REPUBLIC OF THE PHILIPPINES, represented by the DIRECTOR OF LANDS, petitioner,

vs.
JOSEFINA B. VDA. DE NERI, SPS. GRACIANO B. NERI, JR. and VICTORIA BABIERA,
SPS. VICTORIA NERI and MARIO FERNANDEZ, RAMON NERI, SPS. TERESA NERI and
ALBERTO YRASTORZA and the REGISTER OF DEEDS OF CAGAYAN DE ORO
CITY, respondents.
DECISION
CALLEJO, SR., J.:
Before the Court is the petition for review on certiorari filed by the Republic of the Philippines,
represented by the Director of the Bureau of Lands, seeking to reverse and set aside the Decision 1 of
the Court of Appeals (CA) in CA-G.R. CV No. 50139 affirming the decision of the Regional Trial
Court of Misamis Oriental, Branch 20, Cagayan de Oro City, which, in turn, dismissed the
petitioners complaint for the annulment of Original Certificate of Title (OCT) No. 0662 and
reversion. Likewise sought to be reversed and set aside is the appellate courts Resolution dated
August 4, 1999, denying the petitioners motion for reconsideration.
The antecedent facts are summarized as follows:
Lot 2821, Plan (LRC) SWO-150, approved by the Land Registration Commission, is a parcel of land
with an area of 105.568 hectares located along the Cagayan de Oro River in Sitio Taguanao, Indahag,
Cagayan de Oro City. On September 3, 1973, the Bureau of Forest Development certified that the
property was alienable and disposable.2 On July 24, 1974, the heirs of Graciano Neri, Sr.3 filed an
application with the then Court of First Instance of Misamis Oriental for judicial confirmation of
imperfect or incomplete title, docketed as Land Registration Case No. N-531, LRC Record No.
46236. They alleged, inter alia, thus:
1. That applicants GRACIANO B. NERI, JR. is of legal age, married to VICTORIA
BABIERA, Filipino and residing at 833 Recto Avenue, Cagayan de Oro City; JOSEFINA B.
VDA. [DE] NERI is of legal age, widow of GRACIANO A. NERI, Filipino and residing at
833 Recto Avenue, Cagayan de Oro City; VICTORIA N. FERNANDEZ is of legal age,
married to MARIO FERNANDEZ, Filipino and residing at 832 Recto Avenue, Cagayan de
Oro City; RAMON B. NERI is of legal age, single, Filipino and residing at 833 Recto
Avenue, Cagayan de Oro City; and MA. TERESA N. YRASTORZA is of legal age, married
to ALBERT YRASTORZA, Filipino and residing at 833-Y Recto Avenue, Cagayan de Oro
City, hereby apply to have the land hereinafter described brought under the operation of the
Land Registration Act, and to have the title thereto registered and confirmed;
2. That the applicants are the owners in fee simple of a certain parcel of land situated at
Barrio Indahag in the City of Cagayan de Oro, the said land bounded and described on the
plan and technical description, attached hereto and made a part hereof;

3. That said land at the last assessment for taxation was assessed for P33,820.00;
4. That applicants do not know of any mortgage or encumbrances affecting the said land, or
that any other person has any estate or interest therein legal or equitable possession,
remainder, reversion or expectance;
5. That applicants obtained title on said property by virtue of intestate succession from the
late GRACIANO A. NERI who died on December 20, 1971 in the City of Cagayan de Oro;
6. That applicants herein together with their predecessors-in-interest have been in open,
public, peaceful, adverse, and continuous possession in the concept of owners and have been
paying taxes thereon;
7. That the said land is legally occupied by the following persons together with their families
in the concept of Tenants, namely:
a) PEDRO CABALUNA residing at Indahag, Tibasak, Cagayan de Oro City
b) CERELO BADETAH residing at Indahag, Tibasak, Cagayan de Oro City
8. That the names and addresses so far as known to applicants of the owners of all land
adjoining the land above-mentioned are as follows:
a) JOSE F. MARFORI of Cagayan de Oro City
b) INSULAR GOVERNMENT of the PHILIPPINES
c) CAGAYAN DE ORO CITY (Cagayan River)
9. This application is accompanied by the following documents:
a) Tracing plan of the lot together with a blue print copy thereof;
b) Technical description of the land;
c) Tax Declarations:
1. T.D. No. 1096
2. T.D. No. 22280

3. T.D. No. 10964

4. T.D. No. 81439
10. That by the application of Sections: 47, 48, 49, 50, and 51 of Com. Act 141 as amended
by Rep. Acts Nos. 107, 1942, 2061 and 2036, this application is in order and the jurisdiction
of this Honorable Court exist and can be exercised in connection with this instant
application.4
The applicants prayed that, after due proceedings, judgment be rendered in their favor in this wise:

In its complaint, the petitioner alleged inter alia that it is the true owner of a parcel of land of the
public domain surveyed as Lot No. 2821 (subject lot) containing an area of 1,055,684 square meters
or 105.5684 hectares situated in Cagayan de Oro City.9 The petitioner also alleged that the Bureau of
Forest and Development had classified the subject lot as alienable and disposable; as such, it was
under the direct executive control, administration and disposition of the Director of the Bureau of
Lands. Despite the fact that the Solicitor General and the Director of the Bureau of Lands were not
served copies of the respondents application for judicial confirmation of imperfect title in LRC Case
No. N-531, in violation of Section 51 of Commonwealth Act No. 141, the said case was set for initial
hearing on June 18, 1975. The petitioner also averred that although the survey plan of the subject lot,
Plan (LRC) SWO-150, was processed and approved by the Land Registration Commission, it was
not submitted to the Director of the Bureau of Lands for re-verification and approval as required by
Sections 2 and 3 of Presidential Decree No. 239. As such, according to the petitioner, the court failed
to acquire jurisdiction over the property.

WHEREFORE, premises considered, it is most respectfully prayed that after due notice, the validity
of the alleged title or claim be inquired into and after due hearing an order be issued directing the
Land Registration Commission to issue the corresponding decree over the said parcel of land so that
The petitioner prayed that after due proceedings, judgment be rendered nullifying the proceedings in
a Certificate of Title be issued in favor of the applicants under the provisions of the Land Registration
LRC No. N-531, as well as the courts decision therein, for lack of jurisdiction over the person of the
Act.
petitioner as well as the property subject matter of the case. According to the petitioner, this is in
view of the courts failure to comply with Section 51 of Commonwealth Act No. 141, which
Prays for other relief in the premises.5
mandates that a copy of an application for judicial confirmation of imperfect title should be duly
served on the Director of the Bureau of Lands; and the private respondents failure to comply with
The applicants thereafter filed an amended application in the same case on December 17, 1974. On
Sections 2 and 3 of P.D. No. 239, which requires the plan to be re-verified and approved by the
January 27, 1975, the Court, through the Land Registration Commission, issued a notice of initial
Director of the Bureau of Lands, in this case, Plan (LRC) SWO-150. The petitioner prayed OCT No.
hearing addressed, among others, to the Director of the Bureau of Lands, the Solicitor General, and
0662 issued in favor of the private respondents be declared null and void.
the Bureau of Forest Development.6 The notice was published in the February 17 and 24, 1975 issues
of the Official Gazette. Copies thereof were sent by ordinary mail to the persons named therein; the
In their answer, the private respondents averred that the subject lot had been theirs and their
copies intended for the Director of the Bureau of Lands and the Office of the Solicitor General were
predecessors private and exclusive property for more than fifty years, and that OCT No. 0662
sent by special messenger.7 The Solicitor General and the Director of the Bureau of Lands failed to
covering the same was issued in their favor on September 20, 1976. The private respondents
file any opposition thereto.
contended that the duty to comply with the requirement under Section 51 of CA No. 141, that the

On February 5, 1976, the court rendered judgment granting the application. The Office of the
Solicitor General, as well as the Director of the Bureau of Lands, failed to appeal the same. Thus, the
court issued Decree No. N-361749, on the basis of which OCT No. 0662 was issued by the Register
of Deeds of Cagayan de Oro City on September 26, 1976.

Solicitor General through the Director of the Bureau of Lands be served a copy of the application for
the judicial confirmation of imperfect or incomplete title, devolved upon the clerk of court of the land
registration court. They also averred that a report on the pre-verification and approval of Plan (LRC)
SWO-150 had been forwarded by the Regional Director of the Bureau of Lands to the Director of the
Bureau of Lands. Moreover, Plan (LRC) SWO-150 covering the subject lot had been duly processed
and approved by the Land Registration Commission. According to the respondents, even if there
were deficiencies on the part of the administrative officials in complying with the procedures relative
to land registration, the same was not jurisdictional, but merely a procedural flaw. As such, the failure
of the Bureau of Lands and the Land Registration Commission to comply with the law did not result
in nullifying the proceedings in LRC Case No. N-531. Finally, the respondents countered, the action
of the petitioner had long since prescribed.

On January 5, 1981, the Office of the Solicitor General, for and in behalf of the petitioner Republic
of the Philippines, through the Director of the Bureau of Lands, filed with the court a quo a
complaint for annulment of OCT No. 0662 and the reversion of the property covered by the said title
against herein respondents.8 The case was docketed as Civil Case No. 7514.

In its reply, the petitioner alleged that Plan (LRC) SWO-150 was never submitted, much less
approved, to the Director of the Bureau of Lands. The report required by Section 2 of P.D. No. 239 is
one which the Director of the Bureau of Lands actually submitted to the court. The petitioner alleged
that no such report was submitted in this case.

On the designated time and date of the hearing, no representative from the Office of the Solicitor
General and the Bureau of Lands appeared in court. The court granted the motion of the applicants
for an order of general default "against the whole world," except those who filed their opposition or
appeared during the hearing. The court thereafter issued an order allowing the applicants to adduce
evidence ex parte.

On October 16, 1976, the private respondents filed a motion in LRC Case No. N-531 for the issuance
of a writ of possession and the demolition of the houses of the occupants. The court granted the
motion. The Director of the Bureau of Lands, likewise, prayed for the suspension of the enforcement
of the writ pending final resolution of Civil Case No. 7514. The court refused to suspend the
enforcement of its decision.

In the meantime, the court issued an Order on April 6, 1988 denying the said motion for leave to
intervene. The court later denied the motion for the reconsideration of the said order. Thereafter,
Undersecretary and Officer-in-Charge of the Bureau of Lands Rolleo Ignacio executed a Special
Power of Attorney authorizing Atty. Vicente Seria of the Office of the Regional Director of the
Bureau of Lands to represent the petitioner during the pre-trial. 12

On November 19, 1981, the Republic of the Philippines, through the Director of the Bureau of
Lands, filed a petition for certiorari and prohibition with this Court, docketed as G.R. No. 58823,
with the following prayer:

During the hearing of March 27, 1989, the parties agreed to forego a full-blown trial and to instead
file their respective "Memorandum of Authority" and to submit evidence in support of their
respective contentions. The court issued an order on the said date, giving the parties thirty days to
submit their respective memoranda and evidence.

