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…296 SUPREME COURT REPORTS ANNOTATED
Republic vs. Intermediate Appellate Court
G.R. No. 74225. April 17, 1989.*
REPUBLIC OF THE PHILIPPINES, petitioner, vs.
INTERMEDIATE APPELLATE COURT, SIMPLICIO
BERDON, GAUDIOSA BERDON and LUIS BERDON,
respondents.
Criminal Law; Evidence; Forfeiture of unexplained wealth;
The law, RA 1379, creates a presumption juris tantum against the
public officer or employee who acquires property grossly
disproportionate to his income.–––Clear from these provisions is
that the law creates a presumption against the public officer or
employee who acquires property grossly disproportionate to his
income, i.e. that the property was unlawfully acquired. However,
this presumption is juris tantum. It may be rebutted by the public
officer or employee by showing to the satisfaction of the court that
his acquisition of the property was lawful.
Same; Same; Same; In case at bar, private respondents’
explanation of their acquisition of properties was satisfactory;
Findings of the appellate court supported by the evidence.–––In the
instant case, both the trial and the appellate courts had found
satisfactory the private respondents’ explanation of their
acquisition of the properties and consequently held that they do
not have any unexplained wealth as contemplated by the law. The
Solicitor General contends that the findings of the appellate court
are not supported by the evidence and, hence, should not bind the
Court. The Court finds the contention unmeritorious, as the
evidence indeed obviates a finding of unexplained wealth. The
Court has carefully gone over the evidence presented by private
respondents, and like the trial court and the Intermediate
Appellate Court, finds the acquisition of the subject properties
satisfactorily explained.
Same; Same; Same; Same; While the respondents had
acquired properties and constructed a house the costs of which
were disproportionate to their combined income from their
government employment, it had been proved that such were
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financed through a donation and loans.–––While respondent
spouses had acquired properties and constructed a house the costs
of which were disproportionate to their combined incomes from
their employment in the government, it had been probed that
such were financed through a donation and loans.
_______________
* THIRD DIVISION.
297
VOL. 172, APRIL 17, 1989 297
Republic vs. Intermediate Appellate Court
Same; Same; Same; Same; In determining whether or not
there is unexplained wealth under RA 1379 the courts are not
bound by the statements of assets and liabilities filed by the
respondents.–––The Solicitor General also makes much of the fact
that the statements of assets and liabilities filed by private
respondent Simplicio Berdon covering the years material to the
case did not accurately reflect the donation and the loans granted
to private respondent spouses and that Simplicio’s testimony in
effect contradicts the entries in said statements. It must be
emphasized, however, that in determining whether or not there is
unexplained wealth within the purview of R.A. No. 1379 the
courts are not bound by the statements of assets and liabilities
filed by the respondent. On the contrary, this statute affords the
respondent every opportunity to explain, to the satisfaction of the
court, how he had acquired the property in question [Sec. 5, R.A.
No. 1379].
Same; Same; Same; Same; Accuracy of entries in the
statements of assets and liabilities becomes material in criminal or
administrative proceedings for violation of RA 3019, or the Anti-
Graft and Corrupt Practices Act.–––The accuracy of entries in
statements of assets and liabilities becomes material in criminal
or administrative proceedings for violation of Sec. 7 of R.A. No.
3019, as amended (the “Anti-Graft and Corrupt Practices Act”),
which requires every public officer to file a “true, detailed and
sworn statement of assets and liabilities, including a statement of
the amounts and sources of his income, the amounts of his
personal and family expenses and the amount of income taxes
paid for the next preceding calendar year.” [See Sec. 9(b) of R.A.
No. 3019, as amended].
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Same; Same; Same; Same; Presumption under RA 1379 that
the properties were unlawfully acquired was successfully rebutted
by the private respondents through competent evidence.–––In sum,
the presumption under Sec. 2 of R.A. No. 1379 that the subject
properties were unlawfully acquired had been successfully
rebutted by private respondents through competent evidence.
Hence, the Intermediate Appellate Court did not err in affirming
the trial court’s decision dismissing the Republic’s petition.
