RULE 129 CASES

1) Siena Realty Corp vs Gal-lang

SIENA REALTY CORPORATION and LILIBETH MANLUGON v. HON.

LOLITA GALANG, ANITA CO NG and COURT OF APPEALS

G.R. No. 145169, 13 May 2004, THIRD DIVISION

Petitioners Siena Realty Corporation and Lilibeth Manlugon (Siena) filed a Petition for
Certiorari before the Court of Appeals (CA) concerning the Regional Trial Court of
Manila‘s (RTC) Order dismissing Siena‘s complaint. Upon CA‘s dismissal of the petition,
Siena filed a Motion for Reconsideration. Pending resolution of the motion, the
Supreme Court issued a resolution approving the amendment to Section 4, Rule 65 of
the 1997 Rules of Civil Procedure. The said resolution provided that in case of the timely
filing of a motion for reconsideration, the 60-day period “shall be counted from
the denial of the said motion”. CA then dismissed Siena‘s Motion for Reconsideration on
the ground that the said amendment applies to Siena‘s motion. Hence, this
present petition.

ISSUE:

Whether or not the CA acted with grave abuse of discretion for applying the amendment
retroactively

HELD:

Section 1, Rule 129 of the Rules on Evidence states that judicial departments are
mandated to take judicial notice even without the introduction of evidence, hence, even
if petitioner did not raise or allege the amendment in their motion for reconsideration
before the Court of Appeals, it should have taken mandatory judicial notice. The
resolution did not have to specify that it had retroactive effect as it pertains to a
procedural matter.

The amendatory rule in their favor notwithstanding, Siena‘s petition fails. At the time
Siena filed before the appellate court their Petition for Certiorari on the 60thday
following their receipt of the Order of RTC, the said Order had become final and
executory after the 15th day following Siena‘s receipt thereof.

THIRD DIVISION

[G.R. No. 145169. May 13, 2004]

SIENA REALTY CORPORATION, as represented by LYDIA CO HAO
and LILIBETH MANLUGON, petitioner, vs. HON. LOLITA GAL-
LANG, as Presiding Judge of the RTC of Manila, Branch 44;
ANITA CO NG in trust for ROCKEFELLER NG; and the COURT
OF APPEALS, SPECIAL 13TH DIVISION, respondents.

DECISION
CARPIO MORALES, J.:

Challenged via petition for review on certiorari under Rule 45 of the 1997
Revised Rules of Court is the September 13, 2000 Resolution of the Court of
Appeals in C.A.-G.R. SP No. 59096, Siena Realty Corporation, as
represented by Lydia Co Hao and Lilibeth Manlugon v. Hon. Lolita O. Gal-
lang, as Presiding Judge of Br. 44 of the RTC of Manila, and Anita Co Ng in
trust for Rockefeller Ng.
Since the petition attributes grave abuse of discretion on the part of the
Court of Appeals in the issuance of subject resolution, what should have been
filed was one for certiorari under Rule 65. On this score alone, the petition
must be denied due course.
But even if technicality were set aside, just the same the petition fails.
Petitioners filed a petition for certiorari before the Court of Appeals on
June 7, 2000 or allegedly on the 60th day from their receipt of the March 23,
2000 Order of Branch 44 of the Manila Regional Trial Court denying their
motion for Reconsideration of said courts Order dismissing, on motion of
private respondent, their complaint.
The Court of Appeals, by Resolution of June 20, 2000, dismissed
[1]

petitioners petition for certiorari, however, for being filed out of time, it holding
that:

Per records, it appears that petitioners had only until May 29, 2000 within which to
file the Petition for Certiorari considering the following:

1. Petitioners received a copy of the October 20, 1999 Order denying their [counsels]
Notice of Withdrawal [and likewise denying petitioners Motion for Reconsideration
of the Order dismissing their complaint] on November 8, 1999;

2. Petitioners filed a motion for reconsideration of the October 20, 1999 Order on
November 17, 1999; and that
3. Petitioners received a copy of the March 23, 2000 Order denying their motion for
reconsideration on April 8, 2000.

The instant petition was filed on June 7, 2000 or nine (9) days late.

Thus, for being belatedly filed, the instant petition is hereby DISMISSED.

Petitioners thereupon filed (on July 10, 2000) a motion for

reconsideration of the above-said June 20, 2000 Order of the appellate court.
[2]

In the meantime, this Court issued in A.M. No. 00-2-03-SC (Reglamentary

Period to File Petitions for Certiorari and Petition for Review on Certiorari) a
Resolution dated August 1, 2000 approving the amendment to the following
provision of Section 4, Rule 65 of the 1997 Rules of Civil Procedure:

SECTION 4. Where petition filed. The petition may be filed not later than sixty
(60) days from notice of the judgment, order, resolution sought to be assailed in
the Supreme Court or, if it relates to the acts or omissions of a lower court or of a
corporation, board, officer or person, in the Regional Trial Court exercising
jurisdiction over the territorial area as defined by the Supreme Court. It may also be
filed in the Court of Appeals whether or not the same is in aid of its jurisdiction. If it
involves the acts or omissions of a quasi-judicial agency, and unless otherwise
provided by law or these Rules, the petition shall be filed in and cognizable only by
the Court of Appeals.

If the petitioner had filed a motion for new trial or reconsideration after notice of
said judgment, order or resolution, the period herein fixed shall be
interrupted. If the motion is denied, the aggrieved party may file the petition
within the remaining period, but which shall not be less than five (5) days in any
event, reckoned from notice of such denial. No extension of time shall be granted
except for the most compelling reason and in no case to exceed fifteen (15)
days. (Emphasis and underscoring supplied)

The amendment to Sec. 4, Rule 65, which took effect on September 1,

2000, reads:

SECTION 4. When and where petition filed. The petition shall be filed not later than
sixty (60) days from notice of the judgment, order or resolution. In case a motion for
reconsideration or new trial is timely filed, whether such motion is required or
not, the sixty (60) day period shall be counted from notice of the denial of the
said motion.
The petition shall be filed in the Supreme Court or, if it relates to the acts or omissions
of a lower court or of a corporation, board, officer or person, in the Regional Trial
Court exercising jurisdiction over the territorial area as defined by the Supreme Court.
It may also be filed in the Court of Appeals whether or not the same is in the aid of its
appellate jurisdiction, or in the Sandiganbayan if it is in aid of its appellate
jurisdiction. If it involves the acts or omissions of a quasi-judicial agency, unless
otherwise provided by law or these rules, the petition shall be filed in and cognizable
only by the Court of Appeals.

No extension of time to file the petition shall be granted except for compelling reason
and in no case exceeding fifteen (15) days. (Emphasis and underscoring supplied)

The Court of Appeals, acting on petitioners Motion for Reconsideration of

its Order of June 20, 2000, denied, by Resolution of September 13,
2000, said motion in this wise:
[3]

xxx

From the argument espoused by petitioners counsel, it appears that he overlooked the
provision of second paragraph of Sec. 4, Rule 65 of the 1997 Rules of Civil Procedure
as amended per Supreme Court Circular dated July 21, 1998, which provides as
follows:

If the petitioner had filed a motion for new trial or reconsideration after notice of said
judgment, order or resolution, the period herein fixed shall be interrupted. If the
motion is denied, the aggrieved party may file the petition within the remaining
period, but which shall not be less than five (5) days in any event, reckoned from
notice of such denial. No extension of time shall be granted except for the most
compelling reason and in no case to exceed fifteen (15) days.

Verily, the sixty (60) day period within which to file a Petition for Certiorari is not
counted from the date of the receipt of the denial of Motion for Reconsideration, but
from the date of the receipt of the questioned order or decision, except that such 60-
day period is interrupted upon the filing of a Motion for Reconsideration.

WHEREFORE, for reason above-stated, the instant motion is DENIED.

Consequently, the present Petition for Certiorari is DISMISSED with
finality. (Underscoring supplied)

Hence, the petition at bar, petitioners challenging the September 13, 2000
Resolution of the appellant court as having been
. . . ISSUED WITH GRAVE ABUSE OF DISCRETION AS IT WAS MADE
WITHOUT TAKING PRIOR JUDICIAL NOTICE OF SUPREME COURT A.M.
NO. 00-2 - 03 SC WHICH RESOLUTION TOOK EFFECT ON SEPTEMBER 1,
2000, AND WHICH AMENDED THE SECOND PARAGRAPH OF SECTION 4,
RULE 65 OF THE 1997 RULES OF CIVIL PROCEDURE. (Underscoring supplied)
[4]

Petitioners argument is well-taken.

Section 1, Rule 129 of the Rules on Evidence reads:

SECTION 1. Judicial notice, when mandatory. A court shall take judicial

notice, without the introduction of evidence, of the existence and territorial extent of
states, their political history, forms of government and symbols of nationality, the law
of nations, the admiralty and maritime courts of the world and their seals, the political
constitution and history of the Philippines, the official acts of the legislative,
executive and judicial departments of the Philippines, the laws of nature, the
measure of time, and the geographical divisions. (Emphasis and underscoring
supplied)

Even if petitioner did not raise or allege the amendment in their motion for
reconsideration before it, the Court of Appeals should have taken mandatory
judicial notice of this Courts resolution in A.M. Matter No. 00-02-03 SC. The
resolution did not have to specify that it had retroactive effect as it pertains to
a procedural matter. Contrary to private respondents allegation that the matter
was no longer pending and undetermined, the issue of whether the petition
for certiorari was timely filed was still pending reconsideration when the
amendment took effect on September 1, 2000, hence, covered by the its
retroactive application.
The amendatory rule in their favor notwithstanding, petitioners petition fails
as stated early on. The order of the trial court granting private respondents
Motion to Dismiss the complaint was a final, not interlocutory, order and as
such, it was subject to appeal, not a petition for certiorari. At the time
[5]

petitioners filed before the appellate court their petition for certiorari on the
60th day following their receipt of the October 20, 1999 Order of the trial court
denying their Motion for Reconsideration of its dismissal order, the said
October 20, 1999 Order had become final and executory after the 15 th day
following petitioners receipt thereof.
WHEREFORE, the instant petition is, in light of the foregoing discussions,
hereby DENIED.
SO ORDERED.
 Vitug, (Chairman), Sandoval-Gutierrez, and Corona, JJ., concur.

2) DENR vs DENR REGION 12 COURT EMPLOYEES

DENR VS DENR EMPLOYEES

Posted by kaye lee on 12:43 PM
G.R. No. 149724 [Alter ego of the President, Qualified Political Agency Doctrine]

FACTS:
DENR Reg 12 Employees filed a petition for nullity of the memorandum order issued by the Regional Exec.
Director of DENR, directing the immediate transfer of the DENR 12 Regional Offices from Cotabato to Koronadal
City. The memorandum was issued pursuant to DENR Executive Order issued by the DENR Secretary.

Issue:
Whether or not DENR Secretary has the authority to reorganize the DENR Region 12 Office.

RULING: The qualified political agency doctrine, all executive and administrative organizations are adjuncts of the
Executive Department, and the acts of the Secretaries of such departments, performed and promulgated in the
regular course of business, are, unless disapproved or reprobated by the Chief Executive, are presumptively the acts
of the Chief Executive. It is corollary to the control power of the President as provided for under Art. VII Sec. 17 of
the 1987 Constitution: "The President shall have control of all the executive departments, bureaus, and offices. He
shall ensure that the laws be faithfully executed."

In the case at bar, the DENR Secretary can validly reorganize the DENR by ordering the transfer of the DENR XII
Regional Offices from Cotabato City to Koronadal, South Cotabato. The exercise of this authority by the DENR
Secretary, as an alter ego, is presumed to be the acts of the President for the latter had not expressly repudiated the
same.
Categories: Constitutional Law 1, G.R. No. 149724

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FIRST DIVISION

[G.R. No. 149724. August 19, 2003]

DEPARTMENT OF ENVIRONMENT AND NATURAL

RESOURCES, represented herein by its Secretary, HEHERSON
T. ALVAREZ, petitioner, vs. DENR REGION 12
EMPLOYEES, represented by BAGUIDALI KARIM, Acting
President of COURAGE (DENR Region 12 Chapter),respondents.

DECISION
YNARES-SANTIAGO, J.:

This is a petition for review assailing the Resolutions dated May 31, 2000[1] of the
Court of Appeals which dismissed the petition for certiorari in CA-G.R. SP No. 58896,
and its Resolution dated August 20, 2001[2], which denied the motion for reconsideration.
The facts are as follows:
On November 15, 1999, Regional Executive Director of the Department of
Environment and Natural Resources for Region XII, Israel C. Gaddi, issued a
Memorandum[3]directing the immediate transfer of the DENR XII Regional Offices from
Cotabato City to Koronadal (formerly Marbel), South Cotabato. The Memorandum was
issued pursuant to DENR Administrative Order No. 99-14, issued by then DENR
Secretary Antonio H. Cerilles, which reads in part:

Subject: Providing for the Redefinition of Functions and Realignment

of Administrative Units in the Regional and Field Offices:

Pursuant to Executive Order No. 192, dated June 10, 1987 and as an interim
administrative arrangement to improve the efficiency and effectiveness of the
Department of Environment and Natural Resources (DENR) in delivering its services
pending approval of the government-wide reorganization by Congress, the following
redefinition of functions and realignment of administrative units in the regional and
field offices are hereby promulgated:

Section 1. Realignment of Administrative Units:

The DENR hereby adopts a policy to establish at least one Community Environment
and Natural Resources Office (CENRO) or Administrative Unit per Congressional
District except in the Autonomous Region of Muslim Mindanao (ARMM) and the
National Capital Region (NCR). The Regional Executive Directors (REDs) are hereby
authorized to realign/relocate existing CENROs and implement this policy in
accordance with the attached distribution list per region which forms part of this
Order. Likewise, the following realignment and administrative arrangements are
hereby adopted:

xxxxxxxxx

1.6. The supervision of the Provinces of South Cotabato and Sarangani shall be
transferred from Region XI to XII. [4]

Respondents, employees of the DENR Region XII who are members of the
employees association, COURAGE, represented by their Acting President, Baguindanai
A. Karim, filed with the Regional Trial Court of Cotabato, a petition for nullity of orders
with prayer for preliminary injunction.
 On December 8, 1999, the trial court issued a temporary restraining order enjoining
petitioner from implementing the assailed Memorandum. The dispositive portion of the
Order reads:

WHEREFORE, defendants DENR Secretary Antonio H. Cerilles and Regional

Executive Director Israel C. Gaddi are hereby ordered to cease and desist from doing
the act complained of, namely, to stop the transfer of DENR [Region] 12 offices from
Cotabato City to Korandal (Marbel), South Cotabato.

xxx xxx xxx.

SO ORDERED. [5]

Petitioner filed a Motion for Reconsideration with Motion to Dismiss, raising the
following grounds:
I.

The power to transfer the Regional Office of the Department of Environment and
Natural Resources (DENR) is executive in nature.

II.

The decision to transfer the Regional Office is based on Executive Order No. 429,
which reorganized Region XII.

III.

The validity of EO 429 has been affirmed by the Honorable Supreme Court in the Case
of Chiongbian vs. Orbos (1995) 245 SCRA 255.

IV.

Since the power to reorganize the Administrative Regions is Executive in Nature citing
Chiongbian, the Honorable Court has no jurisdiction to entertain this petition.
[6]

On January 14, 2000, the trial court rendered judgment, the dispositive portion of
which reads:

CONSEQUENTLY, order is hereby issued ordering the respondents herein to cease

and desist from enforcing their Memorandum Order dated November 15, 1999
relative to the transfer of the DENR Regional Offices from Region 12 to Region 11 at
Koronadal, South Cotabato for being bereft of legal basis and issued with grave abuse
of discretion amounting to lack or excess of jurisdiction on their part, and they are
further ordered to return back the seat of the DENR Regional Offices 12 to Cotabato
City.

SO ORDERED. [7]

Petitioners motion for reconsideration was denied in an Order dated April 10,
2000. A petition for certiorari under Rule 65 was filed before the Court of Appeals,
docketed as CA-G.R. SP No. 58896. The petition was dismissed outright for: (1) failure
to submit a written explanation why personal service was not done on the adverse
party; (2) failure to attach affidavit of service; (3) failure to indicate the material dates
when copies of the orders of the lower court were received; (4) failure to attach certified
true copy of the order denying petitioners motion for reconsideration; (5) for improper
verification, the same being based on petitioners knowledge and belief, and (6) wrong
remedy of certiorari under Rule 65 to substitute a lost appeal.[8]
The motion for reconsideration was denied in a resolution dated August 20,
2001.[9] Hence, this petition based on the following assignment of errors:
I

RULES OF PROCEDURE CAN NOT BE USED TO DEFEAT THE ENDS OF

SUBSTANTIAL JUSTICE

II

THE DECISION OF THE LOWER COURT DATED 14 JANUARY 2000 WHICH

WAS AFFIRMED IN THE QUESTIONED RESOLUTIONS OF THE COURT OF
APPEALS DATED 31 MAY 2000 AND 20 AUGUST 2001 IS PATENTLY
ILLEGAL AND SHOULD BE NULLIFIED, CONSIDERING THAT:

A. RESPONDENTS HAVE NO CAUSE OF ACTION AGAINST

PETITIONER AS THEY HAVE NO RIGHT TO CAUSE THE
DENR REGION 12 OFFICE TO REMAIN IN COTABATO
CITY.

B. THE STATE DID NOT GIVE ITS CONSENT TO BE SUED.

C. THE DECISION OF THE LOWER COURT DATED 14 JANUARY

2000 IS CONTRARY TO THE RULE OF PRESUMPTION OF
REGULARITY IN THE PERFORMANCE OF OFFICIAL
FUNCTIONS.

D. IN ANY EVENT, THE DECISION OF THE LOWER COURT

DATED 14 JANUARY 2000 IS CONTRARY TO THE LETTER
 AND INTENT OF EXECUTIVE ORDER NO. 429 AND
REPUBLIC ACT NO. 6734.

E. THE DETERMINATION OF THE PROPRIETY AND

PRACTICALITY OF THE TRANSFER OF REGIONAL
OFFICES IS INHERENTLY EXECUTIVE, AND THEREFORE,
NON-JUSTICIABLE. [10]

In essence, petitioner argues that the trial court erred in enjoining it from causing
the transfer of the DENR XII Regional Offices, considering that it was done pursuant to
DENR Administrative Order 99-14.
The issues to be resolved in this petition are: (1) Whether DAO-99-14 and the
Memorandum implementing the same were valid; and (2) Whether the DENR Secretary
has the authority to reorganize the DENR.
Prefatorily, petitioner prays for a liberal application of procedural rules considering
the greater interest of justice.
This Court is fully aware that procedural rules are not to be simply disregarded for
these prescribed procedures ensure an orderly and speedy administration of
justice.However, it is equally true that litigation is not merely a game of
technicalities. Time and again, courts have been guided by the principle that the rules of
procedure are not to be applied in a very rigid and technical manner, as rules of
procedure are used only to help secure and not to override substantial justice. [11] Thus, if
the application of the Rules would tend to frustrate rather than promote justice, it is
always within the power of this Court to suspend the rules, or except a particular case
from its operation.[12]
Despite the presence of procedural flaws, we find it necessary to address the issues
because of the demands of public interest, including the need for stability in the public
service and the serious implications this case may cause on the effective administration
of the executive department. Although no appeal was made within the reglementary
period to appeal, nevertheless, the departure from the general rule that the
extraordinary writ of certiorari cannot be a substitute for the lost remedy of appeal is
justified because the execution of the assailed decision would amount to an oppressive
exercise of judicial authority.[13]
Petitioner maintains that the assailed DAO-99-14 and the implementing
memorandum were valid and that the trial court should have taken judicial notice of
Republic Act No. 6734, otherwise known as An Organic Act for the Autonomous Region
in Muslim Mindanao, and its implementing Executive Order 429,[14] as the legal bases for
the issuance of the assailed DAO-99-14. Moreover, the validity of R.A. No. 6734 and
E.O. 429 were upheld in the case of Chiongbian v. Orbos.[15] Thus, the respondents
cannot, by means of an injunction, force the DENR XII Regional Offices to remain in
Cotabato City, as the exercise of the authority to transfer the same is executive in
nature.
It is apropos to reiterate the elementary doctrine of qualified political agency, thus:
Under this doctrine, which recognizes the establishment of a single executive, all
executive and administrative organizations are adjuncts of the Executive Department,
the heads of the various executive departments are assistants and agents of the Chief
Executive, and, except in cases where the Chief Executive is required by the
Constitution or law to act in person or the exigencies of the situation demand that he
act personally, the multifarious executive and administrative functions of the Chief
Executive are performed by and through the executive departments, and the acts of the
Secretaries of such departments, performed and promulgated in the regular course of
business, are, unless disapproved or reprobated by the Chief Executive, presumptively
the acts of the Chief Executive. [16]

This doctrine is corollary to the control power of the President as provided for under
Article VII, Section 17 of the 1987 Constitution, which reads:

Sec. 17. The President shall have control of all the executive departments, bureaus,
and offices. He shall ensure that the laws be faithfully executed.

However, as head of the Executive Department, the President cannot be expected

to exercise his control (and supervisory) powers personally all the time. He may
delegate some of his powers to the Cabinet members except when he is required by the
Constitution to act in person or the exigencies of the situation demand that he acts
personally.[17]
In Buklod ng Kawaning EIIB v. Zamora,[18] this Court upheld the continuing authority
of the President to carry out the reorganization in any branch or agency of the executive
department. Such authority includes the creation, alteration or abolition of public
offices.[19] The Chief Executives authority to reorganize the National Government finds
basis in Book III, Section 20 of E.O. No. 292, otherwise known as the Administrative
Code of 1987, viz:

Section 20. Residual Powers. Unless Congress provides otherwise, the President shall
exercise such other powers and functions vested in the President which are provided
for under the laws and which are not specifically enumerated above or which are not
delegated by the President in accordance with law.

Further, in Larin v. Executive Secretary,[20] this Court had occasion to rule:

This provision speaks of such other powers vested in the President under the law.
What law then gives him the power to reorganize? It is Presidential Decree No. 1772
which amended Presidential Decree No. 1416. These decrees expressly grant the
President of the Philippines the continuing authority to reorganize the national
government, which includes the power to group, consolidate bureaus and agencies, to
abolish offices, to transfer functions, to create and classify functions, services and
activities and to standardize salaries and materials. The validity of these two decrees is
unquestionable. The 1987 Constitution clearly provides that all laws, decrees,
executive orders, proclamations, letters of instructions and other executive issuances
not inconsistent with this Constitution shall remain operative until amended, repealed
or revoked. So far, there is yet no law amending or repealing said decrees.

Applying the doctrine of qualified political agency, the power of the President to
reorganize the National Government may validly be delegated to his cabinet members
exercising control over a particular executive department. Thus, in DOTC Secretary v.
Mabalot,[21] we held that the President through his duly constituted political agent and
alter ego, the DOTC Secretary may legally and validly decree the reorganization of the
Department, particularly the establishment of DOTC-CAR as the LTFRB Regional Office
at the Cordillera Administrative Region, with the concomitant transfer and performance
of public functions and responsibilities appurtenant to a regional office of the LTFRB.
Similarly, in the case at bar, the DENR Secretary can validly reorganize the DENR
by ordering the transfer of the DENR XII Regional Offices from Cotabato City to
Koronadal, South Cotabato. The exercise of this authority by the DENR Secretary, as
an alter ego, is presumed to be the acts of the President for the latter had not expressly
repudiated the same.
The trial court should have taken judicial notice of R.A. No. 6734, as implemented
by E.O. No. 429, as legal basis of the Presidents power to reorganize the executive
department, specifically those administrative regions which did not vote for their
inclusion in the ARMM. It is axiomatic that a court has the mandate to apply relevant
statutes and jurisprudence in determining whether the allegations in a complaint
establish a cause of action. While it focuses on the complaint, a court clearly cannot
disregard decisions material to the proper appreciation of the questions before it.[22] In
resolving the motion to dismiss, the trial court should have taken cognizance of the
official acts of the legislative, executive, and judicial departments because they are
proper subjects of mandatory judicial notice as provided by Section 1 of Rule 129 of the
Rules of Court, to wit:

A court shall take judicial notice, without the introduction of evidence, of the
existence and territorial extent of states, their political history, forms of government
and symbols of nationality, the law of nations, the admiralty and maritime courts of
the world and their seals, the political constitution and history of the Philippines, the
official acts of the legislative, executive and judicial departments of the Philippines,
the laws of nature, the measure of time, and the geographical divisions. (Emphasis
supplied)

Article XIX, Section 13 of R.A. No. 6734 provides:

SECTION 13. The creation of the Autonomous Region in Muslim Mindanao shall
take effect when approved by a majority of the votes cast by the constituent units
provided in paragraph (2) of Sec. 1 of Article II of this Act in a plebiscite which shall
be held not earlier than ninety (90) days or later than one hundred twenty (120) days
after the approval of this Act: Provided, That only the provinces and cities voting
favorably in such plebiscite shall be included in the Autonomous Region in Muslim
Mindanao. The provinces and cities which in the plebiscite do not vote for inclusion
in the Autonomous Region shall remain in the existing administrative
regions: Provided, however, That the President may, by administrative determination,
merge the existing regions.

Pursuant to the authority granted by the aforequoted provision, then President

Corazon C. Aquino issued on October 12, 1990 E.O. 429, Providing for the
Reorganization of the Administrative Regions in Mindanao. Section 4 thereof provides:

SECTION 4. REGION XII, to be known as CENTRAL MINDANAO, shall include

the following provinces and cities:

Provinces
Sultan Kudarat
Cotabato
South Cotabato

Cities
Cotabato
General Santos

The Municipality of Koronadal (Marinduque) in South Cotabato shall serve as the

regional center.

In Chiongbian v. Orbos, this Court stressed the rule that the power of the President
to reorganize the administrative regions carries with it the power to determine the
regional centers. In identifying the regional centers, the President purposely intended
the effective delivery of the field services of government agencies. [23] The same intention
can be gleaned from the preamble of the assailed DAO-99-14 which the DENR sought
to achieve, that is, to improve the efficiency and effectiveness of the DENR in delivering
its services.
It may be true that the transfer of the offices may not be timely considering that: (1)
there are no buildings yet to house the regional offices in Koronadal, (2) the transfer
falls on the month of Ramadan, (3) the children of the affected employees are already
enrolled in schools in Cotabato City, (4) the Regional Development Council was not
consulted, and (5) the Sangguniang Panglungsond, through a resolution, requested the
DENR Secretary to reconsider the orders. However, these concern issues addressed to
the wisdom of the transfer rather than to its legality. It is basic in our form of government
that the judiciary cannot inquire into the wisdom or expediency of the acts of the
executive or the legislative department,[24] for each department is supreme and
independent of the others, and each is devoid of authority not only to encroach upon the
powers or field of action assigned to any of the other department, but also to inquire into
or pass upon the advisability or wisdom of the acts performed, measures taken or
decisions made by the other departments.[25]
The Supreme Court should not be thought of as having been tasked with the
awesome responsibility of overseeing the entire bureaucracy. Unless there is a clear
showing of constitutional infirmity or grave abuse of discretion amounting to lack or
excess of jurisdiction, the Courts exercise of the judicial power, pervasive and limitless it
may seem to be, still must succumb to the paramount doctrine of separation of
powers.[26] After a careful review of the records of the case, we find that this
jurisprudential element of abuse of discretion has not been shown to exist.
WHEREFORE, in view of the foregoing, the petition for review is GRANTED. The
resolutions of the Court of Appeals in CA-G.R. SP No. 58896 dated May 31, 2000 and
August 20, 2001, as well as the decision dated January 14, 2000 of the Regional Trial
Court of Cotabato City, Branch 15, in Civil Case No 389, are REVERSED and SET
ASIDE. The permanent injunction, which enjoined the petitioner from enforcing the
Memorandum Order of the DENR XII Regional Executive Director, is LIFTED.
SO ORDERED.
Vitug, (Acting Chairman), Carpio, and Azcuna, JJ., concur.
Davide, Jr., C.J., (Chairman), abroad, on official business.

3) MACTAN –CEBU INTERNATIONAL AIRPORT VS HEIRS OF MARCELINA SERO

THIRD DIVISION

[G.R. NO. 174672 : April 16, 2008]

MACTAN-CEBU INTERNATIONAL AIRPORT AUTHORITY (MCIAA), Petitioner, v. HEIRS OF

MARCELINA L. SERO, SUPREMO S. ANCAJAS, MAXIMA S. ANCAJAS-NUÑEZ, HRS. OF JULIAN L.
ANCAJAS, AGRIPINO ANCAJAS, MARIA ORBISO, MIGUELA ANCAJAS, INESIA ANCAJAS, PACENCIA
ANCAJAS, CLAUDIA DOBLE, HEIRS OF ERACLEO S. ANCAJAS, MARCIANO ANCAJAS, LUCIA
ANCAJAS, HEIRS OF ANASTACIO S. ANCAJAS, MARIA A. AMAMANGPANG, JOSE S. ANCAJAS,
AMADO S. ANCAJAS,HEIRS OF PORCESO S. ANCAJAS, CRISOLOGO ANCAJAS,HEIRS OF SILVESTRA
ANCAJAS, ANICETO A. INVENTO, ENRIQUIETA I. GIER, NORMA PACHO, EDGARDO A. INVENTO,
PROCOLO A. INVENTO, ESTRELLA I. MAGLASANG, HEIRS OF GERMOGENA S. ANCAJAS, NENITA
ANCAJAS-OSTIA, PAULA A. AMADEO, NEMESIO A. AMADEO, PASTORA A. RUSTIA, CONCEPCION A.
ORBISO, BALBINA A. AMADEO,ANASTACIA A. AMADEO, RUFINO AMADEO, VALERIANO AMADEO,
HERMOGENIS AMADEO, PEDRO AMADEO, OPING AMADEO,HEIRS OF CRESENCIA AMADEO,
EDITHO A. SERTEMO, HEIRS OF DEMETRIO L. SERO, AURELIA L. SERO, MONICA S. YUBAL, HEIRS
OF SOLEDAD SERO-VILLACSE, PAQUITA S. VILLACSE, CONCEPCION VILLARIN, JOSE S. OSTIA,
HEIRS OF BASILISA S. SERO, HEIRS OF TOMAS S. CUNA, FERNANDO CUNA, HEIRS OF
MARGARITO S. CUNA, LEONARDO CUNA, CONSOLACION CUNA, SALOME CUNA, HEIRS OF
PEREGRINA SERO CUNA, CARMEN CUNA, HEIRS OF ALEJANDRO SERO CUNA, LETICIA CUNA,
HEIRS OF SENANDO SERO CUNA, SONIA CUNA, ANTONIO S. CUNA, COLOMBA SERO CUNA, All
represented by their attorney-in-fact - ANECITO INVENTO, Respondents.

DECISION
 YNARES-SANTIAGO, J.:

This petition assails the May 12, 2006 Decision1 of the Court of Appeals in CA-G.R. CV No. 73159, which
reversed the June 14, 2001 and August 10, 2001 Orders of the Regional Trial Court (RTC) of Cebu City,
Branch 8, in Civil Case No. CEB-24012. Also assailed is the September 12, 2006 Resolution denying the
motion for reconsideration.

The facts of the case are as follows:

On July 6, 1999, respondents, through their attorney-in-fact Anecito Invento, filed a complaint against
several defendants for recovery of ownership and declaration of nullity of several Transfer Certificates of
Title (TCTs), four of which are registered in the names of the petitioner Mactan-Cebu International Airport
Authority (MCIAA) and the Republic. They alleged that the subject properties were owned by their
predecessor Ysabel Limbaga, but the Original Certificates of Title were lost during the Second World War.
Respondents alleged that the mother of therein defendants Ricardo Inocian, Emilia I. Bacalla, Olympia I.
Esteves and Restituta I. Montana pretended to be "Isabel Limbaga" and fraudulently succeeded in
reconstituting the titles over the subject properties to her name and in selling some of them to the other
defendants.2

It will be recalled that the subject properties were acquired by the Civil Aeronautics Administration (CAA)
through expropriation proceedings for the expansion and improvement of the Lahug Airport,3 which was
granted by the Court of First Instance (CFI) of Cebu City, Branch 3, in Civil Case No. R-1881, on December
29, 1961. Subsequently, however, Lahug airport was ordered closed on November 29, 1989,4and all its
functions and operations were transferred to petitioner MCIAA5 after its creation in 1990 pursuant to
Republic Act (R.A.) No. 6958, otherwise known as the Charter of the Mactan-Cebu International Airport
Authority.

In its Answer, petitioner denied the allegations in the complaint and by way of special and affirmative
defenses moved for the dismissal of the complaint. Likewise, defendants Ricardo Inocian, Haide Sun and
spouses Victor Arcinas and Marilyn Dueñas filed their separate motions to dismiss.

On June 14, 2001, the RTC dismissed the complaint on the grounds that the respondents had no cause of
action, and that the action was barred by prescription and laches.6 Respondents filed a motion for
reconsideration which was denied; hence, they filed an appeal with the Court of Appeals which reversed the
Orders of the RTC. The appellate court held that the complaint alleged "ultimate facts" constituting
respondents' cause of action; that the respondents cannot be faulted for not including therein "evidentiary
facts," thus causing confusion or doubt as to the existence of a cause of action; and assuming the complaint
lacked some definitive statements, the proper remedy for the petitioner and other defendants should have
been a motion for bill of particulars, not a motion to dismiss. Further, the determination of whether
respondents have a right to recover the ownership of the subject properties, or whether their action is
barred by prescription or laches requires evidentiary proof which can be threshed out, not in a motion to
dismiss, but in a full-blown trial.7 The dispositive portion of the Decision reads:

WHEREFORE, the assailed orders dated 14 June 2001 and 10 August 2001, both issued by the Regional Trial
Court of Cebu City, Branch 8 in Civil Case No. CEB-24012, are hereby REVERSED and SET ASIDE.
Accordingly, we REMAND the case to the court a quo for further proceedings. We are also directing the RTC
of Cebu City, Branch 8 to REINSTATE the case, and to conduct a TRIAL ON THE MERITS and thereafter
render a decision.

SO ORDERED.8

Petitioner moved for reconsideration, however, it was denied in a Resolution dated September 12,
2006.9Hence, this Petition for Review based on the following grounds:

THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT RESPONDENTS HAVE A CAUSE OF ACTION
AGAINST PETITIONER IN CIVIL CASE NO. CEB-24012.
THE COURT OF APPEALS GRAVELY ERRED IN NOT AFFIRMING THE LOWER COURT'S FINDING THAT
RESPONDENTS ARE GUILTY OF LACHES AND THAT THEIR CAUSE OF ACTION, IF ANY, HAS PRESCRIBED.10

Respondents argue that the properties which were expropriated in connection with the operation of the
Lahug Airport should be reconveyed to the real owners considering that the purpose for which the properties
were expropriated is no longer relevant in view of the closure of the Lahug Airport.11

A cause of action is an act or omission of one party in violation of the legal right of the other. Its elements
are the following: (1) the legal right of plaintiff; (2) the correlative obligation of the defendant, and (3) the
act or omission of the defendant in violation of said legal right.12 The existence of a cause of action is
determined by the allegations in the complaint.13 Thus, in the resolution of a motion to dismiss based on
failure to state a cause of action, only the facts alleged in the complaint must be considered. The test in
cases like these is whether a court can render a valid judgment on the complaint based upon the facts
alleged and pursuant to the prayer therein. Hence, it has been held that a motion to dismiss generally
partakes of the nature of a demurrer which hypothetically admits the truth of the factual allegations made in
a complaint.14

However, while a trial court focuses on the factual allegations in a complaint, it cannot disregard statutes
and decisions material and relevant to the proper appreciation of the questions before it. In resolving a
motion to dismiss, every court must take judicial notice of decisions this Court has rendered as
provided by Section 1 of Rule 129 of the Rules of Court,15 to wit:

SECTION 1. Judicial notice, when mandatory. - A court shall take judicial notice, without the introduction of
evidence, of the existence and territorial extent of states, their political history, forms of government and
symbols of nationality, the law of nations, the admiralty and maritime courts of the world and their seals,
the political constitution and history of the Philippines, the official acts of the legislative, executive and
judicial departments of the Philippines, laws of nature, the measure of time, and the geographical divisions.

In reversing the Orders of the RTC, the Court of Appeals failed to consider the decision of this Court
in Mactan-Cebu International Airport v. Court of Appeals,16 rendered on November 27, 2000, which settled
the issue of whether the properties expropriated under Civil Case No. R-1881 will be reconveyed to the
original owners if the purpose for which it was expropriated is ended or abandoned or if the property was to
be used other than the expansion or improvement of the Lahug airport.

In said case, the Court held that the terms of the judgment in Civil Case No. R-1881 were clear and
unequivocal. It granted title over the expropriated land to the Republic of the Philippines in fee simple
without any condition that it would be returned to the owners or that the owners had a right to repurchase
the same if the purpose for which it was expropriated is ended or abandoned or if the property was to be
used other than as the Lahug airport.17 When land has been acquired for public use in fee simple,
unconditionally, either by the exercise of eminent domain or by purchase, the former owner retains no rights
in the land, and the public use may be abandoned, or the land may be devoted to a different use, without
any impairment of the estate or title acquired, or any reversion to the former owner.18

Had the appellate court considered the import of the ruling in Mactan-Cebu International Airport v. Court of
Appeals, it would have found that respondents can invoke no right against the petitioner since the subject
lands were acquired by the State in fee simple. Thus, the first element of a cause of action, i.e., plaintiff's
legal right, is not present in the instant case.

We are not unaware of the ruling in Heirs of Timoteo Moreno v. Mactan-Cebu International Airport
Authority,19 concerning still another set of owners of lands which were declared expropriated in the
judgment in Civil Case No. R-1881, but were ordered by the Court to be reconveyed to their previous
owners because there was preponderant proof of the existence of the right of repurchase. However, we
qualified our Decision in that case, thus:

We adhere to the principles enunciated in Fery and in Mactan-Cebu International Airport

Authority, and do not overrule them. Nonetheless the weight of their import, particularly our ruling as
regards the properties of respondent Chiongbian in Mactan-Cebu International Airport Authority, must be
commensurate to the facts that were established therein as distinguished from those extant in the case at
bar. Chiongbian put forth inadmissible and inconclusive evidence, while in the instant case we have
preponderant proof as found by the trial court of the existence of the right of repurchase in favor of
petitioners.20 (Emphasis provided)

Thus, the determination of the rights and obligations of landowners whose properties were expropriated but
the public purpose for which eminent domain was exercised no longer subsist, must rest on the character by
which the titles thereof were acquired by the government. If the land is expropriated for a particular purpose
with the condition that it will be returned to its former owner once that purpose is ended or abandoned, then
the property shall be reconveyed to its former owner when the purpose is terminated or abandoned. If, on
the contrary, the decree of expropriation gives to the entity a fee simple title, as in this case, then the land
becomes the absolute property of the expropriator. Non-use of the property for the purpose by which it was
acquired does not have the effect of defeating the title acquired in the expropriation proceedings.21

Even assuming that respondents have a right to the subject properties being the heirs of the alleged real
owner Ysabel Limbaga, they still do not have a cause of action against the petitioner because such right has
been foreclosed by prescription, if not by laches. Respondents failed to take the necessary steps within a
reasonable period to recover the properties from the parties who caused the alleged fraudulent
reconstitution of titles.

Respondents' action in the court below is one for reconveyance based on fraud committed by Isabel Limbaga
in reconstituting the titles to her name. It was filed on July 6, 1999, or 38 years after the trial court in Civil
Case No. R-1881 granted the expropriation, or even longer if we reckon from the time of the fraudulent
reconstitution of titles, which date is not stated in the complaint but presumably before the complaint for
expropriation was filed by CAA on April 16, 1952.22

An action for reconveyance is a legal remedy granted to a landowner whose property has been wrongfully or
erroneously registered in another's name.23 However, such action must be filed within 10 years from the
issuance of the title since the issuance operates as a constructive notice.24 Thus, the cause of action which
respondents may have against the petitioner is definitely barred by prescription.

Rule 9, Section 1 of the Rules of Court provides that when it appears from the pleadings or the evidence on
record that the action is already barred by statute of limitations, the court shall dismiss the claim. Further,
contrary to respondents' claim that a complaint may not be dismissed based on prescription without trial, an
allegation of prescription can effectively be used in a motion to dismiss when the complaint on its face
shows that indeed the action has prescribed25 at the time it was filed.

Thus, in Gicano v. Gegato:26

We have ruled that trial courts have authority and discretion to dismiss an action on the ground of
prescription when the parties' pleadings or other facts on record show it to be indeed time-barred; and it
may do so on the basis of a motion to dismiss, or an answer which sets up such ground as an affirmative
defense; or even if the ground is alleged after judgment on the merits, as in a motion for reconsideration; or
even if the defense has not been asserted at all, as where no statement thereof is found in the pleadings, or
where a defendant has been declared in default. What is essential only, to repeat, is that the facts
demonstrating the lapse of the prescriptive period, be otherwise sufficiently and satisfactorily apparent on
the record: either in the averments of the plaintiffs complaint, or otherwise established by the
evidence.27 (Citations omitted) chan roble svirtuallaw lib rary

In the instant case, although the complaint did not state the date when the alleged fraud in the
reconstitution of titles was perpetuated, it is however clear from the allegations in the complaint that the
properties sought to be recovered were acquired by the petitioner in Civil Case No. R-1881 which was
granted by the trial court on December 29, 1961. Clearly, the filing of the action in 1999 is way beyond the
ten 10 year prescriptive period.

Further, while it is by express provision of law that no title to registered land in derogation of that of the
registered owner shall be acquired by prescription or adverse possession, it is likewise an enshrined rule that
even a registered owner may be barred from recovering possession of property by virtue of laches.28 The
negligence or omission to assert a right within a reasonable time warrants a presumption that the party
entitled to assert it had either abandoned it or declined to assert it also casts doubt on the validity of the
claim of ownership. Such neglect to assert a right taken in conjunction with the lapse of time, more or less
great, and other circumstances causing prejudice to the adverse party, operates as a bar in a court of
equity.29

Respondents' inaction for a period of 38 years to vindicate their alleged rights had converted their claim into
a stale demand. The allegation that petitioner employed threat or intimidation is an afterthought belatedly
raised only in the Court of Appeals. As such it deserves scant attention.

WHEREFORE, in view of the foregoing, the Petition for Review is GRANTED. The May 12, 2006 Decision
and September 12, 2006 Resolution of the Court of Appeals in CA-G.R. CV No. 73159
are REVERSEDand SET ASIDE. The Orders of the Regional Trial Court of Cebu City, Branch 8 dated June
14, 2001 and August 10, 2001 in Civil Case No. CEB-24012, dismissing respondent's complaint for
reconveyance on grounds of lack of cause of action, prescription and laches and denying the motion for
reconsideration, respectively, are REINSTATED and AFFIRMED.

SO ORDERED.

4) SUPLICO VS NEDA GR NO 178830

Case Digest: ROLEX SUPLICO, Petitioner, vs NATIONAL ECONOMIC AND DEVELOPMENT AUTHORITY,
represented by NEDA SECRETARY ROMULO L. NERI, and the NEDA-INV

Case Digest:

On April 18, 2008, the OSG filed respondents’ reply, reiterating

their position that for a court to exercise its power of adjudication,
there must be an actual case or controversy – one which involves a
conflict of legal rights, an assertion of opposite legal claims
susceptible of judicial resolution; the case must not be moot or
academic or based on extra-legal or other similar considerations
not cognizable by a court of justice.

Contrary to petitioners’ contentions that these declarations made

by officials belonging to the executive branch on the Philippine
Government’s decision not to continue with the ZTE-NBN Project
are self-serving, hence, inadmissible, the Court has no alternative
but to take judicial notice of this official act of the President
of the Philippines.

Section 1, Rule 129 of the Rules of Court provides:

SECTION 1. Judicial Notice, when mandatory. – A court shall take

judicial notice, without introduction of evidence, of the existence
and territorial extent of states, their political history, forms
of government and symbols of nationality, the law of nations,
the admiralty and maritime courts of the world and their seals,
the political constitution and history of the Philippines,
the official acts of the legislative, executive and judicial
departments of the Philippines, the laws of nature, the measure
of time, and the geographical divisions.

It is further provided in the above-quoted rule that the court

shall take judicial notice of the foregoing facts without
introduction of evidence. Since we consider the act of
cancellation by President Macapagal-Arroyo of the proposed
ZTE-NBN Project during the meeting of October 2, 2007 with
the Chinese President in China as an official act of the
executive department, the Court must take judicial notice
of such official act without need of evidence.

Judicial power presupposes actual controversies, the

very antithesis of mootness. In the absence of actual
justiciable controversies or disputes, the Court generally
opts to refrain from deciding moot issues. Where there is
no more live subject of controversy, the Court ceases to
have a reason to render any ruling or make any pronouncement.

The rule is well-settled that for a court to exercise

its power of adjudication, there must be an actual case
or controversy – one which involves a conflict of legal
rights, an assertion of opposite legal claims susceptible
of judicial resolution; the case must not be moot or
academic or based on extra-legal or other similar
considerations not cognizable by a court of justice.
Where the issue has become moot and academic, there
is no justiciable controversy, and an adjudication
thereon would be of no practical use or value as
courts do not sit to adjudicate mere academic
questions to satisfy scholarly interest, however
intellectually challenging.

Let it be clarified that the Senate investigation in aid of

legislation cannot be the basis of Our decision which requires
a judicial finding of facts.
RESOLUTION

REYES, R.T., J.:

Under consideration is the Manifestation and Motion[1] dated October 26, 2007 of the Office of
the Solicitor General (OSG) which states:

The Office of the Solicitor General (OSG) respectfully avers that in an Indorsement dated October
24, 2007, the Legal Service of the Department of Transportation and Communications (DOTC) has
informed it of the Philippine Government’s decision not to continue with the ZTE National Broadband
Network Project (see attachment[2]). That said, there is no more justiciable controversy for this
Honorable Court to resolve. WHEREFORE, public respondents respectfully pray that the present
petitions be DISMISSED.

On November 13, 2007, the Court noted the OSG’s manifestation and motion and required
petitioners in G.R. Nos. 178830, 179317, and 179613 to comment.

On December 6, 2007, Rolex Suplico, petitioner in G.R. No. 178830, filed his Consolidated Reply
and Opposition,[3] opposing the aforequoted OSG Manifestation and Motion, arguing that:

66. Aside from the fact that the Notes of the Meeting Between President Gloria Macapagal-
Arroyo and Chinese President Hu Jintao held 2 October 2007 were not attached to the 26 October
2007 Manifestation and Motion – thus depriving petitioners of the opportunity to comment thereon –
a mere verbally requested 1st Indorsement is not sufficient basis for the conclusion that the ZTE-
DOTC NBN deal has been permanently scrapped.

67. Suffice to state, said 1st Indorsement is glaringly self-serving, especially without the
Notes of the Meeting Between President Gloria Macapagal-Arroyo and Chinese President Hu Jintao
to support its allegations or other proof of the supposed decision to cancel the ZTE-DOTC NBN
deal. Public respondents can certainly do better than that.[4]

Petitioner Suplico further argues that:

79. Assuming arguendo that some aspects of the present Petition have been rendered
moot (which is vehemently denied), this Honorable Court, consistent with well-entrenched
jurisprudence, may still take cognizance thereof.[5]

Petitioner Suplico cites this Court’s rulings in Gonzales v. Chavez,[6] Rufino v. Endriga,[7] and
Alunan III v. Mirasol[8] that despite their mootness, the Court nevertheless took cognizance of these
cases and ruled on the merits due to the Court’s symbolic function of educating the bench and the
bar by formulating guiding and controlling principles, precepts, doctrines, and rules.
On January 31, 2008, Amsterdam Holdings, Inc. (AHI) and Nathaniel Sauz, petitioners in G.R. No.
179317, also filed their comment expressing their sentiments, thus:

3. First of all, the present administration has never been known for candor. The present
administration has a very nasty habit of not keeping its word. It says one thing, but does another.

4. This being the case, herein petitioners are unable to bring themselves to feel even a bit
reassured that the government, in the event that the above-captioned cases are dismissed, will not
backtrack, re-transact, or even resurrect the now infamous NBN-ZTE transaction. This is especially
relevant since what was attached to the OSG’s Manifestation and Motion was a mere one (1) page
written communication sent by the Department of Transportation and Communications (DOTC) to
the OSG, allegedly relaying that the Philippine Government has decided not to continue with the
NBN project “x x x due to several reasons and constraints.”

Petitioners AHI and Sauz further contend that because of the transcendental importance of the
issues raised in the petition, which among others, included the President’s use of the power to
borrow, i.e., to enter into foreign loan agreements, this Court should take cognizance of this case
despite its apparent mootness.

On January 15, 2008, the Court required the OSG to file respondents’ reply to petitioners’ comments
on its manifestation and motion.

On April 18, 2008, the OSG filed respondents’ reply, reiterating their position that for a court to
exercise its power of adjudication, there must be an actual case or controversy – one which involves
a conflict of legal rights, an assertion of opposite legal claims susceptible of judicial resolution; the
case must not be moot or academic or based on extra-legal or other similar considerations not
cognizable by a court of justice.[9]

Respondents also insist that there is no perfected contract in this case that would prejudice the
government or public interest. Explaining the nature of the NBN Project as an executive agreement,
respondents stress that it remained in the negotiation stage. The conditions precedent[10] for the
agreement to become effective have not yet been complied with.

Respondents further oppose petitioners’ claim of the right to information, which they contend is not
an absolute right. They contend that the matters raised concern executive policy, a political question
which the judicial branch of government would generally hesitate to pass upon.

On July 2, 2008, the OSG filed a Supplemental Manifestation and Motion. Appended to it is the
Highlights from the Notes of Meeting between President Gloria Macapagal-Arroyo and Chinese
President Hu Jintao, held in XI Jiao Guesthouse, Shanghai, China, on October 2, 2007. In the Notes
of Meeting, the Philippine Government conveyed its decision not to continue with the ZTE National
Broadband Network Project due to several constraints. The same Notes likewise contained
President Hu Jintao’s expression of understanding of the Philippine Government decision.

We resolve to grant the motion.

Firstly, the Court notes the triple petitions to be for certiorari, prohibition and mandamus, with
application for the issuance of a Temporary Restraining Order (TRO) and/or Preliminary
Injunction. The individual prayers in each of the three (3) consolidated petitions are:

G.R. No. 178830

WHEREFORE, it is respectfully prayed of this Honorable Court:

1. Upon the filing of this Petition, pursuant to the second paragraph of Rule 58, Section 5 of the
Rules of Court, issue forthwith an ex parte temporary restraining order enjoining respondents, their
subordinates, agents, representatives and any and all persons acting on their behalf from pursuing,
entering into indebtedness, disbursing funds, and implementing the ZTE-DOTC Broadband Deal;

2. Compel respondents, upon Writ of Mandamus, to forthwith produce and furnish petitioner or his
undersigned counsel a certified true copy of the contract or agreement covering the NBN project as
agreed upon with ZTE Corporation;

3. Schedule Oral Arguments in the present case pursuant to Rule 49 in relation to Section 2, Rule
56 of the revised Rules of Court; and,

4. Annul and set aside the award of the ZTE-DOTC Broadband Deal, and compel public
respondents to forthwith comply with pertinent provisions of law regarding procurement of
government ICT contracts and public bidding for the NBN contract.[11] mphasis supplied)

G.R. No. 179317

WHEREFORE, petitioners Amsterdam Holdings, Inc., and Nathaniel Sauz respectfully pray as
follows:

A. upon the filing of this Petition for Mandamus and conditioned upon the posting of a
bond in such amount as the Honorable Court may fix, a temporary restraining order and/or writ of
preliminary injunction be issued directing the Department of Transportation and Communication, the
Commission on Information and Communications Technology, all other government agencies and
instrumentalities, their officers, employees, and/or other persons acting for and on their behalf to
desist during the pendency of the instant Petition for Mandamus from entering into any other
agreements and from commencing with any kind, sort, or specie of activity in connection with the
National Broadband Network Project;

B. the instant Petition for Mandamus be given due course; and,

C. after due consideration of all relevant issues, judgment be rendered directing

respondents to allow herein petitioners access to all agreements entered into with the Government
of China, the ZTE Corporation, and/or other entities, government instrumentalities, and/or individuals
with regard to the National Broadband Network Project.[12] mphasis supplied)

G.R. No. 179613

WHEREFORE, it is respectfully prayed of this Honorable Court to:

1. Compel respondents, upon Writ of Mandamus, to forthwith produce and furnish petitioner or his
undersigned counsel a certified true copy of the contract or agreement covering the NBN project as
agreed upon with ZTE Corporation;

2. Schedule Oral Arguments in the present case pursuant to Rule 49 in relation to Section 2, Rule
56 of the Revised Rules of Court;

3. Annul and set aside the award of the contract for the national broadband network to respondent
ZTE Corporation, upon the ground that said contract, as well as the procedures resorted to
preparatory to the execution thereof, is contrary to the Constitution, to law and to public policy;

4. Compel public respondent to forthwith comply with pertinent provisions of law regarding
procurement of government infrastructure projects, including public bidding for said contract to
undertake the construction of the national broadband network.[13] mphasis supplied)

On September 11, 2007, the Court issued a TRO[14] in G.R. No. 178830, enjoining the parties from
“pursuing, entering into indebtedness, disbursing funds, and implementing the ZTE-DOTC
Broadband Deal and Project” as prayed for. Pertinent parts of the said Order read:

WHEREAS, the Supreme Court, on 11 September 2007, adopted a resolution in the above-
entitled case, to wit:

“G.R. No. 178830 (Rolex Suplico vs. National Economic and Development Authority,
represented by NEDA Secretary Romulo L. Neri, and the NEDA Investment Coordination
Committee, Department of Transportation and Communications (DOTC), represented by DOTC
Secretary Leandro Mendoza, including the Commission on Information and Communications
Technology, headed by its Chairman, Ramon P. Sales, The Telecommunications Office, Bids and
Awards for Information and Communications Technology Committee (ICT), headed by DOTC
Assistant Secretary Elmer A. Soneja as Chairman, and The Technical Working Group for ICT, and
DOTC Assistant Secretary Lorenzo Formoso, and All Other Operating Units of the DOTC for
Information and Communications Technology, and ZTE Corporation, Amsterdam Holdings, Inc., and
ARESCOM, Inc.—Acting on the instant petition with prayer for temporary restraining order and/or
writ of preliminary injunction, the Court Resolved, without giving due course to the petition, to

xxxx

(d) Issue a TEMPORARY RESTRAINING ORDER, effective immediately and continuing

until further orders from this Court, enjoining the (i) National Economic and Development
Authority, (ii) NEDA-Investment Coordination Committee, (iii) Department of Transportation and
Communications, Commission on Information and Communications Technology, (iv)
Telecommunications Office, Bids and Awards for Information and Communications Technology
Committee (ICT), (v) Technical Working Group for ICT, and all other Operating Units of the DOTC
for Information and Communications Technology, (vi) ZTE Corporation; (vii) Amsterdam Holdings,
Inc., and (viii) ARESCOM, Inc., and any and all persons acting on their behalf from ‘pursuing,
entering into indebtedness, disbursing funds, and implementing the ZTE-DOTC Broadband Deal and
Project’ as prayed for.”

