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G.R. No.

L-63915 December 29, 1986

LORENZO M. TAÑ;ADA, ABRAHAM F. SARMIENTO, and MOVEMENT OF


ATTORNEYS FOR BROTHERHOOD, INTEGRITY AND NATIONALISM, INC.
(MABINI), petitioners,
vs.
HON. JUAN C. TUVERA, in his capacity as Executive Assistant to the
President, HON. JOAQUIN VENUS, in his capacity as Deputy Executive
Assistant to the President, MELQUIADES P. DE LA CRUZ, ETC., ET
AL., respondents.

RESOLUTION

CRUZ, J.:

Due process was invoked by the petitioners in demanding the disclosure of a


number of presidential decrees which they claimed had not been published as
required by law. The government argued that while publication was necessary as a
rule, it was not so when it was "otherwise provided," as when the decrees
themselves declared that they were to become effective immediately upon their
approval. In the decision of this case on April 24, 1985, the Court affirmed the
necessity for the publication of some of these decrees, declaring in the dispositive
portion as follows:

WHEREFORE, the Court hereby orders respondents to publish in the Official


Gazette all unpublished presidential issuances which are of general
application, and unless so published, they shall have no binding force and
effect.

The petitioners are now before us again, this time to move for
reconsideration/clarification of that decision. 1Specifically, they ask the following
questions:

1. What is meant by "law of public nature" or "general applicability"?

2. Must a distinction be made between laws of general applicability and laws which
are not?

3. What is meant by "publication"?

4. Where is the publication to be made?

5. When is the publication to be made?

Resolving their own doubts, the petitioners suggest that there should be no
distinction between laws of general applicability and those which are not; that
publication means complete publication; and that the publication must be made
forthwith in the Official Gazette. 2

In the Comment 3 required of the then Solicitor General, he claimed first that the
motion was a request for an advisory opinion and should therefore be dismissed,
and, on the merits, that the clause "unless it is otherwise provided" in Article 2 of
the Civil Code meant that the publication required therein was not always
imperative; that publication, when necessary, did not have to be made in the
Official Gazette; and that in any case the subject decision was concurred in only by
three justices and consequently not binding. This elicited a Reply 4 refuting these
arguments. Came next the February Revolution and the Court required the new
Solicitor General to file a Rejoinder in view of the supervening events, under Rule
3, Section 18, of the Rules of Court. Responding, he submitted that issuances
intended only for the internal administration of a government agency or for
particular persons did not have to be 'Published; that publication when necessary
must be in full and in the Official Gazette; and that, however, the decision under
reconsideration was not binding because it was not supported by eight members of
this Court. 5

The subject of contention is Article 2 of the Civil Code providing as follows:

ART. 2. Laws shall take effect after fifteen days following the completion of
their publication in the Official Gazette, unless it is otherwise provided. This
Code shall take effect one year after such publication.

After a careful study of this provision and of the arguments of the parties, both on
the original petition and on the instant motion, we have come to the conclusion and
so hold, that the clause "unless it is otherwise provided" refers to the date of
effectivity and not to the requirement of publication itself, which cannot in any
event be omitted. This clause does not mean that the legislature may make the law
effective immediately upon approval, or on any other date, without its previous
publication.

Publication is indispensable in every case, but the legislature may in its discretion
provide that the usual fifteen-day period shall be shortened or extended. An
example, as pointed out by the present Chief Justice in his separate concurrence in
the original decision, 6 is the Civil Code which did not become effective after fifteen
days from its publication in the Official Gazette but "one year after such
publication." The general rule did not apply because it was "otherwise provided. "

It is not correct to say that under the disputed clause publication may be dispensed
with altogether. The reason. is that such omission would offend due process insofar
as it would deny the public knowledge of the laws that are supposed to govern the
legislature could validly provide that a law e effective immediately upon its approval
notwithstanding the lack of publication (or after an unreasonably short period after
publication), it is not unlikely that persons not aware of it would be prejudiced as
a result and they would be so not because of a failure to comply with but simply
because they did not know of its existence, Significantly, this is not true only of
penal laws as is commonly supposed. One can think of many non-penal measures,
like a law on prescription, which must also be communicated to the persons they
may affect before they can begin to operate.

We note at this point the conclusive presumption that every person knows the law,
which of course presupposes that the law has been published if the presumption is
to have any legal justification at all. It is no less important to remember that Section
6 of the Bill of Rights recognizes "the right of the people to information on matters
of public concern," and this certainly applies to, among others, and indeed
especially, the legislative enactments of the government.

The term "laws" should refer to all laws and not only to those of general application,
for strictly speaking all laws relate to the people in general albeit there are some
that do not apply to them directly. An example is a law granting citizenship to a
particular individual, like a relative of President Marcos who was decreed instant
naturalization. It surely cannot be said that such a law does not affect the public
although it unquestionably does not apply directly to all the people. The subject of
such law is a matter of public interest which any member of the body politic may
question in the political forums or, if he is a proper party, even in the courts of
justice. In fact, a law without any bearing on the public would be invalid as an
intrusion of privacy or as class legislation or as an ultra vires act of the legislature.
To be valid, the law must invariably affect the public interest even if it might be
directly applicable only to one individual, or some of the people only, and t to the
public as a whole.

We hold therefore that all statutes, including those of local application and private
laws, shall be published as a condition for their effectivity, which shall begin fifteen
days after publication unless a different effectivity date is fixed by the legislature.

Covered by this rule are presidential decrees and executive orders promulgated by
the President in the exercise of legislative powers whenever the same are validly
delegated by the legislature or, at present, directly conferred by the Constitution.
administrative rules and regulations must a also be published if their purpose is to
enforce or implement existing law pursuant also to a valid delegation.

Interpretative regulations and those merely internal in nature, that is, regulating
only the personnel of the administrative agency and not the public, need not be
published. Neither is publication required of the so-called letters of instructions
issued by administrative superiors concerning the rules or guidelines to be followed
by their subordinates in the performance of their duties.

Accordingly, even the charter of a city must be published notwithstanding that it


applies to only a portion of the national territory and directly affects only the
inhabitants of that place. All presidential decrees must be published, including
even, say, those naming a public place after a favored individual or exempting him
from certain prohibitions or requirements. The circulars issued by the Monetary
Board must be published if they are meant not merely to interpret but to "fill in the
details" of the Central Bank Act which that body is supposed to enforce.

However, no publication is required of the instructions issued by, say, the Minister
of Social Welfare on the case studies to be made in petitions for adoption or the
rules laid down by the head of a government agency on the assignments or
workload of his personnel or the wearing of office uniforms. Parenthetically,
municipal ordinances are not covered by this rule but by the Local Government
Code.

We agree that publication must be in full or it is no publication at all since its


purpose is to inform the public of the contents of the laws. As correctly pointed out
by the petitioners, the mere mention of the number of the presidential decree, the
title of such decree, its whereabouts (e.g., "with Secretary Tuvera"), the supposed
date of effectivity, and in a mere supplement of the Official Gazette cannot satisfy
the publication requirement. This is not even substantial compliance. This was the
manner, incidentally, in which the General Appropriations Act for FY 1975, a
presidential decree undeniably of general applicability and interest, was "published"
by the Marcos administration. 7 The evident purpose was to withhold rather than
disclose information on this vital law.

Coming now to the original decision, it is true that only four justices were
categorically for publication in the Official Gazette 8 and that six others felt that
publication could be made elsewhere as long as the people were sufficiently
informed. 9 One reserved his vote 10 and another merely acknowledged the need
for due publication without indicating where it should be made. 11 It is therefore
necessary for the present membership of this Court to arrive at a clear consensus
on this matter and to lay down a binding decision supported by the necessary vote.
There is much to be said of the view that the publication need not be made in the
Official Gazette, considering its erratic releases and limited readership.
Undoubtedly, newspapers of general circulation could better perform the function
of communicating, the laws to the people as such periodicals are more easily
available, have a wider readership, and come out regularly. The trouble, though, is
that this kind of publication is not the one required or authorized by existing law.
As far as we know, no amendment has been made of Article 2 of the Civil Code.
The Solicitor General has not pointed to such a law, and we have no information
that it exists. If it does, it obviously has not yet been published.

At any rate, this Court is not called upon to rule upon the wisdom of a law or to
repeal or modify it if we find it impractical. That is not our function. That function
belongs to the legislature. Our task is merely to interpret and apply the law as
conceived and approved by the political departments of the government in
accordance with the prescribed procedure. Consequently, we have no choice but to
pronounce that under Article 2 of the Civil Code, the publication of laws must be
made in the Official Gazett and not elsewhere, as a requirement for their effectivity
after fifteen days from such publication or after a different period provided by the
legislature.

We also hold that the publication must be made forthwith or at least as soon as
possible, to give effect to the law pursuant to the said Article 2. There is that
possibility, of course, although not suggested by the parties that a law could be
rendered unenforceable by a mere refusal of the executive, for whatever reason,
to cause its publication as required. This is a matter, however, that we do not need
to examine at this time.

Finally, the claim of the former Solicitor General that the instant motion is a request
for an advisory opinion is untenable, to say the least, and deserves no further
comment.

The days of the secret laws and the unpublished decrees are over. This is once
again an open society, with all the acts of the government subject to public scrutiny
and available always to public cognizance. This has to be so if our country is to
remain democratic, with sovereignty residing in the people and all government
authority emanating from them.

Although they have delegated the power of legislation, they retain the authority to
review the work of their delegates and to ratify or reject it according to their lights,
through their freedom of expression and their right of suffrage. This they cannot
do if the acts of the legislature are concealed.

Laws must come out in the open in the clear light of the sun instead of skulking in
the shadows with their dark, deep secrets. Mysterious pronouncements and
rumored rules cannot be recognized as binding unless their existence and contents
are confirmed by a valid publication intended to make full disclosure and give
proper notice to the people. The furtive law is like a scabbarded saber that cannot
feint parry or cut unless the naked blade is drawn.

WHEREFORE, it is hereby declared that all laws as above defined shall immediately
upon their approval, or as soon thereafter as possible, be published in full in the
Official Gazette, to become effective only after fifteen days from their publication,
or on another date specified by the legislature, in accordance with Article 2 of the
Civil Code. SO ORDERED.
G.R. No. 80718 January 29, 1988

FELIZA P. DE ROY and VIRGILIO RAMOS, petitioners,


vs.
COURT OF APPEALS and LUIS BERNAL, SR., GLENIA BERNAL, LUIS
BERNAL, JR., HEIRS OF MARISSA BERNAL, namely, GLICERIA DELA CRUZ
BERNAL and LUIS BERNAL, SR., respondents.

RESOLUTION

CORTES, J.:

This special civil action for certiorari seeks to declare null and void two (2)
resolutions of the Special First Division of the Court of Appeals in the case of Luis
Bernal, Sr., et al. v. Felisa Perdosa De Roy, et al., CA-G.R. CV No. 07286. The first
resolution promulgated on 30 September 1987 denied petitioners' motion for
extension of time to file a motion for reconsideration and directed entry of judgment
since the decision in said case had become final; and the second Resolution dated
27 October 1987 denied petitioners' motion for reconsideration for having been
filed out of time.

At the outset, this Court could have denied the petition outright for not being
verified as required by Rule 65 section 1 of the Rules of Court. However, even if
the instant petition did not suffer from this defect, this Court, on procedural and
substantive grounds, would still resolve to deny it.

The facts of the case are undisputed. The firewall of a burned-out building owned
by petitioners collapsed and destroyed the tailoring shop occupied by the family of
private respondents, resulting in injuries to private respondents and the death of
Marissa Bernal, a daughter. Private respondents had been warned by petitioners to
vacate their shop in view of its proximity to the weakened wall but the former failed
to do so. On the basis of the foregoing facts, the Regional Trial Court. First Judicial
Region, Branch XXXVIII, presided by the Hon. Antonio M. Belen, rendered
judgment finding petitioners guilty of gross negligence and awarding damages to
private respondents. On appeal, the decision of the trial court was affirmed in toto
by the Court of Appeals in a decision promulgated on August 17, 1987, a copy of
which was received by petitioners on August 25, 1987. On September 9, 1987, the
last day of the fifteen-day period to file an appeal, petitioners filed a motion for
extension of time to file a motion for reconsideration, which was eventually denied
by the appellate court in the Resolution of September 30, 1987. Petitioners filed
their motion for reconsideration on September 24, 1987 but this was denied in the
Resolution of October 27, 1987.

This Court finds that the Court of Appeals did not commit a grave abuse of
discretion when it denied petitioners' motion for extension of time to file a motion
for reconsideration, directed entry of judgment and denied their motion for
reconsideration. It correctly applied the rule laid down in Habaluyas Enterprises,
Inc. v. Japzon, [G.R. No. 70895, August 5, 1985,138 SCRA 461, that the fifteen-
day period for appealing or for filing a motion for reconsideration cannot be
extended. In its Resolution denying the motion for reconsideration, promulgated
on July 30, 1986 (142 SCRA 208), this Court en banc restated and clarified the
rule, to wit:

Beginning one month after the promulgation of this Resolution, the rule shall be
strictly enforced that no motion for extension of time to file a motion for
reconsideration may be filed with the Metropolitan or Municipal Trial Courts, the
Regional Trial Courts, and the Intermediate Appellate Court. Such a motion may be
filed only in cases pending with the Supreme Court as the court of last resort, which
may in its sound discretion either grant or deny the extension requested. (at p.
212)

Lacsamana v. Second Special Cases Division of the intermediate Appellate


Court, [G.R. No. 73146-53, August 26, 1986, 143 SCRA 643], reiterated the rule
and went further to restate and clarify the modes and periods of appeal.

Bacaya v. Intermediate Appellate Court, [G.R. No. 74824, Sept. 15, 1986,144
SCRA 161],stressed the prospective application of said rule, and explained the
operation of the grace period, to wit:

In other words, there is a one-month grace period from the


promulgation on May 30, 1986 of the Court's Resolution in the
clarificatory Habaluyas case, or up to June 30, 1986, within which the
rule barring extensions of time to file motions for new trial or
reconsideration is, as yet, not strictly enforceable.

Since petitioners herein filed their motion for extension on February 27,
1986, it is still within the grace period, which expired on June 30, 1986,
and may still be allowed.

This grace period was also applied in Mission v. Intermediate Appellate Court [G.R.
No. 73669, October 28, 1986, 145 SCRA 306].]

In the instant case, however, petitioners' motion for extension of time was filed on
September 9, 1987, more than a year after the expiration of the grace period on
June 30, 1986. Hence, it is no longer within the coverage of the grace period.
Considering the length of time from the expiration of the grace period to the
promulgation of the decision of the Court of Appeals on August 25, 1987,
petitioners cannot seek refuge in the ignorance of their counsel regarding said rule
for their failure to file a motion for reconsideration within the reglementary period.

Petitioners contend that the rule enunciated in the Habaluyas case should not be
made to apply to the case at bar owing to the non-publication of
the Habaluyas decision in the Official Gazette as of the time the subject decision of
the Court of Appeals was promulgated. Contrary to petitioners' view, there is no
law requiring the publication of Supreme Court decisions in the Official Gazette
before they can be binding and as a condition to their becoming effective. It is the
bounden duty of counsel as lawyer in active law practice to keep abreast of
decisions of the Supreme Court particularly where issues have been clarified,
consistently reiterated, and published in the advance reports of Supreme Court
decisions (G. R. s) and in such publications as the Supreme Court Reports
Annotated (SCRA) and law journals.

This Court likewise finds that the Court of Appeals committed no grave abuse of
discretion in affirming the trial court's decision holding petitioner liable under Article
2190 of the Civil Code, which provides that "the proprietor of a building or structure
is responsible for the damage resulting from its total or partial collapse, if it should
be due to the lack of necessary repairs.

Nor was there error in rejecting petitioners argument that private respondents had
the "last clear chance" to avoid the accident if only they heeded the. warning to
vacate the tailoring shop and , therefore, petitioners prior negligence should be
disregarded, since the doctrine of "last clear chance," which has been applied to
vehicular accidents, is inapplicable to this case. WHEREFORE, in view of the
foregoing, the Court Resolved to DENY the instant petition for lack of merit.
[A.M. No. MTJ-00-1329. March 8, 2001]

HERMINIA BORJA-MANZANO, petitioner, vs. JUDGE ROQUE R. SANCHEZ,


MTC, Infanta, Pangasinan, respondent.

RESOLUTION
DAVIDE, JR., C.J.:

The solemnization of a marriage between two contracting parties who were both
bound by a prior existing marriage is the bone of contention of the instant complaint
against respondent Judge Roque R. Sanchez, Municipal Trial Court, Infanta,
Pangasinan. For this act, complainant Herminia Borja-Manzano charges respondent
Judge with gross ignorance of the law in a sworn Complaint-Affidavit filed with the
Office of the Court Administrator on 12 May 1999.
Complainant avers that she was the lawful wife of the late David Manzano,
having been married to him on 21 May 1966 in San Gabriel Archangel Parish,
Araneta Avenue, Caloocan City.[1] Four children were born out of that
marriage.[2] On 22 March 1993, however, her husband contracted another marriage
with one Luzviminda Payao before respondent Judge. [3] When respondent Judge
solemnized said marriage, he knew or ought to know that the same was void and
bigamous, as the marriage contract clearly stated that both contracting parties
were separated.
Respondent Judge, on the other hand, claims in his Comment that when he
officiated the marriage between Manzano and Payao he did not know that Manzano
was legally married. What he knew was that the two had been living together as
husband and wife for seven years already without the benefit of marriage, as
manifested in their joint affidavit.[4] According to him, had he known that the late
Manzano was married, he would have advised the latter not to marry again;
otherwise, he (Manzano) could be charged with bigamy. He then prayed that the
complaint be dismissed for lack of merit and for being designed merely to harass
him.
After an evaluation of the Complaint and the Comment, the Court Administrator
recommended that respondent Judge be found guilty of gross ignorance of the law
and be ordered to pay a fine of P2,000, with a warning that a repetition of the same
or similar act would be dealt with more severely.
On 25 October 2000, this Court required the parties to manifest whether they
were willing to submit the case for resolution on the basis of the pleadings thus
filed. Complainant answered in the affirmative.
For his part, respondent Judge filed a Manifestation reiterating his plea for the
dismissal of the complaint and setting aside his earlier Comment. He therein invites
the attention of the Court to two separate affidavits [5] of the late Manzano and of
Payao, which were allegedly unearthed by a member of his staff upon his
instruction. In those affidavits, both David Manzano and Luzviminda Payao
expressly stated that they were married to Herminia Borja and Domingo Relos,
respectively; and that since their respective marriages had been marked by
constant quarrels, they had both left their families and had never cohabited or
communicated with their spouses anymore. Respondent Judge alleges that on the
basis of those affidavits, he agreed to solemnize the marriage in question in
accordance with Article 34 of the Family Code.
We find merit in the complaint.
Article 34 of the Family Code provides:

No license shall be necessary for the marriage of a man and a woman who have
lived together as husband and wife for at least five years and without any legal
impediment to marry each other. The contracting parties shall state the foregoing
facts in an affidavit before any person authorized by law to administer oaths. The
solemnizing officer shall also state under oath that he ascertained the qualifications
of the contracting parties and found no legal impediment to the marriage.

For this provision on legal ratification of marital cohabitation to apply, the


following requisites must concur:
1. The man and woman must have been living together as husband and wife
for at least five years before the marriage;
2. The parties must have no legal impediment to marry each other;
3. The fact of absence of legal impediment between the parties must be
present at the time of marriage;
4. The parties must execute an affidavit stating that they have lived together
for at least five years [and are without legal impediment to marry each
other]; and
5. The solemnizing officer must execute a sworn statement that he had
ascertained the qualifications of the parties and that he had found no legal
impediment to their marriage.[6]
Not all of these requirements are present in the case at bar. It is significant to
note that in their separate affidavits executed on 22 March 1993 and sworn to
before respondent Judge himself, David Manzano and Luzviminda Payao expressly
stated the fact of their prior existing marriage. Also, in their marriage contract, it
was indicated that both were separated.
Respondent Judge knew or ought to know that a subsisting previous marriage
is a diriment impediment, which would make the subsequent marriage null and
void.[7] In fact, in his Comment, he stated that had he known that the late Manzano
was married he would have discouraged him from contracting another
marriage. And respondent Judge cannot deny knowledge of Manzanos and Payaos
subsisting previous marriage, as the same was clearly stated in their separate
affidavits which were subscribed and sworn to before him.
The fact that Manzano and Payao had been living apart from their respective
spouses for a long time already is immaterial. Article 63(1) of the Family Code
allows spouses who have obtained a decree of legal separation to live separately
from each other, but in such a case the marriage bonds are not
severed. Elsewise stated, legal separation does not dissolve the marriage tie,
much less authorize the parties to remarry. This holds true all the more when the
separation is merely de facto, as in the case at bar.
Neither can respondent Judge take refuge on the Joint Affidavit of David
Manzano and Luzviminda Payao stating that they had been cohabiting as husband
and wife for seven years. Just like separation, free and voluntary cohabitation with
another person for at least five years does not severe the tie of a subsisting
previous marriage. Marital cohabitation for a long period of time between two
individuals who are legally capacitated to marry each other is merely a ground
for exemption from marriage license. It could not serve as a justification for
respondent Judge to solemnize a subsequent marriage vitiated by the impediment
of a prior existing marriage.
Clearly, respondent Judge demonstrated gross ignorance of the law when he
solemnized a void and bigamous marriage. The maxim ignorance of the law
excuses no one has special application to judges,[8] who, under Rule 1.01 of the
Code of Judicial Conduct, should be the embodiment of competence, integrity, and
independence. It is highly imperative that judges be conversant with the law and
basic legal principles.[9] And when the law transgressed is simple and elementary,
the failure to know it constitutes gross ignorance of the law.[10]
ACCORDINGLY, the recommendation of the Court Administrator is hereby
ADOPTED, with the MODIFICATION that the amount of fine to be imposed upon
respondent Judge Roque Sanchez is increased to P20,000. SO ORDERED.
A.M. No. MTJ-92-706 March 29, 1995

LUPO ALMODIEL ATIENZA, complainant,


vs.
JUDGE FRANCISCO F. BRILLANTES, JR., Metropolitan Trial Court, Branch
28, Manila, respondent.

QUIASON, J.:

This is a complaint by Lupo A. Atienza for Gross Immorality and Appearance of


Impropriety against Judge Francisco Brillantes, Jr., Presiding Judge of the
Metropolitan Trial Court, Branch 20, Manila.

Complainant alleges that he has two children with Yolanda De Castro, who are living
together at No. 34 Galaxy Street, Bel-Air Subdivision, Makati, Metro Manila. He
stays in said house, which he purchased in 1987, whenever he is in Manila.

In December 1991, upon opening the door to his bedroom, he saw respondent
sleeping on his (complainant's) bed. Upon inquiry, he was told by the houseboy
that respondent had been cohabiting with De Castro. Complainant did not bother
to wake up respondent and instead left the house after giving instructions to his
houseboy to take care of his children.

Thereafter, respondent prevented him from visiting his children and even alienated
the affection of his children for him.

Complainant claims that respondent is married to one Zenaida Ongkiko with whom
he has five children, as appearing in his 1986 and 1991 sworn statements of assets
and liabilities. Furthermore, he alleges that respondent caused his arrest on
January 13, 1992, after he had a heated argument with De Castro inside the latter's
office.

For his part, respondent alleges that complainant was not married to De Castro and
that the filing of the administrative action was related to complainant's claim on
the Bel-Air residence, which was disputed by De Castro.

Respondent denies that he caused complainant's arrest and claims that he was
even a witness to the withdrawal of the complaint for Grave Slander filed by De
Castro against complainant. According to him, it was the sister of De Castro who
called the police to arrest complainant.

Respondent also denies having been married to Ongkiko, although he admits


having five children with her. He alleges that while he and Ongkiko went through a
marriage ceremony before a Nueva Ecija town mayor on April 25, 1965, the same
was not a valid marriage for lack of a marriage license. Upon the request of the
parents of Ongkiko, respondent went through another marriage ceremony with her
in Manila on June 5, 1965. Again, neither party applied for a marriage license.
Ongkiko abandoned respondent 17 years ago, leaving their children to his care and
custody as a single parent.

Respondent claims that when he married De Castro in civil rites in Los Angeles,
California on December 4, 1991, he believed, in all good faith and for all legal
intents and purposes, that he was single because his first marriage was solemnized
without a license.
Under the Family Code, there must be a judicial declaration of the nullity of a
previous marriage before a party thereto can enter into a second marriage. Article
40 of said Code provides:

The absolute nullity of a previous marriage may be invoked for the


purposes of remarriage on the basis solely of a final judgment declaring
such previous marriage void.

Respondent argues that the provision of Article 40 of the Family Code does not
apply to him considering that his first marriage took place in 1965 and was
governed by the Civil Code of the Philippines; while the second marriage took place
in 1991 and governed by the Family Code.

Article 40 is applicable to remarriages entered into after the effectivity of the Family
Code on August 3, 1988 regardless of the date of the first marriage. Besides, under
Article 256 of the Family Code, said Article is given "retroactive effect insofar as it
does not prejudice or impair vested or acquired rights in accordance with the Civil
Code or other laws." This is particularly true with Article 40, which is a rule of
procedure. Respondent has not shown any vested right that was impaired by the
application of Article 40 to his case.

The fact that procedural statutes may somehow affect the litigants' rights may not
preclude their retroactive application to pending actions. The retroactive application
of procedural laws is not violative of any right of a person who may feel that he is
adversely affected (Gregorio v. Court of Appeals, 26 SCRA 229 [1968]). The reason
is that as a general rule no vested right may attach to, nor arise from, procedural
laws (Billones v. Court of Industrial Relations, 14 SCRA 674 [1965]).

Respondent is the last person allowed to invoke good faith. He made a mockery of
the institution of marriage and employed deceit to be able to cohabit with a woman,
who beget him five children.

Respondent passed the Bar examinations in 1962 and was admitted to the practice
of law in 1963. At the time he went through the two marriage ceremonies with
Ongkiko, he was already a lawyer. Yet, he never secured any marriage license. Any
law student would know that a marriage license is necessary before one can get
married. Respondent was given an opportunity to correct the flaw in his first
marriage when he and Ongkiko were married for the second time. His failure to
secure a marriage license on these two occasions betrays his sinister motives and
bad faith.

It is evident that respondent failed to meet the standard of moral fitness for
membership in the legal profession.

While the deceit employed by respondent existed prior to his appointment as a


Metropolitan Trial Judge, his immoral and illegal act of cohabiting with De Castro
began and continued when he was already in the judiciary.

The Code of Judicial Ethics mandates that the conduct of a judge must be free of a
whiff of impropriety, not only with respect to his performance of his judicial duties
but also as to his behavior as a private individual. There is no duality of morality.
A public figure is also judged by his private life. A judge, in order to promote public
confidence in the integrity and impartiality of the judiciary, must behave with
propriety at all times, in the performance of his judicial duties and in his everyday
life. These are judicial guideposts too self-evident to be overlooked. No position
exacts a greater demand on moral righteousness and uprightness of an individual
than a seat in the judiciary (Imbing v. Tiongzon, 229 SCRA 690 [1994]).
WHEREFORE, respondent is DISMISSED from the service with forfeiture of all leave
and retirement benefits and with prejudice to reappointment in any branch,
instrumentality, or agency of the government, including government-owned and
controlled corporations. This decision is immediately executory. SO ORDERED.
[G.R. No. 145391. August 26, 2002]

AVELINO CASUPANAN and ROBERTO CAPITULO, petitioners, vs. MARIO


LLAVORE LAROYA, respondent.

DECISION
CARPIO, J.:

The Case

This is a petition for review on certiorari to set aside the Resolution[1] dated
December 28, 1999 dismissing the petition for certiorari and the Resolution[2] dated
August 24, 2000 denying the motion for reconsideration, both issued by the
Regional Trial Court of Capas, Tarlac, Branch 66, in Special Civil Action No. 17-C
(99).

The Facts

Two vehicles, one driven by respondent Mario Llavore Laroya (Laroya for
brevity) and the other owned by petitioner Roberto Capitulo (Capitulo for brevity)
and driven by petitioner Avelino Casupanan (Casupanan for brevity), figured in an
accident. As a result, two cases were filed with the Municipal Circuit Trial Court
(MCTC for brevity) of Capas, Tarlac. Laroya filed a criminal case against Casupanan
for reckless imprudence resulting in damage to property, docketed as Criminal Case
No. 002-99. On the other hand, Casupanan and Capitulo filed a civil case against
Laroya for quasi-delict, docketed as Civil Case No. 2089.
When the civil case was filed, the criminal case was then at its preliminary
investigation stage. Laroya, defendant in the civil case, filed a motion to dismiss
the civil case on the ground of forum-shopping considering the pendency of the
criminal case. The MCTC granted the motion in the Order of March 26, 1999 and
dismissed the civil case.
On Motion for Reconsideration, Casupanan and Capitulo insisted that the civil
case is a separate civil action which can proceed independently of the criminal case.
The MCTC denied the motion for reconsideration in the Order of May 7,
1999. Casupanan and Capitulo filed a petition for certiorari under Rule 65 before
the Regional Trial Court (Capas RTC for brevity) of Capas, Tarlac, Branch
66,[3] assailing the MCTCs Order of dismissal.

The Trial Courts Ruling

The Capas RTC rendered judgment on December 28, 1999 dismissing the
petition for certiorari for lack of merit. The Capas RTC ruled that the order of
dismissal issued by the MCTC is a final order which disposes of the case and
therefore the proper remedy should have been an appeal. The Capas RTC further
held that a special civil action for certiorari is not a substitute for a lost
appeal. Finally, the Capas RTC declared that even on the premise that the MCTC
erred in dismissing the civil case, such error is a pure error of judgment and not an
abuse of discretion.
Casupanan and Capitulo filed a Motion for Reconsideration but the Capas RTC
denied the same in the Resolution of August 24, 2000.
Hence, this petition.

The Issue

The petition premises the legal issue in this wise:

In a certain vehicular accident involving two parties, each one of them may think
and believe that the accident was caused by the fault of the other. x x x [T]he first
party, believing himself to be the aggrieved party, opted to file a criminal case for
reckless imprudence against the second party. On the other hand, the second
party, together with his operator, believing themselves to be the real aggrieved
parties, opted in turn to file a civil case for quasi-delict against the first party who
is the very private complainant in the criminal case.[4]

Thus, the issue raised is whether an accused in a pending criminal case for
reckless imprudence can validly file, simultaneously and independently, a separate
civil action for quasi-delict against the private complainant in the criminal case.

The Courts Ruling

Casupanan and Capitulo assert that Civil Case No. 2089, which the MCTC
dismissed on the ground of forum-shopping, constitutes a counterclaim in the
criminal case. Casupanan and Capitulo argue that if the accused in a criminal case
has a counterclaim against the private complainant, he may file the counterclaim
in a separate civil action at the proper time.They contend that an action on quasi-
delict is different from an action resulting from the crime of reckless imprudence,
and an accused in a criminal case can be an aggrieved party in a civil case arising
from the same incident. They maintain that under Articles 31 and 2176 of the Civil
Code, the civil case can proceed independently of the criminal action. Finally, they
point out that Casupanan was not the only one who filed the independent civil
action based on quasi-delict but also Capitulo, the owner-operator of the vehicle,
who was not a party in the criminal case.
In his Comment, Laroya claims that the petition is fatally defective as it does
not state the real antecedents. Laroya further alleges that Casupanan and Capitulo
forfeited their right to question the order of dismissal when they failed to avail of
the proper remedy of appeal. Laroya argues that there is no question of law to be
resolved as the order of dismissal is already final and a petition for certiorari is not
a substitute for a lapsed appeal.
In their Reply, Casupanan and Capitulo contend that the petition raises the legal
question of whether there is forum-shopping since they filed only one action - the
independent civil action for quasi-delict against Laroya.
Nature of the Order of Dismissal
The MCTC dismissed the civil action for quasi-delict on the ground of forum-
shopping under Supreme Court Administrative Circular No. 04-94. The MCTC did
not state in its order of dismissal[5] that the dismissal was with prejudice. Under
the Administrative Circular, the order of dismissal is without prejudice to refiling
the complaint, unless the order of dismissal expressly states it is with
prejudice.[6] Absent a declaration that the dismissal is with prejudice, the same is
deemed without prejudice. Thus, the MCTCs dismissal, being silent on the matter,
is a dismissal without prejudice.
Section 1 of Rule 41[7] provides that an order dismissing an action without
prejudice is not appealable. The remedy of the aggrieved party is to file a special
civil action under Rule 65.Section 1 of Rule 41 expressly states that where the
judgment or final order is not appealable, the aggrieved party may file an
appropriate special civil action under Rule 65. Clearly, the Capas RTCs order
dismissing the petition for certiorari, on the ground that the proper remedy is an
ordinary appeal, is erroneous.
Forum-Shopping
The essence of forum-shopping is the filing of multiple suits involving the same
parties for the same cause of action, either simultaneously or successively, to
secure a favorable judgment.[8] Forum-shopping is present when in the two or more
cases pending, there is identity of parties, rights of action and reliefs
sought.[9] However, there is no forum-shopping in the instant case because the law
and the rules expressly allow the filing of a separate civil action which can proceed
independently of the criminal action.
Laroya filed the criminal case for reckless imprudence resulting in damage to
property based on the Revised Penal Code while Casupanan and Capitulo filed the
civil action for damages based on Article 2176 of the Civil Code. Although these
two actions arose from the same act or omission, they have different causes of
action. The criminal case is based on culpa criminal punishable under the Revised
Penal Code while the civil case is based on culpa aquiliana actionable under Articles
2176 and 2177 of the Civil Code. These articles on culpa aquiliana read:

Art. 2176. Whoever by act or omission causes damage to another, there being fault
or negligence, is obliged to pay for the damage done. Such fault or negligence, if
there is no pre-existing contractual relation between the parties, is called a quasi-
delict and is governed by the provisions of this Chapter.

Art. 2177. Responsibility for fault or negligence under the preceding article is
entirely separate and distinct from the civil liability arising from negligence under
the Penal Code. But the plaintiff cannot recover damages twice for the same act or
omission of the defendant.

Any aggrieved person can invoke these articles provided he proves, by


preponderance of evidence, that he has suffered damage because of the fault or
negligence of another.Either the private complainant or the accused can file a
separate civil action under these articles. There is nothing in the law or rules that
state only the private complainant in a criminal case may invoke these articles.
Moreover, paragraph 6, Section 1, Rule 111 of the 2000 Rules on Criminal
Procedure (2000 Rules for brevity) expressly requires the accused to litigate his
counterclaim in a separate civil action, to wit:

SECTION 1. Institution of criminal and civil actions. (a) x x x.

No counterclaim, cross-claim or third-party complaint may be filed by the accused


in the criminal case, but any cause of action which could have been the subject
thereof may be litigated in a separate civil action. (Emphasis supplied)

Since the present Rules require the accused in a criminal action to file his
counterclaim in a separate civil action, there can be no forum-shopping if the
accused files such separate civil action.
Filing of a separate civil action
Section 1, Rule 111 of the 1985 Rules on Criminal Procedure (1985 Rules for
brevity), as amended in 1988, allowed the filing of a separate civil action
independently of the criminal action provided the offended party reserved the right
to file such civil action. Unless the offended party reserved the civil action before
the presentation of the evidence for the prosecution, all civil actions arising from
the same act or omission were deemed impliedly instituted in the criminal
case. These civil actions referred to the recovery of civil liability ex-delicto, the
recovery of damages for quasi-delict, and the recovery of damages for violation of
Articles 32, 33 and 34 of the Civil Code on Human Relations.
Thus, to file a separate and independent civil action for quasi-delict under the
1985 Rules, the offended party had to reserve in the criminal action the right to
bring such action. Otherwise, such civil action was deemed impliedly instituted in
the criminal action. Section 1, Rule 111 of the 1985 Rules provided as follows:

Section 1. Institution of criminal and civil actions. When a criminal action is


instituted, the civil action for the recovery of civil liability is impliedly instituted with
the criminal action, unless the offended party waives the action, reserves his right
to institute it separately, or institutes the civil action prior to the criminal action.

Such civil action includes recovery of indemnity under the Revised Penal
Code, and damages under Articles 32, 33, 34 and 2176 of the Civil Code of
the Philippines arising from the same act or omission of the accused.

A waiver of any of the civil actions extinguishes the others. The institution of, or
the reservation of the right to file, any of said civil actions separately waives the
others.

The reservation of the right to institute the separate civil actions shall be made
before the prosecution starts to present its evidence and under circumstances
affording the offended party a reasonable opportunity to make such reservation.

In no case may the offended party recover damages twice for the same act or
omission of the accused.

x x x. (Emphasis supplied)

Section 1, Rule 111 of the 1985 Rules was amended on December 1, 2000 and
now provides as follows:

SECTION 1. Institution of criminal and civil actions. (a) When a criminal action is
instituted, the civil action for the recovery of civil liability arising from the
offense charged shall be deemed instituted with the criminal action unless
the offended party waives the civil action, reserves the right to institute it
separately or institutes the civil action prior to the criminal action.

The reservation of the right to institute separately the civil action shall be made
before the prosecution starts presenting its evidence and under circumstances
affording the offended party a reasonable opportunity to make such reservation.

xxx

(b) x x x

Where the civil action has been filed separately and trial thereof has not yet
commenced, it may be consolidated with the criminal action upon application with
the court trying the latter case. If the application is granted, the trial of both actions
shall proceed in accordance with section 2 of this rule governing consolidation of
the civil and criminal actions. (Emphasis supplied)

Under Section 1 of the present Rule 111, what is deemed instituted with the
criminal action is only the action to recover civil liability arising from the crime
or ex-delicto. All the other civil actions under Articles 32, 33, 34 and 2176 of the
Civil Code are no longer deemed instituted, and may be filed separately and
prosecuted independently even without any reservation in the criminal action. The
failure to make a reservation in the criminal action is not a waiver of the right to
file a separate and independent civil action based on these articles of the Civil
Code. The prescriptive period on the civil actions based on these articles of the Civil
Code continues to run even with the filing of the criminal action. Verily, the civil
actions based on these articles of the Civil Code are separate, distinct and
independent of the civil action deemed instituted in the criminal action. [10]
Under the present Rule 111, the offended party is still given the option to file a
separate civil action to recover civil liability ex-delicto by reserving such right in the
criminal action before the prosecution presents its evidence. Also, the offended
party is deemed to make such reservation if he files a separate civil action before
filing the criminal action. If the civil action to recover civil liability ex-delicto is filed
separately but its trial has not yet commenced, the civil action may be consolidated
with the criminal action. The consolidation under this Rule does not apply to
separate civil actions arising from the same act or omission filed under Articles 32,
33, 34 and 2176 of the Civil Code.[11]
Suspension of the Separate Civil Action
Under Section 2, Rule 111 of the amended 1985 Rules, a separate civil action,
if reserved in the criminal action, could not be filed until after final judgment was
rendered in the criminal action. If the separate civil action was filed before the
commencement of the criminal action, the civil action, if still pending, was
suspended upon the filing of the criminal action until final judgment was rendered
in the criminal action. This rule applied only to the separate civil action filed to
recover liability ex-delicto. The rule did not apply to independent civil actions based
on Articles 32, 33, 34 and 2176 of the Civil Code, which could proceed
independently regardless of the filing of the criminal action.
The amended provision of Section 2, Rule 111 of the 2000 Rules continues this
procedure, to wit:

SEC. 2. When separate civil action is suspended. After the criminal action has been
commenced, the separate civil action arising therefrom cannot be instituted until
final judgment has been entered in the criminal action.

If the criminal action is filed after the said civil action has already been
instituted, the latter shall be suspended in whatever stage it may be found
before judgment on the merits. The suspension shall last until final
judgment is rendered in the criminal action. Nevertheless, before judgment
on the merits is rendered in the civil action, the same may, upon motion of the
offended party, be consolidated with the criminal action in the court trying the
criminal action. In case of consolidation, the evidence already adduced in the civil
action shall be deemed automatically reproduced in the criminal action without
prejudice to the right of the prosecution to cross-examine the witnesses presented
by the offended party in the criminal case and of the parties to present additional
evidence. The consolidated criminal and civil actions shall be tried and decided
jointly.
During the pendency of the criminal action, the running of the period of prescription
of the civil action which cannot be instituted separately or whose proceeding has
been suspended shall be tolled.

x x x. (Emphasis supplied)

Thus, Section 2, Rule 111 of the present Rules did not change the rule that the
separate civil action, filed to recover damages ex-delicto, is suspended upon the
filing of the criminal action. Section 2 of the present Rule 111 also prohibits the
filing, after commencement of the criminal action, of a separate civil action to
recover damages ex-delicto.
When civil action may proceed independently
The crucial question now is whether Casupanan and Capitulo, who are not the
offended parties in the criminal case, can file a separate civil action against the
offended party in the criminal case. Section 3, Rule 111 of the 2000 Rules provides
as follows:

SEC 3. When civil action may proceed independently. - In the cases provided in
Articles 32, 33, 34 and 2176 of the Civil Code of the Philippines, the independent
civil action may be brought by the offended party. It shall proceed independently
of the criminal action and shall require only a preponderance of evidence. In no
case, however, may the offended party recover damages twice for the same act or
omission charged in the criminal action. (Emphasis supplied)

Section 3 of the present Rule 111, like its counterpart in the amended 1985
Rules, expressly allows the offended party to bring an independent civil action
under Articles 32, 33, 34 and 2176 of the Civil Code. As stated in Section 3 of the
present Rule 111, this civil action shall proceed independently of the criminal action
and shall require only a preponderance of evidence. In no case, however, may the
offended party recover damages twice for the same act or omission charged in the
criminal action.
There is no question that the offended party in the criminal action can file an
independent civil action for quasi-delict against the accused. Section 3 of the
present Rule 111 expressly states that the offended party may bring such an action
but the offended party may not recover damages twice for the same act or omission
charged in the criminal action. Clearly, Section 3 of Rule 111 refers to the offended
party in the criminal action, not to the accused.
Casupanan and Capitulo, however, invoke the ruling in Cabaero vs.
Cantos[12] where the Court held that the accused therein could validly institute a
separate civil action for quasi-delict against the private complainant in the criminal
case. In Cabaero, the accused in the criminal case filed his Answer with
Counterclaim for malicious prosecution. At that time the Court noted the absence
of clear-cut rules governing the prosecution on impliedly instituted civil actions and
the necessary consequences and implications thereof. Thus, the Court ruled
that the trial court should confine itself to the criminal aspect of the case and
disregard any counterclaim for civil liability. The Court further ruled that the
accused may file a separate civil case against the offended party after the criminal
case is terminated and/or in accordance with the new Rules which may be
promulgated. The Court explained that a cross-claim, counterclaim or third-party
complaint on the civil aspect will only unnecessarily complicate the proceedings and
delay the resolution of the criminal case.
Paragraph 6, Section 1 of the present Rule 111 was incorporated in the 2000
Rules precisely to address the lacuna mentioned in Cabaero. Under this provision,
the accused is barred from filing a counterclaim, cross-claim or third-party
complaint in the criminal case. However, the same provision states that any cause
of action which could have been the subject (of the counterclaim, cross-claim or
third-party complaint) may be litigated in a separate civil action. The present Rule
111 mandates the accused to file his counterclaim in a separate civil action which
shall proceed independently of the criminal action, even as the civil action of the
offended party is litigated in the criminal action.
Conclusion
Under Section 1 of the present Rule 111, the independent civil action in Articles
32, 33, 34 and 2176 of the Civil Code is not deemed instituted with the criminal
action but may be filed separately by the offended party even without
reservation. The commencement of the criminal action does not suspend the
prosecution of the independent civil action under these articles of the Civil
Code. The suspension in Section 2 of the present Rule 111 refers only to the civil
action arising from the crime, if such civil action is reserved or filed before the
commencement of the criminal action.
Thus, the offended party can file two separate suits for the same act or
omission. The first a criminal case where the civil action to recover civil liability ex-
delicto is deemed instituted, and the other a civil case for quasi-delict - without
violating the rule on non-forum shopping. The two cases can proceed
simultaneously and independently of each other. The commencement or
prosecution of the criminal action will not suspend the civil action for quasi-
delict. The only limitation is that the offended party cannot recover damages twice
for the same act or omission of the defendant. In most cases, the offended party
will have no reason to file a second civil action since he cannot recover damages
twice for the same act or omission of the accused. In some instances, the accused
may be insolvent, necessitating the filing of another case against his employer or
guardians.
Similarly, the accused can file a civil action for quasi-delict for the same act or
omission he is accused of in the criminal case. This is expressly allowed in
paragraph 6, Section 1 of the present Rule 111 which states that the counterclaim
of the accused may be litigated in a separate civil action. This is only fair for
two reasons. First, the accused is prohibited from setting up any counterclaim in
the civil aspect that is deemed instituted in the criminal case. The accused is
therefore forced to litigate separately his counterclaim against the offended
party. If the accused does not file a separate civil action for quasi-delict, the
prescriptive period may set in since the period continues to run until the civil action
for quasi-delict is filed.
Second, the accused, who is presumed innocent, has a right to invoke Article
2177 of the Civil Code, in the same way that the offended party can avail of this
remedy which is independent of the criminal action. To disallow the accused from
filing a separate civil action for quasi-delict, while refusing to recognize his
counterclaim in the criminal case, is to deny him due process of law, access to the
courts, and equal protection of the law.
Thus, the civil action based on quasi-delict filed separately by Casupanan and
Capitulo is proper. The order of dismissal by the MCTC of Civil Case No. 2089 on
the ground of forum-shopping is erroneous.
We make this ruling aware of the possibility that the decision of the trial court
in the criminal case may vary with the decision of the trial court in the independent
civil action. This possibility has always been recognized ever since the Civil Code
introduced in 1950 the concept of an independent civil action under Articles 32, 33,
34 and 2176 of the Code. But the law itself, in Article 31 of the Code, expressly
provides that the independent civil action may proceed independently of the
criminal proceedings and regardless of the result of the latter.In Azucena vs.
Potenciano,[13] the Court declared:

x x x. There can indeed be no other logical conclusion than this, for to subordinate
the civil action contemplated in the said articles to the result of the criminal
prosecution whether it be conviction or acquittal would render meaningless the
independent character of the civil action and the clear injunction in Article 31 that
this action 'may proceed independently of the criminal proceedings and regardless
of the result of the latter.

