Offer and Objections The assailed Decision disposed as follows: 2

WHEREFORE, the appealed decision is

hereby MODIFIED by ordering INLAND TRAILWAYS, INC.
G.R. No. 117103 January 21, 1999 to pay [petitioners] P3,977.00 for actual damages,
P30,000.00 as moral damages and ten (10) percent as
Spouses RENATO S. ONG and FRANCIA N. ONG, petitioners, contingent attorney's fees and to pay the costs of the suit.
vs.
COURT OF APPEALS, INLAND RAILWAYS, INC. and PHILTRANCO Reconsideration was denied in the assailed Resolution: 3

SERVICE ENTERPRISE, INC., respondents.

WHEREFORE, IN VIEW OF THE FOREGOING, both
motions for reconsideration filed by [petitioners] and . . .
Inland Trailways, Inc. are hereby DENIED.
PANGANIBAN, J.:
The Facts
Evidence not formally offered during the trial cannot be used for or
against a party litigant. Neither may it be taken into account on appeal. On February 9, 1987, petitioners boarded as paying passengers Bus-
Furthermore, actual and moral damages must be proven before any No. 101 with late No. EVB-508 ("Inland bus," for convenience), which
award thereon can be granted. was owned and operated by Inland Trailways under a Lease
Agreement with Philtranco. It was driven by Calvin Coronel.  Around
4

The Case 3:50 in the morning of said date, when the Inland bus slowed down to
avoid a stalled cargo truck in Tiaong, Quezon, it was bumped from the
Before us is a Petition for Review on Certiorari of the Decision dated rear by another bus, owned and operated by Philtranco and driven by
May 20, 1993 and the Resolution dated June 8, 1994, both Apolinar Miralles. Francia sustained wounds and fractures in both of her
promulgated by the Court of Appeals   in CA-GR CV No. 33755,
1
legs and her right arm, while Renato suffered injuries on his left chest,
modifying the Decision of the trial court in an action for damages filed right knee, right arm and left eye.  They were brought to the San Pablo
5

by spouses Renato and Francia Ong (petitioners herein) against City District Hospital for treatment and were confined there from
Philtranco Service Enterprise, Inc. and Inland Trailways, Inc. February 9 to 18, 1987.  6

(respondents herein, hereafter referred to as "Philtranco" and "Inland,"

respectively). On December 22, 1988, petitioners filed an action for damages against
Philtranco and Inland.   In their Complaint, they alleged that they
7
suffered injuries, preventing Francia from operating a sari-sari store at J — Receipt dated February 18, 1987
Las Piña's, Metro Manila, where she derived a daily income of P200;
and Renato from continuing his work as an overseas contract worker K — Receipt dated February 24, 1987
(pipe welder) with a monthly salary of $690. Stating that they incurred
P10,000 as medical and miscellaneous expenses, they also claimed L & - L-1 — Picture of face of Renato S. Ong
moral damages of P500,000 each, exemplary and corrective damages
of P500,000 each, and compensatory damages of P500,000 each plus M & M-1 — Picture of face of Renato S. Ong
35 percent thereof as attorney's fees. In addition to their testimonies,
petitioners also presented the following documentary evidence: N — Payroll Summary for [period ending]
November 1986
Exhibit A — Philtranco Bus Ticket No. 333398
O — Payroll Summary for [period ending]
B — Philtranco Bus Ticket No. 333399 December, 1986

C — Certification dated February 12, 1987 Philtranco answered that the Inland bus with Plate No. EVB-508 (which
had transported petitioners) was registered and owned by Inland; that
D — Medical Certificate of Francis Ong dated its driver, Calvin Coronel, was an employee of Inland; that Philtranco
February 18, 1987 was merely leasing its support facilities, including the use of its bus
tickets, to Inland; and that under their Agreement, Inland would be
E — Medical Certificate of Renato S. Ong solely liable for all claims and liabilities arising from the operation of
dated February 18, 1987 said bus. Philtranco further alleged that, with respect to its own bus
(which bumped the Inland bus), it exercised the diligence of a good
F — Statement of Account of Francia N. Ong father of a family in the selection and supervision of its drivers, and that
in the amount of P1,153.50 the proximate cause of the accident was the negligence of either the
cargo truck or the Inland bus which collided with said cargo truck.
G — Statement of Account of Renato S. Ong
in the amount of P1,973.50 Inland answered that, according to the Police Report, it was Apolinar
Miralles, the driver of the Philtranco bus, who was at fault, as shown by
H — Receipt dated February 9, 1987 his flight from the situs of the accident; that said bus was registered and
owned by Philtranco; and that the driver of the Inland bus exercised
I — Receipt dated March 3, 1987
extraordinary diligence as testified to by its passengers. Inland and Considering that the documents are admitted, there is no
Philtranco filed cross-claims against each other. necessity of any formal written offer of evidence and,
therefore, after all the foregoing, the case shall be deemed
Both respondents moved to submit the case for decision without submitted for decision upon simultaneous memoranda of
presenting further evidence. Consequently, the trial court, in its Order the parties and upon submission of complete transcripts.
dated July 5, 1989, resolved: 8

Thereafter, the trial court rendered its May 7, 1991 Decision, which
When this case was called for continuation of presentation disposed as follows:9

of plaintiffs evidence, over objections from counsels for

defendants, plaintiffs counsel was allowed to recall his first IN VIEW OF ALL THE FOREGOING, judgment is hereby
witness, Renato S. Ong, for some additional direct rendered in favor of the [petitioners] absolving Inland
questions[;] and after cross-examination by defendant Trailways, Inc., from any liability whatsoever, and
Inland Trailways, Inc., adopted by defendant Philtranco against . . . Philtranco Service Enterprise, Inc., ordering the
Service Enterprise, Inc., plaintiff presented his second latter to pay the [petitioners] —
witness, [Francia] Ong, whose testimony on direct, cross
and redirect was terminated[;] and as prayed for, counsel 1) P10,000.00 as actual damages for medical and
for the plaintiffs shall have five (5) days from today within miscellaneous expenses;
which to submit his formal offer of evidence, furnishing
copies thereof to defendants who shall have five (5) days 2) P50,000.00 as compensatory damages for the
from their receipt within which to submit comments after [diminution] of the use of the right arm of [petitioner]-wife;
which the same shall be deemed submitted for resolution.
3) P48,000.00 as unrealized profit or income;
By agreement, considering the stipulations of parties made
of record regarding factual issues except as to whether or 4) P50,000.00 as moral damages;
not the bus is included in the lease, counsels for the two (2)
defendants are given a period of ten (10) days from today 5) 25% of the foregoing as contingent attorney's fees; and
within which to submit simultaneous offer[s] of admission
and denials not only on the above exception but on any 6) the costs.
other relevant matter.
According to the trial court, the proximate cause of the accident was
"the bumping from behind by the Philtranco bus with Plate No. 259
driven by Apolinar Miralles" based on the Police Report and the Hence, this petition. 10

affidavits of passengers, to which Philtranco did not object. As it failed

to prove that it exercised due diligence in the selection and supervision The Issues
of its employees under Article 2176 of the Civil Code, Philtranco was
held liable based on culpa aquiliana. In their Memorandum,  petitioners raise the following issues: 
11 12

Ruling of the Court of Appeals [I] Whether or not public respondent

committed grave abuse of discretion in
On appeal, the Court of Appeals (CA) resolved that Philtranco's liability completely reversing the decision of the
for damages could not be predicated upon the Police Report which had Regional Trial Court, ordering Philtranco to
not been formally offered in evidence. The report was merely annexed indemnify petitioners and in lieu thereof,
to the answer of Inland, and petitioner did not adopt or offer it as order[ing] Inland to pay petitioners for their
evidence. Consequently, it had no probative value and, thus, Philtranco damages.
should be absolved from liability.
[II] Whether or not public respondent
Instead, the appellate court found that petitioners sufficiently committed grave abuse of discretion in
established a claim against Inland based on culpa contractual. As a disallowing the P50,000.00 awarded to
common carrier, Inland was required to observe extra ordinary diligence petitioner, Francia Ong for the diminution of
under Articles 1735 and 1750 of the Code. Its liability arose from its the use of her right arm and the P48,000.00
failure to transport its passengers and cargo safely, and a finding of representing unrealized income.
fault or negligence was not necessary to hold it liable for damages.
Inland failed to overcome this presumption of negligence by contrary [III] Whether or not public respondent
evidence; thus, it was liable for breach of its contractual obligation to committed grave abuse of discretion in
petitioners under Article 2201 of the Civil Code. reducing the award for actual and
miscellaneous expenses from P10,000.00 to
The liability of Inland for medical and miscellaneous expenses was P3,977.00; the award of P50,000.00 moral
reduced, as the evidence on record showed that petitioners spent only damages to P30,000.00; and the 25%
P3,977. Deemed self-serving was Francia's testimony that the use of contingent attorney's fees to10% thereof.
her right arm was diminished and that she lost income. Thus, the award
for unearned income was disallowed and the amount of moral damages Simply stated, the main issues raised are: (1) whether the Police
was reduced to P30,000. Report, which was not formally offered in evidence, could be used to
establish a claim against Philtranco based on culpa aquiliana; and (2) In adhering to this rule, the appellate court cannot be faulted with
whether the reduction in the amounts of damages awarded was proper. reversible error, as it held: 
14

The Court's Ruling . . . [T]he burden of proof lies with the plaintiff in
establishing fault or negligence on the part of the defendant
The petition is devoid of merit. (Ong vs. Metropolitan Water). This, however, plaintiff-
appellees failed to establish. Albeit, there was a police
First Issue: investigation report finding the driver of PHILTRANCO
negligent which became the basis of the court a qou [for]
Retirement of Formal Offer of Evidence holding PHILTRANCO liable, this piece of evidence was
merely attached as Annex "1" of INLAND's answer, nothing
Petitioners take exception to the rule requiring documents to be formally more. It was not presented and even offered as evidence
offered in evidence before they can be given any probative value, by INLAND nor utilized by plaintiffs-appellees. Thus, even
arguing that the parties agreed to submit the case for resolution based assuming arguendo that the same had been identified in
on the July 5, 1989 Order of the trial court. Because of the agreement, court, it would have no evidentiary value. Identification of
petitioners assumed that all the pieces of documentary evidence, documentary evidence must be distinguished from its
including the Complaint and its Annexes, as well as those in the formal offer as an exhibit. The first is done in the course of
respective Answers of the private respondents, were deemed admitted. the trial and is accompanied by the marking of the
evidence as an exhibit. The second is done only when the
We disagree. Section 34, Rule 132 of the Rules of Court, provides that party rests its case and not before. The mere fact that a
"[t]he court shall consider no evidence which has not been formally particular document is identified and marked as an exhibit
offered." A formal offer is necessary, since judges are required to base does not mean it will be or has been offered as part of the
their findings of fact and their judgment solely and strictly upon the evidence of the party. The party may decide to offer it if it
evidence offered by the parties at the trial. To allow parties to attach believes this will advance the cause, and then again it may
any document to their pleadings and then expect the court to consider it decide not to do so at all (People vs. Santito, Jr., 201
as evidence, even without formal offer and admission, may draw SCRA 87).
unwarranted consequences. Opposing parties will be deprived of their
chance to examine the document and to object to its admissibility. On In the case at bar, the defendant INLAND and plaintiffs-
the other hand, the appellate court will have difficulty reviewing appellees did not identify the said Annex "1" or the Police
documents not previously scrutinized the court below. 13
Investigation Report as evidence. Thus, under Section 35
of Rule 132 of the Revised Rules on Evidence, the court
 shall consider no evidence which has not been formally There is no agreement to submit the case based on the pleading, as
offered. Corollary, the Police Investigation Report of Annex contended by the petitioners. The parties had no such intention, nor did
"1" cannot be given any evidentiary value. said Order evince such an agreement.

Absen[t] Annex "1" which was the basis of the trial court in Second Issue:
finding PHILTRANCO liable, the latter is thus exonerated
from liability. Damages Require Evidence

Petitioners similarly erred in presuming that said Annex was admitted in Petitioners aver that there was grave abuse of discretion when the
evidence by virtue of the Order of July 5, 1989. Their presumption has amount of actual damages awarded was reduced from P10,000 to
no basis. The Order required counsel for the petitioners to "submit his P3,977, even if the original amount did not even include the medical
formal offer of evidence, furnishing copies thereof to defendants who expenses that Francia continued to incur; and when the award of
shall have five (5) days from their receipt within which to submit P48,000 as unrealized income was deleted despite her testimony which
comments after which the same shall be deemed submitted for was given credence by the trial court.
resolution."  In compliance, petitioners filed a written offer of evidence
15

on July 12, 1989.  Such offer led the trial court, in its Order of August 2,
16 The Court disagrees. Granting arguendo that there was an agreement
1989, to formally admit in evidence Exhibits "A"-"O."  Clearly, the Police
17 to submit the case for decision based on the pleadings, this does not
Report was neither offered by the petitioners nor admitted by the trial necessarily imply that petitioners are entitled to the award of damages.
court. The fundamental principle of the law on damages is that one injured by
a breach of contract (in this case, the contract of transportation) or by a
Moreover, the petitioners' allegations in their Complaint did not wrongful or negligent act or omission shall have a fair and just
establish a cause of action against Philtranco. They similarly failed to compensation, commensurate with the loss sustained as a
make any reference to said Police Report during the presentation of consequence of the defendant's acts. Hence, actual pecuniary
their case. This is precisely why Respondent Philtranco opted not to compensation is the general rule, except where the circumstances
present further evidence. A document or an article is valueless unless it warrant the allowance of other kinds of damages.
is formally offered in evidence, and the opposing counsel is given an
opportunity to object to it and to cross-examine any witness called to Actual damages are such compensation or damages for an injury that
present or identify it.  Evidence not formally offered before the trial court
18 will put the injured party in the position in which he had been before he
cannot be considered on appeal, for to consider them at such stage will was injured. They pertain to such injuries or losses that are actually
deny the other parties their right to rebut them.  19 sustained and susceptible of measurement. Except as provided by law
or by stipulation, a party is entitled to adequate compensation only for finds the amount of P10,000.00 as actual damages to be
such pecuniary loss as he has duly proven. reasonable.

To be recoverable, actual damages must be pleaded and proven in Damages, after all, are not intended to enrich the complainant at the
Court. In no instance may the trial judge award more than those so expense of the defendant.  20

pleaded and proven. Damages cannot be presumed. The award there

of must be based on the evidence presented, not on the personal Moral Damages and Diminution
knowledge of the court; and certainly not on flimsy, remote, speculative
and nonsubstantial proof. Article 2199 of the Civil Code expressly of Use of Francia's Arm
mandates that "[e]xcept as provided by law or by stipulation, one is
entitled to an adequate compensation only for such pecuniary loss Petitioners protest the deletion of the amount of P50,000 earlier
suffered by him as he has duly proved." awarded by the trial court because of the diminution of the use of
Francia's right arm, arguing that she stated during direct examination
The lack of basis for such award was patent in the trial court Decision: that it could no longer perform its normal functions,  and that private
21

respondents impliedly admitted this matter when they failed to present

The records will show that from the documentary evidence, controverting evidence.
[petitioners] have jointly spent the sum of P3,977.00.
[Respondent] Philtranco has not presented any evidence A person is entitled to the physical integrity of his or her body, and if
that it has advanced any amount for medicine, that integrity is violated, damages are due and assessable. However,
hospitalization and doctor's fees, but on the contrary, physical injury, like loss or diminution of use of an arm or a limb, is not a
[petitioners] have testified that they paid for their expenses pecuniary loss. Indeed, it is nor susceptible of exact monetary
except at the initial stage wherein a representative of estimation.
[respondent] Philtranco went to the hospital to get the
receipts of medicines only and paid (t.s.n. — June 29, Thus, the usual practice is to award moral damages for physical injuries
1989, p. 6). Considering the claim of the [petitioners], as sustained. In Mayo v. People,  the Court held that the permanent scar
22

alleged in their complaint they spent P10,000.00 on the forehead and the loss of the use of the right eye entitled the
representing medical and miscellaneous expenses[;] victim to moral damages. The victim, in said case, devastated by
considering that they have gone for consultation to at least mental anguish, wounded feelings and shock, which she experienced
two (2) different doctors, this Court may take judicial notice as a result of her false eye and the scar on her forehead. Furthermore,
of the fact that miscellaneous expenses [are] bound to be the loss of vision in her right eye hampered her professionally for the
incurred to cover transportation and food, and therefore, rest of her life.
In the case at bar, it was sufficiently shown during the trial that Francia's Protesting the deletion of the award for Francia's unrealized income,
right arm could not function in a normal manner and that, as a result, petitioners contend that Francia's injuries and her oral testimony
she suffered mental anguish and anxiety. Thus, an increase in the adequately support their claim. The Court disagrees. Although actual
amount of moral damages awarded, from P30,000 to P50,000, appears damages include indemnification for profits which the injured party
to be reasonable and justified. Renato also suffered mental anxiety and failed to obtain (lucro cesante or lucrum cesans),  the rule requires that
26

anguish from the accident. Thus, he should be separately awarded said person produce the "best evidence of which his case is
P30,000 as moral damages. susceptible.  27

In some instances, the Court awards the cost of medical procedures to The bare and unsubstantiated assertion of Francia that she usually
restore the injured person to his or her former condition. However, this earned P200 a day from her market stall is not the best evidence to
award necessitates expert testimony on the cost of possible restorative prove her claim of unrealized income for the eight-month period that her
medical procedure. In Gatchalian v. Delim,   the Court, reasoning that a
23
arm was in plaster cast. Her testimony that was their lessor who filed
scar resulting from the infliction of injury on the face of a woman gave their income tax returns and obtained business licenses for them does
rise to a legitimate claim for restoration to her conditio ante, granted not justify her failure to present more credible evidence of her income.
P15,000 as actual damages for plastic surgery. It bears emphasis that Furthermore, after her ten-day confinement at the San Pablo
the said amount was based on expert testimony. 24
Hospital,  she could have returned so her work at the public market
28

despite the plaster cast on her right arm, since she claimed to have two
In another case, the Court granted actual or compensatory damages in nieces as helpers.  Clearly, the appellate court was correct in deleting
29

the sum of P18,000 for the surgical intervention necessary to arrest the the award for unrealized income, because of petitioner's utter failure to
degeneration of the mandible of a young boy. Again, there was an substantiate her claim.
expert testimony that such medical procedure would cost P3,000 and
would have to be repeated several times to restore him to nearly normal Attorney's Fees
condition. 25

Counsel for petitioner deeply laments the reduction in the award of

In the case at bar, petitioner failed to present evidence regarding attorney's fees. He alleges that he had to use his own money for
the feasibility or practicability and the cost of a restorative medical transportation, stenographic transcriptions and other court expenses,
operation on her arm. Thus, there is no basis to grant her P48,000 for and for such reason, avers that the award of 25 percent attorney's fees
such expense. made by the trial court was proper.

Unrealized Income Under the Civil Code, an award of attorney's fees is an indemnity for
damages ordered by a court to be paid by the losing party to the
prevailing party, based on any of the cases authorized by law.   It is
30
moral damages in the amount of P30,000 and P50,000, respectively.
payable not to the lawyer but to the client, unless the two have agreed The ten percent (10%) attorney's fees shall be based on the total
that the award shall pertain to the lawyer as additional compensation or modified award.1âwphi1.nêt

as part thereof. The Court has established a set standards in fixing the
amount of attorney's fees:  31 SO ORDERED.

(1) [T]he amount and character of the services rendered;

(2) labor, time and trouble involved; (3) the nature and
importance of the litigation or business in which the
services were rendered; (4) the responsibility imposed; (5)
the amount of money or the value of the property affected
by the controversy or involved in the employment; (6) the
skill and experience called for in the performance of the
services; (7) the professional character and social standing
of the attorney; (8) the results secured, it being a
recognized rule that an attorney may properly charge a
much larger fee when it is contingent than when it is not.

Counsel's performance, however, does not justify the award of 25

percent attorney's fees. It is well-settled that such award is addressed
to sound judicial discretion and subject to judicial control. 
32

We do not see any abuse thereof in the case at bar. In fact, the
appellate court had been generous to petitioners' counsel, considering
that the nature of the case was not exceptionally difficult, and he was
not required to exert Herculean efforts. All told, his handling of the case
was sorely, inadequate, as shown by his failure to follow elementary
norms of civil procedure and evidence.

