Begun and held in Metro Manila, on Monday, the twenty-

third day of July, two thousand twelve.

[REPUBLIC ACT NO. 10515]
AN ACT PROHIBITING AND PENALIZING
UNAUTHORIZED INTERCEPTION, RECEPTION OR
USE OF ANY SIGNAL OR SERVICE OVER A CABLE
TELEVISION SYSTEM OR CABLE INTERNET
SYSTEM AND/OR NETWORK, AND FOR OTHER
PURPOSES
Be it enacted by the Senate and House of
Representatives of the Philippines in Congress
assembled:
SECTI! ". Short Title. # This $%t shall &e 'nown as the
($nti-Ca&le Television and Ca&le Internet Ta))ing $%t of
*+",-.
SEC. *. Declaration of Policy. # The State re%ogni.es
the indis)ensa&le role of the )rivate se%tor, en%ourages
)rivate enter)rise, and )rovides in%entives to needed
invest/ents. 0ursuant thereto, this $%t ai/s to )rote%t
the Ca&le Television and Ca&le Internet Industries fro/
%a&le )ilferage.
SEC. ,. Definition of Terms. # $s used in this $%t1
2a3 Cable Television C!T"# Service refers to the
trans/ission or delivery of video and audio signals and
)rogra//ing for a fee, through fi&er o)ti%s, %oa4ial
%a&le and other te%hnologi%al /eans.
2&3 Cable $nternet Service refers to the trans/ission or
delivery of ele%troni% signals for a fee, to )rovide and
fa%ilitate a%%ess to the worldwide we&, for a fee, through
a C$T5 trans/ission or delivery syste/6networ'.
2%3 Cable Television C!T"# System%&et'or( refers to a
fa%ility engaged in the trans/ission or delivery of video
and audio signals and )rogra//ing for a fee, through
fi&er o)ti%s, %oa4ial %a&le and other te%hnologi%al
/eans.
2d3 Cable $nternet System%&et'or( refers to a fa%ility
engaged in the trans/ission or delivery of ele%troni%
signals for a fee, to )rovide and fa%ilitate a%%ess to the
worldwide we&, for a fee, through a C$T5 trans/ission
or delivery syste/6networ'.
2e3 Cable Television C!T"# Service Provider refers to
any )erson, natural or 7uridi%al, )u&li% or )rivate, whi%h
was granted a Certifi%ate of $uthority or 0rovisional
$uthority as )rovided under e4isting laws, rules and
regulations, to install, o)erate and /aintain a C$T5
Syste/6!etwor' and is a%tually )roviding Ca&le
Television 2C$T53 Servi%e to its su&s%ri&ers.
2f3 Cable $nternet Service Provider refers to any )erson,
natural or 7uridi%al, )u&li% or )rivate, whi%h was issued a
registration %ertifi%ate as )rovided under e4isting laws,
rules and regulations, to )rovide and fa%ilitate a%%ess to
the worldwide we&, for a fee, through a C$T5
trans/ission or delivery syste/6networ' and is a%tually
)roviding Ca&le Internet Servi%e to its su&s%ri&ers.
SEC. 8. Prohibited !cts. # It is here&y de%lared unlawful
for any )erson, whether natural or 7uridi%al, )u&li% or
)rivate, to1
2a3 inter%e)t or re%eive, or assist in inter%e)ting or
re%eiving, any signal offered over a %a&le television
syste/ or a %a&le internet syste/ &y ta))ing, /a'ing or
%ausing to &e /ade, any %onne%tion to an e4isting C$T5
Syste/6!etwor' or Ca&le Internet Syste/6!etwor'
without the authority of the %on%erned C$T5 Servi%e
0rovider or Ca&le Internet Servi%e 0rovider9
2&3 re%ord, re)rodu%e, distri&ute, i/)ort or sell, any
inter%e)ted or re%eived C$T5 Syste/6!etwor' signals
for %o//er%ial )ur)oses without the authority of the
%on%erned C$T5 Servi%e 0rovider or Ca&le Internet
Servi%e 0rovider9
2%3 use or re%eive any dire%t or indire%t &enefit, fro/ any
C$T5 Syste/6!etwor' or Ca&le Internet
Syste/6!etwor' with 'nowledge that it is a result of any
of a%ts enu/erated in )aragra)hs 2a3 or 2&3 a&ove9 or
2d3 wantonly, /ali%iously and willfully da/age, destroy or
re/ove C$T5 and6or Ca&le Internet fa%ilities and
a%%essories of authori.ed C$T5 and6or Ca&le Internet
Servi%e 0roviders.
SEC. :. Penalties. # $ny )erson who %o//its any of the
unlawful a%ts enu/erated in the ne4t )re%eding se%tion
shall &e )unished with i/)rison/ent of not less than two
2*3 years &ut not /ore than five 2:3 years or a fine of not
less than ;ifty thousand )esos 20:+,+++.++3 nor /ore
than ne hundred thousand )esos 20"++,+++.++3 or
&oth, at the dis%retion of the %ourt. If the offender is a
%or)oration or asso%iation, the )resident, /anager,
/anaging )artner or any offi%er of the %or)oration or
)artnershi) who dire%tly )arti%i)ated in the violation of
this $%t shall &e held lia&le.
SEC. <. $nformation Dissemination. # =ithin si4ty 2<+3
days after the effe%tivity of this $%t, the !ational
Tele%o//uni%ations Co//ission shall underta'e an
infor/ation disse/ination %a/)aign to infor/ the )u&li%
of the e4isten%e of this $%t.
SEC. >. Rules and Regulations. # The !ational
Tele%o//uni%ations Co//ission, in %onsultation with
C$T5 and Ca&le Internet Servi%e 0roviders and other
affe%ted )arties, shall, within si4ty 2<+3 days after the
%ondu%t of )u&li% hearings whi%h /ust %o//en%e within
thirty 2,+3 wor'ing days u)on the effe%tivity of this $%t,
issue the i/)le/enting rules and regulations to ensure
the effi%ient and effe%tive i/)le/entation of the
)rovisions of this $%t.
SEC. ?. Separability Clause. # If, for any reason, any
se%tion or )rovision of this $%t is held invalid or
un%onstitutional, the re/ainder of the law or the
)rovisions not otherwise affe%ted shall re/ain valid and
su&sisting.
SEC. @. Repealing Clause. # $ll laws, )residential
de%rees or issuan%es, e4e%utive orders, letters of
instru%tion, ad/inistrative orders, rules or regulations
%ontrary to, or in%onsistent with the )rovisions of this $%t
are here&y re)ealed, /odified or a/ended a%%ordingly.
SEC. "+. )ffectivity Clause. # This $%t shall ta'e effe%t
fifteen 2":3 days after its %o/)lete )u&li%ation in at least
two 2*3 news)a)ers of general %ir%ulation.
PRESIDENTIAL DECREE No. 11!
ANTI"FENCING LAW OF 1#$#
=AEBE$S, re)orts fro/ law enfor%e/ent agen%ies
reveal that there is ra/)ant ro&&ery and thievery of
govern/ent and )rivate )ro)erties9
=AEBE$S, su%h ro&&ery and thievery have &e%o/e
)rofita&le on the )art of the lawless ele/ents &e%ause of
the e4isten%e of ready &uyers, %o//only 'nown as
fen%e, of stolen )ro)erties9la'phil.net
=AEBE$S, under e4isting law, a fen%e %an &e
)rose%uted only as an a%%essory after the fa%t and
)unished lightly9
=AEBE$S, is i/)erative to i/)ose heavy )enalties on
)ersons who )rofit &y the effe%ts of the %ri/es of ro&&ery
and theft.
!=, TAEBE;BE, I, ;EBCI!$!C E. M$BCS,
0resident of the 0hili))ines &y virtue of the )owers
vested in /e &y the Constitution, do here&y order and
de%ree as )art of the law of the land the following1
S%&'(o) 1. Title. This de%ree shall &e 'nown as the $nti-
;en%ing Daw.
S%&'(o) !. Cefinition of Ter/s. The following ter/s shall
/ean as follows1
2a3 E;en%ingE is the a%t of any )erson who, with
intent to gain for hi/self or for another, shall &uy,
re%eive, )ossess, 'ee), a%Fuire, %on%eal, sell or
dis)ose of, or shall &uy and sell, or in any other
/anner deal in any arti%le, ite/, o&7e%t or
anything of value whi%h he 'nows, or should &e
'nown to hi/, to have &een derived fro/ the
)ro%eeds of the %ri/e of ro&&ery or theft.
2&3 E;en%eE in%ludes any )erson, fir/,
asso%iation %or)oration or )artnershi) or other
organi.ation who6whi%h %o//its the a%t of
fen%ing.
S%&'(o) *. 0enalties. $ny )erson guilty of fen%ing shall
&e )unished as hereunder indi%ated1
2a3 The )enalty of )rision /ayor, if the value of
the )ro)erty involved is /ore than "*,+++ )esos
&ut not e4%eeding **,+++ )esos9 if the value of
su%h )ro)erty e4%eeds the latter su/, the
)enalty )rovided in this )aragra)h shall &e
i/)osed in its /a4i/u/ )eriod, adding one year
for ea%h additional "+,+++ )esos9 &ut the total
)enalty whi%h /ay &e i/)osed shall not e4%eed
twenty years. In su%h %ases, the )enalty shall &e
ter/ed re%lusion te/)oral and the a%%essory
)enalty )ertaining thereto )rovided in the
Bevised 0enal Code shall also &e i/)osed.
2&3 The )enalty of )rision %orre%%ional in its
/ediu/ and /a4i/u/ )eriods, if the value of
the )ro)erty ro&&ed or stolen is /ore than <,+++
)esos &ut not e4%eeding "*,+++ )esos.
2%3 The )enalty of )rision %orre%%ional in its
/ini/u/ and /ediu/ )eriods, if the value of the
)ro)erty involved is /ore than *++ )esos &ut
not e4%eeding <,+++ )esos.
2d3 The )enalty of arresto /ayor in its /ediu/
)eriod to )rision %orre%%ional in its /ini/u/
)eriod, if the value of the )ro)erty involved is
over :+ )esos &ut not e4%eeding *++ )esos.
2e3 The )enalty of arresto /ayor in its /ediu/
)eriod if su%h value is over five 2:3 )esos &ut not
e4%eeding :+ )esos.
2f3 The )enalty of arresto /ayor in its /ini/u/
)eriod if su%h value does not e4%eed : )esos.
S%&'(o) +. Dia&ility of ffi%ials of Juridi%al 0ersons. If the
fen%e is a )artnershi), fir/, %or)oration or asso%iation,
the )resident or the /anager or any offi%er thereof who
'nows or should have 'nown the %o//ission of the
offense shall &e lia&le.
S%&'(o) 5. 0resu/)tion of ;en%ing. Mere )ossession of
any good, arti%le, ite/, o&7e%t, or anything of value whi%h
has &een the su&7e%t of ro&&ery or thievery shall &e
)ri/a fa%ie eviden%e of fen%ing.
S%&'(o) . Clearan%e60er/it to Sell6Gsed Se%ond Aand
$rti%les. ;or )ur)oses of this $%t, all stores,
esta&lish/ents or entities dealing in the &uy and sell of
any good, arti%le ite/, o&7e%t of anything of value
o&tained fro/ an unli%ensed dealer or su))lier thereof,
shall &efore offering the sa/e for sale to the )u&li%,
se%ure the ne%essary %learan%e or )er/it fro/ the
station %o//ander of the Integrated !ational 0oli%e in
the town or %ity where su%h store, esta&lish/ent or entity
is lo%ated. The Chief of Consta&ulary6Cire%tor Heneral,
Integrated !ational 0oli%e shall )ro/ulgate su%h rules
and regulations to %arry out the )rovisions of this
se%tion. $ny )erson who fails to se%ure the %learan%e or
)er/it reFuired &y this se%tion or who violates any of the
)rovisions of the rules and regulations )ro/ulgated
thereunder shall u)on %onvi%tion &e )unished as a
fen%e. la'phi*.net
S%&'(o) $. Be)ealing Clause. $ll laws or )arts thereof,
whi%h are in%onsistent with the )rovisions of this Ce%ree
are here&y re)ealed or /odified a%%ordingly.
S%&'(o) ,. Effe%tivity. This Ce%ree shall ta'e effe%t u)on
a))roval.
Cone in the City of Manila, this *nd day of Mar%h, in the
year of ur Dord, nineteen hundred and seventy-nine.
RULES AND REGULATIONS TO CARRY OUT THE
PROVISIONS OF SECTION OF PRESIDENTIAL
DECREE NO. 11!, KNOWN AS THE ANTI"FENCING
LAW.
0ursuant to Se%tion < of 0residential Ce%ree !o. "<"*,
'nown as the $nti-;en%ing Daw, the following rules and
regulations are here&y )ro/ulgated to govern the
issuan%e of %learan%es6)er/its to sell used se%ondhand
arti%les o&tained fro/ an unli%ensed dealer or su))lier
thereof1
I. Cefinition of Ter/s
". EGsed se%ondhand arti%leE shall refer to any
goods, arti%le, ite/, o&7e%t or anything of value
o&tained fro/ an unli%ensed dealer or su))lier,
regardless of whether the sa/e has a%tually or
in fa%t &een used.
*. EGnli%ensed dealer6su))lierE shall refer to any
)ersons, )artnershi), fir/, %or)oration,
asso%iation or any other entity or esta&lish/ent
not li%ensed &y the govern/ent to engage in the
&usiness of dealing in or of su))lying the arti%les
defined in the )re%eding )aragra)h.
,. EStoreE, Eesta&lish/entE or EentityE shall &e
%onstrued to in%lude any individual dealing in the
&uying and selling used se%ondhand arti%les, as
defined in )aragra)h hereof.
8. EBuy and SellE refer to the transa%tion
where&y one )ur%hases used se%ondhand
arti%les for the )ur)ose of resale to third
)ersons.
:. EStation Co//anderE shall refer to the Station
Co//ander of the Integrated !ational 0oli%e
within the territorial li/its of the town or %ity
distri%t where the store, esta&lish/ent or entity
dealing in the &uying and selling of used
se%ondhand arti%les is lo%ated.
II. Cuty to 0ro%ure Clearan%e or 0er/it
". !o )erson shall sell or offer to sell to the
)u&li% any used se%ondhand arti%le as defined
herein without first se%uring a %learan%e or
)er/it for the )ur)ose fro/ the )ro)er Station
Co//ander of the Integrated !ational 0oli%e.
*. If the )erson see'ing the %learan%e or )er/it
is a )artnershi), fir/, %or)oration, or asso%iation
or grou) of individuals, the %learan%e or )er/it
shall &e o&tained &y or in the na/e of the
)resident, /anager or other res)onsi&le offi%er-
in-%harge thereof.
,. If a store, fir/, %or)oration, )artnershi),
asso%iation or other esta&lish/ent or entity has
a &ran%h or su&sidiary and the used
se%ondhand arti%le is a%Fuired &y su%h &ran%h
or su&sidiary for sale to the )u&li%, the said
&ran%h or su&sidiary shall se%ure the reFuired
%learan%e or )er/it.
8. $ny goods, arti%le, ite/, or o&7e%t or anything
of value a%Fuired fro/ any sour%e for whi%h no
re%ei)t or eFuivalent do%u/ent eviden%ing the
legality of its a%Fuisition %ould &e )resented &y
the )resent )ossessor or holder thereof, or the
%overing re%ei)t, or eFuivalent do%u/ent, of
whi%h is fa'e, falsified or irregularly o&tained,
shall &e )resu/ed as having &een a%Fuired
fro/ an unli%ensed dealer or su))lier and the
)ossessor or holder thereof /ust se%ure the
reFuired %learan%e or )er/it &efore the sa/e
%an &e sold or offered for sale to the )u&li%.
III. 0ro%edure for 0ro%ure/ent of Clearan%es or 0er/its
". The Station Co//anders %on%erned shall
reFuire the owner of a store or the )resident,
/anager or res)onsi&le offi%er-in-%harge of a
fir/, esta&lish/ent or other entity lo%ated within
their res)e%tive 7urisdi%tions and in )ossession
of or having in sto%' used se%ondhand arti%les
as defined herein, to su&/it an initial affidavit
within thirty 2,+3 days fro/ re%ei)t of noti%e for
the )ur)ose thereof and su&seFuent affidavits
on%e every fifteen 2":3 days within five 2:3 days
after the )eriod %overed, whi%h shall %ontain1
2a3 $ %o/)lete inventory of su%h arti%les
a%Fuired daily fro/ whatever sour%e
and the na/es and addresses of the
)ersons fro/ who/ su%h arti%les were
a%Fuired.
2&3 $ full list of arti%les to &e sold or
offered for sale as well as the )la%e
where the date when the sale or offer for
sale shall %o//en%e.
2%3 The )la%e where the arti%les are
)resently de)osited or 'e)t in sto%'.
The Station Co//ander /ay, at his dis%retion
when the %ir%u/stan%es of ea%h %ase warrant,
reFuire that the affidavit su&/itted &e
a%%o/)anied &y other do%u/ents showing )roof
of legiti/a%y of the a%Fuisition of the arti%les.
*. $ )arty reFuired to se%ure a %learan%e or
)er/it under these rules and regulations shall
file an a))li%ation therefor with the Station
Co//ander %on%erned. The a))li%ation shall
state1
2a3 The na/e, address and other
)ertinent %ir%u/stan%es of the )ersons,
in %ase of an individual or, in the %ase of
a fir/, %or)oration, asso%iation,
)artnershi) or other entity, the na/e,
address and other )ertinent
%ir%u/stan%es of the )resident,
/anager or offi%er-in-%harge.
2&3 The arti%le to &e sold or offered for
sale to the )u&li% and the na/e and
address of the unli%ensed dealer or
su))lier fro/ who/ su%h arti%le was
a%Fuired.
In su))ort of the a))li%ation, there shall &e
atta%hed to it the %orres)onding re%ei)t or other
eFuivalent do%u/ent to show )roof of the
legiti/a%y of a%Fuisition of the arti%le.
,. The Station Co//ander shall e4a/ine the
do%u/ents atta%hed to the a))li%ation and /ay
reFuire the )resentation of other additional
do%u/ents, if ne%essary, to show satisfa%tory
)roof of the legiti/a%y of a%Fuisition of the
arti%le, su&7e%t to the following %onditions1
2a3 If the legiti/a%y of a%Fuisition of any
arti%le fro/ an unli%ensed sour%e %annot
&e satisfa%torily esta&lished &y the
do%u/ents )resented, the Station
Co//ander shall, u)on a))roval of the
I!0 Su)erintendent in the distri%t and at
the e4)ense of the )arty see'ing the
%learan%e6)er/it, %ause the )u&li%ation
of a noti%e in a news)a)er of general
%ir%ulation for two 2*3 su%%essive days
enu/erating therein the arti%les
a%Fuired fro/ an unli%ensed dealer or
su))lier, the na/es and addresses of
the )ersons fro/ who/ they were
a%Fuired and shall state that su%h
arti%les are to &e sold or offered for sale
to the )u&li% at the address of the store,
esta&lish/ent or other entity see'ing the
%learan%e6)er/it. In )la%es where no
news)a)ers are in general %ir%ulation,
the )arty see'ing the %learan%e or
)er/it shall, instead, )ost a noti%e daily
for one wee' on the &ulletin &oard of the
/uni%i)al &uilding of the town where the
store, fir/, esta&lish/ent or entity
%on%erned is lo%ated or, in the %ase of
an individual, where the arti%les in his
)ossession are to &e sold or offered for
sale.
2&3 If after ": days, u)on e4)iration of
the )eriod of )u&li%ation or of the noti%e
referred to in the )re%eding )aragra)h,
no %lai/ is /ade with res)e%t to any of
the arti%les enu/erated in the noti%e,
the Station Co//ander shall issue the
%learan%e or )er/it sought.
2%3 If, &efore e4)iration of the sa/e
)eriod for )u&li%ation of the noti%e or its
)osting, it shall a))ear that any of the
arti%les in Fuestion is stolen )ro)erty,
the Station Co//ander shall hold the
arti%le in restraint as eviden%e in any
a))ro)riate %ase to &e filed. $rti%les
held in restraint shall &e 'e)t and
dis)osed of as the %ir%u/stan%es of
ea%h %ase )er/it, ta'ing into a%%ount all
%onsiderations of right and 7usti%e in the
%ase. In any %ase where any arti%le is
held in restraint, it shall &e the duty of
the Station Co//ander %on%erned to
advise6notify the Co//ission on $udit
of the %ase and %o/)ly with su%h
)ro%edure as /ay &e )ro)er under
a))li%a&le e4isting laws, rules and
regulations.
8. The Station Co//ander %on%erned shall,
within seventy-two 2>*3 hours fro/ re%ei)t of the
a))li%ation, a%t thereon &y either issuing the
%learan%e6)er/it reFuested or denying the
sa/e. Cenial of an a))li%ation shall &e in writing
and shall state in &rief the reason6s therefor.
:. The a))li%ation, %learan%e6)er/it or the denial
thereof, in%luding su%h other do%u/ents as /ay
&e )ertinent in the i/)le/entation of Se%tion <
of 0.C. !o. "<"* shall &e in the for/s )res%ri&ed
in $nne4es E$E, EBE, ECE, ECE, and EEE hereof,
whi%h are /ade integral )arts of these rules and
regulations.
<. ;or the issuan%e of %learan%es6)er/it
reFuired under Se%tion < of 0.C. !o. "<"*, no
fee shall &e %harged.
I5. $))eals
$ny )arty aggrieved &y the a%tion ta'en &y the Station
Co//ander /ay elevate the de%ision ta'en in the %ase
to the )ro)er I!0 Cistri%t Su)erintendent and, if he is still
dissatisfied therewith /ay ta'e the sa/e on a))eal to
the I!0 Cire%tor. The de%ision of the I!0 Cire%tor /ay
also &e a))ealed to the I!0 Cire%tor-Heneral whose
de%ision /ay li'ewise &e a))ealed to the Minister of
!ational Cefense. The de%ision of the Minister of
!ational Cefense on the %ase shall &e final. The a))eal
against the de%ision ta'en &y a Co//ander lower than
the I!0 Cire%tor-Heneral should &e filed to the ne4t
higher Co//ander within ten 2"+3 days fro/ re%ei)t of
noti%e of the de%ision. The de%ision of the I!0 Cire%tor-
Heneral should &e a))ealed within fifteen 2":3 days fro/
re%ei)t of noti%e of the de%ision.
5. 0enalties
". $ny )erson who fails to se%ure the %learan%e
or )er/it reFuired &y Se%tion < of 0.C. "<"* or
who violates any of the )rovisions of these rules
and regulations shall u)on %onvi%tion &e
)unished as a fen%e.
*. The I!0 Cire%tor-Heneral shall re%o//end to
the )ro)er authority the %an%ellation of the
&usiness li%ense of the erring individual, store,
esta&lish/ent or the entity %on%erned.
,. $rti%les o&tained fro/ unli%ensed sour%es for
sale or offered for sale without )rior %o/)lian%e
with the )rovisions of Se%tion < of 0.C. !o. "<"*
and with these rules and regulations shall &e
held in restraint until satisfa%tory eviden%e or
legiti/a%y of a%Fuisition has &een esta&lished.
8. $rti%les for whi%h no satisfa%tory eviden%e of
legiti/a%y of a%Fuisition is esta&lished and
whi%h are found to &e stolen )ro)erty shall
li'ewise &e held under restraint and shall,
further/ore, &e su&7e%t to %onfis%ation as
eviden%e in the a))ro)riate %ase to &e filed. If,
u)on ter/ination of the %ase, the sa/e is not
%lai/ed &y their legiti/ate owners, the arti%le6s
shall &e forfeited in favor of the govern/ent and
/ade su&7e%t to dis)osition as the
%ir%u/stan%es warrant in a%%ordan%e with
a))li%a&le e4isting laws, rules and regulations.
The Co//ission on $udit shall, in all %ases, &e
notified.
:. $ny )ersonnel of the Integrated !ational
0oli%e found violating the )rovisions of Se%tion <
of 0.C. !o. "<"* or any of its i/)le/enting rules
and regulations or who, in any /anner
whatsoever, %onnives with or through his
negligen%e or ina%tion /a'es )ossi&le the
%o//ission of su%h violations &y any )arty
reFuired to %o/)ly with the law and its
i/)le/enting rules and regulations, shall &e
)rose%uted %ri/inally without )re7udi%e to the
i/)osition of ad/inistrative )enalties.
5I. 5isitorial 0ower
It shall &e the duty of the owner of the store or of the
)resident, /anager or res)onsi&le offi%er-in-%harge of
any fir/, esta&lish/ent or other entity or of an individual
having in his )re/ises arti%les to &e sold or offered for
sale to the )u&li% to allow the Station Co//ander or his
authori.ed re)resentative to e4er%ise visitorial )owers.
;or this )ur)ose, however, the )ower to %ondu%t
visitations shall &e e4er%ise only during offi%e or
&usiness hours and u)on authority in writing fro/ and &y
the I!0 Su)erintendent in the distri%t and for the sole
)ur)ose of deter/ining whether arti%les are 'e)t in
)ossession or sto%' %ontrary to the intents of Se%tion <
of 0.C. !o. "<"* and of these rules and regulations.
5II. ther Cuties I/)osed G)on Station Co//anders
and I!0 Cistri%t Su)erintendent and Cire%tors ;ollowing
$%tion on $))li%ations for Clearan%es or 0er/its
". $t the end of ea%h /onth, it shall &e the duty
of the Station Co//ander %on%erned to1
2a3 Ma'e and /aintain a file in his offi%e
of all %learan%es6)er/it issued &y hi/.
2&3 Su&/it a full re)ort to the I!0 Cistri%t
Su)erintendent on the nu/&er of
a))li%ations for %learan%es or )er/its
)ro%essed &y his offi%e, indi%ating
therein the nu/&er of
%learan%es6)er/its issued and the
nu/&er of a))li%ations denied. The
re)ort shall state the reasons for denial
of an a))li%ation and the %orres)onding
follow-u) a%tions ta'en and shall &e
a%%o/)anied &y an inventory of the
arti%les to &e sold or offered for sale in
his 7urisdi%tion.
*. The I!0 Cistri%t Su)erintendent shall, on the
&asis of the re)orts su&/itted &y the Station
Co//ander, in turn su&/it Fuarterly re)orts to
the a))ro)riate I!0 Cire%tor %ontaining a
%onsolidation of the infor/ation stated in the
re)orts of Station Co//anders in his
7urisdi%tion.
,. Be)orts fro/ I!0 Cistri%t Su)erintendent shall
serve as &asis for a %onsolidated re)ort to &e
su&/itted se/i-annually &y I!0 Cire%tors to the
Cire%tor-Heneral, Integrated !ational 0oli%e.
8. In all %ases, re)orts e/anating fro/ the
different levels of the Integrated !ational 0oli%e
shall &e a%%o/)anied with full and a%%urate
inventories of the arti%les a%Fuired fro/
unli%ensed dealers or su))liers and )ro)osed to
&e sold or offered for sale in the 7urisdi%tions
%overed &y the re)ort.
These i/)le/enting rules and regulations, having &een
)u&lished in a news)a)er of national %ir%ulation, shall
ta'e effe%t on June ":, "@>@.
;B TAE CAIE; ; C!ST$BGD$BI CIBECTB-
HE!EB$D, I!01
G.R. No. L"1* S%-'%./%0 !,, 1#,+
ELPIDIO EMPELIS, MAMERTO CARBUNGCO,
SALVADOR CARBUNGCO 1)2 EMILIO
CARBUNGCO,)etitioners,
vs.
HON. INTERMEDIATE APPELLATE COURT 1)2 THE
PEOPLE OF THE PHILIPPINES, res)ondents.
Roselito R. !poya for petitioners+
The Solicitor ,eneral for respondents.

RELOVA, J.:
The then Muni%i)al Cir%uit Court of Ci/asalang-
0alanan-Gson, Mas&ate %onvi%ted herein )etitioners of
Fualified theft of fifty %o%onuts valued at 0:+.++ and
senten%ed ea%h of the/ to an indeter/inate )enalty of
fro/ four 283 to eight 2?3 years and one 2"3 day, to
restore to the owner of the stolen %o%onuts, Huiller/o
Catarining the su/ of 0:+.++ and to )ay the %osts.
;ro/ the foregoing 7udg/ent they went to the
Inter/ediate $))ellate Court %lai/ing that the %ourt a
-uo erred1 2"3 in %onvi%ting all a%%used when there was
no suffi%ient eviden%e to )rove that they did gather and
steal the %o%onut fruits of the %o%onut )lantation of
Huiller/o Catarining at Ta/&angan, Ca)da), Gson,
Mas&ate, 0hili))ines9 2*3 in giving too /u%h )ro&ative
value to the eviden%e for the )rose%ution and in
dis%rediting that for the defense9 and 2,3 in not a%Fuitting
all the a%%used of the %ri/e %harged on the ground of
reasona&le dou&t. 2)). ?-@, Bollo3
Bes)ondent a))ellate %ourt affir/ed in toto the )enalty
i/)osed u)on )etitioners &y the trial %ourt. Aen%e,
instant )etition whi%h see's to redu%e the )enalty
i/)osed u)on )etitioners &y the trial %ourt, whi%h was
affir/ed in toto &y res)ondent Inter/ediate $))ellate
Court. 2). ", Bollo3
The fa%ts as found &y res)ondent Inter/ediate $))ellate
Court are as follows1
0rior to June "+, "@>@, Huiller/o
Catarining owner of a %o%onut )lantation
in Sitio Ta/&angan, Ca)da), Gson,
Mas&ate, was freFuently losing
%o%onuts in his )lantation due to
thievery. Thus, on the early /orning of
June "+, "@>@, while he stayed in his
)lantation to 'ee) wat%h, he saw four 283
)ersons within the )re/ises of his
)lantation gathering and tying so/e
%o%onuts. Ae then went ho/e, fet%hed
his neigh&ors $nasta%io $ndales and
Teodo/ero Haray and too' along a
flashlight. G)on rea%hing the %o%onut
)lantation with his %o/)anions,
Catarining &ea/ed his flashlight on the
four )ersons who, turned out to &e the
herein a))ellants. El)idio E/)elis and
E/ilio Car&ung%o were seen %arrying
%o%onuts on a )ie%e of wood on their
shoulders while Salvad and Ma/erto
Car&ung%o were es)ied %arrying
%o%onuts with their &are hands. $s the
four )ersons noti%ed the )resen%e of
Catarining and the latterJs %o/)anions,
they dro))ed the %o%onuts they were
%arrying and fled leaving &ehind a&out
:+ )ie%es of %o%onuts valued at 0:+.++
and two )oles, one /ade of &a/&oo
and the other of wood. 2E4hs. $ K $-"3
Catarining invited the &arangay tanod to
witness the %ounting of the %o%onuts
a&andoned &y the four /en. G)on the
advi%e of said tanod, Catarining
re)orted the in%ident to the &arangay
%a)tain who a%%o/)anied hi/ and his
%o/)anions to the )oli%e station at
Gson, Mas&ate where Catarining filed
his %o/)laint. 2)). 8>-8?, Bollo3
The only issue raised with earnestness &y )etitioners is
that the %ri/e %o//itted, if at all is si/)le and not
Fualified theft as found &y res)ondent %ourt.
$rti%le ,"+ of the Bevised 0enal Code states that the
%ri/e of theft shall E&e )unished &y the )enalties ne4t
higher &y two degrees than those res)e%tively
e4)ressed in the ne4t )re%eding arti%le ... if the )ro)erty
stolen ... %onsists of %o%onuts ta'en fro/ the )re/ises of
a )lantation, ... .E Thus, the stealing of %o%onuts when
they are still in the tree or de)osited on the ground within
the )re/ises is Fualified theft. =hen the %o%onuts are
stolen in any other )la%e, it is si/)le theft. Stated
differently, if the %o%onuts were ta'en in front of a house
along the highway outside the %o%onut )lantation, it
would &e si/)le theft only.
In the %ase of People vs. $snain+ ?: 0hil. <8?, this Court
held that E[i]n the /atter of theft of %o%onuts, the )ur)ose
of the heavier )enalty is to en%ourage and )rote%t the
develo)/ent of the %o%onut industry as one of the
sour%es of our national e%ono/y. Gnli'e ri%e and sugar
%ane far/s where the range of vision is uno&stru%ted,
%o%onut groves %an not &e effi%iently wat%hed &e%ause
of the nature of the growth of %o%onut trees9 and without
a s)e%ial /easure to )rote%t this 'ind of )ro)erty, of will
&e as it has &een in the )ast the favorite resort of
thieves.E
In the %ase at &ar, )etitioners were seen arriving away
fifty %o%onuts while they were still in the )re/ises of the
)lantation. They would therefore %o/e within the
definition of Fualified theft &e%ause the )ro)erty stolen
%onsists of %o%onuts ta'en fro/ the )re/ises of a
)lantation.
Aowever, the %ri/e %o//itted is only frustrated Fualified
theft &e%ause )etitioners were not a&le to )erfor/ all the
a%ts of e4e%ution whi%h should have )rodu%ed the felon
as a %onseFuen%e. They were not a&le to %arry the
%o%onuts away fro/ the )lantation due to the ti/ely
arrival of the owner.
=AEBE;BE, the 7udg/ent of %onvi%tion is here&y
$;;IBMEC &ut /odified in the sense that the %ri/e
%o//itted is only frustrated Fualified theft and
)etitioners El)idio E/)elis, Ma/erto Car&ung%o,
Salvador Car&ung%o and E/ilio Car&ung%o are ea%h
senten%ed to suffer the indeter/inate )enalty of two 2*3
/onths and one 2"3 day ofarresto mayor+ as /ini/u/, to
two 2*3 years and four 283 /onths and one 2"3 day,
of prision correccional+ as /a4i/u/, and to )ay the
%osts
S BCEBEC.
3G. R. No. 1+,!**. 45)% ,, !00+6
PEOPLE OF THE PHILIPPINES, appellee,
vs. LUISITO D. BUSTINERA, appellant.
D E C I S I O N
CARPIO MORALES, J.7
;ro/ the de%ision
["]
of the Begional Trial Court,
Bran%h *">, Lue.on City finding a))ellant Duisito C.
Bustinera guilty &eyond reasona&le dou&t of Fualified
theft
[*]
for the unlawful ta'ing of a Caewoo Ba%er HTE
Ta4i and senten%ing hi/ to suffer the )enalty
of reclusion perpetua, he %o/es to this Court on a))eal.
In an infor/ation
[,]
dated June ">, "@@>, a))ellant
was indi%ted as follows1
The undersigned a%%uses DGISIT C. BGSTI!EB$ of
the %ri/e of Lualified Theft, %o//itted as follows1
That on or a&out the *:
th
day of Ce%e/&er u) to the
@
th
day of January, "@@>, in Lue.on City, 0hili))ines, the
said a%%used &eing then e/)loyed as one [of] the ta4i
Crivers of Elias S. Ci)riano, an )erator of several ta4i
%a&s with &usiness address at %orner 88 Co//onwealth
$venue, ili/an 2sic3, this City, and as su%h has free
a%%ess to the ta4i he &eing driven, did then and there
willfully, unlawfully and feloniously with intent to gain,
with grave a&use of %onfiden%e re)osed u)on hi/ &y his
e/)loyer and without the 'nowledge and %onsent of the
owner thereof, ta'e, steal and %arry away a Caewoo
Ba%er HTE Ta4i with 0late !o. 0=A-*<<
worth0,+,,+++.++, 0hili))ine Curren%y, &elonging to
Elias S. Ci)riano, to the da/age and )re7udi%e of the
said offended )arty in the a/ount of 0,+,,+++.++.
C!TB$BI T D$=.
G)on arraign/ent
[8]
on Mar%h *>, *+++, a))ellant,
assisted &y %ounsel de oficio, entered a )lea of not
guilty. Thereafter, trial on the /erits ensued.
;ro/ the eviden%e for the )rose%ution, the following
version is esta&lished.
So/eti/e in "@@<, Edwin Ci)riano 2Ci)riano3, who
/anages ESC Trans)ort, the ta4i%a& &usiness of his
father, hired a))ellant as a ta4i driver and assigned hi/
to drive a Caewoo Ba%er with )late nu/&er 0=A-*<<. It
was agreed that a))ellant would drive the ta4i fro/ <1++
a./. to ""1++ )./, after whi%h he would return it to ESC
Trans)ortMs garage and re/it the &oundary fee in the
a/ount of 0>?+.++ )er day.
[:]
n Ce%e/&er *:, "@@<, a))ellant ad/ittedly
re)orted for wor' and drove the ta4i, &ut he did not
return it on the sa/e day as he was su))osed to.
L1 !ow, Mr. =itness, on Ce%e/&er *:, "@@<,
did you re)ort for wor'N
$1 Ies, sir.
L1 !ow, sin%e you re)orted for wor', what are
your duties and res)onsi&ilities as ta4i
driver of the ta4i %o/)anyN
$1 T81' 9% 81:% 'o /0(); /1&< '8% '1=( 1'
)(;8' 9('8 '8% /o5)210> .
L1 Aow /u%h is your &oundaryN
$1 0>?+.++, sir.
L1 O) D%&%./%0 !5, 1##, 2(2 >o5 /0();
o5' 1)> '1=(?
$1 Y%@, @(0.
L1 !ow, when ever 2sic3 you &ring out a ta4i,
what )ro%edure [do] you follow with that
%o/)anyN
$1 That we have to &ring &a%' the ta4i to the
%o/)any and &efore we leave we also
sign so/ething, sir.
L1 =hat is that so/ething you /entionedN
$1 n the re%ord &oo' and on the daily tri)
ti%'et, sir.
L1 Iou said that you have to return your ta4i at
the end of the day, what is then the
)ro%edure refle%t 2sic3 &y your %o/)any
when you return a ta4iN
$1 To re/it the &oundary and to sign the
re%ord &oo' and daily tri) ti%'et.
L1 So, when you return the ta4i, you sign the
re%ord &oo'N
$1 Ies, sir.
L1 Yo5 .%)'(o)%2 '81' o) D%&%./%0 !5,
1##, >o5 /0o5;8' o5' 1 '1=(?
$1 Y%@, @(0.
L1 W81' <()2 oA '1=(?
$1 D1%9oo '1=(, @(0.
L1 No9 2(2 >o5 0%'50) '8% '1=( o)
D%&%./%0 !5, 1##?
$1 I 91@ )o' 1/B% 'o /0(); /1&< '8% '1=(
/%&15@% I 91@ @8o0' oA .> /o5)210>,
@(0.
[<]
The following day, Ce%e/&er *<, "@@<, Ci)riano
went to a))ellantMs house to as%ertain why the ta4i was
not returned.
[>]
$rriving at a))ellantMs house, he did not
find the ta4i there, a))ellantMs wife telling hi/ that her
hus&and had not yet arrived.
[?]
Deaving nothing to
%han%e, Ci)riano went to the Co//onwealth $venue
)oli%e station and re)orted that his ta4i was /issing.
[@]
n January @, "@@>, a))ellantMs wife went to the
garage of ESC Trans)ort and revealed that the ta4i had
&een a&andoned in Begalado Street, Dagro, Lue.on
City.
["+]
Ci)riano lost no ti/e in re)airing to Begalado
Street where he re%overed the ta4i.
[""]
G)on the other hand, while a))ellant does not deny
that he did not return the ta4i on Ce%e/&er *:, "@@< as
he was short of the &oundary fee, he %lai/s that he did
not a&andon the ta4i &ut a%tually returned it on January
:, "@@>9
["*]
and that on Ce%e/&er *>, "@@<, he gave the
a/ount of 0*,+++.++
[",]
to his wife who/ he instru%ted to
re/it the sa/e to Ci)riano as )ay/ent of the &oundary
fee
["8]
and to tell the latter that he %ould not return the ta4i
as he still had a &alan%e thereof.
[":]
$))ellant, however, ad/its that his wife infor/ed
hi/ that when she went to the garage to re/it the
&oundary fee on the very sa/e day 2Ce%e/&er *>,
"@@<3,
["<]
Ci)riano was already de/anding the return of
the ta4i.
[">]
$))ellant /aintains though that he returned the ta4i
on January :, "@@> and signed the re%ord &oo',
["?]
whi%h
was %o/)any )ro%edure, to show that he indeed
returned it and gave his e/)loyer 0*,:++.++
["@]
as )artial
)ay/ent for the &oundary fee %overing the )eriod fro/
Ce%e/&er *:, "@@< to January :, "@@>.
Continuing, a))ellant %lai/s that as he still had a
&alan%e in the &oundary fee, he left his driverMs li%ense
with Ci)riano9
[*+]
that as he %ould not drive, whi%h was
the only wor' he had ever 'nown, without his driverMs
li%ense, and with the o&ligation to )ay the &alan%e of the
&oundary fee still lingering, his wife started wor'ing on
;e&ruary "?, "@@> as a stay-in /aid for Ci)riano, with a
/onthly salary of 0",,++.++,
[*"]
until Mar%h *<, "@@>
when Ci)riano told her that she had wor'ed off the
&alan%e of his o&ligation9
[**]
and that with his o&ligation
e4tinguished, his driverMs li%ense was returned to hi/.
[*,]
Brushing aside a))ellantMs %lai/ that he returned
the ta4i on January :, "@@> and that he had in fa%t )aid
the total a/ount of 08,:++.++, the trial %ourt found hi/
guilty &eyond reasona&le dou&t of Fualified theft &y
Ce%ision of May ">, *++", the dis)ositive )ortion of
whi%h is Fuoted verbatim1
WHEREFORE, 7udg/ent is here&y rendered finding
a%%used guilty &eyond reasona&le dou&t as %harged,
and he is a%%ordingly senten%ed to suffer the )enalty
of Reclusion Perpetua and to )ay the %osts.
In the servi%e of his senten%e, a%%used is ordered
%redited with four-fifths 2
8
6:3 of the )reventive
i/)rison/ent undergone &y hi/ there &eing no showing
that he agreed in writing to a&ide &y the sa/e
dis%i)linary rules i/)osed u)on %onvi%ted )risoners.
SO ORDERED.
[*8]
2E/)hasis and itali%s in the original3
Aen%e, the )resent a))eal an%hored on the
following assigned errors1
I.
TAE CGBT ! ./0 HB$5EDI EBBEC I!
C!CDGCI!H =ITAGT C!CBETE B$SIS TA$T
TAE $CCGSEC-$00EDD$!T A$S I!TE!T T H$I!
=AE! AE ;$IDEC T BETGB! TAE T$OI T ITS
H$B$HE.
II.
TAE CGBT ! ./0 HB$5EDI EBBEC I! ;I!CI!H
$CCGSEC-$00EDD$!T HGIDTI BEI!C
BE$S!$BDE CGBT ; TAE CBIME ; LG$DI;IEC
TAE;T.
[*:]
It is settled that an a))eal in a %ri/inal )ro%eeding
throws the whole %ase o)en for review, and it &e%o/es
the duty of the a))ellate %ourt to %orre%t su%h errors as
/ay &e found in the 7udg/ent even if they have not &een
s)e%ifi%ally assigned.
[*<]
$))ellant was %onvi%ted of Fualified theft under
$rti%le ,"+ of the Bevised 0enal Code, as a/ended for
the unlawful ta'ing of a /otor vehi%le. Aowever, $rti%le
,"+ has &een /odified, with res)e%t to %ertain vehi%les,
[*>]
&y Be)u&li% $%t !o. <:,@, as a/ended, otherwise
'nown as E$! $CT 0BE5E!TI!H $!C 0E!$DIPI!H
C$B!$00I!H.Q
=hen statutes are in pari materia
[*?]
or when they
relate to the sa/e )erson or thing, or to the sa/e %lass
of )ersons or things, or %over the sa/e s)e%ifi% or
)arti%ular su&7e%t /atter,
[*@]
or have the sa/e )ur)ose or
o&7e%t,
[,+]
the rule di%tates that they should &e %onstrued
together # interpretare et concordare leges legibus+ est
optimus interpretandi modus.
[,"]
Every statute /ust &e so
%onstrued and har/oni.ed with other statutes as to for/
a unifor/ syste/ of 7uris)ruden%e,
[,*]
as this Court
e4)lained in City of &aga v. !gna,
[,,]
vi11
. . . =hen statutes are in pari materia, the rule of
statutory %onstru%tion di%tates that they should &e
%onstrued together. This is &e%ause ena%t/ents of the
sa/e legislature on the sa/e su&7e%t /atter are
su))osed to for/ )art of one unifor/ syste/9 that later
statutes are su))le/entary or %o/)li/entary to the
earlier ena%t/ents and in the )assage of its a%ts the
legislature is su))osed to have in /ind the e4isting
legislation on the sa/e su&7e%t and to have ena%ted its
new a%t with referen%e thereto. Aaving thus in /ind the
)revious statutes relating to the sa/e su&7e%t /atter,
whenever the legislature ena%ts a new law, it is dee/ed
to have ena%ted the new )rovision in a%%ordan%e with
the legislative )oli%y e/&odied in those )rior statutes
unless there is an e4)ress re)eal of the old and they all
should &e %onstrued together. I) &o)@'05(); '8%. '8%
oB2 @'1'5'%@ 0%B1'(); 'o '8% @1.% @5/C%&' .1''%0
@8o5B2 /% &o.-10%2 9('8 '8% )%9 -0o:(@(o)@ 1)2 (A
-o@@(/B% /> 0%1@o)1/B% &o)@'05&'(o), /o'8 @8o5B2 /%
@o &o)@'05%2 '81' %AA%&' .1> /% ;(:%) 'o %:%0>
-0o:(@(o) oA %1&8. Ho9%:%0, 98%) '8% )%9 -0o:(@(o)
1)2 '8% oB2 0%B1'(); 'o '8% @1.% @5/C%&' &1))o' /%
0%&o)&(B%2 '8% Ao0.%0 @81BB -0%:1(B 1@ (' (@ '8% B1''%0
%=-0%@@(o) oA '8% B%;(@B1'(:% 9(BB . . .
[,8]
2E/)hasis
and unders%oring su))lied9 %itations o/itted3
The ele/ents of the %ri/e of theft as )rovided for in
$rti%le ,+? of the Bevised 0enal Code are1 2"3 that there
&e ta'ing of )ersonal )ro)erty9 2*3 that said )ro)erty
&elongs to another9 2,3 that the ta'ing &e done with
intent to gain9 283 that the ta'ing &e done without the
%onsent of the owner9 and 2:3 that the ta'ing &e
a%%o/)lished without the use of violen%e against or
inti/idation of )ersons or for%e u)on things.
[,:]
Theft is Fualified when any of the following
%ir%u/stan%es is )resent1 2"3 the theft is %o//itted &y a
do/esti% servant9 2*3 the theft is %o//itted with grave
a&use of %onfiden%e9 2,3 the )ro)erty stolen is either
a /otor vehi%le, /ail /atter or large %attle9 283 the
)ro)erty stolen %onsists of %o%onuts ta'en fro/ the
)re/ises of a )lantation9 2:3 the )ro)erty stolen is fish
ta'en fro/ a fish)ond or fishery9 and 2<3 the )ro)erty
was ta'en on the o%%asion of fire, earthFua'e, ty)hoon,
vol%ani% eru)tion, or any other %ala/ity, vehi%ular
a%%ident or %ivil distur&an%e.
[,<]
n the other hand, Se%tion * of Be)u&li% $%t !o.
<:,@, as a/ended defines (%arna))ingQ as (the ta'ing,
with intent to gain, of a /otor vehi%le &elonging to
another without the latterJs %onsent, or &y /eans of
violen%e against or inti/idation of )ersons, or &y using
for%e u)on things.Q The ele/ents of %arna))ing are thus1
2"3 the ta'ing of a /otor vehi%le whi%h &elongs to
another9 2*3 the ta'ing is without the %onsent of the
owner or &y /eans of violen%e against or inti/idation of
)ersons or &y using for%e u)on things9 and 2,3 the ta'ing
is done with intent to gain.
[,>]
Carna))ing is essentially the ro&&ery or theft of a
/otori.ed vehi%le,
[,?]
the %on%e)t of unlawful ta'ing in
theft, ro&&ery and %arna))ing &eing the sa/e.
[,@]
In the *+++ %ase of People v. Tan
[8+]
where the
a%%used too' a Mitsu&ishi Hallant and in the later %ase
of People v. 2obitania
[8"]
whi%h involved the ta'ing of a
Ia/aha /otori.ed tri%y%le, this Court held that the
unlawful ta'ing of /otor vehi%les is now %overed &y the
anti-%arna))ing law and not &y the )rovisions on
Fualified theft or ro&&ery.
T8%0% (@ )o 10;5(); '81' '8% 1)'("&10)1--(); B19 (@ 1
@-%&(1B B19, 2(AA%0%)' A0o. '8% &0(.% oA 0o//%0> 1)2
'8%A' ()&B52%2 () '8% R%:(@%2 P%)1B Co2%. It
)arti%ularly addresses the ta'ing, with intent to gain, of a
/otor vehi%le &elonging to another without the latterJs
%onsent, or &y /eans of violen%e against or inti/idation
of )ersons, or &y using for%e u)on things. But a %areful
%o/)arison of this s)e%ial law with the %ri/es of ro&&ery
and theft readily reveals their %o//on features and
%hara%teristi%s, to wit1 unlawful ta'ing, intent to gain, and
that )ersonal )ro)erty &elonging to another is ta'en
without the latterJs %onsent. Ho9%:%0, '8% 1)'("
&10)1--(); B19 -10'(&5B10B> 2%1B@ 9('8 '8% '8%A' 1)2
0o//%0> oA .o'o0 :%8(&B%@. Aen%e a /otor vehi%le is
said to have &een %arna))ed when it has &een ta'en,
with intent to gain, without the ownerJs %onsent, whether
the ta'ing was done with or without the use of for%e
u)on things. W('8o5' '8% 1)'("&10)1--(); B19, @5&8
5)B19A5B '1<(); oA 1 .o'o0 :%8(&B% 9o5B2 A1BB 9('8()
'8% -50:(%9 oA %('8%0 '8%A' o0 0o//%0> 98(&8 91@
&%0'1()B> '8% &1@% /%Ao0% '8% %)1&'.%)' oA @1(2
@'1'5'%.
[8*]
2E/)hasis and unders%oring su))lied9
%itations o/itted.3
It is to &e noted, however, that while the anti-
%arna))ing law )enali.es the unlawful ta'ing of /otor
vehi%les, it e4%e)ts fro/ its %overage %ertain vehi%les
su%h as roadrollers, trolleys, street-swee)ers, s)rin'lers,
lawn /owers, a/)hi&ian tru%'s and %ranes if not used
on )u&li% highways, vehi%les whi%h run only on rails and
tra%'s, and tra%tors, trailers and tra%tor engines of all
'inds and used e4%lusively for agri%ultural )ur)oses. By
i/)li%ation, the theft or ro&&ery of the foregoing vehi%les
would &e %overed &y $rti%le ,"+ of the Bevised 0enal
Code, as a/ended and the )rovisions on ro&&ery,
res)e%tively.
[8,]
;ro/ the foregoing, sin%e a))ellant is &eing
a%%used of the unlawful ta'ing of a Caewoo sedan, it is
the anti-%arna))ing law and not the )rovisions of
Fualified theft whi%h would a))ly as the said /otor
vehi%le does not fall within the e4%e)tions /entioned in
the anti-%arna))ing law.
The designation in the infor/ation of the offense
%o//itted &y a))ellant as one for Fualified theft
notwithstanding, a))ellant /ay still &e %onvi%ted of the
%ri/e of %arna))ing. ;or while it is ne%essary that the
statutory designation &e stated in the infor/ation, a
/ista'e in the %a)tion of an indi%t/ent in designating the
%orre%t na/e of the offense is not a fatal defe%t as it is
not the designation that is %ontrolling &ut the fa%ts
alleged in the infor/ation whi%h deter/ines the real
nature of the %ri/e.
[88]
In the %ase at &ar, the infor/ation alleges that
a))ellant, with intent to gain, too' the ta4i owned &y
Ci)riano without the latterMs %onsent.
[8:]
Thus, the
indi%t/ent alleges every ele/ent of the %ri/e of
%arna))ing,
[8<]
and the )rose%ution )roved the sa/e.
$))ellantMs a))eal is thus &ereft of /erit.
That a))ellant &rought out the ta4i on Ce%e/&er
*:, "@@< and did not return it on the sa/e day as he
was su))osed to is ad/itted.
[8>]
Gnlawful ta'ing, or apoderamiento, is the ta'ing of
the /otor vehi%le without the %onsent of the owner, or &y
/eans of violen%e against or inti/idation of )ersons, or
&y using for%e u)on things9 it is dee/ed %o/)lete fro/
the /o/ent the offender gains )ossession of the thing,
even if he has no o))ortunity to dis)ose of the sa/e.
[8?]
=hile the nature of a))ellantMs )ossession of the
ta4i was initially lawful as he was hired as a ta4i driver
and was entrusted )ossession thereof, his a%t of not
returning it to its owner, whi%h is %ontrary to %o/)any
)ra%ti%e and against the ownerMs %onsent transfor/ed
the %hara%ter of the )ossession into an unlawful one.
[8@]
$))ellant hi/self ad/its that he was aware that his
)ossession of the ta4i was no longer with Ci)rianoMs
%onsent as the latter was already de/anding its return.
L1 $lso you said that during your dire%t
testi/ony that when you gave your wife
the 0*,:++.++, you also told her to go to
the %o/)any to as' the %o/)any for
)er/ission for you to use the ta4i sin%e
you were then still short of the
&oundary. $lright, after telling that to your
wife and after seeing your wife &etween
Ce%e/&er *>, "@@< and January :, "@@>,
did you as' your wife what was the
answer of the %o/)any to that reFuest of
yoursN
$1 Ae did not allow /e, sir, and he even [got]
angry with /e.
L1 So, when did you learn that the %o/)any
was not agreea&le to your /a'ing use of
the ta4i%a& without first returning it to the
%o/)anyN
$1 Before the new year, sir.
L1 =hen you said new year, you were
referring to January ", "@@>N
$1 Either Ce%e/&er *@ or Ce%e/&er ,+,
"@@<, sir.
L1 So, 10% >o5 '%BB(); 5@ '81' %:%) (A >o5
<)%9 1B0%12> '81' '8% &o.-1)> 91@
)o' 1;0%%1/B% 'o >o50 .1<(); 5@% oA
'8% '1=(&1/ &o)'()51BB> D@(&E 9('8o5'
0%'50)(); '8% @1.% 'o '8%
&o.-1)>, >o5 @'(BB 9%)' 18%12 1)2
.1<% DsicE 5@% oA (' 1)2 0%'50)%2 (' o)B>
o) 41)510> 5, 1##$.
$1 Ies, sir.
[:+]
2E/)hasis and unders%oring
su))lied3
$))ellant assails the trial %ourtMs %on%lusion that
there was intent to gain with the /ere ta'ing of the ta4i
without the ownerMs %onsent. Ae /aintains that his
reason for failing to return the ta4i was his ina&ility to
re/it the &oundary fee, his earnings that day not having
)er/itted it9 and that there was no intent to gain sin%e
the ta'ing of the ta4i was not )er/anent in %hara%ter, he
having returned it.
$))ellantMs )osition does not )ersuade.
Intent to gain or animus lucrandi is an internal a%t,
)resu/ed fro/ the unlawful ta'ing of the /otor vehi%le.
[:"]
$%tual gain is irrelevant as the i/)ortant
%onsideration is the intent to gain.
[:*]
The ter/ (gainQ is
not /erely li/ited to )e%uniary &enefit &ut also in%ludes
the &enefit whi%h in any other sense /ay &e derived or
e4)e%ted fro/ the a%t whi%h is )erfor/ed.
[:,]
Thus, the
/ere use of the thing whi%h was ta'en without the
ownerMs %onsent %onstitutes gain.
[:8]
In "illacorta v. $nsurance Commission
[::]
whi%h was
reiterated in !ssociation of Baptists for 3orld
)vangelism+ $nc. v. 4ieldmen5s $nsurance Co+ $nc.,
[:<]
Justi%e Claudio Teehan'ee 2later Chief Justi%e3,
inter)reting the theft %lause of an insuran%e )oli%y,
e4)lained that, when one ta'es the /otor vehi%le of
another without the latterMs %onsent %:%) (A '8% .o'o0
:%8(&B% (@ B1'%0 0%'50)%2, there is theft, there &eing
intent to gain as the use of the thing unlawfully ta'en
%onstitutes gain1
$ssu/ing, des)ite the totally inadeFuate eviden%e, '81'
'8% '1<(); 91@ F'%.-o010>G and for a (7oy rideQ, the
Court sustains as the &etter view
[:>]
that whi%h holds that
when a )erson, either with the o&7e%t of going to a
%ertain )la%e, or learning how to drive, or en7oying a free
ride, ta'es )ossession of a vehi%le &elonging to another,
without the %onsent of its owner, 8% (@ ;5(B'> oA
'8%A' &e%ause &y ta'ing )ossession of the )ersonal
)ro)erty &elonging to another and using it, 8(@ ()'%)' 'o
;1() (@ %:(2%)' @()&% 8% 2%0(:%@ '8%0%A0o. 5'(B('>,
@1'(@A1&'(o), %)Co>.%)' 1)2 -B%1@50%. 45@'(&%
R1.o) C. AH5()o &('%@ () 8(@ 9o0< G0o(I102 98o
8oB2@ '81' '8% 5@% oA 1 '8(); &o)@'('5'%@ ;1() 1)2
C5%BBo C1Bo) 98o &1BB@ (' F850' 2% 5@o .Q
[:?]
2E/)hasis
and unders%oring su))lied9 %itation o/itted3
Besides, the trial %ourt did not &elieve a))ellantMs
%lai/ that he in fa%t returned the ta4i on January :,
"@@>.
The Court %an not 2sic3 &elieve a%%usedMs assertion that
he returned the su&7e%t vehi%le on January :, "@@> to
the garage and that he had in fa%t )aid the a/ount
of 08,:++.++ in )artial )ay/ent of his unre/itted
(&oundaryQ for ten 2"+3 days. Ae %ould not even &e
%ertain of the e4a%t a/ount he allegedly )aid the ta4i%a&
owner. n dire%t-e4a/ination, he %lai/ed that he )aid
Edwin Ci)riano on Ce%e/&er *>, "@@< the a/ount
of 0*,+++.++ and it was his wife who handed said
a/ount to Ci)riano, yet on %ross-e4a/ination, he
%lai/ed that he gave 0*,:++.++ to his wife on that date
for )ay/ent to the ta4i%a& owner.
[:@]
The rule is well-entren%hed that findings of fa%t of
the trial %ourt are a%%orded the highest degree of res)e%t
and will not &e distur&ed on a))eal a&sent any %lear
showing that the trial %ourt had overloo'ed,
/isunderstood or /isa))lied so/e fa%ts or
%ir%u/stan%es of weight and signifi%an%e whi%h, if
%onsidered, would alter the result of the %ase.
[<+]
The
reason for the rule &eing that trial %ourts have the distin%t
advantage of having heard the witnesses the/selves
and o&served their de)ort/ent and /anner of testifying
or their %ondu%t and &ehavior during the trial.
[<"]
ther than his &are and self-serving allegations,
a))ellant has not shown any s%intilla of eviden%e that he
indeed returned the ta4i on January :, "@@>.
L1 Iou said that you returned the ta4i on
January :, "@@>, %orre%tN
$1 Ies, sir.
L1 No9, M0. W(')%@@, 2(2 >o5 @(;) 1)>
0%&o02 98%) >o5 0%'50)%2 '8% '1=(?
$1 Y%@, @(0.
L1 Do >o5 81:% 1)> &o-> oA '81' 0%&o02?
$1 T8%> 9%0% '8% o)% DsicE ()"&810;% oA '8%
0%&o02 /oo< 1)2 I %:%) :oB5)'10(B> B%A'
.> 20(:%0J@ B(&%)@% 9('8 '8%., @(0.
L1 Iou said that you did not return the ta4i
&e%ause you were short of 2sic3 &oundary,
did you turn over any /oney to your
e/)loyer when you returned the ta4iN
$1 I gave the/ [an] additional 0*,:++.++, sir.
L1 $t the ti/e when you returned the ta4i, how
/u%h was your short inde&tedness 2sic3
or short &oundary 2sic3N
$1 I was short for ten 2"+3 days, and I was
a&le to )ay 08,:++.++.
L1 Do >o5 81:% 1)> 0%&%(-' 'o @8o9 0%&%(-'
oA -1>.%)' Ao0 '8(@ P+,500.00?
$1 T8%> 9%0% '8% o)%@ 81:(); '8% 0%&o02 oA
.> -1>.%)', 1)2 o50 1;0%%.%)' 91@
'81' I 81:% 'o -1> '8% /1B1)&% ()
()@'1BB.%)'.
[<*]
2E/)hasis su))lied3
=hile a))ellant /aintains that he signed on
January :, "@@> the re%ord &oo' indi%ating that he
returned the ta4i on the said date and )aid Ci)riano the
a/ount of 08,:++.++ as )artial )ay/ent for the
&oundary fee, a))ellant did not )rodu%e the
do%u/entary eviden%e alluded to, to su&stantiate his
%lai/. That su%h alleged re%ord &oo' is in the
)ossession of Ci)riano did not )revent hi/ fro/
)rodu%ing it as a))ellant has the right to have
%o/)ulsory )ro%ess issued to se%ure the )rodu%tion of
eviden%e on his &ehalf.
[<,]
The trial %ourt having %onvi%ted a))ellant of
Fualified theft instead of %arna))ing, it erred in the
i/)osition of the )enalty. =hile the infor/ation alleges
that the %ri/e was attended with grave a&use of
%onfiden%e, the sa/e %annot &e a))re%iated as the
su))letory effe%t of the Bevised 0enal Code to s)e%ial
laws, as )rovided in $rti%le "+ of said Code, %annot &e
invo'ed when there is a legal i/)ossi&ility of a))li%ation,
either &y e4)ress )rovision or &y ne%essary i/)li%ation.
[<8]
Moreover, when the )enalties under the s)e%ial law
are different fro/ and are without referen%e or relation to
those under the Bevised 0enal Code, there %an &e no
su))letory effe%t of the rules, for the a))li%ation of
)enalties under the said Code or &y other relevant
statutory )rovisions are &ased on or a))li%a&le only to
said rules for felonies under the Code.
[<:]
Thus, in People v. Panida
[<<]
whi%h involved the
%ri/e of %arna))ing and the )enalty i/)osed was the
indeter/inate senten%e of "8 years and ? /onths, as
/ini/u/, to "> years and 8 /onths, as /a4i/u/, this
Court did not a))ly the )rovisions of the Bevised 0enal
Code su))letorily as the anti-%arna))ing law )rovides for
its own )enalties whi%h are distin%t and without
referen%e to the said Code.
The %harge &eing si/)le %arna))ing, the i/)osa&le
)enalty is i/)rison/ent for not less than "8 years and ?
/onths and not /ore than "> years and 8
/onths. T8%0% &1) /% )o @5--B%'o0> %AA%&' oA '8%
05B%@ Ao0 '8% 1--B(&1'(o) oA -%)1B'(%@ 5)2%0 '8%
R%:(@%2 P%)1B Co2% o0 /> o'8%0 0%B%:1)' @'1'5'o0>
-0o:(@(o)@ /1@%2 o), o0 1--B(&1/B% o)B> 'o, '8% 05B%@
Ao0 A%Bo)(%@ 5)2%0 '8% Co2%. W8(B% (' (@ '05% '81' '8%
-%)1B'> oA 1+ >%10@ 1)2 , .o)'8@ 'o 1$ >%10@ 1)2 +
.o)'8@ (@ :(0'51BB> %H5(:1B%)' 'o '8% 2501'(o) oA '8%
.%2(5. -%0(o2 oA reclusion temporal , @5&8 '%&8)(&1B
'%0. 5)2%0 '8% R%:(@%2 P%)1B Co2% (@ )o' ;(:%) 'o
'81' -%)1B'> Ao0 &10)1--();. B%@(2%@, '8% o'8%0
-%)1B'(%@ Ao0 &10)1--(); 1''%)2%2 /> '8% H51B(A>();
&(0&5.@'1)&%@ @'1'%2 () '8% B19 2o )o' &o00%@-o)2
'o '8o@% () '8% Co2%. The rules on )enalties in the
Code, therefore, %annot su))letorily a))ly to Be)u&li%
$%t !o. <:,@ and s)e%ial laws of the sa/e for/ulation.
;or this reason, we hold that the )ro)er )enalty to &e
i/)osed on ea%h of a%%used-a))ellants is an
indeter/inate senten%e of "8 years and ? /onths, as
/ini/u/, to "> years and 8 /onths, as /a4i/u/.
[<>]
2E/)hasis and unders%oring su))lied9 %itations
o/itted3
$))ellant &eing then %ul)a&le for %arna))ing under
the first %lause of Se%tion "8 of Be)u&li% $%t !o. <:,@,
as a/ended, the i/)osa&le )enalty is i/)rison/ent for
not less than "8 years and ? /onths, not /ore than ">
years and 8 /onths,
[<?]
for, as dis%ussed a&ove, the
)rovisions of the Bevised 0enal Code %annot &e a))lied
su))letorily and, therefore, the alleged aggravating
%ir%u/stan%e of grave a&use of %onfiden%e %annot &e
a))re%iated.
$))lying Se%tion " of $%t !o. 8"+,,
[<@]
as a/ended,
otherwise 'nown as the Indeter/inate Senten%e Daw, if
the offense is )unisha&le &y a s)e%ial law, the %ourt shall
senten%e the a%%used to an indeter/inate senten%e, the
/a4i/u/ ter/ of whi%h shall not e4%eed the /a4i/u/
fi4ed &y said law and the /ini/u/ ter/ shall not &e less
than the /ini/u/ )res%ri&ed &y the sa/e # the )enalty
i/)osed &eing a range.
[>+]
WHEREFORE, the 7udg/ent of the Begional Trial
Court of Lue.on City, Bran%h *">, in Cri/ Case !o. L-
@>->"@:<, finding a))ellant Duisito C. Bustinera guilty
&eyond reasona&le dou&t of Fualified theft,
is BE5EBSEC and SET $SICE, and another 7udg/ent
entered in its )la%e, finding hi/ guilty &eyond reasona&le
dou&t of the %ri/e of %arna))ing under Be)u&li% $%t !o.
<:,@, as a/ended and senten%ing hi/ to an
indeter/inate )enalty of ;ourteen 2"83 Iears and Eight
2?3 Months, as /ini/u/, to Seventeen 2">3 Iears and
;our 283 Months, as /a4i/u/.
SO ORDERED.
FIRST DIVISION
3G.R. No. #10+1 7 D%&%./%0 10, 1##0.6
1#! SCRA !$$
4OSE A. SADDUL, 4R., Petitioner, vs. THE HON.
COURT OF APPEALS 1)2 THE PEOPLE OF THE
PHILIPPINES, Respondents.

