I. 2-3. Scope, Applicability, Admissibility Cases (Evid)

G.R. No.
L-64204 May 31, 1985
DEL ROSARIO & SONS LOGGING ENTERPRISES, INC., petitioner,

vs.
THE NATIONAL LABOR RELATIONS COMMISSION, PAULINO MABUTI, NAPOLEO BORATA, SILVINO TUDIO and CALMAR SECURITY
AGENCY, respondents.
Carlito B. Yebes for petitioner.
Jose T. Gonzales for private respondents.
MELENCIO-HERRERA, J.:
A petition for certiorari seeking the annulment of the National Labor Relations Commission (NLRC) Resolution in ROX Arbitration
Case No. 445-79 entitled Paulino Mabuti, et al. versus Calinar Security Agency, et al., and the affirmance instead, of the Decision of
the Labor Arbiter.
On February 1, 1978, petitioner Del Rosario & Sons Logging Enterprises, Inc. entered into a "Contract of Services" with private
respondent Calinar Security Agency (Security Agency, for short) whereby the latter undertook to supply the former with security
guards at the rate of P300.00 per month for each guard.
On October 4, 1979, Paulino Mabuti, Napoleo Borata and Silvino Tudio filed a Complaint against the Security Agency and petitioner,
for underpayment of salary, non-payment of living allowance, and 13th month pay. Thereafter, five other guards filed their
complaint for the same causes of action.
In its Answer, petitioner contended that complainants have no cause of action against it due to absence of employer-employee
relationship between them. The Security Agency also denied liability alleging that due to the inadequacy of the amounts paid to it
under the Contract of Services, it could not possibly comply with the payments required by labor laws.
Assigned for compulsory arbitration, on December 21, 1979, the Labor Arbiter rendered a Decision dismissing the complaint against
petitioner for want of employer-employee relationship but ordering the Security Agency to pay complainants the amounts sought by
them totalling P2,923.17.
The Security Agency appealed to the NLRC, which modified the Decision of the Labor Arbiter by holding that petitioner is liable to
pay complainants, jointly and severally, with the Security Agency on the ground that petitioner is an indirect employer pursuant to
Articles 106 and 107 of the Labor Code, as amended.
Reconsideration sought by petitioner having been denied, this certiorari petition was instituted contending that the NLRC erred in
giving due course to the appeal despite the fact that it was not under oath and the required appeal fee was not paid; in holding it
jointly and severally liable with the Security Agency; and in refusing to give due course to its Motion for Reconsideration.
The formal defects in the appeal of the Security Agency were not fatal defects. The lack of verification could have been easily
corrected by requiring an oath. 1 The appeal fee had been paid although it was delayed. 2 In the case of Panes vs. Court of Appeals, et
al., 3 we held:
Clearly, failure to pay the docketing fees does not automatically result in the dismissal of the appeal, Dismissal is
discretionary with the Appellate Court (Nawasa vs. Secretary of Public Works and Communications, 16 SCRA 536,
539 [1966]), and discretion must be exercised wisely and prudently, never capriciously, with a view to substantial
justice (Cucio vs. Court of Appeals, 57 SCRA 401 [1974]). Failure to pay the appeal docketing fee confers a directory
and not a mandatory power to dismiss an appeal and such power must be exercised with sound discretion and
with a great deal of circumspection, considering all attendant circumstances. 4
It may be that, as held in Acda vs. MOLE, 119 SCRA 306 [1982], payment of the appeal fee is "by no means a mere technicality but is
an essential requirement in the perfection of an appeal." However, where as in this case, the fee had been paid, unlike in the Acda
case, although payment was delayed, the broader interests of justice and the desired objective of resolving controversies on the
merits demanded that the appeal be given course as, in fact, it was so given by the NLRC. Besides, it was within the inherent power
of the NLRC to have allowed the late payment of the appeal fee.
Moreover, as provided for by Article 221 of the Labor Code "in any proceeding before the Commission or any of the Labor Arbiters,
the rules of evidence prevailing in Courts of law or equity shall not be controlling and it is the spirit and intention of this Code that
the Commission and its members and the Labor Arbiters shall use every and an reasonable means to ascertain the facts in each case
speedily and objectively and without regard to technicalities of law or procedure, all in the interest of due process."
Petitioner's joint and several liability with the Security Agency was correctly adjudged. When petitioner entered into a Contract of
Services with the Security Agency and the latter hired complainants to work as guards for the former, petitioner became an indirect
employer of respondents-complainants pursuant to the unequivocal terms of Articles 106 and 107 of the Labor Code, as amended:
Art. 106. Contractor or subcontractor .— ...
In the event that the contractor or subcontractor fails to pay the wages of his employees in accordance with this
Code, the employer shag be jointly and severally liable with his contractor or subcontractor to such employees to
the extent of the work performed under the contract, in the same manner and extent that he is liable to
employees directly employed by him.
Art. 107. Indirect employer. —The provisions of the immediately preceding Article shall likewise apply to any
person, partnership, association or corporation which, not being an employer, contracts with an independent
contractor for the performance of any work, task, job or project.
The joint and several liability imposed on petitioner and affirmed herein, however, is without prejudice to a claim for reimbursement
by petitioner against the Security Agency for such amounts as petitioner may have to pay to complainants. The Security Agency may
not seek exculpation by claiming that petitioner's payments to it were inadequate. As an employer, it is charged with knowledge of
labor laws and the adequacy of the compensation that it demands for contractual services is its principal concern and not any
other's.
WHEREFORE, the judgment under review is hereby affirmed, without prejudice to petitioner's right to seek reimbursement from
Calinar Security Agency for such amounts as petitioner may have to pay to complainants. Costs against the private respondent.
SO ORDERED.
G.R. No. 176240 October 17, 2008
ROLANDO SASAN, SR., LEONILO DAYDAY, MODESTO AGUIRRE, ALEJANDRO ARDIMER, ELEUTERIO SACIL, WILFREDO JUEGOS,
PETRONILO CARCEDO and CESAR PACIENCIA, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION 4TH DIVISION, EQUITABLE-PCI BANK and HELPMATE, INC., respondents.
DECISION
CHICO-NAZARIO, J.:
Assailed in this Petition for Review under Rule 45 of the Rules of Court are the Decision1 dated 24 April 2006 of the Court of Appeals
in CA-G.R. SP No. 79912, which affirmed the Decision dated 22 January 2003 of the National Labor Relations Commission (NLRC)
in NLRC Case No. V-000241-2002 finding that Helpmate, Inc. (HI) is a legitimate independent job contractor and that the petitioners
were not illegally dismissed from work; and the Resolution2 dated 31 October 2006 of the same court denying the Motion for
Reconsideration filed by the petitioners.
Respondent Equitable-PCI Bank (E-PCIBank),3 a banking entity duly organized and existing under and by virtue of Philippine laws,
entered into a Contract for Services4 with HI, a domestic corporation primarily engaged in the business of providing janitorial and
messengerial services. Pursuant to their contract, HI shall hire and assign workers to E-PCIBank to perform janitorial/messengerial
and maintenance services. The contract was impliedly renewed year after year. Petitioners Rolando Sasan, Sr.,5 Leonilo
Dayday,6 Modesto Aguirre,7 Alejandro Ardimer,8 Eleuterio Sacil,9 Wilfredo Juegos,10 Petronilo Carcedo,11 and Cesar Peciencia12 were
among those employed and assigned to E-PCIBank at its branch along Gorordo Avenue, Lahug, Cebu City, as well as to its other
branches in the Visayas.13
O 23 July 2001, petitioners filed with the Arbitration Branch of the NLRC in Cebu City separate complaints14 against E-PCIBank and HI
for illegal dismissal, with claims for separation pay, service incentive leave pay, allowances, damages, attorney’s fees and costs. Their
complaints were docketed as NLRC RAB-VII Case No. 07-1381-2001 and raffled to Labor Arbiter Jose G. Gutierrez (Labor Arbiter
Gutierrez) for their proper disposition. Subsequently, on 22 August 2001, the petitioners15 amended their complaints to include a
claim for 13th month-pay.
Several conciliation hearings were scheduled by Labor Arbiter Gutierrez but the parties still failed to arrive at a mutually beneficial
settlement; hence, Labor Arbiter Gutierrez ordered that they submit their respective position papers.
In their position papers, petitioners claimed that they had become regular employees of E-PCIBank with respect to the activities for
which they were employed, having continuously rendered janitorial and messengerial services to the bank for more than one year;
that E-PCIBank had direct control and supervision over the means and methods by which they were to perform their jobs; and that
their dismissal by HI was null and void because the latter had no power to do so since they had become regular employees of E-
PCIBank.
For its part, E-PCIBank averred that it entered into a Contract for Services with HI, an independent job contractor which hired and
assigned petitioners to the bank to perform janitorial and messengerial services thereat. It was HI that paid petitioners’ wages,
monitored petitioners’ daily time records (DTR) and uniforms, and exercised direct control and supervision over the petitioners and
that therefore HI has every right to terminate their services legally. E-PCIBank could not be held liable for whatever misdeed HI had
committed against its employees.
HI, on the other hand, asserted that it was an independent job contractor engaged in the business of providing janitorial and related
services to business establishments, and E-PCIBank was one of its clients. Petitioners were its employees, part of its pool of
janitors/messengers assigned to E-PCIBank. The Contract for Services between HI and E-PCIBank expired on 15 July 2000. E-PCIBank
no longer renewed said contract with HI and, instead, bidded out its janitorial requirements to two other job contractors, Able
Services and Puritan. HI designated petitioners to new work assignments, but the latter refused to comply with the same. Petitioners
were not dismissed by HI, whether actually or constructively, thus, petitioners’ complaints before the NLRC were without basis.
Labor Arbiter Gutierrez focused on the following issues: (a) whether petitioners were regular employees of HI; (b) whether
petitioners were illegally dismissed from their employment; and (c) whether petitioners were entitled to their money claims.
On 7 January 2002, on the basis of the parties’ position papers and documentary evidence, Labor Arbiter Gutierrez rendered a
Decision finding that HI was not a legitimate job contractor on the ground that it did not possess the required substantial capital or
investment to actually perform the job, work, or service under its own account and responsibility as required under the Labor
Code.16 HI is therefore a labor-only contractor and the real employer of petitioners is E-PCIBank which is held liable to petitioners.
According to Labor Arbiter Gutierrez:
[T]he undisputed facts show that the [herein petitioners] were made to perform not only as janitors but also as messengers, drivers
and one of them even worked as an electrician. For us, these jobs are not only directly related to the main business of the principal
but are, likewise deemed necessary in the conduct of respondent Equitable-PCI Bank’s principal business. Thus, based on the above,
we so declare that the [petitioners] are employees of respondent Equitable-PCI Bank. And having worked with respondent
Equitable-PCI Bank for more than one (1) year, they are deemed regular employees. They cannot, therefore, be removed from
employment without cause and without due process, which is wanting in this case. Hence, the severance of their employment in the
guise of termination of contract is illegal.17
In the dispositive portion of his 7 January 2002 Decision, Labor Arbiter Gutierrez awarded to petitioners the following amounts:
I. – CESAR PACIENCIA
a) Backwages
= ₱25,840.00
July 15, 2001 to January 8, 2002
= ₱190.00 per day
= 5 months and 6 days
= 136 days x ₱190.00

b) Separation Pay =₱12,350.00
June 10, 1996 to July 15, 2001
= 5 years
=₱190.00 x 26 days x 5 years / 2
c) 13th Month Pay = ₱4,940.00
= ₱190.00 x 26 days
Total ₱43,130.00
II – Dominador Suico, Jr. (did not file Amended Complaint)
a) Backwages = ₱25,840.00
July 15, 2001 to January 15, 2002
same as Paciencia
b) Separation Pay = ₱6,175.00
Feb. 2, 1999 to July 15, 2001
= ₱190.00 x 26 days x 2.5 years / 2
Total = ₱32,015.00
III – Roland Mosquera (did not file Amended Complaint)
(same as Paciencia)
March 8, 1998 to July 15, 2001
= ₱190.00 x 26 days x 3 yrs. / 2
Total = ₱33,250.00
IV – Petronillo Carcedo
(same as Paciencia)
Sept. 16, 1984 to July 15, 2001
= ₱190.00 x 26 days x 17 yrs. / 2
c) 13th Month Pay = ₱4,940.00
= ₱190.00 x 26 days
Total = ₱72,770.00
V – Rolando Sasan, Sr.
(same as Paciencia)
October 1989 to July 15, 2001
= ₱190.00 x 26 days x 12 yrs. / 2
c) 13th Month Pay = ₱4,940.00
= ₱190.00 x 26 days
Total = ₱60,420.00
VI – Leonilo Dayday
(same as Paciencia)
Feb. 8, 1983 to July 15, 2001
= ₱190.00 x 26 days x 18 yrs. / 2
c) 13th Month Pay = ₱4,940.00
= ₱190.00 x 26 days
Total = ₱75,240.00
VII – Eleuterio Sacil
(same as Paciencia)
June 2, 1992 to July 15, 2001
= ₱190.00 x 26 days x 9 yrs. / 2
c) 13th Month Pay = ₱4,940.00
= ₱190.00 x 26 days
Total = ₱53,010.00
VIII – Mario Juntilla
(same as Pacencia)
October 7, 1987 to July 15, 2001
= ₱190.00 x 26 days x 14 yrs. / 2
c) 13th Month Pay = ₱4,940.00
= ₱190.00 x 26 days
Total = ₱65,360.00
IX – Wilfredo Juegos
(same as Pacencia)
July 23, 1990 to July 15, 2001
= ₱190.00 x 26 days x 11 yrs. / 2
c) 13th Month Pay = ₱4,840.00
= ₱190.00 x 26 days
Total = ₱57,950.00
X – Modesto Aguirre
(same as Paciencia)
b) Separation Pay
= Jan. 5, 1992 to July 15, 2001 = ₱23,465.00
= ₱190.00 x 26 days x 9.5 yrs. / 2

c) 13th Month Pay = ₱4,940.00
= ₱190.00 x 26 days
Total = ₱54,245.00
XI – Alejandro Ardimer
(same as Paciencia)
= Jan. 20, 1990 to July 15, 2001
= ₱190.00 x 26 days x 11.5 yrs. / 2
c) 13th Month Pay = ₱4,940.00
= ₱190.00 x 26 days
Total = ₱59,185.00
xxxx
WHEREFORE, the foregoing premises considered, judgment is hereby rendered directing the respondents Equitable PCI Bank and
Helpmate, Inc. to pay jointly and solidarily the complainants as follows:
1. Cesar Paciencia - P 43,130.00

