Republic of the Philippines

SUPREME COURT
Manila

G.R. No. L-63915 December 29, 1986

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

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

RESOLUTION

CRUZ, J.:

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

WHEREFORE, the Court hereby orders respondents to publish in the Official Gazette all unpublished presidential
issuances which are of general application, and unless so published, they shall have no binding force and effect.

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

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

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

3. What is meant by "publication"?

4. Where is the publication to be made?

5. When is the publication to be made?

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

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

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

ART. 2. Laws shall take effect after fifteen days following the completion of their publication in the Official Gazette,
unless it is otherwise provided. This Code shall take effect one year after such publication.
After a careful study of this provision and of the arguments of the parties, both on the original petition and on the instant motion,
we have come to the conclusion and so hold, that the clause "unless it is otherwise provided" refers to the date of effectivity and
not to the requirement of publication itself, which cannot in any event be omitted. This clause does not mean that the legislature
may make the law effective immediately upon approval, or on any other date, without its previous publication.

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

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

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

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

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

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

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

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

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

We agree that publication must be in full or it is no publication at all since its purpose is to inform the public of the contents of the
laws. As correctly pointed out by the petitioners, the mere mention of the number of the presidential decree, the title of such
decree, its whereabouts (e.g., "with Secretary Tuvera"), the supposed date of effectivity, and in a mere supplement of the Official
Gazette cannot satisfy the publication requirement. This is not even substantial compliance. This was the manner, incidentally, in
which the General Appropriations Act for FY 1975, a presidential decree undeniably of general applicability and interest, was
"published" by the Marcos administration. 7 The evident purpose was to withhold rather than disclose information on this vital
law.

Coming now to the original decision, it is true that only four justices were categorically for publication in the Official Gazette 8 and
that six others felt that publication could be made elsewhere as long as the people were sufficiently informed. 9 One reserved his
vote 10 and another merely acknowledged the need for due publication without indicating where it should be made. 11 It is
therefore necessary for the present membership of this Court to arrive at a clear consensus on this matter and to lay down a
binding decision supported by the necessary vote.

There is much to be said of the view that the publication need not be made in the Official Gazette, considering its erratic
releases and limited readership. Undoubtedly, newspapers of general circulation could better perform the function of
communicating, the laws to the people as such periodicals are more easily available, have a wider readership, and come out
regularly. The trouble, though, is that this kind of publication is not the one required or authorized by existing law. As far as we
know, no amendment has been made of Article 2 of the Civil Code. The Solicitor General has not pointed to such a law, and we
have no information that it exists. If it does, it obviously has not yet been published.

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

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

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

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

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

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

WHEREFORE, it is hereby declared that all laws as above defined shall immediately upon their approval, or as soon thereafter
as possible, be published in full in the Official Gazette, to become effective only after fifteen days from their publication, or on
another date specified by the legislature, in accordance with Article 2 of the Civil Code.

SO ORDERED.

Teehankee, C.J., Feria, Yap, Narvasa, Melencio-Herrera, Alampay, Gutierrez, Jr., and Paras, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. L-65425 November 5, 1987

IRENEO LEAL, JOSE LEAL, CATALINA LEAL, BERNABELA LEAL, VICENTE LEAL EUIOGIA LEAL PATERNO RAMOS,
MACARIO DEL ROSARIO, MARGARITA ALBERTO, VICTORIA TORRES, JUSTINA MANUEL, JULIAN MANUEL, MELANIA
SANTOS, CLEMENTE SAMARIO, MARIKINA VALLEY, INC., MIGUELA MENDOZA, and REGISTER OF DEEDS OF
RIZAL, petitioners,
vs.
THE HONORABLE INTERMEDIATE APPELLATE COURT (4th Civil Cases Division), and VICENTE SANTIAGO
(Substituted by SALUD M. SANTIAGO), respondents.

SARMIENTO, J.:

In its resolution dated September 27, 1983, the respondent Intermediate Appellate Court, 1 speaking through Justice Porfirio V,
Sison, ordered, in part, the petitioners to accept the sum of P5,600.00 from the private respondent as repurchase price of the
lots described in the "Compraventa" and, thereafter, to execute a Deed of Repurchase to effect transfer over ownership over the
same properties to the private respondent.

This ruling was a complete reversal of the earlier decision, 2 dated June 28, 1.978, penned by Justice Paras, of the Court of
Appeals, in the same case, affirming the trial court's dismissal of the private respondent's complaint.

The petitioners, feeling aggrieved and astonished by the complete turnaround of the respondent court, come to Us with this
petition for review by certiorari.

The antecedent facts are undisputed.

This case brings us back almost half a century ago, on March 21, 1941, when a document entitled "Compraventa," written
entirely in the Spanish language, involving three parcels of land, was executed by the private respondent's predecessors-in-
interest, Vicente Santiago and his brother, Luis Santiago, in favor of Cirilio Leal the deceased father of some of the petitioners,
Pursuant to this "Compraventa," the title over the three parcels of land in the name of the vendors was cancelled and a new one
was issued in the name of Cirilo Leal who immediately took possession and exercised ownership over the said lands. When
Cirilo died on December 10, 1959, the subject lands were inherited by his six children, who are among the petitioners, and who
caused the consolidation and subdivision of the properties among themselves.

Between the years 1960 and 1965, the properties were either mortgaged or leased by the petitioners-children of Cirilo Leal — to
their co-petitioners.

Sometime before the agricultural year 1966-1967, Vicente Santiago approached the petitioners and offered re- repurchase the
subject properties. Petitioners, however, refused the offer. Consequently, Vicente Santiago instituted a complaint for specific
performance before the then Court of First Instance of Quezon City on August 2, 1967.

All the trial, the court a quo rendered its decision,-dismissing the complaint on the ground that the same was still premature
considering that there was, as yet, no sale nor any alienation equivalent to a sale. Not satisfied with this decision, the private
respondent appealed to the Court of Appeals and the latter, acting through the Fourth Division and with Justice Edgardo Paras
as ponente affirmed the decision of the court a quo.

The petitioners seasonably filed a motion to amend the dispositive portion of the decision so as to include an order for the
cancellation of the annotations at the back of the Transfer certificates of Title issued in their favor. The private respondent,-on
the other hand, filed a-timely motion for reconsideration of the above decision and an opposition to petitioners' motion to amend.
These incidents were not resolved until then Court of Appeals was abolished and in lieu of which the Intermideate Appellate
Court was established In view of the said reorganization, case was reassigned to the Fourth Civil in this cases Division.

Resolving the abovestated motion for reconsideration, the respondent court, in a resolution penned by Justice Sison and
promulgated on September 27, 1983, ruled, as follows:

WHEREFORE, Our decision of June 28, 1978 is hereby reversed and set aside and another one is rendered
ordering: (1) defendants-appellees surnamed Leal to accept the sum of P5,600.00 from plaintiff-appellant
(substituted by Salud M. Santiago) as repurchase price of the lots described in the "Compraventa" of March 21,
1941, and thereafter to execute a deed of repurchase sufficient in law to transfer ownership of the properties to
appellant Salud M. Santiago, the same to be done within five (5) days from payment; (2) ordering the same
defendants Leals and defendant Clemente Samario to indemnify appellant in the sum of P3,087.50 as rental for
the year 1967-1968 and the same amount every year thereafter; (3) ordering an the defendants jointly and
severally to pay the sum of Pl,500.00 as attorney's fees and other expenses of litigation; and (4) ordering
 defendant Register of Deeds of Rizal to cancel Transfer Certificate of Title No. 42535 in the names of Vicente
Santiago and Luis Santiago upon presentation of the deed of sale herein ordered to be executed by the
appellees in favor of Salud M. Santiago and to issue thereof another Transfer Certificate of Title in the name
alone of Salud M. Santiago. No costs here and in the courts (sic) below.

SO ORDERED.

Verily, the well-spring whence the present controversy arose is the abovementioned "Compraventa," more particularly paragraph
(b) thereof, to wit:

xxx xxx xxx

(b) En caso de venta, no podran vender a otros dichos tres lotes de terreno sino al aqui vendedor Vicente
Santiago, o los herederos o sucesores de este por el niismo precio de CINCO MIL SEISCIENTOS PESOS
(P5,600.00) siempre y cuando estos ultimos pueden hacer la compra. 3

xxx xxx xxx

which is now the subject of varying and conflicting interpretations.

xxx xxx xxx

It is admitted by both parties that the phrase "they shall not sell to others these three lots but only to the seller Vicente Santiago
or to his heirs or successors" is an express prohibition against the sale of the lots described in the "Compraventa" to third
persons or strangers to the contract. However, while private respondent naturally lauds the resolution of Justice Sison, which
sustains the validity of this prohibition, the petitioners, on the other hand, endorse the decision penned by Justice Paras, which
states, in part:

xxx xxx xxx

Finally, there is grave doubt re the validity of the ostensible resolutory condition here, namely, the prohibition to
sell the lots to persons other than the vendor (appellant); uncertainly, a prohibition to alienate should not exceed
at most a period of twenty years, otherwise there would be subversion of public policy, which naturally frowns on
unwarranted restrictions on the right of ownership. 4

xxx xxx xxx

We agree with the Paras ponencia.

Contracts are generally binding between the parties, their assigns and heirs; however, under Art. 1255 of the Civil Code of
Spain, which is applicable in this instance, pacts, clauses, and conditions which are contrary to public order are null and void,
thus, without any binding effect.

Parenthetically, the equivalent provision in the Civil Code of the Philippines is that of Art. 1306, which states: "That contracting
parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not
contrary to law, morals, good customs, public order, or public policy. Public order signifies the public weal — public
policy. 5 Essentially, therefore, public order and public policy mean one and the same thing. Public policy is simply the English
equivalent of "order publico" in Art. 1255 of the Civil Code of Spain. 6

One such condition which is contrary to public policy is the present prohibition to self to third parties, because the same virtually
amounts to a perpetual restriction to the right of ownership, specifically the owner's right to freely dispose of his properties. This,
we hold that any such prohibition, indefinite and stated as to time, so much so that it shall continue to be applicable even beyond
the lifetime of the original parties to the contract, is, without doubt, a nullity. In the light of this pronouncement, we grant the
petitioners' prayer for the cancellation of the annotations of this prohibition at the back of their Transfer Certificates 'Title.

It will be noted, moreover, that the petitioners have never sold, or even attempted to sell, the properties subject of the
"Compraventa. "

We now come to what we believe is the very issue in this case which is, whether or not under the aforequoted paragraph (b) of
the "Compraventa" a right of repurchase in favor of the private respondent exist.
The ruling of the Fourth Division (Justice Paras) is that the said stipulation does not grant a right to repurchase. Contrarily, the
resolution of the Fourth Civil Cases Division (Justice P. V. Sison) interpreted the same provision as granting the right to
repurchase subject to a condition precedent.

Thus, the assailed Resolution, reversing the earlier decision of the same respondent court, ruled

xxx xxx xxx

The all-importartant phrase "en caso de venta," must of necessity refer to the sale of the properties either by
Cirilo or his heirs to the Santiago brothers themselves or to their heirs, including appellants Vicente Santiago
including appellants Vicente Santiago and Salud M Santiago, for the same sum of P5,600.00, "siempre y
cuando estos ultimos pueden hacer la compra" (when the latter shall be able to buy it).

xxx xxx xxx

... We repeat, The words envision the situation contemplated by the contracting parties themselves, the resale
of the lots to their owners, and NOT to a sale of the lots to third parties or strangers to the contracts. ... 7

xxx xxx xxx

The law provides that for conventional redemption to take place, the vendor should reserve, in no uncertain terms, the right to
repurchase the thing sold.8 Thus, the right to redeem must be expressly stipulated in the contract of sale in order that it may
have legal existence.

In the case before us, we cannot and any express or implied grant of a right to repurchase, nor can we infer, from any word or
words in the questioned paragraph, the existence of any such right. The interpretation in the resolution (Justice Sison) is rather
strained. The phrase "in case case" of should be construed to mean "should the buyers wish to sell which is the plain and simple
import of the words, and not "the buyers should sell," which is clearly a contorted construction of the same phrase. The resort to
Article 1373 of the Civil Code of the Philippines is erroneous. The subject phrase is patent and unambiguous, hence, it must not
be given another interpretation

But even assuming that such a right of repurchase is granted under the "Compraventa," the petitioner correctly asserts that the
same has already prescribed. Under Art. 1508 of the Civil Code of Spain (Art,. 1606 of the Civil Code of the Philippines), the
right to redeem or repurchase, in the absence of an express agreement as to time, shall last four years from the date of the
contract. In this case then, the right to repurchase, if it was at four guaranteed under in the "Compraventa," should have been
exercise within four years from March 21, 1941 (indubitably the date of execution of the contract), or at the latest in 1945.

In the respondent court's resolution, it is further ruled that the right to repurchase was given birth by the condition precedent
provided for in the phrase "siempre y cuando estos ultimos pueden hacer la compra" (when the buyer has money to buy). In
other words, it is the respondent court's contention that the right may be exercised only when the buyer has money to buy. If this
were so, the second paragraph of Article 1508 would apply — there is agreement as to the time, although it is indefinite,
therefore, the right should be exercised within ten years, because the law does not favor suspended ownership. Since the
alleged right to repurchase was attempted to be exercised by Vicente Santiago only in 1966, or 25 years from the date of the
contract, the said right has undoubtedly expired.

WHEREFORE, in view of the foregoing, the Resolution dated September 27, 1983, of the respondent court is SET ASIDE and
the Decision promulgated on June 28, 1978 is hereby REINSTATED. The annotations of the prohibition to sell at the back of
TCT Nos. 138837, 138838, 138839, 138840, 138841, and 138842 are hereby ordered CANCELLED. Costs against the private
respondent.

SO ORDERED.

Yap (Chairman), Melencio-Herrera and Padilla, JJ., concur.

Paras, J., took no part.

 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 184823 October 6, 2010

COMMISSIONER OF INTERNAL REVENUE, Petitioner,

vs.
AICHI FORGING COMPANY OF ASIA, INC., Respondent.

DECISION

DEL CASTILLO, J.:

A taxpayer is entitled to a refund either by authority of a statute expressly granting such right, privilege, or incentive in his favor,
or under the principle of solutio indebiti requiring the return of taxes erroneously or illegally collected. In both cases, a taxpayer
must prove not only his entitlement to a refund but also his compliance with the procedural due process as non-observance of
the prescriptive periods within which to file the administrative and the judicial claims would result in the denial of his claim.

This Petition for Review on Certiorari under Rule 45 of the Rules of Court seeks to set aside the July 30, 2008 Decision 1 and the
October 6, 2008 Resolution2 of the Court of Tax Appeals (CTA) En Banc.
Factual Antecedents

Respondent Aichi Forging Company of Asia, Inc., a corporation duly organized and existing under the laws of the Republic of the
Philippines, is engaged in the manufacturing, producing, and processing of steel and its by-products.3 It is registered with the
Bureau of Internal Revenue (BIR) as a Value-Added Tax (VAT) entity4 and its products, "close impression die steel forgings" and
"tool and dies," are registered with the Board of Investments (BOI) as a pioneer status. 5

On September 30, 2004, respondent filed a claim for refund/credit of input VAT for the period July 1, 2002 to September 30,
2002 in the total amount of ₱3,891,123.82 with the petitioner Commissioner of Internal Revenue (CIR), through the Department
of Finance (DOF) One-Stop Shop Inter-Agency Tax Credit and Duty Drawback Center.6

Proceedings before the Second Division of the CTA

On even date, respondent filed a Petition for Review7 with the CTA for the refund/credit of the same input VAT. The case was
docketed as CTA Case No. 7065 and was raffled to the Second Division of the CTA.

In the Petition for Review, respondent alleged that for the period July 1, 2002 to September 30, 2002, it generated and recorded
zero-rated sales in the amount of ₱131,791,399.00,8 which was paid pursuant to Section 106(A) (2) (a) (1), (2) and (3) of the
National Internal Revenue Code of 1997 (NIRC);9 that for the said period, it incurred and paid input VAT amounting to
₱3,912,088.14 from purchases and importation attributable to its zero-rated sales;10and that in its application for refund/credit
filed with the DOF One-Stop Shop Inter-Agency Tax Credit and Duty Drawback Center, it only claimed the amount of
₱3,891,123.82.11

In response, petitioner filed his Answer12 raising the following special and affirmative defenses, to wit:

4. Petitioner’s alleged claim for refund is subject to administrative investigation by the Bureau;

5. Petitioner must prove that it paid VAT input taxes for the period in question;

6. Petitioner must prove that its sales are export sales contemplated under Sections 106(A) (2) (a), and 108(B) (1) of the
Tax Code of 1997;

7. Petitioner must prove that the claim was filed within the two (2) year period prescribed in Section 229 of the Tax
Code;

8. In an action for refund, the burden of proof is on the taxpayer to establish its right to refund, and failure to sustain the
burden is fatal to the claim for refund; and

9. Claims for refund are construed strictly against the claimant for the same partake of the nature of exemption from
taxation.13

Trial ensued, after which, on January 4, 2008, the Second Division of the CTA rendered a Decision partially granting
respondent’s claim for refund/credit. Pertinent portions of the Decision read:

For a VAT registered entity whose sales are zero-rated, to validly claim a refund, Section 112 (A) of the NIRC of 1997, as
amended, provides:

SEC. 112. Refunds or Tax Credits of Input Tax. –

(A) Zero-rated or Effectively Zero-rated Sales. – Any VAT-registered person, whose sales are zero-rated or effectively zero-rated
may, within two (2) years after the close of the taxable quarter when the sales were made, apply for the issuance of a tax credit
certificate or refund of creditable input tax due or paid attributable to such sales, except transitional input tax, to the extent that
such input tax has not been applied against output tax: x x x

Pursuant to the above provision, petitioner must comply with the following requisites: (1) the taxpayer is engaged in sales which
are zero-rated or effectively zero-rated; (2) the taxpayer is VAT-registered; (3) the claim must be filed within two years after the
close of the taxable quarter when such sales were made; and (4) the creditable input tax due or paid must be attributable to such
sales, except the transitional input tax, to the extent that such input tax has not been applied against the output tax.

The Court finds that the first three requirements have been complied [with] by petitioner.
With regard to the first requisite, the evidence presented by petitioner, such as the Sales Invoices (Exhibits "II" to "II-262," "JJ" to
"JJ-431," "KK" to "KK-394" and "LL") shows that it is engaged in sales which are zero-rated.

The second requisite has likewise been complied with. The Certificate of Registration with OCN 1RC0000148499 (Exhibit "C")
with the BIR proves that petitioner is a registered VAT taxpayer.

In compliance with the third requisite, petitioner filed its administrative claim for refund on September 30, 2004 (Exhibit "N") and
the present Petition for Review on September 30, 2004, both within the two (2) year prescriptive period from the close of the
taxable quarter when the sales were made, which is from September 30, 2002.

As regards, the fourth requirement, the Court finds that there are some documents and claims of petitioner that are baseless and
have not been satisfactorily substantiated.

xxxx

In sum, petitioner has sufficiently proved that it is entitled to a refund or issuance of a tax credit certificate representing unutilized
excess input VAT payments for the period July 1, 2002 to September 30, 2002, which are attributable to its zero-rated sales for
the same period, but in the reduced amount of ₱3,239,119.25, computed as follows:

Amount of Claimed Input VAT ₱ 3,891,123.82

Less:
Exceptions as found by the ICPA 41,020.37

Net Creditable Input VAT ₱ 3,850,103.45

Less:
Output VAT Due 610,984.20
Excess Creditable Input VAT ₱ 3,239,119.25

WHEREFORE, premises considered, the present Petition for Review is PARTIALLY GRANTED. Accordingly, respondent is
hereby ORDERED TO REFUND OR ISSUE A TAX CREDIT CERTIFICATE in favor of petitioner [in] the reduced amount of
THREE MILLION TWO HUNDRED THIRTY NINE THOUSAND ONE HUNDRED NINETEEN AND 25/100 PESOS
(₱3,239,119.25), representing the unutilized input VAT incurred for the months of July to September 2002.

SO ORDERED.14

Dissatisfied with the above-quoted Decision, petitioner filed a Motion for Partial Reconsideration,15 insisting that the
administrative and the judicial claims were filed beyond the two-year period to claim a tax refund/credit provided for under
Sections 112(A) and 229 of the NIRC. He reasoned that since the year 2004 was a leap year, the filing of the claim for tax
refund/credit on September 30, 2004 was beyond the two-year period, which expired on September 29, 2004.16 He cited as
basis Article 13 of the Civil Code,17 which provides that when the law speaks of a year, it is equivalent to 365 days. In addition,
petitioner argued that the simultaneous filing of the administrative and the judicial claims contravenes Sections 112 and 229 of
the NIRC.18 According to the petitioner, a prior filing of an administrative claim is a "condition precedent" 19 before a judicial claim
can be filed. He explained that the rationale of such requirement rests not only on the doctrine of exhaustion of administrative
remedies but also on the fact that the CTA is an appellate body which exercises the power of judicial review over administrative
actions of the BIR. 20

The Second Division of the CTA, however, denied petitioner’s Motion for Partial Reconsideration for lack of merit. Petitioner thus
elevated the matter to the CTA En Banc via a Petition for Review.21

Ruling of the CTA En Banc

On July 30, 2008, the CTA En Banc affirmed the Second Division’s Decision allowing the partial tax refund/credit in favor of
respondent. However, as to the reckoning point for counting the two-year period, the CTA En Banc ruled:

Petitioner argues that the administrative and judicial claims were filed beyond the period allowed by law and hence, the
honorable Court has no jurisdiction over the same. In addition, petitioner further contends that respondent's filing of the
administrative and judicial [claims] effectively eliminates the authority of the honorable Court to exercise jurisdiction over the
judicial claim.