D E C I S I O N

GRIKO"ALUINO, J.:
Before the Court is the Se%ond Motion for
Be%onsideration filed &y the )etitioner, Jose $. Saddul,
Jr., )raying that we set aside our resolution of $)ril "<,
"@@+ denying his )etition for review of the de%ision
)ro/ulgated on Se)te/&er ", "@?@ &y the Court of
$))eals in C$-H.B. CB !o. +<*,8, entitled1 EThe 0eo)le
of the 0hili))ines, 0laintiff-$))ellee vs. Jose $. Saddul,
Jr., $%%used-$))ellantE whi%h affir/ed on a))eal the
7udg/ent of the Begional Trial Court of Manila, finding
hi/ guilty of estafa under $rti%le ,":, )ar. "2&3 of the
Bevised 0enal Code. $fter deli&erating on the /otion for
re%onsideration and the res)ondentsJ %o//ents, the
Court resolved to grant the /otion and set aside its
resolution of $)ril "<, "@@+.
In "@>,, the )etitioner &e%a/e a vi%e-)resident and
dire%tor of $/alga/ated Motors 20hils.3 In%. 2$M0I for
&revity3 2). :, tsn, ;e&ruary ":, "@??3. $M0I was then a
wholly-owned su&sidiary of British Deyland 2). ,", tsn,
!ove/&er @, "@?@3. It was the sole distri&utor in the
0hili))ines of British and Ja)anese heavy eFui)/ent,
tru%'s, far/ i/)le/ents, s)are )arts, and other
auto/otive )rodu%ts and /a%hines /anufa%tured &y
Deyland International, Dand Bover Dtd. 2D$!C B5EB
for &revity3, $velyn Barfourd, Mitsu&ishi, and ;uro'awa
2). >, tsn, ;e&ruary ":, "@??9 ). <, tsn, !ove/&er @,
"@?>3.
Sin%e "@?+, ;eli/on B. Cuevas had &een a dealer of
$M0I for govern/ent sales. In "@?", he &ought into the
%o/)any and &e%a/e its /a7ority sto%'holder and
)resident 2). :, tsn, ;e&ruary ":, "@??3. G)on CuevasJ
as%endan%y in the %or)oration, Saddul was /ade a
dire%tor as well as E4e%utive 5i%e-0resident and Heneral
Manager. $s su%h, he was in %harge of the o)erations of
the %o/)any and was EdelegatedE to /a'e sales of
so/e units and s)are )arts 2). >, tsn, !ove/&er @,
"@?@3. $s distri&utor not only of British &ut also
Ja)anese auto/otive )rodu%ts, $M0I %arried an
inventory of so/e 0": to 0*+ /illion worth of s)are
)arts of the %o/)anies it re)resented in the 0hili))ines
2). ,>, tsn, !ove/&er @, "@?>3.
In "@?:, D$!C B5EB su))lied 0".: /illion worth of
s)are )arts to the $r/ed ;or%es of the 0hili))ines 2$;03
through $M0I, &ut the /er%handise were returned to
$M0I &e%ause they were not the %orre%t ite/s needed
&y the $;0 2). *>, tsn, ;e&ruary ":, "@??3. The )arts
were 'e)t &y $M0I )ending dis)osal instru%tions fro/
D$!C B5EB.
n Mar%h 8, "@?:, Erwin Dyndsay, D$!C B5EBJs area
/anager for Southeast $sia, sent the following letter to
Saddul, E4e%utive 5i%e-0resident and Heneral Manager
of $M0I, regarding the s)are )arts re7e%ted &y the $;01
ECear Joe1
E;urther to /y letter dated *> ;e&ruary "@?:, we
have now given %onsideration to the /atter of
dis)osal of the Dand Bover )arts wrongly
su))lied to $.;.0. and %urrently held &y $/)i on
our &ehalf, )ending dis)osal instru%tions fro/
us.
E$s agreed in )rin%i)le during our /eeting, we
now authori.e you to underta'e the dis)osal of
the )arts at the &est )ossi&le )ri%es availa&le
fro/ your lo%al /ar'et.
E=e would e4)e%t you to detail to us all sales of
)art nu/&er, Fuantity sold and )ri%e o&tained.
E=e agree that a su/ a/ounting to *+R of the
sale value &e retained &y $/alga/ated Motors
as a handling %harge and that the &alan%e is
)la%ed into a se)arate %lient a%%ount whi%h will
&e availa&le to DB0E or any other )arty
authori.ed &y DB0E.
EI trust that these arrange/ents /eet with your
a))roval and will satisfa%torily solve the )ro&le/
of the $;0 )arts dis)osal.
EIf you have any )ro&le/s with the a&ove
arrange/ents or need any further authori.ations
at this stage, )lease do not hesitate to %onta%t
/e.
EIours sin%erely,
E2SHC3
EEB=I! DI!CS$I
$rea Manager-
South East $siaE
2E/)hasis ours1 E4h. I or ;. )). "*<, "8" BTC
Be%ord.3
Saddul sold so/e of the s)are )arts 2worth
0"8,,+?:.++3 to Bover Motor 0arts 2a different entity
fro/ D$!C B5EB3 whose )resident was Jose 0.
Har%ia. The sales were eviden%ed &y $M0I Sales
Invoi%es 2E4hs. $, $-", to $-?3 and su//ari.ed in the
State/ent of $%%ounts dated June @, "@?< 2E4h. B3 sent
&y $M0I to Bover Motor 0arts. 0ay/ents were /ade &y
the &uyer to Saddul. $M0IJs *+R handling %o//ission
on the sale a/ounted to 0*?,<">.
0ursuant to D$!C B5EBJs dire%tive that sale value of
these s)are )arts &e E)la%ed into a se)arate %lient
a%%ount whi%h will &e availa&le to DB0E or any other
)arty authori.ed &y DB0EE 2E4h. " or ;3, Saddul did not
de)osit the )ro%eeds of the sales in $M0IJs a%%ount &ut
held the/ in trust for D$!C B5EB. Saddul testified
thus1
E$TTI. BBDES1
EL Is there any reason why you have not
re/itted to $/alga/ated Motors 0hili))ines this
*+R handling %hargeN
E$ The reason is this transa%tion %overed a lot of
s)are )arts and the 0"8,,+?:.++ was only a )art
of the entire shi)/ent so that there is still an
a/ount due to Dand Bover Dtd. I was reFuested
&y Dand Bover Dtd. to hold on to the *+R until a
)ro)er a%%ount of the other side %ould &e /ade
and )ro%eeds of ite/s whi%h I do not 'now, only
they would 'now, how /u%h is owing
$/alga/ated Motors 0hili))ines, In%.E 2). "+,
tsn, ;e&ruary ":, "@??.3
E$tty. C$DIM$1
EL So, in other words, the instru%tions were
given to you &efore you sold to Bover Motor
0artsN
E$ Henerally, the instru%tion was to sell it for
Dand Bover and whi%h I did, sir. Su&seFuently,
when sales )ro%eeds were re%eived, I as'ed
the/ what will I do with the /oney and they
said, 'ee) the /oney until I %an give you the
ne%essary authority to o)en a%%ount for Dand
Bover.
EL My Fuestion to you is when did you re%eive
the instru%tion fro/ Dand BoverN $fter the sale
or &efore the sale was effe%ted to Bover Motor
0artsN
E$ Instru%tions for whatN
EL To withhold the )ro%eeds and not to re/it the
)ro%eedsN
E$ The instru%tion to hold, it is after the sale, sir.E
2). *,-*8, tsn, ;e&ruary ":, "@??.3
E$TTI. C$DIM$1
EL $nd ins)ite 2si%3 of the fa%t that $/alga/ated
Motors 0hili))ines, In%. %an retain *+R handling
%harge you were still instru%ted not to re/it the
*+R to $/alga/ated MotorsN
4 4 4
EJ. S$CCGD JB.1
E$ Ies, sir, I was told )ending full a%%ounting of
the entire volu/e of the transa%tion. $s soon as
the entire transa%tion is wor'ed out through the
a%%ounting )ro%ess then we will 'now whether
Dand Bover will owe Mr. Cuevas or Mr. Cuevas
will owe Dand Bover.
EL But again Mr. =itness, you will agree to this
)ortion referring to the handling %harge, it is not
Fualified &y )ro)er a%%ountingN
E$ !o, it is not, sir. In the letter, it is not.E 2). *?,
tsn, ;e&ruary ":, "@??.3
Saddul was Eter/inatedE &y $M0I in the early )art of
"@?< for %ause or %auses that Cuevas did not dis%lose,
&ut, a%%ording to Edgar Huilat%o, a )rose%ution witness,
Saddul Eleft the %o/)anyE 2)). <->, tsn, January <,
"@??3. Ae thereu)on for/ed his own outfit whi%h he
na/ed EMulti)art Motors International, In%.E =hat
a))ears in the re%ord is that on May ,+, "@?<, Dyndsay
wrote a letter to Saddul en%losing Ea note whi%h
effe%tively authori.es you to a%t as our distri&utorE 2E4h.
:3.1 nad
This a))oint/ent, although not yet offi%ial, /ust have
lea'ed to, and dee)ly wounded $M0IJs 0resident
;eli/on Cuevas. It was )resu/a&ly the reason why in a
letter of the sa/e date, May ,+, "@?<, through %ounsel
$tty. Ben7a/in H. Cali/a, $M0I de/anded fro/ Saddul
an a%%ounting of the s)are )arts su))osedly worth
0:>:,+:,.:+ sold &y hi/ to Bover Motor 0arts Eduring
the ti/e when you were still %onne%ted with the
%o/)anyE 2E4h. E3.
n !ove/&er "+, "@?<, Dyndsay wrote a letter to
Cuevas reFuesting for a state/ent on $M0IJs inventory
of British Deyland s)are )arts, indi%ating1
E". )ening sto%' &y )art nu/&er.
E*. Sales /ade &y )art nu/&er and )ri%e
o&tained.
E,. !et )ro%eeds %redited to %lient a%%ount.
E8. 0resent sto%' holding &y )art nu/&er.E 2).
"*>9 E4h. H, BTC Be%ord.3
Cuevas re)lied &y tele4 that so/e of those s)are )arts
had &een sold &y Saddul who did not turn over the
)ro%eeds to $M0I, and that he 2Cuevas3 filed a %ri/inal
%ase against Saddul Eto re%over the /oney so I %an
re/it i//ediatelyE 2E4h. A3.
n Mar%h *<, "@?>, Dyndsay sent a re)ly-tele4
reFuesting infor/ation as to Ewhi%h ite/s have &een
sold and at what )ri%e and whi%h ite/s re/ain in sto%'E
and sought Ea re%on%iliation of this sto%'E 2E4h. I3.
n June ,, "@?>, &ased on CuevasJ %o/)laint, an
infor/ation for estafa in the a/ount of 0"8,,+?:.++ 2I.S.
!o. ?<-*+<+>3 was filed against Saddul in the Begional
Trial Court of Manila1
EThat in or a&out and during the )eriod %o/)rised
&etween ;e&ruary "*, "@?: and Se)te/&er "+, "@?:,
in%lusive, in the City of Manila, 0hili))ines, the said
a%%used did then and there wilfully, unlawfully and
feloniously defraud $M$DH$M$TEC MTBS
20AIDS.3, I!C., a %or)oration duly organi.ed and e4isting
under the laws of the Be)u&li% of the 0hili))ines with
&usiness address at Deyland Aouse, *"st %orner
Bailroad Sts., 0ort $rea, this City, in the following
/anner, to wit1 the said a%%used, &eing then the
E4e%utive 5i%e-0resident and Heneral Manager of said
$/alga/ated Motors 20hils.3, In%., having &een
authori.ed &y Dand Bover 0arts K EFui)/ent Dtd.,
England, to underta'e dis)osal of re7e%ted s)are )arts
and engines at the &est )ossi&le )ri%es availa&le in the
lo%al /ar'et, whi%h re7e%ted s)are )arts and engines
were then held &y $/alga/ated Motors 20hils.3, In%. in
&ehalf of the Dand Bover 0arts K EFui)/ent Dtd.
)ending dis)osal and instru%tions fro/ the latter
%o/)any, a%tually dis)osed and offered the said )arts
and engines for sale to a %ertain Jose 0. Har%ia and
o&tained fro/ the latter the su/ of 0"8,,+?:.++ as
)ur%hase )ri%e of the sa/e, and the said a%%used, on%e
in )ossession of the said su/ of 0"8,,+?:.++, far fro/
%o/)lying with his o&ligation to turn over the )ro%eeds of
the sale to said $/alga/ated Motors 0hils., In%., failed
and refused, and still fails and refuses to do so
notwithstanding de/ands /ade u)on hi/, and instead,
with intent to defraud, he wilfully, unlawfully and
feloniously /isa))ro)riated, /isa))lied and %onverted
the sa/e to his own )ersonal use and &enefit, to the
da/age and )re7udi%e of said $M$DH$M$TEC
MTBS 20AIDS.3 I!C. in the aforesaid total a/ount of
0"8,,+?:.++, 0hili))ine %urren%y.E 2E/)hasis su))lied9
). ", BTC Be%ord3.1 rd
n $ugust <, "@?>, Dyndsay wrote Cuevas reFuesting
that all British Deyland )arts in the )ossession of $M0I
&e delivered to SaddulJs Multi)art Motors 0hili))ines,
In%. Ewho is our new )arts distri&utor for the 0hili))ines.E
Ae further advised Cuevas that Ein view of the %hange in
distri&utorshi) to Multi)art Motors, we will not hold you
2$M0I3 lia&leE for the )ro%eeds 20"8,,+?:.++3 of the
s)are )arts sold &y Saddul to Bover Motor 0arts. The
letter reads as follows1
E< $ugust "@?>
E$/alga/ated Motors 20hils.3 In%.
Bailroad Street Corner *"st Street
0ort $rea
Manila
0hili))ines
$ttention Col. ;eli/on B. Cuevas
Cear Sirs,
E=e have &een advised that Se%urity Ban' and
Trust Co. have o&tained a =rit of $tta%h/ent
over your )ro)erties and assets. =e further
understand that the )arts su))lied in error to
0hili))ine $r/ed ;or%es and returned to
$/alga/ated Motors for safe 'ee)ing have
&een in%luded under the $tta%h/ent. =e
therefore reFuest that you infor/ the &an' and
the Court that these )arts do not for/ )art of
your )ro)erties and assets and should in
%onseFuen%e, &e released fro/ the $tta%h/ent.
E=e should also &e )leased if you would transfer
these )arts to1
EMulti)art Motors 0hili))ines In%. who is our new
)arts distri&utor for the 0hili))ines.
E=e would ta'e this o))ortunity to raise the
/atter of the )arts and /a7or units whi%h were
already dis)osed of &efore the granting of the
=rit of $tta%h/ent.
E=e have &een advised &y Mr. Jose $. Saddul
that he is holding )ro%eeds of sale, a/ounting to
0esos "8,,+?8.++, of so/e of the su&7e%t )arts
in line with instru%tions %ontained in our letter
dated 8 Mar%h "@?:. =e &elieve that you are
aware of this arrange/ent. 0lease note that in
view of the %hange in distri&utorshi) to Multi)art
Motors, we will not hold you lia&le for this
a/ount, &ut will a%%e)t a%%ounts fro/ Mr.
Saddul %overing the )arts he has sold. $s
agreed, we will )rovide $/alga/ated Motors
with a handling %harge a/ounting to *+R of the
)ro%eeds and sale of these )arts.1 nad
E=ith regard to the &alan%e of )arts held &y you,
we shall &e grateful if you will )rovide to us an
a%%ount detailing sales /ade. G)on re%ei)t we
will settle your handling %harges at *+R of sales
as agreed.
E=e loo' forward to hearing fro/ you.
EIours sin%erely,
2SHC3
EB=I! DI!CS$I
Begional Manager
E4)ort SalesE 2Itali%s su))lied9 E4h. *, )). "8*-
"8,, BTC Be%ord3
Ces)ite the advi%e fro/ Dand Bover, $M0I )rose%uted
the %ri/inal %ase against Saddul. n $ugust *@, "@??,
the trial %ourt rendered a de%ision finding hi/ guilty of
estafa with unfaithfulness or a&use of %onfiden%e 2$rt.
,":, su&)ar. "-&, Bev. 0enal Code3. The dis)ositive )art
of the de%ision reads as follows1
E=AEBE;BE, the Court finds the a%%used Jose $.
Saddul, Jr. guilty &eyond reasona&le dou&t of the %ri/e
of estafa, defined and )enali.ed under $rti%le ,":, )ar.
"2&3 of the Bevised 0enal Code, involving the a/ount of
0*?,<">.++ and in the a&sen%e of any /odifying
%ir%u/stan%e, here&y senten%es hi/ to suffer an
indeter/inate )enalty ranging fro/ si4 2<3 /onths and
one 2"3 day of )rision %orre%%ional, as /ini/u/, to eight
2?3 years of )rision /ayor, as /a4i/u/, to inde/nify
the offended )arty, $/alga/ated Motors 20hils.3, In%., in
the a/ount of 0*?,<">.++ without su&sidiary
i/)rison/ent in %ase of insolven%y, and to )ay the
%osts.E 2). *<, Bollo.3
Saddul a))ealed to the Court of $))eals 2C$-H.B. CB
!o. +<*,8.3 n Se)te/&er ", "@?@, the Court of
$))eals affir/ed the trial %ourtJs de%ision. Aen%e, this
)etition for review.
The Court has %arefully %onsidered the )etition for
review on Certiorari and its anne4es, as well as the
%o//ents of the )u&li% res)ondent, in%luding the
original re%ords whi%h the Court %aused to &e elevated
for e4a/ination. =e find /erit in the )etition for review.
ne of the ways of %o//itting the %ri/e of estafa with
unfaithfulness or a&use of %onfiden%e is1
E2&3 By /isa))ro)riating or %onverting to the
)re7udi%e of another, /oney, goods, or any other
)ersonal )ro)erty re%eived &y the offender in
trust or on %o//ission, or for ad/inistration, or
under any other o&ligation involving the duty to
/a'e delivery of or to return the sa/e, even
though su%h o&ligation &e totally or )artially
guaranteed &y a &ond9 or &y denying having
re%eived su%h /oney, goods, or other )ro)erty.E
2$rt. ,":, )ar. " su&)ar. &, Bev. 0enal
Code.3.%hanro&les virtual law li&rary
The a))ro)riation or %onversion of /oney or )ro)erty
re%eived, to the )re7udi%e of the owner thereof, is the
essen%e of estafa through /isa))ro)riation 2Ba/ire., @
0hil. <>3. The words E%onvertE and E/isa))ro)riateE
%onnote an a%t of using or dis)osing of anotherJs
)ro)erty as if it were oneJs own, or of devoting it to a
)ur)ose or use different fro/ that agreed u)on. To
/isa))ro)riate to oneJs own use in%ludes, not only
%onversion to oneJs )ersonal advantage, &ut also every
atte/)t to dis)ose of the )ro)erty of another without
right. 2=e&&er vs. Court of $))eals, :> H *@,>9
0eo)le vs. 0anes, ,> 0hil. ""?.3
Conversion is an unauthori.ed assu/)tion and e4er%ise
of the right of ownershi) over goods or )ersonal %hattels
&elonging to another, resulting in the alteration of their
%ondition or the e4%lusion of the ownerJs rights. It ta'es
)la%e when a )erson a%tually a))ro)riates the )ro)erty
of another to his own &enefit, use, and en7oy/ent
2Trinidad vs. Court of $))eals, :, H >," %iting
BouvierJs Daw Ci%tionary3.
The ele/ents of the %ri/e of e/&e..le/ent or estafa
with a&use of %onfiden%e are1
2a3 that )ersonal )ro)erty is re%eived in trust, on
%o//ission, for ad/inistration or under any
other %ir%u/stan%e involving the duty to /a'e
delivery of or to return the sa/e, even though
the o&ligation is guaranteed &y a &ond9
2&3 that there is %onversion or diversion of su%h
)ro)erty &y the )erson who has so re%eived it or
a denial on his )art that he re%eived it9
2%3 that su%h %onversion, diversion or denial is to
the in7ury of another, and
2d3 that there &e de/and for the return of the
)ro)erty, 2). *8>, 5ol. III, "@?? Ed., Bevised
0enal Code &y B.C. $Fuino3
The first ele/ent of the %ri/e does not e4ist in this %ase
&e%ause Saddul did not re%eive the Deyland $uto/otive
s)are )arts fro/ Cuevas or $M0I in trust, on
%o//ission, for ad/inistration, or under a duty to /a'e
delivery of, or return the sa/e. Saddul re%eived the
Deyland s)are )arts fro/ the $;0 in trust for D$!C
B5EB whi%h authori.ed hi/ to sell the/ 2Ewe now
authori.e you to underta'e the dis)osal of the )arts at
the &est )ossi&le )ri%es availa&le fro/ your lo%al /ar'etE
- E4h. " or ;, ). "*<, BTC Be%ord3.
Sin%e Saddul did not %onvert or divert the )ro)erty 2he
sold the/ in a%%ordan%e with the authority given to hi/
&y Dand Bover3 nor did he deny that he re%eived the/,
the se%ond ele/ent of the %ri/e was also not )resent.
SaddulJs failure to deliver the )ro%eeds of the sale of the
s)are )arts to $M0I or Cuevas did not %onstitute a
%onversion or diversion to the in7ury of the latter who, not
&eing the owner of the )ro)erty, in%urred no loss and
suffered no in7ury on a%%ount of SaddulJs retention of the
said )ro%eeds while awaiting Dand BoverJs instru%tions
regarding the s)e%ial a%%ount where he should de)osit
the/. Saddul si/)ly %o/)lied with the dire%tive in Dand
BoverJs letter of Mar%h 8, "@?: that the )ro%eeds &e
E)la%ed into a se)arate %lient a%%ount whi%h will &e
availa&le to DB0E or any other )arty authori.ed &y
DB0EE 2E4h. " or ;3. I/)li%it in this dire%tive was an
in7un%tion not to deliver the )ro%eeds to $M0I. The third
ele/ent of the %ri/e %harged is a&sent.1-%ralaw

The fourth and final ele/ent of de/and for the return of
the )ro)erty is also la%'ing. $M0I or Cuevas /ade no
de/and for the return of the s)are )arts sold &y Saddul
&e%ause Cuevas 'new that those s)are )arts were to &e
sold for the a%%ount of Dand Bover.

=hile it is true that under DyndsayJs letter of Mar%h 8,
"@?: 2E4h. " or ;3 $M0I was entitled to a handling
%o//ission of *+R of the sale value of the s)are )arts
2eFuivalent to 0*?,<">.++3 whi%h Saddul failed to deliver
to $M0I, Saddul e4)lained that he su&seFuently
re%eived instru%tions fro/ Dand Bover to hold the *+R
%o//ission until $M0I shall have given an a%%ounting of
the re/aining Deyland s)are )arts 2worth 0".* /illion3
still held &y $M0I. 2)). "+, *,-*?, tsn, ;e&ruary ":,
"@??.3
That testi/ony of Saddul was not %ontroverted &y the
%o/)lainant. n the %ontrary, it was %onfir/ed &y
DyndsayJs letter dated $ugust <, "@?> to $M0I or
Cuevas 2E4h. *3 as'ing for an a%%ounting of E&alan%e of
the )arts held &y you . . . u)on re%ei)t 2of whi%h3 SS we
will settle your handling %harges at *+R of sales as
agreed.E
By o&eying the instru%tions of Dand Bover to withhold
)ay/ent of $M0IJs *+R handling %harge 20*?,<">.++3
Saddul did not &e%o/e lia&le for e/&e..le/ent to $M0I
for he did not re%eive that su/ fro/ $M0I. It was )art of
the )ri%e he re%eived fro/ Bover Motor 0arts, the &uyer
of the s)are )arts.
E=here the a%%used did not re%eive the /oney fro/ the
%o/)lainant for safe'ee)ing or on %o//ission or for
ad/inistration and in trust, he is not %ri/inally lia&le for
failure to return the /oney.E 2Jose Barredo vs. Court of
$))eals, :8 H "+,>3.
$M0IJs re%ourse, in order to re%over its *+R handling
%harge, is to file a %ivil a%tion to %olle%t that a/ount fro/
its erstwhile )rin%i)al, Dand Bover, not this %ri/inal
a%tion for estafa against Saddul.1 nad
=AEBE;BE, the )etitionerJs /otion for
re%onsideration of the resolution dated $)ril "<, "@@+ is
granted. The de%ision dated Se)te/&er ", "@?@, of the
Court of $))eals in C$-H.B. !o. +<*,8 is here&y
reversed and set aside. The )etitioner is a%Fuitted of the
%ri/e %harged, with %osts de ofi%io.
S BCEBEC.
PRESIDENTIAL DECREE No. 115 41)510> !#, 1#$*
PROVIDING FOR THE REGULATION OF TRUST
RECEIPTS TRANSACTIONS
=AEBE$S, the utili.ation of trust re%ei)ts, as a
%onvenient &usiness devi%e to assist i/)orters and
/er%hants solve their finan%ing )ro&le/s, had gained
)o)ular a%%e)tan%e in international and do/esti%
&usiness )ra%ti%es, )arti%ularly in %o//er%ial &an'ing
transa%tions9
=AEBE$S, there is no s)e%ifi% law in the 0hili))ines
that governs trust re%ei)t transa%tions, es)e%ially the
rights and o&ligations of the )arties involved therein and
the enfor%e/ent of the said rights in %ase of default or
violation of the ter/s of the trust re%ei)t agree/ent9
=AEBE$S, the re%o//endations %ontained in the
re)ort on the finan%ial syste/ whi%h have &een
a%%e)ted, with %ertain /odifi%ations &y the /onetary
authorities in%luded, a/ong others, the ena%t/ent of a
law regulating the trust re%ei)t transa%tions9
!=, TAEBE;BE, I, ;EBCI!$!C E. M$BCS,
0resident of the 0hili))ines, &y virtue of the )owers
vested in /e &y the Constitution, as Co//ander-in-
Chief of all the $r/ed ;or%es of the 0hili))ines, and
)ursuant to 0ro%la/ation !o. "+?", dated Se)te/&er
*", "@>*, and Heneral rder !o. ", dated Se)te/&er
**, "@>*, as a/ended, and in order to effe%t the desired
%hanges and refor/s in the so%ial, e%ono/i%, and
)oliti%al stru%ture of our so%iety, do here&y order and
de%ree and /a'e as )art of the law of the land the
following1
S%&'(o) 1. Short Title. This Ce%ree shall &e 'nown as
the Trust Be%ei)ts Daw.
S%&'(o) !. Declaration of Policy. It is here&y de%lared to
&e the )oli%y of the state 2a3 to en%ourage and )ro/ote
the use of trust re%ei)ts as an additional and %onvenient
aid to %o//er%e and trade9 2&3 to )rovide for the
regulation of trust re%ei)ts transa%tions in order to
assure the )rote%tion of the rights and enfor%e/ent of
o&ligations of the )arties involved therein9 and 2%3 to
de%lare the /isuse and6or /isa))ro)riation of goods or
)ro%eeds reali.ed fro/ the sale of goods, do%u/ents or
instru/ents released under trust re%ei)ts as a %ri/inal
offense )unisha&le under $rti%le Three hundred and
fifteen of the Bevised 0enal Code.
S%&'(o) *. Definition of terms. $s used in this Ce%ree,
unless the %onte4t otherwise reFuires, the ter/
2a3 ECo%u/entE shall /ean written or )rinted
eviden%e of title to goods.
2&3 EEntrusteeE shall refer to the )erson having
or ta'ing )ossession of goods, do%u/ents or
instru/ents under a trust re%ei)t transa%tion,
and any su%%essor in interest of su%h )erson for
the )ur)ose or )ur)oses s)e%ified in the trust
re%ei)t agree/ent.
2%3 EEntrusterE shall refer to the )erson holding
title over the goods, do%u/ents, or instru/ents
su&7e%t of a trust re%ei)t transa%tion, and any
su%%essor in interest of su%h )erson.
2d3 EHoodsE shall in%lude %hattels and )ersonal
)ro)erty other than1 /oney, things in a%tion, or
things so affi4ed to land as to &e%o/e a )art
thereof.
2e3 EInstru/entE /eans any negotia&le
instru/ent as defined in the !egotia&le
Instru/ent Daw9 any %ertifi%ate of sto%', or &ond
or de&enture for the )ay/ent of /oney issued
&y a )u&li% or )rivate %or)oration, or any
%ertifi%ate of de)osit, )arti%i)ation %ertifi%ate or
re%ei)t, any %redit or invest/ent instru/ent of a
sort /ar'eted in the ordinary %ourse of &usiness
or finan%e, where&y the entrustee, after the
issuan%e of the trust re%ei)t, a))ears &y virtue of
)ossession and the fa%e of the instru/ent to &e
the owner. EInstru/entE shall not in%lude a
do%u/ent as defined in this Ce%ree.
2f3 E0ur%haseE /eans ta'ing &y sale, %onditional
sale, lease, /ortgage, or )ledge, legal or
eFuita&le.
2g3 E0ur%haserE /eans any )erson ta'ing &y
)ur%hase.
2h3 ESe%urity InterestE /eans a )ro)erty interest
in goods, do%u/ents or instru/ents to se%ure
)erfor/an%e of so/e o&ligations of the
entrustee or of so/e third )ersons to the
entruster and in%ludes title, whether or not
e4)ressed to &e a&solute, whenever su%h title is
in su&stan%e ta'en or retained for se%urity only.
2i3 E0ersonE /eans, as the %ase /ay &e, an
individual, trustee, re%eiver, or other fidu%iary,
)artnershi), %or)oration, &usiness trust or other
asso%iation, and two /ore )ersons having a
7oint or %o//on interest.
273 ETrust Be%ei)tE shall refer to the written or
)rinted do%u/ent signed &y the entrustee in
favor of the entruster %ontaining ter/s and
%onditions su&stantially %o/)lying with the
)rovisions of this Ce%ree. !o further for/ality of
e4e%ution or authenti%ation shall &e ne%essary
to the validity of a trust re%ei)t.
2'3 E5alueE /eans any %onsideration suffi%ient to
su))ort a si/)le %ontra%t.
S%&'(o) +. 3hat constitutes a trust receipt transaction. $
trust re%ei)t transa%tion, within the /eaning of this
Ce%ree, is any transa%tion &y and &etween a )erson
referred to in this Ce%ree as the entruster, and another
)erson referred to in this Ce%ree as entrustee, where&y
the entruster, who owns or holds a&solute title or se%urity
interests over %ertain s)e%ified goods, do%u/ents or
instru/ents, releases the sa/e to the )ossession of the
entrustee u)on the latterJs e4e%ution and delivery to the
entruster of a signed do%u/ent %alled a Etrust re%ei)tE
wherein the entrustee &inds hi/self to hold the
designated goods, do%u/ents or instru/ents in trust for
the entruster and to sell or otherwise dis)ose of the
goods, do%u/ents or instru/ents with the o&ligation to
turn over to the entruster the )ro%eeds thereof to the
e4tent of the a/ount owing to the entruster or as
a))ears in the trust re%ei)t or the goods, do%u/ents or
instru/ents the/selves if they are unsold or not
otherwise dis)osed of, in a%%ordan%e with the ter/s and
%onditions s)e%ified in the trust re%ei)t, or for other
)ur)oses su&stantially eFuivalent to any of the following1
". In the %ase of goods or do%u/ents, 2a3 to sell
the goods or )ro%ure their sale9 or 2&3 to
/anufa%ture or )ro%ess the goods with the
)ur)ose of ulti/ate sale1 0rovided, That, in the
%ase of goods delivered under trust re%ei)t for
the )ur)ose of /anufa%turing or )ro%essing
&efore its ulti/ate sale, the entruster shall retain
its title over the goods whether in its original or
)ro%essed for/ until the entrustee has %o/)lied
fully with his o&ligation under the trust re%ei)t9 or
2%3 to load, unload, shi) or transhi) or otherwise
deal with the/ in a /anner )reli/inary or
ne%essary to their sale9 or
*. In the %ase of instru/ents,
a3 to sell or )ro%ure their sale or
e4%hange9 or
&3 to deliver the/ to a )rin%i)al9 or
%3 to effe%t the %onsu//ation of so/e
transa%tions involving delivery to a
de)ository or register9 or
d3 to effe%t their )resentation, %olle%tion
or renewal
The sale of goods, do%u/ents or instru/ents &y
a )erson in the &usiness of selling goods,
do%u/ents or instru/ents for )rofit who, at the
outset of the transa%tion, has, as against the
&uyer, general )ro)erty rights in su%h goods,
do%u/ents or instru/ents, or who sells the
sa/e to the &uyer on %redit, retaining title or
other interest as se%urity for the )ay/ent of the
)ur%hase )ri%e, does not %onstitute a trust
re%ei)t transa%tion and is outside the )urview
and %overage of this Ce%ree.
S%&'(o) 5. 4orm of trust receipts6 contents. $ trust
re%ei)t need not &e in any )arti%ular for/, &ut every
su%h re%ei)t /ust su&stantially %ontain 2a3 a des%ri)tion
of the goods, do%u/ents or instru/ents su&7e%t of the
trust re%ei)t9 2*3 the total invoi%e value of the goods and
the a/ount of the draft to &e )aid &y the entrustee9 2,3
an underta'ing or a %o//it/ent of the entrustee 2a3 to
hold in trust for the entruster the goods, do%u/ents or
instru/ents therein des%ri&ed9 2&3 to dis)ose of the/ in
the /anner )rovided for in the trust re%ei)t9 and 2%3 to
turn over the )ro%eeds of the sale of the goods,
do%u/ents or instru/ents to the entruster to the e4tent
of the a/ount owing to the entruster or as a))ears in the
trust re%ei)t or to return the goods, do%u/ents or
instru/ents in the event of their non-sale within the
)eriod s)e%ified therein.
The trust re%ei)t /ay %ontain other ter/s and %onditions
agreed u)on &y the )arties in addition to those
hereina&ove enu/erated )rovided that su%h ter/s and
%onditions shall not &e %ontrary to the )rovisions of this
Ce%ree, any e4isting laws, )u&li% )oli%y or /orals, )u&li%
order or good %usto/s.
S%&'(o) . Currency in 'hich a trust receipt may be
denominated. $ trust re%ei)t /ay &e deno/inated in the
0hili))ine %urren%y or any foreign %urren%y a%%e)ta&le
and eligi&le as )art of international reserves of the
0hili))ines, the )rovisions of e4isting law, e4e%utive
orders, rules and regulations to the %ontrary
notwithstanding1 0rovided, however, That in the %ase of
trust re%ei)ts deno/inated in foreign %urren%y, )ay/ent
shall &e /ade in its eFuivalent in 0hili))ine %urren%y
%o/)uted at the )revailing e4%hange rate on the date
the )ro%eeds of sale of the goods, do%u/ents or
instru/ents held in trust &y the entrustee are turned over
to the entruster or on su%h other date as /ay &e
sti)ulated in the trust re%ei)t or other agree/ents
e4e%uted &etween the entruster and the entrustee.
S%&'(o) $. Rights of the entruster. The entruster shall &e
entitled to the )ro%eeds fro/ the sale of the goods,
do%u/ents or instru/ents released under a trust re%ei)t
to the entrustee to the e4tent of the a/ount owing to the
entruster or as a))ears in the trust re%ei)t, or to the
return of the goods, do%u/ents or instru/ents in %ase of
non-sale, and to the enfor%e/ent of all other rights
%onferred on hi/ in the trust re%ei)t )rovided su%h are
not %ontrary to the )rovisions of this Ce%ree.
The entruster /ay %an%el the trust and ta'e )ossession
of the goods, do%u/ents or instru/ents su&7e%t of the
trust or of the )ro%eeds reali.ed therefro/ at any ti/e
u)on default or failure of the entrustee to %o/)ly with
any of the ter/s and %onditions of the trust re%ei)t or
any other agree/ent &etween the entruster and the
entrustee, and the entruster in )ossession of the goods,
do%u/ents or instru/ents /ay, on or after default, give
noti%e to the entrustee of the intention to sell, and /ay,
not less than five days after serving or sending of su%h
noti%e, sell the goods, do%u/ents or instru/ents at
)u&li% or )rivate sale, and the entruster /ay, at a )u&li%
sale, &e%o/e a )ur%haser. The )ro%eeds of any su%h
sale, whether )u&li% or )rivate, shall &e a))lied 2a3 to the
)ay/ent of the e4)enses thereof9 2&3 to the )ay/ent of
the e4)enses of re-ta'ing, 'ee)ing and storing the
goods, do%u/ents or instru/ents9 2%3 to the satisfa%tion
of the entrusteeJs inde&tedness to the entruster. The
entrustee shall re%eive any sur)lus &ut shall &e lia&le to
the entruster for any defi%ien%y. !oti%e of sale shall &e
dee/ed suffi%iently given if in writing, and either
)ersonally served on the entrustee or sent &y )ost-)aid
ordinary /ail to the entrusteeJs last 'nown &usiness
address.
S%&'(o) ,. )ntruster not responsible on sale by
entrustee. The entruster holding a se%urity interest shall
not, /erely &y virtue of su%h interest or having given the
entrustee li&erty of sale or other dis)osition of the goods,
do%u/ents or instru/ents under the ter/s of the trust
re%ei)t transa%tion &e res)onsi&le as )rin%i)al or as
vendor under any sale or %ontra%t to sell /ade &y the
entrustee.
S%&'(o) #. 0bligations of the entrustee. The entrustee
shall 2"3 hold the goods, do%u/ents or instru/ents in
trust for the entruster and shall dis)ose of the/ stri%tly in
a%%ordan%e with the ter/s and %onditions of the trust
re%ei)t9 2*3 re%eive the )ro%eeds in trust for the entruster
and turn over the sa/e to the entruster to the e4tent of
the a/ount owing to the entruster or as a))ears on the
trust re%ei)t9 2,3 insure the goods for their total value
against loss fro/ fire, theft, )ilferage or other %asualties9
283 'ee) said goods or )ro%eeds thereof whether in
/oney or whatever for/, se)arate and %a)a&le of
identifi%ation as )ro)erty of the entruster9 2:3 return the
goods, do%u/ents or instru/ents in the event of non-
sale or u)on de/and of the entruster9 and 2<3 o&serve
all other ter/s and %onditions of the trust re%ei)t not
%ontrary to the )rovisions of this Ce%ree.
S%&'(o) 10. 2iability of entrustee for loss. The ris' of
loss shall &e &orne &y the entrustee. Doss of goods,
do%u/ents or instru/ents whi%h are the su&7e%t of a
trust re%ei)t, )ending their dis)osition, irres)e%tive of
whether or not it was due to the fault or negligen%e of the
entrustee, shall not e4tinguish his o&ligation to the
entruster for the value thereof.
S%&'(o) 11. Rights of purchaser for value and in good
faith. $ny )ur%haser of goods fro/ an entrustee with
right to sell, or of do%u/ents or instru/ents through their
%usto/ary for/ of transfer, who &uys the goods,
do%u/ents, or instru/ents for value and in good faith
fro/ the entrustee, a%Fuires said goods, do%u/ents or
instru/ents free fro/ the entrusterJs se%urity interest.
S%&'(o) 1!. "alidity of entruster7s security interest as
against creditors. The entrusterJs se%urity interest in
goods, do%u/ents, or instru/ents )ursuant to the
written ter/s of a trust re%ei)t shall &e valid as against
all %reditors of the entrustee for the duration of the trust
re%ei)t agree/ent.
S%&'(o) 1*. Penalty clause. The failure of an entrustee
to turn over the )ro%eeds of the sale of the goods,
do%u/ents or instru/ents %overed &y a trust re%ei)t to
the e4tent of the a/ount owing to the entruster or as
a))ears in the trust re%ei)t or to return said goods,
do%u/ents or instru/ents if they were not sold or
dis)osed of in a%%ordan%e with the ter/s of the trust
re%ei)t shall %onstitute the %ri/e of estafa, )unisha&le
under the )rovisions of $rti%le Three hundred and fifteen,
)aragra)h one 2&3 of $%t !u/&ered Three thousand
eight hundred and fifteen, as a/ended, otherwise 'nown
as the Bevised 0enal Code. If the violation or offense is
%o//itted &y a %or)oration, )artnershi), asso%iation or
other 7uridi%al entities, the )enalty )rovided for in this
Ce%ree shall &e i/)osed u)on the dire%tors, offi%ers,
e/)loyees or other offi%ials or )ersons therein
res)onsi&le for the offense, without )re7udi%e to the %ivil
lia&ilities arising fro/ the %ri/inal offense.
S%&'(o) 1+. Cases not covered by this Decree. Cases
not )rovided for in this Ce%ree shall &e governed &y the
a))li%a&le )rovisions of e4isting laws.
S%&'(o) 15. Separability clause. If any )rovision or
se%tion of this Ce%ree or the a))li%ation thereof to any
)erson or %ir%u/stan%e is held invalid, the other
)rovisions or se%tions hereof and the a))li%ation of su%h
)rovisions or se%tions to other )ersons or %ir%u/stan%es
shall not &e affe%ted there&y.
S%&'(o) 1. Repealing clause. $ll $%ts in%onsistent with
this Ce%ree are here&y re)ealed.
S%&'(o) 1$. This Decree shall ta(e effect immediately.
Cone in the City of Manila, this *@th day of January, in
the year of ur Dord, nineteen hundred and seventy-
three.
SECOND DIVISION
3G.R. No. ,!+#5 7 D%&%./%0 10, 1##0.6
1#! SCRA !+
ALLIED BANKING CORPORATION, Petitioner,
vs. HON. SECRETARY SEDFREY ORDOKEZ DP5/B(&
R%@-o)2%)'E 1)2 ALFREDO CHING DP0(:1'%
R%@-o)2%)'E, Respondents.