WHEREFORE, the assailed Decision is AFFIRMED with the

MODIFICATION that Renato and Francia Ong are separately awarded
G.R. No. 154115 November 29, 2005 child.5 The trial court denied the motion.6 It ruled that the insurance
contract is inadmissible evidence in view of Circular Letter No. 11-2000,
PHILIP S. YU, Petitioner, issued by the Insurance Commission which presumably prevents
vs. insurance companies/agents from divulging confidential and privileged
HON. COURT OF APPEALS, Second Division, and VIVECA LIM information pertaining to insurance policies.7 It added that the
YU, Respondents. production of the application and insurance contract would violate
Article 2808 of the Civil Code and Section 5 of the Civil Registry
DECISION Law,9 both of which prohibit the unauthorized identification of the
parents of an illegitimate child.10 Private respondent sought
Tinga, J.: reconsideration of the Order, but the motion was denied by the trial
court.11
This treats of the petition for review on certiorari of the Court of
Appeals’ Decision and Resolution in CA G.R. SP No. 66252 dated 30 Aggrieved, private respondent filed a petition for certiorari before the
April 20021 and 27 June 2002,2 respectively, which set aside Court of Appeals, imputing grave abuse of discretion amounting to lack
the Order of the Regional Trial Court (RTC) of Pasig City3 dated 10 May or excess of jurisdiction on the part of Judge Hernandez in issuing the
2001, declaring an application for insurance and an insurance policy as 10 May 2001 Order.12 The Court of Appeals summarized the issues as
inadmissible evidence. follows: (i) whether or not an insurance policy and its corresponding
application form can be admitted as evidence to prove a party’s extra-
The facts of the case are undisputed. marital affairs in an action for legal separation; and (ii) whether or not a
trial court has the discretion to deny a party’s motion to attach excluded
On 15 March 1994, Viveca Lim Yu (private respondent) brought against evidence to the record under Section 40, Rule 132 of the Rules of
her husband, Philip Sy Yu (petitioner), an action for legal separation Court.13
and dissolution of conjugal partnership on the grounds of marital
infidelity and physical abuse. The case was filed before the RTC of According to the Court of Appeals, private respondent was merely
Pasig and raffled to Branch 158, presided by Judge Jose R. seeking the production of the insurance application and contract, and
Hernandez. was not yet offering the same as part of her evidence. Thus, it declared
that petitioner’s objection to the admission of the documents was
During trial, private respondent moved for the issuance of a subpoena premature, and the trial court’s pronouncement that the documents are
duces tecum and ad testificandum4 to certain officers of Insular Life inadmissible, precipitate.14 The contents of the insurance application
Assurance Co. Ltd. to compel production of the insurance policy and and insurance documents cannot be considered as privileged
application of a person suspected to be petitioner’s illegitimate information, the Court of Appeals added, in view of the opinion of the
Insurance Commissioner dated 4 April 2001 to the effect that Circular determine the case, oversteps his authority as determined by law, he is
Letter No.11-2000 "was never intended to be a legal impediment in performing a function in excess of jurisdiction."20
complying with lawful orders".15 Lastly, the Court of Appeals ruled that a
trial court does not have the discretion to deny a party’s privilege to Petitioner claims that the Court of Appeals passed upon errors of
tender excluded evidence, as this privilege allows said party to raise on judgment, not errors of jurisdiction, since it delved into the propriety of
appeal the exclusion of such evidence.16 Petitioner filed a motion for the denial of the subpoena duces tecum and subpoena ad
reconsideration but to no avail. testificandum. The argument must fail.

In the present petition, petitioner argues that the Court of Appeals While trial courts have the discretion to admit or exclude evidence, such
blundered in delving into errors of judgment supposedly committed by power is exercised only when the evidence has been formally
the trial court as if the petition filed therein was an ordinary appeal and offered.21 For a long time, the Court has recognized that during the early
not a special civil action. Further, he claims that the Court of Appeals stages of the development of proof, it is impossible for a trial court
failed to show any specific instance of grave abuse of discretion on the judge to know with certainty whether evidence is relevant or not, and
part of the trial court in issuing the assailed Order. Additionally, he thus the practice of excluding evidence on doubtful objections to its
posits that private respondent had already mooted her petition before materiality should be avoided.22 As well elucidated in the case of Prats
the Court of Appeals when she filed her formal offer of rebuttal exhibits, & Co. v. Phoenix Insurance Co.:23
with tender of excluded evidence before the trial court.17
Moreover, it must be remembered that in the heat of the battle over
For her part, private respondent maintains that the details surrounding which he presides a judge of first instance may possibly fall into error in
the insurance policy are crucial to the issue of petitioner’s infidelity and judging of the relevancy of proof where a fair and logical connection is
his financial capacity to provide support to her and their children. in fact shown. When such a mistake is made and the proof is
Further, she argues that she had no choice but to make a tender of erroneously ruled out, the Supreme Court, upon appeal, often finds
excluded evidence considering that she was left to speculate on what itself embarrassed and possibly unable to correct the effects of the error
the insurance application and policy ruled out by the trial court would without returning the case for a new trial, — a step which this court is
contain.18 always very loath to take. On the other hand, the admission of proof in
a court of first instance, even if the question as to its form, materiality, or
A petition for certiorari under Rule 65 is the proper remedy to correct relevancy is doubtful, can never result in much harm to either litigant,
errors of jurisdiction and grave abuse of discretion tantamount to lack or because the trial judge is supposed to know the law; and it is its duty,
excess of jurisdiction committed by a lower court.19 Where a respondent upon final consideration of the case, to distinguish the relevant and
does not have the legal power to determine the case and yet he does material from the irrelevant and immaterial. If this course is followed
so, he acts without jurisdiction; where, "being clothed with power to and the cause is prosecuted to the Supreme Court upon appeal, this
court then has all the material before it necessary to make a correct Petitioner additionally claims that by virtue of private respondent’s
judgment. tender of excluded evidence, she has rendered moot her petition before
the Court of Appeals since the move evinced that she had another
In the instant case, the insurance application and the insurance policy speedy and adequate remedy under the law. The Court holds
were yet to be presented in court, much less formally offered before it. otherwise.
In fact, private respondent was merely asking for the issuance
of subpoena duces tecum and subpoena ad testificandum when the Section 40, Rule 132 provides:
trial court issued the assailed Order. Even assuming that the
documents would eventually be declared inadmissible, the trial court Sec.40. Tender of excluded evidence.—If documents or things offered
was not then in a position to make a declaration to that effect at that in evidence are excluded by the court, the offeror may have the same
point. Thus, it barred the production of the subject documents prior to attached to or made part of the record. If the evidence excluded is oral,
the assessment of its probable worth. As observed by petitioners, the the offeror may state for the record the name and other personal
assailed Order was not a mere ruling on the admissibility of evidence; it circumstances of the witness and the substance of the proposed
was, more importantly, a ruling affecting the proper conduct of trial.24 testimony.

Excess of jurisdiction refers to any act which although falling within the It is thus apparent that before tender of excluded evidence is made, the
general powers of the judge is not authorized and is consequently void evidence must have been formally offered before the court. And before
with respect to the particular case because the conditions under which formal offer of evidence is made, the evidence must have been
he was only authorized to exercise his general power in that case did identified and presented before the court. While private respondent
not exist and therefore, the judicial power was not legally made a "Tender of Excluded Evidence," such is not the tender
exercised.25 Thus, in declaring that the documents are irrelevant and contemplated by the above-quoted rule, for obviously, the insurance
inadmissible even before they were formally offered, much less policy and application were not formally offered much less presented
presented before it, the trial court acted in excess of its discretion. before the trial court. At most, said "Tender of Excluded Evidence" was
a
Anent the issue of whether the information contained in the documents
is privileged in nature, the same was clarified and settled by the manifestation of an undisputed fact that the subject documents were
Insurance Commissioner’s opinion that the circular on which the trial declared inadmissible by the trial court even before these were
court based its ruling was not designed to obstruct lawful court presented during trial. It was not the kind of plain, speedy and adequate
orders.26 Hence, there is no more impediment to presenting the remedy which private respondent could have resorted to instead of the
insurance application and policy. petition for certiorari she filed before the Court of Appeals. It did not in
any way render the said petition moot.
WHEREFORE, premises considered, the petition is DENIED. G.R. No. 165996 October 17, 2005
The Decision dated 30 April 2002 and Resolution dated 27 June 2002
are AFFIRMED. Costs against petitioner. RODOLFO G. VALEnCIA, Petitioner
vs.
SO ORDERED. THE SANDIGANBAYAN, Respondent.

DECISION

YNARES-SANTIAGO, J.:

This petition for certiorari under Rule 65 of the Rules of Court assails
the June 14, 2004 Order1 of respondent Sandiganbayan in Criminal
Case No. 25160, which denied petitioner’s motion for leave to file
demurrer to evidence and set the case for presentation of evidence for
the prosecution; as well as its July 28, 2004 Resolution2 denying
petitioner’s motion for reconsideration.

The undisputed facts show that on February 10, 1999, petitioner

Rodolfo G. Valencia, then governor of Oriental Mindoro was charged
before the Sandiganbayan with violation of Section 3(e) of Republic Act
(RA) No. 3019, the Anti-graft and Corrupt Practices Act. The
information filed against petitioner reads:

That on or about December 1, 1992, or sometime prior or subsequent

thereto in the Province of Oriental Mindoro, Philippines, and within the
jurisdiction of this Honorable Court, the above-named accused, a public
officer, being then the Governor of the Province of Oriental Mindoro,
while in the performance of his official functions, committing the offense
in relation to his office, and taking advantage of his official position,
acting with manifest partiality, evident bad faith or gross inexcusable
negligence, did then and there wilfully, unlawfully and criminally cause
undue injury to the Province of Oriental Mindoro, and at the same time CONTENTION/ISSUES
give unwarranted benefits, advantage or preference to one CRESENTE
UMBAO, a candidate who ran and lost in the 1992 election, by then and The Prosecution contends that this appointment is in violation of Sec.
there appointing said Cresente Umbao as Sangguniang Bayan member 3(e) of R.A. 3019 as it gives among other, unwarranted benefit to Mr.
of Pola, Oriental Mindoro, within the prohibitive period of one (1) year Cresente Umbao who is disqualified to be appointed within a period of
after an election, in flagrant violation of Sec. 6, Art IX B of the one year after having lost in May 1992 local election for councilor, while
Constitution, to the damage and prejudice of the Province of Oriental the accused, then Governor Rodolfo Valencia, maintains that the
Mindoro and to the government as a whole.3 appointment of Lumbao was in the performance of his duty and that it
was made in good faith pursuant to Sec. 45, Chapter 2, Title 2, of the
Upon arraignment on April 13, 1999, petitioner pleaded not guilty.4 Local Government Code (R.A. 7160).

On March 24, 2003, the parties submitted a Joint Stipulation of Facts, to The Parties reserve their rights to present documentary evidences as
wit: the need arise during the trial.

1. Mr. Rodolfo G. Valencia, had been the Governor of the Province of WHEREFORE, premises considered, the parties respectfully prays that
Oriental Mindoro, for having won in the gobernatorial race in the May this stipulation of facts be well taken by the Honorable Sandiganbayan
1992 local and provincial election; for pre-trial purposes.5

2. During the 1992 election, Mr. Cresente Umbao of Pola, Oriental, On March 26, 2003, the Sandiganbayan directed the parties to sign the
Mindoro also ran for the position of councilor in the Municipality of Pola, Joint Stipulation of Facts, thus –
Oriental Mindoro but he lost;
The Court orders both counsels and the accused to sign each and
3. On October 17, 1992, Councilor Antonio Mercene, Jr. of Pola, every page of the Joint Stipulation of Facts. Thereafter, let a pre-trial
Oriental, Mindoro died thus creating a permanent vacancy in the order be issued on the bases of the agreement of both parties as
membership position of Sanguniang Bayan of Pola, Oriental Mindoro. embodied in this Joint Stipulation of Facts.6

4. On December 1, 1992 then Governor Rodolfo G. Valencia of The Joint Stipulation of Facts however remained unsigned by petitioner.
Oriental, Mindoro, appointed Cresente Umbao to the position of a Only the signature of the Special Prosecutor and petitioner’s counsel
councilor in the Municipal Council of Pola, Oriental Mindoro on the appear on the last page thereof.
vacancy left by the death of Councilor Mercene.
On January 12, 2004, Prosecutor Danilo F. Salindong rested the case Considering petitioner’s refusal to acknowledge the Joint Stipulation of
based on the Joint Stipulation of Facts and waived the presentation of Facts or to sign the Pre-trial Order, the Sandiganbayan issued the
testimonial or documentary evidence for the prosecution.7 assailed June 14, 2004 Order recalling the Pre-trial Order; denying the
motion for leave to file demurrer; and setting the case for presentation
Thereafter, petitioner filed on January 19, 2004 a Motion for Leave to of the prosecution’s evidence, thus –
File Demurrer to Evidence because the prosecution failed to present,
mark or offer evidence that would substantiate the charge against him. This afternoon is supposed to be the initial presentation of the defense
Petitioner asserted that the Joint Stipulation of Facts is inadmissible evidence. Prosecutor Danilo F. Salindong, former handling prosecutor
because it lacks his signature. Even if the same be admitted, the of this case, rested his case on the basis of the Pre-Trial Order issued
information is dismissable for failure of the prosecution to submit by this Court. However, accused Rodolfo Valencia refused to sign the
evidence to establish the injury caused to the government and the pre-trial order as per his motion for reconsideration, to which Prosecutor
presence of manifest partiality, evident bad faith or gross inexcusable Agnes Autencio Daquis commented that since the accused refused to
negligence in the appointment of Cresente Umbao, which are among sign the pre-trial order, that the same be abrogated and that trial on the
the essential elements of the crime of violation of Section 3(e) of RA merits ensued. Consequently, the Pre-Trial Order issued by this Court
No. 3019.8 on March 11, 2004 is hereby recalled and set aside. In view of the
refusal of the accused to enter into any stipulation of facts, let this case
The prosecution, now represented by Prosecutor Agnes B. Autencio- be scheduled for trial on the merits. The presentation of prosecution’s
Daquis, filed an Opposition/Comment alleging that petitioner’s Motion evidence is hereby scheduled on August 31 and September 1, 2004 at
for Leave to File Demurrer to Evidence is premature because the 2:00 o’clock in the afternoon. The demurrer to evidence filed by the
prosecution has yet to formally offer the Joint Stipulation of Facts.9 accused is therefore considered premature and is hereby stricken out of
the records.13
On February 20, 2004, the Sandiganbayan reiterated its March 26,
2003 Resolution directing petitioner and counsels to sign the Joint Petitioner’s motion for reconsideration was denied on July 28, 2004, as
Stipulation of Facts.10 Petitioner filed a Manifestation with Motion for follows:
Reconsideration11 claiming that his former counsel was not authorized
to enter into any agreement and that he came to know of the existence The "Motion for Reconsideration (of June 14, 2004 Order)" dated June
of said stipulations only on January 12, 2004. 29, 2004 filed by accused, thru counsels which met vigorous opposition
from the prosecution’s Comment/Opposition dated July 16, 2004 is
On March 11, 2004, the Sandiganbayan issued a Pre-trial denied for lack of merit. As clearly stated in the Order of June 14, 2004,
Order12 embodying the Joint Stipulation of Facts. the case for the prosecution was re-opened because of the refusal of
accused to sign the pre-trial order on the basis of which the prosecution
rested its case. Justice and fairness demand the re-opening of the A demurrer to evidence tests the sufficiency or insufficiency of the
evidence for the prosecution because of the unwarranted act of the prosecution’s evidence. As such, a demurrer to evidence or a motion
accused in refusing to sign the pre-trial order.14 for leave to file the same must be filed after the prosecution rests its
case. But before an evidence may be admitted, the rules require that
Hence, the instant petition contending that the Sandiganbayan gravely the same be formally offered, otherwise, it cannot be considered by the
abused its discretion in issuing the assailed June 14, 2004 Order and court. A prior formal offer of evidence concludes the case for the
July 28, 2004 Resolution. prosecution and determines the timeliness of the filing of a demurrer to
evidence.
Meanwhile, there being no temporary restraining order nor preliminary
injunction issued by this Court, the prosecution proceeded with the As held in Aquino v. Sison,16 the motion to dismiss for insufficiency of
presentation of its evidence.15 evidence filed by the accused after the conclusion of the cross-
examination of the witness for the prosecution, is premature because
The issues for resolution are (1) was petitioner’s Motion for Leave to the latter is still in the process of presenting evidence. The chemistry
File Demurrer to Evidence premature? (2) may the prosecution be report relied upon by the court in granting the motion to dismiss was
allowed to present evidence after it orally manifested its intention to rest disregarded because it was not properly identified or formally offered as
its case? (3) was petitioner denied his right to speedy trial? evidence. Verily, until such time that the prosecution closed its
evidence, the defense cannot be considered to have seasonably filed a
Section 23, Rule 119 of the Rules of Court, provides: demurrer to evidence or a motion for leave to file the same.

SEC. 23. Demurrer to evidence. – After the prosecution rests its case, In the present case, petitioner’s motion for leave to file demurrer to
the court may dismiss the action on the ground of insufficiency of evidence is premature because the prosecution had yet to formally rest
evidence (1) on its own initiative after giving the prosecution the its case. When the motion was filed on January 19, 2004, the latter had
opportunity to be heard or (2) upon demurrer to evidence filed by the not yet marked nor formally offered the Joint Stipulation of Facts as
accused with or without leave of court. evidence. It is inconsequential that petitioner received by mail on
January 27, 2004, a motion and formal offer of evidence dated January
Corollarily, Section 34, Rule 132 of the Rules of Court states: 20, 2004 from Prosecutor Salindong,17 because, as aptly observed by
the Office of the Ombudsman, the records of the Sandiganbayan bear
SEC. 34. Offer of evidence. – The court shall consider no evidence no such motion or formal offer of evidence filed by the prosecution. The
which has not been formally offered. The purpose for which the motion and formal offer found in the records are those attached as
evidence is offered must be specified. Annex "B"18 to petitioner’s Manifestation with Motion for
Reconsideration19 and not copies filed by the prosecution. Under
Section 12, Rule 13 of the Rules of Court, the filing of a pleading or Indeed, in the furtherance of justice, the court may grant the parties the
paper shall be proved by its existence in the case records. The absence opportunity to adduce additional evidence bearing upon the main issue
of the motion to rest the case in the records of the Sandiganbayan and in question.22 Thus, in Hon. Vega, etc., et al. v. Hon. Panis, etc., et
the failure to offer the Joint Stipulation of Facts prove that the al.,23 the Court sustained the order of the trial court allowing the
prosecution did not formally rest or conclude the presentation of its prosecution to present additional evidence after it had offered its
evidence, rendering petitioner’s motion for leave to file demurrer to evidence and rested its case and after the defense filed a motion to
evidence, premature. dismiss. It was stressed therein that while the prosecution had rested,
the trial was not yet terminated and the case was still under the control
At any rate, had the prosecution actually filed said motion and formally and jurisdiction of the court. Hence, in the exercise of its discretion, the
offered the evidence before the Sandiganbayan, the motion for leave to trial court may receive additional evidence.
file demurrer to evidence still suffers prematurity because it was filed on
January 19, 2004, or one day before the date of the motion and We also held in People v. Januario,24 that strict observance of the order
offer, i.e., January 20, 2004. In fact, even petitioner admitted in his of trial or trial procedure outlined in Rule 119 of the Rules of Court
motion for leave to file demurrer to evidence that the prosecution failed depends upon the circumstance obtaining in each case at the discretion
to mark and offer any evidence against him.20 of the trial judge. Citing United States v. Alviar,25 the Court explained –

Anent the second issue, we find that the trial court did not abuse its … The orderly course of proceedings requires, however, that the
discretion in granting the prosecution’s request to present additional prosecution shall go forward and should present all of its proof in the
evidence. Admission of additional evidence is addressed to the sound first instance; but it is competent for the judge, according to the nature
discretion of the trial court. Considerable latitude is allowed and such of the case, to allow a party who had closed his case to introduce
discretion will not be disturbed absent a finding that the accused was further evidence in rebuttal. This rule, however, depends upon the
denied due process of law. As early as the 1907 case of United States particular circumstances of each particular case and falls within the
v. Cinco,21 the Court has consistently upheld such prerogative of the trial sound discretion of the judge, to be exercised or not as he may think
court, thus – proper.

... The judges of the Courts of First Instance are judges of both fact and Hence, the court may allow the prosecutor, even after he has rested his
law, and after hearing all the evidence adduced by the attorneys, if the case or after the defense moved for dismissal, to present involuntarily
court is not satisfied, we see no reason why he should not be permitted omitted evidence.…26
to call additional witnesses for the purpose of satisfying his mind upon
any questions presented during the trial of the case.
It must be emphasized that the primary consideration in allowing the In the case at bar, petitioner cannot claim denial of due process
reopening of a case is for the accused to have his day in court and because he will have the opportunity to contest the evidence adduced
the opportunity to present counter evidence. Thus – against him and to prove his defenses after the prosecution concludes
the presentation of its evidence. Moreover, the order of the trial court
… As a rule, the matter of reopening of a case for reception of further granting the reception of additional evidence for the prosecution is not
evidence after either prosecution or defense has rested its case is technically a "reopening" of the case inasmuch as the latter had yet to
within the discretion of the trial court. However, a concession to a formally rest its case. A motion to reopen presupposes that either or
reopening must not prejudice the accused or deny him the opportunity both parties have formally offered and closed their evidence.28 If the
to introduce counter evidence. Court sanctions the admission of additional evidence after the case had
been submitted for resolution but before judgment, with more reason
… In U.S. vs. Base, we held that a trial court is not in error, if it opts to therefore that we should sustain the introduction of additional evidence
reopen the proceedings of a case, even after both sides had rested and in the present case because the prosecution had not yet concluded the
the case submitted for decision, by the calling of additional witnesses or presentation of its evidence. The State is also entitled to due process in
recalling of witnesses so as to satisfy the judge’s mind with reference to criminal cases, that is, a fair opportunity to prosecute and convict. The
particular facts involved in the case. A judge cannot be faulted should Court has always accorded this right to the prosecution, and where the
he require a material witness to complete his testimony, which is what right had been denied, had promptly annulled the offending court
happened in this case. It is but proper that the judge’s mind be satisfied action.29
on any and all questions presented during the trial, in order to serve the
cause of justice. Furthermore, the haphazard manner by which Prosecutor Salindong
handled the case for the State will not pass unnoticed by the Court. It is
Appellant’s claim that the trial court’s concession to "reopen" the case the duty of the public prosecutor to bring the criminal proceedings for
unduly prejudiced him is not well taken. We note that appellant had the punishment of the guilty. Concomitant with this is the duty to pursue
every opportunity to present his evidence to support his case or to the prosecution of a criminal action and to represent the public
refute the prosecution’s evidence point-by-point, after the prosecution interest.30 With these standards, we thus find Prosecutor Salindong
had rested its case. In short, appellant was never deprived of his day in remiss in the performance of his responsibilities. He gravely abused his
court. A day in court is the touchstone of the right to due process in discretion by resting the case without adducing evidence for the State
criminal justice. Thus, we are unable to hold that a grave abuse of and without ensuring that petitioner had signed the Joint Stipulation of
discretion was committed by the trial court when it ordered the so-called Facts before it was submitted to the Sandiganbayan. As a result, the
"reopening" in order to complete the testimony of a prosecution prosecution was denied due process.
witness.27
In light of the foregoing, the Sandiganbayan was therefore correct in deliberately refused to present an available witness, i.e., the NBI Agent
allowing the State to adduce additional evidence. The State should not who was present in court on that date and time. The public prosecutor
be prejudiced and deprived of its right to prosecute cases simply was duty-bound to exhaust all available proofs to establish the guilt of
because of the ineptitude or nonchalance of the Special Prosecutor.31 A the accused and bring them to justice for their offense against the
contrary ruling would result in a void proceedings. injured party.

