RAFAEL ARSENIO S. DIZON, in his capacity G.R. No. 140944 Gonzales (Atty.

. No. 140944 Gonzales (Atty. Gonzales) to sign and file on behalf of the Estate the required
as the Judicial Administrator of the Estate of estate tax return and to represent the same in securing a Certificate of Tax
the deceased JOSE P. FERNANDEZ, Present: Clearance. Eventually, on April 17, 1990, Atty. Gonzales wrote a
Petitioner, letter[9] addressed to the BIR Regional Director for San Pablo City and filed the
YNARES-SANTIAGO, J., estate tax return[10] with the same BIR Regional Office, showing therein a NIL
Chairperson, estate tax liability, computed as follows:
- versus - AUSTRIA-MARTINEZ,
CHICO-NAZARIO,
NACHURA, and
COURT OF TAX APPEALS REYES, JJ.
and COMMISSIONER OF INTERNAL COMPUTATION OF TAX
REVENUE, Promulgated:
Respondents. Conjugal Real Property (Sch. 1) P10,855,020.00
April 30, 2008 Conjugal Personal Property (Sch.2) 3,460,591.34
Taxable Transfer (Sch. 3)
Gross Conjugal Estate 14,315,611.34
Less: Deductions (Sch. 4) 187,822,576.06
Net Conjugal Estate NIL
Less: Share of Surviving Spouse NIL .
Net Share in Conjugal Estate NIL
xxx
Net Taxable Estate NIL .
x------------------------------------------------------------------------------------x Estate Tax Due NIL .[11]

DECISION
NACHURA, J.:
Before this Court is a Petition for Review on Certiorari[1] under Rule 45 of the Rules
of Civil Procedure seeking the reversal of the Court of Appeals (CA)
Decision[2] dated April 30, 1999 which affirmed the Decision[3] of the Court of Tax
Appeals (CTA) dated June 17, 1997.[4]
The Facts
On November 7, 1987, Jose P. Fernandez (Jose) died. Thereafter, a petition for
the probate of his will[5] was filed with Branch 51 of the Regional Trial Court (RTC)
of Manila(probate court).[6] The probate court then appointed retired Supreme
Court Justice Arsenio P. Dizon (Justice Dizon) and petitioner, Atty. Rafael Arsenio
P. Dizon (petitioner) as Special and Assistant Special Administrator, respectively,
of the Estate of Jose (Estate). In a letter[7] dated October 13, 1988, Justice
Dizon informed respondent Commissioner of the Bureau of Internal Revenue (BIR)
of the special proceedings for the Estate.
Petitioner alleged that several requests for extension of the period to file the
required estate tax return were granted by the BIR since the assets of the estate,
as well as the claims against it, had yet to be collated, determined and identified.
Thus, in a letter[8] dated March 14, 1990, Justice Dizon authorized Atty. Jesus M.
On April 27, 1990, BIR Regional Director for San Pablo City, Osmundo
G. Umali issued Certification Nos. 2052[12] and 2053[13] stating that the taxes due
on the transfer of real and personal properties[14] of Jose had been fully paid and
said properties may be transferred to his heirs. Sometime in August 1990, Justice
Dizon passed away. Thus, on October 22, 1990, the probate court appointed
petitioner as the administrator of the Estate.[15]
Petitioner requested the probate court's authority to sell several
properties forming part of the Estate, for the purpose of paying its creditors,
namely: Equitable Banking Corporation (P19,756,428.31), Banque de L'Indochine
et. de Suez (US$4,828,905.90 as of January 31, 1988), Manila Banking
Corporation (P84,199,160.46 as of February 28, 1989) and State Investment
House, Inc. (P6,280,006.21). Petitioner manifested that Manila Bank, a major
creditor of the Estate was not included, as it did not file a claim with the probate
court since it had security over several real estate properties forming part of the
Estate.[16]
However, on November 26, 1991, the Assistant Commissioner for
Collection of the BIR, Themistocles Montalban, issued Estate Tax Assessment
Notice No. FAS-E-87-91-003269,[17] demanding the payment of P66,973,985.40
as deficiency estate tax, itemized as follows:
Deficiency Estate Tax- 1987
 of all the properties of the
Estate tax P31,868,414.48 deceased (p. 106, BIR records); "C"
25% surcharge- late filing 7,967,103.62
late payment 7,967,103.62 4. Attachment to Exh. "C" which
Interest 19,121,048.68 is the detailed and complete
Compromise-non filing 25,000.00 listing of the properties of
non payment 25,000.00 the deceased (pp. 89-105, BIR rec.); "C-1" to "C-17"
no notice of death 15.00
no CPA Certificate 300.00 5. Claims against the estate filed
by Equitable Banking Corp. with
Total amount due & collectible P66,973,985.40[18] the probate Court in the amount
of P19,756,428.31 as of March 31,
1988, together with the Annexes
In his letter[19] dated December 12, 1991, Atty. Gonzales moved for the to the claim (pp. 64-88, BIR records); "D" to "D-24"
reconsideration of the said estate tax assessment. However, in her
letter[20] dated April 12, 1994, the BIR Commissioner denied the request and 6. Claim filed by Banque de L'
reiterated that the estate is liable for the payment of P66,973,985.40 as deficiency Indochine et de Suez with the
estate tax. On May 3, 1994, petitioner received the letter of denial. On June 2, probate Court in the amount of
1994, petitioner filed a petition for review[21] before respondent CTA. Trial on the US $4,828,905.90 as of January 31,
merits ensued. 1988 (pp. 262-265, BIR records); "E" to "E-3"

7. Claim of the Manila Banking

As found by the CTA, the respective parties presented the following pieces of Corporation (MBC) which as of
evidence, to wit: November 7, 1987 amounts to
P65,158,023.54, but recomputed
In the hearings conducted, petitioner did not present testimonial as of February 28, 1989 at a
evidence but merely documentary evidence consisting of the total amount of P84,199,160.46;
following: together with the demand letter
from MBC's lawyer (pp. 194-197,
Nature of Document (sic) Exhibits BIR records); "F" to "F-3"

1. Letter dated October 13, 1988 8. Demand letter of Manila Banking

from Arsenio P. Dizon addressed Corporation prepared by Asedillo,
to the Commissioner of Internal Ramos and Associates Law Offices
Revenue informing the latter of addressed to Fernandez Hermanos,
the special proceedings for the Inc., represented by Jose P.
settlement of the estate (p. 126, Fernandez, as mortgagors, in the
BIR records); "A" total amount of P240,479,693.17
as of February 28, 1989
2. Petition for the probate of the (pp. 186-187, BIR records); "G" & "G-1"
will and issuance of letter of
administration filed with the 9. Claim of State Investment
Regional Trial Court (RTC) of House, Inc. filed with the
Manila, docketed as Sp. Proc. RTC, Branch VII of Manila,
No. 87-42980 (pp. 107-108, BIR docketed as Civil Case No.
records); "B" & "B-1 86-38599 entitled "State
Investment House, Inc.,
3. Pleading entitled "Compliance" Plaintiff, versus Maritime
filed with the probate Court Company Overseas, Inc. and/or
submitting the final inventory Jose P. Fernandez, Defendants,"
(pp. 200-215, BIR records); "H" to "H-16"
1. Estate Tax Return prepared by
10. Letter dated March 14, 1990 the BIR; p. 138
of Arsenio P. Dizon addressed
to Atty. Jesus M. Gonzales, 2. Signatures of Ma. Anabella
(p. 184, BIR records); "I" Abuloc and Alberto Enriquez,
Jr. appearing at the lower
11. Letter dated April 17, 1990 Portion of Exh. "1"; -do-
from J.M. Gonzales addressed
to the Regional Director of 3. Memorandum for the Commissioner,
BIR in San Pablo City dated July 19, 1991, prepared by
(p. 183, BIR records); "J" revenue examiners, Ma. Anabella A.
Abuloc, Alberto S. Enriquez and
12. Estate Tax Return filed by Raymund S. Gallardo; Reviewed by
the estate of the late Jose P. Maximino V. Tagle pp. 143-144
Fernandez through its authorized
representative, Atty. Jesus M. 4. Signature of Alberto S.
Gonzales, for Arsenio P. Dizon, Enriquez appearing at the
with attachments (pp. 177-182, lower portion on p. 2 of Exh. "2"; -do-
BIR records); "K" to "K-5"
5. Signature of Ma. Anabella A.
Abuloc appearing at the
13. Certified true copy of the lower portion on p. 2 of Exh. "2"; -do-
Letter of Administration
issued by RTC Manila, Branch 6. Signature of Raymund S.
51, in Sp. Proc. No. 87-42980 Gallardo appearing at the
appointing Atty. Rafael S. Lower portion on p. 2 of Exh. "2"; -do-
Dizon as Judicial Administrator
of the estate of Jose P. 7. Signature of Maximino V.
Fernandez; (p. 102, CTA records) Tagle also appearing on
and "L" p. 2 of Exh. "2"; -do-

14. Certification of Payment of 8. Summary of revenue

estate taxes Nos. 2052 and Enforcement Officers Audit
2053, both dated April 27, 1990, Report, dated July 19, 1991; p. 139
issued by the Office of the
Regional Director, Revenue 9. Signature of Alberto
Region No. 4-C, San Pablo Enriquez at the lower
City, with attachments portion of Exh. "3"; -do-
(pp. 103-104, CTA records.). "M" to "M-5"
10. Signature of Ma. Anabella A.
Respondent's [BIR] counsel presented on June 26, 1995 Abuloc at the lower
one witness in the person of Alberto Enriquez, who was one portion of Exh. "3"; -do-
of the revenue examiners who conducted the investigation
on the estate tax case of the late Jose P. Fernandez. In the 11. Signature of Raymond S.
course of the direct examination of the witness, he Gallardo at the lower
identified the following: portion of Exh. "3"; -do-

Documents/ 12. Signature of Maximino

Signatures BIR Record V. Tagle at the lower
 portion of Exh. "3"; -do- Add: Penalties for-No notice of death 15.00
No CPA certificate 300.00
13. Demand letter (FAS-E-87-91-00), Total deficiency estate tax P 37,419,493.71
signed by the Asst. Commissioner =============
for Collection for the Commissioner
of Internal Revenue, demanding exclusive of 20% interest from due date of its payment until full
payment of the amount of payment thereof
P66,973,985.40; and p. 169 [Sec. 283 (b), Tax Code of 1987].[25]

14. Assessment Notice FAS-E-87-91-00 pp. 169-170[22]

Thus, the CTA disposed of the case in this wise:

The CTA's Ruling

On June 17, 1997, the CTA denied the said petition for review. Citing this Court's
ruling in Vda. de Oate v. Court of Appeals,[23] the CTA opined that the
aforementioned pieces of evidence introduced by the BIR were admissible in
evidence. The CTA ratiocinated:
Although the above-mentioned documents were not formally
offered as evidence for respondent, considering that respondent
has been declared to have waived the presentation thereof
during the hearing on March 20, 1996, still they could be
considered as evidence for respondent since they were properly
identified during the presentation of respondent's witness,
whose testimony was duly recorded as part of the records of this
case. Besides, the documents marked as respondent's exhibits
formed part of the BIR records of the case.[24]
WHEREFORE, viewed from all the foregoing, the Court finds the
petition unmeritorious and denies the same. Petitioner and/or
the heirs of Jose P. Fernandez are hereby ordered to pay to
respondent the amount of P37,419,493.71 plus 20% interest
from the due date of its payment until full payment thereof as
estate tax liability of the estate of Jose P. Fernandez who died
on November 7, 1987.
SO ORDERED.[26]
Aggrieved, petitioner, on March 2, 1998, went to the CA via a petition for review. [27]
The CA's Ruling

