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Cheng vs sy

G.R.
 No.
 174238. July
 7,
 2009.*

ANITA
 CHENG,
 petitioner,
 vs.
 SPOUSES
 WILLIAM
 SY

and
 TESSIE
 SY,
 respondents.

Criminal Procedure; Estafa; Batas Pambansa Blg. 22;

Bouncing Checks Law; The rule is that upon the filing of the estafa

and Batas Pambansa 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.—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.

Same; Same; Same; Same; 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 Batas Pambansa Blg. 22,

simultaneously available to the complaining party, without

traversing the prohibition against forum shopping.—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,
 465
 SCRA
 338
 (2005),
 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.
 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

_______________

*
 THIRD
 DIVISION.

156

156

SUPREME
 COURT
 REPORTS
 ANNOTATED

Cheng vs. Sy

both
 impliedly
 instituted
 in



 the
 said
 criminal
 proceedings
 to
 the

exclusion
 of
the
 other.

Same; It is now settled that rules of procedure apply even to cases

already pending at the time of their promulgation.—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.

Same; Batas Pambansa Blg. 22; Bouncing Checks Law; The

criminal action for violation of Batas Pambansa Blg. 22 includes


the corresponding civil action to recover the amount of the checks.—

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
 petitioner’s
 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.

Same; Appeals; Failure to appeal within the reglementary period

was tantamount to a waiver altogether of the remedy to recover the

civil liability of respondents.—Faced
 with
 the
 dismissal
of
 the
 BP

Blg.
 22

 cases,
 petitioner’s
 recourse
 pursuant
 to

 the
 prevailing
 rules

of
 procedure
 would
 have
 been
 to
 appeal
 the
 civil
 action
 to
 recover

the

157

VOL.
 592,
JULY
 7,
 2009

157

Cheng vs. Sy

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.
 But
 this
 rule
 admits
 of
 exceptions—(1)
 where
 the
 counsel’s

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
 client’s
 deprivation
 of
liberty
 or
property
without
 due
 process
 of
law.
 Tested
 against
 these
 guidelines,
 we
 hold

that
 petitioner’s
 lot
 falls
 within
 the
 exceptions.

Attorneys; Legal Ethics; Pleadings and Practice; Lawyers in the

government service are expected to be more conscientious in the

performance of their duties as they are subject to public scrutiny.—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.

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.

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.

Unjust Enrichment; Solutio Indebiti; 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.—We
 take
 into

consideration
 the
 trial
 court’s
 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

158

158

SUPREME
 COURT
 REPORTS
 ANNOTATED

Cheng vs. Sy

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
 another’s
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.

Procedural Rules and Technicalities; The dispensation of justice

and vindication of legitimate grievances should not be barred by

technicalities.—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.
 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,
 we
 thus
 rule,
 pro

hac vice,
in

 favor
 of
 petitioner.
PETITION
 for
 review
 on

 certiorari
 of
 an

 order
 of
 the

Regional
 Trial
 Court
 of
 Manila,
 Br.
 18.


The
 facts
 are
 stated
 in



 the
 opinion
 of
the
 Court.

James Dennis C. Gumpal for
 petitioner.

Felipe G. Pacquing
 for
 respondents.

NACHURA, J.:

This
 is
 a
 petition1
 for
 review
 on
 certiorari
 under
 Rule
 45

of
 the
 Rules
 of
 Court
 of
the
 Order
 dated
 January
 2,
 20062
 of

the

_______________

1
 Rollo,
 pp.
 3-19.

2
 Id.,
 at
 pp.
 22-27.

159

VOL.
 592,
JULY
 7,
 2009

159

Cheng vs. Sy

Regional
 Trial
 Court
 (RTC),
Branch
 18,
 Manila
 in



 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
 o
t

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
 Order5
 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.

_______________

3
 Id.,
 at
 pp.
 45-47.

4
 Id.,
 at
 pp.
 48-50.

5
 Id.,
 at
 pp.
 42-44.

160

160

SUPREME
 COURT
 REPORTS
 ANNOTATED

Cheng vs. Sy

On
 April
 26,
 2005,
 petitioner
 lodged
 against
 respondents

before
 the
 RTC,
 Branch
 18,
Manila,
 a
 complaint6
 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
 Order7
 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
 reconsideration8
 which
 the

court
 denied
 in

 its
 Order9
 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—

_______________

6
Id.,
 at
 pp.
 51-53.

7
Supra
 note
 2.

8
Rollo,
 pp.
 28-38.

9
Id.,
 at
 p.
41.

10
 Id.,
 at
 p.
6.

161

VOL.
 592,
JULY
 7,
 2009

161

Cheng vs. Sy

(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
 o
t
 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
 3111
 of
the
 Civil
 Code;
 and

(6) the
 claim
 for
 civil
 liability
 for
 damages
 may
 be
 had
 under

Article
 2912
 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

_______________

11
 Art.
 31. When
 the
 civil
 action
 is
 based
 on



 an

 obligation
 not

arising
 from
 the
 act
 or
 omission
 complained
 of
 as
 a
 felony,
 such
 civil

action
 may
 proceed
 independently
 of
 the
 criminal
 proceedings
 and

regardless
 of
the
 result
 of
the
 latter.

12
 Art.
 29. When
 the
 accused
 in



 a
 criminal
 prosecution
 is

acquitted
 on

 the
 ground
 that
 his
 guilt
 has
 not
 been
 proved
 beyond

reasonable
 doubt,
 a
 civil
 action
 for
 damages
 for
 the
 same
 act
 or

omission
 may
 be
 instituted.
 Such
 action
 requires
 only
 a
 preponderance

of
 evidence.
 Upon
 motion
 of
 the
 defendant,
 the
 court
 may
 require
 the

plaintiff
 to
 file
 a
 bond
 to
 answer
 for
 damages
 in



 case
 the
 complaint

should
 be
 found
 to



 be
 malicious.

162

162

SUPREME
 COURT
 REPORTS
 ANNOTATED

Cheng vs. Sy

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.

Ponferrada14
 that

_______________

13
 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 civil 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.


When
 the
 offended
 party
 seeks
 to
 enforce
 civil
 liability
 against
 the

accused
 by
 way
 of
 moral,
 nominal,
 temperate
 or
 exemplary
 damages,

the
 filing
 fees
 for
 such
 civil
action
 as
 provided
 in



 these
 Rules
 shall

constitute
 a
 first
 lien
 on



 the
 judgment
 except
 in

 an

 award
 for
 actual

damages.


In

 cases
 wherein
 the
 amount
 of
 damages,
 other
 than
 actual,
 is

alleged
 in

 the
 complaint
 or
information,
 the
 corresponding
 filing
 fees

shall
 be
 paid
 by
 the
 offended
 party
 upon
 the
 filing
 thereof
 in

 court
 for

trial.
 (Rule
 111,
 1988
 Rules
 on



Criminal
 Procedure)

14
 G.R.
 Nos.
 155531-34,
 July
29,
 2005,
 465



 SCRA
 338.

163

VOL.
 592,
JULY
 7,
 2009

163

Cheng vs. Sy

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
 doubt—where
 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

 nature—produced
 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

petitioner’s

_______________

15
 Rodriguez v. Ponferrada, id.,
 at
 p.
350.

16
 Ibid.

17 Jarantilla v. Court of Appeals,
 253
 Phil.
 425,
 433;
 171
 SCRA
 429,

439
 (1989),
 citing
 Bernaldes, Jr. v. Bohol Land Transportation, Inc.,
 117

Phil.
 288,
 291-292;
 7



 SCRA
 276,
 280
 (1963)
 and Bachrach Motors Co. v.

Gamboa,
 101

 Phil.
 1219
 (1957).

164

164

SUPREME
 COURT
 REPORTS
 ANNOTATED

Cheng vs. Sy

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.—

x
 x
 x

(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

165

VOL.
 592,
JULY
 7,
 2009

165

Cheng vs. Sy

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
 petitioner’s
 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
 petitioner’s
 Notice
 of

Claim
 involving
 the
 same
 amount
 filed
 in



 Special

Proceedings
 No.
 98-88390
 (Petition for Voluntary Insolvency

by Kolin Enter-

_______________

18
 Tan, Jr. v. Court of Appeals,
 424



 Phil.
 556,
 559;
 373

 SCRA
 524,
 536

(2002).

19
 Hyatt Industrial Manufacturing Corp. v. Asia Dynamic Electrix

Corp.,
 G.R.
 No.
 163597,
 July
 29,
 2005,
 465



 SCRA
 454,
 461-462.

20
 Id.

166

166

SUPREME
 COURT
 REPORTS
 ANNOTATED

Cheng vs. Sy

prises, 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
 petitioner’s
 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,

petitioner’s
 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
 counsel’s
 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
 client’s
 deprivation
 of
liberty
 or

property
 without
 due
 process

_______________

21
 Rollo,
 p.
23.

22
 Lynx Industries Contractor, Inc. v. Tala,
 G.R.
 No.
 164333,
 August

24,
 2007,
 531



 SCRA
 169,
 176.

167

VOL.
 592,
JULY
 7,
 2009

167

Cheng vs. Sy

of
 law.23
 Tested
 against
 these
 guidelines,
 we
 hold
 that

petitioner’s
 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
 court’s

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

_______________

23
 Ceniza-Manantan v. People,
 G.R.
 No.
 156248,
 August
28,
 2007,
 531

SCRA
 364,
 380.

24
 Santiago v. Atty. Rafanan,
 483
 Phil.
 94,
 105;
 440
 SCRA
 91,
 101

(2004).

25
 Ramos v. Imbang,
 A.C.
 No.
 6788,
 August
 23,
 2007,
 530

 SCRA
 759,

768.

168

168

SUPREME
 COURT
 REPORTS
 ANNOTATED

Cheng vs. Sy

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
 another’s
 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.

Ynares-Santiago (Chairperson), Chico-Nazario, Velasco,

Jr. and Peralta, JJ.,
 concur.

_______________

26
 Chieng v. Santos,
 G.R.
 No.
 169647,
 August
 31,
 2007,
 531
 SCRA

730,
 747-748.

27 LCK Industries, Inc. v. Planters Development Bank,
G.R.
 No.

170606,
 November
 23,
 2007,
538
 SCRA
 634,
 653.

28
 Id.,
 at
 p.
652.

169

VOL.
 592,
JULY
 7,
 2009

169

Cheng vs. Sy

Petition granted, Civil Case No. 05-112452 entitled Anita

Cheng vs. Sps. William Sy and Tesse Sy reinstated.

Note.—When
 a
 party
 files
 a
 criminal
 case
 for
 violation
 of

Batas
 Pambansa
 Blg.
 22,
 his
 civil
 action
 for
 recovery
 of
the

amount
 of
 the
 dishonored
 check
 is
 impliedly
 instituted

therein
 pursuant
 to
 Section
1(b)
 of
 Rules
 111
 of
 the
 2000
Rules
 on

 Criminal
 Procedure.
 (Chieng vs. Santos,
 531

SCRA
 730
 [2007])

——o0o——

© Copyright 2015 Central Book Supply, Inc. All rights reserved.


Carolino vs Senga

Before us is a petition for review under Rule 45 seeking to reverse and set aside the Decision 1 dated May 25, 2009 of the Court of Appeals
(CA) in CA-G.R. SP No. 103502 and the Resolution2 dated September 10, 2009 denying reconsideration thereof.

The factual and legal antecedents are as follows:

On December 1, 1976, Jeremias A. Carolino, petitioner's husband, retired3


from the Armed Forces of the Philippines (AFP) with the rank of
Colonel under General Order No. 1208 dated November 29, 1976, pursuant to the provisions of Sections 1(A) and 10 of Republic Act (RA) No.
340,4 as amended. He started receiving his monthly retirement pay in the amount of P18,315.00 in December 1976 until the same was
withheld by respondents in March 2005. On June 3, 2005, Jeremias wrote a letter 5 addressed to the AFP Chief of Staff asking for the reasons
of the withholding of his retirement pay. In a letter reply,6Myrna F. Villaruz, LTC (FS) PA, Pension and Gratuity Officer of the AFP Finance
Center, informed Jeremias that his loss of Filipino citizenship caused the deletion of his name in the alpha list of the AFP Pensioners' Payroll
effective March 5, 2005; and that he could avail of re-entitlement to his retirement benefits and the restoration of his name in the AFP
Pensioners' Masterlist Payroll by complying with the requirements prescribed under RA No. 9225, or the Dual Citizenship Act.

It appeared that the termination of Jeremias' pension was done pursuant to Disposition Form7 dated October 29, 2004, which was approved
by the Chief of Staff and made effective in January 2005. In the said Disposition Form, the AFP Judge Advocate General opined that under the
provisions of Sections 4, 5, and 6 of RA No. 340, retired military personnel are disqualified from receiving pension benefits once incapable to
render military service as a result of his having sworn allegiance to a foreign country. It was also mentioned that termination of retirement
benefits of pensioner of the AFP could be done pursuant to the provisions of Presidential Decree (PD) No. 1638 8 which provides that the name
of a retiree who loses his Filipino citizenship shall be removed from the retired list and his retirement benefits terminated upon such loss. It
being in consonance with the policy consideration that all retirement laws inconsistent with the provisions of PD No. 1638 are repealed and
modified accordingly.

On August 24, 2006, Jeremias filed with the Regional Trial Court (RTC) of Quezon City, a Petition for Mandamus9 against Gen. Generoso
Senga, as Chief of Staff of the AFP, Brig. Gen. Fernando Zabat, as Chief of the AFP Finance Center, Comm. Reynaldo Basilio, as Chief of the
AFP-GHQ Management and Fiscal Office, and Comm. Emilio Marayag, Pension and Gratuity Management Officer, Pension and Gratuity
Management Center, AFP Finance Center, seeking reinstatement of his name in the list of the AFP retired officers, resumption of payment of
his retirement benefits under RA No. 340, and the reimbursement of all his retirement pay and benefits which accrued from March 5, 2005 up
to the time his name is reinstated and, thereafter, with claim for damages and attorney's fees. The case was docketed as Civil Case No. Q-06-
58686, and raffled off to Branch 220.

On February 26, 2007, the RTC rendered its Decision10 granting the petition for mandamus, the dispositive portion of which reads: chanroblesvi rt uallawl ibra ry

WHEREFORE, judgment is hereby rendered ordering General Hermogenes Esperon, Jr., as Chief of Staff of the AFP, Brigadier General
Fernando Zabat, as the Commanding Officer of the AFP Finance Center, Commodore Reynaldo Basilio, as Chief of the AFP-GFIQ Management
and Fiscal Office, and Captain Theresa M. Nicdao, as Pension and Gratuity Officer of the Pension and Gratuity Management Center, or any of
their respective successors and those taking instructions from them as agents or subordinates, to: chanroblesvi rt uallawl ibra ry

a. immediately reinstate the name of petitioner in the list of retired AFP Officers, and to resume payment of his retirement
benefits under RA 340; and

b. release to [petitioner] all retirement benefits due him under RA 340 which accrued to him from March 2005 continuously
up to the time his name is reinstated in the list of AFP retired officers.11

The RTC found that the issue for resolution is the applicability of RA No. 340 and PD No. 1638 upon Jeremias' retirement benefits. It found
that he retired as a commissioned officer of the AFP in 1976; thus, RANo. 340 is the law applicable in determining his entitlement to his
retirement benefits and not PD No. 1638 which was issued only in 1979. Article 4 of the Civil Code provides that "laws shall have no
retroactive effect unless the contrary is provided." PD No. 1638 does not provide for such retroactive application. Also, it could not have been
the intendment of PD No. 1638 to deprive its loyal soldiers of a monthly pension during their old age especially where, as here, the right had
been vested to them through time. RA No. 340 does not provide that the loss of Filipino citizenship would terminate one's retirement benefits;
and that PD No. 1638 does not reduce whatever benefits that any person has already been receiving under existing law.

Respondents sought reconsideration,


12 but the RTC denied the same in an Order13 dated May 25, 2007, the decretal portion of which
reads:chanroble svirtual lawlib rary

WHEREFORE, premises considered, the instant Motion for Reconsideration is hereby DENIED, considering that the questioned decision has
not yet attained.its finality. The Motion for Execution in the meantime is hereby DENIED.14 cralawlawlibra ry

Aggrieved, respondents elevated the case to the CA. After the submission of the parties' respective memoranda, the case was submitted for
decision.

Jeremias died on September 30, 2007


15 and was substituted by his wife, herein petitioner.

On May 25, 2009, the CA granted respondents' appeal. The dispositive portion of the CA decision reads: chanroblesvi rtua llawli bra ry

WHEREFORE, premises considered, the instant appeal is GRANTED. The appealed decision is REVOKED and SET ASIDE.16 cralawlawlibrary

In so ruling, the CA found that while it is true that Jeremias retired in 1976 under the provisions of RA No. 340, as amended, which does not
contain any provision anent cessation or loss of retirement benefits upon acquiring another citizenship, PD No. 1638, which was signed in
1979, effectively repealed RA No. 340, as amended. Section 27 of PD No. 1638, which provides that the name of a retiree who loses his
Filipino citizenship shall be removed from the retired list and his retirement benefits terminated upon such loss, was correctly made applicable
to Jeremias' retirement benefits. Logic dictates that since Jeremias had already renounced his allegiance to the Philippines, he cannot now be
compelled by the State to render active service and to render compulsory military service when the need arises. The CA found that for the
writ of mandamus to lie, it is essential that Jeremias should have a clear legal right to the thing demanded and it must be the imperative duty
of respondents to perform the act required which petitioner failed to show; thus, mandamus will not lie.

Petitioner's motion for reconsideration was denied in a Resolution dated September 10, 2009.

Hence, this petition raising the following: chanroble svirtual lawlib rary

RESPONDENT COURT OF APPEALS COMMITTED GRAVE REVERSIBLE ERROR IN RENDERING THE ASSAILED DECISION AND RESOLUTION
WHICH SET ASIDE AND REVERSED THE 26 FEBRUARY 2007 DECISION OF THE QC RTC BECAUSE: chanroblesvi rtua llawlib ra ry

PD 1638 should not have been applied and cannot be used against petitioner as her husband's retirement and pension were granted to him
by the AFP under RA 340 which was not superseded by PD 1638, a later statute.

Petitioner correctly availed of the remedy of mandamus to compel the reinstatement of his pension and benefits from the AFP under RA 340
as PD 1638 was not applicable to him.
Petitioner contends that her husband's retirement from the active service in 1976 was pursuant to the provisions of RA No. No. 340 as PD No.
1638 was not yet in existence then, and there was nothing in RA No. 340 that disqualifies a retired military personnel from receiving
retirement benefits after acquiring foreign citizenship. The concept of retirement benefits is such that one is entitled to them for services
already rendered and not for those to be made at a future time. Retirement benefits due petitioner's husband under RA No. 340, is an
acquired right which cannot be taken away by a subsequent law. PD No. 1638 does not expressly provide for its retroactive application.
Respondents, being officers of the AFP tasked to implement the provisions of RA No. 340 have neglected their function thereunder by delisting
petitioner's husband as a retiree, thus, mandamus is proper.

In his Comment, the Solicitor General argues that PD No. 1638 applies to all military personnel in the service of the AFP whether active or
retired; hence, it applies retroactively to petitioner's husband. Even when a retiree is no longer in the active service, his being a Filipino still
makes him a part of the Citizen Armed Forces; that whether a military personnel retires under the provisions of RA No. 340 or under PD No.
1638, he is still in the service of the military and/or the State only that he is retired, thus, they should not be treated differently upon the loss
of Filipino citizenship. He argues when there is an irreconcilable conflict between the two laws of different vintages, i.e., RA No. 340 and PD
No. 1638, the latter enactment prevails.

The Solicitor General argues that mandamus will not issue to enforce a right to compel compliance with a duty which is questionable or over
which a substantial doubt exists. In this case, petitioner's husband does not have a well-defined, clear and certain legal right to continuously
receive retirement benefits after becoming an American citizen. Likewise, the AFP does not have a clear and imperative duty to grant the said
benefits considering that Section 27 of PD No. 1638 provides that the name of a retiree who loses his Filipino citizenship shall be removed
from the retired list and his retirement benefits terminated upon such loss.

Petitioner filed her reply thereto. We find merit in the petition.

Petitioner's husband retired in 1976 under RA No. 340. He was already receiving his monthly retirement benefit in the amount of P18,315.00
since December 1976 until it was terminated in March 2005. Section 5, RA No. 340 provides: chanroblesvi rtua llawli brary

Sec. 5. Officers and enlisted men placed in the retired list shall be subject to the rules and articles of war and to trial by court-martial for any
breach thereof. At any time said officers and enlisted men may be called to active service by the President. Refusal on the part of any officer
or enlisted man to perform such services shall terminate his right to further participation in the benefits of this Act provided he resides in the
Philippines and is physically fit for service. Such fitness for service shall be determined by applicable regulations.
The afore-quoted provision clearly shows how a retiree's retirement benefits may be terminated, i.e., when the retiree refuses to perform
active service when called to do so provided that (1) the retiree resides in the Philippines and (2) is physically fit for service. There is no other
requirement found in the law which would be the reason for the termination of a retiree's retirement benefits. Petitioner's husband was never
called to perform active service and refused to do so, however, his retirement benefit was terminated. The reason for such termination was
his loss of Filipino citizenship based on Section 27 of PD No. 1638, to wit: chanroblesv irt uallawl ibra ry

Section 27. Military personnel retired under Sections 4, 5, 10, 11 and 12 shall be carried in the retired list of the Armed Forces of the
Philippines. The name of a retiree who loses his Filipino citizenship shall be removed from the retired list and his retirement benefits
terminated upon such loss.
We find that the CA erred in applying PD No. 1638 to the retirement benefits of petitioner's husband.

Firstly, PD No. 1638 was signed by then President Ferdinand Marcos on September 10, 1979. Under Article 4 of the Civil Code, it is provided
that laws shall have no retroactive effect, unless the contrary is provided. It is said that the law looks to the future only and has no
retroactive effect unless the legislator may have formally given that effect to some legal provisions; that all statutes are to be construed as
17
having only prospective operation, unless the purpose and intention of the legislature to give them a retrospective effect is expressly declared
or is necessarily implied from the language used; and that every case of doubt must be resolved against retrospective effect.
18 These
principles also apply to amendments of statutes.

PD No. 1638 does not contain any provision regarding its retroactive application, nor the same may be implied from its language. In fact,
Section 36 of PD No. 1638 clearly provides that the decree shall take effect upon its approval. As held in Parreno v. COA, there is no
19
question that PD No. 1638, as amended, applies prospectively. Since PD No. 1638, as amended, is about the new system of retirement and
separation from service of military personnel, it should apply to those who were in the service at the time of its approval. Conversely, PD
20
No. 1638 is not applicable to those who retired before its effectivity in 1979. The rule is familiar that after an act is amended, the original act
continues to be in force with regard to all rights that had accrued prior to such amendment.
21

Moreover, Section 27 of PD No. 1638 specifically provides for the retirees to whom the law shall be applied, to wit: chanroblesvi rtua llawlib ra ry
Section 27. Military personnel retired under Sections 4, 5, 10, 11 and 12 shall be carried in the retired list of the Armed Forces of the
Philippines. The name of a retiree who loses his Filipino citizenship shall be removed from the retired list and his retirement benefits
terminated upon such loss, (emphasis supplied)
Notably, petitioner's husband did not retire under those above-enumerated Sections of PD No. 1638 as he retired under RA No. 340.

Secondly, it has been held that before a right to retirement benefits or pension vests in an employee, he must have met the stated conditions
of eligibility with respect to the nature of employment, age, and length of service.
22
Undeniably, petitioner's husband had complied with the
conditions of eligibility to retirement benefits as he was then receiving his retirement benefits on a monthly basis until it was terminated.
Where the employee retires and meets the eligibility requirements, he acquires a vested right to the benefits that is protected by the due
23 It is only upon retirement that military personnel acquire a vested right to retirement benefits.24 Retirees enjoy a
process clause.
protected property interest whenever they acquire a right to immediate payment under pre-existing law.
25

In Ayog v. Cusi,
26 we expounded the nature of a vested right, thus: chanroblesvi rtua llawlib ra ry

"A right is vested when the right to enjoyment has become the property of some particular person or persons as a present interest" (16 C.J.S.
1173). It is "the privilege to enjoy property legally vested, to enforce contracts, and enjoy the rights of property conferred by the existing
law" (12 C.J.S. 955, Note 46, No. 6) or "some right or interest in property which has become fixed and established and is no longer open to
doubt or controversy" (Downs vs. Blount 170 Fed. 15, 20, cited in Balboa vs. Farrales, 51 Phil. 498, 502).

The due process clause prohibits the annihilation of vested rights. "A state may not impair vested rights by legislative enactment, by the
enactment or by the subsequent repeal of a municipal ordinance, or by a change in the constitution of the State, except in a legitimate
exercise of the police power" (16 C.J.S. 1177-78).

It has been observed that, generally, the term "vested right" expresses the concept of present fixed interest, which in right reason and
natural justice should be protected against arbitrary State action, or an innately just and imperative right which an enlightened free society,
sensitive to inherent and irrefragable individual rights, cannot deny (16 C.J.S. 1174, Note 71, No. 5, citing Pennsylvania Greyhound Lines,
Inc. vs. Rosenthal, 192 Atl. 2nd 587).27 cralawlawlib rary

Petitioner's husband acquired vested right to the payment of his retirement benefits which must be respected and cannot be affected by the
subsequent enactment of PD No. 1638 which provides that loss of Filipino citizenship terminates retirement benefits. Vested rights include not
only legal or equitable title to the enforcement of a demand, but also an exemption from new obligations after the right has vested.
28

In fact, Sections 33 and 35 of PD No. 1638 recognize such vested right, to wit: chanroblesvi rtua llawlib ra ry

Section 33. Nothing in this Decree shall be construed in any manner to reduce whatever retirement and separation pay or gratuity or other
monetary benefits which any person is heretofore receiving or is entitled to receive under the provisions of existing law.

xxxx

Section. 35. Except those necessary to give effect to the provisions of this Decree and to preserve the rights granted to retired or separated
military personnel, all laws, rules and regulations inconsistent with the provisions of this Decree are hereby repealed or modified accordingly.
Section 33 of PD No. 1638 is clear that the law has no intention to reduce or to revoke whatever retirement benefits being enjoyed by a
retiree at the time of its passage. Hence, Section 35 provides for an exception to what the decree repealed or modified, i.e., except those
necessary to preserve the rights granted to retired or separated military personnel.

We also find that the CA erred in finding that mandamus will not lie.

Section 3, Rule 65 of the Rules of Court lay down under what circumstances petition for mandamus may be filed, to wit: chanroble svirtual lawlib rary

SEC. 3. Petition for mandamus. - When any tribunal, corporation, board, officer or person unlawfully neglects the performance of an act which
the law specifically enjoins as a duty resulting from an office, trust, or station, or unlawfully excludes another from the use and enjoyment of
a right or office to which such other is entitled, and there is no other plain, speedy and adequate remedy in the ordinary course of law, the
person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment be
rendered commanding the respondent, immediately or at some other time to be specified by the court, to do the act required to be done to
protect the rights of the petitioner, and to pay the damages sustained by the petitioner by reason of the wrongful acts of the respondent.

A writ of mandamus can be issued only when petitioner's legal right to the performance of a particular act which is sought to be compelled is
clear and complete. A clear legal right is a right which is indubitably granted by law or is inferable as a matter of law. 29 A doctrine well-
embedded in our jurisprudence is that mandamus will issue only when the petitioner has a clear legal right to the performance of the act
sought to be compelled and the respondent has an imperative duty to perform the same.30 The remedy of mandamus lies to compel the
performance of a ministerial duty.31 A purely ministerial act or duty is one that an officer or tribunal performs in a given state of facts, in a
prescribed manner, in obedience to the mandate of a legal authority, without regard to or the exercise of its own judgment upon the propriety
or impropriety of the act done.32 If the law imposes a duty upon a public officer, and gives him the right to decide how or when the duty shall
be performed, such duty is discretionary and not ministerial.33

The petition for mandamus filed by petitioner's husband with the RTC was for the payment of his terminated retirement benefits, which has
become vested, and being a ministerial duty on the part of the respondents to pay such claim, mandamus is the proper remedy to compel
such payment.

