1

ContentsBurden of Proof................................................................................................................................................................................................1

People vs Picardal...................................................................................................................................................................................... 1

People vs Bio................................................................................................................................................................................................ 5

People vs. Tempongko.......................................................................................................................................................................... 11

Resort vs. DBP...........................................................................................................................................................................................15

Judicial Notice................................................................................................................................................................................................ 24

Suplico vs NEDA....................................................................................................................................................................................... 24

Estioca vs People..................................................................................................................................................................................... 32

SJS vs. Hon. Atienza.................................................................................................................................................................................44

Judicial Admission........................................................................................................................................................................................68

Cuenco vs Talisay.................................................................................................................................................................................... 68

Evidence Cases

Burden of Proof

People vs Picardal

SECOND DIVISION

G.R. No. 72936 June 18, 1987

THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs.ROLANDO PICARDAL y DEL MONTE and ROMEO PICARDAL y DEL MONTE, accused-appellants.

PARAS, J.:

This is an appeal from the decision of the Regional Trial Court * of Quezon City, Branch XCVIII, promulgated on October 8, 1985 (Rollo, p. 36) convicting the accused-appellants of the crime of murder, the decretal part of said decision reading:

WHEREFORE, the Court finds the accused, ROLANDO PICARDAL y DEL MONTE and ROMEO PICARDAL y DEL MONTE, GUILTY beyond reasonable doubt of the crime of murder as charged in the information and hereby sentences each to the penalty of reclusion perpetua. Both accused are ordered to indemnify, jointly and severally, the heirs of Jose Santiago y Quiapo in the sum of P11,500.00 as actual or compensatory damages and P30,000.00 as moral damages, without subsidiary imprisonment in case of insolvency; and to pay the proportionate costs. (Rollo, p. 4 1).

Accused-appellants were indicted for Murder at the abovementioned court in an information (Rollo, p. 5) filed by the Assistant City Fiscal, alleging:

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That on or about the 30th day of December, 1982, in Quezon City, Philippines, the above-named accused, conspiring together, confederating with and mutually helping one another, with intent to kill, with evident premeditation and treachery, did, then and there, wilfully, unlawfully and feloniously attack, assault and employ personal violence upon the person of one JOSE SANTIAGO y QUIAPO, by then and there stabbing with one (1) double-bladed deadly weapon in the different parts of the body, inflicting upon him eight (8) serious and mortal wounds which was the direct and immediate cause of his death, to the damage and prejudice of the heirs of the victim in such amount as maybe awarded to them under the provisions of the Civil Code.

The facts as found by the trial court are as follows:

In the evening of December 30, 1982 Diosdada Francisco and her husband Jose Santiago y Quiapo went to the residence of the Barangay Captain of Baesa, Quezon City to ask him to settle a domestic squabble between the spouses. After the Barangay Captain succeeded in ironing out their differences, they decided to go home but since the barangay tanods were having a sort of merrymaking at the residence of the Barangay Captain because of the induction of the newly elected officers of the barangay, they stayed for a while to converse with the barangay tanods. Jose Santiago was prevailed upon to take some beer. Thereafter, they left the place to go home, walking along Howmart Road, but on their way, almost near their house, three men-Rolando Picardal, Romeo Picardal and Alfredo Picardal alias Romeo del Monte-without any provocation blocked their way. Rolando Picardal immediately put an arm on the shoulder of Jose Santiago and at the same time stabbed him. Romeo Picardal, on the other hand, went around Jose Santiago and held the latter's hands behind, forcing the latter to face Rolando Picardal who continued to stab the victim several times with a double-bladed weapon measuring about one (1) foot, including the handle. In her confusion Diosdada Francisco kept on shouting for help while she ran back to the house of the Barrio Captain, about 200 meters away from the scene of the stabbing incident. Barangay tanods responded to her call for assistance but when they arrived at the scene of the crime, both Romeo Picardal and Rolando Picardal were no longer there. They gave chase to the two suspects and caught Rolando Picardal still holding the knife and shouting to his brother Romeo, to continue running and escape. Romeo Picardal was apprehended at this house. Both men were brought to the police precinct by the apprehending barangay men where they gave their separate statements. (Decision, Criminal Case No. Q-23052, Rollo, pp. 54-59; Appellee's Brief, pp. 1-4).

The victim's death was attributed to Hemorrhage acute, severe, secondary to stab wounds (Autopsy Report; Exhibits, p. 7).

Among other things, the evidence presented by the prosecution at the hearing include: (1) the testimonies of: (a) Diosdada Francisco-Santiago, the sole eye witness of the prosecution; (b) Patrolman Melencio Lim; (c) Benjamin de Castro, a barangay tanod; (d) Domingo Sus, team leader of the barangay tanod; and (e) Dr. Nieto Salvador, a medico-legal officer of the National Bureau of Investigation; (2) documentary evidence such as: (a) autopsy report; (b) diagram showing where the stab wounds were located; (c) salaysay of Diosdada Francisco-Santiago; (d) Pinagsamang Salaysay ni Benjamin de Castro and Manuel K. de la Cruz; and (3) Physical evidence the fatal weapon used in stabbing the victim.

The trial court finding that the prosecution has established with moral certainty that the deceased was a victim of conspiracy between brothers Rolando and Romeo Picardal who stabbed the former to death, convicted both accused of murder as charged and sentenced them to the penalty of reclusion perpetua. (Decision, Criminal Case No. Q-23052; Rollo, p. 41).

Both of them appealed. In an Order dated October 9, 1985, the appeal was approved by the trial court and the entire record of the case was forwarded and received by the Court on December 4, 1985 (Rollo, p. 1).

In the resolution of January 22, 1986 the Court ACCEPTED the appeal (Rollo, p. 42).

The brief for the Appellants was filed with the Court on June 26, 1986 (Rollo, p. 53) and admitted by the Court in its Resolution dated August 4, 1986 (Rollo, p. 60). The Brief for the Appellee was filed with the Court on October 9, 1986 (Rollo, p. 64).

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As of this date the Reply Brief has not yet been received by this Court.

No Reply Brief was filed.

ASSIGNMENT OF ERRORS

I

THE COURT A QUO ERRED IN FAVORABLY CONSIDERING THE TESTIMONIES OF THE PROSECUTION WITNESSES NOTWITHSTANDING THAT THE SAME ARE NOT CREDIBLE AND NOT IN ACCORD WITH THE ORDINARY COURSE OF THINGS.

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THE COURT A QUO ERRED IN CONVICTING THE ACCUSED NOTWITHSTANDING THAT THEIR GUILT HAS NOT BEEN PROVED BEYOND REASONABLE DOUBT.

The appeal is devoid of merit.

The accused Rolando Picardal pleaded self-defense. It is a well-established principle that where the accused has admitted that he is the author of the death of the deceased, it is incumbent upon the appellant, to avoid criminal liability, to prove this justifying circumstance claimed by himself — defense — to the satisfaction of the court. To do so he must rely on the strength of his own evidence and not on the weakness of the prosecution, for even if that were weak it cannot be disbelieved after the accused himself has admitted the killing. (People v. Ansoyon, 75 Phil. 772 [1946]; People v. Silang Cruz, 53 Phil. 635 [1929]). Otherwise stated, the burden of proof is shifted from the prosecution to the accused and it is the duty of the latter to establish self-defense by evidence clear and convincing. (People v. Valencia, 133 SCRA 82 [1984]; People v. Urbistondo, et al., 132 SCRA 268 [1984]; People v. Pasco, Jr., 137 SCRA 137 [1985]).

Thus, self-defense, being an affirmative allegation, it is incumbent upon the accused to prove clearly and sufficiently its elements, otherwise the conviction of the accused is imperative. (People v. Plandez, 132 SCRA 69[1984]).

The three requisites of self-defense and defense of relatives and strangers as stated in par. 1 of Article II of the Revised Penal Code are as follows: (1) unlawful aggression; (2) reasonable necessity of the means employed to prevent or repeal it; and (3) lack of sufficient provocation on the part of the person defending himself.

In the case at bar, the theory of self-defense will not prosper where clearly, the first requisite thereof which is unlawful aggression (People v. Valencia, supra) is not even present.

For one thing, the prosecution witness testified that appellant Rolando without any provocation, stabbed the victim with a double-bladed knife (Hearing, June 29, 1983, pp-3-5). In contrast, the accused would have the court believe that it was the victim who was the unlawful aggressor. He testified that when he went out to buy viand at Cecil Canteen, he was hit on the head by the victim with a piece of wood but he was able to escape from the latter and his group. However, thirty (30) minutes later, he returned to get the viand from his friend. It was then that he met again the victim and his group who were about to hit him again. As the victim was about to stab him, he allegedly got hold of a sharp object and hit the victim instead.

The absence of unlawful aggression is readily apparent from the fact that Rolando by his own testimony had already escaped from the supposed aggression when thirty minutes later, he returned. The incredibility of Rolando's testimony was correctly observed by the trial court which refused to give credence to the fact that the accused would return to the scene of the incident unless he was really looking for trouble. (Decision, Criminal Case No. 23052, Rollo, p. 57).

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No less important is the absence of evidence that the deceased was in fact armed at the time of the incident, except for the uncorroborated version of the accused Rolando Picardal that the victim had a double-bladed weapon which he was able to wrest away and used in continuously stabbing the latter eight (8) times. (Hearing, January 17, 1985; TSN, pp. 11-12).

However, as to how it was possible for him to do so with four (4) other companions of the victim allegedly encircling him, appears incredible especially considering the fact that the accused who claims to be the victim of an aggression was unscatched while his adversary sustained serious wounds whose nature and location belie the claim of self-defense. (People v. Garachico, 113 SCRA 131 [1982]; People v. Ganut, 118 SCRA 35 [1982]).

On the other hand, the defense put up by appellant Romeo Picardal is alibi, claiming that it was impossible for him to participate in the commission of the offense because at or about the time of the incident in question he was inside his house sleeping. (Hearing of February 20, 1985, TSN, p. 2).

Appellant Romeo Picardal and his co-appellant were positively Identified by the wife of the victim, Mrs. Diosdada Francisco Santiago as the assailants (Hearing of June 29, 1983, TSN, pp. 3-4).

In a long line of precedents, it has been established that alibi is worthless in the face of positive Identification by the prosecution witness. (People v. Martinez, 127 SCRA 260; People v. Pueblas, 127 SCRA 746; People v. Mesias, Jr., 127 SCRA 792; People v. Davies, 131 SCRA 286; People v. Tajon, 128 SCRA 656; People v. Laganzon, 129 SCRA 333; People v. Munar 131 SCRA 44; People v. Campesino, 131 SCRA 56). In fact the Supreme Court strongly stated in People v. Plandez (132 SCRA 70 [1984]) that it is generally accepted "that alibi — the much abused sanctuary of felons and which is considered as an argument with a bad reputation, cannot prevail over the positive testimonies of the prosecution witnesses. It is, to say the least, the weakest defense and must be taken with caution being easily fabricated."

In the case at bar where it was established at the hearing that the scene of the crime was within the vicinity of the residence of both the appellants and the victim who lived in the same house in Howmart Road, Baesa, Quezon City (Hearing of June 29, 1983, TSN, p. 5) in adjacent rooms with only a partition between them (Hearing of February 20, 1985, TSN, pp. 9-10), there is even less likelihood that alibi can overcome the testimony of the prosecution witness who under the circumstances knew the accused personally and who had no reason nor evil motive to falsely impute to the accused the commission of such a serious offense as murder. (People v. Tiengco, 133 SCRA 291 [1984]; People v. Arbois, 138 SCRA 24 [1985]).

In the same manner, it has been repeatedly held that alibi is not a proper defense where it was not impossible for the accused to be at the scene of the crime. (People v. Atanacio, 128 SCRA 22; People v. Pizarro, 131 SCRA 286 [1984]; People v. Urgel, 134 SCRA 483 [1985]).

Finally, there appears to be no reason to discredit the testimony of Diosdada Santiago, the victim's wife which as found by the trial court was a clear, positive and affirmative declaration, depicting a full account of what actually transpired. Her narration is fully corroborated by the medical findings of the NBI doctor who conducted the autopsy on the corpse of the victim. (Hearing of October 31, 1984, TSN, pp. 262-266).

She was consistent in her statement to the police (Exhibit "A") and in her testimony in court (Hearing of June 29, 1983, TSN pp. 3-11) as to how her husband was stabbed to death and how she shouted and ran back to the house of the barangay captain for help. Her testimony here was corroborated by the testimony of barangay tanod Benjamin de Castro who with the barangay tanods went after the accused Rolando Picardal whom they found being mauled by the barrio people for having stabbed the victim. They found him prostrate on the ground with a double bladed weapon six inches long including the handle beside him (Hearing of January 25, 1984, TSN, pp. 3-5). The description of that weapon fits the description of the weapon described by the victim's wife which was used in the stabbing of her husband by the accused.

As above stated Diosdada Santiago Identified the assailants of her husband as Rolando and Romeo Picardal (Hearing of June 29, 1983, TSN p. 4). Her Identification was positive and categorical and there can be no

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doubt as to her ability and opportunity to make the correct Identification as the place of the incident was well lighted by an electric bulb in an electric post 4 to 5 meters away and by the lights of the houses along the road 2 meters away. (Ibid., p. 5).

Likewise, Diosdada Santiago could not have been mistaken as to the Identity of both appellants who lived in the same house occupied by her husband and herself with only a partition to separate the quarters.

It is also to be noted that Diosdada Santiago immediately revealed her husband's assailants to the barangay tanods to whom she ran for help and on the same night of the incident she immediately executed a sworn statement before Pat. Melencio Lim of the La Loma Substation, Quezon City Police where she Identified both appellants as the persons responsible for the death of her husband. (Hearing of June 29, 1983, TSN pp 8-9; Hearing of October 25, 1983, TSN, pp. 3-4). Under such circumstances, the Court has ruled that said actuations of the wife make her testimony credible. (People v. Pueblas, 127 SCRA 754 [1984]).

It is claimed that prosecution witness Santiago's testimony that appellant Romeo Picardal was apprehended in the latter's house after the stabbing incident is not in "consonance with human experience." The defense contends that if appellant Romeo Picardal had also participated in the commission of the offense, it would be more logical for him to take flight to avoid arrest instead of taking refuge in his own home (Appellant's Brief, p. 5).

It will be recalled that the scene of the crime is in the vicinity of his house, so that when he was being pursued by the barangay tanods he had no other alternative but to take refuge therein. In fact, when he was found by the barangay tanods in his room, he was not sleeping peacefully but was perspiring and gasping for breath " hingal kabayo ", (Hearing of April 11, 1984, TSN, p. 5). Had he been innocent, his normal reaction would have been not to flee from the scene of the crime but to offer assistance to the victim.

The rule is well settled that the conclusions of fact of the trial judge are entitled to great weight. (People v. Atanacio, 128 SCRA 22 [1984]) and that his findings on the credibility of witnesses cannot be disturbed on appeal for he was in a position to ascertain which of the witnesses were more credible. (People v. De Leon, 128 SCRA 121; People v. Olalia, 128 SCRA 139; People v. Mesias, Jr., 127 SCRA 746; People v. Cabanlig 128 SCRA 230).

PREMISES CONSIDERED, the assailed decision is hereby AFFIRMED.

SO ORDERED.

People vs Bio

SECOND DIVISION

G.R. No. L-68575 June 6, 1986

PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs.BENITO GO BIO, JR., defendant-appellant.

GUTIERREZ, JR., J.:

Benito Go Bio, Jr,, was charged with the crime of estafa punishable under Article 315 paragraph 2(d) of the Revised Penal Code, as amended. The crime was allegedlly committed as follows:

That on or about and sometime in the month of May, 1979, in the City of Olongapo, Philippines, and within the jurisdiction of this Honorable Court, the abovenamed accused, with deceit and intent to defraud and well

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knowing that he had no funds in the bank, did then and there, wilfully, unlawfully and feloniously issue and make out Bank of the Philippine Islands check No. 357728 postdated June 15, 1979 in the sum of Two Hundred Twenty 'Thousand (P220,000.00) Pesos, Philippine Currency in favor of Purita Tiu, in exchange for cash received simultaneously with the issuance of said check; that upon presentment for encashment of the aforesaid check with the Bank of the Philippine Islands the same was dishonored for reason of insufficiency of funds and despite repeated demands upon the accused to make good the aforementioned check, he refused and failed to make payments, to the damage and prejudice of Purita Tiu in the aforementioned sum of P220,000.00.

Upon arraignment, Go Bio pleaded "NOT GUILTY.

The evidence for the prosecution and accepted by the trial court as basis for the judgment of conviction was summarized by the trial court as follows:

Sometime in May 1979, complainant Purita Tiu and her sister Filipinas Tan went to the house of their mother Go Cun at Quezon City upon their mother's request. They met Benito Go Bio, Jr., there who was introduced to them by their mother as the son of the late Benito Go Bio, Sr., a rich businessman, and the owner of the Occidental Hardware. That his wife is also the daughter of the owner of Go Soc and Sons in Manila. After the introductions, Mrs. Go Cun told her daughters that accused Benito Go Bio was encashing his check, but they informed their mother that their money in the amount of P420,000.00 which was earmarked for the construction of their house in Greenhills, San Juan, Metro Manila was in Olongapo City. Because of the plea of the accused and his assurances to the two sisters and their mother that he will have money in one month time from the date of the encashing of his checks, Purita and Filipinas assented to his request and representations. Benito Go Bio, Jr. did not leave the house of Go Cun that day until he was able to obtain a promise from Purita Tiu and Filipinas Tan to encash his checks in Olongapo City on May 15, 1979. Purita Tiu agreed to encash accused check of P220,000.00 and Filipinas promised P200,000.00.

On May 15, 1979 as agreed upon, accused Benito Go Bio, Jr. went to Purita Tiu's residence at No. 70 Gordon Avenue, Olongapo City. He gave his check of P220,000.00 (Exhibit "A") to complainant and after receiving the cash amount of P220,000.00 from her, the accused affixed his signature on the check (Exhibit "A-1 "). The check issued by the accused was drawn against the Bank of Philippine Islands, Check No. 357728 dated June 15, 1979 (Exhibit "A"). This transaction between the complainant and the accused was done in the presence of Eusebio Miraflor and Filipinas Tan.

On June 15, 1979, when the check fell due, complainant called up Benito Go Bio, Jr. on the phone and the accused requested her that his check be deposited with the bank on July 12, 1979 because he was expecting to collect P4,000,000.00 from the Silahis Hotel. With this request of the accused, complainant deposited Exhibit 'A' on July 12, 1979 with the Metro Bank, Binondo Branch soon after opening a new account thereat. However, the check was returned on July 13, 1979 by the bank with a return slip (Exhibit "B-1 ") containing the notation 'PNC' or present next clearing, After receiving the return slip from the Metro Bank, complainant made several demands from the accused to make good his check and notwithstanding several written requests for extension (Exhibits "C", "D", "E" and "F"), accused failed to pay his obligation to the complainant. The last requested extension was on September 17, 1979, but without waiting for September 19, the accused went to the residence of the complainant in Olongapo City on September 15 and informed her that she could finally deposit the check on September 20, 1979. On September 20, 1979, Purita Tiu re-deposited the check as instructed by the accused and was given a deposit slip (Exhibit "G"). When she went to the same Metro Bank, Binondo Branch on September 24, 1979, again she was issued a return slip from the Bank of the Philippine Islands which stated 'Present Next Clearing ' (Exhibit "G-3"). Thereafter, the complainant called the accused by phone in his office at the Occidental Hardware and complained why the check bounced again notwithstanding his instruction to deposit the same. Again, accused asked for a final chance to re-deposit the check on September 26, 1979. This time, the Bank of the Philippine Islands had already placed a notation in the return slip as having been drawn against insufficient funds (Exhibit "H-2"), and as a result thereof, she was required to pay P50.00 as penalty charge by the bank.

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Because of the accused's actuations and failure to pay and fund his check, the complainant already fed up took the appropriate action to file the case before the Fiscal's Office.

Go Bio denied the charge. According to him the check which forms the basis of the prosecution was one of three (3) checks delivered by him to Go Cun, mother of the complainant, to pay his pre-existing obligation. The defense evidence was summarized by the trial court as follows:

... [A]ccused Benito Go Bio, Jr., testified that he is a businessman engaged in hardware business, merchandising and trading. He came to know Go Cun, the mother of Purita Tiu and Filipinas Tan thru Wiliam Tan, his sales manager at the Occidental Hardware. He borrowed money from Go Cun in 1978 but because of business failure and reverses, he was not able to pay the sum total of the obligation, principal and interest, which amounted to P670,000.00. The principal obligation approximately totalled P420,000.00. That sometime in May, 1979, Mrs. Go Cun together with Purita Tiu came Lo see him in his office in Manila to find out what happened to his delay in the payment of the interest. He was introduced to Purita Tiu on May 15, 1979, when Go Cun and Purita Tiu came over to his office, and William Tan, the branch manager of the accused informed them that he (accused) will settle his obligation which amounted to P6 70,000.00. However, Go Cun, the mother of the complainant requested that the sum of P670,000.00 be broken down into three separate checks, as follows: to Go Cun-P250,000.00; P220,000.00 payable to Purita Tiu and the other check in the amount of P200,000.00-payable to Filipinas Tan. The three checks as stated were prepared and delivered by the accused to Go Cun in his office. The accused requested that the checks be postdated one month from May 15, 1979, with the further request that on the due date of the checks the accused will call Go Cun first to inform her whether she will deposit the check or not. Accused asked for several extensions of time to make good his debts; he denied having any transaction or business dealings with the complainant Purita Tiu on May 15, 1979, but maintained that his business dealings was only with Go Cun, the mother of the complainant. However, on one occasion, particularly September 1979, the accused dropped by at the house of Purita Tiu in Olongapo City after he came from Iba, Zambales, to ask for consideration to extend his obligation. Purita Tiu granted his request for extension but asked him to prepare a document that he will make good his promise (Exhibit "F")

After trial, Go Bio was found guilty of the crime of estafa. The dispositive portion of the trial court's decision reads:

WHEREFORE, finding the accused Benito Go Bio, Jr. guilty as charged under Article 215 of the Revised Penal Code, par. 2(d) as amended by Republic Act 4885 and Presidential Decree 818, f reclusion perpetuthe Court hereby sentences him to suffer the penalty oa but in no case to exceed thirty (30) years imprisonment; to pay private complainant Purita Tiu the amount of P220,000.00 with legal rate of interest computed from May 1979 with subsidiary imprisonment in case of failure to do so; and, to pay the costs of this proceedings.

In this appeal, appellant Go Bio assigns the following alleged errors of the trial court:

I. THE TRIAL COURT ERRED IN FINDING THAT IT WAS AT #70 GORDON DRIVE, OLONGAPO CITY THAT THE ACCUSED-APPELLANT ENCASHED HIS BPI CHECK NO. 357728, POSTDATED JUNE 15, 1979, FROM PURITA TIU.

II. THE TRIAL COURT ERRED IN NOT HOLDING THAT THE THREE (3) CHECKS INCLUDING CHECK NUMBER 357728 WERE ALL PREPARED AND DELIVERED BY BENITO GO BIO JR., THROUGH WILLIAM TAN AT THE RESIDENCE OF GO CUN IN QUEZON CITY.

III. THE TRIAL COURT ERRED IN GIVING CREDENCE TO THE LONE TESTIMONY OF THE PROSECUTION WITNESS EUSEBIA MIRAFLOR, AS TO THE NATURE OF THE ENCASHMENT OF BPI CHECK NUMBER 357728.

IV. THE TRIAL COURT ERRED WHEN IT AFFIRMED THE CONTENTION OF THE PROSECUTION THAT IN THE NORMAL COURSE OF EVENTS, ACCUSED-APPELLANT BENITO GO BIO JR., WOULD NOT HAVE REQUESTED PURITA TIU FOR EXTENSION, IF AS HE CLAIMS, THE CHECK (EXHIBIT "A") WAS NOT ENCASHED WITH PURITA TIU, AND IN ALL PROBABILITY, THE LATTER ENCASHED THE CHECKS OF THE

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ACCUSED-APPELLANT, WITH HER MOTHER GO CUN, AND SISTER FILIPINAS TAN, IN THE AMOUNTS INDICATED THEREON.

V. THE TRIAL COURT ERRED IN HOLDING THAT THE VARIANCE AND CONTRADICTIONS IN THE TESTIMONY OF BENITO GO BIO JR., TENDED MORE TO PROVE THAT THE CHECK ISSUED TO PURITA TIU BY THE ACCUSED-APPELLANT, WHICH WAS POST-DATED JUNE 15, 1979, WAS INDEED ENCASHED BY PURITA TIU IN HER RESIDENCE IN OLONGAPO CITY.

VI. THE TRIAL COURT ERRED IN FINDING THAT TO SECURE CASH, THE ACCUSED-APPELLANT FALSELY REPRESENTED THAT HIS CHECK WILL BE FULLY FUNDED UPON MATURITY, AND THAT THIS WAS DONE AT THE TIME HE ISSUED THE POSTDATED CHECK TO PAY FOR THE CASH HE RECEIVED FROM PURITA TIU IN EXCHANGE THEREOF.

VII. THE TRIAL COURT ERRED WHEN AFTER THE EVIDENCES HAD BEEN ADDUCED IT FAILED TO DISMISS THE CASE AND INSTEAD CONVICTED THE ACCUSED-APPELLANT FOR THE CRIME CHARGED AND SENTENCED HIM TO RECLUSION PERPETUA, AWARE OF THE FACT THAT IT DID NOT HAVE JURISDICTION OVER THE CASE.

VIII. THE TRIAL COURT ERRED IN HOLDING THE ACCUSED-APPELLANT BENITO GO BIO JR., LIABLE FOR ESTAFA, UNDER ARTICLE 315(2) (d) OF THE REVISED PENAL CODE, FOR HAVING ISSUED A BAD CHECK EVEN IF THE CHECK HAD BEEN ISSUED IN PAYMENT. OF A PRE-EXISTING OBLIGATION.

IX. THE TRIAL COURT ERRED IN HOLDING THAT THERE IS SUFFICIENT EVIDENCE AGAINST THE ACCUSED-APPELLANT TO JUSTIFY HIS CONVICTION FOR ESTAFA UNDER ARTICLE 315 (2) (d) OF THE REVISED PENAL CODE AS AMENDED BY REPUBLIC ACT NO. 4885 AND PRESIDENTIAL DECREE NO. 818.

Two issues are raised by the appellant in the above assignments of errors, namely-(1) whether or not the Regional Trial Court of Olongapo City has jurisdiction over his case and-(2) whether or not, based on the evidence on record, the guilt of the appellant on the estafa charge was established beyond reasonable doubt.

The issue of jurisdiction may be resolved on whether or not the facts as alleged in the complaint, if hypothetically admitted constitute the elements of the offense as defined by law.

The facts should be taken as they are alleged in the complaint. The general principles governing jurisdiction in cases of estafa punishable under Article 315, paragraph 2(d) of the Revised Penal Code have been defined in People vs. Yabut (76 SCRA 624), to wit:

Estafa by post-dating or issuing a bad check under Art. 315, par. 2(d) of the Revised Penal Code may be a transitory or continuing offense. (Tuzon v. Cruz, 66 SCRA 238-39) Its basic elements of deceit and damage (US v. Rivera, 23 Phil. 390 [19121) may independently arise in separate places. In the event of such occurrence, the institution of the criminal action in either place is legally allowed. Section 14(a), Rule 110 of the Revised Rules of Court provides: 'In all criminal prosecutions the action shall be instituted and tried in the Court of the municipality or province wherein the offense was committed or any one of the essential ingredients thereof took place. The theory is that a person indicted with a transitory offense may be validly tried in any jurisdiction where the offense was in part committed (Moran, Comments of the Rules of Court, Vol. 4, 1970 ed., at 61; People v. Yumang, 11 SCRA 99; Tuzon v. Cruz, ante.) However, if all the acts material and essential to the time and requisite of its consummations occurred in one municipality or province, the court of that municipality or province has the sole jurisdiction to try the case.

The basic element of deceit in the estafa charged in the information took place in Olongapo City. The records show that the Regional Trial Court of Olongapo City has jurisdiction over the case.

Anent the second issue, the point to be resolved is whether or not the presumption of innocence in favor of the appellant was overthrown by the prosecution's evidence,

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There is no question that the appellant issued a postdated check worth P220,000.00 in favor of Purita Tiu and that this check, when presented for encashment to the drawee bank after its maturity date, was not honored for insufficiency of funds. The controversy lies in the circumstances surrounding the issuance of the check. The prosecution's evidence tended to show that the check was issued in exchange for cash given by Purita Tiu to the appellant on the same occasion. On the other hand, the defense evidence tried to show that the check was issued in payment of the appellant's pre-existing obligation to Go Cun, Purita Tiu's mother.

