed out
sham claims or defenses at an early stage of the litigation, to avoid the expense and loss of time
involved in a trial, and to separate what is formal or pretended in denial or averment from what is
genuine and substantial, so that only the latter may subject a suitor to the burden of trial.
Contrary to petitioners’ claim that there was no admission on their part that respondent owned the
chattels, our review of the records shows that petitioners failed to either specifically deny or directly
assail and raise as an issue, the validity of the letter dated May 11, 1989 and the letter dated May
29, 1989. Their failure to deny the genuineness and due execution of the said documents amounts
to a judicial admission pursuant to Section 8,  Rule 8 of the Rules of Court.
Judicial admissions do not require proof and may not be contradicted in the absence of a prior
showing that the admissions had been made through palpable mistake.These letters are deemed
admitted as evidence, and they likewise supersede the defenses interposed by petitioners in their
respective answers.
It may lastly be recalled that from the very start, PNB consistently manifested its willingness to
release the said properties upon respondent’s proof of ownership over them. The correspondence
between the parties shows that PNB actually admitted that the subject chattels belonged to RII but
were erroneously transferred to petitioner APT. Conformably then, the trial court’s summary
judgment is proper and correct. No reversible error was committed by the Court of Appeals in
affirming it.

2.  Manzano vs. Despabiladeras, 16 December 2004

FACTS:
Petitioner Roger Manzano filed an action for the enforcement of money debt with
damages before the Regional Trial Court (RTC) of Iriga against Respondent Luz Despabiladeras
who received construction materials from the former on credit. During pre-trial, the parties
agreed that Manzano shall submit an “offer to stipulate” showing an itemized list of materials
delivered to Despabiladeras together with the cost claimed by Manzano within 15 days.
Despabiladeras shall state her objections if any or comment therein within the same period of
time.
              Instead of submitting the same, Manzano filed a ”Request for Admission” asking
Despabiladeras to admit the materials particularly described therein, that the value of the goods
delivered amount to P314,610.50 and that only P130,000.00 has been paid. But Despabiladeras
gave no response to the said request.
The RTC ruled against Despabiladeras while The Court of Appeals held in her favor setting
aside the implied admission which served as the basis of the RTC’s decision.
ISSUE:

Whether or not the unanswered request for admission has any legal consequences
HELD:

Rule 26 of the Rules of Court provides that at any time after issues have been joined, a
party may serve upon any other party a written request for the admission by the latter of the
genuineness of relevant documents described in and exhibited with the request or of the truth of
any material and relevant matters of fact set forth in the request.
The above-quoted sections should not be disregarded as in fact the trial court did not, when it
ordered Despabiladeras to file comment thereon, just because the parties mutually agreed that
Manzano submit “an offer to stipulate.” For as stated earlier, the request for admission is a
remedy afforded any party after the issues have been joined.
Despabiladeras having failed to discharge what is incumbent upon her under Rule 26, that is to
deny under oath the facts bearing on the main issue contained in the “Request for Admission”
she was deemed to have admitted that she received the construction materials, the cost of which
was indicated in the request and was indebted to the petitioner in the amount stated therein.

3. Municipality of Tiwi vs. Antonio Betito, G.R. No. 171873, 09 July 2010

Facts:
On June 4, 1990, this court issued a decision finding National
Power Corporation liable for unpaid real estate taxes on its
properties in Albay. This properties consisted geothermal plants in
Tiwi and in Daraga. Previously, these properties were sold in an
auction, of which the Province of Albay acquired ownership.

Later, NPC and Albay entered into a MOA where Albay agreed to
settle its tax liabilities and NPC will make an initial payment
upon signing of the agreement, and the rest will be paid in a
monthly instalment.

Then on August 3, 1992, then mayor Corral of Tiwi requested

Governor Salalima to remit the rightful taxes shares of Tiwi.
Salalima replied that the request cannot be granted as the initial
payment was only an earnest money and that the total amount to be
collected was still being validated.

RTC: The trial court held that petitioners’ answer to the complaint
failed to tender an issue, thus, partial judgment on the pleadings
is proper.  It noted that petitioners did not specifically deny
under oath the actionable documents in this case, particularly, the
Contract of Legal Services and Resolution No. 15-92.  Consequently,
the genuineness and due execution of these documents are deemed
admitted pursuant to Section 8, Rule 8 of the Rules of Court. 
Thus, the authority of Mayor Corral to enter into the subject
contract was deemed established.
CA: The appellate court agreed with the trial court that the
genuineness and due execution of the Contract of Legal Services and
Resolution No. 15-92 was impliedly admitted by petitioners because
of their failure to make a verified specific denial thereof. 
Further, the answer filed by the petitioners admitted the material
averments of the complaint concerning Tiwi’s liability under the
subject contract and its receipt from the NPC of a total of
P146,579,661.84 as realty taxes.   Petitioners  cannot claim that
the subject contract  required ratification because this is not a
requisite for the enforceability of a contract against a local
government unit under the express terms of the contract and the
provisions of the Local Government Code (LGC). Also, petitioners
are estopped from questioning the enforceability of the contract
after having collected and enjoyed the benefits derived therefrom.

Issues: (1) The amount of award of attorney’s fees to respondent is

unreasonable, unconscionable and without any proof of the extent,
nature and “result of his legal service” as required by the
purported “contract of legal services” and pursuant to Section 24,
Rule 138 of the Rules of Court.(2) The application of the rule of
judgment on the pleadings and/or summary judgment is baseless,
improper and unwarranted in the case at bar.(3) The purported
“contract of legal services” exceeded the authority of the late
Mayor Corral and should have been ratified by the Sangguniang Bayan
of Tiwi in order to be enforceable.

Held:
The petition is meritorious. Judgment on the pleadings is improper
when the answer to the complaint tenders several issues. A motion
for judgment on the pleadings admits the truth of all the material
and relevant allegations of the opposing party and the judgment
must rest on those allegations taken together with such other
allegations as are admitted in the pleadings .

In the instant case, a review of the records reveal that respondent

(as plaintiff) and petitioners (as defendants) set-up multiple
levels of claims and defenses, respectively, with some failing to
tender an issue while others requiring the presentation of evidence
for resolution.  The generalized conclusion of both the trial and
appellate courts that petitioners’ answer admits all the material
averments of the complaint is, thus, without basis.  For this
reason, a remand of this case is unavoidable. However, in the
interest of justice and in order to expedite the disposition of
this case which was filed with the trial court way back in 1999, we
shall settle the issues that can be resolved based on the pleadings
and remand only those issues that require a trial on merits as
hereunder discussed.
The foregoing considerations cannot be brushed aside for it would
be iniquitous for Tiwi to compensate respondent for legal services
which he did not render; or which has no reasonable connection to
the recovery of Tiwi’s share in the subject realty taxes; or whose
weight or value has not been properly appraised in view of
respondent’s admission in his Complaint that the opinion issued by
then Chief Presidential Legal Counsel Antonio T. Carpio (in which
respondent had no clear participation) was instrumental to the
recovery of the subject realty taxes.

ADMISSION IN AMENDED, SUPERSEDED, OR DISMISSED PLEADING

1.  Section 8, Rule 10 of the Rules of Court

2.  Torres vs. Court of Appeals, 131 SCRA 24

Facts:

The propositus, Margarita Torres, during the Spanish regime, was married to Claro Santillan.
Vicente and Antonina were begotten of this union. Claro died leaving Margarita a widow.
Antonina married and had six children, namely: Alfredo, Salud (married to Baldomero
Buenaventura), Demetria (married to Leonardo Quinto), Adelina (married to Cesario Punzalan),
Tomas and Amado all surnamed Narciso, who, together with Vicente Santillan, are the private
respondents. Antonina died before the institution of the cases, while Vicente died on June 4,
1957, during the pendency of the cases in the Trial Courts, without progeny.

After the death of her husband, Margarita Torres cohabited with Leon Arvisu Arbole, without
benefit of marriage. Out of their cohabitation, petitioner Macaria Torres was born. Subsequently,
or on June 7, 1909, Leon Arbole and Margarita Torres were married.

Lot 551 had been leased temporarily by the Government to Margarita who was the actual
occupant of the lot. On December 13, 1910, the Director of Lands issued to Margarita a Sale
Certificate over said lot, payable in 20 annual installments. 20 years before his death, Leon sold
and transferred in a notarial deed his rights and interest to the ½ portion of the lot in favor of
Macaria.

On June 6, 1953, about 22 years after the death of Margarita and 20 years after the death of
Leon, Vicente Santillan executed an Affidavit claiming possession of Lot 551 and asking for the
issuance of title in his name. A Transfer Certificate of Title was issued in the name of the legal
heirs of Margarita.

Santillan and the children of Antonina filed a case of forcible entry against Macaria, alleging that
the latter had entered a portion of the lot without their consent, constructed a house thereon and
refused to vacate upon demand. 
Paragraph 3 of the original complaint states:

the plaintiffs and the defendant Macaria A. Bautista are the legal heirs and nearest of kins of
Margarita Torres, who died in Tanza, Cavite on December 20, 1931. 

However, Santillan et. al amended the complaint, the underlined portion was deleted so that the
statement simply read:

That the plaintiffs are the legal heirs and nearest of kin of Margarita Torres, who died at Tanza,
Cavite, on December 20, 1931.

Macaria claimed to be a co-owner of the lot, being one of Margarita’s daughters. She instituted
an action for partition of the lot, alleging that said lot was the conjugal property of Margarita and
Leon, and that she is their legitimated child. The statement in the original complaint for
ejectment, according to petitioner, is an admission of her legitimation and is controlling in the
determination of her participation in the disputed property.

The CFI declared that Macaria Torres is a legitimated child of spouses Leon Arbole and
Margarita Torres, thus making her a co-owner of the lot.

On appeal, the CA reversed the decision, declaring that Macaria Torres is not the legitimated
child of spouses Arbole and Torres since Macaria Torres is not legally acknowledged before or
after the marriage of her parents.

Issue: Whether or not the statement is an admission of her legitimation and is controlling in the
determination of her participation in the disputed property 

Ruling: No. The admission adverted to appears in paragraph 3 of private respondents’ original
complaint in the Ejectment Case reading: “the plaintiffs and the defendant Macaria A. Bautista
are the legal heirs and nearest of kins of Margarita Torres, who died in Tanza, Cavite on
December 20, 1931.” The statement, according to petitioner, is an admission of her legitimation
and is controlling in the determination of her participation in the disputed property. We are not
persuaded.

In the Amended Complaint filed by private respondents in the same Ejectment Case, the
underlined portion was deleted so that the statement simply read: “That the plaintiffs are the
legal heirs and nearest of kin of Margarita Torres, who died at Tanza, Cavite, on December 20,
1931;”

In virtue thereof, the Amended Complaint takes the place of the original. The latter is regarded as
abandoned and ceases to perform any further function as a pleading. The original complaint no
longer forms part of the record.

If petitioner had desired to utilize the original complaint she should have offered it in evidence.
Having been amended, the original complaint lost its character as a judicial admission, which
would have required no proof, and became merely an extrajudicial admission, the admissibility
of which, as evidence, required its formal offer. Contrary to petitioner’s submission, therefore,
there can be no estoppel by extrajudicial admission made in the original complaint, for failure to
offer it in evidence.

3.  Ching vs. Court of Appeals, 331 SCRA 16

 Ching, officer of Philippine Blooming Mills, executed a trust receipt agreement in favor of
ABC. Ching agreed to sell the goods for cash with the express obligation to remit to the  bank the
proceeds of the sale and/or to turn over the goods, if not sold, on demand. Ching, once in
possession of goods allegedly with grave abuse of confidence misappropriated to his own
personal use the said goods and/or the proceeds of the sale, and despite repeated demands, failed
and refused to remit the proceeds of sale to ABC. He was charged before the RTC Makati with
four counts of estafa under Art 315 par. 1(b) of the RPC, in relation to the"Trust Receipts Law.”
Ching filed a case before the RTC Manila for declaration of nullity of documents and for
damages. Ching asked for suspension of criminal prosecution on the ground of prejudicial
question, RTC denied. Ching moved to reconsider but the same was denied. CA denied the
appeal. Notwithstanding the decision of CA, the RTC-Manila admitted Ching’s amended
complaint which, inter alia, prayed the court for a judgment: Declaring the transaction as one of 
"pure and simple loan with the trust receipts as mere additional or side documents" contrary to
petitioners allegation in his original complaint that the trust receipts were executed as collateral
or security.
ISSUE: Whether the judicial admission in the original complaint was abandoned by virtue of an
amended complaint
RULING:  sPleadings superseded or amended disappear from the record, lose their status as
pleadings and cease to be judicial admissions. While they may nonetheless be utilized against the
pleader as extrajudicial admissions, they must be formally offered in evidence. If not offered in
evidence, the admission contained therein will not be considered. Consequently, the original
[30]

complaint, having been amended, lost its character as a judicial admission, which would have
required no proof, and became merely an extrajudicial admission, the admissibility of which, as
evidence, required its formal offer. The amended complaint takes the place of the original. The
[31]

latter is regarded as abandoned and ceases to perform any further function as a pleading. The
original complaint no longer forms part of the record. [32]

The actuations of petitioner demands stern rebuke from this Court. This Court is not unwary of
the tactics employed by the petitioner specifically in filing the amended complaint only after the
promulgation of the assailed decision of the CA. A lapse of almost 2yrs from the filing of the
original complaint to the filing of the amended complaint, is too lengthy a time sufficient to
enkindle doubts as to the true intentions of petitioner regarding the early disposition of the
pending cases. Though the granting of leave to file amended pleadings is a matter within the
sound discretion of the trial court which would not normally be disturbed on appeal, this rule is
relaxed when evident abuse thereof is apparent. Amendments are not proper and should be
[33]

denied when: (1) delay would arise; (2) amendments would result in a change of cause of action
or defense or change the theory of the case; (3) would be inconsistent with the allegations in the
original complaint. Ching, by filing the amended complaint, in effect, altered the theory of his
case. The allegations embodied in the amended complaint are inconsistent with that of the
original complaint inasmuch as in the latter, petitioner alleged that the trust receipts were
intended as mere collateral or security, the principal transaction being one of pure loan. Yet, in
the amended complaint, petitioner argued that the said trust receipts were executed as additional
or side documents, the transaction being strictly one of pure loan without any trust receipt
arrangement. Obviously these allegations are in discord in relation to each other and therefore
cannot stand in harmony. These circumstances gives doubt the genuine purpose of petitioner in
filing the amended complaint. Again, we view petitioners actuations with abhorrence and
displeasure. T he civil action for declaration of nullity of documents and for damages does not
constitute a prejudicial question to the criminal cases for estafa.

4.  Servicewide Specialists, Inc. vs. Court of Appeals, 257 SCRA 643

FACTS:

1) Petitioner Service Specialists, Inc. filed a complaint for replevin and/or sum of money with
damages before the then Court of First Instance of Manila against private respondents Eduardo
and Felisa Tolosa and one John Doe. 

COMPLAINT: 

• Servicewide alleged that Tolosa spouses purchased from Amante Motor Works one (1)
Isuzu passenger-type jeepney with Motor No. C240-317331 and Serial No. CMCI-81063-C for
the sum of P48,432.00 to be paid in 24 monthly installments;

• That the spouses executed a promissory note and a deed of chattel mortgage over the
vehicle in favor of Amante Motor Works; 

• That on the same day, Amante Motor Works, with notice to the Tolosas, assigned the
promissory note and chattel mortgage to Filinvest Finance and Leasing Corporation;

• That Filinvest Finance and Leasing Corporation also assigned its rights and interest in
said promissory note and chattel mortgage to Filinvest Credit Corporation; 

• That Servicewide later acquired the rights and interests of Filinvest Credit Corporation
over said note and mortgage; 

• That Tolosa spouses failed to pay the installments due on the purchase price despite
several demands.

SPOUSES TOLOSA’S ANSWER:

• Tolosa spouses claimed that they purchased one jeepney unit from Biñan Motor Sales
Corporation (Biñan Motors), not Amante Motors; 

• In January 1981, they ordered another unit from the same corporation after its President
and General Manager, Eduardo Garcia, persuaded them to do so; 
• That Garcia informed the spouses that the additional unit shall be "house financed" by
Biñan Motors; 

• That Eduardo Tolosa noticed that the vendor indicated in the deed of sale was not Biñan
Motors but Amante Motor Works; 

• That Garcia explained to Tolosa that he (Garcia) was to make full payment on the
jeepney to Amante Motor Works and that he (Tolosa) was to pay Garcia the monthly
installments thereon; 

• That Tolosa never received any notice from Biñan Motors about the jeepney unit he
ordered; 

• That Tolosa received a receipt from Filinvest Finance and Leasing Corporation about
payment he allegedly made on a jeepney unit he purchased from Amante Motor Works;

• That Garcia informed him he was in possession of the jeepney and said that he made the
initial payment on the vehicle and that he himself would pay its monthly amortization; 

• That Garcia prepared and executed a "Deed of Sale with Assumption of Mortgage" where
it appears that Tolosa sold and transferred to Garcia the said jeepney.

2) Servicewide amended its complaint 

• Adding Eduardo Garcia as the defendant.

• Alleged that the Tolosa spouses, without Servicewide’s knowledge and consent, executed
and delivered to Eduardo Garcia a "Deed of Sale with Assumption of Mortgage" over the
jeepney sought to be recovered. 

3) The trial court admitted the amended complaint and ordered the issuance of summons on
Garcia as additional defendant.

4) Tolosa spouses filed an "Amended Answer with Third-Party Complaint" impleading as third-
party defendants Biñan Motors and Eduardo Garcia. The trial court ordered service of summons
on the third-party defendants.

5) Subsequently, the sheriff seized the subject vehicle from the possession of one Lourdes
Bartina. 

6) Three days later, Bartina filed a "Third Party Claim" and "Urgent Motion for Release"
alleging ownership of the jeepney. She claimed that she purchased the vehicle from Biñan
Motors and regularly paid its subsequent installments to the Commercial Credit Corporation of
Las Piñas. 

7) The trial court released the vehicle to Bartina on an indemnity bond of P34,000.00. The court
found that the documents supporting Bartina’s ownership of the jeepney were in due form and
executed prior to the documents of the Tolosa spouses.
8) Biñan Motors and Eduardo Garcia filed their "Answer to Third-Party Complaint" 

• Claiming that the third-party plaintiffs (Tolosa spouses) had no cause of action against
them as it was Amante Motor Works that invoiced the vehicle; 

• That Tolosa spouses purchased a jeepney unit from them but their check for
downpayment bounced; 

• That they initiated a complaint for violation of the Bouncing Checks Law against
Eduardo Tolosa for which an information was filed on December 2, 1982; 

• That If the Tolosa spouses were prejudiced it was because of their unreasonable neglect
to make good their initial payment on the vehicle. 

9) A reply was filed by the Tolosa spouses.

10) Despite the court’s order, the subject jeepney was not released to Bartina. Thus, Bartina filed
her "Complaint in Intervention." 

11) Third-party defendants Garcia and Biñan Motors filed their "Answer to Complaint in
Intervention." 

• They claimed that they acquired the subject vehicle from the Tolosas "in consideration of
the value of one Celeste jeepney in the amount of P56,000.00" but that the Tolosas failed to pay
the downpayment on the vehicle; 

• They came to court with clean hands and that they are actually the victims of the
Tolosas. 

12) Servicewide manifested that it was adopting its complaint in the principal case as its
comment or answer to the complaint-in-intervention. 

13) At the pre-trial conference, the trial court noted that summons and copy of the amended
complaint had not been served on Eduardo Garcia as additional defendant. It deferred the pretrial
until such service shall have been effected. 

14) On January 10, 1985, the trial court ordered Servicewide to turn over possession of the
subject jeepney to Bartina upon filing of the increased bond of P55,000.00. Pretrial was again
scheduled on February 27, 1985 but for one reason or another, was postponed several times until
October 7, 1985.

15) On October 7, 1985, all parties, through their respective counsels, appeared except the
Tolosas and their counsel. The trial court declared the Tolosas as in default with respect to the
principal complaint and scheduled the reception of evidence for Servicewide. The Tolosas were
likewise declared nonsuited with respect to their third-party complaint against Biñan Motors and
Garcia. With regard to the complaint-in-intervention, the trial court scheduled a pretrial
conference.
16) At the hearing of February 4, 1986 for reception of Servicewide’s evidence, the Tolosas
again failed to appear despite due notice. Servicewide presented its legal accounts analyst, Ms.
Nannette Navea, who testified on the outstanding obligation of the Tolosas and Garcia. It also
presented several documents consisting of the promissory note, deed of chattel mortgage, the
deed of assignment of the Tolosas’ credit by Filinvest Finance and Leasing Corporation, and the
notice and demand letter to the Tolosas. Servicewide then submitted the case for decision.

17) Pretrial for the complaint-in-intervention originally scheduled on November 7, 1985 was
postponed several times until March 1, 1988. The Tolosas were notified but again failed to
appear on said date. For the second time, the trial court declared them to have waived their right
to present evidence as said the complaint and dismissed with prejudice their third-party
complaint against Garcia and Biñan Motors. The court also declared them as in default with
respect to the complaint-in-intervention of Bartina and scheduled the reception of Bartina’s
evidence accordingly. 

18) On April 27, 1988, at the hearing for reception of evidence on Bartina’s complaint-in-
intervention, the Tolosas again did not appear despite due notice. Intervenor Bartina testified that
the vehicle subject of the complaint was sold to her by Biñan Motors owned by Eduardo Garcia
and that the vehicle was in her possession when it was seized by the sheriff and thereafter turned
over to Servicewide. 21 Bartina thereafter identified and offered various documents proving her
ownership of the subject vehicle. 

19) On May 23, 1988, Bartina and the defendants-in-intervention Eduardo Garcia and Biñan
Motors, with the assistance of their respective counsels, moved to dismiss the complaint-in-
intervention. They alleged that they had "arrived at an amicable settlement of their claims." The
court granted the motion on May 24, 1988. 

RTC Ruling: In favor of Servicewide granting it the right to either foreclose the mortgage on the
subject vehicle or to demand from defendants, jointly and severally, payment of P34,224.78 plus
interest and damages.

Defendant Eduardo Garcia moved for reconsideration and clarification of the decision on the
ground that he was not one of the defendants in the principal case. He claimed that the court did
not acquire jurisdiction over his person because he was never served nor did he receive summons
on the amended complaint naming him as an additional defendant.

MR: Denied

Eduardo Garcia appealed to the Court of Appeals. 

CA: Found that no summons on the amended complaint had been served on Garcia; however,
since Garcia filed several pleadings as a third-party defendant in the trial court, he was deemed
to have submitted himself to its jurisdiction. Nonetheless, it found no sufficient evidence to hold
Garcia solidarily liable with the Tolosa spouses on the principal complaint. The Court of Appeals
therefore modified the trial court’s decision and relieved Garcia from liability.

Hence, this petition.

ISSUE: Whether there is sufficient evidence on record to hold Garcia, together with the Tolosa
spouses, solidarily liable to petitioner for the return of the subject motor vehicle or payment of its
equivalent value in money

RULING: No.

Garcia and Biñan Motors did not file an "Answer" to the complaint. The records of the case do
not show that both or neither of them were served any summons on the amended complaint. This
is precisely why Garcia raised the issue of lack of jurisdiction. Garcia and Biñan Motors however
filed an "Answer to Third Party Complaint" and "Answer to Complaint in Intervention."

It must be stressed that the third-party complaint filed by the Tolosas was dismissed twice by the
trial court — first at the pretrial of October 7, 1985 for the principal complaint and second at the
pretrial of March 1, 1988 for the complaint-in-intervention. The second dismissal was with
prejudice. The complaint-in-intervention was, upon motion of the parties-in-intervention, also
dismissed by the trial court on May 24, 1988.

A dismissal or discontinuance of an action operates to annul orders, rulings or judgments

previously made in the case. It also annuls all proceedings had in connection therewith and
renders all pleadings ineffective. A dismissal or nonsuit leaves the situation as though no suit had
ever been brought. Further proceedings in the action are arrested and what has been done therein
is also annulled, so that the action is as if it had never been. It carries down with it previous
proceedings and orders in the action, and all pleadings of both parties, and all issues with respect
to the plaintiff’s claim. 

The records do not show that petitioner adopted the "Answer to Third Party Complaint" and the
"Answer to Complaint in Intervention" filed by Biñan Motors and Garcia, and the testimony of
Bartina as part of its evidence in the trial court. It cannot rely on them on appeal for evidence not
formally offered before the trial court cannot be considered. To consider them at this stage will
deny the other parties their right to rebut them.
ADMISSION MADE BY COUNSEL

1.  Fule vs. Court of Appeals, G.R. No. 79094, 22 June 1988

FACTS: Respondent appellate court affirmed the judgment of the Regional Trial Court, Lucena City,
Branch LIV, convicting petitioner Manolo Fule of Violation of Batas Pambansa Blg. 22 (The Bouncing
Checks Law) on the basis of the stipulation of facts entered into between the prosecution and the defense
during the pre-trial conference in the Trial Court.

At the hearing of August 23, 1985, only the prosecution presented its evidence. At the subsequent hearing
on September 17, 1985, Fule waived the right to present evidence and, in lieu thereof, submitted a
Memorandum confirming the Stipulation of Facts. The Trial Court convicted Fule of the crime charged.

On appeal, the CA upheld the stipulation of facts and affirmed the judgment of conviction. Hence, this
recourse (appeal before the SC), with petitioner-appellant Fule contending that the Honorable respondent
Court of Appeals erred in affirming the decision of the Regional Trial Court convicting the petitioner of
the offense charged, despite the cold fact that the basis of the conviction was based solely on the
stipulation of facts made during the pre-trial on August 8, 1985, which was not signed by the petitioner,
nor by his counsel. In Sec.4 of Rule 118 of the Rules on Criminal Procedures:

 SEC. 4. Pre-trial agreements must be signed. — No agreement or admission made or entered during the
pre-trial conference shall be used in evidence against the accused unless reduced to writing and signed by
him and his counsel.
 
Having been effective since January 01, 1985, the above rule is applicable.
 
ISSUE: Whether or not the omission of the signature of the accused and his counsel, as mandatorily
required by the Rules, renders the Stipulation of Facts inadmissible in evidence.
 
RULING:By its very language, the rule is mandatory. Under the rule of statutory construction, negative
words and phrases are to be regarded as mandatory while those in the affirmative are merely directory
(McGee vs. Republic, 94 Phil. 820 [1954]). The use of the term “shall” further emphasizes its mandatory
character and means that it is imperative, operating to impose a duty which may be enforced (Bersabal vs.
Salvador, No. L-35910, July 21, 1978, 84 SCRA 176). And more importantly, penal statutes whether
substantive and remedial or procedural are, by consecrated rule, to be strictly applied against the
government and liberally in favor of the accused (People vs. Terrado No. L-23625, November 25, 1983,
125 SCRA 648).
 