In Merciales v. Court of Appeals,32 the Court annulled the acquittal of Likewise guilty for serious nonfeasance was the trial court.
the accused based on the demurrer to evidence filed by the defense. It Notwithstanding its knowledge that the evidence for the prosecution
was held that the prosecutor’s failure to present sufficient evidence to was insufficient to convict, especially after the public prosecutor
convict the accused and the indifference displayed by the trial court in tenaciously insisted on utilizing Nuada as state witness, the trial court
not requiring the prosecutor to present additional evidence resulted in passively watched as the public prosecutor bungled the case. The trial
the denial of the State’s right to due process warranting the reversal of court was well aware of the nature of the testimonies of the seven
the judgment of acquittal on the ground of absence of jurisdiction. Thus prosecution witnesses that have so far been presented. Given this
– circumstance, the trial court, motu proprio, should have called additional
witnesses for the purpose of questioning them himself in order to satisfy
... [T]he public prosecutor knew that he had not presented sufficient his mind with reference to particular facts or issues involved in the case.
evidence to convict the accused.... he deliberately failed to present an
available witness and thereby allowed the court to declare that the Based on the foregoing, it is evident that petitioner was deprived of her
prosecution has rested its case.... he was remiss in his duty to protect day in court. Indeed, it is not only the State, but more so the offended
the interest of the offended parties.... [and] was guilty of blatant error party, that is entitled to due process in criminal cases. Inasmuch as the
and abuse of discretion, thereby causing prejudice to the offended acquittal of the accused by the court a quo was done without regard to
party… due process of law, the same is null and void. It is as if there was no
acquittal at all, and the same cannot constitute a claim for double
.… jeopardy.

By refusing to comply with the trial court’s order to present evidence, In the same vein, the right to speedy trial cannot be successfully
the public prosecutor grossly violated the above-quoted rule. Moreover, invoked where to sustain the same would result in a clear denial of due
the public prosecutor violated his bounden duty to protect the interest of process to the prosecution. While justice is administered with dispatch,
the offended party.... After the trial court denied his motion to discharge the essential ingredient is orderly, expeditious and not mere speed. It
Nuada as a state witness, he should have proceeded to complete the cannot be definitely said how long is too long in a system where justice
evidence of the prosecution by other means. Instead, he willfully and is supposed to be swift, but deliberate. It is consistent with delays and
depends upon circumstances. It secures rights to the accused, but it of a complaint for violation of Section 3(e) of RA No. 3019,37 followed by
does not preclude the rights of public justice. Also, it must be borne in another recommendation from the Graft Investigation Officer on July 14,
mind that the rights given to the accused by the Constitution and the 1998 for the institution of an Information against petitioner.38 After
Rules of Court are shields, not weapons; hence, courts are to give Ombudsman Aniano Desierto’s approval of said resolution on February
meaning to that intent.33 5, 1999,39 the Special Prosecutor filed the Information on February 10,
1999. The arraignment on April 13, 1999, was followed by seven (7)
As significant as the right of an accused to a speedy trial is the right of requests of petitioner to travel abroad, all of which were granted by the
the State to prosecute people who violate its penal laws.34 The right to a Sandiganbayan.40 On June 28, 2002, the latter directed the counsels to
speedy trial is deemed violated only when the proceeding is attended submit a Joint Stipulation of Facts, which was presented on March 24,
by vexatious, capricious and oppressive delays.35 In the instant case, 2003.41 Considering the difficulty of obtaining a quorum in the
allowing the prosecution to present additional evidence, is a lawful Sandiganbayan due to the retirement of the Justices, the presentation
exercise of due process and is certainly not intended to vex or oppress of the prosecution’s evidence scheduled on May 19 & 20 and July 8 &
the petitioner. In the balancing test used to determine whether an 9, 2003, were moved to September 8 & 942 and November 10 & 11,
accused had been denied speedy disposition of cases, the scales tilt in 2003. On the latter dates, however, the prosecution witnesses failed to
favor of allowing the prosecution to adduce further evidence. Slowly but appear, prompting the Special Prosecutor to manifest his intention to
surely, justice and due process would be afforded to the prosecution rest the case on January 12, 2004.
and to petitioner as well who would have the chance to present counter
evidence. On the other hand, to erroneously put premium on the right to All this time, however, petitioner never invoked his right to speedy trial.
speedy trial in the instant case and deny the prosecution’s prayer to In Guerrero v. CA,43 it was held that failure to seasonably raise the right
adduce additional evidence would logically result in the dismissal of the to speedy trial precludes the accused from relying thereon as a ground
case for the State. There is no difference between an order outrightly to dismiss the case. He is deemed to have slept on his rights by not
dismissing the case and an order allowing the eventual dismissal asserting the right to speedy disposition at the earliest possible
thereof. Both would set a dangerous precedent which enables the opportunity. The Court explained its ruling in this wise:
accused, who may be guilty, to go free without having been validly tried,
thereby infringing the interest of the society. In the case before us, the petitioner merely sat and waited after the
case was submitted for resolution in 1979. It was only in 1989 when the
Neither can petitioner capitalize on the pendency of his case since case below was re-raffled from the RTC of Caloocan City to the RTC of
1998. Note that the 1994 anonymous complaint36 against petitioner was Navotas-Malabon and only after respondent trial judge of the latter
indorsed for investigation by the Office of the Ombudsman to the court ordered on March 14, 1990 the parties to follow-up and complete
National Bureau of Investigation which submitted its findings in 1995. the transcript of stenographic notes that matters started to get moving
On March 15, 1996, the Ombudsman for Luzon recommended the filing towards a resolution of the case. More importantly, it was only after the
new trial judge reset the retaking of the testimonies to November 9, Moreover, it is worthy to note that it was only on 21 December 1999,
1990 because of petitioner’s absence during the original setting on after the case was set for arraignment, that petitioners raised the issue
October 24, 1990 that the accused suddenly became zealous of of the delay in the conduct of the preliminary investigation. As stated by
safeguarding his right to speedy trial and disposition. them in their Motion to Quash/Dismiss, "[o]ther than the counter-
affidavits, [they] did nothing." Also, in their petition, they averred: "Aside
.… from the motion for extension of time to file counter-affidavits,
petitioners in the present case did not file nor send any letter-queries
… It is fair to assume that he would have just continued to sleep on his addressed to the Office of the Ombudsman for Mindanao which
right – a situation amounting to laches – had the respondent judge not conducted the preliminary investigation." They slept on their right – a
taken the initiative of determining the non-completion of the records and situation amounting to laches. The matter could have taken a different
of ordering the remedy precisely so he could dispose of the case. The dimension if during all those four years, they showed signs of asserting
matter could have taken a different dimension if during all those ten their right to a speedy disposition of their cases or at least made some
years between 1979 when accused filed his memorandum and 1989 overt acts, like filing a motion for early resolution, to show that they
when the case was re-raffled, the accused showed signs of asserting were not waiving that right. Their silence may, therefore be interpreted
his right which was granted him in 1987 when the new constitution took as a waiver of such right. As aptly stated in Alvizo, the petitioner therein
effect, or at least made some overt act (like a motion for early was "insensitive to the implications and contingencies" of the projected
disposition or a motion to compel the stenographer to transcribe notes) criminal prosecution posed against him "by not taking any step
that he was not waiving it. As it is, his silence would have to be whatsoever to accelerate the disposition of the matter, which inaction
interpreted as a waiver of such right. conduces to the perception that the supervening delay seems to have
been without his objection, [and] hence impliedly with his acquiescence.
In Dela Peña v. Sandiganbayan,44 the Court denied a petition seeking to
quash the Information holding that the silence of the accused amounted The foregoing doctrines were reiterated in Bernat v.
to laches. In the said case, the investigatory process was set in motion Sandiganbayan,45 where the claim of denial of the right to a speedy
on August 14, 1992 and the Information was filed on May 6, 1997. After disposition of his criminal case was brushed aside by the Court
the arraignment was set sometime in December 1999, the accused filed considering that the accused waited eight years before complaining of
a motion to quash on December 21, 1999, based on the violation of his the delay in the disposal of his case.
right to due process and prompt disposition of cases. In sustaining the
Sandiganbayan’s denial of the motion to quash, the Court ratiocinated The rule as consistently applied in this jurisdiction is that objections to
that: the sluggish disposition of the case must be positively invoked by the
accused and a demand therefor must be openly made. The Court ruled
in Corpuz v. Sandiganbayan,46 that dismissal of a case is not justified
simply because the prosecutor had gone to sleep at the switch while the exercise of its sound discretion, set the case for presentation of the
the defendant and his counsel rested in silence. The accused must not prosecution’s evidence.
be rewarded by the dismissal of the case and the State and society
punished by the neglect of the prosecutor unless the accused himself Finally, if petitioner disagrees with the denial of his motion for leave to
calls the attention of the court on the matter. file demurrer to evidence, his remedy is not to file a petition for certiorari
but to proceed with the presentation of his evidence and to appeal any
We see no reason to deviate from the jurisprudential holdings and treat adverse decision that may be rendered by the trial court. The last
the instant case differently. Petitioner never contested the prosecutorial sentence of Section 23, Rule 119 of the Rules of Court, provides that
proceedings nor timely challenged the pendency of the case after "the order denying a motion for leave of court to file demurrer to
arraignment. It was only in the Motion for Reconsideration of the June evidence or the demurrer itself shall not be reviewable by appeal
14, 2004 order denying the demurrer to evidence and setting the case or certiorari before judgment."
for reception of additional evidence for the prosecution, that petitioner
insisted on his right to speedy trial. Under Section 9, Rule 119 of the WHEREFORE, the petition is DISMISSED. The June 14, 2004 Order of
Rules of Court, failure of the accused to move for dismissal prior to trial respondent Sandiganbayan in Criminal Case No. 25160 which denied
constitutes a waiver of his right to speedy trial. His failure therefore to petitioner’s motion for leave to file demurrer to evidence and set the
timely question the delay in the disposition of the case amounted to an case for presentation of evidence for the prosecution; as well its July
implied acceptance of such delay and a waiver of the right to question 28, 2004 Resolution denying petitioner’s motion for reconsideration
the same. Like any other right conferred by the Constitution or statute, are AFFIRMED.
except when otherwise expressly so provided, the speedy trial right
may be waived when not positively asserted. Thus, if there was a delay The instant case is REMANDED to the Sandiganbayan for further
in the disposition of the case, petitioner is not entirely without blame.47 proceedings.

Then too, while petitioner is free to acknowledge or reject the Joint SO ORDERED.
Stipulation of Facts, the trial court cannot be said to have abused its
discretion in ordering petitioner to sign the same considering that said
stipulation was not yet formally offered by the prosecution. At that
stage, said document cannot yet be considered "officially" an evidence
for the prosecution. The refusal therefore of petitioner to affix his
signature in the said stipulation or in the Pre-trial Order embodying the
same is sufficient justification for the trial court to recall the latter and in
G.R. NO. 146556             April 19, 2006 parents and children to transfer and temporarily reside thereat; it was
done out of sheer magnanimity as petitioner’s parents have no house of
DANILO L. PAREL, Petitioner, their own and since respondent’s wife is the older sister of Florentino,
vs. petitioner’s father; in November 1985, respondent wrote Florentino a
SIMEON B. PRUDENCIO, Respondent. notice for them to vacate the said house as the former was due for
retirement and he needed the place to which petitioner’s parents
DECISION heeded when they migrated to U.S. in 1986; however, without
respondent’s knowledge, petitioner and his family unlawfully entered
AUSTRIA-MARTINEZ, J.: and took possession of the ground floor of respondent’s house;
petitioner’s refusal to vacate the house despite repeated demands
Before us is a petition for review on certiorari filed by Danilo Parel prompted respondent to file the instant action for recovery of
(petitioner) which seeks to set aside the Decision1 dated March 31, possession. Respondent also asked petitioner for a monthly rental
2000 of the Court of Appeals (CA) which reversed the Decision of the of P3,000.00 from April 1988 and every month thereafter until the latter
Regional Trial Court (RTC), Branch 60, Baguio, in Civil Case No. 2493- vacates the said premises and surrender possession thereof; and for
R, a case for recovery of possession and damages. Also assailed is CA moral and exemplary damages, attorney’s fees and cost of suit.
Resolution2 dated November 28, 2000.
Petitioner filed his Answer with Counterclaim alleging that: his parents
On February 27, 1992, Simeon Prudencio (respondent) filed a are the co-owners of the said residential house, i.e., the upper story
complaint for recovery of possession and damages against petitioner belongs to respondent while the ground floor pertains to petitioner’s
with the RTC Baguio alleging that: he is the owner of a two-storey parents; he is occupying the ground floor upon the instruction of his
residential house located at No. 61 Forbes Park National Reservation father, Florentino, with respondent’s full knowledge; his parents spent
near Department of Public Service (DPS) compound, Baguio City; such their own resources in improving and constructing the said two-storey
property was constructed solely from his own funds and declared in his house as co-owners thereof; the late Florentino was an awardee of the
name under Tax Declaration No. 47048; he commenced the land on which the house stands and as a co-owner of the house, he
construction of said house in 1972 until its completion three years later; occupied the ground floor thereof; the demand to vacate was
when the second floor of said house became habitable in 1973, he respondent’s attempt to deprive petitioner’s parents of their rights as co-
allowed petitioner’s parents, Florentino (now deceased) and Susan owner of the said house; that respondent had filed ejectment case as
Parel, to move therein and occupy the second floor while the well as criminal cases against them involving the subject house which
construction of the ground floor was on-going to supervise the were all dismissed. Petitioner asked for the dismissal of the complaint
construction and to safeguard the materials; when the construction of and prayed for damages and attorney’s fees.
the second floor was finished in 1975, respondent allowed petitioner’s
After trial on the merits, the RTC rendered a Decision3 dated December salaries. Thus, the RTC ruled that co-ownership existed between
15, 1993, the dispositive portion of which reads: respondent and petitioner’s father, Florentino.

WHEREFORE, premises considered, the Court hereby declares that The RTC concluded that respondent and petitioner’s father agreed to
the house erected at No. 61 DPS Compound, Baguio City is owned in contribute their money to complete the house; that since the land on
common by the late Florentino Parel and herein plaintiff Simeon which said house was erected has been allocated to petitioner’s father,
Prudencio and as such the plaintiff cannot evict the defendant as heirs the parties had the understanding that once the house is completed,
of the deceased Florentino Parel from said property, nor to recover said petitioner’s father could keep the ground floor while respondent the
premises from herein defendant. second floor; the trial court questioned the fact that it was only after 15
years that respondent asserted his claim of sole ownership of the
Likewise, the plaintiff is ordered to: subject house; respondent failed to disprove that petitioner’s father
contributed his own funds to finance the construction of the house; that
(a) pay the defendant in the total sum of P20,000.00 for moral respondent did not question (1) the fact that it was the deceased
and actual damages; Florentino who administered the construction of the house as well as
the one who supplied the materials; and (2) the fact that the land was in
(b) pay the defendant P20,000.00 in Attorney’s fees Florentino’s possession created the impression that the house indeed is
and P3,300.00 in appearance fees; jointly owned by respondent and Florentino.

(c) pay the costs of this suit.4 The RTC did not give credence to the tax declaration as well as the
several documents showing the City Assessor’s assessment of the
The RTC found the following matters as conclusive: that petitioner’s property all in respondent’s name since tax declarations are not
father was an allocatee of the land on which the subject house was conclusive proof of ownership. It rejected the affidavit executed by
erected, as one of the lowly-paid government employees at that time Florentino declaring the house as owned by respondent saying that the
when then Mayor Luis Lardizabal gave them the chance to construct affidavit should be read in its entirety to determine the purpose of its
their own house on said reservation; that respondent failed to show execution; that it was executed because of an advisement addressed to
proof of any contract, written or oral, express or implied, that the late the late Florentino by the City Treasurer concerning the property’s tax
Florentino and his family stayed on the house not as co-owners but as assessment and Florentino, thought then that it should be the
mere lessees, nor any other proof that would clearly establish his sole respondent who should pay the taxes; and that the affidavit cannot be
ownership of the house; and, that the late Florentino was the one who accepted for being hearsay.
gathered the laborers for the construction of the house and paid their
Aggrieved by such decision, respondent appealed to the CA. In a covering the period 1974 to 1992 sufficient to establish respondent’s
Decision dated March 31, 2000, the CA reversed the trial court and case which constitute at least proof that the holder has a claim of title
declared respondent as the sole owner of the subject house and over the property.
ordered petitioner to surrender possession of the ground floor thereof to
respondent immediately. It also ordered petitioner to pay respondent a Petitioner’s motion for reconsideration was denied in a Resolution dated
monthly rental of P2,000.00 for use or occupancy thereof from April November 28, 2000. 1avvphil.net

