Sycip v. CA, 134 SCRA 317, G.R. No.

L-38711, January 31, 1985

FRANCISCO SYCIP, petitioner,
vs.
HONORABLE COURT OF APPEALS and PEOPLE OF THE PHILIPPINES, respondents.

RELOVA, J.:

On August 25, 1970, the then Court of First Instance of Manila rendered a decision convicting the herein petitioner
Francisco Sycip of the crime of estafa and sentencing him to an indeterminate penalty of three (3) months of
arresto mayor, as minimum to one (1) year and eight (8) months of prision correccional, as maximum; to
indemnify complainant Jose K. Lapuz the sum of P5,000.00, with subsidiary imprisonment in case of insolvency;
and to pay the costs.

The then Court of Appeals affirmed the trial court's decision but deleted that part of the sentence imposing
subsidiary imprisonment.

The facts of the case as found by respondent appellate court read:

... [I]n April 1961, Jose K. Lapuz received from Albert Smith in Manila 2,000 shares of stock of the Republic Flour
Mills, Inc., covered by Certificate No. 57 in the name of Dwight Dill who had left for Honolulu. Jose K. Lapuz "was
supposed to sell his (the shares) at present market value out of which I (he) was supposed to get certain
commission." According to Jose K. Lapuz, the accused-appellant approached him and told him that he had good
connections in the Stock Exchange, assuring him that he could sent them at a good price. Before accepting the
offer of the accused-appellant to sent the shares of stock, Jose K. Lapuz made it clear to him that the shares of
stock did not belong to him and were shortly entrusted to him for sale. He then gave the shares of stock to the
accused-appellant who put them in the market.

Thereafter, Jose K. Lapuz received a letter from the accused-appellant, dated April 25, 1961 (Exhibit "A"), the
latter informing him that "1,758 shares has been sold for a net amount of P29,000.00," but that the transaction
could not be concluded until they received the Power of Attorney duly executed by Dwight Dill, appointing a
person to endorse the certificate of stock, and a resolution from the Biochemical Research Laboratory, Inc.,
authorizing the transfer of the certificate. Jose K. Lapuz signed his conformity to the contents of the letter.

Jose K. Lapuz declared that he "was able to secure a power of attorney of Dr. Dwight Dill, and gave it to the
accused-appellant." The power of attorney authorized the sale of 1,758 shares only; the difference of 242 shares
were given back to Biochemical Research Laboratory, Inc.

Of the 1,758 shares of stock, the accused-appellant sold 758 shares for P12,128.00 at P16.00 a share, for which
Jose K. Lapuz issued a receipt, dated May 23, 1961 (Exhibit "C"). On the same day, Jose K. Lapuz turned over to
Albert Smith the sum of P9,981.40 in payment of 758 shares of P14.00 a share (Exhibits "D" and "E").

On May 30, 1961, Jose K. Lapuz received a letter from the accused-appellant (Exhibit "F"), the latter informing
him that "although the deal (relative to the 1,000 shares) has been closed, actual delivery has been withheld
pending receipt of payment ..., I have chose(n) to return the shares ...," enclosing Certificate No. 955 for 500
shares, Certificate No. 952 for 50 shares in name of Felix Gonzales, and the photostat of Certificate No. 953 for
208 shares, which had been sold to Trans Oceanic Factors and Company, for which a check would be issued
"within the next few days." He promised to deliver the 242 shares as soon as he would have received them from
one Vicente Chua. "The next day (May 31, 1961), Jose K. Lapuz wrote a letter to the accused-appellant (Exhibit
"C"), stating therein, "Per our conversation this morning, I hereby authorize you to sell 1,000 shares of Republic
Flour Mills."

Later, the accused-appellant wrote a letter to Jose K. Lapuz, dated June 1, 1961 (Exhibit "I"), confirming their
conversation on that date that "500 shares out of the 1,000 shares of the Republic Flour ... has been sold," and
stating further that "pending receipt of the payment, expected next week, we are enclosing herewith our draft to
cover the full value of 500 shares." He asked in that letter, "Please give me the 50 shares in the name of Mr. Felix
Gonzales and the photostat of 208 shares in the name of Trans Oceanic Factors and Company."

The date of the letter (Exhibit "I") is disputed, the prosecution contending that it should be July 1, 1961, not June
1, 1961. The contention of the prosecution has the support of the date of the draft (Exhibit "J") mentioned in the
letter.

The accused-appellant sold and paid for the other 500 shares of stock, for the payment of which Jose K. Lapuz
issued in his favor a receipt, dated June 9, 1961 (Exhibit "H").

The draft (Exhibit "J") for P8,000.00, "the full value of the 500 shares' mentioned in the letter of the accused-
appellant (Exhibit "I"), was dishonored by the bank, for lack of funds. Jose K. Lapuz then "discovered from the
bookkeeper that he got the money and he pocketed it already, so I (he) started hunting for Mr. Sycip" (accused-
appellant). When he found the accused-appellant, the latter gave him a check in the amount of P5,000.00, issued
by his daughter on July 12, 1961 (Exhibit "K"). This also was dishonored by the bank for lack of sufficient funds to
cover it (Exhibits "K-l" and "K-2").

When Jose K. Lapuz sent a wire to him, telling him that he would "file estafa case (in the) fiscals office ... against
him' unless he raise [the] balance left eight thousand" (Exhibit "L"), the accused-appellant answered him by
sending a wire, "P5,000 remitted ask boy check Equitable (Exhibit "M"). But "the check was never made good," so
Jose K. Lapuz testified. He had to pay Albert Smith the value of the 500 shares of stock." (Petitioner's brief, pp.
58-62)

Coming to this Court on a petition for review on certiorari, petitioner claims that respondent appellate court erred
(1) in denying petitioner of a hearing, as provided under Section 9, Rule 124, Rules of Court; (2) in not upholding
due process of law (Sections 1 and 17), Article IV, Bill of Rights, Constitution; (3) in refusing to uphold the
provisions on compensation, Articles 1278 and 1279, Civil Code; (4) in not dismissing the complaint, even
granting arguendo, that compensation does not apply; (5) in not ruling that a consummated contract (Deed of
Sale, Exhibit '10') is not covered by the Statute of Frauds and that its decision is not in accordance with Section 4,
Rule 51, Rules of Court; and, (6) in ignoring the ruling case promulgated by this Honorable Supreme Court in
People vs. Benitez, G.R. No. L-15923, June 29, 1960, in its applicability to offenses under Article 315, paragraph
1 (b) of the Penal Code.

Petitioner in his first and second assigned errors argues that respondent Court of Appeals erred in denying him
his day in court notwithstanding his motion praying that the appealed case be heard. He invokes Section 9 of Rule
124 of the Revised Rules of Court and relates it to Sections 1 and 17 of Article IV of the New Constitution. This
contention is devoid of merit. Petitioner was afforded the right to be present during every step in the trial before
the Court of First Instance, that is, from the arraignment until the sentence was promulgated. On appeal, he
cannot assert as a matter of right to be present and to be heard in connection with his case. It is the procedure in
respondent court that within 30 days from receipt of the notice that the evidence is already attached to the record,
the appellant shall file 40 copies of his brief with the clerk accompanied by proof of service of 5 copies upon the
appellee (Section 3, Rule 124 of the Revised Rules of Court). Within 30 days from receipt of appellant's brief, the
appellee shall file 40 copies of his brief with the clerk accompanied by proof of service of 5 copies upon the
appellant (Section 4, Rule 124 of the Revised Rules of Court). Each party may be allowed extensions of time to
file brief for good and sufficient cause. Thereafter, the appellate court may reverse, affirm or modify the judgment,
increase or reduce the penalty imposed, remand the case for new trial or re-trial or dismiss the case (Section 11,
Rule 124 of the Revised Rules of Court). It is discretionary on its part whether or not to set a case for oral
argument. If it desires to hear the parties on the issues involved, motu propio or upon petition of the parties, it may
require contending parties to be heard on oral arguments. Stated differently, if the Court of Appeals chooses not
to hear the case, the Justices composing the division may just deliberate on the case, evaluate the recorded
evidence on hand and then decide it. Accused-appellant need not be present in the court during its deliberation or
even during the hearing of the appeal before the appellate court; it will not be heard in the manner or type of
hearing contemplated by the rules for inferior or trial courts.

In his third and fourth assigned errors, petitioner contends that respondent Court of Appeals erred in not applying
the provisions on compensation or setting-off debts under Articles 1278 and 1279 of the New Civil Code, despite
evidence showing that Jose K. Lapuz still owed him an amount of more than P5,000.00 and in not dismissing the
appeal considering that the latter is not legally the aggrieved party. This contention is untenable. Compensation
cannot take place in this case since the evidence shows that Jose K. Lapuz is only an agent of Albert Smith
and/or Dr. Dwight Dill. Compensation takes place only when two persons in their own right are creditors and
debtors of each other, and that each one of the obligors is bound principally and is at the same time a principal
creditor of the other. Moreover, as correctly pointed out by the trial court, Lapuz did not consent to the off-setting
of his obligation with petitioner's obligation to pay for the 500 shares.

Anent the fifth assigned error, petitioner argues that the appellate court erred in not ruling that the deed of sale is
a consummated contract and, therefore, not covered by the Statute of Frauds. It must be pointed out that the
issue on whether or not the alleged contract of sale is covered by the Statute of Frauds has not been raised in the
trial court or with the Court of Appeals. It cannot now be raised for the first time in this petition. Thus, there is no
need for respondent court to make findings of fact on this matter.

With respect to the sixth assigned error, petitioner points out that the Court of Appeals erred in affirming the
decision of the trial court convicting him of the crime charged. Petitioner mentions that in People vs. Benitez, G.R.
No. L-15923, June 30, 1960 (108 Phil. 920), We have ruled that to secure conviction under Article 315, paragraph
1 (b), Revised Penal Code, it is essential that the following requirements be present: (a) existence of fraud; (b)
failure to return the goods on demand; and (c) failure to give any reason or explanation to the foregoing. He
claims that nowhere in the decision was he found to have any particular malice or intent to commit fraud, or, that
he failed to return the shares on any formal demand made by Jose K. Lapuz to him, and/or was he unable to
make any explanation thereto. On this score, We only have to quote from the decision of the respondent court, as
follows:

The "malice or intent to commit fraud" is indicated in that part of the decision herein before quoted, that is, the
accused- appellant "received from Jose K. Lapuz the 500 shares in question (a part of 1,758 shares) for sale, and
that, although the same had already been sold, the accused ... failed to turn over the proceeds thereof to Jose K.
Lapuz." The abuse of confidence in misappropriating the funds or property after they have come to the hands of
the offender may be said to be a fraud upon the person injured thereby (U.S. vs. Pascual, 10 Phil. 621).

xxx xxx xxx

The accused-appellant having informed Jose K. Lapuz that the "500 shares out of the 1000 shares ... has been
sold" (Exhibit "I"), for which he issued a draft for P8,000.00 (Exhibit "J"), the latter cannot be expected to make a
demand for the return of the 500 shares. His demand was for the payment of the shares when the draft was
dishonored by the bank.

The delivery of a worthless check in the amount of P5,000.00 by the accused-appellant to Jose K, Lapuz, after the
latter's "hunting" for him is even a circumstance indicating intent to commit fraud. (pp. 48-49, Rollo)

xxx xxx xxx

His explanation of his inability to return the 500 shares of stock is not satisfactory. ... If it is true that he gave the
500 shares of stock to his creditor, Tony Lim, he is nonetheless liable for the crane of estafa, he having received
the 500 shares of stock to be sold on commission. By giving the shares to his creditor, he thereby committed
estafa by conversion. (pp. 49-50, Rollo)

Indeed, Jose K. Lapuz demanded from petitioner the amount of P5,000.00 with a notice that in the event he
(petitioner) would fail to pay the amount, Lapuz would file an estafa case against him.

By and large, respondent Court of Appeals has not overlooked facts of substance and value that, if considered,
would alter the result of the judgment.

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


SO ORDERED.

Teehankee (Chairman), Melencio-Herrera, Gutierrez, Jr. and De la Fuente, JJ., concur.

Plana and Alampay, JJ., took no part.