The conclusion is inevitable, therefore, that the omission of the signature of the accused and his counsel,
as mandatorily required by the Rules, renders the Stipulation of Fact inadmissible in evidence. The fact
that the lawyer of the accused, in his memorandum, confirmed the Stipulation of Facts does not cure the
defect because Rule 118 requires both the accused and his counsel to sign the Stipulation of Facts. What
the prosecution should have done, upon discovering that the accused did not sign the Stipulation of Facts,
as required by Rule 118, was to submit evidence to establish the elements of the crime, instead of relying
solely on the supposed admission of the accused in the Stipulation of Facts. Without said evidence
independent of the admission, the guilt of the accused cannot be deemed established beyond reasonable
doubt.
Therefore, the judgment of CA is reversed and the case was ordered re-opened and remanded to the
appropriate branch of the Regional Trial Court of Lucena City, for further reception of evidence.

2.  King vs. People of the Philippines, G.R. No. 131540, 02 December 1999

Facts:

         On several occasions in January, 1992, at Las Piñas, Metro Manila, petitioner discounted
with complainant Ellen Fernandez several Equitable Bank checks postdated from July 23 to 29,
1992 in the total amount of P1,070,000.00 in exchange for cash in the amount of P1,000,000.00.
When the checks were deposited for payment, they were dishonored by the drawee bank because
they were drawn against an account without sufficient funds. Petitioner failed to make good the
checks despite demand.

During the hearing on the merits of this case on September 17, 1998, the prosecution
offered in evidence its documentary evidence. Petitioner admitted the genuineness and due
execution of the documents presented.

Issue: 

         Whether or not the trial court and the Court of Appeals gravely erred in admitting in
evidence all the documentary evidence of the prosecution though their due execution and
genuineness were not duly established in evidence pursuant to the provisions of the Rules of
Court and prevailing jurisprudence

Ruling:

         An admission, verbal or written, made by a party in the course of the proceedings in the
same case, does not require proof. The admission may be contradicted only by showing that it
was made through palpable mistake or that no such admission was made.

A pre-trial agreement not signed by a party is inadmissible, true. However, the conviction
of petitioner was based not on that agreement but on the documents submitted during the trial, all
of which were admitted without any objection from her counsel.

         From the foregoing, it is clear that the prosecution evidence consisted of documents
offered and admitted during the trial. In view of this, the CA correctly ruled that Fule v. Court of
Appeals 17 would not apply to the present controversy. In that case, a hearing was conducted
during which the prosecution presented three exhibits. However, Fule's conviction was "based
solely on the stipulation of facts made during rile pre-trial on August 8, 1985, which was not
signed by the petitioner, nor by his counsel." Because the stipulation was inadmissible in
evidence under Section 4 of Rule 118, the Court held that there was no proof of his guilt.

3.  People of the Philippines vs. Hernandez, G.R. No. 108028, 30 July 1996

FACTS
- Accused-appellant Cristina Hernandez was charged with the crime of illegal recruitment
committed in large scale in violating of Art. 38 (a) and (b) in relation to Article 13 (b) and (c) of
the New Labor Code.  Between Dec.14-Dec.24, 1988, in Manila, she represented herself to have
the capacity to contract, enlist and transport Filipino workers for employment abroad, and for a
fee, recruited and promised employment/job placement abroad to: ROGELIO N. LEGASPI,
ULDARICO P. LEGASPI, SONNY P. BERNABE, ARNEL B. MENDOZA, BENITO L.
BERNABE, ARNOLD P. VALENZUELA, ARMANDO P. PAGULAYAN, GREGORIO P.
MENDOZA, JR., RONALD T. CORREA, DANILO PALAD and ROBERT P. VELASQUEZ
without first having secured the required license or authority from the POEA.

- Upon arraignment, Hernandez pleaded not guilty and trial on the merits ensued. Of the 14
complainants, B. Bernabe, Velasquez, G. Mendoza and A. Mendoza were presented as witnesses
for the prosecution. 

- They testified to the following essential facts: 

Their first encounter with the Hernandez was on Dec.12, 1988 when one Josefa Cinco
accompanied them to the office of the Philippine Thai Association, Inc. (Philippine-Thai) in
Ermita, Manila to meet the appellant. Introducing herself as the general manager of Philippine-
Thai, Hernandez asserted that her company recruited workers for placement abroad and asked
private complainants if they wanted to work as factory workers in Taipei. Enticed by the
assurance of immediate employment and an $800 per month salary, they applied. Hernandez
required them to pay placement and passport fees in the total amount of P22,500.00 per
applicant, to be paid in three installments. They were issued receipts by Liza Mendoza, the last
one signed by Mendoza and Hernandez. Hernandez then assured them that they would be able to
leave for Taipei sometime before the end of Dec.1988, but contrary to the promise, they were
unable to leave for abroad. They demanded for the return of their money but to no avail. 

- DEFENSE presented as its lone witness, Hernandez, whose testimony consisted mainly in
denying the charges against her. She claimed that she never met any of the complainants nor did
she ever recruit any of them. She likewise denied having received money from anyone and
asserted that she did not know any Liza Mendoza who is the alleged treasure of Phil-Thai. She
maintained that although she had an office in Ermita Building, the said office belonged to B.C.
Island Wood Products Corp. which was engaged in the logging business. However, when
questioned further, appellant admitted being the president of Phil-Thai but only in a nominal
capacity, and claimed that as nominee-president, she did not participate in any of its transactions.
Appellant likewise insisted that Phil-Thai was engaged solely in the barong tagalog business.

- The court rendered a decision holding that the defense of "denial" interposed by the accused
could not prevail over the positive and clear testimonies of the prosecution witnesses which had
established the guilt of the accused beyond reasonable doubt. 

- Appellant comes to this Court for the reversal of the judgment of conviction 

ISSUES
1. WON Hernandez is guilty of illegal recruitment committed in a large scale and by a syndicate.

2. WON the trial court erred in taking judicial notice of the fact that Hernandez had been charged
of illegal recruitment in another criminal case and in considering the pendency thereof as
evidence of the scheme and strategy adopted by the accused.

3. WON the trial court erred in not giving credence or weight to the defense of the accused.

HELD

1. YES

The prosecution had in fact presented evidence to prove the said element of the crime of illegal
recruitment. "EXHIBIT I", a certification issued by the Chief Licensing Branch of the POEA,
attesting to the fact that neither appellant nor Philippine-Thai is licensed/authorized to recruit
workers for employment abroad, was offered and admitted in evidence without the objection of
the appellant.

Reasoning

- Defense contends that the prosecution failed to prove one of the essential elements of the crime
of illegal recruitment- that the offender is a non-licensee or non-holder of authority to lawfully
engage in the recruitment and placement of workers. This element was the subject of a
stipulation proposed by the prosecution and admitted by the defense during trial. Hernandez now
assails as erroneous the reliance placed by the prosecution on the said stipulation of facts in
dispensing with the presentation of evidence to prove the said element of the crime of illegal
recruitment. Appellant argues that: (1) the stipulation of facts was not tantamount to an
admission by the appellant of the fact of non-possession of the requisite authority or license from
the POEA, but was merely an admission that the Chief Licensing Officer of the POEA, if
presented in court, would testify to this fact, and (2) the stipulation of facts is null and void for
being contrary to law and public policy. This being the case, it remained incumbent upon the
prosecution to present evidence of such fact. 

ON WHAT WAS ADMITTED IN THE STIPULATION 

- Although appellant's arguments find no significant bearing in the face of the existence of
"EXHIBIT I", they nonetheless require deeper scrutiny and a clear response for future
application. 

- Appellant correctly distinguishes between an admission that a particular witness if presented in

court would testify to certain facts, and an admission of the facts themselves. According to the
appellant, what was stipulated on was "merely that the testimony of the Chief Licensing Officer
of the POEA would be to the effect that appellant is not licensed nor authorized to recruit
workers." 
- The distinction, though cogent, is unfortunately inapplicable to the case at bar. Conveniently
omitted from the appellant's reply chief is the ensuing statement made by the court after counsel
for the accused, Atty. Ulep, agreed to the stipulation proposed by the prosecution:

Atty. Ulep: Agreed, Your Honor.

Court: The prosecution and the defense agreed to stipulate/admit that from the record of the
POEA Licensing and Regulation Office, Dept. of Labor and Employment, accused Cristina
Hernandez/Phil. etc., Ass. . . . is neither licensed nor authorized by the office to recruit workers
overseas abroad and that if the duly authorized representative from the POEA Administration is
to take the witness stand, he will confirm to this fact as borne by the records. 

- It is evident that the prosecution and the defense counsel stipulated on two things: that from the
record of the POEA, Hernandez is neither licensed nor authorized by that office to recruit
workers for overseas abroad and that if the duly authorized representative from the POEA is to
take the witness stand, he will confirm to this fact. 

ON THE VALIDITY OF THE STIPULATION

- Appellant further contends that granting that defense counsel had in fact agreed to the above
stipulation of facts, the same is null and void for being contrary to the well-established rule that a
stipulation of facts is not allowed in criminal cases. 

- The rule prohibiting the stipulation of facts in criminal cases is grounded on the fundamental
right of the accused to be presumed innocent until proven guilty, and corollary duty of the
prosecution to prove the guilt of the accused beyond reasonable doubt. The rationale behind the
proscription against this class of agreements between prosecution and defense is that “It is not
supposed to be within the knowledge or competence of counsel to predict what a proposed
witness shall say under the sanction of his oath and the test of cross-examination. A conviction
for crime should not rest upon mere conjecture. Nor is it possible for a trial court to weigh with
exact nicety the contradictory declaration of witnesses not produced so as to be subjected to its
observation and its judgment as to their credibility.”

- However, in the light of recent changes in our rules, particularly the pre-trial provisions in Rule
118, the prohibition against a stipulation of facts in criminal cases no longer holds true. 

- Although not expressly sanctioned under the old rules of court, a stipulation of facts by the
parties in criminal cases has long been allowed and recognized as declarations constituting
judicial admissions, hence, binding upon the parties. In People vs. Bocar this Court stated that:
There is nothing unlawful or irregular about the above procedure. The declarations constitute
judicial admission, which are binding on the parties, by virtue of which the prosecution
dispensed with the introduction of additional evidence and the defense waived the right to
contest or dispute the veracity of the statements contained in the exhibits. 

- American jurisprudence has established the acceptability of the practice of stipulating during
the trial of criminal cases, and stated in People vs. Hare that: This court has held that an accused
may by stipulation waive the necessity of a proof of all or any part of the case which the people
have alleged against him and that having done so, he cannot complain in this Court of evidence
which he has stipulated into the record.

COROLLARY ISSUE: SHOULD STIPULATION BE IN WRITING AND SIGNED (Sec.4

R.118)

- A stipulation of facts entered into by the prosecution and defense counsel during trial in open
court is automatically reduced into writing and contained in the official transcript of the
proceedings had in court. The conformity of the accused in the form of his signature affixed
thereto is unnecessary in view of the fact that: "an attorney who is employed to manage a party's
conduct of a lawsuit has prima facie authority to make relevant admissions by pleadings, by oral
or written stipulation, which unless allowed to be withdrawn are conclusive." In fact, "judicial
admissions are frequently those of counsel or of the attorney of record, who is, for the purpose of
the trial, the agent of his client. When such admissions are made for the purpose of dispensing
with proof of some fact, they bind the client, whether made during, or even after, the trial."

- Appellant was never prevented from presenting evidence contrary to the stipulation of facts. If
appellant believed that the testimony of the Chief Licensing Officer of the POEA would be
beneficial to her case, then it is the defense who should have presented him. Her continuous
failure to do so during trial was a waiver of her right to present the pertinent evidence to
contradict the stipulation of facts and establish her defense.

- The stipulation of facts proposed during trial by prosecution and admitted by defense counsel is
tantamount to a judicial admission by the appellant of the facts stipulated on. Controlling,
therefore, is Section 4, Rule 129 of the Rules of Court.

2. NO.

Ratio It is true that as a general rule, courts are not authorized to take judicial notice of the
contents of the records of other cases, even when such cases have been tried or are pending in the
same court, and notwithstanding the fact that both cases may have been tried or are actually
pending before the same judge. However, this rule is subject to the exception that in the absence
of objection and as a matter of convenience to all parties, a court may properly treat all or any
part of the original record of the case filed in its archives as read into the records of a case
pending before it, when with the knowledge of the opposing party, reference is made to it, by
name and number or in some other manner by which it is sufficiently designated. The judicial
notice taken by the lower court of the pendency of another illegal recruitment case against the
appellant falls squarely under the above exception in view of the fact that it was the appellant
herself who introduced evidence on the matter when she testified in open court.

Reasoning

- Appellant cites a violation of Section 3 of Rule 129 of the Rules of Court which provides that
before the court may take judicial notice of any matter, the parties shall be heard thereon if such
matter is decisive of a material issue in the case. It is claimed that the lower court never
announced its intention to take judicial notice of the pendency of the other illegal recruitment
case nor did it allow the accused to be heard thereon.
- Even assuming, however, that the lower court improperly took judicial notice of the pendency
of another illegal recruitment case against the appellant, the error would not be fatal to the
prosecution's cause. The judgment of conviction was not based on the existence of another illegal
recruitment case filed against appellant by a different group of complainants, but on the
overwhelming evidence against her in the instant case.

3. NO.

We do not find any compelling reason to reverse the findings of the lower court that appellant's
bare denials cannot overthrow the positive testimonies of the prosecution witnesses against her.

Well established is the rule that denials if unsubstantiated by clear and convincing evidence are
negative, self-serving evidence which deserve no weight in law and cannot be given greater
evidentiary weight over the testimony of credible witnesses who testify on affirmative matters.
That she did not merely deny, but likewise raised as an affirmative defense her appointment as
mere nominee-president of Philippine-Thai is a futile attempt at exculpating herself and is of no
consequence whatsoever when weighed against the positive declarations of witnesses that it was
the appellant who executed the acts of illegal recruitment as complained of.

Disposition  Appellant's conviction of the crime of illegal recruitment in large scale is hereby
AFFIRMED, and the penalty imposed MODIFIED.

RULE 130 OF THE RULES OF COURT- RULE OF ADMISSIBILITY

OBJECT EVIDENCE
1. People of the Philippines vs. William, et.al., G.R. No. 93712, 15 June 1992

Paras, J.:

FACTS: Sometime in January 1986, the NARCOM conducted a surveillance at the Starlight
Disco at Pasay City based on information received that drug pushers are roaming around the
said place. A team consisting of three (3) members was formed and surveillance was started
two (2) weeks before the actual date of operation. On January 18,1986, one member of the
team Pfc. Manuel Olivas posed as tourist guide with a U.S. Navy as tourist and proceeded to
the coffee shop at Starlight Disco. One of the suspects Romeo Calogcog approached the group
who in loud conversations made known the fact that they have a client, buyer of the dope,
offering to contact person who has the stuff of marijuana which they offered to buy at P200.00.
Romulo Calogcog left and returned with one Alejandro William who owned the marijuana. The
amount of P200.00 was paid to the two (2) suspects as payment for the marijuana stuff. After
the marijuana was delivered to Pfc, Olivas and the payment of P200.00 was received by
Alejandro William, both were arrested by the team. 

The accused-appellants were charged with the violation of Section 4 of Republic Act 6425 as
amended (The Dangerous Drugs Act of 1972) in an Information filed by the Pasay City Fiscal's
Office.

ISSUE: WHETHER OR NOT the trial court seriously erred in considering that the evidences
submitted are indeed the corpus delicti of the crime in the absence of convincing proof to that
effect
RULING: NO.

The probative value of an object evidence is not affected by the fact that it is beyond the
commerce of man.·Appellants raise the strange argument that Exhibit 'C' has no probative value
because the subject thereof—marijuana—is beyond the commerce of man. This is simply
absurd. The transfer of marijuana was incidental to the arrest of appellants and the confiscation
of the subject matter of the crime. Exhibit 'C' is in the same category as a death certificate and
autopsy report which are admissible evidence of the subject of the crime—the human cadaver
which is also beyond the commerce of man. Transfer of goods as a consequence or by virtue of
police or state action such as forfeiture, seizure, condemnation, confiscation did not fall within
the phrase 'commerce of man' even in its broadest meaning. 

Assuming that the signing of the receipt of seized goods by appellants constituted extrajudicial
confession and therefore required the assistance of counsel, any defect or infirmity was cured or
waived when appellants' counsel, Atty. Oscar Nudo, categorically stated that appellants were
not objecting to the admission of Exhibit 'C'. 

Under Sec. 36, Rule 132, of the Revised Rules of Court, objections to evidence shall be made
as soon as the grounds therefor shall become reasonably apparent. The alleged infirmity of
Exhibit 'C' is the absence of counsel when appellants signed Exhibit 'C'. This alleged defect was
reasonably apparent at the time Exhibit 'C' was introduced and at the time it was formally
offered in evidence. It must be stressed that appellants did not merely fail to object to said
exhibit's admission. They even categorically manifested that they were not objecting to the
admission of Exhibit 'C'. Appellants cannot now object to the admission of Exhibit 'C'. Objections
to admissibility of evidence cannot be made for the first time on appeal. (People v. Verges, 105
SCRA 744). 

The presentation of the marijuana specimens taken from appellants and their identification by
the forensic chemist constitute proof of corpus delicti.·Corpus delicti simply means the fact that
a crime was committed.

In the case at bar, appellants were positively identified as the sellers of goods to the NARCOM
agents. The goods were delivered by and seized from appellants. (Exhibit C) The goods seized
were tested positive for marijuana (Exhibits D, K), one of the drugs prohibited under Sec. 4 of
the Dangerous Drugs Act. Said marijuana and its containers were presented in evidence
(Exhibits 1,1-1,1-2). 

Appellants try to raise doubt as to the identity of the marijuana by pointing to the possibility that
the objects seized from appellants may have 'commingled' with other NARCOM evidence
considering their massive operations on January 18,1986. 

This is highly improbable. The Receipt for Property Seized (Exhibit C), executed by appellants
themselves immediately following their arrest on January 18, 1986, acknowledged the seizure of
goods from them on the date indicated thereon and described said goods as: 

'A' one (1) round plastic cannister leveled (labeled ?) 'Bulleye' Magnum, containing marijuana
arrox (sic) 3 grams. 
'B' one (1) big (?) foil containing marijuana.' 
The Affidavit of Arrest (Exhibit A) executed by arresting officers Pat. Parungao and Pfc. Olivas
described the containers of the marijuana seized from appellants as 'a plastic container with a
'Bullseye' mark and an aluminum foil.' 

The request for laboratory examination executed by Major Ruperto M. Remetre on January 19,
1986 (Exhibit J) in connection with the case involving Virgilio Apura, appellant Alejandro William,
Benjamin Samia, and appellant Romulo Calogcog described the specimens submitted for
examination as 'one (1) round shape plastic container marked 'Bullseye' containing suspected
marijuana' and 'one (1) cigarette foil of suspected marijuana. 

The Certificate of Laboratory Result (Exhibit D) executed by examining forensic chemist Lt. Tita
Advincula described the specimens submitted in connection with said case as follows: 

'(A)' 3.09 grams of suspected dried marijuana flowering tops placed in a round plastic container
with cover.

'(B)' 0.58 gram of suspected marijuana flowering tops wrapped with aluminum foil. 

The foregoing information matches the description contained in Chemistry Report No. D-51-86
issued by Lt. Advincula (Exhibit K). 

The specimens described in the foregoing documents were presented in court (Exhibits 1,1-1,1-
2) and identified by Lt. Advincula as the specimens submitted to her for examination in
connection with appellants' case. 

In view of the foregoing circumstances, it is highly unlikely that the specimens examined by the
forensic chemist and which tested positive for marijuana are different from those seized from
appellants.

2. Calde vs. Court of Appeals, G.R. No. 93980, 27 June 1994

PUNO, J.:
FACTS:

Calibia Lingdan Bulanglang, the decedent, left behind nine thousand pesos (P9,000.00) worth of
property. She also left a Last Will and Testament, and a Codicil and named Nicasio Calde the
executor or the Will and Codicil. Both documents contained the thumbmarks of decedent. They
were also signed by three (3) attesting witnesses each, and acknowledged before Tomas A.
Tolete, then the Municipal Judge and Notary Public Ex-Officio of Bauko, Mt. Province. The
named executor filed a Petition for its allowance. Unfortunately, he died during the pendency of
the proceedings, and was duly substituted by petitioner. 

Private respondents, relatives of decedent, opposed the Petition filed by Calde, questioning the
legality and validity of the said documents under Art. 805 of the Civil Code. Two (2) of the six (6)
witnesses testified that only one ballpen was used in signing the two testamentary documents
and were subscribed and attested by the instrumental witnesses during a single occasion.
However, on the face of the document, the signatures of some of the attesting witnesses in the
decedent’s will and its codicil were written in blue ink while the others were in black. In addition,
Judge Tomas A. Tolete testified in narration as to how the documents in question were
subscribed and attested, starting from decedent’s thumbmarking thereof, to the alleged signing
of the instrumental witnesses thereto in consecutive order.

ISSUE: Whether or not, based on the evidence submitted, respondent appellate court erred in
concluding that both decedent’s Last Will and Testament, and its Codicil were subscribed by the
instrumental witnesses on separate occasions. 

RULING: Evidence may generally be classified into three (3) kinds, from which a court or
tribunal may properly acquire knowledge for making its decision, namely: real evidence or
autoptic preference, testimonial evidence and circumstantial evidence. In the case at bench, the
autoptic proference contradicts the testimonial evidence produced by petitioner. Thus, it was not
erroneous nor baseless for respondent court to disbelieve petitioner’s claim that both
testamentary documents in question were subscribed to in accordance with the provisions of
Art. 805 of the Civil Code. Neither did respondent court err when it did not accord great weight
to the testimony of Judge Tomas A. Tolete since nowhere in Judge Tolete’s testimony is there
any kind of explanation for the different-colored signatures on the testaments. The petition for
review is denied. The Supreme Court affirmed in toto the Decicion of the Court of Appeals.

3. People of the Philippines vs. Yatar, G.R. No. 150224, 19 May 2004
Facts: 
Appellant Yatar and his wife were living in the house of Isabel Dawang together with the victim,
Kathylyn Uba. In June 1998, appellant’s wife left the house because of their frequent quarrels.
Appellant received from the victim, Kathylyn Uba, a letter from his estranged wife in the early
morning on June 30, 1998. Appellant was seen by Apolonia Wania and Beverly Denneng at
1:00 p.m. of June 30, 1998 near the kitchen of the house of Isabel Dawang, acting strangely
and wearing a dirty white shirt with collar. Judilyn Pas-a saw appellant going down the ladder of
the house of Isabel at 12:30 p.m., wearing a dirty white shirt, and again at 1:30 p.m., this time
wearing a black shirt. Appellant hurriedly left when the husband of Judilyn Pas-a was
approaching. Salmalina Tandagan saw appellant in a dirty white shirt coming down the ladder of
the house of Isabel on the day Kathylyn Uba was found dead. The door leading to the second
floor of the house of Isabel Dawang was tied by a rope. The victim, Kathylyn Uba, lay naked in a
pool of blood with her intestines protruding from her body on the second floor of the house of
Isabel Dawang, with her stained pants, bra, underwear and shoes scattered along the
periphery. Laboratory examination revealed sperm in the victim’s vagina. The stained or dirty
white shirt found in the crime scene was found to be positive with blood. DNA of the semen
found on the victim’s 
vagina, compared with the DNA profile of the appellant are identical and Appellant escaped two
days after he was detained but was subsequently apprehended. 
 
Issue:  Whether or not the judgement of conviction was meritorious. 
 
Ruling:  Yes. The testimonies of the witnesses are afforded credibility as the Supreme Court
will not interfere with the judgment of the trial court in determining the credibility of witnesses
unless there appears in the record some fact or circumstance of weight and influence which has
been overlooked or the significance of which has been misinterpreted. The latter is in a better
and unique position of hearing first hand the witnesses and observing their deportment, conduct
and attitude. 
 
Furthermore, the circumstantial evidence presentedby the prosecution, as presented in the facts
of this case, proves beyond doubt that the accused committed the crime.Circumstantial
evidence, to be sufficient to warrant a conviction, must form an unbroken chain which leads to a
fair and reasonable conclusion that the accused, to the exclusion of others, is the perpetrator of
the crime. To determine whether there is sufficient circumstantial evidence, three requisites
must concur: (1) there is more than one circumstance; (2) facts on which the inferences are
derived are proven; and (3) the combination of all the circumstances is such as to produce a
conviction beyond reasonable doubt. 
 
As to the use of DNA evidence, under Philippine law, evidence is relevant when it relates
directly to a fact in issue as to induce belief in its existence or non-existence. In this case, the
DNA evidence obtained which was appreciated by the court a quo is relevant and reliable since
it is reasonably based on scientifically valid principles of human genetics and molecular biology. 
It must be noted, however, that in assessing the probative value of DNA evidence, courts should
consider, inter alia, the following factors: how the samples were collected, how they were
handled, the possibility of contamination of the samples, the procedure followed in analyzing the
samples, whether the proper standards and procedures were followed in conducting the tests,
and the qualification of the analyst who conducted the tests. 
The judgment in a criminal case can be upheld only when there is relevant evidence from which
the court can properly find or infer that the accused is guilty beyond reasonable doubt.Proof
beyond reasonable doubt requires moral certainty of guilt in order to sustain a conviction. Moral
certainty is that degree of certainty that convinces and directs the understanding and satisfies
the reason and judgment of those who are bound to act conscientiously upon it. It is certainty
beyond reasonable doubt. This requires that the circumstances, taken together, should be of a
conclusive nature and tendency; leading, on the whole, to a satisfactory conclusion that the
accused, and no one else, committed the offense charged. In view of the totality of evidence
appreciated thus far, the present case passes the test of moral certainty. 

4. Bank of Philippine Islands vs. Reyes, G.R. no. 157177, 11 February 2008
FACTS:
On December 7, 1990, respondent Jesusa Reyes together with her daughter, went to BPI
Zapote Branch to open an ATM account. Respondent informed one of petitioners employees,
Mr. Capati, that they wanted to open an ATM account for the amount of P200,000.00,
P100,000.00 of which shall be withdrawn from her exiting savings account with BPI bank and
the other P100,000.00 will be given by her in cash. Capati allegedly made a mistake and
prepared a withdrawal slip for P200,00.00 to be withdrawn from her existing savings account
with said bank and the respondent believing in good faith that Capati prepared the papers with
the correct amount signed the same unaware of the mistakes in figures. Minutes later after the
slips were presented to the teller, Capati returned to where the respondent was seating and
informed the latter that the withdrawable balance could not accommodate P200,000.00.
Respondent explained that she is withdrawing the amount of P100,000.00 only and then
changed and correct the figure two (2) into one (1) with her signature super-imposed thereto
signifying the change, afterwhich the amount of P100,000.00 in cash in two bundles containing
100 pieces of P500.00 peso bill were given to Capati with her daughter Joan witnessing the
same. Thereafter Capati prepared a deposit slip for P200,000.00 in the name of resondent
Jesusa Reyes with the new account no. 0235-0767-48 and brought the same to the teller's
booth.
After a while, he returned and handed to the respondent her duplicate copy of her deposit to the
new account reflecting the amount of P200,000.00 with receipt stamp showing December 7, as
the date. Later on, respondent would become aware that her ATM account only contained the
amount of P100,000.00 with interest. Hence, she filed an action before the RTC.
Petitioner claimed that there was actually no cash involved with the transactions which
happened on December 7, 1990 as contained in the bank’s teller tape.