The doctrine of exhaustion of administrative remedies calls for resort first to the appropriate administrative authorities in the resolution of a
controversy falling under their jurisdiction before the same may be elevated to the courts of justice for review. 34 However, the principle of
exhaustion of administrative remedies need not be adhered to when the question is purely legal. 35 This is because issues of law cannot be
resolved with finality by the administrative officer.36 Appeal to the administrative officer would only be an exercise in futility.37 Here, the
question raised is purely legal, i.e., what law should be applied in the payment of retirement benefits of petitioner's husband. Thus, there was
no need to exhaust all administrative remedies before a judicial relief can be sought. cralawred

WHEREFORE, the petition is GRANTED. The Decision dated May 25, 2009 and the Resolution dated September 10, 2009 of the Court of
Appeals are hereby REVERSED and SET ASIDE. The Decision dated February 26, 2007 of the Regional Trial Court of Quezon City, Branch
220, is AFFIRMED.

SO ORDERED. chanroblesvi rtual lawlib rar


Guy vs CA

This petition for review on certiorari assails the January 22, 2004 Decision 1 of the Court of Appeals in CA-G.R. SP No. 79742,
which affirmed the Orders dated July 21, 20002 and July 17, 20033 of the Regional Trial Court of Makati City, Branch 138 in SP
Proc. Case No. 4549 denying petitioner's motion to dismiss; and its May 25, 2004 Resolution 4 denying petitioner's motion for
reconsideration.

The facts are as follows:

On June 13, 1997, private respondent-minors Karen Oanes Wei and Kamille Oanes Wei, represented by their mother Remedios
Oanes (Remedios), filed a petition for letters of administration5 before the Regional Trial Court of Makati City, Branch 138. The
case was docketed as Sp. Proc. No. 4549 and entitled Intestate Estate of Sima Wei(a.k.a. Rufino Guy Susim).

Private respondents alleged that they are the duly acknowledged illegitimate children of Sima Wei, who died intestate in Makati
City on October 29, 1992, leaving an estate valued at P10,000,000.00 consisting of real and personal properties. His known
heirs are his surviving spouse Shirley Guy and children, Emy, Jeanne, Cristina, George and Michael, all surnamed Guy. Private
respondents prayed for the appointment of a regular administrator for the orderly settlement of Sima Wei's estate. They likewise
prayed that, in the meantime, petitioner Michael C. Guy, son of the decedent, be appointed as Special Administrator of the
estate. Attached to private respondents' petition was a Certification Against Forum Shopping 6 signed by their counsel, Atty.
Sedfrey A. Ordoñez.

In his Comment/Opposition,7 petitioner prayed for the dismissal of the petition. He asserted that his deceased father left no debts
and that his estate can be settled without securing letters of administration pursuant to Section 1, Rule 74 of the Rules of Court.
He further argued that private respondents should have established their status as illegitimate children during the lifetime of
Sima Wei pursuant to Article 175 of the Family Code.

The other heirs of Sima Wei filed a Joint Motion to Dismiss 8 on the ground that the certification against forum shopping should
have been signed by private respondents and not their counsel. They contended that Remedios should have executed the
certification on behalf of her minor daughters as mandated by Section 5, Rule 7 of the Rules of Court.

In a Manifestation/Motion as Supplement to the Joint Motion to Dismiss,9 petitioner and his co-heirs alleged that private
respondents' claim had been paid, waived, abandoned or otherwise extinguished by reason of Remedios' June 7, 1993 Release
and Waiver of Claim stating that in exchange for the financial and educational assistance received from petitioner, Remedios
and her minor children discharge the estate of Sima Wei from any and all liabilities.

The Regional Trial Court denied the Joint Motion to Dismiss as well as the Supplemental Motion to Dismiss. It ruled that while
the Release and Waiver of Claim was signed by Remedios, it had not been established that she was the duly constituted
guardian of her minor daughters. Thus, no renunciation of right occurred. Applying a liberal application of the rules, the trial court
also rejected petitioner's objections on the certification against forum shopping.

Petitioner moved for reconsideration but was denied. He filed a petition for certiorari before the Court of Appeals which affirmed
the orders of the Regional Trial Court in its assailed Decision dated January 22, 2004, the dispositive portion of which states:

WHEREFORE, premises considered, the present petition is hereby DENIED DUE COURSE and accordingly
DISMISSED, for lack of merit. Consequently, the assailed Orders dated July 21, 2000 and July 17, 2003 are hereby
both AFFIRMED. Respondent Judge is hereby DIRECTED to resolve the controversy over the illegitimate filiation of the
private respondents (sic) minors [-] Karen Oanes Wei and Kamille Oanes Wei who are claiming successional rights in
the intestate estate of the deceased Sima Wei, a.k.a. Rufino Guy Susim.

SO ORDERED.10

The Court of Appeals denied petitioner's motion for reconsideration, hence, this petition.

Petitioner argues that the Court of Appeals disregarded existing rules on certification against forum shopping; that the Release
and Waiver of Claim executed by Remedios released and discharged the Guy family and the estate of Sima Wei from any
claims or liabilities; and that private respondents do not have the legal personality to institute the petition for letters of
administration as they failed to prove their filiation during the lifetime of Sima Wei in accordance with Article 175 of the Family
Code.
Private respondents contend that their counsel's certification can be considered substantial compliance with the rules on
certification of non-forum shopping, and that the petition raises no new issues to warrant the reversal of the decisions of the
Regional Trial Court and the Court of Appeals.

The issues for resolution are: 1) whether private respondents' petition should be dismissed for failure to comply with the rules on
certification of non-forum shopping; 2) whether the Release and Waiver of Claim precludes private respondents from claiming
their successional rights; and 3) whether private respondents are barred by prescription from proving their filiation.

The petition lacks merit.

Rule 7, Section 5 of the Rules of Court provides that the certification of non-forum shopping should be executed by the plaintiff
or the principal party. Failure to comply with the requirement shall be cause for dismissal of the case. However, a liberal
application of the rules is proper where the higher interest of justice would be served. In Sy Chin v. Court of Appeals,11 we ruled
that while a petition may have been flawed where the certificate of non-forum shopping was signed only by counsel and not by
the party, this procedural lapse may be overlooked in the interest of substantial justice.12 So it is in the present controversy
where the merits13 of the case and the absence of an intention to violate the rules with impunity should be considered as
compelling reasons to temper the strict application of the rules.

As regards Remedios' Release and Waiver of Claim, the same does not bar private respondents from claiming successional
rights. To be valid and effective, a waiver must be couched in clear and unequivocal terms which leave no doubt as to the
intention of a party to give up a right or benefit which legally pertains to him. A waiver may not be attributed to a person when its
terms do not explicitly and clearly evince an intent to abandon a right. 14

In this case, we find that there was no waiver of hereditary rights. The Release and Waiver of Claim does not state with clarity
the purpose of its execution. It merely states that Remedios received P300,000.00 and an educational plan for her minor
daughters "by way of financial assistance and in full settlement of any and all claims of whatsoever nature and kind x x x against
the estate of the late Rufino Guy Susim."15 Considering that the document did not specifically mention private respondents'
hereditary share in the estate of Sima Wei, it cannot be construed as a waiver of successional rights.

Moreover, even assuming that Remedios truly waived the hereditary rights of private respondents, such waiver will not bar the
latter's claim. Article 1044 of the Civil Code, provides:

ART. 1044. Any person having the free disposal of his property may accept or repudiate an inheritance.

Any inheritance left to minors or incapacitated persons may be accepted by their parents or guardians. Parents
or guardians may repudiate the inheritance left to their wards only by judicial authorization.

The right to accept an inheritance left to the poor shall belong to the persons designated by the testator to determine the
beneficiaries and distribute the property, or in their default, to those mentioned in Article 1030. (Emphasis supplied)

Parents and guardians may not therefore repudiate the inheritance of their wards without judicial approval. This is because
repudiation amounts to an alienation of property16 which must pass the court's scrutiny in order to protect the interest of the
ward. Not having been judicially authorized, the Release and Waiver of Claim in the instant case is void and will not bar private
respondents from asserting their rights as heirs of the deceased.

Furthermore, it must be emphasized that waiver is the intentional relinquishment of a known right. Where one lacks knowledge
of a right, there is no basis upon which waiver of it can rest. Ignorance of a material fact negates waiver, and waiver cannot be
established by a consent given under a mistake or misapprehension of fact. 17

In the present case, private respondents could not have possibly waived their successional rights because they are yet to prove
their status as acknowledged illegitimate children of the deceased. Petitioner himself has consistently denied that private
respondents are his co-heirs. It would thus be inconsistent to rule that they waived their hereditary rights when petitioner claims
that they do not have such right. Hence, petitioner's invocation of waiver on the part of private respondents must fail.

Anent the issue on private respondents' filiation, we agree with the Court of Appeals that a ruling on the same would be
premature considering that private respondents have yet to present evidence. Before the Family Code took effect, the governing
law on actions for recognition of illegitimate children was Article 285 of the Civil Code, to wit:

ART. 285. The action for the recognition of natural children may be brought only during the lifetime of the presumed
parents, except in the following cases:
(1) If the father or mother died during the minority of the child, in which case the latter may file the action
before the expiration of four years from the attainment of his majority;

(2) If after the death of the father or of the mother a document should appear of which nothing had been heard and in
which either or both parents recognize the child.

In this case, the action must be commenced within four years from the finding of the document. (Emphasis supplied)

We ruled in Bernabe v. Alejo18 that illegitimate children who were still minors at the time the Family Code took effect and whose
putative parent died during their minority are given the right to seek recognition for a period of up to four years from attaining
majority age. This vested right was not impaired or taken away by the passage of the Family Code. 19

On the other hand, Articles 172, 173 and 175 of the Family Code, which superseded Article 285 of the Civil Code, provide:

ART. 172. The filiation of legitimate children is established by any of the following:

(1) The record of birth appearing in the civil register or a final judgment; or

(2) An admission of legitimate filiation in a public document or a private handwritten instrument and signed by the parent
concerned.

In the absence of the foregoing evidence, the legitimate filiation shall be proved by:

(1) The open and continuous possession of the status of a legitimate child; or

(2) Any other means allowed by the Rules of Court and special laws.

ART. 173. The action to claim legitimacy may be brought by the child during his or her lifetime and shall be transmitted
to the heirs should the child die during minority or in a state of insanity. In these cases, the heirs shall have a period of
five years within which to institute the action.

The action already commenced by the child shall survive notwithstanding the death of either or both of the parties.

ART. 175. Illegitimate children may establish their illegitimate filiation in the same way and on the same, evidence as
legitimate children.

The action must be brought within the same period specified in Article 173, except when the action is based on the
second paragraph of Article 172, in which case the action may be brought during the lifetime of the alleged parent.

Under the Family Code, when filiation of an illegitimate child is established by a record of birth appearing in the civil register or a
final judgment, or an admission of filiation in a public document or a private handwritten instrument signed by the parent
concerned, the action for recognition may be brought by the child during his or her lifetime. However, if the action is based upon
open and continuous possession of the status of an illegitimate child, or any other means allowed by the rules or special laws, it
may only be brought during the lifetime of the alleged parent.

It is clear therefore that the resolution of the issue of prescription depends on the type of evidence to be adduced by private
respondents in proving their filiation. However, it would be impossible to determine the same in this case as there has been no
reception of evidence yet. This Court is not a trier of facts. Such matters may be resolved only by the Regional Trial Court after a
full-blown trial.

While the original action filed by private respondents was a petition for letters of administration, the trial court is not precluded
from receiving evidence on private respondents' filiation. Its jurisdiction extends to matters incidental and collateral to the
exercise of its recognized powers in handling the settlement of the estate, including the determination of the status of each
heir.20 That the two causes of action, one to compel recognition and the other to claim inheritance, may be joined in one
complaint is not new in our jurisprudence.21 As held in Briz v. Briz:22

The question whether a person in the position of the present plaintiff can in any event maintain a complex action to
compel recognition as a natural child and at the same time to obtain ulterior relief in the character of heir, is one which
in the opinion of this court must be answered in the affirmative, provided always that the conditions justifying the joinder
of the two distinct causes of action are present in the particular case. In other words, there is no absolute necessity
requiring that the action to compel acknowledgment should have been instituted and prosecuted to a successful
conclusion prior to the action in which that same plaintiff seeks additional relief in the character of heir. Certainly, there
is nothing so peculiar to the action to compel acknowledgment as to require that a rule should be here applied different
from that generally applicable in other cases. x x x

The conclusion above stated, though not heretofore explicitly formulated by this court, is undoubtedly to some extent
supported by our prior decisions. Thus, we have held in numerous cases, and the doctrine must be considered well
settled, that a natural child having a right to compel acknowledgment, but who has not been in fact acknowledged, may
maintain partition proceedings for the division of the inheritance against his coheirs (Siguiong vs. Siguiong, 8 Phil., 5;
Tiamson vs. Tiamson, 32 Phil., 62); and the same person may intervene in proceedings for the distribution of the estate
of his deceased natural father, or mother (Capistrano vs. Fabella, 8 Phil., 135; Conde vs. Abaya, 13 Phil., 249; Ramirez
vs. Gmur, 42 Phil., 855). In neither of these situations has it been thought necessary for the plaintiff to show a prior
decree compelling acknowledgment. The obvious reason is that in partition suits and distribution proceedings the other
persons who might take by inheritance are before the court; and the declaration of heirship is appropriate to such
proceedings.

WHEREFORE, the instant petition is DENIED. The Decision dated January 22, 2004 of the Court of Appeals in CA-G.R. SP No.
79742 affirming the denial of petitioner's motion to dismiss; and its Resolution dated May 25, 2004 denying petitioner's motion
for reconsideration, are AFFIRMED. Let the records be REMANDED to the Regional Trial Court of Makati City, Branch 138 for
further proceedings.

SO ORDERED.
Otamias vs republic

A writ of execution lies against the pension benefits of a retired officer of the Armed Forces of the Philippines, which is the subject of a deed
of assignment drawn by him granting support to his wife and five (5) children. The benefit of exemption from execution of pension benefits is
a statutory right that may be waived, especially in order to comply with a husband's duty to provide support under Article XV of the 1987
Constitution and the Family Code.

Petitioner Edna Mabugay-Otamias (Edna) and retired Colonel Francisco B. Otamias (Colonel Otamias) were married on June 16, 1978 and had
five (5) children.1 ChanRoblesVi rtualaw lib rary

On September 2000, Edna and Colonel Otamias separated due to his alleged infidelity. 2 Their children remained with Edna.3 ChanRoblesVirtualawl ibra ry

On August 2002, Edna filed a Complaint-Affidavit against Colonel Otamias before the Provost Marshall Division of the Armed Forces of the
Philippines.4 Edna demanded monthly support equivalent to 75% of Colonel Otamias' retirement benefits.5 Colonel Otamias executed an
Affidavit, stating: chanRoblesvi rtual Lawli bra ry

That sometime in August or September 2002, I was summoned at the Office of the Provost Marshal, Philippine Army, in connection with a
complaint affidavit submitted to said Office by my wife Mrs. Edna M. Otamias signifying her intention 75% of my retirement benefits from the
AFP;

That at this point, I can only commit 50% of my retirement benefits to be pro-rated among my wife and five (5) children;

That in order to implement this compromise, I am willing to enter into Agreement with my wife covering the same;

That I am executing this affidavit to attest to the truth of the foregoing facts and whatever legal purpose it may serve.6 cralawred

On February 26, 2003, Colonel Otamias executed a Deed of Assignment where he waived 50% of his salary and pension benefits in favor of
Edna and their children.
7 The Deed of Assignment was considered by the parties as a compromise agreement.8 It stated: chanRoblesvirtua lLawl ibrary

This Assignment, made and executed unto this 26th day of February 2003 at Fort Bonifacio, Makati City, by the undersigned LTC Francisco B.
Otamias, 0-0-111045 (INP) PA, of legal age, married and presently residing at Dama De Noche St., Pembo, Makati City.

WITNESSETH

WHEREAS, the undersigned affiant is the legal husband of EDNA M. OTAMIAS and the father of Julie Ann, Jonathan, Jennifer, Jeffren and
Jemwel all residing at Patag, Cagayan de Oro City;

WHEREAS, the undersigned will be retiring from the military service and expects to receive retirement benefits from the Armed Forces of the
Philippines;

WHEREAS, the undersigned had expressed his willingness to give a share in his retirement benefits to my wife and five (5) abovenamed
children,

NOW, THEREFORE, for and in consideration of the foregoing premises, the undersigned hereby stipulated the following:

1. That the undersigned will give to my legal wife and five (5) children FIFTY PERCENT (50%) of my retirement benefits to be pro rated
among them.

2. That a separate check(s) be issued and to be drawn and encash [sic] in the name of the legal wife and five (5) children pro-rating the fifty
(50%) percent of my retirement benefits.

IN WITNESS WHEREOF, I have hereunto set my hand this 26th day of February 2003 at Fort Bonifacio, Makati City.9 cralawred

Colonel Otamias retired on April 1, 2003.


10 ChanRoblesVirtualawl ibra ry

The agreement was honored until January 6, 2006.


11 Edna alleged that "the A[rmed] F[orces] [of the] Philippines] suddenly decided not to

honor the agreement"


12 between Colonel Otamias and his legitimate family.

13 dated April 3, 2006, the Armed Forces of the Philippines Pension and Gratuity Management Center (AFP PGMC) informed Edna
In a letter
that a court order was required for the AFP PGMC to recognize the Deed of Assignment.
14 ChanRoblesVi rt ualawlib ra ry

15 dated April 17, 2006, the AFP PGMC reiterated that it could not act on Edna's request to receive a portion of Colonel
In another letter
Otamias' pension "unless ordered by [the] appropriate court."
16 ChanRobles Vi rtualaw lib rary

Heeding the advice of the AFP PGMC, Edna, on behalf of herself and Jeffren M. Otamias and Jemwel M. Otamias (Edna, et al.), filed before the
Regional Trial Court of Cagayan de Oro, Misamis Oriental an action for support, docketed as F.C. Civil Case No. 2006-039.
17 ChanRoblesVi rt ualawlib ra ry

The trial court's Sheriff tried to serve summons on Colonel Otamias several times, to no avail.
18Substituted service was resorted

to.
19 Colonel Otamias was subsequently declared in default for failure to file a responsive pleading despite order of the trial court.20 ChanRoblesVirtualawl ibra ry

The trial court ruled in favor of Edna, et al. and ordered the automatic deduction of the amount of support from the monthly pension of
Colonel Otamias.
21 ChanRoblesVirt ualawli bra ry

The dispositive portion of the trial court's Decision stated: chanRoblesvirtua lLawl ib rary

ALL THE FOREGOING CONSIDERED, and in consonance with the legal obligation of the defendant to the plaintiffs, the Armed Forces of the
Philippines, through its Finance Center and/or appropriate Finance Officer thereof, is thereby ordered to release to Edna Mabugay Otamias
and minor Jemwel M. Otamias, herein represented by his mother Edna, their fifty (50%) per cent share of each of the monthly pension due to
Colonel Francisco B. Otamias, AFP PA (Retired).

Defendant Francisco Otamias is also ordered to pay plaintiff Edna M. Otamias, fifty (50%) per cent of whatever retirement benefits he has
already received from the Armed Forces of the Philippines AND the arrears in support, effective January 2006 up to the time plaintiff receives
her share direct from the Finance Center of the Armed Forces of the Philippines.

IT IS SO ORDERED.22 cralawred

The Armed Forces of the Philippines, through the Office of the Judge Advocate General, filed a Manifestation/Opposition
23 to the Decision of

the trial court, but it was not given due course due to its late filing.
24 ChanRoblesVi rtua lawlib rary

Edna, et al., through counsel, filed a Motion for Issuance of Writ of Execution
25 dated February 22, 2008. The trial court granted the Motion,

and a writ of execution was issued by the trial court on April 10, 2008.
26 ChanRoblesVi rt ualawlib ra ry

The Armed Forces of the Philippines Finance Center (AFP Finance Center), tlirough the Office of the Judge Advocate General, filed a Motion to
Quash
27 the writ of execution and argued that the AFP Finance Center's duty to disburse benefits is ministerial. It releases benefits only upon

the AFP PGMC's approval.


28 ChanRoblesVirtualawl ibra ry

The trial court denied the Motion to Quash and held that: chanRoblesvirtual Lawlib ra ry

Under the law and existing jurisprudence, the "right to support" is practically equivalent to the "right to life." The "right to life" always takes
precedence over "property rights." The "right to support/life" is also a substantive right which always takes precedence over
technicalities/procedural rules. It being so, technical rules must yield to substantive justice. Besides, this Court's Decision dated February 27,
2007 has long acquired finality, and as such, is ripe for enforcement/execution.

THE FOREGOING CONSIDERED, the instant Motion is hereby DENIED.29 cralawred

The AFP PGMC moved for reconsideration of the order denying the Motion to Quash,
30 but the Motion was also denied by the trial court in the

Order
31 dated August 6, 2008.

A Notice of Garnishment was issued by the trial court on July 15, 2008 and was received by the AFP PGMC on September 9, 2008.
32 ChanRoblesVi rtua lawlib rary

The AFP PGMC filed before the Court of Appeals a Petition for Certiorari and Prohibition.
33 ChanRoblesVi rtua lawlib rary

The Court of Appeals granted


34
the Petition for Certiorari and Prohibition and partially nullified the trial court's Decision insofar as it directed
the automatic deduction of support from the pension benefits of Colonel Otamias.

The Court of Appeals discussed that Section 31


35
of Presidential Decree No. 1638, otherwise known as the AFP Military Personnel Retirement
and Separation Decree of 1979, "provides for the exemption of the monthly pension of retired military personnel from execution and
attachment[,]"
36 while Rule 39, Section 13 of the Rules of Court provides: chanRoblesvi rtua lLawl ibra ry

SEC. 13. Property exempt from execution. Except as otherwise expressly provided by law, the following property, and no other, shall be
exempt from execution:

. . . .

(1) The right to receive legal support, or money or property obtained as such support, or any pension or gratuity from the Government[.] cralawred

The Court of Appeals also cited Pacific Products, Inc. vs. Ong:
37

[M]oneys sought to be garnished, as long as they remain in the hands of the disbursing officer of the Government, belong to the latter,
although the defendant in garnishment may be entitled to a specific portion thereof. And still another reason which covers both of the
foregoing is that every consideration of public policy forbids it.38 cralaw red

In addition, the AFP PGMC was not impleaded as a party in the action for support; thus, it is not bound by the Decision.
39ChanRoblesVirt ualawli bra ry

The dispositive portion of the Court of Appeals Decision reads: chanRoblesvi rtua l Lawlib rary

WHEREFORE, the petition is GRANTED. The assailed Decision of the Regional Trial Court, Branch 19, Cagayan de Oro City dated February
27, 2007 in Civil Case No. 2006-039 is PARTIALLY NULLIFIED in so far as it directs the Armed Forces of the Philippines Finance Center to
automatically deduct the financial support in favor of private respondents, Edna Otamias and her children Jeffren and Jemwel Otamias, from
the pension benefits of Francisco Otamias, a retired military officer. The Order dated June 10, 2008, Order dated August 6, 2008 and Writ of
Execution dated April 10, 2008, all issued by the court a quoare likewise SET ASIDE. Perforce, let a writ of permanent injunction issue
enjoining the implementation of the assailed Writ of Execution dated April 10, 2008 and the corresponding Notice of Garnishment dated July
15, 2008. No pronouncement as to costs.

SO ORDERED.40 (Emphasis in the original) cralawred

Edna, et al. moved for reconsideration, but the Motion was denied by the Court of Appeals.
41 ChanRoblesVi rtua lawlibra ry

Edna, et al. filed before this Court a Petition for Review on Certiorari
42 on November 11, 2009. In the Resolution43 dated January 20, 2010,
this Court required respondent to comment.

In the Resolution
44 dated August 4, 2010, this Court noted the Comment filed by the Office of the Solicitor General and required Edna, et al.

to file a reply.
45 ChanRoblesVi rtualaw lib rary

A Reply
46 was filed on September 27, 2010.

Edna, et al. argue that the Deed of Assignment Colonel Otamias executed Is valid and legal.
47 ChanRoblesVi rtualaw lib rary

They claim that Section 31 of Presidential Decree No. 1638


48 "does not include support";49 hence, the retirement benefits of Colonel
Otamias can be executed upon.

Edna, et al. also argue that the Court of Appeals erred in granting respondent's Petition because it effectively rendered the Deed of
Assignment of no force and effect.
50 On the other hand, the trial court's Decision implements the Deed of Assignment and Edna, et al.'s right

to support.
51 ChanRoblesVi rtua lawlib rary

Further, the AFP PGMC had already recognized the validity of the agreement and had made payments to them until it suddenly stopped
payment.
52 After Edna, et al. obtained a court order, the AFP PGMC still refused to honor the Deed of Assignment.53 ChanRoblesVi rt ualawlib ra ry

The Armed Forces of the Philippines, through the Office of the Solicitor General, argues that it was not a party to the case filed by Edna, et
al.
54 Thus, "it cannot be compelled to release part of the monthly pension benefits of retired Colonel Otamias in favor of [Edna, et al]."55 ChanRoblesVi rtua lawlib rary

The Office of the Solicitor General avers that the AFP PGMC never submitted itself to the jurisdiction of the trial court.
56 It was not a party to

the case as the trial court never acquired jurisdiction over the AFP PGMC.
57 ChanRoblesVirt ualawli bra ry

The Office of the Solicitor General also argues that Section 31 of Presidential Decree No. 1638 and Rule 39, Section 13(1) of the Rules of
Court support the Court of Appeals Decision that Colonel Otamias' pension benefits are exempt from execution.
58 ChanRoblesVirtualawl ibra ry

Section 31 of Presidential Decree No. 1638 "does not deprive the survivor/s of a retired or separated officer or enlisted man of their right to
support."
59 Rather, "[w]hat is prohibited is for respondent [AFP PGMC] to segregate a portion of the pension benefit in favor of the retiree's

family while still in the hands of the A[rmed] F[orces] [of the] Philippines]."
60 ChanRoblesVi rtualawl ib rary

Thus, the AFP PGMC "cannot be compelled to directly give or issue a check in favor of [Edna, et al.] out of the pension gratuity of Col.
Otamias."
61 ChanRoblesVirt ualawli bra ry

62 Edna, et al. argue that the Armed Forces of the Philippines should not be allowed to question the legal recourse they took
In their Reply,
because it was an officer of the Armed Forces of the Philippines who had advised them to file an action for support.
63 ChanRoblesVirt ualawli bra ry

They argue that the phrase "while in the active service" in Section 31 of Presidential Decree No. 1638 refers to the "time when the retired
64who is a third person. The phrase also "serves as a timeline designed to
officer incurred his accountabilities in favor of a private creditor[,]"
separate the debts incurred by the retired officer after his retirement from those which he incurred prior thereto."
65 ChanRoblesVi rtua lawlib rary

Further, the accountabilities referred to in Section 31 of Presidential Decree No. 1638 refer to debts or loans, not to support.
66 ChanRobles Virtualawl ibra ry

The issues for resolution are:

First, whether the Court of Appeals erred in ruling that the AFP Finance Center cannot be directed to automatically deduct the amount of
support needed by the legitimate family of Colonel Otamias; and

Second, whether Colonel Otamias' pension benefits can be executed upon for the financial support of his legitimate family.

The Petition is granted.

I
Article 6 of the Civil Code provides: chanRoblesvirtual Lawli bra ry

Article 6. Rights may be waived, unless the waiver is contrary to law, public order, public policy, morals or good customs, or prejudicial to a
third person with a right recognized by law. cralawred

The concept of waiver has been defined by this Court as: chanRoblesvirt ualLaw lib rary

a voluntary and intentional relinquishment or abandonment of a known existing legal right, advantage, benefit, claim or privilege, which
except for such waiver the party would have enjoyed; the voluntary abandonment or surrender, by a capable person, of a right known by him
to exist, with the intent that such right shall be surrendered and such person forever deprived of its benefit; or such conduct as warrants an
inference of the relinquishment of such right; or the intentional doing of an act inconsistent with claiming it.67 cralawred

In determining whether a statutory right can be waived, this Court is guided by the following pronouncement: chanRoblesvirtual Lawlib rary

[T]he doctrine of waiver extends to rights and privileges of any character, and, since the word 'waiver' covers every conceivable right, it is the
general rule that a person may waive any matter which affects his property, and any alienable right or privilege of which he is the owner or
which belongs to him or to which he is legally entitled, whether secured by contract, conferred with statute, or guaranteed by
constitution, provided such rights and privileges rest in the individual, are intended for his sole benefit, do not infringe on the
rights of others, and further provided the waiver of the right or privilege is not forbidden by law, and does not contravene
public policy; and the principle is recognized that everyone has a right to waive, and agree to waive, the advantage of a law or rule made
solely for the benefit and protection of the individual in his private capacity, if it can be dispensed with and relinquished without infringing on
any public right, and without detriment to the community at large[.]68 (Emphasis in the original) cralawred

When Colonel Otamias executed the Deed of Assignment, he effectively waived his right to claim that his retirement benefits are exempt from
execution. The right to receive retirement benefits belongs to Colonel Otamias. His decision to waive a portion of his retirement benefits does
not infringe on the right of third persons, but even protects the right of his family to receive support.