On April 30, 1999, the CA affirmed the CTA's ruling. Adopting in full the CTA's
findings, the CA ruled that the petitioner's act of filing an estate tax return with the
Nevertheless, the CTA did not fully adopt the assessment made by the BIR and it BIR and the issuance of BIR Certification Nos. 2052 and 2053 did not deprive the
came up with its own computation of the deficiency estate tax, to wit: BIR Commissioner of her authority to re-examine or re-assess the said return filed
on behalf of the Estate.[28]
Conjugal Real Property P 5,062,016.00
Conjugal Personal Prop. 33,021,999.93
Gross Conjugal Estate 38,084,015.93 On May 31, 1999, petitioner filed a Motion for Reconsideration [29] which the CA
Less: Deductions 26,250,000.00 denied in its Resolution[30] dated November 3, 1999.
Net Conjugal Estate P 11,834,015.93
Less: Share of Surviving Spouse 5,917,007.96 Hence, the instant Petition raising the following issues:
Net Share in Conjugal Estate P 5,917,007.96
Add: Capital/Paraphernal 1. Whether or not the admission of evidence which were not
Properties P44,652,813.66 formally offered by the respondent BIR by the Court of Tax
Less: Capital/Paraphernal Appeals which was subsequently upheld by the Court of
Deductions 44,652,813.66 Appeals is contrary to the Rules of Court and rulings of this
Net Taxable Estate P 50,569,821.62 Honorable Court;
============
2. Whether or not the Court of Tax Appeals and the Court of
Estate Tax Due P 29,935,342.97 Appeals erred in recognizing/considering the estate tax
Add: 25% Surcharge for Late Filing 7,483,835.74 return prepared and filed by respondent BIR knowing that the
 probate court appointed administrator of the estate of Jose
P. Fernandez had previously filed one as in fact, BIR
Certification Clearance Nos. 2052 and 2053 had been issued
in the estate's favor;
3. Whether or not the Court of Tax Appeals and the Court of
Appeals erred in disallowing the valid and enforceable claims
of creditors against the estate, as lawful deductions despite
clear and convincing evidence thereof; and
4. Whether or not the Court of Tax Appeals and the Court of
Appeals erred in validating erroneous double imputation of
values on the very same estate properties in the estate tax
return it prepared and filed which effectively bloated the
estate's assets.[31]
The petitioner claims that in as much as the valid claims of creditors against the
Estate are in excess of the gross estate, no estate tax was due; that the lack of a
formal offer of evidence is fatal to BIR's cause; that the doctrine laid down in Vda.
de Oate has already been abandoned in a long line of cases in which the Court
held that evidence not formally offered is without any weight or value; that Section
34 of Rule 132 of the Rules on Evidence requiring a formal offer of evidence is
mandatory in character; that, while BIR's witness Alberto Enriquez (Alberto) in his
testimony before the CTA identified the pieces of evidence aforementioned such
that the same were marked, BIR's failure to formally offer said pieces of evidence
and depriving petitioner the opportunity to cross-examine Alberto, render the same
inadmissible in evidence; that assuming arguendo that the ruling in Vda. de
Oate is still applicable, BIR failed to comply with the doctrine's requisites because
the documents herein remained simply part of the BIR records and were not duly
incorporated in the court records; that the BIR failed to consider that although the
actual payments made to the Estate creditors were lower than their respective
claims, such were compromise agreements reached long after the Estate's liability
had been settled by the filing of its estate tax return and the issuance of
BIR Certification Nos. 2052 and 2053; and that the reckoning date of the claims
against the Estate and the settlement of the estate tax due should be at the time
the estate tax return was filed by the judicial administrator and the issuance of said
BIR Certifications and not at the time the aforementioned Compromise
Agreements were entered into with the Estate's creditors. [32]
On the other hand, respondent counters that the documents, being part of the
records of the case and duly identified in a duly recorded testimony are considered
evidence even if the same were not formally offered; that the filing of the estate tax
return by the Estate and the issuance of BIR Certification Nos. 2052 and 2053 did
not deprive the BIR of its authority to examine the return and assess the estate
tax; and that the factual findings of the CTA as affirmed by the CA may no longer
be reviewed by this Court via a petition for review.[33]
The Issues
There are two ultimate issues which require resolution in this case:
First. Whether or not the CTA and the CA gravely erred in allowing the admission
of the pieces of evidence which were not formally offered by the BIR; and
Second. Whether or not the CA erred in affirming the CTA in the latter's
determination of the deficiency estate tax imposed against the Estate.
The Courts Ruling
The Petition is impressed with merit.
Under Section 8 of RA 1125, the CTA is categorically described as a court of
record. As cases filed before it are litigated de novo, party-litigants shall prove
every minute aspect of their cases. Indubitably, no evidentiary value can be given
the pieces of evidence submitted by the BIR, as the rules on documentary
evidence require that these documents must be formally offered before the
CTA.[34] Pertinent is Section 34, Rule 132 of the Revised Rules on Evidence which
reads:
SEC. 34. Offer of evidence. The court shall consider no
evidence which has not been formally offered. The purpose for
which the evidence is offered must be specified.
The CTA and the CA rely solely on the case of Vda. de Oate, which
reiterated this Court's previous rulings in People v. Napat-a[35] and People v.
Mate[36] on the admission and consideration of exhibits which were not formally
offered during the trial. Although in a long line of cases many of which were
decided after Vda. de Oate, we held that courts cannot consider evidence which
has not been formally offered,[37] nevertheless, petitioner cannot validly assume
that the doctrine laid down in Vda. de Oate has already been abandoned.
Recently, in Ramos v. Dizon,[38] this Court, applying the said doctrine, ruled that
the trial court judge therein committed no error when he admitted and considered
the respondents' exhibits in the resolution of the case, notwithstanding the fact that
the same
were not formally offered. Likewise, in Far East Bank & Trust Company v.
Commissioner of Internal Revenue,[39] the Court made reference to said doctrine
in resolving the issues therein. Indubitably, the doctrine laid down in Vda. De
Oate still subsists in this jurisdiction. In Vda. de Oate, we held that:
From the foregoing provision, it is clear that for evidence to be
considered, the same must be formally offered. Corollarily, the
mere fact that a particular document is identified and marked as
an exhibit does not mean that it has already been offered as part
of the evidence of a party. In Interpacific Transit, Inc. v.
Aviles [186 SCRA 385], we had the occasion to make a
 distinction between identification of documentary evidence and
its formal offer as an exhibit. We said that the first is done in the
course of the trial and is accompanied by the marking of the
evidence as an exhibit while the second is done only when the
party rests its case and not before. A party, therefore, may opt
to formally offer his evidence if he believes that it will advance
his cause or not to do so at all. In the event he chooses to do
the latter, the trial court is not authorized by the Rules to
consider the same.
However, in People v. Napat-a [179 SCRA 403] citing People v.
Mate [103 SCRA 484], we relaxed the foregoing rule and
allowed evidence not formally offered to be admitted and
considered by the trial court provided the following
requirements are present, viz.: first, the same must have
been duly identified by testimony duly recorded and,
second, the same must have been incorporated in the
records of the case.[40]
From the foregoing declaration, however, it is clear that Vda. de Oate is
merely an exception to the general rule. Being an exception, it may be applied only
when there is strict compliance with the requisites mentioned therein; otherwise,
the general rule in Section 34 of Rule 132 of the Rules of Court should prevail.
In this case, we find that these requirements have not been satisfied. The assailed
pieces of evidence were presented and marked during the trial particularly when
Alberto took the witness stand. Alberto identified these pieces of evidence in his
direct testimony.[41] He was also subjected to cross-examination and re-cross
examination by petitioner.[42]But Albertos account and the exchanges between
Alberto and petitioner did not sufficiently describe the contents of the said pieces
of evidence presented by the BIR. In fact, petitioner sought that the lead examiner,
one Ma. Anabella A. Abuloc, be summoned to testify, inasmuch as Alberto was
incompetent to answer questions relative to the working papers. [43] The lead
examiner never testified. Moreover, while Alberto's testimony identifying the BIR's
evidence was duly recorded, the BIR documents themselves were not
incorporated in the records of the case.
A common fact threads through Vda. de Oate and Ramos that does not exist at all
in the instant case. In the aforementioned cases, the exhibits were marked at the
pre-trial proceedings to warrant the pronouncement that the same were duly
incorporated in the records of the case. Thus, we held in Ramos:
In this case, we find and so rule that these requirements have
been satisfied. The exhibits in question were presented and
marked during the pre-trial of the case thus, they have been
incorporated into the records. Further, Elpidio himself
explained the contents of these exhibits when he was
interrogated by respondents' counsel...
xxxx
But what further defeats petitioner's cause on this issue is that
respondents' exhibits were marked and admitted during the pre-
trial stage as shown by the Pre-Trial Order quoted earlier.[44]
While the CTA is not governed strictly by technical rules of evidence, [45] as rules of
procedure are not ends in themselves and are primarily intended as tools in the
administration of justice, the presentation of the BIR's evidence is not a mere
procedural technicality which may be disregarded considering that it is the only
means by which the CTA may ascertain and verify the truth of BIR's claims against
the Estate.[46] The BIR's failure to formally offer these pieces of evidence, despite
CTA's directives, is fatal to its cause.[47] Such failure is aggravated by the fact that
not even a single reason was advanced by the BIR to justify such fatal omission.
This, we take against the BIR.
Per the records of this case, the BIR was directed to present its evidence [48] in the
hearing of February 21, 1996, but BIR's counsel failed to appear. [49] The CTA
denied petitioner's motion to consider BIR's presentation of evidence as waived,
with a warning to BIR that such presentation would be considered waived if BIR's
evidence would not be presented at the next hearing. Again, in the hearing of
March 20, 1996, BIR's counsel failed to appear.[50] Thus, in its Resolution[51] dated
March 21, 1996, the CTA considered the BIR to have waived presentation of its
evidence. In the same Resolution, the parties were directed to file their respective
memorandum. Petitioner complied but BIR failed to do so. [52] In all of these
proceedings, BIR was duly notified. Hence, in this case, we are constrained to
apply our ruling in Heirs of Pedro Pasag v. Parocha:[53]
A formal offer is necessary because judges are
mandated to rest their findings of facts and their judgment only
and strictly upon the evidence offered by the parties at the trial.
Its function is to enable the trial judge to know the purpose or
purposes for which the proponent is presenting the evidence.
On the other hand, this allows opposing parties to examine the
evidence and object to its admissibility. Moreover, it facilitates
review as the appellate court will not be required to review
documents not previously scrutinized by the trial court.
Strict adherence to the said rule is not a trivial matter. The Court
in Constantino v. Court of Appeals ruled that the formal offer
of one's evidence is deemed waived after failing to submit
it within a considerable period of time. It explained that the
court cannot admit an offer of evidence made after a lapse
of three (3) months because to do so would "condone an
inexcusable laxity if not non-compliance with a court order
which, in effect, would encourage needless delays and
derail the speedy administration of justice."
 Applying the aforementioned principle in this case, we find that
the trial court had reasonable ground to consider that petitioners
had waived their right to make a formal offer of documentary or
object evidence. Despite several extensions of time to make
their formal offer, petitioners failed to comply with their
commitment and allowed almost five months to lapse before
finally submitting it. Petitioners' failure to comply with the
rule on admissibility of evidence is anathema to the
efficient, effective, and expeditious dispensation of justice.
Having disposed of the foregoing procedural issue, we proceed to discuss the
merits of the case.
Ordinarily, the CTA's findings, as affirmed by the CA, are entitled to the
highest respect and will not be disturbed on appeal unless it is shown that the lower
courts committed gross error in the appreciation of facts. [54] In this case, however,
we find the decision of the CA affirming that of the CTA tainted with palpable error.
It is admitted that the claims of the Estate's aforementioned creditors have been
condoned. As a mode of extinguishing an obligation, [55] condonation or remission
of debt[56] is defined as:
an act of liberality, by virtue of which, without receiving any
equivalent, the creditor renounces the enforcement of the
obligation, which is extinguished in its entirety or in that part or
aspect of the same to which the remission refers. It is an
essential characteristic of remission that it be gratuitous, that
there is no equivalent received for the benefit given; once such
equivalent exists, the nature of the act changes. It may become
dation in payment when the creditor receives a thing different
from that stipulated; or novation, when the object or principal
conditions of the obligation should be changed; or compromise,
when the matter renounced is in litigation or dispute and in
exchange of some concession which the creditor receives. [57]
Verily, the second issue in this case involves the construction of Section 79 [58] of
the National Internal Revenue Code[59] (Tax Code) which provides for the
allowable deductions from the gross estate of the decedent. The specific question
is whether the actual claims of the aforementioned creditors may be fully allowed
as deductions from the gross estate of Jose despite the fact that the said claims
were reduced or condoned through compromise agreements entered into by the
Estate with its creditors.
Claims against the estate, as allowable deductions from the gross estate under
Section 79 of the Tax Code, are basically a reproduction of the deductions allowed
under Section 89 (a) (1) (C) and (E) of Commonwealth Act No. 466 (CA 466),
otherwise known as the National Internal Revenue Code of 1939, and which was
the first codification of Philippine tax laws. Philippine tax laws were, in turn, based
on the federal tax laws of the United States. Thus, pursuant to established rules of
statutory construction, the decisions of American courts construing the federal tax
code are entitled to great weight in the interpretation of our own tax laws. [60]
It is noteworthy that even in the United States, there is some dispute as to whether
the deductible amount for a claim against the estate is fixed as of the decedent's
death which is the general rule, or the same should be adjusted to reflect post-
death developments, such as where a settlement between the parties results in
the reduction of the amount actually paid.[61] On one hand, the U.S. court ruled that
the appropriate deduction is the value that the claim had at the date of the
decedent's death.[62] Also, as held in Propstra v. U.S.,[63] where a lien claimed
against the estate was certain and enforceable on the date of the decedent's death,
the fact that the claimant subsequently settled for lesser amount did not preclude
the estate from deducting the entire amount of the claim for estate tax
purposes. These pronouncements essentially confirm the general principle that
post-death developments are not material in determining the amount of the
deduction.
On the other hand, the Internal Revenue Service (Service) opines that
post-death settlement should be taken into consideration and the claim should be
allowed as a deduction only to the extent of the amount actually
paid.[64] Recognizing the dispute, the Service released Proposed Regulations in
2007 mandating that the deduction would be limited to the actual amount paid.[65]
In announcing its agreement with Propstra,[66] the U.S. 5th Circuit Court of
Appeals held:
We are persuaded that the Ninth Circuit's
decision...in Propstra correctly apply the Ithaca Trust date-of-
death valuation principle to enforceable claims against the
estate. As we interpret Ithaca Trust, when the Supreme Court
announced the date-of-death valuation principle, it was making
a judgment about the nature of the federal estate tax specifically,
that it is a tax imposed on the act of transferring property by will
or intestacy and, because the act on which the tax is levied
occurs at a discrete time, i.e., the instance of death, the net
value of the property transferred should be ascertained, as
nearly as possible, as of that time. This analysis supports broad
application of the date-of-death valuation rule.[67]
We express our agreement with the date-of-death valuation rule, made pursuant
to the ruling of the U.S. Supreme Court in Ithaca Trust Co. v. United
States.[68] First. There is no law, nor do we discern any legislative intent in our tax
laws, which disregards the date-of-death valuation principle and particularly
provides that post-death developments must be considered in determining the net
value of the estate. It bears emphasis that tax burdens are not to be imposed, nor
presumed to be imposed, beyond what the statute expressly and clearly imports,
tax statutes being construed strictissimi juris against the government.[69] Any doubt
on whether a person, article or activity is taxable is generally resolved against
taxation.[70] Second. Such construction finds relevance and consistency in our
Rules on Special Proceedings wherein the term "claims" required to be presented
against a decedent's estate is generally construed to mean debts or demands of a
pecuniary nature which could have been enforced against the deceased in his
lifetime, or liability contracted by the deceased before his death.[71] Therefore, the
claims existing at the time of death are significant to, and should be made the basis
of, the determination of allowable deductions.

WHEREFORE, the instant Petition is GRANTED. Accordingly, the

assailed Decision dated April 30, 1999 and the Resolution dated November 3,
1999 of the Court of Appeals in CA-G.R. S.P. No. 46947 are REVERSED and SET
ASIDE. The Bureau of Internal Revenue's deficiency estate tax assessment
against the Estate of Jose P. Fernandez is hereby NULLIFIED. No costs.
THE HEIRS OF ROMANA SAVES, G.R. No. 152866 HERNANDEZ and DODONG SAVES,
namely: FIDELA ALMAIDA, and ENRIQUETA CHAVES-
EMILIANO ALMAIDA, JESUS ABELLA,
ALMAIDA, CATALINA ALMAIDA, Present: Respondents.
ALFREDO RAMOS, GINA RAMOS, Promulgated:
LUZ ALMAIDA, ANITA ALMAIDA, CORONA, C.J.,
PETRA GENERAL, EDNA Chairperson,
GENERAL, ESTHER ALMAIDA, CARPIO MORALES,*
DIONISIA ALMAIDA, CORNELIA LEONARDO-DE CASTRO, October 6, 2010
ALMAIDA, FELIMON ALMAIDA DEL CASTILLO, and
(represented by SINFROSA PEREZ, JJ.
ALMAIDA); THE HEIRS
OF RAFAELA SAVES, namely:
JULIANA DIZON, HILARIA DIZON,
JOVENCIO DIZON, MAURA DIZON,
BABY DIZON & ULDARICO
AMISTOSO (represented by
ULDARICO AMISTOSO); THE
HEIRS OF JANUARIA SAVES,
namely: FELICIDAD MARTINEZ,
MARLOU MARTINEZ, ROWENA
MARTINEZ, BABY LOU MARTINEZ,
BOBERT MARTINEZ, JERRY
MARTINEZ (represented by
FELICIDAD MARTINEZ); THE
HEIRS OFMAXIMO SAVES, namely:
ELPIDIO AMIGO, CELESTINA
DEMETRIA AMIGO, MEREN
(daughter of SEVERA SAVES),
DECISION
FRUTO ROSARIO (represented by
ELPIDIO AMIGO); THE HEIRS
OF BENEDICTA SAVES, namely:
LEONARDO-DE CASTRO, J.:
AUTEMIA JUCOM, CATALINA
JUCOM, DOLORES JUCOM,
SERGIA JUCOM, BENEDICTA
This is a petition for review on certiorari under Rule 45 of the Rules of Court from
JUCOM, JOSEFINA JUCOM,
the Decision[1] promulgated on June 28, 2001 by the Court of Appeals, in CA-G.R.
FLORDIVIDA REMETILLO, FELINA
CV No. 51058, entitled The Heirs of Romana Saves, et al. v. The Heirs of
REMETILLO and ANNA MARIE
Escolastico Saves, et al., reversing the Decision[2] dated May 23, 1995 of the
REMETILLO, (represented by
Regional Trial Court (RTC) of Dumaguete City, Branch 39 in Civil Case No. 7678,
AUTEMIA JUCOM),
in favor of the petitioners.
Petitioners,
The facts of this case as narrated in the assailed Court of Appeals
Decision are as follows:
- versus -