2. Dominador Suico, Jr. - 32,015.00
3. Roland Mosquera - 33,250.00
4. Petronilo Carceda - 72,770.00
5. Roland Sasan, Sr. - 60,420.00
6. Leonilo Dayday - 75,240.00
7. Eleuterio Sacil - 53,010.00
8. Mario Juntilla - 65,360.00
9. Wilfredo Juegos - 57,950.00
10. Modesto Aguirre - 54,245.00
11. Alejandro Ardimer - 59,185.00
TOTAL - ₱606,575.0018
Aggrieved by the decision of Labor Arbiter Gutierrez, respondents E-PCIBank and HI appealed the same to the NLRC, 4th Division,
stationed in Cebu City. Their appeals were docketed as NLRC Case No. V-000241-2002. In support of its allegation that it was a
legitimate job contractor, HI submitted before the NLRC several documents which it did not present before Labor Arbiter Gutierrez.
These are:
1. Certificate of Filing of Certificate of Increase of Capital Stock, Certificate of Filing Amended Articles of Incorporation, and General
Information Sheet Stock Corporation of HI showing therein that it increased its authorized capital stock from ₱1,500,000.00 to
₱20,000,000.00 on 12 March 1999 with the Securities and Exchange Commission;
2. Audited Financial Statement of HI showing therein that it has Total Assets of ₱20,939,935.72 as of 31 December 2000;
3. Transfer Certificate of Title No. 110173 and Tax Declaration No. GR2K-09-063-00582 registered under the name of HI showing that
it has a parcel of land with Market Value of ₱1,168,860.00 located along Rizal Avenue (now Bacalso Avenue), Cebu City, and
4. Tax Declaration No. GR2K-09-063-00583 registered under the name of HI showing that it has a commercial building constructed
on the preceding lot located along Bacalso Avenue, Cebu City with market value of ₱2,515,170.00.19
The NLRC promulgated its Decision on 22 January 2003 modifying the ruling of Labor Arbiter Gutierrez. The NLRC took into
consideration the documentary evidence presented by HI for the first time on appeal and, on the basis thereof, declared HI as a
highly capitalized venture with sufficient capitalization, which cannot be considered engaged in "labor-only contracting."
On the charge of illegal dismissal, the NLRC ruled that:
The charge of illegal dismissal was prematurely filed. The record shows that barely eight (8) days from 15 July 2001 when the
complainants were placed on a temporary "off-detail," they filed their complaints on 23 July 2001 and amended their complaints on
22 August 2001 against the respondents on the presumption that their services were already terminated. Temporary "off-detail" is
not equivalent to dismissal. x x x.20
The NLRC deleted Labor Arbiter Gutierrez’s award of backwages and separation pay, but affirmed his award for 13th month pay and
attorney’s fees equivalent to ten percent (10%) of the 13th month pay, to the petitioners.21 Thus, the NLRC decreed in its 22 January
2003 Decision, the payment of the following reduced amounts to petitioners:
WHEREFORE, premises considered, the decision of Labor Arbiter Jose G. Gutierrez dated 7 January 2002 is MODIFIED, to wit:
Ordering respondents Helpmate, Inc. and Equitable PCI Bank to jointly and severally22 pay the complainants of their 13th month pay
and attorney’s fees in the aggregate amount of Forty-Three Thousand Four Hundred Seventy-Two and 00/100 (₱43,472.00), broken
down as follows:
1. Aguirre, Modesto - P 5,434.00
2. Ardimer, Alejandro - 5,434.00
3. Carcedo, Petronilo - 5,434.00
4. Dayday, Leonilo - 5,434.00
5. Juegos, Wilfredo - 5,434.00
6. Juntilla, Mario - 5,434.00
7. Paciencia, Cesar - 5,434.00
8. Sacil, Eleuterio - 5,434.00
TOTAL ₱43,472.0023
Petitioners’ Motion for Reconsideration was denied by the NLRC in its Resolution dated 1 July 2003.24
Distressed by the decision of the NLRC, petitioners sought recourse with the Court of Appeals by filing a Petition
for Certiorari25 under Rule 65 of the 1997 Rules of Civil Procedure docketed as CA-G.R. SP No. 79912.
In its Decision dated 24 April 2006, the Court of Appeals affirmed the findings of the NLRC that HI was a legitimate job contractor
and that it did not illegally dismiss petitioners:
As to the question of whether or not, as a legitimate independent job contractor, respondent HI illegally dismissed the petitioners.
We rule in the negative.
It is undisputed that the contract between respondent HI and its client E-PCIBank expired on July 15, 2000. The record shows that
after said expiration, respondent HI offered the petitioners new work assignments to various establishments which are HI’s clients.
The petitioners, therefore, were not even placed on "floating status." They simply refused, without justifiable reason, to assume
their new work assignments which refusal was tantamount to abandonment. There being no illegal dismissal, petitioners are not
entitled to backwages or separation pay.26
The fallo of the 24 April 2006 Decision of the appellate court reads:
WHEREFORE, in view of the foregoing premises, judgment is hereby rendered by us DENYING the petition filed in this case and
AFFIRMING the decision of the NLRC, Fourth Division, in NLRC Case No. V-000145-2003 promulgated on June 22, 2003.27
Petitioners now come before us via the instant Petition raising the following issues:
WHETHER OR NOT THE HONORABLE COURT OF APPEALS ACTED IN EXCESS OF THEIR JURISDICTION AND/OR COMMITTED GRAVE
ABUSE OF DISCRETION IN UPHOLDING THE NLRC 4TH DIVISION’S DECISION AND GRAVELY ERRED IN:
I. ACCEPTING AND APPRECIATING THE PIECES OF EVIDENCE SUBMITTED BY RESPONDENTS DURING APPEAL, ALL EXISTING DURING
THE TIME THE NLRC RAB 7’S TRIAL, CONTRARY TO THIS HONORABLE COURT’S PREVIOUS ESTABLISHED DECISIONS.
II. REVERSING, WITHOUT ANY LEGAL BASIS, THE FACTUAL FINDING OF NLRC RAB 7 THAT THE RESPONDENT HI WAS LABOR ONLY
CONTRACTOR.
III. RULING, WITHOUT ANY LEGAL BASIS, THAT THE ILLEGAL DISMISSAL COMPLAINTS WERE PREMATURELY FILED.28
Before proceeding to the substantive issues, we first address the procedural issues raised by petitioners.
Petitioners object to the acceptance and consideration by the NLRC of the evidence presented by HI for the first time on appeal. This
is not a novel procedural issue, however, and our jurisprudence is already replete with cases29 allowing the NLRC to admit evidence,
not presented before the Labor Arbiter, and submitted to the NLRC for the first time on appeal. Technical rules of evidence are not
binding in labor cases. Labor officials should use every reasonable means to ascertain the facts in each case speedily and objectively,
without regard to technicalities of law or procedure, all in the interest of due process.30
The submission of additional evidence before the NLRC is not prohibited by its New Rules of Procedure. After all, rules of evidence
prevailing in courts of law or equity are not controlling in labor cases. The NLRC and labor arbiters are directed to use every and all
reasonable means to ascertain the facts in each case speedily and objectively, without regard to technicalities of law and procedure
all in the interest of substantial justice. In keeping with this directive, it has been held that the NLRC may consider evidence, such as
documents and affidavits, submitted by the parties for the first time on appeal. The submission of additional evidence on appeal
does not prejudice the other party for the latter could submit counter-evidence.31
In Clarion Printing House, Inc. v. National Labor Relations Commission,32 we again emphasized that:
[T]he NLRC is not precluded from receiving evidence, even for the first time on appeal, because technical rules of procedure are not
binding in labor cases.
The settled rule is that the NLRC is not precluded from receiving evidence on appeal as technical rules of evidence are not binding in
labor cases. In fact, labor officials are mandated by the Labor Code to use every and all reasonable means to ascertain the facts in
each case speedily and objectively, without regard to technicalities of law or procedure, all in the interest of due process. Thus,
in Lawin Security Services v. NLRC, and Bristol Laboratories Employees’ Association-DFA v. NLRC, we held that even if the evidence
was not submitted to the labor arbiter, the fact that it was duly introduced on appeal to the NLRC is enough basis for the latter to be
more judicious in admitting the same, instead of falling back on the mere technicality that said evidence can no longer be considered
on appeal. Certainly, the first course of action would be more consistent with equity and the basic notions of fairness.
For the same reasons, we cannot find merit in petitioners’ protestations against the documentary evidence submitted by HI because
they were mere photocopies. Evidently, petitioners are invoking the best evidence rule, espoused in Section 3, Rule130 of the Rules
of Court. It provides that:
Section 3. – Original document must be produced; exceptions. – When the subject of inquiry is the contents of a document, no
evidence shall be admissible other than the original document itself x x x.
The above provision explicitly mandates that when the subject of inquiry is the contents of a document, no evidence shall be
admissible other than the original document itself. Notably, certified true copies of these documents, acceptable under the Rules of
Court33 were furnished to the petitioners. Even assuming that petitioners were given mere photocopies, again, we stress that
proceedings before the NLRC are not covered by the technical rules of evidence and procedure as observed in the regular courts.
Technical rules of evidence do not apply if the decision to grant the petition proceeds from an examination of its sufficiency as well
as a careful look into the arguments contained in position papers and other documents.34
Petitioners had more than adequate opportunity when they filed their motion for reconsideration before the NLRC, their Petition to
the Court of Appeals and even to this Court, to refute or present their counter-evidence to the documentary evidence presented by
HI. Having failed in this respect, petitioners cannot now be heard to complain about these documentary evidences presented by HI
upon which the NLRC and the Court of Appeals based its finding that HI is a legitimate job contractor.
The essence of due process is simply an opportunity to be heard, or as applied to administrative proceedings, a fair and reasonable
opportunity to explain one's side. It is also an opportunity to seek a reconsideration of the action or ruling complained of. It is not
the denial of the right to be heard but denial of the opportunity to be heard that constitutes violation of due process of law.
Petitioners herein were afforded every opportunity to be heard and to seek reconsideration of the adverse judgment against them.
They had every opportunity to strengthen their positions by presenting their own substantial evidence to controvert those
submitted by E-PCIBank and HI before the NLRC, and even before the Court of Appeals. It cannot win its case by merely raising
unsubstantiated doubt or relying on the weakness of the adverse parties’ evidence.
We now proceed to the resolution of the substantive issues submitted by petitioners for our consideration, particularly, whether HI
is a labor-only contactor and E-PCIBank should be deemed petitioners’ principal employer; and whether petitioners were illegally
dismissed from their employment.
Permissible job contracting or subcontracting refers to an arrangement whereby a principal agrees to put out or farm out to a
contractor or subcontractor the performance or completion of a specific job, work or service within a definite or predetermined
period, regardless of whether such job, work or service is to be performed or completed within or outside the premises of the
principal.35 A person is considered engaged in legitimate job contracting or subcontracting if the following conditions concur:
(a) The contractor or subcontractor carries on a distinct and independent business and undertakes to perform the job, work or
service on its own account and under its own responsibility according to its own manner and method, and free from the control and
direction of the principal in all matters connected with the performance of the work except as to the results thereof;
(b) The contractor or subcontractor has substantial capital or investment; and
(c) The agreement between the principal and contractor or subcontractor assures the contractual employees entitlement to all labor
and occupational safety and health standards, free exercise of the right to self-organization, security of tenure, and social and
welfare benefits.36
In contrast, labor-only contracting, a prohibited act, is an arrangement where the contractor or subcontractor merely recruits,
supplies or places workers to perform a job, work or service for a principal.37 In labor-only contracting, the following elements are
present:
(a) The contractor or subcontractor does not have substantial capital or investment to actually perform the job, work or service
under its own account and responsibility; and
(b) The employees recruited, supplied or placed by such contractor or subcontractor are performing activities which are directly
related to the main business of the principal.38
In distinguishing between permissible job contracting and prohibited labor-only contracting,39 we elucidated in Vinoya v. National
Labor Relations Commission,40 that it is not enough to show substantial capitalization or investment in the form of tools,
equipment, etc. Other facts that may be considered include the following: whether or not the contractor is carrying on an
independent business; the nature and extent of the work; the skill required; the term and duration of the relationship; the right to
assign the performance of specified pieces of work; the control and supervision of the work to another; the employer’s power with
respect to the hiring, firing and payment of the contractor’s workers; the control of the premises; the duty to supply premises, tools,
appliances, materials and labor; and the mode and manner or terms of payment.41 Simply put, the totality of the facts and the
surrounding circumstances of the case are to be considered.42 Each case must be determined by its own facts and all the features of
the relationship are to be considered.43
In the case at bar, we find substantial evidence to support the finding of the NLRC, affirmed by the Court of Appeals, that HI is a
legitimate job contractor.
We take note that HI has been issued by the Department of Labor and Employment (DOLE) Certificate of Registration44 Numbered
VII-859-1297-048. The said certificate states among other things:
"CERTIFICATE OF REGISTRATION
Numbered VII-859-1297-048
is issued to
HELPMATE, INCORPORATED
330 N. Bacalso Avenue, Cebu City
for having complied with the requirements as provided for under the Labor Code, as amended, and its Implementing Rules and
having paid the registration fee in the amount of ONE HUNDRED PESOS (P100.00) per Official Receipt Number 9042769, dated
October 16, 1997.
In witness whereof, and by authority vested in me by the Labor Code, as amended, and its Implementing Rules specifically
Department Order No. 10 series of 1997, I have hereunto set my hand and affixed the Official on this 23rd day of December 1997."45
Having been issued by a public officer, this certification carries with it the presumption that it was issued in the regular performance
of official duty.46 In the absence of proof, petitioner’s bare assertion cannot prevail over this presumption. Moreover, the DOLE
being the agency primarily responsible for regulating the business of independent job contractors, we can presume in the absence of
evidence to the contrary that it thoroughly evaluated the requirements submitted by HI as a precondition to the issuance of the
Cerificate of Registration.
The evidence on record also shows that HI is carrying on a distinct and independent business from E-PCIBank. The employees of HI
are assigned to clients to perform janitorial and messengerial services, clearly distinguishable from the banking services in which E-
PCIBank is engaged.
Despite the afore-mentioned compliance by HI with the requisites for permissible job contracting, Labor Arbiter Gutierrez still
declared that HI was engaged in prohibited labor-only contracting because it did not possess substantial capital or investment to
actually perform the job, work or service under its own account or responsibility. Both the NLRC and the Court of Appeals ruled to
the contrary, and we agree.
"Substantial capital or investment" refers to capital stocks and subscribed capitalization in the case of corporations, tools,
equipments, implements, machineries and work premises, actually and directly used by the contractor or subcontractor in the
performance or completion of the job, work or service contracted out.47 An independent contractor must have either substantial
capital or investment in the form of tools, equipment, machineries, work premises, among others. The law does not require both
substantial capital and investment in the form of tools, equipment, machineries, etc.48 It is enough that it has substantial capital. In
the case of HI, it has proven both.
We have expostulated that once it is established that an entity such as in this case, HI has substantial capital, it was no longer
necessary to adduce further evidence to prove that it does not fall within the purview of "labor-only" contracting.49 There is even no
need for HI to refute the contention of petitioners that some of the activities they performed such as those of messengerial services
are directly related to the principal business of E- PCIBank.
In any event, we have earlier declared that while these services rendered by the petitioners as janitors, messengers and drivers are
considered directly related to the principal business of a bank, in this case E-PCIBank, nevertheless, they are not necessary in the
conduct of its (E-PCIBANK’s) principal business.50
HI has substantial capital in the amount of ₱20,939,935.72. It has its own building where it holds office and it has been engaged in
business for more than a decade now.51 As observed by the Court of Appeals, surely, such a well-established business entity cannot
be considered a labor-only contractor.
Etched in an unending stream of cases are four standards in determining the existence of an employer-employee relationship,
namely: (a) the manner of selection and engagement of the putative employee; (b) the mode of payment of wages; (c) the presence
or absence of power of dismissal; and, (d) the presence or absence of control of the putative employee’s conduct. Most
determinative among these factors is the so-called "control test."52
The presence of the first requisite for the existence of an employer-employee relationship to wit, the selection and engagement of
the employee is shown by the fact that it was HI which selected and engaged the services of petitioners as its employees. This is
fortified by the provision in the contract of services between HI and E-PCIBank which states:
Selection, Engagement, Discharge. [HI] shall have exclusive discretion in the selection, engagement, investigation, discipline and
discharge of its employees.53
On the second requisite regarding the payment of wages, it was HI who paid petitioners their wages and who provided their daily
time records and uniforms and other materials necessary for the work they performed. Therefore, it is HI who is responsible for
petitioner’s claims for wages and other employee’s benefits. Precisely, the contract of services between HI and E-PCIBank reveals
the following:
Indemnity for Salaries and Benefits, etc. [HI] shall be responsible for the salaries, allowances, overtime and holiday pay, and other
benefits of its personnel including withholding taxes.54
As to the third requisite on the power to control the employee’s conduct, and the fourth requisite regarding the power of dismissal,
again E-PCIBank did not have the power to control petitioners with respect to the means and methods by which their work was to
be accomplished. It likewise had no power of dismissal over the petitioners. All that E-PCIBank could do was to report to HI any
untoward act, negligence, misconduct or malfeasance of any employee assigned to the premises. The contract of services between
E-PCIBank and HI is noteworthy. It states:
[HI] shall have the entire charge, control and supervision over all its employees who may be fielded to [E-PCIBank]. For this purpose,
[HI] shall assign a regular supervisor of its employees who may be fielded to the Bank and which regular supervisor shall exclusively
supervise and control the activities and functions defined in Section 1 hereof. x x x.55
All these circumstances establish that HI undertook said contract on its account, under its own responsibility, according to its own
manner and method, and free from the control and direction of E-PCIBank. Where the control of the principal is limited only to the
result of the work, independent job contracting exists. The janitorial service agreement between E-PCIBank and HI is definitely a case
of permissible job contracting.
Considering the foregoing, plus taking judicial notice of the general practice in private, as well as in government institutions and
