1
EN BANC When accused-appellant returned, Buenafe and Gloria verified from him whether what Cyra
G.R. No. 131516 March 5, 2003
PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
RONNIE RULLEPA Y GUINTO, accused-appellant.
CARPIO MORALES, J.:
On complaint of Cyra May Francisco Buenafe, accused-appellant Ronnie Rullepa y Guinto was
charged with Rape before the Regional Trial Court (RTC) of Quezon City allegedly committed
as follows:
That on or about the 17th day of November, 1995, in Quezon City, Philippines, the
said accused, by means of force and intimidation, to wit: by then and there
willfully, unlawfully and feloniously removing her parity, kissing her lips and vagina
and thereafter rubbing his penis and inserting the same to the inner portion of the
vagina of the undersigned complainant, 3 years of age, a minor, against her will and
without her consent.1
Arraigned on January 15, 1996, accused-appellant pleaded not guilty.2
From the testimonies of its witnesses, namely Cyra May,3 her mother Gloria Francisco
Buenafe, Dr. Cristina V. Preyra, and SPO4 Catherine Borda, the prosecution established the
following facts:
On November 20, 1995, as Gloria was about to set the table for dinner at her house in
Quezon City, Cyra May, then only three and a half years old, told her, "Mama, si kuya Ronnie
lagay niya titi niya at sinaksak sa puwit at sa bibig ko."
"Kuya Ronnie" is accused-appellant Ronnie Rullepa, the Buenafes' house boy, who was
sometimes left with Cyra May at home.
Gloria asked Cyra May how many times accused-appellant did those things to her, to which
she answered many times. Pursuing, Gloria asked Cyra May what else he did to her, and Cyra
May indicated the room where accused-appellant slept and pointed at his pillow.
As on the night of November 20, 1995 accused-appellant was out with Gloria's husband Col.
Buenafe,4 she waited until their arrival at past 11:00 p.m. Gloria then sent accused-appellant
out on an errand and informed her husband about their daughter's plaint. Buenafe
thereupon talked to Cyra May who repeated what she had earlier told her mother Gloria.
May had told them was true. Ronnie readily admitted doing those things but only once, at
4:00 p.m. of November 17, 1995 or three days earlier. Unable to contain her anger, Gloria
slapped accused-appellant several times.
Since it was already midnight, the spouses waited until the following morning to bring
accused-appellant to Camp Karingal where he admitted the imputations against him, on
account of which he was detained. Gloria's sworn statement5 was then taken.6
Recalling what accused-appellant did to her, Cyra May declared at the witness stand:
"Sinaksak nya ang titi sa pepe ko, sa puwit ko, at sa bunganga," thus causing her pain and
drawing her to cry. She added that accused-appellant did these to her twice in his bedroom.
Dr. Ma. Cristina V. Preyra, the Medico-Legal Officer and Chief of the Biological Science Branch
of the Philippine National Police Crime Laboratory who examined Cyra May, came up with
her report dated November 21, 1995,7 containing the following findings and conclusions:
FINDINGS:
GENERAL AND EXTRA GENITAL:
Fairly developed, fairly nourished and coherent female child subject. Breasts are
undeveloped. Abdomen is flat and soft.
GENITAL:
There is absence of pubic hair. Labia majora are full, convex and coaptated with
congested and abraded labia minora presenting in between. On separating the
same is disclosed an abraded posterior fourchette and an elastic, fleshy type intact
hymen. External vaginal orifice does not admit the tip of the examining index
finger.
CONCLUSION:
Subject is in virgin state physically.
There are no external signs of recent application of any form of trauma at the time of
examination. (Emphasis supplied.)
By Dr. Preyra's explanation, the abrasions on the labia minora could have been caused by
friction with an object, perhaps an erect penis. She doubted if riding on a bicycle had caused
the injuries.8

The defense's sole witness was accused-appellant, who was 28 and single at the time he took
the witness stand on June 9, 1997. He denied having anything to do with the abrasions found
in Cyra May's genitalia, and claimed that prior to the alleged incident, he used to be ordered
to buy medicine for Cyra May who had difficulty urinating. He further alleged that after he
refused to answer Gloria's queries if her husband Buenafe, whom he usually accompanied
whenever he went out of the house, was womanizing, Gloria would always find fault in him.
He suggested that Gloria was behind the filing of the complaint. Thus:
q According to them you caused the abrasions found in her genital?
a That is not true, sir,
q If that is not true, what is the truth?
a As I have mentioned earlier that before I started working with the family I was sent to
Crame to buy medicine for the daughter because she had difficulty in urinating.
q Did you know why the child has difficulty in urinating?
a No, I do not know, sir.
q And how about the present complaint filed against you, the complaint filed by the
mother of the victim?
a I did not do it, sir.
q What is the truth, what can you say about this present complaint filed against you?
a As I said Mrs. Buenafe got mad at me because after I explained to her that I was going with
her gusband (sic) to the children of the husband with a former marriage.9
Finding for the prosecution, Branch 96 of the Quezon City RTC rendered judgment, the
dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered finding accused RONNIE RULLEPA y
GUINTO guilty beyond reasonable doubt of rape, and he is accordingly sentenced
to death.
The accused is ordered to pay CYRA MAE BUENAFE the amount of P40,000.00 as
civil indemnity.
Costs to be paid by the accused.10 (Italics in the original.)
2
Hence, this automatic review, accused-appellant assigning the following errors to the trial
court:
I
THE COURT A QUO ERRED IN CONSIDERING AS ADMISSIBLE IN EVIDENCE THE
ACCUSED-APPELLANT'S ADMISSION.
II
THE COURT A QUO ERRED ON (sic) RULING THAT THE ACCUSED-APPELLANT'S
SILENCE DURING TRIAL AMOUNTED TO AN IMPLIED ADMISSION OF GUILT.
III
THE COURT A QUO ERRED IN FINDING THAT THE GUILT OF THE ACCUSED-
APPELLANT FOR THE CRIME CHARGED HAS BEEN PROVEN BEYOND REASONABLE
DOUBT.
IV
THE COURT A QUO GRAVELY ERRED IN IMPOSING THE SUPREME PENALTY OF
DEATH UPON THE ACCUSED-APPELLANT.11 (Emphasis supplied.)
Accused-appellant assails the crediting by the trial court, as the following portion of its
decision shows, of his admission to Gloria of having sexually assaulted Cyra May:
In addition, the mother asserted that Rullepa had admitted Cyra Ma[y]'s complaint
during the confrontation in the house. Indeed, according to the mother, the
admission was even expressly qualified by Rullepa's insistence that he had
committed the sexual assault only once, specifying the time thereof as 4:00 pm of
November 17, 1995. That qualification proved that the admission was voluntary
and true. An uncoerced and truthful admission like this should be absolutely
admissible and competent.
Remarkably, the admission was not denied by the accused during trial despite his
freedom to deny it if untrue. Hence, the admission became conclusive upon him.12
(Emphasis supplied.)
To accused-appellant, the statements attributed to him are inadmissible since they were
made out of fear, having been elicited only after Cyra May's parents "bullied and questioned
him." He thus submits that it was error for the trial court to take his failure to deny the
statements during the trial as an admission of guilt.
 3

Accused-appellant's submission does not persuade. The trial court considered his admission
merely as an additional ground to convince itself of his culpability. Even if such admission, as
well as the implication of his failure to deny the same, were disregarded, the evidence
suffices to establish his guilt beyond reasonable doubt.
The plain, matter-of-fact manner by which Cyra May described her abuse in the hands of her
Kuya Ronnie is an eloquent testament to the truth of her accusations. Thus she testified on
direct examination:
q Do you recall if Ronnie Rullepa did anything to you?
Cyra May reiterated her testimony during cross-examination, providing more revolting
details of her ordeal:
q So, you said that Kuya Ronnie did something to you what did he do to you on
November 17, 1995?
a "Sinaksak nga yong titi nya". He inserted his penis to my organ and to my mouth, sir.
q When you said that your kuya Ronnie inserted his penis into your organ, into your
mouth, and into your anus, would you describe what — his penis?

a Yes, sir. a It is a round object, sir.

q What did he do to you? Court:

a "Sinaksak nya ang titi sa pepe ko, sa puwit ko, at sa bunganga" Is this titi of your kuya Ronnie a part of his body?

q How many times did he do that to you? a Opo.

a Twice, sir. q Was that in the head of kuya Ronnie?

q Do you remember when he did these things to you? a No, sir.

a Opo. q Which part of his body that titi located?

q When was that? (Witness pointing to her groin area)

a When my mother was asleep, he put — he removed my panty and inserted his penis Court:
inside my vagina, my anus and my mouth, sir.
Continue
q After your Kuya Ronnie did those things to you what did you feel?
q Why were you in that room?
a "Sabi nya ganito (Witness putting her finger in her lips) Nasaktan po ako at umiyak po
ako".
a Gusto nya po matulog ako sa kuwarto niya.

q Did you cry because of hurt?

q When you were in that room, what did Kuya Ronnie do to you?

a Yes.
a "Hinubo po niya ang panty ko."

q What part of your body hurt?

q And after he remove your panty, what did Kuya Ronnie do, what did he do to you?

a "Pepe ko po." When I went to the bathroom to urinate, I felt pain in my organ, sir.13

a He inserted his penis to my organ, sir.
q Why did kuya Ronnie, was kuya Ronnie already naked or he was already wearing any
clothing?
a Still had his clothing on, sir.
q So, where did his penis, saan lumabas ang penis ni Kuya Ronnie?
a Dito po, (Witness referring or pointing to her groin area)
q So, that's the — and at the time, you did not cry and you did not shout for help?
a Sabi nya po, not to make any noise because my mother might be roused from sleep.
q How long was kuya Ronnie did that to you?
a Matagal po.
q After kuya Ronnie scrub his penis to your vagina, what other things did he do?
a After that he inserted his penis to my mouth, and to my anus, sir.
q You did not complain and you did not shout?
a I cried, sir.14
Accused-appellant draws attention to the statement of Cyra May that he was not in the
house on November 17 (1995), as reflected in the following transcript of her testimony:
q Is it not a fact that you said a while ago that when your father leaves the house, he
[was] usually accompanied by your kuya Ronnie?
a Opo.
q Why is it that Kuya Ronnie was in the house when your father left the house at that
time, on November 17?
a He was with Kuya Ronnie, sir.
4
q So, it is not correct that kuya Ronnie did something to you because your kuya Ronnie
[was] always with your Papa?
a Yes, sir.15
The above-quoted testimony of Cyra May does not indicate the time when her father Col.
Buenafe left their house on November 17, 1995 with accused-appellant and, thus, does not
preclude accused-appellant's commission of rape on the same date. In any event, a young
child is vulnerable to suggestion, hence, her affirmative response to the defense counsel's
above-quoted leading questions.
As for the variance in the claim regarding when Gloria was informed of the rape, Gloria
having testified that she learned of it on November 20, 199516 while Cyra May said that
immediately after the incident, she awakened her mother who was in the adjacent room and
reported it:17 This is a minor matter that does not detract from Cyra May's categorical,
material testimony that accused-appellant inserted his penis into her vagina.
Accused-appellant goes on to contend that Cyra May was coached, citing the following
portion of her testimony:
q "Yong sinabi mong sinira nya ang buhay mo," where did you get that phrase?
a It was the word of my Mama, sir.18
On the contrary, the foregoing testimony indicates that Cyra May was really narrating the
truth, that of hearing her mother utter "sinira niya ang buhay mo."
Accused-appellant's suggestion that Cyra May merely imagined the things of which he is
accused, perhaps getting the idea from television programs, is preposterous. It is true that
"the ordinary child is a `great weaver of romances,"' and her "imagination may induce (her)
to relate something she has heard or read in a story as personal experience."19 But Cyra
May's account is hardly the stuff of romance or fairy tales. Neither is it normal TV fare, if at
all.
This Court cannot believe that a victim of Cyra May's age could concoct a tale of defloration,
allow the examination of her private parts, and undergo the expense, trouble,
inconvenience, not to mention the trauma of public trial."20
Besides, her testimony is corroborated by the findings of Dr. Preyra that there were
abrasions in her labia minora, which she opined, could have been caused by friction with an
erect penis.

This Court thus accords great weight to the following assessment of the trial court regarding
the competency and credibility of Cyra May as a witness:
Her very tender age notwithstanding, Cyra Ma(y) nonetheless appeared to possess
the necessary intelligence and perceptiveness sufficient to invest her with the
competence to testify about her experience. She might have been an
impressionable child — as all others of her age are — but her narration of Kuya
Ronnie's placing his "titi" in her "pepe" was certainly one which could not be
considered as a common child's tale. Her responses during the examination of
counsel and of the Court established her consciousness of the distinction between
good and bad, which rendered inconceivable for her to describe a "bad" act of the
accused unless it really happened to her. Needless to state, she described the act
of the accused as bad. Her demeanor as a witness — manifested during trial by her
unhesitant, spontaneous, and plain responses to questions — further enhanced her
claim to credit and trustworthiness.21 (Italics in the original.)
In a futile attempt at exculpation, accused-appellant claims that even before the alleged
incident Cyra May was already suffering from pain in urinating. He surmises that she could
have scratched herself which caused the abrasions. Dr. Preyra, however, was quick to rule
out this possibility. She stated categorically that that part of the female organ is very
sensitive and rubbing or scratching it is painful.22 The abrasions could not, therefore, have
been self-inflicted.
That the Medical-Legal Officer found "no external signs of recent application of any form of
trauma at the time of the examination" does not preclude accused-appellant's conviction
since the infliction of force is immaterial in statutory rape.23
More. That Cyra May suffered pain in her vagina but not in her anus despite her testimony
that accused-appellant inserted his penis in both orifices does not diminish her credibility. It
is possible that accused-appellant's penis failed to penetrate her anus as deeply as it did her
vagina, the former being more resistant to extreme forces than the latter.
Accused-appellant's imputation of ill motive on the part of Gloria is puerile. No mother in her
right mind would subject her child to the humiliation, disgrace and trauma attendant to a
prosecution for rape if she were not motivated solely by the desire to incarcerate the person
responsible for the child's defilement.24 Courts are seldom, if at all, convinced that a mother
would stoop so low as to subject her daughter to physical hardship and shame concomitant
to a rape prosecution just to assuage her own hurt feelings.25
Alternatively, accused-appellant prays that he be held liable for acts of lasciviousness instead
of rape, apparently on the basis of the following testimony of Cyra May, quoted verbatim,
that he merely "scrubbed" his penis against her vagina:
q Is it not a fact that kuya Ronnie just made some scrubbed his penis into your vagina?
5
a Yes, Sir.
q And when — he did not actually penetrated your vagina?
a Yes, sir.26
Dr. Preyra, however, found abrasions in the labia minora, which is "directly beneath the labia
majora,"27 proving that there was indeed penetration of the vagina, not just a mere rubbing
or "scrubbing" of the penis against its surface.
In fine, the crime committed by accused-appellant is not merely acts of lasciviousness but
statutory rape.
The two elements of statutory rape are (1) that the accused had carnal knowledge of a
woman, and (2) that the woman is below twelve years of age. 28 As shown in the previous
discussion, the first element, carnal knowledge, had been established beyond reasonable
doubt. The same is true with respect to the second element.
The victim's age is relevant in rape cases since it may constitute an element of the offense.
Article 335 of the Revised Penal Code, as amended by Republic Act No. 7659,29 provides:
Art. 335. When and how rape is committed. — Rape is committed by having carnal
knowledge of a woman under any of the following circumstances:
3. When the woman is under twelve years of age . . .
The crime of rape shall be punished by reclusion perpetua.
Furthermore, the victim's age may constitute a qualifying circumstance, warranting the
imposition of the death sentence. The same Article states:
The death penalty shall also be imposed if the crime of rape is committed with any
of the following attendant circumstances:
1. when the victim is under eighteen (18) years of age and the offender is a parent,
ascendant, step-parent, guardian, relative by consanguinity or affinity with the
third civil degree, or the common-law spouse of the parent of the victim:
4. when the victim is . . . a child below seven (7) years old.
Because of the seemingly conflicting decisions regarding the sufficiency of evidence of the
victim's age in rape cases, this Court, in the recently decided case of People v. Pruna,30

established a set of guidelines in appreciating age as an element of the crime or as a
qualifying circumstance, to wit:
1. The best evidence to prove the age of the offended party is an original or
certified true copy of the certificate of live birth of such party.
2. In the absence of a certificate of live birth, similar authentic documents such as
baptismal certificate and school records which show the date of birth of the victim
would suffice to prove age.
3. If the certificate of live birth or authentic document is shown to have been lost
or destroyed or otherwise unavailable, the testimony, if clear and credible, of the
victim's mother or a member of the family either by affinity or consanguinity who is
qualified to testify on matters respecting pedigree such as the exact age or date of
birth of the offended party pursuant to Section 40, Rule 130 of the Rules on
Evidence shall be sufficient under the following circumstances:
a. If the victim is alleged to be below 3 years of age and what is sought to
be proved is that she is less than 7 years old;
b. If the victim is alleged to be below 7 years of age and what is sought to
be proved is that she is less than 12 years old;
c. If the victim is alleged to be below 12 years of age and what is sought to be
proved is that she is less than 18 years old.
4. In the absence of a certificate of live birth, authentic document, or the testimony
of the victim's mother or relatives concerning the victim's age, the complainant's
testimony will suffice provided that it is expressly and clearly admitted by the
accused.
5. It is the prosecution that has the burden of proving the age of the offended
party. The failure of the accused to object to the testimonial evidence regarding
age shall not be taken against him.
6. The trial court should always make a categorical finding as to the age of the
victim.
Applying the foregoing guidelines, this Court in the Pruna case held that the therein accused-
appellant could only be sentenced to suffer the penalty of reclusion perpetua since:
. . . no birth certificate or any similar authentic document, such as a baptismal
certificate of LIZETTE, was presented to prove her age. . . . .
6
However, the Medico-Legal Report relied upon by the trial court does not in any
way prove the age of LIZETTE, for there is nothing therein which even mentions her
age. Only testimonial evidence was presented to establish LIZETTE's age. Her
mother, Jacqueline, testified (that the victim was three years old at the time of the
commission of the crime).
Likewise, LIZETTE testified on 20 November 1996, or almost two years after the
incident, that she was 5 years old. However, when the defense counsel asked her
how old she was on 3 January 1995, or at the time of the rape, she replied that she
was 5 years old. Upon further question as to the date she was born, she could not
answer.
For PRUNA to be convicted of rape in its qualified form and meted the supreme
penalty of death, it must be established with certainty that LIZETTE was below 7
years old at the time of the commission of the crime. It must be stressed that the
severity of the death penalty, especially its irreversible and final nature once
carried out, makes the decision-making process in capital offenses aptly subject to
the most exacting rules of procedure and evidence.
In view of the uncertainty of LIZETTE's exact age, corroborative evidence such as
her birth certificate, baptismal certificate or any other authentic document should
be introduced in evidence in order that the qualifying circumstance of "below
seven (7) years old" is appreciated against the appellant. The lack of objection on
the part of the defense as to her age did not excuse the prosecution from
discharging its burden. That the defense invoked LIZETTE's tender age for purposes
of questioning her competency to testify is not necessarily an admission that she
was below 7 years of age when PRUNA raped her on 3 January 1995. Such being
the case, PRUNA cannot be convicted of qualified rape, and hence the death
penalty cannot be imposed on him.
However, conformably with no. 3 (b) of the foregoing guidelines, the testimony of
LIZETTE's mother that she was 3 years old at the time of the commission of the
crime is sufficient for purposes of holding PRUNA liable for statutory rape, or rape
of a girl below 12 years of age. Under the second paragraph of Article 335, as
amended by R.A. No. 7659, in relation to no. 3 of the first paragraph thereof,
having carnal knowledge of a woman under 12 years of age is punishable by
reclusion perpetua. Thus, the penalty to be imposed on PRUNA should be reclusion
perpetua, and not death penalty. (Italics in the original.)
Several cases31 suggest that courts may take "judicial notice" of the appearance of the victim
in determining her age. For example, the Court, in People v. Tipay,32 qualified the ruling in
People v. Javier,33 which required the presentation of the birth certificate to prove the rape
victim's age, with the following pronouncement:

This does not mean, however, that the presentation of the certificate of birth is at
all times necessary to prove minority. The minority of a victim of tender age who
may be below the age of ten is quite manifest and the court can take judicial notice
thereof. The crucial years pertain to the ages of fifteen to seventeen where
minority may seem to be dubitable due to one's physical appearance. In this
situation, the prosecution has the burden of proving with certainty the fact that the
victim was under 18 years of age when the rape was committed in order to justify
the imposition of the death penalty under the above-cited provision. (Emphasis
supplied.)
On the other hand, a handful of cases34 holds that courts, without the requisite hearing
prescribed by Section 3, Rule 129 of the Rules of Court,35 cannot take judicial notice of the
victim's age.
Judicial notice signifies that there are certain "facta probanda," or propositions in a party's
case, as to which he will not be required to offer evidence; these will be taken for true by the
tribunal without the need of evidence.36 Judicial notice, however, is a phrase sometimes used
in a loose way to cover some other judicial action. Certain rules of Evidence, usually known
under other names, are frequently referred to in terms of judicial notice.37
The process by which the trier of facts judges a person's age from his or her appearance
cannot be categorized as judicial notice. Judicial notice is based upon convenience and
expediency for it would certainly be superfluous, inconvenient, and expensive both to parties
and the court to require proof, in the ordinary way, of facts which are already known to
courts.38 As Tundag puts it, it "is the cognizance of certain facts which judges may properly
take and act on without proof because they already know them." Rule 129 of the Rules of
Court, where the provisions governing judicial notice are found, is entitled "What Need Not
Be Proved." When the trier of facts observes the appearance of a person to ascertain his or
her age, he is not taking judicial notice of such fact; rather, he is conducting an examination
of the evidence, the evidence being the appearance of the person. Such a process militates
against the very concept of judicial notice, the object of which is to do away with the
presentation of evidence.
This is not to say that the process is not sanctioned by the Rules of Court; on the contrary, it
does. A person's appearance, where relevant, is admissible as object evidence, the same
being addressed to the senses of the court. Section 1, Rule 130 provides:
SECTION 1. Object as evidence. — Objects as evidence are those addressed to the
senses of the court. When an object is relevant to the fact in issue, it may be
exhibited to, examined or viewed by the court.
"To be sure," one author writes, "this practice of inspection by the court of objects, things or
persons relevant to the fact in dispute, has its roots in ancient judicial procedure."39 The
author proceeds to quote from another authority:
7
"Nothing is older or commoner in the administration of law in all countries than the
submission to the senses of the tribunal itself, whether judge or jury, of objects
which furnish evidence. The view of the land by the jury, in real actions, of a wound
by the judge where mayhem was alleged, and of the person of one alleged to be
an infant, in order to fix his age, the inspection and comparison of seals, the
examination of writings, to determine, whether they are (`)blemished,(') the
implements with which a crime was committed or of a person alleged, in a bastardy
proceeding, to be the child of another, are few illustrations of what may be found
abundantly in our own legal records and textbooks for seven centuries past." 40
(Emphasis supplied.)
A person's appearance, as evidence of age (for example, of infancy, or of being under the
age of consent to intercourse), is usually regarded as relevant; and, if so, the tribunal may
properly observe the person brought before it.41 Experience teaches that corporal
appearances are approximately an index of the age of their bearer, particularly for the
marked extremes of old age and youth. In every case such evidence should be accepted and
weighed for what it may be in each case worth. In particular, the outward physical
appearance of an alleged minor may be considered in judging his age; a contrary rule would
for such an inference be pedantically over-cautious.42 Consequently, the jury or the court
trying an issue of fact may be allowed to judge the age of persons in court by observation of
such persons.43 The formal offer of the person as evidence is not necessary. The examination
and cross-examination of a party before the jury are equivalent to exhibiting him before the
jury and an offer of such person as an exhibit is properly refused.44
This Court itself has sanctioned the determination of an alien's age from his appearance. In
Braca v. Collector of Customs,45 this Court ruled that:
The customs authorities may also determine from the personal appearance of the immigrant
what his age is. The person of a Chinese alien seeking admission into the Philippine Islands is
evidence in an investigation by the board of special inquiry to determine his right to enter;
and such body may take into consideration his appearance to determine or assist in
determining his age and a finding that the applicant is not a minor based upon such
appearance is not without evidence to support it.
This Court has also implicitly recognized the same process in a criminal case. Thus, in United
States v. Agadas,46 this Court held:
Rosario Sabacahan testified that he was 17 years of age; that he had never
purchased a cedula; and that he was going to purchase a cedula the following
January. Thereupon the court asked this defendant these questions: "You are a
pretty big boy for seventeen." Answer: "I cannot tell exactly because I do not
remember when I was born, but 17 years is my guess." Court: "If you are going to
take advantage of that excuse, you had better get some positive evidence to that
effect." Answer: "I do not remember, as I already stated on what date and in what

year I was born." The court, in determining the question of the age of the
defendant, Rosario Sabacahan, said:
"The defendant, Rosario Sabacahan, testified that he thought that he was
about 17 years of age, but judging by his appearance he is a youth 18 or
19 years old. He has shown that he has no positive information on the
subject and no effort was made by the defense to prove the fact that he
is entitled to the mitigating circumstance of article 9, paragraph 2, of the
Penal code, which fact it is held to be incumbent upon the defense to
establish by satisfactory evidence in order to enable the court to give an
accused person the benefit of the mitigating circumstance."
In United States vs. Estavillo and Perez (10 Off. Gaz., 1984) Estavillo testified, when
the case was tried in the court below, that he then was only 16 years of age. There
was no other testimony in the record with reference to his age. But the trial judge
said: "The accused Estavillo, notwithstanding his testimony giving his age as 16
years, is, as a matter of fact, not less than 20." This court, in passing upon the age
of Estavillo, held:
"We presume that the trial court reached this conclusion with reference
to the age of Estavillo from the latter's personal appearance. There is no
proof in the record, as we have said, which even tends to establish the
assertion that this appellant understated his age. . . . It is true that the
trial court had an opportunity to note the personal appearance of
Estavillo for the purpose of determining his age, and by so doing reached
the conclusion that he was at least 20, just two years over 18. This
appellant testified that he was only 16, and this testimony stands
uncontradicted. Taking into consideration the marked difference in the
penalties to be imposed upon that age, we must, therefore, conclude
(resolving all doubts in favor of the appellants) that the appellants' ages
were 16 and 14 respectively."
While it is true that in the instant case Rosario testified that he was 17 years of age,
yet the trial court reached the conclusion, judging from the personal appearance of
Rosario, that "he is a youth 18 or 19 years old." Applying the rule enunciated in the
case just cited, we must conclude that there exists a reasonable doubt, at least,
with reference to the question whether Rosario was, in fact 18 years of age at the
time the robbery was committed. This doubt must be resolved in favor of the
defendant, and he is, therefore, sentenced to six months of arresto mayor in lieu of
six years ten months and one day of presidio mayor. . . . .
There can be no question, therefore, as to the admissibility of a person's appearance in
determining his or her age. As to the weight to accord such appearance, especially in rape
cases, Pruna laid down guideline no. 3, which is again reproduced hereunder:
8
3. If the certificate of live birth or authentic document is shown to have been lost
or destroyed or otherwise unavailable, the testimony, if clear and credible, of the
victim's mother or a member of the family either by affinity or consanguinity who is
qualified to testify on matters respecting pedigree such as the exact age or date of
birth of the offended party pursuant to Section 40, Rule 130 of the Rules on
Evidence shall be sufficient under the following circumstances:
a. If the victim is alleged to be below 3 years of age and what is sought to
be proved is that she is less than 7 years old;
b. If the victim is alleged to be below 7 years of age and what is sought to
be proved is that she is less than 12 years old;
c. If the victim is alleged to be below 12 years of age and what is sought
to be proved is that she is less than 18 years old.
Under the above guideline, the testimony of a relative with respect to the age of the victim is
sufficient to constitute proof beyond reasonable doubt in cases (a), (b) and (c) above. In such
cases, the disparity between the allegation and the proof of age is so great that the court can
easily determine from the appearance of the victim the veracity of the testimony. The
appearance corroborates the relative's testimony.
As the alleged age approaches the age sought to be proved, the person's appearance, as
object evidence of her age, loses probative value. Doubt as to her true age becomes greater
and, following Agadas, supra, such doubt must be resolved in favor of the accused.
This is because in the era of modernism and rapid growth, the victim's mere
physical appearance is not enough to gauge her exact age. For the extreme penalty
of death to be upheld, nothing but proof beyond reasonable doubt of every fact
necessary to constitute the crime must be substantiated. Verily, the minority of the
victim should be not only alleged but likewise proved with equal certainty and
clearness as the crime itself. Be it remembered that the proof of the victim's age in
the present case spells the difference between life and death.47
In the present case, the prosecution did not offer the victim's certificate of live birth or
similar authentic documents in evidence. The victim and her mother, however, testified that
she was only three years old at the time of the rape. Cyra May's testimony goes:
q Your name is Cyra Mae is that correct?
a Yes, sir.
q And you are 3 years old?
 9

a Yes, sir.48

That of her mother goes:

Q How old was your daughter when there things happened?

A 3 and ½ years old.