Sometime on January 1921, several persons filed their

respective claims before the then, Court of First Instance of the
THE HEIRS OF ESCOLASTICO
province of Oriental Negros for the titling of the respective lots
SAVES, namely: REMEDIOS
they occupy, among them were Severo Chaves and Benedicta
SAVES-ADAMOS, LUZ SAVES-
Chaves, who filed their claim for Lot No. 382, to be titled in their
names, together with Escolastico Saves, Maximo Saves,
Romana Saves, Rafaela Saves, and Januaria Saves, in
Cadastral Case No. 15.
On April 22, 1921, a Decision was rendered by the
court, adjudicating several parcels of land to different claimants,
among the lots adjudicated, were as follows:
1. Lote No. 382 Se adjudica pro indiviso y
en partes iguales a los hermanos Benedicta
Saves, Escolastico Saves, Romana Saves,
finado Rafaela Saves, Januaria Saves y
Maximo Saves finado en la proindiviso de una
sixta parte cada uno. La parte que
corresponde a los difuntos Romana Saves y
Maximo Saves perteneceran a sus hijos
respectivos;
2. Lote No. 383 Se adjudica con las mejores
existentes en el a la acciedad conyugal
formada por Escolastico Saves y Gaudencia
Valencia;
3. Lote No. 386 Se adjudica con las mejoras
ixistentes en el a la acciedad conyugal
formada por Escolastico Saves y Gaudencia
Valencia;
Also on April 22, 1921, Decree No. 177831 was issued
by the United States of America for the Court of First Instance
of the Province of Negros ordering the registration of Lot No. 382
in the names of Benedicta Saves, Escolastica Saves, the sons
of Romana Saves, deceased, Rafaela Saves, Januaria Saves,
and the sons of Maximo Saves, deceased.
Thereafter, Severo Saves died intestate, leaving his
wife, Teresa Ramirez, his four (4) surviving children, and the
heirs of his two children who predeceased him.
On June 21, 1941, Adelaida S. Martinez and Felicidad
S. Martinez, who were the heirs of Januaria Saves, who
predeceased them, sold their 1/6 share in Lot No. 382 to a
certain Gaudencia Valencia evidenced by a public instrument,
with Doc. No. 1029, Page 46, Book IV, Series of 1941, of the
notarial register, per allegation in a Motion for the Issuance of
Transfer Certificate of Title, filed by Gaudencia Valencia.
On June 30, 1941, a Deed of Sale was executed by the
heirs of Romana Saves, namely: Sinforosa Alimayda, Juan
Alimayda, Vicente Alimayda, Felimon Alimayda and Porferia
Alimayda; the sole heir of Rafaela Saves, Pablo Saves Dizon;
and the sole heir of Escolastico Saves, Teodoro Saves, their
respective 1/6 share in Lot No. 382, or 3/6 of the property, to
Gaudencia Valencia.
On June 6, 1947, Benedicta Saves and Marcela
Saves, the sole heir of Maximo Saves, sold their respective 1/6
share in Lot No. 382, also to Gaudencia Valencia, or 2/6 of the
property, as embodied in a Deed of Absolute Sale.
Considering that all the 1/6 share, rights, and
participation of each co-owner in Lot No. 382 were already sold
to Gaudencia Valencia, she initiated the titling of the said
property under her name in a Motion for Issuance of Transfer
Certificate of Title before the Court of First Instance of Negros
Oriental. Subsequently, Transfer Certificate of Title No. 148 was
issued by the Register of Deeds for Negros Oriental in the name
of Gaudencia Valencia.
Sometime in 1961, Gaudencia Valencia sold the entire
property to Enriqueta Chavez Abella, and Transfer Certificate of
Title No. 110 was issued in the name of Enriqueta Chavez, who
was married to Charles Abella.
In 1979, Meleriana Saves, who was then residing in
Cebu, wrote her relatives in Negros Oriental, the herein
appellees, asking them to verify from the Register of Deeds
information pertaining to Lot 382, as they were among the heirs
entitled to said property.
On March 17, 1981, a case for Reconveyance,
Partition, and Damages was filed before the Regional Trial Court
of Negros Oriental by plaintiffs-appellees, alleging, inter alia,
that Lot No. 382 was fraudulently acquired by Gaudencia
Valencia, and that Gaudencia Valencia fictitiously sold the lot to
her grandchild Enriqueta Chaves Abella.
The complaint was amended twice by plaintiffs
considering that the original plaintiffs and defendants were all
deceased.
The parties failed to arrive to an amicable settlement
during the pre-trial stage, but have agreed to exclude Lot 386 in
the litigation and limited the issues as to the ownership of lots
382 and 383, thus, trial ensued.[3] (Citations omitted.)
The trial court rendered a Decision in favor of the petitioners, the
dispositive portion of which reads:
 WHEREFORE, in view of the foregoing considerations,
judgment is rendered
1. Dismissing defendants counterclaim;
2. Declaring the Deed of Sale and Deed of Absolute
Sale null and void ab initio; and being derived from
a polluted source, whatever documents
Gaudencia Valencia executed in favor of
defendant Enriquita Chavez Abella in relation to
Lot No. 382, Dumaguete Cadastre and the
issuance of TCT No. 110 covering said lot, suffers
the same legal infirmity that of a total nullity;
3. Ordering defendant Enriquita Chavez Abella to
convey and deliver unto the plaintiffs their shares
of Lot No. 382, Dumaguete Cadastre in the
proportion of their respective rights and interests
thereto which they are entitled to participate and
succeed from the shares of their predecessors-in-
interest who are the original registered owners of
the aforesaid lot; and after which, the parties are
ordered to effect physical division and partition of
the lot in question to avoid further animosity
between and among themselves;
4. Ordering defendant Enriquita Chavez Abella to
pay plaintiffs P6,000.00 as litigation expenses
and P2,500.00 as plaintiffs counsel court
appearances as well as moral damages in the sum
of P120,000.00;
5. Dismissing plaintiffs claim of Lot No. 383,
Dumaguete Cadastre, for lack of merit, the same
is originally titled in the name of Escolastico
Saves, married to Gaudencia Valencia; and
6. Defendant Enriquita Chavez Abella is ordered to
pay the costs.[4] (Citations omitted.)
Respondents appealed the RTC Decision to the Court of Appeals which
reversed and set aside the same in the herein assailed Court of Appeals Decision,
the dispositive portion of which reads:
WHEREFORE, premises considered, the Decision
dated, May 23, 1995 rendered by the Regional Trial Court of
Negros Oriental, Branch 39, is hereby REVERSED and SET
ASIDE, and a new one entered, declaring Transfer Certificate of
Title No. 110 in the name of Enriqueta Chaves Abella as valid
and subsisting, and the complaint filed by the plaintiffs is
DISMISSED for lack of merit.[5]
Petitioners filed a Motion for Reconsideration but this was denied by the
Court of Appeals in a Resolution[6] promulgated on March 7, 2002, the dispositive
portion of which reads:
WHEREFORE, the foregoing premises considered, the
Motion for Reconsideration is DENIED for lack of merit.[7]
Unperturbed by the adverse Court of Appeals Decision, petitioners come
before this Court and raise the following issues:
(a) Can the Court of Appeals, in the exercise of its
appellate jurisdiction, consider as evidence exhibits not formally
offered as such by the defendants (now respondents) in the trial
court?
(b) Are exhibits (Exhibits 7, 8 and 13) not formally
offered as evidence by the defendants in the trial court subject
to judicial notice by the Court of Appeals for the purpose of
utilizing the same as basis for the reversal of the trial courts
decision?
(c) Is it legally correct to consider a rule of evidence
simply as a rule of procedure? x x x.[8]
Petitioners also put into issue the failure of the Court of Appeals to
consider respondent Enriquita Chaves-Abella (hereinafter Abella) a purchaser and
registrant in bad faith[9] and the reasonableness of its declaration that, even if
petitioners are indeed co-owners of Lot No. 382, they are already barred due to
the equitable principle of estoppel by laches in asserting their rights over the
same.[10]
We find the instant petition to be without merit.
The first three issues propounded by petitioners can be summed up into
the question of whether or not the Court of Appeals can consider evidence not
formally offered in the trial court as basis for the herein assailed Court of Appeals
ruling.
Petitioners draw attention to the fact that respondents did not formally
offer Exhibits 7, 8 and 13 at the trial court proceedings. In accordance with Section
34, Rule 132 of the Revised Rules of Court,[11] the trial court did not consider them
as evidence. Despite this, the Court of Appeals allegedly utilized the same as basis interest in and over 1/6 portion of said lot. Do
for reversing and setting aside the trial courts decision. you understand that?

It is a basic procedural rule that the court shall consider no evidence A Yes, Sir.
which has not been formally offered. The purpose for which the evidence is offered
must be specified.[12] A formal offer is necessary because judges are mandated to Q Is it true that Maximo Saves left only one heir named Marcela
rest their findings of facts and their judgment only and strictly upon the evidence Saves?
offered by the parties at the trial. Its function is to enable the trial judge to know the
purpose or purposes for which the proponent is presenting the evidence. On the A No, Sir, it is not true.
other hand, this allows opposing parties to examine the evidence and object to its
admissibility. Moreover, it facilitates review as the appellate court will not be Q Why is it not true?
required to review documents not previously scrutinized by the trial court.[13]
A Because Maximo had two children, Sir.
However, in People v. Napat-a,[14] citing People v. Mate,[15] we relaxed
the foregoing rule and allowed evidence not formally offered to be admitted and Empleo We request that paragraph 3 be marked as Exhibit I-3.
considered by the trial court provided the following requirements are present, viz:
first, the same must have been duly identified by testimony duly recorded and, Court (to witness): Who died ahead Severa or Maximo?
second, the same must have been incorporated in the records of the case. [16]
A Maximo, Sir.
In the case at bar, the records would show that the above requisites have
been satisfactorily complied with respect to Exhibit 7. Court Who died ahead Marcela or Severa?

With regard to Exhibit 7, which is a document entitled Motion for the A Severa.
Issuance of Transfer Certificate of Title filed by Gaudencia Valencia (hereinafter
Valencia) in the same trial court that led to the issuance of Transfer Certificate of Court Did Severa die before 1948?
Title (TCT) No. 148, the records would show that it is the same document that
petitioners witness Fruto Rosario identified in his March 5, 1984 testimony and A No, Sir, because she died before the war; she died in 1940.
marked as petitioner-plaintiffs Exhibit I. He testified as follows:
Empleo Here is another document, Mr. Rosario, which appears Court So, when this motion for issuance of certificate of title was
to be a motion for issuance of transfer filed on March 10, 1948, Severa had already
certificate of title, dated March 9, 1948, in 3 died?
pages. Will you please go over this certified
true copy of the motion in Cad. Case No. 1, A Yes, Sir.
GLRO Rec. No. 140, Lot 382, and find out if
these are among the documents which you Court And when this motion was filed on March 10, 1948,
have obtained in connection with your Marcela was still alive?
verification?
A Yes.
A Yes, this is the one, these are among the documents.
Court That is why the motion and which resulted to a certificate
Empleo We request that this certified true copy of the motion for of title had only claim Marcela as a surviving
issuance of transfer certificate of title in Cad. heir of Maximo?
Case No. 1, GLRO Rec. No. 140, Lot 382, be
marked as Exhibit I for page one; I-1 for page A That is not so, Sir, because what about us the children of
two and I-2 for page 3. Severa?