More than half a century has passed since the Civil Code introduced the concept
of a civil action separate and independent from the criminal action although arising
from the same act or omission. The Court, however, has yet to encounter a case
of conflicting and irreconcilable decisions of trial courts, one hearing the criminal
case and the other the civil action for quasi-delict. The fear of conflicting and
irreconcilable decisions may be more apparent than real. In any event, there are
sufficient remedies under the Rules of Court to deal with such remote possibilities.
One final point. The Revised Rules on Criminal Procedure took effect on
December 1, 2000 while the MCTC issued the order of dismissal on December 28,
1999 or before the amendment of the rules. The Revised Rules on Criminal
Procedure must be given retroactive effect considering the well-settled rule that -

x x x statutes regulating the procedure of the court will be construed as applicable


to actions pending and undetermined at the time of their passage. Procedural laws
are retroactive in that sense and to that extent.[14]

WHEREFORE, the petition for review on certiorari is hereby GRANTED. The


Resolutions dated December 28, 1999 and August 24, 2000 in Special Civil Action
No. 17-C (99) are ANNULLED and Civil Case No. 2089 is REINSTATED. SO
ORDERED.
G.R. No. 135830 September 30, 2005

JUAN DE DIOS CARLOS, Petitioners,


vs.
FELICIDAD SANDOVAL, also known as FELICIDAD S. VDA. DE CARLOS or
FELICIDAD S. CARLOS or FELICIDAD SANDOVAL DE CARLOS, and
TEOFILO CARLOS II, Respondent.

x-------------------------------------------------------------------x

G.R. No. 136035

SIDDCOR (now MEGA PACIFIC) INSURANCE CORPORATION, Petitioners,


vs.
FELICIAD SANDOVAL VDA. DE CARLOS and TEOFILO CARLOS
II, Respondent.

x------------------------------------------------------------------x

G.R. No. 137743

SIDDCOR (now MEGA PACIFIC) INSURANCE CORPORATION, Petitioners,


vs.
HON. COURT OF APPEALS (FORMER SPECIAL FOURTH DIVISION), HON.
ALBERTO L. LERMA and/or the REGIONAL TRIAL COURT OF THE CITY OF
MUNTINLUPA, BRANCH 256, FELICIDAD SANDOVAL, also known as
FELICIDAD S. VDA. DE CARLOS OR FELICIDAD S. CARLOS OR FELICIDAD
SANDOVAL CARLOS OR FELICIDAD SANDOVAL VDA. DE CARLOS and
TEOFILO CARLOS II, Respondent.

DECISION

Tinga, J.:

These consolidated petitions emanated from a civil case filed by Juan de Dios Carlos
("Carlos") against respondents Felicidad Sandoval ("Sandoval") and Teofilo Carlos
II (Teofilo II) docketed with the Regional Trial Court (RTC) of Muntinlupa City as
Civil Case No. 95-135.

In his Complaint before the RTC, Carlos asserted that he was the sole surviving
compulsory heir of his parents, Felix B. Carlos and Felipa Elemia,1 who had acquired
during their marriage, six parcels of land (subject properties). His brother, Teofilo
("Teofilo"), died intestate in 1992. At the time of his death, Teofilo was apparently
married to Sandoval, and cohabiting with her and their child, respondent Teofilo II.
Nonetheless, Carlos alleged in his Complaint that Teofilo and Sandoval were not
validly married as they had not obtained any marriage license.2Furthermore, Carlos
also asserted that Teofilo II could not be considered as Teofilo’s child. As a result,
Carlos concluded that he was also the sole heir of his brother Teofilo, since the
latter had died without leaving any heirs.

Carlos also claimed that Teofilo, prior to their father Felix’s death in 1963,
developed a scheme to save the elder Carlos’s estate from inheritance taxes. Under
the scheme, the properties of the father would be transferred to Teofilo who would,
in turn, see to it that the shares of the legal heirs are protected and delivered to
them. Felix assented to the plan, and the subject properties were transferred in the
name of Teofilo. After Teofilo’s death, Carlos entered into certain agreements with
Sandoval in connection with the subject properties. Carlos did so, believing that
the latter was the lawful wife of his brother Teofilo. Subsequently though, Carlos
discovered that Sandoval and his brother were never validly married, as their
marriage was contracted without a marriage license.3

Carlos now sought to nullify these agreements with Sandoval for want of
consideration, the premise for these contracts being non-existent. Thus, Carlos
prayed of the RTC to declare the alleged marriage between Teofilo and
Sandoval void ab initio, provided that Teofilo died without issue, order that new
titles covering the subject properties be issued in the name of Carlos, and require
Sandoval to restitute Carlos in the amount of ₱18,924,800.00.4

Carlos likewise prayed for the issuance of the provisional relief of preliminary
attachment. The RTC issued an Orderdated 7 September 1995 granting the prayer
for preliminary attachment, and on 15 September 1995, a writ of preliminary
attachment. Carlos posted a bond for ₱20,000,000.00 issued by herein petitioner

SIDDCOR Insurance Corporation (SIDDCOR).5 Shortly thereafter, a Notice of


Garnishment was served upon the Philippine National Bank (PNB) over the deposit
accounts maintained by respondents.

Respondents filed an Urgent Motion to Discharge the Writ of Attachment, which


was opposed by Carlos. On 4 December 1995, the RTC rendered an order denying
the motion. This caused respondents to file a Petition for Certiorari with the Court
of Appeals, seeking to set aside the RTC order granting the writ of preliminary
attachment denying the motion for the discharge of the writ. This case was
docketed as CA-G.R. SP No. 39267.6

On 27 February 1996, the Court of Appeals Second Division promulgated


its Decision in CA-G.R. SP No. 39267, wherein it granted the Petition for
Certiorari and ordered the discharge and dissolution of the Writ of Attachment and
Notice of Garnishment.7 The Court of Appeals found that there was no sufficient
cause of action to warrant the preliminary attachment, since Carlos had merely
alleged general averments in order to support his prayer.8 Carlos elevated the said
Decision to this Court by way of Petition for Review on Certiorari, which was
docketed as G.R. No. L-125717. In a Resolution dated 21 October 1996, the Court
denied Carlos’s Petition, and thus the Court of Appeals’ Decision ordering the
dissolution of the Writ of Attachment and Notice of Garnishment became final.

In the meantime, the hearing on Carlos’s Complaint ensued before the RTC.
Respondents duly filed their Answerand thereafter filed a Motion for Summary
Judgment. Carlos opposed the motion and countered with his own Motion for
Summary Judgment. On 8 April 1996, the RTC rendered a summary judgment in
favor of Carlos. Carlos’s victory was wholesale, with the RTC making the following
pronouncements:

1. Declaring the marriage between defendant Felicidad Sandoval and Teofilo Carlos
solemnized at Silang, Cavite, on May 14, 1962, evidenced by the Marriage Contract
submitted in this case, null and void ab initio for lack of the requisite marriage
license;

2. Declaring that the defendant minor, Teofilo S. Carlos II, is not the natural,
illegitimate, or legally adopted child of the late Teofilo E. Carlos;

3. Ordering defendant Sandoval to pay and restitute to plaintiff the sum of


₱18,924,800.00, together with the interest thereon at the legal rate from date of
filing of the instant complaint until fully paid;
4. Declaring plaintiff as the sole and exclusive owner of the parcel of land, less the
portion adjudicated to the plaintiffs in Civil Case No. 11975, covered by TCT No.
139061 of the Register of Deeds of Makati City, and ordering said Register of Deeds
to cancel said title and to issue another title in the sole name of plaintiff herein;

5. Declaring the Contract, Annex K of the Complaint, between plaintiff and


defendant Sandoval null and void, and ordering the Register of Deeds of Makati
City to cancel TCT No. 139058 in the name of Teofilo Carlos, and to issue another
title in the sole name of the plaintiff herein;

6. Declaring the Contract, Annex M of the Complaint, between plaintiff and


defendant Sandoval null and void;

7. Ordering the cancellation of TCT No. 210877 in the names of defendant Sandoval
and defendant minor Teofilo S. Carlos II and ordering the Register of Deeds of
Manila to issue another title in the exclusive name of plaintiff herein.

8. Ordering the cancellation of TCT No. 210878 in the names of defendant Sandoval
and defendant minor Teofilo S. Carlos II and ordering the Register of Deeds of
Manila to issue another title in the sole name of plaintiff herein.9

Upon promulgation of the Summary Judgment, Carlos moved before the RTC for
execution pending appeal. The RTC granted the motion for execution pending
appeal upon the filing of a bond.10 On 27 May 1996, the RTC issued a Writ of
Execution.

Meanwhile, respondents filed a Motion for Reconsideration of the Summary


Judgment, which was denied in an Order dated 20 May 1996. Respondents then
appealed the RTC Decision to the Court of Appeals, wherein such appeal was
docketed as CA-G.R. CV No. 53229. The case was raffled to the appellate courts’
Fourteenth Division for completion of records. Sandoval and Carlos also filed
a Petition for Certiorari with Temporary Restraining Orderdated 2 June 1996. This
special civil action primarily attacked the allowance of execution pending appeal,
and prayed for the annulment of the Order granting execution pending appeal, and
of the Writ of Execution

On 10 December 1996, in CA-G.R. CV No. 53229, respondents filed a Motion for


Judgment On the Attachment Bond. They noted that the Court of Appeals had
already ruled that the Writ of Preliminary Attachment issued by the RTC was
improperly granted and that its Decision, as affirmed by the Supreme Court, had
attained finality. Accordingly, they were entitled to damages under Section 20, Rule
57 of the then Rules of Civil Procedure, which governed claims for damages on
account of unlawful attachment. In support of their allegation of damages, they
cite the Notice of Garnishment served on PNB Malolos Branch, where Felicidad
Carlos maintained

deposits amounting to ₱15,546,121.98.11 Also presented in support of the motion


was a Notice of Delivery/Payment by the RTC Sheriff, directing the PNB Malolos
Branch to deliver the amounts previously garnished by virtue of the Writ of
Execution dated 27 May 1996;12 a Manifestation filed by PNB dated 19 July 1996 in
CA-G.R. SP No. 40819, stating that PNB had already delivered to the RTC Sheriff
on 27 June 1996 the amount of ₱15,384,509.98 drawn against the accounts of
Carlos; and a Certification to the same effect issued by the PNB Malolos Branch. In
an Addendum to Motion for Judgment on the Attachment Bond, respondents
additionally prayed for moral and exemplary damages.13
After various pleadings were duly filed by the parties, the Court of Appeals Special
Fourth Division issued a Resolution dated 23 March 1998, certifying that all the
necessary pleadings have been filed, and that the case may already be referred to
the Raffle Committee for assignment to a ponente for study and report. The
same Resolution likewise denied without elaboration a Motion to Dismiss on the
ground of forum-shopping filed earlier by Carlos.14

On such denial, Carlos filed a Motion for Reconsideration. Respondents likewise


filed a Motion for Partial Reconsideration dated 17 April 1998, arguing that under
the Revised Internal Rules of the Court of Appeals (RIRCA), the case may be re-
raffled for assignment for study and report only after there is a resolution that the
case is deemed submitted for decision.15 They pointed out that re-raffle could not
yet be effected, as there were still pending incidents, particularly the motions for
reconsideration of Carlos and themselves, as well as the Motion for Judgment on
Attachment Bond.

On 26 June 1998, the Court of Appeals Former Special Fourth Division promulgated
two resolutions.16 The first, in response to Carlos’s Motion for Reconsideration,
again denied Carlos’s Motion to Dismiss the Appeal and Motion for Suspension, but
explained the reasons for such denial.

The second resolution is at the center of the present petitions. The


assailed Resolution agreed with respondents that it was first necessary to resolve
the pending incidents before the case could be re-raffled for study and report.
Accordingly, the Court of Appeals

proceeded to rule on these pending incidents. While the first resolution dwelt on
the pending motions filed by Carlos, this Resolution tackled the other matter left
unresolved, the Motion for Judgment on Attachment Bond. The Court of Appeals
found the claim for damages meritorious, citing the earlier decisions ruling that
Carlos was not entitled to the preliminary attachment. Invoking Section 20, Rule
57 of the Rules of Court, as well as jurisprudence,17 the Court of Appeals ruled that
it was not necessary for the determination of damages on the injunction bond to
await the decision on appeal.

The Court of Appeals then proceeded to determine to what damages respondents


were entitled to. In ruling that the award of actual damages was warranted, the
court noted:

It is also not disputed that the PNB, on June 27, 1996, issued two manager’s
checks: MC No. 938541 for ₱4,932,621.09 and MC 938542 for ₱10,451,888.89
payable to the order of "Luis C. Bucayon II, Sheriff IV, RTC, Branch 256,
Muntinlupa", duly received by the latter in the total amount of PESOS FIFTEEN
MILLION THREE HUNDRED EIGHTY FOUR THOUSAND FIVE HUNDRED NINE &
98/100 (₱15,384,509.98), drawn against the accounts of Ms. Felicidad Sandoval
Vda. de Carlos which were earlier garnished for the satisfaction of the above-
mentioned writ of attachment (Annex "E", Motion for Judgment on the Attachment
Bond, pp. 7-8)18

....

The contention of [Carlos] that the writ of attachment was not implemented falls
flat on the face of the manifestation of PNB that the delivery of the garnished
₱15,384,509.98 to him was effected through the sheriff.19

The Court of Appeals found that moral and exemplary damages were not
warranted, there being no malice in pursuing the attachment. The appellate court
also found the claim of ₱2,000,000.00 for attorney’s fees as excessive, and reduced
the sum by half. Correspondingly, the dispositive portion of the
assailed Resolution reads:

WHEREFORE, premises considered, judgment is hereby rendered against the


attachment bond, ordering SIDDCOR INSURANCE CORPORATION and plaintiff-
appellee to pay defendants-appellants, jointly and severally, the sum of
₱15,384,509.98 and 12% interest per annum from June 27, 1996 when the
unlawful garnishment was effected until fully paid and ₱1,000,000.00 as attorney’s
fees with 6% interest thereon from the trial court’s decision on April 8, 1986 until
fully paid.

SO ORDERED.20

Both Carlos and SIDDCOR filed their respective motions for reconsideration of
the Resolution. For their part, respondents filed a Motion for Immediate
Execution dated 7 August 1998 in regard to the Resolution of 26 June 1998
awarding them damages.

In the Resolution dated 10 October 1998,21 the Court of Appeals denied the
motions for reconsideration and granted the Motion for Immediate Execution. In
granting the Motion for Immediate Execution, the Court of Appeals cited the
reasons that the appeal to be undertaken from the 26 June 1998 Resolution was
patently dilatory; that there were no material and substantial defenses against the
motion for judgment on the attachment bond, rendering the appeal pro-forma and
dilatory; that Sandoval was of advanced age and might not enjoy the fruits of the
judgment on the attachment bond; and that immediate execution would end her
suffering due to the arbitrary garnishment of her account pursuant to an improper
attachment.22

In its Motion for Reconsideration, SIDDCOR explicitly assailed the allowance of


the Motion for Immediate Execution.23 This was denied by the Court of Appeals in
a Resolution dated 22 December 1998.24

From these antecedents, the following petitions were filed before this Court:

G.R. No. 135830

This Appeal by Certiorari with Prayer for Temporary Restraining Order/Preliminary


Injunction dated 26 October 1998 filed by Carlos assailed the two resolutions of
the Court of Appeals both dated 26 June 1998, as well as the Resolution of 10
October 1998, which denied Carlos’s motion for reconsideration. Carlos argues that
the Court of Appeals, through the Former Special Fourth Division, could not have
resolved the Motion for Judgment on the Attachment Bond since the case had not
yet been re-raffled under the two-raffle system for study and report; that the Court
of Appeals erred in resolving the motion without conducting any hearing; that the
Court of Appeals had no jurisdiction over the motion as the docketing fees had not
yet been filed; that the motion for judgment, which did not contain any certification
against forum-shopping, was an application subject to the requirements of
certification against forum-shopping; that there was no supporting evidence to
support the award of damages; and that the Court of Appeals committed grave
abuse of discretion in denying the Motion for Reconsideration without adverting to
specific reasons mentioned for the denial of each issue.25

Carlos likewise ascribes grave abuse of discretion to the Court of Appeals in its
other Resolution dated 26 June 1998 for its refusal to dismiss CA-G.R. CV No.
53229 on the ground of forum-shopping, adding that the appellate court should
have deferred resolution of the Motion for Judgment on the Attachment
Bond considering the prejudicial question raised in Carlos’s motion to dismiss the
main case on the ground of forum-shopping.

G.R. No. 136035

This concerns a Petition for Review filed by SIDDCOR, likewise challenging


the Resolution of 26 June 1998 of the Court of Appeals and the 10 October
1998 Resolution wherein Siddcor’s Motion for Reconsideration, among others, was
denied. Siddcor argues therein that the Court of Appeals erred in ruling on the
motion for damages without awaiting judgment in the main case; granting that
damages may be awarded, these should encompass only such damages incurred
during the pendency of the appeal; and that a hearing was necessary to prove the
claim for damages and the appellate court erred in granting the award for damages
despite lack of hearing.

G.R. No. 137743

The third petition for adjudication, a Petition for Certiorari under Rule 65 with
Prayer for Temporary Restraining Order or Preliminary Injunction, was also filed by
SIDDCOR. This petition, dated 8 March 1999, specifically assails the allowance by
the Court of Appeals of the immediate execution of the award of damages, made
through the resolutions dated 10 October 1998 and 22 December 1998.

SIDDCOR hereunder argues that Section 2, Rule 39 of the Rules of Civil Procedure
requires that execution of a judgment or final order pending appeal may be made
only on motion of the prevailing party and may be made "even before the expiration
of the period to appeal."26 Respondents had argued in their Motion for Immediate
Execution that the judgment sought to be executed (that on the attachment bond)
was interlocutory and not appealable, yet cited rulings on execution pending appeal
under Section 2, Rule 39 in support of their position. SIDDCOR cites this
inconsistency as proof of a change of theory on the part of respondents which could
not be done for the theories are incompatible. Such being the case, SIDDCOR
argues, the Court of Appeals gravely abused its discretion in granting immediate
execution since respondents had filed its motion on the premise that the award on
the judgment bond was interlocutory and not appealable. SIDDCOR also claims
that the judgment on the attachment bond is not interlocutory, citing Stronghold
Insurance Co., Inc. v. Court of Appeals27 wherein it was ruled that such indeed
constitutes a final and appealable order.

SIDDCOR points out that no hearing was conducted on the Motion for Immediate
Execution despite the requirement in Section 2, Rule 39 that "discretionary
execution may only issue upon good reasons to be stated in a special order after
due hearing." SIDDCOR likewise notes that the motion granting immediate
execution was granted in the very same resolution which had denied the motion
for reconsideration of the resolution sought to be immediately executed. For
SIDDCOR, such constituted a denial of procedural due process insofar as its
statutory right to appeal was concerned, as the resolution that it intended to appeal
from was already the subject of immediate execution.

Finally, SIDDCOR contests the special reasons cited by the Court of Appeals in
granting the Motion for Immediate Execution.

Facts Arising Subsequent to the Filing of Instant Petitions

On 7 May 1999, the Court of Appeals issued a Writ of Execution directing the
enforcement of the judgment on the attachment bond.28 However, in
a Resolution dated 9 June 1999, this Court through the First Division issued
a Temporary Restraining Order, enjoining the enforcement of the said Writ of
Execution.

On 15 October 2002, the Court of Appeals First Division rendered a Decision29 on


the merits of CA-G.R. CV No. 53229, setting aside the Summary Judgment and
ordering the remand of the case for further proceedings.30 Both parties filed their
respective motions for reconsideration.31 In addition, Carlos filed a motion to inhibit
the author of the assailed decision, Justice Rebecca de Guia-Salvador,32 who
thereafter agreed to inhibit herself.33 Then on 7 August 2003, the Court of Appeals
Former First Division issued a Resolution deferring action on the motions for
reconsideration in light of the temporary restraining order issued by this Court until
the resolution of the present petitions.

The factual background may be complicated, but the court need only concern itself
with the propriety of the judgment on the attachment bond and the subsequent
moves to secure immediate execution of such judgment. Should this Court be called
upon to tackle the merits of the original action, Carlos’s complaint, it shall be in the
review of the final resolution of the Court of Appeals in CA-G.R. CV No. 53229.

Consolidation of Issues in

G.R. Nos. 135830 and 136035

The petitions in G.R. Nos. 135830 and 136035 are concerned with the award of
damages on the attachment bond. They may be treated separately from the
petition in G.R. No. 137743, which relates to the immediate execution of the said
award.

We consolidate the main issues in G.R. Nos. 135830 and 136035, as follows: (1)
whether the assailed judgment on the attachment bond could have been rendered,
as it was, prior to the adjudication of the main case; (2) whether the Court of
Appeals properly complied with the hearing requirement under Section 20, Rule 57
prior to its judgment on the attachment bond; and (3) whether the Court of Appeals
properly ascertained the amount of damages it awarded in the judgment on the
attachment bond.

Resolving these issues requires the determination of the proper scope and import
of Section 20, Rule 57 of the 1997 Rules of Civil Procedure. The provision governs
the disposal of claims for damages on account of improper, irregular or excessive
attachment.

SECTION 20. Claim for damages on account of improper, irregular or excessive


attachment.—An application for damages on account of improper, irregular or
excessive attachment must be filed before the trial or before appeal is perfected or
before the judgment becomes executory, with due notice to the attaching obligee
or his surety or sureties, setting forth the facts showing his right to damages and
the amount thereof. Such damages may be awarded only after proper
hearing and shall be included in the judgment on the main case.

If the judgment of the appellate court be favorable to the party against whom the
attachment was issued, he must claim damages sustained during the pendency of
the appeal by filing an application in the appellate court with notice to the party in
whose favor the attachment was issued or his surety or sureties, before the
judgment of the appellate court becomes executory. The appellate court may allow
the application to be heard and decided by the trial court.
Nothing herein contained shall prevent the party against whom the attachment was
issued from recovering in the same action the damages awarded to him from any
property of the attaching obligee not exempt from execution should the bond or
deposit given by the latter be insufficient or fail to fully satisfy the award. (Emphasis
supplied.)

Section 20 essentially allows the application to be filed at any time before the
judgment becomes executory. It should be filed in the same case that is the main
action, and cannot be instituted separately.34 It should be filed with the court
having jurisdiction over the case at the time of the application.35 The remedy
provided by law is exclusive and by failing to file a motion for the determination of
the damages on time and while the judgment is still under the control of the court,
the claimant loses his right to damages.36

There is no question in this case that the Motion for Judgment on the Attachment
Bond filed by respondents on 10 December 1996 was properly filed since it was
filed with the Court of Appeals during the pendency of the appeal in the main case
and also as an incident thereto. The core questions though lie in the proper
interpretation of the condition under Section 20, Rule 57 that reads: "Such
damages may be awarded only after proper hearing and shall be included in the
judgment on the main case." Petitioners assert that there was no proper hearing
on the application for damages and that the Court of Appeals had wrongfully acted
on the application in that it resolved it prior to the rendition of the main judgment.

"Such Damages May Be Awarded

Only After Proper Hearing…."

We first discuss whether the "proper hearing" requirement under Section 20, Rule
57 had been satisfied prior to the award by the Court of Appeals of damages on
the attachment bond.

Section 20 of Rule 57 requires that there be a "proper hearing" before the


application for damages on the attachment bond may be granted. The hearing
requirement ties with the indispensable demand of procedural due process. Due
notice to the adverse party and its surety setting forth the facts supporting the
applicant's right to damages and the amount thereof under the bond is essential.
No judgment for damages may be entered and executed against the surety without
giving it an opportunity to be heard as to the reality or reasonableness of the
damages resulting from the wrongful issuance of the writ.37

In Paramount Insurance v. Court of Appeals,38 the Court held that under the rule,
it was neither mandatory nor fatal that there should be a separate hearing in order
that damages upon the bond can be claimed, ascertained and awarded. 39 What is
necessary only is for the attaching party and his surety or sureties to be duly
notified and given the opportunity to be heard.40

In this case, both Carlos and SIDDCOR were duly notified by the appellate court of
the Motion for Judgment on the Attachment Bond and were required to file their
respective comments thereto.41 Carlos and SIDDCOR filed their respective
comments in opposition to private respondents’ motion.42 Clearly, all the relevant
parties had been afforded the bare right to be heard on the matter.

Concededly, the facts of this case differ from that in Paramount, wherein the award
of damages was predicated under Section 8, Rule 58, and the trial on the merits
included the claim for damages on the attachment bond. The Court did note therein
that the counsel of the surety was present during the hearings.43 In this case, unlike
in Paramount, there were no open court hearings conducted by the Court of
Appeals, and it is precisely this absence that the petitioners assert as fatal.

Plainly, there is no express requirement under the rule that the hearing be done in
open court, or that the parties be allowed to confront adverse witnesses to the
claim of damages on the bond. The proper scope of the hearing requirement was
explained before Paramount in Peroxide Philippines Corp. v. Court of
44
Appeals, thus:

. . . [It] is undeniable that when the attachment is challenged for having been
illegally or improperly issued, there must be a hearing with the burden of proof to
sustain the writ being on the attaching creditor. That hearing embraces not only
the right to present evidence but also a reasonable opportunity to know the claims
of the opposing parties and meet them. The right to submit arguments implies that
opportunity, otherwise the right would be a barren one. It means a fair and open
hearing.

From this pronouncement, we can discern that the "proper hearing" contemplated
would not merely encompass the right of the parties to submit their respective
positions, but also to present evidence in support of their claims, and to rebut the
submissions and evidence of the adverse party. This is especially crucial considering
that the necessary elements to be established in an application for damages are
essentially factual: namely, the fact of damage or injury, and the quantifiable
amount of damages sustained. Such matters cannot be established on the mere
say-so of the applicant, but require evidentiary support. At the same time, there
was no equivocal statement from the Court in Peroxide that the hearing required
under the rule should be a full-blown hearing on the merits

In this case, we rule that the demands of a "proper hearing" were satisfied as of
the time the Court of Appeals rendered its assailed judgment on the attachment
bond. The circumstances in this case that we consider particularly telling are the
settled premises that the judicial finding on the wrongfulness of the attachment
was then already conclusive and beyond review, and that the amount of actual
damages sustained was likewise indubitable as it indeed could be found in the
official case record in CA-G.R. CV No. 53229. As a result, petitioners would have
been precluded from either raising the defenses that the preliminary attachment
was valid or disputing the amount of actual damages sustained by reason of the
garnishment. The only matter of controversy that could be litigable through the
traditional hearing would be the matter of moral and exemplary damages, but the
Court of Appeals appropriately chose not to award such damages.

Moreover, petitioners were afforded the opportunity to counter the arguments


extended by the respondents. They fully availed of that right by submitting their
respective comments/oppositions. In fine, the due process guarantee has been
satisfied in this case.

It should be noted that this case poses a situation different from what is normally
contemplated under Section 20, Rule 57—wherein the very wrongfulness of the
attachment remains one of the issues in contention in the main case. In such a
case, there would be a greater demand for a more extensive hearing on the
application of damages. The modality of hearing should remain within the discretion
of the court having jurisdiction to hear the application for damages. The only
demand, concordant to due process, would be the satisfaction of the right to be
heard, to present evidence, and to rebut the evidence and arguments of the
opposing party.
Some disquisition is necessary on whether or not, as petitioners submit, a full-
blown hearing in open court is compulsory under Section 20, Rule 57. To impose
this as a mandatory requirement would ultimately prove too onerous to our judicial
system. Perhaps such a demand would be less burdensome on the regional trial
courts, which, as a matter of routine, receive testimonial or documentary evidence
offered de novo, and to formulate conclusions on the admissibility and credibility
of the same.

However, a different situation applies if it is the Court of Appeals or the Supreme


Court before which the application for damages is filed. Both these courts, which
are capacitated to receive and act on such actions, are generally not triers of facts,
and do not, in the course of daily routine, conduct hearings. It is partly for such
reason that Section 20, Rule 57 authorizes these appellate courts to refer the
application for damages to the trial court for hearing and decision. The trial courts
are functionally attuned to ascertain and evaluate at the first instance the
necessary factual premises that would establish the right to damages. Still,
reference of the application for damages to the trial court is discretionary on the
part of the appellate courts. The latter, despite their traditional appellate
jurisdiction and review function, are still empowered under Section 20 to rule on
the application for damages, notwithstanding the factual dimension such question
presents.

To impose as mandatory on the Court of Appeals or the Supreme Court to hear the
application for damages through full-blown hearings in open court is supremely
unwise and beyond the demands of Section 20, Rule 57. The effect would be unduly
disruptive on the daily workflow of appellate courts such as the Court of Appeals
and the Supreme Court, which rarely conduct open court hearings. Neither could
the Court see what is so markedly special about an application for damages, fact-
oriented as it may be, that would require it to be heard by the appellate courts in
open court when no such mandatory rule applies to other judicial matters for
resolution that are also factual in nature.

For example, the review of death penalty convictions by the Court of Appeals and
the Supreme Court necessitates a thorough evaluation of the evidence presented,
notwithstanding the prior factual appreciation made by the trial
45
court. Notwithstanding the factual nature of the questions involved, there is no
rule requiring the Court of Appeals or the Supreme Court to call death penalty cases
for hearing or oral argument. If no such mandatory rule for hearing is imposed on
the appellate courts when the supreme penalty of death is involved, why then
should an exceptional rule be imposed in the case for the relatively insignificant
application for damages on the attachment bond?

If open court hearings are ever resorted to by appellate courts, such result from
the exercise of discretion rather than by imposition by statute or procedural rule.
Indeed, there is no existing statute, procedural rule, or jurisprudential fiat that
makes it mandatory on the Court of Appeals or the Supreme Court to conduct an
open-court hearing on any matter for resolution. There is nothing demonstrably
urgent with an application for damages under Section 20, Rule 57 that would
necessitate this Court to adopt an unprecedented rule mandating itself or the Court
of Appeals to conduct full-blown open court hearings on a particular type of action.

This pronouncement does not contradict our ruling in Hanil Development v.


IAC,46 which Carlos interprets as requiring the Court of Appeals to conduct a proper
hearing on an application for damages on the attachment bond. Hanil concerned
the refusal by the Intermediate Appellate Court (now Court of Appeals) to take
cognizance of the application for damages on the attachment bond, such refusal
being reversed by the Court, which ruled that the Intermediate Appellate Court
(IAC) had jurisdiction to accept and rule on such application. While the Court
therein recognized that the IAC was empowered to try cases and conduct hearings,
or otherwise perform acts necessary to resolve factual issues in cases,47 it did not
require the appellate court to conduct a hearing in open court, but merely to
reinstate the application for damages.

Admittedly, the dispositive portion of Hanil required the Court of Appeals to conduct
hearings on the application for damages,48 but nowhere in the decision was a
general rule laid down mandating the appellate court to conduct such hearings in
open court. The ascertainment of the need to conduct full-blown hearings is best
left to the discretion of the appellate court which chooses to hear the application.
At the same time, the Court cautions the appellate courts to carefully exercise their
discretion in determining the need for open-court hearings on the application for
damages on the attachment bond. The Court does not sanction the indolent award
of damages on the attachment bond by the appellate court without affording the
adverse party and the bonding company concerned the opportunity to present their
sides and adduce evidence in their behalf, or on the basis of unsubstantiated
evidence.

"…And Shall be Included in the

Judgment on the Main Case"

Section 20, Rule 57 does state that the award of damages shall be included in the
judgment on the main case, and seemingly indicates that it should not be rendered
prior to the adjudication of the main case.

The rule, which guarantees a right to damages incurred by reason of wrongful


attachment, has long been recognized in this jurisdiction.49 Under Section 20, Rule
57 of the 1964 Rules of Court, it was provided that there must be first a judgment
on the action in favor of the party against whom attachment was issued before
damages can be claimed by such party.50 The Court however subsequently clarified
that under the rule, "recovery for damages may be had by the party thus prejudiced
by the wrongful attachment, even if the judgment be adverse to him." 51

The language used in the 1997 revision of the Rules of Civil Procedure leaves no
doubt that there is no longer need for a favorable judgment in favor of the party
against whom attachment was issued in order that damages may be awarded. It is
indubitable that even a party who loses the action in main but is able to establish
a right to damages by reason of improper, irregular, or excessive attachment may
be entitled to damages. This bolsters the notion that the claim for damages arising
from such wrongful attachment may arise and be decided separately from the
merits of the main action. As noted by the Court in Philippine Charter Insurance
Corp. v. Court of Appeals:52

The surety does not, to be sure, become liable on its bond simply because judgment
is subsequently rendered against the party who obtained the preliminary
attachment. The surety becomes liable only when and if "the court shall
finally adjudge that the applicant was not entitled to the attachment." This
is so regardless of the nature and character of the judgment on the merits
of the principal claims, counterclaims or cross-claims, etc. asserted by the
parties against each other. Indeed, since an applicant's cause of action
may be entirely different from the ground relied upon by him for a
preliminary attachment, it may well be that although the evidence
warrants judgment in favor of said applicant, the proofs may nevertheless
also establish that said applicant's proferred ground for attachment was
inexistent or specious and hence, the writ should not have issued at
all; i.e., he was not entitled thereto in the first place. In that event, the final verdict
should logically award to the applicant the relief sought in his basic pleading, but
at the same time sentence him—usually on the basis of a counterclaim—to pay
damages caused to his adversary by the wrongful attachment. [Emphasis
supplied.]

Moreover, a separate rule—Section 8, Rule 58— covers instances when it is the


trial court that awards damages upon the bond for preliminary injunction of the
adverse party. Tellingly, it requires that the amount of damages to be awarded be
claimed, ascertained, and awarded under the same procedure prescribed in Section
20 of Rule 57.

In this case, we are confronted with a situation wherein the determination that the
attachment was wrongful did not come from the trial court, or any court having
jurisdiction over the main action. It was rendered by the Court of Appeals in the
exercise of its certiorari jurisdiction in the original action reviewing the propriety of
the issuance of theWrit of Preliminary Attachment against the private respondents.
Said ruling attained finality when it was affirmed by this Court.

The courts are thus bound to respect the conclusiveness of this final judgment,
deeming as it does the allowance by the RTC of preliminary attachment as
improper. This conclusion is no longer subject to review, even by the court called
upon to resolve the application for damages on the attachment bond. The only
matter left for adjudication is the proper amount of damages.

Nevertheless, Section 20, Rule 57 explicitly provides that the award for damages
be included in the judgment on the main case. This point was apparently not lost
on the Court of Appeals when it rendered its Resolution dated 23 March 1998,
certifying that the case may now be referred to the Raffle Committee for
assignment to a ponente. The appellate court stated therein: "The Resolution of
defendants-appellants’ motion for judgment on the attachment may be
incorporated in the decision by the ponente for study and report,"53 and such
observation is in conformity with Section 20.

However, this reasoning was assailed by respondents, who argued that the motion
for judgment on the attachment bond was a pending incident that should be
decided before the case can be re-raffled to a ponente for decision. Respondents
may be generally correct on the point that a case can only be deemed submitted
for decision only after all pending incidents are resolved. Yet since Section 20, Rule
57 provides that their application for damages on the attachment bond "shall be
included in the judgment on the main case," it is clear that the award for damages
need not be resolved before the case is submitted for decision, but should instead
be resolved and included in the judgment on the main case, or the decision on
the Appeal by Certiorari filed by the respondents.

Thus, the action of the Court of Appeals in resolving the application for damages
even before the main judgment was issued does not conform to Section 20, Rule
57. However, the special particular circumstances of this case lead us to rule that
such error is not mortal to the award of damages.

As noted earlier, the award of damages was made after a proper hearing had
occurred wherein all the concerned parties had been given the opportunity to
present their arguments and evidence in support and in rebuttal of the application
for damages. The premature award of damages does not negate the fact that the
parties were accorded due process, and indeed availed of their right to be heard.
Moreover, we are compelled to appreciate the particular circumstance in this case
that the right of private respondents to acquire relief through the award of damages
on account of the wrongful preliminary attachment has been conclusively affirmed
by the highest court of the land. This differs from the normal situation under Section
20, Rule 57 wherein the court having jurisdiction over the main action is still
required to ascertain whether the applicant actually has a right to damages. To
mandatorily require that the award of damages be included in the judgment in the
main case makes all the sense if the right to damages would be ascertained at the
same time the main judgment is made. However, when the said right is already
made viable by reason of a final judgment which is no longer subject to review,
there should be no unnecessary impediments to its immediate implementation.

And finally, any ruling on our part voiding the award of damages solely for the
reason that it was not included in the judgment on the main case, and remanding
the motion to the Court of Appeals for proper adjudication together with the main
case may exhibit fealty to the letter of the procedural rule, but not its avowed aims
of promoting a just and speedy disposition of every action and proceeding. After
all, if we were to compel the Court of Appeals to decide again on the application for
damages and incorporate its ruling in the judgment on the main action, the
appellate court will be examining exactly the same evidence and applying exactly
the same rules as it already did when it issued the assailed resolution awarding
damages on the bond. This would be unnecessarily redundant especially
considering that the Supreme Court had already affirmed that there was wrongful
attachment in this case.

There is also the fact that remanding the question of damages, singly for the
purpose of adhering to the letter of the procedural rule, would further prolong the
resolution of the main case, which has been with the Court of Appeals for more
than nine years now.54 Our Rules of Court precisely requires liberal construction of
the procedural rules to promote the objective of securing a just, speedy and
inexpensive disposition of every action and proceeding.55 With this precept, all the
more justification is supplied for allowing the award for damages despite its
apparent prematurity, if it is in all other respects proper.

The same reasons apply in resolving the question of whether the Court of Appeals
could have decided the Motion for Judgment on the Attachment Bond considering
that the case had not yet been re-raffled under the two-raffle system for study and
report. Under Section 5, Rule 3 of the RIRCA, a case filed with the Court of Appeals
undergoes two raffles for assignment to a particular Justice. The first raffle is made
for completion of records.56Afterwards, "all raffled appealed cases, the records of
which have been completed and submitted for decision, shall be re-raffled for
assignment to a Justice for study and report."57

The fact that Section 20, Rule 57 provides that the award of damages on the
attachment bond "shall be included in the judgment on the main case" necessarily
implies that it is to be made only after the case has been re-raffled for study and
report, and concurrently decided with the judgment of the ponente in the main
case. Again, the Court of Appeals failed to consider Section 20, Rule 57 when it
acted upon the application even before the second raffle was made.

Had Section 20, Rule 57 been faithfully complied with, a different Justice of the
Court of Appeals would have penned the ruling on the application for damages, in
accordance with the RIRCA. Yet this circumstance does not outweigh the other
considerations earlier mentioned that would warrant a liberal interpretation of the
procedural rules in favor of respondents. The parties had adduced all their
arguments and evidence before the Court of Appeals, and indeed, these were
appreciated on first instance by Justice Demetria, who eventually penned the
assailed resolutions. There was already a final determination that the attachment
was wrongful. And any delay brought about by requiring that it be the ponencia,
determined after the second raffle, who decides the application for damages may
bear pro forma adherence to the letter of the rule, but would only cause the delay
of the resolution of this long-pending case. Procedural rules are designed, and must
therefore be so interpreted as, to give effect to lawful and valid claims and not to
frustrate them.58

Even SIDDCOR acknowledges that there are recognized instances where the award
of damages or judgment on the attachment bond may not be included in the
decision on the main case, such as if the main case was dismissed for lack of
jurisdiction and no claim for damages could have been presented in the main
case.59

Scope of Damages

Properly Awardable

Next, we examine the particular award of damages made in this case, consisting of
₱15,384,509.98, plus interest, as well as ₱1,000,000.00 as attorney’s fees. There
seems to be no dispute that the former amount constituted the amount drawn
against the account of Sandoval by reason of the writ of execution issued by the
trial court on 27 May 1996. This fact was confirmed by the PNB, in
its Manifestation dated 19 July 1996, confirming the garnishment.

Respondents’ burden in proving damages in this case was considerably lessened


by the fact that there was already a final judgment, no longer subject to review,
that the preliminary attachment allowed by the trial court was indeed wrongful.
Hence, all that was necessary to be proved was the amount of damage actually
sustained by respondents by reason of the wrongful attachment. It is unquestioned
that by virtue of the writ of preliminary attachment, a Notice of Garnishment was
served upon the PNB over deposit accounts maintained by respondents. Said Notice
of Garnishment placed under the control of the RTC all the accounts maintained by
respondents, and prevented the transfer or disposition of these accounts. 60 Then
the subsequent Writ of Execution dated 27 May 1996 ordered the delivery to Carlos
of these accounts earlier subjected to garnishment.61

Clearly, the amount of actual pecuniary loss sustained by respondents has been
well established. The Manifestationsubmitted by the PNB further affirmed the actual
amount seized by Carlos, an amount which could not have been acquired had it not
been for the writ of preliminary attachment which was wrongfully issued.

Carlos lamely argues in his petition that there was no concrete or supporting
evidence to justify the amount of actual damages, a claim that is belied by the
official case records. The more substantive argument is presented by SIDDCOR,
which submits that any damages that may be awarded to respondents can include
only those that were incurred, if any, during the pendency of the appeal. But this
contention is belied by Section 4, Rule 57 of the 1997 Rules of Civil Procedure,
which provides that the bond issued for preliminary attachment is conditioned that
the applicant "will pay all the costs which may be adjudged to the adverse
party and all damages which he may sustain by reason of the attachment,
if the court shall finally adjudge that the applicant was not entitled
thereto."62

The case Paramount Insurance Corp. v. Court of Appeals63 is instructive. It


discusses the scope of the bond executed by upon an application for preliminary
injunction,64 which similarly covers "all damages which [may be] sustain[ed] by
reason of the injunction or temporary restraining order if the court should finally
decide that the applicant was not entitled thereto." 65 The surety in that case
claimed that it could be liable "only to the amount of damages accruing from the
time the injunction bond was issued until the termination of the case, and not from
the time the suit was commenced."66 In rebutting this claim, the Court ruled:

. . . . Rule 58, Section 4(b), provides that a bond is executed in favor of the party
enjoined to answer for all damages which he may sustain by reason of the
injunction. This Court already had occasion to rule on this matter in Mendoza v.
Cruz, where it held that "(t)he injunction bond is intended as a security for damages
in case it is finally decided that the injunction ought not to have been granted. It
is designed to cover all damages which the party enjoined can possibly
suffer. Its principal purpose is to protect the enjoined party against loss
or damage by reason of an injunction." No distinction was made as to when
the damages should have been incurred.67

Our ruling in Philippine Charter Insurance Corp. v. Court of Appeals, relied upon by
the Court of Appeals, squarely applies to this case:

Under the circumstances, too, there can be no gainsaying the surety’s full
awareness of its undertakings under its bond: that, as the law puts it: "the plaintiff
will pay all costs which may be adjudged to the defendant(s), and all damages
which may be sustained by reason of the attachment, if the same shall finally be
adjudged to have been wrongful and without cause," and that those damages
plainly comprehended not only those sustained during the trial of the action but
also those during the pendency of the appeal. This is the law, and this is how the
surety's liability should be understood. The surety's liability may be enforced
whether the application for damages for wrongful attachment be submitted in the
original proceedings before the Trial Court, or on appeal, so long as the judgment
has not become executory. The surety's liability is not and cannot be limited
to the damages caused by the improper attachment only during the
pendency of the appeal. That would be absurd. The plain and patent
intendment of the law is that the surety shall answer for all damages that
the party may suffer as a result of the illicit attachment, for all the time
that the attachment was in force; from levy to dissolution. . . .