Q When was she born?

A In Manila, May 10, 1992.49

Because of the vast disparity between the alleged age (three years old) and the age sought to
be proved (below twelve years), the trial court would have had no difficulty ascertaining the
victim's age from her appearance. No reasonable doubt, therefore, exists that the second
element of statutory rape, i.e., that the victim was below twelve years of age at the time of
the commission of the offense, is present.

Whether the victim was below seven years old, however, is another matter. Here, reasonable
doubt exists. A mature three and a half-year old can easily be mistaken for an
underdeveloped seven-year old. The appearance of the victim, as object evidence, cannot be
accorded much weight and, following Pruna, the testimony of the mother is, by itself,
insufficient.

As it has not been established with moral certainty that Cyra May was below seven years old
at the time of the commission of the offense, accused-appellant cannot be sentenced to
suffer the death penalty. Only the penalty of reclusion perpetua can be imposed upon him.

In line with settled jurisprudence, the civil indemnity awarded by the trial court is increased
to P50,000.00. In addition, Cyra May is entitled to an award of moral damages in the amount
of P50,000.00.50

WHEREFORE, the Decision of the Regional Trial Court of Quezon City, Branch 96, is
AFFIRMED with MODIFICATION. Accused-appellant Ronnie Rullepa y Guinto is found GUILTY
of Statutory Rape, defined and punished by Article 335 (3) of the Revised Penal Code, as
amended, and is sentenced to suffer the penalty of reclusion perpetua. He is ordered to pay
private complainant, Cyra May Buenafe y Francisco, the amount of P50,000.00 as civil
indemnity and P50,000.00 as moral damages.

SO ORDERED.

SECOND DIVISION
[G.R. No. L-36638. June 28, 1974.]
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. ALEXANDER SACABIN @ "ROMEO",
Defendant-Appellant.
Solicitor General Estelito P. Mendoza, Assistant Solicitor General Jaime M. Lantin and
Solicitor Renato S. Puno for Plaintiff-Appellee.
Pio A. Sepulveda, for Defendant-Appellant.
DECISION
FERNANDEZ, J.:
Convicted of rape and sentenced to suffer the penalty of reclusion perpetua 1 and to pay the
offended party, Erlinda Montibon, P3,000.00 for moral damages and P3,000.00 for
exemplary damages, appellant Alexander Sacabin has appealed to this Court and now pleads
for acquittal on the ground, which the lower court overruled, that although he really had
sexual intercourse with the offended party, she voluntarily and willingly acceded to it
because they were sweethearts.
This is a classic case of rape where, on the issue of whether or not the woman was raped, the
only eye-witnesses testifying are the offended party for the prosecution and the accused in
his defense. Thus, the judicial observation has been made long ago, that rape is hard to be
proved, but still harder to be defended. And in the case at bar, We cannot be aided by the
general rule that the findings of fact of the trial judge must be sustained on appeal because
he has had the opportunity to hear and see the witnesses when they testified before him, for
all the witnesses for the prosecution testified before one trial Judge 2 , while the appellant
presented his evidence consisting of his lone testimony before another Judge 3 , and the
latter was the one that rendered the decision appealed from. We, therefore, reviewed and
evaluated all the evidence on record with extra care.
On the date of the commission of the offense, November 23, 1968, Erlinda Montibon was
barely over 15 years old. She finished sixth grade. She was then living in the house of the
spouses Patrolman and Mrs. Constancio Villondo as a helper. She knew the appellant, then
single and 22 years old. He was a laborer in the Laya Building in Iligan City, then under
construction, and was a usual buyer of native bread and cakes which Erlinda used to sell at
the supermarket nearby.
Erlinda testified that around 8:00 o’clock in the evening of November 23, 1968, she was
enticed by one Teodelita Dagondon to go to the supermarket. Teodelita said she was going
10
to buy for her birthday the following day all of Erlinda’s bread and cakes. They went upstairs
to one of the rooms of the Laya Building where they would agree on the price of the bread
and cakes. The appellant was then there inside. The door was closed and appellant was able
to have sexual intercourse with her two times.
This is the version of Erlinda on how the rape was consummated: 4
"A Sacabin went near me and wrestled me.
Q What did you do when Romeo Sacabin wrestled you?
A I wanted to get away from his hold.
Q Did you shout for help?
A Yes, I shouted for help.
Q Did you submit to the urgings of the accused in this case?
A No, sir.
Q What did you do?
A We were wrestling for sometime. In fact he smell(ed) wine.
Q Could you inform this Court more how long did you wrestle with Sacabin?
A Quite a long time before he got me.
Q During all the time that you were wrestling with him, did you not cry out for help outside?
A I shouted for help but nobody hear me because all the windows were closed.
Q What about the door?
A It was also closed.
Q Please inform this Honorable Court if after all the wrestling by Sacabin and your feminine
resistance if Sacabin was able to have a sexual intercourse with you.
A Yes, he trapped one of my legs and I fell on the ground and then he sat on me.
Q What did you feel when Romeo Sacabin was able to introduce his sexual organ into your
vagina?
A Pain.
 11

yielded your body to him.

Q After he made the insertion, what did he do if any?
A No, sir.
A He also kissed me and squeezed my mammary gland.
Q What did you do?
COURT:chanrob1es virtual 1aw library
A I also wrestled with him because I felt the pain.
Make it on record that the witness is crying.
Q When you wrestled with him, did you not occur to your mind to renew your call for help
Q When he succeeded in introducing his penis into your vagina, what did he do if any? from outside?

A He also pushed and pull his organ. A I also shouted for help . . .

Q For how long was the push and pull motion made by this Romeo Sacabin? Q Was Sacabin able to introduce his sexual organ into your vagina for the second time?

A Quite a few minutes . . .
Q Please inform this Honorable Court if after the introduction of the penis and the push and
pull motion if you felt some liquid getting inside your vagina.
A There was, sir.
Q After that, what happened? Please inform this Honorable Court.
A Yes, because he rode on me for the second time and I was already weak and I don’t want it
because it was painful.
Q Did it not occur to your mind to appeal to this Alexander Sacabin to please pity you
because you were feeling pain in your body?
A I asked Romeo not to because it was painful and then Romeo said never mind just allow me
because anyway I will marry you.

A After that Romeo Sacabin left the room but be was in the other room. Appellant Alexander Sacabin declared that he was 22 years old, single and a mason by
occupation. He saw Erlinda in the evening of that date. The two of them ate and drank at
Q What did you do after he left? Eliza’s restaurant, which was at the Iligan Supermarket, in front of which was the Laya
Building. From the restaurant, they went to her house owned by her master, Patrolman
A I was still crying . . . Villondo. While in the house, Erlinda told him that she wanted to go with him. He left and
Erlinda followed him to the Laya Building where he used to sleep. He was working there as a
Q Was that the only sexual intercourse that was done on you by the accused Alexander laborer and the building was still under construction. When they arrived at the Laya Building,
Sacabin? he told Erlinda that he would go to Cagayan upon the termination of his work. Erlinda told
him that she would go with him to Cagayan. 5
A Two times.
"q What was your answer, if any, when she told you that she is going to Cagayan with you?
COURT:chanrob1es virtual 1aw library
a I answered, ‘yes, really you love me?
When was the second time?
q What was her answer, if any?
A Nearing dawn.
a ‘Yes, I love you.’
Q In the same place?
q By the way, you have stated before this Court that you are sweethearts with Erlinda, when
A In the same place. did you become sweethearts?

Q The second time when the accused tried to make sexual intercourse with you your already a While I was working at Laya building this Erlinda was selling refreshments.
 12

found lacerations in her hymen, in positions 10 and 8 o’clock, which had just recently healed
q Where was she selling refreshments? (a laceration heals in 7 days). The lacerations could not have been more than one month old
"because at the edge of the lacerations, the color was reddish and therefore they have
a Sometime she bring refreshments at Laya building. healed recently."cralaw virtua1aw library

q More or less, can you tell the Court what time when was that when your love was accepted Physical evidence is evidence of the highest order. It speaks more eloquently than a hundred
by Erlinda? witnesses. And the physical evidence in this case strongly corroborates the testimony of the
offended party that she was raped. They consist of the green color dress and the panty that
a August 2, 1968. Erlinda was wearing at the time she was raped and which show a torn portion of the left side
of the dress and a torn portion of the panty. According to Erlinda, they were torn when
q Did you consider that you were sweethearts, did you receive anything from her, some sort appellant forcibly pulled her dress up and removed her panty shortly before she was raped.
of letters or tokens? Surprisingly. appellant did not at all rebut the testimony of Erlinda on this point.

a I did not ask anything because we used to see each other and I did not ask any
remembrance from her because she is poor like myself."cralaw virtua1aw library
Erlinda then told appellant that she loved him. They slept together in a room upstairs in the
Laya Building. In the room where they slept, there were no tenants for that particular unit of
the apartment. But there were already electric lights inside that room. They slept on a bed
made of plywood. They had two sexual intercourse, the first time from 8:00 to 9:00 o’clock
p.m., and the second in the early morning. They had already one sexual intercourse about
one week prior to November 23, 1968, also at the Laya Building. At that time, she was getting
water. 6
Francisco Bagohin, who was then also residing in the house of Patrolman and Mrs.
Constancio Villondo, he being the drive of the rig owned by the latter, corroborated the
testimony of the offended party, Erlinda, that Teodelita Dagondon was the one who fetched
Erlinda "because the puto and bread that she is selling will all be bought by Teodelita for the
next day would be her birthday."cralaw virtua1aw library
The testimony of the appellant that he and Erlinda were sweethearts is unworthy of belief.
Erlinda denied vehemently this testimony of the appellant and even stated that he never
courted her. And if they were really sweethearts, Erlinda would not have filed this serious
charge of rape against him.

After a very careful review of the evidence, We affirm the lower court’s finding that the IN VIEW OF ALL THE FOREGOING, the decision appealed from is hereby affirmed in its
version of the offended party is the one that should be believed over that of the Appellant. entirety with costs against Appellant.

The offended party, Erlinda, was a young provinciana, barely over 15 years of age, uncouth
and almost unlettered, was a mere household helper but at the same time engaged in the
selling of native bread and cakes. She belonged to the poor and was one of them, and was
still possessed of the traditional and proverbial modesty of the Filipina, especially the
provinciana. She would not have filed a complaint for rape and suffered the torment if not
the ignominy of having to testify in a court of justice about the wrong done to her, if in truth
she was not really raped.

Early in the morning of November 24, 1968, she was brought by the appellant to his father’s
house in Rosario Heights. She went with him because she was threatened with death if she
would not do so. Patrolman Villondo was already there because he was previously informed
that Erlinda failed to return to their house and that appellant was the one that brought her.
And according to Erlinda, she did not tell Patrolman Villondo that she was raped as she was
"ashamed to tell him because he is a man." And at that time, Villondo’s wife was in Cebu. But
when she arrived about six days later, she was at once informed by Erlinda that appellant
raped her.

And immediately thereafter, he was brought to the medico legal officer of Iligan City, Dr.
Manuel Simon, who testified that on December 2, 1968, he examined the offended party,
 13

THIRD DIVISION prove a state of facts contrary to what the witness testifies on. A rule that provides that the
party calling an adverse witness shall not be bound by his testimony does not mean that such
G.R. No. 160855 April 16, 2008 testimony may not be given its proper weight, but merely that the calling party shall not be
precluded from rebutting his testimony or from impeaching him. This, the petitioner failed to
do.
CONCEPCION CHUA GAW, petitioner,
vs.
SUY BEN CHUA and FELISA CHUA, respondents. Same; Same; Best Evidence Rule; A notarized document carries evidentiary weight as to its
due execution and documents acknowledged before a notary public have in their favor the
presumption of regularity.
DECISION

—It is also worthy to note that both the Deed of Partition and the Deed of Sale were
Remedial Law; Evidence; Adverse Witnesses; The rule is that the plaintiff must rely on the
acknowledged before a Notary Public. The notarization of a private document converts it into
strength of his own evidence and not upon the weakness of the defendant’s evidence;
a public document, and makes it admissible in court without further proof of its authenticity.
Preponderance of evidence is determined by considering all the facts and circumstances of
It is entitled to full faith and credit upon its face. A notarized document carries evidentiary
the case, culled from the evidence regardless of who actually presented it.
weight as to its due execution, and documents acknowledged before a notary public have in
their favor the presumption of regularity. Such a document must be given full force and
—The delineation of a piece of evidence as part of the evidence of one party or the other is effect absent a strong, complete and conclusive proof of its falsity or nullity on account of
only significant in determining whether the party on whose shoulders lies the burden of some flaws or defects recognized by law. A public document executed and attested through
proof was able to meet the quantum of evidence needed to discharge the burden. In civil the intervention of a notary public is, generally, evidence of the facts therein express in clear
cases, that burden devolves upon the plaintiff who must establish her case by preponderance unequivocal manner.
of evidence. The rule is that the plaintiff must rely on the strength of his own evidence and
not upon the weakness of the defendant’s evidence. Thus, it barely matters who with a piece
Same; Same; Same; The “best evidence rule” as encapsulated in Rule 130, Section 3 of the
of evidence is credited. In the end, the court will have to consider the entirety of the
Revised Rules of Civil Procedure applies only when the content of such document is the subject
evidence presented by both parties. Preponderance of evidence is then determined by
of the inquiry.
considering all the facts and circumstances of the case, culled from the evidence, regardless
of who actually presented it.
—The “best evidence rule” as encapsulated in Rule 130, Section 3, of the Revised Rules of
Civil Procedure applies only when the content of such document is the subject of the inquiry.
Same; Same; Same; Under a rule permitting the impeachment of an adverse witness,
Where the issue is only as to whether such document was actually executed, or exists, or on
although the calling party does not vouch for the witness’ veracity, he is nonetheless bound
the circumstances relevant to or surrounding its execution, the best evidence rule does not
by his testimony if it is not contradicted or remains unrebutted.
apply and testimonial evidence is admissible. Any other substitutionary evidence is likewise
admissible without need to account for the original. Moreover, production
—That the witness is the adverse party does not necessarily mean that the calling party will
not be bound by the former’s testimony. The fact remains that it was at his instance that his
NACHURA, J.:
adversary was put on the witness stand. Unlike an ordinary witness, the calling party may
impeach an adverse witness in all respects as if he had been called by the adverse party,
except by evidence of his bad character. Under a rule permitting the impeachment of an This is a Petition for Review on Certiorari from the Decision1 of the Court of Appeals (CA) in
adverse witness, although the calling party does not vouch for the witness’ veracity, he is CA-G.R. CV No. 66790 and Resolution2 denying the motion for reconsideration. The assailed
nonetheless bound by his testimony if it is not contradicted or remains unrebutted. decision affirmed the ruling of the Regional Trial Court (RTC) in a Complaint for Sum of
Money in favor of the plaintiff.
Same; Same; Same; A party who calls his adversary as a witness is not bound by the latter’s
testimony only in the sense that he may contradict him by introducing other evidence to The antecedents are as follows:
prove a state of facts contrary to what the witness testifies on.
Spouses Chua Chin and Chan Chi were the founders of three business enterprises3 namely:
—A party who calls his adversary as a witness is, therefore, not bound by the latter’s Hagonoy Lumber, Capitol Sawmill Corporation, and Columbia Wood Industries. The couple
testimony only in the sense that he may contradict him by introducing other evidence to had seven children, namely, Santos Chua; Concepcion Chua; Suy Ben Chua; Chua Suy Phen;

Chua Sioc Huan; Chua Suy Lu; and Julita Chua. On June 19, 1986, Chua Chin died, leaving his
wife Chan Chi and his seven children as his only surviving heirs. At the time of Chua Chin’s
death, the net worth of Hagonoy Lumber was P415,487.20.4
On December 8, 1986, his surviving heirs executed a Deed of Extra-Judicial Partition and
Renunciation of Hereditary Rights in Favor of a Co-Heir5 (Deed of Partition, for brevity),
wherein the heirs settled their interest in Hagonoy Lumber as follows: one-half (1/2) thereof
will pertain to the surviving spouse, Chan Chi, as her share in the conjugal partnership; and
the other half, equivalent to P207,743.60, will be divided among Chan Chi and the seven
children in equal pro indiviso shares equivalent to P25,967.00 each.6 In said document, Chan
Chi and the six children likewise agreed to voluntarily renounce and waive their shares over
Hagonoy Lumber in favor of their co-heir, Chua Sioc Huan.
In May 1988, petitioner Concepcion Chua Gaw and her husband, Antonio Gaw, asked
respondent, Suy Ben Chua, to lend them P200,000.00 which they will use for the
construction of their house in Marilao, Bulacan. The parties agreed that the loan will be
payable within six (6) months without interest.7 On June 7, 1988, respondent issued in their
favor China Banking Corporation Check No. 2408108 for P200,000.00 which he delivered to
the couple’s house in Marilao, Bulacan. Antonio later encashed the check.
On August 1, 1990, their sister, Chua Sioc Huan, executed a Deed of Sale over all her rights
and interests in Hagonoy Lumber for a consideration of P255,000.00 in favor of respondent.9
Meantime, the spouses Gaw failed to pay the amount they borrowed from respondent
within the designated period. Respondent sent the couple a demand letter,10 dated March
25, 1991, requesting them to settle their obligation with the warning that he will be
constrained to take the appropriate legal action if they fail to do so.
Failing to heed his demand, respondent filed a Complaint for Sum of Money against the
spouses Gaw with the RTC. The complaint alleged that on June 7, 1988, he extended a loan to
the spouses Gaw for P200,000.00, payable within six months without interest, but despite
several demands, the couple failed to pay their obligation. 11
In their Answer (with Compulsory Counterclaim), the spouses Gaw contended that the
P200,000.00 was not a loan but petitioner’s share in the profits of Hagonoy Lumber, one of
her family’s businesses. According to the spouses, when they transferred residence to
Marilao, Bulacan, petitioner asked respondent for an accounting, and payment of her share
in the profits, of Capital Sawmills Corporation, Columbia Wood Industries Corporation, and
Hagonoy Lumber. They claimed that respondent persuaded petitioner to temporarily forego
her demand as it would offend their mother who still wanted to remain in control of the
family businesses. To insure that she will defer her demand, respondent allegedly gave her
P200,000.00 as her share in the profits of Hagonoy Lumber.12
14
In his Reply, respondent averred that the spouses Gaw did not demand from him an
accounting of Capitol Sawmills Corporation, Columbia Wood Industries, and Hagonoy
Lumber. He asserted that the spouses Gaw, in fact, have no right whatsoever in these
businesses that would entitle them to an accounting thereof. Respondent insisted that the
P200,000.00 was given to and accepted by them as a loan and not as their share in Hagonoy
Lumber.13
With leave of court, the spouses Gaw filed an Answer (with Amended Compulsory
Counterclaim) wherein they insisted that petitioner, as one of the compulsory heirs, is
entitled to one-sixth (1/6) of Hagonoy Lumber, which the respondent has arrogated to
himself. They claimed that, despite repeated demands, respondent has failed and refused to
account for the operations of Hagonoy Lumber and to deliver her share therein. They then
prayed that respondent make an accounting of the operations of Hagonoy Lumber and to
deliver to petitioner her one-sixth (1/6) share thereof, which was estimated to be worth not
less than P500,000.00.14
In his Answer to Amended Counterclaim, respondent explained that his sister, Chua Sioc
Huan, became the sole owner of Hagonoy Lumber when the heirs executed the Deed of
Partition on December 8, 1986. In turn, he became the sole owner of Hagonoy Lumber when
he bought it from Chua Sioc Huan, as evidenced by the Deed of Sale dated August 1, 1990.15
Defendants, in their reply,16 countered that the documents on which plaintiff anchors his
claim of ownership over Hagonoy Lumber were not true and valid agreements and do not
express the real intention of the parties. They claimed that these documents are mere paper
arrangements which were prepared only upon the advice of a counsel until all the heirs could
reach and sign a final and binding agreement, which, up to such time, has not been executed
by the heirs.17
During trial, the spouses Gaw called the respondent to testify as adverse witness under
Section 10, Rule 132. On direct examination, respondent testified that Hagonoy Lumber was
the conjugal property of his parents Chua Chin and Chan Chi, who were both Chinese
citizens. He narrated that, initially, his father leased the lots where Hagonoy Lumber is
presently located from his godfather, Lu Pieng, and that his father constructed the two-
storey concrete building standing thereon. According to respondent, when he was in high
school, it was his father who managed the business but he and his other siblings were
helping him. Later, his sister, Chua Sioc Huan, managed Hogonoy Lumber together with their
other brothers and sisters. He stated that he also managed Hagonoy Lumber when he was in
high school, but he stopped when he got married and found another job. He said that he now
owns the lots where Hagonoy Lumber is operating.18
On cross-examination, respondent explained that he ceased to be a stockholder of Capitol
Sawmill when he sold his shares of stock to the other stockholders on January 1, 1991. He
further testified that Chua Sioc Huan acquired Hagonoy Lumber by virtue of a Deed of
Partition, executed by the heirs of Chua Chin. He, in turn, became the owner of Hagonoy

Lumber when he bought the same from Chua Sioc Huan through a Deed of Sale dated August
1, 1990. 19
On re-direct examination, respondent stated that he sold his shares of stock in Capitol
Sawmill for P254,000.00, which payment he received in cash. He also paid the purchase price
of P255,000.00 for Hagonoy Lumber in cash, which payment was not covered by a separate
receipt as he merely delivered the same to Chua Sioc Huan at her house in Paso de Blas,
Valenzuela. Although he maintains several accounts at Planters Bank, Paluwagan ng Bayan,
and China Bank, the amount he paid to Chua Sioc Huan was not taken from any of them. He
kept the amount in the house because he was engaged in rediscounting checks of people
from the public market. 20
On December 10, 1998, Antonio Gaw died due to cardio vascular and respiratory failure.21
On February 11, 2000, the RTC rendered a Decision in favor of the respondent, thus:
WHEREFORE, in the light of all the foregoing, the Court hereby renders judgement
ordering defendant Concepcion Chua Gaw to pay the [respondent] the following:
1. P200,000.00 representing the principal obligation with legal interest from judicial
demand or the institution of the complaint on November 19, 1991;
2. P50,000.00 as attorney’s fees; and
3. Costs of suit.
The defendants’ counterclaim is hereby dismissed for being devoid of merit.
SO ORDERED.22
The RTC held that respondent is entitled to the payment of the amount of P200,000.00 with
interest. It noted that respondent personally issued Check No. 240810 to petitioner and her
husband upon their request to lend them the aforesaid amount. The trial court concluded
that the P200,000.00 was a loan advanced by the respondent from his own funds and not
remunerations for services rendered to Hagonoy Lumber nor petitioner’s advance share in
the profits of their parents’ businesses.
The trial court further held that the validity and due execution of the Deed of Partition and
the Deed of Sale, evidencing transfer of ownership of Hagonoy Lumber from Chua Sioc Huan
to respondent, was never impugned. Although respondent failed to produce the originals of
the documents, petitioner judicially admitted the due execution of the Deed of Partition, and
even acknowledged her signature thereon, thus constitutes an exception to the best
evidence rule. As for the Deed of Sale, since the contents thereof have not been put in issue,
15
the non-presentation of the original document is not fatal so as to affect its authenticity as
well as the truth of its contents. Also, the parties to the documents themselves do not
contest their validity. Ultimately, petitioner failed to establish her right to demand an
accounting of the operations of Hagonoy Lumber nor the delivery of her 1/6 share therein.
As for petitioner’s claim that an accounting be done on Capitol Sawmill Corporation and
Columbia Wood Industries, the trial court held that respondent is under no obligation to
make such an accounting since he is not charged with operating these enterprises. 23
Aggrieved, petitioner appealed to the CA, alleging that the trial court erred (1) when it
considered the amount of P200,000.00 as a loan obligation and not Concepcion’s share in the
profits of Hagonoy Lumber; (2) when it considered as evidence for the defendant, plaintiff’s
testimony when he was called to testify as an adverse party under Section 10 (e), Rule 132 of
the Rules of Court; and (3) when it considered admissible mere copies of the Deed of
Partition and Deed of Sale to prove that respondent is now the owner of Hagonoy Lumber.24
On May 23, 2003, the CA affirmed the Decision of the RTC. 25 The appellate court found
baseless the petitioner’s argument that the RTC should not have included respondent’s
testimony as part of petitioner’s evidence. The CA noted that the petitioner went on a fishing
expedition, the taking of respondent’s testimony having taken up a total of eleven hearings,
and upon failing to obtain favorable information from the respondent, she now disclaims the
same. Moreover, the CA held that the petitioner failed to show that the inclusion of
respondent’s testimony in the statement of facts in the assailed decision unduly prejudiced
her defense and counterclaims. In fact, the CA noted that the facts testified to by respondent
were deducible from the totality of the evidence presented.
The CA likewise found untenable petitioner’s claim that Exhibits "H" (Deed of Sale) and
Exhibit "I" (Deed of Partition) were merely temporary paper arrangements. The CA agreed
with the RTC that the testimony of petitioner regarding the matter was uncorroborated —
she should have presented the other heirs to attest to the truth of her allegation. Instead,
petitioner admitted the due execution of the said documents. Since petitioner did not
dispute the due execution and existence of Exhibits "H" and "I", there was no need to
produce the originals of the documents in accordance with the best evidence rule.26
On December 2, 2003, the CA denied the petitioner’s motion for reconsideration for lack of
merit.27
Petitioner is before this Court in this petition for review on certiorari, raising the following
errors:
I. THAT ON THE PRELIMINARY IMPORTANT RELATED ISSUE, CLEAR AND PALPABLE
LEGAL ERROR HAS BEEN COMMITTED IN THE APPLICATION AND LEGAL
SIGNIFICANCE OF THE RULE ON EXAMINATION OF ADVERSE PARTY OR HOSTILE

WITNESS UNDER SECTION 10 (d) AND (e) OF RULE 132, CAUSING SERIOUS DOUBT
ON THE LOWER COURT’S APPEALED DECISION’S OBJECTIVITY, ANNEX "C".
II. THAT ON THE IMPORTANT LEGAL ISSUE RELATIVE TO THE AFORESAID TWO
OPPOSING CLAIMS OF RESPONDENT AND PETITIONER, CLEAR AND PALPABLE
LEGAL ERROR HAS BEEN COMMITTED UNDER THE LOWER COURT’S DECISION
ANNEX "C" AND THE QUESTIONED DECISION OF MAY 23, 2003 (ANNEX "A") AND
THE RESOLUTION OF DECEMBER 2, 2003, (ANNEX "B") IN DEVIATING FROM AND
DISREGARDING ESTABLISHED SUPREME COURT DECISIONS ENJOINING COURTS
NOT TO OVERLOOK OR MISINTERPRET IMPORTANT FACTS AND CIRCUMSTANCES,
SUPPORTED BY CLEAR AND CONVINCING EVIDENCE ON RECORD, AND WHICH ARE
OF GREAT WEIGHT AND VALUE, WHICH WOULD CHANGE THE RESULT OF THE CASE
AND ARRIVE AT A JUST, FAIR AND OBJECTIVE DECISION. (Citations omitted)
III. THAT FINALLY, AS TO THE OTHER LEGAL IMPORTANT ISSUE RELATIVE TO CLAIM
OR OWNERSHIP OF THE "Hagonoy Lumber" FAMILY BUSINESS, CLEAR AND
PALPABLE LEGAL ERROR HAS BEEN COMMITTED ON THE REQUIREMENTS AND
CORRECT APPLICATION OF THE "BEST EVIDENCE RULE" UNDER SECTION 3, RULE
130 OF THE REVISED RULES OF COURT.28
The petition is without merit.
Petitioner contends that her case was unduly prejudiced by the RTC’s treatment of the
respondent’s testimony as adverse witness during cross-examination by his own counsel as
part of her evidence. Petitioner argues that the adverse witness’ testimony elicited during
cross-examination should not be considered as evidence of the calling party. She contends
that the examination of respondent as adverse witness did not make him her witness and
she is not bound by his testimony, particularly during cross-examination by his own
counsel.29 In particular, the petitioner avers that the following testimony of the respondent
as adverse witness should not be considered as her evidence:
(11.a) That RESPONDENT-Appellee became owner of the "HAGONOY LUMBER"
business when he bought the same from Chua Sioc Huan through a Deed of Sale
dated August 1, 1990 (EXH.H);
(11.b) That the "HAGONOY LUMBER," on the other hand, was acquired by the sister
Chua Sioc Huan, by virtue of Extrajudicial Partition and Renunciation of Hereditary
Rights in favor of a Co-Heir (EXH. I);
(11.c) That the 3 lots on which the "HAGONOY LUMBER" business is located were
acquired by Lu Pieng from the Santos family under the Deed of Absolute Sale (EXH.
J); that Lu Pieng sold the Lots to Chua Suy Lu in 1976 (EXHS. K, L, & M.); that Chua
Siok Huan eventually became owner of the 3 Lots; and in 1989 Chua Sioc Huan sold
16
them to RESPONDENT-Appellee (EXHS. Q and P); that after he acquired the 3 Lots,
he has not sold them to anyone and he is the owner of the lots.30
We do not agree that petitioner’s case was prejudiced by the RTC’s treatment of the
respondent’s testimony during cross-examination as her evidence.
If there was an error committed by the RTC in ascribing to the petitioner the respondent’s
testimony as adverse witness during cross-examination by his own counsel, it constitute a
harmless error which would not, in any way, change the result of the case.
In the first place, the delineation of a piece of evidence as part of the evidence of one party
or the other is only significant in determining whether the party on whose shoulders lies the
burden of proof was able to meet the quantum of evidence needed to discharge the burden.
In civil cases, that burden devolves upon the plaintiff who must establish her case by
preponderance of evidence. The rule is that the plaintiff must rely on the strength of his own
evidence and not upon the weakness of the defendant’s evidence. Thus, it barely matters
who with a piece of evidence is credited. In the end, the court will have to consider the
entirety of the evidence presented by both parties. Preponderance of evidence is then
determined by considering all the facts and circumstances of the case, culled from the
evidence, regardless of who actually presented it.31
That the witness is the adverse party does not necessarily mean that the calling party will not
be bound by the former’s testimony. The fact remains that it was at his instance that his
adversary was put on the witness stand. Unlike an ordinary witness, the calling party may
impeach an adverse witness in all respects as if he had been called by the adverse party,32
except by evidence of his bad character.33 Under a rule permitting the impeachment of an
adverse witness, although the calling party does not vouch for the witness’ veracity, he is
nonetheless bound by his testimony if it is not contradicted or remains unrebutted.34
A party who calls his adversary as a witness is, therefore, not bound by the latter’s testimony
only in the sense that he may contradict him by introducing other evidence to prove a state
of facts contrary to what the witness testifies on.35 A rule that provides that the party calling
an adverse witness shall not be bound by his testimony does not mean that such testimony
may not be given its proper weight, but merely that the calling party shall not be precluded
from rebutting his testimony or from impeaching him.36 This, the petitioner failed to do.
In the present case, the petitioner, by her own testimony, failed to discredit the respondent’s
testimony on how Hagonoy Lumber became his sole property. The petitioner admitted
having signed the Deed of Partition but she insisted that the transfer of the property to Chua
Siok Huan was only temporary. On cross-examination, she confessed that no other document
was executed to indicate that the transfer of the business to Chua Siok Huan was a
temporary arrangement. She declared that, after their mother died in 1993, she did not
initiate any action concerning Hagonoy Lumber, and it was only in her counterclaim in the
instant that, for the first time, she raised a claim over the business.