ISSUE:
Whether or not respondent Jesusa made an initial deposit of P200,000.00 in her newly opened
Express Teller account on December 7, 1990.

RULING:
NO, respondent Jesusa failed to substantiate her claim that she made an initial deposit of
P200,000.00  in her newly opened Express Teller account on December 7, 1990.

After a careful and close examination of the records and evidence presented by the parties, the
Court find that respondents failed to successfully prove by preponderance of evidence that
respondent Jesusa made an initial deposit of P200,000.00 in her Express Teller account.
Respondent Jesusa and her daughter Joan testified that at the outset, respondent Jesusa told
Capati that she was opening an Express Teller account for P200,000.00; that she was going to
withdraw and transfer P100,000.00 from her savings account to her new account, and that she
had an additional P100,000.00 cash. However, these assertions are not borne out by the other
evidence presented.
Notably, it is not refuted that Capati prepared a withdrawal slip for P200,000.00. This is contrary
to the claim of respondent Jesusa that she instructed Capati to make a fund transfer of only
P100,000.00 from her savings account to the Express Teller account she was opening. Yet,
respondent Jesusa signed the withdrawal slip. The Court finds it strange that she would sign the
withdrawal slip if her intention in the first place was to withdraw only P100,000.00 from her
savings account and deposit P100,000.00 in cash with her. Moreover, respondent Jesusa's
claim that she signed the withdrawal slip without looking at the amount indicated therein fails to
convince us, for respondent Jesusa, as a businesswoman in the regular course of business and
taking ordinary care of her concerns, would make sure that she would check the amount written
on the withdrawal slip before affixing her signature. Significantly, the Court noted that the space
provided for her signature is very near the space where the amount of P200,000.00 in words
and figures are written; thus, she could not have failed to notice that the amount of P200,000.00
was written instead of P100,000.00. The fact that respondent Jesusa initially intended to
transfer the amount of P200,000.00 from her savings account to her new Express Teller
account was further established by the teller's tape presented as petitioner's evidence and by
the testimony of Emerenciana Torneros, the teller who had attended to respondent Jesusa's
transactions.

The teller's tape definitely establishes the fact of respondent Jesusa's original intention to
withdraw the amount of P200,000.00, and not P100,000.00 as she claims, from her savings
account, to be transferred as her initial deposit to her new Express Teller account, the
insufficiency of her balance in her savings account, and finally the fund transfer of the amount of
P100,000.00 from her savings account to her new Express Teller account. The Court gave great
evidentiary weight to the teller's tape, considering that it is inserted into the bank's computer
terminal, which records the teller's daily transactions in the ordinary course of business, and
there is no showing that the same had been purposely manipulated to prove petitioner's claim.
While the fact that the alteration in the original deposit slip was signed by Capati and not by
respondent Jesusa herself was a violation of the bank's policy requiring the depositor to sign the
correction, nevertheless, the Court finds that respondents failed to satisfactorily establish by
preponderance of evidence that indeed there was an additional cash of P100,000.00 deposited
to the new Express Teller account.
Physical evidence is a mute but eloquent manifestation of truth, and it ranks high in our
hierarchy of trustworthy evidence. The Court had, on many occasions, relied principally upon
physical evidence in ascertaining the truth. Where the physical evidence on record runs counter
to the testimonial evidence of the prosecution witnesses, the Court consistently rule that the
physical evidence should prevail.

5. People of the Philippines vs. Larrañaga, 463 SCRA 652 (Motion for
reconsideration)

PER CURIAM

FACTS: (Feb. 3, 2004)

On the night of July 16, 1997, victims Marijoy and Jacqueline Chiong failed to come
home on the expected time. Two days after, a young woman was found dead at the foot of a
cliff. Her pants were torn, her t-shirt was raised up to her breast and her bra was pulled down.
Her face and neck were covered with masking tape and attached to her left wrist was a
handcuff. The woman was identified as Marijoy.
 After almost ten months, accused Davidson Rusia surfaced and admitted before the
police having participated in the abduction of the victims. He identified appellants Fransico Juan
Larrañaga, Josman Aznar, Rowen Adlawan, Alberto Caño, Ariel Balansag, James Anthony Uy
and James Andrew Uy as perpetrators of the crime. He testified as follows:
1. That at 10:30 in the evening of July 16,1997, he met Rowen and Josman and
told him to ride with them in a white car. Following them were Larrañaga, James
Anthony and James Andrew who were in a red car. Josman stopped the white
car in front of the waiting shed where the Chiong sisters were standing and
forced them to ride the car. Rusia taped their mouths and handcuffed them jointly
2. That after stopping by a safe house, the group went to the South Bus Terminal
where they met Alberto Caño and Ariel Balansag and hired a white van. They
traveled to the south of Cebu City, leaving the red car at the bus terminal
3. After parking their vehicles near precipice, they drank and had a pot session.
Later they started to rape the victims inside the vehicle
4. That Josman instructed Rowen and Ariel to bring Marijoy to the cliff and push her
into the ravine.
The claims of Rusia were supported by other witnesses. The RTC found the accused guilty of
the crimes of kidnapping and serious illegal detention. The case reached the Supreme Court
which affirmed the RTC with modifications. The Supreme Court found the appellants guilty of
the special complex crime of kidnapping and serious illegal detention with Homicide and Rape
and sentenced to suffer the penalty of DEATH by lethal injection. 
Hence this motion for reconsideration.
Larrañaga argues that according to a separate study of Dr. Rosario-Fortun, the examination
conducted on the body found in Tan-awan, Cacar is inadequate.
Aznar submitted the affidavit of Atty. Villarin to show that the investigation of the case was
flawed and that David Rusia is not a credible witness

ISSUE: Whether or the prosecution failed to prove the guilty of appellants beyond
reasonable doubt.

RULING: NO.
Appellants vigorously contend that we should not have sustained Rusia’s testimony hook, line
and sinker, owing to his tainted record and reputation. However, it must be stressed that Rusia’s
testimony was not viewed in isolation. In giving credence to Rusia’s testimony, the trial court
took into consideration the physical evidence and the corroborative testimonies of other
witnesses. Thus, we find no reason why we should not uphold the trial court’s findings.

We reiterate our pronouncement in our Decision that what makes Rusia’s testimony worthy of
belief is its striking compatibility with the physical evidence. Physical evidence is one of
the highest degrees of proof. It speaks more eloquently than all witnesses put together.
The presence of Marijoy’s ravished body in a deep ravine at Tan-awan, Carcar with tape on her
mouth and handcuffs on her wrists certainly bolstered Rusia’s testimony on what actually took
place from Ayala Center to Tan-awan. Indeed, the details he supplied to the trial court are of
such nature and quality that only a witness who actually saw the commission of the crimes
could furnish. Reinforcing his testimony is its corroboration by several other witnesses who saw
incidents of what he narrated. Rolando Dacillo and Mario Minoza witnessed Jacqueline’s two
failed attempts to escape from appellants near Ayala Center. Benjamin Molina and Miguel
Vergara recognized Rowen as the person who inquired from them where he could find a vehicle
for hire on the evening of July 16, 1997. Alfredo Duarte saw Rowen when he bought barbeque
and Tanduay at Nene’s Store while the white van, driven by Caño, was waiting on the side of
the road and he heard voices of "quarreling male and female" emanating from the van. And
lastly, Manuel Camingao and Rosendo Rio testified on the presence of Larrañaga and Josman
at Tan-awan, Carcar at dawn of July 17, 1997. All these bits and pieces of story form part of
Rusia’s narration. Now, with such strong anchorage on the physical evidence and the
testimonies of disinterested witnesses, why should we not accord credence to Rusia’s
testimony? Even assuming that his testimony standing alone might indeed be unworthy of belief
in view of his character, it is not so when considered with the other evidence presented by the
prosecution.

Larrañaga and Aznar bewail our refusal to overturn the trial court’s exclusion of Professor
Jerome Bailen and Atty. Florencio Villarin, NBI, Regional Director, as defense witnesses.
Professor Bailen was properly excluded. First, he is not a finger-print expert but an
archaeologist. And second, his report consists merely of the results of his visual inspection of
the exhibits already several months old. Anent Atty. Villarin’s failure to testify before the trial
court, suffice it to say that his belated Affidavit, which Aznar submitted via his supplemental
motion for reconsideration dated May 5, 2004, raises nothing to change our findings and
conclusions. What clearly appears in said Affidavit is a man trying to impress people that he was
the one responsible for solving the Chiong case and for that, he deserves a promotion.

Knowing that the prosecution’s theory highly rests on the truth of Rusia’ testimony, appellants
endeavor to destroy it by claiming that the body found at the foot of a deep ravine in Tan-awan,
Carcar was not that of Marijoy. We must reiterate the reasons why we cannot give our assent to
such argument. First, Inspector Edgardo Lenizo,a fingerprint expert, testified that the fingerprints
of the corpse match those of Marijoy. Second, the packaging tape and the handcuff found on
the dead body were the same items placed on Marijoy and Jacqueline while they were being
detained. Third, the body had the same clothes worn by Marijoy on the day she was abducted.
And fourth, the members of the Chiong family personally identified the corpse to be that of
Marijoy which they eventually buried. They erected commemorative markers at the ravine,
cemetery and every place which mattered to Marijoy. As a matter of fact, at this very moment,
appellants still fail to bring to the attention of this Court any person laying a claim on the said
body. Surely, if the body was not that of Marijoy, other families who had lost someone of similar
age and gender as Marijoy would have surfaced and claimed the body. The above
circumstances only bolster Rusia’s narration that Rowen and Ariel pushed Marijoy into the deep
ravine, following Josman’s instruction "to get rid" of her.

6. People of the Philippines vs. Malimit, 264 SCRA 167

Facts:

On April 15, 1991, Onofre Malaki was attending to his store. Malaki’s houseboy Edilberto Batin,
on the other hand, was busy cooking chicken for supper at the kitchen located at the back of the
store. Soon thereafter, Florencio Rondon, a farmer, arrived at the store of Malaki. Rondon was
to purchase chemical for his rice farm. Meanwhile, Batin had just finished cooking and from the
kitchen, he proceeded directly to the store to ask his employer (Malaki) if supper is to be
prepared. As Batin stepped inside the store, he was taken aback when he saw appellant coming
out of the store with a bolo, while his boss, bathed in his own blood, was sprawled on the floor
struggling for his life. Rondon, who was outside and barely five 5 meters away from the store,
also saw appellant Jose Malimit rushing out through the front door of Malaki’s store with a
blood-stained bolo. Aided by the illumination coming from a pressure lamp inside the store,
Rondon clearly recognized Malimit. Batin immediately went out of the store to seek help.
Outside the store, he met Rondon After a brief  conversation, both Batin and Rondon rushed to
the nearby house of Malaki’s brother-in-law Eutiquio Beloy and informed Beloy of the tragic
incident. Batin, along with Beloy, went back to the store. Inside, they saw the lifeless body of
Malaki in a pool of blood lying prostrate at the floor. Beloy readily noticed that the store’s drawer
was opened and ransacked and the wallet of Malaki was missing from his pocket

 Issue:

W/N the admission as evidence of Malaki’s wallet with its contents, viz., (1) Malaki’s residence
certificate; (2) his identification card; and (3) bunch of keys, violates his right against self-
incrimination.

Ruling:

We are not persuaded. The right against self-incrimination guaranteed under our fundamental
law finds no application in this case. This right, as put by Mr. Justice Holmes in Holt vs. United
States, „x x x is a prohibition of the use of physical or moral compulsion, to extort
communications from him x x x.‰ It is simply a prohibition against legal process to extract from
the [accused}’s own lips, against his will, admission of his guilt. It does not apply to the instant
case where the evidence sought to be excluded is not an incriminating statement but an object
evidence.

7. People of the Philippines vs. CAjumocan, 430 SCRA 311

Facts:
Leo was asleep beside Apolinario Mirabueno when he was roused from his slumber by
the rustling of dried leaves outside the house. He saw appellant Cornelip Cajumocan who drew
a gun and shot Apolinario in the head. Leo cried out for help. Apolinario was brought to the
hospital but was declared dead on arrival. Cajumocan was charged of murder.
 Cajumocan was a security agent. A long firearm was assigned to him. It was found out
that the place of the shooting incident was one kilometer away from his post. But according to
Cajumocan, he never left his post. His paraffin test also came as negative. 
Issue:
Whether the negative findings of the paraffin test conducted on the appellant is
conclusive proof of his evidence.
Ruling:
No. Paraffin tests, in general, have been rendered inconclusive by this Court. Scientific
experts concur in the view that the paraffin test has proved extremely unreliable in use. It can
only establish the presence or absence of nitrates or nitrites on the hand; still, the test alone
cannot determine whether the source of the nitrates or nitrites was the discharge of a firearm.
The presence of nitrates should be taken only as an indication of a possibility or even of a
probability but not of infallibility that a person has fired a gun, since nitrates are also admittedly
found in substances other than gunpowder. Appellant’s argument that the negative result of
gunpowder nitrates from the paraffin test conducted on him the day after the crime was
committed, thereby showing an absence of physical evidence that he fired a gun, is untenable.
Paraffin tests, it must be emphasized, merely corroborate direct evidence that may be
presented by the prosecution. In the case at bar, the positive, clear and categorical testimony of
the lone eyewitness to the crime deserves full merit in both probative weight and credibility over
the negative results of the paraffin test conducted on the appellant. Verily, establishing the
identity of the malefactor through the testimony of the witness is the heart and cause of the
prosecution. All other matters, such as the paraffin test, are of lesser consequence where there
is positive identification by the lone eyewitness, Leo Mirabueno, of appellant as the perpetrator
of the crime. Hence, a paraffin test cannot be considered as conclusive proof of appellant’s
innocence.

8. Revita vs. People of the Philippines, G.R. No. 177564, 31 October 2008

Facts:

Petition for Review on Certiorari under Rule 45 of the Rules of Court assails the Decision finding
petitioner Arturo O. Revita (Arturo) guilty of the crime of homicide.

That on or about the 23 day of July, 2002, in the evening, in Brgy. Rajal, Municipality of
rd

Balungao, Province of Pangasinan, Arturo being then armed with an unlicensed firearm, with
intent to kill, did then and there, willfully, unlawfully and feloniously attack and shoot Flordeliza
Caguioa, inflicting upon her multiple gunshot wounds on the different parts of her body which
caused her death.

The totality of evidence offered by the prosecution shows that at around 8:00 o'clock in the
evening of 23 July 2002, Bryan and his cousin, Manilyn Rangel (Manilyn), were idly talking at
the yard of Flordeliza in Sitio Bantog, Barangay Rajal, Balungao, Pangasinan, when Arturo
arrived. Bryan asked Arturo where he was going, but the latter, who looked infuriated, did not
reply. Arturo proceeded to the direction of Flordeliza who was coming out of her house towards
the terrace. When Arturo was already close to Flordeliza, at the distance of two and a half
meters, he shot the latter with a baby armalite several times. Flordeliza fell down. Bryan saw the
incident since the place was illuminated by a light coming from his aunt's terrace. After
witnessing the shocking incident, Bryan and Manilyn ran away from the scene to a cousin's
house nearby.
The following day, Dr. Madriaga conducted an autopsy of the corpse of Flordeliza where she
found seven gunshot wounds, four of which were entry wounds and the three others being exit
wounds. She observed that three of the four entry wounds were fatal.

Arturo denied the accusation against him. He claimed that when the killing of Flordeliza
occurred on 23 July 2002, he was in the house of his sister situated in Sitio Bantog, Barangay
Rajal, Balungao, Pangasinan, enjoying a drinking spree while waiting for the arrival of his sister
from Spain. He alleged he was with the company of his brothers, sister, wife, children and some
friends. After getting drunk, he went to sleep only to be awakened by his wife at around 8:30 to
9:00 p.m. as police officers were looking for him. The same police officers brought him to the
municipal jail and detained him. The following morning, he was brought to Urdaneta City where
he was subjected to a paraffin test. The test yielded a negative result since there was no
gunpowder residue found in his hands.

P/Insp. Emelda Besarra Roderos testified that when she conducted a paraffin test on Arturo,
she found that the latter was negative for the presence of gunpowder nitrates.

Issue: W/N the Arturo can insist that the conviction is tainted by reasonable doubt since the
paraffin test conducted on him resulted negative.

Ruling:

No. Arturo insists that his conviction is tainted by reasonable doubt since the paraffin test
conducted on him resulted negative. Suffice it to state that even negative findings of the paraffin
test do not conclusively show that a person did not fire a gun. A paraffin test has been held to
be highly unreliable. The Court thus once held:

Scientific experts concur in the view that the paraffin test has "x x x proved extremely
unreliable in use. The only thing that it can definitely establish is the presence or
absence of nitrates or nitrites on the hand. It cannot be established from this test alone
that the source of the nitrates or nitrites was the discharge of a firearm. The person may
have handled one or more of a number of substances which give the same positive
reaction for nitrates or nitrites, such as explosives, fireworks, fertilizers, pharmaceuticals,
and leguminous plants such as peas, beans, and alfalfa. A person who uses tobacco
may also have nitrate or nitrite deposits on his hands since these substances are present
in the products of combustion of tobacco." In numerous rulings, we have also recognized
several factors which may bring about the absence of gunpowder nitrates on the hands
of a gunman, viz: when the assailant washes his hands after firing the gun, wears gloves
at the time of the shooting, or if the direction of a strong wind is against the gunman at
the time of firing. x x x.

9. People of the Philippines vs. Galvez, G.R. No. 157221

People v. Galvez
G.R. No. 157221, March 30, 2007
Austria-Martinez, J.,
Facts: At around 11 o’clock in the evening of July 27, 1991, Danilo Perez, Rosalio Enojarda,
Noel Cugal, Ricardo Francisco and Wilfredo Rellios, took a break from making copra to eat
leftover dinner inside the copra kiln in the farm of Perez in Matarling, Lantawan, Basilan. When
Enojarda stood up from the circle where they were eating to drink water, shots rang out and
Enojarda fell to the ground shouting “Dan ya tupa comigo” (Dan, I am hit). The rest of the group
took cover, crawling to different directions. After the attack, Rellios reported the incident to the
barangay captain and they brought Enojarda’s dead body to his family. An Information for
Murder was filed against accused Cesar Galvez, a PNP-member.

According to the prosecution, after Enojarda fell, the rest of the group took cover and
Rellios while in a crawling position, saw Galvez about 5 meters away holding an armalite rifle
and firing at their direction; Rellios also saw that Galvez had companions but did not recognize
them as well as the firearms they carried because they were approximately nine meters away;
Perez, also crawled and hid in the bushes about 5 meters away; when the firing stopped, one of
the attackers passed by about two meters from where Perez was hiding and because the moon
was bright, he recognized Galvez, his cousin, who was wearing a fatigue uniform and armed
with an armalite rifle; he also saw that Galvez had three armed companions but did not
recognize them nor the firearms they were carrying because they were about nine meters from
Galvez. Aside from alibi and denial as defenses, Galvez presented witnesses. One of the
witnesses that he presented was Athena Elisa Anderson, Document Examiner and Forensic
Analyst of the PNP Crime Laboratory of Region 9, Zamboanga City, who testified that the
paraffin test conducted on both his hands showed that there was no nitrate present; and Police
Inspector Lemuel Caser, Ballistic Examiner, who testified that the shells found at the scene of
the crime were not fired from the firearm issued to Galvez.

The RTC convicted Galvez, relying on the credible testimonies of the deceased’
companions Rellios and Perez. While Conspiracy was not alleged in the Information, the trial
court nevertheless convicted Galvez of Murder. The CA affirmed the same. It gave weight to the
testimonies of the prosecution witnesses Rellios and Perez that they saw Galvez fire an armalite
rifle in their direction on the night in question. The positive identification of these witnesses, the
CA ruled, has more weight than the negative results of the paraffin and ballistic tests.

Issue: Whether Galvez is guilty beyond reasonable doubt of the crime of Murder.

Held: NO. Galvez argued that in this case, the RTC found undisputed the fact that he did not
shoot the victim on and the firearm that was used in killing the victim was owned and possessed
by another man, as shown by the negative results of the paraffin and ballistic tests. The OSG
contended that the paraffin test and the ballistic examination are not conclusive proof that
Galvez did not fire a gun during the incident; in this case, the paraffin test was conducted on
Galvez two days from the date of the incident. 

According to the Supreme Court, firstly, the prosecution witnesses never actually saw
Galvez shoot the victim. The fact that Galvez was seen minutes after Enojarda was shot does
not sufficiently establish that Galvez was the one who shot Enojarda. There is no evidence that
Galvez was seen or was together with the three other armed men when Enojarda was hit. There
is a missing link that precludes the Court from concluding that it was Galvez who shot Enojarda.
It cannot be said therefore that there was positive identification of Galvez through circumstantial
evidence. There could not be any doubt that the facts, as established by the circumstantial
evidence, failed to exclude the possibility that another person shot Enojarda. There were three
other armed men, any one of whom could be the culprit.
 Secondly, it is true that a negative finding in a paraffin test is not a conclusive proof that
one has not fired a gun, as held by this Court in People v. Pagal and People v. Teehankee
which were cited by the CA in its Decision, since it is possible for a person to fire a gun and yet
bear no traces of nitrate or gunpowder as when the hands are bathed in perspiration or washed
afterwards. Such principle, however, has no bearing in the present case. In the Pagal and
Teehankee cases, the Court concluded that a negative finding does not prove that the accused
therein had not fired a gun because the accused were positively identified by witnesses as
having shot their victims, unlike in the case at hand where Galvez is not positively identified by
direct or circumstantial evidence that he shot Enojarda. If the principle should be given any
weight at all, it should be in favor of Galvez, that is, considering that he is not positively
identified, then, the negative results of the paraffin test bolster his claim that he did not shoot
Enojarda, and not the other way around.

The argument that the negative result of the ballistic examination does not prove that
Galvez did not fire a gun during the incident as it was possible that he used another gun, should
also be struck down. It is the prosecution which has the burden of showing that Galvez used a
firearm other than the one issued to him and that such firearm, which Galvez used, was the one
that killed the victim. It is not for Galvez to prove the opposite of the possibility adverted to by
the prosecution as it is the prosecution which must prove his guilt beyond reasonable doubt and
not for him to prove his innocence. Thus, while it is true that the negative results of the paraffin
and ballistic tests do not conclusively prove that Galvez did not shoot the victim, the same
negative results cannot be used as circumstantial evidence against Galvez to prove that he shot
Enojarda. To do otherwise would violate the basic precepts of criminal law which presumes the
innocence of the accused. Every circumstance favoring an accused’s innocence must be duly
taken into account, the proof against him must survive the test of reason, and the strongest
suspicion must not be permitted to sway judgment.

That Galvez was a police officer who could have justified his presence at the scene of
the crime with a lawful purpose, yet he put up an alibi which is inherently weak; and that Galvez
did not present his wife and father-in-law as witnesses to corroborate his story that he was at
their house on the night in question, pertain to the weakness of Galvez’s alibi which may cast
doubt on his innocence. However, these circumstances do not prove beyond reasonable doubt
Galvez’s guilt. Although an accused must satisfactorily prove his alibi, the burden in criminal
cases still rests on the prosecution to prove the accused’s guilt. The prosecution evidence must
stand or fall on its own weight and cannot draw strength from the weakness of the defense.
Unless the prosecution overturns the constitutional presumption of innocence of an accused by
competent and credible evidence proving his guilt beyond reasonable doubt, the presumption
remains. Courts must judge the guilt or innocence of the accused based on facts and not on
mere conjectures, presumptions, or suspicions.

As the prosecution in this case failed to discharge its burden of proving Galvez’s guilt
beyond reasonable doubt, the Court has no choice but to acquit him.
OBJECT EVIDENCE IN RELATION TO THE RULE ON CHAIN OF CUSTODY UNDER
REPUBLIC ACT NO. 9165

1. People of the Philippines vs. Macatingag, 19 January 2009

Facts:
Saidamen Macatingag was found guilty of Sec. 5, Art. II of RA 9165 or the
Comprehensive Drugs Act of 2002. According to the prosecution, a buy-bust was conducted in
order to entrap the Macatingag. PO3 Garcia posed as a poseur-buyer who will signal the others
by removing his cap. Upon the exchange of sachet of shabu and the marked money,
Macatingag was arrested and was brought to the police station where the sachet was marked
with “A” and “MAG” representing his initials, and the date and time of arrest. After making an
inventory on the seized suspected shabu, the police authorities requested for the laboratory
examination thereof with the PNP Crime Laboratory. The seized sachet was confirmed as 25.23
grams of methamphetamine hydrochloride. 
Macatingag pleaded not guilty. He maintained that he was at home with his wife when
four armed men suddenly entered their house, seized his money, placed handcuffs on his
wrists, and forcibly brought him to the police headquarters in Bgy. Canlubang. He averred that
he was not allowed to talk with anybody when he was incarcerated for two days and that he was
alone during the preliminary investigation.
Both the lower courts found Macatingag guilty relying on the testimonies of the police
officers basing on presumption of regularity in the performance of their duties. However,
Macatingag was assailing the proprietary of the chain of custody of the shabu allegedly seized
from him due to non-observance of Sec. 21, Art. II of RA9165.

Issue: 
Whether or not the police officers followed the guidelines under the said provision.

Ruling:
Yes. Testimonies of prosecution witnesses convincingly state that the integrity and the
evidentiary value of the seized item was properly preserved by the apprehending officers. P03
Garcia testified that he marked the sachet of shabu with his initials, and the date and time of
appellant’s arrest. PO3 Leona confirmed that he had seen PO3 Garcia mark the same sachet of
shabu sold by appellant; that a letter of request for the examination of said sachet was made;
and such request was received by the regional crime laboratory office.
The seized sachet of shabu was immediately marked for proper identification and,
thereafter, forwarded to the Crime Laboratory for examination. The Chemistry Report of the
Regional Crime Laboratory Office stated that the specimen submitted by the apprehending
officers indeed bore the marking “Exh A MAG 171200-01-14” and that the same gave positive
result to the tests for the presence of Methamphetamine Hydrochloride. Forensic Chemical
Officer Tria confirmed on the witness stand that she examined the specimen submitted by the
PDEA and that she was the one who prepared the Chemistry Report No. D-54-04.