NOW THEREFORE, effective immediately and continuing until further orders from this Court,
You, Respondents (i) National Economic and Development Authority, (ii) NEDA-Investment
Coordination Committee, (iii) Department of Transportation and Communications, Commission on
Information and Communications Technology, (iv) Telecommunications Office, Bids and
Awards for Information and Communications Technology Committee (ICT), (v) Technical Working
Group for ICT, and all other Operating Units of the DOTC for Information and Communications
Technology, (vi) ZTE Corporation; (vii) Amsterdam Holdings, Inc., and (viii) ARESCOM, Inc., and
any and all persons acting on their behalf are hereby ENJOINED from “pursuing, entering into
indebtedness, disbursing funds, and implementing the ZTE-DOTC Broadband Deal and Project” as
prayed for.[15] ( mphasis supplied.)

Petitioners in G.R. Nos. 178830 and 179613 pray that they be furnished certified true copies
of the “contract or agreement covering the NBN project as agreed upon with ZTE Corporation.” It
appears that during one of the Senate hearings on the NBN project, copies of the supply contract[16]
were readily made available to petitioners.[17] Evidently, the said prayer has been complied with
and is, thus, mooted.

When President Gloria Macapagal-Arroyo, acting in her official capacity during the meeting
held on October 2, 2007 in China, informed China’s President Hu Jintao that the Philippine
Government had decided not to continue with the ZTE-National Broadband Network (ZTE-NBN)
Project due to several reasons and constraints, there is no doubt that all the other principal prayers
in the three petitions (to annul, set aside, and enjoin the implementation of the ZTE-NBN Project)
had also become moot.
 Contrary to petitioners’ contentions that these declarations made by officials belonging to the
executive branch on the Philippine Government’s decision not to continue with the ZTE-NBN Project
are self-serving, hence, inadmissible, the Court has no alternative but to take judicial notice of this
official act of the President of the Philippines.

Section 1, Rule 129 of the Rules of Court provides:

SECTION 1. Judicial Notice, when mandatory. – A court shall take judicial notice, without
introduction of evidence, of the existence and territorial extent of states, their political history, forms
of government and symbols of nationality, the law of nations, the admiralty and maritime courts of
the world and their seals, the political constitution and history of the Philippines, the official acts of
the legislative, executive and judicial departments of the Philippines, the laws of nature, the measure
of time, and the geographical divisions. mphasis supplied)

Under the rules, it is mandatory and the Court has no alternative but to take judicial notice of the
official acts of the President of the Philippines, who heads the executive branch of our
government. It is further provided in the above-quoted rule that the court shall take judicial notice of
the foregoing facts without introduction of evidence. Since we consider the act of cancellation by
President Macapagal-Arroyo of the proposed ZTE-NBN Project during the meeting of October 2,
2007 with the Chinese President in China as an official act of the executive department, the Court
must take judicial notice of such official act without need of evidence.

In David v. Macapagal-Arroyo,[18] We took judicial notice of the announcement by the Office of the
President banning all rallies and canceling all permits for public assemblies following the issuance of
Presidential Proclamation No. 1017 and General Order No. 5.

In Estrada v. Desierto,[19] the Court also resorted to judicial notice in resolving the factual ingredient
of the petition.

Moreover, under Section 2, paragraph (m) of Rule 131 of the Rules of Court, the official duty of the
executive officials[20] of informing this Court of the government’s decision not to continue with the
ZTE-NBN Project is also presumed to have been regularly performed, absent proof to the
contrary. Other than petitioner AHI’s unsavory insinuation in its comment, the Court finds no factual
or legal basis to disregard this disputable presumption in the present instance.

Concomitant to its fundamental task as the ultimate citadel of justice and legitimacy is the judiciary’s
role of strengthening political stability indispensable to progress and national
development. Pontificating on issues which no longer legitimately constitute an actual case or
controversy will do more harm than good to the nation as a whole. Wise exercise of judicial
discretion militates against resolving the academic issues, as petitioners want this Court to do. This
is especially true where, as will be further discussed, the legal issues raised cannot be resolved
without previously establishing the factual basis or antecedents.
 Judicial power presupposes actual controversies, the very antithesis of mootness. In the
absence of actual justiciable controversies or disputes, the Court generally opts to refrain from
deciding moot issues. Where there is no more live subject of controversy, the Court ceases to have
a reason to render any ruling or make any pronouncement.

Kapag wala nang buhay na kaso, wala nang dahilan para magdesisyon ang Husgado.

In Republic Telecommunications Holdings, Inc. v. Santiago,[21] the lone issue tackled by the Court
of Appeals (CA) was whether the Securities Investigation and Clearing Department (SICD) and
Securities and Exchange Commission (SEC) en banc committed reversible error in issuing and
upholding, respectively, the writ of preliminary injunction. The writ enjoined the execution of the
questioned agreements between Qualcomm, Inc. and Republic Telecommunications Holdings, Inc.
(RETELCOM). The implementation of the agreements was restrained through the assailed orders of
the SICD and the SEC en banc which, however, were nullified by the CA decision. Thus,
RETELCOM elevated the matter to this Court praying for the reinstatement of the writ of preliminary
injunction of the SICD and the SEC en banc. However, before the matter was finally resolved,
Qualcomm, Inc. withdrew from the negotiating table. Its withdrawal had thwarted the execution and
enforcement of the contracts. Thus, the resolution of whether the implementation of said
agreements should be enjoined became no longer necessary.

Equally applicable to the present case is the Court ruling in the above-cited Republic
Telecommunications. There We held, thus:

Indeed, the instant petition, insofar as it assails the Court of Appeals’ Decision nullifying the orders of
the SEC en banc and the SICD, has been rendered moot and academic. To rule, one way or the
other, on the correctness of the questioned orders of the SEC en banc and the SICD will be
indulging in a theoretical exercise that has no practical worth in view of the supervening event.

The rule is well-settled that for a court to exercise its power of adjudication, there must be an actual
case or controversy – one which involves a conflict of legal rights, an assertion of opposite legal
claims susceptible of judicial resolution; the case must not be moot or academic or based on extra-
legal or other similar considerations not cognizable by a court of justice. Where the issue has
become moot and academic, there is no justiciable controversy, and an adjudication thereon would
be of no practical use or value as courts do not sit to adjudicate mere academic questions to satisfy
scholarly interest, however intellectually challenging.

In the ultimate analysis, petitioners are seeking the reinstatement of the writ of injunction to prevent
the concerned parties from pushing through with transactions with Qualcomm, Inc. Given that
Qualcomm, Inc. is no longer interested in pursuing the contracts, there is no actual substantial relief
to which petitioners would be entitled and which would be negated by the dismissal of the petition.
The Court likewise finds it unnecessary to rule whether the assailed Court of Appeals’ Decision had
the effect of overruling the Court’s Resolution dated 29 January 1999, which set aside the TRO
issued by the appellate court.

A ruling on the matter practically partakes of a mere advisory opinion, which falls beyond the realm
of judicial review. The exercise of the power of judicial review is limited to actual cases and
controversies. Courts have no authority to pass upon issues through advisory opinions or to resolve
hypothetical or feigned problems.

While there were occasions when the Court passed upon issues although supervening events had
rendered those petitions moot and academic, the instant case does not fall under the exceptional
cases. In those cases, the Court was persuaded to resolve moot and academic issues to formulate
guiding and controlling constitutional principles, precepts, doctrines or rules for future guidance of
both bench and bar.

In the case at bar, the resolution of whether a writ of preliminary injunction may be issued to prevent
the implementation of the assailed contracts calls for an appraisal of factual considerations which
are peculiar only to the transactions and parties involved in this controversy. Except for the
determination of whether petitioners are entitled to a writ of preliminary injunction which is now moot,
the issues raised in this petition do not call for a clarification of any constitutional principle or the
interpretation of any statutory provision.[22]

Secondly, even assuming that the Court will choose to disregard the foregoing considerations and
brush aside mootness, the Court cannot completely rule on the merits of the case because the
resolution of the three petitions involves settling factual issues which definitely requires reception of
evidence. There is not an iota of doubt that this may not be done by this Court in the first instance
because, as has been stated often enough, this Court is not a trier of facts.

Ang pagpapasiya sa tatlong petisyon ay nangangailangan ng paglilitis na hindi gawain ng

Hukumang ito.

Respondent ZTE, in its Comment in G.R. No. 178830,[23] correctly pointed out that since
petitioner Suplico filed his petition directly with this Court, without prior factual findings made by any
lower court, a determination of pertinent and relevant facts is needed. ZTE enumerated some of
these factual issues, to wit:

(1) Whether an executive agreement has been reached between the Philippine and
Chinese governments over the NBN Project;

(2) Whether the ZTE Supply Contract was entered into by the Republic of the Philippines,
through the DOTC, and ZTE International pursuant to, and as an integral part of, the executive
agreement;
(3) Whether a loan agreement for the NBN Project has actually been executed;

(4) Whether the Philippine government required that the NBN Project be completed under a
Build-Operate-and-Transfer Scheme;

(5) Whether the AHI proposal complied with the requirements for an unsolicited proposal
under the BOT Law;

(6) Whether the Philippine government has actually earmarked public finds for
disbursement under the ZTE Supply Contract; and

(7) Whether the coverage of the NBN Project to be supplied under the ZTE Supply Contract
is more extensive than that under the AHI proposal or such other proposal submitted therefor.[24]

Definitely, some very specific reliefs prayed for in both G.R. Nos. 178830 and 179613 require prior
determination of facts before pertinent legal issues could be resolved and specific reliefs granted.

In G.R. No. 178830, petitioner seeks to annul and set aside the award of the ZTE-DOTC Broadband
Deal and compel public respondents to forthwith comply with pertinent provisions of law regarding
procurement of government ICT contracts and public bidding for the NBN contract.

In G.R. No. 179613, petitioners also pray that the Court annul and set aside the award of the
contract for the national broadband network to respondent ZTE Corporation, upon the ground that
said contract, as well as the procedures resorted to preparatory to the execution thereof, is contrary
to the Constitution, to law and to public policy. They also ask the Court to compel public respondent
to forthwith comply with pertinent provisions of law regarding procurement of government
infrastructure projects, including public bidding for said contract to undertake the construction of the
national broadband network.

It is simply impossible for this Court “to annul and set aside the award of the ZTE-DOTC
Broadband Deal” without any evidence to support a prior factual finding pointing to any violation of
law that could lead to such annulment order. For sure, the Supreme Court is not the proper venue
for this factual matter to be threshed out.

Thirdly, petitioner Suplico in G.R. No. 178830 prayed that this Court order “public respondents
to forthwith comply with pertinent provisions of law regarding procurement of government ICT
contracts and public bidding for the NBN contract.”[25] It would be too presumptuous on the part of
the Court to summarily compel public respondents to comply with pertinent provisions of law
regarding procurement of government infrastructure projects without any factual basis or prior
determination of very particular violations committed by specific government officials of the executive
branch. For the Court to do so would amount to a breach of the norms of comity among co-equal
branches of government. A perceived error cannot be corrected by committing another
error. Without proper evidence, the Court cannot just presume that the executive did not comply
with procurement laws. Should the Court allow itself to fall into this trap, it would plainly commit
grave error itself.

Magiging kapangahasan sa Hukumang ito na pilitin ang mga pinipetisyon na tumalima sa

batas sa pangongontrata ng pamahalaan kung wala pang pagtitiyak o angkop na ebidensiya ng
nagawang paglabag dito.

Let it be clarified that the Senate investigation in aid of legislation cannot be the basis of Our
decision which requires a judicial finding of facts.

Justice Antonio T. Carpio takes the view that the National Broadband Network Project should
be declared null and void. The foregoing threefold reasons would suffice to address the concern of
Our esteemed colleague.

The Court is, therefore, constrained to dismiss the petitions and deny them due course because of
mootness and because their resolution requires reception of evidence which cannot be done in an
original petition brought before the Supreme Court.

WHEREFORE, the petitions are DISMISSED. The Temporary Restraining Order issued on
September 11, 2007 is DISSOLVED.

SO ORDERED.

RUBEN T. REYES
Associate Justice

WE CONCUR:

REYNATO S. PUNO
Chief Justice

LEONARDO A. QUISUMBING
Associate Justice

CONSUELO YNARES-SANTIAGO
Associate Justice
ANTONIO T. CARPIO
Associate Justice

MA. ALICIA AUSTRIA-MARTINEZ

Associate Justice

RENATO C. CORONA
Associate Justice

CONCHITA CARPIO MORALES

Associate Justice

ADOLFO S. AZCUNA
Associate Justice

DANTE O. TINGA
Associate Justice

(On official leave)

MINITA V. CHICO-NAZARIO*
Associate Justice

PRESBITERO J. VELASCO, JR.

Associate Justice

ANTONIO EDUARDO B. NACHURA

Associate Justice

TERESITA J. LEONARDO-DE CASTRO

Associate Justice

ARTURO D. BRION
Associate Justice

CERTIFICATION

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

REYNATO S. PUNO
Chief Justice

* On official leave per Special Order No. 508 dated June 25, 2008.

[1] Rollo (G.R. No. 178830), p. 1093.

[2] 1st Indorsement dated October 24, 2007 from the DOTC signed by Atty. Raquel Desiderio,
Director III, Legal Service states:

Respectfully indorsed to SOLICITOR GENERAL AGNES VST DEVANADERA (Attention:

ASSISTANT SOLICITOR GENERAL AMPARO M. CABOTAJE-TANG), herein copy of the Highlights
From the Notes of the Meeting Between President Gloria Macapagal-Arroyo and Chinese President
Hu Jintao which was held in Xi Jiao Guesthouse, Shanghai, The People’s Republic of China on 02
October 2007 as transmitted from the Office of the President as provided by the Department of
Foreign Affairs (DFA).

As per verbal request from your honorable office we are furnishing you a copy of the record of the
said meeting which states in sum the Philippine Government’s decision not to continue with the ZTE
National Broadband Network Project due to several reasons and constraints. It is the understanding
of the DOTC that this document will form part of the evidence that will be submitted to the Honorable
Supreme Court in connection with the cases filed against the DOTC in relation to the NBN Project.

Kindly refer to the attached document and respectfully request appropriate action on the
same. Thank you very much for your continued support and assistance to the Department of
Transportation and Communications.

[3] Rollo (G.R. No. 178830), p. 1124.

[4] Id. at 1157.

[5] Id. at 1160.

[6] G.R. No. 97351, February 4, 1992, 205 SCRA 816.

[7] G.R. No. 139554, July 21, 2006, 496 SCRA 13.

[8] G.R. No. 108399, July 31, 1997, 276 SCRA 501.

[9] Citing Republic v. Tan, G.R. No. 145255, March 30, 2004, 426 SCRA 485, 492-493.

[10] (a) Issuance of a Forward Obligation Authority (FOA) by the Department of Budget and
Management (DBM) of the Government of the Republic of the Philippines;

(b) Conclusion of the Loan Agreement between the Export-Import Bank of China and the
Department of Finance (DOF) of the Government of the Republic of the Philippines;

(c) Legal Opinion on the procurement process by the Department of Justice of the Government of
the Republic of the Philippines;

(d) The ratification by the Government of the Republic of the Philippines and the People’s
Republic of China of the Executive Agreement evidenced by the letter dated 02 December 2006 of
Chinese Ambassador Li Jinjun to Presidential Chief of Staff Michael T. Defensor relating to the NBN
project and the letter of the NEDA Secretary dated 20 April 2007 addressed to Honorable Minister
Bo Xilai, Ministry of Commerce and Honorable Li Rougu, Chairman and President of the Export-
Import Bank of China, People’s Republic of China nominating the NBN Project.

[11] Rollo (G.R. No. 178830), pp. 127-128.

[12] Rollo (G.R. No. 179317), pp. 35-36.

[13] Rollo (G.R. No. 179613), pp. 77-78.

[14] Rollo (G.R. No. 178830), p. 232.

[15] Id. at 233-235.

[16] Also attached to public respondents’ Comment in G.R. No. 178830 as Annex “LL.” Id. at 537.

[17] Id. at 589-590; Annex “OO.” Letter of Sec. Leandro Mendoza, DOTC, to Sen. Allan Peter
Cayetano dated September 25, 2007. In response to a request of the Senate Blue Ribbon
Committee to be furnished with the copy of the supply contract, DOTC Secretary Mendoza informed
Sen. Allan Peter Cayetano that the pertinent documents were transmitted as publicly requested, and
the same were distributed to guests who requested a copy.

[18] G.R. No. 171396, May 3, 2006, 489 SCRA 160.

[19] G.R. No. 146710, March 2, 2001, 353 SCRA 452.

[20] The Highlights from the notes of the meeting between President Gloria Macapagal-Arroyo and
Chinese President Hu Jintao which was held in the Xi Jiao Guesthouse, Shanghai, China on
October 2, 2007 was transmitted by the Office of the President through the Department of Foreign
Affairs (DFA) to the Department of Transportation and Communications (DOTC), which in turn
transmitted the communication through 1st Indorsement dated October 24, 2007 (Rollo [G.R. No.
178830], p. 1097) to the Office of the Solicitor General, which in informed this Court, through its
Manifestation and Motion dated October 26, 2007 (Id. at 1093).

[21] G.R. No. 140338, August 7, 2007, 529 SCRA 232.

[22] Republic Telecommunications Holdings, Inc. v. Santiago, id. at 242-244.

[23] Rollo (G.R. No. 178830), p. 676.

[24] Id. at 720-721.

[25] Id. at 127-128.

DISSENTING OPINION

CARPIO, J.:

I dissent on the ground that the ZTE Supply Contract is void from the beginning for being
contrary to the Constitution, the Administrative Code of 1987, the Government Auditing Code of the
Philippines, and the Government Procurement Reform Act. As such, the ZTE Supply Contract is
legally non-existent. The Philippine Government’s decision “not to continue with the ZTE National
Broadband Network Project”[1] during the pendency of this case, even if deemed a cancellation of
the ZTE Supply Contract, had no legal effect on the status of the contract, and did not moot this
petition.

This case is of transcendental importance to the nation since it involves the constitutionality of a
US$329.48 million (approximately P14.82 billion) government procurement contract awarded and
signed without an appropriation from Congress and without public bidding. This case puts to the test
the efficacy of constitutional and statutory proscriptions designed precisely to prevent such
contracts. The Court has a duty to resolve the important issues in this case, including the novel
question on the status of executive agreements that conflict with national law, to prevent a
recurrence of government contracts that violate the Constitution and existing statutes.

Not only are the legal issues in this case “capable of repetition yet evading review.”[2] The ZTE
Supply Contract itself is capable of being resurrected. Public respondents merely stated that the
Philippine Government would “not continue with the ZTE National Broadband Network Project,”
citing as basis the 1st Indorsement dated 24 October 2007 from the DOTC. Public respondents did
not manifest that the ZTE Supply Contract had been mutually cancelled by the parties to the
contract.

Equally important, private respondent ZTE Corporation has not manifested to this Court its consent
to the discontinuance or cancellation of the ZTE Supply Contract. Indeed, private respondent ZTE
Corporation has not wavered from its position that “the ZTE Supply Contract is entirely legal and
proper.”[3] It is axiomatic that one party to a bilateral contract cannot unilaterally declare a contract
discontinued or cancelled. Clearly, this case is far from being moot.

Petitioner assails the ZTE Supply Contract as void from the beginning on two grounds. First, the
contract has no appropriation from Congress, violating Section 29(2), Article VI of the Constitution.
Second, the absence of public bidding violates the Government Procurement Reform Act.

In their Comment, public respondents attached the ZTE Supply Contract dated 21 April 2007, the
Memorandum of Understanding on the Establishment of Philippines-China Economic Partnership
dated 5 June 2006, and the letters between Philippine and Chinese officials relating to the National
Broadband Network Project. These attachments mooted petitioner’s prayer for copies of these
documents, leaving as sole issue of this petition the legal status of the ZTE Supply Contract.

This Petition for the Issuance of a Temporary Restraining Order and Writs of Prohibition and/or
Permanent Injunction, and Mandamus seeks, among others, to annul the ZTE Supply Contract and
to prohibit public respondents from disbursing public funds to implement the contract. The
Constitution and existing statutes prohibit public officers from disbursing public funds without the
corresponding appropriation from Congress. Existing statutes also prohibit public officials from
entering into procurement contracts without a certificate of appropriation and fund availability from
the proper accounting and auditing officials. It is the ministerial duty of public officials to not only
desist from disbursing public funds without the corresponding appropriation from Congress, but also
to refrain from signing and implementing procurement contracts without the requisite certificate of
appropriation and fund availability. Indisputably, a petition for prohibition is a proper action to test
the legality of such disbursement of public funds and the legality of the execution of such
procurement contracts.[4]

From the admissions of respondents in their Consolidated Comment, the following facts are
undisputed:

1. The ZTE Supply Contract, a procurement of goods and services for the Philippine Government,
was signed on 21 April 2007 by DOTC Secretary Leandro R. Mendoza and ZTE Corporation Vice
President Yu Yong;[5]

2. There was no public bidding in the award of the contract to ZTE Corporation, and the Chinese
Government handpicked ZTE Corporation to supply the goods and services to the Philippine
Government;[6]

3. The ZTE Supply Contract is to be financed by a loan from the Export-Import Bank of China to
the Philippine Government;[7]

4. The Loan Agreement to finance the ZTE Supply Contract was not concluded before or after the
signing of the ZTE Supply Contract;[8]

5. There is no appropriation law enacted by Congress to fund the ZTE Supply Contract;[9]

6. A certificate of appropriation and fund availability is not attached to the ZTE Supply
Contract;[10] and

7. ZTE Corporation is publicly listed in the Hong Kong and Shenzhen stock exchanges.[11]

In addition, the 2006 and 2007 General Appropriations Acts[12] do not contain any appropriation for
a foreign-assisted National Broadband Network Project, under which the ZTE Supply Contract would
fall.

This case raises the following issues:

1. Whether the ZTE Supply Contract is void from the beginning in the absence of an appropriation
by law to fund the contract, and in the absence of a certificate of appropriation and fund availability;
and

2. Whether the ZTE Supply Contract is void from the beginning in the absence of a public bidding.
The simple answer to each question is yes, the ZTE Supply Contract is void from the
beginning. The absence of any of the three - an appropriation law, a certificate of appropriation
and fund availability, and public bidding - renders the ZTE Supply Contract void from the
beginning.

Absence of an Appropriation Law

The Constitution requires an appropriation law before public funds are spent for any
purpose. Section 29(2), Article VI of the Constitution provides:

No money shall be paid out of the Treasury except in pursuance of an appropriation made by
law.[13]

The power of the purse – or the power of Congress to authorize payment from funds in the National
Treasury – is lodged exclusively in Congress. One of the fundamental checks and balances finely
crafted in the Constitution is that Congress authorizes the amount to be spent, while the Executive
spends the amount so authorized. The Executive cannot authorize its own spending, and neither
can Congress spend what it has authorized. The rationale of this basic check and balance is to
prevent abuse of discretion in the expenditure of public funds.

Thus, the Executive branch cannot spend a single centavo of government receipts, whether from
taxes, sales, donations, dividends, profits, loans, or from any other source, unless there is an
appropriation law authorizing the expenditure. Any government expenditure without the
corresponding appropriation from Congress is unconstitutional. There is no exception to this
constitutional prohibition that “no money shall be paid out of the Treasury except in pursuance of an
appropriation made by law.” This constitutional prohibition is self-executory.

To further insure compliance with Section 29(2), Article VI of the Constitution, the Administrative
Code of 1987 expressly prohibits the entering into contracts involving the expenditure of public funds
unless two prior requirements are satisfied. First, there must be an appropriation law authorizing the
expenditure required in the contract. Second, there must be attached to the contract a certification
by the proper accounting official and auditor that funds have been appropriated by law and such
funds are available. Failure to comply with any of these two requirements renders the contract void.

Thus, Sections 46, 47 and 48, Chapter 8, Subtitle B, Title I, Book V of the Administrative Code of
1987 provide:

SECTION 46. Appropriation Before Entering into Contract. — (1) No contract involving the
expenditure of public funds shall be entered into unless there is an appropriation therefor, the
unexpended balance of which, free of other obligations, is sufficient to cover the proposed
expenditure; and
(2) Notwithstanding this provision, contracts for the procurement of supplies and materials to be
carried in stock may be entered into under regulations of the Commission provided that when
issued, the supplies and materials shall be charged to the proper appropriations account.

SECTION 47. Certificate Showing Appropriation to Meet Contract. — Except in the case of a
contract for personal service, for supplies for current consumption or to be carried in stock not
exceeding the estimated consumption for three (3) months, or banking transactions of government-
owned or controlled banks, no contract involving the expenditure of public funds by any government
agency shall be entered into or authorized unless the proper accounting official of the agency
concerned shall have certified to the officer entering into the obligation that funds have been duly
appropriated for the purpose and that the amount necessary to cover the proposed contract for the
current calendar year is available for expenditure on account thereof, subject to verification by the
auditor concerned. The certificate signed by the proper accounting official and the auditor who
verified it, shall be attached to and become an integral part of the proposed contract, and the sum so
certified shall not thereafter be available for expenditure for any other purpose until the obligation of
the government agency concerned under the contract is fully extinguished.

SECTION 48. Void Contract and Liability of Officer. — Any contract entered into contrary to the
requirements of the two (2) immediately preceding sections shall be void, and the officer or officers
entering into the contract shall be liable to the Government or other contracting party for any
consequent damage to the same extent as if the transaction had been wholly between private
parties. Emphasis supplied)

Sections 85, 86 and 87 of the Government Auditing Code of the Philippines,[14] an earlier law,
contain the same provisions.

The Administrative Code of 1987 and the Government Auditing Code expressly mandate that “[N]o
contract involving the expenditure of public funds shall be entered into unless there is an
appropriation therefor.” The law prohibits the mere entering into a contract without the
corresponding appropriation from Congress. It does not matter whether the contract is subject to a
condition as to its effectivity, such as a subsequent favorable legal opinion by the Department of
Justice,[15] because even a contract with such condition is still a contract under the law.[16]

Moreover, the Administrative Code of 1987 and the Government Auditing Code expressly mandate
that “[N]o contract involving the expenditure of public funds x x x shall be entered into or authorized
unless the proper accounting official x x x shall have certified to the officer entering into the
obligation that funds have been duly appropriated for the purpose and that the amount necessary to
cover the proposed contract for the current fiscal year is available for expenditure.” The law
prohibits not only the entering into the contract, but also authorizing the entering into the contract
without the certification from the proper accounting official. This means that the certificate of
appropriation and fund availability must be issued before the signing of the contract.

In addition, the Administrative Code of 1987 and the Government Auditing Code expressly require
that the “certificate signed by the proper accounting official and the auditor who verified it, shall be
attached to and become an integral part of the proposed contract.” The certificate of appropriation
and fund availability must be attached to the “proposed contract,” again clearly showing that the
certificate must be issued before the signing of the contract.

In several cases, the Court had the occasion to apply these provisions of the Administrative Code of
1987 and the Government Auditing Code of the Philippines. In these cases, the Court clearly ruled
that the two requirements – the existence of appropriation and the attachment of the certification –
are “conditions sine qua non for the execution of government contracts.” In COMELEC v. Quijano-
Padilla,[17] the Court ruled:

It is quite evident from the tenor of the language of the law that the existence of appropriations and
the availability of funds are indispensable pre-requisites to or conditions sine qua non for the
execution of government contracts. The obvious intent is to impose such conditions as a priori
requisites to the validity of the proposed contract. Using this as our premise, we cannot accede to
PHOTOKINA's contention that there is already a perfected contract. x x x

xxx

Petitioners are justified in refusing to formalize the contract with PHOTOKINA. Prudence dictated
them not to enter into a contract not backed up by sufficient appropriation and available funds.
Definitely, to act otherwise would be a futile exercise for the contract would inevitably suffer the vice
of nullity. In Osmeña vs. Commission on Audit, this Court held:

The Auditing Code of the Philippines (P.D. 1445) further provides that no contract involving the
expenditure of public funds shall be entered into unless there is an appropriation therefor and the
proper accounting official of the agency concerned shall have certified to the officer entering into the
obligation that funds have been duly appropriated for the purpose and the amount necessary to
cover the proposed contract for the current fiscal year is available for expenditure on account
thereof. Any contract entered into contrary to the foregoing requirements shall be VOID.

Clearly then, the contract entered into by the former Mayor Duterte was void from the very beginning
since the agreed cost for the project (P8,368,920.00) was way beyond the appropriated amount
(P5,419,180.00) as certified by the City Treasurer. Hence, the contract was properly declared void
and unenforceable in COA's 2nd Indorsement, dated September 4, 1986. The COA declared and we
agree, that:

The prohibition contained in Sec. 85 of PD 1445 (Government Auditing Code) is explicit and
mandatory. Fund availability is, as it has always been, an indispensable prerequisite to the execution
of any government contract involving the expenditure of public funds by all government agencies at
all levels. Such contracts are not to be considered as final or binding unless such a certification as to
fund availability is issued (Letter of Instruction No. 767, s. 1978). Antecedent of advance
appropriation is thus essential to government liability on contracts (Zobel vs. City of Manila, 47 Phil.
169). This contract being violative of the legal requirements aforequoted, the same contravenes Sec.
85 of PD 1445 and is null and void by virtue of Sec. 87.
Verily, the contract, as expressly declared by law, is inexistent and void ab initio. This is to say that
the proposed contract is without force and effect from the very beginning or from its incipiency, as if
it had never been entered into, and hence, cannot be validated either by lapse of time or
ratification. Emphasis supplied)

The law expressly declares void a procurement contract that fails to comply with the two
requirements, namely, an appropriation law funding the contract and a certification of appropriation
and fund availability. The clear purpose of these requirements is to insure that government
contracts are never signed unless supported by the corresponding appropriation law and fund
availability.[18] The ZTE Supply Contract does not comply with any of these two
requirements. Thus, the ZTE Supply Contract is void for violation of Sections 46, 47 and 48,
Chapter 8, Subtitle B, Title I, Book V of the Administrative Code of 1987, as well as Sections 85, 86
and 87 of the Government Auditing Code of the Philippines. These provisions of both Codes
implement Section 29(2), Article VI of the Constitution.

Public respondent National Economic and Development Authority is fully aware that all
proceeds of loans and grants secured by the Philippine Government cannot be disbursed without an
appropriation from Congress. Public respondent National Economic and Development Authority and
its officials know, or ought to know by heart, that this is a fundamental requirement of the
Constitution and existing statutes. The National Economic and Development Authority has
succinctly summarized this fundamental rule in Section 5.1 of the Implementing Rules and
Regulations for the Official Development Assistance (ODA) Act of 1996:

Section 5.1. General Principles on Budget - All expenditures, inclusive of counterpart and
proceeds of loans and loans and grant funds, must be included in the annual national expenditure
program to be submitted to Congress for approval. Emphasis supplied)

There can be no dispute that the proceeds of foreign loans, whether concluded or not, cannot be
obligated in a procurement contract without a prior appropriation from Congress.

The Office of the Solicitor General (OSG), representing the public respondents, advances two
arguments to justify the absence of appropriation for the ZTE Supply Contract. First, there is no
need for an appropriation by law because the loan agreement has not been concluded. Second, the
automatic appropriation for payment of foreign loans under Section 31 of Presidential Decree No.
1177[19] provides the appropriation cover to fund the ZTE Supply Contract. Thus, the OSG asserts:

At the outset, there is no need yet for a budget allocation as the loan agreement has yet to be
concluded. Assuming arguendo that one has already been executed, the appropriation therefor is
covered by the Executive branch’s power of automatic appropriation for payment of foreign loans
contracted. x x x[20]

The OSG’s first argument is an admission that when the ZTE Supply Contract was signed, there was
no loan agreement, no loan proceeds, and no appropriation from Congress for the contract. This
only drives the last nail deeper into the coffin of the ZTE Supply Contract because the absence of an
appropriation from Congress makes the signing of the ZTE Supply Contract an unconstitutional and
unlawful act.

The OSG’s second argument betrays a lack of understanding of appropriations for payment of goods
and services as distinguished from appropriations for repayment of loans. When the Executive
branch secures a loan to fund a procurement of goods or services, the loan proceeds enter the
National Treasury as part of the general funds of the government. Congress must appropriate by
law the loan proceeds to fund the procurement of goods or services, otherwise the loan proceeds
cannot be spent by the Executive branch. When the loan falls due, Congress must make another
appropriation law authorizing the repayment of the loan out of the general funds in the National
Treasury.[21] This appropriation for the repayment of the loan is what is covered by the automatic
appropriation in Section 31 of PD No. 1177.[22] It is not the appropriation needed to fund a
procurement contract. The OSG’s arguments are clearly misplaced.

Absence of Public Bidding

The Government Procurement Reform Act requires public bidding in all procurement of
infrastructure, goods and services. Section 10, Article IV of the Government Procurement Reform
Act provides:

Section 10. Competitive Bidding – All procurement shall be done through Competitive Bidding,
except as provided for in Article XVI of this Act. Emphasis supplied)

In addition, Section 4 of the Government Procurement Reform Act provides that the Act applies to
government procurement “regardless of source of funds, whether local or foreign.” Hence, the
requirement of public bidding applies to foreign-funded contracts like the ZTE Supply Contract.

Respondents admit that there was no public bidding for the ZTE Supply Contract. Respondents do
not claim that the ZTE Supply Contract falls under any of the exceptions to public bidding in Article
XVI of the Government Procurement Reform Act. Instead, private respondent ZTE Corporation
claims that the ZTE Supply Contract, being part of an executive agreement, is exempt from public
bidding under the last sentence of Section 4 of the Government Procurement Reform Act. Thus,
private respondent ZTE Corporation argues:

x x x Section 4 of RA 9184 itself expressly provides that executive agreements that deal on subject
matters covered by said law shall be observed. Hence, the requirement of competitive bidding under
section 10 of the law is not applicable. Section 4 of RA 9184 provides:

Section 4. Scope and Application. - This Act shall apply to the procurement of Infrastructure
Projects, Goods and Consulting Services, regardless of source of funds, whether local or foreign, by
all branches and instrumentalities of government, its departments, offices and agencies, including
government-owned and/or controlled corporations and local government units, subject to the
provisions of Commonwealth Act No. 138. Any treaty or international or executive agreement
affecting the subject matter of this Act to which the Philippine government is a signatory shall be
observed.

xxx

There is no provision in the Executive Agreement that requires the conduct of competitive
public bidding before the award of the NBN Project, or any project envisioned in the RP-China
MNOU for that matter. The subsequent exchange of notes between China and the Philippines
clearly shows that ZTE was chosen as the contractor for the NBN Project. This was formalized
through the DTI-ZTE MOU and the ZTE Supply Contract. (Boldfacing and underlining in the
original)

Private respondent ZTE Corporation’s argument will hold water if an executive agreement
can amend the mandatory statutory requirement of public bidding in the Government Procurement
Reform Act. In short, the issue turns on the novel question of whether an executive agreement can
amend or repeal a prior law. The obvious answer is that an executive agreement cannot amend or
repeal a prior law.

Admittedly, an executive agreement has the force and effect of law, just like implementing
rules of executive agencies. However, just like implementing rules of executive agencies, executive
agreements cannot amend or repeal prior laws but must comply with the laws they
implement.[23] Only a treaty, upon ratification by the Senate, acquires the status of a municipal
law. Thus, a treaty may amend or repeal a prior law and vice-versa.[24] Hence, a treaty may
change state policy embodied in a prior law.

In sharp contrast, an executive agreement, being an exclusive act of the Executive branch, does not
have the status of a municipal law. Acting alone, the Executive has no law-making power. While the
Executive does possess rule-making power, such power must be exercised consistent with the law it
seeks to implement.

Consequently, an executive agreement cannot amend or repeal a prior law. An executive agreement
must comply with state policy embodied in existing municipal law. This Court has declared:

International agreements involving political issues or changes of national policy and those involving
international arrangements of a permanent character usually take the form of treaties. But
international agreements embodying adjustments of detail carrying out well-established national
policies and traditions and those involving arrangements of a more or less temporary nature usually
take the form of executive agreements.[25] Emphasis supplied)

Executive agreements are intended to carry out well-established national policies, and these are
found in statutes.
 In the United States, from where we adopted the concept of executive agreements, the
prevailing view is that executive agreements[26] cannot alter existing law but must conform with all
statutory requirements. The U.S. State Department has explained the distinction between treaties
and executive agreements in this manner:

x x x it may be desirable to point out here the well-recognized distinction between an executive
agreement and a treaty. In brief, it is that the former cannot alter the existing law and must conform
to all statutory enactments, whereas a treaty, if ratified by and with the advice and consent of two-
thirds of the Senate, as required by the Constitution, itself becomes the supreme law of the land and
takes precedence over any prior statutory enactments.[27] Emphasis supplied)

As Professor Erwin Chemerinsksy states, “So long as the (U.S.) president is not violating another
constitutional provision or a federal statute, there seems little basis for challenging the
constitutionality of an executive agreement.”[28] In the United States, while an executive agreement
cannot alter a federal law, an executive agreement prevails over state law.[29]

Likewise, Professor Laurence H. Tribe states that an executive agreement cannot override a
prior act of Congress even as it prevails over state law. Thus:

x x x Although it seems clear that an unratified executive agreement, unlike a treaty, cannot override
a prior act of Congress, executive agreements, even without Senate ratification, have the same
weight as formal treaties in their effect upon conflicting state laws.[30]

Professor Tribe cited United States v. Gary W. Capps, Inc.,[31] where the Court of Appeals (4th
Circuit) ruled that an unratified executive agreement could not prevail over a conflicting federal
law. The U.S. Supreme Court affirmed the appellate court’s decision but on non-constitutional
grounds.

Clearly, an executive agreement must comply with well-established state policies, and these state
policies are laid down in statutes. The Government Procurement Reform Act has laid down a
categorical state policy – “All procurement shall be done through Competitive Bidding,” subject only
to narrowly defined exceptions that respondents do not invoke here. Consequently, the executive
agreement between China and the Philippines cannot exempt the ZTE Supply Contract from the
state policy of public bidding.

Private respondent ZTE Corporation further claims that the ZTE Supply Contract is part of
the executive agreement between China and the Philippines. This is plain error. An executive
agreement is an agreement between governments. The Executive branch has defined an
“international agreement,” which includes an executive agreement, to refer to a contract or an
understanding “entered into between the Philippines and another government.”[32]

That the Chinese Government handpicked the ZTE Corporation to supply the goods and services to
the Philippine Government does not make the ZTE Supply Contract an executive agreement. ZTE
Corporation is not a government or even a government agency performing governmental or
developmental functions like the Export-Import Bank of China or the Japan Bank for International
Cooperation,[33] or a multilateral lending agency organized by governments like the World
Bank.[34] ZTE Corporation is a business enterprise performing purely commercial functions. ZTE
Corporation is publicly listed in the Hong Kong and Shenzhen stock exchanges, with individual and
juridical stockholders that receive dividends from the corporation.

Moreover, an executive agreement is governed by international law.[35] However, the ZTE Supply
Contract expressly provides that it shall be governed by Philippine law.[36] Thus, the ZTE Supply
Contract is not an executive agreement but simply a commercial contract, which must comply with
public bidding as mandated by the governing law, which is Philippine law.

Finally, respondents seek refuge in the second sentence of Section 4 of the Government
Procurement Reform Act:

Section 4. Scope and Application - This Act shall apply to the Procurement of Infrastructure
Projects, Goods and Consulting Services, regardless of the source of funds, whether local or foreign,
by all branches of the government, its departments, offices and agencies, including government-
owned and/or-controlled corporations and local government units, subject to the provisions of
Commonwealth Act No. 138. Any treaty or international or executive agreement affecting the
subject matter of this Act to which the Philippine government is a signatory shall be
observed. Emphasis supplied)

Respondents argue that the second sentence of Section 4 allows an executive agreement to
override the mandatory public bidding in Section 10 of the Government Procurement Reform Act.

Respondents’ argument is flawed. First, an executive agreement, being an exclusive act of the
Executive branch, cannot amend or repeal a mandatory provision of law requiring public bidding in
government procurement contracts. To construe otherwise the second sentence of Section 4 would
constitute an undue delegation of legislative powers to the President, making such sentence
unconstitutional. There are no standards prescribed in the Government Procurement Reform Act
that would guide the President in exercising such alleged delegated legislative power. Thus, the
second sentence of Section 4 cannot be construed to delegate to the President the legislative power
to amend or repeal mandatory requirements in the Government Procurement Reform Act.

Second, under Section 10 of the Government Procurement Reform Act, the only exceptions to
mandatory public bidding are those specified in Article XVI of the Act. These specified exceptions
do not include purchases from foreign suppliers handpicked by foreign governments, or from
suppliers owned or controlled by foreign governments. Moreover, Section 4 of the Government
Procurement Reform Act mandates that the “Act shall apply to the Procurement of Infrastructure
Projects, Goods and Consulting Services, regardless of source of funds, whether local or foreign x x
x.”
Third, the second sentence of Section 4 should be read in conjunction with Section 4 of the Foreign
Borrowings Act,[37] which provides:

Section 4. In the contracting of any loan, credit or indebtedness under this Act, the President of the
Philippines may, when necessary, agree to waive or modify the application of any law granting
preferences or imposing restrictions on international competitive bidding, including among others,
Act Numbered Four Thousand Two Hundred Thirty-Nine, Commonwealth Act Numbered One
Hundred Thirty-Eight, the provisions of Commonwealth Act Numbered Five Hundred Forty-One,
insofar as such provisions do not pertain to constructions primarily for national defense or security
purposes, Republic Act Numbered Five Thousand One Hundred Eighty-Three: Provided, however,
That as far as practicable, utilization of the services of qualified domestic firms in the prosecution of
projects financed under this Act shall be encouraged: Provided, further, That in case where
international competitive bidding shall be conducted preference of at least fifteen per centum shall
be granted in favor of articles, materials, or supplies of the growth, production or manufacture of the
Philippines: Provided, finally, That the method and procedure in the comparison of bids shall be the
subject of agreement between the Philippine Government and the lending institution. Emphasis
supplied)

Likewise, Section 4 of the Government Procurement Reform Act should be read in

conjunction with Section 11-A of the Official Development Assistance Act of 1996:[38]

Section 11-A. In the contracting of any loan, credit or indebtedness under this Act or any law, the
President of the Philippines may, when necessary, agree to waive or modify the application of any
provision of law granting preferences in connection with, or imposing restrictions on, the
procurement of goods or services: Provided, however, That as far as practicable, utilization of the
services of qualified Filipino citizens or corporations or associations owned by such citizens in the
prosecution of projects financed under this Act shall be prepared on the basis of the standards set
for a particular project: Provided, further, That the matter of preference in favor of articles, materials,
or supplies of the growth, production or manufacture of the Philippines, including the method or
procedure in the comparison of bids for purposes therefor, shall be the subject of agreement
between the Philippine Government and the lending institution. (Emphasis supplied)

Consequently, as construed together, the executive agreements mentioned in the second sentence
of Section 4 of the Government Procurement Reform Act should refer to executive agreements on
(1) the waiver or modification of preferences to local goods or domestic suppliers;[39] (2) the waiver
or modification of restrictions on international competitive bidding; and (3) the method or procedure
in the comparison of bids.

The executive agreements cannot refer to the waiver of public bidding for two reasons. First, the law
only allows the President to “waive or modify, the application of any law x x x imposing restrictions
on international competitive bidding.” The law does not authorize the President to waive entirely
public bidding but only the restrictions on public bidding. Thus, the President may restrict the public
bidding to suppliers domiciled in the country of the creditor. This is the usual modification on
restrictions imposed by creditor countries. Second, when the law speaks of executive agreements
on the method or procedure in the comparison of bids, the obvious assumption is there will be
competitive bidding. Third, there is no provision of law allowing waiver of public bidding outside of
the well-defined exceptions in Article XVI of the Government Procurement Reform Act.
Respondents, while not raising this argument, cannot also rely on Section 1 of the Foreign
Borrowings Act, which provides:

Section 1. The President of the Philippines is hereby authorized, in behalf of the Republic of the
Philippines, to contract such loans, credits, including supplier's credit, deferred payment
arrangements, or indebtedness as may be necessary and upon terms and conditions as may be
agreed upon, not inconsistent with this Act, with Governments of foreign countries with whom the
Philippines has diplomatic or trade relations or which are members of the United Nations, their
agencies, instrumentalities or financial institutions or with reputable international organizations or
non-governmental national or international lending institutions or firms extending supplier's credit
deferred payment arrangements x x x . (Emphasis supplied)

A solitary Department of Justice opinion[40] has ventured that the phrase “as may be necessary and
upon terms and conditions as may be agreed upon” serves as statutory basis for the President to
exempt foreign-funded government procurement contracts from public bidding. This is a
mistake. This phrase means that the President has discretion to decide the terms and conditions of
the loan, such as the rate of interest, the maturity period, amortization amounts, and similar
matters. This phrase does not delegate to the President the legislative power to amend or repeal
mandatory provisions of law like compulsory public bidding of government procurement
contracts. Otherwise, this phrase would constitute undue delegation of legislative power since there
are no standards that would guide the President in exercising this alleged delegated legislative
power.

What governs the waiver or modification of restrictions on public bidding is Section 4-A of the
Foreign Borrowings Act, which authorizes the President to, “when necessary, agree to modify the
application of any law x x x imposing restrictions on international competitive bidding.” Section 4 is
the specific provision of the Foreign Borrowings Act that deals with the President’s authority to waive
or modify restrictions on public bidding. Section 1 of the Act does not deal with the requirement of
public bidding. Besides, if Section 1 is construed as granting the President full authority to waive or
limit public bidding, Section 4 becomes a superfluous provision.

In any event, whatever doubt may have existed before has been erased by the enactment in
2003 of the Government Procurement Reform Act, which reformed the laws regulating government
procurement. The following provisions of the Act clearly prescribe the rule that government
procurement contracts shall be subject to mandatory public bidding:

Section 3. Governing Principles on Government Procurement. - All procurement of the national

government, its departments, bureaus, offices and agencies, including state universities and
colleges, government-owned and/or controlled corporations, government financial institutions and
local government units shall, in all cases, be governed by these principles:

(a) Transparency in the procurement process x x x.

(b) Competitiveness by extending equal opportunity to enable private contracting parties who are
eligible and qualified to participate in public bidding.

x x x.

Section 4. Scope and Application. - This Act shall apply to the Procurement of Infrastructure
Projects, Goods and Consulting Services, regardless of source of funds, whether local or foreign, by
all branches and instrumentalities of government, its departments, offices and agencies, including
government-owned and/or controlled corporations and local government units, x x x.

Section 10. Competitive Bidding. - All procurement shall be done through Competitive Bidding,
except as provided for in Article XVI of this Act. (Emphasis supplied)

The only exceptions to mandatory public bidding are procurements falling under any of the narrowly
defined situations in Article XVI of the Act, which respondents do not invoke.

Foreign-funded projects of the government are not exempt from public bidding despite executive
agreements entered into by the Philippines with creditor countries or lending institutions. In Abaya
v. Ebdane, Jr.,[41] the Court cited Memorandum Circular No. 104 dated 21 August 1989[42] issued
by the President:

x x x it is hereby clarified that foreign-assisted infrastructure projects may be exempted from the
application of the pertinent provisions of the Implementing Rules and Regulations (IRR) of
Presidential Decree (P.D.) No. 1594 relative to the method and procedure in the comparison of bids,
which may be the subject of agreement between the infrastructure agency concerned and the
lending institution. It should be made clear however that public bidding is still required and can only
be waived pursuant to existing laws. (Italicization in the original of the Memorandum Circular;
boldfacing supplied)

Executive agreements with lending institutions have never been understood to allow exemptions
from public bidding. What the executive agreements can modify are the methods or procedures in
the comparison of bids, such as the adoption of the competitive bidding procedures or guidelines of
the Japan Bank for International Cooperation[43] or the World Bank[44] on the method or procedure
in the evaluation or comparison of bids. It is self-evident that these procedures or guidelines require
public bidding.

Even so-called tied loans from creditor countries cannot justify exemption from public bidding
although the bidders may be limited to suppliers domiciled in the creditor countries. Such a
geographic restriction on the domicile of suppliers can be the subject of an executive agreement as
a modification of restrictions on international competitive bidding. A publication issued by public
respondent National Economic and Development Authority summarizes the international practice on
tied loans with respect to public bidding:
The conditions imposed by the donor on the recipient with respect to ODA utilization provide another
basis for differentiating ODA. In particular, restriction of the geographic areas where procurement of
goods and services are eligible for ODA funding make ODA loan/grant tied or untied with respect to
source of procurement. Usually, bilateral ODA is tied to the donor country in terms of procurement.
While competitive bidding is still practiced, qualified bidders for the supply of goods and services are
confined to those firms which are owned or controlled by nationals of the donor country. x x
x[45] (Emphasis supplied)

Even for tied loans, the international practice still requires public bidding although the public bidding
is restricted only among suppliers that are nationals of the creditor country. In the present case,
there was no such public bidding because the Export-Import Bank of China simply handpicked ZTE
Corporation as the supplier of the goods and services to the Philippine Government.

That the funding for the ZTE Supply Contract will come from a foreign loan does not negate the
rationale for public bidding. Filipino taxpayers will still pay for the loan with interest. The need to
safeguard public interest against anomalies exists in all government procurement contracts,
regardless of the source of funding. Public bidding is the most effective means to prevent anomalies
in the award of government contracts. Public bidding promotes transparency and honesty in the
expenditure of public funds. Public bidding is accepted as the best means of securing the most
advantageous price for the government, whether in procuring infrastructure, goods or services, or in
disposing off government assets.

Even in a Build-Operate-Transfer project where the proponent provides all the capital with no
government guarantee on project loans, the law requires public bidding in the form of a Swiss
challenge.[46] With more reason should a project financed by a tied loan to the government be
subject to public bidding. There is no sound reason why the Philippine government should allow its
foreign creditor in an already tied loan to handpick the supplier of goods and services.

A tied loan, driven by a handpicked supplier, violates the principle of fair and open process in
government procurement transactions. Such a tied loan, which arbitrarily reserves a contract to a
pre-determined supplier, will likely lead to anomalies. This is contrary to the state policies
enunciated in Sections 27 and 28, Article II of the Constitution:

Section 27. The State shall maintain honesty and integrity in the public service and take positive
and effective measures against graft and corruption.

Section 28. Subject to reasonable conditions prescribed by law, the State adopts and implements a
policy of full public disclosure of all its transactions involving public interest.

ZTE Supply Contract is Void from the Beginning

Contracts expressly prohibited or declared void by law are void from the beginning. Article
1409 of the Civil Code provides:
 Article 1409. The following contracts are inexistent and void from the beginning:

xxx

(7) Those expressly prohibited or declared void by law.

x x x. (Emphasis supplied)

Sections 46 and 47, Chapter 8, Subtitle B, Title I, Book V of the Administrative Code of 1987
expressly prohibit the entering into procurement contracts that are not funded by an appropriation
law and which do not have certificates of appropriation and fund availability. Section 48 of the same
law expressly declares such contracts void. To repeat, Section 48 provides:

SECTION 48. Void Contract and Liability of Officer. — Any contract entered into contrary to
the requirements of the two (2) immediately preceding sections shall be void, x x x. (Emphasis
supplied)

The ZTE Supply Contract, which is not funded by an appropriation law and does not have a
certificate of appropriation and fund availability, is not only void, but also void from the beginning
under Article 1409 of the Civil Code. As the Court held in COMELEC v. Quijano-Padilla,[47] which
involved a procurement contract without the requisite appropriation law and certificate of
appropriation and fund availability:

Verily, the contract, as expressly declared by law, is inexistent and void ab initio. This is to
say that the proposed contract is without force and effect from the very beginning or from its
incipiency, as if it had never been entered into, and hence, cannot be validated either by lapse of
time or ratification. (Emphasis supplied)

A contract void from the beginning is legally non-existent. As such, it cannot be annulled
because to annul a contract assumes a voidable contract.[48] A cancellation of a contract void from
the beginning has no legal effect because the contract is legally non-existent. Any cancellation may
simply be construed as an acknowledgment or admission that the contract is void from the
beginning. A contract void from the beginning can only be declared as such, that is, void from the
beginning.

Thus, the discontinuance or cancellation of the ZTE Supply Contract by the Philippine Government,
apart from being unilateral, had no legal effect and did not moot this petition. The members of this
Court have the sworn duty to uphold the system of checks and balances that is so essential to our
democratic system of government. In the present case, the members of this Court must uphold the
check and balance in the appropriation and expenditure of public funds as embodied in Section
29(2), Article VI of the Constitution and the statutes insuring its compliance. If our democratic
institutions are to be strengthened, this Court must not shirk from its primordial duty to preserve and
uphold the Constitution.

It is time to put an end to government procurement contracts, amounting to tens of billions of pesos,
exceeding even the annual budget of the Judiciary, that are awarded and signed without an
appropriation from Congress, and without the required public bidding. This Court must categorically
declare the ZTE Supply Contract void from the beginning.

Accordingly, I vote to GRANT the petition and to DECLARE the ZTE Supply Contract VOID
from the beginning.

ANTONIO T. CARPIO
Associate Justice

5) CANDIO VS CA 253 SCRA 78

[Syllabus]

FIRST DIVISION

[G.R. No. 107493. February 1, 1996]

NATIVIDAD CANDIDO, assisted by her husband ALFREDO CANDIDO,

and VICTORIA C. RUMBAUA, assisted by her husband
AMOR RUMBAUA, petitioners, vs. COURT OF APPEALS and
SOFRONIO DABU, respondents.