1988 until the former actually vacates the same and the sum of
P50,000.00 as attorney’s fees and cost of suit. Hence, the instant petition for review on certiorari with the following
Assignment of Errors:
The CA found as meritorious respondent’s contention that since
petitioner failed to formally offer in evidence any documentary evidence, 1. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN
there is nothing to refute the evidence offered by respondent. It ruled FINDING RESPONDENT AS THE OWNER OF THE BUILDING AT 61
that the trial court’s statement that "defendants’ occupancy of the house FORBES PARK NATIONAL RESERVATION, NEAR DPS
is due to a special power of attorney executed by his parents most COMPOUND, BAGUIO CITY, NOTWITHSTANDING THE FINDING OF
specially the deceased Florentino Parel who is in fact a co-owner of THE REGIONAL TRIAL COURT OF CO-OWNERSHIP BETWEEN THE
said building" is wanting of any concrete evidence on record; that said LATE FLORENTINO PAREL AND RESPONDENT;
power of attorney was never offered, hence, could not be referred to as
petitioner’s evidence to support his claim; that except for the bare 2. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN
testimonies of Candelario Regua, the carpenter-foreman, that it was ORDERING PETITIONER TO SURRENDER POSSESSION OF THE
Florentino who constructed the house and Corazon Garcia, the former GROUND FLOOR OF THE SUBJECT BUILDING TO RESPONDENT;
barangay captain, who testified that the lot was allocated to petitioner’s
father, there was no supporting document which would sufficiently 3. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN
establish factual bases for the trial court’s conclusion; and that the rule ORDERING PETITIONER TO PAY RESPONDENT P2,000.00/MONTH
on offer of evidence is mandatory. FOR USE OR OCCUPANCY OF THE SUBJECT PREMISES FROM
APRIL 1988 UNTIL PETITIONER ACTUALLY VACATES THE SAME;
The CA found the affidavit dated September 24, 1973 of Florentino,
petitioner’s father, stating that he is not the owner of the subject house 4. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN
but respondent, as conclusive proof of respondent’s sole ownership of ORDERING PETITIONER TO PAY TO RESPONDENT P50,000.00
the subject house as it is a declaration made by Florentino against his ATTORNEY’S FEES AND COSTS OF SUIT;
interest. It also found the tax declarations and official receipts
representing payments of real estate taxes of the questioned property
5. THE HONORABLE COURT OF APPEALS ERRED IN DENYING The principal issue for resolution is whether petitioner was able to prove
PETITIONER’S MOTION FOR RECONSIDERATION. 5 by preponderance of evidence that his father was a co-owner of the
subject two-storey residential house.
Petitioner concedes that while his former counsel failed to make a
formal offer of his documentary evidence before the trial court and that The issue raised by petitioner is mainly factual in nature. In general,
the court shall consider no evidence which has not been formally only questions of law are appealable to this Court under Rule 45.
offered, he maintains that the said rule is not absolute, citing the case However, considering that the findings of the RTC and CA are
of Bravo, Jr. v. Borja; 6 that his documentary evidence which were not contradictory, the review of the case is in order.7
formally offered in evidence were marked during the presentation of the
testimony of petitioner’s witnesses and were part of their testimonies; We agree with the CA that respondent had shown sufficient evidence to
that these evidence were part of the memorandum filed by him before support his complaint for recovery of possession of the ground floor of
the trial court on July 12, 1993. the subject house as the exclusive owner thereof. Respondent
presented the affidavit dated September 24, 1973 executed by
Petitioner insists that even in the absence of the documentary Florentino and sworn to before the Assistant City Assessor of Baguio
evidence, his testimony as well as that of his witnesses substantiated City, G.F. Lagasca, which reads:
his claim of co-ownership of the subject house between his late father
and respondent as found by the trial court. I, FLORENTINO PAREL, 42 years of age, employee, and residing at
Forbes Park, Reservation No. 1, after having been sworn to according
Petitioner argues that the CA erred in finding the affidavit of petitioner’s to law depose and say:
father declaring respondent as owner of the subject house as
conclusive proof that respondent is the true and only owner of the That he is the occupant of a residential building located at Forbes Park,
house since the affidavit should be read in its entirety to determine the Reservation No. 1, Baguio City which is the subject of an advicement
purpose for which it was executed. addressed to him emanating from the Office of the City Assessor,
Baguio City, for assessment and declaration for taxation purposes;
Petitioner further contends that since he had established his father’s co-
ownership of the subject house, respondent has no legal right to eject That I am not the owner of the building in question;
him from the property; that he could not be compelled to pay rentals for
residing in the ground floor of the subject house; that respondent should That the building in question is owned by Mr. Simeon B. Prudencio who
bear his own expenses and be adjudged liable for damages which is presently residing at 55 Hyacinth, Roxas District, Quezon City.
petitioner sustained for being constrained to litigate.
Further, affiant say not.8 (Underscoring supplied)
Section 38 of Rule 130 of the Rules of Court provides: that petitioner entered the house against the latter’s will and held that
the remedy of respondent was to file an action for ejectment;12 and even
SEC. 38. Declaration against interest. – The declaration made by a when a complaint for unlawful detainer was filed against petitioner and
person deceased, or unable to testify, against the interest of the his wife also in 1988 which was subsequently dismissed on the ground
declarant, if the fact asserted in the declaration was at the time it was that respondent’s action should be an accion publiciana which is
made so far contrary to the declarant's own interest, that a reasonable beyond the jurisdiction of the Municipal Trial Court.13
man in his position would not have made the declaration unless he
believed it to be true, may be received in evidence against himself or Moreover, the building plan of the residential house dated January 16,
his successors-in-interest and against third persons. 1973 was in the name of respondent and his wife. It was established
during petitioner’s cross-examination that the existing structure of the
The theory under which declarations against interest are received in two-storey house was in accordance with said building plan.14
evidence notwithstanding they are hearsay is that the necessity of the
occasion renders the reception of such evidence advisable and, further Notably, respondent has been religiously paying the real estate
that the reliability of such declaration asserts facts which are against his property taxes on the house declared under his name since 1974.15 In
own pecuniary or moral interest.9 fact, petitioner during his cross-examination admitted that there was no
occasion that they paid the real estate taxes nor declared any portion of
The affiant, Florentino, who died in 1989 was petitioner’s father and had the house in their name.16
adequate knowledge with respect to the subject covered by his
statement. In said affidavit, Florentino categorically declared that while We agree with the CA that while tax receipts and declarations are not
he is the occupant of the residential building, he is not the owner of the incontrovertible evidence of ownership, they constitute at least proof
same as it is owned by respondent who is residing in Quezon City. It is that the holder has a claim of title over the property.17 The house which
safe to presume that he would not have made such declaration unless petitioner claims to be co-owned by his late father had been
he believed it to be true, as it is prejudicial to himself as well as to his consistently declared for taxation purposes in the name of respondent,
children’s interests as his heirs.10 A declaration against interest is the and this fact, taken with the other circumstances above-mentioned,
best evidence which affords the greatest certainty of the facts in inexorably lead to the conclusion that respondent is the sole owner of
dispute.11 Notably, during Florentino’s lifetime, from 1973, the year he the house subject matter of the litigation.
executed said affidavit until 1989, the year of his death, there is no
showing that he had revoked such affidavit even when a criminal Respondent having established his claim of exclusive ownership of the
complaint for trespass to dwelling had been filed by respondent against subject property, it was incumbent upon petitioner to contravene
him (Florentino) and petitioner in 1988 regarding the subject house respondent’s claim. The burden of evidence shifted to petitioner to
which the trial court dismissed due to the absence of evidence showing prove that his father was a co-owner of the subject house.
We held in Jison v. Court of Appeals, to wit:18 Petitioner insists that although his documentary evidence were not
formally offered, the same were marked during the presentation of the
xxx Simply put, he who alleges the affirmative of the issue has the testimonial evidence, thus it can properly be taken cognizance of
burden of proof, and upon the plaintiff in a civil case, the burden of relying in Bravo, Jr. v. Borja.23
proof never parts. However, in the course of trial in a civil case, once
plaintiff makes out a prima facie case in his favor, the duty or the Such reliance is misplaced. In Bravo Jr., we allowed evidence on
burden of evidence shifts to defendant to controvert plaintiff's prima minority by admitting the certified true copy of the birth certificate
facie case, otherwise, a verdict must be returned in favor of plaintiff. attached to a motion for bail even if it was not formally offered in
Moreover, in civil cases, the party having the burden of proof must evidence. This was due to the fact that the birth certificate was properly
produce a preponderance of evidence thereon, with plaintiff having to filed in support of a motion for bail to prove petitioner’s minority which
rely on the strength of his own evidence and not upon the weakness of was never challenged by the prosecution and it already formed part of
the defendant’s. The concept of "preponderance of evidence" refers to the records of the case. The rule referred to in the Bravo case was
evidence which is of greater weight, or more convincing, that which is Section 7 of Rule 133 of the Rules of Court which provides:
offered in opposition to it; at bottom, it means probability of truth.19
Section 7. Evidence on motion.- When a motion is based on facts not
In this case, the records show that although petitioner’s counsel asked appearing of record, the court may hear the matter on affidavits or
that he be allowed to offer his documentary evidence in writing, he, depositions presented by the respective parties, but the court may
however, did not file the same.20 Thus, the CA did not consider the direct that the matter be heard wholly or partly on oral testimony or
documentary evidence presented by petitioner. Section 34 of Rule 132 depositions.
of the Rules of Court provides:
and not Section 34 of Rule 132 of the Rules of Court which is the one
Section 34. Offer of evidence. – The court shall consider no evidence applicable to the present case.
which has not been formally offered. The purpose for which the
evidence is offered must be specified. Even assuming arguendo that the documentary evidence of petitioner
should be considered in his favor, the evidence showing that
A formal offer is necessary because it is the duty of a judge to rest his respondent had filed civil and criminal cases against petitioner which
findings of facts and his judgment only and strictly upon the evidence were dismissed as well as the alleged Special Power of Attorney of
offered by the parties to the suit.21 It is a settled rule that the mere fact petitioner’s parents whereby they authorized petitioner to stay in the
that a particular document is identified and marked as an exhibit does ground floor of the house, did not establish co-ownership of Florentino
not mean that it has thereby already been offered as part of the and respondent of the subject house.
evidence of a party.22
The testimonies of petitioner and his witnesses failed to show that the until petitioner actually vacates the subject house. Although the CA
subject house is co-owned by petitioner’s father and respondent. made no ratiocination as to how it arrived at the amount of P2,000.00
for the monthly rental, we find the same to be a reasonable
Candelario Regua merely testified that he was hired by petitioner’s compensation for the use of the ground floor of the subject house which
father, Florentino, to construct the residential building in 1972;24 that he consists of a living room, a dining room, a kitchen and three bedrooms.
listed the materials to be used for the construction which was The rental value refers to the value as ascertained by proof of what the
purchased by Florentino;25 that he and his men received their salaries property would rent or by evidence of other facts from which the fair
every Saturday and Wednesday from Florentino or his wife, rental value may be determined. 33
respectively;26 that he had not met nor seen respondent during the
whole time the construction was on-going.27 On cross-examination, We likewise affirm the CA’s award of attorney’s fees in favor of
however, he admitted that he cannot tell where the money to buy the respondent. Article 2208 of the Civil Code allows the recovery of
materials used in the construction came from.28 attorney’s fees in cases when the defendant’s act or omission has
compelled the plaintiff to litigate with third persons or to incur expenses
Corazon Garcia merely testified that Florentino started building the to protect his interest 34 and in any other case where the court deems it
house when he was allocated a lot at DPS compound, that she knew just and equitable that attorney’s fees and expenses of litigation should
Florentino constructed the subject house29 and never knew be recovered 35 which are both shown in the instant case.
respondent. 30 The bare allegation that Florentino was allocated a lot is
not sufficient to overcome Florentino’s own affidavit naming respondent WHEREFORE, the decision of the Court of Appeals dated March 31,
as the owner of the subject house. 2000 and its Resolution dated November 28, 2000 are AFFIRMED.

Petitioner himself testified that it was his father who saw the progress of Costs against petitioner.
the construction and purchased the materials to be used; 31 and as a
young boy he would follow-up some deliveries upon order of his SO ORDERED.
father 32 and never saw respondent in the construction site. The fact that
not one of the witnesses saw respondent during the construction of the
said house does not establish that petitioner’s father and respondent
co-owned the house.

We also find that the CA did not err in ordering petitioner to pay
respondent being the sole owner of the subject house a monthly rental
of P2,000.00 from April 1988, the date of the extra-judicial demand,
G.R. No. 137247 August 7, 2006 of Sale Under Pacto de Retro, thus, ownership over the subject land
was consolidated in petitioner.
ANATALIA B. RAMOS, Petitioner,
vs. Respondent Domingo filed an Answer/Opposition 4 to the Petition
SPOUSES DOMINGO A. DIZON and EDNA MEDINA alleging that the SPA was executed for the purpose of enabling Elpidio
DIZON, Respondents. to secure a loan of P150,000.00 by using Domingo’s share in the land
covered by TCT No. 172510 as security. The proceeds of the loan was
DECISION supposed to be used for the construction of a duplex residential house
to be supervised by Elpidio. However, Elpidio obtained a loan
CHICO-NAZARIO, J.: of P350,000.00 and used a substantial portion thereof for his personal
advantage and benefit. As Elpidio had exceeded his authority, Domingo
Before Us is a Petition for Review on Certiorari of the Decision dated 16 claimed that he revoked the SPA through several letters and by a
October 1998 1 and the Resolution dated 13 January 1999, 2 both formal notice of revocation sent by his counsel. As for the pacto de
promulgated by the Court of Appeals in CA-G.R. CV No. 48544, retro sale, Domingo maintains that the same was simulated as Elpidio
affirming the Decision dated 24 January 1995 3 of the trial court in Civil had already obtained a loan totaling P350,000.00 from petitioner as
Case No. 93-66439, a petition for registration of consolidation of evidenced by a Real Estate Mortgage executed by the two of them. In
ownership over real property filed by herein petitioner. any case, he claims that the pacto de retro sale should be treated as an
equitable mortgage which cannot be enforced through a petition for
In the Petition filed before the Regional Trial Court (RTC), Manila, consolidation of ownership.
Branch 45, and docketed as Civil Case No. 93-66439, petitioner alleged
that respondents are the owners of an undivided one-half portion of a Elpidio likewise filed his Answer 5 to the Petition but this was ordered
parcel of land with an area of about 89.35 square meters located in stricken off the record by the trial court judge 6 as it appeared that only
Limay Street, Manuguit Subdivision, Tondo, Manila, as evidenced by respondent Domingo was the defendant and oppositor in the case
Transfer Certificate of Title (TCT) No. 172510 of the Registry of Deeds before the court a quo.
of Manila; that on 1 February 1988, respondent Domingo executed a
Special Power of Attorney (SPA) authorizing Elpidio Domingo to sell The Pre-Trial Order enumerated the parties’ respective exhibits, to wit:
one-half portion of said parcel of land; that Elpidio, acting pursuant to
the provisions of the SPA sold, with a right to repurchase within five PLAINTIFF’S EXHIBITS:
months, one-half of the land covered by TCT No. 172510 to petitioner;
and that respondent Domingo failed to redeem or repurchase the 1. Exh. "A" - Transfer Certificate of Title No. 172510 of the Registry of
disputed land within the five-month period provided for under the Deed Deeds of Manila – admitted;
2. " "B" - Special Power of Attorney – admitted with the qualification that 9. " "6" - Letter of Revocation of the Special Power of Attorney
it was revoked later on; (Reserved Exhibit);

3. " "C" - Deed of Sale under Pacto de Retro – not admitted; 10. " "7" - Transcript of Stenographic Notes in Civil Case No. 90-51838
(Reserved). 7
DEFENDANT’S EXHIBITS:
During the trial of the case, petitioner herself took the witness stand and
1. Exh. "1" - Promissory Note dated April 17, 1988, for the amount testified 8 that on 10 August 1988, Elpidio sold to her, with a right to
of P 150,000.00 executed by Elpidio Dizon in favor of Anatalia Ramos – repurchase, one-half of a parcel of land located in Limay, Tondo,
admitted the contents subject to the presentation of the original Manila, which was owned by respondent Domingo. According to her,
document; Elpidio was then authorized by a SPA executed by respondent
Domingo to enter into said transaction with her. It was agreed upon that
2. " "2" - Promissory Note for P 150,000.00 dated April 17, 1988 the owner (referring to respondent Domingo) had five months within
executed by Elpidio Dizon, mortgagor – admitted. which he could buy back the property from her. Respondent Domingo,
however, failed to exercise his right forcing her to institute the Petition
3. " "3" - Deed of Real Estate Mortgage executed by Elpidio R. Dizon, in for consolidation of ownership before the court a quo.
favor of Anatalia Ramos, Mortgagee, over the property covered by TCT
No. 172510 – admitted; Petitioner presented Elpidio as her second witness and he essentially
reiterated what petitioner had stated in her testimony. After the
4. " "4" - Deed of Sale under Pacto de Retro, which was previously conclusion of Elpidio’s testimony, petitioner offered into evidence
marked as Exh. "C" for the petitioner – admitted; Exhibits "A," "B," and "C," 9 all of which were admitted by the trial court.
With this, petitioner rested her case.
5. " "4-A" - Second page of Exh. "4"
In the same hearing, Elpidio was subjected to cross-examination during
6. " "4-a-1" - Typewritten name of Domingo A. Dizon; which he declared that he owns the two-door residential apartment built
on respondent Domingo’s share in the land covered by TCT No.
7. " "5" - Special Power of Attorney; 172510. The apartment building, however, encroaches upon the other
half portion of the said land which is owned by Elpidio’s brother,
8. " "5-A" - Second page thereof; Ricardo Dizon. Sometime in March 1988, he offered to sell to
respondent Domingo, for
P550,000.00, the partially built two-door structure, as well as Ricardo’s
portion of the land on which a part of said building stood. Respondent PREMISES CONSIDERED, judgment is hereby rendered -
Domingo agreed to Elpidio’s proposal such that he remitted to the latter
the amount of P207,000.00. Later, he tried to collect from respondent 1) declaring the contract of sale entered into by and between plaintiff
Domingo the remainder of the purchase amount. Respondent Domingo [respondent Domingo] and defendant [Elpidio] over that undivided
then suggested that Elpidio secure a loan from the Government Service portion of Lot 27-B-3 in the name of Ricardo Dizon and the building
Insurance System (GSIS) in order to complete the construction of the constructed thereon rescinded:
two-door apartment. Adopting respondent Domingo’s suggestion,
Elpidio secured a loan from petitioner in the initial amount 2) ordering defendant to pay plaintiff as follows –
of P150,000.00 evidenced by a promissory note dated 17 April 1988
and marked as Exhibit "1" for respondent Domingo. In order to secure a) the sum of P207,000.00 with interest thereon at the legal rate from
this loan, petitioner and Elpidio agreed to execute a real estate January 29, 1990 until the same is fully paid;
mortgage over the land embraced by TCT No. 172510. The real estate
mortgage was marked as Exhibit "3." Subsequently, the amount of the b) the sum of P350,000.00 with interest thereon at the rate of 3% a
loan extended by petitioner was increased to P350,000.00 as shown by month from January 29, 1990 until the same is fully paid; and
Exhibit "3-A" – a document entitled "Increase in the Loan Value of Real
Estate Mortgage dated April 24, 1988." Elpidio likewise admitted before c) the sum of P50,000.00 as and by way of attorney’s fees and
the court that the amount of P350,000.00 appearing in the pacto de expenses of litigation.
retro sale dated 10 August 1988 was the same sum of money he earlier
received from petitioner for which the promissory note and Real Estate The reliefs prayed for by the Intervenor is hereby denied.
Mortgage with its subsequent increase in loan value were executed.
Costs against the defendant. 10
It was also revealed during Elpidio’s cross-examination that respondent
Parenthetically, the trial court in Civil Case No. 90-51838 made the
Domingo had previously filed a case for specific performance and/or
following pronouncement with respect to the transaction between
rescission against him, docketed as Civil Case No. 90-51838 and
petitioner and Elpidio:
assigned to RTC Manila, Branch XLI.
Plaintiff’s evidence, however, which is not controverted by the
The subject matter of said action was the purported contract of sale
defendant shows that he has paid defendant the total sum
between respondent Domingo and Elpidio involving the same
of P207,000.00 in cash. In addition, defendant as attorney-in-fact of
apartment building and a portion of Ricardo’s land. The trial court
plaintiff mortgaged plaintiff’s property to Anatalia Ramos for the total
decided in favor of respondent Domingo and disposed of the case in
sum of P350,000.00 which defendant received and appropriated for his
the following manner:
own personal benefit. To secure payment of the same, he sold plaintiff’s The trial court, however, prior to the submission of respondent
property to Anatalia Ramos on a pacto de retro arrangement for the Domingo’s formal offer of evidence, rendered a Decision dated 24
aforesaid sum. While the deed evidencing the sale was denominated as January 1995 holding that the contract between petitioner and Elpidio
a Deed of Sale under Pacto de Retro, in view of the testimony given by was actually one of equitable mortgage and not a pacto de retro sale.
the defendant, the court is inclined to believe that the transaction was According to the trial court –
actually in the nature of an equitable mortgage. Defendant testified that
the consideration of the sale is a loan. Interest payment thereon has As regards the first issue raised, Art. 1602, New Civil Code hereinbelow
been agreed upon as 3% per month. The property remained in the quoted finds significant application.
possession of defendant as attorney-in-fact of plaintiff. 11
"Art. [1602]. The contract shall be presumed to be an equitable
The decision in Civil Case No. 90-51838 was pending appeal at the mortgage, in any of the following case[s]:
time Elpidio took the witness stand. 12
(1) When the price of a sale with right to repurchase is unusually
On 19 December 1994, respondent Domingo’s counsel manifested inadequate;
before the trial court in Civil Case No. 93-66439 that he was no longer
presenting testimonial evidence; instead, he requested that the (2) When the vendor remains in possession as lessee or otherwise;
following documents be marked in evidence:
xxxx
Exhibits "6" - Decision dated March 20, 1992
(6) In any other case where it may be fairly inferred that the real
"6-A" - Dispositive portion thereto intention of the parties is that the transaction shall secure the payment
of a debt or the performance of any other obligation."
"7" - TCT No. 172510 – entry thereon
The testimony of petitioner’s witness Elpidio R. Dizon readily disclosed
"7-A" - Registered owners  13
that prior to the execution of the Deed of Sale under Pacto de Retro, he
had already obtained from Anatalia Ramos the total amount
Also, respondent Domingo’s counsel was given ten days to submit his of P350,000.00 evidenced by Promissory Notes and Real Estate
formal offer of evidence in writing and petitioner was given the same Mortgage. It may be fairly inferred therefrom that the real intention of
period of time to file her comment or opposition thereto after which the the parties is that the transaction leading to execution of the Deed of
case would be submitted for resolution. 14 Sale under Pacto de Retro shall secure the payment of Elpidio Dizon’s
indebtedness covered by the Promissory Notes and Real Estate
Mortgage executed by in favor of Anatalia Ramos. It is also clearly B. AFFIRMING THE TRIAL COURT WHEN IT TOOK COGNIZANCE
shown that the price of the sale with right to repurchase is unusually OF THE SPOUSES DIZON’S EVIDENCE WHICH WAS NOT
inadequate because the improvements erected on the lot belonging to FORMALLY OFFERED.
Domingo Dizon was even offered to the latter for sale by Elpidio Dizon
for P550,000.00. Moreover, the possession of the subject property has C. APPLYING THE RELAXED RULE ENUNCIATED IN VDA. DE
remained with the representative/agent of the owner Domingo Dizon ONATE vs. COURT OF APPEALS CONSIDERING THAT THE
even long after the right of redemption has expired. Under these QUESTIONED EXHIBITS WERE NOT PROPERLY IDENTIFIED AND
circumstances, the court cannot but conclude that the deed in question WITHOUT ANY EXPLANATION OR RECITAL OF THE CONTENTS
is in reality a mortgage. With this conclusion, the court, therefore, holds THEREOF NOR ANY OPPORTUNITY AFFORDED RAMOS TO
the petition as being improper and is dismissed. 15 CROSS-EXAMINE THE ‘WITNESS’ IDENTIFYING THE SAME.