Appearing on Exh. I is a third paragraph, which states, that Court ORDER

Maximo Saves, owner of 1/6 of Lot 382 is now
dead, upon his death Marcela Saves is the The hour of noon having come, continuance
only heiress and successor of his rights and of the direct examination of fifth plaintiffs
 witness Fruto Rosario, as already scheduled,
will be done tomorrow at 10:30 a.m.[17]
Verily, Exhibit 7 was incorporated and made part of the records of this
case as a common exhibit of the parties.[18] That only plaintiffs were able to formally
offer the said motion as Exhibit I most certainly does not mean that it can only be
considered by the courts for the evidentiary purpose offered by plaintiffs. It is well
within the discretion of the courts to determine whether an exhibit indeed serves
the probative purpose for which it is offered.
Likewise, Exhibit 13, which is TCT No. 110[19] or the Torrens title that was
issued to respondent Abella after she bought Lot No. 382 from Valencia, complies
with the requirements enunciated in Napat-a and Mate.
The records of the case bear out that Exhibit 13 was identified by
respondent Abella during the continuation of her direct examination on March 15,
1988. This much was noted even by the trial court in its Decision dated May 23,
1995, to wit:
During the continuation of the direct examination,
witness Enriquita Chavez Abella testified and identified the
TCT No. 110 of Lot No. 382 registered in the name of Enriquita
Chavez which priorly reserved and now marked Exh. 13. x x
x.[20] (Emphasis supplied.)
Moreover, it cannot be denied that Exhibit 13 was included in the records that was
elevated to the Court of Appeals.[21] In fact, the Court of Appeals correctly noted
Abellas testimony regarding this document in resolving petitioners motion for
reconsideration.[22]
It is likewise worth emphasizing that under the Revised Rules on
Evidence, an admission, verbal or written, made by a party in the course of the
proceedings in the same case, does not require proof such admission may be
contradicted only by showing that it is made through palpable mistake or that no
such admission was made.[23]
The existence of Exhibit 13 was not only known to petitioners but it was
expressly alleged in their Appellees Brief[24] filed with the Court of Appeals and
their Petition for Review[25] filed with this Court that Lot No. 382 is registered in the
name of respondent Abella.
Indeed, petitioners did not merely acknowledge the existence of TCT No.
110 (respondents Exhibit 13), but in fact relied upon it in order to put forward their
main theory that the sale from Valencia to respondent Abella is fictitious or void
because, according to petitioners, it appears from the said title that respondent
Abella was supposedly only nine years old at the time of the transaction. Verily, it
is inconsistent for petitioners to claim that Exhibit 13 proves its theory and in the
same breath assail it as inadmissible.
Lastly, petitioners present objection to Exhibit 8 hardly deserves any
credit. Exhibit 8 is a rather innocuous document which has no bearing on any of
the significant issues in this case. Its existence was only referred to in the second
paragraph of page 7 of the RTC Decision wherein it is identified as an Order of the
Hon. Court dated May 11, 1948.[26] Though it never formed part of the records of
this case upon appeal, a careful perusal of the assailed Court of Appeals Decision
would reveal that Exhibit 8 was not in any way used or referred to by the Court of
Appeals in arriving at the aforementioned ruling.
Anent the issue of whether or not the Court of Appeals erred in failing to
consider that respondent Abella is a purchaser in bad faith, petitioner insists that
for failing to exercise prudent (sic) and caution in buying the property in
question,[27] respondent Abella is a buyer in bad faith. She did not investigate
closely the basis of the ownership of Gaudencia Valencia, her grandmother, over
Lot No. 382 which a buyer in good faith should have done under the
circumstances. She did not even bother to know the persons from whom her
grandmother acquired the parcel in question. [28]
Respondents argue that the issue of good faith or bad faith of Enriquita
Chaves-Abella was not raised in the Complaint filed by petitioners in the
RTC. Petitioners original theory of the case is that the sale by Gaudencia Valencia
to Enriquita Chaves-Abella was fictitious because the latter was only nine years
old at the time of the sale. However, during trial, it was clearly established by
common evidence that Enriquita was already married to Charles Abella when she
bought the lot in 1961, and, as a matter of fact, the purchase money was provided
by her husband, Charles. Confronted with the above situation which completely
destroyed their theory of the case, petitioners switched from their fictitious sale to
a 9-year old theory to an entirely different theory, to wit: that Enriquita Chaves-
Abella is a purchaser in bad faith.[29]
Despite this, the RTC declared that respondent Abella is a purchaser in
bad faith because [s]he did not investigated (sic) closely the basis of the ownership
of Gaudencia Valencia over Lot No. 382 which a buyer in good faith should have
done under the circumstances.[30]
The Court of Appeals reversed the above finding and ruled that
respondent Abella is an innocent purchaser for value and in good faith because
the [r]ecords reveal that appellant derived her title of Lot No. 382 from the title of
Gaudencia Valencia, who sold the entire property to the former. Appellant relied
on the face of Transfer Certificate of Title No. 148 in the name of Gaudencia
Valencia, which was free from any encumbrances or annotation. [31]
We agree with the Court of Appeals ruling in this regard.
It is a well-settled doctrine that one who deals with property registered
under the Torrens system need not go beyond the same, but only has to rely on
the certificates of title. He is charged with notice only of such burdens and claims
as are annotated on the certificates.[32]
 In the case at bar, TCT No. 110, which represented proof of respondent
Abellas ownership of Lot No. 382, did not contain any encumbrance or annotation
that was transferred from its title of origin - TCT No. 148. It must be recalled that
the plaintiffs called Abella as one of their witnesses during the trial of this case. It
is Abellas unrebutted testimony, elicited as a hostile witness for the plaintiffs, that
her predecessor-in-interests (Valencias) title was clean when she (Abella)
purchased the property.[33] To be sure, the burden to prove that Abella had notice
of any defect in the title of her predecessor lies with the plaintiffs. Plaintiffs failed
to substantiate their contention. On the contrary, their own evidence tended to
prove that Abella was a purchaser in good faith of the property.
Likewise, there is no cogent reason or legal compulsion for respondent
Abella to inquire beyond Valencias title over the property at issue since the latter
had been in possession of Lot No. 382 prior to the sale. Settled is the rule that a
buyer of real property in possession of persons other than the seller must be wary
and should investigate the rights of those in possession, for without such inquiry
the buyer can hardly be regarded as a buyer in good faith and cannot have any
right over the property.[34] As pointed out by the assailed Court of Appeals
Decision, Valencia had been occupying the property prior to its sale to respondent
Abella. Herein petitioners were never in possession of the property from the very
start, nor did they have any idea that they were entitled to the fruits of the property
not until co-petitioner Meleriana Saves wrote her relatives, co-petitioners in this
case, about the possibility of having a claim to the property. [35]
Neither does the plaintiffs insistence that Exhibits G and H (the deeds of
sale executed in favor of Valencia) were void support their theory that Abella is a
purchaser in bad faith. To begin with, we agree with the Court of Appeals ruling
that the purported irregularities in Exhibits G and H relied upon by the trial court
hardly suffice to deem the said contracts as null and void. There is no need to
repeat the Court of Appeals comprehensive and apt discussions on this point
here. What must be highlighted, however, is the fact that Abella had no
participation in the execution of Exhibits G and H which were signed by the parties
thereto when she was very young. Like any stranger to the said transactions, it
was reasonable for Abella to assume that these public documents were what they
purport to be on their face in the absence of any circumstance to lead her to believe
otherwise.
A purchaser in good faith is one who buys property without notice that
some other person has a right to or interest in such property and pays its fair price
before he has notice of the adverse claims and interest of another person in the
same property.[36] Clearly, the factual circumstances surrounding respondent
Abellas acquisition of Lot No. 382 makes her an innocent purchaser for value or a
purchaser in good faith.
Finally, on the issue of whether or not petitioners, in the remote possibility
that they are co-owners of Lot No. 382, are barred from asserting their claims over
the same because of estoppel by laches, petitioners argue that they are not guilty
of unreasonable and unexplained delay in asserting their rights, considering that
they filed the action within a reasonable time after their discovery of the allegedly
fictitious deeds of sale, which evinced Lot No. 382s transfer of ownership to
Valencia, in 1980. They maintain that the delay in the discovery of the simulated
and fictitious deeds was due to the fact that Escolastico Saves with spouse
Valencia committed the acts surreptitiously by taking advantage of the lack of
education of plaintiffs ascendants.[37]
Respondents counter petitioners claims by underscoring the fact that,
since the 1940s when their predecessors-in-interest sold their shares in and over
Lot No. 382 up to the filing of this case in 1981, petitioners had never taken
possession of Lot No. 382 nor did they file any claim adverse to the ownership of
Gaudencia Valencia. Since the sale of Lot No. 382 by Valencia to respondent
Abella in 1961 up to 1981 when this case was filed, petitioners had continued to
sleep on their professed rights. As found by the Court of Appeals, [p]laintiffs were
never in possession of the property from the very start, nor did they have any
inkling that they were entitled to the fruits of the property, not until one of the
plaintiffs wrote her relatives about the possibility of being heirs to the property.[38]
On this issue, we again hold in favor of respondents.
Laches is defined as the failure to assert a right for an unreasonable and
unexplained length of time, warranting a presumption that the party entitled to
assert it has either abandoned or declined to assert it. [39] In the case at bar,
plaintiffs, assuming that they or their predecessors-in-interest had rights over the
land in question, obviously neglected to exercise these rights by failing to assert
any adverse claim over the property or demand any share of its fruits for many
years. Not unlike their predecessors, petitioners never interposed any challenge
to Valencias continued possession under title of ownership over Lot No. 382 ever
since the entire property was sold to her in 1947 which led to the issuance of TCT
No. 148 in her name. Likewise, petitioners and their predecessors-in-interest did
not mount any opposition to the sale of Lot No. 382 by Valencia to respondent
Abella in 1961 which prompted the issuance of TCT No. 110. It was not only until
1981, or 34 years from Valencias acquisition of the entire lot and 20 years from the
transfer of ownership over the same to respondent Abella, that petitioners decided
to assert their alleged rights over the property in a proper action in court.
Petitioners contend that the delay is attributable to the surreptitious
manner by which Valencia acquired Lot No. 382 from their predecessors-in-
interest but, on this point, petitioners evidence gravely lacks credibility and weight
as shown by the records. Instead, the evidence thus presented by both parties, as
found by the Court of Appeals, would lean towards the conclusion that petitioners
inaction for the past so many years belies any present conviction on their part that
they have any existing interest over the property at all. Thus, even if we grant that
petitioners are co-owners of the property at issue, it is only fair and reasonable for
this Court to apply the equitable principle of estoppel by laches against them in
order to avoid an injustice to respondent Abella who is the innocent purchaser for
value in this case.[40]
WHEREFORE, the petition is DENIED. The Decision of the Court of
Appeals, dated June 28, 2001 in CA-G.R. CV No. 51058, is
hereby AFFIRMED. Costs against petitioners. SO ORDERED.
G.R. No. L-5621 March 25, 1953
PHILIPPINE MOVIE PICTURES WORKERS' ASSOCIATION, Petitioner, vs.
PREMIERE PRODUCTIONS, INC., Respondent.
Cipriano Cid for petitioner.
Salvador C. Bayani for respondent.
BAUTISTA ANGELO, J.:
This is a petition for review of two orders of the Court of Industrial Relations, one
dated November 8, 1951, and the other November 24, 1951, which give authority
to respondent to lay-off forty-four (44) of its employees in accordance with its
urgent petition on condition that, in the event work is available in the future where
their ability may be required, the same workers should be reemployed and that, if
after the termination of the case, the court would find that at the time of their lay
off work was available, the respondent shall pay to them the back wages to
which they are entitled. These two holders were upheld by the court en banc in a
resolution dated March 10, 1952, which is also involved in the present petition for
review.chanroblesvirtualawlibrary chanrobles virtual law library
On October 2, 1951, respondent filed with the Court of Industrial Relations an
urgent petition seeking authority to lay-off 44 men working in three of its
departments, the first batch to be laid off thirty (30) days after the filing of the
petition and the rest 45 days thereafter, in order that in the intervening period it
may finish the filming of its pending picture. The ground for the lay-off is the
financial losses which respondent was allegedly suffering during the current
year.chanroblesvirtualawlibrary chanrobles virtual law library
Petitioner opposed the request alleging that the claim of financial losses has no
basis in fact it being only an act of retaliation on the part of respondent for the
strike staged by the workers days before in an attempt to harass and intimidate
them and weaken and destroy the union to which they
belong.chanroblesvirtualawlibrary chanrobles virtual law library
On November 5, 1951, date when the urgent petition was set for hearing, at the
request of counsel for respondent, Hon. Arsenio C. Roldan, presiding judge of
the Court of Industrial Relations, held an ocular inspection of the studios and
filming premises of respondent in the course of which he interrogated about
fifteen laborers who were then present in the place. On the strength of the
evidence adduced during the ocular inspection Judge Roldan issued an order on
November 8, 1951, allowing respondent to lay-off the workers mentioned in its
petition with respect to Unit No. 2 and those assigned to the Ground
Maintenance Department subject to the condition that, in the event that work is
available in the future, they should be re-employed. With respect to the workers
assigned to Unit No. 1, the hearing was postponed.chanroblesvirtualawlibrary
chanrobles virtual law library
A subsequent hearing was held in connection with the workers assigned to Unit.
1 and on the strength of the evidence submitted by respondent, Judge Roldan
again found the petition justifiable and authorized their lay-off in an order dated
November 24, 1951, under the same condition as those contained in his previous
order.chanroblesvirtualawlibrary chanrobles virtual law library
Petitioner moved for the reconsideration of both orders dated November 8 and
November 24, 1951, which motion the court en banc denied in a resolution
issued on March 10, 1952. Hence this petition for
review.chanroblesvirtualawlibrary chanrobles virtual law library
The only issue submitted to this court for reconsideration is: May the Court of
Industrial Relations authorize the lay off of workers on the basis of an ocular
inspection without receiving full evidence to determine the cause or motive of
such lay-off?chanrobles virtual law library
It appears that when the case was called for hearing to look in the merits of the
urgent petition of respondent seeking to lay-off 44 men who were working in
three of its departments on the ground of lack of work and because its business
was suffering financial losses during the current year the court, which was then
represented by its presiding Judge, decided to make an ocular inspection of the
studios and filming premises of respondent following a request made to that
effect by its counsel, and in the course of said inspection Judge Roldan
proceeded to interrogate the workers he found in the place in the presence of the
counsel of both parties. The testimony of those interrogated was taken down and
the counsel of both parties were allowed to cross-examine them. Judge Roldan
also proceeded to examine some of the records of respondent company among
them the time cards of some workers which showed that while the workers
reported for work, when their presence was checked they were found to be no
longer in the premises. And on the strength of the findings made by judge Roldan
in this ocular inspection he reached the conclusion that the petition for lay-off was
justified because there was no more work for the laborers to do in connection
with the different jobs given to them. It is now contended that such a procedure is
unfair to the labor union in that it deprived the workers affected of the opportunity
to disprove what apparently was represented to the court during the ocular
inspection which at best may only be the result of prearrangement devised by the
company to justify its claim of lack of work and that what the court should have
done was to make a full-dress investigation if not a formal hearing giving both
parties all the time and opportunity to present their evidence before deciding
such an important matter which affects the position and the only means of
livelihood of the workers affected by the petition. In other words, the petitioning
labor union workers were deprived of their employment without due process of
law.chanroblesvirtualawlibrary chanrobles virtual law library
The claim of petitioner that the laborers were not given an opportunity to present
their evidence to disprove the claim of lack of work is disputed by counsel for
respondent company who claims that the labor union had its day in court
because its counsel was present in the investigation or ocular inspection and
even presented some witnesses to protect its interest. The record before the
court on this matter is not clear and for such reason it has no way of determining
the truth of both claims. The stenographic notes taken during the ocular
inspection have not been elevated for the reason undoubtedly that this is a
petition for review and the only issue before the court is one of law. In the face of
this confusing situations on an issue which is determinative of the controversy,
the only guide that the court finds is the order of the court of origin which happily
contains a reference to the evidence that it has considered and which has served
as basis for its conclusion resulting in lay-off of the workers in whose behalf the
present petition was brought before this court. We refer to the order of November
8, 1951, subject of the petition for review, wherein Judge Roldan makes express
mention of the evidence can only refer to testimony given by the workers
interrogated by him and to whatever documents he found or examined in the
course of such inspection. It is true, as counsel for respondent avers, that
hearing were conducted by the court a quo on October 8, and 15, 1951, and on
November 5, 6, 15, and 21, 1951, but it is likewise true that those hearings do not
necessarily refer to the petition under consideration but to other matters and
incidents which were then before the court for determination such as the petition
of the labor union containing fourteen (14) demands and the petition of the same
union to declare respondent in contempt for having violated certain directives of
the court. At any rate, this matter does not appear clear and we are inclined to
resolve the doubt in favor of labor considering the spirit of our
Constitution.chanroblesvirtualawlibrary chanrobles virtual law library
The right to labor is a constitutional as well as statutory right. Every man has a
natural right to the fruits of his own industry. A man who has been employed to
undertake certain labor and has put into it his time and effort is entitled to be
protected. The right of a person to his labor is deemed to be property within the
meaning of constitutional guarantees. That is his means of livelihood. He cannot
be deprived of his labor or work without due process of law (11 Am. Jur., 333, pp.
1151-1153; 11 Am. Jur., section 344. pp. 1168-1171).chanroblesvirtualawlibrary
chanrobles virtual law library
Considering the merits of the controversy before us, we are of the opinion that
the required due process has not been followed. The court a quo merely acted
on the strength of the ocular inspection it conducted in the premises of the
respondent company. The petition for lay-off was predicated on the lack of work
and of the further fact that the company was incurring financial losses. These
allegations cannot be established by a mere inspection of the place of labor
specially when such inspection was conducted at the request of the interested
party. As counsel for petitioner says, such inspection could at best witness "the
superficial fact of cessation of work but it could not be determinative of the larger
and more fundamental issue of lack of work due to lack of funds". This
fundamental issue cannot be determined without looking into the financial
situation of the respondent company. In fact, this matter is now being looked into
by the court a quo in connection with the fourteen demands of the labor union,
but before finishing its inquiry it decided to grant the lay-off pending final
determination of the main case. This action is in our opinion premature and has
worked injustice to the laborers.chanroblesvirtualawlibrary chanrobles virtual law
library
WHEREFORE, the orders subject of the present petition for review are hereby
set aside, and it is ordered that the cause be remanded to the court of origin for
further proceedings giving to petitioner an opportunity to present its evidence in
support of its opposition to the urgent petition for lay-off of respondent company.
No pronouncement as to costs.

Although the Court of Industrial Relations, in the determination of any question or

controversy, may adopt its own rules of procedure and may act according to
justice and equity without regard to technicalities, and for that matter is not bound
by any technical rules of evidence (section 20, Commonwealth Act No. 103), this
broad grant of power should not be interpreted to mean that it can ignore or
disregard the fundamental requirements of due process in the trials and
investigation of cases brought before it for determination. As aptly pointed out by
this court, there are certain cardinal primary rights which the Court of Industrial
Relations must respect in the trial of every labor case. One of them is the right to
a hearing which includes the right of the party interested to present his own case
and submit evidence in support thereof (Manila Trading and Supply Co. vs.
Philippine Labor Union, 71 Phil., 124, 129). An ocular inspection of the
establishment or premise involved is proper if the court finds it necessary, but
such is authorized only to help the court in clearing a doubt, reaching a
conclusion, or finding the truth. But it is not the main trial nor should it exclude the
presentation of other evidence which the parties may deem necessary to
establish their case. It is merely an auxiliary remedy the law affords the parties or
the court to reach an enlightened determination of the
case.chanroblesvirtualawlibrary chanrobles virtual law library
G.R. No. L-10824 December 24, 1915
E. MICHAEL & CO., INC., plaintiff-appellant,
vs.
ADRIANO ENRIQUEZ, defendant-appellee.
Sepulveda, Pelaez and Espina for appellant.
No appearance for appellee.
MORELAND, J.:
This is an appeal from a judgment of the Court of First Instance of Cebu
dismissing the action after trial on the ground that the plaintiff did not prove facts
sufficient to constitute a cause of action.
We are of the opinion that the judgment must be reversed and a new trial
ordered.itc-a1f
The action is based on a sale with a right to repurchase made by Adriano
Enriquez in favor of E. Michael and E. Michael & Co., sociedad en comandita, of
which appellant claims to be the successor, by reason of an instrument, duly
executed and delivered by said companies to appellant, transferring property,
business and assets of every kind, including the land which is the subject of this
litigation. It is alleged in the complaint that the time to repurchase having expired,
the title to the property became absolute in appellant and that it is accordingly the
owner of the land described in said instruments. On the trial appellant sought to
prove the execution and delivery of the conveyance transferring to it the land
described in the sale with right to repurchase. The trial court prevented appellant
from the proving the fact. Appellant also attempted to prove the fact that the
instrument so executed and delivered was lost, it being his purpose to lay the
basis for the introduction of secondary evidence as to its contents. The trial court
also prevented appellant from proving that fact.
While the efforts of appellant's counsel to prove the execution and delivery were
at times rather informal and inartificial and objections to such questions were
properly sustained, at others the questions put for the purpose of proving those
facts were well framed and answer should have been allowed to them; but, even
in such cases, the trial court also sustained objections to the questions and the
evidence sought to be adduced was excluded. The same may be said with
respect to the attempts to establish the loss of the document. Exceptions were
taken by plaintiff's counsel to all adverse rulings of the court respecting the
admission of evidence tending to establish the execution and delivery and the
subsequent loss of the document in question, thus laying them proper foundation
for the bringing up the rulings of the court on those matters.
Trial courts do well in refusing at all times to permit the introduction of
incompetent evidence and particularly secondary evidence of the contents of
written instruments unless the facts required by the Code of Civil Procedure as
the conditions precedent for such evidence are clearly shown to exist. Section
321 of the Code provides: "An original writing must be produced and proved,
except as otherwise provided in this Act. If it has been lost, proof of the loss must
first be made before evidence can be given of its contents. Upon such proof
being made, together with proof of the due execution of the writing, its contents
may be proved by a copy or by a recital of its contests in some authentic
document, or by the recollection of a witness."
As will be seen from this section, the writing itself must be produced unless it has
been lost or destroyed in which case, before its contents may be proved by other
evidence, it must be shown by the person offering the secondary evidence (1)
that the document was duly executed and delivered, where delivery is necessary,
and (2) that it has been lost or destroyed. The execution and delivery of the
document may be established by the person or persons who executed it, by the
person before whom its execution was acknowledged, pr by any person who was
present and saw it executed and delivered or who, after its execution and
delivery, saw it and recognized the signatures; or by a person to whom the
parties to the instruments had previously confessed the execution thereof. The
destruction of the instrument may be proved by any person knowing the fact. The
loss may be shown by any person who knew the fact of its loss, or by anyone
who has made, in the judgment of the court, a sufficient examination in the place
where the document or papers of similar character are usually kept by the person
in whose custody the document lost was, and has been unable to find it; or who
has made any other investigation which is sufficient to satisfy the court that the
instrument is indeed lost. If it appears, on an attempt to prove the loss, that the
document is in fact in existence, then the proof of the loss or destruction fails and
secondary evidence is inadmissible unless section 322 of the Code of Civil
Procedure should be applicable. After proper proof of the due execution and
delivery of the instrument and its loss or destruction, oral evidence may be give
of its contents by any person who signed the document, or who read it, or who
heard it read knowing, or it being proved from other sources, that the document
so read was the one in question. Such evidence may also be given by any
person who was present when the contents of the document were talked over
between the parties thereto to such an extent as to give him reasonably full
information as to its contents; or the contents may be proved by any person to
whom the parties to the instrument have confessed or stated the contents
thereof; or by a copy thereof; or by a recital of its contents in some authentic
document.
Objections were sustained by the trial court to several question put by appellants
counsel relative to the due execution and delivery of the instrument of transfer
between the partnership of E. Michael & Co., sociedad en comandita, and
appellant, on the ground that counsel, in an attempt to identify the document to
which his question referred, described or characterized it as an instrument of
transfer or cession. Counsel, if he had desired to identify the instrument to which
the question referred, might have done better, perhaps, if he asked the witness if
he knew of the execution of an instrument between appellant and its predecessor
in interest relating to the lands described in the complaint or to the property and
business of E. Michael & Co., sociedad en comandita, instead of asking him if he
knew of the execution of a document between appellant and his predecessors in
interest transferring the lands in question, or the property and business of E.
Michael & Co., sociedad en comandita, the appellant. Having obtained an
affirmative answer to the question indicated counsel could then have shown how
the witness came to know of the execution or existence of the document, and, if
such circumstances disclosed that the witness was sufficiently acquainted with
the facts, he would have been allowed to testify to its execution and delivery.
After this had been done the document might then have been presented for
identification and when identified, offered in evidence. If its contents showed that
it referred to the lands described in the complaint, its admissibility would have
been instantly evident.

The mere fact that counsel for appellant, in putting his question to the witness,
characterized or described the instrument as one of transfer, while objectionable,
was not sufficient to cut him off altogether from proving the execution and
delivery of the document if other requisites were present. While it is always best
to avoid characterizations of that kind, its harm is minimized where the case is
tried before a court instead of a jury, the court well knowing that it cannot accept
the characterization as evidence but must go to the document itself or the
evidence of its contents to determine its nature and legal effect. Trial courts
should not be so strict with reference to matters of the character under
discussion as to cause a miscarriage of justice; but on the other hand, they
should see to it that they are not impose on by the introduction of fabricated
testimony and that injustice shall not result from an evasion of the rules of
evidence by designing persons.1awphil.net

We are of the opinion on the whole record that proper questions, tending to the
production of very material and competent evidence, were put by plaintiff's
counsel, objections to which were sustained by the trial court; and that the error
thus committed was not cure by subsequent questions and answers or by the
introduction of the same evidence in different manner or form.