DECISION
BELLOSILLO, J.:

This petition for review on certiorari was instituted for the re-examination of the
decision of the Court of Appeals in CA-G.R. No. SP-24522 (CAR) affirming that of the
trial court which dismissed the complaint of petitioners for failure to establish their cause
of action.
 Petitioners Natividad Candido and Victoria Rumbaua are co-owners of a first-class
irrigated riceland with an area of 21,193 square meters located in Orion,
Bataan.Respondent Sofronio Dabu served as their agricultural tenant. On 21 July 1986
petitioners lodged a complaint[1] with the Regional Trial Court of Bataan against
respondent Dabu for termination of tenancy relationship and recovery of unpaid rentals
from crop-year 1983 plus attorneys fees and litigation expenses.
Petitioners averred in their complaint below that a team from the Ministry of
Agrarian Reform had fixed a provisional rental of twenty-six (26) and twenty-nine (29)
sacks of palay for the rainy and dry seasons, respectively, which respondent failed to
pay beginning the crop-year 1983 dry season up to the filing of the complaint.
Private respondent denied the material allegations of the complaint and claimed that
until 1983 their sharing system was on a 50-50 basis; that his share in the crop year
1983 dry season was still with petitioner Natividad Candido who likewise retained his
water pump. He denied any provisional rental allegedly fixed by the Ministry of Agrarian
Reform and at the same time maintained that only a proposal for thirteen (13) cavans
for the rainy season crop and twenty-five percent (25%) of the net harvest during the dry
season was put forward. He claimed that he paid his rentals by depositing thirteen (13)
cavans of palay for the 1984 rainy season crop, thirteen (13) cavans for 1985 and eight
(8) cavans representing twenty-five percent (25%) of the dry season harvest.
On motion of respondent upon issues being joined, the case was referred to the
Department of Agrarian Reform (DAR) for a preliminary determination of the existing
relationship between the parties and for certification as to its propriety for
trial. Thereafter the DAR certified that the case was proper for trial but only on the issue
of non-payment of rentals and not on the ejectment of respondent Dabu. Accordingly
trial proceeded on the issue of non-payment of rentals.
After finding that no evidence was adduced by petitioners to prove the provisional
rental alleged to have been fixed by the Ministry of Agrarian Reform, the lower court
dismissed the complaint. The counterclaim of respondent Dabu was likewise dismissed
after it was established that the tenancy relationship prevailing between the parties was
on a 50-50 basis.[2]
The Court of Appeals[3] confirmed the findings of the court a quo and affirmed its
judgment thus

We have carefully examined the testimonial and documentary evidence on record and
found nothing therein about the so-called provisional rates supposedly fixed by the
DAR and allegedly breached by appellee. Indeed neither appellant herself Natividad
C. Candido nor appellants other witness Benjamin Santos ever mentioned in the
course of their respective testimonies the alleged provisional rates fixed by the DAR.
For sure, going by appellants evidence it would appear that no such rates were in fact
fixed by the DAR. [4]

The appellate court also found that no evidence was introduced to prove the
expenses incurred by the parties for planting and harvesting hence the amount of the
net harvest was never determined. Only the transfer certificate of title of the property
and its corresponding tax declaration were offered in evidence.
The motion of petitioners for reconsideration[5] was merely noted considering that
under Sec. 4. par. (d), Rule 6, of the Revised Internal Rules of the Court of Appeals
(RJRCA), the filing of a motion for reconsideration in agrarian cases is not allowed. [6]
Petitioners would impress upon us that the verified complaint and the affidavit
presented by petitioners to the DAR are proofs of the provisional rentals fixed by it and
that it was error for the trial court not to have taken cognizance of these documents.
We are not persuaded. It is settled that courts will only consider as evidence that
which has been formally offered.[7] The affidavit of petitioner Natividad Candido
mentioning the provisional rate of rentals was never formally offered; neither the alleged
certification by the Ministry of Agrarian Reform. Not having been formally offered, the
affidavit and certification cannot be considered as evidence. Thus the trial court as well
as the appellate court correctly disregarded them. If they neglected to offer those
documents in evidence, however vital they may be, petitioners only have themselves to
blame, not respondent who was not even given a chance to object as the documents
were never offered in evidence.
A document, or any article for that matter, is not evidence when it is simply marked
for identification; it must be formally offered, and the opposing counsel given an
opportunity to object to it or cross-examine the witness called upon to prove or identify
it.[8] A formal offer is necessary since judges are required to base their findings of fact
and judgment only -and strictly - upon the evidence offered by the parties at the
trial.[9] To allow a party to attach any document to his pleading and then expect the court
to consider it as evidence may draw unwarranted consequences. The opposing party
will be deprived of his chance to examine the document and object to its
admissibility. The appellate court will have difficulty reviewing documents not previously
scrutinized by the court below. The pertinent provisions of the Revised Rules of Court
on the inclusion on appeal of documentary evidence or exhibits in the records cannot be
stretched as to include such pleadings or documents not offered at the hearing of the
case.[10]
Petitioners would insist that we take judicial notice of the affidavit of
petitioner Natividad C. Candido despite absence of any formal offer during the
proceedings in the trial court. This is futile since this is not among the matters
which the law mandatorily requires to be taken judicial notice of; [11] neither can we
consider it of public knowledge, or capable of unquestionable demonstration, or
ought to be known to judges because of their judicial functions.[12]
The testimony of petitioner Natividad Candido cannot even be relied upon, to say
the least. Quite interestingly, she could not even recall when private respondent first
failed to pay his rent, if indeed there was any failure on his part to comply with his
obligation. She only said that it was sometime in 1982 or 1983, and did not even know
precisely how many cavans of palay were being harvested per crop-year.
Petitioners definitely failed to establish their cause of action. They never proved that
respondent Dabu failed to pay his rentals starting 1982. Neither were they able to
competently confirm the provisional rate of rentals allegedly fixed by the team of the
Ministry of Agrarian Reform.
WHEREFORE, the petition is DENIED. The decision of the Court of Appeals in CA-
G.R. No. SP-24522 (CAR) confirming the order of the Regional Trial Court of Bataan in
Civil Case No. 5429 dismissing the complaint is AFFIRMED, with costs against
petitioners.
SO ORDERED.
Padilla, Vitug, Kapunan, and Hermosisima, Jr., concur.

SECTION 2. DISCRETIONARY JUDICIAL NOTICE

1) EXPERTTRAVEL AND TOURS, INC VS CA

Expert Travel &Tours Inc. vs CA

GR 152392, May 26, 2005
Callejo Sr. J.
Facts: Korean Air Lines (KAL) filed a complaint against Expert Travel & Tours Inc
(ETI) with the RTC of Manila for collection of sum of money plus attorney’s fees and
damages. The verification and certification against non-forum shopping was signed by
Atty. Mario Aguinaldo, who indicated therein that he was the resident agent and legal
counsel of KAL and had caused the preparation of the complaint. ETI moved to dismiss
the complaint on the ground that said lawyer was not authorized to execute the
verification and certification against non-forum shopping as required by Section 5 Rule
7 of the Rules of Court. KAL opposed the motion, contending that Atty. Aguinaldo was
its resident agent and was reported as such with the SEC as required by the Corporation
Code of the Philippines. Also, it further alleged that Atty. Aguinaldo was the Corporate
Secretary of KAL.
At the hearing, Atty. Aguinaldo claimed that thru a resolution of KAL Board of Directors
approved during a special meeting, he was authorized to file the complaint. Thru an
affidavit submitted by its general manager, it was alleged that a special teleconference
was held and and in that same teleconference the Board approved a resolution
authorizing him to execute the certification against non-forum shopping and to file the
complaint. However, the general manager provided no written copy of the said
resolution.

The trial court gave due credence to the claim of Atty. Aguinaldo and the general
manager. ETI filed a motion for reconsideration, contending that the court cannot take
judicial notice of the said teleconference without any hearing, which was denied by the
RTC. CA also denied the appeal.

Issue: Whether or not the court can take judicial notice of the said teleconference.
Held: Things of “common knowledge” of which courts take judicial matters coming to
the knowledge of men generally in the course of the ordinary experiences of life, or they
may be matters which are generally accepted by mankind as true and are capable of
ready and unquestionable determination. As the common knowledge of man ranges far
and wide, a wide variety of particular facts have been judicially noticed as being matters
of common knowledge. But a court cannot take judicial notice of any fact which, in part,
is dependent on the existence or non-existence of a fact of which the court has no
constructive knowledge.
In this age of modern technology, the courts may take judicial notice that business
transactions may be made by individuals through teleconferencing. Teleconferencing is
interactive group communication through an electronic medium, bringing people
together under one roof even though they are separated by hundreds of miles.

In the Philippines, teleconferencing and videoconferencing of members of the board of

directors of private corporation is is a reality, in light of RA 8792. The SEC issued SEC
memorandum Circular No. 15, on November 30, 2001, providing the guidelines to be
complied with related to such conferences.

The Court is not convinced that one was conducted; even if there had been one, the
Court is not inclined to believe that a board resolution was duly passed specifically
authorizing Atty. Aguinaldo to file the complaint and execute the required certification
against non forum shopping.

Petition granted.

SECOND DIVISION

[G.R. No. 152392. May 26, 2005]

EXPERTRAVEL & TOURS, INC., petitioner, vs. COURT OF APPEALS

and KOREAN AIRLINES, respondents.

DECISION
CALLEJO, SR., J.:

Before us is a petition for review on certiorari of the Decision of the Court

[1]

of Appeals (CA) in CA-G.R. SP No. 61000 dismissing the petition

for certiorari and mandamusfiled by Expertravel and Tours, Inc. (ETI).
 The Antecedents

Korean Airlines (KAL) is a corporation established and registered in the

Republic of South Korea and licensed to do business in the Philippines. Its
general manager in the Philippines is Suk Kyoo Kim, while its appointed
counsel was Atty. Mario Aguinaldo and his law firm.
On September 6, 1999, KAL, through Atty. Aguinaldo, filed a
Complaint against ETI with the Regional Trial Court (RTC) of Manila, for the
[2]

collection of the principal amount of P260,150.00, plus attorneys fees and

exemplary damages. The verification and certification against forum shopping
was signed by Atty. Aguinaldo, who indicated therein that he was the resident
agent and legal counsel of KAL and had caused the preparation of the
complaint.
ETI filed a motion to dismiss the complaint on the ground that Atty.
Aguinaldo was not authorized to execute the verification and certificate of non-
forum shopping as required by Section 5, Rule 7 of the Rules of Court. KAL
opposed the motion, contending that Atty. Aguinaldo was its resident agent
and was registered as such with the Securities and Exchange Commission
(SEC) as required by the Corporation Code of the Philippines. It was further
alleged that Atty. Aguinaldo was also the corporate secretary of KAL.
Appended to the said opposition was the identification card of Atty. Aguinaldo,
showing that he was the lawyer of KAL.
During the hearing of January 28, 2000, Atty. Aguinaldo claimed that he
had been authorized to file the complaint through a resolution of the KAL
Board of Directors approved during a special meeting held on June 25, 1999.
Upon his motion, KAL was given a period of 10 days within which to submit a
copy of the said resolution. The trial court granted the motion. Atty. Aguinaldo
subsequently filed other similar motions, which the trial court granted.
Finally, KAL submitted on March 6, 2000 an Affidavit of even date,
[3]

executed by its general manager Suk Kyoo Kim, alleging that the board of
directors conducted a special teleconference on June 25, 1999, which he and
Atty. Aguinaldo attended. It was also averred that in that same teleconference,
the board of directors approved a resolution authorizing Atty. Aguinaldo to
execute the certificate of non-forum shopping and to file the complaint. Suk
Kyoo Kim also alleged, however, that the corporation had no written copy of
the aforesaid resolution.
On April 12, 2000, the trial court issued an Order denying the motion to
[4]

dismiss, giving credence to the claims of Atty. Aguinaldo and Suk Kyoo Kim
that the KAL Board of Directors indeed conducted a teleconference on June
25, 1999, during which it approved a resolution as quoted in the submitted
affidavit.
ETI filed a motion for the reconsideration of the Order, contending that it
was inappropriate for the court to take judicial notice of the said
teleconference without any prior hearing. The trial court denied the motion in
its Order dated August 8, 2000.
[5]

ETI then filed a petition for certiorari and mandamus, assailing the orders
of the RTC. In its comment on the petition, KAL appended a certificate signed
by Atty. Aguinaldo dated January 10, 2000, worded as follows:

SECRETARYS/RESIDENT AGENTS CERTIFICATE

KNOW ALL MEN BY THESE PRESENTS:

I, Mario A. Aguinaldo, of legal age, Filipino, and duly elected and appointed
Corporate Secretary and Resident Agent of KOREAN AIRLINES, a foreign
corporation duly organized and existing under and by virtue of the laws of the
Republic of Korea and also duly registered and authorized to do business in the
Philippines, with office address at Ground Floor, LPL Plaza Building, 124 Alfaro St.,
Salcedo Village, Makati City, HEREBY CERTIFY that during a special meeting of
the Board of Directors of the Corporation held on June 25, 1999 at which a quorum
was present, the said Board unanimously passed, voted upon and approved the
following resolution which is now in full force and effect, to wit:

RESOLVED, that Mario A. Aguinaldo and his law firm M.A. Aguinaldo &
Associates or any of its lawyers are hereby appointed and authorized to take with
whatever legal action necessary to effect the collection of the unpaid account of
Expert Travel & Tours. They are hereby specifically authorized to prosecute, litigate,
defend, sign and execute any document or paper necessary to the filing and
prosecution of said claim in Court, attend the Pre-Trial Proceedings and enter into a
compromise agreement relative to the above-mentioned claim.

IN WITNESS WHEREOF, I have hereunto affixed my signature this 10th day of

January, 1999, in the City of Manila, Philippines.

(Sgd.)
MARIO A. AGUINALDO
Resident Agent
SUBSCRIBED AND SWORN to before me this 10th day of January, 1999, Atty.
Mario A. Aguinaldo exhibiting to me his Community Tax Certificate No. 14914545,
issued on January 7, 2000 at Manila, Philippines.

(Sgd.)
Doc. No. 119; ATTY. HENRY D. ADASA
Page No. 25; Notary Public
Book No. XXIV Until December 31, 2000
Series of 2000. PTR #889583/MLA 1/3/2000 [6]

On December 18, 2001, the CA rendered judgment dismissing the

petition, ruling that the verification and certificate of non-forum shopping
executed by Atty. Aguinaldo was sufficient compliance with the Rules of
Court. According to the appellate court, Atty. Aguinaldo had been duly
authorized by the board resolution approved on June 25, 1999, and was the
resident agent of KAL. As such, the RTC could not be faulted for taking
judicial notice of the said teleconference of the KAL Board of Directors.
ETI filed a motion for reconsideration of the said decision, which the CA
denied. Thus, ETI, now the petitioner, comes to the Court by way of petition
for review on certiorari and raises the following issue:

DID PUBLIC RESPONDENT COURT OF APPEALS DEPART FROM THE

ACCEPTED AND USUAL COURSE OF JUDICIAL PROCEEDINGS WHEN IT
RENDERED ITS QUESTIONED DECISION AND WHEN IT ISSUED ITS
QUESTIONED RESOLUTION, ANNEXES A AND B OF THE INSTANT
PETITION? [7]

The petitioner asserts that compliance with Section 5, Rule 7, of the Rules
of Court can be determined only from the contents of the complaint and not by
documents or pleadings outside thereof. Hence, the trial court committed
grave abuse of discretion amounting to excess of jurisdiction, and the CA
erred in considering the affidavit of the respondents general manager, as well
as the Secretarys/Resident Agents Certification and the resolution of the
board of directors contained therein, as proof of compliance with the
requirements of Section 5, Rule 7 of the Rules of Court. The petitioner also
maintains that the RTC cannot take judicial notice of the said
teleconference without prior hearing, nor any motion therefor. The petitioner
reiterates its submission that the teleconference and the resolution adverted
to by the respondent was a mere fabrication.
The respondent, for its part, avers that the issue of whether modern
technology is used in the field of business is a factual issue; hence, cannot be
raised in a petition for review on certiorari under Rule 45 of the Rules of Court.
On the merits of the petition, it insists that Atty. Aguinaldo, as the resident
agent and corporate secretary, is authorized to sign and execute the
certificate of non-forum shopping required by Section 5, Rule 7 of the Rules of
Court, on top of the board resolution approved during the teleconference of
June 25, 1999. The respondent insists that technological advances in this time
and age are as commonplace as daybreak. Hence, the courts may take
judicial notice that the Philippine Long Distance Telephone Company, Inc. had
provided a record of corporate conferences and meetings through FiberNet
using fiber-optic transmission technology, and that such technology facilitates
voice and image transmission with ease; this makes constant communication
between a foreign-based office and its Philippine-based branches faster and
easier, allowing for cost-cutting in terms of travel concerns. It points out that
even the E-Commerce Law has recognized this modern technology. The
respondent posits that the courts are aware of this development in technology;
hence, may take judicial notice thereof without need of hearings. Even if such
hearing is required, the requirement is nevertheless satisfied if a party is
allowed to file pleadings by way of comment or opposition thereto.
In its reply, the petitioner pointed out that there are no rulings on the
matter of teleconferencing as a means of conducting meetings of board of
directors for purposes of passing a resolution; until and after teleconferencing
is recognized as a legitimate means of gathering a quorum of board of
directors, such cannot be taken judicial notice of by the court. It asserts that
safeguards must first be set up to prevent any mischief on the public or to
protect the general public from any possible fraud. It further proposes possible
amendments to the Corporation Code to give recognition to such manner of
board meetings to transact business for the corporation, or other related
corporate matters; until then, the petitioner asserts, teleconferencing cannot
be the subject of judicial notice.
The petitioner further avers that the supposed holding of a special meeting
on June 25, 1999 through teleconferencing where Atty. Aguinaldo was
supposedly given such an authority is a farce, considering that there was no
mention of where it was held, whether in this country or elsewhere. It insists
that the Corporation Code requires board resolutions of corporations to be
submitted to the SEC. Even assuming that there was such a teleconference, it
would be against the provisions of the Corporation Code not to have any
record thereof.
The petitioner insists that the teleconference and resolution adverted to by
the respondent in its pleadings were mere fabrications foisted by the
respondent and its counsel on the RTC, the CA and this Court.
 The petition is meritorious.
Section 5, Rule 7 of the Rules of Court provides:

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

Failure to comply with the foregoing requirements shall not be curable by mere
amendment of the complaint or other initiatory pleading but shall be cause for the
dismissal of the case without prejudice, unless otherwise provided, upon motion and
after hearing. The submission of a false certification or non-compliance with any of
the undertakings therein shall constitute indirect contempt of court, without prejudice
to the corresponding administrative and criminal actions. If the acts of the party or his
counsel clearly constitute willful and deliberate forum shopping, the same shall be
ground for summary dismissal with prejudice and shall constitute direct contempt, as
well as a cause for administrative sanctions.

It is settled that the requirement to file a certificate of non-forum shopping

is mandatory and that the failure to comply with this requirement cannot be
[8]

excused. The certification is a peculiar and personal responsibility of the party,

an assurance given to the court or other tribunal that there are no other
pending cases involving basically the same parties, issues and causes of
action. Hence, the certification must be accomplished by the party himself
because he has actual knowledge of whether or not he has initiated similar
actions or proceedings in different courts or tribunals. Even his counsel may
be unaware of such facts. Hence, the requisite certification executed by the
[9]

plaintiffs counsel will not suffice.[10]

In a case where the plaintiff is a private corporation, the certification may

be signed, for and on behalf of the said corporation, by a specifically
authorized person, including its retained counsel, who has personal
knowledge of the facts required to be established by the documents. The
reason was explained by the Court in National Steel Corporation v. Court of
Appeals, as follows:
[11]
Unlike natural persons, corporations may perform physical actions only through
properly delegated individuals; namely, its officers and/or agents.

The corporation, such as the petitioner, has no powers except those expressly
conferred on it by the Corporation Code and those that are implied by or are incidental
to its existence. In turn, a corporation exercises said powers through its board of
directors and/or its duly-authorized officers and agents. Physical acts, like the signing
of documents, can be performed only by natural persons duly-authorized for the
purpose by corporate by-laws or by specific act of the board of directors. All acts
within the powers of a corporation may be performed by agents of its selection; and
except so far as limitations or restrictions which may be imposed by special charter,
by-law, or statutory provisions, the same general principles of law which govern the
relation of agency for a natural person govern the officer or agent of a corporation, of
whatever status or rank, in respect to his power to act for the corporation; and agents
once appointed, or members acting in their stead, are subject to the same rules,
liabilities and incapacities as are agents of individuals and private persons.

For who else knows of the circumstances required in the Certificate but its own
retained counsel. Its regular officers, like its board chairman and president, may not
even know the details required therein.

Indeed, the certificate of non-forum shopping may be incorporated in the

complaint or appended thereto as an integral part of the complaint. The rule is
that compliance with the rule after the filing of the complaint, or the dismissal
of a complaint based on its non-compliance with the rule, is impermissible.
However, in exceptional circumstances, the court may allow subsequent
compliance with the rule. If the authority of a partys counsel to execute a
[12]

certificate of non-forum shopping is disputed by the adverse party, the former

is required to show proof of such authority or representation.
In this case, the petitioner, as the defendant in the RTC, assailed the
authority of Atty. Aguinaldo to execute the requisite verification and certificate
of non-forum shopping as the resident agent and counsel of the respondent. It
was, thus, incumbent upon the respondent, as the plaintiff, to allege and
establish that Atty. Aguinaldo had such authority to execute the requisite
verification and certification for and in its behalf. The respondent, however,
failed to do so.
The verification and certificate of non-forum shopping which was
incorporated in the complaint and signed by Atty. Aguinaldo reads:
I, Mario A. Aguinaldo of legal age, Filipino, with office address at Suite 210 Gedisco
Centre, 1564 A. Mabini cor. P. Gil Sts., Ermita, Manila, after having sworn to in
accordance with law hereby deposes and say: THAT -

1. I am the Resident Agent and Legal Counsel of the plaintiff in the above entitled
case and have caused the preparation of the above complaint;

2. I have read the complaint and that all the allegations contained therein are true and
correct based on the records on files;

3. I hereby further certify that I have not commenced any other action or proceeding
involving the same issues in the Supreme Court, the Court of Appeals, or different
divisions thereof, or any other tribunal or agency. If I subsequently learned that a
similar action or proceeding has been filed or is pending before the Supreme Court,
the Court of Appeals, or different divisions thereof, or any tribunal or agency, I will
notify the court, tribunal or agency within five (5) days from such notice/knowledge.

(Sgd.)
MARIO A. AGUINALDO
Affiant

CITY OF MANILA

SUBSCRIBED AND SWORN TO before me this 30th day of August, 1999, affiant
exhibiting to me his Community Tax Certificate No. 00671047 issued on January 7,
1999 at Manila, Philippines.

(Sgd.)
Doc. No. 1005; ATTY. HENRY D. ADASA
Page No. 198; Notary Public
Book No. XXI Until December 31, 2000
Series of 1999. PTR No. 320501 Mla. 1/4/99 [13]

As gleaned from the aforequoted certification, there was no allegation that

Atty. Aguinaldo had been authorized to execute the certificate of non-forum
shopping by the respondents Board of Directors; moreover, no such board
resolution was appended thereto or incorporated therein.
While Atty. Aguinaldo is the resident agent of the respondent in the
Philippines, this does not mean that he is authorized to execute the requisite
certification against forum shopping. Under Section 127, in relation to Section
128 of the Corporation Code, the authority of the resident agent of a foreign
corporation with license to do business in the Philippines is to receive, for and
in behalf of the foreign corporation, services and other legal processes in all
actions and other legal proceedings against such corporation, thus:

SEC. 127. Who may be a resident agent. A resident agent may either be an individual
residing in the Philippines or a domestic corporation lawfully transacting business in
the Philippines: Provided, That in the case of an individual, he must be of good moral
character and of sound financial standing.

SEC. 128. Resident agent; service of process. The Securities and Exchange
Commission shall require as a condition precedent to the issuance of the license to
transact business in the Philippines by any foreign corporation that such corporation
file with the Securities and Exchange Commission a written power of attorney
designating some persons who must be a resident of the Philippines, on whom any
summons and other legal processes may be served in all actions or other legal
proceedings against such corporation, and consenting that service upon such resident
agent shall be admitted and held as valid as if served upon the duly-authorized officers
of the foreign corporation as its home office.
[14]

Under the law, Atty. Aguinaldo was not specifically authorized to execute a
certificate of non-forum shopping as required by Section 5, Rule 7 of the
Rules of Court. This is because while a resident agent may be aware of
actions filed against his principal (a foreign corporation doing business in the
Philippines), such resident may not be aware of actions initiated by its
principal, whether in the Philippines against a domestic corporation or private
individual, or in the country where such corporation was organized and
registered, against a Philippine registered corporation or a Filipino citizen.
The respondent knew that its counsel, Atty. Aguinaldo, as its resident
agent, was not specifically authorized to execute the said certification. It
attempted to show its compliance with the rule subsequent to the filing of its
complaint by submitting, on March 6, 2000, a resolution purporting to have
been approved by its Board of Directors during a teleconference held on June
25, 1999, allegedly with Atty. Aguinaldo and Suk Kyoo Kim in attendance.
However, such attempt of the respondent casts veritable doubt not only on its
claim that such a teleconference was held, but also on the approval by the
Board of Directors of the resolution authorizing Atty. Aguinaldo to execute the
certificate of non-forum shopping.
In its April 12, 2000 Order, the RTC took judicial notice that because of the
onset of modern technology, persons in one location may confer with other
persons in other places, and, based on the said premise, concluded that Suk
Kyoo Kim and Atty. Aguinaldo had a teleconference with the respondents
Board of Directors in South Korea on June 25, 1999. The CA, likewise, gave
credence to the respondents claim that such a teleconference took place, as
contained in the affidavit of Suk Kyoo Kim, as well as Atty. Aguinaldos
certification.
Generally speaking, matters of judicial notice have three material
requisites: (1) the matter must be one of common and general knowledge; (2)
it must be well and authoritatively settled and not doubtful or uncertain; and
(3) it must be known to be within the limits of the jurisdiction of the court. The
principal guide in determining what facts may be assumed to be judicially
known is that of notoriety. Hence, it can be said that judicial notice is limited to
facts evidenced by public records and facts of general notoriety. Moreover, a
[15]

judicially noticed fact must be one not subject to a reasonable dispute in that it
is either: (1) generally known within the territorial jurisdiction of the trial court;
or (2) capable of accurate and ready determination by resorting to sources
whose accuracy cannot reasonably be questionable. [16]

Things of common knowledge, of which courts take judicial matters

coming to the knowledge of men generally in the course of the ordinary
experiences of life, or they may be matters which are generally accepted by
mankind as true and are capable of ready and unquestioned demonstration.
Thus, facts which are universally known, and which may be found in
encyclopedias, dictionaries or other publications, are judicially noticed,
provided, they are of such universal notoriety and so generally understood
that they may be regarded as forming part of the common knowledge of every
person. As the common knowledge of man ranges far and wide, a wide
variety of particular facts have been judicially noticed as being matters of
common knowledge. But a court cannot take judicial notice of any fact which,
in part, is dependent on the existence or non-existence of a fact of which the
court has no constructive knowledge. [17]

In this age of modern technology, the courts may take judicial notice that
business transactions may be made by individuals through teleconferencing.
Teleconferencing is interactive group communication (three or more people in
two or more locations) through an electronic medium. In general terms,
teleconferencing can bring people together under one roof even though they
are separated by hundreds of miles. This type of group communication may
[18]

be used in a number of ways, and have three basic types: (1) video
conferencing - television-like communication augmented with sound; (2)
computer conferencing - printed communication through keyboard terminals,
and (3) audio-conferencing-verbal communication via the telephone with
optional capacity for telewriting or telecopying. [19]
 A teleconference represents a unique alternative to face-to-face (FTF)
meetings. It was first introduced in the 1960s with American Telephone and
Telegraphs Picturephone. At that time, however, no demand existed for the
new technology. Travel costs were reasonable and consumers were unwilling
to pay the monthly service charge for using the picturephone, which was
regarded as more of a novelty than as an actual means for everyday
communication. In time, people found it advantageous to hold
[20]

teleconferencing in the course of business and corporate governance,

because of the money saved, among other advantages include:

1. People (including outside guest speakers) who wouldnt normally attend a distant
FTF meeting can participate.

2. Follow-up to earlier meetings can be done with relative ease and little expense.

3. Socializing is minimal compared to an FTF meeting; therefore, meetings are shorter

and more oriented to the primary purpose of the meeting.

4. Some routine meetings are more effective since one can audio-conference from any
location equipped with a telephone.

5. Communication between the home office and field staffs is maximized.

6. Severe climate and/or unreliable transportation may necessitate teleconferencing.

7. Participants are generally better prepared than for FTF meetings.

8. It is particularly satisfactory for simple problem-solving, information exchange, and

procedural tasks.

9. Group members participate more equally in well-moderated teleconferences than an

FTF meeting. [21]

On the other hand, other private corporations opt not to hold

teleconferences because of the following disadvantages:

1. Technical failures with equipment, including connections that arent made.

2. Unsatisfactory for complex interpersonal communication, such as negotiation or

bargaining.

3. Impersonal, less easy to create an atmosphere of group rapport.

4. Lack of participant familiarity with the equipment, the medium itself, and meeting
skills.

5. Acoustical problems within the teleconferencing rooms.

6. Difficulty in determining participant speaking order; frequently one person

monopolizes the meeting.

7. Greater participant preparation time needed.

8. Informal, one-to-one, social interaction not possible. [22]

Indeed, teleconferencing can only facilitate the linking of people; it does

not alter the complexity of group communication. Although it may be easier to
communicate via teleconferencing, it may also be easier to miscommunicate.
Teleconferencing cannot satisfy the individual needs of every type of
meeting. [23]

In the Philippines, teleconferencing and videoconferencing of members of

board of directors of private corporations is a reality, in light of Republic Act
No. 8792. The Securities and Exchange Commission issued SEC
Memorandum Circular No. 15, on November 30, 2001, providing the
guidelines to be complied with related to such conferences. Thus, the Court
[24]

agrees with the RTC that persons in the Philippines may have a
teleconference with a group of persons in South Korea relating to business
transactions or corporate governance.
Even given the possibility that Atty. Aguinaldo and Suk Kyoo Kim
participated in a teleconference along with the respondents Board of
Directors, the Court is not convinced that one was conducted; even if there
had been one, the Court is not inclined to believe that a board resolution was
duly passed specifically authorizing Atty. Aguinaldo to file the complaint and
execute the required certification against forum shopping.
The records show that the petitioner filed a motion to dismiss the
complaint on the ground that the respondent failed to comply with Section 5,
Rule 7 of the Rules of Court. The respondent opposed the motion on
December 1, 1999, on its contention that Atty. Aguinaldo, its resident agent,
was duly authorized to sue in its behalf. The respondent, however, failed to
establish its claim that Atty. Aguinaldo was its resident agent in the
Philippines. Even the identification card of Atty. Aguinaldo which the
[25]

respondent appended to its pleading merely showed that he is the company

lawyer of the respondents Manila Regional Office.
 The respondent, through Atty. Aguinaldo, announced the holding of the
teleconference only during the hearing of January 28, 2000; Atty. Aguinaldo
then prayed for ten days, or until February 8, 2000, within which to submit the
board resolution purportedly authorizing him to file the complaint and execute
the required certification against forum shopping. The court granted the
motion. The respondent, however, failed to comply, and instead prayed for
[26]

15 more days to submit the said resolution, contending that it was with its
main office in Korea. The court granted the motion per its Order dated [27]

February 11, 2000. The respondent again prayed for an extension within
which to submit the said resolution, until March 6, 2000. It was on the said
[28]

date that the respondent submitted an affidavit of its general manager Suk
Kyoo Kim, stating, inter alia, that he and Atty. Aguinaldo attended the said
teleconference on June 25, 1999, where the Board of Directors supposedly
approved the following resolution:

RESOLVED, that Mario A. Aguinaldo and his law firm M.A. Aguinaldo &
Associates or any of its lawyers are hereby appointed and authorized to take with
whatever legal action necessary to effect the collection of the unpaid account of
Expert Travel & Tours. They are hereby specifically authorized to prosecute, litigate,
defend, sign and execute any document or paper necessary to the filing and
prosecution of said claim in Court, attend the Pre-trial Proceedings and enter into a
compromise agreement relative to the above-mentioned claim. [29]

But then, in the same affidavit, Suk Kyoo Kim declared that the respondent
do[es] not keep a written copy of the aforesaid Resolution because no records
of board resolutions approved during teleconferences were kept. This belied
the respondents earlier allegation in its February 10, 2000 motion for
extension of time to submit the questioned resolution that it was in the custody
of its main office in Korea. The respondent gave the trial court the impression
that it needed time to secure a copy of the resolution kept in Korea, only to
allege later (via the affidavit of Suk Kyoo Kim) that it had no such written copy.
Moreover, Suk Kyoo Kim stated in his affidavit that the resolution was
embodied in the Secretarys/Resident Agents Certificate signed by Atty.
Aguinaldo. However, no such resolution was appended to the said certificate.
The respondents allegation that its board of directors conducted a
teleconference on June 25, 1999 and approved the said resolution (with Atty.
Aguinaldo in attendance) is incredible, given the additional fact that no such
allegation was made in the complaint. If the resolution had indeed been
approved on June 25, 1999, long before the complaint was filed, the
respondent should have incorporated it in its complaint, or at least appended
a copy thereof. The respondent failed to do so. It was only on January 28,
2000 that the respondent claimed, for the first time, that there was such a
meeting of the Board of Directors held on June 25, 1999; it even represented
to the Court that a copy of its resolution was with its main office in Korea, only
to allege later that no written copy existed. It was only on March 6, 2000 that
the respondent alleged, for the first time, that the meeting of the Board of
Directors where the resolution was approved was held via teleconference.
Worse still, it appears that as early as January 10, 1999, Atty. Aguinaldo
had signed a Secretarys/Resident Agents Certificate alleging that the board of
directors held a teleconference on June 25, 1999. No such certificate was
appended to the complaint, which was filed on September 6, 1999. More
importantly, the respondent did not explain why the said certificate was signed
by Atty. Aguinaldo as early as January 9, 1999, and yet was notarized one
year later (on January 10, 2000); it also did not explain its failure to append
the said certificate to the complaint, as well as to its Compliance dated March
6, 2000. It was only on January 26, 2001 when the respondent filed its
comment in the CA that it submitted the Secretarys/Resident Agents
Certificate dated January 10, 2000.
[30]

The Court is, thus, more inclined to believe that the alleged teleconference
on June 25, 1999 never took place, and that the resolution allegedly approved
by the respondents Board of Directors during the said teleconference was a
mere concoction purposefully foisted on the RTC, the CA and this Court, to
avert the dismissal of its complaint against the petitioner.
IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The
Decision of the Court of Appeals in CA-G.R. SP No. 61000 is REVERSED
and SET ASIDE. The Regional Trial Court of Manila is hereby ORDERED to
dismiss, without prejudice, the complaint of the respondent.
SO ORDERED.
Puno, Acting C.J., (Chairman), Austria-Martinez, and Chico-Nazario,
JJ., concur.
Tinga, J., out of the country.

2) PEOPLE VS TUNDAG

EN BANC

[G.R. Nos. 135695-96. October 12, 2000]

PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. TOMAS
TUNDAG, accused-appellant.

DECISION
QUISUMBING, J.:

For automatic review is the judgment of the Regional Trial Court of

Mandaue City, Branch 28, in Criminal Cases Nos.DU-6186 and DU-6203,
finding appellant Tomas Tundag guilty of two counts of incestuous rape and
sentencing him to death twice.
On November 18, 1997, private complainant Mary Ann Tundag filed with
the Mandaue City Prosecutors Office two separate complaints for incestuous
rape. The first complaint, docketed as Criminal Case No. DU-6186, alleged:

That on or about the 5th day of September, 1997, in the City of Mandaue, Philippines,
and within the jurisdiction of this Honorable Court, the above-named accused, being
the father of complainant MARY ANN TUNDAG, who is a 13-year-old girl, with
deliberate intent, did then and there wilfully, unlawfully and feloniously have sexual
intercourse with the said offended party against the latters will.

CONTRARY TO LAW.[1]

The other, docketed as Criminal Case No. DU-6203, averred:

That on or about the 7th day of November, 1997, in the City of Mandaue, Philippines,
and within the jurisdiction of this Honorable Court, the above-named accused, being
the father of complainant MARY ANN TUNDAG, who is a 13-year-old girl, with
deliberate intent, did then and there wilfully, unlawfully and feloniously have sexual
intercourse with the said offended party against the latters will.

CONTRARY TO LAW.[2]

Upon arraignment appellant, assisted by counsel de parte, pleaded Not

Guilty to the charges.
The two cases were consolidated and a joint trial ensued.
Appellants defense was bare denial. He claimed that private complainant
had fabricated the rape charges against him since he and his daughter, had a
quarrel when he accordingly reprimanded her for going out whenever he was
not at home.[3]
Appellant did not present any witness to reinforce his testimony.
 On August 31, 1998, the trial court rendered its decision, thus:

WHEREFORE, foregoing premises considered, Joint Judgment is hereby rendered, to

wit:

I. In Criminal Case No. DU-6186 -

a) Finding the herein accused TOMAS TUNDAG guilty beyond reasonable doubt for
the crime of rape, said accused is hereby sentenced to the penalty of death;

b) To indemnify the offended party Mary Ann Tundag the following amounts:

(1) P50,000.00 by reason of the commission of the offense of rape upon her; and

(2) Another P50,000.00 as moral and exemplary damages under Article 2219 in
relation to Articles 2217 and 2230 of the New Civil Code for the pain and moral
shock suffered by her and for the commission of the crime of rape with one qualifying
aggravating circumstance; and

c) To pay the costs.

II. In Criminal Case No. DU-6203 -

a) Finding the herein accused TOMAS TUNDAG guilty beyond reasonable doubt for
the crime of rape, said accused is hereby sentenced to the penalty of death;

b) To indemnify the offended party Mary Ann Tundag the following amounts:

(1) P50,000.00 by reason of the commission of the offense of rape upon her; and

(2) Another P50,000.00 as moral and exemplary damages under Article 2219 in
relation to Articles 2217 and 2230 of the New Civil Code for the pain and moral
shock suffered by her and for the commission of the crime of rape with one qualifying
aggravating circumstance; and

(3) To pay the costs.

SO ORDERED.[4]

In its judgment, the court below gave credence to complainants version of

what accused did to her.
The evidence for the prosecution as adduced during the trial on the merits clearly
shows that private complainant Mary Ann Tundag is a 13 year old girl who does not
know how to read and write and has an IQ of 76% which is a very low general mental
ability and was living with her father, the herein accused, at Galaxy Compound,
Mandaue City.

xxx

That on September 5, 1997 at about 10:00 oclock in the evening, she was in the house
together with her father. But before she went to sleep, her father was already lying
down on the mat while herself (sic) just lied down at his head side which was not
necessarily beside him. However, when she was already sleeping, she noticed that her
father who was already undressed was beside her and was embracing her. Then, he
undressed her which she resisted but her father used a knife and told her that he would
kill her if she shouts and after that, he inserted his penis into her vagina and told her
not to shout or tell anyone. In effect, his penis penetrated her genital, which made her
vagina bleed and was very painful.

That when the penis of her father was already inserted in her vagina, her father was all
the time asking by saying (sic) : Does it feel good? And at the same time, he was
laughing and further, told her that a woman who does not marry can never enter
heaven and he got angry with her when she contradicted his statement.

That while the penis of her father was inside her vagina and (he) was humping over
her, she felt intense pain that she cried and told him to pull it out but did not accede
and in fact, said: Why will I pull it out when it feels so good(?)

That after removing his penis from her vagina and after telling her that she could not
go to heaven if she did not get married, her father just stayed there and continued
smoking while she cried.

That in the evening of November 7, 1997, she was at home washing the dishes while
her father was just smoking and squatting. That after she finished washing the dishes,
she lied (sic) down to sleep when her father embraced her and since she does not like
what he did to her, she placed a stool between them but he just brushed it aside and
laid down with her and was able to take her womanhood again by using a very sharp
knife which he was holding and was pointing it at the right side of her neck which
made her afraid.

That in the early morning of the following day, she left her fathers place and went to
her neighbor by the name of Bebie Cabahug and told her what had happened to her,
who, in turn, advised her to report the matter to the police, which she did and
accompanied by the policemen, she went to the Southern Islands Hospital where she
was examined and after her medical examination, she was brought back by the police
and was investigated by them.[5]

Appellants claim that the complainants charges were manufactured did not
impress the trial court, which found him twice guilty of rape. Now before us,
appellant assails his double conviction, simply contending that:[6]

THE TRIAL COURT HAS COMMITTED AN ERROR IN NOT ABSOLVING THE

ACCUSED-APPELLANT OF THE CRIMES CHARGED IN THE
INFORMATIONS DESPITE THE PRESENCE OF REASONABLE DOUBT TO
EXCULPATE HIM OF THE SAME.

Appellant flatly denies that the incidents complained of ever took place. He
contends that on September 5, 1997, he was working as a watch repairman
near Gals Bakery in Mandaue City Market and went home tired and sleepy at
around 11:00 oclock that evening. On November 7, 1997, he claims he was at
work. In his brief, he argues that it was impossible for him to have raped his
daughter because when the incidents allegedly transpired, he went to work
and naturally, being exhausted and tired, it is impossible for him to do such
wrongdoings.[7]
The Office of the Solicitor General disagrees with appellant and urges the
Court to affirm the trial courts decision, with the recommendation that the
award of damages and indemnity ex delicto be modified to conform to
prevailing jurisprudence.
Considering the gravity of the offense charged as a heinous crime and the
irreversibility of the penalty of death imposed in each of these cases before
us, the Court leaves no stone unturned in its review of the records, including
the evidence presented by both the prosecution and the defense. Conviction
must rest on nothing less than a moral certainty of guilt.[8] But here we find no
room to disturb the trial courts judgment concerning appellants guilt, because
his defense is utterly untenable.
Appellants defense of alibi and denial is negative and self-serving. It
hardly counts as a worthy and weighty ground for exculpation in a trial
involving his freedom and his life. Against the testimony of private complainant
who testified on affirmative matters,[9] such defense is not only trite but
pathetic. Denial is an inherently weak defense, which becomes even weaker
in the face of the positive identification by the victim of the appellant as the
violator of her honor.[10] Indeed, we find that private complainant was
unequivocal in charging appellant with ravishing her. The victims account of
the rapes complained of was straightforward, detailed, and consistent.[11] Her
testimony never wavered even after it had been explained to her that her
father could be meted out the death penalty if found guilty by the court.[12]
In a prosecution for rape, the complainants credibility is the single most
important issue.[13] The determination of the credibility of witnesses is primarily
the function of the trial court. The rationale for this is that the trial court has the
advantage of having observed at first hand the demeanor of the witnesses on
the stand and, therefore, is in a better position to form an accurate impression
and conclusion.[14] Absent any showing that certain facts of value have clearly
been overlooked, which if considered could affect the result of the case, or
that the trial courts finding are clearly arbitrary, the conclusions reached by the
court of origin must be respected and the judgment rendered affirmed.[15]
Moreover, we note here that private complainants testimony is
corroborated by medical findings that lacerations were present in her
hymen. The examination conducted by Dr. Bessie Acebes upon the private
complainant yielded the following results:

Genitalia: grossly female

Pubic Hairs: scanty

Labia Majora: coaptated

Labia Minora: do

Fourchette: U-shaped

Vestibule: pinkish

Hymen: + old healed laceration at 3 and 9 oclock position(s).

Orifice: admits 2 fingers with ease

Vagina:

Walls: pinkish

Ruganities: prominent

Uterus: small

Cervix: closed
Discharges: Mucoid, minimal

Smears:

Conclusions: sperm identification (-)

Gram staining of vaginal disc.[16]

Dr. Acebes testified that her findings of healed hymenal lacerations in the
complainants private parts meant a history of sexual congress on her
part.[17] According to her, the lacerations may have been caused by the entry of
an erect male organ into complainants genitals. The examining physician
likewise pointed out that previous coitus may be inferred from complainants U-
shaped fourchette since the fourchette of a female who has not yet
experienced sexual intercourse is V-shaped.[18] While Dr. Acebes conceded
under cross-examination, that the existence of the datum U-shape(d)
fourchette does not conclusively and absolutely mean that there was sexual
intercourse or contact because it can be caused by masturbation of fingers or
other things,[19] nonetheless, the presence of the hymenal lacerations tends to
support private complainants claim that she was raped by appellant.
Appellant next contends that his daughter pressed the rape charges
against him because she had quarreled with him after he had castigated her
for misbehavior. He stresses that the prosecution did not rebut his testimony
regarding his quarrel or misunderstanding with private complainant. He urges
us to consider the charges filed against him as the result of his frequent
castigation of her delinquent behavior.[20]
Such allegation of a family feud, however, does not explain the charges
away. Filing a case for incestuous rape is of such a nature that a daughters
accusation must be taken seriously. It goes against human experience that a
girl would fabricate a story which would drag herself as well as her family to a
lifetime of dishonor, unless that is the truth, for it is her natural instinct to
protect her honor.[21] More so, where her charges could mean the death of her
own father, as in this case.
Appellant likewise points out that it was very unlikely for him to have
committed the crimes imputed to him considering that he and his wife had ten
children to attend to and care for. This argument, however, is impertinent and
immaterial. Appellant was estranged from his wife, and private complainant
was the only child who lived with him.[22] As pointed out by the Solicitor
General, appellant was thus free to do as he wished to satisfy his bestial lust
on his daughter.[23]
 Nor does appellants assertion that private complainant has some
psychological problems and a low IQ of 76 in any way favor his
defense. These matters did not affect the credibility of her testimony that
appellant raped her twice. We note that the victim understood the
consequences of prosecuting the rape charges against her own father, as
shown by the following testimony of the victim on cross-examination:
Q : Were you informed that if, and when your father will be found guilty, your father will be
sentenced to death?
A : Yes.
Q : Until now you wanted that your father will be sentenced by death?
A (Witness nodding.)

xxx
Q : I will inform you, Miss Witness, that you have filed two cases against your father and in
case your father would be found guilty, two death sentences will be imposed against
him?
A: Yes.
Q: With that information, do you still want this case would proceed?
A: I want this to proceed.[24]
Indeed, appellant is guilty. But is the penalty of death imposed on him
correct?
Section 335 of the Revised Penal Code, as amended by Section 11 of
R.A. No. 7659,[25] penalizes rape of a minor daughter by her father as qualified
rape[26] and a heinous crime. In proving such felony, the prosecution must
allege and prove the elements of rape: (1) sexual congress; (2) with woman;
(3) by force or without her consent[27]and in order to warrant the imposition of
capital punishment, the additional elements that: (4) the victim is under 18
years of age at the time of the rape and (5) the offender is a parent of the
victim.[28]
In this case, it was sufficiently alleged and proven that the offender was
the victims father.[29] But the victims age was not properly and sufficiently
proved beyond reasonable doubt. She testified that she was thirteen years old
at the time of the rapes. However, she admitted that she did not know exactly
when she was born because her mother did not tell her. She further said that
her birth certificate was likewise with her mother. In her own words, the victim
testified - [30]
COURT TO WITNESS
Q: When were you born?
 A: I do not know.
Q: You do not know your birthday?
A: My mama did not tell me exactly when I asked her.
COURT: Proceed.
FISCAL PEREZ: For our failure to secure the Birth Certificate Your Honor, may we just
request for judicial notice that the victim here is below 18 years old.
ATTY. SURALTA: Admitted.

Judicial notice is the cognizance of certain facts which judges may

properly take and act on without proof because they already know
them.[31] Under the Rules of Court, judicial notice may either be mandatory or
discretionary. Section 1 of Rule 129 of the Rules of Court provides when court
shall take mandatory judicial notice of facts -

SECTION 1. Judicial notice, when mandatory. - A court shall take judicial notice
without the introduction of evidence, of the existence and territorial extent of states,
their political history, forms of government and symbols of nationality, the law of
nations, the admiralty and maritime courts of the world and their seals, the political
constitution and history of the Philippines, the official acts of the legislative, executive
and judicial departments of the Philippines, the laws of nature, the measure of time,
and the geographical divisions.

Section 2 of Rule 129 enumerates the instances when courts may take
discretionary judicial notice of facts -

SEC. 2. Judicial notice, when discretionary. - A court may take judicial notice of
matters which are of public knowledge, or are capable of unquestionable
demonstration or ought to be known to judges because of their judicial functions.

Thus, it can be considered of public knowledge and judicially noticed that

the scene of the rape is not always nor necessarily isolated or secluded for
lust is no respecter of time or place. The offense of rape can and has been
committed in places where people congregate, e.g. inside a house where
there are occupants, a five (5) meter room with five (5) people inside, or even
in the same room which the victim is sharing with the accuseds sister.[32]
The Court has likewise taken judicial notice of the Filipinas inbred modesty
and shyness and her antipathy in publicly airing acts which blemish her honor
and virtue.[33]
On the other hand, matters which are capable of unquestionable
demonstration pertain to fields of professional and scientific knowledge. For
example, in People v. Alicante,[34] the trial court took judicial notice of the
clinical records of the attending physicians concerning the birth of twin baby
boys as premature since one of the alleged rapes had occurred 6 to 7 months
earlier.
As to matters which ought to be known to judges because of their judicial
functions, an example would be facts which are ascertainable from the record
of court proceedings, e.g. as to when court notices were received by a party.
With respect to other matters not falling within the mandatory or
discretionary judicial notice, the court can take judicial notice of a fact
pursuant to the procedure in Section 3 of Rule 129 of the Rules of Court which
requires that -

SEC. 3. Judicial notice, when hearing necessary. - During the trial, the court, on its
own initiative, or on request of a party, may announce its intention to take judicial
notice of any matter and allow the parties to be heard thereon.

After the trial, and before judgment or on appeal, the proper court, on its own
initiative or on request of a party, may take judicial notice of any matter and allow the
parties to be heard thereon if such matter is decisive of a material issue in the case.

In this case, judicial notice of the age of the victim is improper, despite the
defense counsels admission, thereof acceding to the prosecutions motion. As
required by Section 3 of Rule 129, as to any other matters such as age, a
hearing is required before courts can take judicial notice of such
fact. Generally, the age of the victim may be proven by the birth or baptismal
certificate of the victim, or in the absence thereof, upon showing that said
documents were lost or destroyed, by other documentary or oral evidence
sufficient for the purpose.
Thus, in People v. Rebancos, 172 SCRA 426 (1989), the victim was below
12 and we found that the rape committed was statutory rape. The mother
testified that her daughter was born on October 26, 1974, and so was only 9
years old at the time of the rape on February 12, 1984. Although no birth
certificate was presented because the victims birth had allegedly not been
registered, her baptismal certificate was duly presented. Hence, we ruled that
the mothers testimony coupled with the presentation of the baptismal
certificate was sufficient to establish that the victim was below 12 at the time
of the rape.
However, in People v. Vargas, 257 SCRA 603 (1996), we ruled that
appellant can only be convicted of simple rape, and not statutory rape,
because of failure of the prosecution to prove the minority of the victim, who
was allegedly 10 years old at the time of the rape. The prosecution failed to
present either the birth or baptismal certificate of the victim. Also there was no
showing that the said documents were lost or destroyed to justify their non-
presentation. We held that testimony of the victim and her aunt were hearsay,
and that it was not correct for the trial court to judge the age of the victim by
her appearance.
In several recent cases, we have emphasized the need for independent
proof of the age of the victim, aside from testimonial evidence from the victim
or her relatives. In People v. Javier,[35] we stressed that the prosecution must
present independent proof of the age of the victim, even though it is not
contested by the defense. The minority of the victim must be proved with
equal certainty and clearness as the crime itself. In People v. Cula,[36] we
reiterated that it is the burden of the prosecution to prove with certainty the
fact that the victim was below 18 when the rape was committed in order to
justify the imposition of the death penalty. Since the record of the case was
bereft of any independentevidence thereon, such as the victims duly certified
Certificate of Live Birth, accurately showing private complainants age,
appellant could not be convicted of rape in its qualified form. In People v.
Veloso,[37] the victim was alleged to have been only 9 years of age at the time
of the rape. It held that the trial court was correct when it ruled that the
prosecution failed to prove the victims age other than through the testimony of
her father and herself.
Considering the statutory requirement in Section 335 of the Revised Penal
Code as amended by R.A. No. 7659 and R.A. No. 8353, we reiterate here
what the Court has held in Javier without any dissent, that the failure to
sufficiently establish victims age by independent proof is a bar to conviction
for rape in its qualified form. For, in the words of Melo, J., independent proof
of the actual age of a rape victim becomes vital and essential so as to remove
an iota of doubt that the case falls under the qualifying circumstances for the
imposition of the death penalty set by the law.
In this case, the first rape was committed on September 5, 1997 and is
therefore governed by the death penalty law, R.A. 7659. The penalty for the
crime of simple rape or rape in its unqualified form under Art. 335 of the
Revised Penal Code, as amended by Sec. 11 of R.A. 7659, is reclusion
perpetua. The second rape was committed on November 7, 1997, after the
effectivity of R.A. 8353, also known as the Anti-Rape Law of 1997, which took
effect on October 22, 1997. The penalty for rape in its unqualified form
remains the same.
 As to civil indemnity, the trial court correctly awarded P50,000.00 for each
count of rape as civil indemnity. However, the award of another P50,000.00 as
moral and exemplary damages under Article 2219 in relation to Articles 2217
and 2230 of the Civil Code for each count is imprecise. In rape cases, the
prevailing jurisprudence permits the award of moral damages without need for
pleading or proof as to the basis thereof.[38] Thus, pursuant to current
jurisprudence, we award the amount of P50,000.00 as moral damages for
each count of rape.
The award of exemplary damages separately is also in order, but on a
different basis and for a different amount. Appellant being the father of the
victim, a fact duly proved during trial, we find that the alternative circumstance
of relationship should be appreciated here as an aggravating
circumstance. Under Article 2230 of the New Civil Code, exemplary damages
may be imposed when the crime was committed with one or more aggravating
circumstances. Hence, we find an award of exemplary damages in the
amount of P25,000.00 proper. Note that generally, in rape cases imposing the
death penalty, the rule is that relationship is no longer appreciated as a
generic aggravating circumstance in view of the amendments introduced by
R.A. Nos. 7659 and 8353. The father-daughter relationship has been treated
by Congress in the nature of a special circumstance which makes the
imposition of the death penalty mandatory.[39] However, in this case, the
special qualifying circumstance of relationship was proved but not the minority
of the victim, taking the case out of the ambit of mandatory death
sentence. Hence, relationship can be appreciated as a generic aggravating
circumstance in this instance so that exemplary damages are called for. In
rapes committed by fathers on their own daughters, exemplary damages may
be imposed to deter other fathers with perverse tendency or aberrant sexual
behavior from sexually abusing their own daughters.[40]
WHEREFORE, the judgment of the Regional Trial Court of Mandaue City,
Branch 28, in Criminal Case Nos. DU-6186 and DU-6203, is hereby
MODIFIED as follows: appellant Tomas Tundag is found guilty of two (2)
counts of simple rape; and for each count, sentenced to reclusion
perpetua and ordered to pay the victim the amount of P50,000.00 as
indemnity, P50,000.00 as moral damages, and P25,000.00 as exemplary
damages.
No pronouncement as to costs.
SO ORDERED.
 Davide, Jr., C.J., Bellosillo, Melo, Puno, Vitug, Kapunan, Mendoza,
Panganiban, Purisima, Pardo, Buena, Gonzaga-Reyes, Ynares-
Santiago, and De Leon, Jr., JJ., concur.

3) STATE PROSECUTORS VS MURO

FACTS:

The state prosecutors who are members of the DOJ Panel of Prosecution filed a complaint
against respondent Judge Muro on the ground of ignorance of the law, grave misconduct and
violation of the provisions in the Code of Judicial Conduct. The case at bar involves the
prosecution of the 11 charges against Imelda Marcos in violation of the Central Bank Foreign
Exchange Restriction in the Central BankCircular 960. The respondent judge dismissed all 11
cases solely on the basis of the report published from the 2 newspapers, which the judge
believes to be reputable and of national circulation, that the Pres. of the Philippines lifted all
foreign exchange restrictions. The respondent’s decision was founded on his belief that the
reported announcement of the Executive Department in the newspaper in effect repealed the
CB 960 and thereby divested the court of its jurisdiction to further hear the pending case thus
motu propio dismissed the case. He further contends that the announcement of the President as
published in the newspaper has made such fact a public knowledge that is sufficient for the
judge to take judicial notice which is discretionary on his part.
The complainants contend that the respondent judge erred in taking judicial notice on matters
he purported to be a public knowledge based merely on the account of the newspaper
publication that the Pres. has lifted the foreign exchange restriction. It was also an act of
inexcusable ignorant of the law not to accord due process to the prosecutors who were already
at the stage of presenting evidence thereby depriving the government the right to be heard. The
judge also exercised grave abuse of discretion by taking judicial notice on the published
statement of the Pres. In the newspaper which is a matter that has not yet been officially in force
and effect of the law.

ISSUE:

Whether or not the respondent judge committed grave abuse of discretion in taking judicial
notice on the statement of the president lifting the foreign exchange restriction published in the
newspaper as basis for dismissing the case?

HELD:

The Supreme Court held the respondent judge guilty for gross ignorance of the law. It cannot
comprehend his assertion that there is no need to wait for the publication of the circular no.
1353 which is the basis of the President’s announcement in the newspaper, believing that the
public announcement is absolute and without qualification and is immediately effective and such
matter becomes a public knowledge which he can take a judicial notice upon in his discretion. It
is a mandatory requirement that a new law should be published for 15 days in a newspaper of
general circulation before its effectivity. When the President’s statement was published in the
newspaper, the respondent admitted of not having seen the official text of CB circular 1353 thus
it was premature for him to take judicial notice on this matter which is merely based on his
personal knowledge and is not based on the public knowledge that the law requires for the court
to take judicial notice of.