The fact that the second paragraph of the rule speaks only of "damages
sustained during the pendency of the appeal" is of no moment; it obviously
proceeds from the assumption in the first paragraph that the award for the
damages suffered during the pendency of the case in the trial court was in
fact "included in the final judgment" (or applied for therein before the appeal
was perfected or the judgment became executory); hence, it states that the
damages additionally suffered thereafter, i.e., during the pendency of the appeal,
should be claimed before the judgment of the appellate tribunal becomes
executory. It however bears repeating that where. as in the case at bar, the
judgment of the Trial Court has expressly or impliedly sustained the
attachment and thus has given rise to no occasion to speak of, much less,
file an application for damages for wrongful attachment, and it is only in
the decision of the Court of Appeals that the attachment is declared
wrongful and that the applicant "was not entitled thereto," the rule is, as
it should be, that it is entirely proper at this time for the application for
damages for such wrongful attachment to be filed—i.e., for all the damages
sustained thereby, during all the time that it was in force, not only during
the pendency of the appeal. . . .68

The rule is thus well-settled that the bond issued upon an application for preliminary
attachment answers for all damages, incurred at whatever stage, which are
sustained by reason of the attachment. The award of actual damages by the Court
of Appeals is thus proper in amount. However, we disagree that the rate of legal
interest be counted from the date of the "unlawful garnishment," or on 27 June
1996. Properly, interest should start to accrue only from the moment it had been
finally determined that the attachment was unlawful, since it is on that basis that
the right to damages comes to existence. In this case, legal interest commences
from the date the Court of Appeals decision in CA-G.R. SP No. 39267 became final,
by reason of its affirmation by this Court.

The award of attorney’s fees in the amount of ₱1,000,000.00 is also questioned


before this Court, considering that the Court of Appeals did not award moral or
exemplary damages. The general rule may be that an award of attorney’s fees
should be deleted where the award of moral and exemplary damages are
eliminated.69 Nonetheless, attorney’s fees may be awarded under the Civil Code
where the court deems it just and equitable that attorney’s fees and expenses of
litigation should be recovered,70 even if moral and exemplary damages are
unavailing.71

Particularly, the Court has recognized as just and equitable that attorney's fees be
awarded when a party is compelled to incur expenses to lift a wrongfully issued
writ of attachment.72 The amount of money garnished, and the length of time
respondents have been deprived from use of their money by reason of the wrongful
attachment, all militate towards a finding that attorney’s fees are just and equitable
under the circumstances. However, we deem the amount of ₱1,000,000.00 as
excessive, and modify the award of attorney’s fees to ₱500,000.00 which
represents merely approximately three percent of the actual damages suffered by
and awarded to respondents. We also delete the imposition of legal interest made
by the Court of Appeals on the awarded attorney’s fees.

Other Issues Raised in G.R. No. 135830

The issues raised in G.R. No. 136035 have been dispensed with, and the remaining
issues in G.R. No. 135830 are relatively minor. There is no need to dwell at length
on them.

Carlos insists that respondents were liable to have paid docket fees upon filing of
their Motion for Judgment on Attachment Bond, on the theory that they claimed
therein for the first time the alleged damages resulting from the dissolved
attachment. The said motion is characterized as an initiatory proceeding because
it is claimed therein for the first time, the damages arising from the attachment. In
the same vein, Carlos argues that the absence of a certification against forum-
shopping attached to the motion renders the said motion as fatal. Again, it is
pointed out that initiatory pleadings must contain the said certification against
forum-shopping.

Our ruling in Santo Tomas University Hospital v. Surla73 is instructive. It was


argued therein that the requirement of the certification against forum-shopping, as
contained in Administrative Circular No. 04-94,74 covered compulsory
counterclaims. The Court ruled otherwise:

It bears stressing, once again, that the real office of Administrative Circular No. 04-
94, made effective on 01 April 1994, is to curb the malpractice commonly referred
to also as forum-shopping. . . . The language of the circular distinctly suggests that
it is primarily intended to cover an initiatory pleading or an incipient application of
a party asserting a claim for relief.
It should not be too difficult, the foregoing rationale of the circular aptly
taken, to sustain the view that the circular in question has not, in fact,
been contemplated to include a kind of claim which, by its very nature as
being auxiliary to the proceeding in the suit and as deriving its substantive
and jurisdictional support therefrom, can only be appropriately pleaded in
the answer and not remain outstanding for independent resolution except
by the court where the main case pends. Prescinding from the foregoing, the
proviso in the second paragraph of Section 5, Rule 8, of the 1997 Rules of Civil
Procedure, i.e., that the violation of the anti-forum shopping rule "shall not be
curable by mere amendment . . . but shall be cause for the dismissal of the case
without prejudice," being predicated on the applicability of the need for a
certification against forum shopping, obviously does not include a claim which
cannot be independently set up.75 (Emphasis supplied.)

It is clear that under Section 20, Rule 57, the application for damages on the
attachment bond cannot be independently set up, but must be filed in the main
case, before the judgment therein becomes final and executory. Santo
Tomas squarely applies in determining that no certification against forum-shopping
was required in the Motion for Judgment on the Attachment Bond. The same
reasoning also sustains a ruling that neither legal fees were required for the filing
of the said motion. Section 1, Rule 141 of the Rules of Court provides that legal
fees are prescribed upon the filing of the pleading or other application which
initiates an action or proceeding.76 Since the said application for judgment on the
attachment bond cannot be considered as an initiatory pleading, as it cannot be
independently set up from the main action, it is not likewise chargeable with legal
fees.

As to the issue relating to the other Resolution dated 26 June 1998 denying the
motion to dismiss appeal on the ground of forum-shopping, we find Carlos’s
arguments as unmeritorious. Forum-shopping allegedly existed because petitioners
had filed two cases before the Court of Appeals, CA-G.R. CV No. 53229, and
the Petition for Certiorariwith Temporary Restraining Order dated 2 June 1996
attacking the allowance of execution pending appeal. Evidently, the two causes of
action in these two petitions are different, CA-G.R. CV No. 53229 being an appeal
from the Summary Judgment rendered by the RTC, and the second petition
assailing the subsequent allowance by the RTC of execution pending appeal. There
is no identity between these two causes of action that would warrant a finding of
forum-shopping.

Issues Raised in G.R. No. 137743

To recount, respondents, having obtained a favorable decision on their Motion for


Judgment on the Attachment Bond, filed a Motion for Immediate Execution of the
award of damages. This was granted by the Court of Appeals in its Resolution dated
16 October 1998, said resolution now specifically assailed by SIDDCOR in G.R. No.
137743.

In their Motion for Immediate Execution, respondents’ theory in seeking the


immediate execution of the award of damages was that said award was not subject
to appeal, the ruling thereupon being an interlocutory order. 77 This position was
not adopted by the Court of Appeals in its 16 October 1998 Resolution, which was
otherwise favorably disposed to respondents. Instead, the Court of Appeals
predicated the immediate execution on the following grounds: (1) that the judicial
finding that the writ of preliminary attachment was wrongful was already final and
beyond review; (2) there were no material and substantial defenses against the
motion for the issuance of the judgment bond; (3) Sandoval was elderly and sickly,
without means of livelihood and may not be able to enjoy the fruits of the judgment
on the attachment bond; (4) that immediate execution would end her suffering
caused by the arbitrary garnishment of her PNB account.

There is no doubt that a judgment on the attachment bond is a final and appealable
order. As stated earlier, it is, under normal course, included in the main judgment,
which in turn is final and appealable. Respondents admit that they had erred in
earlier characterizing the said judgment as an interlocutory order. Still, SIDDCOR
argues that such earlier error is fatal, and that the Court of Appeals abused its
discretion in ruling on the motion on a theory different from that urged on by
respondents.

By no means could respondents be deemed as estopped from changing their legal


theory, since the rule on estoppel applies to questions of fact and not questions of
law.78 Moreover, courts are empowered to decide cases even if the parties raise
legal rationales other than that which would actually apply in the case. The basis
of whether respondents are entitled to immediate execution arises from law,
particularly Section 2(a), Rule 39 of the Rules of Court, and not solely on whatever
allegations may be raised by the movant.

Thus, we find no grave abuse of discretion on the part of the Court of Appeals, even
though it allowed execution pending appeal on a legal basis different from that
originally adduced by respondents. After all, the reasoning ultimately employed by
the appellate court is correct, and it hardly would be judicious to require the lower
court to adhere to the movant’s erroneous ratiocination and preclude the proper
application of the law.

We need not review in length the justification of the Court of Appeals in allowing
execution pending appeal. The standard set under Section 2(a), Rule 39 merely
requires "good reasons," a "special order," and "due hearing." Due hearing would
not require a hearing in open court, but simply the right to be heard, which
SIDDCOR availed of when it filed its opposition to the motion for immediate
execution. The Resolution dated 16 October 1998 satisfies the "special order"
requirement, and it does enumerate at length the "good reasons" for allowing
execution pending appeal. As to the appreciation of "good reasons," we simply note
that the advanced age alone of Sandoval would have sufficiently justified execution
pending appeal, pursuant to the well-settled jurisprudential rule.79 The
wrongfulness of the attachment, and the length of time respondents have been
deprived of their money by reason of the wrongful attachment further justifies
execution pending appeal under these circumstances.

WHEREFORE, the petitions are DISMISSED. The Temporary Restraining Order


issued in the Resolution dated 9 June 1999 is hereby LIFTED. The
assailed Resolution of the Court of Appeals Special Fourth Division dated 26 June
1998 is AFFIRMED with the MODIFICATIONS that the legal interest on the award
of actual damages should commence from the date of the finality of the Decision of
the Court of Appeals in CA G.R. SP No. 39267 and that the award of attorney’s fees
is in the amount of ₱500,000. Costs against petitioners. SO ORDERED.
ANITA CHENG, G.R. No. 174238
Petitioner,
Promulgated:

July 7, 2009

- versus -

SPOUSES WILLIAM SY and


TESSIE SY,
Respondents.

x------------------------------------------------------------------------------------x

DECISION
NACHURA, J.:

This is a petition[1] for review on certiorari under Rule 45 of the Rules of Court of
the Order dated January 2, 2006[2] of the Regional Trial Court (RTC), Branch
18, Manilain Civil Case No. 05-112452 entitled Anita Cheng v. Spouses William Sy
and Tessie Sy.

The antecedents are as follows

Petitioner Anita Cheng filed two (2) estafa cases before the RTC, Branch 7, Manila
against respondent spouses William and Tessie Sy (Criminal Case No. 98-969952
against Tessie Sy and Criminal Case No. 98-969953 against William Sy) for issuing
to her Philippine Bank of Commerce (PBC) Check Nos. 171762 and 71860
for P300,000.00 each, in payment of their loan, both of which were dishonored
upon presentment for having been drawn against a closed account.

Meanwhile, based on the same facts, petitioner, on January 20, 1999, filed against
respondents two (2) cases for violation of Batas Pambansa Bilang (BP Blg.) 22
before the Metropolitan Trial Court (MeTC), Branch 25, Manila (Criminal Case Nos.
341458-59).

On March 16, 2004, the RTC, Branch 7, Manila dismissed the estafa cases for failure
of the prosecution to prove the elements of the crime. The Order dismissing
Criminal Case No. 98-969952 contained no declaration as to the civil liability of
Tessie Sy.[3] On the other hand, the Order in Criminal Case No. 98-969953
contained a statement, Hence, if there is any liability of the accused, the same is
purely civil, not criminal in nature.[4]

Later, the MeTC, Branch 25, Manila, dismissed, on demurrer, the BP Blg. 22 cases
in its Order[5] dated February 7, 2005 on account of the failure of petitioner to
identify the accused respondents in open court. The Order also did not make any
pronouncement as to the civil liability of accused respondents.
On April 26, 2005, petitioner lodged against respondents before the RTC, Branch
18, Manila, a complaint[6] for collection of a sum of money with damages (Civil Case
No. 05-112452) based on the same loaned amount of P600,000.00 covered by the
two PBC checks previously subject of the estafa and BP Blg. 22 cases.

In the assailed Order[7] dated January 2, 2006, the RTC, Branch 18, Manila,
dismissed the complaint for lack of jurisdiction, ratiocinating that the civil action to
collect the amount of P600,000.00 with damages was already impliedly instituted
in the BP Blg. 22 cases in light of Section 1, paragraph (b) of Rule 111 of the
Revised Rules of Court.

Petitioner filed a motion for reconsideration[8] which the court denied in its
Order[9] dated June 5, 2006. Hence, this petition, raising the sole legal issue

Whether or not Section 1 of Rule 111 of the 2000 Rules of Criminal


Procedure and Supreme Court Circular No. 57-97 on the Rules and
Guidelines in the filing and prosecution of criminal cases under BP Blg.
22 are applicable to the present case where the nature of the order
dismissing the cases for bouncing checks against the respondents was
[based] on the failure of the prosecution to identify both the accused
(respondents herein)?[10]

Essentially, petitioner argues that since the BP Blg. 22 cases were filed on January
20, 1999, the 2000 Revised Rules on Criminal Procedure promulgated on December
1, 2000 should not apply, as it must be given only prospective application. She
further contends that that her case falls within the following exceptions to the rule
that the civil action correspondent to the criminal action is deemed instituted with
the latter

(1) additional evidence as to the identities of the accused is necessary


for the resolution of the civil aspect of the case;

(2) a separate complaint would be just as efficacious as or even more


expedient than a timely remand to the trial court where the
criminal action was decided for further hearings on the civil aspect
of the case;

(3) the trial court failed to make any pronouncement as to the civil
liability of the accused amounting to a reservation of the right to
have the civil liability litigated in a separate action;

(4) the trial court did not declare that the facts from which the civil
liability might arise did not exist;

(5) the civil complaint is based on an obligation ex-contractu and


not ex-delicto pursuant to Article 31[11] of the Civil Code; and

(6) the claim for civil liability for damages may be had under Article
29[12] of the Civil Code.
Petitioner also points out that she was not assisted by any private prosecutor
in the BP Blg. 22 proceedings.

The rule is that upon the filing of the estafa and BP Blg. 22 cases against
respondents, where the petitioner has not made any waiver, express reservation
to litigate separately, or has not instituted the corresponding civil action to collect
the amount of P600,000.00 and damages prior to the criminal action, the civil
action is deemed instituted with the criminal cases.[13]

This rule applies especially with the advent of the 2000 Revised Rules on
Criminal Procedure. Thus, during the pendency of both the estafa and the BP Blg.
22 cases, the action to recover the civil liability was impliedly instituted and
remained pending before the respective trial courts. This is consonant with our
ruling in Rodriguez v. Ponferrada[14] that the possible single civil liability arising
from the act of issuing a bouncing check can be the subject of both civil actions
deemed instituted with the estafa case and the prosecution for violation of BP Blg.
22, simultaneously available to the complaining party, without traversing the
prohibition against forum shopping.[15] Prior to the judgment in either the estafa
case or the BP Blg. 22 case, petitioner, as the complainant, cannot be deemed to
have elected either of the civil actions both impliedly instituted in the said criminal
proceedings to the exclusion of the other.[16]
The dismissal of the estafa cases for failure of the prosecution to prove the elements
of the crime beyond reasonable doubtwhere in Criminal Case No. 98-969952 there
was no pronouncement as regards the civil liability of the accused and in Criminal
Case No. 98-969953 where the trial court declared that the liability of the accused
was only civil in natureproduced the legal effect of a reservation by the petitioner
of her right to litigate separately the civil action impliedly instituted with the estafa
cases, following Article 29 of the Civil Code.[17]

However, although this civil action could have been litigated separately on account
of the dismissal of the estafa cases on reasonable doubt, the petitioner was deemed
to have also elected that such civil action be prosecuted together with the BP Blg.
22 cases in light of the Rodriguez v. Ponferrada ruling.

With the dismissal of the BP Blg. 22 cases for failure to establish the identity of the
accused, the question that arises is whether such dismissal would have the same
legal effect as the dismissed estafa cases. Put differently, may petitioners action to
recover respondents civil liability be also allowed to prosper separately after the BP
Blg. 22 cases were dismissed?

Section 1 (b), Rule 111 of the 2000 Revised Rules on Criminal Procedure
states

Section 1. Institution of criminal and civil actions.

xxx

(b) The criminal action for violation of Batas Pambansa Blg. 22 shall be
deemed to include the corresponding civil action. No reservation to file
such civil action separately shall be allowed.
Upon filing of the joint criminal and civil actions, the offended party shall
pay in full the filing fees based on the amount of the check involved,
which shall be considered as the actual damages claimed. Where the
complaint or information also seeks to recover liquidated, moral,
nominal, temperate or exemplary damages, the offended party shall pay
the filing fees based on the amounts alleged therein. If the amounts are
not so alleged but any of these damages [is] subsequently awarded by
the court, the filing fees based on the amount awarded shall constitute
a first lien on the judgment.

Where the civil action has been filed separately and trial thereof has not
yet commenced, it may be consolidated with the criminal action upon
application with the court trying the latter case.If the application is
granted, the trial of both actions shall proceed in accordance with
section 2 of this Rule governing consolidation of the civil and criminal
actions.

Petitioner is in error when she insists that the 2000 Rules on Criminal Procedure
should not apply because she filed her BP Blg. 22 complaints in 1999. It is now
settled that rules of procedure apply even to cases already pending at the time of
their promulgation. The fact that procedural statutes may somehow affect the
litigants rights does not preclude their retroactive application to pending actions. It
is axiomatic that the retroactive application of procedural laws does not violate any
right of a person who may feel that he is adversely affected, nor is it constitutionally
objectionable. The reason for this is that, as a general rule, no vested right may
attach to, nor arise from, procedural laws.[18]

Indeed, under the present revised Rules, the criminal action for violation of BP Blg.
22 includes the corresponding civil action to recover the amount of the checks. It
should be stressed, this policy is intended to discourage the separate filing of the
civil action. In fact, the Rules even prohibits the reservation of a separate civil
action, i.e., one can no longer file a separate civil case after the criminal complaint
is filed in court. The only instance when separate proceedings are allowed is when
the civil action is filed ahead of the criminal case. Even then, the Rules encourages
the consolidation of the civil and criminal cases. Thus, where petitioners rights may
be fully adjudicated in the proceedings before the court trying the BP Blg. 22 cases,
resort to a separate action to recover civil liability is clearly unwarranted on account
of res judicata, for failure of petitioner to appeal the civil aspect of the cases. In
view of this special rule governing actions for violation of BP Blg. 22, Article 31 of
the Civil Code is not applicable.[19]

Be it remembered that rules governing procedure before the courts, while not cast
in stone, are for the speedy, efficient, and orderly dispensation of justice and should
therefore be adhered to in order to attain this objective.[20]

However, in applying the procedure discussed above, it appears that


petitioner would be left without a remedy to recover from respondents
the P600,000.00 allegedly loaned from her. This could prejudice even the
petitioners Notice of Claim involving the same amount filed in Special Proceedings
No. 98-88390 (Petition for Voluntary Insolvency by Kolin Enterprises, William Sy
and Tessie Sy), which case was reportedly archived for failure to prosecute the
petition for an unreasonable length of time.[21]Expectedly, respondents would raise
the same defense that petitioner had already elected to litigate the civil action to
recover the amount of the checks along with the BP Blg. 22 cases.

It is in this light that we find petitioners contention that she was not assisted by a
private prosecutor during the BP Blg. 22 proceedings critical. Petitioner indirectly
protests that the public prosecutor failed to protect and prosecute her cause when
he failed to have her establish the identities of the accused during the trial and
when he failed to appeal the civil action deemed impliedly instituted with the BP
Blg. 22 cases. On this ground, we agree with petitioner.

Faced with the dismissal of the BP Blg. 22 cases, petitioners recourse pursuant
to the prevailing rules of procedure would have been to appeal the civil action to
recover the amount loaned to respondents corresponding to the bounced
checks. Hence, the said civil action may proceed requiring only a preponderance of
evidence on the part of petitioner. Her failure to appeal within the reglementary
period was tantamount to a waiver altogether of the remedy to recover the civil
liability of respondents. However, due to the gross mistake of the prosecutor in the
BP Blg. 22 cases, we are constrained to digress from this rule.

It is true that clients are bound by the mistakes, negligence and omission of their
counsel.[22] But this rule admits of exceptions (1) where the counsels mistake is so
great and serious that the client is prejudiced and denied his day in court, or (2)
where the counsel is guilty of gross negligence resulting in the clients deprivation
of liberty or property without due process of law.[23] Tested against these
guidelines, we hold that petitioners lot falls within the exceptions.

It is an oft-repeated exhortation to counsels to be well-informed of existing


laws and rules and to keep abreast with legal developments, recent enactments
and jurisprudence. Unless they faithfully comply with such duty, they may not be
able to discharge competently and diligently their obligations as members of the
Bar.[24] Further, lawyers in the government service are expected to be more
conscientious in the performance of their duties as they are subject to public
scrutiny. They are not only members of the Bar but are also public servants who
owe utmost fidelity to public service.[25] Apparently, the public prosecutor neglected
to equip himself with the knowledge of the proper procedure for BP Blg. 22 cases
under the 2000 Rules on Criminal Procedure such that he failed to appeal the civil
action impliedly instituted with the BP Blg. 22 cases, the only remaining remedy
available to petitioner to be able to recover the money she loaned to respondents,
upon the dismissal of the criminal cases on demurrer. By this failure, petitioner was
denied her day in court to prosecute the respondents for their obligation to pay
their loan.

Moreover, we take into consideration the trial courts observation when it


dismissed the estafa charge in Criminal Case No. 98-969953 that if there was any
liability on the part of respondents, it was civil in nature. Hence, if the loan be
proven true, the inability of petitioner to recover the loaned amount would be
tantamount to unjust enrichment of respondents, as they may now conveniently
evade payment of their obligation merely on account of a technicality applied
against petitioner.

There is unjust enrichment when (1) a person is unjustly benefited, and (2)
such benefit is derived at the expense of or with damages to another. This doctrine
simply means that a person shall not be allowed to profit or enrich himself
inequitably at anothers expense. One condition for invoking this principle of unjust
enrichment is that the aggrieved party has no other recourse based on contract,
quasi-contract, crime, quasi-delict or any other provision of law.[26]

Court litigations are primarily designed to search for the truth, and a liberal
interpretation and application of the rules which will give the parties the fullest
opportunity to adduce proof is the best way to ferret out the truth. The dispensation
of justice and vindication of legitimate grievances should not be barred by
technicalities.[27] For reasons of substantial justice and equity, as the complement
of the legal jurisdiction that seeks to dispense justice where courts of law, through
the inflexibility of their rules and want of power to adapt their judgments to the
special circumstances of cases, are incompetent to do so,[28] we thus rule, pro hac
vice, in favor of petitioner.

WHEREFORE, the petition is GRANTED. Civil Case No. 05-112452 entitled Anita
Cheng v. Spouses William Sy and Tessie Sy is hereby ordered REINSTATED. No
pronouncement as to costs. SO ORDERED.
GILBERT G. GUY, Petitioner, G.R. No. 165849

- versus -

THE COURT OF APPEALS


TH
(8 DIVISION), NORTHERN
ISLANDS CO., INCORPORATED,
SIMNY G. GUY, GERALDINE G. GUY,
GLADYS G. YAO, and EMILIA
TABUGADIR,
Respondents.
x------------------------
G.R. No. 170185
--x
IGNACIO AND IGNACIO LAW
OFFICES,
Petitioner,

- versus -

THE COURT OF APPEALS


TH
(7 DIVISION), NORTHERN
ISLANDS CO., INCORPORATED,
SIMNY G. GUY, GERALDINE G. GUY,
GLADYS G. YAO, and EMILIA A. G.R. No. 170186
TABUGADIR,
Respondents.
x------------------------
--x
SMARTNET PHILIPPINES, Petitioner,

- versus -
THE COURT OF APPEALS
TH
(7 DIVISION), NORTHERN
ISLANDS CO., INCORPORATED,
SIMNY G. GUY, GERALDINE G. GUY,
GLADYS
G.R. No. 171066

G. YAO, and EMILIA A. TABUGADIR,


Respondents.
x------------------------
--x
LINCOLN CONTINENTAL
DEVELOPMENT CO., INC.,
Petitioner,

- versus -
NORTHERN ISLANDS CO., G.R. No. 176650
INCORPORATED, SIMNY G. GUY,
GERALDINE G. GUY, GRACE G.
CHEU, GLADYS G. YAO, and EMILIA
A. TABUGADIR, Promulgated:
Respondents.
x - - - - - - - - - - - - - - - - - - - - - - - - December 10, 2007
--x
LINCOLN CONTINENTAL
DEVELOPMENT COMPANY, INC.,
Petitioner,

- versus -

NORTHERN ISLANDS CO.,


INCORPORATED, SIMNY G. GUY,
GERALDINE G. GUY, GRACE G.
CHEU, GLADYS G. YAO, and EMILIA
A. TABUGADIR,
Respondents.

x ---------------------------------------------------------------------
--------------------x

DECISION

SANDOVAL-GUTIERREZ, J.:
Before us are five (5) consolidated cases which stemmed from Civil Case No.
04-109444 filed with the Regional Trial Court (RTC), Branch 24, Manila,
subsequently re-raffled to Branch 46[1] and eventually to Branch 25.[2]

The instant controversies arose from a family dispute. Gilbert Guy is the son of
Francisco and Simny Guy. Geraldine, Gladys and Grace are his sisters. The family
feud involves the ownership and control of 20,160 shares of stock of Northern
Islands Co., Inc. (Northern Islands) engaged in the manufacture, distribution, and
sales of various home appliances bearing the 3-D trademark.

Simny and her daughters Geraldine, Gladys and Grace, as well


as Northern Islands and Emilia Tabugadir, have been impleaded as respondents in
the above-entitled cases. Northern Islands is a family-owned corporation organized
in 1957 by spouses Francisco and respondent Simny Guy. In November 1986, they
incorporated Lincoln Continental Development Corporation, Inc. (Lincoln
Continental) as a holding company of the 50% shares of stock
of Northern Islands in trust for their three (3) daughters, respondents Geraldine,
Gladys and Grace. Sometime in December 1986, upon instruction of spouses Guy,
Atty. Andres Gatmaitan, president of Lincoln Continental, indorsed in blank Stock
Certificate No. 132 (covering 8,400 shares) and Stock Certificate No. 133 (covering
11,760 shares) and delivered them to Simny.

In 1984, spouses Guy found that their son Gilbert has been disposing of the assets
of their corporations without authority. In order to protect the assets of Northern
Islands, Simny surrendered Stock Certificate Nos. 132 and 133 to Emilia Tabugadir,
an officer of Northern Islands. The 20,160 shares covered by the two Stock
Certificates were then registered in the names of respondent sisters, thus enabling
them to assume an active role in the management of Northern Islands.

On January 27, 2004, during a special meeting of the stockholders of Northern


Islands, Simny was elected President; Grace as Vice-President for Finance;
Geraldine as Corporate Treasurer; and Gladys as Corporate Secretary. Gilbert
retained his position as Executive Vice President. This development started the
warfare between Gilbert and his sisters.

On March 18, 2004, Lincoln Continental filed with the RTC, Branch 24, Manila a
Complaint for Annulment of the Transfer of Shares of Stock against respondents,
docketed as Civil Case No. 04-109444. The complaint basically alleges that Lincoln
Continental owns 20,160 shares of stock of Northern Islands; and that
respondents, in order to oust Gilbert from the management of Northern Islands,
falsely transferred the said shares of stock in respondent sisters names. Lincoln
Continental then prayed for an award of damages and that the management
of Northern Islands be restored to Gilbert. Lincoln also prayed for the issuance of
a temporary restraining order (TRO) and a writ of preliminary mandatory injunction
to prohibit respondents from exercising any right of ownership over the shares.
On June 16, 2004, Lincoln Continental filed a Motion to Inhibit the Presiding Judge
of Branch 24, RTC, Manila on the ground of partiality. In an Order dated June 22,
2004, the presiding judge granted the motion and inhibited himself from further
hearing Civil Case No. 04-109444. It was then re-raffled to Branch 46 of the same
court.

On July 12, 2004, Branch 46 set the continuation of the hearing on Lincoln
Continentals application for a TRO.

On July 13, 2004, respondents filed with the Court of Appeals a Petition
for Certiorari and Mandamus, docketed as CA-G.R. SP No. 85069, raffled off to the
Tenth Division. Respondents alleged that the presiding judge of Branch 24, in
issuing the Order dated June 22, 2004 inhibiting himself from further hearing Civil
Case No. 04-109444, and the presiding judge of Branch 46, in issuing the Order
dated July 12, 2004 setting the continuation of hearing on Lincoln Continentals
application for a TRO, acted with grave abuse of discretion tantamount to lack or
excess of jurisdiction.

Meanwhile, on July 15, 2004, the trial court issued the TRO prayed for by Lincoln
Continental directing respondents to restore to Gilbert the shares of stock under
controversy. In the same Order, the trial court set the hearing of Lincoln
Continentals application for a writ of preliminary injunction on July 19, 20, and 22,
2004.

On July 16, 2004, the Court of Appeals (Tenth Division) issued a TRO enjoining
Branch 46, RTC, Manila from enforcing, maintaining, or giving effect to its Order
of July 12, 2004 setting the hearing of Lincoln Continentals application for a TRO.

Despite the TRO, the trial court proceeded to hear Lincoln Continentals application
for a writ of preliminary injunction. This prompted respondents to file in the same
CA-G.R. SP No. 85069 a Supplemental Petition for Certiorari, Prohibition,
and Mandamus seeking to set aside the Orders of the trial court setting the hearing
and actually hearing Lincoln Continentals application for a writ of preliminary
injunction. They prayed for a TRO and a writ of preliminary injunction to enjoin the
trial court (Branch 46) from further hearing Civil Case No. 04-109444.

On September 17, 2004, the TRO issued by the Court of Appeals (Tenth Division)
in CA-G.R. SP No. 85069 expired.

On September 20, 2004, Gilbert filed a Motion for Leave to Intervene and Motion
to Admit Complaint-in-Intervention in Civil Case No. 04-109444. In its Order
dated October 4, 2004, the trial court granted the motions.
Meantime, on October 13, 2004, the trial court issued the writ of preliminary
mandatory injunction prayed for by Lincoln Continental in Civil Case No. 04-
109444.

On October 20, 2004, the Court of Appeals (Tenth Division) denied respondents
application for injunctive relief since the trial court had already issued a writ of
preliminary injunction in favor of Lincoln Continental. Consequently, on October 22,
2004, respondents filed with the Tenth Division a Motion to Withdraw Petition and
Supplemental Petition in CA-G.R. SP No. 85069.

On October 26, 2004, respondents filed a new Petition for Certiorari with the Court
of Appeals, docketed as CA-G.R. SP No. 87104, raffled off to the Eighth
Division. They prayed that the TRO and writ of preliminary injunction issued by the
RTC, Branch 46, Manila be nullified and that an injunctive relief be issued restoring
to them the management of Northern Islands. They alleged that Gilbert has been
dissipating the assets of the corporation for his personal gain.

On October 28, 2004, the Court of Appeals Eighth Division issued a TRO enjoining
the implementation of the writ of preliminary injunction dated October 13,
2004 issued by the trial court in Civil Case No. 04-109444; and directing Lincoln
Continental to turn over the assets and records of Northern Islands to respondents.

On November 2, 2004, respondents filed with the appellate court (Eighth Division)
an Urgent Omnibus Motion praying for the issuance of a break-open Order to
implement its TRO.

On November 4, 2004, the Eighth Division issued a Resolution granting


respondents motion. Pursuant to this Resolution, respondents entered
the Northern Islands premises at No. 3 Mercury Avenue, Libis, Quezon City.

On November 18, 2004, Gilbert filed with this Court a petition for certiorari,
docketed as G.R. No. 165849, alleging that the Court of Appeals (Eighth Division),
in granting an injunctive relief in favor of respondents, committed grave abuse of
discretion tantamount to lack or in excess of jurisdiction. The petition also alleges
that respondents resorted to forum shopping.

Meanwhile, on December 16, 2004, Smartnet Philippines, Inc. (Smartnet) filed with
the Metropolitan Trial Court (MeTC), Branch 35, Quezon City a complaint for
forcible entry against respondents, docketed as Civil Case No. 35-33937. The
complaint alleges that in entering the Northern Islands premises, respondents took
possession of the area being occupied by Smartnet and barred its officers and
employees from occupying the same.
Likewise on December 16, 2004, Ignacio and Ignacio Law Offices also filed with
Branch 37, same court, a complaint for forcible entry against respondents,
docketed as Civil Case No. 34106. It alleges that respondents forcibly occupied its
office space when they took over the premises of Northern Islands.

On December 22, 2004, the Eighth Division issued the writ of preliminary injunction
prayed for by respondents in CA-G.R. SP No. 87104.

Subsequently, the presiding judge of the RTC, Branch 46, Manila retired. Civil Case
No. 04-109444 was then re-raffled to Branch 25.

On January 20, 2005, respondents filed with the Eighth Division of the appellate
court a Supplemental Petition for Certiorari with Urgent Motion for a Writ of
Preliminary Injunction to Include Supervening Events. Named as additional
respondents were 3-D Industries, Judge Celso D. Lavia, Presiding Judge, RTC,
Branch 71, Pasig City and Sheriff Cresencio Rabello, Jr. This supplemental petition
alleges that Gilbert, in an attempt to circumvent the injunctive writ issued by the
Eighth Division of the appellate court, filed with the RTC, Branch 71, Pasig City a
complaint for replevin on behalf of 3-D Industries, to enable it to take possession
of the assets and records of Northern Islands. The complaint was docketed as Civil
Case No. 70220. On January 18, 2005, the RTC issued the writ of replevin in favor
of 3-D Industries.

On April 15, 2005, respondents filed with the Eighth Division a Second
Supplemental Petition for Certiorari and Prohibition with Urgent Motion for the
Issuance of an Expanded Writ of Preliminary Injunction. Impleaded therein as
additional respondents were Ignacio and Ignacio Law Offices, Smartnet, Judge
Maria Theresa De Guzman, Presiding Judge, MeTC, Branch 35, Quezon City, Judge
Augustus C. Diaz, Presiding Judge, MeTC, Branch 37, Quezon City, Sun Fire Trading
Incorporated, Zolt Corporation, Cellprime Distribution Corporation, Goodgold
Realty and Development Corporation, John Does and John Doe Corporations.
Respondents alleged in the main that the new corporations impleaded are alter
egos of Gilbert; and that the filing of the forcible entry cases with the MeTC was
intended to thwart the execution of the writ of preliminary injunction
dated December 22, 2004 issued by the Court of Appeals (Eighth Division) in CA-
G.R. SP No. 87104.

On April 26, 2005, the Eighth Division issued a Resolution admitting respondents
new pleading. On August 19, 2005, the Eighth Division (now Seventh Division)
rendered its Decision in CA-G.R. SP No. 87104, the dispositive portion of which
reads:

WHEREFORE, premises considered, the petition is hereby GRANTED


and the October 13, 2004 Order and the October 13, 2004 Writ of
Preliminary Mandatory Injunction issued by Branch 46 of the Regional
Trial Court of Manila are hereby REVERSED and SET ASIDE. The
December 17, 2004 Order and Writ of Preliminary Injunction issued by
this Court of Appeals are hereby MADE PERMANENT against all
respondents herein.

SO ORDERED.

Meanwhile, in a Decision[3] dated September 19, 2005, the RTC, Branch


25, Manila dismissed the complaint filed by Lincoln Continental and the complaint-
in-intervention of Gilbert in Civil Case No. 04-109444, thus:

WHEREFORE, in view of the foregoing, the Complaint and the


Complaint-in-Intervention are hereby DISMISSED. Plaintiff and
plaintiff-intervenor are hereby ordered to jointly and severally pay
defendants the following:

(a) Moral damages in the amount of Php2,000,000.00 each


for defendants Simny Guy, Geraldine Guy, Grace Guy-Cheu
and Gladys Yao;
(b) Moral damages in the amount of Php200,000.00 for
defendant Emilia Tabugadir;
(c) Exemplary damages in the amount of Php2,000,000.00
each for defendants Simny Guy, Geraldine Guy, Grace Guy-
Cheu, and Gladys Yao;
(d) Exemplary damages in the amount of Php200,000.00 for
defendant Emilia Tabugadir;
(e) Attorneys fees in the amount of Php2,000.000.00; and
(f) Costs of suit.

SO ORDERED.

The trial court held that Civil Case No. 04-109444 is a baseless and an
unwarranted suit among family members; that based on the evidence, Gilbert was
only entrusted to hold the disputed shares of stock in his name for the benefit of
the other family members; and that it was only when Gilbert started to dispose of
the assets of the familys corporations without their knowledge that respondent
sisters caused the registration of the shares in their respective names.

Both Lincoln Continental and Gilbert timely appealed the RTC Decision to the
Court of Appeals, docketed therein as CA-G.R. CV No. 85937.

On September 15, 2005, 3-D Industries, Inc. filed a petition for certiorari,
prohibition, and mandamus with this Court assailing the Decision of the Court of
Appeals in CA-G.R. SP No. 87104 setting aside the writ of preliminary injunction
issued by the RTC, Branch 46. The petition was docketed as G.R. No. 169462 and
raffled off to the Third Division of this Court.

On October 3, 2005, the Third Division of this Court issued a


Resolution[4] dismissing the petition of 3-D Industries in G.R. No. 169462. 3-D
Industries timely filed its motion for reconsideration but this was denied by this
Court in its Resolution[5] dated December 14, 2005.

Meanwhile, on October 10, 2005, Gilbert, petitioner in G.R. No.


165849 for certiorari, filed with this Court a Supplemental Petition for Certiorari,
Prohibition, and Mandamus with Urgent Application for a Writ of Preliminary
Mandatory Injunction challenging the Decision of the Court of Appeals (Seventh
Division), dated August 19, 2005, in CA-G.R. SP No. 87104. This Decision set aside
the Order dated October 13, 2004 of the RTC, Branch 46 granting the writ of
preliminary injunction in favor of Lincoln Continental.

On November 8, 2005, Ignacio and Ignacio Law Offices and Smartnet filed
with this Court their petitions for certiorari, docketed as G.R. Nos. 170185 and
170186, respectively.

On February 27, 2006, Lincoln Continental filed with this Court a petition for
review on certiorari challenging the Decision of the Court of Appeals (Seventh
Division) in CA-G.R. CV No. 85937, docketed as G.R. No. 171066.

On March 20, 2006, we ordered the consolidation of G.R. No.


171066 with G.R. Nos. 165849, 170185, and 170186.

In the meantime, in a Decision dated November 27, 2006 in CA-G.R. CV No.


85937, the Court of Appeals (Special Second Division) affirmed the Decision in Civil
Case No. 04-109444 of the RTC (Branch 25) dismissing Lincoln Continentals
complaint and Gilberts complaint-in-intervention, thus:

WHEREFORE, the appeals are dismissed and the assailed decision


AFFIRMED with modifications that plaintiff and plaintiff-intervenor are
ordered to pay each of the defendants-appellees Simny Guy, Geraldine
Guy, Grace Guy-Cheu and Gladys Yao moral damages of P500,000.00,
exemplary damages of P100,000.00 and attorneys fees of P500,000.00.
SO ORDERED.

Lincoln Continental and Gilbert filed their respective motions for


reconsideration, but they were denied in a Resolution promulgated on February 12,
2007.
Lincoln Continental then filed with this Court a petition for review on certiorari
assailing the Decision of the Court of Appeals (Former Special Second Division) in
CA-G.R. CV No. 85937. This petition was docketed as G.R. No. 176650 and raffled
off to the Third Division of this Court.

In our Resolution dated June 6, 2007, we ordered G.R. No. 176650


consolidated with G.R. Nos. 165849, 170185, 170186, and 171066.

THE ISSUES

In G.R. Nos. 165849 and 171066, petitioners Gilbert and Lincoln


Continental raise the following issues: (1) whether respondents are guilty of forum
shopping; and (2) whether they are entitled to the injunctive relief granted in CA-
G.R. SP No. 87104.

In G.R. Nos. 170185 and 170186, the pivotal issue is whether the Court of
Appeals committed grave abuse of discretion amounting to lack or excess of
jurisdiction in ruling that petitioners Ignacio and Ignacio Law Offices and Smartnet
are also covered by its Resolution granting the writ of preliminary injunction in
favor of respondents.

In G.R. No. 176650, the core issue is whether the Court of Appeals (Special
Second Division) erred in affirming the Decision of the RTC, Branch
25, Manila dated September 19, 2005 dismissing the complaint of Lincoln
Continental and the complaint-in-intervention of Gilbert in Civil Case No. 04-
109444.

THE COURTS RULING

A. G.R. Nos. 165849 and 171066

On the question of forum shopping, petitioners Gilbert and Lincoln Continental


contend that the acts of respondents in filing a petition
for certiorari and mandamus in CA-G.R. SP No. 85069 and withdrawing the same
and their subsequent filing of a petition for certiorari in CA-G.R. SP No. 87104
constitute forum shopping; that respondents withdrew their petition in CA-G.R. SP
No. 85069 after the Tenth Division issued a Resolution dated October 20, 2004
denying their application for a writ of preliminary injunction; that they then filed an
identical petition in CA-G.R. SP No. 87104 seeking the same relief alleged in their
petition in CA-G.R. SP No. 85069; and that by taking cognizance of the petition in
CA-G.R. SP No. 87104, instead of dismissing it outright on the ground of forum
shopping, the Court of Appeals committed grave abuse of discretion tantamount to
lack or excess of jurisdiction.
A party is guilty of forum shopping when he repetitively avails of several judicial
remedies in different courts, simultaneously or successively, all substantially
founded on the same transactions and the same essential facts and circumstances,
and all raising substantially the same issues either pending in, or already resolved
adversely by some other court.[6] It is prohibited by Section 5, Rule 7 of the 1997
Rules of Civil Procedure, as amended, which provides:

SECTION 5. Certification against forum shopping. The plaintiff or


principal party shall certify under oath in the complaint or other
initiatory pleading asserting a claim for relief, or in a sworn certification
annexed thereto and simultaneously filed therewith: (a) that he has not
theretofore commenced any action or filed any other claim involving
the same issues in any court, tribunal, or quasi-judicial agency and, to
the best of his knowledge, no such other action or claim is pending
therein; (b) if there is such other pending action or claim, a complete
statement of the present status thereof; and (c) if he should thereafter
learn that the same or similar action has been filed or is pending, he
shall report that fact within five (5) days therefrom to the court wherein
his aforesaid complaint or initiatory pleading has been filed.

Failure to comply with the foregoing requirements shall not be curable


by mere amendment of the complaint or other initiatory pleading but
shall be cause for the dismissal of the case without prejudice, unless
otherwise provided, upon motion and hearing. The submission of a false
certification or non-compliance with any of the undertakings therein
shall constitute indirect contempt of court, without prejudice to the
corresponding administrative and criminal actions. If the acts of the
party or his counsel clearly constitute willful and deliberate forum
shopping, the same shall be ground for summary dismissal with
prejudice and shall constitute direct contempt, as well as a cause for
administrative sanctions.

Forum shopping is condemned because it unnecessarily burdens our courts with


heavy caseloads, unduly taxes the manpower and financial resources of the
judiciary and trifles with and mocks judicial processes, thereby affecting the
efficient administration of justice.[7] The primary evil sought to be proscribed by
the prohibition against forum shopping is, however, the possibility of conflicting
decisions being rendered by the different courts and/or administrative agencies
upon the same issues.[8]

Forum shopping may only exist where the elements of litis pendentia are present
or where a final judgment in one case will amount to res judicata in the
other.[9] Litis pendentia as a ground for dismissing a civil action is that situation
wherein another action is pending between the same parties for the same cause of
action, such that the second action is unnecessary and vexatious. The elements
of litis pendentia are as follows: (a) identity of parties, or at least such as
representing the same interest in both actions; (b) identity of rights asserted and
the relief prayed for, the relief being founded on the same facts; and (c) the identity
of the two cases such that judgment in one, regardless of which party is successful,
would amount to res judicata in the other.[10] From the foregoing, it is clear that
sans litis pendentia or res judicata, there can be no forum shopping.

While the first element of litis pendentia identity of parties is present in both CA-
G.R. SP No. 85069 and CA-G.R. SP No. 87104, however, the second element, does
not exist.The petitioners in CA-G.R. SP No. 85069 prayed that the following Orders
be set aside:

(1) the Order of inhibition dated June 22, 2004 issued by the
presiding judge of the RTC of Manila, Branch 24; and

(2) the Order dated July 12, 2004 issued by Branch 46 setting
Gilberts application for preliminary injunction for hearing.

In their petition in CA-G.R. SP No. 87104, respondents prayed for the


annulment of the writ of preliminary injunction issued by the RTC, Branch 46 after
the expiration of the TRO issued by the Tenth Division of the Court of
Appeals. Evidently, this relief is not identical with the relief sought by respondents
in CA-G.R. SP No. 85069. Clearly, the second element of litis pendentia the identity
of reliefs sought - is lacking in the two petitions filed by respondents with the
appellate court. Thus, we rule that no grave abuse of discretion amounting to lack
or excess of jurisdiction may be attributed to the Court of Appeals (Eighth Division)
for giving due course to respondents petition in CA-G.R. SP No. 87104.