industries, of hiring an independent contractor to perform special services,56 ranging from janitorial, security and even technical
services, we can only conclude that HI is a legitimate job contractor. As such legitimate job contractor, the law creates an employer-
employee relationship between HI and petitioners57 which renders HI liable for the latter’s claims.
In view of the preceding conclusions, petitioners will never become regular employees of E-PCIBank regardless of how long they
were working for the latter.58
We further rule that petitioners were not illegally dismissed by HI. Upon the termination of the Contract of Service between HI and
E-PCIBank, petitioners cannot insist to continue to work for the latter. Their pull-out from E-PCIBank did not constitute illegal
dismissal since, first, petitioners were not employees of E-PCIBank; and second, they were pulled out from said assignment due to
the non-renewal of the Contract of Service between HI and E-PCIBank. At the time they filed their complaints with the Labor Arbiter,
petitioners were not even dismissed by HI; they were only "off-detail" pending their re-assignment by HI to another client. And when
they were actually given new assignments by HI with other clients,59 petitioners even refused the same. As the NLRC pronounced,
petitioners’ complaint for illegal dismissal is apparently premature.
WHEREFORE, premises considered, the Petition is DENIED for lack of merit. The Decision dated 24 April 2006 and Resolution dated
31 October 2006 of the Court of Appeals are AFFIRMED. Costs against petitioners.
SO ORDERED.
[G.R. No. 127240. March 27, 2000.]
ONG CHIA, Petitioner, v. REPUBLIC OF THE PHILIPPINES and THE COURT OF APPEALS, Respondents.
DECISION
MENDOZA, J.:
This is a petition for review of the decision 1 of the Court of Appeals reversing the decision of the Regional Trial Court, Branch 24,
Koronadal, South Cotabato 2 admitting petitioner Ong Chia to Philippine citizenship.chanrobles virtuallawlibrary:red
The facts are as follows:chanrob1es virtual 1aw library
Petitioner was born on January 1, 1923 in Amoy, China. In 1932, as a nine-year old boy, he arrived at the port of Manila on board the
vessel "Angking." Since then, he has stayed in the Philippines where he found employment and eventually started his own business,
married a Filipina, with whom he had four children. On July 4, 1989, at the age of 66, he filed a verified petition to be admitted as a
Filipino citizen under C.A. No. 473, otherwise known as the Revised Naturalization Law, as amended. Petitioner, after stating his
qualifications as required in §2, and lack of the disqualifications enumerated in §3 of the law, stated —
17. That he has heretofore made (a) petition for citizenship under the provisions of Letter of Instruction No. 270 with the Special
Committee on Naturalization, Office of the Solicitor General, Manila, docketed as SCN Case No. 031776, but the same was not acted
upon owing to the fact that the said Special Committee on Naturalization was not reconstituted after the February, 1986 revolution
such that processing of petitions for naturalization by administrative process was suspended;
During the hearings, petitioner testified as to his qualifications and presented three witnesses to corroborate his testimony. So
impressed was Prosecutor Isaac Alvero V. Moran with the testimony of petitioner that, upon being asked by the court whether the
State intended to present any witness against him, he remarked:chanrobles virtuallawlibrary
Actually, Your Honor, with the testimony of the petitioner himself which is rather surprising, in the sense that he seems to be well-
versed with the major portion of the history of the Philippines, so, on our part, we are convinced, Your Honor Please, that petitioner
really deserves to be admitted as a citizen of the Philippines. And for this reason, we do not wish to present any evidence to
counteract or refute the testimony of the witnesses for the petitioner, as well as the petitioner himself . 3
Accordingly, on August 25, 1999, the trial court granted the petition and admitted petitioner to Philippine citizenship. The State,
however, through the Office of the Solicitor General, appealed contending that petitioner: (1) failed to state all the names by which
he is or had been known; (2) failed to state all his former places of residence in violation of C.A. No. 473, §7; (3) failed to conduct
himself in a proper and irreproachable manner during his entire stay in the Philippines, in violation of §2; (4) has no known lucrative
trade or occupation and his previous incomes have been insufficient or misdeclared, also in contravention of §2; and (5) failed to
support his petition with the appropriate documentary evidence. 4
Annexed to the State’s appellant’s brief was a copy of a 1977 petition for naturalization filed by petitioner with the Special
Committee on Naturalization in SCN Case No. 031767, 5 in which petitioner stated that in addition to his name of "Ong Chia," he had
likewise been known since childhood as "Loreto Chia Ong." As petitioner, however, failed to state this other name in his 1989
petition for naturalization, it was contended that his petition must fail. 6 The State also annexed income tax returns 7 allegedly filed
by petitioner from 1973 to 1977 to show that his net income could hardly support himself and his family. To prove that petitioner
failed to conduct himself in a proper and irreproachable manner during his stay in the Philippines, the State contended that,
although petitioner claimed that he and Ramona Villaruel had been married twice, once before a judge in 1953, and then again in
church in 1977, petitioner actually lived with his wife without the benefit of marriage from 1953 until they were married in 1977. It
was alleged that petitioner failed to present his 1953 marriage contract, if there be any. The State also annexed a copy of
petitioner’s 1977 marriage contract 8 and a Joint-Affidavit 9 executed by petitioner and his wife. These documents show that when
petitioner married Ramona Villaruel on February 23, 1977, no marriage license had been required in accordance with Art. 76 of the
Civil Code because petitioner and Ramona Villaruel had been living together as husband and wife since 1953 without the benefit of
marriage. This, according to the State, belies his claim that when he started living with his wife in 1953, they had already been
married.
The State also argued that, as shown by petitioner’s Immigrant Certificate of Residence, 10 petitioner resided at "J.M. Basa Street,
Iloilo," but he did not include said address in his petition.
On November 15, 1996, the Court of Appeals rendered its decision which, as already noted, reversed the trial court and denied
petitioner’s application for naturalization. It ruled that due to the importance of naturalization cases, the State is not precluded from
raising questions not presented in the lower court and brought up for the first time on appeal. 11 The appellate court
held:chanroblesvirtual|awlibrary
As correctly observed by the Office of the Solicitor General, petitioner Ong Chia failed to state in this present petition for
naturalization his other name, "LORETO CHIA ONG," which name appeared in his previous application under Letter of Instruction No.
270. Names and pseudonyms must be stated in the petition for naturalization and failure to include the same militates against a
decision in his favor . . . This is a mandatory requirement to allow those persons who know (petitioner) by those other names to
come forward and inform the authorities of any legal objection which might adversely affect his application for citizenship.
Furthermore, Ong Chia failed to disclose in his petition for naturalization that he formerly resided in "J.M. Basa St., Iloilo" and
"Alimodian, Iloilo." Section 7 of the Revised Naturalization Law requires the applicant to state in his petition "his present and former
places of residence." This requirement is mandatory and failure of the petitioner to comply with it is fatal to the petition. As
explained by the Court, the reason for the provision is to give the public, as well as the investigating agencies of the government,
upon the publication of the petition, an opportunity to be informed thereof and voice their objections against the petitioner. By
failing to comply with this provision, the petitioner is depriving the public and said agencies of such opportunity, thus defeating the
purpose of the law. . .
Ong Chia had not also conducted himself in a proper and irreproachable manner when he lived-in with his wife for several years, and
sired four children out of wedlock. It has been the consistent ruling that the "applicant’s 8-year cohabitation with his wife without
the benefit of clergy and begetting by her three children out of wedlock is a conduct far from being proper and irreproachable as
required by the Revised Naturalization Law", and therefore disqualifies him from becoming a citizen of the Philippines by
naturalization. . .
Lastly, petitioner Ong Chia’s alleged annual income in 1961 of P5,000.00, exclusive of bonuses, commissions and allowances, is not
lucrative income. His failure to file an income tax return "because he is not liable for income tax yet" confirms that his income is low.
. . "It is not only that the person having the employment gets enough for his ordinary necessities in life. It must be shown that the
employment gives one an income such that there is an appreciable margin of his income over expenses as to be able to provide for
an adequate support in the event of unemployment, sickness, or disability to work and thus avoid one’s becoming the object of
charity or public charge.." . . Now that they are in their old age, petitioner Ong Chia and his wife are living on the allowance given to
them by their children. The monthly pension given by the elder children of the applicant cannot be added to his income to make it
lucrative because like bonuses, commissions and allowances, said pensions are contingent, speculative and precarious. . .
Hence, this petition based on the following assignment of errors:chanrob1es virtual 1aw library
I. THE COURT OF APPEALS GRAVELY ABUSED ITS DISCRETION IN RULING THAT IN NATURALIZATION CASES, THE APPELLATE COURT
CAN DENY AN APPLICATION FOR PHILIPPINE CITIZENSHIP ON THE BASIS OF DOCUMENTS NOT PRESENTED BEFORE THE TRIAL COURT
AND NOT FORMING PART OF THE RECORDS OF THE CASE.
II.. THE FINDING OF THE COURT OF APPEALS THAT THE PETITIONER HAS BEEN KNOWN BY SOME OTHER NAME NOT STATED IN HIS
PETITION IS NOT SUPPORTED BY THE EVIDENCE ON RECORD.chanrobles.com : law library
III. CONTRARY TO THE FINDING OF THE COURT OF APPEALS, THE PETITIONER STATED IN HIS PETITION AND ITS ANNEXES HIS
PRESENT AND FORMER PLACES OF RESIDENCE.
IV. THE FINDING OF THE COURT OF APPEALS THAT THE PETITIONER FAILED TO CONDUCT HIMSELF IN A PROPER AND
IRREPROACHABLE MANNER IS NOT SUPPORTED BY THE EVIDENCE ON RECORD.
Petitioner’s principal contention is that the appellate court erred in considering the documents which had merely been annexed by
the State to its appellant’s brief and, on the basis of which, justified the reversal of the trial court’s decision. Not having been
presented and formally offered as evidence, they are mere "scrap(s) of paper devoid of any evidentiary value," 12 so it was argued,
because under Rule 132, §34 of the Revised Rules on Evidence, the court shall consider no evidence which has not been formally
offered.
The contention has no merit. Petitioner failed to note Rule 143 13 of the Rules of Court which provides that —
These rules shall not apply to land registration, cadastral and election cases, naturalization and insolvency proceedings, and other
cases not herein provided for, except by analogy or in a suppletory character and whenever practicable and convenient. (Emphasis
added)
Prescinding from the above, the rule on formal offer of evidence (Rule 132, §34) now being invoked by petitioner is clearly not
applicable to the present case involving a petition for naturalization. The only instance when said rules may be applied by analogy or
suppletorily in such cases is when it is "practicable and convenient." That is not the case here, since reliance upon the documents
presented by the State for the first time on appeal, in fact, appears to be the more practical and convenient course of action
considering that decisions in naturalization proceedings are not covered by the rule on res judicata. 14 Consequently, a final
favorable judgment does not preclude the State from later on moving for a revocation of the grant of naturalization on the basis of
the same documents.
Petitioner claims that as a result of the failure of the State to present and formally offer its documentary evidence before the trial
court, he was denied the right to object against their authenticity, effectively depriving him of his fundamental right to procedural
due process. 15 We are not persuaded. Indeed, the reason for the rule prohibiting the admission of evidence which has not been
formally offered is to afford the opposite party the chance to object to their admissibility. 16 Petitioner cannot claim that he was
deprived of the right to object to the authenticity of the documents submitted to the appellate court by the State. He could have
included his objections, as he, in fact, did, in the brief he filed with the Court of Appeals, thus:chanrob1es virtual 1aw library
The authenticity of the alleged petition for naturalization (SCN Case-No. 031767) which was supposedly filed by Ong Chia under LOI
270 has not been established. In fact, the case number of the alleged petition for naturalization . . .is 031767 while the case number
of the petition actually filed by the appellee is 031776. Thus, said document is totally unreliable and should not be considered by the
Honorable Court in resolving the instant appeal. 17
Indeed, the objection is flimsy as the alleged discrepancy is trivial, and, at most, can be accounted for as a typographical error on the
part of petitioner himself. That "SCN Case No. 031767," a copy of which was annexed to the petition, is the correct case number is
confirmed by the Evaluation Sheet 18 of the Special Committee On Naturalization which was also docketed as "SCN Case No.
031767." Other than this, petitioner offered no evidence to disprove the authenticity of the documents presented by the
State.chanrobles virtuallawlibrary:red
Furthermore, the Court notes that these documents — namely, the petition in SCN Case No. 031767, petitioner’s marriage contract,
the joint affidavit executed by him and his wife, and petitioner’s income tax returns — are all public documents. As such, they have
been executed under oath. They are thus reliable. Since petitioner failed to make a satisfactory showing of any flaw or irregularity
that may cast doubt on the authenticity of these documents, it is our conclusion that the appellate court did not err in relying upon
them.
One last point. The above discussion would have been enough to dispose of this case, but to settle all the issues raised, we shall
briefly discuss the effect of petitioner’s failure to include the address "J.M. Basa St., Iloilo" in his petition, in accordance with §7, C.A.
No. 473. This address appears on petitioner’s Immigrant Certificate of Residence, a document which forms part of the records as
Annex A of his 1989 petition for naturalization. Petitioner admits that he failed to mention said address in petition, but argues that
since the Immigrant Certificate of Residence containing it had been fully published, 19 with the petition and the other annexes, such
publication constitutes substantial compliance with §7. 20 This is allegedly because the publication effectively satisfied the objective
sought to be achieved by such requirement, i.e., to give investigating agencies of the government the opportunity to check on the
background of the applicant and prevent suppression of information regarding any possible misbehavior on his part in any
community where he may have lived at one time or another. 21 It is settled, however, that naturalization laws should be rigidly
enforced and strictly construed in favor of the government and against the applicant. 22 As noted by the State, C.A. No. 473, §7
clearly provides that the applicant for naturalization shall set forth in the petition his present and former places of residence. 23 This
provision and the rule of strict application of the law in naturalization cases defeat petitioner’s argument of "substantial compliance"
with the requirement under the Revised Naturalization Law. On this ground alone, the instant petition ought to be denied.
WHEREFORE, the decision of the Court of Appeals is AFFIRMED and the instant petition is hereby DENIED.chanrobles.com :
virtuallawlibrary
SO ORDERED.
G.R. No. 168644 February 16, 2010
BSB GROUP, INC., represented by its President, Mr. RICARDO BANGAYAN, Petitioner,
vs.
SALLY GO a.k.a. SALLY GO-BANGAYAN, Respondent.
DECISION
PERALTA, J.:
This is a Petition for Review under Rule 45 of the Rules of Court assailing the Decision of the Court of Appeals in CA-G.R. SP No.
876001 dated April 20, 2005, which reversed and set aside the September 13, 20042 and November 5, 20043 Orders issued by the
Regional Trial Court of Manila, Branch 364 in Criminal Case No. 02-202158 for qualified theft. The said orders, in turn, respectively
denied the motion filed by herein respondent Sally Go for the suppression of the testimonial and documentary evidence relative to a
Security Bank account, and denied reconsideration.
The basic antecedents are no longer disputed.
Petitioner, the BSB Group, Inc., is a duly organized domestic corporation presided by its herein representative, Ricardo Bangayan
(Bangayan). Respondent Sally Go, alternatively referred to as Sally Sia Go and Sally Go-Bangayan, is Bangayan’s wife, who was
employed in the company as a cashier, and was engaged, among others, to receive and account for the payments made by the
various customers of the company.
In 2002, Bangayan filed with the Manila Prosecutor’s Office a complaint for estafa and/or qualified theft5 against respondent,
alleging that several checks6 representing the aggregate amount of ₱1,534,135.50 issued by the company’s customers in payment of
their obligation were, instead of being turned over to the company’s coffers, indorsed by respondent who deposited the same to her
personal banking account maintained at Security Bank and Trust Company (Security Bank) in Divisoria, Manila Branch.7 Upon a
finding that the evidence adduced was uncontroverted, the assistant city prosecutor recommended the filing of the Information for
qualified theft against respondent.8
Accordingly, respondent was charged before the Regional Trial Court of Manila, Branch 36, in an Information, the inculpatory
portion of which reads:
That in or about or sometime during the period comprised (sic) between January 1988 [and] October 1989, inclusive, in the City of
Manila, Philippines, the said accused did then and there willfully, unlawfully and feloniously with intent [to] gain and without the
knowledge and consent of the owner thereof, take, steal and carry away cash money in the total amount of ₱1,534,135.50
belonging to BSB GROUP OF COMPANIES represented by RICARDO BANGAYAN, to the damage and prejudice of said owner in the
aforesaid amount of ₱1,534,135.50, Philippine currency.
That in the commission of the said offense, said accused acted with grave abuse of confidence, being then employed as cashier by
said complainant at the time of the commission of the said offense and as such she was entrusted with the said amount of money.
Contrary to law.9
Respondent entered a negative plea when arraigned.10 The trial ensued. On the premise that respondent had allegedly encashed the
subject checks and deposited the corresponding amounts thereof to her personal banking account, the prosecution moved for the
issuance of subpoena duces tecum /ad testificandum against the respective managers or records custodians of Security Bank’s
Divisoria Branch, as well as of the Asian Savings Bank (now Metropolitan Bank & Trust Co. [Metrobank]), in Jose Abad Santos, Tondo,
Manila Branch.11 The trial court granted the motion and issued the corresponding subpoena.12
Respondent filed a motion to quash the subpoena dated November 4, 2003, addressed to Metrobank, noting to the court that in the
complaint-affidavit filed with the prosecutor, there was no mention made of the said bank account, to which respondent, in addition
to the Security Bank account identified as Account No. 01-14-006, allegedly deposited the proceeds of the supposed checks.
Interestingly, while respondent characterized the Metrobank account as irrelevant to the case, she, in the same motion,
nevertheless waived her objection to the irrelevancy of the Security Bank account mentioned in the same complaint-affidavit,
inasmuch as she was admittedly willing to address the allegations with respect thereto.13
Petitioner, opposing respondent’s move, argued for the relevancy of the Metrobank account on the ground that the complaint-
affidavit showed that there were two checks which respondent allegedly deposited in an account with the said bank.14 To this,