We are not persuaded.

Section 114 of the 1997 NIRC, and We quote, to wit:

SEC. 114. Return and Payment of Value-added Tax. –

(A) In General. – Every person liable to pay the value-added tax imposed under this Title shall file a quarterly return of the
amount of his gross sales or receipts within twenty-five (25) days following the close of each taxable quarter prescribed for each
taxpayer: Provided, however, That VAT-registered persons shall pay the value-added tax on a monthly basis.

[x x x x ]

Based on the above-stated provision, a taxpayer has twenty five (25) days from the close of each taxable quarter within which to
file a quarterly return of the amount of his gross sales or receipts. In the case at bar, the taxable quarter involved was for the
period of July 1, 2002 to September 30, 2002. Applying Section 114 of the 1997 NIRC, respondent has until October 25, 2002
within which to file its quarterly return for its gross sales or receipts [with] which it complied when it filed its VAT Quarterly Return
on October 20, 2002.

In relation to this, the reckoning of the two-year period provided under Section 229 of the 1997 NIRC should start from the
payment of tax subject claim for refund. As stated above, respondent filed its VAT Return for the taxable third quarter of 2002 on
October 20, 2002. Thus, respondent's administrative and judicial claims for refund filed on September 30, 2004 were filed on
time because AICHI has until October 20, 2004 within which to file its claim for refund.

In addition, We do not agree with the petitioner's contention that the 1997 NIRC requires the previous filing of an administrative
claim for refund prior to the judicial claim. This should not be the case as the law does not prohibit the simultaneous filing of the
administrative and judicial claims for refund. What is controlling is that both claims for refund must be filed within the two-year
prescriptive period.

In sum, the Court En Banc finds no cogent justification to disturb the findings and conclusion spelled out in the assailed January
4, 2008 Decision and March 13, 2008 Resolution of the CTA Second Division. What the instant petition seeks is for the Court En
Banc to view and appreciate the evidence in their own perspective of things, which unfortunately had already been considered
and passed upon.

WHEREFORE, the instant Petition for Review is hereby DENIED DUE COURSE and DISMISSED for lack of merit. Accordingly,
the January 4, 2008 Decision and March 13, 2008 Resolution of the CTA Second Division in CTA Case No. 7065 entitled,
"AICHI Forging Company of Asia, Inc. petitioner vs. Commissioner of Internal Revenue, respondent" are hereby AFFIRMED in
toto.

SO ORDERED.22

Petitioner sought reconsideration but the CTA En Banc denied23 his Motion for Reconsideration.

Issue

Hence, the present recourse where petitioner interposes the issue of whether respondent’s judicial and administrative claims for
tax refund/credit were filed within the two-year prescriptive period provided in Sections 112(A) and 229 of

the NIRC.24

Petitioner’s Arguments

Petitioner maintains that respondent’s administrative and judicial claims for tax refund/credit were filed in violation of Sections
112(A) and 229 of the NIRC.25 He posits that pursuant to Article 13 of the Civil Code,26 since the year 2004 was a leap year, the
filing of the claim for tax refund/credit on September 30, 2004 was beyond the two-year period, which expired on September 29,
2004.27

Petitioner further argues that the CTA En Banc erred in applying Section 114(A) of the NIRC in determining the start of the two-
year period as the said provision pertains to the compliance requirements in the payment of VAT.28 He asserts that it is Section
112, paragraph (A), of the same Code that should apply because it specifically provides for the period within which a claim for
tax refund/ credit should be made.29

Petitioner likewise puts in issue the fact that the administrative claim with the BIR and the judicial claim with the CTA were filed
on the same day.30 He opines that the simultaneous filing of the administrative and the judicial claims contravenes Section 229
of the NIRC, which requires the prior filing of an administrative claim.31 He insists that such procedural requirement is based on
the doctrine of exhaustion of administrative remedies and the fact that the CTA is an appellate body exercising judicial review
over administrative actions of the CIR.32

Respondent’s Arguments

For its part, respondent claims that it is entitled to a refund/credit of its unutilized input VAT for the period July 1, 2002 to
September 30, 2002 as a matter of right because it has substantially complied with all the requirements provided by
law.33 Respondent likewise defends the CTA En Banc in applying Section 114(A) of the NIRC in computing the prescriptive
period for the claim for tax refund/credit. Respondent believes that Section 112(A) of the NIRC must be read together with
Section 114(A) of the same Code.34

As to the alleged simultaneous filing of its administrative and judicial claims, respondent contends that it first filed an
administrative claim with the One-Stop Shop Inter-Agency Tax Credit and Duty Drawback Center of the DOF before it filed a
judicial claim with the CTA.35 To prove this, respondent points out that its Claimant Information Sheet No. 49702 36 and BIR Form
No. 1914 for the third quarter of 2002,37 which were filed with the DOF, were attached as Annexes "M" and "N," respectively, to
the Petition for Review filed with the CTA.38 Respondent further contends that the non-observance of the 120-day period given to
the CIR to act on the claim for tax refund/credit in Section 112(D) is not fatal because what is important is that both claims are
filed within the two-year prescriptive period.39 In support thereof, respondent cites Commissioner of Internal Revenue v. Victorias
Milling Co., Inc.40 where it was ruled that "[i]f, however, the [CIR] takes time in deciding the claim, and the period of two years is
about to end, the suit or proceeding must be started in the [CTA] before the end of the two-year period without awaiting the
decision of the [CIR]."41 Lastly, respondent argues that even if the period had already lapsed, it may be suspended for reasons
of equity considering that it is not a jurisdictional requirement. 42

Our Ruling

The petition has merit.

Unutilized input VAT must be claimed within two years after the close of the taxable quarter when the sales were made

In computing the two-year prescriptive period for claiming a refund/credit of unutilized input VAT, the Second Division of the CTA
applied Section 112(A) of the NIRC, which states:

SEC. 112. Refunds or Tax Credits of Input Tax. –

(A) Zero-rated or Effectively Zero-rated Sales – Any VAT-registered person, whose sales are zero-rated or effectively zero-rated
may, within two (2) years after the close of the taxable quarter when the sales were made, apply for the issuance of a tax credit
certificate or refund of creditable input tax due or paid attributable to such sales, except transitional input tax, to the extent that
such input tax has not been applied against output tax: Provided, however, That in the case of zero-rated sales under Section
106(A)(2)(a)(1), (2) and (B) and Section 108 (B)(1) and (2), the acceptable foreign currency exchange proceeds thereof had
been duly accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP): Provided,
further, That where the taxpayer is engaged in zero-rated or effectively zero-rated sale and also in taxable or exempt sale of
goods or properties or services, and the amount of creditable input tax due or paid cannot be directly and entirely attributed to
any one of the transactions, it shall be allocated proportionately on the basis of the volume of sales. (Emphasis supplied.)

The CTA En Banc, on the other hand, took into consideration Sections 114 and 229 of the NIRC, which read:

SEC. 114. Return and Payment of Value-Added Tax. –

(A) In General. – Every person liable to pay the value-added tax imposed under this Title shall file a quarterly return of the
amount of his gross sales or receipts within twenty-five (25) days following the close of each taxable quarter prescribed for each
taxpayer: Provided, however, That VAT-registered persons shall pay the value-added tax on a monthly basis.

Any person, whose registration has been cancelled in accordance with Section 236, shall file a return and pay the tax due
thereon within twenty-five (25) days from the date of cancellation of registration: Provided, That only one consolidated return
shall be filed by the taxpayer for his principal place of business or head office and all branches.

xxxx

SEC. 229. Recovery of tax erroneously or illegally collected. –

No suit or proceeding shall be maintained in any court for the recovery of any national internal revenue tax hereafter alleged to
have been erroneously or illegally assessed or collected, or of any penalty claimed to have been collected without authority, or of
any sum alleged to have been excessively or in any manner wrongfully collected, until a claim for refund or credit has been duly
filed with the Commissioner; but such suit or proceeding may be maintained, whether or not such tax, penalty or sum has been
paid under protest or duress.

In any case, no such suit or proceeding shall be filed after the expiration of two (2) years from the date of payment of the tax or
penalty regardless of any supervening cause that may arise after payment: Provided, however, That the Commissioner may,
even without written claim therefor, refund or credit any tax, where on the face of the return upon which payment was made,
such payment appears clearly to have been erroneously paid. (Emphasis supplied.)

Hence, the CTA En Banc ruled that the reckoning of the two-year period for filing a claim for refund/credit of unutilized input VAT
should start from the date of payment of tax and not from the close of the taxable quarter when the sales were made. 43

The pivotal question of when to reckon the running of the two-year prescriptive period, however, has already been resolved in
Commissioner of Internal Revenue v. Mirant Pagbilao Corporation, 44 where we ruled that Section 112(A) of the NIRC is the
applicable provision in determining the start of the two-year period for claiming a refund/credit of unutilized input VAT, and that
Sections 204(C) and 229 of the NIRC are inapplicable as "both provisions apply only to instances of erroneous payment or
illegal collection of internal revenue taxes."45 We explained that:

The above proviso [Section 112 (A) of the NIRC] clearly provides in no uncertain terms that unutilized input VAT payments
not otherwise used for any internal revenue tax due the taxpayer must be claimed within two years reckoned from the
close of the taxable quarter when the relevant sales were made pertaining to the input VAT regardless of whether said
tax was paid or not. As the CA aptly puts it, albeit it erroneously applied the aforequoted Sec. 112 (A), "[P]rescriptive period
commences from the close of the taxable quarter when the sales were made and not from the time the input VAT was paid nor
from the time the official receipt was issued." Thus, when a zero-rated VAT taxpayer pays its input VAT a year after the pertinent
transaction, said taxpayer only has a year to file a claim for refund or tax credit of the unutilized creditable input VAT. The
reckoning frame would always be the end of the quarter when the pertinent sales or transaction was made, regardless when the
input VAT was paid. Be that as it may, and given that the last creditable input VAT due for the period covering the progress
billing of September 6, 1996 is the third quarter of 1996 ending on September 30, 1996, any claim for unutilized creditable input
VAT refund or tax credit for said quarter prescribed two years after September 30, 1996 or, to be precise, on September 30,
1998. Consequently, MPC’s claim for refund or tax credit filed on December 10, 1999 had already prescribed.

Reckoning for prescriptive period under

Secs. 204(C) and 229 of the NIRC inapplicable

To be sure, MPC cannot avail itself of the provisions of either Sec. 204(C) or 229 of the NIRC which, for the purpose of refund,
prescribes a different starting point for the two-year prescriptive limit for the filing of a claim therefor. Secs. 204(C) and 229
respectively provide:

Sec. 204. Authority of the Commissioner to Compromise, Abate and Refund or Credit Taxes. – The Commissioner may –

xxxx

(c) Credit or refund taxes erroneously or illegally received or penalties imposed without authority, refund the value of internal
revenue stamps when they are returned in good condition by the purchaser, and, in his discretion, redeem or change unused
stamps that have been rendered unfit for use and refund their value upon proof of destruction. No credit or refund of taxes or
penalties shall be allowed unless the taxpayer files in writing with the Commissioner a claim for credit or refund within two (2)
years after the payment of the tax or penalty: Provided, however, That a return filed showing an overpayment shall be
considered as a written claim for credit or refund.

xxxx

Sec. 229. Recovery of Tax Erroneously or Illegally Collected. – No suit or proceeding shall be maintained in any court for the
recovery of any national internal revenue tax hereafter alleged to have been erroneously or illegally assessed or collected, or of
any penalty claimed to have been collected without authority, of any sum alleged to have been excessively or in any manner
wrongfully collected without authority, or of any sum alleged to have been excessively or in any manner wrongfully collected,
until a claim for refund or credit has been duly filed with the Commissioner; but such suit or proceeding may be maintained,
whether or not such tax, penalty, or sum has been paid under protest or duress.

In any case, no such suit or proceeding shall be filed after the expiration of two (2) years from the date of payment of the tax or
penalty regardless of any supervening cause that may arise after payment: Provided, however, That the Commissioner may,
even without a written claim therefor, refund or credit any tax, where on the face of the return upon which payment was made,
such payment appears clearly to have been erroneously paid.

Notably, the above provisions also set a two-year prescriptive period, reckoned from date of payment of the tax or penalty, for
the filing of a claim of refund or tax credit. Notably too, both provisions apply only to instances of erroneous payment or
illegal collection of internal revenue taxes.

MPC’s creditable input VAT not erroneously paid

For perspective, under Sec. 105 of the NIRC, creditable input VAT is an indirect tax which can be shifted or passed on to the
buyer, transferee, or lessee of the goods, properties, or services of the taxpayer. The fact that the subsequent sale or
transaction involves a wholly-tax exempt client, resulting in a zero-rated or effectively zero-rated transaction, does not, standing
alone, deprive the taxpayer of its right to a refund for any unutilized creditable input VAT, albeit the erroneous, illegal, or wrongful
payment angle does not enter the equation.

xxxx

Considering the foregoing discussion, it is clear that Sec. 112 (A) of the NIRC, providing a two-year prescriptive period
reckoned from the close of the taxable quarter when the relevant sales or transactions were made pertaining to the
creditable input VAT, applies to the instant case, and not to the other actions which refer to erroneous payment of
taxes.46 (Emphasis supplied.)

In view of the foregoing, we find that the CTA En Banc erroneously applied Sections 114(A) and 229 of the NIRC in computing
the two-year prescriptive period for claiming refund/credit of unutilized input VAT. To be clear, Section 112 of the NIRC is the
pertinent provision for the refund/credit of input VAT. Thus, the two-year period should be reckoned from the close of the taxable
quarter when the sales were made.

The administrative claim was timely filed

Bearing this in mind, we shall now proceed to determine whether the administrative claim was timely filed.

Relying on Article 13 of the Civil Code,47 which provides that a year is equivalent to 365 days, and taking into account the fact
that the year 2004 was a leap year, petitioner submits that the two-year period to file a claim for tax refund/ credit for the period
July 1, 2002 to September 30, 2002 expired on September 29, 2004.48

We do not agree.

In Commissioner of Internal Revenue v. Primetown Property Group, Inc., 49 we said that as between the Civil Code, which
provides that a year is equivalent to 365 days, and the Administrative Code of 1987, which states that a year is composed of 12
calendar months, it is the latter that must prevail following the legal maxim, Lex posteriori derogat priori. 50 Thus:

Both Article 13 of the Civil Code and Section 31, Chapter VIII, Book I of the Administrative Code of 1987 deal with the same
subject matter – the computation of legal periods. Under the Civil Code, a year is equivalent to 365 days whether it be a regular
year or a leap year. Under the Administrative Code of 1987, however, a year is composed of 12 calendar months. Needless to
state, under the Administrative Code of 1987, the number of days is irrelevant.

There obviously exists a manifest incompatibility in the manner of

computing legal periods under the Civil Code and the Administrative Code of 1987. For this reason, we hold that Section 31,
Chapter VIII, Book I of the Administrative Code of 1987, being the more recent law, governs the computation of legal periods.
Lex posteriori derogat priori.

Applying Section 31, Chapter VIII, Book I of the Administrative Code of 1987 to this case, the two-year prescriptive period
(reckoned from the time respondent filed its final adjusted return on April 14, 1998) consisted of 24 calendar months, computed
as follows:

Year 1 1st calendar month April 15, 1998 to May 14, 1998
2nd calendar month May 15, 1998 to June 14, 1998
3rd calendar month June 15, 1998 to July 14, 1998
 4th calendar month July 15, 1998 to August 14, 1998
5th calendar month August 15, 1998 to September 14, 1998
6th calendar month September 15, 1998 to October 14, 1998
7th calendar month October 15, 1998 to November 14, 1998
8th calendar month November 15, 1998 to December 14, 1998
9th calendar month December 15, 1998 to January 14, 1999
10th calendar month January 15, 1999 to February 14, 1999
11th calendar month February 15, 1999 to March 14, 1999
12th calendar month March 15, 1999 to April 14, 1999
Year 2 13th calendar month April 15, 1999 to May 14, 1999
14th calendar month May 15, 1999 to June 14, 1999
15th calendar month June 15, 1999 to July 14, 1999
16th calendar month July 15, 1999 to August 14, 1999
17th calendar month August 15, 1999 to September 14, 1999
18th calendar month September 15, 1999 to October 14, 1999
19th calendar month October 15, 1999 to November 14, 1999
20th calendar month November 15, 1999 to December 14, 1999
21st calendar month December 15, 1999 to January 14, 2000
22nd calendar month January 15, 2000 to February 14, 2000
23rd calendar month February 15, 2000 to March 14, 2000
24th calendar month March 15, 2000 to April 14, 2000

We therefore hold that respondent's petition (filed on April 14, 2000) was filed on the last day of the 24th calendar month from
the day respondent filed its final adjusted return. Hence, it was filed within the reglementary period. 51

Applying this to the present case, the two-year period to file a claim for tax refund/credit for the period July 1, 2002 to September
30, 2002 expired on September 30, 2004. Hence, respondent’s administrative claim was timely filed.

The filing of the judicial claim was premature

However, notwithstanding the timely filing of the administrative claim, we

are constrained to deny respondent’s claim for tax refund/credit for having been filed in violation of Section 112(D) of the NIRC,
which provides that:

SEC. 112. Refunds or Tax Credits of Input Tax. –

xxxx

(D) Period within which Refund or Tax Credit of Input Taxes shall be Made. – In proper cases, the Commissioner shall grant a
refund or issue the tax credit certificate for creditable input taxes within one hundred twenty (120) days from the date of
submission of complete documents in support of the application filed in accordance with Subsections (A) and (B) hereof.

In case of full or partial denial of the claim for tax refund or tax credit, or the failure on the part of the Commissioner to act on the
application within the period prescribed above, the taxpayer affected may, within thirty (30) days from the receipt of the decision
denying the claim or after the expiration of the one hundred twenty day-period, appeal the decision or the unacted claim with the
Court of Tax Appeals. (Emphasis supplied.)

Section 112(D) of the NIRC clearly provides that the CIR has "120 days, from the date of the submission of the complete
documents in support of the application [for tax refund/credit]," within which to grant or deny the claim. In case of full or partial
denial by the CIR, the taxpayer’s recourse is to file an appeal before the CTA within 30 days from receipt of the decision of the
CIR. However, if after the 120-day period the CIR fails to act on the application for tax refund/credit, the remedy of the taxpayer
is to appeal the inaction of the CIR to CTA within 30 days.

In this case, the administrative and the judicial claims were simultaneously filed on September 30, 2004. Obviously, respondent
did not wait for the decision of the CIR or the lapse of the 120-day period. For this reason, we find the filing of the judicial claim
with the CTA premature.

Respondent’s assertion that the non-observance of the 120-day period is not fatal to the filing of a judicial claim as long as both
the administrative and the judicial claims are filed within the two-year prescriptive period52 has no legal basis.

There is nothing in Section 112 of the NIRC to support respondent’s view. Subsection (A) of the said provision states that "any
VAT-registered person, whose sales are zero-rated or effectively zero-rated may, within two years after the close of the taxable
quarter when the sales were made, apply for the issuance of a tax credit certificate or refund of creditable input tax due or paid
attributable to such sales." The phrase "within two (2) years x x x apply for the issuance of a tax credit certificate or refund"
refers to applications for refund/credit filed with the CIR and not to appeals made to the CTA. This is apparent in the first
paragraph of subsection (D) of the same provision, which states that the CIR has "120 days from the submission of complete
documents in support of the application filed in accordance with Subsections (A) and (B)" within which to decide on the claim.

In fact, applying the two-year period to judicial claims would render nugatory Section 112(D) of the NIRC, which already provides
for a specific period within which a taxpayer should appeal the decision or inaction of the CIR. The second paragraph of Section
112(D) of the NIRC envisions two scenarios: (1) when a decision is issued by the CIR before the lapse of the 120-day period;
and (2) when no decision is made after the 120-day period. In both instances, the taxpayer has 30 days within which to file an
appeal with the CTA. As we see it then, the 120-day period is crucial in filing an appeal with the CTA.

With regard to Commissioner of Internal Revenue v. Victorias Milling, Co., Inc.53 relied upon by respondent, we find the same
inapplicable as the tax provision involved in that case is Section 306, now Section 229 of the NIRC. And as already discussed,
Section 229 does not apply to refunds/credits of input VAT, such as the instant case.

In fine, the premature filing of respondent’s claim for refund/credit of input VAT before the CTA warrants a dismissal inasmuch
as no jurisdiction was acquired by the CTA.

WHEREFORE, the Petition is hereby GRANTED. The assailed July 30, 2008 Decision and the October 6, 2008 Resolution of
the Court of Tax Appeals are hereby REVERSED and SET ASIDE. The Court of Tax Appeals Second Division is DIRECTED to
dismiss CTA Case No. 7065 for having been prematurely filed.

SO ORDERED.

MARIANO C. DEL CASTILLO

Associate Justice

WE CONCUR:

RENATO C. CORONA
Chief Justice
Chairperson

PRESBITERO J. VELASCO, JR. TERESITA J. LEONARDO-DE CASTRO

Associate Justice Associate Justice

JOSE PORTUGAL PEREZ

Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Decision had been
reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

RENATO C. CORONA
Chief Justice
 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. L-68470 October 8, 1985

ALICE REYES VAN DORN, petitioner,

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

MELENCIO-HERRERA, J.:\

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

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

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

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

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

Petitioner contends that respondent is estopped from laying claim on the alleged conjugal property because of the
representation he made in the divorce proceedings before the American Court that they had no community of property; that the
Galleon Shop was not established through conjugal funds, and that respondent's claim is barred by prior judgment.