2. People of the Philippines vs. Almorfe, G.R. No. 181831, 29 March 2010

FACTS:
An informant personally reported to the Pasig Police Station about the rampant selling of
"shabu" in Brgy. Bambang, Pasig by a certain "Taga," prompting a team belonging to the
Mayor’s Special Action Team of Pasig City to conduct a buy-bust operation at the target area.
Together with the informant, the team members, in coordination with the PDEA, repaired to and
arrived at the target area. On reaching the target address, the informant nodded at one of two
men standing in front thereof who turned out to be Rodnie a.k.a. "Taga". Rodnie at once asked
the informant what their purpose was, to which the informant replied "Iiskor kami." Rodnie then
asked "Magkano?," and the informant answered "Dos, pare" which means ₱200 in the drug
trade. Janet, who was designated as poseur-buyer, gave the pre-marked ₱200 to Rodnie who
placed them inside his pocket. Rodnie thereupon took out a "black plastic container" from his
pant’s back pocket from which container he drew two plastic sachets which he, however,
returned to the container.

Rodnie thereafter parted with some of the money bills to his companion who turned out to be his
co-appellant Ryan, whom he asked "Akina yung binigay ko sa yo kanina." Ryan at once gave
Rodnie a sachet of shabu which Rodnie in turn gave to Janet. At that instant, Janet executed
the pre-arranged signal to the other members of the team who swooped down on appellants
and arrested them. Janet then and there seized the money and the two plastic sachets inside
the black plastic container in Rodnie’s possession, and affixed her signature thereon, as well as
on the plastic sachet subject of the sale. The contents of the three sachets were found positive
for methylamphetamine hydrochloride by the Eastern Police District Crime Laboratory Office,
hence, the indictment of appellants.

RTC convicted both appellants. The decision was affirmed by the CA. It discredited appellants’
claim of frame-up in the absence of proof of ill-motive on the part of the arresting officers to
falsely accuse them, aside from the fact that the officers are presumed to have regularly
performed their official duty

ISSUE: WON appellate court erred in convicting the appelants despite the failure of the
prosecution "to prove that the shabu submitted for laboratory examination is the same one
allegedly taken from them.

HELD:

Section 21 of R.A. No. 9165 charts the procedure on the custody and disposition of confiscated,
seized, and/or surrendered dangerous drugs, given the severity of the penalties imposed for
violations of said law, viz:

Custody and Disposition of Confiscated, Seized, and/or Surrendered Dangerous Drugs,

Controlled Precursors and Essential Chemicals, Instruments/Paraphernalia and/or
Laboratory Equipment. - The PDEA shall take charge and have custody of all dangerous
drugs, plant sources of dangerous drugs, controlled precursors and essential chemicals,
as well as instruments, paraphernalia and/or laboratory equipment so confiscated,
seized and or surrendered, for proper disposition in the following manner:

(1)    The apprehending team having initial custody and control of the drugs shall,
immediately after seizure and confiscation, physically inventory and photograph the
same in the presence of the accused or the person/s from whom such items were
confiscated and/or seized, or his/her representative or counsel, a representative from
the media and the Department of Justice (DOJ), and any elected public official who
shall be required to sign the copies of the inventory and be given a copy thereof;
Oddly, from the testimony of alleged poseur buyer Janet, she clarified that they filed a case
against appellants only for violation of Section 5 of R.A. No. 9165. Appellant Rodnie was,
however, additionally indicted for violation of Section 11.

Respecting the team’s non-compliance with the inventory, not to mention the photograph,
requirement of R.A. No. 9165, the same does not necessarily render void and invalid the
seizure of the dangerous drugs. There must, however, be justifiable grounds to warrant
exception therefrom, and provided that the integrity and evidentiary value of the seized items
are properly preserved by the apprehending officer/s.

For the saving clause to apply, it is important that the prosecution should explain the reasons
behind the procedural lapses and that the integrity and value of the seized evidence had been
preserved:

x x x [N]on-compliance with the strict directive of Section 21 of R.A. No. 9165 is not
necessarily fatal to the prosecution’s case; police procedures in the handling of
confiscated evidence may still have lapses, as in the present case. These lapses,
however, must be recognized and explained in terms of their justifiable grounds and the
integrity and evidentiary value of the evidence seized must be shown to have been
preserved.

The presentation of the drugs which constitute the corpus delicti of the offenses, calls for the
necessity of proving beyond doubt that they are the same seized objects. This function is
performed by the "chain of custody" requirement as defined in Section 1(b) of Dangerous Drugs
Board Regulation No. 1, Series of 2002, which requirement is necessary to erase all doubts as
to the identity of the seized drugs by establishing its movement from the accused, to the police,
to the forensic chemist, and finally to the court.

In the present case, even if the requirement to conduct an inventory were to be excused, given
that there were only three sachets confiscated, the prosecution just the same failed to discharge
its burden. Although Janet identified Exhibits "C-1," "C-2" and "C-3" as the drugs seized from
appellants which she claimed to have marked immediately after the bust, she did not disclose
the name of the investigator to whom she turned them over. And there is no showing if that
same investigator was the one who turned the drugs over to the forensic chemist, or if the
forensic chemist whose name appears in the physical science report20 was the one who
received them from that investigator, or where the drugs were kept for safekeeping after the
chemical test was conducted up to the time they were presented in court.

3. People of the Philippines vs. Gonzales, G.R. No. 182417, 03 April 2013

Facts: On June 12, 2003, an informant reported to the Provincial Drug Enforcement Group
(PDEG) that Gonzales was engaging in illegal drug pushing. The following day, Inspector
Morales planned a buy-bust operation against Gonzales with PO1 Dimla as the poseur-buyer
and PO2 Chan as the back-up/arresting officer. PO1 Dimla marked two (2) ₱100 bills with “ED”
(his initials) to be used as the buy-bust money and then recorded the same in the police blotter.
At noon, PO1 Dimla and PO2 Chan met with the informant and subsequently went to Gonzales’
house. PO2 Chan positioned himself beyond the suspect’s possible view. 

PO1 Dimla and the informant approached Gonzales and the latter introduced the former
as the buyer of shabu worth ₱200. Gonzales handed PO1 Dimla a plastic sachet containing
white substances and in turn, PO1 Dimla handed the 2 marked ₱100 bills to Gonzales. At that
point, PO1 Dimla removed his cap, a prearranged signal to PO2 Chan to rush and arrest
Gonzales. PO1 Dimla then immediately marked the plastic sachet with his initials “ED”. The
crime lab certified that the contents of the plastic sachet were 0.194g of shabu.

TC: Convicted Gonzales

CA: Affirmed
 
Issue: WON Gonzales’ guilt wa proven beyond reasonable doubt for violation of Sec. 5, Art II of
RA No. 9165

Ruling: No. To secure a conviction of the accused charged with the illegal sale of Dangerous
Drugs as defined and punished under Sec. 5, Art. II of RA 9165, the State must establish the
concurrence of the following elements:

1. That the transaction or sale took place between the accused and the poseur-buyer; and
2. That the dangerous drugs subject of the transaction or sale is presented in court as
evidence of corpus delicti. 

The identity of the dangerous drugs is essential in proving the corpus delicti. 

Sec. 21, RA 9165 and Sec. 21 (a), RA 9165 provides:

The apprehending office/team having initial custody and control of the drugs
shall, immediately after seizure and confiscation, physically inventory and photograph
the same in the presence of the accused or the person/s from whom such items were
seized, or his/her representative from the media and the DOJ and any elected public
official who shall be required to sign the copies of the inventory and be given a copy
thereof: Provided, that the physical inventory and photograph shall be conducted at the place
where the search warrant is served; or at the nearest police station or at the nearest office of the
apprehending officer/team, whichever is practicable, in case of warrantless seizures; Provided
further that non-compliance with these requirements under justifiable grounds as long as
the integrity and the evidentiary value of the seized items are properly preserved by the
apprehending officer/team, shall not render void and invalid such seizure of and custody
over said items. 

The marking (first stage in the chain of custody) immediately upon confiscation or
recovery of the dangerous drugs or related items is indispensable in the preservation of their
integrity and evidentiary rule. 

In this case, PO1 Dimla did not explain whether his marking had been done in the
presence of Gonzales or done immediately upon arrest. Nor did he show who had taken
custody of the sachet of shabu after he had done his marking and who had subsequently
brought the sachet of shabu to the police station and still later on to the lab. 

Given the possibility of just anyone bringing any quantity of shabu to the lab for
examination, there is now no assurance that the quantity presented here was the same article
that had been the subject of the sale by Gonzales. Further, it is nowhere recalled in Court that
PO1 Dimla and PO2 Chua conducted the physical inventory and photographing of the shabu
subject of the sale by Gonzales. 
 The omission of the inventory and photographing exposed another weakness of
the evidence of guilt considering that those have to be made in the presence of the accused or
his representative, or within the presence of any representative from media, DOJ or any elected
official who must sign the inventory were really significant stages of the procedures outlined by
the law and its IRR. 

Non-compliance with the procedures has to be justified to be excusable. In this

connection, the unexplained non-compliance with the procedures for preserving the chain of
custody of the dangerous drugs failed to prove Gonzales’ guilty beyond reasonable doubt. 

ACQUITTED. 

 
4. People of the Philippines vs. Romy Lim, G.R. No. 231989, 04 September 2018
Facts:
Accused-appellant Romy Lim was charged with illegal possession of methamphetamine
hydochloride. According to the prosecution, a buy-bust operation was conducted, wherein
together with Lim’s stepson, Eldie Gorres, an investigation officer posed as a buyer. Lim nodded
and told Gorres to get one inside the bedroom. Gorres stood up and did as instructed. He
handed a heat-sealed transparent plastic shabu and gave it to the IO. In turn, IO paid him with
buy-bust money. After the pre-arranged signal which is a missed call was executed, other team
members rushed to Lim’s house. They were ordered to put their hands on their heads and to
squat on the floor. Miranda rights were recited to them and a body search was done. No deadly
weapon was found but a regular plastic box was bulging in Lim’s pocket. Another IO took
custody of the buy-bust money, the plastic box with a plastic sachet of white substance and a
disposable lighter. The plastic sachets were marked. Despite exerting efforts to secure the
attendance of the representative from the media and barangay officials, nobody arrived
to witness the inventory-taking. 
According to the defense, Lim was sleeping in the bedroom, while Gorres was watching
the television. When the latter heard that somebody jumped over their gate, he stood up to
verify. Before he could reach the door, however, it was already forced opened by the repeated
pulling and kicking of men in civilian clothing. They entered the house, pointed their firearms at
him, instructed him to keep still, boxed his chest, slapped his ears, and handcuffed him. They
inquired on where the shabu was, but he invoked his innocence. When they asked the
whereabouts of "Romy," he answered that he was sleeping inside the bedroom. So the men
went there and kicked the door open. Lim was then surprised as a gun was pointed at his head.
He questioned them on what was it all about, but he was told to keep quiet. During the inquest
proceedings, Lim admitted, albeit without the assistance of a counsel, ownership of the two
sachets of shabu because he was afraid that the police would imprison him. Like Gorres, he
was not involved in drugs at the time of his arrest. 

Issue:
Whether or not Lim should be convicted.
Ruling:
No. The judgment of conviction is reversed and set aside, and Lim should be acquitted
based on reasonable doubt.
At the time of the commission of the crimes, the law applicable is R.A. No. 9165. Section 1(b) of
Dangerous Drugs Board Regulation No. 1, Series of 2002, which implements the law, defines
chain of custody as the duly recorded authorized movements and custody of seized drugs or
controlled chemicals or plant sources of dangerous drugs or laboratory equipment of each
stage, from the time of seizure/confiscation to receipt in the forensic laboratory to safekeeping to
presentation in court for destruction. Such record of  movements and custody of seized item
shall include the identity and signature of the person who held temporary custody of the seized
item, the date and time when such transfer of custody were made in the course of safekeeping
and use in court as evidence, and the final disposition.
The chain of custody rule is but a variation of the principle that real evidence must be
authenticated prior to its admission into evidence. To establish a chain of custody sufficient to
make evidence admissible, the proponent needs only to prove a rational basis from which to
conclude that the evidence is what the party claims it to be.  In other words, in a criminal case,
the prosecution must offer sufficient evidence from which the trier of fact could reasonably
believe that an item still is what the government claims it to be. Specifically in the prosecution of
illegal drugs, the well-established federal evidentiary rule in the United States is that when the
evidence is not readily identifiable and is susceptible to alteration by tampering or
contamination, courts require a more stringent foundation entailing a chain of custody of the
item with sufficient completeness to render it improbable that the original item has either been
exchanged with another or been contaminated or tampered with.
The links in the chain of custody that must be established are: (1) the seizure and
marking, if practicable, of the illegal drug recovered from the accused by the apprehending
officer; (2) the turnover of the seized illegal drug by the apprehending officer to the investigating
officer; (3) the turnover of the illegal drug by the investigating officer to the forensic chemist for
laboratory examination; and (4) the turnover and submission of the illegal drug from the forensic
chemist to the court.
We have held that the immediate physical inventory and photograph of the confiscated
items at the place of arrest may be excused in instances when the safety and security of the
apprehending officers and the witnesses required by law or of the items seized are threatened
by immediate or extreme danger such as retaliatory action of those who have the resources and
capability to mount a counter-assault. The present case is not one of those.
26

Here, IO1 Orellan took into custody the P500.00 bill, the plastic box with the plastic
sachet of white substance, and a disposable lighter. IO1 Carin also turned over to him the
plastic sachet that she bought from Lim. While in the house, IO1 Orellan marked the two plastic
sachets. IO1 Orellan testified that he immediately conducted the marking and physical inventory
of the two sachets of shabu. To ensure that they were not interchanged, he separately marked
27

the item sold by Lim to IO1 Carin and the one that he recovered from his possession upon body
search as BB AEO 10-19-10 and AEO-RI 10-19-10, respectively, with both bearing his
initial/signature.
28

Evident, however, is the absence of an elected public official and representatives of the
DOJ and the media to witness the physical inventory and photograph of the seized items. In 29

fact, their signatures do not appear in the Inventory Receipt.

It must be alleged and proved that the presence of the three witnesses to the physical
inventory and photograph of the illegal drug seized was not obtained due to reason/s such as:
(1) their attendance was impossible because the place of arrest was a remote area;
(2) their safety during the inventory and photograph of the seized drugs was
threatened by an immediate retaliatory action of the accused or any person/s acting
for and in his/her behalf; (3) the elected official themselves were involved in the
punishable acts sought to be apprehended; (4) earnest efforts to secure the
 presence of a DOJ or media representative and an elected public official within the
period required under Article 125 of the Revised Penal Code prove futile through no
fault of the arresting officers, who face the threat of being charged with arbitrary
detention; or (5) time constraints and urgency of the anti-drug operations, which
often rely on tips of confidential assets, prevented the law enforcers from obtaining
the presence of the required witnesses even before the offenders could escape.
Earnest effort to secure the attendance of the necessary witnesses must be proven.
In this case, IO1 Orellan testified that no members of the media and barangay officials
arrived at the crime scene because it was late at night and it was raining, making it unsafe for
them to wait at Lim's house. IO2 Orcales similarly declared that the inventory was made in the
PDEA office considering that it was late in the evening and there were no available media
representative and barangay officials despite their effort to contact them. He admitted that there
are times when they do not inform the barangay officials prior to their operation as they. might
leak the confidential information. We are of the view that these justifications are unacceptable
as there was no genuine and sufficient attempt to comply with the law.

DOCUMENTARY EVIDENCE
1. Philippine Hawk Corporation vs. Tan Lee, G. R. No. 166869, 16 February 2010

FACTS:

 The bus owned by the Philippine Hawk Company collided with the motorcycle of
spouses Vivian Tan Lee and SIlverio Tan. The accident causes the death of respondent’s
husband and claims for actual damages.

Respondent’s husband was leasing and operating a gasoline station and earned an
annual income of one million pesos and they also had a copra business which gave them
an income of P3,000 a month. In order to prove for loss of earning capacity for the
operation of gasoline station, respondent presented in evidence a Certificate of
Creditable Income Tax Withheld at Source. On the other hand, she presented her
testimony as evidence for his husband’s earnings for copra business.

ISSUE:

Is the evidence presented sufficient to compute the actual damages as indemnity?

HELD:

 
No. The indemnity for loss of earning capacity of the deceased is provided for by Article
2206 of the Civil Code. As a rule, documentary evidence should be presented to
substantiate the claim for damages for loss of earning capacity. It is reasonable to use
the Certificate and respondent’s testimony as bases for fixing the gross annual income
of the deceased at one million pesos before respondent’s husband died on March 17,
1999. However, no documentary evidence was presented regarding the income derived
from their copra business; hence, the testimony of respondent as regards such income
cannot be considered. In the absence of documentary evidence, it is reasonable to peg
necessary expenses for the lease and operation of the gasoline station at 80 percent of
the gross income, and peg living expenses at 50 percent of the net income (gross income
less necessary expenses).

2. People of the Philippines vs. Roberto Lopez, G.R. No. 188902, 16 February 2011

Facts:
Roberto Lopez Y Cabal was charged before the Regional Trial Court for the crime of
Murder for the killing of one Prudencio Melendres. Aside from the criminal aspect of the case,
the civil liability of Lopez was also determined. In that same case, the wife of the victim, Ma.
Liberty Francisco Melendres testified as to the civil liability of Lopez by presenting receipts to
show that she spent P33,000 for the burial and the interment and P7,500 for the wake. She also
presented a certification from Tanod Publishing, Inc which was Melendres' employer, as to his
monthly salary range honoraria and transportation allowance. 

The RTC found accused guilty ordered Lopez to pay the heirs of Melendres as follows:
P50,000 as death indemnity, P50,000 as moral damages, P40,000 as actual damages and
P7,570 per month for six months as lost income. The accused appealed to the Court of Appeals
and questioned the monetary awards. Court of Appeals denied Lopez's appeal and affirmed the
trial court's decision with the only modification of reducing the award of actual damages from
P40,000 to P33,000, the latter amount having been substantiated by receipts.

Issue:
Whether or not the monetary awards on the claim for loss of earning capacity is proper?

Held:
Yes.
The rule is that documentary evidence should be presented to substantiate a claim for
loss of earning capacity. In this case, Liberty presented a certification from Tanod Publishing
which showed that Melendres was a photo correspondent for Tanod Newspaper and that his
monthly salary ranges from P1,780 to P3,570 on per story basis. Liberty presented another
certification from Tanod Publishing which showed that Melendres received the total amount of
P24,990 representing payment of honoraria and transportation allowance from January 1 to July
31, 2006. 

The Court notes that the defense did not object when the prosecution presented these
documents before the trial court. The rule is that evidence not objected to is deemed admitted
and may be validly considered by the court in arriving at its judgment. It was also established
that at the time of his death, Melendres was 41 years old. Thus, Melendres' net earning capacity
can be derived from two sources: (1) his monthly salary and (2) his honorarium and
transportation allowance. Net Earning of the deceased is Php 974,220. 

WHEREFORE, we AFFIRM with the MODIFICATION that accused-appellant Roberto Lopez y

Cabal is ordered to pay the heirs of Prudencio Melendres the amount of P974,220 for loss of
earning capacity.

3. Tan vs. OMC Carriers, Inc., G.R. No. 190521, 12 January 2011

Facts: On September 27, 1996, the petitioners filed a complaint for damages with the RTC
against OMC and Bonifacio Arambala. The complaint states that on November 24, 1995, at
around 6:15 a.m., Arambala was driving a truck with a trailer owned by OMC, along Meralco
Road, Sucat, Muntinlupa City. When Arambala noticed that the truck had suddenly lost its
brakes, he told his companion to jump out. Soon thereafter, he also jumped out and abandoned
the truck. Driverless, the truck rammed into the house and tailoring shop owned by petitioner
Leticia Tan and her husband Celedonio Tan, instantly killing Celedonio who was standing at the
doorway of the house at the time.

The petitioners alleged that the collision occurred due to OMC’s gross negligence in not
properly maintaining the truck, and to Arambala’s recklessness when he abandoned the moving
truck. Thus, they claimed that the respondents should be held jointly and severally liable for the
actual damages that they suffered, which include the damage to their properties, the funeral
expenses they incurred for Celedonio Tan’s burial, as well as the loss of his earning capacity.
The petitioners also asked for moral and exemplary damages, and attorney’s fees.

The RTC found OMC and Arambala jointly and severally liable to the petitioners for damages.

On appeal, the CA affirmed the RTC’s findings on the issues of the respondents’ negligence
and liability for damages. However, the CA modified the damages awarded to the petitioners by
reducing the actual damages award from P355,895.00 to P72,295.00. The CA observed that
only the latter amount was duly supported by official receipts.

The CA also deleted the RTC’s award for loss of earning capacity. The CA explained that the
petitioners failed to substantiate Celedonio Tan’s claimed earning capacity with reasonable
certainty; no documentary evidence was ever presented on this point. Instead, the RTC merely
relied on Leticia Tan’s testimony regarding Celedonio Tan’s income. The CA characterized this
testimony as self-serving.

The CA further reduced the exemplary damages from P500,000.00 to P200,000.00, and deleted
the award of attorney’s fees because the RTC merely included the award in the dispositive
portion of the decision without discussing its legal basis.

Issue: Whether or not CA erred when it modified RTC’s awarded damages

Ruling: There is partial merit.

Our basic law tells us that to recover damages there must be pleading and proof of actual
damages suffered.

Nonetheless, absent competent proof on the actual damages suffered, a party still has the
option of claiming temperate damages, which may be allowed in cases where, from the nature
of the case, definite proof of pecuniary loss cannot be adduced although the court is convinced
that the aggrieved party suffered some pecuniary loss.

Similarly, the CA was correct in disallowing the award of actual damages for loss of earning
capacity.

As a rule, documentary evidence should be presented to substantiate the claim for loss of
earning capacity. By way of exception, damages for loss of earning capacity may be awarded
despite the absence of documentary evidence when: (1) the deceased is self-employed and
earning less than the minimum wage under current labor laws, in which case, judicial notice
may be taken of the fact that in the deceased’s line of work, no documentary evidence is
available; or (2) the deceased is employed as a daily wage worker earning less than the
minimum wage under current labor laws

According to the petitioners, prior to his death, Celedonio was a self-employed tailor who earned
approximately P156,000.00 a year, or P13,000.00 a month. At the time of his death in 1995, the
prevailing daily minimum wage was P145.00, or P3,770.00 per month, provided the wage
earner had only one rest day per week. Even if we take judicial notice of the fact that a small
tailoring shop normally does not issue receipts to its customers, and would probably not have
any documentary evidence of the income it earns, Celedonio’s alleged monthly income of
P13,000.00 greatly exceeded the prevailing monthly minimum wage; thus, the exception set
forth above does not apply. In the past, we awarded temperate damages in lieu of actual
damages for loss of earning capacity where earning capacity is plainly established but no
evidence was presented to support the allegation of the injured party’s actual income.

In the present case, the income-earning capacity of the deceased was never disputed.
Petitioners Mary Jane Tan, Mary Lyn Tan, Celedonio Tan, Jr., Mary Joy Tan and Mark Allan
Tan were all minors at the time the petition was filed on February 4, 2010,34 and they all relied
mainly on the income earned by their father from his tailoring activities for their sustenance and
support. Under these facts and taking into account the unrebutted annual earnings of the
deceased, we hold that the petitioners are entitled to temperate damages in the amount of
P300,000.00 [or roughly, the gross income for two (2) years] to compensate for damages for
loss of the earning capacity of the deceased.

Dispositive Portion:
(1) P50,000.00 as indemnity for the death of Celedonio Tan;
(2) P72,295.00 as actual damages for funeral Expenses;
(3) P200,000.00 as temperate damages for the damage done to petitioner Leticia’s house,
tailoring shop, household appliances and shop equipment;
(4) P300,000.00 as damages for the loss of Celedonio Tan’s earning capacity;
(5) P500,000.00 as moral damages;
(6) P200,000.00 as exemplary damages; and
(7) 10% of the total amount as attorney’s fees; and costs of suit.

4. Asian Terminals, Inc. vs. Malayan Insurance Co., Inc., G.R. No. 171406, 04 April
2011

FACTS: On November 14, 1995, Shandong Weifang Soda Ash Plant shipped on board
the vessel MV “Jinlian I” 60,000 plastic bags of soda ash dense (each bag weighing 50
kilograms) from China to Manila. The shipment, with an invoice value of
US$456,000.00, was insured with respondent Malayan Insurance Company, Inc. under
Marine Risk Note No. RN-0001-21430, and covered by a Bill of Lading issued by Tianjin
Navigation Company with Philippine Banking Corporation as the consignee and
Chemphil Albright and Wilson Corporation as the notify party.

On November 21, 1995, upon arrival of the vessel at Pier 9, South Harbor, Manila, the
stevedores of petitioner Asian Terminals, Inc., a duly registered domestic corporation
engaged in providing arrastre and stevedoring services, unloaded the 60,000 bags of
soda ash dense from the vessel and brought them to the open storage area of petitioner
for temporary storage and safekeeping, pending clearance from the Bureau of Customs
and delivery to the consignee. When the unloading of the bags was completed on
November 28, 1995, 2,702 bags were found to be in bad order condition.

On November 29, 1995, the stevedores of petitioner began loading the bags in the
trucks of MEC Customs Brokerage for transport and delivery to the consignee. On
December 28, 1995, after all the bags were unloaded in the warehouses of the
consignee, a total of 2,881 bags were in bad order condition due to spillage, caking, and
hardening of the contents.
On April 19, 1996, respondent, as insurer, paid the value of the lost/damaged cargoes
to the consignee in the amount of P643,600.25.

ISSUE: WON THE PRESENTATION OF THE INSURANCE CONTRACT IS

INDISPENSABLE.

HELD: YES. Non-presentation of the insurance contract or policy is not fatal in

the instant case

Petitioner claims that respondent’s non-presentation of the insurance contract or policy

between the respondent and the consignee is fatal to its cause of action.

We do not agree.

First of all, this was never raised as an issue before the RTC. In fact, it is not among the
issues agreed upon by the parties to be resolved during the pre-trial. As we have said,
“the determination of issues during the pre-trial conference bars the consideration of
other questions, whether during trial or on appeal.” Thus, “[t]he parties must disclose
during pre-trial all issues they intend to raise during the trial, except those involving
privileged or impeaching matters. . . . The basis of the rule is simple. Petitioners are
bound by the delimitation of the issues during the pre-trial because they themselves
agreed to the same.”

Neither was this issue raised on appeal. Basic is the rule that “issues or grounds not
raised below cannot be resolved on review by the Supreme Court, for to allow the
parties to raise new issues is antithetical to the sporting idea of fair play, justice and due
process.”