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
March 28, 1969
G.R. No. L-22094
THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
SANTIAGO TATLONGHARI, ET AL., defendants;
SANTIAGO TATLONGHARI, AMBROSIO TATLONGHARI, FAUSTO MERCADO, AGAPITO MERCADO and
CIRILO CUETO, defendants-appellant.
Ezekiel Grageda and Romulo B. Reyes for defendants-appellants.
Office of the Solicitor General for plaintiff-appellee.
REYES, J.B.L., J.:
Appeal from the judgment of conviction of the Court of First Instance of Camarines Sur, in Criminal Case No.
3590, sentencing therein accused Santiago Tatlonghari, Fausto Mercado, Agapito Mercado, Tiburcio Lalogo and
Cirilo Cueto to life imprisonment and the accused, Ambrosio Tatlonghari, to suffer the indeterminate penalty of
from six years, one month and eleven days of prision mayor to twelve years, five months and eleven days
of reclusion temporal; all of them to indemnify the heirs of the deceased Victor Eje, in the sum of P6,000.00, and
to pay the cost of the proceeding.
Arraigned before the Court of First Instance of Camarines Sur, Santiago Tatlonghari, his son, Ambrosio
Tatlonghari, Fausto Mercado, his son, Agapito Mercado, Tiburcio Lalogo and Cirilo Cueto pleaded not guilty to the
charge of murder recited in the information, as follows:
That on or about August 25, 1954 in the evening in the barrio of Port Junction, municipality of Ragay, province of
Camarines Sur, Philippines and within the jurisdiction of this Honorable Court, said accused, armed with bolos,
confederating, conspiring, and mutually helping each other, and with evident intent to kill Victor Eje and by means
of treachery, did then and there intentionally, wilfully criminally, and feloniously, attack and assault said Victor Eje
with stones and bolos, as a result of which the victim received contusions and wounds in different parts of his
body, to wit:
1. Large gaping wound located at the temple left side, about 1 inch in diameter with complicated fracture
of the skull exposing a portion of the brain thereat;
2. Stab wound about 5 inches in length extending from the upper portion of the forehead midline to the
upper jaw, traversing the left side of the nose. It divides the face into two and also dividing the bones of
the face on its path. The upper jaw is also divided into two thus loosening the front teeth of same;
3. Stab wound about 3 inches in length located at the outer canthus of the right eye piercing the skull;
4. Stab wound about 5 inches in length located at the jaw left side severing the attachment of the
mandible from the rest of the skull and cutting the lower lobe of the left ear;
5. Stab wound at the neck just below the chin cutting the trachea esophagus, and all the vital blood
vessels thereat reaching as far as the vertebral column;
6. Long stab wound extending from the median portion of the upper portion of the sternum down to the
umbilicus, exposing outside the greater momentum small intestine and the lower portion of the liver;
7. Stab wound about 3 inches in length incising the skin exposing the bones of the left hand; and
8. Contusion with swelling at the back right side and as a consequence thereof Victor Eje died
instantaneously.
The aggravating circumstances of treachery nocturnity, and superior strength were present in the
commission of the crime.
The prosecution tried to establish its case through the testimonies of witnesses:
FELIMON ALMARES, who declared that at about 7:30 in the evening of 25 August 1954, in the barrio of Port
Junction, Ragay, Camarines Sur, while he and Victor Eje were walking along the railroad track towards their
homes in barrio Catabangan, they met the accused, Santiago Tatlonghari and Tiburcio Lalogo, in front of the
house of one Marcos Nacionales; that thereupon, Santiago Tatlonghari shouted, "listo kayo mga bata" (get ready,
boys), after which stones rained on them hitting him (Almares) on the left knee;[[1]] that thus hurt, the witness
rolled to the right side of the railroad track and hid himself among the talahib and cogon grasses that abound in
the area; that before rolling to safety, he saw Santiago Tatlonghari and Tiburcio Lalogo hitting with bolos Victor
Eje who was then lying on the ground with his two hands raised upward;[[2]] that he saw the stabbing because
there were beams of light coming from the houses of Catalino Arellano, Marcos Nacionales and Juan Corod,
which were within the vicinity;[[3]] that Santiago Tatlonghari had also a flashlight in his left hand which was
focused on the victim while the latter was being hit with bolos;[[4]] that thereafter, Fausto Mercado, Agapito
Mercado, Cirilo Cueto and Ambrosia Tatlonghari appeared from the cogon grasses along the railroad track and,
with Santiago Tatlonghari and Tiburcio Lalogo, viewed the prostrate body of Victor Eje then they left the place
together, going eastward in the direction of the railroad station;[[5]] that when the group was gone he left his
hiding place and headed for home. He related the incident to Pedro Comia and Epifanio Bico when they came to
see him a little later.
MARCOS NACIONALES testified that, about 7:30 in evening of 25 August 1954, he was taking his supper with his
family in their house near the railroad track in Port Junction when he heard the sound of falling objects in front of
their house; that he finished his meal and then peeped through the window; that he saw Santiago Tatlonghari
standing near the rails with a bolo in his hand and near his feet lay the body of a person;[[6]] that Santiago
Tatlonghari also shouted in Tagalog, "Come out those who sympathize with Victor Eje this will be your last"; that
he noticed standing on the eastern side of his house Ambrosia Tatlonghari and Agapito Mercado, while on the
western side stood three persons who he failed to recognize on account of darkness;[[7]] that when he, his wife
and children went down their house and ran towards the house of barrio lieutenant Pedro Comia, they were
accosted by Santiago Tatlonghari who focused his flashlight on them and inquired if they (the witness and
companions) were enemies, to which they a negative; that upon reaching the house of Pedro Comia, they
informed the latter of the killing near their house; corpse of Victor that the following morning, they saw the corpse
of Victor Eje on the spot where the night before the witness had seen Santiago Tatlonghari standing with a bolo in
his hand. [[8]]
FORTUNATO ARANAS, on the other hand, declared that at about 8 o'clock in the evening of 25 August 1954,
while he was resting at the front yard of his house, Santiago Tatlonghari, Fausto Mercado, and Agapito Mercado
passed by going westward in the direction of Catabangan; that Santiago Tatlonghari was then carrying a bolo and
a piece of wood; that when the trio was in front of the house of Catalino Arellano,[[9]]Santiago Tatlonghari
shouted, "sigue mga bata", and with this followed the sound of falling objects; that, after some time, Cirilo Cueto,
Tiburcio Lalogo, Agapito Mercado, Fausto Mercado, and Ambrosio Tatlonghari returned going towards Ragay that
Santiago Tatlonghari, who was the last to pass by, warned him, "don't walk without light, or you might be mistaken
for someone else. Victor Eje is dead already;" [[10]] that later, Pedro Comia and Epifanio Bico passed and
proceeded to the place where the body of Victor Eje was found.
PEDRO COMIA, barrio lieutenant of Port Junction, testified that in the evening of 25 August 1954, he was tending
his store when Marcos Nacionales and his wife, both trembling, arrived and informed him of overhearing people
quarreling in front of their house; that he then took his flashlight and proceeded to the place indicated by the
couple; that he found in front of the house of Nacionales the corpse of Victor Eje with stab wounds; that after he
had looked around the place he decided to go home; that on the way he saw Santiago Tatlonghari, Ambrosio
Tatlonghari, Cirilo Cueto, Tiburcio Lalogo, Agapito Mercado and Fausto Mercado standing in front of the house of
Fortunato Aranas; [[11]] that he was able to recognize them because, when he focused his flashlight on the group,
they all faced him. [[12]]
DR. FELIX MACALINO, a charity physician of Sipocot, Camarines Sur, who conducted the autopsy on the body of
Victor Eje testified that the deceased received seven stab wounds and a contusion that by the nature of four of the
wounds, they must have been inflicted while the victim was in a lying position; that any of the six wounds
sustained by the victim could have caused the death; that the wounds were inflicted by a sharp instrument like a
bolo, while the contusion (at the back) could have been caused by a blunt object like a stone.
The defense of the accused is alibi and that other persons committed the crime.
SANTIAGO and AMBROSIO TATLONGHARI testified that on the night of 25 August 1954 they were locked in the
municipal jail of Sipocot, Santiago having hurt one Pedro Gallano after several rounds of gin at the Sipocot
railroad canteen that afternoon. They were allegedly released only at about nine o'clock of the following morning
(26 August).
The above allegation was corroborated by Sgt. REYNALDO ZAMORA of the Sipocot municipal police, who
testified that at about two o'clock in the afternoon of 25 August 1954, having received information that there was
trouble in the railroad station, he went there and found Santiago and Ambrosio Tatlonghari drunk; that he brought
the two to the municipal jail to sober up; that when he returned to the municipal building at about seven o'clock in
the evening he informed the two that they could already go home, but the latter requested that they be allowed to
stay because there was no more train trip at that time; that, by mistake, the jail was locked, so that Santiago and
Ambrosio Tatlonghari remained inside until he (the witness) reported for duty at about nine o'clock of the following
day. The incident allegedly was recorded in the police blotter (Exhibit 1).
Accused FAUSTO MERCADO, for his part, claimed that on 25 August 1954 he went to the house of Artemio
Barento in barrio Sinuknipan, Del Gallego, Camarines Sur, upon learning that his godchild (Artemio's soil) was ill;
that he arrived in the house of Artemio Barento at about 4 o'clock in the afternoon and stayed there until 4:30 in
the morning of 26 August 1954.
ARTEMIO BARENTO, confirming the allegation of Mercado, declared that the latter was in his house from 4
o'clock in the afternoon of 25 August 1954 until 4:30 in the morning of the next day.
Accused AGAPITO MERCADO testified that at about 6 o'clock in the afternoon of 25 August 1954, he attended a
party held in the house off Eriberto Juri in Barrio Inangdawa, Ragay, Camarines Sur; that the dancing lasted until
about 2 o'clock in the morning of 26 August 1954; that when the party broke up he stayed in the house of Juri until
about 6 o'clock in the morning when he took the train for Port Junction.
ERIBERTO JURI corroborated the testimony of Agapito Mercado. He declared that on 25 August 1954 Mercado
was attending the dance that followed the baptism of his only child; that the party started at about 6:30 in the
afternoon of 25 August 1954 and broke up at about 2 o'clock in the morning of the following day (26 August); that
for the duration of the party Agapito Mercado was in their house. He left only in the morning of 26 August.
Accused CIRILO CUETO, a blacksmith, has this to say: that from 4 o'clock in the afternoon of 25 August 1954
until the morning of the next day he never left his house that he was then with his wife, children and one Benito
Javier; that he learned of the death of Victor Eje only in the morning of 26 August 1954 when he fetched water for
their use in the house.
BENITO JAVIER, a farmer of Del Rosario, Lupi, Camarines Sur, testified that on 25 August 1954 he went to the
house of Cirilo Cueto to have his plow repaired, arriving there at about 11 o'clock in the morning; that as the
ordered work was not finished, he decided to pass the night in Cueto's house; that from the time Cueto stopped
working on his plow at about 6:30 in the afternoon until the time the witness went to sleep at past 8 o'clock Cueto
was in his house; that he (Javier) left Port Junction at about 7 o'clock in the morning of 26 August 1954, after he
was told by Cueto that the repair of the plow cannot be continued because a relative of his, referring to Victor Eje,
had died.
Accused TIBURCIO LALOGO like the others, denied the charge that he took part in the commission of the crime.
He testified that, on the night in question, he was in his house with his wife and father-in-law; that he did not go
out of the house the whole evening and learned of the death of Victor Eje only in the morning of 26 August 1954
from people passing by their house. The defense then presented the testimonies of GREGORIO CANTOR and
MARIANO PAET to the effect that they were in the house of Juan Corod when the stabbing incident happened;
that they recognized the assailants of Victor Eje to be Porfirio Atienza, Victoriano Ragodon, and another fellow
who was unknown to them; that after the trio left Epifanio Bico and Pedro Comia arrived and placed a kerosene
lamp near the cadaver of Eje.
PORFIRIO ATIENZA, a prisoner serving sentence in the National Penitentiary, also took the witness stand for the
defense. He declared having known the deceased, Victor Eje who had a quarrel with his father during the
Japanese occupation; that on 25 August 1954, when Eje met him at the railroad station, the former asked him if
he still bore grudge against him (Eje); that Eje slapped him, but when Eje drew his bolo from its scabbard he
(Atienza) also took hold of his bolo and hit the former successively, killing him; that, at the time, he was
accompanied by Victoriano Ragodon and Abraham Mariano who did not take part in the altercation but merely
saw to it that the companions of Eje would not be able to help the latter.
On cross-examination, however, this witness admitted having been arrested by the Manila Police on 20 August
1954 at the North Harbor in Manila for concealment of abalisong; that he was tried therefor, was convicted, and
was confined at the Manila City Jail for about 20 days. [[13]] The prosecution, likewise, presented evidence that
for this offense Atienza was sentenced to a fine of P25.00, with subsidiary imprisonment in case of insolvency;
that he was arrested and confined in the Manila City Jail on 20 August 1954 and was released only on 8
September 1954 (Exhibits B & C, Rebuttal).
On 11 April 1960, the trial court rendered judgment, finding the accused to have acted in conspiracy in committing
the crime; declared them guilty of murder and sentenced them to life imprisonment, except Ambrosio Tatlonghari
who, on account of minority,[[14]] was decreed to suffer the penalty of from six years, one month and eleven days
ofprision mayor to twelve years, five months and eleven days of reclusion temporal; to indemnify the heirs of the
deceased; and to pay the costs.
All the accused, except Tiburcio Lalogo who jumped bail before the sentence was read in the lower court and has
remained at large since then, appealed to this Court.
The issues raised by the appellants in this instance boil down to one thing: whether or not the court a quo was
correct in finding herein appellants Santiago Tatlonghari, Fausto Mercado, Agapito Mercado and Cirilo
Cueto [[15]] guilty of murder for the death of Victor Eje and in imposing upon them the corresponding penalty
therefor. Considering the evidence presented in this case, we will take the appeal of Santiago Tatlonghari
separately. The finding of the trial court on the guilt of this appellant was based on his identification by the
prosecution witnesses as one of the assailants of the deceased, Victor Eje, Felimon Almares positively named
him as the person who gave the signal to hidden companions, which signal was followed by the "raining" of stones
on him, and the deceased; that he was one of the two persons who stabbed Victor Eje as the latter lay on the
ground with hands raised upward. Marcos Nacionales declared having seen this appellant with bolo in hand
standing near the fallen body of a person[[16]] and heard him daring any sympathizer of Eje to come out; that
when he and his family went down their house to go to the house of barrio lieutenant Pedro Comia, it was this
appellant who accosted them and inquired if they were enemies. Fortunato Aranas and Pedro Comia also testified
having seen appellant Tatlonghari, with his five co-accused, in the vicinity of the crime immediately before and
after the slaying incident took place.
It is true that the defense presented testimonial evidence and a police blotter (Exhibit 1) to prove that on the night
of the killing appellant Santiago Tatlonghari and his son, Ambrosio were inside the Sipocot municipal jail, and that
somebody else committed the crime. In disregarding such evidence for the accused and giving credence to the
version of the prosecution instead, the trial court duly considered the facts that the entries in the police blotter,
Exhibit 1, were, not duly accomplished, [[17]] thus making them unreliable; that with the admission of Atienza and
the rebuttal evidence of the prosecution, the defense theory that the crime was committed by said witness
(Atienza) was totally discredited. Upon the other hand, the prosecution witnesses were observed by the trial court
to have testified in a natural and straightforward manner, indicating that they could be telling the truth.
Of course, it is claimed for appellant Santiago Tatlonghari that the prosecution witnesses testified the way they did
because of personal grudges against him. It is contended that witness Almares suspected Tatlonghari of having
informed the Philippine Constabulary on the former about a carbine, which information resulted in the confiscation
of the weapon by the authorities; that witness Nacionales begrudged Tatlonghari's refusal to allow his son,
Ambrosia to be married to a niece of said witness; that Fortunato was under the influence and dictation of Mariano
de Torres, who was confined in the PC stockade in 1952 for Huk activities, upon information furnished by
Tatlonghari; and that witness Pedro Comia was one of the group that petitioned for the transfer of certain teachers
from the barrio school, which petition was opposed by Tatlonghari, then barrio lieutenant and president of the
Parent-Teachers Association.
We find the allegation not worthy of belief. The reasons for the alleged individual grudges of the witnesses against
appellant being so flimsy and uncertain, it is incredible that they could constitute as sufficient motive for an
average individual to conjure up so serious a charge as murder and thereby send an otherwise innocent man to a
long stretch of prison term. At any rate, the prosecution witnesses were subjected to cross-examination by
counsel for the defense, and the falsity of their declarations, if indeed there were, could have been ferreted out
and exposed. As it is, the trial judge even found the declarations of said witnesses more credible and rang of truth.
Neither is the defense helped by the testimonies of witnesses Porfirio Atienza, Gregorio Cantor and Mariano Paet
that the crime was committed by Atienza and two others. On the contrary, the establishment of the fact that
Atienza was confined in the Manila City Jail on 25 August 1954 and, therefore, could not have been in Camarines
Sur slashing Victor Eje to death with a bolo, worked only to weaken further the alibi of the accused.
The issue in the case being hinged on the credibility of witnesses, the ruling of the court below must be sustained.
For, in the absence of proof that there has been misappreciation of evidence, [[18]] and there is no such proof
in this case the conclusion of the trial judge, who had the opportunity of observing the demeanor and conduct
of the witnesses while testifying, deserves the respect of the reviewing tribunal.
Counsel de officio for appellant Santiago Tatlonghari advances the argument that, if at all, the latter should only
be found guilty of homicide, the prosecution allegedly having failed to prove that treachery, nocturnity and able of
superior strength attended the commission of the crime. It is claimed that there was no treachery, because when
Santiago signalled to his "boys" to get ready Victor Eje was already sufficiently warned of the impending attack on
him; there was also no showing that the accused purposely sought nighttime for the commission of the crime, and
that they took undue advantage of superior strength.
There is no merit in the argument. The fact that the attack on the victim was preceded by a cry or signal from this
appellant does not make such attack less treacherous. It must be remembered that the utterance was not directed
to the deceased and his companion, who were then walking along the railroad track apparently unaware of the
danger lying before them; and the falling of stones that followed and the attack on Eje happened in such close
succession that it is safe to conclude that the latter must have been completely taken by surprise. To be sure, an
assault made so suddenly and on a victim that lay on the ground, and who could do nothing more than raise his
two arms upward perhaps in the futile attempt to cover himself against the blows of his assailants, can not be
anything but an attack on a totally defenseless person, and characterized by treachery. [[19]] On the other hand,
the circumstances of nighttime and abuse of superior strength were not considered by the court below. Thus,
notwithstanding the finding of the presence of the qualifying circumstance of treachery, the penalty was only
imposed in its medium period life imprisonment denoting the absence of any circumstance mitigating or
aggravating the offense.
As regards the appeal of Fausto Mercado, Agapito Mercado, Ambrosio Tatlonghari and Cirilo Cueto, the issue
involved again depended on credibility.
The prosecution presented the declarations of witnesses Felimon Almares, Marcos Nacionales, Fortunate Aranas,
and Pedro Comia to prove that herein appellants were with accused Santiago Tatlonghari and Tiburcio Lalogo on
the occasion Victor Eje was slain. For its part, the defense tried to establish that, on the night in question,
appellants were in some place other than Port Junction.
The trial court, giving due weight to the evidence for the prosecution, held that appellants Ambrosia Tatlonghari,
Fausto Mercado, Agapito Mercado, and Cirilo Cueto were with the other accused when the crime took place.
There is no plausible reason for us to set aside this ruling, not only because it is essentially a resolution on the
credibility of witnesses, the correctness of which we have already upheld, but also because of the well-recognized
rule that alibi, the weakest of defenses, can not prevail over the positive identification of the accused by
witnesses.
The only point to be considered then is, conceding that herein appellants wherein the group of Santiago
Tatlonghari on the night when Victor Eje was waylaid and slain, whether or not the trial court was correct in
holding them equally guilty of murder and in sentencing them to life imprisonment.
Admittedly, nobody saw Ambrosio Tatlonghari, Fausto Mercado, Agapito Mercado, and Cirilo Cueto deliver blows
to the deceased, or perform some other act directly linked to the cause of death of the victim. All that the record
shows is that these appellants were with Santiago Tatlonghari and Tiburcio Lalogo shortly before, during, and
after the killing of Victor Eje and that they hurled stones at the latter and his companion, without further
aggression. When and where these appellants met the actual killers prior to the crime, or what was agreed upon
with them, does not appear. No evidence exists that they were armed on the occasion, or that these appellants
had adequate reason to wish the deceased out of the way. From this paucity of established facts, we do not feel
justified in concluding that these accused previously conspired and concerted with the slayers to take the life of
Victor Eje. In the absence of clear proof that the killing was in fact envisaged by them, they can not be held
responsible therefor as co-conspirators, there having been no satisfactory showing that the killing was done in
furtherance of the conspiracy (People vs. Basisten, 47 Phil. 493; People vs. Cerdenia, 51 Phil. 393; People vs.
Carillo, 85 Phil. 611; People vs. Daligdig 89 Phil. 598).
The record is clear, however, that, although they had not acted pursuant to previous concert, the appellants,
Fausto Mercado, his son, Agapito, Ambrosio Tatlonghari, and Cirilo Cueto, did knowingly aid the actual killers by
casting stones at the victim, and distracting his attention. However, their cooperation, although done with
knowledge of the criminal intent, was not indispensable to the murderous assault by Santiago Tatlonghari and the
fugitive Tiburcio Lalogo, for which reason the four should be held liable only as accomplices in the murder of the
late Victor Eje and sentenced to a penalty one degree lower to that of the principal participants in the crime
(except in the case of Ambrosio Tatlonghari whose appeal has been previously dismissed for failure to file his
brief). In People vs. Ubia et al., 97 Phil. 515, 534, this Court ruled as follows:
.... The act of Romero Pagulayan in following the deceased Carag as the latter went to Bangag, and thus assuring
the conspirators of his presence at said place, is also merely an act of complicity. Neither did they in any manner
induce the commission of the offense; they joined the conspirators after the latter had decided to commit the act.
Under the circumstances, they do not fall under any of the three concepts defined in Article 17 of the Revised
Penal Code, and may only be considered guilty as accomplices. The same conclusion is strengthened by the
principle that when doubt exists as to whether persons acted as principals or accomplices, the doubt must be
resolved in their favor and they should be held guilty only as accomplices (People vs. Tamayo, 44 Phil. 38; People
vs. Bantagan, 54 Phil. 834).
In the basic decision of People vs. Tamayo, 44 Phil. 38, this Court, after an exhaustive review of the authorities,
laid down the principle in the following words (cas. cit. pages 52 and 53):
But while the authorities above collated conclusively show that a man cannot be an accomplice in a crime without
participating in the criminal design of the principal, something remains to be said about the acts from which such
participation in the criminal design can be proved. Upon this point it is undoubtedly true that concert of action at
the moment of consummating the homicide, and the form and manner in which assistance is rendered, may
determine complicity where it would not be otherwise evident. Thus, in a decision of December 29, 1884, the case
was that after two individuals had beaten another and thrown him to the ground, the accused got upon him,
trampling his breast and face As a consequence of the injuries received from the beating by the first two, the
injured person died. It was held by the supreme court of Spain that the accused was guilty in the character of
accomplice, saying: "Although the accused did not intervene in giving the mortal injury caused by the cudgel for
which reason he is not comprehended in article 13, he simultaneously trampled upon the deceased who was on
the floor; and this simultaneity of acts contributing to the homicide makes him an accomplice in the same."
(Decision, Dec. 29, 1884; Viada vol. 1, page 375.)
After analysis of other decisions of the Spanish Supreme Court, this Court then concluded:
Now although, as thus demonstrated, participation on the part of an accomplice in the criminal design of the
principal is essential to the same extent as such participation is necessary on the part of one charged as co-
principal, nevertheless, it is evident, and the cases above cited abundantly prove that, as against an
accomplice, a court will sometimes draw the inference of guilty participation in the criminal design from acts of
concert in the consummation of the criminal act and from the form and manner in which assistance is rendered,
where it would not draw the same inference for the purpose of holding the same accused in the character of
principal. This is because, in case of doubt, the courts naturally lean to the milder form of responsibility.
IN VIEW OF THE FOREGOING, the sentence of life imprisonment meted out to appellants Santiago and
Ambrosio Tatlonghari is affirmed. Appellants Fausto Mercado, Agapito Mercado and Cirilo Cueto are sentenced,
as accomplices, to an indeterminate sentence of not less than ten (10) years of prison mayor, medium degree, to
fifteen (15) years of reclusion temporal, medium. All the accused are further sentenced in solidum to pay the heirs
of Victor Eje an indemnity in the sum of P12,000.00 and the costs. The decision under appeal is accordingly
modified in the manner above described.
Concepcion, C.J., Dizon, Makalintal, Zaldivar, Sanchez, Castro, Fernando, Capistrano, Teehankee and Barredo,
JJ., concur.