For the court to take judicial notice, three material requisites should be present:
(1) the matter must be one of common and general knowledge;
(2) it must be well and authoritatively settled and not doubtful or uncertain;
(3) it must be known to be within the limits of the jurisdiction of the court.

The fact that should be assumed as judicially known must be on such notoriety that such fact
cannot be disputed. Judicial notice is not judicial knowledge where the personal knowledge of
the judge does not amount to the judicial notice of the court. The common knowledge
contemplated by the law where the court can take judicial notice must come from the knowledge
of men generally in the course of ordinary experiences that are accepted as true and one that
involves unquestioned demonstration. The court ruled that the information he obtained from the
newspaper is one of hearsay evidence. The judge erred in taking cognizant of a law that was
not yet in force and ordered the dismissal of the case without giving the prosecution the right to
be heard and of due process. The court ordered for the dismissal of the judge from service for
gross ignorance of the law and grave abuse of discretion for dismissing the case motu proprio
and for erring in exercising his discretion to take judicial notice on matters that are hearsay and
groundless with a reminder the power to take judicial notice is to be exercised by the courts with
caution at all times.

4) LANDBANK VS WYCOCO

 Sec. 2. Discretionary Judicial Notice

Landbank vs. Wycoco

Facts:

Feliciano F. Wycoco is the registered owner of a 94.1690 hectare unirrigated and untenanted
rice land, covered by Transfer Certificate of Title No. NT-206422 and situated in the Barrio of
San Juan, Licab, Nueva Ecija. Pursuant to the CARP, Wycoco voluntarily offered to sell his land
to the DAR for P14.9 million. The evidence presented by Wycoco in support of his claim were
the following: (1) Transfer Certificate of Title No. NT-206422; (2) Notice of Land Valuation; and
(3) letter dated July 10, 1992 rejecting the counter-offer of LBP and DAR. However, the offered
price of the DAR is only P2,280,159.82, thus, he rejected the offer. He then filed a case before
the RTC for the determination of just compensation. The RTC ruled in his favor. It ruled that
there is no need to present evidence in support of the land valuation inasmuch as it is of public
knowledge that the prevailing market value of agricultural lands sold in Licab, Nueva Ecija is
from P135,000.00 to 150,000.00 per hectare. The court thus took judicial notice thereof and
fixed the compensation for the entire 94.1690 hectare land at P142,500.00 per hectare or a
total of P13,428,082.00.

Issue:

WON the just compensation determined by the RTC was valid and within its jurisdiction.

Ruling:

The Supreme Court ruled in the negative.

Sec. 3. Judicial Notice, When Hearing Necessary. During the trial, the court, on its own initiative,
or on request of a party, may announce its intention to take judicial notice of any matter and
allow the parties to be heard thereon.

After trial and before judgment or on appeal, the proper court, on its own initiative, or on
request of a party, may take judicial notice of any matter and allow the parties to be heard
thereon if such matter is decisive of a material issue in the case.

Inasmuch as the valuation of the property of Wycoco is the very issue in the case at bar,
the trial court should have allowed the parties to present evidence thereon instead of
practically assuming a valuation without basis. While market value may be one of the bases of
determining just compensation, the same cannot be arbitrarily arrived at without considering
the factors to be appreciated in arriving at the fair market value of the property e.g., the cost of
acquisition, the current value of like properties, its size, shape, location, as well as the tax
declarations thereon. Since these factors were not considered, a remand of the case for
determination of just compensation is necessary. The power to take judicial notice is to be
exercised by courts with caution especially where the case involves a vast tract of land. Care
must be taken that the requisite notoriety exists; and every reasonable doubt on the subject
should be promptly resolved in the negative. To say that a court will take judicial notice of a fact
is merely another way of saying that the usual form of evidence will be dispensed with if
knowledge of the fact can be otherwise acquired. This is because the court assumes that the
matter is so notorious that it will not be disputed. But judicial notice is not judicial knowledge.
The mere personal knowledge of the judge is not the judicial knowledge of the court, and he is
not authorized to make his individual knowledge of a fact, not generally or professionally
known, the basis of his action.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC
A.M. No. RTJ-92-876 September 19, 1994

STATE PROSECUTORS, complainants,

vs.
JUDGE MANUEL T. MURO, Regional Trial Court, Branch 54, Manila, respondent.

PER CURIAM:

In assaying the requisite norms for qualifications and eminence of a magistrate, legal authorities
place a premium on how he has complied with his continuing duty to know the law. A quality thus
considered essential to the judicial character is that of "a man of learning who spends tirelessly the
weary hours after midnight acquainting himself with the great body of traditions and the learning of
the law; is profoundly learned in all the learning of the law; and knows how to use that learning." 1

Obviously, it is the primary duty of a judge, which he owes to the public and to the legal profession,
to know the very law he is supposed to apply to a given controversy. He is called upon to exhibit
more than just a cursory acquaintance with the statutes and procedural rules. Party litigants will have
great faith in the administration of justice if judges cannot justly be accused of apparent deficiency in
their grasp of the legal principles. For, service in the judiciary means a continuous study and
research on the law from beginning to end. 2

In a letter-complaint 3 dated August 19, 1992, respondent Judge Manuel T. Muro of the Regional
Trial Court (RTC) of Manila, Branch 54, was charged by State Prosecutors Nilo C. Mariano, George
C. Dee and Paterno V. Tac-an with ignorance of the law, grave misconduct and violations of Rules
2.01, 3.01 and 3.02 of the Code of Judicial Conduct, committed as follows:

1. That on August 13, 1992, respondent judge issued an Order dismissing eleven
(11) cases (docketed as Crim. Cases Nos. 92-101959 to 92- 101969, inclusive) filed
by the undersigned complainant prosecutors (members of the DOJ Panel of
Prosecutors) against the accused Mrs. Imelda Romualdez Marcos, for Violation of
Central Bank Foreign Exchange Restrictions, as consolidated in CB Circular No. 960,
in relation to the penal provisions of Sec. 34 of R.A. 265, as amended, . . .;

2. That respondent Judge issued his Order solely on the basis of newspaper reports
(August 11, 1992 issues of the Philippine Daily Inquirer and the Daily Globe)
concerning the announcement on August 10, 1992 by the President of the
Philippines of the lifting by the government of all foreign exchange restrictions and
the arrival at such decision by the Monetary Board as per statement of Central Bank
Governor Jose Cuisia;

3. That claiming that the reported announcement of the Executive Department on the
lifting of foreign exchange restrictions by two newspapers which are reputable and of
national circulation had the effect of repealing Central Bank Circular No. 960, as
allegedly supported by Supreme Court decisions . . ., the Court contended that it was
deprived of jurisdiction, and, therefore, motu, prop(r)io had to dismiss all the eleven
cases aforementioned "for not to do so opens this Court to charges of trying cases
over which it has no more jurisdiction;"
 4. That in dismissing aforecited cases on August 13, 1992 on the basis of a Central
Bank Circular or Monetary Board Resolution which as of date hereof, has not even
been officially issued, and basing his Order/decision on a mere newspaper account
of the advance announcement made by the President of the said fact of lifting or
liberalizing foreign exchange controls, respondent judge acted prematurely and in
indecent haste, as he had no way of determining the full intent of the new CB
Circular or Monetary Board resolution, and whether the same provided for exception,
as in the case of persons who had pending criminal cases before the courts for
violations of Central Bank Circulars and/or regulations previously issued on the
matter;

5. That respondent Judge's arrogant and cavalier posture in taking judicial notice
purportedly as a matter of public knowledge a mere newspaper account that the
President had announced the lifting of foreign exchange restrictions as basis for his
assailed order of dismissal is highly irregular, erroneous and misplaced. For the
respondent judge to take judicial notice thereof even before it is officially released by
the Central Bank and its full text published as required by law to be effective shows
his precipitate action in utter disregard of the fundamental precept of due process
which the People is also entitled to and exposes his gross ignorance of the law,
thereby tarnishing public confidence in the integrity of the judiciary. How can the
Honorable Judge take judicial notice of something which has not yet come into force
and the contents, shape and tenor of which have not yet been published and
ascertained to be the basis of judicial action? The Honorable Judge had miserably
failed to "endeavor diligently to ascertain the facts" in the case at bar contrary to Rule
3.02 of the Code of Judicial Conduct constituting Grave Misconduct;

6. That respondent Judge did not even ha(ve) the prudence of requiring first the
comment of the prosecution on the effect of aforesaid Central Bank
Circular/Monetary Board resolution on the pending cases before dismissing the
same, thereby denying the Government of its right to due process;

7. That the lightning speed with which respondent Judge acted to dismiss the cases
may be gleaned from the fact that such precipitate action was undertaken despite
already scheduled continuation of trial dates set in the order of the court (the
prosecution having started presenting its evidence . . .) dated August 11, 1992 to wit:
August 31, September 3, 10, 21, & 23 and October 1, 1992, all at 9:30 o'clock in the
morning, in brazen disregard of all notions of fair play, thereby depriving the
Government of its right to be heard, and clearly exposing his bias and partiality; and

8. That, in fact, the motive of respondent Judge in dismissing the case without even
waiting for a motion to quash filed by the counsel for accused has even placed his
dismissal Order suspect.

Pursuant to a resolution of this Court dated September 8, 1992, respondent judge filed his
comment, 4 contending, inter alia, that there was no need to await publication of the Central Bank
(CB) circular repealing the existing law on foreign exchange controls for the simple reason that the
public announcement made by the President in several newspapers of general circulation lifting
foreign exchange controls was total, absolute, without qualification, and was immediately effective;
that having acted only on the basis of such announcement, he cannot be blamed for relying on the
erroneous statement of the President that the new foreign exchange rules rendered moot and
academic the cases filed against Mrs. Marcos, and which was corrected only on August 17, 1992 but
published in the newspapers on August 18, 1992, and only after respondent judge had issued his
order of dismissal dated August 13, 1992; that the President was ill-advised by his advisers and,
instead of rescuing the Chief Executive from embarrassment by assuming responsibility for errors in
the latter's announcement, they chose to toss the blame for the consequence of their failures to
respondent judge who merely acted on the basis of the announcements of the President which had
become of public knowledge; that the "saving clause" under CB Circular No. 1353 specifically refers
only to pending actions or investigations involving violations of CB Circular No. 1318, whereas the
eleven cases dismissed involved charges for violations of CB Circular No. 960, hence the accused
cannot be tried and convicted under a law different from that under which she was charged; that
assuming that respondent judge erred in issuing the order of dismissal, the proper remedy should
have been an appeal therefrom but definitely not an administrative complaint for his dismissal; that a
mistake committed by a judge should not necessarily be imputed as ignorance of the law; and that a
"court can reverse or modify a doctrine but it does not show ignorance of the justices or judges
whose decisions were reversed or modified" because "even doctrines initiated by the Supreme Court
are later reversed, so how much more for the lower courts?"

He further argued that no hearing was necessary since the prosecution had nothing to explain
because, as he theorized, "What explanation could have been given? That the President was talking
'through his hat' (to use a colloquialism) and should not be believed? That I should wait for the
publication (as now alleged by complainants), of a still then non-existent CB circular? . . . As it turned
out, CB Circular No. 3153 (sic) does not affect my dismissal order because the said circular's so-
called saving clause does not refer to CB Circular 960 under which the charges in the dismissed
cases were based;" that it was discretionary on him to take judicial notice of the facts which are of
public knowledge, pursuant to Section 2 of Rule 129; that the contention of complainants that he
acted prematurely and in indecent haste for basing his order of dismissal on a mere newspaper
account is contrary to the wordings of the newspaper report wherein the President announced the
lifting of controls as an accomplished fact, not as an intention to be effected in the future, because of
the use of the present perfect tense or past tense "has lifted," not that he "intends to lift," foreign
exchange controls.

Finally, respondent judge asseverates that complainants who are officers of the Department of
Justice, violated Section 6, Rule 140 of the Rules of Court which provides that "proceedings against
judges of first instance shall be private and confidential" when they caused to be published in the
newspapers the filing of the present administrative case against him; and he emphasizes the fact
that he had to immediately resolve a simple and pure legal matter in consonance with the
admonition of the Supreme Court for speedy disposition of cases.

In their reply 5 and supplemental reply, 6 complainants aver that although the saving clause under
Section 16 of CB Circular No. 1353 made specific reference to CB Circular No. 1318, it will be noted
that Section 111 of Circular No. 1318, which contains a saving clause substantially similar to that of
the new circular, in turn refers to and includes Circular No. 960. Hence, whether under Circular No.
1318 or Circular No. 1353, pending cases involving violations of Circular No. 960 are excepted from
the coverage thereof. Further, it is alleged that the precipitate dismissal of the eleven cases, without
according the prosecution the opportunity to file a motion to quash or a comment, or even to show
cause why the cases against accused Imelda R. Marcos should not be dismissed, is clearly
reflective of respondent's partiality and bad faith. In effect, respondent judge acted as if he were the
advocate of the accused.

On December 9, 1993, this Court issued a resolution referring the complaint to the Office of the
Court Administrator for evaluation, report and recommendation, pursuant to Section 7, Rule 140 of
the Rules of Court, as revised, there being no factual issues involved. The corresponding report and
recommendation, 7 dated February 14, 1994, was submitted by Deputy Court Administrator Juanito
A. Bernad, with the approval of Court Administrator Ernani Cruz-Paño.
The questioned order 8 of respondent judge reads as follows:

These eleven (11) cases are for Violation of Central Bank Foreign Exchange
Restrictions as consolidated in CB Circular No. 960 in relation to the penal provision
of Sec. 34 of R.A. 265, as amended.

The accused Mrs. Imelda R. Marcos pleaded not guilty to all these cases; apparently
the other accused in some of these cases, Roberto S. Benedicto, was not arrested
and therefore the Court did not acquire jurisdiction over his person; trial was
commenced as against Mrs. Marcos.

His Excellency, the President of the Philippines, announced on August 10, 1992 that
the government has lifted all foreign exchange restrictions and it is also reported that
Central Bank Governor Jose Cuisia said that the Monetary Board arrived at such
decision (issue of the Philippine Daily Inquirer, August 11, 1992 and issue of the
Daily Globe of the same date). The Court has to give full confidence and credit to the
reported announcement of the Executive Department, specially from the highest
official of that department; the Courts are charged with judicial notice of matters
which are of public knowledge, without introduction of proof, the announcement
published in at least the two newspapers cited above which are reputable and of
national circulation.

Per several cases decided by the Supreme Court (People vs. Alcaras, 56 Phil. 520,
People vs. Francisco, 56 Phil. 572, People vs. Pastor, 77 Phil. 1000, People vs.
Crisanto Tamayo, 61 Phil. 225), among others, it was held that the repeal of a penal
law without re-enactment extinguishes the right to prosecute or punish the offense
committed under the old law and if the law repealing the prior penal law fails to
penalize the acts which constituted the offense defined and penalized in the repealed
law, the repealed law carries with it the deprivation of the courts of jurisdiction to try,
convict and sentence persons charged with violations of the old law prior to its
repeal. Under the aforecited decisions this doctrine applies to special laws and not
only to the crimes punishable in the Revised Penal Code, such as the Import Control
Law. The Central Bank Circular No. 960 under which the accused Mrs. Marcos is
charged is considered as a penal law because violation thereof is penalized with
specific reference to the provision of Section 34 of Republic Act 265, which penalizes
violations of Central Bank Circular No. 960, produces the effect cited in the Supreme
Court decisions and since according to the decisions that repeal deprives the Court
of jurisdiction, this Court motu proprio dismisses all the eleven (11) cases as a
forestated in the caption, for not to do so opens this Court to charges of trying cases
over which it has no more jurisdiction.

This order was subsequently assailed in a petition for certiorari filed with the Court of Appeals,
entitled "People of the Philippines vs. Hon. Manuel T. Muro, Judge, RTC of Manila, Br. 54 and
Imelda R. Marcos," docketed as CA-G.R. SP No. 29349. When required to file her comment, private
respondent Marcos failed to file any. Likewise, after the appellate court gave due course to the
petition, private respondent was ordered, but again failed despite notice, to file an answer to the
petition and to show cause why no writ of preliminary injunction should issue. Eventually, on April 29,
1993, the Court of Appeals rendered a decision 9 setting aside the order of August 13, 1992, and
reinstating Criminal Cases Nos. 92-101959 to 92-101969.

In finding that respondent judge acted in excess of jurisdiction and with grave abuse of discretion in
issuing the order of dismissal, the appellate court held that:
 The order was issued motu proprio, i.e., without any motion to dismiss filed by
counsel for the accused, without giving an opportunity for the prosecution to be
heard, and solely on the basis of newspaper reports announcing that the President
has lifted all foreign exchange restrictions.

The newspaper report is not the publication required by law in order that the
enactment can become effective and binding. Laws take effect after fifteen days
following the completion of their publication in the Official Gazette or in a newspaper
of general circulation unless it is otherwise provided (Section 1, Executive Order No.
200). The full text of CB Circular 1353, series of 1992, entitled "Further Liberalizing
Foreign Exchange Regulation" was published in the August 27, 1992 issue of the
Manila Chronicle, the Philippine Star and the Manila Bulletin. Per certification of the
CB Corporate Affairs Office, CB Circular No. 1353 took effect on September 2 . . . .

Considering that respondent judge admittedly had not seen the official text of CB
Circular No. 1353, he was in no position to rule judiciously on whether CB Circular
No. 960, under which the accused Mrs. Marcos is charged, was already repealed by
CB Circular No. 1353. . . .

xxx xxx xxx

A cursory reading of the . . . provision would have readily shown that the repeal of
the regulations on non-trade foreign exchange transactions is not absolute, as there
is a provision that with respect to violations of former regulations that are the subject
of pending actions or investigations, they shall be governed by the regulations
existing at the time the cause of action (arose). Thus his conclusion that he has lost
jurisdiction over the criminal cases is precipitate and hasty. Had he awaited the filing
of a motion to dismiss by the accused, and given opportunity for the prosecution to
comment/oppose the same, his resolution would have been the result of deliberation,
not speculation.

I. The doctrine of judicial notice rests on the wisdom and discretion of the courts. The power to take
judicial notice is to be exercised by courts with caution; care must be taken that the requisite
notoriety exists; and every reasonable doubt on the subject should be promptly resolved in the
negative. 10

Generally speaking, matters of judicial notice have three material requisites: (1) the matter must be
one of common and general knowledge; (2) it must be well and authoritatively settled and not
doubtful or uncertain; and (3) it must be known to be within the limits of the jurisdiction of the
court. 11 The provincial guide in determining what facts may be assumed to be judicially known is that
of notoriety. 12 Hence, it can be said that judicial notice is limited to facts evidenced by public records
and facts of general notoriety. 13

To say that a court will take judicial notice of a fact is merely another way of saying that the usual
form of evidence will be dispensed with if knowledge of the fact can be otherwise acquired. 14 This is
because the court assumes that the matter is so notorious that it will not be disputed. 15 But judicial
notice is not judicial knowledge. The mere personal knowledge of the judge is not the judicial
knowledge of the court, and he is not authorized to make his individual knowledge of a fact, not
generally or professionally known, the basis of his action. Judicial cognizance is taken only of those
matters which are "commonly" known. 16
Things of "common knowledge," of which courts take judicial notice, may be matters coming to the
knowledge of men generally in the course of the ordinary experiences of life, or they may be matters
which are generally accepted by mankind as true and are capable of ready and unquestioned
demonstration. 17 Thus, facts which are universally known, and which may be found in
encyclopedias, dictionaries or other publications, are judicially noticed, provided they are of such
universal notoriety and so generally understood that they may be regarded as forming part of the
common knowledge of every person. 18

Respondent judge, in the guise of exercising discretion and on the basis of a mere newspaper
account which is sometimes even referred to as hearsay evidence twice removed, took judicial
notice of the supposed lifting of foreign exchange controls, a matter which was not and cannot be
considered of common knowledge or of general notoriety. Worse, he took cognizance of an
administrative regulation which was not yet in force when the order of dismissal was issued.
Jurisprudence dictates that judicial notice cannot be taken of a statute before it becomes
effective. 19 The reason is simple. A law which is not yet in force and hence, still inexistent, cannot be
of common knowledge capable of ready and unquestionable demonstration, which is one of the
requirements before a court can take judicial notice of a fact.

Evidently, it was impossible for respondent judge, and it was definitely not proper for him, to have
taken cognizance of CB Circular No. 1353, when the same was not yet in force at the time the
improvident order of dismissal was issued.

II. Central Bank Circular No. 1353, which took effect on September 1, 1992, further liberalized the
foreign exchange regulations on receipts and disbursements of residents arising from non-trade and
trade transactions. Section 16 thereof provides for a saving clause, thus:

Sec. 16. Final Provisions of CB Circular No. 1318. - All the provisions in Chapter X of
CB Circular No. 1318 insofar as they are not inconsistent with, or contrary to the
provisions of this Circular, shall remain in full force and effect: Provided, however,
that any regulation on non-trade foreign exchange transactions which has been
repealed, amended or modified by this Circular, violations of which are the subject of
pending actions or investigations, shall not be considered repealed insofar as such
pending actions or investigations are concerned, it being understood that as to such
pending actions or investigations, the regulations existing at the time the cause of
action accrued shall govern.

Respondent judge contends that the saving clause refers only to the provisions of Circular No. 1318,
whereas the eleven criminal cases he dismissed involve a violation of CB Circular No. 960. Hence,
he insists, Circular No. 960 is deemed repealed by the new circular and since the former is not
covered by the saving clause in the latter, there is no more basis for the charges involved in the
criminal cases which therefore warrant a dismissal of the same. The contention is patently
unmeritorious.

Firstly, the second part of the saving clause in Circular No. 1353 explicitly provides that
"any regulation on non-trade foreign transactions which has been repealed, amended or modified by
this Circular, violations of which are the subject of pending actions or investigations, shall not be
considered repealed insofar as such pending actions or investigations are concerned, it being
understood that as to such pending actions or investigations, the regulations existing at the time the
cause of action accrued shall govern." The terms of the circular are clear and unambiguous and
leave no room for interpretation. In the case at bar, the accused in the eleven cases had already
been arraigned, had pleaded not guilty to the charges of violations of Circular No. 960, and said
cases had already been set for trial when Circular No. 1353 took effect. Consequently, the trial court
was and is supposed to proceed with the hearing of the cases in spite of the existence of Circular
No. 1353.

Secondly, had respondent judge only bothered to read a little more carefully the texts of the circulars
involved, he would have readily perceived and known that Circular No. 1318 also contains a
substantially similar saving clause as that found in Circular No. 1353, since Section 111 of the
former provides:

Sec. 111. Repealing clause. - All existing provisions of Circulars 365, 960 and 1028,
including amendments thereto, with the exception of the second paragraph of
Section 68 of Circular 1028, as well as all other existing Central Bank rules and
regulations or parts thereof, which are inconsistent with or contrary to the provisions
of this Circular, are hereby repealed or modified accordingly: Provided, however, that
regulations, violations of which are the subject of pending actions or investigations,
shall be considered repealed insofar as such pending actions or investigations are
concerned, it being understood that as to such pending actions or investigations, the
regulations existing at the time the cause of action accrued shall govern.

It unequivocally appears from the section above quoted that although Circular No. 1318 repealed
Circular No. 960, the former specifically excepted from its purview all cases covered by the old
regulations which were then pending at the time of the passage of the new regulations. Thus, any
reference made to Circular No. 1318 necessarily involves and affects Circular No. 960.

III. It has been said that next in importance to the duty of rendering a righteous judgment is that of
doing it in such a manner as will beget no suspicion of the fairness and integrity of the judge. 20 This
means that a judge should not only render a just, correct and impartial decision but should do so in
such a manner as to be free from any suspicion as to its fairness and impartiality and as to his
integrity. While a judge should possess proficiency in law in order that he can competently construe
and enforce the law, it is more important that he should act and behave in such a manner that the
parties before him should have confidence in his impartiality. Thus, it is not enough that he decides
cases without bias and favoritism. Nor is it sufficient that he in fact rids himself of prepossessions.
His actuations should moreover inspire that belief. Like Caesar's wife, a judge must not only be pure
but beyond suspicion. 21

Moreover, it has always heretofore been the rule that in disposing of controverted cases, judges
should show their full understanding of the case, avoid the suspicion of arbitrary conclusion, promote
confidence in their intellectual integrity and contribute useful precedents to the growth of the law. 22 A
judge should be mindful that his duty is the application of general law to particular instances, that
ours is a government of laws and not of men, and that he violates his duty as a minister of justice
under such a system if he seeks to do what he may personally consider substantial justice in a
particular case and disregards the general law as he knows it to be binding on him. Such action may
have detrimental consequences beyond the immediate controversy. He should administer his office
with due regard to the integrity of the system of the law itself, remembering that he is not a
depository of arbitrary power, but a judge under the sanction of the law. 23 These are immutable
principles that go into the very essence of the task of dispensing justice and we see no reason why
they should not be duly considered in the present case.

The assertion of respondent judge that there was no need to await publication of Circular No. 1353
for the reason that the public announcement made by the President in several newspapers of
general circulation lifting foreign exchange controls is total, absolute, without qualification, and
immediately effective, is beyond comprehension. As a judge of the Regional Trial Court of Manila,
respondent is supposed to be well-versed in the elementary legal mandates on the publication of
laws before they take effect. It is inconceivable that respondent should insist on an altogether
different and illogical interpretation of an established and well-entrenched rule if only to suit his own
personal opinion and, as it were, to defend his indefensible action. It was not for him to indulge or
even to give the appearance of catering to the at-times human failing of yielding to first
impressions. 24 He having done so, in the face of the foregoing premises, this Court is hard put to
believe that he indeed acted in good faith.

IV. This is not a simple case of a misapplication or erroneous interpretation of the law. The very act
of respondent judge in altogether dismissing sua sponte the eleven criminal cases without even a
motion to quash having been filed by the accused, and without at least giving the prosecution the
basic opportunity to be heard on the matter by way of a written comment or on oral argument, is not
only a blatant denial of elementary due process to the Government but is palpably indicative of bad
faith and partiality.

The avowed desire of respondent judge to speedily dispose of the cases as early as possible is no
license for abuse of judicial power and discretion, 25 nor does such professed objective, even if true,
justify a deprivation of the prosecution's right to be heard and a violation of its right to due process of
law. 26

The lightning speed, to borrow the words of complainants, with which respondent judge resolved to
dismiss the cases without the benefit of a hearing and without reasonable notice to the prosecution
inevitably opened him to suspicion of having acted out of partiality for the accused. Regardless of
how carefully he may have evaluated changes in the factual situation and legal standing of the
cases, as a result of the newspaper report, the fact remains that he gave the prosecution no chance
whatsoever to show or prove that it had strong evidence of the guilt of the accused. To repeat, he
thereby effectively deprived the prosecution of its right to due process. 27 More importantly,
notwithstanding the fact that respondent was not sure of the effects and implications of the
President's announcement, as by his own admission he was in doubt whether or not he should
dismiss the cases, 28 he nonetheless deliberately refrained from requiring the prosecution to
comment thereon. In a puerile defense of his action, respondent judge can but rhetorically ask:
"What explanation could have been given? That the President was talking 'through his hat' and
should not be believed? That I should wait for the publication of a still then non- existent CB
Circular?" The pretended cogency of this ratiocination cannot stand even the minutest legal scrutiny.

In order that bias may not be imputed to a judge, he should have the patience and circumspection to
give the opposing party a chance to present his evidence even if he thinks that the oppositor's proofs
might not be adequate to overthrow the case for the other party. A display of petulance and
impatience in the conduct of the trial is a norm of conduct which is inconsistent with the "cold
neutrality of an impartial judge." 29 At the very least, respondent judge acted injudiciously and with
unjustified haste in the outright dismissal of the eleven cases, and thereby rendered his actuation
highly dubious.

V. It bears stressing that the questioned order of respondent judge could have seriously and
substantially affected the rights of the prosecution had the accused invoked the defense of double
jeopardy, considering that the dismissal was ordered after arraignment and without the consent of
said accused. This could have spawned legal complications and inevitable delay in the criminal
proceedings, were it not for the holding of the Court of Appeals that respondent judge acted with
grave abuse of discretion amounting to lack of jurisdiction. This saved the day for the People since in
the absence of jurisdiction, double jeopardy will not set in. To stress this point, and as a caveat to
trial courts against falling into the same judicial error, we reiterate what we have heretofore declared:
 It is settled doctrine that double jeopardy cannot be invoked against this Court's
setting aside of the trial court's judgment of dismissal or acquittal where the
prosecution which represents the sovereign people in criminal cases is denied due
process. . . . .

Where the prosecution is deprived of a fair opportunity to prosecute and prove its
case, its right to due process is thereby violated.

The cardinal precept is that where there is a violation of basic constitutional rights,
courts are ousted of their jurisdiction. Thus, the violation of the State's right to due
process raises a serious jurisdictional issue . . . which cannot be glossed over or
disregarded at will. Where the denial of the fundamental right of due process is
apparent, a decision rendered in disregard of that right is void for lack of jurisdiction .
. . . 30

It is also significant that accused Marcos, despite due notice, never submitted either her comment on
or an answer to the petition for certiorari as required by the Court of Appeals, nor was double
jeopardy invoked in her defense. This serves to further underscore the fact that the order of
dismissal was clearly unjustified and erroneous. Furthermore, considering that the accused is a
prominent public figure with a record of influence and power, it is not easy to allay public skepticism
and suspicions on how said dismissal order came to be, to the consequent although undeserved
discredit of the entire judiciary.

VI. To hold a judge liable for rendering a manifestly unjust order through inexcusable negligence or
ignorance, it must be clearly shown that although he has acted without malice, he failed to observe
in the performance of his duty that diligence, prudence and care which the law is entitled to exact in
the rendering of any public service. Negligence and ignorance are inexcusable if they imply a
manifest injustice which cannot be explained by a reasonable interpretation, and even though there
is a misunderstanding or error of the law applied, it nevertheless results logically and reasonably,
and in a very clear and indisputable manner, in the notorious violation of the legal precept. 31

In the present case, a cursory perusal of the comment filed by respondent judge reveals that no
substantial argument has been advanced in plausible justification of his act. He utterly failed to show
any legal, factual, or even equitable justification for the dismissal of the eleven criminal cases. The
explanation given is no explanation at all. The strained and fallacious submissions therein do not
speak well of respondent and cannot but further depreciate his probity as a judge. On this point, it is
best that pertinent unedited excerpts from his comment 32 be quoted by way of graphic illustration
and emphasis:

On the alleged ignorance of the law imputed to me, it is said that I issued the Order
dismissing the eleven (11) cases against Mrs. Imelda R. Marcos on the basis of
newspaper reports referred to in paragraph 2 of the letter complaint without awaiting
the official publication of the Central Bank Circular. Ordinarily a Central Bank
Circular/Resolution must be published in the Official Gazette or in a newspaper of
general circulation, but the lifting of "all foreign exchange controls" was announced
by the President of the Philippines WITHOUT QUALIFICATIONS; as published in the
Daily Globe, August 11, 1992" the government has lifted ALL foreign exchange
controls," and in the words of the Philippine Daily Inquirer report of the same date
"The government yesterday LIFTED the LAST remaining restrictions on foreign
exchange transactions, . . ." (emphasis in both quotations supplied) not only the
President made the announcement but also the Central Bank Governor Jose Cuisia
joined in the announcement by saying that "the Monetary Board arrived at the
decision after noting how the "partial liberalization" initiated early this year worked."

Therefore, because of the ABSOLUTE lifting of ALL restrictions on foreign exchange

transactions, there was no need to await the publication of the repealing circular of
the Central Bank. The purpose of requiring publication of laws and administrative
rules affecting the public is to inform the latter as to how they will conduct their affairs
and how they will conform to the laws or the rules. In this particular case, with the
total lifting of the controls, there is no need to await publication. It would have been
different if the circular that in effect repealed Central Bank Circular No. 960, under
which the accused was charged in the cases dismissed by me, had provided for
penalties and/or modified the provisions of said Circular No. 960.

The Complainants state that the lifting of controls was not yet in force when I
dismissed the cases but it should be noted that in the report of the two (2)
newspapers aforequoted, the President's announcement of the lifting of controls was
stated in the present perfect tense (Globe) or past tense (Inquirer). In other words, it
has already been lifted; the announcement did not say that the government
INTENDS to lift all foreign exchange restrictions but instead says that the
government "has LIFTED all foreign exchange controls," and in the other newspaper
cited above, that "The government yesterday lifted the last remaining restrictions on
foreign exchange transactions". The lifting of the last remaining exchange regulations
effectively cancelled or repealed Circular No. 960.

The President, who is the Chief Executive, publicly announced the lifting of all foreign
exchange regulations. The President has within his control directly or indirectly the
Central Bank of the Philippines, the Secretary of Finance being the Chairman of the
Monetary Board which decides the policies of the Central Bank.

No official bothered to correct or qualify the President's announcement of August 10,

published the following day, nor made an announcement that the lifting of the
controls do not apply to cases already pending, not until August 17 (the fourth day
after my Order, and the third day after report of said order was published) and after
the President said on August 17, reported in the INQUIRER's issue of August 18,
1992, that the "new foreign exchange rules have nullified government cases against
Imelda R. Marcos, telling reporters that the charges against the widow of former
President Marcos "have become moot and academic" because of new ruling(s)
which allow free flow of currency in and out of the country" (Note, parenthetically, the
reference to "new rules" not to "rules still to be drafted"). The INQUIRER report
continues: "A few hours later, presidential spokeswoman Annabelle Abaya said,
RAMOS (sic) had "corrected himself'." "He had been belatedly advised by the
Central Bank Governor Jose Cuisia and Justice Secretary Franklin Drilon that the
Monetary Board Regulation excluded from its coverage all criminal cases pending in
court and such a position shall stand legal scrutiny', Mrs. Abaya, said."

I will elaborate on two points:

1. If the President was wrong in making the August 10 announcement (published in

August 11, 1992, newspapers) and in the August 17 announcement, SUPRA, and
thus I should have relied on the Presidential announcements, and there is basis to
conclude that the President was at the very least ILL-SERVED by his financial and
legal advisers, because no one bothered to advise the President to correct his
 announcements, not until August 17, 1992, a few hours after the President had made
another announcement as to the charges against Imelda Marcos having been
rendered moot and academic. The President has a lot of work to do, and is not, to
my knowledge, a financier, economist, banker or lawyer. It therefore behooved his
subalterns to give him timely (not "belated") advice, and brief him on matters of
immediate and far-reaching concerns (such as the lifting of foreign exchange
controls, designed, among others to encourage the entry of foreign investments).
Instead of rescuing the Chief Executive from embarrassment by assuming
responsibility for errors in the latter's announcement, these advisers have chosen to
toss the blame for the consequence of their failing to me, who only acted on the
basis of announcements of their Chief, which had become of public knowledge.

xxx xxx xxx

The Court strongly feels that it has every right to assume and expect that respondent judge is
possessed with more than ordinary credentials and qualifications to merit his appointment as a
presiding judge in the Regional Trial Court of the National Capital Judicial Region, stationed in the
City of Manila itself. It is, accordingly, disheartening and regrettable to note the nature of the
arguments and the kind of logic that respondent judge would want to impose on this Court
notwithstanding the manifest lack of cogency thereof. This calls to mind similar scenarios and how
this Court reacted thereto.

In one case, an RTC Judge was administratively charged for acquitting the accused of a violation of
CB Circular No. 960 despite the fact that the accused was apprehended with US$355,349.00 while
boarding a plane for Hongkong, erroneously ruling that the State must first prove criminal intent to
violate the law and benefit from the illegal act, and further ordering the return of US$3,000.00 out of
the total amount seized, on the mistaken interpretation that the CB circular exempts such amount
from seizure. Respondent judge therein was ordered dismissed from the government service for
gross incompetence and ignorance of the law. 33

Subsequently, the Court dismissed another RTC judge, with forfeiture of retirement benefits, for
gross ignorance of the law and for knowingly rendering an unjust order or judgment when he granted
bail to an accused charged with raping an 11-year old girl, despite the contrary recommendation of
the investigating judge, and thereafter granted the motion to dismiss the case allegedly executed by
the complainant. 34

Similarly, an RTC judge who was described by this Court as one "who is ignorant of fairly elementary
and quite familiar legal principles and administrative regulations, has a marked penchant for applying
unorthodox, even strange theories and concepts in the adjudication of controversies, exhibits
indifference to and even disdain for due process and the rule of law, applies the law whimsically,
capriciously and oppressively, and displays bias and impartiality," was dismissed from the service
with forfeiture of all retirement benefits and with prejudice to reinstatement in any branch of the
government or any of its agencies or instrumentalities. 35

Still in another administrative case, an RTJ judge was also dismissed by this Court for gross
ignorance of the law after she ordered, in a probate proceeding, the cancellation of the certificates of
title issued in the name of the complainant, without affording due process to the latter and other
interested parties. 36

Only recently, an RTC judge who had been reinstated in the service was dismissed after he
acquitted all the accused in four criminal cases for illegal possession of firearms, on the ground that
there was no proof of malice or deliberate intent on the part of the accused to violate the law. The
Court found him guilty of gross ignorance of the law, his error of judgment being almost deliberate
and tantamount to knowingly rendering an incorrect and unjust judgment. 37

ACCORDINGLY, on the foregoing premises and considerations, the Court finds respondent Judge
Manuel T. Muro guilty of gross ignorance of the law. He is hereby DISMISSED from the service,
such dismissal to carry with it cancellation of eligibility, forfeiture of leave credits and retirement
benefits, and disqualification from reemployment in the government service. 38

Respondent is hereby ordered to CEASE and DESIST immediately from rendering any judgment or
order, or continuing any judicial action or proceeding whatsoever, effective upon receipt of this
decision.

SO ORDERED.

Narvasa, Cruz, Feliciano, Padilla, Regalado, Davide, Jr., Romero, Bellosillo, Melo, Quiason,
Puno, Vitug and Kapunan, JJ., concur.

Bidin, is on official leave.

Separate Opinions

DISSENTING OPINION

BELLOSILLO, J.:

In other jurisdictions, it is generally accepted that judges are not accountable by way of either civil
suit or discipline for their official acts, even if clearly erroneous. Thus, open disregard of statutes,
rules, and cases has been held to be protected official activity. Although a decision may seem so
erroneous as to raise doubts concerning a judge's integrity or physiological condition, absent
extrinsic evidence, the decision itself is insufficient to establish a case against the judge. The rule is
consistent with the concept of judicial independence. An honest judge, if he were denied the
protection of the extrinsic evidence requirement, might become unduly cautious in his work, since he
would be subject to discipline based merely upon the inferences to be drawn from an erroneous
decision. 1

In our jurisdiction, the law is no different. Thus, this Court has repeatedly held that -

. . . it is a fundamental rule of long standing that a judicial officer when required to

exercise his judgment or discretion is not criminally liable for any error he commits
provided he acts in good faith, that in the absence of malice or any wrongful conduct
. . . the judge cannot be held administratively responsible . . . for no one, called upon
to try the facts or interpret the law in the process of administering justice can be
infallible in his judgment, and to hold a judge administratively accountable for every
erroneous ruling or decision he renders . . . would be nothing short of harassment or
would make his position unbearable. 2
A judge cannot be subjected to liability - civil, criminal, or
administrative - for any of his official acts, no matter how erroneous, as long as he acts in good
faith. 3 He cannot be held to account or answer, criminally, civilly, or administratively, for an
erroneous decision rendered by him in good faith. 4 As a matter of public policy, in the absence of
fraud, dishonesty, or corruption, the acts of a judge in his judicial capacity are not subject to
disciplinary action, even though such acts are erroneous. 5 It is a general principle of the highest
importance to proper administration of justice that a judicial officer, in exercising the authority vested
in him, shall be free to act upon his own convictions, without apprehension of personal
consequences to himself. This concept of judicial immunity rests upon consideration of public policy,
its purpose being to preserve the integrity and independence of the judiciary." 6 This being settled
doctrine, there is no choice but to apply it to the instant case.

The facts: Respondent Manuel T. Muro, a native of Masbate, Masbate, was appointed on 6
November 1986 as Presiding Judge of the Regional Trial Court of Manila, Br. 54, by then President
Corazon C. Aquino. A product of the College of Law, Far Easter University, he graduated
valedictorian in 1955, magna cum laude, and placed sixth in the Bar examinations. Now he is being
charged with ignorance of the law, grave misconduct and violations of Rules 2.01, 3.01 and 3.02 of
the Code of Judicial Conduct 7 for dismissing motu proprio the eleven (11) cases filed by the
Department of Justice Panel of Prosecutors against Ms. Imelda Romualdez Marcos for Violation of
Central Bank Foreign Exchange Restrictions after President Fidel V. Ramos had announced, which
was published in newspaper reports, the lifting of all foreign exchange restrictions.

The majority opinion finds respondent judge guilty of gross ignorance of the law and imposes upon
him the supreme penalty of dismissal from the service, forfeiture of leave credits and retirement
benefits, and disqualification from reemployment in the government service.

With all due respect to my esteemed colleagues, particularly to the ponente who is a recognized
authority on various fields of law, I cannot help viewing the circumstances in a different light.

There is no dispute that the order issued by respondent judge has been reversed by the appellate
court, which reversal has now become final for failure of the accused to appeal therefrom; hence, no
damage has been caused except that complainants had to avail of a judicial remedy to correct the
mistake. But, as adverted to, the overturned order alone does not necessarily make respondent
judge liable administratively, much more civilly or criminally. To be answerable, the fault of the judge,
if any, must be gross or patent, malicious, deliberate or done in bad faith. 8Plainly said, fault in this
regard may exist only when the error appears to be deliberate or in bad faith. 9

Thus, bad faith is imputed against respondent judge, first, for insisting that "there was no need to
await publication of Circular No. 1353 for the reason that the public announcement made by the
President in several newspapers of general circulation lifting foreign exchange controls is total,
absolute, without qualification, and immediately effective," 10 and, second, for "dismissing sua
sponte the eleven criminal cases without even a motion to quash having been filed by the accused,
and without at least giving the prosecution the basic opportunity to be heard on the matter." 11

But, bad faith is the neglect or refusal to fulfill a duty, not prompted by an honest mistake, but by
some interested or sinister motive. 12 It implies breach of faith and willful failure to respond to plain
and well understood obligation. 13 It does not simply connote bad judgment or negligence; it imports a
dishonest purpose or some moral obliquity and conscious doing of wrong; it means breach of a
known duty through some motive or interest or ill will. 14

Hence, I cannot ascribe bad faith to respondent judge for I see no insidious intentions on his part. If
he insists that there really is no need to await the publication of Circular No. 1353, as he does here,
it merely shows that he sincerely believes that there is indeed no necessity to await publication.
Whether his belief is erroneous or not is thus irrelevant. Further, dismissing motu proprio the eleven
criminal cases without affording the prosecution the opportunity to be heard on the matter, erroneous
though it may be, is not inescapably indicative of bad faith. The immediate dismissal of the charges
is a necessary consequence of the belief that since the restrictions were lifted, no law was then
being violated. It is an elementary principle in procedural law and statutory construction that the
repeal of a penal law deprives the court of jurisdiction to punish persons charged with a violation of
the old law prior to its repeal. Thus, where the crime no longer exists, prosecution of the person
charged under the old law cannot be had and the action should be dismissed. 15

On the contrary, there is no reason why good faith should not be attributed to respondent judge.
Good faith means that the motive that actuated the conduct in question was in fact what the actor
ascribes to it, that is, that what he gives as his motive was in truth his motive. 16 Hence, if he honestly
believes that the bases for the criminal charges against accused have been eliminated and thus
strikes down the information and consequently dismisses the charges, respondent judge cannot be
criminally, civilly, or even administratively, held liable.

Good faith and absence of malice, corrupt motives or improper consideration are sufficient defenses
protecting a judicial officer charged with ignorance of the law and promulgation of an unjust decision
from being held accountable for errors of judgment. This, on the premise that no one called upon to
try the facts or interpret the law in the administration of justice can be infallible. 17

Respondent judge could not have seriously jeopardized the rights of the prosecution, even if the
accused invoked the defense of double jeopardy, since the remedy of certiorari is very much
available. Precisely, as has been pointed out in the majority opinion, the defense of double jeopardy
is unavailing when the prosecution is denied due process. This is in fact the office of the prevailing
doctrine - to correct indiscretions of lower court judges - which does not necessarily make them
personally liable. In fact, if respondent judge was indeed in bad faith, he should have given the
prosecution an opportunity to be heard, and after a full-blown trial, acquitted the accused. Then, the
defense of double jeopardy would have been proper and the accused would have gone scot-free.
Thus, in Negado v. Judge Autajay, 18 this Court affirmed the conclusions of the Investigating Justice
of the Court of Appeals that "[w]hen a person seeks administrative sanction against a judge simply
because he has committed an error in deciding the case against such person, when such error can
be elevated to a higher court for review and correction, the action of such person can only be
suspect."

To equate the failure of accused Marcos to comment on the petition before the appellate court, and
consequently invoke the defense of double jeopardy, with the errancy of the assailed order, 19 may
be indulging in needless speculation. And to imply that the influence of the accused who is a
prominent public figure brought about the dismissal order is simply not borne out by the records.

Besides, the challenged order of respondent judge can hardly be considered as grossly erroneous to
merit his dismissal. For, while his reasoning may be erroneous, as it turned out when the reversal of
his decision by the appellate court became final, it is not at all illogical as even the President of the
Republic, with his learned legal advisers, after learning of the dismissal of the cases filed by his
administration against the accused, was quoted as saying that Mrs. Marcos was an "accidental"
beneficiary of the foreign exchange deregulation policy of his administration. 20 Thus, President Fidel
V. Ramos further said that "[t]he forex deregulation applies to everybody . . . . Now the cases filed by
the government against Mrs. Marcos, numbering about 11 out of 90 have become moot and
academic because of the new regulations that have come out of the Monetary Board, but that is to
her advantage." 21 Where the conclusions of the judge in his decision are not without logic or reason,
it cannot be said that he is incompetent or grossly ignorant. 22
It has been said that a judge, like Caesar's wife, must not only be pure but beyond
suspicion. 23 Ideally so. But the cold fact is that every overturned decision provokes suspicion
especially from the successful appellant who feels certain that the lower court indeed erred.

It is settled that "[a] judge should be mindful that his duty is the application of general law to a
particular instance, that ours is a government of laws and not of men, and that he violates his duty
as a minister of justice under such system if he seeks to do what he may personally consider
substantial justice in a particular case and disregards the general law as he knows it to be binding on
him. Such action may have detrimental consequences beyond the immediate controversy. He
should administer his office with due regard to the integrity of the system of the law itself,
remembering that he is not a depositary of arbitrary power, but a judge under the sanction of
law." 24 As it has been said, he must interpret the books, and not unload his ideas.

But while a judge must decide in accordance with existing laws and established jurisprudence, his
own personality, character, convictions, values, experiences and prejudices are only sublimely
insignificant and unconsciously dispensable. In every decision he makes, he is no more and no less
human, his own beliefs, perceptions and imperfections, as well as the laws he is bound to apply, all
having profound influence on his eventual choice. Thus, Mr. Justice Cardozo of the Supreme Court
of the United States once wrote of judges: "We may try to see things as objectively as we please.
None the less, we can never see them with any eyes except our own." 25 Hence, time and again,
lower court judges, if not reversed by the Court of Appeals and this Court, have continued to set new
trails in jurisprudence without exactly conforming with what has been settled. yet, whether reversed
or merely unregarded, they do not receive displeasure from this Court; on the contrary, they remain
to be effective dispensers of everyday justice.

In fine, there is no substantial proof, nay proof beyond reasonable doubt, that respondent judge
issued the assailed order in bad faith or with conscious and deliberate intent to perpetrate an
injustice.

Mr. Justice Malcolm, speaking for this Court In re Horilleno, 26 said that "[i]mpeachment proceedings
before courts have been said, in other jurisdictions, to be in their nature highly penal in character and
to be governed by the rules of law applicable to criminal cases." Mr. Chief Justice Fernando, then
Associate Justice of this Court, reiterated the doctrine in Suerte v. Judge Ugbinar 27 where he said
that "[t]his is to defer the basic concept first announced in 1922 in this jurisdiction . . . in . . . In re
Horilleno that proceedings of this character being in their nature highly penal, the charge must,
therefore, be proved beyond reasonable doubt. To paraphrase the opinion further, there is no
showing of the alleged incompetence and gross ignorance of the law by a preponderance of the
evidence, much less beyond a reasonable doubt. Such an exacting standard has been adhered to
by this Court in subsequent decisions." 28

The law always imputes good faith to judicial action, and the burden is on the one challenging the
same to prove want of it. Contraposed with the "exacting standard" required, complainant-
prosecutors in the instant case failed to prove the absence of good faith on the part of the
respondent judge. Consequently, the presumption that official duty has been regularly performed
stands.

I find it difficult to compare the instant case with those cited in the majority opinion. In Padilla v.
Judge Dizon, 29respondent not only allowed the accused to go scot-free, leaving the Commissioner of
Customs without any relief against the accused, the former likewise ordered the release of
US$3,000.00 to the accused. Thus, respondent judge was found guilty not only of gross ignorance of
the law, but also of gross incompetence, and grave and serious misconduct affecting his integrity
and efficiency, and was consequently dismissed from the service. And, failing to learn a lesson from
his earlier administrative case, respondent judge, after his reinstatement, this time erroneously
acquitted the defendants in four (4) different cases of illegal possession of firearms. Finally the Court
said, "[w]hen it has been clearly demonstrated, as in this case, not only once but four (4) times, that
the judge is either grossly incompetent or grossly ignorant of the penal laws . . . . he becomes unfit
to discharge his judicial office." 30 Unlike former Judge Dizon, this is the first time respondent Judge
Muro is being administratively charged.

In Buenavista v. Judge Garcia, 31 the Court found respondent guilty of "serious misconduct, gross
ignorance of the law, and knowingly rendering an unjust order of judgment" for granting bail to an
accused who was charged with statutory rape, for "improper and immoral intervention in brokering a
compromise of the criminal cases" against the accused, and thereafter for granting the motion to
dismiss the rape case on the basis of an Affidavit of Desistance allegedly executed by the victim who
was then a minor. Certainly, the actuations of the respondent judge in the cited case are far worse
than the complained indiscretions of herein respondent Judge.

In the proceedings instituted against Judge Jocson, 32 he was charged with a litany of administrative
cases, six (6) in all, i.e., from gross misconduct to gross ignorance of the law, to incompetence, to
partiality. While not all the charges were sufficiently proved, respondent judge was found to be
"ignorant of fairly elementary and quite familiar legal principles and administrative regulations, (with)
. . . a marked penchant for applying unorthodox, even strange theories and concepts in the
adjudication of controversies, (and) exhibits indifference to, and even disdain for due process and
the rule of law, applies the law whimsically, capriciously and oppressively, and displays bias and
partiality." The Court thus observed, "[t]he different acts of misconduct proven against respondent
judge demonstrate his unfitness to remain in office and to continue to discharge the functions and
duties of a judge, and warrant the imposition on him of the extreme sanction of dismissal from the
service." There is nothing in the records of the instant case which shows that respondent
Judge Muro, like former Judge Jocson, exhibits a pattern for applying pecant and unaccepted
theories which breed manifest and irreversible injustice.

And, in Uy v. Judge Dizon-Capulong, 33 respondent aggravated her ignorance of the law by her
refusal to abide by the Decision of the appellate court and later of this Court, showing utter
disrespect for and open defiance of higher courts. Consequently, she was not only found guilty of
gross ignorance of the law, but also of grave and serious misconduct prejudicial to the interest of the
judicial service.

Contrastingly, in a fairly recent case, 34 this Court merely imposed a fine of P10,000.00 on
respondent judge who entertained the petition for bail filed by the suspects prior to their actual
arrest, notwithstanding unrefuted allegations that the accused were allegedly relatives of the
congressman who "sponsored" the appointment of respondent to the Judiciary. In other case, 35 this
Court imposed a fine of P5,000.00 on respondent judge for ignorance of the law and grave abuse of
authority after he improperly issued a warrant of arrest and set the case for arraignment, in disregard
of proper procedure. And, still in
another, 36 this Court in dismissing the complaint filed against respondent ruled that a judge cannot
be condemned unless his error is so gross and patent as to produce an inference of ignorance and
bad faith or that he knowingly rendered an unjust decision.

In sum, there is no extrinsic evidence which shows that the assailed order of respondent Judge
Manuel T. Muro was inspired by a conscious and corrupt intent to do a disservice and commit an
atrocity, and thus his dismissal is uncalled for. Where there is no clear indication from the records
that the respondent's assailed decision was inspired by corrupt motives or a reprehensible purpose,
and while there may be a misjudgment, but not a deliberate twisting of facts to justify the assailed
order, dismissal of respondent judge from the service is not proper. 37
Holding respondent judge liable for issuing the challenged order may curtail the independence of
judges and send the wrong signals to them who are supposed to exercise their office without fear of
reprisal, merely for expressing their uncorrupted views. Regretfully, litigants may suffer and gain
eventual justice only after costly and long-drawn-out appeals from erroneous decisions, but these
are necessary evils which must be endured to some extent lest judicial independence and the
growth of the law be stifled.

Unlike collegial courts which afford their members the luxury of a deliberation, a trial judge in
handing down his decisions must brave the loneliness of his solitude and independence. And, while
this Court may slightly bend backwards if only to avoid suspicion of partiality and cliquism to a
brother in the profession, it must also step forward and take the lead to defend him against
unsubstantiated tirades which put to shame and disgrace not only the magistrate on trial but the
entire judicial system as well. As champion — at other times tormentor — of trial and appellate
judges, this Court must be unrelenting in weeding the judiciary of unscrupulous judges, but it must
also be quick in dismissing administrative complaints which serve no other purpose than to harass
them. In dismissing judges from the service, the Court must be circumspect and deliberate, lest it
penalizes them for exercising their independent judgments handed down in good faith.

Respondent judge has impressive academic and professional credentials which, experience shows,
are no longer easy to recruit for the judicial service. Above all, he has served the judiciary with
creditable distinction. It is unfeeling, if not unfair, to purge him without extrinsic evidence of bad faith
and then shatter his hopes of ascending someday the judicial hierarchy which, after all, is the
ultimate dream of every sacrificing trial judge.

I VOTE FOR THE EXONERATION OF RESPONDENT JUDGE.

# Separate Opinions

BELLOSILLO, J.:

In other jurisdictions, it is generally accepted that judges are not accountable by way of either civil suit or discipline for their official acts, even
if clearly erroneous. Thus, open disregard of statutes, rules, and cases has been held to be protected official activity. Although a decision
may seem so erroneous as to raise doubts concerning a judge's integrity or physiological condition, absent extrinsic evidence, the decision
itself is insufficient to establish a case against the judge. The rule is consistent with the concept of judicial independence. An honest judge, if
he were denied the protection of the extrinsic evidence requirement, might become unduly cautious in his work, since he would be subject to
discipline based merely upon the inferences to be drawn from an erroneous decision. 1

In our jurisdiction, the law is no different. Thus, this Court has repeatedly held that -

. . . it is a fundamental rule of long standing that a judicial officer when required to

exercise his judgment or discretion is not criminally liable for any error he commits
provided he acts in good faith, that in the absence of malice or any wrongful conduct
. . . the judge cannot be held administratively responsible . . . for no one, called upon
to try the facts or interpret the law in the process of administering justice can be
infallible in his judgment, and to hold a judge administratively accountable for every
erroneous ruling or decision he renders . . . would be nothing short of harassment or
would make his position unbearable. 2

A judge cannot be subjected to liability - civil, criminal, or

administrative - for any of his official acts, no matter how erroneous, as long as he acts in good
faith. 3 He cannot be held to account or answer, criminally, civilly, or administratively, for an
erroneous decision rendered by him in good faith. 4 As a matter of public policy, in the absence of
fraud, dishonesty, or corruption, the acts of a judge in his judicial capacity are not subject to
disciplinary action, even though such acts are erroneous. 5 It is a general principle of the highest
importance to proper administration of justice that a judicial officer, in exercising the authority vested
in him, shall be free to act upon his own convictions, without apprehension of personal
consequences to himself. This concept of judicial immunity rests upon consideration of public policy,
its purpose being to preserve the integrity and independence of the judiciary." 6 This being settled
doctrine, there is no choice but to apply it to the instant case.