In upholding the prosecution's evidence on the transaction involving the issuance of the check in question, the trial court relied heavily on inconsistencies in the testimonies of the defense witnesses.

The trial court cited the following inconsistencies: 1) The claim of appellant Go Bio that he had no dealings with appellee Purita Tiu and that the three (3) checks were all prepared and delivered by him to Go Cun in her office which is in contradiction with the testimony of defense witness William Tiu who declared that he was the one who delivered the three checks to Go Cun at her residence in Quezon City; 2) The declaration of the appellant that he never had any business dealing with appellee Purita Tiu which is in contradiction to his admission that he executed several requests addressed to Purita Tiu asking for extensions for the deposit of the check; 3) The appellant admitted in his counter-affidavit submitted to the Fiscal's Office that he borrowed P670,000.00 from Go Cun which is in contradiction to his claim that the P670,000.00 he owed to Go Cun was the sum total of his obligation, his principal loan of P400,000.00 plus cash interest.

To warrant conviction, it is necessary for the prosecution to show that the P220,000.00 check was issued in exchange for P220,000.00 in cash which was turned over by Purita Tiu to the accused at the same time that the check was drawn and delivered to her. The supposed inconsistencies do not prove the simultaneous transaction which formed the basis for the alleged criminal act.

The trial court relied on minor discrepancies in the appellant's testimony to arrive at a conclusion that the third check for P220,000.00 was not in payment of a pre-existing obligation. The court overlooked the established doctrine that a litigant must rely on the strength of his evidence and not on the weakness of the evidence of his adversary. This principle is most significant in criminal cases since conviction calls for proof beyond reasonable doubt that the accused is really the perpetrator of the crime. We have ruled that:

... The Constitutional presumption of innocence continues until overthrown by proof of guilt beyond reasonable doubt, which requires moral certainty which convinces and satisfies the reason and conscience of those who are to act upon it. (Borromeo v. Court of Appeals, 131 SCRA 318).

Bearing in mind the foregoing, the vital question to be resolved is whether or not the prosecution has presented the necessary quantum of evidence to warrant the conviction of the appellant.

The record shows that the nature of the transaction as testified by Purita Tiu was corroborated by Eusebia Miraflor, overseer of Tiu's apartment who happened to be conveniently present when her boss gave P220,000.00 in cash to the appellant, Miraflor testified to the effect that-1) On May 15, 1979, she was called by Purita Tiu to her house "because there was something needed in the apartment; 2) She saw Filipinas Tan, Tiu's sister in the house; 3) While in the house she saw the appellant arrive; 4) After the arrival of the appellant, he and Purita Tiu had a conversation and, thereafter, Tiu entered her room and when she came out she had a bag of money; 5) The money which was in bundles was counted in the presence of the appellant; 6) Thereafter, the appellant brought out a check which he signed and handed to Purita Tiu; and that 7) the money was placed by the appellant in his attache bag after which he left.

Miraflor's testimony shows that she clearly remembers all the minute details including the sequences of events during the transaction between Purita Tiu and the appellant. According to her testimony, Miraflor was with Tiu and the appellant throughout the time that the transaction was going on. And yet, Miraflor admitted that she did not know how much money was involved. She stated that she had no Idea about how many bundles of money were brought out.

10

It is not shown why the Filipino caretaker of an apartment building who had nothing to do with a confidential transaction should be allowed to witness the counting of P220,000.00 in paper bills by persons of Chinese background who were sufficiently intimate to deal in hundreds of thousands of pesos at a time. It is even more strange that this caretaker paid no attention to the money being counted in her presence but clearly recalled other unimportant and minor details that transpired at the time. There is no rule that disqualifies employees and even relatives from testifying for one with dominance over them but the testimony of the complainant's overseer in this case manifests a degree of bias which neutralizes her credibility. (People v. Narvaez, 121 SCRA 389).

Purita Tiu testified that she loaned P220,000.00 to the appellant upon the representations of her mother Go Cun. She testified that her sister Filipinas Tan, who was also prevailed upon by their mother to loan money to Benito Go Bio, was likewise present when the cash was turned over in exchange for the postdated check. Yet, these two key figures who were more knowledgeable and better witnesses than the apartment caretaker who was merely visiting, were not presented as witnesses.

There are other unexplained loose ends in the prosecution evidence. Purita Tiu has a current account in an Olongapo City bank. The more common procedure for a transaction of loan would be the issuance of a check to be immediately encashed in the nearby bank. Or the exchange of money should take place in an office where security precautions can be taken. Instead of giving a check to Go Bio and helping him cash it at her bank, Purita Tiu happened to have P220,000.00 cash lying around in her house. The money was in bundles and so must have come from a bank. It was earmarked for the construction of a house in Greenhills, San Juan, Metro Manila but was conveniently available for Go Bio in Olongapo at the time. The bag with the money was brought out into the sala and the cash was counted out with the encargada of an apartment building Idly watching the whole thing.

If there is any material inconsistency in the testimony, it is found in the evidence for the prosecution and not in the defendant's evidence.

We reiterate the rule in Borromeo v. Court of Appeals (supra):

xxx xxx xxx

... (E)very circumstance against guilt and in favor of innocence must be taken into account and suspicion no matter how strong should not sway judgment. Where the evidence, as here, gives rise to two probabilities, one consistent with the defendant's innocence and another indicative of his guilt, that which is favorable to the accused should be considered.

The accused-appellant testified that in the expansion of his import business, the complainant's mother Go Cun had been a financier or lender. There had been various earlier transactions where he paid P2,500.00 interest every month for every P100,000.00 he borrowed from the old lady. Because of sudden business reverses involving the failure of Pagasa Farms to pay about P6,000,000.00 worth of sprayer, Go Bio failed to pay a P670,000.00 loan on time. A 30-day extension was given by Go Cun if postdated checks broken up into three for the amount would be issued. The evidence shows that on May 15, 1979 Go Bio drew three checks all postdated to June 15, 1979. These checks are:

BPI Check No. 357726-P200,000.00-Filipinas Tan

BPI Check No. 357727-P250,000.00-Go Cun

BPI Check No. 357728-P220,000.00-Purita Tan

The checks bear consecutive numbers. They were issued on the same day and postdated to a same date. They are payable to Go Cun and her daughters. The evidence for a pre-existing P670,000.00 debt is quite strong, much stronger than a simultaneous exchange of P220,000.00 cash for BPI Check No. 357728. In accordance with this Court's pronouncement in People v Sabio, Sr. (86 SCRA 568), the appellant is not guilty of the crime

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charged. The postdated check which was subsequently dishonored for insufficiency of funds, issued in payment of a pre-existing obligation, does not constitute estafa as defined and penalized under Article 315 par. 2(d) of the Revised Penal Code, as amended by RA No. 4885 and P.D. 818. As this Court ruled in the People v. Sabio case:

xxx xxx xxx

... Is there deceit and damage when a bad check is issued in payment of a pre-existing obligation? It is clear that under the law, the false pretense or fraudulent act must be executed prior to or simultaneously with the commission of the fraud. To defraud is to deprive some right, interest, or property by deceitful device. In the issuance of a check as payment for a pre-existing debt, the drawer derives no material benefit in return as its consideration had long been delivered to him before the check was issued. In short, the issuance of the check was not a means to obtain a valuable consideration from the payee. Deceit, to constitute estafa should be the efficient cause of the defraudation. Since an obligation has already been contracted, it cannot be said that the payee parted with his property or that the drawer has obtained something of value as a result of the postdating or issuance of the bad check in payment of a pre-existing obligation.

Thus, following the principle laid down by People v. Quesada (60 Phil. 515), the defendant-appellant's liability is merely civil in nature and not criminal. In this regard, as the evidence for a pre-existing debt is clear and no additional evidence is required to establish the same, a separate civil action is no longer warranted. Moreover, considering the fact that this case has been pending since 1979, it would be unjust to the complainant to require him to file an unnecessary separate civil action (Padilla v. Court of Appeals, 129 SCRA 558).

With this in mind, we therefore hold that the defendant-appellant is liable in the amount of Two Hundred Twenty Thousand Pesos (P220,000.00) to the complainant.

In this type of case, the line which separates the acts of an accused who committed estafa from the dealings of a person who merely incurred a civil obligation is a rather thin one. We cannot affirm a sentence of reclusion perpetua in the absence of proof which establishes criminal culpability beyond reasonable doubt.

WHEREFORE, the decision of the trial court is hereby REVERSED and SET ASIDE. Appellant Benito Go Bio, Jr. is ACQUITTED of the crime of ESTAFA on grounds of reasonable doubt, but is ordered to pay the indebtedness of P220,000.00 with legal rate of interest from May 1979.

SO ORDERED.

People vs. Tempongko

FIRST DIVISION

G.R. No. L-69668October 2, 1986

PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs.HUMBERTO TEMPONGKO, JR., defendant-appellant.

The Solicitor General for plaintiff-appellee.

Adriano Pagarigan for defendant-appellant.

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CRUZ, J.:p

The appellant is before us to challenge his conviction of the crime of rape. He claims it was not he who erred but the trial court. The usual plea is made: that there was a misappropriation of the evidence, resulting in the sentence of reclusion perpetua that he now faces. He prays for a reversal.

At the time of the commission of the alleged offense, the complainant, Lolita Dacoycoy, was an 18-year old senior student at the Manuel L. Quezon High School and undergoing citizen army training (CAT) under the command of the appellant. 1 The appellant was 43 years old, married, with five children, and commandant of the said course, besides being the owner of a tailoring shop. 2

These are the facts as the trial court saw them.

On November 9, 1981, the complainant and her friend, Rosalita Quinto, went to the appellant's tailoring shop in accordance with the appointment made by them the day before. This was about 7 o'clock in the evening. Their purpose was to solicit a contribution for their high school annual. Upon arrival one hour later, the appellant offered them beer, which they drank. Lolita became dizzy and the appellant suggested that the two girls stay for the night. The appellant then left, at about 11:30 o'clock. Lolita slept on the sofa while Rosalita slept on the floor about two arms length from her. It was at dawn when Lolita felt the weight of a person on her whom she immediately recognized as the appellant. She pleaded, "Huwag mong gawin sa akin iyan, sir." The appellant kissed her and bit her lower lip. Lolita boxed him in the back and he boxed her in the stomach, rendering her unconscious. She did not scream or call for help because it all happened so fast. When she woke up, the deed was done and she was bleeding. The appellant was seated on the sofa totally naked. She moaned presumably in anguish and pain, and Rosalita woke up. Rosalita embraced and consoled Lolita. She turned on the light and upbraided the appellant who at that time was already putting on his trousers. The appellant soon left without saying a word, looking very nervous. As Lolita's jogging pants were bleed, Rosalita left to get her some clothes. Lolita stayed until past noon and when Rosalita did not return decided to leave the office. She proceeded to the house of another friend, a certain Cecile, where she stayed for five days until she was fetched by her stepfather, Delfin Dalisay. This was Lolita Dacoycoy's testimony. 3

Continuing the story, Delfin Dalisay related that on November 10, Rosalita and her mother informed him of Lolita's rape. He blamed Rosalita for Lolita's misfortune, and Rosalita and her mother left in a huff. Five days later, Cecile's sister informed them at their market stall that Lolita was in their house. He fetched Lolita from there and later, upon advice of the lawyer to whom they had earlier been referred by a friend, he and her mother took Lolita to the National Bureau of Investigation, where she underwent a medical examination. 4 Part of this narration was contributed by Clarita Dacoycoy, Lolita's mother, who also testified on the civil damages suffered by the complainant. 5

According to the medical report as explained by Dr. Orlando Salvador of the NBI in layman's terms, the complainant was deflowered on or about the date of the alleged rape. This witness also testified that the claimed blow inflicted on the complainant's stomach would not necessarily leave any external sign or mark. 6

Testifying for himself, the appellant denied the charge, saying he was at home with his family when the rape was supposedly committed. He did not deny that he offered the two girls beer and allowed them to sleep in his office in the night of November 9, 1981. He declared, however, that having left his office at about 11:30 p.m. of that date, he returned thereto at about 9 o'clock in the morning of the following day and not earlier. In fact, he saw the complainant having breakfast at that time. 7

The appellant presented two witnesses to corroborate his testimony, but it seems they did him more harm than good. We shall go to that later.

The medical report suggests that the complainant was a virgin at the time of the supposed intercourse, but it would seem that her conduct in the night of November 9, 1981, was hardly maidenly or at least discreet. First, she went to the office of a man she did not know very well at 7 o'clock on a Sunday evening. Then she accepted beer instead of a soft drink, which would have been the proper refreshment for her and her

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companion, considering their age and sex. Not only that, instead of taking a few sips just to be polite, what she did was drink about three-fourths of the glass, as a result of which she felt dizzy. Then, instead of going home with her companion, she decided to stay and sleep in the strange office of this person who, to repeat, was by her own narration not close to her.

There is no evidence that her friend Rosalita was also dizzy and could not have taken her home that night. In fact, Lolita herself testified that Rosalita did not complain of being dizzy. 8 The appellant's office on C.M. Recto was not far from the complainant's house on Vicente G. Cruz, which could have been reached by one jeep ride. Alternatively, she had a telephone at her house and could have called one of her relatives to fetch her if she and Rosalita could not leave by themselves. 9 It is incredible that she did not even trouble to tell her parents of her whereabouts. One might expect such thoughtless conduct of an experienced girl of loose discipline but not of the virtuous and virginal girl the complainant was supposed to be.

The other parts of her testimony also raise some perplexing questions. By her own account, she was raped on the sofa while her friend Rosalita was sleeping on the floor only two arms length away and in the same room. 10 The implication is that the appellant was reckless not only of resistance from Lolita but also of discovery by Rosalita. The complainant testified that he immediately recognized the appellant although she had just awakened and that when she recovered consciousness after having been boxed in the stomach, she had already been ravished. Strangely, the appellant was then still seated on the sofa and apparently taking his time about dressing. 11 She also said she was desperate for clothing because her jogging pants were bloody. 12 Yet it did not occur to her to get other attire, which must have been available in abundance in the place where she was then, which was a tailoring shop. In fact, the shop was a contractor for the supplying of, precisely, CAT uniforms. 13

Instead of going straight home, which would have been the normal reaction of a young woman subjected to her traumatic experience, what she did was stay with a friend, the mysterious Cecile. 14 She stayed there for five days and did not communicate with her mother even once. Neither did her friend Cecile. In fact, it was only on the fifth day that Cecile's sister saw fit to tell the complainant's family where Lolita was notwithstanding Lolita's alleged condition at the time. If, according to Delfin Dalisay, the complainant was "tulala" when he saw her, it would have been the natural thing for Cecile to inform Lolita's family of her state of shock as soon as possible.

One also wonders why Rosalita Quinto, the complainant's companion on the night of the alleged rape, and who was supposed to be in the room when the complainant claimed she was ravished, was not presented as a witness by the prosecution It is not often that the prosecution has the good fortune of an actual eyewitness in cases like this, and yet neither the fiscal nor the private prosecutor saw fit to ask Rosalita to corroborate the testimony of Lolita. Instead, they presented only the parents of Lolita who testified on what happened after, and not before and during, the alleged rape.

For its part, the defense was none-too-convincing either and, in the view of the trial court, fatally flawed. The appellant relied on alibi, an inherently feeble excuse that cannot prevail as against the positive Identification of the accused. Moreover, the appellant was living in Sisa, in Sampaloc, only two kilometers or so from his office, 15 where the rape was allegedly committed. It could have been reached from his house in a matter of minutes, as the trial court observed, considering the light traffic at 5 o'clock in the morning or thereabouts.

The appellant's first witness, Remy Oriola, testified that Lolita and Rosalita slept in the appellant's office in the morning of November 8, 1981, and that the appellant returned thereto the following morning of November 9, 1981. 16 By contrast, the appellant's testimony was that the two girls slept in his office on November 9, 1981, and that he returned thereto the following morning of November 10, 1981. 17 And whereas the appellant testified that the complainant came to his office with a paper bag containing clothes, 18 the witness said Lolita was carrying only a handbag. 19

The testimony of the other defense witness, Rolando Hermilo, was not only practically useless but in fact prejudicial to the appellant. In the first place, he testified only up to the time he left the appellant's office at about 11 o'clock in the night of November 9, 1981, and not on what happened later to the girls who were left

14

behind. 20 But what makes his testimony suspect was his admission that he learned of the charge against the appellant, and was asked to testify for him, only on the date itself of the hearing, in the very morning when he was presented as witness, 21 and this was more than two years after the alleged rape. On top of this, he was by his own admission reading the transcript of the appellant's testimony before he was actually called to the witness stand. 22

The defendant argues that Lolita should have shouted for help but did not; that he would not have attempted the rape in such a cramped place and with another person in the very room where the crime was supposedly committed; and that there were no signs of the alleged stomach blow on the complainant's stomach.

On the other hand, he could not explain why he offered the two girls beer when soft drinks would have been more appropriate, and also why he allowed them to sleep in his office when they were just trainees under his command and had no special ties with him. His claim was that they had left home because Lolita had been scolded by her mother was belied by his own testimony that he heard Lolita calling her mother on the telephone to say she was sleeping with a friend. 23

It is unfortunate that the trial court did little to analyze the evidence of the parties and virtually limited itself to the defense of alibi, which it declared to be untenable. There should have been a more careful analysis of the other evidence to get to the truth of this unfortunate mess where there is more than meets the eye. This is not a pat case, so to speak. There are many unanswered questions. The conduct of both the complainant and the defendant, as narrated by the requires not a little explaining. The trial judge should have probed deeper instead of simply relying on the question of alibi, which is only part of the intriguing mosaic.

The basic principle in every criminal prosecution is that accusation is not synonymous with guilt. The accused is presumed innocent until the contrary is proved by the prosecution. If the prosecution fails, it fails utterly, even if the defense is weak or, indeed, even if there is no defense at all. The defendant faces the full panoply of state authority with all "The People of the Philippines" arrayed against him. In a manner of speaking, he goes to bat with all the bases loaded. The odds are heavily against him. It is important, therefore, to equalize the positions of the prosecution and the defense by presuming the innocence of the accused until the state is able to refute the presumption by proof of guilt beyond reasonable doubt.

The appellant does not deny that he asked the two girls to see him at his office in the evening of November 9, 1981; that he there offered them beer, which they drank; and that he permitted them to sleep there that night.

The proper thing to do was to receive these girls at his office at the MLQ where he was working as commandant of the CAT, and during school hours. Soft drinks would have been a more appropriate refreshment for the young ladies, especially since such beverages were easily available. And if it is true, as he says, that the complainant asked to sleep in his office because she had been scolded by her mother, the appellant, exercising as he did some moral influence over her as her commandant, should have counseled her to go home. Failing that, he should have at least caged up the complainant's mother to tell her that Lolita was in his office.

But all these improprieties and omissions come under the heading of indiscretions and not crimes. Serving beer instead of soft drinks and snowing the use of one's office for sleeping purposes are not indictable offenses. Moral irresponsibility and thoughtlessness are also not prohibited under our criminal laws. More importantly, all these indiscretion do not necessarily lead to the conclusion that the appellant raped the complainant in the morning of November 10, 1981, in his office. The connection is too far-fetched.

The only fact conclusively established by the prosecution is that the complainant was deflowered on or about the time of the alleged rape, but that is all. The rest of its case is based on the improbable testimony of the complainant, whose conduct, even before the alleged rape, was hardly befitting a proper young lady, to say the least.

The almost indifferent reaction of her family is implausible too, if we go by the recorded testimony. After being informed of Lolita's rape, they did not immediately look for her; and when they did, their efforts were

15

hardly energetic. The mother testified that they later searched for her but did not elaborate beyond saying that they asked her friends. They did not inquire from her classmates in MLQ They did not talk to the alleged rapist, whom Rosalita had Identified. In fact, when she and her mother informed Delfin Dalisay that Lolita had been raped, he did not ask where she was — a most natural and logical question to ask at that time. All he did, by his own account, was blame Rosalita for the incident.

It was only five days later that they teamed of her whereabouts, and this because Cecile's sister came to see them and informed them. As for Cecile, in whose house the complainant supposedly stayed for five days, she was not even presented as witness to corroborate Lolita's testimony. It is significant that although she and Rosalita Quinto played key roles as it were in this case, they were strangely silent and absent at the trial.

The trouble with the appellant, according to the trial court, is that he could not prove his defense of alibi. But then how could he? He said he was sleeping in his house with his family. At five o'clock in the morning, where else could he have been? How could he have produced third parties as witnesses to testify that he was fast asleep in his own house? His presence in his own bedroom at that time was not incredible or even improbable but perfectly believable.

What does strain the imagination is the complainant's own implausible story: of a virgin who visited a casual acquaintance of the opposite sex in his own office on a Sunday evening; accepted and drank beer with him; asked to sleep in his office; was awakened by the weight of a person on top of her whom she immediately recognized notwithstanding that her eyes were not yet accustomed to the dark; suffered a blow in her stomach and recovered consciousness to discover she had been raped by the appellant who was still seated on the sofa totally naked; could not leave because her jogging pants were bloodied notwithstanding that she was in a tailoring shop where clothes were available in abundance; finally went to a friend's house instead of straight to her mother from whom she normally would have sought solace. Most significantly, the alleged rape was committed within two arms length of her companion, Rosalita Quinto, who was sleeping with her in the same room, and could have awakened any time and in fact did so, according to Lolita, when she moaned after her ravishment.

The theory of the prosecution has too many loose ends that it has failed to tie up to the satisfaction of this Court. The guilt of the appellant has not been established beyond doubt and so cannot be affirmed in this appellant The defense is weak, to be sure, but for all the persuasive arguments of the Solicitor General and the private prosecutor, this Court remains unconvinced that the appellant raped the complainant. The appellant may have been lying, and there is evidence of this, but we are not prepared to accept, to the point of moral certainty, that the complainant was telling the truth. The ambiguous evidence of the prosecution cannot justify our condemning the appellant to prison for the rest of his life where there are whispers of doubt that he is guilty.

WHEREFORE, the decision' of the lower court is REVERSED and the appellant is ACQUITTED, without any pronouncement as to costs. It is so ordered.

Resort vs. DBP

THIRD DIVISION RESORT HOTELS CORPORATION, RODOLFO M. CUENCA and CUENCA INVESTMENT CORPORATION,Petitioners, - versus -DEVELOPMENT BANK OF THE PHILIPPINES and SM INVESTMENT CORPORATION,Respondents. G.R. No. 180439 December 23, 2009

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DECISION NACHURA, J.: Before us is a petition for review on certiorari under Rule 45 of the Rules of Court, assailing the Court of Appeals (CA) Decision[1] in CA-G.R. CV No. 81363, which reversed and set aside the Decision of the Regional Trial Court (RTC), Branch 134, Makati City, in Civil Case Nos. 6342, 269-R, TG-799 and 9497.[2]

The long and arduous facts, as found by the CA, follow: [Petitioner] Resort Hotel[s] Corporation (RHC for brevity), a corporation duly organized and existing in accordance with Philippine laws, was the previous owner and operator of several hotels located outside Metro Manila; namely Baguio Pines Hotel in Baguio City, Taal Vista Lodge Hotel in Tagaytay City, and Hotel Mindanao in Cagayan de Oro City. Among RHC’s stockholders were [petitioners] Cuenca Investment Corporation and Rodolfo Cuenca, who was the erstwhile President and Chairman of the Board of Directors of the said Corporation. On the other hand, [respondent] Development Bank of the Philippines (DBP), a government financial institution, was RHC’s major creditor that eventually foreclosed the disputed hotels upon the latter’s default. [Respondent] SM Investment Corporation (SMIC) was the subsequent owner of Taal Vista Lodge Hotel and Baguio Pines Hotel. It appears that from 1969 up to 1981, RHC obtained from DBP several loans, aggregating approximately P157 million, for the purpose of expanding hotel capacities, operations and services nationwide. To secure the payment of these loans, RHC executed real estate mortgages in favor of DBP covering the following properties of RHC: a) two (2) parcels of land situated in Baguio City, covered by Transfer Certificate of Title (TCT) No. T-15880 and Original Certificate of Title No. P-1316, which included Baguio Pines Hotel x x x; b) six (6) parcels of land located in Tagaytay City, covered by TCT Nos. T-8085, T-10801, T-10802, T-10803, T-10804 and T-10805, which included Taal Vista Lodge Hotel x x x; and c) two (2) parcels of land situated in Cagayan de Oro, covered by TCT Nos. T-34777 and T-34778, which included Hotel Mindanao x x x. Likewise, RHC executed chattel mortgages additionally securing the loans with all the personal properties located inside its head office in Makati. When the loans became due and demandable, RHC failed to pay. Sometime in the early ‘80S, RHC proposed to DBP that part of its obligations be converted into equity inasmuch as it was experiencing financial difficulties. DBP subsequently acceded. With the approval of the Board of Directors of RHC, which was then headed by its Chairman, Rodolfo Cuenca, DBP obtained shareholdings, equivalent to 55% of RHC’s total stockholders’ equity, in exchange for the reduction of RHC’s obligation to DBP by [as] much as P47 million. As a result of the debt-to-equity conversion, DBP acquired two (2) board seats in the eleven-member Board of Directors of RHC. As of January 10, 1984, RHC’s outstanding obligation was pegged at P114,005,404.02 while its total arrearages was P56,134,819.52 which was about 49% of its total outstanding obligation. Consequently, DBP applied for the extrajudicial foreclosure of the real estate and chattel mortgages pursuant to Presidential Decree No. 385, also known as “The Law on Mandatory Foreclosure,” mandating government financial institutions to foreclose mandatorily loans with arrearages amounting to at least 20% of the total outstanding obligation. Intending to block the impending foreclosure of the mortgaged personal properties, RHC filed on February 6, 1984 a Complaint x x x against DBP and the Sheriff of Rizal or Makati before Branch 148 of Regional Trial Court (RTC) of Makati, docketed therein as Civil Case No. 6342. With respect to the mortgaged real properties, RHC filed similar Complaints before Branch 7 of RTC of Baguio City x x x, Branch 18 of RTC of Tagaytay City x x x, and Branch 18 of RTC of Misamis Orientalx x x, docketed as therein Civil Case Nos. 269-R, TG-799 and 9497, respectively. In Civil Case Nos. 6342 and 269-R, RHC specifically prayed for the issuance of restraining orders or preliminary injunctive writs to stop or enjoin the Sheriffs from conducting foreclosure proceedings.