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
DECISION
June 10, 1976
G.R. No. L-23587-88 LUCAS RAMIREZ and ENCARNACION FAJARDO RAMIREZ, petitioners,
vs.
THE HONORABLE COURT OF APPEALS, respondent.
Norberto J. Quisumbing, Sedfrey A. Ordonez and Gatchalian & Sison for petitioners. Solicitor General Arturo A.
Alafriz, Assistant Solicitor General Antonio A. Torres and Solicitor Octavio R. Ramirez for respondent.
Esguerra, J.:
Before Us is a joint petition for certiorari to review the decision dated May 22, 1964 of the Court of Appeals,
affirming the judgment of the Court of First Instance, Manila Branch XVI, in its Criminal Cases Nos. 33438, 33439
and 33440 convicting the spouses Lucas Ramirez and Encarnacion Fajardo Ramirez of the crime of falsification of
public, official and/or commercial documents punishable under Section 172, paragraph 1, of the Revised Penal
Code, and sentencing each of them in each case to not less than six (6) months of arresto mayor and not more
than three (3) years, six (6) months and twenty- one (21) days of prision correccional to pay a fine of P1,000.00
and one-half of the costs in each case.
The record discloses the following facts:
On December 9, 1949, the Central Bank of the Philippines, beset by an exchange crisis and pursuant to Section
14 (Exercise of Authority) and 74 (Emergency Restrictions on Exchange Operation) of Republic Act 265,
otherwise known as the Central Bank Act, issued Circular No. 20 designed to protect the international reserve
during the said crisis. It subjected all transactions in gold and foreign exchange to a previous licensing by the
Central Bank. To implement the said circular, guiding principles governing the licensing of foreign exchange for
the payment of imports were promulgated and embodied in Circular No. 44 issued on June 12, 1953, and made
effective July 1, 1953. It created the Bankers Committee to process applications of new importers who were made
to accomplish and submit, among others, through local authorized banks, documents such as Balance Sheets,
Profit and Loss Statements, Schedule of Monthly Sales and Merchandise Inventory to show that they met the
criteria set by the Central Bank for new importers. These documents were further required to be certified to by an
independent Certified Public Accountant. Further restrictions were imposed by subsequent circulars, all of which
were devised to combat the then prevailing exchange crisis.
Against this backdrop, Criminal Cases Nos. 33438, 33439 and 33440, each entitled People vs. Lucas Ramirez,
Encarnacion Ramirez and Ligaya Bernardino, People vs. Lucas Ramirez, Encarnacion Ramirez and Salustia
Lasin and People vs. Lucas Ramirez, Encarnacion Ramirez and Natalia Caparaz, respectively, were filed, all for
falsification of public, official and or commercial documents, spawned by a raid of Room 308 of the Quisumbing
bldg. at Dasmarinas Street, Manila, which room was then leased by Mrs. Encarnacion Fajardo Ramirez. The
search which was conducted by the NBI agents and Jose Aquino, a Central Bank confidential agent, yielded
voluminous documents among which were duplicates of the papers submitted by applicant-importers Bernardino,
Lasin and Caparaz duly certified by Segundo Esguerra, A CPA but which were allegedly falsified.
Criminal Case No. 33438 was eventually dismissed for failure of the prosecution to establish falsification and also
because one of the accused, Bernardino, remained at large.
In Criminal Case No. 33439 the information reads as follows:
That on or about the period comprised between December 28, 1953 and May 12, 1954, inclusive, in the City of
Manila, Philippines, the said accused, conspiring and confederating together with others whose true names and
Identities are still unknown, and helping one another, did then and there willfully, unlawfully and feloniously
commit acts of falsification in the following manner, to wit: the said accused for the purpose of securing and
obtaining dollar allocations or foreign exchange license for import payments, from the Central Bank of the
Philippines, an agencies of instrumentality of the Government of the Republic of the Philippines, thru its lawfully
authorized agent, the Philippine Bank of Communications, did then and there willfully, unlawfully and feloniously
prepare, concoct, execute and accomplish or cause to be prepared, concocted and executed and accomplished
the following public, official and commercial documents:
1. Application of Salustia Lasin to qualify as new importer, together with:
a. Balance Sheet as of December 31, 1953;
b. Profit and Loss Statement for the year ending December 31, 1953;
c. Schedule of Monthly Sales as of December 31, 1953;
d. Merchandise Inventory as of December 31, 1953. Income Tax Return for 1953.
2. Information Sheet of Salustia Lasin as a new importer
which documents have been executed under oath before a notary public and or officer authorized to administer
oaths, as required by law and the regulations duly promulgated by the Monetary Board, Central Bank of the
Philippines, pursuant toRepublic Act No. 265, and other records or documents connected therewith and required
by to law to kept by merchants, by stating, narrating, making it appear and representing in the said documents
that the accused Salustia Lasin was qualified, under the law and regulations of the Central Bank, as a new
importer, being actively engaged in the general merchandise (textile) business, with an establishment at Nos.
1514-1515, Divisoria Market, in said city, continuously since July 1, 1953 operating on a paid-up capital of
P23,500.00 with adequate distribution facilities, and that her purchases and gross sales of merchandise during the
period from January 1, 1953 to December 31, 1953 amounted to P147,062.35 and P149,246.30, respectively and
such other information or narration of facts pertinent thereto and in connection therewith, the said information,
data and narration of facts being material for the purpose of said application, the said accused knowing fully well
that their manifestations were all false and untrue and were made solely for the purpose of obtaining the said
dollar allocations and foreign exchange license for import Payments from the Central Bank of the Philippines; and
the said accused, in furtherance of their conspiracy, submitted and filed the aforesaid documents with the said
Central Bank of the Philippines thru its aforesaid duly authorized agent bank, vested by law with authority to
determine and authorize the issuance of such dollar payments, securing and obtaining as a result thereof the
approval of the application of said accused as a new importer and the issuance to her of a dollar allocation or
foreign exchange license for import payments in the amount of $8,975.00, every semester, to the damage and
prejudice of the Republic of the Philippines and or the Central Bank of the Philippines.
Criminal Case No. 33440 likewise charged the spouses Lucas and Encarnacion Ramirez with the same offense,
with Natalia Caparaz as co-accused. In the Information it was alleged that the foreign exchange allocation in the
amount of $8,177.75 every semester was obtained by Caparaz through the submission of falsified documents.
Record likewise showed that Salustia Lasin and Natalia Caparaz who were indicted in the information were
discharged and made state witnesses. After trial the lower court convicted petitioners herein of the charges
concerning the dollar application of Caparaz and Lasin. Both spouses appealed to the Court of Appeals which
affirmed the judgment of the Court of First Instance and also denied their motion for reconsideration. Hence this
petition.
Before We take up the assigned errors, We note, as was brought up by defense counsels Quisumbing, Ordonez
and Gatchalian in their well-written brief, the fact that-on January 21, 1962, while this case was pending in the
Court of Appeals, the Central Bank issued Circular No. 133 which lifted and abolished the foreign exchange
controls instituted by earlier circulars. This particular circular dispensed with the need for prior specific licensing
from the Central Bank for the sale of foreign exchange for imports. Before Us now therefore are posed these
questions:
1. Did the Honorable Court of Appeals err in not acquitting the petitioners herein?
2. Did the Honorable Court of Appeals err in not ruling that prosecution against petitioner spouses may no longer
be had for falsification of documents required by the Central Bank Circular No. 20 as a consequence of the repeal
of said Circular by Circular No. 133?
I
A review of the proceedings and exhibits presented in the lower court reveals that there is truth in the findings of
the trial court, affirmed by the Court of Appeals, that the spouses Lucas and Encarnacion Ramirez were guilty of
the crime charged. Although their names never appeared in the allegedly falsified documents, this was so
because they concocted, schemed and executed the plot to falsify the said documents submitted to the Central
Bank very carefully and meticulously without involving their names, but this plot was betrayed by their active
participation (other than signing their names) in the commission of the offense at bar which was positively proved.
During the trial the fact of illiteracy of the applicant-importers Salustia Lasin and Natalia Caparaz was elicited and
established. Capitalizing on the illiteracy of Lasin and Caparaz who neither could read nor write except to sign
their names but who were eager beavers to be among the importers, spouses Lucas and Encarnacion Ramirez
had ready- made applications with manufactured figures and data signed by them (applicant importers). These
applications had every appearance of genuineness and since the same appear to be duly certified to by Segundo
Esguerra, an independent Certified Public Accountant, in compliance with a CB regulation, the applicant importers
qualified as new importers and in fact obtained dollar allocations.
Petitioners herein would pass the buck to Segundo Esguerra the CPA whose signature appeared in all the
statements filed in the CB. Thus petitioner Ramirez declared during the trial that Segundo Esguerra with another
lawyer, Osmundo Miranda, now deceased, sub-leased a portion of the room at 308 Quisumbing Bldg. leased by
her which Esguerra used as his office after the regular office hours (Esguerra was said to be working for H. R.
Lopez, Inc. as Accountant) and that he used to stay there from 11:30 A.M. to 2:00 P.M., then from 5:00 P.M. to
7:00 P.M. daily (t.s.n. November 4,1960 pp. 37-41). She would also have us believe that the alleged falsified
papers were found at the outer room which was then occupied by Esguerra and the late Atty. Miranda-a fact
which she failed to prove. When the raid occurred it was Lucas Ramirez who came to the scene, opened the main
door and unlocked all the cabinets and drawers in Room 308. As found out by the Court of Appeals:
... Los agentes de la ley antes de verificar el registro del cuarto Num. 308 del edificio Quisumbing estuvieron en la
residencia de los esposos aqui acusados y Lucas Ramirez fue quien les acompano al referido cuarto, y segun las
pruebas de la accusacion, Ramirez tenia las llavez de los armarios y mesas que estaban dentro del cuarto y fue
quien abrio los cajones de dichas mesas donde se encontraron los duplicados y los documentos falsos.
(Emphasis supplied) (Criminal Record, Decision of the court of Appeals, Third Div.)
The testimony of Jose Aquino, CB agent (t.s.n, March 10, 1958 pp. 3-5) that he remembered that there were
divisions in Room 308 with several tables but without Identifying who the occupants of the tables were did not in
any way lend support to the contention of accused Encarnacion Ramirez that she subleased a portion of her room
to Esguerra and deceased Miranda. No contract of sub-lease was presented, and even assuming arguendo that
the same was sub-leased, no reason was offered why Lucas Ramirez had the keys not only to the main door but
all the cabinets and drawers as well. What is apparent is that Esguerra held office at Room 308 Quisumbing Bldg.
not as sublessee but on agreement with Lucas Ramirez who was himself a CPA and an Auditor of H.R. Lopez
Inc., a firm where Esguerra was also employed as an Accountant. In fact Esguerra admitted that he went to 308
Quisumbing Bldg. after office hours (t.s.n. March 20, 1959 pp. 12-13.) on instructions of Lucas Ramirez and
signed statements for a fee of P100.00 per certification (t.s.n. October 5, 1956, Criminal Record p. 352, 357). It
surprises Us why Esguerra was not subjected to further investigations if he were equally guilty of the crime
charged. Accused Encarnacion Ramirez too tried to wash her hands by testifying that she did not know Natalia
Caparaz nor did she meet her before the hearing (t.s.n. p. 21 Nov. 4, 1960). On further examination, however, she
admitted having known her as she (Caparas) was introduced to her (Ramirez) by a mutual friend, Apolonia
Alcantara (t.s.n. p. 31 Nov. 4, 1960). Also during the raid, the NBI and CB agents found among the papers powers
of attorney executed by Lasin and Caparaz in favor of Encarnacion Fajardo Ramirez, authorizing the latter to
manage the disposal of the dollar allocations. Likewise it was shown during the trial that the spouses petitioners
herein benefited from the dollar allocations obtained by Caparaz and Lasin and in fact retained the lion's share
therefrom. Thus from the allocation obtained by Caparaz in the amount of $8,177.75, she (Caparas) was only
given the amount of P400.00 as reimbursement of her expenses and P65.00 as her share of the dollar allocation
(t.s.n. pp. 10-11 March 20, 1959). Similarly when Lasin's application was approved for $8,975.00 she was only
given a share of P500.00 (t.s.n. May 15, 1959 pp. 33, 34). All the above facts positively affirm the guilt of spouses-
petitioners herein.
II
Anent the second error, it is the contention of petitioners herein that with the advent of full decontrol envisaged in
Circular No. 133 issued on January 21, 1962, the crime for which petitioners were indicted has already been
extinguished. Pertinent provisions of Circular 133 are hereunder quoted for easy reference, viz:
xxx xxx xxx
2. Only authorized agent banks may sell foreign exchange for imports. Such exchange should be sold at the
prevailing market rate to any applicant, without requiring prior specific licensing from the Central Bank, subject to
the following conditions:
a. All imports must be covered by letter of credit except small transactions involving not more than $100.00;
b. x x x
xxx xxx xxx
4. The free market rate shall not be administratively fixed but shall be determined through transactions in the free
market,
xxx xxx xxx
8. All existing circulars, rules and regulations and conditions governing transactions in foreign exchange not
inconsistent with the provisions on this Circular are deemed incorporated hereto and made integral parts hereof
by reference.
It is very clear that Circular 133 lifted the restrictions imposed by Circular 20 and subsequent circulars thereto. In
short Circular 133 repealed Circular 20. This is so because Circular 20 and Circular 133 are diametrically opposed
to each other. While Circular 20 restricted the sale of foreign exchange and subjected all transactions therein to
specific licensing by the Central Bank, Circular 133 practically did away with prior licensing. As aptly elucidated in
the case of People vs. Sandico 1, Jr. et al.
... The Solicitor General's opposition to the motion for dismissal is predicated primarily upon his contention that
Circular 20 has not been repealed by Circular 133, and that far from being incompatible, the two actually
complement each other. This contention is without merit. In the first place, while Circular 20 restricts sales of
foreign exchange and subjects all transactions therein to specific licensing by the Central Bank, Circular 133
neither restricts sales of foreign exchange nor subjects transactions therein to licensing. As a matter of fact,
Circular 133 provides that foreign exchange shall be sold at a free market rate to any applicant without requiring
prior specific licensing from the Central Bank, and that the free market rate shall not be administratively fixed but
shall be determined in the transactions in the free market. From the contradictory concepts of the two systems
may be seen the incompatibility between the two circulars. Circular 133 was promulgated precisely to remedy the
evils brought about by the control system; it is therefore not ancillary to Circular 20. If life is to be given to the
remedy of decontrol as a policy for economic survival, Circular 20 must give away to the supervening Circular
133. The purpose of Circular 133 cannot be achieved by applying the provisions of Circular 20; the two circulars
cannot operate hand in hand. It may be true that Circular 133 contains no specific provision which is in direct
conflict with Secs. 4-a and b of Circular 20, the particular sections under which the appellants were charged and
convicted. But it is obvious nonetheless that the respective purposes of these two circulars are diametrically
opposed to each other, because while Circular 20 restricts the sale of foreign exchange and subjects all
transactions therein to specific licensing by the Central Bank, the purpose of Circular 133 is clearly to abolish such
restrictions and do away with licensing. It is beyond doubt, therefore, that the purpose of Circular 20 was
abandoned by the promulgation of Circular 133, and Secs. 4-a and b thereof have lost all meaning and function.
Also under paragraph 8 of Circular 133 (supra) it is so provided that circulars consistent with the provisions of
Circular 133 are deemed incorporated thereto. However since Circular 20 is inconsistent and runs counter to it
then by necessary implication the same is abrogated and repealed. And as Sutherland 2 an eminent authority on
Statutory Construction says-"When a subsequent enactment covering a field of operation coterminous with a prior
statute cannot by any reasonable construction be given effect while the prior law remains in operative existence
because of irreconcilable conflict between the two acts, the latest legislative expression prevails and the prior law
yields to the extent of the conflict."
The decisive question to determine now is whether or not repeal of Circular 20 obliterated petitioners' crime.
Petitioners heavily relied on the case of People vs. Quasha 3 where this Court opined:
... The majority of the court however, are also of the opinion that, even supposing that the act imputed to the
dependant constituted falsification at the time it was perpetrated, still with the approval of the Parity Amendment to
the Constitution in March, 1947, which placed Americans on the same footing as Filipino citizens with respect to
the right to operate public utilities in the Philippines, thus doing away with the prohibition in Section 8, Article XIV,
of the Constitution in so far as American citizens are concerned, the said act has ceased to be an offense within
the meaning of the law, so that defendant can no longer be held criminally liable therefor. ...
On the other hand, the Court of Appeals in its decision said:
Finalmente, los apelantes contienden que con la abolicion de la adjudicacion de dolares, los actos cometidos por
los esposos en el supuesto de que fuesen estos culpables ya han dejado de ser punibles, citando para este
efecto la causa de Pueblo vs. Quasha, 49 O.G. 2826. Entendemos que la contencion carece de merito porque en
la presente causa los esposos estan acusados de falsification de documentos official y commercial y no de una
infraction de los reglamentos del Banco Central sobre la adjudicacion de dolares y la causa de Quasha, supra, no
es aplicable al caso de autos donde en parte se sostuvo que debido a la enmienda de la Constitution
concediendo a los americanos iguales privilegios que los filipinos en la Llamadad clausula de paridad, no era
necesario expresar en la escritura de incorporacion la nacionalidad de los incorporadores americanos en una
corporacion de utilidad publica puesto que tenian los mismos derechos y privilegios que los filipinos en una
corporacion de tal indole.
We believe that the ratiocination of the Court of Appeals is altogether hair-splitting. If We will recall, the crime of
falsification stemmed from the violation of the legal requirements of the Central Bank, specifically Circulars 20 and
44, where applicant- importers were obliged to disclose the truth on the figures and data appearing in the
documents submitted but which they allegedly falsified to qualify them as new importers. These requirements
incorporated in Circular 20 and subsequent circulars were issued during an emergency in an effort to curb the
outward flow of foreign exhange. Eventually, a free market ensued and the emergency measures were lifted.
Consequently, there is no more obligation now to submit to the Central Bank such documents in support of an
application for foreign exchange.
Although the acts imputed to the accused constituted, at the time they were committed, falsification of commercial
documents penalized under Sec. 172, paragraph 1, of the Revised Penal Code, the promulgation of Central Bank
Circular 133 abolishing the requirement of specific licensing under Central Bank Circular No. 20 wiped away the
legal obligation of the applicants for foreign exchange to disclose the truth of the facts narrated in the documents
supporting their application. As there is no more legal obligation of the applicant to disclose such truth, an
untruthful statement therein no longer constitutes the crime of falsification perpetrated by making false statements
in a narration of facts (Francisco, Revised Penal Code, p. 194, 1963 ed.; U.S. vs. Lopez, 15 Phil. 515 and People
vs. Quasha, 93 Phil. 333).
It may be argued that the repeal of Central Bank Circular No. 20 by Central Bank Circular No. 133 did not
extinguish the criminal liability for falsification of commercial documents because the Revised Penal Code where
such offense is punishable was unaffected thereby and remains valid and subsisting. True that the pertinent
provision of the Revised Penal Code on falsification was not repealed by Circular No. 133, but the stubborn fact
remains that the repeal of Circular No. 20 which imposed the obligation to state the truth in the papers supporting
the application for foreign exchange extinguished that obligation, leaving no more foundation on which the
falsification of such papers would rest. The root cause of the falsification, which was Central Bank Circular No. 20,
having been totally removed, the offense arising out of a disregard or violation of said circular has no more leg to
stand on.
The greater weight of authority is inclined to the view that an appellate court, in reviewing a judgment on appeal,
will dispose of a question according to the law prevailing at the time of such disposition, and not according to the
law prevailing at the time of rendition of the appealed judgment. The court will, therefore, reverse a judgment
which was correct at the time it was originally rendered where, by statute, there has been an intermediate change
in the law which renders such judgment erroneous at the time the case was finally disposed of on appeal (111
A.L.R. 1318; see cases cited therein). Thus, if pending the appeal from a judgment of the lower court the law is
changed, or the statute under which it was decided has been repealed, the appellate court must dispose of the
case under the law in force when its decision is rendered. The court must conform its decision to the law then
existing and may, therefore, reverse a judgment which was correct when pronounced in the subordinate tribunal, if
it appears that pending the appeal a statute which was necessary to support the judgment of the lower court has
been withdrawn by an absolute repeal (Vance v. Rankin (1902) 194 I11. 625, 62 N.E. 807, 88 Am. St. Rep. 173;
Wall v. Chesapeake & O.R. Co. (1919) 290 I11. 227, 125 N.E. 20).
Likewise it was held that while as a general rule it is the province of an appellate court to inquire only into the
question whether a judgment was erroneous when rendered, if subsequent to the judgment of the lower court and
before the decision of the appellate court is handed down a law intervenes changing the applicable rule, the
judgment of the lower court, although correct under the law prevailing at the time it was rendered must be set
aside by the appellate court and a judgment in conformity with the new law must be entered (U.S. v. The Peggy
(1801) 1 Cranch (U.S.) 103, 2L. Ed. 49).
It may be argued that the function of the appellate court is not to consider the merits of a cause on the basis of
supervening extraneous circumstances but merely to review the judgment of the lower court with a view to
determining whether it was erroneous or correct when it was rendered. But because judgment is suspended by
appeal, it is without finality; that to give it finality the appellate court must itself pronounce its judgment, and that in
so doing it must be governed by the existing law. When the previous law under which alone validity could be given
to the judgment has been repealed, the sole prop and foundation for support of the judgment has been removed,
and of necessity it must be declared null and void (Yeaton v. United States (1809) 5 Cranch (U.S.) 281, 3 L. Ed.
101).
In view of the failure of the Court en banc after its first deliberation to reach a decision on this case due to the
absence of the required number of justices to promulgate a decision, and of the abstention of two justices from
participating therein, the case was set for rehearing en banc in accordance with Sec. 3, Rule 125 of the Rules of
Court. On September 4, 1975, the case was reheard en banc and subsequently the justices present were
requested to cast their respective votes on the final outcome of the case.
On April 8, 1976, the Court for the second time, formally voted on the case, and the result of the voting among the
eleven justices present was as follows:
1. For AQUITTAL of the accused appellants-
1) Esguerra
2) Mu?oz Palma
3) Concepcion
4) Martin, JJ.
2. For CONVICTION of the accused appellants-
1) Castro, C.J.
2) Teehankee
3) Barredo
4) Makasiar
5) Aquino, JJ.
3. For ABSTENTION-
1) Fernando
2) Antonio, JJ.
It resulted that the majority of eight required by the constitution in ordinary cases heard en banc to decide a case
has not for the second time been obtained. Pursuant to the provisions of Sec. 3, Rule 125 of the Rules of Court, if
after the case is reheard and in the rehearing no decision is again reached, the judgment of conviction of the
lower court shall be reversed and the defendant shall be acquitted.
WHEREFORE, the accused appellants, Lucas Ramirez and Encarnacion Fajardo Ramirez, are hereby acquitted
of the offense charge, with costs de oficio.
SO ORDERED.
Munoz Palma and Martin, JJ, concur.
Concepcion Jr., J., votes to acquit.
Fernando and Antonio, JJ., took no part.
Separate Opinions
CASTRO, C.J, dissenting:
The burden of my dissent may be simply stated thus: the repeal of Circular 20 by Circular 133 did not obliterate
the crime of falsification punished by Article 172 of theRevised Penal Code which the herein petitioners were
charged with and found guilty of in the court a quo. It is unmitigated non-sense to say that a mere circular issued
by the Central Bank can operate to amend a statute passed by Congress; and since the herein petitioners were
charged with the crime of falsification and not with a violation of Circular 20, no amount of sophistry can give
validity to the conclusion that Circular 133 has operated to repeal Article 172.
Advertence is made by Mr. Justice Esguerra in his opinion to People vs. Sandico, Jr., et al. (Court of Appeals
Reports, Vol. 2, July 20, 1962, pages 488, 492, 493). I was the Associate Justice who penned the decision in that
case. If my complete opinion therein is to be examined very closely, it will be readily seen that the portions thereof
cited by Mr. Justice Esguerra are unassailable, because the accused were charged, not with an offense punished
by the Revised Penal Code, but with a violation of Circular 20 in relation to Section 34 of Republic Act 265, or,
more specifically, with having "transacted, negotiated or otherwise dealt in foreign exchange by purchasing,
dealing in or transacting with persons or entities who are not authorized agents of the Central Bank of the
Philippines, and by disposing, exporting and/or otherwise failing to sell said foreign exchange to any designated
agent of the Central Bank within the requisite period."
Reliance on People vs. Sandico as a basis for the acquittal of the petitioners in the case at bar is not only
improper; it is likewise grossly misleading.
TEEHANKEE, J., dissenting:
I dissent from the decision reversing the judgment of conviction of petitioners-accused of the crime of falsification
of public and commercial documents under Article 172 of the Revised Penal Code because of the Court's failure
to attain the necessary 8 out of 9 votes for affirmance of the conviction (with 5 votes for affirmance and 4 votes for
reversal) pursuant to Rule 125, section 3 of the Rules of Court.
As stated in the main opinion 1 the decisive question is whether or not repeal of 1949 Circular 20 subjecting all
transactions in foreign exchange transactions to licensing the Central Bank (allegedly by 1962 Circular No. 133
which provided for sales of foreign exchange at the prevailing free market rate without requiring specific licensing
from the Central Bank but subject to certain conditions such as letters of credit to cover all imports with special
time deposits varying from 25%-to 150% ( depending upon the classification of the imported goods) "obliterated
petitioners' crime" of falsification.
Even assuming that Circular No. 133 repealed Circular No. 20 (which in my opinion it did not, since it merely
liberalized at the time the sales of foreign exchange with the adoption of a free market rate), the adoption of
Circular No. 133 by the Monetary Board could by no means obliterate the crime of falsification under which the
petitioners were charged, found positively guilty beyond all doubt (as reaffirmed in the main
opinion) 2 and convicted.
Had the petitioners-accused simply violated the Circular by obtaining the dollar allocations without being entitled
thereto but without falsification of documents, then they would have been criminally charged and convicted of
willful violation of the circular under Section 34 of Republic Act No. 265 which imposes the penalty of a fine up to
P20,000.00 and imprisonment up to five years. 3 And the alleged repeal of Circular No. 20 might arguably be cited
now for erasing their criminal liability thereunder for willful violation.
But petitioners without presenting themselves nor using their own names had fabricated documents and records
to have their two illiterate dummies secure semestral dollar allocations as fake new importers in the amounts of
$8,177.75 (for Caparaz) and $8.975.00 (for Lasin) per semester, which were actually for their use and benefit 4
and were therefore charged, tried and convicted for falsification of public and commercial documents under Article
172 of the Revised Penal Code 5 on the very strength of the testimonies of the two dummies who were utilized as
state witnesses for the prosecution.
Clearly,, the crime of falsification which remains a serious crime has not been obliterated by the alleged repeal of
Circular No. 20, and petitioners' criminal liability has neither been obliterated nor extinguished.
The main opinion in holding that "the root cause of the falsification, which was Central Bank Circular No. 20,
having been totally removed, the offense arising out of a disregard or violation of said circular has no more leg to
stand on" 6 disregards that petitioners' motive in committing falsification (to get dollar allocations thru their
dummies as fake new importers) does not erase or justify the crime of falsification of public documents with the
removal of the motive (Circular No. 20) since in the falsification of public documents, whether by public officials or
private persons, the Idea of gain or intent to prejudice a third person is secondary and the principal thing punished
is the violation of the public faith and the destruction of the truth as therein solemnly declared.
The removal (repeal) of the circular might leave a prosecution for violation thereof under Section 34 of the Central
Bank Act without any leg to stand on, but petitioners stand charged with falsification. Since all the nine (of eleven)
members of the Court who have participated in this case are unanimously agreed that petitioners' guilt of the
crime of falsification of public and commercial documents has been proved beyond reasonable doubt, their
conviction by the trial court as affirmed on appeal by the Court of Appeals must stand.
Makasiar, J., concur.
AQUINO, J., dissenting:
I dissent. I do not agree with the opinion that the supposed repeal of Circular 20 by Circular 133 of the Central
Bank obliterated the crime of falsification punished in article 172 of the Revised Penal Code which the petitioners
had committed. They were not charged under Circular 20. Circular 133 did not repeal article 172.
The facts of the instant case are different from those of People vs. Quasha, 93 Phil. 333. This Court is not bound
by the opinion of the Court of Appeals in People vs. Sandico, 2 Court of Appeals Reports 488 cited in the majority
opinion. The alleged repeal of Circular 20, as a supervening fact, may be a basis for executive clemency. That
repeal did not extinguish the petitioners' criminal liability under articles 172.
Barredo and Makasiar, JJ., concurs.
Separate Opinions
CASTRO, C.J, dissenting:
The burden of my dissent may be simply stated thus: the repeal of Circular 20 by Circular 133 did not obliterate
the crime of falsification punished by Article 172 of theRevised Penal Code which the herein petitioners were
charged with and found guilty of in the court a quo. It is unmitigated non-sense to say that a mere circular issued
by the Central Bank can operate to amend a statute passed by Congress; and since the herein petitioners were
charged with the crime of falsification and not with a violation of Circular 20, no amount of sophistry can give
validity to the conclusion that Circular 133 has operated to repeal Article 172.
Advertence is made by Mr. Justice Esguerra in his opinion to People vs. Sandico, Jr., et al. (Court of Appeals
Reports, Vol. 2, July 20, 1962, pages 488, 492, 493). I was the Associate Justice who penned the decision in that
case. If my complete opinion therein is to be examined very closely, it will be readily seen that the portions thereof
cited by Mr. Justice Esguerra are unassailable, because the accused were charged, not with an offense punished
by the Revised Penal Code, but with a violation of Circular 20 in relation to Section 34 of Republic Act 265, or,
more specifically, with having "transacted, negotiated or otherwise dealt in foreign exchange by purchasing,
dealing in or transacting with persons or entities who are not authorized agents of the Central Bank of the
Philippines, and by disposing, exporting and/or otherwise failing to sell said foreign exchange to any designated
agent of the Central Bank within the requisite period." Reliance on People vs. Sandico as a basis for the acquittal
of the petitioners in the case at bar is not only improper; it is likewise grossly misleading. TEEHANKEE, J.,
dissenting: I dissent from the decision reversing the judgment of conviction of petitioners-accused of the crime of
falsification of public and commercial documents under Article 172 of the Revised Penal Code because of the
Court's failure to attain the necessary 8 out of 9 votes for affirmance of the conviction (with 5 votes for affirmance
and 4 votes for reversal) pursuant to Rule 125, section 3 of the Rules of Court. As stated in the main opinion 1 the
decisive question is whether or not repeal of 1949 Circular 20 subjecting all transactions in foreign exchange
transactions to licensing the Central Bank (allegedly by 1962 Circular No. 133 which provided for sales of foreign
exchange at the prevailing free market rate without requiring specific licensing from the Central Bank but subject
to certain conditions such as letters of credit to cover all imports with special time deposits varying from 25%-to
150% ( depending upon the classification of the imported goods) "obliterated petitioners' crime" of falsification.
Even assuming that Circular No. 133 repealed Circular No. 20 (which in my opinion it did not, since it merely
liberalized at the time the sales of foreign exchange with the adoption of a free market rate), the adoption of
Circular No. 133 by the Monetary Board could by no means obliterate the crime of falsification under which the
petitioners were charged, found positively guilty beyond all doubt (as reaffirmed in the main opinion) 2 and
convicted. Had the petitioners-accused simply violated the Circular by obtaining the dollar allocations without
being entitled thereto but without falsification of documents, then they would have been criminally charged and
convicted of willful violation of the circular under Section 34 of Republic Act No. 265which imposes the penalty of
a fine up to P20,000.00 and imprisonment up to five years. 3 And the alleged repeal of Circular No. 20 might
arguably be cited now for erasing their criminal liability thereunder for willful violation. But petitioners without
presenting themselves nor using their own names had fabricated documents and records to have their two
illiterate dummies secure semestral dollar allocations as fake new importers in the amounts of $8,177.75 (for
Caparaz) and $8.975.00 (for Lasin) per semester, which were actually for their use and benefit 4 and were
therefore charged, tried and convicted for falsification of public and commercial documents under Article 172 of
the Revised Penal Code 5 on the very strength of the testimonies of the two dummies who were utilized as state
witnesses for the prosecution. Clearly, the crime of falsification which remains a serious crime has not been
obliterated by the alleged repeal of Circular No. 20, and petitioners' criminal liability has neither been obliterated
nor extinguished. The main opinion in holding that "the root cause of the falsification, which was Central Bank
Circular No. 20, having been totally removed, the offense arising out of a disregard or violation of said circular has
no more leg to stand on" 6 disregards that petitioners' motive in committing falsification (to get dollar allocations
thru their dummies as fake new importers) does not erase or justify the crime of falsification of public documents
with the removal of the motive (Circular No. 20) since in the falsification of public documents, whether by public
officials or private persons, the Idea of gain or intent to prejudice a third person is secondary and the principal
thing punished is the violation of the public faith and the destruction of the truth as therein solemnly declared. The
removal (repeal) of the circular might leave a prosecution for violation thereof under Section 34 of the Central
Bank Act without any leg to stand on, but petitioners stand charged with falsification. Since all the nine (of eleven)
members of the Court who have participated in this case are unanimously agreed that petitioners' guilt of the
crime of falsification of public and commercial documents has been proved beyond reasonable doubt, their
conviction by the trial court as affirmed on appeal by the Court of Appeals must stand. Makasiar, J., concur.
AQUINO, J., dissenting: I dissent. I do not agree with the opinion that the supposed repeal of Circular 20 by
Circular 133 of the Central Bank obliterated the crime of falsification punished in article 172 of the Revised Penal
Code which the petitioners had committed. They were not charged under Circular 20. Circular 133 did not repeal
article 172. The facts of the instant case are different from those of People vs. Quasha,93 Phil. 333. This Court is
not bound by the opinion of the Court of Appeals in People vs. Sandico, 2 Court of Appeals Reports 488 cited in
the majority opinion. The alleged repeal of Circular 20, as a supervening fact, may be a basis for executive
clemency. That repeal did not extinguish the petitioners' criminal liability under articles 172. Barredo and
Makasiar, JJ., concurs. Footnotes
1 00964-C.R. July 20,1962 Court of Appeals Reports vol. 2 p. 488, 493. 2 Sutherland, Statutes and Statutory
Construction 463, 464. 3 L-6055 June 12, 1953, 93 Phil. 333, 340: Teehankee, J., dissenting: 1 At page 240. 2 At
page 239 3 Section 34 of the Central Bank Act (Rep. Act 265) provides: "SEC 34. Proceedings upon violation of
laws and regulations.- Whenever ay person or entity wilfully violates this Act or any order, instruction, rule or
regulation legally issued by the Monetary Board, the person or persons responsible for such violation shall be
punished by a fine of not more than twenty thousand pesos and by imprisonment of not more than five years." 4
Main opinion, at pp. 238-239. 5 Which imposes the penalty of a fine up to P5,000.00 and imprisonment of prision
correccional in its medium and maximum periods. 6 At page 242; Emphasis supplied.

Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. L-35721 October 12, 1987
WELDON CONSTRUCTION CORPORATION, petitioner,
vs.
COURT OF APPEALS (Second Division) and MANUEL CANCIO, respondents.

CORTES, J.:
The present controversy arose from the construction of the Gay Theater building on the corner of Herran and
Singalong Streets in Manila. Petitioner WELDON CONSTRUCTION CORPORATION sued the private respondent
Manuel Cancio in the then Court of First Instance of Manila to recover P62,378.82 Pesos, which is ten per (10%)
of the total cost of construction of the building, as commission, and P23,788.32 Pesos as cost of additional works
thereon.
The basis for the claim for commission is an alleged contract of supervision of construction between the theater
owner Manuel Cancio, herein private respondent, and the petitioner's predecessors-in-interest, Weldon
Construction, which the petitioner seeks to enforce. The private respondent refused to pay the amounts
demanded on the ground that the Gay Theater building was constructed by Weldon Construction for the stipulated
price of P600,000.00 Pesos which has already been fully paid. The irreconcilable positions taken by the parties
brought the controversy before the courts.
Two documents, Exhibit "A" and Exhibit "5," were produced by the plaintiff and the defendant, respectively, before
the trial court. Plaintiff, herein petitioner sought the enforcement of the alleged contract of supervision contained in
Exhibit "A," which is quoted below:
March 7, 1961
Mr. & Mrs. Manuel Cancio
c/o Goodwill Trading Co.
Rizal Avenue, Manila
Dear Mr. & Mrs. Cancio:
We have the pleasure to offer your goodselves our services for the construction of your theater
and office budding at Singalong corner Herran St., Manila per plans and specifications of Engr.
Filomeno Nunez.
We shall handle the administration of the construction of your building under the following
conditions:
1. The Owner shall transfer or advance an amount of TEN THOUSAND PESOS (P10,000.00)
to serve as a revolving fund and to be replenished from time to time to take care of the cost
and expenditures incurred for the proper prosecution of the work. Such cost to include the
following items and to be at rates not higher than the standard paid in the locality of the work
except with prior consent of the Owner:
a. All materials necessary for the work;
b. All payrolls including social security and other taxes related thereto;
c. Salaries of employees stationed at the field office in whatever capacity
employed. Employees engaged in expediting works or transportation of
materials shall be considered as stationed in the field office;
d. Traveling expenses of adrniniqtrator or employees incurred in
discharging duties connected with this work;
e. Permit fees, royalties, damages for infringement of patents, and cost of
defending suits therefore and for deposits lost;
f. Losses and expenses not compensated by insurance provided they have
resulted from causes other than our fault or neglect. No such losses and
expenses shall be included in the cost of the work for the purpose of
determining the commission. In the event of loss from fire, flood, or other
fortuitous events, we shall be put in charge of reconstruction and be paid
for a fee proportionate to the work done;
g. Minor expense, such as telegrams, telephone services and similar petty
cash items;
h. The amount of all subscontracts;
i. Premiums on all bonds and insurance policies caned for the execution of
the work;
j. Rentals of all construction plant or parts thereof neressary in the
execution of the work in accordance with rental agreements approved by
the owner.
Transportation of said construction plants, costs of loading and unloading,
cost of installation and removing thereof, and minor repairs and
replacements of parts during its use on the work, in accordance with the
terms of the said rental agreement.
2. That the Owner shall not reimburse from us the following expenditures:
a. Salary of any person employed in our main office or in any regular
established branch office, during the execution of the work;
b. Overhead or general expenses of any kind, except as those which
maybe expressly included in this Contract;
c. Interest on capital employed either in plant or in expenditures on the
work except as maybe expressly included in this contract.
3. That we shall be under the direct supervision of the Owner, and shad provide facilities for
the Owner's representative to have access or inspection of the work whether it is in
preparation or progress.
4. That we shall continuously maintain adequate protection of all works from damage and shall
protect the Owner's property from injury or loss. We shall protect adjacent properties as
provided by law.
5. That we shall receive a commission of Ten Percent (10%) of the total cost, to be paid upon
submission of statement of cost.
If the above conditions are satisfactory to you, you may sign your approval at the left corner
provided for in this page.
We shall submit an estimate of the whole project based on the plans as soon as possible. In
as much (sic) as time is of the essence, may we proceed right away under the administrative
(sic) basis.
Respectfully
yours,
WELDON
CONSTRUCTIO
N
(Sgd.)
ANTONIO C.
WONG
Office Manager
Private respondent Cancio resisted the petitioner's claims for commission and for the cost of "extra works" by
producing Exhibit "5", a building contract providing for the construction of the building in question for the stipulated
price of P600,000.00 pesos which said private respondent had already paid to the petitioner's predecessor-in-
interest. Exhibit "5" is reproduced as follows:
BUILDING CONTRACT
KNOW ALL MEN BY THESE PRESENTS:
This contract, made and executed in the City of Manila, Philippines, this 30th day of March
1961 by and between:
MR. MANUEL CANCIO, of legal age, married and residing at 711 Rizal
Avenue, Manila, Philippines, hereinafter referred to as the Owner,
- and -
WELDON CONSTRUCTION, a construction firm, with main office at No.
1262 Rizal Avenue Extension, Caloocan, Rizal, Philippines, represented
herein by its General Manager and proprietor Lucio Lee, hereinafter
referred to as the Contractor, witnesseth:
That, the Owner and the Contractor have agreed to the following terms and conditions:
1. The Contractor shall erect and build in a workmanlike manner and to the best of its ability a
Cinema and Commercial Building located at Herran corner Singalong, Manila, in accordance
with the plans and specifications agreed upon by the Owner and the Contractor, the latter
being made an integral part hereof as Annex "A"; except the following:
(a) Electrical Fixtures
(b) Water pumps & Sump pumps
(c) Drinking Fountains
(d) Fire Fighting Equipments
(e) Neon Lights
(f) Air Conditioning
(g) Chair
(h) Curtain & Curtain Motors
(i) Screen
(j) Mezzanine along Singalong (Except that marked on plans noted.)
(k) Contractors's Sales Tax
(l) Doors for Store Space (to be provided by tenant)
(m) Third Storey (store space up to 2nd floor only)
2. The contractor shall supply the corresponding labor and materials on said construction
which shall include plumbing, tinsmith, masonry, concreting, electrical, carpentry and painting,
in accordance with the aformentioned plans and specifications (except as noted in Art. 1
above.)
3. The building permit shall be paid for by the Owner.
4. The Owner shall pay the Contractor the full amount of SIX HUNDRED THOUSAND
(P600,000.00) PESOS, Philippine Currency, which payment the Owner shall pay in the basis
of work accomplished based on the breakdown attached herewith marked Annex "B" and "C."
Such payment shall be paid on the tenth day of every month. Ten percent retention of every
payment shall be retained by the owner, to be paid upon completion of the project.
5. The Contractor recognizes that time is an essential element of this contract and, on this
basis, agrees to finish the construction of the said Commercial-Cinema Building by November
30, 1961. Should the contractor fail to finish the said building by that date, he (the Contractor)
shall indemnify the Owner the sum of SIX HUNDRED PESOS (P600.00) for each day of delay,
as liquidated damages. Any extensions of the date of completion due to delays caused by
force majeure or due to decision of Owner to hold in abeyance certain portions of work must
be approved in writing by the Owner.
6. The Contractor shall secure from the proper authorities the certificate of final approval of the
work completed in accordance with the plans and specifications, the same shall be given to
the Owner upon the turnover of the work so completed.
IN WITNESS WHEREOF, the parties have signed this Building Contract this 30th day of
March, 1961, at Manila, Philippines.
(Sgd.) MANUEL CANCIO (Sgd.) LUCIO A. LEE
Owner Contractor
With Marital Consent:
(Sgd.) JUANA CANCIO
SIGNED IN THE PRESENCE OF:
__________________ ______________________
The then Court of First, instance of Manila ruled that the agreement between the parties is a contract of
supervision of construction found in Exhibit "A" and ordered the theater-owner Cancio to pay the ten per cent
(10%) supervision fee or commission provided for in said contract (Record on Appeal, p. 91). On appeal by the
defendant Cancio, the Court of Appeals reversed the lower court's Decision and dismissed the Complaint. The
appellate court held that the transaction between the parties is a construction contract for a stipulated
price contained in Exhibit "5" (Rollo, pp. 53-62 [Court of Appeals Decision]) The dispositive portion of the Court of
Appeals Decision promulgated on December 23, 1971 reads:
WHEREFORE, the judgment appealed from is reversed and set aside. Let another issue
dismissing plaintiff's complaint and ordering ph&tiff to pay defendant-appellant P5,000.00 as
moral damages, P4,000.00 as exemplary damages, and P4,000.00 as attorney's fees. Costs
against plaintiff-appellee in both instances.
SO ORDERED. (Rollo, p. 64)
Both parties moved for the reconsideration of the aforesaid Decision. Plaintiff-appellee WELDON
CONSTRUCTION CORPORATION assailed the Decision as a whole and reiterated its claims. Defendant-
appellant sought an increase in the amount of damages and attomey's fees awarded. In a Resolution dated
February 7, 1972, the same division of the Court of Appeals denied the two Motions for Reconsideration. Upon a
Second Motion for Reconsideration filed by the plaintiff-appellee, the Court of Appeals modified its Decision of
December 23, 1971 as follows:
IN VIEW OF THE FOREGOING CONSIDERATIONS, We hereby maintain the decision of
December 23, 1971, dismissing the plaintiff's complaint, with the modification that defendant's
counterclaim are also dismissed, without pronouncement as to attorney's fees and costs.
SO ORDERED. (Resolution, October 18, 1972; [Rollo, p. 124])
Not satisfied with the Resolution of its Second Motion for Reconsideration, plaintiff-appellee WELDON
CONSTRUCTION CORPORATION elevated its case to this Tribunal by certiorari under Rule 45 of the Rules of
Court.
1. The Court is called upon to ascertain whether or not a commission of ten per cent (10%) of the total cost of
construction of the Gay Theater building should be paid by the private respondent pursuant to the alleged contract
of supervision of construction which the petitioner seeks to enforce. Stated otherwise, the principal issue
presented is whether the agreement between the parties is a contract of supervision of construction on
commission basis, in which the case commission will be legally demandable, or a construction contract for a
stipulated price which has already been consummated. The ancillary issue is whether or not the petitioner can
recover the cost of additional works on the building. The task at hand entails the interpretation of the true
agreement between the parties, which is in effect an inquiry into the "law" imposed by the parties upon their
contractual relations. Since a contract is in the nature of "law" as between the parties and their successors-in-
interest its interpretation necessarily involves a question of law (Melliza v. City of Iloilo, L-24732, April 30, 1968, 23
SCRA 477, 481) properly raised in this certiorari proceeding under Rule 45.
2. The facts are not disputed. It appears from the records that in 1961 Lucio Lee, whose name was later changed
to Lucio Lee Rodriguez, was doing business under the trade name Weldon Construction, the predecessor-in-
interest of the herein petitioner, WELDON CONSTRUCTION CORPORATION. The latter corporation was
incorporated in July, 1963 as a closed corporation composed of Lucio Tee (owner of Weldon Construction), his
wife, his sister and the latter's husband, and a cousin. The assets of Weldon Construction were transferred to, and
its liabilities assumed by the new corporation. Hence, the instant case was brought by WELDON
CONSTRUCTION CORPORATION as successor-in-interest of Weldon Construction and Lucio Lee.
Prior to March 7, 1961, Lucio Lee drafted plans for a theater-apartment building which private respondent Cancio
intended to put up. Thereafter, on March 7, 1961, he submitted to the latter a proposal (Exhibit "A") for the
supervision of the construction of said building on commission basis. The proposal was signed not by Lee but by
his office manager, Antonio Wong. The private respondent never affixed his signature on the document.
Among the provisions Contained in the proposal was the setting up of a revolving fund of P10,000.00 Pesos for
the costs and expenditures to be incurred in the construction of the building, such as materials and labor among
others (Exhibit "A", par. 1). The fund was to be replenished by the owner of the building from time to time (Id). The
proposal also provided for the payment to Weldon Construction of a commission of ten per cent (10%) of the total
cost of the building (Id., par. 5)
Without having signed the proposal Exhibit "A" or any written agreement on the construction of the building,
private respondent Cancio gave an advance payment of P10,000.00 Pesos. Then, on March 28, 1961, Lee
submitted another proposal (Exhibit "4") this time for the construction of the same building at the stipulated price
of P600,000.00 Pesos. Two days after, Lee sent the private respondent a prepared "Building Contract" (Exhibit
"5") signed by him for the signature of the latter and those of the witnesses. Private respondent did not return the
document to Lee, but the petitioner started the construction of the building. When the document (Exhibit "5") was
later presented in court, it contained the signatures of Lee, as well as the signatures of Manuel Cancio, that of his
wife, giving her marital consent, and those of two witnesses.
As the construction of the theater building shifted to high gear, subsequent payments were made by respondent
Cancio to Weldon Construction as per accomplishment in the varying amounts of P70,000.00 Pesos (Court of
Appeals Decision, Rollo, p. 56; Exhibits "8-18"). The materials were bought and paid for by the contractor,
although the invoices were in the name of the owner, evidently to avoid payment by the former of the three per
cent (3%) contractor's tax. (Court of Appeals Decision, Rollo, p. 59). The invoices, receipts of payment, vouchers
and payrolls were not surrendered to the owner but were kept by the contractor. (Id. p. 57).
Shortly after the completion of the theater building and its delivery to the owner, the latter completed the payment
of the P600,000.00 contract price (CA Decision, Rollo, p. 59). However, Weldon Construction demanded the
payment of P62,378.83 Pesos, as a commission of ten per cent (10%) of the total cost of construction and of
P23,788.32 Pesos as the cost of the "extra works" on the building. The owner Cancio denied the existence of any
agreement on the payment of commission and refused to pay the amounts demanded. Hence, this suit initiated by
the WELDON CONSTRUCTION CORPORATION, the successor-in-interest of Lucio Lee and Weldon
Construction.
3. A careful scrutiny of each and every term and stipulation in the two documents Exhibit "A" and Exhibit ""5"
revealed two differences between them which are crucial to this case. One basic difference between the two
agreements lies in the proposed consideration for the administration or supervision services. Proposed under
Exhibit "A" was Ten Per cent (10%) of the total cost of construction (Exh. "A", par. 5) without a maximum amount
set as a limit on that cost. In contrast, Exhibit "5" sets the stipulated price of the construction of the building at
P600,000.00 Pesos, which is the consideration of the contract (Exhibit "5" par. 4). The other point of divergence is
the manner in which the expenses for labor and materials are provided for. Exhibit "A", sets up a revolving fund of
P10,000.00 Pesos to be paid by the Owner and to be replenished by him from time to time, which fund shall
answer for the various costs of construction including labor and materials (Exh. "A" par. 1). No such fund is
provided for in Exhibit "5" since the Contractor Weldon Construction binds itself to supply the labor and materials
(Exh. "5", par. 2).
The first proposal submitted by Weldon Construction for rendering service under a contract of supervision (Exhibit
"A") is simply that, a proposal. It never attained perfection as the contract between the parties. Only an absolute or
unqualified acceptance of a definite offer manifests the consent necessary to perfect a contract (Article 1319, New
Civil Code). The advance payment of P10,000.00 Pesos was not an unqualified acceptance of the offer contained
in the first proposal (Exhibit "A") as in fact an entirely new proposal (Exhibit "4") was submitted by Weldon
Construction subsequently. If, as claimed by the petitioner, the parties had already agreed upon a contract of
supervision under Exhibit "A," why then was a second proposal made? Res ipsa loquitur. The existence of the
second proposal belies the perfection of any contract arising from the first proposal .
With regard to the second proposal (Exhibit "4") for the construction of the building at a stipulated price, the same
was closely followed by the "Building Contract" (Exhibit "5") signed by Lee, setting forth m detail the proposed
terms and stipulations. Although the petitioner claims that the contract was never returned to its predecessors-in-
interest, it appears upon the face of the document (Exhibit "5") that the same was signed by the contracting
parties and their witnesses. Petitioner does not question the authenticity of the signature of its predecessors-in-
interest, Lucio Lee, appearing on the document (Exhibit "5"). Lee himself has admitted said signature as his.
Petitioner, however, impugns the binding effect of the Building Contract (Exhibit "5") by assailing its due
execution. It cans the attention of the Court to the conclusion of the trial court that the signature of the defendant
(herein private respondent) and that of the witness Martinez were affixed on said contract after its purported date
of execution on March 30, 1961 (Record on Appeal, pp. 89-90).
Petitioner's position is untenable. Once a contract is shown to have been consummated or fully performed by the
parties thereto, its existence and binding effect can no longer be disputed. It is irrelevant and immaterial to dispute
the due execution of a contract. i.e.. the date of signing by one of the parties, if bath of them have in fact
performed their obligations thereunder and their respective signatures and those of their witnesses appear upon
the face of the document.
Thus, even as that the Building Contract in Exhibit "5", was signed by the private respondent only after the Gay
Theater building had been completed and the stipulated price of P600,000.00 Pews fully paid, such fact can no
longer negate the binding effect of that agreement if its existence and especially, its consummation can be
established by other evidence, e.g. by the contemporaneous acts of the parties and their having performed their
respective obligations pursuant to the agreement. As held in Kriedt v. E.C. McCullough & Co., 37 Phil. 474,480
(1918)
. . . Acts done by the parties to a contract in the course of its performance am admissible in
evidence upon the question of its meaning as being their own contemporaneous interpretation
of its terms. (Cited in Manila Electric Company v. Court of Appeals, L-33794, May 31, 1982,
114 SCRA 173, 181)
A similar pronouncement was made by the Court in Shell Company of the Philippines, Ltd. v. Firemen's Insurance
CO. of Newark, 100 Phil. 757 (1957), to wit:
To determine the nature of a contract courts do not have or are not bound to rely upon the
name or title given it by the contracting parties, should there be a controversy as to what they
really had intended to enter into, but the way the contracting parties do or perform their
respective obligations, stipulated or agreed upon may be shown and inquired into, and should
such performance conflict with the name given the contract by the parties, the former must
prevail over the latter (cited in Borromeo v. Court of Appeals, L-22962, September 28, 1972,
47 SCRA 65, 74).
Thus, the manner in which the parties conducted their transactions relating to the construction of the Gay Theater
building indicates whether the parties had intended to be bound by a construction contract for a stipulated price or
by any other agreement. The demandability of the amounts sought to be recovered by the petitioner will depend
on the nature of that agreement.
In this case, the Court finds that the parties adhered to the terms and stipulations of the Building Contract (Exhibit
"5"). After said contract hewing the signature of the contractor Lee was submitted for the signature of the
respondent Cancio, subsequent payments were made by the latter in amounts ranging from P25,000.00 Pesos to
P70,000.00 Pesos. Even granting that the P10,000.00 Pesos advance payment by the owner was set up as a
revolving fund, these relatively large amounts could hardly be considered as mere replenishments of said initial
amount. As correctly reasoned out in the Decision of the Court of Appeal (Rollo, p. 56), replenishments of the
P10,000.00 - peso revolving fund could not exceed that amount. The remittances made by the building owner
were actually partial payments of the contract price of P600,000.00 Pesos, the amount having been based on the
actual accomplishment of the construction during the period covered by the payment. Thus, the receipts issued by
Weldon Construction contained the words, "as per accomplishment" (Exhibits "8"-"18"). The aforecited acts of the
parties with respect to said remittances are in consonance with paragraph 4 of the Building Contract (Exhibit "5"),
to wit:
xxx xxx xxx
4. The Owner shall pay the Contractor the full amount of SIX HUNDRED THOUSAND
(PM,000.00) PESOS Philippine Currency, which payment the Owner shall pay in (sic) the
basis of work accomplished based on breakdowns attached herewith marked Annex "B" and
"C". Such payments shall be paid on the tenth of every month. Ten per cent retention of every
payment shall be retained by the Owner, to be paid upon the completion of the project;
xxx xxx xxx
The inescapable conclusion is that Weldon Construction assumed the obligation to construct the building at the
price fixed by the parties and to furnish both the labor and materials required for the project. It acted as an
independent contractor within the meaning of Article 1713 of the New Civil Code, which states:
ART. 1713. By the contract for a piece of work the contractor binds himself to execute a piece
of work for the employer, in consideration of a certain price or compensation. The contractor
may either employ only his labor or skill or also furnish the materials.
In view of all the foregoing considerations this Court finds that the agreement between the parties is the contract
of construction for a stipulated price contained in Exhibit "5" which is akin to a contract for a piece of work defined
in the aforequoted article. Both parties having fully performed their reciprocal obligations in accordance with said
contract, petitioner is estopped from invoking an entirely different agreement so as to demand additional
consideration. Once a contract has been consummated, there is nothing left to be done or to be demanded by the
parties thereto. All obligations arising from the contract are extinguished.
As set by the parties, the consideration for the construction of the Gay Theater building is P600,000.00 Pesos
which amount has been fully paid by the private respondent. There is no basis for the petitioner's demand for the
payment of P62,378.83 Pesos as commission of ten per cent (10%) of the total cost of construction. The denial of
petitioner's claim for said amount is affirmed.
4. Since the contract between the parties has been established as a contract for a piece of
work for a stipulated price the right of the contractor to recover the cost of additional works
must be governed by Article 1724 quoted as follows:
ART. 1724. The contractor who undertakes to build a structure or any other work for a
stipulated price, in conformity with plans and specifications agreed upon with the landowner
can neither withdraw from the contract or demand an increase in the price on account of the
higher cost of labor or materials, save when there has been a change in the plans and
specifications, provided:
(1) Such change has been authorized by the proprietor in writing; and
(2) The additional price to be paid to the contractor had been determined in writing by both
parties.
This Court has found occasion to expound upon the nature of the requisites prescribed by Article 1724 in the case
of San Diego v. Sayson, L-16258, August 31, 1961, 2 SCRA 1175, 1178-1179, which is in point:
xxx xxx xxx
It will be noted that whereas under the old article recovery for additional costs in a construction
contract can be had if authorization to make such additions tan be proved, the amendment
evidently requires that instead of merely' proving authorization, such authorization must be
made in writing. The evident purpose of the amendment is to prevent litigation for additional
costs incurred by reason of additions or changes in the original plans. Is this additional
requirement of a written authorization, to be considered as a mere extension of the Statute of
Frauds, or is it a substantive provision? That the requirement for a written authorization is not
merely to prohibit admission or oral testimony against the objection of the adverse party, can
be inferred from the fact that the provision is not included among those specified in the Statute
of Frauds, Article 1403 of the Civil Code. As it does not appear to have been intended as an
extension of the Statute of Frauds, it must have been adopted as a substantive provision or a
condition precedent to recovery.
xxx xxx xxx
In addition to the owner's authorization for any change in the plans and specifications, Article 1724 requires that
the additional price to be paid for the contractor be likewise reduced in writing. Compliance with the two requisites
in Article 1724, a specific provision governing additional works, is a condition precedent to recovery (San Diego v.
Sayson, supra). The absence of one or the other bars the recovery of additional costs. Neither the authority for the
changes made nor the additional price to be paid therefor may be proved by any other evidence for purposes of
recovery.
In the case before this Court, the records do not yield any written authority for the changes made on the plans and
specifications of the Gay Theater building. Neither can there be found any written agreement on the additional
priceto be paid for said "extra works." While the trial court may have found in the instant case that the private
respondent admitted his having requested the "extra works" done by the contractor (Record an Appeal, p. 66
[C.F.I. Decision]), this does not save the day for the petitioner. The private respondent claims that the contractor
agreed to make the additions without additional cost. Expectedly, the petitioner vigorously denies said claim of the
private respondent. This is precisely a misunderstanding between parties to a construction agreement which the
lawmakers sought to avoid in prescribing the two requisites under Article 1724 (Report of the Code Commission,
p. 148). And this case is a perfect example of a tedious litigation which had ensued between the parties as a
result of such misunderstanding. Again, this is what the law endeavors to prevent (San Diego v. Sayson, supra).
In the absence of a written authority by the owner for the changes in the plans and specifications of the building
and of a written agreement between the parties on the additional price to be paid to the contractor, as required by
Article 1724, the claim for the cost of additional works on the Gay Theater building must be denied.
WHEREFORE, the judgment of the Court of Appeals in its Decision of December 23, 1971 which was upheld in its
Resolution of October 18, 1972 dismissing the complaint filed by Weldon Construction Corporation is AFFIRMED.
The modification by the Court of Appeals of said Decision in its Resolution of October 18, 1972 which dismissed
the defendant's counterclaims is likewise AFFIRMED. Petition DISMISSED for lack of merit.
SO ORDERED.
Fernan, Gutierrez, Jr., Feliciano and Bidin, JJ., concur.