Due process requires that in reaching a decision, a tribunal must consider the entire evidence
presented.37 All the parties to the case, therefore, are considered bound by the favorable or
unfavorable effects resulting from the evidence.38 As already mentioned, in arriving at a
decision, the entirety of the evidence presented will be considered, regardless of the party
who offered them in evidence. In this light, the more vital consideration is not whether a
piece of evidence was properly attributed to one party, but whether it was accorded the
apposite probative weight by the court. The testimony of an adverse witness is evidence in
the case and should be given its proper weight, and such evidence becomes weightier if the
other party fails to impeach the witness or contradict his testimony.
Significantly, the RTC’s finding that the P200,000.00 was given to the petitioner and her
husband as a loan is supported by the evidence on record. Hence, we do not agree with the
petitioner’s contention that the RTC has overlooked certain facts of great weight and value in
arriving at its decision. The RTC merely took into consideration evidence which it found to be
more credible than the self-serving and uncorroborated testimony of the petitioner.
At this juncture, we reiterate the well-entrenched doctrine that the findings of fact of the CA
affirming those of the trial court are accorded great respect, even finality, by this Court. Only
errors of law, not of fact, may be reviewed by this Court in petitions for review on certiorari
under Rule 45.39 A departure from the general rule may be warranted where the findings of
fact of the CA are contrary to the findings and conclusions of the trial court, or when the
same is unsupported by the evidence on record.40 There is no reason to apply the exception
in the instant case because the findings and conclusions of the CA are in full accord with
those of the trial court. These findings are buttressed by the evidence on record. Moreover,
the issues and errors alleged in this petition are substantially the very same questions of fact
raised by petitioner in the appellate court.
On the issue of whether the P200,000.00 was really a loan, it is well to remember that a
check may be evidence of indebtedness.41 A check, the entries of which are in writing, could
prove a loan transaction.42 It is pure naiveté to insist that an entrepreneur who has several
sources of income and has access to considerable bank credit, no longer has any reason to
borrow any amount.
The petitioner’s allegation that the P200,000.00 was advance on her share in the profits of
Hagonoy Lumber is implausible. It is true that Hagonoy Lumber was originally owned by the
parents of petitioner and respondent. However, on December 8, 1986, the heirs freely
renounced and waived in favor of their sister Chua Sioc Huan all their hereditary shares and
interest therein, as shown by the Deed of Partition which the petitioner herself signed. By
virtue of this deed, Chua Sioc Huan became the sole owner and proprietor of Hagonoy
Lumber. Thus, when the respondent delivered the check for P200,000.00 to the petitioner on
June 7, 1988, Chua Sioc Huan was already the sole owner of Hagonoy Lumber. At that time,
both petitioner and respondent no longer had any interest in the business enterprise; neither
had a right to demand a share in the profits of the business. Respondent became the sole
owner of Hagonoy Lumber only after Chua Sioc Huan sold it to him on August 1, 1990. So,
when the respondent delivered to the petitioner the P200,000.00 check on June 7, 1988, it
17
could not have been given as an advance on petitioner’s share in the business, because at
that moment in time both of them had no participation, interest or share in Hagonoy
Lumber. Even assuming, arguendo, that the check was an advance on the petitioner’s share
in the profits of the business, it was highly unlikely that the respondent would deliver a check
drawn against his personal, and not against the business enterprise’s account.
It is also worthy to note that both the Deed of Partition and the Deed of Sale were
acknowledged before a Notary Public. The notarization of a private document converts it into
a public document, and makes it admissible in court without further proof of its
authenticity.43 It is entitled to full faith and credit upon its face. 44 A notarized document
carries evidentiary weight as to its due execution, and documents acknowledged before a
notary public have in their favor the presumption of regularity. Such a document must be
given full force and effect absent a strong, complete and conclusive proof of its falsity or
nullity on account of some flaws or defects recognized by law.45 A public document executed
and attested through the intervention of a notary public is, generally, evidence of the facts
therein express in clear unequivocal manner.46
Petitioner, however, maintains that the RTC erred in admitting in evidence a mere copy of
the Deed of Partition and the Deed of Sale in violation of the best evidence rule. In addition,
petitioner insists that the Deed of Sale was not the result of bona fide negotiations between
a true seller and buyer.
The "best evidence rule" as encapsulated in Rule 130, Section 3,47 of the Revised Rules of Civil
Procedure applies only when the content of such document is the subject of the inquiry.
Where the issue is only as to whether such document was actually executed, or exists, or on
the circumstances relevant to or surrounding its execution, the best evidence rule does not
apply and testimonial evidence is admissible. Any other substitutionary evidence is likewise
admissible without need to account for the original.48 Moreover, production of the original
may be dispensed with, in the trial court’s discretion, whenever the opponent does not bona
fide dispute the contents of the document and no other useful purpose will be served by
requiring production.49
Accordingly, we find that the best evidence rule is not applicable to the instant case. Here,
there was no dispute as to the terms of either deed; hence, the RTC correctly admitted in
evidence mere copies of the two deeds. The petitioner never even denied their due
execution and admitted that she signed the Deed of Partition.50 As for the Deed of Sale,
petitioner had, in effect, admitted its genuineness and due execution when she failed to
specifically deny it in the manner required by the rules.51 The petitioner merely claimed that
said documents do not express the true agreement and intention of the parties since they
were only provisional paper arrangements made upon the advice of counsel.52 Apparently,
the petitioner does not contest the contents of these deeds but alleges that there was a
contemporaneous agreement that the transfer of Hagonoy Lumber to Chua Sioc Huan was
only temporary.
 18

An agreement or the contract between the parties is the formal expression of the parties’
rights, duties and obligations. It is the best evidence of the intention of the parties.53 The
parties’ intention is to be deciphered from the language used in the contract, not from the
unilateral post facto assertions of one of the parties, or of third parties who are strangers to
the contract.54 Thus, when the terms of an agreement have been reduced to writing, it is
deemed to contain all the terms agreed upon and there can be, between the parties and
their successors in interest, no evidence of such terms other than the contents of the written
agreement.55

WHEREFORE, premises considered, the petition is DENIED. The Decision of the Court of
Appeals in CA-G.R. CV No. 66790 dated May 23, 2003 and Resolution dated December 2,
2003 are AFFIRMED.

SO ORDERED.

THIRD DIVISION
G.R. No. 156132 February 6, 2007
CITIBANK, N.A. (Formerly First National City Bank) and INVESTORS’ FINANCE
CORPORATION, doing business under the name and style of FNCB Finance, Petitioners,
vs.
MODESTA R. SABENIANO, Respondent.
RESOLUTION
CHICO-NAZARIO, J.:
On 16 October 2006, this Court promulgated its Decision1 in the above-entitled case, the
dispositive portion of which reads –
IN VIEW OF THE FOREGOING, the instant Petition is PARTLY GRANTED. The assailed Decision
of the Court of Appeals in CA-G.R. No. 51930, dated 26 March 2002, as already modified by
its Resolution, dated 20 November 2002, is hereby AFFIRMED WITH MODIFICATION, as
follows –
1. PNs No. 23356 and 23357 are DECLARED subsisting and outstanding. Petitioner
Citibank is ORDERED to return to respondent the principal amounts of the said PNs,
amounting to Three Hundred Eighteen Thousand Eight Hundred Ninety-Seven
Pesos and Thirty-Four Centavos (P318,897.34) and Two Hundred Three
Thousand One Hundred Fifty Pesos (P203,150.00), respectively, plus the
stipulated interest of Fourteen and a half percent (14.5%) per annum,
beginning 17 March 1977;
2. The remittance of One Hundred Forty-Nine Thousand Six Hundred Thirty
Two US Dollars and Ninety-Nine Cents (US$149,632.99) from respondent’s
Citibank-Geneva accounts to petitioner Citibank in Manila, and the application
of the same against respondent’s outstanding loans with the latter, is
DECLARED illegal, null and void. Petitioner Citibank is ORDERED to refund to
respondent the said amount, or its equivalent in Philippine currency using the
exchange rate at the time of payment, plus the stipulated interest for each of
the fiduciary placements and current accounts involved, beginning 26 October
1979;
3. Petitioner Citibank is ORDERED to pay respondent moral damages in the
amount of Three Hundred Thousand Pesos (P300,000.00); exemplary damages Balance of respondent’s obligation
in the amount of Two Hundred Fifty Thousand Pesos (P250,000.00); and
attorney’s fees in the amount of Two Hundred Thousand Pesos (P200,000.00); and
19
4. Respondent is ORDERED to pay petitioner Citibank the balance of her
outstanding loans, which, from the respective dates of their maturity to 5
September 1979, was computed to be in the sum of One Million Sixty-Nine
Thousand Eight Hundred Forty-Seven Pesos and Forty Centavos (P1,069,847.40),
inclusive of interest. These outstanding loans shall continue to earn interest, at the
rates stipulated in the corresponding PNs, from 5 September 1979 until payment
thereof.
Subsequent thereto, respondent Modesta R. Sabeniano filed an Urgent Motion to Clarify
and/or Confirm Decision with Notice of Judgment on 20 October 2006; while, petitioners
Citibank, N.A. and FNCB Finance2 filed their Motion for Partial Reconsideration of the
foregoing Decision on 6 November 2006.
The facts of the case, as determined by this Court in its Decision, may be summarized as
follows.
Respondent was a client of petitioners. She had several deposits and market placements with
petitioners, among which were her savings account with the local branch of petitioner
Citibank (Citibank-Manila3 ); money market placements with petitioner FNCB Finance; and
dollar accounts with the Geneva branch of petitioner Citibank (Citibank-Geneva). At the same
time, respondent had outstanding loans with petitioner Citibank, incurred at Citibank-Manila,
the principal amounts aggregating to P1,920,000.00, all of which had become due and
demandable by May 1979. Despite repeated demands by petitioner Citibank, respondent
failed to pay her outstanding loans. Thus, petitioner Citibank used respondent’s deposits and
P
Respondent’s outstanding obligation (principal and interest as of 26 October 1979)
2,156,940.58
Less: Proceeds from respondent’s money market placements with petitioner FNCB Finance
(principal and interest as of 5 September 1979) (1,022,916.66)
Deposits in respondent’s bank accounts with petitioner Citibank (31,079.14)
Proceeds of respondent’s money market placements and dollar accounts with
Citibank-Geneva (peso equivalent as of 26 October 1979) (1,102,944.78)
P 0.00
money market placements to off-set and liquidate her outstanding obligations, as follows –

Respondent, however, denied having any outstanding loans with petitioner Citibank. She
likewise denied that she was duly informed of the off-setting or compensation thereof made
by petitioner Citibank using her deposits and money market placements with petitioners.
Hence, respondent sought to recover her deposits and money market placements.
Respondent instituted a complaint for "Accounting, Sum of Money and Damages" against
petitioners, docketed as Civil Case No. 11336, before the Regional Trial Court (RTC) of Makati
City. After trial proper, which lasted for a decade, the RTC rendered a Decision4 on 24 August
1995, the dispositive portion of which reads –
WHEREFORE, in view of all the foregoing, decision is hereby rendered as follows:
(1) Declaring as illegal, null and void the setoff effected by the defendant Bank
[petitioner Citibank] of plaintiff’s [respondent Sabeniano] dollar deposit with
Citibank, Switzerland, in the amount of US$149,632.99, and ordering the said
defendant [petitioner Citibank] to refund the said amount to the plaintiff with legal
interest at the rate of twelve percent (12%) per annum, compounded yearly, from
31 October 1979 until fully paid, or its peso equivalent at the time of payment;
(2) Declaring the plaintiff [respondent Sabeniano] indebted to the defendant Bank
[petitioner Citibank] in the amount of P1,069,847.40 as of 5 September 1979 and
ordering the plaintiff [respondent Sabeniano] to pay said amount, however, there
shall be no interest and penalty charges from the time the illegal setoff was
effected on 31 October 1979;
(3) Dismissing all other claims and counterclaims interposed by the parties against
each other.
Costs against the defendant Bank.
All the parties appealed the afore-mentioned RTC Decision to the Court of Appeals, docketed
as CA-G.R. CV No. 51930. On 26 March 2002, the appellate court promulgated its Decision,5
ruling entirely in favor of respondent, to wit –
Wherefore, premises considered, the assailed 24 August 1995 Decision of the court a quo is
hereby AFFIRMED with MODIFICATION, as follows:
1. Declaring as illegal, null and void the set-off effected by the defendant-appellant
Bank of the plaintiff-appellant’s dollar deposit with Citibank, Switzerland, in the
amount of US$149,632.99, and ordering defendant-appellant Citibank to refund
the said amount to the plaintiff-appellant with legal interest at the rate of twelve
percent (12%) per annum, compounded yearly, from 31 October 1979 until fully
paid, or its peso equivalent at the time of payment;
20
2. As defendant-appellant Citibank failed to establish by competent evidence the
alleged indebtedness of plaintiff-appellant, the set-off of P1,069,847.40 in the
account of Ms. Sabeniano is hereby declared as without legal and factual basis;
3. As defendants-appellants failed to account the following plaintiff-appellant’s
money market placements, savings account and current accounts, the former is
hereby ordered to return the same, in accordance with the terms and conditions
agreed upon by the contending parties as evidenced by the certificates of
investments, to wit:
(i) Citibank NNPN Serial No. 023356 (Cancels and Supersedes NNPN No.
22526) issued on 17 March 1977, P318,897.34 with 14.50% interest p.a.;
(ii) Citibank NNPN Serial No. 23357 (Cancels and Supersedes NNPN No.
22528) issued on 17 March 1977, P203,150.00 with 14.50 interest p.a.;
(iii) FNCB NNPN Serial No. 05757 (Cancels and Supersedes NNPN No.
04952), issued on 02 June 1977, P500,000.00 with 17% interest p.a.;
(iv) FNCB NNPN Serial No. 05758 (Cancels and Supersedes NNPN No.
04962), issued on 02 June 1977, P500,000.00 with 17% interest per
annum;
(v) The Two Million (P2,000,000.00) money market placements of Ms.
Sabeniano with the Ayala Investment & Development Corporation (AIDC)
with legal interest at the rate of twelve percent (12%) per annum
compounded yearly, from 30 September 1976 until fully paid;
4. Ordering defendants-appellants to jointly and severally pay the plaintiff-
appellant the sum of FIVE HUNDRED THOUSAND PESOS (P500,000.00) by way of
moral damages, FIVE HUNDRED THOUSAND PESOS (P500,000.00) as exemplary
damages, and ONE HUNDRED THOUSAND PESOS (P100,000.00) as attorney’s fees.
Acting on petitioners’ Motion for Partial Reconsideration, the Court of Appeals issued a
Resolution,6 dated 20 November 2002, modifying its earlier Decision, thus –
WHEREFORE, premises considered, the instant Motion for Reconsideration is PARTIALLY
GRANTED as Sub-paragraph (V) paragraph 3 of the assailed Decision’s dispositive portion is
hereby ordered DELETED.
The challenged 26 March 2002 Decision of the Court is AFFIRMED with MODIFICATION.

Since the Court of Appeals Decision, dated 26 March 2002, as modified by the Resolution of
the same court, dated 20 November 2002, was still principally in favor of respondent,
petitioners filed the instant Petition for Review on Certiorari under Rule 45 of the Revised
Rules of Court. After giving due course to the instant Petition, this Court promulgated on 16
October 2006 its Decision, now subject of petitioners’ Motion for Partial
Reconsideration.1awphi1.net
Among the numerous grounds raised by petitioners in their Motion for Partial
Reconsideration, this Court shall address and discuss herein only particular points that had
not been considered or discussed in its Decision. Even in consideration of these points
though, this Court remains unconvinced that it should modify or reverse in any way its
disposition of the case in its earlier Decision.
As to the off-setting or compensation of respondent’s outstanding loan balance with her
dollar deposits in Citibank-Geneva
Petitioners’ take exception to the following findings made by this Court in its Decision, dated
16 October 2006, disallowing the off-setting or compensation of the balance of respondent’s
outstanding loans using her dollar deposits in Citibank-Geneva –
Without the Declaration of Pledge, petitioner Citibank had no authority to demand the
remittance of respondent’s dollar accounts with Citibank-Geneva and to apply them to her
outstanding loans. It cannot effect legal compensation under Article 1278 of the Civil Code
since, petitioner Citibank itself admitted that Citibank-Geneva is a distinct and separate
entity. As for the dollar accounts, respondent was the creditor and Citibank-Geneva is the
debtor; and as for the outstanding loans, petitioner Citibank was the creditor and respondent
was the debtor. The parties in these transactions were evidently not the principal creditor of
each other.
Petitioners maintain that respondent’s Declaration of Pledge, by virtue of which she
supposedly assigned her dollar accounts with Citibank-Geneva as security for her loans with
petitioner Citibank, is authentic and, thus, valid and binding upon respondent. Alternatively,
petitioners aver that even without said Declaration of Pledge, the off-setting or
compensation made by petitioner Citibank using respondent’s dollar accounts with Citibank-
Geneva to liquidate the balance of her outstanding loans with Citibank-Manila was expressly
authorized by respondent herself in the promissory notes (PNs) she signed for her loans, as
well as sanctioned by Articles 1278 to 1290 of the Civil Code. This alternative argument is
anchored on the premise that all branches of petitioner Citibank in the Philippines and
abroad are part of a single worldwide corporate entity and share the same juridical
personality. In connection therewith, petitioners deny that they ever admitted that Citibank-
Manila and Citibank-Geneva are distinct and separate entities.
Petitioners call the attention of this Court to the following provision found in all of the PNs7
executed by respondent for her loans –
21
At or after the maturity of this note, or when same becomes due under any of the provisions
hereof, any money, stocks, bonds, or other property of any kind whatsoever, on deposit or
otherwise, to the credit of the undersigned on the books of CITIBANK, N.A. in transit or in
their possession, may without notice be applied at the discretion of the said bank to the full
or partial payment of this note.
It is the petitioners’ contention that the term "Citibank, N.A." used therein should be deemed
to refer to all branches of petitioner Citibank in the Philippines and abroad; thus, giving
petitioner Citibank the authority to apply as payment for the PNs even respondent’s dollar
accounts with Citibank-Geneva. Still proceeding from the premise that all branches of
petitioner Citibank should be considered as a single entity, then it should not matter that the
respondent obtained the loans from Citibank-Manila and her deposits were with Citibank-
Geneva. Respondent should be considered the debtor (for the loans) and creditor (for her
deposits) of the same entity, petitioner Citibank. Since petitioner Citibank and respondent
were principal creditors of each other, in compliance with the requirements under Article
1279 of the Civil Code,8 then the former could have very well used off-setting or
compensation to extinguish the parties’ obligations to one another. And even without the
PNs, off-setting or compensation was still authorized because according to Article 1286 of
the Civil Code, "Compensation takes place by operation of law, even though the debts may
be payable at different places, but there shall be an indemnity for expenses of exchange or
transportation to the place of payment."
Pertinent provisions of Republic Act No. 8791, otherwise known as the General Banking Law
of 2000, governing bank branches are reproduced below –
SEC. 20. Bank Branches. – Universal or commercial banks may open branches or other offices
within or outside the Philippines upon prior approval of the Bangko Sentral.
Branching by all other banks shall be governed by pertinent laws.
A bank may, subject to prior approval of the Monetary Board, use any or all of its branches as
outlets for the presentation and/or sale of the financial products of its allied undertaking or
its investment house units.
A bank authorized to establish branches or other offices shall be responsible for all business
conducted in such branches and offices to the same extent and in the same manner as
though such business had all been conducted in the head office. A bank and its branches and
offices shall be treated as one unit.
SEC. 72. Transacting Business in the Philippines. – The entry of foreign banks in the
Philippines through the establishment of branches shall be governed by the provisions of the
Foreign Banks Liberalization Act.

The conduct of offshore banking business in the Philippines shall be governed by the
provisions of Presidential Decree No. 1034, otherwise known as the "Offshore Banking
System Decree."
SEC. 74. Local Branches of Foreign Banks. – In case of a foreign bank which has more than
one (1) branch in the Philippines, all such branches shall be treated as one (1) unit for the
purpose of this Act, and all references to the Philippine branches of foreign banks shall be
held to refer to such units.
SEC. 75. Head Office Guarantee. – In order to provide effective protection of the interests of
the depositors and other creditors of Philippine branches of a foreign bank, the head office of
such branches shall fully guarantee the prompt payment of all liabilities of its Philippine
branch.
Residents and citizens of the Philippines who are creditors of a branch in the Philippines of a
foreign bank shall have preferential rights to the assets of such branch in accordance with
existing laws.
Republic Act No. 7721, otherwise known as the Foreign Banks Liberalization Law, lays down
the policies and regulations specifically concerning the establishment and operation of local
branches of foreign banks. Relevant provisions of the said statute read –
Sec. 2. Modes of Entry. - The Monetary Board may authorize foreign banks to operate in the
Philippine banking system through any of the following modes of entry: (i) by acquiring,
purchasing or owning up to sixty percent (60%) of the voting stock of an existing bank; (ii) by
investing in up to sixty percent (60%) of the voting stock of a new banking subsidiary
incorporated under the laws of the Philippines; or (iii) by establishing branches with full
banking authority: Provided, That a foreign bank may avail itself of only one (1) mode of
entry: Provided, further, That a foreign bank or a Philippine corporation may own up to a
sixty percent (60%) of the voting stock of only one (1) domestic bank or new banking
subsidiary.
Sec. 5. Head Office Guarantee. - The head office of foreign bank branches shall guarantee
prompt payment of all liabilities of its Philippine branches.
It is true that the afore-quoted Section 20 of the General Banking Law of 2000 expressly
states that the bank and its branches shall be treated as one unit. It should be pointed out,
however, that the said provision applies to a universal9 or commercial bank,10 duly
established and organized as a Philippine corporation in accordance with Section 8 of the
same statute,11 and authorized to establish branches within or outside the Philippines.
The General Banking Law of 2000, however, does not make the same categorical statement
as regards to foreign banks and their branches in the Philippines. What Section 74 of the said
law provides is that in case of a foreign bank with several branches in the country, all such
22
branches shall be treated as one unit. As to the relations between the local branches of a
foreign bank and its head office, Section 75 of the General Banking Law of 2000 and Section 5
of the Foreign Banks Liberalization Law provide for a "Home Office Guarantee," in which the
head office of the foreign bank shall guarantee prompt payment of all liabilities of its
Philippine branches. While the Home Office Guarantee is in accord with the principle that
these local branches, together with its head office, constitute but one legal entity, it does not
necessarily support the view that said principle is true and applicable in all circumstances.
The Home Office Guarantee is included in Philippine statutes clearly for the protection of the
interests of the depositors and other creditors of the local branches of a foreign bank.12 Since
the head office of the bank is located in another country or state, such a guarantee is
necessary so as to bring the head office within Philippine jurisdiction, and to hold the same
answerable for the liabilities of its Philippine branches. Hence, the principle of the singular
identity of that the local branches and the head office of a foreign bank are more often
invoked by the clients in order to establish the accountability of the head office for the
liabilities of its local branches. It is under such attendant circumstances in which the
American authorities and jurisprudence presented by petitioners in their Motion for Partial
Reconsideration were rendered.
Now the question that remains to be answered is whether the foreign bank can use the
principle for a reverse purpose, in order to extend the liability of a client to the foreign bank’s
Philippine branch to its head office, as well as to its branches in other countries. Thus, if a
client obtains a loan from the foreign bank’s Philippine branch, does it absolutely and
automatically make the client a debtor, not just of the Philippine branch, but also of the head
office and all other branches of the foreign bank around the world? This Court rules in the
negative.
There being a dearth of Philippine authorities and jurisprudence on the matter, this Court,
just as what petitioners have done, turns to American authorities and jurisprudence.
American authorities and jurisprudence are significant herein considering that the head
office of petitioner Citibank is located in New York, United States of America (U.S.A.).
Unlike Philippine statutes, the American legislation explicitly defines the relations among
foreign branches of an American bank. Section 25 of the United States Federal Reserve Act13
states that –
Every national banking association operating foreign branches shall conduct the accounts of
each foreign branch independently of the accounts of other foreign branches established by
it and of its home office, and shall at the end of each fiscal period transfer to its general
ledger the profit or loss accrued at each branch as a separate item.
Contrary to petitioners’ assertion that the accounts of Citibank-Manila and Citibank-Geneva
should be deemed as a single account under its head office, the foregoing provision
mandates that the accounts of foreign branches of an American bank shall be conducted
independently of each other. Since the head office of petitioner Citibank is in the U.S.A., then

it is bound to treat its foreign branches in accordance with the said provision. It is only at the
end of its fiscal period that the bank is required to transfer to its general ledger the profit or
loss accrued at each branch, but still reporting it as a separate item. It is by virtue of this
provision that the Circuit Court of Appeals of New York declared in Pan-American Bank and
Trust Co. v. National City Bank of New York14 that a branch is not merely a teller’s window; it
is a separate business entity.
The circumstances in the case of McGrath v. Agency of Chartered Bank of India, Australia &
China15 are closest to the one at bar. In said case, the Chartered Bank had branches in several
countries, including one in Hamburg, Germany and another in New York, U.S.A., and yet
another in London, United Kingdom. The New York branch entered in its books credit in favor
of four German firms. Said credit represents collections made from bills of exchange
delivered by the four German firms. The same four German firms subsequently became
indebted to the Hamburg branch. The London branch then requested for the transfer of the
credit in the name of the German firms from the New York branch so as to be applied or
setoff against the indebtedness of the same firms to the Hamburg branch. One of the
question brought before the U.S. District Court of New York was "whether or not the debts
and the alleged setoffs thereto are mutual," which could be answered by determining first
whether the New York and Hamburg branches of Chartered Bank are individual business
entities or are one and the same entity. In denying the right of the Hamburg branch to setoff,
the U.S. District Court ratiocinated that –
The structure of international banking houses such as Chartered bank defies one rigorous
description. Suffice it to say for present analysis, branches or agencies of an international
bank have been held to be independent entities for a variety of purposes (a) deposits
payable only at branch where made; Mutaugh v. Yokohama Specie Bank, Ltd., 1933, 149
Misc. 693, 269 N.Y.S. 65; Bluebird Undergarment Corp. v. Gomez, 1931, 139 Misc. 742, 249
N.Y.S. 319; (b) checks need be honored only when drawn on branch where deposited;
Chrzanowska v. Corn Exchange Bank, 1916, 173 App. Div. 285, 159 N.Y.S. 385, affirmed 1919,
225 N.Y. 728, 122 N.E. 877; subpoena duces tecum on foreign bank’s record barred; In re
Harris, D.C.S.D.N.Y. 1939, 27 F. Supp. 480; (d) a foreign branch separate for collection of
forwarded paper; Pan-American Bank and Trust Company v. National City Bank of New York,
2 Cir., 1925, 6 F. 2d 762, certiorari denied 1925, 269 U.S. 554, 46 S. Ct. 18, 70 L. Ed. 408. Thus
in law there is nothing innately unitary about the organization of international banking
institutions.
Defendant, upon its oral argument and in its brief, relies heavily on Sokoloff v. National City
Bank of New York, 1928, 250 N.Y. 69, 164 N.E. 745, as authority for the proposition that
Chartered Bank, not the Hamburg or New York Agency, is ultimately responsible for the
amounts owing its German customers and, conversely, it is to Chartered Bank that the
German firms owe their obligations. The Sokoloff case, aside from its violently different fact
situation, is centered on the legal problem of default of payment and consequent breach of
contract by a branch bank. It does not stand for the principle that in every instance an
international bank with branches is but one legal entity for all purposes. The defendant
concedes in its brief (p. 15) that there are purposes for which the various agencies and
23
branches of Chartered Bank may be treated in law as separate entities. I fail to see the
applicability of Sokoloff either as a guide to or authority for the resolution of this problem.
The facts before me and the cases catalogued supra lend weight to the view that we are
dealing here with Agencies independent of one another.
I hold that for instant purposes the Hamburg Agency and defendant were independent
business entities, and the attempted setoff may not be utilized by defendant against its debt
to the German firms obligated to the Hamburg Agency.
Going back to the instant Petition, although this Court concedes that all the Philippine
branches of petitioner Citibank should be treated as one unit with its head office, it cannot
be persuaded to declare that these Philippine branches are likewise a single unit with the
Geneva branch. It would be stretching the principle way beyond its intended purpose.
Therefore, this Court maintains its original position in the Decision that the off-setting or
compensation of respondent’s loans with Citibank-Manila using her dollar accounts with
Citibank-Geneva cannot be effected. The parties cannot be considered principal creditor of
the other. As for the dollar accounts, respondent was the creditor and Citibank-Geneva was
the debtor; and as for the outstanding loans, petitioner Citibank, particularly Citibank-Manila,
was the creditor and respondent was the debtor. Since legal compensation was not possible,
petitioner Citibank could only use respondent’s dollar accounts with Citibank-Geneva to
liquidate her loans if she had expressly authorized it to do so by contract.
Respondent cannot be deemed to have authorized the use of her dollar deposits with
Citibank-Geneva to liquidate her loans with petitioner Citibank when she signed the PNs16 for
her loans which all contained the provision that –
At or after the maturity of this note, or when same becomes due under any of the provisions
hereof, any money, stocks, bonds, or other property of any kind whatsoever, on deposit or
otherwise, to the credit of the undersigned on the books of CITIBANK, N.A. in transit or in
their possession, may without notice be applied at the discretion of the said bank to the full
or partial payment of this note.
As has been established in the preceding discussion, "Citibank, N.A." can only refer to the
local branches of petitioner Citibank together with its head office. Unless there is any
showing that respondent understood and expressly agreed to a more far-reaching
interpretation, the reference to Citibank, N.A. cannot be extended to all other branches of
petitioner Citibank all over the world. Although theoretically, books of the branches form
part of the books of the head office, operationally and practically, each branch maintains its
own books which shall only be later integrated and balanced with the books of the head
office. Thus, it is very possible to identify and segregate the books of the Philippine branches
of petitioner Citibank from those of Citibank-Geneva, and to limit the authority granted for
application as payment of the PNs to respondent’s deposits in the books of the former.