For his part, respondent avers that the Divorce Decree issued by the Nevada Court cannot prevail over the prohibitive laws of
the Philippines and its declared national policy; that the acts and declaration of a foreign Court cannot, especially if the same is
contrary to public policy, divest Philippine Courts of jurisdiction to entertain matters within its jurisdiction.
For the resolution of this case, it is not necessary to determine whether the property relations between petitioner and private
respondent, after their marriage, were upon absolute or relative community property, upon complete separation of property, or
upon any other regime. The pivotal fact in this case is the Nevada divorce of the parties.

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

xxx xxx xxx

You are hereby authorized to accept service of Summons, to file an Answer, appear on my behalf and do an
things necessary and proper to represent me, without further contesting, subject to the following:

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

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

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

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.
Teehankee (Chairman), Plana, Relova, Gutierrez, Jr., De la Fuente and Patajo, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-23678 June 6, 1967

TESTATE ESTATE OF AMOS G. BELLIS, deceased.

PEOPLE'S BANK and TRUST COMPANY, executor.
MARIA CRISTINA BELLIS and MIRIAM PALMA BELLIS, oppositors-appellants,
vs.
EDWARD A. BELLIS, ET AL., heirs-appellees.

Vicente R. Macasaet and Jose D. Villena for oppositors appellants.

Paredes, Poblador, Cruz and Nazareno for heirs-appellees E. A. Bellis, et al.
Quijano and Arroyo for heirs-appellees W. S. Bellis, et al.
J. R. Balonkita for appellee People's Bank & Trust Company.
Ozaeta, Gibbs and Ozaeta for appellee A. B. Allsman.

BENGZON, J.P., J.:

This is a direct appeal to Us, upon a question purely of law, from an order of the Court of First Instance of Manila dated April 30,
1964, approving the project of partition filed by the executor in Civil Case No. 37089 therein.1äwphï1.ñët

The facts of the case are as follows:

Amos G. Bellis, born in Texas, was "a citizen of the State of Texas and of the United States." By his first wife, Mary E. Mallen,
whom he divorced, he had five legitimate children: Edward A. Bellis, George Bellis (who pre-deceased him in infancy), Henry A.
Bellis, Alexander Bellis and Anna Bellis Allsman; by his second wife, Violet Kennedy, who survived him, he had three legitimate
children: Edwin G. Bellis, Walter S. Bellis and Dorothy Bellis; and finally, he had three illegitimate children: Amos Bellis, Jr.,
Maria Cristina Bellis and Miriam Palma Bellis.

On August 5, 1952, Amos G. Bellis executed a will in the Philippines, in which he directed that after all taxes, obligations, and
expenses of administration are paid for, his distributable estate should be divided, in trust, in the following order and manner: (a)
$240,000.00 to his first wife, Mary E. Mallen; (b) P120,000.00 to his three illegitimate children, Amos Bellis, Jr., Maria Cristina
Bellis, Miriam Palma Bellis, or P40,000.00 each and (c) after the foregoing two items have been satisfied, the remainder shall go
to his seven surviving children by his first and second wives, namely: Edward A. Bellis, Henry A. Bellis, Alexander Bellis and
Anna Bellis Allsman, Edwin G. Bellis, Walter S. Bellis, and Dorothy E. Bellis, in equal shares.1äwphï1.ñët

Subsequently, or on July 8, 1958, Amos G. Bellis died a resident of San Antonio, Texas, U.S.A. His will was admitted to probate
in the Court of First Instance of Manila on September 15, 1958.

The People's Bank and Trust Company, as executor of the will, paid all the bequests therein including the amount of
$240,000.00 in the form of shares of stock to Mary E. Mallen and to the three (3) illegitimate children, Amos Bellis, Jr., Maria
Cristina Bellis and Miriam Palma Bellis, various amounts totalling P40,000.00 each in satisfaction of their respective legacies, or
a total of P120,000.00, which it released from time to time according as the lower court approved and allowed the various
motions or petitions filed by the latter three requesting partial advances on account of their respective legacies.

On January 8, 1964, preparatory to closing its administration, the executor submitted and filed its "Executor's Final Account,
Report of Administration and Project of Partition" wherein it reported, inter alia, the satisfaction of the legacy of Mary E. Mallen
by the delivery to her of shares of stock amounting to $240,000.00, and the legacies of Amos Bellis, Jr., Maria Cristina Bellis and
Miriam Palma Bellis in the amount of P40,000.00 each or a total of P120,000.00. In the project of partition, the executor —
pursuant to the "Twelfth" clause of the testator's Last Will and Testament — divided the residuary estate into seven equal
portions for the benefit of the testator's seven legitimate children by his first and second marriages.
On January 17, 1964, Maria Cristina Bellis and Miriam Palma Bellis filed their respective oppositions to the project of partition on
the ground that they were deprived of their legitimes as illegitimate children and, therefore, compulsory heirs of the deceased.

Amos Bellis, Jr. interposed no opposition despite notice to him, proof of service of which is evidenced by the registry receipt
submitted on April 27, 1964 by the executor.1

After the parties filed their respective memoranda and other pertinent pleadings, the lower court, on April 30, 1964, issued an
order overruling the oppositions and approving the executor's final account, report and administration and project of partition.
Relying upon Art. 16 of the Civil Code, it applied the national law of the decedent, which in this case is Texas law, which did not
provide for legitimes.

Their respective motions for reconsideration having been denied by the lower court on June 11, 1964, oppositors-appellants
appealed to this Court to raise the issue of which law must apply — Texas law or Philippine law.

In this regard, the parties do not submit the case on, nor even discuss, the doctrine of renvoi, applied by this Court in Aznar v.
Christensen Garcia, L-16749, January 31, 1963. Said doctrine is usually pertinent where the decedent is a national of one
country, and a domicile of another. In the present case, it is not disputed that the decedent was both a national of Texas and a
domicile thereof at the time of his death.2 So that even assuming Texas has a conflict of law rule providing that the domiciliary
system (law of the domicile) should govern, the same would not result in a reference back (renvoi) to Philippine law, but would
still refer to Texas law. Nonetheless, if Texas has a conflicts rule adopting the situs theory (lex rei sitae) calling for the application
of the law of the place where the properties are situated, renvoi would arise, since the properties here involved are found in the
Philippines. In the absence, however, of proof as to the conflict of law rule of Texas, it should not be presumed different from
ours.3 Appellants' position is therefore not rested on the doctrine of renvoi. As stated, they never invoked nor even mentioned it
in their arguments. Rather, they argue that their case falls under the circumstances mentioned in the third paragraph of Article
17 in relation to Article 16 of the Civil Code.

Article 16, par. 2, and Art. 1039 of the Civil Code, render applicable the national law of the decedent, in intestate or testamentary
successions, with regard to four items: (a) the order of succession; (b) the amount of successional rights; (e) the intrinsic validity
of the provisions of the will; and (d) the capacity to succeed. They provide that —

ART. 16. Real property as well as personal property is subject to the law of the country where it is situated.

However, intestate and testamentary successions, both with respect to the order of succession and to the amount of
successional rights and to the intrinsic validity of testamentary provisions, shall be regulated by the national law of the
person whose succession is under consideration, whatever may he the nature of the property and regardless of the
country wherein said property may be found.

ART. 1039. Capacity to succeed is governed by the law of the nation of the decedent.

Appellants would however counter that Art. 17, paragraph three, of the Civil Code, stating that —

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.

prevails as the exception to Art. 16, par. 2 of the Civil Code afore-quoted. This is not correct. Precisely, Congress deleted the
phrase, "notwithstanding the provisions of this and the next preceding article" when they incorporated Art. 11 of the old Civil
Code as Art. 17 of the new Civil Code, while reproducing without substantial change the second paragraph of Art. 10 of the old
Civil Code as Art. 16 in the new. It must have been their purpose to make the second paragraph of Art. 16 a specific provision in
itself which must be applied in testate and intestate succession. As further indication of this legislative intent, Congress added a
new provision, under Art. 1039, which decrees that capacity to succeed is to be governed by the national law of the decedent.

It is therefore evident that whatever public policy or good customs may be involved in our System of legitimes, Congress has not
intended to extend the same to the succession of foreign nationals. For it has specifically chosen to leave, inter alia,
the amount of successional rights, to the decedent's national law. Specific provisions must prevail over general ones.

Appellants would also point out that the decedent executed two wills — one to govern his Texas estate and the other his
Philippine estate — arguing from this that he intended Philippine law to govern his Philippine estate. Assuming that such was the
decedent's intention in executing a separate Philippine will, it would not alter the law, for as this Court ruled in Miciano v. Brimo,
50 Phil. 867, 870, a provision in a foreigner's will to the effect that his properties shall be distributed in accordance with
Philippine law and not with his national law, is illegal and void, for his national law cannot be ignored in regard to those matters
that Article 10 — now Article 16 — of the Civil Code states said national law should govern.
The parties admit that the decedent, Amos G. Bellis, was a citizen of the State of Texas, U.S.A., and that under the laws of
Texas, there are no forced heirs or legitimes. Accordingly, since the intrinsic validity of the provision of the will and the amount of
successional rights are to be determined under Texas law, the Philippine law on legitimes cannot be applied to the testacy of
Amos G. Bellis.

Wherefore, the order of the probate court is hereby affirmed in toto, with costs against appellants. So ordered.

Concepcion, C.J., Reyes, J.B.L., Dizon, Regala, Makalintal, Zaldivar, Sanchez and Castro, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 205487 November 12, 2014

ORION SAVINGS BANK, Petitioner,

vs.
SHIGEKANE SUZUKI, Respondent.
 DECISION

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. 833496 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 Claim 12 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.

ARTURO D. BRION
Associate Justice

WE CONCUR:
 ANTONIO T. CARPIO
Associate Justice
Chairperson

MARIANO C. DEL CASTILLO JOSE CATRAL MENDOZA

Associate Justice Associate Justice

MARVIC M.V.F. LEONEN

Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the Court's Division.

ANTONIO T. CARPIO
Acting Chief Justice

FIRST DIVISION

G.R. No. 132344 February 17, 2000

UNIVERSITY OF THE EAST, petitioner,

vs.
ROMEO A. JADER, respondent.

YNARES-SANTIAGO, J.:

May an educational institution be held liable for damages for misleading a student into believing that the latter had satisfied all
the requirements for graduation when such is not the case? This is the issue in the instant petition for review premised on the
following undisputed facts as summarized by the trial court and adopted by the Court of Appeals (CA), 1 to wit:

Plaintiff was enrolled in the defendants' College of Law from 1984 up to 1988. In the first semester of his last year
(School year 1987-1988), he failed to take the regular final examination in Practice Court I for which he was given an
incomplete grade (Exhibits "2", also Exhibit "H"). He enrolled for the second semester as fourth year law student (Exhibit
"A") and on February 1, 1988 he filed an application for the removal of the incomplete grade given him by Professor
Carlos Ortega (Exhibits "H-2", also Exhibit "2") which was approved by Dean Celedonio Tiongson after payment of the
required fee. He took the examination on March 28, 1988. On May 30, 1988, Professor Carlos Ortega submitted his
grade. It was a grade of five (5). (Exhibits "H-4", also Exhibits "2-L", "2-N").1âwphi1.nêt

In the meantime, the Dean and the Faculty Members of the College of Law met to deliberate on who among the fourth
year students should be allowed to graduate. The plaintiff's name appeared in the Tentative List of Candidates for
graduation for the Degree of Bachelor of Laws (LL.B) as of Second Semester (1987-1988) with the following annotation:

JADER ROMEO A.

Def. Conflict of Laws — x-1-87-88, Practice Court I Inc., 1-87-88 C-1 to submit transcript with S.O. (Exhibits "3", "3-C-1",
"3-C-2").
 The 35th Investitures & Commencement Ceremonies for the candidates of Bachelor of Laws was scheduled on the 16th
of April 1988 at 3:00 o'clock in the afternoon, and in the invitation for that occasion the name of the plaintiff appeared as
one of the candidates. (Exhibits "B", "B-6", "B-6-A"). At the foot of the list of the names of the candidates there appeared
however the following annotation:

This is a tentative list Degrees will be conferred upon these candidates who satisfactorily complete requirements
as stated in the University Bulletin and as approved of the Department of Education, Culture and Sports (Exhibit
"B-7-A").

The plaintiff attended the investiture ceremonies at F. dela Cruz Quadrangle, U.E., Recto Campus, during the program
of which he went up the stage when his name was called, escorted by her (sic) mother and his eldest brother who
assisted in placing the Hood, and his Tassel was turned from left to right, and he was thereafter handed by Dean
Celedonio a rolled white sheet of paper symbolical of the Law Diploma. His relatives took pictures of the occasion
(Exhibits "C" to "C-6", "D-3" to "D-11").

He tendered a blow-out that evening which was attended by neighbors, friends and relatives who wished him good luck
in the forthcoming bar examination. There were pictures taken too during the blow-out (Exhibits "D" to "D-1").

He thereafter prepared himself for the bar examination. He took a leave of absence without pay from his job from April
20, 1988 to September 30, 1988 (Exhibit "G") and enrolled at the pre-bar review class in Far Eastern University.
(Exhibits "F" to "F-2"). Having learned of the deficiency he dropped his review class and was not able to take the bar
examination.2

Consequently, respondent sued petitioner for damages alleging that he suffered moral shock, mental anguish, serious anxiety,
besmirched reputation, wounded feelings and sleepless nights when he was not able to take the 1988 bar examinations arising
from the latter's negligence. He prayed for an award of moral and exemplary damages, unrealized income, attorney's fees, and
costs of suit.

In its answer with counterclaim, petitioner denied liability arguing mainly that it never led respondent to believe that he completed
the requirements for a Bachelor of Laws degree when his name was included in the tentative list of graduating students. After
trial, the lower court rendered judgment as follows:

WHEREFORE, in view of the foregoing judgment is hereby rendered in favor of the plaintiff and against the defendant
ordering the latter to pay plaintiff the sum of THIRTY FIVE THOUSAND FOUR HUNDRED SEVENTY PESOS
(P35,470.00) with legal rate of interest from the filing of the complaint until fully paid, the amount of FIVE THOUSAND
PESOS (P5,000.00) as attorney's fees and the cost of suit.

Defendant's counterclaim is, for lack of merit, hereby dismissed.

SO ORDERED.3

which on appeal by both parties was affirmed by the Court of Appeals (CA) with modification. The dispositive portion of the CA
decision reads:

WHEREFORE, in the light of the foregoing, the lower Court's Decision is hereby AFFIRMED with the MODIFICATION
that defendant-appellee, in addition to the sum adjudged by the lower court in favor of plaintiff-appellant, is also
ORDERED to pay plaintiff-appellant the amount of FIFTY THOUSAND (P50,000.00) PESOS for moral damages. Costs
against defendant-appellee.

SO ORDERED.4

Upon the denial of its motion for reconsideration, petitioner UE elevated the case to this Court on a petition for review under Rule
45 of the Rules of Court, arguing that it has no liability to respondent Romeo A. Jader, considering that the proximate and
immediate cause of the alleged damages incurred by the latter arose out of his own negligence in not verifying from the
professor concerned the result of his removal exam.

The petition lacks merit.

When a student is enrolled in any educational or learning institution, a contract of education is entered into between said
institution and the student. The professors, teachers or instructors hired by the school are considered merely as agents and
administrators tasked to perform the school's commitment under the contract. Since the contracting parties are the school and
the student, the latter is not duty-bound to deal with the former's agents, such as the professors with respect to the status or
result of his grades, although nothing prevents either professors or students from sharing with each other such information. The
Court takes judicial notice of the traditional practice in educational institutions wherein the professor directly furnishes his/her
students their grades. It is the contractual obligation of the school to timely inform and furnish sufficient notice and information to
each and every student as to whether he or she had already complied with all the requirements for the conferment of a degree
or whether they would be included among those who will graduate. Although commencement exercises are but a formal
ceremony, it nonetheless is not an ordinary occasion, since such ceremony is the educational institution's way of announcing to
the whole world that the students included in the list of those who will be conferred a degree during the baccalaureate ceremony
have satisfied all the requirements for such degree. Prior or subsequent to the ceremony, the school has the obligation to
promptly inform the student of any problem involving the latter's grades and performance and also most importantly, of the
procedures for remedying the same.

Petitioner, in belatedly informing respondent of the result of the removal examination, particularly at a time when he had already
commenced preparing for the bar exams, cannot be said to have acted in good faith. Absence of good faith must be sufficiently
established for a successful prosecution by the aggrieved party in a suit for abuse of right under Article 19 of the Civil Code.
Good faith connotes an honest intention to abstain from taking undue advantage of another, even though the forms and
technicalities of the law, together with the absence of all information or belief of facts, would render the transaction
unconscientious.5 It is the school that has access to those information and it is only the school that can compel its professors to
act and comply with its rules, regulations and policies with respect to the computation and the prompt submission of grades.
Students do not exercise control, much less influence, over the way an educational institution should run its affairs, particularly in
disciplining its professors and teachers and ensuring their compliance with the school's rules and orders. Being the party that
hired them, it is the school that exercises general supervision and exclusive control over the professors with respect to the
submission of reports involving the students' standing. Exclusive control means that no other person or entity had any control
over the instrumentality which caused the damage or injury.6

The college dean is the senior officer responsible for the operation of an academic program, enforcement of rules and
regulations, and the supervision of faculty and student services. 7 He must see to it that his own professors and teachers,
regardless of their status or position outside of the university, must comply with the rules set by the latter. The negligent act of a
professor who fails to observe the rules of the school, for instance by not promptly submitting a student's grade, is not only
imputable to the professor but is an act of the school, being his employer.

Considering further, that the institution of learning involved herein is a university which is engaged in legal education, it should
have practiced what it inculcates in its students, more specifically the principle of good dealings enshrined in Articles 19 and 20
of the Civil Code which states:

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. 19 was intended to expand the concept of torts by granting adequate legal remedy for the untold number of moral wrongs
which is impossible for human foresight to provide specifically in statutory law. 8 In civilized society, men must be able to assume
that others will do them no intended injury — that others will commit no internal aggressions upon them; that their fellowmen,
when they act affirmatively will do so with due care which the ordinary understanding and moral sense of the community exacts
and that those with whom they deal in the general course of society will act in good faith. The ultimate thing in the theory of
liability is justifiable reliance under conditions of civilized society.9 Schools and professors cannot just take students for granted
and be indifferent to them, for without the latter, the former are useless.

Educational institutions are duty-bound to inform the students of their academic status and not wait for the latter to inquire from
the former. The conscious indifference of a person to the rights or welfare of the person/persons who may be affected by his act
or omission can support a claim for damages.10 Want of care to the conscious disregard of civil obligations coupled with a
conscious knowledge of the cause naturally calculated to produce them would make the erring party liable. 11 Petitioner ought to
have known that time was of the essence in the performance of its obligation to inform respondent of his grade. It cannot feign
ignorance that respondent will not prepare himself for the bar exams since that is precisely the immediate concern after
graduation of an LL.B. graduate. It failed to act seasonably. Petitioner cannot just give out its student's grades at any time
because a student has to comply with certain deadlines set by the Supreme Court on the submission of requirements for taking
the bar. Petitioner's liability arose from its failure to promptly inform respondent of the result of an examination and in misleading
the latter into believing that he had satisfied all requirements for the course. Worth quoting is the following disquisition of the
respondent court:

It is apparent from the testimony of Dean Tiongson that defendant-appellee University had been informed during the
deliberation that the professor in Practice Court I gave plaintiff-appellant a failing grade. Yet, defendant-appellee still did
 not inform plaintiff-appellant of his failure to complete the requirements for the degree nor did they remove his name
from the tentative list of candidates for graduation. Worse, defendant-appellee university, despite the knowledge that
plaintiff-appellant failed in Practice Court I, again included plaintiff-appellant's name in the "tentative list of candidates for
graduation which was prepared after the deliberation and which became the basis for the commencement rites program.
Dean Tiongson reasons out that plaintiff-appellant's name was allowed to remain in the tentative list of candidates for
graduation in the hope that the latter would still be able to remedy the situation in the remaining few days before
graduation day. Dean Tiongson, however, did not explain how plaintiff appellant Jader could have done something to
complete his deficiency if defendant-appellee university did not exert any effort to inform plaintiff-appellant of his failing
grade in Practice Court I.12

Petitioner cannot pass on its blame to the professors to justify its own negligence that led to the delayed relay of information to
respondent. When one of two innocent parties must suffer, he through whose agency the loss occurred must bear it. 13 The
modern tendency is to grant indemnity for damages in cases where there is abuse of right, even when the act is not illicit. 14 If
mere fault or negligence in one's acts can make him liable for damages for injury caused thereby, with more reason should
abuse or bad faith make him liable. A person should be protected only when he acts in the legitimate exercise of his right, that is,
when he acts with prudence and in good faith, but not when he acts with negligence or abuse. 15

However, while petitioner was guilty of negligence and thus liable to respondent for the latter's actual damages, we hold that
respondent should not have been awarded moral damages. We do not agree with the Court of Appeals' findings that respondent
suffered shock, trauma and pain when he was informed that he could not graduate and will not be allowed to take the bar
examinations. At the very least, it behooved on respondent to verify for himself whether he has completed all necessary
requirements to be eligible for the bar examinations. As a senior law student, respondent should have been responsible enough
to ensure that all his affairs, specifically those pertaining to his academic achievement, are in order. Given these considerations,
we fail to see how respondent could have suffered untold embarrassment in attending the graduation rites, enrolling in the bar
review classes and not being able to take the bar exams. If respondent was indeed humiliated by his failure to take the bar, he
brought this upon himself by not verifying if he has satisfied all the requirements including his school records, before preparing
himself for the bar examination. Certainly, taking the bar examinations does not only entail a mental preparation on the subjects
thereof; there are also prerequisites of documentation and submission of requirements which the prospective examinee must
meet.