1. Declaring as null and void the decision rendered by the court in Land Registration Case as
plan (LRC) Swo-150, Cagayan de Oro City, in favor of the private defendants;
2. Declaring as null and void the corresponding Decree No. N-361749 and Original
Certificate of Title No. 0662 issued by the same court in favor of the private defendants;
3. Ordering the Register of Deeds of Cagayan de Oro City to cancel Original Certificate of
Title No. 0662 issued in the name of the private defendants;
4. Ordering the reversion of the land covered by Original Certificate of Title No. 0662 to the
State and declaring the same as owned and belonging to the latter; and
5. Awarding such further reliefs and remedies as may be just and equitable in the premises. 10

The petitioner submitted its memorandum, appending thereto the documents marked respectively as
follows:
1) Exhibit A The Certification made by the Officer-in-Charge of the Regional Directors
Office for Forestry that the property had been certified on September 3, 1973 as alienable
and disposable.13
2) Exhibit B The letter of the representatives of the Philippine Constabulary Provincial
Commander and those of the Bureau of Lands, Bureau of Forest Development, and
Department of Agrarian Reform to the Provincial Commander that there were 73 bona fide
tillers on the property seeking to have the property subdivided and distributed to them. 14

On March 18, 1985, this Court rendered a decision dismissing the petition without prejudice to the
outcome of the petitioners action against the private respondents in Civil Case No. 7514. The
decision of the Court became final and executory.

3) Exhibit C The Letter dated October 3, 1977 from the Chief, Regional Director of the
Bureau of Lands directing the District Land Officer of Cagayan de Oro to submit a report
within two days from notice thereof on the letter of the occupants requesting for the
subdivision of the property, viz.:

On July 17, 1985, Leonel Valdehuesa and 22 others filed a motion for leave to intervene, and alleged,
as follows: (a) They were members of the Cagayan de Oro Green Revolution Movement Association
(COGREMA); (b) They had been occupying the property even before 1969 and commenced working
extensive improvements thereon in 1969; (c) They filed a petition with the Presidential Action
Committee on Land Problems (PACLAP) in 1973, and sought the subdivision of the property and the
distribution of the lots to the occupants thereof; and, (d) As occupants, they were never informed of
Graciano Neris application in LRC Case No. N-531. The intervenors prayed that OCT No. 0662 be
nullified.

Considering the urgency of the case, you are hereby directed to submit the report within five
(5) days from receipt hereof. In your report you should state whether the copy of the petition
for registration was received by that Office considering that the case has come into your
knowledge and if so, the date of its receipt thereof, and why the same has not been
forwarded to us immediately. You should also secure a certification from the District Forest
Office regarding the date of release of the area from the forest zone, as it appears that the
land was only released on September 13, 1973. This information is necessary to determine
whether the applicant has acquired a registerable title to the land. 15

In an Order dated September 6, 1985, the court a quo dismissed the complaint and the complaint-inintervention for lack of jurisdiction to annul the judgment of the CFI in LRC No. N-531, in view of
the promulgation of Batas Pambansa Blg. 129. However, on petition for certiorari filed by the
petitioner, docketed as G.R. No. 72218, this Court, in its Resolution dated July 21, 1986, set aside the
said order and directed the court a quo to proceed with the hearing of the case. 11

4) Exhibit D The Report dated July 15, 1975 of the Chief Surveyor of the Land
Registration Commission and Acting Chief, Division of Original Registration of the Land
Registration Commission to the Court in LRC Case No. N-531. Thus:

That a certain parcel of land described on plan LRC Swo-1507, Lot 2821, Cagayan
Cadastre 237, Case 1, is applied for registration of title in the above-entitled land
registration case;
That upon verification of our Record of Cadastral Lots, Book No. 64, under Cad.
Court Case No. 17, LRC (GLRO) Cadastral Record No. 1561, Cagayan Cadastre,
Province of Misamis Oriental, it was found that said Lot 2821 is subject of the
following annotations, to quote:

Letter of Commissioner of Land Registration to the Court

dated October 31, 1974 acknowledging receipts of the
duplicate records of the application and its answer in LRC
Case No. N-53120

Notice of Initial Hearing in LRC Case No. N-531 dated

January 27, 197521

Certificate of Publication from Land Registration

Commission dated March 24, 197522

Letter of Land Registration Commission to counsel of

applicants dated March 12, 197523

Report of Land Registration Commission24

Letter of the Geodetic Engineer dated July 20, 1973, to

the respondents25

Letter of the Administrative Assistant of the District

Lands Office to the Bureau of Lands through the District
Land Office dated June 3, 1975.

"Lot 2821 (129-1) Pte. de Subd. Parte Public Land."

That it is gleaned from the aforequoted annotations that a decision has been
rendered for said Lot 2821 in cadastral proceedings under Cad. Court Case No. 17,
LRC (GLRO) Cadastral Record No. 1561, Cagayan Cadastre, Province of Misamis
Oriental, but no decree of registration has been issued for said lot pursuant to the
decision rendered in the aforementioned cadastral case. Copy, however, of said
decision is not among our salvaged records. It likewise appears in the above
annotations that Lot 2821 is pending subdivision and that portion of the same was
declared public land;
That it is further informed that this Commission is not in a position to verify
whether the land described on plan Swo-1507, Lot 2821, Cagayan Cadastre 237,
Case 1, subject of this application for registration is already covered by a patent
previously issued or within the forest zone.16
5) Exhibit E The application in LRC Case No. N-531.17
6) Exhibit F Photographs showing the Taguanao District Elementary School which stood
on a portion of the subject property, to prove that more than 300 hundred families resided on
the property and that its occupants had made extensive improvements thereon.
For their part, the private respondents appended to their memorandum documentary evidence marked
as follows:
Exhibit
No.

Brief Description

Tax Declaration No. 10994 covering 1948 Lot 2821-C-1

with an area of 101.5618

2 to 2-G Tax receipts over lots from 193819

On January 31, 1995, the court rendered judgment dismissing the complaint on the ground that the
petitioner failed to prove the factual averments therein. The dispositive portion of the decision reads:
WHEREFORE, in the light of the above, judgment is hereby rendered in favor of the defendants and
against the Republic of the Philippines:
1. Dismissing the complaint in the above-entitled case and no pronouncement will be made
on the civil aspect herein as the answer did not claim any damages, etc.;
2. Declaring as valid and legal all the proceedings taken by the Court of First Instance of
Misamis Oriental, Branch 1, regarding OCT No. 0662;
3. Upholding the validity and indefeasibility of Original Certificate of Title No. 0662 issued
on September 20, 1976 involved herein;
4. Declaring the order for issuance of a decree to issue Original Certificate of Title No. 0662
as valid and lawful; and
5. Costs against plaintiff.
SO ORDERED.26

The trial court declared that the requisite copies of the notice of initial hearing had been transmitted
to the Office of the Solicitor General and the Bureau of Lands as confirmed by Josefina Bacarusso,
the incumbent Branch Clerk of Court when LRC Case No. N-531 was being heard. The court further
stated that the petitioner failed to adduce at least prima facie evidence to prove the material
allegations of the complaint. The presumption, then, the trial court declared, was that the personnel of
Branch 1 of the CFI and the officers of the Bureau of Lands performed their duties in accordance
with law, there being no evidence to the contrary. The court even noted the fact that the petitioner,
through counsel, agreed to dispense with the trial and to submit the case for decision after the
submission of the parties respective memoranda and documentary evidence.

I. THE LOWER COURT GRAVELY ERRED IN RELYING SOLELY ON

PRESUMPTIONS AS THE BASIS OF ITS DECISION.
II. THE LOWER COURT GRAVELY ERRED IN RENDERING A DECISION WITHOUT
HOLDING A TRIAL AND GIVING AN OPPORTUNITY TO APPELLANT TO PRESENT
EVIDENCE.27
The Office of the Solicitor General alleged that the trial court acted arbitrarily when it rendered
judgment based on the pleadings notwithstanding the following factual issues that were raised by the
parties:
APPELLANTS
POSITION

1. Service of copy of application

and its annexes to the Director of
Lands

No compliance

2. Service of copy of application

and its annexes to the Solicitor
General

No compliance

On April 29, 1999, the CA rendered a decision affirming the ruling of the CFI holding that: (a) the
petitioner failed to prove the material allegations of its complaint; and, (b) the personnel of the CFI
and the Land Registration Commission are presumed to have performed their duties as the law
mandated.30 The CA denied the petitioners motion for reconsideration of the said decision.
The petitioner filed its petition for review on certiorari praying that the court resolve the following
issues:

The petitioner appealed to the Court of Appeals contending that:

FACTUAL ISSUES

admitted that the Land Registration Commissions survey plan had not been re-evaluated much less
approved, by the Director of the Bureau of Lands. They averred, however, that the same was merely
a procedural defect.29

APPELLEES POSITION
The Clerk of Court complied or is
supposed to comply therewith

A. WHETHER OR NOT THE COURT OF APPEALS, IN AFFIRMING THE APPEALED

JUDGMENT DATED JANUARY 31, 1995, COMMITTED GRAVE ERROR WHEN IT
AFFIRMED THE JURISDICTION OF THE COURT OF FIRST INSTANCE OF MISAMIS
ORIENTAL OVER THE SUBJECT MATTER AND THE PARTIES IN LAND
REGISTRATION CASE NO. 531, COURT (SIC) ON THE BASIS OF THE DISPUTABLE
PRESUMPTION OF REGULARITY OF PERFORMANCE OF OFFICIAL ACTS
(SECTION 3[m], Rule 131 OF THE RULES OF COURT).
B. WHETHER OR NOT THE COURT OF APPEALS COMMITTED GRAVE ERROR
WHEN IT AFFIRMED THE APPEALED JUDGMENT DATED JANUARY 31, 1995
NOTWITHSTANDING THAT IT WAS RENDERED WITHOUT A TRIAL.31
In their comment on the petition, the private respondents assert that the issues raised by the petitioner
pertain merely to factual matters and not to questions of law. Furthermore, as shown by the records of
Branch 1 of the CFI in LRC Case No. N-531, the petitioner received a copy of the application, the
amended application, as well as the notice of the initial hearing of the case.

The threshold issues for resolution are as follows: (a) whether or not the Court may review the
decision of the appellate court on the issues raised herein; (b) whether the RTC erred in rendering the
decision without a full-blown trial, based solely on the pleadings of the parties and the documents
appended to their memorandum; and (c) whether the decision of the trial court was made in
accordance with law.
3. Submission of the survey plan No compliance
The survey plan has been duly processed
to the Director of Lands for
and approved by the Land Registration On the first issue, the rule is that only questions of law may be reviewed in this Court on a petition
reverification and approval
Commission
for review on certiorari under Rule 45 of the Rules of Court. However, it has also been held that the
finding of facts of the appellate court may be questioned in this Court, where as in this case, the
4. Submission of the report by
No compliance
A Report has been made to the Directorlatters
of
judgment is based on a misapprehension of the facts, or such findings are contrary to the
the Director of Lands
Lands, Manila by the Regional Office ofadmissions of the parties, or when certain relevant facts are overlooked, which, if property
the Bureau of Lands in Cagayan de Oroconsidered, would justify a different conclusion.32
The Office of the Solicitor General contends that the trial court should have conducted a full-blown
trial instead of allowing the parties to forego with the same. The private respondents, for their part,
The Clerk of Court complied or is
supposed to comply therewith

In this case, the petitioner avers that the trial court erred when it rendered a decision without
conducting a full-blown trial, and based its ruling merely on the pleadings of the parties and the
documents appended to their respective memoranda. The petitioner asserts that under Rule 34 of the
Rules of Court, the court may render judgment on the pleadings only when the respondents answer
fails to tender an issue or otherwise admits the material allegations of the adverse partys pleadings.
Furthermore, it was not proper for the trial court to render summary judgment under Rule 35 of the
Rules of Court, for the simple reason that the private respondents, in their answer, tendered genuine
issues of fact which called for the presentation of evidence.
We do not agree with the petitioner. The trial court dispensed with a full-blown trial because,
precisely, the parties themselves agreed thereto, on the claim that the issues raised may be resolved
on the basis of the pleadings, the memoranda and the appended documents, without need of
presenting witnesses thereon. A party may waive its right to present testimonial evidence and opt to
adduce documentary evidence and thereafter, submit the case for resolution based solely on their
pleadings and documentary evidence. In this case, no less than the petitioner, represented by the
Office of the Solicitor General through Special Attorney Vicente Seria, agreed to dispense with a
full-blown trial.
On the second issue, we agree with the petitioner that the trial court erred in rendering judgment in
favor of the private respondents and that the CA committed a reversible error in affirming the same.

thereon. However, we also agree with the CA that it was the burden of the petitioner in the trial court
to prove the material allegations of its complaint. This is provided in Section 1, Rule 131 of the Rules
of Court which reads:
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.
Obviously, the burden of proof is, in the first instance, with the plaintiff who initiated the action. But
in the final analysis, the party upon whom the ultimate burden lies is to be determined by the
pleadings, not by who is the plaintiff or the defendant. The test for determining where the burden of
proof lies is to ask which party to an action or suit will fail if he offers no evidence competent to
show the facts averred as the basis for the relief he seeks to obtain,33 and based on the result of an
inquiry, which party would be successful if he offers no evidence.34
In ordinary civil cases, the plaintiff has the burden of proving the material allegations of the
complaint which are denied by the defendant, and the defendant has the burden of proving the
material allegations in his case where he sets up a new matter. All facts in issue and relevant facts
must, as a general rule, be proven by evidence except the following:
(1) Allegations contained in the complaint or answer immaterial to the issues.