D E C I S I O N

PADILLA, J.:

In this s)e%ial %ivil a%tion for Certiorari, the inter)retation
&y the Ce)art/ent of Justi%e of the )enal )rovision of
0C "":, the Trust Be%ei)ts Daw, is assailed &y )etitioner.
The relevant fa%ts are as follows1
n *, January "@?", 0hili))ine Bloo/ing Mills 20BM, for
short3 thru its duly authori.ed offi%er, )rivate res)ondent
$lfredo Ching, a))lied for the issuan%e of %o//er%ial
letters of %redit with )etitionerJs Ma'ati &ran%h to finan%e
the )ur%hase of :++ M6T Magtar Bran%h Colo/ites and
one 2"3 Dot Aigh ;ired Befra%tory Sliding !o..le Bri%'s.
0etitioner issued an irrevo%a&le letter of %redit in favor of
!i''o Industry Co., Dtd. 2!i''o3 &y virtue of whi%h the
latter drew four 283 drafts whi%h were a%%e)ted &y 0BM
and duly honored and )aid &y the )etitioner &an'.1- nad
To se%ure )ay/ent of the a/ount %overed &y the drafts,
and in %onsideration of the transfer &y )etitioner of the
)ossession of the goods to 0BM, the latter as entrustee,
thru )rivate res)ondent, e4e%uted four 283 Trust Be%ei)t
$gree/ents with /aturity dates on "@ May, , and *8
June "@?" a%'nowledging )etitionerJs ownershi) of the
goods and its 20BMJS3 o&ligation to turn over the
)ro%eeds of the sale of the goods, if sold, or to return the
sa/e, if unsold within the stated )eriod.
ut of the said o&ligation resulted an overdue a/ount of
0",8>:,*>8.+@. Ces)ite re)eated de/ands, 0BM failed
and refused to either turn over the )ro%eeds of the sale
of the goods or to return the sa/e.
n > Se)te/&er "@?8, )etitioner filed a %ri/inal
%o/)laint against )rivate res)ondent for violation of 0C
"": &efore the offi%e of the 0rovin%ial ;is%al of Bi.al.
$fter )reli/inary investigation wherein )rivate
res)ondent failed to a))ear or su&/it a %ounter-affidavit
and even refused to re%eive the su&)oena, the ;is%al
found a )ri/a fa%ie %ase for violation of 0C "": on four
283 %ounts and filed the %orres)onding infor/ation in
%ourt.
0rivate res)ondent a))ealed the ;is%alJs resolution to
the Ce)art/ent of Justi%e on three 2,3 grounds1
". Da%' of )ro)er )reli/inary investigation9
*. The 0rovin%ial ;is%al of Bi.al did not have 7urisdi%tion
over the %ase, as res)ondentJs o&ligation was )urely
%ivil9
,. There had &een a novation of the o&ligation &y the
su&stitution of the )erson of the Beha&ilitation Be%eivers
in )la%e of &oth 0BM and )rivate res)ondent Ching.
Then Se%retary of Justi%e 2now Senator3 !e)tali $.
Hon.ales, in a *8 Se)te/&er "@?< letter6resolution, "
held1
EIour %ontention that res)ondentJs o&ligation was )urely
a %ivil one, is without any /erit. The four 283 Trust
Be%ei)t $gree/ents entered into &y res)ondent and
%o/)lainant a))ear regular in for/ and in su&stan%e.
Their agree/ent regarding interest, not &eing %ontrary to
law, )u&li% )oli%y or /orals, )u&li% order or good %usto/,
is a valid sti)ulation whi%h does not %hange the
%hara%ter of the said Trust Be%ei)t $gree/ents. ;urther,
as )re%isely )ointed out &y %o/)lainant, raw /aterials
for /anufa%ture of goods to &e ulti/ately sold are )ro)er
o&7e%ts of a trust re%ei)t. Thus, res)ondentJs failure to
re/it to the %o/)lainant )ro%eeds of the sale of the
finished )rodu%ts if sold or the finished )rodu%ts
the/selves if not sold, at the /aturity dates of the trust
re%ei)ts, %onstitutes a violation of 0.C. "":.E *
$ /otion for re%onsideration alleged that, as 0BM was
under reha&ilitation re%eivershi), no %ri/inal lia&ility %an
&e i/)uted to herein res)ondent Ching. n "> Mar%h
"@?>, Gnderse%retary Silvestre A. Bello III denied said
/otion. The )ertinent )ortion of the denial resolution
states11-%ralaw
EIt %annot &e denied that the offense was %onsu//ated
long &efore the a))oint/ent of reha&ilitation re%eivers.
The filing of a %ri/inal %ase against res)ondent Ching is
not only for the )ur)ose of effe%tuating a %olle%tion of a
de&t &ut )ri/arily for the )ur)ose of )unishing an
offender for a %ri/e %o//itted not only against the
%o/)laining witness &ut also against the state. The
%ri/e of estafa for violation of the Trust Be%ei)ts Daw is
a s)e%ial offense or /ala )rohi&ita. It is a funda/ental
rule in %ri/inal law that when the %ri/e is )unished &y a
s)e%ial law, the a%t alone, irres)e%tive of its /otives,
%onstitutes the offense. In the instant %ase the failure of
the entrustee to )ay %o/)lainant the re/aining &alan%e
of the value of the goods %overed &y the trust re%ei)t
when the sa/e &e%a/e due %onstitutes the offense
)enali.ed under Se%tion ", of 0.C. !o. "":9 and on the
&asis of this failure alone, the )rose%ution has suffi%ient
eviden%e to esta&lish a )ri/a fa%ie %ase 2Bes. !o. <>",
s. "@?"9 $llied Ban'ing Cor)oration vs. Beinhard
Sage/uller, et al., 0rovin%ial ;is%al of Bi.al, Se)te/&er
"?, "@?"3.
EDi'ewise untena&le is your %ontention that Jreha&ilitation
)ro%eedings /ust stay the atte/)t to enfor%e a lia&ility in
view of Se%tion 8 of 0.C. !o. ">:?.J Se%tion 8 of 0.C. !o.
">:?, )rovides, a/ong others1 J. . . 0rovided, further, that
u)on a))oint/ent of a /anage/ent %o//ittee,
reha&ilitation re%eiver, &oard or &ody, )ursuant to this
Ce%ree, all a%tions for %lai/s against %or)orations,
)artnershi)s or asso%iations under /anage/ent or
re%eivershi) )ending &efore any %ourt, tri&unal, &oard or
&ody shall &e sus)ended a%%ordingly.
EIou will note that the ter/ Jall a%tions for %lai/sJ refer
only to a%tions for /oney %lai/s &ut not to %ri/inal
lia&ility of offenders.E ,
$nother /otion for re%onsideration was filed &y
res)ondent on @ $)ril "@?> to whi%h an o))osition was
filed &y the )etitioner. 0rivate res)ondent also filed a
su))le/ental reFuest for re%onsideration dated *?
Ce%e/&er "@?> with two 2*3 additional grounds, na/ely1
E. . . ,3 there is no eviden%e on re%ord to show that
res)ondent was in )arti%e)s %ri/inis in the a%t
%o/)lained of9 and 83 there %ould &e no violation of the
trust re%ei)t agree/ents &e%ause the arti%les i/)orted
&y the %or)oration and su&7e%t of the trust re%ei)ts were
fungi&le or %onsu//a&le goods and do not for/ )art of
the steel )rodu%t itself. These goods were not )ro%ured
to &e sold in whatever state or %ondition they were in or
were su))osed to &e after the /anufa%turing )ro%ess.E 8
Be%ause of )rivate res)ondentJs %larifi%ation that the
goods su&7e%t of the trust re%ei)t agree/ents were
dolo/ites whi%h were s)e%ifi%ally used for )at%hing
)ur)oses over the surfa%e of furna%es and no..le &ri%'s
whi%h are insulating /aterials in the lower )ortion of the
ladle whi%h do not for/ )art of the steel )rodu%t itself,
Justi%e Se%retary Sedfrey rdoTe., on "" January "@??,
Ere%tifiedE his )rede%essorJs su))osed reversi&le error,
and held11-%ralaw
E. . . it is %lear that what the law %onte/)lates or %overs
are goods whi%h have, for their ulti/ate destination, the
sale thereof or if unsold, their surrender to the entruster,
this whether the goods are in their original for/ or in
their /anufa%tured6)ro%essed state. Sin%e the goods
%overed &y the trust re%ei)ts and su&7e%t /atter of these
)ro%eedings are to &e utili.ed in the o)eration of the
eFui)/ent and /a%hineries of the %or)oration, they
%ould not have &een %onte/)lated as &eing %overed &y
0C "":. It is a4io/ati% that )enal statutes are stri%tly
%onstrued against the state and li&erally in favor of the
a%%used 20eo)le vs. 0urisi/a, ?< SCB$ :8*, 0eo)le
vs. Terrado, "*: SCB$ <8?3. This /eans that )enal
statutes %annot &e enlarged or e4tended &y intend/ent,
i/)li%ation, or any eFuita&le %onsideration 20eo)le
vs. Har%ia, ?: 0hil. <:"3. Thus, not all transa%tions
%overed &y trust re%ei)ts /ay &e %onsidered as trust
re%ei)t transa%tions defined and )enali.ed under 0C
"":.
4 4 4
$))arently, the trust re%ei)t agree/ents were e4e%uted
as se%urity for the )ay/ent of the drafts. $s su%h, the
/ain transa%tion was that of a loan. . . . In essen%e,
therefore, the relationshi) &etween the Ban' and the
%or)oration, %onseFuently, the res)ondent herein
li'ewise in%luded, is that of de&tor and %reditor.
4 4 4
=AEBE;BE, )re/ises %onsidered, our resolution
dated Se)te/&er *8, "@?<, re%orded ""@ Besolution !o.
8:<, series of "@?<, and that dated Mar%h ">, "@?>, the
latter &eing ne%essarily de)endent u)on and in%idental
to the for/er, are here&y a&rogated and a&andoned. Iou
are here&y dire%ted to /ove for the withdrawal of the
infor/ations and the dis/issal of the %ri/inal %ases filed
in %ourt . . .E :
This ti/e, )etitioner $llied Ban' filed a /otion for
re%onsideration of the rdoTe. resolution, whi%h was
resolved &y the Ce)art/ent of Justi%e on "> ;e&ruary
"@??, enun%iating that 0C "": %overs goods or
%o/)onents of goods whi%h are ulti/ately destined for
sale. It %on%luded that1
E. . . The goods su&7e%t of the instant %ase were shown
to have &een used and6or %onsu/ed in the o)eration of
the eFui)/ent and /a%hineries of the %or)oration, and
are therefore outside the a/&it of the )rovisions of 0C
"": al&eit %overed &y Trust Be%ei)t agree/ents . . .
;inally, it is noted that under the Sia vs. 0eo)le 2"*"
SCB$ <:: 2"@?,3, and 5intola vs. Insular Ban' of $sia
and $/eri%a 2":+ SCB$ :>? 2"@?>3 rulings, the trend in
the Su)re/e Court a))ears to &e to the effe%t that trust
re%ei)ts under 0C "": are treated as se%urity
do%u/ents for &asi%ally loan transa%tions, so /u%h so
that %ri/inal lia&ility is virtually o&literated and li/iting
lia&ility of the a%%used to the %ivil as)e%t only.
=AEBE;BE, your /otion for re%onsideration is here&y
CE!IEC.E <
;ro/ the Ce)art/ent of Justi%e, )etitioner is now &efore
this Court )raying for writs ofCertiorari and )rohi&ition to
annul the "" January and "> ;e&ruary "@?? CJ rulings,
/ainly on two 2*3 grounds1
". )u&li% res)ondent is without )ower or authority to
de%lare that a violation of 0C "": is not %ri/inally
)unisha&le, there&y rendering a )ortion of said law
ino)erative or ineffe%tual.1 nad
*. )u&li% res)ondent a%ted with grave a&use of
dis%retion in holding that the goods %overed &y the trust
re%ei)ts are outside the %onte/)lation of 0C "":.
0rivate and )u&li% res)ondents &oth filed their %o//ents
on the )etition to whi%h a %onsolidated re)ly was filed.
$fter the su&/ission of the )artiesJ res)e%tive
/e/oranda, the %ase was %alendared for deli&eration.
Coes the )enal )rovision of 0C "": 2Trust Be%ei)ts Daw3
a))ly when the goods %overed &y a Trust Be%ei)t do not
for/ )art of the finished )rodu%ts whi%h are ulti/ately
sold &ut are instead, utili.ed6used u) in the o)eration of
the eFui)/ent and /a%hineries of the entrustee-
/anufa%turerN
The answer /ust &e in the affir/ative, Se%tion 8 of said
0C "": says in )art1
ESe%. 8. =hat %onstitutes a trust re%ei)t transa%tion. U $
trust re%ei)t transa%tion, within the /eaning of this
Ce%ree, is any transa%tion &y and &etween a )erson
referred to in this Ce%ree as the entrustee, and another
)erson referred to in this Ce%ree as the entrustee,
where&y the entruster, who owns or holds a&solute title
or se%urity interests over %ertain s)e%ified goods,
do%u/ents or instru/ents, releases the sa/e to the
)ossession of the entrustee u)on the latterJs e4e%ution
and delivery to the entruster of a signed do%u/ent %alled
a Jtrust re%ei)tJ wherein the entrustee &inds hi/self to
hold the designated goods, do%u/ents or instru/ents in
trust for the entruster and to sell or otherwise dis)ose of
the goods, do%u/ents or instru/ents with the o&ligation
to turn over to the entruster the )ro%eeds thereof to the
e4tent of the a/ount owing to the entruster or as
a))ears in the trust re%ei)t or the goods, do%u/ents or
instru/ents the/selves, if they are unsold or not
otherwise dis)osed of, in a%%ordan%e with the ter/s and
%onditions s)e%ified in the trust re%ei)t, . . .E
Bes)ondent Ching %ontends that 0BM is not in the
&usiness of selling Magtar Bran%h Colo/ites or Aigh
;ired Befra%tory Sliding !o..le Bri%'s, it is a
/anufa%turer of steel and steel )rodu%ts. But 0BM, as
entrustee under the trust re%ei)ts has, under Se%. @ of
0C "":, the following o&ligations, inter alia1 2a3 re%eive
the )ro%eeds of sale, in trust for the entruster and turn
over the sa/e to the entruster to the e4tent of the
a/ount owing to hi/ or as a))ears on the trust re%ei)t9
2&3 'ee) said goods or )ro%eeds thereof whether in
/oney or whatever for/, se)arate and %a)a&le of
identifi%ation as )ro)erty of the entruster9 2%3 return the
goods, do%u/ents or instru/ents in the event of non-
sale, or u)on de/and of the entruster9 and 2d3 o&serve
all other ter/s and %onditions of the trust re%ei)t not
%ontrary to the )rovisions of said Ce%ree. >
The trust re%ei)ts, there is an o&ligation to re)ay the
entruster. ? Their ter/s are to &e inter)reted in
a%%ordan%e with the general rules on %ontra%ts, the law
&eing alert in all %ases to )revent fraud on the )art of
either )arty to the transa%tion. @ The entrustee &inds
hi/self to sell or otherwise dis)ose of the entrusted
goods with the o&ligation to turn over to the entruster the
)ro%eeds if sold, or return the goods if unsold or not
otherwise dis)osed of, in a%%ordan%e with the ter/s and
%onditions s)e%ified in the trust re%ei)t. $ violation of this
underta'ing %onstitutes estafa under Se%. ",, 0C "":.
$nd even assu/ing the a&sen%e of a %lear )rovision in
the trust re%ei)t agree/ent, Dee v. Bodil "+ and Sia v.
C$ "" have held1 $%ts involving the violation of trust
re%ei)t agree/ents o%%urring after *@ January "@>,
2when 0C "": was issued3 would render the a%%used
%ri/inally lia&le for estafa under )ar. "2&3, $rt. ,": of the
Bevised 0enal Code, )ursuant to the e4)li%it )rovision in
Se%. ", of 0C "":. "* The a%t )unisha&le is /alu/
)rohi&itu/. Bes)ondent Se%retaryJs )rognosti%ation of
the Su)re/e CourtJs su))osed in%lination to treat trust
re%ei)ts as /ere se%urity do%u/ents for loan
transa%tions, there&y o&literating %ri/inal lia&ility,
a))ears to &e a /is7udg/ent. ",
In an atte/)t to es%a)e %ri/inal lia&ility, )rivate
res)ondent %lai/s 0C "": %overs goods whi%h are
ulti/ately destined for sale and not goods for use in
/anufa%ture. But the wording of Se%. ", %overs failure to
turn over the )ro%eeds of the sale of entrusted goods, or
to return said goods if unsold or dis)osed of in
a%%ordan%e with the ter/s of the trust re%ei)ts. 0rivate
res)ondent %lai/s that at the ti/e of 0BMJs a))li%ation
for the issuan%e of the DCJs, it was not re)resented to
the )etitioner that the ite/s were intended for sale, "8
hen%e, there was no de%eit resulting in a violation of the
trust re%ei)ts whi%h would %onstitute a %ri/inal lia&ility.
$gain, we %annot u)hold this %ontention. The non-
)ay/ent of the a/ount %overed &y a trust re%ei)t is an
a%t violative of the entrusteeJs o&ligation to )ay. There is
no reason why the law should not a))ly to all
transa%tions %overed &y trust re%ei)ts, e4%e)t those
e4)ressly e4%luded. ":
The Court ta'es 7udi%ial noti%e of %usto/ary &an'ing and
&usiness )ra%ti%es where trust re%ei)ts are used for
i/)ortation of heavy eFui)/ent, /a%hineries and
su))lies used in /anufa%turing o)erations. =e are
)er)le4ed &y the state/ents in the assailed CJ
resolution that the goods su&7e%t of the instant %ase are
outside the a/&it of the )rovisions of 0C "": al&eit
%overed &y Trust Be%ei)t $gree/ents 2"> ;e&ruary "@??
resolution3 and that not all transa%tions %overed &y trust
re%ei)ts /ay &e %onsidered as trust re%ei)t transa%tions
defined and )enali.ed under 0C "": 2"" January "@??
resolution3. $ %onstru%tion should &e avoided when it
affords an o))ortunity to defeat %o/)lian%e with the
ter/s of a statute.1 nad
E$ %onstru%tion of a statute whi%h %reates an
in%onsisten%y should &e avoided when a reasona&le
inter)retation %an &e ado)ted whi%h will not do violen%e
to the )lain words of the a%t and will %arry out the
intention of Congress.
In the %onstru%tion of statutes, the %ourts start with the
assu/)tion that the legislature intended to ena%t an
effe%tive law, and the legislature is not to &e )resu/ed to
have done a vain thing in the ena%t/ent of a statute.
Aen%e, it is a general )rin%i)le, e/&odied in the /a4i/,
Jut res /agis valeat Fua/ )ereat,J that the %ourts should,
if reasona&ly )ossi&le to do so without violen%e to the
s)irit and language of an a%t, so inter)ret the statute to
give it effi%ient o)eration and effe%t as a whole. $n
inter)retation should, if )ossi&le, &e avoided, under
whi%h a statute or )rovision &eing %onstrued is defeated,
or as otherwise e4)ressed, nullified, destroyed,
e/as%ulated, re)ealed, e4)lained away, or rendered
insignifi%ant, /eaningless, ino)erative, or nugatory.E "<
The )enal )rovision of 0C "": en%o/)asses any a%t
violative of an o&ligation %overed &y the trust re%ei)t9 it is
not li/ited to transa%tions in goods whi%h are to &e sold
2retailed3, reshi))ed, stored or )ro%essed as a
%o/)onent of a )rodu%t ulti/ately sold.
To u)hold the Justi%e Ce)art/entJs ruling would
%ontravene not only the letter &ut the s)irit of 0C "":.
E$n e4a/ination of 0.C. "": shows the growing
i/)ortan%e of trust re%ei)ts in 0hili))ine &usiness, the
need to )rovide for the rights and o&ligations of )arties
to a trust re%ei)t transa%tion, the study of the )ro&le/s
involved and the a%tion &y /onetary authorities, and the
ne%essity of regulating the enfor%e/ent of rights arising
fro/ default or violations of trust re%ei)t agree/ents.
The legislative intent to /eet a )ressing need is %learly
e4)ressed . . .E ">
=AEBE;BE, the )etition is granted. The te/)orary
restraining order issued on ", $)ril "@?? restraining the
enfor%e/ent of the Fuestioned CJ resolutions dated ""
January "@?? and "> ;e&ruary "@?? dire%ting the
)rovin%ial fis%al to /ove for the dis/issal of the %ri/inal
%ase filed &efore the BTC of Ma'ati, Bran%h "8, and the
withdrawal of IS-!o. ?8-,"8+, is /ade )er/anent. Det
this %ase &e re/anded to said BTC for dis)osition in
a%%ordan%e with this de%ision.
S BCEBEC.
G.R. No. ,05++ 45B> 5, 1#,#
ROSEMARIE M. LEE, )etitioner,
vs.
HON. 4OSEFINA CRUZ RODIL, 452;% oA R%;(o)1B
T0(1B Co50', B01)&8 M, M1)(B1 1)2 PEOPLE OF THE
PHILIPPINES, res)ondents.
8anuel B. $mbong for petitioner.
GUTIERREZ, 4R., J.7
In this )etition we are as'ed to re%onsider the lia&ility for
estafa of an entrustee in a trust re%ei)t agree/ent who
dis)oses of the goods %overed &y it &ut fails to deliver
the )ro%eeds of the sale to the &an'.
0etitioner Bose/arie M. Dee was %harged with estafa in
an infor/ation whi%h alleged1
That on or a&out July *<,"@?* in the
City of Manila, 0hili))ines, the said
a%%used, did then and there wilfully,
unlawfully and feloniously defraud the
0hili))ine Ban' of Co//uni%ations, a
&an'ing institution duly organi.ed and
e4isting under the laws of the Be)u&li%
of the 0hili))ines, in the following
/anner, to wit1 the said a%%used, &eing
then the duly authori.ed re)resentative
of C.S. Dee Enter)rises, In%., after
o)ening letter of %redit with the said
&an' under D6C !o. <,*:" dated July
*<, "@?*, for the a/ount of 0
":8,>"".@>, %oveting the )ur%hase )ri%e
of a %ertain /er%handise %onsisting of
*, %tns. Da&. Culture Media in favor of
said &an', re%eived fro/ the latter the
ne%essary do%u/ent and thereafter the
said /er%handise and forthwith,
e4e%uted trust re%ei)t for, the aforesaid
/er%handise dated July *<, "@?*, &y
virtue of whi%h, the said a%%used
o&ligated herself to hold said
/er%handise in trust with li&erty to sell
the sa/e in %ash for the a%%ount of the
said &an' and to a%%ount for the
)ro%eeds of the sale thereof, if sold or of
returning the said /er%handise to said
&an' in %ase of failure to sell the sa/e,
on or &efore %to&er *8, "@?*, &ut the
said a%%used, on%e in )ossession of the
said /er%handise, far fro/ %o/)lying
with her aforesaid o&ligation and des)ite
the la)se of a long )eriod of ti/e and
re)eated de/ands /ade u)on her to
that effe%t, did then and there willfully,
unlawfully and feloniously, with intent to
defraud, /isa))ro)riate, /isa))ly and
%onvert the said /er%handise or the
value thereof, to her own )ersonal use
and &enefit, to the da/age and
)re7udi%e of the said 0hili))ine Ban' of
Co//uni%ations in the a/ount of
0":8,>"".@>, 0hili))ine %urren%y. 2Bollo,
). "@3
The a%%used /oved to Fuash this infor/ation on the
ground that the fa%ts %harged do not %onstitute an
offense. She alleges that the violation of a trust re%ei)t
agree/ent does not %onstitute estafa notwithstanding an
e4)ress )rovision in the ETrust Be%ei)ts DawE 20.C. "":3
%hara%teri.ing su%h violation as estafa. She atta%'s 0. C.
"": for &eing un%onstitutional.
The trial %ourt, in its order dated $ugust *", "@?> denied
the /otion to Fuash the infor/ation and u)held the
%onstitutionality of 0.C. !o. "":.
The su&seFuent Motion for Be%onsideration was also
denied for la%' of /erit in an order dated %to&er "*,
"@?>.
Aen%e, this )etition.
The issue )osed in this %ase is whether or not the
violation of a trust re%ei)t agree/ent %onstitutes the
%ri/e of estafa.
=e answer in the affir/ative in the light of a s)e%ifi%
)rovision in 0.C. !o. "":.
Se%. ", of 0.C. !o. "": )rovides1
... 0enalty %lause. U The failure of an
entrustee to turn over the )ro%eeds of
the sale of the goods, do%u/ents or
instru/ents %overed &y a trust re%ei)t to
the e4tent of the a/ount owing to the
entruster or as a))ears in the trust
re%ei)t or to return said goods,
do%u/ents or instru/ents if they were
not sold or dis)osed of in a%%ordan%e
with the ter/s of the trust re%ei)t shall
%onstitute the %ri/e of estafa,
)unisha&le under the )rovisions of
$rti%le Three Aundred and ;ifteen,
0aragra)h ne 2&3 of $%t !u/&ered
Three Thousand Eight Aundred and
;ifteen, as a/ended, otherwise 'nown
as the Bevised 0enal Code. If the
violation or offense is %o//itted &y a
%or)oration, )artnershi), asso%iation or
other 7uridi%al entities, the )enalty
)rovided for in this Ce%ree shall &e
i/)osed u)on the dire%tors, offi%ers,
e/)loyees or other offi%ials or )ersons
therein res)onsi&le for the offense
without )re7udi%e to the %ivil lia&ilities
arising fro/ the %ri/inal offense. 2Itali%s
su))lied3.
The )etitioner %ites the %ases of People v. Cuevo+ 2"+8
SCB$ ,"* ["@?"]3 and Sia v. People+ 2"*" SCB$ <::
["@?,]3 to su))ort her stand that the violation of a trust
re%ei)t does not %onstitute estafa.
The )etitionerJs %itation of People v. Cuevo, supra does
not strengthen her %ase at all. f the eleven 2""3
/e/&ers of the Court, a /a7ority of si4 2<3 were %learly
of the view that the violation of a trust re%ei)t %onstitutes
estafa. The Chief Justi%e %on%urred with the/ on the
issue of a&sen%e of dou&le 7eo)ardy. Two Justi%es
inhi&ited the/selves. nly two 2*3 out of the eleven
/e/&ers strongly adhered to the view now )resented &y
the )etitioner. Aowever, for want of one vote needed to
reverse the dis/issal order of the lower %ourt, the view
of the dissenting Justi%es )revailed as the result in that
%ase. E4%er)ts fro/ the /a7ority o)inion show as
follows1
... 2I3t is a well-entren%hed rule in our
7uris)ruden%e that the %onversion &y the
i/)orter of the goods %overed &y a trust
re%ei)t %onstitutes estafa through
/isa))ro)riation under arti%le ,":2l3 2&3
of the Bevised 0enal Code. 20eo)le vs.
Iu Chai Ao, :, 0hil. ?>8 and Sa/o vs.
0eo)le, "": 0hil, ,8<. $s to %ivil %ases,
see !ational Ban' vs. 5iuda e Ai7os de
$ngel Jose, <, 0hil. ?"89 0hili))ine
!ational Ban' vs. Cati)on, @? 0hil. *?<
and 0hili))ine !ational Ban' vs.
$rro.al, "+, 0hil. *",3. 444
444 444 444
$s noted &y Justi%e Street in People vs.
9u Chai Ho+ supra+ the %onversion &y
the trustee in a trust re%ei)t of the
)ro%eeds of the sale falls J/ost literally
and dire%tly underJ the )rovisions of
arti%le ,":2l3 2&3.
Thus, it was held that where,
notwithstanding re)eated oral and
written de/ands &y the &an', the
)etitioner had failed either to turn over to
the said &an' the )ro%eeds of the sale
of the goods, or to return said goods if
they were not sold, the )etitioner is
guilty of estafa under arti%le ,": 2"3 2&3
2Sa/o vs. 0eo)le, "": 0hil. ,8<3.
In this %onne%tion, it is relevant to state
that 0residential Ce%ree !o. "":, the
Trust Be%ei)ts Daw, regulating trust
re%ei)t transa%tions, was issued on
January *@,"@>,.
444 444 444
The ena%t/ent of the said )enal
)rovision is %onfir/atory of e4isting
7uris)ruden%e and should not &e
%onstrued as /eaning that, heretofore,
the /isa))ro)riation of the )ro%eeds of
a sale /ade under a trust re%ei)t was
not )unisha&le under arti%le ,":. That
)enal )rovision re/oved any dou&t as
to the %ri/inal lia&ility of the holder of a
trust re%ei)t who /isa))ro)riated the
)ro%eeds of the sale.
It was the lower %ourt in the Cuevo %ase whi%h ruled that
violation of a trust re%ei)t gives rise to a %ivil a%tion only.
This was not the ruling in the Su)re/e CourtJs de%ision.
It was /ade Fuite %lear in the /a7ority o)inion that the
lower %ourt erred in holding that the a%%used did not
%o//it estafa under arti%le ,": 2"3 2&3. 2"+8 SCB$ ,"*,
,"<3.
The )etitioner Fuotes the dissenting o)inion of Justi%e
Ce Castro in this %ase that1
The )arties, therefore, are dee/ed to
have %ons%iously entered into a )urely
%o//er%ial transa%tion that %ould give
rise only to %ivil lia&ility, never to su&7e%t
the JentrusteeJ to %ri/inal )rose%ution.
Gnli'e, for instan%e, when several
)ie%es of 7ewelry are re%eived &y a
)erson fro/ the owner for sale on
%o//ission, and the for/er
/isa))ro)riates for his )ersonal use
and &enefit, either the 7ewelries or the
)ro%eeds of the sale, instead of
returning the/ to the owner as is his
o&ligation, the &an' is not in the sa/e
%on%e)t as the 7ewelry owner with full
)ower of dis)osition of the goods, whi%h
the &an' does not have, for the &an'
has )reviously e4tended a loan whi%h
the D6C re)resents to the i/)orter, and
&y that loan, the i/)orter should &e the
real owner of the goods. If under the
trust re%ei)t, the &an' is /ade to a))ear
as the owner, it was &ut an artifi%ial
e4)edient, /ore of a legal fi%tion than
fa%t, for it were really so, it %ould dis)ose
of the goods in any /anner it wants,
whi%h it %annot do, 7ust to give
%onsisten%y with the )ur)ose of the trust
re%ei)t &y giving a stronger se%urity for
the loan o&tained &y the i/)orter. To
%onsider the &an' as the true owner
fro/ the in%e)tion of the transa%tion
would &e to disregard the loan feature
thereof, a feature totally a&sent in the
%ase of the transa%tion &etween the
7ewel-owner and his agent.
EFually e/)hati% is the dissent of then Senior $sso%iate
Justi%e Claudio Teehan'ee that1
I %on%ur with the dissent of Mr. Justi%e
Ce Castro insofar as it u)holds the /ore
li&eral inter)retation to the trust re%ei)t
transa%tion whi%h would give rise only to
%ivil lia&ility on the )art of the offender.
The very definition of trust re%ei)t as
given in the /ain o)inion 2at )). 8-:3,
J2$3 trust re%ei)t is %onsidered as a
se%urity transa%tion intended to aid in
finan%ing i/)orters and retail dealers
who do not have suffi%ient funds or
resour%es to finan%e the i/)ortation or
)ur%hase of /er%handise, and who /ay
not &e a&le to a%Fuire %redit e4%e)t
through utili.ation, as %ollateral, of the
/er%handise i/)orted or )ur%hasedJ 2:,
$/. Jr. @<", %ited in Sa/o v. 0eo)le,
"": 0hil. ,8<, ,8@3,J sustains the lower
%ourtJs rationale in dis/issing the
infor/ation that the %ontra%t %overed &y
a trust re%ei)t is /erely a se%ured loan.
The goods i/)orted &y the s/all
i/)orter and retail dealer through the
&an'Js finan%ing re/ain of their own
)ro)erty and ris' and the old %a)italist
orientation of )utting the/ in 7ail for
estafa for non-)ay/ent of the se%ured
loan 2granted after they had &een fully
investigated &y the &an' as good %redit
ris's3 through the fi%tion of the trust
re%ei)t devi%e should no longer &e
)er/itted in this day and age.
It should, however, &e noted that even as Justi%e de
Castro filed a dissent, he also /ade the following
o&servations1
The Fuestion is whether the violation of
the ter/s of a trust re%ei)t would
%onstitute estafa. There is no more
doubt that under P.D. **:+ the violation
is defined as estafa+ &ut &efore the
)ro/ulgation of said de%ree, I have
entertained grave dou&ts to su%h e4tent
that I would a%Fuit a )erson a%%used of
the %ri/e allegedly %o//itted &efore
said de%ree, the )ro/ulgation of whi%h
serves to %onfir/ /y dou&ts. 4or if there
had been no such doubt, es)e%ially as
so/e de%isions had already &een
rendered &y this Court holding that
estafa is %o//itted where there is a
violation of a trust re%ei)t,there 'ould
have been no need for P.D. **:.
2E/)hasis su))lied3
The dissenting o)inions later &e%a/e the CourtJs ruling
on the /atter when the Sia de%ision )enned &y Justi%e
Ce Castro was )ro/ulgated.
In the Sia %ase, su)ra, it was held that1
ConseFuently, if only fro/ the fa%t that
the trust re%ei)t transa%tion is
sus%e)ti&le to two reasona&le
inter)retation2s3, one as giving rise only
to %ivil lia&ility for the violation of the
%ondition thereof, and the other, as
generating also %ri/inal lia&ility, the
for/er should &e ado)ted as /ore
favora&le to the su))osed offender. ...
$ %loser loo' at the two de%isions %ited &y the )etitioner
shows attendant fa%ts that are different fro/ those in the
instant %ase.
$s noted &y the Soli%itor Heneral, in
the Cuevo and Sia %ases, &oth violations of the trust
re%ei)t agree/ents ha))ened in the "@<+Js, way &efore
the )ro/ulgation of 0.C. "": in "@>,. 2Bollo, ). ::3 In the
)resent %ase, the a%%used was %harged in "@?: for an
a%t %o//itted in "@?*.
=hile the Cuevo and Sia %ases were de%ided when 0.C.
"": had already &een )ro/ulgated, the de%ree was not
a))lied in either of the %ases &e%ause the Fuestioned
a%ts were %o//itted &efore its effe%tivity.
Thus, the view held &y the Court in the Sia %ase that
violation of a trust re%ei)t only gives rise to %ivil lia&ility
did not ta'e into %onsideration 0.C. "":, as it ruled1
=e %onsider the view that the trust
re%ei)t arrange/ent gives rise only to
%ivil lia&ility as the /ore feasi&le, &efore
the )ro/ulgation of 0.C. "":. 2"*"
SCB$ <::, <<83 2E/)hasis su))lied3.
$%ts involving the violation of trust re%ei)t agree/ents
o%%urring after *@ January "@>, would /a'e the
a%%used %ri/inally lia&le for estafa under )aragra)h "
2&3, $rti%le ,": of the Bevised 0enal Code, )ursuant to
the e4)li%it )rovision in Se%. ", of 0.C. "":. 2Sia v. Court
of $))eals, H.B. !o. 8+,*8, %to&er :, "@??3.
The )etitioner Fuestions the %onstitutionality of Se%. ",
of 0.C. "":. She %ontends that it is violative of the
%onstitutional right that E!o )erson shall &e i/)risoned
for de&t or non-)ay/ent of a )oll ta4E.
The )etitioner has failed to /a'e out a strong %ase that
0.C. "": %onfli%ts with the %onstitutional )rohi&ition
against i/)rison/ent for non-)ay/ent of de&t. $
%onvin%ing showing is needed to over%o/e the
)resu/)tion of the validity of an e4isting statute.
The %ri/inal lia&ility s)rings fro/ the violation of the trust
re%ei)t.
=e &ear in /ind the nature of a trust re%ei)t agree/ent.
This Court )ronoun%ed in the "intola %ases, ":+ SCB$
:>? 2"@?>39 H.B. !o. >?<>", Mar%h *:,"@?? that1
... $ letter of %redit-trust re%ei)t
arrange/ent is endorsed with its own
distin%tive features and
%hara%teristi%s. /nder that set;up+ a
ban( e<tends a loan covered by the
letter of credit+ 'ith the trust receipt as a
security for the loan. $n other 'ords+ the
transaction involves a loan feature
represented by the letter of credit+ and a
security feature 'hich is in the covering
trust receipt. 2E/)hasis su))lied3
Therefore, the loan feature is se)arate and distin%t fro/
the trust re%ei)t. The violation of a trust re%ei)t
%o//itted &y dis)osing of the goods %overed there&y
and failing to deliver the )ro%eeds of su%h sale has &een
sFuarely /ade to fall under $rt. ,": 2"3 2&3 of the
Bevised 0enal Code, whi%h )rovides1
... Swindling 2estafa3.-$ny )erson who
shall defraud another &y any of the
/eans /entioned herein &elow shall &e
)unished &y1
444 444 444
a. =ith unfaithfulness or a&use of
%onfiden%e, na/ely1
444 444 444
&. By /isa))ro)riating or %onverting, to
the )re7udi%e of another, /oney, goods,
or any other )ersonal )ro)erty re%eived
&y the offender in trust or on
%o//ission, or for ad/inistration, or
under any other o&ligation involving the
duty to /a'e delivery of or to return the
sa/e, even though su%h o&ligation &e
totally or )artially guaranteed &y a &ond9
or &y denying having re%eived su%h
/oney, goods, or other )ro)erty.
The fa%t that the &an' does not &e%o/e the fa%tual
owner of the goods does not /a'e the law
un%onstitutional 2See the 5intola %ases, su)ra3 The
language of the a&ove- /entioned )enal )rovision has
&een %larified &y 0.C. "":. The )erson who is )re7udi%ed
through the /isa))ro)riation or %onversion of the goods
need not &e the owner, thereof9 if su%h had &een the
intention of the authors of the Code, the )hrase Eto the
)re7udi%e of anotherE would have read Eto the )re7udi%e
of the owner.E 20eo)le v. Iu Chai Ao, :, 0hil. ?>8, ?>>-
?>?3.
Moreover, we agree with the Soli%itor Heneral who
e4)ressed the )oli%y &ehind the law1
5erily, 0.C. "": is a de%laration &y the
legislative authority that, as a /atter of
)u&li% )oli%y, the failure of a )erson to
turn over the )ro%eeds of the sale of
goods %overed &y a trust re%ei)t or to
return said goods if not sold is a )u&li%
nuisan%e to &e a&ated &y the i/)osition
of )enal san%tions. $s held in Do.ano
vs. Martine., 2"8< SCB$ ,*,,,,?31
... %ertainly it is within
the authority of the
law/a'ing &ody to
)res%ri&e %ertain a%ts
dee/ed )erni%ious and
ini/i%al to )u&li%
welfare. $%ts /ala in se
are not the only a%ts
that the law %an )unish.
$n a%t /ay not &e
%onsidered &y so%iety
as inherently wrong,
hen%e, not /alu/ in se
&ut &e%ause of the har/
that it infli%ts on the
%o//unity, it %an &e
outlawed and %ri/inally
)unished as /alu/
)rohi&itu/. The State
%an do this in the
e4er%ise of its )oli%e
)ower.
In fine, 0.C. "": is a valid e4er%ise of
)oli%e )ower and is not re)ugnant to the
%onstitutional )rovision on non-
i/)rison/ent for non-)ay/ent of de&t.
The undersigned )onente %on%urred in the Sia de%ision
in "@?, &e%ause the allegedly %ri/inal a%t was
%o//itted &efore the )ointedly deli&erate e4)ression of
legislative intent was /anifested in a statute. There were
then dou&ts as to the sus%e)ti&ility of a trust re%ei)t
transa%tion to two different inter)retations, one whi%h
li/its the effe%ts of a violation to %ivil lia&ility and the
other to in%lude %ri/inal res)onsi&ility. Certain fa%tual
%onsiderations in the Sia %ase strengthened the
argu/ents for a%Fuittal of the a%%used. There have &een
two legislatures sin%e then U the Batasang 0a/&ansa
and the )resent Congress of the 0hili))ines U &ut no
re)eal of 0.C. "": has &een /ade. To de%lare this law
un%onstitutional is an entirely different )ro)osition fro/
/erely %hoosing one of two reasona&le alternatives.
$n e4a/ination of 0.C. "": shows the growing
i/)ortan%e of trust re%ei)ts in 0hili))ine &usiness, the
need to )rovide for the rights and o&ligations of )arties
to a trust re%ei)t transa%tion, the study of the )ro&le/s
involved and the a%tion &y /onetary authorities, and the
ne%essity of regulating the enfor%e/ent of rights arising
fro/ default or violations of trust re%ei)t agree/ents.
The legislative intent to /eet a )ressing need is %learly
e4)ressed. =e see no un%onstitutionality in the /eans
deli&erately e/)loyed to enfor%e the integrity of trust
re%ei)ts.
=AEBE;BE, the trial %ourtJs orders are $;;IBMEC
and the %ase is re/anded to the trial %ourt for further
)ro%eedings.
S BCEBEC.
3G.R. No. 1*$*+,. 45)% !1, !00+6
PEOPLE OF THE PHILIPPINES, appellee, vs.
WILLIAM ONG > LI 1)2 CHING DE MING N
ROBERT TIU, appellants.
D E C I S I O N
PUNO, J.7
=> the allo'ance of the privilege to 'ithhold evidence
that is demonstrably relevant in a criminal trial 'ould cut
deeply into the guarantee of due process of la' and
gravely impair the basic function of the courts.?
["]
Chief Justi%e =arren E. Burger
The %ase at &ar involves the %lash of two %lassi%
values - - - the need for the State to sto) %ri/es and
)reserve the )ea%e against the right of an individual to
%onfront /aterial witnesses to esta&lish his
inno%en%e. In &alan%ing the two values, we shall
s%rutini.e and set the )ara/eters that ought to guide
)rose%ution when to dis%lose the identity of %onfidential
infor/ers.
n July *>, "@@? a%%used =illia/ ng y Di and
Ching Ce Ming V Bo&ert Tiu were %harged with violation
of Se%tion ":, $rti%le III, in relation to Se%tion *, $rti%le I,
of Be)u&li% $%t !o. <8*:, otherwise 'nown as The
Cangerous Crugs $%t of "@>*, as a/ended. The
Infor/ation
[*]
reads1
That on or a&out the *8
th
day of July, "@@? in Lue.on
City, 0hili))ines, the said a%%used, %ons)iring together,
%onfederating with and /utually hel)ing ea%h other not
having &een authori.ed &y law to sell, dis)ense, deliver,
trans)ort or distri&ute any regulated drug, did then and
there willfully and unlawfully @%BB o0 oAA%0 Ao0
@1B% #,0.50 ;01.@ oA M%'8>B A.-8%'1.()%
H>20o&8Bo0(2%, 98(&8 (@ 1 0%;5B1'%2 205;.
C!TB$BI T D$=.
G)on arraign/ent, the two 2*3 a%%used, who are
Chinese nationals, )led not guilty. The re%ords do not
show whether they had suffi%ient 'nowledge of the
English language. Their trial )ro%eeded. In the %ourse
of the trial, the two 2*3 a%%used were given the servi%es
of a Chinese inter)reter.
The )rose%ution, through the testi/ony of S0"
Bodolfo S. Hon.ales, sought to esta&lish that on July *,,
"@@? at around :1++ 0.M., a %onfidential infor/ant 2CI3 of
the S)e%ial )erations Civision 2SC3, 0!0 !ar%oti%s
Hrou), re)orted to Chief Ins)e%tor $l&ert Ignatius C.
;erro a&out the alleged illi%it drug a%tivities of a %ertain
=illia/ ng and an unidentified Chinese /ale
)artner. $fter an evaluation of the %onfidential
infor/ation, Chief Ins)e%tor ;erro de%ided to %ondu%t a
&uy-&ust o)eration. Ae %onstituted a tea/ of eight 2?3
with 0oli%e Ins)e%tor Medel !. 0oTe as tea/ leader,
S0" Hon.ales as )oseur-&uyer and the rest as &a%'-
u) su))ort.
$%%ording to S0" Hon.ales, the CI %alled u) the
alleged )usher, )la%ed an order for one 2"3 'ilo of sha&u
and agreed to a 0<++,+++.++ %onsideration. The CI
li'ewise agreed to /eet with his %onta%t on July *8,
"@@? at <
th
Street %orner Hil/ore $venue, !ew
Manila, Lue.on City, &etween 81++ and :1++ $.M. The
&oodle /oney was )re)ared %onsisting of si4 2<3
&undles of %ut &ond )a)er with a /ar'ed 0",+++.++
)eso &ill on to) of ea%h &undle.
n July *8, *++8 at ,1++ $.M., the CI re%eived a
%all fro/ the drug dealer %hanging the /eeting ti/e
&etween *1++ and ,1++ 0.M. on the sa/e day. The
tea/, together with the CI, )ro%eeded to the /eeting
)la%e and arrived there at around "1,+ 0.M. The CI rode
with S0" Hon.ales. They )ar'ed their %ar
along <
th
Street %orner Hil/ore $venue. The rest of the
tea/ )osted the/selves at their &a%' and their right
side.
$ little while, a%%used ng a))roa%hed their
%ar. The CI introdu%ed hi/ to S0" Hon.ales who told
a%%used ng in &ro'en Tagalog to get in the %ar. =hen
ng inFuired a&out the /oney in )ay/ent of the sha&u,
S0" Hon.ales showed hi/ the slightly o)ened )lasti%
&ag %ontaining the &oodle /oney. S0" Hon.ales then
de/anded to see the sha&u. $%%used ng e4%used
hi/self, went out of the %ar, wal'ed a few ste)s and then
waved his right hand to so/e&ody. =hile a%%used ng
was wal'ing &a%' to the %ar, S0" Hon.ales and the CI
saw a green Toyota Corolla %o/ing. The Corolla )ar'ed
in front of their %ar and a Chinese-loo'ing /ale, later
identified as a%%used Ching Ce Ming V Bo&ert Tiu
alighted, a))roa%hed a%%used ng and handed to hi/ a
gift-wra))ed )a%'age. S0" Hon.ales o)ened it and
inside was one 2"3 sealed )lasti% &ag with a white
%rystalline su&stan%e. $fter its ins)e%tion, a%%used ng
de/anded for its )ay/ent. S0" Hon.ales gave to
a%%used ng the &oodle /oney )la%ed in a (=. BrownQ
)lasti% &ag. Thereafter, S0" Hon.ales signaled his
&a%'-u) tea/ &y turning on the ha.ard lights of the
%ar. S0" Hon.ales hi/self arrested a%%used ng
while the CI and the &a%'-u) agents arrested a%%used
Ce Ming.
The offi%ers &rought the two 2*3 a%%used to their
offi%e where the %orres)onding &oo'ing sheets and
arrest re)ort were )re)ared. The )lasti% &ag %ontaining
the white %rystalline su&stan%e was referred to the 0!0
Cri/e Da&oratory for e4a/ination. The two 2*3 a%%used
were su&7e%ted to a )hysi%al and /ental e4a/ination as
reFuired. They were found to &e free fro/ any e4ternal
signs of trau/a.
0oli%e Ins)e%tor Hra%e M. EustaFuio, ;orensi%
Che/ist, 0!0 Cri/e Da&oratory, testified that the
s)e%i/en she e4a/ined had a net weight of @?+.:+
gra/s and /anifested ()ositive results for /ethyl
a/)heta/ine hydro%hlorideQ
[,]
or what is %o//only
'nown as sha&u, a regulated drug. Aer testi/ony was
su))orted &y her 0hysi%al S%ien%es Be)ort.
[8]
$))ellants denied the story of the
)rose%ution. $%%used =illia/ ng, a Chinese %iti.en
fro/ the 0eo)leMs Be)u&li% of China, %lai/ed that he
%a/e to the 0hili))ines in "@@> to loo' for a 7o&. G)on
the re%o//endation of a friend, he was a&le to wor' in a
)an%it %anton fa%tory in Lue.on City. In June "@@?, he
sto))ed wor'ing at the fa%tory and hunted for another
7o&. Two 2*3 wee's )rior to his arrest, a%%used ng was
introdu%ed &y his friend Wian Ding to ng Sin for a
)ossi&le 7o& as te%hni%ian in a &ihon fa%tory owned &y
ng Sin.
n July **, "@@?, ng Sin %alled u) and set a
/eeting with a%%used ng at the Tayu/an &ran%h of
Jolli&ee the ne4t day. =hile waiting at Jolli&ee, a%%used
ng re%eived a %all fro/ ng Sin that he %ould not
)ersonally /eet hi/. Instead, his two 2*3 %o-wor'ers
would /eet a%%used ng as instru%ted. Su&seFuently,
two 2*3 /en answering to ng SinMs des%ri)tion
a))roa%hed a%%used ng. Ae 7oined the/ inside a
yellow %ar. =hen they rea%hed a %ertain )la%e, the
driver rea%hed for his %ellular )hone and %alled u)
so/eone. $fter a &rief %onversation, the driver handed
the )hone to hi/. ng Sin was on the line and infor/ed
hi/ that the driver would a%%o/)any hi/ to the &ihon
fa%tory. The driver got out of the %ar and a%%used ng
followed hi/. $fter wal'ing two 2*3 &lo%'s, the driver
)i%'ed u) so/ething fro/ the )la%e. They returned to
the %ar. Suddenly, the %o/)anion of the driver )o'ed a
gun at hi/. Ae was arrested, &lindfolded and &rought to
an undis%losed )la%e. Several hours later, he was ta'en
to the )oli%e station. There he /et the other a%%used
Ching Ce Ming for the first ti/e. Ae /aintained
inno%en%e to the %ri/e %harged.
n his )art, a%%used Ching Ce Ming testified that
he is a legiti/ate &usiness/an engaged in the BT=
&usiness. Ae %lai/ed that he gets his )rodu%ts fro/
Ba%laran and sells the/ to %usto/ers in the %ities of
!aga and Caet in Bi%ol.
n July *,, "@@? at around 81,+ and :1++ 0.M.,
while waiting inside his %ar for his girlfriend and her
/other who 7ust went in a townhouse at ?
th
Street, !ew
Manila, Lue.on City, he was a))roa%hed &y )ersons
un'nown to hi/. They as'ed hi/ what he was doing
there. ne of the/ went to the %ar )ar'ed at his &a%',
ordered so/e&ody inside to get out and ta'e a good
loo' at hi/. The )erson )ointed at hi/ saying (/ay&e
he is the one.Q Ae was then dragged out of his %ar and
&rought to the other %ar. They too' his %lut%h &ag. They
&lindfolded and &rought hi/ to a )la%e. $fter a few
hours, at Ca/) Cra/e, Lue.on City, they re/oved his
&lindfold. Ae denied 'nowing a%%used ng and the
%harge of %ons)iring with hi/ to deliver sha&u in !ew
Manila,Lue.on City.
$velina Cardo., the /other of his girlfriend, and a
divine healer, %orro&orated his story. She testified that
she reFuested a%%used Ce Ming to drive her to a
townhouse at ?
th
Street, !ew Manila, to %ure a
)atient. She de%lared that the offi%ers of the 0eo)leMs
Journal )u&li%ation %ould attest to her )rofession. She
as'ed a%%used Ce Ming to wait for her and her daughter
inside his %ar. =hen they returned to the %ar, a%%used
Ce Ming was nowhere to &e found. They saw hi/ ne4t
at the Lue.on City Jail.
n !ove/&er "?, "@@? the trial %ourt %onvi%ted
a))ellants as %harged and i/)osed on the/ the )enalty
of death. It li'ewise ordered ea%h of the/ to )ay a fine
of 0" /illion )esos.
[:]
The %ase is with us on auto/ati%
review. $))ellants insist on their inno%en%e. They %lai/
that their guilt was not )roven &eyond reasona&le dou&t.
=e agree.
I
Bule ""<, Se%tion " 2a3 of the Bevised Bules of
Cri/inal 0ro%edure, as a/ended, )rovides1
SECTI! ". $rraign/ent and )lea9 how /ade.-
2a3 The a%%used /ust &e arraigned &efore the %ourt
where the %o/)laint or infor/ation was filed or assigned
for trial. The arraign/ent shall &e /ade in o)en %ourt &y
the 7udge or %ler' &y furnishing the accused 'ith a copy
of the complaint or information+ reading the same in the
language or dialect (no'n to him, and as'ing hi/
whether he )leads guilty or not guilty. The )rose%ution
/ay %all at the trial witnesses other than those na/ed in
the %o/)laint or infor/ation. 2/nderscoring and
emphasis supplied.3
The arraign/ent of a))ellants violates the a&ove
rule. $))ellants are Chinese nationals. Their Certifi%ate
of $rraign/ent
[<]
states that they were infor/ed of the
a%%usations against the/. It does not, however, indi%ate
whether the Infor/ation was read in the language or
diale%t 'nown to the/. It /erely states1
This 8
th
day of $ug., "@@?, the undersigns 2si%3
states1
That, in o)en %ourt, and in the )resen%e of Trial
0rose%utor Bu&en Catu&ay, the following a%%used
=illia/ ng and Ching Ce Ming $W$ Bo&ert Tiu
was6were %alled and, having &een ()Ao0.%2 oA '8%
)1'50% oA '8% 1&&5@1'(o) A(B%2 1;1()@' 8(./8%0/'8%.,
A50)(@8(); 8(./8%0/'8%. 1 &o-> oA '8% &o.-B1()' o0
()Ao0.1'(o) 9('8 '8% B(@' oA 9(')%@@%@, the said
a%%used in answer to the Fuestion of the Court, )leaded
!ot Huilty to the %ri/e as %harged.
T =AICA I CEBTI;I.
Sgd.
Mary Buth Milo-;errer
Bran%
h Cler' of Court
Sgd. =illia/ ng
$CCGSEC =IDDI$M !H
Sgd. Ching de Ming
$CCGSEC CAI!H CE MI!H V BBEBT TIG
!either does the $ugust 8, "@@? rder of Judge
Ciosdado M. 0eralta of BTC-Br. @:, Lue.on City,
dis%lose %o/)lian%e with the rule on arraign/ent. It
/erely stated in )art that ([w]hen &oth a%%used =illia/
ng y Di and Ching Ce Ming V Bo&ert Tiu were
arraigned, assisted &y %ounsel de )arte, &oth a%%used
entered a )lea of not guilty.Q
[>]
;ro/ the re%ords, it is %lear that a))ellants only
'new the Chinese language. Thus, the servi%es of a
Chinese inter)reter were used in investigating
a))ellants. S0" Bodolfo S. Hon.ales revealed in his
testi/ony, vi.1
[?]
L1 !ow, is it not a fa%t that you had the
diffi%ulty of investigating the two a%%used
&e%ause of %o//uni%ation )ro&le/ fro/
your infor/antN
$1 =e did not en%ounter su%h )ro&le/ when
we investigated the/ sir. =e also as'ed
Fuestion and we have another C8()%@%
98o 91@ 100%@'%2 98o &1) @-%1<
T1;1Bo; 1)2 9% 5@%2 '81' C8()%@% .1)
'o '01)@B1'% Ao0 5@ 1)2 Ao0 '8%. (A '8%
H5%@'(o)@ 10% 2(AA(&5B' 'o 5)2%0@'1)2,
@(0.
L1 !ow that Chinese inter)reter that is also
an a%%usedN
$1 Ies sir.
[@]
$fter arraign/ent and in the %ourse of the trial, the
lower %ourt had to se%ure the servi%es of a %ertain
Bi%hard !g Dee as Chinese inter)reter. This a))ears in
the rder of $ugust *?, "@@? of Judge 0eralta, vi.1
Considering that the %ounsel of the two 2*3 a%%used has
still a lot of Fuestions to as' on %ross-e4a/ination 4 4 4
4 F0o. 8%0%o), M0. R(&8102 N; L%%, 1 /5@()%@@.1)
1)2 1 -10' '(.% ()'%0-0%'%0, (@ 8%0%/> 2%@(;)1'%2 />
'8% Co50' 1@ ()'%0-0%'%0 () '8(@ &1@% &o)@(2%0(); '81'
'8%0% (@ )o oAA(&(1B ()'%0-0%'%0 oA '8% Co50' 98o (@
<)o9B%2;%1/B% () '8% C8()%@% B1);51;% o0 1)>
C8()%@% 2(1B%&' 981'@o%:%0. The a))oint/ent of Mr.
Bi%hard !g Dee is without the o&7e%tion of %ounsel of the
a%%used and the )u&li% )rose%utor and %onsidering
that '8% &o50' (@ &o):()&%2 '81' 8% ()2%%2 -o@@%@@%@
'8% H51B(A(&1'(o)@ oA 1) ()'%0-0%'%0 oA 1 C8()%@%
B1);51;% o0 1)> o'8%0 C8()%@% 2(1B%&' <)o9) 1)2
@-o<%) /> '8% '9o D!E 1&&5@%2.
["+]
2)mphasis
supplied.3
=hat lea)s fro/ the re%ords of the %ase is the
ina&ility of a))ellants to fully or suffi%iently %o/)rehend
any other language than Chinese and any of its
diale%t. Ces)ite this ina&ility, however, the a))ellants
were arraigned on an Infor/ation written in the English
language.
=e again e/)hasi.e that the reFuire/ent that the
infor/ation should &e read in a language or diale%t
'nown to the a%%used is /andatory. It /ust &e stri%tly
%o/)lied with as it is intended to )rote%t the
%onstitutional right of the a%%used to &e infor/ed of the
nature and %ause of the a%%usation against hi/. The
%onstitutional )rote%tion is )art of due )ro%ess. ;ailure
to o&serve the rules ne%essarily nullifies the
arraign/ent.
[""]
II
More i/)ortant than the invalid arraign/ent of the
a))ellants, we find that the )rose%ution eviden%e failed
to )rove that a))ellants 9(BBA5BB> 1)2 5)B19A5BB> @oB2 o0
oAA%0%2 'o @%BB shabu.
$))ellantsM %onvi%tion is &ased on the lone
testi/ony of S0" Hon.ales. Ae was the designated
)oseur-&uyer in the tea/ for/ed for the &uy-&ust
o)eration. But a %areful reading of his testi/ony will
reveal that 8% 91@ )o' -0(:> 'o '8% @1B%
'01)@1&'(o) that trans)ired &etween the CI and
a))ellant =illia/ ng, the alleged )usher. It is &eyond
%ontention that a %ontra%t of sale is )erfe%ted u)on a
/eeting of the /inds of the )arties on the o&7e%t and its
)ri%e.
["*]
!ot all ele/ents of the sale were esta&lished &y
the testi/ony of S0" Hon.ales, vi.1
0BSECGTB to S0" H!P$DES
L1 $fter you have )re)ared the &oodle /oney
and you had /ade the )ro)er /ar'ing
whi%h you )resented &efore this
Aonora&le Court, what ha))enN
$1 ut CI /a'e a %ou)le of %all and he
%onta%ted =illia/ ng thru a &ro'en
tagalog %onversation.
L1 =hen your CI %onta%ted with =illia/ ng
in &ro'en tagalogN
$1 I have a %onversation with =illia/ ng in
&ro'en tagalog the deal of one 'ilo gra/
of sha&u was initially %losed.
L1 =hen you say (%losedQ, what do you /ean
&y thatN
$1 T8%> 1;0%%2 'o '8% @1B% oA '8% @81/5.
$TTI. TBI!IC$C 2%ounsel of a%%used3 to the
CGBT
=e o&7e%t to the line of Fuestioning, Iour
Aonor that would &e hearsay.
CGBT1
I thin' what you were as'ing is what
ha))ened 8% @1(2 (' 91@ '8% CI 98o
'1B<%2.
0BSECGTB to S0" H!P$DES
L1 So after that, do you 'now what ha))enN
$1 T8% CI ()Ao0.%2 5@ '81' '8% -0(&% oA
'81' @81/5 98(&8 9%J0% @5--o@%2 'o
/5> A0o. '8%. 1.o5)'@ 'o 00,000.00
-%@o@, .1J1..
L1 =here did you %o/e to 'now a&out this
infor/ation that the a/ount is already
<++,+++.++ )esosN
$TTI. TBI!IC$C to the CGBT
$lready answered, Iour Aonor.
CGBT1
In other words what he say is that, there
was a tele)hone %onversation &ut he has
no )ersonal 'nowledge. Iour Fuestion
then was what ha))ened.
0BSECGTB to S0" H!P$DES
L1 $fter the CI infor/ed you that the )ri%e of
the sha&u is <++,+++.++ )esosN
$1 =e )re)ared this &oodle /oney and the
<,+++ &y our Chief SC.
CGBT to S0" H!P$DES
L1 $fter the infor/ant told you that there was
an agree/ent to sell <++,+++.++ )esos
and that you have already )re)ared the
&oodle /oney as you have stated, what
ha))ened after thatN
$1 T8% CI 'oB2 5@ '81' '8% '01)@1&'(o) (@
00,000.00 -%@o@ 1)2 :%)5% (@ 1'