17

By the Orders dated March 6, 1984 and March 21, 1984, the applications for restraining orders or preliminary injunctive writ were denied by the RTC of Makati x x x and Baguio City, respectively. Unsatisfied therewith, RHC filed separate petitions for certiorari, docketed as AC-G.R. Nos. SP-02939 and SP-03103 assailing the Orders of the lower courts with the then Intermediate Appellate Court. On both occasions, the then Intermediate Appellate Court sustained the Orders of denial of the two (2) lower court x x x. As there were no restraining orders or injunctive writs whatsoever issued by the lower courts, the foreclosure sale of the mortgaged properties went through as scheduled. The auction sale of the mortgaged chattels was conducted on May 28, 1984 by the Sheriff of Makati. As regards the mortgaged real properties, the auction sale of those located in Cagayan de Oro was conducted on February 27, 1984 by the Office of the Provincial Sheriff of Misamis Oriental, while the auction sale of those located in Baguio City was held on March 22, 1984 by the Office of the City and Provincial Sheriff of Baguio City. With respect to those located in Tagaytay City, the auction sale was conducted on June 11, 1984 by the Office of the Provincial Sheriff. In all the foreclosure sales, DBP emerged and was declared the highest and winning bidder. With regard to the foreclosed chattels, DBP posted a bid price of P117,500.00 x x x. With regard to the foreclosed real properties, DBP bought the Cagayan de Oro properties for P7,440,565.00, the Baguio City properties for P32,158,515.00, and the Tagaytay City properties for P26,450,560.00. Subsequently, three (3) Certificates of Sale were issued to evidence sale of the mortgaged real properties to DBP x x x. Meanwhile, on October 23, 1984, Baguio Pines Hotel was gutted by fire. A total sum of about P64,566,000.00 representing fire insurance proceeds was collected by DBP and applied to the obligation of RHC x x x. Thereafter, the one-year statutory period of redemption expired without RHC exercising the right of redemption. Consequently, title[s] to the foreclosed properties were consolidated in the name of DBP. By Resolution dated April 16, 1985 issued by the Supreme Court en banc, Civil Case Nos. 269-R, 9497 and TG-799 were consolidated with Civil Case No. 6342 which was then pending before Branch 148 of the RTC of Makati. Later on, the four (4) consolidated cases were transferred to Branch 134 of the same court. On April 23, 1985, RHC filed the first Amended and Supplemental Complaint x x x pleading new and additional causes of action and enabling Rodolfo Cuenca to join the suit as co-plaintiff. On May 26,1988, DBP sold the Baguio City properties to SMIC x x x. Likewise on July 11, 1988, DBP sold the Tagaytay City properties, which included the Taal Vista Lodge Hotel, to Tagaytay and Taal Management Corporation (TTMC) x x x, which in turn sold the same to SMIC for P38,000,000.00 x x x. On June 23, 1992, RHC and Rodolfo Cuenca filed their Second Amended and Supplemental Complaint x x x enabling Rodolfo Cuenca and CIC to prosecute the action as a derivative stockholder’s suit in behalf of RHC. On April 7, 1995, RHC, Rodolfo Cuenca and CIC x x x filed their Third Amended and Supplemental Complaint x x x impleading additional defendants; namely, SMIC in Civil Case No. 269-R, TTMC in Civil Case No. TG-799. On February 5, 1996, [petitioners] filed their Fourth Amended Complaint x x x asserting nine (9) causes of action against DBP, SMIC and the Sheriffs responsible for the foreclosure proceedings, with TTMC being dropped as defendant. In their first cause of action, which was to declare the obligation extinguished, they alleged, inter alia, that DBP had no right to foreclose the mortgages since RHC’s obligation to DBP had been extinguished by confusion or merger which occurred when shareholdings in RHC were acquired by DBP in accordance with debt-to-equity conversion agreement. In their second cause of action, which was to restructure the obligation, they asserted, inter alia, that assuming RHC’s obligation to DBP had not been extinguished, RHC was entitled to loan restructuring at the very least. In their third cause of action, which was to ascertain and fix the amount of obligation, they insisted that DBP had no right to foreclose the mortgages as the amount of the outstanding obligation had not yet been liquidated or ascertained. In their fourth cause of action, which was to annul the mortgages, the plaintiffs-appellees claimed that DBP had no right to foreclose the mortgages considering that DBP was in fact and in effect lending to itself to accompany

18

and carry into effect the Government’s purpose and policy, and that some of the mortgages sought to be foreclosed` were not registered. In their fifth cause of action, which was to annul the foreclosure sales, they insisted, inter alia, that the required posting and publication of notices of extrajudicial foreclosures had not been complied with, and there was gross inadequacy in the purchase prices of the foreclosed properties. In their sixth cause of action, which was to declare the Baguio Pines Hotel effectively redeemed and the amount of refund due, they alleged that DBP acquired Baguio Pines Hotel at the foreclosure sale for P32,158,515.00. While Baguio Pines Hotel was in the possession of DBP, it was destroyed by fire. However, DBP collected the insurance proceeds despite the fact that they were more than the amount of the purchase price. In their seventh cause of action, they alleged that in the event that judgment was not rendered declaring the Baguio Pines Hotel redeemed, RHC’s total obligation to DBP should be declared to be fully satisfied and DBP should be ordered to refund the difference between the insurance proceeds and the correct outstanding obligation of RHC to DBP. In their eighth cause of action, which was to declare Rodolfo Cuenca released or discharged from his joint and several undertaking, they asseverated, inter alia, that any joint and several undertaking of Rodolfo Cuenca to answer for the obligation of RHC to DBP should be reformed on the ground of mistake, fraud, inequitable conduct or accident since it was merely a formality to ensure the payment of RHC’s obligations. Finally, in their ninth cause of action, the plaintiffs-appellees alleged that they were entitled to exemplary damages and attorney’s fees. In its Answer thereto, DBP maintained that the [petitioners] had no cause of action considering that: a) there was no confusion or merger because the equity of the original stockholders was unimpaired, and control of the said corporation remained with the original stockholders; b) restructuring was not a matter of right for one party, but could arise only from the mutual agreement of the parties, restructuring in effect a novation of the loan contract; c) the obligations of RHC had been properly computed, and the computation already took into account the debt-to-equity conversion; d) DBP was an entity distinct and separate from RHC, and therefore, could not have possibly lent to itself; e) non-registration of mortgages did not render them invalid as between the parties; f) all requirements of the law regarding foreclosure were complied with; g) the insurance proceeds collected by DBP were credited to the account of RHC, but the said proceeds were still insufficient to discharge the obligation; h) the proceeds from the foreclosure sales did not even amount to one-half of the total obligations of RHC; i) Rodolfo Cuenca’s undertaking to be bound jointly and severally liable with RHC was not a mere formality but a contract defining his obligation in case RHC failed to pay; j) there was no legal ground to discharge Rodolfo Cuenca from his obligation; and k) DBP was not liable for any damages since it was RHC, Rodolfo Cuenca and CIC that had acted in bad faith x x x. For its part, SMIC filed its Answer to Fourth Amended Complaint x x x averring that a) RHC, Rodolfo Cuenca and CIC had no cause of action against it; b) the RTC had no jurisdiction over the nature of the action or suit, it involving an intra-corporate; and c) it was a buyer in good faith in connection with its acquisition of Taal Vista Lodge Hotel and Baguio Pines Hotel. On March 27, 1998, RHC, [CIC and Cuenca] filed their Fifth Amended Complaint x x x deleting the ninth cause of action praying for the payment of exemplary damages and attorney’s fees. On February 15, 2000, they made a Manifestation x x x that they were withdrawing their Fifth Amended Complaint. With the withdrawal of the said Complaint, the RTC conducted the pre-trial of the consolidated cases on the basis of the Fourth Amended and Supplemental Complaint x x x. On March 13, 2000, [petitioners] filed a Motion to Drop as Defendants x x x on the ground that the Sheriffs of Rizal or Makati, Baguio City, Cavite and Misamis Oriental were not indispensable to resolution of the consolidated cases. There being no objection interposed by DBP and SMIC, the RTC, in its Order dated May 17, 2000 x x x dropped the said Sheriffs as defendants in the consolidated cases. Thereafter, trial of the consolidated cases ensued. During the hearing, [petitioners] presented as witnesses Bayani Santos, the Senior Manager of DBP, Roberto Cuenca and his father, Rodolfo Cuenca. Their testimonies were aptly summarized by the RTC, thus:

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Bayani Santos, senior manager of defendant DBP testified that he has been employed therein since November 14, 1974. His functions include the handling of special accounts or non-performing accounts of the bank. He said that he brought with him notices of foreclosure for the Hotel Mindanao on February 27, 1984[,] for the Pines Hotel on March 22, 1984 and for Taal Vista Lodge on June 11, 1984. When asked about proofs of posting and publication, witness Santos showed a Xerox copy of affidavit of publication for the extrajudicial sale of Tagaytay property. Witness Santos likewise presented letters dated March 2 and May 23, 1984 addressed to plaintiff RHC about the auction sale of the Tagaytay and Baguio properties on March 22, 27 and June 11, 1984. He explained that there were two (2) dates set for auction of the Baguio properties because the first date was postponed. About the total loan obligation of plaintiff RHC, witness Santos merely pointed to the application for foreclosure of the real estate and chattel mortgages dated January 11, 1984. He concluded that there was no document pertaining to any restructuring agreement. Witness Roberto Cuenca, son of Rodolfo Cuenca, the President and Chairman of plaintiff RHC, testified that he served the company as Vice President for operations and then Executive Vice President. He declared that his functions included the management of operations of the three (3) hotels of plaintiff RHC. He revealed that their business started sometime in 1960 and Cuenca Investment Corporation is a family corporation which owned shares in plaintiff RHC. He admitted that defendant DBP was their principal creditor particularly in the capital improvement of Pines Hotel, that their loans with defendant DBP were secured by real estate and chattel mortgages including the three (3) hotels and the personal properties found in the Makati Head office, that in 1984 defendant DBP foreclosed all the mortgaged properties for a claim of Php114,005,404.02 and that thereafter, assumed control of the management of the hotels. He likewise intimated that contrary to the claim of defendant DBP, plaintiff RHC’s books of account indicated merely a loan balance of Php84,000,000.00 with accounts receivables from their clients of about Php20-23 million. Hence, plaintiff RHC filed the cases before the court having jurisdiction over the mortgaged properties, fro (sic) injunction and declaratory judgment that defendant DBP was without right to foreclose the mortgages. He disclosed that despite of the applications for injunction pending before the trial courts, defendant DBP proceeded with the foreclosure of the mortgages without complying with the legal requirements of notice, posting and publication. He likewise disclosed that in October 1984, Pines Hotel was gutted by fire while in the hands of defendant DBP. Resultantly, defendant DBP collected the insurance proceeds of the hotel amount to Php50 million. When asked about the condition of the hotels, witness stated that in 1988, Pines Hotel and Vista Lodge were sold to defendant SMIC. On cross-examination, witness Roberto Cuenca recounted that sometime in 1980 and 1982, there were conversion of the loans to equity of defendant DBP considering the default in the payment of the loan obligations. On redirect-examination, witness Cuenca admitted that since plaintiff RHC was in default in paying its obligations, he negotiated for three (3) options with defendant DBP which are the conversion of equity, loan restructuring and loan with dacion en pago x x x x Witness Rodolfo Cuenca’s testimonies merely corroborated the testimonies of witness Roberto Cuenca. x x x Upon the other hand, [respondents] proffered in evidence the testimonies of Lourdes Frangue, the Administrative Officer of DBP, Dolores Santos, the Chief of the Transaction Processing and Retail Division, and Atty. Epitacio Borcelis, the corporate secretary of SMIC, which were narrated by the RTC in this wise: Witness Lourdes Frangue, Administrative Officer of DBP testified that she was employed by DBP on May 4, 1982 and was assigned to the Litigation and Foreclosure Group in 1984. She recounted that her duties include attending to foreclosure records and documents and that she encountered the records of RHC when she undertook the foreclosure proceedings in 1984. She presented the certificates of sales of the foreclosed

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properties particularly the Cagayan de Oro properties dated February 27, 1984, the Baguio properties dated March 22, 1984 and the Tagaytay properties dated June 11, 1984. Witness Frangue revealed that [in] the foreclosure of the mortgaged properties of RHC, DBP acquired the same being the highest bidder in the auction sales and then titles were subsequently consolidated in the name [of] DBP. On cross-examination, Witness Frangue denied any personal knowledge about the loan obligations of RHC stating that a different department handled the document of the subject loans. Witness Dolores Santos, Chief of the Transaction Processing and Retail Division of DBP testified that she was with the bank since 1982 as a Senior Clerk of the Security and Transport Department. She revealed that she was promoted as a supervisor, she recounted that she handled the past due accounts and acquired assets of the bank and its records, as a custodian. She declared that she only knew about the accounts of RHC on August 8, 1992 on the Statement of Accounts. On cross-examination, witness Santos likewise denied any personal knowledge of the loans of RHC. x x x x Atty. Epitacio Borcelis, corporate secretary of SMIC and lawyer-in-charge of the acquisition of real estate properties of SMIC testified that his duties include the keeping of all the corporate records, representing the company in the acquisition of properties like the Pines Hotel and the Taal Vista Lodge. When asked about notice of lis pendens, witness admitted having knowledge of the annotation in the title of Baguio Pines Hotel but denied as to the Taal Vista Property. Likewise, witness denied that SMIC bought RHC’s properties from DBP alleging that it bought the properties from Tagaytay Taal Management Corporation (TTMC for short). Witness brought up the court case between Robinsons and DBP. However, when the witness was confronted about the deeds of sale between DBP and TTMC and TTMC and SMIC, with the material dates stated therein where the supposed first sale that took place between DBP and TTMC was dated June 11, 1988, witness Borcelis explained that it was because there was [an] agreement between SMIC and TTMC that the full payment by TTMC of the purchase price of the properties will be taken from SMIC. When asked about the stated agreement, witness presented no document pertaining to it. x x x In the Decision dated February 13, 2004, the RTC nullified the foreclosure sale of the disputed real and personal properties, and at the same time, discharged Rodolfo Cuenca from personal liability for lack of evidence. The RTC also found that SMIC acted in bad faith when it purchased the Taal Vista Lodge Hotel from TTMC, and Baguio Pines Hotel from DBP.[3] The RTC disposed of the case, to wit: WHEREFORE, premises considered, judgment is hereby rendered in favor of [petitioners] and against [respondents] DBP and SMIC as follows[:] (1) The loan obligations of [petitioner] RHC to [respondent] DBP is hereby fixed at Php 114,005,404.02 from the date of this judgment with 12% interest per annum until fully paid; (2) The foreclosure of the real estate and chattel mortgages executed by [petitioner] RHC in favor of [respondent] DBP are declared void and without effect; (3) The auction sales of the subject mortgaged properties of [petitioner] RHC are likewise declared void; (4) The fire insurance proceeds of the Pines Hotel which was collected by [respondent] DBP shall be deducted from the total loan obligations of [petitioner] RHC with the corresponding 12% interest per annum from the time it was received until this judgment;

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(5) Respondent] SMIC is declared buyer in bad faith and bound by this judgment; and (6) [Petitioner] Cuenca is discharged from the obligations of [petitioner] RHC with [respondent] DBP. The counterclaims of [respondents] DBP and SMIC are denied for lack of merit.[4] Aggrieved, respondents questioned the RTC decision before the CA. As previously adverted to, the CA reversed and set aside the RTC decision, thus: WHEREFORE, the Decision dated February 13, 2004 of Branch 134 of the Regional Trial Court of Makati City is hereby REVERSED and SET ASIDE. A new one is hereby entered DISMISSING Civil Case Nos. 6342, 269-R, TG-799 and 9497 and ORDERING RHC and Rodolfo Cuenca to pay, jointly and severally, DBP the amount of P612,476,182.08, inclusive of interest, representing deficiency balance as of August 31, 2002.[5] Hence, the instant appeal taking exception to the appellate court’s disposition and positing the following issues: 1. [WHETHER] THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN HOLDING THAT THE TESTIMONIES OF RODOLFO CUENCA AND ROBERTO CUENCA WERE NOT SUFFICIENT TO SUCCESSFULLY CHALLENGE THE VALIDITY OF THE FORECLOSURE PROCEEDINGS. 2. [WHETHER] THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN HOLDING THAT THE FORECLOSURE PROCEEDINGS ARE VALID BASED ON THE CERTIFICATE OF SALE PREPARED BY THE SHERIFFS WHO CONDUCTED THE FORECLOSURE SALES. 3. [WHETHER] THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN HOLDING THAT PETITIONERS COULD NOT USE THE FIRE INSURANCE PROCEEDS TO REDEEM THE BAGUIO PINES HOTEL PROPERTY. 4. [WHETHER] THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN FIXING PETITIONERS’ OBLIGATION TO RESPONDENT DBP AT P612,476,182.08 INSTEAD OF P114,005,404.02. 5. [WHETHER] THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN HOLDING PETITIONER RODOLFO CUENCA SOLIDARILY LIABLE WITH PETITIONER RHC.[6] In all, petitioners persist in the correctness of the RTC’s disposition that: (1) the extrajudicial foreclosure and the subsequent sale of the mortgaged properties are null and void for non-compliance with the notice, posting and publication requirements provided in Act No. 3135;[7] (2) the loan obligation of petitioners to DBP is fixed at P114,005,404.02; and (3) petitioner Cuenca is discharged from the obligations of petitioner RHC to respondent DBP for lack of evidence pointing to his personal liability therefor. The petition is partly meritorious. We are in complete accord with the appellate court’s ruling that the dearth of evidence presented by petitioners inevitably failed to establish their claim that DBP did not comply with the statutory requirements on the extrajudicial foreclosure of mortgages. As plaintiffs before the trial court, petitioners rested the burden to prove by a preponderance of evidence the numerous causes of action they brought against herein respondents. Section 1 of Rule 131 of the Rules of Court, in relation to Section 1 of Rule 133, unequivocally provides:

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SECTION 1. Burden of proof. – Burden of proof is the duty of a party to present evidence on the facts in issue necessary to establish his claim or defense by the amount of evidence required by law. SECTION 1. Preponderance of evidence, how determined. – In civil cases, the party having the burden of proof must establish his case by a preponderance of evidence. In determining where the preponderance or superior weight of evidence on the issues involved lies, the court may consider all the facts and circumstances of the case, the witnesses’ manner of testifying, their intelligence, their means and opportunity of knowing the facts to which they are testifying, the nature of the facts to which they testify, the probability or improbability of their testimony, their interest or want of interest, and also their personal credibility so far as the same may legitimately appear upon the trial. The court may also consider the number of witnesses, though the preponderance is not necessarily with the greater number. Petitioners are adamant, however, that it was incumbent upon respondents to prove their denial of petitioners’ claims; i.e., foreclosure proceedings were validly conducted consistent with Act No. 3135. We disagree. Ei incumbit probatio qui dicit, non qui negat (he who asserts, not he who denies, must prove).[8] The burden of proof that foreclosure proceedings on the subject properties were not validly conducted lies with mortgagor-party litigant claiming such. We have consistently applied the ancient rule that if a plaintiff, upon whom rests the burden of proving his cause of action, fails to show in a satisfactory manner facts on which he bases his claim, the defendant is under no obligation to prove his exception or defense.[9] On this score, we find no error in the disquisition of the CA, to wit: We rule that the testimonies of Rodolfo and Roberto Cuenca were not sufficient to successfully challenge the validity of the foreclosure proceedings. We agree with the [respondents] that the testimonies of Rodolfo and Roberto Cuenca with respect to the absence of posting and publication of notices of foreclosure sale, consisting in the words “I don’t believe,” “I don’t remember,” “I don’t think” and “if I recall,” without being supported by any convincing and substantial evidence, were not sufficient to prove lack of compliance on the part of DBP with the requirements of notice, posting and publication prescribed in Act No. 3135. It must be emphasized that the allegation of Rodolfo and Roberto Cuenca that they, as officers of RHC, failed to receive notices of the foreclosure sale could not successfully defeat the validity of the foreclosure proceedings. As held by the Supreme Court in Philippine National Bank v. Nepomuceno Productions, Inc., x x x personal notice to the mortgagor is not necessary for the validity of the foreclosure proceedings, thus: “The principal object of a notice of sale in a foreclosure of mortgage is not so much to notify the mortgagor as to inform the public generally of the nature and condition of the property to be sold, and of the time, place, and terms of the sale. Notices are given to secure bidders and prevent a sacrifice of the property. Clearly, the statutory requirements of posting and publication are mandated, not for the mortgagor’s benefit, but for the public or third persons. In fact, personal notice to the mortgagor in extrajudicial foreclosure proceedings is not even necessary, unless stipulated.” Likewise, the [petitioners] could not impugn the validity of the foreclosure proceedings by the mere fact that both Rodolfo and Roberto Cuenca could not recall whether DBP applied for writs of possession and posted bond thereto during the redemption period as mandated by Section 7 of Act No. 3135. In a civil case, the burden of proof is on the plaintiff to establish his case through a preponderance of evidence. If he claims a right granted or created by law, he must prove his claim by competent evidence. He must rely on the strength of his own evidence and not on the weakness of that of his opponent x x x. In the instant case, We find that the testimonies of Rodolfo and Roberto Cuenca on the matter could not be considered as competent evidence to prove that DBP took possession of the disputed properties in blatant violation of Section 7 of Act No. 3135. Their testimonies were at best self-serving and devoid of corroboration as they did not bother to support the same with any documentary evidence. We hasten to add that DBP did not merely rely on the weakness of the evidence of [petitioners] in resisting the latter’s claim. DBP presented in court three (3) Certificates covering the sale of the disputed

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properties to bolster its assertion that it complied with the statutory requirements under Section 3 of Act 3135. These Certificates of Sale, prepared by Sheriffs that conducted the foreclosure proceedings, clearly reveal that DBP followed the mandate of Section 3 of Act 3135 when it foreclosed the disputed properties x x x.[10] We likewise agree with the CA’s holding that RHC cannot use the fire insurance proceeds of the Baguio Pines Hotel to redeem the said property. The appellate court, citing Development Bank of the Philippines v. West Negros College, Inc.,[11] correctly ruled that petitioners must pay respondent DBP the entire obligation of RHC, and not merely the purchase price of the said hotel. Nonetheless, on the actual amount of RHC’s obligation to DBP, we find it proper to reinstate the RTC’s holding thereon, i.e., the loan obligation is fixed at P114,005,404.02 from the date of the RTC judgment with 12% interest per annum until fully paid. We cannot subscribe to the CA’s computation of RHC’s indebtedness to DBP which was pegged at P612,476,182.08, inclusive of interest. The CA set aside the RTC’s holding thereon and based its finding on the Statement of Total Claim prepared by DBP. These documents show that RHC’s deficiency balance as of August 31, 2002, after deducting the total purchase price of the subject properties and the insurance proceeds plus the corresponding interest computed at 21% per annum from 1984 to August 21, 2002, is P612,476,182.08. However, as correctly pointed out by petitioners, these documents are inadmissible and constitute hearsay evidence because the persons who prepared the documents were not presented in court and subjected to cross-examination.[12] At this point, we cite with favor the RTC’s holding: After a careful scrutiny of the records of the case, the court finds that the balance loan obligation of [petitioner] RHC with [respondent] DBP was PHP114,005,404.02 as of January 11, 1984 as stated in the application for foreclosure submitted by the parties to the court. Said amount was the basis of the protest of [petitioner] RHC in filing its complaints for injunction and declaratory relief principally relying on the principle of merger of rights or ownership of [respondent] DBP of shareholdings of [petitioner] RHC. With the admission of witness Roberto Cuenca himself that the conversion of the loan obligations to equity took place sometime in 1980 and 1982, the filing of the complaints by [petitioner] RHC starting on February 6, 1984 protesting the claims of the [respondent] DBP in its application for foreclosure of the mortgages dated January 11, 1984 and relying on the aforesaid conversion of the loans, the instances of burning of the Pines Hotel sometime in October 1984 under the administration of [respondent] DBP which was duly noted by the Supreme Court in G.R. No. 68788, the foreclosure of all mortgaged real estate and chattel properties of [petitioner] RHC that started on February 27, 1984 or nearly one (1) month from the application of the foreclosures of [respondent] DBP, the subsequent take over by [respondent] DBP of the management of the assets of [petitioner] RHC and the sales therefrom while the cases of the protest of [petitioner] RHC were pending, in the absence of any other competent proof of proper accounting involving the loans of [petitioner] RHC, the court deems it proper and just to fix the loan obligations of [petitioner] RHC at Php114,005,404.02.[13] Lastly, on the issue of petitioner Cuenca’s joint and solidary liability for RHC’s loan obligation to DBP, we sustain the RTC’s succinct holding discharging Cuenca therefrom without evidence showing his undertaking to be personally and solidarily liable for the loan obligations of RHC to DBP. WHEREFORE, premises considered, the petition is GRANTED IN PART. The Court of Appeals decision in CA-G.R. CV No. 81363 is AFFIRMED with the MODIFICATION that the following disposition of the Regional Trial Court in Civil Case Nos. 6342, 269-R, TG-799 and 9497 is REINSTATED, to wit:

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1. The loan obligations of petitioner Resort Hotels Corporation to respondent Development Bank of the Philippines is fixed at P114,005,404.02 from the date of the RTC judgment with 12% interest per annum until fully paid; 2. The fire insurance proceeds for the Baguio Pines Hotel which was collected by respondent Development Bank of the Philippines shall be deducted from the total loan obligations of petitioner Resort Hotels Corporation with the corresponding 12% interest per annum from the time it was received until this judgment; 3. Petitioner Rodolfo Cuenca is discharged from the obligations of petitioner Resort Hotels Corporation to respondent Development Bank of the Philippines. No pronouncement as to costs. SO ORDERED.

Judicial Notice

Suplico vs NEDACase Digest:

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

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

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

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

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

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

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

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no justiciable controversy, and an adjudication thereon would be of no practical use or value as courts do not sit to adjudicate mere academic questions to satisfy scholarly interest, however intellectually challenging.

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

EN BANC ROLEX SUPLICO, Petitioner, – versus – NATIONAL ECONOMIC AND DEVELOPMENT AUTHORITY, represented by NEDA SECRETARY ROMULO L. NERI, and the NEDA-INVESTMENT COORDINATION COMMITTEE, DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS (DOTC), represented by DOTC SECRETARY LEANDRO MENDOZA, including the COMMISSION ON INFORMATION AND COMMUNICATIONS TECHNOLOGY, headed by its Chairman, RAMON P. SALES, THE TELECOMMUNICATIONS OFFICE, BIDS AND AWARDS FOR INFORMATION AND COMMUNICATIONS TECHNOLOGY (ICT), headed by DOTC ASSISTANT SECRETARY ELMER A. SONEJA as Chairman, and the TECHNICAL WORKING GROUP FOR ICT, AND DOTC ASSISTANT SECRETARY LORENZO FORMOSO, AND ALL OTHER OPERATING UNITS OF THE DOTC FOR INFORMATION AND COMMUNICATIONS TECHNOLOGY, and ZTE CORPORATION, AMSTERDAM HOLDINGS, INC., AND ALL PERSONS ACTING IN THEIR BEHALF, Respondents.G.R. No. 178830 July 14, 2008 x------------------------------------------------------------------------------------------- x AMSTERDAM HOLDINGS, INC., and NATHANIEL SAUZ, Petitioners, – versus –DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS, SECRETARY LEANDRO MENDOZA, COMMISSION ON INFORMATION AND COMMUNICATIONS TECHNOLOGY, and ASSISTANT SECRETARY LORENZO FORMOSO III, Respondents.G.R. No. 179317x------------------------------------------------------------------------------------------- xGALELEO P. ANGELES, VICENTE C. ANGELES, JOB FLORANTE L. CASTILLO, TRINI ANNE G. NIEVA, ROY ALLAN T. ARELLANO, CARLO MAGNO M. REONAL, ETHEL B. REGADIO, RAENAN B. MALIG, AND VINALYN M. POTOT, TOGETHER WITH LAWYERS AND ADVOCATES FOR ACCOUNTABILITY, TRANSPARENCY, INTEGRITY AND GOOD GOVERNANCE (LATIGO), Petitioners, – versus – DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS (DOTC), represented by DOTC SECRETARY LEANDRO MENDOZA, and ZHONG XING EQUIPMENT (ZTE) COMPANY, LTD., AND ANY AND ALL PERSONS ACTING ON THEIR BEHALF, Respondents.G.R. No. 179613 x------------------------------------------------------------------------------------------- x R E S O L U T I O N

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REYES, R.T., J.: Under consideration is the Manifestation and Motion[1] dated October 26, 2007 of the Office of the Solicitor General (OSG) which states: The Office of the Solicitor General (OSG) respectfully avers that in an Indorsement dated October 24, 2007, the Legal Service of the Department of Transportation and Communications (DOTC) has informed it of the Philippine Government’s decision not to continue with the ZTE National Broadband Network Project (see attachment[2]). That said, there is no more justiciable controversy for this Honorable Court to resolve. WHEREFORE, public respondents respectfully pray that the present petitions be DISMISSED. On November 13, 2007, the Court noted the OSG’s manifestation and motion and required petitioners in G.R. Nos. 178830, 179317, and 179613 to comment. On December 6, 2007, Rolex Suplico, petitioner in G.R. No. 178830, filed his Consolidated Reply and Opposition,[3] opposing the aforequoted OSG Manifestation and Motion, arguing that: 66. Aside from the fact that the Notes of the Meeting Between President Gloria Macapagal-Arroyo and Chinese President Hu Jintao held 2 October 2007 were not attached to the 26 October 2007 Manifestation and Motion – thus depriving petitioners of the opportunity to comment thereon – a mere verbally requested 1st Indorsement is not sufficient basis for the conclusion that the ZTE-DOTC NBN deal has been permanently scrapped. 67. Suffice to state, said 1st Indorsement is glaringly self-serving, especially without the Notes of the Meeting Between President Gloria Macapagal-Arroyo and Chinese President Hu Jintao to support its allegations or other proof of the supposed decision to cancel the ZTE-DOTC NBN deal. Public respondents can certainly do better than that.[4] Petitioner Suplico further argues that: 79. Assuming arguendo that some aspects of the present Petition have been rendered moot (which is vehemently denied), this Honorable Court, consistent with well-entrenched jurisprudence, may still take cognizance thereof.[5] Petitioner Suplico cites this Court’s rulings in Gonzales v. Chavez,[6] Rufino v. Endriga,[7] and Alunan III v. Mirasol[8] that despite their mootness, the Court nevertheless took cognizance of these cases and ruled on the merits due to the Court’s symbolic function of educating the bench and the bar by formulating guiding and controlling principles, precepts, doctrines, and rules. On January 31, 2008, Amsterdam Holdings, Inc. (AHI) and Nathaniel Sauz, petitioners in G.R. No. 179317, also filed their comment expressing their sentiments, thus: 3. First of all, the present administration has never been known for candor. The present administration has a very nasty habit of not keeping its word. It says one thing, but does another. 4. This being the case, herein petitioners are unable to bring themselves to feel even a bit reassured that the government, in the event that the above-captioned cases are dismissed, will not backtrack, re-transact, or even resurrect the now infamous NBN-ZTE transaction. This is especially relevant since what was attached to the OSG’s Manifestation and Motion was a mere one (1) page written communication sent by the Department of Transportation and Communications (DOTC) to the OSG, allegedly relaying that the Philippine Government has decided not to continue with the NBN project “x x x due to several reasons and constraints.”