The facts: Respondent Manuel T. Muro, a native of Masbate, Masbate, was appointed on 6
November 1986 as Presiding Judge of the Regional Trial Court of Manila, Br. 54, by then President
Corazon C. Aquino. A product of the College of Law, Far Easter University, he graduated
valedictorian in 1955, magna cum laude, and placed sixth in the Bar examinations. Now he is being
charged with ignorance of the law, grave misconduct and violations of Rules 2.01, 3.01 and 3.02 of
the Code of Judicial Conduct 7 for dismissing motu proprio the eleven (11) cases filed by the
Department of Justice Panel of Prosecutors against Ms. Imelda Romualdez Marcos for Violation of
Central Bank Foreign Exchange Restrictions after President Fidel V. Ramos had announced, which
was published in newspaper reports, the lifting of all foreign exchange restrictions.

The majority opinion finds respondent judge guilty of gross ignorance of the law and imposes upon
him the supreme penalty of dismissal from the service, forfeiture of leave credits and retirement
benefits, and disqualification from reemployment in the government service.

With all due respect to my esteemed colleagues, particularly to the ponente who is a recognized
authority on various fields of law, I cannot help viewing the circumstances in a different light.

There is no dispute that the order issued by respondent judge has been reversed by the appellate
court, which reversal has now become final for failure of the accused to appeal therefrom; hence, no
damage has been caused except that complainants had to avail of a judicial remedy to correct the
mistake. But, as adverted to, the overturned order alone does not necessarily make respondent
judge liable administratively, much more civilly or criminally. To be answerable, the fault of the judge,
if any, must be gross or patent, malicious, deliberate or done in bad faith. 8Plainly said, fault in this
regard may exist only when the error appears to be deliberate or in bad faith. 9

Thus, bad faith is imputed against respondent judge, first, for insisting that "there was no need to
await publication of Circular No. 1353 for the reason that the public announcement made by the
President in several newspapers of general circulation lifting foreign exchange controls is total,
absolute, without qualification, and immediately effective," 10 and, second, for "dismissing sua
sponte the eleven criminal cases without even a motion to quash having been filed by the accused,
and without at least giving the prosecution the basic opportunity to be heard on the matter." 11

But, bad faith is the neglect or refusal to fulfill a duty, not prompted by an honest mistake, but by
some interested or sinister motive. 12 It implies breach of faith and willful failure to respond to plain
and well understood obligation. 13 It does not simply connote bad judgment or negligence; it imports a
dishonest purpose or some moral obliquity and conscious doing of wrong; it means breach of a
known duty through some motive or interest or ill will. 14

Hence, I cannot ascribe bad faith to respondent judge for I see no insidious intentions on his part. If
he insists that there really is no need to await the publication of Circular No. 1353, as he does here,
it merely shows that he sincerely believes that there is indeed no necessity to await publication.
Whether his belief is erroneous or not is thus irrelevant. Further, dismissing motu proprio the eleven
criminal cases without affording the prosecution the opportunity to be heard on the matter, erroneous
though it may be, is not inescapably indicative of bad faith. The immediate dismissal of the charges
is a necessary consequence of the belief that since the restrictions were lifted, no law was then
being violated. It is an elementary principle in procedural law and statutory construction that the
repeal of a penal law deprives the court of jurisdiction to punish persons charged with a violation of
the old law prior to its repeal. Thus, where the crime no longer exists, prosecution of the person
charged under the old law cannot be had and the action should be dismissed. 15

On the contrary, there is no reason why good faith should not be attributed to respondent judge.
Good faith means that the motive that actuated the conduct in question was in fact what the actor
ascribes to it, that is, that what he gives as his motive was in truth his motive. 16 Hence, if he honestly
believes that the bases for the criminal charges against accused have been eliminated and thus
strikes down the information and consequently dismisses the charges, respondent judge cannot be
criminally, civilly, or even administratively, held liable.

Good faith and absence of malice, corrupt motives or improper consideration are sufficient defenses
protecting a judicial officer charged with ignorance of the law and promulgation of an unjust decision
from being held accountable for errors of judgment. This, on the premise that no one called upon to
try the facts or interpret the law in the administration of justice can be infallible. 17

Respondent judge could not have seriously jeopardized the rights of the prosecution, even if the
accused invoked the defense of double jeopardy, since the remedy of certiorari is very much
available. Precisely, as has been pointed out in the majority opinion, the defense of double jeopardy
is unavailing when the prosecution is denied due process. This is in fact the office of the prevailing
doctrine - to correct indiscretions of lower court judges - which does not necessarily make them
personally liable. In fact, if respondent judge was indeed in bad faith, he should have given the
prosecution an opportunity to be heard, and after a full-blown trial, acquitted the accused. Then, the
defense of double jeopardy would have been proper and the accused would have gone scot-free.
Thus, in Negado v. Judge Autajay, 18 this Court affirmed the conclusions of the Investigating Justice
of the Court of Appeals that "[w]hen a person seeks administrative sanction against a judge simply
because he has committed an error in deciding the case against such person, when such error can
be elevated to a higher court for review and correction, the action of such person can only be
suspect."

To equate the failure of accused Marcos to comment on the petition before the appellate court, and
consequently invoke the defense of double jeopardy, with the errancy of the assailed order, 19 may
be indulging in needless speculation. And to imply that the influence of the accused who is a
prominent public figure brought about the dismissal order is simply not borne out by the records.

Besides, the challenged order of respondent judge can hardly be considered as grossly erroneous to
merit his dismissal. For, while his reasoning may be erroneous, as it turned out when the reversal of
his decision by the appellate court became final, it is not at all illogical as even the President of the
Republic, with his learned legal advisers, after learning of the dismissal of the cases filed by his
administration against the accused, was quoted as saying that Mrs. Marcos was an "accidental"
beneficiary of the foreign exchange deregulation policy of his administration. 20 Thus, President Fidel
V. Ramos further said that "[t]he forex deregulation applies to everybody . . . . Now the cases filed by
the government against Mrs. Marcos, numbering about 11 out of 90 have become moot and
academic because of the new regulations that have come out of the Monetary Board, but that is to
her advantage." 21 Where the conclusions of the judge in his decision are not without logic or reason,
it cannot be said that he is incompetent or grossly ignorant. 22

It has been said that a judge, like Caesar's wife, must not only be pure but beyond
suspicion. 23 Ideally so. But the cold fact is that every overturned decision provokes suspicion
especially from the successful appellant who feels certain that the lower court indeed erred.
It is settled that "[a] judge should be mindful that his duty is the application of general law to a
particular instance, that ours is a government of laws and not of men, and that he violates his duty
as a minister of justice under such system if he seeks to do what he may personally consider
substantial justice in a particular case and disregards the general law as he knows it to be binding on
him. Such action may have detrimental consequences beyond the immediate controversy. He
should administer his office with due regard to the integrity of the system of the law itself,
remembering that he is not a depositary of arbitrary power, but a judge under the sanction of
law." 24 As it has been said, he must interpret the books, and not unload his ideas.

But while a judge must decide in accordance with existing laws and established jurisprudence, his
own personality, character, convictions, values, experiences and prejudices are only sublimely
insignificant and unconsciously dispensable. In every decision he makes, he is no more and no less
human, his own beliefs, perceptions and imperfections, as well as the laws he is bound to apply, all
having profound influence on his eventual choice. Thus, Mr. Justice Cardozo of the Supreme Court
of the United States once wrote of judges: "We may try to see things as objectively as we please.
None the less, we can never see them with any eyes except our own." 25 Hence, time and again,
lower court judges, if not reversed by the Court of Appeals and this Court, have continued to set new
trails in jurisprudence without exactly conforming with what has been settled. yet, whether reversed
or merely unregarded, they do not receive displeasure from this Court; on the contrary, they remain
to be effective dispensers of everyday justice.

In fine, there is no substantial proof, nay proof beyond reasonable doubt, that respondent judge
issued the assailed order in bad faith or with conscious and deliberate intent to perpetrate an
injustice.

Mr. Justice Malcolm, speaking for this Court In re Horilleno, 26 said that "[i]mpeachment proceedings
before courts have been said, in other jurisdictions, to be in their nature highly penal in character and
to be governed by the rules of law applicable to criminal cases." Mr. Chief Justice Fernando, then
Associate Justice of this Court, reiterated the doctrine in Suerte v. Judge Ugbinar 27 where he said
that "[t]his is to defer the basic concept first announced in 1922 in this jurisdiction . . . in . . . In re
Horilleno that proceedings of this character being in their nature highly penal, the charge must,
therefore, be proved beyond reasonable doubt. To paraphrase the opinion further, there is no
showing of the alleged incompetence and gross ignorance of the law by a preponderance of the
evidence, much less beyond a reasonable doubt. Such an exacting standard has been adhered to
by this Court in subsequent decisions." 28

The law always imputes good faith to judicial action, and the burden is on the one challenging the
same to prove want of it. Contraposed with the "exacting standard" required, complainant-
prosecutors in the instant case failed to prove the absence of good faith on the part of the
respondent judge. Consequently, the presumption that official duty has been regularly performed
stands.

I find it difficult to compare the instant case with those cited in the majority opinion. In Padilla v.
Judge Dizon, 29respondent not only allowed the accused to go scot-free, leaving the Commissioner of
Customs without any relief against the accused, the former likewise ordered the release of
US$3,000.00 to the accused. Thus, respondent judge was found guilty not only of gross ignorance of
the law, but also of gross incompetence, and grave and serious misconduct affecting his integrity
and efficiency, and was consequently dismissed from the service. And, failing to learn a lesson from
his earlier administrative case, respondent judge, after his reinstatement, this time erroneously
acquitted the defendants in four (4) different cases of illegal possession of firearms. Finally the Court
said, "[w]hen it has been clearly demonstrated, as in this case, not only once but four (4) times, that
the judge is either grossly incompetent or grossly ignorant of the penal laws . . . . he becomes unfit
to discharge his judicial office." 30 Unlike former Judge Dizon, this is the first time respondent Judge
Muro is being administratively charged.

In Buenavista v. Judge Garcia, 31 the Court found respondent guilty of "serious misconduct, gross
ignorance of the law, and knowingly rendering an unjust order of judgment" for granting bail to an
accused who was charged with statutory rape, for "improper and immoral intervention in brokering a
compromise of the criminal cases" against the accused, and thereafter for granting the motion to
dismiss the rape case on the basis of an Affidavit of Desistance allegedly executed by the victim who
was then a minor. Certainly, the actuations of the respondent judge in the cited case are far worse
than the complained indiscretions of herein respondent Judge.

In the proceedings instituted against Judge Jocson, 32 he was charged with a litany of administrative
cases, six (6) in all, i.e., from gross misconduct to gross ignorance of the law, to incompetence, to
partiality. While not all the charges were sufficiently proved, respondent judge was found to be
"ignorant of fairly elementary and quite familiar legal principles and administrative regulations, (with)
. . . a marked penchant for applying unorthodox, even strange theories and concepts in the
adjudication of controversies, (and) exhibits indifference to, and even disdain for due process and
the rule of law, applies the law whimsically, capriciously and oppressively, and displays bias and
partiality." The Court thus observed, "[t]he different acts of misconduct proven against respondent
judge demonstrate his unfitness to remain in office and to continue to discharge the functions and
duties of a judge, and warrant the imposition on him of the extreme sanction of dismissal from the
service." There is nothing in the records of the instant case which shows that respondent
Judge Muro, like former Judge Jocson, exhibits a pattern for applying pecant and unaccepted
theories which breed manifest and irreversible injustice.

And, in Uy v. Judge Dizon-Capulong, 33 respondent aggravated her ignorance of the law by her
refusal to abide by the Decision of the appellate court and later of this Court, showing utter
disrespect for and open defiance of higher courts. Consequently, she was not only found guilty of
gross ignorance of the law, but also of grave and serious misconduct prejudicial to the interest of the
judicial service.

Contrastingly, in a fairly recent case, 34 this Court merely imposed a fine of P10,000.00 on
respondent judge who entertained the petition for bail filed by the suspects prior to their actual
arrest, notwithstanding unrefuted allegations that the accused were allegedly relatives of the
congressman who "sponsored" the appointment of respondent to the Judiciary. In other case, 35 this
Court imposed a fine of P5,000.00 on respondent judge for ignorance of the law and grave abuse of
authority after he improperly issued a warrant of arrest and set the case for arraignment, in disregard
of proper procedure. And, still in
another, 36 this Court in dismissing the complaint filed against respondent ruled that a judge cannot
be condemned unless his error is so gross and patent as to produce an inference of ignorance and
bad faith or that he knowingly rendered an unjust decision.

In sum, there is no extrinsic evidence which shows that the assailed order of respondent Judge
Manuel T. Muro was inspired by a conscious and corrupt intent to do a disservice and commit an
atrocity, and thus his dismissal is uncalled for. Where there is no clear indication from the records
that the respondent's assailed decision was inspired by corrupt motives or a reprehensible purpose,
and while there may be a misjudgment, but not a deliberate twisting of facts to justify the assailed
order, dismissal of respondent judge from the service is not proper. 37

Holding respondent judge liable for issuing the challenged order may curtail the independence of
judges and send the wrong signals to them who are supposed to exercise their office without fear of
reprisal, merely for expressing their uncorrupted views. Regretfully, litigants may suffer and gain
eventual justice only after costly and long-drawn-out appeals from erroneous decisions, but these
are necessary evils which must be endured to some extent lest judicial independence and the
growth of the law be stifled.

Unlike collegial courts which afford their members the luxury of a deliberation, a trial judge in
handing down his decisions must brave the loneliness of his solitude and independence. And, while
this Court may slightly bend backwards if only to avoid suspicion of partiality and cliquism to a
brother in the profession, it must also step forward and take the lead to defend him against
unsubstantiated tirades which put to shame and disgrace not only the magistrate on trial but the
entire judicial system as well. As champion — at other times tormentor — of trial and appellate
judges, this Court must be unrelenting in weeding the judiciary of unscrupulous judges, but it must
also be quick in dismissing administrative complaints which serve no other purpose than to harass
them. In dismissing judges from the service, the Court must be circumspect and deliberate, lest it
penalizes them for exercising their independent judgments handed down in good faith.

Respondent judge has impressive academic and professional credentials which, experience shows,
are no longer easy to recruit for the judicial service. Above all, he has served the judiciary with
creditable distinction. It is unfeeling, if not unfair, to purge him without extrinsic evidence of bad faith
and then shatter his hopes of ascending someday the judicial hierarchy which, after all, is the
ultimate dream of every sacrificing trial judge.

I VOTE FOR THE EXONERATION OF RESPONDENT JUDGE.

5) GARCIA VS GARCIA-RECIO

Garcia-Recio vs. Recio

TITLE: Grace J. Garcia-Recio v Rederick A. Recio

CITATION: GR NO. 138322, Oct. 2, 2002 | 366 SCRA 437

FACTS:

Rederick A. Recio, a Filipino, was married to Editha Samson, an Australian Citizen, in Malabon,
Rizal on March 1, 1987. They lived as husband and wife in Australia. However, an Australian
family court issued purportedly a decree of divorce, dissolving the marriage of Rederick and Editha
on May 18, 1989.

On January 12, 1994, Rederick married Grace J. Garcia where it was solemnized at Our lady of
Perpetual Help Church, Cabanatuan City. Since October 22, 1995, the couple lived separately
without prior judicial dissolution of their marriage. As a matter of fact, while they were still in
Australia, their conjugal assets were divided on May 16, 1996, in accordance with their Statutory
Declarations secured in Australia.

Grace filed a Complaint for Declaration of Nullity of Marriage on the ground of bigamy on March 3,
1998, claiming that she learned only in November 1997, Rederick’s marriage with Editha Samson.

ISSUE: Whether the decree of divorce submitted by Rederick Recio is admissible as evidence to
prove his legal capacity to marry petitioner and absolved him of bigamy.

HELD:

The nullity of Rederick’s marriage with Editha as shown by the divorce decree issued was valid and
recognized in the Philippines since the respondent is a naturalized Australian. However, there is
absolutely no evidence that proves respondent’s legal capacity to marry petitioner though the former
presented a divorce decree. The said decree, being a foreign document was inadmissible to court as
evidence primarily because it was not authenticated by the consul/ embassy of the country where it
will be used.

Under Sections 24 and 25 of Rule 132, a writing or document may be proven as a public or official
record of a foreign country by either:

(1) an official publication or

(2) a copy thereof attested by the officer having legal custody of the document. If the record is not
kept in the Philippines, such copy must be:

(a) accompanied by a certificate issued by the proper diplomatic or consular officer in the
Philippine foreign service stationed in the foreign country in which the record is kept and

(b) authenticated by the seal of his office.

Thus, the Supreme Court remands the case to the Regional Trial Court of Cabanatuan City to receive
or trial evidence that will conclusively prove respondent’s legal capacity to marry petitioner and thus
free him on the ground of bigamy.
 THIRD DIVISION

[G.R. No. 138322. October 2, 2001]

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

REDERICK A. RECIO, respondent.

DECISION
PANGANIBAN, J.:

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

The Case

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

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

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

The Facts

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

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

Ruling of the Trial Court

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

Issues

Petitioner submits the following issues for our consideration:

1
The trial court gravely erred in finding that the divorce decree obtained in Australia by
the respondent ipso facto terminated his first marriage to Editha Samson thereby
capacitating him to contract a second marriage with the petitioner.
2

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

certificate of legal capacity to marry constitutes absence of a substantial requisite
voiding the petitioners marriage to the respondent
3

The trial court seriously erred in the application of Art. 26 of the Family Code in this
case.
4

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

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

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

The Courts Ruling

The Petition is partly meritorious.

First Issue:
Proving the Divorce Between Respondent and Editha Samson

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

ART. 11. Where a marriage license is required, each of the contracting parties shall
file separately a sworn application for such license with the proper local civil registrar
which shall specify the following:

xxxxxxxxx

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

xxxxxxxxx

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

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

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

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

Second Issue: Respondents Legal Capacity to Remarry

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

6) NORTHWEST ORIENT AIRLINES VS CA

Lessons Applicable: Territoriality Principle (conflicts of law)

FACTS:

 Northwest Airlines (Northwest) and C.F. Sharp & Company (C.F.), through its Japan branch,
entered into an International Passenger Sales Agency Agreement, whereby the Northwest
authorized the C.F. to sell its air transportation tickets

 March 25, 1980: Unable to remit the proceeds of the ticket sales, Northwest sued C.F. in Tokyo,
Japan, for collection of the unremitted proceeds of the ticket sales, with claim for damages

 April 11, 1980: writ of summons was issued by the 36th Civil Department, Tokyo District Court of
Japan

 The attempt to serve the summons was unsuccessful because Mr. Dinozo was in Manila
and would be back on April 24, 1980

 April 24, 1980: Mr. Dinozo returned to C.F. Office to serve the summons but he refused to
receive claiming that he no longer an employee

 After the 2 attempts of service were unsuccessful, Supreme Court of Japan sent the summons
together with the other legal documents to the Ministry of Foreign Affairs of Japan> Japanese
Embassy in Manila>Ministry (now Department) of Foreign Affairs of the Philippines>Executive
Judge of the Court of First Instance (now Regional Trial Court) of Manila who ordered Deputy
Sheriff Rolando Balingit>C.F. Main Office
  August 28, 1980: C.F. received from Deputy Sheriff Rolando Balingit the writ of summons
but failed to appear at the scheduled hearing.

 January 29, 1981: Tokyo Court rendered judgment ordering the C.F. to pay 83,158,195 Yen and
damages for delay at the rate of 6% per annum from August 28, 1980 up to and until payment is
completed

 March 24, 1981: C.F. received from Deputy Sheriff Balingit copy of the judgment. C.F. did not
appeal so it became final and executory

 May 20, 1983: Northwest filed a suit for enforcement of the judgment a RTC

 July 16, 1983: C.F. averred that the Japanese Court sought to be enforced is null and void and
unenforceable in this jurisdiction having been rendered without due and proper notice and/or
with collusion or fraud and/or upon a clear mistake of law and fact. The foreign judgment in the
Japanese Court sought in this action is null and void for want of jurisdiction over the person of
the defendant considering that this is an action in personam. The process of the Court in Japan
sent to the Philippines which is outside Japanese jurisdiction cannot confer jurisdiction over the
defendant in the case before the Japanese Court of the case at bar

 CA sustained RTC: Court agrees that if the C.F. in a foreign court is a resident in the court of that
foreign court such court could acquire jurisdiction over the person of C.F. but it must be served
in the territorial jurisdiction of the foreign court

ISSUE: W/N the Japanese Court has jurisdiction over C.F.

HELD: YES. instant petition is partly GRANTED, and the challenged decision is AFFIRMED insofar as it
denied NORTHWEST's claims for attorneys fees, litigation expenses, and exemplary damages

 Consequently, the party attacking (C.F.) a foreign judgment has the burden of overcoming the
presumption of its validity

 Accordingly, the presumption of validity and regularity of the service of summons and the
decision thereafter rendered by the Japanese court must stand.

 Applying it, the Japanese law on the matter is presumed to be similar with the Philippine law on
service of summons on a private foreign corporation doing business in the Philippines. Section
14, Rule 14 of the Rules of Court provides that if the defendant is a foreign corporation doing
business in the Philippines, service may be made:

 (1) on its resident agent designated in accordance with law for that purpose, or,
  (2) if there is no such resident agent, on the government official designated by law to
that effect; or

 (3) on any of its officers or agents within the Philippines.

 If the foreign corporation has designated an agent to receive summons, the designation
is exclusive, and service of summons is without force and gives the court no jurisdiction
unless made upon him.

 Where the corporation has no such agent, service shall be made on the government
official designated by law, to wit:

 (a) the Insurance Commissioner in the case of a foreign insurance company

 (b) the Superintendent of Banks, in the case of a foreign banking corporation

 (c) the Securities and Exchange Commission, in the case of other foreign
corporations duly licensed to do business in the Philippines. Whenever service
of process is so made, the government office or official served shall transmit by
mail a copy of the summons or other legal proccess to the corporation at its
home or principal office. The sending of such copy is a necessary part of the
service.

 The service on the proper government official under Section 14, Rule 14 of the Rules of Court, in
relation to Section 128 of the Corporation Code

 Our laws and jurisprudence indicate a purpose to assimilate foreign corporations, duly licensed
to do business here, to the status of domestic corporations

 We think it would be entirely out of line with this policy should we make a discrimination against
a foreign corporation, like the petitioner, and subject its property to the harsh writ of seizure by
attachment when it has complied not only with every requirement of law made specially of
foreign corporations, but in addition with every requirement of law made of domestic
corporations

 In as much as SHARP was admittedly doing business in Japan through its four duly registered
branches at the time the collection suit against it was filed, then in the light of the processual
presumption, SHARP may be deemed a resident of Japan, and, as such, was amenable to the
jurisdiction of the courts therein and may be deemed to have assented to the said courts' lawful
methods of serving process.

 Accordingly, the extraterritorial service of summons on it by the Japanese Court was valid not
only under the processual presumption but also because of the presumption of regularity of
performance of official duty.
 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 112573 February 9, 1995

NORTHWEST ORIENT AIRLINES, INC. petitioner,

vs.
COURT OF APPEALS and C.F. SHARP & COMPANY INC., respondents.

PADILLA, JR., J.:

This petition for review on certiorari seeks to set aside the decision of the Court of Appeals affirming
the dismissal of the petitioner's complaint to enforce the judgment of a Japanese court. The principal
issue here is whether a Japanese court can acquire jurisdiction over a Philippine corporation doing
business in Japan by serving summons through diplomatic channels on the Philippine corporation at
its principal office in Manila after prior attempts to serve summons in Japan had failed.

Petitioner Northwest Orient Airlines, Inc. (hereinafter NORTHWEST), a corporation organized under
the laws of the State of Minnesota, U.S.A., sought to enforce in Civil Case No. 83-17637 of the
Regional Trial Court (RTC), Branch 54, Manila, a judgment rendered in its favor by a Japanese court
against private respondent C.F. Sharp & Company, Inc., (hereinafter SHARP), a corporation
incorporated under Philippine laws.

As found by the Court of Appeals in the challenged decision of 10 November 1993, 1 the following
are the factual and procedural antecedents of this controversy:

On May 9, 1974, plaintiff Northwest Airlines and defendant C.F. Sharp & Company,
through its Japan branch, entered into an International Passenger Sales Agency
Agreement, whereby the former authorized the latter to sell its air transportation
tickets. Unable to remit the proceeds of the ticket sales made by defendant on behalf
of the plaintiff under the said agreement, plaintiff on March 25, 1980 sued defendant
in Tokyo, Japan, for collection of the unremitted proceeds of the ticket sales, with
claim for damages.

On April 11, 1980, a writ of summons was issued by the 36th Civil Department,
Tokyo District Court of Japan against defendant at its office at the Taiheiyo Building,
3rd floor, 132, Yamashita-cho, Naka-ku, Yokohoma, Kanagawa Prefecture. The
attempt to serve the summons was unsuccessful because the bailiff was advised by
a person in the office that Mr. Dinozo, the person believed to be authorized to receive
court processes was in Manila and would be back on April 24, 1980.
On April 24, 1980, bailiff returned to the defendant's office to serve the summons. Mr.
Dinozo refused to accept the same claiming that he was no longer an employee of
the defendant.

After the two attempts of service were unsuccessful, the judge of the Tokyo District
Court decided to have the complaint and the writs of summons served at the head
office of the defendant in Manila. On July 11, 1980, the Director of the Tokyo District
Court requested the Supreme Court of Japan to serve the summons through
diplomatic channels upon the defendant's head office in Manila.

On August 28, 1980, defendant received from Deputy Sheriff Rolando Balingit the
writ of summons (p. 276, Records). Despite receipt of the same, defendant failed to
appear at the scheduled hearing. Thus, the Tokyo Court proceeded to hear the
plaintiff's complaint and on [January 29, 1981], rendered judgment ordering the
defendant to pay the plaintiff the sum of 83,158,195 Yen and damages for delay at
the rate of 6% per annum from August 28, 1980 up to and until payment is completed
(pp. 12-14, Records).

On March 24, 1981, defendant received from Deputy Sheriff Balingit copy of the
judgment. Defendant not having appealed the judgment, the same became final and
executory.

Plaintiff was unable to execute the decision in Japan, hence, on May 20, 1983, a suit
for enforcement of the judgment was filed by plaintiff before the Regional Trial Court
of Manila Branch 54.2

On July 16, 1983, defendant filed its answer averring that the judgment of the
Japanese Court sought to be enforced is null and void and unenforceable in this
jurisdiction having been rendered without due and proper notice to the defendant
and/or with collusion or fraud and/or upon a clear mistake of law and fact (pp. 41-45,
Rec.).

Unable to settle the case amicably, the case was tried on the merits. After the plaintiff
rested its case, defendant on April 21, 1989, filed a Motion for Judgment on a
Demurrer to Evidence based on two grounds:
(1) the foreign judgment sought to be enforced is null and void for want of jurisdiction
and (2) the said judgment is contrary to Philippine law and public policy and rendered
without due process of law. Plaintiff filed its opposition after which the court a
quo rendered the now assailed decision dated June 21, 1989 granting the demurrer
motion and dismissing the complaint (Decision, pp. 376-378, Records). In granting
the demurrer motion, the trial court held that:

The foreign judgment in the Japanese Court sought in this action is

null and void for want of jurisdiction over the person of the defendant
considering that this is an action in personam; the Japanese Court
did not acquire jurisdiction over the person of the defendant because
jurisprudence requires that the defendant be served with summons in
Japan in order for the Japanese Court to acquire jurisdiction over it,
the process of the Court in Japan sent to the Philippines which is
outside Japanese jurisdiction cannot confer jurisdiction over the
defendant in the case before the Japanese Court of the case at
bar. Boudard versus Tait 67 Phil. 170. The plaintiff contends that the
 Japanese Court acquired jurisdiction because the defendant is a
resident of Japan, having four (4) branches doing business therein
and in fact had a permit from the Japanese government to conduct
business in Japan (citing the exhibits presented by the plaintiff); if this
is so then service of summons should have been made upon the
defendant in Japan in any of these alleged four branches; as
admitted by the plaintiff the service of the summons issued by the
Japanese Court was made in the Philippines thru a Philippine Sheriff.
This Court agrees that if the defendant in a foreign court is a resident
in the court of that foreign court such court could acquire jurisdiction
over the person of the defendant but it must be served upon the
defendant in the territorial jurisdiction of the foreign court. Such is not
the case here because the defendant was served with summons in
the Philippines and not in Japan.

Unable to accept the said decision, plaintiff on July 11, 1989 moved for
reconsideration of the decision, filing at the same time a conditional Notice of Appeal,
asking the court to treat the said notice of appeal "as in effect after and upon
issuance of the court's denial of the motion for reconsideration."

Defendant opposed the motion for reconsideration to which a Reply dated August 28,
1989 was filed by the plaintiff.

On October 16, 1989, the lower court disregarded the Motion for Reconsideration
and gave due course to the plaintiff's Notice of Appeal. 3

In its decision, the Court of Appeals sustained the trial court. It agreed with the latter in its reliance
upon Boudard vs.Tait 4 wherein it was held that "the process of the court has no extraterritorial effect
and no jurisdiction is acquired over the person of the defendant by serving him beyond the
boundaries of the state." To support its position, the Court of Appeals further stated:

In an action strictly in personam, such as the instant case, personal service of

summons within the forum is required for the court to acquire jurisdiction over the
defendant (Magdalena Estate Inc. vs. Nieto, 125 SCRA 230). To confer jurisdiction
on the court, personal or substituted service of summons on the defendant not
extraterritorial service is necessary (Dial Corp vs. Soriano, 161 SCRA 739).

But while plaintiff-appellant concedes that the collection suit filed is an action in
personam, it is its theory that a distinction must be made between an action in
personam against a resident defendant and an action in personam against a non-
resident defendant. Jurisdiction is acquired over a non-resident defendant only if he
is served personally within the jurisdiction of the court and over a resident defendant
if by personal, substituted or constructive service conformably to statutory
authorization. Plaintiff-appellant argues that since the defendant-appellee maintains
branches in Japan it is considered a resident defendant. Corollarily, personal,
substituted or constructive service of summons when made in compliance with the
procedural rules is sufficient to give the court jurisdiction to render judgment in
personam.

Such an argument does not persuade.

 It is a general rule that processes of the court cannot lawfully be served outside the
territorial limits of the jurisdiction of the court from which it issues (Carter vs. Carter;
41 S.E. 2d 532, 201) and this is regardless of the residence or citizenship of the party
thus served (Iowa-Rahr vs. Rahr, 129 NW 494, 150 Iowa 511, 35 LRC, NS, 292, Am.
Case 1912 D680). There must be actual service within the proper territorial limits on
defendant or someone authorized to accept service for him. Thus, a defendant,
whether a resident or not in the forum where the action is filed, must be served with
summons within that forum.

But even assuming a distinction between a resident defendant and non-resident

defendant were to be adopted, such distinction applies only to natural persons and
not in the corporations. This finds support in the concept that "a corporation has no
home or residence in the sense in which those terms are applied to natural persons"
(Claude Neon Lights vs. Phil. Advertising Corp., 57 Phil. 607). Thus, as cited by the
defendant-appellee in its brief:

Residence is said to be an attribute of a natural person, and can be predicated on an

artificial being only by more or less imperfect analogy. Strictly speaking, therefore, a
corporation can have no local residence or habitation. It has been said that a
corporation is a mere ideal existence, subsisting only in contemplation of law — an
invisible being which can have, in fact, no locality and can occupy no space, and
therefore cannot have a dwelling place. (18 Am. Jur. 2d, p. 693 citing Kimmerle v.
Topeka, 88 370, 128 p. 367; Wood v. Hartfold F. Ins. Co., 13 Conn 202)

Jurisprudence so holds that the foreign or domestic character of a corporation is to

be determined by the place of its origin where its charter was granted and not by the
location of its business activities (Jennings v. Idaho Rail Light & P. Co., 26 Idaho
703, 146 p. 101), A corporation is a "resident" and an inhabitant of the state in which
it is incorporated and no other (36 Am. Jur. 2d, p. 49).

Defendant-appellee is a Philippine Corporation duly organized under the Philippine

laws. Clearly, its residence is the Philippines, the place of its incorporation, and not
Japan. While defendant-appellee maintains branches in Japan, this will not make it a
resident of Japan. A corporation does not become a resident of another by engaging
in business there even though licensed by that state and in terms given all the rights
and privileges of a domestic corporation (Galveston H. & S.A.R. Co. vs. Gonzales,
151 US 496, 38 L ed. 248, 4 S Ct. 401).

On this premise, defendant appellee is a non-resident corporation. As such, court

processes must be served upon it at a place within the state in which the action is
brought and not elsewhere (St. Clair vs. Cox, 106 US 350, 27 L ed. 222, 1 S. Ct.
354).5

It then concluded that the service of summons effected in Manila or beyond the territorial boundaries
of Japan was null and did not confer jurisdiction upon the Tokyo District Court over the person of
SHARP; hence, its decision was void.

Unable to obtain a reconsideration of the decision, NORTHWEST elevated the case to this Court
contending that the respondent court erred in holding that SHARP was not a resident of Japan and
that summons on SHARP could only be validly served within that country.
A foreign judgment is presumed to be valid and binding in the country from which it comes, until the
contrary is shown. It is also proper to presume the regularity of the proceedings and the giving of
due notice therein.6

Under Section 50, Rule 39 of the Rules of Court, a judgment in an action in personam of a tribunal of
a foreign country having jurisdiction to pronounce the same is presumptive evidence of a right as
between the parties and their successors-in-interest by a subsequent title. The judgment may,
however, be assailed by evidence of want of jurisdiction, want of notice to the party, collusion, fraud,
or clear mistake of law or fact. Also, under Section 3 of Rule 131, a court, whether of the Philippines
or elsewhere, enjoys the presumption that it was acting in the lawful exercise of jurisdiction and has
regularly performed its official duty.

Consequently, the party attacking a foreign judgment has the burden of overcoming the presumption
of its validity.7Being the party challenging the judgment rendered by the Japanese court, SHARP had
the duty to demonstrate the invalidity of such judgment. In an attempt to discharge that burden, it
contends that the extraterritorial service of summons effected at its home office in the Philippines
was not only ineffectual but also void, and the Japanese Court did not, therefore acquire jurisdiction
over it.

It is settled that matters of remedy and procedure such as those relating to the service of process
upon a defendant are governed by the lex fori or the internal law of the forum.8 In this case, it is the
procedural law of Japan where the judgment was rendered that determines the validity of the
extraterritorial service of process on SHARP. As to what this law is is a question of fact, not of law. It
may not be taken judicial notice of and must be pleaded and proved like any other fact.9 Sections 24
and 25, Rule 132 of the Rules of Court provide that it may be evidenced by an official publication or
by a duly attested or authenticated copy thereof. It was then incumbent upon SHARP to present
evidence as to what that Japanese procedural law is and to show that under it, the assailed
extraterritorial service is invalid. It did not. Accordingly, the presumption of validity and regularity of
the service of summons and the decision thereafter rendered by the Japanese court must stand.

Alternatively in the light of the absence of proof regarding Japanese

law, the presumption of identity or similarity or the so-called processual presumption 10 may be
invoked. Applying it, the Japanese law on the matter is presumed to be similar with the Philippine
law on service of summons on a private foreign corporation doing business in the Philippines.
Section 14, Rule 14 of the Rules of Court provides that if the defendant is a foreign corporation doing
business in the Philippines, service may be made: (1) on its resident agent designated in
accordance with law for that purpose, or, (2) if there is no such resident agent, on the government
official designated by law to that effect; or (3) on any of its officers or agents within the Philippines.

If the foreign corporation has designated an agent to receive summons, the designation is exclusive,
and service of summons is without force and gives the court no jurisdiction unless made upon him. 11

Where the corporation has no such agent, service shall be made on the government official
designated by law, to wit: (a) the Insurance Commissioner in the case of a foreign insurance
company; (b) the Superintendent of Banks, in the case of a foreign banking corporation; and (c) the
Securities and Exchange Commission, in the case of other foreign corporations duly licensed to do
business in the Philippines. Whenever service of process is so made, the government office or
official served shall transmit by mail a copy of the summons or other legal proccess to the
corporation at its home or principal office. The sending of such copy is a necessary part of the
service. 12
SHARP contends that the laws authorizing service of process upon the Securities and Exchange
Commission, the Superintendent of Banks, and the Insurance Commissioner, as the case may be,
presuppose a situation wherein the foreign corporation doing business in the country no longer has
any branches or offices within the Philippines. Such contention is belied by the pertinent provisions
of the said laws. Thus, Section 128 of the Corporation Code 13 and Section 190 of the Insurance
Code 14 clearly contemplate two situations: (1) if the corporation had left the Philippines or had
ceased to transact business therein, and (2) if the corporation has no designated agent. Section 17
of the General Banking Act 15 does not even speak a corporation which had ceased to transact
business in the Philippines.

Nowhere in its pleadings did SHARP profess to having had a resident agent authorized to receive
court processes in Japan. This silence could only mean, or least create an impression, that it had
none. Hence, service on the designated government official or on any of SHARP's officers or agents
in Japan could be availed of. The respondent, however, insists that only service of any of its officers
or employees in its branches in Japan could be resorted to. We do not agree. As found by the
respondent court, two attempts at service were made at SHARP's Yokohama branch. Both were
unsuccessful. On the first attempt, Mr. Dinozo, who was believed to be the person authorized to
accept court process, was in Manila. On the second, Mr. Dinozo was present, but to accept the
summons because, according to him, he was no longer an employee of SHARP. While it may be
true that service could have been made upon any of the officers or agents of SHARP at its three
other branches in Japan, the availability of such a recourse would not preclude service upon the
proper government official, as stated above.

As found by the Court of Appeals, it was the Tokyo District Court which ordered that summons for
SHARP be served at its head office in the Philippine's after the two attempts of service had
failed. 16 The Tokyo District Court requested the Supreme Court of Japan to cause the delivery of the
summons and other legal documents to the Philippines. Acting on that request, the Supreme Court
of Japan sent the summons together with the other legal documents to the Ministry of Foreign Affairs
of Japan which, in turn, forwarded the same to the Japanese Embassy in Manila . Thereafter, the
court processes were delivered to the Ministry (now Department) of Foreign Affairs of the
Philippines, then to the Executive Judge of the Court of First Instance (now Regional Trial Court) of
Manila, who forthwith ordered Deputy Sheriff Rolando Balingit to serve the same on SHARP at its
principal office in Manila. This service is equivalent to service on the proper government official
under Section 14, Rule 14 of the Rules of Court, in relation to Section 128 of the Corporation Code.
Hence, SHARP's contention that such manner of service is not valid under Philippine laws holds no
water.17

In deciding against the petitioner, the respondent court sustained the trial court's reliance
on Boudard vs. Tait 18where this Court held:

The fundamental rule is that jurisdiction in personam over nonresidents, so as to

sustain a money judgment, must be based upon personal service within the state
which renders the judgment.

xxx xxx xxx

The process of a court, has no extraterritorial effect, and no jurisdiction is acquired

over the person of the defendant by serving him beyond the boundaries of the state.
Nor has a judgment of a court of a foreign country against a resident of this country
having no property in such foreign country based on process served here, any effect
here against either the defendant personally or his property situated here.
 Process issuing from the courts of one state or country cannot run into another, and
although a nonresident defendant may have been personally served with such
process in the state or country of his domicile, it will not give such jurisdiction as to
authorize a personal judgment against him.

It further availed of the ruling in Magdalena Estate, Inc. vs. Nieto 19 and Dial Corp. vs. Soriano, 20 as
well as the principle laid down by the Iowa Supreme Court in the 1911 case of Raher vs. Raher. 21

The first three cases are, however, inapplicable. Boudard involved the enforcement of a judgment of
the civil division of the Court of First Instance of Hanoi, French Indo-China. The trial court dismissed
the case because the Hanoi court never acquired jurisdiction over the person of the defendant
considering that "[t]he, evidence adduced at the trial conclusively proves that neither the appellee
[the defendant] nor his agent or employees were ever in Hanoi, French Indo-China; and that the
deceased Marie Theodore Jerome Boudard had never, at any time, been his employee."
In Magdalena Estate, what was declared invalid resulting in the failure of the court to acquire
jurisdiction over the person of the defendants in an action in personam was the service of summons
through publication against non-appearing resident defendants. It was claimed that the latter
concealed themselves to avoid personal service of summons upon them. In Dial, the defendants
were foreign corporations which were not, domiciled and licensed to engage in business in the
Philippines and which did not have officers or agents, places of business, or properties here. On the
other hand, in the instant case, SHARP was doing business in Japan and was maintaining four
branches therein.

Insofar as to the Philippines is concerned, Raher is a thing of the past. In that case, a divided
Supreme Court of Iowa declared that the principle that there can be no jurisdiction in a court of a
territory to render a personal judgment against anyone upon service made outside its limits was
applicable alike to cases of residents and non-residents. The principle was put at rest by the United
States Supreme Court when it ruled in the 1940 case of Milliken vs. Meyer 22 that domicile in the
state is alone sufficient to bring an absent defendant within the reach of the state's jurisdiction for
purposes of a personal judgment by means of appropriate substituted service or personal service
without the state. This principle is embodied in section 18, Rule 14 of the Rules of Court which
allows service of summons on residents temporarily out of the Philippines to be made out of the
country. The rationale for this rule was explained in Milliken as follows:

[T]he authority of a state over one of its citizens is not terminated by the mere fact of
his absence from the state. The state which accords him privileges and affords
protection to him and his property by virtue of his domicile may also exact reciprocal
duties. "Enjoyment of the privileges of residence within the state, and the attendant
right to invoke the protection of its laws, are inseparable" from the various incidences
of state citizenship. The responsibilities of that citizenship arise out of the relationship
to the state which domicile creates. That relationship is not dissolved by mere
absence from the state. The attendant duties, like the rights and privileges incident to
domicile, are not dependent on continuous presence in the state. One such incident
of domicile is amenability to suit within the state even during sojourns without the
state, where the state has provided and employed a reasonable method for apprising
such an absent party of the proceedings against him. 23

The domicile of a corporation belongs to the state where it was incorporated. 24 In a strict technical
sense, such domicile as a corporation may have is single in its essence and a corporation can have
only one domicile which is the state of its creation. 25
Nonetheless, a corporation formed in one-state may, for certain purposes, be regarded a resident in
another state in which it has offices and transacts business. This is the rule in our jurisdiction
and apropos thereto, it may be necessery to quote what we stated in State Investment House,
Inc, vs. Citibank, N.A., 26 to wit:

The issue is whether these Philippine branches or units may be considered

"residents of the Philippine Islands" as that term is used in Section 20 of the
Insolvency Law . . . or residents of the state under the laws of which they were
respectively incorporated. The answer cannot be found in the Insolvency Law itself,
which contains no definition of the term, resident, or any clear indication of its
meaning. There are however other statutes, albeit of subsequent enactment and
effectivity, from which enlightening notions of the term may be derived.

The National Internal Revenue Code declares that the term "'resident foreign
corporation' applies to a foreign corporation engaged in trade or business within the
Philippines," as distinguished from a "'non-resident foreign corporation' . . . (which is
one) not engaged in trade or bussiness within the Philippines." [Sec. 20, pars. (h)
and (i)].

The Offshore Banking Law, Presidential Decree No. 1034, states "that branches,
subsidiaries, affiliation, extension offices or any other units of corporation or juridical
person organized under the laws of any foreign country operating in the Philippines
shall be considered residents of the Philippines. [Sec. 1(e)].

The General Banking Act, Republic Act No. 337, places "branches and agencies in
the Philippines of foreign banks . . . (which are) called Philippine branches," in the
same category as "commercial banks, savings associations, mortgage banks,
development banks, rural banks, stock savings and loan associations" (which have
been formed and organized under Philippine laws), making no distinction between
the former and the latter in so far as the terms "banking institutions" and "bank" are
used in the Act [Sec. 2], declaring on the contrary that in "all matters not specifically
covered by special provisions applicable only to foreign banks, or their branches and
agencies in the Philippines, said foreign banks or their branches and agencies
lawfully doing business in the Philippines "shall be bound by all laws, rules, and
regulations applicable to domestic banking corporations of the same class, except
such laws, rules and regulations as provided for the creation, formation, organization,
or dissolution of corporations or as fix the relation, liabilities, responsibilities, or duties
of members, stockholders or officers of corporation. [Sec. 18].

This court itself has already had occasion to hold [Claude Neon Lights, Fed. Inc. vs.
Philippine Advertising Corp., 57 Phil. 607] that a foreign corporation licitly doing
business in the Philippines, which is a defendant in a civil suit, may not be
considered a non-resident within the scope of the legal provision authorizing
attachment against a defendant not residing in the Philippine Islands; [Sec. 424, in
relation to Sec. 412 of Act No. 190, the Code of Civil Procedure; Sec. 1(f), Rule 59 of
the Rules of 1940, Sec. 1(f), Rule 57, Rules of 1964] in other words, a preliminary
attachment may not be applied for and granted solely on the asserted fact that the
defendant is a foreign corporation authorized to do business in the Philippines — and
is consequently and necessarily, "a party who resides out of the Philippines."
Parenthetically, if it may not be considered as a party not residing in the Philippines,
or as a party who resides out of the country, then, logically, it must be considered a
 party who does reside in the Philippines, who is a resident of the country. Be this as
it may, this Court pointed out that:

. . . Our laws and jurisprudence indicate a purpose to assimilate

foreign corporations, duly licensed to do business here, to the status
of domestic corporations. (Cf. Section 73, Act No. 1459, and Marshall
Wells Co. vs. Henry W. Elser & Co., 46 Phil. 70, 76; Yu Cong Eng vs.
Trinidad, 47 Phil. 385, 411) We think it would be entirely out of line
with this policy should we make a discrimination against a foreign
corporation, like the petitioner, and subject its property to the harsh
writ of seizure by attachment when it has complied not only with
every requirement of law made specially of foreign corporations, but
in addition with every requirement of law made of domestic
corporations. . . .

Obviously, the assimilation of foreign corporations authorized to do business in the

Philippines "to the status of domestic corporations, subsumes their being found and
operating as corporations, hence, residing, in the country.

The same principle is recognized in American law: that the residence of a

corporation, if it can be said to have a residence, is necessarily where it exercises
corporate functions . . .;" that it is considered as dwelling "in the place where its
business is done . . .," as being "located where its franchises are exercised . . .," and
as being "present where it is engaged in the prosecution of the corporate enterprise;"
that a "foreign corporation licensed to do business in a state is a resident of any
country where it maintains an office or agent for transaction of its usual and
customary business for venue purposes;" and that the "necessary element in its
signification is locality of existence." [Words and Phrases, Permanent Ed., vol. 37,
pp. 394, 412, 493].

In as much as SHARP was admittedly doing business in Japan through its four duly registered
branches at the time the collection suit against it was filed, then in the light of the processual
presumption, SHARP may be deemed a resident of Japan, and, as such, was amenable to the
jurisdiction of the courts therein and may be deemed to have assented to the said courts' lawful
methods of serving process. 27

Accordingly, the extraterritorial service of summons on it by the Japanese Court was valid not only
under the processual presumption but also because of the presumption of regularity of performance
of official duty.

We find NORTHWEST's claim for attorney's fees, litigation expenses, and exemplary damages to be
without merit. We find no evidence that would justify an award for attorney's fees and litigation
expenses under Article 2208 of the Civil Code of the Philippines. Nor is an award for exemplary
damages warranted. Under Article 2234 of the Civil Code, before the court may consider the
question of whether or not exemplary damages should be awarded, the plaintiff must show that he is
entitled to moral, temperate, or compensatory damaged. There being no such proof presented by
NORTHWEST, no exemplary damages may be adjudged in its favor.

WHEREFORE, the instant petition is partly GRANTED, and the challenged decision is AFFIRMED
insofar as it denied NORTHWEST's claims for attorneys fees, litigation expenses, and exemplary
damages but REVERSED insofar as in sustained the trial court's dismissal of NORTHWEST's
complaint in Civil Case No. 83-17637 of Branch 54 of the Regional Trial Court of Manila, and
another in its stead is hereby rendered ORDERING private respondent C.F. SHARP L COMPANY,
INC. to pay to NORTHWEST the amounts adjudged in the foreign judgment subject of said case,
with interest thereon at the legal rate from the filing of the complaint therein until the said foreign
judgment is fully satisfied.

Costs against the private respondent.

SO ORDERED.

Padilla, Bellosillo, Quaison and Kapunan, JJ., concur.

7) LAUREANO VS CA

Menandro B. Laureano, petitioner, versus Court of Appeals and

Singapore Airlines Limited, respondents
February 2, 2000

Facts:

In 1978, plaintiff Menandro B. Laureano, then Director of Flight Operations and Chief
Pilot of Air Manila, applied for employment with defendant company through its
Area Manager in Manila. Plaintiff’s appointment was confirmed effective July 21, 1979.
On the said date, the defendant also offered plaintiff an extension of his two-year
contract to five (5) years effective January 21, 1979 to January 20,1984 subject to the
terms and conditions set forth in the contract of employment, which the latter accepted.

Sometime in 1982, defendant initiated cost-cutting measures due to recession.

Seventeen (17) expatriate captains in the Airbus fleet were found in excess of the
defendant’s requirements. Defendant informed its expatriate pilots including plaintiff of
the situation and advised them to take advance leaves. It did not however immediately
terminate A-300 pilots. It reviewed their qualifications for possible promotion to the B-
747 fleet. Among the 17 Airbus pilots reviewed, 12 were found qualified. Unfortunately,
plaintiff was not one of the 12. On October 5, 1982, defendant informed plaintiff of his
termination effective November 1, 1982 and that he will be paid three (3) months salary
in lieu of three months notice but defendantgave only two (2) months notice and one (1)
month salary.

Aggrieved, plaintiff on June 29, 1983, instituted a case for illegal dismissal before the
Labor Arbiter. Defendant on February 11, 1987 filed a motion to dismiss on
jurisdictional grounds since the plaintiff was employed in Singapore and all other
aspects of his employment contract were executed in Singapore, therefore, Singapore
laws should apply.

Issue:

Whether or not art.3 of the civil code is applicable in the case bar.
Held:

Yes, the parties are charged with full knowledge of the existing laws at the time they
entered into a contract and at the time it is to be operative –and , a person is presumed
to be more knowledgeable about his own state law than his alien or foreign
comtemporary.

All these considered, the supreme court found sufficient factual and legal basis to
conclude that petitioners unlawful termination was for an authorized cause, for which
he was given ample notice and opportunity to be heard by respondent company.

SECOND DIVISION

[G.R. No. 114776. February 2, 2000]

MENANDRO B. LAUREANO, petitioner, vs. COURT OF APPEALS AND

SINGAPORE AIRLINES LIMITED, respondents.

DECISION

QUISUMBING, J.:

This petition for review on certiorari under Rule 45 of the Rules of Court seeks
to reverse the Decision of the Court of Appeals, dated October 29, 1993, in
C.A. G.R. No. CV 34476, as well as its Resolution dated February 28, 1994,
which denied the motion for reconsideration.

The facts of the case as summarized by the respondent appellate court are as
follows:

"Sometime in 1978, plaintiff [Menandro B. Laureano, herein

petitioner], then Director of Flight Operations and Chief Pilot of Air
Manila, applied for employment with defendant company [herein
private respondent] through its Area Manager in Manila.

On September 30, 1978, after the usual personal interview,

defendant wrote to plaintiff, offering a contract of employment as
an expatriate B-707 captain for an original period of two (2) years
commencing on January 21, 1978, Plaintiff accepted the offer and
commenced working on January 20, 1979. After passing the six-
month probation period, plaintiff's appointment was confirmed
effective July 21, 1979. (Annex "B", p. 30, Rollo).
On July 21, 1979, defendant offered plaintiff an extension of his
two-year contract to five (5) years effective January 21, 1979 to
January 20, 1984 subject to the terms and conditions set forth in
the contract of employment, which the latter accepted (Annex "C",
p. 31, Rec.).

During his service as B-707 captain, plaintiff on August 24, 1980,

while in command of a flight, committed a noise violation offense
at the Zurich Airport, for which plaintiff apologized. (Exh. "3", p.
307, Rec.).

Sometime in 1980, plaintiff featured in a tail scraping incident

wherein the tail of the aircraft scraped or touched the runway
during landing. He was suspended for a few days until he was
investigated by a board headed by Capt. Choy. He was
reprimanded. Scjuris

On September 25, 1981, plaintiff was invited to take a course of

A-300 conversion training at Aeroformacion, Toulouse, France at
defendant's expense. Having successfully completed and passed
the training course, plaintiff was cleared on April 7, 1981 for solo
duty as captain of the Airbus A-300 and subsequently appointed
as captain of the A-300 fleet commanding an Airbus A-300 in
flights over Southeast Asia. (Annexes "D", "E" and "F", pp. 34-38,
Rec.).

Sometime in 1982, defendant, hit by a recession, initiated cost-

cutting measures. Seventeen (17) expatriate captains in the
Airbus fleet were found in excess of the defendant's requirement
(t.s.n., July 6, 1988. p. 11). Consequently, defendant informed its
expatriate pilots including plaintiff of the situation and advised
them to take advance leaves. (Exh. "15", p. 466, Rec.).

Realizing that the recession would not be for a short time,

defendant decided to terminate its excess personnel (t.s.n., July
6, 1988, p. 17). It did not, however, immediately terminate it's A-
300 pilots. It reviewed their qualifications for possible promotion to
the B-747 fleet. Among the 17 excess Airbus pilots reviewed,
twelve were found qualified. Unfortunately, plaintiff was not one of
the twelve. Jurissc
On October 5, 1982, defendant informed plaintiff of his termination
effective November 1, 1982 and that he will be paid three (3)
months salary in lieu of three months notice (Annex "I", pp. 41-42,
Rec.). Because he could not uproot his family on such short
notice, plaintiff requested a three-month notice to afford him time
to exhaust all possible avenues for reconsideration and retention.
Defendant gave only two (2) months notice and one (1) month
salary. (t.s.n., Nov. 12, 1987. p. 25).

Aggrieved, plaintiff on June 29, 1983, instituted a case for illegal

dismissal before the Labor Arbiter. Defendant moved to dismiss
on jurisdictional grounds. Before said motion was resolved, the
complaint was withdrawn. Thereafter, plaintiff filed the instant
case for damages due to illegal termination of contract of services
before the court a quo (Complaint, pp. 1-10, Rec.).

Again, defendant on February 11, 1987 filed a motion to dismiss

alleging inter alia: (1) that the court has no jurisdiction over the
subject matter of the case, and (2) that Philippine courts have no
jurisdiction over the instant case. Defendant contends that the
complaint is for illegal dismissal together with a money claim
arising out of and in the course of plaintiff's employment "thus it is
the Labor Arbiter and the NLRC who have the jurisdiction
pursuant to Article 217 of the Labor Code" and that, since plaintiff
was employed in Singapore, all other aspects of his employment
contract and/or documents executed in Singapore. Thus,
defendant postulates that Singapore laws should apply and courts
thereat shall have jurisdiction. (pp. 50-69, Rec.). Misjuris

In traversing defendant's arguments, plaintiff claimed that: (1)

where the items demanded in a complaint are the natural
consequences flowing from a breach of an obligation and not
labor benefits, the case is intrinsically a civil dispute; (2) the case
involves a question that is beyond the field of specialization of
labor arbiters; and (3) if the complaint is grounded not on the
employee's dismissal per se but on the manner of said dismissal
and the consequence thereof, the case falls under the jurisdiction
of the civil courts. (pp. 70-73, Rec.)