Non-presentation of the insurance contract or policy is not necessarily fatal. In Delsan

Transport Lines, Inc. v. Court of Appeals, we ruled that:

Anent the second issue, it is our view and so hold that the presentation in evidence of
the marine insurance policy is not indispensable in this case before the insurer may
recover from the common carrier the insured value of the lost cargo in the exercise of its
subrogatory right. The subrogation receipt, by itself, is sufficient to establish not only the
relationship of herein private respondent as insurer and Caltex, as the assured shipper
of the lost cargo of industrial fuel oil, but also the amount paid to settle the insurance
claim. The right of subrogation accrues simply upon payment by the insurance company
of the insurance claim. aSAHCE

The presentation of the insurance policy was necessary in the case of Home Insurance
Corporation v. CA (a case cited by petitioner) because the shipment therein (hydraulic
engines) passed through several stages with different parties involved in each stage.
First, from the shipper to the port of departure; second, from the port of departure to the
M/S Oriental Statesman; third, from the M/S Oriental Statesman to the M/S Pacific
Conveyor; fourth, from the M/S Pacific Conveyor to the port of arrival; fifth, from the port
of arrival to the arrastre operator; sixth, from the arrastre operator to the hauler,
Mabuhay Brokerage Co., Inc. (private respondent therein); and lastly, from the hauler to
the consignee. We emphasized in that case that in the absence of proof of stipulations
to the contrary, the hauler can be liable only for any damage that occurred from the time
it received the cargo until it finally delivered it to the consignee. Ordinarily, it cannot be
held responsible for the handling of the cargo before it actually received it. The
insurance contract, which was not presented in evidence in that case would have
indicated the scope of the insurer’s liability, if any, since no evidence was adduced
indicating at what stage in the handling process the damage to the cargo was
sustained.

In International Container Terminal Services, Inc. v. FGU Insurance Corporation, we

used the same line of reasoning in upholding the Decision of the CA finding the arrastre
contractor liable for the lost shipment despite the failure of the insurance company to
offer in evidence the insurance contract or policy. We explained:

Indeed, jurisprudence has it that the marine insurance policy needs to be presented in
evidence before the trial court or even belatedly before the appellate court. InMalayan
Insurance Co., Inc. v. Regis Brokerage Corp., the Court stated that the presentation of
the marine insurance policy was necessary, as the issues raised therein arose from the
very existence of an insurance contract between Malayan Insurance and its consignee,
ABB Koppel, even prior to the loss of the shipment. In Wallem Philippines Shipping, Inc.
v. Prudential Guarantee and Assurance, Inc., the Court ruled that the insurance contract
must be presented in evidence in order to determine the extent of the coverage. This
was also the ruling of the Court in Home Insurance Corporation v. Court of Appeals.

However, as in every general rule, there are admitted exceptions. In Delsan Transport
Lines, Inc. v. Court of Appeals, the Court stated that the presentation of the insurance
policy was not fatal because the loss of the cargo undoubtedly occurred while on board
the petitioner’s vessel, unlike in Home Insurance in which the cargo passed through
several stages with different parties and it could not be determined when the damage to
the cargo occurred, such that the insurer should be liable for it.

As in Delsan, there is no doubt that the loss of the cargo in the present case occurred
while in petitioner’s custody. Moreover, there is no issue as regards the provisions of
Marine Open Policy No. MOP-12763, such that the presentation of the contract itself is
necessary for perusal, not to mention that its existence was already admitted by
petitioner in open court. And even though it was not offered in evidence, it still can be
considered by the court as long as they have been properly identified by testimony duly
recorded and they have themselves been incorporated in the records of the case.

BEST EVIDENCE RULE

1. The Consolidated Bank and Trust Corporation vs. Del Monte Motor Works, Inc.
465 SCRA 117

FACTS: On 13 June 1984, petitioner filed before the RTC of Manila a complaint for recovery of
sum of money against respondents, impleading the spouse of respondent Narciso O. Morales
(respondent Morales) in order to bind their conjugal partnership of gains. Petitioner, a domestic
banking and trust corporation, alleges therein that on 23 April 1982, it extended in favor of
respondents a loan in the amount of One Million Pesos (P1,000,000.00) as evidenced by a
promissory note executed by respondents on the same date. Under the promissory note,
respondents Del Monte Motor Works, Inc. (respondent corporation) and Morales bound
themselves jointly and severally to pay petitioner the full amount of the loan through twenty-five
monthly installments of P40,000.00 a month with interest pegged at 23% per annum. The note
was to be paid in full by 23 May 1984. As respondents defaulted on their monthly installments,
the full amount of the loan became due and demandable pursuant to the terms of the
promissory note. Petitioner likewise alleges that it made oral and written demands upon
respondents to settle their obligation but notwithstanding these demands, respondents still failed
to pay their indebtedness which, as of 09 March 1984, stood at P1,332,474.55. Petitioner
attached to its complaint as Annexes “A,” “B,” and “C,” respectively, a photocopy of the
promissory note supposedly executed by respondents, a copy of the demand letter it sent
respondents dated 20 January 1983, and statement of account pertaining to respondents’ loan.

ISSUE: won the best evidence rule applies in this case.

HELD: No. THE RULE ACCEPTS OF EXCEPTIONS ONE OF WHICH IS WHEN THE
ORIGINAL OF THE SUBJECT DOCUMENT IS IN THE POSSESSION OF THE ADVERSE
PARTY; EXEMPLIFIED IN CASE AT BAR. — Besides, the “best evidence rule” as stated in our
Revised Rules of Civil Procedure is not absolute. As quoted earlier, the rule accepts of
exceptions one of which is when the original of the subject document is in the possession of the
adverse party. As pointed out by petitioner in its motion to inhibit, had it been given the
opportunity by the court a quo, it would have sufficiently established that the original of Exhibit
“A” was in the possession of respondents which would have called into application one of the
exceptions to the “best evidence rule.” Significantly, and as discussed earlier, respondents
failed to deny specifically the execution of the promissory note. This being the case, there was
no need for petitioner to present the original of the promissory note in question. Their judicial
admission with respect to the genuineness and execution of the promissory note sufficiently
established their liability to petitioner regardless of the fact that petitioner failed to present the
original of said note.

EFFECT OF FAILURE TO DENY SPECIFICALLY AND UNDER OATH THE DUE EXECUTION
AND GENUINENESS OF THE DOCUMENT. — When the defendant fails to deny specifically
and under oath the due execution and genuineness of a document copied in a complaint, the
plaintiff need not prove that fact as it is considered admitted by the defendant. In the case of
Asia Banking Corporation v. Walter E. Olsen & Co., this Court held that — Another error
assigned by the appellant is the fact that the lower court took into consideration the documents
attached to the complaint as a part thereof, without having been expressly introduced in
evidence. This was no error. In the answer of the defendants there was no denial under oath of
the authenticity of these documents. Under Section 103 of the Code of Civil Procedure, the
authenticity and due execution of these documents must, in that case, be deemed admitted.
The effect of this is to relieve the plaintiff from the duty of expressly presenting such documents
as evidence. The court, for the proper decision of the case, may and should consider, without
the introduction of evidence, the facts admitted by the parties.

2. Commissioner of Internal Revenue vs. Hantex Trading Co, Inc., 454 SCRA 301

FACTS: Hantex Trading Co is a company organized under the Philippines, engaged in the sale
of plastic products, it imports synthetic resin and other chemicals for the manufacture of its
products. For this purpose, it is required to file an Import Entry and Internal Revenue
Declaration (Consumption Entry) with the Bureau of Customs the Tariff and Customs Code.

Sometime in October 1989, Lt. Vicente Amoto, Acting Chief of Counter-Intelligence Division of
the Economic Intelligence and Investigation Bureau (EIIB), received confidential information that
the Hantex Trading had imported synthetic resin amounting to P115,599,018.00 but only
declared P45,538,694.57. Thus, Hantex received a subpoena to present its books of account
which it failed to do. The Bureau cannot find any original copies of the Consumption Entry
of Hantex imported products since the originals were eaten by termites. Thus, the Bureau
relied on the following to establish justification on deficiency tax assessments:

1. Certified copies of the Hantex’s Profit and Loss Statement for 1987 and 1988 on
file with the SEC;

2. Machine copies of the Consumption Entries, Series of 1987, submitted by the

informer; and

3. Entries certified by Tomas and Danganan.

The case was submitted to the CTA which ruled that Hantex have tax deficiency and is ordered
to pay, per investigation of the Bureau.

The CA ruled that the income and sales tax deficiency assessments issued by the petitioner
were unlawful and baseless since the copies of the Import entries (Consumption Entries)
relied upon in computing the deficiency tax of the respondent were not duly
authenticated by the public officer charged with their custody, nor verified under oath by
the EIIB and the BIR investigators.

ISSUE: Whether or not the final assessment of the CIR against the Hantex for deficiency
income tax and sales tax for the latter’s 1987 importation of resins and calcium bicarbonate is
based on competent evidence (referring to the machine copies of consumption entries) and the
law.

RULING: NO. We agree to the contention of the CIR that the best evidence obtainable
may consist of hearsay evidence, such as the testimony of third parties or accounts or other
records of taxpayers similarly circumstances as the taxpayer subject of the investigation, hence,
inadmissible in a regular proceeding in the regular courts. Moreover, the general rule is
that administrative agencies such as the BIR are not bound by the technical rules of evidence. It
can accept documents which cannot be admitted in a judicial proceeding where the Rules of
Court are strictly observed. It can choose to give weight or discharge such evidence, depending
on its trustworthiness.

The “Best Evidence Obtainable” under Section 16 of the 1977 NIRC, as amended, does not
include mere photocopies of records/documents. The CIR, in making a preliminary and final
tax deficiency assessment against a taxpayer, cannot anchor the said assessment on mere
machine copies of records/documents. Mere photocopies of the Consumption Entries have
no probative value as basis for any deficiency income or business taxes against a
taxpayer.

3. Magdayao vs. People of the Philippines, 436 SCRA 677

4. Arceo vs. People of the Philippines, G.R. No. 142641, 17 July 2006
 Corona, J.

Facts: Arceo obtained loans from Cenizal of P100,000 and P50,000. He then gave
cenizal a postdated BPI check for the total. Cenizal did not deposit the check on its date
because of Arceo’s promise that it would be exchanged with cash. The promise was made
verbally 7 times. Cenizal grew impatient, encashed the check, and the same was returned for
insufficient funds. When Cenizal attempted to confront Arceo, the same left the house. A
complaint was filed before the City Prosecutor of Quezon for BP 22. After investigation, the case
was filed but the check and return slip were lost by Cenizal. TC convicted arceo. CA affirmed.
Arceo contends before the SC that the presentation of the check is sine qua non for a conviction
under BP 22.

Issue: WON it is necessary to present the check for petitioner to be convicted of BP 22.

Ruling: NO. Petitioner’s insistence on the presentation of the check in evidence as a

condition sine qua non for conviction under BP 22 is wrong. Petitioner anchors his argument on
Rule 130, Section 3, of the Rules of Court, otherwise known as the best evidence rule.
However, the rule applies only where the content of the document is the subject of the inquiry.
Where the issue is the execution or existence of the document or the circumstances
surrounding its execution, the best evidence rule does not apply and testimonial evidence is
admissible.

The gravamen of the offense is the act of drawing and issuing a worthless check.6
Hence, the subject of the inquiry is the fact of issuance or execution of the check, not its
content.

5. Atlas Consolidated Mining and Development  Corporation vs. CIR, G.R. Nos.
141104 and 148763, 08 June 2007

FACTS:

Petitioner Altas, a VAT-registered taxpayer engaged in mining, production and sale of various
mineral products, filed claims with the BIR for refund/credit of input VAT on its purchases of
capital goods and on its zero-rated sales in the taxable quarters of the years 1990 and 1992.
BIR did not immediately act on the matter prompting the petitioner to file a petition for review
before the CTA. The latter denied the claims on the grounds that for zero-rating to apply, 70% of
the company's sales must consist of exports, that the same were not filed within the 2-year
prescriptive period and that petitioner failed to submit substantial evidence to support its claim
for refund/credit. Atlas, on the other hand, contended that CTA failed to consider the sales to
PASAR and PHILPOS within the EPZA as zero-rated export sales, that the 2-year prescriptive
period should be counted from the date of filing of the last adjustment return which was April 15,
1993, and not on every end of the applicable quarters, and that the certification of the
independent CPA attesting to the correctness of the contents of the summary of suppliers'
invoices or receipts examined, evaluated and audited by said CPA should substantiate its
claims.

 
ISSUE: Whether or not Atlas Corp had sufficiently established the factual bases for its
application for refund/credit of input VAT

RULING: No.

             Although the Court agreed with the petitioner corporation that the two-year
prescriptive period for the filing of claims for refund/credit of input VAT must be counted from the
date of filing of the quarterly VAT return, and that sales to PASAR and PHILPOS inside the
EPZA are taxed as exports because these export processing zones are to be managed as a
separate customs territory from the rest of the Philippines, and thus, for tax purposes, are
effectively considered as foreign territory, it still denies the claims of petitioner corporation for
refund of its input VAT on its purchases of capital goods and effectively zero-rated sales during
the period claimed for not being established and substantiated by appropriate and sufficient
evidence. Tax refunds are in the nature of tax exemptions. It is regarded as in derogation of the
sovereign authority, and should be construed in strictissimi juris against the person or entity
claiming the exemption. The taxpayer who claims for exemption must justify his claim by the
clearest grant of organic or statute law and should not be permitted to stand on vague
implications.

6. Chua Gaw vs. Chua, G.R. No. 160855, 16 April 2008

Nachura, J.:
FACTS: Spouses Chua Chin and Chan Chi were the founders of three business enterprises
namely: Hagonoy Lumber, Capitol Sawmill Corporation, and Columbia Wood Industries. The
couple had seven children, namely, Santos Chua; Concepcion Chua; Suy Ben Chua; Chua Suy
Phen; Chua Sioc Huan; Chua Suy Lu; and Julita Chua. On June 19, 1986, Chua Chin died,
leaving his wife Chan Chi and his seven children as his only surviving heirs. At the time of Chua
Chin’s death, the net worth of Hagonoy Lumber was P415,487.20.
On December 8, 1986, his surviving heirs executed a Deed of Extra-Judicial Partition wherein
the heirs settled their interest in Hagonoy Lumber as follows: one-half (1/2) thereof will pertain to
the surviving spouse, Chan Chi, as her share in the conjugal partnership; and the other half will
be divided among Chan Chi and the 7 children in equa pro indiviso. In said document, Chan Chi
and the 6 children likewise agreed to voluntarily renounce and waive their shares over Hagonoy
Lumber in favor of their co-heir, Chua Sioc Huan.
In May 1988, petitioner Concepcion Chua Gaw and her husband, Antonio Gaw, asked
respondent, Suy Ben Chua, to lend them P200,000.00 which they will use for the construction of
their house in Marilao, Bulacan.
On August 1, 1990, their sister, Chua Sioc Huan, executed a Deed of Sale over all her rights
and interests in Hagonoy Lumber for a consideration of P255,000.00 in favor of respondent.
Meantime, the spouses Gaw failed to pay the amount they borrowed from respondent within the
designated period. Respondent sent the couple a demand letter requesting them to settle their
obligation with the warning that he will be constrained to take the appropriate legal action if they
fail to do so. 
Failing to heed his demand, respondent filed a Complaint for Sum of Money against the
spouses Gaw with the RTC. The complaint alleged that on June 7, 1988, he extended a loan to
the spouses Gaw for P200,000.00, payable within six months without interest, but despite
several demands, the couple failed to pay their obligation.
The RTC held that respondent is entitled to the payment of the amount of P200,000 with
interest. The trial court further held that the validity and due execution of the Deed of Partition
and the Deed of Sale, evidencing transfer of ownership of Hagonoy Lumber from Chua Sioc
Huan to respondent, was never impugned. Although respondent failed to produce the originals
of the documents, petitioner judicially admitted the due execution of the Deed of Partition, and
even acknowledged her signature thereon, thus constitutes an exception to the best evidence
rule. 
ISSUE: WHETHER OR NOT the trial court erred in admitting in evidence a mere copy of the
Deed of Partition and the Deed of Sale in violation of the best evidence rule
RULING: NO.
The best evidence rule applies only when the content of such document is the subject of the
inquiry. Where the issue is only as to whether such document was actually executed, or exists,
or on the circumstances relevant to or surrounding its execution, the best evidence rule does
not apply and testimonial evidence is admissible. Any other substitutionary evidence is likewise
admissible without need to account for the original. Moreover, production of the original may be
dispensed with, in the trial court’s discretion, whenever the opponent does not bona fide dispute
the contents of the document and no other useful purpose will be served by requiring
production. 
Accordingly, we find that the best evidence rule is not applicable to the instant case. Here, there
was no dispute as to the terms of either deed; hence, the RTC correctly admitted in evidence
mere copies of the two deeds. The petitioner never even denied their due execution and
admitted that she signed the Deed of Partition. As for the Deed of Sale, petitioner had, in effect,
admitted its genuineness and due execution when she failed to specifically deny it in the
manner required by the rules. The petitioner merely claimed that said documents do not express
the true agreement and intention of the parties since they were only provisional paper
arrangements made upon the advice of counsel. Apparently, the petitioner does not contest the
contents of these deeds but alleges that there was a contemporaneous agreement that the
transfer of Hagonoy Lumber to Chua Sioc Huan was only temporary. 

7. Edsa-Shangrila Hotel vs. BF Corporation, G.R. No. 145842, 27 June 2008

VELASCO, JR.

FACTS:

Edsa Shangila Hotels and Resorts Inc. (ESHRI) contracted with BF Corp. to build the Edsa
Shangri-La Hotel on May 1, 1991. Their construction contract was denominated as Agreement
for the Execution of Builder’s Work for the EDSA Shangrila Hotel Project. In the contract, the
manner of payment agreed upon was that BF shall submit a monthly progress billing to ESHRI
which would then re-measure the work accomplished and prepare a Progress Payment
Certificate for that month’s progress billing. Since the start of the construction up to June 30,
 1992, BF submitted a total of 19 monthly progress reports. As per records ESHRI paid a total of
85m plus for the progress billings of 1 to 13.For progress billings 14 to 19, BF claimed that no
re-measure was done by ESHRI and no payments were made.

BF filed a case with the RTC a complaint for collection of sum of money after several futile
attempts to collect from ESHRI. As part of BF’s claims, it submitted photocopies of Progress
Billings Nos. 14 to 19. ESHRI on the other hand alleged over payments for billings 1 to 13 and
also alleged that BF performed inferior work.

RTC: ruled in favor of BF.

ESHRI appealed to CA.

CA: affirmed the RTC in toto.

Petition to SC by ESHRI.

-        Edsa Shangri-la argued that BF Corp ought to have laid the basis for the presentation of the
photocopies as secondary evidence before the court admitted the evidence.

-        BF claims that it had complied with the laying-the basis requirement. BF explained that it
could not present the original of the documents since they were in the possession of ESHRI
which refused to hand them over to BF despite requests.

ISSUE:  Whether or not BF has complied with the laying the basis requirement for the
admission of the photocopies as secondary evidence

RULING: YES. The only actual rule that the term “best evidence” denotes is the rule requiring
that the original of a writing must, as a general proposition, be produced and secondary
[17]

evidence of its contents is not admissible except where the original cannot be had. Rule 130,
Section 3 of the Rules of Court enunciates the best evidence rule:
       SEC. 3. Original document must be produced; exceptions. – When
the subject of inquiry is the contents of a document, no evidence shall be
admissible other than the original document itself, except in the following cases:
(a) When the original has been lost or destroyed, or cannot be produced
in court, without bad faith on the part of the offeror;
(b)   When the original is in the custody or under the control of the
party against whom the evidence is offered, and the latter fails to
produce it after reasonable notice; (Emphasis added.)

Complementing the above provision is Sec. 6 of Rule 130, which reads:

          SEC. 6. When original document is in adverse party’s custody or control. – If the

document is in the custody or under control of the adverse party, he must have reasonable
notice to produce it. If after such notice and after satisfactory proof of its existence, he fails to
produce the document, secondary evidence may be presented as in the case of loss.

Secondary evidence of the contents of a written instrument or document refers to evidence

other than the original instrument or document itself. A party may present secondary evidence
of the contents of a writing not only when the original is lost or destroyed, but also when it is in
the custody or under the control of the adverse party. In either instance, however, certain
explanations must be given before a party can resort to secondary evidence.

Four factual premises are readily deducible from the above exchanges, to wit: (1) the existence
of the original documents which ESHRI had possession of; (2) a request was made on ESHRI
to produce the documents; (3) ESHRI was afforded sufficient time to produce them; and (4)
ESHRI was not inclined to produce them.    Clearly, the circumstances obtaining in this case fall
under the exception under Sec. 3(b) of Rule 130. 

8. Cynthia Roxas-Del Castillo vs. BF Corporation, G.R. No. 145873, 27 June 2008
FACTS:  Petitions stemmed from a construction contract denominated as Agreement for the
Execution of Builders Work for the EDSA Shangri-la Hotel Project that ESHRI and BF executed
for the construction of the EDSA Shangri-la Hotel starting May 1, 1991. Among other things, the
contract stipulated for the payment of the contract price on the basis of the work accomplished
as described in the monthly progress billings. Under this arrangement, BF shall submit a
monthly progress billing to ESHRI which would then re-measure the work accomplished and
prepare a Progress Payment Certificate for that month’s progress billing. After several futile
attempts to collect the unpaid billings, BF filed, on July 26, 1993, before the RTC a suit for a
sum of money and damages. The trial court rule in favor of BF, which was affirmed by the CA. 
On appeal, petitioners fault the CA, and necessarily the trial court, on the matter of the
admission in evidence of the photocopies of Progress Billing Nos. 14 to 19 for being contrary to
the best evidence rule.  
 
ISSUE:  Whether or not the photocopies are admissible in evidence. 
 
RULING:  The photocopies are admissible. BF complied with the laying-the-basis requirement.
The only actual rule that the term best evidence denotes is the rule requiring that the original of
a writing must, as a general proposition, be produced and secondary evidence of its contents is
not admissible except where the original cannot be had. Rule 130, Section 3 of the Rules of
Court enunciates the best evidence rule: “SEC. 3. Original document must be produced;
exceptions. When the subject of inquiry is the contents of a document, no evidence shall be
admissible other than the original document itself, except in the following cases: a. When the
original has been lost or destroyed, or cannot be produced in court, without bad faith on the part
of the offeror;  b. When the original is in the custody or under the control of the party against
whom the evidence is offered, and the latter fails to produce it after reasonable notice;”
Complementing the above provision is Sec. 6 of Rule 130, which reads: “SEC. 6. When original
document is in adverse party’s custody or control. If the document is in the custody or under
control of the adverse party, he must have reasonable notice to produce it. If 
after such notice and after satisfactory proof of its existence, he fails to produce the document,
secondary evidence may be presented as in the case of loss.” Secondary evidence of the
contents of a written instrument or document refers to evidence other than the original
instrument or document itself. A party may present secondary evidence of the contents of a
writing not only when the original is lost or destroyed, but also when it is in the custody or under
the control of the adverse party. In either instance, however, certain explanations must be given
before a party can resort to secondary evidence. In other words, the conditions sine qua non for
the presentation and reception of the photocopies of the original document as secondary
evidence have been met. 
These are: (1) there is proof of the original documents execution or existence; (2) there is proof
of the cause of the original documents unavailability; and (3) the offeror is in good faith
9. Baguio Trinity Developers, Inc. vs. Heirs of Jose Ramos, G.R. No.188381, 14
December 2011

FACTS:
A piece of land was titled to two owners. Petitioner, Baguio Trinity Developers, Inc. was one of
them. It filed a case at the MTC to annul a decision rendered by the RTC reconstituting the title
to the other owner. 
MTC dismissed the case on the ground that it cannot annul the decision of the RTC for the
reason that the latter is a higher court. 
Baguio Trinity filed a case in the RTC which rendered a decision dismissing the case because it
cannot annul an order of a co-equal court. Hence, the petitioner filed a case at the CA but the
latter dismissed it because the former did not attach to its petition an original copy of the
decision sought to be annulled and because of laches. 
ISSUE:
Whether or not the CA erred in dismissing petitioner Baguio Trinity's action for annulment of
judgment by reason of its failure to comply with the requirement of submission of certified true
copies of the assailed RTC orders

RULING:.
In denying the petition before it, one of the grounds the CA gave was that petitioner Baguio
Trinity failed to attach to its petition for annulment of judgment a "certified copy of the judgment
or final order," which requirement is mandatory.  Without it, the court "would have no bases to
form a decision." Besides, said the CA, petitioner could have obtained a certified copy of the
same from the Land Registration Authority (LRA) which is usually furnished a copy, just as
petitioner was able to secure a copy of the October 28, 1986 Order from the LRA.  The Register
of Deeds is also usually furnished a copy of such order.

The Court is aware of the necessity of mandating strict compliance with procedural rules. Here,
however, the 1990 earthquake resulted in the loss or destruction of the RTC records of the case. 
The administration of justice cannot stop to grind because of such loss and no one should suffer
or benefit from it.

And who can issue a certified copy of the lost orders?  The answer is that it can be issued by the
public officer in custody of the original of the document.   Here, it is the clerk of court of the RTC
[4]

that issued the challenged reconstitution orders.  But the clerk of court issued a certification,
conformably with Section 28 of Rule 132, that the relevant records are no longer available
having been lost to an earthquake.  That the record custodian could no longer issue a certified
copy should not of course prevent an aggrieved party from pursuing his petition. The rules allow
such party to submit appropriate secondary evidence.

Section 5, Rule 130 of the Rules of Evidence provides that when the original document has been
lost and its unavailability has been established, a party "may prove its contents by a copy or by a
recital of its contents in some authentic document or by the testimony of witnesses in the order
stated."  Copies of the challenged reconstitution orders from the LRA or the Register of Deeds
are of course available to petitioner Baguio Trinity. But it could just as validly submit faithful
copies of its challenged reconstitution orders, authenticated by a verified statement that these
are copies of the original orders.  The Baguio Trinity did. Consequently, the CA had no valid
reason denying its petition for failure to attach a copy of the assailed reconstitution orders.

Notably, the respondent Ramos and Nepa heirs have not questioned the authenticity of the
submitted copies.  At any rate, the Court notes that petitioner Baguio Trinity attached certified
machine copies of the assailed Orders supplied by the LRA as annexes to the present petition.
As for copies of documents and pleadings filed during the reconstitution proceedings, the notices
of hearing, and the titles issued to petitioner's predecessors-in-interest, which the CA wanted
petitioner Baguio Trinity to submit, these could very well be adduced during the hearing since
their relevance could hardly be discerned until the issues have been joined.

10. Republic of the Philippines vs. Marcos-Manotoc, et.al., G.R. No. 171701, 08
February 2012

SERENO, J.:

Facts: After the EDSA People Power Revolution in 1986, the first executive act of then
President Corazon Aquino was to create the Presidential Commission on Good Government
(PCGG).
Numerous civil and criminal cases were filed, one of these is Civil Case no. 0002 before
the Sandiganbayan to recover the Marcoses’ alleged ill-gotten wealth.
On July 16,1987 the PCGG acting on behalf of the Republic and assisted by the OSG
filed a complaint for Reversion, Reconveyance, Restitution, Accounting and Damages against
Ferdinand Marcos who was substituted by his estate; Imelda R. Marcos and the respondents
Imee Marcos-Manotoc, Irene Marcos-Araneta, Bongbong Marcos, Tomas Manotoc, and
Gregorio Araneta III.
The PCGG filed 4 amended complaints which sought to include all defendants in this
case. Under its complaint were 5 causes of action namely:
1. Breach of Public Trust
2. Abuse of Right and Power
3. Unjust Enrichment
4. Accounting 
5. Damages
Pantranco Employees Association, a union of employees of Pantranco then moved to
intervene. 
The petitioner then formally offered its evidence against the respondents. The latter
objected on the ground that the documents violated the best evidence rule of the Rules of
Court.
The Sandiganbayan admitted the pieces of evidence but expressed its reservation to
determine the evidentiary value of such pieces of evidence.
The respondents then filed their respective Demurrers to evidence. The Sandiganbayan
issued the assailed resolution which granted all the demurrers to evidence except the one filed
by Imelda Marcos. The Sandiganbayan ruled that the petitioner failed to establish the
involvement of the respondents to the alleged illegal activities complained of.  
As their motion for reconsideration was denied the Republic filed this petition before the
Supreme Court.