PETITION to review the decision of the then Intermediate
Appellate Court.
The facts are stated in the opinion of the Court.
The Solicitor General for petitioner.
298
298 SUPREME COURT REPORTS ANNOTATED
Republic vs. Intermediate Appellate Court
Bernardito A. Florido for private respondents.
CORTÉS, J.:
The Republic assails as erroneous the decision of the
Intermediate Appellate Court affirming that of the Court of
First Instance which dismissed the petition for forfeiture of
unexplained wealth under Republic Act No. 1379 filed
against private respondents herein.
The dismissed petition charged Simplicio Berdon, an
Assistant Staff Civil Engineer assigned to Regional Office
No. VII of the Bureau of Public Highways in Cebu City,
with having acquired unexplained wealth in violation of
Republic Act No. 1379. It alleged that during the period
from 1963 to 1969 he and his wife Gaudiosa Mangubat
Berdon purchased parcels of land and constructed a house,
the purchase prices and costs of which were not
commensurate to their incomes, savings or declared assets.
Pleaded as defendants in the petition were Berdon, his
wife, and Luis Berdon, his father. Petitioner Republic of the
Philippines, which valued the unexplained wealth at
P124,495.82, thus sought the forfeiture of the properties
and the issuance of a writ of attachment. Upon orders of
the trial court, the properties enumerated in the petition
were attached.
During the course of the trial, the following evidence
was adduced by the parties:
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x x x
The evidence for the petitioner as testified to by Joselito Magno
and Atty. David Macayayong may be summarized as follows:
That on the basis of a letter complaint sent to the Office of the
President by a certain George Valde against Simplicio Berdon, the
Complaint and Investigation Office, Malacañang, Manila, sent
Joselito Magno and Atty. David Macayayong to conduct an actual
field investigation on Mr. Simplicio Berdon. Both investigators
went to Cebu City, Danao City and the Northern Towns of Bogo
and Borbon, Cebu and secured pertinent documents relative to
the case such as the service record of the respondent Simplicio
Berdon (Exh. ‘B’), copies of sworn statement of financial condition,
assets, income and liabilities of respondent-spouses Berdon,
Exhibit ‘C’ for the year
299
VOL. 172, APRIL 17, 1989 299
Republic vs. Intermediate Appellate Court
1962; Exhibit ‘D’ for 1963; Exhibit ‘E’ for 1965; Exhibit ‘F’ for 1967
and Exhibit ‘G’ for 1969. Copies of documents regarding the
acquisition of respondent Simplicio Berdon were also obtained, to
wit: Exhibit ‘H’ which is a Deed of Absolute Sale of a parcel of
land in favor of respondents-spouses Berdon for a consideration of
P3,700.00 executed on July 19, 1967; Exh. ‘I’ is a contract to sell
by installments of a parcel of land of the Singson Village
Subdivision, Cebu City, in favor of respondent Simplicio Berdon
for a monthly installment of P107.00, more or less, and with a
total consideration of P9,000.00; Exh. ‘J’ is a Deed of Absolute
Sale of a parcel of agricultural land dated September 6, 1967 also
in favor of respondent Simplicio Berdon for a consideration of
P3,000.00; Exh. ‘K’ is another Deed of Absolute Sale of a parcel of
land situated in Cebu City, containing an area of 623 square
meters in favor of respondent Simplicio Berdon for the sum of
P15,825.00 executed on November 9, 1967; Exh. ‘L’ is a Deed of
Sale With Right to Repurchase within a period of 5 years of a
parcel of agricultural land situated at Managasa, Borbon, Cebu
executed by Fidel Sepuleda in favor of respondent Simplicio
Berdon on November 27, 1967 for a consideration of P5,000.00;
Exh. ‘M’ is another Deed of Sale with Right to Repurchase within
the period of three (3) years of a parcel of agricultural land also
situated at Managasa, Borbon, Cebu, executed by Felicidad S.