On March 23, 1987, the court a quo denied defendant's motion to

dismiss (pp. 82-84, Ibid). The motion for reconsideration was
likewise denied. (p. 95 ibid)
 On September 16, 1987, defendant filed its answer reiterating the
grounds relied upon in its motion to dismiss and further arguing
that plaintiff is barred by laches, waiver, and estoppel from
instituting the complaint and that he has no cause of action. (pp.
102-115)" [1]

On April 10, 1991, the trial court handed down its decision in favor of plaintiff.
The dispositive portion of which reads:

"WHEREFORE, judgment is hereby rendered in favor of plaintiff

Menandro Laureano and against defendant Singapore Airlines
Limited, ordering defendant to pay plaintiff the amounts of -

SIN$396,104.00, or its equivalent in Philippine currency at the

current rate of exchange at the time of payment, as and for
unearned compensation with legal interest from the filing of the
complaint until fully paid; Jjlex

SIN$154,742.00, or its equivalent in Philippine currency at the

current rate of exchange at the time of payment; and the further
amounts of P67,500.00 as consequential damages with legal
interest from the filing of the complaint until fully paid;

P1,000,000.00 as and for moral damages; P1,000,000.00 as and

for exemplary damages; and P100,000.00 as and for attorney's
fees.

Costs against defendant.

SO ORDERED." [2]

Singapore Airlines timely appealed before the respondent court and raised the
issues of jurisdiction, validity of termination, estoppel, and damages.

On October 29, 1993, the appellate court set aside the decision of the trial
court, thus,

"...In the instant case, the action for damages due to illegal
termination was filed by plaintiff-appellee only on January 8, 1987
or more than four (4) years after the effectivity date of his
dismissal on November 1, 1982. Clearly, plaintiff-appellee's action
has already prescribed.
 WHEREFORE, the appealed decision is hereby REVERSED and
SET ASIDE. The complaint is hereby dismissed.

SO ORDERED." [3]
Newmiso

Petitioner's and Singapore Airlines' respective motions for reconsideration

were denied.

Now, before the Court, petitioner poses the following queries:

1. IS THE PRESENT ACTION ONE BASED ON CONTRACT

WHICH PRESCRIBES IN TEN YEARS UNDER ARTICLE 1144
OF THE NEW CIVIL CODE OR ONE FOR DAMAGES ARISING
FROM AN INJURY TO THE RIGHTS OF THE PLAINTIFF
WHICH PRESCRIBES IN FOUR YEARS UNDER ARTICLE 1146
OF THE NEW CIVIL CODE?

2. CAN AN EMPLOYEE WITH A FIXED PERIOD OF

EMPLOYMENT BE RETRENCHED BY HIS EMPLOYER?

3. CAN THERE BE VALID RETRENCHMENT IF AN EMPLOYER

MERELY FAILS TO REALIZE THE EXPECTED PROFITS EVEN
IF IT WERE NOT, IN FACT, INCURRING LOSSES?

At the outset, we find it necessary to state our concurrence on the assumption

of jurisdiction by the Regional Trial Court of Manila, Branch 9. The trial court
rightly ruled on the application of Philippine law, thus: Acctmis

"Neither can the Court determine whether the termination of the

plaintiff is legal under the Singapore Laws because of the
defendant's failure to show which specific laws of Singapore Laws
apply to this case. As substantially discussed in the preceding
paragraphs, the Philippine Courts do not take judicial notice of the
laws of Singapore. The defendant that claims the applicability of
the Singapore Laws to this case has the burden of proof. The
defendant has failed to do so. Therefore, the Philippine law should
be applied."[4]

Respondent Court of Appeals acquired jurisdiction when defendant filed its

appeal before said court. On this matter, respondent court was correct when
[5]

it barred defendant-appellant below from raising further the issue of

jurisdiction.
[6]
Petitioner now raises the issue of whether his action is one based on Article
1144 or on Article 1146 of the Civil Code. According to him, his termination of
employment effective November 1, 1982, was based on an employment
contract which is under Article 1144, so his action should prescribe in 10
years as provided for in said article. Thus he claims the ruling of the appellate
court based on Article 1146 where prescription is only four (4) years, is an
error. The appellate court concluded that the action for illegal dismissal
originally filed before the Labor Arbiter on June 29, 1983, but which was
withdrawn, then filed again in 1987 before the Regional Trial Court, had
already prescribed.

In our view, neither Article 1144 nor Article 1146 of the Civil Code is here
[7] [8]

pertinent. What is applicable is Article 291 of the Labor Code, viz:

"Article 291. Money claims. - All money claims arising from

employee-employer relations accruing during the effectivity of this
Code shall be filed within three (3) years from the time the cause
of action accrued; otherwise they shall be forever barred.

x x x" Misact

What rules on prescription should apply in cases like this one has long been
decided by this Court. In illegal dismissal, it is settled, that the ten-year
prescriptive period fixed in Article 1144 of the Civil Code may not be invoked
by petitioners, for the Civil Code is a law of general application, while the
prescriptive period fixed in Article 292 of the Labor Code [now Article 291] is a
SPECIAL LAW applicable to claims arising from employee-employer
relations.
[9]

More recently in De Guzman. vs. Court of Appeals, where the money claim
[10]

was based on a written contract, the Collective Bargaining Agreement, the

Court held:

"...The language of Art. 291 of the Labor Code does not limit its
application only to 'money claims specifically recoverable under
said Code' but covers all money claims arising from an employee-
employer relations" (Citing Cadalin v. POEA Administrator, 238
SCRA 721, 764 [1994]; and Uy v. National Labor Relations
Commission, 261 SCRA 505, 515 [1996]). ...

It should be noted further that Article 291 of the Labor Code is a

special law applicable to money claims arising from employer-
 employee relations; thus, it necessarily prevails over Article 1144
of the Civil Code, a general law. Basic is the rule in statutory
construction that 'where two statutes are of equal theoretical
application to a particular case, the one designed therefore should
prevail.' (Citing Leveriza v. Intermediate Appellate Court, 157
SCRA 282, 294.) Generalia specialibus non derogant." [11]

In the light of Article 291, aforecited, we agree with the appellate court's
conclusion that petitioner's action for damages due to illegal termination filed
again on January 8, 1987 or more than four (4) years after the effective date
of his dismissal on November 1, 1982 has already prescribed.

"In the instant case, the action for damages due to illegal
termination was filed by plaintiff-appellee only on January 8, 1987
or more than four (4) years after the effectivity date of his
dismissal on November 1, 1982. Clearly, plaintiff-appellee's action
has already prescribed."

We base our conclusion not on Article 1144 of the Civil Code but on Article
291 of the Labor Code, which sets the prescription period at three (3) years
and which governs under this jurisdiction.

Petitioner claims that the running of the prescriptive period was tolled when he
filed his complaint for illegal dismissal before the Labor Arbiter of the National
Labor Relations Commission. However, this claim deserves scant
consideration; it has no legal leg to stand on. In Olympia International, Inc. vs.
Court of Appeals, we held that "although the commencement of a civil action
stops the running of the statute of prescription or limitations, its dismissal or
voluntary abandonment by plaintiff leaves the parties in exactly the same
position as though no action had been commenced at all." [12]

Now, as to whether petitioner's separation from the company due to

retrenchment was valid, the appellate court found that the employment
contract of petitioner allowed for pre-termination of employment. We agree
with the Court of Appeals when it said, Sdjad

"It is a settled rule that contracts have the force of law between
the parties. From the moment the same is perfected, the parties
are bound not only to the fulfillment of what has been expressly
stipulated but also to all consequences which, according to their
nature, may be in keeping with good faith, usage and law. Thus,
when plaintiff-appellee accepted the offer of employment, he was
 bound by the terms and conditions set forth in the contract,
among others, the right of mutual termination by giving three
months written notice or by payment of three months salary. Such
provision is clear and readily understandable, hence, there is no
room for interpretation."

xxx

Further, plaintiff-appellee's contention that he is not bound by the

provisions of the Agreement, as he is not a signatory thereto,
deserves no merit. It must be noted that when plaintiff-appellee's
employment was confirmed, he applied for membership with the
Singapore Airlines Limited (Pilots) Association, the signatory to
the aforementioned Agreement. As such, plaintiff-appellee is
estopped from questioning the legality of the said agreement or
any proviso contained therein." [13]

Moreover, the records of the present case clearly show that respondent
court's decision is amply supported by evidence and it did not err in its
findings, including the reason for the retrenchment:

"When defendant-appellant was faced with the world-wide

recession of the airline industry resulting in a slow down in the
company's growth particularly in the regional operation (Asian
Area) where the Airbus 300 operates. It had no choice but to
adopt cost cutting measures, such as cutting down services,
number of frequencies of flights, and reduction of the number of
flying points for the A-300 fleet (t.s.n., July 6, 1988, pp. 17-18). As
a result, defendant-appellant had to layoff A-300 pilots, including
plaintiff-appellee, which it found to be in excess of what is
reasonably needed." [14]

All these considered, we find sufficient factual and legal basis to conclude that
petitioner's termination from employment was for an authorized cause, for
which he was given ample notice and opportunity to be heard, by respondent
company. No error nor grave abuse of discretion, therefore, could be
attributed to respondent appellate court. Sppedsc

ACCORDINGLY, the instant petition is DISMISSED. The decision of the Court

of Appeals in C.A. CV No. 34476 is AFFIRMED.

SO ORDERED.
Bellosillo, (Chairman), Mendoza, Buena, and De Leon, Jr., JJ., concu

8) PCIB VS ESCOLIN

9) CITY OF MANILA VS GARCIA

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-26053 February 21, 1967

CITY OF MANILA, plaintiff-appellee,

vs.
GERARDO GARCIA — CARMENCITA VILLANUEVA, MODESTA PARAYNO — NARCISO
PARAYNO, JUAN ASPERAS, MARIA TABIA — SIMEON DILIMAN, AQUILINO BARRIOS —
LEONORA RUIZ, LAUREANO DIZO, BERNABE AYUDA — LEOGARDA DE LOS SANTOS,
ISABELO OBAOB — ANDREA RIPARIP, JOSE BARRIENTOS, URBANO RAMOS,1 ELENA
RAMOS, ESTEFANIA NEPACINA, MODESTA SANCHEZ, MARCIAL LAZARO, MARCIANA
ALANO, HONORIO BERIÑO — SEDORA ORAYLE, GLORIA VELASCO, WILARICO RICAMATA,
BENEDICTO DIAZ, ANA DEQUIZ — (MRS.) ALUNAN, LORENZO CARANDANG, JUAN
PECAYO, FELICIDAD MIRANDA — EMIGDIO EGIPTO, defendants-appellants.

Mauricio Z. Alunan for defendants-appellants.

City Fiscal's Office for plaintiff-appellee.

SANCHEZ, J.:

Plaintiff City of Manila is owner of parcels of land, forming one compact area, bordering Kansas,
Vermont and Singalong streets in Malate, Manila, and covered by Torrens Titles Nos. 49763, 37082
and 37558. Shortly after liberation from 1945 to 1947, defendants entered upon these premises
without plaintiff's knowledge and consent. They built houses of second-class materials, again without
plaintiff's knowledge and consent, and without the necessary building permits from the city. There
they lived thru the years to the present.

In November, 1947, the presence of defendants having previously been discovered, defendants
Felicidad Miranda (Emigdio Egipto), Modesta C. Parayno, Benedicto Diaz, Laureano Dizo, Jose
Barrientos, Elena Ramos, Estefania Nepacina, Modesta Sanchez, Honorio Beriño, Gloria Velasco,
Ana Dequis Alunan and Benedicto Ofiaza (predecessor of defendant Carandang) were given by
Mayor Valeriano E. Fugoso written permits — each labeled "lease contract" — to occupy specific
areas in the property upon conditions therein set forth. Defendants Isabelo Obaob and Gerardo
Garcia (in the name of Marta A. Villanueva) received their permits from Mayor Manuel de la Fuente
on January 29 and March 18, respectively, both of 1948. The rest of the 23 defendants exhibited
none.
For their occupancy, defendants were charged nominal rentals. 1äwphï1.ñët

Following are the rentals due as of February, 1962:

Amt. due from

Area Monthly
NAME date of delinquency
in sq.m. Rental
to Feb. 1962
1. Gerardo Garcia 66.00 P7.92 P1,628.97

2. Modesta C. Parayno 87.75 10.53 379.08

3. Juan Asperas 39.00 4.68 9.36

4. Maria Tabia 35.20 5.76 570.24

5. Aquilino Barrios
54.00 4.32 99.36
(Leonora Ruiz)

6. Laureano Dizo 35.00 2.80 22.40

7. Bernabe Ayuda 39.60 3.17 323.34
8. Isabelo Obaob 75.52 9.06 208.38

9. Jose Barrientos 39.53 4.74 744.18

10. Cecilia Manzano in Paid up to
lieu of Urbano Ramos (deceased) 46.65 5.60 Feb. 1962.

11. Elena Ramos 34.80 2.78 186.26

12. Estefania Nepacina 41.80 3.34 504.34
13. Modesta Sanchez 33.48 2.68 444.88
14. Marcial Lazaro 22.40 1.79 688.32

15. Marciana Alano 25.80 2.06 255.44

16. Honorio Beriño 24.00 1.92 188.16

17. Gloria Velasco 32.40 2.59 56.98

18. Wilarico Ricamata 45.83 3.67 739.68

Paid up to
19. Benedicto Diaz 40.20 4.82
March 1962.

20. Ana Dequis Alunan 64.26 7.71 30.84

21. Lorenzo Carandang 45.03 5.40 437.40

22. Juan N. Pecayo 25.52 3.06 30.60

23. Felicidad Miranda 48.02 5.76 132.48

 P7,580.69

Epifanio de los Santos Elementary School is close, though not contiguous, to the property. Came the
need for this school's expansion; it became pressing. On September 14, 1961, plaintiff's City
Engineer, pursuant to the Mayor's directive to clear squatters' houses on city property, gave each of
defendants thirty (30) days to vacate and remove his construction or improvement on the premises.
This was followed by the City Treasurer's demand on each defendant, made in February and March,
1962, for the payment of the amount due by reason of the occupancy and to vacate in fifteen (15)
days. Defendants refused. Hence, this suit to recover possession.2

The judgment below directed defendants to vacate the premises; to pay the amounts heretofore
indicated opposite their respective names; and to pay their monthly rentals from March, 1962, until
they vacate the said premises, and the costs. Defendants appealed.

1. We are called upon to rule on the forefront question of whether the trial court properly
found that the city needs the premises for school purposes.

The city's evidence on this point is Exhibit E, the certification of the Chairman, Committee on
Appropriations of the Municipal Board. That document recites that the amount of
P100,000.00 had been set aside in Ordinance 4566, the 1962-1963 Manila City Budget, for
the construction of an additional building of the Epifanio de los Santos Elementary School. It
is indeed correct to say that the court below, at the hearing, ruled out the admissibility of said
document. But then, in the decision under review, the trial judge obviously revised his views.
He there declared that there was need for defendants to vacate the premises for school
expansion; he cited the very document, Exhibit E, aforesaid.

It is beyond debate that a court of justice may alter its ruling while the case is within its
power, to make it conformable to law and justice.3 Such was done here. Defendants' remedy
was to bring to the attention of the court its contradictory stance. Not having done so, this
Court will not reopen the case solely for this purpose.4

Anyway, elimination of the certification, Exhibit E, as evidence, would not profit defendants.
For, in reversing his stand, the trial judge could well have taken — because the was duty
bound to take — judicial notice5 of Ordinance 4566. The reason being that the city charter of
Manila requires all courts sitting therein to take judicial notice of all ordinances passed by the
municipal board of Manila.6 And, Ordinance 4566 itself confirms the certification aforesaid
that an appropriation of P100,000.00 was set aside for the "construction of additional
building" of the Epifanio de los Santos Elementary School.

Furthermore, defendants' position is vulnerable to assault from a third direction. Defendants

have absolutely no right to remain in the premises. The excuse that they have permits from
the mayor is at best flimsy. The permits to occupy are recoverable on thirty days' notice.
They have been asked to leave; they refused to heed. It is in this factual background that we
say that the city's need for the premises is unimportant. The city's right to throw defendants
out of the area cannot be gainsaid. The city's dominical right to possession is paramount. If
error there was in the finding that the city needs the land, such error is harmless and will not
justify reversal of the judgment below.7

2. But defendants insist that they have acquired the legal status of tenants. They are wrong.
They entered the land, built houses of second-class materials thereon without the knowledge
and consent of the city. Their homes were erected without city permits.

These constructions are illegal. In a language familiar to all, defendants are squatters:

Since the last global war, squatting on another's property in this country has become a
widespread vice. It was and is a blight. Squatters' areas pose problems of health, sanitation.
They are breeding places for crime. They constitute proof that respect for the law and the
rights of others, even those of the government, are being flouted. Knowingly, squatters have
embarked on the pernicious act of occupying property whenever and wherever convenient to
their interests — without as much as leave, and even against the will, of the owner. They are
emboldened seemingly because of their belief that they could violate the law with impunity.
The pugnaciousness of some of them has tied up the hands of legitimate owners. The latter
are thus prevented from recovering possession by peaceful means. Government lands have
not been spared by them. They know, of course, that intrusion into property, government or
private, is wrong. But, then, the mills of justice grind slow, mainly because of lawyers who, by
means, fair or foul, are quite often successful in procuring delay of the day of reckoning.
Rampancy of forcible entry into government lands particularly, is abetted by the apathy of
some public officials to enforce the government's rights. Obstinacy of these squatters is
difficult to explain unless it is spawned by official tolerance, if not outright encouragement or
protection. Said squatters have become insensible to the difference between right and
wrong. To them, violation of law means nothing. With the result that squatting still exists,
much to the detriment of public interest. It is high time that, in this aspect, sanity and the rule
of law be restored. It is in this environment that we look into the validity of the permits
granted defendants herein.

These permits, erroneously labeled "lease" contracts, were issued by the mayors in 1947
and 1948 when the effects of the war had simmered down and when these defendants could
have very well adjusted themselves. Two decades have now elapsed since the unlawful
entry. Defendants could have, if they wanted to, located permanent premises for their abode.
And yet, usurpers that they are, they preferred to remain on city property.

Defendants' entry as aforesaid was illegal. Their constructions are as illegal, without
permits.8 The city charter enjoins the mayor to "safeguard all the lands" of the City of Manila.9

Surely enough, the permits granted did not "safeguard" the city's land in question. It is our
considered view that the Mayor of the City of Manila cannot legalize forcible entry into public
property by the simple expedient of giving permits, or, for that matter, executing leases.

Squatting is unlawful and no amount of acquiescence on the part of the city officials will
elevate it into a lawful act. In principle, a compound of illegal entry and official permit to stay
is obnoxious to our concept of proper official norm of conduct. Because, such permit does
not serve social justice; it fosters moral decadence. It does not promote public welfare; it
abets disrespect for the law. It has its roots in vice; so it is an infected bargain. Official
approval of squatting should not, therefore, be permitted to obtain in this country where there
is an orderly form of government.

We, accordingly, rule that the Manila mayors did not have authority to give permits, written or
oral, to defendants, and that the permits herein granted are null and void.

3. Let us look into the houses and constructions planted by defendants on the premises.
They clearly hinder and impair the use of that property for school purposes. The courts may
 well take judicial notice of the fact that housing school children in the elementary grades has
been and still is a perennial problem in the city. The selfish interests of defendants must
have to yield to the general good. The public purpose of constructing the school building
annex is paramount.10

In the situation thus obtaining, the houses and constructions aforesaid constitute public
nuisance per se. And this, for the reason that they hinder and impair the use of the property
for a badly needed school building, to the prejudice of the education of the youth of the
land.11 They shackle the hands of the government and thus obstruct performance of its
constitutionally ordained obligation to establish and maintain a complete and adequate
system of public education, and more, to "provide at least free public primary instruction".12

Reason dictates that no further delay should be countenanced. The public nuisance could
well have been summarily abated by the city authorities themselves, even without the aid of
the courts.13

4. Defendants challenge the jurisdiction of the Court of First Instance of Manila. They say
that the case should have been started in the municipal court. They prop up their position by
the averment that notice for them to vacate was only served in September, 1961, and suit
was started in July, 1962. Their legal ground is Section 1, Rule 70 of the Rules of Court. We
have reached the conclusion that their forcible entry dates back to the period from 1945 to
1947. That entry was not legalized by the permits. Their possession continued to remain
illegal from incipiency. Suit was filed long after the one-year limitation set forth in Section 1 of
Rule 70. And the Manila Court of First Instance has jurisdiction.14

Upon the premises, we vote to affirm the judgment under review. Costs against defendants-
appellants. So ordered.

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

10) REPUBLIC VS COURT OF APPEALS 277 SCRA 633

Republic vs CA, 277 SCRA 633, 641 (1997)

”Judicial notice will be taken of the record, pleading or judgment of a case in another court between the
same parties or involving one of the same parties as well as of the record of another case between
different parties in the same court. Judicial notice will also be taken of court personnel.”

Facts:
Josefa Gacot claimed a parcel of land, the area of which is not indicated, in Palawan. Gacot claims that
she has been in actual possession of the property for more than 30 year and bought the land from
Cipriana Dantic-Llanera by virtue of a deed of sale and introduced improvement thereon and paid taxes
for the land in her name. It appears that a certain Ceferino Sabenacio is a co-owner of the land who later
waived his claim in favor of Gacot and admitted that he was only a boundary owner of the land and it
was Gacot who is in actual possession of it. Prior to the hearing, the Land Registration Authority
intervened, calling the attention of the court on the decision made by Judge Lorenzo Garlitos declaring
the property as owned by the Republic. However, it did not bar Gacos from filing her answer, presenting
evidence of her actual possession of the said property and tax declaration and payment made in her
name. The counsel of the petitioner did not present evidence and submitted the case for resolution.

The court rendered a decision in favor of Gacot thus the Solicitor General elevated the case to the CA
and filed a motion for the court to reopen and remand the case back to the trial court to allow the
Republic to present the decision of Judge Garlitos which motion was granted by the court. The hearing
was set several times and Gacot was able to submit her memorandum while the Republic was unable to
submit any evidence to support the claim of the government in court. For failure of the government to
refute and to present their evidence contrary to Gacot’s claim, the court decided not to disturb its
former decision.

The Republic assailed the decision of the court invoking 2061 that set the time limit of filing an
application for the reopening of judicial proceedings on certain lands declared as public land, a provision
thereof provides that the application for judicial proceeding should not extend beyond Dec. 31, 1968.
Gacot only filed her claim on June 7, 1971 thus the court did not acquired jurisdiction on her claim as
she did not file her answer within the period fixed by RA 2061.

Issue: Whether or not the court has acquired jurisdiction over the case?

Ruling:
The Court held that what the Solicitor General claims would have been operative if it were able to
present evidence during the rehearing of the case proving the alleged decision of Judge Garlitos
declaring the property as public land. However they failed to offer evidence on their claim and the court
cannot take judicial notice of such claim in the absence of any proof presented before the court. The
appellate court remanded the case back to the trial court to allow the Republic to present evidence
which they failed to do.

It is a settled rule that the court shall not consider evidence that has not been formally offered before it.
The court cannot take judicial knowledge of the contents of the record of other cases, in the
adjudication of the cases pending before them even if the trial judge knows or remember the contents
thereof. While the case is on trial, Josefa Gacot passed away and her heirs were impleaded to substitute
her as the party to the case. The court held to lax on the technical rules of procedure in the case and to
expedite the proceeding take a liberal construction on the laws to meet advance the cause of substantial
justice. Because the lot area awarded to Gacot was not specified in the records and based on the
certification of the Forest Management Services of the Department of Environment and Natural
Resources, some of the lots in the area are classified as alienable and disposable land, while some
portion are timber land that forms part of the Mangrove Swamp Forest Reserve. The court decided to
remand back to the trial court the case for proper disposition of the conflicting claims of the parties.

FIRST DIVISION

[G.R. No. 119288. August 18, 1997]

REPUBLIC OF THE PHILIPPINES, represented by THE DIRECTOR OF

LANDS, petitioner, vs. HON. COURT OF APPEALS and JOSEFA
GACOT, respondents.

RESOLUTION
VITUG, J.:

The Republic of the Philippines, represented by the Director of Lands,

prays in the instant petition for review on certiorari for the annulment of the
decision, dated 22 February 1995, of the Court of Appeals affirming the 12th
August 1993 judgment of the Regional Trial Court of Palawan (Branch 50-
Puerto Princesa) which has adjudicated Lot No. 5367 in Cadastral Case No.
13, GLRO Cadastral Record No. 1133, to herein private respondent, now
deceased Josefa Gacot, the claimant in the cadastral case.
 The antecedents are amply summarized in the appealed decision of the
Court of Appeals, viz:

"The entire lot 5367 is being claimed by Josefa Gacot as per answer she filed on June
7, 1971. It appears from the record that the lot is located in Barangay Los Angeles,
Magsaysay, Palawan but the area was not indicated. It also appeared that Ceferino
Sabenacio is her co-owner.

This case was set for hearing on August 9, 1990 and the petitioner was represented by
Assistant Provincial Prosecutor Reynaldo Guayco and Rogelio Paglinawan,
Community Environment and Natural Resources Officer (CENRO) of Puerto Princesa
City while the claimant appeared without counsel. In view thereof, the hearing was
reset to August 13, 1990. Before the scheduled hearing on August 13, 1990, the Court
received a report from the Land Registration Authority calling the Court's attention of
the decision rendered by Judge Lorenzo Garlitos on October 20, 1950 declaring this
lot as property of the Republic of the Philippines. Despite this declaration however,
the petitioner nor the government did not bar the claimant from filing her answer,
possessing and occupying the lot and in fact accepted her tax payments and issuing
her tax declaration on the same.

The claimant presented herself as witness as well as her son, Vicente Dantic, Jr. The
witnesses testified that Josefa Gacot was married to Vicente Dantic, Sr. in 1940 and
were in actual possession of the property for more than 30 years, having bought the
same from Cipriana Dantic-Llanera as per deed of sale dated April 22, 1955 in
Cuyono dialect (Exhibit `1 and 1-A). Since she acquired the property from Cipriana
Llanera, she continued her occupation and introduced improvements thereon as well
as declared Lot 5367 for taxation purposes in her name (Exhibit 2) and paid the
corresponding taxes thereon up to the present time (Exhibit 3). That claimant is now a
widow and has 5 children namely, Hernando Dantic, Antero Dantic, Felipe Dantic, Fe
Dantic and Vicente Dantic, Jr.

Cipriano Sabenacio, the alleged co-owner of claimant Josefa Gacot appeared in Court
and manifested that he is waiving his claim over Lot 5367 in favor of Josefa Gacot
who is in actual possession of the property as he is only a boundary owner.

After the presentation of claimant and her son, they offered their exhibits and rested
their case. Thereafter, the petitioner thru counsel manifested that it is not presenting
controverting evidence and is submitting the case for resolution . [1]

On 05 September 1990, the trial court rendered judgment adjudicating Lot

No. 5367 to Josefa Gacot, thus -
"WHEREFORE, this Court finds the claim of Josefa Gacot Dantic to be in
order. Accordingly, Lot 5367 is hereby adjudicated to Josefa Gacot-Dantic, widow
and a resident of Barangay Los Angeles, Magsaysay, Palawan with all the
improvements thereon, subject to the estate tax as provided by law."

"SO ORDERED." [2]

The Republic, through the Solicitor General, elevated the case to the
Court of Appeals.
During the pendency of the appeal, the Office of the Solicitor General was
able to verify that Lot 5367 was earlier declared to be the property of the
Republic in a decision rendered by Judge Lorenzo Garlitos on 20 October
1950 following an order of general default. The Solicitor General thus filed a
motion with the appellate court to have the case reopened and remanded to
the court a quo to allow the Republic of the Philippines to present the decision
of Judge Garlitos. In its resolution, dated 26 December 1991, the Court of
Appeals granted the motion.
What transpired thereafter was narrated by the trial court in its 12th August
1993 decision; viz:

This case was set for hearing several times for the government to present its evidence
and for the parties to submit their respective memorandum in support of their
respective stand on the matter. The claimant submitted her memorandum while the
government represented by the Assistant Provincial Prosecutor assigned to this sala
has not presented any witness to support the governments claim, neither has he
submitted any memorandum to support the governments stand on this matter.

With the foregoing development, the Court is of the opinion that the subsequent
application or claim of Josefa Gacot-Dantic on Lot 5367 which became part of the
public domain where her occupation thereto having been open to the whole world,
public and notorious in the concept of an owner since 38 years ago was well taken and
therefore entitled to the lawful adjudication of Lot 5367 in her name. Besides, the
government represented by the Assistant Provincial Prosecutor and the Community
Environment and Natural Resources Officer (CENRO) for Puerto Princesa City and
Cuyo, Palawan have not made any protest nor interposed any objection on the claim
of Josefa Gacot during the hearings. Neither was there a manifestation of protest or
claim of government use coming from the municipal officials of Magsaysay, Palawan
despite notice sent to them of the cadastral hearing. And the sad part was that the
government had accepted without any protest all the taxes due the property paid by
the claimant religiously. This is not to say that this order has been considered in the
previous decision of this Court which is hereunder quoted as follows:
 xxxxxxxxx

With this finding of the Court, it is its considered opinion and so holds, that there is no
reason to disturb its previous decision aforequoted." [3]

An appeal was taken by the Republic from the decision of the trial court. In
its now assailed decision of 22 February 1995, the Court of Appeals
affirmed in toto the judgment of the trial court. The appellate court
ratiocinated:

In its brief, the Office of the Solicitor General claims that `records of the re-hearing
show that on October 20, 1950, an order was, indeed, issued by Judge Lorenzo C.
Garlitos of the Court of First Instance of Palawan, 7th Judicial District, declaring that
Lot No. 5367 was among lots declared as property of the Republic of the
Philippines. (p. 3, Appellants Brief; p. 19, Rec.) It now invokes Republic Act No. 931,
approved on June 30, 1953 and Republic Act No. 2061, which took effect on June 30,
1958, both laws setting the time limits for the filing of applications, among other
things, for the reopening of judicial proceedings on certain lands which were declared
public land. Under R.A. 2061, the time for filing an application shall not extend
beyond December 31, 1968. Thus, petitioner-appellant argues that since claimant-
appellee Josefa Gacot filed her answer only on 07 June 1971, the court a quo did not
acquire jurisdiction over the instant claim since she did not file her answer within the
period fixed by R.A. No. 2061.

This would be true, if the Order dated 20 October 1950 of Judge Lorenzo Garlitos
declaring Lot No. 5367 as property of the Republic of the Philippines, was presented
as evidence in the rehearing of this case. Unfortunately, the Republic of the
Philippines failed to offer as its exhibit the said order. There is no basis for the
appellant, therefore, to invoke R.A. 2061, to support its claim that claimant-appellee
Josefa Gacot filed her answer beyond the period fixed by said law and therefore the
court a quo did not acquire jurisdiction over the case.

Precisely, the purpose of the rehearing was to enable the Republic of the Philippines,
thru the Office of the Solicitor General, to present in evidence the said order. The
Solicitor General, in its Motion dated 21 May 1991, prayed that with regards to Lot
No. 5367 `the proceedings therein be ordered reopened and the same be remanded to
the court a quo to enable the Republic of the Philippines to present the judgment dated
October 20, 1950 of Judge Lorenzo Garlitos declaring Lot No. 5367 as government
property. (pp. 30-31, Rollo) [Underlines Ours]

This Court granted the motion and ordered the records of the case remanded to the
court a quo for further proceedings to enable the government to present in evidence
the judgment dated October 20, 1950, declaring Lot No. 5367 as government property
x x x. (p. 42, Rollo) [Underlines Ours]

During the rehearing, however, the Government failed to present the said order of
Judge Garlitos in evidence. Thus, the court a quo said in its appealed decision:

This case was set for hearing several times for the government to present its
evidence and for the parties to submit their respective memoranda in support
of their respective stand on the matter. The claimant submitted her
memorandum while the government represented by the Assistant Provincial
Prosecutor has not presented any witness to present the governments claim
neither has he submitted any memorandum to support the governments stand
on this matter. (see p. 92, Rollo) [Underlines Ours]

It is the rule that `The court shall consider no evidence which has not been formally
offered. (Rule 132, Sec. 34) It is true that the Order of 20 October 1950 has been
appended to the records of this case (see p. 19, Rec.). But it is misleading on the part
of the Solicitor General to state that `Records of the rehearing show that on October
20, 1950, an order was, indeed, issued by Judge Lorenzo C. Garlitos x x x. For, during
the rehearing, as reflected in the appealed decision, the government did not present
any evidence nor any memorandum despite having been ordered by the court a quo.

Neither can We take judicial notice of the Order of Judge Garlitos. As a general rule,
courts are not authorized to take judicial knowledge of the contents of the record of
other cases, in the adjudication of cases pending before them, even though the trial
judge in fact knows or remembers the contents thereof, or even when said other cases
have been heard or are pending in the same court and notwithstanding the fact that
both cases may have been heard or are really pending before the same
judge.(Municipal Council vs. Colegio de San Jose, et al., G.R. No. L-45460; 31 C.J.S.
623-624; cited in p. 25, Evidence, Second Ed.; R.J. Francisco) Indeed, the
Government missed its opportunity to have the claim of Josefa Gacot, the herein
appellee, declared as a nullity, considering that no evidence was presented by it in
opposition thereto.[4]

In the instant petition, the Republic, assigning a sole error, contends that -

THE HONORABLE COURT OF APPEALS (HAS) ERRED IN RULING THAT

THERE IS NO BASIS FOR PETITIONER TO INVOKE R.A. No. 2061 TO
SUPPORT ITS CLAIM THAT JOSEFA GACOT FILED HER ANSWER BEYOND
THE PERIOD FIXED BY THE SAID LAW AND THEREFORE THE TRIAL
COURT DID NOT ACQUIRE JURISDICTION OVER THE CASE, SINCE IT
(HAS) FAILED TO OFFER AS ITS EXHIBIT THE ORDER, DATED OCTOBER
20, 1950 OF JUDGE LORENZO GARLITOS. [5]

The Solicitor General explains that the records of the reopened case
would show that a certified copy of the decision, dated 20 October 1950, of
Judge Garlitos has been appended to page 19 thereof. It is not evident,
however, why the Assistant Provincial Prosecutor and the Community
Environment and Natural Resources Officer ("CENRO") for Puerto Princesa,
representing the government during the rehearing, did not present it. The
Solicitor General, nevertheless, invokes the rule that the Republic is not
estopped by the mistake or error on the part of its officials or agents.
In the meantime, Josefa Gacot passed away. The Solicitor General
thereupon moved that the heirs of Josefa Gacot be impleaded party
respondents in substitution for the deceased. The motion was granted, and
the heirs were directed to comment on the governments petition.
To this day, private respondents have not submitted their comment. The
Court, however, cannot allow the case to remain pending and unresolved
indefinitely. It must now dispense, as it hereby dispenses, with such comment
in order not to unduly delay the remand of the case to the trial court for further
proceedings.
Let it initially be said that, indeed, the Court realizes the points observed
by the appellate court over which there should be no quarrel. Firstly, that the
rules of procedure and jurisprudence, do not sanction the grant of
[6] [7]

evidentiary value, in ordinary trials, of evidence which is not formally offered,

[8] [9]

and secondly, that adjective law is not to be taken lightly for, without it, the
enforcement of substantive law may not remain assured. The Court must add,
nevertheless, that technical rules of procedure are not ends in themselves but
primarily devised and designed to help in the proper and expedient
dispensation of justice. In appropriate cases, therefore, the rules may have to
be so construed liberally as to meet and advance the cause of substantial
[10]

justice.
Furthermore, Section 1, Rule 129, of the Rules of Court provides:

SECTION 1. Judicial notice, when mandatory. - A court shall take judicial notice,
without the introduction of evidence, of the existence and territorial extent of states,
their political history, forms of government and symbols of nationality, the law of
nations, the admiralty and maritime courts of the world and their seals, the political
constitution and history of the Philippines, the official acts of the legislative, executive
and judicial departments of the Philippines, the laws of nature, the measure of time,
and the geographical divisions.
 Mr. Justice Edgardo L. Paras opined:[11]

A court will take judicial notice of its own acts and records in the same case, of facts
established in prior proceedings in the same case, of the authenticity of its own
records of another case between the same parties, of the files of related cases in the
same court, and of public records on file in the same court. In addition judicial notice
will be taken of the record, pleadings or judgment of a case in another court between
the same parties or involving one of the same parties, as well as of the record of
another case between different parties in the same court. Judicial notice will also be
taken of court personnel.[12]

The remand of the case would likewise seem to be unavoidable. The area
of Lot No. 5367 claimed and awarded to the late Josefa Gacot had not been
specified in the records. Indeed, on the basis of the Certification of the Forest
Management Services of the Department of Environment and Natural
Resources, Lot No. 5367, per Land Classification (LC) No. 1246 of 15 January
1936, would appear to contain an area of 394,043 square meters, 300,000
square meters of which were classified as Alienable and Disposable land and
94,043 square meters as Timberland, which under Proclamation No. 2152,
dated 29 December 1981, had been included to form part of the Mangrove
Swamp Forest Reserve, closed for entry, exploitation and settlement. [13]

It behooves all concerned that the above matters be carefully looked into,
albeit with reasonable dispatch, for the final resolution of this case.
WHEREFORE, the case is REMANDED to the trial court for further
proceedings for it to ascertain and resolve the conflicting claims of the parties
conformably with the foregoing opinion of the Court. No costs.
SO ORDERED.
Padilla, Bellosillo, Vitug, Kapunan, and Hermosisima, Jr., JJ., concur.

11. Tabuena vs CA 196 SCRA 650

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 85423 May 6, 1991

JOSE TABUENA, petitioner,
vs.
COURT OF APPEALS and EMILIANO TABERNILLA, JR., respondents.

Ramon Dimen for petitioner.

Dionisio A. Hernandez for private respondent.

CRUZ, J.:

The petitioner faults the decision of the trial court, as affirmed by the respondent court, for lack of
basis. It is argued that the lower courts should not have taken into account evidence not submitted
by the private respondent in accordance with the Rules of Court.

The subject of the dispute is a parcel of residential land consisting of about 440 square meters and
situated in Poblacion, Makato, Aklan. In 1973, an action for recovery of ownership thereof was filed
in the Regional Trial Court of Aklan by the estate of Alfredo Tabernilla against Jose Tabuena, the
herein petitioner. After trial, judgment was rendered in favor of the plaintiff and the defendant was
required to vacate the disputed lot.1

As the trial court found, the lot was sold by Juan Peralta, Jr. sometime in 1926 to Alfredo Tabernilla
while the two were in the United States. Tabernilla returned to the Philippines in 1934, and Damasa
Timtiman, acting upon her son Juan's instruction, conveyed the subject land to Tabernilla. At the
same time, she requested that she be allowed to stay thereon as she had been living there all her
life. Tabernilla agreed provided she paid the realty taxes on the property, which she promised to do,
and did. She remained on the said land until her death, following which the petitioner, her son and
half-brother of Juan Peralta, Jr., took possession thereof. The complaint was filed when demand was
made upon Tabuena to surrender the property and he refused, claiming it as his own.

The trial court rejected his defense that he was the absolute owner of the lot, which he inherited from
his parents, who acquired it even before World War II and had been living thereon since then and
until they died. Also disbelieved was his contention that the subject of the sale between Peralta and
Tabernilla was a different piece of land planted to coconut trees and bounded on three sides by the
Makato River.

Tabuena appealed to the respondent court, complaining that, in arriving at its factual findings, the
trial court motu proprio took cognizance of Exhibits "A", "B" and "C", which had been marked by the
plaintiff but never formally submitted in evidence. The trial court also erred when, to resolve the
ownership of the subject lot, it considered the proceedings in another case involving the same
parties but a different parcel of land.

The said exhibits are referred to in the pre-trial order as follows:

Plaintiff proceeded to mark the following exhibits: Exh. "A", letter dated October 4, 1921
addressed in Makato, Capiz, Philippines; Exh. "A-1", paragraph 2 of the letter indicating that
the amount of P600.00—the first P300.00 and then another P300.00 as interest since
October 4, 1921; Exh. "A-2", is paragraph 3 of the letter; Exh. "B", a Spanish document; Exh.
"C", deed of conveyance filed by Tomasa Timtiman and Alfredo Tabernilla in 1923; and Exh.
"C-1", paragraph 4 of Exh. "C".
In sustaining the trial court, the respondent court held that, contrary to the allegations of the
appellant, the said exhibits were in fact formally submitted in evidence as disclosed by the transcript
of stenographic notes, which it quoted at length.2 The challenged decision also upheld the use by the
trial court of testimony given in an earlier case, to bolster its findings in the second case.

We have examined the record and find that the exhibits submitted were not the above-described
documents but Exhibits "X" and "T" and their sub-markings, which were the last will and testament of
Alfredo Tabernilla and the order of probate. It is not at all denied that the list of exhibits does not
include Exhibits "A", "B" and "C". In fact, the trial court categorically declared that "Exhibits "A-1, "A-
2", "B", "C" and "C-l," were not among those documents or exhibits formally offered for admission by
plaintiff-administratrix." This is a clear contradiction of the finding of the appellate court, which seems
to have confused Exhibits "A," "B" and "C" with Exhibits "X" and "Y", the evidence mentioned in the
quoted transcript.

Rule 132 of the Rules of Court provides in Section 35 thereof as follows:

Sec. 35. Offer of evidence.—The court shall consider no evidence which has not been
formally offered. The purpose for which the evidence is offered must be specified.

The mere fact that a particular document is marked as an exhibit does not mean it has thereby
already been offered as part of the evidence of a party. It is true that Exhibits "A," "B" and "C" were
marked at the pre-trial of the case below, but this was only for the purpose of identifying them at that
time. They were not by such marking formally offered as exhibits. As we said in Interpacific Transit,
Inc. vs. Aviles,3 "At the trial on the merits, the party may decide to formally offer (the exhibits) if it
believes they will advance its cause, and then again it may decide not to do so at all. In the latter
event, such documents cannot be considered evidence, nor can they be given any evidentiary
value."

Chief Justice Moran explained the rationale of the rule thus:

. . . The offer is necessary because it is the duty of a judge to rest his findings of facts and
his judgment only and strictly upon the evidence offered by the patties at the trial.4

We did say in People vs. Napat-a5 that even if there be no formal offer of an exhibit, it may still be
admitted against the adverse party if, first, it has been duly identified by testimony duly recorded
and, second, it has itself been incorporated in the records of the case. But we do not find that these
requirements have been satisfied in the case before us. The trial court said the said exhibits could
be validly considered because, even if they had not been formally offered, one of the plaintiffs
witnesses, Cunegunda Hernandez, testified on them at the trial and was even cross-examined by
the defendant's counsel. We do not agree. Although she did testify, all she did was identify the
documents. Nowhere in her testimony can we find a recital of the contents of the exhibits.

Thus, her interrogation on Exhibit "A" ran:

LEGASPI: That is this Exh. "A" about ?

A The translation of the letter.

Q What is the content of this Exh. "A", the letter of the sister of Juan Peralta to Alfredo
Tabernilla?
 Court: The best evidence is the document. Proceed.6

She also did not explain the contents of the other two exhibits.

The respondent court also held that the trial court committed no reversible error in taking judicial
notice of Tabuena's testimony in a case it had previously heard which was closely connected with
the case before it. It conceded that as a general rule "courts are not authorized to take judicial
notice, in the adjudication of cases pending before them, of the contents of the records of other
cases, even when such cases have been tried or are pending in the same court, and
notwithstanding the fact that both cases may have been heard or are actually pending b before the
same judge.7 Nevertheless, it applied the exception that:

. . . in the absence of objection, and as a matter of convenience to all parties, a court may
properly treat all or any part of the original record of a case filed in its archives as read into
the record of a case pending before it, when, with the knowledge of the opposing party,
reference is made to it for that purpose, by name and number or in some other manner by
which it is sufficiently designated; or when the original record of the former case or any part
of it, is actually withdrawn from the archives by the court's direction, at the request or with the
consent of the parties, and admitted as a part of the record of the case then pending.8

It is clear, though, that this exception is applicable only when, "in the absence of objection," "with the
knowledge of the opposing party," or "at the request or with the consent of the parties," the case is
clearly referred to or "the original or part of the records of the case are actually withdrawn from the
archives" and "admitted as part of the record of the case then pending." These conditions have not
been established here. On the contrary, the petitioner was completely unaware that his testimony in
Civil Case No. 1327 was being considered by the trial court in the case then pending before it. As
the petitioner puts it, the matter was never taken up at the trial and was "unfairly sprung" upon him,
leaving him no opportunity to counteract.

The respondent court said that even assuming that the trial court improperly took judicial notice of
the other case, striking off all reference thereto would not be fatal to the plaintiff's cause because
"the said testimony was merely corroborative of other evidences submitted by the plaintiff." What
"other evidences"? The trouble with this justification is that the exhibits it intends to corroborate, to
wit, Exhibits "A", "B" and "C", have themselves not been formally submitted.

Considering the resultant paucity of the evidence for the private respondent, we feel that the
complaint should have been dismissed by the trial court for failure of the plaintiff to substantiate its
allegations. It has failed to prove that the subject lot was the same parcel of land sold by Juan
Peralta, Jr. to Alfredo Tabernilla and not another property, as the petitioner contends. Even
assuming it was the same lot, there is no explanation for the sale thereof by Juan Peralta, Jr., who
was only the son of Damasa Timtiman. According to the trial court, "there is no question that before
1934 the land in question belonged to Damasa Timtiman." Juan Peralta, Jr. could not have validly
conveyed title to property that did not belong to him unless he had appropriate authorization from the
owner. No such authorization has been presented.

It is true that tax declarations are not conclusive evidence of ownership, as we have held in many
cases. However, that rule is also not absolute and yields to the accepted and well-known exception.
1âwphi 1

In the case at bar, it is not even disputed that the petitioner and his predecessors-in-interest have
possessed the disputed property since even before World War II. In light of this uncontroverted fact,
the tax declarations in their name become weighty and compelling evidence of the petitioner's
ownership. As this Court has held:
 While it is true that by themselves tax receipts and declarations of ownership for taxation
purposes are not incontrovertible evidence of ownership they become strong evidence of
ownership acquired by prescription when accompanied by proof of actual possession of the
property.9

It is only where payment of taxes is accompanied by actual possession of the land covered
by the tax declaration that such circumstance may be material in supporting a claim of
ownership.10

The tax receipts accompanied by actual and continuous possession of the subject parcels of
land by the respondents and their parents before them for more than 30 years qualify them
to register title to the said subject parcels of land.11

The Court can only wonder why, if Alfredo Tabernilla did purchase the property and magnanimously
allowed Damasa Timtiman to remain there, he did not at least require her to pay the realty taxes
in his name, not hers. The explanation given by the trial court is that he was not much concerned
with the property, being a bachelor and fond only of the three dogs he had bought from America.
That is specious reasoning. At best, it is pure conjecture. If he were really that unconcerned, it is
curious that he should have acquired the property in the first place, even as dacion en pago. He
would have demanded another form of payment if he did not have the intention at all of living on the
land. On the other hand, if he were really interested in the property, we do not see why he did not
have it declared in his name when the realty taxes thereon were paid by Damasa Timtiman or why
he did not object when the payments were made in her own name.

In comparison, all the acts of Damasa Timtiman and Jose Tabuena indicate that they were the
owners of the disputed property. Damasa Timtiman and her forebears had been in possession
thereof for more than fifty years and, indeed, she herself stayed there until she died.12 She paid the
realty taxes thereon in her own name.13 Jose Tabuena built a house of strong materials on the
lot.14 He even mortgaged the land to the Development Bank of the Philippines and to two private
persons who acknowledged him as the owner.15 These acts denote ownership and are not consistent
with the private respondent's claim that the petitioner was only an overseer with mere possessory
rights tolerated by Tabernilla.

It is the policy of this Court to accord proper deference to the factual findings of the courts below and
even to regard them as conclusive where there is no showing that they have been reached
arbitrarily. The exception is where such findings do not conform to the evidence on record and
appear indeed to have no valid basis to sustain their correctness. As in this case.

The conclusions of the trial court were based mainly on Exhibits "A", "B" and "C", which had not
been formally offered as evidence and therefore should have been totally disregarded, conformably
to the Rules of Court. The trial court also erred when it relied on the evidence submitted in Civil Case
No. 1327 and took judicial notice thereof without the consent or knowledge of the petitioner, in
violation of existing doctrine. Thus vitiated, the factual findings here challenged are as an edifice built
upon shifting sands and should not have been sustained by the respondent court.

Our own finding is that the private respondent, as plaintiff in the lower court, failed to prove his claim
of ownership over the disputed property with evidence properly cognizable under our adjudicative
laws. By contrast, there is substantial evidence supporting the petitioner's contrary contentions that
should have persuaded the trial judge to rule in s favor and dismiss the complaint.

WHEREFORE, the petition is GRANTED. The appealed decision is REVERSED and SET ASIDE,
with costs against the private respondent. It is so ordered.
Narvasa, Gancayco, Griño-Aquino and Medialdea, JJ., concur.

12) JUMAMIL VS CAFÉ

Jumamil vs. Café, et al.

Jumamil vs. Café, et al.
[GR 144570, 21 September 2005]
Third Division, Corona (J): 4 concur
Facts: In 1989, Vivencio V. Jumamil filed before the Regional Trial Court (RTC) of Panabo, Davao
del Norte a petition for declaratory relief with prayer for preliminary injunction and writ of
restraining order against Mayor Jose J. Cafe and the members of the Sangguniang Bayan of
Panabo, Davao del Norte. He questioned the constitutionality of Municipal Resolution 7, Series
of 1989 (Resolution 7). Resolution 7, enacting Appropriation Ordinance 111, provided for an
initial appropriation of P765,000 for the construction of stalls around a proposed terminal
fronting the Panabo Public Market which was destroyed by fire. Subsequently, the petition was
amended due to the passage of Resolution 49, series of 1989 (Resolution 49), denominated as
Ordinance 10, appropriating a further amount of P1,515,000 for the construction of additional
stalls in the same public market. Prior to the passage of these resolutions, Mayor Cafe had
already entered into contracts with those who advanced and deposited (with the municipal
treasurer) from their personal funds the sum of P40,000 each. Some of the parties were close
friends and/or relatives of Cafe, et al. The construction of the stalls which Jumamil sought to
stop through the preliminary injunction in the RTC was nevertheless finished, rendering the
prayer therefor moot and academic. The leases of the stalls were then awarded by public raffle
which, however, was limited to those who had deposited P40,000 each. Thus, the petition was
amended anew to include the 57 awardees of the stalls as private respondents. Jumamil alleges
that Resolution Nos. 7 and 49 were unconstitutional because they were passed for the business,
occupation, enjoyment and benefit of private respondents, some of which were close friends
and/or relative of the mayor and the sanggunian, who deposited the amount of P40,000.00 for
each stall, and with whom also the mayor had a prior contract to award the would be
constructed stalls to all private respondents; that resolutions and ordinances did not provide for
any notice of publication that the special privilege and unwarranted benefits conferred on the
private respondents may be availed of by anybody who can deposit the amount of P40,000; and
that nor there were any prior notice or publication pertaining to contracts entered into by public
and private respondents for the construction of stalls to be awarded to private respondents that
the same can be availed of by anybody willing to deposit P40,000.00. The Regional Trial Court
dismissed Jumamil’s petition for declaratory relief with prayer for preliminary injunction and
writ of restraining order, and ordered Jumamil to pay attorney’s fees in the amount of P1,000 to
each of the 57 private respondents. On appeal, and on 24 July 2000 (CA GR CV 35082), the Court
of Appeals affirmed the decision of the trial court. Jumamil filed the petition for review on
certiorari.
Issue [1]: Whether Jumamil had the legal standing to bring the petition for declaratory relief
Held [1]: Legal standing or locus standi is a party’s personal and substantial interest in a case
such that he has sustained or will sustain direct injury as a result of the governmental act being
challenged. It calls for more than just a generalized grievance. The term “interest” means a
material interest, an interest in issue affected by the decree, as distinguished from mere interest
in the question involved, or a mere incidental interest. Unless a person’s constitutional rights
are adversely affected by the statute or ordinance, he has no legal standing. Jumamil brought
the petition in his capacity as taxpayer of the Municipality of Panabo, Davao del Norte and not in
his personal capacity. He was questioning the official acts of the the mayor and the members of
the Sanggunian in passing the ordinances and entering into the lease contracts with private
respondents. A taxpayer need not be a party to the contract to challenge its validity. Parties
suing as taxpayers must specifically prove sufficient interest in preventing the illegal expenditure
of money raised by taxation. The expenditure of public funds by an officer of the State for the
purpose of executing an unconstitutional act constitutes a misapplication of such funds. The
resolutions being assailed were appropriations ordinances. Jumamil alleged that these
ordinances were “passed for the business, occupation, enjoyment and benefit of private
respondents” (that is, allegedly for the private benefit of respondents) because even before
they were passed, Mayor Cafe and private respondents had already entered into lease contracts
for the construction and award of the market stalls. Private respondents admitted they
deposited P40,000 each with the municipal treasurer, which amounts were made available to
the municipality during the construction of the stalls. The deposits, however, were needed to
ensure the speedy completion of the stalls after the public market was gutted by a series of
fires. Thus, the award of the stalls was necessarily limited only to those who advanced their
personal funds for their construction. Jumamil did not seasonably allege his interest in
preventing the illegal expenditure of public funds or the specific injury to him as a result of the
enforcement of the questioned resolutions and contracts. It was only in the “Remark to
Comment” he filed in the Supreme Court did he first assert that “he (was) willing to engage in
business and (was) interested to occupy a market stall.” Such claim was obviously an
afterthought.
Issue [2]: Whether the rule on locus standi should be relaxed.
Held [2]: Objections to a taxpayer's suit for lack of sufficient personality, standing or interest are
procedural matters. Considering the importance to the public of a suit assailing the
constitutionality of a tax law, and in keeping with the Court's duty, specially explicated in the
1987 Constitution, to determine whether or not the other branches of the Government have
kept themselves within the limits of the Constitution and the laws and that they have not
abused the discretion given to them, the Supreme Court may brush aside technicalities of
procedure and take cognizance of the suit. There being no doctrinal definition of transcendental
importance, the following determinants formulated by former Supreme Court Justice Florentino
P. Feliciano are instructive: (1) the character of the funds or other assets involved in the case; (2)
the presence of a clear case of disregard of a constitutional or statutory prohibition by the public
respondent agency or instrumentality of the government; and (3) the lack of any other party
with a more direct and specific interest in raising the questions being raised. But, even if the
Court disregards Jumamil’s lack of legal standing, this petition must still fail. The subject
resolutions/ordinances appropriated a total of P2,280,000 for the construction of the public
 market stalls. Jumamil alleged that these ordinances were discriminatory because, even prior to
their enactment, a decision had already been made to award the market stalls to the private
respondents who deposited P40,000 each and who were either friends or relatives of the mayor
or members of the Sanggunian. Jumamil asserted that “there (was) no publication or invitation
to the public that this contract (was) available to all who (were) interested to own a stall and
(were) willing to deposit P40,000.” Respondents, however, counter that the “public
respondents’ act of entering into this agreement was authorized by the Sangguniang Bayan of
Panabo per Resolution 180 dated 10 October 1988” and that “all the people interested were
invited to participate in investing their savings.” Jumamil failed to prove the subject ordinances
and agreements to be discriminatory. Considering that he was asking the Court to nullify the
acts of the local political department of Panabo, Davao del Norte, he should have clearly
established that such ordinances operated unfairly against those who were not notified and
who were thus not given the opportunity to make their deposits. His unsubstantiated allegation
that the public was not notified did not suffice. Furthermore, there was the time-honored
presumption of regularity of official duty, absent any showing to the contrary.