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Petitioners AHI and Sauz further contend that because of the transcendental importance of the issues raised in the petition, which among others, included the President’s use of the power to borrow, i.e., to enter into foreign loan agreements, this Court should take cognizance of this case despite its apparent mootness. On January 15, 2008, the Court required the OSG to file respondents’ reply to petitioners’ comments on its manifestation and motion. On April 18, 2008, the OSG filed respondents’ reply, reiterating their position that for a court to exercise its power of adjudication, there must be an actual case or controversy – one which involves a conflict of legal rights, an assertion of opposite legal claims susceptible of judicial resolution; the case must not be moot or academic or based on extra-legal or other similar considerations not cognizable by a court of justice.[9] Respondents also insist that there is no perfected contract in this case that would prejudice the government or public interest. Explaining the nature of the NBN Project as an executive agreement, respondents stress that it remained in the negotiation stage. The conditions precedent[10] for the agreement to become effective have not yet been complied with.Respondents further oppose petitioners’ claim of the right to information, which they contend is not an absolute right. They contend that the matters raised concern executive policy, a political question which the judicial branch of government would generally hesitate to pass upon. On July 2, 2008, the OSG filed a Supplemental Manifestation and Motion. Appended to it is the Highlights from the Notes of Meeting between President Gloria Macapagal-Arroyo and Chinese President Hu Jintao, held in XI Jiao Guesthouse, Shanghai, China, on October 2, 2007. In the Notes of Meeting, the Philippine Government conveyed its decision not to continue with the ZTE National Broadband Network Project due to several constraints. The same Notes likewise contained President Hu Jintao’s expression of understanding of the Philippine Government decision. We resolve to grant the motion. Firstly, the Court notes the triple petitions to be for certiorari, prohibition and mandamus, with application for the issuance of a Temporary Restraining Order (TRO) and/or Preliminary Injunction. The individual prayers in each of the three (3) consolidated petitions are: G.R. No. 178830 WHEREFORE, it is respectfully prayed of this Honorable Court: 1. Upon the filing of this Petition, pursuant to the second paragraph of Rule 58, Section 5 of the Rules of Court, issue forthwith an ex parte temporary restraining order enjoining respondents, their subordinates, agents, representatives and any and all persons acting on their behalf from pursuing, entering into indebtedness, disbursing funds, and implementing the ZTE-DOTC Broadband Deal; 2. Compel respondents, upon Writ of Mandamus, to forthwith produce and furnish petitioner or his undersigned counsel a certified true copy of the contract or agreement covering the NBN project as agreed upon with ZTE Corporation; 3. Schedule Oral Arguments in the present case pursuant to Rule 49 in relation to Section 2, Rule 56 of the revised Rules of Court; and, 4. Annul and set aside the award of the ZTE-DOTC Broadband Deal, and compel public respondents to forthwith comply with pertinent provisions of law regarding procurement of government ICT contracts and public bidding for the NBN contract.[11] (Emphasis supplied)

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G.R. No. 179317 WHEREFORE, petitioners Amsterdam Holdings, Inc., and Nathaniel Sauz respectfully pray as follows: A. upon the filing of this Petition for Mandamus and conditioned upon the posting of a bond in such amount as the Honorable Court may fix, a temporary restraining order and/or writ of preliminary injunction be issued directing the Department of Transportation and Communication, the Commission on Information and Communications Technology, all other government agencies and instrumentalities, their officers, employees, and/or other persons acting for and on their behalf to desist during the pendency of the instant Petition for Mandamus from entering into any other agreements and from commencing with any kind, sort, or specie of activity in connection with the National Broadband Network Project; B. the instant Petition for Mandamus be given due course; and, C. after due consideration of all relevant issues, judgment be rendered directing respondents to allow herein petitioners access to all agreements entered into with the Government of China, the ZTE Corporation, and/or other entities, government instrumentalities, and/or individuals with regard to the National Broadband Network Project.[12] (Emphasis supplied) G.R. No. 179613 WHEREFORE, it is respectfully prayed of this Honorable Court to: 1. Compel respondents, upon Writ of Mandamus, to forthwith produce and furnish petitioner or his undersigned counsel a certified true copy of the contract or agreement covering the NBN project as agreed upon with ZTE Corporation; 2. Schedule Oral Arguments in the present case pursuant to Rule 49 in relation to Section 2, Rule 56 of the Revised Rules of Court; 3. Annul and set aside the award of the contract for the national broadband network to respondent ZTE Corporation, upon the ground that said contract, as well as the procedures resorted to preparatory to the execution thereof, is contrary to the Constitution, to law and to public policy; 4. Compel public respondent to forthwith comply with pertinent provisions of law regarding procurement of government infrastructure projects, including public bidding for said contract to undertake the construction of the national broadband network.[13] (Emphasis supplied) On September 11, 2007, the Court issued a TRO[14] in G.R. No. 178830, enjoining the parties from “pursuing, entering into indebtedness, disbursing funds, and implementing the ZTE-DOTC Broadband Deal and Project” as prayed for. Pertinent parts of the said Order read: WHEREAS, the Supreme Court, on 11 September 2007, adopted a resolution in the above-entitled case, to wit: “G.R. No. 178830 (Rolex Suplico vs. National Economic and Development Authority, represented by NEDA Secretary Romulo L. Neri, and the NEDA Investment Coordination Committee, Department of Transportation and Communications (DOTC), represented by DOTC Secretary Leandro Mendoza, including the Commission on Information and Communications Technology, headed by its Chairman, Ramon P. Sales, The Telecommunications Office, Bids and Awards for Information and Communications Technology Committee (ICT), headed by DOTC Assistant Secretary Elmer A. Soneja as Chairman, and The Technical Working Group for ICT, and DOTC Assistant Secretary Lorenzo Formoso, and All Other Operating Units of the DOTC for Information and Communications Technology, and ZTE Corporation, Amsterdam Holdings, Inc., and

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ARESCOM, Inc.—Acting on the instant petition with prayer for temporary restraining order and/or writ of preliminary injunction, the Court Resolved, without giving due course to the petition, to x x x x (d) Issue a TEMPORARY RESTRAINING ORDER, effective immediately and continuing until further orders from this Court, enjoining the (i) National Economic and Development Authority, (ii) NEDA-Investment Coordination Committee, (iii) Department of Transportation and Communications, Commission on Information and Communications Technology, (iv) Telecommunications Office, Bids and Awards for Information and Communications Technology Committee (ICT), (v) Technical Working Group for ICT, and all other Operating Units of the DOTC for Information and Communications Technology, (vi) ZTE Corporation; (vii) Amsterdam Holdings, Inc., and (viii) ARESCOM, Inc., and any and all persons acting on their behalf from ‘pursuing, entering into indebtedness, disbursing funds, and implementing the ZTE-DOTC Broadband Deal and Project’ as prayed for.” NOW THEREFORE, effective immediately and continuing until further orders from this Court, You, Respondents (i) National Economic and Development Authority, (ii) NEDA-Investment Coordination Committee, (iii) Department of Transportation and Communications, Commission on Information and Communications Technology, (iv) Telecommunications Office, Bids and Awards for Information and Communications Technology Committee (ICT), (v) Technical Working Group for ICT, and all other Operating Units of the DOTC for Information and Communications Technology, (vi) ZTE Corporation; (vii) Amsterdam Holdings, Inc., and (viii) ARESCOM, Inc., and any and all persons acting on their behalf are hereby ENJOINED from “pursuing, entering into indebtedness, disbursing funds, and implementing the ZTE-DOTC Broadband Deal and Project” as prayed for.[15] (Emphasis supplied.) Petitioners in G.R. Nos. 178830 and 179613 pray that they be furnished certified true copies of the “contract or agreement covering the NBN project as agreed upon with ZTE Corporation.” It appears that during one of the Senate hearings on the NBN project, copies of the supply contract[16] were readily made available to petitioners.[17] Evidently, the said prayer has been complied with and is, thus, mooted. When President Gloria Macapagal-Arroyo, acting in her official capacity during the meeting held on October 2, 2007 in China, informed China’s President Hu Jintao that the Philippine Government had decided not to continue with the ZTE-National Broadband Network (ZTE-NBN) Project due to several reasons and constraints, there is no doubt that all the other principal prayers in the three petitions (to annul, set aside, and enjoin the implementation of the ZTE-NBN Project) had also become moot. Contrary to petitioners’ contentions that these declarations made by officials belonging to the executive branch on the Philippine Government’s decision not to continue with the ZTE-NBN Project are self-serving, hence, inadmissible, the Court has no alternative but to take judicial notice of this official act of the President of the Philippines. Section 1, Rule 129 of the Rules of Court provides: SECTION 1. Judicial Notice, when mandatory. – A court shall take judicial notice, without introduction of evidence, of the existence and territorial extent of states, their political history, forms of government and symbols of nationality, the law of nations, the admiralty and maritime courts of the world and their seals, the political constitution and history of the Philippines, the official acts of the legislative, executive and judicial departments of the Philippines, the laws of nature, the measure of time, and the geographical divisions. (Emphasis supplied)Under the rules, it is mandatory and the Court has no alternative but to take judicial notice of the official acts of the President of the Philippines, who heads the executive branch of our government. It is further provided in the above-quoted rule that the court shall take judicial notice of the foregoing facts without introduction of evidence. Since we consider the act of cancellation by President Macapagal-Arroyo of the proposed ZTE-NBN Project during the meeting of October 2, 2007 with the Chinese President in China as an official act of the executive department, the Court must take judicial notice of such official act without need of evidence.

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In David v. Macapagal-Arroyo,[18] We took judicial notice of the announcement by the Office of the President banning all rallies and canceling all permits for public assemblies following the issuance of Presidential Proclamation No. 1017 and General Order No. 5. In Estrada v. Desierto,[19] the Court also resorted to judicial notice in resolving the factual ingredient of the petition. Moreover, under Section 2, paragraph (m) of Rule 131 of the Rules of Court, the official duty of the executive officials[20] of informing this Court of the government’s decision not to continue with the ZTE-NBN Project is also presumed to have been regularly performed, absent proof to the contrary. Other than petitioner AHI’s unsavory insinuation in its comment, the Court finds no factual or legal basis to disregard this disputable presumption in the present instance. Concomitant to its fundamental task as the ultimate citadel of justice and legitimacy is the judiciary’s role of strengthening political stability indispensable to progress and national development. Pontificating on issues which no longer legitimately constitute an actual case or controversy will do more harm than good to the nation as a whole. Wise exercise of judicial discretion militates against resolving the academic issues, as petitioners want this Court to do. This is especially true where, as will be further discussed, the legal issues raised cannot be resolved without previously establishing the factual basis or antecedents. Judicial power presupposes actual controversies, the very antithesis of mootness. In the absence of actual justiciable controversies or disputes, the Court generally opts to refrain from deciding moot issues. Where there is no more live subject of controversy, the Court ceases to have a reason to render any ruling or make any pronouncement. Kapag wala nang buhay na kaso, wala nang dahilan para magdesisyon ang Husgado. In Republic Telecommunications Holdings, Inc. v. Santiago,[21] the lone issue tackled by the Court of Appeals (CA) was whether the Securities Investigation and Clearing Department (SICD) and Securities and Exchange Commission (SEC) en banc committed reversible error in issuing and upholding, respectively, the writ of preliminary injunction. The writ enjoined the execution of the questioned agreements between Qualcomm, Inc. and Republic Telecommunications Holdings, Inc. (RETELCOM). The implementation of the agreements was restrained through the assailed orders of the SICD and the SEC en banc which, however, were nullified by the CA decision. Thus, RETELCOM elevated the matter to this Court praying for the reinstatement of the writ of preliminary injunction of the SICD and the SEC en banc. However, before the matter was finally resolved, Qualcomm, Inc. withdrew from the negotiating table. Its withdrawal had thwarted the execution and enforcement of the contracts. Thus, the resolution of whether the implementation of said agreements should be enjoined became no longer necessary. Equally applicable to the present case is the Court ruling in the above-cited Republic Telecommunications. There We held, thus: Indeed, the instant petition, insofar as it assails the Court of Appeals’ Decision nullifying the orders of the SEC en banc and the SICD, has been rendered moot and academic. To rule, one way or the other, on the correctness of the questioned orders of the SEC en banc and the SICD will be indulging in a theoretical exercise that has no practical worth in view of the supervening event. The rule is well-settled that for a court to exercise its power of adjudication, there must be an actual case or controversy – one which involves a conflict of legal rights, an assertion of opposite legal claims susceptible of judicial resolution; the case must not be moot or academic or based on extra-legal or other similar considerations not cognizable by a court of justice. Where the issue has become moot and academic, there is no justiciable controversy, and an adjudication thereon would be of no practical use or value as courts do not sit to adjudicate mere academic questions to satisfy scholarly interest, however intellectually challenging.

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In the ultimate analysis, petitioners are seeking the reinstatement of the writ of injunction to prevent the concerned parties from pushing through with transactions with Qualcomm, Inc. Given that Qualcomm, Inc. is no longer interested in pursuing the contracts, there is no actual substantial relief to which petitioners would be entitled and which would be negated by the dismissal of the petition. The Court likewise finds it unnecessary to rule whether the assailed Court of Appeals’ Decision had the effect of overruling the Court’s Resolution dated 29 January 1999, which set aside the TRO issued by the appellate court. A ruling on the matter practically partakes of a mere advisory opinion, which falls beyond the realm of judicial review. The exercise of the power of judicial review is limited to actual cases and controversies. Courts have no authority to pass upon issues through advisory opinions or to resolve hypothetical or feigned problems. While there were occasions when the Court passed upon issues although supervening events had rendered those petitions moot and academic, the instant case does not fall under the exceptional cases. In those cases, the Court was persuaded to resolve moot and academic issues to formulate guiding and controlling constitutional principles, precepts, doctrines or rules for future guidance of both bench and bar. In the case at bar, the resolution of whether a writ of preliminary injunction may be issued to prevent the implementation of the assailed contracts calls for an appraisal of factual considerations which are peculiar only to the transactions and parties involved in this controversy. Except for the determination of whether petitioners are entitled to a writ of preliminary injunction which is now moot, the issues raised in this petition do not call for a clarification of any constitutional principle or the interpretation of any statutory provision.[22] Secondly, even assuming that the Court will choose to disregard the foregoing considerations and brush aside mootness, the Court cannot completely rule on the merits of the case because the resolution of the three petitions involves settling factual issues which definitely requires reception of evidence. There is not an iota of doubt that this may not be done by this Court in the first instance because, as has been stated often enough, this Court is not a trier of facts. Ang pagpapasiya sa tatlong petisyon ay nangangailangan ng paglilitis na hindi gawain ng Hukumang ito. Respondent ZTE, in its Comment in G.R. No. 178830,[23] correctly pointed out that since petitioner Suplico filed his petition directly with this Court, without prior factual findings made by any lower court, a determination of pertinent and relevant facts is needed. ZTE enumerated some of these factual issues, to wit: (1) Whether an executive agreement has been reached between the Philippine and Chinese governments over the NBN Project; (2) Whether the ZTE Supply Contract was entered into by the Republic of the Philippines, through the DOTC, and ZTE International pursuant to, and as an integral part of, the executive agreement; (3) Whether a loan agreement for the NBN Project has actually been executed; (4) Whether the Philippine government required that the NBN Project be completed under a Build-Operate-and-Transfer Scheme; (5) Whether the AHI proposal complied with the requirements for an unsolicited proposal under the BOT Law; (6) Whether the Philippine government has actually earmarked public finds for disbursement under the ZTE Supply Contract; and

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(7) Whether the coverage of the NBN Project to be supplied under the ZTE Supply Contract is more extensive than that under the AHI proposal or such other proposal submitted therefor.[24] Definitely, some very specific reliefs prayed for in both G.R. Nos. 178830 and 179613 require prior determination of facts before pertinent legal issues could be resolved and specific reliefs granted. In G.R. No. 178830, petitioner seeks to annul and set aside the award of the ZTE-DOTC Broadband Deal and compel public respondents to forthwith comply with pertinent provisions of law regarding procurement of government ICT contracts and public bidding for the NBN contract. In G.R. No. 179613, petitioners also pray that the Court annul and set aside the award of the contract for the national broadband network to respondent ZTE Corporation, upon the ground that said contract, as well as the procedures resorted to preparatory to the execution thereof, is contrary to the Constitution, to law and to public policy. They also ask the Court to compel public respondent to forthwith comply with pertinent provisions of law regarding procurement of government infrastructure projects, including public bidding for said contract to undertake the construction of the national broadband network. It is simply impossible for this Court “to annul and set aside the award of the ZTE-DOTC Broadband Deal” without any evidence to support a prior factual finding pointing to any violation of law that could lead to such annulment order. For sure, the Supreme Court is not the proper venue for this factual matter to be threshed out. Thirdly, petitioner Suplico in G.R. No. 178830 prayed that this Court order “public respondents to forthwith comply with pertinent provisions of law regarding procurement of government ICT contracts and public bidding for the NBN contract.”[25] It would be too presumptuous on the part of the Court to summarily compel public respondents to comply with pertinent provisions of law regarding procurement of government infrastructure projects without any factual basis or prior determination of very particular violations committed by specific government officials of the executive branch. For the Court to do so would amount to a breach of the norms of comity among co-equal branches of government. A perceived error cannot be corrected by committing another error. Without proper evidence, the Court cannot just presume that the executive did not comply with procurement laws. Should the Court allow itself to fall into this trap, it would plainly commit grave error itself. Magiging kapangahasan sa Hukumang ito na pilitin ang mga pinipetisyon na tumalima sa batas sa pangongontrata ng pamahalaan kung wala pang pagtitiyak o angkop na ebidensiya ng nagawang paglabag dito. Let it be clarified that the Senate investigation in aid of legislation cannot be the basis of Our decision which requires a judicial finding of facts. Justice Antonio T. Carpio takes the view that the National Broadband Network Project should be declared null and void. The foregoing threefold reasons would suffice to address the concern of Our esteemed colleague. The Court is, therefore, constrained to dismiss the petitions and deny them due course because of mootness and because their resolution requires reception of evidence which cannot be done in an original petition brought before the Supreme Court. WHEREFORE, the petitions are DISMISSED. The Temporary Restraining Order issued on September 11, 2007 is DISSOLVED. SO ORDERED.

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Estioca vs People

THIRD DIVISIONVALCESAR ESTIOCA y MACAMAY, Petitioner, -versus – PEOPLE OF THE PHILIPPINES, Respondent. G.R. No. 173876 June 27, 2008x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -xD E C I S I O N CHICO-NAZARIO, J.: In this Petition for Review on Certiorari under Rule 45 of the Rules of Court,[1] petitioner Valcesar Estioca y Macamay prays for the reversal of the Decision[2] of the Court of Appeals in CA-G.R. CR No. 00036 dated 30 June 2006, affirming with modification the Decision[3] and Order[4] dated 5 April 2004 and 17 August 2004, respectively, of the Ozamiz City Regional Trial Court (RTC), Branch 35, in Criminal Case No. 3054, finding him guilty of robbery under Article 299, subdivision (a), number (2) of the Revised Penal Code. Culled from the records are the following facts: On 31 July 2001, an Information[5] was filed before the RTC charging petitioner, Marksale Bacus (Bacus), Kevin Boniao (Boniao) and Emiliano Handoc (Handoc) with robbery, thus: That on July 28, 2001, at about 8:00 o’clock in the morning, in the City of Ozamiz, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, with intent of gain, did then and there helping one another, willfully, unlawfully, and feloniously break, destroy, and destroyed the padlock of the main door of the classroom of MS. SELINA M. PANAL and once inside, the accused took, stole and carried away the following: A. One (1) Panasonic Colored TV 14 worth P6,000.00; B. One (1) Sharp Karaoke Tower Single Player color black worth P6,000.00; and C. One (1) 3D Rota Aire Stand Fan color brown worth P3,000.00; belonging to the Ozamiz City Central School represented herein by MS. SELINA M. PANAL, all valued at P15,000.00, to the damage and prejudice of the said school thereof, in the aforementioned sum of P15,000.00, Philippine Currency. When arraigned on separate dates with the assistance of their counsels de oficio, petitioner, Bacus, Boniao and Handoc pleaded “Not guilty” to the charge.[6] Thereafter, trial on the merits ensued. The prosecution presented as witnesses Nico Alforque (Nico) and Mrs. Celina M. Panal (Mrs. Panal). Their testimonies, woven together, bear the following: On 28 July 2001 (Saturday), at about 8:00 in the morning, Nico, then eleven years old and a Grade VI student of Ozamiz City Central School (OCCS), and his cousin, Mark Alforque (Mark), went to the OCCS and cleaned the classroom of a teacher named Mrs. Myrna Pactolin (Mrs. Pactolin). They received P30.00 each from Mrs. Pactolin for the chore. Afterwards, Mark went home while Nico stayed inside the OCCS because Mrs. Pactolin requested him to get some “waya-waya” and “dapna” inside the OCCS’s canal to be used as fish food.[7]

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While catching waya-waya and dapna inside the OCCS’s canal, Nico saw petitioner and Bacus enter the OCCS’s premises by climbing over the OCCS’s gate. Petitioner and Bacus then proceeded to the classroom of another teacher, Mrs. Panal, which was located near the OCCS’s canal. Thereupon, petitioner and Bacus destroyed the padlock of the classroom’s door using an iron bar and entered therein. Subsequently, petitioner and Bacus walked out of the classroom carrying a television, a karaoke and an electric fan, and thereafter brought them to the school gate. They went over the gate with the items and handed them over to Boniao and Handoc who were positioned just outside the OCCS’s gate. The items were placed inside a tricycle. After petitioner, Bacus and Boniao boarded the tricycle, Handoc drove the same and they sped away.[8] On the following day, 29 July 2001, Mrs. Panal went to the OCCS for a dance practice with her students. She proceeded to her classroom and discovered that it was forcibly opened, and that the karaoke, television and electric fan therein were missing. She immediately reported the incident to the police. The OCCS principal informed her that Nico witnessed the incident. Thereafter, petitioner, Bacus, Boniao and Handoc were charged with robbery.[9] The prosecution also submitted object evidence to buttress the testimonies of its witnesses, to wit: (1) a T-shaped slightly curved iron bar, which is 10 mm. by 12 inches in size, used in destroying the padlock of Mrs. Panal’s classroom and marked as Exhibit A; and (2) a Yeti brand, colored yellow, padlock used in Mrs. Panal’s classroom, marked as Exhibit B. For its part, the defense presented the testimonies of petitioner, Bacus, Rolly Agapay (Agapay), Boniao and Handoc to refute the foregoing accusations. Petitioner and his co-accused denied any involvement in the incident and interposed the defense of alibi. Petitioner Estioca testified that on 28 July 2001, he cleaned his house located at Laurel Street, Ozamiz City, from 8:00 in the morning up to 10:00 in the morning. After cleaning the house, he ate lunch and rested. At around 3:00 in the afternoon of the same day, he went to the house of his neighbor/friend, Junjun Ho (Junjun), to help the latter in cleaning his houseyard. However, Junjun’s father arrived, and since the father and son had to discuss important things, he decided to go home which was about past 3:00 in the afternoon. Upon arriving home, his aunt, Myrna Macamay, told him that some people had gone to the house looking for him. Later, two unidentified persons, accompanied by Boniao, came to his house and brought him to the City Hall Police Station for investigation as regards the incident.[10] During the interrogation inside the police station, a certain Michael approached him and inquired as to where he sold the television stolen from the OCCS. He told Michael not to accuse him of stealing as it is not a good joke. Michael called Bacus and Boniao who were then standing nearby, and the two pointed to him as the one who sold the television. Afterwards, one of the police officers therein told him to approach a certain Colonel Bation who was also inside the police station. Upon approaching Colonel Bation, the latter punched him in the stomach causing him to kneel down in pain. Colonel Bation asked him where he sold the television but he told him he had nothing to do with it. Colonel Bation took a whip and smacked him with it several times on the body. An emergency hospital worker named Dennis Fuentes, who was also present, stripped him naked and burned his scrotum, chest and palm with lighter, cigarette butts and matchsticks. Thereafter, he was jailed.[11] Bacus, a resident of Barangay Lam-an, Ozamiz City, declared that on the night of 27 July 2001, he slept at the guardhouse of the Ozamiz City National High School (OCNHS) which is located in front of the OCCS. On the following day, 28 July 2001, at about 7:00 in the morning, he woke up and helped his mother in selling bananas beside their house which is situated in front of the OCNHS. At about 11:00 in the morning of the same day, while on his way to Barangay Tinago, Ozamiz City, to buy chicken feed, a certain Michael Panal and an unidentified companion blocked his path and asked him if he was the one who robbed the OCCS. He told the two that he had nothing to do with the incident. The two then brought him to the nearby seashore where they were met by a group of persons headed by a certain Maning. Thereupon, they tortured and beat him for refusing to admit involvement in the incident. Subsequently, he was taken to the Ozamiz City Hall for investigation.[12]

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Agapay, an OCNHS working student and a resident of the said school, narrated that he knows Bacus because the latter resided in a house located just in front of the OCNHS; that he and Bacus usually slept at the guardhouse of the OCNHS; that on the night of 27 July 2001, he and Bacus slept at the guardhouse of the OCNHS; and that Bacus woke up on the following day, 28 July 2001, at about 8:30 in the morning.[13] Boniao, 14 years old and resident of Barangay Tinago, Ozamiz City, testified that on 28 July 2001, at 8:00 in the morning, he cleaned his parents’ house and thereafter watched television. On 30 July 2001, at 7:00 in the morning, he and Bacus went to the OCCS to pick up plastic bottles scattered therein. After gathering some plastic bottles, he and Bacus left the OCCS. While on their way home, a certain Leoncio apprehended him and brought him to his parents’ house. Upon arriving home, his mother beat him and forbade him to go out of the house. Subsequently, several persons went to his parents’ house and arrested him. He was taken to a nearby port where he was asked to identify the persons involved in the robbery of the OCCS. When he could not say anything about the incident, he was brought to the City Hall Police Station where he was jailed.[14] Handoc, a pedicab driver residing at Barangay Tinago, Ozamiz City, stated that he helped his brother-in-law in quarrying gravel at Panay-ay Diot, Clarin, Misamis Occidental, on the whole morning of 28 July 2001; that he went back to Barangay Tinago, Ozamiz City, at about 4:00 in the afternoon of 28 July 2001; that Tomas Medina, the former barangay captain, arrested him and took him to the City Hall; that police officers in the City Hall inquired as to where he sold the television stolen from the OCCS but he replied that he had nothing to do with it; that he was repeatedly beaten by police officers for denying any involvement in the incident; and that he was detained at the City Hall Jail.[15] After trial, the RTC rendered a Decision on 5 April 2004 convicting petitioner, Bacus, Boniao and Handoc of robbery under Article 299, subdivision (a), number (2), paragraph 4 of the Revised Penal Code. The trial court imposed on petitioner, Bacus and Handoc an indeterminate penalty ranging from six years and one day of prision mayor as minimum, to fourteen years, eight months and one day of reclusion temporal as maximum. Since Boniao was a minor (14 years old) when he participated in the heist, he was sentenced to a lower prison term of six months of arresto mayor as minimum to four years and two months of prision correccional as maximum. They were also ordered to pay P15,000.00 as civil liability. Nonetheless, the sentence meted out to Boniao was suspended and his commitment to the Department of Social Welfare and Development (DSWD) was ordered pursuant to Presidential Decree No. 603.[16] The dispositive portion of the decision reads: WHEREFORE, finding accused Valcesar Estioca y Macamay alias “Bango,” Marksale Bacus alias “Macoy,” Emeliano Handoc y Bullares alias “Eming” and minor Kevin Boniao guilty beyond reasonable doubt of the crime of robbery defined and penalized under Article 299, subsection (a), paragraph 2 of the Revised Penal Code and upon applying Art. 64, paragraph 1 of the Revised Penal Code and Indeterminate Sentence Law and Privileged Mitigating Circumstance of two (2) degrees lower than that prescribed for by law (Art. 68, par. 1) unto Kevin Boniao, a minor, who was 14 years old at the time of the commission of the crime, this court hereby sentences them (a) Valcesar Estioca, Marksale Bacus, Emeliano Handoc to suffer the indeterminate penalty ranging from six (6) years and one (1) day of Prision Mayor as minimum to fourteen (14) years, eight (8) months and one (1) day of Reclusion Temporal as maximum and (b) Kevin Boniao (minor) to suffer the penalty of six (6) months of Arresto Mayor as minimum to four (4) years and two (2) months of Prision Correccional as maximum and all of the accused to suffer the accessory penalty provided for by law, to indemnify the civil liability of P15,000.00 and to pay the costs. With respect to Kevin Boniao, the sentence imposed upon him is hereby suspended pursuant to PD 603 as amended and he is therefore committed to the Department of Social Welfare and Development (DSWD) for reformation, otherwise if he is incorrigible, then the sentence shall be imposed upon him by the court. The DSWD is hereby ordered to have close surveillance and supervision upon him and to constantly observe the development of his behavior and to submit to the court a report/recommendation on the matter as prescribed for by law. The Order of this court dated August 20, 2001 is hereby cancelled and revoked.