On the second issue, Section 3, Rule 58 of the 1997 Rules of Civil Procedure, as
amended provides:

SECTION 3. Grounds for issuance of preliminary injunction. A


preliminary injunction may be granted when it is established:

(a) That the applicant is entitled to the relief demanded,


and the whole or part of such relief consists in restraining
the commission or continuance of the act or acts
complained of, or in requiring the performance of an act or
acts, either for a limited period or perpetually;

(b) That the commission, continuance, or non-


performance of the act or acts complained of during the
litigation would probably work injustice to the applicant; or

(c) That a party, court, agency, or a person is doing,


threatening, or is attempting to do, or is procuring or
suffering to be done, some act or acts probably in violation
of the rights of the applicant respecting the subject of the
action or proceeding, and tending to render the judgment
ineffectual.
For a party to be entitled to an injunctive writ, he must show that there exists
a right to be protected and that the acts against which the injunction is directed
are violative of this right.[11] In granting the respondents application for injunctive
relief and making the injunction permanent, the Court of Appeals (Seventh
Division) found that they have shown their clear and established right to the
disputed 20,160 shares of stock because: (1) they have physical possession of the
two stock certificates equivalent to the said number of shares; (2) Lincoln
Continental is a mere trustee of the Guy family; and (3) respondents constitute a
majority of the board of directors of Northern Islands, and accordingly have
management and control of the company at the inception of Civil Case No. 94-
109444. The appellate court then ruled that the trial court committed grave abuse
of discretion in issuing a writ of preliminary mandatory injunction in favor of
Guy. The writ actually reduced the membership of Northern Islands board to just
one member - Gilbert Guy. Moreover, he failed to establish by clear and convincing
evidence his ownership of the shares of stock in question. The Court of Appeals
then held there was an urgent necessity to issue an injunctive writ in order to
prevent serious damage to the rights of respondents and Northern Islands.

We thus find no reason to depart from the findings of the Court of


Appeals. Indeed, we cannot discern any taint of grave abuse of discretion on its
part in issuing the assailed writ of preliminary injunction and making the injunction
permanent.

B. G.R. Nos. 170185 & 170186

Ignacio and Ignacio Law Offices and Smartnet, petitioners, claim that the
Court of Appeals never acquired jurisdiction over their respective persons as they
were not served with summons, either by the MeTC or by the appellate court in
CA-G.R. SP No. 87104. Thus, they submit that the Court of Appeals committed
grave abuse of discretion amounting to lack or excess of jurisdiction when it
included them in the coverage of its injunctive writ.

Jurisdiction is the power or capacity given by the law to a court or tribunal to


entertain, hear, and determine certain controversies.[12] Jurisdiction over the
subject matter of a case is conferred by law.

Section 9 (1) of Batas Pambansa Blg. 129,[13] as amended, provides:

SEC. 9. Jurisdiction. The Court of Appeals shall exercise:

(1) Original jurisdiction to issue writs of mandamus,


prohibition, certiorari, habeas corpus, and quo warranto, and auxiliary
writs or processes, whether or not in aid of its appellate jurisdiction.
Rule 46 of the 1997 Rules of Civil Procedure, as amended, governs all
cases originally filed with the Court of Appeals. The following provisions of
the Rule state:

SEC. 2. To what actions applicable. This Rule shall apply to original


actions for certiorari, prohibition, mandamus and quo warranto.

Except as otherwise provided, the actions for annulment of


judgment shall be governed by Rule 47, for certiorari, prohibition,
and mandamus by Rule 65, and for quo warranto by Rule 66.

xxx

SEC. 4. Jurisdiction over person of respondent, how acquired. The


court shall acquire jurisdiction over the person of the respondent by the
service on him of its order or resolution indicating its initial action on
the petition or by his voluntary submission to such jurisdiction.

SEC. 5. Action by the court. The court may dismiss the petition
outright with specific reasons for such dismissal or require the
respondent to file a comment on the same within ten (10) days from
notice. Only pleadings required by the court shall be allowed. All other
pleadings and papers may be filed only with leave of court.

It is thus clear that in cases covered by Rule 46, the Court of Appeals acquires
jurisdiction over the persons of the respondents by the service upon them of its
order or resolution indicating its initial action on the petitions or by their voluntary
submission to such jurisdiction.[14] The reason for this is that, aside from the fact
that no summons or other coercive process is served on respondents, their
response to the petitions will depend on the initial action of the court
thereon. Under Section 5, the court may dismiss the petitions outright, hence, no
reaction is expected from respondents and under the policy adopted by Rule 46,
they are not deemed to have been brought within the courts jurisdiction until after
service on them of the dismissal order or resolution.[15]

Records show that on April 27, 2005, petitioners in these two forcible entry
cases, were served copies of the Resolution of the Court of Appeals (Seventh
Division) dated April 26, 2005 in CA-G.R. SP No. 87104.[16] The Resolution states:

Private respondents SMARTNET PHILIPPINES, INC., IGNACIO


& IGNACIO LAW OFFICE, SUNFIRE TRADING, INC., ZOLT
CORPORATION, CELLPRIME DISTRIBUTION CORPO., GOODGOLD
REALTY & DEVELOPMENT CORP., are hereby DIRECTED to file
CONSOLIDATED COMMENT on the original Petition for Certiorari, the
First Supplemental Petition for Certiorari, and the Second Supplemental
Petition for Certiorari (not a Motion to Dismiss) within ten (10) days
from receipt of a copy of the original, first and second Petitions for
Certiorari.[17]

Pursuant to Rule 46, the Court of Appeals validly acquired jurisdiction over
the persons of Ignacio and Ignacio Law Offices and Smartnet upon being served
with the above Resolution.

But neither of the parties bothered to file the required comment. Their
allegation that they have been deprived of due process is definitely without
merit. We have consistently held that when a party was afforded an opportunity to
participate in the proceedings but failed to do so, he cannot complain of deprivation
of due process for by such failure, he is deemed to have waived or forfeited his
right to be heard without violating the constitutional guarantee.[18]

On the question of whether the Court of Appeals could amend its Resolution
directing the issuance of a writ of preliminary injunction so as to include petitioners,
suffice to state that having acquired jurisdiction over their persons, the appellate
court could do so pursuant to Section 5 (g), Rule 135 of the Revised Rules of Court,
thus:

SEC. 5. Inherent powers of courts. Every court shall have power:

xxx

(g) To amend and control its process and orders so as to


make them conformable to law and justice.

In Villanueva v. CFI of Oriental Mindoro[19] and Eternal Gardens Memorial


Parks Corp. v. Intermediate Appellate Court,[20] we held that under this Rule, a
court has inherent power to amend its judgment so as to make it conformable to
the law applicable, provided that said judgment has not yet acquired finality, as in
these cases.

C. G.R. No. 176650

The fundamental issue is who owns the disputed shares of stock in Northern
Islands.

We remind petitioner Lincoln Continental that what it filed with this Court is a
petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure,
as amended. It is a rule in this jurisdiction that in petitions for review under Rule
45, only questions or errors of law may be raised.[21] There is a question of law
when the doubt or controversy concerns the correct application of law or
jurisprudence to a certain set of facts, or when the issue does not call for an
examination of the probative value of the evidence presented. There is a question
of fact when the doubt arises as to the truth or falsehood of facts or when there is
a need to calibrate the whole evidence considering mainly the credibility of the
witnesses, the existence and relevancy of specific surrounding circumstances, as
well as their relation to each other and to the whole, and the probability of the
situation.[22] Obviously, the issue raised by the instant petition for review
on certiorari, involves a factual matter, hence, is outside the domain of this
Court. However, in the interest of justice and in order to settle this controversy
once and for all, a ruling from this Court is imperative.

One thing is clear. It was established before the trial court, affirmed by
the Court of Appeals, that Lincoln Continental held the disputed shares of
stock of Northern Islands merely in trust for the Guy sisters. In fact, the
evidence proffered by Lincoln Continental itself supports this conclusion. It bears
emphasis that this factual finding by the trial court was affirmed by the Court of
Appeals, being supported by evidence, and is, therefore, final and conclusive upon
this Court.

Article 1440 of the Civil Code provides that:

ART. 1440. A person who establishes a trust is called the trustor;


one in whom confidence is reposed as regards property for the benefit
of another person is known as the trustee; and the person for whose
benefit the trust has been created is referred to as the beneficiary.

In the early case of Gayondato v. Treasurer of the Philippine Islands,[23] this


Court defines trust, in its technical sense, as a right of property, real or personal,
held by one party for the benefit of another. Differently stated, a trust is a fiduciary
relationship with respect to property, subjecting the person holding the same to
the obligation of dealing with the property for the benefit of another person. [24]

Both Lincoln Continental and Gilbert claim that the latter holds legal title to
the shares in question. But record shows that there is no evidence to support
their claim.Rather, the evidence on record clearly indicates that the stock
certificates representing the contested shares are in respondents
possession. Significantly, there is no proof to support his allegation that the
transfer of the shares of stock to respondent sisters is fraudulent. As aptly held by
the Court of Appeals, fraud is never presumed but must be established by clear
and convincing evidence.[25] Gilbert failed to discharge this burden. We, agree with
the Court of Appeals that respondent sisters own the shares of stocks, Gilbert being
their mere trustee. Verily, we find no reversible error in the challenged Decision of
the Court of Appeals (Special Second Division) in CA-G.R. CV No. 85937.

WHEREFORE, we DISMISS the petitions in G.R. Nos. 165849, 170185, 170186


and 176650; and DENY the petitions in G.R. Nos. 171066 and 176650. The
Resolutions of the Court of Appeals (Eighth Division), dated October 28,
2004 and November 4, 2004, as well as the Decision dated October 10, 2005 of
the Court of Appeals (Seventh Division) in CA-G.R. SP No. 87104
are AFFIRMED. We likewise AFFIRM IN TOTO the Decision of the Court of
Appeals (Special Second Division), dated November 27, 2006 in CA-G.R. CV No.
85937. Costs against petitioners. SO ORDERED.
ROMMEL JACINTO DANTES G.R. No. 174689
SILVERIO,
Petitioner,

-versus-

REPUBLIC OF THE
PHILIPPINES,
Respondent. Promulgated:
October 22, 2007

x--------------------------------------------------
-x

DECISION
CORONA, J.:

When God created man, He made him in the likeness of God; He created them
male and female. (Genesis 5:1-2) Amihan gazed upon the bamboo reed planted by
Bathala and she heard voices coming from inside the bamboo. Oh North Wind!
North Wind! Please let us out!, the voices said. She pecked the reed once, then
twice. All of a sudden, the bamboo cracked and slit open. Out came two human
beings; one was a male and the other was a female. Amihan named the man
Malakas (Strong) and the woman Maganda (Beautiful). (The Legend of Malakas and
Maganda)

When is a man a man and when is a woman a woman? In particular, does the law
recognize the changes made by a physician using scalpel, drugs and counseling
with regard to a persons sex? May a person successfully petition for a change of
name and sex appearing in the birth certificate to reflect the result of a sex
reassignment surgery?

On November 26, 2002, petitioner Rommel Jacinto Dantes Silverio filed a petition
for the change of his first name and sex in his birth certificate in the Regional Trial
Court of Manila, Branch 8. The petition, docketed as SP Case No. 02-105207,
impleaded the civil registrar of Manila as respondent.

Petitioner alleged in his petition that he was born in the City of Manila to the spouses
Melecio Petines Silverio and Anita Aquino Dantes on April 4, 1962. His name was
registered as Rommel Jacinto Dantes Silverio in his certificate of live birth (birth
certificate). His sex was registered as male.

He further alleged that he is a male transsexual, that is, anatomically male but
feels, thinks and acts as a female and that he had always identified himself with
girls since childhood.[1] Feeling trapped in a mans body, he consulted several
doctors in the United States. He underwent psychological examination, hormone
treatment and breast augmentation. His attempts to transform himself to a woman
culminated on January 27, 2001 when he underwent sex reassignment surgery[2] in
Bangkok, Thailand. He was thereafter examined by Dr. Marcelino Reysio-Cruz, Jr.,
a plastic and reconstruction surgeon in the Philippines, who issued a medical
certificate attesting that he (petitioner) had in fact undergone the procedure.

From then on, petitioner lived as a female and was in fact engaged to be married.
He then sought to have his name in his birth certificate changed from Rommel
Jacinto to Mely, and his sex from male to female.

An order setting the case for initial hearing was published in the Peoples Journal
Tonight, a newspaper of general circulation in Metro Manila, for three consecutive
weeks.[3]Copies of the order were sent to the Office of the Solicitor General (OSG)
and the civil registrar of Manila.

On the scheduled initial hearing, jurisdictional requirements were established. No


opposition to the petition was made.

During trial, petitioner testified for himself. He also presented Dr. Reysio-Cruz, Jr.
and his American fianc, Richard P. Edel, as witnesses.

On June 4, 2003, the trial court rendered a decision[4] in favor of petitioner. Its
relevant portions read:

Petitioner filed the present petition not to evade any law or


judgment or any infraction thereof or for any unlawful motive but solely
for the purpose of making his birth records compatible with his present
sex.

The sole issue here is whether or not petitioner is entitled to the


relief asked for.

The [c]ourt rules in the affirmative.

Firstly, the [c]ourt is of the opinion that granting the petition would
be more in consonance with the principles of justice and equity. With his
sexual [re-assignment], petitioner, who has always felt, thought and
acted like a woman, now possesses the physique of a female. Petitioners
misfortune to be trapped in a mans body is not his own doing and should
not be in any way taken against him.

Likewise, the [c]ourt believes that no harm, injury [or] prejudice


will be caused to anybody or the community in granting the petition. On
the contrary, granting the petition would bring the much-awaited
happiness on the part of the petitioner and her [fianc] and the realization
of their dreams.
Finally, no evidence was presented to show any cause or ground
to deny the present petition despite due notice and publication thereof.
Even the State, through the [OSG] has not seen fit to interpose any
[o]pposition.

WHEREFORE, judgment is hereby rendered GRANTING the petition


and ordering the Civil Registrar of Manila to change the entries
appearing in the Certificate of Birth of [p]etitioner, specifically for
petitioners first name from Rommel Jacinto to MELY and petitioners
gender from Male to FEMALE. [5]

On August 18, 2003, the Republic of the Philippines (Republic), thru the OSG,
filed a petition for certiorari in the Court of Appeals.[6] It alleged that there is no
law allowing the change of entries in the birth certificate by reason of sex alteration.

On February 23, 2006, the Court of Appeals[7] rendered a decision[8] in favor


of the Republic. It ruled that the trial courts decision lacked legal basis. There is no
law allowing the change of either name or sex in the certificate of birth on the
ground of sex reassignment through surgery. Thus, the Court of Appeals granted
the Republics petition, set aside the decision of the trial court and ordered the
dismissal of SP Case No. 02-105207. Petitioner moved for reconsideration but it
was denied.[9] Hence, this petition.

Petitioner essentially claims that the change of his name and sex in his birth
certificate is allowed under Articles 407 to 413 of the Civil Code, Rules 103 and 108
of the Rules of Court and RA 9048.[10]

The petition lacks merit.

A PERSONS FIRST NAME CANNOT BE CHANGED ON THE GROUND OF SEX


REASSIGNMENT

Petitioner invoked his sex reassignment as the ground for his petition for change
of name and sex. As found by the trial court:
Petitioner filed the present petition not to evade any law or
judgment or any infraction thereof or for any unlawful motive but solely
for the purpose of making his birth records compatible with his
present sex. (emphasis supplied)

Petitioner believes that after having acquired the physical features of a


female, he became entitled to the civil registry changes sought. We disagree.
The State has an interest in the names borne by individuals and entities for
purposes of identification.[11] A change of name is a privilege, not a
right.[12] Petitions for change of name are controlled by statutes. [13] In this
connection, Article 376 of the Civil Code provides:

ART. 376. No person can change his name or surname without judicial
authority.

This Civil Code provision was amended by RA 9048 (Clerical Error Law). In
particular, Section 1 of RA 9048 provides:

SECTION 1. Authority to Correct Clerical or Typographical Error and


Change of First Name or Nickname. No entry in a civil register shall be
changed or corrected without a judicial order, except for clerical or
typographical errors and change of first name or nickname which can
be corrected or changed by the concerned city or municipal civil
registrar or consul general in accordance with the provisions of this Act
and its implementing rules and regulations.

RA 9048 now governs the change of first name.[14] It vests the power and
authority to entertain petitions for change of first name to the city or municipal civil
registrar or consul general concerned. Under the law, therefore, jurisdiction over
applications for change of first name is now primarily lodged with the
aforementioned administrative officers. The intent and effect of the law is to
exclude the change of first name from the coverage of Rules 103 (Change of Name)
and 108 (Cancellation or Correction of Entries in the Civil Registry) of the Rules of
Court, until and unless an administrative petition for change of name is first filed
and subsequently denied.[15] It likewise lays down the corresponding
venue,[16] form[17] and procedure. In sum, the remedy and the proceedings
regulating change of first name are primarily administrative in nature, not judicial.
RA 9048 likewise provides the grounds for which change of first name may
be allowed:

SECTION 4. Grounds for Change of First Name or Nickname. The


petition for change of first name or nickname may be allowed in any of
the following cases:

(1) The petitioner finds the first name or nickname to be


ridiculous, tainted with dishonor or extremely difficult to write
or pronounce;

(2) The new first name or nickname has been habitually and
continuously used by the petitioner and he has been publicly
known by that first name or nickname in the community; or
(3) The change will avoid confusion.

Petitioners basis in praying for the change of his first name was his sex
reassignment. He intended to make his first name compatible with the sex he
thought he transformed himself into through surgery. However, a change of name
does not alter ones legal capacity or civil status.[18] RA 9048 does not sanction a
change of first name on the ground of sex reassignment. Rather than avoiding
confusion, changing petitioners first name for his declared purpose may only create
grave complications in the civil registry and the public interest.

Before a person can legally change his given name, he must present proper
or reasonable cause or any compelling reason justifying such change. [19] In
addition, he must show that he will be prejudiced by the use of his true and official
name.[20] In this case, he failed to show, or even allege, any prejudice that he might
suffer as a result of using his true and official name.

In sum, the petition in the trial court in so far as it prayed for the change of
petitioners first name was not within that courts primary jurisdiction as the petition
should have been filed with the local civil registrar concerned, assuming it could be
legally done. It was an improper remedy because the proper remedy was
administrative, that is, that provided under RA 9048. It was also filed in the wrong
venue as the proper venue was in the Office of the Civil Registrar of Manila where
his birth certificate is kept. More importantly, it had no merit since the use of his
true and official name does not prejudice him at all. For all these reasons, the Court
of Appeals correctly dismissed petitioners petition in so far as the change of his first
name was concerned.

NO LAW ALLOWS THE CHANGE OF


ENTRY IN THE BIRTH CERTIFICATE
AS TO SEX ON THE GROUND OF SEX
REASSIGNMENT

The determination of a persons sex appearing in his birth certificate is a legal


issue and the court must look to the statutes.[21] In this connection, Article 412 of
the Civil Code provides:

ART. 412. No entry in the civil register shall be changed or corrected


without a judicial order.
Together with Article 376 of the Civil Code, this provision was amended by
RA 9048 in so far as clerical or typographical errors are involved. The correction or
change of such matters can now be made through administrative proceedings and
without the need for a judicial order. In effect, RA 9048 removed from the ambit
of Rule 108 of the Rules of Court the correction of such errors. [22] Rule 108 now
applies only to substantial changes and corrections in entries in the civil register. [23]

Section 2(c) of RA 9048 defines what a clerical or typographical error is:

SECTION 2. Definition of Terms. As used in this Act, the following terms


shall mean:

xxx xxx xxx


(3) Clerical or typographical error refers to a mistake committed
in the performance of clerical work in writing, copying,
transcribing or typing an entry in the civil register that is
harmless and innocuous, such as misspelled name or
misspelled place of birth or the like, which is visible to the
eyes or obvious to the understanding, and can be corrected
or changed only by reference to other existing record or
records: Provided, however, That no correction must
involve the change of nationality, age, status or sex of the
petitioner. (emphasis supplied)

Under RA 9048, a correction in the civil registry involving the change of sex
is not a mere clerical or typographical error. It is a substantial change for which
the applicable procedure is Rule 108 of the Rules of Court.

The entries envisaged in Article 412 of the Civil Code and correctable under
Rule 108 of the Rules of Court are those provided in Articles 407 and 408 of the
Civil Code:[24]

ART. 407. Acts, events and judicial decrees concerning the civil status
of persons shall be recorded in the civil register.

ART. 408. The following shall be entered in the civil register:

(1) Births; (2) marriages; (3) deaths; (4) legal separations; (5)
annulments of marriage; (6) judgments declaring marriages void from
the beginning; (7) legitimations; (8) adoptions; (9) acknowledgments
of natural children; (10) naturalization; (11) loss, or (12) recovery of
citizenship; (13) civil interdiction; (14) judicial determination of filiation;
(15) voluntary emancipation of a minor; and (16) changes of name.

The acts, events or factual errors contemplated under Article 407 of the Civil
Code include even those that occur after birth.[25] However, no reasonable
interpretation of the provision can justify the conclusion that it covers the correction
on the ground of sex reassignment.
To correct simply means to make or set aright; to remove the faults or error
from while to change means to replace something with something else of the same
kind or with something that serves as a substitute. [26] The birth certificate of
petitioner contained no error. All entries therein, including those corresponding to
his first name and sex, were all correct. No correction is necessary.

Article 407 of the Civil Code authorizes the entry in the civil registry of
certain acts (such as legitimations, acknowledgments of illegitimate children and
naturalization), events (such as births, marriages, naturalization and deaths)
and judicial decrees (such as legal separations, annulments of marriage,
declarations of nullity of marriages, adoptions, naturalization, loss or recovery of
citizenship, civil interdiction, judicial determination of filiation and changes of
name). These acts, events and judicial decrees produce legal consequences that
touch upon the legal capacity, status and nationality of a person. Their effects are
expressly sanctioned by the laws. In contrast, sex reassignment is not among those
acts or events mentioned in Article 407. Neither is it recognized nor even mentioned
by any law, expressly or impliedly.

Status refers to the circumstances affecting the legal situation (that is, the
sum total of capacities and incapacities) of a person in view of his age, nationality
and his family membership.[27]

The status of a person in law includes all his personal qualities and
relations, more or less permanent in nature, not ordinarily
terminable at his own will, such as his being legitimate or
illegitimate, or his being married or not. The comprehensive
term status include such matters as the beginning and end of legal
personality, capacity to have rights in general, family relations, and its
various aspects, such as birth, legitimation, adoption, emancipation,
marriage, divorce, and sometimes even succession.[28] (emphasis
supplied)

A persons sex is an essential factor in marriage and family relations. It is a


part of a persons legal capacity and civil status. In this connection, Article 413 of
the Civil Code provides:

ART. 413. All other matters pertaining to the registration of civil status
shall be governed by special laws.
But there is no such special law in the Philippines governing sex reassignment
and its effects. This is fatal to petitioners cause.

Moreover, Section 5 of Act 3753 (the Civil Register Law) provides:

SEC. 5. Registration and certification of births. The declaration of the


physician or midwife in attendance at the birth or, in default thereof, the
declaration of either parent of the newborn child, shall be sufficient for
the registration of a birth in the civil register. Such declaration shall be
exempt from documentary stamp tax and shall be sent to the local civil
registrar not later than thirty days after the birth, by the physician or
midwife in attendance at the birth or by either parent of the newborn
child.

In such declaration, the person above mentioned shall certify to the


following facts: (a) date and hour of birth; (b) sex and nationality of
infant; (c) names, citizenship and religion of parents or, in case the
father is not known, of the mother alone; (d) civil status of parents; (e)
place where the infant was born; and (f) such other data as may be
required in the regulations to be issued.

xxx xxx xxx (emphasis supplied)

Under the Civil Register Law, a birth certificate is a historical record of the
facts as they existed at the time of birth.[29] Thus, the sex of a person is determined
at birth,visually done by the birth attendant (the physician or midwife) by
examining the genitals of the infant. Considering that there is no law legally
recognizing sex reassignment, the determination of a persons sex made at the time
of his or her birth, if not attended by error,[30] is immutable.[31]

When words are not defined in a statute they are to be given their common
and ordinary meaning in the absence of a contrary legislative intent. The words
sex, male and female as used in the Civil Register Law and laws concerning the
civil registry (and even all other laws) should therefore be understood in their
common and ordinary usage, there being no legislative intent to the contrary. In
this connection, sex is defined as the sum of peculiarities of structure and function
that distinguish a male from a female[32]or the distinction between male and
female.[33] Female is the sex that produces ova or bears young[34] and male is the
sex that has organs to produce spermatozoa for fertilizing ova.[35] Thus, the words
male and female in everyday understanding do not include persons who have
undergone sex reassignment. Furthermore, words that are employed in a statute
which had at the time a well-known meaning are presumed to have been used in
that sense unless the context compels to the contrary.[36] Since the statutory
language of the Civil Register Law was enacted in the early 1900s and remains
unchanged, it cannot be argued that the term sex as used then is something
alterable through surgery or something that allows a post-operative male-to-
female transsexual to be included in the category female.

For these reasons, while petitioner may have succeeded in altering his body
and appearance through the intervention of modern surgery, no law authorizes the
change of entry as to sex in the civil registry for that reason. Thus, there is no legal
basis for his petition for the correction or change of the entries in his birth
certificate.

NEITHER MAY ENTRIES IN THE BIRTH CERTIFICATE AS TO FIRST NAME


OR SEX BE CHANGED ON THE GROUND OF EQUITY

The trial court opined that its grant of the petition was in consonance with the
principles of justice and equity. It believed that allowing the petition would cause
no harm, injury or prejudice to anyone. This is wrong.

The changes sought by petitioner will have serious and wide-ranging legal and
public policy consequences. First, even the trial court itself found that the petition
was but petitioners first step towards his eventual marriage to his male fianc.
However, marriage, one of the most sacred social institutions, is a special contract
of permanent union between a man and a woman.[37] One of its essential requisites
is the legal capacity of the contracting parties who must be a male and a
female.[38] To grant the changes sought by petitioner will substantially reconfigure
and greatly alter the laws on marriage and family relations. It will allow the union
of a man with another man who has undergone sex reassignment (a male-to-
female post-operative transsexual). Second, there are various laws which apply
particularly to women such as the provisions of the Labor Code on employment of
women,[39] certain felonies under the Revised Penal Code[40] and the presumption
of survivorship in case of calamities under Rule 131 of the Rules of Court,[41] among
others. These laws underscore the public policy in relation to women which could
be substantially affected if petitioners petition were to be granted.
It is true that Article 9 of the Civil Code mandates that [n]o judge or court
shall decline to render judgment by reason of the silence, obscurity or insufficiency
of the law. However, it is not a license for courts to engage in judicial legislation.
The duty of the courts is to apply or interpret the law, not to make or amend it.
In our system of government, it is for the legislature, should it choose to do
so, to determine what guidelines should govern the recognition of the effects of sex
reassignment. The need for legislative guidelines becomes particularly important in
this case where the claims asserted are statute-based.

To reiterate, the statutes define who may file petitions for change of first
name and for correction or change of entries in the civil registry, where they may
be filed, what grounds may be invoked, what proof must be presented and what
procedures shall be observed. If the legislature intends to confer on a person who
has undergone sex reassignment the privilege to change his name and sex to
conform with his reassigned sex, it has to enact legislation laying down the
guidelines in turn governing the conferment of that privilege.

It might be theoretically possible for this Court to write a protocol on when a


person may be recognized as having successfully changed his sex. However, this
Court has no authority to fashion a law on that matter, or on anything else. The
Court cannot enact a law where no law exists. It can only apply or interpret the
written word of its co-equal branch of government, Congress.

Petitioner pleads that [t]he unfortunates are also entitled to a life of


happiness, contentment and [the] realization of their dreams. No argument about
that. The Court recognizes that there are people whose preferences and orientation
do not fit neatly into the commonly recognized parameters of social convention and
that, at least for them, life is indeed an ordeal. However, the remedies petitioner
seeks involve questions of public policy to be addressed solely by the legislature,
not by the courts. WHEREFORE, the petition is hereby DENIED. Costs against
petitioner. SO ORDERED.
G.R. No. L-68470 October 8, 1985

ALICE REYES VAN DORN, petitioner,


vs.
HON. MANUEL V. ROMILLO, JR., as Presiding Judge of Branch CX,
Regional Trial Court of the National Capital Region Pasay City and
RICHARD UPTON respondents.

MELENCIO-HERRERA, J.:

In this Petition for certiorari and Prohibition, petitioner Alice Reyes Van Dorn seeks
to set aside the Orders, dated September 15, 1983 and August 3, 1984, in Civil
Case No. 1075-P, issued by respondent Judge, which denied her Motion to Dismiss
said case, and her Motion for Reconsideration of the Dismissal Order, respectively.

The basic background facts are that petitioner is a citizen of the Philippines while
private respondent is a citizen of the United States; that they were married in
Hongkong in 1972; that, after the marriage, they established their residence in the
Philippines; that they begot two children born on April 4, 1973 and December 18,
1975, respectively; that the parties were divorced in Nevada, United States, in
1982; and that petitioner has re-married also in Nevada, this time to Theodore Van
Dorn.

Dated June 8, 1983, private respondent filed suit against petitioner in Civil Case
No. 1075-P of the Regional Trial Court, Branch CXV, in Pasay City, stating that
petitioner's business in Ermita, Manila, (the Galleon Shop, for short), is conjugal
property of the parties, and asking that petitioner be ordered to render an
accounting of that business, and that private respondent be declared with right to
manage the conjugal property. Petitioner moved to dismiss the case on the ground
that the cause of action is barred by previous judgment in the divorce proceedings
before the Nevada Court wherein respondent had acknowledged that he and
petitioner had "no community property" as of June 11, 1982. The Court below
denied the Motion to Dismiss in the mentioned case on the ground that the property
involved is located in the Philippines so that the Divorce Decree has no bearing in
the case. The denial is now the subject of this certiorari proceeding.

Generally, the denial of a Motion to Dismiss in a civil case is interlocutory and is


not subject to appeal. certiorari and Prohibition are neither the remedies to
question the propriety of an interlocutory order of the trial Court. However, when
a grave abuse of discretion was patently committed, or the lower Court acted
capriciously and whimsically, then it devolves upon this Court in a certiorari
proceeding to exercise its supervisory authority and to correct the error committed
which, in such a case, is equivalent to lack of jurisdiction. 1 Prohibition would then
lie since it would be useless and a waste of time to go ahead with the
proceedings. 2 Weconsider the petition filed in this case within the exception, and
we have given it due course.

For resolution is the effect of the foreign divorce on the parties and their alleged
conjugal property in the Philippines.

Petitioner contends that respondent is estopped from laying claim on the alleged
conjugal property because of the representation he made in the divorce
proceedings before the American Court that they had no community of property;
that the Galleon Shop was not established through conjugal funds, and that
respondent's claim is barred by prior judgment.
For his part, respondent avers that the Divorce Decree issued by the Nevada Court
cannot prevail over the prohibitive laws of the Philippines and its declared national
policy; that the acts and declaration of a foreign Court cannot, especially if the
same is contrary to public policy, divest Philippine Courts of jurisdiction to entertain
matters within its jurisdiction.

For the resolution of this case, it is not necessary to determine whether the property
relations between petitioner and private respondent, after their marriage, were
upon absolute or relative community property, upon complete separation of
property, or upon any other regime. The pivotal fact in this case is the
Nevada divorce of the parties.

The Nevada District Court, which decreed the divorce, had obtained jurisdiction
over petitioner who appeared in person before the Court during the trial of the
case. It also obtained jurisdiction over private respondent who, giving his address
as No. 381 Bush Street, San Francisco, California, authorized his attorneys in the
divorce case, Karp & Gradt Ltd., to agree to the divorce on the ground of
incompatibility in the understanding that there were neither community property
nor community obligations. 3 As explicitly stated in the Power of Attorney he
executed in favor of the law firm of KARP & GRAD LTD., 336 W. Liberty, Reno,
Nevada, to represent him in the divorce proceedings:

xxx xxx xxx

You are hereby authorized to accept service of Summons, to file an


Answer, appear on my behalf and do an things necessary and proper to
represent me, without further contesting, subject to the following:

1. That my spouse seeks a divorce on the ground of incompatibility.

2. That there is no community of property to be adjudicated by the


Court.

3. 'I'hat there are no community obligations to be adjudicated by the


court.
4
xxx xxx xxx

There can be no question as to the validity of that Nevada divorce in any of the
States of the United States. The decree is binding on private respondent as an
American citizen. For instance, private respondent cannot sue petitioner, as her
husband, in any State of the Union. What he is contending in this case is that the
divorce is not valid and binding in this jurisdiction, the same being contrary to local
law and public policy.

It is true that owing to the nationality principle embodied in Article 15 of the Civil
Code, 5 only Philippine nationals are covered by the policy against absolute divorces
the same being considered contrary to our concept of public police and morality.
However, aliens may obtain divorces abroad, which may be recognized in the
Philippines, provided they are valid according to their national law. 6 In this case,
the divorce in Nevada released private respondent from the marriage from the
standards of American law, under which divorce dissolves the marriage. As stated
by the Federal Supreme Court of the United States in Atherton vs. Atherton, 45 L.
Ed. 794, 799:

The purpose and effect of a decree of divorce from the bond of


matrimony by a court of competent jurisdiction are to change the
existing status or domestic relation of husband and wife, and to free
them both from the bond. The marriage tie when thus severed as to one
party, ceases to bind either. A husband without a wife, or a wife without
a husband, is unknown to the law. When the law provides, in the nature
of a penalty. that the guilty party shall not marry again, that party, as
well as the other, is still absolutely freed from the bond of the former
marriage.

Thus, pursuant to his national law, private respondent is no longer the husband of
petitioner. He would have no standing to sue in the case below as petitioner's
husband entitled to exercise control over conjugal assets. As he is bound by the
Decision of his own country's Court, which validly exercised jurisdiction over him,
and whose decision he does not repudiate, he is estopped by his own representation
before said Court from asserting his right over the alleged conjugal property.

To maintain, as private respondent does, that, under our laws, petitioner has to be
considered still married to private respondent and still subject to a wife's obligations
under Article 109, et. seq. of the Civil Code cannot be just. Petitioner should not
be obliged to live together with, observe respect and fidelity, and render support
to private respondent. The latter should not continue to be one of her heirs with
possible rights to conjugal property. She should not be discriminated against in her
own country if the ends of justice are to be served.

WHEREFORE, the Petition is granted, and respondent Judge is hereby ordered to


dismiss the Complaint filed in Civil Case No. 1075-P of his Court. Without costs. SO
ORDERED.
G.R. No. 80116 June 30, 1989

IMELDA MANALAYSAY PILAPIL, petitioner,


vs.
HON. CORONA IBAY-SOMERA, in her capacity as Presiding Judge of the
Regional Trial Court of Manila, Branch XXVI; HON. LUIS C. VICTOR, in his
capacity as the City Fiscal of Manila; and ERICH EKKEHARD
GEILING, respondents.

REGALADO, J.:

An ill-starred marriage of a Filipina and a foreigner which ended in a foreign


absolute divorce, only to be followed by a criminal infidelity suit of the latter against
the former, provides Us the opportunity to lay down a decisional rule on what
hitherto appears to be an unresolved jurisdictional question.

On September 7, 1979, petitioner Imelda Manalaysay Pilapil, a Filipino citizen, and


private respondent Erich Ekkehard Geiling, a German national, were married before
the Registrar of Births, Marriages and Deaths at Friedensweiler in the Federal
Republic of Germany. The marriage started auspiciously enough, and the couple
lived together for some time in Malate, Manila where their only child, Isabella Pilapil
Geiling, was born on April 20, 1980. 1

Thereafter, marital discord set in, with mutual recriminations between the spouses,
followed by a separation de facto between them.

After about three and a half years of marriage, such connubial disharmony
eventuated in private respondent initiating a divorce proceeding against petitioner
in Germany before the Schoneberg Local Court in January, 1983. He claimed that
there was failure of their marriage and that they had been living apart since April,
1982. 2

Petitioner, on the other hand, filed an action for legal separation, support and
separation of property before the Regional Trial Court of Manila, Branch XXXII, on
January 23, 1983 where the same is still pending as Civil Case No. 83-15866. 3

On January 15, 1986, Division 20 of the Schoneberg Local Court, Federal Republic
of Germany, promulgated a decree of divorce on the ground of failure of marriage
of the spouses. The custody of the child was granted to petitioner. The records
show that under German law said court was locally and internationally competent
for the divorce proceeding and that the dissolution of said marriage was legally
founded on and authorized by the applicable law of that foreign jurisdiction. 4

On June 27, 1986, or more than five months after the issuance of the divorce
decree, private respondent filed two complaints for adultery before the City Fiscal
of Manila alleging that, while still married to said respondent, petitioner "had an
affair with a certain William Chia as early as 1982 and with yet another man named
Jesus Chua sometime in 1983". Assistant Fiscal Jacinto A. de los Reyes, Jr., after
the corresponding investigation, recommended the dismissal of the cases on the
ground of insufficiency of evidence. 5 However, upon review, the respondent city
fiscal approved a resolution, dated January 8, 1986, directing the filing of two
complaints for adultery against the petitioner. 6 The complaints were accordingly
filed and were eventually raffled to two branches of the Regional Trial Court of
Manila. The case entitled "People of the Philippines vs. Imelda Pilapil and William
Chia", docketed as Criminal Case No. 87-52435, was assigned to Branch XXVI
presided by the respondent judge; while the other case, "People of the Philippines
vs. Imelda Pilapil and James Chua", docketed as Criminal Case No. 87-52434 went
to the sala of Judge Leonardo Cruz, Branch XXV, of the same court. 7

On March 14, 1987, petitioner filed a petition with the Secretary of Justice asking
that the aforesaid resolution of respondent fiscal be set aside and the cases against
her be dismissed. 8 A similar petition was filed by James Chua, her co-accused in
Criminal Case No. 87-52434. The Secretary of Justice, through the Chief State
Prosecutor, gave due course to both petitions and directed the respondent city
fiscal to inform the Department of Justice "if the accused have already been
arraigned and if not yet arraigned, to move to defer further proceedings" and to
elevate the entire records of both cases to his office for review. 9

Petitioner thereafter filed a motion in both criminal cases to defer her arraignment
and to suspend further proceedings thereon. 10 As a consequence, Judge Leonardo
Cruz suspended proceedings in Criminal Case No. 87-52434. On the other hand,
respondent judge merely reset the date of the arraignment in Criminal Case No.
87-52435 to April 6, 1987. Before such scheduled date, petitioner moved for the
cancellation of the arraignment and for the suspension of proceedings in said
Criminal Case No. 87-52435 until after the resolution of the petition for review then
pending before the Secretary of Justice. 11 A motion to quash was also filed in the
same case on the ground of lack of jurisdiction, 12 which motion was denied by the
respondent judge in an order dated September 8, 1987. The same order also
directed the arraignment of both accused therein, that is, petitioner and William
Chia. The latter entered a plea of not guilty while the petitioner refused to be
arraigned. Such refusal of the petitioner being considered by respondent judge as
direct contempt, she and her counsel were fined and the former was ordered
detained until she submitted herself for arraignment. 13 Later, private respondent
entered a plea of not guilty. 14

On October 27, 1987, petitioner filed this special civil action for certiorari and
prohibition, with a prayer for a temporary restraining order, seeking the annulment
of the order of the lower court denying her motion to quash. The petition is
anchored on the main ground that the court is without jurisdiction "to try and decide
the charge of adultery, which is a private offense that cannot be prosecuted de
officio (sic), since the purported complainant, a foreigner, does not qualify as an
offended spouse having obtained a final divorce decree under his national law prior
to his filing the criminal complaint." 15

On October 21, 1987, this Court issued a temporary restraining order enjoining the
respondents from implementing the aforesaid order of September 8, 1987 and from
further proceeding with Criminal Case No. 87-52435. Subsequently, on March 23,
1988 Secretary of Justice Sedfrey A. Ordoñez acted on the aforesaid petitions for
review and, upholding petitioner's ratiocinations, issued a resolution directing the
respondent city fiscal to move for the dismissal of the complaints against the
petitioner. 16

We find this petition meritorious. The writs prayed for shall accordingly issue.

Under Article 344 of the Revised Penal Code, 17 the crime of adultery, as well as
four other crimes against chastity, cannot be prosecuted except upon a sworn
written complaint filed by the offended spouse. It has long since been established,
with unwavering consistency, that compliance with this rule is a jurisdictional, and
not merely a formal, requirement. 18 While in point of strict law the jurisdiction of
the court over the offense is vested in it by the Judiciary Law, the requirement for
a sworn written complaint is just as jurisdictional a mandate since it is that
19
complaint which starts the prosecutory proceeding and without which the court
cannot exercise its jurisdiction to try the case.

Now, the law specifically provides that in prosecutions for adultery and concubinage
the person who can legally file the complaint should be the offended spouse, and
nobody else. Unlike the offenses of seduction, abduction, rape and acts of
lasciviousness, no provision is made for the prosecution of the crimes of adultery
and concubinage by the parents, grandparents or guardian of the offended party.
The so-called exclusive and successive rule in the prosecution of the first four
offenses above mentioned do not apply to adultery and concubinage. It is
significant that while the State, as parens patriae, was added and vested by the
1985 Rules of Criminal Procedure with the power to initiate the criminal action for
a deceased or incapacitated victim in the aforesaid offenses of seduction,
abduction, rape and acts of lasciviousness, in default of her parents, grandparents
or guardian, such amendment did not include the crimes of adultery and
concubinage. In other words, only the offended spouse, and no other, is authorized
by law to initiate the action therefor.

Corollary to such exclusive grant of power to the offended spouse to institute the
action, it necessarily follows that such initiator must have the status, capacity or
legal representation to do so at the time of the filing of the criminal action. This is
a familiar and express rule in civil actions; in fact, lack of legal capacity to sue, as
a ground for a motion to dismiss in civil cases, is determined as of the filing of the
complaint or petition.

The absence of an equivalent explicit rule in the prosecution of criminal cases does
not mean that the same requirement and rationale would not apply.
Understandably, it may not have been found necessary since criminal actions are
generally and fundamentally commenced by the State, through the People of the
Philippines, the offended party being merely the complaining witness therein.
However, in the so-called "private crimes" or those which cannot be prosecuted de
oficio, and the present prosecution for adultery is of such genre, the offended
spouse assumes a more predominant role since the right to commence the action,
or to refrain therefrom, is a matter exclusively within his power and option.

This policy was adopted out of consideration for the aggrieved party who might
prefer to suffer the outrage in silence rather than go through the scandal of a public
trial. 20 Hence, as cogently argued by petitioner, Article 344 of the Revised Penal
Code thus presupposes that the marital relationship is still subsisting at the time of
the institution of the criminal action for, adultery. This is a logical consequence
since the raison d'etre of said provision of law would be absent where the supposed
offended party had ceased to be the spouse of the alleged offender at the time of
the filing of the criminal case. 21

In these cases, therefore, it is indispensable that the status and capacity of the
complainant to commence the action be definitely established and, as already
demonstrated, such status or capacity must indubitably exist as of the time he
initiates the action. It would be absurd if his capacity to bring the action would be
determined by his status beforeor subsequent to the commencement thereof,
where such capacity or status existed prior to but ceased before, or was acquired
subsequent to but did not exist at the time of, the institution of the case. We would
thereby have the anomalous spectacle of a party bringing suit at the very time
when he is without the legal capacity to do so.

To repeat, there does not appear to be any local precedential jurisprudence on the
specific issue as to when precisely the status of a complainant as an offended
spouse must exist where a criminal prosecution can be commenced only by one
who in law can be categorized as possessed of such status. Stated differently and
with reference to the present case, the inquiry ;would be whether it is necessary in
the commencement of a criminal action for adultery that the marital bonds between
the complainant and the accused be unsevered and existing at the time of the
institution of the action by the former against the latter.

American jurisprudence, on cases involving statutes in that jurisdiction which are in


pari materia with ours, yields the rule that after a divorce has been decreed, the
innocent spouse no longer has the right to institute proceedings against the
offenders where the statute provides that the innocent spouse shall have the
exclusive right to institute a prosecution for adultery. Where, however, proceedings
have been properly commenced, a divorce subsequently granted can have no legal
effect on the prosecution of the criminal proceedings to a conclusion. 22

In the cited Loftus case, the Supreme Court of Iowa held that —

'No prosecution for adultery can be commenced except on the complaint


of the husband or wife.' Section 4932, Code. Though Loftus was
husband of defendant when the offense is said to have been committed,
he had ceased to be such when the prosecution was begun; and
appellant insists that his status was not such as to entitle him to make
the complaint. We have repeatedly said that the offense is against the
unoffending spouse, as well as the state, in explaining the reason for
this provision in the statute; and we are of the opinion that the
unoffending spouse must be such when the prosecution is commenced.
(Emphasis supplied.)

We see no reason why the same doctrinal rule should not apply in this case and in
our jurisdiction, considering our statutory law and jural policy on the matter. We
are convinced that in cases of such nature, the status of the complainant vis-a-vis
the accused must be determined as of the time the complaint was filed. Thus, the
person who initiates the adultery case must be an offended spouse, and by this is
meant that he is still married to the accused spouse, at the time of the filing of the
complaint.

In the present case, the fact that private respondent obtained a valid divorce in his
country, the Federal Republic of Germany, is admitted. Said divorce and its legal
effects may be recognized in the Philippines insofar as private respondent is
concerned 23 in view of the nationality principle in our civil law on the matter of
status of persons.