Moreover, the PNs can be considered a contract of adhesion, the PNs being in standard
printed form prepared by petitioner Citibank. Generally, stipulations in a contract come
about after deliberate drafting by the parties thereto, there are certain contracts almost all
the provisions of which have been drafted only by one party, usually a corporation. Such
contracts are called contracts of adhesion, because the only participation of the party is the
affixing of his signature or his "adhesion" thereto. This being the case, the terms of such
contract are to be construed strictly against the party which prepared it.17
As for the supposed Declaration of Pledge of respondent’s dollar accounts with Citibank-
Geneva as security for the loans, this Court stands firm on its ruling that the non-production
thereof is fatal to petitioners’ cause in light of respondent’s claim that her signature on such
document was a forgery. It bears to note that the original of the Declaration of Pledge is with
Citibank-Geneva, a branch of petitioner Citibank. As between respondent and petitioner
Citibank, the latter has better access to the document. The constant excuse forwarded by
petitioner Citibank that Citibank-Geneva refused to return possession of the original
Declaration of Pledge to Citibank-Manila only supports this Court’s finding in the preceding
paragraphs that the two branches are actually operating separately and independently of
each other.
Further, petitioners keep playing up the fact that respondent, at the beginning of the trial,
refused to give her specimen signatures to help establish whether her signature on the
Declaration of Pledge was indeed forged. Petitioners seem to forget that subsequently,
respondent, on advice of her new counsel, already offered to cooperate in whatever manner
so as to bring the original Declaration of Pledge before the RTC for inspection. The exchange
of the counsels for the opposing sides during the hearing on 24 July 1991 before the RTC
reveals the apparent willingness of respondent’s counsel to undertake whatever course of
action necessary for the production of the contested document, and the evasive, non-
committal, and uncooperative attitude of petitioners’ counsel.18
Lastly, this Court’s ruling striking down the Declaration of Pledge is not entirely based on
respondent’s allegation of forgery. In its Decision, this Court already extensively discussed
why it found the said Declaration of Pledge highly suspicious and irregular, to wit –
First of all, it escapes this Court why petitioner Citibank took care to have the Deeds of
Assignment of the PNs notarized, yet left the Declaration of Pledge unnotarized. This Court
would think that petitioner Citibank would take greater cautionary measures with the
preparation and execution of the Declaration of Pledge because it involved respondent’s "all
present and future fiduciary placements" with a Citibank branch in another country,
specifically, in Geneva, Switzerland. While there is no express legal requirement that the
Declaration of Pledge had to be notarized to be effective, even so, it could not enjoy the
same prima facie presumption of due execution that is extended to notarized documents,
and petitioner Citibank must discharge the burden of proving due execution and authenticity
of the Declaration of Pledge.
24
Second, petitioner Citibank was unable to establish the date when the Declaration of Pledge
was actually executed. The photocopy of the Declaration of Pledge submitted by petitioner
Citibank before the RTC was undated. It presented only a photocopy of the pledge because it
already forwarded the original copy thereof to Citibank-Geneva when it requested for the
remittance of respondent’s dollar accounts pursuant thereto. Respondent, on the other
hand, was able to secure a copy of the Declaration of Pledge, certified by an officer of
Citibank-Geneva, which bore the date 24 September 1979. Respondent, however, presented
her passport and plane tickets to prove that she was out of the country on the said date and
could not have signed the pledge. Petitioner Citibank insisted that the pledge was signed
before 24 September 1979, but could not provide an explanation as to how and why the said
date was written on the pledge. Although Mr. Tan testified that the Declaration of Pledge
was signed by respondent personally before him, he could not give the exact date when the
said signing took place. It is important to note that the copy of the Declaration of Pledge
submitted by the respondent to the RTC was certified by an officer of Citibank-Geneva, which
had possession of the original copy of the pledge. It is dated 24 September 1979, and this
Court shall abide by the presumption that the written document is truly dated. Since it is
undeniable that respondent was out of the country on 24 September 1979, then she could
not have executed the pledge on the said date.
Third, the Declaration of Pledge was irregularly filled-out. The pledge was in a standard
printed form. It was constituted in favor of Citibank, N.A., otherwise referred to therein as
the Bank. It should be noted, however, that in the space which should have named the
pledgor, the name of petitioner Citibank was typewritten, to wit –
The pledge right herewith constituted shall secure all claims which the Bank now has or in
the future acquires against Citibank, N.A., Manila (full name and address of the Debtor),
regardless of the legal cause or the transaction (for example current account, securities
transactions, collections, credits, payments, documentary credits and collections) which gives
rise thereto, and including principal, all contractual and penalty interest, commissions,
charges, and costs.
The pledge, therefore, made no sense, the pledgor and pledgee being the same entity. Was a
mistake made by whoever filled-out the form? Yes, it could be a possibility. Nonetheless,
considering the value of such a document, the mistake as to a significant detail in the pledge
could only be committed with gross carelessness on the part of petitioner Citibank, and
raised serious doubts as to the authenticity and due execution of the same. The Declaration
of Pledge had passed through the hands of several bank officers in the country and abroad,
yet, surprisingly and implausibly, no one noticed such a glaring mistake.
Lastly, respondent denied that it was her signature on the Declaration of Pledge. She claimed
that the signature was a forgery. When a document is assailed on the basis of forgery, the
best evidence rule applies –
Basic is the rule of evidence that when the subject of inquiry is the contents of a document,
no evidence is admissible other than the original document itself except in the instances

mentioned in Section 3, Rule 130 of the Revised Rules of Court. Mere photocopies of
documents are inadmissible pursuant to the best evidence rule. This is especially true when
the issue is that of forgery.
As a rule, forgery cannot be presumed and must be proved by clear, positive and convincing
evidence and the burden of proof lies on the party alleging forgery. The best evidence of a
forged signature in an instrument is the instrument itself reflecting the alleged forged
signature. The fact of forgery can only be established by a comparison between the alleged
forged signature and the authentic and genuine signature of the person whose signature is
theorized upon to have been forged. Without the original document containing the alleged
forged signature, one cannot make a definitive comparison which would establish forgery. A
comparison based on a mere xerox copy or reproduction of the document under controversy
cannot produce reliable results.
Respondent made several attempts to have the original copy of the pledge produced before
the RTC so as to have it examined by experts. Yet, despite several Orders by the RTC,
petitioner Citibank failed to comply with the production of the original Declaration of Pledge.
It is admitted that Citibank-Geneva had possession of the original copy of the pledge. While
petitioner Citibank in Manila and its branch in Geneva may be separate and distinct entities,
they are still incontestably related, and between petitioner Citibank and respondent, the
former had more influence and resources to convince Citibank-Geneva to return, albeit
temporarily, the original Declaration of Pledge. Petitioner Citibank did not present any
evidence to convince this Court that it had exerted diligent efforts to secure the original copy
of the pledge, nor did it proffer the reason why Citibank-Geneva obstinately refused to give it
back, when such document would have been very vital to the case of petitioner Citibank.
There is thus no justification to allow the presentation of a mere photocopy of the
Declaration of Pledge in lieu of the original, and the photocopy of the pledge presented by
petitioner Citibank has nil probative value. In addition, even if this Court cannot make a
categorical finding that respondent’s signature on the original copy of the pledge was forged,
it is persuaded that petitioner Citibank willfully suppressed the presentation of the original
document, and takes into consideration the presumption that the evidence willfully
suppressed would be adverse to petitioner Citibank if produced.
As far as the Declaration of Pledge is concerned, petitioners failed to submit any new
evidence or argument that was not already considered by this Court when it rendered its
Decision.
As to the value of the dollar deposits in Citibank-Geneva ordered refunded to respondent
In case petitioners are still ordered to refund to respondent the amount of her dollar
accounts with Citibank-Geneva, petitioners beseech this Court to adjust the nominal values
of respondent’s dollar accounts and/or her overdue peso loans by using the values of the
currencies stipulated at the time the obligations were established in 1979, to address the
alleged inequitable consequences resulting from the extreme and extraordinary devaluation
of the Philippine currency that occurred in the course of the Asian crisis of 1997. Petitioners
25
base their request on Article 1250 of the Civil Code which reads, "In case an extraordinary
inflation or deflation of the currency stipulated should supervene, the value of the currency
at the time of the establishment of the obligation shall be the basis of payment, unless there
is an agreement to the contrary."
It is well-settled that Article 1250 of the Civil Code becomes applicable only when there is
extraordinary inflation or deflation of the currency. Inflation has been defined as the sharp
increase of money or credit or both without a corresponding increase in business transaction.
There is inflation when there is an increase in the volume of money and credit relative to
available goods resulting in a substantial and continuing rise in the general price level. 19 In
Singson v. Caltex (Philippines), Inc.,20 this Court already provided a discourse as to what
constitutes as extraordinary inflation or deflation of currency, thus –
We have held extraordinary inflation to exist when there is a decrease or increase in the
purchasing power of the Philippine currency which is unusual or beyond the common
fluctuation in the value of said currency, and such increase or decrease could not have been
reasonably foreseen or was manifestly beyond the contemplation of the parties at the time
of the establishment of the obligation.
An example of extraordinary inflation, as cited by the Court in Filipino Pipe and Foundry
Corporation vs. NAWASA, supra, is that which happened to the deutschmark in 1920. Thus:
"More recently, in the 1920s, Germany experienced a case of hyperinflation. In early 1921,
the value of the German mark was 4.2 to the U.S. dollar. By May of the same year, it had
stumbled to 62 to the U.S. dollar. And as prices went up rapidly, so that by October 1923, it
had reached 4.2 trillion to the U.S. dollar!" (Bernardo M. Villegas & Victor R. Abola,
Economics, An Introduction [Third Edition]).
As reported, "prices were going up every week, then every day, then every hour. Women
were paid several times a day so that they could rush out and exchange their money for
something of value before what little purchasing power was left dissolved in their hands.
Some workers tried to beat the constantly rising prices by throwing their money out of the
windows to their waiting wives, who would rush to unload the nearly worthless paper. A
postage stamp cost millions of marks and a loaf of bread, billions." (Sidney Rutberg, "The
Money Balloon", New York: Simon and Schuster, 1975, p. 19, cited in "Economics, An
Introduction" by Villegas & Abola, 3rd ed.)
The supervening of extraordinary inflation is never assumed. The party alleging it must lay
down the factual basis for the application of Article 1250.
Thus, in the Filipino Pipe case, the Court acknowledged that the voluminous records and
statistics submitted by plaintiff-appellant proved that there has been a decline in the
purchasing power of the Philippine peso, but this downward fall cannot be considered
"extraordinary" but was simply a universal trend that has not spared our country. Similarly, in

Huibonhoa vs. Court of Appeals, the Court dismissed plaintiff-appellant's unsubstantiated
allegation that the Aquino assassination in 1983 caused building and construction costs to
double during the period July 1983 to February 1984. In Serra vs. Court of Appeals, the Court
again did not consider the decline in the peso's purchasing power from 1983 to 1985 to be so
great as to result in an extraordinary inflation.
Like the Serra and Huibonhoa cases, the instant case also raises as basis for the application of
Article 1250 the Philippine economic crisis in the early 1980s --- when, based on petitioner's
evidence, the inflation rate rose to 50.34% in 1984. We hold that there is no legal or factual
basis to support petitioner's allegation of the existence of extraordinary inflation during this
period, or, for that matter, the entire time frame of 1968 to 1983, to merit the adjustment of
the rentals in the lease contract dated July 16, 1968. Although by petitioner's evidence there
was a decided decline in the purchasing power of the Philippine peso throughout this period,
we are hard put to treat this as an "extraordinary inflation" within the meaning and intent of
Article 1250.
Rather, we adopt with approval the following observations of the Court of Appeals on
petitioner's evidence, especially the NEDA certification of inflation rates based on consumer
price index:
xxx (a) from the period 1966 to 1986, the official inflation rate never exceeded 100% in any
single year; (b) the highest official inflation rate recorded was in 1984 which reached only
50.34%; (c) over a twenty one (21) year period, the Philippines experienced a single-digit
inflation in ten (10) years (i.e., 1966, 1967, 1968, 1969, 1975, 1976, 1977, 1978, 1983 and
1986); (d) in other years (i.e., 1970, 1971, 1972, 1973, 1974, 1979, 1980, 1981, 1982, 1984
and 1989) when the Philippines experienced double-digit inflation rates, the average of those
rates was only 20.88%; (e) while there was a decline in the purchasing power of the
Philippine currency from the period 1966 to 1986, such cannot be considered as
extraordinary; rather, it is a normal erosion of the value of the Philippine peso which is a
characteristic of most currencies.
"Erosion" is indeed an accurate description of the trend of decline in the value of the peso in
the past three to four decades. Unfortunate as this trend may be, it is certainly distinct from
the phenomenon contemplated by Article 1250.
Moreover, this Court has held that the effects of extraordinary inflation are not to be applied
without an official declaration thereof by competent authorities.
The burden of proving that there had been extraordinary inflation or deflation of the
currency is upon the party that alleges it. Such circumstance must be proven by competent
evidence, and it cannot be merely assumed. In this case, petitioners presented no proof as to
how much, for instance, the price index of goods and services had risen during the
intervening period.21 All the information petitioners provided was the drop of the U.S. dollar-
Philippine peso exchange rate by 17 points from June 1997 to January 1998. While the said
figure was based on the statistics of the Bangko Sentral ng Pilipinas (BSP), it is also significant
26
to note that the BSP did not categorically declare that the same constitute as an
extraordinary inflation. The existence of extraordinary inflation must be officially proclaimed
by competent authorities, and the only competent authority so far recognized by this Court
to make such an official proclamation is the BSP.22
Neither can this Court, by merely taking judicial notice of the Asian currency crisis in 1997,
already declare that there had been extraordinary inflation. It should be recalled that the
Philippines likewise experienced economic crisis in the 1980s, yet this Court did not find that
extraordinary inflation took place during the said period so as to warrant the application of
Article 1250 of the Civil Code.
Furthermore, it is incontrovertible that Article 1250 of the Civil Code is based on equitable
considerations. Among the maxims of equity are (1) he who seeks equity must do equity, and
(2) he who comes into equity must come with clean hands. The latter is a frequently stated
maxim which is also expressed in the principle that he who has done inequity shall not have
equity.23 Petitioner Citibank, hence, cannot invoke Article 1250 of the Civil Code because it
does not come to court with clean hands. The delay in the recovery24 by respondent of her
dollar accounts with Citibank-Geneva was due to the unlawful act of petitioner Citibank in
using the same to liquidate respondent’s loans. Petitioner Citibank even attempted to justify
the off-setting or compensation of respondent’s loans using her dollar accounts with
Citibank-Geneva by the presentation of a highly suspicious and irregular, and even possibly
forged, Declaration of Pledge.
The damage caused to respondent of the deprivation of her dollar accounts for more than
two decades is unquestionably relatively more extensive and devastating, as compared to
whatever damage petitioner Citibank, an international banking corporation with
undoubtedly substantial capital, may have suffered for respondent’s non-payment of her
loans. It must also be remembered that petitioner Citibank had already considered
respondent’s loans paid or liquidated by 26 October 1979 after it had fully effected
compensation thereof using respondents deposits and money market placements. All this
time, respondent’s dollar accounts are unlawfully in the possession of and are being used by
petitioner Citibank for its business transactions. In the meantime, respondent’s businesses
failed and her properties were foreclosed because she was denied access to her funds when
she needed them most. Taking these into consideration, respondent’s dollar accounts with
Citibank-Geneva must be deemed to be subsisting and continuously deposited with
petitioner Citibank all this while, and will only be presently withdrawn by respondent.
Therefore, petitioner Citibank should refund to respondent the U.S. $149,632.99 taken from
her Citibank-Geneva accounts, or its equivalent in Philippine currency using the exchange
rate at the time of payment, plus the stipulated interest for each of the fiduciary placements
and current accounts involved, beginning 26 October 1979.
As to respondent’s Motion to Clarify and/or Confirm Decision with Notice of Judgment
 27

Respondent, in her Motion, is of the mistaken notion that the Court of Appeals Decision,
dated 26 March 2002, as modified by the Resolution of the same court, dated 20 November
2002, would be implemented or executed together with this Court’s Decision.

This Court clarifies that its affirmation of the Decision of the Court of Appeals, as modified, is
only to the extent that it recognizes that petitioners had liabilities to the respondent.
However, this Court’s Decision modified that of the appellate court’s by making its own
determination of the specific liabilities of the petitioners to respondent and the amounts
thereof; as well as by recognizing that respondent also had liabilities to petitioner Citibank
and the amount thereof.

Thus, for purposes of execution, the parties need only refer to the dispositive portion of this
Court’s Decision, dated 16 October 2006, should it already become final and executory,
without any further modifications.

As the last point, there is no merit in respondent’s Motion for this Court to already declare its
Decision, dated 16 October 2006, final and executory. A judgment becomes final and
executory by operation of law and, accordingly, the finality of the judgment becomes a fact
upon the lapse of the reglementary period without an appeal or a motion for new trial or
reconsideration being filed.25 This Court cannot arbitrarily disregard the reglementary period
and declare a judgment final and executory upon the mere motion of one party, for to do so
will be a culpable violation of the right of the other parties to due process.

IN VIEW OF THE FOREGOING, petitioners’ Motion for Partial Reconsideration of this Court’s
Decision, dated 16 October 2006, and respondent’s Motion for this Court to declare the
same Decision already final and executory, are both DENIED for lack of merit.

SO ORDERED.

FIRST DIVISION
[G.R. No. 80505 : December 4, 1990.]
192 SCRA 28
THE PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, vs. MARIO TANDOY y LIM, Defendant-
Appellant.
DECISION
CRUZ, J.:
The decision of the Regional Trial Court of Makati, Branch 133 dated October 13, 1987,
convicting Mario Tandoy of the crime of violation of Art. II, Sec. 4 of Rep. Act No. 6425 known
as the Dangerous Drugs Act of 1972, is before us on appeal.
The information against the accused-appellant read as follows:
That on or about the 27th day of May 1986, in the Municipality of Makati, Metro Manila,
Philippines, and within the jurisdiction of this Honorable Court, the above-named accused
without being authorized by law, did then and there willfully, unlawfully and feloniously sell
eight (8) pieces of dried marijuana flowering tops, two (2) pieces of dried marijuana
flowering tops and crushed dried marijuana flowering tops, which are prohibited drug, for
and in consideration of P20.00.
Upon arraignment, Tandoy entered a plea of not guilty. After trial, Judge Buenaventura J.
Guerrero rendered a decision the dispositive portion of which declared:
WHEREFORE, the Court finds Mario Tandoy y Lim guilty beyond reasonable doubt
of violation of Sec. 4, Art. II, Rep. Act No. 6425, as amended, and is hereby
sentenced to life imprisonment and to pay a fine of P20,000.00 and cost.: nad
The marijuana confiscated in this case is declared confiscated and forfeited and
ordered turned over to the Dangerous Drugs Board for proper disposal.
SO ORDERED.
The accused-appellant raises the following assignment of errors in this appeal:
1. The Court a quo erred in finding accused guilty beyond reasonable doubt of the
crime charged despite lack of evidence to prove that he sold marijuana to the
poseur-buyer.
2. The Court a quo erred in admitting in evidence against the accused Exh. "E-2-A"
which is merely a xerox copy of the P10.00 bill allegedly used as buy-bust money.
The evidence of the prosecution may be summarized as follows:
28
On May 27, 1986, at about 3:30 p.m. Lt. Salido, Jr. of the Makati Police Station dispatched
Pfc. Herino de la Cruz, and Detectives Pablo R. Singayan, Nicanor Candolesas, Luisito de la
Cruz, Estanislao Dalumpines, Antonio Manalastas and Virgilio Padua to conduct a buy-bust
operation at Solchuaga St., Barangay Singkamas, Makati.
The target area was a store along the said street, and Singayan was to pose as the buyer. He
stood alone near the store waiting for any pusher to approach. The other members of the
team strategically positioned themselves. Soon, three men approached Singayan. One of
them was the accused-appellant, who said without preamble: "Pare, gusto mo bang
umiskor?" Singayan said yes. The exchange was made then and there — two rolls/pieces of
marijuana for one P10.00 and two P5.00 bills marked ANU (meaning Anti-Narcotics Unit).
The team then moved in and arrested Tandoy. Manalastas and Candolesas made a body
search of the accused-appellant and took from him the marked money, as well as eight more
rolls/foils of marijuana and crushed leaves.: nad
The arresting officers brought Tandoy to the Office of the Anti-Narcotics Unit, Makati Police
Station, for investigation by Detective Marvin Pajilan. The accused-appellant chose to remain
silent after having been informed of his constitutional rights.
These events were narrated under oath by De la Cruz, Singayan and Pajilan. 1 Microscopic,
chemical and chromotographic examination was performed on the confiscated marijuana by
Raquel P. Angeles, forensic chemist of the National Bureau of Investigation, who later
testified that the findings were positive. The marijuana was offered as an exhibit. 2
As might be expected, the accused-appellant had a different story. His testimony was that
from 1:30 to 4:00 p.m. of the day in question, he was playing "cara y cruz" with 15 other
persons along Solchuaga St. when somebody suddenly said that policemen were making
arrests. The players grabbed the bet money and scampered. However, he and a certain
Danny (another "cara y cruz" player) were caught and taken to the Narcotics Command
headquarters in Makati. There they were mauled and warned that if they did not point to
their fellow pushers, they would rot in jail. The accused-appellant denied he had sold
marijuana to Singayan and insisted the bills taken from him were the bet money he had
grabbed at the "cara y cruz" game. 3
The trial court, which had the opportunity to observe the demeanor of the witnesses and to
listen to their respective testimonies, gave more credence to the statements of the arresting
officers. Applying the presumption that they had performed their duties in a regular manner,
it rejected Tandoy's uncorroborated allegation that he had been manhandled and framed.
Tandoy had not submitted sufficient evidence of his charges, let alone his admission that he
had no quarrel with the peace officers whom he had met only on the day of his arrest.
In People v. Patog, 4 this Court held:
When there is no evidence and nothing to indicate the principal witness for the prosecution
was actuated by improper motives, the presumption is that he was not so actuated and his
testimony is entitled to full faith and credit.
Tandoy submits that "one will not sell this prohibited drug to another who is a total stranger
until the seller is certain of the identity of the buyer."

The conjecture must be rejected.: nad
In People v. Paco, 5 this Court observed:
Drug-pushing when done on a small level as in this case belongs to that class of crimes that
may be committed at anytime and at any place. After the offer to buy is accepted and the
exchange is made, the illegal transaction is completed in a few minutes. The fact that the
parties are in a public place and in the presence of other people may not always discourage
them from pursuing their illegal trade as these factors may even serve to camouflage the
same. Hence, the Court has sustained the conviction of drug pushers caught selling illegal
drugs in a billiard hall (People v. Rubio, G.R. No. 66875, June 19, 1986, 142 SCRA 329; People
v. Sarmiento, G.R. No. 72141, January 12, 1987, 147 SCRA 252), in front of a store (People vs.
Khan, supra) along a street at 1:45 p.m. (People v. Toledo, G.R. No. 67609, November 22,
1985, 140 SCRA 259), and in front of a house (People v. Policarpio, G.R. No. 69844, February
23, 1988).
As the Court has also held, "What matters is not an existing familiarity between the buyer
and the seller but their agreement and the acts constituting the sale and delivery of the
marijuana leaves." 6
Under the second assigned error, the accused-appellant invokes the best evidence rule and
questions the admission by the trial court of the xerox copy only of the marked P10.00 bill.
The Solicitor General, in his Comment, correctly refuted that contention thus:
This assigned error centers on the trial court's admission of the P10.00 bill marked money
(Exh. E-2-A) which, according to the appellant, is excluded under the best evidence rule for
being a mere xerox copy. Apparently, appellant erroneously thinks that said marked money is
an ordinary document falling under Sec. 2, Rule 130 of the Revised Rules of Court which
excludes the introduction of secondary evidence except in the five (5) instances mentioned
therein.:-cralaw
The best evidence rule applies only when the contents of the document are the subject of
inquiry. Where the issue is only as to whether or not such document was actually executed,
or exists, or in the circumstances relevant to or surrounding its execution, the best evidence
rule does not apply and testimonial evidence is admissible. (Cf. Moran, op. cit., pp. 76-77; 4
Martin, op. cit., p. 78.)
Since the aforesaid marked money was presented by the prosecution solely for the purpose
of establishing its existence and not its contents, other substitutionary evidence, like a xerox
copy thereof, is therefore admissible without the need of accounting for the original.
Moreover, the presentation at the trial of the "buy-bust money" was not indispensable to the
conviction of the accused-appellant because the sale of the marijuana had been adequately
proved by the testimony of the police officers. So long as the marijuana actually sold by the
accused-appellant had been submitted as an exhibit, the failure to produce the marked
money itself would not constitute a fatal omission.
We are convinced from the evidence on record that the prosecution has overcome the
constitutional presumption of innocence in favor of the accused-appellant with proof beyond
29
reasonable doubt of his guilt. He must therefore suffer the penalty prescribed by law for
those who would visit the scourge of drug addiction upon our people.
WHEREFORE, the appeal is DISMISSED and the challenged decision AFFIRMED in toto, with
costs against
FACTS:
On May 27, 1986, at about 3:30 p.m. Lt. Salido, Jr. of the Makati Police Station dispatched
Pfc. Herino de la Cruz, and Detectives Pablo R. Singayan, Nicanor Candolesas, Luisito de la
Cruz, Estanislao Dalumpines, Antonio Manalastas and Virgilio Padua to conduct a buy-bust
operation at Solchuaga St., Barangay Singkamas, Makati.
The target area was a store along the said street, and Singayan was to pose as the buyer. He
stood alone near the store waiting for any pusher to approach. The other members of the
team strategically positioned themselves. Soon, three men approached Singayan. One of
them was the accused-appellant, who said without preamble: "Pare, gusto mo bang
umiskor?" Singayan said yes. The exchange was made then and there — two rolls/pieces of
marijuana for one P10.00 and two P5.00 bills marked ANU (meaning Anti-Narcotics Unit).
The team then moved in and arrested Tandoy. Manalastas and Candolesas made a body
search of the accused-appellant and took from him the marked money, as well as eight more
rolls/foils of marijuana and crushed leaves.: nad
The arresting officers brought Tandoy to the Office of the Anti-Narcotics Unit, Makati Police
Station, for investigation by Detective Marvin Pajilan. The accused-appellant chose to remain
silent after having been informed of his constitutional rights.
These events were narrated under oath by De la Cruz, Singayan and Pajilan. Microscopic,
chemical and chromotographic examination was performed on the confiscated marijuana by
Raquel P. Angeles, forensic chemist of the National Bureau of Investigation, who later
testified that the findings were positive. The marijuana was offered as an exhibit.
ISSUES:
1. The Court a quo erred in finding accused guilty beyond reasonable doubt of the crime
charged despite lack of evidence to prove that he sold marijuana to the poseur-buyer.
2. The Court a quo erred in admitting in evidence against the accused Exh. "E-2-A" which is
merely a xerox copy of the P10.00 bill allegedly used as buy-bust money.
RULING:
The trial court, which had the opportunity to observe the demeanor of the witnesses and to
listen to their respective testimonies, gave more credence to the statements of the arresting
officers. Applying the presumption that they had performed their duties in a regular manner,
it rejected Tandoy's uncorroborated allegation that he had been manhandled and framed.
 30

Tandoy had not submitted sufficient evidence of his charges, let alone his admission that he
had no quarrel with the peace officers whom he had met only on the day of his arrest.
We are convinced from the evidence on record that the prosecution has overcome the
constitutional presumption of innocence in favor of the accused-appellant with proof beyond
reasonable doubt of his guilt. He must therefore suffer the penalty prescribed by law for
those who would visit the scourge of drug addiction upon our people.