Quiachon on December 7, 1967 in favor of respondent Simplicio
Berdon for a consideration of P3,000.00; Exh. ‘N-1’ is a Deed of
Absolute Sale of a parcel of agricultural land situated in
Managasa, Borbon, Cebu, executed by Elias M. Dosdos on
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December 17, 1967 in favor of respondent Simplicio Berdon for the
sum of P25,000.00; Exh. ‘Y’ is a Deed of Sale with Right to
Repurchase executed by Felicidad S. Guiachon on July 4, 1968 in
favor of respondent Simplicio Berdon for a sum of P5,000.00; Exh.
‘P’ is another Deed of Sale with Right to Repurchase executed by
Fidel Sepulveda on November 8, 1968 in favor of Simplicio Berdon
for the sum of P10,000.00 and Exh. ‘O’ refer to a Deed of Absolute
Sale dated November 18, 1969 of a parcel of land situated at Bogo,
Cebu in favor of respondent Simplicio Berdon; Exh. ‘S’ refer to a
Deed of Extrajudi-cial partition of a parcel of land acquired by
respondent Luis Berdon for a consideration of P1,000.00. This
parcel of land is included since the respondent Luis Berdon had
no known source of income and this land must have been
purchased by the respondent Simplicio Berdon but under the
name of respondent Berdon; and Exh. ‘R’ is a Declaration of Real
Property, a residential house of strong materials owned by
respondent Simplicio Berdon with an assessed value of
P34,480.00. An analysis and evaluation of respondent Simplicio
Berdon’s financial condition, income, assets and liabilities
reflected in Exhs. ‘C’, ‘D’,
300
300 SUPREME COURT REPORTS ANNOTATED
Republic vs. Intermediate Appellate Court
‘E’, ‘F’ and ‘G’ from 1962 to 1969 show an unexplained total
income of P105,495.92. Not included in the computation is the
sum of P1,000.00 which was the consideration of the parcel of
land purchased in the name of respondent Luis Berdon, so that
the total unexplained income of respondent Simplicio Berdon for
the years 1962 to 1969 is P109,495.92. The total amounts paid by
respondents spouses in the several real properties purchased
and/or constructed by them amounts to P101,305.00 as shown in
Exhs. ‘H’, ‘I’, ‘J’, ‘K’, ‘L’, ‘M’, ‘N-1’, ‘O’, and ‘P’, ‘Q’, and ‘R’ plus the
aforementioned sum of P1,000.00 purchased for a parcel of land in
the name of Luis Berdon (Exh. ‘S’). Since the money used to
purchase those real properties came from an unexplained income
these properties should be forfeited in favor of the state.
The evidence for the respondents as testified to by respondents
spouses Simplicio Berdon and Gaudiosa Mangubat Berdon is as
follows:
Respondent Mrs. Berdon is employed as a pharmacist at the
Danao General Hospital (Exh. ‘4’). Her parents who have several
landholdings in the municipality of Borbon, Cebu (Exh. ‘9’)
extended to respondents spouses a loan in the sum of P5,000.00
(Exh. ‘10-A’) to buy the house and lot in Danao City. Aside from
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this amount respondents spouses were given by Mrs. Berdon’s
mother the sum of P3,000.00 to repair said house which was
already very dilapidated. Respondents deny having owned a
moviehouse in Bogo, Cebu. Moreover, Mrs. Romualda Mangubat,
respondent Mrs. Berdon’s mother, owns the moviehouse.
Respondent Simplicio Berdon testified that he started in the
government service as construction foreman in the year 1955.
Since then he has been in the government service and rose from
the ranks when he was promoted to the position of Assistant Staff
Civil Engineer in the Ministry of Public Highways, Region 7.
Aside from respondents spouses’ income as government employees
they have also other income, and for which they have paid taxes
thereon under Presidential Decree 370 (Exhs. ‘12’ and ‘12-A’) and
Presidential Decree 631 (Exhs. ‘13’ & ‘13-A’). In respondents-
spouses’ statement of assets and liabilities as of December 31,
1967, the P20,000.00 disbursed as insurance premiums was
erroneous. This amount represents the face value of the insurance
policy of respondent Simplicio Berdon (Exh. ‘15’). Insurance
premiums should have been only P427.66 semi-annually (Exh.