It was only on 31 January 1995 when respondent Domingo filed his D. AFFIRMING THE DECISION OF THE TRIAL COURT WHEN IT
Formal Offer of Exhibits. 16 TOOK COGNIZANCE OF THE SPOUSES DIZON’S EVIDENCE
WITHOUT, HOWEVER, ALLOWING RAMOS TO FILE HER
Petitioner thereafter filed a Notice of Appeal 17 and elevated the case COMMENT/OPPOSITION THERETO.
before the Court of Appeals which affirmed the Decision of the trial
court in the Decision now assailed before us. The dispositive portion of E. AFFIRMING THE DECISION OF THE TRIAL COURT THAT
the Court of Appeals’ ruling provides: ELPIDIO DIZON ADMITTED HAVING SPENT FOR HIS OWN
PERSONAL ADVANTAGE AND BENEFIT THE AMOUNT OF
WHEREFORE, finding no reversible error in the judgment appealed P150,000.00.
from, the same is hereby AFFIRMED. With costs against the
appellant. 18 F. COROLLARY THERETO, FAILING TO RULE ON THE ISSUE AS
TO THE VALIDITY OF THE SPA IN FAVOR OF ELPIDIO DIZON.
Petitioner’s Motion for Reconsideration was likewise resolved in favor of
herein respondents. 19 Hence, this Petition raising the following issues G. HOLDING THAT EXHIBITS ‘3’ AND ‘4’ REVEAL THE REAL INTENT
for our consideration: OF THE PARTIES WAS TO HAVE THE PROPERTY STAND AS
SECURITY FOR THE DEBT, NOT OF THE OWNER DOMINGO DIZO,
A. AFFIRMING THE DECISION OF THE TRIAL COURT IN BUT HIS NEPHEW AND ATTORNEY-IN-FACT \, ELPIDIO DIZON.
DISMISSING THE PETITION ALTHOUGH THE (SPOUSES) DIZON
DID NOT PRESENT ANY EVIDENCE. H. HOLDING THAT THE CONSIDERATION OF THE ‘SALE’ TO
RAMOS WAS UNUSUALLY INADEQUATE RESULTING IN THE
CONCLUSION THAT THE TRANSACTION BETWEEN THE PARTIES Similarly, relied upon by petitioner was our holding in Chua v. Court of
WAS AN EQUITABLE MORTGAGE. 20 Appeals 24 where we declared that:

The Petition mainly raises the questions of (1) whether the Court of The offer of evidence is necessary because it is the duty of the judge to
Appeals erred in applying the rule enunciated in the case of Vda. De rest his findings of facts and his judgment only and strictly upon the
Oñate v. Court of Appeals 21 pertaining to the admission and evidence offered by the parties at the trial. Such offer may be made
consideration of evidence not formally offered, and (2) whether the orally or in writing sufficient to show that the party is ready and willing to
Court of Appeals erred in sustaining the trial court’s ruling that the submit the evidence to the court.
contract between petitioner and Elpidio was actually one of equitable
mortgage and not a pacto de retro sale. Petitioner also assails the Court of Appeals for its alleged improper
application of rule enunciated in Vda. De Oñate, as the requirements
Petitioner argues that it is axiomatic that the court shall not consider laid out in said case, relative to the admission of evidence which was
evidence which has not been formally offered. 22 In this regard, they not formally offered, were not observed in the present case. Petitioner
argue that Exhibits "1" to "7," inclusive of sub-markings, should not insists she was deprived of due process as she no opportunity to file
have been considered by the trial court in its Decision considering that her objection to or comment on respondent Domingo’s exhibits.
the same were not formally offered in evidence. To support this Moreover, she was denied the occasion to cross examine the witness
assertion, petitioner quotes from our following pronouncement in regarding their exhibits.
Interpacific Transit, Inc. v. Aviles 23:
We are not convinced.
It is instructive at this point to make a distinction between identification
of documentary evidence and its formal offer as an exhibit. The first is The applicable provision of the Rules of Court on this matter is Sec. 34,
done in the course of the trial and is accompanied by the marking of the Rule 132. It reads:
evidence as an exhibit. The second is done only when the party rests
its case and not before. The mere fact that a particular document is SEC. 34. Offer of evidence. – The court shall consider no evidence
identified and marked as an exhibit does not mean it will be or has been which has not been formally offered. The purpose for which the
offered as part of the evidence of the party. The party may decide to evidence is offered must be specified.
formally offer it if it believes this will advance its cause, and then again it
may decide not to do so at all. In the latter event, the trial court is, under
Rule 132, Section 35 (sic) not authorized to consider it.
The case of Vda. De Oñate, which was relied upon by the Court of records. Further, Elpidio himself explained the contents of these
Appeals, reiterated our previous rulings in People v. Napat-a 25 and exhibits when he was interrogated by respondents’ counsel as follows:
People v. Mate 26 relative to the admission and consideration of exhibits
which were not formally offered during the trial. We declared in Vda. De Q: The initial amount you secured from Anatalia Ramos was in the
Oñate 27 that – amount of P150,000.00 covered by this Promissory Note executed by
you, is it not?
From the foregoing provision, it is clear that for evidence to be
considered, the same must be formally offered. Corollarily, the mere A: I cannot recall this Promissory Note but I was able to get a loan from
fact that a particular document to identified and marked as an exhibit her in the amount of P150,000.00.
does not mean that is has already been offered as part of the evidence
of a party. In Interpacific Transit, Inc. v. Aviles [186 SCRA 385], we had COURT:
the occasion to make a distinction between identification of
documentary evidence and its formal offer as an exhibit. We said that You examine the Promissory Note…
the first is done in the course of the trial and is accompanied by the
marking of the evidence as an exhibit while the second is done only xxxx
when the party rests its case and not before. A party, therefore, may opt
to formally offer his evidence if he believes that it will advance his cause ATTY. RUIZ:
or not to do so at all. In the event he chooses to do the latter, the trial
court is not authorized by the Rules to consider the same. May we ask that original copy be shown to the witness, Your Honor.

However, in People v. Napat-a [179 SCRA 403] citing People v. Mate ATTY. DAVID:
[103 SCRA 404], we relaxed the foregoing rule and allowed evidence
Your Honor, this was the subject of the stipulation during the pre-trial
not formally offered to be admitted and considered by the trial
conference.
court provided the following requirements are present, viz: first, the
same must have been duly identified by testimony duly recorded and,
xxxx
second, the same must have been incorporated in the records of the
case. (Underscoring supplied.) ATTY. DAVID:
In this case, we find and so rule that these requirements have been Q: Is it correct that even before August 10, 1988 you have already
satisfied. The exhibits in question were presented and marked during obtained from Anatalia Ramos the total amount of P350,000.00 covered
the pre-trial of the case thus, they have been incorporated into the by Promissory Notes and the Real Estate Mortgage, is it not?
WITNESS: WITNESS:

A: Yes, sir. Yes, Your Honor. 28

xxxx To our mind, this exchange between Elpidio and respondents’ counsel
sufficiently described the contents of the above-mentioned exhibits
ATTY. DAVID: presented by respondents particularly the promissory notes and Deed
of Real Estate Mortgage.
Q: Is it correct, therefore, Mr. Dizon, that the total amount
of P350,000.00 that you received all in all from Anatalia Ramos as of Nor can petitioner be heard to complain now that she was deprived of
May 4, 1988 as evidenced by this document Exhibit "3-A" is the same the opportunity to cross-examine Elpidio. It bears stressing that
amount of P350,000.00 reflected in the Pacto de Retro Sale dated respondents’ Exhibits were presented during Elpidio’s cross-
August 10, 1988? examination and in the presence of petitioner’s counsel. In fact, Elpidio
was even subjected to an immediate re-direct examination by
WITNESS: petitioner’s counsel. Although the questions posed to him at his re-
direct examination pertained solely to Civil Case No. 90-51838 still, the
A: Yes, sir. opportunity was there for petitioner’s counsel to question him as
regards the other exhibits of respondents. The fact that petitioner’s
Q: Is it not also a fact, Mr. Dizon, that the property subject of this case, lawyer opted not to conduct a more thorough re-direct examination was
is likewise the subject of another case in Civil Case No. 90-51838 which his own choice. Indeed, it may even be a part of his tactic on this case
is a complaint for Specific Performance and/or Rescission filed by but it certainly does not amount to a deprivation of due process as now
Domingo Dizon against you? claimed by petitioner.
xxxx But what further defeats petitioner’s cause on this issue is that
respondents’ exhibits were marked and admitted during the pre-trial
WITNESS: stage as shown by the Pre-Trial Order quoted earlier. And so, we
reiterate here our ruling in Marmont Resort Hotel Enterprises v.
A: It’s on appeal. Guiang, 29 to wit:
COURT: Both the trial and appellate courts held that the first and second
Memoranda of Agreement are not properly considered as forming part
Yes, there is a pending case but it’s now on appeal?
of the record of this case, because neither had been formally presented After all, the pre-trial forms part of the proceedings and matters dealt
and offered in evidence at the trial of Civil Case No. 2896-C. The record with therein may not be brushed aside in the process of decision
shows, however, as noted earlier, that at the pre-trial conference held making. Otherwise, the real essence of compulsory pre-trial would be
on 2 October 1980, both petitioner Marmont and respondent spouses inconsequential and worthless. 30
had agreed upon a stipulation of facts and issues recognizing the
existence of those same two (2) agreements. Such stipulation of facts Anent the second issue, petitioner maintains that the SPA authorized
constitutes a judicial admission, the veracity of which requires no further Elpidio to sell or negotiate the sale of the property in dispute. Although
proof and which may be controverted only upon a clear showing that said authority was later on revoked, it was nevertheless subsisting
such stipulation had been entered into through "palpable mistake." On when she and Elpidio agreed on the pacto de retro sale or long after the
this point, Section 2, Rule 129 of the Revised Rules of Court provides: amount of P350,000.00 was received and consumed for the
construction of the two-door apartment. Petitioner further assails the
"Section 2. Judicial Admissions.-Admission made by the parties in the Court of Appeals’ conclusion that the selling price of the disputed
pleadings, or in the course of the trial or other proceedings do not property was unusually inadequate as this finding is not supported by
require proof and cannot be contradicted unless previously shown to any proof.
have been made through palpable mistake."
We reject petitioner’s submission.
There has been no showing and respondent spouses do not claim that
"palpable mistake" had intervened here, in respect of the formulation of Under Article 1602 of the Civil Code, the contract of sale will be
the facts stipulated by the parties at the pre-trial conference. Absent presumed to be an equitable mortgage in any of the following cases:
any such showing, that stipulation of facts is incontrovertible, and may
be relied upon by the courts. Respondent spouses are estopped from (1) When the price of a sale with right to repurchase is unusually
raising as an issue in this case the existence and admissibility in inadequate;
evidence of both the first and second Memoranda of Agreement which,
having been marked as exhibits during pre-trial, properly form part of (2) When the vendor remains in possession as lessee or otherwise;
the record of this case, event though not formally offered in evidence
after trial. (Emphasis supplied.) (3) When upon or after the expiration of the right to repurchase another
instrument extending the period of redemption or granting a new period
Therefore, notwithstanding the fact that respondents’ exhibits were not is executed;
formally offered prior to the rendition of the Decision in Civil Case No.
93-66439 by the court a quo, the trial court judge committed no error (4) When the purchaser retains for himself a part of the purchase price;
when he admitted and considered them in the resolution of the case.
(5) When the vendor binds himself to pay the taxes on the things sold; position that the pacto de retro sale was but a security for the loans
extended by petitioner.
(6) In any other case where it may be fairly inferred that the real
intention of the parties is that the transaction shall secure the payment WHEREFORE, premises considered, the present Petition
of a debt or the performance of any other obligation. is DENIED and the Court of Appeals’ Decision dated 16 October 1998
and Resolution dated 13 January 1999 in CA-G.R. CV No. 48544,
In the case at bar, it was disclosed by Elpidio that up to the time when affirming the 24 January 1995 Decision of the Manila Regional Trial
he took the witness stand on 20 September 1994, he still maintained Court, Branch 45 in Civil Case No. 93-66439 are AFFIRMED. Costs
possession of the two-door apartment and that he was still collecting against petitioner.
rent from the tenant occupying one of the units. This despite the lapse
of a considerable length of time from 7 January 1989 – the date when SO ORDERED.
the five-month repurchase period stipulated in the pacto de retro sale
was supposed to have lapsed. Had the agreement between petitioner
and Elpidio been a pacto de retro sale, we fail to see any logic in her
allowing Elpidio’s continued possession of the structure and collection
of the rent payments therefrom over such a long period of time. As the
essence of a pacto de retro sale is that title and ownership of the
property sold are immediately bestowed upon the vendee a retro,
subject to the resolutory condition of repurchase by the vendor a retro
within the agreed period, 31 petitioner should have immediately enforced
her right to the rental payments. Failure on her part to do so casts doubt
as to the true nature of the transaction she entered into with Elpidio.

Moreover, it does not escape our attention that according to Elpidio, the
amount of P350,000.00 stated in the Deed of Sale Under Pacto de
Retro is the same amount as that covered by the Real Estate Mortgage
and the two promissory notes signed by him. There was therefore no
separate consideration received by him from the execution of the pacto
de retro sale apart from the proceeds of the earlier loans he obtained
from petitioner. This undoubtedly gives credence to respondents’
 Carolyn Zaragoza, of legal age, the private complainant, testified
among others that: She met the accused through their common friend,
Paul Dy while they were having some business negotiations (Witness
identified the accused through his pictures which were attached to his
G.R. NO. 145006 August 30, 2006 bail bond, as said accused failed to appear in court despite notice, said
pictures were marked as Exhs. "J", "J-1" and J-2"); that during her first
DAVID TAN, Petitioner, meeting with the accused, they had a loan transaction which was
vs. followed by another loan transaction on June 27, 1994 in the amount
PEOPLE OF THE PHILIPPINES and CAROLYN of P1 Million, and for which she gave the accused a Metrobank Check
ZARAGOZA, Respondents. No. 001430 in the amount of P950,000.00 (Exhs. "K" & "K-1"), having
deduced the 5% interest from said loan. Thereafter, the accused issued
DECISION
several PCIBANK Checks, among which are numbered as follows: x x x
When all these checks were deposited at her account with the City
AUSTRIA-MARTINEZ, J.:
Trust Bank, Sucat (Parañaque) Branch, they all bounced for reason
Before the Court is a Petition for Review on Certiorari filed by accused "Account Closed." She thereafter tried to contact the accused but he
David Tan (petitioner) assailing the Decision1 of the Court of Appeals (accused) refused to talk to her. The accused was sent by her lawyer a
(CA) dated February 11, 2000, and the Resolution dated September 4, formal demand through registered mail, for him to pay in cash the
2000. aforementioned bounced/dishonored checks but to no avail. In filing this
case she engaged the services of a lawyer for P50,000.00 acceptance
The antecedent facts as accurately narrated by the MTC in its Decision fee and P1,000.00 per appearance in court; that said accused should
are as follows: pay the corresponding interest of P50,000.00 which had become due
since November 1994 other than the principal obligation.
David Tan, the accused herein, stands charged with the crime of
Violation of Batas Pambansa Bilang 22 (6 counts) in six (6) separate Despite ample opportunity given to the accused to present its evidence,
informations which read as follows: it still failed to do so; hence, the court in its Order dated March 18,
1997, the case was deemed submitted for decision.
xxxxxxxxx
On May 27, 1997, the MTC rendered judgment, to wit:
Records show that the accused, assisted by counsel, entered a plea of
Not Guilty, upon being arraigned. Thereafter, these cases were set for IN VIEW OF THE FOREGOING, this Court finds the accused David
trial on the merits, which cases were consolidated and tried jointly. Tan guilty beyond reasonable doubt of the crime of Violation of Batas
Pambansa Blg. 22 in six (6) counts, and hereby sentences said IN VIEW OF THE FOREGOING, this Court finds the accused David
accused to an imprisonment of six (6) months for each case, and to Tan guilty beyond reasonable doubt of the crime of Violation of Batas
indemnify the private complainant in the amount of P600,000.00 Pambansa Bilang 22 in six (6) counts, and hereby sentences said
representing the total amount of the subject checks, plus interest accused to an imprisonment of six (6) months for each case, and to
thereon in the amount of P50,000.00 and attorney’s fees in the amount indemnify the private complainant in the amount of P600,000.00
of P20,000.00 and to pay the costs. representing the total amount of the subject checks, plus interest
thereon at the legal rate from the filing of the Information until fully paid
SO ORDERED.2 and to pay the costs.

Petitioner filed a motion for reconsideration with the MTC wherein he In view of the foregoing the court a quo is directed to issue a Warrant of
denied receipt of the demand letter3 dated October 30, 1995 marked as Arrest against the accused which need not be returned until he has
Exhibit "R" and alleged that said evidence was not included in the been arrested.
formal offer of evidence. Said motion for reconsideration was denied.
He then appealed the case to the Regional Trial Court of Parañaque, SO ORDERED.5
Branch 258 (RTC), with the following assignment of errors:
Petitioner moved for reconsideration of the foregoing Decision but per
1. The trial court gravely erred in finding appellant guilty beyond Order dated July 5, 1999, the RTC denied the same.
reasonable doubt of the crime of Violation of B.P. 22 on six (6) courts
(sic); A Petition for Review was then filed by petitioner with the CA, alleging
as follows:
2. The trial court gravely erred in ordering appellant to indemnify the
private complainant the value of the six (6) checks in question, plus the With due respect to the Honorable Regional Trial Court, Branch 258,
sum of P50,000.00 interest and P20,000.00 attorney’s fees.4 Parañaque City, it committed reversible error, thus:

On April 16, 1999, the RTC promulgated its Decision, the dispositive 1. In affirming the trial court’s verdict of conviction despite the
portion of which reads as follows: prosecution’s failure to prove the guilt of herein petitioner/accused
beyond reasonable doubt.
WHEREFORE, the Decision of the Court a quo is MODIFIED to read,
thus: 2. In affirming the trial court’s verdict awarding damages to private
respondent.
3. In ordering the trial court to issue warrant of arrest against petitioner The CA denied said motion for reconsideration in its Resolution8 dated
despite the fact that its verdict affirming the trial court’s decision is not September 4, 2000 holding that since said issue was never raised
yet final and executory.6 before the trial court nor before the RTC, the same can no longer be
considered by the reviewing court.
The CA dismissed the appeal and affirmed the RTC Decision, ruling
that petitioner’s guilt had indeed been proven beyond reasonable doubt Hence, this petition where it is alleged that:
since the existence of the element that he had knowledge of the
insufficiency of funds in or credit with the drawee bank at the time he I. THE APPELLATE COURT ERRED IN AFFIRMING IN TOTO THE
issued the checks is established by the demand letter dated October LOWER COURT’S VERDICT OF CONVICTION DESPITE THE
30, 1995 notifying him of the dishonor of the checks he issued. The CA PROSECUTION’S FAILURE TO PROVE THE GUILT OF
further pointed out that the RTC had already deleted the MTC’s award PETITIONER/ACCUSED BEYOND REASONABLE DOUBT MUCH
for interest in the amount of P50,000.00 and attorney’s fees, hence, on MORE SO CONSIDERING THAT THE PROOF OF NOTICE OF
said issue, there is no error that needs to be corrected. As to the order DISHONOR HAS NOT BEEN SATISFACTORILY PROVEN OR IS
for the issuance of a warrant of arrest, the CA held that "[i]t is a BASED ON EVIDENCE NOT PROPERLY IDENTIFIED AND
constitutional mandate that once accused is convicted in the Regional OFFERED.
Trial Court, bail becomes a matter of discretion upon the court and no
longer a matter of right."7 xxxxxxxxx

Petitioner filed a motion for reconsideration where he argued that no II. THE APPELLATE COURT ERRED IN AFFIRMING THE TRIAL
evidentiary weight should be given to the demand letter dated October COURT’S VERDICT AWARDING DAMAGES TO PRIVATE
30, 1995 because, although included in the formal offer of evidence RESPONDENT.
by the prosecution, it was not presented during trial for proper
identification, hence, it should not have been admitted into xxxxxxxxx
evidence even if the defense failed to object to the formal offer
thereof. Petitioner insisted that the prosecution did not have proof of III. THE APPELLATE COURT ERRED IN SUSTAINING THE
notice of dishonor, thus, petitioner’s guilt had not been proven beyond REGIONAL TRIAL COURT WHICH ORDERED AN INFERIOR COURT
reasonable doubt. TO ISSUE A WARRANT OF ARREST AGAINST PETITIONER
DESPITE THE FACT THAT ITS VERDICT AFFIRMING THE
INFERIOR COURT’S DECISION IS NOT YET FINAL AND
EXECUTORY.9
The petition is imbued with merit. sufficient to cover the amount of the checks issued by the accused as
well as the domestic current account of the accused and we have here
With regard to the first assignment of error, petitioner reiterates his the documents, the ledger of the accused which would prove that the
argument that no evidentiary weight should be given to the demand accounts of the accused, both savings and current were not sufficient to
letter dated October 30, 1995 because, although included in the cover the checks issued by the accused to the complainant?12
formal offer of evidence by the prosecution, it was not presented
during trial for proper identification and should not have been The only other prosecution witness is private complainant Carolyn
admitted into evidence even if the defense failed to object to the Zaragosa (Zaragosa), whose testimony is to the effect that after the
formal offer thereof. checks bounced, she tried to call up petitioner but the latter refused to
talk to her, thus, she was constrained to obtain the services of a
It is quite true that this Court has ruled that objection to the admissibility lawyer. Nowhere in the transcript of stenographic notes[13] for the
of evidence, if not made at the time such evidence is offered, shall be hearing held on December 17, 1996, did Zaragosa ever mention the
deemed waived.10 However, in all cases where said rule had been existence of a demand letter dated October 30, 1995. After the direct
applied, the assailed testimonial or object evidence had been duly testimony of Zaragosa where the exhibits marked were only up to
presented during the course of the trial. Exhibits "Q" and "Q-1," all the subsequent hearings did not push
through. Zaragosa was never cross-examined. The defense, despite
In the present case, a judicious examination of the entire record shows numerous resetting of hearing dates set for presentation of its evidence,
that, indeed, the demand letter dated October 30, 1995 failed to appear during those hearings, prompting the MTC to deem the
was never presented during the course of the trial. case submitted for decision without evidence for the defense.