The CA ruled that the petitioner was burdened to prove that the issuance of OCT-0662 was marred by
irregularities. It further held that a title issued under the torrens system of registration is presumed
valid, and unless and until the petitioner adduced competent and strong evidence to prove otherwise,
government officials such as the personnel of the CFI and the Land Registration Commission and the
Director of the Bureau of Lands are presumed to have performed their duties in accordance with law.
According to the CA, the petitioner failed to adduce such evidence. The appellate court took note that
the private respondents even appended documentary evidence to their memorandum showing
compliance with the statutory requirement.

(2) Facts which are admitted or which are not denied in the answer, provided they have been
sufficiently alleged.

For its part, the petitioner contends that as defendants in the trial court, it was the burden of the
private respondents to prove the existence of a fact that the land registration court had acquired
jurisdiction over the subject matter of the petition and over the persons of the respondent therein;
conversely, the private respondents, as applicants therein, were obliged to adduce in evidence the
survey plan approved by the Director of the Bureau of Lands as required by P.D. Nos. 239 and 1529.
According to the petitioner, there is no presumption in favor of the jurisdiction of a court of limited
jurisdiction, such as a land registration court. It contends that where the jurisdiction of a court
depends upon the existence of facts, it has no right or power to proceed or act upon a pleading which
does not substantially set forth such facts.

(5) Facts which are legally presumed.

We find for the petitioner. As applicants in LRC Case No. N-531, the private respondents had the
burden of complying with the statutory requirement of serving the Director of the Bureau of Lands
with a copy of their application and amended application, and to show proof of their compliance

(3) Those which are the subject of an agreed statement of facts between the parties; as well
as those admitted by the party in the course of the proceedings in the same case.
(4) Facts which are the subject of judicial notice.

(6) Facts peculiarly within the knowledge of the opposite party.35

The effect of a presumption upon the burden of proof is to create the need of presenting evidence to
overcome the prima facie case created thereby which if no proof to the contrary is offered will
prevail; it does not shift the burden of proof.36 In this case, the personnel of the Land Registration
Commission and the CFI in LRC Case No. N-531 are presumed to have performed their duty of
serving a copy of the application and its appendages to the petitioner. It was thus the burden of the
petitioner to prove that: (a) it was not served with a copy of the application of the private respondents
and its annexes; (b) the private respondents failed to append to their application the survey plan of
Lot No. 2821, duly approved by the Director of the Bureau of Lands as required by P.D. Nos. 1529
and 239. Unless the same were admitted by the respondents, the petitioner should have adduced in
evidence the relevant portions of the records of LRC Case No. N-531, including the decision of the

trial court, to prove that the Director of the Bureau of Lands was not served with a copy of the
application and the amended application.37

In paragraph 4 of their answer to the complaint, the private respondents denied the foregoing
allegation in paragraph 8, but alleged as follows:

Section 13, Rule 13 of the Rules of Court provides as follows:

4. That defendants DENY the allegations in paragraph 8 of the Complaint, the truth of the matter
being that the survey plan has been duly processed and approved by the Land Registration
SEC. 13. Proof of service. Proof of personal service shall consist of a written admission of the party Commission. As regards the Report required by the provisions of Section 3 of PD 239, the records
show that a Report has been made to the Director of Lands, Manila, by the Regional Office of the
served, or the official return of the server, or the affidavit of the party serving, containing a full
Bureau of Lands in Cagayan de Oro City. Moreover, the deficiencies of the administrative officials of
statement of the date, place and manner of service. If the service is by ordinary mail, proof thereof
the government in following procedures or rules and implementing circulars relative to land
shall consist of an affidavit of the person mailing of facts showing compliance with section 7 of this
registration cases, if any, is not a ground for voiding the title already issued since the defect, if any, is
Rule. If service is made by registered mail, proof shall be made by such affidavit and the registry
not jurisdictional but merely procedural in nature. Besides, the fault or omission, if any, is that of the
receipt issued by the mailing office. The registry return card shall be filed immediately upon its
39
receipt by the sender, or in lieu thereof the unclaimed letter together with the certified or sworn copy Land Registration Commission and the Director of Lands and not that of the defendants;
of the notice given by the postmaster to the addressee.
The private respondents failed to specifically deny the petitioners averment in its complaint that
LRC Plan SWO-150 had not been approved by the Director of the Bureau of Lands. The private
Such proof of service should be found in the records of the case in which the application/amended
application was filed, in this case, LRC Case No. N-531. The same records will also show whether or respondents thereby impliedly admitted that the Director of the Bureau of Lands had not approved
40
not the private respondents appended the survey plan duly approved by the Director of the Bureau of any survey plan as required by Sections 2 and 3 of P.D. No. 239.
Lands to their application, as mandated by P.D. Nos. 1529 and 239, and whether the private
respondents adduced the said plan in evidence.
In light of the private respondents admission, the petitioner was relieved of its burden of still proving
that the Director of the Bureau of Lands had not approved any survey plan of Lot 2821 before the
The petitioner should have moved for the issuance of a subpoena duces tecum for the Clerk of Court trial court rendered its decision.
of Branch 1 of the RTC to bring to the court the records of LRC Case No. N-531 to prove the
material allegations of its complaint. The petitioner did not.
We reject the contention of the private respondents that the reevaluation and approval of the Director
of the Bureau of Lands of the survey plan are not mandatory requirements and that the lack thereof
did not render Original Certificate of Title No. 0662 void. Case law has it that it is not the function of
The question that comes to fore then is whether or not the petitioner was burdened to prove its
41
allegation that the Director of the Bureau of Lands had approved Plan (LRC) SWO-150. The answer the Land Registration Commission to approve original plans. The duty devolved upon the Director
of the Bureau of Lands, as mandated by Section 17 of P.D. No. 1529. Applicants for land registration
to the question is dependent on the resolution of the issue of whether or not the private respondents
are required to append a survey plan to their application, duly approved by the Bureau of Lands, thus:
admitted the same, impliedly or expressly, in their answer to the complaint and in their pleadings.
A careful perusal of the records reveals that in paragraph 8 of its complaint, the petitioner alleged that
the survey plan, Plan (LRC) SWO-150 was not submitted to the Director of the Bureau of Lands for
re-verification and approval as required by law, notwithstanding which the trial court rendered
judgment in favor of the applicants. Hence, the petitioner concluded, the said plan is void:

Sec. 17. What and where to file. The application for land registration shall be filed with the Court
of First Instance of the province or city where the land is situated. The applicant shall file together
with the application all original muniments of titles or copies thereof and a survey plan approved by
the Bureau of Lands.

8. That the survey plan of the land applied for in said registration case, plan (LRC) SWO-150, is a
plan processed and approved by the Land Registration Commission, but the same plan was not
submitted to the Director of Lands for re-verification and approval as required by the provision of
Section 2, Presidential Decree No. 239, series of 1973. Hence, the plan (LRC) Swo-150 submitted
with the application should be considered as void and non-existing. Furthermore, on February 5,
1976, the said land registration court, after receiving the evidence of the applicants ex parte, rendered
its decision in the land registration case without requiring the Director of Lands to submit his report
as required by the provision of Section 3 of the same Presidential Decree No. 239; 38

The submission of the plan approved by the Director of the Bureau of Lands is a statutory
requirement which is mandatory in nature. The plan approved by the Land Registration Commission
is of no value.42 It behooved the trial court not to take cognizance of any application for land
registration in the absence of a survey plan duly approved by the Director of the Bureau of Lands
appended thereto. The private respondents admitted that the Director of the Bureau of Lands had not
approved any survey plan for Lot No. 2821. Consequently, the title issued by the Register of Deeds
in favor of the private respondents is null and void. Such title cannot ripen into private ownership. As
we held in a recent case:43

No plan or survey may be admitted in land registration proceedings until approved by the Director of
Lands. The submission of the plan is a statutory requirement of mandatory character. Unless a plan
and its technical description are duly approved by the Director of Lands, the same are of no value.

Decision of the Court of First Instance appealed from is also SET ASIDE AND REVERSED. The
Court hereby nullifies Original Certificate of Title No. 6662 under the names of the private
respondents and orders the reversion of the property covered by the said title to the petitioner.

Thus, the allegation that the signature approval for the survey plan was nowhere to be found is an
important jurisdictional fact that must be ventilated before the trial court. In Republic vs.
Intermediate Appellate Court, this Court stated that "void ab initio land titles issued cannot ripen into
private ownership." Thus, as OCT No. 17 is void and Segundina traces her rights to OCT No. 17, her
claim would have no basis as a spring cannot rise higher than its source.

SO ORDERED.

We also reject the private respondents submission that they should not be faulted for the failure of
the Director of the Bureau of Lands to act on and resolve the recommendation of its Regional
Director. The private respondents were mandated to comply with the requirements of P.D. No. 1529
with fealty before they filed their application for judicial confirmation of imperfect title in the court a
quo.
Parenthetically, the evidence of the petitioner shows that the private respondents failed to append a
survey plan duly approved by the Director of the Bureau of Lands to their application. 44
The records show that on October 3, 1977, or after the CFI had rendered judgment in LRC Case No.
N-531, the Regional Director of the Bureau of Lands directed the District Land Officer to report if
the applicants in LRC Case No. N-531 had already furnished a copy to his office and, if so, to explain
why the same had not been forwarded to the Regional Office.45 In fine, as of October 3, 1977, the
copy of the application of the private respondents in LRC No. N-531 had not been forwarded to the
Regional Office of the Bureau of Lands. Indeed, it appears, based on the evidence of the parties, that
the trial court even ignored the Report of the Land Registration Commission dated July 15, 1975 in
LRC Case No. N-531 requiring the Directors of the Bureau of Lands and Forestry to submit a status
report of Lot No. 2821 before setting the case for hearing:

EASTERN SHIPPING LINES, INC., Petitioner, v. BPI/MS INSURANCE CORP., & MITSUI
SUMITOMO INSURANCE CO., LTD., Respondents.
DECISION
PEREZ, J.:
Before this Court is a Petition for Review on Certiorari1 of the Decision2 of the Second Division of
the Court of Appeals in CA-G.R. CV No. 88744 dated 31 January 2008, modifying the Decision of
the Regional Trial Court (RTC) by upholding the liability of Eastern Shipping Lines, Inc. (ESLI) but
absolving Asian Terminals, Inc. (ATI) from liability and deleting the award of attorneys fees.
The facts gathered from the records follow:
On 29 December 2004, BPI/MS Insurance Corporation (BPI/MS) and Mitsui Sumitomo Insurance
Company Limited (Mitsui) filed a Complaint3 before the RTC of Makati City against ESLI and ATI
to recover actual damages amounting to US$17,560.48 with legal interest, attorneys fees and costs
of suit.