In addition, the Deed of Assignment should be considered as the law between the parties, and its provisions should be respected in the
absence of allegations that Colonel Otamias was coerced or defrauded in executing it. The general rule is that a contract is the law between
parties and parties are free to stipulate terms and conditions that are not contrary to law, morals, good customs, public order, or public
policy.
69 ChanRoblesVi rtua lawlib rary

The Deed of Assignment executed by Colonel Otamias was not contrary to law; it was in accordance with the provisions on support in the
Family Code. Hence, there was no reason for the AFP PGMC not to recognize its validity.

Further, this Court notes that the AFP PGMC granted the request for support of the wives of other retired military personnel in a similar
situation as that of petitioner in this case. Attached to the Petition are the affidavits of the wives of retired members of the military, who have
received a portion of their husbands' pensions.
70 ChanRoblesVi rtua lawlib rary

One affidavit stated: chanRoblesvirt ual Lawlib rary

4. That when I consulted and appeared before the Office of PGMC, I was instructed to submit a Special Power of Authority from my
husband so they can release part of his pension to me;

5. That my husband signed the Special Power of Attorney at the PGMC ceding 50% of his pension to me; the SPA form was given to us
by the PGMC and the same was signed by my husband at the PGMC;. . .

....

7. That the amount was deposited directly to my account by the PGMC- Finance Center AFP out of the pension of my husband;

8. That only the Special Power of Attorney was required by the PGMC in order for them to segregate my share of my husband's
pension and deposit the same to my account[.]71

The other affidavit stated: chanRoblesvirtual Lawlib ra ry

8. That my husband signed the Special Power of Attorney at the PGMC ceding 50% of his pension to me; the SPA form was given to us
by the PGMC and the same was signed by my husband at the PGMC[.]72

In addition, the AFP PGMC's website informs the public of the following procedure: chanRoblesvirtual Lawlib ra ry

Tanong: My husband-retiree cut-off my allotment. How can I have it restored?


Sagot: Pension benefits are separate properties of the retiree and can not [sic] be subject of a Ocurt [sic] Order for execution nor can they
be assigned to any third party (Sec 31, PD 1638, as amended). However, a valid Special Power of Attorney (SPA) by the retiree himself
empowering the AFP Finance Center to deduct certain amount from his lumpsum [sic] or pension pay as the case maybe, as a rule, is a valid
waiver of rights which can be effectively implemented by the AFP F[inance] C[enter]. 73 cralawred

Clearly, the AFP PGMC allows deductions from a retiree's pension for as long as the retiree executes a Special Power of Attorney authorizing
the AFP PGMC to deduct a certain amount for the benefit of the retiree's beneficiary.

It is curious why Colonel Otamias was allowed to execute a Deed of Assignment by the administering officer when, in the first place, the AFP
PGMC's recognized procedure was to execute a Special Power of Attorney, which would have been the easier remedy for Colonel Otamias'
family.

Instead, Colonel Otamias' family was forced to incur litigation expenses just to be able to receive the financial support that Colonel Otamias
was willing to give to Edna, et al.

II

Section 31 of Presidential Decree No. 1638 provides: chanRoblesvi rtua lLawl ibra ry

Section 31. The benefits authorized under this Decree, except as provided herein, shall not be subject to attachment, garnishment, levy,
execution or any tax whatsoever; neither shall they be assigned, ceded, or conveyed to any third person: Provided, That if a retired or
separated officer or enlisted man who is entitled to any benefit under this Decree has unsettled money and/or property accountabilities
incurred while in the active service, not more than fifty per centum of the pension gratuity or other payment due such officer or enlisted man
or his survivors under this Decree may be withheld and be applied to settle such accountabilities. cralawred

Under Section 31, Colonel Otamias' retirement benefits are exempt from execution. Retirement benefits are exempt from execution so as to
ensure that the retiree has enough funds to support himself and his family.

On the other hand, the right to receive support is provided under the Family Code. Article 194 of the Family Code defines support as
follows:chanRoblesvi rtual Lawli bra ry

Art. 194. Support comprises everything indispensable for sustenance, dwelling, clothing, medical attendance, education and transportation,
in keeping with the financial capacity of the family.

The education of the person entitled to be supported referred to in the preceding paragraph shall include his schooling or training for some
profession, trade or vocation, even beyond the age of majority. Transportation shall include expenses in going to and from school, or to and
from place of work. cralawred

The provisions of the Family Code also state who are obliged to give support, thus: chanRoblesvirtual Lawlib rary

Art. 195. Subject to the provisions of the succeeding articles, the following are obliged to support each other to the whole extent set forth in
the preceding article:

(1) The spouses;

(2) Legitimate ascendants and descendants;

(3) Parents and their legitimate children and the legitimate and illegitimate children of the latter;

(4) Parents and their illegitimate children and the legitimate and illegitimate children of the latter; and

(5) Legitimate brothers and sisters, whether of the full or half- blood.

Art. 196. Brothers and sisters not legitimately related, whether of the full or half-blood, are likewise bound to support each other to the full
extent set forth in Article 194 except only when the need for support of the brother or sister, being of age, is due to a cause imputable to the
claimant's fault or negligence.

Art. 197. For the support of legitimate ascendants; descendants, whether legitimate or illegitimate; and brothers and sisters, whether
legitimately or illegitimately related, only the separate property of the person obliged to give support shall be answerable provided that in
case the obligor has no separate property, the absolute community or the conjugal partnership, if financially capable, shall advance the
support, which shall be deducted from the share of the spouses obliged upon the liquidation of the absolute community or of the conjugal
partnership[.] cralawred

The provisions of Rule 39 of the Rules of Court that are applicable to this case are in apparent conflict with each other. Section 4 provides that
judgments in actions for support are immediately executory. On the other hand, Section 13(1) provides that the right to receive pension from
government is exempt from execution, thus: chanRoblesvirt ual Lawlib rary

RULE 39

EXECUTION, SATISFACTION, AND EFFECT OF JUDGMENTS

. . . .

SEC. 4. Judgments not stayed by appeal. — Judgments in actions for injunction, receivership, accounting and support, and such other
judgments as are now or may hereafter be declared to be immediately executory, shall be enforceable after their rendition and shall not, be
stayed by an appeal taken therefrom, unless otherwise ordered by the trial court. On appeal therefrom, the appellate court in its discretion
may make an order suspending, modifying, restoring or granting the injunction, receivership, accounting, or award of support.

The stay of execution shall be upon such terms as to bond or otherwise as may be considered proper for the security or protection of the
rights of the adverse party.

. . . .

SEC. 13. Property exempt from execution. — Except as otherwise expressly provided by law, the following property, and no other, shall be
exempt from execution:

. . . .
(1) The right to receive legal support, or money or property obtained as such support, or any pension or gratuity from the Government;

. . . .

But no article or species of property mentioned in this section shall be exempt from execution issued upon a judgment recovered for its price
or upon a judgment of foreclosure of a mortgage thereon. (Emphasis supplied) cralawred

Based on the Family Code, Colonel Otamias is obliged to give support to his family, petitioners in this case. However, he retired in 2003, and
his sole source of income is his pension. Judgments in actions for support are immediately executory, yet under Section 31 of Presidential
Decree No. 1638, his pension cannot be executed upon.

However, considering that Colonel Otamias has waived a portion of his retirement benefits through his Deed of Assignment, resolution on the
conflict between the civil code provisions on support and Section 31 of Presidential Decree No. 1638 should be resolved in a more appropriate
case.

III

Republic v. Yahon
74 is an analogous case because it involved the grant of support to the spouse of a retired member of the Armed Forces of
the Philippines.

In Republic v. Yahon, Daisy R. Yahon filed a Petition for the Issuance of Protection Order under Republic Act No. 9262.
75 She alleged that she

did not have any source of income because her husband made her resign from her job.
76 The trial court issued a temporary restraining
order, a portion of which stated: chanRoblesvi rtua lLawl ibra ry

To insure that petitioner [Daisy R. Yahon] can receive a fair share of respondent's retirement and other benefits, the following
agencies thru their heads are directed to WITHHOLD any retirement, pension [,] and other benefits of respondent, S/SGT.
CHARLES A. YAHON, a member of the Armed Forces of the Philippines assigned at 4ID, Camp Evangelista, Patag, Cagayan de Oro City until
further orders from the court: chanRoblesvirt ual Lawlibra ry

1. Commanding General/Officer of the Finance Center of the Armed Forces of the Philippines, Camp Emilio Aguinaldo, Quezon City;

2. The Management of RSBS, Camp Emilio Aguinaldo, Quezon City;

3. The Regional Manager of PAG-IBIG, Mortola St., Cagayan de Oro City.77(Emphasis in the original) cralawred

The trial court subsequently granted Daisy's Petition and issued a permanent protection order
78 and held: chanRoblesvi rtual Lawli bra ry

Pursuant to the order of the court dated February 6, 2007, respondent, S/Sgt. Charles A. Yahon is directed to give it to petitioner 50% of
whatever retirement benefits and other claims that may be due or released to him from the government and the said share of petitioner shall
be automatically deducted from respondent's benefits and claims and be given directly to the petitioner, Daisy R. Yahon.

Let copy of this decision be sent to the Commanding General/Officer of Finance Center of the Armed Forces of the Philippines, Camp Emilio
Aguinaldo, Quezon City; the Management of RSBS, Camp Emilio Aguinaldo, Quezon City and the Regional Manager of PAG-IBIG, Mortola St.,
Cagayan de Oro City for their guidance and strict compliance.79 cralawred

In that case, the AFP Finance Center filed before the trial court a Manifestation and Motion stating that "it was making a limited and special
appearance"
80 and argued that the trial court did not acquire jurisdiction over the Armed Forces of the Philippines. Hence, the Armed Forces

of the Philippines is not bound by the trial court's ruling.


81 ChanRoblesVirtualawl ibra ry

The Armed Forces of the Philippines also cited Pacific Products, where this Court ruled that: chanRoblesvi rtua lLawl ibra ry

A rule, which has never been seriously questioned, is that money in the hands of public officers, although it may be due government
employees, is not liable to the creditors of these employees in the process of garnishment. One reason is, that the State, by virtue of its
sovereignty may not be sued in its own courts except by express authorization by the Legislature, and to subject its officers to garnishment
would be to permit indirectly what is prohibited directly. Another reason is that moneys sought to be garnished, as long as they remain in the
hands of the disbursing officer of the Government, belong to the latter, although the defendant in garnishment may be entitled to a specific
portion thereof. And still another reason which covers both of the foregoing is that every consideration of public policy forbids it.82 (Citations
omitted)cralawred

This Court in Republic v. Yahon denied the Petition and discussed that because Republic Act No. 9262 is the later enactment, its provisions
should prevail,
83 thus: chanRoblesvirtua lLawl ibra ry

We hold that Section 8(g) of R.A. No. 9262, being a later enactment, should be construed as laying down an exception to the general rule
above stated that retirement benefits are exempt from execution. The law itself declares that the court shall order the withholding of a
percentage of the income or salary of the respondent by the employer, which shall be automatically remitted directly to the woman
"[n]otwithstanding other laws to the contrary"84 (Emphasis in the original) cralawred

IV

The 1987 Constitution gives much importance to the family as the basic unit of society, such that Article XV
85 is devoted to it.

The passage of the Family Code further implemented Article XV of the Constitution. This Court has recognized the importance of granting
support to minor children, provided that the filiation of the child is proven. In this case, the filiation of Jeffren M. Otamias and Jemwel M.
Otamias was admitted by Colonel Otamias in the Deed of Assignment.
86 ChanRoblesVi rtua lawlib rary
Even before the passage of the Family Code, this Court has given primary consideration to the right of a child to receive support. In Samson
87
v. Yatco, a petition for support was dismissed with prejudice by the trial court on the ground that the minor asking for support was not
present in court during trial. An appeal was filed, but it was dismissed for having been filed out of time. This Court relaxed the rules of
procedure and held that "[i]f the order of dismissal with prejudice of the petition for support were to stand, the petitioners would be deprived
of their right to present and nature support."
88 ChanRoblesVirtualawl ibra ry

In Gan v. Reyes,
89
Augustus Caezar R. Gan (Gan) questioned the trial court's decision requiring him to give support and claimed that that he
was not the father of the minor seeking support. He also argued that he was not given his day in court. This Court held that Gan's arguments
were meant to delay the execution of the judgment, and that in any case, Gan himself filed a Motion for Leave to Deposit in Court Support
Pendente Lite:chanRoblesvi rtual Lawli bra ry

In all cases involving a child, his interest and welfare are always the paramount concerns. There may be instances where, in view of the
poverty of the child, it would be a travesty of justice to refuse him support until the decision of the trial court attains finality while time
continues to slip away. An excerpt from the early case of De Leon v. Soriano is relevant, thus: chanRoblesvirt ual Lawlibra ry

The money and property adjudged for support and education should and must be given presently and without delay because if it had to wait
the final judgment, the children may in the meantime have suffered because of lack of food or have missed and lost years in school because
of lack of funds. One cannot delay the payment of such funds for support and education for the reason that if paid long afterwards, however
much the accumulated amount, its payment cannot cure the evil and repair the damage caused. The children with such belated payment for
support and education cannot act as gluttons and eat voraciously and unwisely, afterwards, to make up for the years of hunger and
starvation. Neither may they enrol in several classes and schools and take up numerous subjects all at once to make up for the years they
missed in school, due to non-payment of the funds when needed.90 cralawred

The non-inclusion of the AFP PGMC or the AFP Finance Center in the action for support was proper, considering that both the AFP PGMC and
the AFP Finance Center are not the persons obliged to give support to Edna, et al. Thus, it was not a real party-in-interest.
91 Nor was the AFP

PGMC a necessary party because complete relief could be obtained even without impleading the AFP PGMC.
92
ChanRoblesVirt ualawli bra ry

WHEREFORE, the Petition is GRANTED. The Court of Appeals Decision dated May 22, 2009 and Resolution dated August 11, 2009 in CA-
G.R. SP No. 02555-MIN are REVERSED and SET ASIDE. The Regional Trial Court Decision dated February 27, 2007 in F.C. Civil Case No.
2006-039 is REINSTATED.

SO ORDERED. chanroblesvi rtual lawlib rary


Silverio vs Republic

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 person’s 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 man’s 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 surgery2 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 People’s 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 fiancé, Richard P. Edel, as
witnesses.

On June 4, 2003, the trial court rendered a decision4 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. Petitioner’s misfortune to be trapped in a man’s 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 [fiancé] 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 petitioner’s first name from
"Rommel Jacinto" to MELY and petitioner’s 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 Appeals7 rendered a decision8 in favor of the Republic. It ruled that the trial court’s 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 Republic’s 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 Person’s 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 form17 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.

Petitioner’s 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
one’s 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 petitioner’s 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 petitioner’s first name was not within that court’s
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 petitioner’s 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 person’s 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 person’s sex is an essential factor in marriage and family relations. It is a part of a person’s 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 petitioner’s 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. 29Thus, 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 person’s 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."33Female 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 petitioner’s first step towards his eventual marriage to his male fiancé. 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 Code40 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 petitioner’s 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.
Del Socorro vs Wilsem

PERALTA, J.:

Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to reverse and set
aside the Orders1 dated February 19, 2010 and September 1, 2010, respectively, of the Regional Trial Court of
Cebu City (RTC-Cebu), which dismissed the criminal case entitled People of the Philippines v. Ernst Johan
Brinkman Van Wilsem, docketed as Criminal Case No. CBU-85503, for violation of Republic Act (R.A.) No. 9262,
otherwise known as the Anti-Violence Against Women and Their Children Act of 2004.

The following facts are culled from the records:

Petitioner Norma A. Del Socorro and respondent Ernst Johan Brinkman Van Wilsem contracted marriage in Holland
on September 25, 1990.2 On January 19, 1994, they were blessed with a son named Roderigo Norjo Van Wilsem,
who at the time of the filing of the instant petition was sixteen (16) years of age.3

Unfortunately, their marriage bond ended on July 19, 1995 by virtue of a Divorce Decree issued by the appropriate
Court of Holland.4 At that time, their son was only eighteen (18) months old.5 Thereafter, petitioner and her son came
home to the Philippines.6

According to petitioner, respondent made a promise to provide monthly support to their son in the amount of Two
Hundred Fifty (250) Guildene (which is equivalent to Php17,500.00 more or less).7 However, since the arrival of
petitioner and her son in the Philippines, respondent never gave support to the son, Roderigo.8

Not long thereafter, respondent cameto the Philippines and remarried in Pinamungahan, Cebu, and since then,
have been residing thereat.9 Respondent and his new wife established a business known as Paree Catering, located
at Barangay Tajao, Municipality of Pinamungahan, Cebu City.10 To date, all the parties, including their son,
Roderigo, are presently living in Cebu City.11

On August 28, 2009, petitioner, through her counsel, sent a letter demanding for support from respondent. However,
respondent refused to receive the letter.12

Because of the foregoing circumstances, petitioner filed a complaint affidavit with the Provincial Prosecutor of Cebu
City against respondent for violation of Section 5, paragraph E(2) of R.A. No. 9262 for the latter’s unjust refusal to
support his minor child with petitioner.13 Respondent submitted his counter-affidavit thereto, to which petitioner also
submitted her reply-affidavit.14 Thereafter, the Provincial Prosecutor of Cebu City issued a Resolution recommending
the filing of an information for the crime charged against herein respondent.

The information, which was filed with the RTC-Cebu and raffled to Branch 20 thereof, states that:

That sometime in the year 1995 and up to the present, more or less, in the Municipality of Minglanilla, Province of
Cebu, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, did then and there
wilfully, unlawfully and deliberately deprive, refuse and still continue to deprive his son RODERIGO NORJO VAN
WILSEM, a fourteen (14) year old minor, of financial support legally due him, resulting in economic abuse to the
victim. CONTRARY TO LAW.15

Upon motion and after notice and hearing, the RTC-Cebu issued a Hold Departure Order against
respondent.16Consequently, respondent was arrested and, subsequently, posted bail.17 Petitioner also filed a
Motion/Application of Permanent Protection Order to which respondent filed his Opposition.18 Pending the resolution
thereof, respondent was arraigned.19 Subsequently, without the RTC-Cebu having resolved the application of the
protection order, respondent filed a Motion to Dismiss on the ground of: (1) lack of jurisdiction over the offense
charged; and (2) prescription of the crime charged.20

On February 19, 2010, the RTC-Cebu issued the herein assailed Order,21 dismissing the instant criminal case
against respondent on the ground that the facts charged in the information do not constitute an offense with respect
to the respondent who is an alien, the dispositive part of which states:
WHEREFORE, the Court finds that the facts charged in the information do not constitute an offense with respect to
the accused, he being an alien, and accordingly, orders this case DISMISSED.

The bail bond posted by accused Ernst Johan Brinkman Van Wilsem for his provisional liberty is hereby cancelled
(sic) and ordered released.

SO ORDERED.

Cebu City, Philippines, February 19, 2010.22

Thereafter, petitioner filed her Motion for Reconsideration thereto reiterating respondent’s obligation to support their
child under Article 19523 of the Family Code, thus, failure to do so makes him liable under R.A. No. 9262 which
"equally applies to all persons in the Philippines who are obliged to support their minor children regardless of the
obligor’s nationality."24

On September 1, 2010, the lower court issued an Order25 denying petitioner’s Motion for Reconsideration and
reiterating its previous ruling. Thus:

x x x The arguments therein presented are basically a rehash of those advanced earlier in the memorandum of the
prosecution. Thus, the court hereby reiterates its ruling that since the accused is a foreign national he is not subject
to our national law (The Family Code) in regard to a parent’s duty and obligation to givesupport to his child.
Consequently, he cannot be charged of violating R.A. 9262 for his alleged failure to support his child. Unless it is
conclusively established that R.A. 9262 applies to a foreigner who fails to give support tohis child, notwithstanding
that he is not bound by our domestic law which mandates a parent to give such support, it is the considered opinion
of the court that no prima faciecase exists against the accused herein, hence, the case should be dismissed.

WHEREFORE, the motion for reconsideration is hereby DENIED for lack of merit.

SO ORDERED.

Cebu City, Philippines, September 1, 2010.26

Hence, the present Petition for Review on Certiorari raising the following issues:

1. Whether or not a foreign national has an obligation to support his minor child under Philippine law; and

2. Whether or not a foreign national can be held criminally liable under R.A. No. 9262 for his unjustified
failure to support his minor child.27

At the outset, let it be emphasized that We are taking cognizance of the instant petition despite the fact that the
same was directly lodged with the Supreme Court, consistent with the ruling in Republic v. Sunvar Realty
Development Corporation,28 which lays down the instances when a ruling of the trial court may be brought on appeal
directly to the Supreme Court without violating the doctrine of hierarchy of courts, to wit:

x x x Nevertheless, the Rules do not prohibit any of the parties from filing a Rule 45 Petition with this Court, in case
only questions of law are raised or involved. This latter situation was one that petitioners found themselves in when
they filed the instant Petition to raise only questions of law. In Republic v. Malabanan, the Court clarified the three
modes of appeal from decisions of the RTC, to wit: (1) by ordinary appeal or appeal by writ of error under Rule 41,
whereby judgment was rendered in a civil or criminal action by the RTC in the exercise of its original jurisdiction; (2)
by a petition for review under Rule 42, whereby judgment was rendered by the RTC in the exercise of its appellate
jurisdiction; and (3) by a petition for review on certiorari before the Supreme Court under Rule 45. "The first mode of
appeal is taken to the [Court of Appeals] on questions of fact or mixed questions of fact and law. The second mode
of appeal is brought to the CA on questions of fact, of law, or mixed questions of fact and law. The third mode of
appealis elevated to the Supreme Court only on questions of law." (Emphasis supplied)

There is a question of law when the issue does not call for an examination of the probative value of the evidence
presented or of the truth or falsehood of the facts being admitted, and the doubt concerns the correct application of
law and jurisprudence on the matter. The resolution of the issue must rest solely on what the law provides on the
given set of circumstances.29

Indeed, the issues submitted to us for resolution involve questions of law – the response thereto concerns the
correct application of law and jurisprudence on a given set of facts, i.e.,whether or not a foreign national has an
obligation to support his minor child under Philippine law; and whether or not he can be held criminally liable under
R.A. No. 9262 for his unjustified failure to do so.

It cannot be negated, moreover, that the instant petition highlights a novel question of law concerning the liability of
a foreign national who allegedly commits acts and omissions punishable under special criminal laws, specifically in
relation to family rights and duties. The inimitability of the factual milieu of the present case, therefore, deserves a
definitive ruling by this Court, which will eventually serve as a guidepost for future cases. Furthermore, dismissing
the instant petition and remanding the same to the CA would only waste the time, effort and resources of the courts.
Thus, in the present case, considerations of efficiency and economy in the administration of justice should prevail
over the observance of the hierarchy of courts.

Now, on the matter of the substantive issues, We find the petition meritorious. Nonetheless, we do not fully agree
with petitioner’s contentions.

To determine whether or not a person is criminally liable under R.A. No. 9262, it is imperative that the legal
obligation to support exists.

Petitioner invokes Article 19530 of the Family Code, which provides the parent’s obligation to support his child.
Petitioner contends that notwithstanding the existence of a divorce decree issued in relation to Article 26 of the
Family Code,31 respondent is not excused from complying with his obligation to support his minor child with
petitioner.

On the other hand, respondent contends that there is no sufficient and clear basis presented by petitioner that she,
as well as her minor son, are entitled to financial support.32 Respondent also added that by reason of the Divorce
Decree, he is not obligated topetitioner for any financial support.33

On this point, we agree with respondent that petitioner cannot rely on Article 19534 of the New Civil Code in
demanding support from respondent, who is a foreign citizen, since Article 1535 of the New Civil Code stresses the
principle of nationality. In other words, insofar as Philippine laws are concerned, specifically the provisions of the
Family Code on support, the same only applies to Filipino citizens. By analogy, the same principle applies to
foreigners such that they are governed by their national law with respect to family rights and duties.36

The obligation to give support to a child is a matter that falls under family rights and duties. Since the respondent is
a citizen of Holland or the Netherlands, we agree with the RTC-Cebu that he is subject to the laws of his country, not
to Philippinelaw, as to whether he is obliged to give support to his child, as well as the consequences of his failure to
do so.37

In the case of Vivo v. Cloribel,38 the Court held that –

Furthermore, being still aliens, they are not in position to invoke the provisions of the Civil Code of the Philippines,
for that Code cleaves to the principle that family rights and duties are governed by their personal law, i.e.,the laws of
the nation to which they belong even when staying in a foreign country (cf. Civil Code, Article 15).39

It cannot be gainsaid, therefore, that the respondent is not obliged to support petitioner’s son under Article195 of the
Family Code as a consequence of the Divorce Covenant obtained in Holland. This does not, however, mean that
respondent is not obliged to support petitioner’s son altogether.

In international law, the party who wants to have a foreign law applied to a dispute or case has the burden of proving
the foreign law.40 In the present case, respondent hastily concludes that being a national of the Netherlands, he is
governed by such laws on the matter of provision of and capacity to support.41 While respondent pleaded the laws of
the Netherlands in advancing his position that he is not obliged to support his son, he never proved the same.
It is incumbent upon respondent to plead and prove that the national law of the Netherlands does not impose upon
the parents the obligation to support their child (either before, during or after the issuance of a divorce decree),
because Llorente v. Court of Appeals,42 has already enunciated that:

True, foreign laws do not prove themselves in our jurisdiction and our courts are not authorized to takejudicial notice
of them. Like any other fact, they must be alleged and proved.43

In view of respondent’s failure to prove the national law of the Netherlands in his favor, the doctrine of processual
presumption shall govern. Under this doctrine, if the foreign law involved is not properly pleaded and proved, our
courts will presume that the foreign law is the same as our local or domestic or internal law.44 Thus, since the law of
the Netherlands as regards the obligation to support has not been properly pleaded and proved in the instant case,
it is presumed to be the same with Philippine law, which enforces the obligation of parents to support their children
and penalizing the non-compliance therewith.

Moreover, while in Pilapil v. Ibay-Somera,45 the Court held that a divorce obtained in a foreign land as well as its
legal effects may be recognized in the Philippines in view of the nationality principle on the matter of status of
persons, the Divorce Covenant presented by respondent does not completely show that he is notliable to give
support to his son after the divorce decree was issued. Emphasis is placed on petitioner’s allegation that under the
second page of the aforesaid covenant, respondent’s obligation to support his child is specifically stated,46 which
was not disputed by respondent.

We likewise agree with petitioner that notwithstanding that the national law of respondent states that parents have
no obligation to support their children or that such obligation is not punishable by law, said law would still not find
applicability,in light of the ruling in Bank of America, NT and SA v. American Realty Corporation,47 to wit:

In the instant case, assuming arguendo that the English Law on the matter were properly pleaded and proved in
accordance with Section 24, Rule 132 of the Rules of Court and the jurisprudence laid down in Yao Kee, et al. vs.
Sy-Gonzales, said foreign law would still not find applicability.

Thus, when the foreign law, judgment or contract is contrary to a sound and established public policy of the forum,
the said foreign law, judgment or order shall not be applied.

Additionally, prohibitive laws concerning persons, their acts or property, and those which have for their object public
order, public 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.

The public policy sought to be protected in the instant case is the principle imbedded in our jurisdiction proscribing
the splitting up of a single cause of action.

Section 4, Rule 2 of the 1997 Rules of Civil Procedure is pertinent

If two or more suits are instituted on the basis of the same cause of action, the filing of one or a judgment upon the
merits in any one is available as a ground for the dismissal of the others. Moreover, foreign law should not be
applied when its application would work undeniable injustice to the citizens or residents of the forum. To give justice
is the most important function of law; hence, a law, or judgment or contract that is obviously unjust negates the
fundamental principles of Conflict of Laws.48

Applying the foregoing, even if the laws of the Netherlands neither enforce a parent’s obligation to support his child
nor penalize the noncompliance therewith, such obligation is still duly enforceable in the Philippines because it
would be of great injustice to the child to be denied of financial support when the latter is entitled thereto.