FIRST DIVISION

[G.R. No. L-56101. February 20, 1984.]

CORAZON PEREZ, Petitioner, v. HON. COURT OF APPEALS and MEVER FILMS,
INCORPORATED,Respondents.

Francisco A. Lava, Jr. for Petitioner.

Alberto O. Villaraza for Private Respondent.

SYLLABUS

1. CIVIL LAW; OBLIGATIONS AND CONTRACTS; COMPENSATION; NOT PROPER WHERE ONE DEBT IS
NOT YET DUE AND DEMANDABLE; CASE AT BAR. Since, on the respective dates of maturity, specifically,
August 6, 1974 and August 13, 1974, respectively, Ramon C. Mojica was still the holder of those bills, it can be
safely assumed that it was he who had asked for the roll-overs on the said dates. MEVER was bound by the roll-
overs since the assignment to it was made only on September 9, 1974. The inevitable result of the roll-overs of
the principals was that Bill No. 1298 and Bill No. 1419 were not yet due and demandable as of the date of their
assignment by MOJICA to MEVER on September 9, 1974, nor as of October 3, 1974 when MEVER surrendered
said Bills to CONGENERIC. As a consequence, no legal compensation could have taken place because, for it to
exist, the two debts, among other requisites, must be due and demandable (Article 1279, Civil Code).

2. REMEDIAL LAW; APPEALS; AUTHORITY OF SUPREME COURT TO REVIEW ERRORS NOT ASSIGNED.
We note that the xerox copies of Bill No. 1298 and Bill No. 1419 attached by MEVER to its Brief do not contain
the "roll-over" notations. However, MEVERs own exhibits before respondent Appellate Court, Exhibits "3" and "3-
A", do show those notations and MEVER must be held bound by them. And although this issue may not have
been squarely raised below, in the interest of substantial justice this Court is not prevented from considering such
a pivotal factual matter that had been overlooked by the Courts below (Heirs of Enrique Zambales v. CA, 120
SCRA 897 [1983]). The Supreme Court is clothed with ample authority to review palpable errors not assigned as
such if it finds that their consideration is necessary in arriving at a just decision (Tumalad v. Vicencio, 41 SCRA
146 [1971]).

3. MERCANTILE LAW; CREDIT TRANSACTIONS; MONEY MARKET TRANSACTION DEFINED. There is
another aspect to this case. What is involved here is a money market transaction. As defined by Lawrence Smith
"the money market is a market dealing in standardized short-term credit instruments (involving large amounts)
where lenders and borrowers do not deal directly with each other but through a middle man or dealer in the open
market." It involves "commercial papers" which are instruments "evidencing indebtedness of any person or entity .
. ., which are issued, endorsed, sold or transferred or in any manner conveyed to another person or entity, with or
without recourse" (The Money Market Industry Today A Question of Survival by Horacio T. Lava, Jr., in the
PNB Quarterly, A Supplement of the Philnabank News, Second Quarter 1978.) The fundamental function of the
money market device in its operation is to match and bring together in a most impersonal manner both the "fund
users" and the "fund suppliers." The money market is an "impersonal market", free from personal considerations."
(The Money Market mechanism is intended to provide quick mobility of money and securities." (Woodworth, p. 5.)

4. ID.; ID.; ID.; NOTICE OF TRANSFER, NOT REQUIRED. The impersonal character of the money market
device overlooks the individuals or entities concerned. The issuer of a commercial paper in the money market
necessarily knows in advance that it would be expeditiously transacted and transferred to any investor/lender
without need of notice to said issuer. In practice, no notification is given to the borrower or issuer of commercial
paper of the sale or transfer to the investor. Accordingly, we find no applicability herein of Article 1285, 3rd
paragraph of the Civil Code. Rather, it is the first paragraph of the same legal provision that is applicable which
states that the debtor who has consented to the assignment of rights made by a creditor in favor of a third person,
cannot set up against the assignor, unless the assignor was notified by the debtor at the time he gave his consent,
that he reserved his right to the compensation.

D E C I S I O N

MELENCIO-HERRERA, J.:

This is a Petition for Review on Certiorari of a Decision of the then Court of Appeals. The relevant facts of the
case may be stated as follows:chanrob1es virtual 1aw library

1. CONGENERIC Development & Finance Corporation is, or was, a company engaged in "money market"
operations

2. (a) On May 8, 1974, CONGENERIC issued what was in effect a promissory note in the amount of P111,973.58
in favor of bearer No. 049, later identified as Ramon C. MOJICA, or an entity owned by him. That promissory note,
denominated hereinafter as Bill 1298, was to mature on August 6, 1974.

(b) On May 15, 1974, CONGENERIC issued another bearer promissory note for the sum of P208,666.67, also in
favor of MOJICA or an entity owned by him. The note, denominated hereinafter as Bill 1419, was to mature on
August 13, 1974.

3. On June 5, 1974, MEVER Films, Inc. the private respondent herein, borrowed P500,000.00 from
CONGENERIC, the former issuing in favor of the latter a negotiable promissory note to mature on August 5, 1974.
That note shall hereinafter be referred to as NCI-0352. What may be stated in connection with the note is that it
had no provision for interest, except that, if not paid on due date, it would be subject to interest at 14% per annum.

4. On July 3, 1974, CONGENERIC received P200,000.00 from petitioner herein (CORAZON, for short), and
issued to her, as BEARER 209, a confirmation of sale (CS) numbered 0366. Under the terms of CS-0366,
CORAZON was to be paid P203,483.33 on August 5, 1974, CONGENERIC would make collection on behalf of
CORAZON; and ALL OF CONGENERICS INTEREST IN NCI-0352 WAS BEING TRANSFERRED TO HER.
Under this last provision, CORAZON, subject to defenses, could have sued MEVER for payment of the full
amount of P500,000.00, specially if CONGENERIC should not object. It may also be noted that while NCI-0352
was not subject to interest prior to August 5, 1974, CONGENERIC obligated itself to pay CORAZON interest on
August 5, 1974 in the amount of P3,483.33, or roughly an interest rate of 19% per annum.

5. (a) On August 5, 1974, MEVER paid P100,000.00 to CONGENERIC on account of NCI-0352.

(b) On the same date of August 5, 1974, CONGENERIC paid CORAZON the sum of P103,483.33, the P3,483.33
coming from its own funds.

6. (a) On August 6, 1974, CONGENERIC paid MOJICA the interest due on Bill 1298, the principal being rolled-
over to mature on October 4, 1974. The roll-over was annotated on the original of Bill 1298.

(b) On August 13, 1974, CONGENERIC paid MOJICA the interest due on Bill 1419, the principal being rolled-over
to mature on October 11, 1974. The roll-over was annotated on Bill 1419.

7. On September 9, 1974, MOJICA assigned Bill 1298 and Bill 1419 to MEVER through a notarized deed.

8. On October 3, 1974, MEVER surrendered the originals of Bill 1298 and Bill 1419 to CONGENERIC, and asked
the latter to compute the balance of the account of MEVER with CONGENERIC, taking account of the amounts of
the two Bills, which balance MEVER would then pay.

9. (a) On October 7, 1974, MEVER was served with garnishment by the Provincial Sheriff of Rizal in two collection
cases filed against CONGENERIC by two of its creditors whose credits totaled P185,693.78.

(b) On the same date of October 7, 1974, CONGENERIC advised MEVER by telephone that of the original
amount of P500,000.00 of NCI-0352, the sum of P200,000.00 was sold on July 3, 1974 to a third party, but not
naming CORAZON as the third party.

10. On October 8, 1974, CONGENERIC confirmed in writing to MEVER the previous "sale" of P200,000.00 out of
the P500,000.00 amount of NCI-0352; and advised that it could not take account of the assignment to MEVER of
Bill 1298 and Bill 1419.

11. On November 15, 1974, MEVER turned over to the Provincial Sheriff of Rizal (Exhibit "5"), the sum of
P79,359.75, which MEVER had computed as the amount it was still owing CONGENERIC and which was subject
to garnishment.

12. (a) On October 23, 1974, CONGENERIC filed a Petition for Suspension of Payments in Civil Case No. 20212
of the Court of First Instance of Rizal. In that petition, MEVER was listed as a debtor.

(b) On November 11, 1974, the Court issued an order enjoining CONGENERIC from making any payment to
creditors.

13. In subsequent proceedings in Civil Case No. 20212, the Court promulgated an Order, dated January 24, 1975
(Exhibit "10"), to the effect that MEVER was not a debtor of CONGENERIC, and said Order has become final.

14. (a) On July 14, 1975, CORAZON filed suit before the Court of First Instance of Rizal against MEVER for the
recovery of P100,000.00, plus interest, damages, and attorneys fees. She admits that CS-0366 issued to her by
CONGENERIC was a "without recourse" instrument.

(b) The Trial Court rendered judgment in favor of CORAZON and, upon her filing a bond, she was able to have
execution pending appeal. MEVER had to pay her P131,166.00 under the Trial Courts judgment.

(c) On Mevers appeal, the Court of Appeals reversed the judgment of the Trial Court.

Before us, petitioner has made the following Assignments of Error:chanrob1es virtual 1aw library

A.

"Respondent Court of Appeals erred gravely in applying Article 1626 of the Civil Code, which refers to a debtor
who pays his creditor before knowledge of an assignment, when what is involved principally in the case at bar is
compensation rather than payment.

B.

"Respondent Court of Appeals erred gravely in completely disregarding the essentially impersonal, fluid and
mobile nature of money market transactions.

C.

"Respondent Court of Appeals erred gravely in completely disregarding the vital circumstance that respondent
Mever Films, Inc. necessarily consented in advance to the purchase by petitioner Corazon Perez of part of its
obligation under its Negotiable Certificate of Indebtedness (NCI).

D.

"Respondent Court of Appeals erred gravely in applying the third parag. of Article 1285 of the Civil Code allowing
compensation of credits if assignment of credit is made without knowledge of the debtor, and in not applying the
first paragraph of said Article 1285 barring the defense of compensation where the debtor has consented to the
assignment of rights in favor of a third person.

E.

"Respondent Court of Appeals erred gravely in holding that compensation had set in and reduced respondent
Mevers obligation to P79,359.75.

F.

"Respondent Court of Appeals erred gravely in holding that payment by respondent Mever of P79,359.75 to the
Sheriff in connection with garnishment in certain civil cases against Congeneric extinguished Mevers obligation
and could be set up as another defense to the claim of petitioner Corazon Perez.

G.

"Respondent Court of Appeals erred gravely in reversing the decision of the Trial Court, in denying the motion for
reconsideration of petitioner Corazon Perez, and in granting respondent Mevers motion for resolution and/or
clarification by ordering refund of P139,141.63 with interest at 14% per annum, and ordering payment of
P10,000.00 as attorneys fees." 1

The foregoing take issue with the following observations and findings of respondent Appellate
Court:jgc:chanrobles.com.ph

". . . We agree with the appellant (MEVER) that there was legal compensation under Article 1279 of the New Civil
Code which caused the extinguishment of the obligation under Negotiable Certificate of Indebtedness No. 0352.

"The original obligation of defendant-appellant to Congeneric is P500,000.00 (Exhibit 1) out of which it paid
P100,000.00 on the maturity date of the note leaving a balance of P400,000.00.

"By a Deed of Assignment dated September 9, 1974 executed by Ramon C. Mojica in favor of the appellant
(Exhibit 2), the latter acquired the rights of the assignor to two Congeneric bills Nos. 1298 for P111,973.58 which
matured on August 6, 1974 (Exhibit 3) and No. 1419 for P208,666.67 which matured on August 13, 1974 (Exhibit
4) or a total of P320,640.25. As of September 9, 1974, therefore, said bills were already due and demandable.

"On the other hand, appellants obligation in favor of Congeneric matured on August 5, 1974. As a result
defendant-appellant became both a debtor and a creditor of Congeneric. A debtor to the extent of P400,000.00
under the Negotiable Certificate of Indebtedness (Exhibit 1) and a creditor for the sum of P320,640.25. By
operation of law, there was partial compensation to the extent of P320,640.25 (Articles 1281 & 1290, New Civil
Code).
x x x


"As a consequence of compensation, the obligation of defendant-appellant to Congeneric as of September 9,
1974 was reduced to P79,359.75.

"On October 7, 1974, Defendant-Appellant was served notices of garnishment in connection with Civil Cases Nos.
20043 and 20044 of the Court of First Instance of Rizal against Congeneric. It consists in the citation of some
stranger to the litigation, who is debtor to one of the parties to the action. By this means such debtor stranger
becomes a forced intervenor, and the court, having acquired jurisdiction over his person by means of the citation,
requires him to pay his debt, not to his former creditor, but to the new creditor, who is the creditor in the main
litigation. It is merely a case of involuntary novation by the substitution of one creditor for another (Tayabas Land
Co. v. Sharuff, 41 Phil. 382, 387). Consequently, Defendant-Appellant held the amount it still owed Congeneric,
which is P79,359.75, as any payment to the creditor by the debtor after the latter has been judicially ordered to
retain the debt shall not be valid (see Article 1243, New Civil Code). On November 15, 1975, the garnished
amount was delivered by the appellant to the deputy sheriff (Exhibit 5). Consequently, the balance of the
obligation of defendant-appellant to Congeneric in the sum of P79,359.75 was extinguished and therefore no
longer obligated under its Negotiable Certificate of Indebtedness.

". . . the evidence on record disclosed no notice to defendant-appellant of the purchase by appellee of part of
defendant-appellants obligation prior to compensation and consequently its non-liability to appellee.

"Prior to the telephone call of Mr. Dumadag to Mr. Jesus G. Sanchez on October 7, 1974 disclosing the sale to
appellee by Congeneric of part of its promissory note, appellant was unaware of the sale. In fact, it was the first
time that it came to know of the transaction (tsn. pp. 11-12 S, August 10, 1976) so much so that upon maturity of
the note on August 5, 1974, appellant made a partial payment of P100,000.00 not to appellee but to Congeneric.
The telephone advice to the appellant which was confirmed in writing or October 8, 1974 was too late. By that
time the entire obligation of appellant was already extinguished by payment, compensation and novation. A debtor
who, before having knowledge of the assignment, pays his creditor is released from his obligation (Article 1626,
New Civil Code).

"Appellant correctly invoked compensation as a defense, for under Article 1285, 3rd paragraph

If the assignment is made without the knowledge of the debtor, he may set up compensation of all credits prior to
the same and also later ones until he had knowledge of the assignment."

If, in fact, Bill No. 1298 and Bill No. 1419 were due and demandable on September 9, 1974, the date of the
assignment from MOJICA to MEVER, or on October 3, 1974, the date of surrender of said Bills by MEVER to
CONGENERIC, it could be rightfully said that legal compensation had taken place. As pointed out by CORAZON,
however, said two bills contain the following notations:jgc:chanrobles.com.ph

"Bill No. 1298 Paid 8/6/74 interest only, principal roll over up to 10/4/74 (Annexes A-1, A-2, Petitioners Reply
Brief; Exh. 3, Folder of Exhibits).

"Bill No. 1419 Paid 8/13/74 interest only, principal roll over up to 10/11/74 (Annexes A, A-3, ibid.; Exh. 3-A,
Folder of Exhibits).

Since, on the respective dates of maturity, specifically, August 6, 1974 and August 13, 1974, respectively, Ramon
C. Mojica was still the holder of those bills, it can be safely assumed that it was he who had asked for the roll-
overs on the said dates. MEVER was bound by the roll-overs since the assignment to it was made only on
September 9, 1974. The inevitable result of the roll-overs of the principals was that Bill No. 1298 and Bill No. 1419
were not yet due and demandable as of the date of their assignment by MOJICA to MEVER on September 9,
1974, nor as of October 3, 1974 when MEVER surrendered said Bills to CONGENERIC. As a consequence, no
legal compensation could have taken place because, for it to exist, the two debts, among other requisites, must be
due and demandable.chanrobles.com:cralaw:red

"Art. 1279. In order that compensation may be proper, it is necessary:jgc:chanrobles.com.ph

"(1) That each one of the obligors be found principally, and that he be at the same time a principal creditor of the
other;

"(2) That both debts consist in a sum of money, or if the things due are consumable, they be of the same kind,
and also of the same quality if the latter has been stated;

"(3) That the two debts be due;

"(4) That they be liquidated and demandable;

"(5) That over neither of them there be any retention or controversy, commenced by third persons and
communicated in due time to the debtor."cralaw virtua1aw library

We note that the xerox copies of Bill No. 1298 and Bill No. 1419 attached by MEVER to its Brief do not contain the
"roll-over" notations. However, MEVERs own exhibits before respondent Appellate Court, Exhibits "3" and "3-A",
do show those notations and MEVER must be held bound by them. And although this issue may not have been
squarely raised below, in the interest of substantial justice this Court is not prevented from considering such a
pivotal factual matter that had been overlooked by the Courts below. 2 The Supreme Court is clothed with ample
authority to review palpable errors not assigned as such if it finds that their consideration is necessary in arriving
at a just decision. 3

There is another aspect to this case. What is involved here is a money market transaction. As defined by
Lawrence Smith "the money market is a market dealing in standardized short-term credit instruments (involving
large amounts) where lenders and borrowers do not deal directly with each other but through a middle man or
dealer in the open market." It involves "commercial papers" which are instruments "evidencing indebtedness of
any person or entity . . ., which are issued, endorsed, sold or transferred or in any manner conveyed to another
person or entity, with or without recourse." 4 The fundamental function of the money market device in its operation
is to match and bring together in a most impersonal manner both the "fund users" and the "fund suppliers." The
money market is an "impersonal market", free from personal considerations." 5 The market mechanism is
intended to provide quick mobility of money and securities." 6

The impersonal character of the money market device overlooks the individuals or entities concerned. The issuer
of a commercial paper in the money market necessarily knows in advance that it would be expeditiously
transacted and transferred to any investor/lender without need of notice to said issuer. In practice, no notification
is given to the borrower or issuer of commercial paper of the sale or transfer to the investor.

Accordingly, we find no applicability herein of Article 1285, 3rd paragraph of the Civil Code. Rather, it is the first
paragraph of the same legal provision that is applicable:jgc:chanrobles.com.ph

"ART. 1285. The debtor who has consented to the assignment of rights made by a creditor in favor of a third
person, cannot set up against the assignee the compensation which would pertain to him against the assignor,
unless the assignor was notified by the debtor at the time he gave his consent, that he reserved his right to the
compensation."cralaw virtua1aw library
x x x


There is need to individuate a money market transaction, a relatively novel institution in the Philippine commercial
scene. It has been intended to facilitate the flow and acquisition of capital on an impersonal basis. And as
specifically required by Presidential Decree No. 678, the investing public must be given adequate and effective
protection in availing of the credit of a borrower in the commercial paper market.

WHEREFORE, the judgment of respondent Appellate Court, dated September 3, 1979 as well as its Resolution
dated January 16, 1981 is hereby reversed, and that of the then Court of First Instance of Manila, Branch XXXI,
dated December 27, 1976, hereby reinstated.

SO ORDERED.

Teehankee (Chairman), Plana, Relova and Gutierrez, Jr., JJ., concur.