The transcript of stenographic notes11 for the hearing held on Since there were no other hearings held, it was impossible for the
September 26, 1996 shows that the presentation of the testimony of the prosecution to have presented and marked as exhibit, the demand
bank representative testifying for the prosecution was dispensed with letter dated October 30, 1995.
since the opposing parties stipulated that the testimony of a bank
representative would prove the following: The very first time said demand letter was ever mentioned or appeared
in the record was in the formal offer of evidence, supposedly marked as
x x x the witness will be testifying on the points that at the time the six Exhibit "R." How said demand letter came to be marked as Exhibit "R"
checks were presented for payment, the first two checks were and inserted into the record truly mystifies this Court. Such
dishonored for being "Drawn Against Insufficient Funds" while the third circumstance, to say the least, is tainted with irregularity because,
up to the sixth checks were dishonored for reason of "account closed" as previously mentioned, such document was never presented or
and per records of the bank, the account of the accused was not identified in any of the hearings. As held in Pigao v. Rabanillo,14 for
documentary evidence to be considered by the court, it must have bank for the payment of the check in full upon its presentment; and (3)
been presented during trial and formally offered. subsequent dishonor of the check by the drawee bank for insufficiency
of funds or credit, or dishonor for the same reason had not the drawer,
Although petitioner admits that they failed to submit any opposition to without any valid cause, ordered the bank to stop payment.15
the formal offer of evidence, he nevertheless raised the issue of the
non-presentation of the demand letter in his motion for reconsideration In Ongson v. People,16 the Court expounded on the kind of evidence
filed with the MTC. Evidently, the CA made a mistake in stating that necessary to prove the second element, to wit:
petitioner only raised for the first time on appeal, the issue on the
admission of the demand letter into evidence. As to the second element, we have held that knowledge involves a
state of mind which is difficult to establish, thus the statute itself creates
Thus, in view of the foregoing significant circumstances, it would be a prima facie presumption that the drawer had knowledge of the
unreasonable to apply to the present case the general rule that insufficiency of his funds in or credit with the bank at the time of the
objection to the admissibility of evidence, if not made at the time such issuance and on the check's presentment for payment if he fails to pay
evidence is offered, shall be deemed waived. As the demand letter was the amount of the check within five (5) banking days from notice of
never presented during the course of the trial, petitioner was never dishonor.
alerted to its possible inclusion in the prosecution’s formal offer of
evidence. Verily, therefore, petitioner’s failure to timely object to this Sec. 2 of B.P. 22 provides:
piece of evidence (the demand letter) is excusable. The prosecution
should not benefit from the anomalous inclusion of the demand letter in SEC. 2. Evidence of knowledge of insufficient funds. - The making,
the records. Said evidence should be deemed inadmissible and should drawing and issuance of a check payment of which is refused by the
not have been considered by the MTC in arriving at its judgment. drawee because of insufficient funds in or credit with such bank, when
presented within ninety (90) days from the date of the check, shall
With the exclusion of the demand letter from the body of evidence be prima facie evidence of knowledge of such insufficiency of funds or
presented by the prosecution, the next question is, would the remaining credit unless such maker or drawer pays the holder thereof the amount
evidence still be sufficient to prove petitioner’s guilt beyond reasonable due thereon, or makes arrangements for payment in full by the drawee
doubt? The answer must be in the negative. of such check within five (5) banking days after receiving notice that
such check has not been paid by the drawee.
The elements of violation of Batas Pambansa Blg. 22 (B.P. Blg. 22) are:
(1) making, drawing, and issuance of any check to apply on account or For this presumption to arise, the prosecution must prove the
for value; (2) knowledge of the maker, drawer, or issuer that at the time following: (a) the check is presented within ninety (90) days from the
of issue he does not have sufficient funds in or credit with the drawee date of the check; (b) the drawer or maker of the check receives
notice that such check has not been paid by the drawee; and (c) the provides that "[i]n civil cases, the party having the burden of proof must
drawer or maker of the check fails to pay the holder of the check the establish his case by a preponderance of evidence." Here, private
amount due thereon, or make arrangements for payment in full within complainant successfully proved, by preponderance of evidence, that
five (5) banking days after receiving notice that such check has not despite all her efforts to collect from petitioner, he failed to pay his
been paid by the drawee. In other words, the presumption is brought indebtedness. Thus, the trial court correctly ordered petitioner to pay
into existence only after it is proved that the issuer had received a private complainant civil indemnity.
notice of dishonor and that within five days from receipt thereof,
he failed to pay the amount of the check or to make arrangements Petitioner’s argument that private complainant should not have been
for its payment. The presumption or prima facie evidence as awarded civil indemnity because she failed to exhaust non-judicial
provided in this section cannot arise, if such notice of nonpayment means before resorting to the filing of the criminal case should not be
by the drawee bank is not sent to the maker or drawer, or if there given any consideration as the evidence shows that private complainant
is no proof as to when such notice was received by the drawer, indeed tried to demand payment from petitioner out of court but all to no
since there would simply be no way of reckoning the crucial 5-day avail.
period. Furthermore, the notice of dishonor must be in writing; a
verbal notice is not enough.17 (Emphasis supplied) The RTC was correct in awarding interest on the principal amount at
the legal rate which should be 12% per annum from the filing of the
Since the prosecution failed to present evidence during trial that a Information until fully paid, as this is in keeping with the Court’s ruling
written demand had been sent to and received by petitioner, the second in Trade & Investment Development Corporation of the Philippines v.
element, that the accused had knowledge of the insufficiency of funds, Roblett Industrial Construction Corporation,19 where the Court reiterated
had not been established. As stated in Dico v. Court of Appeals,18 "[a] that:
notice of dishonor received by the maker or drawer of the check is thus
indispensable before a conviction can ensue. x x x. The lack of a written I. When an obligation, regardless of its source, i.e., law, contracts,
notice is fatal for the prosecution." Hence, petitioner’s conviction for the quasi-contracts, delicts or quasi-delicts is breached, the contravenor
crime of violation of B.P. Blg. 22 must be set aside. can be held liable for damages. The provisions under Title XVIII on
'Damages' of the Civil Code govern in determining the measure of
However, the CA correctly affirmed the RTC’s award of the legal rate of recoverable damages.
interest on the principal amount of P600,000.00. It should be borne in
mind that Section 1, Rule 111 of the Rules of Court provides that II. With regard particularly to an award of interest in the concept of
"[w]hen a criminal action is instituted, the civil action for the recovery of actual and compensatory damages, the rate of interest, as well as the
civil liability arising from the offense charged shall be deemed instituted accrual thereof, is imposed, as follows:
with the criminal action x x x." Section 1, Rule 133 of the same Rules
1. When the obligation is breached, and it consists in the payment of a
sum of money, i.e., a loan or forbearance of money, the interest due
should be that which may have been stipulated in writing. Furthermore,
the interest due shall itself earn legal interest from the time it is judicially
demanded. In the absence of stipulation, the rate of interest shall be G.R. No. 140944             April 30, 2008
12% per annum to be computed from default, i.e., from judicial or
extrajudicial demand under and subject to the provisions of Article 1169 RAFAEL ARSENIO S. DIZON, in his capacity as the Judicial
of the Civil Code. Administrator of the Estate of the deceased JOSE P.
FERNANDEZ, petitioner,
x x x x x x x x x (Underscoring Ours) vs.
COURT OF TAX APPEALS and COMMISSIONER OF INTERNAL
Petitioner also keeps harping on the issue of the MTC’s error of REVENUE, respondents.
awarding attorney’s fees, but as correctly pointed out by the CA, the
RTC had already deleted such award for attorney’s fees. There is, DECISION
therefore, no longer any need to discuss such aspect.
NACHURA, J.:
WHEREFORE, the petition is PARTLY GRANTED. Petitioner
is ACQUITTED of the crime of Violation of B.P. Blg. 22. However, Before this Court is a Petition for Review on Certiorari1 under Rule 45 of
petitioner is ORDERED to PAY private complainant Carolyn Zaragosa the Rules of Civil Procedure seeking the reversal of the Court of
the amount of P600,000.00 representing the total amount of the subject Appeals (CA) Decision2 dated April 30, 1999 which affirmed the
checks, plus 12% interest thereon from the filing of the Information until Decision3 of the Court of Tax Appeals (CTA) dated June 17, 1997.4
fully paid and to pay the costs.
The Facts
SO ORDERED.
On November 7, 1987, Jose P. Fernandez (Jose) died. Thereafter, a
petition for the probate of his will5 was filed with Branch 51 of the
Regional Trial Court (RTC) of Manila (probate court).[6] The probate
court then appointed retired Supreme Court Justice Arsenio P. Dizon
(Justice Dizon) and petitioner, Atty. Rafael Arsenio P. Dizon (petitioner)
as Special and Assistant Special Administrator, respectively, of the
Estate of Jose (Estate). In a letter7 dated October 13, 1988, Justice
Dizon informed respondent Commissioner of the Bureau of Internal Estate Tax Due NIL.11
Revenue (BIR) of the special proceedings for the Estate.
On April 27, 1990, BIR Regional Director for San Pablo City, Osmundo
Petitioner alleged that several requests for extension of the period to file G. Umali issued Certification Nos. 2052[12] and 2053[13] stating that the
the required estate tax return were granted by the BIR since the assets taxes due on the transfer of real and personal properties[14] of Jose had
of the estate, as well as the claims against it, had yet to be collated, been fully paid and said properties may be transferred to his heirs.
determined and identified. Thus, in a letter8 dated March 14, 1990, Sometime in August 1990, Justice Dizon passed away. Thus, on
Justice Dizon authorized Atty. Jesus M. Gonzales (Atty. Gonzales) to October 22, 1990, the probate court appointed petitioner as the
sign and file on behalf of the Estate the required estate tax return and to administrator of the Estate.15
represent the same in securing a Certificate of Tax Clearance.
Eventually, on April 17, 1990, Atty. Gonzales wrote a letter9 addressed Petitioner requested the probate court's authority to sell several
to the BIR Regional Director for San Pablo City and filed the estate tax properties forming part of the Estate, for the purpose of paying its
return10 with the same BIR Regional Office, showing therein a NIL creditors, namely: Equitable Banking Corporation (P19,756,428.31),
estate tax liability, computed as follows: Banque de L'Indochine et. de Suez (US$4,828,905.90 as of January
31, 1988), Manila Banking Corporation (P84,199,160.46 as of February
COMPUTATION OF TAX 28, 1989) and State Investment House, Inc. (P6,280,006.21). Petitioner
Conjugal Real Property (Sch. 1) P10,855,020.00 manifested that Manila Bank, a major creditor of the Estate was not
included, as it did not file a claim with the probate court since it had
Conjugal Personal Property 3,460,591.34
security over several real estate properties forming part of the Estate.16
(Sch.2)
Taxable Transfer (Sch. 3) However, on November 26, 1991, the Assistant Commissioner for
Collection of the BIR, Themistocles Montalban, issued Estate Tax
Gross Conjugal Estate 14,315,611.34 Assessment Notice No. FAS-E-87-91-003269,17 demanding the
Less: Deductions (Sch. 4) 187,822,576.06 payment of P66,973,985.40 as deficiency estate tax, itemized as
Net Conjugal Estate NIL   follows:
Less: Share of Surviving Spouse NIL.  
Deficiency Estate Tax- 1987
Net Share in Conjugal Estate NIL  
Estate tax P31,868,414.48
xxx
25% surcharge- late filing 7,967,103.62
Net Taxable Estate NIL.  
 late payment 7,967,103.62 Dizon addressed to the Commissioner of
Internal Revenue informing the latter of the
Interest 19,121,048.68 special proceedings for the settlement of the
estate (p. 126, BIR records);
Compromise-non filing 25,000.00
2. Petition for the probate of the will and issuance "B" & "B-1"
non payment 25,000.00 of letter of administration filed with the
Regional Trial Court (RTC) of Manila,
no notice of death 15.00 docketed as Sp. Proc. No. 87-42980 (pp. 107-
108, BIR records);
no CPA Certificate 300.00
3. Pleading entitled "Compliance" filed with the "C"
Total amount due & collectible P66,973,985.4018 probate Court submitting the final inventory of
all the properties of the deceased (p. 106, BIR
In his letter19 dated December 12, 1991, Atty. Gonzales moved for the records);
reconsideration of the said estate tax assessment. However, in her 4. Attachment to Exh. "C" which is the detailed "C-1" to "C-17"
letter20 dated April 12, 1994, the BIR Commissioner denied the request and complete listing of the properties of the
and reiterated that the estate is liable for the payment deceased (pp. 89-105, BIR rec.);
of P66,973,985.40 as deficiency estate tax. On May 3, 1994, petitioner 5. Claims against the estate filed by Equitable "D" to "D-24"
received the letter of denial. On June 2, 1994, petitioner filed a petition Banking Corp. with the probate Court in the
for review21 before respondent CTA. Trial on the merits ensued. amount of P19,756,428.31 as of March 31,
1988, together with the Annexes to the claim
As found by the CTA, the respective parties presented the following (pp. 64-88, BIR records);
pieces of evidence, to wit:
6. Claim filed by Banque de L' Indochine et de "E" to "E-3"
In the hearings conducted, petitioner did not present testimonial Suez with the probate Court in the amount of
evidence but merely documentary evidence consisting of the US $4,828,905.90 as of January 31, 1988 (pp.
following: 262-265, BIR records);
7. Claim of the Manila Banking Corporation "F" to "F-3"
Nature of Document (sic) Exhibits (MBC) which as of November 7, 1987
amounts to P65,158,023.54, but recomputed
1. Letter dated October 13, 1988 from Arsenio P. "A" as of February 28, 1989 at a total amount
 of P84,199,160.46; together with the demand Administration issued by RTC Manila, Branch
letter from MBC's lawyer (pp. 194-197, BIR 51, in Sp. Proc. No. 87-42980 appointing Atty.
records); Rafael S. Dizon as Judicial Administrator of
8. Demand letter of Manila Banking Corporation "G" & "G-1" the estate of Jose P. Fernandez; (p. 102, CTA
prepared by Asedillo, Ramos and Associates records) and
Law Offices addressed to Fernandez 14. Certification of Payment of estate taxes Nos. "M" to "M-5"
Hermanos, Inc., represented by Jose P. 2052 and 2053, both dated April 27, 1990,
Fernandez, as mortgagors, in the total amount issued by the Office of the Regional Director,
of P240,479,693.17 as of February 28, 1989 Revenue Region No. 4-C, San Pablo City, with
(pp. 186-187, BIR records); attachments (pp. 103-104, CTA records.).
9. Claim of State Investment House, Inc. filed "H" to "H-16"
with the RTC, Branch VII of Manila, docketed Respondent's [BIR] counsel presented on June 26, 1995 one
as Civil Case No. 86-38599 entitled "State witness in the person of Alberto Enriquez, who was one of
Investment House, Inc., Plaintiff, versus the revenue examiners who conducted the investigation on
Maritime Company Overseas, Inc. and/or Jose the estate tax case of the late Jose P. Fernandez. In the
P. Fernandez, Defendants," (pp. 200-215, BIR course of the direct examination of the witness, he identified
records); the following:
10. Letter dated March 14, 1990 of Arsenio P. "I"
Documents/Signatures BIR Record
Dizon addressed to Atty. Jesus M. Gonzales,
(p. 184, BIR records);
1. Estate Tax Return prepared by the BIR; p. 138
11. Letter dated April 17, 1990 from J.M. Gonzales "J"
2. Signatures of Ma. Anabella Abuloc and Alberto -do-
addressed to the Regional Director of BIR in
Enriquez, Jr. appearing at the lower Portion of
San Pablo City (p. 183, BIR records);
Exh. "1";
12. Estate Tax Return filed by the estate of the "K" to "K-5"
3. Memorandum for the Commissioner, dated pp. 143-144
late Jose P. Fernandez through its authorized
July 19, 1991, prepared by revenue
representative, Atty. Jesus M. Gonzales, for
examiners, Ma. Anabella A. Abuloc, Alberto S.
Arsenio P. Dizon, with attachments (pp. 177-
Enriquez and Raymund S. Gallardo; Reviewed
182, BIR records);
by Maximino V. Tagle
13. Certified true copy of the Letter of "L"
4. Signature of Alberto S. Enriquez appearing at -do- On June 17, 1997, the CTA denied the said petition for review. Citing
the lower portion on p. 2 of Exh. "2"; this Court's ruling in Vda. de Oñate v. Court of Appeals,23 the CTA
opined that the aforementioned pieces of evidence introduced by the
5. Signature of Ma. Anabella A. Abuloc -do-
BIR were admissible in evidence. The CTA ratiocinated:
appearing at the lower portion on p. 2 of Exh.
"2";
Although the above-mentioned documents were not formally offered as
6. Signature of Raymund S. Gallardo appearing -do- evidence for respondent, considering that respondent has been
at the Lower portion on p. 2 of Exh. "2"; declared to have waived the presentation thereof during the hearing on
7. Signature of Maximino V. Tagle also -do- March 20, 1996, still they could be considered as evidence for
appearing on p. 2 of Exh. "2"; respondent since they were properly identified during the presentation
8. Summary of revenue Enforcement Officers p. 139 of respondent's witness, whose testimony was duly recorded as part of
Audit Report, dated July 19, 1991; the records of this case. Besides, the documents marked as
respondent's exhibits formed part of the BIR records of the case.24
9. Signature of Alberto Enriquez at the lower -do-
portion of Exh. "3"; Nevertheless, the CTA did not fully adopt the assessment made by the
10. Signature of Ma. Anabella A. Abuloc at the -do- BIR and it came up with its own computation of the deficiency estate
lower portion of Exh. "3"; tax, to wit:
11. Signature of Raymond S. Gallardo at the lower -do-
portion of Exh. "3"; Conjugal Real Property P 5,062,016.00
12. Signature of Maximino V. Tagle at the lower -do- Conjugal Personal Prop. 33,021,999.93
portion of Exh. "3"; Gross Conjugal Estate 38,084,015.93
13. Demand letter (FAS-E-87-91-00), signed by p. 169 Less: Deductions 26,250,000.00
the Asst. Commissioner for Collection for the Net Conjugal Estate P 11,834,015.93
Commissioner of Internal Revenue,
demanding payment of the amount Less: Share of Surviving Spouse 5,917,007.96
of P66,973,985.40; and Net Share in Conjugal Estate P 5,917,007.96
14. Assessment Notice FAS-E-87-91-00 pp. 169-170 Add: Capital/Paraphernal
Properties – P44,652,813.66
The CTA's Ruling
 Less: Capital/Paraphernal 44,652,813.66 Aggrieved, petitioner, on March 2, 1998, went to the CA via a petition
Deductions for review.27
Net Taxable Estate P 50,569,821.62
The CA's Ruling
============
On April 30, 1999, the CA affirmed the CTA's ruling. Adopting in full the
Estate Tax Due P 29,935,342.97
CTA's findings, the CA ruled that the petitioner's act of filing an estate
Add: 25% Surcharge for Late Filing 7,483,835.74 tax return with the BIR and the issuance of BIR Certification Nos. 2052
and 2053 did not deprive the BIR Commissioner of her authority to re-
Add: Penalties for-No notice of death 15.00
examine or re-assess the said return filed on behalf of the Estate.28
No CPA certificate 300.00
On May 31, 1999, petitioner filed a Motion for Reconsideration29 which
Total deficiency estate tax P 37,419,493.71
the CA denied in its Resolution30 dated November 3, 1999.
============
Hence, the instant Petition raising the following issues:
exclusive of 20% interest from due date of its payment until full
payment thereof 1. Whether or not the admission of evidence which were not
formally offered by the respondent BIR by the Court of Tax
[Sec. 283 (b), Tax Code of 1987].25 Appeals which was subsequently upheld by the Court of Appeals
is contrary to the Rules of Court and rulings of this Honorable
Thus, the CTA disposed of the case in this wise:
Court;
WHEREFORE, viewed from all the foregoing, the Court finds the
2. Whether or not the Court of Tax Appeals and the Court of
petition unmeritorious and denies the same. Petitioner and/or the
Appeals erred in recognizing/considering the estate tax return
heirs of Jose P. Fernandez are hereby ordered to pay to
prepared and filed by respondent BIR knowing that the probate
respondent the amount of P37,419,493.71 plus 20% interest from
court appointed administrator of the estate of Jose P. Fernandez
the due date of its payment until full payment thereof as estate
had previously filed one as in fact, BIR Certification Clearance
tax liability of the estate of Jose P. Fernandez who died on
Nos. 2052 and 2053 had been issued in the estate's favor;
November 7, 1987.
3. Whether or not the Court of Tax Appeals and the Court of
SO ORDERED.26
Appeals erred in disallowing the valid and enforceable claims of
 creditors against the estate, as lawful deductions despite clear administrator and the issuance of said BIR Certifications and not at the
and convincing evidence thereof; and time the aforementioned Compromise Agreements were entered into
with the Estate's creditors.32
4. Whether or not the Court of Tax Appeals and the Court of
Appeals erred in validating erroneous double imputation of values On the other hand, respondent counters that the documents, being part
on the very same estate properties in the estate tax return it of the records of the case and duly identified in a duly recorded
prepared and filed which effectively bloated the estate's assets.31 testimony are considered evidence even if the same were not formally
offered; that the filing of the estate tax return by the Estate and the
The petitioner claims that in as much as the valid claims of creditors issuance of BIR Certification Nos. 2052 and 2053 did not deprive the
against the Estate are in excess of the gross estate, no estate tax was BIR of its authority to examine the return and assess the estate tax; and
due; that the lack of a formal offer of evidence is fatal to BIR's cause; that the factual findings of the CTA as affirmed by the CA may no
that the doctrine laid down in Vda. de Oñate has already been longer be reviewed by this Court via a petition for review.33
abandoned in a long line of cases in which the Court held that evidence
not formally offered is without any weight or value; that Section 34 of The Issues
Rule 132 of the Rules on Evidence requiring a formal offer of evidence
is mandatory in character; that, while BIR's witness Alberto Enriquez There are two ultimate issues which require resolution in this case:
(Alberto) in his testimony before the CTA identified the pieces of
evidence aforementioned such that the same were marked, BIR's First. Whether or not the CTA and the CA gravely erred in allowing the
failure to formally offer said pieces of evidence and depriving petitioner admission of the pieces of evidence which were not formally offered by
the opportunity to cross-examine Alberto, render the same inadmissible the BIR; and
in evidence; that assuming arguendo that the ruling in Vda. de Oñate is
still applicable, BIR failed to comply with the doctrine's requisites Second. Whether or not the CA erred in affirming the CTA in the latter's
because the documents herein remained simply part of the BIR records determination of the deficiency estate tax imposed against the Estate.
and were not duly incorporated in the court records; that the BIR failed
to consider that although the actual payments made to the Estate The Court’s Ruling
creditors were lower than their respective claims, such were
compromise agreements reached long after the Estate's liability had The Petition is impressed with merit.
been settled by the filing of its estate tax return and the issuance of BIR
Certification Nos. 2052 and 2053; and that the reckoning date of the Under Section 8 of RA 1125, the CTA is categorically described as a
claims against the Estate and the settlement of the estate tax due court of record. As cases filed before it are litigated de novo, party-
should be at the time the estate tax return was filed by the judicial litigants shall prove every minute aspect of their cases. Indubitably, no
evidentiary value can be given the pieces of evidence submitted by the of the evidence of a party. In Interpacific Transit, Inc. v.
BIR, as the rules on documentary evidence require that these Aviles [186 SCRA 385], we had the occasion to make a
documents must be formally offered before the CTA.34 Pertinent is distinction between identification of documentary evidence and its
Section 34, Rule 132 of the Revised Rules on Evidence which reads: formal offer as an exhibit. We said that the first is done in the
course of the trial and is accompanied by the marking of the
SEC. 34. Offer of evidence. — The court shall consider no evidence as an exhibit while the second is done only when the
evidence which has not been formally offered. The purpose for party rests its case and not before. A party, therefore, may opt to
which the evidence is offered must be specified. formally offer his evidence if he believes that it will advance his
cause or not to do so at all. In the event he chooses to do the
The CTA and the CA rely solely on the case of Vda. de Oñate, which latter, the trial court is not authorized by the Rules to consider the
reiterated this Court's previous rulings in People v. Napat- same.
a35 and People v. Mate36 on the admission and consideration of exhibits
which were not formally offered during the trial. Although in a long line However, in People v. Napat-a [179 SCRA 403] citing People v.
of cases many of which were decided after Vda. de Oñate, we held that Mate [103 SCRA 484], we relaxed the foregoing rule and
courts cannot consider evidence which has not been formally allowed evidence not formally offered to be admitted and
offered,37 nevertheless, petitioner cannot validly assume that the considered by the trial court provided the following
doctrine laid down in Vda. de Oñate has already been abandoned. requirements are present, viz.: first, the same must have
Recently, in Ramos v. Dizon,38 this Court, applying the said doctrine, been duly identified by testimony duly recorded and,
ruled that the trial court judge therein committed no error when he second, the same must have been incorporated in the
admitted and considered the respondents' exhibits in the resolution of records of the case.40
the case, notwithstanding the fact that the same were not formally
offered. Likewise, in Far East Bank & Trust Company v. Commissioner From the foregoing declaration, however, it is clear that Vda. de Oñate
of Internal Revenue,39 the Court made reference to said doctrine in is merely an exception to the general rule. Being an exception, it may
resolving the issues therein. Indubitably, the doctrine laid down in Vda. be applied only when there is strict compliance with the requisites
De Oñate still subsists in this jurisdiction. In Vda. de Oñate, we held mentioned therein; otherwise, the general rule in Section 34 of Rule 132
that: of the Rules of Court should prevail.