Under the second assigned error, the accused-appellant invokes the best evidence rule and
questions the admission by the trial court of the xerox copy only of the marked P10.00
bill.:This assigned error centers on the trial court's admission of the P10.00 bill marked
money (Exh. E-2-A) which, according to the appellant, is excluded under the best evidence
rule for being a mere xerox copy. Apparently, appellant erroneously thinks that said marked
money is an ordinary document falling under Sec. 2, Rule 130 of the Revised Rules of Court
which excludes the introduction of secondary evidence except in the five (5) instances
mentioned therein.:-cralaw

The best evidence rule applies only when the contents of the document are the subject of
inquiry. Where the issue is only as to whether or not such document was actually executed,
or exists, or in the circumstances relevant to or surrounding its execution, the best evidence
rule does not apply and testimonial evidence is admissible.
Since the aforesaid marked money was presented by the prosecution solely for the purpose
of establishing its existence and not its contents, other substitutionary evidence, like a xerox
copy thereof, is therefore admissible without the need of accounting for the original.

THIRD DIVISION
G.R. No. 191696 April 10, 2013
ROGELIO DANTIS, Petitioner,
vs.
JULIO MAGHINANG, JR., Respondent.
DECISION
MENDOZA, J.:
This is a petition for review on certiorari seeking to reverse and set aside the January 25,
2010 Decision1 and the March 23, 2010 Resolution2 of the Court of Appeals (CA). in CA-G.R.
CV No. 85258, reversing the March 2, 2005 Decision3 of the Regional Trial Court, Branch 18,
Malolos, Bulacan (RTC), in an action for quieting of title and recovery of possession with
damages.
The Facts
The case draws its origin from a complaint4 for quieting of title and recovery of possession
with damages filed by petitioner Rogelio Dantis (Rogelio) against respondent Julio
Maghinang, Jr. (Julio, Jr.) before the RTC, docketed as Civil Case No. 280-M-2002. Rogelio
alleged that he was the registered owner of a parcel of land covered by Transfer Certificate
of Title (TCT) No. T-125918, with an area of 5,657 square meters, located in Sta. Rita, San
Miguel, Bulacan; that he acquired ownership of the property through a deed of extrajudicial
partition of the estate of his deceased father, Emilio Dantis (Emilio), dated December 22,
1993; that he had been paying the realty taxes on the said property; that Julio, Jr. occupied
and built a house on a portion of his property without any right at all; that demands were
made upon Julio, Jr. that he vacate the premises but the same fell on deaf ears; and that the
acts of Julio, Jr. had created a cloud of doubt over his title and right of possession of his
property. He, thus, prayed that judgment be rendered declaring him to be the true and real
owner of the parcel of land covered by TCT No. T-125918; ordering Julio, Jr. to deliver the
possession of that portion of the land he was occupying; and directing Julio, Jr. to pay rentals
from October 2000 and attorney’s fees of P100,000.00.
He added that he was constrained to institute an ejectment suit against Julio, Jr. before the
Municipal Trial Court of San Miguel, Bulacan (MTC), but the complaint was dismissed for lack
of jurisdiction and lack of cause of action.
In his Answer,5 Julio, Jr. denied the material allegations of the complaint. By way of an
affirmative defense, he claimed that he was the actual owner of the 352 square meters
(subject lot) of the land covered by TCT No. T-125918 where he was living; that he had been
in open and continuous possession of the property for almost thirty (30) years; the subject
31
lot was once tenanted by his ancestral relatives until it was sold by Rogelio’s father, Emilio, to
his father, Julio Maghinang, Sr. (Julio, Sr.); that later, he succeeded to the ownership of the
subject lot after his father died on March 10, 1968; and that he was entitled to a separate
registration of the subject lot on the basis of the documentary evidence of sale and his open
and uninterrupted possession of the property.
As synthesized by the RTC from the respective testimonies of the principal witnesses, their
diametrically opposed positions are as follows:
Plaintiff Rogelio Dantis testified that he inherited 5,657 square meters of land, identified as
Lot 6-D-1 of subdivision plan Psd-031421-054315, located at Sta. Rita, San Miguel, Bulacan,
through an Extrajudicial Partition of Estate of Emilio Dantis, executed in December 1993
which land was titled later on under his name, Rogelio Dantis, married to Victoria Payawal, as
shown by copy of Transfer Certificate of Title No. T-125918, issued by the Register of Deeds
of Bulacan on September 29, 1998, declared for taxation purposes as Tax Declaration with
ARP No. C20-22-043-07-046. According to him, defendant and his predecessor-in-interest
built the house located on said lot. When he first saw it, it was only a small hut but when he
was about 60 years old, he told defendant not to build a bigger house thereon because he
would need the land and defendant would have to vacate the land. Plaintiff, however, has
not been in physical possession of the premises.
Defendant Julio Maghinang, Jr., presented by plaintiff as adverse witness, testified that he
has no title over the property he is occupying. He has not paid realty taxes thereon. He has
not paid any rental to anybody. He is occupying about 352 square meters of the lot. He
presented an affidavit executed on September 3, 1953 by Ignacio Dantis, grandfather of
Rogelio Dantis and the father of Emilio Dantis. The latter was, in turn, the father of Rogelio
Dantis.
The affidavit, according to affiant Ignacio Dantis, alleged that Emilio Dantis agreed to sell 352
square meters of the lot to Julio Maghinang on installment. Defendant was then 11 years old
in 1952.
Defendant Julio Maghinang, Jr. likewise testified for the defendant’s case as follows: He owns
that house located at Sta. Rita, San Miguel, Bulacan, on a 352 square meter lot. He could not
say that he is the owner because there is still question about the lot. He claimed that his
father, Julio Maghinang (Sr.), bought the said lot from the parents of Rogelio Dantis. He
admitted that the affidavit was not signed by the alleged vendor, Emilio Dantis, the father of
Rogelio Dantis. The receipt he presented was admittedly a mere photocopy. He spent
P50,000.00 as attorney’s fees. Since 1953, he has not declared the property as his nor paid
the taxes thereon because there is a problem.6
On March 2, 2005, the RTC rendered its decision declaring Rogelio as the true owner of the
entire 5,657-square meter lot located in Sta. Rita, San Miguel, Bulacan, as evidenced by his
TCT over the same. The RTC did not lend any probative value on the documentary evidence
of sale adduced by Julio, Jr. consisting of: 1) an affidavit allegedly executed by Ignacio Dantis

(Ignacio), Rogelio’s grandfather, whereby said affiant attested, among others, to the sale of
the subject lot made by his son, Emilio, to Julio, Sr. (Exhibit "3")7; and 2) an undated
handwritten receipt of initial downpayment in the amount of ₱100.00 supposedly issued by
Emilio to Julio, Sr. in connection with the sale of the subject lot (Exhibit "4").8 The RTC ruled
that even if these documents were adjudged as competent evidence, still, they would only
serve as proofs that the purchase price for the subject lot had not yet been completely paid
and, hence, Rogelio was not duty-bound to deliver the property to Julio, Jr. The RTC found
Julio, Jr. to be a mere possessor by tolerance. The dispositive portion of the RTC decision
reads:
WHEREFORE, Judgment is hereby rendered as follows:
1. quieting the title and removing whatever cloud over the title on the parcel of land, with
area of 5,647 sq. meters, more or less, located at Sta. Rita, San Miguel, Bulacan, covered by
Transfer Certificate of Title No. T-125918 issued by the Register of Deeds of Bulacan in the
name of "Rogelio Dantis, married to Victoria Payawal";
2. declaring that Rogelio Dantis, married to Victoria Payawal, is the true and lawful owner of
the aforementioned real property; and
3. ordering defendant Julio Maghinang, Jr. and all persons claiming under him to peacefully
vacate the said real property and surrender the possession thereof to plaintiff or latter’s
successors-in-interest.
No pronouncement as to costs in this instance.
SO ORDERED.9
Julio, Jr. moved for a reconsideration of the March 2, 2005 Decision, but the motion was
denied by the RTC in its May 3, 2005 Order.10 Feeling aggrieved, Julio, Jr. appealed the
decision to the CA.
On January 25, 2010, the CA rendered the assailed decision in CA-G.R. CV NO. 85258, finding
the appeal to be impressed with merit. It held that Exhibit "4" was an indubitable proof of
the sale of the 352-square meter lot between Emilio and Julio, Sr. It also ruled that the partial
payment of the purchase price, coupled with the delivery of the res, gave efficacy to the oral
sale and brought it outside the operation of the statute of frauds. Finally, the court a quo
declared that Julio, Jr. and his predecessors-in-interest had an equitable claim over the
subject lot which imposed on Rogelio and his predecessors-in-interest a personal duty to
convey what had been sold after full payment of the selling price. The decretal portion of the
CA decision reads:
IN VIEW OF THE FOREGOING, the decision appealed from is reversed. The heirs of Julio
Maghinang Jr. are declared the owners of the 352-square meter portion of the lot covered by
32
TCT No. T-125968 where the residence of defendant Julio Maghinang is located, and the
plaintiff is ordered to reconvey the aforesaid portion to the aforesaid heirs, subject to
partition by agreement or action to determine the exact metes and bounds and without
prejudice to any legal remedy that the plaintiff may take with respect to the unpaid balance
of the price.
SO ORDERED.11
The motion for reconsideration12 filed by Rogelio was denied by the CA in its March 23, 2010
Resolution. Unfazed, he filed this petition for review on certiorari before this Court.
Issues:
The fundamental question for resolution is whether there is a perfected contract of sale
between Emilio and Julio, Sr. The determination of this issue will settle the rightful ownership
of the subject lot.
Rogelio submits that Exhibit "3" and Exhibit "4" are devoid of evidentiary value and, hence,
deserve scant consideration. He stresses that Exhibit "4" is inadmissible in evidence being a
mere photocopy, and the existence and due execution thereof had not been established. He
argues that even if Exhibit "4" would be considered as competent and admissible evidence,
still, it would not be an adequate proof of the existence of the alleged oral contract of sale
because it failed to provide a description of the subject lot, including its metes and bounds,
as well as its full price or consideration.13
Rogelio argues that while reconveyance may be availed of by the owner of a real property
wrongfully included in the certificate of title of another, the remedy is not obtainable herein
since he is a transferee in good faith, having acquired the land covered by TCT No. T-125918,
through a Deed of Extrajudicial Partition of Estate.14 He asserts that he could not be
considered a trustee as he was not privy to Exhibit "4." In any event, he theorizes that the
action for reconveyance on the ground of implied trust had already prescribed since more
than 10 years had lapsed since the execution of Exhibit "4" in 1953. It is the petitioner’s
stance that Julio, Jr. did not acquire ownership over the subject lot by acquisitive prescription
contending that prescription does not lie against a real property covered by a Torrens title.
He opines that his certificate of title to the subject lot cannot be collaterally attacked
because a Torrens title is indefeasible and must be respected unless challenged in a direct
proceeding.15
The Court’s Ruling
In the case at bench, the CA and the RTC reached different conclusions on the question of
whether or not there was an oral contract of sale. The RTC ruled that Rogelio Dantis was the
sole and rightful owner of the parcel of land covered by TCT No. T-125918 and that no oral
contract of sale was entered into between Emilio Dantis and Julio Maghinang, Sr. involving

the 352-square meter portion of the said property. The CA was of the opposite view. The
determination of whether there existed an oral contract of sale is essentially a question of
fact.
In petitions for review under Rule 45, the Court, as a general rule, does not venture to re-
examine the evidence presented by the contending parties during the trial of the case
considering that it is not a trier of facts and the findings of fact of the CA are conclusive and
binding upon this Court. The rule, however, admits of several exceptions. One of which is
when the findings of the CA are contrary to those of the trial court.16 Considering the
incongruent factual conclusions of the CA and the RTC, this Court is constrained to reassess
the factual circumstances of the case and reevaluate them in the interest of justice.
The petition is meritorious.
It is an age-old rule in civil cases that he who alleges a fact has the burden of proving it and a
mere allegation is not evidence.17 After carefully sifting through the evidence on record, the
Court finds that Rogelio was able to establish a prima facie case in his favor tending to show
his exclusive ownership of the parcel of land under TCT No. T-125918 with an area of 5,657
square meters, which included the 352-square meter subject lot. From the records, it
appears that TCT No. T-125918 is a derivative of TCT No. T-256228, which covered a bigger
area of land measuring 30,000 square meters registered in the name of Emilio Dantis; that
Emilio died intestate on November 13, 1952; that Emilio’s five heirs, including Rogelio,
executed an extra-judicial partition of estate on December 22, 1993 and divided among
themselves specific portions of the property covered by TCT No. T-256228, which were
already set apart by metes and bounds; that the land known as Lot 6-D-1 of the subdivision
plan Psd-031421-054315 with an area of 5,657 sq. m. went to Rogelio, the property now
covered by TCT No. T-125918; and that the property was declared for realty tax purpose in
the name of Rogelio for which a tax declaration was issued in his name; and that the same
had not been transferred to anyone else since its issuance.
In light of Rogelio’s outright denial of the oral sale together with his insistence of ownership
over the subject lot, it behooved upon Julio, Jr. to contravene the former’s claim and
convince the court that he had a valid defense. The burden of evidence shifted to Julio, Jr. to
prove that his father bought the subject lot from Emilio Dantis. In Jison v. Court of Appeals,18
the Court held:
Simply put, he who alleges the affirmative of the issue has the burden of proof, and upon the
plaintiff in a civil case, the burden of proof never parts. However, in the course of trial in a
civil case, once plaintiff makes out a prima facie case in his favor, the duty or the burden of
evidence shifts to defendant to controvert plaintiff’s prima facie case, otherwise, a verdict
must be returned in favor of plaintiff. Moreover, in civil cases, the party having the burden of
proof must produce a preponderance of evidence thereon, with plaintiff having to rely on the
strength of his own evidence and not upon the weakness of the defendant’s. The concept of
"preponderance of evidence" refers to evidence which is of greater weight, or more
33
convincing, that which is offered in opposition to it; at bottom, it means probability of
truth.19
Julio, Jr. failed to discharge this burden. His pieces of evidence, Exhibit "3" and Exhibit "4,"
cannot prevail over the array of documentary and testimonial evidence that were adduced
by Rogelio. The totality of Julio, Jr.’s evidence leaves much to be desired.
To begin with, Exhibit "3," the affidavit of Ignacio, is hearsay evidence and, thus, cannot be
accorded any evidentiary weight. Evidence is hearsay when its probative force depends on
the competency and credibility of some persons other than the witness by whom it is sought
to be produced. The exclusion of hearsay evidence is anchored on three reasons: 1) absence
of cross-examination; 2) absence of demeanor evidence; and 3) absence of oath.20
Jurisprudence dictates that an affidavit is merely hearsay evidence where its affiant/maker
did not take the witness stand.21 The sworn statement of Ignacio is of this kind. The affidavit
was not identified and its averments were not affirmed by affiant Ignacio. Accordingly,
Exhibit "3" must be excluded from the judicial proceedings being an inadmissible hearsay
evidence. It cannot be deemed a declaration against interest for the matter to be considered
as an exception to the hearsay rule because the declarant was not the seller (Emilio), but his
father (Ignacio). Exhibit "4," on the other hand, is considered secondary evidence being a
mere photocopy which, in this case, cannot be admitted to prove the contents of the
purported undated handwritten receipt. The best evidence rule requires that the highest
available degree of proof must be produced. For documentary evidence, the contents of a
document are best proved by the production of the document itself to the exclusion of
secondary or substitutionary evidence, pursuant to Rule 130, Section 322.
A secondary evidence is admissible only upon compliance with Rule 130, Section 5, which
states that: when the original has been lost or destroyed, or cannot be produced in court, the
offeror, upon proof of its execution or existence and the cause of its unavailability without
bad faith on his part, may prove its contents by a copy, or by a recital of its contents in some
authentic document, or by the testimony of witnesses in the order stated. Accordingly, the
offeror of the secondary evidence is burdened to satisfactorily prove the predicates thereof,
namely: (1) the execution or existence of the original; (2) the loss and destruction of the
original or its non-production in court; and (3) the unavailability of the original is not due to
bad faith on the part of the proponent/offeror. Proof of the due execution of the document
and its subsequent loss would constitute the basis for the introduction of secondary
evidence.23 In MCC Industrial Sales Corporation v. Ssangyong Corporation,24 it was held that
where the missing document is the foundation of the action, more strictness in proof is
required than where the document is only collaterally involved.
Guided by these norms, the Court holds that Julio, Jr. failed to prove the due execution of the
original of Exhibit "4" as well as its subsequent loss. A nexus of logically related circumstance
rendered Julio, Jr.’s evidence highly suspect. Also, his testimony was riddled with
improbabilities and contradictions which tend to erode his credibility and raise doubt on the
veracity of his evidence.
 34

First, the claim of Julio, Jr. that Emilio affixed his signature on the original of Exhibit "4" in Second, Julio, Jr.’s testimony pertinent to the alleged loss of the original of Exhibit "4" is
1953 is highly improbable because record shows that Emilio died even before that year, laden with inconsistencies that detract from his credibility. His testimony bears the earmarks
specifically, on November 13, 1952. Excerpts from Julio, Jr.’s testimony relative to this matter of falsehood and, hence, not reliable. Julio, Jr. testified in this wise:
are as follows:
Atty. Roldan Villacorta
Atty. Vicente Millora
(On Direct examination)
(On Cross-examination)
Q: Mr. Witness, I noticed that this document marked as Exhibit "4" is only a photocopy,
Q: You don’t remember how old you were when this according to you you witnessed Emilio where is the original of this document?
Dantis signed this?
A: The original was with the safekeeping of my parents because of the lapse of time the
A: Eleven years old, Sir. original was misplaced, Sir.26

Q: So that was 1953? The above testimony of Julio, Jr. tends to give the impression that the original of the
document was lost while it was in the possession of his parents. During cross-examination,
A: Yes, Sir. however, he testified that it was lost while it was in his possession.

Q: And you were then…? Atty. Vicente Millora

A: I was born October 1942, Sir. (On Cross-examination)

Q: You were eleven (11) years old? Q: x x x Where did you keep that document?

A: Yes, Sir. A: I was the one keeping that document because I live in different places, [the said] it was
lost or misplaced, Sir.
Q: And you mean to say that you witnessed the signing allegedly of the original of Exhibit "4"
when you were eleven (11) years old? Q: In other words, it was lost while the same was in your possession??

A: Yes, Sir. A: Yes, Sir.27 (Emphasis supplied)

Q: And you remember what was signed in this receipt. From your memory can you tell the Still, later, Julio, Jr. claimed that his sister was the one responsible for the loss of the original
title of this Exhibit "4"? of Exhibit "4" after borrowing the same from him. Atty. Vicente Millora

A: What I can say that it is a Sale, Sir. (On Cross-examination)

Q: So, when you said that you witnessed an alleged sale you are referring to Exhibit "4"? Q: So, who is your sister to whom you gave the original?

A: Yes, Sir.25 (Emphasis supplied) A: Benedicta Laya, Sir.

Q: In other words now, you did not lost the document or the original of Exhibit "4" but you
gave it to your sister, am I correct?
 35

A: I just lent to her the original copy, Sir. A: I asked that xerox copy because I have lost the original and I could not find the same, Sir.

Q: So, you lent this original of Exhibit "4" to your sister and your sister never returned the Q: So, from the safe of your mother after her interment, what used you found and got this
same to you? Exhibit "4"?

A: Yes, Sir, because it was lost, that was the only one left in her custody. A: Yes, Sir, from my sister.

Interpreter: Q: So, not from your mother safe?

Witness referring to the xerox copy. A: The original was taken from the safe of my mother, Sir.

Atty. Vicente Millora Q: So after your mother’s death you never saw the original?

Q: In other words, it was your sister who lost the original, is that correct?
A: Yes, Sir, when I lent the original.28 (Emphasis supplied)
The Court also notes the confused narration of Julio, Jr. regarding the last time he saw the
original of Exhibit "4."
Atty. Vicente Millora
A: I did not see it anymore because the original was lost before she died, Sir.30 (Underscoring
supplied)
Third, it is quite strange that two receipts were prepared for the initial payment of ₱100.00 in
connection with the sale of the subject lot. The Court notes that the contents of Exhibit "4"
were similar to those of Annex "A"31 of Julio, Jr.’s Answer, dated June 9, 2002. Annex "A,"
however, was typewritten and the name of the recipient indicated therein was a certain
Cornelio A. Dantis, whose identity and participation in the alleged sale was never explained.

Fourth, apart from the lone testimony of Julio, Jr., no other witness who knew or read Exhibit
(On Cross-examination)
"4," much less saw it executed, was presented. In the absence of any shred of corroborative
evidence, the Court cannot help but entertain doubts on the truthfulness of Julio, Jr.’s naked
Q: And when did you last see the original? assertion.

A: When my mother died in 1993 that was the last time I tried to see the original of the Assuming, in gratia argumenti, that Exhibit "4" is admissible in evidence, there will still be no
document after her interment, Sir. valid and perfected oral contract for failure of Julio, Jr. to prove the concurrence of the
essential requisites of a contract of sale by adequate and competent evidence.
Q: Where did you see this document?
By the contract of sale, one of the contracting parties obligates himself to transfer the
A: From the safekeeping of my mother, Sir.29 ownership of, and to deliver, a determinate thing, and the other to pay therefor a price
certain in money or its equivalent.32 A contract of sale is a consensual contract and, thus, is
xxxx perfected by mere consent which is manifested by the meeting of the offer and the
acceptance upon the thing and the cause which are to constitute the contract.33 Until the
contract of sale is perfected, it cannot, as an independent source of obligation, serve as a
Q: When did you get this Exhibit "4" now, the photocopy from your sister? binding juridical relation between the parties.34 The essential elements of a contract of sale
are: a) consent or meeting of the minds, that is, consent to transfer ownership in exchange
A: When the interment of my mother in September 1993, Sir. for the price; b) determinate subject matter; and c) price certain in money or its equivalent.35
The absence of any of the essential elements shall negate the existence of a perfected
Q: Now, let us reform. Which one did you get after the interment of your mother, this Exhibit contract of sale.36
"4" or the original?
 36

Seemingly, Julio, Jr. wanted to prove the sale by a receipt when it should be the receipt that
should further corroborate the existence of the sale. At best, his testimony only alleges but
does not prove the existence of the verbal agreement. Julio, Jr. miserably failed to establish
by preponderance of evidence that there was a meeting of the minds of the parties as to the
subject matter and the purchase price.
The chief evidence of Julio, Jr. to substantiate the existence of the oral contract of sale is
Exhibit "4." For a better understanding and resolution of the issue at hand, Exhibit "4" is
being reproduced here:
Such being the situation, it cannot, therefore, be said that a definite and firm sales
agreement between the parties had been perfected over the lot in question. Indeed, this
Court has already ruled before that a definite agreement on the manner of payment of the
purchase price is an essential element in the formation of a binding and enforceable contract
of sale. The fact, therefore, that the petitioners delivered to the respondent the sum of
P10,000.00 as part of the down-payment that they had to pay cannot be considered as
sufficient proof of the perfection of any purchase and sale agreement between the parties
herein under Art. 1482 of the new Civil Code, as the petitioners themselves admit that some
essential matter - the terms of payment - still had to be mutually covenanted.41

Alamin ng sino mang The CA held that partial performance of the contract of sale- giving of a downpayment
coupled with the delivery of the res - took the oral contract out of the scope of the Statute of
Frauds. This conclusion arose from its erroneous finding that there was a perfected contract
Makababasa
of sale. The above disquisition, however, shows that there was none. There is, therefore, no
basis for the application of the Statute of Frauds. The application of the Statute of Frauds
Akong si Emilio Dantis may sapat na Gulang may asawa naninirahan sa Sta Rita San Miguel presupposes the existence of a perfected contract.42 As to the delivery of the res, it does not
Bul. ay kusang nagsasasay ng sumosunod. appear to be a voluntary one pursuant to the purported sale. If Julio, Jr. happened to be
there, it was because his ancestors tenanted the land. It must be noted that when Julio, Jr.
Na ako Tumanggap Kay Julio Maghinang ng P100.00 peso cuartang Pilipino, bilang paunang built his house, Rogelio protested.
bayad sa Lupa niyang nilote sa akin 400 apat na raan mahigit na metro cudrado.
WHEREFORE, the petition is GRANTED. The assailed January 25, 2010 Decision and the March
Testigo Tumangap, 23, 2010 Resolution of the Court Appeals, in CA-G.R. CV No. 85258, are REVERSED and SET
ASIDE. The March 2, 2005 Decision of the Regional Trial Court of Malolos, Bulacan, Branch
Emilio a Dantis 18, in Civil Case No. 280-M-2002, is REINSTATED.

A perusal of the above document would readily show that it does not specify a determinate SO ORDERED.
subject matter. Nowhere does it provide a description of the property subject of the sale,
including its metes and bounds, as well as its total area. The Court notes that while Julio, Jr.
testified that the land subject of the sale consisted of 352 square meters, Exhibit "4,"
however, states that it’s more than 400 square meters. Moreover, Exhibit "4" does not
categorically declare the price certain in money. Neither does it state the mode of payment
of the purchase price and the period for its payment.