WHEREFORE, the assailed decision of the Court of Appeals is AFFIRMED with MODIFICATION. Petitioner is ORDERED to
PAY respondent the sum of Thirty-five Thousand Four Hundred Seventy Pesos (P35,470.00), with legal interest of 6% per
annum computed from the date of filing of the complaint until fully paid; the amount of Five Thousand Pesos (P5,000.00) as
attorney's fees; and the costs of the suit. The award of moral damages is DELEIED.1âwphi1.nêt

SO ORDERED.

Davide, Jr., C.J., Kapunan and Pardo, JJ., concur.

Puno, J., took no part.
DIVISION
[ GR No. 222740, Sep 28, 2016 ]
ST. LUKE'S COLLEGE OF MEDICINE-WILLIAM H. QUASHA MEMORIAL FOUNDATION v. SPOUSES MANUEL &
ESMERALDA PEREZ & SPOUSES ERIC & JURISITA QUINTOS +
RESOLUTION
PEREZ, J.:
Assailed in the present petition for review on certiorari is the Decision[1] dated September 30, 2015 and the Resolution[2] dated
February 2, 2016 of the Court of Appeals (CA) in CA-G.R. CV No. 103529, which rulings reversed the Decision dated July 7,
2014[3] of the Regional Trial Court (RTC), Branch 84, Malolos City, Bulacan in Civil Case No. 145-M-2012 and remanded the
case to the trial court for reception of evidence on the amount of damages to be awarded.

As a backgrounder, in 2006, the Commission on Higher Education issued Memorandum Order No. 10, series of 2006 which
required medical students to undergo rotating clinical clerkship in their fourth year. As such, petitioner St. Luke's College of
Medicine (St. Luke's) entered into a Memorandum of Intent with the Municipality of Cabiao, Nueva Ecija for the construction of a
community clinic. The said facility consisted of a six-bed medical facility in the ground floor, and a residential space for the
medical staff in the second floor.

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

In February 2010, St. Luke's sent four (4) of its 4th year medical students to the clinic, namely: plaintiffs-appellants Spouses
Perez's daughter Jessa, plaintiffs-appellants Spouses Quintos' daughter Cecille, Jerillie Ann Murillo (Murillo) and Miguel Rafael
Ramos (Ramos). They were tasked to complete a four-week clerkship rotation at the clinic and like the previous batches, they
were housed in the second floor of the clinic.

According to Ramos, he and his groupmates reported for duty at the Cabiao clinic at approximately 10 o'clock in the morning of
February 8, 2010. When their shift ended at 5 o'clock that afternoon, the group went for a jog and returned to the clinic at around
7 o'clock in the evening. They again went out at 9 o'clock in the evening to buy beverages, cooking oil and other items needed
for their breakfast the next day and went to sleep sometime after midnight. Ramos admitted that one of the beverages they
bought was an alcoholic beverage called The Bar, which consisted of either vodka or gin. He also admitted that only he and
Cecille drank the alcoholic beverage which they mixed with the soda and that they did not consume the whole bottle.

Ramos was awakened sometime between 3 o'clock and 3:30 in the morning of February 9, 2010 when he heard Murillo shouting
from the other side of the room that there was a fire. Ramos immediately ran to the door which led to the living room and when
he opened the same, he saw thick smoke coming from the left portion of the living room where there was a glow. He also felt
extreme heat, prompting him to run to the bathroom to get a pail of water with which he tried to extinguish the fire. The girls, who
had followed him to the bathroom, stayed behind. When Ramos' attempt to put out the fire proved to be futile, he went back to
the bathroom and poured water on the girls in an attempt to alleviate the extreme heat coming from the fire.

According to Ramos, the smoke started to seep through the bathroom door and the group had started shouting for help. After a
considerable amount of time, he heard somebody outside instructing him to get back from the window. When he did so,
somebody broke the window and started to dismantle the iron grills barring the same. By that time, Ramos had started losing
consciousness due to smoke inhalation and only remembered that he was being pulled out of the building through the window.

Unfortunately, the fire resulted in the deaths of the female medical students, including the daughters of plaintiffs-appellants due
to smoke inhalation resulting" to asphyxia.

As a result of the deaths, defendant-appellee St. Luke's compensated the parents of the three deceased students in the amount
of PhP300,000.00 each from insurance proceeds. (Citations omitted)
The Bureau of Fire Protection (BFP) conducted an investigation on the incident, and in a Certification dated April 18, 2011, it
certified that the fire was "purely accidental in nature due to unattended cooking," to wit: [4]

THIS IS TO CERTIFY THAT as appearing on The Blotter Book No. 0304-0287, pages 17 and 18, the two storey Institutional
building owned by Local Government Unit (LGU) Cabiao, Nueva Ecija was partially razed by fire including all the contents of the
second floor that transpired on or about 090245H February 2010. The estimated cost of damage is two Million pesos
(P2,000,000.00) more or less.

Result of investigation conducted by the Investigator on Case of this station, Bureau of Fire Protection, Cabiao, Nueva Ecija,
disclosed that the fire was purely ACCIDENTAL IN NATURE due to UNATTENDED COOKING that occurred at the kitchen of
said floor and no evidence were gathered to show that the fire was intentionally, deliberately or maliciously set.
Respondents had their doubts. Thus:[5]

xxx. xxx, plaintiffs-appellants, requested for a meeting with defendant-appellee Dr. Alejandro Ortigas, Associate Dean for Faculty
and Student Affairs of St. Luke's. During the meeting, plaintiffs-appellants were surprised by the presence of defendants-
appellees Dr. Brigido Carandang, St. Luke's Dean of Medicine, the Municipal Health Officer of Cabiao Dr. De Leon, as well as
Municipal Fire Marshall of Cabiao Baby Boy Esquivel, a Cabiao police officer and its barangay captain.

The officials informed plaintiffs-appellants that the fire was caused by the gas burner left open by the victims which greatly
disturbed plaintiffs-appellants. In a subsequent meeting, they were informed that there was also evidence that the victims were
drinking alcoholic beverages on the night of the fire which plaintiffs-appellants refused to accept.

Convinced that there was a cover-up, plaintiffs-appellants continued to question individual defendants-appellees. Exasperated,
defendant-appellee Dr. Carandang allegedly asked "Ano pa bang gusto ninyo sa amin? Nakiramay na kami."
Offended and still unconvinced, respondent Spouses Manuel and Esmeralda Perez, the parents of Jessa, and respondent
Spouses Eric and Jurisita Quintos, the parents of Cecille, sought the help of the National Bureau of Investigation (NBI). In its
Resolution dated August 3, 2010, the existence of which is expressly admitted by petitioners, having quoted the contents [6] and
having attached a copy thereof to the present petition, [7] the NBI declared that the construction of the Cabiao Community Clinic
building was in violation of the provisions of Republic Act No. 9514 (R.A. No. 9514) or the Revised Fire Code of the Philippines,
that the cause of the fire was due to faulty electrical wiring, and that St. Luke's negligence is criminal in nature. The pertinent
parts of the said Resolution reads:[8]

xxxx

2. The building structure of Cabiao Community Center

The Cabiao Community Clinic/Center is a two-storey concrete building. The ground floor is used as the municipality's lie-in clinic
or hospital during day time. The students and in particular the victims use this facility together with the. medical complement of
the municipality for their community medical service.

On the 2nd floor was the office of Dr. LEON DE LEON, Cabiao Municipal Health Officer, adjacent was a storage room for office
and medical supplies and documents, the bedrooms for the medical students rendering community service, a dining area, a
kitchen, and the living-room. The second floor, it may be said, is virtually dedicated for the board and lodging of the students
while on mission. These rooms and areas are separated from each other by wood panels made of plywood including the wall in
which the gas stove was located. All the windows at the second floor are also covered by permanent iron grills. There are
no fire exits, fire alarms, fire extinguishers, sprinklers, emergency lights.

The community center is a virtual fire/death trap. During night time, medical students were left alone inside the 2nd
floor with the main gate locked from the outside and with no apparent signs of fire alarms, fire sprinklers, fire exit plan,
emergency lights, provisions of confining the fire to its source, among others, for the occupants fire safety and
protection system. They were on their own at the second floor, without anyone (maid or security guard) to attend to their needs
while the ground floors and the adjoining building were uninhabited.

3. The electrical system of Cabiao Community Clinic;

Engr. DAVID R. AOANAN, Chief Electrical Section of the (sic) and member of the NBI investigating team observed that the
facility has a main circuit breaker and the two distribution panels, located at the ground floor, just above the comfort room of the
2nd floor. The main breaker has a 500 amp capacity while the two distribution panels serving the 1 st floor and the 2nd floor has
200 amp capacity, each, as against the main electrical service wire with the size 14 mm.

The ratio between the capacity of the circuit breaker and the electrical service wire is out of proportion and became
electrically insensitive to overload and wire short circuits; thereby negating the very purpose the circuit breaker was
designed.

The size of service wire is Small, suitable only for lighting purposes and not to supply two buildings, dedicated for public use. Six
years of use in overload capacity would have worn out the wire and its strength and vitality, hence it will readily
overheat, notwithstanding at the time short circuits, only few bulbs were in use.

The electrical meter used is appropriate only to residential units and not to service the two buildings intended for public which
are [equipped] with modern medical equipment; the old NFA and the [Cabiao] Community Clinic.

Both live service wire and secondary electrical wires were bundled together inside the same tube. At the 2nd floor, visible signs
of cut wires were found inside a tube, including the service wire as it pass through going down to the main panel board
and several cut wires of the secondary breaker going to the second floor for power distribution.
The main and secondary panel boards were wrongly situated at the ground floor, above which is the location of a
comfort room, where water could easily slip to the panel boards.

The installation of the secondary panel board at the ground floor distributing power to the 2 nd floor defeats its purpose,
considering that if electrical trouble happens at the 2nd floor one has to go to the 1st floor to shut off the power.

4. The construction of the Cabiao Community Center building was in violation of the provision of Republic Act No. 9514 (Revised
Fire Code of the Philippines)

Owners, occupants or administrator of buildings or structures are required to incorporate and provide fire safety construction,
protective and warning systems. Investigation shows that a) there were no fire protection features such as sprinkler systems,
hose boxes, hose reels or standpipe systems and other firefighting equipment; fire alarm systems; b) no fire exit, fire exit plan for
each floor of the building showing the routes from each other [sic] room to appropriate exits, displayed prominently on the door
of such room; c) no properly marked and lighted exits with provision for emergency light to adequately illuminate exit ways in
case of power failure, and d) no provisions for confining the fire at its source such as fire resistive floors and walls.

5. The Cabiao Bureau of Fire Protection failed to perform its mandate pursuant to RA 9514.

Under the Fire Code, the Bureau of Fire Protection is required to conduct fire safety inspections as pre-requisite to the grant of
licenses and permits for the use and occupancy of buildings, structures, facilities and their premises including the installation of
fire protections and fire safety equipment and electrical systems in any building structure or facility; and the storage of explosives
or combustible, flammable, toxic and other hazardous materials.

The BFP is likewise responsible for designating fire inspectors who shall inspect every building at least once a year, and every
time the owner, administrator or occupant [renews] its business permit or permit to occupy; to issue a business permit or permit
to operate only after securing a Fire Safety Inspection Certification (FSIC); require the building owner occupant to submit plans
and specifications and other pertinent documents of building/structure in order to ensure compliance of applicable codes and
standards and issue a written notice to the owner and/or contractor to stop work on portion of any work due to absence or in
violation of approved plans and specifications; to inspect at reasonable time, any building, structure or premises and order the
owner/occupant to remove hazardous materials and/or stop operation if the standards are not met; to declare and summarily
abate hazardous conditions of the buildings or structures and/or declare the same as fire hazards.

It is worthy to note that despite the long period of time from the occurrence of the fire until the termination of this investigation,
the Cabiao BFP headed by FO3 ESQUIVEL has yet to submit its report and findings. However, inasmuch as FO3 ESQUIVEL
has bungled the investigation of the fire by removing items from the scene of the fire and his failure to explain the
disappearance of other electrical debris, the opening and enlargement of the iron grill where the sole survivor passed,
the back door broken, and the non-recording of the investigations, FO3 Esquivel's action and behaviors are highly
suspect of a massive cover up of the real cause of the fire.

xxxx

7. St. Luke's negligence is criminal in nature.

St. Luke's College of Medicine - William H. Quasha Memorial, Inc., being the owner and operator of the Cabiao Community
Clinic is not without liability for the fate of the fire victims. As a learning institution, which sends out its students to rural
areas to comply with its curriculum requirement, St. Luke's has the duty and responsibility to see to it that the
premises to where it sends its students are safe. It is significant to stress that the Cabiao Community Clinic was established
by the Municipality of Cabiao and the St. Luke's College of Medicine in line with the latter's expansion of its Community Medicine
undertaking to the rural areas in order to train its students in health promotion and disease prevention as well as to provide
medical service to deserving population and to undertake clinical research on various health practices.

The victims were sent there as part of their community medicine module in the curriculum and their assignments were
determined by the officials of the College of Medicine.

8. The origin of fire.

The Cabiao BFP has manifested its prejudice and bias and thus, cannot be an independent, reliable and credible
investigator of this fire incident. They could not even entertain any theory, other than the gas burner, because in doing so
would place themselves in jeopardy. They even resorted to tampering of premises by removing all electrical wire debris,
thinking that in its absence, fire caused by short circuits cannot be proven.

It is highly probable that the origin of fire is electrical based on the Electrical Report No. 04-10-001 submitted by Engr.
DAVID R. AOANAN, Chief, Electrical Section, NBI because of the following.
 i. Presence of thick black smoke that indicates heat caused by short-circuit

ii. Explosion or tripping off of the transformer, then a black out - showing therefore that the circuit breaker did not trip off

iii. Inspection of the main circuit breaker and the secondary breakers show that these did not trip off

iv. Presence of short circuited wires located at the 2 nd floor, where buddle wires were found

v. Presence of numerous spliced wires or jumped wires in three different convenient outlets

vi. Mainboard panel is mismatched with the service wire

vii. Other defective wirings

It is a well done theory that the cause of the fire was due to faulty electrical wiring with two reasons to support it, first is
the physical manifestation as mentioned by Engr. DAVE AOANAN who conducted evaluation/investigation on what is
left on the building of the Cabiao Community Clinic; second is the personal experience of MIGUEL RAFAEL RAMOS y
DAVID the lone survivor of the incident [who] narrated what he perceived during last hour before he was
rescued. MIGUEL['s] narration contradict the theories laid down by Fire Marshall BABY BOY ESQUIVEL that the fire was by the
negligence of the victims [whom] he suspect[s] to have left [burning a] gas stove. MIGUEL'S narration specifically pointed out
that the fire was primarily coming from the living room and not at the kitchen which is directly in front of their door way.
(Emphasis supplied.)
Respondents then filed a Complaint for damages against petitioners St. Luke's College of Medicine-William H. Quasha Memorial
Foundation, Dean of Medicine Brigido L. Carandang, and Associate Dean for Faculty and Student Affairs Alejandro P. Ortigas,
claiming that their negligence caused the deaths of respondents' daughters. Respondents maintained that, as a learning
institution which sends out its medical students to rural areas to comply with its curriculum requirement, St. Luke's has the
contractual duty and legal responsibility to see to it that the premises to where it sends its students are safe and that, in the case
at bar, St. Luke's refused to recognize its obligations/liabilities. [9] Respondents thus prayed as follows:[10]

WHEREFORE, premises considered, it is respectfully prayed that judgment be rendered in favor of plaintiffs -

1. Finding the defendants negligent and liable under their contractual and legal obligations to Jessa and Cecille;

2. Directing defendants to pay plaintiffs, jointly and severally, actual, moral and exemplary damages; and

3. Ordering defendants to pay the cost of suits and attorney's fees.

Plaintiffs further pray for such other reliefs as the Honorable Court may deem just and equitable under the premises.
The RTC dismissed the complaint for lack of merit.[11] It held that the Cabiao Community Clinic was not a fire trap as there were
two (2) fire exits, and that respondents failed to present any report or finding by a competent authority that the said Clinic was
not a safe and secure place for the conduct of St. Luke's clerkship program. The RTC did not take into consideration the NBI
Report as it was allegedly not presented. [12]

The RTC further held that the Clinic is owned by the Municipality of Cabiao, and that the latter and/or its responsible officials
should have been impleaded as indispensable parties.[13]

The RTC summarized its findings in this manner:[14]

Albeit the Court is saddened by what happened with the untimely death of Perez and Quintos who are both very bright with
promising future in the field of medicine, it cannot however close its eyes on the evidence submitted before it by placing the
blame on the cause of their death[s] to the defendants just to put the fault on anybody in order to appease their grieving love[d]
ones. For in the mind of the Court, the omission of the defendants to secure a copy of the fire safety license of the Clinic or verify
if it has one prior to its construction before allowing their senior medical students to occupy and reside therein is not per se a
negligent act. Neither is the failure of the defendants to orient their senior medical students, who obviously are of legal ages
already such as the deceased, on how to take the necessary measures for their safety and security before retiring to sleep in the
night considered negligent. Likewise, the failure of the dialogue between the parties is not a legitimate ground to declare the
defendants negligent. Put differently, the Court is not persuaded that there is basis or justification to adjudge the defendants
negligent for the accidental death of Perez and Quintos.
Upon appeal, the CA reversed the RTC Decision and remanded the case to the RTC for reception of evidence on the amount of
damages to be awarded.[15] Addressing the .preliminary issues, the CA held that the Municipality of Cabiao was not an
indispensable party as the Complaint was one for damages based on the allegations in the enrollment contract. It explained
that:[16]
While there was indeed an allegation of St. Luke's ownership of the clinic, bulk of the arguments in the complaint were based on
St. Luke's duty to ensure its students' safety based on its obligation as a school. Not being contractually obligated to keep
plaintiffs-appellants' children safe from any risk as a result of school-sanctioned activities, the Municipality of Cabiao cannot be
considered an indispensable party to the action as it was not a participant in the contract of enrollment.
Moreover, the CA held that although schools cannot be insurers of its students against all risks, in the case at bar, the safety of
the victims was within the reach of petitioners and the hazard of a fire was not unforeseeable.[17] Also, while the fire was beyond
the control of petitioners, their decision to house their students in a place where there are no means of escape in case of such
an emergency shows a blatant disregard for the students' welfare.[18]

The CA elucidated as follows:[19]

The testimonies of Dr. Ortigas, Dr. Carandang and Dr. Macabulos all show a lack of effort on their part to thoroughly inspect the
conditions of the building in relation to the safety of their enrolled medical student-clerks.

According to Dr. Ortigas and Dr. Macabulos,[20] they considered the doors leading out from the pantry and the bedrooms as fire
exits. However, as doctors who presumably have a wider degree of foresight than most, they failed to consider that a fire might
break out in areas which would block these doors that are merely ordinary exits. Further, Dr. Ortigas himself testified that permits
are not part of their consideration for safety and that they do not specifically look for the same [xxx.]

xxxx

Dr. Ortigas admitted that, as a doctor, he was not concerned with the permits issued regarding the construction and safety of the
building. However, at the time he conducted the inspections of the clinic, he was also the Associate Dean of St. Luke's College
of Medicine with the duty to ensure that the building was safe for the security of the enrolled students of St. Luke's College of
Medicine who would be assigned to the clinic during their clerkship and he admittedly did not consider the same.

As Associate Dean for Student Affairs, it would be reasonable to expect Dr. Ortigas to show concern for the safety and
security of the students enrolled in the institution thus, ensure that the premises they were to reside in would be properly
equipped in case of fires and other calamities. He himself stated that his position as such put him "in charge of student and
student affairs, xxx and in general, the non-academic matters involving students and the faculty." Consequently, it is safe to
conclude that his task included the safety and welfare of the students enrolled at St. Luke's College of Medicine, one which he
miserably failed to discharge.

Defendants-appellees also made a big deal out of the procedure of asking feedback from students which led to the assumption
that the clinic was safe and habitable. However, it must be remembered that the students that gave the feedback were more
concerned with passing their course and presumably trusted that the school would not send them to a location which it has
independently determined to be unsafe.

xxxx

In relation, defendants-appellees defend their judgment to send plaintiffs-appellants' daughters to the community clinic by
contending that there has been no untoward incident since the program began in 2004. xxx.

xxxx

The same argument also runs contrary to defendants-appellees' acceptance of the construction of iron grills on the second floor
windows of the clinic. According to Dr. Ortigas, the same were constructed in order to prevent people from using the same to
enter the building and not designed to prevent egress therefrom. Dr. Ortigas was specificallly questioned if there were prior
incidents of intrusion into the clinic to which he replied in the negative. If defendants-appellees' logic of "no untoward incident
has happened" is to be applied then, the presence of the grills was unnecessary in the same way that they found the inspection
of fire safety permits to be unnecessary. It baffles the Court, therefore, that defendants-appellees would accept the precaution
against an admittedly unlikely intrusion but ignore any safety measures against a fire which was a great possibility given that the
clinic had flammable equipment such as a gas burner for cooking. (Citations omitted)
Hence, the present petition for review on certiorari alleging that the CA committed reversible error when it: (a) held that the
Municipality of Cabiao was not an indispensable party,[21] (b) disregarded the findings of the BFP that the fire was purely
accidental and caused by unattended cooking,[22] and (c) ruled that petitioners were negligent.[23]

We deny the petition.