In their complaint, BPI/MS and Mitsui alleged that on 2 February 2004 at Yokohama, Japan,
Sumitomo Corporation shipped on board ESLIs vessel M/V Eastern Venus 22 22 coils of various
Steel Sheet weighing 159,534 kilograms in good order and condition for transportation to and
delivery at the port of Manila, Philippines in favor of consignee Calamba Steel Center, Inc. (Calamba
WHEREFORE, this matter is brought to the attention of this Honorable Court for its information and Steel) located in Saimsim, Calamba, Laguna as evidenced by a Bill of Lading with Nos.
guidance in the disposition of the instant land registration case. Further, to avoid duplication in the
ESLIYMA001. The declared value of the shipment was US$83,857.59 as shown by an Invoice with
issuance of titles covering the same parcel of land and the issuance of titles for lands within the forest Nos. KJGE-03-1228-NT/KE3. The shipment was insured with the respondents BPI/MS and Mitsui
zone which have not been released and classified as alienable, it is respectfully recommended that the against all risks under Marine Policy No. 103-GG03448834.
Director of Lands and the Director of Forestry, respectively, be required to submit a report on the
status of the land applied for, before the hearing of the case, to determine whether said land or any
On 11 February 2004, the complaint alleged that the shipment arrived at the port of Manila in an
portion thereof is comprised in any patent or forest zone.46
unknown condition and was turned over to ATI for safekeeping. Upon withdrawal of the shipment by
the Calamba Steels representative, it was found out that part of the shipment was damaged and was
in bad order condition such that there was a Request for Bad Order Survey. It was found out that the
In recapitulation, then, the CFI committed a reversible error in dismissing the petitioners complaint
damage amounted to US$4,598.85 prompting Calamba Steel to reject the damaged shipment for
and in not rendering judgment in favor of the petitioner. In turn, the Court of Appeals erred in
being unfit for the intended purpose.
affirming the decision of the CFI.
IN LIGHT OF ALL THE FOREGOING, the Decision of the Court of Appeals affirming the Decision
of the Court of First Instance in Civil Case No. 7514 is SET ASIDE AND REVERSED. The

On 12 May 2004 at Kashima, Japan, Sumitomo Corporation again shipped on board ESLIs vessel
M/V Eastern Venus 25 50 coils in various Steel Sheet weighing 383,532 kilograms in good order

and condition for transportation to and delivery at the port of Manila, Philippines in favor of the same
consignee Calamba Steel as evidenced by a Bill of Lading with Nos. ESLIKSMA002. The declared
value of the shipment was US$221,455.58 as evidenced by Invoice Nos. KJGE-04-1327-NT/KE2.
The shipment was insured with the respondents BPI/MS and Mitsui against all risks under Marine
Policy No. 104-GG04457785.
On 21 May 2004, ESLIs vessel with the second shipment arrived at the port of Manila partly
damaged and in bad order. The coils sustained further damage during the discharge from vessel to
shore until its turnover to ATIs custody for safekeeping.
Upon withdrawal from ATI and delivery to Calamba Steel, it was found out that the damage
amounted to US$12,961.63. As it did before, Calamba Steel rejected the damaged shipment for being
unfit for the intended purpose.
Calamba Steel attributed the damages on both shipments to ESLI as the carrier and ATI as
the arrastre operator in charge of the handling and discharge of the coils and filed a claim against
them. When ESLI and ATI refused to pay, Calamba Steel filed an insurance claim for the total
amount of the cargo against BPI/MS and Mitsui as cargo insurers. As a result, BPI/MS and Mitsui
became subrogated in place of and with all the rights and defenses accorded by law in favor of
Calamba Steel.
Opposing the complaint, ATI, in its Answer, denied the allegations and insisted that the coils in two
shipments were already damaged upon receipt from ESLIs vessels. It likewise insisted that it
exercised due diligence in the handling of the shipments and invoked that in case of adverse decision,
its liability should not exceed P5,000.00 pursuant to Section 7.01, Article VII4 of the Contract for
Cargo Handling Services between Philippine Ports Authority (PPA) and ATI. 5 A cross-claim was also
filed against ESLI.
On its part, ESLI denied the allegations of the complainants and averred that the damage to both
shipments was incurred while the same were in the possession and custody of ATI and/or of the
consignee or its representatives. It also filed a cross-claim against ATI for indemnification in case of
liability.6
To expedite settlement, the case was referred to mediation but it was returned to the trial court for
further proceedings due to the parties failure to resolve the legal issues as noted in the Mediators
Report dated 28 June 2005.7
On 10 January 2006, the court issued a Pre-Trial Order wherein the following stipulations were
agreed upon by the parties:
1. Parties admitted the capacity of the parties to sue and be sued;
2. Parties likewise admitted the existence and due execution of the Bill of Lading covering
various steel sheets in coil attached to the Complaint as Annex A;

3. Parties admitted the existence of the Invoice issued by Sumitomo Corporation, a true and
faithful copy of which was attached to the Complaint as Annex B;
4. Parties likewise admitted the existence of the Marine Cargo Policy issued by the Mitsui
Sumitomo Insurance Company, Limited, copy of which was attached to the Complaint as
Annex C;
5. [ATI] admitted the existence and due execution of the Request for Bad Order Survey dated
February 13, 2004, attached to the Complaint as Annex D;
6. Insofar as the second cause of action, [ESLI] admitted the existence and due execution of the
document [Bill of Lading Nos. ESLIKSMA002, Invoice with Nos. KJGE-04-1327-NT/KE2
and Marine Cargo Policy against all risks on the second shipment] attached to the Complaint
as Annexes E, F and G;
7. [ATI] admitted the existence of the Bill of Lading together with the Invoices and Marine
Cargo Policy. [It] likewise admitted by [ATI] are the Turn Over Survey of Bad Order
Cargoes attached to the Complaint as Annexes H, H-1 and J. 8

The parties agreed that the procedural issue was whether there was a valid subrogation in favor of
BPI/MS and Mitsui; and that the substantive issues were, whether the shipments suffered damages,
the cause of damage, and the entity liable for reparation of the damages caused.9
Due to the limited factual matters of the case, the parties were required to present their evidence
through affidavits and documents. Upon submission of these evidence, the case was submitted
for resolution.10
BPI/MS and Mitsui, to substantiate their claims, submitted the Affidavits of (1) Mario A. Manuel
(Manuel),11 the Cargo Surveyor of Philippine Japan Marine Surveyors and Sworn Measurers
Corporation who personally examined and conducted the surveys on the two shipments; (2) Richatto
P. Almeda,12 the General Manager of Calamba Steel who oversaw and examined the condition,
quantity, and quality of the shipped steel coils, and who thereafter filed formal notices and claims
against ESLI and ATI; and (3) Virgilio G. Tiangco, Jr.,13 the Marine Claims Supervisor of BPI/MS
who processed the insurance claims of Calamba Steel. Along with the Affidavits were the Bills of
Lading14 covering the two shipments, Invoices,15 Notices of Loss of Calamba Steel,16 Subrogation
Form,17 Insurance Claims,18Survey Reports,19 Turn Over Survey of Bad Order Cargoes20 and Request
for Bad Order Survey.21ESLI, in turn, submitted the Affidavits of Captain Hermelo M.
Eduarte,22 Manager of the Operations Department of ESLI, who monitored in coordination with ATI
the discharge of the two shipments, and Rodrigo Victoria (Rodrigo),23 the Cargo Surveyor of R & R
Industrial and Marine Services, Inc., who personally surveyed the subject cargoes on board the vessel
as well as the manner the ATI employees discharged the coils. The documents presented were the
Bills of Lading, Secretarys Certificate24 of PPA, granting ATI the duty and privilege to
provide arrastre and stevedoring services at South Harbor, Port of Manila, Contract for Cargo

Handling Services,25 Damage Report26 and Turn Over Report made by Rodrigo.27 ESLI also adopted
the Survey Reports submitted by BPI/MS and Mitsui.28

For reasons known only to [ESLI], it did not implead ATI as a party respondent in this case when it
could have easily done so. Considering the nature of the arguments raised by petitioner pointing to
ATI as solely responsible for the damages sustained by the subject shipments, it is respectfully
Lastly, ATI submitted the Affidavits of its Bad Order Inspector Ramon Garcia (Garcia) 29 and Claims
submitted that ATI is an indispensable party in this case. Without ATI being impleaded, the issue of
Officer Ramiro De Vera.30 The documents attached to the submissions were the Turn Over Surveys of whether ATI is solely responsible for the damages could not be determined with finality by this
Bad Cargo Order,31 Requests for Bad Order Survey,32 Cargo Gatepasses issued by ATI,33 Notices of
Honorable Court. ATI certainly deserves to be heard on the issue but it could not defend itself
Loss/Claims of Calamba Steel34 and Contract for Cargo Handling Services.3
because it was not impleaded before this Court. Perhaps, this is the reason why [ESLI] left out ATI in
this case so that it could not rebut while petitioner puts it at fault.45
On 17 September 2006, RTC Makati City rendered a decision finding both the ESLI and ATI liable
for the damages sustained by the two shipments. The dispositive portion reads
ESLI in its Reply46 put the blame for the non-exclusion of ATI to BPI/MS and
Mitsui:chanroblesvirtuallawlibrary
WHEREFORE, judgment is hereby rendered in favor of [BPI/MS and Mitsui] and against [ESLI
Inc.] and [ATI], jointly and severally ordering the latter to pay [BPI/MS and Mitsui] the following:
[BPI/MS and Mitsui] claim that herein [ESLI] did not implead [ATI] as a party respondent in
1. Actual damages amounting to US$17,560.48 plus 6% legal interest per annum commencing the Petition for Review on Certiorari it had filed. Herein Petitioner submits that it is not the
from the filing of this complaint, until the same is fully paid;
obligation of [ESLI] to implead ATI as the same is already the look out of [BPI/MS and Mitsui]. If
[BPI/MS and Mitsui] believe that ATI should be made liable, they should have filed a Motion for
2. Attorneys fees in a sum equivalent to 20% of the amount claimed;
Reconsideration with the Honorable Court of Appeals. The fact that [BPI/MS and Mitsui] did not
even lift a finger to question the decision of the Honorable Court of Appeals goes to show that
3. Costs of suit.36
[BPI/MS and Mitsui] are not interested as to whether or not ATI is indeed liable.47
Aggrieved, ESLI and ATI filed their respective appeals before the Court of Appeals on both
questions of fact and law.37Before the appellate court, ESLI argued that the trial court erred when it
found BPI/MS has the capacity to sue and when it assumed jurisdiction over the case. It also
questioned the ruling on its liability since the Survey Reports indicated that the cause of loss and
damage was due to the rough handling of ATIs stevedores during discharge from vessel to shore
and during loading operation onto the trucks. It invoked the limitation of liability of US$500.00 per
package as provided in Commonwealth Act No. 65 or the Carriage of Goods by Sea Act
(COGSA).On the other hand, ATI questioned the capacity to sue of BPI/MS and Mitsui and the
award of attorneys fees despite its lack of justification in the body of the decision. ATI also imputed
error on the part of the trial court when it ruled that ATIs employees were negligent in the ruling of
the shipments. It also insisted on the applicability of the provision of COGSA on limitation of
liability.In its Decision,40 the Court of Appeals absolved ATI from liability thereby modifying
the decision of the trial court. The dispositive portions reads:WHEREFORE, the appeal of ESLI
is DENIED, while that of ATI is GRANTED. The assailed Judgment dated September 17, 2006 of
Branch 138, RTC of Makati City in Civil Case No. 05-108 is hereby MODIFIED absolving ATI from
liability and deleting the award of attorneys fees. The rest of the decision is affirmed.41

It is clear from the exchange that both [ESLI] and [BPI/MS and Mitsui] are aware of the noninclusion of ATI, the arrastre operator, as a party to this review of the Decision of the Court
of Appeals. By blaming each other for the exclusion of ATI, [ESLI] and [BPI/MS and Mitsui]
impliedly agree that the absolution of ATI from liability is final and beyond review. Clearly, [ESLI] is
the consequential loser. It alone must bear the proven liability for the loss of the shipment. It cannot
shift the blame to ATI, the arrastre operator, which has been cleared by the Court of Appeals. Neither
can it argue that the consignee should bear the loss.