'8
S'0%%', &o0)%0 G(B.o0% A:%)5%, N%9
M1)(B1, L5%Io) C('>, /%'9%%) + oJ&Bo&<
'o 5 oJ&Bo&< () '8% .o0)(); oA 45B> !+,
1##,, .1J1..
L1 So when the CI infor/ed you that they will
/eet at <
th
Street, !ew Manila, Lue.on
City, what trans)ired ne4tN
$1 n or a&out , oM%lo%' in the /orning
=illia/ ng /ade a %all to our CI
infor/ing hi/ that the sale of the delivery
of sha&u was reset to another ti/e.
[",]
4 4 4 4
0BSECGTB to S0" H!P$DES
L1 $nd when you were infor/ed that there
was a resetting of this dealN
CGBT to S0" H!P$DES
L1 Aow did you %o/e to 'now that there was
a resetting &e%ause he has no
)arti%i)ation in the %onversation and it
was the CI a%%ording to hi/ and the
alleged )oseur-&uyer.
$1 T8% CI 'oB2 o50 C8(%A D%-5'>.
$TTI. TBI!IC$C to the CGBT
That would &e hearsay, Iour Aonor, and
that would &e a dou&le hearsay.
CGBT
P5' o) 0%&o02 '81' '8% &o5)@%B
.1)(A%@'%2 '81' 8(@ 1)@9%0 (@ 1;1()
8%10@1> 1)2 '81' 1 2o5/B% 8%10@1>
%:(2%)&%.
0BSECGTB to S0" H!P$DES
L1 $nd what did the CI doN
$1 T8% CI ()Ao0.%2 5@ '81' '8% '(.% 9(BB /%
1' 1/o5' ! 'o * oJ&Bo&< () '8% 1A'%0)oo)
oA '81' @1.% 21> 1)2 '8% -B1&%.
["8]
It is a&undantly %lear that (' 91@ '8% CI 98o .12%
'8% ()('(1B &o)'1&', al&eit only through the tele)hone,
with the )usher. The CI was li'ewise '8% o)% 98o
&Bo@%2 '8% 2%1B with a))ellant ng as to the Fuantity of
sha&u to &e )ur%hased and its )ri%e. Ae also @%' '8%
:%)5% 1)2 '(.% oA '8% .%%'(); when the sale would
ta'e )la%e. The @oint !ffidavit of !rrest
[":]
e4e%uted &y
S0" Hon.ales, 0* El/er !. Sara/)ote and 0"
!oli Jingo H. Bivel fortifies these fa%ts, vi.1
4 4 4 4
That 1A'%0 &o5-B% oA &1BB@ .12% /> o50 CI, sus)e%t
=IDDI$M !H was finally %onta%ted on or a&out @1,+ in
the evening of July *,, "@@? and through a &ro'en
Tagalog %onversation, 1 205; 2%1B/@1B% 91@ ()('(1BB>
&Bo@%2 () '8% 1;0%%2 1.o5)' oA @(= 85)20%2
'8o5@1)2 -%@o@ DP00,000.00E and the agreed venue
is at the %orner of <
th
Street and Hil/ore $venue, !ew
Manila, Lue.on City &etween 81++ and :1++ oM%lo%' in
the /orning of July *8, "@@? through (Waliwaan or
$&utanQ 2Cash u)on Celivery39
That said ()Ao0.1'(o) 91@ 0%B1>%2 'o o50 D%-5'>
C8(%A, who u)on learning said re)ort, i//ediately
grou)ed and &riefed the tea/ for the said o)eration9
4 4 4 4
That on or a&out ,1++ oM%lo%' in the /orning of July *8,
"@@?, WILLIAM ONG .12% 1 &1BB 'o o50 CI infor/ing
hi/ 2CI3 to 0%@%' '8% '(.% oA '8% 205; 2%1B/@1B% oA o)%
D1E <(Bo;01. oA SHABU and it was s%heduled again
&etween *1++ to ,1++ oM%lo%' in the afternoon of sa/e
date and sa/e )la%e9
It is therefore understanda&le that in his a%%ount of
his /eeting with a))ellant =illia/ ng, SPO1 Go)I1B%@
.12% )o 0%A%0%)&% to any further dis%ussion of the
)ri%e and the Fuantity of the sha&u. =hen they /et,
they 7ust )ro%eeded with the e4%hange of /oney and
sha&u, vi.1
0BSECGTB to S0" H!P$DES
L1 $nd when you were there stationed at the
venue at <
th
Street, !ew Manila, Lue.on
City, what ha))enedN
$1 I and the CI )ar'ed our %ar at <
th
Street
%orner Hil/ore $venue and then we saw
=illia/ ng e/erged fro/ Hil/ore
$venue and a))roa%hed /e and our CI,
/aMa/.
["<]
4 4 4 4
L1 $nd when he a))roa%hed you what did
you do if anyN
$1 ur CI introdu%ed /e to =illia/ ng as
an interested &uyer of one 'ilo gra/ of
sha&u and afterwards I as'ed =illia/
ng in &ro'en tagalog to get inside the
%ar.
[">]
4 4 4 4
L1 $nd while inside the %ar, what ha))ened
ne4tN
$1 =hile inside the %ar =illia/ ng as'ed
/e a&out the )ay/ent of the stuff and I
got the )a)er &ag and slightly
o)ened. So that I get the )lasti% &ag and
show to =illia/ ng the &oodle /oney.
L1 =hen you showed the &oodle /oney to
=illia/ ng what did he do if there was
anyN
$1 Ae loo'ed at it, /aMa/.
L1 $nd when he loo'ed at it what ha))ened
ne4tN
$1 I told hi/ that I should loo' at the stuff
&efore I give the /oney.
L1 =hat stuff are you referring toN
$1 The sha&u, /aMa/.
L1 $nd what did you do after e4)e%ting the
&oodle /oney or the &ag where the
&oodle /oney was )la%ed, if there was
anyN
$1 Ae e4%used hi/self and alighted fro/ our
%ar and told /e to wait for his %o/)anion.
L1 $nd where you a&le to wait for that /ale
%o/)anion he is referring toN
$1 Ae wal'ed a distan%e and waved at his
%o/)anion as if so/e&ody will %o/e to
hi/.
L1 Aow did he do thatN
$1 2)ut on re%ord that the witness when
answering the Fuestion he stood u) and
then used his right hand in waving as if he
is %alling for so/e&ody3
L1 =hen =illia/ ng waved his right hand to
his %o/)anion what ha))enedN
$1 =illia/ ng wal'ed towards to /e and
suddenly a green Toyota a))eared and
)ar'ed in front of our %ar.
L1 =hen a green Toyota %orolla was )ar'ed
in front of the %ar, what ha))ened ne4tN
$1 Chinese loo'ing /ale )erson alighted
fro/ the %ar and he went to =illia/ ng
and handed to =illia/ ng so/ething
that was gift wra))ed.
["?]
4 4 4 4
L1 =hen that thing was handed to =illia/
ng whi%h identified in Court and whi%h
was /ar'ed, what did =illia/ ng doN
$1 =illia/ ng too' it fro/ Ching Ce Ming,
/aMa/.
L1 =hen this E4hi&it was given to &y =illia/
ng what did you do in returnN
$1 I o)ened that so/ething whi%h was gift
wra))ed and I saw one sealed )lasti% &ag
%ontaining white %rystalline su&stan%e
sus)e%ted to &e a sha&u.
["@]
4 4 4 4
L1 =hen you saw this E4hi&it C-* %rystalline
su&stan%e whi%h was o)ened a%%ording
to you. =hat did you doN
$1 The %o/)anion of =illia/ ng de/anded
to /e the /oney and I gave to hi/ the
&oodle /oney.
L1 =hen you gave the &oodle /oney to hi/,
what did he do if any these )erson who
se%ured the /oneyN
$1 Ae too' the /oney inside the &ag.
[*+]
Sin%e o)B> '8% CI 812 -%0@o)1B <)o9B%2;% of the
offer to )ur%hase shabu, the a%%e)tan%e of the offer and
the %onsideration for the offer, we hold that S0"
Hon.ales is, in effe%t, )o' '8% F-o@%50"/5>%0G /5'
.%0%B> '8% 2%B(:%0>.1). Ais testi/ony therefore
on .1'%0(1B -o()'@ of the sale of shabu is hearsay and
standing alone %annot &e the &asis of the %onvi%tion of
the a))ellants.
[*"]
III
=e further hold that the )rose%ution failed to
esta&lish its %lai/ of entra)/ent.
$ &uy-&ust o)eration is a for/ of entra)/ent, whi%h
in re%ent years has &een a%%e)ted as a valid /eans of
arresting violators of the Cangerous Crugs Daw.
[**]
It is
%o//only e/)loyed &y )oli%e offi%ers as an effe%tive
way of a))rehending law offenders in the a%t of
%o//itting a %ri/e.
[*,]
In a &uy-&ust o)eration, the idea
to %o//it a %ri/e originates fro/ the offender, without
any&ody indu%ing or )rodding hi/ to %o//it the offense.
[*8]
Its o))osite is instigation or indu%e/ent, wherein the
)oli%e or its agent lures the a%%used into %o//itting the
offense in order to )rose%ute hi/.
[*:]
Instigation is
dee/ed %ontrary to )u&li% )oli%y and %onsidered an
a&solutory %ause.
[*<]
To deter/ine whether there was a valid entra)/ent
or whether )ro)er )ro%edures were underta'en in
effe%ting the &uy-&ust o)eration, it is in%u/&ent u)on the
%ourts to /a'e sure that the details of the o)eration are
%learly and adeFuately laid out through relevant, /aterial
and %o/)etent eviden%e. ;or, the %ourts %ould not
/erely rely on &ut /ust a))ly with studied restraint the
)resu/)tion of regularity in the )erfor/an%e of offi%ial
duty &y law enfor%e/ent agents. This )resu/)tion
should not &y itself )revail over the )resu/)tion of
inno%en%e and the %onstitutionally )rote%ted rights of the
individual.
[*>]
It is the duty of %ourts to )reserve the )urity
of their own te/)le fro/ the )rostitution of the %ri/inal
law through lawless enfor%e/ent.
[*?]
Courts should not
allow the/selves to &e used as instru/ents of a&use
and in7usti%e lest inno%ent )ersons are /ade to suffer
the unusually severe )enalties for drug offenses.
[*@]
In P%o-B% :. Do0(1,
[,+]
we stressed the Fo/C%&'(:%G
'%@' in &uy-&ust o)erations. =e ruled that in su%h
o)erations, the )rose%ution /ust )resent a %o/)lete
)i%ture detailing the transa%tion, whi%h (/ust start fro/
the initial %onta%t &etween the )oseur-&uyer and the
)usher, the offer to )ur%hase, the )ro/ise or )ay/ent of
the %onsideration until the %onsu//ation of the sale &y
the delivery of the illegal drug su&7e%t of the sale.
[,"]
=e
e/)hasi.ed that the /anner &y whi%h the initial %onta%t
was /ade, the offer to )ur%hase the drug, the )ay/ent
of the J&uy-&ustJ /oney, and the delivery of the illegal
drug /ust &e the su&7e%t of stri%t s%rutiny &y %ourts
to ()@50% '81' B19"1/(2(); &('(I%)@ 10% )o' 5)B19A5BB>
()25&%2 'o &o..(' 1) oAA%)@%.Q
[,*]
I) '8% &1@% 1' /10, '8% -0o@%&5'(o) %:(2%)&%
1/o5' '8% /5>"/5@' o-%01'(o) (@ ()&o.-B%'%. The
%onfidential infor/ant who had sole 'nowledge of how
the alleged illegal sale of sha&ustarted and how it was
)erfe%ted was not )resented as a witness. Ais
testi/ony was given instead &y S0" Hon.ales who
had no )ersonal 'nowledge of the sa/e. n this s%ore,
S0" Hon.alesM testi/ony is hearsay and )ossesses no
)ro&ative value unless it %an &e shown that the sa/e
falls within the e4%e)tion to the hearsay rule.
[,,]
To i/)art
)ro&ative value to these hearsay state/ents and %onvi%t
the a))ellant solely on this &asis would &e to render
nugatory his %onstitutional 0(;8' 'o &o)A0o)' '8%
9(')%@@ against hi/, in this %ase the infor/ant, and to
e4a/ine hi/ for his truthfulness.
[,8]
$s the )rose%ution
failed to )rove all the /aterial details of the &uy-&ust
o)eration, its %lai/ that there was a valid entra)/ent of
the a))ellants /ust fail.
IV
The Court is shar)ly aware of the %o/)elling
%onsiderations why %onfidential infor/ants are usually
not )resented &y the )rose%ution. ne is the need to
hide their identity and )reserve their invalua&le servi%e
to the )oli%e.
[,:]
$nother is the ne%essity to )rote%t the/
fro/ &eing o&7e%ts or targets of revenge &y the %ri/inals
they i/)li%ate on%e they &e%o/e 'nown. $ll these
%onsiderations, however, have to &e &alan%ed with the
right of an a%%used to a fair trial.
The ruling of the G.S. Su)re/e Court in Ro:(10o
:. U.S.
[,<]
on infor/erMs )rivilege is instru%tive. In said
%ase, the )rin%i)al issue on certiorari is whether the
Gnited States Cistri%t Court %o//itted reversi&le error
when it allowed the Hovern/ent not to dis%lose the
identity of an under%over e/)loyee 98o 812 -B1>%2 1
.1'%0(1B -10' in &ringing a&out the )ossession of %ertain
drugs &y the a%%used, 812 /%%) -0%@%)' with the
a%%used at the o%%urren%e of the alleged %ri/e, and
/ight &e a .1'%0(1B 9(')%@@ to whether the a%%used
'nowingly trans)orted the drugs as %harged.
[,>]
The
Court, through Mr. Justi%e Burton, granted %ertiorari in
order to )ass u)on the )ro)riety of dis%losure of the
infor/erMs identity.
Mr. Justi%e Burton e4)lained that what is usually
referred to as the infor/erMs )rivilege is in reality the
Hovern/entMs )rivilege to withhold fro/ dis%losure the
identity of )ersons who furnish infor/ation of violations
of law to offi%ers %harged with enfor%e/ent of that law.
[,?]
The -50-o@% of the )rivilege is the furtheran%e and
)rote%tion of the )u&li% interest in effe%tive law
enfor%e/ent. The )rivilege re%ogni.es the o&ligation of
%iti.ens to %o//uni%ate their 'nowledge of the
%o//ission of %ri/es to law-enfor%e/ent offi%ials and,
&y )reserving their anony/ity, en%ourages the/ to
)erfor/ that o&ligation.
It was held that the @&o-% oA '8% -0(:(B%;% (@
B(.('%2 /> ('@ 5)2%0B>(); -50-o@%. Thus, where the
dis%losure of the %ontents of the %o//uni%ation will not
tend to reveal the identity of an infor/er, the %ontents
are not )rivileged.
[,@]
Di'ewise, o)&% '8% (2%)'('> oA '8%
()Ao0.%0 81@ /%%) 2(@&Bo@%2 'o '8o@% 98o 9o5B2
81:% &15@% 'o 0%@%)' '8% &o..5)(&1'(o), '8%
-0(:(B%;% (@ )o Bo);%0 1--B(&1/B%.
[8+]
$ A50'8%0 B(.('1'(o) on the a))li%a&ility of the
)rivilege, whi%h arises fro/ the funda/ental
reFuire/ents of fairness was e/)hasi.ed. =here the
dis%losure of an infor/erMs identity, or the %ontents of his
%o//uni%ation, (@ 0%B%:1)' 1)2 8%B-A5B 'o '8% 2%A%)@%
oA 1) 1&&5@%2, o0 (@ %@@%)'(1B 'o 1 A1(0 2%'%0.()1'(o)
oA 1 &15@%, '8% -0(:(B%;% .5@' ;(:% 91>.
[8"]
In these
situations, the trial %ourt /ay reFuire dis%losure and
dis/iss the a%tion if the Hovern/ent withholds the
infor/ation.
[8*]
In su/, '8%0% (@ )o A(=%2 05B% with res)e%t to
dis%losure of the identity of an infor/er. The )ro&le/
has to &e resolved on a %ase to %ase &asis and %alls
for /1B1)&(); the state interest in )rote%ting )eo)le fro/
%ri/es against the individualMs right to )re)are his
defense. The &alan%e /ust &e ad7usted &y giving due
weight to the following fa%tors, a/ong others1 2"3 the
%ri/e %harged, 2*3 the )ossi&le defenses, 2,3 the
)ossi&le signifi%an%e of the infor/erMs testi/ony, and 283
other relevant fa%tors.
[8,]
In the %ase at &ar, the %ri/e %harged against the
a))ellants is %a)ital in %hara%ter and %an result in the
i/)osition of the death )enalty. They have foisted the
defense of instigation whi%h is in shar) %ontrast to the
%lai/ of entra)/ent &y the )rose%ution. The
)rose%ution has to )rove all the /aterial ele/ents of the
alleged sale of sha&u and the resulting &uy-&ust
o)eration. =here the testi/ony of the infor/er is
indis)ensa&le, it should &e dis%losed. The li&erty and
the life of a )erson en7oy high i/)ortan%e in our s%ale of
values. It %annot &e di/inished e4%e)t &y a value of
higher signifi%an%e.
V
Moreover, the /ishandling and transfer of %ustody
of the alleged %onfis%ated /ethyl a/)heta/ine
hydro%hloride or sha&u further shattered the %ase of the
)rose%ution. There is no %ri/e of illegal sale of
regulated drug when there is a nagging dou&t on
whether the su&stan%e %onfis%ated was the sa/e
s)e%i/en e4a/ined and esta&lished to &e regulated
drug.
$fter the arrest of the a))ellants, the re%ords show
that the su&stan%e allegedly ta'en fro/ the/ was
su&/itted to the 0!0 Cri/e Da&oratory for e4a/ination
u)on reFuest of the Chief of the SC !ar%oti%s
Hrou), Lue.on City.
[88]
0oli%e Ins)e%tor Hra%e M.
EustaFuio, ;orensi% Che/ist, 0!0 Cri/e Da&oratory,
testified that the Fualitative e4a/ination she %ondu%ted
/anifested ()ositive results for /ethyl a/)heta/ine
hydro%hlorideQ with net weight of @?+.:+ gra/s.
[8:]
This is
not in dis)ute. The issue is whether the su&stan%e
e4a/ined was the sa/e as that allegedly %onfis%ated
fro/ a))ellants.
The @oint !ffidavit of !rrest
[8<]
/erely states that the
eviden%e %onfis%ated was su&/itted to the (0!0 Cri/e
Da&oratory Hrou) for Fualitative e4a/ination.Q S0"
Hon.ales testified on dire%t e4a/ination that1
L1 =hen you arrested the/ a%%ording to you,
what other ste)s did you ta'e if anyN
$1 =e &rought the/ to our offi%e and we
reFuested the %ri/e
la&oratory Ca/) Cra/e to test the
sus)e%ted sha&u that we re%overed fro/
&oth of the/.
[8>]
n %ross-e4a/ination, the defense only got this
state/ent fro/ S0" Hon.ales regarding the eviden%e
allegedly %onfis%ated1
L1 $nd you i//ediately &rought hi/ to your
offi%e at Ca/) $guinaldoN
$1 $fter we gathered the eviden%es we
turned the/ over to our offi%e, sir.
[8?]
Clearly, there was no referen%e to the )erson who
su&/itted it to the 0!0 Cri/e Da&oratory for
e4a/ination. It is the 8emorandum;Re-uest for
2aboratory )<amination
[8@]
whi%h indi%ates that a %ertain
S08 Castro su&/itted the s)e%i/en for
e4a/ination. Aowever, the rest of the re%ords of the
%ase failed to show the role of S08 Castro in the &uy-
&ust o)eration, if any. In the@oint !ffidavit of !rrest+ the
only )arti%i)ants in the o)eration were enu/erated as
S0" Hon.ales as the )oseur-&uyer, 0oli%e Ins)e%tor
Medel M. 0oTe as the tea/ leader with 0* El/er !.
Sara/)ote and 0" !oli Jingo H. Bivel as &a%'-u)
su))ort.
[:+]
ther /e/&ers of the tea/ who a%ted as
)eri/eter se%urity were not identified. In fa%t, when
S0" Hon.ales was as'ed during the trial as to their
identities, he was only a&le to na/e another /e/&er of
the tea/1
L1 =hen you say (tea/,Q who %o/)ose the
tea/N
$1 I and /ore or less eight 2?3 )erson,
/aMa/.
L1 Can you na/e the /e/&er of the tea/N
$1 ur tea/ led &y Ins)e%tor Medel 0oTe, I
/yself, 0* El/er Sara/)ote, 0" !oli
Jingo H. Bivel, SPO* Ro)1B2o
S1>@o), and I %an not re/e/&er the
others, /aMa/.
[:"]
T8%@% 10% H5%@'(o)@ 98(&8 &1))o' /% .%' 9('8 1
Bo&<C19. Sin%e S08 Castro a))ears not to &e a )art of
the &uy-&ust tea/, how and when did he
[:*]
get hold of
the s)e%i/en e4a/ined &y 0oli%e Ins)e%tor
EustaFuioN =ho entrusted the su&stan%e to hi/ and
reFuested hi/ to su&/it it for e4a/inationN ;or how
long was he in )ossession of the eviden%e &efore he
turned it over to the 0!0 Cri/e Da&oratoryN =ho else
had a%%ess to the s)e%i/en fro/ the ti/e it was
allegedly ta'en fro/ a))ellants when arrestedN These
Fuestions should &e answered satisfa%torily to deter/ine
whether the integrity of the eviden%e was %o/)ro/ised
in any way. therwise, the )rose%ution %annot /aintain
that it was a&le to )rove the guilt of the a))ellants
&eyond reasona&le dou&t.
VI
;inally, the denials and )roffered e4)lanations of
a))ellants assu/e signifi%an%e in light of the
insuffi%ien%y of eviden%e of the )rose%ution.
$))ellant ng testified that he was arrested
on 45B> !*, 1##, when he was s%heduled to /eet with a
%ertain ng Sin for a )ossi&le 7o& as te%hni%ian in a
&ihon fa%tory. n his )art, a))ellant Ce Ming %lai/ed
that when he was arrested on 45B> !*, 1##,, he was in
the area waiting for his girlfriend and her /other who 7ust
went inside a townhouse at ?
th
Street, !ew
Manila, Lue.on City. Ais girlfriendMs /other, $velina
Cardo., %onfir/ed his e4)lanation. The )rose%ution tells
a different story, the un%orro&orated story of S0"
Hon.ales that their tea/ entra))ed the a))ellants in a
&uy-&ust o)eration on 45B> !+, 1##,. ur /inds rest
uneasy on the lone testi/ony of S0" Hon.ales.
WHEREFORE, the Ce%ision of the %ourt a Fuo is
BE5EBSEC and SET $SICE. $))ellants =IDDI$M
!H y DI and CAI!H CE MI!H V BBEBT TIG, are
$CLGITTEC of the %ri/e of violation of Se%tion ":,
$rti%le III, in relation to Se%tion *, $rti%le I of B.$. !o.
<8*:, otherwise 'nown as The Cangerous Crugs $%t of
"@>*, as a/ended, and are ordered i//ediately
released fro/ %ustody unless held for so/e other lawful
%ause.
The Cire%tor of 0risons is CIBECTEC to i/)le/ent
this de%ision i//ediately and to infor/ this Court within
five 2:3 days fro/ re%ei)t of this de%ision of the date the
a))ellants are a%tually released fro/
%onfine/ent. Costs de offi%io.
SO ORDERED.
BATAS PAMBANSA BLG. !!
AN ACT PENALIZING THE MAKING OR DRAWING
AND ISSUANCE OF A CHECK WITHOUT SUFFICIENT
FUNDS OR CREDIT AND FOR OTHER PURPOSES.
Se%tion ". Chec(s 'ithout sufficient funds. - $ny )erson
who /a'es or draws and issues any %he%' to a))ly on
a%%ount or for value, 'nowing at the ti/e of issue that he
does not have suffi%ient funds in or %redit with the
drawee &an' for the )ay/ent of su%h %he%' in full u)on
its )resent/ent, whi%h %he%' is su&seFuently
dishonored &y the drawee &an' for insuffi%ien%y of funds
or %redit or would have &een dishonored for the sa/e
reason had not the drawer, without any valid reason,
ordered the &an' to sto) )ay/ent, shall &e )unished &y
i/)rison/ent of not less than thirty days &ut not /ore
than one 2"3 year or &y a fine of not less than &ut not
/ore than dou&le the a/ount of the %he%' whi%h fine
shall in no %ase e4%eed Two Aundred Thousand 0esos,
or &oth su%h fine and i/)rison/ent at the dis%retion of
the %ourt. %han ro&les virtual law li&rary
The sa/e )enalty shall &e i/)osed u)on any )erson
who, having suffi%ient funds in or %redit with the drawee
&an' when he /a'es or draws and issues a %he%', shall
fail to 'ee) suffi%ient funds or to /aintain a %redit to
%over the full a/ount of the %he%' if )resented within a
)eriod of ninety 2@+3 days fro/ the date a))earing
thereon, for whi%h reason it is dishonored &y the drawee
&an'.
=here the %he%' is drawn &y a %or)oration, %o/)any or
entity, the )erson or )ersons who a%tually signed the
%he%' in &ehalf of su%h drawer shall &e lia&le under this
$%t.
Se%. *. )vidence of (no'ledge of insufficient funds. -
The /a'ing, drawing and issuan%e of a %he%' )ay/ent
of whi%h is refused &y the drawee &e%ause of insuffi%ient
funds in or %redit with su%h &an', when )resented within
ninety 2@+3 days fro/ the date of the %he%', shall &e
)ri/a fa%ie eviden%e of 'nowledge of su%h insuffi%ien%y
of funds or %redit unless su%h /a'er or drawer )ays the
holder thereof the a/ount due thereon, or /a'es
arrange/ents for )ay/ent in full &y the drawee of su%h
%he%' within 2:3 &an'ing days after re%eiving noti%e that
su%h %he%' has not &een )aid &y the drawee.
Se%. ,. Duty of dra'ee6 rules of evidence. - It shall &e
the duty of the drawee of any %he%', when refusing to
)ay the sa/e to the holder thereof u)on )resent/ent, to
%ause to &e written, )rinted, or sta/)ed in )lain
language thereon, or atta%hed thereto, the reason for
draweeJs dishonor or refusal to )ay the sa/e1 Provided,
That where there are no suffi%ient funds in or %redit with
su%h drawee &an', su%h fa%t shall always &e e4)li%itly
stated in the noti%e of dishonor or refusal. In all
)rose%utions under this $%t, the introdu%tion in eviden%e
of any un)aid and dishonored %he%', having the
draweeJs refusal to )ay sta/)ed or written thereon or
atta%hed thereto, with the reason therefor as aforesaid,
shall &e )ri/a fa%ie eviden%e of the /a'ing or issuan%e
of said %he%', and the due )resent/ent to the drawee
for )ay/ent and the dishonor thereof, and that the sa/e
was )ro)erly dishonored for the reason written, sta/)ed
or atta%hed &y the drawee on su%h dishonored %he%'.
!otwithstanding re%ei)t of an order to sto) )ay/ent, the
drawee shall state in the noti%e that there were no
suffi%ient funds in or %redit with su%h &an' for the
)ay/ent in full of su%h %he%', if su%h &e the fa%t.
Se%. 8. Credit construed. - The word AcreditA as used
herein shall &e %onstrued to /ean an arrange/ent or
understanding with the &an' for the )ay/ent of su%h
%he%'.
Se%. :. 2iability under the Revised Penal Code. -
0rose%ution under this $%t shall &e without )re7udi%e to
any lia&ility for violation of any )rovision of theBevised
0enal Code.
Se%. <. Separability clause. - If any se)ara&le )rovision
of this $%t &e de%lared un%onstitutional, the re/aining
)rovisions shall %ontinue to &e in for%e.
Se%. >. )ffectivity. - This $%t shall ta'e effe%t fifteen days
after )u&li%ation in the ffi%ial Ha.ette.
!pproved: $)ril ,, "@>@.
G.R. No@. 5#5,"$ 41)510> 11, 1##0
PETER NIERRAS, )etitioner,
vs.
HON. AUMENCIO C. DACUYCUY 1)2 HON. ANTONIO
S. LOPEZ, () '8%(0 &1-1&('> 1@ P0%@(2(); 452;%,
B01)&8 IV, Co50' oA F(0@' I)@'1)&% oA L%>'%, P1Bo,
L%>'%, 1)2 C('> F(@&1B oA T1&Bo/1) C('>, L%>'%,
0%@-%&'(:%B>, res)ondents.
"ictor C. "eloso for petitioner.