A perusal of the Complaint readily shows that respondents base their cause of action on petitioners' breach of the contractual
obligation, as an educational institution, of ensuring that their students, in the performance of a required school activity, would be
safe and secure. The Municipality of Cabiao, not being a party to said enrollment contract, is not an indispensable party to the
case.
An indispensable party is defined by the Rules of Court as a party-in-interest without whom no final determination can be had of
an action.[24] In the present case, respondents premise petitioners' liability on their contractual obligation to their students and,
certainly, complete relief and a final judgment can be arrived at by weighing the claims and defenses of petitioners and
respondents, without need of evaluating the claims and defenses of the Municipality of Cabiao. If at all, the Municipality of
Cabiao is a necessary party[25] whose non-inclusion in the case at bar shall not prevent the court from proceeding with the
action.

Indeed, the present case is one between a school and its students, with their relationship being based on the enrollment
contracts. In the illuminating case of PSBA, et al. v. CA, et al.,[26] the Court had the opportunity to lay down the principle that:

When an academic institution accepts students for enrollment, there is established a contract between them, resulting in bilateral
obligations which both parties are bound to comply with. For its part, the school undertakes to provide the student with an
education that would presumably suffice to equip him with the necessary tools and skills to pursue higher education or a
profession. On the other hand, the student covenants to abide by the school's academic requirements and observe its rules and
regulations.

Institutions of learning must also meet the implicit or "built-in" obligation of providing their students with an atmosphere that
promotes or assists in attaining its primary undertaking of imparting knowledge. Certainly, no student can absorb the intricacies
of physics or higher mathematics or explore the realm of the arts and other sciences when bullets are flying or grenades
exploding in the air or where there looms around the school premises a constant threat to life and limb. Necessarily, the school
must ensure that adequate steps are taken to maintain peace and order within the campus premises and to prevent the
breakdown thereof.
Indubitably, institutions of learning have the "built-in" obligation of providing a conducive atmosphere for learning, an atmosphere
where there are no constant threats to life and limb, and one where peace and order are maintained.

In the case at bar, the Cabiao Community Clinic is to be considered as part of the campus premises of St. Luke's. In the course
description of the clerkship program in preventive and community medicine, it is stated that the Cabiao Community Clinic serves
as the base operation of the clerkship program.[27] As such, petitioner had the same obligation to their students, even though
they were stationed in the Cabiao Community Clinic, and it was incumbent upon petitioners to ensure that said Clinic was
conducive for learning, that it had no constant threats to life and limb, and that peace and order was maintained thereat. After all,
although away from the main campus of St. Luke's, the students were still under the same protective and supervisory custody of
petitioners as the ones detailed in the main campus.

In the performance of its contractual and inherent obligations, the Court is mindful of the attendant difficulties on the part of
institutions of learning, and the Court recognizes that the latter cannot be an insurer of its students against all risks. Thus, as
also laid out in the PSBAcase, "the school may still avoid liability by proving that the breach of its contractual obligation to the
students was not due to its negligence, here statutorily defined to be the 'omission of that degree of diligence which is required
by the nature of the obligation and corresponding to the circumstances of persons, time and place."[28]

Our next query, then, is, in relation to the fire incident, did petitioners commit a breach of contract through negligence?

A review of the records compels the Court to answer in the affirmative.

In Mendoza, et al. v. Sps. Gomez,[29] we defined negligence as "the failure to observe for the protection of the interests of
another person, that degree of care, precaution and vigilance which the circumstances justly demand, whereby such other
person suffers injury."

In Gaid v. People,[30] we enumerated the elements of simple negligence as follows: (1) that there is lack of precaution on the part
of the offender, and (2) that the damage impending to be caused is not immediate or the danger is not clearly manifest. We
explained that:

The standard test in determining whether a person is negligent in doing an act whereby injury or damage results to the person or
property of another is this: could a prudent man, in the position of the person to whom negligence is attributed, foresee harm to
the person injured as a reasonable consequence of the course actually pursued? If so, the law imposes a duty on the actor to
refrain from that course or to take precautions to guard against its mischievous results, and the failure to do so constitutes
negligence. Reasonable foresight of harm, followed by the ignoring of the admonition born of this provision, is always necessary
before negligence can be held to exist.[31]
In the case at bar, it is well to remember that the victims were in the Cabiao Community Clinic because it was a requirement of
petitioners. The students were complying with an obligation under the enrollment contract — they were rendering medical
services in a community center as required by petitioners. It was thus incumbent upon petitioners to comply with their own
obligations under the enrollment contract - to ensure that the community center where they would designate their students is
safe and secure, among others.
Petitioners failed to take the necessary precautions to guard their students against foreseeable harm. As correctly found by the
CA, petitioners were remiss in inspecting the premises of the Cabiao Community Clinic and in ensuring that the necessary
permits were in order. These precautions could have minimized the risk to the safety of the victims. Indeed, the CA had basis in
making the following pronouncement:[32]

In the instant case, as previously emphasized, defendants-appellees were aware that its medical students were residing at the
second floor of the clinic. At the very least, during inspection, they should have thoroughly inspected the building's physical
appearance and the documents pertinent to the premises to make sure that the same minimized the risk to the safety of the
students. There is no record that any inquiry on the condition of the premises was even made by defendants-appellees prior to
the implementation of the program. In addition to such failure, defendants-appellees would have this Court believe that their
participation in the clinic was limited to providing the same with medical personnel without considering that such personnel also
included its students which St. Luke's was obliged to protect from unnecessary danger.
The petitioners were obviously negligent in detailing their students to a virtual fire trap. As found by the NBI, the Clinic was
unsafe and was constructed in violation of numerous provisions of the Revised Fire Code of the Philippines. It had no
emergency facilities, no fire exits, and had no permits or clearances from the appropriate government offices.

Petitioners additionally aver that the Clinic was built under the direction, supervision, management and control of the Municipality
of Cabiao,[33] and that it ensured that there was an agreement for the Municipality of Cabiao to provide 24-hour security to the
Clinic.[34]

Petitioners, however, cannot escape liability based on these arguments. As held in Saludaga v. FEU, et al.,[35] a learning
institution should not be allowed to completely relinquish or abdicate matters of safety and security to a third party as to do so
would result to contracting away its inherent obligation of ensuring a safe learning environment for its students.

In Saludaga, the Court chastised therein respondent Far Eastern University (FEU) for its total reliance on a security agency as to
the qualifications of its security guards, viz:[36]

Respondents also failed to show that they undertook steps to ascertain and confirm that the security guards assigned to them
actually possess the qualifications required in the Security Service Agreement. It was not proven that they examined the
clearances, psychiatric test results, 201 files, and other vital documents enumerated in its contract with Galaxy. Total reliance on
the security agency about these matters or failure to check the papers stating the qualifications of the guards is negligence on
the part of respondents. A learning institution should not be allowed to completely relinquish or abdicate security matters in its
premises to the security agency it hired. To do so would result to contracting away its inherent obligation to ensure a safe
learning environment for its students.
Similarly, we cannot turn; a blind eye on petitioners' total reliance on the Municipality of Cabiao in ensuring the safety and
security of their students. The enrollment contract is between petitioners and the victims, and petitioners cannot abdicate' on
their contractual obligation to provide their students a safe learning environment, nor can it pass or contract away such obligation
to a third party.

Moreover, as to the stipulation of 24-hour security in the Clinic, petitioners failed to present evidence that this stipulation was
actually enforced or that they took measures to ensure that it was enforced. This, once more, shows petitioners' propensity of
relying on third parties in carrying out its obligations to its students.

It is settled that in culpa contractual, the mere proof of the existence of the contract and the failure, of its compliance
justify, prima facie, a corresponding right of relief.[37] In Gilat Satellite Networks, Ltd. v. UCPB General Insurance Co., Inc.,[38] the
Court expounded:

xxx. The law, recognizing the obligatory force of contracts, will not permit a party to be set free from liability for any kind of
misperformance of the contractual undertaking or a contravention of the tenor thereof. A breach upon the contract confers upon
the injured party a valid cause for recovering that which may have been lost or suffered. The remedy serves to preserve the
interests of the promissee that may include his "expectation interest," which is his interest in having the benefit of his bargain by
being put in as good a position as he would have been in had the contract been performed, or his "reliance interest," which is his
interest in being reimbursed for loss caused by reliance on the contract by being put in as good a position as he would have
been in had the contract not been made; or his "restitution interest," which is his interest in having restored to him any benefit
that he has conferred on the other party. Indeed, agreements can accomplish little, either for their makers or for society, unless
they are made the basis for action. The effect of every infraction is to create a new duty, that is, to make RECOMPENSE to the
one who has been injured by the failure of another to observe his contractual obligation unless he can show extenuating
circumstances, like proof of his exercise of due diligence x x x or of the attendance of fortuitous event, to excuse him from his
ensuing liability. xxx. (Emphasis omitted)
In the case at bar, it was amply shown that petitioners and the victims were bound by the enrollment contracts, and that
petitioners were negligent in complying with their obligation under the said contracts to ensure the safety and security of their
students. For this contractual breach, petitioners should be held liable.
WHEREFORE, in view of the foregoing, the Court resolves to DENY the petition for review on certiorari and AFFIRM the Court
of Appeals' Decision and Resolution.

SO ORDERED.

Velasco, Jr. (Chairperson), Peralta, and Jardeleza, JJ., concur.

Reyes, J., on leave.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-39999 May 31, 1984

ROY PADILLA, FILOMENO GALDONES, ISMAEL GONZALGO and JOSE FARLEY BEDENIA, petitioners,
vs.
COURT OF APPEALS, respondent.

Sisenando Villaluz, Sr. for petitioners.

The Solicitor General for respondent.

GUTIERREZ, JR., J.:

This is a petition for review on certiorari of a Court of Appeals' decision which reversed the trial court's judgment of conviction
and acquitted the petitioners of the crime of grave coercion on the ground of reasonable doubt but inspite of the acquittal
ordered them to pay jointly and severally the amount of P9,000.00 to the complainants as actual damages.

The petitioners were charged under the following information:

The undersigned Fiscal accused ROY PADILLA, FILOMENO GALDONES, PEPITO BEDENIA, YOLLY RICO,
DAVID BERMUNDO, VILLANOAC, ROBERTO ROSALES, VILLANIA, ROMEO GARRIDO, JOSE ORTEGA,
JR., RICARDO CELESTINO, REALINGO alias "KAMLON", JOHN DOE alias TATO, and FOURTEEN (14)
RICARDO DOES of the crime of GRAVE COERCION, committed as follows:

That on or about February 8, 1964 at around 9:00 o'clock in the morning, in the municipality of Jose
Panganiban, province of Camarines Norte, Philippines, and within the jurisdiction of this Honorable Court, the
above- named accused, Roy Padilla, Filomeno Galdones, Pepito Bedenia, Yolly Rico, David Bermundo,
Villanoac, Roberto Rosales, Villania, Romeo Garrido, Jose Ortega, Jr., Ricardo Celestino, Realingo alias
Kamlon, John Doe alias Tato, and Fourteen Richard Does, by confederating and mutually helping one another,
and acting without any authority of law, did then and there wilfully, unlawfully, and feloniously, by means of
threats, force and violence prevent Antonio Vergara and his family to close their stall located at the Public
Market, Building No. 3, Jose Panganiban, Camarines Norte, and by subsequently forcibly opening the door of
said stall and thereafter brutally demolishing and destroying said stall and the furnitures therein by axes and
other massive instruments, and carrying away the goods, wares and merchandise, to the damage and prejudice
of the said Antonio Vergara and his family in the amount of P30,000.00 in concept of actual or compensatory
and moral damages, and further the sum of P20,000.00 as exemplary damages.

That in committing the offense, the accused took advantage of their public positions: Roy Padilla, being the
incumbent municipal mayor, and the rest of the accused being policemen, except Ricardo Celestino who is a
civilian, all of Jose Panganiban, Camarines Norte, and that it was committed with evident premeditation.

The Court of First Instance of Camarines Norte, Tenth Judicial District rendered a decision, the dispositive portion of which
states that:

IN VIEW OF THE FOREGOING, the Court finds the accused Roy Padilla, Filomeno Galdonez, Ismael Gonzalgo and Jose
Parley Bedenia guilty beyond reasonable doubt of the crime of grave coercion, and hereby imposes upon them to suffer an
imprisonment of FIVE (5) months and One (1) day; to pay a fine of P500.00 each; to pay actual and compensatory damages in
the amount of P10,000.00; moral damages in the amount of P30,000.00; and another P10,000.00 for exemplary damages,
jointly and severally, and all the accessory penalties provided for by law; and to pay the proportionate costs of this proceedings.

The accused Federico Realingo alias 'Kamlon', David Bermundo, Christopher Villanoac, Godofredo Villania,
Romeo Garrido, Roberto Rosales, Ricardo Celestino and Jose Ortega, are hereby ordered acquitted on grounds
of reasonable doubt for their criminal participation in the crime charged.
The petitioners appealed the judgment of conviction to the Court of Appeals. They contended that the trial court's finding of
grave coercion was not supported by the evidence. According to the petitioners, the town mayor had the power to order the
clearance of market premises and the removal of the complainants' stall because the municipality had enacted municipal
ordinances pursuant to which the market stall was a nuisance per se. The petitioners stated that the lower court erred in finding
that the demolition of the complainants' stall was a violation of the very directive of the petitioner Mayor which gave the stall
owners seventy two (72) hours to vacate the market premises. The petitioners questioned the imposition of prison terms of five
months and one day and of accessory penalties provided by law. They also challenged the order to pay fines of P500.00 each,
P10,000.00 actual and compensatory damages, P30,000.00 moral damages, P10,000.00 exemplary damages, and the costs of
the suit.

The dispositive portion of the decision of the respondent Court of Appeals states:

WHEREFORE, we hereby modify the judgment appealed from in the sense that the appellants are acquitted on
ground of reasonable doubt. but they are ordered to pay jointly and severally to complainants the amount of
P9,600.00, as actual damages.

The petitioners filed a motion for reconsideration contending that the acquittal of the defendants-appellants as to criminal liability
results in the extinction of their civil liability. The Court of Appeals denied the motion holding that:

xxx xxx xxx

... appellants' acquittal was based on reasonable doubt whether the crime of coercion was committed, not on
facts that no unlawful act was committed; as their taking the law into their hands, destructing (sic) complainants'
properties is unlawful, and, as evidence on record established that complainants suffered actual damages, the
imposition of actual damages is correct.

Consequently, the petitioners filed this special civil action, contending that:

THE COURT OF APPEALS COMMITTED A GRAVE ERROR OF LAW OR GRAVELY ABUSED ITS
DISCRETION IN IMPOSING UPON PETITIONERS PAYMENT OF DAMAGES TO COMPLAINANTS AFTER
ACQUITTING PETITIONERS OF THE CRIME CHARGED FROM WHICH SAID LIABILITY AROSE.

II

THE COURT OF APPEALS ERRED IN HOLDING IN ITS RESOLUTION DATED DECEMBER 26, 1974 THAT
SINCE APPELLANTS' ACQUITTAL WAS BASED ON REASONABLE DOUBT, NOT ON FACTS THAT NO
UNLAWFUL ACT WAS COMMITTED, THE IMPOSITION OF ACTUAL DAMAGES IS CORRECT.

III

THE COURT OF APPEALS COMMITTED A LEGAL INCONSISTENCY, IF NOT PLAIN JUDICIAL ERROR, IN
HOLDING IN ITS APPEALED RESOLUTION THAT PETITIONERS COMMITTED AN UNLAWFUL ACT, THAT
IS TAKING THE LAW INTO THEIR HANDS, DESTRUCTING (sic) 'COMPLAINANTS' PROPERTIES', AFTER
HOLDING IN ITS MAIN DECISION OF NOVEMBER 6,1974 THAT THE ACTS FOR WHICH THEY WERE
CHARGED DID NOT CONSTITUTE GRAVE COERCION AND THEY WERE NOT CHARGED OF ANY OTHER
CRIME.

IV

THE COURT OF APPEALS ERRED IN ORDERING THE PETITIONERS HEREIN, APPELLANTS IN CA-G.R.
NO. 13456CR, JOINTLY AND SEVERALLY, TO PAY COMPLAINANTS P9,600.00 IN SUPPOSED ACTUAL
DAMAGES.

The issue posed in the instant proceeding is whether or not the respondent court committed a reversible error in requiring the
petitioners to pay civil indemnity to the complainants after acquitting them from the criminal charge.

Petitioners maintain the view that where the civil liability which is included in the criminal action is that arising from and as a
consequence of the criminal act, and the defendant was acquitted in the criminal case, (no civil liability arising from the criminal
case), no civil liability arising from the criminal charge could be imposed upon him. They cite precedents to the effect that the
liability of the defendant for the return of the amount received by him may not be enforced in the criminal case but must be
raised in a separate civil action for the recovery of the said amount (People v. Pantig, 97 Phil. 748; following the doctrine laid
down in Manila Railroad Co. v. Honorable Rodolfo Baltazar, 49 O.G. 3874; Pueblo contra Abellera, 69 Phil. 623; People v.
Maniago 69 Phil. 496; People v. Miranda, 5 SCRA 1067; Aldaba v. Elepafio 116 Phil. 457). In the case before us, the petitioners
were acquitted not because they did not commit the acts stated in the charge against them. There is no dispute over the forcible
opening of the market stall, its demolition with axes and other instruments, and the carting away of the merchandize. The
petitioners were acquitted because these acts were denominated coercion when they properly constituted some other offense
such as threat or malicious mischief.

The respondent Court of Appeals stated in its decision:

For a complaint to prosper under the foregoing provision, the violence must be employed against the person,
not against property as what happened in the case at bar. ...

xxx xxx xxx

The next problem is: May the accused be convicted of an offense other than coercion?

From all appearances, they should have been prosecuted either for threats or malicious mischief. But the law
does not allow us to render judgment of conviction for either of these offenses for the reason that they were not
indicted for, these offenses. The information under which they were prosecuted does not allege the elements of
either threats or malicious mischief. Although the information mentions that the act was by means of threats', it
does not allege the particular threat made. An accused person is entitled to be informed of the nature of the acts
imputed to him before he can be made to enter into trial upon a valid information.

We rule that the crime of grave coercion has not been proved in accordance with law.

While appellants are entitled to acquittal they nevertheless are liable for the actual damages suffered by the
complainants by reason of the demolition of the stall and loss of some of their properties. The extinction of the
penal action does not carry with it that of the civil, unless the extinction proceeds from a declaration in a final
judgment that the fact from which the civil might arise did not exist. (Rule 111, Sec. 3 (c), Rev. Rules of Court;
Laperal v. Aliza, 51 OG.R. 1311, People v. Velez, 44 OG. 1811). In the instant case, the fact from which the civil
might arise, namely, the demolition of the stall and loss of the properties contained therein; exists, and this is not
denied by the accused. And since there is no showing that the complainants have reserved or waived their right
to institute a separate civil action, the civil aspect therein is deemed instituted with the criminal action. (Rule 111,
Sec. 1, Rev. Rules of Court).

xxx xxx xxx

Section 1 of Rule 111 of the Rules of Court states the fundamental proposition that when a criminal action is instituted, the civil
action for recovery of civil liability arising from the offense charged is impliedly instituted with it. There is no implied institution
when the offended party expressly waives the civil action or reserves his right to institute it separately. (Morte Sr. v. Alvizo, Jr.,
101 SCRA 221).

The extinction of the civil action by reason of acquittal in the criminal case refers exclusively to civil liability ex delicto founded on
Article 100 of the Revised Penal Code. (Elcano v. Hill, 77 SCRA 98; Virata v. Ochoa, 81 SCRA 472). In other words, the civil
liability which is also extinguished upon acquittal of the accused is the civil liability arising from the act as a crime.

As easily as 1942, the Supreme Court speaking through Justice Jorge Bocobo in Barredo v. Garcia, et at. 73 Phil. 607 laid down
the rule that the same punishable act or omission can create two kinds of civil liabilities against the accused and, where provided
by law, his employer. 'There is the civil liability arising from the act as a crime and the liability arising from the same act as
a quasi-delict. Either one of these two types of civil liability may be enforced against the accused, However, the offended party
cannot recover damages under both types of liability. For instance, in cases of criminal negligence or crimes due to reckless
imprudence, Article 2177 of the Civil Code provides:

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

Section 3 (c) of Rule 111 specifically provides that:

 Sec. 3. Other civil actions arising from offenses. — In all cases not included in the preceding section the
following rules shall be observed:

xxx xxx xxx

xxx xxx xxx

(c) Extinction of the penal action does not carry with it extinction of the civil, unless the extinction proceeds from
a declaration in a final judgment that the fact from which the civil might arise did not exist. In other cases, the
person entitled to the civil action may institute it in the Jurisdiction and in the manner provided by law against the
person who may be liable for restitution of the thing and reparation or indemnity for the damage suffered.