Before this Court, ESLI seeks the reversal of the ruling on its liability.

3. The vessel M.V. EASTERN VENUS V 22-S carrying the said shipment of 22 coils of various
steel sheets arrived at the port of Manila and discharged the said shipment on or about 11 February
2004 to the arrastre operator [ATI]. I personally noticed that the 22 coils were roughly handled
during their discharging from the vessel to the pier of [ATI] and even during the loading operations
of these coils from the pier to the trucks that will transport the coils to the consigneess
warehouse. During the aforesaid operations, the employees and forklift operators of [ESLI] and

At the outset, and notably, ESLI included among its arguments the attribution of liability to ATI but it
failed to implead the latter as a party to the present petition. This non-inclusion was raised by
BPI/MS and Mitsui as an issue42 in its Comment/Opposition43 and
Memorandum:44chanRoblesvirtualLawlibrary

Thus confined, we go to the merits of the arguments of ESLI.

First Issue: Liability of ESLI
ESLI bases of its non-liability on the survey reports prepared by BPI/MS and Mitsuis witness
Manuel which found that the cause of damage was the rough handling on the shipment by the
stevedores of ATI during the discharging operations.48 However, Manuel does not absolve ESLI of
liability. The witness in fact includes ESLI in the findings of negligence. Paragraphs 3 and 11 of the
affidavit of witness Manuel attribute fault to both ESLI and ATI.

[ATI] were very negligent in the handling of the subject cargoes.

xxxx
11. The vessel M.V. EASTERN VENUS V 25-S carrying the said shipment of 50 coils of various
steel sheets arrived at the port of Manila and discharged the said shipment on or about 21 May 2004
to the arrastre operator [ATI]. I personally noticed that the 50 coils were roughly handled during
their discharging from the vessel to the pier of [ATI] and even during the loading operations of these
coils from the pier to the trucks that will transport the coils to the consigneess warehouse. During
the aforesaid operations, the employees and forklift operators of [ESLI] and [ATI] were very
negligent in the handling of the subject cargoes.49 (Emphasis supplied).
ESLI cannot rely only on parts it chooses. The entire body of evidence should determine the liability
of the parties. From the statements of Manuel, [ESLI] was negligent, whether solely or together with
ATI.
To further press its cause, ESLI cites the affidavit of its witness Rodrigo who stated that the cause of
the damage was the rough mishandling by ATIs stevedores.
The affidavit of Rodrigo states that his functions as a cargo surveyor are, (1) getting hold of a copy of
the bill of lading and cargo manifest; (2) inspection and monitoring of the cargo on-board, during
discharging and after unloading from the vessel; and (3) making a necessary report of his findings.
Thus, upon arrival at the South Harbor of Manila of the two vessels of ESLI on 11 February 2004
and on 21 May 2004, Rodrigo immediately boarded the vessels to inspect and monitor the unloading
of the cargoes. In both instances, it was his finding that there was mishandling on the part of ATIs
stevedores which he reported as the cause of the damage.50chanRoblesvirtualLawlibrary

In maritime transportation, a bill of lading is issued by a common carrier as a contract, receipt and
symbol of the goods covered by it. If it has no notation of any defect or damage in the goods, it is
considered as a clean bill of lading. A clean bill of lading constitutes prima facie evidence of the
receipt by the carrier of the goods as therein described.53Based on the bills of lading issued, it is
undisputed that ESLI received the two shipments of coils from shipper Sumitomo Corporation in
good condition at the ports of Yokohama and Kashima, Japan. However, upon arrival at the port of
Manila, some coils from the two shipments were partly dented and crumpled as evidenced by the
Turn Over Survey of Bad Order Cargoes No. 67982 dated 13 February 200454 and Turn Over Survey
of Bad Order Cargoes Nos. 6836355 and 6836556 both dated 24 May 2004 signed by ESLIs
representatives, a certain Tabanao and Rodrigo together with ATIs representative Garcia. According
to Turn Over Survey of Bad Order Cargoes No. 67982, four coils and one skid were partly dented
and crumpled prior to turnover by ESLI to ATIs possession while a total of eleven coils were partly
dented and crumpled prior to turnover based on Turn Over Survey Bad Order Cargoes Nos. 68363
and 68365.
Calamba Steel requested for a re-examination of the damages sustained by the two shipments. Based
on the Requests for Bad Order Survey Nos. 5826757 and 5825458 covering the first shipment dated 13
and 17 February 2004, four coils were damaged prior to turnover. The second Request for Bad Order
Survey No. 5865859 dated 25 May 2004 also affirmed the earlier findings that eleven coils on the
second shipment were damaged prior to turnover.
In Asian Terminals, Inc., v. Philam Insurance Co., Inc.,60 the Court based its ruling on liability on the
Bad Order Cargo and Turn Over of Bad Order. The Receipt bore a notation B.O. not yet t/over to
ATI, while the Survey stated that the said steel case was not opened at the time of survey and was
accepted by the arrastre in good order. Based on these documents, packages in the Asian Terminals,
Inc. case were found damaged while in the custody of the carrier Westwind Shipping Corporation.

Easily seen, however, is the absence of a crucial point in determining liability of either or both ESLI
and ATI lack of determination whether the cargo was in a good order condition as described in the
bills of lading at the time of his boarding. As Rodrigo admits, it was also his duty to inspect and
monitor the cargo on-board upon arrival of the vessel. ESLI cannot invoke its non-liability solely on
the manner the cargo was discharged and unloaded. The actual condition of the cargoes upon arrival
prior to discharge is equally important and cannot be disregarded. Proof is needed that the cargo
arrived at the port of Manila in good order condition and remained as such prior to its handling by
ATI.

Mere proof of delivery of the goods in good order to a common carrier and of their arrival in bad
order at their destination constitutes a prima facie case of fault or negligence against the carrier. If no
adequate explanation is given as to how the deterioration, loss, or destruction of the goods happened,
the transporter shall be held responsible.61 From the foregoing, the fault is attributable to ESLI. While
no longer an issue, it may be nonetheless state that ATI was correctly absolved of liability for the
damage.

Common carriers, from the nature of their business and on public policy considerations, are bound to
observe extraordinary diligence in the vigilance over the goods transported by them. Subject to
certain exceptions enumerated under Article 173451 of the Civil Code, common carriers are
responsible for the loss, destruction, or deterioration of the goods. The extraordinary responsibility of
the common carrier lasts from the time the goods are unconditionally placed in the possession of, and
received by the carrier for transportation until the same are delivered, actually or constructively, by
the carrier to the consignee, or to the person who has a right to receive them. 52

ESLI assigns as error the appellate courts finding and reasoning that the package limitation under the
COGSA62 is inapplicable even if the bills of lading covering the shipments only made reference to
the corresponding invoices. Noticeably, the invoices specified among others the weight, quantity,
description and value of the cargoes, and bore the notation Freight Prepaid and As
Arranged.63 ESLI argues that the value of the cargoes was not incorporated in the bills of
lading64 and that there was no evidence that the shipper had presented to the carrier in writing prior to
the loading of the actual value of the cargo, and, that there was a no payment of corresponding
freight.65 Finally, despite the fact that ESLI admits the existence of the invoices, it denies any

Second Issue: Limitation of Liability

knowledge either of the value declared or of any information contained therein.66According to the
New Civil Code, the law of the country to which the goods are to be transported shall govern the
liability of the common carrier for their loss, destruction or deterioration.67 The Code takes
precedence as the primary law over the rights and obligations of common carriers with the Code of
Commerce and COGSA applying suppletorily.68chanRoblesvirtualLawlibrary
The New Civil Code provides that a stipulation limiting a common carriers liability to the value of
the goods appearing in the bill of lading is binding, unless the shipper or owner declares a greater
value.69In addition, a contract fixing the sum that may be recovered by the owner or shipper for the
loss, destruction, or deterioration of the goods is valid, if it is reasonable and just under the
circumstances, and has been fairly and freely agreed upon.70
COGSA, on the other hand, provides under Section 4, Subsection 5 that an amount recoverable in
case of loss or damage shall not exceed US$500.00 per package or per customary freight unless the
nature and value of such goods have been declared by the shipper before shipment and inserted
in the bill of lading.
In line with these maritime law provisions, paragraph 13 of bills of lading issued by ESLI to the
shipper specifically provides a similar restriction:
The value of the goods, in calculating and adjusting any claims for which the Carrier may be liable
shall, to avoid uncertainties and difficulties in fixing value, be deemed to the invoice value of the
goods plus ocean freight and insurance, if paid, Irrespective of whether any other value is greater or
less, and any partial loss or damage shall be adjusted pro rata on the basis of such value; provided,
however, that neither the Carrier nor the ship shall in any event be or become liable for any loss, nondelivery or misdelivery of or damage or delay to, or in connection with the custody or transportation
of the goods in an amount exceeding $500.00 per package lawful money of the United States, or in
case of goods not shipped in packages, per customary freight unit, unless the nature of the goods and
a valuation higher than $500.00 is declared in writing by the shipper on delivery to the Carrier and
inserted in the bill of lading and extra freight is paid therein as required by applicable tariffs to obtain
the benefit of such higher valuation. In which case even if the actual value of the goods per package
or unit exceeds such declared value, the value shall nevertheless be deemed to be the declared value
and any Carriers liability shall not exceed such declared value and any partial loss or damage shall
be adjusted pro-rata on the basis thereof. The Carrier shall not be liable for any loss or profit or any
consequential or special damage and shall have the option of replacing any lost goods and replacing
o reconditioning any damage goods. No oral declaration or agreement shall be evidence of a value
different from that provided therein.71
xxxx
Accordingly, the issue whether or not ESLI has limited liability as a carrier is determined by either
absence or presence of proof that the nature and value of the goods have been declared by Sumitomo
Corporation and inserted in the bills of lading.