In Swedish Match, AB v. Court of Appeals,37 the Court ruled that the manner of payment of
the purchase price was an essential element before a valid and binding contract of sale could
exist. Albeit the Civil Code does not explicitly provide that the minds of the contracting
parties must also meet on the terms or manner of payment of the price, the same is needed,
otherwise, there is no sale.38 An agreement anent the manner of payment goes into the price
so much so that a disagreement on the manner of payment is tantamount to a failure to
agree on the price.39 Further, in Velasco v. Court of Appeals,40 where the parties already
agreed on the object of sale and on the purchase price, but not on how and when the
downpayment and the installment payments were to be paid, this Court ruled:

FIRST DIVISION
G.R. No. 108453 July 11, 1994
PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
DONALD DISMUKE Y PAMARITO, accused-appellant.
DAVIDE, JR., J.:
In an information 1 filed with the Regional Trial Court of Valenzuela, Metro Manila, and
docketed therein as Criminal Case No. 994-V-92, accused Donald Dismuke y Pamarito was
charged with the violation of Section 4, Article II of R.A. No. 6425, as amended, committed in
this wise:
That on or about the 8th day of February 1992 in Valenzuela, MM. and
within the jurisdiction of this Honorable Court, the above-named
accused, without having been authorized by law, did then and there
wilfully, unlawfully and feloniously deliver, sell and give away to one PO2
Nelson Labrador two tea bags of marijuana flowering tops for one
Twenty peso bill with SN QB65721, knowing the same to be a prohibited
drug under the provision of the above-cited law.
CONTRARY TO LAW.
The accused pleaded not guilty at his arraignment on 24 February 1992.
After trial on the merits, the lower court promulgated on 28 August 1992 its decision 2 finding
the accused guilty of the crime charged and sentencing him to suffer the penalty of reclusion
perpetua, to pay a fine of P20,000.00, and to pay the costs.
In the main, the prosecution's case drew its support from the uncorroborated testimony of
PO3 Nelson Labrador of the Northern Police District Anti-Narcotics Unit (NPD-ANU). He had
joined the National Police Service on 5 November 1991. 3 According to him, at about 3:00
p.m. of 8 February 1992 (barely three months after he had joined the service), he was at the
office of the NPD-ANU at Sangandaan, Caloocan City, when an informer arrived and told him
that a certain "Donald" was selling marijuana. 4 He then decided to conduct a buy-bust
operation, with himself acting as the buyer, and with PO3 Eliseo Gargaritano and PO3
Wilfredo Lumba as the other team members. Together with the informer, they proceeded to
Consuelo Street, Doña Ata Subdivision, Marulas, Valenzuela, Metro Manila. They arrived at
their destination at about 5:00 p.m. and while cruising around, their informer pointed to a
man near a sari-sari store as Donald, the accused in this case. Labrador, who was in
plainclothes, approached Donald and told the latter of his "intention to buy P20.00 worth of
marijuana." Since Donald "trusted" him, he (Labrador) "gave him the buy/bust money" and
37
Donald in turn gave the former "two teabags of marijuana." 5 Then, pursuant to the team's
pre-arranged signal, Labrador held Donald's right hand. Responding thereto, the other
members of the team came out from their strategic locations, identified themselves, and
assisted Labrador in arresting Donald. The team then brought Donald to the NPD-ANU office
in Sangandaan, Caloocan City, where he was turned over to the unit's investigator, a certain
Reynaldo Lichido, for proper disposition and investigation. The latter prepared a referral-
letter to the PC Laboratory for examination of the tea bags.
Labrador, however, could only produce in court a photocopy of the alleged marked money
(Exhibit "E") because the bill itself was allegedly in the custody of PO3 Gargaritano. The bill
had supposedly been marked by Gargaritano on the "Saligang Batas" portion thereof. 6 The
latter, despite subpoenas sent to him, failed to appear, thereby causing the postponement of
the hearing and prompting the trial court to issue orders requiring him to show cause why he
should not be held in contempt of court. 7 Although he subsequently appeared, the
prosecution did not present him as a witness in the case.
Through Ms. Tita V. Advincula, a forensic chemist of the PNP Central Laboratory Section,
Central Police District, Manila, the prosecution also proved that the contents of the two heat-
sealed transparent plastic bags (Exhibits "B-1" and "B-2"), which were transmitted to her
office by PNP Inspector Asuncion S. Santos of the District Dangerous Drug Enforcement
Division of the Northern Police District Command, were found positive "for marijuana, a
prohibited drug." 8
On the other hand, through the testimonies of the accused and Dennis Pinpin, the defense
presented a different version of the incident. According to the accused, in the afternoon of 8
February 1992, he and his friends, namely, Dennis Pinpin, Ricky Pinpin, and Erwin Soriano
were at Consuelo Street, Marulas, Valenzuela, helping their friend, Allan Olequino, transfer
residence. 9 Suddenly, a tricycle stopped, and PO3 Nelson Labrador and his two companions,
Erning and Vicente, alighted from the tricycle. Labrador asked who among them had
quarreled with his brother. Labrador's companions pointed to the accused and so Nelson told
him to board the tricycle and picked up a piece of wood of which he brandished at him. The
three forced him to board the tricycle. The accused protested that he had not done anything,
but he was told to do his explaining at the police headquarters. He was not, however,
brought to the headquarters but to a place near the barangay hall at F. Bautista Street in
Marulas where he was questioned about the identities of the pushers in the area. When he
failed to name or pinpoint any pusher, he was taken to the Sangandaan police headquarters
where PO3 Labrador took out two plastic teabags of marijuana which Labrador threatened to
use against him if he would still refuse to name the pushers. Nonetheless, he insisted that he
did not know any pusher. He was detained at the said headquarters for about two days.
Thereafter, he was brought before a fiscal in Caloocan City after being warned not to say
anything against them. 10
The accused further testified that during his school days at the Valenzuela Municipal High
School in 1990, he intervened in a fight between his neighbor and Noel Labrador, a brother
of PO3 Labrador. When he failed to pacify them, he boxed Noel, hitting him on the chin. This

incident came to the knowledge of the school principal who then called them to a
conference, which PO3 Labrador attended. He had personally known PO3 Labrador for a long
time because the latter's residence is at F. Bautista Street, Marulas, Valenzuela, which is
merely within "walking distance" from where he, the accused, lived. 11
Dennis Pinpin, a neighbor, friend, and former schoolmate of Donald, corroborated the
latter's testimony on the incident of 8 February 1992, 12 He also testified that he was the one
who had a misunderstanding with Noel Labrador in 1990. He reported the matter to Donald
who tried to settle their differences but Donald ended up fighting with Noel. He, Donald, and
Noel were called to the principal's office and were reprimanded by the principal. At the said
conference, Noel's parents and PO3 Labrador were present. Thereafter, Noel threatened
them by saying that the fight was not yet over. 13
The lower court found the testimony of PO3 Labrador to be credible and positive and
dismissed the accused's claim that he was framed and that the charge was ill-motivated. It
said:
The alleged quarrel happened in 1990 almost two years ago and was
allegedly patched up and settled by the school principal in the presence
of PO2 Nelson Labrador. If it is true that there was a fight/quarrel, the
Labradors will not wait that long a time to take the alleged vindictive
move. 14
In his Appellant's Brief, the accused asserts that the trial court erred:
I
. . . IN GIVING WEIGHT AND CREDENCE TO THE IMPROBABLE AND
INCREDIBLE TESTIMONY OF THE PROSECUTION LONE EYEWITNESS.
II
. . . IN ADMITTING IN EVIDENCE THE TWO TEA BAGS OF MARIJUANA
WHICH WAS PLANTED BY POLICE OFFICER NELSON LABRADOR IN
BLATANT VIOLATION OF THE ACCUSED ['S] CONSTITUTIONAL RIGHTS.
III
. . . IN NOT HOLDING THAT THE PROSECUTION MISERABLY FAILED TO
PROVE THE GUILT OF THE ACCUSED BEYOND REASONABLE DOUBT. 15
At the heart of these assigned errors is the issue of credibility of witnesses. It is well-settled
that this Court will not interfere with the judgment of the trial court in passing on the
38
credibility of the witnesses, unless there appears in the record some fact or circumstance of
weight and influence which has been overlooked or the significance of which has been
misapprehended or misinterpreted. 16 The reason for this is that the trial court is in a better
position to decide the question, having heard the witnesses themselves and observed their
deportment and manner of testifying during the trial. 17
A careful review of the records of this case and a meticulous evaluation of the evidence of
the parties reveal vital facts and circumstances which the trial court overlooked or
misapprehended and which if taken into account would alter the result of this case.
For one thing, the accused personally knew PO3 Labrador; they had met in 1990 in the
principal's office of the Valenzuela Municipal High School during a confrontation between
PO3 Labrador's brother, Nelson, on the one hand, and Dennis Pinpin and the accused on the
other, after the accused had intervened in the fight between Nelson and Dennis and boxed
Nelson on his chin. It is, therefore, most unlikely that the accused would sell a prohibited
drug to a brother of a former foe who, after the confrontation, had warned that the fight was
not yet over. 18 This incident could have provided PO3 Labrador with a motive against the
accused. The trial court is of the view that it could not have, because the incident happened
two years earlier, the dispute was settled by the principal, and if Labrador desired revenge,
he would not have waited for two years. We do not agree. While time may heal wounds of
conflict, it does not necessarily extinguish the desire for vengeance, which may just hibernate
until the circumstances become favorable.
In the instant case, the favorable circumstances could have arisen when PO3 Labrador joined
the PNP in November of 1991. Within three months thereafter, he conducted the alleged
buy-bust operation against the accused solely on the basis of an alleged tip from an informer
given two hours before he conducted the operation. It may be noted that PO3 Labrador did
not testify that he had obtained other derogatory information against the accused or that he
had known the accused to be a drug dealer, pusher, or user. His conduct in this case tainted
the presumption of regularity in the performance of his duty.
For another, we have serious doubts on the existence of the alleged marked money. There is
no evidence as to who provided it and as to when and where it was allegedly marked by PO3
Gargaritano. What Labrador produced was a mere photocopy of the alleged marked money
(Exhibit "E"). He claimed that the marked money itself was in the possession of Gargaritano.
If it was in Gargaritano's possession, we cannot understand why he was not called anymore
to the witness stand to testify for the prosecution when he finally appeared in court in
compliance with its orders.
While the presentation in evidence of the marked money in drugs cases resulting from buy-
bust operations may not be indispensable, 19 the peculiar circumstances of this case,
heightened by the attempt of the alleged poseur-buyer to present a photocopy of what he
claims to be the buy-bust money and the unexplained failure of the prosecution to call to the
witness stand the claimed custodian of the marked money although the latter had already
appeared in court, only taint further the veracity of PO3 Labrador's story.
 39

Exhibit "E" is not admissible in evidence under the best evidence rule. 20 To be admissible as doubts, that the innocent may not suffer and the guilty not escape
secondary evidence, the prosecution should have shown that the original marked money has unpunished. Obvious to all, this is the prosecution's prime duty to the
been lost or destroyed or cannot be produced in court or that it is in the custody of the court, to the accused, and to the state.
adverse party. 21 The prosecution did not.
Again, just like in People vs. Camba, 28 we cannot help but notice that the trial court imposed
Then too, the prosecution failed to prove that the specimens examined by the forensic the penalty of reclusion perpetua which was not the penalty provided for by law at the time
chemist were the ones purportedly sold by the accused to PO3 Labrador. According to the the offense charged was allegedly committed. Although the penalty imposable is now
latter, when they arrived at their headquarters after the buy-bust operation, he turned over immaterial, we call the trial court's attention to the fact that the penalty then imposable was
the accused to their investigator, a certain Reynaldo Lichido, for proper disposition and life imprisonment, if only to underscore the need to impose only the penalty which the law
investigation. Lichido also "immediately prepared the referral to the PC Laboratory for prescribes.
examination in order to be sure if the specimen is positive." 22 What the forensic chemist
examined were the contents of "two transparent plastic bag [sic] containing flowering tops WHEREFORE, the appealed decision of Branch 171 of the Regional Trial Court of Valenzuela,
with rolling papers suspected to be marijuana" transmitted by PNP Inspector Asuncion Metro Manila, in Criminal Case No. 994-V-92 is REVERSED and, on the ground of reasonable
Santos, Officer-in-Charge of the District Dangerous Drugs Enforcement Division of the doubt, accused-appellant DONALD DISMUKE y PAMARITO is hereby ACQUITTED. His
Northern Police District Command. 23 Both Lichido and Santos were not presented by the immediate release from detention is hereby ordered, unless further detention for any lawful
prosecution to testify in this case. Thus, there is no evidence to prove that what were cause is warranted.
allegedly sold by the accused to PO3 Labrador were actually the ones turned over to Lichido,
that what the latter received were turned over to Santos, and that what Santos transmitted
Costs de oficio.
to the forensic chemist were those allegedly sold by the accused. The failure to establish the
evidence's chain of custody is damaging to the prosecution's case.
SO ORDERED.
On the whole then, the scanty evidence for the prosecution casts serious doubts as to the
guilt of the accused. It does not pass the test of moral certainty and is insufficient to rebut
the presumption of innocence which the Bill of Rights guarantees the accused. It is apropos
to repeat the doctrine that an accusation is not, according to the fundamental law,
synonymous with guilt; the prosecution must overthrow the presumption of innocence with
proof of guilt beyond reasonable doubt. 24

In the light of the above disquisition, it is apparent that the law enforcement agency charged
with the enforcement of the Dangerous Drugs Act is partly to be blamed for the result of this
case, assuming that it does have a case against the accused. In People vs. Tantiado, 25 we
exhorted "the law enforcement agencies, especially those assigned to enforce the Dangerous
Drugs Act, to carefully prepare their plans for buy-bust operations and to efficiently and
effectively carry them out, ever mindful of the possibility that their blunders may not only
frustrate the efforts to eradicate the drug menace but worse, embolden drug lords, pushers
or users into defying the authorities." Equally at fault is the prosecuting arm of the
Government, whose ineptitude in prosecuting the case warrants that its attention be likewise
directed, as in the Tantiado case and the recent case of People vs. Camba, 26 to what was said
in People vs. Esquivel: 27

In this connection it may not be out of place to bring to the attention of

prosecuting attorneys the absolute necessity of laying before the court
the pertinent facts at their disposal with methodical and meticulous
attention, clarifying contradictions and filling up gaps and loopholes in
their evidence, to the end that the court's mind may not be tortured by

FIRST DIVISION
G.R. No. 168387 August 25, 2010
SALUN-AT MARQUEZ and NESTOR DELA CRUZ, Petitioners,
vs.
ELOISA ESPEJO, ELENITA ESPEJO, EMERITA ESPEJO, OPHIRRO ESPEJO, OTHNIEL ESPEJO,
ORLANDO ESPEJO, OSMUNDO ESPEJO, ODELEJO ESPEJO and NEMI FERNANDEZ,
Respondents.
DECISION
DEL CASTILLO, J.
When the parties admit the contents of written documents but put in issue whether these
documents adequately and correctly express the true intention of the parties, the deciding
body is authorized to look beyond these instruments and into the contemporaneous and
subsequent actions of the parties in order to determine such intent.
Well-settled is the rule that in case of doubt, it is the intention of the contracting parties that
prevails, for the intention is the soul of a contract, not its wording which is prone to mistakes,
inadequacies, or ambiguities. To hold otherwise would give life, validity, and precedence to
mere typographical errors and defeat the very purpose of agreements.
This Petition for Review on Certiorari1 assails the October 7, 2003 Decision,2 as well as the
May 11, 2005 Resolution3 of the Court of Appeals (CA) in CA G.R. SP No. 69981. The
dispositive portion of the appellate court’s Decision reads:
WHEREFORE, finding reversible error committed by the Department of Agrarian Reform
Adjudication Board, the instant petition for review is GRANTED. The assailed Decision, dated
17 January 2001, rendered by the Department of Agrarian Reform Adjudication Board is
hereby ANNULLED and SET ASIDE. The Decision of the Department of Agrarian Reform
Adjudication Board of Bayombong[,] Nueva Vizcaya, dated 17 March 1998, is REINSTATED.
Costs against respondents.
SO ORDERED.4
The reinstated Decision of the Department of Agrarian Reform Adjudication Board (DARAB)
of Bayombong, Nueva Vizcaya, in turn, contained the following dispositive portion:
Accordingly, judgment is rendered:
40
1. Finding [respondents] to be the owner by re-purchase from RBBI [of] the Murong
property covered by TCT No. [T-]62096 (formerly TCT No. 43258);
2. Ordering the cancellation of TCT with CLOA Nos. 395 and 396 in the name[s] of
Salun-at Marquez and Nestor de la Cruz respectively, as they are disqualified to
become tenants of the Lantap property;
3. Directing RBBI to sell through VOS the Lantap property to its rightful beneficiary,
herein tenant-farmer Nemi Fernandez under reasonable terms and conditions;
4. Ordering RBBI to return the amount paid to it by Nestor and Salun-at; and
ordering the latter to pay 20 cavans of palay per hectare at 46 kilos per cavan unto
[respondents] plus such accrued and unpaid rentals for the past years as may be
duly accounted for with the assistance of the Municipal Agrarian Reform Officer of
Bagabag, Nueva Vizcaya who is also hereby instructed to assist the parties execute
their leasehold contracts and;
5. The order to supervise harvest dated March 11, 1998 shall be observed until
otherwise modified or dissolved by the appellate body.
SO ORDERED.5
Factual Antecedents
Respondents Espejos were the original registered owners of two parcels of agricultural land,
with an area of two hectares each. One is located at Barangay Lantap, Bagabag, Nueva
Vizcaya (the Lantap property) while the other is located in Barangay Murong, Bagabag,
Nueva Vizcaya (the Murong property). There is no dispute among the parties that the Lantap
property is tenanted by respondent Nemi Fernandez (Nemi)6 (who is the husband7 of
respondent Elenita Espejo (Elenita), while the Murong property is tenanted by petitioners
Salun-at Marquez (Marquez) and Nestor Dela Cruz (Dela Cruz).8
The respondents mortgaged both parcels of land to Rural Bank of Bayombong, Inc. (RBBI) to
secure certain loans. Upon their failure to pay the loans, the mortgaged properties were
foreclosed and sold to RBBI. RBBI eventually consolidated title to the properties and transfer
certificates of title (TCTs) were issued in the name of RBBI. TCT No. T-62096 dated January
14, 1985 was issued for the Murong property. It contained the following description:
Beginning at a point marked I on plan H-176292, S. 44034 W. 1656.31 m. more or less from
B.L.L.M. No 1, Bagabag Townsite, K-27,
thence N. 28 deg. 20 ‘E., 200.00 m. to point 2;

thence S. 61 deg. 40 ‘E., 100.00 m. to point 3;
thence S. 28 deg. 20 ‘W., 200.00 m. to point 4;
thence N. 61 deg. 40 ‘W., 100.00 m. to point 1; point of beginning;
Containing an area of 2.000 hectares. Bounded on the northeast, by Road; on the southeast,
and southwest by public land; and on the northwest by Public Land, properties claimed by
Hilario Gaudia and Santos Navarrete. Bearings true. Declination 0131 ‘E. Points referred to
are marked on plan H-176292. Surveyed under authority of sections 12-22 Act No. 2874 and
in accordance with existing regulations of the Bureau of Lands by H.O. Bauman Public Land
Surveyor, [in] December 1912-March 1913. Note: All corners are Conc. Mons. 15x15x60 cm.
This is Lot No. 79-A=Lot No. 159 of Bagabag Townsite, K-27.9
Subsequently, TCT No. T-62836 dated June 4, 1985 was issued for the Lantap property and
contained the following description:
Beginning at a point marked "1" on plan H-105520, N. 80 deg. 32 ‘W., 1150.21 m. from BLLM
No. 122, Irrigation project,
thence N. 61 deg. 40’E., 200.00 m. to point 2;
thence N. 28 deg. 20’E, 100.00 m. to point 3;
thence S. 61 deg. 40’E, 200.00 m. to point 4;
thence S. 28 deg. 20’W, 100.00 m. to point 1; point of beginning; containing an
area of 2.0000 hectares. Bounded on the northeast, southeast, and southwest by
Public land; and on the northwest by Road and public land. Bearings true.
Declination 0 deg. 31’E., points referred to are marked on plan H-105520. Surveyed
under authority of Section 12-22, Act No. 2874 and in accordance with existing
regulations of the Bureau of Lands, by H.O. Bauman Public Land Surveyor, [in] Dec.
1912-Mar. 1913 and approved on January 6, 1932. Note: This is Lot No. 119-A Lot
No. 225 of Bagabag Townsite K-27. All corners are B.I. Conc. Mons. 15x60 cm.10
Both TCTs describe their respective subjects as located in "Bagabag Townsite, K-27," without
any reference to either Barangay Lantap or Barangay Murong.
On February 26, 1985, respondents Espejos bought back one of their lots from RBBI. The
Deed of Sale11 described the property sold as follows:
41
x x x do hereby SELL, TRANSFER, and CONVEY, absolutely and unconditionally x x x that
certain parcel of land, situated in the Municipality of Bagabag, Province of Nueva Vizcaya,
and more particularly bounded and described as follows, to wit:
Beginning at a point marked "1" on plan x x x x Containing an area of 2.000 hectares.
Bounded on the NE., by Road; on the SE., and SW by Public Land; and on the NW., by Public
Land, properties claimed by Hilario Gaudia and Santos Navarrete. Bearing true. Declination
013 ‘B. Points referred to are marked on plan H-176292.
of which the Rural Bank of Bayombong (NV) Inc., is the registered owner in fee simple in
accordance with the Land Registration Act, its title thereto being evidenced by Transfer
Certificate of Title No. T-62096 issued by the Registry of Deeds of Nueva Vizcaya.
As may be seen from the foregoing, the Deed of Sale did not mention the barangay where
the property was located but mentioned the title of the property (TCT No. T-62096), which
title corresponds to the Murong property. There is no evidence, however, that respondents
took possession of the Murong property, or demanded lease rentals from the petitioners
(who continued to be the tenants of the Murong property), or otherwise exercised acts of
ownership over the Murong property. On the other hand, respondent Nemi (husband of
respondent Elenita and brother-in-law of the other respondents), continued working on the
other property -- the Lantap property -- without any evidence that he ever paid rentals to
RBBI or to any landowner. The Deed of Sale was annotated on TCT No. T-62096 almost a
decade later, on July 1, 1994.12
Meanwhile, on June 20, 1990, RBBI, pursuant to Sections 2013 and 2114 of Republic Act (RA)
No. 6657,15 executed separate Deeds of Voluntary Land Transfer (VLTs) in favor of petitioners
Marquez and Dela Cruz, the tenants of the Murong property. Both VLTs described the subject
thereof as an agricultural land located in Barangay Murong and covered by TCT No. T-62836
(which, however, is the title corresponding to the Lantap property).16
After the petitioners completed the payment of the purchase price of P90,000.00 to RBBI,
the DAR issued the corresponding Certificates of Land Ownership Award (CLOAs) to
petitioners Marquez17 and Dela Cruz18 on September 5, 1991. Both CLOAs stated that their
subjects were parcels of agricultural land situated in Barangay Murong.19 The CLOAs were
registered in the Registry of Deeds of Nueva Vizcaya on September 5, 1991.
On February 10, 1997 (more than 10 years after the Deed of Sale in favor of the respondents
and almost seven years after the execution of VLTs in favor of the petitioners), respondents
filed a Complaint20 before the Regional Agrarian Reform Adjudicator (RARAD) of Bayombong,
Nueva Vizcaya for the cancellation of petitioners’ CLOAs, the deposit of leasehold rentals by
petitioners in favor of respondents, and the execution of a deed of voluntary land transfer by
RBBI in favor of respondent Nemi. The complaint was based on respondents’ theory that the
Murong property, occupied by the petitioners, was owned by the respondents by virtue of
the 1985 buy-back, as documented in the Deed of Sale. They based their claim on the fact
that their Deed of Sale refers to TCT No. 62096, which pertains to the Murong property.

Petitioners filed their Answer21 and insisted that they bought the Murong property as
farmer-beneficiaries thereof. They maintained that they have always displayed good faith,
paid lease rentals to RBBI when it became the owner of the Murong property, bought the
same from RBBI upon the honest belief that they were buying the Murong property, and
occupied and exercised acts of ownership over the Murong property. Petitioners also argued
that what respondents Espejos repurchased from RBBI in 1985 was actually the Lantap
property, as evidenced by their continued occupation and possession of the Lantap property
through respondent Nemi.
RBBI answered22 that it was the Lantap property which was the subject of the buy-back
transaction with respondents Espejos. It denied committing a grave mistake in the
transaction and maintained its good faith in the disposition of its acquired assets in
conformity with the rural banking rules and regulations.
OIC-RARAD Decision23
The OIC-RARAD gave precedence to the TCT numbers appearing on the Deed of Sale and the
VLTs. Since TCT No. T-62096 appeared on respondents’ Deed of Sale and the said title refers
to the Murong property, the OIC-RARAD concluded that the subject of sale was indeed the
Murong property. On the other hand, since the petitioners’ VLTs referred to TCT No. T-
62836, which corresponds to the Lantap property, the OIC-RARAD ruled that petitioners’
CLOAs necessarily refer to the Lantap property. As for the particular description contained in
the VLTs that the subject thereof is the Murong property, the OIC-RARAD ruled that it was a
mere typographical error.
Further, since the VLTs covered the Lantap property and petitioners are not the actual tillers
thereof, the OIC-RARAD declared that they were disqualified to become tenants of the
Lantap property and ordered the cancellation of their CLOAs. It then ordered RBBI to execute
a leasehold contract with the real tenant of the Lantap property, Nemi.
The OIC-RARAD recognized that petitioners’ only right as the actual tillers of the Murong
property is to remain as the tenants thereof after the execution of leasehold contracts with
and payment of rentals in arrears to respondents.
DARAB Decision24
Upon appeal filed by petitioners, the DARAB reversed the OIC-RARAD Decision. It ruled that
in assailing the validity of the CLOAs issued to petitioners as bona fide tenant-farmers, the
burden of proof rests on the respondents. There being no evidence that the DAR field
personnel were remiss in the performance of their official duties when they issued the
corresponding CLOAs in favor of petitioners, the presumption of regular performance of duty
prevails. This conclusion is made more imperative by the respondents’ admission that
petitioners are the actual tillers of the Murong property, hence qualified beneficiaries
thereof.
42
As for respondents’ allegation that they bought back the Murong property from RBBI, the
DARAB ruled that they failed to support their allegation with substantial evidence. It gave
more credence to RBBI’s claim that respondents repurchased the Lantap property, not the
Murong property. Respondents, as owners of the Lantap property, were ordered to enter
into an agricultural leasehold contract with their brother-in-law Nemi, who is the actual
tenant of the Lantap property.
The DARAB ended its January 17, 2001 Decision in this wise:
We find no basis or justification to question the authenticity and validity of the CLOAs issued
to appellants as they are by operation of law qualified beneficiaries over the landholdings;
there is nothing to quiet as these titles were awarded in conformity with the CARP program
implementation; and finally, the Board declares that all controverted claims to or against the
subject landholding must be completely and finally laid to rest.
WHEREFORE, premises considered and finding reversible errors[,] the assailed decision is
ANNULLED and a new judgment is hereby rendered, declaring:
1. Appellants Salun-at Marquez and Nestor Dela Cruz as the bona fide tenant-tillers
over the Murong property and therefore they are the qualified beneficiaries
thereof;
2. Declaring Transfer Certificate of Title (TCT) Nos. 395 and 396 issued in the name
of [farmer-beneficiaries] Salun-at Marquez and Nestor Dela Cruz respectively,
covered formerly by TCT No. 62096 (TCT No. 43258) of the Murong property as
valid and legal;
3. Ordering the co-[respondents] to firm-up an agricultural leasehold contract with
bona fide tenant-tiller Nemi Fernandez over the Lantap property, [the latter] being
the subject matter of the ‘buy back’ arrangement entered into between
[respondents] and Rural Bank of Bayombong, Incorporated, and other incidental
matters are deemed resolved.
SO ORDERED.25
Ruling of the Court of Appeals
In appealing to the CA, the respondents insisted that the DARAB erred in ruling that they
repurchased the Lantap property, while the petitioners were awarded the Murong property.
They were adamant that the title numbers indicated in their respective deeds of conveyance
should control in determining the subjects thereof. Since respondents’ Deed of Sale
expressed that its subject is the property with TCT No. T-62096, then what was sold to them
was the Murong property. On the other hand, petitioners’ VLTs and CLOAs say that they
cover the property with TCT No. T-62836; thus it should be understood that they were

awarded the Lantap property. Respondents added that since petitioners are not the actual
tillers of the Lantap property, their CLOAs should be cancelled due to their lack of
qualification.
The CA agreed with the respondents. Using the Best Evidence Rule embodied in Rule 130,
Section 3, the CA held that the Deed of Sale is the best evidence as to its contents,
particularly the description of the land which was the object of the sale. Since the Deed of
Sale expressed that its subject is the land covered by TCT No. T-62096 – the Murong property
– then that is the property that the respondents repurchased.
The CA further ruled that as for petitioners’ VLTs, the same refer to the property with TCT
No. T-62836; thus, the subject of their CLOAs is the Lantap property. The additional
description in the VLTs that the subject thereof is located in Barangay Murong was
considered to be a mere typographical error. The CA ruled that the technical description
contained in the TCT is more accurate in identifying the subject property since the same
particularly describes the properties’ metes and bounds.
Both the RBBI26 and petitioners27 filed their respective motions for reconsideration, which
were separately denied.28
On June 22, 2004, RBBI filed a separate Petition for Review on Certiorari, docketed as G.R.
No. 163320, with this Court.29 RBBI raised the issue that the CA failed to appreciate that
respondents did not come to court with clean hands because they misled RBBI to believe at
the time of the sale that the two lots were not tenanted. RBBI also asked that they be
declared free from any liability to the parties as it did not enrich itself at anyone’s expense.
RBBI’s petition was dismissed on July 26, 2004 for lack of merit. The said Resolution reads:
Considering the allegations, issues[,] and arguments adduced in the petition for review on
certiorari, the Court Resolves to DENY the petition for lack of sufficient showing that the
Court of Appeals had committed any reversible error in the questioned judgment to warrant
the exercise by this Court of its discretionary appellate jurisdiction in this case.30
Their Motion for Reconsideration was likewise denied with finality. 31 Entry of judgment was
made in that case on December 15, 2004.32
On July 27, 2005,33 petitioners filed the instant petition.
Issues
Rephrased and consolidated, the parties present the following issues for the Court’s
determination:
I
43
What is the effect of the final judgment dismissing RBBI’s Petition for Review on Certiorari,
which assailed the same CA Decision
II
Whether the CA erred in utilizing the Best Evidence Rule to determine the subject of the
contracts
III
What are the subject properties of the parties’ respective contracts with RBBI
Our Ruling
Propriety of the Petition
Respondents maintain that the instant petition for review raises factual issues which are
beyond the province of Rule 45.34
The issues involved herein are not entirely factual. Petitioners assail the appellate court’s
rejection of their evidence (as to the contractual intent) as inadmissible under the Best
Evidence Rule. The question involving the admissibility of evidence is a legal question that is
within the Court’s authority to review.35
Besides, even if it were a factual question, the Court is not precluded to review the same. The
rule that a petition for review should raise only questions of law admits of exceptions, among
which are "(1) when the findings are grounded entirely on speculations, surmises, or
conjectures; (2) when the inference made is manifestly mistaken, absurd or impossible; (3)
when there is grave abuse of discretion; (4) when the judgment is based on a
misappreciation of facts; (5) when the findings of fact are conflicting; (6) when, in making its
findings, the same are contrary to the admissions of both appellant and appellee; (7) when
the findings are contrary to those of the trial court; (8) when the findings are conclusions
without citation of specific evidence on which they are based; (9) when the facts set forth in
the petition as well as in the petitioner's main and reply briefs are not disputed by the
respondent; and (10) when the findings of fact are premised on the supposed absence of
evidence and contradicted by the evidence on record."36
In the instant case, we find sufficient basis to apply the exceptions to the general rule
because the appellate court misappreciated the facts of the case through its erroneous
application of the Best Evidence Rule, as will be discussed below. Moreover, the disparate
rulings of the three reviewing bodies below are sufficient for the Court to exercise its
jurisdiction under Rule 45.