ISSUE: Whether or not the petitioner violated the Best Evidence Rule

RULING: YES
It is petitioner’s burden to prove the allegations in its Complaint. For relief to be granted, the
operative act on how and in what manner the Marcos siblings participated in and/or benefitted
from the acts of the Marcos couple must be clearly shown through a preponderance of
evidence. Should petitioner fail to discharge this burden, the Court is constrained and is left with
no choice but to uphold the Demurrer to Evidence filed by respondents.
Petitioner did not even attempt to provide a plausible reason why the originals were not
presented, or any compelling ground why the court should admit these documents as secondary
evidence absent the testimony of the witnesses who had executed them.

In particular, it may not insist that the photocopies of the documents fall under Sec. 7 of Rule
130, which states:

Evidence admissible when original document is a public record. ─ When the original of a
document is in the custody of a public officer or is recorded in a public office, its contents may
be proved be a certified copy issued by the public officer in custody thereof.

Secs. 19 and 20 of Rule 132 provide:

SECTION 19. Classes of documents. ─ For the purpose of their presentation in evidence,
documents are either public or private.

Public documents are:

(a) The written official acts, or records of the official acts of the sovereign authority, official
bodies and tribunals, and public officers, whether of the Philippines, or of a foreign country;

(b) Documents acknowledged before a notary public except last wills and testaments; and

(c) Public records, kept in the Philippines, of private documents required by law to be entered
therein.

Petitioner presented as witness its records officer, Maria Lourdes Magno, who testified that
these public and private documents had been gathered by and taken into the custody of the
PCGG in the course of the Commission’s investigation of the alleged ill-gotten wealth of the
Marcoses. However, given the purposes for which these documents were submitted, Magno
was not a credible witness who could testify as to their contents. To reiterate, "[i]f the writings
have subscribing witnesses to them, they must be proved by those witnesses." Witnesses can
testify only to those facts which are of their personal knowledge; that is, those derived from their
own perception. Thus, Magno could only testify as to how she obtained custody of these
documents, but not as to the contents of the documents themselves.

Neither did petitioner present as witnesses the affiants of these Affidavits or Memoranda
submitted to the court. Basic is the rule that, while affidavits may be considered as public
documents if they are acknowledged before a notary public, these Affidavits are still classified
as hearsay evidence. The reason for this rule is that they are not generally prepared by the
affiant, but by another one who uses his or her own language in writing the affiant's statements,
parts of which may thus be either omitted or misunderstood by the one writing them. Moreover,
the adverse party is deprived of the opportunity to cross-examine the affiants. For this reason,
affidavits are generally rejected for being hearsay, unless the affiants themselves are placed on
the witness stand to testify thereon.

As to the copy of the TSN of the proceedings before the PCGG, while it may be considered as a
public document since it was taken in the course of the PCGG’s exercise of its mandate, it was
not attested to by the legal custodian to be a correct copy of the original. This omission falls
short of the requirement of Rule 132, Secs. 24 and 25 of the Rules of Court.
11. Sy vs. Court of Appeals, 330 SCRA 550
Facts:
Petitioner Filipina Y. Sy and private respondent Fernando Sy contracted marriage on November
15, 1973 at the Church of Our Lady of Lourdes in Quezon City. Both were then 22 years old.
Their union was blessed with two children. They first established their residence in Singalong,
Manila, then in Apalit, Pampanga, and later at San Matias, Sto. Tomas, Pampanga. They
operated a lumber and hardware business in Sto. Tomas, Pampanga. On September 15, 1983,
Fernando left their conjugal dwelling. Since then, the spouses lived separately, and their two
children were in the custody of their mother. However, their son Frederick transferred to his
father’s residence at Masangkay, Tondo, Manila on May 15, 1988, and from then on, lived with
his father.On February 11, 1987, Filipina filed a petition for legal separation before the RTC of
San Fernando, Pampanga. Later, upon motion of petitioner, the action was later amended to a
petition for separation of property . Judgment was rendered dissolving their conjugal partnership
of gains and approving a regime of separation of properties based on the Memorandum of
Agreement executed by the spouses. The trial court also granted the custody of the children to
Filipina.

In May 1988, Filipina filed a criminal action for attempted parricide against her husband before
the RTC of Manila, which however, convicted Fernando only of the lesser crime of slight
physical injuries, and sentenced him to 20 days imprisonment. 

Petitioner later filed a new action for legal separation against private respondent, on the
following grounds: (1) repeated physical violence; (2) sexual infidelity; (3) attempt by respondent
against her life; and (4) abandonment of her by her husband without justifiable cause for more
than one year. The RTC of San Fernando, Pampanga granted the petition on the grounds of
repeated physical violence and sexual infidelity, and issued a decree of legal separation. It
awarded custody of their daughter Farrah Sheryll to petitioner, and their son Frederick to
respondent. 

On August 4, 1992, Filipina filed a petition for the declaration of absolute nullity of her marriage
to Fernando on the ground of psychological incapacity. The RTC of San Fernando, Pampanga,
denied the petition. It stated that the alleged acts of the respondent, as cited by petitioner, do
not constitute psychological incapacity which may warrant the declaration of absolute nullity of
their marriage. 

Petitioner appealed to the CA which affirmed the decision of the trial court. 

Hence this appeal where petitioner, for the first time, raises the issue of the marriage being void
for lack of a valid marriage license at the time of its celebration. It appears that, according to
her, the date of the actual celebration of their marriage and the date of issuance of their
marriage certificate and marriage license are different and incongruous. Petitioner states that
though she did not categorically state in her petition for annulment of marriage before the trial
court that the incongruity in the dates of the marriage license and the celebration of the
marriage itself would lead to the conclusion that her marriage to Fernando was void from the
beginning, she points out that these critical dates were contained in the documents she
submitted before the court. 

Issue:
Whether or not the marriage between petitioner and private respondent is void from the
beginning for lack of a marriage license at the time of the ceremony 

Ruling:
November 15, 1973, also appears as the date of marriage of the parents in both their son’s and
daughter’s birth certificates which are also attached as Annexes “B” and “C” in the petition for
declaration of absolute nullity of marriage before the trial court, and thereafter marked as
Exhibits “B” and “C” in the course of the trial. These pieces of evidence on record plainly and
indubitably show that on the day of the marriage ceremony, there was no marriage license. A
marriage license is a formal requirement; its absence renders the marriage void ab initio. In
addition, the marriage contract shows that the marriage license, numbered 6237519, was
issued in Carmona, Cavite, yet, neither petitioner nor private respondent ever resided in
Carmona. From the documents she presented, the marriage license was issued on September
17, 1974, almost one year after the ceremony took place on November 15, 1973. The
ineluctable conclusion is that the marriage was indeed contracted without a marriage license. 

Nowhere do we find private respondent denying these dates on record. Article 80 of the Civil
Code is clearly applicable in this case. There being no claim of an exceptional character, the
purported marriage between petitioner and private respondent could not be classified among
those enumerated in Articles 72-79 of the Civil Code. We thus conclude that under Article 80 of
the Civil Code, the marriage between petitioner and private respondent is void from the
beginning.

We note that their marriage certificate and marriage license are only photocopies. So are the
birth certificates of their son Frederick and daughter Farrah Sheryll. Nevertheless, these
documents were marked as Exhibits during the course of the trial below, which shows that these
have been examined and admitted by the trial court, with no objections having been made as to
their authenticity and due execution. Likewise, no objection was interposed to petitioner’s
testimony in open court when she affirmed that the date of the actual celebration of their
marriage was on November 15, 1973. We are of the view, therefore, that having been admitted
in evidence, with the adverse party failing to timely object thereto, these documents are deemed
sufficient proof of the facts contained therein. 

12. Citibank vs. Teodoro, 411 SCRA 577

13. Heirs of Teodoro Dela Cruz vs. Court of Appeals, 298 SCRA 172

Facts:
  Petitioners filed an action for reconveyance with damages against private respondents involving a
parcel of land situated in Poblacion, San Mateo, Isabela with a total area of 3,277 square meters. In their
complaint, petitioners assert that the subject land was bought by their predecessor-in-interest from the
private respondents, Madrid brothers, for P4,000.00 in a deed of sale executed on May 18, 1959, and
since then they have been in actual, physical, continuous and open possession of the property. However,
sometime in October 1986, much to their dismay and surprise, private respondents managed to obtain a
Torrens Title over the said land.

On the other hand, the Madrids denied having executed the said deed of sale and assuming that
said document exists, the same is fictitious and falsified. Moreover, while they admit petitioners'
possession of the land, they assert that this possession is in defiance of their repeated demands that the
former relinquish the same. Meanwhile, Pacifico Marquez contends that he is an innocent purchaser for
value of the property having bought the same from the Madrid brothers in 1976. 5
 During the trial, petitioners were unable to present the original deed of sale since it was lost.
Consequently, they were constrained to offer, as Exhibit "A," a photo copy of the purported original
carbon copy of the deed of sale (xerox copy of a certified true copy) in an effort to prove the
transaction.

RTC ruled that Exhibit "A" was inadmissible in evidence for the Court believes that the "xerox
copy of a certified true copy" of the original issued by the notary public cannot be admitted in evidence to
prove the conveyance of the land in question. It dismissed petitioners’ complaint.  It appealed to CA which
affirmed RTC’s decision.

Issue: Whether or not Exhibit A prove the sale of land

Ruling: No, Exhibit A does not prove the sale of land. However, petitioners are legal owners of
land.

To begin with, Atty. Sevillano Tabangay, the notary public who notarized the deed of sale, testified that
the document has about five (5) copies. Hence, it is imperative that all the originals must be accounted for
before secondary evidence can be presented.  These petitioners failed to do. Moreover, records show
that none of these five copies was even presented during the trial. Petitioners' explanation that these
copies were lost or could not be found in the National Archives was not even supported by any
certification from the said office.

It is a well-settled principle that before secondary evidence can be presented, all duplicates and/or
counterparts must be accounted for, and no excuse for the non-production of the original document itself
can be regarded as established until all its parts are unavailable.

Notwithstanding this procedural lapse, when Exhibit "A" was presented private respondents failed, not
only to object, but even to cross-examine the notary public, Atty. Tabangay, regarding its execution.
Forthwith, upon private respondents' failure to object to Exhibit "A" when it was presented, the same
becomes primary evidence.  To be sure, even if Exhibit "A" is admitted in evidence, we agree with the
Court of Appeals that its probative value must still meet the various tests by which its reliability is to be
determined. Its tendency to convince and persuade must be considered for admissibility of evidence
should not be confused with its probative value.

As earlier stated, Exhibit "A" was merely a photocopy lifted from the carbon copy of the alleged deed of
sale. A cursory glance will immediately reveal that it was unsigned by any of the parties and undated as
13

to when it was executed. Worse, when Atty. Tabangay typed Exhibit "A," the contents were based on an
alleged carbon original which petitioners' predecessor-in-interest presented to him, without bothering to
check his own files to verify the correctness of the contents of the document he was copying. In other
words, Atty. Tabangay's failure to determine the accuracy of the carbon copy requested by the petitioners'
predecessor-in-interest renders Exhibit "A" unreliable.

On ownership of the land

The records show that the disputed petitioners since 1959. They have since been introducing several
improvements on the land which certainly could not have escaped the attention of the Madrids.
Furthermore, during all this time, the land was enclosed, thus signifying petitioners' exclusive claim of
ownership. The construction of various infrastructure on the land - rice mill, storage house, garage,
pavements and other buildings - was undoubtedly a clear exercise of ownership which the Madrids could
not ignore. Oddly, not one of them protested.

We cannot accept the Madrids' explanation that they did not demand the petitioners to vacate the land
due to the unexplained killings within the area. Not a single shred of evidence was presented to show
14

that these killings were perpetrated by the petitioners. All told, their remonstration and fears are nothing
but pure speculation. To make matters worse, the record is bereft of any documentary evidence that the
Madrids sent a written demand to the petitioners ordering them to vacate the land. Their failure to raise a
restraining arm or a shout of dissent to the petitioners' possession of the subject land in a span of almost
thirty (30) years is simply contrary to their of ownership.

Next, the Madrids argue that neither prescription nor laches can operate against them because their title
to the property is registered under the Torrens system and therefore imprescriptable. The principle
15

raised, while admittedly correct, are not without exception. The fact that the Madrids were able to secure
TCT No. 167250, and Marquez, TCT Nos. 167220 and 167256, did not operate to vest upon them
ownership of the property. The Torrens system does not create or vest title. It has never been recognized
as a mode of acquiring ownership, especially considering the fact that both the Madrids and Marquezes
obtained their respective TCT's only in October 1986, twenty-seven long (27) years after petitioners first
took possession of the land. If the Madrids and Marquezes wished to assert their ownership, they should
have filed a judicial action for recovery of possession and not merely to have the land registered under
their respective names. For as earlier mentioned, Certificates of Title do not establish ownership.  

Even if we were to rule that the Certificates of Title to the private respondents would ripen into ownership
of the land, and therefore, the defense of prescription would be unavailing, still, the petitioners would have
acquired title to it by virtue of the equitable principle of laches. The Madrids' long inaction or passivity in
asserting their rights over disputed property will preclude them from recovering the same.

Wherefore, CA DECISION IS REVERSED and SET ASIDE. Instead, petitioners are hereby declared as
the legal owners of the subject land. 

14. Transpacific Industrial Supplies, Inc. vs. Court of Appeals, 235 SCRA 494

Facts:
Sometime in 1979, petitioner applied for and was granted several financial accommodations
amounting to P1,300,000.00 by respondent Associated Bank. The loans were evidenced and
secured by four (4) promissory notes, a real estate mortgage covering three parcels of land and
a chattel mortgage over petitioner's stock and inventories.
Unable to settle its obligation in full, petitioner requested for, and was granted by respondent
bank, a restructuring of the remaining indebtedness which then amounted to P1,057,500.00, as
all the previous payments made were applied to penalties and interests.
To secure the re-structured loan of P1,213,400.00, three new promissory notes were executed
by Trans-Pacific as follows: (1) Promissory Note No. TL-9077-82 for the amount of
P1,050,000.00 denominated as working capital; (2) Promissory Note No. TL-9078-82 for the
amount of P121,166.00 denominated as restructured interest; (3) Promissory Note No. TL-
9079-82 for the amount of P42,234.00 denominated similarly as restructured interest (Rollo. pp.
113-115).
The mortgaged parcels of land were substituted by another mortgage covering two other
parcels of land and a chattel mortgage on petitioner's stock inventory. The released parcels of
land were then sold and the proceeds amounting to P1,386,614.20, according to petitioner,
were turned over to the bank and applied to Trans-Pacific's restructured loan. Subsequently,
respondent bank returned the duplicate original copies of the three promissory notes to Trans-
Pacific with the word "PAID" stamped thereon.
Despite the return of the notes, or on December 12, 1985, Associated Bank demanded from
Trans-Pacific payment of the amount of P492,100.00 representing accrued interest on PN No.
TL-9077-82. According to the bank, the promissory notes were erroneously released.
Initially, Trans-Pacific expressed its willingness to pay the amount demanded by respondent
bank. Later, it had a change of heart and instead initiated an action before the Regional Trial
Court of Makati, Br. 146, for specific performance and damages. There it prayed that the
mortgage over the two parcels of land be released and its stock inventory be lifted and that its
obligation to the bank be declared as having been fully paid.
RTC ruled in favor of Transpacific. Hence, the appeal.
Issue: Whether or not petitioner has indeed paid in full its obligation to respondent bank.
Ruling:
No. Applying the legal presumption provided by Art. 1271 of the Civil Code, the trial court ruled
that petitioner has fully discharged its obligation by virtue of its possession of the documents
(stamped "PAID") evidencing its indebtedness. Respondent court disagreed and held, among
others, that the documents found in possession of Trans-Pacific are mere duplicates and
cannot be the basis of petitioner's claim that its obligation has been fully paid. Accordingly, since
the promissory notes submitted by petitioner were duplicates and not the originals, the delivery
thereof by respondent bank to the petitioner does not merit the application of Article 1271
(1st par.) of the Civil Code which reads:

Art. 1271. The delivery of a private document evidencing a credit, made voluntarily
by the creditor to the debtor, implies the renunciation of the action which the former had
against the latter.

Respondent court is of the view that the above provision must be construed to mean the original
copy of the document evidencing the credit and not its duplicate, thus:

. . . [W]hen the law speaks of the delivery of the private document evidencing a credit, it must
be construed as referring to the original. In this case, appellees (Trans-Pacific) presented,
not the originals but the duplicates of the three promissory notes."

The presumption created by the Art. 1271 of the Civil Code is not conclusive but merely prima
facie. If there be no evidence to the contrary, the presumption stands. Conversely, the
presumption loses its legal efficacy in the face of proof or evidence to the contrary. In the case
before us, we find sufficient justification to overthrow the presumption of payment generated by
the delivery of the documents evidencing petitioners indebtedness.
It may not be amiss to add that Article 1271 of the Civil Code raises a presumption, not of
payment, but of the renunciation of the credit where more convincing evidence would be
required than what normally would be called for to prove payment. The rationale for allowing the
presumption of renunciation in the delivery of a private instrument is that, unlike that of a public
instrument, there could be just one copy of the evidence of credit. Where several originals are
made out of a private document, the intendment of the law would thus be to refer to the delivery
only of the original original rather than to the original duplicate of which the debtor would
normally retain a copy. It would thus be absurd if Article 1271 were to be applied differently.
Other matters:
Petitioner has not fully liquidated its financial obligation to the Associated Bank.  Petitioner have had a series of
communications with the bank recognizing that they are still liable for the accrued interest. Petitioner claims that the
above offer of settlement or compromise is not an admission that anything is due and is inadmissible against the party
making the offer.

SC: To determine the admissibility or non-admissibility of an offer to compromise, the circumstances of the case and the
intent of the party making the offer should be considered. Thus, if a party denies the existence of a debt but offers to pay
the same for the purpose of buying peace and avoiding litigation, the offer of settlement is inadmissible. If in the course
thereof, the party making the offer admits the existence of an indebtedness combined with a proposal to settle the claim
amicably, then, the admission is admissible to prove such indebtedness. Exactly, this is what petitioner did in the case
before us for review.

15. BPI vs. SMP, Inc. G.R. No. 175466, 23 December 2009

BPI as successor-in-interest of FEBTC v. SMP, Inc.

G.R. No. 175466, December 23, 2009
Nachura, J., 

Facts: A purchase of polystyrene products was made between Clothspeak Manufacturing and
vendor SMI, Inc, through its Sales Executive, Maria Teresa Michaela Ong. As payment,
Clothespak issued postdated checks in favor of plaintiff SMP and delivered the same to Maria
Teresa Michaela Ong. When the same were deposited by SMP Inc. on their maturity dates, the
drawee bank dishonored and returned said checks for the reason "Account Closed." In the
meantime, a case was filed by herein defendant Far East Bank and Trust Company against
Clothespak for a recovery of sum of money with prayer for issuance of preliminary attachment.
The Pasig Court granted and issued the writ dated March 14, 1995 in favor of the plaintiff bank.
Real and personal properties of the defendants were levied and attached, including the recently
purchased polystyrene products. 

Thereafter, on March 28, 1995, SMP, Inc. filed an Affidavit of Third Party Claim in that Civil
Case, claiming ownership of the polystyrene products taken at Clothespak factory. With the
filing by Far East Bank of the indemnity bond, the goods claimed were not released and the
Pasig Court directed SMP, Inc. to ventilate its claim of ownership in a vindicatory action under
Section 17, Rule 39 of the Revised Rules of Court. Meanwhile, Far East Bank obtained a
favorable judgment against Clothespak. It has become final and executory which led to the
implementation and enforcement of said decision against Clothespak's properties inclusive of
the goods earlier attached. Hence, the instant case is filed by SMP, Inc. to recover from the
attaching bank the value of the goods it claims ownership and for damages.

SMP, Inc. alleges that there was wrongful attachment of the goods for ownership of the same
was never transferred to Clothespak. The former anchors its claim of ownership over the goods
by virtue of the Provisional Receipt No. 4476 issued by Sales Executive Maria Teresa Michaela
Ong to Clothespak with the words, "Materials belong to SMP Inc. until your checks clear." She
testified during the trial that the above words were in her own handwriting. The said receipt was
allegedly issued to Alex Tan of Clothespak after the checks, payment for the goods, were
issued to her. It is asserted that despite receipt by Clothespak of the goods, ownership
remained with SMP, Inc. until the postdated checks it issued were cleared.

Defendant bank, however, claims that the said provisional receipt was falsified to negate the
terms of the Sales Invoices. The phrase, "materials belong to SMP, Inc. until your checks clear,"
was only an insertion of plaintiff's representative in her own handwriting. It did not bear the
conformity of Clothespak. Further, defendant bank assails the admissibility of the receipt for it is
a mere triplicate copy; the original and duplicate copies were not presented in court, in violation
of the Best Evidence Rule. Neither was there secondary evidence presented to conform to the
rule.

RTC ruled for SMP, Inc. CA affirmed. Hence, this petition by BPI. 

Issue: WON the Receipts presented by the respondent admissible in evidence.

Held: In order to discredit the claim of ownership by SMP petitioner questions the admissibility
of the receipt presented by the former, wherein the ownership was reserved for the buyer until
after full payment of the purchase price. Petitioner claims that the same was inadmissible in
evidence and was in contravention of the best evidence rule. We beg to disagree. 

The best evidence rule is the rule which requires the highest grade of evidence obtainable to
prove a disputed fact. Although there are certain recognized exceptions when the subject of
inquiry is the contents of a document, no evidence shall be admissible other than the original
document itself. However, in the instant case, contrary to petitioner’s contention, the receipt
presented by SMP is deemed as an original, considering that the triplicate copy of the
provisional receipt was executed at the same time as the other copies of the same receipt
involving the same transaction. Section 4, Rule 130 of the Rules of Court provides: 

Sec. 4. Original of document.·

(a) The original of the document is one the contents of which are the subject of inquiry.

(b) When a document is in two or more copies executed at or about the same time, with
identical contents, all such copies are equally regarded as originals.

(c) When an entry is repeated in the regular course of business, one being copied from another
at or near the time of the transaction, all the entries are likewise equally regarded as originals.

PETITION DENIED.

16. Capital Shoes Factory, Ltd. Vs. Traveler Kids, Inc. G.R. No. 200065, 24 September
2014
Facts:
TKI agreed to import the shoes and sandals made by CSFL from its China factory. The
agreement was to pay 30% of the purchase price of the goods by way of letters of credit and the
70% was by telegraphic transfer. For the first three years, CSFL was able to collect from TKI.
However, TKI started to default in its payments. The unpaid accounts amounted to more than
300,000 USD. 
CSFL filed a complaint for collection of sum of money and damages before the RTC.
During the trial, CSFL, through its witness, identified several sales invoices and order slips it
issued as evidence of its transactions with TKI. The latter objected to the identification pointing
out that the documents being presented were mere photocopies. RTC, however, admitted the
documents. TKI filed a motion for reconsideration. However, it was denied. 
 CSFL basically argues that the excluded documents are admissible in evidence because
it was duly established during the trial that the said documents were duplicate originals, and not
mere photocopies, considering that they were prepared at the same time as the originals. On
the other hand, TKI counters that CSFL’s claim that the photocopied documents were duplicate
originals was just a unilateral and self-serving statement without any supportive evidence.

Issue:
Whether or not the documents should be admitted as pieces of evidence.

Ruling:
Yes. The documents were considered as duplicate originals under Section 4(b) of Rule
130 of the Rules of Court which provides that when a document is in two or more copies
executed at or about the same time, with identical contents, all such copies are equally
regarded as originals. Jurisprudence also provided that duplicate originals were admissible as
evidence. Records reveal that Chiu, CSFL’s principal witness, was able to satisfactorily explain
that Exhibits “D” to “GG-1” and “HH” to “KK-1” were duplicate originals of invoices and order
slips, and not mere photocopies. 

17. People of the Philippines vs. Abella, G.R. No. 195666, 20 January 2016

Facts:

Between October 8, 2003 and March 18, 2004, the said accused, Abella was found conspiring
and confederating with another whose true name, real identity and present whereabouts is still
unknown, and mutually helping each other.

Abella represented herself to have the capacity to contract, enlist and transport Filipino workers
for employment abroad. She promised employment or job placement to certain persons as
laundrywomen/Laundrymen and Waiter in Istanbul, Turkey and Dubai, without first having
secured the required license or authority from the Department of Labor and Employment.
Moreover she charged or accept directly or indirectly from said complainants amounts which are
in excess of or greater than those specified in the schedule of allowable fees prescribed by the
Department of Labor and Employment under Memorandum Order No. 5, Series of 1985.
Consequently she failed to deploy aforesaid complainants and continuously fails to reimburse
them for the expenses they incurred in connection with the documentation and processing for
their deployment despite demand.

RTC find Abella guilty beyond reasonable doubt of the crime of Illegal Recruitment in large
scale. Aggrieved, Abella appealed before the Court of Appeals. The Court of Appeals, in a
Decision dated September 30, 2010, affirmed the RTC judgment of conviction but with the
modification increasing the amount of fine imposed against Abella.

In her Supplemental Brief, Abella contends that the prosecution failed to prove her guilt beyond
reasonable doubt as the first element of illegal recruitment in large scale, i.e., the accused
undertook a recruitment activity under Article 13(b) of the Labor Code or any prohibited practice
under Article 34 of the same Code, is wanting. Abella points out that he prosecution presented a
mere photocopy of the handwritten agreement supposedly executed by Abella in Miguel's favor,
and considering that the contents of such agreement are in issue in this case, the RTC
wrongfully accorded much weight to such evidence.

ISSUE:
WON the handwritten agreement is admissible in evidence

            

Held:

Abella is challenging the probative value of the above handwritten agreement on the ground that
it is a mere photocopy. Abella reasons that since the contents of said agreement are in issue,
the best evidence rule applies. The original of the agreement is the best evidence of Abella
making representations that she had the power to send private complainants abroad to work.