The judgment of acquittal extinguishes the liability of the accused for damages only when it includes a declaration that the facts
from which the civil might arise did not exist. Thus, the civil liability is not extinguished by acquittal where the acquittal is based
on reasonable doubt (PNB v. Catipon, 98 Phil. 286) as only preponderance of evidence is required in civil cases; where the court
expressly declares that the liability of the accused is not criminal but only civil in nature (De Guzman v. Alvia, 96 Phil. 558;
People v. Pantig, supra) as, for instance, in the felonies of estafa, theft, and malicious mischief committed by certain relatives
who thereby incur only civil liability (See Art. 332, Revised Penal Code); and, where the civil liability does not arise from or is not
based upon the criminal act of which the accused was acquitted (Castro v. Collector of Internal Revenue, 4 SCRA 1093; See
Regalado, Remedial Law Compendium, 1983 ed., p. 623). Article 29 of the Civil Code also provides that:

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.

If in a criminal case the judgment of acquittal is based upon reasonable doubt, the court shall so declare. In the
absence of any declaration to that effect, it may be inferred from the text of the decision whether or not the
acquittal is due to that ground.

More recently, we held that the acquittal of the defendant in the criminal case would not constitute an obstacle to the filing of a
civil case based on the same acts which led to the criminal prosecution:

... The finding by the respondent court that he spent said sum for and in the interest of the Capiz Agricultural
and Fishery School and for his personal benefit is not a declaration that the fact upon which Civil Case No. V-
3339 is based does not exist. The civil action barred by such a declaration is the civil liability arising from the
offense charged, which is the one impliedly instituted with the criminal action. (Section 1, Rule III, Rules of
Court.) Such a declaration would not bar a civil action filed against an accused who had been acquitted in the
criminal case if the criminal action is predicated on factual or legal considerations other than the commission of
the offense charged. A person may be acquitted of malversation where, as in the case at bar, he could show
that he did not misappropriate the public funds in his possession, but he could be rendered liable to restore said
funds or at least to make a proper accounting thereof if he shall spend the same for purposes which are not
authorized nor intended, and in a manner not permitted by applicable rules and regulations. (Republic v. Bello,
120 SCRA 203)

There appear to be no sound reasons to require a separate civil action to still be filed considering that the facts to be proved in
the civil case have already been established in the criminal proceedings where the accused was acquitted. Due process has
been accorded the accused. He was, in fact, exonerated of the criminal charged. The constitutional presumption of innocence
called for more vigilant efforts on the part of prosecuting attorneys and defense counsel, a keener awareness by all witnesses of
the serious implications of perjury, and a more studied consideration by the judge of the entire records and of applicable statutes
and precedents. To require a separate civil action simply because the accused was acquitted would mean needless clogging of
court dockets and unnecessary duplication of litigation with all its attendant loss of time, effort, and money on the part of all
concerned.

The trial court found the following facts clearly established by the evidence adduced by both the prosecution and the defense:

xxx xxx xxx

(9) In the morning of February 8, 1964, then Chief Galdones, complying with the instructions contained in said
Memorandum No. 32 of the Mayor, and upon seeing that Antonio Vergara had not vacated the premises in
question, with the aid of his policemen, forced upon the store or stall and ordered the removal of the goods
inside the store of Vergara, at the same time taking inventory of the goods taken out, piled them outside in front
 of the store and had it cordoned with a rope, and after all the goods were taken out from the store, ordered the
demolition of said stall of Antonio Vergara. Since then up to the trial of this case, the whereabouts of the goods
taken out from the store nor the materials of the demolished stall have not been made known.

The respondent Court of Appeals made a similar finding that:

On the morning of February 8th, because the said Vergaras had not up to that time complied with the order to
vacate, the co-accused Chief of Police Galdones and some members of his police force, went to the market
and, using ax, crowbars and hammers, demolished the stall of the Vergaras who were not present or around,
and after having first inventoried the goods and merchandise found therein, they had them brought to the
municipal building for safekeeping. Inspite of notice served upon the Vergaras to take possession of the goods
and merchandise thus taken away, the latter refused to do so.

The loss and damage to the Vergaras as they evaluated them were:

Cost of stall construction P1,300.00

Value of furniture and equipment

judgment destroyed 300.00

Value of goods and equipment taken 8,000.00

P9,600.00

It is not disputed that the accused demolished the grocery stall of the complainants Vergaras and carted away
its contents. The defense that they did so in order to abate what they considered a nuisance per se is untenable,
This finds no support in law and in fact. The couple has been paying rentals for the premises to the government
which allowed them to lease the stall. It is, therefore, farfetched to say that the stall was a nuisance per se which
could be summarily abated.

The petitioners, themselves, do not deny the fact that they caused the destruction of the complainant's market stall and had its
contents carted away. They state:

On February 8, 1964, despite personal pleas on Vergaras by the Mayor to vacate the passageways of Market
Building No. 3, the Vergaras were still in the premises, so the petitioners Chief of Police and members of the
Police Force of Jose Panganiban, pursuant to the Mayor' 6 directives, demolished the store of the Vergaras,
made an inventory of the goods found in said store, and brought these goods to the municipal building under the
custody of the Municipal Treasurer, ...

The only supposed obstacle is the provision of Article 29 of the Civil Code, earlier cited, that "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." According to some scholars, this provision of substantive law calls for a separate
civil action and cannot be modified by a rule of remedial law even in the interests of economy and simplicity and following the
dictates of logic and common sense.

As stated by retired Judge J. Cezar Sangco:

... if the Court finds the evidence sufficient to sustain the civil action but inadequate to justify a conviction in the
criminal action, may it render judgment acquitting the accused on reasonable doubt, but hold him civilly liable
nonetheless? An affirmative answer to this question would be consistent with the doctrine that the two are
distinct and separate actions, and win (a) dispense with the reinstituting of the same civil action, or one based
on quasi-delict or other independent civil action, and of presenting the same evidence: (b) save the injured party
unnecessary expenses in the prosecution of the civil action or enable him to take advantage of the free services
of the fiscal; and (c) otherwise resolve the unsettling implications of permitting the reinstitution of a separate civil
action whether based on delict, or quasi-delict, or other independent civil actions.

... But for the court to be able to adjudicate in the manner here suggested, Art. 29 of the Civil Code should be
amended because it clearly and expressly provides that the civil action based on the same act or omission may
only be instituted in a separate action, and therefore, may not inferentially be resolved in the same criminal
action. To dismiss the civil action upon acquittal of the accused and disallow the reinstitution of any other civil
action, would likewise render, unjustifiably, the acquittal on reasonable doubt without any significance, and
would violate the doctrine that the two actions are distinct and separate.
 In the light of the foregoing exposition, it seems evident that there is much sophistry and no pragmatism in the
doctrine that it is inconsistent to award in the same proceedings damages against the accused after acquitting
him on reasonable doubt. Such doctrine must recognize the distinct and separate character of the two actions,
the nature of an acquittal on reasonable doubt, the vexatious and oppressive effects of a reservation or
institution of a separate civil action, and that the injured party is entitled to damages not because the act or
omission is punishable but because he was damaged or injured thereby (Sangco, Philippine Law on Torts and
Damages, pp. 288-289).

We see no need to amend Article 29 of the Civil Code in order to allow a court to grant damages despite a judgment of acquittal
based on reasonable doubt. What Article 29 clearly and expressly provides is a remedy for the plaintiff in case the defendant has
been acquitted in a criminal prosecution on the ground that his guilt has not been proved beyond reasonable doubt. It merely
emphasizes that a civil action for damages is not precluded by an acquittal for the same criminal act or omission. The Civil Code
provision does not state that the remedy can be availed of only in a separate civil action. A separate civil case may be filed but
there is no statement that such separate filing is the only and exclusive permissible mode of recovering damages.

There is nothing contrary to the Civil Code provision in the rendition of a judgment of acquittal and a judgment awarding
damages in the same criminal action. The two can stand side by side. A judgment of acquittal operates to extinguish the criminal
liability. It does not, however, extinguish the civil liability unless there is clear showing that the act from which civil liability might
arise did not exist.

A different conclusion would be attributing to the Civil Code a trivial requirement, a provision which imposes an uncalled for
burden before one who has already been the victim of a condemnable, yet non-criminal, act may be accorded the justice which
he seeks.

We further note the rationale behind Art. 29 of the Civil Code in arriving at the intent of the legislator that they could not possibly
have intended to make it more difficult for the aggrieved party to recover just compensation by making a separate civil action
mandatory and exclusive:

The old rule that the acquittal of the accused in a criminal case also releases him from civil liability is one of the
most serious flaws in the Philippine legal system. It has given rise to numberless instances of miscarriage of
justice, where the acquittal was due to a reasonable doubt in the mind of the court as to the guilt of the accused.
The reasoning followed is that inasmuch as the civil responsibility is derived from the the criminal offense, when
the latter is not proved, civil liability cannot be demanded.

This is one of those cases where confused thinking leads to unfortunate and deplorable consequences. Such
reasoning fails to draw a clear line of demarcation between criminal liability and civil responsibility, and to
determine the logical result of the distinction. The two liabilities are separate and distinct from each other. One
affects the social order and the other, private rights. One is for the punishment or correction of the offender while
the other is for reparation of damages suffered by the aggrieved party... it is just and proper that, for the
purposes of the imprisonment of or fine upon the accused, the offense should be proved beyond reasonable
doubt. But for the purpose of indemnifying the complaining party, why should the offense also be proved beyond
reasonable doubt? Is not the invasion or violation of every private right to be proved only by preponderance of
evidence? Is the right of the aggrieved person any less private because the wrongful act is also punishable by
the criminal law? (Code Commission, pp. 45-46).

A separate civil action may be warranted where additional facts have to be established or more evidence must be adduced or
where the criminal case has been fully terminated and a separate complaint would be just as efficacious or even more expedient
than a timely remand to the trial court where the criminal action was decided for further hearings on the civil aspects of the case.
The offended party may, of course, choose to file a separate action. These do not exist in this case. Considering moreover the
delays suffered by the case in the trial, appellate, and review stages, it would be unjust to the complainants in this case to
require at this time a separate civil action to be filed.

With this in mind, we therefore hold that the respondent Court of Appeals did not err in awarding damages despite a judgment of
acquittal.

WHEREFORE, we hereby AFFIRM the decision of the respondent Court of Appeals and dismiss the petition for lack of merit.

SO ORDERED.

Fernando, C.J., Teehankee, Makasiar, Guerrero, Abad Santos, Melencio- Herrera, Plana, Escolin, Relova and De la Fuente, JJ.,
concur. Aquino, J., concur in the result. De Castro, J., took no part. Concepcion, Jr. J., is on leave.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-53642 April 15, 1988

LEONILO C. DONATO, petitioners,

vs.
HON. ARTEMON D. LUNA, PRESIDING JUDGE, COURT OF FIRST INSTANCE OF MANIIA, BRANCH XXXII HON. JOSE
FLAMINIANO, CITY FISCAL OF MANILA; PAZ B. ABAYAN, respondents.

Leopoldo P. Dela Rosa for petitioner.

Emiterio C. Manibog for private respondent.

City Fiscal of Manila for public respondent.

GANCAYCO, J.:

In this petition for certiorari and prohibition with preliminary injunction, the question for the resolution of the Court is whether or
not a criminal case for bigamy pending before the Court of First Itance of Manila should be suspended in view of a civil case for
annulment of marriage pending before the Juvenile and Domestic Relations Court on the ground that the latter constitutes a
prejudicial question. The respondent judge ruled in the negative. We sustain him.

The pertinent facts as set forth in the records follow. On January 23, 1979, the City Fiscal of Manila acting thru Assistant City
Fiscal Amado N. Cantor filed an information for bigamy against herein petitioner, Leonilo C. Donato with the Court of First
Instance of Manila, docketed as Criminal Case No. 43554 and assigned to Branch XXXII of said court. The information was filed
based on the complaint of private respondent Paz B. Abayan.

On September 28, 1979, before the petitioner's arraignment, private respondent filed with the Juvenile and Domestic Relations
Court of Manila a civil action for declaration of nullity of her marriage with petitioner contracted on September 26, 1978, which
action was docketed as Civil Case No. E-02627. Said civil case was based on the ground that private respondent consented to
entering into the marriage, which was petitioner Donato's second one, since she had no previous knowledge that petitioner was
already married to a certain Rosalinda R. Maluping on June 30, 1978. Petitioner Donato's answer in the civil case for nullity
interposed the defense that his second marriage was void since it was solemnized without a marriage license and that force,
violence, intimidation and undue influence were employed by private respondent to obtain petitioner's consent to the marriage.
Prior to the solemnization of the subsequent or second marriage, petitioner and private respondent had lived together and
deported themselves as husband and wife without the benefit of wedlock for a period of at least five years as evidenced by a
joint affidavit executed by them on September 26, 1978, for which reason, the requisite marriage license was dispensed with
pursuant to Article 76 of the New Civil Code pertaining to marriages of exceptional character.

Prior to the date set for the trial on the merits of Criminal Case No. 43554, petitioner filed a motion to suspend the proceedings
of said case contending that Civil Case No. E-02627 seeking the annulment of his second marriage filed by private respondent
raises a prejudicial question which must first be determined or decided before the criminal case can proceed.

In an order dated April 7, 1980. Hon. Artemon D. Luna denied the motion to suspend the proceedings in Criminal Case No.
43554 for bigamy. Respondent judge's basis for denial is the ruling laid down in the case of Landicho vs. Relova. 1 The order
further directed that the proceedings in the criminal case can proceed as scheduled.

A motion for reconsideration was flied by herein petitioner thru counsel citing as one of his grounds for suspension of
proceedings the ruling laid down by this Court in the case of De la Cruz vs. Ejercito 2 which was a much later case than that
cited by respondent judge in his order of denial.

The motion for reconsideration of the said order was likewise denied in an order dated April 14, 1980, for lack of merit. Hence,
the present petition for certiorari and prohibition with preliminary injunction.
A prejudicial question has been defined to be one which arises in a case, the resolution of which question is a logical antecedent
of the issue involved in said case, and the cognizance of which pertains to another tribunal.3 It is one based on a fact distinct and
separate from the crime but so intimately connected with it that it determines the guilt or innocence of the accused, and for it to
suspend the criminal action, it must appear not only that said case involves facts intimately related to those upon which the
criminal prosecution would be based but also that in the resolution of the issue or issues raised in the civil case, the guilt or
innocence of the accused would necessarily be determined. 4 A prejudicial question usually comes into play in a situation where
a civil action and a criminal action may proceed, because howsoever the issue raised in the civil action is resolved would be
determinative juris et de jure of the guilt or innocence of the accused in a criminal case.5

The requisites of a prejudicial question do not obtain in the case at bar. It must be noted that the issue before the Juvenile and
Domestic Relations Court touching upon the nullity of the second marriage is not determinative of petitioner Donato's guilt or
innocence in the crime of bigamy. Furthermore, it was petitioner's second wife, the herein private respondent Paz B. Abayan
who filed the complaint for annulment of the second marriage on the ground that her consent was obtained through deceit.

Petitioner Donato raised the argument that the second marriage should have been declared null and void on the ground of force,
threats and intimidation allegedly employed against him by private respondent only sometime later when he was required to
answer the civil action for anulment of the second marriage. The doctrine elucidated upon by the case of Landicho vs.
Relova 6 may be applied to the present case. Said case states that:

The mere fact that there are actions to annul the marriages entered into by the accused in a bigamy case does
not mean that "prejudicial questions" are automatically raised in civil actions as to warrant the suspension of the
case. In order that the case of annulment of marriage be considered a prejudicial question to the bigamy case
against the accused, it must be shown that the petitioner's consent to such marriage must be the one that was
obtained by means of duress, force and intimidation to show that his act in the second marriage must be
involuntary and cannot be the basis of his conviction for the crime of bigamy. The situation in the present case is
markedly different. At the time the petitioner was indicted for bigamy on February 27, 1963, the fact that two
marriage ceremonies had been contracted appeared to be indisputable. And it was the second spouse, not the
petitioner who filed the action for nullity on the ground of force, threats and intimidation. And it was only on June
15, 1963, that petitioner, as defendant in the civil action, filed a third-party complaint against the first spouse
alleging that his marriage with her should be declared null and void on the ground of force, threats and
intimidation. Assuming that the first marriage was null and void on the ground alleged by petitioner, the fact
would not be material to the outcome of the case. Parties to the marriage should not be permitted to judge for
themselves its nullity, for the same must be submitted to the judgment of the competent courts and only when
the nullity of the marriage is so declared can it be held as void, and so long as there is no such declaration the
presumption is that the marriage exists. Therefore, he who contracts a second marriage before the judicial
declaration of nullity of the first marriage assumes the risk of being prosecuted for bigamy. The lower court
therefore, has not abused much less gravely abused, its discretion in failing to suspend the hearing as sought
by petitioner.

In the case at bar, petitioner has not even sufficiently shown that his consent to the second marriage has been obtained by the
use of threats, force and intimidation.

Petitioner calls the attention of this Court to the fact that the case of De la Cruz vs. Ejercito is a later case and as such it should
be the one applied to the case at bar. We cannot agree. The situation in the case at bar is markedly different. In the aforecited
case it was accused Milagros dela Cruz who was charged with bigamy for having contracted a second marriage while a previous
one existed. Likewise, Milagros dela Cruz was also the one who filed an action for annulment on the ground of duress, as
contra-distinguished from the present case wherein it was private respondent Paz B. Abayan, petitioner's second wife, who filed
a complaint for annulment of the second marriage on the ground that her consent was obtained through deceit since she was
not aware that petitioner's marriage was still subsisting. Moreover, in De la Cruz, a judgment was already rendered in the civil
case that the second marriage of De la Cruz was null and void, thus determinative of the guilt or innocence of the accused in the
criminal case. In the present case, there is as yet no such judgment in the civil case.

Pursuant to the doctrine discussed in Landicho vs. Relova, petitioner Donato cannot apply the rule on prejudicial questions since
a case for annulment of marriage can be considered as a prejudicial question to the bigamy case against the accused only if it is
proved that the petitioner's consent to such marriage was obtained by means of duress, violence and intimidation in order to
establish that his act in the subsequent marriage was an involuntary one and as such the same cannot be the basis for
conviction. The preceding elements do not exist in the case at bar.

Obviously, petitioner merely raised the issue of prejudicial question to evade the prosecution of the criminal case. The records
reveal that prior to petitioner's second marriage on September 26, 1978, he had been living with private respondent Paz B.
Abayan as husband and wife for more than five years without the benefit of marriage. Thus, petitioner's averments that his
consent was obtained by private respondent through force, violence, intimidation and undue influence in entering a subsequent
marriage is belled by the fact that both petitioner and private respondent executed an affidavit which stated that they had lived
together as husband and wife without benefit of marriage for five years, one month and one day until their marital union was
formally ratified by the second marriage and that it was private respondent who eventually filed the civil action for nullity.

Another event which militates against petitioner's contentions is the fact hat it was only when Civil Case No. E-02627 was filed
on September 28, 1979, or more than the lapse of one year from the solemnization of the second marriage that petitioner came
up with the story that his consent to the marriage was secured through the use of force, violence, intimidation and undue
influence. Petitioner also continued to live with private respondent until November 1978, when the latter left their abode upon
learning that Leonilo Donato was already previously married.

In the light of the preceding factual circumstances, it can be seen that the respondent Judge did not err in his earlier order. There
is no pivotal issue that must be pre-emptively resolved in Civil Case No. E-02627 before proceedings in the criminal action for
bigamy can be undertaken.

Accordingly, there being no prejudicial question shown to exit the order of denial issued by the respondent judge dated April 14,
1980 should be sustained.

WHEREFORE, in view of the foregoing, the instant petition is hereby DISMISSED for lack of merit. We make no pronouncement
as to costs.

SO ORDERED.

Teehankee, C.J., Narvasa, Cruz and Griño-Aquino, JJ., concur.

 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-14534 February 28, 1962

MERARDO L. ZAPANTA, petitioner,

vs.
THE HON. AGUSTIN P. MONTESA, ETC., ET AL., respondents.

Pedro M. Santos and Jorge C. Salonga for petitioner.

Office of the Solicitor General, Romulo L. Chua and Dewey G. Soriano for respondents.

DIZON, J.:

This is a petition for prohibition filed by Merardo L. Zapanta against the Hon. Agustin P. Montesa, Judge of the Court of First
Instance of Bulacan, Fernando A. Cruz, Provincial Fiscal of Bulacan, and Olimpia A. Yco, to enjoin the former from proceeding
with the trial of Criminal Case No. 3405 pending the final determination of Civil Case No. 1446 of the Court of First Instance of
Pampanga.

Upon complaint filed by respondent Olimpia A. Yco on May 20, 1958, an information for Bigamy was filed by respondent
Provincial Fiscal against petitioner in the Court of First Instance of Bulacan (Criminal Case No. 3405), alleging that the latter,
having previously married one Estrella Guarin, and without said marriage having been dissolved, contracted a second marriage
with said complainant.

On June 16, 1958, petitioner filed in the Court of First Instance of Pampanga Civil Case No. 1446 against respondent Olimpia A.
Yco for the annulment of their marriage on the ground of duress, force and intimidation. On the 30th of the same month
respondent Yco, as defendant in said case, filed a motion to dismiss the complaint upon the ground that it stated no cause of
action, but the same was denied on July 7 of the same year. 1äwphï1.ñët

On September 2, 1958, petitioner, in turn, filed a motion in Criminal Case No. 3405 to suspend proceedings therein, on the
ground that the determination of the issue involved in Civil Case No. 1446 of the Court of First Instance of Pampanga was a
prejudicial question. Respondent judge denied the motion on September 20, 1958 as well as petitioner's motion for
reconsideration, and ordered his arraignment. After entering a plea of not guilty, petitioner filed the present action.