We emphasize, however, that as to petitioner herself, respondent is no longer liable to support his former wife, in
consonance with the ruling in San Luis v. San Luis,49 to wit:
As to the effect of the divorce on the Filipino wife, the Court ruled that she should no longerbe considered marriedto
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. (Emphasis added)50

Based on the foregoing legal precepts, we find that respondent may be made liable under Section 5(e) and (i) of
R.A. No. 9262 for unjustly refusing or failing to give support topetitioner’s son, to wit:

SECTION 5. Acts of Violence Against Women and Their Children.- The crime of violence against women and their
children is committed through any of the following acts:

xxxx

(e) Attempting to compel or compelling the woman or her child to engage in conduct which the woman or her child
has the right to desist from or desist from conduct which the woman or her child has the right to engage in, or
attempting to restrict or restricting the woman's or her child's freedom of movement or conduct by force or threat of
force, physical or other harm or threat of physical or other harm, or intimidation directed against the woman or child.
This shall include, butnot limited to, the following acts committed with the purpose or effect of controlling or
restricting the woman's or her child's movement or conduct:

xxxx

(2) Depriving or threatening to deprive the woman or her children of financial support legally due her or her family, or
deliberately providing the woman's children insufficient financial support; x x x x

(i) Causing mental or emotional anguish, public ridicule or humiliation to the woman or her child, including, but not
limited to, repeated verbal and emotional abuse, and denial of financial support or custody of minor childrenof
access to the woman's child/children.51

Under the aforesaid special law, the deprivation or denial of financial support to the child is considered anact of
violence against women and children.

In addition, considering that respondent is currently living in the Philippines, we find strength in petitioner’s claim that
the Territoriality Principle in criminal law, in relation to Article 14 of the New Civil Code, applies to the instant case,
which provides that: "[p]enal laws and those of public security and safety shall be obligatory upon all who live and
sojourn in Philippine territory, subject to the principle of public international law and to treaty stipulations." On this
score, it is indisputable that the alleged continuing acts of respondent in refusing to support his child with petitioner
is committed here in the Philippines as all of the parties herein are residents of the Province of Cebu City. As such,
our courts have territorial jurisdiction over the offense charged against respondent. It is likewise irrefutable that
jurisdiction over the respondent was acquired upon his arrest.

Finally, we do not agree with respondent’s argument that granting, but not admitting, that there is a legal basis for
charging violation of R.A. No. 9262 in the instant case, the criminal liability has been extinguished on the ground of
prescription of crime52 under Section 24 of R.A. No. 9262, which provides that:

SECTION 24. Prescriptive Period. – Acts falling under Sections 5(a) to 5(f) shall prescribe in twenty (20) years. Acts
falling under Sections 5(g) to 5(I) shall prescribe in ten (10) years.

The act of denying support to a child under Section 5(e)(2) and (i) of R.A. No. 9262 is a continuing offense,53 which
started in 1995 but is still ongoing at present. Accordingly, the crime charged in the instant case has clearly not
prescribed.
Given, however, that the issue on whether respondent has provided support to petitioner’s child calls for an
examination of the probative value of the evidence presented, and the truth and falsehood of facts being admitted,
we hereby remand the determination of this issue to the RTC-Cebu which has jurisdiction over the case.

WHEREFORE, the petition is GRANTED. The Orders dated February 19, 2010 and September 1, 2010,
respectively, of the Regional Trial Court of the City of Cebu are hereby REVERSED and SET ASIDE. The case is
REMANDED to the same court to conduct further proceedings based on the merits of the case.

SO ORDERED.
Van Dorn vs Romillo

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.


xxx xxx xxx 4

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.
Pilapil vs Ibay-Somera

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 complaint which starts the prosecutory proceeding 19 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.
Recio vs Recio

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 cräläwvirtua lib räry

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
government. 6 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
cräläwvirt ualib räry

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 cräläwvirt ualib räry

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 cräläwvirt ualib räry

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 cräläwvirt ualib rä ry

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:

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.
2

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.

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 cräläwvirtua lib räry

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
cräläwvirt ualib räry

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:

xxx

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

xxx

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
cräläwvirtual ibrä ry

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
cräläwvirt ualib rä ry

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. 36The 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 cräläwvirtual ib räry

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
cräläwvirt ualib räry

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 cräläwvirt ualib räry

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 cräläwvirt ualib rä ry

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
cräläwvirt ualib räry

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 cräläwvirtua lib räry

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
quomay 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.
Quita vs CA

Facts:

Fe D. Quita and Arturo T. Padlan, both Filipinos, were married in the Philippines on May 18, 1941. No children
were born out of their marriage. On July 23, 1954, petitioner obtained a final judgment of divorce in San
Francisco, California, U.S.A. On April 16, 1972, Arturo died leaving no will. On August 31, 1972, Lino Javier
Inciong filed a petition with the RTC for issuance of letters of administration concerning the estate of Arturo in
favor of the Philippine Trust Company. Respondent Blandina Dandan, claiming to be the surviving spouse of
Arturo Dandan and the surviving children, all surnamed Padlan, opposed the petition. The RTC expressed that
the marriage between Antonio and petitioner subsisted until the death of Arturo in 1972, that the marriage
existed between private respondent and Arturo was clearly void since it was celebrated during the existence of
his previous marriage to petitioner. The Court of Appeals remanded the case to the trial court for further
proceedings.

Issues:

1. Should the case be remanded to the lower court?

2. Who between the petitioner and private respondent is the proper heir of the decedent?

Held:

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.

No dispute exists as to the right of the six 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, nor as to their respective hereditary shares.

Private respondent is not a surviving spouse that can inherit from him as this status presupposes a legitimate
relationship. Her marriage to Arturo being a bigamous marriage considered void ab inito under Articles 80 and
83 of the Civil Code renders her not a surviving spouse.

The decision of the Court of Appeals ordering the remand of the case is affirmed.
Elmar perez vs CA

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 Order2 of the Regional
Trial Court of Quezon City, Branch 84, granting petitioner’s motion for leave to file intervention and admitting the Complaint-in-
Intervention3 in Civil Case No. Q-01-44847; and its January 23, 2004 Resolution4 denying the motion for reconsideration.

Private respondent Tristan A. Catindig married Lily Gomez Catindig5 twice on May 16, 1968. The first marriage ceremony was
celebrated at the Central Methodist Church 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 Makati City, 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 States7 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 Intervention10 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. Petitioner’s 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.

Petitioner’s 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.11This 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 intervenor’s 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 intervenor’s 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.17Such 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.

Petitioner’s 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 Philippines will 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 21which took
effect on August 30, 1950. In the case of Tenchavez v. Escano22 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, petitioner’s 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 petitioner’s 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.
San Luis vs San Luis

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 3Resolutions of the Regional Trial
Court of Makati City, Branch 134 in SP. Proc. No. M-3708; and its May 15, 1998 Resolution 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 Felicisimo’s 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 decedent’s 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 ₱30,304,178.00 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 Felicisimo’s 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 10of 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 respondent’s 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 Felicisimo’s 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 Felicisimo’s 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 respondent’s marriage to Felicisimo was void and bigamous because it was performed during the
subsistence of the latter’s 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 one’s 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 deceased’s children to him at his Alabang address, and the deceased’s
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 Felicidad’s 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 Felicidad’s 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 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. 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 marriedto 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." 59In 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. 1aw phi1.net

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 Court’s 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 Felicisimo’s 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 respondent’s 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
Felicisimo’s 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 party’s own evidence and not upon the weakness of the opponent’s defense. x x x 81
In view of the foregoing, we find that respondent’s 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
Lavadia vs Heirs of luna

BERSAMIN, J.:

Divorce between Filipinos is void and ineffectual under the nationality rule adopted by Philippine law. Hence, any settlement of
property between the parties of the first marriage involving Filipinos submitted as an incident of a divorce obtained in a foreign
country lacks competent judicial approval, and cannot be enforceable against the assets of the husband who contracts a
subsequent marriage.

The Case

The petitioner, the second wife of the late Atty. Juan Luces Luna, appeals the adverse decision promulgated on November 11,
2005,1 whereby the Court of Appeals (CA) affirmed with modification the decision rendered on August 27, 2001 by the Regional
Trial Court (RTC), Branch 138, in Makati City.2 The CA thereby denied her right in the 25/100 pro indiviso share of the husband
in a condominium unit, and in the law books of the husband acquired during the second marriage.

Antecedents

The antecedent facts were summarized by the CA as follows:

ATTY. LUNA, a practicing lawyer, was at first a name partner in the prestigious law firm Sycip, Salazar, Luna, Manalo,
Hernandez & Feliciano Law Offices at that time when he was living with his first wife, herein intervenor-appellant Eugenia
Zaballero-Luna (EUGENIA), whom he initially married ina civil ceremony conducted by the Justice of the Peace of Parañaque,
Rizal on September 10, 1947 and later solemnized in a church ceremony at the Pro-Cathedral in San Miguel, Bulacan on
September 12, 1948. In ATTY. LUNA’s marriage to EUGENIA, they begot seven (7) children, namely: Regina Maria L. Nadal,
Juan Luis Luna, Araceli Victoria L. Arellano, Ana Maria L. Tabunda, Gregorio Macario Luna, Carolina Linda L. Tapia, and Cesar
Antonio Luna. After almost two (2) decades of marriage, ATTY. LUNA and EUGENIA eventually agreed to live apart from each
other in February 1966 and agreed to separation of property, to which end, they entered into a written agreement entitled
"AGREEMENT FOR SEPARATION AND PROPERTY SETTLEMENT" dated November 12, 1975, whereby they agreed to live
separately and to dissolve and liquidate their conjugal partnership of property.

On January 12, 1976, ATTY. LUNA obtained a divorce decree of his marriage with EUGENIA from the Civil and Commercial
Chamber of the First Circumscription of the Court of First Instance of Sto. Domingo, Dominican Republic. Also in Sto.Domingo,
Dominican Republic, on the same date, ATTY. LUNA contracted another marriage, this time with SOLEDAD. Thereafter, ATTY.
LUNA and SOLEDAD returned to the Philippines and lived together as husband and wife until 1987.

Sometime in 1977, ATTY. LUNA organized a new law firm named: Luna, Puruganan, Sison and Ongkiko (LUPSICON) where
ATTY. LUNA was the managing partner.

On February 14, 1978, LUPSICON through ATTY. LUNA purchased from Tandang Sora Development Corporation the 6th Floor
of Kalaw-Ledesma Condominium Project(condominium unit) at Gamboa St., Makati City, consisting of 517.52 square meters, for
₱1,449,056.00, to be paid on installment basis for 36months starting on April 15, 1978. Said condominium unit was to be usedas
law office of LUPSICON. After full payment, the Deed of Absolute Sale over the condominium unit was executed on July 15,
1983, and CCT No. 4779 was issued on August 10, 1983, which was registered bearing the following names:

"JUAN LUCES LUNA, married to Soledad L. Luna (46/100); MARIO E. ONGKIKO, married to Sonia P.G. Ongkiko (25/100);
GREGORIO R. PURUGANAN, married to Paz A. Puruganan (17/100); and TERESITA CRUZ SISON, married to Antonio J.M.
Sison (12/100) x x x" Subsequently, 8/100 share of ATTY. LUNA and 17/100 share of Atty. Gregorio R. Puruganan in the
condominium unit was sold to Atty. Mario E. Ongkiko, for which a new CCT No. 21761 was issued on February 7, 1992 in the
following names:

"JUAN LUCES LUNA, married to Soledad L. Luna (38/100); MARIO E. ONGKIKO, married to Sonia P.G. Ongkiko (50/100);
TERESITA CRUZ SISON, married to Antonio J.M. Sison (12/100) x x x"

Sometime in 1992, LUPSICON was dissolved and the condominium unit was partitioned by the partners but the same was still
registered in common under CCT No. 21716. The parties stipulated that the interest of ATTY. LUNA over the condominium unit
would be 25/100 share. ATTY. LUNA thereafter established and headed another law firm with Atty. Renato G. Dela Cruzand
used a portion of the office condominium unit as their office. The said law firm lasted until the death of ATTY. JUAN on July 12,
1997.
After the death of ATTY. JUAN, his share in the condominium unit including the lawbooks, office furniture and equipment found
therein were taken over by Gregorio Z. Luna, ATTY. LUNA’s son of the first marriage. Gregorio Z. Luna thenleased out the
25/100 portion of the condominium unit belonging to his father to Atty. Renato G. De la Cruz who established his own law firm
named Renato G. De la Cruz & Associates.

The 25/100 pro-indiviso share of ATTY. Luna in the condominium unit as well as the law books, office furniture and equipment
became the subject of the complaint filed by SOLEDAD against the heirs of ATTY. JUAN with the RTC of Makati City, Branch
138, on September 10, 1999, docketed as Civil Case No. 99-1644. The complaint alleged that the subject properties were
acquired during the existence of the marriage between ATTY. LUNA and SOLEDAD through their joint efforts that since they
had no children, SOLEDAD became co-owner of the said properties upon the death of ATTY. LUNA to the extent of ¾ pro-
indiviso share consisting of her ½ share in the said properties plus her ½ share in the net estate of ATTY. LUNA which was
bequeathed to her in the latter’s last will and testament; and thatthe heirs of ATTY. LUNA through Gregorio Z. Luna excluded
SOLEDAD from her share in the subject properties. The complaint prayed that SOLEDAD be declared the owner of the ¾
portion of the subject properties;that the same be partitioned; that an accounting of the rentals on the condominium unit
pertaining to the share of SOLEDAD be conducted; that a receiver be appointed to preserve ad administer the subject
properties;and that the heirs of ATTY. LUNA be ordered to pay attorney’s feesand costs of the suit to SOLEDAD. 3

Ruling of the RTC

On August 27, 2001, the RTC rendered its decision after trial upon the aforementioned facts, 4 disposing thusly:

WHEREFORE, judgment is rendered as follows:

(a) The 24/100 pro-indiviso share in the condominium unit located at the SIXTH FLOOR of the KALAW LEDESMA
CONDOMINIUM PROJECT covered by Condominium Certificate of Title No. 21761 consisting of FIVE HUNDRED
SEVENTEEN (517/100) SQUARE METERS is adjudged to have been acquired by Juan Lucas Luna through his sole
industry;

(b) Plaintiff has no right as owner or under any other concept over the condominium unit, hence the entry in
Condominium Certificate of Title No. 21761 of the Registry of Deeds of Makati with respect to the civil status of Juan
Luces Luna should be changed from "JUAN LUCES LUNA married to Soledad L. Luna" to "JUAN LUCES LUNA
married to Eugenia Zaballero Luna";

(c) Plaintiff is declared to be the owner of the books Corpus Juris, Fletcher on Corporation, American Jurisprudence and
Federal Supreme Court Reports found in the condominium unit and defendants are ordered to deliver them to the
plaintiff as soon as appropriate arrangements have been madefor transport and storage.

No pronouncement as to costs.

SO ORDERED.5
Noveras vs noveras

PEREZ, J.:

Before the Court is a petition for review assailing the 9 May 2008 Decision1 of the Court of Appeals in CA-G.R .. CV No. 88686,
which affirmed in part the 8 December 2006 Decision2 of the Regional Trial Court (RTC) of Baler, Aurora, Branch 96.

The factual antecedents are as follow:

David A. Noveras (David) and Leticia T. Noveras (Leticia) were married on 3 December 1988 in Quezon City, Philippines. They
resided in California, United States of America (USA) where they eventually acquired American citizenship. They then begot two
children, namely: Jerome T.

Noveras, who was born on 4 November 1990 and JenaT. Noveras, born on 2 May 1993. David was engaged in courier service
business while Leticia worked as a nurse in San Francisco, California.

During the marriage, they acquired the following properties in the Philippines and in the USA:

PHILIPPINES
PROPERTY FAIR MARKET VALUE
House and Lot with an area of 150 sq. m. located ₱1,693,125.00
at 1085 Norma Street, Sampaloc, Manila
(Sampaloc property)
Agricultural land with an area of 20,742 sq. m. ₱400,000.00
located at Laboy, Dipaculao, Aurora
A parcel of land with an area of 2.5 hectares ₱490,000.00
located at Maria Aurora, Aurora
3
A parcel of land with an area of 175 sq.m. located ₱175,000.00
at Sabang Baler, Aurora
3-has. coconut plantation in San Joaquin Maria ₱750,000.00
Aurora, Aurora
USA
PROPERTY FAIR MARKET VALUE
House and Lot at 1155 Hanover Street, Daly City,
California
$550,000.00
(unpaid debt of $285,000.00)
Furniture and furnishings $3,000
Jewelries (ring and watch) $9,000
2000 Nissan Frontier 4x4 pickup truck $13,770.00
Bank of America Checking Account $8,000
Bank of America Cash Deposit
Life Insurance (Cash Value) $100,000.00
4
Retirement, pension, profit-sharing, annuities $56,228.00

The Sampaloc property used to beowned by David’s parents. The parties herein secured a loan from a bank and mortgaged the
property. When said property was about to be foreclosed, the couple paid a total of ₱1.5 Million for the redemption of the same.

Due to business reverses, David left the USA and returned to the Philippines in 2001. In December 2002,Leticia executed a
Special Power of Attorney (SPA) authorizing David to sell the Sampaloc property for ₱2.2 Million. According to Leticia, sometime
in September 2003, David abandoned his family and lived with Estrellita Martinez in Aurora province. Leticia claimed that David
agreed toand executed a Joint Affidavit with Leticia in the presence of David’s father, Atty. Isaias Noveras, on 3 December 2003
stating that: 1) the ₱1.1Million proceeds from the sale of the Sampaloc property shall be paid to and collected by Leticia; 2) that
David shall return and pay to Leticia ₱750,000.00, which is equivalent to half of the amount of the redemption price of the
Sampaloc property; and 3) that David shall renounce and forfeit all his rights and interest in the conjugal and real properties
situated in the Philippines.5 David was able to collect ₱1,790,000.00 from the sale of the Sampaloc property, leaving an unpaid
balance of ₱410,000.00.

Upon learning that David had an extra-marital affair, Leticia filed a petition for divorce with the Superior Court of California,
County of San Mateo, USA. The California court granted the divorce on 24 June 2005 and judgment was duly entered on 29
June 2005.6 The California court granted to Leticia the custody of her two children, as well as all the couple’s properties in the
USA.7

On 8 August 2005, Leticia filed a petition for Judicial Separation of Conjugal Property before the RTC of Baler, Aurora. She
relied on the 3 December 2003 Joint Affidavit and David’s failure to comply with his obligation under the same. She prayed for:
1) the power to administer all conjugal properties in the Philippines; 2) David and his partner to cease and desist from selling the
subject conjugal properties; 3) the declaration that all conjugal properties be forfeited in favor of her children; 4) David to remit
half of the purchase price as share of Leticia from the sale of the Sampaloc property; and 5) the payment of₱50,000.00 and
₱100,000.00 litigation expenses.8

In his Answer, David stated that a judgment for the dissolution of their marriage was entered on 29 June 2005 by the Superior
Court of California, County of San Mateo. He demanded that the conjugal partnership properties, which also include the USA
properties, be liquidated and that all expenses of liquidation, including attorney’s fees of both parties be charged against the
conjugal partnership.9

The RTC of Baler, Aurora simplified the issues as follow:

1. Whether or not respondent David A. Noveras committed acts of abandonment and marital infidelity which can result
intothe forfeiture of the parties’ properties in favor of the petitioner and their two (2) children.

2. Whether or not the Court has jurisdiction over the properties in California, U.S.A. and the same can be included in the
judicial separation prayed for.

3. Whether or not the "Joint Affidavit" x x x executed by petitioner Leticia T. Noveras and respondent David A. Noveras
will amount to a waiver or forfeiture of the latter’s property rights over their conjugal properties.

4. Whether or not Leticia T. Noveras isentitled to reimbursement of onehalf of the ₱2.2 [M]illion sales proceeds of their
property in Sampaloc, Manila and one-half of the ₱1.5 [M]illion used to redeem the property of Atty. Isaias Noveras,
including interests and charges.

5. How the absolute community properties should be distributed.

6. Whether or not the attorney’s feesand litigation expenses of the parties were chargeable against their conjugal
properties.

Corollary to the aboveis the issue of:

Whether or not the two common children of the parties are entitled to support and presumptive legitimes. 10

On 8 December 2006, the RTC rendered judgment as follows:

1. The absolute community of property of the parties is hereby declared DISSOLVED;

2. The net assets of the absolute community of property ofthe parties in the Philippines are hereby ordered to be
awarded to respondent David A. Noveras only, with the properties in the United States of America remaining in the sole
ownership of petitioner Leticia Noveras a.k.a. Leticia Tacbiana pursuant to the divorce decree issuedby the Superior
Court of California, County of San Mateo, United States of America, dissolving the marriage of the parties as of June
24, 2005. The titles presently covering said properties shall be cancelled and new titles be issued in the name of the
party to whom said properties are awarded;
3. One-half of the properties awarded to respondent David A. Noveras in the preceding paragraph are hereby given to
Jerome and Jena, his two minor children with petitioner LeticiaNoveras a.k.a. Leticia Tacbiana as their presumptive
legitimes and said legitimes must be annotated on the titles covering the said properties.Their share in the income from
these properties shall be remitted to them annually by the respondent within the first half of January of each year,
starting January 2008;

4. One-half of the properties in the United States of America awarded to petitioner Leticia Noveras a.k.a. Leticia
Tacbiana in paragraph 2 are hereby given to Jerome and Jena, her two minor children with respondent David A.
Noveras as their presumptive legitimes and said legitimes must be annotated on the titles/documents covering the said
properties. Their share in the income from these properties, if any, shall be remitted to them annually by the petitioner
within the first half of January of each year, starting January 2008;

5. For the support of their two (2) minor children, Jerome and Jena, respondent David A. Noveras shall give them
US$100.00 as monthly allowance in addition to their income from their presumptive legitimes, while petitioner Leticia
Tacbiana shall take care of their food, clothing, education and other needs while they are in her custody in the USA.
The monthly allowance due from the respondent shall be increased in the future as the needs of the children require
and his financial capacity can afford;

6. Of the unpaid amount of ₱410,000.00 on the purchase price of the Sampaloc property, the Paringit Spouses are
hereby ordered to pay ₱5,000.00 to respondent David A. Noveras and ₱405,000.00 to the two children. The share of
the respondent may be paid to him directly but the share of the two children shall be deposited with a local bank in
Baler, Aurora, in a joint account tobe taken out in their names, withdrawal from which shall only be made by them or by
their representative duly authorized with a Special Power of Attorney. Such payment/deposit shall be made withinthe
period of thirty (30) days after receipt of a copy of this Decision, with the passbook of the joint account to be submitted
to the custody of the Clerk of Court of this Court within the same period. Said passbook can be withdrawn from the
Clerk of Court only by the children or their attorney-in-fact; and

7. The litigation expenses and attorney’s fees incurred by the parties shall be shouldered by them individually.11

The trial court recognized that since the parties are US citizens, the laws that cover their legal and personalstatus are those of
the USA. With respect to their marriage, the parties are divorced by virtue of the decree of dissolution of their marriage issued by
the Superior Court of California, County of San Mateo on 24June 2005. Under their law, the parties’ marriage had already been
dissolved. Thus, the trial court considered the petition filed by Leticia as one for liquidation of the absolute community of property
regime with the determination of the legitimes, support and custody of the children, instead of an action for judicial separation of
conjugal property.

With respect to their property relations, the trial court first classified their property regime as absolute community of property
because they did not execute any marriage settlement before the solemnization of their marriage pursuant to Article 75 of the
Family Code. Then, the trial court ruled that in accordance with the doctrine of processual presumption, Philippine law should
apply because the court cannot take judicial notice of the US law since the parties did not submit any proof of their national law.
The trial court held that as the instant petition does not fall under the provisions of the law for the grant of judicial separation of
properties, the absolute community properties cannot beforfeited in favor of Leticia and her children. Moreover, the trial court
observed that Leticia failed to prove abandonment and infidelity with preponderant evidence.

The trial court however ruled that Leticia is not entitled to the reimbursements she is praying for considering that she already
acquired all of the properties in the USA. Relying still on the principle of equity, the Court also adjudicated the Philippine
properties to David, subject to the payment of the children’s presumptive legitimes. The trial court held that under Article 89 of
the Family Code, the waiver or renunciation made by David of his property rights in the Joint Affidavit is void.

On appeal, the Court of Appeals modified the trial court’s Decision by directing the equal division of the Philippine properties
between the spouses. Moreover with respect to the common children’s presumptive legitime, the appellate court ordered both
spouses to each pay their children the amount of ₱520,000.00, thus:

WHEREFORE, the instant appeal is PARTLY GRANTED. Numbers 2, 4 and 6 of the assailedDecision dated December 8, 2006
of Branch 96, RTC of Baler, Aurora Province, in Civil Case No. 828 are hereby MODIFIED to read as follows:

2. The net assets of the absolute community of property of the parties in the Philippines are hereby divided equally
between petitioner Leticia Noveras a.k.a. Leticia Tacbiana (sic) and respondent David A. Noveras;

xxx
4. One-half of the properties awarded to petitioner Leticia Tacbiana (sic) in paragraph 2 shall pertain to her minor
children, Jerome and Jena, as their presumptive legitimes which shall be annotated on the titles/documents covering
the said properties. Their share in the income therefrom, if any, shall be remitted to them by petitioner annually within
the first half of January, starting 2008;

xxx

6. Respondent David A. Noveras and petitioner Leticia Tacbiana (sic) are each ordered to pay the amount
of₱520,000.00 to their two children, Jerome and Jena, as their presumptive legitimes from the sale of the Sampaloc
property inclusive of the receivables therefrom, which shall be deposited to a local bank of Baler, Aurora, under a joint
account in the latter’s names. The payment/deposit shall be made within a period of thirty (30) days from receipt ofa
copy of this Decision and the corresponding passbook entrusted to the custody ofthe Clerk of Court a quowithin the
same period, withdrawable only by the children or their attorney-in-fact.

A number 8 is hereby added, which shall read as follows:

8. Respondent David A. Noveras is hereby ordered to pay petitioner Leticia Tacbiana (sic) the amount of ₱1,040,000.00
representing her share in the proceeds from the sale of the Sampaloc property.

The last paragraph shall read as follows:

Send a copy of this Decision to the local civil registry of Baler, Aurora; the local civil registry of Quezon City; the Civil
RegistrarGeneral, National Statistics Office, Vibal Building, Times Street corner EDSA, Quezon City; the Office of the Registry of
Deeds for the Province of Aurora; and to the children, Jerome Noveras and Jena Noveras.

The rest of the Decision is AFFIRMED.12

In the present petition, David insists that the Court of Appeals should have recognized the California Judgment which awarded
the Philippine properties to him because said judgment was part of the pleading presented and offered in evidence before the
trial court. David argues that allowing Leticia to share in the Philippine properties is tantamount to unjust enrichment in favor of
Leticia considering that the latter was already granted all US properties by the California court.

In summary and review, the basic facts are: David and Leticia are US citizens who own properties in the USA and in the
Philippines. Leticia obtained a decree of divorce from the Superior Court of California in June 2005 wherein the court awarded
all the properties in the USA to Leticia. With respect to their properties in the Philippines, Leticiafiled a petition for judicial
separation ofconjugal properties.

At the outset, the trial court erred in recognizing the divorce decree which severed the bond of marriage between the parties. In
Corpuz v. Sto. Tomas,13 we stated that:

The starting point in any recognition of a foreign divorce judgment is the acknowledgment that our courts do not take judicial
notice of foreign judgments and laws. Justice Herrera explained that, as a rule, "no sovereign is bound to give effect within its
dominion to a judgment rendered by a tribunal of another country." This means that the foreign judgment and its authenticity
must beproven as facts under our rules on evidence, together with the alien’s applicable national law to show the effect of the
judgment on the alien himself or herself. The recognition may be made in an action instituted specifically for the purpose or in
another action where a party invokes the foreign decree as an integral aspect of his claim or defense.14

The requirements of presenting the foreign divorce decree and the national law of the foreigner must comply with our Rules of
Evidence. Specifically, for Philippine courts to recognize a foreign judgment relating to the status of a marriage, a copy of the
foreign judgment may be admitted in evidence and proven as a fact under Rule 132, Sections 24 and 25, in relation to Rule 39,
Section 48(b) of the Rules of Court.15

Under Section 24 of Rule 132, the record of public documents of a sovereign authority or tribunal may be proved by: (1) an
official publication thereof or (2) a copy attested by the officer having the legal custody thereof. Such official publication or copy
must beaccompanied, if the record is not kept in the Philippines, with a certificate that the attesting officer has the legal custody
thereof. The certificate may be issued by any of the authorized Philippine embassy or consular officials stationed in the foreign
country in which the record is kept, and authenticated by the seal of his office. The attestation must state, in substance, that the
copy is a correct copy of the original, or a specific part thereof, asthe case may be, and must be under the official seal of the
attesting officer.
Section 25 of the same Rule states that whenever a copy of a document or record is attested for the purpose of evidence, the
attestation must state, in substance, that the copy is a correct copy of the original, or a specific part thereof, as the case may be.
The attestation must be under the official seal of the attesting officer, if there be any, or if hebe the clerk of a court having a seal,
under the seal of such court.