First Issue
Dismissal of RBBI’s appeal
Respondents maintain that the Court’s earlier dismissal of RBBI’s petition
for review of the same CA Decision is eloquent proof that there is no reversible error in the
appellate court’s decision in favor of the respondents.37
We are not persuaded. This Court dismissed RBBI’s earlier petition in G.R. No. 163320
because it failed to convincingly demonstrate the alleged errors in the CA Decision. The bank
did not point out the inadequacies and errors in the appellate court’s decision but simply
placed the responsibility for the confusion on the respondents for allegedly misleading the
bank as to the identity of the properties and for misrepresenting that the two lots were not
tenanted. Thus, RBBI argued that respondents did not come to court with clean hands.
These arguments were ineffectual in convincing the Court to review the appellate court’s
Decision. It is the appellant’s responsibility to point out the perceived errors in the appealed
decision. When a party merely raises equitable considerations such as the "clean hands"
doctrine without a clear-cut legal basis and cogent arguments to support his claim, there
should be no surprise if the Court is not swayed to exercise its appellate jurisdiction and the
appeal is dismissed outright. The dismissal of an appeal does not always and necessarily
mean that the appealed decision is correct, for it could simply be the result of the appellant’s
inadequate discussion, ineffectual arguments, or even procedural lapses.
RBBI’s failure to convince the Court of the merits of its appeal should not prejudice
petitioners who were not parties to RBBI’s appeal, especially because petitioners duly filed a
separate appeal and were able to articulately and effectively present their arguments. A
party cannot be deprived of his right to appeal an adverse decision just because another
party had already appealed ahead of him,38 or just because the other party’s separate appeal
had already been dismissed.39
There is another reason not to bind the petitioners to the final judgment against RBBI. RBBI
executed the transfer (VLTs) in favor of petitioners prior to the commencement of the action.
Thus, when the action for cancellation of CLOA was filed, RBBI had already divested itself of
its title to the two properties involved. Under the rule on res judicata, a judgment (in
personam) is conclusive only between the parties and their successors-in-interest by title
subsequent to the commencement of the action.40 Thus, when the vendor (in this case RBBI)
has already transferred his title to third persons (petitioners), the said transferees are not
bound by any judgment which may be rendered against the vendor.41
44
Second Issue
Is it correct to apply the Best Evidence Rule?
Citing the Best Evidence Rule in Rule 130, Section 3, the CA held that the Deed of Sale
between respondents and RBBI is the best evidence as to the property that was sold by RBBI
to the respondents. Since the Deed of Sale stated that its subject is the land covered by TCT
No. T-62096 – the title for the Murong property – then the property repurchased by the
respondents was the Murong property. Likewise, the CA held that since the VLTs between
petitioners and RBBI refer to TCT No. T-62836 – the title for the Lantap property – then the
property transferred to petitioners was the Lantap property.
Petitioners argue that the appellate court erred in using the best evidence rule to determine
the subject of the Deed of Sale and the Deeds of Voluntary Land Transfer. They maintain that
the issue in the case is not the contents of the contracts but the intention of the parties that
was not adequately expressed in their contracts. Petitioners then argue that it is the Parol
Evidence Rule that should be applied in order to adequately resolve the dispute.
Indeed, the appellate court erred in its application of the Best Evidence Rule. The Best
Evidence Rule states that when the subject of inquiry is the contents of a document, the best
evidence is the original document itself and no other evidence (such as a reproduction,
photocopy or oral evidence) is admissible as a general rule. The original is preferred because
it reduces the chance of undetected tampering with the document.42
In the instant case, there is no room for the application of the Best Evidence Rule because
there is no dispute regarding the contents of the documents. It is admitted by the parties
that the respondents’ Deed of Sale referred to TCT No. T-62096 as its subject; while the
petitioners’ Deeds of Voluntary Land Transfer referred to TCT No. T-62836 as its subject,
which is further described as located in Barangay Murong.
The real issue is whether the admitted contents of these documents adequately and
correctly express the true intention of the parties. As to the Deed of Sale, petitioners (and
RBBI) maintain that while it refers to TCT No. T-62096, the parties actually intended the sale
of the Lantap property (covered by TCT No. T-62836).
As to the VLTs, respondents contend that the reference to TCT No. T-62836 (corresponding
to the Lantap property) reflects the true intention of RBBI and the petitioners, and the
reference to "Barangay Murong" was a typographical error. On the other hand, petitioners
claim that the reference to "Barangay Murong" reflects their true intention, while the
reference to TCT No. T-62836 was a mere error. This dispute reflects an intrinsic ambiguity in
the contracts, arising from an apparent failure of the instruments to adequately express the
true intention of the parties. To resolve the ambiguity, resort must be had to evidence
outside of the instruments.

The CA, however, refused to look beyond the literal wording of the documents and rejected
any other evidence that could shed light on the actual intention of the contracting parties.
Though the CA cited the Best Evidence Rule, it appears that what it actually applied was the
Parol Evidence Rule instead, which provides:
When the terms of an agreement have been reduced to writing, it is considered as containing
all the terms agreed upon and there can be, between the parties and their successors in
interest, no evidence of such terms other than the contents of the written agreement.43
The Parol Evidence Rule excludes parol or extrinsic evidence by which a party seeks to
contradict, vary, add to or subtract from the terms of a valid agreement or instrument. Thus,
it appears that what the CA actually applied in its assailed Decision when it refused to look
beyond the words of the contracts was the Parol Evidence Rule, not the Best Evidence Rule.
The appellate court gave primacy to the literal terms of the two contracts and refused to
admit any other evidence that would contradict such terms.
However, even the application of the Parol Evidence Rule is improper in the case at bar. In
the first place, respondents are not parties to the VLTs executed between RBBI and
petitioners; they are strangers to the written contracts. Rule 130, Section 9 specifically
provides that parol evidence rule is exclusive only as "between the parties and their
successors-in-interest." The parol evidence rule may not be invoked where at least one of the
parties to the suit is not a party or a privy of a party to the written document in question, and
does not base his claim on the instrument or assert a right originating in the instrument.44
Moreover, the instant case falls under the exceptions to the Parol Evidence Rule, as provided
in the second paragraph of Rule 130, Section 9:
However, a party may present evidence to modify, explain or add to the terms of the written
agreement if he puts in issue in his pleading:
(1) An intrinsic ambiguity, mistake or imperfection in the written agreement;
(2) The failure of the written agreement to express the true intent and agreement
of the parties thereto;
x x x x (Emphasis supplied)
Here, the petitioners’ VLTs suffer from intrinsic ambiguity. The VLTs described the subject
property as covered by TCT No. T-62836 (Lantap property), but they also describe the subject
property as being located in "Barangay Murong." Even the respondents’ Deed of Sale falls
under the exception to the Parol Evidence Rule. It refers to "TCT No. T-62096" (Murong
property), but RBBI contended that the true intent was to sell the Lantap property. In short,
it was squarely put in issue that the written agreement failed to express the true intent of
the parties.
45
Based on the foregoing, the resolution of the instant case necessitates an examination of the
parties’ respective parol evidence, in order to determine the true intent of the parties. Well-
settled is the rule that in case of doubt, it is the intention of the contracting parties that
prevails, for the intention is the soul of a contract,45 not its wording which is prone to
mistakes, inadequacies, or ambiguities. To hold otherwise would give life, validity, and
precedence to mere typographical errors and defeat the very purpose of agreements.
In this regard, guidance is provided by the following articles of the Civil Code involving the
interpretation of contracts:
Article 1370. If the terms of a contract are clear and leave no doubt upon the intention of the
contracting parties, the literal meaning of its stipulations shall control.
If the words appear to be contrary to the evident intention of the parties, the latter shall
prevail over the former.
Article 1371. In order to judge the intention of the contracting parties, their
contemporaneous and subsequent acts shall be principally considered.
Rule 130, Section 13 which provides for the rules on the interpretation of documents is
likewise enlightening:
Section 13. Interpretation according to circumstances. – For the proper construction of an
instrument, the circumstances under which it was made, including the situation of the
subject thereof and of the parties to it, may be shown, so that the judge may be placed in the
position of those whose language he is to interpret.1âwphi1
Applying the foregoing guiding rules, it is clear that the Deed of Sale was intended to transfer
the Lantap property to the respondents, while the VLTs were intended to convey the Murong
property to the petitioners. This may be seen from the contemporaneous and subsequent
acts of the parties.
Third issue
Determining the intention of the parties
regarding the subjects of their contracts
We are convinced that the subject of the Deed of Sale between RBBI and the respondents
was the Lantap property, and not the Murong property. After the execution in 1985 of the
Deed of Sale, the respondents did not exercise acts of ownership that could show that they
indeed knew and believed that they repurchased the Murong property. They did not take
possession of the Murong property. As admitted by the parties, the Murong property was in
the possession of the petitioners, who occupied and tilled the same without any objection
 46

from the respondents. Moreover, petitioners paid leasehold rentals for using the Murong
property to RBBI, not to the respondents.
Aside from respondents’ neglect of their alleged ownership rights over the Murong property,
there is one other circumstance that convinces us that what respondents really repurchased
was the Lantap property. Respondent Nemi (husband of respondent Elenita) is the farmer
actually tilling the Lantap property, without turning over the supposed landowner’s share to
RBBI. This strongly indicates that the respondents considered themselves (and not RBBI) as
the owners of the Lantap property. For if respondents (particularly spouses Elenita and Nemi)
truly believed that RBBI retained ownership of the Lantap property, how come they never
complied with their obligations as supposed tenants of RBBI’s land? The factual
circumstances of the case simply do not support the theory propounded by the respondents.
We are likewise convinced that the subject of the Deeds of Voluntary Land Transfer (VLTs) in
favor of petitioners was the Murong property, and not the Lantap property. When the VLTs
were executed in 1990, petitioners were already the tenant-farmers of the Murong property,
and had been paying rentals to RBBI accordingly. It is therefore natural that the Murong
property and no other was the one that they had intended to acquire from RBBI with the
execution of the VLTs. Moreover, after the execution of the VLTs, petitioners remained in
possession of the Murong property, enjoying and tilling it without any opposition from
anybody. Subsequently, after the petitioners completed their payment of the total purchase
price of P90,000.00 to RBBI, the Department of Agrarian Reform (DAR) officials conducted
their investigation of the Murong property which, with the presumption of regularity in the
performance of official duty, did not reveal any anomaly. Petitioners were found to be in
actual possession of the Murong property and were the qualified beneficiaries thereof. Thus,
the DAR officials issued CLOAs in petitioners’ favor; and these CLOAs explicitly refer to the
land in Barangay Murong. All this time, petitioners were in possession of the Murong
property, undisturbed by anyone for several long years, until respondents started the
controversy in 1997.
acts, not to abide by the true agreement of the parties.47 It seems fairly obvious that
petitioners had no cause to reform their VLTs because the parties thereto (RBBI and
petitioners) never had any dispute as to the interpretation and application thereof. They
both understood the VLTs to cover the Murong property (and not the Lantap property). It
was only much later, when strangers to the contracts argued for a different interpretation,
that the issue became relevant for the first time.
All told, we rule that the Deed of Sale dated February 26, 1985 between respondents and
RBBI covers the Lantap property under TCT No. T-62836, while the Deeds of Voluntary Land
Transfer and TCT Nos. CLOA-395 and CLOA-396 of the petitioners cover the Murong property
under TCT No. T-62096. In consequence, the CA’s ruling against RBBI should not be executed
as such execution would be inconsistent with our ruling herein. Although the CA’s decision
had already become final and executory as against RBBI with the dismissal of RBBI’s petition
in G.R. No. 163320, our ruling herein in favor of petitioners is a supervening cause which
renders the execution of the CA decision against RBBI unjust and inequitable.
WHEREFORE, the Petition for Review on Certiorari is GRANTED. The assailed October 7, 2003
Decision, as well as the May 11, 2005 Resolution of the Court of Appeals in CA-G.R. SP No.
69981 are REVERSED and SET ASIDE. The January 17, 2001 Decision of the DARAB Central
Office is REINSTATED. The Deed of Sale dated February 26, 1985 between respondents and
Rural Bank of Bayombong, Inc. covers the Lantap property under TCT No. T-62836, while the
Deeds of Voluntary Land Transfer and TCT Nos. CLOA-395 and CLOA-396 of the petitioners
cover the Murong property under TCT No. T-62096. The Register of Deeds of Nueva Vizcaya
is directed to make the necessary corrections to the titles of the said properties in
accordance with this Decision. Costs against respondents.
SO ORDERED

All of these contemporaneous and subsequent actions of RBBI and petitioners support their
position that the subject of their contract (VLTs) is the Murong property, not the Lantap
property. Conversely, there has been no contrary evidence of the parties’ actuations to
indicate that they intended the sale of the Lantap property. Thus, it appears that the
reference in their VLT to TCT No. T-62836 (Lantap property) was due to their honest but
mistaken belief that the said title covers the Murong property. Such a mistake is not
farfetched considering that TCT No. T-62836 only refers to the Municipality of Bayombong,
Nueva Vizcaya, and does not indicate the particular barangay where the property is located.
Moreover, both properties are bounded by a road and public land. Hence, were it not for the
detailed technical description, the titles for the two properties are very similar.

The respondents attempt to discredit petitioners’ argument that their VLTs were intrinsically
ambiguous and failed to express their true intention by asking why petitioners never filed an
action for the reformation of their contract.46 A cause of action for the reformation of a
contract only arises when one of the contracting parties manifests an intention, by overt

THIRD DIVISION
G.R. No. 172820 June 23, 2010
DULCE PAMINTUAN, Petitioner,
vs.
PEOPLE OF THE PHILIPPINES, Respondent.
DECISION
BRION, J.:
We review in this Rule 45 petition the decision1 and the resolution2 of the Court of Appeals
(CA) that totally affirmed the decision3 of the Regional Trial Court (RTC), Branch 2, Batangas
City in Criminal Case No. 11002.
The RTC found Dulce Pamintuan (petitioner) guilty beyond reasonable doubt of the crime of
estafa, penalized under Article 315, paragraph 1(b) of the Revised Penal Code, as amended,
and sentenced her to imprisonment of four (4) years and two (2) months of prision
correccional, as minimum, to twenty (20) years of reclusion temporal, as maximum.
The Information charging the petitioner with estafa, as defined and penalized under Article
315, paragraph 1(b) of the Revised Penal Code, as amended, reads:
That on or about February 16, 1996 at Batangas City, Philippines and within the jurisdiction
of this Honorable Court, the above-named accused, after having received in trust and on
commission from one Jeremias Victoria a diamond ring worth SEVEN HUNDRED SIXTY FIVE
THOUSAND (P765,000.00) PESOS, Philippine Currency, with the understanding and
agreement that the same shall be sold by her on cash basis at a price not less than its value
and that the overprice, if any, shall be her commission and the proceeds of the sale shall be
remitted to Jeremias Victoria immediately upon sale thereof, and if unsold, said diamond ring
will be returned to Jeremias Victoria within a period of three (3) days from the date of
receipt, but said accused, far from complying with her obligation to return the unsold
diamond ring, with grave abuse of confidence, with intent to defraud, did then and there
willfully, unlawfully and feloniously convert and misappropriate the same to her own
personal use and benefit and despite demands made upon her to return the said jewelry, she
failed and refused to do so, to the damage and prejudice of Jeremias Victoria in the
aforementioned amount of P765,000.00, Philippine Currency.
CONTRARY TO LAW.4
The petitioner pleaded not guilty to the charge; trial on the merits followed.
47
The Prosecution Evidence
The prosecution presented two witnesses – Jeremias Victoria and Aurora C. Realon – to
establish its case. Jeremias testified that on February 16, 1996, the petitioner received from
him a diamond ring worth P765,000.00 on the condition that it would be sold on commission
basis. At the time she received the ring, the petitioner signed a document entitled
Katibayan,5 authorizing the sale of the ring under the following express conditions: the
petitioner was to sell the ring for cash and with an overprice as her profit, and remit the full
payment to Jeremias; she would not entrust the ring to anybody; and if unsold within three
days, she must return the ring, or pay for it in cash.6
The petitioner failed to remit payment for the diamond ring despite the lapse of the agreed
period. Neither did she return the diamond ring. Subsequently, Jeremias, through his lawyer,
sent two (2) formal demand letters7 for the petitioner to comply with her obligations under
the Katibayan. The demand letters went unheeded. Thus, the petitioner failed to comply with
her obligations to Jeremias.8
As rebuttal evidence, Jeremias claimed that the petitioner failed to return the diamond ring
because she pawned it. Jeremias also denied that he received any jewelry from the petitioner
in exchange for the diamond ring.9
The Defense Evidence
The petitioner testified in her behalf and admitted that she received the diamond ring from
Jeremias in exchange for seven (7) pieces of jewelry valued at P350,000.00 that she also then
delivered to Jeremias for cleaning and eventual sale. The petitioner likewise stated that the
delivery of the seven pieces of jewelry was evidenced by a receipt that Jeremias signed,10 and
that she subsequently tried to return the diamond ring but he refused to accept it. Although
the petitioner acknowledged signing the Katibayan, she claimed that Jeremias entrusted the
diamond ring to her before he left for abroad, and that she only heard from him again after
the criminal case had been filed against her. The petitioner likewise claimed that she tried to
return the diamond ring during the preliminary investigation of the case, but Jeremias
refused to accept it.
As sur-rebuttal evidence, the petitioner presented a Deed of Real Estate Mortgage dated
August 25, 2003 (mortgage deed),11 executed by Danilo Pamintuan, the petitioner’s husband.
According to the terms of the mortgage deed, Danilo admitted that Jeremias had entrusted
the diamond ring to him on February 16, 1996, not to the petitioner, and that the mortgage
deed was constituted in consideration of Danilo’s promise to return the diamond ring to
Jeremias.

The RTC’s Ruling
The RTC found the petitioner guilty beyond reasonable doubt of estafa.12 It also found that
the defense failed to refute the prosecution evidence establishing all the elements of the
crime charged. The RTC ruled, too, that the mortgage deed only served as proof of the
restitution of or reparation for the value of the diamond ring and thus addressed only the
petitioner’s civil liability, not her criminal liability. The dispositive portion of the RTC decision
reads:
WHEREFORE, finding the accused DULCE PAMINTUAN guilty beyond reasonable doubt for
the crime of estafa, defined and penalized under Article 315, par. 1 (b) of the Revised Penal
Code, without modifying circumstances, she is hereby sentenced to suffer the indeterminate
penalty of four (4) years and two (2) months of prision correccional as minimum to twenty
(20) years of reclusion temporal as maximum.
Considering that there is already a settlement as to the payment of the civil liability, as
embodied in the Real Estate Mortgage executed by the parties, this Court hereby refrains to
pronounce the corresponding civil indemnity.
SO ORDERED.
The petitioner appealed to the CA.
The CA Ruling
The CA agreed with the RTC that the petitioner was guilty beyond reasonable doubt of estafa
and thus dismissed the petitioner’s appeal.13 The CA ruled that the prosecution evidence
showed that Jeremias entrusted possession of the diamond ring to the petitioner, not to her
husband. The CA observed that the prosecution duly proved the petitioner’s
misappropriation by showing that she failed to return the diamond ring upon demand. That
misappropriation took place was strengthened when the petitioner failed to refute Jeremias’
allegation that she pawned the diamond ring – an act that ran counter to the terms of her
agency under the Katibayan.
The petitioner moved to reconsider the CA decision, arguing that the CA disregarded the
legal significance of the mortgage deed, and filed the present petition after the CA denied
her motion.
The Issues
The petitioner raises the following issues:
48
1. whether the CA correctly disregarded the effect of the mortgage deed on her criminal
liability; and
2. whether the elements of the crime of estafa under Article 315, paragraph 1(b) of the
Revised Penal Code, as amended, were duly proven beyond reasonable doubt.
The petitioner asserts that the terms of the mortgage deed negated the element of
misappropriation, and the RTC and the CA did not at all consider these when they convicted
her. At the same time, she disputes the terms of the Katibayan, as its stipulations, written in
fine print, did not truly disclose the real nature of the transaction between her and Jeremias.
She also claims that she became the owner of the diamond ring after it was turned over to
her. The petitioner further insists that she signed the Katibayan without taking heed of its
terms because she trusted Jeremias.
The Court’s Ruling
We find the petition unmeritorious.
The issues raised by the petitioner are essentially encapsulated by the second issue outlined
above – i.e., whether the crime of estafa has been sufficiently established; the first issue
relating to the mortgage deed is a matter of defense that should be considered in resolving
the second issue.
Article 315, paragraph 1(b) of the Revised Penal Code, as amended, under which the
petitioner was charged and prosecuted, states:
Art. 315. Swindling (estafa). - Any person who shall defraud another by any of the means
mentioned hereinbelow shall be punished by:
1st. The penalty of prision correccional in its maximum period to prision mayor in its
minimum period, if the amount of the fraud is over 12,000 pesos but does not exceed 22,000
pesos; and if such amount exceeds the latter sum, the penalty provided in this paragraph
shall be imposed in its maximum period, adding one year for each additional 10,000 pesos;
but the total penalty which may be imposed shall not exceed twenty years. In such cases, and
in connection with the accessory penalties which may be imposed and for the purpose of the
other provisions of this Code, the penalty shall be termed prision mayor or reclusion
temporal, as the case may be[.]
1. With unfaithfulness or abuse of confidence, namely:
(b) By misappropriating or converting, to the prejudice of another, money, goods or any
other personal property received by the offender in trust, or on commission, or for
administration, or under any other obligation involving the duty to make delivery of, or to

return the same, even though such obligation be totally or partially guaranteed by a bond; or
by denying having received such money, goods, or other property[.]
The elements of estafa under this provision are: (1) the offender’s receipt of money, goods,
or other personal property in trust, or on commission, or for administration, or under any
other obligation involving the duty to deliver, or to return, the same; (2) misappropriation or
conversion by the offender of the money or property received, or denial of receipt of the
money or property; (3) the misappropriation, conversion or denial is to the prejudice of
another; and (4) demand by the offended party that the offender return the money or
property received.14
The essence of this kind of estafa is the appropriation or conversion of money or property
received to the prejudice of the entity to whom a return should be made.15 The words
"convert" and "misappropriate" connote the act of using or disposing of another’s property
as if it were one’s own, or of devoting it to a purpose or use different from that agreed
upon.16 To misappropriate for one’s own use includes not only conversion to one’s personal
advantage, but also every attempt to dispose of the property of another without right.17 In
proving the element of conversion or misappropriation, a legal presumption of
misappropriation arises when the accused fails to deliver the proceeds of the sale or to
return the items to be sold and fails to give an account of their whereabouts.18
In this case, the petitioner asserts that the prosecution failed to sufficiently prove the first
and second elements of the crime. The petitioner also asserts that these elements were
negated by her testimony and by the mortgage deed that showed she received the diamond
ring as owner, and not as an agent. The petitioner argues that she could not have
misappropriated or converted the diamond ring precisely because she was its owner.
The First Element: Receipt of Goods in Trust
The prosecution proved the first element of the crime through the testimony of Jeremias
who related that he gave the petitioner the diamond ring for sale on commission basis. The
unequivocal terms of the Katibayan corroborated Jeremias’ testimony and showed the
fiduciary relationship between the two parties as principal and agent, where the petitioner
was entrusted with the diamond ring under the specific authority to sell it within three days
from its receipt and to return it if it remains unsold within that period.
Significantly, the petitioner admitted the fiduciary relationship between herself and Jeremias
– an aspect of the case that the RTC and the CA duly noted through the finding that the
petitioner admitted receiving the diamond ring from Jeremias to be sold on commission
basis.19
Against the prosecution’s case, the defense submitted its own evidence and varying theories
that unfortunately suffered from serious contradictions.
49
First, at the earliest stages of the trial proper, the petitioner categorically admitted on the
witness stand that she received the diamond ring in order to sell it on commission basis.
Immediately after, she testified that she gave several pieces of jewelry (evidenced by a
receipt) to Jeremias in exchange for the diamond ring. As the RTC noted, however, the
written receipt of the pieces of jewelry did not support the theory that they had been given
by way of exchange for the diamond ring. The RTC observed:
[T]here is nothing in the document to show that it was received, nor it was given to the
private complainant in exchange of the latter’s ring. There is not even, in the said list, any
valuation or costing of each [jewelry] x x x What is contained in the list are the words "for
cleaning" which purports no other meaning that would favor the cause of the accused.20
Second, the defense next attacked the identity of the recipient of the diamond ring. As sur-
rebuttal, the petitioner presented the mortgage deed to show that the diamond ring was
entrusted to her husband, Danilo, and not to her. This mortgage deed, however, was
executed only on August 25, 2003, or long after the ring was delivered on February 16, 1996,
together with the Katibayan that the petitioner duly signed. It likewise contradicted the
petitioner’s earlier admission that she took delivery of the diamond ring. Not surprisingly, the
lower courts did not give the submitted deed any evidentiary value.
Lastly, the defense propounded the theory that the petitioner and her husband jointly
owned the diamond ring, citing the mortgage deed as proof and basis of this claim. Both the
RTC and the CA recognized the theory as unmeritorious given the clear terms of the
mortgage deed. These terms did not speak of the petitioner or Danilo’s ownership of the
ring, merely of Danilo’s intended return of the ring. The mortgage deed reads:
[T]he MORTGAGOR [DANILO PAMINTUAN], for and in consideration of my promise to return
within thirty (30) days from today to JERRY VICTORIA, Filipino citizen, of legal age, married
and a resident of San Isidro Village, Batangas City, hereinafter referred to as the
MORTGAGEE, the jewelry subject matter of Criminal Case No. 11002, in the same order and
condition when it was entrusted to me by the MORTGAGEE on February 16, 1996, hereby
convey by way of first mortgage unto the said MORTGAGEE x x x [.]21
The Second Element: The Misappropriation
The second element – the misappropriation of the diamond ring – was proven by Jeremias’
testimony that the petitioner failed to return the diamond ring after the lapse of the agreed
period or afterwards, despite the clear terms of the Katibayan. He further testified that the
petitioner could not return the ring because she had pawned it. She strangely did not
respond to this allegation. This silence, coupled with her undeniable failure to return the
diamond ring, immeasurably strengthened the element of misappropriation. Her silence
assumes great significance since the pawning of the diamond ring was a clear violation of the
Katibayan which only gave her the authority to sell on commission or to return the ring.
Acting beyond the mandate of this agency is the conversion or misappropriation that the
crime of estafa punishes.