The judgment must be reversed and a new trial ordered without costs in this
instance. So ordered.

G.R. No. L-12483 November 16, 1917
JOSE ANTILLON, plaintiff-appellee,
vs.
LEONCIO BARCELON, administrator of the estate of Antonio Bueno,
deceased, defendant-appellant.
J. Courtney Hixson for appellant.
Pedro Guevara for appellee.
JOHNSON, J.:
The present action relates to the possession and ownership of a certain piece or
parcel of land which is particularly described in paragraph 2 of the complaint.
The action was commenced in the Court of First Instance of the Province of
Laguna on the 28th day of August, 1913. The plaintiff alleged that he was the
owner of said parcel of land; that the defendant was illegally interfering with his
possession of the same; that prior to the commencement of the present action
the defendant had presented a petition in the Court of Land Registration (Cause
No. 8350) for the registration of said parcel of land in his name as administrator
of the estate of Antonio Bueno, deceased; that the present plaintiff opposed the
registration of said parcel of land, alleging that he was the owner of the same;
that said cause was brought on for hearing in the Court of Land Registration and
was finally decided; that the Court of Land Registration, after hearing the
evidence, reached the conclusion that the petitioner (the defendant herein) was
not entitled to have said parcel of land registered; that said parcel of land
belonged to the oppositor (the petitioner herein); that notwithstanding said
decision of the Court of Land Registration the defendant herein continued
molesting the plaintiff and interfering with his possession of said parcel of land.
The defendant answered said petition by a general denial.
Upon the issue thus presented, and after hearing the evidence, the Honorable
Pedro Concepcion, judge reached the conclusion that the plaintiff was the owner
of said parcel of land; that he had purchased the same from Albino Villegas
(Exhibit F); that Albino Villegas had acquired the title to said land by purchase
from Petra Dionido (Exhibit E), a judgment in favor of the plaintiff and against the
defendant in accordance with that conclusion, together with a judgment for
damages in favor of the plaintiff and against the defendant for the sum of P54,
and costs.
From that decision the defendant appealed to this court and made several
assignments of error.
In his first assignment of error he alleges that the lower court erred in admitting
Exhibits E and F of the plaintiff. In support of said assignment of error the
appellant alleges that said documents had not been properly identified and that
their due execution and delivery had not been proved.
An examination of the evidence with reference to said Exhibits E and F shows
that, at the time said exhibits were offered as proof, the defendant objected to
their admissibility upon the ground that they were impertinent, immaterial and
irrelevant; that the two exhibits no more than ordinary papers. In reply to that
objection the attorney for the plaintiff pointed out that said exhibits were public
documents duly acknowledged before a notary public. The attorney for the
defendant then made a further objection that they had not been properly
identified. The court admitted said documents, and the attorney for the defendant
duly accepted.
Said objection and exception present the questions: How may a document duly
acknowledged under the hand and seal of a notary public be proved? Must the
parties to said document be called as witnesses to prove its genuiness and
authenticity? Must the witnesses to said document be called to show its
execution and delivery? Must the notary public be summoned as a witness to
prove the due acknowledgment of such document? Does not the certificate duly
made under the hand and seal of the notary public make such document
admissible in evidence without further proof of its execution and delivery? Is not a
document acknowledged before a notary public under his hand and seal
admissible in evidence as proof of its execution and delivery without additional
proof of its identity and authenticity? Must the execution and delivery of
documents acknowledged before a notary public under his hand and seal be
proved the same as ordinary documents not so executed and delivered? If so,
then, what is the advantage of having the execution and delivery of documents
acknowledged before a notary public under his hand and seal?
No question was presented during the trial of the cause as to the verity of the
acknowledgment under the hand and seal of the notary public to said Exhibits E
and F.
The rule is well established that before private documents may be admitted in
evidence as proof, their due execution and delivery must be proved. (Sec. 321,
Act No. 190.) Their due execution and delivery may be proved (a) by any one
who saw the document executed, or (b) by evidence of the genuineness of the
handwriting of the maker, or (c) by a subscribing witness. (Sec. 324, Act No.
190.) There are certain statutory exceptions to the foregoing rule in this
jurisdiction. (Sec. 326, Act No. 190.)
To the foregoing rules with reference to the method of proving private documents
an exception is made with reference to the method of proving public documents
executed before and certified to, under the hand and seal of certain public
officials. The courts and legislatures have recognized the valid reason for such
an exception. The litigation is unlimited in which testimony by officials is daily
needed; the occasions in which the officials would be summoned from his
ordinary duties to declare as a witness are numberless. The public officers are
few in whose daily work something is not done in which testimony is not needed
from official sources. Were there no exception for official statements, hosts of
officials would be found devoting the greater part of their time to attending as
witnesses in the court or delivering their depositions before an officer. The work
of administration of government and the interest of the public having business
with officials would alike suffer in consequence. For these reasons, and for many
others, a certain verity is accorded such document, which is not extended to
private documents. (3 Wigmore on Evidence, sec. 1631.)
The law reposes a particular confidence in public officers that it presumes they
will discharge their several trusts with accuracy and fidelity; and, therefore,
whatever acts they do in discharge of their public duty may be given in evidence
and shall be taken to be true under such a degree of caution as the nature and
circumstances of each case may appear to require.
A notary public is sometimes spoken of as a public officer. (Ley del Notariado de
15 de febrero de 1889; Ley del Notariado para las Islas Filipinas). He is an officer
known to the Law of Nations; hence his official acts receive credence, not only in
his own country, but in all others in which they are used as instruments of
evidence. (Kirksey vs. Bates, 7 Porter (Ala.), 529; 31 Am. Dec., 722; Governor
vs. Gordon, 15 Ala., 72; Pierce vs. Indseth, 106 U.S., 546, 549; Greenleaf on
Evidence, sec. 5; Townsley vs. Sumrall, 2 Peters (U.S.), 170.)
The functions of a notary public as a public or as a quasi-public officer has been
recognized by the common law, the civil law as well as by the law of nations. He
is recognized as a necessary official in nearly all the civilized countries.
(Governor vs. Gordon, supra; Pierce vs. Indseth, supra; John's American
Notaries, sec. 1.)
The notary public is recognized by the law merchant, and his official acts are
received as evidence, not only in his own, but in all countries. His duties are,
often, of great variety and importance, consisting for the most part, in protesting
inland and foreign bills of exchange, promissory notes, etc. Also the
authentication of transfer to property, administering the oath as to the
correctness of accounts or statements of important documents, which are often
necessary for transmission to points where the parties directly in interesting are
unable to appear in person. The taking of depositions for actions pending in
foreign or distant courts. The taking of the affidavits of mariners and masters of
ships, their protests, etc., requiring care and judgement. In all cases the notary's
certificate or jurat, when accompanied with his official seal of office and proper
certificates of his official character if the act is to be used beyond his own country
or State, is received as prima facie evidence. (John's American Notaries, sec. 1.)
All documents acknowledged by a notary public and certified to by him are
considered public documents in this jurisdiction. (Art, 1216, Civil Code; Gochuico
vs. Ocampo, 7 Phil. Rep., 15.)
The principal function of notary public is to authenticate documents. When a
notary public certifies the due execution and delivery of a document under his
hand and seal he thereby gives such a document the force of evidence. (29 Cyc.,
1076; Bradley vs. Northern Bank, 60 Ala., 252.)
Section 331 of Act No. 190 provides that, "every instrument conveying or
affecting real property situated in the Philippine Islands, acknowledged or proved
and certified as provided by law prevailing in the Philippine Islands, may,
together with the certificate of the acknowledgment or proof, be read in evidence
in an action or proceeding without further proof."
Indeed, one of the very purposes of requiring documents to be acknowledged
before a notary public, in addition to the solemnity which should surround the
execution and delivery of documents, is to authorize such documents to be given
in evidence without further proof of their execution and delivery. (John's
American Notaries, section 168; Bowman vs. Wettig, 39 Ill., 416; Harrington vs.
Fish, 10 Mich., 415.)
Our conclusions is, therefore, with reference to the first assignment of error, that
a document duly acknowledged before a notary public under his hand and seal,
with his certificate thereto attached, is admissible in evidence without further
proof of its due execution and delivery, unless and until some question raised as
to the verity of said acknowledgment and certificate. lawph!1.net
What has been said with reference to the first assignment of error, we believe,
also answers the contention of the appellant in his second assignment of error.
The appellant contends that the lower court committed an error in admitting
Exhibit G (G-1). Said exhibit is the record of the Court of Land Registration in an
action in which the present defendant was the petitioner and the present plaintiff
was the oppositor. While the appellant does not say so, the inference is that his
objection is based upon the ground that said exhibit had not been identified by
the custodian of said document. By section 18 of Act No. 2347, the clerks of the
courts of the respective provinces or districts are ex officio deputies of the Chief
of the General Land Registration Office, and, as such, may identify records made
up in the Courts of First Instance relating to the registration of land under Torrens
system. By virtue of said Act, the clerk of the Court of First Instance, being ex
officio deputy of the Chief of the General Land Registration Office, was fully
authorized to identify said record, being the custodian thereof.
With reference to the other assignments of error, we find nothing in the record
which would justify a modification of the decision of the lower court based
thereon.
A careful examination of the record shows that the plaintiff is the owner and
entitled to the peaceable and quiet possession of the land in question. Therefore,
the judgement of the lower court is hereby affirmed, with costs. So ordered.
G.R. No. L-31494 January 23, 1978
PASTOR LOPEZ, petitioner,
vs.
COURT OF APPEALS, and JESUS R. MARTIN, respondents.
Porfirio V. Sison, Nancy Q. Sison & Anthony Q. Sison for petitioner.
H.G. Laureta for private respondent.
GUERRERO, J.:
Appeal by certiorari from the decision of the Court of Appeals 1 in CA-G.R. No.
34109-R entitled "Jesus R. Martin, plaintiff-Appellee, versus Pastor Lopez,
defendant-appellant," affirming the judgment of the Court of First Instance of
Pangasinan,the dispositive portion of which states, as follows:
WHEREFORE, decision is hereby rendered declaring false
and apocryphal, null and void, the Deed of Absolute Sale,
dated May 18,1948, being Document No. 189, Page 2, Book II,
Series of 1948 of the notary public ex-oficio, Simeon Rico;
ordering the defendant to pay to the plaintiff the sum of
P840.00 as rental of the house built on the parcel of land
described in paragraph 4 of the said complaint and another
sum of P10.00 a month from today until the said house shall
have been delivered to the plaintiff; adjudging the defendant to
be the owner of the parcel of land described in paragraph 7 of
the owner of the parcel of land described in paragraph 7 of the
complaint adjudging the plaintiff to be the owner of the parcel
of land described in paragraph 3 of the complaint and the
house existing therein and described in paragraph 4 of the
same complaint; ordering the defendant to vacate the land and
the house mentioned above and deliver them to the plaintiff;
and ordering the defendant to pay the costs of the suit.
SO ORDERED.
Donde at Lingayen, Pangasinan, this 8th day of June, 1963.
On July 11, 1957, respondent Jesus R. Martin filed the complaint against
petitioner Pastor Lopez in the Court of First instance of Pangasinan seeking
principally the recovery of two (2) parcels of land described in paragraphs 3 and
7 of the complaint, and the declaration of nullity of the deed of sale dated May
18, 1948 allegedly executed by one Gervacio Resoso con--,eying to the
petitioner the said land described in paragraph 3 of the complaint, with damages,
attorneys fees and costs.
On August 12,1957, petitioner Pastor Lopez, the defendant below, filed his
answer, alleging the he is the owner of the parcels of land in question as well as
the improvements thereon by virtue of a deed of absolute sale duly executed by
said Gervacio Resoso over the parcel of land described in paragraph 3 of the
complaint, and also by virtue of a deed of absolute sale executed by Zacarias
Resoso over the parcel of land described in paragraph 7 of the complaint.
The evidence adduced by Jesus R. Martin shows that he is the grandson and
sole heir of the deceased Gervacio Resoso and Marta Manaois, being the only
son of their daughter, Juana Resoso, married to Aurelio Martin; that the said two
(2) parcels of land and the house constructed on the residential land described in
paragraph 3 of said complaint had been in the continous possession of Gervacio
Resoso until his death; that after the death of Gervacio Resoso in 1956, Pastor
Lopez illegally took possession of the said parcels of land and drove the
respondent Jesus R. Martin from the house constructed on the respondent Jesus
R. Martin from the house constructed on the residential land described in
paragraph 3 of the complaint; that the( deed of absolute sale dated may 18,1948
allegedly executed by Gervacio Resoso S conveying to the petitioner the land
described in paragraph 3 of the complaint
G is "fictitious, simulated and fraudulent,"
the signature of Gervacio Resoso appearing
D thereon not being his genuine
signature. .
On the other hand, Pastor Lopez claimed that he is the stepson of the late
Gervacio Resoso, being the child by another man of Gervacio's second wife, one
Filomena Lopez; that he bought the parcel of land described in paragraph 3 of
the complaint on May 18, 1948 and that he paid the consideration of P100.00 in
the presence of Judge Simeon Rico, Justice of of.the Peace of Labrador,
Pangasinan, who prepared and notarized the disputed deed of sale and in the
presence of the two witnesses to the contract of sale; that thereafter he declared
for taxation purposes the said parcel of land in his name and since then, he had
been paying the taxes thereon; that it was he who built the house existing on the
land described in paragraph 3 of the complaint; and that he bought the parcel of
land described in paragraph 7 of the complaint from one Zacarias Resoso,
brother of the deceased owner.
At the trial below, Pastor Lopez presented as witnesses Judge Simeon Rico, the
Notary Public, and the two alleged subscribing witnesses to the said deed,
Antonio Marayag and Feliciano Soliven, who all affirmed the genuineness of the
said document. On the other hand, Jesus R. Martin presented Antonio Rotor, an
NBI examiner of documents, who testified that the signature on the deed of sale
did not appear to be the same signature of the vendor appearing on other
documents bearing his undisputed signature. The testimony of the NBI
documents examiner is hereunder reproduced.
My basis of my conclusion is the spelling of the name Gervacio
Resoso, sir. In the standard, Gervacio Resoso is spelled as "B"
and in the letter "R" with RIS in all the sample signatures, is. In
the questioned signature, Gervacio, it is "V" and in Resoso, it is
spelled as letter "E" and not letter "I", one of the signs of capital
letters "D" and "R". The sign of letter "G" in the standard is
different from the genuine of the capital letter "R"; it curves or
there is a curve of capital letter "R" and it is found in all the
standard type which sows the characteristics or permanent
characters of the writer, sir. In the last signature there is a
curve but it does not touch the extent of the letter, it is outside
but it is the characteristics curving the internal stroke. In the
questioned signature, there is no curve. It is just a simple curve
to the right. The standard basis of my findings are the sized of
the letters. sir. The letters or standard is Exhs... "E-1" to "E-6",
the tendency of these letters is narrower and in the questioned
documents Exh... A, the letters are broad instead of narrower
and in the terminal stroke of the letter "V",there is a pause
which indicates the stroke or rather there is a pause there.
Also in the terminal stroke of Exh... "E", there is a pause
indicated by a broad stroke. It is also in indication that the
writer paused and unlike the standard signatures, there is a
steady movement of the writer makes a cross and there is an
overwriting here of the letters and then before he makes the
connection to the next letter, there is a hesitation as indicated
by the stroke here. (The witness indicating the line between the
letters, "E" and "S" in Exh... "A") Another characteristics is
terminal letter "O" in the word, Resoso to the preceding Letter
"S". These are the tendency of these letters in the sample
signature, Exhs. "1" to "E-6" are smaller than the preceding
letter "S" and which is different in the questioned signature
Resoso in Exh.. "A". And with this findings, my conclusion is
that the writer of the questioned signature in Exh.. "A" is not
the same writer who submitted this standard which are marked
Exhs.. "E-1" to "E-6", sir." (sic) 2
In its Decision, the lower court held and declared "false and apocryphal, null and
void, the Deed of Absolute Sale, dated May 18,1948, being Document No. 189,
Page 2, Book II, Series of 1948 of the notary public ex-oficio, Simeon Rico."
With respect to the parcel of land described under paragraph 7 of the complaint,
the lower court found that the said land had been sold by Zacarias Resoso to
Pastor Lopez, with the conformity and the knowledge of Gervacio Resoso.
On appeal to the Court of Appeals, Pastor Lopez limited his appeal to the
decision of the lower court declaring Jesus R. Martin as the true owner of the
parcel of land described in paragraph 3 of the complaint on the ground that the
deed of sale conveying the same to Pastor Lopez is a falsity.
On the basis of the evidence, the appellate court found the signature of Gervacio
Resoso appearing on the disputed document of forgery a affirmed the decision of
the lower court. On.July 26,1969, Pastor Lopez filed a motion for reconsideration,
and again on July 28,1969 filed an urgent motion setting the said motion for
reconsideration for oral argument. On December 13,1969, the appellate court
denied both motions in a minute resolution.
Hence, this present recourse on the following assignment of errors:
I. The court erred in not applying the rule that public documents are presumed
genuine and regular and that it requires not merely preponderance of evidence
but clear, strong, and conclusive evidence to overthrow this legal presumption.
II. The court erred in disregarding the inflexible rule that gives priority to
subscribing witnesses in the order and quality of evidence to prove a handwriting.
III. The court deviated from accepted rules in not taking into account the
testimony of the judge-notary and two subscribing witnesses who gave
uncontradicted testimony as to the genuineness of the signature in the Deed of
Sale which they personally witnessed.
IV. The court erred in not taking into account the rule that the opinion testimony
of an expert is the most unreliable, the weakest, and the lowest order of evidence
known to law.
V. The court erred in not taking into account that petitioner reasonably explained
the differences in the signatures as reported by the witness and observed by the
court.
VI. The Court of Appeals erred in sustaining the finding of the lower court on the
alleged "unusual" procedure of payment when the same is grounded entirely on
conjecture and not based on evidence of record.
VII. The court erred in sustaining award of damages which is without basis in fact
and law.
The first five errors assgined by petitioner all assail the finding of the appellate
court that the deed of sale, Exh.. a, is foregery. Considering each and every one
of them and all of them together, We find the contentions of petitioner to be
without merit. It is true that public documents are presumed genuine and regular
under the provisions of the Rules of Court but this presumption is a rebuttable
presumption which may be overcome by clear, strong and convincing evidence,
not conclusion evidence as petitioner asserts in the first assignment of error.
In the case at at bar, the Court of Appeals relied not merely on the expert
testimony given by Antonio B. Rotor, the NBI handwriting expert, who examined
the questioned signature appearing on the deed of sale, Exh. a, then compared
them with standard signatures of Gervacio Resoso and concluded that the
questioned signature was not written by the same person who made the
standard signatures, Apart from this expert evidence, the Court of appeals made
its own observation and comparison, and arrived at its own finding and
conclusion, which states:
We have made a comparative analysis of the questioned
signature appearing on the deed of sale with the admittedly
genuine signatures of Gervacio Resoso (Exh. B-1, to B-4 and
C) and the conclusion is inevitable that the signature in
question is indeed a conclusion is inevitable that the signature
in question is indeed a falsified one. Apart from the finding of
Antonio B. Rotor, an NBI handwriting expert, that the writer of
the questioned signature is not the same writer of that
appearing on the specimens of genuine signatures of Gervacio
Resoso, by mere glance of the questioned signatures of
Gervacio Resoso, by mere glance of the questioned signature
and the specimens the marked difference and distinction is
patently discernable. In the questioned signature the strokes of
the writer are not natural. In fact there are added strokes in the
capital letter "G". In the said genuine signatures, the late
Gervacio Resoso had the natural characteristics of using letter
"B" instead of letter "V" in Gervacio and letter "i" instead of "e"
in Resoso. Even in inclination of the strokes and the usual
habit of connecting the letters by the writer there indeed
appears to have a marked distinction between the writer of the
questioned signatures and the writer of the genuine signatures.
(Rollo, pp. 22-23, Decision CA)
The above conclusion of the respondent appellate court is the same as that
found and concluded by the trial court's rulling, thus:
One does not need to be an expert to see the very divergence
and distinction between the signatures appearing in Exh. A-1
and those appearing in Exhs. B-1, B-2, B-3, B-4 and C.
Because of this, this Court is inclined to believe and to hold
that the signatures of Gervacio Resoso appearing in Exhs. A, 1
and 2 are not the genuine signatures of said Gervacio Resoso.
As well pointed out by the expert, it will be seen in the
signature of Gervacio Resoso in Exh.. A and Exhs. 1 and 2
thee is a tendency to imitate; in other words, the stroke there is
not natural. As a matter of fact, there are added strokes in the
letter capital "C". Add to that, the finding that the late Gervacio
Resoso always used the letter (b) in Gervacio and did not use
the letter (e) in signing but the letter (i) which is a
characteristics common in the province of Pangasinan among
the Pangasinan people. In the light of all these., this Court is
constrained to hold as it hereby holds that the Deeds of
Absolute Sale, Exhs. A and Exhs. 1 as well as its copy, Exh..
2, is an apcryphal document, forged and falsified by whoever
was interested in said land. (p. 60, Record on appeal)
For our own verification and satisfaction, this Court likewise made a close
examination, comparison and analysis of the questioned and standard
signatures, aided by the testimony of the NBI witness altogether paint a picture of
general dissimilarity between the standard signature and the questioned
signature.
There is no inflexible rule as claimed by petitioner under Sec. 23, Rule 132 of the
Revised Rules of Court that gives priority to subscribing witnesses in the order
and quality of evidence to prove a handwriting. the rule referred to above merely
enumerates the means or methods by which the handwriting of a person may be
proved, which may either by by: 1 — any witness who believes it to be the
handwriting of such person, and has seen the person write; 2 — or has seen
writing purporting to be his upon which the witness has acted or been charged,
and has thus acquired knowledge of the handwriting of such person; 3 — by
comparison made by the witness or the court, with writings admitted or treated as
genuine by the party against whom the evidence is offered, or proved to be
genuine to the satisfaction of the judge. The law makes no preference, much less
distinction among and between the different means stated above in proving the
handwriting of a person.
Under the above-cited section, Sec, 23, Rule 132, Revised Rules of Court, it
must be noted that the court may also make a comparison between the
questioned and standard signatures before it, and since the Judge or the
Magistrates must make use of their physical senses to conduct an ocular
inspection of the signatures where the signatures appear as they are, and not
merely described by witnesses testifying about them, the result of such
inspection by the Judge or the Magistrates becomes the ultimate judgment of the
Court. Plainly, the signatures speak for themselves. Res ipsa loquitur.
Petitioner contends that the testimonies of the judge-notary and two subscribing
witnesses who gave uncontradicted testimony as to the genuineness of the
signature on the deed of sale should have been given credence and credit, since
the opinion testimony of an expert is the most unrealiable, the weakest and the
lowest order of evidence known to law.
We disagree. It can hardly be expected of the notary public to dispute the
authenticity of the very deed he had notarized since he was paid his notarial fees
therefor, much less of the two subscribing witnesses to deny their participation
because being local politicians as vice-mayor and barrio lieutenant, they are
likely to affix their names to every paper and deed asked of them to act as
witnesses by a school principal and/or the town judge as in this case. On the
other hand, Mr. Rotor, the NBI expert had been an examiner of questioned
documents of the NBI for more than 5 years. In the report rendered by him, Exh.
F, it shows that the handwriting examination was requested by the Presiding
Judge himself, Judge Eloy Bello, who was trying the case itself. the said report
bears also the approval by the Asst. Director, Felipe P. Logan. And there is no
proof that the NBI witness was paid by the indice or interest in making the report.
As a government witness fulfilling an official function requested by the Court, his
testimony on a technical matter must be viewed as a public duty impressed with
and entitled to credence and faith.
On the petitioner's explanation that the signature "GERVACIO RESOSO" was
written because the name as typewritten was "GERVACIO RESOSO", suffice it
to say that the same contradicts petitioner's evidence marked Exhs. 3-B, 4-A, 4-
B, 4-C, where the names as typewritten were also "GERVACIO RISOSO",
Petitioner also marked as his own evidence Exh. 6, Exh. 7, 7-A and 7-B where
the typewritten names read GERVACIO RESOSO and the signatures above
spell: GERVACIO RISOSO. All these repudiate petitioner's explanation.
Petitioner cannot now repudiate his own evidence for he is bound by the same.
Anent the other assignment of error attacking the finding of the lower court on the
"unusual" procedure of payment which the petitioner claims to be grounded on
conjecture and not based on evidences of record, the appellate court itself
approved the observation of the trial court, affirming it to be well-founded "in the
sense that transaction being between a step-father and step-son, the natural
course of things would be that there would be no need for the vendee to show
the payment of the P100.00 to the vendor. And if the defendant has dared to give
such an exaggerated, not to say, false evidence before this Court, it was only
with the purpose of trying to hide a nefarious and illegal act, that is, the
falsification of the deed of absolute sale, Exh. A and Exhs. 1 and 2." 3
We find other exaggerated claims and acts of petitioner which run counter to the
natural course of things, inconsistent with the contention of the petitioner that he
bought the property in question from Gervacio Resoso on May 18, 1948, Thus —
1. Petitioner contends that he has been in possession of the land " in good faith
and in concept of owner, openly, publicly, adversely, peacefully, actually and
continuously for more than thirty years now." (Brief of the petitioner, p. 4) Since
the alleged sale took place on May 18,1948, it is not only exaggerated but
"apocryphal and false" as the deed itself to assert that he had been in
possession for more than 30 years already. this cannot be merely a clerical error
for said allegation of possession is averred in par. 25 of the Answer dated August
12, 1957 under the caption Special Defense to the First Cause of Action (Record
on Appeal, pp. 26-27) and is once more repeated in par. 27 of the Answer under
the caption Counterclaim. (Record on appeal, p. 30) For the third time, petitioner
alleges 30 years possession in its Reply Brief, p. 5. If the claim of possession
were true, then he would have acquired the land in 1927, not on May 18, 1948.
The shallow pretense and the empty extravagance of petitioner's claim is at once
palpable and must fall from its inherent improbality of time and period.
2. Petitioner claims that he built his house on the land in controversy in 1937, as
testified to by his witness, Timoteo Molano, the carpenter who took 4 weeks to
build the house with 8 workers whose wages were paid by the petitioner, the
latter paying the materials used in the construction. (t.s.n., pp. 72-75, hearing of
March 11, 1963). Again, this is exaggerated, if to false for petitioner supposedly
bought the land in 1948 yet he built his house on the land in 1937, yet he
declared the house for taxation purposes only in November 10, 1948, as shown
in Exh.. 8-b, Tax Declaration No. 15125, some eleven (11) years thereafter,
which against is irregular and out of the ordinary course of events.
3. The act of the petitioner in registering the deed of sale, Exh. A, allegedly
executed on May 18, 1948, in the Office of the Register of Deeds of Pangasinan
only o July 22, 1957, which was after the filing of the complaint on July 11, 1957
(Record on Appeal, 1) is very suspicious. this registration, as shown on the
reverse side of Exh. 2, was caused by petitioner 8 months after the death of the
vendor, Gervacio Resoso, and 9 years after the execution of the instrument itself.
these posterior acts of the petitioner indicate a questionable and doubtful design
to cover up a suspicious, if not nefarious transaction during the lifetime of the
supposed vendor to hide the transfer of the property to the petitioner.
4. It appears in the deed of sale, Exh. A, that the land which is described therein
as
A parcel of residential land containing an area of 1,456 square
meters more or less. Bounded on the North by Agno River; on
the East by property of Martin Resoso; on the South by
Carretera and on the West by property of Cristobal Martin and
assessed at P150.00 as described by Tax Declaration No.
 13119 for the current year. It is visible by mean of fences on all
sides.