Based on the records, only the divorce decree was presented in evidence. The required certificates to prove its authenticity, as
well as the pertinent California law on divorce were not presented.

It may be noted that in Bayot v. Court of Appeals,16 we relaxed the requirement on certification where we held that "[petitioner
therein] was clearly an American citizenwhen she secured the divorce and that divorce is recognized and allowed in any of the
States of the Union, the presentation of a copy of foreign divorce decree duly authenticatedby the foreign court issuing said
decree is, as here, sufficient." In this case however, it appears that there is no seal from the office where the divorce decree was
obtained.

Even if we apply the doctrine of processual presumption17 as the lower courts did with respect to the property regime of the
parties, the recognition of divorce is entirely a different matter because, to begin with, divorce is not recognized between Filipino
citizens in the Philippines. Absent a valid recognition of the divorce decree, it follows that the parties are still legally married in
the Philippines. The trial court thus erred in proceeding directly to liquidation.

As a general rule, any modification in the marriage settlements must be made before the celebration of marriage. An exception
to this rule is allowed provided that the modification isjudicially approved and refers only to the instances provided in Articles
66,67, 128, 135 and 136 of the Family Code.18

Leticia anchored the filing of the instant petition for judicial separation of property on paragraphs 4 and 6 of Article 135 of the
Family Code, to wit:

Art. 135. Any of the following shall be considered sufficient cause for judicial separation of property:

(1) That the spouse of the petitioner has been sentenced to a penalty which carries with it civil interdiction;

(2) That the spouse of the petitioner has been judicially declared an absentee;

(3) That loss of parental authority ofthe spouse of petitioner has been decreed by the court;

(4) That the spouse of the petitioner has abandoned the latter or failed to comply with his or her obligations to the family
as provided for in Article 101;

(5) That the spouse granted the power of administration in the marriage settlements has abused that power; and

(6) That at the time of the petition, the spouses have been separated in fact for at least one year and reconciliation is
highly improbable.

In the cases provided for in Numbers (1), (2), and (3), the presentation of the final judgment against the guiltyor absent spouse
shall be enough basis for the grant of the decree ofjudicial separation of property. (Emphasis supplied).

The trial court had categorically ruled that there was no abandonment in this case to necessitate judicial separation of properties
under paragraph 4 of Article 135 of the Family Code. The trial court ratiocinated:

Moreover, abandonment, under Article 101 of the Family Code quoted above, must be for a valid cause and the spouse is
deemed to have abandoned the other when he/she has left the conjugal dwelling without intention of returning. The intention of
not returning is prima facie presumed if the allegedly [sic] abandoning spouse failed to give any information as to his or her
whereabouts within the period of three months from such abandonment.

In the instant case, the petitioner knows that the respondent has returned to and stayed at his hometown in Maria Aurora,
Philippines, as she even went several times to visit him there after the alleged abandonment. Also, the respondent has been
going back to the USA to visit her and their children until the relations between them worsened. The last visit of said respondent
was in October 2004 when he and the petitioner discussed the filing by the latter of a petition for dissolution of marriage with the
California court. Such turn for the worse of their relationship and the filing of the saidpetition can also be considered as valid
causes for the respondent to stay in the Philippines.19
Separation in fact for one year as a ground to grant a judicial separation of property was not tackled in the trial court’s decision
because, the trial court erroneously treated the petition as liquidation of the absolute community of properties.

The records of this case are replete with evidence that Leticia and David had indeed separated for more than a year and that
reconciliation is highly improbable. First, while actual abandonment had not been proven, it is undisputed that the spouses had
been living separately since 2003 when David decided to go back to the Philippines to set up his own business. Second, Leticia
heard from her friends that David has been cohabiting with Estrellita Martinez, who represented herself as Estrellita Noveras.
Editha Apolonio, who worked in the hospital where David was once confined, testified that she saw the name of Estrellita listed
as the wife of David in the Consent for Operation form.20Third and more significantly, they had filed for divorce and it was granted
by the California court in June 2005.

Having established that Leticia and David had actually separated for at least one year, the petition for judicial separation of
absolute community of property should be granted.

The grant of the judicial separation of the absolute community property automatically dissolves the absolute community regime,
as stated in the 4th paragraph of Article 99 ofthe Family Code, thus:

Art. 99. The absolute community terminates:

(1) Upon the death of either spouse;

(2) When there is a decree of legal separation;

(3) When the marriage is annulled or declared void; or

(4) In case of judicial separation of property during the marriage under Articles 134 to 138. (Emphasis supplied).

Under Article 102 of the same Code, liquidation follows the dissolution of the absolute community regime and the following
procedure should apply:

Art. 102. Upon dissolution of the absolute community regime, the following procedure shall apply:

(1) An inventory shall be prepared, listing separately all the properties of the absolute community and the exclusive
properties of each spouse.

(2) The debts and obligations of the absolute community shall be paid out of its assets. In case of insufficiency of said
assets, the spouses shall be solidarily liable for the unpaid balance with their separate properties in accordance with the
provisions of the second paragraph of Article 94.

(3) Whatever remains of the exclusive properties of the spouses shall thereafter be delivered to each of them.

(4) The net remainder of the properties of the absolute community shall constitute its net assets, which shall be divided
equally between husband and wife, unless a different proportion or division was agreed upon in the marriage
settlements, or unless there has been a voluntary waiver of such share provided in this Code. For purposes of
computing the net profits subject to forfeiture in accordance with Articles 43, No. (2) and 63, No. (2),the said profits shall
be the increase in value between the market value of the community property at the time of the celebration of the
marriage and the market value at the time of its dissolution.

(5) The presumptive legitimes of the common children shall be delivered upon partition, in accordance with Article 51.

(6) Unless otherwise agreed upon by the parties, in the partition of the properties, the conjugal dwelling and the lot on
which it is situated shall be adjudicated tothe spouse with whom the majority of the common children choose to remain.
Children below the age of seven years are deemed to have chosen the mother, unless the court has decided otherwise.
In case there is no such majority, the court shall decide, taking into consideration the best interests of said children. At
the risk of being repetitious, we will not remand the case to the trial court. Instead, we shall adopt the modifications
made by the Court of Appeals on the trial court’s Decision with respect to liquidation.

We agree with the appellate court that the Philippine courts did not acquire jurisdiction over the California properties of David
and Leticia. Indeed, Article 16 of the Civil Code clearly states that real property as well as personal property is subject to the law
of the country where it is situated. Thus, liquidation shall only be limited to the Philippine properties.
We affirm the modification madeby the Court of Appeals with respect to the share of the spouses in the absolutecommunity
properties in the Philippines, as well as the payment of their children’s presumptive legitimes, which the appellate court
explained in this wise:

Leticia and David shall likewise have an equal share in the proceeds of the Sampaloc property. While both claimed to have
1âwphi1

contributed to the redemption of the Noveras property, absent a clear showing where their contributions came from, the same is
presumed to have come from the community property. Thus, Leticia is not entitled to reimbursement of half of the redemption
money.

David's allegation that he used part of the proceeds from the sale of the Sampaloc property for the benefit of the absolute
community cannot be given full credence. Only the amount of ₱120,000.00 incurred in going to and from the U.S.A. may be
charged thereto. Election expenses in the amount of ₱300,000.00 when he ran as municipal councilor cannot be allowed in the
absence of receipts or at least the Statement of Contributions and Expenditures required under Section 14 of Republic Act No.
7166 duly received by the Commission on Elections. Likewise, expenses incurred to settle the criminal case of his personal
driver is not deductible as the same had not benefited the family. In sum, Leticia and David shall share equally in the proceeds
of the sale net of the amount of ₱120,000.00 or in the respective amounts of ₱1,040,000.00.

xxxx

Under the first paragraph of Article 888 of the Civil Code, "(t)he legitime of legitimate children and descendants consists of one-
half or the hereditary estate of the father and of the mother." The children arc therefore entitled to half of the share of each
spouse in the net assets of the absolute community, which shall be annotated on the titles/documents covering the same, as
well as to their respective shares in the net proceeds from the sale of the Sampaloc property including the receivables from Sps.
Paringit in the amount of ₱410,000.00. Consequently, David and Leticia should each pay them the amount of ₱520,000.00 as
their presumptive legitimes therefrom.21

WHEREFORE, the petition is DENIED. The assailed Decision of the Court of Appeals in CA G.R. CV No. 88686 is AFFIRMED.

SO ORDERED.
Orion vs Suzuki

BRION, J.:

Before us is the Petition for Review on Certiorari1 filed by petitioner Orion Savings Bank (Orion) under Rule 45 of the Rules of
Court, assailing the decision2 dated August 23, 2012 and the resolution3 dated January 25, 2013 of the Court of Appeals (CA) in
CA-G.R. CV No. 94104.

The Factual Antecedents

In the first week of August 2003, respondent Shigekane Suzuki (Suzuki), a Japanese national, met with Ms. Helen Soneja
(Soneja) to inquire about a condominium unit and a parking slot at Cityland Pioneer, Mandaluyong City, allegedly owned by
Yung Sam Kang (Kang), a Korean national and a Special Resident Retiree's Visa (SRRV) holder.

At the meeting, Soneja informed Suzuki that Unit No. 536 [covered by Condominium Certificate of Title (CCT) No. 18186] 4 and
Parking Slot No. 42 [covered by CCT No. 9118]5 were for sale for ₱3,000,000.00. Soneja likewise assured Suzuki that the titles
to the unit and the parking slot were clean. After a brief negotiation, the parties agreed to reduce the price to ₱2,800,000.00. On
August 5, 2003, Suzuki issued Kang a Bank of the Philippine Island (BPI) Check No. 83349 6 for One Hundred Thousand Pesos
(₱100,000.00) as reservation fee.7 On August 21, 2003, Suzuki issued Kang another check, BPI Check No. 83350, 8 this time for
₱2,700,000.00 representing the remaining balance of the purchase price. Suzuki and Kang then executed a Deed of Absolute
Sale dated August 26, 20039covering Unit No. 536 and Parking Slot No. 42. Soon after, Suzuki took possession of the
condominium unit and parking lot, and commenced the renovation of the interior of the condominium unit.

Kang thereafter made several representations with Suzuki to deliver the titles to the properties, which were then allegedly in
possession of Alexander Perez (Perez, Orion’s Loans Officer) for safekeeping. Despite several verbal demands, Kang failed to
deliver the documents. Suzuki later on learned that Kang had left the country, prompting Suzuki to verify the status of the
properties with the Mandaluyong City Registry of Deeds.

Before long, Suzuki learned that CCT No. 9118 representing the title to the Parking Slot No. 42 contained no annotations
although it remained under the name of Cityland Pioneer. This notwithstanding, Cityland Pioneer, through Assistant Vice
President Rosario D. Perez, certified that Kang had fully paid the purchase price of Unit. No. 536 10 and Parking Slot No.
42.11 CCT No. 18186 representing the title to the condominium unit had no existing encumbrance, except for anannotation under
Entry No. 73321/C-10186 which provided that any conveyance or encumbrance of CCT No. 18186 shall be subject to approval
by the Philippine Retirement Authority (PRA). Although CCT No. 18186 contained Entry No. 66432/C-10186 dated February 2,
1999 representing a mortgage in favor of Orion for a ₱1,000,000.00 loan, that annotation was subsequently cancelled on June
16, 2000 by Entry No. 73232/T. No. 10186. Despite the cancellation of the mortgage to Orion, the titles to the properties
remained in possession of Perez.

To protect his interests, Suzuki thenexecuted an Affidavit of Adverse Claim12 dated September 8, 2003, withthe Registry of
Deeds of Mandaluyong City, annotated as Entry No. 3292/C-No. 18186 in CCT No. 18186. Suzuki then demanded the delivery
of the titles.13 Orion, (through Perez), however, refused to surrender the titles, and cited the need to consult Orion’s legal counsel
as its reason.

On October 14, 2003, Suzuki received a letter from Orion’s counsel dated October 9, 2003, stating that Kang obtained another
loan in the amount of ₱1,800,000.00. When Kang failed to pay, he executed a Dacion en Pagodated February 2, 2003, in
favorof Orion covering Unit No. 536. Orion, however, did not register the Dacion en Pago, until October 15, 2003.

On October 28, 2003, Suzuki executed an Affidavit of Adverse Claim over Parking Slot No. 42 (covered by CCT No. 9118) and
this was annotated as Entry No. 4712/C-No. 9118 in the parking lot’s title.

On January 27, 2004, Suzuki filed a complaint for specific performance and damages against Kang and Orion. At the pre-trial,
the parties made the following admissions and stipulations:

1. That as of August 26, 2003, Kang was the registered owner of Unit No. 536 and Parking Slot No. 42;

2. That the mortgage in favor ofOrion supposedly executed by Kang, with Entry No. 66432/C-10186 dated February 2,
1999, was subsequently cancelled by Entry No. 73232/T No. 10186 dated June 16, 2000;

3. That the alleged Dacion en Pagowas never annotated in CCT Nos. 18186 and 9118;
4. That Orion only paid the appropriate capital gains tax and the documentary stamp tax for the alleged Dacion en Pago
on October 15, 2003;

5. That Parking Slot No. 42, covered by CCT No. 9118, was never mortgaged to Orion; and

6. That when Suzuki bought the properties, he went to Orion to obtain possession of the titles.

The RTC Ruling

In its decision14 dated June 29, 2009, the Regional Trial Court (RTC), Branch 213, Mandaluyong City ruled infavor of Suzuki and
ordered Orion to deliver the CCT Nos. 18186 and 9118 to Suzuki.

The court found that Suzuki was an innocent purchaser for value whose rights over the properties prevailed over Orion’s. The
RTC further noted that Suzuki exerted efforts to verify the status of the properties but he did not find any existing encumbrance
inthe titles. Although Orion claims to have purchased the property by way of a Dacion en Pago, Suzuki only learned about it two
(2) months after he bought the properties because Orion never bothered to register or annotate the Dacion en Pagoin CCT Nos.
18186 and 9116.

The RTC further ordered Orion and Kang to jointly and severally pay Suzuki moral damages, exemplary damages, attorney’s
fees, appearance fees, expenses for litigation and cost ofsuit. Orion timely appealed the RTC decision with the CA.

The CA Ruling

On August 23, 2012, the CA partially granted Orion’s appeal and sustained the RTC insofar as it upheld Suzuki’s right over the
properties. The CA further noted that Entry No. 73321/C-10186 pertaining to the withdrawal of investment of an SRRV only
serves as a warning to an SRRV holder about the implications of a conveyance of a property investment. It deviated from the
RTC ruling, however, by deleting the award for moral damages, exemplary damages, attorney’s fees, expenses for litigation and
cost of suit.

Orion sought a reconsideration of the CA decision but the CA denied the motion in its January 25, 2013 resolution. Orion then
filed a petition for review on certiorariunder Rule 45 with this Court.

The Petition and Comment

Orion’s petition is based on the following grounds/arguments:15

1. The Deed of Sale executed by Kang in favor of Suzuki is null and void. Under Korean law, any conveyance of a
conjugal property should be made with the consent of both spouses;

2. Suzuki is not a buyer in good faith for he failed to check the owner’s duplicate copies of the CCTs;

3. Knowledge of the PRA restriction under Entry No. 73321/C-10186, which prohibits any conveyance or encumbrance
of the property investment, defeats the alleged claim of good faith by Suzuki; and

4. Orion should not be faulted for exercising due diligence.

In his Comment,16 Suzuki asserts that the issue on spousal consent was belatedly raised on appeal. Moreover, proof of
acquisition during the marital coverture is a condition sine qua nonfor the operation of the presumption of conjugal
ownership.17 Suzuki additionally maintains that he is a purchaser in good faith, and is thus entitled to the protection of the law.

The Court’s Ruling

We deny the petition for lack of merit.

The Court may inquire into conclusions of fact when the inference made is manifestly mistaken

In a Rule 45 petition, the latitude of judicial review generally excludes a factual and evidentiary re-evaluation, and the Court
ordinarily abides by the uniform factual conclusions of the trial court and the appellate court.18 In the present case, while the
courts below both arrived at the same conclusion, there appears tobe an incongruence in their factual findings and the legal
principle they applied to the attendant factual circumstances. Thus, we are compelled to examine certain factual issues in the
exercise of our sound discretion to correct any mistaken inference that may have been made.19

Philippine Law governs the transfer of real property

Orion believes that the CA erred in not ruling on the issue of spousal consent. We cannot uphold this position, however,
because the issue of spousal consent was only raised on appeal to the CA. It is a well-settled principle that points of law,
theories, issues, and arguments not brought to the attention of the trial court cannot be raised for the first time on appeal and
considered by a reviewing court.20 To consider these belated arguments would violate basic principles of fairplay, justice, and
due process.

Having said these, we shall nonetheless discuss the issues Orion belatedly raised, if only to put an end to lingering doubts on
the correctness of the denial of the present petition.

It is a universal principle thatreal or immovable property is exclusively subject to the laws of the country or state where it is
located.21 The reason is found in the very nature of immovable property — its immobility. Immovables are part of the country and
so closely connected to it that all rights over them have their natural center of gravity there.22

Thus, all matters concerning the titleand disposition ofreal property are determined by what is known as the lex loci rei sitae,
which can alone prescribe the mode by which a title canpass from one person to another, or by which an interest therein can be
gained or lost.23 This general principle includes all rules governing the descent, alienation and transfer of immovable property
and the validity, effect and construction of wills and other conveyances.24

This principle even governs the capacity of the person making a deed relating to immovable property, no matter what its nature
may be. Thus, an instrument will be ineffective to transfer title to land if the person making it is incapacitated by the lex loci rei
sitae, even though under the law of his domicile and by the law of the place where the instrument is actually made, his capacity
is undoubted.25

On the other hand, property relations between spouses are governed principally by the national law of the spouses. 26 However,
the party invoking the application of a foreign law has the burden of proving the foreign law. The foreign law is a question of fact
to be properly pleaded and proved as the judge cannot take judicial notice of a foreign law.27 He is presumed to know only
domestic or the law of the forum.28

To prove a foreign law, the party invoking it must present a copy thereof and comply with Sections 24 and 25 of Rule 132 of the
Revised Rules of Court which reads:

SEC. 24. Proof of official record. — The record of public documents referred to in paragraph (a) of Section 19, when admissible
for any purpose, may be evidenced by an official publication thereof or by a copy attested by the officer having the legal custody
of the record, or by his deputy, and accompanied, if the record is not kept in the Philippines, with a certificate that such officer
has the custody. If the office in which the record is kept is in a foreign country, the certificate may be made by a secretary of the
embassy or legation, consul general, consul, vice consul, or consular agent or by any officer in the foreign service of the
Philippines stationed in the foreign country inwhich the record is kept, and authenticated by the seal of his office. (Emphasis
supplied)

SEC. 25. What attestation ofcopy must state. — Whenever a copy of a document or record is attested for the purpose of the
evidence, the attestation must state, in substance, that the copy is a correct copy of the original, or a specific part thereof, as the
case may be. The attestation must be under the official seal of the attesting officer, if there be any, or if he be the clerk of a court
having a seal, under the seal of such court.

Accordingly, matters concerning the title and disposition of real property shall be governed by Philippine law while issues
pertaining to the conjugal natureof the property shall be governed by South Korean law, provided it is proven as a fact.

In the present case, Orion, unfortunately failed to prove the South Korean law on the conjugal ownership ofproperty. It merely
attached a "Certification from the Embassy of the Republic of Korea"29 to prove the existence of Korean Law. This certification,
does not qualify as sufficient proof of the conjugal nature of the property for there is no showing that it was properly
authenticated bythe seal of his office, as required under Section 24 of Rule 132.30

Accordingly, the International Law doctrine of presumed-identity approachor processual presumption comes into play, i.e., where
a foreign law is not pleaded or, evenif pleaded, is not proven, the presumption is that foreign law is the same as Philippine Law. 31
Under Philippine Law, the phrase "Yung Sam Kang ‘married to' Hyun Sook Jung" is merely descriptive of the civil status of
Kang.32 In other words, the import from the certificates of title is that Kang is the owner of the properties as they are registered in
his name alone, and that he is married to Hyun Sook Jung.

We are not unmindful that in numerous cases we have held that registration of the property in the name of only one spouse does
not negate the possibility of it being conjugal or community property.33 In those cases, however, there was proof that the
properties, though registered in the name of only one spouse, were indeed either conjugal or community
properties.34 Accordingly, we see no reason to declare as invalid Kang’s conveyance in favor of Suzuki for the supposed lack of
spousal consent.

The petitioner failed to adduce sufficient evidence to prove the due execution of the Dacion en Pago

Article 1544 of the New Civil Codeof the Philippines provides that:

ART. 1544. If the same thing should have been sold to different vendees, the ownership shall be transferred to the person who
may have first taken possession thereof in good faith, if it should be movable property.

Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith first recorded it in the
Registry of Property.

Should there be no inscription, the ownership shall pertain to the person who in good faith was first in the possession; and, in the
absence thereof, to the person who presents the oldest title, provided there is good faith.

The application of Article 1544 of the New Civil Code presupposes the existence of two or more duly executed contracts of sale.
In the present case, the Deed of Sale dated August 26, 200335 between Suzuki and Kang was admitted by Orion36 and was
properly identified by Suzuki’s witness Ms. Mary Jane Samin (Samin).37

It is not disputed, too, that the Deed of Sale dated August 26, 2003 was consummated. In a contract of sale, the seller obligates
himself to transfer the ownership of the determinate thing sold, and to deliver the same to the buyer, who obligates himself to
pay a price certain to the seller.38 The execution of the notarized deed of saleand the actual transfer of possession amounted to
delivery that produced the legal effect of transferring ownership to Suzuki.39

On the other hand, although Orion claims priority in right under the principle of prius tempore, potior jure (i.e.,first in time,
stronger in right), it failedto prove the existence and due execution of the Dacion en Pagoin its favor.

At the outset, Orion offered the Dacion en Pagoas Exhibit "5"with submarkings "5-a" to "5-c" to prove the existence of the
February 6, 2003 transaction in its Formal Offer dated July 20, 2008. Orion likewise offered in evidence the supposed
promissory note dated September 4, 2002 as Exhibit "12"to prove the existence of the additional ₱800,000.00 loan. The RTC,
however, denied the admission of Exhibits "5" and "12,"among others, in its order dated August 19, 2008 "since the same [were]
not identified in court by any witness."40

Despite the exclusion of its most critical documentary evidence, Orion failed to make a tender ofexcluded evidence, as provided
under Section 40, Rule 132 of the Rules of Court. For this reason alone, we are prevented from seriously considering Exhibit "5"
and its submarkings and Exhibit "12" in the present petition.

Moreover, even if we consider Exhibit "5" and its submarkings and Exhibit "12" in the present petition, the copious
inconsistencies and contradictions in the testimonial and documentary evidence of Orion, militate against the conclusion that the
Dacion en Pagowas duly executed. First, there appears to be no due and demandable obligation when the Dacion en Pago was
executed, contrary to the allegations of Orion. Orion’s witness Perez tried to impress upon the RTC that Kang was in default in
his ₱1,800,000.00 loan. During his direct examination, he stated:

ATTY. CRUZAT:

Q: Okay, so this loan of ₱1.8 million, what happened to this loan, Mr. Witness?

A: Well it became past due, there has been delayed interest payment by Mr. Kangand...

Q: So what did you do after there were defaults[?]


A: We have to secure the money or the investment of the bank through loans and we have executed a dacion en
pagobecause Mr. Kang said he has no money. So we just execute[d] the dacion en pago rather than going through the
Foreclosure proceedings.

xxxx

Q: Can you tell the court when was this executed?

A: February 6, 2003, your Honor.41

A reading of the supposed promissory note, however, shows that there was nodefault to speak of when the supposed Dacion en
Pagowas executed.

Based on the promissory note, Kang’s loan obligation wouldmature only on August 27, 2003. Neither can Orion claim that Kang
had been in default in his installment payments because the wordings of the promissory note provide that "[t]he principal of this
loanand its interest and other charges shall be paid by me/us in accordance hereunder: SINGLE PAYMENT LOANS. 42 "There
was thus no due and demandable loan obligation when the alleged Dacion en Pago was executed.

Second, Perez, the supposed person who prepared the Dacion en Pago,appears to only have a vague idea of the transaction he
supposedly prepared. During his cross-examination, he testified:

ATTY. DE CASTRO:

Q: And were you the one who prepared this [dacion en pago] Mr. witness?

A: Yes, sir. I personally prepared this.

xxxx

Q: So this 1.8 million pesos is already inclusive of all the penalties, interest and surcharge due from Mr. Yung Sam
Kang?

A: It’s just the principal, sir.

Q: So you did not state the interest [and] penalties?

A: In the [dacion en pago], we do not include interest, sir. We may actually includethat but....

Q: Can you read the Second Whereas Clause, Mr. Witness?

A: Whereas the first party failed to pay the said loan to the second party and as of February 10, 2003, the outstanding
obligation which is due and demandable principal and interest and other charges included amounts to ₱1,800,000.00
pesos, sir.

xxxx

Q: You are now changing your answer[.] [I]t now includes interest and other charges, based on this document?

A: Yes, based on that document, sir.43

Third, the Dacion en Pago,mentioned that the ₱1,800,000.00 loan was secured by a real estate mortgage. However, no
document was ever presented to prove this real estate mortgage aside from it being mentioned in the Dacion en Pago
itself.

ATTY. DE CASTRO:

Q: Would you know if there is any other document like a supplement to that Credit Line Agreement referring to this 1.8
million peso loan by Mr. Yung Sam Kang which says that there was a subsequent collateralization or security given by
Mr. Yung [Sam]
Kang for the loan?

xxxx

A: The [dacion en pago], sir.44

Fourth,the Dacion en Pago was first mentioned only two (2) months after Suzuki and Samin demanded the delivery of the titles
sometime in August 2003,and after Suzuki caused the annotation of his affidavit of adverse claim. Records show that it was only
on October 9, 2003, when Orion, through its counsel, Cristobal Balbin Mapile & Associates first spoke of the Dacion en
Pago.45 Not even Perez mentioned any Dacion en Pago on October 1, 2003, when he personally received a letter demanding the
delivery of the titles.Instead, Perez refused to accept the letter and opted to first consult with his lawyer.46

Notably, even the October 9, 2003 letter contained material inconsistencies in its recital of facts surrounding the execution of the
Dacion en Pago. In particular, it mentioned that "on [September 4, 2002], after paying the original loan, [Kang] applied and was
granted a new Credit Line Facility by [Orion] x x x for ONE MILLION EIGHT HUNDRED THOUSAND PESOS (₱1,800,000.00)."
Perez, however, testified that there was "no cash movement" in the original ₱1,000,000.00 loan. In his testimony, he said:

COURT:

xxxx

Q: Would you remember what was the subject matter of that real estate mortgage for that first ₱1,000,000.00 loan?

A: It’s a condominium Unit in Cityland, sir.

xxxx

Q: Would you recall if there was any payment by Mr. Yung Sam Kang of this ₱1,000,000.00 loan?

A: None sir.

Q: No payments?

A: None sir.

Q: And from 1999 to 2002, there was no payment, either by way of payment to the principal, by way ofpayment of
interest, there was no payment by Mr. Yung Sam Kang of this loan?

A: Literally, there was no actual cash movement, sir.

Q: There was no actual cash?

A: Yes, sir.

Q: And yet despite no payment, the bank Orion Savings Bank still extended an ₱800,000.00 additional right?

A: Yes, sir.47

Fifth, it is undisputed that notwithstanding the supposed execution of theDacion en Pago on February 2, 2003, Kang remained in
possession of the condominium unit. In fact, nothing in the records shows that Orion even bothered to take possession of the
property even six (6) months after the supposed date of execution of the Dacion en Pago. Kang was even able to transfer
possession of the condominium unit to Suzuki, who then made immediate improvements thereon. If Orion really purchased the
condominium unit on February 2, 2003 and claimed to be its true owner, why did it not assert its ownership immediately after the
alleged sale took place? Why did it have to assert its ownership only after Suzuki demanded the delivery of the titles? These
gaps have remained unanswered and unfilled.