Thus, in the recent case of Van Dorn vs. Romillo, Jr., et al., 24 after a divorce was
granted by a United States court between Alice Van Dornja Filipina, and her
American husband, the latter filed a civil case in a trial court here alleging that her
business concern was conjugal property and praying that she be ordered to render
an accounting and that the plaintiff be granted the right to manage the business.
Rejecting his pretensions, this Court perspicuously demonstrated the error of such
stance, thus:

There can be no question as to the validity of that Nevada divorce in


any of the States of the United States. The decree is binding on private
respondent as an American citizen. For instance, private respondent
cannot sue petitioner, as her husband, in any State of the Union. ...

It is true that owing to the nationality principle embodied in Article 15


of the Civil Code, only Philippine nationals are covered by the policy
against absolute divorces the same being considered contrary to our
concept of public policy and morality. However, aliens may obtain
divorces abroad, which may be recognized in the Philippines, provided
they are valid according to their national law. ...

Thus, pursuant to his national law, private respondent is no longer the


husband of petitioner. He would have no standing to sue in the case
below as petitioner's husband entitled to exercise control over conjugal
assets. ... 25

Under the same considerations and rationale, private respondent, being no longer
the husband of petitioner, had no legal standing to commence the adultery case
under the imposture that he was the offended spouse at the time he filed suit.

The allegation of private respondent that he could not have brought this case before
the decree of divorce for lack of knowledge, even if true, is of no legal significance
or consequence in this case. When said respondent initiated the divorce proceeding,
he obviously knew that there would no longer be a family nor marriage vows to
protect once a dissolution of the marriage is decreed. Neither would there be a
danger of introducing spurious heirs into the family, which is said to be one of the
reasons for the particular formulation of our law on adultery, 26 since there would
thenceforth be no spousal relationship to speak of. The severance of the marital
bond had the effect of dissociating the former spouses from each other, hence the
actuations of one would not affect or cast obloquy on the other.

The aforecited case of United States vs. Mata cannot be successfully relied upon by
private respondent. In applying Article 433 of the old Penal Code, substantially the
same as Article 333 of the Revised Penal Code, which punished adultery "although
the marriage be afterwards declared void", the Court merely stated that "the
lawmakers intended to declare adulterous the infidelity of a married woman to her
marital vows, even though it should be made to appear that she is entitled to have
her marriage contract declared null and void, until and unless she actually secures
a formal judicial declaration to that effect". Definitely, it cannot be logically inferred
therefrom that the complaint can still be filed after the declaration of nullity because
such declaration that the marriage is void ab initio is equivalent to stating that it
never existed. There being no marriage from the beginning, any complaint for
adultery filed after said declaration of nullity would no longer have a leg to stand
on. Moreover, what was consequently contemplated and within the purview of the
decision in said case is the situation where the criminal action for adultery was
filed beforethe termination of the marriage by a judicial declaration of its nullity ab
initio. The same rule and requisite would necessarily apply where the termination
of the marriage was effected, as in this case, by a valid foreign divorce.

Private respondent's invocation of Donio-Teves, et al. vs. Vamenta, hereinbefore


cited, 27 must suffer the same fate of inapplicability. A cursory reading of said case
reveals that the offended spouse therein had duly and seasonably filed a complaint
for adultery, although an issue was raised as to its sufficiency but which was
resolved in favor of the complainant. Said case did not involve a factual situation
akin to the one at bar or any issue determinative of the controversy herein.

WHEREFORE, the questioned order denying petitioner's motion to quash is SET


ASIDE and another one entered DISMISSING the complaint in Criminal Case No.
87-52435 for lack of jurisdiction. The temporary restraining order issued in this
case on October 21, 1987 is hereby made permanent. SO ORDERED.
[G.R. No. 138322. October 2, 2001]

GRACE J. GARCIA, a.k.a. GRACE J. GARCIA-RECIO, petitioner, vs.


REDERICK A. RECIO, respondent.

DECISION
PANGANIBAN, J.:

A divorce obtained abroad by an alien may be recognized in our jurisdiction,


provided such decree is valid according to the national law of the
foreigner. However, the divorce decree and the governing personal law of the alien
spouse who obtained the divorce must be proven. Our courts do not take judicial
notice of foreign laws and judgments; hence, like any other facts, both the divorce
decree and the national law of the alien must be alleged and proven according to
our law on evidence.

The Case

Before us is a Petition for Review under Rule 45 of the Rules of Court, seeking
to nullify the January 7, 1999 Decision[1] and the March 24, 1999 Order[2] of the
Regional Trial Court of Cabanatuan City, Branch 28, in Civil Case No. 3026AF. The
assailed Decision disposed as follows:

WHEREFORE, this Court declares the marriage between Grace J. Garcia and
Rederick A. Recio solemnized on January 12, 1994 at Cabanatuan City as dissolved
and both parties can now remarry under existing and applicable laws to any and/or
both parties.[3]

The assailed Order denied reconsideration of the above-quoted Decision.

The Facts

Rederick A. Recio, a Filipino, was married to Editha Samson, an Australian


citizen, in Malabon, Rizal, on March 1, 1987.[4] They lived together as husband and
wife in Australia. On May 18, 1989, [5]a decree of divorce, purportedly dissolving
the marriage, was issued by an Australian family court.
On June 26, 1992, respondent became an Australian citizen, as shown by a
Certificate of Australian Citizenship issued by the Australian
[6]
government. Petitioner -- a Filipina -- and respondent were married on January
12, 1994 in Our Lady of Perpetual Help Church in Cabanatuan City. [7] In
their application for a marriage license, respondent was declared as single and
Filipino.[8]
Starting October 22, 1995, petitioner and respondent lived separately without
prior judicial dissolution of their marriage. While the two were still in Australia, their
conjugal assets were divided on May 16, 1996, in accordance with their Statutory
Declarations secured in Australia.[9]
On March 3, 1998, petitioner filed a Complaint for Declaration of Nullity of
Marriage[10] in the court a quo, on the ground of bigamy -- respondent allegedly
had a prior subsisting marriage at the time he married her on January 12,
1994. She claimed that she learned of respondents marriage to Editha Samson only
in November, 1997.
In his Answer, respondent averred that, as far back as 1993, he had revealed
to petitioner his prior marriage and its subsequent dissolution.[11] He contended
that his first marriage to an Australian citizen had been validly dissolved by a
divorce decree obtained in Australia in 1989;[12] thus, he was legally capacitated to
marry petitioner in 1994.
On July 7, 1998 -- or about five years after the couples wedding and while the
suit for the declaration of nullity was pending -- respondent was able to secure a
divorce decree from a family court in Sydney, Australia because the marriage ha[d]
irretrievably broken down.[13]
Respondent prayed in his Answer that the Complaint be dismissed on the ground
that it stated no cause of action.[14] The Office of the Solicitor General agreed with
respondent.[15] The court marked and admitted the documentary evidence of both
parties.[16] After they submitted their respective memoranda, the case was
submitted for resolution.[17]
Thereafter, the trial court rendered the assailed Decision and Order.

Ruling of the Trial Court

The trial court declared the marriage dissolved on the ground that the divorce
issued in Australia was valid and recognized in the Philippines. It deemed the
marriage ended, but not on the basis of any defect in an essential element of the
marriage; that is, respondents alleged lack of legal capacity to remarry. Rather, it
based its Decision on the divorce decree obtained by respondent. The Australian
divorce had ended the marriage; thus, there was no more marital union to nullify
or annul.
Hence, this Petition.[18]

Issues

Petitioner submits the following issues for our consideration:


1

The trial court gravely erred in finding that the divorce decree obtained in Australia
by the respondent ipso facto terminated his first marriage to Editha Samson
thereby capacitating him to contract a second marriage with the petitioner.

The failure of the respondent, who is now a naturalized Australian, to present a


certificate of legal capacity to marry constitutes absence of a substantial requisite
voiding the petitioners marriage to the respondent

The trial court seriously erred in the application of Art. 26 of the Family Code in
this case.

The trial court patently and grievously erred in disregarding Arts. 11, 13, 21, 35,
40, 52 and 53 of the Family Code as the applicable provisions in this case.
5

The trial court gravely erred in pronouncing that the divorce decree obtained by
the respondent in Australia ipso facto capacitated the parties to remarry, without
first securing a recognition of the judgment granting the divorce decree before our
courts.[19]

The Petition raises five issues, but for purposes of this Decision, we shall
concentrate on two pivotal ones: (1) whether the divorce between respondent and
Editha Samson was proven, and (2) whether respondent was proven to be legally
capacitated to marry petitioner. Because of our ruling on these two, there is no
more necessity to take up the rest.

The Courts Ruling

The Petition is partly meritorious.

First Issue:
Proving the Divorce Between Respondent and Editha Samson

Petitioner assails the trial courts recognition of the divorce between respondent
and Editha Samson. Citing Adong v. Cheong Seng Gee,[20] petitioner argues that
the divorce decree, like any other foreign judgment, may be given recognition in
this jurisdiction only upon proof of the existence of (1) the foreign law allowing
absolute divorce and (2) the alleged divorce decree itself. She adds that respondent
miserably failed to establish these elements.
Petitioner adds that, based on the first paragraph of Article 26 of the Family
Code, marriages solemnized abroad are governed by the law of the place where
they were celebrated (the lex loci celebrationis). In effect, the Code requires the
presentation of the foreign law to show the conformity of the marriage in question
to the legal requirements of the place where the marriage was performed.
At the outset, we lay the following basic legal principles as the take-off points
for our discussion. Philippine law does not provide for absolute divorce; hence, our
courts cannot grant it.[21] A marriage between two Filipinos cannot be dissolved
even by a divorce obtained abroad, because of Articles 15[22] and 17[23] of the Civil
Code.[24] In mixed marriages involving a Filipino and a foreigner, Article 26 [25] of
the Family Code allows the former to contract a subsequent marriage in case the
divorce is validly obtained abroad by the alien spouse capacitating him or her to
remarry.[26] A divorce obtained abroad by a couple, who are both aliens, may be
recognized in the Philippines, provided it is consistent with their respective national
laws.[27]
A comparison between marriage and divorce, as far as pleading and proof are
concerned, can be made. Van Dorn v. Romillo Jr. decrees that aliens may obtain
divorces abroad, which may be recognized in the Philippines, provided they are
valid according to their national law.[28] Therefore, before a foreign divorce decree
can be recognized by our courts, the party pleading it must prove the divorce as a
fact and demonstrate its conformity to the foreign law allowing it. [29] Presentation
solely of the divorce decree is insufficient.
Divorce as a Question of Fact
Petitioner insists that before a divorce decree can be admitted in evidence, it
must first comply with the registration requirements under Articles 11, 13 and 52
of the Family Code. These articles read as follows:
ART. 11. Where a marriage license is required, each of the contracting parties shall
file separately a sworn application for such license with the proper local civil
registrar which shall specify the following:

xxxxxxxxx

(5) If previously married, how, when and where the previous marriage was
dissolved or annulled;

xxxxxxxxx

ART. 13. In case either of the contracting parties has been previously married, the
applicant shall be required to

ART. 13. In case either of the contracting parties has been previously married, the
applicant shall be required to furnish, instead of the birth or baptismal certificate
required in the last preceding article, the death certificate of the deceased spouse
or the judicial decree of the absolute divorce, or the judicial decree of annulment
or declaration of nullity of his or her previous marriage. x x x.

ART. 52. The judgment of annulment or of absolute nullity of the marriage, the
partition and distribution of the properties of the spouses, and the delivery of the
childrens presumptive legitimes shall be recorded in the appropriate civil registry
and registries of property; otherwise, the same shall not affect their persons.

Respondent, on the other hand, argues that the Australian divorce decree is a
public document -- a written official act of an Australian family court. Therefore, it
requires no further proof of its authenticity and due execution.
Respondent is getting ahead of himself. Before a foreign judgment is given
presumptive evidentiary value, the document must first be presented and admitted
in evidence.[30] A divorce obtained abroad is proven by the divorce decree
itself. Indeed the best evidence of a judgment is the judgment itself.[31] The decree
purports to be a written act or record of an act of an official body or tribunal of a
foreign country.[32]
Under Sections 24 and 25 of Rule 132, on the other hand, a writing or document
may be proven as a public or official record of a foreign country by either (1) an
official publication or (2) a copy thereof attested[33] by the officer having legal
custody of the document. If the record is not kept in the Philippines, such copy
must be (a) accompanied by a certificate issued by the proper diplomatic or
consular officer in the Philippine foreign service stationed in the foreign country in
which the record is kept and (b) authenticated by the seal of his office. [34]
The divorce decree between respondent and Editha Samson appears to be an
authentic one issued by an Australian family court. [35] However, appearance is not
sufficient; compliance with the aforementioned rules on evidence must be
demonstrated.
Fortunately for respondents cause, when the divorce decree of May 18, 1989
was submitted in evidence, counsel for petitioner objected, not to its admissibility,
but only to the fact that it had not been registered in the Local Civil Registry of
Cabanatuan City.[36] The trial court ruled that it was admissible, subject to
petitioners qualification.[37] Hence, it was admitted in evidence and accorded weight
by the judge. Indeed, petitioners failure to object properly rendered the divorce
decree admissible as a written act of the Family Court of Sydney, Australia.[38]
Compliance with the quoted articles (11, 13 and 52) of the Family Code is not
necessary; respondent was no longer bound by Philippine personal laws after he
acquired Australian citizenship in 1992.[39] Naturalization is the legal act of adopting
an alien and clothing him with the political and civil rights belonging to a
citizen.[40] Naturalized citizens, freed from the protective cloak of their former
states, don the attires of their adoptive countries. By becoming an Australian,
respondent severed his allegiance to the Philippines and the vinculum juris that had
tied him to Philippine personal laws.
Burden of Proving Australian Law
Respondent contends that the burden to prove Australian divorce law falls upon
petitioner, because she is the party challenging the validity of a foreign
judgment. He contends that petitioner was satisfied with the original of the divorce
decree and was cognizant of the marital laws of Australia, because she had lived
and worked in that country for quite a long time. Besides, the Australian divorce
law is allegedly known by Philippine courts; thus, judges may take judicial notice
of foreign laws in the exercise of sound discretion.
We are not persuaded. The burden of proof lies with the party who alleges the
existence of a fact or thing necessary in the prosecution or defense of an
action.[41] In civil cases, plaintiffs have the burden of proving the material
allegations of the complaint when those are denied by the answer; and defendants
have the burden of proving the material allegations in their answer when they
introduce new matters.[42] Since the divorce was a defense raised by respondent,
the burden of proving the pertinent Australian law validating it falls squarely upon
him.
It is well-settled in our jurisdiction that our courts cannot take judicial notice of
foreign laws.[43] Like any other facts, they must be alleged and proved. Australian
marital laws are not among those matters that judges are supposed to know by
reason of their judicial function.[44] The power of judicial notice must be exercised
with caution, and every reasonable doubt upon the subject should be resolved in
the negative.

Second Issue: Respondents Legal Capacity to Remarry

Petitioner contends that, in view of the insufficient proof of the divorce,


respondent was legally incapacitated to marry her in 1994. Hence, she concludes
that their marriage was void ab initio.
Respondent replies that the Australian divorce decree, which was validly
admitted in evidence, adequately established his legal capacity to marry under
Australian law.
Respondents contention is untenable. In its strict legal sense, divorce means
the legal dissolution of a lawful union for a cause arising after marriage. But
divorces are of different types. The two basic ones are (1) absolute divorce or a
vinculo matrimonii and (2) limited divorce or a mensa et thoro. The first kind
terminates the marriage, while the second suspends it and leaves the bond in full
force.[45]There is no showing in the case at bar which type of divorce was procured
by respondent.
Respondent presented a decree nisi or an interlocutory decree -- a conditional
or provisional judgment of divorce. It is in effect the same as a separation from
bed and board, although an absolute divorce may follow after the lapse of the
prescribed period during which no reconciliation is effected.[46]
Even after the divorce becomes absolute, the court may under some foreign
statutes and practices, still restrict remarriage. Under some other jurisdictions,
remarriage may be limited by statute; thus, the guilty party in a divorce which was
granted on the ground of adultery may be prohibited from marrying again. The
court may allow a remarriage only after proof of good behavior.[47]
On its face, the herein Australian divorce decree contains a restriction that
reads:
1. A party to a marriage who marries again before this decree becomes
absolute (unless the other party has died) commits the offence of
bigamy.[48]
This quotation bolsters our contention that the divorce obtained by respondent
may have been restricted. It did not absolutely establish his legal capacity to
remarry according to his national law. Hence, we find no basis for the ruling of the
trial court, which erroneously assumed that the Australian divorce ipso
facto restored respondents capacity to remarry despite the paucity of evidence on
this matter.
We also reject the claim of respondent that the divorce decree raises a
disputable presumption or presumptive evidence as to his civil status based on
Section 48, Rule 39[49] of the Rules of Court, for the simple reason that no proof
has been presented on the legal effects of the divorce decree obtained under
Australian laws.
Significance of the Certificate of Legal Capacity
Petitioner argues that the certificate of legal capacity required by Article 21 of
the Family Code was not submitted together with the application for a marriage
license. According to her, its absence is proof that respondent did not have legal
capacity to remarry.
We clarify. To repeat, the legal capacity to contract marriage is determined by
the national law of the party concerned. The certificate mentioned in Article 21 of
the Family Code would have been sufficient to establish the legal capacity of
respondent, had he duly presented it in court. A duly authenticated and admitted
certificate is prima facie evidence of legal capacity to marry on the part of the alien
applicant for a marriage license.[50]
As it is, however, there is absolutely no evidence that proves respondents legal
capacity to marry petitioner. A review of the records before this Court shows that
only the following exhibits were presented before the lower court: (1) for petitioner:
(a) Exhibit A Complaint;[51] (b) Exhibit B Certificate of Marriage Between Rederick
A. Recio (Filipino-Australian) and Grace J. Garcia (Filipino) on January 12, 1994 in
Cabanatuan City, Nueva Ecija;[52] (c) Exhibit C Certificate of Marriage Between
Rederick A. Recio (Filipino) and Editha D. Samson (Australian) on March 1, 1987 in
Malabon, Metro Manila;[53] (d) Exhibit D Office of the City Registrar of Cabanatuan
City Certification that no information of annulment between Rederick A. Recio and
Editha D. Samson was in its records;[54] and (e) Exhibit E Certificate of Australian
Citizenship of Rederick A. Recio;[55] (2) for respondent: (a) Exhibit 1 -- Amended
Answer;[56] (b) Exhibit 2 Family Law Act 1975 Decree Nisi of Dissolution of Marriage
in the Family Court of Australia;[57] (c) Exhibit 3 Certificate of Australian Citizenship
of Rederick A. Recio;[58] (d) Exhibit 4 Decree Nisi of Dissolution of Marriage in the
Family Court of Australia Certificate;[59] and Exhibit 5 -- Statutory Declaration of
the Legal Separation Between Rederick A. Recio and Grace J. Garcia Recio since
October 22, 1995.[60]
Based on the above records, we cannot conclude that respondent, who was then
a naturalized Australian citizen, was legally capacitated to marry petitioner on
January 12, 1994. We agree with petitioners contention that the court a quo erred
in finding that the divorce decree ipso facto clothed respondent with the legal
capacity to remarry without requiring him to adduce sufficient evidence to show
the Australian personal law governing his status; or at the very least, to prove his
legal capacity to contract the second marriage.
Neither can we grant petitioners prayer to declare her marriage to respondent
null and void on the ground of bigamy. After all, it may turn out that under
Australian law, he was really capacitated to marry petitioner as a direct result of
the divorce decree. Hence, we believe that the most judicious course is to remand
this case to the trial court to receive evidence, if any, which show petitioners legal
capacity to marry petitioner. Failing in that, then the court a quo may declare a
nullity of the parties marriage on the ground of bigamy, there being already in
evidence two existing marriage certificates, which were both obtained in the
Philippines, one in Malabon, Metro Manila dated March 1, 1987 and the other, in
Cabanatuan City dated January 12, 1994.
WHEREFORE, in the interest of orderly procedure and substantial justice,
we REMAND the case to the court a quo for the purpose of receiving evidence which
conclusively show respondents legal capacity to marry petitioner; and failing in
that, of declaring the parties marriage void on the ground of bigamy, as above
discussed. No costs. SO ORDERED.
[G.R. No. 124862. December 22, 1998]

FE D. QUITA, petitioner, vs. COURT OF APPEALS and BLANDINA


DANDAN,* respondents.

DECISION
BELLOSILLO, J .:

FE D. QUITA and Arturo T. Padlan, both Filipinos, were married in the Philippines
on 18 May 1941. They were not however blessed with children. Somewhere along
the way their relationship soured. Eventually Fe sued Arturo for divorce in San
Francisco, California, U.S.A. She submitted in the divorce proceedings a private
writing dated 19 July 1950 evidencing their agreement to live separately from each
other and a settlement of their conjugal properties. On 23 July 1954 she obtained
a final judgment of divorce. Three (3) weeks thereafter she married a certain Felix
Tupaz in the same locality but their relationship also ended in a divorce. Still in the
U.S.A., she married for the third time, to a certain Wernimont.
On 16 April 1972 Arturo died. He left no will. On 31 August 1972 Lino Javier
Inciong filed a petition with the Regional Trial Court of Quezon City for issuance of
letters of administration concerning the estate of Arturo in favor of the Philippine
Trust Company. Respondent Blandina Dandan (also referred to as Blandina
Padlan), claiming to be the surviving spouse of Arturo Padlan, and Claro, Alexis,
Ricardo, Emmanuel, Zenaida and Yolanda, all surnamed Padlan, named in the
petition as surviving children of Arturo Padlan, opposed the petition and prayed for
the appointment instead of Atty. Leonardo Cabasal, which was resolved in favor of
the latter. Upon motion of the oppositors themselves, Atty. Cabasal was later
replaced by Higino Castillon. On 30 April 1973 the oppositors (Blandina and the
Padlan children) submitted certified photocopies of the 19 July 1950 private writing
and the final judgment of divorce between petitioner and Arturo. Later Ruperto T.
Padlan, claiming to be the sole surviving brother of the deceased Arturo,
intervened.
On 7 October 1987 petitioner moved for the immediate declaration of heirs of
the decedent and the distribution of his estate. At the scheduled hearing on 23
October 1987, private respondent as well as the six (6) Padlan children and Ruperto
failed to appear despite due notice. On the same day, the trial court required the
submission of the records of birth of the Padlan children within ten (10) days from
receipt thereof, after which, with or without the documents, the issue on the
declaration of heirs would be considered submitted for resolution. The prescribed
period lapsed without the required documents being submitted.
The trial court invoking Tenchavez v. Escao[1] which held that "a foreign divorce
between Filipino citizens sought and decreed after the effectivity of the present
Civil Code (Rep. Act 386) was not entitled to recognition as valid in this
jurisdiction,"[2] disregarded the divorce between petitioner and
Arturo. Consequently, it expressed the view that their marriage subsisted until the
death of Arturo in 1972. Neither did it consider valid their extrajudicial settlement
of conjugal properties due to lack of judicial approval.[3] On the other hand, it
opined that there was no showing that marriage existed between private
respondent and Arturo, much less was it shown that the alleged Padlan children
had been acknowledged by the deceased as his children with her. As regards
Ruperto, it found that he was a brother of Arturo. On 27 November 1987[4] only
petitioner and Ruperto were declared the intestate heirs of Arturo. Accordingly,
equal adjudication of the net hereditary estate was ordered in favor of the two
intestate heirs.[5]
On motion for reconsideration, Blandina and the Padlan children were allowed
to present proofs that the recognition of the children by the deceased as his
legitimate children, except Alexis who was recognized as his illegitimate child, had
been made in their respective records of birth. Thus on 15 February 1988[6] partial
reconsideration was granted declaring the Padlan children, with the exception of
Alexis, entitled to one-half of the estate to the exclusion of Ruperto Padlan, and
petitioner to the other half.[7] Private respondent was not declared an
heir. Although it was stated in the aforementioned records of birth that she and
Arturo were married on 22 April 1947, their marriage was clearly void since it was
celebrated during the existence of his previous marriage to petitioner.
In their appeal to the Court of Appeals, Blandina and her children assigned as
one of the errors allegedly committed by the trial court the circumstance that the
case was decided without a hearing, in violation of Sec. 1, Rule 90, of the Rules of
Court, which provides that if there is a controversy before the court as to who are
the lawful heirs of the deceased person or as to the distributive shares to which
each person is entitled under the law, the controversy shall be heard and decided
as in ordinary cases.
Respondent appellate court found this ground alone sufficient to sustain the
appeal; hence, on 11 September 1995 it declared null and void the 27 November
1987 decision and 15 February 1988 order of the trial court, and directed the
remand of the case to the trial court for further proceedings.[8] On 18 April 1996 it
denied reconsideration.[9]
Should this case be remanded to the lower court for further
proceedings? Petitioner insists that there is no need because, first, no legal or
factual issue obtains for resolution either as to the heirship of the Padlan children
or as to their respective shares in the intestate estate of the decedent; and, second,
the issue as to who between petitioner and private respondent is the proper heir of
the decedent is one of law which can be resolved in the present petition based on
established facts and admissions of the parties.
We cannot sustain petitioner. The provision relied upon by respondent court is
clear: If there is a controversy before the court as to who are the lawful heirs of
the deceased person or as to the distributive shares to which each person is entitled
under the law, the controversy shall be heard and decided as in ordinary cases.
We agree with petitioner that no dispute exists either as to the right of the six
(6) Padlan children to inherit from the decedent because there are proofs that they
have been duly acknowledged by him and petitioner herself even recognizes them
as heirs of Arturo Padlan;[10] nor as to their respective hereditary shares. But
controversy remains as to who is the legitimate surviving spouse of Arturo. The
trial court, after the parties other than petitioner failed to appear during the
scheduled hearing on 23 October 1987 of the motion for immediate declaration of
heirs and distribution of estate, simply issued an order requiring the submission of
the records of birth of the Padlan children within ten (10) days from receipt thereof,
after which, with or without the documents, the issue on declaration of heirs would
be deemed submitted for resolution.
We note that in her comment to petitioner's motion private respondent raised,
among others, the issue as to whether petitioner was still entitled to inherit from
the decedent considering that she had secured a divorce in the U.S.A. and in fact
had twice remarried. She also invoked the above quoted procedural rule.[11] To this,
petitioner replied that Arturo was a Filipino and as such remained legally married
to her in spite of the divorce they obtained.[12] Reading between the lines, the
implication is that petitioner was no longer a Filipino citizen at the time of her
divorce from Arturo. This should have prompted the trial court to conduct a hearing
to establish her citizenship. The purpose of a hearing is to ascertain the truth of
the matters in issue with the aid of documentary and testimonial evidence as well
as the arguments of the parties either supporting or opposing the
evidence. Instead, the lower court perfunctorily settled her claim in her favor by
merely applying the ruling in Tenchavez v. Escao.
Then in private respondent's motion to set aside and/or reconsider the lower
court's decision she stressed that the citizenship of petitioner was relevant in the
light of the ruling in Van Dorn v. Romillo Jr.[13] that aliens may obtain divorces
abroad, which may be recognized in the Philippines, provided they are valid
according to their national law. She prayed therefore that the case be set for
hearing.[14]Petitioner opposed the motion but failed to squarely address the issue
on her citizenship.[15] The trial court did not grant private respondent's prayer for
a hearing but proceeded to resolve her motion with the finding that both petitioner
and Arturo were "Filipino citizens and were married in the Philippines." [16] It
maintained that their divorce obtained in 1954 in San Francisco, California, U.S.A.,
was not valid in Philippine jurisdiction. We deduce that the finding on their
citizenship pertained solely to the time of their marriage as the trial court was not
supplied with a basis to determine petitioner's citizenship at the time of
their divorce. The doubt persisted as to whether she was still a Filipino citizen when
their divorce was decreed. The trial court must have overlooked the materiality of
this aspect.Once proved that she was no longer a Filipino citizen at the time of their
divorce, Van Dorn would become applicable and petitioner could very well lose her
right to inherit from Arturo.
Respondent again raised in her appeal the issue on petitioner's citizenship;[17] it
did not merit enlightenment however from petitioner.[18] In the present proceeding,
petitioner's citizenship is brought anew to the fore by private respondent. She even
furnishes the Court with the transcript of stenographic notes taken on 5 May 1995
during the hearing for the reconstitution of the original of a certain transfer
certificate title as well as the issuance of new owner's duplicate copy thereof before
another trial court. When asked whether she was an American citizen petitioner
answered that she was since 1954.[19] Significantly, the decree of divorce of
petitioner and Arturo was obtained in the same year. Petitioner however did not
bother to file a reply memorandum to erase the uncertainty about her citizenship
at the time of their divorce, a factual issue requiring hearings to be conducted by
the trial court. Consequently, respondent appellate court did not err in ordering the
case returned to the trial court for further proceedings.
We emphasize however that the question to be determined by the trial court
should be limited only to the right of petitioner to inherit from Arturo as his
surviving spouse. Private respondent's claim to heirship was already resolved
by the trial court. She and Arturo were married on 22 April 1947 while the prior
marriage of petitioner and Arturo was subsisting thereby resulting in a bigamous
marriage considered void from the beginning under Arts. 80 and 83 of the Civil
Code. Consequently, she is not a surviving spouse that can inherit from him as this
status presupposes a legitimate relationship.[20]
As regards the motion of private respondent for petitioner and her counsel to
be declared in contempt of court and that the present petition be dismissed for
forum shopping,[21] the same lacks merit.For forum shopping to exist the actions
must involve the same transactions and same essential facts and
circumstances. There must also be identical causes of action, subject matter and
issue.[22] The present petition deals with declaration of heirship while the
subsequent petitions filed before the three (3) trial courts concern the issuance of
new owner's duplicate copies of titles of certain properties belonging to the estate
of Arturo. Obviously, there is no reason to declare the existence of forum shopping.
WHEREFORE, the petition is DENIED. The decision of respondent Court of
Appeals ordering the remand of the case to the court of origin for further
proceedings and declaring null and void its decision holding petitioner Fe D. Quita
and Ruperto T. Padlan as intestate heirs is AFFIRMED. The order of the appellate
court modifying its previous decision by granting one-half (1/2) of the net
hereditary estate to the Padlan children, namely, Claro, Ricardo, Emmanuel,
Zenaida and Yolanda, with the exception of Alexis, all surnamed Padlan, instead of
Arturo's brother Ruperto Padlan, is likewise AFFIRMED. The Court however
emphasizes that the reception of evidence by the trial court should be limited to
the hereditary rights of petitioner as the surviving spouse of Arturo Padlan.
The motion to declare petitioner and her counsel in contempt of court and to
dismiss the present petition for forum shopping is DENIED. SO ORDERED.
ELMAR O. PEREZ, G.R. No. 162580
Petitioner,

- versus -

COURT OF APPEALS, Fifth


Division, TRISTAN A. CATINDIG Promulgated:
and LILY GOMEZ-CATINDIG,
Respondents. January 27, 2006

x ----------------------------------------------------------------------------------------
x
DECISION

YNARES-SANTIAGO, J.:

This petition for certiorari and prohibition under Rule 65 of the Rules of Court
assails the July 25, 2003 Decision[1] of the Court of Appeals in CA-G.R. SP No.
74456 which set aside and declared as null and void the September 30, 2002
Order[2] of the Regional Trial Court of Quezon City, Branch 84, granting petitioners
motion for leave to file intervention and admitting the Complaint-in-
Intervention[3] in Civil Case No. Q-01-44847; and its January 23,
2004 Resolution[4] denying the motion for reconsideration.

Private respondent Tristan A. Catindig married Lily Gomez Catindig[5] twice


on May 16, 1968. The first marriage ceremony was celebrated
at the Central MethodistChurch at T.M. Kalaw Street, Ermita, Manila while the
second took place at the Lourdes Catholic Church in La Loma, Quezon City. The
marriage produced four children.

Several years later, the couple encountered marital problems that they
decided to separate from each other. Upon advice of a mutual friend, they decided
to obtain a divorce from the Dominican Republic. Thus, on April 27, 1984, Tristan
and Lily executed a Special Power of Attorney addressed to the Judge of the First
Civil Court of San Cristobal, Dominican Republic, appointing an attorney-in-fact to
institute a divorce action under its laws.[6]

Thereafter, on April 30, 1984, the private respondents filed a joint petition for
dissolution of conjugal partnership with the Regional Trial Court of Makati. On June
12, 1984, the civil court in the Dominican Republic ratified the divorce by mutual
consent of Tristan and Lily. Subsequently, on June 23, 1984,
the Regional Trial Court of MakatiCity, Branch 133, ordered the complete
separation of properties between Tristan and Lily.
On July 14, 1984, Tristan married petitioner Elmar O. Perez in the State
of Virginia in the United States[7] and both lived as husband and wife until October
2001. Their union produced one offspring.[8]
During their cohabitation, petitioner learned that the divorce decree issued by
the court in the Dominican Republic which dissolved the marriage between Tristan
and Lily was not recognized in the Philippines and that her marriage to Tristan was
deemed void under Philippine law. When she confronted Tristan about this, the
latter assured her that he would legalize their union after he obtains an annulment
of his marriage with Lily. Tristan further promised the petitioner that he would
adopt their son so that he would be entitled to an equal share in his estate as that
of each of his children with Lily.[9]

On August 13, 2001, Tristan filed a petition for the declaration of nullity of his
marriage to Lily with the Regional Trial Court of Quezon City, docketed as Case No.
Q-01-44847.

Subsequently, petitioner filed a Motion for Leave to File


Intervention[10] claiming that she has a legal interest in the matter in litigation
because she knows certain information which might aid the trial court at a truthful,
fair and just adjudication of the annulment case, which the trial court granted
on September 30, 2002. Petitioners complaint-in-intervention was also ordered
admitted.

Tristan filed a petition for certiorari and prohibition with the Court of Appeals
seeking to annul the order dated September 30, 2002 of the trial court. The Court
of Appeals granted the petition and declared as null and void the September 30,
2002 Order of the trial court granting the motion for leave to file intervention and
admitting the complaint-in-intervention.

Petitioners motion for reconsideration was denied, hence this petition for
certiorari and prohibition filed under Rule 65 of the Rules of Court. Petitioner
contends that the Court of Appeals gravely abused its discretion in disregarding her
legal interest in the annulment case between Tristan and Lily.

The petition lacks merit.


Ordinarily, the proper recourse of an aggrieved party from a decision of the
Court of Appeals is a petition for review on certiorari under Rule 45 of the Rules of
Court. However, if the error subject of the recourse is one of jurisdiction, or the act
complained of was granted by a court with grave abuse of discretion amounting to
lack or excess of jurisdiction, as alleged in this case, the proper remedy is a petition
for certiorari under Rule 65 of the said Rules.[11] This is based on the premise that
in issuing the assailed decision and resolution, the Court of Appeals acted with
grave abuse of discretion, amounting to excess of lack of jurisdiction and there is
no plain, speedy and adequate remedy in the ordinary course of law. A remedy is
considered plain, speedy, and adequate if it will promptly relieve the petitioner from
the injurious effect of the judgment and the acts of the lower court.[12]

It is therefore incumbent upon the petitioner to establish that the Court of


Appeals acted with grave abuse of discretion amounting to excess or lack of
jurisdiction when it promulgated the assailed decision and resolution.

We have previously ruled that grave abuse of discretion may arise when a
lower court or tribunal violates or contravenes the Constitution, the law or existing
jurisprudence. By grave abuse of discretion is meant, such capricious and whimsical
exercise of judgment as is equivalent to lack of jurisdiction. The abuse of discretion
must be grave as where the power is exercised in an arbitrary or despotic manner
by reason of passion or personal hostility and must be so patent and gross as to
amount to an evasion of positive duty or to a virtual refusal to perform the duty
enjoined by or to act at all in contemplation of law.[13] The word capricious, usually
used in tandem with the term arbitrary, conveys the notion of willful and
unreasoning action. Thus, when seeking the corrective hand of certiorari, a clear
showing of caprice and arbitrariness in the exercise of discretion is imperative.[14]

The Rules of Court laid down the parameters before a person, not a party to
a case can intervene, thus:

Who may intervene. A person who has a legal interest in the


matter in litigation, or in the success of either of the parties, or an
interest against both, or is so situated as to be adversely affected by a
distribution or other disposition of property in the custody of the court
or of an officer thereof may, with leave of court, be allowed to intervene
in the action. The court shall consider whether or not the intervention
will unduly delay or prejudice the adjudication of the rights of the
original parties, and whether or not the intervenors rights may be fully
protected in a separate proceeding.[15]

The requirements for intervention are: [a] legal interest in the matter in
litigation; and [b] consideration must be given as to whether the adjudication of
the original parties may be delayed or prejudiced, or whether the intervenors rights
may be protected in a separate proceeding or not.[16]

Legal interest, which entitles a person to intervene, must be in the matter in


litigation and of such direct and immediate character that the intervenor will either
gain or lose by direct legal operation and effect of the judgment.[17] Such interest
must be actual, direct and material, and not simply contingent and expectant.[18]

Petitioner claims that her status as the wife and companion of Tristan for 17
years vests her with the requisite legal interest required of a would-
be intervenor under the Rules of Court.

Petitioners claim lacks merit. Under the law, petitioner was never the legal
wife of Tristan, hence her claim of legal interest has no basis.

When petitioner and Tristan married on July 14, 1984, Tristan was still
lawfully married to Lily. The divorce decree that Tristan and Lily obtained from
the Dominican Republic never dissolved the marriage bond between them. It is
basic that laws relating to family rights and duties, or to the status, condition and
legal capacity of persons are binding upon citizens of the Philippines, even though
living abroad.[19] Regardless of where a citizen of the Philippines might be, he or
she will be governed by Philippine laws with respect to his or her family rights and
duties, or to his or her status, condition and legal capacity. Hence, if a Filipino
regardless of whether he or she was married here or abroad, initiates a petition
abroad to obtain an absolute divorce from spouse and eventually becomes
successful in getting an absolute divorce decree, the Philippineswill not recognize
such absolute divorce.[20]

When Tristan and Lily married on May 18, 1968, their marriage was governed
by the provisions of the Civil Code[21] which took effect on August 30, 1950. In the
case of Tenchavez v. Escano[22] we held:

(1) That a foreign divorce between Filipino citizens, sought and


decreed after the effectivity of the present Civil Code (Rep. Act No.
386), is not entitled to recognition as valid in this jurisdiction; and
neither is the marriage contracted with another party by the
divorced consort, subsequently to the foreign decree of divorce,
entitled to validity in the country.(Emphasis added)

Thus, petitioners claim that she is the wife of Tristan even if their marriage
was celebrated abroad lacks merit. Thus, petitioner never acquired the legal
interest as a wife upon which her motion for intervention is based.

Since petitioners motion for leave to file intervention was bereft of the
indispensable requirement of legal interest, the issuance by the trial court of the
order granting the same and admitting the complaint-in-intervention was attended
with grave abuse of discretion. Consequently, the Court of Appeals correctly set
aside and declared as null and void the said order.
WHEREFORE, the petition is DISMISSED. The assailed Decision dated July
25, 2003 and Resolution dated January 23, 2004 of the Court of Appeals in CA-
G.R. SP No. 74456 are AFFIRMED. No pronouncement as to costs. SO ORDERED.
EDGAR SAN LUIS, G.R. No. 133743
Petitioner,

- versus –

FELICIDAD SAN LUIS,


Respondent.

x ---------------------------------------------------- x

RODOLFO SAN LUIS, G.R. No. 134029


Petitioner,

- versus -
Promulgated:
FELICIDAD SAGALONGOS
alias FELICIDAD SAN LUIS,
Respondent. February 6, 2007

x ----------------------------------------------------------------------------------------
DECISION

YNARES-SANTIAGO, J.:

Before us are consolidated petitions for review assailing the February 4, 1998
Decision[1] of the Court of Appeals in CA-G.R. CV No. 52647, which reversed and
set aside the September 12, 1995[2] and January 31, 1996[3] Resolutions of the
Regional Trial Court of Makati City, Branch 134 in SP. Proc. No. M-3708; and its May
15, 1998Resolution[4] denying petitioners motion for reconsideration.

The instant case involves the settlement of the estate of Felicisimo T. San
Luis (Felicisimo), who was the former governor of the Province of Laguna. During
his lifetime, Felicisimo contracted three marriages. His first marriage was with
Virginia Sulit on March 17, 1942 out of which were born six children, namely:
Rodolfo, Mila, Edgar, Linda, Emilita and Manuel. On August 11,
1963, Virginia predeceased Felicisimo.

Five years later, on May 1, 1968, Felicisimo married Merry Lee Corwin, with
whom he had a son, Tobias. However, on October 15, 1971, Merry Lee, an
American citizen, filed a Complaint for Divorce[5] before the Family Court of the
First Circuit, State of Hawaii, United States of America (U.S.A.), which issued a
Decree Granting Absolute Divorce and Awarding Child Custody on December 14,
1973.[6]

On June 20, 1974, Felicisimo married respondent Felicidad San Luis, then
surnamed Sagalongos, before Rev. Fr. William Meyer, Minister of the United
Presbyterian at Wilshire Boulevard, Los Angeles, California, U.S.A.[7] He had no
children with respondent but lived with her for 18 years from the time of their
marriage up to his death on December 18, 1992.

Thereafter, respondent sought the dissolution of their conjugal partnership


assets and the settlement of Felicisimos estate. On December 17, 1993, she filed
a petition for letters of administration[8] before
the Regional Trial Court of Makati City, docketed as SP. Proc. No. M-3708 which
was raffled to Branch 146 thereof.

Respondent alleged that she is the widow of Felicisimo; that, at the time of
his death, the decedent was residing at 100 San Juanico Street, New Alabang
Village, Alabang, Metro Manila; that the decedents surviving heirs are respondent
as legal spouse, his six children by his first marriage, and son by his second
marriage; that the decedent left real properties, both conjugal and exclusive,
valued at P30,304,178.00 more or less; that the decedent does not have any
unpaid debts. Respondent prayed that the conjugal partnership assets be liquidated
and that letters of administration be issued to her.

On February 4, 1994, petitioner Rodolfo San Luis, one of the children of Felicisimo
by his first marriage, filed a motion to dismiss[9] on the grounds of improper venue
and failure to state a cause of action. Rodolfo claimed that the petition for letters
of administration should have been filed in the Province of Laguna because this was
Felicisimos place of residence prior to his death. He further claimed that respondent
has no legal personality to file the petition because she was only a mistress of
Felicisimo since the latter, at the time of his death, was still legally married to Merry
Lee.

On February 15, 1994, Linda invoked the same grounds and joined her
brother Rodolfo in seeking the dismissal[10] of the petition. On February 28, 1994,
the trial court issued an Order[11] denying the two motions to dismiss.

Unaware of the denial of the motions to dismiss, respondent filed on March


5, 1994 her opposition[12] thereto. She submitted documentary evidence showing
that while Felicisimo exercised the powers of his public office in Laguna, he regularly
went home to their house in New Alabang Village, Alabang, Metro Manila which
they bought sometime in 1982. Further, she presented the decree of absolute
divorce issued by the Family Court of the First Circuit, State of Hawaii to prove that
the marriage of Felicisimo to Merry Lee had already been dissolved. Thus, she
claimed that Felicisimo had the legal capacity to marry her by virtue of paragraph
2,[13] Article 26 of the Family Code and the doctrine laid down in Van Dorn v.
Romillo, Jr.[14]

Thereafter, Linda, Rodolfo and herein petitioner Edgar San Luis, separately
filed motions for reconsideration from the Order denying their motions to
dismiss.[15] They asserted that paragraph 2, Article 26 of the Family Code cannot
be given retroactive effect to validate respondents bigamous marriage with
Felicisimo because this would impair vested rights in derogation of Article 256[16] of
the Family Code.

On April 21, 1994, Mila, another daughter of Felicisimo from his first marriage,
filed a motion to disqualify Acting Presiding Judge Anthony E. Santos from hearing
the case.

On October 24, 1994, the trial court issued an Order [17] denying the motions
for reconsideration. It ruled that respondent, as widow of the decedent, possessed
the legal standing to file the petition and that venue was properly laid. Meanwhile,
the motion for disqualification was deemed moot and academic [18] because then
Acting Presiding Judge Santos was substituted by Judge Salvador S. Tensuan
pending the resolution of said motion.

Mila filed a motion for inhibition[19] against Judge Tensuan on November 16,
1994. On even date, Edgar also filed a motion for reconsideration[20] from the Order
denying their motion for reconsideration arguing that it does not state the facts
and law on which it was based.

On November 25, 1994, Judge Tensuan issued an Order[21] granting the


motion for inhibition. The case was re-raffled to Branch 134 presided by Judge Paul
T. Arcangel.

On April 24, 1995,[22] the trial court required the parties to submit their
respective position papers on the twin issues of venue and legal capacity of
respondent to file the petition. On May 5, 1995, Edgar manifested[23] that he is
adopting the arguments and evidence set forth in his previous motion for
reconsideration as his position paper. Respondent and Rodolfo filed their position
papers on June 14,[24] and June 20,[25] 1995, respectively.