was sold for only One Hundred Pesos (P100.00) Philippine Currency.
Considering that the area of the land (1,456) sq. meters, more or less); the
nature of the lot it being urban and residential; its classification (2nd); and its
assessed valuation by the provincial assessor at P150.00 for taxation purposes,
which is usually 15%-20% of the actual market value, it becomes evident that the
considaration was grossly inadequate.

And if We take into account the value of improvements existing on the land such
as a granary and the trees growing thereon, like coconuts, bamboos, caimito,
avocado, santol, and nipa palms that are made into shingles and sold
commercially, the price paid was plainly unconscionable. These are badges of
fraud which reveal the falsity of the alleged sale.

In the sum and substance, where petitioner's claims, defenses and act are highly
improbable, exaggerated and inconsistent with he regular norm of human
conduct and the normal course of events, such as a claim that his possession
and ownership of the property is more than thirty (30) years when the said
property was supposedly acquired and purchased only nine (9) years back; that
the improvement (house) was years thereafter and he declared the house for
taxation purposes only after eleven (11) years; that he registered the deed of
sale nine (9) years after its execution, and after the complaint for its cancellation
had already been filed, and finally, the gross inadequacy and
unconscionableness of the consideration, petitioner's posture becomes a
misrepresentation that cannot be believed or sustained.

IN VIEW OF THE FOREGOING, the judgment appealed from is hereby affirmed,

with no pronouncement as to costs.

SO ORDERED.
G.R. No. 77008 December 29, 1987
ANGELITA LOPEZ, represented by PRISCILLA L. TY as her Attorney- in-
Fact, petitioner,
vs.
COURT OF APPEALS, REGIONAL TRIAL COURT OF QUEZON CITY
(BRANCH 103) and ANTONIO MURILLO, respondents.
GANCAYCO, J.:
In this petition for review of the decision of the Special 5th Division of the Court of
Appeals (CA) promulgated September 30, 1986 1 the issue posed is whether a
special power of attorney executed in a foreign country is admissible in evidence
as a public document in our courts.
On June 5, 1984 petitioner Angelita Lopez who is a Filipino citizen residing in
Norway, represented by her alleged attorney-in-fact Priscilla L. Ty -filed an action
for ejectment against private respondent in the Metropolitan Trial Court of the
Metropolitan Manila in Quezon City docketed as Civil Case No. 0045993. Mrs. Ty
presented to the inferior court a special power of attorney authorizing her to
prosecute the case in behalf of petitioner which appears to have been executed
by petitioner before a city judge-notary public of Oslo, Norway. It was duly
admitted by the Court.
On November 25, 1984 said Court rendered a judgment in favor of petitioner
finding the ejectment of private respondent from the subject premises as
warranted.2
Private respondent appealed to the Regional Trial Court (RTC) of Quezon City
assailing among others the authority of Mrs. Ty to bring the action on the ground
that the special power of attorney she submitted is inadmissible in evidence
unless its due execution and its authenticity is first proved, which was docketed
as Q-44813. In its decision of November 15, 1985, said court reversed the
judgment of the inferior court holding that the questioned special power of
attorney is inadmissible in evidence inasmuch as it is due execution and
authenticity was not proved. Thus the court concluded that the suit was not
instituted by the real party-in-interest nor by his duly authorized
representative.3 A motion for reconsideration of the decision filed by petitioner
was denied in an order of June 10, 1986. 4
Petitioner elevated the case to the Court of Appeals by way of a petition for
certiorari but which was treated as a petition for review which was docketed as
CA-G.R. No. SP-09452. In a decision of September 30, 1986, the appellate court
denied the petition for lack of merit, 5 a pertinent portion of which reads as
follows:
What militates more against the posture of the petitioner is that
the action was not filed by the proper party.
The real party in-interest here is Angelita Lopez who turned out
to be the registered owner. The action was filed by an attorney-
in-fact under a supposed special power of attorney. The due
execution of (the) said special power of attorney was not
established. An action can be filed only by the real party in-
interest. An attorney-in-fact has no interest in the litigation
(Arroyo vs. Graneda 18 Phil. 484).
xxx xxx xxx (Emphasis supplied)
In a dissenting opinion of Mr. Justice Bienvenido Ejercito he espoused the view
that the special power of attorney being a public document duly executed before
a notary public, its authenticity need not be proved. 6
Hence this petition.
On February 9, 1987, the Court issued a temporary restraining order enjoining
the respondents from enforcing the decision and the order of the Regional Trial
Court dated November 15, 1985 and June 10, 1986 respectively. 7
In a resolution of April 8, 1987, the Court gave due course to the
petition. 8 Thereafter the parties submitted their respective memorandum.
Mrs. Priscilla L. Ty the supposed attorney-in-fact, contends that inasmuch as the
special power of attorney in question is notarized, it is a public document which
should be admitted in evidence without need of authentication and/or proof of
due execution. On the other hand, the private respondent argues that the same
cannot be considered as a public document because its authenticity has not
been proved by Mrs. Ty in accordance with the procedure prescribed under the
Rules of Court.
Is the special power of attorney relied upon by Mrs. Ty a public document? We
find that it is. It has been notarized by a notary public or by a competent public
official with all the solemnities required by law of a public document. 9When
executed and acknowledged in the Philippines, such a public document or a
certified true copy thereof is admissible in evidence. 10 Its due execution and
authentication need not be proven unlike a private writing. 11
Section 25, Rule 132 of the Rules of Court provides-
Sec. 25. Proof of public or official record. — An official record
or an entry therein, when admissible for any purpose, may be
evidenced by an official publication thereof or by a copy
 attested by the officer having the legal custody of the record, or
by his deputy, and accompanied, if the record is not kept in the
Philippines, with a certificate that such officer has the custody.
If the office in which the record is kept is in a foreign country,
the certificate may be made by a secretary of embassy or
legation consul general, consul, vice consul, or consular agent
or by any officer in the foreign service of the Philippines
stationed in the foreign country in which the record is kept, and
authenticated by the seal of his office.