PARAS, J.:
Before Gs is a )etition for certiorari with )reli/inary
in7un%tion for the annul/ent of the resolution dated
Se)te/&er ">, "@?" of the res)ondent Judge $u4en%io
C. Ca%uy%uy in nine 2@3 %ri/inal %ases, entitled E0eo)le
of the 0hili))ines v. 0eter !ierrasE do%'eted as Cri/inal
Cases !os. 8,>@, 8,?+, 8,?", 8,?*, 8,?,, 8,?8, 8,?:,
8,?< and 8,?>, for estafa under $rti%le ,": 2*-d3 of the
Bevised 0enal Code whi%h denied )etitionerJs /otion to
Fuash. Said /otion to Fuash was filed &y )etitioner on
the ground of dou&le 7eo)ardy as these offenses were
already in%luded in Cri/inal Cases !os. ,>@+, ,>@",
,>@*, ,>@,, 8+?:, 8"**, 8"*,, 8"*8, and 8"*:, entitled
E0eo)le of the 0hili))ines v. 0eter !ierras,E for violation
of the Boun%ing Che%'s Daw or Batas 0a/&ansa Blg.
**, )ending &efore the lower %ourt. In &oth sets of
%ri/inal %ases, )etitioner entered a )lea of not guilty
u)on arraign/ent &efore the lower %ourt. Aowever,
i//ediately after his )lea of not guilty in these estafa
%ases, )etitioner /oved in o)en %ourt to &e allowed to
withdraw his )lea of not guilty u)on his filing of a /otion
to Fuash, whi%h was denied &y res)ondent Judge ruling
as follows1
The /otion to Fuash should &e and is
here&y denied. $%%used 0eter !ierras
allegedly issued the %he%'s in favor of
%o/)lainant 0ili)inas Shell 0etroleu/
Cor)oration in )ay/ent of oil )rodu%ts
whi%h the latter delivered to hi/
si/ultaneously with the issuan%e of the
%he%'s.
444 444 444
. . . The %ri/e of estafa %o//itted &y
/eans of &oun%ing %he%'s is not
%o//itted &y /ere issuan%e of a %he%'.
Gnder $rt. ,":, )ar. * 2d3 of the Bevised
0enal Code, as a/ended &y Be)u&li%
$%t 8??:, the following are the ele/ents
of estafa1 2"3 the )ostdating or issuan%e
of a %he%' in )ay/ent of an o&ligation
%ontra%ted at the ti/e the %he%' was
issued9 2*3 la%' of or insuffi%ien%y of
funds to %over the %he%'9 and 2,3
da/age to the )ayee thereof 20eo)le v.
Sa&io, ?< SCB$ :<?3. Gnder Batas
0a/&ansa Bilang ** 2"@>@3 the /ere
issuan%e of a %he%' without suffi%ient
funds issued in )ay/ent of
a simultaneous o&ligation and the %he%'
was dishonored u)on )resentation for
that estafa is %o//itted under the
Bevised 0enal Code. $t the sa/e ti/e,
the drawer will also &e lia&le under
Batas 0a/&ansa Bilang ** for offense
of issuing a %he%' without suffi%ient
funds 2)). "-*, Besolution n Motion To
Luash dated Se)te/&er ">, "@?"9
$nne4 EMME, 0etition3. 2). "++, Rollo3
The issue now su&/itted for ur %onsideration is
whether the filing of the nine 2@3 other infor/ations for
estafa against )etitioner under the Bevised 0enal Code
after he had earlier &een %harged with violation of Batas
0a/&ansa Blg. ** for issuing the sa/e &oun%ing %he%'s
will )ut hi/ in 7eo)ardy of &eing %onvi%ted twi%e for the
sa/e offenses. In other words, %an )etitioner &e held
lia&le for the nine %ri/inal %ases for violation of Batas
0a/&ansa Blg. **, and se)arately also &e held lia&le for
the %ri/e of estafa under $rti%le ,": 2*-d3 of the Bevised
0enal Code for the issuan%e of the sa/e &oun%ing
%he%'sN
It a))ears that )etitioner, a %usto/er of 0ili)inas Shell
0etroleu/ Cor)oration, )ur%hased oil )rodu%ts fro/ it.
Si/ultaneous with the delivery of the )rodu%ts, he
issued nine 2@3 %he%'s in )ay/ent thereof. G)on
)resentation to the 0hili))ine !ational Ban' at !aval,
Deyte, said %he%'s were dishonored for the reason that
his a%%ount was already %losed. Thereafter, 0ili)inas
Shell 0etroleu/ Cor)oration re)eatedly de/anded of
)etitioner either to de)osit funds for his %he%'s or )ay for
the oil )rodu%ts he had )ur%hased &ut he failed and
refused to do either.
0etitioner argues that he would &e )la%ed in dou&le
7eo)ardy as all the ele/ents of estafa under $rti%le ,":
2*-d3 of the Bevised 0enal Code are also )resent in that
%ri/e )unisha&le under Batas 0a/&ansa Bilang **
na/ely 2"3 Ethe )ostdating or issuan%e of a %he%' in
)ay/ent of an o&ligation %ontra%ted at the ti/e the
%he%' was issued9 2*3 la%' or insuffi%ien%y of funds to
%over the %he%' and 2,3 da/age to the )ayee thereof.E
0etitionerJs %ontentions are devoid of /erit.
0etitioner is %harged with two 2*3 distin%t and se)arate
offenses, first under Se%tion " of Batas 0a/&ansa
Bilang ** a))roved on $)ril ,, "@>@ whi%h )rovides that1
$ny )erson who /a'es or draws and
issues any %he%' to a))ly on a%%ount or
for value, 'nowing at the ti/e of issue
that he does not have suffi%ient funds in
or %redit with the drawee &an' for the
)ay/ent of su%h %he%' in full u)on its
)resent/ent, whi%h %he%' is
su&seFuently dishonored &y the drawee
&an' for insuffi%ien%y of funds or %redit
or would have &een dishonored for the
sa/e reason had not the drawer,
without any valid reason ordered the
&an' to sto) )ay/ent, shall &e )unished
&y i/)rison/ent of not less than thirty
days &ut not /ore than one 2"3 year or
&y a fine of not less than &ut not /ore
than dou&le the a/ount of the %he%'
whi%h fine shall in no %ase e4%eed T=
AG!CBEC TAGS$!C 0ESS or &oth
su%h fine and i/)rison/ent at the
dis%retion of the %ourt.
and, se%ond, under $rti%le ,":, 2*-d3 of the
Bevised 0enal Code whi%h states as follows1
$rt. ,":. S'indling estafa#. $ny )erson
who shall defraud another &y any of the
/eans /entioned herein &elow . . .
444 444 444
*. By /eans of any of the following false
)retenses or fraudulent a%ts, e4e%uted
)rior to or si/ultaneously with the
%o//ission of the fraud9
444 444 444
2d3 By )ostdating a %he%' or issuing a
%he%' in )ay/ent of an o&ligation when
the offender had no funds in the &an', or
his funds de)osited therein were not
suffi%ient to %over the a/ount of the
%he%'.
=hat )etitioner failed to /ention in his argu/ent is the
fa%t that de%eit and da/age are essential ele/ents in
$rti%le ,": 2*-d3 Bevised 0enal Code, &ut
are not reFuired in Batas 0a/&ansa Bilang **. Gnder
the latter law, /ere issuan%e of a %he%' that is
dishonored gives rise to the )resu/)tion of 'nowledge
on the )art of the drawer that he issued the sa/e
without suffi%ient funds and hen%e )unisha&le 20eo)le v.
5eridiano, ",* SCB$ :*,3 whi%h is not so under the
0enal Code. ther differen%es &etween the two also
in%lude the following1 2"3 a drawer of a dishonored %he%'
/ay &e %onvi%ted under Batas 0a/&ansa Bilang **
even if he had issued the sa/e for a pre-
e<isting o&ligation, while under $rti%le ,": 2*-d3 of the
Bevised 0enal Code su%h %ir%u/stan%e negates
%ri/inal lia&ility9 2*3 s)e%ifi% and different )enalties are
i/)osed in ea%h of the two offenses9 2,3 estafa is
essentially a %ri/e against )ro)erty, while violation of
Batas 0a/&ansa Bilang ** is )rin%i)ally a %ri/e against
)u&li% interest as it does in7ury to the entire &an'ing
syste/9 283 violations of $rti%le ,": of the Bevised 0enal
Code are mala in se, while those of Batas 0a/&ansa
Bilang ** are mala prohibita.
These differen%es are &etter understood &y )resenting
the )ertinent dis%ussions on the )assage of Batas
0a/&ansa Bilang ** &etween the author of the &ill,
for/er Soli%itor Heneral and Me/&er of the Batasang
0a/&ansa, the Aonora&le Estelito 0. Mendo.a,
)resented in the /e/orandu/ for the govern/ent as
follows1
MB. ME!CP$. $f
there is evidence
demonstrating that the
act committed does not
only violate this
proposed !ct but also
the Revised Penal
Code+ there 'ill be
further prosecution
under the Revised
Penal Code. That is
why it is )ro)osed in
this $%t that there &e a
single unifor/ )enalty
for all violations in this
$%t. Aowever the %ourt
is given the dis%retion
whether to i/)ose
i/)rison/ent or fine or
&oth or also in whatever
severity the %ourt /ay
%onsider a))ro)riate
under the
%ir%u/stan%es.
444 444 444
MB. 5EDS, ;. The
other way around, it is
not so. So )re%isely, if I
file a %ase for estafa
against a )arti%ular
)erson for issuan%e of a
&oun%ing %he%', then
ne%essarily I %an also
&e )rose%uted under
this )ro)osed &ill. n
the other hand, if a
)erson is )rose%uted
under the )ro)osed &ill,
it does not ne%essarily
follow that he %an &e
)rose%uted for estafa.
MB. ME!CP$. This is
si/)ly &e%ause that in a
%ertain set of
%ir%u/stan%es, the
offense under this $%t is
the only offense
%o//itted while under
a different set of
%ir%u/stan%es, not only
the offense des%ri&ed in
this $%t is %o//itted &ut
also estafa. So that, for
e4a/)le, if a %he%' with
suffi%ient funds is
issued in )ay/ent of a
)re-e4isting o&ligation
and the )osition of the
Hovern/ent should turn
out to &e %orre%t that
there is no estafa, then
the drawer of the %he%'
would only &e lia&le
under this $%t &ut not
under the Bevised
0enal Code. But if he
issues a %he%' in
)ay/ent, or
%onte/)oraneously with
in%urring, of an
o&ligation, then he will
&e lia&le not only for
estafa &ut also for
violation for this $%t.
There is a differen%e
&etween the two %ases.
In that situation where
the %he%' was issued in
)ay/ent of a )re-
e4isting o&ligation, the
issuan%e of the %he%'
does not %ause da/age
to the )ayee and so it is
&ut a))ro)riate that he
should not &e held for
estafa &ut only for
violating this $%t. But if
he issued a chec( to
induce another, to )art
with a valua&le
%onsideration and the
%he%' &oun%es, then he
does inflict an inBury to
the payee of the chec(
apart from violating this
la'. In that %ase, it
should &e &ut fair that
he &e su&7e%t to
)rose%ution not only for
estafa &ut also for
violating this law.
MB. 5EDS, ;. Ies, I
agree with the Soli%itor
Heneral on that )oint
&ut /y worry is with
res)e%t to situations
where there is
)rose%ution first to
estafa.
MB. ME!CP$. =ell, if
there is estafa . . .
MB. 5EDS, ;. Estafa
%o//itted &y the
issuan%e of a &oun%ing
%he%', in whi%h %ase it
will &e /andatory on
the )art of the
)rose%uting offi%ial to
also file a %ase for
violation of this offense
under the )ro)osed &ill.
MB. ME!CP$. Ies,
that is %orre%t. $n such a
situation because if the
offender did not only
cause inBury on account
of the issuance of the
chec( but did issue a
bouncing chec(
penali1ed under this
!ct+ then he 'ill be
liable for
prosecution under &oth
laws. I would ad/it that
)erha)s in su%h
situation, the )enalty
/ay &e so/ewhat
severe. $s a /atter of
fa%t, in other
7urisdi%tions, the
issuan%e of &oun%ing
%he%'s is )enali.ed with
su&stantially lower
)enalty. Aowever,
&e%ause of the situation
in the 0hili))ines, the
situation &eing now
relatively grave that
)ra%ti%ally every&ody is
%o/)laining a&out
&oun%ing %he%'s, /ay
&e it is ne%essary at
least initially, at this
)oint in ti/e for us to
i/)ose a rather severe
)enalty and even allow
lia&ility not only under
this $%t &ut also for
estafa. Then )erha)s,
after the ne%essary
dis%i)line has &een
in%ul%ated in our )eo)le
and that the in%iden%e
of the offense has &een
redu%ed, we /ay then
de%ide to a/end the
law and redu%e the
)enalty. But at this ti/e,
shall we say the evil is
of su%h /agnitude that
only a dra/ati% and
e4)editious effort to
)rose%ute )ersons who
issue &oun%ing %he%'s
/ay &e ne%essary to
%ur& Fui%'ly this evil.
2e4)lanations given &y
Soli%itor Heneral
ESTEDIT 0.
ME!CP$ at the
Batasan 0a/&ansa
during his s)onsorshi)
s)ee%h of B0 ** whi%h
he authored, )ages
"+,>-"+,?, Be%ord of
the Batasan, 0lenary
Session !o. >+, Ce%. 8,
"@>?3. 2E/)hasis
su))lied3. 2)). "":-
"">,Rollo or )). @-"",
Me/orandu/ for
res)ondents3.
;urther/ore, Se%tion : of Batas 0a/&ansa Bilang **
)rovides that1
0rose%ution under this $%t shall &e
without )re7udi%e to any lia&ility for
violation of any )rovision of the Bevised
0enal Code.
=hile the filing of the two sets of Infor/ation under the
)rovisions of Batas 0a/&ansa Bilang ** and under the
)rovisions of the Bevised 0enal Code, as a/ended, on
estafa, /ay refer to identi%al a%ts %o//itted &y
)etitioner, the )rose%ution thereof %annot &e li/ited to
one offense, &e%ause a single %ri/inal a%t /ay give rise
to a /ulti)li%ity of offenses and where there is varian%e
or differen%es &etween the ele/ents of an offense in one
law and another law as in the %ase at &ar there will &e no
dou&le 7eo)ardy &e%ause what the rule on dou&le
7eo)ardy )rohi&its refers to identity of ele/ents in the
two 2*3 offenses. therwise stated )rose%ution for the
sa/e act is not )rohi&ited. =hat is for&idden is
)rose%ution for the sa/e offense. Aen%e, the /ere filing
of the two 2*3 sets of infor/ation does not itself give rise
to dou&le 7eo)ardy 20eo)le v. Miraflores, "": SCB$
:>+3.
In the instant )etition, certiorari is not the )ro)er re/edy.
=e have held in !charon v. Purisima+ et al. 2", SCB$
,+@3 that Ewhen a /otion to Fuash a %ri/inal %ase is
denied, re/edy is not certiorari &ut to go to %ourt without
)re7udi%e to reiterating s)e%ial defenses invo'ed in the
/otion, and if after trial on the /erits, an adverse
de%ision is rendered, to a))eal therefro/ in the /anner
authori.ed &y law,E invo'ing the rule laid down in People
v.8agdaluyo 2" SCB$ @@+3. If the )etitioner %annot
a))eal at this state of the )ro%eeding, it is &e%ause there
is still a ne%essity for the trial on the /erits wherein the
)arties /ay )resent )roofs in su))ort of their
%ontentions and not &e%ause the re/edy of a))eal is
unavailing.
=AEBE;BE, )re/ises %onsidered, the )etition
for certiorari is here&y CISMISSEC for la%' of /erit.
S BCEBEC.
G.R. No. 11#1$,. 45)% !0, 1##$6
LINA LIM LAO, petitioner, vs. COURT OF APPEALS
1)2 PEOPLE OF THE
PHILIPPINES, respondents.
D E C I S I O N
PANGANIBAN, J.7
May an e/)loyee who, as )art of her regular
duties, signs &lan' %or)orate %he%'s -- with the na/e of
the )ayee and the a/ount drawn to &e filled later &y
another signatory -- and, therefore, does so without
a%tual 'nowledge of whether su%h %he%'s are
funded, &e held %ri/inally lia&le for violation of Batas
0a/&ansa Bilang ** 2B.0. **3, when %he%'s so signed
are dishonored due to insuffi%ien%y of fundsN Coes a
noti%e of dishonor sent to the /ain offi%e of the
%or)oration %onstitute a valid noti%e to the said e/)loyee
who holds offi%e in a se)arate &ran%h and who had no
a%tual 'nowledge thereofN In other words, is
%onstru%tive 'nowledge of the %or)oration, &ut not of the
signatory-e/)loyee, suffi%ientN
These are the Fuestions raised in the )etition filed
on Mar%h *", "@@: assailing the Ce%ision
["]
of
Bes)ondent Court of $))eals
[*]
)ro/ulgated on
Ce%e/&er @, "@@8 in C$-H.B. CB !o. "8*8+ dis/issing
the a))eal of )etitioner and affir/ing the de%ision dated
Se)te/&er *<, "@@+ in Cri/inal Case !os. ?8-*<@<> to
?8-*<@<@ of the Begional Trial Court of Manila, Bran%h
,,. The dis)ositive )ortion of the said BTC de%ision
affir/ed &y the res)ondent a))ellate %ourt reads1
[,]
(=AEBE;BE, after a %areful %onsideration of the
eviden%e )resented &y the )rose%ution and that of the
defense, the Court renders 7udg/ent as follows1
In Cri/inal Case !o. ?8-*<@<@ where no eviden%e was
)resented &y the )rose%ution notwithstanding the fa%t
that there was an agree/ent that the %ases &e tried
7ointly and also the fa%t that the a%%used Dina Di/ Dao
was already arraigned, for failure of the )rose%ution to
addu%e eviden%e against the a%%used, the Court here&y
de%lares her inno%ent of the %ri/e %harged and she is
here&y a%Fuitted with %ost de ofi%io.
;or Cri/inal Case !o. ?8-*<@<>, the Court finds the
a%%used Dina Di/ Dao guilty &eyond reasona&le dou&t of
the %ri/e %harged and is here&y senten%ed to suffer the
)enalty of !E 2"3 IE$B i/)rison/ent and to )ay a
fine of 0":+,+++.++ without su&sidiary i/)rison/ent in
%ase of insolven%y.
;or Cri/inal Case !o. ?8-*<@<?, the Court finds the
a%%used Dina Di/ Dao guilty &eyond reasona&le dou&t of
the %ri/e %harged and is here&y senten%ed to suffer the
)enalty of !E 2"3 IE$B i/)rison/ent and to )ay a
fine of 0":+,+++.++ without su&sidiary i/)rison/ent in
%ase of of 2si%3 insolven%y.
;or the two %ases the a%%used is ordered to )ay the %ost
of suit.
The %ash &ond )ut u) &y the a%%used for her )rovisional
li&erty in Cri/inal Case !o. ?8-*<@<@ where she is
de%lared a%Fuitted is here&y ordered %an%elled 2si%3.
=ith referen%e to the a%%used Teodulo $s)re% who has
re/ained at large, in order that the %ases as against hi/
/ay not re/ain )ending in the do%'et for an indefinite
)eriod, let the sa/e &e ar%hived without )re7udi%e to its
su&seFuent )rose%ution as soon as said a%%used is
finally a))rehended.
Det a warrant issue for the arrest of the a%%used Teodulo
$s)re% whi%h warrant need not &e returned to this Court
until the a%%used is finally arrested.
S BCEBEC.Q
T8% F1&'@
Version of the Prosecution
The fa%ts are not dis)uted. =e thus lift the/ fro/
the assailed Ce%ision, as follows1
($))ellant 2and now 0etitioner Dina Di/ Dao3 was a
7unior offi%er of 0re/iere Invest/ent Aouse 20re/iere3
in its Binondo Bran%h. $s su%h offi%er, she was
authori.ed to sign %he%'s for and in &ehalf of the
%or)oration 2TS!, $ugust "<, "@@+, ). <3. In the %ourse
of the &usiness, she /et %o/)lainant ;ather $rteli7o
0eli7o, the )rovin%ial treasurer of the So%iety of the
Civine =ord through Mrs. Bose/arie Da%henal, a trader
for 0re/iere. ;ather 0ali7o was authori.ed to invest
donations to the so%iety and had &een investing the
so%ietyMs /oney with 0re/iere 2TS!, June *,, "@?>, )).
:, @-"+3. ;ather 0ali7o had invested a total
of 0:"8,8?8.+8, as eviden%ed &y the Confir/ation of
Sale !o. ?*-<@@8 2E4h X$M3 dated July ?, "@@,. ;ather
0ali7o was also issued Traders Boyal Ban' 2TBB3
%he%'s in )ay/ent of interest, as follows1
C8%&< D1'% A.o5)'
*@@@<" %t. >,
"@@, 2si%3 0":+,+++.++ 2E4h. XBM3
*@@@<* %t. >,
"@?, 0":+,+++.++ 2E4h. XCM3
,*,?,: %t. >,
"@?, 0 *<,+"+.>,
$ll the %he%'s were issued in favor of $rteli7o $. 0ali7o
and signed &y a))ellant 2herein )etitioner3 and Teodulo
$s)re%, who was the head of o)erations. ;urther
eviden%e of the transa%tion was the a%'nowledg/ent of
)ostdated %he%'s dated July ?, "@?, 2E4h . XCM3 and the
%ash dis&urse/ent vou%her 2E4h. X;M, TS!, su)ra, at )).
""-"<3.
=hen ;ather 0ali7o )resented the %he%'s for
en%ash/ent, the sa/e were dishonored for the reason
XCrawn $gainst Insuffi%ient ;undsM 2C$I;3. ;ather 0ali7o
i//ediately /ade de/ands on )re/iere to )ay hi/ the
ne%essary a/ounts. Ae first went to the Binondo
Bran%h &ut was referred to the Cu&ao Main Bran%h
where he was a&le to tal' with the 0resident, Mr.
CariTo. ;or his efforts, he was )aid 0:,+++.++. Sin%e
no other )ay/ents followed, ;ather 0ali7o wrote
0re/iere a for/al letter of de/and. Su&seFuently,
0re/iere was )la%ed under re%eivershi)Q 2TS!, su)ra,
at )). "<-"@3.
[8]
Thereafter, on January *8, "@?8, 0rivate
Co/)lainant 0ali7o filed an affidavit-%o/)laint against
0etitioner Dina Di/ Dao and Teodulo $s)re% for violation
of B.0. **. $fter )reli/inary investigation,
[:]
three
Infor/ations %harging Dao and $s)re% with the offense
defined in the first )aragra)h of Se%tion ", B.0. ** were
filed &y $ssistant ;is%al ;eli4 S. Ca&alles &efore the trial
%ourt on May "", "@?8,
[<]
worded as follows1
". In Cri/inal Case !o. ?8-*<@<>1
(That on or a&out %to&er >, "@?, in the City of Manila,
0hili))ines, the said a%%used did then and there wilfully
and unlawfully draw and issue to $rteli7o $. 0ali7o to
a))ly on a%%ount or for value a Traders Boyal Ban'
Che%' !o. *@@@<* for 0":+,+++.++ )aya&le to ;r.
$rteli7o $. 0ali7o dated %to&er >, "@?, well 'nowing that
at the ti/e of issue he6she did not have suffi%ient funds
in or %redit with the drawee &an' for full )ay/ent of the
said %he%' u)on its )resent/ent as in fa%t the said
%he%', when )resented within ninety 2@+3 days fro/ the
date thereof, was dishonored &y the drawee &an' for the
reason1 XInsuffi%ient ;undsM9 that des)ite noti%e of su%h
dishonor, said a%%used failed to )ay said $rteli7o $. 0ali7o
the a/ount of the said %he%' or to /a'e arrange/ent for
full )ay/ent of the sa/e within five 2:3 &an'ing days
fro/ re%ei)t of said noti%e.
C!TB$BI T D$=.Q
*. In Cri/inal Case !o. ?8-*<@<?1
(That on or a&out %to&er >, "@?, in the City of Manila,
0hili))ines, the said a%%used did then and there wilfully
and unlawfully draw and issue to $rteli7o $. 0ali7o to
a))ly on a%%ount or for value a Traders Boyal Ban'
Che%' !o. *@@@<" for 0":+,+++.++ )aya&le to ;r.
$rteli7o $. 0ali7o dated %to&er >, X?, well 'nowing that
at the ti/e of issue he6she did not have suffi%ient funds
in or %redit with the drawee &an' for full )ay/ent of the
said %he%' u)on its )resent/ent as in fa%t the said
%he%', when )resented within ninety 2@+3 days fro/ the
date thereof, was dishonored &y the drawee &an' for the
reason1 XInsufi%ient ;undsM9 that des)ite noti%e of su%h
dishonor, said a%%used failed to )ay said $rteli7o $. 0ali7o
the a/ount of the said %he%' or to /a'e arrange/ent for
full )ay/ent of the sa/e within five 2:3 &an'ing days
fro/ re%ei)t of said noti%e.
C!TB$BI T D$=.Q
,. $nd finally in Cri/inal Case !o. ?8-*<@<@1
(That on or a&out July ?, "@?, in the City of Manila,
0hili))ines, the said a%%used did then and there wilfully
and unlawfully draw and issue to $rteli7o $. 0ali7o to
a))ly on a%%ount for value a Traders Boyal Ban' Che%'
!o. ,*,?,: for 0*<,+"+.+, )aya&le to ;r. $rteli7o $.
0ali7o dated %to&er >, "@?, well 'nowing that at the
ti/e of issue he6she did not have suffi%ient funds in or
%redit with the drawee &an' for full )ay/ent of the said
%he%' u)on its )resent/ent as in fa%t the said %he%',
when )resented within ninety 2@+3 days fro/ the date
thereof, was dishonored &y the drawee &an' for the
reason1 XInsuffi%ient ;undsM9 that des)ite noti%e of su%h
dishonor, said a%%used failed to )ay said $rteli7o $. 0ali7o
the a/ount of the said %he%' or to /a'e arrange/ent for
full )ay/ent of the sa/e within five 2:3 &an'ing days
fro/ re%ei)t of said noti%e.
C!TB$BI T D$=.Q
G)on &eing arraigned, )etitioner assisted &y
%ounsel )leaded (not guilty.Q $s)re% was not arrested9
he has re/ained at large sin%e the trial, and even now
on a))eal.
$fter due trial, the Begional Trial Court %onvi%ted
0etitioner Dina Di/ Dao in Cri/inal Case !os. ?8-*<@<>
and ?8-*<@<? &ut a%Fuitted her in Cri/inal Case !o. ?8-
*<@<@.
[>]
n a))eal, the Court of $))eals affir/ed the
de%ision of the trial %ourt.
Version of the Defense
0etitioner a)tly su//ari.ed her version of the fa%ts
of the %ase thus1
(0etitioner Dina Di/ Dao was, in "@?,, an e/)loyee of
0re/iere ;inan%ing Cor)oration 2hereinafter referred to
as the XCor)orationM3, a %or)oration engaged in
invest/ent /anage/ent, with )rin%i)al &usiness offi%e
at Mia/i, Cu&ao, Lue.on City. She was a 7unior offi%er
at the %or)oration who was, however, assigned not at its
/ain &ran%h &ut at the %or)orationMs e4tension offi%e in
2Binondo3 Manila. (Ocampo, T.S.., !" #u$ust !%%&,
p. !'(
In the regular %ourse of her duties as a 7unior offi%er, she
was reFuired to %o-sign %he%'s drawn against the
a%%ount of the %or)oration. The other %o-signor was her
head of offi%e, Mr. Teodulo $s)re%. Sin%e )art of her
duties reFuired her to &e /ostly in the field and out of
the offi%e, it was nor/al )ro%edure for her to sign the
%he%'s in &lan', that is, without the na/es of the
)ayees, the a/ounts and the dates of /aturity. It was
li'ewise Mr. $s)re%, as head of offi%e, who alone
de%ided to who/ the %he%'s were to &e ulti/ately
issued and delivered. ()ao, T.S.., *+ September
!%+%, pp. %,!!, !-, !%.(
In signing the %he%'s as )art of her duties as 7unior
offi%er of the %or)oration, )etitioner had no 'nowledge of
the a%tual funds availa&le in the %or)orate
a%%ount. ()ao, T.S.., *+ September !%+%, p. *!( The
)ower, duty and res)onsi&ility of /onitoring and
assessing the &alan%es against the %he%'s issued, and
funding the %he%'s thus issued, devolved on the
%or)orationMs Treasury Ce)art/ent in its /ain offi%e in
Cu&ao, Lue.on City, headed then &y the Treasurer, Ms.
5eronilyn %a/)o. (Ocampo, T.S.., !% Jul. !%%&, p.
'/ )ao, T.S.., *+ September !%+%, pp. *!,*0( $ll
&an' state/ents regarding the %or)orate %he%'ing
a%%ount were li'ewise sent to the /ain &ran%h in Cu&ao,
Lue.on City, and not in Binondo, Manila, where
)etitioner was holding offi%e. (Ocampo, T.S.., !% Jul.
!%%&, p. *'/ 1ar2ueses, T.S.., ** ovember !%++, p.
+(
The foregoing %ir%u/stan%es attended the issuan%e of
the %he%'s su&7e%t of the instant )rose%ution.
The %he%'s were issued to guarantee )ay/ent of
invest/ents )la%ed &y )rivate %o/)lainant 0ali7o with
0re/iere ;inan%ing Cor)oration. In his transa%tions with
the %or)oration, )rivate %o/)lainant
dealt %=&B5@(:%B> with one Bose/arie Da%henal, a
trader %onne%ted with the %or)oration, and he never
'new nor in any way dealt with )etitioner Dina Di/ Dao at
any ti/e &efore or during the issuan%e of the delivery of
the %he%'s. (Pali3o, T.S.., *0 June !%+-, pp. *+,*%,
0*,0'/ )ao, T.S.., !4 1a. !%%&, p. "/ Ocampo,
T.S.., p. 4( 0etitioner Dina Di/ Dao was not in any way
involved in the transa%tion whi%h led to the issuan%e of
the %he%'s.
=hen the %he%'s were %o-signed &y )etitioner, they
were signed in advan%e and in &lan', delivered to the
Aead of )erations, Mr. Teodulo $s)re%, who
su&seFuently filled in the na/es of the )ayee, the
a/ounts and the %orres)onding dates of /aturity. $fter
Mr. $s)re% signed the %he%'s, they were delivered to
)rivate %o/)lainant 0ali7o. ()ao, T.S.., *+ September
!%+%, pp. +,!!, !-, !%/ note also that the trial court in
its decision full. accepted the testimon. of
petitioner 5Decision of the Re$ional Trial 6ourt, p.
!*7, and that the 6ourt of #ppeals affirmed said
decision in toto(
0etitioner Dina Di/ Dao was not in any way involved in
the %o/)letion, and the su&seFuent delivery of the
%he%' to )rivate %o/)lainant 0ali7o.
$t the ti/e )etitioner signed the %he%'s, she had no
'nowledge of the suffi%ien%y or insuffi%ien%y of the funds
of the %or)orate a%%ount. ()ao, T.S.., *+ September
!%+%, p. *!( It was not within her )owers, duties or
res)onsi&ilities to /onitor and assess the &alan%es
against the issuan%e9 /u%h less was it within her 2duties
and res)onsi&ilities3 to /a'e sure that the %he%'s were
funded. 0re/iere ;inan%ing Cor)oration had a Treasury
Ce)art/ent headed &y a Treasurer, Ms. 5eronilyn
%a/)o, whi%h alone had a%%ess to infor/ation as to
a%%ount &alan%es and whi%h alone was res)onsi&le for
funding the issued %he%'s. (Ocampo, T.S.., !% Jul.
!%%&, p. '/ )ao, T.S.., *+ September !%%&, p. *0( $ll
state/ents of a%%ount were sent to the Treasury
Ce)art/ent lo%ated at the /ain offi%e in Cu&ao, Lue.on
City. 0etitioner was holding offi%e at the e4tension in
Binondo Manila. ()ao, T.S.., *+ September !%+%, p.
*',*4( 0etitioner Dina Di/ Dao did not have 'nowledge
of the insuffi%ien%y of the funds in the %or)orate a%%ount
against whi%h the %he%'s were drawn.
=hen the %he%'s were su&seFuently dishonored, )rivate
%o/)lainant sent a noti%e of said dishonor to 0re/ier
;inan%ing Cor)oration at its head offi%e in Cu&ao,
Lue.on City. (Please refer to 89h. :8;/ Pali3o, T.S..,
*0 June !%+-, p. 4!( 0rivate %o/)lainant did not send
noti%e of dishonor to )etitioner. (Pali3o, T.S.., *' Jul.
!%+-, p. !&( Ae did not follow u) his invest/ent with
)etitioner. (<d.( 0rivate %o/)lainant never %onta%ted,
never infor/ed, and never tal'ed with, )etitioner after
the %he%'s had &oun%ed. (<d., at p. *%( 0etitioner never
had noti%e of the dishonor of the %he%'s su&7e%t of the
instant )rose%ution.
The Treasurer of 0re/iere ;inan%ing Cor)oration, Ms.
5eronilyn %a/)o testified that it was the head offi%e in
Cu&ao, Lue.on City, whi%h re%eived noti%e of dishonor
of the &oun%ed %he%'s. (Ocampo, T.S.., !% Jul.
!%%&, pp. -,+( The dishonor of the %he%' %a/e in the
wa'e of the assassination of the late Sen. Benigno
$Fuino, as a %onseFuen%e of whi%h event a /a7ority of
the %or)orationMs %lients )re-ter/inated their
invest/ents. $ )eriod of e4tre/e illiFuidity and finan%ial
distress followed, whi%h ulti/ately led to the
%or)orationMs &eing )la%ed under re%eivershi) &y the
Se%urities and E4%hange Co//ission. (Ocampo,
T.S.., !" #u$ust !%%&, p. +, !%/ )ao, T.S.., *+
September !%+%, pp. *4,*"/ Please refer also to
89hibit :!;, the order of receivership issued b. the
Securities and 89chan$e 6ommission( Ces)ite the
Treasury Ce)art/entMs and 2Ms. %a/)oMs3 'nowledge
of the dishonor of the %he%'s, however, the /ain offi%e in
Cu&ao, Lue.on City never infor/ed )etitioner Dina Di/
Dao or any&ody in the Binondo offi%e for that
/atter. (Ocampo, T.S.., !" #u$ust !%%&, pp. %,!&( In
her testi/ony, she 7ustified her o/ission &y saying that
the %he%'s were a%tually the res)onsi&ility of the /ain
offi%e (Ocampo, T.S.., !% Jul. !%%&, p. "( and that, at
that ti/e of )ani% withdrawals and /assive )re-
ter/ination of %lientsM invest/ents, it was futile to infor/
the Binondo offi%e sin%e the /ain offi%e was stra))ed for
%ash and in dee) finan%ial distress. (<d., at pp. -,
%( Moreover, the %onfusion whi%h %a/e in the wa'e of
the $Fuino assassination and the %onseFuent )ani%
withdrawals %aused the/ to lose dire%t %o//uni%ation
with the Binondo offi%e. (Ocampo, T.S.., !" #u$ust
!%%&, p. %,!&(
$s a result of the finan%ial %risis and distress, the
Se%urities and E4%hange Co//ission )la%ed 0re/ier
;inan%ing Cor)oration under re%eivershi), a))ointing a
reha&ilitation re%eiver for the )ur)ose of settling %lai/s
against the %or)oration. (89h. :!;( $s he hi/self
ad/its, )rivate %o/)lainant filed a %lai/ for the )ay/ent
of the &oun%ed %he%' &efore and even after the
%or)oration had &een )la%ed under
re%eivershi). (Pali3o, T.S.., *' Jul. !%+-, p. !&,!-( $
%he%' was )re)ared &y the re%eiver in favor of the
)rivate %o/)lainant &ut the sa/e was not %lai/ed &y
hi/. ()ao, T.S.., !4 1a. !%%&, p. !+(
0rivate %o/)lainant then filed the instant %ri/inal
a%tion. n *< Se)te/&er "@@+, the Begional Trial Court
of Manila, Bran%h ,,, rendered a de%ision %onvi%ting
)etitioner, and senten%ing the latter to suffer the
aggregate )enalty of two 2*3 years and to )ay a fine in
the total a/ount of 0,++,+++.++. n a))eal, the Court
of $))eals affir/ed said de%ision. Aen%e, this )etition
for review.Q
[?]
T8% I@@5%
In the /ain, )etitioner %ontends that the )u&li%
res)ondent %o//itted a reversi&le error in %on%luding
that la%' of a%tual 'nowledge of insuffi%ien%y of funds
was not a defense in a )rose%ution for violation of B.0.
**. $dditionally, the )etitioner argues that the noti%e of
dishonor sent to the /ain offi%e of the %or)oration, and
not to )etitioner herself who holds offi%e in that
%or)orationMs &ran%h offi%e, does not %onstitute the
noti%e /andated in Se%tion * of B0 **9 thus, there %an
&e no prima facie )resu/)tion that she had 'nowledge
of the insuffi%ien%y of funds.
T8% Co50'J@ R5B();
The )etition is /eritorious.
Strict <nterpretation of Penal Statutes
It is well-settled in this 7urisdi%tion that )enal
statutes are stri%tly %onstrued against the state and
li&erally for the a%%used, so /u%h so that the s%o)e of a
)enal statute %annot &e e4tended &y good intention,
i/)li%ation, or even eFuity %onsideration. Thus, for
0etitioner Dina Di/ DaoMs a%ts to &e )enali.ed under the
Boun%ing Che%'s Daw or B.0. **, (they /ust %o/e
%learly within &oth the s)irit and the letter of the
statute.Q
[@]
The salient )ortions of B.0. ** read1
(SECTI! ". Chec(s 'ithout sufficient funds. -- $ny
)erson who /a'es or draws and issues any %he%' to
a))ly on a%%ount or for value, 'nowing at the ti/e of
issue that he does not have suffi%ient funds in or %redit
with the drawee &an' for the )ay/ent of su%h %he%' in
full u)on its )resent/ent, whi%h %he%' is su&seFuently
dishonored &y the drawee &an' for insuffi%ien%y of funds
or %redit or would have &een dishonored for the sa/e
reason had not the drawer, without any valid reason,
ordered the &an' to sto) )ay/ent, shall &e )unished &y
i/)rison/ent of not less than thirty days &ut not /ore
than one 2"3 year or &y a fine of not less than &ut not
/ore than dou&le the a/ount of the %he%' whi%h fine
shall in no %ase e4%eed Two hundred thousand )esos,
or &oth su%h fine and i/)rison/ent at the dis%retion of
the %ourt.
The sa/e )enalty shall &e i/)osed u)on any )erson
who having suffi%ient funds in or %redit with the drawee
&an' when he /a'es or draws and issues a %he%', shall
fail to 'ee) suffi%ient funds or to /aintain a %redit or to
%over the full a/ount of the %he%' if )resented within a
)eriod of ninety 2@+3 days fro/ the date a))earing
thereon, for whi%h reason it is dishonored &y the drawee
&an'.
=here the %he%' is drawn &y a %or)oration, %o/)any or
entity, the )erson or )ersons who a%tually signed the
%he%' in &ehalf of su%h drawer shall &e lia&le under this
$%t.
SECTI! *. )vidence of (no'ledge of insufficient
funds. -- The /a'ing, drawing and issuan%e of a %he%'
)ay/ent of whi%h is refused &y the drawee &e%ause of
insuffi%ient funds in or %redit with su%h &an', when
)resented within ninety 2@+3 days fro/ the date of the
%he%', shall &e prima facie eviden%e of 'nowledge of
su%h insuffi%ien%y of funds or %redit unless su%h /a'er
or drawer )ays the holder thereof the a/ount due
thereon, or /a'es arrange/ents for )ay/ent in full &y
the drawee of su%h %he%' within five 2:3 &an'ing days
after re%eiving noti%e that su%h %he%' has not &een )aid
&y the drawee.Q
This Court listed the ele/ents of the offense
)enali.ed under B.0. **, as follows1 (2"3 the /a'ing,
drawing and issuan%e of any %he%' to a))ly to a%%ount
or for value9 2*3 the 'nowledge of the /a'er, drawer or
issuer that at the ti/e of issue he does not have
suffi%ient funds in or %redit with the drawee &an' for the
)ay/ent of su%h %he%' in full u)on its )resent/ent9 and
2,3 su&seFuent dishonor of the %he%' &y the drawee
&an' for insuffi%ien%y of funds or %redit or dishonor for
the sa/e reason had not the drawer, without any valid
%ause, ordered the &an' to sto) )ay/ent.Q
["+]
Justi%e Duis B. Beyes, an e/inent authority in
%ri/inal law, also enu/erated the ele/ents of the
offense defined in the first )aragra)h of Se%tion " of B.0.
**, thus1
(". That a )erson /a'es or
draws and issues any %he%'.
*. That the %he%' is /ade or drawn and
issued to apply on account or for value.
,. That the )erson who /a'es or draws and
issues the %he%' (no's at the time of
issue that he does not have suffi%ient funds
in or %redit with the drawee &an' for the
payment of such chec( in fullu)on its
)resent/ent.
8. That the %he%' is su&seFuently dishonored
&y the drawee &an' for insuffi%ien%y of
funds or %redit, or would have &een
dishonored for the sa/e reason had not the
drawer, 'ithout any valid reason, ordered
the &an' to sto) )ay/ent.Q
[""]
6ru9 of the Petition
0etitioner raised as defense &efore the Court of
$))eals her la%' of a%tual 'nowledge of the insuffi%ien%y
of funds at the ti/e of the issuan%e of the %he%'s, and
la%' of )ersonal noti%e of dishonor to her. The
res)ondent a))ellate %ourt, however, affir/ed the BTC
de%ision, reasoning that (the /a'erMs 'nowledge of the
insuffi%ien%y of funds is legally )resu/ed fro/ the
dishonor of his %he%'s for insuffi%ien%y of
funds. 2People vs. 2aggui+ ">" SCB$ ,+:9 &ieras vs.
Hon. !u<encio C. Dacuycuy+ "?" SCB$ "3Q
["*]
The Court
of $))eals also stated that (her alleged la%' of
'nowledge or intent to issue a &u/ %he%' would not
e4%ul)ate her fro/ any res)onsi&ility under B.0. Blg. **,
sin%e the a%t of /a'ing and issuing a worthless %he%' is
a malum prohibitum.Q
[",]
In the words of the Soli%itor
Heneral, (2s3u%h alleged la%' of 'nowledge is not
/aterial for )etitionerMs lia&ility under B.0.Blg. **.Q
["8]
)ac= of #ctual >no?led$e of <nsufficienc. of @unds
Wnowledge of insuffi%ien%y of funds or %redit in the
drawee &an' for the )ay/ent of a %he%' u)on its
)resent/ent is an essential ele/ent of the offense.
[":]
There is a prima facie )resu/)tion of the e4isten%e of
this ele/ent fro/ the fa%t of drawing, issuing or /a'ing
a %he%', the )ay/ent of whi%h was su&seFuently
refused for insuffi%ien%y of funds. It is i/)ortant to
stress, however, that this is not a %on%lusive
)resu/)tion that fore%loses or )re%ludes the
)resentation of eviden%e to the %ontrary.
In the )resent %ase, the fa%t alone that )etitioner
was a signatory to the %he%'s that were su&seFuently
dishonored /erely engenders the prima
facie )resu/)tion that she 'new of the insuffi%ien%y of
funds, &ut it does not render her auto/ati%ally guilty
under B.0. **. The )rose%ution has a duty to )rove all
the ele/ents of the %ri/e, in%luding the a%ts that give
rise to the prima facie )resu/)tion9 )etitioner, on the
other hand, has a right to re&ut the prima
facie )resu/)tion.
["<]
Therefore, if su%h 'nowledge of
insuffi%ien%y of funds is )roven to &e actually a&sent or
non-e4istent, the a%%used should not &e held lia&le for
the offense defined under the first )aragra)h of Se%tion
" of B.0. **. $lthough the offense %harged is a malum
prohibitum, the )rose%ution is not there&y e4%used fro/
its res)onsi&ility of )roving &eyond reasona&le dou&t all
the ele/ents of the offense, one of whi%h is 'nowledge
of the insuffi%ien%y of funds.
$fter a thorough review of the %ase at &ar, the Court
finds that 0etitioner Dina Di/ Dao did not have a%tual
'nowledge of the insuffi%ien%y of funds in the %or)orate
a%%ounts at the ti/e she affi4ed her signature to the
%he%'s involved in this %ase, at the ti/e the sa/e were
issued, and even at the ti/e the %he%'s were
su&seFuently dishonored &y the drawee &an'.
The s%o)e of )etitionerMs duties and res)onsi&ilities
did not en%o/)ass the funding of the %or)orationMs
%he%'s9 her duties were li/ited to the /ar'eting
de)art/ent of the Binondo &ran%h.
[">]
Gnder the
organi.ational stru%ture of 0re/iere ;inan%ing
Cor)oration, funding of %he%'s was the sole
res)onsi&ility of the Treasury Ce)art/ent. 5eronilyn
%a/)o, for/er Treasurer of 0re/iere, testified thus1
(L =ill you )lease tell us whose 2si%3
res)onsi&le for the funding of %he%'s in
0re/iereN
$ The one in %harge is the Treasury Civision
u) to the Treasury Cis&urse/ent and then
they give it dire%tly to Jose Ca&a%an,
0resident of 0re/iere.Q
["?]
;urther/ore, the Begional Trial Court itself found
that, sin%e 0etitioner Dina Di/ Dao was often out in the
field ta'ing %harge of the /ar'eting de)art/ent of the
Binondo &ran%h, she signed the %he%'s in &lan' as to
na/e of the )ayee and the a/ount to &e drawn,
and 'ithout (no'ledge of the transaction for 'hich they
'ere issued.
["@]
$s a /atter of %o/)any )ra%ti%e, her
signature was reFuired in addition to that of Teodulo
$s)re%, who alone )la%ed the na/e of the )ayee and
the a/ount to &e drawn thereon. This is %lear fro/ her
testi/ony1
(F 4 4 4 =ill you )lease or will you &e a&le to
tell us the %ondition of this %he%' when
you signed this or when you first saw this
%he%'N
=itness
a I signed the %he%' in &lan'. There were
no )ayee. !o a/ount, no date, sir.
F =hy did you sign this %he%' in &lan' when
there was no )ayee, no a/ount and no
dateN
a It is in order to fa%ilitate the transa%tion,
sir.
4 4 4 4 4
4 4 4 4
CGBT
2to witness3
F Is that your )ra%ti%eN
=itness
a 0ro%edure, Iour Aonor.
CGBT
That is Fuiet 2si%3 unusual. That is why I
a/ as'ing that last Fuestion if that is a
)ra%ti%e of your offi%e.
a $s a %o-signer, I sign first, sir.
F So the %he%' %annot &e en%ashed without
your signature, %o-signatureN
a Ies, sir.
$tty. Hon.ales
2to witness3
F !ow, you said that you sign first, after you
sign, who signs the %he%'N
a Mr. Teodoro $s)re%, sir.
F Is this Teodoro $s)re% the sa/e Teodoro
$s)re%, one of the a%%used in all these
%asesN
a Ies, sir.
F !ow, in the distri&ution or issuan%e of
%he%'s whi%h a%%ording to you, as a %o-
signee, you sign. =ho deter/ines to
who/ to issue or to who/ to )ay the
%he%' after Teodoro $s)re% signs the
%he%'N
=itness
a Ae is the one.
$tty. Hon.ales
F Mr. $s)re% is the one in-%harge
in . . . are you telling the Aonora&le
Court that it was Teodoro $s)re% who
deter/ines to who/ to issue the
%he%'N Coes he do that all the ti/eN
Court
F Coes he all the ti/eN
2to witness3
a Ies, Iour Aonor.
F So the %he%' %an &e negotiatedN So, the
%he%' %an &e good only u)on his
signingN =ithout his signing or signature
the %he%' %annot &e goodN
a Ies, Iour Aonor.
$tty. Hon.ales
2to witness3
F Iou /ade referen%e to a transa%tion whi%h
a%%ording to you, you signed this %he%' in
order to fa%ilitate the transa%tion . . . I
withdraw that Fuestion. I will refor/.
CGBT
2for %larifi%ation to witness3
=itness /ay answer.
F nly to fa%ilitate your &usiness
transa%tion, so you signed the other
%he%'sN
=itness
a Ies, Iour Aonor.
F So that when ever there is a transa%tion all
is needed . . . all that is needed is for
the other %o-signee to signN
a Ies, Iour Aonor.
CGBT
2To %ounsel3
0ro%eed.
$tty. Hon.ales
2to witness3
F =hy is it ne%essary for you to signN
a Be%ause /ost of the ti/e I a/ out in the
field in the afternoon, so, in order to
fa%ilitate the transa%tion I sign so if I a/
not around they %an issue the %he%'.Q
[*+]
0etitioner did not have any 'nowledge either of the
identity of the )ayee or the transa%tion whi%h gave rise
to the issuan%e of the %he%'s. It was her %o-signatory,
Teodulo $s)re%, who alone filled in the &lan's,
%o/)leted and issued the %he%'s. That 0etitioner Dina
Di/ Dao did not have any 'nowledge or %onne%tion with
the %he%'sM )ayee, $rteli7o 0ali7o, is %learly evident even
fro/ the latterMs testi/ony, vi1.1
($TTI. H!P$DES1
L =hen did you %o/e to 'now the a%%used
Dina Di/ DaoN
$ I %annot re/e/&er the e4a%t date
&e%ause in their offi%e Binondo, --
CGBT1 2&efore witness %ould finish3
L More or lessN
$ It /ust have &een late "@?,.
$TTI. H!P$DES1
L $nd that /ust or that was after the
transa%tions involving alleged %he%'s
/ar'ed in eviden%e as E4hi&its B and CN
$ $fter the transa%tions.
L $nd that was also &efore the transa%tion
involving that %onfir/ation of sale /ar'ed
in eviden%e as E4hi&it $N
$ It was also.
L $nd so you %a/e to 'now the a%%used
Dina Di/ Dao when all those transa%tions
were already %onsu//atedN
$ Ies, sir.
L $nd there has never &een any o%%asion
where you transa%ted with a%%used Dina
Di/ Dao, is that %orre%tN
$ !one, sir, there was no o%%asion.
L $nd your %o/ing to 'now Dina Di/ Dao the
a%%used in these %ases was &y %han%e
when you ha))ened to dro) &y in the
offi%e at Binondo of the 0re/ier ;inan%e
Cor)oration, is that what you /eanN
$ Ies, sir.
L Iou indi%ated to the Court that you were
introdu%ed to the a%%used Dina Di/ Dao,
is that %orre%tN
$ I was introdu%ed.
4 4 4 4 4
4 4 4 4
L $fter that )lain introdu%tion there was
nothing whi%h trans)ired &etween you
and the a%%used Dina Di/ DaoN
$ There was none.Q
[*"]
Sin%e 0etitioner Dina Di/ Dao signed the %he%'s
without 'nowledge of the insuffi%ien%y of funds,
'nowledge she was not e4)e%ted or o&liged to )ossess
under the organi.ational stru%ture of the %or)oration, she
/ay not &e held lia&le under B.0. **. ;or in the final
analysis, )enal statutes su%h as B.0. ** (/ust &e
%onstrued with su%h stri%tness as to %arefully safeguard
the rights of the defendant 4 4 4.Q
[**]
The ele/ent of
'nowledge of insuffi%ien%y of funds having &een )roven
to &e a&sent, )etitioner is therefore entitled to an
a%Fuittal.
This )osition finds su))ort in Dingle vs.
$ntermediate !ppellate Court
[*,]
where we stressed that
'nowledge of insuffi%ien%y of funds at the ti/e of the
issuan%e of the %he%' was an essential reFuisite for the
offense )enali.ed under B.0. **. In that %ase, the
s)ouses 0a. and !estor Cingle owned a fa/ily &usiness
'nown as (0MC Enter)rises.Q !estor transa%ted the
sale of 8++ tons of sili%a sand to the &uyer Ernesto $ng
who )aid for the sa/e. !estor failed to deliver. Thus,
he issued to Ernesto two %he%'s, signed &y hi/ and his
wife as authori.ed signatories for 0MC Enter)rises, to
re)resent the value of the undelivered sili%a
sand. These %he%'s were dishonored for having &een
(drawn against insuffi%ient funds.Q !estor thereafter
issued to Ernesto another %he%', signed &y hi/ and his
wife 0a., whi%h was li'ewise su&seFuently
dishonored. !o )ay/ent was ever /ade9 hen%e, the
s)ouses were %harged with a violation of B.0. ** &efore
the trial %ourt whi%h found the/ &oth guilty. 0a.
a))ealed the 7udg/ent to the then Inter/ediate
$))ellate Court whi%h /odified the sa/e &y redu%ing
the )enalty of i/)rison/ent to thirty days. !ot satisfied,
0a. filed an a))eal to this Court (insisting on her
inno%en%eQ and (%ontending that she did not in%ur any
%ri/inal lia&ility under B.0. ** &e%ause she had no
'nowledge of the dishonor of the %he%'s issued &y her
hus&and and, for that /atter, even the transa%tion of her
hus&and with $ng.Q The Court ruled in Dingle as follows1
(The Soli%itor Heneral in his
Me/orandu/ recommended that petitioner be ac-uitted
of the instant charge &e%ause fro/ the testi/ony of the
sole )rose%ution witness Ernesto $ng, it was esta&lished
that he dealt e4%lusively with !estor Cingle. !owhere in
his testi/ony is the na/e of 0a. Cingle ever /entioned
in %onne%tion with the transa%tion and with the issuan%e
of the %he%'. In fa%t, $ng %ategori%ally stated that it was
!estor Cingle who re%eived his two 2*3 letters of
de/and. This lends %reden%e to the testi/ony of 0a.
Cingle that she signed the Fuestioned %he%'s in &lan'
together with her hus&and without any 'nowledge of its
issuan%e, /u%h less of the transa%tion and the fa%t of
dishonor.
In the %ase of ;lorentino Do.ano vs. Aon. Martine.,
)ro/ulgated Ce%e/&er "?, "@?<, it was held that an
essential ele/ent of the offense is (no'ledge on the
)art of the /a'er or drawer of the %he%' of the
insuffi%ien%y of his funds.
=AEBE;BE, on reasona&le dou&t, the assailed
de%ision of the Inter/ediate $))ellate Court 2now the
Court of $))eals3 is here&y SET $SICE and a new one
is here&y rendered $CLGITTI!H )etitioner on
reasona&le dou&t.E
[*8]
In re7e%ting the defense of herein )etitioner and
ruling that 'nowledge of the insuffi%ien%y of funds is
legally )resu/ed fro/ the dishonor of the %he%'s for
insuffi%ien%y of funds, Bes)ondent Court of $))eals
%ited People vs. 2aggui
[*:]
and &ierras vs. Dacuycuy.
[*<]
These, however, are ina))li%a&le here. The a%%used
in &oth %ases issued )ersonal -- not %or)orate -- %he%'s
and did not aver la%' of 'nowledge of insuffi%ien%y of
funds or a&sen%e of )ersonal noti%e of the %he%'Ms
dishonor. ;urther/ore, in People vs. 2aggui
[*>]
the
Court ruled /ainly on the adeFua%y of an infor/ation
whi%h alleged la%' of 'nowledge of insuffi%ien%y of funds
at the ti/e the %he%' was issued and not at the ti/e of
its )resent/ent. n the other hand, the Court in &ierras
vs. Dacuycuy
[*?]
held /ainly that an a%%used /ay &e
%harged under B.0. ** and $rti%le ,": of the Bevised
0enal Code for the sa/e a%t of issuing a &oun%ing
%he%'.
The state/ent in the two %ases -- that /ere
issuan%e of a dishonored %he%' gives rise to the
)resu/)tion of 'nowledge on the )art of the drawer that
he issued the sa/e without funds -- does not su))ort the
C$ Ce%ision. $s o&served earlier, there is here only
a prima facie )resu/)tion whi%h does not )re%lude the
)resentation of %ontrary eviden%e. n the
%ontrary, People vs. 2aggui %learly s)ells out as an
ele/ent of the offense the fa%t that the drawer /ust
have 'nowledge of the insuffi%ien%y of funds in, or of
%redit with, the drawee &an' for the )ay/ent of the sa/e
in full on )resent/ent9 hen%e, it even su))orts the
)etitionerMs )osition.
)ac= of #de2uate otice of Dishonor
There is another eFually %ogent reason for the
a%Fuittal of the a%%used. There %an &e no prima
facie eviden%e of 'nowledge of insuffi%ien%y of funds in
the instant %ase &e%ause no noti%e of dishonor was
a%tually sent to or re%eived &y the )etitioner.
The noti%e of dishonor /ay &e sent &y the offended
)arty or the drawee &an'. The trial %ourt itself found
a&sent a )ersonal noti%e of dishonor to 0etitioner Dina
Di/ Dao &y the drawee &an' &ased on the unre&utted
testi/ony of %a/)o (2t3hat the %he%'s &oun%ed when
)resented with the drawee &an' &ut she did not infor/
any/ore the Binondo &ran%h and Dina Di/ Dao as there
was no need to infor/ the/ as the %or)oration was in
distress.Q
[*@]
The Court of $))eals affir/ed this fa%tual
finding. 0ursuant to )revailing 7uris)ruden%e, this finding
is &inding on this Court.
[,+]
Indeed, this fa%tual /atter is &orne &y the
re%ords. The re%ords show that the noti%e of dishonor
was addressed to 0re/iere ;inan%ing Cor)oration and
sent to its /ain offi%e in Cu&ao, Lue.on
City. ;urther/ore, the sa/e had not &een trans/itted
to 0re/iereMs Binondo ffi%e where )etitioner had &een
holding offi%e.
Di'ewise no noti%e of dishonor fro/ the offended
)arty was a%tually sent to or re%eived &y 0etitioner
Dao. Aer testi/ony on this )oint is as follows1
($tty. Hon.ales
F =ill you )lease tell us if ;ather $rtele7o
0ale7o 2si%3 ever notified you of the
&oun%ing of the %he%' or the two 2*3
%he%'s /ar'ed as E4hi&it XBM or XCM for the
)rose%utionN
=itness
a !o, sir.
F =hat do you /ean no, sirN
a I was never given a noti%e. I was never
given noti%e fro/ ;ather 0ale7o 2si%3.
CGBT
2to witness3
F !oti%e of whatN
a f the &oun%ing %he%', Iour Aonor.Q
[,"]
Be%ause no noti%e of dishonor was a%tually sent to
and re%eived &y the )etitioner, the prima
facie )resu/)tion that she 'new a&out the insuffi%ien%y
of funds %annot a))ly. Se%tion * of B.0. ** %learly
)rovides that this )resu/)tion arises not fro/ the /ere
fa%t of drawing, /a'ing and issuing a &u/ %he%'9 there
/ust also &e a showing that, within five &an'ing
days from receipt of the notice of dishonor, su%h /a'er
or drawer failed to )ay the holder of the %he%' the
a/ount due thereon or to /a'e arrange/ent for its
)ay/ent in full &y the drawee of su%h %he%'.
It has &een o&served that the State, under this
statute, a%tually offers the violator (a %o/)ro/ise &y
allowing hi/ to )erfor/ so/e a%t whi%h o)erates to
)ree/)t the %ri/inal a%tion, and if he o)ts to )erfor/ it
the a%tion is a&ated.Q This was also %o/)ared (to
%ertain laws
[,*]
allowing illegal )ossessors of firear/s a
%ertain )eriod of ti/e to surrender the illegally
)ossessed firear/s to the Hovern/ent, without in%urring
any %ri/inal lia&ility.Q
[,,]
In this light, the full )ay/ent of
the a/ount a))earing in the %he%' within five &an'ing
days fro/ noti%e of dishonor is a (%o/)lete
defense.Q
[,8]
The a&sen%e of a noti%e of dishonor
ne%essarily de)rives an a%%used an o))ortunity to
)re%lude a %ri/inal )rose%ution. $%%ordingly, )ro%edural
due )ro%ess %learly en7oins that a noti%e of dishonor &e
a%tually served on )etitioner. 0etitioner has a right to
de/and -- and the &asi% )ostulates of fairness reFuire --
that the noti%e of dishonor &e a%tually sent to and
re%eived &y her to afford her the o))ortunity to avert
)rose%ution under B.0. **.
In this light, the )ostulate of Bes)ondent Court of
$))eals that (2d3e/and on the Cor)oration %onstitutes
de/and on a))ellant 2herein )etitioner3,Q
[,:]
is
erroneous. 0re/iere has no o&ligation to forward the
noti%e addressed to it to the e/)loyee %on%erned,
es)e%ially &e%ause the %or)oration itself in%urs no
%ri/inal lia&ility under B.0. ** for the issuan%e of a
&oun%ing %he%'. Bes)onsi&ility under B.0. ** is )ersonal
to the a%%used9 hen%e, )ersonal 'nowledge of the noti%e
of dishonor is ne%essary. ConseFuently, %onstru%tive
noti%e to the %or)oration is not enough to satisfy due
)ro%ess. Moreover, it is )etitioner, as an offi%er of the
%or)oration, who is the latterMs agent for )ur)oses of
re%eiving noti%es and other do%u/ents, and not the
other way around. It is &ut a4io/ati% that noti%e to the
%or)oration, whi%h has a )ersonality distin%t and
se)arate fro/ the )etitioner, does not %onstitute noti%e to
the latter.
E-(Bo;5%
In granting this a))eal, the Court is not unaware of
B.0. **Ms intent to in%ul%ate )u&li% res)e%t for and trust in
%he%'s whi%h, although not legal tender, are dee/ed
%onvenient su&stitutes for %urren%y. B.0. ** was
intended &y the legislature to enhan%e %o//er%ial and
finan%ial transa%tions in the 0hili))ines &y )enali.ing
/a'ers and issuers of worthless %he%'s. The )u&li%
interest &ehind B.0. ** is thus %learly )al)a&le fro/ its
intended )ur)ose.
[,<]
$t the sa/e ti/e, this Court dee)ly %herishes and
is in fa%t &ound &y duty to )rote%t our )eo)leMs
%onstitutional rights to due )ro%ess and to &e )resu/ed
inno%ent until the %ontrary is )roven.
[,>]
These rights
/ust &e read into any inter)retation and a))li%ation of
B.0. **. 5erily, the )u&li% )oli%y to u)hold %ivil li&erties
e/&odied in the Bill of Bights ne%essarily outweighs the
)u&li% )oli%y to &uild %onfiden%e in the issuan%e of
%he%'s. The first is a &asi% hu/an right while the
se%ond is only )ro)rietary in nature.
[,?]
I/)ortant to
re/e/&er also is B.0. **Ms reFuire/ents that the %he%'
issuer /ust 'now (at the ti/e of issue that he does not
have suffi%ient funds in or %redit with the drawee &an'Q
and that he /ust re%eive (noti%e that su%h %he%' has not
&een )aid &y the drawee.Q Aen%e, B.0. ** /ust not &e
a))lied in a /anner whi%h %ontravenes an a%%usedMs
%onstitutional and statutory rights.
There is also a so%ial 7usti%e di/ension in this
%ase. Dina Di/ Dao is only a /inor e/)loyee who had
nothing to do with the issuan%e, funding and delivery of
%he%'s. =hy she was reFuired &y her e/)loyer to
%ountersign %he%'s es%a)es us. Aer signature is
%o/)letely unne%essary for it serves no fatho/a&le
)ur)ose at all in )rote%ting the e/)loyer fro/
unauthori.ed dis&urse/ents. Be%ause of the )enden%y
of this %ase, Dina Di/ Dao stood in 7eo)ardy -- for over a
de%ade -- of losing her li&erty and suffering the
wren%hing )ain and loneliness of i/)rison/ent, not to
/ention the stig/a of )rose%ution on her %areer and
fa/ily life as a young /other, as well as the e4)enses,
effort and a%hes in defending her inno%en%e. G)on the
other hand, the senior offi%ial -- Teodulo $s)re% -- who
a))ears res)onsi&le for the issuan%e, funding and
delivery of the worthless %he%'s has es%a)ed %ri/inal
)rose%ution si/)ly &e%ause he %ould not &e lo%ated &y
the authorities. The %ase against hi/ has &een ar%hived
while the aweso/e )rose%utory /ight of the govern/ent
and the 'nu%'led ire of the )rivate %o/)lainant were all
fo%used on )oor )etitioner. Thus, this Court e4horts the
)rose%utors and the )oli%e authorities %on%erned to e4ert
their &est to arrest and )rose%ute $s)re% so that 7usti%e
in its )ristine essen%e %an &e a%hieved in all fairness to
the %o/)lainant, ;r. $rteli7o 0ali7o, and the 0eo)le of the
0hili))ines. By this Ce%ision, the Court en7oins the
Se%retary of Justi%e and the Se%retary of Interior and
Do%al Hovern/ent to see that essential 7usti%e is done
and the real %ul)rit2s3 duly-)rose%uted and )unished.
WHEREFORE, the Fuestioned Ce%ision of the
Court of $))eals affir/ing that of the Begional Trial
Court, is here&y R)")RS)D and S)T
!S$D). 0etitioner Dina Di/ Dao is !C./$TT)D. The
Cler' of Court is here&y 0RD)R)D to furnish the
Se%retary of Justi%e and the Se%retary of Interior and
Do%al Hovern/ent with %o)ies of this Ce%ision. !o
%osts.
SO ORDERED.
3G.R. No@. 10+!*,"5,. 45)% *, !00+6
PEOPLE OF THE PHILIPPINES, appellee, vs. CORA
ABELLA O4EDA, appellant.
D E C I S I O N
CORONA, J.:
;or review is the de%ision
["]
dated June *", "@@" of
the Begional Trial Court of Manila, Bran%h ,?, the
dis)ositive )ortion of whi%h read1
=AEBE;BE, the Court finds a%%used Cora $&ella
7eda guilty &eyond reasona&le dou&t of the %ri/e of
Estafa as defined and )enali.ed under )aragra)h *2d3 of
$rti%le ,": of the Bevised 0enal Code, as a/ended &y
Be). $%t 8??:, in Cri/inal Case !o. ??-<<**? and
here&y senten%es her to suffer a )enalty of re%lusion
)er)etua, with the a%%essories )rovided &y law and with
%redit for )reventive i/)rison/ent undergone, if any, in
a%%ordan%e with $rti%le *@ of the Bevised 0enal Code as
a/ended, and to )ay %o/)lainant Bu&y Chua the
a/ount of Two Aundred Twenty Eight Thousand Three
Aundred Si4 20**?,,+<.++3 0esos with interests thereon
fro/ the ti/e of de/and until fully )aid.
Di'ewise, the Court also finds the said a%%used guilty for
5iolation of Batas 0a/&ansa Blg. ** in Cri/inal Cases
!os. ??-<<*,+, ??-<<*,*, ??-<<*,: to ??-<<*8+, ??-
<<*8*, ??-<<*8,, ??- <<*8: to ??-<<*8? 2"83 %ounts
and here&y senten%es her to suffer a )enalty of one year
of i/)rison/ent for ea%h %ount. n the other hand, the
other %harges do%'eted as Cri/inal Cases !os. ??-
<<**@, ??-<<*,", ??-<<*,,, ??-<<*,8, ??-<<*8" and
??-<<*88 are here&y dis/issed for insuffi%ien%y of
eviden%e.
Costs against a%%used in all instan%es.
[*]
$))ellant Cora $&ella 7eda was %harged in *"
se)arate Infor/ations for estafa in Cri/inal Case !o.
??-<<**? and for violation of Batas 0a/&ansa 2B03 **
in Cri/inal Case !os. ??-<<**@ to ??-<<*8?.
The Infor/ation %harging 7eda with estafa read1
That on or a&out the first wee' of !ove/&er, "@?,, in
the City of Manila, 0hili))ines, the said a%%used did then
and there willfully, unlawfully and feloniously defraud
BGBI CAG$ in the following /anner, to wit1 the said
a%%used, well 'nowing that she did not have suffi%ient
funds in the &an' and without infor/ing the said Bu&y
Chua of su%h fa%t drew, /ade out and issued to the
latter the following )ost-dated Bi.al Co//er%ial Ban'ing
Cor)oration %he%'s, to wit1
Che%'
!o. Cate $/ount
". +,,::+ !ov. :,
"@?, 0">,"++.++
*. +8">?* !ov. :,
"@?, :,,@*.,8
,. +8*@,: !ov. <,
"@?, ",?8+."@
8. +8">@@ !ov. @,
"@?, "",@:,.,?
:. +,,:,+ !ov. "+,
"@?, "@,8,>.,8
<. +8">"8 !ov. "+,
"@?, *<, ?@+.++
>. +8*@8* !ov. "+,
"@?, ",@8".:@
?. +8">?, !ov. "*,
"@?, :,,@*.,8
@. +8"?++ !ov. "8,
"@?, "",@:,.,@
"+. +8">?? !ov. ":,
"@?, ,,+?".@+
"". +,,:*@ !ov. ":,
"@?, "@,8,>.,8
"*. +8">?8 !ov. "?,
"@?, :,,@*.,8
",. +8*@+" !ov. "?,
"@?, "",@:,.,?
"8. +8*@+* !ov. *,,
"@?, "",@:,.,?
":. +8">?: !ov. *:,
"@?, :,,@*.,8
"<. +8*@+, !ov. *@,
"@?, "",@:,.,?
">. +,,:,* !ov. *@,
"@?, ",,<+,.**
"?. +8">?< !ov. ,+,
"@?, :,,@*.,8
"@. +8*@+: Ce%. ?,
"@?, "",@:,.,@
*+. +8,++8 Ce%. "+,
"@?, *,,?<.*:
*". +8*@+> Ce%. ":,
"@?, "",@:,.,?
**. +8*@+< Ce%. "?,
"@?, "",@:,.,@