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The accused are entitled 4/5 of the time they were placed under preventive imprisonment. The cash bond in the amount of P24,000 posted by accused Valcesar Estioca is hereby cancelled and the same is ordered released and returned to the bondsman concerned.[17] Petitioner, Bacus, Boniao and Handoc filed a Motion for Reconsideration of the RTC Decision arguing that there was no conspiracy among them and that the penalty imposed was erroneous.[18] On 17 August 2004, the RTC issued an Order partially granting the motion.[19] The trial court lowered the penalty imposed on them but affirmed its earlier finding of conspiracy and conviction. It also ordered the DSWD to release and turn over Boniao to his parents. It concluded: WHEREFORE, as herein modified, the imposable indeterminate penalty meted to accused Valcesar Estioca, Marksale Bacus and Emeliano Handoc being guilty beyond reasonable doubt of he crime of Robbery, defined and penalized under paragraph 4 of Art. 299 of the Revised Penal Code upon applying Indeterminate Sentence Law with paragraph 1 of Art. 64, Revised Penal Code, ranges from four (4) years, two (2) months and one (1) day of prision correccional as minimum to eight (8) years and one (1) day of prision mayor as maximum with accessory penalty provided for by law; and for minor accused Kevin Boniao, the penalty of four (4) months of arresto mayor upon applying the privileged mitigating circumstance in Art. 68, paragraph 1 of the Revised Penal Code with Art. 64, paragraph 1 of the same Code. All of the accused shall indemnify jointly the civil liability of P15,000.00 and to pay the costs. As aforestated, minor accuser Kevin Boniao is hereby ordered released from DSWD and returned to the custody of his parents.[20] Unsatisfied, petitioner appealed the RTC Decision and Order before the Court of Appeals.[21] Bacus, Boniao and Handoc did not appeal their conviction anymore. On 30 June 2006, the Court of Appeals promulgated its Decision affirming with modification the RTC Decision and Order. The appellate court held that Boniao is exempt from criminal liability but his civil liability remains pursuant to Republic Act No. 9344 otherwise known as The Juvenile Justice and Welfare Act of 2006, thus: On a final note, considering that it is axiomatic that an appeal opens the entire case for review and considering further that any decision rendered in the appeal does not bind those who did not appeal except if beneficial to them, We hold that herein accused Kevin Boniao should be acquitted and his criminal liability extinguished pursuant to Republic Act No. 9344, otherwise known as the Juvenile Justice and Welfare Act of 2006, which took effect on May 22, 2006. The pertinent provision thereof provides, thus: “Sec. 6. Minimum Age of Criminal Responsibility. – A child fifteen (15) years of age or under at the time of the commission of the offense shall be exempt from criminal liability. However, the child shall be subjected to Section 20 of this Act. x x x x The exemption from criminal liability herein established does not include exemption from civil liability, which shall be enforced in accordance with existing laws.” WHEREFORE, premises foregoing, the appeal is hereby DISMISSED and the assailed Decision and the August 17, 2004 Order are hereby AFFIRMED subject to the modification that accused KEVIN BONIAO is hereby ACQUITTED of the crime charged pursuant to Section 6 of R.A. No. 9344, without prejudice to his civil liability.[22] On 21 August 2006, petitioner filed the instant petition on the following grounds:

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I. WHETHER OR NOT UNDER THE FACTS AND CIRCUMSTANCES OF THE ALLEGED ROBBERY WHICH HAPPENED ON BROAD DAY LIGHT AND IN THE PRESENCE OF ALLEGED TWO (2) EYEWITNESSES UNDER HUMAN EXPERIENCE CAN POSSIBLY BE PERPETUATED BY THE ACCUSED; II. WHETHER OR NOT ALLEGED LONE WITNESS NICO ALFORQUE COULD HAVE POSSIBLY WITNESS[ED] THE ALLEGED ROBBERY INCIDENT.[23] Simply put, the Court is called upon to determine whether the testimony of Nico is credible given the surrounding circumstances of the incident. Petitioner maintains that the testimony of Nico regarding the fact that the robbery was committed in broad daylight (8:00 in the morning) and in full view of Nico is against human nature. He asserts that no person would dare commit robbery in broad daylight and in the presence of other people because they would be easily identified.[24] Petitioner further claims that it was impossible for Nico to see petitioner and Bacus destroy the door of Mrs. Panal’s classroom because, according to Nico’s own Affidavit, Nico was inside the classroom of Mrs. Pactolin during the incident. He insists that the walls of Mrs. Pactolin’s classroom prevented Nico from witnessing the incident.[25] In resolving issues pertaining to the credibility of the witnesses, this Court is guided by the following well-settled principles: (1) the reviewing court will not disturb the findings of the lower court, unless there is a showing that it overlooked, misunderstood or misapplied some fact or circumstance of weight and substance that may affect the result of the case; (2) the findings of the trial court on the credibility of witnesses are entitled to great respect and even finality, as it had the opportunity to examine their demeanor when they testified on the witness stand; and (3) a witness who testifies in a clear, positive and convincing manner is a credible witness.[26] After carefully reviewing the evidence on record and applying the foregoing parameters to this case, we find no cogent reason to overturn the factual finding of the RTC that Nico’s testimony is credible. As an eyewitness to the incident, Nico positively identified petitioner, Bacus, Boniao and Handoc as those who robbed the OCCS of an electric fan, television and karaoke on the morning of 28 July 2001. His direct account of how petitioner, Bacus, Boniao and Handoc helped one another in robbing the OCCS is candid and convincing, thus: Q: Now, on July 28, 2001 at about 8:00 o’clock in the morning, could you be kind enough to tell us where were you at that time? A: We were cleaning the room of the school, sir. Q: What particular school are you referring to? A: At Ozamis Central School, sir. Q: Would you be able to tell us the name of the teacher of that particular classroom you were cleaning? A: The classroom of Mrs. Pactolin, sir. Q: Why did you clean the classroom of Mrs. Pactolin, were you being paid?

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A: Yes sir. Q: How much? A: P30.00 sir. Q: Were you alone in cleaning the classroom of Mts. Pactolin at that time? A: We were two sir. Q: Would you be kind enough to tell this honorable court who was your companion at that time? A: My cousin Mark Alforque sir. Q: Now, after cleaning the classroom of Mrs. Pactolin together with Mark Alforque, what did you do next? A: My cousin went home and I was left in the classroom because I was requested by my teacher to get fish food. Q: What fish food are you talking about Mr. Witness? A: Wayawaya and Dapna sir. Q: While getting the fishfood for your teacher, did you observed (sic) anything unusual that happened? A: Yes, sir. Q: Would you be kind enough to tell this Court now what did you observed (sic) that time when you were getting the fishfood? A: I saw somebody climbed the gate sir. x x x x Q: Where were you at that time Mr. Nico Alforque? A: I was inside the school sir. Q: What particular place are you referring? A: Near the canal sir. Q: And would you be able to tell us also how far were you when you saw these persons climbing the gate? A: I was a little bit farther sir. Q: After you saw the two persons climbing the gate, what happened after that? A: I saw that the padlock was opened. Q: What particular padlock are you referring to? A: I saw a padlock made of iron.

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Q: And what particular classroom or place were these persons you saw that they were opening the padlock? A: The classroom of Mrs. Celina Panal sir. Q: Who is this Mrs. Celina Panal? A: A teacher sir. Q: Would you be able to tell us whose classroom these persons you saw opening the padlock? A: The classroom of Mrs. Panal sir. Q: Would you be able to tell us how did they opened (sic) the classroom of Mrs. Celina Panal? A: The room was opened with the used (sic) of an iron bar sir. Q: I am showing to you this iron bar, what relation has this iron bar to the one you said a while ago? A: That is the one used by the persons to open the classroom sir. TO COURT: We would like to request your honor that this iron bar be marked as our Exh. “A.” COURT: Mark it. TO WITNESS: Q: And what about the padlock, would you be able to identify the padlock that was used (sic) by these persons? A: Yes sir. Q: I am showing to you this padlock, would you kindly tell this Court what relation this padlock to the one you stated a while ago? A: That is the padlock used (sic) by them sir. TO COURT: For identification purposes your honor, May I respectfully request that this padlock be marked as Exh. “B.” COURT: Mark it. TO WITNESS: Q: Now Mr. Nico Alforque, you said that there were two persons who opened the classroom of Mrs. Celina Panal, would you kindly identify these persons if you can see them now in court?

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A: Yes sir. Q: Would you kindly point to them if they are now here in court? The witness is pointing to a person whom when asked of his name declared that he is Valcesar Estioca. A: And would you kindly tell us also the companion of Valcesar Estioca? The witness is pointing to a person whose name is Marksale Bacus. Q: These are the persons who destroyed the padlock of the classroom of Mrs. Celina Panal? A: Yes sir. Q: After destroying the padlock Mr. Nico Alforque, what did you observed? A: I saw that they brought out the colored TV, the Karaoke and the Electric Fan. Q: You said that these persons after destroying the padlock, took the colored TV, the Karaoke and the Electric Fan, where did they go? A: After taking these things, they went out of the classroom sir. Q: And after going out of the classroom where did they go? A: They went to the gate sir. Q: And at the gate, what did you observed (sic) if any? A: I saw that there was another person sir. Q: And what was this person doing at the gate? A: They passed on the things through the person at the gate sir. Q: To whom did these persons passed these things at the gate? The witness is pointing to a man whose name is Kevin Boniao. Q: What else did you observed (sic) at the gate? A: I saw that there is another person. Q: Who was that person? The witness is pointing to accused Emeliano Handoc. Q: And what was Emeliano Handoc doing at the gate Mr. Nico Alforque? A: He was waiting at the gate sir. Q: Now after you saw these persons, what were the two accused doing at the gate when they passed the things to Kevin Boniao? A: They were riding the tricycle sir.

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Q: Could you be able to tell us who was driving the tricycle? The witness is pointing to Emeliano Handoc. Q: And after seeing these persons what did you observed (sic) after that? A: I did not see anything because I went away sir. Q: You mean to say that all those persons went away when you went away? A: Yes sir. Q: They went together, is that what you mean? A: Yes sir. Q: Are they walking or riding? A: They were riding in a tricycle sir. COURT: Q: Whose tricycle? The witness is pointing to Emeliano Handoc.[27] Mrs. Panal corroborated the foregoing testimony of Nico on relevant points.[28] The foregoing testimonies are consistent with the object evidence submitted by the prosecution. The RTC and the Court of Appeals found the testimonies of Nico and Mrs. Panal to be truthful and unequivocal and, as such, prevailed over the denial and alibi of petitioner and his cohorts. Both courts also found no ill motive on the part of Nico and Mrs. Panal. It is not incredible or against human nature for petitioner and his companions to have committed the robbery in broad daylight and in full view of Nico. There is no standard behavior of criminals before, during and after the commission of a crime.[29] Some may be so bold and daring in committing a crime in broad daylight and in full view of other persons. Others may be so cunning such that they commit crime in the darkness of the night to avoid detection and arrest by peace officers.[30] In People v. Toledo, Sr.,[31] we sustained the credibility of the eyewitness and upheld the conviction of the accused for homicide despite the circumstances existing at the crime scene -- broad daylight, full view of many persons inside the school compound, and presence of inhabited houses. It was also ruled that crimes may be committed in broad daylight and that criminals are not expected to be logical or to act normally in executing their felonious designs because committing a crime itself is not logical or reasonable, viz: Appellant [accused] also asserts that the testimony of Ronnie [eyewitness] was inherently improbable. He insists that the circumstances existing at the crime scene -- broad daylight, full view of many persons inside the school compound, presence of inhabited houses around the purok -- were such that a crime could not be committed. For a number of reasons, we find no merit in this contention. First, appellant’s premise that there were many persons in the school compound is not supported by the evidence on record. Second, crimes are known to have been committed in broad daylight within the vicinity of inhabited houses. Third, although it would be illogical and unreasonable for normal persons in full control of their faculties to commit a crime under such

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circumstances, the same does not hold true for all, especially those under the grip of criminal impulses. We cannot expect the mind of such persons to work within the parameters of what is normal, logical or reasonable, as the commission of a crime is not normal, logical or reasonable. Hence, the circumstances present in this case do not rule out appellant’s commission of the crime.[32] Besides, as aptly observed by the Office of the Solicitor General,[33] it is not improbable for petitioner and his cohorts to have committed the robbery as narrated by Nico because it happened on a Saturday, a non-school day in the OCCS. Apparently, petitioner and his companions expected that none or only few persons would go to the OCCS on said date. A perusal of the transcript of stenographic notes shows that Nico was in a canal located inside the OCCS catching waya-waya and dapna when he saw the incident, and was not inside the enclosed classroom of Mrs. Pactolin as alleged by petitioner.[34] Nico declared that he clearly saw the incident and that nothing blocked his vision.[35] Nico remained steadfast and consistent in his foregoing testimony even on cross examination, thus: Q: From the place where you were gathering fishfood at that time you cannot clearly see the room of Mrs. Panal, am I right? A: I can see it clearly sir. Q: You have not seen what were those persons doing inside the room of Mrs. Panal? A: I saw them sir. Q: You saw them taking away the Colored TV, Karaoke and the Electric Fan? A: Yes sir. Q: Who among them took with him the TV? The witness is pointing to Valcesar Estioca. Q: Aside from the TV he also carry away with him the Electric Fan and Karaoke? A: It was his companion sir. x x x x Q: Now at the gate you saw how many persons aside from that two who entered the room of Mrs. Panal? A: I saw three persons sir. Q: Was these three persons outside the gate or inside the gate? A: They were inside the gate sir. Q: And that was the time you saw the TV, Karaoke and Electric Fan turned over to those persons at the gate? A: Yes sir. Q: After that, those three persons left the place?

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A: Yes sir. Q: What about those two persons you saw entering the room of Mrs. Panal where did they go? A: They went out sir.[36] The alleged inconsistency between the affidavit of Nico and his court testimony is inconsequential. Inconsistencies between the sworn statement or affidavit and direct testimony given in open court do not necessarily discredit the witness since an affidavit, being taken ex parte, is oftentimes incomplete and is generally regarded as inferior to the testimony of the witness in open court. Judicial notice can be taken of the fact that testimonies given during trial are much more exact and elaborate than those stated in sworn statements, usually being incomplete and inaccurate for a variety of reasons, at times because of partial and innocent suggestions or for want of specific inquiries. Additionally, an extrajudicial statement or affidavit is generally not prepared by the affiant himself but by another who uses his own language in writing the affiant’s statement; hence, omissions and misunderstandings by the writer are not infrequent. Indeed, the prosecution witnesses’ direct and categorical declarations on the witness stand are superior to their extrajudicial statements.[37] Since we find no error in the factual finding of the RTC, as affirmed by the Court of Appeals, that the testimony of eyewitness Nico is credible, then the judgment of conviction against petitioner, Bacus, Boniao, and Handoc should be affirmed. The positive and credible testimony of a lone eyewitness, such as Nico, is sufficient to support a conviction.[38] We shall now determine the propriety of the penalties imposed on petitioner, Bacus, Boniao and Handoc. Article 299, subdivision (a), number (2), paragraph 4 of the Revised Penal Code provides that the penalty for robbery with use of force upon things where the value of the property taken exceeds P250.00 and the offender does not carry arms, as in this case, is prision mayor. Since no aggravating or mitigating circumstance was alleged and proven in this case, the penalty becomes prision mayor in its medium period in accordance with Article 64, paragraph 1 of the Revised Penal Code. Applying the Indeterminate Sentence Law, the range of the penalty now is prision correccional in any of its periods as minimum to prision mayor medium as its maximum. Thus, the RTC and the Court of Appeals were correct in imposing on petitioner, Bacus and Handoc, a prison term of four years, two months, and one day of prision correccional as minimum, to eight years and one day of prision mayor as maximum, because it is within the aforesaid range of penalty. With regard to Boniao, who was a minor (14 years old) at the time he committed the robbery, Article 68, paragraph 1 of the Revised Penal Code instructs that the penalty imposable on him, which is prision mayor, shall be lowered by two degrees. The RTC, therefore, acted accordingly in sentencing him to four months of arresto mayor. Nonetheless, as correctly ruled by the Court of Appeals, Boniao, who was barely 14 years of age at the time he committed the crime, should be exempt from criminal liability and should be released to the custody of his parents or guardian pursuant to Sections 6 and 20 of Republic Act No. 9344, otherwise known as The Juvenile Justice and Welfare Act of 2006, to wit: SEC. 6. Minimum Age of Criminal Responsibility. – A child fifteen years of age or under at the time of the commission of the offense shall be exempt from criminal liability. However, the child shall be subjected to an intervention program pursuant to Section 20 of this Act. x x x x The exemption from criminal liability herein established does not include exemption from civil liability, which shall be enforced in accordance with existing laws.

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Sec. 20. Children Below the Age of Criminal Responsibility. – If it has been determined that the child taken into custody is fifteen (15) years old or below, the authority which will have an initial contact with the child has the duty to immediately release the child to the custody of his/her parents or guardian, or in the absence thereof, the child’s nearest relative. Said authority shall give notice to the local social welfare and development officer who will determine the appropriate programs in consultation with the child and to the person having custody over the child. If the parents, guardians or nearest relatives cannot be located, or if they refuse to take custody, the child may be released to any of the following: a duly registered nongovernmental or religious organization; a barangay official or a member of the Barangay Council for the Protection of Children (BCPC); a local social welfare and development officer; or, when and where appropriate, the DSWD. If the child referred to herein has been found by the Local Social Welfare and Development Office to be abandoned, neglected or abused by his parents, or in the event that the parents will not comply with the prevention program, the proper petition for involuntary commitment shall be filed by the DSWD or the Local Social Welfare and Development Office pursuant to Presidential Decree No. 603, otherwise known as “The Child and Youth Welfare Code.” Although the crime was committed on 28 July 2001 and Republic Act No. 9344 took effect only on 20 May 2006, the said law should be given retroactive effect in favor of Boniao who was not shown to be a habitual criminal.[39] This is based on Article 22 of the Revised Penal Code which provides: Retroactive effect of penal laws. – Penal laws shall have a retroactive effect insofar as they favor the person guilty of a felony, who is not a habitual criminal, as this term is defined in Rule 5 of Article 62 of this Code, although at the time of the publication of such laws a final sentence has been pronounced and the convict is serving the same. However, as Boniao’s civil liability is not extinguished pursuant to the second paragraph of Section 6, Republic Act No. 9344, Boniao should be held jointly liable with petitioner, Bacus, and Handoc for the payment of civil liability in the amount of P15,000.00 representing the stolen items. WHEREFORE, in view of the foregoing, the petition is hereby DENIED. The Decision of the Court of Appeals dated 30 June 2006 in CA-G.R. CR No. 00036 is AFFIRMED in toto. Costs against petitioner. SO ORDERED.

SJS vs. Hon. AtienzaFIRST DIVISION SOCIAL JUSTICE SOCIETY G.R. No. 156052(SJS), VLADIMIR ALARIQUE T.CABIGAO and BONIFACIO S.TUMBOKON,Petitioners

- v e r s u s HON. JOSE L. ATIENZA, JR., in his capacity as Mayor of theCity of Manila,Respondent. x - - - - - - - - - - - - - - - - - - - - - - x

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CHEVRON PHILIPPINES INC.,PETRON CORPORATION andPILIPINAS SHELL PETROLEUMCORPORATION, Movants-Intervenors.x - - - - - - - - - - - - - - - - - - - - - - xDEPARTMENT OF ENERGY,Movant-Intervenor. Promulgated: February 13, 2008x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - xR E S O L U T I O N CORONA, J.: After we promulgated our decision in this case on March 7, 2007, Chevron Philippines Inc. (Chevron), Petron Corporation (Petron) and Pilipinas Shell Petroleum Corporation (Shell) (collectively, the oil companies) and the Republic of the Philippines, represented by the Department of Energy (DOE), filed their respective motions for leave to intervene and for reconsideration of the decision. Chevron[1] is engaged in the business of importing, distributing and marketing of petroleum products in the Philippines while Shell and Petron are engaged in the business of manufacturing, refining and likewise importing, distributing and marketing of petroleum products in the Philippines.[2] The DOE is a governmental agency created under Republic Act (RA) No. 7638[3] and tasked to prepare, integrate, coordinate, supervise and control all plans, programs, projects and activities of the government relative to energy exploration, development, utilization, distribution and conservation.[4] The facts are restated briefly as follows: Petitioners Social Justice Society, Vladimir Alarique T. Cabigao and Bonifacio S. Tumbokon, in an original petition for mandamus under Rule 65 of the Rules of Court, sought to compel respondent Hon. Jose L. Atienza, Jr., then mayor of the City of Manila, to enforce Ordinance No. 8027. This ordinance was enacted by the Sangguniang Panlungsod of Manila on November 20, 2001,[5] approved by respondent Mayor on November 28, 2001,[6] and became effective on December 28, 2001 after publication.[7] Sections 1 and 3 thereof state: SECTION 1. For the purpose of promoting sound urban planning and ensuring health, public safety, and general welfare of the residents of Pandacan and Sta. Ana as well as its adjoining areas, the land use of [those] portions of land bounded by the Pasig River in the north, PNR Railroad Track in the east, Beata St. in the south, Palumpong St. in the southwest, and Estero de Pandacan in the west[,] PNR Railroad in the northwest area, Estero de Pandacan in the [n]ortheast, Pasig River in the southeast and Dr. M.L. Carreon in the southwest. The area of Punta, Sta. Ana bounded by the Pasig River, Marcelino Obrero St., Mayo 28 St., and F. Manalo Street, are hereby reclassified from Industrial II to Commercial I. xxx xxx xxx SEC. 3. Owners or operators of industries and other businesses, the operation of which are no longer permitted under Section 1 hereof, are hereby given a period of six (6) months from the date of effectivity of this Ordinance within which to cease and desist from the operation of businesses which are hereby in consequence, disallowed. Ordinance No. 8027 reclassified the area described therein from industrial to commercial and directed the owners and operators of businesses disallowed under the reclassification to cease and desist from operating their businesses within six months from the date of effectivity of the ordinance. Among the businesses situated in the area are the so-called “Pandacan Terminals” of the oil companies.

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On June 26, 2002, the City of Manila and the Department of Energy (DOE) entered into a memorandum of understanding (MOU)[8] with the oil companies. They agreed that “the scaling down of the Pandacan Terminals [was] the most viable and practicable option.” The Sangguniang Panlungsod ratified the MOU in Resolution No. 97.[9] In the same resolution, the Sanggunian declared that the MOU was effective only for a period of six months starting July 25, 2002.[10] Thereafter, on January 30, 2003, the Sanggunian adopted Resolution No. 13[11] extending the validity of Resolution No. 97 to April 30, 2003 and authorizing the mayor of Manila to issue special business permits to the oil companies.[12] This was the factual backdrop presented to the Court which became the basis of our March 7, 2007 decision. We ruled that respondent had the ministerial duty under the Local Government Code (LGC) to “enforce all laws and ordinances relative to the governance of the city,”[13] including Ordinance No. 8027. We also held that we need not resolve the issue of whether the MOU entered into by respondent with the oil companies and the subsequent resolutions passed by the Sanggunian could amend or repeal Ordinance No. 8027 since the resolutions which ratified the MOU and made it binding on the City of Manila expressly gave it full force and effect only until April 30, 2003. We concluded that there was nothing that legally hindered respondent from enforcing Ordinance No. 8027. After we rendered our decision on March 7, 2007, the oil companies and DOE sought to intervene and filed motions for reconsideration in intervention on March 12, 2007 and March 21, 2007 respectively. On April 11, 2007, we conducted the oral arguments in Baguio City to hear petitioners, respondent and movants-intervenors oil companies and DOE. The oil companies called our attention to the fact that on April 25, 2003, Chevron had filed a complaint against respondent and the City of Manila in the Regional Trial Court (RTC) of Manila, Branch 39, for the annulment of Ordinance No. 8027 with application for writs of preliminary prohibitory injunction and preliminary mandatory injunction.[14] The case was docketed as civil case no. 03-106377. On the same day, Shell filed a petition for prohibition and mandamus likewise assailing the validity of Ordinance No. 8027 and with application for writs of preliminary prohibitory injunction and preliminary mandatory injunction.[15] This was docketed as civil case no. 03-106380. Later on, these two cases were consolidated and the RTC of Manila, Branch 39 issued an order dated May 19, 2003 granting the applications for writs of preliminary prohibitory injunction and preliminary mandatory injunction: WHEREFORE, upon the filing of a total bond of TWO MILLION (Php 2,000,000.00) PESOS, let a Writ of Preliminary Prohibitory Injunction be issued ordering [respondent] and the City of Manila, their officers, agents, representatives, successors, and any other persons assisting or acting in their behalf, during the pendency of the case, to REFRAIN from taking steps to enforce Ordinance No. 8027, and let a Writ of Preliminary Mandatory Injunction be issued ordering [respondent] to issue [Chevron and Shell] the necessary Business Permits to operate at the Pandacan Terminal.[16] Petron likewise filed its own petition in the RTC of Manila, Branch 42, also attacking the validity of Ordinance No. 8027 with prayer for the issuance of a writ of preliminary injunction and/or temporary restraining order (TRO). This was docketed as civil case no. 03-106379. In an order dated August 4, 2004, the RTC enjoined the parties to maintain the status quo.[17]

Thereafter, in 2006, the city council of Manila enacted Ordinance No. 8119, also known as the Manila Comprehensive Land Use Plan and Zoning Ordinance of 2006.[18] This was approved by respondent on June 16, 2006.[19] Aggrieved anew, Chevron and Shell filed a complaint in the RTC of Manila, Branch 20, asking for the nullification of Ordinance No. 8119.[20] This was docketed as civil case no. 06-115334. Petron filed its own complaint on the same causes of action in the RTC of Manila, Branch 41.[21] This was docketed as civil case no. 07-116700.[22] The court issued a TRO in favor of Petron, enjoining the City of Manila and respondent from enforcing Ordinance No. 8119.[23]

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Meanwhile, in civil case no. 03-106379, the parties filed a joint motion to withdraw complaint and counterclaim on February 20, 2007.[24] In an order dated April 23, 2007, the joint motion was granted and all the claims and counterclaims of the parties were withdrawn.[25] Given these additional pieces of information, the following were submitted as issues for our resolution: 1. whether movants-intervenors should be allowed to intervene in this case;[26]2. whether the following are impediments to the execution of our March 7, 2007 decision:(a) Ordinance No. 8119, the enactment and existence of which were not previously brought by the parties to the attention of the Court and(b) writs of preliminary prohibitory injunction and preliminary mandatory injunction and status quo order issued by the RTC of Manila, Branches 39 and 42 and3. whether the implementation of Ordinance No. 8027 will unduly encroach upon the DOE’s powers and functions involving energy resources. During the oral arguments, the parties submitted to this Court’s power to rule on the constitutionality and validity of Ordinance No. 8027 despite the pendency of consolidated cases involving this issue in the RTC.[27] The importance of settling this controversy as fully and as expeditiously as possible was emphasized, considering its impact on public interest. Thus, we will also dispose of this issue here. The parties were after all given ample opportunity to present and argue their respective positions. By so doing, we will do away with the delays concomitant with litigation and completely adjudicate an issue which will most likely reach us anyway as the final arbiter of all legal disputes. Before we resolve these issues, a brief review of the history of the Pandacan Terminals is called for to put our discussion in the proper context. History Of The PandacanOil Terminals

Pandacan (one of the districts of the City of Manila) is situated along the banks of the Pasig river. At the turn of the twentieth century, Pandacan was unofficially designated as the industrial center of Manila. The area, then largely uninhabited, was ideal for various emerging industries as the nearby river facilitated the transportation of goods and products. In the 1920s, it was classified as an industrial zone.[28] Among its early industrial settlers were the oil companies. Shell established its installation there on January 30, 1914.[29] Caltex (now Chevron) followed suit in 1917 when the company began marketing its products in the country.[30] In 1922, it built a warehouse depot which was later converted into a key distribution terminal.[31] The corporate presence in the Philippines of Esso (Petron’s predecessor) became more keenly felt when it won a concession to build and operate a refinery in Bataan in 1957.[32] It then went on to operate a state-of-the-art lube oil blending plant in the Pandacan Terminals where it manufactures lubes and greases.[33] On December 8, 1941, the Second World War reached the shores of the Philippine Islands. Although Manila was declared an open city, the Americans had no interest in welcoming the Japanese. In fact, in their zealous attempt to fend off the Japanese Imperial Army, the United States Army took control of the Pandacan Terminals and hastily made plans to destroy the storage facilities to deprive the advancing Japanese Army of a valuable logistics weapon.[34] The U.S. Army burned unused petroleum, causing a frightening conflagration. Historian Nick Joaquin recounted the events as follows:

After the USAFFE evacuated the City late in December 1941, all army fuel storage dumps were set on fire. The flames spread, enveloping the City in smoke, setting even the rivers ablaze, endangering bridges and all riverside buildings. … For one week longer, the “open city” blazed—a cloud of smoke by day, a pillar of fire by night.[35]

The fire consequently destroyed the Pandacan Terminals and rendered its network of depots and service stations inoperative.[36]

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After the war, the oil depots were reconstructed. Pandacan changed as Manila rebuilt itself. The three major oil companies resumed the operation of their depots.[37] But the district was no longer a sparsely populated industrial zone; it had evolved into a bustling, hodgepodge community. Today, Pandacan has become a densely populated area inhabited by about 84,000 people, majority of whom are urban poor who call it home.[38] Aside from numerous industrial installations, there are also small businesses, churches, restaurants, schools, daycare centers and residences situated there.[39] Malacañang Palace, the official residence of the President of the Philippines and the seat of governmental power, is just two kilometers away.[40] There is a private school near the Petron depot. Along the walls of the Shell facility are shanties of informal settlers.[41] More than 15,000 students are enrolled in elementary and high schools situated near these facilities.[42] A university with a student population of about 25,000 is located directly across the depot on the banks of the Pasig river.[43] The 36-hectare Pandacan Terminals house the oil companies’ distribution terminals and depot facilities.[44] The refineries of Chevron and Shell in Tabangao and Bauan, both in Batangas, respectively, are connected to the Pandacan Terminals through a 114-kilometer[45] underground pipeline system.[46] Petron’s refinery in Limay, Bataan, on the other hand, also services the depot.[47] The terminals store fuel and other petroleum products and supply 95% of the fuel requirements of Metro Manila,[48] 50% of Luzon’s consumption and 35% nationwide.[49] Fuel can also be transported through barges along the Pasig river or tank trucks via the South Luzon Expressway. We now discuss the first issue: whether movants-intervenors should be allowed to intervene in this case. Intervention Of The Oil Companies And The DOE Should Be Allowed In The Interest of Justice Intervention is a remedy by which a third party, not originally impleaded in the proceedings, becomes a litigant therein to enable him, her or it to protect or preserve a right or interest which may be affected by such proceedings.[50] The pertinent rules are Sections 1 and 2, Rule 19 of the Rules of Court: SEC. 1. Who may intervene. — A person who has a legal interest in the matter in litigation, or in the success of either of the parties, or an interest against both, or is so situated as to be adversely affected by a distribution or other disposition of property in the custody of the court or of an officer thereof may, with leave of court, be allowed to intervene in the action. The court shall consider whether or not the intervention will unduly delay or prejudice the adjudication of the rights of the original parties, and whether or not the intervenor’s rights may be fully protected in a separate proceeding. SEC. 2. Time to intervene. — The motion to intervene may be filed at any time before rendition of judgment by the trial court. A copy of the pleading-in-intervention shall be attached to the motion and served on the original parties.