‘15-A’). The respondent Simplicio Berdon also denied petitioner’s
allegation that the purchase price of the parcel of land he bought
from a certain Elias Dosdos was P45,000.00. The truth is that he
paid only P25,000.00 as shown in Exhs. ‘16’ & ‘16-A’.
301
VOL. 172, APRIL 17, 1989 301
Republic vs. Intermediate Appellate Court
The residential house of respondents spouses situated in Lahug,
Cebu City, actually costs about P25,000.00 as shown in the
building permit of said house (Exhs. ‘17’ and ‘17-A’) and
respondents spouses were able to obtain a real estate loan of
P14,000.00 from the GSIS to finance the construction of said
building (Exhs. ‘18’ & ‘19’). Sometime on November 7, 1967, the
respondent Simplicio Berdon obtained a personal loan from
former Congressman Ramon Durano in the sum of P100,000.00
under a Memorandum of Agreement (Exhs. ‘20’) which amount he
used to purchase the several parcels of agricultural lands in 1967
and 1968. The marriage contract of the respondents spouses
marked Exh. ‘21’ showed that Congressman and Mrs. Durano
stood as sponsors of the wedding of respondents spouses.
Defendants spouses had also obtained a loan from the
Development Bank of the Philippines (Exh. ‘22’) which they used
to purchase the lot in Bogo, Cebu containing an area of 359 sq. m.
(Exh. ‘23’) mentioned in petitioner’s Exh. ‘O’.
Respondent Luis Berdon was not presented. However, Exhibit
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‘11’ which is a medical certificate issued by the municipal health
officer of Bordon, Cebu was presented to show that the general
physical condition of the respondent Luis Berdon cannot sustain
long distance land travel. Exhs. ‘5’ and ‘9’ were also presented
showing that the respondent Luis Berdon is a retired school
teacher and a declared owner of several parcels of land situated in
Bordon, Cebu, respectively. (pp. 67-76, Record on Appeal). [IAC
Decision, pp. 3-7; Rollo, pp. 34-38.]
On the basis of the aforesaid evidence, the trial court
dismissed the petition, holding that respondents have no
unexplained wealth.
The Republic appealed the trial court’s decision to the
Intermediate Appellate Court. The appellate court, finding
no reversible error in the decision appealed from, affirmed
said decision. Said court found that, on the basis of the
evidence presented, “the assets acquired by the respondent-
spouses in excess of their income and receipts from their
employment in the Government were satisfactorily
explained, thus justifying the conclusion of the trial court
that respondent-spouses do not have unexplained wealth
subject to forfeiture under Republic Act 1379.” [IAC
Decision, p. 7; Rollo, p. 38.]
Hence, the instant recourse by the Republic to this
Court through a petition to review the appellate court’s
decision.
302
302 SUPREME COURT REPORTS ANNOTATED
Republic vs. Intermediate Appellate Court
Republic Act No. 1379, entitled “An Act Declaring
Forfeiture in Favor of the State of Any Property Found to
Have Been Unlawfully Acquired By Any Public Officer or
Employee and Providing for the Procedure Thereof,”
provides inter alia:
Sec. 2. Filing of petition.–––Whenever any public officer or
employee has acquired during his incumbency an amount of
property which is manifestly out of proportion to his salary as
such public officer or employee and to his other lawful income
from legitimately acquired property, said property shall be
presumed prima facie to have been unlawfully acquired. . . .
x x x
Sec. 6. Judgment.–––If the respondent is unable to show to the
satisfaction of the court that he has lawfully acquired the property
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in question, then the court shall declare such property, forfeited in
favor of the State, and by virtue of such judgment the property
aforesaid shall become property of the State: Provided, That no
judgment shall be released within six months before any general
election or within three months before any special election. The
Court may, in addition, refer this case to the corresponding
Executive Department for administrative or criminal action, or
both.
x x x
Clear from these provisions is that the law creates a
presumption against the public officer or employee who
acquires property grossly disproportionate to his income,
i.e. that the property was unlawfully acquired. However,
this presumption is juris tantum. It may be rebutted by the
public officer or employee by showing to the satisfaction of
the court that his acquisition of the property was lawful.