0*
*?,
,+<
.<+
in )ay/ent of various fa&ri%s and te4tile /aterials all in
the total a/ount of 0**?,,+<.<+ whi%h the said a%%used
ordered or )ur%hased fro/ the said BGBI CAG$ on the
sa/e day9 that u)on )resentation of the said %he%'s to
the &an' for )ay/ent, the sa/e were dishonored and
)ay/ent thereof refused for the reason X$%%ount
ClosedM, and said a%%used, notwithstanding due noti%e to
her &y the said Bu&y Chua of su%h dishonor of the said
%he%'s, failed and refused and still fails and refuses to
de)osit the ne%essary a/ount to %over the a/ount of
the %he%'s to the da/age and )re7udi%e of the said
BGBI CAG$ in the aforesaid a/ount of 0**?,,+<.<+,
0hili))ine %urren%y.
Contrary to law.
The Infor/ations %harging 7eda for violation of B0
** were si/ilarly worded e4%e)t for the a/ounts of the
%he%'s, the %he%' nu/&ers and the dates of the %he%'s1
That on or a&out the first wee' of !ove/&er "@?,, in the
City of Manila, 0hili))ines, the said a%%used did then
and there wilfully, unlawfully and feloniously /a'e or
draw and issue to BGBI CAG$ to a))ly on a%%ount or
for value Bi.al Co//er%ial Ban'ing Cor). Che%' !o.
+8">?8 dated !ove/&er "?, "@?, )aya&le to Bu&y
Chua in the a/ount of 0:,,@*.,8, said a%%used well
'nowing that at the ti/e of issue he6she6they did not
have suffi%ient funds in or %redit with the drawee &an' or
)ay/ent of su%h %he%' in full u)on its )resent/ent,
whi%h %he%', when )resented for )ay/ent within ninety
2@+3 days fro/ the date thereof was su&seFuently
dishonored &y the drawee &an' for insuffi%ien%y of
funds, and des)ite re%ei)t of noti%e of su%h dishonor,
said a%%used failed to )ay said %o/)lainant the a/ount
of said %he%' or to /a'e arrange/ent for full )ay/ent of
the sa/e within five 2:3 &an'ing days after re%eiving said
noti%e.
Contrary to law.
The )ertinent fa%ts of the %ase follow.
$))ellant Cora $&ella 7eda used to &uy fa&ri%s
2telas3 fro/ %o/)lainant Bu&y Chua. ;or the three years
a))ro4i/ately she transa%ted &usiness with Chua,
a))ellant used )ostdated %he%'s to )ay for the fa&ri%s
she &ought. n !ove/&er :, "@?,, a))ellant )ur%hased
fro/ Chua various fa&ri%s and te4tile /aterials
worth 0**?,,+< for whi%h she issued ** )ostdated
%he%'s &earing different dates and a/ounts.
Chua later )resented to the &an' for )ay/ent %he%'
no. +,,::+ dated !ove/&er :, "@?, in the a/ount
of 0">,"++
[,]
&ut it was dishonored due to ($%%ount
Closed.Q
[8]
n $)ril "+, "@?8, Chua de)osited the rest of
the %he%'s &ut all were dishonored for the sa/e reason.
[:]
Ce/ands were allegedly /ade on the a))ellant to
/a'e good the dishonored %he%'s, to no avail.
Estafa and B0 ** %harges were thereafter filed
against a))ellant. The %ri/inal %ases were %onsolidated
and a))ellant, on arraign/ent, )leaded not guilty to
ea%h of the %harges.
n the whole, a))ellantMs defense was grounded on
good faith or a&sen%e of de%eit, la%' of noti%e of
dishonor and full )ay/ent of the total a/ount of the
%he%'s.
=ith the e4%e)tion of si4 %he%'s
[<]
whi%h did not
&ear her signature, a))ellant ad/itted that she issued
the )ostdated %he%'s whi%h were the su&7e%t of the
%ri/inal %ases against her. She, however, alleged that
she told Chua not to de)osit the )ostdated %he%'s on
/aturity as they were not yet suffi%iently funded.
$))ellant also %lai/ed that she /ade )artial )ay/ents
to Chua in the for/ of finished gar/ents worth 0:+,+++.
This was not re&utted &y the )rose%ution.
The trial %ourt %onvi%ted a))ellant of the %ri/e of
estafa as defined and )enali.ed under )aragra)h *2d3 of
$rti%le ,": of the Bevised 0enal Code 2B0C3, and
senten%ed her to reclusion perpetua. The trial %ourt also
%onvi%ted a))ellant of violation of B0 ** for issuing
&oun%ing %he%'s. Aowever, the %ourt a -uo held her
guilty of only "8 %ounts out of the ** &oun%ing %he%'s
issued. The %ourt reasoned1
444 This is due to the fa%t that of the ** %he%'s, two of
the/ are not %overed &y the indi%t/ent. This refers to
Che%' !o. +8*@,: dated !ove/&er <, "@?, in the
a/ount of 0",?8+."@ 2E4hi&it C3 and Che%' !o. +8*@8*
dated !ove/&er "+, "@?, in the a/ount of 0",@8".:@
2E4hi&it ;3. $nd of the total nu/&er of %he%'s, si4 of
the/ were not signed &y the a%%used &ut &y the latterMs
hus&and 2E4hi&its C,A,J,M,B and 3. The a%%used
should not &e lia&le for the issuan%e of the < %he%'s in
the a&sen%e of any showing of %ons)ira%y.
[>]
$))ellant a))ealed to this Court, see'ing
a%Fuittal. Aer %ounsel, however, failed to file the
a))ellantMs &rief within the )res%ri&ed )eriod. Aer a))eal
was thus dis/issed in a resolution of this Court dated
%to&er "8, "@@*.
[?]
In her /otion for re%onsideration, a))ellant as'ed
this Court to reverse its order of dis/issal in the interest
of su&stantial 7usti%e and eFuity.
[@]
=e initially found no
%o/)elling reason to grant her /otion and resolved to
deny with finality a))ellantMs MB in a resolution dated
;e&ruary ,, "@@,.
["+]
$))ellant thereafter filed a (Se%ond
and Grgent Motion for Be%onsideration,Q atta%hing
thereto an ($ffidavit of Cesistan%eQ of %o/)lainant Bu&y
Chua whi%h stated in )art1
444 444 444.
*. that the defendant Mrs. Cora 7eda has already fully
)aid her /onetary o&ligation to /e in the a/ount
of 0**?,,+<.++ whi%h is the su&7e%t of the
afore/entioned %ases9
444 444 444.
:. That as the )rivate %o/)lainant, I a/ now a))ealing
to the sense of %o/)assion and hu/anity of the good
7usti%es of the Su)re/e Court to re%onsider the a))eal
of Mrs. Cora 7eda and I sole/nly )ray that the %ri/inal
lia&ility &e e4tinguished with her %ivil lia&ility.
[""]
In a resolution dated Mar%h ">, "@@,,
["*]
this Court
denied the se%ond MB for having &een filed without
leave of %ourt. In the sa/e resolution, this Court ordered
the entry of 7udg/ent in due %ourse.
$))ellant thereafter filed another /otion dated $)ril
*", "@@,, )raying that she &e re%o//ended to then
0resident ;idel 5. Ba/os for e4e%utive %le/en%y. In
su))ort of su%h /otion, she on%e /ore atta%hed the
affidavit of desistan%e
[",]
of %o/)lainant Bu&y Chua
whi%h %ategori%ally de%lared that (the defendant, Ms.
Cora 7eda, 2had3 already fully )aid her /onetary
o&ligations to 2Chua3 in the a/ount of 0**?,,+< whi%h
2was3 the su&7e%t of the afore/entioned %ases.Q
["8]
In view of su%h s)e%ial %ir%u/stan%es, this Court
issued a resolution dated June @, "@@,
[":]
re%alling its
resolutions dated %to&er "8, "@@*, ;e&ruary ,, "@@,
and Mar%h ">, "@@, for hu/anitarian reasons and in the
interest of 7usti%e, and in order that this Court /ay
resolve a))ellantMs a))eal on the /erits.
["<]
Aen%e, the instant a))eal with the following
assign/ents of error1
I.
TAE D=EB CGBT EBBEC I! ;I!CI!H TA$T
CECEIT =$S EM0DIEC BI $CCGSEC $00EDD$!T
=AE! SAE ISSGEC TAE CAECWS T TAE 0BI5$TE
CM0D$I!$!T.
II.
TAE D=EB CGBT EBBEC I! !T ;I!CI!H TA$T
TAE ISSG$!CE BI TAE $CCGSEC-$00EDD$!T ;
TAE CAECWS T TAE 0BI5$TE CM0D$I!$!T =$S
MEBEDI $ MCE ; 0$IME!T =AICA
$BB$!HEME!T A$C BEE! TAEIB 0B$CTICE ;B
TABEE 2,3 IE$BS.
III.
TAE D=EB CGBT EBBEC I! !T ;I!CI!H TA$T
HC ;$ITA IS $ 5$DIC CE;E!SE $H$I!ST EST$;$
BI 0STC$TI!H $ CAECW
IV.
TAE D=EB CGBT EBBEC I! C!5ICTI!H TAE
$CCGSEC ; ;GBTEE! 2"83 CG!TS ; B.0. **
=AE! TAEBE =$S ! 0B; ; !TICE ;
CISA!B T TAE $CCGSEC.
V.
TAE D=EB CGBT EBBEC I! !T ;I!CI!H TA$T
SI!CE ", ; TAE "8 CAECWS =EBE CE0SITEC
!DI $;TEB TAE D$0SE ; TAE @+ C$I 0EBIC,
AE!CE, TAE 0BIM$ ;$CIE 0BESGM0TI! ;
W!=DECHE CES !T $00DI.
[">]
$))ellant fir/ly denies any %ri/inal lia&ility for
estafa. She argues there was no de%eit e/)loyed when
she issued the %he%'s &e%ause she never assured Chua
that the %he%'s were funded. Chua allegedly 'new all
along that the %he%'s were /erely intended to guarantee
future )ay/ent &y a))ellant.
$))ellant further %lai/s good faith in all her
transa%tions with Chua for three years. She e4)lained
that her failure to fund the %he%'s was &rought a&out &y
the %olla)se of the %ountryMs e%ono/y in the wa'e of the
$Fuino assassination in "@?,. The %a)ital flight and
finan%ial %haos at that ti/e %aused her own &usiness to
shut down when her %usto/ers also failed to )ay her.
Ces)ite the %losure of her &usiness, a))ellant /aintains
that she did her &est to %ontinue )aying Chua what she
owed and, when she %ould no longer )ay in %ash, she
instead )aid in 'ind in the for/ of finished goods. But
these were not enough to %over her
de&ts. !evertheless, she s)ared no effort in %o/)lying
with her finan%ial o&ligations to Chua until she was
gradually a&le to )ay all her de&ts, a fa%t fully ad/itted
as true &y %o/)lainant in her affidavit.
;ro/ the foregoing, a))ellant %ontends that the
ele/ent of de%eit thru a&use of %onfiden%e or false
)retenses was not )resent. Thus, her guilt was not
esta&lished with satisfa%tory )roof. $))ellant asserts that
good faith on her )art was a valid defense to re&ut
the prima facie )resu/)tion of de%eit when she issued
the %he%'s that su&seFuently &oun%ed.
;urther/ore, out of the "8 %he%'s %ited in the
de%ision of the trial %ourt, only one %he%' was de)osited
within @+ days fro/ due date. This was %he%' no.
+,,::+ dated !ove/&er :, "@?,. The rest of the %he%'s
were de)osited only on $)ril "+, "@?8 or /ore than @+
days fro/ the date of the last %he%'.
["?]
$))ellant also denies she re%eived any noti%e of
dishonor of the %he%'s, %ontrary to the findings of the
trial %ourt. She was not even aware that %ases had
already &een filed against her for violation of B0
**. Sin%e there was allegedly no )roof of noti%e
["@]
of the
dishonor of the %he%'s, a))ellant %lai/s that she %annot
&e %onvi%ted of violation of B0 **.
n the other hand, the Soli%itor Heneral %ontends
that a))ellant was %ri/inally lia&le for issuing worthless
%he%'s. Co/)lainant Chua a%%e)ted the )ostdated
%he%'s as )ay/ent &e%ause of a))ellantMs good %redit
standing. She was %onfident that a))ellantMs %he%'s
were good %he%'s. Thus, no assuran%es fro/ a))ellant
that the %he%'s were suffi%iently funded were needed for
Chua to )art with her goods. $nd when the %he%'s later
&oun%ed, a))ellant &etrayed the %onfiden%e re)osed in
her &y Chua.
The Soli%itor Heneral also argues that there was
a simultaneous e4%hange of te4tile /aterials and %he%'s
&etween %o/)lainant and a))ellant. Co/)lainant Chua
would not have )arted with her telas had she 'nown that
a))ellantMs %he%'s would not %lear. $))ellant o&tained
so/ething in e4%hange for her worthless %he%'s. =hen
she issued the/, she 'new she had no funds to &a%' u)
those %he%'s &e%ause her a%%ount had already &een
%losed. Iet, she did not infor/ Chua that the %he%'s
%ould not &e %ashed u)on /aturity. She thus de%eived
Chua into )arting with her goods and the de%eit
e/)loyed %onstituted estafa.
=e grant the a))eal.
DECEIT AND DAMAGE AS
ELEMENTS OF ESTAFA
Gnder )aragra)h * 2d3 of $rti%le ,": of the B0C, as
a/ended &y B$ 8??:,
[*+]
the ele/ents of estafa are1 2"3
a %he%' is )ostdated or issued in )ay/ent of an
o&ligation %ontra%ted at the ti/e it is issued9 2*3 la%' or
insuffi%ien%y of funds to %over the %he%'9 2,3 da/age to
the )ayee thereof. Ce%eit and da/age are essential
ele/ents of the offense and /ust &e esta&lished &y
satisfa%tory )roof to warrant %onvi%tion.
[*"]
Thus, the
drawer of the dishonored %he%' is given three days fro/
re%ei)t of the noti%e of dishonor to %over the a/ount of
the %he%'. therwise a prima facie )resu/)tion of de%eit
arises.
The )rose%ution failed to )rove de%eit in this
%ase. The prima facie )resu/)tion of de%eit was
su%%essfully re&utted &y a))ellantMs eviden%e of good
faith, a defense in estafa &y )ostdating a %he%'.
[**]
Hood
faith /ay &e de/onstrated, for instan%e, &y a de&torMs
offer to arrange a )ay/ent s%he/e with his %reditor. In
this %ase, the de&tor not only /ade arrange/ents for
)ay/ent9 as %o/)lainant herself %ategori%ally stated, the
de&tor-a))ellant fully )aid the entire a/ount of the
dishonored %he%'s.
It /ust &e noted that our Bevised 0enal Code was
ena%ted to )enali.e unlawful a%ts a%%o/)anied &y evil
intent deno/inated as %ri/es mala in se. The )rin%i)al
%onsideration is the e4isten%e of /ali%ious intent. There
is a %on%urren%e of freedo/, intelligen%e and intent
whi%h together /a'e u) the (%ri/inal /indQ &ehind the
(%ri/inal a%t.Q Thus, to %onstitute a %ri/e, the a%t /ust,
generally and in /ost %ases, &e a%%o/)anied &y a
%ri/inal intent. !ctus non facit reum+ nisi mens sit
rea. !o %ri/e is %o//itted if the /ind of the )erson
)erfor/ing the a%t %o/)lained of is inno%ent. $s we held
in Tabuena vs . Sandiganbayan1
[*,]
The rule was reiterated in People v. Pacana, although
this %ase involved falsifi%ation of )u&li% do%u/ents and
estafa1
(rdinarily, evil intent /ust unite with an unlawful a%t for
there to &e a %ri/e. !ctus non facit reum+ nisi mens sit
rea. There %an &e no %ri/e when the %ri/inal /ind is
wanting.Q
$/eri%an 7uris)ruden%e e%hoes the sa/e )rin%i)le. It
adheres to the view that %ri/inal intent in e/&e..le/ent
is not &ased on te%hni%al /ista'es as to the legal effe%t
of a transa%tion honestly entered into, and there %an &e
no e/&e..le/ent if the /ind of the )erson doing the a%t
is inno%ent or if there is no wrongful )ur)ose.
The a%%used /ay thus )rove that he a%ted in good
faith and that he had no intention to %onvert the /oney
or goods for his )ersonal &enefit.
[*8]
=e are %onvin%ed
that a))ellant was a&le to )rove the a&sen%e of %ri/inal
intent in her transa%tions with Chua. Aad her intention
&een tainted with /ali%e and de%eit, a))ellant would not
have e4erted e4traordinary effort to )ay the %o/)lainant,
given her own &usiness and finan%ial reverses.
LACK OF NOTICE OF DISHONOR
=e also note that the )rose%ution )resented
virtually no eviden%e to show that the indis)ensa&le
noti%e of dishonor was sent to and re%eived &y
a))ellant. E4%er)ts fro/ the following testi/ony of
%o/)lainant are signifi%ant1
$TTI. $!HEDES1
L !ow, Mrs. =itness, when these %he%'s
fro/ E4hi&its X$M to X5M have &oun%ed,
what ste)s, did you doN
$ I %onsulted /y lawyer and she wrote a
Ce/and Detter.
CGBT1
L =hat is the na/e of that lawyerN
$ $tty. 5irginia !a&ora.
$TTI. $!HEDES1
L !ow, you /entioned a Ce/and Detter sent
&y $tty. 5irginia !a&or, I a/ showing to
you this Ce/and Detter dated Mar%h "<,
"@??, will you 'indly e4a/ine the sa/e if
this is the sa/e Ce/and Detter you
/entioned a while agoN
$ Ies, sir.
L !ow, on this se%ond )age of this Ce/and
Detter there is a signature a&ove the
)rinted na/e 5irginia Huevarra !a&or, do
you 'now the signature, Mrs. =itnessN
$ Ies, that is the signature of /y lawyer.
$TTI. $!HEDES1
May we reFuest that this Ce/and Detter
dated Mar%h "<, "@?? %onsisting of two
2*3 )ages, Iour Aonor, &e /ar'ed as
E4hi&it X=M and that the signature on the
se%ond )age of this letter of 5irginia
Huevarra !a&or &e en%ir%led and &e
/ar'ed as E4hi&it X=-"M and that the
atta%hed Begistry Be%ei)t, Iour Aonor, &e
/ar'ed as E4hi&it X=-*M.
CGBT1
Mar' the/.
$TTI. $!HEDES1
L !ow, Mrs. =itness, why do you 'now that
this is the signature of 5irginia Huevarra
!a&orN
$ $fter )re)aring that I saw her sign the
letter.
L !ow, after sending this Ce/and Detter, do
you 'now If the a%%used herein /ade
)ay/ents or re)la%ed the %he%'s that
were issued to youN
CGBT1
L f %ourse, you assu/ed that the a%%used
re%eived that letter, that is his &asis on the
)re/ise that the a%%used re%eived that
letterN
$TTI. $!HEDES1
$ Ies, Iour Aonor.
CGBT1
L =hat )roof is there to show that a%%used
re%eived the letter &e%ause your Fuestion
is )re/ises 2sic3 on the assu/)tion that
the a%%used re%eived the letterN
$TTI. $!HEDES1
L !ow, do you 'now Mrs. =itness if the
a%%used re%eived the letterN
$ There is a registry re%ei)t.
CGBT1
L !ow, later on after sending that letter, did
you have %o//uni%ation with the
a%%usedN
$ I 'e)t on %alling her &ut I was not a&le to
get in tou%h with her.
L But do you 'now if that letter of your
lawyer was re%eived &y the a%%usedN
$ I was not infor/ed &y /y lawyer &ut I
)resu/ed that the sa/e was already
re%eived &y the a%%used.
$TTI. $!HEDES1
L !ow, aside fro/ sending this Ce/and
Detter, do you 'now what your lawyer didN
$ =e filed a %ase with the ;is%alMs.
[*:]
$side fro/ the a&ove testi/ony, no other referen%e
to the de/and letter was /ade &y the )rose%ution. The
)rose%ution %lai/ed that the de/and letter was sent &y
registered /ail. To )rove this, it )resented a %o)y of the
de/and letter as well as the registry return re%ei)t
&earing a signature whi%h was, however, not even
authenti%ated or identified. $ registry re%ei)t alone is
insuffi%ient as )roof of /ailing.
[*<]
(Be%ei)ts for registered
letters and return re%ei)ts do not )rove the/selves9 they
/ust &e )ro)erly authenti%ated in order to serve as )roof
of re%ei)t of the letters.Q
[*>]
It is %lear fro/ the foregoing that %o/)lainant
/erely )resu/ed that a))ellant re%eived the de/and
letter )re)ared and sent &y her lawyer. She was not
%ertain if a))ellant indeed re%eived the noti%e of
dishonor of the %he%'s. $ll she 'new was that a de/and
letter was sent &y her lawyer to the a))ellant. In fa%t,
right after %o/)lainant /ade that )resu/)tion, her
lawyer filed the %ri/inal %ases against a))ellant at the
;is%alMs offi%e
[*?]
without any %onfir/ation that the
de/and letter su))osedly sent through registered /ail
was a%tually re%eived &y a))ellant.
=ith the evident la%' of noti%e of dishonor of the
%he%'s, a))ellant %annot &e held guilty of violation of B0
**. The la%' of su%h noti%e violated a))ellantMs right to
)ro%edural due )ro%ess. (It is a general rule that when
servi%e of noti%e is an issue, the )erson alleging that the
noti%e was served /ust )rove the fa%t of servi%e.Q
[*@]
The
&urden of )roving re%ei)t of noti%e rests u)on the )arty
asserting it and the Fuantu/ of )roof reFuired for
%onvi%tion in this %ri/inal %ase is )roof &eyond
reasona&le dou&t.
=hen, during the trial, a))ellant denied having
re%eived the de/and letter, it &e%a/e in%u/&ent u)on
the )rose%ution to )rove that the de/and letter was
indeed sent through registered /ail and that the sa/e
was re%eived &y a))ellant. But it did not. &viously, it
relied /erely on the wea'ness of the eviden%e of the
defense.
This Court therefore %annot, with /oral %ertainty,
%onvi%t a))ellant of violation of B0 **. The evident
failure of the )rose%ution to esta&lish that she was given
the reFuisite noti%e of dishonor 7ustifies her a%Fuittal.
[,+]
$s held in Dao vs. Court of $))eals1
[,"]