We have heretofore defined a prejudicial question as that which arises in a case, the resolution of which is a logical antecedent
of the issue involved therein, and the cognizance of which pertains to another tribunal (People vs. Aragon, G.R. No. L-5930,
February 17, 1954). The prejudicial question — we further said — must be determinative of the case before the court, and
jurisdiction to try the same must be lodged in another court (People vs. Aragon, supra). These requisites are present in the case
at bar. Should the question for annulment of the second marriage pending in the Court of First Instance of Pampanga prosper on
the ground that, according to the evidence, petitioner's consent thereto was obtained by means of duress, force and intimidation,
it is obvious that his act was involuntary and can not be the basis of his conviction for the crime of bigamy with which he was
charged in the Court of First Instance of Bulacan. Thus, the issue involved in the action for the annulment of the second
marriage is determinative of petitioner's guilt or innocence of the crime of bigamy. On the other hand, there can be no question
that the annulment of petitioner's marriage with respondent Yco on the grounds relied upon in the complaint filed in the Court of
First Instance of Pampanga is within the jurisdiction of said court.

In the Aragon case already mentioned (supra) we held that if the defendant in a case for bigamy claims that the first marriage is
void and the right to decide such validity is vested in another court, the civil action for annulment must first be decided before the
action for bigamy can proceed. There is no reason not to apply the same rule when the contention of the accused is that the
second marriage is void on the ground that he entered into it because of duress, force and intimidation.

WHEREFORE, the writ prayed for in the petition is hereby granted. Without costs.

Bengzon, C.J., Padilla, Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L., Barrera, Paredes and De Leon, JJ., concur.
 THIRD DIVISION

G.R. No. 137110 August 1, 2000

VINCENT PAUL G. MERCADO a.k.a. VINCENT G. MERCADO, petitioner,

vs.
CONSUELO TAN, respondent.

DECISION

PANGANIBAN, J.:

A judicial declaration of nullity of a previous marriage is necessary before a subsequent one can be legally contracted. One who
enters into a subsequent marriage without first obtaining such judicial declaration is guilty of bigamy. This principle applies even
if the earlier union is characterized by statute as "void."

The Case

Before us is a Petition for Review on Certiorari assailing the July 14, 1998 Decision of the Court of Appeals (CA)1 in CA-GR CR
No. 19830 and its January 4, 1999 Resolution denying reconsideration. The assailed Decision affirmed the ruling of the Regional
Trial Court (RTC) of Bacolod City in Criminal Case No. 13848, which convicted herein petitioner of bigamy as follows:

"WHEREFORE, finding the guilt of accused Dr. Vincent Paul G. Mercado a.k.a. Dr. Vincent G. Mercado of the crime of Bigamy
punishable under Article 349 of the Revised Penal Code to have been proven beyond reasonable doubt, [the court hereby
renders] judgment imposing upon him a prison term of three (3) years, four (4) months and fifteen (15) days of prision
correccional, as minimum of his indeterminate sentence, to eight (8) years and twenty-one (21) days of prision mayor, as
maximum, plus accessory penalties provided by law.

Costs against accused."2

The Facts

The facts are quoted by Court of Appeals (CA) from the trial court’s judgment, as follows: "From the evidence adduced by the
parties, there is no dispute that accused Dr. Vincent Mercado and complainant Ma. Consuelo Tan got married on June 27, 1991
before MTCC-Bacolod City Br. 7 Judge Gorgonio J. Ibañez [by reason of] which a Marriage Contract was duly executed and
signed by the parties. As entered in said document, the status of accused was ‘single’. There is no dispute either that at the time
of the celebration of the wedding with complainant, accused was actually a married man, having been in lawful wedlock with Ma.
Thelma Oliva in a marriage ceremony solemnized on April 10, 1976 by Judge Leonardo B. Cañares, CFI-Br. XIV, Cebu City per
Marriage Certificate issued in connection therewith, which matrimony was further blessed by Rev. Father Arthur Baur on October
10, 1976 in religious rites at the Sacred Heart Church, Cebu City. In the same manner, the civil marriage between accused and
complainant was confirmed in a church ceremony on June 29, 1991 officiated by Msgr. Victorino A. Rivas, Judicial Vicar,
Diocese of Bacolod City. Both marriages were consummated when out of the first consortium, Ma. Thelma Oliva bore accused
two children, while a child, Vincent Paul, Jr. was sired by accused with complainant Ma. Consuelo Tan.

"On October 5, 1992, a letter-complaint for bigamy was filed by complainant through counsel with the City Prosecutor of Bacolod
City, which eventually resulted [in] the institution of the present case before this Court against said accused, Dr. Vincent G.
Mercado, on March 1, 1993 in an Information dated January 22, 1993.

"On November 13, 1992, or more than a month after the bigamy case was lodged in the Prosecutor’s Office, accused filed an
action for Declaration of Nullity of Marriage against Ma. Thelma V. Oliva in RTC-Br. 22, Cebu City, and in a Decision dated May
6, 1993 the marriage between Vincent G. Mercado and Ma. Thelma V. Oliva was declared null and void.

"Accused is charged [with] bigamy under Article 349 of the Revised Penal Code for having contracted a second marriage with
herein complainant Ma. Consuelo Tan on June 27, 1991 when at that time he was previously united in lawful marriage with Ma.
Thelma V. Oliva on April 10, 1976 at Cebu City, without said first marriage having been legally dissolved. As shown by the
evidence and admitted by accused, all the essential elements of the crime are present, namely: (a) that the offender has been
previously legally married; (2) that the first marriage has not been legally dissolved or in case the spouse is absent, the absent
spouse could not yet be presumed dead according to the Civil Code; (3) that he contract[ed] a second or subsequent marriage;
and (4) that the second or subsequent marriage ha[d] all the essential requisites for validity. x x x
"While acknowledging the existence of the two marriage[s], accused posited the defense that his previous marriage ha[d] been
judicially declared null and void and that the private complainant had knowledge of the first marriage of accused.

"It is an admitted fact that when the second marriage was entered into with Ma. Consuelo Tan on June 27, 1991, accused’s prior
marriage with Ma. Thelma V. Oliva was subsisting, no judicial action having yet been initiated or any judicial declaration obtained
as to the nullity of such prior marriage with Ma. Thelma V. Oliva. Since no declaration of the nullity of his first marriage ha[d] yet
been made at the time of his second marriage, it is clear that accused was a married man when he contracted such second
marriage with complainant on June 27, 1991. He was still at the time validly married to his first wife." 3

Ruling of the Court of Appeals

Agreeing with the lower court, the Court of Appeals stated:

"Under Article 40 of the Family Code, ‘the absolute nullity of a previous marriage may be invoked for purposes of remarriage on
the basis solely of a final judgment declaring such previous marriage void.’ But here, the final judgment declaring null and void
accused’s previous marriage came not before the celebration of the second marriage, but after, when the case for bigamy
against accused was already tried in court. And what constitutes the crime of bigamy is the act of any person who shall contract
a second subsequent marriage ‘before’ the former marriage has been legally dissolved."4

Hence, this Petition.5

The Issues

In his Memorandum, petitioner raises the following issues:

"A

Whether or not the element of previous legal marriage is present in order to convict petitioner.

"B

Whether or not a liberal interpretation in favor of petitioner of Article 349 of the Revised Penal Code punishing bigamy, in
relation to Articles 36 and 40 of the Family Code, negates the guilt of petitioner.

"C

Whether or not petitioner is entitled to an acquittal on the basis of reasonable doubt." 6

The Court’s Ruling

The Petition is not meritorious.

Main Issue:Effect of Nullity of Previous Marriage

Petitioner was convicted of bigamy under Article 349 of the Revised Penal Code, which provides:

"The penalty of prision mayor shall be imposed upon any person who shall contract a second or subsequent marriage before the
former marriage has been legally dissolved, or before the absent spouse has been declared presumptively dead by means of a
judgment rendered in the proper proceedings."

The elements of this crime are as follows:

"1. That the offender has been legally married;

2. That the marriage has not been legally dissolved or, in case his or her spouse is absent, the absent spouse could not
yet be presumed dead according to the Civil Code;

3. That he contracts a second or subsequent marriage;

4. That the second or subsequent marriage has all the essential requisites for validity." 7
When the Information was filed on January 22, 1993, all the elements of bigamy were present. It is undisputed that petitioner
married Thelma G. Oliva on April 10, 1976 in Cebu City. While that marriage was still subsisting, he contracted a second
marriage, this time with Respondent Ma. Consuelo Tan who subsequently filed the Complaint for bigamy.

Petitioner contends, however, that he obtained a judicial declaration of nullity of his first marriage under Article 36 of the Family
Code, thereby rendering it void ab initio. Unlike voidable marriages which are considered valid until set aside by a competent
court, he argues that a void marriage is deemed never to have taken place at all. 8 Thus, he concludes that there is no first
marriage to speak of. Petitioner also quotes the commentaries 9 of former Justice Luis Reyes that "it is now settled that if the first
marriage is void from the beginning, it is a defense in a bigamy charge. But if the first marriage is voidable, it is not a defense."

Respondent, on the other hand, admits that the first marriage was declared null and void under Article 36 of the Family Code,
but she points out that that declaration came only after the Information had been filed. Hence, by then, the crime had already
been consummated. She argues that a judicial declaration of nullity of a void previous marriage must be obtained before a
person can marry for a subsequent time.

We agree with the respondent.

To be sure, jurisprudence regarding the need for a judicial declaration of nullity of the previous marriage has been characterized
as "conflicting."10 In People v. Mendoza,11 a bigamy case involving an accused who married three times, the Court ruled that
there was no need for such declaration. In that case, the accused contracted a second marriage during the subsistence of the
first. When the first wife died, he married for the third time. The second wife then charged him with bigamy. Acquitting him, the
Court held that the second marriage was void ab initio because it had been contracted while the first marriage was still in effect.
Since the second marriage was obviously void and illegal, the Court ruled that there was no need for a judicial declaration of its
nullity. Hence, the accused did not commit bigamy when he married for the third time. This ruling was affirmed by the Court
in People v. Aragon,12which involved substantially the same facts.

But in subsequent cases, the Court impressed the need for a judicial declaration of nullity. In Vda de Consuegra v. GSIS,13 Jose
Consuegra married for the second time while the first marriage was still subsisting. Upon his death, the Court awarded one half
of the proceeds of his retirement benefits to the first wife and the other half to the second wife and her children, notwithstanding
the manifest nullity of the second marriage. It held: "And with respect to the right of the second wife, this Court observes that
although the second marriage can be presumed to be void ab initioas it was celebrated while the first marriage was still
subsisting, still there is need for judicial declaration of such nullity."

In Tolentino v. Paras,14 however, the Court again held that judicial declaration of nullity of a void marriage was not necessary. In
that case, a man married twice. In his Death Certificate, his second wife was named as his surviving spouse. The first wife then
filed a Petition to correct the said entry in the Death Certificate. The Court ruled in favor of the first wife, holding that "the second
marriage that he contracted with private respondent during the lifetime of the first spouse is null and void from the beginning and
of no force and effect. No judicial decree is necessary to establish the invalidity of a void marriage."

In Wiegel v. Sempio-Diy,15 the Court stressed the need for such declaration. In that case, Karl Heinz Wiegel filed an action for
the declaration of nullity of his marriage to Lilia Olivia Wiegel on the ground that the latter had a prior existing marriage. After
pretrial, Lilia asked that she be allowed to present evidence to prove, among others, that her first husband had previously been
married to another woman. In holding that there was no need for such evidence, the Court ruled: "x x x There is likewise no need
of introducing evidence about the existing prior marriage of her first husband at the time they married each other, for then such a
marriage though void still needs, according to this Court, a judicial declaration of such fact and for all legal intents and purposes
she would still be regarded as a married woman at the time she contracted her marriage with respondent Karl Heinz Wiegel; x x
x."

Subsequently, in Yap v. CA,16 the Court reverted to the ruling in People v. Mendoza, holding that there was no need for such
declaration of nullity.

In Domingo v. CA,17 the issue raised was whether a judicial declaration of nullity was still necessary for the recovery and the
separation of properties of erstwhile spouses. Ruling in the affirmative, the Court declared: "The Family Code has settled once
and for all the conflicting jurisprudence on the matter. A declaration of the absolute nullity of a marriage is now explicitly required
either as a cause of action or a ground for defense; in fact, the requirement for a declaration of absolute nullity of a marriage is
also for the protection of the spouse who, believing that his or her marriage is illegal and void, marries again. With the judicial
declaration of the nullity of his or her first marriage, the person who marries again cannot be charged with bigamy." 18

Unlike Mendoza and Aragon, Domingo as well as the other cases herein cited was not a criminal prosecution for bigamy.
Nonetheless, Domingo underscored the need for a judicial declaration of nullity of a void marriage on the basis of a new
provision of the Family Code, which came into effect several years after the promulgation of Mendoza and Aragon.
In Mendoza and Aragon, the Court relied on Section 29 of Act No. 3613 (Marriage Law), which provided:

"Illegal marriages. — Any marriage subsequently contracted by any person during the lifetime of the first spouse shall be illegal
and void from its performance, unless:

(a) The first marriage was annulled or dissolved;

(b) The first spouse had been absent for seven consecutive years at the time of the second marriage without the spouse
present having news of the absentee being alive, or the absentee being generally considered as dead and believed to
be so by the spouse present at the time of contracting such subsequent marriage, the marriage as contracted being
valid in either case until declared null and void by a competent court."

The Court held in those two cases that the said provision "plainly makes a subsequent marriage contracted by any person
during the lifetime of his first spouse illegal and void from its performance, and no judicial decree is necessary to establish its
invalidity, as distinguished from mere annulable marriages."19

The provision appeared in substantially the same form under Article 83 of the 1950 Civil Code and Article 41 of the Family Code.
However, Article 40 of the Family Code, a new provision, expressly requires a judicial declaration of nullity of the previous
marriage, as follows:

"ART. 40. The absolute nullity of a previous marriage may be invoked for purposes of remarriage on the basis solely of a final
judgment declaring such marriage void."

In view of this provision, Domingo stressed that a final judgment declaring such marriage void was necessary. Verily, the Family
Code and Domingo affirm the earlier ruling in Wiegel. Thus, a Civil Law authority and member of the Civil Code Revision
Commitee has observed:

"[Article 40] is also in line with the recent decisions of the Supreme Court that the marriage of a person may be null and void but
there is need of a judicial declaration of such fact before that person can marry again; otherwise, the second marriage will also
be void (Wiegel v. Sempio-Diy, Aug. 19/86, 143 SCRA 499, Vda. De Consuegra v. GSIS, 37 SCRA 315). This provision changes
the old rule that where a marriage is illegal and void from its performance, no judicial decree is necessary to establish its validity
(People v. Mendoza, 95 Phil. 843; People v. Aragon, 100 Phil. 1033)."20

In this light, the statutory mooring of the ruling in Mendoza and Aragon – that there is no need for a judicial declaration of nullity
of a void marriage -- has been cast aside by Article 40 of the Family Code. Such declaration is now necessary before one can
contract a second marriage. Absent that declaration, we hold that one may be charged with and convicted of bigamy.

The present ruling is consistent with our pronouncement in Terre v. Terre,21 which involved an administrative Complaint against
a lawyer for marrying twice. In rejecting the lawyer’s argument that he was free to enter into a second marriage because the first
one was void ab initio, the Court ruled: "for purposes of determining whether a person is legally free to contract a second
marriage, a judicial declaration that the first marriage was null and void ab initio is essential." The Court further noted that the
said rule was "cast into statutory form by Article 40 of the Family Code." Significantly, it observed that the second marriage,
contracted without a judicial declaration that the first marriage was void, was "bigamous and criminal in character."

Moreover, Justice Reyes, an authority in Criminal Law whose earlier work was cited by petitioner, changed his view on the
subject in view of Article 40 of the Family Code and wrote in 1993 that a person must first obtain a judicial declaration of the
nullity of a void marriage before contracting a subsequent marriage: 22

"It is now settled that the fact that the first marriage is void from the beginning is not a defense in a bigamy charge. As with a
voidable marriage, there must be a judicial declaration of the nullity of a marriage before contracting the second marriage. Article
40 of the Family Code states that x x x. The Code Commission believes that the parties to a marriage should not be allowed to
assume that their marriage is void, even if such is the fact, but must first secure a judicial declaration of nullity of their marriage
before they should be allowed to marry again. x x x."

In the instant case, petitioner contracted a second marriage although there was yet no judicial declaration of nullity of his first
marriage. In fact, he instituted the Petition to have the first marriage declared void only after complainant had filed a letter-
complaint charging him with bigamy. By contracting a second marriage while the first was still subsisting, he committed the acts
punishable under Article 349 of the Revised Penal Code.

That he subsequently obtained a judicial declaration of the nullity of the first marriage was immaterial. To repeat, the crime had
already been consummated by then. Moreover, his view effectively encourages delay in the prosecution of bigamy cases; an
accused could simply file a petition to declare his previous marriage void and invoke the pendency of that action as a prejudicial
question in the criminal case. We cannot allow that.

Under the circumstances of the present case, he is guilty of the charge against him.

Damages

In her Memorandum, respondent prays that the Court set aside the ruling of the Court of Appeals insofar as it denied her claim
of damages and attorney’s fees.23

Her prayer has no merit. She did not appeal the ruling of the CA against her; hence, she cannot obtain affirmative relief from this
Court.24 In any event, we find no reason to reverse or set aside the pertinent ruling of the CA on this point, which we quote
hereunder:

"We are convinced from the totality of the evidence presented in this case that Consuelo Tan is not the innocent victim that she
claims to be; she was well aware of the existence of the previous marriage when she contracted matrimony with Dr. Mercado.
The testimonies of the defense witnesses prove this, and we find no reason to doubt said testimonies.

xxx xxx xxx

"Indeed, the claim of Consuelo Tan that she was not aware of his previous marriage does not inspire belief, especially as she
had seen that Dr. Mercado had two (2) children with him. We are convinced that she took the plunge anyway, relying on the fact
that the first wife would no longer return to Dr. Mercado, she being by then already living with another man.

"Consuelo Tan can therefore not claim damages in this case where she was fully conscious of the consequences of her act. She
should have known that she would suffer humiliation in the event the truth [would] come out, as it did in this case, ironically
because of her personal instigation. If there are indeed damages caused to her reputation, they are of her own willful making."25

WHEREFORE, the Petition is DENIED and the assailed Decision AFFIRMED. Costs against petitioner.

SO ORDERED.

Melo, (Chairman), Purisima, and Gonzaga-Reyes, JJ., concur.

Vitug, J., see concurring and dissenting opinion.
 FIRST DIVISION

G.R. No. 126746 November 29, 2000

ARTHUR TE, petitioner,

vs.
COURT OF APPEALS, and LILIANA CHOA, respondents.

DECISION

KAPUNAN, J.:

Before us is a petition for review on certiorari which seeks to reverse the Decision of the Court of Appeals Tenth Division, dated
31 August 1994 in CA-G.R. SP No. 239711 and CA-G.R. SP No. 261782 and the Resolution dated October 18, 1996 denying
petitioner’s motion for reconsideration.

The facts of the case are as follows:

Petitioner Arthur Te and private respondent Liliana Choa were married in civil rites on September 14, 1988. They did not live
together after the marriage although they would meet each other regularly. Not long after private respondent gave birth to a girl
on April 21, 1989, petitioner stopped visiting her.3

On May 20, 1990, while his marriage with private respondent was subsisting, petitioner contracted a second marriage with a
certain Julieta Santella (Santella).4

On the basis of a complaint-affidavit filed by private respondent sometime in June 1990, when she learned about petitioner’s
marriage to Santella, an information charging petitioner with bigamy was filed with the Regional Trial Court (RTC) of Quezon City
on August 9, 1990.5 This case was docketed as Criminal Case No. Q-90-14409.6

Meanwhile, on July 20, 1990, petitioner filed in the RTC of Quezon City an action for the annulment of his marriage to private
respondent on the ground that he was forced to marry her. He alleged that private respondent concealed her pregnancy by
another man at the time of their marriage and that she was psychologically incapacitated to perform her essential marital
obligations.7

On November 8, 1990, private respondent also filed with the Professional Regulation Commission (PRC) an administrative case
against petitioner and Santella for the revocation of their respective engineering licenses on the ground that they committed acts
of immorality by living together and subsequently marrying each other despite their knowledge that at the time of their marriage,
petitioner was already married to private respondent. With respect to petitioner, private respondent added that he committed an
act of falsification by stating in his marriage contract with Santella that he was still single. 8

After the prosecution rested its case in the criminal case for bigamy, petitioner filed a demurrer to evidence with leave of court
and motion to inhibit the trial court judge for showing antagonism and animosity towards petitioner’s counsel during the hearings
of said case.