In the instant case, both the trial and the appellate
courts had found satisfactory the private respondents’
explanation of their acquisition of the properties and
consequently held that they do not have any unexplained
wealth as contemplated by the law.
The Solicitor General contends that the findings of the
appellate court are not supported by the evidence and,
hence, should not bind the Court. The Court finds the
contention unmeritorious, as the evidence indeed obviates a
finding of unexplained wealth.
303
VOL. 172, APRIL 17, 1989 303
Republic vs. Intermediate Appellate Court
The Court has carefully gone over the evidence presented
by private respondents, and like the trial court and the
Intermediate Appellate Court, finds the acquisition of the
subject properties satisfactorily explained.
While respondent spouses had acquired properties and
constructed a house the costs of which were
disproportionate to their combined incomes from their
employment in the government, it had been proved that
such were financed through a donation and loans, to wit:
(1) a P3,000.00 donation and a P5,000.00 loan from the
parents of Mrs. Berdon, who owned several parcels
of land and a moviehouse [TSN, October 3, 1979,
pp. 11-17; Exh. “9”];
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(2) a P14,000.00 loan from the Government Service
Insurance System [Exhs. “18” and “19”];
(3) a P6,000.00 loan from the Development Bank of the
Philippines [TSN, November 21, 1979, pp. 21-22;
Exhs. “22” and “23”]; and,
(4) a P100,000.00 loan from Congressman Ramon
Durano, a wedding sponsor of respondent spouses
[TSN, November 20, 1979, pp. 18-19; Exh. “21”], for
the purchase of agricultural land to be planted with
sugarcane (although only a total amount of
approximately P60,000.00 was actually released)
[TSN, November 21, 1979, pp. 17-19; Exh. “20”].
The Solicitor General also makes much of the fact that the
statements of assets and liabilities filed by private
respondent Simplicio Berdon covering the years material to
the case did not accurately reflect the donation and the
loans granted to private respondent spouses and that
Simplicio’s testimony in effect contradicts the entries in
said statements. It must be emphasized, however, that in
determining whether or not there is unexplained wealth
within the purview of R.A. No. 1379 the courts are not
bound by the statements
**
of assets and liabilities filed by
the respondent. On the contrary, this stat-
_________________
** The accuracy of entries in statements of assets and liabilities
becomes material in criminal or administrative proceedings for violation of
Sec. 7 of R.A. No. 3019, as amended (the “Anti-Graft and Corrupt
Practices Act”), which requires every public officer to file a “true, detailed
and sworn statement of assets and liabilities, includ-
304
304 SUPREME COURT REPORTS ANNOTATED
Republic vs. Intermediate Appellate Court
ute affords the respondent every opportunity to explain, to
the satisfaction of the court, how he had acquired the
property in question [Sec. 5, R.A. No. 1379.]
In sum, the presumption under Sec. 2 of R.A. No. 1379
that the subject properties were unlawfully acquired had
been successfully rebutted by private respondents through
competent evidence. Hence, the Intermediate Appellate
Court did not err in affirming the trial court’s decision
dismissing the Republic’s petition.
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WHEREFORE, no reversible error having been
committed by the Intermediate Appellate Court, the
instant petition is hereby DENIED and its decision dated
March 31, 1986 is AFFIRMED.
SO ORDERED.
Fernan (C.J.), and Feliciano, J., concur.
Gutierrez, Jr., J., No part.
Bidin, J., No part. I participated in the appealed
decision of the Court of Appeals.
Petition denied and decision affirmed.
Note.–––Findings of fact of the Court of Appeals are
final and conclusive and cannot be reversed as appeal is
based on substantial evidence. (Sese vs. Intermediate
Appellate Court, 152 SCRA 585.)
–––––o0o–––––
_______________
ing a statement of the amounts and sources of his income, the amounts
of his personal and family expenses and the amount of income taxes paid
for the next preceding calendar year.” [See Sec. 9(b) of R.A. No. 3019, as
amended].
305
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