Thus, the following are the requisites for intervention of a non-party:

(1) Legal interest (a) in the matter in controversy; or(b) in the success of either of the parties; orI against both parties; or(d) person is so situated as to be adversely affected by a distribution or other disposition of property in the custody of the court or of an officer thereof; (2) Intervention will not unduly delay or prejudice the adjudication of rights of original parties; (3) Intervenor’s rights may not be fully protected in a separate proceeding[51] and (g)The motion to intervene may be filed at any time before rendition of judgment by the trial court.

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For both the oil companies and DOE, the last requirement is definitely absent. As a rule, intervention is allowed “before rendition of judgment” as Section 2, Rule 19 expressly provides. Both filed their separate motions after our decision was promulgated. In Republic of the Philippines v. Gingoyon,[52] a recently decided case which was also an original action filed in this Court, we declared that the appropriate time to file the motions-in-intervention was before and not after resolution of the case.[53] The Court, however, has recognized exceptions to Section 2, Rule 19 in the interest of substantial justice: The rule on intervention, like all other rules of procedure, is intended to make the powers of the Court fully and completely available for justice. It is aimed to facilitate a comprehensive adjudication of rival claims overriding technicalities on the timeliness of the filing thereof.[54]

The oil companies assert that they have a legal interest in this case because the implementation of Ordinance No. 8027 will directly affect their business and property rights.[55] [T]he interest which entitles a person to intervene in a suit between other parties must be in the matter in litigation and of such direct and immediate character that the intervenor will either gain or lose by direct legal operation and effect of the judgment. Otherwise, if persons not parties to the action were allowed to intervene, proceedings would become unnecessarily complicated, expensive and interminable. And this would be against the policy of the law. The words “an interest in the subject” means a direct interest in the cause of action as pleaded, one that would put the intervenor in a legal position to litigate a fact alleged in the complaint without the establishment of which plaintiff could not recover.[56]

We agree that the oil companies have a direct and immediate interest in the implementation of Ordinance No. 8027. Their claim is that they will need to spend billions of pesos if they are compelled to relocate their oil depots out of Manila. Considering that they admitted knowing about this case from the time of its filing on December 4, 2002, they should have intervened long before our March 7, 2007 decision to protect their interests. But they did not.[57] Neither did they offer any worthy explanation to justify their late intervention. Be that as it may, although their motion for intervention was not filed on time, we will allow it because they raised and presented novel issues and arguments that were not considered by the Court in its March 7, 2007 decision. After all, the allowance or disallowance of a motion to intervene is addressed to the sound discretion of the court before which the case is pending.[58] Considering the compelling reasons favoring intervention, we do not think that this will unduly delay or prejudice the adjudication of rights of the original parties. In fact, it will be expedited since their intervention will enable us to rule on the constitutionality of Ordinance No. 8027 instead of waiting for the RTC’s decision. The DOE, on the other hand, alleges that its interest in this case is also direct and immediate as Ordinance No. 8027 encroaches upon its exclusive and national authority over matters affecting the oil industry. It seeks to intervene in order to represent the interests of the members of the public who stand to suffer if the Pandacan Terminals’ operations are discontinued. We will tackle the issue of the alleged encroachment into DOE’s domain later on. Suffice it to say at this point that, for the purpose of hearing all sides and considering the transcendental importance of this case, we will also allow DOE’s intervention.

The Injunctive Writs Are Not Impediments To The Enforcement Of Ordinance No. 8027

Under Rule 65, Section 3[59] of the Rules of Court, a petition for mandamus may be filed when any tribunal, corporation, board, officer or person unlawfully neglects the performance of an act which the law specifically enjoins as a duty resulting from an office, trust or station. According to the oil companies, respondent did not unlawfully fail or neglect to enforce Ordinance No. 8027 because he was lawfully prevented from doing so by virtue of the injunctive writs and status quo order issued by the RTC of Manila, Branches 39 and 42.

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First, we note that while Chevron and Shell still have in their favor the writs of preliminary injunction and preliminary mandatory injunction, the status quo order in favor of Petron is no longer in effect since the court granted the joint motion of the parties to withdraw the complaint and counterclaim.[60] Second, the original parties failed to inform the Court about these injunctive writs. Respondent (who was also impleaded as a party in the RTC cases) defends himself by saying that he informed the court of the pendency of the civil cases and that a TRO was issued by the RTC in the consolidated cases filed by Chevron and Shell. It is true that had the oil companies only intervened much earlier, the Court would not have been left in the dark about these facts. Nevertheless, respondent should have updated the Court, by way of manifestation, on such a relevant matter. In his memorandum, respondent mentioned the issuance of a TRO. Under Section 5 of Rule 58 of the Rules of Court, a TRO issued by the RTC is effective only for a period of 20 days. This is why, in our March 7, 2007 decision, we presumed with certainty that this had already lapsed.[61] Respondent also mentioned the grant of injunctive writs in his rejoinder which the Court, however, expunged for being a prohibited pleading. The parties and their counsels were clearly remiss in their duties to this Court. In resolving controversies, courts can only consider facts and issues pleaded by the parties.[62] Courts, as well as magistrates presiding over them are not omniscient. They can only act on the facts and issues presented before them in appropriate pleadings. They may not even substitute their own personal knowledge for evidence. Nor may they take notice of matters except those expressly provided as subjects of mandatory judicial notice. We now proceed to the issue of whether the injunctive writs are legal impediments to the enforcement of Ordinance No. 8027. Section 3, Rule 58 of the Rules of Court enumerates the grounds for the issuance of a writ of preliminary injunction: SEC. 3. Grounds for issuance of preliminary injunction. ― A preliminary injunction may be granted when it is established: (a) That the applicant is entitled to the relief demanded, and the whole or part of such relief consists in restraining the commission or continuance of the act or acts complained of, or in requiring the performance of an act or acts, either for a limited period or perpetually; (b) That the commission, continuance or nonperformance of the act or acts complained of during the litigation would probably work injustice to the applicant; or (g) IThat a party, court, agency or a person is doing, threatening, or is attempting to do, or is procuring or suffering to be done, some act or acts probably in violation of the rights of the applicant respecting the subject of the action or proceeding, and tending to render the judgment ineffectual. There are two requisites for the issuance of a preliminary injunction: (1) the right to be protected exists prima facie and (2) the acts sought to be enjoined are violative of that right. It must be proven that the violation sought to be prevented will cause an irreparable injustice. The act sought to be restrained here was the enforcement of Ordinance No. 8027. It is a settled rule that an ordinance enjoys the presumption of validity and, as such, cannot be restrained by injunction.[63] Nevertheless, when the validity of the ordinance is assailed, the courts are not precluded from issuing an injunctive writ against its enforcement. However, we have declared that the issuance of said writ is proper only when:

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... the petitioner assailing the ordinance has made out a case of unconstitutionality strong enough to overcome, in the mind of the judge, the presumption of validity, in addition to a showing of a clear legal right to the remedy sought....[64] (Emphasis supplied) Judge Reynaldo G. Ros, in his order dated May 19, 2003, stated his basis for issuing the injunctive writs: The Court, in resolving whether or not a Writ of Preliminary Injunction or Preliminary Mandatory Injunction should be issued, is guided by the following requirements: (1) a clear legal right of the complainant; (2) a violation of that right; and (3) a permanent and urgent necessity for the Writ to prevent serious damage. The Court believes that these requisites are present in these cases. There is no doubt that the plaintiff/petitioners have been legitimately operating their business in the Pandacan Terminal for many years and they have made substantial capital investment therein. Every year they were issued Business Permits by the City of Manila. Its operations have not been declared illegal or contrary to law or morals. In fact, because of its vital importance to the national economy, it was included in the Investment Priorities Plan as mandated under the “Downstream Oil Industry Deregulation Act of 1988 (R.A. 8479). As a lawful business, the plaintiff/petitioners have a right, therefore, to continue their operation in the Pandacan Terminal and the right to protect their investments. This is a clear and unmistakable right of the plaintiff/petitioners. The enactment, therefore, of City Ordinance No. 8027 passed by the City Council of Manila reclassifying the area where the Pandacan Terminal is located from Industrial II to Commercial I and requiring the plaintiff/petitioners to cease and desist from the operation of their business has certainly violated the rights of the plaintiff/petitioners to continue their legitimate business in the Pandacan Terminal and deprived them of their huge investments they put up therein. Thus, before the Court, therefore, determines whether the Ordinance in question is valid or not, a Writ of Preliminary Injunction and a Writ of Mandatory Injunction be issued to prevent serious and irreparable damage to plaintiff/petitioners.[65] Nowhere in the judge’s discussion can we see that, in addition to a showing of a clear legal right of Chevron and Shell to the remedy sought, he was convinced that they had made out a case of unconstitutionality or invalidity strong enough to overcome the presumption of validity of the ordinance. Statutes and ordinances are presumed valid unless and until the courts declare the contrary in clear and unequivocal terms.[66] The mere fact that the ordinance is alleged to be unconstitutional or invalid will not entitle a party to have its enforcement enjoined.[67] The presumption is all in favor of validity. The reason for this is obvious: The action of the elected representatives of the people cannot be lightly set aside. The councilors must, in the very nature of things, be familiar with the necessities of their particular municipality and with all the facts and circumstances which surround the subject and necessitate action. The local legislative body, by enacting the ordinance, has in effect given notice that the regulations are essential to the well being of the people . . . The Judiciary should not lightly set aside legislative action when there is not a clear invasion of personal or property rights under the guise of police regulation.[68] X — x — x ...[Courts] accord the presumption of constitutionality to legislative enactments, not only because the legislature is presumed to abide by the Constitution but also because the judiciary[,] in the determination of actual cases and controversies[,] must reflect the wisdom and justice of the people as expressed through their representatives in the executive and legislative departments of the government.[69] The oil companies argue that this presumption must be set aside when the invalidity or unreasonableness appears on the face of the ordinance itself.[70] We see no reason to set aside the presumption. The ordinance, on its face, does not at all appear to be unconstitutional. It reclassified the subject area from industrial to commercial. Prima facie, this power is within the power of municipal corporations:

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The power of municipal corporations to divide their territory into industrial, commercial and residential zones is recognized in almost all jurisdictions inasmuch as it is derived from the police power itself and is exercised for the protection and benefit of their inhabitants.[71] X — x — x There can be no doubt that the City of Manila has the power to divide its territory into residential and industrial zones, and to prescribe that offensive and unwholesome trades and occupations are to be established exclusively in the latter zone. Xxx xxx xxx Likewise, it cannot be denied that the City of Manila has the authority, derived from the police power, of forbidding the appellant to continue the manufacture of toyo in the zone where it is now situated, which has been declared residential....[72] Courts will not invalidate an ordinance unless it clearly appears that it is unconstitutional. There is no such showing here. Therefore, the injunctive writs issued in the Manila RTC’s May 19, 2003 order had no leg to stand on. We are aware that the issuance of these injunctive writs is not being assailed as tainted with grave abuse of discretion. However, we are confronted with the question of whether these writs issued by a lower court are impediments to the enforcement of Ordinance No. 8027 (which is the subject of the mandamus petition). As already discussed, we rule in the negative.

Ordinance No. 8027 Was Not Superseded By Ordinance No. 8119

The March 7, 2007 decision did not take into consideration the passage of Ordinance No. 8119 entitled “An Ordinance Adopting the Manila Comprehensive Land Use Plan and Zoning Regulations of 2006 and Providing for the Administration, Enforcement and Amendment thereto” which was approved by respondent on June 16, 2006. The simple reason was that the Court was never informed about this ordinance. While courts are required to take judicial notice of the laws enacted by Congress, the rule with respect to local ordinances is different. Ordinances are not included in the enumeration of matters covered by mandatory judicial notice under Section 1, Rule 129 of the Rules of Court.[73] Although, Section 50 of RA 409[74] provides that: SEC. 50 Judicial notice of ordinances. - All courts sitting in the city shall take judicial notice of the ordinances passed by the [Sangguniang Panglungsod]. This cannot be taken to mean that this Court, since it has its seat in the City of Manila, should have taken steps to procure a copy of the ordinance on its own, relieving the party of any duty to inform the Court about it. Even where there is a statute that requires a court to take judicial notice of municipal ordinances, a court is not required to take judicial notice of ordinances that are not before it and to which it does not have access. The party asking the court to take judicial notice is obligated to supply the court with the full text of the rules the party desires it to have notice of.[75] Counsel should take the initiative in requesting that a trial court take judicial notice of an ordinance even where a statute requires courts to take judicial notice of local ordinances.[76] The intent of a statute requiring a court to take judicial notice of a local ordinance is to remove any discretion a court might have in determining whether or not to take notice of an ordinance. Such a statute does not direct the court to act on its own in obtaining evidence for the record and a party must make the ordinance available to the court for it to take notice.[77]

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In its defense, respondent claimed that he did not inform the Court about the enactment of Ordinance No. 8119 because he believed that it was different from Ordinance No. 8027 and that the two were not inconsistent with each other.[78] In the same way that we deem the intervenors’ late intervention in this case unjustified, we find the failure of respondent, who was an original party here, inexcusable. The Rule On Judicial Admissions Is Not Applicable Against Respondent

The oil companies assert that respondent judicially admitted that Ordinance No. 8027 was repealed by Ordinance No. 8119 in civil case no. 03-106379 (where Petron assailed the constitutionality of Ordinance No. 8027) when the parties in their joint motion to withdraw complaint and counterclaim stated that “the issue ...has been rendered moot and academic by virtue of the passage of [Ordinance No. 8119].”[79] They contend that such admission worked as an estoppel against the respondent. Respondent countered that this stipulation simply meant that Petron was recognizing the validity and legality of Ordinance No. 8027 and that it had conceded the issue of said ordinance’s constitutionality, opting instead to question the validity of Ordinance No. 8119.[80] The oil companies deny this and further argue that respondent, in his answer in civil case no. 06-115334 (where Chevron and Shell are asking for the nullification of Ordinance No. 8119), expressly stated that Ordinance No. 8119 replaced Ordinance No. 8027:[81] ... Under Ordinance No. 8027, businesses whose uses are not in accord with the reclassification were given six months to cease [their] operation. Ordinance No. 8119, which in effect, replaced Ordinance [No.] 8027, merely took note of the time frame provided for in Ordinance No. 8119.... Ordinance No. 8119 thus provided for an even longer term, that is[,] seven years;[82] (Emphasis supplied) Rule 129, Section 4 of the Rules of Court provides: Section 4. Judicial admissions. ― An admission, verbal or written, made by a party in the course of the proceedings in the same case, does not require proof. The admission may be contradicted only by showing that it was made through palpable mistake or that no such admission was made. (Emphasis supplied) While it is true that a party making a judicial admission cannot subsequently take a position contrary to or inconsistent with what was pleaded,[83] the aforestated rule is not applicable here. Respondent made the statements regarding the ordinances in civil case nos. 03-106379 and 06-115334 which are not “the same” as this case before us.[84] To constitute a judicial admission, the admission must be made in the same case in which it is offered. Hence, respondent is not estopped from claiming that Ordinance No. 8119 did not supersede Ordinance No. 8027. On the contrary, it is the oil companies which should be considered estopped. They rely on the argument that Ordinance No. 8119 superseded Ordinance No. 8027 but, at the same time, also impugn its (8119’s) validity. We frown on the adoption of inconsistent positions and distrust any attempt at clever positioning under one or the other on the basis of what appears advantageous at the moment. Parties cannot take vacillating or contrary positions regarding the validity of a statute[85] or ordinance. Nonetheless, we will look into the merits of the argument of implied repeal. Ordinance No. 8119 Did Not Impliedly Repeal Ordinance No. 8027 Both the oil companies and DOE argue that Ordinance No. 8119 repealed Ordinance No. 8027. They assert that although there was no express repeal[86] of Ordinance No. 8027, Ordinance No. 8119 impliedly repealed it.

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According to the oil companies, Ordinance No. 8119 reclassified the area covering the Pandacan Terminals to “High Density Residential/Mixed Use Zone (R-3/MXD)”[87] whereas Ordinance No. 8027 reclassified the same area from Industrial II to Commercial I: SECTION 1. For the purpose of promoting sound urban planning and ensuring health, public safety, and general welfare of the residents of Pandacan and Sta. Ana as well as its adjoining areas, the land use of [those] portions of land bounded by the Pasig River in the north, PNR Railroad Track in the east, Beata St. in the south, Palumpong St. in the southwest, and Estero de Pancacan in the west[,] PNR Railroad in the northwest area, Estero de Pandacan in the [n]ortheast, Pasig River in the southeast and Dr. M.L. Carreon in the southwest. The area of Punta, Sta. Ana bounded by the Pasig River, Marcelino Obrero St., Mayo 28 St., and F. Manalo Street, are hereby reclassified from Industrial II to Commercial I. (Emphasis supplied) Moreover, Ordinance No. 8119 provides for a phase-out of seven years: SEC. 72. Existing Non-Conforming Uses and Buildings. - The lawful use of any building, structure or land at the time of the adoption of this Ordinance may be continued, although such use does not conform with the provision of the Ordinance, provided: xxx xxx xxx (g) In case the non-conforming use is an industrial use: xxx xxx xxx d. The land use classified as non-conforming shall program the phase-out and relocation of the non-conforming use within seven (7) years from the date of effectivity of this Ordinance. (Emphasis supplied) This is opposed to Ordinance No. 8027 which compels affected entities to vacate the area within six months from the effectivity of the ordinance: SEC. 3. Owners or operators of industries and other businesses, the operation of which are no longer permitted under Section 1 hereof, are hereby given a period of six (6) months from the date of effectivity of this Ordinance within which to cease and desist from the operation of businesses which are hereby in consequence, disallowed. Ordinance No. 8119 also designated the Pandacan oil depot area as a “Planned Unit Development/Overlay Zone (O-PUD)”: SEC. 23. Use Regulations in Planned Unit Development/Overlay Zone (O-PUD). – O-PUD Zones are identified specific sites in the City of Manila wherein the project site is comprehensively planned as an entity via unitary site plan which permits flexibility in planning/ design, building siting, complementarily of building types and land uses, usable open spaces and the preservation of significant natural land features, pursuant to regulations specified for each particular PUD. Enumerated below are identified PUD: xxx xxx xxx 6. Pandacan Oil Depot Area xxx xxx xxx Enumerated below are the allowable uses:

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1. all uses allowed in all zones where it is located2. the [Land Use Intensity Control (LUIC)] under which zones are located shall, in all instances be complied with3. the validity of the prescribed LUIC shall only be [superseded] by the development controls and regulations specified for each PUD as provided for each PUD as provided for by the masterplan of respective PUDs.[88] (Emphasis supplied) Respondent claims that in passing Ordinance No. 8119, the Sanggunian did not intend to repeal Ordinance No. 8027 but meant instead to carry over 8027’s provisions to 8119 for the purpose of making Ordinance No. 8027 applicable to the oil companies even after the passage of Ordinance No. 8119.[89] He quotes an excerpt from the minutes of the July 27, 2004 session of the Sanggunian during the first reading of Ordinance No. 8119: Member GARCIA: Your Honor, iyong patungkol po roon sa oil depot doon sa amin sa Sixth District sa Pandacan, wala pong nakalagay eith sa ordinansa rito na taliwas o kakaiba roon sa ordinansang ipinasa noong nakaraang Konseho, iyong Ordinance No. 8027. So kung ano po ang nandirito sa ordinansa na ipinasa ninyo last time, iyon lang po ang ni-lift eithe at inilagay eith. At eith eith ordinansang …iyong naipasa ng huling Konseho, niri-classify [ninyo] from Industrial II to Commercial C-1 ang area ng Pandacan kung nasaan ang oil depot. So ini-lift lang po [eithe] iyong definition, density, at saka po yon pong … ng… noong ordinansa ninyo na siya eith naming inilagay eith, iniba lang po naming iyong title. So wala po kaming binago na taliwas o nailagay na taliwas doon sa ordinansang ipinasa ninyo, ni-lift lang po [eithe] from Ordinance No. 8027.”[90] (Emphasis supplied) We agree with respondent. Repeal by implication proceeds on the premise that where a statute of later date clearly reveals the intention of the legislature to abrogate a prior act on the subject, that intention must be given effect.[91] There are two kinds of implied repeal. The first is: where the provisions in the two acts on the same subject matter are irreconcilably contradictory, the latter act, to the extent of the conflict, constitutes an implied repeal of the earlier one.[92] The second is: if the later act covers the whole subject of the earlier one and is clearly intended as a substitute, it will operate to repeal the earlier law.[93] The oil companies argue that the situation here falls under the first category. Implied repeals are not favored and will not be so declared unless the intent of the legislators is manifest.[94] As statutes and ordinances are presumed to be passed only after careful deliberation and with knowledge of all existing ones on the subject, it follows that, in passing a law, the legislature did not intend to interfere with or abrogate a former law relating to the same subject matter.[95] If the intent to repeal is not clear, the later act should be construed as a continuation of, and not a substitute for, the earlier act.[96] These standards are deeply enshrined in our jurisprudence. We disagree that, in enacting Ordinance No. 8119, there was any indication of the legislative purpose to repeal Ordinance No. 8027.[97] The excerpt quoted above is proof that there was never such an intent. While it is true that both ordinances relate to the same subject matter, i.e. classification of the land use of the area where Pandacan oil depot is located, if there is no intent to repeal the earlier enactment, every effort at reasonable construction must be made to reconcile the ordinances so that both can be given effect: The fact that a later enactment may relate to the same subject matter as that of an earlier statute is not of itself sufficient to cause an implied repeal of the prior act, since the new statute may merely be cumulative or a continuation of the old one. What is necessary is a manifest indication of legislative purpose to repeal.[98] For the first kind of implied repeal, there must be an irreconcilable conflict between the two ordinances. There is no conflict between the two ordinances. Ordinance No. 8027 reclassified the Pandacan area from Industrial II to Commercial I. Ordinance No. 8119, in Section 23, designated it as a “Planned Unit

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Development/Overlay Zone (O-PUD).” In its Annex C which defined the zone boundaries,[99] the Pandacan area was shown to be within the “High Density Residential/Mixed Use Zone (R-3/MXD).” These zone classifications in Ordinance No. 8119 are not inconsistent with the reclassification of the Pandacan area from Industrial to Commercial in Ordinance No. 8027. The “O-PUD” classification merely made Pandacan a “project site ... comprehensively planned as an entity via unitary site plan which permits flexibility in planning/design, building siting, complementarity of building types and land uses, usable open spaces and the preservation of significant natural land features....”[100] Its classification as “R-3/MXD” means that it should “be used primarily for high-rise housing/dwelling purposes and limited complementary/supplementary trade, services and business activities.”[101] There is no conflict since both ordinances actually have a common objective, i.e., to shift the zoning classification from industrial to commercial (Ordinance No. 8027) or mixed residential/commercial (Ordinance No. 8119). Moreover, it is a well-settled rule in statutory construction that a subsequent general law does not repeal a prior special law on the same subject unless it clearly appears that the legislature has intended by the latter general act to modify or repeal the earlier special law. Generalia specialibus non derogant (a general law does not nullify a specific or special law).[102] This is so even if the provisions of the general law are sufficiently comprehensive to include what was set forth in the special act.[103] The special act and the general law must stand together, one as the law of the particular subject and the other as the law of general application.[104] The special law must be taken as intended to constitute an exception to, or a qualification of, the general act or provision.[105] The reason for this is that the legislature, in passing a law of special character, considers and makes special provisions for the particular circumstances dealt with by the special law. This being so, the legislature, by adopting a general law containing provisions repugnant to those of the special law and without making any mention of its intention to amend or modify such special law, cannot be deemed to have intended an amendment, repeal or modification of the latter.[106] Ordinance No. 8027 is a special law[107] since it deals specifically with a certain area described therein (the Pandacan oil depot area) whereas Ordinance No. 8119 can be considered a general law[108] as it covers the entire city of Manila. The oil companies assert that even if Ordinance No. 8027 is a special law, the existence of an all-encompassing repealing clause in Ordinance No. 8119 evinces an intent on the part of the Sanggunian to repeal the earlier ordinance: Sec. 84. Repealing Clause. – All ordinances, rules, regulations in conflict with the provisions of this Ordinance are hereby repealed; PROVIDED, That the rights that are vested upon the effectivity of this Ordinance shall not be impaired. They cited Hospicio de San Jose de Barili, Cebu City v. Department of Agrarian Reform:[109] The presence of such general repealing clause in a later statute clearly indicates the legislative intent to repeal all prior inconsistent laws on the subject matter, whether the prior law is a general law or a special law... Without such a clause, a later general law will ordinarily not repeal a prior special law on the same subject. But with such clause contained in the subsequent general law, the prior special law will be deemed repealed, as the clause is a clear legislative intent to bring about that result.[110] This ruling in not applicable here. The repealing clause of Ordinance No. 8119 cannot be taken to indicate the legislative intent to repeal all prior inconsistent laws on the subject matter, including Ordinance No. 8027, a special enactment, since the aforequoted minutes (an official record of the discussions in the Sanggunian) actually indicated the clear intent to preserve the provisions of Ordinance No. 8027.