In Suntay v. CA,48 we held that the most prominent index of simulation is the complete absence of anattempt on the part of the
vendee to assert his rights of ownership over the property in question. After the sale, the vendee should have entered the land
and occupied the premises. The absence of any attempt on the part of Orion to assert its right of dominion over the property
allegedly soldto it is a clear badge of fraud. That notwithstanding the execution of the Dacion en Pago, Kang remained in
possession of the disputed condominium unit – from the time of the execution of the Dacion en Pagountil the property’s
subsequent transfer to Suzuki – unmistakably strengthens the fictitious nature of the Dacion en Pago.

These circumstances, aside from the glaring inconsistencies in the documents and testimony of Orion’s witness, indubitably
prove the spurious nature of the Dacion en Pago.

The fact that the Dacion en Pago


is a notarized document does not
support the conclusion that the
sale it embodies is a true
conveyance

Public instruments are evidence of the facts that gave rise to their execution and are to be considered as containing all the terms
of the agreement.49 While a notarized document enjoys this presumption, "the fact that a deed is notarized is not a guarantee of
the validity of its contents."50 The presumption of regularity of notarized documents is not absolute and may be rebutted by clear
and convincing evidence to the contrary.51

In the present case, the presumption cannot apply because the regularity in the execution of the Dacion en Pago and the loan
documents was challenged in the proceedings below where their prima facievalidity was overthrown by the highly questionable
circumstances surrounding their execution.52

Effect of the PRA restriction on


the validity of Suzuki’s title to the
property

Orion argues that the PRA restriction in CCT No. 18186 affects the conveyance to Suzuki. In particular, Orion assails the status
of Suzuki as a purchaser in good faith in view of the express PRA restriction contained in CCT No. 18186. 53

We reject this suggested approachoutright because, to our mind, the PRA restriction cannot affect the conveyance in favor of
Suzuki. On this particular point, we concur withthe following findings of the CA:

x x x the annotation merely servesas a warning to the owner who holds a Special Resident Retiree’s Visa(SRRV) that he shall
lose his visa if he disposes his property which serves as his investment in order to qualify for such status. Section 14 of the
Implementing Investment Guidelines under Rule VIII-A of the Rules and Regulations Implementing Executive Order No. 1037,
Creating the Philippine Retirement Park System Providing Funds Therefor and For Other Purpose ( otherwise known as the
Philippine Retirement Authority) states:

Section 14. Should the retiree-investor withdraw his investment from the Philippines, or transfer the same to another domestic
enterprise, orsell, convey or transfer his condominium unit or units to another person, natural or juridical without the prior
approval of the Authority, the Special Resident Retiree’s Visa issued to him, and/or unmarried minor child or children[,] may be
cancelled or revoked by the Philippine Government, through the appropriate government department or agency, upon
recommendation of the Authority.54

Moreover, Orion should not be allowed to successfully assail the good faith of Suzuki on the basis of the PRA restriction. Orion
knew of the PRA restriction when it transacted with Kang. Incidentally, Orion admitted accommodating Kang’s request to cancel
the mortgage annotation despite the lack of payment to circumvent the PRA restriction. Orion, thus, is estopped from impugning
the validity of the conveyance in favor of Suzuki on the basis of the PRA restriction that Orion itself ignored and "attempted" to
circumvent.

With the conclusion that Orion failed to prove the authenticity of the Dacion en Pago, we see no reason for the application of the
rules on double sale under Article 1544 of the New Civil Code. Suzuki, moreover, successfully adduced sufficient evidence to
establish the validity of conveyance in his favor.

WHEREFORE, premises considered, we DENY the petition for lack of merit. Costs against petitioner Orion Savings Bank.

SO ORDERED.
Far East Bank vs Pacilan

Facts:
1. Pacilan maintains a current account with petitioner bank (now BPI). He issued several postdated checks, the last one being
check no. 2434886 amounting to P680. The said check was presented to petitioner bank for payment on April 4, 1988 but was
dishonored. It appeared that the account of Pacilan has been closed on the evening of April 4 on the ground that it was
'improperly handled'.

2. It appeared that the plaintiff issued four checks from March 30 - April 4, 1988 amounting in total to P7,410, on one hand, his
funds in the bank only amounted to P6,981.43, thus an overdraft of P 428.57 resulted therefrom. Consequently, the last check
was dishonored despite the fact that plaintiff deposited the amount the following day.

3. Pacilan wrote a complaint to the bank but after the bank did not reply, he filed an action for damages against it and the
employee (Villadelgado) who closed the account. The plaintiff alleged that the immediate closure of his account was malicious
and intended to embarrass him.

4. The lower court ruled in favor of the plaintiff and awarded actual damages (P100,000) and exemplary damages (P50,000).
The bank appealed, but the CA affirmed the lower court's decision with modifications and held that the closure of the bank of
plaintiff's account despite its rules and regulation allowing a re-clearing of a check returned for insufficiency of funds, is patently
malicious and unjustifiable. Hence, this appeal.

5. The petitioner contended that in closing the account, it acted in good faith and in accordance with the pertinent banking rules
and regulations governing the operations of a regular demand deposit, allowing it to close an account if the depositor frequently
draws checks against insufficient funds or uncollected deposits.

Issue: Whether or not the petitioner is liable for damages

NO. The award of damages under Art. 19 of the Civil Code is unjustifiable. The petitioner has the right to close the account of
plaintiff based on the rules and regulations on regular demand deposits. The facts do not show that the petitioner abused its
rights in the exercise of its duties. The evidence negates the existence of bad faith and malice on the part of the petitioner bank,
which are the second and third elements necessary to prove an abuse of right in violation of Art. 19.

The records also showed that indeed plaintiff has mishandled his account by issuing checks previously against insufficient funds
not just once, but more than a hundred times.

Moreover, the acceptance by the bank of the deposit the day after the closure of the account cannot be considered as bad faith
nor done with malice but a mere simple negligence of its personnel.

As a result, whatever damage the plaintiff has suffered (by virtue of the subsequent dishonor of the other checks he issued)
should be borne by him alone as these was the result of his own act in irregularly handling his account.

Far East Bank vs PacilanDate: July 29, 2005Petitioner: Far East Bank and Trust Company, now BPIRespondent:
Themistocles Pacilan JrPonente: Callejo Sr
Facts: Respondent opened a current account with petitioner’s Bacolod Branch. Respondnet
since then issuedseveral postdated checks to different payees drawn against the said account. Sometime in March
1988, therespondent issued a check in the amount of P680.00 and the same was presented for payment to
petitioner bankon April 4, 1988. Upon presentment, the check was dishonored. The next day, respondent deposited
to his currentaccount the amount of P800.00. The said amount was accepted by petitioner bank; hence, increasing
the balance
of the respondent’s deposit to P1,051.43.
Subsequently, when the respondent verified with the bank about the dishonored check, he discovered
that his current account was closed on the ground that it was “improperly handled.” The records of the bank
disclosed that respondent issued four checks, to wit: Check No. 2480416 for P6,000.00; Check No. 2480419
forP50.00; 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 respondent’s 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
respondent’sdeposit in his account. For this reason, the bank closed respondent’s 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
wasdishonored.Respondent filed with the RTC of Negros Occidental a complaint for damages against the
bank andVilladelgado, complaining that the closure of his account was unjustified because on the first banking hour
of April5, 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 had until the last clearing hour of the following day, or on April 5, 1988,
tohonor the check or return it, if not funded. In disregard of this banking procedure and practice, however,
petitioner bank hastily closed the respondent’s current account and dishonored his Check No. 2434886.

In their answer, the bank and Villadelgado maintained that the respondent’s current account was subject tothe
bank’s Rules and Regulations G
overning 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 againstinsufficient funds and/or uncollected deposits” and that “the Bank rese
rves the right at any time to return checks
of the depositor which are drawn against insufficient funds or for any reason.” Also, respondent had improperlyand
irregularly handled his current account. For example, in 1986, the respondent’s account was ove
rdrawn 156times, in 1987, 117 times and in 1988, 26 times. In all these instances, the account was overdrawn due
to theissuance of checks against insufficient funds. The respondent had also signed several checks with a
differentsignature from the specimen on file for dubious reasons.The court a quo rendered judgment in favor
of the respondent as it ordered the petitioner bank andVilladelgado, jointly and severally, to pay the respondent
the amounts of P100,000.00 as moral damages andP50,000.00 as exemplary damages and costs of suit. The CA
affirmed.Issue: WON the bank is liable for damagesHeld: NoRatio: A perusal of the respective decisions of the
court a quo and the appellate court show that the award of
damages in the respondent’s favor wa
s anchored mainly on Article 19 CC. The elements of abuse of rights are thefollowing: (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. Malice or bad faith is at the core of the said provision. The law always presumesgood faith and
any person who seeks to be awarded damages due to acts of another has the burden of provingthat the latter
acted in bad faith or with ill-motive. Good faith refers to the state of the mind which is manifestedby the acts of
the individual concerned. It consists of the intention to abstain from taking an unconscionable and

unscrupulous advantage of another. 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 somemotives or
interest or ill-will that partakes of the nature of fraud. Malice connotes ill-will or spite and speaks not inresponse
to duty. It implies an intention to do ulterior and unjustifiable harm. Malice is bad faith or bad motive.Undoubtedly,
the bank has the right to close the account of the respondent based on the followingprovisions of its Rules and
Regulations Governing the Establishment and Operation of Regular Demand Deposits.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 arenot 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 respondent’s 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
thebalance of his current account deposit was only P6,981.43. Thus, he incurred an overdraft
of P428.57 whichresulted in the dishonor of his Check No. 2434886. Further, petitioner bank showed that in 1986,
the currentaccount of the respondent was overdrawn 156 times due to his issuance of checks against insufficient
funds. In1987, the said account was overdrawn 117 times for the same reason. Again, in 1988, 26 times. There were
alsoseveral instances when the respondent issued checks deliberately using a signature different from
his specimen
signature on file with petitioner bank. All these circumstances taken together justified the petitioner bank’s closur
e
of the respondent’s account on April 4, 1988 for “improper handling.”
It is observed that nowhere under its rules and regulations is petitioner bank required to notify therespondent, or
any depositor for that matter, of the closure of the account for frequently drawing checks againstinsufficient
funds. No malice or bad faith could be imputed on petitioner bank for so acting since the records bearout that the
respondent had indeed been improperly and irregularly handling his account not just a few times buthundreds of
times. Under the circumstances, petitioner bank could not be faulted for exercising its right inaccordance with the
express rules and regulations governing the current accounts of its depositors. Upon theopening 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 theclosure of his account constitutes bad faith or malice on
the part of petitioner bank. The same could becharacterized as simple negligence by its personnel. Said act, by
itself, is not constitutive of bad faith. Therespondent had thus failed to discharge his burden of proving bad faith
on the part of petitioner bank or that itwas motivated by ill-will or spite in closing his account on April 4, 1988 and
in inadvertently accepting his depositon April 5, 1988.Further, it has not been shown that these acts were done by
the bank with the sole intention of prejudicing and injuring the respondent. It is conceded that the respondent
may have suffered damages as aresult 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
therecompense or compensation awarded for the damage suffered. Thus, there can be damage without injury
inthose instances in which the loss or harm was not the result of a violation of a legal duty. In such cases,
theconsequences must be borne by the injured person alone, the law affords no remedy for damages resulting
froman act which does not amount to a legal injury or wrong. These situations are often called damnum
absqueinjuria.

Whatever damages the respondent may have suffered as a consequence, e.g., dishonor of his
otherinsufficiently funded checks, would have to be borne by him a
lone. It was the respondent’s 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 respondent’s case is cl
early one of damnumabsque injuria.
Uypitching vs quiamco

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 decision1 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 robbery3 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 respondent’s
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 corporation’s collector,
Wilfredo Veraño, that the motorcycle had allegedly been "taken by respondent’s 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 Uypitching’s instruction and over the clerk’s objection, took
the motorcycle.

On February 18, 1991, petitioner Uypitching filed a criminal complaint for qualified theft and/or violation of the Anti-Fencing
Law6 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 complaint8 and denied petitioner Uypitching’s 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 decision10 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 1911 and 2012 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 attorney’s fees plus costs.

Petitioners appealed the RTC decision but the CA affirmed the trial court’s decision with modification, reducing the award of
moral and exemplary damages to P300,000 and 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, attorney’s 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 respondent’s 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 respondent14 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 Prosecutor’s 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 Veraño[,] 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 Veraño 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 Uypitching not 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
[Prosecutor’s] 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 latter’s
men of stealing the motorcycle[,] much less bother[ed] to file a case for qualified theft before the authorities. That Atty.
Uypitching’s 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 Gonzaga16 [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
lesson to the thief of motorcycle.")17

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 corporation’s 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 respondent’s 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.
Country club vs

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 Decision1 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 CCCI’s Board of Directors.

In 1996, respondent filed with CCCI an application for proprietary membership. The application was indorsed by CCCI’s 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 respondent’s application
for proprietary membership was deferred. In another Board meeting held on July 30, 1997, respondent’s application was voted
upon. Subsequently, or on August 1, 1997, respondent received a letter from Julius Z. Neri, CCCI’s 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 attorney’s
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 court’s 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 attorney’s
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
Resolution4 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 respondent’s 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 latter’s application; and in disregarding their defense of damnum
absque injuria.

For his part, respondent maintains that the petition lacks merit, hence, should be denied.

CCCI’s 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 CCCI’s 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
respondent’s 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 respondent’s 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
respondent’s 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 CCCI’s 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 respondent’s 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 person’s right, as
in this case.

As to the appellate court’s 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
respondent’s 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 attorney’s fees and litigation expenses, Article 2208 of the same Code provides, among others, that attorney’s
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 attorney’s 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 attorney’s 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 respondent’s 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
attorney’s 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.
Calatagan Golf Club Vs. Clemente

Calatagan Golf Club – Petitioner

Clemente – Respondent

Facts:

 Clemente applied to purchase one share of stock of Calatagan, indicating in his application for
membership his mailing address at Phimco Industries, Inc., complete residential address, office and
residence telephone numbers, as well as the company with which he was connected. Calatagan issued to
him a Certificate of Stock No. A-01295 on May 2, 1990 after paying 120,000php for share.
 Calatagan charges monthly dues on its members. The provisions of monthly dues is incorporation in
Calatagan’s Articles of Incorporation and By-Laws. It is also reproduced at the back of each certificate
of stock.
o The amount to be paid for the monthly dues should be no less than 50php, in addition to such
fees as may be charged for the actual use of facilities
 Clemente became a member, the monthly charge stood at 400php. He paid 3,000php for his monthly
dues on march 21, 1991 and another 5,400php on December 9, 1991. Then he ceased paying the dues.
At that point, his balance amounted to 400php

Actions Taken by Calatagan:

 10 months later, Calatagan made the initial step to collect Clemente’s back accounts by sending a
demand letter dated September 2, 1992
o Then followed by a second letter dated October 22, 1992
o Both letters were sent back to sender with the postal note that the address had been closed
 Calatagan declared Clemente delinquent for having failed to pay his monthly dues for more than 60
days, specifically 5,600php as of October 31, 1992
 Clemente’s name was posted in the list of delinquent members on the club’s bulletin board
 On December 1, 1992, Calatagans board of directors adopted a resolution authorizing the foreclosure of
shared of delinquent members, including Clemente’s; and the public auction of these shares.
 On December 7, 1992, Calatagan sent a third and final letter to Clemente, this was signed by its
Corporate Secretary, Atty. Benjamin Tanedo Jr.
o This letter contains a warning that if Clemente does not settle his outstanding dues, his share
would be included in the public auction along with other delinquent shares
o This was sent to Clemente’s mailing address that had already been closed
 Clemente’s share has been sold to Nestor A. Virata for 64,000php with an accrued monthly due
amounting to 5,200pho

Clemente’s Side

 Clemente learned of the sale of his share only in November of 1997


 He filed a claim with the Securities and Exchange Commission (SEC) seeking the restoration of his
shareholding in Calatagan with damages
 SEC dismissed Clemente’s complaint, however the CA reversed the SEC’s decision

Issue

Whether or not Calatagan Golf Club acted in bad faith when it sold Clemente’s share

Ruling

 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 gold course and avail of its amenities, but also in significant
pecuniary damage to him
 The bad faith exhibited by Calatagan brings into operation Articles 19, 20, and 21 of the Civil Code
 The CA awarded Clemente 200,000php as moral damages, 100,000pho as exemplary damages, and
100,000php attorney’s fees
 Wherefore, the petition is denied. The Decision of the Court of Appeals is Affirmed. Costs against
petitioner.
Ardiente vs

PERALTA, J.:

Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to reverse and set aside the
Decision1 and Resolution2 of the Court of Appeals (CA), dated August 28, 2003 and December 17, 2003, respectively, in CA-
G.R. CV No. 73000. The CA Decision affirmed with modification the August 15, 2001 Decision3of the Regional Trial Court (RTC)
of Cagayan de Oro City, Branch 24, while the CA Resolution denied petitioner's Motion for Reconsideration.

The facts, as summarized by the CA, are as follows:

[Herein petitioner] Joyce V. Ardiente and her husband Dr. Roberto S. Ardiente are owners of a housing unit at Emily Homes,
Balulang, Cagayan de Oro City with a lot area of one hundred fifty-three (153) square meters and covered by Transfer
Certificate of Title No. 69905.

On June 2, 1994, Joyce Ardiente entered into a Memorandum of Agreement (Exh. "B", pp. 470-473, Records) selling,
transferring and conveying in favor of [respondent] Ma. Theresa Pastorfide all their rights and interests in the housing unit at
Emily Homes in consideration of ₱70,000.00. The Memorandum of Agreement carries a stipulation:

"4. That the water and power bill of the subject property shall be for the account of the Second Party (Ma. Theresa Pastorfide)
effective June 1, 1994." (Records, p. 47)

vis-a-vis Ma. Theresa Pastorfide's assumption of the payment of the mortgage loan secured by Joyce Ardiente from the National
Home Mortgage (Records, Exh. "A", pp. 468-469)

For four (4) years, Ma. Theresa's use of the water connection in the name of Joyce Ardiente was never questioned nor
perturbed (T.S.N., October 31, 2000, pp. 7-8) until on March 12, 1999, without notice, the water connection of Ma. Theresa was
cut off. Proceeding to the office of the Cagayan de Oro Water District (COWD) to complain, a certain Mrs. Madjos told Ma.
Theresa that she was delinquent for three (3) months corresponding to the months of December 1998, January 1999, and
February 1999. Ma. Theresa argued that the due date of her payment was March 18, 1999 yet (T.S.N., October 31, 2000, pp.
11-12). Mrs. Madjos later told her that it was at the instance of Joyce Ardiente that the water line was cut off (T.S.N., February 5,
2001, p. 31).

On March 15, 1999, Ma. Theresa paid the delinquent bills (T.S.N., October 31, 2000, p. 12). On the same date, through her
lawyer, Ma. Theresa wrote a letter to the COWD to explain who authorized the cutting of the water line (Records, p. 160).

On March 18, 1999, COWD, through the general manager, [respondent] Gaspar Gonzalez, Jr., answered the letter dated March
15, 1999 and reiterated that it was at the instance of Joyce Ardiente that the water line was cut off (Records, p. 161).

Aggrieved, on April 14, 1999, Ma. Theresa Pastorfide [and her husband] filed [a] complaint for damages [against petitioner,
COWD and its manager Gaspar Gonzalez] (Records, pp. 2-6).

In the meantime, Ma. Theresa Pastorfide's water line was only restored and reconnected when the [trial] court issued a writ of
preliminary mandatory injunction on December 14, 1999 (Records, p. 237).4

After trial, the RTC rendered judgment holding as follows:

xxxx

In the exercise of their rights and performance of their duties, defendants did not act with justice, gave plaintiffs their due and
observe honesty and good faith. Before disconnecting the water supply, defendants COWD and Engr. Gaspar Gonzales did not
even send a disconnection notice to plaintiffs as testified to by Engr. Bienvenido Batar, in-charge of the Commercial Department
of defendant COWD. There was one though, but only three (3) days after the actual disconnection on March 12, 1999. The due
date for payment was yet on March 15. Clearly, they did not act with justice. Neither did they observe honesty.

They should not have been swayed by the prodding of Joyce V. Ardiente. They should have investigated first as to the present
ownership of the house. For doing the act because Ardiente told them, they were negligent. Defendant Joyce Ardiente should
have requested before the cutting off of the water supply, plaintiffs to pay. While she attempted to tell plaintiffs but she did not
have the patience of seeing them. She knew that it was plaintiffs who had been using the water four (4) years ago and not hers.
She should have been very careful. x x x5
The dispositive portion of the trial court's Decision reads, thus:

WHEREFORE, premises considered, judgment is hereby rendered ordering defendants [Ardiente, COWD and Gonzalez] to pay
jointly and severally plaintiffs, the following sums:

(a) ₱200,000.00 for moral damages;

(b) 200,000.00 for exemplary damages; and

(c) 50,000.00 for attorney's fee.

The cross-claim of Cagayan de Oro Water District and Engr. Gaspar Gonzales is hereby dismissed. The Court is not swayed
that the cutting off of the water supply of plaintiffs was because they were influenced by defendant Joyce Ardiente. They were
negligent too for which they should be liable.

SO ORDERED.6

Petitioner, COWD and Gonzalez filed an appeal with the CA.

On August 28, 2003, the CA promulgated its assailed Decision disposing as follows:

IN VIEW OF ALL THE FOREGOING, the appealed decision is AFFIRMED, with the modification that the awarded damages is
reduced to ₱100,000.00 each for moral and exemplary damages, while attorney's fees is lowered to ₱25,000.00. Costs against
appellants.

SO ORDERED.7

The CA ruled, with respect to petitioner, that she has a "legal duty to honor the possession and use of water line by Ma. Theresa
Pastorfide pursuant to their Memorandum of Agreement" and "that when [petitioner] applied for its disconnection, she acted in
bad faith causing prejudice and [injury to] Ma. Theresa Pastorfide."8

As to COWD and Gonzalez, the CA held that they "failed to give a notice of disconnection and derelicted in reconnecting the
water line despite payment of the unpaid bills by the [respondent spouses Pastorfide]."9

Petitioner, COWD and Gonzalez filed their respective Motions for Reconsideration, but these were denied by the CA in its
Resolution dated December 17, 2003.

COWD and Gonzalez filed a petition for review on certiorari with this Court, which was docketed as G.R. No. 161802. However,
based on technical grounds and on the finding that the CA did not commit any reversible error in its assailed Decision, the
petition was denied via a Resolution10 issued by this Court on March 24, 2004. COWD and Gonzalez filed a motion for
reconsideration, but the same was denied with finality through this Court's Resolution 11 dated June 28, 2004.

Petitioner, on the other hand, timely filed the instant petition with the following Assignment of Errors:

7.1 HONORABLE COURT OF APPEALS (ALTHOUGH IT HAS REDUCED THE LIABILITY INTO HALF) HAS STILL
COMMITTED GRAVE AND SERIOUS ERROR WHEN IT UPHELD THE JOINT AND SOLIDARY LIABILITY OF
PETITIONER JOYCE V. ARDIENTE WITH CAGAYAN DE ORO WATER DISTRICT (COWD) AND ENGR. GASPAR D.
GONZALES FOR THE LATTER'S FAILURE TO SERVE NOTICE UPON RESPONDENTS SPOUSES PASTORFIDE
PRIOR TO THE ACTUAL DISCONNECTION DESPITE EVIDENCE ADDUCED DURING TRIAL THAT EVEN
WITHOUT PETITIONER'S REQUEST, COWD WAS ALREADY SET TO EFFECT DISCONNECTION OF
RESPONDENTS' WATER SUPPLY DUE TO NON-PAYMENT OF ACCOUNT FOR THREE (3) MONTHS.

7.2 THE HONORABLE COURT OF APPEALS COMMITTED GRAVE AND SERIOUS ERROR WHEN IT RULED
TOTALLY AGAINST PETITIONER AND FAILED TO FIND THAT RESPONDENTS ARE GUILTY OF CONTRIBUTORY
NEGLIGENCE WHEN THEY FAILED TO PAY THEIR WATER BILLS FOR THREE MONTHS AND TO MOVE FOR
THE TRANSFER OF THE COWD ACCOUNT IN THEIR NAME, WHICH WAS A VIOLATION OF THEIR
MEMORANDUM OF AGREEMENT WITH PETITIONER JOYCE V. ARDIENTE. RESPONDENTS LIKEWISE
DELIBERATELY FAILED TO EXERCISE DILIGENCE OF A GOOD FATHER OF THE FAMILY TO MINIMIZE THE
DAMAGE UNDER ART. 2203 OF THE NEW CIVIL CODE.
7.3 THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED WHEN IT DISREGARDED THE FACT THAT
RESPONDENT SPOUSES PASTORFIDE ARE LIKEWISE BOUND TO OBSERVE ARTICLE 19 OF THE NEW CIVIL
CODE, i.e., IN THE EXERCISE OF THEIR RIGHTS AND IN THE PERFORMANCE OF THEIR DUTIES TO ACT WITH
JUSTICE, GIVE EVERYONE HIS DUE AND OBSERVE HONESTY AND GOOD FAITH.

7.4 THE HONORABLE COURT OF APPEALS GRAVELY ERRED WHEN IT GRANTED AN AWARD OF MORAL AND
EXEMPLARY DAMAGES AND ATTORNEY'S FEES AS AGAINST PETITIONER ARDIENTE. 12

At the outset, the Court noticed that COWD and Gonzalez, who were petitioner's co-defendants before the RTC and her co-
appellants in the CA, were impleaded as respondents in the instant petition. This cannot be done. Being her co-parties before
the RTC and the CA, petitioner cannot, in the instant petition for review on certiorari, make COWD and Gonzalez, adversary
parties. It is a grave mistake on the part of petitioner's counsel to treat COWD and Gonzalez as respondents. There is no basis
to do so, considering that, in the first place, there is no showing that petitioner filed a cross-claim against COWD and Gonzalez.
Under Section 2, Rule 9 of the Rules of Court, a cross-claim which is not set up shall be barred. Thus, for failing to set up a
cross-claim against COWD and Gonzalez before the RTC, petitioner is already barred from doing so in the present petition.

More importantly, as shown above, COWD and Gonzalez's petition for review on certiorari filed with this Court was already
denied with finality on June 28, 2004, making the presently assailed CA Decision final and executory insofar as COWD and
Gonzalez are concerned. Thus, COWD and Gonzalez are already precluded from participating in the present petition. They
cannot resurrect their lost cause by filing pleadings this time as respondents but, nonetheless, reiterating the same prayer in
their previous pleadings filed with the RTC and the CA.

As to the merits of the instant petition, the Court likewise noticed that the main issues raised by petitioner are factual and it is
settled that the resolution of factual issues is the function of lower courts, whose findings on these matters are received with
respect and considered binding by the Supreme Court subject only to certain exceptions, none of which is present in this instant
petition.13 This is especially true when the findings of the RTC have been affirmed by the CA as in this case. 14

In any case, a perusal of the records at hand would readily show that the instant petition lacks merit.

Petitioner insists that she should not be held liable for the disconnection of respondent spouses' water supply, because she had
no participation in the actual disconnection. However, she admitted in the present petition that it was she who requested COWD
to disconnect the Spouses Pastorfide's water supply. This was confirmed by COWD and Gonzalez in their cross-claim against
petitioner. While it was COWD which actually discontinued respondent spouses' water supply, it cannot be denied that it was
through the instance of petitioner that the Spouses Pastorfide's water supply was disconnected in the first place.

It is true that it is within petitioner's right to ask and even require the Spouses Pastorfide to cause the transfer of the former's
account with COWD to the latter's name pursuant to their Memorandum of Agreement. However, the remedy to enforce such
right is not to cause the disconnection of the respondent spouses' water supply. 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.15 Otherwise, liability for damages to the injured party will attach.16 In the present case, intention to harm was evident on
the part of petitioner when she requested for the disconnection of respondent spouses’ water supply without warning or
informing the latter of such request. Petitioner claims that her request for disconnection was based on the advise of COWD
personnel and that her intention was just to compel the Spouses Pastorfide to comply with their agreement that petitioner's
account with COWD be transferred in respondent spouses' name. If such was petitioner's only intention, then she should have
advised respondent spouses before or immediately after submitting her request for disconnection, telling them that her request
was simply to force them to comply with their obligation under their Memorandum of Agreement. But she did not. What made
matters worse is the fact that COWD undertook the disconnection also without prior notice and even failed to reconnect the
Spouses Pastorfide’s water supply despite payment of their arrears. There was clearly an abuse of right on the part of petitioner,
COWD and Gonzalez. They are guilty of bad faith.

The principle of abuse of rights as enshrined in Article 19 of the Civil Code provides that 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.