respondent filed a supplemental motion to quash, invoking the absolutely confidential nature of the Metrobank account under the
provisions of Republic Act (R.A.) No. 1405.15 The trial court did not sustain respondent; hence, it denied the motion to quash for lack
of merit.16
Meanwhile, the prosecution was able to present in court the testimony of Elenita Marasigan (Marasigan), the representative of
Security Bank. In a nutshell, Marasigan’s testimony sought to prove that between 1988 and 1989, respondent, while engaged as
cashier at the BSB Group, Inc., was able to run away with the checks issued to the company by its customers, endorse the same, and
credit the corresponding amounts to her personal deposit account with Security Bank. In the course of the testimony, the subject
checks were presented to Marasigan for identification and marking as the same checks received by respondent, endorsed, and then
deposited in her personal account with Security Bank.17 But before the testimony could be completed, respondent filed a Motion to
Suppress,18 seeking the exclusion of Marasigan’s testimony and accompanying documents thus far received, bearing on the subject
Security Bank account. This time respondent invokes, in addition to irrelevancy, the privilege of confidentiality under R.A. No. 1405.
The trial court, nevertheless, denied the motion in its September 13, 2004 Order.19 A motion for reconsideration was subsequently
filed, but it was also denied in the Order dated November 5, 2004.20 These two orders are the subject of the instant case.
Aggrieved, and believing that the trial court gravely abused its discretion in acting the way it did, respondent elevated the matter to
the Court of Appeals via a petition for certiorari under Rule 65. Finding merit in the petition, the Court of Appeals reversed and set
aside the assailed orders of the trial court in its April 20, 2005 Decision.21 The decision reads:
WHEREFORE, the petition is hereby GRANTED. The assailed orders dated September 13, 2004 and November 5, 2004 are REVERSED
and SET ASIDE. The testimony of the SBTC representative is ordered stricken from the records.
SO ORDERED.22
With the denial of its motion for reconsideration,23 petitioner is now before the Court pleading the same issues as those raised
before the lower courts.
In this Petition24 under Rule 45, petitioner averred in the main that the Court of Appeals had seriously erred in reversing the assailed
orders of the trial court, and in effect striking out Marasigan’s testimony dealing with respondent’s deposit account with Security
Bank.25 It asserted that apart from the fact that the said evidence had a direct relation to the subject matter of the case for qualified
theft and, hence, brings the case under one of the exceptions to the coverage of confidentiality under R.A. 1405.26 Petitioner
believed that what constituted the subject matter in litigation was to be determined by the allegations in the information and, in this
respect, it alluded to the assailed November 5, 2004 Order of the trial court, which declared to be erroneous the limitation of the
present inquiry merely to what was contained in the information.27
For her part, respondent claimed that the money represented by the Security Bank account was neither relevant nor material to the
case, because nothing in the criminal information suggested that the money therein deposited was the subject matter of the case.
She invited particular attention to that portion of the criminal Information which averred that she has stolen and carried away cash
money in the total amount of ₱1,534,135.50. She advanced the notion that the term "cash money" stated in the Information was
not synonymous with the checks she was purported to have stolen from petitioner and deposited in her personal banking account.
Thus, the checks which the prosecution had Marasigan identify, as well as the testimony itself of Marasigan, should be suppressed
by the trial court at least for violating respondent’s right to due process.28 More in point, respondent opined that admitting the
testimony of Marasigan, as well as the evidence pertaining to the Security Bank account, would violate the secrecy rule under R.A.
No. 1405.29
In its reply, petitioner asserted the sufficiency of the allegations in the criminal Information for qualified theft, as the same has
sufficiently alleged the elements of the offense charged. It posits that through Marasigan’s testimony, the Court would be able to
establish that the checks involved, copies of which were attached to the complaint-affidavit filed with the prosecutor, had indeed
been received by respondent as cashier, but were, thereafter, deposited by the latter to her personal account with Security Bank.
Petitioner held that the checks represented the cash money stolen by respondent and, hence, the subject matter in this case is not
only the cash amount represented by the checks supposedly stolen by respondent, but also the checks themselves.30
We derive from the conflicting advocacies of the parties that the issue for resolution is whether the testimony of Marasigan and the
accompanying documents are irrelevant to the case, and whether they are also violative of the absolutely confidential nature of
bank deposits and, hence, excluded by operation of R.A. No. 1405. The question of admissibility of the evidence thus comes to the
fore. And the Court, after deliberative estimation, finds the subject evidence to be indeed inadmissible.
Prefatorily, fundamental is the precept in all criminal prosecutions, that the constitutive acts of the offense must be established with
unwavering exactitude and moral certainty because this is the critical and only requisite to a finding of guilt. 31 Theft is present when
a person, with intent to gain but without violence against or intimidation of persons or force upon things, takes the personal
property of another without the latter’s consent. It is qualified when, among others, and as alleged in the instant case, it is
committed with abuse of confidence.32 The prosecution of this offense necessarily focuses on the existence of the following
elements: (a) there was taking of personal property belonging to another; (b) the taking was done with intent to gain; (c) the taking
was done without the consent of the owner; (d) the taking was done without violence against or intimidation of persons or force
upon things; and (e) it was done with abuse of confidence.33 In turn, whether these elements concur in a way that overcomes the
presumption of guiltlessness, is a question that must pass the test of relevancy and competency in accordance with Section 334 Rule
128 of the Rules of Court.
Thus, whether these pieces of evidence sought to be suppressed in this case the testimony of Marasigan, as well as the checks
purported to have been stolen and deposited in respondent’s Security Bank account are relevant, is to be addressed by
considering whether they have such direct relation to the fact in issue as to induce belief in its existence or non-existence; or
whether they relate collaterally to a fact from which, by process of logic, an inference may be made as to the existence or non-
existence of the fact in issue.35
The fact in issue appears to be that respondent has taken away cash in the amount of ₱1,534,135.50 from the coffers of petitioner.
In support of this allegation, petitioner seeks to establish the existence of the elemental act of taking by adducing evidence that
respondent, at several times between 1988 and 1989, deposited some of its checks to her personal account with Security Bank.
Petitioner addresses the incongruence between the allegation of theft of cash in the Information, on the one hand, and the evidence
that respondent had first stolen the checks and deposited the same in her banking account, on the other hand, by impressing upon
the Court that there obtains no difference between cash and check for purposes of prosecuting respondent for theft of cash.
Petitioner is mistaken.
In theft, the act of unlawful taking connotes deprivation of personal property of one by another with intent to gain, and it is
immaterial that the offender is able or unable to freely dispose of the property stolen because the deprivation relative to the
offended party has already ensued from such act of execution.36 The allegation of theft of money, hence, necessitates that evidence
presented must have a tendency to prove that the offender has unlawfully taken money belonging to another. Interestingly,
petitioner has taken pains in attempting to draw a connection between the evidence subject of the instant review, and the
allegation of theft in the Information by claiming that respondent had fraudulently deposited the checks in her own name. But this
line of argument works more prejudice than favor, because it in effect, seeks to establish the commission, not of theft, but rather of
some other crime probably estafa.
Moreover, that there is no difference between cash and check is true in other instances. In estafa by conversion, for instance,
whether the thing converted is cash or check, is immaterial in relation to the formal allegation in an information for that offense; a
check, after all, while not regarded as legal tender, is normally accepted under commercial usage as a substitute for cash, and the
credit it represents in stated monetary value is properly capable of appropriation. And it is in this respect that what the offender
does with the check subsequent to the act of unlawfully taking it becomes material inasmuch as this offense is a continuing one.37 In
other words, in pursuing a case for this offense, the prosecution may establish its cause by the presentation of the checks involved.
These checks would then constitute the best evidence to establish their contents and to prove the elemental act of conversion in
support of the proposition that the offender has indeed indorsed the same in his own name.38
Theft, however, is not of such character. Thus, for our purposes, as the Information in this case accuses respondent of having stolen
cash, proof tending to establish that respondent has actualized her criminal intent by indorsing the checks and depositing the
proceeds thereof in her personal account, becomes not only irrelevant but also immaterial and, on that score, inadmissible in
evidence.
We now address the issue of whether the admission of Marasigan’s testimony on the particulars of respondent’s account with
Security Bank, as well as of the corresponding evidence of the checks allegedly deposited in said account, constitutes an unallowable
inquiry under R.A. 1405.
It is conceded that while the fundamental law has not bothered with the triviality of specifically addressing privacy rights relative to
banking accounts, there, nevertheless, exists in our jurisdiction a legitimate expectation of privacy governing such accounts. The
source of this right of expectation is statutory, and it is found in R.A. No. 1405,39 otherwise known as the Bank Secrecy Act of 1955. 40
R.A. No. 1405 has two allied purposes. It hopes to discourage private hoarding and at the same time encourage the people to
deposit their money in banking institutions, so that it may be utilized by way of authorized loans and thereby assist in economic
development.41 Owing to this piece of legislation, the confidentiality of bank deposits remains to be a basic state policy in the
Philippines.42 Section 2 of the law institutionalized this policy by characterizing as absolutely confidential in general all deposits of
whatever nature with banks and other financial institutions in the country. It declares:
Section 2. All deposits of whatever nature with banks or banking institutions in the Philippines including investments in bonds issued
by the Government of the Philippines, its political subdivisions and its instrumentalities, are hereby considered as of an absolutely
confidential nature and may not be examined, inquired or looked into by any person, government official, bureau or office, except
upon written permission of the depositor, or in cases of impeachment, or upon order of a competent court in cases of bribery or
dereliction of duty of public officials, or in cases where the money deposited or invested is the subject matter of the
litigation.1avvphi1
Subsequent statutory enactments43 have expanded the list of exceptions to this policy yet the secrecy of bank deposits still lies as
the general rule, falling as it does within the legally recognized zones of privacy.44 There is, in fact, much disfavor to construing these
primary and supplemental exceptions in a manner that would authorize unbridled discretion, whether governmental or otherwise,
in utilizing these exceptions as authority for unwarranted inquiry into bank accounts. It is then perceivable that the present legal
order is obliged to conserve the absolutely confidential nature of bank deposits.45
The measure of protection afforded by the law has been explained in China Banking Corporation v. Ortega.46 That case principally
addressed the issue of whether the prohibition against an examination of bank deposits precludes garnishment in satisfaction of a
judgment. Ruling on that issue in the negative, the Court found guidance in the relevant portions of the legislative deliberations on
Senate Bill No. 351 and House Bill No. 3977, which later became the Bank Secrecy Act, and it held that the absolute confidentiality
rule in R.A. No. 1405 actually aims at protection from unwarranted inquiry or investigation if the purpose of such inquiry or
investigation is merely to determine the existence and nature, as well as the amount of the deposit in any given bank account. Thus,
x x x The lower court did not order an examination of or inquiry into the deposit of B&B Forest Development Corporation, as
contemplated in the law. It merely required Tan Kim Liong to inform the court whether or not the defendant B&B Forest
Development Corporation had a deposit in the China Banking Corporation only for purposes of the garnishment issued by it, so that
the bank would hold the same intact and not allow any withdrawal until further order. It will be noted from the discussion of the
conference committee report on Senate Bill No. 351 and House Bill No. 3977which later became Republic Act No. 1405, that it was
not the intention of the lawmakers to place banks deposits beyond the reach of execution to satisfy a final judgmentThus:
x x x Mr. Marcos: Now, for purposes of the record, I should like the Chairman of the Committee on Ways and Means to clarify this
further. Suppose an individual has a tax case. He is being held liable by the Bureau of Internal Revenue [(BIR)] or, say, ₱1,000.00
worth of tax liability, and because of this the deposit of this individual [has been] attached by the [BIR].
Mr. Ramos: The attachment will only apply after the court has pronounced sentence declaring the liability of such person. But where
the primary aim is to determine whether he has a bank deposit in order to bring about a proper assessment by the [BIR], such
inquiry is not allowed by this proposed law.
Mr. Marcos: But under our rules of procedure and under the Civil Code, the attachment or garnishment of money deposited is
allowed. Let us assume for instance that there is a preliminary attachment which is for garnishment or for holding liable all moneys
deposited belonging to a certain individual, but such attachment or garnishment will bring out into the open the value of such
deposit. Is that prohibited by... the law?
Mr. Ramos: It is only prohibited to the extent that the inquiry... is made only for the purpose of satisfying a tax liability already
declared for the protection of the right in favor of the government; but when the object is merely to inquire whether he has a
deposit or not for purposes of taxation, then this is fully covered by the law. x x x
Mr. Marcos: The law prohibits a mere investigation into the existence and the amount of the deposit.
Mr. Ramos: Into the very nature of such deposit. x x x47
In taking exclusion from the coverage of the confidentiality rule, petitioner in the instant case posits that the account maintained by
respondent with Security Bank contains the proceeds of the checks that she has fraudulently appropriated to herself and, thus, falls
under one of the exceptions in Section 2 of R.A. No. 1405 that the money kept in said account is the subject matter in litigation. To
highlight this thesis, petitioner avers, citing Mathay v. Consolidated Bank and Trust Co.,48 that the subject matter of the action refers
to the physical facts; the things real or personal; the money, lands, chattels and the like, in relation to which the suit is prosecuted,
which in the instant case should refer to the money deposited in the Security Bank account.49 On the surface, however, it seems that
petitioner’s theory is valid to a point, yet a deeper treatment tends to show that it has argued quite off-tangentially. This, because,
while Mathay did explain what the subject matter of an action is, it nevertheless did so only to determine whether the class suit in
that case was properly brought to the court.
What indeed constitutes the subject matter in litigation in relation to Section 2 of R.A. No. 1405 has been pointedly and amply
addressed in Union Bank of the Philippines v. Court of Appeals,50 in which the Court noted that the inquiry into bank deposits
allowable under R.A. No. 1405 must be premised on the fact that the money deposited in the account is itself the subject of the
action.51 Given this perspective, we deduce that the subject matter of the action in the case at bar is to be determined from the
indictment that charges respondent with the offense, and not from the evidence sought by the prosecution to be admitted into the
records. In the criminal Information filed with the trial court, respondent, unqualifiedly and in plain language, is charged with
qualified theft by abusing petitioner’s trust and confidence and stealing cash in the amount of ₱1,534,135.50. The said Information
makes no factual allegation that in some material way involves the checks subject of the testimonial and documentary evidence
sought to be suppressed. Neither do the allegations in said Information make mention of the supposed bank account in which the
funds represented by the checks have allegedly been kept.
In other words, it can hardly be inferred from the indictment itself that the Security Bank account is the ostensible subject of the
prosecution’s inquiry. Without needlessly expanding the scope of what is plainly alleged in the Information, the subject matter of
the action in this case is the money amounting to ₱1,534,135.50 alleged to have been stolen by respondent, and not the money
equivalent of the checks which are sought to be admitted in evidence. Thus, it is that, which the prosecution is bound to prove with
its evidence, and no other.
It comes clear that the admission of testimonial and documentary evidence relative to respondent’s Security Bank account serves no
other purpose than to establish the existence of such account, its nature and the amount kept in it. It constitutes an attempt by the
prosecution at an impermissible inquiry into a bank deposit account the privacy and confidentiality of which is protected by law. On
this score alone, the objection posed by respondent in her motion to suppress should have indeed put an end to the controversy at
the very first instance it was raised before the trial court.
In sum, we hold that the testimony of Marasigan on the particulars of respondent’s supposed bank account with Security Bank and
the documentary evidence represented by the checks adduced in support thereof, are not only incompetent for being excluded by
operation of R.A. No. 1405. They are likewise irrelevant to the case, inasmuch as they do not appear to have any logical and
reasonable connection to the prosecution of respondent for qualified theft. We find full merit in and affirm respondent’s objection
to the evidence of the prosecution. The Court of Appeals was, therefore, correct in reversing the assailed orders of the trial court.
A final note. In any given jurisdiction where the right of privacy extends its scope to include an individual’s financial privacy rights
and personal financial matters, there is an intermediate or heightened scrutiny given by courts and legislators to laws infringing such
rights.52 Should there be doubts in upholding the absolutely confidential nature of bank deposits against affirming the authority to
inquire into such accounts, then such doubts must be resolved in favor of the former. This attitude persists unless congress lifts its
finger to reverse the general state policy respecting the absolutely confidential nature of bank deposits.53
WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals in CA-G.R. SP No. 87600 dated April 20, 2005, reversing
the September 13, 2004 and November 5, 2004 Orders of the Regional Trial Court of Manila, Branch 36 in Criminal Case No. 02-
202158, is AFFIRMED.
SO ORDERED.
G.R. No. L-28607 February 21, 1929
PRATS & COMPANY, a registered partnership, plaintiff-appellant,