From the foregoing provision, it is clear that for evidence to be In this case, we find that these requirements have not been satisfied.
considered, the same must be formally offered. Corollarily, the The assailed pieces of evidence were presented and marked during the
mere fact that a particular document is identified and marked as trial particularly when Alberto took the witness stand. Alberto identified
an exhibit does not mean that it has already been offered as part these pieces of evidence in his direct testimony.41 He was also
subjected to cross-examination and re-cross examination by While the CTA is not governed strictly by technical rules of
petitioner.42 But Alberto’s account and the exchanges between Alberto evidence,45 as rules of procedure are not ends in themselves and are
and petitioner did not sufficiently describe the contents of the said primarily intended as tools in the administration of justice, the
pieces of evidence presented by the BIR. In fact, petitioner sought that presentation of the BIR's evidence is not a mere procedural technicality
the lead examiner, one Ma. Anabella A. Abuloc, be summoned to which may be disregarded considering that it is the only means by
testify, inasmuch as Alberto was incompetent to answer questions which the CTA may ascertain and verify the truth of BIR's claims
relative to the working papers.43 The lead examiner never testified. against the Estate.46 The BIR's failure to formally offer these pieces of
Moreover, while Alberto's testimony identifying the BIR's evidence was evidence, despite CTA's directives, is fatal to its cause.47 Such failure is
duly recorded, the BIR documents themselves were not incorporated in aggravated by the fact that not even a single reason was advanced by
the records of the case. the BIR to justify such fatal omission. This, we take against the BIR.

A common fact threads through Vda. de Oñate and Ramos that does Per the records of this case, the BIR was directed to present its
not exist at all in the instant case. In the aforementioned cases, the evidence48 in the hearing of February 21, 1996, but BIR's counsel failed
exhibits were marked at the pre-trial proceedings to warrant the to appear.49 The CTA denied petitioner's motion to consider BIR's
pronouncement that the same were duly incorporated in the records of presentation of evidence as waived, with a warning to BIR that such
the case. Thus, we held in Ramos: presentation would be considered waived if BIR's evidence would not
be presented at the next hearing. Again, in the hearing of March 20,
In this case, we find and so rule that these requirements have 1996, BIR's counsel failed to appear.50 Thus, in its Resolution51 dated
been satisfied. The exhibits in question were presented and March 21, 1996, the CTA considered the BIR to have waived
marked during the pre-trial of the case thus, they have been presentation of its evidence. In the same Resolution, the parties were
incorporated into the records. Further, Elpidio himself directed to file their respective memorandum. Petitioner complied but
explained the contents of these exhibits when he was BIR failed to do so.52 In all of these proceedings, BIR was duly notified.
interrogated by respondents' counsel... Hence, in this case, we are constrained to apply our ruling in Heirs of
Pedro Pasag v. Parocha:53
xxxx
A formal offer is necessary because judges are mandated to rest
But what further defeats petitioner's cause on this issue is that their findings of facts and their judgment only and strictly upon the
respondents' exhibits were marked and admitted during the pre- evidence offered by the parties at the trial. Its function is to
trial stage as shown by the Pre-Trial Order quoted earlier.44 enable the trial judge to know the purpose or purposes for which
the proponent is presenting the evidence. On the other hand, this
allows opposing parties to examine the evidence and object to its
 admissibility. Moreover, it facilitates review as the appellate court facts.54 In this case, however, we find the decision of the CA affirming
will not be required to review documents not previously that of the CTA tainted with palpable error.
scrutinized by the trial court.
It is admitted that the claims of the Estate's aforementioned creditors
Strict adherence to the said rule is not a trivial matter. The Court have been condoned. As a mode of extinguishing an
in Constantino v. Court of Appeals ruled that the formal offer of obligation,55 condonation or remission of debt56 is defined as:
one's evidence is deemed waived after failing to submit it
within a considerable period of time. It explained that the an act of liberality, by virtue of which, without receiving any
court cannot admit an offer of evidence made after a lapse of equivalent, the creditor renounces the enforcement of the
three (3) months because to do so would "condone an obligation, which is extinguished in its entirety or in that part or
inexcusable laxity if not non-compliance with a court order aspect of the same to which the remission refers. It is an
which, in effect, would encourage needless delays and derail essential characteristic of remission that it be gratuitous, that
the speedy administration of justice." there is no equivalent received for the benefit given; once such
equivalent exists, the nature of the act changes. It may become
Applying the aforementioned principle in this case, we find that dation in payment when the creditor receives a thing different
the trial court had reasonable ground to consider that petitioners from that stipulated; or novation, when the object or principal
had waived their right to make a formal offer of documentary or conditions of the obligation should be changed; or compromise,
object evidence. Despite several extensions of time to make their when the matter renounced is in litigation or dispute and in
formal offer, petitioners failed to comply with their commitment exchange of some concession which the creditor receives.57
and allowed almost five months to lapse before finally submitting
it. Petitioners' failure to comply with the rule on admissibility Verily, the second issue in this case involves the construction of Section
of evidence is anathema to the efficient, effective, and 7958 of the National Internal Revenue Code59 (Tax Code) which provides
expeditious dispensation of justice. for the allowable deductions from the gross estate of the decedent. The
specific question is whether the actual claims of the aforementioned
Having disposed of the foregoing procedural issue, we proceed to creditors may be fully allowed as deductions from the gross estate of
discuss the merits of the case. Jose despite the fact that the said claims were reduced or condoned
through compromise agreements entered into by the Estate with its
Ordinarily, the CTA's findings, as affirmed by the CA, are entitled to the creditors.
highest respect and will not be disturbed on appeal unless it is shown
that the lower courts committed gross error in the appreciation of "Claims against the estate," as allowable deductions from the gross
estate under Section 79 of the Tax Code, are basically a reproduction
of the deductions allowed under Section 89 (a) (1) (C) and (E) of In announcing its agreement with Propstra,66 the U.S. 5th Circuit Court of
Commonwealth Act No. 466 (CA 466), otherwise known as the National Appeals held:
Internal Revenue Code of 1939, and which was the first codification of
Philippine tax laws. Philippine tax laws were, in turn, based on the We are persuaded that the Ninth Circuit's
federal tax laws of the United States. Thus, pursuant to established decision...in Propstra correctly apply the Ithaca Trust date-of-
rules of statutory construction, the decisions of American courts death valuation principle to enforceable claims against the estate.
construing the federal tax code are entitled to great weight in the As we interpret Ithaca Trust, when the Supreme Court
interpretation of our own tax laws.60 announced the date-of-death valuation principle, it was making a
judgment about the nature of the federal estate tax specifically,
It is noteworthy that even in the United States, there is some dispute as that it is a tax imposed on the act of transferring property by will
to whether the deductible amount for a claim against the estate is fixed or intestacy and, because the act on which the tax is levied
as of the decedent's death which is the general rule, or the same should occurs at a discrete time, i.e., the instance of death, the net value
be adjusted to reflect post-death developments, such as where a of the property transferred should be ascertained, as nearly as
settlement between the parties results in the reduction of the amount possible, as of that time. This analysis supports broad application
actually paid.61 On one hand, the U.S. court ruled that the appropriate of the date-of-death valuation rule.67
deduction is the "value" that the claim had at the date of the decedent's
death.62 Also, as held in Propstra v. U.S., 63 where a lien claimed against We express our agreement with the date-of-death valuation rule, made
the estate was certain and enforceable on the date of the decedent's pursuant to the ruling of the U.S. Supreme Court in Ithaca Trust Co. v.
death, the fact that the claimant subsequently settled for lesser amount United States.68 First. There is no law, nor do we discern any legislative
did not preclude the estate from deducting the entire amount of the intent in our tax laws, which disregards the date-of-death valuation
claim for estate tax purposes. These pronouncements essentially principle and particularly provides that post-death developments must
confirm the general principle that post-death developments are not be considered in determining the net value of the estate. It bears
material in determining the amount of the deduction. emphasis that tax burdens are not to be imposed, nor presumed to be
imposed, beyond what the statute expressly and clearly imports, tax
On the other hand, the Internal Revenue Service (Service) opines that statutes being construed strictissimi juris against the government.69 Any
post-death settlement should be taken into consideration and the claim doubt on whether a person, article or activity is taxable is generally
should be allowed as a deduction only to the extent of the amount resolved against taxation.70 Second. Such construction finds relevance
actually paid.64 Recognizing the dispute, the Service released Proposed and consistency in our Rules on Special Proceedings wherein the term
Regulations in 2007 mandating that the deduction would be limited to "claims" required to be presented against a decedent's estate is
the actual amount paid.65 generally construed to mean debts or demands of a pecuniary nature
which could have been enforced against the deceased in his lifetime, or
liability contracted by the deceased before his death.71 Therefore, the
claims existing at the time of death are significant to, and should be
made the basis of, the determination of allowable deductions.

WHEREFORE, the instant Petition is GRANTED. Accordingly, the

assailed Decision dated April 30, 1999 and the Resolution dated
November 3, 1999 of the Court of Appeals in CA-G.R. S.P. No. 46947
are REVERSED and SET ASIDE. The Bureau of Internal Revenue's
deficiency estate tax assessment against the Estate of Jose P.
Fernandez is hereby NULLIFIED. No costs. G.R. No. 175991               August 31, 2011

SO ORDERED. JOSE R. CATACUTAN, Petitioner,

vs.
PEOPLE OF THE PHILIPPINES, Respondent.

DECISION

DEL CASTILLO, J.:

It is well within the Court’s discretion to reject the presentation of

evidence which it judiciously believes irrelevant and impertinent to the
proceeding on hand.

Before us is a Petition for Review on Certiorari filed by petitioner Jose

R. Catacutan seeking to set aside and reverse the Decision1 dated
December 7, 2006 of the Sandiganbayan which affirmed the
Decision2 dated July 25, 2005 of the Regional Trial Court (RTC), Branch
30, Surigao City convicting him of the crime of violation of Section 3(e)
of Republic Act (RA) No. 3019 otherwise known as the Anti-Graft and
Corrupt Practices Act.
Factual Antecedents R. CATACUTAN, OIC Principal of Surigao del Norte School of Arts and
Trades (SNSAT), Surigao City, with salary grade below 27, while in the
The antecedent facts are clear and undisputed. performance of his official duties, thus committing the act in relation to
his office, willfully, feloniously and unlawfully did then and there, with
Private complainant Georgito Posesano was an Instructor II with Salary grave abuse of authority and evident bad faith, refuse to implement the
Grade 13 while private complainant Magdalena Divinagracia was an promotion/appointments of Georgito Posesano and Magdalena A.
Education Program Specialist II with Salary Grade 16, both at the Divinagracia as Vocational Supervisors III notwithstanding the issuance
Surigao del Norte School of Arts and Trades (SNSAT).3 of the valid appointments by the appointing authority and despite the
directive of the Regional Director of the Commission on Higher
On June 2, 1997, the Commission on Higher Education (CHED) Caraga Education and the Civil Service Commission in the region, thereby
Administrative Region, appointed and promoted private complainants causing undue injury to complainants who were supposed to receive a
as Vocational Instruction Supervisor III with Salary Grade 18 at higher compensation for their promotion, as well as [to] the school and
SNSAT.4 These promotional appointments were duly approved and the students who were deprived of the better services which could have
attested as permanent by the Civil Service Commission (CSC) on June been rendered by Georgito Posesano and Magdalena A. Divinagracia
3, 1997.5 Being then the Officer-In-Charge of SNSAT, the approved as Vocational Instruction Supervisors [III].
appointments were formally transmitted to the petitioner on June 6,
1997,6 copy furnished the concerned appointees. Despite receipt of the CONTRARY TO LAW.10
appointment letter, the private complainants were not able to assume
their new position since petitioner made known that he strongly During arraignment on September 22, 1998, petitioner pleaded "not
opposed their appointments and that he would not implement them guilty."
despite written orders from CHED7 and the CSC, Caraga Regional
Office.8 Thus, on August 2, 1997, private complainants lodged a formal For his defense, petitioner admitted that he did not implement the
complaint against petitioner for grave abuse of authority and disrespect promotional appointments of the private complainants because of some
of lawful orders before the Office of the Ombudsman for Mindanao.9 procedural lapses or infirmities attending the preparation of the
appointment papers. According to him, the appointment papers were
In an Information dated February 27, 1998, petitioner was charged prepared by SNSAT Administrative Officer, Crispin Noguera, using
before the RTC of Surigao City with violation of Section 3(e) of RA 3019 blank forms bearing the letterhead of SNSAT and not of the CHED
as amended, committed in the following manner, to wit: Regional Office who made the appointments. He also averred that the
appointment papers cited the entire plantilla11 (1996 Plantilla-OSEC-
That in June 1997 or sometime thereafter, in Surigao City, Philippines DECSB-VOCIS3-19, Pages 1-16) instead of only the particular page on
and within the jurisdiction of this Honorable Court, the accused JOSE which the vacant item occurs. He likewise claimed that he received only
the duplicate copies of the appointments contrary to the usual WHEREFORE, finding the accused JOSE R. CATACUTAN guilty
procedure where the original appointment papers and other supporting beyond reasonable doubt [of] VIOLATION OF SECTION 3(e) of R.A.
documents are returned to his office. Finally, he asserted that the 3019, otherwise known as the Anti-Graft and Corrupt Practices Act, this
transmittal letter from the CHED did not specify the date of effectivity of Court hereby imposes upon him the penalty of imprisonment [of] SIX (6)
the appointments. These alleged infirmities, he contended, were YEARS and ONE (1) MONTH and PERPETUAL DISQUALIFICATION
formally brought to the attention of the CHED Regional Director on June FROM PUBLIC OFFICE, and to pay the costs.
20, 199712 who, however, informed him that the subject appointments
were regular and valid and directed him to implement the same. Still not The aforementioned accused is hereby ordered to pay private
satisfied, petitioner sought the intercession of CHED Chairman Angel complainants Georgito Posesano and Magdalena Divinagracia the sum
C. Alcala in the settlement of this administrative problem13 but the latter of Fifty Thousand Pesos (₱50,000.00) each, for moral damages.
did not respond. Petitioner alleged that his refusal to implement the
appointments of the private complainants was not motivated by bad SO ORDERED.15
faith but he just wanted to protect the interest of the government by
following strict compliance in the preparation of appointment papers. Petitioner moved for reconsideration16 but it was denied in an
Order17 dated
Ruling of the Regional Trial Court
October 13, 2005.
On July 25, 2005, the RTC rendered its Decision  holding that the act
14

of the petitioner in defying the orders of the CHED and the CSC to Ruling of the Sandiganbayan
implement the subject promotional appointments despite the rejection
of his opposition, demonstrates his palpable and patent fraudulent and On appeal, petitioner’s conviction was affirmed in toto by the
dishonest purpose to do moral obliquity or conscious wrongdoing for Sandiganbayan.18 The appellate court ruled that the Decision of the trial
some perverse motive or ill will. The trial court ruled that petitioner’s court, being supported by evidence and firmly anchored in law and
refusal to implement the appointments of the private complainants had jurisprudence, is correct. It held that petitioner failed to show that the
caused undue injury to them. Thus, it held petitioner guilty of the crime trial court committed any reversible error in judgment.
charged and accordingly sentenced him to suffer the penalty of
imprisonment of six (6) years and one (1) month and perpetual Hence, this petition.
disqualification from public office.
In the Court’s Resolution19 dated February 26, 2007, the Office of the
The RTC disposed of the case as follows: Solicitor General (OSG) was required to file its Comment. The OSG
filed its Comment20 on June 5, 2007 while the Office of the Special
Prosecutor filed the Comment21 for respondent People of the Philippines "Due process simply demands an opportunity to be heard."24 "Due
on February 22, 2008. process is satisfied when the parties are afforded a fair and reasonable
opportunity to explain their respective sides of the
Issue controversy."25 "Where an opportunity to be heard either through oral
arguments or through pleadings is accorded, there is no denial of
The sole issue for consideration in this present petition is: procedural due process."26

Whether the [petitioner’s] constitutional right[s] to due process x x x and Guided by these established jurisprudential pronouncements, petitioner
x x x equal protection of [the] law x x x were violated x x x [when he was can hardly claim denial of his fundamental right to due process.
denied] the opportunity to present [in] evidence [the Court of Appeals’] Records show that petitioner was able to confront and cross-examine
Decision dated April 18, 2001 x x x in CA-G.R. SP No. 51795 entitled the witnesses against him, argue his case vigorously, and explain the
"Jose R. Catacutan, petitioner, versus Office of the Ombudsman for merits of his defense. To reiterate, as long as a party was given the
Mindanao, et al., respondents."22 opportunity to defend his interests in due course, he cannot be said to
have been denied due process of law for the opportunity to be heard is
Invoking the constitutional provision on due process,23 petitioner argues the better accepted norm of procedural due process.
that the Decision rendered by the trial court is flawed and is grossly
violative of his right to be heard and to present evidence. He contends There is also no denial of due process when the trial court did not allow
that he was not able to controvert the findings of the trial court since he petitioner to introduce as evidence the CA Decision in CA-G.R. SP No.
was not able to present the Court of Appeals’ (CA’s) Decision in CA- 51795. It is well within the court’s discretion to reject the presentation of
G.R. SP No. 51795 which denied the administrative case filed against evidence which it judiciously believes irrelevant and impertinent to the
him and declared that his intention in refusing to implement the proceeding on hand. This is specially true when the evidence sought to
promotions of the private complainants falls short of malice or wrongful be presented in a criminal proceeding as in this case, concerns an
intent. administrative matter. As the Sandiganbayan aptly remarked:

Our Ruling The RTC committed no error in judgment when it did not allow the
Accused-appellant to present the Decision of the Court of Appeals in
The petition lacks of merit. CA-G.R. SP No. 51795 (Jose R. Catacutan vs. Office of the
Ombudsman). The findings in administrative cases are not binding
Petitioner was not deprived of his right to due process. upon the court trying a criminal case, even if the criminal proceedings
are based on the same facts and incidents which gave rise to the
administrative matter. The dismissal of a criminal case does not
foreclose administrative action or necessarily gives the accused a clean the disposition in one case does not inevitably govern the resolution of
bill of health in all respects. In the same way, the dismissal of an the other case/s and vice versa. x x x
administrative case does not operate to terminate a criminal proceeding
with the same subject matter. x x x27 On the basis of the afore-mentioned precedents, the Court has no
option but to declare that the courts below correctly disallowed the
This action undertaken by the trial court and sustained by the appellate introduction in evidence of the CA Decision. "Due process of law is not
court was not without legal precedent. In Paredes v. Court of denied by the exclusion of irrelevant, immaterial, or incompetent
Appeals,28 this Court ruled: evidence, or testimony of an incompetent witness. It is not an error to
refuse evidence which although admissible for certain purposes, is not
It is indeed a fundamental principle of administrative law that admissible for the purpose which counsel states as the ground for
administrative cases are independent from criminal actions for the offering it."30
same act or omission. Thus, an absolution from a criminal charge is not
a bar to an administrative prosecution, or vice versa. One thing is At any rate, even assuming that the trial court erroneously rejected the
administrative liability; quite another thing is the criminal liability for the introduction as evidence of the CA Decision, petitioner is not left without
same act. legal recourse. Petitioner could have availed of the remedy provided in
Section 40, Rule 132 of the Rules of Court which provides:
xxxx
Section 40. Tender of excluded evidence. – If documents or things
Thus, considering the difference in the quantum of evidence, as well as offered in evidence are excluded by the court, the offeror may have the
the procedure followed and the sanctions imposed in criminal and same attached to or made part of the record. If the evidence excluded
administrative proceedings, the findings and conclusions in one should is oral, the offeror may state for the record the name and other personal
not necessarily be binding on the other. Notably, the evidence circumstances of the witness and the substance of the proposed
presented in the administrative case may not necessarily be the same testimony.
evidence to be presented in the criminal cases. x x x
As observed by the appellate court, if the petitioner is keen on having
In Nicolas v. Sandiganbayan,29 the Court reiterated: the RTC admit the CA’s Decision for whatever it may be worth, he could
have included the same in his offer of exhibits. If an exhibit sought to be
This Court is not unmindful of its rulings that the dismissal of an presented in evidence is rejected, the party producing it should ask the
administrative case does not bar the filing of a criminal prosecution for court’s permission to have the exhibit attached to the record.
the same or similar acts subject of the administrative complaint and that
As things stand, the CA Decision does not form part of the records of 2. He must have acted with manifest partiality, evident bad faith
the case, thus it has no probative weight. Any evidence that a party or inexcusable negligence; and
desires to submit for the consideration of the court must be formally
offered by him otherwise it is excluded and rejected and cannot even be 3. His action caused any undue injury to any party, including the
taken cognizance of on appeal. The rules of procedure and government or gave any private party unwarranted benefits,
jurisprudence do not sanction the grant of evidentiary value to evidence advantage or preference in the discharge of his functions.31
which was not formally offered.
All the above enumerated elements of the offense charged have been
Section 3(e) of RA 3019, as amended, provides: successfully proven by the prosecution.