On September 12, 1995, the trial court dismissed the petition for letters of
administration. It held that, at the time of his death, Felicisimo was the duly elected
governor and a resident of the Province of Laguna. Hence, the petition should have
been filed in Sta. Cruz, Laguna and not in Makati City. It also ruled that respondent
was without legal capacity to file the petition for letters of administration because
her marriage with Felicisimo was bigamous, thus, void ab initio. It found that the
decree of absolute divorce dissolving Felicisimos marriage to Merry Lee was not
valid in the Philippines and did not bind Felicisimo who was a Filipino citizen. It also
ruled that paragraph 2, Article 26 of the Family Code cannot be retroactively applied
because it would impair the vested rights of Felicisimos legitimate children.

Respondent moved for reconsideration[26] and for the disqualification[27] of


Judge Arcangel but said motions were denied.[28]

Respondent appealed to the Court of Appeals which reversed and set aside
the orders of the trial court in its assailed Decision dated February 4, 1998, the
dispositive portion of which states:

WHEREFORE, the Orders dated September 12, 1995 and January


31, 1996 are hereby REVERSED and SET ASIDE; the Orders dated
February 28 and October 24, 1994 are REINSTATED; and the records of
the case is REMANDED to the trial court for further proceedings.[29]

The appellante court ruled that under Section 1, Rule 73 of the Rules of Court,
the term place of residence of the decedent, for purposes of fixing the venue of the
settlement of his estate, refers to the personal, actual or physical habitation, or
actual residence or place of abode of a person as distinguished from legal residence
or domicile.It noted that although Felicisimo discharged his functions as governor
in Laguna, he actually resided in Alabang, Muntinlupa. Thus, the petition for letters
of administration was properly filed in Makati City.

The Court of Appeals also held that Felicisimo had legal capacity to marry
respondent by virtue of paragraph 2, Article 26 of the Family Code and the rulings
in Van Dorn v. Romillo, Jr.[30] and Pilapil v. Ibay-Somera.[31] It found that the
marriage between Felicisimo and Merry Lee was validly dissolved by virtue of the
decree of absolute divorce issued by the Family Court of the First Circuit, State
of Hawaii. As a result, under paragraph 2, Article 26, Felicisimo was capacitated to
contract a subsequent marriage with respondent. Thus

With the well-known rule express mandate of paragraph 2, Article


26, of the Family Code of the Philippines, the doctrines in Van Dorn,
Pilapil, and the reason and philosophy behind the enactment of E.O. No.
227, there is no justiciable reason to sustain the individual view
sweeping statement of Judge Arc[h]angel, that Article 26, par. 2 of the
Family Code, contravenes the basic policy of our state against divorce
in any form whatsoever. Indeed, courts cannot deny what the law
grants. All that the courts should do is to give force and effect to the
express mandate of the law. The foreign divorce having been obtained
by the Foreigner on December 14, 1992,[32] the Filipino divorcee, shall x
x x have capacity to remarry under Philippine laws. For this reason, the
marriage between the deceased and petitioner should not be
denominated as a bigamous marriage.

Therefore, under Article 130 of the Family Code, the petitioner as


the surviving spouse can institute the judicial proceeding for the
settlement of the estate of the deceased. x x x[33]

Edgar, Linda, and Rodolfo filed separate motions for reconsideration[34] which
were denied by the Court of Appeals.

On July 2, 1998, Edgar appealed to this Court via the instant petition for
review on certiorari.[35] Rodolfo later filed a manifestation and motion to adopt the
said petition which was granted.[36]

In the instant consolidated petitions, Edgar and Rodolfo insist that the venue
of the subject petition for letters of administration was improperly laid because at
the time of his death, Felicisimo was a resident of Sta. Cruz, Laguna. They contend
that pursuant to our rulings in Nuval v. Guray[37] and Romualdez v.
RTC, Br. 7, Tacloban City,[38]residence is synonymous with domicile which denotes
a fixed permanent residence to which when absent, one intends to return. They
claim that a person can only have one domicile at any given time. Since Felicisimo
never changed his domicile, the petition for letters of administration should have
been filed in Sta. Cruz, Laguna.

Petitioners also contend that respondents marriage to Felicisimo was void and
bigamous because it was performed during the subsistence of the latters marriage
to Merry Lee. They argue that paragraph 2, Article 26 cannot be retroactively
applied because it would impair vested rights and ratify the void bigamous
marriage. As such, respondent cannot be considered the surviving wife of
Felicisimo; hence, she has no legal capacity to file the petition for letters of
administration.

The issues for resolution: (1) whether venue was properly laid, and (2)
whether respondent has legal capacity to file the subject petition for letters of
administration.

The petition lacks merit.

Under Section 1,[39] Rule 73 of the Rules of Court, the petition for letters of
administration of the estate of Felicisimo should be filed in the Regional Trial Court
of the province in which he resides at the time of his death. In the case of Garcia
Fule v. Court of Appeals,[40] we laid down the doctrinal rule for determining the
residence as contradistinguished from domicile of the decedent for purposes of
fixing the venue of the settlement of his estate:
[T]he term resides connotes ex vi termini actual residence as
distinguished from legal residence or domicile. This term resides, like
the terms residing and residence, is elastic and should be interpreted in
the light of the object or purpose of the statute or rule in which it is
employed. In the application of venue statutes and rules Section 1, Rule
73 of the Revised Rules of Court is of such nature residence rather
than domicile is the significant factor. Even where the statute uses the
word domicile still it is construed as meaning residence and not domicile
in the technical sense. Some cases make a distinction between the
terms residence and domicile but as generally used in statutes fixing
venue, the terms are synonymous, and convey the same meaning as
the term inhabitant. In other words, resides should be viewed or
understood in its popular sense, meaning, the personal, actual or
physical habitation of a person, actual residence or place of
abode. It signifies physical presence in a place and actual stay
thereat. In this popular sense, the term means merely residence, that
is, personal residence, not legal residence or domicile. Residence
simply requires bodily presence as an inhabitant in a given place, while
domicile requires bodily presence in that place and also an intention to
make it ones domicile. No particular length of time of residence is
required though; however, the residence must be more than
temporary.[41] (Emphasis supplied)

It is incorrect for petitioners to argue that residence, for purposes of fixing


the venue of the settlement of the estate of Felicisimo, is synonymous with
domicile. The rulings in Nuval and Romualdez are inapplicable to the instant case
because they involve election cases. Needless to say, there is a distinction between
residence for purposes of election laws and residence for purposes of fixing the
venue of actions. In election cases, residence and domicile are treated as
synonymous terms, that is, the fixed permanent residence to which when absent,
one has the intention of returning.[42] However, for purposes of fixing venue under
the Rules of Court, the residence of a person is his personal, actual or physical
habitation, or actual residence or place of abode, which may not necessarily be his
legal residence or domicile provided he resides therein with continuity and
consistency.[43] Hence, it is possible that a person may have his residence in one
place and domicile in another.

In the instant case, while petitioners established that Felicisimo was domiciled
in Sta. Cruz, Laguna, respondent proved that he also maintained a residence in
Alabang, Muntinlupa from 1982 up to the time of his death. Respondent submitted
in evidence the Deed of Absolute Sale[44] dated January 5, 1983 showing that the
deceased purchased the aforesaid property. She also presented billing
statements[45] from the Philippine Heart Center and Chinese General Hospital for
the period August to December 1992 indicating the address of Felicisimo at 100
San Juanico, Ayala Alabang, Muntinlupa. Respondent also presented proof of
membership of the deceased in the Ayala Alabang Village Association[46] and Ayala
Country Club, Inc.,[47] letter-envelopes[48] from 1988 to 1990 sent by the
deceaseds children to him at his Alabang address, and the deceaseds calling
cards[49] stating that his home/city address is at 100 San Juanico, Ayala Alabang
Village, Muntinlupa while his office/provincial address is in Provincial Capitol, Sta.
Cruz, Laguna.

From the foregoing, we find that Felicisimo was a resident of Alabang,


Muntinlupa for purposes of fixing the venue of the settlement of his
estate. Consequently, the subject petition for letters of administration was validly
filed in the Regional Trial Court[50] which has territorial jurisdiction over Alabang,
Muntinlupa. The subject petition was filed on December 17, 1993. At that time,
Muntinlupa was still a municipality and the branches of the Regional Trial Court of
the National Capital Judicial Region which had territorial jurisdiction over
Muntinlupa were then seated in Makati City as per Supreme Court Administrative
Order No. 3.[51] Thus, the subject petition was validly filed before
the Regional Trial Court of Makati City.

Anent the issue of respondent Felicidads legal personality to file the petition
for letters of administration, we must first resolve the issue of whether a Filipino
who is divorced by his alien spouse abroad may validly remarry under the Civil
Code, considering that Felicidads marriage to Felicisimo was solemnized on June
20, 1974, or before the Family Code took effect on August 3, 1988. In resolving
this issue, we need not retroactively apply the provisions of the Family Code,
particularly Art. 26, par. (2) considering that there is sufficient jurisprudential basis
allowing us to rule in the affirmative.

The case of Van Dorn v. Romillo, Jr.[52] involved a marriage between a


foreigner and his Filipino wife, which marriage was subsequently dissolved through
a divorce obtained abroad by the latter. Claiming that the divorce was not valid
under Philippine law, the alien spouse alleged that his interest in the properties
from their conjugal partnership should be protected. The Court, however,
recognized the validity of the divorce and held that the alien spouse had no interest
in the properties acquired by the Filipino wife after the divorce. Thus:

In this case, the divorce in Nevada released private respondent from the
marriage from the standards of American law, under which divorce
dissolves the marriage. As stated by the Federal Supreme Court of the
United States in Atherton vs. Atherton, 45 L. Ed. 794, 799:

The purpose and effect of a decree of divorce from the bond


of matrimony by a competent jurisdiction are to change the
existing status or domestic relation of husband and wife, and
to free them both from the bond. The marriage tie, when
thus severed as to one party, ceases to bind either. A
husband without a wife, or a wife without a husband, is
unknown to the law. When the law provides, in the nature of
a penalty, that the guilty party shall not marry again, that
party, as well as the other, is still absolutely freed from the
bond of the former marriage.

Thus, pursuant to his national law, private respondent is no longer


the husband of petitioner. He would have no standing to sue in the case
below as petitioners husband entitled to exercise control over conjugal
assets. As he is bound by the Decision of his own countrys Court, which
validly exercised jurisdiction over him, and whose decision he does not
repudiate, he is estopped by his own representation before said Court
from asserting his right over the alleged conjugal property.[53]

As to the effect of the divorce on the Filipino wife, the Court ruled that she
should no longer be considered married to the alien spouse. Further, she should
not be required to perform her marital duties and obligations. It held:

To maintain, as private respondent does, that, under our


laws, petitioner has to be considered still married to private
respondent and still subject to a wife's obligations under Article
109, et. seq. of the Civil Code cannot be just. Petitioner should not
be obliged to live together with, observe respect and fidelity, and render
support to private respondent. The latter should not continue to be one
of her heirs with possible rights to conjugal property. She should not
be discriminated against in her own country if the ends of justice
are to be served.[54] (Emphasis added)

This principle was thereafter applied in Pilapil v. Ibay-Somera[55] where the Court
recognized the validity of a divorce obtained abroad. In the said case, it was held
that the alien spouse is not a proper party in filing the adultery suit against his
Filipino wife. The Court stated that the severance of the marital bond had the effect
of dissociating the former spouses from each other, hence the actuations of one
would not affect or cast obloquy on the other.[56]

Likewise, in Quita v. Court of Appeals,[57] the Court stated that where a


Filipino is divorced by his naturalized foreign spouse, the ruling in Van
Dorn applies.[58]Although decided on December 22, 1998, the divorce in the said
case was obtained in 1954 when the Civil Code provisions were still in effect.

The significance of the Van Dorn case to the development of limited


recognition of divorce in the Philippines cannot be denied. The ruling has long been
interpreted as severing marital ties between parties in a mixed marriage and
capacitating the Filipino spouse to remarry as a necessary consequence of
upholding the validity of a divorce obtained abroad by the alien spouse. In his
treatise, Dr. Arturo M. Tolentino cited Van Dorn stating that if the foreigner obtains
a valid foreign divorce, the Filipino spouse shall have capacity to remarry under
Philippine law.[59] In Garcia v. Recio,[60] the Court likewise cited the aforementioned
case in relation to Article 26.[61]

In the recent case of Republic v. Orbecido III,[62] the historical background


and legislative intent behind paragraph 2, Article 26 of the Family Code were
discussed, to wit:
Brief Historical Background

On July 6, 1987, then President Corazon Aquino signed into law


Executive Order No. 209, otherwise known as the Family Code, which
took effect on August 3, 1988. Article 26 thereof states:
All marriages solemnized outside the Philippines in accordance
with the laws in force in the country where they were solemnized, and
valid there as such, shall also be valid in this country, except those
prohibited under Articles 35, 37, and 38.
On July 17, 1987, shortly after the signing of the original Family
Code, Executive Order No. 227 was likewise signed into law, amending
Articles 26, 36, and 39 of the Family Code. A second paragraph was
added to Article 26. As so amended, it now provides:
ART. 26. All marriages solemnized outside the Philippines in
accordance with the laws in force in the country where they were
solemnized, and valid there as such, shall also be valid in this country,
except those prohibited under Articles 35(1), (4), (5) and (6), 36, 37
and 38.

Where a marriage between a Filipino citizen and a foreigner is


validly celebrated and a divorce is thereafter validly obtained abroad by
the alien spouse capacitating him or her to remarry, the Filipino spouse
shall have capacity to remarry under Philippine law. (Emphasis supplied)
xxxx

Legislative Intent
Records of the proceedings of the Family Code deliberations
showed that the intent of Paragraph 2 of Article 26, according to Judge
Alicia Sempio-Diy, a member of the Civil Code Revision Committee, is
to avoid the absurd situation where the Filipino spouse remains married
to the alien spouse who, after obtaining a divorce, is no longer married
to the Filipino spouse.

Interestingly, Paragraph 2 of Article 26 traces its origin to


the 1985 case of Van Dorn v. Romillo, Jr. The Van Dorn case
involved a marriage between a Filipino citizen and a
foreigner. The Court held therein that a divorce decree validly
obtained by the alien spouse is valid in the Philippines, and
consequently, the Filipino spouse is capacitated to remarry
under Philippine law.[63] (Emphasis added)

As such, the Van Dorn case is sufficient basis in resolving a situation where a
divorce is validly obtained abroad by the alien spouse. With the enactment of the
Family Code and paragraph 2, Article 26 thereof, our lawmakers codified the law
already established through judicial precedent.

Indeed, when the object of a marriage is defeated by rendering its


continuance intolerable to one of the parties and productive of no possible good to
the community, relief in some way should be obtainable.[64] Marriage, being a
mutual and shared commitment between two parties, cannot possibly be
productive of any good to the society where one is considered released from the
marital bond while the other remains bound to it. Such is the state of affairs where
the alien spouse obtains a valid divorce abroad against the Filipino spouse, as in
this case.

Petitioners cite Articles 15[65] and 17[66] of the Civil Code in stating that the
divorce is void under Philippine law insofar as Filipinos are concerned. However, in
light of this Courts rulings in the cases discussed above, the Filipino spouse should
not be discriminated against in his own country if the ends of justice are to be
served.[67] In Alonzo v. Intermediate Appellate Court,[68] the Court stated:

But as has also been aptly observed, we test a law by its results;
and likewise, we may add, by its purposes. It is a cardinal rule that, in
seeking the meaning of the law, the first concern of the judge should be
to discover in its provisions the intent of the lawmaker. Unquestionably,
the law should never be interpreted in such a way as to cause injustice
as this is never within the legislative intent. An indispensable part of
that intent, in fact, for we presume the good motives of the legislature,
is to render justice.

Thus, we interpret and apply the law not independently of but in


consonance with justice. Law and justice are inseparable, and we must
keep them so. To be sure, there are some laws that, while generally
valid, may seem arbitrary when applied in a particular case because of
its peculiar circumstances. In such a situation, we are not bound,
because only of our nature and functions, to apply them just the same,
in slavish obedience to their language. What we do instead is find a
balance between the word and the will, that justice may be done even
as the law is obeyed.

As judges, we are not automatons. We do not and must not


unfeelingly apply the law as it is worded, yielding like robots to the literal
command without regard to its cause and consequence. Courts are apt
to err by sticking too closely to the words of a law, so we are warned,
by Justice Holmes again, where these words import a policy that goes
beyond them.

xxxx

More than twenty centuries ago, Justinian defined justice as the


constant and perpetual wish to render every one his due. That wish
continues to motivate this Court when it assesses the facts and the law
in every case brought to it for decision. Justice is always an essential
ingredient of its decisions. Thus when the facts warrants, we interpret
the law in a way that will render justice, presuming that it was the
intention of the lawmaker, to begin with, that the law be dispensed with
justice.[69]

Applying the above doctrine in the instant case, the divorce decree allegedly
obtained by Merry Lee which absolutely allowed Felicisimo to remarry, would have
vested Felicidad with the legal personality to file the present petition as Felicisimos
surviving spouse. However, the records show that there is insufficient evidence to
prove the validity of the divorce obtained by Merry Lee as well as the marriage of
respondent and Felicisimo under the laws of the U.S.A. In Garcia v. Recio,[70] the
Court laid down the specific guidelines for pleading and proving foreign law and
divorce judgments. It held that presentation solely of the divorce decree is
insufficient and that proof of its authenticity and due execution must be
presented. Under Sections 24 and 25 of Rule 132, a writing or document may be
proven as a public or official record of a foreign country by either (1) an official
publication or (2) a copy thereof attested by the officer having legal custody of the
document. If the record is not kept in the Philippines, such copy must be (a)
accompanied by a certificate issued by the proper diplomatic or consular officer in
the Philippine foreign service stationed in the foreign country in which the record is
kept and (b) authenticated by the seal of his office.[71]

With regard to respondents marriage to Felicisimo allegedly solemnized


in California, U.S.A., she submitted photocopies of the Marriage Certificate and the
annotated text[72] of the Family Law Act of California which purportedly show that
their marriage was done in accordance with the said law. As stated
in Garcia, however, the Court cannot take judicial notice of foreign laws as they
must be alleged and proved.[73]

Therefore, this case should be remanded to the trial court for further reception
of evidence on the divorce decree obtained by Merry Lee and the marriage of
respondent and Felicisimo.

Even assuming that Felicisimo was not capacitated to marry respondent in


1974, nevertheless, we find that the latter has the legal personality to file the
subject petition for letters of administration, as she may be considered the co-
owner of Felicisimo as regards the properties that were acquired through their joint
efforts during their cohabitation.

Section 6,[74] Rule 78 of the Rules of Court states that letters of administration
may be granted to the surviving spouse of the decedent. However, Section 2, Rule
79 thereof also provides in part:

SEC. 2. Contents of petition for letters of administration. A petition


for letters of administration must be filed by an interested person and
must show, as far as known to the petitioner: x x x.

An interested person has been defined as one who would be benefited by the
estate, such as an heir, or one who has a claim against the estate, such as a
creditor. The interest must be material and direct, and not merely indirect or
contingent.[75]

In the instant case, respondent would qualify as an interested person who


has a direct interest in the estate of Felicisimo by virtue of their cohabitation, the
existence of which was not denied by petitioners. If she proves the validity of the
divorce and Felicisimos capacity to remarry, but fails to prove that her marriage
with him was validly performed under the laws of the U.S.A., then she may be
considered as a co-owner under Article 144[76] of the Civil Code. This provision
governs the property relations between parties who live together as husband and
wife without the benefit of marriage, or their marriage is void from the beginning. It
provides that the property acquired by either or both of them through their work
or industry or their wages and salaries shall be governed by the rules on co-
ownership. In a co-ownership, it is not necessary that the property be acquired
through their joint labor, efforts and industry. Any property acquired during the
union is prima facie presumed to have been obtained through their joint
efforts. Hence, the portions belonging to the co-owners shall be presumed equal,
unless the contrary is proven.[77]

Meanwhile, if respondent fails to prove the validity of both the divorce and
the marriage, the applicable provision would be Article 148 of the Family Code
which has filled the hiatus in Article 144 of the Civil Code by expressly regulating
the property relations of couples living together as husband and wife but are
incapacitated to marry.[78] In Saguid v. Court of Appeals,[79] we held that even if
the cohabitation or the acquisition of property occurred before the Family Code
took effect, Article 148 governs.[80] The Court described the property regime under
this provision as follows:

The regime of limited co-ownership of property governing the


union of parties who are not legally capacitated to marry each other,
but who nonetheless live together as husband and wife, applies to
properties acquired during said cohabitation in proportion to their
respective contributions. Co-ownership will only be up to the extent of
the proven actual contribution of money, property or industry. Absent
proof of the extent thereof, their contributions and corresponding shares
shall be presumed to be equal.
xxxx

In the cases of Agapay v. Palang, and Tumlos v. Fernandez, which


involved the issue of co-ownership of properties acquired by the parties
to a bigamous marriage and an adulterous relationship, respectively, we
ruled that proof of actual contribution in the acquisition of the property
is essential. x x x

As in other civil cases, the burden of proof rests upon the party
who, as determined by the pleadings or the nature of the case, asserts
an affirmative issue. Contentions must be proved by competent
evidence and reliance must be had on the strength of the partys own
evidence and not upon the weakness of the opponents defense. x x x[81]

In view of the foregoing, we find that respondents legal capacity to file the
subject petition for letters of administration may arise from her status as the
surviving wife of Felicisimo or as his co-owner under Article 144 of the Civil Code
or Article 148 of the Family Code.

WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals


reinstating and affirming the February 28, 1994 Order of the Regional Trial Court
which denied petitioners motion to dismiss and its October 24, 1994 Order which
dismissed petitioners motion for reconsideration is AFFIRMED. Let this case
be REMANDED to the trial court for further proceedings. SO ORDERED.
G.R. No. L-19671 November 29, 1965

PASTOR B. TENCHAVEZ, plaintiff-appellant,


vs.
VICENTA F. ESCAÑO, ET AL., defendants-appellees.

I. V. Binamira & F. B. Barria for plaintiff-appellant.


Jalandoni & Jarnir for defendants-appellees.

REYES, J.B.L., J.:

Direct appeal, on factual and legal questions, from the judgment of the Court of
First Instance of Cebu, in its Civil Case No. R-4177, denying the claim of the
plaintiff-appellant, Pastor B. Tenchavez, for legal separation and one million pesos
in damages against his wife and parents-in-law, the defendants-appellees, Vicente,
Mamerto and Mena,1 all surnamed "Escaño," respectively.2

The facts, supported by the evidence of record, are the following:

Missing her late afternoon classes on 24 February 1948 in the University of San
Carlos, Cebu City, where she was then enrolled as a second year student of
commerce, Vicenta Escaño, 27 years of age (scion of a well-to-do and socially
prominent Filipino family of Spanish ancestry and a "sheltered colegiala"),
exchanged marriage vows with Pastor Tenchavez, 32 years of age, an engineer,
ex-army officer and of undistinguished stock, without the knowledge of her parents,
before a Catholic chaplain, Lt. Moises Lavares, in the house of one Juan Alburo in
the said city. The marriage was the culmination of a previous love affair and was
duly registered with the local civil register.

Vicenta's letters to Pastor, and his to her, before the marriage, indicate that the
couple were deeply in love. Together with a friend, Pacita Noel, their matchmaker
and go-between, they had planned out their marital future whereby Pacita would
be the governess of their first-born; they started saving money in a piggy bank. A
few weeks before their secret marriage, their engagement was broken; Vicenta
returned the engagement ring and accepted another suitor, Joseling Lao. Her love
for Pastor beckoned; she pleaded for his return, and they reconciled. This time they
planned to get married and then elope. To facilitate the elopement, Vicenta had
brought some of her clothes to the room of Pacita Noel in St. Mary's Hall, which
was their usual trysting place.

Although planned for the midnight following their marriage, the elopement did not,
however, materialize because when Vicente went back to her classes after the
marriage, her mother, who got wind of the intended nuptials, was already waiting
for her at the college. Vicenta was taken home where she admitted that she had
already married Pastor. Mamerto and Mena Escaño were surprised, because Pastor
never asked for the hand of Vicente, and were disgusted because of the great
scandal that the clandestine marriage would provoke (t.s.n., vol. III, pp. 1105-06).
The following morning, the Escaño spouses sought priestly advice. Father Reynes
suggested a recelebration to validate what he believed to be an invalid marriage,
from the standpoint of the Church, due to the lack of authority from the Archbishop
or the parish priest for the officiating chaplain to celebrate the marriage. The
recelebration did not take place, because on 26 February 1948 Mamerto Escaño
was handed by a maid, whose name he claims he does not remember, a letter
purportedly coming from San Carlos college students and disclosing an amorous
relationship between Pastor Tenchavez and Pacita Noel; Vicenta translated the
letter to her father, and thereafter would not agree to a new marriage. Vicenta and
Pastor met that day in the house of Mrs. Pilar Mendezona. Thereafter, Vicenta
continued living with her parents while Pastor returned to his job in Manila. Her
letter of 22 March 1948 (Exh. "M"), while still solicitous of her husband's welfare,
was not as endearing as her previous letters when their love was aflame.

Vicenta was bred in Catholic ways but is of a changeable disposition, and Pastor
knew it. She fondly accepted her being called a "jellyfish." She was not prevented
by her parents from communicating with Pastor (Exh. "1-Escaño"), but her letters
became less frequent as the days passed. As of June, 1948 the newlyweds were
already estranged (Exh. "2-Escaño"). Vicenta had gone to Jimenez, Misamis
Occidental, to escape from the scandal that her marriage stirred in Cebu society.
There, a lawyer filed for her a petition, drafted by then Senator Emmanuel Pelaez,
to annul her marriage. She did not sign the petition (Exh. "B-5"). The case was
dismissed without prejudice because of her non-appearance at the hearing (Exh.
"B-4").

On 24 June 1950, without informing her husband, she applied for a passport,
indicating in her application that she was single, that her purpose was to study,
and she was domiciled in Cebu City, and that she intended to return after two
years. The application was approved, and she left for the United States. On 22
August 1950, she filed a verified complaint for divorce against the herein plaintiff
in the Second Judicial District Court of the State of Nevada in and for the County
of Washoe, on the ground of "extreme cruelty, entirely mental in character." On 21
October 1950, a decree of divorce, "final and absolute", was issued in open court
by the said tribunal.

In 1951 Mamerto and Mena Escaño filed a petition with the Archbishop of Cebu to
annul their daughter's marriage to Pastor (Exh. "D"). On 10 September 1954,
Vicenta sought papal dispensation of her marriage (Exh. "D"-2).

On 13 September 1954, Vicenta married an American, Russell Leo Moran, in


Nevada. She now lives with him in California, and, by him, has begotten children.
She acquired American citizenship on 8 August 1958.

But on 30 July 1955, Tenchavez had initiated the proceedings at bar by a complaint
in the Court of First Instance of Cebu, and amended on 31 May 1956, against
Vicenta F. Escaño, her parents, Mamerto and Mena Escaño, whom he charged with
having dissuaded and discouraged Vicenta from joining her husband, and alienating
her affections, and against the Roman Catholic Church, for having, through its
Diocesan Tribunal, decreed the annulment of the marriage, and asked for legal
separation and one million pesos in damages. Vicenta claimed a valid divorce from
plaintiff and an equally valid marriage to her present husband, Russell Leo Moran;
while her parents denied that they had in any way influenced their daughter's acts,
and counterclaimed for moral damages.

The appealed judgment did not decree a legal separation, but freed the plaintiff
from supporting his wife and to acquire property to the exclusion of his wife. It
allowed the counterclaim of Mamerto Escaño and Mena Escaño for moral and
exemplary damages and attorney's fees against the plaintiff-appellant, to the
extent of P45,000.00, and plaintiff resorted directly to this Court.

The appellant ascribes, as errors of the trial court, the following:

1. In not declaring legal separation; in not holding defendant Vicenta F.


Escaño liable for damages and in dismissing the complaint;.

2. In not holding the defendant parents Mamerto Escano and the heirs of
Doña Mena Escaño liable for damages;.
3 In holding the plaintiff liable for and requiring him to pay the damages to
the defendant parents on their counterclaims; and.

4. In dismissing the complaint and in denying the relief sought by the plaintiff.

That on 24 February 1948 the plaintiff-appellant, Pastor Tenchavez, and the


defendant-appellee, Vicenta Escaño, were validly married to each other, from the
standpoint of our civil law, is clearly established by the record before us. Both
parties were then above the age of majority, and otherwise qualified; and both
consented to the marriage, which was performed by a Catholic priest (army
chaplain Lavares) in the presence of competent witnesses. It is nowhere shown
that said priest was not duly authorized under civil law to solemnize marriages.

The chaplain's alleged lack of ecclesiastical authorization from the parish priest and
the Ordinary, as required by Canon law, is irrelevant in our civil law, not only
because of the separation of Church and State but also because Act 3613 of the
Philippine Legislature (which was the marriage law in force at the time) expressly
provided that —

SEC. 1. Essential requisites. Essential requisites for marriage are the legal
capacity of the contracting parties and consent. (Emphasis supplied)

The actual authority of the solemnizing officer was thus only a formal requirement,
and, therefore, not essential to give the marriage civil effects, 3 and this is
emphasized by section 27 of said marriage act, which provided the following:

SEC. 27. Failure to comply with formal requirements. No marriage shall be


declared invalid because of the absence of one or several of the formal
requirements of this Act if, when it was performed, the spouses or one of
them believed in good faith that the person who solemnized the marriage was
actually empowered to do so, and that the marriage was perfectly legal.

The good faith of all the parties to the marriage (and hence the validity of their
marriage) will be presumed until the contrary is positively proved (Lao vs. Dee Tim,
45 Phil. 739, 745; Francisco vs. Jason, 60 Phil. 442, 448). It is well to note here
that in the case at bar, doubts as to the authority of the solemnizing priest arose
only after the marriage, when Vicenta's parents consulted Father Reynes and the
archbishop of Cebu. Moreover, the very act of Vicenta in abandoning her original
action for annulment and subsequently suing for divorce implies an admission that
her marriage to plaintiff was valid and binding.

Defendant Vicenta Escaño argues that when she contracted the marriage she was
under the undue influence of Pacita Noel, whom she charges to have been in
conspiracy with appellant Tenchavez. Even granting, for argument's sake, the truth
of that contention, and assuming that Vicenta's consent was vitiated by fraud and
undue influence, such vices did not render her marriage ab initio void, but merely
voidable, and the marriage remained valid until annulled by a competent civil court.
This was never done, and admittedly, Vicenta's suit for annulment in the Court of
First Instance of Misamis was dismissed for non-prosecution.

It is equally clear from the record that the valid marriage between Pastor Tenchavez
and Vicenta Escaño remained subsisting and undissolved under Philippine law,
notwithstanding the decree of absolute divorce that the wife sought and obtained
on 21 October 1950 from the Second Judicial District Court of Washoe County,
State of Nevada, on grounds of "extreme cruelty, entirely mental in character." At
the time the divorce decree was issued, Vicenta Escaño, like her husband, was still
a Filipino citizen.4 She was then subject to Philippine law, and Article 15 of the Civil
Code of the Philippines (Rep. Act No. 386), already in force at the time, expressly
provided:

Laws relating to family rights and duties or to the status, condition and legal
capacity of persons are binding upon the citizens of the Philippines, even
though living abroad.

The Civil Code of the Philippines, now in force, does not admit absolute divorce, quo
ad vinculo matrimonii; and in fact does not even use that term, to further
emphasize its restrictive policy on the matter, in contrast to the preceding
legislation that admitted absolute divorce on grounds of adultery of the wife or
concubinage of the husband (Act 2710). Instead of divorce, the present Civil Code
only provides for legal separation (Title IV, Book 1, Arts. 97 to 108), and, even in
that case, it expressly prescribes that "the marriage bonds shall not be severed"
(Art. 106, subpar. 1).

For the Philippine courts to recognize and give recognition or effect to a foreign
decree of absolute divorce betiveen Filipino citizens could be a patent violation of
the declared public policy of the state, specially in view of the third paragraph of
Article 17 of the Civil Code that prescribes the following:

Prohibitive laws concerning persons, their acts or property, and those which
have for their object public order, policy and good customs, shall not be
rendered ineffective by laws or judgments promulgated, or by determinations
or conventions agreed upon in a foreign country.

Even more, the grant of effectivity in this jurisdiction to such foreign divorce
decrees would, in effect, give rise to an irritating and scandalous discrimination in
favor of wealthy citizens, to the detriment of those members of our polity whose
means do not permit them to sojourn abroad and obtain absolute divorces outside
the Philippines.

From this point of view, it is irrelevant that appellant Pastor Tenchavez should have
appeared in the Nevada divorce court. Primarily because the policy of our law
cannot be nullified by acts of private parties (Civil Code,Art. 17, jam quot.); and
additionally, because the mere appearance of a non-resident consort cannot confer
jurisdiction where the court originally had none (Area vs. Javier, 95 Phil. 579).

From the preceding facts and considerations, there flows as a necessary


consequence that in this jurisdiction Vicenta Escaño's divorce and second marriage
are not entitled to recognition as valid; for her previous union to plaintiff Tenchavez
must be declared to be existent and undissolved. It follows, likewise, that her
refusal to perform her wifely duties, and her denial of consortium and her desertion
of her husband constitute in law a wrong caused through her fault, for which the
husband is entitled to the corresponding indemnity (Civil Code, Art. 2176). Neither
an unsubstantiated charge of deceit nor an anonymous letter charging immorality
against the husband constitute, contrary to her claim, adequate excuse. Wherefore,
her marriage and cohabitation with Russell Leo Moran is technically "intercourse
with a person not her husband" from the standpoint of Philippine Law, and entitles
plaintiff-appellant Tenchavez to a decree of "legal separation under our law, on the
basis of adultery" (Revised Penal Code, Art. 333).

The foregoing conclusions as to the untoward effect of a marriage after an invalid


divorce are in accord with the previous doctrines and rulings of this court on the
subject, particularly those that were rendered under our laws prior to the approval
of the absolute divorce act (Act 2710 of the Philippine Legislature). As a matter of
legal history, our statutes did not recognize divorces a vinculo before 1917, when
Act 2710 became effective; and the present Civil Code of the Philippines, in
disregarding absolute divorces, in effect merely reverted to the policies on the
subject prevailing before Act 2710. The rulings, therefore, under the Civil Code of
1889, prior to the Act above-mentioned, are now, fully applicable. Of these, the
decision in Ramirez vs. Gmur, 42 Phil. 855, is of particular interest. Said this Court
in that case:

As the divorce granted by the French Court must be ignored, it results that
the marriage of Dr. Mory and Leona Castro, celebrated in London in 1905,
could not legalize their relations; and the circumstance that they afterwards
passed for husband and wife in Switzerland until her death is wholly without
legal significance. The claims of the very children to participate in the estate
of Samuel Bishop must therefore be rejected. The right to inherit is limited to
legitimate, legitimated and acknowledged natural children. The children of
adulterous relations are wholly excluded. The word "descendants" as used in
Article 941 of the Civil Code cannot be interpreted to include illegitimates born
of adulterous relations. (Emphasis supplied)

Except for the fact that the successional rights of the children, begotten from
Vicenta's marriage to Leo Moran after the invalid divorce, are not involved in the
case at bar, the Gmur case is authority for the proposition that such union is
adulterous in this jurisdiction, and, therefore, justifies an action for legal separation
on the part of the innocent consort of the first marriage, that stands undissolved in
Philippine law. In not so declaring, the trial court committed error.

True it is that our ruling gives rise to anomalous situations where the status of a
person (whether divorced or not) would depend on the territory where the question
arises. Anomalies of this kind are not new in the Philippines, and the answer to
them was given in Barretto vs. Gonzales, 58 Phil. 667:

The hardship of the existing divorce laws in the Philippine Islands are well
known to the members of the Legislature. It is the duty of the Courts to
enforce the laws of divorce as written by Legislature if they are constitutional.
Courts have no right to say that such laws are too strict or too liberal. (p. 72)

The appellant's first assignment of error is, therefore, sustained.

However, the plaintiff-appellant's charge that his wife's parents, Dr. Mamerto
Escaño and his wife, the late Doña Mena Escaño, alienated the affections of their
daughter and influenced her conduct toward her husband are not supported by
credible evidence. The testimony of Pastor Tenchavez about the Escaño's animosity
toward him strikes us to be merely conjecture and exaggeration, and are belied by
Pastor's own letters written before this suit was begun (Exh. "2-Escaño" and
"Vicenta," Rec. on App., pp. 270-274). In these letters he expressly apologized to
the defendants for "misjudging them" and for the "great unhappiness" caused by
his "impulsive blunders" and "sinful pride," "effrontery and audacity" [sic]. Plaintiff
was admitted to the Escaño house to visit and court Vicenta, and the record shows
nothing to prove that he would not have been accepted to marry Vicente had he
openly asked for her hand, as good manners and breeding demanded. Even after
learning of the clandestine marriage, and despite their shock at such unexpected
event, the parents of Vicenta proposed and arranged that the marriage be
recelebrated in strict conformity with the canons of their religion upon advice that
the previous one was canonically defective. If no recelebration of the marriage
ceremony was had it was not due to defendants Mamerto Escaño and his wife, but
to the refusal of Vicenta to proceed with it. That the spouses Escaño did not seek
to compel or induce their daughter to assent to the recelebration but respected her
decision, or that they abided by her resolve, does not constitute in law an alienation
of affections. Neither does the fact that Vicenta's parents sent her money while she
was in the United States; for it was natural that they should not wish their daughter
to live in penury even if they did not concur in her decision to divorce Tenchavez
(27 Am. Jur. 130-132).

There is no evidence that the parents of Vicenta, out of improper motives, aided
and abetted her original suit for annulment, or her subsequent divorce; she appears
to have acted independently, and being of age, she was entitled to judge what was
best for her and ask that her decisions be respected. Her parents, in so doing,
certainly cannot be charged with alienation of affections in the absence of malice
or unworthy motives, which have not been shown, good faith being always
presumed until the contrary is proved.

SEC. 529. Liability of Parents, Guardians or Kin. — The law distinguishes


between the right of a parent to interest himself in the marital affairs of his
child and the absence of rights in a stranger to intermeddle in such affairs.
However, such distinction between the liability of parents and that of
strangers is only in regard to what will justify interference. A parent isliable
for alienation of affections resulting from his own malicious conduct, as where
he wrongfully entices his son or daughter to leave his or her spouse, but he
is not liable unless he acts maliciously, without justification and from
unworthy motives. He is not liable where he acts and advises his child in good
faith with respect to his child's marital relations in the interest of his child as
he sees it, the marriage of his child not terminating his right and liberty to
interest himself in, and be extremely solicitous for, his child's welfare and
happiness, even where his conduct and advice suggest or result in the
separation of the spouses or the obtaining of a divorce or annulment, or where
he acts under mistake or misinformation, or where his advice or interference
are indiscreet or unfortunate, although it has been held that the parent is
liable for consequences resulting from recklessness. He may in good faith take
his child into his home and afford him or her protection and support, so long
as he has not maliciously enticed his child away, or does not maliciously entice
or cause him or her to stay away, from his or her spouse. This rule has more
frequently been applied in the case of advice given to a married daughter, but
it is equally applicable in the case of advice given to a son.

Plaintiff Tenchavez, in falsely charging Vicenta's aged parents with racial or social
discrimination and with having exerted efforts and pressured her to seek annulment
and divorce, unquestionably caused them unrest and anxiety, entitling them to
recover damages. While this suit may not have been impelled by actual malice, the
charges were certainly reckless in the face of the proven facts and circumstances.
Court actions are not established for parties to give vent to their prejudices or
spleen.

In the assessment of the moral damages recoverable by appellant Pastor


Tenchavez from defendant Vicente Escaño, it is proper to take into account, against
his patently unreasonable claim for a million pesos in damages, that (a) the
marriage was celebrated in secret, and its failure was not characterized by publicity
or undue humiliation on appellant's part; (b) that the parties never lived together;
and (c) that there is evidence that appellant had originally agreed to the annulment
of the marriage, although such a promise was legally invalid, being against public
policy (cf. Art. 88, Civ. Code). While appellant is unable to remarry under our law,
this fact is a consequence of the indissoluble character of the union that appellant
entered into voluntarily and with open eyes rather than of her divorce and her
second marriage. All told, we are of the opinion that appellant should recover
P25,000 only by way of moral damages and attorney's fees.
With regard to the P45,000 damages awarded to the defendants, Dr. Mamerto
Escaño and Mena Escaño, by the court below, we opine that the same are
excessive. While the filing of this unfounded suit must have wounded said
defendants' feelings and caused them anxiety, the same could in no way have
seriously injured their reputation, or otherwise prejudiced them, lawsuits having
become a common occurrence in present society. What is important, and has been
correctly established in the decision of the court below, is that said defendants were
not guilty of any improper conduct in the whole deplorable affair. This Court,
therefore, reduces the damages awarded to P5,000 only.

Summing up, the Court rules:

(1) That a foreign divorce between Filipino citizens, sought and decreed after the
effectivity of the present Civil Code (Rep. Act 386), is not entitled to recognition as
valid in this jurisdiction; and neither is the marriage contracted with another party
by the divorced consort, subsequently to the foreign decree of divorce, entitled to
validity in the country;

(2) That the remarriage of divorced wife and her co-habitation with a person other
than the lawful husband entitle the latter to a decree of legal separation
conformably to Philippine law;

(3) That the desertion and securing of an invalid divorce decree by one consort
entitles the other to recover damages;

(4) That an action for alienation of affections against the parents of one consort
does not lie in the absence of proof of malice or unworthy motives on their part.

WHEREFORE, the decision under appeal is hereby modified as follows;

(1) Adjudging plaintiff-appellant Pastor Tenchavez entitled to a decree of legal


separation from defendant Vicenta F. Escaño;

(2) Sentencing defendant-appellee Vicenta Escaño to pay plaintiff-appellant


Tenchavez the amount of P25,000 for damages and attorneys' fees;

(3) Sentencing appellant Pastor Tenchavez to pay the appellee, Mamerto Escaño
and the estate of his wife, the deceased Mena Escaño, P5,000 by way of damages
and attorneys' fees.

Neither party to recover costs.


G.R. No. 81262 August 25, 1989

GLOBE MACKAY CABLE AND RADIO CORP., and HERBERT C.


HENDRY, petitioners,
vs.
THE HONORABLE COURT OF APPEALS and RESTITUTO M.
TOBIAS, respondents.

Atencia & Arias Law Offices for petitioners.

Romulo C. Felizmena for private respondent.

CORTES, J.:

Private respondent Restituto M. Tobias was employed by petitioner Globe Mackay


Cable and Radio Corporation (GLOBE MACKAY) in a dual capacity as a purchasing
agent and administrative assistant to the engineering operations manager. In
1972, GLOBE MACKAY discovered fictitious purchases and other fraudulent
transactions for which it lost several thousands of pesos.

According to private respondent it was he who actually discovered the anomalies


and reported them on November 10, 1972 to his immediate superior Eduardo T.
Ferraren and to petitioner Herbert C. Hendry who was then the Executive Vice-
President and General Manager of GLOBE MACKAY.

On November 11, 1972, one day after private respondent Tobias made the report,
petitioner Hendry confronted him by stating that he was the number one suspect,
and ordered him to take a one week forced leave, not to communicate with the
office, to leave his table drawers open, and to leave the office keys.

On November 20, 1972, when private respondent Tobias returned to work after the
forced leave, petitioner Hendry went up to him and called him a "crook" and a
"swindler." Tobias was then ordered to take a lie detector test. He was also
instructed to submit specimen of his handwriting, signature, and initials for
examination by the police investigators to determine his complicity in the
anomalies.

On December 6,1972, the Manila police investigators submitted a laboratory crime


report (Exh. "A") clearing private respondent of participation in the anomalies.

Not satisfied with the police report, petitioners hired a private investigator, retired
Col. Jose G. Fernandez, who on December 10, 1972, submitted a report (Exh. "2")
finding Tobias guilty. This report however expressly stated that further
investigation was still to be conducted.

Nevertheless, on December 12, 1972, petitioner Hendry issued a memorandum


suspending Tobias from work preparatory to the filing of criminal charges against
him.

On December 19,1972, Lt. Dioscoro V. Tagle, Metro Manila Police Chief Document
Examiner, after investigating other documents pertaining to the alleged anomalous
transactions, submitted a second laboratory crime report (Exh. "B") reiterating his
previous finding that the handwritings, signatures, and initials appearing in the
checks and other documents involved in the fraudulent transactions were not those
of Tobias. The lie detector tests conducted on Tobias also yielded negative results.
Notwithstanding the two police reports exculpating Tobias from the anomalies and
the fact that the report of the private investigator, was, by its own terms, not yet
complete, petitioners filed with the City Fiscal of Manila a complaint for estafa
through falsification of commercial documents, later amended to just estafa.
Subsequently five other criminal complaints were filed against Tobias, four of which
were for estafa through Falsification of commercial document while the fifth was
for of Article 290 of' the Revised Penal Code (Discovering Secrets Through Seizure
of Correspondence).lâwphî1.ñèt Two of these complaints were refiled with the
Judge Advocate General's Office, which however, remanded them to the fiscal's
office. All of the six criminal complaints were dismissed by the fiscal. Petitioners
appealed four of the fiscal's resolutions dismissing the criminal complaints with the
Secretary of Justice, who, however, affirmed their dismissal.