vs.
PHOENIX INSURANCE COMPANY, HARTFORD, CONNECTICUT, a corporation, defendant-appellee.
Abad Santos, Camus, Delgado and Recto and Ohnick and McFie for appellant.
Gibbs and McDonough for appellee.
STREET, J.:
This action was instituted in the Court of First Instance of the City of Manila by Prats & Co., a mercantile partnership, for the purpose
of recovering from the Phoenix Insurance Co., of Hartford, Connecticut, the sum of P117,800.60, with interest, by reason of a loss
alleged to have been sustained by the plaintiff, on August 21, 1924, from a fire, it being alleged that said loss was covered by policy
of insurance No. 600217, for the sum of P200,000, issued by the defendant company to the plaintiff. For answer, the defendant,
Pheonix Insurance Co., admitted the insurance of the policy of insurance but, by way of special defense, alleged, among other things,
that the fire in question had been set by the plaintiff, or with its connivance, and that the plaintiff had submitted under oath to the
defendant a fraudulent claim of loss, in contravention of the express terms of the policy. Upon hearing the cause the trial court
absolved the defendant from the complaint with respect to the obligation created by the policy which was the subject of the suit,
but ordered the defendant to pay to the plaintiff the sum of P11,731.93, with interest from the filing of the complaint, upon account
of moneys received from salvage sales, conducted by the defendant, of remnants of the insured stock. From this judgment the
plaintiff appelaed.
So far as liability under the policy of insurance which is the subject of this action is concerned, we are of the opinion that the
defendant has sufficiently established two defenses, either of which would be fatal to the right of recovery, namely, first, that the
fire was set by the procurance or connivance of the plaintiff for the purpose of defrauding the insurer; and secondly, that the
plaintiff, after the fire, submitted to the defendant a fraudulent claim supported by the false proof, in violation of the terms of the
policy. Of these defenses the trial judge sustained the second but passed the first without express finding. We consider it important,
however, briefly to exhibit the salient facts on both points, not only because of the considerable sum of money involved, but
because the facts appearing in evidence supply a typical illustration of the manner in which frauds of this character against the
insurance companies may be constructed with some hope of success, when insurance agents are accessible who, under the
incentive of writing large amounts of insurance, can be induced to close their eyes to obvious dangers.
On July 10, 1923, Francisco Prats, Elias Hanna and Isidro Bejar registered two mercantile partnerships in the Bureau of Commerce
and Industry for the purpose of engaging in mercantile business. The articles of copartnership of these two entities were the same
except in the firm names. It was apparently contemplated, in so far as any legitimate function may have been intended, that Prats &
Co. should be an importing firm, while Hanna, Bejar & Co. should engage in retail businss. As eveents show, the existence of the
parallel entities, controlled by the same individuals, supplied, undeniably, suitable engines for accomplishing an exploit of the kind
that was here attempted. Of the three individuals mentioned Elias Hanna and Isidro Bejar were Turkish subjects of unsavory
reputation in insurance circle of Manila, while Francisco Prats was a Spanish subject who had had some success as a merchant and,
prior to his connection with the two associates above mentioned, apparently enjoyed a fair reputation. Another individual, who
figures in the case as an instrument of the three partners, is one Domingo Romero, who at that the time which we are here
concerned, was an employee of the Bureau of Internal Revenue, with a salary of P150 per month. Ramon Prats, a son of Francisco
Prats, was united in marriage to a daughter of Domingo Romero, with the result that social relations between Francisco Prats and
Domingo Romero were close. Francisco Prats appear to have acted as manager for both Prats & Co. and Hanna, Bejar & Co.
On May 27, 1924, Prats, acting for Hanna, Bejar & Co., purchased a one-story building at 95 Plaza Gardenia, Manila; and soon
thereafter he begun to assemble in this place the stock of merchandise which was the subject of insurance in this case. The building
referred to was purchasd outright for the sum of P1,600. It was old and was scarcely more than a shed but had been used in times
past for human habitation. It was located in a part of the city which was inconvenient of success to traders and out of the ordinary
channels of business activity. After purchasing the building, Prats knocked out the partitions, removed the floor, and laid along the
center. The main part of the structure was thus converted into a single store, or bodega, though certain adjuncts, consisting of
kitchen and closets, remained unchanged in the rear of the building. A sign was then set up over the entrance bearing the firm name
"Hanna, Bejar & Co." In effecting the purchase of this building Prats availed himself of the service of Domingo Romero, who lived
only two doors away at 97 Plaza Gardenia.
By August 21, 1924, there had been assembled and stored by Prats in the place above described a stock of goods which, according to
the documents exhibited by him, had a valuation of P211,329.72, on which he had taken out insurance to the extent of P410,000. At
midnight of the day mentioned a fire occurred at 95 Plaza Gardenia, which destroyed the building and ruined its contents, the
amount realized from the salvage of the stock being P11,731.93.
With respect to the insurance upon this stock at the time of the fire, the following facts appear: In the month of June preceeding the
fire, nine policies aggregating P160,000 were taken out by Prats in the name of Hanna, Bejar & Co. on merchandise stored at 95
Plaza Gardenia. At the time these policies were taken out the valuation of the goods then in said store could not have been more
than P68,753. On June 28, 1924, Prats procured from the agent of the defendant in this case policy of insurance No. 600217 in the
amount of P200,000 on merchandise stored in the same place. The nine policies already procured had been taken out, as we have
seen, in the name of Hanna, Bejar & Co.; but when Prats applied to the agent of the defendant for the P200,000 policy last above
mentioned, the agent told him that if Hanna or Bejar had any interest in the stock to be insured the policy could not be issued for
the reason that, in such case, the defendant would not be able to obtain reinsurance for any part of the policy, owing to the bad
reputation of Hanna and Bejar. Accordingly, at the request of Prats & Co.; and Prats at the same time assured the agent that Hanna
and Bejar were not partners in Prats & Co. With the writing of this policy the amount of insurance on the merchandise at 95 Plaza
Gardenia was increased to P360,000, while the value of the stock at that time was not probably much in excess of P158,000. On
August 11, 1924, or just ten days before the fire, Prats took out an additional policy for P50,000 in the name of Prats & Co. on the
same stock. This made a total insurance of P410,000 on the contents of the store at 95 Plaza Gardenia. At the time, according to
Prats himself, the evaluation of the merchandise then in the place was not in excess of P230,000. Furthermore, Prats, about this
time, caused the first nine policies which had been taken out in the name of Hanna, Bejar & Co. to be indorsed to Prats & Co.,
thereby making this firm the sole insured firm with respect to this stock of merchandise.
With respect to the origin of the stock thus assembled, we find that part had been purchased in Europe by Prats; and in connection
with its importation from abroad it is noteworthy that on June 18, 1924, Prats & Co. procured a policy of marine insurance to be
issued by Meerkamp & Co., Ltd., as agents of the India Insurance Co., Ltd., Upon twenty-two cases of silk, of a supposed value of
P43,400. at the time this policy was procured Prats informed the insurer that the goods were soon to arrive from France by the
steamer Suwa Maru. For this policy of insurance Prats paid out the sum of P736.25. Nevertheless, it now appears that the twenty-
two cases of silk covered by this marine policy were fictitious, as no such purchase of silk had been made by Prats & Co. in France or
elsewhere. This fact was offered in evidence by the defendant, as tending to reveal a scheme by which, if a dstructive fire should
occur, the plaintiff would be able to mislead the defendant as to the quantity of goods stored in the bodega. This item of proof,
though circumstantial in its nature, was undoubtedly competent and should have been admitted by the trial court.
The proof submitted by the defendant tends to show that obscure manipulations were used by the plaintiff in the storing of
merchandise at 95 Plaza Gardenia and in the removal of part of the contents of the bodega before the fire. In this connection it
appears that forty-five cases of old stock of Hanna, Bejar & Co., at Legaspi, P. I., were shipped to Manila before the fire, but instead
of being taken directly to 95 Plaza Gardenia, they were housed for a time in the back part of the lower floor of the Bazar Filipino in
which Prats & Co. and Hanna, Bejar & Co. had their offices. Moreover, a quantity of merchandise purchased from place shortly
before the fire, instead of directly to 95 Plaza Gardenia; and it is the theory of the defendant that new merchandise purchased from
Talambiras Brothers was substituted for the old stock in boxes from Hanna, Bejar & Co. at Legaspi, leaving the old goods to be
deposited in the bodega to swell the debris of the fire. There is evidence also, which was credited by the court, to the effect that on
various occasions before the fire goods were removed from the bodega to the store of B. Abolafia, at Manila, where they were
received without invoice. Some of these goods were subsequently sent away by Abolafia for sale in the provinces.
If overinsurance and the assemblage of goods at inflated values in the bodega at 95 Plaza Gardenia, together with the surreptitious
abstraction of goods therefrom by the insured, have suggested a possible intention on the part of its manager to realize improperly
on its insurance policies, this inference is, in our opinion, but beyond reach of reasonable doubt by facts relative to the destruction
of the place. In this connection we note that about the time the bodega at 95 Plaza Gardenia had been purchased, Domingo Romero
assisted one Ramon Osete to rent No. 69 Calle Gardenia, which was close to the rear of the building at 95 Plaza Gardenia. Osete
appears to have been the individual chose for the role of incendiary, and he slept at the place mentioned until the night of the fire. A
night or two before the fire this Osete, accompanied by one Antonio Prats, appears to have brought two cans of petroleum to his
lodging place at 69 Calle Gardenia. After these cans had been taken to Osete's bathroom by his muchacho, the latter was sent out on
an errand; and while he was gone the petroleum disappeared. After the fire had been started in the plaintiff's bodega shortly after
midnight on August 21, 1924, Osete conveyed this boy in his automobile to the fire alarm box on Plaza Gardenia. Reaching this place,
Osete planted the boy there with instructions to stop anyone who might attempt to turn in the alarm by telling him that he (the boy)
had already done so; and in fact, after the fire had gained some headway, one Joaquin Silos, who lived near the bodega, ran to the
box to turn on the alarm but was stopped in the act by a person who stated that he had already given the alarm. Nevertheless, when
Fire Chief Vanderford reached the scene of the fire a few minutes later, he found that the box had not been disturbed and he
himself turned on the alarm. The boy stated that when he was on the way with Osete to the alarm box, as just stated, an explosion
took place in the bodega and a dull sound was emitted. Vanderford says that upon his arrival he saw that the smoke issuing from
the bodega black, suggesting the combustion of some inflammable material like petroleum. He also noted the odor of petroleum, as
did also some of the firemen who reached the scene. It may be added that when the debris of the fire was subsequently searched,
merchandise soaked with petroleum was found in the ruins.
Domingo Romero, who had been living at 97 Plaza Gardenia, had before the fire taken his family temporarily to the home of Prats in
Pasay. But after the fire was over the family moved back to 97 Plaza Gardenia, although that place had been considerably damaged
by the flames.
Among those who suffered from the fire were the members of the Artigas family, living at 93 Gardenia, on the side opposite
Romero's house. Another neighbor who likewise suffered from the fire was one Juan Atayde, occupant of 67 Calle Gardenia, at the
side of the house occupied by Osete. Soon after the fire Domingo Romero quietly passed a 100-peso bill into the hand of Maria Luisa
Artigas, a daughter belonging to the Artigas family. Romero likewise gave the same amount to Juan Atayde. It is self-evident that the
gifts thus made by Romero to Luisa Artigas and Juan Atayde had other motives than pure charity and that the money probably came
from some other source than his own modest earnings. After the fire that a special investigation was made by the police department
with the result that Deputy Chief Lorenzo came to the conclusion that the fire had originated from an intentional act. Reflection
upon the proof before the court engenders in us the same belief and conducts us to the further conclusion that Prats & Co. was not
alien to the deed.
The finding of the trial court in the effect that the plaintiff had submitted false proof in the support of his claim is also, in our
opinion, well founded. That conclusion appears to have been based upon three items of proof, and with respect to at least two of
these, we think that the conclusion of his Honor was correctly drawn. These two facts are, first, that the plaintiff had submitted a
claim for jewelry lost in the fire as of a value of P12,800 when th erule value of said jewelry was about P600; and, secondly, that the
plaintiff had sought to recover from the insurance company the value of goods which had been surreptitiously withdrawn by it from
the bodega prior to the fire. Neither of these two facts are consistent with good faith on the part of the plaintiff, and each
constituted a breach of the stipulations of the policy against the use of fraudulent devices and false proof with respect to the loss.
The other point relied upon by his Honor to sustain the conclusion that the plaintiff had attempted to deceive the defendant with
respect to the extent of the loss was at least competent in its general bearing on the good faith of the plaintiff, even if, as is probably
true, not alone sufficient to constitute a breach of the same stipulations. The point is this: After the fire the plaintiff presented to the
adjuster certain cost sheets and cpies of supposed invoices in which the prices and expenses of importation of a quantity of goods
were stated at double the true amount. The adjuster soon discovered the artificial nature of these documents, and, with his consent,
they were withdrawn by Prats and subsequently destroyed. At the hearing Prats stated that these documents had been fabricated in
order that they might be exhibited to intending purchasers of the goods, thereby making it appear to them that the cost of the
mercahndise had been much greater than it in fact was — a ruse which is supposed to have been entirely innocent or at least not
directed against the insurer. But a question naturally arises as to the purpose which these documents might have been made to
serve if the fire, as doubtless intended by its designers, had been so destructive as to remove all vestiges of the stock actually
involved. Upoon the whole we are forced to state the conclusion, not only that the plaintiff caused the fire to be set, or connived
therein, but also that it submitted fraudulent proof as the trial judge found.
Before concluding this opinion we are constrained to make a few observations with reference to the trial of this case and the
inordinate amountof time consumed in the proceedings. We are told in the appellant's brief that the trial of this case covered a
period of almost two years, in which fifty separate sessions were held, without counting the numeruos hearings upon the taking of
the deposition of Francisco Prats, a partner in the plaintiff firm, whose testimony was taken at the instance of the defendant. Taken
all together, the time thus consumed was out of all proportion to the difficulties of the case. An examination of the voluminous
transcript reveals at least part of the reason for this inordinate consumption of time; since we find that far too much of the space in
the transcript is taken up with the record of petty skirmishes in court resulting from objections over the admission of evidence.
In the course of long experience we have observed that justice is most effectivly and expenditiously administered in the courts
where trivial objections to the admission of proof are received with least favor. The practice of excluding evidence on doubtful
objection to its materiality or technical objection to the form of the questions should be avoided. In a case of any intricacy it is
impossible for a judge of first instance, in the early stages of the development of the proof, to know with any certainty whether
testimony is relevant or not; and where there is no indication of bad faith on the part of the attorney offering the evidence, the
court may as a rule safely accept the testimony upon the statement of the attorney that the proof offered will be connected later.
Moreover, it must be remembered that in the heat of the battle over which he presides a judge of first instance may possibly fall
into error in judging of the relevancy of proof where a fair and logical connection is in fact shown. When such a mistake is made and
the proof is erroneously ruled out, the Supreme Court, upon appeal, often finds itself embarrassed and possibly unable to correct
the effects of error without returning the case for a new trial, -- a step which this court is always very loath to take. On the other
hand, the admission of proof in a court of first instance, even if the question as to its form, materiality, or relevancy is doubtful, can
never result in much harm to either litigant, because the trial judge is supposed to know the law; and it is its duty, upon final
consideration of the case, to distinguish the relevant and material from the irrelevant and immaterial. If this course is followed and
the cause is prosecuted to the Supreme Court upon appeal, this court then has all the material before it necessary to make a correct
judgment.
In this connection it should be remembered that many of the technical rules of evidence which are often invoked in our courts were
originally worked out in England and the United States, where the jury system prevails. These rules were adopted for the purpose of
keeping matter from juries which — it was supposed — might unduly influence them in deciding on the facts. They have little
pertinence to a system of procedure, like ours, in which the court is judge both of law and facts, and in which accordingly it is
necessary for the court to know what the proof is before it rules upon the propriety of receiving it. Apart from these considerations
is the circumstance mentioned above that the time consumed in the trial on such collateral points is generally many times greater
than would be consumed if the questionable testimony should be admitted for what it is worth. What has been said above finds
special relevancy in this case in view of the action of the trial court in refusing to consider the proof referred to in the opinion
showing that the plaintiff, while engaged in assembling its stock, procured maritime insurance upon a fictitious importation of silk.
We earnestly commend the maintenance of liberal practice in the admission of proof.
Our examination of the case leads to the conclusion that the result reached by the trial court was correct.
The appealed decision will therefore be affirmed, and it is also ordered, with costs against the appellant.
Avancena, C. J., Villamor and Ostrand, JJ., concur.
Romualdez, J., concurs for the affirmance of the appealed judgment.
Villa-Real, J., concurs in the result.
Separate Opinions
MALCOLM, J., concurring:
I concur in the result and agree with the clear decision of the trial judge sustaining the defense of false proof, but desire to make of
record my nonconfirmity as to a discussion of questions not involved in the disposition of the assignment of errors.
[G.R. No. L-9181. November 28, 1955.]
THE PEOPLE OF THE PHILIPPINES, Petitioner, v. THE HON. NICASIO YATCO, Judge of the Court of First Instance of Rizal, Quezon
City Branch, and JUAN CONSUNJI and ALFONSO PANGANIBAN, Respondents.
Solicitor General Ambrosio Padilla, Solicitor Meliton G. Soliman, City Attorney Pedro R. Revilla and Assistant City Attorney Julian
E. Lustre for Petitioner.
Estanislao A. Fernandez, Augusto Ilagan, Claro T. Almeda and Rufino Navarro for Respondents.
SYLLABUS
1. EVIDENCE; ADMISSIBILITY OF EVIDENCE; EXTRA-JUDICIAL CONFESSION; ADMISSIBLE AS EVIDENCE OF DECLARANT’S GUILT. —