Section 3. Corrupt practices of public officers. – In addition to acts or First, petitioner could not have committed the acts imputed against him
omissions of public officers already penalized by existing law, the during the time material to this case were it not for his being a public
following shall constitute corrupt practices of any public officer and are officer, that is, as the Officer-In-Charge (Principal) of SNSAT. As such
hereby declared to be unlawful. public officer, he exercised official duties and functions, which include
the exercise of administrative supervision over the school such as
xxxx taking charge of personnel management and finances, as well as
implementing instruction as far as appointment of teachers.32
(e) Causing any undue injury to any party, including the Government or
giving any private party any unwarranted benefits, advantage or Second, petitioner acted with evident bad faith in refusing to implement
preference in the discharge of his official, administrative or judicial the appointments of private complainants.  As the Sandiganbayan aptly
1awphil

functions through manifest partiality, evident bad faith or gross remarked:

inexcusable negligence. This provision shall apply to officers and
employees of offices or government corporations charged with the grant The records clearly indicate that the refusal of Catacutan to implement
of licenses or permits or other concessions. the subject promotion was no longer anchored on any law or civil
service rule as early [as] the July 14, 1997 letter of the CHED Regional
Under said provision of law, three essential elements must thus be Director addressing the four issues raised by the Accused-appellant in
satisfied, viz: the latter’s protest letter. x x x In light of the undisputed evidence
presented to the trial court that Catacutan’s reason for not implementing
1. The accused must be a public officer discharging the appointments was a personal dislike or ill feelings towards
administrative, judicial or official functions; Posesano, this Court believes that Catacutan’s refusal was impelled by
an ill motive or dishonest purpose characteristic of bad faith. x x x
xxxx from June to November 1997, private complainants failed to enjoy the
benefits of an increased salary corresponding to their newly appointed
In the August 1, 1997 [m]emorandum issued by the CHED Regional positions. Likewise established is that as a result of petitioner’s
Director, Catacutan was once again directed, in strong words, to cease unjustified and inordinate refusal to implement their valid appointments
and desist from further questioning what has been lawfully acted upon notwithstanding clear and mandatory directives from his superiors, the
by competent authorities. Catacutan deliberately ignored the private complainants suffered mental anguish, sleepless nights, serious
memorandum and even challenged the private complainants to file a anxiety warranting the award of moral damages under Article 2217 of
case against him. Such arrogance is indicative of the bad faith of the the New Civil Code.
accused-appellant.
At this point, the Court just needs to stress that the foregoing are factual
Yet again, the [CSC] Regional Director wrote the Accused-appellant on matters that were threshed out and decided upon by the trial court
September 5, 1997, clarifying with finality the validity of the which were subsequently affirmed by the Sandiganbayan. Where the
appointment. Still, Accused-appellant failed to implement the subject factual findings of both the trial court and the appellate court coincide,
promotions. This stubborn refusal to implement the clear and repeated the same are binding on this Court. In any event, apart from these
directive of competent authorities established the evident bad faith of factual findings of the lower courts, this Court in its own assessment
Catacutan and belies any of his claims to the contrary.33 and review of the records considers the findings in order.

While petitioner may have laudable objectives in refusing the WHEREFORE, the petition is DENIED and the assailed Decision of the
implementation of private complainants’ valid appointments, the Court Sandiganbayan promulgated on December 7, 2006 is AFFIRMED.
fails to see how he can still claim good faith when no less than the
higher authorities have already sustained the validity of the subject SO ORDERED.
appointments and have ordered him to proceed with the
implementation. "It is well to remember that good intentions do not win
cases, evidence does."34

Third, undue injury to the private complainants was duly proven to the
point of moral certainty. Here, the private complainants suffered undue
injury when they were not able to assume their official duties as
Vocational Supervisors III despite the issuance of their valid
appointments. As borne out by the records, they were able to assume
their new positions only on November 19, 1997. So in the interregnum
 ₱260,000.00. Johnny gave a down payment of ₱45,000.00 to Lomises,
who acknowledged receipt of the amount in a document executed on
5 

the same date as the agreement:

RECEIPT
G.R. No. 165285               June 18, 2012
₱45,000.00 September 8, 1984
LOMISES ALUDOS, deceased, substituted by FLORA
Received the Sum of Forty Five Thousand Pesos (₱45,000.00) from
ALUDOS, Petitioner,
JOHNNY M. SUERTE, with postal address at Kamog, Sablan, Benguet
vs.
Province, Philippine Currency as an advance or partial downpayment of
JOHNNY M. SUERTE,* Respondent.
Improvements and Rights over Stall Nos. 9 and 10, situated at
DECISION Refreshment Section, Hangar Market Compound, Baguio City, and the
said amount will be deducted from the agreed proceeds of the
BRION, J.: transaction in the amount of Two Hundred Sixty Thousand Pesos
(₱260,000.00), Philippine Currency and payable starting from
Before the Court is a petition for review on certiorari filed under Rule 45 September 1984 up to December 1985, and/or (16) months.
of the Rules of Court by Lomises Aludos, through his wife Flora Aludos
(Lomises). Lomises seeks the reversal of the decision dated August 29,
1  2  This receipt will be formalise (sic) later, and the Deed of Absolute
2002 of the Court of Appeals (CA) in CA-G.R. CV No. 63113, as well as Transfer of Improvements and Rights over the said Stall be executed
the resolution dated August 17, 2004.
3  immediately upon full payment of the balance stated in the above.

THE FACTS Right hand thumbmark:

Sometime in January 1969, Lomises acquired from the Baguio City   [Thumbmark affixed]
Government the right to occupy two stalls in the Hangar Market in LOMISES F. ALUDOS
Baguio City, as evidenced by a permit issued by the City Treasurer. 4

(Registered Stall Holder)

On September 8, 1984, Lomises entered into an agreement with
respondent Johnny M. Suerte for the transfer of all improvements and With the Consent of the Wife:
rights over the two market stalls (Stall Nos. 9 and 10) for the amount of
 [Signature affixed] Received from Mr. Lomises Aludos the sum of Sixty-eight thousand
  FLORA MENES (₱68,000.00) Pesos as reimbursement of my money.
(Wife) Baguio City, October 9, 1985.

Witness to Thumbmark and/or [Signature affixed] [Signature affixed]

Paid in the presence of: JAIME SUERTE DOMES SUERTE

  [Signature affixed] [Signature affixed] Witnesses

Domes M. Suerte Agnes M. Boras
(witness) (witness) [Illegible signature] [Illegible signature]

  [Signature affixed] [Signature affixed] Through a letter dated October 15, 1985, Johnny protested the return of
Ana Comnad (witness) Dolores Aludos (with his money, and insisted on the continuation and enforcement of his
her consent/witness) agreement with Lomises. When Lomises refused Johnny’s protest,
Johnny filed a complaint against Lomises before the Regional Trial
Court (RTC), Branch 7, Baguio City, for specific performance with
Johnny made a subsequent payment of ₱23,000.00; hence, a total of damages, docketed as Civil Case No. 720-R. Johnny prayed that, after
₱68,000.00 of the ₱260,000.00 purchase price had been made as of due proceedings, judgment be rendered ordering Lomises to (1) accept
1984. Before full payment could be made, however, Lomises backed the payment of the balance of ₱192,000.00; and (2) execute a final
out of the agreement and returned the ₱68,000.00 to Domes and Jaime deed of sale and/or transfer the improvements and rights over the two
Suerte, the mother and the father of Johnny, respectively. The return of market stalls in his favor.
the ₱68,000.00 down payment was embodied in a handwritten
receipt dated October 9, 1985:
6 
In a decision dated November 24, 1998, the RTC nullified the
7 

agreement between Johnny and Lomises for failure to secure the

RECEIPT consent of the Baguio City Government to the agreement. The RTC
found that Lomises was a mere lessee of the market stalls, and the
₱68,000.00 Baguio City Government was the owner-lessor of the stalls. Under
Article 1649 of the Civil Code, "[t]he lessee cannot assign the lease
without the consent of the lessor, unless there is a stipulation to the contract, dated May 1, 1985, between Lomises and the Baguio City
contrary." As the permit issued to Lomises did not contain any provision Government, supposedly marked as Exh. "A," provided that "[a]ll
that the lease of the market stalls could further be assigned, and in the improvements [introduced shall] ipso facto become properties of the
absence of the consent of the Baguio City Government to the City of Baguio."
9

agreement, the RTC declared the agreement between Lomises and

Johnny null and void. The nullification of the agreement required the In a resolution dated August 17, 2004, the CA denied the motion after
10 

parties to return what had been received under the agreement; thus, finding that Lomises’ lawyer, Atty. Rodolfo Lockey, misrepresented Exh.
the RTC ordered Lomises to return the down payment made by Johnny, "A" as the governing lease contract between Lomises and the Baguio
with interest of 12% per annum, computed from the time the complaint City Government; the records reveal that Exh. "A" was merely a permit
was filed until the amount is fully paid. It dismissed the parties’ claims issued by the City Treasurer in favor of Lomises. The contract of lease
for damages. dated May 1, 1985 was never formally offered in evidence before the
RTC and could thus not be considered pursuant to the rules of
Lomises appealed the RTC decision to the CA, arguing that the real evidence.
agreement between the parties was merely one of loan, and not of sale;
he further claimed that the loan had been extinguished upon the return Lomises now appeals the CA rulings through the present petition for
of the ₱68,000.00 to Johnny’s mother, Domes. review on certiorari.

In a decision dated August 29, 2002, the CA rejected Lomises’ claim

8  THE PARTIES’ ARGUMENTS
that the true agreement was one of loan. The CA found that there were
two agreements entered into between Johnny and Lomises: one was Lomises insists that the agreement was merely one of loan, not of sale
for the assignment of leasehold rights and the other was for the sale of of improvements and leasehold rights. Johnny could not afford to
the improvements on the market stalls. The CA agreed with the RTC purchase from Lomises the two market stalls for ₱260,000.00 because
that the assignment of the leasehold rights was void for lack of consent the former was a mere college student when the agreement was
of the lessor, the Baguio City Government. The sale of the entered into in 1984 and was dependent on his parents for support. The
improvements, however, was valid because these were Lomises’ actual lender of the amount was Johnny’s mother, Domes; Johnny’s
private properties. For this reason, the CA remanded the case to the name was placed on the receipt dated September 8, 1984 so that in
RTC to determine the value of the improvements on the two market case the loan was not paid, the rights over the market stalls would be
stalls, existing at the time of the execution of the agreement. transferred to Johnny’s name, not to Domes who already had a market
stall and was thus disqualified from acquiring another. The receipt
Lomises moved for the reconsideration of the CA ruling, contending that dated September 8, 1984, Lomises pointed out, bears the signature of
no valid sale of the improvements could be made because the lease Domes, not of Johnny.
Even assuming that Johnny was the real creditor, Lomises alleges that The Nature of the Agreement between the Parties
the loan had been fully paid when he turned over the amount of
₱68,000.00 to Johnny’s parents, as evidenced by the receipt dated Lomises questions the nature of the agreement between him and
October 9, 1985. Domes’ claim – that she was pressured to accept the Johnny, insisting that it was a contract of loan, not an assignment of
amount – is an implied admission that payment had nonetheless been leasehold rights and sale of improvements. In other words, what existed
received. When Johnny died during the pendency of the case before was an equitable mortgage, as contemplated in Article 1602, in relation
the RTC, his parents became his successors and inherited all his rights. with Article 1604, of the Civil Code. "An equitable mortgage has been
For having received the full amount of the loan, Johnny’s parents can defined ‘as one which although lacking in some formality, or form or
no longer enforce payment of the loan. words, or other requisites demanded by a statute, nevertheless reveals
the intention of the parties to charge real property as security for a debt,
Lomises contends that there were no improvements made on the there being no impossibility nor anything contrary to law in this
market stalls other than the stalls themselves, and these belong to the intent.’" Article 1602 of the Civil Code lists down the circumstances that
11 

Baguio City Government as the lessor. A transfer of the stalls cannot be may indicate that a contract is an equitable mortgage:
made without a transfer of the leasehold rights, in which case, there
would be an indirect violation of the lease contract with the Baguio City Art. 1602. The contract shall be presumed to be an equitable mortgage,
Government. Lomises further alleges that, at present, the market stalls in any of the following cases:
are leased by Flora and her daughter who both obtained the lease in
their own right and not as Lomises’ successors. (1) When the price of a sale with right to repurchase is unusually
inadequate;
Johnny, through his remaining successor Domes (Johnny’s mother),
opposed Lomises’ claim. The receipt dated September 8, 1984 clearly (2) When the vendor remains in possession as lessee or
referred to a contract of sale of the market stalls and not a contract of otherwise;
loan that Lomises alleges. Although Johnny conceded that the sale of
leasehold rights to the market stalls were void for lack of consent of the (3) When upon or after the expiration of the right to repurchase
Baguio City Government, he alleged that the sale of the improvements another instrument extending the period of redemption or
should be upheld as valid, as the CA did. granting a new period is executed;

THE COURT’S RULING (4) When the purchaser retains for himself a part of the purchase
price;
The Court does not find the petition meritorious.
 (5) When the vendor binds himself to pay the taxes on the thing Market. During trial, Johnny was asked where he was to get the funds
12 

sold; to pay the ₱260,000.00 purchase price, and he said he would get a
loan from his grandfather. That he did not have the full amount at the
13 

(6) In any other case where it may be fairly inferred that the real time the agreement was executed does not necessarily negate his
intention of the parties is that the transaction shall secure the capacity to pay the purchase price, since he had 16 months to complete
payment of a debt or the performance of any other obligation. the payment. Apart from Lomises’ bare claim that it was Johnny’s
mother, Domes, who was interested in acquiring his market stalls, we
In any of the foregoing cases, any money, fruits, or other benefit to be find no other evidence supporting the claim that Johnny was merely
received by the vendee as rent or otherwise shall be considered as acting as a dummy for his mother.
interest which shall be subject to the usury laws. [Emphases ours.]
Lomises contends that of the ₱68,000.00 given by Johnny, he only
Based on Lomises’ allegations in his pleadings, we consider three received ₱48,000.00, with the remaining ₱20,000.00 retained by
circumstances to determine whether his claim is well-supported. First, Johnny as interest on the loan. However, the testimonies of the
Johnny was a mere college student dependent on his parents for witnesses presented during trial, including Lomises himself, negate this
support when the agreement was executed, and it was Johnny’s claim. Judge Rodolfo Rodrigo (RTC of Baguio City, Branch VII) asked
mother, Domes, who was the party actually interested in acquiring the Lomises’ lawyer, Atty. Lockey, if they deny receipt of the ₱68,000.00;
market stalls. Second, Lomises received only ₱48,000.00 of the Atty. Lockey said that they were not denying receipt, and added that
₱68,000.00 that Johnny claimed he gave as down payment; Lomises they had in fact returned the same amount. Judge Rodrigo accurately
14 

said that the ₱20,000.00 represented interests on the loan. Third, summarized their point by stating that "there is no need to dispute
Lomises retained possession of the market stalls even after the whether the ₱68,000.00 was given, because if [Lomises] tried to return
execution of the agreement. that x x x he had received that." Witness Atty. Albert Umaming said he
15 

counted the money before he drafted the October 9, 1985 receipt

Whether separately or taken together, these circumstances do not evidencing the return; he said that Lomises returned ₱68,000.00 in
support a conclusion that the parties only intended to enter into a total. Thus, if the transaction was indeed a loan and the ₱20,000.00
16 

contract of loan. interest was already prepaid by Lomises, the return of the full amount of
₱68,000.00 by Lomises to Johnny (through his mother, Domes) would
That Johnny was a mere student when the agreement was executed not make sense.
does not indicate that he had no financial capacity to pay the purchase
price of ₱260,000.00. At that time, Johnny was a 26-year old third year That Lomises retained possession of the market stalls even after the
engineering student who operated as a businessman as a sideline execution of his agreement with Johnny is also not an indication that
activity and who helped his family sell goods in the Hangar the true transaction between them was one of loan. Johnny had yet to
complete his payment and, until Lomises decided to forego with their 1985 lease contract. Lomises further claims that the stalls themselves
21 

agreement, had four more months to pay; until then, Lomises retained are the only improvements on the property and a transfer of the stalls
ownership and possession of the market stalls. 17
cannot be made without transferring the leasehold rights. Hence, both
the assignment of leasehold rights and the sale of improvements should
Lomises cannot feign ignorance of the import of the terms of the receipt be voided.
of September 8, 1984 by claiming that he was an illiterate old man. A
witness (Ana Comnad) testified not only of the fact of the sale, but also The CA has already rejected the evidentiary value of the May 1, 1985
that Lomises’ daughter, Dolores, translated the terms of the agreement lease contract between the Baguio City Government and Lomises, as it
from English to Ilocano for Lomises’ benefit; Lomises himself admitted
18 
was not formally offered in evidence before the RTC; in fact, the CA
this fact. If Lomises believed that the receipt of September 8, 1984 did
19 
admonished Lomises’ lawyer, Atty. Lockey, for making it appear that it
not express the parties’ true intent, he could have refused to sign it or was part of the records of the case. Under Section 34, Rule 132 of the
subsequently requested for a reformation of its terms. Lomises rejected Rules of Court, the court shall consider no evidence which has not been
the agreement only after Johnny sought to enforce it. formally offered. "The offer of evidence is necessary because it is the
duty of the court to rest its findings of fact and its judgment only and
Hence, the CA was correct in characterizing the agreement between strictly upon the evidence offered by the parties. Unless and until
Johnny and Lomises as a sale of improvements and assignment of admitted by the court in evidence for the purpose or purposes for which
leasehold rights. such document is offered, the same is merely a scrap of paper barren
of probative weight." Although the contract was referred to in Lomises’
22 

The Validity of the Agreement answer to Johnny’s complaint and marked as Exhibit "2" in his pre-trial
23 

brief, a copy of it was never attached. In fact, a copy of the May 1,

24 

Both the RTC and the CA correctly declared that the assignment of the 1985 lease contract "surfaced" only after Lomises filed a motion for
leasehold rights over the two market stalls was void since it was made reconsideration of the CA decision. What was formally offered was the
without the consent of the lessor, the Baguio City Government, as 1969 permit, which only stated that Lomises was permitted to occupy a
required under Article 1649 of the Civil Code. Neither party appears to
20 
stall in the Baguio City market and nothing else. In other words, no
25 

have contested this ruling. evidence was presented and formally offered showing that any and all
improvements in the market stalls shall be owned by the Baguio City
Lomises, however, objects to the CA ruling upholding the validity of the Government.
agreement insofar as it involved the sale of improvements on the stalls.
Lomises alleges that the sale of the improvements should similarly be Likewise unsupported by evidence is Lomises’ claim that the stalls
voided because it was made without the consent of the Baguio City themselves were the only improvements. Hence, the CA found it proper
Government, the owner of the improvements, pursuant to the May 1, to order the remand of the case for the RTC to determine the value of
the improvements on the market stalls existing as of September 8,
1984. We agree with the CA’s order of remand. We note, however, that
26 

Lomises had already returned the ₱68,000.00 and receipt of the

amount has been duly acknowledged by Johnny’s mother, Domes.
Johnny testified on October 6, 1986 that the money was still with his
mother. Thus, upon determination by the RTC of the actual value of the
27 

improvements on the market stalls, the heirs of Johnny Suerte should

pay the ascertained value of these improvements to Lomises, who shall
thereafter be required to execute the deed of sale over the
improvements in favor of the heirs of Johnny.

WHEREFORE, under these premises, the Court hereby AFFIRMS the

ruling of the Court of Appeals for the remand of the case to the
Regional Trial Court of Baguio City, Branch 7, for the determination of
the value of the improvements on Stall Nos. 9 and 10 at the
Refreshment Section of the Hangar Market Compound, Baguio City as
of September 8, 1984. After this determination, the Court ORDERS the
heirs of Johnny M. Suerte to pay the amount determined to the heirs of
Lomises Aludos, who shall thereafter execute the deed of sale covering
the improvements in favor of the heirs of Johnny M. Suerte and deliver
the deed to them. Costs against the petitioner.

SO ORDERED.