Third and Fourth Elements: Prejudice and Demand
The prosecution proved the third and fourth elements through evidence of demands and the
continued failure to return the ring or its value for seven years (1996 to 2003) despite
demand. Based on the records, the return of the value of the ring came only in 2003 after the
execution of the mortgage deed that, strangely, while marked as Exh. "4," was never offered
in evidence and is thus technically not an evidence we can appreciate.22 The demand letters,
on the other hand, were never disputed and thus clearly showed the failure to return the ring
or its value. In fact, even if the mortgage deed were to be given evidentiary value, it can only
stand as evidence of the return of the value of the ring in 2003, not of anything else.
The basis of the estafa charge is the failure to return the ring or to pay for its value in cash
within the period stipulated in the Katibayan. We do not find it disputed that the ring was
never returned despite demands. The value of the ring was not also made available to
Jeremias until seven years after its delivery to the petitioner. When she failed at the first
instance (and in fact she continuously failed), despite demands, to return at least the value of
the ring, the crime of estafa was consummated. The return after seven years of its value only
addressed the civil liability that the consummated crime of estafa carried with it, as the RTC
and the CA correctly stated in their decisions.1avvphi1
If only to address the petitioner’s issue regarding the legal significance of the un-offered
mortgage deed, we observe that it could not have raised any reasonable doubt about the
nature of the transaction between the parties. Under the circumstances, the best evidence
to ascertain the nature of the parties’ diamond ring transaction is the Katibayan which is the
written evidence of their agreement that should be deemed to contain all the terms they
agreed upon.23 Under the parol evidence rule, no additional or contradictory terms to this
written agreement can be admitted to show that, at or before the signing of the document,
other or different terms were orally agreed upon by the parties.24 Thus, the terms of the
Katibayan should be the prevailing terms of the transaction between the parties, not any oral
or side agreement the petitioner alleged. We consider, too, in this regard that the post-
Katibayan acts of the parties strengthened, rather than negated, the Katibayan terms,
particularly the petitioner’s obligation to return the diamond ring; otherwise, she would not
have attempted to return the value of the ring when the criminal complaint was filed against
her, nor secured the execution of the mortgage deed, had no such obligation existed.
Viewed in their totality, we hold that the prosecution presented proof beyond reasonable
doubt of the petitioner’s guilt, and both the RTC and the CA did not err in their conclusions.
The prosecution evidence was clear and categorical, and systematically established every
element of the crime; the defense evidence, on the other hand, glaringly suffered from
contradictions, changes of theories, and deficiencies that placed its merit in great doubt.
The Penalty
The decisive factor in determining the criminal and civil liability for the crime of estafa
depends on the value of the thing or the amount defrauded. In this case, the established
50
evidence showed that the value of the diamond ring is P765,000.00. The first paragraph of
Article 315 provides the appropriate penalty if the value of the thing or the amount
defrauded exceeds P22,000.00, as follows:
1st. The penalty of prision correccional in its maximum period to prision mayor in its
minimum period, if the amount of the fraud is over 12,000 pesos but does not exceed 22,000
pesos; and if such amount exceeds the latter sum, the penalty provided in this paragraph
shall be imposed in its maximum period, adding one year for each additional 10,000 pesos;
but the total penalty which may be imposed shall not exceed twenty years.
With the given penalty range pegged at the maximum of prision mayor in its minimum period
and an additional one year for every P10,000.00 in excess of P22,000.00, the maximum
imposable penalty shall exceed twenty years when computed, twenty years of imprisonment
should be imposed as maximum.
The minimum of the imposable penalty depends on the application of the Indeterminate
Sentence Law pursuant to which the maximum term is "that which, in view of the attending
circumstances, could be properly imposed" under the Revised Penal Code, and the minimum
shall be "within the range of the penalty next lower to that prescribed" for the offense. The
penalty next lower should be based on the penalty prescribed by the Code for the offense,
without first considering any modifying circumstance attendant to the commission of the
crime. The determination of the minimum penalty is left by law to the sound discretion of the
court and it can be anywhere within the range of the penalty next lower without any
reference to the periods into which it might be subdivided. The modifying circumstances are
considered only in the imposition of the maximum term of the indeterminate sentence.
Since the penalty prescribed by law for the crime of estafa is prision correccional maximum
to prision mayor minimum, the penalty next lower would then be prision correccional
minimum to medium. Thus, the minimum term of the indeterminate sentence should be
anywhere within six (6) months and one (1) day to four (4) years and two (2) months, while
the maximum term of the indeterminate sentence should at least be six (6) years and one (1)
day because the amounts involved exceeded P22,000.00, plus an additional one (1) year for
each additional P10,000.00.25
Under these norms, the penalty of four (4) years and two (2) months of prision correccional,
as minimum term, to twenty (20) years of reclusion temporal, as maximum term, is correct.
The RTC and the CA were correct in not awarding civil liability since the execution of the
mortgage deed satisfied the value of the unreturned diamond ring.
WHEREFORE, we hereby DENY the petition for lack of merit, and consequently AFFIRM the
decision dated January 12, 2006 and the resolution dated May 19, 2006 of the Court of
Appeals in CA-G.R. CR No. 28785, finding petitioner Dulce Pamintuan guilty beyond
reasonable doubt of the crime of estafa, defined and penalized under Article 315, paragraph
1(b) of the Revised Penal Code, as amended. No costs. SO ORDERED.

EN BANC
G.R. No. L-11310 January 31, 1918
CARLOS PALANCA, plaintiff-appellant,
vs.
FRED WILSON & CO., defendant-appellee.
Alfredo Chicote and Jose Arnaiz for appellant.
Gilbert, Cohn and Fisher for appellee.
MALCOLM, J.:
As the culmination of negotiations, on June 11, 1913, Song Fo and Co., of Manila, through its
manager Carlos Palanca, entered into a contract with Fred Wilson and Co. for the purchase of
a distilling apparatus for P10,000. Wilson and Co. ordered the apparatus of Turner, Schon
and Co., London, installing it in January, 1914. On May 18, 1914, or about five months after
the machine was installed, Palanca wrote Wilson and Co. that the rectifying machine had
been examined by a number of competent persons who stated that the machine was not
capable of producing the amount of alcohol stipulated in the contract. Getting no satisfaction
from the reply of Wilson and Co., action for damages for breach of contract was begun in the
Court of First Instance of the city of Manila, praying first that the defendant be ordered to
comply strictly with the terms of the contract and second that the defendant be ordered to
pay as damages the amount of P16,713.80.
Defendant answered with a general denial and a cross-complaint asking judgment against
the plaintiff in the sum of P5,000, the final installment claimed to be due as the purchase
price of the machine. By the judgment handed down by the Honorable James A. Ostrand,
judge of first instance, it was ordered that the plaintiff take nothing by his action, and that
the defendant have and recovered judgment against the plaintiff for the sum of P5,000, with
interest thereon at the rate of 12 per cent per annum from the first day of September, 1914,
without special findings as to costs.
It is around the first clause of the contract (Exhibit D) that all the argument centers. This
clause reads: "Un aparato; 'Guillaume' para la destilacion-rectificacion directa y continua;
tipo 'C,' Agricola, de una capacidad de 6,000 litros cada 24 horas de trabajo, de un grado de
96-97 Gay Lussac, todo segun el grabado de la pagina 30 del catalogo Egrot, edicion de
1907." We believe in the first place, that it is undeniable from the evidence, that the
apparatus in question, while it could treat 6,000 liters of raw material a day, did not produce
6,000 liters a day, but on the contrary only something over 480 liters a day of rectified
alcohol of the required grade. This being true, appellant vigorously asserts that there has
been a breach of the contract in that instead of the machine having a capacity of 6,000 liters
for every 24 hours of work, it only had (a producing) capacity of 480 liters for this period of
time. Appellant would require that all the terms of the contract be given effect with special
51
emphasis upon the phrase "de un grado de 96-97 Gay Lussac." This last phrase in connection
with the previous one "de una capacidad de 6,000 litros cada 24 horas de trabajo" according
to appellant could not possibly mean that the machine was only to take in 6,000 liters for this
would be improbable in view of the express mention of the grade of the product. Appellee
on the other hand relies on the ordinary meaning of the word "capacity" as indicating
receptivity and on the preliminary negotiations as explaining the intention of the parties. The
evidence is of little assistance in resolving the question. Thus, Carlos Palanca, the manager of
Song Fo and Co., and now the successor of the company, testified that he told the agents of
Wilson and Co. that he need a machine that would produce at least 6,000 liters of alcohol a
day. The agent of Wilson and Co., James F. Loader, squarely contradicted this on the stand
and said that Palanca asked him to get on an apparatus to treat 6,000 liters.
Beginning anew, in order to reach a proper conclusion as to the meaning of clause one of the
contract, we approach the subject from two directions. Under the first view, we take up the
meaning of the words themselves. Under the second, believing that it is necessary to explain
intrinsic ambiguity in the contract, we can go, as we are permitted to do under chapter IV
title II, book IV of the Civil Code, and chapter X of the Code of Civil Procedure, especially
section 285, to evidence of the circumstances under which the agreement was made.
The terms of the contract disclose the following essential constituents: (1) A machine
Guillaume, type "C" (Agricola) as described on page 30 of the Catalogue Egrot, edition of
1907; (2) a machine of a capacity of 6,000 liters for every 24 hours of work, and (3) a machine
producing alcohol of a grade 96-97 Gay Lussac. Type C (Agricola) as described on pages 30
and 31 of the catalogue mentions the grade of alcohol guaranteed of 96-97 Gay Lussac, but
contains no mention of a capacity of 6,000 liters a day. Passing the second element for the
moment, there is no dispute in the record, or more properly speaking the plaintiff did not
prove, that the machine did not turn out alcohol of the grade 96-97 Gay Lussac. Predicated
therefore on the description to be found in the catalogue, it is plain that the defendant sold
to the plaintiff the machine there mentioned. This leaves for interpretation the one word
"capacity."
That in connection with the distilling of liquor, the word "capacity" may have different
meanings unless restricted in terminology, is disclosed by the decision of the United States
Supreme Court in Chicago Distilling Co. vs. Stone ([1891] 140 U. S., 647), where the qualifying
phrases "working capacity" and "producing capacity" are specifically" mentioned. The
ordinary meaning of the word is defined in the English Dictionaries as "ability to receive or
contain; cubic extent; carrying power or space; said of that within which any solid or fluid
may be placed, and also used figuratively; as the keg has a capacity of 10 gallons; the ship's
capacity is 1,000 tons." The ordinary meaning of the Spanish equivalent "capacidad" as
disclosed by the Spanish Dictionaries is "ambito que tiene alguna cosa y es suficiente para
contener en si otra; como el de una vasijia, arca, etc. En el vaso se debe atender la
disposicion y capacidad." Both definitions denote that which anything can receive or contain.
We think, however, that it can be laid down as a premise for further discussion that there is
intrinsic ambiguity in the contract which needs explanation. Section 285 of the Code of Civil
 52

Procedure providing that a written agreement shall be presumed to contain all the terms,
nevertheless "does not exclude other evidence of the circumstances under which the
agreement was made, or to which it relates, or to explain an intrinsic ambiguity." Turning,
therefore, to the surrounding circumstances, we find the following: Wilson and Co. in their
offer to Song Fo and Co. on June 9, 1913, while mentioning capacity, only did so in express
connection with the name and description of the machine as illustrated in the catalogue.
They furnished Song Fo and Co. with plans and specifications of the distilling apparatus; and
these describe a capacity of 6,000 liters of jus (ferment). Wilson and Co.'s order to
manufacturer, while mentioning a capacity of 6,000 liters per day, does so again in
connection with the description in the maker's catalogue. And, finally, it was stated during
the trial, and it has not been denied, that a machine capable of producing 6,000 liters of
rectified alcohol every 24 hours from nipa ferment would cost between P35,000 and
P40,000.

We are accordingly constrained to hold that the proper construction of clause 1 of the
contract, in question in connection with the conduct of the parties and surrounding
circumstances, is that Wilson and Co. were to furnish Song Fo and CO. a distilling apparatus,
type C (Agricola), as described on page 30 of the maker's catalogue, capable of receiving or
treating 6,000 liters every 24 hours of work and of producing alcohol of a grade 96-97 Gay
Lussac.

We conclude that the judgment of the trial court should be affirmed without special finding
as to costs. So ordered.

SECOND DIVISION
G.R. No. L-39972 & L-40300 August 6, 1986
VICTORIA LECHUGAS, petitioner,
vs.
HON. COURT OF APPEALS, MARINA LOZA, SALVADOR LOZA, ISIDRO LOZA, CARMELITA
LOZA, DAVID LOZA, AMPARO LOZA, ERLINDA LOZA and ALEJANDRA LOZA, respondents.
GUTIERREZ, JR., J:
This petition for review invokes the parol evidence rule as it imputes grave abuse of
discretion on the part of the appellate court for admitting and giving credence to the
testimony of the vendor regarding the sale of the disputed lot. The testimony is contrary to
the contents of the deed of sale executed by the vendor in favor of the petitioner.
The petitioner filed a complaint for forcible entry with damages against the private
respondents, alleging that the latter by means of force, intimidation, strategy and stealth,
unlawfully entered lots A and B, corresponding to the middle and northern portion of the
property owned by the petitioner known as Lot No. 5456. She alleged that they appropriated
the produce thereof for themselves, and refused to surrender the possession of the same
despite demands made by the petitioner. The complaint was dismissed. Petitioner appealed
to the then Court of First Instance (CFI) of Iloilo where the case was docketed as Civil Case
No. 5055.
While the above appeal was pending, the petitioner instituted another action before the CFI
of Iloilo for recovery and possession of the same property against the private respondents.
This case was docketed as Civil Case No. 5303. The two cases were tried jointly. After trial,
the court rendered judgment. The dispositive portion of the decision states:
Wherefore, premises considered, judgment is rendered, to wit:
a. dismissing the complaints in two cases;
b. declaring defendants except Salvador Anona and Jose Lozada as owners and lawful
possessors of the land in question together with all the improvements thereon;
c. dismissing the claim for damages of all defendants except that of Jose Lozada;
d. ordering plaintiff to pay defendant Jose Lozada the sum of P500.00 as attorney's fees and
the amount of P300.00 as litigation expenses; and
53
e. ordering plaintiff to pay the costs of both proceedings.
The petitioner appealed to the Court of Appeals but the latter sustained the dismissal of the
cases. Hence, this petition with the petitioner making the following assignments of errors:
I
THAT THE RESPONDENT COURT ERRED IN CONSIDERING PAROL EVIDENCE OVER THE
OBJECTION OF THE PETITIONER IN ORDER TO VARY THE SUBJECT MATTER OF THE DEED OF
DEFINITE SALE (EXHIBIT A) ALTHOUGH THE LAND THEREIN IS DESCRIBED AND DELIMITED BY
METES AND BOUNDS AND IdENTIFIED AS LOT NO. 5456 OF LAMBUNAO CADASTRE.
II
THAT THE RESPONDENT COURT ERRED IN CONSIDERING THE THEORY OF THE DEFENDANTS-
APPELLEES FOR THE FIRST TIME ON APPEAL THAT THE LAND DESCRIBED IN THE DEED OF
SALE (EXHIBIT A) IS LOT NO. 5522 INSTEAD OF LOT NO. 5456 OF THE LAMBUNAO CADASTRE,
THEIR ORIGINAL THEORY BEING THAT THE DEED OF SALE (EXHIBIT A) IS NULL AND VOID AB
INITIO BECAUSE LEONCIA LASANGUE CAN NOT SELL THE LAND IN QUESTION IN 1950 SINCE IT
WAS ALLEGEDLY SOLD IN 1941 BY HER FATHER EMETERIO LASANGUE.
III
THAT THE RESPONDENT COURT CANNOT REFORM THE DEED OF DEFINITE SALE BY
CHANGING ITS SUBJECT MATTER IN THE ABSENCE OF STRONG, CLEAR AND CONVINCING
EVIDENCE AND ON THE STRENGTH OF LONG TESTIMONY OF THE VENDOR AND ALTHOUGH
NO DIRECT ACTION FOR REFORMATION WAS FILED IN THE COURT OF ORIGIN.
A summary of the facts which brought about the controversy is contained in the findings of
the appellate court:
Plaintiff (petitioner) Victoria Lechugas testified that she bought the land now
subject of this litigation from Leoncia Lasangue as evidenced by a public "Deed of
Absolute Sale" which plaintiff had caused to be registered in the Office of the
Register of Deeds; preparatory to the execution of the deed Exhibit "A", plaintiff
had the land segregated from the bigger portion of 12 hectares owned by Leoncia
Lasangue by contracting a private land surveyor, the Sirilan Surveying Office, to
survey the land on December 3, 1950 and establish its boundaries, shape, form and
area in accordance with the said plan which was attached to exhibit A as Annex A
thereof. She also states that she caused the declaration of the said portion of six
hectares subject of Exhibit A in her name beginning the year 1951 under tax
declaration No. 7912, paid taxes on the same land, and has taken possession of the
land through her tenants Jesus Leoncio, Roberta Losarita and Simeon Guinta, who
shared one-half of the produce of the riceland with her, while she shouldered some

of the expenses in cultivation and seeds, and one-third share in other crops, like
coffee beans, bamboos, coconuts, corn and the like.
Plaintiff's declaration is corroborated by her tenant Simeon Guinta who testifies
that the land subject of the complaint was worked on by him 1954 when its former
tenant, Roberto Lazarita, now deceased, left the land. As tenant thereof, he
planted rice, corn peanuts, coffee, and other minor products, sharing the same
with the owner, plaintiff Victoria Lechugas; that on June 14, 1958, while witness
was plowing Lot A preparatory to rice planting, defendants entered the land and
forced him to stop his work. Salvador Anona and Carmelita Losa, particularly, told
witness that if he (witness) would sign an affidavit recognizing them as his
landlords, they would allow him to continue plowing the land. On that occasion,
Salvador Anona, David Loza and Jose Loza were carrying unsheathed bolos, which
made this witness very afraid, so much so that he left the land and reported the
matter to Victoria Lechugas who reportedly went to the Chief of Police of
Lambunao to ask the latter to intervene. The advise however of the chief of police,
who responded to the call of plaintiff, was not heeded by the defendants who
stayed adamantly on Lot A and refused to surrender the possession thereof to
plaintiff appropriating the harvest to themselves. This witness further declares that
on June 24, 1958, defendants entered Lot B of the land in question, situated on the
northern portion, and cut the bamboo poles growing thereof counted by plaintiff's
brother and overseer in the land, Bienvenido Laranja, to be 620 bamboo poles all in
all. Despite the warning of the overseer Laranja, defendants did not stop cutting
the bamboos, and they remained on the land, refusing to leave the same. To top it
all, in June of 1959, defendants, not contended with just occupying the middle and
northern portions of the land (Lots A and B), grabbed the whole parcel containing
six hectares to the damage and prejudice of herein plaintiff, so that plaintiff was
left with no other recourse but to file Civil Case No. 5303 for ownership, recovery
of possession and damages.
Defendants, on the other hand, maintain that the land which plaintiff bought from
Leoncia Lasangue in 1950 as evidenced by the deed exhibit A, is different from the
land now subject of this action, and described in paragraph 2 of plaintiff's
complaint. To prove this point, defendants called as their first witness plaintiff
herself (pp. 6167, t.s.n., Tuble), to elicit from her the reason why it was that
although her vendor Leoncia Lasangue was also residing at the municipality of
Lambunao, Iloilo, plaintiff did not care to call her to the witness stand to testify
regarding the Identity of the land which she (plaintiff) bought from said vendor
Leoncia Lasangue; to which query witness Lechugas countered that she had tried to
call her vendor, but the latter refused, saying that she (Lasangue) had already
testified in plaintiff's favor in the forcible entry case in the Justice of the Peace
Court. In connection with her testimony regarding the true Identity of the land
plaintiff, as witness of defendants, stated that before the execution of Exhibit "A"
on December 8, 1950 the lot in question was surveyed (on December 3, 1950) by
the Sirilan Surveyor Company after due notice to the boundary owners including
Leoncia Lasangue.
54
Defendant's evidence in chief, as testified to by Carmelita Lozada (pp. 100-130, t.s.n.,
Trespeces; pp. 131-192, t.s.n., Tuble) shows that on April 6, 1931 Hugo Loza father of
Carmelita Loza and predecessor-in-interest of the rest of the heirs of herein defendants,
(with the exception of Jose Loza and Salvador Anona) purchased a parcel of land from one
Victorina Limor as evidenced by the deed "Venta Definitiva" (exhibit 3, pp. 49-50, folder of
exhibits). This land, containing 53,327 square meters is bounded on the north by Ramon
Lasangue, on the south by Emeterio Lasangue and covered by tax declaration No. 7346
(exhibit 3-9, p. 67, Id.) in vendor's name; that immediately after the sale, Hugo Loza took
possession of the said parcel of land and declared the same in his name (exhibit 3-10, p. 67,
folder of exhibits) starting the year 1935. On March 17, 1941, Hugo Loza bought from
Emeterio Lasangue a parcel of land with an area of four hectares more or less, adjoining the
land he (Loza) had earlier bought from Victoria Limor, and which sale was duly evidenced by
a public instrument (exhibit 2, pp. 35-36, folder of exhibits). This property had the following
boundaries, to wit: on the north by Eladio Luno, on the south, by Simeon Lasangue, on the
west, by Gregorio Militar and Emeterio Lasangue and on the east, by Maximo Lasangue and
Hipolito Lastica (exhibit 2, exhibit 2-B, p. 37, Id). After the execution of the deed of sale,
Exhibit 2, Hugo Loza cause the transfer of the declaration in his own name (tax declaration
No. 8832, exh. 2-C, p. 38, Id.) beginning 1945, and started paying the taxes on the land
(exhibits 2-d to 2-i, pp. 39-44, Id.). These two parcels of land (that purchased by Hugo Loza in
1941 from Emeterio Lasangue, and a portion of that bought by him from Victoria Limor
sometime in 1931) were consolidated and designated, during the cadastral survey of
Lambunao, Iloilo in 1959 as Lot No. 5456; while the remaining portion of the lot bought from
Victorina Limor, adjoining Lot 5456 on the east, was designated as Lot No. 5515 in the name
of the Heirs of Hugo Loza. Defendants claim that the lot bought by plaintiff from Leoncia
Lasangue as evidenced by exhibit A, is situated south of the land now subject of this action
and designated during cadastral survey of Lambunao as Lot No. 5522, in the name of Victoria
Lechugas.
Leoncia Lasangue, plaintiff's vendor in exhibit A, testifying for defendants (pp. 182-115, t.s.n.,
Tambagan; pp. 69-88, t.s.n., Tuble) declared that during his lifetime her father, Emeterio
Lasangue, owned a parcel of land in Lambunao, Iloilo, containing an area of 36 hectares; that
said Emeterio Lasangue sold a slice of 4 hectares of this property to Hugo Loza evidenced by
a deed of sale (Exh. 2) dated March 17, 1941; that other sales were made to other persons,
leaving only some twelve hectares out of the original 36; that these 12 hectares were
transferred by her parents in her (witness) name, being the only child and heir; that on
December 8, 1950, she (Leoncia Lasangue) sold six hectares of her inherited property to
Victoria Lechugas under a public instrument (exhibit A) which was prepared at the instance
of Victoria Lechugas and thumbmarked by herself (the vendor).
Refuting plaintiff's contention that the land sold to her is the very land under question,
vendor Leoncia Lasangue testifies that:
Q. But Victoria Lechugas declared here that, by means of this document, exhibit 'A', you sold
to her this very land in litigation; while you declared here now that this land in litigation was

not included in the sale you made of another parcel of land in her favor. What do you say
about that?
A. I only sold six (6) hectares to her.
Q. And that was included in this land in litigation?
A. No.
Q. Did you tell her where that land you were selling to her was situated?
A. On the South.
Q. South side of what land, of the land in litigation?
A. The land I sold to her is south of the land in litigation.
Q. What portion of these thirty-six (36) hectares of land did you sell actually, according to
your agreement with Victoria Lechugas, and was it inside the thirty-six (36) hectares of land
or a portion on one of the sides of thirty-six (36) hectares?
A. It is on the edge of the whole land.
Q. Where is that edge? on the north, east, west or south?
A . This edge. (witness indicating the lower edge of the piece of paper shown into her)
Q. Do you know what is east, that is, the direction where the sun rises?
A. I know what is east.
Q. Do you know where the sun sets ?
A. The sun sets on the west.
Q. If you are standing in the middle of your land containing thirty-six (36) hectares and facing
the east, that is, the direction where the sun rises, where is that portion of land sold to
Victoria Lechugas, on your left, on your right, front of you or behind you?
A. On my right side. (Witness indicating south). (Testimony of Leoncia Lasangue, pp. 209-211,
rollo) (emphasis supplied).
55
On the basis of the above findings and the testimony of vendor Leoncia Lasangue herself,
who although illiterate was able to specifically point out the land which she sold to the
petitioner, the appellate court upheld the trial court's decision except that the deed of sale
(Exhibit A) was declared as not null and void ab initio insofar as Leoncia Lasangue was
concerned because it could pass ownership of the lot in the south known as Lot No. 5522 of
the Lambunao Cadastre which Leoncia Lasangue intended to sell and actually sold to her
vendee, petitioner Victoria Lechugas.
In her first assignment of error, the petitioner contends that the respondent Court had no
legal justification when it subjected the true intent and agreement to parol evidence over the
objection of petitioner and that to impugn a written agreement, the evidence must be
conclusive. Petitioner maintains, moreover, that the respondent Court relied so much on the
testimony of the vendor who did not even file a case for the reformation of Exhibit A.
The contentions are without merit.
The appellate court acted correctly in upholding the trial court's action in admitting the
testimony of Leoncia Lasangue. The petitioner claims that Leoncia Lasangue was the vendor
of the disputed land. The petitioner denies that Leoncia Lasangue sold Lot No. 5522 to her.
She alleges that this lot was sold to her by one Leonora Lasangue, who, however, was never
presented as witness in any of the proceedings below by herein petitioner.
As explained by a leading commentator on our Rules of Court, the parol evidence rule does
not apply, and may not properly be invoked by either party to the litigation against the other,
where at least one of the parties to the suit is not party or a privy of a party to the written
instrument in question and does not base a claim on the instrument or assert a right
originating in the instrument or the relation established thereby. (Francisco on Evidence, Vol.
VII, part I of the Rules of Court, p. 155 citing 32 C.J.S. 79.)
In Horn v. Hansen (57 N.W. 315), the court ruled:
...and the rule therefore applies, that as between parties to a written agreement,
or their privies, parol evidence cannot be received to contradict or vary its terms.
Strangers to a contract are, of course, not bound by it, and the rule excluding
extrinsic evidence in the construction of writings is inapplicable in such cases; and it
is relaxed where either one of the parties between whom the question arises is a
stranger to the written agreement, and does not claim under or through one who is
party to it. In such case the rule is binding upon neither. ...
In the case of Camacho v. Municipality of Baliuag, 28 Phil. 466, this Court held that parol
evidence which was introduced by the municipality was competent to defeat the terms of
the plaintiff's deed which the latter executed with the Insular Government. In his concurring
opinion, Justice Moreland stated:

It should be noted in the first place, that there is no written instrument between
the plaintiff and the municipality, that is, between the parties to the action; and
there is, therefore, no possibility of the question arising as to the admissibility of
parol evidence to vary or contradict the terms of an instrument. The written
instrument that is, the conveyance on which plaintiff bases his action was between
the Insular Government and the plaintiff, and not between the municipality and the
plaintiff; and therefore, there can arise, as between the plaintiff and defendant no
question relative to the varying or contradicting the terms of a written instrument
between them ...
The petitioner's reliance on the parol evidence rule is misplaced. The rule is not applicable
where the controversy is between one of the parties to the document and third persons. The
deed of sale was executed by Leoncia Lasangue in favor of Victoria Lechugas. The dispute
over what was actually sold is between petitioner and the private respondents. In the case at
bar, through the testimony of Leoncia Lasangue, it was shown that what she really intended
to sell and to be the subject of Exhibit A was Lot No. 5522 but not being able to read and
write and fully relying on the good faith of her first cousin, the petitioner, she just placed her
thumbmark on a piece of paper which petitioner told her was the document evidencing the
sale of land. The deed of sale described the disputed lot instead.
This fact was clearly shown in Lasangue's testimony:
Q. And how did you know that that was the description of the land that you wanted to sell to
Victoria Lechugas?
R. I know that because that land came from me.
S. But how were you able to read the description or do you know the description?
A. Because, since I do not know how to read and write and after the document was prepared,
she made me sign it. So I just signed because I do not know how to read.
Q. What explanation did she make to you?
A. She said to me, 'Manang, let us have a document prepared for you to sign on the land you
sold to me.' So, after the document was prepared, I signed.
Q. Did you tell her where that land you were selling to her was situated?
A. On the South.
Q. South side of what land, of the land in litigation?
56
A. The land I sold to her is south of the land in litigation.
Q. Did you tell her that before preparing the document you signed?
A. Yes, I told her so because I had confidence in her because she is my first cousin. (pp. 198-
207, rollo)
From the foregoing, there can be no other conclusion but that Lasangue did not intend to sell
as she could not have sold, a piece of land already sold by her father to the predecessor-in-
interest of the respondents.
The fact that vendor Lasangue did not bring an action for the reformation of Exhibit "A" is of
no moment. The undisputed fact is that the respondents have timely questioned the validity
of the instrument and have proven that, indeed Exhibit "A" does not reflect the true
intention of the vendor.
There is likewise no merit in the contention of the petitioner that the respondents changed
their theory on appeal.
Respondents, from the very start, had questioned and denied Leoncia Lasangue's capacity to
sell the disputed lot to petitioner. It was their contention that the lot was sold by Leoncia's
father Emeterio Lasangue to their father, Hugo Loza wayback in 1941 while the alleged sale
by Leoncia to the petitioner took place only in 1950. In essence, therefore, the respondents
were already attacking the validity of Exhibit "A". Moreover, although the prior sale of the lot
to their father may have been emphasized in their defenses in the civil cases filed against
them by the petitioner in the lower court, nevertheless in their affirmative defense, the
respondents already raised doubt on the true intention of Leoncia Lasangue in signing Exhibit
"A" when they alleged that..." Leoncia Lasangue, publicly, and in writing repudiated said
allegation and pretension of the plaintiff, to the effect that the parcel of land now in litigation
in the present case "WAS NOT INCLUDED in the sale she executed in favor of the plaintiff ... .
Consequently, petitioner cannot impute grave abuse on the part of the appellate court and
state that it allowed a change of theory by the respondents for the first time on appeal for in
reality, there was no such change. The third issue raised by the petitioner has no merit. There
is strong, clear, and convincing evidence as to which lot was actually sold to her. We see no
reason to reverse the factual findings of both the Court of First Instance and the Court of
Appeals on this point. The "reformation" which the petitioner questions was, in fact,
intended to favor her. Instead of declaring the deed of sale null and void for all purposes, the
Court upheld its having passed ownership of Lot No. 5522 to the petitioner. WHEREFORE, IN
VIEW OF THE FOREGOING, the petition is hereby DISMISSED for lack of merit with costs
against the petitioner. SO ORDERED.