Under the rule of multiple admissibility of evidence, even if an accused’s confession may not be competent as against his co-
accused, being hearsay as to the latter, or to prove conspiracy between them without the conspiracy being established by other
evidence, the confession is nevertheless, admissible as evidence of the declarant’s own guilt (U.S. v. Vega, 43 Phil., 41; People v.
Bande, 50 Phil., 37; People v. Buan, 64 Phil., 296), and should be admitted as such.
2. ID.; ID.; ACT OR DECLARATION OF CONSPIRATOR; SECTION 12, RULE 123, IS NOT APPLICABLE TO CONFESSION MADE AFTER
CONSPIRACY HAS ENDED. — Section 12 of Rule 123, providing that "The act or declaration of a conspirator relating to the conspiracy
and during its existence may be given in evidence against the co-conspirator after the conspiracy is shown by evidence other than
such act or declaration," refers to statements made by one conspirator during the pendency of the unlawful enterprise ("during its
existence") and in furtherance of its object, and not to a confession made long after the conspiracy had been brought to an end (U.S.
v. Empeinado, 9 Phil., 613; U.S. v. Raymundo, 14 Phil., 416; People v. Badilla, 48 Phil., 718; People v. Napkil, 52 Phil., 985).
3. ID.; ID.; OBJECTIONS, WAIVER OF; COURT HAS NO POWER TO DISREGARD EVIDENCE "MOTU PROPRIO." — The exclusion of the
proffered confessions was no made of the basis of the objection interposed by defense counsel, but upon an altogether different
ground, which the Court issued motu proprio. By so doing, the Court overlooked that the right to object is a privilege which the
parties may waive; and if the ground for objection is known and not seasonably made, the objection is deemed waived and the
Court has no power, on its own motion, to disregard the evidence (Marella v. Reyes, 12 Phil., 1).
4. ID.; ID.; RULE ON ADMISSIBILITY OF EVIDENCE. — The practice of excluding evidence of doubtful objections to its materiality or
technical objections to the form of the question should be avoided. In a case of any intricacy it is impossible for a judge of first
instance, in the early stages of the development of the proof, to know with any certainty whether testimony is relevant or not; and
where there is no indication of bad faith on the part of the attorney offering the evidence, the court may as a rule safety accept the
testimony upon the statement of the attorney that the proof offered will be connected later." (Prats & Co. v. Pheonix Insurance Co.,
52 Phil., 807, 816-817.) At any rate, in the final determination and consideration of the case, the trial Court should be able to
distinguish the admissible from the inadmissible, and reject what, under the rules of evidence, should be excluded. There is greater
reason to adhere to such policy in criminal cases where questions arises as to admissibility of evidence for the prosecution, for the
unjustified exclusion of evidence may lead to the erroneous acquittal of the accused or the dismissal of the charges, from which the
People can no longer appeal.
DECISION
REYES, J.B.L., J.:
In an amended information filed by the City Attorney of Quezon City on March 22, 1955, Juan Consunji, Alfonso Panganiban, and
another whose identity is still unknown, were charged with having conspired together in the murder of one Jose Ramos (Criminal
Case No. Q-1637 of the Court of First Instance of Quezon City). Trial of the case started on May 3, 1955, and in several hearings the
prosecution had been presenting its evidence. During the progress of the trial on May 18, 1955, while the prosecution was
questioning one of its witnesses, Atty. Arturo Xavier of the National Bureau of Investigation, in connection with the making of a
certain extra-judicial confession (allegedly made before him) by defendant Juan Consunji to the witness, counsel for the other
defendant Alfonso Panganiban interposed a general objection to any evidence on such confession on the ground that it was hearsay
and therefore incompetent as against the other accused Panganiban. The Court below ordered the exclusion of the evidence
objected to, but on an altogether different ground: that the prosecution could not be permitted to introduce the confessions of
defendants Juan Consunji and Alfonso Panganiban to prove conspiracy between them, without prior proof of such conspiracy by a
number of definite acts, conditions, and circumstances. Thereafter, according to the transcript, the following remarks were
made:jgc:chanrobles.com.ph
"FISCAL LUSTRE:chanrob1es virtual 1aw library
May we know from counsel if he is also objecting to the admissibility of the confession of Consunji as against the accused Consunji
himself?
COURT:chanrob1es virtual 1aw library
That would be premature because there is already a ruling of the Court that you cannot prove a confession unless yon prove first
conspiracy thru a number of indefinite acts, conditions and circumstances as required by law." Annex "B" of the petition, p. 9
The prosecution then moved in writing for a reconsideration of the order of exclusion, but again the motion was denied. Wherefore,
this petition for certiorari was brought before this Court by the Solicitor General, for the review and annulment of the lower Court’s
order completely excluding any evidence on the extrajudicial confessions of the accused Juan Consunji and Alfonso Panganiban
without prior proof of conspiracy.
We believe that the lower Court committed a grave abuse of discretion in ordering the complete exclusion of the prosecution’s
evidence on the alleged confessions of the accused Juan Consunji at the stage of the trial when the ruling was made.
Section 14, Rule 123, Rules of Court, is specific as to the admissibility of the extrajudicial confession of an accused freely and
voluntarily made, as evidence against him.
"SEC. 14. Confession. — The declaration of an accused expressly acknowledging the truth of his guilt as to the offense charged, may
be given in evidence against him."cralaw virtua1aw library
Under the rule of multiple admissibility of evidence, even if Consunji’s confession may not be competent as against his co-accused
Panganiban, being hearsay as to the latter, or to prove conspiracy between them without the conspiracy being established by other
evidence, the confession of Consunji was, nevertheless, admissible as evidence of the declarant’s own guilt (U. S. v. Vega, 43 Phil. 41;
People v. Bande, 50 Phil. 37; People v. Buan, 64 Phil. 296), and should have been admitted as such.
The rule cited by the Court below in support of its exclusion of the proffered evidence is Sec. 12 of Rule 123, providing
that:jgc:chanrobles.com.ph
"The act or declaration of a conspirator relating to the conspiracy and during its existence may be given in evidence against the co-
conspirator after the conspiracy is shown by evidence other than such act or declaration."cralaw virtua1aw library
Manifestly, the rule refers to statements made by one conspirator during the pendency of the unlawful enterprises ("during its
existence") and in furtherance of its object, and not to a confession made, as in this case, long after the conspiracy had been brought
to an end (U. S. v. Empeinado, 9 Phil., 613; U. S. v. Raymundo, 14 Phil., 416; People v. Badilla, 48 Phil., 718; People v. Nakpil, 52 Phil.,
985).
Besides, the prosecution had not yet offered the confessions to prove conspiracy between the two accused, nor as evidence against
both of them. In fact, the alleged confessions (both in writing and in tape recordings) had not yet even been identified (the
presentation of Atty. Xavier was precisely for the purpose of identifying the confessions), much less formally offered in evidence. For
all we know, the prosecution might still be able to adduce other proof of conspiracy between Consunji and Panganiban before their
confessions are formally offered in evidence. Assuming, therefore, that section 12 of Rule 123 also applies to the confessions in
question, it was premature for the respondent Court to exclude them completely on the ground that there was no prior proof of
conspiracy.
It is particularly noteworthy that the exclusion of the proffered confessions was not made on the basis of the objection interposed
by Panganiban’s counsel, but upon an altogether different ground, which the Court issued motu-proprio. Panganiban’s counsel
objected to Consunji’s confession as evidence of the guilt of the other accused Panganiban, on the ground that it was hearsay as to
the latter. But the Court, instead of ruling on this objection, put up its own objection to the confessions — that it could not be
admitted to prove conspiracy between Consunji and Panganiban without prior evidence of such conspiracy by a number of indefinite
acts, conditions, circumstances, etc. and completely excluded the confessions on that ground. By so doing, the Court overlooked
that the right to object is a mere privilege which the parties may waive; and if the ground for objection is known and not reasonably
made, the objection is deemed waived and the Court has no power, on its own motion, to disregard the evidence (Marella v. Reyes,
12 Phil., 1).
We see no need for the present to discuss the question of the admissibility of the individual extrajudicial confessions of two or more
accused for the purpose of establishing conspiracy between them through the identity of the confessions in essential details. After
all, the confessions are not before us and have not even been formally offered in evidence for any purpose. Suffice it to say that the
lower Court should have allowed such confessions to be given in evidence at least as against the parties who made them, and admit
the same conditionally to establish conspiracy, in order to give the prosecution a chance to get into the record all the relevant
evidence at its disposal to prove the charges. At any rate, in the final determination and consideration of the case, the trial Court
should be able to distinguish the admissible from the inadmissible, and reject what, under the rules of evidence, should be excluded.
Once more, attention should be called to the ruling of this Court in the case of Prats & Co. v. Phoenix Insurance Co., 52 Phil., 807,
816-817:jgc:chanrobles.com.ph
"In the course of long experience we have observed that justice is most effectively and expeditiously administered in the courts
where trivial objections to the admission of proof are received with least favor. The practice of excluding evidence on doubtful
objections to its materiality or technical objections to the form of the questions should be avoided. In a case of any intricacy it is
impossible for a judge of first instance, in the early stages of the development of the proof, to know with any certainty whether
testimony is relevant or not; and where there is no indication of bad faith on the part of the Attorney offering the evidence, the
court may as a rule safely accept the testimony upon the statement of the attorney that the proof offered will be connected later.
Moreover, it must be remembered that in the heat of the battle over which he presides, a judge of first instance may possibly fall
into error in judging of the relevancy of proof where a fair and logical connection is in fact shown. When such a mistake is made and
the proof is erroneously ruled out, the Supreme Court, upon appeal, often finds itself embarrassed and possibly unable to correct
the effects of the error without returning the case for a new trial, — a step which this Court is always very loath to take. On the
other hand, the admission of proof in a court of first instance, even if the question as to its form, materiality, or relevancy is
doubtful, can never result in much harm to either litigant, because the trial judge is supposed to know the law; and it is its duty,
upon final consideration of the case, to distinguish the relevant and material from the irrelevant and immaterial. If this course is
followed and the cause is prosecuted to the Supreme Court upon appeal, this Court then has all the material before it necessary to
make a correct judgment."cralaw virtua1aw library
There is greater reason to adhere to such policy in criminal cases where questions arise as to admissibility of evidence for the
prosecution, for the unjustified exclusion of evidence may lead to the erroneous acquittal of the accused or the dismissal of the
charges, from which the People can no longer appeal.
Wherefore, the order excluding the confessions of the accused Juan Consunji and Alfonso Panganiban is annulled and set aside and
the Court below is directed to proceed with the trial in accordance with law and this opinion Costs against respondents Juan
Consunji and Alfonso Panganiban. So ordered.
Paras, C.J., Bengzon, Padilla, Montemayor, Reyes, A., Jugo, Bautista Angelo, Labrador and Concepcion, JJ., concur.
G.R. No. 155208 March 27, 2007
NENA LAZALITA* TATING, Petitioner,