In the meantime, on January 17, 1973, Tobias received a notice (Exh. "F") from
petitioners that his employment has been terminated effective December 13, 1972.
Whereupon, Tobias filed a complaint for illegal dismissal. The labor arbiter
dismissed the complaint. On appeal, the National Labor Relations Commission
(NLRC) reversed the labor arbiter's decision. However, the Secretary of Labor,
acting on petitioners' appeal from the NLRC ruling, reinstated the labor arbiter's
decision. Tobias appealed the Secretary of Labor's order with the Office of the
President. During the pendency of the appeal with said office, petitioners and
private respondent Tobias entered into a compromise agreement regarding the
latter's complaint for illegal dismissal.

Unemployed, Tobias sought employment with the Republic Telephone Company


(RETELCO). However, petitioner Hendry, without being asked by RETELCO, wrote
a letter to the latter stating that Tobias was dismissed by GLOBE MACKAY due to
dishonesty.

Private respondent Tobias filed a civil case for damages anchored on alleged
unlawful, malicious, oppressive, and abusive acts of petitioners. Petitioner Hendry,
claiming illness, did not testify during the hearings. The Regional Trial Court (RTC)
of Manila, Branch IX, through Judge Manuel T. Reyes rendered judgment in favor
of private respondent by ordering petitioners to pay him eighty thousand pesos
(P80,000.00) as actual damages, two hundred thousand pesos (P200,000.00) as
moral damages, twenty thousand pesos (P20,000.00) as exemplary damages,
thirty thousand pesos (P30,000.00) as attorney's fees, and costs. Petitioners
appealed the RTC decision to the Court of Appeals. On the other hand, Tobias
appealed as to the amount of damages. However, the Court of Appeals, an a
decision dated August 31, 1987 affirmed the RTC decision in toto. Petitioners'
motion for reconsideration having been denied, the instant petition for review
on certiorari was filed.

The main issue in this case is whether or not petitioners are liable for damages to
private respondent.

Petitioners contend that they could not be made liable for damages in the lawful
exercise of their right to dismiss private respondent.

On the other hand, private respondent contends that because of petitioners'


abusive manner in dismissing him as well as for the inhuman treatment he got from
them, the Petitioners must indemnify him for the damage that he had suffered.

One of the more notable innovations of the New Civil Code is the codification of
"some basic principles that are to be observed for the rightful relationship between
human beings and for the stability of the social order." [REPORT ON THE CODE
COMMISSION ON THE PROPOSED CIVIL CODE OF THE PHILIPPINES, p. 39]. The
framers of the Code, seeking to remedy the defect of the old Code which merely
stated the effects of the law, but failed to draw out its spirit, incorporated certain
fundamental precepts which were "designed to indicate certain norms that spring
from the fountain of good conscience" and which were also meant to serve as
"guides for human conduct [that] should run as golden threads through society, to
the end that law may approach its supreme ideal, which is the sway and dominance
of justice" (Id.) Foremost among these principles is that pronounced in Article 19
which provides:

Art. 19. Every person must, in the exercise of his rights and in the
performance of his duties, act with justice, give everyone his due, and
observe honesty and good faith.

This article, known to contain what is commonly referred to as the principle of


abuse of rights, sets certain standards which must be observed not only in the
exercise of one's rights but also in the performance of one's duties. These standards
are the following: to act with justice; to give everyone his due; and to observe
honesty and good faith. The law, therefore, recognizes a primordial limitation on
all rights; that in their exercise, the norms of human conduct set forth in Article 19
must be observed. A right, though by itself legal because recognized or granted by
law as such, may nevertheless become the source of some illegality. When a right
is exercised in a manner which does not conform with the norms enshrined in Article
19 and results in damage to another, a legal wrong is thereby committed for which
the wrongdoer must be held responsible. But while Article 19 lays down a rule of
conduct for the government of human relations and for the maintenance of social
order, it does not provide a remedy for its violation. Generally, an action for
damages under either Article 20 or Article 21 would be proper.

Article 20, which pertains to damage arising from a violation of law, provides that:

Art. 20. Every person who contrary to law, wilfully or negligently causes
damage to another, shall indemnify the latter for the same.

However, in the case at bar, petitioners claim that they did not violate any provision
of law since they were merely exercising their legal right to dismiss private
respondent. This does not, however, leave private respondent with no relief
because Article 21 of the Civil Code provides that:

Art. 21. Any person who wilfully causes loss or injury to another in a
manner that is contrary to morals, good customs or public policy shall
compensate the latter for the damage.

This article, adopted to remedy the "countless gaps in the statutes, which leave so
many victims of moral wrongs helpless, even though they have actually suffered
material and moral injury" [Id.] should "vouchsafe adequate legal remedy for that
untold number of moral wrongs which it is impossible for human foresight to
provide for specifically in the statutes" [Id. it p. 40; See also PNB v. CA, G.R. No.
L-27155, May 18,1978, 83 SCRA 237, 247].

In determining whether or not the principle of abuse of rights may be invoked,


there is no rigid test which can be applied. While the Court has not hesitated to
apply Article 19 whether the legal and factual circumstances called for its
application [See for e.g., Velayo v. Shell Co. of the Phil., Ltd., 100 Phil. 186 (1956);
PNB v. CA, supra; Grand Union Supermarket, Inc. v. Espino, Jr., G.R. No. L-48250,
December 28, 1979, 94 SCRA 953; PAL v. CA, G.R. No. L-46558, July 31,1981,106
SCRA 391; United General Industries, Inc, v. Paler G.R. No. L-30205, March
15,1982,112 SCRA 404; Rubio v. CA, G.R. No. 50911, August 21, 1987, 153 SCRA
183] the question of whether or not the principle of abuse of rights has been
violated resulting in damages under Article 20 or Article 21 or other applicable
provision of law, depends on the circumstances of each case. And in the instant
case, the Court, after examining the record and considering certain significant
circumstances, finds that all petitioners have indeed abused the right that they
invoke, causing damage to private respondent and for which the latter must now
be indemnified.

The trial court made a finding that notwithstanding the fact that it was private
respondent Tobias who reported the possible existence of anomalous transactions,
petitioner Hendry "showed belligerence and told plaintiff (private respondent
herein) that he was the number one suspect and to take a one week vacation leave,
not to communicate with the office, to leave his table drawers open, and to leave
his keys to said defendant (petitioner Hendry)" [RTC Decision, p. 2; Rollo, p. 232].
This, petitioners do not dispute. But regardless of whether or not it was private
respondent Tobias who reported the anomalies to petitioners, the latter's reaction
towards the former upon uncovering the anomalies was less than civil. An employer
who harbors suspicions that an employee has committed dishonesty might be
justified in taking the appropriate action such as ordering an investigation and
directing the employee to go on a leave. Firmness and the resolve to uncover the
truth would also be expected from such employer. But the high-handed treatment
accorded Tobias by petitioners was certainly uncalled for. And this reprehensible
attitude of petitioners was to continue when private respondent returned to work
on November 20, 1972 after his one week forced leave. Upon reporting for work,
Tobias was confronted by Hendry who said. "Tobby, you are the crook and swindler
in this company." Considering that the first report made by the police investigators
was submitted only on December 10, 1972 [See Exh. A] the statement made by
petitioner Hendry was baseless. The imputation of guilt without basis and the
pattern of harassment during the investigations of Tobias transgress the standards
of human conduct set forth in Article 19 of the Civil Code. The Court has already
ruled that the right of the employer to dismiss an employee should not be confused
with the manner in which the right is exercised and the effects flowing therefrom.
If the dismissal is done abusively, then the employer is liable for damages to the
employee [Quisaba v. Sta. Ines-Melale Veneer and Plywood Inc., G.R. No. L-38088,
August 30, 1974, 58 SCRA 771; See also Philippine Refining Co., Inc. v. Garcia,
G.R. No. L-21871, September 27,1966, 18 SCRA 107] Under the circumstances of
the instant case, the petitioners clearly failed to exercise in a legitimate manner
their right to dismiss Tobias, giving the latter the right to recover damages under
Article 19 in relation to Article 21 of the Civil Code.

But petitioners were not content with just dismissing Tobias. Several other tortious
acts were committed by petitioners against Tobias after the latter's termination
from work. Towards the latter part of January, 1973, after the filing of the first of
six criminal complaints against Tobias, the latter talked to Hendry to protest the
actions taken against him. In response, Hendry cut short Tobias' protestations by
telling him to just confess or else the company would file a hundred more cases
against him until he landed in jail. Hendry added that, "You Filipinos cannot be
trusted." The threat unmasked petitioner's bad faith in the various actions taken
against Tobias. On the other hand, the scornful remark about Filipinos as well as
Hendry's earlier statements about Tobias being a "crook" and "swindler" are clear
violations of 'Tobias' personal dignity [See Article 26, Civil Code].

The next tortious act committed by petitioners was the writing of a letter to
RETELCO sometime in October 1974, stating that Tobias had been dismissed by
GLOBE MACKAY due to dishonesty. Because of the letter, Tobias failed to gain
employment with RETELCO and as a result of which, Tobias remained unemployed
for a longer period of time. For this further damage suffered by Tobias, petitioners
must likewise be held liable for damages consistent with Article 2176 of the Civil
Code. Petitioners, however, contend that they have a "moral, if not legal, duty to
forewarn other employers of the kind of employee the plaintiff (private respondent
herein) was." [Petition, p. 14; Rollo, p. 15]. Petitioners further claim that "it is the
accepted moral and societal obligation of every man to advise or warn his
fellowmen of any threat or danger to the latter's life, honor or property. And this
includes warning one's brethren of the possible dangers involved in dealing with,
or accepting into confidence, a man whose honesty and integrity is suspect" [Id.].
These arguments, rather than justify petitioners' act, reveal a seeming obsession
to prevent Tobias from getting a job, even after almost two years from the time
Tobias was dismissed.

Finally, there is the matter of the filing by petitioners of six criminal complaints
against Tobias. Petitioners contend that there is no case against them for malicious
prosecution and that they cannot be "penalized for exercising their right and
prerogative of seeking justice by filing criminal complaints against an employee
who was their principal suspect in the commission of forgeries and in the
perpetration of anomalous transactions which defrauded them of substantial sums
of money" [Petition, p. 10, Rollo, p. 11].

While sound principles of justice and public policy dictate that persons shall have
free resort to the courts for redress of wrongs and vindication of their rights
[Buenaventura v. Sto. Domingo, 103 Phil. 239 (1958)], the right to institute
criminal prosecutions can not be exercised maliciously and in bad faith [Ventura v.
Bernabe, G.R. No. L-26760, April 30, 1971, 38 SCRA 5871.] Hence, in Yutuk V.
Manila Electric Co., G.R. No. L-13016, May 31, 1961, 2 SCRA 337, the Court held
that the right to file criminal complaints should not be used as a weapon to force
an alleged debtor to pay an indebtedness. To do so would be a clear perversion of
the function of the criminal processes and of the courts of justice. And
in Hawpia CA, G.R. No. L-20047, June 30, 1967. 20 SCRA 536 the Court upheld
the judgment against the petitioner for actual and moral damages and attorney's
fees after making a finding that petitioner, with persistence, filed at least six
criminal complaints against respondent, all of which were dismissed.

To constitute malicious prosecution, there must be proof that the prosecution was
prompted by a design to vex and humiliate a person and that it was initiated
deliberately by the defendant knowing that the charges were false and groundless
[Manila Gas Corporation v. CA, G.R. No. L-44190, October 30,1980, 100 SCRA
602]. Concededly, the filing of a suit by itself, does not render a person liable for
malicious prosecution [Inhelder Corporation v. CA, G.R. No. 52358, May
301983122 SCRA 576]. The mere dismissal by the fiscal of the criminal complaint
is not a ground for an award of damages for malicious prosecution if there is no
competent evidence to show that the complainant had acted in bad faith [Sison v.
David, G.R. No. L-11268, January 28,1961, 1 SCRA 60].

In the instant case, however, the trial court made a finding that petitioners acted
in bad faith in filing the criminal complaints against Tobias, observing that:

xxx

Defendants (petitioners herein) filed with the Fiscal's Office of Manila a


total of six (6) criminal cases, five (5) of which were for estafa thru
falsification of commercial document and one for violation of Art. 290 of
the Revised Penal Code "discovering secrets thru seizure of
correspondence," and all were dismissed for insufficiency or lack of
evidence." The dismissal of four (4) of the cases was appealed to the
Ministry of Justice, but said Ministry invariably sustained the dismissal
of the cases. As above adverted to, two of these cases were refiled with
the Judge Advocate General's Office of the Armed Forces of the
Philippines to railroad plaintiffs arrest and detention in the military
stockade, but this was frustrated by a presidential decree transferring
criminal cases involving civilians to the civil courts.

xxx

To be sure, when despite the two (2) police reports embodying the
findings of Lt. Dioscoro Tagle, Chief Document Examiner of the Manila
Police Department, clearing plaintiff of participation or involvement in
the fraudulent transactions complained of, despite the negative results
of the lie detector tests which defendants compelled plaintiff to undergo,
and although the police investigation was "still under follow-up and a
supplementary report will be submitted after all the evidence has been
gathered," defendants hastily filed six (6) criminal cases with the city
Fiscal's Office of Manila, five (5) for estafa thru falsification of
commercial document and one (1) for violation of Art. 290 of the Revised
Penal Code, so much so that as was to be expected, all six (6) cases
were dismissed, with one of the investigating fiscals, Asst. Fiscal de
Guia, commenting in one case that, "Indeed, the haphazard way this
case was investigated is evident. Evident likewise is the flurry and haste
in the filing of this case against respondent Tobias," there can be no
mistaking that defendants would not but be motivated by malicious and
unlawful intent to harass, oppress, and cause damage to plaintiff.

xxx

[RTC Decision, pp. 5-6; Rollo, pp. 235-236].

In addition to the observations made by the trial court, the Court finds it significant
that the criminal complaints were filed during the pendency of the illegal dismissal
case filed by Tobias against petitioners. This explains the haste in which the
complaints were filed, which the trial court earlier noted. But petitioners, to prove
their good faith, point to the fact that only six complaints were filed against Tobias
when they could have allegedly filed one hundred cases, considering the number
of anomalous transactions committed against GLOBE MACKAY. However,
petitioners' good faith is belied by the threat made by Hendry after the filing of the
first complaint that one hundred more cases would be filed against Tobias. In effect,
the possible filing of one hundred more cases was made to hang like the sword of
Damocles over the head of Tobias. In fine, considering the haste in which the
criminal complaints were filed, the fact that they were filed during the pendency of
the illegal dismissal case against petitioners, the threat made by Hendry, the fact
that the cases were filed notwithstanding the two police reports exculpating Tobias
from involvement in the anomalies committed against GLOBE MACKAY, coupled by
the eventual dismissal of all the cases, the Court is led into no other conclusion
than that petitioners were motivated by malicious intent in filing the six criminal
complaints against Tobias.

Petitioners next contend that the award of damages was excessive. In the
complaint filed against petitioners, Tobias prayed for the following: one hundred
thousand pesos (P100,000.00) as actual damages; fifty thousand pesos
(P50,000.00) as exemplary damages; eight hundred thousand pesos
(P800,000.00) as moral damages; fifty thousand pesos (P50,000.00) as attorney's
fees; and costs. The trial court, after making a computation of the damages
incurred by Tobias [See RTC Decision, pp. 7-8; Rollo, pp. 154-1551, awarded him
the following: eighty thousand pesos (P80,000.00) as actual damages; two
hundred thousand pesos (P200,000.00) as moral damages; twenty thousand pesos
(P20,000.00) as exemplary damages; thirty thousand pesos (P30,000.00) as
attorney's fees; and, costs. It must be underscored that petitioners have been
guilty of committing several actionable tortious acts, i.e., the abusive manner in
which they dismissed Tobias from work including the baseless imputation of guilt
and the harassment during the investigations; the defamatory language heaped on
Tobias as well as the scornful remark on Filipinos; the poison letter sent to RETELCO
which resulted in Tobias' loss of possible employment; and, the malicious filing of
the criminal complaints. Considering the extent of the damage wrought on Tobias,
the Court finds that, contrary to petitioners' contention, the amount of damages
awarded to Tobias was reasonable under the circumstances.

Yet, petitioners still insist that the award of damages was improper, invoking the
principle of damnum absque injuria. It is argued that "[t]he only probable actual
damage that plaintiff (private respondent herein) could have suffered was a direct
result of his having been dismissed from his employment, which was a valid and
legal act of the defendants-appellants (petitioners herein).lâwphî1.ñèt " [Petition,
p. 17; Rollo, p. 18].

According to the principle of damnum absque injuria, damage or loss which does
not constitute a violation of a legal right or amount to a legal wrong is not actionable
[Escano v. CA, G.R. No. L-47207, September 25, 1980, 100 SCRA 197; See also
Gilchrist v. Cuddy 29 Phil, 542 (1915); The Board of Liquidators v. Kalaw, G.R. No.
L-18805, August 14, 1967, 20 SCRA 987]. This principle finds no application in this
case. It bears repeating that even granting that petitioners might have had the
right to dismiss Tobias from work, the abusive manner in which that right was
exercised amounted to a legal wrong for which petitioners must now be held liable.
Moreover, the damage incurred by Tobias was not only in connection with the
abusive manner in which he was dismissed but was also the result of several other
quasi-delictual acts committed by petitioners.

Petitioners next question the award of moral damages. However, the Court has
already ruled in Wassmer v. Velez, G.R. No. L-20089, December 26, 1964, 12 SCRA
648, 653, that [p]er express provision of Article 2219 (10) of the New Civil Code,
moral damages are recoverable in the cases mentioned in Article 21 of said Code."
Hence, the Court of Appeals committed no error in awarding moral damages to
Tobias.

Lastly, the award of exemplary damages is impugned by petitioners. Although


Article 2231 of the Civil Code provides that "[i]n quasi-delicts, exemplary damages
may be granted if the defendant acted with gross negligence," the Court, in Zulueta
v. Pan American World Airways, Inc., G.R. No. L- 28589, January 8, 1973, 49 SCRA
1, ruled that if gross negligence warrants the award of exemplary damages, with
more reason is its imposition justified when the act performed is deliberate,
malicious and tainted with bad faith. As in the Zulueta case, the nature of the
wrongful acts shown to have been committed by petitioners against Tobias is
sufficient basis for the award of exemplary damages to the latter.

WHEREFORE, the petition is hereby DENIED and the decision of the Court of
Appeals in CA-G.R. CV No. 09055 is AFFIRMED. SO ORDERED.
FAR EAST BANK AND TRUST G.R. No. 157314
COMPANY, NOW BANK OF
THE PHILIPPINE ISLANDS, Present:
Petitioner,
PUNO, J., Chairman,
AUSTRIA-MARTINEZ,
CALLEJO, SR.,
- versus - TINGA, and
CHICO-NAZARIO, JJ.
Promulgated:
THEMISTOCLES PACILAN, JR.,
Respondent. July 29, 2005
x--------------------------------------------------x

DECISION

CALLEJO, SR., J.:

Before the Court is the petition for review on certiorari filed by Far East Bank and
Trust Company (now Bank of the Philippines Islands) seeking the reversal of the
Decision[1] dated August 30, 2002 of the Court of Appeals (CA) in CA-G.R. CV No.
36627 which ordered it, together with its branch accountant, Roger Villadelgado,
to pay respondent Themistocles Pacilan, Jr.[2] the total sum of P100,000.00 as
moral and exemplary damages. The assailed decision affirmed with modification
that of the Regional Trial Court (RTC) of Negros Occidental, Bacolod City, Branch
54, in Civil Case No. 4908. Likewise sought to be reversed and set aside is the
Resolution dated January 17, 2003 of the appellate court, denying petitioner banks
motion for reconsideration.

The case stemmed from the following undisputed facts:

Respondent Pacilan opened a current account with petitioner banks Bacolod Branch
on May 23, 1980. His account was denominated as Current Account No. 53208
(0052-00407-4). The respondent had since then issued several postdated checks
to different payees drawn against the said account. Sometime in March 1988, the
respondent issued Check No. 2434886 in the amount of P680.00 and the same was
presented for payment to petitioner bank on April 4, 1988.

Upon its presentment on the said date, Check No. 2434886 was dishonored
by petitioner bank. The next day, or on April 5, 1988, the respondent deposited to
his current account the amount of P800.00. The said amount was accepted by
petitioner bank; hence, increasing the balance of the respondents deposit
to P1,051.43.
Subsequently, when the respondent verified with petitioner bank about the
dishonor of Check No. 2434866, he discovered that his current account was closed
on the ground that it was improperly handled. The records of petitioner bank
disclosed that between the period of March 30,
1988 and April 5, 1988, the respondent issued four checks, to wit: Check No.
2480416 for P6,000.00; Check No. 2480419 for P50.00; Check No. 2434880
for P680.00 and; Check No. 2434886 for P680.00, or a total amount of P7,410.00.
At the time, however, the respondents current account with petitioner bank only
had a deposit of P6,981.43. Thus, the total amount of the checks presented for
payment on April 4, 1988 exceeded the balance of the respondents deposit in his
account. For this reason, petitioner bank, through its branch accountant,
Villadelgado, closed the respondents current account effective the evening of April
4, 1988 as it then had an overdraft of P428.57. As a consequence of the overdraft,
Check No. 2434886 was dishonored.

On April 18, 1988, the respondent wrote to petitioner bank complaining that
the closure of his account was unjustified. When he did not receive a reply from
petitioner bank, the respondent filed with the RTC of Negros Occidental, Bacolod
City, Branch 54, a complaint for damages against petitioner bank and Villadelgado.
The case was docketed as Civil Case No. 4908. The respondent, as complainant
therein, alleged that the closure of his current account by petitioner bank was
unjustified because on the first banking hour of April 5, 1988, he already deposited
an amount sufficient to fund his checks. The respondent pointed out that Check
No. 2434886, in particular, was delivered to petitioner bank at the close of banking
hours on April 4, 1988 and, following normal banking procedure, it
(petitioner bank) had until the last clearing hour of the following day, or on April 5,
1988, to honor the check or return it, if not funded. In disregard of this banking
procedure and practice, however, petitioner bank hastily closed the respondents
current account and dishonored his Check No. 2434886.

The respondent further alleged that prior to the closure of his current account, he
had issued several other postdated checks. The petitioner banks act of closing his
current account allegedly preempted the deposits that he intended to make to fund
those checks. Further, the petitioner banks act exposed him to criminal prosecution
for violation of Batas Pambansa Blg. 22.
According to the respondent, the indecent haste that attended the closure of his
account was patently malicious and intended to embarrass him. He claimed that he
is a Cashier of Prudential Bank and Trust Company, whose branch office is located
just across that of petitioner bank, and a prominent and respected leader both in
the civic and banking communities. The alleged malicious acts of petitioner bank
besmirched the respondents reputation and caused him social humiliation,
wounded feelings, insurmountable worries and sleepless nights entitling him to an
award of damages.

In their answer, petitioner bank and Villadelgado maintained that the respondents
current account was subject to petitioner banks Rules and Regulations Governing
the Establishment and Operation of Regular Demand
Deposits which provide that the Bank reserves the right to close an account if the
depositor frequently draws checks against insufficient funds and/or uncollected
deposits and that the Bank reserves the right at any time to return checks of the
depositor which are drawn against insufficient funds or for any reason.[3]

They showed that the respondent had improperly and irregularly handled his
current account. For example, in 1986, the respondents account was overdrawn
156 times, in 1987, 117 times and in 1988, 26 times. In all these instances, the
account was overdrawn due to the issuance of checks against insufficient funds.
The respondent had also signed several checks with a different signature from the
specimen on file for dubious reasons.

When the respondent made the deposit on April 5, 1988, it was obviously to cover
for issuances made the previous day against an insufficiently funded account. When
his Check No. 2434886 was presented for payment on April 4, 1988, he had already
incurred an overdraft; hence, petitioner bank rightfully dishonored the same for
insufficiency of funds.

After due proceedings, the court a quo rendered judgment in favor of the
respondent as it ordered the petitioner bank and Villadelgado, jointly and severally,
to pay the respondent the amounts of P100,000.00 as moral damages
and P50,000.00 as exemplary damages and costs of suit. In so ruling, the court a
quo also cited petitioner banks rules and regulations which state that a charge
of P10.00 shall be levied against the depositor for any check that is taken up as a
returned item due to insufficiency of funds on the date of receipt from the clearing
office even if said check is honored and/or covered by sufficient deposit the
following banking day. The same rules and regulations also provide that a check
returned for insufficiency of funds for any reason of similar import may be
subsequently recleared for one more time only, subject to the same charges.

According to the court a quo, following these rules and regulations, the respondent,
as depositor, had the right to put up sufficient funds for a check that was taken as
a returned item for insufficient funds the day following the receipt of said check
from the clearing office. In fact, the said check could still be recleared for one more
time. In previous instances, petitioner bank notified the respondent when he
incurred an overdraft and he would then deposit sufficient funds the following day
to cover the overdraft. Petitioner bank thus acted unjustifiably when it immediately
closed the respondents account on April 4, 1988 and deprived him of the
opportunity to reclear his check or deposit sufficient funds therefor the following
day.

As a result of the closure of his current account, several of the respondents checks
were subsequently dishonored and because of this, the respondent was humiliated,
embarrassed and lost his credit standing in the business community. The court a
quo further ratiocinated that even granting arguendo that petitioner bank had the
right to close the respondents account, the manner which attended the closure
constituted an abuse of the
said right. Citing Article 19 of the Civil Code of the Philippines which states that
[e]very person must, in the exercise of his rights and in the performance of his
duties, act with justice, give everyone his due, and observe honesty and good faith
and Article 20 thereof which states that [e]very person who, contrary to law,
wilfully or negligently causes damage to another, shall indemnify the latter for the
same, the court a quo adjudged petitioner bank of acting in bad faith. It held that,
under the foregoing circumstances, the respondent is entitled to an award of moral
and exemplary damages.

The decretal portion of the court a quos decision reads:

WHEREFORE, PREMISES CONSIDERED, judgment is hereby


rendered:

1. Ordering the defendants [petitioner bank and Villadelgado],


jointly and severally, to pay plaintiff [the respondent] the sum
of P100,000.00 as moral damages;
2. Ordering the defendants, jointly and severally, to pay plaintiff
the sum of P50,000.00 as exemplary damages plus costs and
expenses of the suit; and

3. Dismissing [the] defendants counterclaim for lack of merit.

SO ORDERED.[4]

On appeal, the CA rendered the Decision dated August 30, 2002, affirming with
modification the decision of the court a quo.

The appellate court substantially affirmed the factual findings of the court a quo as
it held that petitioner bank unjustifiably closed the respondents account
notwithstanding that its own rules and regulations

allow that a check returned for insufficiency of funds or any reason of similar
import, may be subsequently recleared for one more time, subject to standard
charges. Like the court a quo, the appellate court observed that in several instances
in previous years, petitioner bank would inform the respondent when he incurred
an overdraft and allowed him to make a timely deposit to fund the checks that were
initially dishonored for insufficiency of funds. However, on April 4, 1988, petitioner
bank immediately closed the respondents account without even notifying him that
he had incurred an overdraft. Even when they had already closed his account on
April 4, 1988, petitioner bank still accepted the deposit that the respondent made
on April 5, 1988, supposedly to cover his checks.

Echoing the reasoning of the court a quo, the CA declared that even as it may
be conceded that petitioner bank had reserved the right to close an account for
repeated overdrafts by the respondent, the exercise of that right must never be
despotic or arbitrary. That petitioner bank chose to close the account outright and
return the check, even after accepting a deposit sufficient to cover the said check,
is contrary to its duty to handle the respondents account with utmost fidelity. The
exercise of the right is not absolute and good faith, at least, is required. The manner
by which petitioner bank closed the account of the respondent runs afoul of Article
19 of the Civil Code which enjoins every person, in the exercise of his rights, to
give every one his due, and observe honesty and good faith.

The CA concluded that petitioner banks precipitate and imprudent closure of


the respondents account had caused him, a respected officer of several civic and
banking associations, serious anxiety and humiliation. It had, likewise, tainted his
credit standing. Consequently, the award of damages is warranted. The CA,
however, reduced the amount of damages awarded by the court a quo as it found
the same to be excessive:

We, however, find excessive the amount of damages awarded by


the RTC. In our view the reduced amount of P75,000.00 as moral
damages and P25,000.00 as exemplary damages are in order. Awards
for damages are not meant to enrich the plaintiff-appellee [the
respondent] at the expense of defendants-appellants [the petitioners],
but to obviate the moral suffering he has undergone. The award is aimed
at the restoration, within limits possible, of the status quo ante, and
should be proportionate to the suffering inflicted.[5]

The dispositive portion of the assailed CA decision reads:

WHEREFORE, the decision appealed from is hereby AFFIRMED,


subject to the MODIFICATION that the award of moral damages is
reduced to P75,000.00 and the award of exemplary damages reduced
to P25,000.00.

SO ORDERED.[6]

Petitioner bank sought the reconsideration of the said decision but in the assailed
Resolution dated January 17, 2003, the appellate court denied its motion. Hence,
the recourse to this Court.

Petitioner bank maintains that, in closing the account of the respondent in the
evening of April 4, 1988, it acted in good faith and in accordance with the rules and
regulations governing the operation of a

regular demand deposit which reserves to the bank the right to close an account if
the depositor frequently draws checks against insufficient funds and/or uncollected
deposits. The same rules and regulations also provide that the depositor is not
entitled, as a matter of right, to overdraw on this deposit and the bank reserves
the right at any time to return checks of the depositor which are drawn against
insufficient funds or for any reason.

It cites the numerous instances that the respondent had overdrawn his account
and those instances where he deliberately signed checks using a signature different
from the specimen on file. Based on these facts, petitioner bank was constrained
to close the respondents account for improper and irregular handling and returned
his Check No. 2434886 which was presented to the bank for payment on April 4,
1988.

Petitioner bank further posits that there is no law or rule which gives the respondent
a legal right to make good his check or to deposit the corresponding amount to
cover said check within 24 hours after the same is dishonored or returned by the
bank for having been drawn against insufficient funds. It vigorously denies having
violated Article 19 of the Civil Code as it insists that it acted in good faith and in
accordance with the pertinent banking rules and regulations.

The petition is impressed with merit.

A perusal of the respective decisions of the court a quo and the appellate
court show that the award of damages in the respondents favor was anchored
mainly on Article 19 of the Civil Code which, quoted anew below, reads:
Art. 19. Every person must, in the exercise of his rights and in the
performance of his duties, act with justice, give everyone his due, and
observe honesty and good faith.

The elements of abuse of rights are the following: (a) the existence of a legal
right or duty; (b) which is exercised in bad faith; and (c) for the sole intent of
prejudicing or injuring another.[7] Malice or bad faith is at the core of the said
provision.[8] The law always presumes good faith and any person who seeks to be
awarded damages due to acts of another has the burden of proving that the latter
acted in bad faith or with ill-motive.[9] Good faith refers to the state of the mind
which is manifested by the acts of the individual concerned. It consists of the
intention to abstain from taking an unconscionable and unscrupulous advantage of
another.[10] Bad faith does not simply connote bad judgment or simple negligence,
dishonest purpose or some moral obliquity and conscious doing of a wrong, a
breach of known duty due to some motives or interest or ill-will that partakes of
the nature of fraud.[11] Malice connotes ill-will or spite and speaks not in response
to duty. It implies an intention to do ulterior and unjustifiable harm. Malice is bad
faith or bad motive.[12]

Undoubtedly, petitioner bank has the right to close the account of the
respondent based on the following provisions of its Rules and Regulations
Governing the Establishment and Operation of Regular Demand Deposits:
10) The Bank reserves the right to close an account if the depositor
frequently draws checks against insufficient funds and/or
uncollected deposits.

12)
However, it is clearly understood that the depositor is not entitled,
as a matter of right, to overdraw on this deposit and the bank
reserves the right at any time to return checks of the depositor
which are drawn against insufficient funds or for any other reason.

The facts, as found by the court a quo and the appellate court, do not
establish that, in the exercise of this right, petitioner bank committed an abuse
thereof. Specifically, the second and third elements for abuse of rights are not
attendant in the present case. The evidence presented by petitioner bank negates
the existence of bad faith or malice on its part in closing the respondents account
on April 4, 1988 because on the said date the same was already overdrawn. The
respondent issued four checks, all due on April 4, 1988, amounting to P7,410.00
when the balance of his current account deposit was only P6,981.43. Thus, he
incurred an overdraft of P428.57 which resulted in the dishonor of his Check No.
2434886. Further, petitioner bank showed that in 1986, the current account of the
respondent was overdrawn 156 times due to his issuance of checks against
insufficient funds.[13] In 1987, the said account was overdrawn 117 times for the
same

reason.[14] Again, in 1988, 26 times.[15] There were also several instances when the
respondent issued checks deliberately using a signature different from his specimen
signature on file with petitioner bank.[16] All these circumstances taken together
justified the petitioner banks closure of the respondents account on April 4, 1988
for improper handling.

It is observed that nowhere under its rules and regulations is petitioner bank
required to notify the respondent, or any depositor for that matter, of the closure
of the account for frequently drawing checks against insufficient funds. No malice
or bad faith could be imputed on petitioner bank for so acting since the records
bear out that the respondent had indeed been improperly and irregularly handling
his account not just a few times but hundreds of times. Under the circumstances,
petitioner bank could not be faulted for exercising its right in accordance with the
express rules and regulations governing the current accounts of its depositors.
Upon the opening of his account, the respondent had agreed to be bound by these
terms and conditions.

Neither the fact that petitioner bank accepted the deposit made by the respondent
the day following the closure of his account constitutes bad faith or malice on the
part of petitioner bank. The same could be characterized as simple negligence by
its personnel. Said act, by itself, is not constitutive of bad faith.
The respondent had thus failed to discharge his burden of proving bad faith
on the part of petitioner bank or that it was motivated by ill-will or spite in closing
his account on April 4, 1988 and in inadvertently accepting his deposit on April 5,
1988.

Further, it has not been shown that these acts were done by petitioner bank
with the sole intention of prejudicing and injuring the respondent. It is conceded
that the respondent may have suffered damages as a result of the closure of his
current account. However, there is a material distinction between damages and
injury. The Court had the occasion to explain the distinction between damages and
injury in this wise:

Injury is the illegal invasion of a legal right; damage is the loss,


hurt or harm which results from the injury; and damages are the
recompense or compensation awarded for the damage suffered. Thus,
there can be damage without injury in those instances in which the loss
or harm was not the result of a violation of a legal duty. In such cases,
the consequences must be borne by the injured person alone, the law
affords no remedy for damages resulting from an act which does not
amount to a legal injury or wrong. These situations are often
called damnum absque injuria.

In other words, in order that a plaintiff may maintain an action for the
injuries of which he complains, he must establish that such injuries
resulted from a breach of duty which the defendant owed to the plaintiff
a concurrence of injury to the plaintiff and legal responsibility by the
person causing it. The underlying basis for the award of tort damages is
the premise that the individual was injured in contemplation of law.
Thus, there must first be a breach of some duty and the imposition of
liability for that breach before damages may be awarded; and the
breach of such duty should be the proximate cause of the injury.[17]

Whatever damages the respondent may have suffered as a


consequence, e.g., dishonor of his other insufficiently funded checks, would have
to be borne by him alone. It was the respondents repeated improper
and irregular handling of his account which constrained petitioner bank to close the
same in accordance with the rules and regulations governing its depositors current
accounts. The respondents case is clearly one of damnum absque injuria.

WHEREFORE, the petition is GRANTED. The Decision dated August 30, 2002
and Resolution dated January 17, 2003 of the Court of Appeals in CA-G.R. CV No.
36627 are REVERSED AND SET ASIDE. SO ORDERED.
ERNESTO RAMAS G.R. No. 146322
UYPITCHING and RAMAS
UYPITCHING SONS, INC.,
Petitioners,

-versus–

ERNESTO QUIAMCO,
Respondent. Promulgated:
December 6, 2006

x-------------------------------------------------
-x

DECISION
CORONA, J.:

Honeste vivere, non alterum laedere et jus suum cuique tribuere. To live
virtuously, not to injure others and to give everyone his due. These supreme norms
of justice are the underlying principles of law and order in society. We reaffirm
them in this petition for review on certiorari assailing the July 26, 2000
decision[1] and October 18, 2000 resolution of the Court of Appeals (CA) in CA-G.R.
CV No. 47571.

In 1982, respondent Ernesto C. Quiamco was approached by


Juan Davalan,[2] Josefino Gabutero and Raul Generoso to amicably settle the civil
aspect of a criminal case for robbery[3] filed by Quiamco against them. They
surrendered to him a red Honda XL-100 motorcycle and a photocopy of its
certificate of registration. Respondent asked for the original certificate of
registration but the three accused never came to see him again. Meanwhile, the
motorcycle was parked in an open space inside respondents business
establishment, Avesco-AVNE Enterprises, where it was visible and accessible to the
public.

It turned out that, in October 1981, the motorcycle had been sold on installment
basis to Gabutero by petitioner Ramas Uypitching Sons, Inc., a family-owned
corporation managed by petitioner Atty. Ernesto Ramas Uypitching. To secure its
payment, the motorcycle was mortgaged to petitioner corporation.[4]

When Gabutero could no longer pay the installments, Davalan assumed the
obligation and continued the payments. In September 1982,
however, Davalan stopped paying the remaining installments and told petitioner
corporations collector, Wilfredo Verao, that the motorcycle had allegedly been
taken by respondents men.

Nine years later, on January 26, 1991, petitioner Uypitching, accompanied by


policemen,[5] went to Avesco-AVNE Enterprises to recover the motorcycle. The
leader of the police team, P/Lt. Arturo Vendiola, talked to the clerk in charge and
asked for respondent. While P/Lt. Vendiola and the clerk were talking,
petitioner Uypitching paced back and forth inside the establishment
uttering Quiamco is a thief of a motorcycle.

On learning that respondent was not in Avesco-AVNE Enterprises, the


policemen left to look for respondent in his residence while
petitioner Uypitching stayed in the establishment to take photographs of the
motorcycle. Unable to find respondent, the policemen went back to Avesco-AVNE
Enterprises and, on petitioner Uypitchingsinstruction and over the clerks objection,
took the motorcycle.

On February 18, 1991, petitioner Uypitching filed a criminal complaint for qualified
theft and/or violation of the Anti-Fencing Law[6] against respondent in the Office of
the City Prosecutor of Dumaguete City.[7] Respondent moved for dismissal because
the complaint did not charge an offense as he had neither stolen nor bought the
motorcycle. The Office of the City Prosecutor dismissed the complaint [8] and denied
petitioner Uypitchings subsequent motion for reconsideration.

Respondent filed an action for damages against petitioners in the RTC


of Dumaguete City, Negros Oriental, Branch 37.[9] He sought to hold the
petitioners liable for the following: (1) unlawful taking of the motorcycle; (2)
utterance of a defamatory remark (that respondent was a thief) and (3) precipitate
filing of a baseless and malicious complaint. These acts humiliated and
embarrassed the respondent and injured his reputation and integrity.
On July 30, 1994, the trial court rendered a decision[10] finding that
petitioner Uypitching was motivated with malice and ill will when he called
respondent a thief, took the motorcycle in an abusive manner and filed a baseless
complaint for qualified theft and/or violation of the Anti-Fencing Law. Petitioners
acts were found to be contrary to Articles 19[11] and 20[12] of the Civil Code. Hence,
the trial court held petitioners liable to respondent for P500,000 moral
damages, P200,000 exemplary damages and P50,000 attorneys fees plus costs.

Petitioners appealed the RTC decision but the CA affirmed the trial courts
decision with modification, reducing the award of moral and exemplary damages
to P300,000and P100,000, respectively.[13] Petitioners sought reconsideration but
it was denied. Thus, this petition.

In their petition and memorandum, petitioners submit that the sole


(allegedly) issue to be resolved here is whether the filing of a complaint for qualified
theft and/or violation of the Anti-Fencing Law in the Office of the City Prosecutor
warranted the award of moral damages, exemplary damages, attorneys fees and
costs in favor of respondent.

Petitioners suggestion is misleading. They were held liable for damages not
only for instituting a groundless complaint against respondent but also for making
a slanderous remark and for taking the motorcycle from respondents establishment
in an abusive manner.

CORRECTNESS OF THE FINDINGS OF THE RTC AND CA

As they never questioned the findings of the RTC and CA that malice and ill
will attended not only the public imputation of a crime to respondent [14] but also
the taking of the motorcycle, petitioners were deemed to have accepted the
correctness of such findings. This alone was sufficient to hold petitioners liable for
damages to respondent.

Nevertheless, to address petitioners concern, we also find that the trial and
appellate courts correctly ruled that the filing of the complaint was tainted with
malice and bad faith. Petitioners themselves in fact described their action as a
precipitate act.[15] Petitioners were bent on portraying respondent as a thief. In this
connection, we quote with approval the following findings of the RTC, as adopted
by the CA:

x x x There was malice or ill-will [in filing the complaint before the City
Prosecutors Office] because Atty. Ernesto Ramas Uypitching knew or
ought to have known as he is a lawyer, that there was no probable
cause at all for filing a criminal complaint for qualified theft and fencing
activity against [respondent]. Atty. Uypitching had no personal
knowledge that [respondent] stole the motorcycle in question. He was
merely told by his bill collector ([i.e.] the bill collector
of Ramas Uypitching Sons, Inc.)[,] Wilfredo Verao[,] that
Juan Dabalan will [no longer] pay the remaining installment(s) for the
motorcycle because the motorcycle was taken by the men of
[respondent]. It must be noted that the term used by Wilfredo Verao in
informing Atty. Ernesto Ramas Uypitching of the refusal of
Juan Dabalan to pay for the remaining installment was []taken[], not
[]unlawfully taken[] or stolen. Yet, despite the double hearsay, Atty.
Ernesto Ramas Uypitchingnot only executed the [complaint-affidavit]
wherein he named [respondent] as the suspect of the stolen motorcycle
but also charged [respondent] of qualified theft and fencing activity
before the City [Prosecutors] Office of Dumaguete. The absence of
probable cause necessarily signifies the presence of malice. What is
deplorable in all these is that Juan Dabalan, the owner of the
motorcycle, did not accuse [respondent] or the latters men of stealing
the motorcycle[,] much less bother[ed] to file a case for qualified theft
before the authorities. That Atty. Uypitchings act in charging
[respondent] with qualified theft and fencing activity is tainted with
malice is also shown by his answer to the question of
Cupid Gonzaga[16] [during one of their conversations] - why should you
still file a complaint? You have already recovered the
motorcycle[:] Aron motagam ang kawatan ug motor. (To teach a
[17]
lesson to the thief of motorcycle.)

Moreover, the existence of malice, ill will or bad faith is a factual matter. As
a rule, findings of fact of the trial court, when affirmed by the appellate court, are
conclusive on this Court. We see no compelling reason to reverse the findings of
the RTC and the CA.

PETITIONERS ABUSED THEIR RIGHT OF RECOVERY AS MORTGAGEE(S)

Petitioners claim that they should not be held liable for petitioner
corporations exercise of its right as seller-mortgagee to recover the mortgaged
vehicle preliminary to the enforcement of its right to foreclose on the mortgage in
case of default. They are clearly mistaken.
True, a mortgagee may take steps to recover the mortgaged property to
enable it to enforce or protect its foreclosure right thereon. There is, however, a
well-defined procedure for the recovery of possession of mortgaged property: if a
mortgagee is unable to obtain possession of a mortgaged property for its sale on
foreclosure, he must bring a civil action either to recover such possession as a
preliminary step to the sale, or to obtain judicial foreclosure.[18]

Petitioner corporation failed to bring the proper civil action necessary to


acquire legal possession of the motorcycle. Instead,
petitioner Uypitching descended on respondents establishment with his policemen
and ordered the seizure of the motorcycle without a search warrant or court order.
Worse, in the course of the illegal seizure of the motorcycle,
petitioner Uypitching even mouthed a slanderous statement.

No doubt, petitioner corporation, acting through its co-petitioner Uypitching,


blatantly disregarded the lawful procedure for the enforcement of its right, to the
prejudice of respondent. Petitioners acts violated the law as well as public morals,
and transgressed the proper norms of human relations.

The basic principle of human relations, embodied in Article 19 of the Civil


Code, provides:

Art. 19. Every person must in the exercise of his rights and in the
performance of his duties, act with justice, give every one his due, and
observe honesty and good faith.

Article 19, also known as the principle of abuse of right, prescribes that a
person should not use his right unjustly or contrary to honesty and good faith,
otherwise he opens himself to liability.[19] It seeks to preclude the use of, or the
tendency to use, a legal right (or duty) as a means to unjust ends.

There is an abuse of right when it is exercised solely to prejudice or injure


another.[20] The exercise of a right must be in accordance with the purpose for
which it was established and must not be excessive or unduly harsh; there must
be no intention to harm another.[21] Otherwise, liability for damages to the injured
party will attach.