ESLI contends that the invoices specifying the weight, quantity, description and value of the cargo in
reference to the bills of lading do not prove the fact that the shipper complied with the requirements
mandated by the COGSA. It contends that there must be an insertion of this declaration in the bill of
lading itself to fall outside the statutory limitation of liability.
ESLI asserts that the appellate court erred when it ruled that there was compliance with the
declaration requirement even if the value of the shipment and fact of payment were indicated on the
invoice and not on the bill of lading itself.
There is no question about the declaration of the nature, weight and description of the goods on the
first bill of lading.
The bills of lading represent the formal expression of the parties rights, duties and obligations. It is
the best evidence of the intention of the parties which is to be deciphered from the language used in
the contract, not from the unilateral post facto assertions of one of the parties, or of third parties who
are strangers to the contract.72 Thus, when the terms of an agreement have been reduced to writing, it
is deemed to contain all the terms agreed upon and there can be, between the parties and their
successors in interest, no evidence of such terms other than the contents of the written agreement. 73
As to the non-declaration of the value of the goods on the second bill of lading, we see no error on
the part of the appellate court when it ruled that there was a compliance of the requirement provided
by COGSA. The declaration requirement does not require that all the details must be written down on
the very bill of lading itself. It must be emphasized that all the needed details are in the invoice,
which contains the itemized list of goods shipped to a buyer, stating quantities, prices, shipping
charges, and other details which may contain numerous sheets.74 Compliance can be attained by
incorporating the invoice, by way of reference, to the bill of lading provided that the former
containing the description of the nature, value and/or payment of freight charges is as in this case
duly admitted as evidence.
In Unsworth Transport International (Phils.), Inc. v. Court of Appeals,75 the Court held that the
insertion of an invoice number does not in itself sufficiently and convincingly show
that petitioner had knowledge of the value of the cargo. However, the same interpretation does not
squarely apply if the carrier had been advised of the value of the goods as evidenced by the invoice
and payment of corresponding freight charges. It would be unfair for ESLI to invoke the limitation
under COGSA when the shipper in fact paid the freight charges based on the value of the goods.
In Adams Express Company v. Croninger,76 it was said: Neither is it conformable to plain principles
of justice that a shipper may understate the value of his property for the purpose of reducing the rate,
and then recover a larger value in case of loss. Nor does a limitation based upon an agreed value for
the purpose of adjusting the rate conflict with any sound principle of public policy. Conversely, but
for the same reason, it is unjust for ESLI to invoke the limitation when it is informed that the shipper
paid the freight charges corresponding to the value of the goods.
Also, ESLI admitted the existence and due execution of the Bills of Lading and the Invoice
containing the nature and value of the goods on the second shipment. As written in the Pre-Trial

Order,77 the parties, including ESLI, admitted the existence and due execution of the two Bills of
Lading78together with the Invoice on the second shipment with Nos. KJGE-04-1327NT/KE279 dated 12 May 2004. On the first shipment, ESLI admitted the existence of the Invoice
with Nos. KJGE-031228-NT/KE380 dated 2 February 2004.

The admission having been made in a stipulation of facts at pre-trial by the parties, it must be treated
as a judicial admission. Under Section 4, of Rule 129 of the Rules of Court, a judicial admission
requires no proof.87

The effect of admission of the genuineness and due execution of a document means that the party
whose signature it bears admits that he voluntarily signed the document or it was signed by another
for him and with his authority.81

It is inconceivable that a shipping company with maritime experience and resource like the ESLI will
admit the existence of a maritime document like an invoice even if it has no knowledge of its
contents or without having any copy thereof.

A review of the bill of ladings and invoice on the second shipment indicates that the shipper declared
the nature and value of the goods with the corresponding payment of the freight on the bills of lading.
Further, under the caption description of packages and goods, it states that the description of the
goods to be transported as various steel sheet in coil with a gross weight of 383,532 kilograms
(89.510 M3). On the other hand, the amount of the goods is referred in the invoice, the due execution
and genuineness of which has already been admitted by ESLI, is US$186,906.35 as freight on board
with payment of ocean freight of US$32,736.06 and insurance premium of US$1,813.17. From the
foregoing, we rule that the non- limitation of liability applies in the present case.

ESLI also asserts that the notation Freight Prepaid and As Arranged, does not prove that there
was an actual declaration made in writing of the payment of freight as required by COGSA. ESLI did
not as it could not deny payment of freight in the amount indicated in the documents. Indeed, the
earlier discussions on ESLIs admission of the existence and due execution of the invoices, cover and
disprove the argument regarding actual declaration of payment. The bills of lading bore a notation on
the manner of payment which was Freight Prepaid and As Arranged while the invoices indicated
the amount exactly paid by the shipper to ESLI.

We likewise accord the same binding effect on the contents of the invoice on the first shipment.

WHEREFORE, we DENY the Petition for Review on Certiorari. The Decision dated 31 January
2008 and Resolution dated 5 May 2008 of the Second Division of the Court of Appeals in CA-G.R.
CV. No. 88744 are hereby AFFIRMED.

ESLI contends that what was admitted and written on the pre-trial order was only the existence of the
first shipment invoice but not its contents and due execution. It invokes admission of existence but
renounces any knowledge of the contents written on it.82

SO ORDERED.

Judicial admissions are legally binding on the party making the admissions. Pre-trial admission in
civil cases is one of the instances of judicial admissions explicitly provided for under Section 7, Rule
18 of the Rules of Court, which mandates that the contents of the pre-trial order shall control the
subsequent course of the action, thereby, defining and limiting the issues to be tried. In Bayas v.
Sandiganbayan,83this Court emphasized tha

ROLANDO SASAN, SR., LEONILO DAYDAY, MODESTO AGUIRRE, ALEJANDRO

ARDIMER, ELEUTERIO SACIL, WILFREDO JUEGOS, PETRONILO CARCEDO and
CESAR PACIENCIA,
Petitioners,
- versus -

Once the stipulations are reduced into writing and signed by the parties and their counsels, they
become binding on the parties who made them. They become judicial admissions of the fact or facts
stipulated. Even if placed at a disadvantageous position, a party may not be allowed to rescind them
unilaterally, it must assume the consequences of the disadvantage.84
Moreover, in Alfelor v. Halasan,85 this Court declared that:

NATIONAL LABOR RELATIONS COMMISSION 4TH DIVISION, EQUITABLE-PCI

BANK and HELPMATE, INC.,
Respondents.
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

A party who judicially admits a fact cannot later challenge that fact as judicial admissions are a
waiver of proof; production of evidence is dispensed with. A judicial admission also removes an
admitted fact from the field of controversy. Consequently, an admission made in the pleadings cannot
be controverted by the party making such admission and are conclusive as to such party, and all
proofs to the contrary or inconsistent therewith should be ignored, whether objection is interposed by
the party or not. The allegations, statements or admissions contained in a pleading are conclusive as
against the pleader. A party cannot subsequently take a position contrary of or inconsistent with what
was pleaded.86 (Citations omitted)

DECISION
CHICO-NAZARIO, J.:
Assailed in this Petition for Review under Rule 45 of the Rules of Court are the
Decision[1] dated 24 April 2006 of the Court of Appeals in CA-G.R. SP No. 79912, which affirmed
the Decision dated 22 January 2003 of the National Labor Relations Commission (NLRC) in NLRC

Case No. V-000241-2002 finding that Helpmate, Inc. (HI) is a legitimate independent job contractor
and that the petitioners were not illegally dismissed from work; and the Resolution [2] dated 31
October 2006 of the same court denying the Motion for Reconsideration filed by the petitioners.

to two other job contractors, Able Services and Puritan. HI designated petitioners to new work
assignments, but the latter refused to comply with the same. Petitioners were not dismissed by HI,
whether actually or constructively, thus, petitioners complaints before the NLRC were without basis.

Respondent Equitable-PCI Bank (E-PCIBank),[3] a banking entity duly organized and

existing under and by virtue of Philippine laws, entered into a Contract for Services [4] with HI, a
domestic corporation primarily engaged in the business of providing janitorial and messengerial
services. Pursuant to their contract, HI shall hire and assign workers to E-PCIBank to perform
janitorial/messengerial and maintenance services. The contract was impliedly renewed year after
year. Petitioners Rolando Sasan, Sr.,[5] Leonilo Dayday,[6] Modesto Aguirre,[7] Alejandro Ardimer,
[8]
Eleuterio Sacil,[9] Wilfredo Juegos,[10] Petronilo Carcedo,[11] and Cesar Peciencia[12] were among
those employed and assigned to E-PCIBank at its branch along Gorordo Avenue, Lahug, Cebu City,
as well as to its other branches in the Visayas.[13]

Labor Arbiter Gutierrez focused on the following issues: (a) whether petitioners were regular
employees of HI; (b) whether petitioners were illegally dismissed from their employment; and (c)
whether petitioners were entitled to their money claims.

O 23 July 2001, petitioners filed with the Arbitration Branch of the NLRC in Cebu City
separate complaints[14] against E-PCIBank and HI for illegal dismissal, with claims for separation
pay, service incentive leave pay, allowances, damages, attorneys fees and costs. Their complaints
were docketed as NLRC RAB-VII Case No. 07-1381-2001 and raffled to Labor Arbiter Jose G.
Gutierrez (Labor Arbiter Gutierrez) for their proper disposition. Subsequently, on 22 August 2001,
the petitioners[15] amended their complaints to include a claim for 13th month-pay.
Several conciliation hearings were scheduled by Labor Arbiter Gutierrez but the parties still
failed to arrive at a mutually beneficial settlement; hence, Labor Arbiter Gutierrez ordered that they
submit their respective position papers.
In their position papers, petitioners claimed that they had become regular employees of EPCIBank with respect to the activities for which they were employed, having continuously
rendered janitorial and messengerial services to the bank for more than one year; that E-PCIBank had
direct control and supervision over the means and methods by which they were to perform their jobs;
and that their dismissal by HI was null and void because the latter had no power to do so since they
had become regular employees of E-PCIBank.
For its part, E-PCIBank averred that it entered into a Contract for Services with HI, an
independent job contractor which hired and assigned petitioners to the bank to perform janitorial and
messengerial services thereat. It was HI that paid petitioners wages, monitored petitioners daily time
records (DTR) and uniforms, and exercised direct control and supervision over the petitioners and
that therefore HI has every right to terminate their services legally. E-PCIBank could not be held
liable for whatever misdeed HI had committed against its employees.
HI, on the other hand, asserted that it was an independent job contractor engaged in the
business of providing janitorial and related services to business establishments, and E-PCIBank was
one of its clients. Petitioners were its employees, part of its pool of janitors/messengers assigned to
E-PCIBank. The Contract for Services between HI and E-PCIBank expired on 15 July 2000. EPCIBank no longer renewed said contract with HI and, instead, bidded out its janitorial requirements

On 7 January 2002, on the basis of the parties position papers and documentary evidence,
Labor Arbiter Gutierrez rendered a Decision finding that HI was not a legitimate job contractor on
the ground that it did not possess the required substantial capital or investment to actually perform
the job, work, or service under its own account and responsibility as required under the Labor Code.
[16]
HI is therefore a labor-only contractor and the real employer of petitioners is E-PCIBank which is
held liable to petitioners.According to Labor Arbiter Gutierrez:
[T]he undisputed facts show that the [herein petitioners] were made to perform not
only as janitors but also as messengers, drivers and one of them even worked as an
electrician. For us, these jobs are not only directly related to the main business of
the principal but are, likewise deemed necessary in the conduct of respondent
Equitable-PCI Banks principal business. Thus, based on the above, we so declare
that the [petitioners] are employees of respondent Equitable-PCI Bank. And having
worked with respondent Equitable-PCI Bank for more than one (1) year, they are
deemed regular employees. They cannot, therefore, be removed from employment
without cause and without due process, which is wanting in this case. Hence, the
severance of their employment in the guise of termination of contract is illegal. [17]
In the dispositive portion of his 7 January 2002 Decision, Labor Arbiter Gutierrez awarded
to petitioners the following amounts:
I. CESAR PACIENCIA
a) Backwages
July 15, 2001 to January 8, 2002
= P190.00 per day
= 5 months and 6 days
= 136 days x P190.00