From the foregoing provision, when the special power of attorney is executed
and acknowledged before a notary public or other competent official in a foreign
country, it cannot be admitted in evidence unless it is certified as such in
accordance with the foregoing provision of the rules by a secretary of embassy or
legation, consul general, consul, vice consul, or consular agent or by any officer
in the foreign service of the Philippines stationed in the foreign country in which
the record is kept of said public document and authenticated by the seal of his
office. A city judge-notary who notarized the document, as in this case, cannot
issue such certification.

Considering that the record of the case does not disclose any compliance with
the provisions of Section 25, Rule 132 of the Rules of Court on the part of the
petitioner, the special power of attorney in question is not admissible in evidence.
As such, Mrs. Priscilla L. Ty cannot lawfully prosecute the case against the
private respondents in the name of her principal as her authority through a
special power of attorney had not been duly established in evidence. The
litigation was not commenced by the real party-in-interest or by one duly
authorized by the said party.

This being so, the Metropolitan Trial Court, the Regional Trial Court and the
Court of Appeals never acquired jurisdiction over the person of the real party-in-
interest — Angelita Lopez. For lack of the requisite jurisdiction, all the
proceedings in the said courts are null and void ab initio. 12 All proceedings
therein should be and are hereby set aside.

Accordingly, it is Our considered opinion, and We so hold, that a special power of

attorney executed before a city judge-public notary in a foreign country, without
the certification or authentication required under Section 25, Rule 132 of the
Rules of Court, is not admissible in evidence in Philippine courts.

WHEREFORE, in view of the foregoing, the entire proceedings in the

Metropolitan Trial Court (Civil Case No. 00459930), the Regional Trial Court
(Civil Case No. Q-44813) and the Court of Appeals (Case No. CA-G.R. SP No.
09452) are hereby declared null and void and the case is DISMISSED without
costs. The temporary restraining order issued on February 9, 1987 is hereby
lifted.

SO ORDERED.
G.R. No. 76595 May 6, 1988
PACIFIC ASIA OVERSEAS SHIPPING CORPORATION, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and TEODORO
RANCES, respondents.
Acaban, Corvera, Valdez & Del Castillo Law Office for petitioner.
The Solicitor General for public respondent.
Valentin A Zozobrado for private respondent.
FELICIANO, J.:
The petitioner, Pacific Asia Overseas Shipping Corporation (Pascor, in short),
seeks the annulment and setting aside of the Resolutions of the public
respondent National Labor Relations Commission (NLRC) dated 14 August 1986
and 19 November 1986, denying Pascor's appeal for having been filed out of
time and denying its Motion for Reconsideration, respectively.
Sometime in March 1984, private respondent Teodoro Rances was engaged by
petitioner Pascor as Radio Operator of a vessel belonging to Pascor's foreign
principal, the Gulf-East Ship Management Limited. Four (4) months later, and
after having been transferred from one vessel to another four times for
misbehaviour and inability to get along with officers and crew members of each
of the vessels, the foreign principal terminated the services of private respondent
Rances citing the latter's poor and incorrigible work attitude and incitement of
others to insubordination. 1
Petitioner Pascor filed a complaint against private respondent with the Philippine
Overseas Employment Administration tion (POEA) for acts unbecoming a marine
officer and for, character assassination," which case was docketed as POEA
Case No: M-84-09-848. Private respondent denied the charges set out in the
complaint and by way of counterclaim demanded an amount of US$ 1,500.00
which a court in Dubai had, he contended, awarded in his favor against
petitioner's foreign principal. In due course, on 4 September 1985, the POEA
found private respondent liable for inciting another officer or seaman to
insubordination and challenging a superior officer to a fist fight and imposed six
(6) months suspension for each offense or a total of twelve (12) months
suspension, with a warning that commission of the same or similar offense in the
future would be met with a stiffer disciplinary sanction. The POEA decision
passed over sub silentio the counterclaim of private respondent. 2
On 10 October 1985, private respondent filed a complaint against petitioner,
docketed as POEA Case No: M-85-10-0814 and entitled "Teodoro Rances v.
Pacific Asia Overseas Shipping Corporation." In this complaint, he sought to
carry out and enforce the same award obtained by him in Dubai allegedly against
Pascor's foreign principal which he had pleaded as a counterclaim in POEA Case
No: M-84-09-848. Private respondent claimed that be had filed an action in the
Dubai court for US$ 9,364.89, which claim was compromised by the parties for
US$ 5,500.00 plus "a return ticket to (private respondent's) country," with the
proviso that "the opponent" would pay "to the claimant" US$ 1,500.00 'in case the
wife of the claimant Rantes doesn't agree with the amount sent to [her] Private
respondent further claimed that since his wife did not "agree with" the amount
given to her as 'an allotment for the 3-month period (of April, May and June
1984), he was entitled to recover the additional US$ 1,500.00 "as mandated
under the Compromise Agreement which was the basis of the decision of the
Dubai Civil Court. 3 As evidence of this foreign award, private respondent
submitted what purports to be an "original copy (sic) of the decision" of the Dubai
court written in Arabic script and language, With a copy of an English translation
by an unidentified translator and a copy of a transmittal letter dated 23
September 1984 signed by one Mohd Bin Saleh "Honorary Consul for
Philippines." The full texts of the purported English translation of the Dubai award
and of the transmittal letter are set out in the margin. 4
In its answer filed on 11 December 1985, petitioner Pascor made four principal
arguments: that the copy of the Dubai decision relied upon by private respondent
could not be considered as evidence, not having been properly authenticated;
that Pascor was not a party to the Dubai court proceedings; that the POEA had
no jurisdiction over cases for the enforcement of foreign judgments; and that the
claim had already been resolved in POEA Case No: M-84-09-848, having been
there dismissed as a counterclaim.
In a decision dated 14 April 1986, the POEA held petitioner Pascor liable to pay
private respondent Rances the amount of US$ 1,500.00 "at the prevailing rate of
exchange at the time of payment." This decision was served on petitioner's
counsel on 18 April 1986, which counsel filed a 'Memorandum on Appeal and/or
Motion for Reconsideration" on 29 April 1986.
Private respondent moved the next day for dismissal of the appeal and for
issuance of a writ of execution, upon the ground that petitioner's appeal had been
filed one (1) day beyond the reglementary period and that, consequently, the
POEA decision had become final and executory.
Petitioner opposed dismissal of its appeal and issuance of a writ of execution,
arguing that the one (1) day delay in filing its Memorandum on Appeal had been
occasioned by an excusable mistake.
On 20 May 1986, the POEA issued an order denying petitioner's appeal for
having been filed out of time. Petitioner moved for reconsideration, paid the
docket fee and posted the required supercedes bond in connection with its
appeal.
On 29 May 1986, the POEA denied private respondent's Motion for a Writ of
Execution and elevated the case to the NLRC.
On 14 August 1986, public respondent NLRC denied petitioner's appeal as flied
out of time. Petitioner's Motion for Reconsideration was similarly denied.
In the present Petition for certiorari and mandamus with prayer for Preliminary
Injunction and Temporary Restraint ' 9 Order, Pascor urges that public
respondent NLRC acted with grave abuse of discretion or in excess of its
jurisdiction in denying its appeal and motion for reconsideration.
We think petitioner's contention has merit. The record shows, not an intent to
delay the proceedings but rather a genuine and substantial effort on the part of
petitioner Pascor to file, in a timely manner, its Memorandum on Appeal which, in
the circumstances of this case, should not have been disregarded by respondent
NLRC. The circumstances surrounding the one (1) day delay in the filing of
petitioner's Memorandum on Appeal are summed up by petitioner in the following
terms:
30.1. Mr. Ruben de la Cruz, who was newly hired as
messenger in the law firm representing the petitioner was
tasked with the delivery of the memorandum on appeal in the
afternoon of April 28, 1986 (the last day for filing the same).
30.2. When Mr. de la Cruz read the caption of the
memorandum, he noted that the same is addressed to the
respondent NLRC and he erroneously concluded that it should
be filed with the offices of the NLRC in Intramuros, Manila.
30.3. Wen Mr. de la Cruz presented petitioner's Appeal at the
docket section of respondent NLRC, he was advised that the
same should be filed with the offices of the POEA in Ortigas,
San Juan, Metro Manila.
30.4. Mr. de la Cruz upon being apprised of his error
immediately proceeded to the offices of the POEA in order to
have petitioner's (PASCOR's) appeal received but
unfortunately, by the time he arrived thereat, the POEA office
had already closed for the day. Thus, the appeal was filed the
following day.
To Support the above explanation, in addition to an affidavit executed by Mr.
Ruben de la Cruz, petitioner submitted a certification dated 2 May 1986 executed
by Evelyn G. Sauza, receive . receiving clerk of respondent NLRC stating that
she had read to receive the Memorandum on Appeal on or about 4:15 P.M., 28
April 1986, because the Memorandum was supposed to be filed with the POEA
office in Ortigas and not with the NLRC in Intramuros.
The brevity of the delay in filing an appeal is not, of course, by itself a sufficient
basis for giving due course to the appeal. In the present case, however, the
factual circumstances combine with the legal merits of the case urged by the
petitioner to move us to the conviction that respondent NLRC should have
recognized and heeded the requirements of orderly procedure and substantial
justice which are at stake in the present case by allowing the appeal. In Siguenza
v. Court of appeals, 5 the Court stressed that the right to appeal should not be
lightly disregarded by a stringent application of rules of procedure especially
where the appeal is on its face meritorious and the interests of substantial justice
would be served by permitting the appeal:
In the case of Castro v. Court of Appeals (132 SCRA 782), we
stressed the importance and real purpose of the remedy of
appeal and ruled:
An appeal is an essential part of our judicial
system. We have advised the courts to
proceed with caution so as not to deprive a
party of the right to appeal (National
Waterworks and Sewerage Authority v.
Municipality of Libmanan, 97 SCRA 138) and
instructed that every party-litigant should
be afforded the amplest opportunity for the
proper and just disposition of his cause,
freed from the constraints of
technicalities (A. One Feeds, Inc. v. Court of
Appeals, 100 SCRA 590).<äre||anº•1àw>
The rules of procedure are not to be applied
in a very rigid and technical sense. The rules
of procedure are used only to help secure
not override substantial justice. (Gregorio v.
Court of Appeals [72 SCRA 1201).
Therefore, we ruled in Republic v. Court of
Appeals (83 SCRA 453) that a six-day
delay in the perfection of the appeal does not
warrant its dismissal. And again in Ramos v.
Bagasao, 96 SCRA 396, this Court held
that the delay in four (4) days in filing a
notice of appeal and a notion for extension of
time to file a record on appeal can be
excused on the basis of equity.
We should emphasize, however, that we have allowed the of
an appeal in some cases where a sent application of the rules
would have denied it only when to do so would serve the
demands of substantial justice and in the exercise of our equity
junction.
 In the case at bar, the petitioner's delay in their record on
appeal should not be strictly construed as to deprive them of
the right to appeal especially since on its face the appeal
appears to be impressed appeal especially with merit. 6
We turn to the merits of the Petition. An examination of the complaint and of the
Manifestation and Motion filed by respondent Rances in POEA Case No: M-85-
08-14, shows that the cause of action pleaded by respondent Rances was
enforcement of the decision rendered by c. Dubai Court which purported to
award him, among other things, an additional amount of US$ 1,500.00 under
certain circumstances. In the complaint dated 23 October 1985, respondent
Rances stated:
Details of cause of action (Why are you complaining?) (To
include place and date of occurrence of case of action and
amount of claim, if any) P 2,295 US$ salary for three (3)
months stated in the compromise of 1,500 TJS$ total of
2,795.50 US$ [as] per decision from Civil Court of Dubai
U.A.E. 7
The Motion/Manifestation dated 3 December 1985 filed by respondent Rances
may be quoted in extension
1. Originally, complainant's claim was US$ 9,364.89 which he
filed with the Dubai Court for adjudication.
xxx xxx xxx
2. The US$ 9,364.89 claim was compromised by the court in a
decision dated September 12, 1984. Xerox copy of the
decision is hereto attached as Annex "B" and the
authentication as Annex "B-l' and made an integral part
thereof.
3. Pertinent portion of the decision referred to above reads as
follows:
Both parties came to a decision that the
opponent would pay to the claimant the
amount of Five Thousand & Five Hundred
dollars for the withdrawal of the claimant and
providing him return ticket to his country. The
opponent declared that he would pay One
Thousand & Five Hundred Dollars to the
opponent in case the wife of the claimant
doesn't agree with the amount sent to.
4. During the hearing leading to the Compromise, I
emphasized that the allotment I was giving my wife was US$
765.00 per month and at the time the case was filed the
allotment was already 3 months in arrears which already
amounted to US$ 2,295.00.
5. The amount sent my wife which is only P 13,393.45 through
PASCOR and confirmed by a Certification of the Philippine
National Bank, Dagupan City Branch, hereto attached as
Annex 'C' is definitely very meager compared to the exchange
value of US$ 2,295.00;
6. My wife certainly did not agree and cannot agree or admit
that only P 13,393.45 will be given her as an allotment for the
3-month period; hence, urder the Compromise Agreement, we
are entitled to recover the additional US$ 1,500.00;
7. The agreement insofar as the additional remittance to my
wife of US$1,500.00 is reasonable in that adding the same to
the P13,393.45 my wife received would sum up to
US$2,295.00 corresponding to the accumulated 3 month
allotment due my wife.
WHEREFORE, premises considered, it is respectfully prayed
of this Honorable Office to —
Cause or require respondent to remit and/or pay the
undersigned or his wife of the amount of US$ 1,500.00 as
mandated under the Compromise Agreement which was the
basis of the decision of the Dubai Civil Court. 8
It should be noted that respondent Rances submitted to the POEA only the Dubai
Court decision; he did not submit any copy of the 'Compromise Agreement'
(assuming that to have been reduced to writing) which he presumably believed to
have been absorbed and superseded by the Dubai decision.
That the cause of action set out in respondent Rances' complaint was
enforcement of the Dubai decision is further, indicated in the decision dated 14
April 1986 rendered by the POEA. This decision provided in part as follows:
Complainant alleged that his original claim of US$ 9,364.89 for
unpaid salaries, termination pay and travel expenses was filed
in Dubai. In a decision rendered by the Dubai Court, his claim
was compromised in the amount of US$ 5,500.00 plus return
plane ticket. The amount of US$ 1,500.00 will be paid to his
wife if she does not agree with the amount sent to her. The
three (3) months unremitted allotments refers to the months of
 April, May and June 1984. As evidenced by the Allotment Shp,
respondent approved the authority given by complainant
stating that the amount of US$ 765.00 be remitted to his wife
belong with the month of April 1984. The amount remitted to
his wife for allotment cover the three (3) month period was only
P 13,393.45. The basis of complainant's claim is the
reservation in the decision of the Dubai Court which states that
in case the wife of the claimant does not agree with the amount
sent to her, the opponent shall pay US$ l,500.00. 9
Clearly, therefore, respondent Rances' action was for enforcement of the Dubai
decision to the extent that such decision provided for payment of an additional
amount of US$1,500.00 and that respondent relied upon such decision.
Petitioner argues vigorously that the POEA had no authority and jurisdiction to
enforce the judgment of a foreign court. Under Section 1, Rule 1, Book VI of the
POEA Rules and Regulations, it will be seen that the POEA has jurisdiction to
decide all cases 'involving employer employee relations arising out of or by virtue
of any law or contract involving Filipino workers for overseas employment,
including seamen." Respondent Rances, however, relied not upon the employer -
employee relationship between himself and petitioner corporation and the latter's
foreign principal, but rather upon the judgment obtained by him from the Dubai
Court which had apparently already been partially satisfied by payment to
respondent Rances of US$ 5,500.00. The POEA has no jurisdiction to hear and
decide a claim for enforcement of a foreign judgment. Such a claim must be
brought before the regular courts. The POEA is not a court; it is an administrative
agency exercising, inter alia, adjudicatory or quasi-judicial functions. Neither the
rules of procedure nor the rules of evidence which are mandatorily applicable in
proceedings before courts, are observed in proceedings before the POEA. 10
Even assuming (arguendo, merely) that the POEA has jurisdiction to recognize
and enforce a foreign judgment, still respondent Rances cannot rely upon the
Dubai decision. The Dubai decision was not properly proved before the POEA.
The Dubai decision purports to be the written act or record of an act of an official
body or tribunal of a foreign country, and therefore a public writing under Section
20 (a) of Rule 132 of the Revised Rules of Court. Sections 25 and 26 of Rules
132 prescribe the manner of proving a public of official record of a foreign country
in the following terms:
Sec. 25. Proof of public or official record. — An official record
or an entry therein, when admissible for any purpose, may be
evidenced by an official publication thereof or by a copy
attested by the officer having the legal custody of the record, or
by his deputy, and accompanied. if the record is not kept in the
Philippines, with a certificate that such officer has the custody.
If the office in which the record is kept is in a foreign country,
the certificate maybe be made by a secretary of embassy or
litigation, consul general, consul, vice consul, or consular agent
or by any officer in the foreign service of the Philippines
stationed in the foreign country in which the record is kept, and
authenticated by the seal of his office.
Sec. 26. What attestation of copy must state. — Whenever a
copy of a writing is attend for the purpose of evidence, the
attestation must state, in substance, that the copy is a correct
copy of the original, or a specific part thereof, as the case may
be. The attestation must be under the official seal of the
attesting officer, if there be any, or if he be the clerk of a court
having a seal, under the seal of such court. (Emphasis
supplied)
In the instant case, respondent Rances failed to submit any attestation issued by
the proper Dubai official having legal custody of the original of the decision of the
Dubai Court that the copy presented by said respondent is a faithful copy of the
original decision, which attestation must furthermore be authenticated by a
Philippine Consular Officer having jurisdiction in Dubai. The transmittal letter,
dated 23 September 1984, signed by Mohd Bin Saleh, Honorary Consul for
Philippines' does not comply with the requirements of either the attestation under
Section 26 nor the authentication envisaged by Section 25. 11
There is another problem in respect of the admissibility in evidence of the Dubai
decision. The Dubai decision is accompanied by a document which purports to
be an English translation of that decision., but that translation is legally defective.
Section 34 of Rule 132 of the Revised Rules of Court requires that documents
written in a non-official language hke Arabic) shall not be admitted as evidence
unless accompanied by a translation into English or Spanish or
Filipino. 12 In Ahag v. Cabiling, 13 Mr. Justice Moreland elaborated on the need
for a translation of a document written in a language other than an official
language:
... Moreover, when there is presented in evidence an exhibit
written in any language other than Spanish, if there is an
appeal, that exhibit should be translated into Spanish by the
official interpreter of the court, or a translation should be
agreed upon by the parties, and both original and translation
sent to this court. In the case before us, there is an
untranslated exhibit written in the Visayan language. 14
In Teng Giok Yan v. Hon. Court of Appeals, et al., 15 the Court, speaking through
Mr. Justice Montemayor, had occasion to stress the importance of having a
translation made by the court interpreter who must, of course, be of recognized
competence both in the language in which the document involved is written and
in English. The Court said:
[t]he trial court was certainly not bound by the translation given
by the Chinese Embassy, specially in the absence of a delete
assurance that said translation was correct and that it was
 made by the Embassy Adviser himself. On the other hand, the
translation made by the court interpreter is official and reliable
not only because of the recognized ability of said interpreter to
translate Chinese characters into English, but also because
said interpreter was under the direct supervision and control of
the court. .... 16
prejudice to the right of respondent Rances to initiate another proceeding before
the POEA against petitioner Pascor, this time on the basis alone of the contract
of employment which existed between said respondent and petitioner or
petitioner's foreign principal; there, respondent Rances may seek to show that he
is still entitled to the allotments which he claims were not remitted by his
employer to his wife.