The trial court denied petitioner’s demurrer to evidence in an Order dated November 28, 1990 which stated that the same could
not be granted because the prosecution had sufficiently established a prima facie case against the accused.9 The RTC also
denied petitioner’s motion to inhibit for lack of legal basis.10

Petitioner then filed with the Court of Appeals a petition for certiorari, alleging grave abuse of discretion on the part of the trial
court judge, Judge Cezar C. Peralejo, for (1) exhibiting antagonism and animosity towards petitioner’s counsel; (2) violating the
requirements of due process by denying petitioner’s [motion for reconsideration and] demurrer to evidence even before the filing
of the same; (3) disregarding and failing to comply with the appropriate guidelines for judges promulgated by the Supreme Court;
and (4) ruling that in a criminal case only "prima facie evidence" is sufficient for conviction of an accused. This case was
docketed as CA-G.R. SP No. 23971.11

Petitioner also filed with the Board of Civil Engineering of the PRC (PRC Board), where the administrative case for the
revocation of his engineering license was pending, a motion to suspend the proceedings therein in view of the pendency of the
civil case for annulment of his marriage to private respondent and criminal case for bigamy in Branches 106 and 98, respectively
of the RTC of Quezon City.12 When the Board denied the said motion in its Order dated July 16, 1991, 13 petitioner filed with the
Court of Appeals another petition for certiorari, contending that the Board gravely abused its discretion in: (1) failing to hold that
the resolution of the annulment case is prejudicial to the outcome of the administrative case pending before it; (2) not holding
that the continuation of proceedings in the administrative case could render nugatory petitioner’s right against self-incrimination
in this criminal case for bigamy against him; and (3) making an overly-sweeping interpretation that Section 32 of the Rules and
Regulations Governing the Regulation and Practice of Professionals does not allow the suspension of the administrative
proceeding before the PRC Board despite the pendency of criminal and/or administrative proceedings against the same
respondent involving the same set of facts in other courts or tribunals. This petition was docketed as CA-G.R. SP No. 26178.14

The two petitions for certiorari were consolidated since they arose from the same set of facts.

On 31 August 1994, the Court of Appeals, Tenth Division, rendered the assailed decision in the consolidated petitions. The
appellate court upheld the RTC’s denial of the motion to inhibit due to petitioner’s failure to show any concrete evidence that the
trial court judge exhibited partiality and had prejudged the case. It also ruled that the denial of petitioner’s motion to suspend the
proceedings on the ground of prejudicial question was in accord with law. 15 The Court of Appeals likewise affirmed the RTC’s
denial of the demurrer to evidence filed by petitioner for his failure to set forth persuasive grounds to support the same,
considering that the prosecution was able to adduce evidence showing the existence of the elements of bigamy. 16

Neither did the appellate court find grave abuse of discretion on the part of the Board’s Order denying petitioner’s motion to
suspend proceedings in the administrative case on the ground of prejudicial question. Respondent court held that no prejudicial
question existed since the action sought to be suspended is administrative in nature, and the other action involved is a civil
case.17

Petitioner thereafter filed a motion for reconsideration of the decision of the Court of Appeals but the same was denied.18

Hence, petitioner filed the instant petition raising the following issues:

PUBLIC RESPONDENT COMMITTED A SERIOUS ERROR IN REFUSING TO SUSPEND THE LEGAL [CRIMINAL
AND ADMINISTRATIVE] PROCEEDINGS DESPITE THE PENDENCY OF THE CIVIL CASE FOR DECLARATION OF
NULLITY OF MARRIAGE.

II

PUBLIC RESPONDENT GRAVELY ABUSED ITS DISCRETION AND COMMITTED AN ERROR OF LAW IN NOT
HOLDING THAT THE DEMURRER TO EVIDENCE SHOULD HAVE BEEN GIVEN DUE COURSE.

III

PUBLIC RESPONDENT COMMITTED A SERIOUS LEGAL ERROR IN NOT HOLDING THAT THE TRIAL JUDGE A
QUO SHOULD HAVE INHIBITED HIMSELF.19

The petition has no merit.

While the termination of Civil Case No. Q-90-6205 for annulment of petitioner’s marriage to private respondent has rendered the
issue of the propriety of suspending both the criminal case for bigamy before the RTC of Quezon City, Branch 98 and the
administrative case for revocation of petitioner’s engineering license before the PRC Board moot and academic, the Court shall
discuss the issue of prejudicial question to emphasize the guarding and controlling precepts and rules.20

A prejudicial question has been defined as one based on a fact distinct and separate from the crime but so intimately connected
with it that it determines the guilt or innocence of the accused, and for it to suspend the criminal action, it must appear not only
that said case involves facts intimately related to those upon which the criminal prosecution would be based but also that in the
resolution of the issue or issues raised in the civil case, the guilt or innocence of the accused would necessarily be
determined.21 The rationale behind the principle of suspending a criminal case in view of a prejudicial question is to avoid two
conflicting decisions.22

The Court of Appeals did not err when it ruled that the pendency of the civil case for annulment of marriage filed by petitioner
against private respondent did not pose a prejudicial question which would necessitate that the criminal case for bigamy be
suspended until said civil case is terminated.

The outcome of the civil case for annulment of petitioner’s marriage to private respondent had no bearing upon the
determination of petitioner’s innocence or guilt in the criminal case for bigamy, because all that is required for the charge of
bigamy to prosper is that the first marriage be subsisting at the time the second marriage is contracted. 23Petitioner’s argument
that the nullity of his marriage to private respondent had to be resolved first in the civil case before the criminal proceedings
could continue, because a declaration that their marriage was void ab initio would necessarily absolve him from criminal liability,
is untenable. The ruling in People vs. Mendoza24 and People vs. Aragon25 cited by petitioner that no judicial decree is necessary
to establish the invalidity of a marriage which is void ab initio has been overturned. The prevailing rule is found in Article 40 of
the Family Code, which was already in effect at the time of petitioner’s marriage to private respondent in September 1988. Said
article states that the absolute nullity of a previous marriage may not be invoked for purposes of remarriage unless there is a
final judgment declaring such previous marriage void. Thus, under the law, a marriage, even one which is void or voidable, shall
be deemed valid until declared otherwise in a judicial proceeding. 26 In Landicho vs. Relova,27 we held that:

Parties to a marriage should not be permitted to judge for themselves its nullity, for this must be submitted to the judgment of
competent courts and only when the nullity of a marriage is so declared can it be held as void, and so long as there is no such
declaration the presumption of marriage exists.28

It is clear from the foregoing that the pendency of the civil case for annulment of petitioner’s marriage to private respondent did
not give rise to a prejudicial question which warranted the suspension of the proceedings in the criminal case for bigamy since at
the time of the alleged commission of the crime, their marriage was, under the law, still valid and subsisting.

Neither did the filing of said civil case for annulment necessitate the suspension of the administrative proceedings before the
PRC Board. As discussed above, the concept of prejudicial question involves a civil and a criminal case. We have previously
ruled that there is no prejudicial question where one case is administrative and the other is civil. 29

Furthermore, Section 32 of the Rules and Regulations Governing the Regulation and Practice of Professionals of the PRC Board
expressly provides that the administrative proceedings before it shall not be suspended notwithstanding the existence of a
criminal and/or civil case against the respondent involving the same facts as the administrative case:

The filing or pendency of a criminal and/or civil cases in the courts or an administrative case in another judicial body against an
examinee or registered professional involving the same facts as in the administrative case filed or to be filed before the Board
shall neither suspend nor bar the proceeding of the latter case. The Board shall proceed independently with the investigation of
the case and shall render therein its decision without awaiting for the final decision of the courts or quasi-judicial body.

It must also be noted that the allegations in the administrative complaint before the PRC Board are not confined to the issue of
the alleged bigamous marriage contracted by petitioner and Santella. Petitioner is also charged with immoral conduct for
continued failure to perform his obligations as husband to private respondent and as father to their child, and for cohabiting with
Santella without the benefit of marriage.30 The existence of these other charges justified the continuation of the proceedings
before the PRC Board.

Petitioner also contends that the Court of Appeals erred in upholding the trial court’s denial of his demurrer to evidence in the
criminal case for bigamy, arguing that the prosecution failed to establish the existence of both the first and second marriages
beyond reasonable doubt. Petitioner claims that the original copy of marriage contract between him and private respondent was
not presented, the signatures therein were not properly identified and there was no showing that the requisites of a valid
marriage were complied with. He alleges further that the original copy of the marriage contract between him and Santella was
not presented, that no proof that he signed said contract was adduced, and that there was no witness presented to show that a
second marriage ceremony participated in by him ever took place.31

We are not persuaded. The grant or denial of a demurrer to evidence is left to the sound discretion of the trial court, and its ruling
on the matter shall not be disturbed in the absence of a grave abuse of such discretion. 32 In this case, the Court of Appeals did
not find any grave abuse of discretion on the part of the trial court, which based its denial of the demurrer on two grounds: first,
the prosecution established a prima facie case for bigamy against the petitioner; and second, petitioner’s allegations in the
demurrer were insufficient to justify the grant of the same. It has been held that the appellate court will not review in a special
civil action for certiorari the prosecution’s evidence and decide in advance that such evidence has or has not yet established the
guilt of the accused beyond reasonable doubt. 33 In view of the trial court’s finding that a prima facie case against petitioner
exists, his proper recourse is to adduce evidence in his defense.34

The Court also finds it necessary to correct petitioner’s misimpression that by denying his demurrer to evidence in view of the
existence of a prima facie case against him, the trial court was already making a pronouncement that he is liable for the offense
charged. As correctly held by the Court of Appeals, the order of the RTC denying the demurrer was not an adjudication on the
merits but merely an evaluation of the sufficiency of the prosecution’s evidence to determine whether or not a full-blown trial
would be necessary to resolve the case.35 The RTC’s observation that there was a prima facie case against petitioner only
meant that the prosecution had presented sufficient evidence to sustain its proposition that petitioner had committed the offense
of bigamy, and unless petitioner presents evidence to rebut the same, such would be the conclusion. 36 Said declaration by the
RTC should not be construed as a pronouncement of petitioner’s guilt. It was precisely because of such finding that the trial
court denied the demurrer, in order that petitioner may present evidence in his defense and allow said court to resolve the case
based on the evidence adduced by both parties.
Lastly, petitioner contends that his motion to inhibit Judge Peralejo in Criminal Case No. Q-90-14409 should have been granted
since said judge exhibited partiality and bias against him in several instances. First, when petitioner manifested that he would file
a motion for reconsideration of the denial of his motion to suspend the proceedings in said case, the judge said such motion was
dilatory and would be denied even though the motion for reconsideration had not yet been filed. Second, when petitioner’s
counsel manifested that he had just recovered from an accident and was not physically fit for trial, the judge commented that
counsel was merely trying to delay the case and required said counsel to produce a medical certificate to support his statement.
Third, when petitioner manifested that he was going to file a demurrer to evidence, the judge characterized the same as dilatory
and declared that he would deny the same. According to petitioner, the judge’s hostile attitude towards petitioner’s counsel as
shown in the foregoing instances justified the grant of his motion to inhibit.

We agree with the appellate court that the grounds raised by petitioner against Judge Peralejo did not conclusively show that the
latter was biased and had prejudged the case.37 In People of the Philippines vs. Court of Appeals,38this Court held that while bias
and prejudice have been recognized as valid reasons for the voluntary inhibition of a judge under Section 1, Rule 137, the
rudimentary rule is that the mere suspicion that a judge is partial is not enough. There should be clear and convincing evidence
to prove the charge of bias and partiality.39

Furthermore, since the grounds raised by petitioner in his motion to inhibit are not among those expressly mentioned in Section
1, Rule 137 of the Revised Rules of Court, the decision to inhibit himself lay within the sound discretion of Judge Peralejo. Said
provision of law states:

Section 1. Disqualification of judges. – No judge or judicial officer shall sit in any case in which he, or his wife or child, is
pecuniarily interested as heir, legatee, creditor or otherwise, or in which he is related to either party within the sixth degree of
consanguinity or affinity, or to counsel within the fourth degree, computed according to the rules of the civil law, or in which he
has been executor, administrator, guardian, trustee or counsel, or in which he has presided in any inferior court when his ruling
or decision is the subject of review, without the written consent of all parties in interest, signed by them and entered upon the
record.

A judge may, in the exercise of his sound discretion, disqualify himself from sitting in the case, for just and valid reasons other
than those mentioned above.

Thus, it was not mandatory that the judge inhibit himself from hearing and deciding the case.

This Court does not find any abuse of discretion by respondent judge in denying petitioner’s motion to inhibit. The test for
determining the propriety of the denial of said motion is whether petitioner was deprived a fair and impartial trial. 40 The instances
when Judge Peralejo allegedly exhibited antagonism and partiality against petitioner and/or his counsel did not deprive him of a
fair and impartial trial. As discussed earlier, the denial by the judge of petitioner’s motion to suspend the criminal proceeding and
the demurrer to evidence are in accord with law and jurisprudence. Neither was there anything unreasonable in the requirement
that petitioner’s counsel submit a medical certificate to support his claim that he suffered an accident which rendered him
unprepared for trial. Such requirement was evidently imposed upon petitioner’s counsel to ensure that the resolution of the case
was not hampered by unnecessary and unjustified delays, in keeping with the judge’s duty to disposing of the court’s business
promptly.41

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

SO ORDERED. Davide, Jr., C.J., (Chairman), Puno, Pardo, and Ynares-Santiago, JJ., concur.
 Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. No. L-48157 March 16, 1988

RICARDO QUIAMBAO, petitioner,

vs.
HON. ADRIANO OSORIO, ZENAIDA GAZA BUENSUCERO, JUSTINA GAZA BERNARDO, and FELIPE GAZA,
respondents-appellees, LAND AUTHORITY, intervenor-appellant.

FERNAN, J.:

This case was certified to Us by the Court of Appeals as one involving pure questions of law pursuant to Section 3, Rule 50 of
the Revised Rules of Court.

The antecedents are as follows:

In a complaint for forcible entry filed by herein private respondents Zenaida Gaza Buensucero, Justina Gaza Bernardo and
Felipe Gaza against herein petitioner Ricardo Quiambao before the then Municipal Court of Malabon, Rizal, docketed therein as
Civil Case No. 2526, it was alleged that private respondents were the legitimate possessors of a 30,835 sq. m. lot known as Lot
No. 4, Block 12, Bca 2039 of the Longos Estate situated at Barrio Longos, Malabon Rizal, by virtue of the Agreement to Sell No.
3482 executed in their favor by the former Land Tenure Administration [which later became the Land Authority, then the
Department of Agrarian Reform]; that under cover of darkness, petitioner surreptitiously and by force, intimidation, strategy and
stealth, entered into a 400 sq. m. portion thereof, placed bamboo posts "staka" over said portion and thereafter began the
construction of a house thereon; and that these acts of petitioner, which were unlawful per se, entitled private respondents to a
writ of preliminary injunction and to the ejectment of petitioner from the lot in question.

Petitioner filed a motion to dismiss the complaint, and upon denial thereof, filed his Answer to the complaint, specifically denying
the material allegations therein and averring that the Agreement upon which private respondents base their prior possession
over the questioned lot had already been cancelled by the Land Authority in an Order signed by its Governor, Conrado Estrella.
By way of affirmative defense and as a ground for dismissing the case, petitioner alleged the pendency of L.A. Case No. 968, an
administrative case before the Office of the Land Authority between the same parties and involving the same piece of land. In
said administrative case, petitioner disputed private respondents' right of possession over the property in question by reason of
the latter's default in the installment payments for the purchase of said lot. Petitioner asserted that his administrative case was
determinative of private respondents' right to eject petitioner from the lot in question; hence a prejudicial question which bars a
judicial action until after its termination.

After hearing, the municipal court denied the motion to dismiss contained in petitioner's affirmative defenses. It ruled that
inasmuch as the issue involved in the case was the recovery of physical possession, the court had jurisdiction to try and hear the
case.

Dissatisfied with this ruling, petitioner filed before the then Court of First Instance of Rizal, Branch XII, Caloocan City in Civil
Case No. C-1576 a petition for certiorari with injunction against public respondent Judge Adriano Osorio of the Municipal Court
of Malabon and private respondents, praying for the issuance of a writ of preliminary injunction ordering respondent judge to
suspend the hearing in the ejectment case until after the resolution of said petition. As prayed for, the then CFI of Rizal issued a
restraining order enjoining further proceedings in the ejectment case.

In his answer, respondent municipal judge submitted himself to the sound discretion of the CFI in the disposition of the petition
for certiorari. Private respondents, on the other hand, filed a motion to dismiss the petition, maintaining that the administrative
case did not constitute a prejudicial question as it involved the question of ownership, unlike the ejectment case which involved
merely the question of possession.

Meanwhile, the Land Authority filed an Urgent Motion for Leave to Intervene in Civil Case No. C-1576 alleging the pendency of
an administrative case between the same parties on the same subject matter in L.A. Case No. 968 and praying that the petition
for certiorari be granted, the ejectment complaint be dismissed and the Office of the Land Authority be allowed to decide the
matter exclusively.
Finding the issue involved in the ejectment case to be one of prior possession, the CFI dismissed the petition for certiorari and
lifted the restraining order previously issued. Petitioner's motion for reconsideration of the dismissal order, adopted in toto by
Intervenor Land Authority was denied for lack of merit. Hence, this appeal filed by petitioner Quiambao and intervenor Land
Authority with the Court of Appeals, and certified to Us as aforesaid.

The instant controversy boils down to the sole question of whether or not the administrative case between the private parties
involving the lot subject matter of the ejectment case constitutes a prejudicial question which would operate as a bar to said
ejectment case.

A prejudicial question is understood in law to be that which arises in a case the resolution of which is a logical antecedent of the
issue involved in said case and the cognizance of which pertains to another tribunal. 1 The doctrine of prejudicial question comes
into play generally in a situation where civil and criminal actions are pending and the issues involved in both cases are similar or
so closely related that an issue must be pre-emptively resolved in the civil case before the criminal action can proceed. Thus, the
existence of a prejudicial question in a civil case is alleged in the criminal case to cause the suspension of the latter pending final
determination of the former.

The essential elements of a prejudicial question as provided under Section 5, Rule 111 of the Revised Rules of Court are: [a] the
civil action involves an issue similar or intimately related to the issue in the criminal action; and [b] the resolution of such issue
determines whether or not the criminal action may proceed.

The actions involved in the case at bar being respectively civil and administrative in character, it is obvious that technically, there
is no prejudicial question to speak of. Equally apparent, however, is the intimate correlation between said two [2] proceedings,
stemming from the fact that the right of private respondents to eject petitioner from the disputed portion depends primarily on the
resolution of the pending administrative case. For while it may be true that private respondents had prior possession of the lot in
question, at the time of the institution of the ejectment case, such right of possession had been terminated, or at the very least,
suspended by the cancellation by the Land Authority of the Agreement to Sell executed in their favor. Whether or not private
respondents can continue to exercise their right of possession is but a necessary, logical consequence of the issue involved in
the pending administrative case assailing the validity of the cancellation of the Agreement to Sell and the subsequent award of
the disputed portion to petitioner. If the cancellation of the Agreement to Sell and the subsequent award to petitioner are voided,
then private respondents would have every right to eject petitioner from the disputed area. Otherwise, private respondent's light
of possession is lost and so would their right to eject petitioner from said portion.

Faced with these distinct possibilities, the more prudent course for the trial court to have taken is to hold the ejectment
proceedings in abeyance until after a determination of the administrative case. Indeed, logic and pragmatism, if not
jurisprudence, dictate such move. To allow the parties to undergo trial notwithstanding the possibility of petitioner's right of
possession being upheld in the pending administrative case is to needlessly require not only the parties but the court as well to
expend time, effort and money in what may turn out to be a sheer exercise in futility. Thus, 1 Am Jur 2d tells us:

The court in which an action is pending may, in the exercise of a sound discretion, upon proper application for a
stay of that action, hold the action in abeyance to abide the outcome of another pending in another court,
especially where the parties and the issues are the same, for there is power inherent in every court to control
the disposition of causes on its dockets with economy of time and effort for itself, for counsel, and for litigants.
Where the rights parties to the second action cannot be properly determined until the questions raised in the first
action are settled the second action should be stayed.2

While this rule is properly applicable to instances involving two [2] court actions, the existence in the instant case of the same
considerations of Identity of parties and issues, economy of time and effort for the court, the counsels and the parties as well as
the need to resolve the parties' right of possession before the ejectment case may be properly determined, justifies the rule's
analogous application to the case at bar.

Fortich-Celdran, et al. vs. Celdran, et al., 19 SCRA 502, provides another analogous situation. In sustaining the assailed order of
the then Court of First Instance of Misamis Oriental ordering the suspension of the criminal case for falsification of public
document against several persons, among them the subscribing officer Santiago Catane until the civil case involving the issue of
the genuineness of the alleged forged document shall have been decided, this Court cited as a reason therefor its own action on
the administrative charges against said Santiago Catane, as follows:

It should be mentioned here also that an administrative case filed in this Court against Santiago Catane upon
the same charge was held by Us in abeyance, thus:

"As it appears that the genuineness of the document allegedly forged by respondent attorneys
in Administrative Case No. 77 [Richard Ignacio Celdran vs. Santiago Catane, etc., et al.] is
necessarily involved in Civil Case No. R-3397 of the Cebu Court of First Instance, action on the
 herein complaint is withheld until that litigation has finally been decided. Complainant Celdran
shall inform the Court about such decision."3

If a pending civil case may be considered to be in the nature of a prejudicial question to an administrative case, We see no
reason why the reverse may not be so considered in the proper case, such as in the petition at bar. Finally, events occuring
during the pendency of this petition attest to the wisdom of the conclusion herein reached. For in the Manifestation filed by
counsel for petitioner, it was stated that the intervenor Land Authority which later became the Department of Agrarian Reform
had promulgated a decision in the administrative case, L.A. Case No. 968 affiriming the cancellation of Agreement to Sell No.
3482 issued in favor of private respondents. With this development, the folly of allowing the ejectment case to proceed is too
evident to need further elaboration.

WHEREFORE, the instant petition is hereby GRANTED. Civil Case No. 2526 of the then Municipal Court of Malabon, Rizal is
hereby ordered DISMISSED. No Costs.

SO ORDERED.

Gutierrez, Jr., Feliciano, Bidin and Cortes, JJ., concur.