In this regard, the Court's ruling in Yuchengco v. The Manila Chronicle Publishing Corporation 17 is instructive, to wit:

xxxx

This provision of law sets standards which must be observed in the exercise of one’s rights as well as in the performance of its
duties, to wit: to act with justice; give everyone his due; and observe honesty and good faith.
In Globe Mackay Cable and Radio Corporation v. Court of Appeals, it was elucidated that 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." The Court said:

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 x x x.

xxxx

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.

Corollarilly, Article 20 provides that "every person who, contrary to law, willfully or negligently causes damage to another shall
indemnify the latter for the same." It speaks of the general sanctions of all other provisions of law which do not especially provide
for its own sanction. When a right is exercised in a manner which does not conform to the standards set forth in the said
provision and results in damage to another, a legal wrong is thereby committed for which the wrongdoer must be responsible.
Thus, if the provision does not provide a remedy for its violation, an action for damages under either Article 20 or Article 21 of
the Civil Code would be proper.

The question of whether or not the principle of abuse of rights has been violated resulting in damages under Article 20 or other
applicable provision of law, depends on the circumstances of each case. x x x18

To recapitulate, petitioner's acts which violated the abovementioned provisions of law is her unjustifiable act of having the
respondent spouses' water supply disconnected, coupled with her failure to warn or at least notify respondent spouses of such
intention. On the part of COWD and Gonzalez, it is their failure to give prior notice of the impending disconnection and their
subsequent neglect to reconnect respondent spouses' water supply despite the latter's settlement of their delinquent account.

On the basis of the foregoing, the Court finds no cogent reason to depart from the ruling of both the RTC and the CA that
petitioner, COWD and Gonzalez are solidarily liable.

The Spouses Pastorfide are entitled to moral damages based on the provisions of Article 2219, 19 in connection with Articles
2020 and 2121 of the Civil Code.

As for exemplary damages, Article 2229 provides that exemplary damages may be imposed by way of example or correction for
the public good. Nonetheless, 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.22 In the instant case, the Court agrees with the
CA in sustaining the award of exemplary damages, although it reduced the amount granted, considering that respondent
spouses were deprived of their water supply for more than nine (9) months, and such deprivation would have continued were it
not for the relief granted by the RTC.

With respect to the award of attorney's fees, Article 2208 of the Civil Code provides, among others, that such fees may be
recovered when exemplary damages are awarded, when the defendant's act or omission has compelled the plaintiff to litigate
with third persons or to incur expenses to protect his interest, and where the defendant acted in gross and evident bad faith in
refusing to satisfy the plaintiffs’ plainly valid, just and demandable claim.

WHEREFORE, instant petition for review on certiorari is DENIED. The Decision and Resolution of the Court of Appeals, dated
August 28, 2003 and December 17, 2003, respectively, in CA-G.R. CV No. 73000 are AFFIRMED.

SO ORDERED.
Sesbreno vs CA

RAUL H. SESBREÑO, Petitioner,


vs.
HONORABLE COURT OF APPEALS, JUAN I. COROMINA (SUBSTITUTED BY ANITA COROMINA, ELIZABETH
COROMINA and ROSIEMARIE COROMINA), VICENTE E. GARCIA (SUBSTITUTED BY EDGAR JOHN GARCIA), FELIPE
CONSTANTINO, RONALD ARCILLA, NORBETO ABELLANA, DEMETRIO BALICHA, ANGELITA LHUILLIER, JOSE E.
GARCIA, AND VISA YAN ELECTRIC COMPANY (VECO), Respondents.

DECISION

BERSAMIN, J.:

This case concerns the claim for damages of petitioner Raul H. Sesbreño founded on abuse of rights. Sesbreño accused the
violation of contract (VOC) inspection team dispatched by the Visayan Electric Company (VECO) to check his electric meter with
conducting an unreasonable search in his residential premises. But the Regional Trial Court (RTC), Branch 13, in Cebu City
rendered judgment on August 19, 1994 dismissing the claim;1 and the Court of Appeals (CA) affirmed the dismissal on March 10,
2003.2

Hence, this appeal by Sesbreño.

Antecedents

At the time material to the petition, VECO was a public utility corporation organized and existing under the laws of the
Philippines. VECO engaged in the sale and distribution of electricity within Metropolitan Cebu. Sesbreño was one of VECO’s
customers under the metered service contract they had entered into on March 2, 1982.3 Respondent Vicente E. Garcia was
VECO’s President, General Manager and Chairman of its Board of Directors. Respondent Jose E. Garcia was VECO’s Vice-
President, Treasurer and a Member of its Board of Directors. Respondent Angelita Lhuillier was another Member of VECO’s
Board of Directors. Respondent Juan Coromina was VECO’s Assistant Treasurer, while respondent Norberto Abellana was the
Head of VECO’s Billing Section whose main function was to compute back billings of customers found to have violated their
contracts.

To ensure that its electric meters were properly functioning, and that none of it meters had been tampered with, VECO
employed respondents Engr. Felipe Constantino and Ronald Arcilla as violation of contract (VOC) inspectors. 4 Respondent Sgt.
Demetrio Balicha, who belonged to the 341st Constabulary Company, Cebu Metropolitan Command, Camp Sotero Cabahug,
Cebu City, accompanied and escorted the VOC inspectors during their inspection of the households of its customers on May 11,
1989 pursuant to a mission order issued to him.5

The CA summarized the antecedent facts as follows:

x x x. Reduced to its essentials, however, the facts of this case are actually simple enough, although the voluminous records
might indicate otherwise. It all has to do with an incident that occurred at around 4:00 o’clock in the afternoon of May 11, 1989.
On that day, the Violation of Contracts (VOC) Team of defendants-appellees Constantino and Arcilla and their PC escort,
Balicha, conducted a routine inspection of the houses at La Paloma Village, Labangon, Cebu City, including that of plaintiff-
appellant Sesbreño, for illegal connections, meter tampering, seals, conduit pipes, jumpers, wiring connections, and meter
installations. After Bebe Baledio, plaintiff-appellant Sesbreño’s maid, unlocked the gate, they inspected the electric meter and
found that it had been turned upside down. Defendant-appellant Arcilla took photographs of the upturned electric meter. With
Chuchie Garcia, Peter Sesbreño and one of the maids present, they removed said meter and replaced it with a new one. At that
time, plaintiff-appellant Sesbreño was in his office and no one called to inform him of the inspection. The VOC Team then asked
for and received Chuchie Garcia’s permission to enter the house itself to examine the kind and number of appliances and light
fixtures in the household and determine its electrical load. Afterwards, Chuchie Garcia signed the Inspection Division Report,
which showed the condition of the electric meter on May 11, 1989 when the VOC Team inspected it, with notice that it would be
subjected to a laboratory test. She also signed a Load Survey Sheet that showed the electrical load of plaintiff-appellant
Sesbreño.

But according to plaintiff-appellant Sesbreño there was nothing routine or proper at all with what the VOC Team did on May 11,
1989 in his house. Their entry to his house and the surrounding premises was effected without his permission and over the
objections of his maids. They threatened, forced or coerced their way into his house. They unscrewed the electric meter, turned
it upside down and took photographs thereof. They then replaced it with a new electric meter. They searched the house and its
rooms without his permission or a search warrant. They forced a visitor to sign two documents, making her appear to be his
representative or agent. Afterwards, he found that some of his personal effects were missing, apparently stolen by the VOC
Team when they searched the house.6
Judgment of the RTC

On August 19, 1994, the RTC rendered judgment dismissing the complaint. 7 It did not accord credence to the testimonies of
Sesbreño’s witnesses, Bebe Baledio, his housemaid, and Roberto Lopez, a part-time salesman, due to inconsistencies on
material points in their respective testimonies. It observed that Baledio could not make up her mind as to whether Sesbreño’s
children were in the house when the VOC inspection team detached and replaced the electric meter. Likewise, it considered
unbelievable that Lopez should hear the exchanges between Constantino, Arcilla and Balicha, on one hand, and Baledio, on the
other, considering that Lopez could not even hear the conversation between two persons six feet away from where he was
seated during the simulation done in court, the same distance he supposedly had from the gate of Sesbreño’s house during the
incident. It pointed out that Lopez’s presence at the gate during the incident was even contradicted by his own testimony
indicating that an elderly woman had opened the gate for the VECO personnel, because it was Baledio, a lady in her 20s, who
had repeatedly stated on her direct and cross examinations that she had let the VECO personnel in. It concluded that for Lopez
to do nothing at all upon seeing a person being threatened by another in the manner he described was simply contrary to human
experience.

In contrast, the RTC believed the evidence of the respondents showing that the VOC inspection team had found the electric
meter in Sesbreño’s residence turned upside down to prevent the accurate registering of the electricity consumption of the
household, causing them to detach and replace the meter. It held as unbelievable that the team forcibly entered the house
through threats and intimidation; that they themselves turned the electric meter upside down in order to incriminate him for theft
of electricity, because the fact that the team and Sesbreño had not known each other before then rendered it unlikely for the
team to fabricate charges against him; and that Sesbreño’s non-presentation of Chuchie Garcia left her allegation of her being
forced to sign the two documents by the team unsubstantiated.

Decision of the CA

Sesbreño appealed, but the CA affirmed the RTC on March 10, 2003,8 holding thusly:

x x x. plaintiff-appellant Sesbreño’s account is simply too implausible or far-fetched to be believed. For one thing, the inspection
on his household was just one of many others that the VOC Team had conducted in that subdivision. Yet, none but plaintiff-
appellant Sesbreño complained of the alleged acts of the VOC Team. Considering that there is no proof that they also
perpetrated the same illegal acts on other customers in the guise of conducting a Violation of Contracts inspection, plaintiff-
appellant Sesbreño likewise failed to show why he alone was singled out. It is also difficult to believe that the VOC Team would
be brazen enough to want to antagonize a person such as plaintiff-appellant Sesbreño. There is no evidence that the VOC
Team harbored any evil motive or grudge against plaintiff-appellant Sesbreño, who is a total stranger to them. Until he came
along, they did not have any prior criminal records to speak of, or at least, no evidence thereof was presented. It is equally
difficult to believe that their superiors would authorize or condone their alleged illegal acts. Especially so since there is no
indication that prior to the incident on May 11, 1989, there was already bad blood or animosity between plaintiff-appellant
Sesbreño and defendant appellees to warrant such a malevolent response. In fact, since availing of defendant-appellee VECO’s
power services, the relationship between them appears to have been uneventful.

It becomes all the more apparent that the charges stemming from the May 11, 1989 incident were fabricated when taken
together with the lower court’s evaluation of the alleged theft of plaintiff-appellant Sesbreño’s personal effects. It stated that on
August 8, 1989, plaintiff-appellant Sesbreño wrote the barangay captain of Punta Princesa and accused Chuchie Garcia and
Victoria Villarta alias Victoria Rocamora of theft of some of his things that earlier he claimed had been stolen by members of the
VOC Team. When he was confronted with these facts, plaintiff-appellant Sesbreño further claimed that the items allegedly stolen
by Chuchie Garcia were part of the loot taken by defendants-appellees Constantino and Arcilla. Yet not once did plaintiff-
appellant Sesbreño or any of his witnesses mention that a conspiracy existed between these people. Clearly, much like his other
allegations, it is nothing more than an afterthought by plaintiff-appellant Sesbreño.

All in all, the allegations against defendants-appellees appear to be nothing more than a put-on to save face. For the simple truth
is that the inspection exposed plaintiff-appellant Sesbreño as a likely cheat and thief.

xxxx

Neither is this Court swayed by the testimonies of Baledio and Lopez. The lower court rightly described their testimonies as
1âw phi 1

fraught by discrepancies and inconsistencies on material points and even called Lopez a perjured witness. On the other hand, it
is odd that plaintiff-appellant Sesbreño chose not to present the witness whose testimony was very crucial. But even though
Chuchie Garcia never testified, her absence speaks volumes. Whereas plaintiff-appellant Sesbreño claimed that the VOC Team
forced her to sign two documents that made her appear to be his authorized agent or representative, the latter claimed
otherwise and that she also gave them permission to enter and search the house. The person most qualified to refute the VOC
Team’s claim is Chuchie Garcia herself. It is axiomatic that he who asserts a fact or claim must prove it. He cannot transfer that
burden to the person against whom he asserts such fact or claim. When certain evidence is suppressed, the presumption is that
it will adversely affect the cause of the party suppressing it, should it come to light. x x x 9
Upon denial of his motion for reconsideration,10 Sesbreño appealed.

Issue

Was Sesbreño entitled to recover damages for abuse of rights?

Ruling

The appeal has no merit.

Sesbreño’s main contention is that the inspection of his residence by the VOC team was an unreasonable search for being
carried out without a warrant and for being allegedly done with malice or bad faith.

Before dealing with the contention, we have to note that two distinct portions of Sesbreño’s residence were inspected by the
VOS team – the garage where the electric meter was installed, and the main premises where the four bedrooms, living rooms,
dining room and kitchen were located.

Anent the inspection of the garage where the meter was installed, the respondents assert that the VOC team had the continuing
authority from Sesbreño as the consumer to enter his premises at all reasonable hours to conduct an inspection of the meter
without being liable for trespass to dwelling. The authority emanated from paragraph 9 of the metered service contract entered
into between VECO and each of its consumers, which provided as follows:

9. The CONSUMER agrees to allow properly authorized employees or representatives of the COMPANY to enter his premises
at all reasonable hours without being liable to trespass to dwelling for the purpose of inspecting, installing, reading, removing,
testing, replacing or otherwise disposing of its property, and/or removing the COMPANY’S property in the event of the
termination of the contract for any cause.11

Sesbreño contends, however, that paragraph 9 did not give Constantino, Arcilla and Balicha the blanket authority to enter at will
because the only property VECO owned in his premises was the meter; hence, Constantino and Arcilla should enter only the
garage. He denies that they had the right to enter the main portion of the house and inspect the various rooms and the
appliances therein because those were not the properties of VECO. He posits that Balicha, who was not an employee of VECO,
had no authority whatsoever to enter his house and conduct a search. He concludes that their search was unreasonable, and
entitled him to damages in light of their admission that they had entered and inspected his premises without a search warrant.12

We do not accept Sesbreño’s conclusion. Paragraph 9 clothed the entire VOC team with unquestioned authority to enter the
1avvphi1

garage to inspect the meter. The members of the team obviously met the conditions imposed by paragraph 9 for an authorized
entry. Firstly, their entry had the objective of conducting the routine inspection of the meter. 13Secondly, the entry and inspection
were confined to the garage where the meter was installed.14 Thirdly, the entry was effected at around 4 o’clock p.m., a
reasonable hour.15 And, fourthly, the persons who inspected the meter were duly authorized for the purpose by VECO.

Although Balicha was not himself an employee of VECO,16 his participation was to render police assistance to ensure the
personal security of Constantino and Arcilla during the inspection, rendering him a necessary part of the team as an authorized
representative. Under the circumstances, he was authorized to enter considering that paragraph 9 expressly extended such
authority to "properly authorized employees or representatives" of VECO.

It is true, as Sesbreño urges, that paragraph 9 did not cover the entry into the main premises of the residence. Did this
necessarily mean that any entry by the VOS team into the main premises required a search warrant to be first secured?

Sesbreño insists so, citing Section 2, Article III of the 1987 Constitution, the clause guaranteeing the right of every individual
against unreasonable searches and seizures, viz:

Section 2. The right of the people to be secure in their persons, houses, papers and effects against unreasonable searches and
seizures of whatever nature and for any purpose shall be inviolable, and no search warrant or warrant of arrest shall issue
except upon probable cause to be determined personally by the judge after examination under oath or affirmation of the
complainant and the witnesses he may produce, and particularly describing the place to be searched and the persons or things
to be seized.

He states that a violation of this constitutional guaranty rendered VECO and its VOS team liable to him for damages by virtue of
Article 32 (9) of the Civil Code, which pertinently provides:
Article 32. Any public officer or employee, or any private individual, who directly or indirectly obstructs, defeats, violates or in any
manner impedes or impairs any of the following rights and liberties of another person shall be liable to the latter for damages:

xxxx

(9) The right to be secured in one’s person, house, papers, and effects against unreasonable searches and seizures;

x x x x.

Sesbreño’s insistence has no legal and factual basis.

The constitutional guaranty against unlawful searches and seizures is intended as a restraint against the Government and its
agents tasked with law enforcement. It is to be invoked only to ensure freedom from arbitrary and unreasonable exercise of
State power. The Court has made this clear in its pronouncements, including that made in People v. Marti, 17 viz:

If the search is made upon the request of law enforcers, a warrant must generally be first secured if it is to pass the test of
constitutionality. However, if the search is made at the behest or initiative of the proprietor of a private establishment for its own
and private purposes, as in the case at bar, and without the intervention of police authorities, the right against unreasonable
search and seizure cannot be invoked for only the act of private individual, not the law enforcers, is involved. In sum, the
protection against unreasonable searches and seizures cannot be extended to acts committed by private individuals so as to
bring it within the ambit of alleged unlawful intrusion by the government.18

It is worth noting that the VOC inspectors decided to enter the main premises only after finding the meter of Sesbreño turned
upside down, hanging and its disc not rotating. Their doing so would enable them to determine the unbilled electricity consumed
by his household. The circumstances justified their decision, and their inspection of the main premises was a continuation of the
authorized entry. There was no question then that their ability to determine the unbilled electricity called for them to see for
themselves the usage of electricity inside. Not being agents of the State, they did not have to first obtain a search warrant to do
so.

Balicha’s presence participation in the entry did not make the inspection a search by an agent of the State within the ambit of the
guaranty. As already mentioned, Balicha was part of the team by virtue of his mission order authorizing him to assist and escort
the team during its routine inspection.19 Consequently, the entry into the main premises of the house by the VOC team did not
constitute a violation of the guaranty.

Our holding could be different had Sesbreño persuasively demonstrated the intervention of malice or bad faith on the part of
Constantino and Arcilla during their inspection of the main premises, or any excessiveness committed by them in the course of
the inspection. But Sesbreño did not. On the other hand, the CA correctly observed that the inspection did not zero in on
Sesbreño’s residence because the other houses within the area were similarly subjected to the routine inspection. 20 This, we
think, eliminated any notion of malice or bad faith.

Clearly, Sesbreño did not establish his claim for damages if the respondents were not guilty of abuse of rights. To stress, the
concept of abuse of rights prescribes that a person should not use his right unjustly or in bad faith; otherwise, he may be liable to
another who suffers injury. The rationale for the concept is to present some basic principles to be followed for the rightful
relationship between human beings and the stability of social order.21Moreover, according to a commentator,22 "the exercise of
right ends when the right disappears, and it disappears when it is abused, especially to the prejudice of others[;] [i]t cannot be
said that a person exercises a right when he unnecessarily prejudices another." Article 19 of the Civil Code23 sets the standards
to be observed in the exercise of one’s rights and in the performance of one’s duties, namely: (a) to act with justice; (b) to give
everyone his due; and (c) to observe honesty and good faith. The law thereby recognizes the primordial limitation on all rights –
that in the exercise of the rights, the standards under Article 19 must be observed.24

Although the act is not illegal, liability for damages may arise should there be an abuse of rights, like when the act is performed
without prudence or in bad faith. In order that liability may attach under the concept of abuse of rights, the following elements
must be present, to wit: (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.25 There is no hard and fast rule that can be applied to ascertain whether or not the principle of
abuse of rights is to be invoked. The resolution of the issue depends on the circumstances of each case.

Sesbreño asserts that he did not authorize Baledio or Chuchie Garcia to let anyone enter his residence in his absence; and that
Baledio herself confirmed that the members of the VOC team had intimidated her into letting them in.

The assertion of Sesbreño is improper for consideration in this appeal. The RTC and the CA unanimously found the testimonies
1âwphi1

of Sesbreño’s witnesses implausible because of inconsistencies on material points; and even declared that the non-presentation
of Garcia as a witness was odd if not suspect. Considering that such findings related to the credibility of the witnesses and their
testimonies, the Court cannot review and undo them now because it is not a trier of facts, and is not also tasked to analyze or
weigh evidence all over again.26 Verily, a review that may tend to supplant the findings of the trial court that had the first-hand
opportunity to observe the demeanor of the witnesses themselves should be undertaken by the Court with prudent hesitation.
Only when Sesbreño could make a clear showing of abuse in their appreciation of the evidence and records by the trial and the
appellate courts should the Court do the unusual review of the factual findings of the trial and appellate courts. 27 Alas, that
showing was not made here.

Nor should the Court hold that Sesbreño was denied due process by the refusal of the trial judge to inhibit from the case.
Although the trial judge had issued an order for his voluntary inhibition, he still rendered the judgment in the end in compliance
with the instruction of the Executive Judge, whose exercise of her administrative authority on the matter of the inhibition should
be respected.28 In this connection, we find to be apt the following observation of the CA, to wit:

x x x. Both Judge Paredes and Judge Priscila Agana serve the Regional Trial Court and are therefore of co-equal rank. The
latter has no authority to reverse or modify the orders of Judge Paredes. But in ordering Judge Paredes to continue hearing the
case, Judge Agana did not violate their co-equal status or unilaterally increased her jurisdiction. It is merely part of her
administrative responsibilities as Executive Judge of the Regional Trial Court of Cebu City, of which Judge Paredes is also a
member.29

Lastly, the Court finds nothing wrong if the writer of the decision in the CA refused to inhibit from participating in the resolution of
the motion for reconsideration filed by Sesbrefio. The motion for her inhibition was grounded on suspicion of her bias and
prejudice,30 but suspicion of bias and prejudice were not enough grounds for inhibition.31

Suffice it to say that the records are bereft of any indication that even suggested that the Associate Justices of the CA who
participated in the promulgation of the decision were tainted with bias against him.

WHEREFORE, the Court DENIES the pet1t1on for review on certiorari; AFFIRMS the decision promulgated on March 10, 2003;
and DIRECTS the petitioner to pay the cost
Saladaga vs Astorga

LEONARDO-DE CASTRO, J.:

Membership in the legal profession is a high personal privilege burdened with conditions, 1 including continuing fidelity to the law
and constant possession of moral fitness. Lawyers, as guardians of the law, play a vital role in the preservation of society, and a
consequent obligation of lawyers is to maintain the highest standards of ethical conduct. 2 Failure to live by the standards of the
legal profession and to discharge the burden of the privilege conferred on one as a member of the bar warrant the suspension or
revocation of that privilege.

The Factual Antecedents

Complainant Florencio A. Saladaga and respondent Atty. Arturo B. Astorga entered into a "Deed of Sale with Right to
Repurchase" on December 2, 1981 where respondent sold (with rightof repurchase) to complainant a parcel of coconut land
located at Barangay Bunga, Baybay, Leyte covered by Transfer Certificate of Title (TCT) No. T-662 for ₱15,000.00. Under the
said deed, respondent represented that he has "the perfect right to dispose as owner in fee simple" the subject property and that
the said property is "free from all liens and encumbrances."3 The deed also provided that respondent, as vendor a retro, had two
years within which to repurchase the property, and if not repurchased within the said period, "the parties shall renew [the]
instrument/agreement."4

Respondent failed to exercise his right of repurchase within the period provided in the deed, and no renewal of the contract was
made even after complainant sent respondent a final demand dated May 10, 1984 for the latter to repurchase the property.
Complainant remained in peaceful possession of the property until December 1989 when he received letters from the Rural
Bank of Albuera (Leyte), Inc. (RBAI) informing him that the property was mortgaged by respondent to RBAI, that the bank had
subsequently foreclosed on the property, and that complainant should therefore vacate the property. 5

Complainant was alarmed and made aninvestigation. He learned the following:

(1) TCT No. T-662 was already cancelled by TCT No. T-3211 in the name of Philippine National Bank (PNB) as early as
November 17, 1972 after foreclosure proceedings;

(2) TCT No. T-3211 was cancelled by TCT No. T-7235 in the names of respondent and his wife on January 4, 1982
pursuant to a deed of sale dated March 27,1979 between PNB and respondent;

(3) Respondent mortgaged the subject property to RBAI on March 14, 1984, RBAI foreclosed on the property, and
subsequently obtained TCT No. TP-10635 on March 27, 1991.6 Complainant was subsequently dispossessed of the
property by RBAI.7

Aggrieved, complainant instituted a criminal complaint for estafa against respondent with the Office of the Provincial Prosecutor
of Leyte, docketed as I.S. No. 95-144. The Provincial Prosecutor of Leyte approved the Resolution8dated April 21, 1995 in I.S.
No. 95-144 finding that "[t]he facts of [the] case are sufficient to engender a well-founded belief that Estafa x x x has been
committed and that respondent herein is probably guilty thereof."9 Accordingly, an Information10 dated January 8,1996 was filed
before the Municipal Trial Court (MTC) of Baybay, Leyte, formally charging respondent with the crime of estafa under Article
316, paragraphs 1 and 2 of the Revised Penal Code,11committed as follows:

On March 14, 1984, accused representing himself as the owner of a parcel of land known as Lot No. 7661 of the Baybay
Cadastre, mortgaged the same to the Rural Bank of Albuera, Albuera, Leyte, within the jurisdiction of this Honorable Court,
knowing fully well that the possessor and owner at that time was private complainant Florencio Saladaga by virtue of a Pacto de
Retro Sale which accused executed in favor of private complainant on 2nd December, 1981, without first
redeeming/repurchasing the same. [P]rivate complainant knowing of accused[’s] unlawful act only on or about the last week of
February, 1991 when the rural bank dispossessed him of the property, the mortgage having been foreclosed, private
complainant thereby suffered damages and was prejudiced by accused[’s] unlawful transaction and misrepresentation.

The aforementioned estafa case against respondent was docketed as Criminal Case No. 3112-A.

Complainant likewise instituted the instant administrative cases against respondent by filing before this Court an Affidavit-
Complaint12 dated January 28, 1997 and Supplemental Complaint13 dated February 27, 1997, which were docketed as A.C. No.
4697 and A.C. No. 4728, respectively. In both complaints, complainant sought the disbarment of respondent.

The administrative cases were referred to the Integrated Bar of the Philippines (IBP) for investigation, report and
recommendation.14
In his Consolidated Answer15 dated August 16, 2003 filed before the IBP, respondent denied that his agreement with complainant
was a pacto de retrosale. He claimed that it was an equitable mortgage and that, if only complainant rendered an accounting of
his benefits from the produce of the land, the total amount would have exceeded ₱15,000.00.

Report and Recommendation of the Investigating Commissioner and Resolution of the IBP Board of Governors

In a Report and Recommendation16 dated April 29, 2005, the Investigating Commissioner of the IBP’s Commission on Bar
Discipline found that respondent was in bad faith when he dealt with complainant and executed the "Deed of Sale with Right to
Repurchase" but later on claimed that the agreement was one of equitable mortgage. Respondent was also guilty of deceit or
fraud when he represented in the "Deed of Sale with Right to Repurchase" dated December 2, 1981 that the property was
covered by TCT No. T-662, even giving complainant the owner’s copy of the said certificate of title, when the said TCT had
already been cancelled on November 17, 1972 by TCT No. T-3211 in the name of Philippine National Bank (PNB). Respondent
made matters even worse, when he had TCT No. T-3211 cancelled with the issuance of TCT No. T-7235 under his and his
wife’s name on January 4,1982 without informing complainant. This was compounded by respondent’s subsequent mortgage of
the property to RBAI, which led to the acquisition of the property by RBAI and the dispossession thereof of complainant. Thus,
the Investigating Commissioner recommended that respondent be (1) suspended from the practice of law for one year, with
warning that a similar misdeed in the future shall be dealt with more severity, and (2) ordered to return the sum of ₱15,000.00,
the amount he received as consideration for the pacto de retrosale, with interest at the legal rate.

Considering respondent’s "commission of unlawful acts, especially crimes involving moral turpitude, actsof dishonesty, grossly
immoral conduct and deceit," the IBP Board of Governors adopted and approved the Investigating Commissioner’s Report and
Recommendation with modification as follows: respondent is(1) suspended from the practice of law for two years, with warning
that a similar misdeed in the future shall be dealt with more severity, and (2) ordered to return the sum of ₱15,000.00 received in
consideration of the pacto de retrosale, with legal interest.17

The Court’s Ruling

The Court agrees with the recommendation of the IBP Board of Governors to suspend respondent from the practice of law for
two years, but it refrains from ordering respondent to return the ₱15,000.00 consideration, plus interest.

Respondent does not deny executing the "Deed of Sale with Right to Repurchase" dated December 2, 1981 in favor of
complainant. However, respondent insists that the deed is not one of sale with pacto de retro, but one of equitable mortgage.
Thus, respondent argues that he still had the legal right to mortgage the subject property to other persons. Respondent
additionally asserts that complainant should render an accounting of the produce the latter had collected from the said property,
which would already exceed the ₱15,000.00 consideration stated in the deed.