In the instant case, there is no showing of who effected the English translation of
the Dubai decision which respondent Rances submitted to the POEA. The
English translation does not purport to have been made by an official court
interpreter of the Philippine Government nor of the Dubai Government. Neither
the Identity of the translator nor his competence in both the Arabic and English
languages has been shown. The English translation submitted by the respondent
is not sworn to as an accurate translation of the original decision in Arabic.
Neither has that translation been agreed upon by the parties as a true and faithful
one.
ACCORDINGLY, the Petition for certiorari is GRANTED and the Resolutions of
public respondent NLRC dated 14 August 1986 and 19 November 1986 are
hereby NULLIFIED and SET ASIDE. The Temporary Restraining Order issued by
this Court on 8 December 1986 is hereby made PERCENT. No pronouncement
as to costs.
SO ORDERED.

The foregoing does not exhaust the difficulties presented by reliance upon the
Dubai decision. The Dubai Court decision, even on the basis of the English
translation submitted by respondent Rances, does not purport on its face to have
been rendered against petitioner Pascor nor against the foreign principal of
petitioner. Respondent Rances simply assumed that the decision was rendered
against petitioner's foreign principal. The Dubai decision does not Identify the
parties to the litigation that was resolved by said decision. Accordingly, the Dubai
decision can scarcely be enforced against petitioner Pascor. Further, even if the
Dubai decision had on its face purported to be rendered against petitioner
Pascor, we must note that petitioner Pascor has expressly denied that jurisdiction
had ever been acquired by the Dubai court over the person of Pascor in
accordance with the Rules of Procedure applicable before the Dubai
Court. 17 Respondent Rances has not proved the contents of the Dubai Rules of
Procedure governing acquisition of jurisdiction over the person of a non-resident
defendant.

Finally, if it be assumed (arguendo, once more) that the Dubai Court had indeed
acquired jurisdiction over the person of Pascor's foreign principal — Gulf East
Ship Management Ltd. — it still would not follow that Pascor would automatically
be bound by the Dubai decision. The statutory agency (or suretyship) of Pascor
is limited in its reach to the contracts of employment Pascor entered into on
behalf of its principal with persons like respondent Rances. 18 Such statutory
inability does not extend to liability for judgments secured against Gulf East Ship
Management Ltd., in suits brought against Gulf East outside Philippine territorial
jurisdiction, even though such a suit may involve a contract of employment with a
Filipino seaman.

We conclude that the POEA acted without or in excess of jurisdiction in rendering

its Decision dated 14 April 1986 and its Order dated 20 May 1986, and that
public respondent NLRC similarly acted without or in excess of jurisdiction in
rendering its Orders dated 14 August 1986 and 19 November 1986 denying
petitioner's appeal and Motion for Reconsideration. This, however, is without
G.R. No. 178551 October 11, 2010
ATCI OVERSEAS CORPORATION, AMALIA G. IKDAL and MINISTRY OF
PUBLIC HEALTH-KUWAITPetitioners,
vs.
MA. JOSEFA ECHIN, Respondent.
DECISION
CARPIO MORALES, J.:
Josefina Echin (respondent) was hired by petitioner ATCI Overseas Corporation
in behalf of its principal-co-petitioner, the Ministry of Public Health of Kuwait (the
Ministry), for the position of medical technologist under a two-year contract,
denominated as a Memorandum of Agreement (MOA), with a monthly salary of
US$1,200.00.
Under the MOA,1 all newly-hired employees undergo a probationary period of
one (1) year and are covered by Kuwait’s Civil Service Board Employment
Contract No. 2.
Respondent was deployed on February 17, 2000 but was terminated from
employment on February 11, 2001, she not having allegedly passed the
probationary period.
As the Ministry denied respondent’s request for reconsideration, she returned to
the Philippines on March 17, 2001, shouldering her own air fare.
On July 27, 2001, respondent filed with the National Labor Relations Commission
(NLRC) a complaint2 for illegal dismissal against petitioner ATCI as the local
recruitment agency, represented by petitioner, Amalia Ikdal (Ikdal), and the
Ministry, as the foreign principal.
By Decision3 of November 29, 2002, the Labor Arbiter, finding that petitioners
neither showed that there was just cause to warrant respondent’s dismissal nor
that she failed to qualify as a regular employee, held that respondent was illegally
dismissed and accordingly ordered petitioners to pay her US$3,600.00,
representing her salary for the three months unexpired portion of her contract.
On appeal of petitioners ATCI and Ikdal, the NLRC affirmed the Labor Arbiter’s
decision by Resolution4 of January 26, 2004. Petitioners’ motion for
reconsideration having been denied by Resolution 5 of April 22, 2004, they
appealed to the Court of Appeals, contending that their principal, the Ministry,
being a foreign government agency, is immune from suit and, as such, the
immunity extended to them; and that respondent was validly dismissed for her
failure to meet the performance rating within the one-year period as required
under Kuwait’s Civil Service Laws. Petitioners further contended that Ikdal should
not be liable as an officer of petitioner ATCI.
By Decision6 of March 30, 2007, the appellate court affirmed the NLRC
Resolution.
In brushing aside petitioners’ contention that they only acted as agent of the
Ministry and that they cannot be held jointly and solidarily liable with it, the
appellate court noted that under the law, a private employment agency shall
assume all responsibilities for the implementation of the contract of employment
of an overseas worker, hence, it can be sued jointly and severally with the foreign
principal for any violation of the recruitment agreement or contract of
employment.
As to Ikdal’s liability, the appellate court held that under Sec. 10 of Republic Act
No. 8042, the "Migrant and Overseas Filipinos’ Act of 1995," corporate officers,
directors and partners of a recruitment agency may themselves be jointly and
solidarily liable with the recruitment agency for money claims and damages
awarded to overseas workers.
Petitioners’ motion for reconsideration having been denied by the appellate court
by Resolution7 of June 27, 2007, the present petition for review on certiorari was
filed.
Petitioners maintain that they should not be held liable because respondent’s
employment contract specifically stipulates that her employment shall be
governed by the Civil Service Law and Regulations of Kuwait. They thus
conclude that it was patent error for the labor tribunals and the appellate court to
apply the Labor Code provisions governing probationary employment in deciding
the present case.
Further, petitioners argue that even the Philippine Overseas Employment Act
(POEA) Rules relative to master employment contracts (Part III, Sec. 2 of the
POEA Rules and Regulations) accord respect to the "customs, practices,
company policies and labor laws and legislation of the host country."
Finally, petitioners posit that assuming arguendo that Philippine labor laws are
applicable, given that the foreign principal is a government agency which is
immune from suit, as in fact it did not sign any document agreeing to be held
jointly and solidarily liable, petitioner ATCI cannot likewise be held liable, more so
since the Ministry’s liability had not been judicially determined as jurisdiction was
not acquired over it.
The petition fails.
Petitioner ATCI, as a private recruitment agency, cannot evade responsibility for
the money claims of Overseas Filipino workers (OFWs) which it deploys abroad
by the mere expediency of claiming that its foreign principal is a government
agency clothed with immunity from suit, or that such foreign principal’s liability
must first be established before it, as agent, can be held jointly and solidarily
liable.
In providing for the joint and solidary liability of private recruitment agencies with
their foreign principals, Republic Act No. 8042 precisely affords the OFWs with a
recourse and assures them of immediate and sufficient payment of what is due
them. Skippers United Pacific v. Maguad8 explains:
. . . [T]he obligations covenanted in the recruitment agreement entered into
by and between the local agent and its foreign principal are not
coterminous with the term of such agreement so that if either or both of the
parties decide to end the agreement, the responsibilities of such parties towards
the contracted employees under the agreement do not at all end, but the same
extends up to and until the expiration of the employment contracts of the
employees recruited and employed pursuant to the said recruitment
agreement. Otherwise, this will render nugatory the very purpose for which
the law governing the employment of workers for foreign jobs abroad was
enacted. (emphasis supplied)
The imposition of joint and solidary liability is in line with the policy of the state to
protect and alleviate the plight of the working class.9 Verily, to allow petitioners to
simply invoke the immunity from suit of its foreign principal or to wait for the
judicial determination of the foreign principal’s liability before petitioner can be
held liable renders the law on joint and solidary liability inutile.
As to petitioners’ contentions that Philippine labor laws on probationary
employment are not applicable since it was expressly provided in respondent’s
employment contract, which she voluntarily entered into, that the terms of her
engagement shall be governed by prevailing Kuwaiti Civil Service Laws and
Regulations as in fact POEA Rules accord respect to such rules, customs and
practices of the host country, the same was not substantiated.
Indeed, a contract freely entered into is considered the law between the parties
who can establish stipulations, clauses, terms and conditions as they may deem
convenient, including the laws which they wish to govern their respective
obligations, as long as they are not contrary to law, morals, good customs, public
order or public policy.
It is hornbook principle, however, that the party invoking the application of a
foreign law has the burden of proving the law, under the doctrine of processual
presumption which, in this case, petitioners failed to discharge. The Court’s ruling
in EDI-Staffbuilders Int’l., v. NLRC10 illuminates:
In the present case, the employment contract signed by Gran specifically states
that Saudi Labor Laws will govern matters not provided for in the contract (e.g.
specific causes for termination, termination procedures, etc.). Being the law
intended by the parties (lex loci intentiones) to apply to the contract, Saudi Labor
Laws should govern all matters relating to the termination of the employment of
Gran.
In international law, the party who wants to have a foreign law applied to a
dispute or case has the burden of proving the foreign law. The foreign law is
treated as a question of fact to be properly pleaded and proved as the judge or
labor arbiter cannot take judicial notice of a foreign law. He is presumed to know
only domestic or forum law.
Unfortunately for petitioner, it did not prove the pertinent Saudi laws on the
matter; thus, the International Law doctrine of presumed-identity
approach or processual presumption comes into play. Where a foreign law is not
pleaded or, even if pleaded, is not proved, the presumption is that foreign law is
the same as ours. Thus, we apply Philippine labor laws in determining the issues
presented before us. (emphasis and underscoring supplied)
The Philippines does not take judicial notice of foreign laws, hence, they must not
only be alleged; they must be proven. To prove a foreign law, the party invoking it
must present a copy thereof and comply with Sections 24 and 25 of Rule 132 of
the Revised Rules of Court which reads:
SEC. 24. Proof of official record. — The record of public documents referred to in
paragraph (a) of Section 19, when admissible for any purpose, may be
evidenced by an official publication thereof or by a copy attested by the officer
having the legal custody of the record, or by his deputy, and accompanied, if the
record is not kept in the Philippines, with a certificate that such officer has the
custody. If the office in which the record is kept is in a foreign country, the
certificate may be made by a secretary of the embassy or legation, consul
general, consul, vice consul, or consular agent or by any officer in the foreign
service of the Philippines stationed in the foreign country in which the record is
kept, and authenticated by the seal of his office. (emphasis supplied)
SEC. 25. What attestation of copy must state. — Whenever a copy of a
document or record is attested for the purpose of the evidence, the attestation
must state, in substance, that the copy is a correct copy of the original, or a
specific part thereof, as the case may be. The attestation must be under the
official seal of the attesting officer, if there be any, or if he be the clerk of a court
having a seal, under the seal of such court.
To prove the Kuwaiti law, petitioners submitted the following: MOA between
respondent and the Ministry, as represented by ATCI, which provides that the
employee is subject to a probationary period of one (1) year and that the host
country’s Civil Service Laws and Regulations apply; a translated copy11 (Arabic
to English) of the termination letter to respondent stating that she did not pass
the probation terms, without specifying the grounds therefor, and a translated
copy of the certificate of termination,12 both of which documents were certified by
Mr. Mustapha Alawi, Head of the Department of Foreign Affairs-Office of WHEREFORE, the petition is DENIED.
Consular Affairs Inslamic Certification and Translation Unit; and respondent’s
letter13 of reconsideration to the Ministry, wherein she noted that in her first eight
(8) months of employment, she was given a rating of "Excellent" albeit it changed
due to changes in her shift of work schedule.

These documents, whether taken singly or as a whole, do not sufficiently prove

that respondent was validly terminated as a probationary employee under
Kuwaiti civil service laws. Instead of submitting a copy of the pertinent
Kuwaiti labor laws duly authenticated and translated by Embassy officials
thereat, as required under the Rules, what petitioners submitted were mere
certifications attesting only to the correctness of the translations of the
MOA and the termination letter which does not prove at all that Kuwaiti civil
service laws differ from Philippine laws and that under such Kuwaiti laws,
respondent was validly terminated. Thus the subject certifications read:

xxxx

This is to certify that the herein attached translation/s from Arabic to

English/Tagalog and or vice versa was/were presented to this Office for review
and certification and the same was/were found to be in order. This Office,
however, assumes no responsibility as to the contents of the document/s.

This certification is being issued upon request of the interested party for whatever
legal purpose it may serve. (emphasis supplied)1avvphi1

Respecting Ikdal’s joint and solidary liability as a corporate officer, the same is in
order too following the express provision of R.A. 8042 on money claims, viz:

SEC. 10. Money Claims.—Notwithstanding any provision of law to the contrary,

the Labor Arbiters of the National Labor Relations Commission (NLRC) shall
have the original and exclusive jurisdiction to hear and decide, within ninety (90)
calendar days after the filing of the complaint, the claims arising out of an
employer-employee relationship or by virtue of any law or contract involving
Filipino workers for overseas deployment including claims for actual moral,
exemplary and other forms of damages.

The liability of the principal/employer and the recruitment/placement agency for

any and all claims under this section shall be joint and several. This provision
shall be incorporated in the contract for overseas employment and shall be a
condition precedent for its approval. The performance bond to be filed by the
recruitment/placement agency, as provided by law, shall be answerable for all
money claims or damages that may be awarded to the workers. If the
recruitment/placement agency is a juridical being, the corporate officers and
directors and partners as the case may be, shall themselves be jointly and
solidarily liable with the corporation or partnership for the aforesaid claims and
damages. (emphasis and underscoring supplied)