vs.
FELICIDAD TATING MARCELLA, represented by SALVADOR MARCELLA, CARLOS TATING, and the COURT OF APPEALS, Respondents.
DECISION
AUSTRIA-MARTINEZ, J.:
Assailed in the Special Civil Action for Certiorari before the Court are the Decision1 dated February 22, 2002 and the Resolution dated
August 22, 2002 of the Court of Appeals (CA) in CA-G.R. CV No. 64122, which affirmed the Decision2 of the Regional Trial Court (RTC)
of Cadiz City, Negros Occidental, Branch 60.
The present case arose from a controversy involving a parcel of land denominated as Lot 56 of Subdivision plan Psd-31182, located
at Abelarde St., Cadiz City, Negros Occidental. The subject lot, containing an area of 200 square meters, was owned by Daniela
Solano Vda. de Tating (Daniela) as evidenced by Transfer Certificate of Title (TCT) No. T-4393 issued by the Registry of Deeds of the
City of Cadiz.3
On October 14, 1969, Daniela sold the subject property to her granddaughter, herein petitioner Nena Lazalita Tating (Nena). The
contract of sale was embodied in a duly notarized Deed of Absolute Sale executed by Daniela in favor of Nena.4 Subsequently, title
over the subject property was transferred in the name of Nena.5 She declared the property in her name for tax purposes and paid
the real estate taxes due thereon for the years 1972, 1973, 1975 to 1986 and 1988.6 However, the land remained in possession of
Daniela.
On December 28, 1977, Daniela executed a sworn statement claiming that she had actually no intention of selling the property; the
true agreement between her and Nena was simply to transfer title over the subject property in favor of the latter to enable her to
obtain a loan by mortgaging the subject property for the purpose of helping her defray her business expenses; she later discovered
that Nena did not secure any loan nor mortgage the property; she wants the title in the name of Nena cancelled and the subject
property reconveyed to her.7
Daniela died on July 29, 19888 leaving her children as her heirs, namely: Ricardo, Felicidad, Julio, Carlos and Cirilo who predeceased
Daniela and was represented by herein petitioner.
In a letter dated March 1, 1989, Carlos informed Nena that when Daniela died they discovered the sworn statement she executed on
December 28, 1977 and, as a consequence, they are demanding from Nena the return of their rightful shares over the subject
property as heirs of Daniela.9 Nena did not reply. Efforts to settle the case amicably proved futile.
Hence, on September 6, 1989, Carlos and Felicidad, represented by her son Salvador, filed a complaint with the RTC of Cadiz City,
Negros Occidental against Nena praying for the nullification of the Deed of Absolute Sale executed by Daniela in her favor,
cancellation of the TCT issued in the name of Nena, and issuance of a new title and tax declaration in favor of the heirs of
Daniela.10 The complaint also prayed for the award of moral and exemplary damages as well as attorney’s fees and litigation
expenses. On March 19, 1993, the plaintiffs filed an amended complaint with leave of court for the purpose of excluding Ricardo as a
party plaintiff, he having died intestate and without issue in March 1991.11 He left Carlos, Felicidad, Julio, and Nena as his sole heirs.
In her Answer, Nena denied that any fraud or misrepresentation attended the execution of the subject Deed of Absolute Sale. She
also denied having received the letter of her uncle, Carlos. She prayed for the dismissal of the complaint, and in her counterclaim,
she asked the trial court for the award of actual, exemplary and moral damages as well as attorney’s fees and litigation expenses.12
Trial ensued. On November 4, 1998, the RTC rendered judgment with the following dispositive portion:
WHEREFORE, in view of all the foregoing, judgment is hereby rendered in favor of the plaintiffs and against the defendant, and
hereby declaring the document of sale dated October 14, 1969 (Exh. "Q") executed between Daniela Solano Vda. de Tating and Nena
Lazalita Tating as NULL and VOID and further ordering:
1. The Register of Deeds of Cadiz City to cancel TCT No. 5975 and in lieu thereof to issue a new title in the names of Carlos
Tating, Pro-indiviso owner of one-fourth (¼) portion of the property; Felicidad Tating Marcella, Pro-indiviso owner of one-
fourth (¼) portion; Julio Tating, Pro-indiviso owner of one-fourth (¼) portion and Nena Lazalita Tating, Pro-indiviso owner of
one-fourth (¼) portion, all of lot 56 after payment of the prescribed fees;
2. The City Assessor of the City of Cadiz to cancel Tax Declaration No. 143-00672 and in lieu thereof issue a new Tax
Declaration in the names of Carlos Tating, ¼ Pro-indiviso portion; Felicidad Tating Marcella, ¼ Pro-indiviso portion; Julio
Tating, ¼ Pro-indiviso portion; and Nena Lazalita Tating, ¼ Pro-indiviso portion, all of lot 56 as well as the house standing
thereon be likewise declared in the names of the persons mentioned in the same proportions as above-stated after
payment of the prescribed fees;
3. The defendant is furthermore ordered to pay plaintiffs the sum of ₱20,000.00 by way of moral damages, ₱10,000.00 by
way of exemplary damages, ₱5,000.00 by way of attorney’s fees and ₱3,000.00 by way of litigation expenses; and to
4. Pay the costs of suit.
SO ORDERED.13
Nena filed an appeal with the CA. On February 22, 2002, the CA rendered its Decision affirming the judgment of the RTC.14
Nena’s Motion for Reconsideration was denied by the CA in its Resolution dated August 22, 2002.15
Hence, herein petition for certiorari anchored on the ground that the CA "has decided the instant case without due regard to and in
violation of the applicable laws and Decisions of this Honorable Court and also because the Decision of the Regional Trial Court,
which it has affirmed, is not supported by and is even against the evidence on record."16
At the outset, it must be stated that the filing of the instant petition for certiorari under Rule 65 of the Rules of Court is
inappropriate. Considering that the assailed Decision and Resolution of the CA finally disposed of the case, the proper remedy is a
petition for review under Rule 45 of the Rules of Court.
The Court notes that while the instant petition is denominated as a Petition for Certiorari under Rule 65 of the Rules of Court, there
is no allegation that the CA committed grave abuse of discretion. On the other hand, the petition actually avers errors of judgment,
rather than of jurisdiction, which are the proper subjects of a petition for review on certiorari. Hence, in accordance with the liberal
spirit pervading the Rules of Court and in the interest of justice, the Court decided to treat the present petition for certiorari as
having been filed under Rule 45, especially considering that it was filed within the reglementary period for filing the same.17
As to the merits of the case, petitioner contends that the case for the private respondents rests on the proposition that the Deed of
Absolute Sale dated October 14, 1969 is simulated because Daniela’s actual intention was not to dispose of her property but simply
to help petitioner by providing her with a collateral. Petitioner asserts that the sole evidence which persuaded both the RTC and the
CA in holding that the subject deed was simulated was the Sworn Statement of Daniela dated December 28, 1977. However,
petitioner argues that said Sworn Statement should have been rejected outright by the lower courts considering that Daniela has
long been dead when the document was offered in evidence, thereby denying petitioner the right to cross-examine her.
Petitioner also contends that while the subject deed was executed on October 14, 1969, the Sworn Statement was purportedly
executed only on December 28, 1977 and was discovered only after the death of Daniela in 1994.18 Petitioner argues that if the deed
of sale is indeed simulated, Daniela would have taken action against the petitioner during her lifetime. However, the fact remains
that up to the time of her death or almost 20 years after the Deed of Absolute Sale was executed, she never uttered a word of
complaint against petitioner.
Petitioner further asserts that the RTC and the CA erred in departing from the doctrine held time and again by the Supreme Court
that clear, strong and convincing evidence beyond mere preponderance is required to show the falsity or nullity of a notarial
document. Petitioner also argues that the RTC and the CA erred in its pronouncement that the transaction between Daniela and
petitioner created a trust relationship between them because of the settled rule that where the terms of a contract are clear, it
should be given full effect.
In their Comment and Memorandum, private respondents contend that petitioner failed to show that the CA or the RTC committed
grave abuse of discretion in arriving at their assailed judgments; that Daniela’s Sworn Statement is sufficient evidence to prove that
the contract of sale by and between her and petitioner was merely simulated; and that, in effect, the agreement between petitioner
and Daniela created a trust relationship between them.
The Court finds for the petitioner.
The CA and the trial court ruled that the contract of sale between petitioner and Daniela is simulated. A contract is simulated if the
parties do not intend to be bound at all (absolutely simulated) or if the parties conceal their true agreement (relatively
simulated).19 The primary consideration in determining the true nature of a contract is the intention of the parties.20 Such intention
is determined from the express terms of their agreement as well as from their contemporaneous and subsequent acts.21
In the present case, the main evidence presented by private respondents in proving their allegation that the subject deed of sale did
not reflect the true intention of the parties thereto is the sworn statement of Daniela dated December 28, 1977. The trial court
admitted the said sworn statement as part of private respondents’ evidence and gave credence to it. The CA also accorded great
probative weight to this document.
There is no issue in the admissibility of the subject sworn statement. However, the admissibility of evidence should not be equated
with weight of evidence.22 The admissibility of evidence depends on its relevance and competence while the weight of evidence
pertains to evidence already admitted and its tendency to convince and persuade.23 Thus, a particular item of evidence may be
admissible, but its evidentiary weight depends on judicial evaluation within the guidelines provided by the rules of evidence.24 It is
settled that affidavits are classified as hearsay evidence since they are not generally prepared by the affiant but by another who uses
his own language in writing the affiant’s statements, which may thus be either omitted or misunderstood by the one writing
them.25 Moreover, the adverse party is deprived of the opportunity to cross-examine the affiant.26 For this reason, affidavits are
generally rejected for being hearsay, unless the affiants themselves are placed on the witness stand to testify thereon.27 The Court
finds that both the trial court and the CA committed error in giving the sworn statement probative weight. Since Daniela is no longer
available to take the witness stand as she is already dead, the RTC and the CA should not have given probative value on Daniela’s
sworn statement for purposes of proving that the contract of sale between her and petitioner was simulated and that, as a
consequence, a trust relationship was created between them.
Private respondents should have presented other evidence to sufficiently prove their allegation that Daniela, in fact, had no
intention of disposing of her property when she executed the subject deed of sale in favor of petitioner. As in all civil cases, the
burden is on the plaintiff to prove the material allegations of his complaint and he must rely on the strength of his evidence and not
on the weakness of the evidence of the defendant.28 Aside from Daniela’s sworn statement, private respondents failed to present
any other documentary evidence to prove their claim. Even the testimonies of their witnesses failed to establish that Daniela had a
different intention when she entered into a contract of sale with petitioner.
In Suntay v. Court of Appeals,29 the Court ruled that the most protuberant index of simulation is the complete absence, on the part
of the vendee, of any attempt in any manner to assert his rights of ownership over the disputed property.30 In the present case,
however, the evidence clearly shows that petitioner declared the property for taxation and paid realty taxes on it in her name.
Petitioner has shown that from 1972 to 1988 she religiously paid the real estate taxes due on the said lot and that it was only in
1974 and 1987 that she failed to pay the taxes thereon. While tax receipts and declarations and receipts and declarations of
ownership for taxation purposes are not, in themselves, incontrovertible evidence of ownership, they constitute at least proof that
the holder has a claim of title over the property.31 The voluntary declaration of a piece of property for taxation purposes manifests
not only one’s sincere and honest desire to obtain title to the property and announces his adverse claim against the State and all
other interested parties, but also the intention to contribute needed revenues to the Government.32 Such an act strengthens one’s
bona fide claim of acquisition of ownership.33 On the other hand, private respondents failed to present even a single tax receipt or
declaration showing that Daniela paid taxes due on the disputed lot as proof that she claims ownership thereof. The only Tax
Declaration in the name of Daniela, which private respondents presented in evidence, refers only to the house standing on the lot in
controversy.34 Even the said Tax Declaration contains a notation that herein petitioner owns the lot (Lot 56) upon which said house
was built.
Moreover, the Court agrees with petitioner that if the subject Deed of Absolute Sale did not really reflect the real intention of
Daniela, why is it that she remained silent until her death; she never told any of her relatives regarding her actual purpose in
executing the subject deed; she simply chose to make known her true intentions through the sworn statement she executed on
December 28, 1977, the existence of which she kept secret from her relatives; and despite her declaration therein that she is
appealing for help in order to get back the subject lot, she never took any concrete step to recover the subject property from
petitioner until her death more than ten years later.
It is true that Daniela retained physical possession of the property even after she executed the subject Absolute Deed of Sale and
even after title to the property was transferred in petitioner’s favor. In fact, Daniela continued to occupy the property in dispute
until her death in 1988 while, in the meantime, petitioner continued to reside in Manila. However, it is well-established that
ownership and possession are two entirely different legal concepts.35 Just as possession is not a definite proof of ownership, neither
is non-possession inconsistent with ownership. The first paragraph of Article 1498 of the Civil Code states that when the sale is made
through a public instrument, the execution thereof shall be equivalent to the delivery of the thing which is the object of the contract,
if from the deed the contrary does not appear or cannot clearly be inferred. Possession, along with ownership, is transferred to the
vendee by virtue of the notarized deed of conveyance.36 Thus, in light of the circumstances of the present case, it is of no legal
consequence that petitioner did not take actual possession or occupation of the disputed property after the execution of the deed of
sale in her favor because she was already able to perfect and complete her ownership of and title over the subject property.
As to Daniela’s affidavit dated June 9, 1983, submitted by petitioner, which confirmed the validity of the sale of the disputed lot in
her favor, the same has no probative value, as the sworn statement earlier adverted to, for being hearsay. Naturally, private
respondents were not able to cross-examine the deceased-affiant on her declarations contained in the said affidavit.
However, even if Daniela’s affidavit of June 9, 1983 is disregarded, the fact remains that private respondents failed to prove by clear,
strong and convincing evidence beyond mere preponderance of evidence37 that the contract of sale between Daniela and petitioner
was simulated. The legal presumption is in favor of the validity of contracts and the party who impugns its regularity has the burden
of proving its simulation.38 Since private respondents failed to discharge the burden of proving their allegation that the contract of
sale between petitioner and Daniela was simulated, the presumption of regularity and validity of the October 14, 1969 Deed of
Absolute Sale stands.
Considering that the Court finds the subject contract of sale between petitioner and Daniela to be valid and not fictitious or
simulated, there is no more necessity to discuss the issue as to whether or not a trust relationship was created between them.
WHEREFORE, the petition is GRANTED. The assailed Decision and Resolution of the Court of Appeals in CA-G.R. CV No. 64122,
affirming the Decision of the Regional Trial Court of Cadiz City, Negros Occidental, Branch 60, in Civil Case No. 278-C, are REVERSED
AND SET ASIDE. The complaint of the private respondents is DISMISSED.
No costs.
SO ORDERED.