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
November 29, 1968
G.R. No. L-18661
THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
JOSE ALTO, ET AL., defendants-appellants.
Office of the Solicitor General Arturo A. Alafriz Assistant Solicitor General Antonio G. Ibarra and Solicitor Raul I.
Goco for plaintiff-appellee.
Alfonso G. Espinosa, Ricardo Paras and Celso Jamora for defendants-appellants.
CASTRO, J.:
On December 7, 1956 an indictment for multiple murder (criminal case 4167) and another for frustrated multiple
murder (criminal case 4181) were filed with the Court of First Instance of Nueva Ecija.
In criminal case 4167, Jose Alto, Bienvenido Almuete, Melencio Gregorio, Melchor de Leon, Melencio Marcos,
Pedro Paras and Ismael Dungao were charged with multiple murder, committed, in the language of the
information, as follows:
That on or about the 15th day of December, 1951, in the Municipality of Quezon, Province of Nueva Ecija,
Republic of the Philippines, and within the jurisdiction of this Honorable Court, the abovenamed defendants, Jose
Alto, alias "Alonso", Bienvenido Almuete alias "Almo", Melencio Gregorio alias "Melencio", Melchor de Leon alias
"Commander Melchor", alias "Melchor", Melencio Marcos alias "Commander Rodil", Pedro Paras alias "Golong"
and several others whose names and identities are still unknown, all armed members of the HMB Organization,
conspiring together and mutually helping one another, with intent to kill, treachery and evident premeditation, night
time purposely sought to facilitate the commission of the crime with impunity and in consideration of the reward of
P2,000.00 made by the accused Jose Alto, did then and there wilfully, unlawfully, criminally, feloniously and
illegally waylay and ambush Mayor Eduardo Joson, Cayetano Tangunan, Pedro Elvinia, Simplicio Siazon, and
their other companions while on their way to reinforce the TPs at Barrio Bertese, Quezon, Nueva Ecija, and fire
and shoot at said Mayor Eduardo L. Joson and his companions as a result of which, Cayetano Tangunan, Pedro
Elvinia and Simplicio Siazon received various fatal and serious gunshot wounds in different parts of their bodies
which caused their instantaneous death.
Of the above-named accused only Jose Alto, Bienvenido Almuete, Melencio Marcos, Melencio Gregorio and
Ismael Dungao stood trial. The rest were either at large or already dead.
In criminal case 4181, Jose Alto, Melchor de Leon, Pedro Paras, Ismael Dungao, Melencio Gregorio and others
were charged with multiple frustrated murder. The information recites:
That on or about November 12, 1950, in the Municipality of Sto. Domingo, Province of Nueva Ecija, Republic of
the Philippines, and within the jurisdiction of this Honorable Court, the said defendants, Jose Alto alias "Alonso",
Melchor de Leon alias "Melchor", John Doe alias "Johnny", Pedro Paras alias "Golong", Ismael Dungao alias
"Maeng", Melencio Gregorio alias "Melencio", and several others whose names and identities are still unknown,
all armed members of the Huk Organization, conspiring together and mutually helping one another, with intent to
kill, evident premeditation and at the instigation of the accused Jose Alto alias "Alonso", who paid P2,000.00 to his
co-accused as a reward for the killing of Mayor Eduardo L. Jocson, of Quezon, Nueva Ecija, did then and there
wilfully, unlawfully, feloniously, criminal and illegally waylay and ambush said Mayor Eduardo L. Joson while riding
in a jeep accompanied by Araceli N. Joson, Consuelo L. Joson, Vicente Bautista, and Tomas N. Joson on their
way from Sto. Domingo to Quezon and fire and shoot at said Mayor Eduardo L. Joson and his companions, said
accused having performed all the acts of execution which should have produced the crime of multiple murder as a
consequence but which nevertheless did not produce it by reason of causes independent of the will of the said
accused and as a result of which serious physical injuries were inflicted upon the bodies of Eduardo L. Joson,
Araceli N. Joson and Consuelo L. Joson, necessitating their hospitalization for quite sometime.
Of the above-named accused only Jose Alto, Ismael Dungao and Melencio Gregorio stood trial. The others were
either at large or already dead.
After a protracted trial at which the prosecution presented separate evidence for each of the two cases while the
defense introduced joint evidence for both cases, the trial court, on May 3, 1961, or almost five years after the
filing of the two informations, rendered judgment as follows:
WHEREFORE, in Criminal Case No. 4167, the accused Jose Alto, Bienvenido Almuete, Melencio Gregorio, and
Melencio Marcos are each sentenced to three reclusion perpetua for the death of Cayetano Tangunan, Pedro
Elvina and Simplicio Siazon, and to pay the heirs of each of the said victims P6,000.00 and the costs of the suit.
Ismael Dungao is acquitted for lack of evidence. In Criminal Case No. 4181, the accused Jose Alto, Ismael
Dungao, and Melencio Gregorio are each sentenced to four (4) indeterminate penalties, each of four years, two
months and one day of prision correccional, as minimum, to twelve years five months and eleven days
of reclusion temporal, as maximum, to indemnify the offended parties in the total amount of P10,000.00, for the
frustrated murder of Eduardo Joson, Consuelo Noriel, Tomas Joson and Vicente Bautista, and to pay the costs of
the suit; provided, however, that the maximum penalty to be served by the accused Jose Alto, Melencio Gregorio,
Melencio Marcos, and Bienvenido Almuete shall not exceed threefold of the severest penalty and in no case shall
it exceed 40 years. The accused shall pay the costs. The accused should be credited with one-half of their
preventive imprisonment.
From this decision, all the defendants except Bienvenido Almuete, appealed directly and separately to this Court.
The appeals of Melencio Gregorio,[[1]] Melencio Marcos[[2]]and Ismael Dungao[[3]] were subsequently withdrawn
by them. We are here therefore concerned solely with the appeal of Jose Alto.
The following are the uncontroverted salient facts: (1) In the years 1949, 1950, and 1951 Nueva Ecija was a Huk-
infested province. Frequent clashes took place during that period between the dissidents and the temporary police
(T.P.) and the "civilian guards" of the various municipalities. In the municipality of Quezon, in particular, the then
incumbent Mayor Eduardo L. Joson, the principal complainant in both cases, led a vigorous and unrelenting
campaign against the Huks. (2) In the local elections of 1947 and 1951 Eduardo Joson and Jose Alto were the
major candidates for the mayoralty of Quezon, Nueva Ecija. Joson won over Alto in both elections. The latter
admitted that after the 1947 election he chanced to remark that he had been cheated because "the civilian guards
of Mayor Joson had carried away the ballot boxes." However, he never filed any formal protest. (3) On November
12, 1950, at the junction of Sto. Domingo and Quezon, Nueva Ecija, dissidents ambushed Joson who was
returning to Quezon in a jeep with an aide and members of his family. Mayor Joson, Vicente Bautista, Consuelo L.
Joson, Arcaceli Joson and Tomas Joson sustained serious physical injuries. (4) On December 15, 1951, at Curva,
Quezon, the Huks ambushed Mayor Joson and some regular and temporary policemen of Quezon while these
were on their way to reinforce the temporary detachment detailed at barrio Bartese. As a result, policemen
Cayetano Tangunan, Pedro Alvinia and Simplicio Siazon of Quezon were slain.
The appellant Alto was linked to the two offenses solely on the basis of the price or reward of P2,000 he allegedly
had given to the Huks for the liquidation of Mayor Joson.
The complete measure of the evidence on record inculpating the appellant as principal inducement is the totality
of the declarations of prosecution witnesses Laureano Salvador, Toribio Garcia and Dominador Pineda and a
sworn statement of Melencio Marcos, one of the accused.
In adjudging the appellant guilty, the trial court almost wholly relied upon the testimony of Laureano Salvador.
What is Salvador's story? He testified that he was "in charge" of the Tanggulang Bayan[[4]] in barrio Parukot,
Quezon, Nueva Ecija from 1946 to 1952. (In this latter year he surrendered to the authorities and severed his
connections with the Huks. In such capacity, he operated under the command of Isaac Francisco who was the
supreme leader of the various Tanggulang Bayan units in Quezon and the neighboring localities. At the behest of
Francisco, he attended a meeting at the house of Carlos Gabriel around the middle of August, 1950. Present at
the meeting, aside from Francisco and Salvador, were commanders Marcial, Melchor and Reyes. Francisco
informed them that Jose Alto had offered P2,000 for the liquidation of Mayor Joson, and those present
unanimously agreed to the proposal. More than two months later, or more specifically on the day following All
Saints' Day (November 2, 1950), Salvador went with Francisco to the house of Jose Alto in the poblacion of
Quezon where they conveyed to the latter the acceptance by the Huk commanders of the appellant's proposition.
Alto then gave to Francisco the promised P2,000, with the explicit instructions that the money be delivered to
commander Marcial and that the ambush of Mayor Joson be effected. Forthwith, the two emissaries left. On the
afternoon of the same day they proceeded to Pantok in barrio Parukot, a part of the land owned by Alto, where
Francisco delivered the P2,000 to commander Marcial in the presence of commanders Melchor and Reyes and
another person whom Salvador could not identify. Francisco informed the Huk commanders about Alto's
instructions. The commanders then issued a receipt for P2,000, and swore by raising their hands that, they
had received the money. After this occasion, he never again saw Marcial, Melchor and Reyes. He admitted that
he did not witness the two ambushes in question.
Because the principal foundation of the entire case against the appellant is Salvador's testimony, it behooved us
to scrutinize and examine it with painstaking care. Even after three readings of the entire transcript, we must
confess that we are unable to shake off nagging doubt as to the veracity of Salvador's declarations.
1. To begin with, his testimony is utterly uncorroborated in its vital points. As far as the record goes and we
have repeatedly probed the four corners of the record Salvador was the only eyewitness to the handing by Alto
of the amount of P2,000 to Francisco and the subsequent delivery by the latter to Marcial. The two other
witnesses, Toribio Garcia and Dominador Pineda, were not privy to the passing of the money from hand to hand.
The sworn statement of Melencio Marcos speaks of knowledge supposedly acquired by him after the money had
been delivered. On top of this, Francisco, who was allegedly with Salvador when the money was given by Alto is
already dead and therefore cannot be cross-examined.
This uncorroborated testimony of Salvador is considerably enfeebled by his own admission that he was an
accomplice. Although the law does not exclude evidence given by an accomplice, our jurisprudence has
consistently enjoined courts, in the appreciation of such evidence, to exercise the greatest degree of caution and
circumspection. In People vs. Asinas,[[5]] this Court emphasized "that a defendant in a criminal case cannot be
convicted on the evidence of an accomplice only, and to sustain such conviction, there must be other evidence
corroborating that of the accomplice which tends to show the guilt of the defendant." In an earlier case, this Court
stated that the testimony of an accomplice "must be assayed and weighed with scrupulous care," and that "the
corroborating testimony must be strong and convincing."[[6]] And the proper test to determine whether there is
sufficient corroboration of the testimony of an accomplice is to "examine the evidence or evidences of the other
witness or witnesses with a view to ascertaining if there be inculpatory evidence evidence tending to connect
the defendant with the offense. If there is, the accomplice is corroborated; if there is no inculpatory evidence there
is no corroboration, although the accomplice may be corroborated in regard to any number of facts sworn to by
him."[[7]]
2. The intrinsic and basic inverisimilitude of Salvador's testimony is underscored by his repetitious invocation of
dead persons like Francisco and Marcial who can never be confronted by the accused. The defense proved the
fact of death of Francisco and Marcial by presenting their respective death certificates (exh. 3-A and exh. 3-E,
respectively). Salvador himself, in his affidavit, owned that he knew at the time he was testifying in court that
Francisco was already dead, as was Carlos Gabriel in whose house the alleged initial meeting took place (exh.
C).
3. Not only is the testimony of Salvador uncorroborated in its essential points; it is gravely flawed by a plethora of
material contradictions. To mention only a glaring few.
(a) During the trial Salvador declared that he and Francisco went to the house of Alto on the day following All
Saints' Day (November 2, 1950) in order to convey to the appellant the adherence of the Huk commanders to his
proposal and to receive the promised reward. Thus
Q. Now, sometime in November, 1950, did you have occasion of seeing the accused Jose Alto?
A. I saw him sir.
Q. Can you give the precise time and date when you saw him in that month of November, 1950?
A. I could.
Q. Please state it.
A. The next day after All Saints' Day of November.
Q. What time of the day did you see him?
A. At about 8:00 more or less.
Q. Day or night?
A. In the morning.
Q. Where?
A. In his house, sir.
Q. Were you alone or in company?
A. I was in company.
Q. Who was your companion?
A. Isaac Francisco.
Q. Were you able to see him that morning, and will you please state to the court what transpired between you and
the accused Jose Alto?
A. We met in his house, sir, and Isaac Francisco and I told Jose Alto about our agreement with the Huks.
Q. What was that agreement with the Huks which you told Jose Alto?
A. The agreement we have had was that for Jose Alto to give P2,000 for the ambush of Mayor Joson.
Q. After you have conveyed to the accused Jose Alto that agreement of the Huk commanders that you have
mentioned, what did the accused Jose Alto say?
A. The answer he made to me and to Isaac Francisco was "If they would agree, I will give P2,000.00," and it was
then when he invited us to go upstairs in his house.
Q. You stated that the accused Jose Alto gave P2,000.00. To whom did he give the P2,000.00?
A. To Isaac Francisco.
The above declarations contradict his previous statement made at the preliminary investigation to the effect that
he and Francisco went to the house of Jose Alto to get the money after only a few days had passed from the time
the meeting was allegedly held, which was around the middle of August 1950 or still within the month of
August! We quote the pertinent portion of the transcript:
T. Anong buan noon ng kayo ay kapulungin ni Isaac Francisco?
S. Buan po ng Agosto taong 1950.
T. Nagpunta ba kayo doun sa bahay ni Carlos Gabriel?.
S. Nagpunta po.
T. Ano and nangyari doon sa bahay ni Carlos Gabriel?
S. Nagpulong po kami nila Isaac Francisco, Commander Melchor, Commander Marcial, Commander Reyes, at
saka isa pang hindi ko kilala.
T. Ano ang inyong pinagpulungan?
S. Nagpahayag po si Isaac Francisco na ang ating pagpupulungan ay tungkol po kay Mayor Joson ng magbibigay
raw po si Jose Alto ng dalawang libong piso para liquidahin si Mayor Joson. Ang sagot po nila Commander
Melchor, Commander Marcial, Commander Reyes ng ayos.
T. Pagkatapos noung pulong na iyon ay ano ang nangyari?
S. Umowi na po kame at nagpaliban kami ng ilang araw at nagpunta kami sa bahay ni Jose Alto.
T. Sino ang kasama ninyo?
S. Si Isaac Francisco po.
T. Napunta ba kayo sa bahay ni Jose Alto?
S. Napunta po kami.
T. Ano ang nangyari sa bahay ni Jose Alto?
S. Dinaanan po namin sa lupa at niyaya po kami sa itaas at ng kami po ay nasa itaas ay itinanong ni Isaac
Francisco kay Jose Alto na papano ba young ating pinag-usapan. Ang sagot po ni Mr. Jose Alto ay ibibigay ko
ang halagang dalawang libong piso, isagawa lamang ang pagtambang kay Mayor Joson.
T. Naibigay ba noung araw ang halagang dalawang libong piso?
S. Naibigay po. (Preliminary investigation conducted by Judge Ignacio Lustre of the Justice of the Peace Court of
Quezon on July 1, 1955.)
(b) In a previous testimony (exh. N) Salvador categorically stated that he did not know the real name of
Commander Melchor. At the trial, however, he testified that he knew Melchor because they were "in-laws"
(magbilas). It stands to reason that Salvador should have known the real name of Melchor, especially so when
both resided in the same community and belonged to the same subversive organization.
(c) Salvador declared that after he and Francisco delivered the money to Marcial, at no occasion did he again see
Marcial, Reyes and Melchor. This contradicts his previous affirmation that he saw Melchor in December, 1951
when the latter told him about the plot to ambush Mayor Joson at Curva (exh. N).
4. Furthermore, the long continued silence of Salvador for a duration of almost four years before he
suddenly volunteered to testify for the prosecution, engenders serious doubt as to his motives and renders his
testimony suspect. Of course he tried to justify his long silence by saying that he feared reprisal from the Huks. To
our mind, this is preposterous for did he in 1952 have any apprehensions about incurring the animosity of his
comrades when he deserted them and jumped over to the side of the law and the duly constituted authorities? If
indeed he had knowledge of the events, as he professed he had, why did he not make report of them earlier, or in
1952 when he abandoned his arrant ways and retraced his steps to the path of the law? In People vs. Marcos, et
al,[[8]] a witness for the prosecution claimed to have been present in the various stages of a conspiracy and to
have participated in the commission of the offense. Nevertheless he remained silent for approximately three
years. This Court took a dim view of the witness' "long continued silence" and his motives for breaking his silence,
saying, in no uncertain terms, that the change of attitude "could have not been due to a desirable impulse to serve
the interest of justice and proves, if it proves anything at all, the tardy revival of stultified civic consciousness."
5. Finally, the testimony of Salvador was traversed to his very core not only by the appellant Alto but more
importantly by Lucia Vda. de Gabriel, the widow of Carlos Gabriel in whose house the alleged initial meeting in the
middle of August, 1950 took place. The transcript speaks for itself.
Testimony of Alta:
Q. You said you had seen the person of Laureano Salvador this morning in the provincial jail. Was this morning
your first time to see him?
A. No, sir.
Q. When did you see him before today?
A. The first time when he testified against me.
Q. In these cases at bar?
A. Yes, sir.
Q. Do you know Commander Marcial?
A. No, sir, I do not know him.
Q. Do you know Commander Reyes?
A. No, sir, I do not know him.
Q. According to this Laureano Salvador, he and Isaac Francisco went to see you at your house in Quezon, Nueva
Ecija, somewhere in 1950 and during that occasion you delivered P2,000.00 to Isaac Francisco to be delivered to
commander Marcial, is that true or not?
A. That is not true.
Q. In November, 1950, that is after All Saints' Day where were you?
A. I was at home in Quezon, Nueva Ecija.
Q. In your drugstore?
A. Yes, sir.
Q. According to Laureano Salvador testifying before this Honorable Court on May 3, 1957, this Laureano Salvador
and Isaac Francisco talked with you in your house at Quezon and the subject matter of your conversation was
your agreement with the huks. Is it true you talked with Isaac Francisco and Laureano Salvador on the day after
All Saints' Day of November, 1950 at your house in Quezon?
A. No, sir, that is not true.
Q. He also stated that there was an agreement between you and the Huks that you would give P2,000.00 for the
ambush of Mayor Joson on the same occasion he testified before this Honorable Court on May 3, 1957, also
regarding the agreement between you and the Huks that you would give P2,000.00 for the ambush of Mayor
Joson?
A. There was no such agreement.
The appellant likewise denied knowing Carlos Gabriel and Isaac Francisco. Thus:
Q. Do you know Carlos Gabriel?
A. I do not know him.
Q. But do you know Isaac Francisco?
A. Neither I know.
Testimony of Lucia Vda. de Gabriel:
Q. Do you know Carlos Gabriel?
A. He was my husband, sir.
Q. Where is Carlos Gabriel now?
A. He is already dead.
Q. Where did he die?
A. In Parukot, sir.
Q. When did he die?
A. Long time ago already, about eight years ago, sir.
Q. When your husband died about eight years ago where were you residing?
A. At Parukot, sir.
Q. Do you have a house in Parukot?
A. Yes, sir.
Q. In 1950 you had a house in Parukot?
A. Yes, sir.
Q. According to the declaration of Laureano Salvador before this Honorable Court, he declared that in the month
of August, 1950, during the night thereof, Isaac Francisco, Carlos Gabriel, Commander Melchor, Commander
Marcial, Commander Reyes and one he could not identify in name gathered in your house in Parukot, Quezon,
Nueva Ecija, and on that occasion Jose Alto offered to give P2,000.00 and in fact gave P2,000.00 to Isaac
Francisco after the meeting in your house in Parukot, Quezon, Nueva Ecija, in 1950, is that correct?
A. No, sir.
Q. Have your house been the meeting place of the Huks during the period, that year 1950?
A. No, sir.
Q. In 1951 to 1953 had there been any meeting of the Huks in your house?
A. No, sir.
Q. Had the premises around your house been the meeting place of Huks from 1949 to 1953?
A. No, sir.
Of incalculable import is the fact that Lucia's disavowal of any meeting in her house attended by Francisco,
Salvador and Alto was never rebutted by the prosecution.
II.
The second witness for the prosecution, Toribio Garcia, testified at length on Alto's alleged cabals with the Huks in
furtherance of the conspiracy to liquidate Joson. At the outset, it bears emphasis that Garcia does not lay claim to
any personal knowledge that Alto gave P2,000 to the Huks, or more particularly to Isaac Francisco, not that the
said amount was in fact delivered by the latter to Marcial.
Let us examine Garcia's story. Since 1946, so he declared, he had been a member of theHukbong Mapagpalaya
ng Bayan, otherwise known as the HMB. He abandoned this organization in September, 1951 when he
surrendered at Camp Murphy to General Duque. In 1950 Ramson was in command of the HMB military forces in
Nueva Ecija, Estrada of the 12th field unit which embraced Quezon and Sto. Domingo in its area of operations.
Upon instructions of Ramson and Estrada, Garcia used to procure medicines and rice from Alto. In the year 1950
he saw and met Alto thrice: in barrioOsmea around the middle of October, in Pantok (Parukot) toward the end of
October, and in Malayok about the end of December. When he met Alto in Osmea, the latter was looking for
Estrada in order to inquire why the agreement regarding Joson had not yet been implemented. He told Alto that
he would relay the inquiry to Estrada. Before he left, Alto said that the Huks must send for him the moment they
were in the vicinity. When he later met Alto in Pantok, the latter was accompanied by Laureano Salvador and
Isaac Francisco. Also present at this meeting were Estrada and himself. Alto remarked that "Ding" referring to
Joson could already be ambushed because he used to commute between Sto. Domingo and Quezon. Estrada
told Alto that although he could no longer direct the ambush because he had been assigned to Laguna, he would
nevertheless assign Marcial and Melchor to effect it, and added that money should be given to Marcial. Garcia did
not witness the ambush staged on November 12, 1950, although he later learned about it from Marcial.
Subsequently, he met Alto in Malayok, toward the end of December, 1950. Alto was then with Paulino Santiago
while he (Garcia) was with Estrada. At this meeting Alto remarked that "Ding" could not be ambushed anymore
because he was always "ready," and that they should wait a few months. Estrada agreed, adding that a new plan
was necessary.
1. We are of the view that Garcia's version is not entitled to credence. Of the array of prosecution witnesses, only
Garcia testified on the alleged meetings had by Alto with the Huks concerning the liquidation of Joson. Not even
the principal witness, Laureano Salvador, made any advertence to the meetings allegedly had at Osmea,
Parukot and Malayok. Garcia was categorical on the presence of Salvador at the meeting between the appellant
and Estrada in Parukot. But Salvador never even as much as hinted at this conference, and as a matter of fact he
denied having had any conversation with Alto prior to November 2, 1950.
The drift of Garcia's declarations is that the conspiracy to liquidate Joson was originally conceived by Estrada and
Alto, and that Marcial and Melchor learned of the plot only after the meeting in Parukot had toward the end of
October, 1950, at which time Estrada informed Alto that he could not anymore direct the ambush as he had been
assigned to Laguna. This belies the asseveration of Salvador that the conspiracy was forged in the middle of
August, 1950, when Francisco for the first time relayed to Marcial, Melchor and Reyes the appellant's offer.
Salvador testified thus:
COURT:
Q. The Court understands that you and Isaac Francisco had entered into the agreement with Commanders Reyes
and Melchor and two other parties to ambush Mayor Joson for P2,000.00. Is that correct?
A. Yes, sir.
Q. When did you enter into that agreement?
A. In the month of August, 1950, sir.
Q. What date in August?
A. v More or less about the middle of the month.
The inconsistencies between Garcia's narration and Salvador's story are so patent and so palpably irreconcilable,
that this Court is inclined to agree with the contention of the defense that the charges against Alto were fabricated.
2. The improbability of both the story of Salvador and the narration of Garcia is heightened when we consider that
they in effect picture Alto as so naive and utterly reckless as to conspire with numerous persons of divergent and
heterogeneous backgrounds and persuasions regarding an evil and dangerous mission. It stands to reason that
one who plots evil hides in the cloak of secrecy, if not anonymity. The prosecution has projected Alto's image as
that of a man who scuttled all precaution and discretion, and not only called and attended meetings with Huk
commanders to discuss the alleged conspiracy, and but as well even went to the extent of divulging his design to
mere dissident followers. Against this cumulation of facts imputed to Alto is the defense's unembellished recitation
of the life of a respected man in society, a pre-war mayor of Quezon, a family man with eight children, all of whom
were then studying at the University of Santo Tomas (four in the college of medicine, one in the college of law,
one in school of architecture, and two in high school), a progressive businessman who owned a pharmacy, sari-
sari store and a gasoline station, and operated a thriving transportation system, "The Angelita Transit." For such a
man to risk his entire future and that of his family in one pitch and toss by confederating openly with the Huks, he
must be driven by an overriding compelling motive. No such motive appears on record. True it is that Alto was
embittered by his defeat to Joson in 1947 and that he made the remark that he had lost because Joson's "civilian
guards" ran away with the ballot boxes. But remarks of this nature are ordinary woof and warp of the lives of
politicians who must make excuses for their defeats. It could be said, too, that Alto probably did not mean what
he said because he did not even a file a formal protest. Furthermore, this remark was made shortly after the
elections in 1947 and Alto is charged with conspiring in 1950 to have Joson killed, that is, after a lapse of three
years!
In the oft-cited case of Daggers vs. Van Dyke,[[9]] New Jersey Vice Chancellor Van Fleet quite aptly stated:
Evidence, to be believed, must not only proceed from the mouth of a credible witness, but it must be credible in
itself - such as the common experience and observation of mankind can approve as probable under the
circumstances. We have no test of the truth of human testimony; except its conformity to our knowledge,
observation and experience. Whatever is repugnant to these belongs to the miraculous and is outside of judicial
cognizance. (emphasis supplied)
3. Like Salvador, Garcia repeatedly referred to Alto's alleged criminal alliance with persons whom he knew at the
time he gave his testimony in court to be already dead, and who could not therefore be cross-examined. The
following admissions are revealing:
Q. On that occasion when you were being investigated by Sgt. Malubag, you knew already that Major Estrada
was already dead?
A. I already know.
Q. You knew also then that Commander Marcial whom you mentioned in this affidavit Exhibit 2-impeachment is
also dead?
A. I know it already, sir.
4. Again, like Salvador, Garcia said that he was privy to the conspiracy to liquidate Mayor Joson, but kept silent for
more then five years, only to emerge in unexplained suddenness to narrate his tale.
5. Finally, when Garcia testified for the prosecution, he was already a tenant of the principal complainant Joson,
who admitted their landlord-tenant relationship after some hesitation:
Q. Is it not a fact that Toribio Garcia is one of your tenants in your farm at Parukot?
A. No, he is not a tenant. I have no farm in Parukot.
Q. Where is your farm?
COURT:
Q. Is he your tenant?
A. No, your Honor.
Q. Has he ever been your tenant?
A. Only this year, your Honor.
Obviously Garcia's motives in testifying against Alto are suspect.
III.
The third witness, Dominador Pineda, implicated Alto with the second ambush staged on December 15, 1951 at
Curva.
1. The only relevant declaration of Pineda with respect to the alleged complicity of the appellant is his statement
that he saw Alto in his house talking with Commander Rodil (Melencio Marcos) about Mayor Joson. He did not,
however, elaborate nor give details of the conversation, although he stated that he overheard Rodil say to Alto
that the "scales" (kaliskis) of Joson are of high quality and that he (Alto) must not be impatient. However, on
cross-examination, Pineda gravely contradicted himself by admitting that this alleged statement was addressed to
him by Rodil. Thus:
Q. Are you sure that, that you did not have any conversation with the companions of Melchor de Leon that
night?
A. I was able to talk to Rodil then, sir.
Q. What did Rodil or Melencio Marcos tell you?
A. He said that the Mayor is of a high quality (mataas ang kaliskis).
Q. That is all you heard from Melencio Marcos?
A. That was the only thing Melencio Marcos told me, sir.
2. Pineda's testimony is impeached by the manifest improbability of his assertions.
First. He testified that the Huks frequently gathered and ate at his house, and that on the night of the ambush
at Curva, Rodil and his companions met at his house before proceeding to the ambuscade. However, Pineda
admitted that his house was only 300 meters away from the municipal building, and that the temporary police
were in constant patrol in that vicinity. In fact on the night he allegedly saw Rodil and Alto talking, he brought his
family to his parents' house because he feared that the Huks and the temporary police might meet in armed
encounter. It would seem then unusual that the Huks frequently gathered at his house and more unnatural that
they made it their precise rendezvous point on the night of the attack at Curva despite its proximity to the
municipal building and the patrol activities thereabouts of the temporary police.
Second. Despite Pineda's supposed closeness to the Huks, he admitted that on the night of the ambush at
Curva, Rodil, before leaving, had him guarded on surveillance by a Huk soldier.
Third. Pineda testified that Bertese is about three kilometers distant from his house, but when asked, upon
cross-examination, to calculate the time which transpired from the moment the Huks left his house to the time he
heard the first volley of shots at Bertese, and also to approximate the time which elapsed from the moment Rodil
and his companions left his house to the time they returned for the Huk soldier, he (Pineda) made patently
ridiculous estimates:
Q. If you smoke a cigarette from the time these people you said ate in your house up to the time the first volley of
shots occurred in Bertese how many could you have consumed?
A. Are you referring to the occasion beginning the time when they left?
Q. Yes, from the time they left to the first volley of shots?
A. More or less one cigarette.
Q. How many cigarettes would you have consumed if you smoked from the time the guard guarded you up to the
time they took him away?
A. About after smoking a cigarette.
Q. That is the time from the time they left you with a guard up to the time they passed by the guard?
A. Yes, sir.
IV.
The prosecution sought to bolster its case against the appellant by introducing in evidence a sworn statement of
Melencio Marcos, a co-accused, made by the latter while he was a detention prisoner in the provincial jail of
Nueva Ecija. This sworn statement, to which the trial court accorded inordinate credence, recites that Melencio
Marcos was the representative or "kinatawan" of the commander of the FC-12, a military unit of the HMB; that on
August 12, 1950 he saw Alto, Apolinario Ocol, Blas Angeles and Isaac Francisco in the house of Carlos Gabriel
inbarrio Parukot at a meeting attended by himself, Marcial, Melchor, Commander Golong and Telmo; that Alto
said that the meeting was called in connection with the liquidation of Mayor Joson as to which he was offering a
reward of P2,000; that Alto added that if the Huks wanted they could send someone to get the money from him
the next day; that the money was received from Alto the following month (September), but of the amount of
P2,000, only P1,800 was delivered by Francisco to Marcial and Melchor before November 10, 1950 because
Francisco retained the sum of P200; that subsequently Joson was ambushed at Mambarao, Quezon, Nueva
Ecija; that more than a year later, or on December 12, 1951, Marcos again saw Alto, Ocol, Angeles and Francisco
at Dulong Bayan in Quezon together with Colonel Aleman, commander Melchor and Golong; that at this meeting
Alto, Ocol, Angeles and Francisco suggested that the best way to kill Joson was to attack barrio Bertese and to
ambush him at Curva on his way to aid the detachment at Bertese; and that scheme was carried out and on
December 15, 1951 Mayor Joson was ambushed at Curva.
Is this sworn statement entitled to credence, assuming that it is admissible as against appellant? We do not
believe so.
1. We underscore the fact that this sworn statement was unequivocally retracted by Melencio Marcos. But before
delving into the whys and wherefores of the said retraction, let us first analyze Marcos' declarations. The
impression that immediately comes to the fore is that his story is completely at variance with the already
conflicting accounts made by Salvador and Garcia. In fact it contradicts the testimony of Salvador on the matter of
the price of P2,000 which Alto allegedly gave to the Huks. Marcos declared that he knew that the money was
taken from Alto during the month following their meeting in August, 1950, that is, in September, 1950. His
declaration to this effect is as follows:
T. Nalaman mo ba kung nakuha iyong kualta kay Jose Alto ni Isaac Francisco?
S. Opo, nakuha po, nuong susunod na buan na iyonpero hindi ko lang matandaan kung anong petsa ng intrego ni
Isaac Francisco kay Kumander Marcial. Pero natitiyak ko po na bago dumating and Nobiembre 10, 1950.
Whereas, Salvador testified that Francisco and he got the money from Alto on the day following All Saints' Day
(November 2, 1950). Marcos also declared that of the P2,000, Francisco delivered to Marcial only P1,800,
because Francisco retained P200. Thus:
T. Magkano iyong kualtang iniyabot?
S. Ang nakita ko pong iniyabot ni Ronquillo kay Kumander Marcial, Melchor ay pagkakabilang ay P1,800.00 at
nuong iniyabot iyong ay sinabi ni Ronquillo na iyon ay P2,000.00 at hiniram lang niya ang P200.00.
On the contrary Salvador categorically declared that on the afternoon of the day following All Saints' Day
Francisco delivered the P2,000 to Marcial and in fact a receipt for such amount was issued, attesting that they had
received the full promised reward of P2,000.
2. Surprisingly, Garcia who testified on the conferences allegedly attended by Alto in Osmea, Parukot and
Malayok never mentioned the presence of Marcos, and Marcos himself did not mention the presence of Garcia in
any of the said conferences. Neither did Salvador mention the presence of Marcos in the said conclaves. And
although they were unanimous that Francisco, Estrada and Marcial were present at the various meetings which
they attended, the cold undeniable fact is that all these Huk leaders are dead and could not be confronted by the
appellant.
3. Moreover, the statement of Marcos deserves no credit, not only because it was recanted, but also because it
was given upon the repeated indictments of Joson while Marcos was a detention prisoner in the provincial jail of
Nueva Ecija. The following declarations of Marcos during the trial are especially significant:
Q. Will you please tell us why you signed this Exhibit E for the prosecution, and according to you have not seen
Jose Alto in the month of August, 1950, in the house of Carlos Gabriel pertaining whom you stated a while ago
you did not know that fellow?
A. The reasons why I signed that document, sir are: first, because I was intimidated by the policemen of Mr.
Joson; second, because Mayor Joson promised me that he would help me in my two other cases that I have
besides these ones; and third, that he would procure my release by the filing of a bond.
Q. Any other reason for your signing this document Exhibit E?
A. Yes sir, there are some more.
Q. Will you please tell us?
A. Other reasons for my having signed the said document was that Mayor Joson together with Jose Corpuz
promised that after I would be released upon the filing of a bond, I would live in any place in Quezon, Nueva Ecija,
and that he would lend me three hectares of land which I could farm for my own benefit and that the produce will
be exclusively mine until the cases are finished.
Q. Did you know that when you signed this Exhibit E that you were declaring against Jose Alto, Ismael Dungao,
and Melencio Gregorio in this case?
A. It was only against Jose Alto that I knew that I was testifying, sir, but with respect to Ismael Dungao and
Melencio Gregorio and Bienvenido Almuete I did not know that I was testifying against them.
Q. Had you talked about Jose Alto with Mayor Joson concerning this Exhibit E, the statement of yours?
A. Yes, sir.
Q. What did he tell you about Alto?
A. He told me to sign that document in order to send to jail Jose Alto after which he would do me every favor if he
would succeed.
Verily, Marcos executed the said sworn statement, not to uphold public interest, but to obtain concessions from
the authorities.
In People vs. Capadocia,[[10]] this Court in debunking the credibility of a vital prosecution witness, observed that.
The inherent weakness, from the objective viewpoint, of the evidence given by Ternura is compounded by the
existence of subjective reasons for him to implicate appellant. He was a confessed Huk under detention at the
time. He knew his fate depended upon how much he cooperated with the authorities, who were then engaged in a
vigorous anti-dissident campaign.
The testimony of Marcos regarding his reasons for making the sworn statement was corroborated by Bartolome
Bernardo whose pertinent testimony is summarized by the trial court in its decision, as follows:
Sometime during the middle of October, 1954, Mayor Joson went to the house of Bartolome Bernardo and
requested the latter to help Mayor Joson by testifying in his favor, and Mayor Joson promised that he would take
care of the cases of Melencio Marcos and secure his release on bail. Mayor Joson and Bernardo went to the
provincial jail where Melencio Marcos was and is still presently confined, and Bernardo informed him of the wishes
of Mayor Joson. Melencio Marcos refused to testify in favor of Mayor Joson because, according to him, he did not
know anything about the matter and that was the same answer that he gave to Mayor Joson when the latter talked
with him. Mayor Joson and Bartolome Bernardo again returned to the provincial jail about the end of October with
the same request and with the same promises, but again Melencio Marcos refused.
It must be noted that in the original informations for multiple frustrated murder (criminal case 3672) and multiple
murder (criminal case 3671) filed on February 10, 1955, which were subsequently provisionally dismissed[[11]] for
insufficiency of evidence, Melencio Marcos, Melencio Gregorio and Bienvenido Almuete were listed as witnesses
for the prosecution. It was only after the retractions of Gregorio and Almuete and the desistance of Marcos from
testifying for the prosecution that these three were included as defendants in the informations subject of the
present appeal.
When the threat or promise was made by, or in the presence of, a person in authority, who has, or is supposed by
the accused to have power or authority to fulfill the threat or promise, the confession of the accused will be
presumed inadmissible.[[12]] A confession made under the influence of threat or promise of reward or leniency is
inadmissible.[[13]]
It is thus that the sworn statement of Marcos does not deserve a modicum of credence.
V.
In according credit to the prosecution witnesses, the trial court observed that "these witnesses for the prosecution
had demonstrated a fair knowledge of the Huk organization and the functions of each of the branches thereof. It is
not denied for example, that in any given section or command the military branch could not do anything without
consulting the civilian branch of the organization." But it is precisely because of their intimate knowledge of the
organizational set-up and operations of the Huk organization that any fabricated charge against the appellant
could be given the semblance of verity. It is also obvious that these confessed Huks would with alacrity ally with
the authorities just to purchase their security, knowing that the said authorities could at will revive charges against
them.
As a salutary proposition, this Court usually desists from disturbing the conclusions of the trial court on the
credibility of witnesses, in deference to the rule that the lower court, having seen and heard the witnesses and
observed their demeanor and manner of testifying, is in a better position to appreciate the evidence.[[14]] But this
doctrine must bow to the superior and immutable rule that the guilt of the accused must be proved beyond a
reasonable doubt, because the law presumes that a defendant is innocent, and this presumption must prevail
unless overturned by competent and credible proof. We find the record wanting of competent and credible proof to
sustain a moral certainty as to the guilt of the appellant.
Viewing the record in its entirety, we are not prepared to say that the evidence adduced precludes the possibility
that the charges against Alto were politically motivated and contrived. Nor is the evidence incompatible with the
suggested probability that the ambushes in question were integral parts of a determined campaign by the Huks to
eliminate Mayor Joson who was an avowed mortal foe -- of which campaign Alto may have been completely
unaware, or if he was aware thereof he had no complicity therein.
ACCORDINGLY, the appellant Jose Alto is hereby acquitted, with costs de officio.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez, Fernando and Capistrano, JJ., concur.