The non-presentation of the original copy of the handwritten agreement is not fatal to the
prosecution's case. Miguel personally testified before the RTC as to the circumstances of her
recruitment by Abella. Abella made verbal, and not only written, promises to Miguel of
employment abroad. The handwritten agreement merely substantiates Miguel's testimony at
best. In People v. Pabalan, we affirmed the sufficiency of testimonial evidence to prove receipt
by therein accused-appellant of placement fees, even in the absence of documentary evidence
such as receipts issued by accused-appellant, thus:

The absence of receipts for some of the amounts delivered to the accused did not mean that the
appellant did not accept or receive such payments. Neither in the Statute of Frauds nor in the
rules of evidence is the presentation of receipts required in order to prove the existence of a
recruitment agreement and the procurement of fees in illegal recruitment cases. Such proof may
come from the testimonies of witness.

18. Sps. Tapayan vs. Martinez, G.R. No. 207786, 30 January 2017

Facts: Ponceda Martinez owns the Pingol Property in which 2 mortgages were constituted: (1)
PNB - ₱100k (2) DBP- ₱1 Million. To release the Pingol Property from the mortgage with PNB,
the Tapayans and Ponceda utilized a portion of the proceeds from the DBP loan to settle
balance in the PNB loan in the amount of ₱65k (paid by Tapayans). Thereafter the Tapayans
and Ponceda executed a Deed of Undertaking in reference to the DBP Mortgage stating that the
Tapayans shall mortgage their house and lot in favor of Ponceda to secure the amount and that
in the event the Tapayans could not pay the loan and consequently the Pingol property is
foreclosed and is not redeemed within the 1 year redemption period by the Tapayans, or in case
the loan shall be paid by Ponceda to save it from foreclosure, the Tapayans shall acknowledge
their indebtedness to Ponceda but in either case shall be deducted the ₱65k plus interests and
fees paid by the Tapayans to PNB. 

When the DBP loan was not paid when it fell due, Ponceda filed a complaint for Specific
Performance with Damages before the RTC against the Tapayans compelling them to constitute
a mortgage over their house and lot pursuant to the Deed of Undertaking. The Tapayans denied
Ponceda’s allegations and claimed that the deed was a falsity. 

RTC: Ruled in favor of Ponceda; Deed was duly notarized hence the notary public is
presumed to have performed his duties regularly.

CA: Affirmed. Ordered the Tapayans to execute the mortgage in favor of Ponceda
Issue: WON the CA erred in upholding the validity of the Deed of Undertaking

Ruling: No. The best evidence rule requires that the original document be produced whenever
its contents are the subject of inquiry, except in certain limited cases laid down in Sec. 3 of Rule
130. However, to set this rule in motion, A PROPER AND TIMELY OBJECTION IS
NECESSARY. 

In Lorenzana vs. Lelina it was held that x x x evidence not objected to is deemed
admitted and may be validly considered by the Court in arriving at its judgment. Courts
are not precluded to accept in evidence a mere photocopy of a document when no
objection was raised when it was formally offered. x x x 

x x x Failure to interpose a timely objection at the time when the evidence is

offered, such objection is considered waived.  x x x

The Court notes that the Tapayans failed to object to the admission of the plain copy of
the Deed of Undertaking at the time it was formally offered in evidence before the RTC. In fact,
they admitted that they only raised this objection for the first time before the CA. Having failed
to timely raise their objection when the formal offer of evidence was filed in the RTC, they
deemed to have waived the same. Hence, they are precluded from assailing the probative value
of  the plain copy of the Deed of Undertaking. 

PAROL EVIDENCE RULE

1. ACI Philippines, Inc. vs. Coquia, G.R. No. 174466, 14 July 2008
Facts:

Petitioner ACI Philippines, Inc. is engaged in the business of manufacturing

1

fiberglass, it contracted with respondent Editha C. Coquia for the purchase of one
(1) lot of flint cullets, consisting of 2,500 to 3,000 metric tons, at a price of P4.20
per kilo under Purchase Order No. 1062113 dated 6 October 1994. Several
deliveries made by respondent were accepted and paid for by petitioner at the unit
price of P4.20 per kilo as indicated in Purchase Order No. 106211.4. However, on
28 October 1994, petitioner demanded the reduction of the purchase price from
P4.20 per kilo to P3.65 per kilo to which respondent acceded, albeit allegedly under duress.
Petitioner accepted the deliveries but refused to pay for them even at the reduced price of P3.65
per kilo, demanding instead that the unit price be further reduced to P3.10 per kilo.7

Respondent then filed a Complaint for specific performance and damages against
8

petitioner seeking payment for the deliveries made under Delivery Receipt Nos.
901, 719 and 735, amounting to 46,390 kilos at the renegotiated price of P3.65 per
kilo. Respondent further demanded that petitioner be directed to accept and pay for
the remaining deliveries to complete the one (1) lot of flint cullets originally
contracted for.

Ruling in favor of the respondent, the trial court ordered petitioner to accept
deliveries of the flint cullets contracted for under Purchase Order No. 106211
and to pay for the said deliveries within ten (10) days. The Court of Appeals
affirmed the decision of the trial court but deleted the award of attorney's fees.
Issue:

Whether or not petitioner may be bound to accept the deliveries of washed

cullets from respondent

Ruling:

No. The foregoing leads us to resolve the first and second issues framed by the
Court of Appeals in favor of petitioner. Petitioner accepted deliveries under
Purchase Order No. 106211 on 8, 12, 15, 18, 20 and 22 October 1994 and paid for
these deliveries in accordance with the terms of the purchase order, i.e., at the
contract price of P4.20 per kilo. However, the original contract between the parties
evidenced by Purchase Order No. 106211 was unequivocally novated by Purchase
Order No. 106373, thereby extinguishing the original obligation of petitioner to
accept deliveries from respondent until the 2,500-3,000 metric tons of flint cullets
originally contracted for is filled. Petitioner, therefore, cannot be compelled to
24

accept more deliveries of flint cullets from respondent to complete the quantity
originally contracted for.

By the same token, petitioner cannot be tied down to the P4.20 per kilo unit price
under Purchase Order No. 106211, nor even to the P3.65 per kilo indicated in
Purchase Order No. 106373, the latter contract not having stated the quantity
petitioner is willing to accept delivery of and pay for under that price.

As regards damages, we find the award thereof to respondent to be without factual

basis. Respondent sought to prove the actual damages she incurred merely through
her own testimony, without adducing any documentary evidence to substantiate her
alleged losses.

2. Seaoil Petroleum Corporation vs. Autocorp Group, G.R. No. 164326, 17 October
2008

FACTS:
Petitioner Seaoil Petroleum Corporation purchased one unit of ROBEX 200 LC
Excavator from respondent Autocorp Group paid in 12 monthly installments as embodied in the
Vehicle Sales Invoice No. A-0209 and Vehicle Sales Confirmation No. 258. Both documents
were signed by Francis Yu, president of Seaoil, on behalf of said corporation. Furthermore, it
was agreed that ownership was to remain with Autocorp until the obligation is fully settled. In
this light, Seaoil’s contractor, Romeo Valera, issued 12 postdated checks. However, Autocorp
refused to accept the checks because they were not under Seaoil’s name. Hence, Yu, on behalf
of Seaoil, signed and issued 12 postdated checks for P259,376.62 each with Autocorp as
payee. After the delivery of the excavator, the remaining 10 checks were not honored by the
bank since Seaoil requested that payment be stopped. Despite repeated demands, Seaoil
refused to pay the remaining balance. 

Autocorp filed a complaint for recovery of personal property with damages and replevin
in RTC. In Seaoil’s answer, it alleged that Seaoil and Autocorp were only utilized as conduits to
settle the obligation of one foreign entity named Uniline Asia, in favor of another foreign entity,
Focus Point International, Incorporated. Rodriguez is a stockholder and director of Autocorp. He
is also the owner of Uniline. On the other hand, Yu is the president and stockholder of Seaoil
and is at the same time owner of Focus. Allegedly, Uniline chartered MV Asia Property in the
amount of $315,711.71 from its owner Focus. Uniline was not able to settle the said amount.
Hence Uniline, through Rodriguez, proposed to settle the obligation through conveyance of
vehicles and heavy equipment to be procured from Autocorp. Seaoil claims that the real
transaction is that Uniline, through Rodriguez, owed money to Focus. In lieu of payment, Uniline
instead agreed to convey the excavator to Focus. This was to be paid by checks issued by
Seaoil but which in turn were to be funded by checks issued by Uniline. It further claims that
when Rodriguez issued a stop payment order on the 10 checks the former was also constrained
to order a stop payment order on the PBCOM checks. 

RTC ruled that the transaction between Autocorp and Seaoil was a simple contract of
sale payable in installments and held that the obligation to pay plaintiff the remainder of the
purchase price of the excavator solely devolves on Seaoil. CA affirmed the decision of RTC. It
held that the transaction between Yu and Rodriquez was merely verbal and cannot alter the
sales contract between Seaoil and Autcorp as this will run counter to the parol evidence rule
which prohibits the introduction of oral and parol evidence to modify the terms of the contract.
The claim that it falls under the exceptions to the parol evidence rule has not been sufficiently
proven. A petition for certiorari was filed. 

ISSUE: 
Whether or not CA erred in applying parol evidence rule to prove only some terms contained in
one portion of the document since the same does not reflect the true agreement of the parties. 

RULING: 
No. 
Petitioner does not question the validity of the vehicle sales invoice but merely argues
that the same does not reflect the true agreement of the parties. However, petitioner only had its
bare testimony to back up the alleged arrangement with Rodriquez. Unsubstantiated testimony
offered as  proof of verbal agreement which tends to vary the terms of a written agreement, is
inadmissible under the parol evidence rule. This rule forbids any addition or contradiction of the
terms of a written agreement by testimony or other evidence purporting to show that different
terms were agreed upon by the parties, varying the purport of the written contract unless it falls
under one of the exceptions as provided under:

SEC. 9. Evidence of written agreements.When the terms of an agreement

have been reduced to writing, it is considered as containing all the terms agreed
upon and there can be, between the parties and their successors-in-interest, no
evidence of such terms other than the contents of the written agreement.

However, a party may present evidence to modify, explain or add to the terms of the
written agreement if he puts in issue in his pleading:
(a) An intrinsic ambiguity, mistake or imperfection in the written agreement;
(b) The failure of the written agreement to express the true intent and agreement of the
parties thereto;
(c) The validity of the written agreement; or
(d) The existence of other terms agreed to by the parties or their successors- in-
interest after the execution of the written agreement. 
 The Vehicles Sales Invoice is the best evidence of the transaction. It is considered a
business form that is commonly recognized in ordinary commercial transactions as valid
between the parties and at the very least serves as an acknowledgement that a business
transaction has in fact transpired. In here, the terms of the subject sales invoice are clear. They
show that Autocorp sold to Seaoil one unit of Excavator paid for by checks. The fact that Seaoil 
as represented by Yu is the customer or buyer cannot be denied. Petitioners contention that the
document falls within the exception to the parol evidence rule is untenable. The exception
obtains only where the written contract is so ambiguous or obscure in terms that the contractual
intention of the parties cannot be understood from a mere reading of the instrument. In such a
case, extrinsic evidence of the subject matter of the contract, of the relations of the parties to
each other, and of the facts and circumstances surrounding them when they entered into the
contract may be received to enable the court to make a proper interpretation of the instrument.

SC further stated that the transaction under the Vehicle Sales Invoice is separate and
distinct from that under the Lease Purchase Agreement. In the former, it is Seaoil that owes
Autocorp, while in the latter, Uniline incurred obligations to Focus. There was never any
allegation, much less any evidence, that Autocorp was merely an alter ego of Uniline, or that the
two corporations’ separate personalities were being used as a means to perpetrate fraud or
wrongdoing.

3. Ortanez vs. Court of Appeals, 266 SCRA 561

Facts: Petitioner bought 2 lands from respondents for a consideration of 35k and 20k,
respectively. 2 Deeds of Absolute Sale  were executed in favor of petitioner.

Respondents were able to receive the payments therefor but they failed to deliver the title to the
petitioner. When petitioner demanded the delivery, respondents refused on the ground that the
title of the first lot is in the possession of another person, and petitioner's acquisition of the title
of the other lot is subject to certain conditions. 

Aggrieved, petitioner filed a complaint for specific performance before RTC. During trial,
respondent Oscar (former judge) orally testified that the sale was subject to certain conditions
although such conditions were not reflected in the deeds of sale. Despite petitioner’s timely
objections on the admissibility of such oral conditions being barred by the parol evidence rule,
the RTC admitted the same and ruled in favor of respondents. CA affirmed.

Issue: Whether or not the parol evidence introduced by respondents to establish the oral
conditions-precedent to the contracts of sale are admissible as evidence

Ruling: No.

Respondents' oral testimony on the alleged conditions, coming from a party who has an interest
in the outcome of the case, depending exclusively on human memory, is not as reliable as
written or documentary evidence. Spoken words could be notoriously unreliable unlike a written
contract which speaks of a uniform language. Sec. 9 of Rule 130 of ROC provides when the
terms of an agreement were reduced to writing, as in this case, it is deemed to contain all the
terms agreed upon and no evidence of such terms can be admitted other than the contents
thereof. Considering that the written deeds of sale were the only repository of the truth,
whatever is not found in said instruments must have been waived and abandoned by the
parties. Examining the deeds of sale, we cannot even make an inference that the sale was
subject to any condition. As a contract, it is the law between the parties.

Also, the parol evidence sought to be introduced would vary, defeat or contradict the operation
of valid instrument, in this case the deeds of absolute sale. Nothing contained therein shows
that the sale shall be subject to any condition-precedent. Although a condition precedent to a
contract may be established by parol evidence, it must be shown that it was expressly or
impliedly agreed upon by the parties. In this case, there was no such agreement.

Also, the exception to the parol evidence rule invoked by the respondents is untenable. Such
exception applies only where the written contract is so ambiguous or obscure in terms that the
contractual intention of the parties cannot be understood from a mere reading of the instrument.
In such a case, extrinsic evidence of the subject matter of the contract, of the relations of the
parties to each other, and of the facts and circumstances surrounding them when they entered
into the contract may be received to enable the court to make a proper interpretation of the
instrument. The Deeds of Sale are clear and without any ambiguity in its terms. 

This case is covered by the general rule that the contents of the writing are the only repository
of the terms of the agreement. Considering that respondent Oscar Inocentes is a lawyer (and
former judge) he was "supposed to be steeped in legal knowledge and practices" and was
"expected to know the consequences" of his signing a deed of absolute sale. Had he given an
iota's attention to scrutinize the deeds, he would have incorporated important stipulations that
the transfer of title to said lots were conditional.

4. Inciong vs. Court of Appeals, G.R. No. 96405, 26 June 1996

Facts: Baldomero Inciong, Jr. (D) cosigned a P50,000-promissory note with Rene
Naybe and Gregorio Pantanosas holding themselves jointly and severally liable to
creditor Philippine Bank of Communications (P)—PBCOM, Cagayan de Oro City
branch.

The due date expired without the promissors paying their obligation. Consequently,
creditor PBCOM (P) demanded payment from the obligors who did not respond. So,
creditor PBCOM (P) filed for collection of the sum of P50,000.00 against the three
obligors.

The complaint was dismissed for failure of the plaintiff to prosecute the case, but the
lower court reconsidered and the summonses were eventually served. As prayed for by
PBCOM (P), the lower court dismissed the case against defendant Pantanosas. With
co-defendant Naybe in Saudi Arabia, only the summons to co-maker Inciong (D) was
duly served.

Inciong (D) contended that he only agreed to limit his liability to P5,000 and that his
consent was vitiated by fraud. On appeal, he annexed to his petition an affidavit
supporting his claim of fraud.
Issues: Can the creditor file a claim for the entire obligation against a co-maker to a
loan?

Ruling: Yes. Because the promissory note involved in this case expressly states that
the three signatories therein are jointly and severally liable, any one, some or all of them
may be proceeded against for the entire obligation. The choice is left to the solidary
creditor to determine against whom he will enforce collection.

Consequently, the dismissal of the case against co-defendant Pantanosas may not be
deemed as having discharged petitioner from liability. As regards co-defendant Naybe,
suffice it to say that the court never acquired jurisdiction over him. Therefore, PBCOM
(P) only have recourse against his co-makers, as provided by law.

Inciong (D) signed the promissory note as a solidary co-maker and not as a guarantor.

A solidary or joint and several obligation is one in which each debtor is liable for the
entire obligation, and each creditor is entitled to demand the whole obligation.

On the other hand, Article 2047 of the Civil Code states:

By guaranty a person, called the guarantor, binds himself to the

creditor to fulfill the obligation of the principal debtor in case the latter
should fail to do so.

If a person binds himself solidarily with the principal debtor, the

provisions of Section 4, Chapter 3, Title I of this Book shall be
observed. In such a case the contract is called a suretyship.

Section 4, Chapter 3, Title I, Book IV of the Civil Code states the law on joint and
several obligations.

When there are two or more debtors in one and the same obligation, the presumption is
that the obligation is joint so that each of the debtors is liable only for a proportionate
part of the debt. There is a solidary liability only when the obligation expressly so states,
when the law so provides or when the nature of the obligation so requires.  —Article
1207 of the New Civil Code

5. Sps. Sabio vs. International Corporate Bank, Inc. 364 SCRA 385

Ynares, Santiago J.

FACTS: The controversial land in this case was the subject of several land registration and civil
cases. Ledonio spouses assigned the subject land to spouses sabio evidenced by a deed of
assignment with assumption of mortgage. Respondent Bank also acquired rights over the same land
via a deed of assignment from Trans Resource. The parties settled by entering into a MOA where
sabio transferred all the rights to respondent bank except for a 58,000 sq.m portion which the bank
should transfer back to petitioners after perfecting its ownership and title to the parcels of land and
the payment of 750k. Bank subsequently transferred all its rights to Las Pinas Ventures and AGC.
Petitioners also claimed that one of the commitments of defendant Interbank which induced plaintiffs
to execute the agreement without which plaintiffs would not have executed was that defendant
Interbank would clear the contiguous portion of all occupants and wall-in the same. the defendants
signified willingness to abide by the MOA, and complete and perfect title to the parcel of land,
including that portion which was to be assigned to the plaintiff spouses. With regard to that 58,000
square meter parcel, the defendants also acknowledged the obligation to segregate that contiguous
portion and deliver title thereto to the plaintiff spouses free from liens and encumbrances. However,
the defendants also averred that fulfillment of its obligation under the MOA became impossible due
to the plaintiff spouses’ own acts. First, defendants posited that they were ready to deliver the title to
the 58,000 square meter parcel and had, in fact, prepared the Deed of Conveyance required by the
Register of Deeds, but the plaintiffs themselves refused to sign the said deed unless the subject
property was cleared of all squatters and other illegal occupants. The defendants nevertheless
repudiated plaintiffs’ claim that they (defendants) were obligated to clear the said property of all
squatters and occupants, much less to fence the said property, arguing that no such obligation was
imposed in the MOA.

The trial court ruled in favor of the defendants, finding that the MOA did not impose, whether
expressly or impliedly, on Interbank and its transferees the obligation to clear the subject 58,000
square meter portion of squatters and other illegal occupants.

ISSUE:  Whether or not the defendants had the obligation to clear the subject 58,000 square meter
portion of all occupants and to fence the said premises, before conveyance of the property can be
considered as full compliance with the obligation imposed upon the defendants under the MOA.

RULING: Petitioners would argue that there was no necessity to make specific provisions with
respect to the removal of the occupants and structures from, and walling in of, the subject property.
To them, it was sufficient that both parties knew the actual condition of the property. Petitioner
Camilo Sabio testified to that effect, stating that the real intention or agreement of the parties was
that the obligation to complete and perfect ownership and title included the removal of all squatters
and unauthorized structures, and to fence the perimeter of the subject property. However, the Court
of Appeals correctly concluded that petitioner Camilo Sabio’s testimony in this regard cannot be
taken advantage of “to inject into the agreement any understanding which is contradictory to or at
variance with the terms thereof without violating the parol evidence rule The rule is that “when the
terms of an agreement have been reduced to writing, it is considered as containing all the terms
agreed upon and there can be between the parties and their successors-in-interest, no evidence of
such terms other than the contents of the written agreement.”

There are exceptions to said rule, however, such as when:

1.       There is an intrinsic ambiguity, mistake or imperfection in the writing;

2.       The written agreement fails to express the true agreement and intent of the parties
thereto;

3.       The validity of the written agreement is in question; and

4.       There exists other terms agreed by the parties or their successors-in-interest after the
execution of the written agreement.

In the instant case, the MOA between the Sabios and Interbank was never assailed for any intrinsic
ambiguity, mistake or imperfection in the writing by any of the parties. More importantly, petitioners
never alleged in any of their pleadings that the MOA failed to express the true agreement and intent
of the parties thereto. In fact, petitioner Camilo Sabio would be hard put to question the very
contents of the MOA since he admittedly participated in the drafting of the MOA with the assistance
of legal counsel.  Even if he would belatedly complain that the MOA did not state the true intentions
of the parties, he is estopped from doing so.

Indeed, the Court of Appeals noted, it is highly inconceivable and illogical that petitioner Camilo
Sabio, an experienced lawyer who personally took part in the preparation of the MOA with the
assistance of another lawyer, in the course of negotiations that lasted about a year, “did not insist on
expressly providing the necessary stipulations and in words that leave nothing to further
interpretation.”  He cannot now insist that the court should accept his bare testimony that there was
a verbal understanding between the parties to the MOA, such that there was no necessity to make
specific provisions concerning the removal of illegal occupants and structures, nor even to fence the
subject parcel of land.

His testimony may have been unrebutted, but unsubstantiated testimony offered as proof of verbal
agreements which tend to vary the terms of a written agreement is inadmissible under the parol
evidence rule.

Furthermore, the validity of the MOA was never questioned. In fact, the petitioners are vigorously
pursuing its execution, albeit in a manner that departs from the stipulations contained therein. Since
no fraud or mistake that would vitiate the validity of the MOA has been alleged, parol evidence
cannot be admitted to incorporate additional contemporaneous conditions which are not mentioned
at all in the written agreement.  Neither have petitioners shown that after the execution of the MOA,
the parties and their successors-in-interest agreed to terms other than those appearing in the MOA.

 In sum, there is no justification in the instant case to admit parol evidence to support the petitioners’
claims. It is a cardinal rule of evidence, not just one of technicality but of substance, that the written
document is the best evidence of its own contents. It is also a matter of both principle and policy that
when the written contract, by agreement of the parties, is established as the repository of their
stipulations, any other evidence is excluded and the same cannot be used as a substitute for such
contract, nor even to alter or contradict them. Although the parol evidence rule is inflexible, it admits
of four (4) exceptions, as earlier discussed.

Since none of these exceptions was ever put in issue in the pleadings, in accordance with Rule 130,
Section 9 of the Rules of Court, the parol evidence rule must be strictly adhered to in this instant
case. Therefore, the stipulations of the contract being the law between the parties, the courts have
no recourse but to enforce them as they were agreed upon and written.

6. Madrigal vs. Court of Appeals, 456 SCRA 247

Facts: Private respondent Jose Mallari and his wife Fermina Mallari are the owners of a 340-
square meter residential lot with a 2-storey residential house erected thereon. 

In need of money for his wife’s planned travel to the United States, Jose thought of mortgaging
the above property with a bank. However, his son Virgilio Mallari convinced Jose not to proceed
with the intended mortgage and to instead assign to him a portion of the same property,
assuring his father that the latter could continue in occupancy of the property. Jose did not
anymore proceed with his original idea of mortgaging the property with a bank. Instead, he and
his wife Fermina executed a document denominated as “Deed of Absolute Sale”, whereunder
the couple appeared to have conveyed to their son Virgilio Mallari the house and lot in question
for a consideration of P50,000.00. Without his knowledge, his son Virgilio sold the same
property for the same amount of P50,000.00 to Edenbert Madrigal. 
Sometime thereafter, Edenbert Madrigal demanded Jose Mallari to vacate the subject property.
It was then that Jose came to know for the first time of the sale of his property by his son Virgilio
in favor of Edenbert Madrigal. Jose Mallari filed against his son Virgilio Mallari and Edenbert
Madrigal the complaint for annulment, redemption and damages with prayer for preliminary
injunction/temporary restraining order in this case.

Issue: Whether or not the questioned Deed of Sale is in fact a equitable mortgage. 

Ruling: Petitioners fault the trial court for receiving parol evidence to establish that the
instrument in question is actually one of equitable mortgage. The Court was not persuaded.

Even if the document appears to be a sale, parol evidence may be resorted to if the same
does not express the true intent of the parties. In the very words of Lustan vs CA: “Even
when a document appears on its face to be a sale, the owner of the property may prove that
the contract is really a loan with mortgage by raising as an issue the fact that the
document does not express the true intent of the parties. In this case, parol evidence then
becomes competent and admissible to prove that the instrument was in truth and in fact given
merely as a security for the repayment of a loan. And upon proof of the truth of such allegations,
the court will enforce the agreement or understanding in consonance with the true intent of the
parties at the time of the execution of the contract.”

7. Willex Plastic Industries Corporation vs. Court of Appeals, 256 SCRA 478
8. Olivares et. al vs. Sarmiento, G.R. No. 158384, 12 June 2008

Carpio, J.

Facts: Respondent Sarmiento owns a 230 sq.m. Land in San Antonio, Oton, Iloilo.
Sarmiento and her husband, Manuel, borrowed P12,000 from DBP to construct the house and
mortgaged the land as security. Sarmiento and her husband failed to pay the monthly
amortizations. Sarmiento then allegedly borrowed P35,000 from Luis Boteros, her neighbor and
her eldest son’s godfather to pay the obligation and prevent foreclosure. Sarmiento alleges that
instead of getting the amount from Boteros, she authorized Boteros and his niece, Planta to pay
her loan, after which, they executed a Deed of Absolute Sale signed by both Sarmiento and her
husband.

Sarmiento accused Boteros and Planta of forging her signatures in 2 deeds of sale to
make it appear that Sarmiento and Manuel have sold the house and lot to Boteros. NBI could
not give a definite finding whether Manuel’s signatures were forged. 

Boteros claims that Sarmiento offered the house for sale in exchange for settling her
debt with DBP along with interest, totalling P21,009.62. Boteros then sold the same to Juan
Olivares and Dolores Robles for P27,000. Olivares testified that before buying the property, he
approached Sarmiento who confirmed that she had indeed sold the house and lot to Boteros.

The contract of sale was presented, along with the affirmative testimonies of witnesses
and Notary Public.

RTC dismissed the action initiated by Sarmiento to recover the ownership of the house
and lot. 
 CA Reversed and ordered Sarmiento to pay back Luis the P21,009.62 which Luis paid to
DBP to settle Sarmiento’s debt.
According to the CA, the contract was not a sale but an equitable mortgage, because of
the unusually inadequate price indicated therein, P25,000. CA appreciated the fact that
Sarmiento only finished grade 3 and did not know English, coupled with the failure of Boteros to
explain the contents of the deed of sale. CA also appreciated the fact that Sarmiento’s family
continued to reside in the house. Thus, the CA claims that Boteros is entitled to recover the
property from Olivares and Robles who were not buyers in good faith, being neighbors of
Sarmiento who were aware that Sarmiento’s family still occupied the house.