THIRD DIVISION

VIVENCIO V. JUMAMIL, G.R. No. 144570

Petitioner,

Present:

PANGANIBAN, J., Chairman,

- versus - SANDOVAL-GUTIERREZ,

CORONA,

CARPIO MORALES, and

GARCIA, JJ.
JOSE J. CAFE, GLICERIO L.
ALERIA, RUDY G. ADLAON,
DAMASCENO AGUIRRE, RAMON
PARING, MARIO ARGUELLES,
ROLANDO STA. ANA, NELLIE UGDANG,
PEDRO ATUEL, RUBY BONSOBRE,
RUTH FORNILLOS,
DANIEL GATCHALIAN, RUBEN
GUTIERREZ, JULIET
GATCHALIAN,ZENAIDA POBLETE,
ARTHUR LOUDY, LILIAN LU,
ISABEL MEJIA, EDUARDO ARGUELLES,
LAO SUI KIEN,
SAMUEL CONSOLACION, DR.
ARTUROMONTERO, DRA. LILIOSA
MONTERO, PEDRO LACIA, CIRILA
LACIA, EVELYN SANGALANG,
DAVID CASTILLO, ARSENIO
SARMIENTO, ELIZABETHSY, METODIO
NAVASCA, HELEN VIRTUDAZO, IRENE
LIMBAGA, SYLVIA BUSTAMANTE,
JUANA DACALUS, NELLIE RICAMORA,
JUDITH ESPINOSA, PAZ KUDERA,
EVELYN PANES, AGATON BULICATIN,
PRESCILLA GARCIA, ROSALIA
OLITAO, LUZVIMINDA AVILA, GLORIA
OLAIR, LORITA
MENCIAS, RENATO ARIETA, EDITHA
ACUZAR, LEONARDA VILLACAMPA,
ELIAS JARDINICO,
BOBINO NAMUAG, FELIMON NAMUAG,
EDGAR CABUNOC, HELEN
ARGUELLES, HELEN ANG, FELECIDAD
PRIETO, LUISITO GRECIA, LILIBETH
PARING, RUBEN CAMACHO,
ROSALINDA LALUNA, LUZ YAP,
ROGELIO LAPUT, ROSEMARIE WEE,
TACOTCHE RANAIN, AVELINO DELOS
REYES and ROGASIANO OROPEZA,
Respondents. Promulgated:

September 21, 2005

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

DECISION

CORONA, J.:

In this petition for review on certiorari under Rule 45 of the Rules of

Court, petitioner Vivencio V. Jumamil seeks to reverse the decision
of the Court of Appeals dated July 24, 2000[1] in CA-G.R. CV No.
35082, the dispositive portion of which read:

With the foregoing, the assailed Decision of Branch 4, Regional

Trial Court of Panabo Davao dated 26 November 1990 in Sp. Civil
Action No. 89-1 is hereby AFFIRMED.[2]

The Regional Trial Court dismissed petitioners petition for

declaratory relief with prayer for preliminary injunction and writ of
restraining order, and ordered the petitioner to pay attorneys fees in
the amount of P1,000 to each of the 57 private respondents.[3]

The factual antecedents follow.

In 1989, petitioner Jumamil[4] filed before the Regional Trial

Court (RTC) of Panabo, Davao del Norte a petition for declaratory
relief with prayer for preliminary injunction and writ of restraining
order against public respondents Mayor Jose J. Cafe and the
members of the Sangguniang Bayan of Panabo, Davao del Norte. He
questioned the constitutionality of Municipal Resolution No. 7,
Series of 1989 (Resolution No. 7).

Resolution No. 7, enacting Appropriation Ordinance No. 111,

provided for an initial appropriation of P765,000 for the
construction of stalls around a proposed terminal fronting the
Panabo Public Market[5] which was destroyed by fire.

Subsequently, the petition was amended due to the passage of

Resolution No. 49, series of 1989 (Resolution No. 49), denominated
as Ordinance No. 10, appropriating a further amount of P1,515,000
for the construction of additional stalls in the same public market.[6]

Prior to the passage of these resolutions, respondent Mayor

Cafe had already entered into contracts with those who advanced
and deposited (with the municipal treasurer) from their personal
funds the sum of P40,000 each. Some of the parties were close
friends and/or relatives of the public respondents.[7] The
construction of the stalls which petitioner sought to stop through
the preliminary injunction in the RTC was nevertheless finished,
rendering the prayer therefor moot and academic. The leases of the
stalls were then awarded by public raffle which, however, was
limited to those who had deposited P40,000 each.[8] Thus, the
petition was amended anew to include the 57 awardees of the stalls
as private respondents.[9]

Petitioner alleges that Resolution Nos. 7 and 49 were

unconstitutional because they were:

passed for the business, occupation, enjoyment and benefit of

private respondents who deposited the amount of P40,000.00 for
each stall, and with whom also the mayor had a prior contract to
award the would be constructed stalls to all private respondents.
As admitted by public respondents some of the private
respondents are close friends and/or relatives of some of the
public respondents which makes the questioned acts
discriminatory. The questioned resolutions and ordinances did not
provide for any notice of publication that the special privilege and
unwarranted benefits conferred on the private respondents maybe
(sic) availed of by anybody who can deposit the amount
of P40,000.00.[10]

Neither was there any prior notice or publication pertaining

to contracts entered into by public and private respondents for the
construction of stalls to be awarded to private respondents that
 the same can be availed of by anybody willing to
deposit P40,000.00.[11]

In this petition, petitioner prays for the reversal of the decision

of the Court of Appeals (CA) and a declaration of the
unconstitutionality, illegality and nullity of the questioned
resolutions/ordinances and lease contracts entered into by the
public and private respondents; for the declaration of the illegality
of the award of the stalls during the pendency of this action and for
the re-raffling and award of the stalls in a manner that is fair and
just to all interested applicants;[12] for the issuance of an order to
the local government to admit any and all interested persons who
can deposit the amount of P40,000 for a stall and to order a re-
raffling for the award of the stalls to the winners of the re-raffle; for
the nullification of the award of attorneys fees to private
respondents on the ground that it was erroneous and
unmeritorious; and for the award of damages in favor of petitioner
in the form of attorneys fees.[13]

At the outset, we must point out that the issue of the

constitutionality of the questioned resolutions was never ruled upon
by both the RTC and the CA.
It appears that on May 21, 1990, both parties agreed [14] to await the
decision in CA G.R. SP No. 20424,[15] which involved similar facts,
issues and parties. The RTC, consequently, deferred the resolution
of the pending petition. The appellate court eventually rendered its
decision in that case finding that the petitioners were not entitled to
the declaratory relief prayed for as they had no legal interest in the
controversy. Upon elevation to the Supreme Court as UDK Case No.
9948, the petition for review on certiorari was denied for being
insufficient in form and substance. [16]

The RTC, after receipt of the entry of the SC

judgment,[17] dismissed the pending petition on November 26, 1990.
It adopted the ruling in CA G.R. SP No. 20424:
xxxxxxxxx

We find petitioners aforesaid submission utterly devoid of merit. It

is, to say the least, questionable whether or not a special civil
action for declaratory relief can be filed in relation to a contract by
persons who are not parties thereto. Under Sec. 1 of Rule 64 of
the Rules of Court, any person interested under a deed, will,
contract, or other written instruments may bring an action to
determine any question of the contract, or validly arising under
the instrument for a declaratory (sic) of his rights or duties
thereunder. Since contracts take effect only between the parties
(Art. 1311) it is quite plain that one who is not a party to a
contract can not have the interest in it that the rule requires as a
basis for declaratory reliefs (PLUM vs. Santos, 45 SCRA 147).
 Following this ruling, the petitioners were not parties in the
agreement for the award of the market stalls by the public
respondents, in the public market of Panabo, Davao, and since
the petitioners were not parties to the award of the market stalls
and whose rights are never affected by merely stating that they
are taxpayers, they have no legal interest in the controversy and
they are not, therefore, entitled to bring an action for declaratory
relief.[18]

WHEREFORE, the petition of the petitioners as taxpayers

being without merit and not in consonance with law, is hereby
ordered DISMISSED.

As to the counterclaim for damages, the same not having

been actually and fully proven, the Court gives no award as to the
same. It is not amiss to state here that the petitioners agreed to
be bound by the outcome of Special Civil Case No. 89-10.

However, for unnecessarily dragging into Court the fifty-

seven (57) private respondents who are bonafide businessmen
and stall holders in the public market of Panabo, it is fitting and
proper for the petitioners to be ordered payment of attorneys fees.

Accordingly, the herein petitioners are ordered to pay ONE

THOUSAND (P1,000.00) PESOS EACH to the 57 private
respondents, as attorneys fees, jointly and severally, and for them
to pay the costs of this suit.

SO ORDERED.[19]
From this adverse decision, petitioner again appealed to the
Court of Appeals in CA-G.R. CV No. 35082 which is now before us
for review.
 The appellate court, yet again, affirmed the RTC decision and
held that:
Res judicata does not set in a case dismissed for lack of
capacity to sue, because there has been no determination on the
merits. Neither does the law of the case apply. However, the
court a quo took judicial notice of the fact that petitioners agreed
to be bound by the outcome of Special Civil Case No. 89-
10. Allegans contraria non est audiendus. (He is not to be heard
who alleges things contradictory to each other.) It must be here
observed that petitioners-appellants were the ones who
manifested that it would be practical to await the decision of the
Supreme Court in their petition for certiorari, for after all the facts,
circumstances and issues in that case, are exactly the same as in
the case that is here appealed. Granting that they may evade
such assumption, a careful evaluation of the case would lead Us
to the same conclusion: that the case for declaratory relief is
dismissible. As enumerated by Justice Regalado in his Remedial
Law Compendium, the requisites of an action for declaratory relief
are:

(a) The subject matter of the controversy must be a deed,

will, contract or other written instrument, statute, executive order
or regulation, or ordinance;

(b) The terms of said documents and the validity thereof

are doubtful and require judicial construction;

(c) There must have been no breach of the documents in

question;
 (d) There must be an actual justiciable controversy or the
ripening seeds of one between persons whose interests are
adverse;

(e) The issue must be ripe for judicial determination; and

(f) Adequate relief is not available through other means or

other forms of action or proceeding.

In Tolentino vs. Board of Accountancy, et al, 90 Phil. 83, 88,

the Supreme Court ratiocinated the requisites of justiciability of an
action for declaratory relief by saying that the court must be
satisfied that an actual controversy, or the ripening seeds of one,
exists between parties, all of whom are sui juris and before the
court, and that the declaration sought will be a practical help in
ending the controversy.

The petition must show an active antagonistic assertion of a

legal right on one side and a denial thereof on the other
concerning a real, and not a mere theoretical question or issue.
The question is whether the facts alleged a substantial
controversy between parties having adverse legal interests, of
sufficient immediacy and reality to warrant the issuance of a
declaratory relief. In GSISEA and GSISSU vs. Hon. Alvendia etc.
and GSIS, 108 Phil. 505, the Supreme Court ruled a declaratory
relief improper or unnecessary when it appears to be a moot
case, since it seeks to get a judgment on a pretended
controversy, when in reality there is none. In Kawasaki Port
Service Corporation vs. Amores, 199 SCRA 230, citing Dy Poco
vs. Commissioner of Immigration, et al., 16 SCRA 618, the rule
was stated: where a declaratory judgment as to a disputed fact
would be determinative of issues rather than a construction of
definite stated rights, statuses and other relations, commonly
expressed in a written instrument, the case is not one for
declaratory judgment.

Indeed, in its true light, the present petition for declaratory

relief seems to be no more than a request for an advisory opinion
to which courts in this and other jurisdiction have cast a definite
aversion. The ordinances being assailed are appropriation
ordinances. The passage of the ordinances were pursuant to the
public purpose of constructing market stalls. For the exercise of
judicial review, the governmental act being challenged must have
had an adverse effect on the person challenging it, and the
person challenging the act, must have standing to challenge, i.e.,
in the categorical and succinct language of Justice Laurel, he
must have a personal and substantial interest in the case such
that he has sustained, or will sustain, direct injury as a result of its
enforcement. Standing is a special concern in constitutional law
because in some cases suits are brought not by parties who have
been personally injured by the operation of a law or by official
action taken, but by concerned citizens, taxpayers or voters who
actually sue in the public interest. Hence the question in standing
is whether such parties have alleged such a personal stake in the
outcome of the controversy as to assure that concrete
adverseness which sharpens the presentation of issues upon
which the court largely depends for illumination of difficult
constitutional questions.

A careful analysis of the records of the case at bar would

disclose that petitioners-appellants have suffered no wrong under
the terms of the ordinances being assailed and, naturally need no
relief in the form they now seek to obtain. Judicial exercise cannot
be exercised in vacuo. The policy of the courts is to avoid ruling
on a constitutional question and to presume that the acts of the
 political departments are valid in the absence of a clear and
unmistakable showing to the contrary. To doubt is to sustain. The
issue is not the ordinances themselves, but the award of the
market stalls to the private respondents on the strength of the
contracts individually executed by them with Mayor Cafe. To
reiterate, a person who is not a party to a contract cannot file a
petition for declaratory relief and seek judicial interpretation of
such contract (Atlas Consolidated Mining Corp. vs. Court of
Appeals, 182 SCRA 166). Not having established their locus
standi, we see no error committed by the court a quo warranting
reversal of the appealed decision.

With the foregoing, the assailed Decision of Branch 4,

Regional Trial Court of Panabo Davao dated 26 November 1990
in Sp. Civil Action No. 89-1 is hereby AFFIRMED.

SO ORDERED.[20]

Thus, both the RTC and the CA dismissed the case on the
ground of petitioners lack of legal standing and the parties
agreement to be bound by the decision in CA G.R. SP. No. 20424.
The issues to be resolved are the following:
(1) whether the parties were bound by the outcome in CA G.R.

SP. No. 20424;

(2) whether petitioner had the legal standing to bring the
petition for declaratory relief;
 (3) whether Resolution Nos. 7 and 49 were unconstitutional;
and
(4) whether petitioner should be held liable for damages.

LOCUS STANDI AND THE

CONSTITUTIONALITY ISSUE

We will first consider the second issue. The petition for

declaratory relief challenged the constitutionality of the subject
resolutions. There is an unbending rule that courts will not assume

jurisdiction over a constitutional question unless the following

requisites are satisfied: (1) there must be an actual case calling for
the exercise of judicial review; (2) the question before the Court

must be ripe for adjudication; (3) the person challenging the validity
of the act must have standing to do so; (4) the question of
constitutionality must have been raised at the earliest opportunity,

and (5) the issue of constitutionality must be the very lis mota of
the case.[21]
Legal standing or locus standi is a partys personal and
substantial interest in a case such that he has sustained or will
sustain direct injury as a result of the governmental act being
challenged. It calls for more than just a generalized grievance. The
term interest means a material interest, an interest in issue affected
by the decree, as distinguished from mere interest in the question
involved, or a mere incidental interest.[22] Unless a persons
constitutional rights are adversely affected by the statute or
ordinance, he has no legal standing.

The CA held that petitioner had no standing to challenge the

two resolutions/ordinances because he suffered no wrong under
their terms. It also concluded that the issue (was) not the
ordinances themselves but the award of the market stalls to the
private respondents on the strength of the contracts individually
executed by them with Mayor Cafe. Consequently, it ruled that
petitioner, who was not a party to the lease contracts, had no
standing to file the petition for declaratory relief and seek judicial
interpretation of the agreements.

We do not agree. Petitioner brought the petition in his capacity

as taxpayer of the Municipality of Panabo, Davao del Norte [23] and
not in his personal capacity. He was questioning the official acts of
the public respondents in passing the ordinances and entering into
the lease contracts with private respondents. A taxpayer need not
be a party to the contract to challenge its validity.[24] Atlas
Consolidated Mining & Development Corporation v. Court of
Appeals[25] cited by the CA does not apply because it involved
contracts between two private parties.

Parties suing as taxpayers must specifically prove sufficient

interest in preventing the illegal expenditure of
money raised by taxation.[26] The expenditure of public funds by an
officer of the State for the purpose of executing an unconstitutional
act constitutes a misapplication of such

funds.[27] The resolutions being assailed were appropriations

ordinances. Petitioner alleged that these ordinances were passed for
the business, occupation, enjoyment and benefit of private
respondents[28] (that is, allegedly for the private benefit of
respondents) because even before they were passed, respondent
Mayor Cafe and private respondents had already entered into lease
contracts for the construction and award of the market
stalls.[29] Private respondents admitted they deposited P40,000 each
with the municipal treasurer, which amounts were made available
to the municipality during the construction of the stalls. The
deposits, however, were needed to ensure the speedy completion of
the stalls after the public market was gutted by a series of
fires.[30] Thus, the award of the stalls was necessarily limited only to
those who advanced their personal funds for their construction.[31]

Petitioner did not seasonably allege his interest in preventing

the illegal expenditure of public funds or the specific injury to him
as a result of the enforcement of the questioned resolutions and
contracts. It was only in the Remark to Comment he filed in this
Court did he first assert that he (was) willing to engage in business
and (was) interested to occupy a market stall.[32] Such claim was
obviously an afterthought.
 Be that as it may, we have on several occasions relaxed the
application of these rules on legal standing:

In not a few cases, the Court has liberalized the locus standi
requirement when a petition raises an issue of transcendental
significance or paramount importance to the people. Recently,
after holding that the IBP had no locus standi to bring the suit, the
Court in IBP v. Zamora nevertheless entertained the Petition
therein. It noted that "the IBP has advanced constitutional issues
which deserve the attention of this Court in view of their
seriousness, novelty and weight as precedents."[33]

―oOo―

Objections to a taxpayer's suit for lack of sufficient

personality, standing or interest are procedural matters.
Considering the importance to the public of a suit assailing the
constitutionality of a tax law, and in keeping with the Court's duty,
specially explicated in the 1987 Constitution, to determine
whether or not the other branches of the Government have kept
themselves within the limits of the Constitution and the laws and
that they have not abused the discretion given to them, the
Supreme Court may brush aside technicalities of procedure and
take cognizance of the suit.[34]
―oOo―

There being no doctrinal definition of transcendental

importance, the following determinants formulated by former
Supreme Court Justice Florentino P. Feliciano are instructive: (1)
the character of the funds or other assets involved in the case; (2)
the presence of a clear case of disregard of a constitutional or
statutory prohibition by the public respondent agency or
instrumentality of the government; and (3) the lack of any other
party with a more direct and specific interest in raising the
questions being raised.[35]
 But, even if we disregard petitioners lack of legal standing, this
petition must still fail. The subject resolutions/ordinances
appropriated a total of P2,280,000 for the construction of the public
market stalls. Petitioner alleges that these ordinances were
discriminatory because, even prior to their enactment, a decision
had already been made to award the market stalls to the private
respondents who deposited P40,000 each and who were either
friends or relatives of the public respondents. Petitioner asserts that
there (was) no publication or invitation to the public that this
contract (was) available to all who (were) interested to own a stall
and (were) willing to deposit P40,000.[36] Respondents, however,
counter that the public respondents act of entering into this
agreement was authorized by the Sangguniang Bayan of Panabo per
Resolution No. 180 dated October 10, 1988[37] and that all the
people interested were invited to participate in investing their
savings.[38]

We note that the foregoing was a disputed fact which the

courts below did not resolve because the case was dismissed on the
basis of petitioners lack of legal standing. Nevertheless, petitioner
failed to prove the subject ordinances and agreements to be
discriminatory. Considering that he was asking this Court to nullify
the acts of the local political department of Panabo, Davao del
Norte, he should have clearly established that such ordinances
operated unfairly against those who were not notified and who were
thus not given the opportunity to make their deposits. His
unsubstantiated allegation that the public was not notified did not
suffice. Furthermore, there was the time-honored presumption of
regularity of official duty, absent any showing to the
contrary.[39] And this is not to mention that:

The policy of the courts is to avoid ruling on constitutional

questions and to presume that the acts of the political
departments are valid, absent a clear and unmistakable showing
to the contrary. To doubt is to sustain. This presumption is based
on the doctrine of separation of powers. This means that the
measure had first been carefully studied by the legislative and
executive departments and found to be in accord with the
Constitution before it was finally enacted and approved.[40]

Therefore, since petitioner had no locus standi to

question the ordinances, there is no need for us to discuss the

constitutionality of said enactments.

WERE THE PARTIES BOUND BY THE

OUTCOME IN CA G.R. SP. NO. 20424?

Adverting to the first issue, we observe that petitioner was the

one who wanted the parties to await the decision of the Supreme
Court in UDK Case No. 9948 since the facts and issues in that case
were similar to this. Petitioner, having expressly agreed to be bound
by our decision in the aforementioned case, should be reined in by
the dismissal order we issued, now final and executory. In addition
to the fact that nothing prohibits parties from committing to be
bound by the results of another case, courts may take judicial
notice of a judgment in another case as long as the parties give

their consent or do not object.[41] As opined by Justice Edgardo L.

Paras:

A court will take judicial notice of its own acts and records in
the same case, of facts established in prior proceedings in the
same case, of the authenticity of its own records of another case
between the same parties, of the files of related cases in the
same court, and of public records on file in the same court. In
addition, judicial notice will be taken of the record, pleadings or
judgment of a case in another court between the same parties or
involving one of the same parties, as well as of the record of
another case between different parties in the same court.[42]
DAMAGES

Finally, on the issue of damages, petitioner asserts that he

impleaded the 57 respondents in good faith since the award of the
stalls to them was made during the pendency of the
action.[43] Private respondents refute this assertion and argue that
petitioner filed this action in bad faith and with the intention of
harassing them inasmuch as he had already filed CA G.R. SP. No.
20424 even before then.[44] The RTC, affirmed by the CA, held that
petitioner should pay attorneys fees for unnecessarily dragging into
Court the 57 private respondents who (were) bonafide businessmen
and stall holders in the public market of Panabo.[45]

We do not agree that petitioner should be held liable for

damages. It is not sound public policy to put a premium on the
right to litigate where such right is exercised in good faith, albeit
erroneously.[46] The alleged bad faith of petitioner was never
established. The special circumstances in Article 2208 of the Civil
Code justifying the award of attorneys fees are not present in this
case.

WHEREFORE, the decision of the Court of Appeals in CA-G.R.

CV No. 35082 is hereby AFFIRMED with the MODIFICATION that
the award of attorney's fees to private respondents is deleted.

Costs against petitioner.

SO ORDERED.
 RENATO C. CORONA
Associate Justice
13) REPUBLIC VS CA 107 SCRA 504

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. L-54886 September 10, 1981

REPUBLIC OF THE PHILIPPINES, petitioner,

vs.
THE HONORABLE COURT OF APPEALS (Special Second Division), COURT OF FIRST
INSTANCE OF BULACAN, TURANDOT, TRAVIATA, MARCELITA, MARLENE, PACITA,
MATTHEW, VICTORIA and ROSARY, all surnamed ALDABA, respondents.

MAKASIAR, J.:

Petitioner, through this petition for review by certiorari, seeks to annul and set aside the respondent
Court of Appeals' April 29, 1980 decision and August 15, 1980 resolution in CA G.R. No. 10081-SP,
entitled "Republic of the Philippines versus Hon. Roque Tamayo, et al. " — a special action for
certiorari, prohibition and mandamus — sustaining the lower court's action in dismissing petitioner's
appeal as not having been perfected on time.

The root case is an expropriation proceedings initiated by the petitioner over a 15,000 square meter
lot of private respondents situated in Barrio Tikay, Malolos, Bulacan, docketed in the lower court as
Civil Case No. 525, entitled " Republic of the Philippines vs. Turandot Aldaba, et al. " The subject
parcel of land is needed by the petitioner to set up a permanent site for the Bulacan Area Shop,
Bureau of Equipment, Department of Public Highways, a public purpose authorized by law to be
undertaken by the Ministry of Public Highways. On March 2, 1978, the lower court issued a writ of
possession placing the petitioner in possession of the land in question, upon its deposit of the
amount of P7,200.00 as provisional value. On March 31, 1978, counsel for private respondents filed
a motion praying for the creation of a three (3)- man committee in accordance with Section 5, Rule
67 of the Rules of Court, to study and submit a report as to the just and reasonable compensation
for the parcel of land subject of expropriation. On July 31, 1978, the lower court issued an order
naming the chairman and members of the committee of three. On November 17. 1978, the three-
man committee submitted a joint report to the lower court, recommending that the just compensation
of the expropriated land be fixed at P50.00 per square meter. In this petition, the Solicitor General
claims that he was not served copies of the aforementioned March 31, 1978 motion of private
respondents, July 31, 1978 order of the respondent lower court and the November 17, 1978 report of
the three-man committee. The records reveal that the Solicitor General authorized the provincial
fiscal of Bulacan to represent him in that proceedings (pp. 11-12, C.A. rec.). Parenthetically, private
respondents in their comment to this petition, alleged "that the Provincial Fiscal, being duly
authorized by the office of the Solicitor General to represent the latter in this case, the court merely
furnished the office of the Provincial Fiscal with all the pleadings and other papers of the case,, (p.
53, rec.).
On December 18, 1978, the Solicitor General received a copy of the lower court's order dated
December 8, 1978. The order reads in part:

The joint report filed by the three-man committee charged with the determination of
the just compensation of the property herein sought to be condemned is hereby
APPROVED, such that the just compensation of the land described in Paragraph 11
of the Complaint is fixed at Thirty Pesos (P30.00) per square meter.

The defendant may now withdraw from the Philippine National Bank, Malolos,
Branch, the sum of P7,200.00 deposited by the Third Regional Equipment Services,
Department of Public Highways under Account No, 35109, said sum to be part of the
total amount of P450,000.00 (15,000 square meters at P30.00 per square meter),
which the Department of Public Highways, Third Regional Equipment Services,
Malolos, Bulacan, shall, and is hereby ordered, to pay to the herein defendants as
just compensation for the subject property.

On December 22, 1978, the Solicitor General filed through the mail a notice of appeal as well as
a first motion for extension of time of 30 days from January 17, 1979 within which to file record on
appeal. The extension sought for was granted by the lower court in its order dated January 17, 1979.

On February 13, 1979, the lower court, acting upon petitioner's manifestation filed on January 9,
1979 and motion filed on February 8, 1979, allowed the Solicitor General to borrow the records of
the expropriation case "under proper receipt, the Clerk of Court taking the necessary steps to index
and number the pages thereof and to ensure its integrity; and granted a second extension of thirty
(30) days from February 17, 1979, within which to file the record on appeal of the Republic of the
Philippines" (p. 79, C.A. rec.).

Again, on March 22, 1979, the lower court granted petitioner's third motion for an extension of thirty
(30) days from March 19, 1979 within which to file its record on appeal (p. 80, C.A. rec.).

Subsequently, the lower court, in an order dated April 24, 1980, acted favorably upon petitioner's
motion for a fourth extension of thirty (30) days from April 19, 1979 within which to file its record on
appeal and petitioner's request that the records of the expropriation case be forwarded to the
Solicitor General (p. 81, C.A. rec.).

In a motion dated May 17, 1979, the petitioner, invoking heavy pressure of work, asked for a fifth
extension of thirty (30) days from May 18, 1979 or until June 17, 1979, within which to file its record
on appeal (pp. 82-83, C.A. rec.).

On June 7, 1979, when its motion for a fifth extension has not yet been acted upon by the lower
court, petitioner filed its record on appeal (p. 13, rec.).

On June 15, 1979, eight (8) days after petitioner had filed its record on appeal, private respondents
filed an opposition to the aforesaid fifth motion for extension (pp. 85-87, C.A. rec.), and an objection
to petitioner's record on appeal (pp. 88-89, C.A. rec.), on the ground that the same was filed beyond
the reglementary period, because petitioner's motion dated May 17, 1979 for extension to file record
on appeal was mailed only on May 21, 1979 (pp. 13-14, rec.).

On June 27, 1979, petitioner filed its opposition to the aforesaid objection to its record on appeal,
contending that the said May 17, 1979 motion for extension of time was actually mailed on May 18,
1979, which was the last day of the extended period allowed by the lower court's order of April 24,
1979 (p. 14, rec.).
In an order dated August 13, 1979 but received by the Solicitor General only on September 10,
1979, the lower court dismissed the appeal of petitioner on the ground that the fifth motion for
extension of time dated May 17,1979 within which to file the record on appeal and the record on
appeal were filed out of time. The lower court found that the said fifth motion for extension of time
was actually mailed on May 21, 1979 and not on May 18, 1979 as claimed by petitioner (pp. 14, 34-
35, rec.). The order of dismissal reads:

Upon consideration of the approval of the record on appeal filed by the Republic and
acting on the manifestation filed on July 25, 1979 by the defendants thru counsel, the
Court finds no merit in the same.

The last motion of the Office of the Solicitor General for extension of time to file
record on appeal was on May 17, 1979, seeking for an additional extension of thirty
(30) days from April 18, 1979.

The thirty-day period requested by the Solicitor General from May 18, 1979 therefore
expired on June 17, 1979. But this last request for extension was not acted upon by
the court. The Republic of the Philippines had therefore only up to May 17, 1979,
within which to file record on appeal. The record on appeal was filed only on June 11,
1979 (should be June 7), which is well beyond the period to file record on appeal
Moreover, the last motion for extension which was not acted upon by the Court had
only been filed on May 21, 1979 as shown by the stamp of the Manila Post Office,
the date of the mailing which should be reckoned with in computing periods of mailed
pleadings, and received by the Court on June 22, 1979. Both the motion for
extension filed on May 21, 1979 and the record on appeal filed on June 11, 1979
(should be June 7), have therefore been filed beyond the reglementary period of 30
days from April 18, 1979, or up to May 18,1979.

xxx xxx xxx

(pp. 34-35, rec.).

On October 4, 1979, petitioner filed a motion for reconsideration claiming that "l) there is merit in
plaintiff's appeal from tills Honorable Court's order of December 8, 1978, a copy of which was
received on December 18, 1978; 2) plaintiff's May 17, 1979 motion for 30 days extension from May
17, 1979 to file Record on Appeal, was actually filed on May 18, 1919; and 3) the Honorable Court
denied plaintiff's appeal without first resolving plaintiff's motion for a 30-day extension, from May 18,
1979 to file Record on Appeal" (pp. 14-15, rec.; pp. 52-66, C.A. rec.). Relative to the timeliness of
the filing of its fifth motion for extension of time, petitioner submitted a certification of the Postmaster
of the Central Office of the Bureau of Posts, Manila, that registered letter No. 3273 containing the
aforesaid motion addressed to the Clerk of Court of the Court of First Instance of Malolos, Bulacan
... was received by this Office late Friday afternoon, May 18, 1979. The letter was not included in the
only morning dispatch of May 19 to Bulacan and was dispatched May 21, 1979, Monday (May 20,
being a Sunday) under the Manila — Malolos Bill No. 202, page 1, line 15" (p. 66, C.A. rec.).

On the merits of the dismissed appeal, petitioner stressed that the creation of a three-man
committee to fix the just compensation of the expropriated lot was without legal basis, because
Section 5, Rule 6 of the Rules of Court upon which the same was anchored had already been
repealed by the provisions of Presidential Decree No. 76 which took effect on December 6, 1972 —
under which the court has no alternative but to base the just compensation of expropriated property
upon the current and fair market value declared by the owner or administrator. or such market value
as determined by the assessor, whichever is lower.
On October 31, 1979, the lower court denied petitioner's motion for reconsideration for lack of merit
(pp. 36-40, rec.; pp. 2832, C.A. rec.), thus:

The grounds advanced by the plaintiff Republic of the Philippines have been fully
taken into account by the Court in its order of August 13, 1979, particularly the late
filing of the record on appeal. Plaintiff's counsel should not have assumed that the
motion for extension of the period for filing of the record on appeal would be granted.

The plaintiff's counsel's belief that their May 17, 1979 motion would be granted
cannot be the basis for the plaintiff to be absolved of the effect of late filing of the
record on appeal considering that the Court had liberally extended for five times *, each
for thirty (30) days, the filing of said record. This Court considers said extensions as sufficient time for the counsel for
plaintiff to prepare its record on appeal. Plaintiff's counsel, with all the resources it has to protect its client's interests,
should have been vigilant enough not to assume and should not expect that their motion for extension would be
granted. It is not correct therefore that only three days had elapsed after the reglementary period to perfect appeal
because the reglementary period ended not on June 17, 1979, but on May 17, 1979, because the last motion for
extension was not granted by the Court.

The Court deplores the insinuation of plaintiff's counsel that it took hook, line and
sinker, defendant's allegation about the fact of mailing. I t has carefully gone over the
record and found that the date of mailing of the motion for extension is May 21, 1979,
as shown by the stamp 'Registered, Manila, Philippines, May 1, 1979 appearing on
the covering envelope containing the motion for extension. Therefore, the
explanation contained in Annex B of the motion for reconsideration to the effect that
registered Letter No. 3273, addressed to the Clerk of Court, Court of First Instance of
Malolos, Bulacan, was received by the Manila Post Office late Friday afternoon, May
18, 1979, but was not included in the "only" morning dispatch of May 19 to Bulacan
and was dispatched May 21, 1979, Monday (May 20 being a Sunday), under the
Manila—Malolos Bill No. 202, page 1, line 15', can not overturn the fact of date of
actual mailing which is May 21, 1979, because it is of judicial knowledge that a
registered letter when posted is immediately stamped with the date of its receipt,
indicating therein the number of the registry, both on the covering envelope itself and
on the receipt delivered to the person who delivered the letter to the post office. The
letter Annex B of the motion therefore lacks sufficient weight and persuasiveness to
prove the fact that the letter asking for another extension was actually filed on May
18, 1979, and not May 21, 1979.

Regarding the creation of a three-man committee which according to plaintiff the

Court sorely lacked the prerogative to create pursuant to Sec. 5, Rule 67 of the Rules
of Court because it has been superseded by the provisions of PD 76 which definitely
fixed the guidelines for the determination of just compensation of private property
acquired by the State for public use, the Court had to resort to this old method of
determining fair market value, which is defined as:

The "current and fair market value" shall be understood to mean the
"price of which a willing seller would sell and a willing buyer would
buy neither being under abnormal pressure", because, firstly; the
plaintiff failed to show evidence thereof as declared by the owner or
administrator of the property under the provisions of PD 76, or the
valuation or assessment of the value as determined by the assessor,
whichever is lower. Hence, for all intents and purposes, the findings
of the three-man committee have become the basis of the evaluation,
Paragraph Ill of the complaint notwithstanding, because allegation in
the complaint, unless proved, are not binding as evidence.
 Presidential Decree No. 42, from its very caption, which reads:

PRESIDENTIAL DECREE NO. 42 AUTHORIZING THE PLAINTIFF

IN EMINENT DOMAIN PROCEEDINGS TO TAKE POSSESSION OF
THE PROPERTY INVOLVED UPON DEPOSITING THE ASSESSED
VALUE FOR PURPOSES OF TAXATION

does not fix the value of the property to be expropriated, but rather for the purpose of
taking possession of the property involved, the assessed value for purposes of
taxation is required to be deposited in the Philippine National Bank or any of its
branches or agencies. This is borne out by the first Whereas of the decree which
finds the existing procedure for the exercise of the right of eminent domain not
expeditious enough to enable the plaintiff to take or enter upon the possession of the
real property involved, when needed for public purposes. The
second Whereas states that the measure is in the national interest in order to effect
the desired changes and reforms to create a new society and economic order for the
benefit of the country and its people.

The body of the law does not specify the valuation of the property, but rather the
method by which seizure of the property could be done immediately, and that is by
the act of depositing with the Philippine National Bank, in its main office or any of its
branches or agencies, an amount equivalent to the assessed value of the property
for purposes of taxation, to be held by said bank subject to the orders and final
disposition of the Court.

Only in this respect are the provisions of Rule 67 of the Rules of Court and or any
other existing law contrary to or inconsistent therewith repealed. If at an, the decree,
PD 42, fixes only a provisional valueof the property which does not necessarily
represent the true and correct value of the land as defined in PD 76. It is only
provisional or tentative to serve as the basis for the immediate occupancy of the
property being expropriated by the condemnor. This is in line with the recent decision
of the Honorable Supreme Court promulgated on October 18, 1979, in the case of
the Municipality of Daet, Petitioner, vs. Court of Appeals and Li Seng Giap & Co.,
Inc., Respondents, G.R. No. L-45861, which states in part:

..., it can already be gleaned that said decree fixes only the
provisional value of the property. As a provisional value, it does not
necessarily represent the true and correct value of the land. The
value is only "provisional" or "tentative" to serve as the basis for the
immediate occupancy of the property being expropriated by the
condemnor.

xxx xxx xxx

(pp. 28-32, rec.).

Dissatisfied with the aforesaid orders of the lower court, petitioner on December 3, 1979 filed with
the respondent Court of Appeals a petition for certiorari, prohibition and mandamus with preliminary
injunction in CA-G.R. No. 10081-Sp, entitled: Republic of the Philippines versus Court of First
Instance of Bulacan, Branch VI, presided over by Hon. Roque Tamayo, et al., whereby it prayed
that: 1) This petition be given due course; 2) A writ of preliminary injunction and/or temporary
retraining order be issued ex-parte restraining respondent court from executing, enforcing and/or
implementing its Order dated December 8, 1978, ... and its orders dated August 13, 1979 and
October 31, 1979 ...; 3) After hearing on the merits, judgment be rendered: [a] annulling and setting
aside respondent court's Orders of August 13, 1979 ... : [b] Directing and compelling respondent
court to allow and approve petitioner's record on appeal and to certify and elevate the same to this
Honorable Court; [c] Declaring the writ of preliminary injunction and/or restraining order herein
prayed for to be made permanent and perpetual" and for such other relief as the Court may deem
just and equitable in the premises.

On December 14, 1979, respondent Court of Appeals issued a temporary restraining order to
maintain the status quo, and required private respondents to file their comment (pp. 67-68, C.A.
rec.).

On January 2, 1980, private respondents filed the required comment (pp. 69-91, C.A. rec.).

On April 29, 1980, respondent Court of Appeals dismissed petitioner's action and set aside its
December 14, 1979 restraining order. The respondent Court of Appeals ruled that "A review of the
whole record convinces Us that the challenged orders are not a capricious and whimsical exercise of
judgment as to constitute a grave abuse of discretion ..." (pp. 44-45, rec.). The Solicitor General
received a copy of the aforesaid decision on May 19, 1980.

On May 30, 1980, the Solicitor General sought a thirty-day extension from June 3, 1980 within which
to file a motion for reconsideration (pp. 106-107, C.A. rec.).

On June 20, 1980, the respondent Court of Appeals granted the extension sought (p. 108, C.A. rec.).

On June 23, 1980, the Solicitor General filed his motion for reconsideration on the ground that, "The
Honorable Court of Appeals was misled by private respondents' counsel in holding that petitioner's
motion for extension of time to file record on appeal dated May 17, 1979 ... was filed on May 21,
1979, not on May 18, 1979 (which was the last day within which to file petitioner's record on appeal);
hence, this Honorable Court was not correct in ARRIVING AT THE CONCLUSION THAT
PETITIONER'S AFORESAID MOTION FOR EXTENSION was filed beyond the reglementary period"
(pp. 109-118, C.A. rec.). Petitioner also moved to set the case for oral argument (p. 119, C.A. rec.).
Petitioner vehemently insisted as it did in the main action (pp. 10-12, C.A. rec.), that it is erroneous
to conclude that its

... motion for extension dated May 17, 1979 ... was filed on May 21, 1979 and not on
May 18, 1979 which is the last day of the extended period fixed by respondent court
for petitioner to file its record on appeal. It is submitted that the motion for extension
dated May 17, 1979 ... was actually filed on May 18,1979 as there is incontrovertible
proof that the same was in fact mailed on May 18, 1979 via registered mail (Registry
Letter 3273) at the Manila Central Office of the Bureau of Posts. A letter dated
September 26, 1979 of Delfin Celis, postmaster of Central Post Office, Manila, to the
Chief of the Records Section of the Office of the Solicitor General shows that the
envelope containing the May 17, 1979 motion was received by the Post Office of
Manila on May 17, 1979. Said letter states:

In compliance to your request in your letter dated September 20,

1979 in connection with registered letter No. 3273 addressed to the
Clerk of Court, Court of First Instance Malolos, Bulacan, please be
informed that it was received by this Office late Friday afternoon, May
18, 1979. The letter was not included in the only morning dispatch of
May 19 to Bulacan and was dispatched May 21, 19719, Monday
 (May 20, being a Sunday) under the Manila- Malolos Bill No. 202,
page 1, line 15.

Thus, it is conceded that the envelope containing the registered letter of petitioner's
motion for extension to file record on appeal dated May 17, 1979 has on its face the
date May 21, 1979 stamped thereon ... . If the aforesaid proof of mailing presented
by private respondent is taken into account solely without taking into consideration
the letter of postmaster Delfin Celis dated September 25, 1979 ... , then it could be
said that petitioner's motion for extension to file record on appeal dated May 17,
1979 was filed out of time. However, the certification of the Postmaster stating that
the letter was actually received in the Post Office on May 18, 1979 conclusively
shows that such date is the date of mailing, and the date May 21, was thus wrongly
stamped thereon by an employee of the Post Office. Petitioner should not be blamed
for the mistake committed by the personnel of the Post Office of stamping May 21,
1979 on the envelope of said Registered Letter No. 3273. Petitioner's counsel had
nothing to do with the aforesaid mistake that had been committed by the personnel of
the Post Office.

In resume it can be said with certainty that the records of the Office of the Solicitor
General and the Post Office of Manila clearly show that the petitioner's motion for
extension dated May 17, 1979 was seasonably filed on May 18, 1979 as the latter
was actually the date of its mailing and therefore said date should be deemed as the
actual date of its filing before respondent court.

At this juncture, it may be stated that undersigned counsel were constrained to seek
extension to file record on appeal because of the pressure of work and their need to
borrow the records of the case from the trial court. Thus, as early as January 9, 19-i
9, they were borrowing the expediente of the case so as to enable them to prepare
an accurate record on appeal. Petitioner in its motion and manifestation of January 9,
1979 stated why it wanted to borrow the expediente of the case at bar, as follows:

3. The records of the undersigned counsel may not be complete as it

had authorized the Provincial Fiscal of Bulacan to appear in the
hearings before this honorable Court, thus it is possible that the
Office of the Solicitor General may not have been furnished copies of
Orders of this honorable Court, as well as pleadings that may have
been furnished the provincial Fiscal of Bulacan.

4. This being the case, undersigned counsel can not prepare an

accurate and concise record on appeal, hence it is necessary that the
records of the case be lent to the undersigned counsel pursuant to
Sec. 14, Rule 1:36, of the Revised Rules of Court' (pp. 6-7 Motion for
Reconsideration [in the CFI of Bulacan]; see pp. 52, 57-58, C.A. rec.),

On April 10, 1979, undersigned counsel reiterated their desire to borrow

said expediente but it was not until May 3, 1979 that the expediente of the case
consisting of 164 pages were received by the Docket Section of the Office of the
Solicitor General. It was only on May 16, 1979 that said expediente were delivered to
undersigned Solicitor, thus compelling him to prepare the May 17, 1979 motion. And
for the same reasons, it was only on June 7, 1979 that the record on appeal was
filed, which was well within the 30 days extension from May 18, 1979 prayed for in
petitioner's motion of May 17, 1979.
 xxx xxx xxx

(pp. 109-113, C.A. rec.).

On July 14, 1980, respondent Court of Appeals resolved to require private respondents to comment
on the motion for reconsideration within ten (10) days from receipt of the resolution (p. 12 1, C.A.
rec.).

Earlier, however, or on July 8, 1980, private respondents mailed their opposition to the motion for
reconsideration and their waiver to appear for oral argument (pp. 122-123, C.A. rec.), Both were
received by the Court of Appeals on July 14, 1980, the very day the resolution requiring private
respondents to comment on the motion for reconsideration, was released by the Court of Appeals. In
the petition before this Court, the Solicitor General laments the fact that no copies of the aforesaid
pleadings of the private respondents were ever served on and received by him (p. 18, rec.). Indeed,
said pleadings of the private respondents do not show nor indicate that copies thereof were served
on the Solicitor General (pp. 121-123, C.A. rec.).

In the aforesaid opposition of private respondents, they claimed that

The undersigned counsel merely stated that the date of filing the fifth motion for
extension to file record on appeal by the office of the Solicitor General was on May
21, 1979, as shown on the envelope bearing the stamp of the Manila Post Office,
which clearly reads 'May 21, 1979 and the undersigned counsel brought to the
attention of the lower court that the date of filing of this fifth extension was the date
shown when the mailing was made as stamped on the envelope. That there can be
no other date than the date stamped on the envelope made by the Manila Post Office
when the fifth request for extension of filing the record on appeal was mailed. This
fact of the date of mailing, May 21, 1979, was stamped on the envelope.

The office of the Solicitor General further alleged:

If ... taken into account solely without taking into consideration the
letter of the Post Master Delfin Cells, dated September 25, 1979 x x,
then it could be said that petitioner's motion for extension to file
record on appeal, dated May 17, 1979, was filed out of time.

From the above statement of the Office of the Solicitor General there can never be
any abuse in the exercise of judgment as to constitute a grave abuse of discretion.
the lower court chose to rely on the date stamped on the envelope by the Manila
Post Office rather than considering as paramount a mere letter from the Manila Post
Office employee, Delfin Cells.

xxx xxx xxx

If we are to believe that the stamped date, May 21, 1979, was wrongly stamped by
an employee of the Manila Post Office, then thousands of mails received and or
mailed on that date were all wrongly stamped. How can the lower court believe that
the date May 21, 1979, was merely erroneously stamped on the envelope? The
lower court's finding of facts on this regard, must also be sustained.
 The other reason given by the Office of the Solicitor General was that they have
asked for the complete record of the case but that it was only forwarded to their office
sometime on May 3, 1979.

The record of the case cannot be easily forwarded to the Solicitor General because
there was the case of motion for intervention filed in connection with the case.

The failure on the part of the court to immediately comply with the request of the
office of the Solicitor General cannot be a justifying reason for failure to comply with
the rules of court and of the order of filing the record on appeal within the
reglementary period, or time given by the court.

The office of the Solicitor General gave the Provincial Fiscal of Bulacan the power to
handle the case for (them) and the office of the Provincial Fiscal was furnished with
all pleadings, orders and other papers of the case. The record therefore of the Office
of the Provincial Fiscal can easily be available to them. Besides no less than five (5)
extensions of time had been requested and the last one was not acted upon by the
Court and yet the Office of the Solicitor General filed the Record on Appeal only on
June 17, 1979 should be June 7, 1979), which is far beyond the reglementary period
which was May 17, 1979 (should be May 18, 1979).

xxx xxx xxx

(pp. 123-125, C.A. rec.).

On August 15, 1980, respondent Court of Appeals issued a resolution denying the motion for
reconsideration, thus:

Acting on the Motion for Reconsideration dated June 23, 1980 filed by the Solicitor
General and the opposition thereto filed on July 8, 1980 by the respondents and
considering that the said motion does not cite new matters which have not been
considered in the decision promulgated on April 29, 1980, the said motion is hereby
denied.

Petitioner's Motion to Set Case for Oral Argument' dated June 23, 1980 is likewise
DENIED.

Aforesaid resolution was received by the Solicitor General on August 20, 1980.

Hence, this recourse.

Petition was filed on October 24, 1980; two extensions of time of thirty (30) days each having been
previously asked by and granted to petitioner Republic of the Philippines.

On October 29, 1980, WE resolved to require respondents to comment on the petition within ten (10)
days from notice of the resolution and at the same time issued a temporary restraining order
enjoining respondents from executing, enforcing and/or implementing the decision dated April 28,
1980 issued in CA G.R. No. SP-10081, entitled "Republic of the Philippines, Petitioner, versus Hon.
Roque Tamayo, etc., et al., Respondents" of the Court of Appeals, and the Order dated December 8,
1978 issued in Civil Case No. 5257-M, entitled "Republic of the Philippines. Plaintiff, versus Turandot
Aldaba, et al., Defendants" of the Court of First Instance of Bulacan, Branch VI at Malolos, Bulacan,
(pp. 49-51, rec.).

On November 14, 1980, private respondents filed their comment to the petition contending that no
abuse of discretion or act in excess of jurisdiction exists as to require a review by this honorable
Court (pp. 52-64, rec.).

On November 24, 1980, WE resolved to give due course to the petition and to declare the case
submitted for decision (p. 65, rec.).

But on December 22, 1980, private respondent filed a motion, praying for the outright dismissal of
the instant petition on the main ground that the decision of the respondent Court of Appeals sought
to be reviewed has already become final and executors hence, unappealable, because this petition
was filed out of time as the petitioner's motion for reconsideration iii the Court of Appeals was pro
forma (pp. 66-67, rec.).

The main issue to be resolved in this case is whether or not respondent Court of Appeals itself
committed a grave abuse of discretion in not finding that the respondent trial court committed a
grave abuse of discretion in dismissing petitioner's appeal. The questioned orders should be set
aside.

I. It must be underscored that the basic provisions of the Rules of Court basis of the dismissal of the
petitioner's appeal by the Court of First Instance of Bulacan as sustained by the respondent Court of
Appeals are Section 13, Rule 41; Where the notice of appeal, appeal bond or record on appeal are
not filed within the period of time herein provided, the appeal shall be dismissed; and Section 14,
Rule 41; A motion to dismiss an appeal on any of the grounds mentioned in the preceding section
may be filed in the Court of First Instance prior to the transmittal of the record to the appellate court.

The Court of First Instance of Bulacan dismissed herein petitioner's appeal on the bases of the
foregoing provision upon its finding that the record on appeal of petitioner was filed out of time as it
was filed only on June 7, 1979 or twenty (20) days after May 18, 1979, the last day of the appeal
period s extended petitioner fifth extension of time of thirty days from May 18, 1979, not having been
favorably acted upon by the Court of First Instance of Bulacan upon its finding that the same was
also filed late or three days after the last day of the extended appeal period. The implication of the
questioned orders of the Court of First Instance is that since the fifth extension of time was filed out
of time, no action may be taken thereon by it; hence, petitioner Republic had only up to May 18,
1979 within which to file the record on appeal. Consequently, the filing thereof only on June 7, 1979
was too late.

The petitioner, however, herein contends as it did before the Court of First Instance of Bulacan and
before the respondent Court of Appeals, that its fifth extension of time was actually filed on May 18,
1979, not on May 21, 1979 as found out by the Court of First Instance and Court of Appeals and in
support thereof, pointed to the certification of the postmaster of the Central Office of the Bureau of
Posts, dated September 25, 1949 (P. 47, rec.) to the effect that the said motion for extension of time
as contained in registered mail No. 3273 addressed to the Clerk of Court of First Instance of Bulacan
(Malolos) ... was received by this office late Friday afternoon, May 8, 1979. The letter was not
included in the only morning dispatch of May 19, to Bulacan and was dispatched May 21, 1979,
Monday (May 20 being a Sunday) under the Manila-Malolos Bill No. 202 page 1, line 15."

But the Court of First Instance of Bulacan opined that said certification cannot override the prevailing
practice in post offices "that a registered letter when posted is immediately stamped with the date of
its receipt, indicating therein the number of the registry, both on the covering envelope itself and on
the receipt delivered to the person who delivered the letter to the office" of which it took judicial
notice.

WE entertain grave doubts that the aforesaid post office practice is a proper subject of judicial
notice.

Section 1 of Rule 129 on judicial notice provides that "The existence and territorial extent of states,
their forms of government and symbols of nationality, the law of nations, the admiralty and maritime
courts of the world and their seals, the political constitution and history of the Philippines, the official
acts of the legislative, executive, and judicial departments of the Philippines, the laws of nature, the
measure of time, the geographical divisions and political history of the world and all similar matters
which are of public knowledge, or are capable of unquestionable demonstration, or ought to be
known to judges because of their judicial functions, shall be judicially recognized by the court without
the introduction of proof; but the court may receive evidence upon any of the subjects in this section
stated, when it shag find it necessary for its own information, and may resort for its aid to appropriate
books or documents or reference."

Undoubtedly, the post office practice of which the Court of First Instance took judicial notice is not
covered by any of the specific instances cited above. Neither can it be classified under "matters
which are of public knowledge, or are capable of unquestionable demonstration, or ought to be
known to judges because of their judicial functions ... . " For a matter to be taken judicial notice of by
the courts of law, it must be a subject of common and general knowledge. In other words, Judicial
notice of facts is measured by general knowledge of the same facts. A fact is said to be generally
recognized or known when its existence or operation is accepted by the public without qualification
or contention. The test is whether the 'act involved is so notoriously known as to make it proper to
assume its existence without proof. The fact that a belief is not universal, however, is not controlling
for it is very seldom that any belief is accepted by everyone. It is enough that the matters are
familiarly known to the majority of mankind or those persons f with the particular matter in question
(20 Am Jur 49-50; Martin, Rules of Court 37, Second Edition). Furthermore, a matter may be
personally known to the judge and yet tot be a matter of judicial knowledge and vice versa, a matter
may not be actually known to an individual judge, and nevertheless be a proper subject of judicial
cognizance.

The post office practice herein involved is not tested by the aforestated considerations, a proper
matter of judicial notice. Moreover, the certification issued by the very postmaster of the post office
where the letter containing the questioned motion for extension of time was posted, is a very clear
manifestation that the said post office practice is not of unquestionable demonstration. Indeed, the
doctrine of judicial notice rests on the wisdom and discretion of the courts. The power to take judicial
notice is to be exercised by the courts with caution; care must be taken that the requisite notoriety
exists; and every reasonable doubts upon the subject should be promptly resolved in the negative
(31 CJS 522; Martin, Rules of Court 38, Second Edition).

It is therefore manifest from the foregoing that the Court of First Instance of Bulacan committed a
palpable error amounting to a grave abuse of discretion in relying on the alleged post office practice
aforementioned over the uncontroverted certification of the postmaster earlier referred to. That being
so, the dismissal of petitioner's appeal therefore lacks factual basis. It should have acted on
petitioner's fifth motion for extension of time which WE find to have been filed on time.

The records reveal that a favorable action on the aforesaid fifth motion for extension of time is
warranted by the following circumstances: (1) the record on appeal was filed by petitioner even
before the lower court could consider the questioned motion for extension of time; and private
respondents objected to the said motion only after petitioner had filed the record on appeal; (2) the
order of the lower court granting the fourth extension of time did not contain any caveat that no
further extension shall be allowed; (3) the fact that the CFI records of the case were sent to the
Solicitor General only on May 3, 1979 and ostensibly handed to the Solicitor assigned to the case
only on May .16, 1979 or barely two (2) days before the expiration of the extended appeal period;
and (4) pressure of work in the undermanned Office of the Solicitor General who is the counsel of
the National Government and all other governmental agencies and instrumentalities; and (5) and the
unconscionable amount of P450,000.00 for a parcel of 1.5 hectares situated in a barrio of Malolos,
Bulacan, with only a provisional value of P7,200.00 obviously based upon its assessed value
appearing on its tax declaration. No sugar, rice or coconut land of only 15,000 square meters could
command such a fabulous price.