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To summarize, the conflict between the two ordinances is more apparent than real. The two ordinances can be reconciled. Ordinance No. 8027 is applicable to the area particularly described therein whereas Ordinance No. 8119 is applicable to the entire City of Manila. Mandamus Lies To Compel Respondent Mayor To Enforce Ordinance No. 8027

The oil companies insist that mandamus does not lie against respondent in consideration of the separation of powers of the executive and judiciary.[111] This argument is misplaced. Indeed,

[the] Courts will not interfere by mandamus proceedings with the legislative [or executive departments] of the government in the legitimate exercise of its powers, except to enforce mere ministerial acts required by law to be performed by some officer thereof.[112] (Emphasis Supplied)since this is the function of a writ of mandamus, which is the power to compel “the performance of an act which the law specifically enjoins as a duty resulting from office, trust or station.”[113] They also argue that petitioners had a plain, speedy and adequate remedy to compel respondent to enforce Ordinance No. 8027 which was to seek relief from the President of the Philippines through the Secretary of the Department of Interior and Local Government (DILG) by virtue of the President’s power of supervision over local government units. Again, we disagree. A party need not go first to the DILG in order to compel the enforcement of an ordinance. This suggested process would be unreasonably long, tedious and consequently injurious to the interests of the local government unit (LGU) and its constituents whose welfare is sought to be protected. Besides, petitioners’ resort to an original action for mandamus before this Court is undeniably allowed by the Constitution.[114] Ordinance No. 8027 Is Constitutional And Valid

Having ruled that there is no impediment to the enforcement of Ordinance No. 8027, we now proceed to make a definitive ruling on its constitutionality and validity. The tests of a valid ordinance are well established. For an ordinance to be valid, it must not only be within the corporate powers of the LGU to enact and be passed according to the procedure prescribed by law, it must also conform to the following substantive requirements: (1) must not contravene the Constitution or any statute; (2) must not be unfair or oppressive; (3) must not be partial or discriminatory; (4) must not prohibit but may regulate trade; (5) must be general and consistent with public policy and (6) must not be unreasonable.[115]

The City of Manila Has The Power To Enact Ordinance No. 8027

Ordinance No. 8027 was passed by the Sangguniang Panlungsod of Manila in the exercise of its police power. Police power is the plenary power vested in the legislature to make statutes and ordinances to promote the health, morals, peace, education, good order or safety and general welfare of the people.[116] This power flows from the recognition that salus populi est suprema lex (the welfare of the people is the supreme law).[117] While police power rests primarily with the national legislature, such power may be delegated.[118] Section 16 of the LGC, known as the general welfare clause, encapsulates the delegated police power to local governments:[119] Section 16. General Welfare. ― Every local government unit shall exercise the powers expressly granted, those necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for its efficient and effective governance, and those which are essential to the promotion of the general welfare. Within their respective territorial jurisdictions, local government units shall ensure and support, among other things, the preservation and enrichment of culture, promote health and safety, enhance the right of the people to a balanced ecology, encourage and support the development of appropriate and self-reliant scientific and

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technological capabilities, improve public morals, enhance economic prosperity and social justice, promote full employment among their residents, maintain peace and order, and preserve the comfort and convenience of their inhabitants.

LGUs like the City of Manila exercise police power through their respective legislative bodies, in this case, the Sangguniang Panlungsod or the city council. Specifically, the Sanggunian can enact ordinances for the general welfare of the city: Section. 458. – Powers, Duties, Functions and Compensation. – (a) The sangguniang panglungsod, as the legislative branch of the city, shall enact ordinances, approve resolutions and appropriate funds for the general welfare of the city and its inhabitants pursuant to Section 16 of this Code xxxx This police power was also provided for in RA 409 or the Revised Charter of the City of Manila: Section 18. Legislative powers. — The [City Council] shall have the following legislative powers: xxx xxx xxx (g) To enact all ordinances it may deem necessary and proper for the sanitation and safety, the furtherance of the prosperity, and the promotion of the morality, peace, good order, comfort, convenience, and general welfare of the city and its inhabitants, and such others as may be necessary to carry into effect and discharge the powers and duties conferred by this chapter xxxx[120] Specifically, the Sanggunian has the power to “reclassify land within the jurisdiction of the city.”[121] The Enactment Of Ordinance No. 8027 Is A Legitimate Exercise Of Police Power

As with the State, local governments may be considered as having properly exercised their police power only if the following requisites are met: (1) the interests of the public generally, as distinguished from those of a particular class, require its exercise and (2) the means employed are reasonably necessary for the accomplishment of the purpose and not unduly oppressive upon individuals. In short, there must be a concurrence of a lawful subject and a lawful method.[122] Ordinance No. 8027 was enacted “for the purpose of promoting sound urban planning, ensuring health, public safety and general welfare”[123] of the residents of Manila. The Sanggunian was impelled to take measures to protect the residents of Manila from catastrophic devastation in case of a terrorist attack on the Pandacan Terminals. Towards this objective, the Sanggunian reclassified the area defined in the ordinance from industrial to commercial. The following facts were found by the Committee on Housing, Resettlement and Urban Development of the City of Manila which recommended the approval of the ordinance: (1) the depot facilities contained 313.5 million liters of highly flammable and highly volatile products which include petroleum gas, liquefied petroleum gas, aviation fuel, diesel, gasoline, kerosene and fuel oil among others;(2) the depot is open to attack through land, water or air;(3) it is situated in a densely populated place and near Malacañang Palace and(4) in case of an explosion or conflagration in the depot, the fire could spread to the neighboring communities.[124] The ordinance was intended to safeguard the rights to life, security and safety of all the inhabitants of Manila and not just of a particular class.[125] The depot is perceived, rightly or wrongly, as a representation of western interests which means that it is a terrorist target. As long as it there is such a target in their midst, the residents of Manila are not safe. It therefore became necessary to remove these terminals to dissipate the threat. According to respondent:

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Such a public need became apparent after the 9/11 incident which showed that what was perceived to be impossible to happen, to the most powerful country in the world at that, is actually possible. The destruction of property and the loss of thousands of lives on that fateful day became the impetus for a public need. In the aftermath of the 9/11 tragedy, the threats of terrorism continued [such] that it became imperative for governments to take measures to combat their effects.[126] Wide discretion is vested on the legislative authority to determine not only what the interests of the public require but also what measures are necessary for the protection of such interests.[127] Clearly, the Sanggunian was in the best position to determine the needs of its constituents. In the exercise of police power, property rights of individuals may be subjected to restraints and burdens in order to fulfill the objectives of the government.[128] Otherwise stated, the government may enact legislation that may interfere with personal liberty, property, lawful businesses and occupations to promote the general welfare.[129] However, the interference must be reasonable and not arbitrary. And to forestall arbitrariness, the methods or means used to protect public health, morals, safety or welfare must have a reasonable relation to the end in view.[130] The means adopted by the Sanggunian was the enactment of a zoning ordinance which reclassified the area where the depot is situated from industrial to commercial. A zoning ordinance is defined as a local city or municipal legislation which logically arranges, prescribes, defines and apportions a given political subdivision into specific land uses as present and future projection of needs.[131] As a result of the zoning, the continued operation of the businesses of the oil companies in their present location will no longer be permitted. The power to establish zones for industrial, commercial and residential uses is derived from the police power itself and is exercised for the protection and benefit of the residents of a locality.[132] Consequently, the enactment of Ordinance No. 8027 is within the power of the Sangguniang Panlungsod of the City of Manila and any resulting burden on those affected cannot be said to be unjust: There can be no doubt that the City of Manila has the power to divide its territory into residential and industrial zones, and to prescribe that offensive and unwholesome trades and occupations are to be established exclusively in the latter zone. “The benefits to be derived by cities adopting such regulations (zoning) may be summarized as follows: They attract a desirable and assure a permanent citizenship; they foster pride in and attachment to the city; they promote happiness and contentment; they stabilize the use and value of property and promote the peace, [tranquility], and good order of the city. We do not hesitate to say that the attainment of these objects affords a legitimate field for the exercise of the police power. He who owns property in such a district is not deprived of its use by such regulations. He may use it for the purposes to which the section in which it is located is dedicated. That he shall not be permitted to use it to the desecration of the community constitutes no unreasonable or permanent hardship and results in no unjust burden.” Xxx xxx xxx “The 14th Amendment protects the citizen in his right to engage in any lawful business, but it does not prevent legislation intended to regulate useful occupations which, because of their nature or location, may prove injurious or offensive to the public.”[133] We entertain no doubt that Ordinance No. 8027 is a valid police power measure because there is a concurrence of lawful subject and lawful method. Ordinance No. 8027 Is Not Unfair, Oppressive Or Confiscatory Which Amounts To Taking Without Compensation According to the oil companies, Ordinance No. 8027 is unfair and oppressive as it does not only regulate but also absolutely prohibits them from conducting operations in the City of Manila. Respondent counters

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that this is not accurate since the ordinance merely prohibits the oil companies from operating their businesses in the Pandacan area. Indeed, the ordinance expressly delineated in its title and in Section 1 what it pertained to. Therefore, the oil companies’ contention is not supported by the text of the ordinance. Respondent succinctly stated that: The oil companies are not forbidden to do business in the City of Manila. They may still very well do so, except that their oil storage facilities are no longer allowed in the Pandacan area. Certainly, there are other places in the City of Manila where they can conduct this specific kind of business. Ordinance No. 8027 did not render the oil companies illegal. The assailed ordinance affects the oil companies business only in so far as the Pandacan area is concerned.[134] The oil companies are not prohibited from doing business in other appropriate zones in Manila. The City of Manila merely exercised its power to regulate the businesses and industries in the zones it established: As to the contention that the power to regulate does not include the power to prohibit, it will be seen that the ordinance copied above does not prohibit the installation of motor engines within the municipality of Cabanatuan but only within the zone therein fixed. If the municipal council of Cabanatuan is authorized to establish said zone, it is also authorized to provide what kind of engines may be installed therein. In banning the installation in said zone of all engines not excepted in the ordinance, the municipal council of Cabanatuan did no more than regulate their installation by means of zonification.[135] The oil companies aver that the ordinance is unfair and oppressive because they have invested billions of pesos in the depot.[136] Its forced closure will result in huge losses in income and tremendous costs in constructing new facilities. Their contention has no merit. In the exercise of police power, there is a limitation on or restriction of property interests to promote public welfare which involves no compensable taking. Compensation is necessary only when the state’s power of eminent domain is exercised. In eminent domain, property is appropriated and applied to some public purpose. Property condemned under the exercise of police power, on the other hand, is noxious or intended for a noxious or forbidden purpose and, consequently, is not compensable.[137] The restriction imposed to protect lives, public health and safety from danger is not a taking. It is merely the prohibition or abatement of a noxious use which interferes with paramount rights of the public. Property has not only an individual function, insofar as it has to provide for the needs of the owner, but also a social function insofar as it has to provide for the needs of the other members of society.[138] The principle is this: Police power proceeds from the principle that every holder of property, however absolute and unqualified may be his title, holds it under the implied liability that his use of it shall not be injurious to the equal enjoyment of others having an equal right to the enjoyment of their property, nor injurious to the right of the community. Rights of property, like all other social and conventional rights, are subject to reasonable limitations in their enjoyment as shall prevent them from being injurious, and to such reasonable restraints and regulations established by law as the legislature, under the governing and controlling power vested in them by the constitution, may think necessary and expedient.[139] In the regulation of the use of the property, nobody else acquires the use or interest therein, hence there is no compensable taking.[140] In this case, the properties of the oil companies and other businesses situated in the affected area remain theirs. Only their use is restricted although they can be applied to other profitable uses permitted in the commercial zone. Ordinance No. 8027 Is NotPartial And Discriminatory

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The oil companies take the position that the ordinance has discriminated against and singled out the Pandacan Terminals despite the fact that the Pandacan area is congested with buildings and residences that do not comply with the National Building Code, Fire Code and Health and Sanitation Code.[141] This issue should not detain us for long. An ordinance based on reasonable classification does not violate the constitutional guaranty of the equal protection of the law.[142] The requirements for a valid and reasonable classification are: (1) it must rest on substantial distinctions; (2) it must be germane to the purpose of the law; (3) it must not be limited to existing conditions only and (4) it must apply equally to all members of the same class.[143] The law may treat and regulate one class differently from another class provided there are real and substantial differences to distinguish one class from another.[144] Here, there is a reasonable classification. We reiterate that what the ordinance seeks to prevent is a catastrophic devastation that will result from a terrorist attack. Unlike the depot, the surrounding community is not a high-value terrorist target. Any damage caused by fire or explosion occurring in those areas would be nothing compared to the damage caused by a fire or explosion in the depot itself. Accordingly, there is a substantial distinction. The enactment of the ordinance which provides for the cessation of the operations of these terminals removes the threat they pose. Therefore it is germane to the purpose of the ordinance. The classification is not limited to the conditions existing when the ordinance was enacted but to future conditions as well. Finally, the ordinance is applicable to all businesses and industries in the area it delineated. Ordinance No. 8027 is Not Inconsistent With RA 7638 And RA 8479 The oil companies and the DOE assert that Ordinance No. 8027 is unconstitutional because it contravenes RA 7638 (DOE Act of 1992)[145] and RA 8479 (Downstream Oil Industry Deregulation Law of 1998).[146] They argue that through RA 7638, the national legislature declared it a policy of the state “to ensure a continuous, adequate, and economic supply of energy”[147] and created the DOE to implement this policy. Thus, under Section 5 I, DOE is empowered to “establish and administer programs for the exploration, transportation, marketing, distribution, utilization, conservation, stockpiling, and storage of energy resources.” Considering that the petroleum products contained in the Pandacan Terminals are major and critical energy resources, they conclude that their administration, storage, distribution and transport are of national interest and fall under DOE’s primary and exclusive jurisdiction.[148] They further assert that the terminals are necessary for the delivery of immediate and adequate supply of oil to its recipients in the most economical way.[149] Local legislation such as Ordinance No. 8027 (which effectively calls for the removal of these terminals) allegedly frustrates the state policy of ensuring a continuous, adequate, and economic supply of energy expressed in RA 7638, a national law.[150] Likewise, the ordinance thwarts the determination of the DOE that the terminals’ operations should be merely scaled down and not discontinued.[151] They insist that this should not be allowed considering that it has a nationwide economic impact and affects public interest transcending the territorial jurisdiction of the City of Manila.[152] According to them, the DOE’s supervision over the oil industry under RA 7638 was subsequently underscored by RA 8479, particularly in Section 7 thereof: SECTION 7. Promotion of Fair Trade Practices. ― The Department of Trade and Industry (DTI) and DOE shall take all measures to promote fair trade and prevent cartelization, monopolies, combinations in restraint of trade, and any unfair competition in the Industry as defined in Article 186 of the Revised Penal Code, and Articles 168 and 169 of Republic Act No. 8293, otherwise known as the “Intellectual Property Rights Law”. The DOE shall continue to encourage certain practices in the Industry which serve the public interest and are intended to achieve efficiency and cost reduction, ensure continuous supply of petroleum products, and enhance environmental protection. These practices may include borrow-and-loan agreements, rationalized depot and manufacturing operations, hospitality agreements, joint tanker and pipeline utilization, and joint actions on oil spill control and fire prevention. (Emphasis supplied)

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Respondent counters that DOE’s regulatory power does not preclude LGUs from exercising their police power.[153] Indeed, ordinances should not contravene existing statutes enacted by Congress. The rationale for this was clearly explained in Magtajas vs. Pryce Properties Corp., Inc.:[154] The rationale of the requirement that the ordinances should not contravene a statute is obvious. Municipal governments are only agents of the national government. Local councils exercise only delegated legislative powers conferred on them by Congress as the national lawmaking body. The delegate cannot be superior to the principal or exercise powers higher than those of the latter. It is a heresy to suggest that the local government units can undo the acts of Congress, from which they have derived their power in the first place, and negate by mere ordinance the mandate of the statute. “Municipal corporations owe their origin to, and derive their powers and rights wholly from the legislature. It breathes into them the breath of life, without which they cannot exist. As it creates, so it may destroy. As it may destroy, it may abridge and control. Unless there is some constitutional limitation on the right, the legislature might, by a single act, and if we can suppose it capable of so great a folly and so great a wrong, sweep from existence all of the municipal corporations in the State, and the corporation could not prevent it. We know of no limitation on the right so far as to the corporation themselves are concerned. They are, so to phrase it, the mere tenants at will of the legislature.” This basic relationship between the national legislature and the local government units has not been enfeebled by the new provisions in the Constitution strengthening the policy of local autonomy. Without meaning to detract from that policy, we here confirm that Congress retains control of the local government units although in significantly reduced degree now than under our previous Constitutions. The power to create still includes the power to destroy. The power to grant still includes the power to withhold or recall. True, there are certain notable innovations in the Constitution, like the direct conferment on the local government units of the power to tax, which cannot now be withdrawn by mere statute. By and large, however, the national legislature is still the principal of the local government units, which cannot defy its will or modify or violate it.[155] The question now is whether Ordinance No. 8027 contravenes RA 7638 and RA 8479. It does not. Under Section 5 I of RA 7638, DOE was given the power to “establish and administer programs for the exploration, transportation, marketing, distribution, utilization, conservation, stockpiling, and storage of energy resources.” On the other hand, under Section 7 of RA 8749, the DOE “shall continue to encourage certain practices in the Industry which serve the public interest and are intended to achieve efficiency and cost reduction, ensure continuous supply of petroleum products.” Nothing in these statutes prohibits the City of Manila from enacting ordinances in the exercise of its police power. The principle of local autonomy is enshrined in and zealously protected under the Constitution. In Article II, Section 25 thereof, the people expressly adopted the following policy:

Section 25. The State shall ensure the autonomy of local governments. An entire article (Article X) of the Constitution has been devoted to guaranteeing and promoting the autonomy of LGUs. The LGC was specially promulgated by Congress to ensure the autonomy of local governments as mandated by the Constitution: Sec. 2. Declaration of Policy. ― (a) It is hereby declared the policy of the State that the territorial and political subdivisions of the State shall enjoy genuine and meaningful local autonomy to enable them to attain their fullest development as self-reliant communities and make them more effective partners in the attainment of national goals. Toward this end, the State shall provide for a more responsive and accountable local government structure instituted through a system of decentralization whereby local government units shall

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be given more powers, authority, responsibilities, and resources. The process of decentralization shall proceed from the National Government to the local government units. (Emphasis supplied) We do not see how the laws relied upon by the oil companies and DOE stripped the City of Manila of its power to enact ordinances in the exercise of its police power and to reclassify the land uses within its jurisdiction. To guide us, we shall make a brief survey of our decisions where the police power measure of the LGU clashed with national laws. In Tan v. Pereña,[156] the Court ruled that Ordinance No. 7 enacted by the municipality of Daanbantayan, Cebu allowing the operation of three cockpits was invalid for violating PD 449 (or the Cockfighting Law of 1974) which permitted only one cockpit per municipality. In Batangas CATV, Inc. v. Court of Appeals,[157] the Sangguniang Panlungsod of Batangas City enacted Resolution No. 210 granting Batangas CATV, Inc. a permit to operate a cable television (CATV) system in Batangas City. The Court held that the LGU did not have the authority to grant franchises to operate a CATV system because it was the National Telecommunications Commission (NTC) that had the power under EO Nos. 205 and 436 to regulate CATV operations. EO 205 mandated the NTC to grant certificates of authority to CATV operators while EO 436 vested on the NTC the power to regulate and supervise the CATV industry. In Lina, Jr. v. Paño,[158] we held that Kapasiyahan Bilang 508, Taon 1995 of the Sangguniang Panlalawigan of Laguna could not be used as justification to prohibit lotto in the municipality of San Pedro, Laguna because lotto was duly authorized by RA 1169, as amended by BP 42. This law granted a franchise to the Philippine Charity Sweepstakes Office and allowed it to operate lotteries. In Magtajas v. Pryce Properties Corp., Inc.,[159] the Sangguniang Panlungsod of Cagayan de Oro City passed Ordinance Nos. 3353 and 3375-93 prohibiting the operation of casinos in the city. We ruled that these ordinances were void for contravening PD 1869 or the charter of the Philippine Amusements and Gaming Corporation which had the power to operate casinos. The common dominator of all of these cases is that the national laws were clearly and expressly in conflict with the ordinances/resolutions of the LGUs. The inconsistencies were so patent that there was no room for doubt. This is not the case here. The laws cited merely gave DOE general powers to “establish and administer programs for the exploration, transportation, marketing, distribution, utilization, conservation, stockpiling, and storage of energy resources” and “to encourage certain practices in the [oil] industry which serve the public interest and are intended to achieve efficiency and cost reduction, ensure continuous supply of petroleum products.” These powers can be exercised without emasculating the LGUs of the powers granted them. When these ambiguous powers are pitted against the unequivocal power of the LGU to enact police power and zoning ordinances for the general welfare of its constituents, it is not difficult to rule in favor of the latter. Considering that the powers of the DOE regarding the Pandacan Terminals are not categorical, the doubt must be resolved in favor of the City of Manila: SECTION 5. Rules of Interpretation. ― In the interpretation of the provisions of this Code, the following rules shall apply: (a) Any provision on a power of a local government unit shall be liberally interpreted in its favor, and in case of doubt, any question thereon shall be resolved in favor of devolution of powers and of the lower local government unit. Any fair and reasonable doubt as to the existence of the power shall be interpreted in favor of the local government unit concerned; xxx xxx xxx

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(g) IThe general welfare provisions in this Code shall be liberally interpreted to give more powers to local government units in accelerating economic development and upgrading the quality of life for the people in the community xxxx The least we can do to ensure genuine and meaningful local autonomy is not to force an interpretation that negates powers explicitly granted to local governments. To rule against the power of LGUs to reclassify areas within their jurisdiction will subvert the principle of local autonomy guaranteed by the Constitution.[160] As we have noted in earlier decisions, our national officials should not only comply with the constitutional provisions on local autonomy but should also appreciate the spirit and liberty upon which these provisions are based.[161]

The DOE Cannot Exercise The Power Of Control Over LGUs Another reason that militates against the DOE’s assertions is that Section 4 of Article X of the Constitution confines the President’s power over LGUs to one of general supervision: SECTION 4. The President of the Philippines shall exercise general supervision over local governments. Xxxx Consequently, the Chief Executive or his or her alter egos, cannot exercise the power of control over them.[162] Control and supervision are distinguished as follows: [Supervision] means overseeing or the power or authority of an officer to see that subordinate officers perform their duties. If the latter fail or neglect to fulfill them, the former may take such action or step as prescribed by law to make them perform their duties. Control, on the other hand, means the power of an officer to alter or modify or nullify or set aside what a subordinate officer ha[s] done in the performance of his duties and to substitute the judgment of the former for that of the latter.[163] Supervisory power, when contrasted with control, is the power of mere oversight over an inferior body; it does not include any restraining authority over such body.[164] It does not allow the supervisor to annul the acts of the subordinate.[165] Here, what the DOE seeks to do is to set aside an ordinance enacted by local officials, a power that not even its principal, the President, has. This is because: Under our present system of government, executive power is vested in the President. The members of the Cabinet and other executive officials are merely alter egos. As such, they are subject to the power of control of the President, at whose will and behest they can be removed from office; or their actions and decisions changed, suspended or reversed. In contrast, the heads of political subdivisions are elected by the people. Their sovereign powers emanate from the electorate, to whom they are directly accountable. By constitutional fiat, they are subject to the President’s supervision only, not control, so long as their acts are exercised within the sphere of their legitimate powers. By the same token, the President may not withhold or alter any authority or power given them by the Constitution and the law.[166] Thus, the President and his or her alter egos, the department heads, cannot interfere with the activities of local governments, so long as they act within the scope of their authority. Accordingly, the DOE cannot substitute its own discretion for the discretion exercised by the sanggunian of the City of Manila. In local affairs, the wisdom of local officials must prevail as long as they are acting within the parameters of the Constitution and the law.[167] Ordinance No. 8027 Is Not Invalid For Failure To Comply With RA 7924 And EO 72 The oil companies argue that zoning ordinances of LGUs are required to be submitted to the Metropolitan Manila Development Authority (MMDA) for review and if found to be in compliance with its metropolitan physical framework plan and regulations, it shall endorse the same to the Housing and Land Use Regulatory Board (HLURB). Their basis is Section 3 (e) of RA 7924:[168]

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SECTION 3. Scope of MMDA Services. ― Metro-wide services under the jurisdiction of the MMDA are those services which have metro-wide impact and transcend local political boundaries or entail huge expenditures such that it would not be viable for said services to be provided by the individual [LGUs] comprising Metropolitan Manila. These services shall include: xxx xxx xxx (g) Urban renewal, zoning, and land use planning, and shelter services which include the formulation, adoption and implementation of policies, standards, rules and regulations, programs and projects to rationalize and optimize urban land use and provide direction to urban growth and expansion, the rehabilitation and development of slum and blighted areas, the development of shelter and housing facilities and the provision of necessary social services thereof. (Emphasis supplied) Reference was also made to Section 15 of its implementing rules: Section 15. Linkages with HUDCC, HLURB, NHA, LGUs and Other National Government Agencies Concerned on Urban Renewal, Zoning and Land Use Planning and Shelter Services. Within the context of the National Housing and Urban Development Framework, and pursuant to the national standards, guidelines and regulations formulated by the Housing and Land Use Regulatory Board [HLURB] on land use planning and zoning, the [MMDA] shall prepare a metropolitan physical framework plan and regulations which shall complement and translate the socio-economic development plan for Metro Manila into physical or spatial terms, and provide the basis for the preparation, review, integration and implementation of local land use plans and zoning, ordinance of cities and municipalities in the area. Said framework plan and regulations shall contain, among others, planning and zoning policies and procedures that shall be observed by local government units in the preparation of their own plans and ordinances pursuant to Section 447 and 458 of RA 7160, as well as the identification of sites and projects that are considered to be of national or metropolitan significance. Cities and municipalities shall prepare their respective land use plans and zoning ordinances and submit the same for review and integration by the [MMDA] and indorsement to HLURB in accordance with Executive Order No. 72 and other pertinent laws. In the preparation of a Metropolitan Manila physical framework plan and regulations, the [MMDA] shall coordinate with the Housing and Urban Development Coordinating Council, HLURB, the National Housing Authority, Intramuros Administration, and all other agencies of the national government which are concerned with land use and zoning, urban renewal and shelter services. (Emphasis supplied) They also claim that EO 72[169] provides that zoning ordinances of cities and municipalities of Metro Manila are subject to review by the HLURB to ensure compliance with national standards and guidelines. They cite Section 1, paragraphs I, (e), (f) and (g): SECTION 1. Plan formulation or updating. ― xxx xxx xxx (g) Cities and municipalities of Metropolitan Manila shall continue to formulate or update their respective comprehensive land use plans, in accordance with the land use planning and zoning standards and guidelines prescribed by the HLURB pursuant to EO 392, S. of 1990, and other pertinent national policies. Xxx xxx xxx

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(e) Pursuant to LOI 729, S. of 1978, EO 648, S. of 1981, and RA 7279, the comprehensive land use plans of provinces, highly urbanized cities and independent component cities shall be reviewed and ratified by the HLURB to ensure compliance with national standards and guidelines. (f) Pursuant to EO 392, S. of 1999, the comprehensive land use plans of cities and municipalities of Metropolitan Manila shall be reviewed by the HLURB to ensure compliance with national standards and guidelines. (g) Said review shall be completed within three (3) months upon receipt thereof otherwise, the same shall be deemed consistent with law, and, therefore, valid. (Emphasis supplied) They argue that because Ordinance No. 8027 did not go through this review process, it is invalid. The argument is flawed. RA 7942 does not give MMDA the authority to review land use plans and zoning ordinances of cities and municipalities. This was only found in its implementing rules which made a reference to EO 72. EO 72 expressly refers to comprehensive land use plans (CLUPs) only. Ordinance No. 8027 is admittedly not a CLUP nor intended to be one. Instead, it is a very specific ordinance which reclassified the land use of a defined area in order to prevent the massive effects of a possible terrorist attack. It is Ordinance No. 8119 which was explicitly formulated as the “Manila [CLUP] and Zoning Ordinance of 2006.” CLUPs are the ordinances which should be submitted to the MMDA for integration in its metropolitan physical framework plan and approved by the HLURB to ensure that they conform with national guidelines and policies. Moreover, even assuming that the MMDA review and HLURB ratification are necessary, the oil companies did not present any evidence to show that these were not complied with. In accordance with the presumption of validity in favor of an ordinance, its constitutionality or legality should be upheld in the absence of proof showing that the procedure prescribed by law was not observed. The burden of proof is on the oil companies which already had notice that this Court was inclined to dispose of all the issues in this case. Yet aside from their bare assertion, they did not present any certification from the MMDA or the HLURB nor did they append these to their pleadings. Clearly, they failed to rebut the presumption of validity of Ordinance No. 8027.[170] Conclusion Essentially, the oil companies are fighting for their right to property. They allege that they stand to lose billions of pesos if forced to relocate. However, based on the hierarchy of constitutionally protected rights, the right to life enjoys precedence over the right to property.[171] The reason is obvious: life is irreplaceable, property is not. When the state or LGU’s exercise of police power clashes with a few individuals’ right to property, the former should prevail.[172] Both law and jurisprudence support the constitutionality and validity of Ordinance No. 8027. Without a doubt, there are no impediments to its enforcement and implementation. Any delay is unfair to the inhabitants of the City of Manila and its leaders who have categorically expressed their desire for the relocation of the terminals. Their power to chart and control their own destiny and preserve their lives and safety should not be curtailed by the intervenors’ warnings of doomsday scenarios and threats of economic disorder if the ordinance is enforced. Secondary to the legal reasons supporting the immediate implementation of Ordinance No. 8027 are the policy considerations which drove Manila’s government to come up with such a measure: ... [The] oil companies still were not able to allay the apprehensions of the city regarding the security threat in the area in general. No specific action plan or security measures were presented that would prevent a possible large-scale terrorist or malicious attack especially an attack aimed at Malacañang. The measures