(It has &een o&served that the State, under this statute,
a%tually offers the violator Xa %o/)ro/ise &y allowing
hi/ to )erfor/ so/e a%t whi%h o)erates to )ree/)t the
%ri/inal a%tion, and if he o)ts to )erfor/ it the a%tion is
a&ated.M This was also %o/)ared Xto %ertain laws
allowing illegal )ossessors of firear/s a %ertain )eriod of
ti/e to surrender the illegally )ossessed firear/s to the
Hovern/ent, without in%urring any %ri/inal lia&ility.M In
this light, the full )ay/ent of the a/ount a))earing in the
%he%' within five &an'ing days fro/ noti%e of dishonor is
a X%o/)lete defense.M The a&sen%e of a noti%e of
dishonor ne%essarily de)rives an a%%used an o))ortunity
to )re%lude a %ri/inal )rose%ution. $%%ordingly,
)ro%edural due )ro%ess %learly en7oins that a noti%e of
dishonor &e a%tually served on )etitioner. 0etitioner has
a right to de/and # and the &asi% )ostulates of fairness
reFuire -- that the noti%e of dishonor &e a%tually sent to
and re%eived &y her to afford her the o))ortunity to avert
)rose%ution under B.0. **.
Stated otherwise, res)onsi&ility under B0 ** was
)ersonal to a))ellant9 hen%e, )ersonal 'nowledge of the
noti%e of dishonor was ne%essary. ConseFuently, while
there /ay have &een %onstru%tive noti%e to a))ellant
regarding the insuffi%ien%y of her funds in the &an', it
was not enough to satisfy the reFuire/ents of )ro%edural
due )ro%ess.
;inally, it is worth /entioning that noti%e of dishonor
is reFuired under &oth )ar. *2d3 $rt. ,": of the B0C and
Se%. * of B0 **. =hile the B0C )res%ri&es that the
drawer of the %he%' /ust de)osit the a/ount needed to
%over his %he%' within three days fro/ re%ei)t of noti%e
of dishonor, B0 **, on the other hand, reFuires the
/a'er or drawer to )ay the a/ount of the %he%'
withinfive days fro/ re%ei)t of noti%e of dishonor. Gnder
&oth laws, noti%e of dishonor is ne%essary for
)rose%ution 2for estafa and violation of B0 **3. =ithout
)roof of noti%e of dishonor, 'nowledge of insuffi%ien%y of
funds %annot &e )resu/ed and no %ri/e 2whether estafa
or violation of B0 **3 %an &e dee/ed to e4ist.
WHEREFORE, the de%ision of the trial %ourt is
here&y BE5EBSEC and SET $SICE. $))ellant Cora
$&ella 7eda is $CLGITTEC in Cri/inal Case !o. ??-
<<**? for estafa and in Cri/inal Case !os. ??-<<*,+,
??-<<*,*, ??-<<*,: to ??-<<*8+, ??-<<*8*, ??-<<*8,,
??-<<*8: to ??-<<*8? for violation of B0 **.
SO ORDERED.
3G.R. No. 1*1$1+. No:%./%0 1, 1##,6
EDUARDO R. VACA 1)2 FERNANDO
NIETO, petitioners, vs. COURT OF APPEALS
1)2 '8% PEOPLE OF THE
PHILIPPINES, respondents.
D E C I S I O N
MENDOZA, J.7
0etitioners see' a review of the de%ision, dated
%to&er *:, "@@<,
["]
and the resolution, dated Ce%e/&er
*, "@@>,
[*]
of the Court of $))eals, affir/ing their
%onvi%tion &y the Begional Trial Court of Lue.on City
2Bran%h "++3 for violation of B.0. Blg. **, otherwise
'nown as the (Boun%ing Che%'s Daw.Q
The fa%ts are as follows1
0etitioner Eduardo B. 5a%a is the )resident and
owner of Ervine International, In%. 2Ervine3, whi%h is
engaged in the /anufa%ture and sale of refrigeration
eFui)/ent, while his son-in-law, )etitioner
;ernando !ieto, is the fir/Ms )ur%hasing /anager. n
Mar%h "+, "@??, )etitioners issued a %he%'
for 0"+,+++.++ to the Heneral $gen%y for
Be%onnaissan%e, Cete%tion, and Se%urity, In%. 2H$BCS3
in )artial )ay/ent of the se%urity servi%es rendered &y
H$BCS to Ervine. The %he%' was drawn on the China
Ban'ing Cor)oration 2CBC3. =hen de)osited in the
0hili))ine Co//er%ial International Ban' 20CIBan'3
&ran%h at Shaw Boulevard, Mandaluyong, the %he%' was
dishonored for insuffi%ien%y of funds.
n Mar%h *@, "@??, H$BCS wrote Ervine a letter in
whi%h it de/anded )ay/ent in %ash of the a/ount of the
%he%' within seven days fro/ noti%e. The letter was
re%eived &y Ervine on the sa/e day, &ut )etitioners did
not )ay within the ti/e given.
n $)ril ",, "@??, )etitioners issued a %he%'
for 0"@,?<+."< to H$BCS. The %he%' was drawn on the
$sso%iated Ban'. The vou%her a%%o/)anying it stated
that the %he%' was to re)la%e the dishonored %he%',
the0@,?<+."< &alan%e &eing )artial )ay/ent for ErvineMs
outstanding a%%ount. The %he%' and the vou%her were
re%eived &y a H$BCS /essenger, !olan C. 0ena, on
$)ril ":, "@??, &ut H$BCS did not return the dishonored
%he%'.
n $)ril "8, "@??, H$BCS )erations Manager
Jovito C. Ca&usara filed a %ri/inal %o/)laint against
)etitioners for violation of B.0. Blg. **. $fter )reli/inary
investigation, an infor/ation was filed in the Begional
Trial Court of Lue.on City 2Bran%h @>3. Aowever, the
%ase was dis/issed &y the %ourt on May "", "@?@, u)on
/otion of the )rose%ution, on the ground that Ervine had
already )aid the a/ount of the %he%'.
n Se)te/&er "?, "@?@, H$BCS, through its $%ting
)erations Manager Eduardo B. $lindaya, filed another
%o/)laint for violation of B.0. Blg. ** against )etitioners.
This resulted in the filing of an infor/ation against
)etitioners in the Begional Trial Court of Lue.on City
2Bran%h "++3. $fter trial, )etitioners were found guilty of
the %harge and ea%h was senten%ed to suffer one 2"3
year i/)rison/ent and to )ay a fine of0"+,+++.++ and
the %osts.
n a))eal, the Court of $))eals affir/ed the
de%ision. It su&seFuently denied )etitionersM /otion for
re%onsideration. Aen%e, this )etition. 0etitioners
%ontend1
$. Bes)ondent Court gravely erred in not
holding that the )rose%ution failed to )rove
)etitionersM guilt &eyond reasona&le dou&t.
B. Bes)ondent Court gravely erred in &asing
%onvi%tion on the alleged wea'ness of the
eviden%e of the defense rather than on the
strength of the eviden%e of the )rose%ution.
C. Bes)ondent Court erred in not a%Fuitting
)etitioners on grounds of (/ista'e of fa%tQ
and (la%' of 'nowledge.Q
0etitioners )ray that the %ase against the/ &e
dis/issed or, in the alternative, that the de%ision of the
trial %ourt &e /odified &y senten%ing ea%h to an
in%reased fine &ut without i/)rison/ent.
By su))le/ental )etition, dated January *@, "@@?,
)etitioners su&/itted an affidavit of desistan%e e4e%uted
&y H$BCS )resident Co/inador B. Santiago
whi%h states that the %ase arose fro/ a /ere
(a%%ounting differen%eQ &etween )etitioners and
H$BCS, that the latter had not really suffered any
da/age as a result of the issuan%e of the %he%' in
Fuestion and, that H$BCS was no longer interested in
)rose%uting the %ase.
n May *?, "@@?, )etitioners filed another
su))le/ental )etition, this ti/e invo'ing the re%ent
de%ision in 2ao v. Court of !ppeals,
[,]
in whi%h this Court
reversed a %onvi%tion for violation of B.0. Blg. ** u)on a
showing that the a%%used had no 'nowledge of the
insuffi%ien%y of funds.
The Soli%itor Heneral o))oses the a))eal. Ae
%ontends that the fa%ts of 2ao v. Court of !ppeals are
different fro/ those of the %ase at &ar and that the
affidavit of desistan%e of Co/inador Santiago is of no
/o/ent, su%h affidavit having &een /ade only after
)etitionersM %onvi%tion.
$fter due review of the de%ision in this %ase, we find
that )etitionersM %onvi%tion for violation of B.0. Blg. ** is
well founded.
4irst. The ele/ents of the offense )enali.ed under
B.0. Blg. ** are1 2"3 /a'ing, drawing, and issuan%e of
any %he%' to a))ly to a%%ount or for value9 2*3
'nowledge of the /a'er, drawer, or issuer that at the
ti/e of issue he does not have suffi%ient funds in or
%redit with the drawee &an' for the )ay/ent of the %he%'
in full u)on its )resent/ent9 and 2,3 su&seFuent
dishonor of the %he%' &y the drawee &an' for
insuffi%ien%y of funds or %redit, or dishonor of the %he%'
for the sa/e reason had not the drawer, without any
valid %ause, ordered the &an' to sto) )ay/ent.
[8]
The
/a'erMs 'nowledge is )resu/ed fro/ the dishonor of the
%he%' for insuffi%ien%y of funds.
[:]
Thus, Y* of B.0. Blg.
** e4)ressly )rovides1
SECTI! *. )vidence of (no'ledge of insufficient
funds. - The /a'ing, drawing and issuan%e of a %he%'
)ay/ent of whi%h is refused &y the drawee &e%ause of
insuffi%ient funds in or %redit with su%h &an', when
)resented within ninety 2@+3 days fro/ the date of the
%he%', shall &e prima facie eviden%e of 'nowledge of
su%h insuffi%ien%y of funds or %redit unless su%h /a'er
or drawer )ays the holder thereof the a/ount due
thereon, or /a'es arrange/ents for )ay/ent in full &y
the drawee of su%h %he%' within five 2:3 &an'ing days
after re%eiving noti%e that su%h %he%' has not &een )aid
&y the drawee.
In this %ase, after &eing notified on Mar%h *@, "@??
of the dishonor of their )revious %he%', )etitioners gave
H$BCS a %he%' for 0"@,?<+."<. They %lai/ that this
%he%' had &een intended &y the/ to re)la%e the &ad
%he%' they had )reviously issued to the H$BCS. Based
on the testi/ony of a H$BCS a%%ountant, however, the
Court of $))eals found that the %he%' was
a%tually )ay/ent for two &ills, one for the )eriod of
January "< to January ,", "@?? in the a/ount
of 0@,@,+.+? and another one for the )eriod of Mar%h
"< to Mar%h ,", "@?? in the sa/e a/ount.
But even if su%h %he%' was intended to
re)la%e the &ad one, its issuan%e on $)ril ",,
"@?? Z ": days after )etitioners had &een
notified on Mar%h *@, "@?? of the dishonor of their
)revious %he%' Z %annot negate the )resu/)tion that
)etitioners 'new of the insuffi%ien%y of funds to %over the
a/ount of their )revious %he%'. Se%. * of B.0. Blg. **
reFuires that su%h %he%' &e given within five 2:3 days
fro/ the noti%e of dishonor to the/.
0etitioners %ontend that, in a%%ordan%e with the
ruling in 2ao v. Court of !ppeals,
[<]
they should &e
a%Fuitted &e%ause the )re)aration of %he%'s is the
res)onsi&ility of the %o/)any a%%ountant and all they do
is sign the %he%'s. They %lai/ that they rely on the
word of the a%%ountant that there are suffi%ient funds in
the &an' to )ay for the %he%'s.
In the 2ao %ase, the a%%used, as the Court found,
had /erely &een /ade &y her e/)loyer, 0re/iere
Invest/ent Aouse, to %ountersign %he%'s in &lan'. The
a%%used was a /ere e/)loyee who did not have
anything to do with the issuan%e of %he%'s for the
%o/)any. She did not 'now to who/ the %he%'s would
&e )aid as the na/es of )ayees were written only later
&y the head of o)erations. Moreover, no noti%e of
dishonor was given to her as reFuired &y B.0. Blg. **,
Y*. It %ould thus rightly &e %on%luded that the a%%used
issued %he%'s to a))ly to a%%ount not 'nowing that at
the ti/e of issuan%e funds were insuffi%ient to )ay for the
%he%'s.
0etitioners in this %ase %annot )retend ignoran%e of
the insuffi%ien%y of funds. =hile it /ay &e true that it was
the %o/)anyMs a%%ountant who a%tually )re)ared the
ru&&er %he%', the fa%t re/ains that )etitioners are the
owners and offi%ers of the %o/)any. Se%. " of B.0. Blg.
** )rovides that (=here the %he%' is drawn &y a
%or)oration, %o/)any, or entity, the )erson or )ersons
who a%tually signed the %he%' in &ehalf of su%h drawer
shall &e lia&le under this $%t.Q
In fa%t, )etitioner !ieto testified that after the %he%'
in Fuestion was dishonored, he instru%ted their %o/)any
a%%ountant to )re)are a re)la%e/ent %he%'.
[>]
This
&elies )etitionersM %lai/ that they had no hand in the
)re)aration of %he%'s
[?]
and shows that )etitioners were
in %ontrol of the finan%es of the %o/)any.
Second. The affidavit of desistan%e of the H$BCS
)resident deserves no /ore than )assing /ention. The
%lai/ that this %ase was si/)ly the result of a
/isunderstanding &etween H$BCS and )etitioners and
that the for/er did not really suffer any da/age fro/ the
dishonor of the %he%' is fli/sy. $fter )rose%uting the
%ase &elow with tena%ity, %o/)lainants going so far as to
file another %o/)laint after their first one had &een
dis/issed, it is trifling with this Court for %o/)lainants to
now assert that the filing of their %ase was si/)ly a
/ista'e. It is for reasons su%h as this that affidavits of
desistan%e, li'e retra%tions, are generally disfavored.
[@]
The affidavit in this %ase, whi%h was /ade after
)etitionersM %onvi%tion, is nothing &ut a last-/inute
atte/)t to save the/ fro/ )unish/ent. Even if the
)ayee suffered no da/age as a result of the issuan%e of
the &oun%ing %he%', the da/age to the integrity of the
&an'ing syste/ %annot &e denied. Ca/age to the
)ayee is not an ele/ent of the %ri/e )unished in B.0.
Blg. **.
Third. 0etitioners )ray that, in the alternative, the
)enalty &e /odified &y deleting the senten%e of
i/)rison/ent and, in lieu thereof, a fine in an in%reased
a/ount &e i/)osed on the/. In su))ort of their )lea,
they allege that they do not have any re%ord of )rior
%onvi%tion9 that Eduardo 5a%a is of advan%ed age 2late
<+s39 and, that they %o/e fro/ good
fa/ilies. 0etitioners %lai/ that (with their fa/ily
&a%'ground and so%ial standing there is no reason why
they will refuse to )ay a due and de/anda&le de&t of
only 0"+,+++.++. It is )re%isely &e%ause of their founded
&elief that the su&7e%t o&ligation has &een )aid that they
refused to &e inti/idated &y a %ri/inal %harge.Q
The Court of $))eals dis/issed these allegations
as irrelevant to the Fuestion of )etitionersM guilt. =e thin'
so ourselves. Aowever, we &elieve that they %an &e
%onsidered in deter/ining the a))ro)riate )enalty to
i/)ose on )etitioners.
B.0. Blg. **, Y", )ar. " )rovides a )enalty of
(i/)rison/ent of not less than thirty days &ut not /ore
than one 2"3 year or &y a fine of not less than, &ut not
/ore than dou&le, the a/ount of the %he%' whi%h fine
shall in no %ase e4%eed two hundred thousand )esos, or
&oth su%h fine and i/)rison/ent at the dis%retion of the
Court.Q 0etitioners are first-ti/e offenders. They are
;ili)ino entre)reneurs who )resu/a&ly %ontri&ute to the
national e%ono/y. $))arently, they &rought this a))eal,
&elieving in all good faith, although /ista'enly, that they
had not %o//itted a violation of B.0. Blg. **. therwise,
they %ould si/)ly have a%%e)ted the 7udg/ent of the trial
%ourt and a))lied for )ro&ation to evade a )rison ter/. It
would &est serve the ends of %ri/inal 7usti%e if in fi4ing
the )enalty within the range of dis%retion allowed &y Y",
)ar. ", the sa/e )hiloso)hy underlying the Indeter/inate
Senten%e Daw is o&served, na/ely, that of redee/ing
valua&le hu/an /aterial and )reventing unne%essary
de)rivation of )ersonal li&erty and e%ono/i% usefulness
with due regard to the )rote%tion of the so%ial order.
["+]
In
this %ase we &elieve that a fine in an a/ount eFual to
dou&le the a/ount of the %he%' involved is an
a))ro)riate )enalty to i/)ose on ea%h of the )etitioners.
WHEREFORE, the de%ision of the Court of $))eals
is $;;IBMEC with the /odifi%ation that the senten%e of
i/)rison/ent is deleted and )etitioners are ea%h
ordered to )ay a fine of 0*+,+++.++ eFuivalent to dou&le
the a/ount of the %he%'.
SO ORDERED.
G.R. No. #5#+. O&'o/%0 #, 1##$6
VICENTE VILLLAFLOR, @5/@'('5'%2 /> 8(@
8%(0@, petitioner, vs. COURT OF APPEALS
1)2 NASIPIT LUMBER CO.,
INC., respondents.
D E C I S I O N
PANGANIBAN ,J.7
In this rather fa%tually %o/)li%ated %ase, the Court
reiterates the &inding for%e and effe%t of findings of
s)e%iali.ed ad/inistrative agen%ies as well as those of
trial %ourts when affir/ed &y the Court of $))eals9
re7e%ts )etitionerMs theory of si/ulation of %ontra%ts9 and
)asses u)on the Fualifi%ations of )rivate res)ondent
%or)oration to a%Fuire dis)osa&le )u&li% agri%ultural
lands )rior to the effe%tivity of the "@>, Constitution.
T8% C1@%
Before us is a )etition for review
on certiorari see'ing the reversal of the Ce%ision
["]
of the
Court of $))eals, dated Se)te/&er *>, "@@+, in C.$.
H.B. C5 !o. +@+<*, affir/ing the dis/issal &y the trial
%ourt of 0etitioner 5i%ente 5illaflorMs %o/)laint against
0rivate Bes)ondent !asi)it Du/&er Co., In%. The
dis)osition of &oth the trial and the a))ellate %ourts are
Fuoted in the state/ent of fa%ts &elow.
T8% F1&'@
The fa%ts of this %ase, as narrated in detail &y
Bes)ondent Court of $))eals, are as follows1
[*]
(The eviden%e, testi/onial and do%u/entary, )resented
during the trial show that on January "<, "@8+, Cirilo
0ien%enaves, in a Ceed of $&solute Sale 2e4h. $3, sold
to [)etitioner], a )ar%el of agri%ultural land %ontaining an
area of :+ he%tares,
[,]
/ore or less, and )arti%ularly
des%ri&ed and &ounded as follows1
X$ %ertain )ar%el of agri%ultural land )lanted to a&a%a
with visi&le %on%rete /onu/ents /ar'ing the &oundaries
and &ounded on the !BTA &y 0u&li% Dand now 0rivate
Ceeds on the East &y Serafin 5illaflor, on the SGTA &y
0u&li% Dand9 and on the =est &y land %lai/ed &y A.
0atete, %ontaining an area of <+ he%tares /ore or less,
now under Ta4 Ce%. *@8:" in the 2si%3 of said 5i%ente
5illaflor, the whole )ar%el of whi%h this )arti%ular )ar%el
is only a )art, is assessed at 0**,::+.++ under the
a&ove said Ta4 Ce%. !u/&er.M
This deed states1
XThat the a&ove des%ri&ed land was sold to the said
5ICE!TE 5IDD$;DB, 444 on June **, "@,>, &ut no
for/al do%u/ent was then e4e%uted, and sin%e then
until the )resent ti/e, the said 5i%ente 5illaflor has &een
in )ossession and o%%u)ation of 2the sa/e39 2and3
That the a&ove des%ri&ed )ro)erty was &efore the sale,
of /y e4%lusive )ro)erty having inherited fro/ /y long
dead )arents and /y ownershi) to it and that of /y [si%]
lasted for /ore than fifty 2:+3 years, )ossessing and
o%%u)ying sa/e )ea%efully, )u&li%ly and %ontinuously
without interru)tion for that length of ti/e.M
$lso on January "<, "@8+, Claudio tero, in a Ceed of
$&solute Sale 2e4h. C3 sold to 5illaflor a )ar%el of
agri%ultural land, %ontaining an area of *8 he%tares,
/ore or less, and )arti%ularly des%ri&ed and &ounded as
follows1
X$ %ertain land )lanted to %orn with visi&le %on%rete
/easure/ents /ar'ing the &oundaries and &ounded on
the !orth &y 0u&li% Dand and Tungao Cree'9 on the East
&y $gusan Biver9 on the South &y Serafin 5illaflor and
Cirilo 0ien%enaves9 and on the =est &y land of ;er/in
Ba%o&o %ontaining an area of *8 he%tares /ore or less,
under Ta4 Ce%laration !o. *@8:" in the na/e already of
5i%ente 5illaflor, the whole )ar%el of whi%h this )arti%ular
land is only a )art, is assessed at 0**,::+.++ under the
a&ove said Ta4 Ce%laration !o. *@8:".M
This deed states1
XThat the a&ove des%ri&ed land was sold to the said
5ICE!TE 5IDD$;DB, 444 on June **, "@,>, &ut no
sound do%u/ent was then e4e%uted, however sin%e then
and until the )resent ti/e, the said 5i%ente 5illaflor has
&een in o)en and %ontinuous )ossession and o%%u)ation
of said land9 2and3
That the a&ove des%ri&ed land was &efore the sale, /y
own e4%lusive )ro)erty, &eing inherited fro/ /y
de%eased )arents, and /y ownershi) to it and that of /y
)rede%essors lasted /ore than fifty 2:+3 years,
)ossessing and o%%u)ying the sa/e, )ea%efully, o)enly
and %ontinuously without interru)tion for that length of
ti/e.M
Di'ewise on January "<, "@8+, Aer/ogenes 0atete, in a
Ceed of $&solute Sale 2e4h. C3, sold to 5illaflor, a )ar%el
of agri%ultural land, %ontaining an area of *+ he%tares,
/ore or less, and )arti%ularly des%ri&ed and &ounded as
follows1
X$ %ertain )ar%el of agri%ultural land )lanted to a&a%a and
%orn with visi&le %on%rete /onu/ents /ar'ing the
&oundaries and &ounded on the !orth &y 0u&li% Dand
area-)rivate Boad9 on the East &y land %lai/ed &y Cirilo
0ien%enaves9 on the South &y 0u&li% Dand %ontaining an
area of *+ he%tares /ore or less, now under Ta4
Ce%laration !o. *@8:" in the na/e of 5i%ente 5illaflor
the whole )ar%el of whi%h this )arti%ular )ar%el, is
assessed at 0**,::+.++ for )ur)oses of ta4ation under
the a&ove said Ta4 Ce%laration !o. *@8:".M
This deed states1
X444 23n June **, "@,> &ut the for/al do%u/ent was
then e4e%uted, and sin%e then until the )resent ti/e, the
said 5ICE!TE 5IDD$;DB has &een in %ontinuous and
o)en )ossession and o%%u)ation of the sa/e9 2and3
That the a&ove des%ri&ed )ro)erty was &efore the sale,
/y own and e4%lusive )ro)erty, &eing inherited fro/ /y
de%eased )arents and /y ownershi) to it and that of /y
)rede%essors lasted /ore than fifty 2:+3 years,
)ossessing and o%%u)ying sa/e, )ea%efully, o)enly and
%ontinuously without interru)tion for that length of ti/e.M
n ;e&ruary ":, "@8+, ;er/in Bo%o&o, in a Ceed of
$&solute Sale 2e4h. B3, sold to 5illaflor, a )ar%el of
agri%ultural land, %ontaining an area of "? he%tares,
/ore or less, and )arti%ularly des%ri&ed and &ounded as
follows1
X$ %ertain )ar%el of agri%ultural land )lanted with a&a%a
with visi&le )art /ar'ing the %orners and &ounded on the
!orth &y the %orners and &ounded on the !orth &y
0u&li% Dand9 on the East &y Cirilo 0ien%enaves9 on the
South &y Aer/ogenes 0atete and =est &y 0u&li%
Dand, %ontaining an area of "? he%tares /ore or less
now under Ta4 Ce%laration !o. *@8:" in the na/e of
5i%ente 5illaflor. The whole )ar%el of whi%h this
)arti%ular )ar%el is only a )art is assessed
as 0**,::+.++ for )ur)oses of ta4ation under the a&ove
said Ta4 Ce%laration !u/&er 2Ceed of $&solute Sale
e4e%uted &y ;er/in Bo%o&o date ;e&. ":, "@8+3. This
do%u/ent was annotated in Begistry of Ceeds on
;e&ruary "<, "@8+3.M
This deed states1
XThat the a&ove des%ri&ed )ro)erty was &efore the sale
of /y own e4%lusive )ro)erty, &eing inherited fro/ /y
de%eased )arents, and /y ownershi) to it and that of /y
)rede%essors lasted /ore than fifty 2:+3 years,
)ossessing and o%%u)ying the sa/e )ea%efully, o)enly
and %ontinuously without interru)tion for that length of
ti/e.M
n !ove/&er ?, "@8<, 5illaflor, in a Dease $gree/ent
2e4h. L3,
[8]
leased to !asi)it Du/&er Co., In%. a )ar%el of
land, %ontaining an area of two 2*3 he%tares, together
with all the i/)rove/ents e4isting thereon, for a )eriod
of five 2:3 years fro/ June ", "@8< at a rental of 0*++.++
)er annu/ Xto %over the annual rental of house and
&uilding sites for thirty three 2,,3 houses or
&uildings.M This agree/ent also )rovides1
[:]
X,. Curing the ter/ of this lease, the Dessee is
authori.ed and e/)owered to &uild and %onstru%t
additional houses in addition to the ,, houses or
&uildings /entioned in the ne4t )re%eding )aragra)h,
)rovided however, that for every additional house or
&uilding %onstru%ted the Dessee shall )ay unto the
Dessor an a/ount of fifty %entavos 2[:+3 )er /onth for
every house or &uilding. The Dessee is e/)owered and
authori.ed &y the Dessor to su&lot 2si%3 the )re/ises
here&y leased or assign the sa/e or any )ortion of the
land here&y leased to any )erson, fir/ and %or)oration9
2and3
8. The Dessee is here&y authori.ed to /a'e any
%onstru%tion and6or i/)rove/ent on the )re/ises
here&y leased as he /ay dee/ ne%essary and )ro)er
thereon, )rovided however, that any and all su%h
i/)rove/ents shall &e%o/e the )ro)erty of the Dessor
u)on the ter/ination of this lease without o&ligation on
the )art of the latter to rei/&urse the Dessee for
e4)enses in%urred in the %onstru%tion of the sa/e.M
5illaflor %lai/ed having dis%overed that after the
e4e%ution of the lease agree/ent, that !asi)it Du/&er
Xin &ad faith 4 4 4 surre)titiously gra&&ed and o%%u)ied a
&ig )ortion of )laintiffMs )ro)erty 4 4 4M9 that after a
%onfrontation with the %or)orateMs 2si%3 field /anager, the
latter, in a letter dated Ce%e/&er ,, "@>, 2e4h. B3,
[<]
stated re%alling having X/ade so/e sort of agree/ent
for the o%%u)an%y 2of the )ro)erty at $%a%ia, San
Mateo3, &ut I no longer re%all the details and I had
forgotten whether or not we did o%%u)y your land. But if,
as you say, we did o%%u)y it, then 2he is 3 sure that the
%o/)any is o&ligated to )ay the rental.M
n July >, "@8?, in an X$gree/ent to SellM 2e4h. *3,
5illaflor %onveyed to !asi)it Du/&er, two 2*3 )ar%els of
land 444 des%ri&ed as follows1
[>]
X0$BCED !E
Bounded on the !orth &y 0u&li% Dand and Tungao
Cree'9 on the East &y $gusan Biver and Serafin 5illaflor9
on the South &y 0u&li% Dand, on the =est &y 0u&li%
Dand. I/)rove/ents thereon %onsist of a&a%a, fruit
trees, %o%onuts and thirty houses of /i4ed /aterials
&elonging to the !asi)it Du/&er Co/)any. Civided into
Dot !os. :8"*, :8",, :8??, :8@+, :8@", :8@*, :?:+,
:?8@, :?<+, :?::, :?:", :?:8, :?::, :?:@, :?:?, :?:>,
:?:,, and :?:*. Boundaries of this )ar%el of land are
/ar'ed &y %on%rete /onu/ents of the Bureau of
Dands. Containing an area of ""*,+++
he%tares. $ssessed at 0">,"<+.++ a%%ording to Ta4
Ce%laration !o. 5-,": dated $)ril "8, "@8<.
0$BCED T=
Bounded on the !orth &y 0agudasan Cree'9 on the East
&y $gusan Biver9 on the South &y Tungao Cree'9 on the
=est &y 0u&li% Dand. Containing an area of 8?,+++
he%tares /ore or less. Civided into Dot !os. :8"", :8"+,
:8+@, and :,@@. I/)rove/ents "++ %o%onut trees,
)rodu%tive, and ,++ %a%ao trees. Boundaries of said
land are /ar'ed &y %on%rete /onu/ents of the Bureau
)f 2si%3 Dands. $ssessed value -- 0<,*@+.++ a%%ording
to Ta4 !o. ,">, $)ril "8, "@8<.M
This $gree/ent to Sell )rovides1
X,. That &eginning today, the 0arty of the Se%ond
0art shall %ontinue to o%%u)y the )ro)erty not any/ore
in %on%e)t of lessee &ut as )ros)e%tive owners, it &eing
the sense of the )arties hereto that the 0arty of the
Se%ond 0art shall not in any /anner &e under any
o&ligation to /a'e any %o/)ensation to the 0arty of the
;irst 0art, for the use, and o%%u)ation of the )ro)erty
herein &efore des%ri&ed in su%h %on%e)t of )ros)e%tive
owner, and it li'ewise &eing the sense of the )arties
hereto to ter/inate as they do here&y ter/inate,
effe%tive on the date of this )resent instru/ent, the
Contra%t of Dease, otherwise 'nown as Co%. !o. 8*+,
0age !o. ,<, Boo' !o. II, Series of "@8< of !otary
0u&li% Ha&riel B. Banaag, of the 0rovin%e of $gusan.
8. That the 0arty of the Se%ond 0art has &ound
as it does here&y &ind itself, its e4e%utors and
ad/inistrators, to )ay unto the )arty of the ;irst 0art the
su/ of ;ive Thousand 0esos 20:,+++.++3, 0hili))ine
Curren%y, u)on )resentation &y the latter to the for/er of
satisfa%tory eviden%e that1
2a3 The Bureau of Dands will not have any o&7e%tion to
the o&tain/ent &y the 0arty of the ;irst 0art of a
Certifi%ate of Torrens Title in his favor, either thru
ordinary land registration )ro%eedings or thru
ad/inistrative /eans )ro%edure.
2&3 That there is no other )rivate %lai/ant to the
)ro)erties herein&efore des%ri&ed.
:. That the 0arty of the ;irst 0art has &ound as
he does here&y &ind to underta'e i//ediately after the
e4e%ution of these )resents to se%ure and o&tain, or
%ause to &e se%ured and o&tained, a Certifi%ate of
Torrens Title in his favor over the )ro)erties des%ri&ed on
0age 2ne3 hereof, and after o&tain/ent of su%h
Certifi%ate of Torrens Title, the said 0arty of the ;irst 0art
shall e4e%ute a 2C3eed of $&solute Sale unto and in
favor of the 0arty of the Se%ond 0art, its e4e%utors,
ad/inistrators and assigns, it &eing the sense of the
)arties that the 0arty of the Se%ond 0art u)on delivery to
it of su%h deed of a&solute sale, shall )ay unto the 0arty
of the ;irst 0art in %ash, the su/ of Twelve Thousand
20"*,+++.++3 0esos in 0hili))ine Curren%y, )rovided,
however, that the 0arty of the ;irst 0art, shall &e
rei/&ursed &y the 0arty of the Se%ond 0art with one half
of the e4)enses in%urred &y the 0arty of the ;irst 0art for
survey and attorneyMs fees9 and other in%idental
e4)enses not e4%eeding 0,++.++.M
n Ce%e/&er *, "@8?, 5illaflor filed Sales $))li%ation
!o. 5-?+>
[?]
2e4h. "3 with the Bureau of Dands, Manila,
Xto )ur%hase under the )rovisions of Cha)ter 5, OI or IO
of Co//onwealth $%t. !o. "8" 2The 0u&li% Dands $%t3,
as a/ended, the tra%t of )u&li% lands 4 4 4 and
des%ri&ed as follows1 X!orth &y 0u&li% Dand9 East &y
$gusan Biver and Serafin 5illaflor9 South &y 0u&li% Dand
and =est &y )u&li% land 2Dot !os. :,>@, :8?@, :8"*,
:8@+, :8@", :8@*, :?8@, :?:+, :?:", :8",, :8??, :8?@,
:?:*, :?:,, :?:8, :?::, :?:<, :?:>, :?:?, :?:@ and
:?<+ 4 4 4 %ontaining an area of "8+ he%tares
444.M 0aragra)h < of the $))li%ation, states1 XI
understand that this a))li%ation %onveys no right to
o%%u)y the land )rior to its a))roval, and I re%ogni.ed
2si%3 that the land %overed &y the sa/e is of )u&li%
do/ain and any and all rights I /ay have with res)e%t
thereto &y virtue of %ontinuous o%%u)ation and %ultivation
are here&y relinFuished to the Hovern/ent.M
[@]
2e4h. "-C3
n Ce%e/&er >, "@8?, 5illaflor and !asi)it Du/&er
e4e%uted an X$gree/entM 2e4h ,3.
["+]
This %ontra%t
)rovides1
X". That the ;irst 0arty is the )ossessor sin%e
"@,+ of two 2*3 )ar%els of land situated in sitio Tungao,
Barrio of San Mateo, Muni%i)ality of Butuan, 0rovin%e of
$gusan9
*. That the first )ar%el of land a&ove/entioned
and des%ri&ed in 0lan 0DS-@> filed in the offi%e of the
Bureau of Dands is /ade u) of Dots !os. :8"*, :8",,
:8??, :8@+, :8@", :8@*, :?8@, :?:+, :?:", :?:*, :?:,,
:?:8, :?::, :?:<, :?:>, :?:?, :?:@ and :?<+ and the
se%ond )ar%el of land is /ade of Dots !os. :,@@, :8+@,
:8"+ and :8""9
,. That on July >, "@8?, a %ontra%t of $gree/ent
to Sell was e4e%uted &etween the %ontra%ting )arties
herein, %overing the said two )ar%els of land, %o)y of
said $gree/ent to Sell is hereto atta%hed /ar'ed as
$nne4 ($Q and /ade an integral )art of this
do%u/ent. The )arties hereto agree that the said
$gree/ent to Sell &e /aintained in full for%e and effe%t
with all its ter/s and %onditions of this )resent
agree/ent and in no way &e %onsidered as /odified.
8. That )aragra)h 8 of the Contra%t of $gree/ent
to Sell, /ar'ed as anne4, ($Q sti)ulates as follows1
X0ar. 8. That the 0arty of the Se%ond 0art has &ound
as it does here&y &ind itself, its e4e%utors and
ad/inistrators, to )ay unto the 0arty of the ;irst 0art of
the su/ of ;I5E TAGS$!C 0ESS
20:,+++.++3 0hili))ine Curren%y, u)on )resentation &y
the latter to the for/er of satisfa%tory eviden%e that1
a3 The Bureau of Dands will have any o&7e%tion to the
o&tain/ent &y 0arty of the ;irst 0art of a favor, either
thru ordinary land registration )ro%eedings or thru
ad/inistrative /eans and )ro%edure.
&3 That there is no other )rivate %lai/ant to the
)ro)erties hereina&ove des%ri&ed.M
That the ;irst 0arty has on Ce%e/&er *, "@8?, su&/itted
to the Bureau of Dands, a Sales $))li%ation for the
twenty-two 2**3 lots %o/)rising the two a&ove/entioned
)ar%els of land, the said Sales $))li%ation was
registered in the said Bureau under !o. 5-?+>9
<. That in re)ly to the reFuest /ade &y the ;irst
0arty to the Bureau of Dands, in %onne%tion with the
Sales $))li%ation !o. 5-?+>, the latter infor/ed the
for/er that a%tion on his reFuest will &e e4)edited, as
)er letter of the Chief, 0u&li% Dand Civision, dated
Ce%e/&er *, "@8?, %o)y of whi%h is hereto atta%hed
/ar'ed as anne4 XBM and /ade an integral )art of this
agree/ent1
>. That for and in %onsideration of the )re/ises
a&ove stated and the a/ount of T=E!TI ;GB
TAGS$!C 20*8,+++.++3 0ESS that the Se%ond
0arty shall )ay to the ;irst 0arty, &y these )resents, the
;irst 0arty here&y sells, transfers and %onveys unto the
Se%ond 0arty, its su%%essors and assigns, his right,
interest and )arti%i)ation under an2d3 &y virtue of the
Sales $))li%ation !o. 5-?+>, whi%h he has or /ay have
in the lots /entioned in said Sales $))li%ation !o. 5-
?+>9
?. That the a/ount of T=E!TI ;GB
TAGS$!C 20*8,+++.++3 0ESS, shall &e )aid &y the
Se%ond 0arty to the ;irst 0arty, as follows1
a3 The a/ount of SE5E! TAGS$!C 20>,+++.++3
0ESS, has already &een )aid &y the Se%ond 0arty to
the ;irst 0arty u)on the e4e%ution of the $gree/ent to
Sell, on July >, "@8?9
&3 The a/ount of ;I5E TAGS$!C 20:,+++.++3
0ESS shall &e )aid u)on the signing of this )resent
agree/ent9 and
%3 The &alan%e of T=ED5E TAGS$!C 20"*,+++.++3
0ESS, shall &e )aid u)on the e4e%ution &y the ;irst
0arty of the $&solute Ceed of Sale of the two )ar%els of
land in Fuestion in favor of the Se%ond 0arty, and u)on
delivery to the Se%ond 0arty of the Certifi%ate of
wnershi) of the said two )ar%els of land.
@. It is s)e%ially understood that the /ortgage
%onstituted &y the ;irst 0arty in favor of the Se%ond
0arty, as stated in the said %ontra%t of $gree/ent to Sell
dated July >, "@8?, shall %over not only the a/ount of
SE5E! TAGS$!C 20>,+++.++3 0ESS as s)e%ified in
said do%u/ent, &ut shall also %over the a/ount of ;I5E
TAGS$!C 20:,+++.++3 0ESS to &e )aid as
sti)ulated in )aragra)h ?, su&-)aragra)h 2&3 of this
)resent agree/ent, if the ;irst 0arty should fail to
%o/)ly with the o&ligations as )rovided for in
)aragra)hs *, 8, and : of the $gree/ent to Sell9
"+. It is further agreed that the ;irst 0arty o&ligates
hi/self to sign, e4e%ute and deliver to and in favor of the
Se%ond 0arty, its su%%essors and assigns, at anyti/e
u)on de/and &y the Se%ond 0arty su%h other
instru/ents as /ay &e ne%essary in order to give full
effe%t to this )resent agree/ent9M
In the Be)ort dated Ce%e/&er ,", "@8@ &y the )u&li%
land ins)e%tor, Cistri%t Dand ffi%e, Bureau of Dands, in
Butuan, the re)ort %ontains an Indorse/ent of the
aforesaid Cistri%t Dand ffi%er re%o//ending re7e%tion
of the Sales $))li%ation of 5illaflor for having leased the
)ro)erty to another even &efore he had a%Fuired
trans/issi&le rights thereto.
In a letter of 5illaflor dated January *,, "@:+, addressed
to the Bureau of Dands, he infor/ed the Bureau Cire%tor
that he was already o%%u)ying the )ro)erty when the
BureauMs $gusan Biver 5alley Su&division 0ro7e%t was
inaugurated, that the )ro)erty was for/erly %lai/ed as
)rivate )ro)erties 2si%3, and that therefore, the )ro)erty
was segregated or e4%luded fro/ dis)osition &e%ause of
the %lai/ of )rivate ownershi). In a letter of !asi)it
Du/&er dated ;e&ruary **, "@:+ 2e4h. O3
[""]
addressed
to the Cire%tor of Dands, the %or)oration infor/ed the
Bureau that it re%ogni.ed 5illaflor as the real owner,
%lai/ant and o%%u)ant of the land9 that sin%e June "@8<,
5illaflor leased two 2*3 he%tares inside the land to the
%o/)any9 that it has no other interest on the land9 and
that the Sales $))li%ation of 5illaflor should &e given
favora&le %onsideration.
444 44
4 44
4
n July *8, "@:+, the s%heduled date of au%tion of the
)ro)erty %overed &y the Sales $))li%ation, !asi)it
Du/&er offered the highest &id of 08".++ )er he%tare,
&ut sin%e an a))li%ant under C$ "8", is allowed to eFual
the &id of the highest &idder, 5illaflor tendered an eFual
&id, de)osited the eFuivalent of "+R of the &id )ri%e and
then )aid the assess/ent in full.
444 44
4 44
4
n $ugust "<, "@:+, 5illaflor e4e%uted a do%u/ent,
deno/inated as a XCeed of BelinFuish/ent of BightsM
2e4h. !3,
["*]
)ertinent )ortion of whi%h reads1
X:. That in view of /y )resent &usiness in Manila, and
/y %hange in residen%e fro/ Butuan, $gusan to the City
of Manila, I %annot, therefore, develo)e 2si%3 or %ultivate
the land a))lied for as )ro7e%ted &efore9
<. That the !asi)it Du/&er Co/)any, In%., a %or)oration
duly organi.ed 444 is very /u%h interested in a%Fuiring
the land %overed &y the afore%ited a))li%ation 4449
>. That I &elieve the said %o/)any is Fualified to a%Fuire
)u&li% land, and has the /eans to develo) 2si%3 the
a&ove-/entioned land9
444 44
4 44
4
=AEBE;BE, and in %onsideration of the a/ount of
;I5E TAGS$!C 0ESS 20:,+++.++3 to &e rei/&ursed
to /e &y the afore/entioned !asi)it Du/&er Co/)any,
In%., after its re%ei)t of the order of award, the said
a/ount re)resenting )art of the )ur%hase )ri%e of the
land aforesaid, the value of the i/)rove/ents I
introdu%ed thereon, and the e4)enses in%urred in the
)u&li%ation of the !oti%e of Sale, I, the a))li%ant, 5i%ente
J. 5illaflor, here&y voluntarily renoun%e and relinFuish
whatever rights to, and interests I have in the land
%overed &y /y a&ove-/entioned a))li%ation in favor of
the !asi)it Du/&er Co/)any, In%.M
$lso on $ugust "<, "@:+, !asi)it Du/&er filed a Sales
$))li%ation over the two 2*3 )ar%els of land, %overing an
area of "8+ he%tares, /ore or less. This a))li%ation was
also nu/&ered 5-?+> 2e4h. I3.
n $ugust ">, "@:+ the Cire%tor of Dands issued an
Xrder of $wardM
[",]
in favor of !asi)it Du/&er Co/)any,
In%., )ertinent )ortion of whi%h reads1
X8. That at the au%tion sale of the land held on July *8,
"@:+ the highest &id re%eived was that of !asi)it Du/&er
Co/)any, In%. whi%h offered 08".++ )er he%tare
or 0:,>8+.++ for the whole tra%t, whi%h &id was eFualed
&y a))li%ant 5i%ente J. 5illaflor, who de)osited the
a/ount of 0:>8.++ under ffi%ial Be%ei)t !o. B-
",>,?*< dated July *8, "@:+ whi%h is eFuivalent to "+R
of the &id. Su&seFuently, the said 444 5illaflor )aid the
a/ount of 0:,"<+.++ in full )ay/ent of the )ur%hase
)ri%e of the a&ove-/entioned land and for so/e reasons
stated in an instru/ent of relinFuish/ent dated $ugust
"<, "@:+, he 25i%ente J. 5illaflor3 relinFuished his rights
to and interest in the said land in favor of the !asi)it
Du/&er Co/)any, In%. who filed the %orres)onding
a))li%ation therefore.
In view of the foregoing, and it a))earing that the
)ro%eedings had 444 were in a%%ordan%e with law and in
[si%] e4isting regulations, the land %overed there&y is
here&y awarded to !asi)it Du/&er Co/)any, In%.
at 08".++ )er he%tare or 0:,>8+.++ for the whole tra%t.
This a))li%ation should &e entered in the re%ord of this
ffi%e as Sales Entry !o. 5-8+>.M
It is 5illaflorMs %lai/ that he only learned of the rder of
$ward on January "<, "@>8, or after his arrival to the
0hili))ines, %o/ing fro/ Indonesia, where he stayed for
/ore than ten 2"+3 years9 that he went to Butuan City in
the latter )art of "@>, u)on the %all of his &rother Serafin
5illaflor, who was then si%' and learned that !asi)it
Du/&er 2had3 failed and refused to )ay the agreed
rentals, although his &rother was a&le to %olle%t during
the early years9 and that Serafin died three days after his
25i%enteMs3 arrival, and so no a%%ounting of the rentals
%ould &e /ade9 that on !ove/&er *>, "@>,, 5illaflor
wrote a letter to Mr. H.E.C. Mears of !asi)it Du/&er,
re/inding hi/ of their ver&al agree/ent in "@:: 444 that
Mr. Mears in a Be)ly dated Ce%e/&er ,, "@>,, a))ears
to have referred the /atter to Mr. !oriega, the %or)orate
general /anager, &ut the new set of %or)orate offi%ers
refused to re%ogni.e 25illaflorMs3 %lai/, for Mr. ;loren%io
Ta/esis, the general /anager of !asi)it Du/&er, in a
letter dated ;e&ruary "@, "@>8, denied 5illaflorMs
ite/i.ed %lai/ dated January :, "@>8 2e4h. 53 to &e
without valid and legal &asis. In that :th January, "@>8
letter, 5illaflor %lai/ed the total a/ount of 08*>,+++.++ 4
4 4.
In a for/al )rotest dated January ,", "@>8
["8]
whi%h
5illaflor filed with the Bureau of Dands, he )rotested the
Sales $))li%ation of !asi)it Du/&er, %lai/ing that the
%o/)any has not )aid hi/ 0:,+++.++ as )rovided in the
Ceed of BelinFuish/ent of Bights dated $ugust "<,
"@:+.
444 44
4 44
4
4 4 4 2T3hat in a Ce%ision dated $ugust ?, "@>> 2e4h. ?3,
the Cire%tor of Dands found that the )ay/ent of the
a/ount of 0:,+++.++ in the Ceed 444 and the
%onsideration in the $gree/ent to Sell were duly )roven,
and ordered the dis/issal of 5illaflorMs )rotest and gave
due %ourse to the Sales $))li%ation of !asi)it
Du/&er. 0ertinent )ortion of the Ce%ision )enned &y
Cire%tor of Dands, Ba/on Casanova, in the Matter of S0
!o. 5-?+> 2C-5-8+>3 444 reads1
X444 44
4 44
4
Curing the )ro%eedings, 5illaflor )resented another %lai/
entirely different fro/ his )revious %lai/ -- this ti/e, for
re%overy of rentals in arrears arising fro/ a su))osed
%ontra%t of lease &y 5illaflor as lessor in favor of !asi)it
as lessee, and inde/nity for da/ages su))osedly
%aused i/)rove/ents on his other )ro)erty 444 in the
staggering a/ount of Seventeen Million
20">,+++,+++.++3 0esos. Earlier, he had also de/anded
fro/ !$SI0IT 444 208*>,+++.++3 444 also as inde/nity
for da/ages to i/)rove/ents su))osedly %aused &y
!$SI0IT on his other real )ro)erty as well as for
rei/&urse/ent of realty ta4es allegedly )aid &y hi/
thereon.
444 44
4 44
4
It would see/ that 444 5illaflor has sought to in7e%t so
/any %ollaterals, if not e4traneous %lai/s, into this
%ase. It is the %onsidered o)inion of this ffi%e that any
%lai/ not within the s)here or s%o)e of its ad7udi%atory
authority as an ad/inistrative as well as Fuasi-7udi%ial
&ody or any issue whi%h see's to delve into the /erits of
in%idents %learly outside of the ad/inistrative
%o/)eten%e of this ffi%e to de%ide /ay not &e
entertained.
There is no /erit in the %ontention of 5illaflor that owing
to !asi)itMs failure to )ay the a/ount of 444 20:,+++.++3
444 2assu/ing that !asi)it had failed3 the deed of
relinFuish/ent &e%a/e null and void for la%' of
%onsideration. 4444.
444 44
4 44
4
4 4 4 The re%ords %learly show, however, that sin%e the
e4e%ution of the deed of relinFuish/ent 444 5illaflor has
always %onsidered and re%ogni.ed !$SI0IT as having
the 7uridi%al )ersonality to a%Fuire )u&li% lands for
agri%ultural )ur)oses. 4444.
444 44
4 44
4
Even this ffi%e had not failed to re%ogni.e the 7uridi%al
)ersonality of !$SI0IT to a))ly for the )ur%hase of
)u&li% lands 444 when it awarded to it the land so
relinFuished &y 5illaflor 2rder of $ward dated $ugust
">, "@:+3 and a%%e)ted its a))li%ation therefor. $t any
rate, the Fuestion whether an a))li%ant is Fualified to
a))ly for the a%Fuisition of )u&li% lands is a /atter
&etween the a))li%ant and this ffi%e to de%ide and
whi%h a third )arty li'e 5illaflor has no )ersonality to
Fuestion &eyond /erely %alling the attention of this
ffi%e thereto.
444 44
4 44
4
5illaflor offered no eviden%e to su))ort his %lai/ of non-
)ay/ent &eyond his own self-serving assertions and
e4)ressions that he had not &een )aid said a/ount. $s
)rotestant in this %ase, he has the affir/ative of the
issue. Ae is o&liged to )rove his allegations, otherwise
his a%tion will fail. ;or, it is a well settled )rin%i)le 2X3 that
if )laintiff u)on who/ rests the &urden of )roving his
%ause of a%tion fails to show in a satisfa%tory /anner the
fa%ts u)on whi%h he &ases his %lai/, the defendant is
under no o&ligation to )rove his e4%e)tions or s)e%ial
defenses 2Belen vs. Belen, ", 0hil. *+*9 Mendo.a vs.
;ulgen%io, ? 0hil. *8,3.
444 44
4 44
4
ConseFuently, 5illaflorMs %lai/ that he had not &een )aid
/ust )erfor%e fail.
n the other hand, there are strong and %o/)elling
reasons to )resu/e that 5illaflor had already &een )aid
the a/ount of ;ive Thousand 20:,+++.++3 0esos.
;irst, 444 =hat is sur)rising, however, is not so /u%h his
%lai/s %onsisting of giganti% a/ounts as his having
forgotten to addu%e eviden%e to )rove his %lai/ of non-
)ay/ent of the ;ive Thousand 20:,+++.++3
0esos during the investigation )ro%eedings when he
had all the ti/e and o))ortunity to do so. 444 The fa%t
that he did not addu%e or even atte/)t to addu%e
eviden%e in su))ort thereof shows either that he had no
eviden%e to offer 444 that !$SI0IT had already )aid hi/
in fa%t. =hat is worse is that 5illaflor did not even &other
to %o//and )ay/ent, orally or in writing, of the ;ive
Thousand 20:,+++.++3 0esos whi%h was su))osed to &e
due hi/ sin%e $ugust ">, "@:+, the date when the order
of award was issued to !asi)it, and when his %ause of
a%tion to re%over )ay/ent had a%%rued. The fa%t that he
only /ade a %o//and 2si%3 for )ay/ent on January ,",
"@>8, when he filed his )rotest or twenty-four 2*83 years
later is i//ediately nugatory of his %lai/ for non-
)ay/ent.
But 5illaflor /aintains that he had no 'nowledge or
noti%e that the order of award had already &een issued
to !$SI0IT as he had gone to Indonesia and he had
&een a&sent fro/ the 0hili))ines during all those twenty-
four 2*83 years. This of %ourse ta4es %redulity. 444.
Se%ond, it should &e understood that the %ondition that
!$SI0IT should rei/&urse 5illaflor the a/ount of ;ive
Thousand 20:,+++.++3 0esos u)on its re%ei)t of the
order of award was fulfilled as said award was issued to
!$SI0IT on $ugust ">, "@:+. The said deed of
relinFuish/ent was )re)ared and notari.ed in Manila
with 5illaflor and !$SI0IT signing the instru/ent also in
Manila on $ugust "<, "@:+ 2).>>, 2si%33. The following
day or &arely a day after that, or on $ugust ">, "@:+, the
order of award was issued &y this ffi%e to !$SI0IT also
in Manila. !ow, %onsidering that 5illaflor is )resu/ed to
&e /ore assiduous in following u) with the Bureau of
Dands the e4)editious issuan%e of the order of award as
the )ay/ent of the ;ive Thousand 20:,+++.++3 0esos
2%onsideration3 would de)end on the issuan%e of said
order to award !$SI0IT, would it not &e reasona&le to
&elieve that 5illaflor was at hand when the award was
issued to !$SI0IT on $ugust ">, "@:+, or &arely a day
whi%h 2si%3 he e4e%uted the deed of relinFuish/ent on
$ugust "<, "@:+, in ManilaN 444.
Third, on the other hand, !$SI0IT has in his )ossession
a sort of (orderQ u)on itself -- 2the deed of relinFuish/ent
wherein he 2si%3 o&ligated itself to rei/&urse or )ay
5illaflor the 444 %onsideration of the relinFuish/ent u)on
its re%ei)t of the order of award3 for the )ay/ent of the
aforesaid a/ount the /o/ent the order of award is
issued to it. It is reasona&le to )resu/e that !$SI0IT
has )aid the ;ive Thousand 20:,+++.++3 0esos to
5illaflor.
X$ )erson in )ossession of an order on hi/self for the
)ay/ent of /oney, or the delivery of anything, has )aid
the /oney or delivered the thing a%%ordingly. 2Se%tion
:2'3 B-","-Bevised Bules of Court.M
It should &e noted that !$SI0IT did not )rodu%e dire%t
eviden%e as )roof of its )ay/ent of the ;ive Thousand
20:,+++.++3 0esos to 5illaflor. !asi)itMs e4)lanation on
this )oint is found satisfa%tory.
X4 4 4 2I3t was virtually i/)ossi&le for !$SI0IT, after the
la)se of the intervening *8 years, to &e a&le to %o)e u)
with all the re%ords ne%essary to show that the
%onsideration for the deed of relinFuish/ent had &een
fully )aid. To e4)e%t !$SI0IT to 'ee) inta%t all re%ords
)ertinent to the transa%tion for the whole Fuarter of a
%entury would &e to reFuire what even the law does
not. Indeed, even the a))li%a&le law itself 2Se%. ,,>,
!ational Internal Bevenue Code3 reFuires that all
re%ords of %or)orations &e )reserved for only a
/a4i/u/ of five years.
!$SI0IT /ay well have added that at any rate while
Xthere are transa%tions where the )ro)er eviden%e is
i/)ossi&le or e4tre/ely diffi%ult to )rodu%e after the
la)se of ti/e 444 the law %reates )resu/)tions of
regularity in favor of su%h transa%tions 2*+ $/. Jur. *,*3
so that when the &asi% fa%t is esta&lished in an a%tion
the e4isten%e of the )resu/ed fa%t /ust &e assu/ed &y
for%e of law. 2Bule ",, Gnifor/ Bules of Eviden%e9 @
=ig/ore, Se%. *8@"3.
$nent 5illaflorMs %lai/ that the "8+-he%tare land
relinFuished and awarded to !$SI0IT is his )rivate
)ro)erty, little 2need3 &e said. 4444 The tra%'s of land
referred to therein are not identi%al to the lands awarded
to !$SI0IT. Even in the assu/)tion that the lands
/entioned in the deeds of transfer are the sa/e as the
"8+-he%tare area awarded to !$SI0IT, their )ur%hase &y
5illaflor 2or3 the latterMs o%%u)ation of the sa/e did not
%hange the %hara%ter of the land fro/ that of )u&li% land
to a )rivate )ro)erty. The )rovision of the law is s)e%ifi%
that )u&li% lands %an only &e a%Fuired in the /anner
)rovided for therein and not otherwise 2Se%. "", C.$. !o.
"8", as a/ended3. The re%ords show that 5illaflor had
a))lied for the )ur%hase of the lands in Fuestion with this
ffi%e 2Sales $))li%ation !o. 5-?+>3 on Ce%e/&er *,
"@8?. 4444 There is a %ondition in the sales a))li%ation
signed &y 5illaflor to the effe%t that he re%ogni.es that
the land %overed &y the sa/e is of )u&li% do/ain and
any and all rights he /ay have with res)e%t thereto &y
virtue of %ontinuous o%%u)ation and %ultivation are
relinFuished to the Hovern/ent 2)aragra)h <, Sales
$))li%ation !o. 5-?+> 4443 of whi%h 5illaflor is very /u%h
aware. It also a))ears that 5illaflor had )aid for the
)u&li%ation fees a))urtenant to the sale of the land. Ae
)arti%i)ated in the )u&li% au%tion where he was de%lared
the su%%essful &idder. Ae had fully )aid the )ur%hase
)rive 2si%3 thereof 2si%3. It would &e a 2si%3 height of
a&surdity for 5illaflor to &e &uying that whi%h is owned &y
hi/ if his %lai/ of )rivate ownershi) thereof is to &e
&elieved. The /ost that %an &e said is that his
)ossession was /erely that of a sales a))li%ant to when
it had not &een awarded &e%ause he relinFuished his
interest therein in favor of !$SI0IT who 2si%3 filed a
sales a))li%ation therefor.
444 44
4 44
4
4 4 4 Curing the investigation )ro%eedings, 5illaflor
)resented as his E4hi&it X2si%3M 2whi%h !$SI0IT ado)ted
as its own e4hi&it and had it /ar'ed in eviden%e as
E4hi&it X"M3 a duly notari.ed Xagree/ent to SellM dated
July >, "@8?, &y virtue of whi%h 5illaflor undertoo' to sell
to !asi)it the tra%ts of land /entioned therein, for a
%onsideration of Twenty-;our Thousand 20*8,+++.++3
0esos. Said tra%ts of land have &een verified to &e
identi%al to the )ar%els of land for/erly a))lied for &y
5illaflor and whi%h the latter had relinFuished in favor of
!$SI0IT under a deed of relinFuish/ent e4e%uted &y
hi/ on $ugust "<, "@:+. In another do%u/ent e4e%uted
on Ce%e/&er >, "@8? 444 5illaflor as X;IBST 0$BTIM
and !$SI0IT as XSEC!C 0$BTIM %onfir/ed the
X$gree/ent to SellM of July >, "@8?, whi%h was
/aintained Xin full for%e and effe%t with all its ter/s and
%onditions 4 4 4M 2E4h. X,?-$M39 and that Xfor and in
%onsideration of 444 T=E!TI ;GB TAGS$!C
20*8,+++.++3 0ESS that the Se%ond 0arty shall )ay to
the ;irst 0arty 444 the ;irst 0arty here&y sells, transfers
and %onveys unto the Se%ond 0arty 444 his right interest
and )arti%i)ation under and &y virtue of the Sales
$))li%ation !o. 5-?+>M and, in its )aragra)h ?, it /ade
sti)ulations as to when )art of the said %onsideration
444 was )aid and when the &alan%e was to &e )aid, to
wit1
Xa3 the a/ount of SE5E! TAGS$!C 444 0ESS has
already &een )aid &y the Se%ond 0arty to the ;irst 0arty
u)on the e4e%ution of the $gree/ent to Sell, on July ">,
"@8?9
&3 the a/ount of ;I5E TAGS$!C 444 0ESS shall &e
)aid u)on the signing of this )resent agree/ent9 and
%3 the a/ount of T=ED5E TAGS$!C 444
0ESS, shall &e )aid u)on the e4e%ution &y the ;irst
0arty of the $&solute Sale of the Two )ar%els of land in
Fuestion in favor of the Se%ond 0arty of the Certifi%ate of
wnershi) of the said two )ar%els of land.M 2E4h. ,?-B3.
2E/)hasis ours3
It is thus %lear fro/ this su&seFuent do%u/ent /ar'ed
E4hi&it M,? $!$DCM that of the %onsideration of the
X$gree/ent to SellM dated July>, "@8?, involving the "8+-
he%tare area relinFuished &y 5illaflor in favor of !$SI0IT,
in the a/ount of Twenty-;our Thousand 20*8,+++.++3
0esos1
2"3 the a/ount of Seven Thousand 20>,+++.++3
0esos was already )aid u)on the e4e%ution of the
X$gree/ent to SellM on July >, "@8?, re%ei)t of whi%h
in%identally was ad/itted &y 5illaflor in the do%u/ent of
Ce%e/&er >, "@8?9
2*3 the a/ount of ;ive Thousand 20:,+++.++3
0esos was )aid when said do%u/ent was signed &y
5i%ente J. 5illaflor as the ;irst 0arty and !asi)it thru its
0resident, as the Se%ond 0arty, on Ce%e/&er >, "@8?9
and
2,3 the &alan%e of Twelve Thousand 20"*,+++.++3
0esos to &e )aid u)on the e4e%ution &y the ;irst 0arty of
the $&solute Ceed of Sale of the two )ar%els of land in
favor of the Se%ond 0arty, and u)on delivery to the
Se%ond 0arty of the Certifi%ate of wnershi) of the said
two )ar%els of land.
5illaflor %ontends that !$SI0IT %ould not have )aid
5illaflor the &alan%e of Twelve Thousand 20"*,+++.++3
0esos 4 4 4 %onsideration in the $gree/ent to Sell will
only &e )aid to a))li%ant-assignor 2referring to 5illaflor3
u)on o&taining a Torrens Title in his favor over the "8+-
he%tare of land a))lied for and u)on e4e%ution &y hi/ of
a Ceed of $&solute Sale in favor of !asi)it Du/&er
Co/)any, In%. 4 4 4. Inas/u%h as a))li%ant-assignor
was not a&le to o&tain a Torrens Title over the land in
Fuestion he %ould not e4e%ute an a&solute Ceed of 2si%3
!asi)it Du/&er Co., In%. Aen%e, the $gree/ent to Sell
was not %arried out and no Twelve Thousand
20"*,+++.++3 0esos was over)aid either to the a))li%ant-
assignor, /u%h less to Aoward J. !ell Co/)any. 2See
MEMB$!CGM ;B TAE $00DIC$!T-$SSIH!B,
dated January :, "@>>3. 444.
444 5illaflor did not addu%e eviden%e in su))ort of his
%lai/ that he had not &een )aid the 444 20"*,+++.++3
444 %onsideration of the $gree/ent to Sell dated July >,
"@8? 2E4h. X,? !$DCM3 &eyond his /ere
un%orro&orated assertions. n the other hand, there is
strong eviden%e to show that said Twelve Thousand
20"*,+++.++3 0esos had &een )aid &y 2)rivate
res)ondent3 to Edward J. !ell Co/)any &y virtue of the
Ceed of $ssign/ent of Credit e4e%uted &y 5illaflor 2E4h.
X8" !$DCM3 for the %redit of the latter.
$tty. Ha&riel Banaag, resident %ounsel of !$SI0IT who
is in a )osition to 'now the fa%ts, testified for
!$SI0IT. Ae des%ri&ed that it was he who notari.ed the
X$gree/ent to SellX 2E4h. X;M39 that he 'new a&out the
e4e%ution of the do%u/ent of Ce%e/&er >, "@8? 2E4h.
X,?M3 %onfir/ing the said X$gree/ent to SellM having &een
)reviously %onsulted thereon &y Jose ;ernande., who
signed said do%u/ent on &ehalf of !$SI0IT 444 that
su&seFuently, in January "@8@, 5illaflor e4e%uted a Ceed
of $ssign/ent of %redit in favor of Edward J. !ell
Co/)any 2E4h. X8" !$DCM3 where&y 5illaflor %eded to
the latter his re%eiva&le for !$SI0IT %orres)onding to
the re/aining &alan%e in the a/ount of Twelve
Thousand 444 0esos of the total %onsideration 444
sti)ulated in &oth the X$gree/ent to SellM 2E4h. X;M3 and
the do%u/ent dated Ce%e/&er >, "@8? 2E4h. X,@M39
444. Ae further testified that the said assign/ent of
%redit was %o//uni%ated to 2)rivate res)ondent3 under
%over letter dated January *8, "@8@ 2E4h. X8"-$M3 and not
long thereafter, &y virtue of the said assign/ent of %redit,
2)rivate res)ondent3 )aid the &alan%e of Twelve
Thousand 444 due to 5illaflor to Edward J. !ell
Co/)any 444. $tty. BanaagMs aforesaid testi/ony stand
unre&utted9 hen%e, /ust &e given full weight and %redit.
444 5illaflor and his %ounsel were )resent when $tty.
BanaagMs foregoing testi/ony was given. Iet, 5illaflor
did not de/ur, nor did he re&ut the sa/e, des)ite having
&een a%%orded full o))ortunity to do so.
444 44
4 44
4
Aaving found that &oth the ;ive Thousand 444
%onsideration of the deed of BelinFuish/ent 444 and that
the re/aining &alan%e of 444 20"*,+++.++3 to %o/)lete
the Twenty-;our Thousand 20*8,+++.++3 0esos
%onsideration of &oth the $gree/ent to Sell dated July >,
"@8?, and the do%u/ent, dated Ce%e/&er >, "@8?,
e4e%uted &y the for/er in favor of the latter, have &een
)aid 5illaflor the issue on )res%ri)tion and la%hes
&e%o/es a%ade/i% and needs no further dis%ussion.
But /ore than all the Fuestions thus far raised and
resolved is the Fuestion whether a sales )atent %an &e
issued to !$SI0IT for the "8+-he%tare area awarded to it
in the light of Se%tion "", $rti%le OI5 of the new
Constitution whi%h )rovides in its )ertinent )ortion to wit1
X4 4 4 !o )rivate %or)oration or asso%iation /ay hold
aliena&le land of the )u&li% do/ain e4%e)t &y lease not
to e4%eed one thousand he%tares in area 444.M
The Se%retary of Justi%e had )revious o%%asion to rule
on this )oint in his o)inion !o. "8+, s. "@>8. Said the
Aonora&le Justi%e Se%retary1
Xn the se%ond Fuestion, 2referring to the Fuestions
when /ay a )u&li% land &e %onsidered to have &een
a%Fuired &y )ur%hase &efore the effe%tivity of the new
Constitution )osed &y the Cire%tor of Dands in his Fuery
on the effe%t on )ending a))li%ations for the issuan%e of
sales )atent in the light of Se%tion "", $rt. OI5 of the
!ew Constitution afore%ited3, you refer to this ffi%eMs
)inion !o. <8 series of "@>, in whi%h I stated1
n the other hand, with res)e%t to sales a))li%ations
ready for issuan%e of sales )atent, it is /y o)inion that
where the a))li%ant had, &efore the Constitution too'
effe%t, fully %o/)lied with all this o&ligations under the
0u&li% Dand $%t in order to entitle hi/ to a Sales )atent,
there would &e no legal or eFuita&le 7ustifi%ation for
refusing to issue or release the sales )atent.M
=ith res)e%t to the )oint as to when the Sales a))li%ant
has %o/)lied with all the ter/s and %onditions whi%h
would entitle hi/ to a sales )atent, the herein a&ove
Se%retary of Justi%e went on1
XThat as to when the a))li%ant has %o/)lied with all the
ter/s and %onditions whi%h would entitle hi/ to a )atent
is a Fuestioned 2si%3 fa%t whi%h your offi%e would &e in
the &est )osition to deter/ine. Aowever, relating this to
the )ro%edure for the )ro%essing of a))li%ations
/entioned a&ove, I thin' that as the a))li%ant has
fulfilled the %onstru%tion6%ultivation reFuire/ents and has
fully )aid the )ur%hase )ri%e, he should &e dee/ed to
have a%Fuired &y )ur%hase the )arti%ular tra%t of land
and 2si%3 the area 2si%3 in the )rovision in Fuestion of the
new %onstitution would not a))ly.M
;ro/ the de%ision of the Cire%tor of Dands, 5illaflor filed
a Motion for Be%onsideration whi%h was %onsidered as
an $))eal M.!.B. Case 8,8", to the Ministry of !atural
Besour%es.
n June <, "@>@, the Minister of !atural Besour%es
rendered a Ce%ision 2e4h. @3,
[":]
dis/issing the a))eal
and affir/ing the de%ision of the Cire%tor of Dands,
)ertinent )ortions of whi%h reads1
X$fter a %areful study of the re%ords and the argu/ents
of the )arties, we &elieve that the a))eal is not well
ta'en.
;irstly, the area in dis)ute is not the )rivate )ro)erty of
a))ellant.
The eviden%e addu%ed &y a))ellant to esta&lish his
%lai/ of ownershi) over the su&7e%t area %onsists of
deeds of a&solute sale e4e%uted in his favor on January
"<, and ;e&ruary ":, "@8+, &y four 283 different )ersons,
na/ely, Cirilo 0ien%enaves, ;er/in Balo&o, Claudio
tero and Aer/ogenes 0atete.
Aowever, an e4a/ination of the te%hni%al des%ri)tions of
the tra%ts of land su&7e%t of the deeds of sale will
dis%lose that said )ar%els are not identi%al to, and do not
tally with, the area in %ontroversy.
XIt is a &asi% assu/)tion of our )oli%y that lands of
whatever %lassifi%ation &elong to the state. Gnless
alienated in a%%ordan%e with law, it retains its rights over
the sa/e as do/inus, 2Santiago vs. de los Santos, D-
*+*8", !ove/&er **, "@>8, <" SCB$ ":*3.
;or, it is well-settled that no )u&li% land %an &e a%Fuired
&y )rivate )ersons without any grant, e4)ress or i/)lied
fro/ the govern/ent. It is indis)ensa&le then that there
&e showing of title fro/ the state or any other /ode of
a%Fuisition re%ogni.ed &y law.M 2Dee Aong Ao', et al. vs.
Cavid, et al., D-,+,?@, Ce%e/&er *>, "@>*, 8? SCB$
,>@.3
It is well-settled that all lands re/ain )art of the )u&li%
do/ain unless severed therefro/ &y state grant or
unless alienated in a%%ordan%e with law.
=e, therefore, &elieve that the aforesaid deeds of sale
do not %onstitute %lear and %onvin%ing eviden%e to
esta&lish that the %ontested area is of )rivate
ownershi). Aen%e, the )ro)erty /ust &e held to &e
)u&li% do/ain.
XThere &eing no eviden%e whatever that the )ro)erty in
Fuestion was ever a%Fuired &y the a))li%ants or their
an%estors either &y %o/)osition title fro/ the S)anish
Hovern/ent or &y )ossessory infor/ation title or &y any
other /eans for the a%Fuisition of )u&li% lands, the
)ro)erty /ust &e held to &e )u&li% do/ain.M 2Dee Aong
Ao', et al., vs. Cavid , et al., D-,+,?@ Ce%e/&er *>,
"@>*, 8? SCB$ ,>?-,>@ %iting Aeirs of Catu 0endatun
vs. Cire%tor of Dands9 see also Cire%tor of Dands vs.
Beyes, D-*>:@8, !ove/&er *?, "@>:, <? SCB$ ">>3.
Be that as it /ay, a))ellant, &y filing a sales a))li%ation
over the %ontroverted land, a%'nowledged
uneFuivo%a&ly [si%] that the sa/e is not his )rivate
)ro)erty.
X$s su%h sales a))li%ant, a))ellant /anifestly
a%'nowledged that he does not own the land and that
the sa/e is a )u&li% land under the ad/inistration of the
Bureau of Dands, to whi%h the a))li%ation was
su&/itted, 444 $ll of its a%ts )rior thereof, in%luding its
real estate ta4 de%larations, %hara%teri.ed its
)ossessions of the land as that of a Xsales a))li%antM and
%onseFuently, as one who e4)e%ts to &uy it, &ut has not
as yet done so, and is not, therefore, its owner.M
20alawan $gri%ultural and Industrial Co., In%. vs. Cire%tor
of Dands, D-*:@"8, Mar%h *", "@>*, 88 SCB$ *+, *"3.
Se%ondly, a))ellantMs alleged failure to )ay the
%onsideration sti)ulated in the deed of relinFuish/ent
neither %onverts said deed into one without a %ause or
%onsideration nor ipso facto res%inds the
sa/e. $))ellant, though, has the right to de/and
)ay/ent with legal interest for the delay or to de/and
res%ission.
444 44
4 44
4
Aowever, a))ellantMs %ause of a%tion, either for s)e%ifi%
)erfor/an%e or res%ission of %ontra%t, with da/ages,
lies within the 7urisdi%tion of %ivil %ourts, not with
ad/inistrative &odies.
444 44
4 44
4
Dastly, a))ellee has a%Fuired a vested right to the
su&7e%t area and, therefore, is dee/ed not affe%ted &y
the new %onstitutional )rovision that no )rivate
%or)oration /ay hold aliena&le land of the )u&li% do/ain
e4%e)t &y lease.
444 44
4 44
4
I/)le/enting the aforesaid )inion !o. <8 of the
Se%retary of Justi%e, the then Se%retary of $gri%ulture
and !atural Besour%es issued a /e/orandu/, dated
;e&ruary "?, "@>8, whi%h )ertinently reads as follows1
XIn the i/)le/entation of the foregoing o)inion, sales
a))li%ation of )rivate individuals %overing areas in
e4%ess of *8 he%tares and those of %or)orations,
asso%iations, or )artnershi) whi%h fall under any of the
following %ategories shall &e given due %ourse and
issued )atents, to wit1
". Sales a))li%ation for fish)onds and for agri%ultural
)ur)oses 2S;$, S$ and IH0S$3 wherein )rior to January
">, "@>,9
a. the land %overed there&y was awarded9
&. %ultivation reFuire/ents of law were %o/)lied with
as shown &y investigation re)orts su&/itted )rior to
January ">, "@>,9
%. land was surveyed and survey returns already
su&/itted to the Cire%tor of Dands for verifi%ation and
a))roval9 and
d. )ur%hase )ri%e was fully )aid.M
;ro/ the re%ords, it is evident that the aforestated
reFuisites have &een %o/)lied with &y a))ellee long
&efore January ">, "@>,, the effe%tivity of the !ew
Constitution. To restate, the dis)uted area was awarded
to a))ellee on $ugust ">, "@:+, the )ur%hase )ri%e was
fully )aid on July *<, "@:", the %ultivation reFuire/ents
were %o/)lied with as )er investigation re)ort dated
Ce%e/&er ,", "@8@, and the land was surveyed under
0ls-@>.MQ
n July <, "@>?, )etitioner filed a %o/)laint
["<]
in the
trial %ourt for (Ce%laration of !ullity of Contra%t 2Ceed of
BelinFuish/ent of Bights3, Be%overy of 0ossession 2of
two )ar%els of land su&7e%t of the %ontra%t3, and
Ca/agesQ at a&out the sa/e ti/e that he a))ealed the
de%ision of the Minister of !atural Besour%es to the
ffi%e of the 0resident.
n January *?, "@?,, )etitioner died. The trial
%ourt ordered his widow, Dourdes C. 5illaflor, to &e
su&stituted as )etitioner. $fter trial in due %ourse, the
then Court of ;irst Instan%e of $gusan del !orte and
Butuan City, Bran%h III,
[">]
dis/issed the %o/)laint on the
grounds that1 2"3 )etitioner ad/itted the due e4e%ution
and genuineness of the %ontra%t and was esto))ed fro/
)roving its nullity, 2*3 the ver&al lease agree/ents were
unenfor%ea&le under $rti%le "8+, 2*32e3 of the Civil
Code, and 2,3 his %auses of a%tion were &arred &y
e4tin%tive )res%ri)tion and6or la%hes. It ruled that there
was )res%ri)tion and6or la%hes &e%ause the alleged
ver&al lease ended in "@<<, &ut the a%tion was filed only
on January <, "@>?. The si4-year )eriod within whi%h to
file an a%tion on an oral %ontra%t )er $rti%le ""8: 2"3 of
the Civil Code e4)ired in "@>*. The de%retal )ortion
["?]
of
the trial %ourtMs de%ision reads1
(=AEBE;BE, the foregoing )re/ises duly %onsidered,
7udg/ent is here&y rendered in favor of the defendant
and against the )laintiff. ConseFuently, this %ase is
here&y ordered CISMISSEC. The defendant is here&y
de%lared the lawful a%tual )hysi%al )ossessor-o%%u)ant
and having a &etter right of )ossession over the two 2*3
)ar%els of land in litigation des%ri&ed in )ar. ".* of the
%o/)laint as 0ar%el I and 0ar%el II, %ontaining a total
area of ne Aundred Si4ty 2"<+3 he%tares, and was then
the su&7e%t of the Sales $))li%ation !o. 5-?+> of the
)laintiff 2E4hi&its ", "-$, "-B, )). 8*" to 8*"-$, Be%ord3,
and now of the Sales $))li%ation !o. ?+>, Entry !o. 5-
8+> of the defendant !asi)it Du/&er Co/)any 2E4hi&it
I, )). ,:>-,:?, Be%ord3. The $gree/ents to Sell Beal
Bights, E4hi&its * to *-C, , to ,-B, and the Ceed of
BelinFuish/ent of Bights, E4hi&its ! to !-", over the two
)ar%els of land in litigation are here&y de%lared &inding
&etween the )laintiff and the defendant, their su%%essors
and assigns.
Cou&le the %osts against the )laintiff.Q
The heirs of )etitioner a))ealed to Bes)ondent
Court of $))eals
["@]
whi%h, however, rendered 7udg/ent
against )etitioner via the assailed Ce%ision dated
Se)te/&er *>, "@@+ finding )etitionerMs )rayers -- 2"3 for
the de%laration of nullity of the deed of relinFuish/ent,
2*3 for the evi%tion of )rivate res)ondent fro/ the
)ro)erty and 2,3 for the de%laration of )etitionerMs heirs
as owners # to &e without &asis. The de%retal
)ortion
[*+]
of the assailed 8@-)age, single-s)a%ed
Ce%ision %urtly reads1
(=AEBE;BE, the Ce%ision a))ealed fro/, is here&y
$;;IBMEC, with %osts against )laintiff-a))ellants.Q
!ot satisfied, )etitionerMs heirs filed the instant :>-
)age )etition for review dated Ce%e/&er >, "@@+. In a
Besolution dated June *,, "@@", the Court denied this
)etition (for &eing late.Q n re%onsideration -- u)on )lea
of %ounsel that )etitioners were ()oorQ and that a full
de%ision on the /erits should &e rendered -- the Court
reinstated the )etition and reFuired %o//ent fro/
)rivate res)ondent. Eventually, the )etition was granted
due %ourse and the )arties thus filed their res)e%tive
/e/oranda.
T8% I@@5%@
0etitioner, through his heirs, attri&utes the following
errors to the Court of $))eals1
(I. $re the findings of the Court of $))eals %on%lusive
and &inding u)on the Su)re/e CourtN
II. $re the findings of the Court of $))eals fortified &y
the si/ilar findings /ade &y the Cire%tor of Dands and
the Minister of !atural Besour%es 2as well as &y the
ffi%e of the 0resident3N
III. =as there Xforu/ sho))ingNM
I5. $re the findings of fa%ts of the Court of $))eals and
the trial %ourt su))orted &y the eviden%e and the lawN
5. $re the findings of the Court of $))eals su))orted &y
the very ter/s of the %ontra%ts whi%h were under
%onsideration &y the said %ourtN
5I. Cid the Court of $))eals, in %onstruing the su&7e%t
%ontra%ts, %onsider the %onte/)oraneous and
su&seFuent a%t of the )arties )ursuant to arti%le ",>" of
the Civil CodeN
5II. Cid the Court of $))eals %onsider the fa%t and the
unrefuted %lai/ of 5illaflor that he never 'new of the
award in favor of !asi)itN
5III. Cid the Court of $))eals %orre%tly a))ly the rules
on eviden%e in its findings that 5illaflor was )aid
the 0:,+++.++ %onsideration &e%ause 5illaflor did not
addu%e any )roof that he was not )aidN
IO. Is the Court of $))ealsX %on%lusion that the %ontra%t
is not si/ulated or fi%titious si/)ly &e%ause it is genuine
and duly e4e%uted &y the )arties, su))orted &y logi% or
the lawN
O. May the )restations in a %ontra%t agreeing to transfer
%ertain rights %onstitute estoppel when this very %ontra%t
is the su&7e%t of an a%tion for annul/ent on the ground
that it is fi%titiousN
OI. Is the Court of $))ealsX %on%lusion that the lease
agree/ent &etween 5illaflor is ver&al and therefore,
unenfor%ea&le su))orted &y the eviden%e and the lawNQ
$fter a review of the various su&/issions of the
)arties, )arti%ularly those of )etitioner, this Court
&elieves and holds that the issues %an &e %ondensed
into three as follows1
2"3 Cid the Court of $))eals err in ado)ting or relying
on the fa%tual findings of the Bureau of Dands, es)e%ially
those affir/ed &y the Minister 2now Se%retary3 of !atural
Besour%es and the trial %ourtN
2*3 Cid the Court of $))eals err in u)holding the
validity of the %ontra%ts to sell and the deed of
relinFuish/entN therwise stated, did the Court of
$))eals err in finding the deed of relinFuish/ent of
rights and the %ontra%ts to sell valid, and not si/ulated
or fi%titiousN
2,3 Is the )rivate res)ondent Fualified to a%Fuire title
over the dis)uted )ro)ertyN
T8% Co50'J@ R5B();
The )etition is &ereft of /erit. It &asi%ally Fuestions
the suffi%ien%y of the eviden%e relied u)on &y the Court
of $))eals, alleging that )u&li% res)ondentMs fa%tual
findings were &ased on s)e%ulations, sur/ises and
%on7e%tures. 0etitioner insists that a review of those
findings is in order &e%ause they were allegedly 2"3
rooted, not on s)e%ifi% eviden%e, &ut on %on%lusions and
inferen%es of the Cire%tor of Dands whi%h were, in turn,
&ased on /isa))rehension of the a))li%a&le law on
si/ulated %ontra%ts9 2*3 arrived at whi/si%ally -- totally
ignoring the su&stantial and ad/itted fa%t that )etitioner
was not notified of the award in favor of )rivate
res)ondent9 and 2,3 grounded on errors and
/isa))rehensions, )arti%ularly those relating to the
identity of the dis)uted area.
F(0@' I@@5%: Primar. Jurisdiction of the Director of
)ands and @inalit. of @actual @indin$s of the 6ourt
of #ppeals
Gnderlying the rulings of the trial and a))ellate
%ourts is the do%trine of )ri/ary 7urisdi%tion9 i.e.+ %ourts
%annot and will not resolve a %ontroversy involving a
Fuestion whi%h is within the 7urisdi%tion of an
ad/inistrative tri&unal, es)e%ially where the Fuestion
de/ands the e4er%ise of sound ad/inistrative dis%retion
reFuiring the s)e%ial 'nowledge, e4)erien%e and
servi%es of the ad/inistrative tri&unal to deter/ine
te%hni%al and intri%ate /atters of fa%t.
[*"]
In re%ent years, it has &een the 7uris)rudential trend
to a))ly this do%trine to %ases involving /atters that
de/and the s)e%ial %o/)eten%e of ad/inistrative
agen%ies even if the Fuestion involved is also 7udi%ial in
%hara%ter. It a))lies (where a %lai/ is originally
%ogni.a&le in the %ourts, and %o/es into )lay whenever
enfor%e/ent of the %lai/ reFuires the resolution of
issues whi%h, under a regulatory s%he/e, have &een
)la%ed within the s)e%ial %o/)eten%e of an
ad/inistrative &ody9 in su%h %ase, the 7udi%ial )ro%ess is
sus)ended )ending referral of su%h issues to the
ad/inistrative &ody for its view.Q
[**]
In %ases where the do%trine of )ri/ary 7urisdi%tion is
%learly a))li%a&le, the %ourt %annot arrogate unto itself
the authority to resolve a %ontroversy, the 7urisdi%tion
over whi%h is initially lodged with an ad/inistrative &ody
of s)e%ial %o/)eten%e.
[*,]
In 8achete vs. Court of
!ppeals, the Court u)held the )ri/ary 7urisdi%tion of the
Ce)art/ent of $grarian Befor/ $d7udi%atory Board
2C$B$B3 in an agrarian dis)ute over the )ay/ent of
&a%' rentals under a leasehold %ontra%t.
[*8]
In Concerned
0fficials of the 8etropolitan 3ater'or(s and Se'erage
System vs. "as-ue1+
[*:]
the Court re%ogni.ed that the
M=SS was in the &est )osition to evaluate and to
de%ide whi%h &id for a waterwor's )ro7e%t was
%o/)ati&le with its develo)/ent )lan.
The rationale underlying the do%trine of )ri/ary
7urisdi%tion finds a))li%ation in this %ase, sin%e the
Fuestions on the identity of the land in dis)ute and the
fa%tual Fualifi%ation of )rivate res)ondent as an awardee
of a sales a))li%ation reFuire a te%hni%al deter/ination
&y the Bureau of Dands as the ad/inistrative agen%y
with the e4)ertise to deter/ine su%h /atters. Be%ause
these issues )re%lude )rior 7udi%ial deter/ination, it
&ehooves the %ourts to stand aside even when they
a))arently have statutory )ower to )ro%eed, in
re%ognition of the )ri/ary 7urisdi%tion of the
ad/inistrative agen%y.
[*<]
(ne thrust of the /ulti)li%ation of ad/inistrative
agen%ies is that the inter)retation of %ontra%ts and the
deter/ination of )rivate rights thereunder is no longer a
uniFuely 7udi%ial fun%tion, e4er%isa&le only &y our regular
%ourtsQ
[*>]
0etitioner initiated his a%tion with a )rotest &efore
the Bureau of Dands and followed it through in the
Ministry of !atural Besour%es and thereafter in the
ffi%e of the 0resident. Consistent with the do%trine of
)ri/ary 7urisdi%tion, the trial and the a))ellate %ourts had
reason to rely on the findings of these s)e%iali.ed
ad/inistrative &odies.
The )ri/ary 7urisdi%tion of the dire%tor of lands and
the /inister of natural resour%es over the issues
regarding the identity of the dis)uted land and the
Fualifi%ation of an awardee of a sales )atent is
esta&lished &y Se%tions , and 8 of Co//onwealth $%t
!o. "8", also 'nown as the 0u&li% Dand $%t1
(Se%tion ,. The Se%retary of $gri%ulture and Co//er%e
2now Se%retary of !atural Besour%es3 shall &e the
e4e%utive offi%er %harged with %arrying out the )rovisions
of this $%t through the Cire%tor of Dands, who shall a%t
under his i//ediate %ontrol.Q
(Se%tion 8. Su&7e%t to said %ontrol, the Cire%tor of Dands
shall have dire%t e4e%utive %ontrol of the survey,
%lassifi%ation, lease, sale or any other for/ of
%on%ession or dis)osition and /anage/ent of the lands
of the )u&li% do/ain, and his de%ision as to Fuestions of
fa%t shall &e %on%lusive when a))roved &y the Se%retary
of $gri%ulture and Co//er%e.Q
Thus, the Cire%tor of Dands, in his de%ision, said1
[*?]
(4 4 4 It is /erely whether or not 5illaflor has &een )aid
the ;ive Thousand 20:,+++.++3 0esos sti)ulated
%onsideration of the deed of relinFuish/ent /ade &y hi/
without tou%hing on the nature of the deed of
relinFuish/ent. The ad/inistration and dis)osition of
)u&li% lands is )ri/arily vested in the Cire%tor of Dands
and ulti/ately with the Se%retary of $gri%ulture and
!atural Besour%es 2now Se%retary of !atural
Besour%es3, and to this end--
Xur Su)re/e Court has re%ogni.ed that the Cire%tor of
Dands is a Fuasi-7udi%ial offi%er who )asses on issues of
/i4ed fa%ts and law 2rtua vs. Bingson En%arna%ion, :@
0hil 88+3. Se%tions , and 8 of the 0u&li% Dand Daw thus
/ean that the Se%retary of $gri%ulture and !atural
Besour%es shall &e the final ar&iter on Fuestions of fa%t
in )u&li% land %onfli%ts 2Aeirs of 5arela vs. $Fuino, >"
0hil <@9 Julian vs. $)ostol, :* 0hil 88*3.X
The ruling of this ffi%e in its order dated Se)te/&er "+,
"@>:, is worth reiterating, thus1
X4 4 4 it is our o)inion that in the e4er%ise of his )ower of
e4e%utive %ontrol, ad/inistrative dis)osition and
allegation of )u&li% land, the Cire%tor of Dands should
entertain the )rotest of 5illaflor and %ondu%t for/al
investigation 444 to deter/ine the following )oints1 2a3
whether or not the !asi)it Du/&er Co/)any, In%. )aid or
rei/&ursed to 5illaflor the %onsideration of the rights in
the a/ount of 0:,+++.++ and what eviden%e the
%o/)any has to )rove )ay/ent, the relinFuish/ent of
rights &eing )art of the ad/inistrative )ro%ess in the
dis)osition of the land in Fuestion 444.
4444 Besides, the authority of the Cire%tor of Dands to
)ass u)on and deter/ine Fuestions %onsidered inherent
in or essential to the effi%ient e4er%ise of his )owers li'e
the in%ident at issue, i.e. , whether 5illaflor had &een
)aid or not, is %on%eded &y law.XQ
Belian%e &y the trial and the a))ellate %ourts on the
fa%tual findings of the Cire%tor of Dands and the Minister
of !atural Besour%es is not /is)la%ed. By reason of the
s)e%ial 'nowledge and e4)ertise of said ad/inistrative
agen%ies over /atters falling under their 7urisdi%tion,
they are in a &etter )osition to )ass 7udg/ent thereon9
thus, their findings of fa%t in that regard are generally
a%%orded great res)e%t, if not finality,
[*@]
&y the %ourts.
[,+]
The findings of fa%t of an ad/inistrative agen%y /ust
&e res)e%ted as long as they are su))orted &y
su&stantial eviden%e, even if su%h eviden%e /ight not &e
overwhel/ing or even )re)onderant. It is not the tas' of
an a))ellate %ourt to weigh on%e /ore the eviden%e
su&/itted &efore the ad/inistrative &ody and to
su&stitute its own 7udg/ent for that of the ad/inistrative
agen%y in res)e%t of suffi%ien%y of eviden%e.
[,"]
Aowever, the rule that fa%tual findings of an
ad/inistrative agen%y are a%%orded res)e%t and even
finality &y %ourts ad/its of e4%e)tions. This is true also
in assessing fa%tual findings of lower %ourts.
[,*]
It is
in%u/&ent on the )etitioner to show that the resolution of
the fa%tual issues &y the ad/inistrative agen%y and6or &y
the trial %ourt falls under any of the
e4%e)tions. therwise, this Court will not distur& su%h
findings.
[,,]
=e /ention and Fuote e4tensively fro/ the rulings
of the Bureau of Dands and the Minister of !atural
Besour%es &e%ause the )oints, Fuestions and issues
raised &y )etitioner &efore the trial %ourt, the a))ellate
%ourt and now &efore this Court are &asi%ally the sa/e
as those &rought u) &efore the aforesaid s)e%iali.ed
ad/inistrative agen%ies. $s held &y the Court of
$))eals1
[,8]
(=e find that the %ontentious )oints raised &y a))ellant
in this a%tion, are su&stantially the sa/e /atters he
raised in BD Clai/ !o. ?>, 2!3. In &oth a%tions, he
%lai/ed )rivate ownershi) over the land in Fuestion,
assailed the validity and effe%tiveness of the Ceed of
BelinFuish/ent of Bights he e4e%uted in $ugust "<,
"@:+, that he had not &een )aid the 0:,+++.++
%onsideration, the value of the i/)rove/ents he
introdu%ed on the land and other e4)enses in%urred &y
hi/.Q
In this instan%e, &oth the )rin%i)le of )ri/ary
7urisdi%tion of ad/inistrative agen%ies and the do%trine of
finality of fa%tual findings of the trial %ourts, )arti%ularly
when affir/ed &y the Court of $))eals as in this %ase,
/ilitate against )etitionerMs %ause. Indeed, )etitioner has
not given us suffi%ient reason to deviate fro/ the/.
L1)2 () D(@-5'% I@ P5/B(& L1)2
0etitioner argues that even if the te%hni%al
des%ri)tion in the deeds of sale and those in the sales
a))li%ation were not identi%al, the area in dis)ute
re/ains his )rivate )ro)erty. Ae alleges that the deeds
did not %ontain any te%hni%al des%ri)tion, as they were
e4e%uted )rior to the survey %ondu%ted &y the Bureau of
Dands9 thus, the )ro)erties sold were /erely des%ri&ed
&y referen%e to natural &oundaries. Ais )rivate
ownershi) thereof was also allegedly attested to &y
)rivate res)ondentMs for/er field /anager in the latterMs
;e&ruary **, "@:+ letter, whi%h %ontained an ad/ission
that the land leased &y )rivate res)ondent was %overed
&y the sales a))li%ation.
This %ontention is s)e%ious. The la%' of te%hni%al
des%ri)tion did not )rove that the finding of the Cire%tor
of Dands la%'ed su&stantial eviden%e. Aere, the issue is
not so /u%h whether the su&7e%t land is identi%al with
the )ro)erty )ur%hased &y )etitioner. The issue, rather,
is whether the land %overed &y the sales a))li%ation is
)rivate or )u&li% land. In his sales a))li%ation, )etitioner
e4)ressly ad/itted that said )ro)erty was )u&li%
land. This is for/ida&le eviden%e as it a/ounts to an
ad/ission against interest.
In the e4er%ise of his )ri/ary 7urisdi%tion over the
issue, Cire%tor of Dands Casanova ruled that the land
was )u&li%1
[,:]
(4 4 4 Even 2o3n the assu/)tion that the lands
/entioned in the deeds of transfer are the sa/e as the
"8+-he%tare area awarded to !asi)it, their )ur%hase &y
5illaflor 2or3 the latterMs o%%u)ation of the sa/e did not
%hange the %hara%ter of the land fro/ that of )u&li% land
to a )rivate )ro)erty. The )rovision of the law is s)e%ifi%
that )u&li% lands %an only &e a%Fuired in the /anner
)rovided for therein and not otherwise 2Se%. "", C.$. !o.
"8", as a/ended3. The re%ords show that 5illaflor had
a))lied for the )ur%hase of lands in Fuestion with this
ffi%e 2Sales $))li%ation !o. 5-?+>3 on Ce%e/&er *,
"@8?. 444 There is a %ondition in the sales a))li%ation
444 to the effe%t that he re%ogni.es that the land %overed
&y the sa/e is of )u&li% do/ain and any and all rights he
/ay have with res)e%t thereto &y virtue of %ontinuous
o%%u)ation and %ultivation are relinFuished to the
Hovern/ent 2)aragra)h <, Sales $))li%ation !o. 5-?+>
of 5i%ente J. 5illaflor, ). *", %ar)eta3 of whi%h 5illaflor is
very /u%h aware. It also a))ears that 5illaflor had )aid
for the )u&li%ation fees a))urtenant to the sale of the
land. Ae )arti%i)ated in the )u&li% au%tion where he was
de%lared the su%%essful &idder. Ae had fully )aid the
)ur%hase )rive 2si%3 thereor 2si%3. It would &e a 2si%3
height of a&surdity for 5illaflor to &e &uying that whi%h is
owned &y hi/ if his %lai/ of )rivate ownershi) thereof is
to &e &elieved. 444.Q
This finding was affir/ed &y the Minister of !atural
Besour%es1
[,<]
(;irstly, the area in dis)ute is not the )rivate )ro)erty of
a))ellant 2herein )etitioner3.
The eviden%e addu%ed &y 2)etitioner3 to esta&lish his
%lai/ of ownershi) over the su&7e%t area %onsists of
deeds of a&solute sale e4e%uted in his favor 444.
Aowever, an e4a/ination of the te%hni%al des%ri)tions of
the tra%ts of land su&7e%t of the deeds of sale will
dis%lose that said )ar%els are not identi%al to, and do not
tally with, the area in %ontroversy.
XIt is a &asi% assu/)tion of our )oli%y that lands of
whatever %lassifi%ation &elong to the state. Gnless
alienated in a%%ordan%e with law, it retains its rights over
the sa/e as do/inus. 2Santiago vs. de los Santos, D-
*+*8", !ove/&er **, "@>8, <" SCB$ ":*3.
;or it is well-settled that no )u&li% land %an &e a%Fuired
&y )rivate )ersons without any grant, e4)ress or i/)lied
fro/ the govern/ent. It is indis)ensa&le then that there
&e showing of title fro/ the state or any other /ode of
a%Fuisition re%ogni.ed &y law. 2Dee Aong Ao', et al. vs.
Cavid, et al., D-,+,?@, Ce%e/&er *>, "@>*, 8? SCB$
,>@3.M
444 44
4 44
4 44
4
=e, therefore, &elieve that the aforesaid deeds of sale
do not %onstitute %lear and %onvin%ing eviden%e to
esta&lish that the %ontested area is of )rivate
ownershi). Aen%e, the )ro)erty /ust &e held to &e
)u&li% do/ain.
XThere &eing no eviden%e whatever that the )ro)erty in
Fuestion was ever a%Fuired &y the a))li%ants or their
an%estors either &y %o/)osition title fro/ the S)anish
Hovern/ent or &y )ossessory infor/ation title or &y any
other /eans for the a%Fuisition of )u&li% lands, the
)ro)erty /ust &e held to &e )u&li% do/ain.M
Be that as it /ay, [)etitioner], &y filing a sales a))li%ation
over the %ontroverted land, a%'nowledged
uneFuivo%a&ly [si%] that the sa/e is not his )rivate
)ro)erty.
X$s su%h sales a))li%ant /anifestly a%'nowledged that
he does not own the land and that the sa/e is a )u&li%
land under the ad/inistration of the Bureau of Dands, to
whi%h the a))li%ation was su&/itted, 444 $ll of its a%ts
)rior thereof, in%luding its real estate ta4 de%larations,
%hara%teri.ed its )ossessions of the land as that of a
Xsales a))li%antM. $nd %onseFuently, as one who e4)e%ts
to &uy it, &ut has not as yet done so, and is not,
therefore, its owner.M20alawan $gri%ultural and Industrial
Co., In%. vs. Cire%tor of Dands, D-*:@"8, Mar%h *", "@>*,
88 SCB$ ":3.Q
Clearly, this issue falls under the )ri/ary 7urisdi%tion
of the Cire%tor of Dands &e%ause its resolution reFuires
(survey, %lassifi%ation, 444 dis)osition and /anage/ent
of the lands of the )u&li% do/ain.Q It follows that his
rulings deserve great res)e%t. $s )etitioner failed to
show that this fa%tual finding of the Cire%tor of Dands
was unsu))orted &y su&stantial eviden%e, it assu/es
finality. Thus, &oth the trial and the a))ellate %ourts
%orre%tly relied on su%h finding.
[,>]
=e %an do no less.
S%&o)2 I@@5%7 o Simulation of 6ontracts Proven
0etitioner insists that %ontrary to $rti%le ",>"
[,?]
of
the Civil Code, Bes)ondent Court erroneously ignored
the %onte/)oraneous and su&seFuent a%ts of the
)arties9 hen%e, it failed to as%ertain their true
intentions. Aowever, the rule on the inter)retation of
%ontra%ts that was alluded to &y )etitioner is used in
affir/ing, not negating, their validity. Thus, $rti%le ",>,,
[,@]
whi%h is a %on7un%t of $rti%le ",>", )rovides that, if
the instru/ent is sus%e)ti&le of two or /ore
inter)retations, the inter)retation whi%h will /a'e it valid
and effe%tual should &e ado)ted. In this light, it is not
diffi%ult to understand that the legal &asis urged &y
)etitioner does not su))ort his allegation that the
%ontra%ts to sell and the deed of relinFuish/ent are
si/ulated and fi%titious. 0ro)erly understood, su%h rules
on inter)retation even negate )etitionerMs thesis.
But let us indulge the )etitioner awhile and
deter/ine whether the %ited
%onte/)oraneous and su&seFuent a%ts of the )arties
su))ort his allegation of si/ulation. 0etitioner asserts
that the relinFuish/ent of rights and the agree/ents to
sell were si/ulated &e%ause, first, the language and
ter/s of said %ontra%ts negated )rivate
res)ondentMs a%Fuisition of ownershi) of the land in
issue9 and second, %onte/)oraneous and su&seFuent
%o//uni%ations &etween hi/ and )rivate res)ondent
allegedly showed that the latter ad/itted that )etitioner
owned and o%%u)ied the two )ar%els9 i.e.+ that )rivate
res)ondent was not a))lying for said )ar%els &ut was
interested only in the two he%tares it had leased, and
that )rivate res)ondent su))orted )etitionerMs a))li%ation
for a )atent.
0etitioner e4)lains that the $gree/ent to Sell dated
Ce%e/&er >, "@8? did not and %ould not transfer
ownershi) &e%ause )aragra)h ? 2%3 thereof sti)ulates
that the (&alan%e of twelve thousand )esos 20"*,+++.++3
shall &e )aid u)on the e4e%ution &y the ;irst 0arty
[)etitioner] of the $&solute Ceed of Sale of the two
)ar%els of land in Fuestion in favor of the Se%ond 0arty,
and u)on delivery to the Se%ond 0arty [)rivate
res)ondent] of the Certifi%ate of wnershi) of the said
two )ar%els of land.Q The /ortgage )rovisions in
)aragra)hs < and > of the agree/ent state that
the 0>,+++.++ and 0:,+++.++ were (earnest /oney or a
loan with anti%hresis &y the free o%%u)an%y and use
given to !asi)it of the "8+ he%tares of land not any/ore
as a lessee.Q If the agree/ent to sell transferred
ownershi) to !asi)it, then why was it ne%essary to
reFuire )etitioner, in a se%ond agree/ent, to /ortgage
his )ro)erty in the event of nonfulfill/ent of the
)restations in the first agree/entN
True, the agree/ent to sell did not a&solutely
transfer ownershi) of the land to )rivate
res)ondent. This fa%t, however, does not show that the
agree/ent was si/ulated. 0etitionerMs delivery of the
Certifi%ate of wnershi) and e4e%ution of the deed of
a&solute sale were sus)ensive %onditions, whi%h gave
rise to a %orres)onding o&ligation on the )art of the
)rivate res)ondent, i.e.+ the )ay/ent of the last
install/ent of the %onsideration /entioned in the
Ce%e/&er >, "@8? $gree/ent. Su%h %onditions did not
affe%t the )erfe%tion of the %ontra%t or )rove
si/ulation. !either did the /ortgage.
Si/ulation o%%urs when an a))arent %ontra%t is a
de%laration of a fi%titious will, deli&erately /ade &y
agree/ent of the )arties, in order to )rodu%e, for the
)ur)ose of de%e)tion, the a))earan%e of a 7uridi%al a%t
whi%h does not e4ist or is different fro/ that whi%h was
really e4e%uted.
[8+]
Su%h an intention is not a))arent in
the agree/ents. The intent to sell, on the other hand, is
as %lear as daylight.
0etitioner alleges further that the deed of
relinFuish/ent of right did not give full effe%t to the two
agree/ents to sell, &e%ause the )reli/inary %lauses of
the deed allegedly served only to give )rivate
res)ondent an interest in the )ro)erty as a future owner
thereof and to ena&le res)ondent to follow u) )etitionerMs
sales a))li%ation.
=e disagree. Su%h an intention is not indi%ated in
the deed. n the %ontrary, a real and fa%tual sale is
evident in )aragra)h < thereof, whi%h states1 (That the
!asi)it Du/&er Co., In%., 444 is very /u%h interested in
a%Fuiring the land %overed &y the afore%ited a))li%ation
to &e used for )ur)oses of /e%hani.ed far/ingQ and the
)enulti/ate )aragra)h stating1 (444 5ICE!TE J.
5IDD$;DB, here&y voluntarily renoun%e and relinFuish
whatever rights to, and interests I have in the land
%overed &y /y a&ove-/entioned a))li%ation in favor of
the !asi)it Du/&er Co., In%.Q
=e also hold that no si/ulation is shown either in
the letter, dated Ce%e/&er ,, "@>,, of the for/er field
/anager of )rivate res)ondent, Heorge Mear. $
)ertinent )ortion of the letter reads1
(2a3s regards your )ro)erty at $%a%ia, San Mateo, I re%all
that we /ade so/e sort of agree/ent for the
o%%u)an%y, &ut I no longer re%all the details and I had
forgotten whether or not we a%tually did o%%u)y your
land. But if, as you say, we did o%%u)y it, then I a/ sure
that the Co/)any is o&ligated to )ay a rental.Q
The letter did not %ontain any e4)ress ad/ission
that )rivate res)ondent was still leasing the land fro/
)etitioner as of that date. $%%ording to Mear, he %ould
no longer re%all the details of his agree/ent with
)etitioner. This %annot &e read as eviden%e of the
si/ulation of either the deed of relinFuish/ent or the
agree/ents to sell. It is eviden%e /erely of an honest
la%' of re%olle%tion.
0etitioner also alleges that he %ontinued to )ay
realty ta4es on the land even after the e4e%ution of said
%ontra%ts. This is i//aterial &e%ause )ay/ent of realty
ta4es does not ne%essarily )rove ownershi), /u%h less
si/ulation of said %ontra%ts.
[8"]
onpa.ment of the 6onsideration
Did ot Prove Simulation
0etitioner insists that non)ay/ent of the
%onsideration in the %ontra%ts )roves their
si/ulation. =e disagree. !on)ay/ent, at /ost, gives
hi/ only the right to sue for %olle%tion. Henerally, in a
%ontra%t of sale, )ay/ent of the )ri%e is a resolutory
%ondition and the re/edy of the seller is to e4a%t
fulfill/ent or, in %ase of a su&stantial &rea%h, to res%ind
the %ontra%t under $rti%le ""@" of the Civil Code.
[8*]
Aowever, failure to )ay is not even a &rea%h, &ut
/erely an event whi%h )revents the vendorMs o&ligation
to %onvey title fro/ a%Fuiring &inding for%e.
[8,]
0etitioner also argues that Bes)ondent Court
violated evidentiary rules in u)holding the ruling of the
Cire%tor of Dands that )etitioner did not )resent eviden%e
to show )rivate res)ondentMs failure to )ay hi/. =e
disagree. 0rior to the a/end/ent of the rules on
eviden%e on Mar%h "8, "@?@, Se%tion ", Bule ",", states
that ea%h )arty /ust )rove his or her own affir/ative
allegations.
[88]
Thus, the &urden of )roof in any %ause
rested u)on the )arty who, as deter/ined &y the
)leadings or the nature of the %ase, asserts the
affir/ative of an issue and re/ains there until the
ter/ination of the a%tion.
[8:]
$lthough non)ay/ent is a
negative fa%t whi%h need not &e )roved, the )arty
see'ing )ay/ent is still reFuired to )rove the e4isten%e
of the de&t and the fa%t that it is already due.
[8<]
0etitioner showed the e4isten%e of the o&ligation
with the )resentation of the %ontra%ts, &ut did not )resent
any eviden%e that he de/anded )ay/ent fro/ )rivate
res)ondent. The de/and letters dated January * and :,
"@>8 2E4hs. (JQ and (GQ3, addu%ed in eviden%e &y
)etitioner, were for the )ay/ent of &a%' rentals,
da/ages to i/)rove/ents and rei/&urse/ent of
a%Fuisition %osts and realty ta4es, not )ay/ent arising
fro/ the %ontra%t to sell.
Thus, we %annot fault Bes)ondent Court for
ado)ting the finding of the Cire%tor of Dands that
)etitioner (offered no eviden%e to su))ort his %lai/ of
non)ay/ent &eyond his own self-serving assertions,Q as
he did not even de/and ()ay/ent, orally or in writing, of
the five thousand 20:,+++.++3 )esos whi%h was
su))osed to &e due hi/ sin%e $ugust ">, "@:+, the date
when the order of award was issued to !asi)it, and
when his %ause of a%tion to re%over )ay/ent had
a%%rued.Q !on)ay/ent of the %onsideration in the
%ontra%ts to sell or the deed of relinFuish/ent was
raised for the first ti/e in the )rotest filed with the
Bureau of Dands on January ,", "@>8. But this )rotest
letter was not the de/and letter reFuired &y law.
0etitioner alleges that the assign/ent of %redit and
the letter of the for/er field /anager of )rivate
res)ondent are %onte/)oraneous and su&seFuent a%ts
revealing the non)ay/ent of the %onsideration. Ae
/aintains that the 0"*,+++.++ %redit assigned )ertains
to the 0:,+++.++ and 0>,+++.++ initial )ay/ents in the
Ce%e/&er >, "@8? $gree/ent, &e%ause the &alan%e
of0"*,+++.++ was not yet (due and a%%ruing.Q This is
%onsistent, he argues, with the re)resentation that
)rivate res)ondent was not interested in filing a sales
a))li%ation over the land in issue and that !asi)it was
instead su))orting )etitionerMs a))li%ation thereto
in MearMs letter to the Cire%tor of Dands dated ;e&ruary
**, "@:+ 2E4h. (OQ3.
[8>]
This argu/ent is too strained to &e
a%%e)ta&le. The assign/ent of %redit did not esta&lish
the nondelivery of these initial )ay/ents of the total
%onsideration. 4irst, the assign/ent of %redit ha))ened
on January "@, "@8@, or a /onth after the signing of the
Ce%e/&er >, "@8? $gree/ent and al/ost si4 /onths
after the July >, "@8? $gree/ent to Sell. Second, it
does not over%o/e the re%itation in the $gree/ent of
Ce%e/&er >, "@8?1 (444 a3 The a/ount of SE5E!
TAGS$!C 20>,+++.++3 0ESS has already &een )aid
&y the Se%ond 0arty to the ;irst 0arty u)on the
e4e%ution of the $gree/ent to Sell, on July >, "@8?9 &3
The a/ount of ;I5E TAGS$!C 20:,+++.++3 0ESS
shall &e )aid u)on the signing of this )resent agree/ent9
444.Q
$side fro/ these fa%ts, the Cire%tor of Dands found
eviden%e of greater weight showing that )ay/ent was
a%tually /ade1
[8?]
(4 4 4 2T3here is strong eviden%e to show that said 444
20"*,+++.++3 had &een )aid &y !$SI0IT to Edward J.
!ell Co/)any &y virtue of the Ceed of $ssign/ent of
Credit e4e%uted &y 5illaflor 2E4h. (8" !$DCQ3 for the
%redit of the latter.
$tty. Ha&riel Banaag, resident %ounsel of !$SI0IT 444
de%lared that it was he who notari.ed the X$gree/ent to
SellM 2E4h. (;Q39 4444 that su&seFuently, in January "@8@,
5illaflor e4e%uted a Ceed of $ssign/ent of %redit in favor
of Edward J. !ell Co/)any 2E4h. (8" !$DCQ3 where&y
5illaflor %eded to the latter his re%eiva&le for !$SI0IT
%orres)onding to the re/aining &alan%e in the a/ount of
444 20"*,+++.++3 444 of the total %onsideration 44449 Ae
further testified that the said assign/ent 444 was
%o//uni%ated to !$SI0IT under %over letter dated
January *8, "@8@ 2E4h. (8"-$Q3 and not long thereafter,
&y virtue of the said assign/ent of %redit, !$SI0IT )aid
the &alan%e 444 to Edward J. !ell Co/)any 2). :?,
&id3. $tty. BanaagMs aforesaid testi/ony stand
unre&utted9 hen%e, /ust &e given full weight and %redit.
444 44
4 44
4.Q
The Cire%tor of Dands also found that there had
&een )ay/ent of the %onsideration in the relinFuish/ent
of rights1
[8@]
(n the other hand, there are strong and %o/)elling
reasons to )resu/e that 5illaflor had already &een )aid
the a/ount of ;ive Thousand 20:,+++.++3 0esos.
;irst, 4 4 4 =hat is sur)rising, however, is not so /u%h
his %lai/s %onsisting of giganti% a/ounts as his having
forgotten to addu%e eviden%e to )rove his %lai/ of non-
)ay/ent of the ;ive Thousand 20:,+++.++3 0esos during
the investigation )ro%eedings when he had all the ti/e
and o))ortunity to do so. 4444 The fa%t that he did not
addu%e or even atte/)t to addu%e eviden%e in su))ort
thereof shows either that he had no eviden%e to offer of
that !$SI0IT had already )aid hi/ in fa%t. =hat is
worse is that 5illaflor did not even &other to %o//and
)ay/ent, orally or in writing, of the ;ive Thousand
20:,+++.++3 0esos whi%h was su))osed to &e due hi/
sin%e $ugust ">, "@:+, the date when the order of award
was issued to !asi)it, and when his %ause of a%tion to
re%over )ay/ent had a%%rued. The fa%t that he only
/ade a %o//and for )ay/ent on January ,", "@>8,
when he filed his )rotest or twenty-four 2*83 years later is
i//ediately nugatory of his %lai/ for non-)ay/ent.
But 5illaflor /aintains that he had no 'nowledge or
noti%e that the order of award had already &een issued
to !$SI0IT as he had gone to Indonesia and he had
&een a&sent fro/ the 0hili))ines during all those twenty-
four 2*83 years. This of %ourse ta4es %redulity.4444
X 4 4 4 It is /ore in 'ee)ing with the ordinary %ourse of
things that he should have a%Fuired infor/ation as to
what was trans)iring in his affairs in Manila 4 4 4.X
Se%ond, it should &e understood that the %ondition that
!$SI0IT should rei/&urse 5illaflor the a/ount of ;ive
Thousand 20:,+++.++3 0esos u)on its re%ei)t of the
order of award was fulfilled as said award was issued to
!$SI0IT on $ugust ">, "@:+. The said deed of
relinFuish/ent was )re)ared and notari.ed in Manila
with 5illaflor and !$SI0IT signing the instru/ent also in
Manila. !ow, %onsidering that 5illaflor is )resu/ed to &e
/ore assiduous in following u) with the Bureau of Dands
the e4)editious issuan%e of the order of award as the
2%onsideration3 would de)end on the issuan%e of said
order to award !$SI0IT, would it not &e reasona&le to
&elieve that 5illaflor was at hand when the award was
issued to !$SI0IT on $ugust ">, "@:+, or &arely a day
whi%h he e4e%uted the deed of relinFuish/ent on $ugust
"<, "@:+, in ManilaN 4444.
Third, on the other hand, !$SI0IT has in his )ossession
a sort of (orderQ u)on itself -- 2the deed of relinFuish/ent
wherein he2si%3 o&ligated itself to rei/&urse or )ay
5illaflor the 444 %onsideration of the relinFuish/ent u)on
its re%ei)t of the order of award3 for the )ay/ent of the
aforesaid a/ount the /o/ent the order of award is
issued to it. It is reasona&le to )resu/e that !$SI0IT
has )aid the 2%onsideration3 to 5illaflor.
444 44
4 44
4
4 4 4 2I3t was virtually i/)ossi&le for !$SI0IT, after the
la)se of the intervening *8 years, to &e a&le to %o)e u)
with all the re%ords ne%essary to show that the
%onsideration for the deed of relinFuish/ent had &een
fully )aid. To e4)e%t !$SI0IT to 'ee) inta%t all re%ords
)ertinent to the transa%tion for the whole Fuarter of a
%entury would &e to reFuire what even the law does
not. Indeed, even the a))li%a&le law itself 2Se%. ,,>,
!ational Internal Bevenue Code3 reFuires that all
re%ords of %or)orations &e )reserved for only a
/a4i/u/ of five years.
!$SI0IT /ay well have added that at any rate while
there are transa%tions where the )ro)er eviden%e is
i/)ossi&le or e4tre/ely diffi%ult to )rodu%e after the
la)se of ti/e 444 the law %reates )resu/)tions of
regularity in favor of su%h transa%tions 2*+ $/. Jur. *,*3
so that when the &asi% fa%t is esta&lished in an a%tion
the e4isten%e of the )resu/ed fa%t /ust &e assu/ed &y
for%e of law. 2Bule ",, Gnifor/ Bules of Eviden%e9 @
=ig/ore, Se%. *8@"3.Q
The Court also notes that MearMs letter of ;e&ruary
**, "@:+ was sent si4 /onths )rior to the e4e%ution of
the deed of relinFuish/ent of right. $t the ti/e of its
writing, )rivate res)ondent had not )erfe%ted its
ownershi) of the land to &e a&le to Fualify as a sales
a))li%ant. Besides, although he was a )arty to the July
>, "@8? $gree/ent to Sell, Mear was not a signatory to
the Ceed of BelinFuish/ent or to the Ce%e/&er >, "@8?
$gree/ent to Sell. Thus, he %annot &e e4)e%ted to
'now the e4isten%e of and the a/end/ents to the later
%ontra%ts. These %ir%u/stan%es e4)lain the /ista'en
re)resentations, not /isre)resentations, in said letter.
)ac= of otice of the #?ard
0etitioner insists that )rivate res)ondent
su))ressed eviden%e, )ointing to his not having &een
notified of the rder of $ward dated $ugust ">, "@:+.
[:+]
$t the &otto/ of )age * of the order, )etitioner was
not listed as one of the )arties who were to &e furnished
a %o)y &y Cire%tor of Dands Jose 0. Cans. 0etitioner
also )osits that 0u&li% Dand Ins)e%tor Sul)i%io $. Tae.a
irregularly re%eived the %o)ies for &oth )rivate
res)ondent and the %ity treasurer of Butuan City. The
la%' of noti%e for )etitioner %an &e easily
e4)lained. 0lainly, )etitioner was not entitled to said
noti%e of award fro/ the Cire%tor of Dands, &e%ause &y
then, he had already relinFuished his rights to the
dis)uted land in favor of )rivate res)ondent. In the
heading of the order, he was referred to as sales
a))li%ant-assignor. In )aragra)h nu/&er 8, the order
stated that, on $ugust "<, "@:+, he relinFuished his
rights to the land su&7e%t of the award to )rivate
res)ondent. ;ro/ su%h date, the sales a))li%ation was
%onsidered to &e a /atter &etween the Bureau of Dands
and )rivate res)ondent only. Considering these fa%ts,
the failure to give )etitioner a %o)y of the noti%e of the
award %annot &e %onsidered as su))ression of
eviden%e.
[:"]
;urther/ore, this order was in fa%t availa&le
to )etitioner and had &een referred to &y hi/ sin%e
January ,", "@>8 when he filed his )rotest with the
Bureau of Dands.
[:*]
T8(02 I@@5%7 Private Respondent Aualified
for an #?ard of Public )and
0etitioner asserts that )rivate res)ondent was
legally disFualified fro/ a%Fuiring the )ar%els of land in
Fuestion &e%ause it was not authori.ed &y its %harter to
a%Fuire dis)osa&le )u&li% agri%ultural lands under
Se%tions "*", "** and "*, of the 0u&li% Dand $%t, )rior
to its a/end/ent &y 0.C. !o. ><,. =e disagree. The
reFuire/ents for a sales a))li%ation under the 0u&li%
Dand $%t are1 2"3 the )ossession of the Fualifi%ations
reFuired &y said $%t 2under Se%tion *@3 and 2*3 the la%'
of the disFualifi%ations /entioned therein 2under
Se%tions "*", "**, and "*,3. Aowever, the transfer of
ownershi) via the two agree/ents dated July > and
Ce%e/&er >, "@8? and the relinFuish/ent of rights,
&eing )rivate %ontra%ts, were &inding only &etween
)etitioner and )rivate res)ondent. The 0u&li% Dand $%t
finds no relevan%e &e%ause the dis)uted land was
%overed &y said $%t only after the issuan%e of the order
of award in favor of )rivate res)ondent. Thus, the
)ossession of any disFualifi%ation &y )rivate res)ondent
under said $%t is i//aterial to the )rivate %ontra%ts
&etween the )arties thereto. 2=e are not, however,
suggesting a de)arture fro/ the rule that laws are
dee/ed written in %ontra%ts.3 Consideration of said
)rovisions of the $%t will further show their ina))li%a&ility
to these %ontra%ts. Se%tion "*" of the $%t )ertains to
a%Fuisitions of )u&li% land &y a %or)oration fro/ a
grantee, &ut )etitioner never &e%a/e a grantee of the
dis)uted land. n the other hand, )rivate res)ondent
itself was the dire%t grantee. Se%tions "** and "*,
disFualify %or)orations, whi%h are not authori.ed &y their
%harter, fro/ a%Fuiring )u&li% land9 the re%ords do not
show that )rivate res)ondent was not so authori.ed
under its %harter.
$lso, the deter/ination &y the Cire%tor of Dands
and the Minister of !atural Besour%es of the Fualifi%ation
of )rivate res)ondent to &e%o/e an awardee or grantee
under the $%t is )ersuasive on Bes)ondent
Court. In )spinosa vs. 8a(alintal,
[:,]
the Court ruled
that, &y law, the )owers of the Se%retary of $gri%ulture
and !atural Besour%es regarding the dis)osition of
)u&li% lands -- in%luding the a))roval, re7e%tion, and
reinstate/ent of a))li%ations # are of e4e%utive and
ad/inistrative nature. 2Su%h )owers, however, do not
in%lude the 7udi%ial )ower to de%ide %ontroversies arising
fro/ disagree/ents in %ivil or %ontra%tual relations
&etween the litigants.3 ConseFuently, the deter/ination
of whether )rivate res)ondent is Fualified to &e%o/e an
awardee of )u&li% land under C.$. "8" &y sales
a))li%ation is in%luded therein.
$ll told, the only disFualifi%ation that %an &e i/)uted
to )rivate res)ondent is the )rohi&ition in the "@>,
Constitution against the holding of aliena&le lands of the
)u&li% do/ain &y %or)orations.
[:8]
Aowever, this Court
earlier settled the /atter, ruling that said %onstitutional
)rohi&ition had no retroa%tive effe%t and %ould not )revail
over a vested right to the land. In !yog vs. Cusi+ @r.+
[::]
this Court de%lared1
(=e hold that the said %onstitutional )rohi&ition has no
retroa%tive a))li%ation to the sales a))li%ation of BiTan
Cevelo)/ent Co., In%. &e%ause it had already a%Fuired a
vested right to the land a))lied for at the ti/e the "@>,
Constitution too' effe%t.
That vested right has to &e res)e%ted. It %ould not &e
a&rogated &y the new Constitution. Se%tion *, $rti%le
OIII of the "@,: Constitution allows )rivate %or)orations
to )ur%hase )u&li% agri%ultural lands not e4%eeding one
thousand and twenty-four he%tares. 0etitionerMs
)rohi&ition a%tion is &arred &y the do%trine of vested
rights in %onstitutional law.
X$ right is vested when the right to en7oy/ent has
&e%o/e the )ro)erty of so/e )arti%ular )erson or
)ersons as a )resent interest.M 2"< C.J.S. "">,3. It is Xthe
)rivilege to en7oy )ro)erty legally vested, to enfor%e
%ontra%ts, and en7oy the rights of )ro)erty %onferred &y
e4isting lawM 2"* C.J. @::, !ote 8<, !o. <3 or Xso/e right
or interest in )ro)erty whi%h has &e%o/e fi4ed and
esta&lished and is no longer o)en to dou&t or
%ontroversyM 2Cowns vs. Blount, ">+ ;ed. ":, *+, %ited in
Bal&oa vs. ;arrales, :" 0hil. 8@?, :+*3.
The due )ro%ess %lause )rohi&its the annihilation of
vested rights. X$ state /ay not i/)air vested rights &y
legislative ena%t/ent, &y the ena%t/ent or &y the
su&seFuent re)eal of a /uni%i)al ordinan%e, or &y a
%hange in the %onstitution of the State, e4%e)t in a
legiti/ate e4er%ise of the )oli%e )owerM 2"< C.J.S. "">>-
>?3.
It has &een o&served that, generally, the ter/ Xvested
rightM e4)resses the %on%e)t of )resent fi4ed interest,
whi%h in right reason and natural 7usti%e should &e
)rote%ted against ar&itrary State a%tion, or an innately
7ust an i/)erative right whi%h an enlightened free
so%iety, sensitive to inherent and irrefraga&le individual
rights, %annot deny 2"< C.J.S. "">8, !ote >", !o. :,
%iting 0ennsylvania Hreyhound Dines, In%. vs.
Bosenthal, "@* $tl. *
nd
:?>3.
Se%retary of Justi%e $&ad Santos in his "@>, o)inion
ruled that where the a))li%ant, &efore the Constitution
too' effe%t, had fully %o/)lied with all his o&ligations
under the 0u&li% Dand $%t in order to entitle hi/ to a
sales )atent, there would see/ to &e no legal or
eFuita&le 7ustifi%ation for refusing to issue or release the
sales )atent 2). *:8, Bollo3.
In )inion !o. "8+, series of "@>8, he held that as soon
as the a))li%ant had fulfilled the %onstru%tion or
%ultivation reFuire/ents and has fully )aid the )ur%hase
)ri%e, he should &e dee/ed to have a%Fuired &y
)ur%hase the )arti%ular tra%t of land and to hi/ the area
li/itation in the new Constitution would not a))ly.
In )inion !o. "?:, series of "@><, Se%retary $&ad
Santos held that where the %ultivation reFuire/ents were
fulfilled &efore the new Constitution too' effe%t &ut the
full )ay/ent of the )ri%e was %o/)leted after January
">, "@>,, the a))li%ant was, nevertheless, entitled to a
sales )atent 2). *:<, Bollo3.
Su%h a %onte/)oraneous %onstru%tion of the
%onstitutional )rohi&ition &y a high e4e%utive offi%ial
%arries great weight and should &e a%%orded /u%h
res)e%t. It is a %orre%t inter)retation of se%tion "" of
$rti%le OI5.
In the instant %ase, it is in%ontesta&le that )rior to the
effe%tivity of the "@>, Constitution the right of the
%or)oration to )ur%hase the land in Fuestion had
&e%o/e fi4ed and esta&lished and was no longer o)en
to dou&t or %ontroversy.
Its %o/)lian%e with the reFuire/ents of the 0u&li% Dand
Daw for the issuan%e of a )atent had the effe%t of
segregating the said land fro/ the )u&li% do/ain. The
%or)orationMs right to o&tain a )atent for that land is
)rote%ted &y law. It %annot &e de)rived of that right
without due )ro%ess 2Cire%tor of Dands vs. C$, "*, 0hil.
@"@3.Q
The Minister of !atural Besour%es ruled, and we
agree, that )rivate res)ondent was si/ilarly Fualified to
&e%o/e an awardee of the dis)uted land &e%ause its
rights to it vested )rior to the effe%tivity of the "@>,
Constitution1
[:<]
(Dastly, a))ellee has a%Fuired a vested right to the
su&7e%t area and, therefore, is dee/ed not affe%ted &y
the new %onstitutional )rovision that no )rivate
%or)oration /ay hold aliena&le land of the )u&li% do/ain
e4%e)t &y lease.
It /ay &e re%alled that the Se%retary of Justi%e in his
)inion !o. <8, series of "@>,, had de%lared, to wit1
Xn the other hand, with res)e%t to sales a))li%ation
ready for issuan%e of sales )atent, it is /y o)inion that
where the a))li%ant had, &efore, the %onstitution too'
effe%t, fully %o/)lied with all his o&ligations under the
0u&li% Dand a%t in order to entitle hi/ to sales )atent,
there would see/ to &e not legal or eFuita&le 7ustifi%ation
for refusing to issue or release the sales )atent.M
I/)le/enting the aforesaid )inion !o. <8 444, the then
Se%retary of $gri%ulture and !atural Besour%es issued a
/e/orandu/, dated ;e&ruary "?, "@>8, whi%h
)ertinently reads as follows1
XIn the i/)le/entation of the foregoing o)inion, sales
a))li%ation of )rivate individuals %overing areas in
e4%ess of *8 he%tares and those of %or)orations,
asso%iations, or )artnershi) whi%h fall under any of the
following %ategories shall &e given due %ourse and
issued )atents, to wit1
Sales a))li%ation for fish)onds and for agri%ultural
)ur)oses 2S;$, S$ and IH0S$3 wherein )rior to January
">, "@>,,
a. the land %overed there&y was awarded9
&. %ultivation reFuire/ents of law were %o/)lied with
as shown &y investigation re)orts su&/itted )rior to
January ">, "@>,9
%. land was surveyed and survey returns already
su&/itted to the Cire%tor of Dands for verifi%ation and
a))roval9 and
d. )ur%hase )ri%e was fully )aid.X
;ro/ the re%ords, it is evident that the aforestated
reFuisites have &een %o/)lied with &y a))ellee long
&efore January ">, "@>,, the effe%tivity of the !ew
Constitution. To restate, the dis)uted area was awarded
to a))ellee on $ugust ">, "@:+, the )ur%hase )ri%e was
fully )aid on July *<, "@:", the %ultivation reFuire/ents
were %o/)lied with as )er investigation re)ort dated
Ce%e/&er ,", "@8@, and the land was surveyed under
0ls-@>.Q
The sa/e finding was earlier /ade &y the Cire%tor
of Dands1
[:>]
(It is further %ontended &y 5illaflor that !asi)it has no
7uridi%al )ersonality to a))ly for the )ur%hase of )u&li%
lands for agri%ultural )ur)oses. The re%ords %learly
show, however, that sin%e the e4e%ution of the deed of
relinFuish/ent of $ugust "<, "@:+, in favor of !asi)it,
5illaflor has always %onsidered and re%ogni.ed !asi)it
as having the 7uridi%al )ersonality to a%Fuire )u&li% lands
for agri%ultural )ur)oses. In the deed of relinFuish/ent
444, it is stated1
X<. That the !asi)it Du/&er Co., In%., a %or)oration duly
organi.ed in a%%ordan%e with the laws of the 0hili))ines,
4 4 4.M
Even this ffi%e had not failed to re%ogni.e the 7uridi%al
)ersonality of !asi)it to a))ly for the )ur%hase of )u&li%
lands 444 when it awarded to it the land so relinFuished
&y 5illaflor 2rder of $ward dated $ugust ">, "@:+3 and
a%%e)ted its a))li%ation therefor. $t any rate, the
Fuestion whether an a))li%ant is Fualified to a))ly for the
a%Fuisition of )u&li% lands is a /atter &etween the
a))li%ant and this ffi%e to de%ide and whi%h a third
)arty li'e 5illaflor has no )ersonality to Fuestion &eyond
/erely %alling the attention of this ffi%e thereto.Q
!eedless to say, we also agree that the !ove/&er
?, "@8< Dease $gree/ent &etween )etitioner and )rivate
res)ondent had &een ter/inated &y the agree/ents to
sell and the relinFuish/ent of rights. By the ti/e the
ver&al leases were allegedly /ade in "@:" and "@::,
[:?]
the dis)uted land had already &een a%Fuired and
awarded to )rivate res)ondent. In any event, )etitionerMs
%ause of a%tion on these alleged lease agree/ents
)res%ri&ed long &efore he filed Civil Case !o. *+>*-III,
as %orre%tly found &y the trial and a))ellate %ourts.
[:@]
Thus, it is no longer i/)ortant, in this %ase, to )ass
u)on the issue of whether or not a/end/ents to a lease
%ontra%t %an &e )roven &y )arol eviden%e. The sa/e
holds true as regards the issue of foru/-sho))ing.
$ll in all, )etitioner has not )rovided us suffi%ient
reason to distur& the %ogent findings of the Cire%tor of
Dands, the Minister of !atural Besour%es, the trial %ourt
and the Court of $))eals.
WHEREFORE, the )etition is here&y D$S8$SS)D.
S BCEBEC.
G.R. No. ,#0+*"5 45B> 1, 1##0
4OSE R. VELOSO, )etitioner,
vs.
SANDIGANBAYAN DS%&o)2 D(:(@(o)E 1)2 '8%
PEOPLE OF THE PHILIPPINES, res)ondents.
!mado !. Caballero for petitioner.