There is no merit in respondent’s defense.

Regardless of whether the written contract between respondent and complainant is actually one of sale with pacto de retroor of
equitable mortgage, respondent’s actuations in his transaction with complainant, as well as in the present administrative cases,
clearly show a disregard for the highest standards of legal proficiency, morality, honesty, integrity, and fair dealing required from
lawyers, for which respondent should be held administratively liable.

When respondent was admitted to the legal profession, he took an oath where he undertook to "obey the laws," "do no
falsehood," and "conduct [him]self as a lawyer according to the best of [his] knowledge and discretion." 18 He gravely violated his
oath.

The Investigating Commissioner correctly found, and the IBP Board of Governors rightly agreed, that respondent caused the
ambiguity or vagueness in the "Deed of Sale with Right to Repurchase" as he was the one who prepared or drafted the said
instrument. Respondent could have simply denominated the instrument as a deed of mortgage and referred to himself and
complainant as "mortgagor" and "mortgagee," respectively, rather than as "vendor a retro" and "vendee a retro." If only
respondent had been more circumspect and careful in the drafting and preparation of the deed, then the controversy between
him and complainant could havebeen avoided or, at the very least, easily resolved. His imprecise and misleading wording of the
said deed on its face betrayed lack oflegal competence on his part. He thereby fell short of his oath to "conduct [him]self as a
lawyer according to the best of [his] knowledge and discretion."

More significantly, respondent transgressed the laws and the fundamental tenet of human relations asembodied in Article 19 of
the Civil Code:

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.
Respondent, as owner of the property, had the right to mortgage it to complainant but, as a lawyer, he should have seen to it
that his agreement with complainant is embodied in an instrument that clearly expresses the intent of the contracting parties. A
lawyer who drafts a contract must see to it that the agreement faithfully and clearly reflects the intention of the contracting
parties. Otherwise, the respective rights and obligations of the contracting parties will be uncertain, which opens the door to legal
disputes between the said parties. Indeed, the uncertainty caused by respondent’s poor formulation of the "Deed of Sale with
Right to Repurchase" was a significant factor in the legal controversy between respondent and complainant. Such poor
formulation reflects at the very least negatively on the legal competence of respondent.

Under Section 63 of the Land Registration Act,19 the law in effect at the time the PNB acquired the subject property and obtained
TCT No. T-3211 in its name in 1972, where a decree in favor of a purchaser who acquires mortgaged property in foreclosure
proceedings becomes final, such purchaser becomes entitled to the issuance of a new certificate of title in his name and a
memorandum thereof shall be "indorsed upon the mortgagor’s original certificate."20 TCT No. T-662, which respondent gave
complainant when they entered into the "Deed of Sale with Right to Repurchase" dated December 2, 1981, does not bearsuch
memorandum but only a memorandum on the mortgage of the property to PNB in 1963 and the subsequent amendment of the
mortgage.

Respondent dealt with complainant with bad faith, falsehood, and deceit when he entered into the "Deed of Sale with Right to
Repurchase" dated December 2, 1981 with the latter. He made it appear that the property was covered by TCT No. T-662 under
his name, even giving complainant the owner’s copy of the said certificate oftitle, when the truth is that the said TCT had already
been cancelled some nine years earlier by TCT No. T-3211 in the name of PNB. He did not evencare to correct the wrong
statement in the deed when he was subsequently issued a new copy of TCT No. T-7235 on January 4, 1982,21 or barely a month
after the execution of the said deed. All told, respondent clearly committed an act of gross dishonesty and deceit against
complainant.

Canon 1 and Rule 1.01 of the Codeof Professional Responsibility provide:

CANON 1 – A lawyer shall uphold the constitution, obey the laws of the land and promote respect for law and legal processes.

Rule 1.01 – A lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct. Under Canon 1, a lawyer is not only
mandated to personally obey the laws and the legal processes, he is moreover expected to inspire respect and obedience
thereto. On the other hand, Rule 1.01 states the norm of conduct that is expected of all lawyers. 22

Any act or omission that is contrary to, prohibited or unauthorized by, in defiance of, disobedient to, or disregards the law is
"unlawful." "Unlawful" conduct does not necessarily imply the element of criminality although the concept is broad enough to
include such element.23

To be "dishonest" means the disposition to lie, cheat, deceive, defraud or betray; be untrustworthy; lacking inintegrity, honesty,
probity, integrity in principle, fairness and straightforwardness. On the other hand, conduct that is "deceitful" means as follows:

[Having] the proclivity for fraudulent and deceptive misrepresentation, artifice or device that is used upon another who is ignorant
of the true facts, to the prejudice and damage of the party imposed upon. In order to be deceitful, the person must either have
knowledge of the falsity or acted in reckless and conscious ignorance thereof, especially if the parties are not on equal terms,
and was done with the intent that the aggrieved party act thereon, and the latter indeed acted in reliance of the false statement
or deed in the manner contemplated to his injury.24 The actions of respondent in connection with the execution of the "Deed of
Sale with Right to Repurchase" clearly fall within the concept of unlawful, dishonest, and deceitful conduct. They violate Article
19 of the Civil Code. They show a disregard for Section 63 of the Land Registration Act. They also reflect bad faith, dishonesty,
and deceit on respondent’s part. Thus, respondent deserves to be sanctioned.

Respondent’s breach of his oath, violation of the laws, lack of good faith, and dishonesty are compounded by his gross
disregard of this Court’s directives, as well as the orders of the IBP’s Investigating Commissioner (who was acting as an agent of
this Court pursuant to the Court’s referral of these cases to the IBP for investigation, report and recommendation), which caused
delay in the resolution of these administrative cases.

In particular, the Court required respondent to comment on complainant’s Affidavit-Complaint in A.C. No. 4697 and
Supplemental Complaint in A.C. No. 4728 on March 12, 1997 and June 25, 1997, respectively.25 While he requested for several
extensions of time within which to submit his comment, no such comment was submitted prompting the Court to require him in a
Resolution dated February 4,1998 to (1) show cause why he should not be disciplinarily dealt with or held in contempt for such
failure, and (2) submit the consolidated comment.26 Respondent neither showed cause why he should not be disciplinarily dealt
with or held in contempt for such failure, nor submitted the consolidated comment.

When these cases were referred to the IBP and during the proceedings before the IBP’s Investigating Commissioner,
respondent was again required several times to submit his consolidated answer. He only complied on August 28, 2003, or more
than six years after this Court originally required him to do so. The Investigating Commissioner also directed the parties to
submit their respective position papers. Despite having been given several opportunities to submit the same, respondent did not
file any position paper.27

Respondent’s disregard of the directives of this Court and of the Investigating Commissioner, which caused undue delay in
these administrative cases, contravenes the following provisions of the Code of Professional Responsibility:

CANON 11 – A lawyer shall observe and maintain the respect due to the courts and to judicial officers and should insist on
similar conduct by others.

xxxx

CANON 12 – A lawyer shall exert every effort and consider it his duty to assist in the speedy and efficient administration of
justice.

xxxx

Rule 12.03 – A lawyer shall not, after obtaining extensions of time to file pleadings, memoranda or briefs, let the period lapse
without submitting the same or offering an explanation for his failure to do so.

Rule 12.04 – A lawyer shall not unduly delay a case, impede the execution of a judgment or misuse court processes.

Respondent’s infractions are aggravated by the fact that he has already been imposed a disciplinary sanction before. In Nuñez 1âwphi1

v. Atty. Astorga,28 respondent was held liable for conduct unbecoming an attorney for which he was fined ₱2,000.00.

Given the foregoing, the suspension of respondent from the practice of law for two years, as recommended by the IBP Board of
Governors, is proper.

The Court, however, will not adopt the recommendation of the IBP to order respondent to return the sum of ₱15,000.00 he
received from complainant under the "Deed of Sale with Right to Repurchase." This is a civil liability best determined and
awarded in a civil case rather than the present administrative cases.

In Roa v. Moreno,29 the Court pronounced that "[i]n disciplinary proceedings against lawyers, the only issue is whether the officer
of the court is still fit to be allowed to continue as a member of the Bar. Our only concern is the determination of respondent’s
administrative liability. Our findings have no material bearing on other judicial action which the parties may choose to file against
each other."While the respondent lawyer’s wrongful actuations may give rise at the same time to criminal, civil, and
administrative liabilities, each must be determined in the appropriate case; and every case must be resolved in accordance with
the facts and the law applicable and the quantum of proof required in each. Section 5,30 in relation to Sections 131 and 2,32 Rule
133 of the Rules of Court states that in administrative cases, such as the ones atbar, only substantial evidence is required, not
proof beyond reasonable doubt as in criminal cases, or preponderance of evidence asin civil cases. Substantial evidence is that
amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion. 33

The Court notes that based on the same factual antecedents as the present administrative cases, complainant instituted a
criminal case for estafa against respondent, docketed as Criminal Case No. 3112-A, before the MTC. 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.34 Unless the complainant waived the civil action, reserved the right to institute it separately, or
instituted the civil action prior to the criminal action, then his civil action for the recovery of civil liability arising from the estafa
committed by respondent is deemed instituted with Criminal Case No. 3112-A. The civil liability that complainant may recover in
Criminal Case No. 3112-A includes restitution; reparation of the damage caused him; and/or indemnification for consequential
damages,35which may already cover the ₱15,000.00 consideration complainant had paid for the subject property.

WHEREFORE, respondent is hereby found GUILTY of the following: breach of the Lawyer’s Oath; unlawful, dishonest, and
deceitful conduct; and disrespect for the Court and causing undue delay of these cases, for which he is SUSPENDED from the
practice of law for a period of two (2) years, reckoned from receipt of this Decision, with WARNING that a similar misconduct in
the future shall be dealt with more severely.

Let a copy of this Decision be furnished the Office of the Bar Confidant and the Integrated Bar of the Philippines for their
information and guidance. The Court Administrator is directed to circulate this Decision to all courts in the country.

SO ORDERED.
Coca cola vs

This is a Petition for Review1 filed by Coca-Cola Bottlers Philippines, Inc. (petitioner), from the Court of Appeals (CA) Decision2 and
Resolution3 in CA-GR. CV No. 91096. The CA affirmed in toto the Decision4 of Regional Trial Court (RTC) Branch 88 in Quezon City in Civil
Case No. Q-00-42320.

This case originated from the claim for damages filed by respondent spouses Jose and Lilibeth Bernardo (respondents) against petitioner for
violation of Articles 19, 20, 21, and 28 of the Civil Code. The RTC found petitioner liable to pay respondents temperate damages in the
amount of P500,000 for loss of goodwill, to be offset against the latter's outstanding balance for deliveries in the amount of P449,154. The
trial court ordered petitioner to pay P50,000 as moral damages, P20,000 as exemplary damages, and P100,000 as attorney's fees.

Petitioner asserts that the Complaint had no basis, and that the trial court had no jurisdiction to award temperate damages in an amount
equivalent to the outstanding obligation of respondents. It prays not only for the reversal of the assailed judgments, but also for an award of
moral and exemplary damages, as well as attorney's fees and litigation expenses. It also asks that respondents be ordered to pay P449,154
plus legal interest from the date of demand until full payment. 5

We deny the Petition. chanroblesvi rtua llawli bra ry

FACTS

Petitioner is a domestic corporation engaged in the large-scale manufacture, sale, and distribution of beverages around the country.
6 On the
other hand, respondents, doing business under the name "Jolly Beverage Enterprises," are wholesalers of softdrinks in Quezon City,
particularly in the vicinities of Bulacan Street, V. Luna Road, Katipunan Avenue, and Timog Avenue.
7

The business relationship between the parties commenced in 1987 when petitioner designated respondents as its distributor.
8 On 22 March
9
1994, the parties formally entered into an exclusive dealership contract for three years. Under the Agreement,
10
petitioner would extend
developmental assistance to respondents in the form of cash assistance and trade discount incentives. For their part, respondents undertook
to sell petitioner's products exclusively, meet the sales quota of 7,000 cases per month, and assist petitioner in its marketing efforts.
11

On 1 March 1997, the parties executed a similar agreement tor another two years, or until 28 February 1999.
12
This time, petitioner gave
respondents complimentary cases of its products instead of cash assistance, and increased the latter's sales quota to 8,000 cases per month.

For 13 years, the parties enjoyed a good and harmonious business partnership.
13 While the contracts contained a clause for breach, it was

never enforced.
14

Sometime in late 1998 or early 1999, before the contract expired, petitioner required respondents to submit a list of their customers on the
pretext that it would formulate a policy defining its territorial dealership in Quezon City.
15 It assured respondents that their contract would be

renewed for a longer period, provided that they would submit the list.
16 However, despite their compliance, the promise did not

materialize.
17

Respondents discovered that in February 1999, petitioner started to reach out to the persons whose names were on the list.
18
Respondents
also received reports that their delivery trucks were being trailed by petitioner's agents; and that as soon as the trucks left, the latter would
approach the former's customers.
19 Further, respondents found out that petitioner had employed a different pricing scheme, such that the

price given to distributors was significantly higher than that given to supermarkets.
20 It also enticed direct buyers and sari-sari store owners

in the area with its "Coke Alok" promo, in which it gave away one free bottle for every case purchased.
21 It further engaged a store adjacent

to respondents' warehouse to sell the former's products at a substantially lower price.


22

Respondents claimed that because of these schemes, they lost not only their major customers - such as Peach Blossoms, May Flower
Restaurant, Saisaki Restaurant, and Kim Hong Restaurant but also small stores, such as the canteen in the hospital where respondent Jose
Bernardo worked.
23 They admitted that they were unable to pay deliveries worth P449,154.24

Respondents filed a Complaint


25 for damages, alleging that the acts of petitioner constituted dishonesty, bad faith, gross negligence, fraud,

and unfair competition in commercial enterprise.


26 The Complaint was later amended27 to implead petitioner's officers and personnel,
include additional factual allegations, and increase the amount of damages prayed for.

28 It maintained that it had obtained a list of clients through surveys, and that promotional activities or
Petitioner denied the allegations.
developmental strategies were implemented only after the expiration of the Agreements.
29 It opined that the filing of the complaint was a

mere ploy resorted to by respondents to evade the payment of the deliveries.


30

The RTC held petitioner liable for damages for abuse of rights in violation of Articles 19, 20, and 21 of the Civil Code and for unfair
competition under Article 28. It found that petitioner's agents solicited the list of clients in order to penetrate the market and directly supply
31 Moreover, the trial court found that petitioner had recklessly ignored the rights of respondents to have a fair
customers with its products.
chance to engage in business or earn a living when it deliberately used oppressive methods to deprive them of their business.
32 Its officers
were, however, absolved of liability, as there was no showing that they had acted in their individual and personal capacities.
33

In the body of its Decision, the RTC stated that petitioner should pay respondents P500,000 as temperate damages, and that it was only just
and fair that the latter offset this amount against their outstanding obligation to petitioner in the amount of P449,154.
34 In the fallo, the trial

court awarded P50,000 as moral damages, P20,000 as exemplary damages, and P100,000 as attorney's fees.
35 It denied petitioner's

counterclaim for damages for lack of factual and legal basis.


36 Petitioner moved for reconsideration, but the motion was denied.37

Petitioner then elevated the case to the CA, which affirmed the RTC Decision in toto. According to the appellate court's ruling, petitioner had
used its sizable resources to railroad the business of respondents:
38 chanroblesvi rtua llawli bra ry

[Petitioner] infiltrated certain areas in Quezon City at the expense of and later, in derogation of its wholesalers, particularly [respondents]. As
admitted by Allan Mercado, the Integrated Selling and Marketing Manager of appellant, it was previously dependent on wholesalers to
circulate its products around the country. x x x.

x x x x

[T]owards the end of the partnership, appellant employed a different marketing scheme purportedly to obviate the poor dealership
management from wholesalers in major areas. But as may be shown by the incidents leading to the filing of this case, this method was
designed strategically to overrun [respondents'] business and take over the customers of its wholesalers.

x x x x

One such method was "different pricing schemes" wherein the prices given to supermarkets and grocery stores were considerably lower than
those imposed on wholesalers. No prior advice thereof was given to [respondents] or any of the wholesalers. In fact, they only knew of it
when their customers began complaining about the variation in prices of softdrinks sold in supermarkets and those that were sold by them.
When in fact [respondent] Bernardo personally inspected the products in grocery stores, he discovered that a box of Coke-in-can is sold at
P40.00, lower than those offered by them as wholesalers.

About the same time, [petitioner] also implemented the "Area Market Cooperatives" (AMC) and the "Coke-Alok" promo. Under the AMC,
customers of wholesalers can purchase [petitioner's] products from prominent stores in heavily crowded areas for P76.00 per case, as
opposed to [respondent's] offering of P112.00. In "Coke-Alok," [petitioner] directly sold Coke products to wholesale customers with incentives
as free bottle of Coke for every case of softdrinks purchased. Being of limited resources, [respondents had no] means to equal the lucrative
incentives given by [petitioner] to their customers.

x x x x

Apart from direct selling and other promotions, [petitioner] also employed high-handed means that further shrunk [respondents'] market
coverage. In one instance, [petitioner's sales representative] advised [respondents] and other wholesalers to keep away from major
thoroughfares. Apparently, [petitioner] was going to supply their products to these stores themselves. x x x.

x x x x

x x x Furthermore, one of [petitioner's] representatives, Nelson Pabulayan, admitted that he sold products at the canteen in V. Luna Hospital
[which was then being serviced by respondents].

As if that was not enough, petitioner engaged other stores, such as Freezel's Bakeshop that was located adjacent to [respondent's]
warehouse, to sell Coke products at a price substantially lower than [that offered by respondents].
ISSUES

Petitioner argues that the trial court had no jurisdiction to award temperate damages that were not prayed for in the Complaint. It further
asserts that it did not violate Articles 19, 20, 21 or 28; hence, the award of damages and attorney's fees was improper. chanroble svirtual lawlib rary

OUR RULING

The CA did not err in affirming the finding that petitioner was liable for temperate, moral and exemplary damages, as well as attorney's fees,
tor abuse of rights and unfair competition.

The Petition raises questions of fact.

Petitioner ignores the nature of a petition for review as a remedy against errors of law. Instead, it raises factual matters that have already
been passed upon by the RTC and the CA.

It insists on the following facts: 1) the "promotional activities" were implemented after the dealership agreements expired;
39 2) the

"developmental strategies" were implemented nationwide and were not meant to destroy the business of respondents;
40 3) its agents did not
41 4) the price difference resulted because respondents could no longer avail of trade discounts and
follow the trucks of Jolly Beverages;
incentives under the expired Agreement;
42 and 5) there is no causal connection between the promotional activities and the claimed losses of

respondents.
43

Petitioner contends that since it did not assign any exclusive territory to respondents, the latter had no exclusive right to any customer. It
44
supposedly decided to rely on its own sales personnel to push the sale of its products, because the distributors had violated the terms of their
agreements by selling competing products, failing to meet the required sales volume, or failing to pay on time.
45 Petitioner, however, did not
allege that respondents committed any of these actions during the existence of the agreement.

We have repeatedly held that factual findings of the trial court, especially when affirmed by the appellate court, are given great weight, even
46
finality, by this Court. Petitioner fails to make a convincing argument that this case falls under any of the exceptions to the rule. On the
contrary, the Decisions of the RTC and theCA appear to be supported by the records.

Petitioner bewails the fact that the RTC and the CA, in establishing the facts, relied heavily on the testimony of respondent Jose Bernardo.
47

Petitioner, however, forgets that trial courts are in an ideal position to observe the demeanor of the witnesses and can therefore discern if the
48
latter are telling the truth or not. In this case, both the trial and the appellate courts found the testimonies of respondent Jose Bernardo
and his witnesses more credible than those of the witnesses presented by petitioners. We shall not substitute our judgment for that of the
trial court, absent any compelling reason.

Petitioner is liable for damages for abuse of rights and unfair competition under the Civil Code.

Both the RTC and the CA found that petitioner had employed oppressive and high-handed schemes to unjustly limit the market coverage and
diminish the investment returns of respondents.
49 The CA summarized its findings as follows:50 chanroble svirtual lawlib rary

This [cut-throat competition] is precisely what appellant did in order to take over the market: directly sell its products to or deal them off to
competing stores at a price substantially lower than those imposed on its wholesalers. As a result, the wholesalers suffered losses, and in
[respondents'] case, laid ofT a number of employees and alienated the patronage of its major customers including small-scale stores.
It must be emphasized that petitioner is not only a beverage giant, but also the manufacturer of the products; hence, it sets the price. In
addition, it took advantage of the infonnation provided by respondents to facilitate its takeover of the latter's usual business area. Distributors
like respondents, who had assisted petitioner in its marketing efforts, suddenly found themselves with fewer customers. Other distributors
51
were left with no choice but to fold.

Articles 19, 20, and 21 of the Civil Code provide the legal bedrock for the award of damages to a party who suffers damage whenever another
person commits an act in violation of some legal provision; or an act which, though not con'itituting a transgression of positive law,
nevertheless violates certain rudimentary rights of the party aggrieved.
52 The provisions read: chanRoblesvi rtua lLawl ibra ry

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.

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

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.
53 this Court held that under any of the above provisions of law, an act that causes injury to another
In Albenson Enterprises Corp. v. CA,
may be made the basis for an award of damages. As explained by this Court in GF Equity, Inc. v. Valenzona:
54 chanroblesvi rtua llawli bra ry

The exercise of a right ends when the right disappears; and it disappears when it is abused, especially to the prejudice of others. The mask of
a right without the spirit of justice which gives it life is repugnant to the modern concept of social law. It cannot be said that a person
exercises a right when he unnecessarily prejudices another or offends morals or good customs. Over and above the specific precepts of
positive law are the supreme norms of justice which the law develops and which are expressed in three principles: honeste vivere, alterum
non laedere and jus suum quique tribuere; and he who violates them violates the law. For this reason, it is not permissible to abuse our rights
to prejudice others.
Meanwhile, the use of unjust, oppressive, or high-handed business methods resulting in unfair competition also gives a right of action to the
injured party. Article 28 of the Civil Code provides:
chanRoblesvirtual Lawlib rary

Art. 28. Unfair competition in agricultural, commercial or industrial enterprises or in labor through the use of force, intimidation, deceit,
machination or any other unjust, oppressive or highhanded method shall give rise to a right of action by the person who thereby sutlers
damage.
Petitioner cites Tolentino, who in turn cited Colin and Capitant. According to the latter, the act of "a merchant [who] puts up a store near the
store of another and in this way attracts some of the latter's patrons" is not an abuse of a right. The scenario in the present case is vastly
55
different: the merchant was also the producer who, with the use of a list provided by its distributor, knocked on the doors of the latter's
customers and offered the products at a substantially lower price. Unsatisfied, the merchant even sold its products at a preferential rate to
another store within the vicinity. Jurisprudence holds that when a person starts an opposing place of business, not for the sake of profit, but
regardless of Joss and for the sole purpose of driving a competitor out of business, in order to take advantage of the effects of a malevolent
purpose, that person is guilty of a wanton wrong.
56

Temperate, moral, and exemplary damages, as well as attorney's fees, were properly awarded.

Petitioner argues that the trial court did not have jurisdiction to grant an award of temperate damages, because respondents did
not specifically pray for it in their Amended Complaint: chanRoblesvirt ual Lawlib rary

WHEREFORE, premises considered, it is most respectfully prayed that the Honorable Court render a judgment directing defendants to:

1. Pay plaintiffs the amount of P1,000,000.00 representing loss of goodwill nurtured over the past 13 years as actual damages.
2. Pay plaintiffs the amount of P200,000 representing moral damages.

3. Pay plaintiffs the amount of P100,000 representing exemplary damages.

4. Pay plaintiffs the amount of P100,000 representing attorney's fees.

Other reliefs which are just and equitable under the premises are also prayed for.
Petitioner's argument is flimsy and unsupported even by the cases it has cited.
57
The CA correctly ruled that the award of temperate
damages was justified, even if it was not specifically prayed for, because 1) respondents did pray for the grant of "other reliefs," and 2) the
award was clearly warranted under the circumstances. Indeed, the law permits judges to award a different kind of damages as an alternative
to actual damages: chanRoblesvi rtua lLawl ibra ry

Civil Code, Art. 2224. Temperate or moderate damages, which are more than nominal but less than compensatory damages, may be
recovered when the court finds that some pecuniary loss has been suffered but its amount can not, from the nature of the case, be
provided with certainty. (Emphasis supplied)

Compensatory damages may be awarded in the concept of temperate damages for injury to business reputation or business standing, loss of
goodwill, and loss of customers who shifted their patronage to competitors.
58

It is not extraordinary for courts to award temperate damages in lieu of actual damages. In Canada v. All Commodities Marketing
59 this Court awarded temperate damages in recognition of the pecuniary loss suffered, after finding that actual damages could
Corporation,
not be awarded for lack of proof. In Public Estates Authority v. Chu,
60 this Court held that temperate damages should have been awarded by
the trial court considering that the plaintiff therein had suffered some pecuniary loss.

In this case, both the RTC and the CA found that respondents had similarly suffered pecuniary loss by reason of petitioner's high-handed
machinations to eliminate competition in the market.
61

We see no grave error on the part of the RTC when it ruled that the unpaid obligation of respondents shall be offset against the temperate
damages due them from petitioner.
62 However, the trial court was not accurate in considering the P500,000 temperate damages as adequate

to completely extinguish the obligation of respondents to petitioner.


63 We note that while the principal was P449,154, this amount earned
legal interest from the time of demand. Nonetheless, in view of the established fact that respondents incurred the losses after their business
was systematically crippled by petitioner, it is only proper and just that the obligation, as well as the legal interest that has accrued, be
deemed totally compensated by the temperate damages. Therefore, respondents do not need to tender the amount of P449,154 plus legal
interest to petitioner, while the latter does not have to tender any amount as temperate damages to the former.

With regard to moral damages, petitioner argues that respondents failed to provide satisfactory proof that the latter had undergone any
suffering or injury.
64
This is a factual question that has been resolved by the trial court in a Decision affirmed by the CA. The award finds
legal basis under Article 2219(10) of the Civil Code, which states that moral damages may be recovered in acts and actions referred to in
Articles 21 and 28.
65

Petitioner likewise questions the award of exemplary damages without "competent proof."
66
It cites Spouses Villafuerte v. CA
67
as basis for
arguing that the CA should have based its Decision regarding the fact and the amount of exemplary damages upon competent proof that
respondents have suffered injury and upon evidence of the actual amount thereof. We enjoin petitioner's counsel to fully and carefully read
the text of our decisions before citing them as authority.
68
The excerpt lifted pertains to compensatory damages, not exemplary damages.
We remind counsel that exemplary damages are awarded under Article 2229 of the Civil Code by way of example or correction for the public
good. The determination of the amount is left to the discretion of the judge; its proof is not incumbent upon the claimant.

There being no meritorious argument raised by petitioner, the award of exemplary damages must be sustained to caution powerful business
owners against the use of oppressive and high-handed commercial strategies to target and trample on the rights of small business owners,
who are striving to make a decent living.

Exemplary damages having been awarded, the grant of attorney's fees was therefore warranted.
69

Petitioner's counterclaims for moral and exemplary damages, as well as attorney's fees and litigation expenses, were properly
denied.

The counterclaim for the payment of P449,154 plus legal interet was effectively granted when the trial court offset the temperate damages
awarded to respondents against the outstanding obligation of the latter to petitioner.

The counterclaims for moral and exemplary damages, as well as attorney's fees and litigation expenses, had no basis and were properly
denied. The fact that petitioner was compelled to engage the services of counsel in order to defend itself against the suit of respondents did
not entitle it to attorney's fees.

According to petitioner, it is entitled to moral damages, because "respondents clearly acted in a vexatious manner when they instituted this
suit."
70 We see nothing in the record to sustain this argument.

With respect to the prayer for exemplary damages, neither do we find any act of respondents that has to be deterred.
WHEREFORE, the Petition is DENIED. The Decision dated 23 July 2009 and Resolution dated 19 November 2009 rendered by the Court of
Appeals in CA-G.R. CV No. 91096, which affirmed in toto the Decision dated 28 September 2007 issued by Regional Trial Court Branch 88
Quezon City in Civil Case No. Q-00-42320, are hereby AFFIRMED with MODIFICATION in that the damages awarded shall earn legal
interest of 6% per annum from the date of finality of this Decision until its full satisfaction. The total compensation of respondents' unpaid
obligation, including legal interest that has accrued, and the temperate damages awarded to them, is hereby upheld.

SO ORDER
s of suit.

SO ORDERED.

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