In this case, the manner by which the motorcycle was taken at petitioners
instance was not only attended by bad faith but also contrary to the procedure laid
down by law. Considered in conjunction with the defamatory statement, petitioners
exercise of the right to recover the mortgaged vehicle was utterly prejudicial and
injurious to respondent. On the other hand, the precipitate act of filing an
unfounded complaint could not in any way be considered to be in accordance with
the purpose for which the right to prosecute a crime was established. Thus, the
totality of petitioners actions showed a calculated design to embarrass, humiliate
and publicly ridicule respondent. Petitioners acted in an excessively harsh fashion
to the prejudice of respondent. Contrary to law, petitioners willfully caused damage
to respondent. Hence, they should indemnify him.[22]

WHEREFORE, the petition is hereby DENIED. The July 26, 2000 decision
and October 18, 2000 resolution of the Court of Appeals in CA-G.R. CV No. 47571
are AFFIRMED.

Triple costs against petitioners, considering that petitioner


Ernesto Ramas Uypitching is a lawyer and an officer of the court, for his improper
behavior. SO ORDERED.
CEBU COUNTRY CLUB, INC., G.R. No. 160273
SABINO R. DAPAT, RUBEN D.
ALMENDRAS, JULIUS Z.
NERI, DOUGLAS L. LUYM,
CESAR T. LIBI,
*
RAMONTITO E. GARCIA and
JOSE B. SALA,
Petitioners, Promulgated:

January 18, 2008


-versus-

RICARDO F. ELIZAGAQUE,
Respondent.

x-----------------------------------------------------------------------------------------
x
DECISION

SANDOVAL-GUTIERREZ, J.:

For our resolution is the instant Petition for Review on Certiorari under Rule 45 of
the 1997 Rules of Civil Procedure, as amended, assailing the
[1]
Decision dated January 31, 2003 and Resolution dated October 2, 2003 of the
Court of Appeals in CA-G.R. CV No. 71506.

The facts are:

Cebu Country Club, Inc. (CCCI), petitioner, is a domestic corporation


operating as a non-profit and non-stock private membership club, having its
principal place of business in Banilad, Cebu City. Petitioners herein are members of
its Board of Directors.

Sometime in 1987, San Miguel Corporation, a special company proprietary


member of CCCI, designated respondent Ricardo F. Elizagaque, its Senior Vice
President and Operations Manager for the Visayas and Mindanao, as a special non-
proprietary member. The designation was thereafter approved by the CCCIs Board
of Directors.
In 1996, respondent filed with CCCI an application for proprietary membership. The
application was indorsed by CCCIs two (2) proprietary members, namely: Edmundo
T. Misa and Silvano Ludo.

As the price of a proprietary share was around the P5 million range, Benito
Unchuan, then president of CCCI, offered to sell respondent a share for only P3.5
million. Respondent, however, purchased the share of a certain Dr. Butalid for
only P3 million. Consequently, on September 6, 1996, CCCI issued Proprietary
Ownership Certificate No. 1446 to respondent.

During the meetings dated April 4, 1997 and May 30, 1997 of the CCCI Board
of Directors, action on respondents application for proprietary membership was
deferred. In another Board meeting held on July 30, 1997, respondents application
was voted upon. Subsequently, or on August 1, 1997, respondent received a letter
from Julius Z. Neri, CCCIs corporate secretary, informing him that the Board
disapproved his application for proprietary membership.

On August 6, 1997, Edmundo T. Misa, on behalf of respondent, wrote CCCI a


letter of reconsideration. As CCCI did not answer, respondent, on October 7, 1997,
wrote another letter of reconsideration. Still, CCCI kept silent. On November 5,
1997, respondent again sent CCCI a letter inquiring whether any member of the
Board objected to his application. Again, CCCI did not reply.

Consequently, on December 23, 1998, respondent filed with the Regional


Trial Court (RTC), Branch 71, Pasig City a complaint for damages against
petitioners, docketed as Civil Case No. 67190.

After trial, the RTC rendered its Decision dated February 14, 2001 in favor of
respondent, thus:

WHEREFORE, judgment is hereby rendered in favor of plaintiff:

1. Ordering defendants to pay, jointly and severally, plaintiff the


amount of P2,340,000.00 as actual or compensatory damages.

2. Ordering defendants to pay, jointly and severally, plaintiff the


amount of P5,000,000.00 as moral damages.

3. Ordering defendants to pay, jointly and severally, plaintiff the


amount of P1,000,000.00 as exemplary damages.
4. Ordering defendants to pay, jointly and severally, plaintiff the
amount of P1,000,000.00 as and by way of attorneys fees
and P80,000.00 as litigation expenses.

5. Costs of suit.

Counterclaims are hereby DISMISSED for lack of merit. SO


ORDERED.[2]

On appeal by petitioners, the Court of Appeals, in its Decision dated January 31,
2003, affirmed the trial courts Decision with modification, thus:

WHEREFORE, premises considered, the assailed Decision


dated February 14, 2001 of the Regional Trial Court, Branch
71, Pasig City in Civil Case No. 67190 is hereby AFFIRMED with
MODIFICATION as follows:

1. Ordering defendants-appellants to pay, jointly and severally,


plaintiff-appellee the amount of P2,000,000.00 as moral damages;

2. Ordering defendants-appellants to pay, jointly and severally,


plaintiff-appellee the amount of P1,000,000.00 as exemplary damages;

3. Ordering defendants-appellants to pay, jointly and severally,


plaintiff-appellee the mount of P500,000.00 as attorneys fees
and P50,000.00 as litigation expenses; and

4. Costs of the suit.

The counterclaims are DISMISSED for lack of merit. SO


ORDERED.[3]

On March 3, 2003, petitioners filed a motion for reconsideration and motion for
leave to set the motion for oral arguments. In its Resolution[4] dated October 2,
2003, the appellate court denied the motions for lack of merit.

Hence, the present petition.


The issue for our resolution is whether in disapproving respondents application for
proprietary membership with CCCI, petitioners are liable to respondent for
damages, and if so, whether their liability is joint and several.

Petitioners contend, inter alia, that the Court of Appeals erred in awarding
exorbitant damages to respondent despite the lack of evidence that they acted in
bad faith in disapproving the latters application; and in disregarding their defense
of damnum absque injuria.

For his part, respondent maintains that the petition lacks merit, hence, should be
denied.

CCCIs Articles of Incorporation provide in part:

SEVENTH: That this is a non-stock corporation and membership


therein as well as the right of participation in its assets shall be limited
to qualified persons who are duly accredited owners of Proprietary
Ownership Certificates issued by the corporation in accordance with its
By-Laws.

Corollary, Section 3, Article 1 of CCCIs Amended By-Laws provides:

SECTION 3. HOW MEMBERS ARE ELECTED The procedure for the


admission of new members of the Club shall be as follows:

(a) Any proprietary member, seconded by another voting


proprietary member, shall submit to the Secretary a written proposal
for the admission of a candidate to the Eligible-for-Membership List;

(b) Such proposal shall be posted by the Secretary for a period of


thirty (30) days on the Club bulletin board during which time any
member may interpose objections to the admission of the applicant by
communicating the same to the Board of Directors;

(c) After the expiration of the aforesaid thirty (30) days, if no


objections have been filed or if there are, the Board considers the
objections unmeritorious, the candidate shall be qualified for inclusion
in the Eligible-for-Membership List;
(d) Once included in the Eligible-for-Membership List and after the
candidate shall have acquired in his name a valid POC duly recorded in
the books of the corporation as his own, he shall become a Proprietary
Member, upon a non-refundable admission fee of P1,000.00, provided
that admission fees will only be collected once from any person.

On March 1, 1978, Section 3(c) was amended to read as follows:

(c) After the expiration of the aforesaid thirty (30) days, the Board
may, by unanimous vote of all directors present at a regular or
special meeting, approve the inclusion of the candidate in the Eligible-
for-Membership List.

As shown by the records, the Board adopted a secret balloting known as the
black ball system of voting wherein each member will drop a ball in the ballot box. A
white ball represents conformity to the admission of an applicant, while a black ball
means disapproval. Pursuant to Section 3(c), as amended, cited above, a
unanimous vote of the directors is required. When respondents application for
proprietary membership was voted upon during the Board meeting on July 30,
1997, the ballot box contained one (1) black ball. Thus, for lack of unanimity, his
application was disapproved.

Obviously, the CCCI Board of Directors, under its Articles of Incorporation,


has the right to approve or disapprove an application for proprietary
membership. But such right should not be exercised arbitrarily. Articles 19 and 21
of the Civil Code on the Chapter on Human Relations provide restrictions, thus:

Article 19. Every person must, in the exercise of his rights and in
the performance of his duties, act with justice, give everyone his due,
and observe honesty and good faith.

Article 21. Any person who willfully causes loss or injury to another
in a manner that is contrary to morals, good customs or public policy
shall compensate the latter for the damage.

In GF Equity, Inc. v. Valenzona,[5] we expounded Article 19 and correlated it with


Article 21, thus:
This article, known to contain what is commonly referred to as the
principle of abuse of rights, sets certain standards which must be
observed not only in the exercise of one's rights but also in the
performance of one's duties. These standards are the following: to act
with justice; to give everyone his due; and to observe honesty and good
faith. The law, therefore, recognizes a primordial limitation on all rights;
that in their exercise, the norms of human conduct set forth in Article
19 must be observed. A right, though by itself legal because
recognized or granted by law as such, may nevertheless become
the source of some illegality. When a right is exercised in a
manner which does not conform with the norms enshrined in
Article 19 and results in damage to another, a legal wrong is
thereby committed for which the wrongdoer must be held
responsible. But while Article 19 lays down a rule of conduct for the
government of human relations and for the maintenance of social order,
it does not provide a remedy for its violation. Generally, an action for
damages under either Article 20 or Article 21 would be
proper. (Emphasis in the original)

In rejecting respondents application for proprietary membership, we find


that petitioners violated the rules governing human relations, the basic principles
to be observed for the rightful relationship between human beings and for the
stability of social order. The trial court and the Court of Appeals aptly held
that petitioners committed fraud and evident bad faith in disapproving respondents
applications. This is contrary to morals, good custom or public policy. Hence,
petitioners are liable for damages pursuant to Article 19 in relation to Article 21 of
the same Code.

It bears stressing that the amendment to Section 3(c) of CCCIs Amended By-Laws
requiring the unanimous vote of the directors present at a special or regular
meeting was not printed on the application form respondent filled and submitted
to CCCI. What was printed thereon was the original provision of Section 3(c) which
was silent on the required number of votes needed for admission of an applicant
as a proprietary member.

Petitioners explained that the amendment was not printed on the application
form due to economic reasons. We find this excuse flimsy and unconvincing. Such
amendment, aside from being extremely significant, was introduced way back in
1978 or almost twenty (20) years before respondent filed his application. We
cannot fathom why such a prestigious and exclusive golf country club, like the
CCCI, whose members are all affluent, did not have enough money to cause the
printing of an updated application form.

It is thus clear that respondent was left groping in the dark wondering why
his application was disapproved. He was not even informed that a unanimous vote
of the Board members was required. When he sent a letter for reconsideration and
an inquiry whether there was an objection to his application, petitioners apparently
ignored him.Certainly, respondent did not deserve this kind of treatment. Having
been designated by San Miguel Corporation as a special non-proprietary member
of CCCI, he should have been treated by petitioners with courtesy and civility. At
the very least, they should have informed him why his application was disapproved.

The exercise of a right, though legal by itself, must nonetheless be in


accordance with the proper norm. When the right is exercised arbitrarily, unjustly
or excessively and results in damage to another, a legal wrong is committed for
which the wrongdoer must be held responsible.[6] It bears reiterating that the trial
court and the Court of Appeals held that petitioners disapproval of respondents
application is characterized by bad faith.

As to petitioners reliance on the principle of damnum absque injuria or


damage without injury, suffice it to state that the same is misplaced. In Amonoy v.
Gutierrez,[7]we held that this principle does not apply when there is an abuse of
a persons right, as in this case.

As to the appellate courts award to respondent of moral damages, we find


the same in order. Under Article 2219 of the New Civil Code, moral damages may
be recovered, among others, in acts and actions referred to in Article 21. We
believe respondents testimony that he suffered mental anguish, social humiliation
and wounded feelings as a result of the arbitrary denial of his application. However,
the amount of P2,000,000.00 is excessive. While there is no hard-and-fast rule in
determining what would be a fair and reasonable amount of moral damages, the
same should not be palpably and scandalously excessive. Moral damages are not
intended to impose a penalty to the wrongdoer, neither to enrich the claimant at
the expense of the defendant.[8] Taking into consideration the attending
circumstances here, we hold that an award to respondent of P50,000.00, instead
of P2,000,000.00, as moral damages is reasonable.

Anent the award of exemplary damages, Article 2229 allows it by way of example
or correction for the public good. Nonetheless, since exemplary damages are
imposed not to enrich one party or impoverish another but to serve as a deterrent
against or as a negative incentive to curb socially deleterious actions,[9] we reduce
the amount from P1,000,000.00 to P25,000.00 only.

On the matter of attorneys fees and litigation expenses, Article 2208 of the same
Code provides, among others, that attorneys fees and expenses of litigation may
be recovered in cases when exemplary damages are awarded and where the court
deems it just and equitable that attorneys fees and expenses of litigation should
be recovered, as in this case. In any event, however, such award must be
reasonable, just and equitable. Thus, we reduce the amount of attorneys fees
(P500,000.00) and litigation expenses (P50,000.00) to P50,000.00
and P25,000.00, respectively.
Lastly, petitioners argument that they could not be held jointly and severally liable
for damages because only one (1) voted for the disapproval of respondents
application lacks merit.

Section 31 of the Corporation Code provides:

SEC. 31. Liability of directors, trustees or officers. Directors or


trustees who willfully and knowingly vote for or assent to patently
unlawful acts of the corporation or who are guilty of gross negligence
or bad faith in directing the affairs of the corporation or acquire any
personal or pecuniary interest in conflict with their duty as such
directors, or trustees shall be liable jointly and severally for all
damages resulting therefrom suffered by the corporation, its
stockholders or members and other persons. (Emphasis ours)

WHEREFORE, we DENY the petition. The challenged Decision and Resolution of


the Court of Appeals in CA-G.R. CV No. 71506 are AFFIRMED with modification in
the sense that (a) the award of moral damages is reduced from P2,000,000.00
to P50,000.00; (b) the award of exemplary damages is reduced
from P1,000,000.00 to P25,000.00; and (c) the award of attorneys fees and
litigation expenses is reduced from P500,000.00 and P50,000.00 to P50,000.00
and P25,000.00, respectively. Costs against petitioners. SO ORDERED.
DEVELOPMENT BANK G.R. No. 167238
OF THE PHILIPPINES,
Petitioner,

-versus–

SPOUSES JESUS and


ANACORITA DOYON,
Respondents. Promulgated:
March 25, 2009

x---------------------------------------------------
x

DECISION
CORONA, J.:

This petition[1] seeks to the set aside the November 23, 2004 decision[2] and
February 18, 2005 resolution[3] of the Court of Appeals (CA) in CA-G.R. CV No.
74660.

In the early 1990s, respondent spouses Jesus and Anacorita Doyon obtained
several loans amounting to P10 million[4] from petitioner Development Bank of the
Philippines (DBP). As security for the loans, respondents mortgaged their real
estate properties as well as the motor vehicles of JD Bus Lines.

Due to their inability to fully pay their obligations upon


maturity,[5] respondents requested petitioner to restructure their past due
loans.[6] Petitioner agreed. Hence, respondents signed three promissory notes on
June 29, 1994.[7]
Nonetheless, respondents still failed to pay the quarterly installments on the
promissory notes. Thus, petitioner demanded the payment of the total value of
their loans from respondents.[8] Respondents, however, ignored petitioner and
adamantly refused to pay their loans.
Consequently, petitioner filed an application for extrajudicial foreclosure of
real estate mortgages in the Regional Trial Court (RTC) of Ormoc City in 1995. To
forestall the foreclosure proceedings, respondents immediately filed an action for
their nullification in the RTC of Ormoc City, Branch 35 claiming that they had
already paid the principal amount of their loans (or P10 million) to petitioner. This
was docketed as Civil Case No. 3314-O.
For three years, Civil Case No. 3314-O was not acted upon by the RTC.

In 1998, petitioner withdrew the application for extrajudicial foreclosure and


thereafter moved for the dismissal of Civil Case No. 3314-O. The RTC granted the
motion in an order dated March 2, 1998.[9] It held:

In todays hearing, which is for the reception of evidence for [petitioner],


[it] informed the Court about its withdrawal of the [application] for
extrajudicial foreclosure of real estate made subject of the present case.
In view of the withdrawal, [petitioner] moved for the dismissal of the
case considering that the action would be rendered moot and academic.

When [respondents were] made to comment, they interposed no


objection to the motion to dismiss.

By agreement therefore between the parties, this case is considered


DISMISSED with prejudice.

Weeks later, petitioner demanded from respondents the payment of their


outstanding obligations which had by then ballooned to more than P20 million.
Again, respondents ignored petitioner.

Petitioner filed an application for extrajudicial foreclosure of respondents real


and chattel mortgages with the DBP special sheriff in Makati [10] and subsequently
took constructive possession of the foreclosed properties.[11] It posted guards at
the perimeter of respondents property in Barangay Cabulihan, Ormoc City
(Cabulihan property) where the foreclosed motor vehicles of JD Bus Lines were
parked.[12] Subsequently, the DBP special sheriff issued notices of sale at public
auction of the foreclosed properties.[13]

Meanwhile, respondents filed a complaint for damages [14] against petitioner


and the DBP special sheriff in the RTC of Ormoc City, Branch 35. According to
respondents, by withdrawing the application for extrajudicial foreclosure and
moving for the dismissal of Civil Case No. 3314-O, petitioner led them to believe
that it would no longer seek the satisfaction of its claims. Petitioner therefore acted
contrary to Article 19 of the Civil Code[15] when it foreclosed on the real and chattel
mortgages anew.

Furthermore, respondents claimed that the provision in the mortgage


contracts[16] allowing petitioner as mortgagee to take constructive possession of
the mortgaged properties upon respondents default was void. The provision
allegedly constituted a pactum commissorium[17] since it permitted petitioner to
appropriate the mortgaged properties.

Lastly, respondents assailed the validity of the public auctions conducted by


the DBP special sheriff. The September 9, 1998 notices of sale stated that the
foreclosed real properties would be sold at public auction on September 16, 1998
at 10:00 a.m. or soon thereafter[18] while the foreclosed motor vehicles would be
sold on September 16, 1998 at 2:00 p.m. or soon thereafter. [19] Section 4 of Act
3135,[20] however, requires that public auctions must take place from 9 a.m. until
4 p.m. or, allegedly, for seven continuous hours.

Petitioner, in its answer, pointed out that despite the restructuring,


respondents refused to pay the amortizations on the June 29, 2004 promissory
notes. Moreover, the filing of Civil Case No. 3314-O and the delay in its resolution
prevented petitioner from collecting on the said notes from respondents. It
withdrew the application in the RTC and moved for the dismissal of Civil Case No.
3314-O only for the purpose of availing of a more efficient legal remedy, that
is, foreclosure through a special sheriff, as authorized by its charter.[21]
In a decision dated January 25, 2002,[22] the RTC found that, by withdrawing
its application for extrajudicial foreclosure and moving for the dismissal of Civil
Case No. 3314-O, petitioner led respondents to believe that their loans had been
extinguished. Thus, petitioner acted in bad faith when it foreclosed on the real and
chattel mortgages anew. The dispositive portion of the decision read:

WHEREFORE, after due consideration of all the foregoing,


judgment is hereby rendered in favor of [respondents] and against
[petitioner], ordering as follows:

1. [petitioner] to immediately stop the presence of its security


guards in the compound or premises of the plaintiffs at Barangay
Cabulihan, Ormoc City, and to vacate them from said premises;

2. [petitioner] to pay actual damages to [respondents] in the


total amount of P16,000 per day for the four buses, or a total
of P480,000 per month for these buses starting from April 27,
1998 until the time the buses shall have been allowed to leave the
compound of [respondents] or until [petitioner] shall vacate the
said premises, and P200,000 as compensatory damages for the
injury to [respondents'] business standing;

3. [petitioner] to pay P1,000,000 as exemplary damages;

4. [petitioner and the DBP special sheriff] jointly and severally


to pay the plaintiffs the sum of P2,000,000 as moral damages, the
sum of P50,000 as attorney's fees, the sum of P10,000 as
litigation expenses and costs of the suit.

Aggrieved, petitioner appealed to the CA. [23]

In a decision dated November 23, 2004, the CA affirmed the RTC decision
with modification of the liability for damages. Because the DBP special sheriff
merely performed his ministerial duty (when he foreclosed on the real and chattel
mortgages and issued notices of sale in public auction of the foreclosed properties),
petitioner alone was liable.

Petitioner moved for reconsideration but it was denied. Hence, this petition.

Petitioner basically asserts that it did not act in bad faith when it foreclosed
on respondents real and chattel mortgages anew. Because respondents loans were
past due, it had the right to satisfy its credit by foreclosing on the mortgages.
We grant the petition.
This Court is not a trier of facts and, as a rule, it only entertains questions of
law in a petition for review on certiorari. This rule, however, admits of exceptions
such as when the assailed decision is based on a misapprehension of facts.[24]

In this instance, the RTC and the CA both found that petitioner acted with bad
faith when it foreclosed on the real and chattel mortgages. We disagree.
What is due to a person is determined by the circumstances of each particular
case.[25] Article 19 of the Civil Code provides:

Article 19. Every person must, in the exercise of his rights and in the
performance of his duties, act with justice, give everyone his due and
observe honesty and good faith.

For an action for damages under this provision to prosper, the complainant must
prove that:

(a) defendant has a legal right or duty;


(b) he exercised his right or performed his duty with bad faith and
(c) complainant was prejudiced or injured as a result of the said
exercise or performance by defendant.

On the first requisite, we find that petitioner had the legal right to foreclose
on the real and chattel mortgages.
Since respondents neither assailed the due execution of the June 29, 1994
promissory notes nor presented proof of payment thereof, their obligation
remained outstanding. Upon default, by prior mutual agreement, petitioner had the
right to foreclose on the real and chattel mortgages securing their loans.

The June 29, 1994 promissory notes uniformly stated that failure to pay an
installment (or interest) on the due date was an event of default.[26] Respondents
were therefore in default when they failed to pay the quarterly amortizations on
the designated due dates.

When the principal obligation becomes due and the debtor fails to perform his
obligation, the creditor may foreclose on the mortgage[27] for the purpose of
alienating the (mortgaged) property to satisfy his credit.[28]

Regarding the second requisite, bad faith imports a dishonest purpose or


some moral obliquity or conscious doing of a wrong that partakes of the nature of
fraud.[29]

We note that the RTC of Ormoc City (Judge Fortunito L. Madrona) sat on Civil
Case No. 3314-O for three long years. This inordinate delay prejudiced
petitioner. Inasmuch as petitioner was in the business of lending out money it
borrowed from the public, sound banking practice called for the exercise of a more
efficient legal remedy against a defaulting debtor like respondent.[30] Thus,
petitioner could not be faulted for resorting to foreclosure through a special sheriff.
Such procedure was, after all, the more efficient method of enforcing petitioners
rights as mortgagee under its charter.[31]

Moreover, the March 2, 1998 order of the RTC (quoted above) merely stated
that the withdrawal of the application for extrajudicial foreclosure in the RTC
rendered Civil Case No. 3314-O moot and academic. Nothing in the said order
stated, or even hinted, that respondents obligation to petitioner had in fact been
extinguished. Thus, there was nothing on the part of petitioner even remotely
showing that it led respondents to believe that it had waived its claims.

Lastly, inasmuch as petitioner demanded payment from them right after the
dismissal of Civil Case No. 3314-O, respondents could not have reasonably
presumed that the bank had waived its claims against them. Furthermore, the fact
that a demand for payment was made negated bad faith on the part of petitioner.
Despite giving respondents the opportunity to pay their long overdue obligations
and avoid foreclosure, respondents still refused to pay. Since respondents did not
have a cause of action against petitioner, the RTC and CA erred in granting
damages to them.

A stipulation allowing the mortgagee to take actual or constructive possession


of a mortgaged property upon foreclosure is valid. In Agricultural and Industrial
Bank v. Tambunting,[32] we explained:

A stipulation authorizing the mortgagee, for the purpose stated therein


specified, to take possession of the mortgaged premises upon the
foreclosure of a mortgage is not repugnant [to either Article 2088 or
Article 2137]. On the contrary, such a stipulation is in consonance or
analogous to the provisions of Article [2132], et seq. of the Civil Code
regarding antichresis and the provision of the Rules of Court regarding
the appointment of a receiver as a convenient and feasible means of
preserving and administering the property in litigation.[33]

The real estate and chattel mortgage contracts[34] uniformly provided that
petitioner could take possession of the foreclosed properties upon the failure of
respondents to pay even one amortization. Thus, respondents refusal to pay their
obligations gave rise to petitioners right to take constructive possession of the
foreclosed motor vehicles.

In Philippine National Bank v. Cabatingan,[35] we held that a sale at public


auction held at any time between 9:00 a.m. and 4:00 p.m. of a particular day,
regardless of duration, was valid. Since the sale at public auction of the foreclosed
real properties and chattels was conducted between 10:00 a.m. and 11:00 a.m.
and between 2:00 p.m. and 3:30 p.m., respectively, the auctions were valid.
WHEREFORE, the petition is hereby GRANTED. The November 23, 2004
decision and February 18, 2005 resolution of the Court of Appeals in CA-G.R. CV
74660 affirming the January 25, 2002 decision of the Regional Trial Court of Ormoc
City, Branch 35 in Civil Case No. 3592-0 are SET ASIDE. New judgment is hereby
entered dismissing Civil Case No. 3592-0 for lack of cause of action. No
pronouncement as to costs. SO ORDERED.
G.R. No. 165443 April 16, 2009

CALATAGAN GOLF CLUB, INC. Petitioner,


vs.
SIXTO CLEMENTE, JR., Respondent.

DECISION

TINGA, J.:

Seeking the reversal of the Decision1 dated 1 June 2004 of the Court of Appeals in
CA-G.R. SP No. 62331 and the reinstatement of the Decision dated 15 November
2000 of the Securities and Exchange Commission (SEC) in SEC Case No. 04-98-
5954, petitioner Calatagan Golf Club, Inc. (Calatagan) filed this Rule 45 petition
against respondent Sixto Clemente, Jr. (Clemente).

The key facts are undisputed.

Clemente applied to purchase one share of stock of Calatagan, indicating in his


application for membership his mailing address at "Phimco Industries, Inc. – P.O.
Box 240, MCC," complete residential address, office and residence telephone
numbers, as well as the company (Phimco) with which he was connected, Calatagan
issued to him Certificate of Stock No. A-01295 on 2 May 1990 after paying
₱120,000.00 for the share.2

Calatagan charges monthly dues on its members to meet expenses for general
operations, as well as costs for upkeep and improvement of the grounds and
facilities. The provision on monthly dues is incorporated in Calatagan’s Articles of
Incorporation and By-Laws. It is also reproduced at the back of each certificate of
stock.3 As reproduced in the dorsal side of Certificate of Stock No. A-01295, the
provision reads:

5. The owners of shares of stock shall be subject to the payment of monthly dues
in an amount as may be prescribed in the by-laws or by the Board of Directors
which shall in no case be less that [sic] ₱50.00 to meet the expenses for the general
operations of the club, and the maintenance and improvement of its premises and
facilities, in addition to such fees as may be charged for the actual use of the
facilities x x x

When Clemente became a member the monthly charge stood at ₱400.00. He paid
₱3,000.00 for his monthly dues on 21 March 1991 and another ₱5,400.00 on 9
December 1991. Then he ceased paying the dues. At that point, his balance
amounted to ₱400.00.4

Ten (10) months later, Calatagan made the initial step to collect Clemente’s back
accounts by sending a demand letter dated 21 September 1992. It was followed
by a second letter dated 22 October 1992. Both letters were sent to Clemente’s
mailing address as indicated in his membership application but were sent back to
sender with the postal note that the address had been closed.5

Calatagan declared Clemente delinquent for having failed to pay his monthly dues
for more than sixty (60) days, specifically ₱5,600.00 as of 31 October 1992.
Calatagan also included Clemente’s name in the list of delinquent members posted
on the club’s bulletin board. On 1 December 1992, Calatagan’s board of directors
adopted a resolution authorizing the foreclosure of shares of delinquent members,
including Clemente’s; and the public auction of these shares.
On 7 December 1992, Calatagan sent a third and final letter to Clemente, this time
signed by its Corporate Secretary, Atty. Benjamin Tanedo, Jr. The letter contains a
warning that unless Clemente settles his outstanding dues, his share would be
included among the delinquent shares to be sold at public auction on 15 January
1993. Again, this letter was sent to Clemente’s mailing address that had already
been closed.6

On 5 January 1993, a notice of auction sale was posted on the Club’s bulletin board,
as well as on the club’s premises. The auction sale took place as scheduled on 15
January 1993, and Clemente’s share sold for ₱64,000.7According to the Certificate
of Sale issued by Calatagan after the sale, Clemente’s share was purchased by a
Nestor A. Virata.8 At the time of the sale, Clemente’s accrued monthly dues
amounted to ₱5,200.00.9 A notice of foreclosure of Clemente’s share was published
in the 26 May 1993 issue of the Business World.10

Clemente learned of the sale of his share only in November of 1997. 11 He filed a
claim with the Securities and Exchange Commission (SEC) seeking the restoration
of his shareholding in Calatagan with damages.

On 15 November 2000, the SEC rendered a decision dismissing Clemente’s


complaint. Citing Section 69 of the Corporation Code which provides that the sale
of shares at an auction sale can only be questioned within six (6) months from the
date of sale, the SEC concluded that Clemente’s claim, filed four (4) years after the
sale, had already prescribed. The SEC further held that Calatagan had complied
with all the requirements for a valid sale of the subject share, Clemente having
failed to inform Calatagan that the address he had earlier supplied was no longer
his address. Clemente, the SEC ruled, had acted in bad faith in assuming as he
claimed that his non-payment of monthly dues would merely render his share
"inactive."

Clemente filed a petition for review with the Court of Appeals. On 1 June 2004, the
Court of Appeals promulgated a decision reversing the SEC. The appellate court
restored Clemente’s one share with a directive to Calatagan to issue in his a new
share, and awarded to Clemente a total of ₱400,000.00 in damages, less the unpaid
monthly dues of ₱5,200.00.

In rejecting the SEC’s finding that the action had prescribed, the Court of Appeals
cited the SEC’s own ruling in SEC Case No. 4160, Caram v. Valley Golf Country
Club, Inc., that Section 69 of the Corporation Code specifically refers to unpaid
subscriptions to capital stock, and not to any other debt of stockholders. With the
insinuation that Section 69 does not apply to unpaid membership dues in non-stock
corporations, the appellate court employed Article 1140 of the Civil Code as the
proper rule of prescription. The provision sets the prescription period of actions to
recover movables at eight (8) years.

The Court of Appeals also pointed out that since that Calatagan’s first two demand
letters had been returned to it as sender with the notation about the closure of the
mailing address, it very well knew that its third and final demand letter also sent
to the same mailing address would not be received by Clemente. It noted the by-
law requirement that within ten (10) days after the Board has ordered the sale at
auction of a member’s share of stock for indebtedness, the Corporate Secretary
shall notify the owner thereof and advise the Membership Committee of such fact.
Finally, the Court of Appeals ratiocinated that "a person who is in danger of the
imminent loss of his property has the right to be notified and be given the chance
to prevent the loss."12

Hence, the present appeal.


Calatagan maintains that the action of Clemente had prescribed pursuant to Section
69 of the Corporation Code, and that the requisite notices under both the law and
the by-laws had been rendered to Clemente.

Section 69 of the Code provides that an action to recover delinquent stock sold
must be commenced by the filing of a complaint within six (6) months from the
date of sale. As correctly pointed out by the Court of Appeals, Section 69 is part of
Title VIII of the Code entitled "Stocks and Stockholders" and refers specifically to
unpaid subscriptions to capital stock, the sale of which is governed by the
immediately preceding Section 68.

The Court of Appeals debunked both Calatagan’s and the SEC’s reliance on Section
69 by citing another SEC ruling in the case of Caram v. Valley Golf. In connection
with Section 69, Calatagan raises a peripheral point made in the SEC’s Caram
ruling. In Caram, the SEC, using as take-off Section 6 of the Corporation Code
which refers to "such rights, privileges or restrictions as may be stated in the
articles of incorporation," pointed out that the Articles of Incorporation of Valley
Golf does not "impose any lien, liability or restriction on the Golf Share [of Caram],"
but only its (Valley Golf’s) By-Laws does. Here, Calatagan stresses that its own
Articles of Incorporation does provide that the monthly dues assessed on owners
of shares of the corporation, along with all other obligations of the shareholders to
the club, "shall constitute a first lien on the shares… and in the event of delinquency
such shares may be ordered sold by the Board of Directors in the manner provided
in the By-Laws to satisfy said dues or other obligations of the shareholders."13 With
its illative but incomprehensible logic, Calatagan concludes that the prescriptive
period under Section 69 should also apply to the sale of Clemente’s share as the
lien that Calatagan perceives to be a restriction is stated in the articles of
incorporation and not only in the by-laws.

We remain unconvinced.

There are fundamental differences that defy equivalence or even analogy between
the sale of delinquent stock under Section 68 and the sale that occurred in this
case. At the root of the sale of delinquent stock is the non-payment of the
subscription price for the share of stock itself. The stockholder or subscriber has
yet to fully pay for the value of the share or shares subscribed. In this case,
Clemente had already fully paid for the share in Calatagan and no longer had any
outstanding obligation to deprive him of full title to his share. Perhaps the analogy
could have been made if Clemente had not yet fully paid for his share and the non-
stock corporation, pursuant to an article or by-law provision designed to address
that situation, decided to sell such share as a consequence. But that is not the case
here, and there is no purpose for us to apply Section 69 to the case at bar.

Calatagan argues in the alternative that Clemente’s suit is barred by Article 1146
of the Civil Code which establishes four (4) years as the prescriptive period for
actions based upon injury to the rights of the plaintiff on the hypothesis that the
suit is purely for damages. As a second alternative still, Calatagan posits that
Clemente’s action is governed by Article 1149 of the Civil Code which sets five (5)
years as the period of prescription for all other actions whose prescriptive periods
are not fixed in the Civil Code or in any other law. Neither article is applicable but
Article 1140 of the Civil Code which provides that an action to recover movables
shall prescribe in eight (8) years. Calatagan’s action is for the recovery of a share
of stock, plus damages.

Calatagan’s advertence to the fact that the constitution of a lien on the member’s
share by virtue of the explicit provisions in its Articles of Incorporation and By-Laws
is relevant but ultimately of no help to its cause. Calatagan’s Articles of
Incorporation states that the "dues, together with all other obligations of members
to the club, shall constitute a first lien on the shares, second only to any lien in
favor of the national or local government, and in the event of delinquency such
shares may be ordered sold by the Board of Directors in the manner provided in
the By-Laws to satisfy said dues or other obligations of the stockholders."14 In turn,
there are several provisions in the By-laws that govern the payment of dues, the
lapse into delinquency of the member, and the constitution and execution on the
lien. We quote these provisions:

ARTICLE XII – MEMBER’S ACCOUNT

SEC. 31. (a) Billing Members, Posting of Delinquent Members – The Treasurer shall
bill al members monthly. As soon as possible after the end of every month, a
statement showing the account of bill of a member for said month will be prepared
and sent to him. If the bill of any member remains unpaid by the 20th of the month
following that in which the bill was incurred, the Treasurer shall notify him that if
his bill is not paid in full by the end of the succeeding month his name will be posted
as delinquent the following day at the Clubhouse bulletin board. While posted, a
member, the immediate members of his family, and his guests, may not avail of
the facilities of the Club.

(b) Members on the delinquent list for more than 60 days shall be reported
to the Board and their shares or the shares of the juridical entities they
represent shall thereafter be ordered sold by the Board at auction to satisfy
the claims of the Club as provided for in Section 32 hereon. A member may
pay his overdue account at any time before the auction sale.

Sec. 32. Lien on Shares; Sale of Share at Auction- The club shall have a first lien
on every share of stock to secure debts of the members to the Club. This lien shall
be annotated on the certificates of stock and may be enforced by the Club in the
following manner:

(a) Within ten (10) days after the Board has ordered the sale at auction of a
member’s share of stock for indebtedness under Section 31(b) hereof, the
Secretary shall notify the owner thereof, and shall advise the Membership
Committee of such fact.

(b) The Membership Committee shall then notify all applicants on the Waiting
List and all registered stockholders of the availability of a share of stock for
sale at auction at a specified date, time and place, and shall post a notice to
that effect in the Club bulletin board for at least ten (10) days prior to the
auction sale.

(c) On the date and hour fixed, the Membership Committee shall proceed with
the auction by viva voce bidding and award the sale of the share of stock to
the highest bidder.

(d) The purchase price shall be paid by the winning bidder to the Club within
twenty-four (24) hours after the bidding. The winning bidder or the
representative in the case of a juridical entity shall become a Regular Member
upon payment of the purchase price and issuance of a new stock certificate
in his name or in the name of the juridical entity he represents. The proceeds
of the sale shall be paid by the Club to the selling stockholder after deducting
his obligations to the Club.

(e) If no bids be received or if the winning bidder fails to pay the amount of
this bid within twenty-four (24) hours after the bidding, the auction
procedures may be repeated from time to time at the discretion of the
Membership Committee until the share of stock be sold.

(f) If the proceeds from the sale of the share of stock are not sufficient to pay
in full the indebtedness of the member, the member shall continue to be
obligated to the Club for the unpaid balance. If the member whose share of
stock is sold fails or refuse to surrender the stock certificate for cancellation,
cancellation shall be effected in the books of the Club based on a record of
the proceedings. Such cancellation shall render the unsurrendered stock
certificate null and void and notice to this effect shall be duly published.

It is plain that Calatagan had endeavored to install a clear and comprehensive


procedure to govern the payment of monthly dues, the declaration of a member as
delinquent, and the constitution of a lien on the shares and its eventual public sale
to answer for the member’s debts. Under Section 91 of the Corporation Code,
membership in a non-stock corporation "shall be terminated in the manner and for
the causes provided in the articles of incorporation or the by-laws." The By-law
provisions are elaborate in explaining the manner and the causes for the
termination of membership in Calatagan, through the execution on the lien of the
share. The Court is satisfied that the By-Laws, as written, affords due protection to
the member by assuring that the member should be notified by the Secretary of
the looming execution sale that would terminate membership in the club. In
addition, the By-Laws guarantees that after the execution sale, the proceeds of the
sale would be returned to the former member after deducting the outstanding
obligations. If followed to the letter, the termination of membership under this
procedure outlined in the By-Laws would accord with substantial justice.

Yet, did Calatagan actually comply with the by-law provisions when it sold
Clemente’s share? The appellate court’s finding on this point warrants our
approving citation, thus:

In accordance with this provision, Calatagan sent the third and final demand letter
to Clemente on December 7, 1992. The letter states that if the amount of
delinquency is not paid, the share will be included among the delinquent shares to
be sold at public auction. This letter was signed by Atty. Benjamin Tanedo, Jr.,
Calatagan Golf’s Corporate Secretary. It was again sent to Clemente’s mailing
address – Phimco Industries Inc., P.O. Box 240, MCC Makati. As expected,
it was returned because the post office box had been closed.

Under the By-Laws, the Corporate Secretary is tasked to "give or cause to be given,
all notices required by law or by these By-Laws. .. and … keep a record of the
addresses of all stockholders. As quoted above, Sec. 32 (a) of the By-Laws further
provides that "within ten (10) days after the Board has ordered the sale at auction
of a member’s share of stock for indebtedness under Section 31 (b) hereof, the
Secretary shall notify the owner thereof and shall advise the Membership
Committee of such fact.," The records do not disclose what report the Corporate
Secretary transmitted to the Membership Committee to comply with Section 32(a).
Obviously, the reason for this mandatory requirement is to give the Membership
Committee the opportunity to find out, before the share is sold, if proper notice has
been made to the shareholder member.

We presume that the Corporate Secretary, as a lawyer is knowledgeable on the law


and on the standards of good faith and fairness that the law requires. As custodian
of corporate records, he should also have known that the first two letters sent to
Clemente were returned because the P.O. Box had been closed. Thus, we are
surprised – given his knowledge of the law and of corporate records – that he would
send the third and final letter – Clemente’s last chance before his share is sold and
his membership lost – to the same P.O. Box that had been closed.

Calatagan argues that it "exercised due diligence before the foreclosure sale" and
"sent several notices to Clemente’s specified mailing address." We do not agree;
we cannot label as due diligence Calatagan’s act of sending the December 7, 1992
letter to Clemente’s mailing address knowing fully well that the P.O. Box had been
closed. Due diligence or good faith imposes upon the Corporate Secretary – the
chief repository of all corporate records – the obligation to check Clemente’s other
address which, under the By-Laws, have to be kept on file and are in fact on file.
One obvious purpose of giving the Corporate Secretary the duty to keep the
addresses of members on file is specifically for matters of this kind, when the
member cannot be reached through his or her mailing address. Significantly, the
Corporate Secretary does not have to do the actual verification of other addressees
on record; a mere clerk can do the very simple task of checking the files as in fact
clerks actually undertake these tasks. In fact, one telephone call to Clemente’s
phone numbers on file would have alerted him of his impending loss.

Ultimately, the petition must fail because Calatagan had failed to duly observe both
the spirit and letter of its own by-laws. The by-law provisions was clearly conceived
to afford due notice to the delinquent member of the impending sale, and not just
to provide an intricate façade that would facilitate Calatagan’s sale of the share.
But then, the bad faith on Calatagan’s part is palpable. As found by the Court of
Appeals, Calatagan very well knew that Clemente’s postal box to which it sent its
previous letters had already been closed, yet it persisted in sending that final letter
to the same postal box. What for? Just for the exercise, it appears, as it had known
very well that the letter would never actually reach Clemente.1avvphi1

It is noteworthy that Clemente in his membership application had provided his


residential address along with his residence and office telephone numbers. Nothing
in Section 32 of Calatagan’s By-Laws requires that the final notice prior to the sale
be made solely through the member’s mailing address. Clemente cites our
aphorism-like pronouncement in Rizal Commercial Banking Corporation v. Court of
Appeals15 that "[a] simple telephone call and an ounce of good faith x x x could
have prevented this present controversy." That memorable observation is quite apt
in this case.

Calatagan’s bad faith and failure to observe its own By-Laws had resulted not
merely in the loss of Clemente’s privilege to play golf at its golf course and avail of
its amenities, but also in significant pecuniary damage to him. For that loss, the
only blame that could be thrown Clemente’s way was his failure to notify Calatagan
of the closure of the P.O. Box. That lapse, if we uphold Calatagan would cost
Clemente a lot. But, in the first place, does he deserve answerability for failing to
notify the club of the closure of the postal box? Indeed, knowing as he did that
Calatagan was in possession of his home address as well as residence and office
telephone numbers, he had every reason to assume that the club would not be at
a loss should it need to contact him. In addition, according to Clemente, he was
not even aware of the closure of the postal box, the maintenance of which was not
his responsibility but his employer Phimco’s.

The utter bad faith exhibited by Calatagan brings into operation Articles 19, 20 and
21 of the Civil Code,16 under the Chapter on Human Relations. These provisions,
which the Court of Appeals did apply, enunciate a general obligation under law for
every person to act fairly and in good faith towards one another. A non-stock
corporation like Calatagan is not exempt from that obligation in its treatment of its
members. The obligation of a corporation to treat every person honestly and in
good faith extends even to its shareholders or members, even if the latter find
themselves contractually bound to perform certain obligations to the corporation.
A certificate of stock cannot be a charter of dehumanization.

We turn to the matter of damages. The award of actual damages is of course


warranted since Clemente has sustained pecuniary injury by reason of Calatagan’s
wrongful violation of its own By-Laws. It would not be feasible to deliver Clemente’s
original Certificate of Stock because it had already been cancelled and a new one
issued in its place in the name of the purchases at the auction who was not
impleaded in this case. However, the Court of Appeals instead directed that
Calatagan to issue to Clemente a new certificate of stock. That sufficiently redresses
the actual damages sustained by Clemente. After all, the certificate of stock is
simply the evidence of the share.

The Court of Appeals also awarded Clemente ₱200,000.00 as moral damages,


₱100,000.00 as exemplary damages, and ₱100,000.00 as attorney’s fees. We
agree that the award of such damages is warranted.

The Court of Appeals cited Calatagan for violation of Article 32 of the Civil Code,
which allows recovery of damages from any private individual "who directly or
indirectly obstructs, defeats, violates or in any manner impedes or impairs" the
right "against deprivation of property without due process of laws." The plain letter
of the provision squarely entitles Clemente to damages from Calatagan. Even
without Article 32 itself, Calatagan will still be bound to pay moral and exemplary
damages to Clemente. The latter was able to duly prove that he had sustained
mental anguish, serious anxiety and wounded feelings by reason of Calatagan’s
acts, thereby entitling him to moral damages under Article 2217 of the Civil Code.
Moreover, it is evident that Calatagan’s bad faith as exhibited in the

course of its corporate actions warrants correction for the public good, thereby
justifying exemplary damages under Article 2229 of the Civil Code.

WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals is


AFFIRMED. Costs against petitioner. SO ORDERED.