I. 2-3. Scope, Applicability, Admissibility Cases (Evid)

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G.R. No.

L-64204 May 31, 1985

DEL ROSARIO & SONS LOGGING ENTERPRISES, INC., petitioner,

Carlito B. Yebes for petitioner.

Jose T. Gonzales for private respondents.

Art. 106. Contractor or subcontractor .— ...

G.R. No. 176240 October 17, 2008

= 5 months and 6 days

= 136 days x ₱190.00

= Jan. 5, 1992 to July 15, 2001 = ₱23,465.00

= ₱190.00 x 26 days x 9.5 yrs. / 2

1. Cesar Paciencia - P 43,130.00

3. Roland Mosquera - 33,250.00

4. Petronilo Carceda - 72,770.00

5. Roland Sasan, Sr. - 60,420.00

6. Leonilo Dayday - 75,240.00

7. Eleuterio Sacil - 53,010.00

8. Mario Juntilla - 65,360.00

9. Wilfredo Juegos - 57,950.00

10. Modesto Aguirre - 54,245.00

11. Alejandro Ardimer - 59,185.00

On the charge of illegal dismissal, the NLRC ruled that:

1. Aguirre, Modesto - P 5,434.00

2. Ardimer, Alejandro - 5,434.00

3. Carcedo, Petronilo - 5,434.00

4. Dayday, Leonilo - 5,434.00

5. Juegos, Wilfredo - 5,434.00

6. Juntilla, Mario - 5,434.00

7. Paciencia, Cesar - 5,434.00

8. Sacil, Eleuterio - 5,434.00

(b) The contractor or subcontractor has substantial capital or investment; and

[G.R. No. 127240. March 27, 2000.]

G.R. No. 168644 February 16, 2010

Mr. Ramos: Into the very nature of such deposit. x x x47

G.R. No. L-28607 February 21, 1929

PRATS & COMPANY, a registered partnership, plaintiff-appellant,

MALCOLM, J., concurring:

[G.R. No. L-9181. November 28, 1955.]

1. EVIDENCE; ADMISSIBILITY OF EVIDENCE; EXTRA-JUDICIAL CONFESSION; ADMISSIBLE AS EVIDENCE OF DECLARANT’S GUILT. —

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

"FISCAL LUSTRE:chanrob1es virtual 1aw library

COURT:chanrob1es virtual 1aw library

NENA LAZALITA* TATING, Petitioner,

4. Pay the costs of suit.

The Court finds for the petitioner.

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