Issue: WON the CA erred in upholding the uncorroborated testimony/denial of

Sarmiento and disregarded the affirmative testimonies of witnesses and the Notary Public.

Ruling: Yes. The CA decision is reversed. The Deed of Absolute Sale is Valid.

As found by the trial court, the essential requisites

for a valid contract were present: (1) consent of the
parties, as evidenced by their signatures; (2) object
certain which is the subject property; and (3) the
consideration which is P25,000. Furthermore, the
notarized Deed of Absolute Sale is a public document
which has the presumption of regularity and whose
validity should be upheld absent any clear and convincing evidence to contradict its validity.

We cannot subscribe to respondent’s bare allegation that the agreement between her
and Boteros was merely a loan for P35,000 and not the sale of the property. Respondent failed
to substantiate her claim that the transaction was merely a loan. In fact, there was no written
document evidencing the alleged loan transaction. It is quite improbable that Boteros, who knew
that respondent was unable to pay her P12,000 loan from the DBP, would agree to grant
respondent a P35,000 loan which is almost thrice as much as the DBP loan, without insisting
that the loan be embodied in a written document. Furthermore, respondent admitted that she
has never paid a single centavo of her alleged loan with Boteros.

On the other hand, the notarized Deed of Definite Sale and the notarized Deed of
Absolute Sale signed by respondent and Manuel clearly bely respondent’s claim that the
agreement was merely a loan transaction. These circumstances clearly indicate that the
agreement was indeed a sale of real property and not merely a loan.

Where the terms of the contract are clear and leave no doubt upon the intention of the
contracting parties, the literal meaning of its stipulations shall control. The contract is the law
between the parties and when the words of the contract are clear and can be easily understood,
there is no room for construction.

9. Financial building Corporation vs. Bloomfield Educational Foundation, Inc., G.R.

No. 164186, 04 October 2010

FACTS:
Rudlin International Corporation invited proposals from several contractors to undertake the
construction of a three-storey school building.The contract was awarded to Financial Building
Corporation.

A Construction Agreement was executed which provided for the total consideration and liability
for delay. Subsequently, FBC and Rudlin made amendments to their Construction Agreement
pertaining to the completion date and schedule of payment of the balance due to FBC.

When the school building was already completed, FBC demanded payment of the balance of
the adjusted contract price per computation but it was not heeded by Rudlin.

Thus, FBC filed a suit for collection of sum of money.

• Defendants: denied the allegation in the complaint and averred that the Construction
Agreement did not reflect the true contract price agreed upon which is P6,006, 965.00. The
amount of P6,933,268.00 was indicated in the Construction Agreement solely for the purpose
of obtaining a higher amount of loan from BPI. The execution of such document was made
with understanding between FBC and Rudlin that the contract price stated therein would be
decreased to a mutually acceptable contract price. However, due to inadvertence, the parties
forgot to sign an agreement fixing the true contract price. Rudlin also denied that FBC
completed the construction of the project and many portions of the work performed by FBC
are faulty/defective. The work done by FBC was not accepted by Rudlin for valid reason.

• By agreement of the parties, the trial court appointed three Commissioners to resolve the
factual issues pertaining to the construction of the subject building specially : (a) adherence
and non-adherence to the plan and specifications; (b) Additives, deductive, defects and faults
in the construction and (c) completion and non-completion of the project. The Commissioners
conducted ocular inspection and submitted a detailed report on their findings and conclusions.
FBC submitted its comment in the said report denying any responsibility for the alleged
defects and deficiencies found by the Commissioners.

• The RTC dismissed the case. The CA ordered Rudlin to pay FBC.

ISSUE: Whether or not the Construction Agreement reflected the correct contract price.

RULING:

         Rudlin failed to substantiate its claim that the contract price stated in the
Construction Agreement (P6,933,268.00) was not the true contract price because it had an
understanding with FBC that they would decrease said amount to a mutually acceptable
amount.

         Under the general rule in Section 9 of Rule 130 of the Rules of Court, when the
terms of an agreement were reduced in writing, as in this case, it is deemed to contain all
the terms agreed upon and no evidence of such terms can be admitted other than the
contents thereof. Rudlin argues that under Section 9, Rule 130, a party may present evidence
to modify, explain or add to the terms of the written agreement if it is put in issue in the pleading,
[t]he failure of the written agreement to express the true intent and the agreement of the parties
thereto. Assuming as true Rudlins claim that the agreement failed to accurately reflect an intent
of the parties to fix the total contract price at P6,006,965.00, Rudlin failed to avail of its right to
seek the reformation of the instrument to the end that such true intention may be expressed.
         Evidence of a prior or contemporaneous verbal agreement is generally not admissible to
vary, contradict or defeat the operation of a valid contract. Section 9 of Rule 130 of the Rules of
Court states:

SEC. 9. Evidence of written agreements. When the terms of an agreement have

been reduced to writing, it is considered as containing all the terms agreed upon
and there can be, between the parties and their successors-in-interest, no
evidence of such terms other than the contents of the written agreement.

However, a party may present evidence to modify, explain or add to the terms of
the written agreement if he puts in issue in his pleading:

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

(b) The failure of the written agreement to express the true intent and agreement
of the parties thereto;

(c) The validity of the written agreement; or

(d) The existence of other terms agreed to by the parties or their successors-in-
interest after the execution of the written agreement.

The term agreement includes wills.

         Rudlin cannot invoke the exception under (a) or (b) of the above provision. Such
exception obtains only where the written contract is so ambiguous or obscure in terms that the
contractual intention of the parties cannot be understood from a mere reading of the instrument.
In such a case, extrinsic evidence of the subject matter of the contract, of the relations of the
parties to each other, and of the facts and circumstances surrounding them when they entered
into the contract may be received to enable the court to make a proper interpretation of the
instrument.

        

10. Marquez vs. Espejo, G.R. No. 168387, 25 August 2010

11. Sps. Paras vs. Kimwa, G.R. No. 171601, 08 April 2015
LEONEN, J.
FACTS:

In their Complaint, Spouses Paras alleged that sometime in December 1994, Lucia was
approached by Kimwa expressing its interest to purchase gravel and sand from her. Kimwa
allegedly asked that it be “assured” of 40,000 cubic meters worth of aggregates. 20 Lucia
countered that her concession area was due to be rechanneled on May 15, 1995, when her
Special Permit expires. Thus, she emphasized that she would be willing to enter into a contract
with Kimwa “provided the forty thousand cubic meter[s] w[ould] be withdrawn or completely
extracted and hauled before 15 May 1995[.]” Kimwa then assured Lucia that it would take only
two to three months for it to completely haul the 40,000 cubic meters of aggregates. Convinced
of Kimwa’s assurances, Lucia and Kimwa entered into the Agreement.
Spouses Paras added that within a few days, Kimwa was able to extract and haul 10,000 cubic
meters of aggregates. However, after extracting and hauling this quantity, Kimwa allegedly
transferred to the concession area of a certain Mrs. Remedios dela Torre in violation of their
Agreement. They then addressed demand letters to Kimwa. As these went unheeded, Spouses
Paras filed their Complaint. Kimwa asserted that the Agreement articulated the parties’ true 
intent that 40,000 cubic meters was a maximum limit and that May 15, 1995 was never set as a
deadline. Invoking the Parol Evidence Rule, it insisted that Spouses Paras were barred from
introducing evidence which would show that the parties had agreed differently.

On May 16, 2001, the Regional Trial Court rendered the Decision in favor of Spouses Paras.
The trial court noted that the Agreement stipulated that the allotted aggregates were set aside
exclusively for Kimwa.

On appeal, the Court of Appeals reversed the Regional Trial Court’s Decision. It faulted the trial
court for basing its findings on evidence presented which were supposedly in violation of the
Parol Evidence Rule. It noted that the Agreement was clear that Kimwa was under no obligation
to haul 40,000 cubic meters of aggregates by May 15, 1995. In a subsequent Resolution, the
Court of Appeals denied reconsideration to Spouses Paras.

ISSUE: Whether or not petitioners Spouses Paras were able to establish that respondent
Kimwa was obliged to haul a total of 40,000 cubic meters of aggregates on or before May 15,
1995

RULING: Yes. Respondent Kimwa is liable for failing to haul the remainder of the quantity which
it was obliged to acquire from petitioner Lucia Paras. Rule 130, Section 9 of the Revised Rules
on Evidence provides for the Parol Evidence Rule, the rule on admissibility of documentary
evidence when the terms of an agreement have been reduced into writing. However, a party
may present evidence to modify, explain or add to the terms of written agreement if he puts in
issue in his pleading:

(a )An intrinsic ambiguity, mistake or imperfection in the written agreement; (b) The failure of the
written agreement to express the true intent and agreement of the parties thereto; (c) The
validity of the written agreement; or (d) The existence of other terms agreed to by the parties or
their successors in interest after the execution of the written   agreement. The term “agreement”
includes wills.

In sum, two (2) things must be established for parol evidence to be admitted: first, that the
existence of any of the four (4) exceptions has been put in issue in a party’s pleading or has not
been objected to by the adverse party; and second, that the parol evidence sought to be
presented serves to form the basis of the conclusion proposed by the presenting party.

Contrary to the Court of Appeal’s conclusion, petitioners Spouses Paras pleaded in the
Complaint they filed before the trial court a mistake or imperfection in the Agreement, as well as
the Agreement’s failure to express the true intent of the parties. Further, respondent Kimwa,
through its Answer, also responded to petitioners Spouses Paras’ pleading of these issues. This
is, thus, an exceptional case allowing admission of parol evidence.

Considering how the Agreement’s mistake, imperfection, or supposed failure to express the
parties’ true intent was successfully put in issue in petitioners Spouses Paras’ Complaint (and
even responded to by respondent Kimwa in its Answer), this case falls under the exceptions
provided by Rule 130, Section 9 of the Revised Rules on Evidence. Accordingly, the testimonial
and documentary parol evidence sought to be introduced by petitioners Spouses Paras, which
attest to these supposed flaws and what they aver to have been the parties’ true intent, may be
admitted and considered.

Our evidentiary rules impel us to proceed from the position (unless convincingly shown
otherwise) that individuals act as rational human beings, i.e, “[t]hat a person takes ordinary care
of his concerns[.]” This basic evidentiary stance, taken with the supporting evidence petitioners
Spouses Paras adduced, respondent Kimwa’s awareness of the conditions under which
petitioner Lucia Paras was bound, and the Agreement’s own text specifying exclusive allotment
for respondent Kimwa, supports petitioners Spouses Paras’ position that respondent Kimwa
was obliged to haul 40,000 cubic meters of aggregates on or before May 15, 1995. As it
admittedly hauled only 10,000 cubic meters, respondent Kimwa is liable for breach of contract in
respect of the remaining 30,000 cubic meters.

12. Republic of the Philippines vs. Roque, G.R. No. 203610, 10 October 2016
Gonzalo Roque et, al are the owners of a parcel of land located in Quezon City.The Republic
through the order of President Marcos, wanted to expropriate the respondent’s land for the
National Government Center Projects.

The Respondents were reluctant at first, however due to Martial Law, they did now want to
disobey Marcos.

The parties had meetings and the Republic made the following representations:

a.      That the respondents will be receiving lower than the market value but will benefit
from the NGC as the adjacent lands the respondents also own will increase in value

b.      That the respondents will have a right to buy-back the property in case it abandons
the project

After several years, informal settlers began to occupy the land, the respondents thought that the
republic abandoned its plan and converted the land for socialized housing.

They were right. RA 9207 was passed and it stated that the 444 hectare NGC reservation will
be part of government’s socialized housing

PROCEDURE:

Respondent’s filed a complaint for the annulment of sale on the ground of force, fraud,
intimidation, or undue influence. They also asserted the buyback of the properties at the same
price they sold them since the Republic failed to develop the land for which it was expropriated

Republic and HUDCC argued that they are immune from suit as government instrumentalities
and the respondent’s freely entered the contract of sale absent any vitiation of consent.

Viloria (Q.C Assessor testified that in any event that the Government did not follow what was
talked about, the respondents would be able to reacquire their property.

RTC: Respondent’s favor

 CA: Affirmed

Republic filed a petition for review on certiorari

ISSUE/S:  WON an exception to parol evidence applies particularly Viloria and Gonzalo’s
statements

RULING: NO

Section 9, Rule 130 of the Rules of Court provides that a written contract is deemed to contain
all the terms agreed upon by the parties and no evidence of these terms is admissible other
than the contents of the contract. The parol evidence rule forbids any addition to the terms of a
written agreement by testimony showing that the parties orally agreed on other terms before the
signing of the document.

However, a party may present evidence to modify, explain, or add to the terms of a written
agreement if he puts in issue in his pleadings either:

(a)   an intrinsic ambiguity, mistake, or imperfection in the written agreement;

(b)   the failure of the written agreement to express the parties' true intent and agreement;

(c)    the validity of the written agreement; or

(d)   the existence of other terms agreed to by the parties or their successors in interest after the
execution of the written agreement.

The Court held that the parol evidence was inadmissible because, among others, the
respondents failed to expressly plead that the deeds of sale did not reflect the parties'
intentions. Instead, they merely alleged that the sale was subject to four conditions which they
tried to prove during trial.

The Court emphasized that this cannot be done because they failed to put in issue in their
pleadings any exception to the parol evidence rule.

FALLO:

WHEREFORE, we grant the Republic's petition and accordingly REVERSE and SET ASIDE the
Court of Appeal's July 4, 2012 decision and September 26, 2012 resolution in CA G.R. CV No.
93018.

SO ORDERED.

STATUTE OF FRAUDS

1. Rosa Lim vs. Court of Appeals, G.R. No. 102784, 28 February 1996
2. Aglibot vs. Santia, G.R. No. 185945, 05 December 2012
REYES, J.:

FACTS:
Private respondent-complainant Engr. Ingersol L. Santia loaned the amount of
P2,500,000.00 to Pacific Lending and Capital Corporation (PLCC) through its manager,
petitioner Fideliza J. Aglibot. The loan was evidenced by a promissory note dated July 1, 2003,
issued by Aglibot in behalf of PLCC, payable in one year subject to interest of 24% per annum.
Allegedly as a guaranty for the payment, Aglibot also issued and delivered to Santi eleven (11)
post-dated personal checks drawn from he own demand account maintained at Metrobank.
Upon presentment for payment, the checks were dishonored for having been drawn against
insufficient funds or closed account. 
Santia Demanded payment from PLCC and Aglibot  but neither heeded his demand.
Consequently 11 informations for violation of BP 22 were filed against Aglibot before the MTCC
Dagupan City.
Aglibot, alleged in her counter affidavit that the loan was already paid, and that Aglibot
promised to return the checks to her. But despite having paid already, Santia refused to return
them and had deposited the same resulting in their dishonor and that she did not receive any
notice of dishonor. For want of notice she cannot be held criminally liable under BP22.
The MTCC acquitted Aglibot of the criminal charge but ordered her to pay
P3,000,000.00 representing the value of the checks plus 12% interest per anum
On appeal the RTC removed the civil liability of Aglibot. The RTC reasoned that there
was failure to collect from the principal debtor, the contract between Aglibot and PLCC being
one of guaranty.
The CA restored the civil liability of Aglibot and ordered her to pay Santia the same
amount as ordered by the MTCC

ISSUE:
Whether or not Aglibot is liable to pay the amount of the checks to Santia despite the
lack of exhaustion of the properties of PLCC.

RULING: YES. There is no contract of guaranty and even if there is, it is unenforceable
under Article 1403(2) of the Civil Code.

The Court must reject Aglibot’s claim as a mere guarantor of the indebtedness of PLCC to
Santia for want of proof, in view of Article 1403(2) of the Civil Code, embodying the Statute of
Frauds, which provides:

Art. 1403. The following contracts are unenforceable, unless they are ratified:

xxxx

(2) Those that do not comply with the Statute of Frauds as set forth in this number. In the
following cases an agreement hereafter made shall be unenforceable by action, unless the
same, or some note or memorandum thereof, be in writing, and subscribed by the party
charged, or by his agent; evidence, therefore, of the agreement cannot be received without the
writing, or a secondary evidence of its contents:

a) An agreement that by its terms is not to be performed within a year from the making thereof;

b) A special promise to answer for the debt, default, or miscarriage of another;

Under the above provision, concerning a guaranty agreement, which is a promise to answer for
the debt or default of another, the law clearly requires that it, or some note or memorandum
thereof, be in writing. Otherwise, it would be unenforceable unless ratified, although under
Article 1358 of the Civil Code, a contract of guaranty does not have to appear in a public
document.Contracts are generally obligatory in whatever form they may have been entered into,
provided all the essential requisites for their validity are present, and the Statute of Frauds
simply provides the method by which the contracts enumerated in Article 1403(2) may be
proved, but it does not declare them invalid just because they are not reduced to writing. Thus,
the form required under the Statute is for convenience or evidentiary purposes only.

On the other hand, Article 2055 of the Civil Code also provides that a guaranty is not presumed,
but must be express, and cannot extend to more than what is stipulated therein. This is the
obvious rationale why a contract of guarantee is unenforceable unless made in writing or
evidenced by some writing. For as pointed out by Santia, Aglibot has not shown any proof, such
as a contract, a secretary’s certificate or a board resolution, nor even a note or memorandum
thereof, whereby it was agreed that she would issue her personal checks in behalf of the
company to guarantee the payment of its debt to Santia. Certainly, there is nothing shown in the
Promissory Note signed by Aglibot herself remotely containing an agreement between her and
PLCC resembling her guaranteeing its debt to Santia. And neither is there a showing that PLCC
thereafter ratified her act of "guaranteeing" its indebtedness by issuing her own checks to
Santia.

3. Iglesias Filipina Independiente vs. Heirs of Taeza, G.R. No. 179597, 03 February 2014

INTEPRETATION OF DOCUMENTS
1. Multinational Village Homeowner’s Association, Inc. vs. Ara Security and Surveillance
Agency, Inc., G.R. No. 154852, 21 October 2004
2. Bank of Commerce vs. Goldman Fielder, G.R. No. 191561, 07 March 2011

Facts:
Goodman Fielder International Philippines, Inc. (respondent), a corporation duly
registered and existing under the laws of the Republic of the Philippines, is engaged in
marketing of fats and oil shortening. Keraj Marketing Company (Keraj), represented by its
purported owner Sunil K. Amarnani (Amarnani), sought a distributorship agreement from
respondent. As a pre-requisite to respondent's consent, a credit line/bank guaranty in the
amount of ₱500,000.00 was required from Keraj. Amarnani thus applied for a credit line/bank
guaranty with the Bacolod branch of Bank of Commerce (petitioner).

Pending submission of the required documents for processing and approval of the credit
line, Amarnani requested the issuance of a conditional certification from petitioner's branch
manager Eli Aragon (Aragon) in this wise:
xxx
They are requiring from me a certification issued by my bank that I am arranging for a
credit line with my bank to be used if I cannot pay them. Please tell me the requirements for the
credit line so I can apply. All I need is a conditional certification that I am arranging for a credit
line from our bank. I will prepare the necessary documents you mentioned to me in your letter.

On October 2, 2000, respondent and Keraj entered into a Distributorship Agreement.

Aragon subsequently issued a similar letter (dated October 18, 20004) in favor of Bacolod RK
Distributors and Co., (Bacolod RK), an entity also allegedly owned by Amarnani, attesting to the
arrangement by Keraj for a credit line in the amount of ₱2,000,000.00, to be utilized for the
settlement of Keraj's accounts with respondent.

Both letters of Aragon contain a "check write" on the left side indicating the amount
applied for as credit line.1avvphil Keraj and Bacolod RK did not pursue their application for a
credit line, however, despite follow-up advice from petitioner.

A year later, respondent informed petitioner, by letter of October 24, 2001,  its intent to
claim against the bank guaranty issued to settle Keraj and Bacolod RK's unpaid accounts. By
another letter dated November 20, 2001, respondent advised petitioner its intent to collect the
amount of ₱1,817,691.30 representing Keraj and Bacolod RK's unpaid obligations.

Negotiations for the settlement of Keraj and Bacolod RK's obligations having failed,
respondent filed a complaint for collection of sum of money against Keraj, Amarnani, Bacolod
RK, and petitioner and its manager Aragon before the Regional Trial Court (RTC) of Pasig.

In defense, petitioner and Aragon claimed that the letters merely certified that Keraj and
Bacolod RK applied for the issuance of a bank guaranty, but no actual bank guaranty was
approved, both companies having failed to present the required documents for processing the
application. Bacolod RK, on the other hand, denied any involvement in the transaction between
Keraj and respondent.

RTC absolved Bacolod RK from liability, but faulted Keraj, Amarnani, Aragon and
petitioner. The Court of Appeals, by the assailed Decision of June 17, 2009,9 opined that
Aragon's letters clearly showed approval by petitioner of the application for a credit line.

Issue: Whether or not petitioner has issued a bank guaranty in favor of Armarnani

Ruling: No.

The resolution of the case hinges on what Aragon's statement in the letters sent to
respondent that "… we are pleased to inform you that said Corporation has arranged for a credit
line " conveys.

Section 13, Rule 130, Rules of Court on interpretation of an instrument provides:

SEC. 13. Interpretation according to circumstances - For the proper construction
of an instrument, the circumstances under which it was made, including the situation of
the subject thereof and of the parties to it, may be shown so that the judge may be
placed in the position of those whose language he is to interpret. 

A consideration of the circumstances under which Aragon's letter-certifications were issued is

thus in order.
 Amarnani's letter-request of August 21, 2000 for a conditional certification from Aragon
was granted two days later when Aragon issued the letter-certification addressed to respondent.
Within that period, it could not have been possible for petitioner to even process the application,
given that Amarnani had not even complied with the requirements as he, himself, indicated in
his letter-request to Aragon to "please tell [him] the requirements for the credit line so [he] could
apply."

The Distributorship Agreement between respondent and Keraj was forged on October 2,
2000 or 39 days after the issuance of the letter-certification, long enough for respondent to
verify if indeed a bank guaranty was, to its impression, granted.

By respondent's finance manager Leonora Armi Salvador's testimony, upon receipt of

the two letter-certifications,11 she concluded that they were bank guarantees considering their
similarity with other bank guarantees in favor of respondent by other distributors; and she made
inquiries with petitioner only after Keraj defaulted in the payment of its obligation to respondent.

In light of the foregoing circumstances, petitioner could not have conveyed that it was
issuing a bank guaranty in favor of Amarnani. Respondent's reliance on Aragon's use of a
"check writer," a machine used to input a numerical or written value impression in the "payment
amount field" of a check that is very difficult to alter, on the left side of each letter- certification,
was misplaced, what prevails being the wordings of the letter-certifications.13

WHEREFORE, the challenged Court of Appeals Decision of June 17, 2009 is

REVERSED and SET ASIDE. The complaint of respondent, Goodman Fielder International
Philippines, Inc. is, with respect to petitioner, Bank of Commerce, DISMISSED.

3. Dr. Cecilia De Los Santos vs. Dr. Priscilla Vibar, G.R. No. 150931, 16 July 2008

TESTIMONIAL EVIDENCE

1. People of the Philippines vs. Boniao, G.R. No. 100800, 27 January 1993
2. People of the Philippines vs. Eleuterio De Leon, et. al., G.R. no. 115367, 28
September 1995
Facts:
Issue:
Ruling:
3. People of the Philippines vs. Rolando Mendoza, G.R. No. 113791, 22 February 1996
4. People of the Philippines vs. Sorrel, G.R. No. 119332, 29 August 1997
5. People of the Philippines vs. Tuangco, G.R. No. 130331, 22 November 2000
Doctrine
A deaf-mute is not incompetent as a witness. All persons who can perceive, and perceiving, can
make known their perception to others, may be witnesses. Deaf-mutes are competent witnesses
where they (1) can understand and appreciate the sanctity of an oath; (2) can comprehend facts
they are going to testify on; and (3) can communicate their ideas through a qualified interpreter.

Facts:
- On January 4, 1995, the naked cadaver of Aurea Eugenio, a bookkeeper employed by
the CEU Credit Cooperative in Manila was found lying beside a creek about 50 meters away
from the national highway in Apalit. Her body bore multiple stab wounds and her private parts
were bloodied and showed signs of sexual abuse.
- 2 Informations were filed charging Adel Tuangco, Nelson Pineda and Sonny Tuangco
with the crimes of rape with homicide and theft.
- Adel Tuangco was arraigned but pleaded not guilty to both charges. In the course of the
trial accused Sonny Tuangco was apprehended and also pleaded not guilty. Nelson Pineda, Jr.
remains at large.
- The principal evidence against the accused consisted of the testimony of an eyewitness,
Silvestre Sanggalan, a deaf-mute. He gave his testimony through sign language, which was
interpreted by a sign language expert.
o At the night of the crime, he was inside a 'beer house' along the national highway. When
nighttime came, witness Sanggalan together with three (3) of his companions left the place and
proceeded to a rice field near the highway. Sanggalan described and identified the said three
(3) other persons as the accused in the case.
o The three accused later left the waiting shed and went to the rice field to follow a girl who
was wearing a long hair. They held her, took her belongings, and stabbed her multiple times.
o After the deceased fell down on the ground, 'Tatoo' inserted a bottle of Pidol cough
syrup into her private parts. Together, the three removed her clothes and took turns raping her.
o After raping the victim, Adel Tuangco took her bag, 'Tatoo' got her camera and cash
money while 'Baba got her ring, earrings and watch. After the incident, 'Tatoo' and 'Baba' went
to the rice field while Adel Tuangco went to the other direction. Earlier, during the incident, Adel
Tuangco, 'Tatoo' and 'Baba', on two occasions, asked witness Sanggalan to leave. However,
the witness merely hid behind the grasses and trees. When recalled to the witness stand on
January 17, 1996, Sanggalan identified accused Sonny Tuangco as the one he referred to as
'Baba'.
- RTC: Guilt of the accused as charged was established with the required quantum of
evidence and concluded that the three accused conspired to commit the crimes charged.

Issue:
W/N the alleged eyewitness account of Silvestre Sanggalan who is a deaf-mute and unschooled
be given full faith and credence

Ruling:
- Yes. A deaf-mute is not incompetent as a witness. All persons who can perceive, and
perceiving, can make known their perception to others, may be witnesses. Deaf-mutes are
competent witnesses where they (1) can understand and appreciate the sanctity of an oath; (2)
can comprehend facts they are going to testify on; and (3) can communicate their ideas through
a qualified interpreter.
- The imperfections or inconsistencies cited in appellants' brief arise from the fact that
there is some difficulty in eliciting testimony where the witness is deaf-mute, but these do not
detract from the credibility of his testimony, much less justify the total rejection of the same. 
- What is material is that he knew personally the accused-appellants, was with them on
the fateful night when the incident happened, and had personally witnessed the rape-slay and
theft three and (3 ) meters away from the scene. He did not waver in the identification of the
three accused despite rigorous cross-examination, and positively pointed to the accused-
appellants as the persons who raped and killed Eugenio and took her personal effects. 
- The trial court's assessment of the credibility of Sanggalan, whose testimony was found
to be candid and straightforward, deserves the highest respect of this Court.

Conviction affirmed.