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
November 15, 1967
G.R. No. L-22087
THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
MAURICIO LABIS and ISABELO CABILES, defendants-appellants.
Office of the Solicitor General for plaintiff-appellee.
Isidro S. Baculo and M. A. Tus for defendants-appellants.
BENGZON, J.P., J.:
Mauricio Labis and Isabelo Cabiles are appealing from a judgment of conviction for murder. The two were, on
February 29, 1960, charged by the provincial fiscal for the killing of the deceased Clarito Fabria in Barrio Taytay,
Municipality of El Salvador, Misamis Oriental. After trial, the Court of First Instance of Misamis Oriental sitting at
Cagayan de Oro City, on September 12, 1963, found both accused guilty as charged and sentenced each to
"suffer the penalty of RECLUSION PERPETUA, to indemnify the heirs of the victim Clarito Fabria in the sum of
P6,000.00 without subsidiary imprisonment in case of insolvency and to pay the costs."
The prosecution, relying mainly on the testimonies of two eyewitnesses Vidal Masong and Ahenor Pagasihan
and that of Dr. Megdonio Bacal, attending physician, established the following:
At about 3:00 p.m. on August 1, 1959, in Barrio Taytay, Municipality of El Salvador, Misamis Oriental, appellant
Labis, with a bolo, chased the deceased Clarito Fabria near the national highway. When the latter happened to
pass by a coconut tree, appellant Cabiles who was standing there, grabbed him and locked his arms around the
shoulders of Clarito Fabria with Cabiles' chest pressing against the right shoulder of Clarito. This enabled Labis to
overtake Clarito Fabria and thereupon, the former stabbed the latter with the bolo at his back.
Appellant Cabiles then released the deceased who, badly wounded, tried to run further towards his father's house.
Later, Clarito Fabria was brought for treatment to the provincial hospital at Cagayan de Oro City, where he died
two hours later.
The attending physician, Dr. Bacal, found an opening stab wound, about three inches long, at the back lumbar
region, middle, which deviated laterally to the left, and causing an exit wound of one inch in front, at the left iliac
region (lower abdomen).[[1]] Dr. Bacal also testified that the two wounds could have been caused by a bolo and
that the decedent's death was due to profuse internal hemorrhage resulting from multiple perforation of the
sigmoid and mysentery of the intestine, organs usually found on the left of the abdominal cavity.
The defense narrated the events differently. According to appellants Labis and Cabiles and three of their alleged
eyewitness, what transpired was this:
On the morning of August 1, 1959, Labis and Cabiles with several of their barriomates attended a community
group work, locally known as "pahina", at the public school compound. About noontime, they all proceeded to the
wedding party at Pedro Estrada's house where the deceased and the latter's brother-in-law. Raul Espejon were
also present. Lunch over, the group left the place together at the invitation of the decedent and Espejon. On the
way home, the two walked ahead while Labis, Cabiles and the rest followed about 20 meters behind.
As the decedent Fabria and Espejon neared the national highway, the latter stopped near a coconut tree. As
appellant Labis approached, Espejon confronted him with a bolo, asking whether he had a grudge against Clarito
Fabria. Labis answered that they ought not fight as they were brothers. Sensing trouble, Francisco Labis, a third
degree cousin of Mauricio Labis, intervened and advised the two not to fight. Raul Espejon then repaired towards
the nearby house of Dionisio Gaid and Labis with the others went their way.
At this moment, Clarito Fabria, brandishing a bolo, came running towards them and asked Labis of the latter had
any grudges against him. Labis retreated with upraised hands and endeavoured to pacify the deceased by calling
him brother and pleading that they should not fight. Clarito answered by slashing his bolo at Labis who, in trying to
parry the blow, was wounded on his left wrist. Labis retreated further but Raul Espejon reappeared on the scene
and bolo Labis at the nape, wounding him also. Appellant Labis then turned to face Espejon when Clarito Fabria
hurled his bolo at him with the handle-end thereof hitting Labis on the breast The decedent now bent down to pick
up the bolo which fell by Labis' left side but the latter immediately warded off Clarito's hands. This caused the
decedent to turn halfway to his right, exposing his left flank to Labis. Instantly, Labis drew his own bolo from the
waist and thrust it at the decedent's back, at the left side of the lumbar region on the level of the pelvis.
Clarito Fabria then ran away wounded towards Dionisio Gaid's house. A few moments later, policeman Maximo
Gallego, who had fired several shots upwards while still at a distance, arrived at the scene of the incident and
Labis surrendered to him the bolo (Exh. C, also marked as Exh. 12) he used in stabbing Clarito Fabria and also
the bolo (Exh. 14) which the latter allegedly hurled at him. Policeman Gallego placed Labis and Cabiles under
custody and then went after Raul Espejon in the house of Hugo Fabria and got Raul's bolo. Still later, Gregorio
Salas, the Chief of Police of El Salvador, arrived and brought appellants Labis and Cabiles to the municipal
building for investigation.
Appellant Cabiles denied having held the decedent Clarito Fabria as testified to by the prosecution witnesses. He
claimed that when the deceased confronted Labis with a drawn bolo, he (Cabiles) and Francisco Labis stood
between the protagonists and tried to pacify them and prevent a fight. However, when Clarito Fabria threw his
bolo at Labis, Cabiles retreated about four meters away since he was afraid that Clarito carried a dagger also
which he might use.
As between the two conflicting versions, the trial court upheld the prosecution's and rejected that of the defense.
And We quote the findings and conclusions of said court:
At first blush the theory advanced by the defense would seem foolproof but a closer examination of the same
reveals weaknesses that cannot stand the test of judicial scrutiny. The defense witnesses, either close friends or
relatives of the accused, gave evidently well-rehearsed testimonies likely to mislead the gullible and unsuspecting
person. However, a careful evaluation of their version of the incident would show its inconsistency with the natural
course of events and human conduct. For instance, their claim that the accused Mauricio Labis delivered the fatal
blow at the back of Clarito Labis while they were embracing each other and as the latter was about to pick up his
bolo from the ground, is not borne out by the position and direction of the wounds of said victim. Their
observations do not also coincide because one declared that Mauricio Labis pushed aside Clarito Fabria instead
of embraced him as two others testified. Some even asserted that Clarito Fabria was hit on the left side of his
back which is not true.
The finding of Dr. Megdonio Bacal, the examining physician at the Provincial Hospital of Misamis Oriental, located
the entrance wound of about 3 inches in length at the back of Clarito Fabria across the lower portion of his spinal
column, and the injury deflected laterally towards his left front side below the waistline causing an exit wound of
about an inch in length (Exhs. "B", "B-1" and "B-2"). Since it is admitted that the accused Mauricio Labis, who is
right-handed, used the bolo, Exh. "12", about two feet long, pointed and wide at its middle, by no stretch of
imagination could the wound have followed such a course, irrespective of whether said Clarito Fabria was slightly
bending to pick up his weapon or in a standing position locked in an embrace with said accused as the defense
tried to picture during the reenactment of the incident in open court. The wound should have come out on the right
side of the deceased if the accused was in front of him when he delivered the fatal thrust. The only plausible
hypothesis deducible from the position and direction of the wounds of Clarito Fabria is that it was inflicted behind
him or towards his right side. Such circumstances therefore, lend color of truth and bear out the testimonies of the
prosecution witnesses that Mauricio Labis stabbed Clarito Fabria from the back as Isabelo Cabiles was holding
the deceased. It must be remembered, however, that according to the defense witnesses themselves, Clarito
Fabria was more robust and stronger in build than the accused Mauricio Labis so that he could not have been
easily bested by the latter. But as the defense would put it, the encounter involved Clarito Fabria and his brother-
in-law Raul Espejon on one side against Mauricio Labis alone on the other, and if that is true, the latter must be a
superman to have come out of the struggle practically unscathed.
Furthermore, it would seem odd if not contrary to human behavior for Clarito Fabria to have hurled his own
weapon at Mauricio Labis in the course of their armed struggle and endeavor again to retrieve it knowing that
Mauricio Labis was also provided with a bolo. The court cannot also conceive why the wound of Mauricio Labis on
his left forearm allegedly caused by the thrust of Clarito Fabria's bolo appeared small and superficial, involving
only the skin, and that on his nape only an abrasion, although it was supposedly produced by a slash
administered by Raul Espejon with another bolo, considering the sharpness of the weapons used and the strength
of the blows deliveredas described by the witnesses for the defense. Certainly a potent bolo like the one allegedly
used by Raul Espejon would not have produced just an abrasion which according to medical science may be
caused by mere hubbing of the skin against a hard object. Likewise, the arm wound of Mauricio Labis would have
been bigger or deeper because the bolo (Exh "14") allegedly used by Clarito Fabria is not only sharp but also
double-edged at its point.
The court, nevertheless, is inclined to believe that the deceased Clarito Fabria was not provided with a bolo at the
time because he came from the wedding party in the house of Pedro Estrada and the accused themselves
observed him carry none while they were yet there. On the other hand, Mauricio Labis admitted having brought
his bolo along and declared that Isabelo Cabiles also carried a bolo as both of them came from the "pahina"(group
labor) at the schoolhouse. Isabelo Cabiles, nevertheless, denied having a bolo at that time, but Federico Labis
and Dionisio Gaid declared that he was also provided with a bolo.
It is very probable that one of the bolos delivered by Mauricio Labis to patrolman Gallego may be that of the
accused Isabelo Cabiles and Gallegos' testimony about the ownership of that bolo by Clarito Fabria is unworthy of
credence because of his affinity to said Mauricio Labis by marriage.
The testimonies of Dionisio Gaid and Demosthenes Dadolo are not entitled to belief as is that of the Chief of
Police Gregorio Salas because it appears that these witnesses were never investigated by said Chief at all
although according to him, he saw them immediately after the incident and he went back to the place the next day
to look for eyewitnesses but could only find the prosecution witnesses Ahenor Pagasihan Vidal Masong and
Simplicio Martinez. Moreover, if the Chief of Police believed that Isabelo Cabiles did not have any participation in
the killing why did he include himself as one of the accused in his amended complaint filed before the Justice of
the Peace of El Salvador on August 7, 1959? But the actuations of said Chief of Police in connection with this
case are susceptible of suspicion for his failure to take immediate steps to insure the testimonies of eyewitnesses
to the incident before they had a chance for reflection.[[2]]
In their first three assignments of errors, appellants assail the above findings and conclusions and would have this
Court believe their witnesses whom the trial court discredited rather than the prosecution witnesses. The
issue posed then is one of credibility of witnesses. And the rule is that unless appellants satisfactorily show that
the trial court overlooked, misunderstood or misapplied some fact or circumstance of weight and substance as
would offset the results of the case, the appellate court will not disturb said court's findings especially when the
same are based on the evidence on record.[[3]]
Appellants here failed in that task. They merely harped on the requisites of self-defense and casually excused the
inconsistencies in the testimonies of their witnesses as "immaterial". Their theory of self-defense is negatived by
the nature and location of the victim's wounds which, having a right-to-left direction, could not have possibly been
inflicted by a right-handed person in front of the victim with a two-feet long bolo. Moreover, it appears highly
improbable that appellant Labis suffered no serious cut wound,[[4]] as per the medical certificate Exh. 8, altho the
defense witnesses uniformly testified that Labis was slashed at the wrist with a sharp bolo by the decedent, and
on the nape with a similar lethal instrument by Raul Espejon. Appellant Cabiles was even emphatic that he
saw blood oozing from Labis' nape.[[5]] Having advanced self-defense, the burden was on appellant Labis to
justify the killing of the decedent by clear and convincing evidence. And the trial court having discredited his
witnesses, it was further his duty in this appeal to prove the lower court in error. Unfortunately, appellant has
submitted no cogent reason for Us to disregard the trial court's findings and conclusions which are all based on
the evidence on record.
Altho motive need not be considered anymore on account of the positive identification of the accused,[[6]] yet
contrary to appellants' insistence, there is ample proof of motive. Reuben Bajuyo testified[[7]] that on July 23,
1959, appellant Labis and one Isaias Bahian went to his house looking for the decedent to kill him for having
stolen his (Labis') chicken. The trial court did not disbelieve Bajuyos' testimony but rather held itinsufficient to
establish evident premeditation.
Appellants' next submission that prosecution eyewitnesses Pagasihan and Masong were not present in the scene
of the crime is without merit. They base their claim on the testimonies of their witnesses whom the lower court
found devoid of credibility. Moreover, the negative testimonies of these witnesses cannot prevail over the positive
statements of said prosecution witnesses.
However, the testimony of prosecution witness Pagasihan cannot be given full credit in view of its serious
contradiction with his sworn affidavit, Exhs. 5 and 5-A where in Pagasihan claimed to have seen only the chasing
of Raul Espejon by Rufo Labis and that in the fight between Mauricio Labis and the decedent, appellant Cabiles
did not hold the decedent but even tried to stop the fight. Of course Pagasihan when confronted with said affidavit,
repudiated it and claimed that he was bribed and threatened into signing it by appellant Labis.[[8]]
Still, Masong's lone testimony is sufficient to sustain appellants' conviction.[[9]] The fatal stabbing of the decedent
occurred just about five meters away from him.[[10]] No improper motive has been shown why he would impute
actuations of serious consequences against appellants. The minor flaws in his testimony he satisfactorily
explained, thus: altho he also saw the chasing of Raul Espejon by Rufo Labis, he did not mention that fact
anymore in his direct testimony since it was not the subject of the case being tried, a point which was also noted
by the trial court.[[11]] Masong stated that as of the date when he was testifying he could no longer remember
the exact amount of Asuncion Fabria's debt which he was trying to collect since it was only a little accountfrom the
sari-sari store.[[12]] He was not able to collect from Asuncion that day since the door of her house was closed and
because of the stabbing incident that happened in his presence.[[13]] The reason why he saw no policemen in the
scene of the crime and why he was not investigated there, was because he immediately went home after the
incident[[14]] and Masong did not tell his wife about the stabbing since he did not want to get nervous.[[15]]
His defense of justified killing unsustainable, appellant Labis must suffer the consequences for his unlawful act.
The killing of the decedent was qualified by treachery. It has been clearly established that Clarito Fabria was
being held firmly by appellant Cabiles thereby preventing the former from moving or making any defense when
Labis struck him from behind with a bolo. There was hardly, if any, risk at all for Labis; the decedent was
defenseless.[[16]] Appellant Labis is liable for murder.
This brings Us to the liability of appellant Cabiles. Unlike Labis, Cabiles did not advance self-defense. His stand
was non-participation in the killing. However, the entire defense version of the incident was discredited by the
lower court. Even with particular reference to appellant Cabiles, We are satisfied that the trial court did not err.
First, it is clear from the evidence on record that Cabiles' alignment and sentiments were with Labis They went
together at the "pahina". They went together to the marriage celebration and then went home in company.
Secondly, it strikes Us as strange behavior for appellant Cabiles to act courageously and bravely when danger is
near and real, and then to lose such courage when danger has become less imminent and remote. According to
the defense version, Cabiles was standing between Labis and the decedent, who had a drawn bolo, trying to
prevent the fight. And yet, after the decedent had allegedly thrown his bolo at Labis and had, to all appearances,
become unarmed, Cabiles withdrew about four meters away on the conjecture that the decedent might still be
possibly armed with a dagger. A man sincerely desirous of putting an end to such incident would have
immediately taken advantage of the decedent's mometary armlessness by holding him. Cabiles himself admitted
his being a cousin of the decedent.[[17]] And besides, there were two of them he and Francisco Labis who
could have subdued the decedent whom they pictured as the one itching for a fight. Lastly, it appears odd why
appellant Cabiles never vigorously insisted on his innocence from the very start. It does not appear that he ever
strongly protested being placed under police custody together with appellant Labis who openly admitted having
stabbed the decedent and being brought with Labis to the municipal building for investigation. If he had no
participation really, why should he be placed under arrest like Mauricio Labis? Francisco Labis was, allegedly, in
exactly the same situation as he was. Yet, Francisco Labis was never placed under police custody. These
considerations are incompatible with Cabiles' belated plea of innocence.
On the other hand, it has been sufficiently established that appellant Cabiles seized the running decedent in such
a manner that the latter could not even move or turn around. This enabled the pursuing Labis, who was armed
with a drawn bolo and was barely five meters away from the decedent, to finally overtake him and stab him at the
back with hardly any risk at all. Cabiles therefore performed another act holding the decedent without which
the crime would not have been accomplished. This makes him a principal by indispensable
cooperation.[[18]] Consequently, appellant Cabiles is also liable for murder.
As recommended by the Solicitor General, the mitigating circumstance of voluntary surrender will be appreciated
in favor of appellants Labis and Cabiles. Instead of running away, they voluntarily went with the policemen who
took them into custody. With no aggravating circumstance to offset voluntary surrender, We must impose the
penalty for murder reclusion temporal maximum to death in the minimum period, which is reclusion
temporal maximum.
Since the resulting penalty is neither death nor life imprisonment, the Indeterminate Sentence
Law applies.[[19]] Appellants are therefore entitled to an indeterminate sentence, the maximum term of which
is reclusion temporal maximum the penalty to be imposed in view of the mitigating circumstance of voluntary
surrender and the minimum term which is one (1) degree lower from the penalty prescribed by the Code for
murder is anywhere from ten (10) years and one (1) day of prision mayor maximum to seventeen (17) years
and four (4) months of reclusion temporal medium.
WHEREFORE, the judgment appealed from is hereby modified and appellants Mauricio Labis and Isabelo Cabiles
are sentenced to imprisonment for a minimum term of seventeen (17) years and four (4) months of reclusion
temporal medium, and not to exceed a maximum term of twenty (20) years of reclusion temporal maximum. In all
other respects, the judgment appealed from is affirmed. Costs against appellants. So ordered.
Concepcion, C.J., Reyes, J.B.L. Dizon, Makalintal, Zaldivar, Sanchez, Castro and Fernando, JJ.,concur.