= P25,840.00

b) Separation Pay
June 10, 1996 to July 15, 2001
= 5 years
=P190.00 x 26 days x 5 years / 2

=P12,350.00

c) 13th Month Pay

= P190.00 x 26 days
Total

= P4,940.00
P43,130.00

II Dominador Suico, Jr. (did not

file Amended Complaint)
a) Backwages
July 15, 2001 to January 15, 2002
same as Paciencia

b) Separation Pay
October 1989 to July 15, 2001
= P190.00 x 26 days x 12 yrs. / 2

= P29,640.00

c) 13th Month Pay

= P190.00 x 26 days
Total

= P4,940.00
= P60,420.00

= P25,840.00
VI Leonilo Dayday

b) Separation Pay
Feb. 2, 1999 to July 15, 2001
= P190.00 x 26 days x 2.5 years /
2
Total

= P6,175.00
= P32,015.00

III Roland Mosquera (did not file

Amended Complaint)
a) Backwages
(same as Paciencia)
b) Separation Pay
March 8, 1998 to July 15, 2001
= P190.00 x 26 days x 3 yrs. / 2
Total

= P25,840.00

b) Separation Pay
Sept. 16, 1984 to July 15, 2001
= P190.00 x 26 days x 17 yrs. / 2
c) 13th Month Pay
= P190.00 x 26 days
Total

= P7,410.00
= P33,250.00

b) Separation Pay
Feb. 8, 1983 to July 15, 2001
= P190.00 x 26 days x 18 yrs. / 2

= P44,460.00

c) 13th Month Pay

= P190.00 x 26 days
Total

= P4,940.00
= P75,240.00

a) Backwages
(same as Paciencia)

= P25,840.00

b) Separation Pay
June 2, 1992 to July 15, 2001
= P190.00 x 26 days x 9 yrs. / 2

= P22,230.00

c) 13th Month Pay

= P190.00 x 26 days
Total

= P4,940.00
= P53,010.00

= P25,840.00

= P41,990.00
VIII Mario Juntilla
= P4,940.00
= P72,770.00

V Rolando Sasan, Sr.

a) Backwages
(same as Paciencia)

= P25,840.00

VII Eleuterio Sacil

IV Petronillo Carcedo
a) Backwages
(same as Paciencia)

a) Backwages
(same as Paciencia)

= P25,840.00

a) Backwages
(same as Pacencia)

= P25,840.00

b) Separation Pay
October 7, 1987 to July 15, 2001
= P190.00 x 26 days x 14 yrs. / 2

= P34,580.00

c) 13th Month Pay

= P190.00 x 26 days
Total

= P4,940.00
= P65,360.00

WHEREFORE, the foregoing premises considered, judgment is hereby

rendered directing the respondents Equitable PCI Bank and Helpmate, Inc. to pay
jointly and solidarily the complainants as follows:

IX Wilfredo Juegos
a) Backwages
(same as Pacencia)

= P25,840.00

b) Separation Pay
July 23, 1990 to July 15, 2001
= P190.00 x 26 days x 11 yrs. / 2

= P27,170.00

c) 13th Month Pay

= P190.00 x 26 days
Total

= P4,840.00
= P57,950.00

1. Cesar Paciencia - P43,130.00

2. Dominador Suico, Jr. - 32,015.00
3. Roland Mosquera - 33,250.00
4. Petronilo Carceda - 72,770.00
5. Roland Sasan, Sr. - 60,420.00
6. Leonilo Dayday - 75,240.00
7. Eleuterio Sacil - 53,010.00
8. Mario Juntilla - 65,360.00
9. Wilfredo Juegos - 57,950.00
10. Modesto Aguirre - 54,245.00
11. Alejandro Ardimer - 59,185.00
TOTAL - P606,575.00[18]

X Modesto Aguirre
a) Backwages
(same as Paciencia)

= P25,840.00

b) Separation Pay
= Jan. 5, 1992 to July 15, 2001
= P190.00 x 26 days x 9.5 yrs. / 2

= P23,465.00

c) 13th Month Pay

= P190.00 x 26 days
Total

= P4,940.00
= P54,245.00

Aggrieved by the decision of Labor Arbiter Gutierrez, respondents E-PCIBank and HI

appealed the same to the NLRC, 4th Division, stationed in Cebu City. Their appeals were docketed as
NLRC Case No. V-000241-2002. In support of its allegation that it was a legitimate job contractor,
HI submitted before the NLRC several documents which it did not present before Labor Arbiter
Gutierrez. These are:
1. Certificate of Filing of Certificate of Increase of Capital Stock, Certificate of
Filing Amended Articles of Incorporation, and General Information Sheet Stock
Corporation of HI showing therein that it increased its authorized capital stock
from P1,500,000.00 to P20,000,000.00 on 12 March 1999 with the Securities
and Exchange Commission;

XI Alejandro Ardimer
a) Backwages
(same as Paciencia)

2. Audited Financial Statement of HI showing therein that it has Total Assets

of P20,939,935.72 as of 31 December 2000;
= P25,840.00

b) Separation Pay
= Jan. 20, 1990 to July 15, 2001
= P190.00 x 26 days x 11.5 yrs. / 2

= P28,405.00

3. Transfer Certificate of Title No. 110173 and Tax Declaration No. GR2K-09-06300582 registered under the name of HI showing that it has a parcel of land with
Market Value of P1,168,860.00 located along Rizal Avenue (now Bacalso
Avenue), Cebu City, and

c) 13th Month Pay

= P190.00 x 26 days
Total

= P4,940.00
= P59,185.00

4. Tax Declaration No. GR2K-09-063-00583 registered under the name of HI

showing that it has a commercial building constructed on the preceding lot
located along Bacalso Avenue, CebuCity with market value of P2,515,170.00.
[19]

xxxx

The NLRC promulgated its Decision on 22 January 2003 modifying the ruling of Labor
Arbiter Gutierrez. The NLRC took into consideration the documentary evidence presented by HI for
the first time on appeal and, on the basis thereof, declared HI as a highly capitalized venture with
sufficient capitalization, which cannot be considered engaged in labor-only contracting.

Distressed by the decision of the NLRC, petitioners sought recourse with the Court of Appeals by
filing a Petition for Certiorari[25] under Rule 65 of the 1997 Rules of Civil Procedure docketed as
CA-G.R. SP No. 79912.
In its Decision dated 24 April 2006, the Court of Appeals affirmed the findings of the NLRC that HI
was a legitimate job contractor and that it did not illegally dismiss petitioners:

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

The charge of illegal dismissal was prematurely filed. The record shows
that barely eight (8) days from 15 July 2001 when the complainants were placed on
a temporary off-detail, they filed their complaints on 23 July 2001 and amended
their complaints on 22 August 2001 against the respondents on the presumption that
their services were already terminated. Temporary off-detail is not equivalent to
dismissal. x x x.[20]
The NLRC deleted Labor Arbiter Gutierrezs award of backwages and separation pay, but
affirmed his award for 13th month pay and attorneys fees equivalent to ten percent (10%) of the
13th month pay, to the petitioners.[21] Thus, the NLRC decreed in its 22 January 2003 Decision, the
payment of the following reduced amounts to petitioners:

As to the question of whether or not, as a legitimate independent job

contractor, respondent HI illegally dismissed the petitioners. We rule in the
negative.
It is undisputed that the contract between respondent HI and its client E-PCIBank
expired on July 15, 2000. The record shows that after said expiration, respondent HI
offered the petitioners new work assignments to various establishments which are
HIs clients. The petitioners, therefore, were not even placed on floating status. They
simply refused, without justifiable reason, to assume their new work assignments
which refusal was tantamount to abandonment. There being no illegal dismissal,
petitioners are not entitled to backwages or separation pay.[26]
The fallo of the 24 April 2006 Decision of the appellate court reads:

WHEREFORE, premises considered, the decision of Labor Arbiter Jose G.

Gutierrez dated 7 January 2002 is MODIFIED, to wit:
Ordering respondents Helpmate, Inc. and Equitable PCI Bank to jointly and
severally[22] pay the complainants of their 13th month pay and attorneys fees in the
aggregate amount of Forty-Three Thousand Four Hundred Seventy-Two and 00/100
(P43,472.00), broken down as follows:

WHEREFORE, in view of the foregoing premises, judgment is hereby rendered by

us DENYING the petition filed in this case and AFFIRMING the decision of the
NLRC, Fourth Division, in NLRC Case No. V-000145-2003 promulgated on June
22, 2003.[27]
Petitioners now come before us via the instant Petition raising the following issues:

1. Aguirre, Modesto - P5,434.00

2. Ardimer, Alejandro - 5,434.00
3. Carcedo, Petronilo - 5,434.00
4. Dayday, Leonilo - 5,434.00
5. Juegos, Wilfredo - 5,434.00
6. Juntilla, Mario - 5,434.00
7. Paciencia, Cesar - 5,434.00
8. Sacil, Eleuterio - 5,434.00
TOTAL P43,472.00[23]
Petitioners Motion for Reconsideration was denied by the NLRC in its Resolution dated 1 July 2003.
[24]

WHETHER OR NOT THE HONORABLE COURT OF APPEALS ACTED IN

EXCESS OF THEIR JURISDICTION AND/OR COMMITTED GRAVE ABUSE
OF DISCRETION IN UPHOLDING THE NLRC 4TH DIVISIONS DECISION
AND GRAVELY ERRED IN:
I. ACCEPTING AND APPRECIATING THE PIECES OF EVIDENCE
SUBMITTED BY RESPONDENTS DURING APPEAL, ALL EXISTING
DURING THE TIME THE NLRC RAB 7S TRIAL, CONTRARY TO THIS
HONORABLE COURTS PREVIOUS ESTABLISHED DECISIONS.
II. REVERSING, WITHOUT ANY LEGAL BASIS, THE FACTUAL FINDING
OF NLRC RAB 7 THAT THE RESPONDENT HI WAS LABOR ONLY
CONTRACTOR.

III. RULING, WITHOUT ANY LEGAL BASIS, THAT THE ILLEGAL

DISMISSAL COMPLAINTS WERE PREMATURELY FILED.[28]
Before proceeding to the substantive issues, we first address the procedural issues raised by
petitioners.
Petitioners object to the acceptance and consideration by the NLRC of the evidence
presented by HI for the first time on appeal. This is not a novel procedural issue, however, and our
jurisprudence is already replete with cases[29] allowing the NLRC to admit evidence, not presented
before the Labor Arbiter, and submitted to the NLRC for the first time on appeal. Technical rules of
evidence are not binding in labor cases. Labor officials should use every reasonable means to
ascertain the facts in each case speedily and objectively, without regard to technicalities of law or
procedure, all in the interest of due process.[30]
The submission of additional evidence before the NLRC is not prohibited by its New Rules
of Procedure. After all, rules of evidence prevailing in courts of law or equity are not controlling in
labor cases. The NLRC and labor arbiters are directed to use every and all reasonable means to
ascertain the facts in each case speedily and objectively, without regard to technicalities of law and
procedure all in the interest of substantial justice. In keeping with this directive, it has been held that
the NLRC may consider evidence, such as documents and affidavits, submitted by the parties for the
first time on appeal. The submission of additional evidence on appeal does not prejudice the other
party for the latter could submit counter-evidence.[31]
In Clarion Printing House, Inc. v. National Labor Relations Commission,[32] we again
emphasized that:
[T]he NLRC is not precluded from receiving evidence, even for the first time on
appeal, because technical rules of procedure are not binding in labor cases.
The settled rule is that the NLRC is not precluded from receiving evidence on
appeal as technical rules of evidence are not binding in labor cases. In fact, labor
officials are mandated by the Labor Code to use every and all reasonable means to
ascertain the facts in each case speedily and objectively, without regard to
technicalities of law or procedure, all in the interest of due process. Thus, in Lawin
Security Services v. NLRC, and Bristol Laboratories Employees Association-DFA v.
NLRC, we held that even if the evidence was not submitted to the labor arbiter, the
fact that it was duly introduced on appeal to the NLRC is enough basis for the latter
to be more judicious in admitting the same, instead of falling back on the mere
technicality that said evidence can no longer be considered on appeal. Certainly, the
first course of action would be more consistent with equity and the basic notions of
fairness.