CORTES, J.:
This is a )etition to review the de%ision of the Se%ond
Civision of the Sandigan&ayan in Cri/ Cases !os.
*+>,-*+@: and ,,*,,,8: insofar as it finds )etitioner
Jose B. 5eloso guilty as %o-)rin%i)al in the %o/)le4
%ri/es of Estafa thru ;alsifi%ation of 0u&li% Co%u/ents,
as defined and )enali.ed under $rti%le ,"?
1
and ">",
)aragra)h 8,
!
in relation to $rti%le 8?,
*
of the Bevised
0enal Code.
The nature of the %ases filed &efore the Sandigan&ayan
was as follows1
;or defrauding the Hovern/ent in the a/ount of !ine
Aundred Eighty- Two Thousand Two Aundred Seven
0esos and Si4ty Centavos 20@?*,*+>.<+3 through the
illegal and unauthori.ed issuan%e of fa'e Detters of
$dvi%e of $llot/ents and Cash Cis&urse/ent Ceilings
and the ta/)ering and falsifi%ations of Heneral 5ou%hers
and su))orting do%u/ents, the following offi%ials and
e/)loyees of the Ministry of 0u&li% Aighways Central
ffi%e, Begional ffi%e !o. 5II and the SiFui7or Aighway
Engineering Cistri%t, together with %ontra%tors Clodualdo
Ho/illa, Juliana de los $ngeles and Manuel Mas%ardo,
were %harged with forty-si4 28<3 %ounts of Estafa thru
;alsifi%ation of 0u&li% Co%u/ents1
2"3 Bolando Mangu&at, $ngelina Es%ano, Chief Begional
$%%ountant and Begional ;inan%e ffi%er, res)e%tively,
of the >th Aighway Begional ffi%e in Ce&u City9
=ilfredo Monte, Posi/o S. Cinsay, Cresen%ia D. Tan,
Isaa% T. MananFuil, Trinidad T. Manloloyo, $urelio M. de
la 0ena Eugenio S. Ma%han, Ediltrudes Wilat Jose B.
5eloso, Begino Junawan $rsenio 0a'ilit Juan
Su/agang, ;ran%is%o Hanhinhin and Gr&ano $r%a/o,
the Civil Engineer, Senior Civil Engineer, $%%ountant I,
Aighway Cistri%t Engineer II, $ssistant Aighway Cistri%t
Engineer, $d/inistrative ffi%er, 0ro)erty Custodian,
$uditing $ide $uditor, $uditing E4a/iner, Senior Civil
Engineer, Crew/an and $uditing $ide res)e%tively, of
the SiFui7or Aighway Engineering Cistri%t 2SAEC3 in
Cri/. Cases !os. *+>,*+@:, and
2*3 Manuel de 5eyra, Begional Cire%tor, Basilisa Halwan
Budget ffi%er, Matilde Ja&alde, Su)ervising $%%ounting
Cler', Josefina Duna, $%%ountant II, Jose Sayson,
Budget E4a/iner, of the Ce)art/ent of 0u&li% =or's
and Aighways, Begion 5II, Ce&u City9 Deonila del
Bosario, Chief, ;inan%e and Manage/ent Servi%e,
Engra%ia Es%o&ar, Chief $%%ountant, $&elardo Cardona,
$sst. Chief $%%ountant and Deonardo Torde%illa,
Su)ervising $%%ountant, of the Ce)art/ent of 0u&li%
=or's and Aighways, Central ffi%e, Manila, in Cri/.
Cases !os. ,,*,-,,8: [Ce%ision, )). >-?9 Rollo, )). ,>-
,?.]
0etitioner, together with a%%used Mangu&at, MananFuil,
Monte, Ma%han Tan, Hanhinhin, Manloloyo, de la 0eTa
Cinsay, Wilat Ju/awan, 0a'ilit $r%a/o, Su/agang and
Ho/illa were found guilty as %o-)rin%i)als and
senten%ed in ea%h of twenty-three 2*,3 %ases 2Cri/.
Cases !os. *+>,-*+@:3 to suffer i/)rison/ent of fro/
four 283 years, two 2*3 /onths and one 2"3 day of prision
correccional, as /ini/u/, to ten 2"+3 years of prision
mayor, as /a4i/u/, to )ay a fine of ne Thousand ;ive
Aundred 0esos 20",:++.++3 in ea%h %ase and to
inde/nify the govern/ent in a/ounts varying fro/ %ase
to %ase.
Those found guilty filed se)arate /otions for
re%onsideration &ut these were denied &y the
Sandigan&ayan. Thus, this )etition &y Jose B. 5eloso.
0etitioner does not dis)ute the finding that there were
ano/alies in the SiFui7or Aighway Engineering Cistri%t
2SAEC3 !either does he dis)ute the e4isten%e of a
%ons)ira%y &etween the su))liers and %ertain
govern/ent offi%ials and e/)loyees. =hat he
vehe/ently denies is the Sandigan&ayanJs finding that
he was a %ons)irator.
Thus, for )ur)oses of this )etition we will no longer
inFuire into whether or not the offenses %harged were in
fa%t %o//itted, &ut shall li/it ourselves to the issue of
whether or not )etitionerJs )arti%i)ation in the %ri/inal
%ons)ira%y has &een esta&lished &eyond reasona&le
dou&t.
The Sandigan&ayan found that )etitionerJs lia&ility, as
Cistri%t $uditor, e/anated fro/ his irregular and
i/)ro)er )ro%essing, )re-audit and a))roval of all the
general vou%hers and %he%'s in Fuestion, &ased on
irregular or fa'e su))orting )a)ers. The graft %ourt found
that he also signed and )assed in audit the vou%hers
and %he%'s 'nowing that these were illegally funded and
i/)ro)erly %harged to E;und ?"-8++E 2the )rior yearJs
o&ligations3, and engaged in Es)litting,E so that he would
&e the one to )ass the vou%hers in audit when su%h
should have &een forwarded to the Co//ission on $udit
2C$3 Begional $uditor for a%tion or review, [Ce%ision, ).
?,9 Rollo, ). "",.]
The Sandigan&ayan des%ri&ed the details of the
Es)littingE resorted to as follows1
;ifthly, &ased on the foregoing, the Court finds that the
a%%used distri%t offi%ials resorted to Es)littingE of BSEs,
0s 20ur%hase rders3 and H5s in order to avoid
review or a))roval &y higher authorities. Gnder C$
Cir%ular !o. ><-8", dated July ,+, "@><, in relation to
C$ Cir%ular !o. "<-"<$, dated ;e&ruary "+, "@><, of
whi%h the Court ta'es 7udi%ial noti%e, it is )rovided that
EBesident $uditors of &ureaus, offi%es and agen%ies of
the !ational Hovern/ent in Metro)olitan Manila, as well
as other $uditors , for Cistri%t6City Aighway, 0u&li%
=or's6S%hool, State Colleges and Gniversities, Military
$reas and Pones outside Metro)olitan Manila, are
authori.ed to %ountersign %he%'s and warrants in
a/ounts not e4%eeding 0:+,+++.++ in ea%h %aseE
2E/)hasis su))lied3. ConseFuently, all H5s in a/ounts
e4%eeding 0:+,+++.++ /ust have to &e )ro%essed, )re-
audited and a))roved &y the Begional $uditor of the
C$, instead of 2SAEC3 resident auditor Jose 5eloso,
one of the a%%used herein.
Thus, in the very wording of C$ Cir%ular !o. ><-8", Eto
avoid a%tion, review or a))roval &y higher authoritiesE,
the distri%t offi%ials herein resorted to the s)litting of the
BSEs, 0s and the H5s involved in the fa'e D$$ dated
%to&er <, "@>> in the a/ount of 0*++,+++.++. Said
D$$ evolved into three 2,3 se)arate transa%tions
involving the a/ounts of 08?,8?+.++, 08?,8?+.++ and
08?,"?@.<+ as eviden%ed &y three H5s dated Ce%e/&er
*", Ce%e/&er *" and Ce%e/&er *,, "@>>, res)e%tively.
therwise, if su%h transa%tions were to &e reviewed and
)re-audited &y the Begional 2C$3 $uditor, who /ight
&e averse to 7oining the %ons)ira%y, then the H5s and
su))orting )a)ers /ay &e found to &e the result of 2"3
ine4istent )rogra/s of wor', 2*3 illegal funding, 2,3
irregular or non-e4istent &idding, 283 fi%titious deliveries
and ins)e%tion, and other ano/alies. ConseFuently, the
Court %onsiders su%h Es)littingE as an integral and6or
essential ele/ent or lin' in the %ons)ira%y to defraud the
Hovern/ent inas/u%h as su%h )ra%ti%es was 2sic3
%ons%iously and deli&erately resorted to in order to hide
the /assive and stu)efying /isa))ro)riations &eing
underta'en &y the a%%used herein. [Ce%ision, )). >:-
><9 Rollo, )). "+:-"+<9 unders%oring in the original.
But )etitioner vigorously argues his inno%en%e, alleging
his non- )arti%i)ation in the %ons)ira%y and his good faith
in atta%hing his signature to the do%u/ents involved. Ae
%ontends that it has not &een shown that he falsified any
of the do%u/ents whi%h the Sandigan&ayan found to &e
falsifi%ations.
Thus, while he ad/its that he signed the general
vou%hers, he %lai/s that his a%t of doing so was /erely
/inisterial %onsidering that all the su))orting )a)ers and
do%u/ents were su&/itted and atta%hed to the
vou%hers. Ae %ontinues that he %ould not Fuestion the
vera%ity of the )re)ared Detters of $dvi%e of $llot/ents
2D$$3 and Su&-$dvi%es of Cash Cis&urse/ent Ceiling
2S$CCC3 sin%e these do%u/ents, with the )rogra/ of
wor' a%%o/)anying the/ and other ins)e%tion re)orts,
gave hi/ the go-signal to )ass the/ in audit.
Thus, he %lai/s that the vou%hers would have &een
%leared even without his signature as they were
su))orted &y the reFuired do%u/ents and %ertifi%ations.
This argu/ent %annot &e given /u%h weight. It has
already &een re7e%ted &y the Sandigan&ayan in this
wise1
444 444 444
!one of the a%%used regional and
distri%t offi%ials %an %lai/ good faith or
relian%e on the regularity of the
do%u/ents )ro%essed and signed &y
the/ or on the )resu/)tion that their
su&ordinates and6or su)eriors have
a%ted regularly, sin%e &y the very nature
of their duties, they should have 'nown
or reali.ed &y /ere s%rutiny of the
do%u/ents or &y the e4er%ise of
ordinary diligen%e that there were
irregularities or ano/alies refle%ted on
their very fa%es. This is si/)lified &y
several %ir%u/stan%es )atent on said
do%u/ents, to wit, the irregular funding
of the D$$s the i/)ro)er %harging to
)rior yearJs o&ligations9 the unauthori.ed
and6or i/)ro)er a%tion &y offi%ials on the
su))orting do%u/ents9 the la%' or
in%o/)leteness of su))orting
do%u/ents, and the s)litting of
)ay/ents. !either %an the a%%used-
%ontra%tors %lai/ good faith li'ewise and
relian%e on the a%tuations of their %o-
a%%used )u&li% offi%ials sin%e they 'new
fully well that their )arti%i)ation in the
transa%tions under Fuestion were only
/a'e &elieve or a far%e and that their
na/es, &usiness standing and
signatures were only utili.ed, with their
whole-hearted %oo)eration, in see'ing
the %onsu//ation of their )lans to
defraud the govern/ent.
444 444 444
[Ce%ision, )). ?:-?<9 Rollo, )). "":-""<9
e/)hasis su))lied]
Clearly, given his a%ts and o/issions in auditing the
do%u/ents, whi%h related not only to one &ut to several
transa%tions, )etitionerJs )arti%i)ation in the %ons)ira%y
to defraud the Hovern/ent has &een esta&lished
&eyond reasona&le dou&t. It is well-settled that there
need not &e dire%t eviden%e of the e4isten%e and details
of the %ons)ira%y [0eo)le v. Bo/ualde., :> 0hil. "8?
2"@,*39 0eo)le v. Cadag, H.B. !o. D-",?,+, May ,",
"@<", * SCB$ ,??.] Di'e the guilt of the individual
offender, the e4isten%e of a %ons)ira%y and a
%ons)iratorJs )arti%i)ation /ay &e esta&lished through
%ir%u/stantial eviden%e [$bid.]
0etitioner, as resident auditor of the SAEC was tas'ed
with ensuring the regularity of all transa%tions that are
su&7e%t to his review. In these %ases, he had &efore hi/,
for his signature, vou%hers that were )atently irregular,
su))orted &y si/ilarly irregularly issued do%u/ents,
whi%h he should not have )assed in audit. Instead of
refusing to affi4 his signature and re)orting the
irregularities to his su)eriors, as he was duty &ound to
do, he turned a &lind eye and signed the do%u/ents,
%o/)leting the )ro%ess that led to the %onsu//ation of
the %ri/e.
Ae %an not rely on the e4%use that his su&ordinates have
already initialed the do%u/ents for his signature
&e%ause his fun%tion, as their su)erior, is to %he%' on
their wor' and to ensure that they do it %orre%tly.
therwise, if his signature was a su)erfluity, )etitioner
would &e serving no useful )ur)ose in o%%u)ying his
)osition of resident auditor.
The nu/&er of transa%tions in whi%h )etitioner is
involved and the /agnitude of the a/ount involved also
)revent a reasona&le /ind fro/ a%%e)ting the
)ro)osition that )etitioner was /erely %areless or
negligent in the )erfor/an%e of his fun%tions Ae )assed
in audit twenty-four 2*83 general vou%hers whi%h resulted
in the issuan%e of twenty-three 2*,3 %he%'s a/ounting to
!ine Aundred Eighty-Two Thousand Two Aundred
Seven 0esos and Si4ty Centavos 20@?*,*+>.<+3.iCtCc;
aDsl Moreover, the irregularities were not of the 'ind that
%ould have gone unnoti%ed &y the trained eyes of an
auditor.
;inally, it /ay &e that )etitioner has already &een
ad/inistratively )enali.ed for his /alfeasan%e, as in fa%t
he was sus)ended for one 2"3 year without )ay [$nne4
E$E of the Be)ly9 Rollo, )). "?@- *++], &ut su%h will not
&ar his %onvi%tion under the general )enal laws.
$d/inistrative lia&ility is se)arate and distin%t fro/ )enal
lia&ility.
In su/, no reversi&le error was %o//itted &y the
Sandigan&ayan in ad7udging )etitioner guilty &eyond
reasona&le dou&t of the %ri/e %harged.
=AEBE;BE, the )etition is here&y CE!IEC, and the
de%ision of the Sandigan&ayan, insofar as it relates to
)etitioner, is $;;IBMEC.
S BCEBEC.
PRESIDENTIAL DECREE No. 1,# A-0(B , 1#,0
INCREASING THE PENALTY FOR CERTAIN FORMS
OF SWINDLING OR ESTAFA
=AEBE$S, there is an u)surge in the %o//ission of
swindling and other for/s of frauds in rural &an's,
%oo)eratives, Esa/ahang nayon 2s3E, and far/ersJ
asso%iations or %or)orations6asso%iations o)erating on
funds soli%ited fro/ the general )u&li%9
=AEBE$S, su%h defraudation or /isa))ro)riation of
funds %ontri&uted &y sto%'holders or /e/&ers of su%h
rural &an's, %oo)eratives, Esa/ahang nayon2s3E, or
far/ersJ asso%iations, or of funds soli%ited &y
%or)orations6asso%iations fro/ the general )u&li%,
erodes the %onfiden%e of the )u&li% in the &an'ing and
%oo)erative syste/, %ontravenes the )u&li% interest, and
%onstitutes e%ono/i% sa&otage that threatens the
sta&ility of the nation9
=AEBE$S, it is i/)erative that the resurgen%e of said
%ri/es &e %he%'ed, or at least /ini/i.ed, &y i/)osing
%a)ital )unish/ent on %ertain for/s of swindling and
other frauds involving rural &an's, %oo)eratives,
Esa/ahang nayon2s3E, far/ersJ asso%iations or
%or)orations6asso%iations o)erating on funds soli%ited
fro/ the general )u&li%9
!=, TAEBE;BE, I, ;EBCI!$!C E. M$BCS,
0resident of the 0hili))ines, &y virtue of the )owers
vested in /e &y the Constitution, do here&y de%ree and
order as follows1
S%&'(o) 1. $ny )erson or )ersons who shall %o//it
estafa or other for/s of swindling as defined in $rti%le
,": and ,"< of the Bevised 0enal Code, as a/ended,
shall &e )unished &y life i/)rison/ent to death if the
swindling 2estafa3 is %o//itted &y a syndi%ate %onsisting
of five or /ore )ersons for/ed with the intention of
%arrying out the unlawful or illegal a%t, transa%tion,
enter)rise or s%he/e, and the defraudation results in the
/isa))ro)riation of /oney %ontri&uted &y sto%'holders,
or /e/&ers of rural &an's, %oo)erative, Esa/ahang
nayon2s3E, or far/ers asso%iation, or of funds soli%ited &y
%or)orations6asso%iations fro/ the general )u&li%.
=hen not %o//itted &y a syndi%ate as a&ove defined,
the )enalty i/)osa&le shall &e re%lusion te/)oral to
re%lusion )er)etua if the a/ount of the fraud e4%eeds
"++,+++ )esos.
S%&'(o) !. This de%ree shall ta'e effe%t i//ediately.
C!E in the City of Manila, this <th day of $)ril, in the
year of ur Dord, nineteen hundred and eighty.