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that were installed were more directed towards their internal security and did not include the prevention of an external attack even on a bilateral level of cooperation between these companies and the police and military. Xxx xxx xxx It is not enough for the city government to be told by these oil companies that they have the most sophisticated fire-fighting equipments and have invested millions of pesos for these equipments. The city government wants to be assured that its residents are safe at any time from these installations, and in the three public hearings and in their position papers, not one statement has been said that indeed the absolute safety of the residents from the hazards posed by these installations is assured.[173] We are also putting an end to the oil companies’ determination to prolong their stay in Pandacan despite the objections of Manila’s residents. As early as October 2001, the oil companies signed a MOA with the DOE obliging themselves to:... undertake a comprehensive and comparative study ... [which] shall include the preparation of a Master Plan, whose aim is to determine the scope and timing of the feasible location of the Pandacan oil terminals and all associated facilities and infrastructure including government support essential for the relocation such as the necessary transportation infrastructure, land and right of way acquisition, resettlement of displaced residents and environmental and social acceptability which shall be based on mutual benefit of the Parties and the public.[174] Now that they are being compelled to discontinue their operations in the Pandacan Terminals, they cannot feign unreadiness considering that they had years to prepare for this eventuality. Just the same, this Court is not about to provoke a crisis by ordering the immediate relocation of the Pandacan Terminals out of its present site. The enforcement of a decision of this Court, specially one with far-reaching consequences, should always be within the bounds of reason, in accordance with a comprehensive and well-coordinated plan, and within a time-frame that complies with the letter and spirit of our resolution. To this end, the oil companies have no choice but to obey the law. A Warning To Petitioners’ Counsel We draw the attention of the parties to a matter of grave concern to the legal profession. Petitioners and their counsel, Atty. Samson Alcantara, submitted a four-page memorandum that clearly contained either substance nor research. It is absolutely insulting to this Court. We have always tended towards judicial leniency, temperance and compassion to those who suffer from a wrong perception of what the majesty of the law means. But for a member of the bar, an officer of the court, to file in this Court a memorandum of such unacceptable quality is an entirely different matter. It is indicative less of a personal shortcoming or contempt of this Court and more of a lawyer’s sorry descent from a high sense of duty and responsibility. As a member of the bar and as an officer of the court, a lawyer ought to be keenly aware that the chief safeguard of the body politic is respect for the law and its magistrates. There is nothing more effective than the written word by which counsel can persuade this Court of the righteousness of his cause. For if truth were self-evident, a memorandum would be completely unnecessary and superfluous. The inability of counsel to prepare a memorandum worthy of this Court’s consideration is an ejemplo malo to the legal profession as it betrays no genuine interest in the cause he claims to espouse. Or did counsel think he can earn his moment of glory without the hard work and dedication called for by his petition?A Final Word

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On Wednesday, January 23, 2008, a defective tanker containing 2,000 liters of gasoline and 14,000 liters of diesel exploded in the middle of the street a short distance from the exit gate of the Pandacan Terminals, causing death, extensive damage and a frightening conflagration in the vicinity of the incident. Need we say anthing about what will happen if it is the estimated 162 to 211 million liters[175] of petroleum products in the terminal complex which blow up? WHEREFORE, the motions for leave to intervene of Chevron Philippines Inc., Petron Corporation and Pilipinas Shell Petroleum Corporation, and the Republic of the Philippines, represented by the Department of Energy, are hereby GRANTED. Their respective motions for reconsideration are hereby DENIED. The Regional Trial Court, Manila, Branch 39 is ORDERED to DISMISS the consolidated cases of Civil Case No. 03-106377 and Civil Case No. 03-106380. We reiterate our order to respondent Mayor of the City of Manila to enforce Ordinance No. 8027. In coordination with the appropriate agencies and other parties involved, respondent Mayor is hereby ordered to oversee the relocation and transfer of the Pandacan Terminals out of its present site. To ensure the orderly transfer, movement and relocation of assets and personnel, the intervenors Chevron Philippines Inc., Petron Corporation and Pilipinas Shell Petroleum Corporation shall, within a non-extendible period of ninety (90) days, submit to the Regional Trial Court of Manila, Branch 39, the comprehensive plan and relocation schedule which have allegedly been prepared. The presiding judge of Manila RTC, Branch 39 will monitor the strict enforcement of this resolution. Atty. Samson Alcantara is hereby ordered to explain within five (5) days from notice why he should not be disciplined for his refusal, or inability, to file a memorandum worthy of the consideration of this Court. Treble costs against petitioners’ counsel, Atty. Samson Alcantara. SO ORDERED.

Judicial Admission

Cuenco vs TalisayTHIRD DIVISION

G.R. No. 174154 October 17, 2008

JESUS CUENCO, petitioner, vs.TALISAY TOURIST SPORTS COMPLEX, INCORPORATED AND MATIAS B. AZNAR III, respondents.

D E C I S I O N

NACHURA, J.:

Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court assailing the Decision dated April 18, 2005 and the Resolution dated August 15, 2006 of the Court of Appeals (CA) in CA-G.R. CV No. 65773.

The Facts

The antecedent facts of the case are as follows:

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On May 25, 1992, petitioner leased from respondents for a period of two (2) years, from May 8, 1992 to May 8, 1994, the Talisay Tourist Sports Complex, to be operated as a cockpit. The lease was extended for another four (4) years, or until May 8, 1998.

Under the Contract of Lease,1 it was stipulated that petitioner shall, like a good father of the family, maintain in good condition the furniture, chattels and all other equipment and shall, at all times, keep the leased premises clean and sanitary. For this purpose, petitioner would allow the respondent’s building supervisor or his authorized representative to make a regular spot inspection of the leased premises to see to it that these stipulations are strictly implemented.2 Any damage caused to the furniture, chattels, equipment and parts of the leased premises shall be the responsibility of petitioner to repair and compensate.3 Furthermore, petitioner would give a deposit equivalent to six (6) months rental to answer for whatever damages may be caused to the premises during the period of the lease.4

Upon expiration of the contract, respondent company conducted a public bidding for the lease of the property. Petitioner participated in the bidding. The lease was eventually awarded to another bidder, Mr. Rex Cuaqui Salud.5 Thereafter, petitioner wrote four (4) demand letters to respondents.

The first letter, dated June 8, 1998, reads:

Dear Mr. Aznar:

I was so disheartened that after going through with the supposed public bidding, haggling with the terms and conditions of a new lease agreement and after full compliance of ALL your requirements and the handshakes signifying the clinching of the deal, the contract was awarded to another party. Though I believe I deserve a renewal, I had to accept your decision with a heavy heart.

It is now my desire to be released quickly from whatever liability or responsibility under our previous contract. Repair works on some damaged portions were already done. Based on our contract, par. 5 thereof, it is my understanding that I am answerable to all damages caused to furnitures (sic), chattels and other equipments and minor parts of the leased premises. Once cleared, I want the return of my deposit of P500,000.00.

Kindly send your inspector to determine by actual ocular inspection if the restoration work is to your satisfaction.

Very truly yours,

JESUS C. CUENCO [signed]6

Obviously, the letter was not answered, because on June 17, 1998 petitioner found it necessary to write respondents a second letter reiterating his request for the return of the deposit. The second demand letter reads:

Dear Mr. Aznar:

It has been more than a week since my letter dated 8 June 1998 requesting the return of my deposit of P500,000.00. I would assume your representative had already conducted an ocular inspection and you were satisfied on the restoration works made on the premises. As I’ve stated in my said letter, I want to be released as soon as possible.

I need to know immediately if I still have other things to comply with as pre-condition for the release of the deposit. As far as I know, I have already done my part.

Very truly yours,

70

JESUS C. CUENCO [signed]7

With still no response from respondents, petitioner, on August 14, 1998, sent a third demand letter which read:

Dear Mr. Aznar:

I am surprised by the unreasonable delay in the release of my deposit of P500,000.00 in spite of my full compliance as to repair works on minor damage to the premises during my term as lessee. Twice I requested in writing for the immediate release of my deposit but until now it remains unheeded. And the so-called "inventory" which your lawyer Atty. Algoso8 promised to give has not been given. Frankly, I am doubtful of the accuracy of said inventory, if any, considering the full blast major renovation now being conducted on the complex by the new concessionaire. I think it’s about time we close the last chapter of the book, in a manner of speaking, so we can proceed in our separate distinct ways.

I reiterate my request to please release right now my deposit of P500,000.00.

Very truly yours,

JESUS C. CUENCO [signed]9

Finally, on August 18, 1998, petitioner, thru his counsel, wrote respondents a final demand letter as follows:

Dear Mr. Aznar:

For ignoring the two letters of my client Mr. Jesus C. Cuenco, dated June 8 and 17, 1998 regarding his request for the return of his deposit in the sum of P500, 000.00, he has decided to endorse the matter to this office for appropriate action.

It appears that when Mr. Cuenco leased the cockpit complex he was required to put up a deposit to answer for damages that may be caused to furnitures (sic), chattels and other equipments and minor repairs on the leased premises. When the lease expired and he failed to get a renewal, Mr. Cuenco in fulfillment of his obligation under the contract caused the repair of minor damage to the premises after which your attention was invited to get your reaction to the restoration work. And since he did not receive any objection, it can be safely premised that the restoration was to the lessor’s satisfaction.

Mr. Cuenco informed me that the new concessionaire has undertaken a full blast major renovation of the complex. Under this condition and in the absence of an accurate inventory conducted in the presence of both parties, it would be doubly difficult, if not impossible, to charge Mr. Cuenco of any violation of his undertaking especially as to deficiency in the furnitures (sic), chattels and other equipments in the premises.

In view of all the foregoing, it is consequently demanded that you return to Mr. Cuenco the aforesaid sum of P500,000.00 within THREE (3) DAYS from notice hereof; otherwise, he may be constrained to seek judicial relief for the return of the deposit plus interest, damages and attorney’s fees.

Your compliance is enjoined.

Very truly yours, At my instance:

FEDERICO C. CABILAO (signed) JESUS C. CUENCO (signed)Counsel for Mr. Jesus C. Cuenco10As all of his demand letters remained unheeded, on October 21, 1998, petitioner filed a Complaint11 for sum of money, damages and attorney’s fees. He maintained that respondents acted in bad faith in withholding the amount of the deposit without any justifiable reason.12

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In their Answer,13 respondents countered that petitioner caused physical damage to some portions of the leased premises and the cost of repair and replacement of materials amounted to more than P500,000.00.14 They also averred that respondent Matias B. Aznar III (Aznar) cannot be sued personally under the contract of lease since a corporation has a separate and distinct personality from its officers and stockholders, and there was no allegation that Aznar, who is the President of the corporation, signed the contract in his personal capacity.15

On March 8, 1999, the RTC issued a Pre-trial Order,16 the pertinent portions of which reads:

The following facts were admitted by the [respondents]:

1. There is no inventory of damages up to this time;

2. [Petitioner] deposited the amount of P500,000.00;

3. [Petitioner] sends (sic) several letters of demand to [respondents] but said letters were not answered.

4. There was a renovation of the Talisay Tourist Sports Complex with a qualification that the renovation is only 10% of the whole amount.

The main issues in this case are as follows:

1. Whether or not [petitioner] is entitled to the return of the deposit of P500,000.00, with interest;

2. Whether or not some portions of the complex sustained physical damage during the operation of the same by the [petitioner].17

On May 24, 1999, the RTC issued an Order18 admitting the exhibits of petitioner, consisting of the contract of lease dated May 4, 1994 and the four (4) demand letters.

On July 29, 1999, an Order19 was issued by the same court formally admitting the respondents’ following exhibits: the lease contract, inventory of the leased property as of June 4, 1998, inventory of the sports complex dated June 24, 1995, ocular inspection report dated January 15, 1998 and various receipts mostly in the name of Southwestern University incurred in different months of 1998.

On August 11, 1999, the RTC rendered a Decision20 in favor of petitioner, the dispositive portion of which reads:

WHEREFORE, judgment is hereby rendered in favor of [petitioner] and against the [respondents], directing the latter jointly and severally to return to [petitioner] the sum of P500,000.00, representing the deposit mentioned in the Complaint, plus 3% interest per month from August 18, 1998 until full payment thereof.

The latter are, likewise, directed to pay [petitioner] the sum of P15,000.00 as and for litigation expenses.

With costs against the [respondents].

SO ORDERED.21

The RTC ratiocinated that respondents’ failure to reply to the letters of petitioner raises a presumption that petitioner has complied with his end of the contract. The lower court gave credence to the testimony of respondents’ witness, Ateniso Coronado (Coronado), the property custodian of the respondents, that the sports complex was repaired and renovated by the new lessee. The court also considered the admission of respondents’ counsel during the pre-trial that no inventory of the property was conducted on the leased premises. The RTC debunked the inventory presented by the respondents during trial as a mere afterthought to bolster their claim against petitioner.22

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Respondents appealed. On April 18, 2005, the CA rendered a Decision23 reversing and setting aside the decision of the RTC. The fallo of the CA decision reads:

WHEREFORE, with the foregoing, the Decision of the Regional Trial Court, Branch 13, Cebu City, dated August 11, 1999, is REVERSED and SET ASIDE, and a new one entered finding this case in favor of defendants-appellants Talisay Tourists Sports Complex and Matias Aznar III. Consequently, Civil Case No. CEB-22847 for sum of money, damages, and attorney’s fees involving herein parties, as well as all other claims and counterclaims are hereby DISMISSED for lack of factual and legal basis.

No pronouncement as to costs.

SO ORDERED.24

The CA ruled in favor of respondents on the basis of: (1) Coronado’s testimony that petitioner continued to hold cockfights two months after the expiration of the lease contract which was not refuted by petitioner; (2) the summary of repairs made on the property showing that respondents spent the amount of P573,710.17 immediately prior to the expiration of the lease contract and shortly thereafter; and (3) the new lessor incurred expenses amounting to over P3 million when he shouldered the rest of the repair and renovation of the subject property.25

Hence, the instant petition.

The Issues

Petitioner raised the following issues for resolution of the Court: (1) whether a judicial admission is conclusive and binding upon a party making the admission; and (2) whether such judicial admission was properly rejected by the CA.26

On the other hand, respondents posed the following: (1) whether the findings of the CA that the cockpit sustained damage during the period of the lease was rendered not in accord with law or with the applicable decisions of the Court; (2) whether the CA committed an error of law in ruling that petitioner is not entitled for the return of the deposit.27

The ultimate question we must resolve is whether petitioner is entitled to the return of the amount deposited.

The Ruling of the Court

We rule in the affirmative. Respondents failed to present sufficient proof to warrant the retention of the full amount of the deposit given by petitioner.

The Supreme Court is not a trier of facts, and as a rule, does not weigh anew the evidence presented by the parties. However, the instant case is one of the exceptions to the rule because of the conflicting decisions of the RTC and the CA based on contradictory factual findings. Thus, we have reviewed the records in order to arrive at a judicious resolution of the case at bench.

Petitioner questions the CA’s finding that there was damage caused the premises while the lease was still in force. Such finding could only have been based on alleged inventory of the property conducted by the respondents. Petitioner takes exception to this evidence because of the earlier judicial admission made by respondents’ counsel that no inventory was conducted and, accordingly, any evidence adduced by the respondents contrary to or inconsistent with the judicial admission should be rejected.

Indeed, at the pre-trial conference, respondents’ counsel made an admission that no inventory was made on the leased premises, at least up to that time. This admission was confirmed in the Pre-Trial Order issued by the trial court on March 8, 1999 after the lease expired on May 8, 1998.

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Yet, on July 1, 1999, respondents’ witness Coronado testified, as follows:

ATTY. VASQUEZ:

Q Why do you know the defendants?

A Because Talisay Sports Complex is owned by Aznar Brothers Realty Corporation of which I am employed as (sic) in charge of the realty department.

Q How about Matias Aznar III, the defendant here?

A He is the Chairman of the Board.

Q Board of what?

A Of the Aznar Brothers Realty Corporation.

Q Is he the Chairman of Talisay Tourist Sports Complex?

A Yes, sir.

Q You said that you are in charge of the realty department, what is your function with respect to the properties of Talisay Tourist and Sports Complex?

A I am the in-charge of the administration and overseeing of the complex owned by Talisay Sports Complex.

Q When you said that you are in charge of the administration and overseeing of the complex, what does it includes (sic)?

A It includes collection of rentals of complex and routine inspection to determine that there are missing or damage of (sic) the properties.

Q How long have you been employed with the Aznar Brothers Realty Company?

A 25 years.

x x x x

Q In your earlier testimony, you said that part of your function is to conduct routine inspection of the complex. Now, was there a routine inspection conducted during the period of the lease contract between plaintiff and the defendant?

A Yes, we conducted inspection sometime in January 1998.

Q For what purpose was that inspection?

A The purpose is to determine if there are damage sustained by the complex.

Q And what was the result of the inspection.

A There were missing and destroyed fixtures and physical damage sustained by the complex.

x x x x

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COURT

x x x x

Q W[h]y did you not take photographs of the damage sustained by the complex?

A We did not take pictures, Your Honor, because in fact their personnel were in our presence (sic) during the inspection, they were accompanied by us, because we can not conduct inspection without the presence of the personnel of Jesus Cuenco, Your Honor, the lessee.

Q Did the personnel of Jesus Cuenco sign any paper acknowledging receipt of any report?

A There was no refusal, but we did not initiate to let them sign and confirm.

COURT

Q So, we have to rely on your testimony?

A Yes, sir.28

Obviously, it was on Coronado’s testimony, as well as on the documentary evidence29 of an alleged property inventory conducted on June 4, 1998, that the CA based its conclusion that the amount of damage sustained by the leased premises while in the possession of petitioner exceeded the amount of petitioner’s deposit. This contradicts the judicial admission made by respondents’ counsel which should have been binding on the respondents.

Section 4, Rule 129 of the Rules of Court provides:

SEC. 4. Judicial admissions. – An admission, verbal or written, made by a party in the course of the proceedings in the same case, does not require proof. The admission may be contradicted only by a showing that it was made through palpable mistake or that no such admission was made.

A party may make judicial admissions in (1) the pleadings, (2) during the trial, by verbal or written manifestations or stipulations, or (3) in other stages of the judicial proceeding.30 The stipulation of facts at the pre-trial of a case constitutes judicial admissions. The veracity of judicial admissions require no further proof and may be controverted only upon a clear showing that the admissions were made through palpable mistake or that no admissions were made. Thus, the admissions of parties during the pre-trial, as embodied in the pre-trial order, are binding and conclusive upon them.

Respondents did not deny the admission made by their counsel, neither did they claim that the same was made through palpable mistake. As such, the stipulation of facts is incontrovertible and may be relied upon by the courts. The pre-trial forms part of the proceedings and matters dealt therein may not be brushed aside in the process of decision-making. Otherwise, the real essence of compulsory pre-trial would be rendered inconsequential and worthless.31 Furthermore, an act performed by counsel within the scope of a "general or implied authority" is regarded as an act of the client which renders respondents in estoppel. By estoppel is meant that an admission or representation is conclusive upon the person making it and cannot be denied or disproved as against the person relying thereon.32

Thus, respondents are bound by the admissions made by their counsel at the pre-trial. Accordingly, the CA committed an error when it gave ample evidentiary weight to respondents’ evidence contradictory to the judicial admission.

The appellate court’s findings that the damage in the premises exceeded the amount of the deposit is further sought to be justified, thus:

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Verily, a perusal of the summary of repairs amounting to P573,710.17 claimed to have been made by appellants over the property at about that time immediately prior to the expiration of the lease contract and shortly thereafter, would show that the repairs pertained to repairs on the drainage, sewage, immediate premises and structure of the complex. We find the same highly credible and meritorious considering that as earlier admitted by appellee, the repairs he made were minor and were confined only to certain portions of the complex, although substantial repairs were done on the cockhouses only, and that said repairs were done because of a coming big time derby and not to satisfy the provisions of the lease contract. Also, by implication, appellee is stating that the new lessor incurred expenses amounting to over P3 million when he shouldered the rest of the repair and renovation of the complex after the term of lease of appellee.33

Yet, upon perusal of the receipts presented by respondents, we found that majority of the receipts are under the name of Southwestern University. In their Memorandum,34 respondents aver that Southwestern University and respondent corporation are sister companies.35 Even if true, this matter is of no consequence because respondent company and Southwestern University have distinct and separate legal personalities, and Southwestern University is not a party to this case. Thus, we cannot just accept respondents’ argument that the receipts paid in the name of Southwestern University should be credited to respondent company. In any event, they were not able to prove that those receipts were in fact used for the repair or maintenance of the respondents’ complex.

Furthermore, respondents are not entitled the full amount of the deposit because the repair and renovation of the sports complex after the expiration of petitioner’s lease were undertaken not by respondents but by the new lessee. This can be gleaned from Coronado’s testimony on cross-examination, viz.:

Q You do not know. Mr. Witness, is it not a fact that the new lessee was Wacky Salud?

A Yes, sir.

Q And that was sometime of July or August of 1998?

A They were about to conduct three months repair of the complex?

Q So, Mr. Wacky Salud conducted, did you say repair or renovation? Is it renovation or repair?

A There was a renovation and repair.

Q Renovation including repair?

A Yes, sir.

COURT

Q In other words, after the expiration of the contract of Mr. Cuenco, Wacky Salud took over?

A Yes, he took over that repair and renovation were no longer included in this presentation, that is at his own expense.

Q Precisely. In other words, some repairs were made by Mr. Salud and not by Aznar Brothers Realty?

A Yes, sir.36

Finally, the Court observes that the inventories presented by respondents were not countersigned by petitioner or were they presented to the latter prior to the filing of the case in the RTC. Thus, we are more inclined to agree with the trial court that the "inventory was made as an afterthought,"37 in a vain attempt of the respondents to establish their case.

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However, Coronado’s testimony that petitioner extended the operation of the sports complex for a period of two months after the expiration of the lease without the respondents’ authority and without the payment of rentals, remains unrebutted. Enlightening is the following testimony:

Q I observed here in No. 16 of your summary, two months arrears rentals, June to July, how come? The contract was supposed to expire May 1998?

A Yes, because it had happened on this extension of the lease because they are still occupying until July after the expiration of the contract.

COURT

Q You mean to say that they still use the complex for the purpose for which it was intended, which is for cockfighting?

WITNESS

A Yes, they are still doing their usual operation.

ATTY. VASQUEZ

Q You mean to say that there were still cockfighting held in the complex even after May 1998?

A Yes, sir.38

This two (2) months over-stay of petitioner in the leased premises should be charged against the deposit. Because there was no renewal of the lease contract, it is understood that the continued use of the premises is on a monthly basis with the rental in the amount previously agreed upon by the parties, in accordance with Articles 167039 and 168740 of the Civil Code.

In the Contract of Lease of petitioner and respondent company, it was agreed that the rental to be paid shall be the following:

WHEREAS, the FIRST PARTY is the owner of the Talisay Tourist Sports Complex, Inc. located at Tabunok, Talisay, Cebu;

WHEREAS, the SECOND PARTY has expressed his desire to lease said complex (cockpit) and the FIRST PARTY have agreed to lease/let the same to the SECOND PARTY subject to the following term and condition, to wit:

1. In consideration of this lease, the SECOND PARTY agrees to pay the FIRST PARTY a lump sum of ONE MILLION PESOS (P1,000,000.00) representing advance rental for the first year, the same to be paid on May 8, 1994. Thereafter, the rental shall be as follows:

Second year

-

P1,050,000.00 or P87,500.00/month

Third year

-

1,100,000.00 or P91,666.67/month

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Fourth year

-

1,175,000.00 or P97,916.67/month41

Thus, by way of rental for the two-month overstay, the amount of P195,833.34 should be deducted from the amount of deposit paid by petitioner to respondent company.

As to petitioner’s claim of interest of three percent (3%) per month on the amount due him, the same is without legal basis. We note that no amount of interest was previously agreed upon by the parties in the contract of lease.

Under Article 2213 of the Civil Code, "interest cannot be recovered upon unliquidated claims or damages, except when the demand can be established with reasonable certainty." In the instant case, the claim of petitioner is unliquidated or cannot be established with reasonable certainty upon his filing of the case in the RTC. This is because of the contending claims of the parties, specifically, the claim of petitioner for the return of the P500,000.00 deposit vis-a-vis the claim of respondents on the arrears in rentals and on the damage to the premises. It is only now that the amount that should be returned is ascertained, i.e., P500,000.00 less the two-months arrears in rentals amounting to P195,833.34, the sum of which will earn

interest at the legal rate of six percent (6%) per annum42 from the time the case was filed in the RTC on October 21, 1998.43 Upon finality of this decision, the rate of interest shall be twelve percent (12%) per annum from such finality until full satisfaction. The foregoing interest rate is based on the guidelines set by the Court in Eastern Shipping Lines v. CA, viz.:

I. When an obligation, regardless of its source, i.e., law, contracts, quasi-contracts, delicts or quasi-delicts is breached, the contravenor can be held liable for damages. The provisions under Title XVIII on "Damages" of the Civil Code govern in determining the measure of recoverable damages.

II. With regard particularly to an award of interest in the concept of actual and compensatory damages, the rate of interest, as well as the accrual thereof, is imposed, as follows:

1. When the obligation is breached, and it consists in the payment of a sum of money, i.e., a loan or forbearance of money, the interest due should be that which may have been stipulated in writing. Furthermore, the interest due shall itself earn legal interest from the time it is judicially demanded. In the absence of stipulation, the rate of interest shall be 12% per annum to be computed from default, i.e., from judicial or extrajudicial demand under and subject to the provisions of Article 1169 of the Civil Code.

2. When an obligation, not constituting a loan or forbearance of money, is breached, an interest on the amount of damages awarded may be imposed at the discretion of the court at the rate of 6% per annum. No interest, however, shall be adjudged on unliquidated claims or damages except when or until the demand can be established with reasonable certainty. Accordingly, where the demand is established with reasonable certainty, the interest shall begin to run from the time the claim is made judicially or extrajudicially (Art. 1169, Civil Code) but when such certainty cannot be so reasonably established at the time the demand is made, the interest shall begin to run only from the date of the judgment of the court is made (at which time the quantification of damages may be deemed to have been reasonably ascertained). The actual base for the computation of legal interest shall, in any case, be on the amount of finally adjudged.

3. When the judgment of the court awarding a sum of money becomes final and executory, the rate of legal interest, whether the case falls under paragraph 1 or paragraph 2, above, shall be 12% per annum from such finality until its satisfaction, this interim period being deemed to be by then an equivalent to a forbearance of credit.44

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Concerning the solidary liability of respondents, we hold that respondent Matias Aznar III is not solidarily liable with respondent company. His function as the President of the company does not make him personally liable for the obligations of the latter. A corporation, being a juridical entity, may act only through its directors, officers and employees. Obligations incurred by them while acting as corporate agents, are not their personal liability but the direct accountability of the corporation they represent.45

WHEREFORE, the petition is PARTLY GRANTED. The Decision of the Court of Appeals is hereby REVERSED AND SET ASIDE. The Decision of the RTC in Civil Case No. CEB-22847 is hereby REINSTATED with the following modifications:

(1) Talisay Sports Complex, Inc. is solely liable to return the amount of the deposit after deducting the amount of the two-months arrears in rentals; and

(2) The rate of legal interest to be paid is SIX PERCENT (6%) on the amount due computed from October 21, 1998, and TWELVE PERCENT (12%) interest, thereon upon finality of this decision until full payment thereof.

SO ORDERED.