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-16488 August 12, 1966
THE PEOPLE OF THE PHILIPPINES, plaintiff and appellee,
vs.
JUAN RAQUINIO, defendant and appellant.
Santiago Ranada for defendant and appellant.
Assistant Solicitor General Pacifico P. de Castro and Solicitor O. R. Ramirez for plaintiff and appellee.
SANCHEZ, J.:
The charge is frustrated homicide.1 The judgment below found defendant guilty thereof, with the aggravating
circumstance of treachery offset by voluntary surrender in mitigation. The court in the exercise of its discretion
imposed an indeterminate corporal penalty lower by one degree ranging from 4 months and 1 day of arresto
mayor, as minimum, to 2 years, 11 months and 11 days of prision correccional, as maximum.2 It also ordered
defendant to indemnify the offended party, Apolonio Ravina, in the sum of P170.00 with subsidiary imprisonment
in case of insolvency, and to pay the costs. Defendant's appeal is direct to this Court.
Briefly, the controlling facts found below are:
After lunch, in the early afternoon of November 8, 1957, complainant Apolonio Ravina, accompanied by his
helper, Luciano Reynon, drove his jeep to the river bank of Gabu, Laoag, Ilocos Norte. He was to load and
transport to the market, as usual, the fish catch for that day. Upon arrival at the place, complainant was told by
Agustin Raquinio, local barrio lieutenant and head-man of a group of fishermen who caught the fish, that he had
already promised Gaspar Retutal to load the fish in the latter's jeep in which defendant was helper. Complainant
and Agustin Raquinio engaged in a defeated discussion. Complainant, then reminded Agustin Raquinio that he
should be given the preference to transport the fish. Agustin refused and stood pat on his promise to Gaspar.
Apolonio Ravina then told Agustin: "We did not come here to force ourselves to you." Fearing trouble,
complainant's mother called him. Just as complainant turned to go to his mother, defendant stabbed him at the
stomach with a small bolo. Wounded complainant took to his heels, collapsed to the ground at a distance of about
25 meters. Defendant wanted to pursue him. But Agustin Raquinio held defendant fast, grabbed the bolo from his
hand.
Complainant was placed in his jeep, brought to the Ilocos Norte Provincial Hospital. Dr. Maximiano L. Agbayani,
associate resident physician, treated complainant and found the following injuries: "Stab[bed,] wound, penetrating
abdomen 10 cm. to the right of median line and little below the level of the umbilicus entrance 2 cm., upper
extremity contused, lower extremity sharp; directed posters-medially and slightly upwards; puncturing liver"3 The
doctor declared that were it not for the timely medical assistance, the victim would have died of hemorrhage
caused by the stab wound that penetrated the liver. Discharged from the hospital on November 21, 1957,
complainant had to return twice for continuation of the treatment. He was incapacitated from pursuing his calling
up to March 1958.
1. Appellant's brief,4 recites facts at variance with the findings of the trial court. And this, in the hope that
this Court might spotlight his theory that the crime committed falls to the level of physical injuries.
Defendant's notice of appeal before us reads:
NOTICE OF APPEAL
COMES now the accused, Juan Raquinio, in the above-entitled criminal case, through
his undersigned attorney, and hereby gives formal notice of his intention to appeal to the
Honorable Supreme Court the Judgment of conviction rendered by this Honorable Trial
Court, because a question of law is involved in this appeal.
WHEREFORE, it is respectfully prayed that the Record of this case be elevated to the
Honorable Supreme Court, as early as possible.5
Note that the appeal was direct to this Court and that the prayer in the notice of appeal is that the record
of this case be elevated here because a question of law is involved in this appeal. Because of this,
counsel's attempt to inject facts different from those found below, is impermissible. Having cast aside
questions of fact in his notice of appeal, he may not revive them at will. He is deemed to have accepted
without reservation the facts as found below. He has waived his right to an inquiry into these facts. He
himself has closed the door to a review of the facts.6 He has chosen to take issue upon a question of
law.
This Court has held in a factual context similar to the present that where an appeal was taken on purely
questions of law, we are bound by the findings of fact below.7 We do not intend to retreat from the
doctrine thus forged. It is in line with sound practice.8
We therefore hold that a direct appeal to this Court on questions of law in criminal cases in which the
penalty imposed is not death or life imprisonment precludes a review of the facts.
2. Defendant assails the finding of frustrated homicide. He avers lack of intent to kill. We take a look at
the facts. Appellant used a lethal weapon, a bolo. The thrust "sudden and unexpected"9 was
directed at a vital spot of the body, the abdomen. Were it not for the fact that Agustin Raquinio held
defendant fast and grabbed the bolo from his hand, he would have finished off with his victim. The
wounds suffered by the latter would have been fatal, were it not for the timely and adequate medical
assistance rendered him. Intention to kill, a mental process, may be inferred from the nature of the
weapon used, the place of the wound, the seriousness thereof and the persistence to kill the victim. All
these are present in the, case at bar. These facts nail down the question. The crime is frustrated
homicide. 10
3. Appellant claims that treachery should not have been considered as an aggravating circumstance.
His point is that treachery is not alleged in the criminal charge against him and that he timely objected to
the evidence tending to prove it.1wph1.t
Had treachery been averred, unquestionably, the crime would have risen to the level of frustrated murder. 11 But
the information did not allege treachery. The crime charged is merely frustrated homicide. Evidence of treachery
then one of murder. 12 This is axiomatic.
In aid homicide charge, the prosecutor alleges that defendant "with evident intent to kill, wilfully, unlawfully and
feloniously attacked, assaulted and stabbed" Ravina with a bolo. How that act was perpetrated has to be proved
to achieve this end, it is inescapable that the attack be described. To show the conditions under which the attack
was perpetrated, an aggravating circumstance which is part of the act may be related. Else, a gap may
result, the narrative incomplete. So it is, that evidence of an aggravating circumstance is not intended to bring
about a change in the nature of that crime averred, for the worse. Rather, it serves the purpose of aiding the court
in assessing the penalty to be imposed "in a more or less severe form, within the limits prescribed for the offense
charged in the complaint or information". Therefore, the rule has been laid down that generic aggravating
circumstances, although not alleged in the information may be proved. Because, the ponderous impact of this rule
is to show precisely the manner in which the offense actually charged was committed. 13 The accused may not
object to such evidence. For, it does not violate his constitutional right to be informed of the nature and cause of
accusation against him. 14
The decision appealed from is not infirm. It is accordingly affirmed. Costs against appellant. So ordered.
Concepcion, C.J., Reyes, J.B.L., Barrera, Dizon, Makalintal, Bengzon, J.P. and Castro, JJ., concur.
Regala and Zaldivar, JJ., took no part.

WELDON VS CA 154 SCRA 618



FACTS:

Petitioner drafted plans for a theater building which private respondent Cancio intended to put up. He submitted a
proposal for the supervision of the construction on commission basis which private respondent never signed.
Included is a setting upa revolving fund of P10K for the costs replenished by Cancio and the payment to petitioner
of a 10% of total costs as commission. Upon payment of the P10K,petitioner sent another proposal stipulating a
price of P600K for the construction entitled Building Contract. Subsequent payments were made by Cancio as
per
accomplishment until he fully paid the P600K. However, petitioner still demanded payment of the commission
which Cancio refused to pay. Hence, petitioner initiated a suit for the recovery of the 10% of the total cost of
construction as commission. CFI ruled that the agreement was a contract of supervision of construction and
ordered in favor of the Petitioner, ordering Cancio to pay the commission which the CA reversed.


ISSUES:

Whether or not parties are bound by the first proposal or by the second proposal?
Parties are bound by the second proposal, Building Contract, as the first proposal containing the provision on
commission was never perfected. Subsequent payments were only made after the signing of the second proposal;
thus it was the intention of the parties to enforce such contract.


DECISION:

The first proposal is simply a proposal as it was never perfected as a contract. Onlyan absolute acceptance of a
definite offer manifests consent necessary to perfect a contract. The mere payment of P10K was not an
unqualified acceptance of the offer of the first proposal. The second proposal, signed by the contracting parties,
has already been consummated when the building was completed. Therefore, its validity and binding effect cannot
be disputed by the contracting parties. The subsequent payments made by Cancio only after the signing of the
Building Contract prove that it was the second proposal that was intended to be fulfilled. It cannot be said that
these amounts are mere replenishment in accordance to the first proposal. Since itis fully paid, there is no basis
for the petitioners demand for the commission. To allow such payment would be equivalent to changing the terms
of the contract which needed the consent of the owner of the building.

Sycip vs CA, 134 SCRA 317



Facts:

On August 24, 1989, petitioner Francisco T. Sycip, Jr., agreed to buy, on installment, from Francel Realty
Corporation (FRC), a townhouse unit in the latters project at Bacoor, Cavite. Upon execution of the contract to
sell, as required, issued to FRC, forty-eight (48) postdated checks, each in the amount of P9,304.00,covering 48
monthly installments. After moving in his unit, Sycip complained, to FRC regarding defects in the unit and
incomplete features of the townhouse project. FRC ignored the complaint. Dissatisfied, Sycip served on FRC two
(2) notorial notices to the effect that he was suspending his installment payments on the unit pending compliance
with the project plans and specifications, as approved by the Housing and Land Use Regulatory Board (HLURB).
Sycip and twelve (12) out of fourteen (14) unit buyers then filed a complaint with the HLURB. The complaint was
dismissed as to the defect, but FRC was ordered by the HLURB to finish all incomplete features of its townhouse
project. Sycip appealed the dismissal of the complaint as to the alleged defects.
Notwithstanding the notorial notices, FRC continued to present for encashment Sycips postdated checks in its
possession. Sycip sent stop payment orders to the bank. When FRC continued to present the other postdated
checks to the bank as the due date fell, the bank advised Sycip to close his checking account to avoid paying
bank charges every time he made a stop payment order on the forthcoming check. Due to the closure of
petitioners checking account, the drawee bank dishonored six postdated checks. FRC file a complaint against
petitioner for violations of B.P. Blg. 22 involving said dishonored checks.


Issue:

Whether or not the accused is criminally liable of the B.P. Blg. 22?


Held:

No. The Bouncing Checks Law (B.P. No. 22), is violated when the following elements are present: (1) the making,
drawing and issuance of any check to apply for account or for value; (2) the knowledge of the maker, drawer, or
issuer that at the time of issue he does not have sufficient funds in or credit with the drawee bank for the payment
of such check in full upon its presentment; and (3) the subsequent dishonor of the check by the drawee bank for
insufficiency of funds or credit or dishonor for the same reason had not the drawer, without any valid cause,
ordered the bank to stop payment. In this case, although the first element of the offense exists, the other elements
have not been established beyond reasonable doubt. The second element involves knowledge on the part of the
issuer at the time of the checks issuance that he did not have enough funds or credit in the bank for payment
thereof upon its presentment. B.P. No. 22 creates a presumption juris tantum that the second element prima facie
exists when the first and third elements of the offense are present. But such evidence may be rebutted. If not
rebutted or contradicted, it will suffice to sustain a judgment in favor of the issue, which it supports. Such
knowledge of the insufficiency of petitioners funds is legally presumed from the dishonor of his checks for
insufficiency of funds. But such presumption cannot hold if there is evidence to the contrary. In this case, the
other party has presented evidence to contradict said presumption. Hence, the prosecution is duty bound to prove
every element of the offense charged, and not merely rely on a rebuttable presumption.
What are involved in this case are postdated checks. Postdating simply means that on the date indicated on its
face, the check would be properly funded, not that the checks should be deemed as issued only then. The checks
were issued at the time of the signing of the Contract to Sell in August 1989. However, there was no showing that
at the time said checks were issued, petitioner had knowledge that his deposit or credit in the bank would be
insufficient to cover them when presented for encashment. The closure of petitioners Account No. 845515 with
Citibank was not for insufficiency of funds. It was made upon the advice of the drawee bank, to avoid payment of
hefty bank charges each time petitioner issued a stop payment order to prevent encashment of postdated
checks in private respondents possession. Said evidence contradicts the prima facie presumption of knowledge
of insufficiency of funds. But it establishes petitioners state of mind at the time said checks were issued. Petitioner
definitely had no knowledge that his funds or credit would be insufficient when the checks would be presented for
encashment.


OR


Sycip vs Court of Appeals
G.R. No. 12059
March 17, 2000

Facts:

On August 24, 1989, Francisco T. Sycip, Jr., agreed to buy, on installment, from Francel Realty Corporation
(FRC), a townhouse unit in the latters project at Bacoor, Cavite. Upon execution of the contract to sell, as
required, issued to FRC, forty-eight (48) postdated checks, each in the amount of P9,304.00, covering 48 monthly
installments.

After moving in his unit, Sycip complained, to FRC regarding defects in the unit and incomplete features of the
townhouse project. FRC ignored the complaint. Dissatisfied, Sycip served on FRC two (2) notorial notices to the
effect that he was suspending his installment payments on the unit pending compliance with the project plans and
specifications, as approved by the Housing and Land Use Regulatory Board (HLURB). Sycip and twelve (12) out
of fourteen (14) unit buyers then filed a complaint with the HLURB. The complaint was dismissed as to the defect,
but FRC was ordered by the HLURB to finish all incomplete features of its townhouse project. Sycip appealed the
dismissal of the complaint as to the alleged defects.

Notwithstanding the notorial notices, FRC continued to present for encashment Sycips postdated checks in its
possession. Sycip sent stop payment orders to the bank. When FRC continued to present the other postdated
checks to the bank as the due date fell, the bank advised Sycip to close his checking account to avoid paying
bank charges every time he made a stop payment order on the forthcoming checks. Due to the closure of
petitioners checking account, the drawee bank dishonored six postdated checks. FRC file a complaint against
petitioner for violations of B.P. Blg. 22 involving said dishonored checks.

Issues:

(a) Whether or not the accused is criminally liable of the B.P. Blg. 22?

(b) Whether or not the trial court erred in affirming the conviction of petitioner for violation of the Bouncing Checks
Law?

Held:

The trial court finds accused Francisco T. Sycip guilty beyond reasonable doubt of a violation of Sec. 1 of the
Batas Pambansa Blg. 22 and, accordingly, he is hereby sentenced ordered to pay the offended party, FRC, as
and for actual damages with interest thereon at the legal rate from date of commencement of these actions, until
full payment thereof.

Dissastied, Sycip appealed the decision to the Court of Appeals. The Appellate Court erred in affirming the
decision of the lower court finding that the accused-appellant did not have any justifiable cause to stop or
otherwise prevent the payment of the subject checks by the drawee bank. The CA also erred that the accused-
appellant did not have sufficient funds with the drawee to cover the subject checks upon resentment for payment
thereof.

However, while B.P. Blg. 22 was enacted to safeguard the interest of the banking system. It is difficult to see how
conviction of the accused in this case will protect the sanctity of the financial system.

Given the findings of the HLURB as to incomplete features in the construction of petitioners and other units of the
subject condominium bought on installment from FRC, the Court of Appeals held that the petitioner had a valid
cause to order his bank to stop payment. Hence, it said that offenses punished by a special law, like the Bouncing
Checks Law, are not subject to the Revised Penal Code, the Code is supplementary to such law. The petitioner,
Francisco T. Sycip, Jr., is acquitted of the charges against him under B.P. Blg. 22, for lack of sufficient evidence to
prove the offenses charged beyond reasonable doubt. No pronouncement as to costs.