WE therefore rule that the respondent Court of Appeals gravely abused its discretion in affirming the
disputed orders of the Court of First Instance of Bulacan.

II. But even assuming that the motion for extension to file record on appeal dated May 17, 1979 was
filed not on May 18, 1979 but on May 21, 1979 as claimed by private respondents, which is a delay
of only one (1) working day, May 19 and 20 being Saturday and Sunday, respectively, that
circumstance alone would not justify the outright dismissal of the appeal of petitioner Republic of the
Philippines, especially so in the light of the undisputed fact that petitioner had already filed with the
lower court the record on appeal at the time the questioned dismissal order was issued by the lower
court. For, as ruled in one case, "... the delay of four days in filing a notice of appeal and a motion for
an extension of time to file a record on appeal can be excused on the basis of equity and
considering that the record on appeal is now with the respondent judge. ( Ramos vs. Bagasao, et al.,
G.R. No. 51552, February 28, 1980, Second Division; emphasis supplied). Moreover, WE have
already liberalized in a number of cases the jurisprudence on the matter of perfection of appeals. For
one, in De Las Alas vs. Court of Appeals (83 SCRA 200-216 [19781), WE ruled that:

... litigation should, as much as possible, be decided on their merits and not on
technicality, and under the circumstances obtaining in this case, We said in the case
of Gregorio vs. Court of Appeals (L-4351 1, July 23, 1976, 72 SCRA 120, 126), thus:

... Dismissal of appeals purely on technical grounds is frowned upon

where the policy of the courts is to encourage hearing of appeals on
their merits. The rules of procedure ought not to be applied in a very
rigid, technical sense; rules of procedure are used only to help
secure, not override, substantial justice. If a technical and rigid
enforcement of the rules is made, their aim would be defeated.

xxx xxx xxx

III. Moreover, a special circumstance which is the subject of one of the main issues raised by
petitioner in its appeal warrants US to exercise once more OUR exclusive prerogative to suspend
OUR own rules or to exempt a particular case from its operation as in the recent case of Republic of
the Philippines vs. Court of Appeals, et al. (83 SCRA 459, 478-480 119781), thus: ... The Rules have
been drafted with the primary objective of enhancing fair trials and expediting justice. As a corollary,
if their application and operation tend to subvert and defeat instead of promote and enhance it, their
suspension is justified. In the words of Justice Antonio P. Barredo in his concurring opinion in
Estrada vs. Sto. Domingo, '(T)his Court, through the revered and eminent Mr. Justice Abad Santos,
found occasion in the case of C. Viuda de Ordoverza v. Raymundo, to lay down for recognition in
holding that ' "it is always in the power of the court (Supreme Court) to suspend its own rules or to
except a particular case from its operation whenever the purposes of justice require it . . . . .' "
(Emphasis supplied). As emphasized by the Solicitor General, if the questioned orders are not
annulled and set aside, its enforcement and implementation will result to the prejudice of, and
irreparable injury to, public interest." This is so because the Government would lose its opportunity to
assail the order of the lower court dated December 8, 1978, the dispositive portion of which reads,
as follows:

xxx xxx xxx

The joint report filed by the three-man committee charged with the determination of
the just compensation of the property herein sought to be condemned is hereby
approved, such that the just compensation of the land described in Paragraph 11 of
the Complaint is fixed at Thirty Pesos (P30.00) per square meter.

The defendant may now withdraw from the Philippine National Bank, Malolos
Branch, the sum of P7,200.00 deposited by the Third Regional Equipment Services,
Department of Public Highways under Account No. 35109, said sum to be part of the
total amount of P450,000.00 (15,000 square meters at P30.00 per square meter),
which the Department of Public Highways, Third Regional Equipment Services,
Malolos, Bulacan, shall, and is hereby ordered, to pay to the herein defendants as
just compensation for the subject property.

SO ORDERED (pp. 3-4, Order dated December 8, 1978).

It must be stressed at this stage that the Government would lose no less than
P425,000.00 if the lower court's order of December 8, 1978 is not scrutinized on
appeal. It must be stated that the lower court was without jurisdiction to create a
three-man committee because Sec. 5, Rule 67 of the Revised Rules of Court was
repealed by P.D. 76 which took effect on December 6, 1972, the salient features of
which read, as follows:

The "current and fair market value" shall be understood to mean the
price of which a willing seller would sell and a willing buyer would buy
neither being under abnormal pressure.

For purposes of just compensation in cases of private property

acquired by the government for public use, the basis shall be the
current and fair market value declared by the owner or administrator
or such market value as determined by the assessor, whichever is
lower.

Thus, from December 6, 1972, the effectivity date of PD 76, the just compensation to
be paid for private property acquired by the government for public use is the current
and fair market value declared by the owner or administrator or such market value as
determined by the Assessor whichever is lower. Pursuant to said Decree, the
government's obligation to private respondent would only be P24,376.00. The lower
court thus had no jurisdiction to fix an amount of just compensation higher than
P24,376.00. It follows therefore that the joint report submitted by the three-man
committee created by the lower court could not serve as a legal basis for the
determination of the just compensation of the property sought to be condemned.

xxx xxx xxx

(pp. 19-21, rec.).

IV. With respect to the motion to dismiss filed on December 22, 1980 by private respondents, WE
find no merit therein. The contention of private respondents that the June 23, 1980 motion for
reconsideration of petitioner with the Court of Appeals was pro forma is belied by the results
obtained in this petition before US.

WHEREFORE, PETITION IS HEREBY GRANTED; THE DECISION DATED APRIL 29, 1980 AND
THE RESOLUTION DATED AUGUST 15, 1980 OF THE RESPONDENT COURT OF APPEALS
ARE HEREBY ANNULLED AND SET ASIDE; AND THE RESPONDENT COURT OF FIRST
INSTANCE OF BULACAN IS HEREBY DIRECTED TO APPROVE PETITIONER'S RECORD ON
APPEAL AND TO ELEVATE THE SAME TO THE HONORABLE COURT OF APPEALS. NO COST.

SO ORDERED.

Teehankee (Chairman), Fernandez and Guerrero, JJ., concur.

Melencio-Herrera, J., concur in the result.

Footnotes

* four (4) times only; 5th extension was not acted upon by the Court.

14) SOLID BANK CORPORATION VS MINDANO FERROALLOY CORPORATION

THIRD DIVISION

[G.R. No. 153535. July 28, 2005]

SOLIDBANK CORPORATION, petitioner, vs. MINDANAO

FERROALLOY CORPORATION, Spouses JONG-WON HONG and
SOO-OK KIM HONG,* TERESITA CU, and RICARDO P. GUEVARA
and Spouse,** respondents.

DECISION
PANGANIBAN, J.:

To justify an award for moral and exemplary damages under Articles 19 to 21 of the
Civil Code (on human relations), the claimants must establish the other partys malice or
bad faith by clear and convincing evidence.
 The Case

Before us is a Petition for Review[1] under Rule 45 of the Rules of Court, assailing
the December 21, 2001 Decision[2] and the May 15, 2002 Resolution[3] of the Court of
Appeals (CA) in CA-GR CV No. 67482. The CA disposed as follows:

IN THE LIGHT OF ALL THE FOREGOING, the appeal is DISMISSED. The Decision
appealed from is AFFIRMED.[4]

The assailed Resolution, on the other hand, denied petitioners Motion for
Reconsideration.

The Facts

The CA narrated the antecedents as follows:

The Maria Cristina Chemical Industries (MCCI) and three (3) Korean corporations, namely, the
Ssangyong Corporation, the Pohang Iron and Steel Company and the Dongil Industries
Company, Ltd., decided to forge a joint venture and establish a corporation, under the name of
the Mindanao Ferroalloy Corporation (Corporation for brevity) with principal offices in Iligan
City. Ricardo P. Guevara was the President and Chairman of the Board of Directors of the
Corporation. Jong-Won Hong, the General Manager of Ssangyong Corporation, was the Vice-
President of the Corporation for Finance, Marketing and Administration. So was Teresita R. Cu.
On November 26, 1990, the Board of Directors of the Corporation approved a Resolution
authorizing its President and Chairman of the Board of Directors or Teresita R. Cu, acting
together with Jong-Won Hong, to secure an omnibus line in the aggregate amount
of P30,000,000.00 from the Solidbank x x x.

xxxxxxxxx

In the meantime, the Corporation started its operations sometime in April, 1991. Its indebtedness
ballooned to P200,453,686.69 compared to its assets of only P65,476,000.00. On May 21, 1991,
the Corporation secured an ordinary time loan from the Solidbank in the amount
of P3,200,000.00. Another ordinary time loan was granted by the Bank to the Corporation on
May 28, 1991, in the amount of P1,800,000.00 or in the total amount of P5,000,000.00, due on
July 15 and 26, 1991, respectively.

However, the Corporation and the Bank agreed to consolidate and, at the same time, restructure
the two (2) loan availments, the same payable on September 20, 1991. The Corporation
executed Promissory Note No. 96-91-00865-6 in favor of the Bank evidencing its loan in the
amount of P5,160,000.00, payable on September 20, 1991. Teresita Cu and Jong-Won Hong
affixed their signatures on the note. To secure the payment of the said loan, the Corporation,
through Jong-Won Hong and Teresita Cu, executed a Deed of Assignment in favor of the Bank
covering its rights, title and interest to the following:
The entire proceeds of drafts drawn under Irrevocable Letter of Credit No. M-S-041-2002080
opened with The Mitsubishi Bank Ltd. Tokyo dated June 13, 1991 for the account of Ssangyong
Japan Corporation, 7F. Matsuoka-Tamura-Cho Bldg., 22-10, 5-Chome, Shimbashi, Minato-Ku,
Tokyo, Japan up to the extent of US$197,679.00

The Corporation likewise executed a Quedan, by way of additional security, under which the
Corporation bound and obliged to keep and hold, in trust for the Bank or its Order, Ferrosilicon
for US$197,679.00. Jong-Won Hong and Teresita Cu affixed their signatures thereon for the
Corporation. The Corporation, also, through Jong-Won Hong and Teresita Cu, executed a Trust
Receipt Agreement, by way of additional security for said loan, the Corporation undertaking to
hold in trust, for the Bank, as its property, the following:

1. THE MITSUBISHI BANK LTD., Tokyo L/C No. M-S-041-2002080 for account of
Ssangyong Japan Corporation, Tokyo, Japan for US$197,679.00 Ferrosilicon to
expire September 20, 1991.

2. SEC QUEDAN NO. 91-476 dated June 26, 1991 covering the following:

Ferrosilicon for US$197,679.00

However, shortly after the execution of the said deeds, the Corporation stopped its operations.
The Corporation failed to pay its loan availments from the Bank inclusive of accrued interest. On
February 11, 1992, the Bank sent a letter to the Corporation demanding payment of its loan
availments inclusive of interests due. The Corporation failed to comply with the demand of the
Bank. On November 23, 1992, the Bank sent another letter to the [Corporation] demanding
payment of its account which, by November 23, 1992, had amounted to P7,283,913.33. The
Corporation again failed to comply with the demand of the Bank.

On January 6, 1993, the Bank filed a complaint against the Corporation with the Regional Trial
Court of Makati City, entitled and docketed as Solidbank Corporation vs. Mindanao Ferroalloy
Corporation, Sps. Jong-Won Hong and the Sps. Teresita R. Cu, Civil Case No. 93-038 for Sum
of Money with a plea for the issuance of a writ of preliminary attachment. x x x

xxxxxxxxx

Under its Amended Complaint, the Plaintiff alleged that it impleaded Ricardo Guevara and his
wife as Defendants because, [among others]:

Defendants JONG-WON HONG and TERESITA CU, are the Vice-Presidents of defendant
corporation, and also members of the companys Board of Directors. They are impleaded as joint
and solidary debtors of [petitioner] bank having signed the Promissory Note, Quedan, and Trust
Receipt agreements with [petitioner], in this case.

xxxxxxxxx
[Petitioner] likewise filed a criminal complaint x x x entitled and docketed as Solidbank
Corporation vs. Ricardo Guevara, Teresita R. Cu and Jong Won Hong x x x for Violation of P.D.
115. On April 14, 1993, the investigating Prosecutor issued a Resolution finding no probable
cause for violation of P.D. 115 against the Respondents as the goods covered by the quedan were
nonexistent:

xxxxxxxxx

In their Answer to the complaint [in the civil case], the Spouses Jong-Won Hong and Soo-ok
Kim Hong alleged, inter alia, that [petitioner] had no cause of action against them as:

x x x the clean loan of P5.1 M obtained was a corporate undertaking of defendant

MINFACO executed through its duly authorized representatives, Ms. Teresita R. Cu and Mr.
Jong-Won Hong, both Vice Presidents then of MINFACO. x x x.

xxxxxxxxx

[On their part, respondents] Teresita Cu and Ricardo Guevara alleged that [petitioner] had no
cause of action against them because: (a) Ricardo Guevara did not sign any of the documents in
favor of [petitioner]; (b) Teresita Cu signed the Promissory Note, Deed of Assignment, Trust
Receipt and Quedan in blank and merely as representative and, hence, for and in behalf of the
Defendant Corporation and, hence, was not personally liable to [petitioner].

In the interim, the Corporation filed, on June 20, 1994, a Petition, with the Regional Trial Court
of Iligan City, for Voluntary Insolvency x x x.

xxxxxxxxx

Appended to the Petition was a list of its creditors, including [petitioner], for the amount
of P8,144,916.05. The Court issued an Order, on July 12, 1994, finding the Petition sufficient in
form and substance x x x.

xxxxxxxxx

In view of said development, the Court issued an Order, in Civil Case No. 93-038, suspending
the proceedings as against the Defendant Corporation but ordering the proceedings to proceed as
against the individual defendants x x x.

xxxxxxxxx

On December 10, 1999, the Court rendered a Decision dismissing the complaint for lack of cause
of action of [petitioner] against the Spouses Jong-Won Hong, Teresita Cu and the Spouses
Ricardo Guevara, x x x.

xxxxxxxxx
In dismissing the complaint against the individual [respondents], the Court a quo found and
declared that [petitioner] failed to adduce a morsel of evidence to prove the personal liability of
the said [respondents] for the claims of [petitioner] and that the latter impleaded the
[respondents], in its complaint and amended complaint, solely to put more pressure on the
Defendant Corporation to pay its obligations to [petitioner].

[Petitioner] x x x interposed an appeal, from the Decision of the Court a quo and posed, for x x x
resolution, the issue of whether or not the individual [respondents], are jointly and severally
liable to [petitioner] for the loan availments of the [respondent] Corporation, inclusive of accrued
interests and penalties.

In the meantime, on motion of [petitioner], the Court set aside its Order, dated February 2, 1995,
suspending the proceedings as against the [respondent] Corporation. [Petitioner] filed a Motion
for Summary Judgment against the [respondent] Corporation. On February 28, 2000, the Court
rendered a Summary Judgment against the [respondent] Corporation, the decretal portion of
which reads as follows:

WHEREFORE, premises considered, this Court hereby resolves to give due course to the motion
for summary judgment filed by herein [petitioner]. Consequently, judgment is hereby rendered in
favor of [Petitioner] SOLIDBANK CORPORATION and against [Respondent] MINDANAO
FERROALLOY CORPORATION, ordering the latter to pay the former the amount
of P7,086,686.70, representing the outstanding balance of the subject loan as of 24 September
1994, plus stipulated interest at the rate of 16% per annum to be computed from the aforesaid
date until fully paid together with an amount equivalent to 12% of the total amount due each year
from 24 September 1994 until fully paid. Lastly, said [respondent] is hereby ordered to pay
[petitioner] the amount of P25,000.00 to [petitioner] as reasonable attorneys fees as well as cost
of litigation.[5]

In its appeal, petitioner argued that (1) it had adduced the requisite evidence to
prove the solidary liability of the individual respondents, and (2) it was not liable for their
counterclaims for damages and attorneys fees.

Ruling of the Court of Appeals

Affirming the RTC, the appellate court ruled that the individual respondents were not
solidarily liable with the Mindanao Ferroalloy Corporation, because they had acted
merely as officers of the corporation, which was the real party in interest. Respondent
Guevara was not even a signatory to the Promissory Note, the Trust Receipt
Agreement, the Deed of Assignment or the Quedan; he was merely authorized to
represent Minfaco to negotiate with and secure the loans from the bank. On the other
hand, the CA noted that Respondents Cu and Hong had not signed the above
documents as comakers, but as signatories in their representative capacities as officers
of Minfaco.
 Likewise, the CA held that the individual respondents were not liable to petitioner for
damages, simply because (1) they had not received the proceeds of the irrevocable
Letter of Credit, which was the subject of the Deed of Assignment; and (2) the goods
subject of the Trust Receipt Agreement had been found to be nonexistent. The
appellate court took judicial notice of the practice of banks and financing institutions to
investigate, examine and assess all properties offered by borrowers as collaterals, in
order to determine the feasibility and advisability of granting loans. Before agreeing to
the consolidation of Minfacos loans, it presumed that petitioner had done its homework.
As to the award of damages to the individual respondents, the CA upheld the trial
courts findings that it was clearly unfair on petitioners part to have impleaded the wives
of Guevara and Hong, because the women were not privy to any of the transactions
between petitioner and Minfaco. Under Articles 19, 20 and 2229 of the Civil Code, such
reckless and wanton act of pressuring individual respondents to settle the corporations
obligations is a ground to award moral and exemplary damages, as well as attorneys
fees.
Hence this Petition.[6]

Issues

In its Memorandum, petitioner raises the following issues:

A. Whether or not there is ample evidence on record to support the joint and solidary liability of
individual respondents with Mindanao Ferroalloy Corporation.

B. In the absence of joint and solidary liability[,] will the provision of Article 1208 in relation to
Article 1207 of the New Civil Code providing for joint liability be applicable to the case at bar.

C. May bank practices be the proper subject of judicial notice under Sec. 1 [of] Rule 129 of the
Rules of Court.

D. Whether or not there is evidence to sustain the claim that respondents were impleaded to
apply pressure upon them to pay the obligations in lieu of MINFACO that is declared insolvent.

E. Whether or not there are sufficient bases for the award of various kinds of and substantial
amounts in damages including payment for attorneys fees.

F. Whether or not respondents committed fraud and misrepresentations and acted in bad faith.

G. Whether or not the inclusion of respondents spouses is proper under certain circumstances
and supported by prevailing jurisprudence.[7]

In sum, there are two main questions: (1) whether the individual respondents are
liable, either jointly or solidarily, with the Mindanao Ferroalloy Corporation; and (2)
whether the award of damages to the individual respondents is valid and legal.
 The Courts Ruling

The Petition is partly meritorious.

First Issue:
Liability of Individual Respondents

Petitioner argues that the individual respondents were jointly or solidarily liable with
Minfaco, either because their participation in the loan contract and the loan documents
made them comakers; or because they committed fraud and deception, which justifies
the piercing of the corporate veil.
The first contention hinges on certain factual determinations made by the trial and
the appellate courts. These tribunals found that, although he had not signed any
document in connection with the subject transaction, Respondent Guevara was
authorized to represent Minfaco in negotiating for a P30 million loan from petitioner. As
to Cu and Hong, it was determined, among others, that their signatures on the loan
documents other than the Deed of Assignment were not prefaced with the word by, and
that there were no other signatures to indicate who had signed for and on behalf of
Minfaco, the principal borrower. In the Promissory Note, they signed above the printed
name of the corporation -- on the space provided for Maker/Borrower, not on that
provided for Co-maker.
Petitioner has not shown any exceptional circumstance that sanctions the disregard
of these findings of fact, which are thus deemed final and conclusive upon this Court
and may not be reviewed on appeal.[8]

No Personal Liability
for Corporate Deeds

Basic is the principle that a corporation is vested by law with a personality separate
and distinct from that of each person composing[9] or representing it.[10] Equally
fundamental is the general rule that corporate officers cannot be held personally liable
for the consequences of their acts, for as long as these are for and on behalf of the
corporation, within the scope of their authority and in good faith. [11] The separate
corporate personality is a shield against the personal liability of corporate officers,
whose acts are properly attributed to the corporation.[12]
Tramat Mercantile v. Court of Appeals[13] held thus:

Personal liability of a corporate director, trustee or officer along (although not necessarily) with
the corporation may so validly attach, as a rule, only when
1. He assents (a) to a patently unlawful act of the corporation, or (b) for bad faith or gross
negligence in directing its affairs, or (c) for conflict of interest, resulting in damages to the
corporation, its stockholders or other persons;

2. He consents to the issuance of watered stocks or who, having knowledge thereof, does not
forthwith file with the corporate secretary his written objection thereto;

3. He agrees to hold himself personally and solidarily liable with the corporation; or

4. He is made, by a specific provision of law, to personally answer for his corporate action.

Consistent with the foregoing principles, we sustain the CAs ruling that Respondent
Guevara was not personally liable for the contracts. First, it is beyond cavil that he was
duly authorized to act on behalf of the corporation; and that in negotiating the loans with
petitioner, he did so in his official capacity. Second, no sufficient and specific evidence
was presented to show that he had acted in bad faith or gross negligence in that
negotiation. Third, he did not hold himself personally and solidarily liable with the
corporation. Neither is there any specific provision of law making him personally
answerable for the subject corporate acts.
On the other hand, Respondents Cu and Hong signed the Promissory Note without
the word by preceding their signatures, atop the designation Maker/Borrower and the
printed name of the corporation, as follows:

__(Sgd) Cu/Hong__
(Maker/Borrower)
MINDANAO FERROALLOY

While their signatures appear without qualification, the inference that they signed in
their individual capacities is negated by the following facts: 1) the name and the address
of the corporation appeared on the space provided for Maker/Borrower; 2) Respondents
Cu and Hong had only one set of signatures on the instrument, when there should have
been two, if indeed they had intended to be bound solidarily -- the first as
representatives of the corporation, and the second as themselves in their individual
capacities; 3) they did not sign under the spaces provided for Co-maker, and neither
were their addresses reflected there; and 4) at the back of the Promissory Note, they
signed above the words Authorized Representative.

Solidary Liability
Not Lightly Inferred

Moreover, it is axiomatic that solidary liability cannot be lightly inferred.[14] Under

Article 1207 of the Civil Code, there is a solidary liability only when the obligation
expressly so states, or when the law or the nature of the obligation requires solidarity.
Since solidary liability is not clearly expressed in the Promissory Note and is not
required by law or the nature of the obligation in this case, no conclusion of solidary
liability can be made.
Furthermore, nothing supports the alleged joint liability of the individual petitioners
because, as correctly pointed out by the two lower courts, the evidence shows that
there is only one debtor: the corporation. In a joint obligation, there must be at least two
debtors, each of whom is liable only for a proportionate part of the debt; and the creditor
is entitled only to a proportionate part of the credit.[15]
Moreover, it is rather late in the day to raise the alleged joint liability, as this matter
has not been pleaded before the trial and the appellate courts. Before the lower courts,
petitioner anchored its claim solely on the alleged joint and several (or solidary) liability
of the individual respondents. Petitioner must be reminded that an issue cannot be
raised for the first time on appeal, but seasonably in the proceedings before the trial
court.[16]
So too, the Promissory Note in question is a negotiable instrument. Under Section
19 of the Negotiable Instruments Law, agents or representatives may sign for the
principal. Their authority may be established, as in other cases of agency. Section 20 of
the law provides that a person signing for and on behalf of a [disclosed] principal or in a
representative capacity x x x is not liable on the instrument if he was duly authorized.
The authority of Respondents Cu and Hong to sign for and on behalf of the
corporation has been amply established by the Resolution of Minfacos Board of
Directors, stating that Atty. Ricardo P. Guevara (President and Chairman), or Ms.
Teresita R. Cu (Vice President), acting together with Mr. Jong Won Hong (Vice
President), be as they are hereby authorized for and in behalf of the Corporation to: 1.
Negotiate with and obtain from (petitioner) the extension of an omnibus line in the
aggregate of P30 million x x x; and 2. Execute and deliver all documentation necessary
to implement all of the foregoing.[17]
Further, the agreement involved here is a contract of adhesion, which was prepared
entirely by one party and offered to the other on a take it or leave it basis. Following the
general rule, the contract must be read against petitioner, because it was the party that
prepared it,[18] more so because a bank is held to high standards of care in the conduct
of its business.[19]
In the totality of the circumstances, we hold that Respondents Cu and Hong clearly
signed the Note merely as representatives of Minfaco.

No Reason to Pierce
the Corporate Veil

Under certain circumstances, courts may treat a corporation as a mere

aggroupment of persons, to whom liability will directly attach. The distinct and separate
corporate personality may be disregarded, inter alia, when the corporate identity is used
to defeat public convenience, justify a wrong, protect a fraud, or defend a crime.
Likewise, the corporate veil may be pierced when the corporation acts as a mere alter
ego or business conduit of a person, or when it is so organized and controlled and its
affairs so conducted as to make it merely an instrumentality, agency, conduit or adjunct
of another corporation.[20] But to disregard the separate juridical personality of a
corporation, the wrongdoing must be clearly and convincingly established; it cannot be
presumed.[21]
Petitioner contends that the corporation was used to protect the fraud foisted upon it
by the individual respondents. It argues that the CA failed to consider the following
badges of fraud and evident bad faith: 1) the individual respondents misrepresented the
corporation as solvent and financially capable of paying its loan; 2) they knew that
prices of ferrosilicon were declining in the world market when they secured the loan in
June 1991; 3) not a single centavo was paid for the loan; and 4) the corporation
suspended its operations shortly after the loan was granted.[22]
Fraud refers to all kinds of deception -- whether through insidious machination,
manipulation, concealment or misrepresentation -- that would lead an ordinarily prudent
person into error after taking the circumstances into account. [23] In contracts, a fraud
known as dolo causante or causal fraud[24] is basically a deception used by one party
prior to or simultaneous with the contract, in order to secure the consent of the
other.[25] Needless to say, the deceit employed must be serious. In contradistinction,
only some particular or accident of the obligation is referred to by incidental fraud
or dolo incidente,[26] or that which is not serious in character and without which the other
party would have entered into the contract anyway.[27]
Fraud must be established by clear and convincing evidence; mere preponderance
of evidence is not adequate.[28] Bad faith, on the other hand, imports a dishonest
purpose or some moral obliquity and conscious doing of a wrong, not simply bad
judgment or negligence.[29] It is synonymous with fraud, in that it involves a design to
mislead or deceive another.[30]
Unfortunately, petitioner was unable to establish clearly and precisely how the
alleged fraud was committed. It failed to establish that it was deceived into granting the
loans because of respondents misrepresentations and/or insidious actions. Quite the
contrary, circumstances indicate the weakness of its submission.
First, petitioner does not deny that the P5 million loan represented the consolidation
of two loans,[31] granted long before the bank required the individual respondents to
execute the Promissory Note, Trust Receipt Agreement, Quedan or Deed of
Assignment. Hence, no words, acts or machinations arising from any of those
instruments could have been used by them prior to or simultaneous with the execution
of the contract, or even as some accident or particular of the obligation.
Second, petitioner bank was in a position to verify for itself the solvency and
trustworthiness of respondent corporation. In fact, ordinary business prudence required
it to do so before granting the multimillion loans. It is of common knowledge that, as a
matter of practice, banks conduct exhaustive investigations of the financial standing of
an applicant debtor, as well as appraisals of collaterals offered as securities for loans to
ensure their prompt and satisfactory payment. To uphold petitioners cry of fraud when it
failed to verify the existence of the goods covered by the Trust Receipt Agreement and
the Quedan is to condone its negligence.

Judicial Notice
of Bank Practices

This point brings us to the alleged error of the appellate court in taking judicial
notice of the practice of banks in conducting background checks on borrowers and
sureties. While a court is not mandated to take judicial notice of this practice under
Section 1 of Rule 129 of the Rules of Court, it nevertheless may do so under Section 2
of the same Rule. The latter Rule provides that a court, in its discretion, may take
judicial notice of matters which are of public knowledge, or ought to be known to judges
because of their judicial functions.
Thus, the Court has taken judicial notice of the practices of banks and other
financial institutions. Precisely, it has noted that it is their uniform practice, before
approving a loan, to investigate, examine and assess would-be borrowers credit
standing or real estate[32] offered as security for the loan applied for.

Second Issue:
Award of Damages

The individual respondents were awarded moral and exemplary damages as well as
attorneys fees under Articles 19 to 21 of the Civil Code, on the basic premise that the
suit was clearly malicious and intended merely to harass.
Article 19 of the Civil Code expresses the fundamental principle of law on human
conduct that a person must, in the exercise of his rights and in the performance of his
duties, act with justice, give every one his due, and observe honesty and good faith.
Under this basic postulate, the exercise of a right, though legal by itself, must
nonetheless be done in accordance with the proper norm. When the right is exercised
arbitrarily, unjustly or excessivelyand results in damage to another, a legal wrong is
committed for which the wrongdoer must be held responsible.[33]
To be liable under the abuse-of-rights principle, three elements must concur: a) a
legal right or duty, b) its exercise in bad faith, and c) the sole intent of prejudicing or
injuring another.[34] Needless to say, absence of good faith[35] must be sufficiently
established.
Article 20 makes [e]very person who, contrary to law, willfully or negligently causes
damage to another liable for damages. Upon the other hand, held liable for damages
under Article 21 is one who willfully causes loss or injury to another in a manner that is
contrary to morals, good customs or public policy.
For damages to be properly awarded under the above provisions, it is necessary to
demonstrate by clear and convincing evidence[36] that the action instituted by petitioner
was clearly so unfounded and untenable as to amount to gross and evident bad
faith.[37] To justify an award of damages for malicious prosecution, one must prove two
elements: malice or sinister design to vex or humiliate and want of probable cause.[38]
Petitioner was proven wrong in impleading Spouses Guevara and Hong. Beyond
that fact, however, respondents have not established that the suit was so patently
malicious as to warrant the award of damages under the Civil Codes Articles 19 to 21,
which are grounded on malice or bad faith.[39] With the presumption of law on the side of
good faith, and in the absence of adequate proof of malice, we find that petitioner
impleaded the spouses because it honestly believed that the conjugal partnerships had
benefited from the proceeds of the loan, as stated in their Complaint and subsequent
pleadings. Its act does not amount to evident bad faith or malice; hence, an award for
damages is not proper. The adverse result of an act per se neither makes the act
wrongful nor subjects the actor to the payment of damages, because the law could not
have meant to impose a penalty on the right to litigate.[40]
For the same reason, attorneys fees cannot be granted. Article 2208 of the Civil
Code states that in the absence of a stipulation, attorneys fees cannot be recovered,
except in any of the following circumstances:

(1) When exemplary damages are awarded;

(2) When the defendants act or omission has compelled the plaintiff to litigate with third persons
or to incur expenses to protect his interest;

(3) In criminal cases of malicious prosecution against the plaintiff;

(4) In case of a clearly unfounded civil action or proceeding against the plaintiff;

(5) Where the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiffs
plainly valid, just and demandable claim;

(6) In actions for legal support;

(7) In actions for the recovery of wages of household helpers, laborers and skilled workers;

(8) In actions for indemnity under workmens compensation and employers liability laws;

(9) In a separate civil action to recover civil liability arising from a crime;

(10) When at least double judicial costs are awarded;

(11) In any other case where the court deems it just and equitable that attorneys fees and
expenses of litigation should be recovered.

In the instant case, none of the enumerated grounds for recovery of attorneys fees
are present.
 WHEREFORE, this Petition is PARTIALLY GRANTED. The assailed Decision
is AFFIRMED, but the award of moral and exemplary damages as well as attorneys
fees is DELETED. No costs.
SO ORDERED.
Sandoval-Gutierrez, Corona, Carpio-Morales, and Garcia, JJ., concur.

15) LA BUGAL B’LAAN TRIBAL ASSOC VS RAMOS

LA BUGAL B’LAAN TRIBAL ASSOCIATION INC vs RAMOS Case Digest

LA BUGAL B’LAAN TRIBAL ASSOCIATION INC., et. al. v. VICTOR O. RAMOS, Secretary
Department of Environment and Natural Resources; HORACIO RAMOS, Director, Mines and
Geosciences Bureau (MGB-DENR); RUBEN TORRES, Executive Secretary; and WMC
(PHILIPPINES) INC.

G.R. No. 127882, 27 January 2004, En Banc (Carpio-Morales, J.)

The constitutional provision allowing the President to enter into FTAA is a exception to the
rule that participation in the nation’s natural resources is reserved exclusively to Filipinos.
Provision must be construed strictly against their enjoyment by non-Filipinos.

FACTS: RA 7942 (The Philippine Mining Act) took effect on April 9, 1995. Before the effectivity of
RA 7942, or on March 30, 1995, the President signed a Financial and Technical Assistance
Agreement (FTAA) with WMCP, a corporation organized under Philippine laws, covering close to
100,000 hectares of land in South Cotabato, Sultan Kudarat, Davao del Sur and North Cotabato. On
August 15, 1995, the Environment Secretary Victor Ramos issued DENR Administrative Order 95-
23, which was later repealed by DENR Administrative Order 96-40, adopted on December 20, 1996.

Petitioners prayed that RA 7942, its implementing rules, and the FTAA between the government and
WMCP be declared unconstitutional on ground that they allow fully foreign owned corporations like
WMCP to exploit, explore and develop Philippine mineral resources in contravention of Article XII
Section 2 paragraphs 2 and 4 of the Charter.

In January 2001, WMC - a publicly listed Australian mining and exploration company - sold its whole
stake in WMCP to Sagittarius Mines, 60% of which is owned by Filipinos while 40% of which is
owned by Indophil Resources, an Australian company. DENR approved the transfer and registration
of the FTAA in Sagittarius‘ name but Lepanto Consolidated assailed the same. The latter case is still
pending before the Court of Appeals.

EO 279, issued by former President Aquino on July 25, 1987, authorizes the DENR to accept,
consider and evaluate proposals from foreign owned corporations or foreign investors for contracts
or agreements involving wither technical or financial assistance for large scale exploration,
development and utilization of minerals which upon appropriate recommendation of the (DENR)
Secretary, the President may execute with the foreign proponent. WMCP likewise contended that
the annulment of the FTAA would violate a treaty between the Philippines and Australia which
provides for the protection of Australian investments.

ISSUES:

1. Whether or not the Philippine Mining Act is unconstitutional for allowing fully foreign-
owned corporations to exploit the Philippine mineral resources.
2. Whether or not the FTAA between the government and WMCP is a ―service
contract‖ that permits fully foreign owned companies to exploit the Philippine mineral
resources.
HELD:

First Issue: RA 7942 is NOT constitutional

RA 7942 or the Philippine Mining Act of 1995 is unconstitutional for permitting fully foreign owned
corporations to exploit the Philippine natural resources.

Article XII Section 2 of the 1987 Constitution retained the Regalian Doctrine which states that ―All
lands of the public domain, waters, minerals, coal, petroleum, and other minerals, coal, petroleum,
and other mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and
fauna, and other natural resources are owned by the State.‖ The same section also states that,
―the exploration and development and utilization of natural resources shall be under the full control
and supervision of the State.

Conspicuously absent in Section 2 is the provision in the 1935 and 1973 Constitution authorizing the
State to grant licenses, concessions, or leases for the exploration, exploitation, development, or
utilization of natural resources. By such omission, the utilization of inalienable lands of the public
domain through license, concession or lease is no longer allowed under the 1987 Constitution.
Under the concession system, the concessionaire makes a direct equity investment for the purpose
of exploiting a particular natural resource within a given area. The concession amounts to complete
control by the concessionaire over the country‘s natural resource, for it is given exclusive and
plenary rights to exploit a particular resource at the point of extraction.

The 1987 Constitution, moreover, has deleted the phrase ―management or other forms of
assistance‖ in the 1973 Charter. The present Constitution now allows only ―technical and financial
assistance.‖ The management and the operation of the mining activities by foreign contractors, the
primary feature of the service contracts was precisely the evil the drafters of the 1987 Constitution
sought to avoid.

The constitutional provision allowing the President to enter into FTAAs is an exception to the rule
that participation in the nation‘s natural resources is reserved exclusively to Filipinos. Accordingly,
such provision must be construed strictly against their enjoyment by non-Filipinos. Therefore, RA
7942 is invalid insofar as the said act authorizes service contracts. Although the statute employs the
phrase ―financial and technical agreements‖ in accordance with the 1987 Constitution, its pertinent
provisions actually treat these agreements as service contracts that grant beneficial ownership to
foreign contractors contrary to the fundamental law.

The underlying assumption in the provisions of the law is that the foreign contractor manages the
mineral resources just like the foreign contractor in a service contract. By allowing foreign
contractors to manage or operate all the aspects of the mining operation, RA 7942 has, in effect,
conveyed beneficial ownership over the nation‘s mineral resources to these contractors, leaving the
State with nothing but bare title thereto.

The same provisions, whether by design or inadvertence, permit a circumvention of the

constitutionally ordained 60-40% capitalization requirement for corporations or associations engaged
in the exploitation, development and utilization of Philippine natural resources.

When parts of a statute are so mutually dependent and connected as conditions, considerations,
inducements or compensations for each other as to warrant a belief that the legislature intended
them as a whole, then if some parts are unconstitutional, all provisions that are thus dependent,
conditional or connected, must fail with them.

Under Article XII Section 2 of the 1987 Charter, foreign owned corporations are limited only to
merely technical or financial assistance to the State for large scale exploration, development and
utilization of minerals, petroleum and other mineral oils.
Second Issue: RP Government-WMCP FTAA is a Service Contract

The FTAA between he WMCP and the Philippine government is likewise unconstitutional since the
agreement itself is a service contract.

Section 1.3 of the FTAA grants WMCP a fully foreign owned corporation, the exclusive right to
explore, exploit, utilize and dispose of all minerals and by-products that may be produced from the
contract area.‖ Section 1.2 of the same agreement provides that EMCP shall provide all financing,
technology, management, and personnel necessary for the Mining Operations.

These contractual stipulations and related provisions in the FTAA taken together, grant WMCP
beneficial ownership over natural resources that properly belong to the State and are intended for
the benefit of its citizens. These stipulations are abhorrent to the 1987 Constitution. They are
precisely the vices that the fundamental law seeks to avoid, the evils that it aims to suppress.
Consequently, the contract from which they spring must be struck down.

Section 3. JUDICIAL NOTICE

Landbank of the Philippines vs Banal

[G.R. No. 143276. July 20, 2004]
LANDBANK OF THE PHILIPPINES, petitioner,
SPOUSES VICENTE BANAL and LEONIDAS ARENAS-BANAL, respondents.
FACTS: Spouses Vicente and Leonidas Banal, respondents, are the registered owners of
agricultural land situated in San Felipe, Basud, Camarines Norte. A portion of the land was
compulsorily acquired by the Department of Agrarian Reform (DAR) pursuant to Republic Act (R.A.)
No. 6657,[1] as amended, otherwise known as the Comprehensive Agrarian Reform Law of 1988.
Respondents rejected the valuation of petitioner hence a summary administrative proceeding was
conducted before the Provincial Agrarian Reform Adjudicator (PARAD) to determine the valuation of
the land. Eventually, the PARAD rendered its Decision affirming the Landbank’s valuation.
Dissatisfied with the Decision of the PARAD, respondents filed with the RTC a petition for
determination of just compensation.

In determining the valuation of the land, the trial court based the same on the facts established in
another case pending before it.

ISSUE: W/N the trial court erred in taking judicial notice of the average production figures in another
case pending before it and applying the same to the present case without conducting a hearing and
without the knowledge or consent of the parties
HELD: Well-settled is the rule that courts are not authorized to take judicial notice of the contents of
the records of other cases even when said cases have been tried or are pending in the same court
or before the same judge. They may only do so “in the absence of objection” and “with the
knowledge of the opposing party,” which are not obtaining here.
Furthermore, as earlier stated, the Rules of Court shall apply to all proceedings before the Special
Agrarian Courts. In this regard, Section 3, Rule 129 of the Revised Rules on Evidence is explicit on
the necessity of a hearing before a court takes judicial notice of a certain matter, thus:

“SEC. 3. Judicial notice, when hearing necessary. – During the trial, the court, on its own initiative,
or on request of a party, may announce its intention to take judicial notice of any matter and
allow the parties to be heard thereon.
“After the trial, and before judgment or on appeal, the proper court, on its own initiative or on request
of a party, may take judicial notice of any matter and allow the parties to be heard thereon if such
matter is decisive of a material issue in the case.” (emphasis added)
The RTC failed to observe the above provisions.

THIRD DIVISION

[G.R. No. 143276. July 20, 2004]

LANDBANK OF THE PHILIPPINES, petitioner, vs. SPOUSES VICENTE

BANAL and LEONIDAS ARENAS-BANAL, respondents.
 DECISION
SANDOVAL-GUTIERREZ, J.:

Spouses Vicente and Leonidas Banal, respondents, are the registered

owners of 19.3422 hectares of agricultural land situated in San Felipe, Basud,
Camarines Norte covered by Transfer Certificate of Title No. T-6296. A portion
of the land consisting of 6.2330 hectares (5.4730 of which is planted to
coconut and 0.7600 planted to palay) was compulsorily acquired by the
Department of Agrarian Reform (DAR) pursuant to Republic Act (R.A.) No.
6657, as amended, otherwise known as the Comprehensive Agrarian Reform
[1]

Law of 1988.
In accordance with the formula prescribed in DAR Administrative Order
No. 6, Series of 1992, as amended by DAR Administrative Order No. 11,
[2]

Series of 1994, the Land Bank of the Philippines (Landbank), petitioner,

[3] [4]

made the following valuation of the property:

Acquired property Area in hectares Value

Coconut land 5.4730 P148,675.19
Riceland 0.7600 25,243.36
==========
P173,918.55

Respondents rejected the above valuation. Thus, pursuant to Section

16(d) of R.A. 6657, as amended, a summary administrative proceeding was
conducted before the Provincial Agrarian Reform Adjudicator (PARAD) to
determine the valuation of the land. Eventually, the PARAD rendered its
Decision affirming the Landbanks valuation.
Dissatisfied with the Decision of the PARAD, respondents filed with the
Regional Trial Court (RTC), Branch 40, Daet, Camarines Norte, designated as
a Special Agrarian Court, a petition for determination of just compensation,
docketed as Civil Case No. 6806. Impleaded as respondents were the DAR
and the Landbank. Petitioners therein prayed for a compensation
of P100,000.00 per hectare for both coconut land and riceland, or an
aggregate amount of P623,000.00.
During the pre-trial on September 23, 1998, the parties submitted to the
RTC the following admissions of facts: (1) the subject property is governed by
the provisions of R.A. 6657, as amended; (2) it was distributed to the farmers-
beneficiaries; and (3) the Landbank deposited the provisional compensation
based on the valuation made by the DAR. [5]
 On the same day after the pre-trial, the court issued an Order dispensing
with the hearing and directing the parties to submit their respective
memoranda. [6]

In its Decision dated February 5, 1999, the trial court computed the just
compensation for the coconut land at P657,137.00 and for the riceland
at P46,000.00, or a total of P703,137.00, which is beyond respondents
valuation of P623,000.00. The court further awarded compounded interest
at P79,732.00 in cash. The dispositive portion of the Decision reads:

WHEREFORE, judgment is hereby rendered as follows:

1. Ordering respondent Landbank to pay the petitioners, the spouses Dr.

Vicente Banal and Leonidas Arenas-Banal, for the 5.4730 hectares of
coconut land the sum of SIX HUNDRED FIFTY-SEVEN THOUSAND
ONE HUNDRED THIRTY-SEVEN PESOS (P657,137.00) in cash and
in bonds in the proportion provided by law;

2. Ordering respondent Landbank to pay the petitioners for the .7600 hectares
of riceland the sum of FORTY-SIX THOUSAND PESOS
(P46,000.00) in cash and in bonds in the proportion provided by law; and

3. Ordering respondent Landbank to pay the petitioners the sum of SEVENTY-

NINE THOUSAND SEVEN HUNDRED THIRTY-TWO PESOS
(P79,732.00) as the compounded interest in cash.

IT IS SO ORDERED. [7]

In determining the valuation of the land, the trial court based the same on
the facts established in another case pending before it (Civil Case No. 6679,
Luz Rodriguez vs. DAR, et al.), using the following formula:

For the coconut land

1. Average Gross Production (AGP) x .70 x 9.70 (price per kilo of coconut) =
Net Income (NI)

2. NI / 6% = Price Per Hectare (PPH) (applying the capitalization formula

under Republic Act No. 3844 ) [8]

For the riceland

 1. 2.5 x AGP x Government Support Price (GSP) = Land Value (LV) or PPH
(using the formula under Executive Order No. 228 )
[9]

2. AGP x 6% compounded annually for 26 years x GSP = Interest (pursuant to

DAR AO No. 13, Series of 1994)

Forthwith, the Landbank filed with the Court of Appeals a petition for
review, docketed as CA-G.R. SP No. 52163.
On March 20, 2000, the Appellate Court rendered a Decision affirming in
[10]

toto the judgment of the trial court. The Landbanks motion for reconsideration
was likewise denied. [11]

Hence, this petition for review on certiorari.

The fundamental issue for our resolution is whether the Court of Appeals
erred in sustaining the trial courts valuation of the land. As earlier mentioned,
there was no trial on the merits.
To begin with, under Section 1 of Executive Order No. 405 (1990), the
Landbank is charged primarily with the determination of the land valuation and
compensation for all private lands suitable for agriculture under the Voluntary
Offer to Sell or Compulsory Acquisition arrangement For its part, the DAR
relies on the determination of the land valuation and compensation by the
Landbank. [12]

Based on the Landbanks valuation of the land, the DAR makes an offer to
the landowner. If the landowner accepts the offer, the Landbank shall pay
[13]

him the purchase price of the land after he executes and delivers a deed of
transfer and surrenders the certificate of title in favor of the government. In [14]

case the landowner rejects the offer or fails to reply thereto, the DAR
adjudicator conducts summary administrative proceedings to determine the
[15]

compensation for the land by requiring the landowner, the Landbank and
other interested parties to submit evidence as to the just compensation for the
land. These functions by the DAR are in accordance with its quasi-judicial
[16]

powers under Section 50 of R.A. 6657, as amended, which provides:

SEC. 50. Quasi-Judicial Powers of the DAR. The DAR is hereby vested with primary
jurisdiction to determine and adjudicate agrarian reform matters and shall have
exclusive original jurisdiction over all matters involving the implementation of
agrarian reform, except those falling under the exclusive jurisdiction of the
Department of Agriculture (DA) and the Department of Environment and Natural
Resources (DENR).
x x x.

A party who disagrees with the decision of the DAR adjudicator may bring
the matter to the RTC designated as a Special Agrarian Court for final [17]

determination of just compensation. [18]

In the proceedings before the RTC, it is mandated to apply the Rules of

Court and, on its own initiative or at the instance of any of the parties,
[19]

appoint one or more commissioners to examine, investigate and ascertain

facts relevant to the dispute, including the valuation of properties, and to file a
written report thereof x x x. In determining just compensation, the RTC is
[20]

required to consider several factors enumerated in Section 17 of R.A. 6657,

as amended, thus:

Sec. 17. Determination of Just Compensation. In determining just compensation, the

cost of acquisition of the land, the current value of like properties, its nature, actual
use and income, the sworn valuation by the owner, the tax declarations, and the
assessment made by government assessors shall be considered. The social and
economic benefits contributed by the farmers and the farmworkers and by the
Government to the property, as well as the non-payment of taxes or loans secured
from any government financing institution on the said land, shall be considered as
additional factors to determine its valuation.

These factors have been translated into a basic formula in DAR

Administrative Order No. 6, Series of 1992, as amended by DAR
Administrative Order No. 11, Series of 1994, issued pursuant to the DARs
rule-making power to carry out the object and purposes of R.A. 6657, as
amended. [21]

The formula stated in DAR Administrative Order No. 6, as amended, is as

follows:

LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)

LV = Land Value
CNI = Capitalized Net Income
CS = Comparable Sales
MV = Market Value per Tax Declaration

The above formula shall be used if all the three factors are present, relevant and
applicable.
A.1 When the CS factor is not present and CNI and MV are applicable, the formula
shall be:
LV = (CNI x 0.9) + (MV x 0.1)

A.2 When the CNI factor is not present, and CS and MV are applicable, the formula
shall be:
LV = (CS x 0.9) + (MV x 0.1)

A.3 When both the CS and CNI are not present and only MV is applicable, the
formula shall be:
LV = MV x 2

Here, the RTC failed to observe the basic rules of procedure and the
fundamental requirements in determining just compensation for the
property. Firstly, it dispensed with the hearing and merely ordered the parties
to submit their respective memoranda. Such action is grossly erroneous since
the determination of just compensation involves the examination of the
following factors specified in Section 17 of R.A. 6657, as amended:

1. the cost of the acquisition of the land;

2. the current value of like properties;

3. its nature, actual use and income;

4. the sworn valuation by the owner; the tax declarations;

5. the assessment made by government assessors;

6. the social and economic benefits contributed by the farmers and the
farmworkers and by the government to the property; and

7. the non-payment of taxes or loans secured from any government financing

institution on the said land, if any.

Obviously, these factors involve factual matters which can be established

only during a hearing wherein the contending parties present their respective
evidence. In fact, to underscore the intricate nature of determining the
valuation of the land, Section 58 of the same law even authorizes the Special
Agrarian Courts to appoint commissioners for such purpose.
Secondly, the RTC, in concluding that the valuation of respondents
property is P703,137.00, merely took judicial notice of the average production
figures in the Rodriguez case pending before it and applied the same to
this case without conducting a hearing and worse, without the knowledge or
consent of the parties, thus:

x x x. In the case x x x of the coconut portion of the land 5.4730 hectares, defendants
determined the average gross production per year at 506.95 kilos only, but in the
very recent case of Luz Rodriguez vs. DAR, et al., filed and decided by this court
in Civil Case No. 6679 also for just compensation for coconut lands and Riceland
situated at Basud, Camarines Norte wherein also the lands in the above-entitled case
are situated, the value fixed therein was 1,061.52 kilos per annum per hectare for
coconut land and the price per kilo is P8.82, but in the instant case the price per
kilo is P9.70. In the present case, we consider 506.95 kilos average gross production
per year per hectare to be very low considering that farm practice for coconut lands is
harvest every forty-five days. We cannot also comprehended why in
the Rodriguez case and in this case there is a great variance in average production per
year when in the two cases the lands are both coconut lands and in the same place of
Basud, Camarines Norte. We believe that it is more fair to adapt the 1,061.52 kilos per
hectare per year as average gross production. In the Rodriguez case, the defendants
fixed the average gross production of palay at 3,000 kilos or 60 cavans per year. The
court is also constrained to apply this yearly palay production in
the Rodriguez case to the case at bar.

xxxxxxxxx

As shown in the Memorandum of Landbank in this case, the area of the coconut land
taken under CARP is 5.4730 hectares. But as already noted, the average gross
production a year of 506.96 kilos per hectare fixed by Landbank is too low as
compared to the Rodriguez case which was 1,061 kilos when the coconut land in
both cases are in the same town of Basud, Camarines Norte, compelling this
court then to adapt 1,061 kilos as the average gross production a year of the
coconut land in this case. We have to apply also the price of P9.70 per kilo as this is
the value that Landbank fixed for this case.

The net income of the coconut land is equal to 70% of the gross income. So, the net
income of the coconut land is 1,061 x .70 x 9.70 equals P7,204.19 per
hectare. Applying the capitalization formula of R.A. 3844 to the net income
of P7,204.19 divided by 6%, the legal rate of interest, equals P120,069.00 per
hectare. Therefore, the just compensation for the 5.4730 hectares is P657,137.00.

The Riceland taken under Presidential Decree No. 27 as of October 21, 1972 has an
area of .7600 hectare. If in the Rodriguez case the Landbank fixed the average gross
production of 3000 kilos or 60 cavans of palay per year, then the .7600 hectare in this
case would be 46 cavans. The value of the riceland therefore in this case is 46 cavans
x 2.5 x P400.00 equals P46,000.00. [22]

PARC Resolution 94-24-1 of 25 October 1994, implemented by DAR AO 13, granted

interest on the compensation at 6% compounded annually. The compounded interest
on the 46 cavans for 26 years is 199.33 cavans. At P400.00 per cavan, the value of the
compounded interest is P79,732.00. (emphasis added)
[23]

Well-settled is the rule that courts are not authorized to take judicial notice
of the contents of the records of other cases even when said cases have been
tried or are pending in the same court or before the same judge. They may [24]

only do so in the absence of objection and with the knowledge of the opposing
party, which are not obtaining here.
[25]

Furthermore, as earlier stated, the Rules of Court shall apply to all

proceedings before the Special Agrarian Courts. In this regard, Section 3,
Rule 129 of the Revised Rules on Evidence is explicit on the necessity of a
hearing before a court takes judicial notice of a certain matter, thus:

SEC. 3. Judicial notice, when hearing necessary. During the trial, the court, on its
own initiative, or on request of a party, may announce its intention to take judicial
notice of any matter and allow the parties to be heard thereon.

After the trial, and before judgment or on appeal, the proper court, on its own
initiative or on request of a party, may take judicial notice of any matter and allow
the parties to be heard thereon if such matter is decisive of a material issue in the
case.(emphasis added)

The RTC failed to observe the above provisions.

Lastly, the RTC erred in applying the formula prescribed under Executive
Order (EO) No. 228 and R.A. No. 3844, as amended, in determining the
[26] [27]

valuation of the property; and in granting compounded interest pursuant to

DAR Administrative Order No. 13, Series of 1994. It must be stressed that
[28]

EO No. 228 covers private agricultural lands primarily devoted to rice and
corn, while R.A. 3844 governs agricultural leasehold relation between the
person who furnishes the landholding, either as owner, civil law lessee,
usufructuary, or legal possessor, and the person who personally cultivates the
same. Here, the land is planted to coconut and rice and does not involve
[29]

agricultural leasehold relation. What the trial court should have applied is the
formula in DAR Administrative Order No. 6, as amended by DAR
Administrative Order No. 11 discussed earlier.
 As regards the award of compounded interest, suffice it to state that DAR
Administrative Order No. 13, Series of 1994 does not apply to the subject land
but to those lands taken under Presidential Decree No. 27 and Executive
[30]

Order No. 228 whose owners have not been compensated. In this case, the
property is covered by R.A. 6657, as amended, and respondents have been
paid the provisional compensation thereof, as stipulated during the pre-trial.
While the determination of just compensation involves the exercise of
judicial discretion, however, such discretion must be discharged within the
bounds of the law. Here, the RTC wantonly disregarded R.A. 6657, as
amended, and its implementing rules and regulations. (DAR Administrative
Order No. 6, as amended by DAR Administrative Order No.11).
In sum, we find that the Court of Appeals and the RTC erred in
determining the valuation of the subject land. Thus, we deem it proper to
remand this case to the RTC for trial on the merits wherein the parties may
present their respective evidence. In determining the valuation of the subject
property, the trial court shall consider the factors provided under Section 17 of
R.A. 6657, as amended, mentioned earlier. The formula prescribed by the
DAR in Administrative Order No. 6, Series of 1992, as amended by DAR
Administrative Order No. 11, Series of 1994, shall be used in the valuation of
the land. Furthermore, upon its own initiative, or at the instance of any of the
parties, the trial court may appoint one or more commissioners to examine,
investigate and ascertain facts relevant to the dispute.
WHEREFORE, the petition is GRANTED. The assailed Decision of the
Court of Appeals dated March 20, 2000 in CA-G.R. SP No. 52163 is
REVERSED. Civil Case No. 6806 is REMANDED to the RTC, Branch 40,
Daet, Camarines Norte, for trial on the merits with dispatch. The trial judge is
directed to observe strictly the procedures specified above in determining the
proper valuation of the subject property.
SO ORDERED.
Panganiban, (Chairman), and Carpio-Morales, JJ., concu