For the same reasons, we cannot find merit in petitioners protestations against the
documentary evidence submitted by HI because they were mere photocopies. Evidently, petitioners
are invoking the best evidence rule, espoused in Section 3, Rule130 of the Rules of Court. It provides
that:
Section 3. Original document must be produced; exceptions. When the subject of
inquiry is the contents of a document, no evidence shall be admissible other than the
original document itself x x x.
The above provision explicitly mandates that when the subject of inquiry is the contents of a
document, no evidence shall be admissible other than the original document itself. Notably, certified
true copies of these documents, acceptable under the Rules of Court[33] were furnished to the
petitioners. Even assuming that petitioners were given mere photocopies, again, we stress that
proceedings before the NLRC are not covered by the technical rules of evidence and procedure as
observed in the regular courts.Technical rules of evidence do not apply if the decision to grant the
petition proceeds from an examination of its sufficiency as well as a careful look into the arguments
contained in position papers and other documents.[34]
Petitioners had more than adequate opportunity when they filed their motion for
reconsideration before the NLRC, their Petition to the Court of Appeals and even to this Court, to
refute or present their counter-evidence to the documentary evidence presented by HI. Having failed
in this respect, petitioners cannot now be heard to complain about these documentary evidences
presented by HI upon which the NLRC and the Court of Appeals based its finding that HI is a
legitimate job contractor.
The essence of due process is simply an opportunity to be heard, or as applied to
administrative proceedings, a fair and reasonable opportunity to explain one's side. It is also an
opportunity to seek a reconsideration of the action or ruling complained of. It is not the denial of the
right to be heard but denial of the opportunity to be heard that constitutes violation of due process of
law. Petitioners herein were afforded every opportunity to be heard and to seek reconsideration of the
adverse judgment against them.They had every opportunity to strengthen their positions by
presenting their own substantial evidence to controvert those submitted by E-PCIBank and HI before
the NLRC, and even before the Court of Appeals. It cannot win its case by merely raising
unsubstantiated doubt or relying on the weakness of the adverse parties evidence.
We now proceed to the resolution of the substantive issues submitted by petitioners for our
consideration, particularly, whether HI is a labor-only contactor and E-PCIBank should be deemed
petitioners principal employer; and whether petitioners were illegally dismissed from their
employment.
Permissible job contracting or subcontracting refers to an arrangement whereby a principal
agrees to put out or farm out to a contractor or subcontractor the performance or completion of a
specific job, work or service within a definite or predetermined period, regardless of whether such
job, work or service is to be performed or completed within or outside the premises of the principal.

[35]

A person is considered engaged in legitimate job contracting or subcontracting if the following

conditions concur:
(a) The contractor or subcontractor carries on a distinct and independent business
and undertakes to perform the job, work or service on its own account and under its
own responsibility according to its own manner and method, and free from the
control and direction of the principal in all matters connected with the performance
of the work except as to the results thereof;

We take note that HI has been issued by the Department of Labor and Employment (DOLE)
Certificate of Registration[44] Numbered VII-859-1297-048. The said certificate states among other
things:
CERTIFICATE OF REGISTRATION
Numbered VII-859-1297-048
is issued to

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

(c) The agreement between the principal and contractor or subcontractor assures the
contractual employees entitlement to all labor and occupational safety and health
standards, free exercise of the right to self-organization, security of tenure, and
social and welfare benefits.[36]
In contrast, labor-only contracting, a prohibited act, is an arrangement where the contractor
or subcontractor merely recruits, supplies or places workers to perform a job, work or service for a
principal.[37] In labor-only contracting, the following elements are present:
(a) The contractor or subcontractor does not have substantial capital or
investment to actually perform the job, work or service under its own account and
responsibility; and
(b) The employees recruited, supplied or placed by such contractor or
subcontractor are performing activities which are directly related to the main
business of the principal.[38]
In distinguishing between permissible job contracting and prohibited labor-only contracting,
we elucidated in Vinoya v. National Labor Relations Commission,[40]that it is not enough to show
substantial capitalization or investment in the form of tools, equipment, etc. Other facts that may be
considered include the following: whether or not the contractor is carrying on an independent
business; the nature and extent of the work; the skill required; the term and duration of the
relationship; the right to assign the performance of specified pieces of work; the control and
supervision of the work to another; the employers power with respect to the hiring, firing and
payment of the contractors workers; the control of the premises; the duty to supply premises, tools,
appliances, materials and labor; and the mode and manner or terms of payment. [41] Simply put, the
totality of the facts and the surrounding circumstances of the case are to be considered. [42] Each case
must be determined by its own facts and all the features of the relationship are to be considered. [43]
[39]

In the case at bar, we find substantial evidence to support the finding of the NLRC, affirmed by the
Court of Appeals, that HI is a legitimate job contractor.

HELPMATE, INCORPORATED
330 N. Bacalso Avenue, Cebu City
for having complied with the requirements as provided for under the Labor Code, as
amended, and its Implementing Rules and having paid the registration fee in the
amount of ONE HUNDRED PESOS (P100.00) per Official Receipt Number
9042769, dated October 16, 1997.
In witness whereof, and by authority vested in me by the Labor Code, as amended,
and its Implementing Rules specifically Department Order No. 10 series of 1997, I
have hereunto set my hand and affixed the Official on this 23rd day of December
1997.[45]
Having been issued by a public officer, this certification carries with it the presumption that
it was issued in the regular performance of official duty.[46] In the absence of proof, petitioners bare
assertion cannot prevail over this presumption. Moreover, the DOLE being the agency primarily
responsible for regulating the business of independent job contractors, we can presume in the absence
of evidence to the contrary that it thoroughly evaluated the requirements submitted by HI as a
precondition to the issuance of the Cerificate of Registration.
The evidence on record also shows that HI is carrying on a distinct and independent business
from E-PCIBank. The employees of HI are assigned to clients to perform janitorial and messengerial
services, clearly distinguishable from the banking services in which E-PCIBank is engaged.
Despite the afore-mentioned compliance by HI with the requisites for permissible job
contracting, Labor Arbiter Gutierrez still declared that HI was engaged in prohibited labor-only
contracting because it did not possess substantial capital or investment to actually perform the job,
work or service under its own account or responsibility. Both the NLRC and the Court of Appeals
ruled to the contrary, and we agree.
Substantial capital or investment refers to capital stocks and subscribed capitalization in the
case of corporations, tools, equipments, implements, machineries and work premises, actually and
directly used by the contractor or subcontractor in the performance or completion of the job, work or
service contracted out.[47] An independent contractor must have either substantial capital or
investment in the form of tools, equipment, machineries, work premises, among others. The law does

not require both substantial capital and investment in the form of tools, equipment, machineries, etc.
[48]
It is enough that it has substantial capital. In the case of HI, it has proven both.
We have expostulated that once it is established that an entity such as in this case, HI has
substantial capital, it was no longer necessary to adduce further evidence to prove that it does not fall
within the purview of labor-only contracting.[49] There is even no need for HI to refute the contention
of petitioners that some of the activities they performed such as those of messengerial services are
directly related to the principal business of E- PCIBank.
In any event, we have earlier declared that while these services rendered by the petitioners as
janitors, messengers and drivers are considered directly related to the principal business of a bank, in
this case E-PCIBank, nevertheless, they are not necessary in the conduct of its (E-PCIBANKs)
principal business.[50]
HI has substantial capital in the amount of P20,939,935.72. It has its own building where it
holds office and it has been engaged in business for more than a decade now.[51] As observed by the
Court of Appeals, surely, such a well-established business entity cannot be considered a labor-only
contractor.
Etched in an unending stream of cases are four standards in determining the existence of an
employer-employee relationship, namely: (a) the manner of selection and engagement of the putative
employee; (b) the mode of payment of wages; (c) the presence or absence of power of dismissal; and,
(d) the presence or absence of control of the putative employees conduct. Most determinative among
these factors is the so-called control test.[52]
The presence of the first requisite for the existence of an employer-employee relationship to
wit, the selection and engagement of the employee is shown by the fact that it was HI which selected
and engaged the services of petitioners as its employees. This is fortified by the provision in the
contract of services between HI and E-PCIBank which states:
Selection, Engagement, Discharge. [HI] shall have exclusive discretion in
the selection, engagement, investigation, discipline and discharge of its employees.
[53]

On the second requisite regarding the payment of wages, it was HI who paid petitioners their
wages and who provided their daily time records and uniforms and other materials necessary for the
work they performed. Therefore, it is HI who is responsible for petitioners claims for wages and
other employees benefits. Precisely, the contract of services between HI and E-PCIBank reveals the
following:
Indemnity for Salaries and Benefits, etc. [HI] shall be responsible for the
salaries, allowances, overtime and holiday pay, and other benefits of its personnel
including withholding taxes.[54]

As to the third requisite on the power to control the employees conduct, and the fourth
requisite regarding the power of dismissal, again E-PCIBank did not have the power to control
petitioners with respect to the means and methods by which their work was to be accomplished. It
likewise had no power of dismissal over the petitioners. All that E-PCIBank could do was to report to
HI any untoward act, negligence, misconduct or malfeasance of any employee assigned to the
premises. The contract of services between E-PCIBank and HI is noteworthy. It states:
[HI] shall have the entire charge, control and supervision over all its
employees who may be fielded to [E-PCIBank]. For this purpose, [HI] shall assign a
regular supervisor of its employees who may be fielded to the Bank and which
regular supervisor shall exclusively supervise and control the activities and
functions defined in Section 1 hereof. x x x.[55]
All these circumstances establish that HI undertook said contract on its account, under its
own responsibility, according to its own manner and method, and free from the control and direction
of E-PCIBank. Where the control of the principal is limited only to the result of the work,
independent job contracting exists. The janitorial service agreement between E-PCIBank and HI is
definitely a case of permissible job contracting.
Considering the foregoing, plus taking judicial notice of the general practice in private, as
well as in government institutions and industries, of hiring an independent contractor to perform
special services,[56] ranging from janitorial, security and even technical services, we can only
conclude that HI is a legitimate job contractor. As such legitimate job contractor, the law creates an
employer-employee relationship between HI and petitioners[57] which renders HI liable for the latters
claims.
In view of the preceding conclusions, petitioners will never become regular employees of EPCIBank regardless of how long they were working for the latter.[58]
We further rule that petitioners were not illegally dismissed by HI. Upon the termination of
the Contract of Service between HI and E-PCIBank, petitioners cannot insist to continue to work for
the latter. Their pull-out from E-PCIBank did not constitute illegal dismissal since, first, petitioners
were not employees of E-PCIBank; and second, they were pulled out from said assignment due to the
non-renewal of the Contract of Service between HI and E-PCIBank. At the time they filed their
complaints with the Labor Arbiter, petitioners were not even dismissed by HI; they were only offdetail pending their re-assignment by HI to another client. And when they were actually given new
assignments by HI with other clients,[59] petitioners even refused the same. As the NLRC pronounced,
petitioners complaint for illegal dismissal is apparently premature.

WHEREFORE, premises considered, the Petition is DENIED for lack of merit. The Decision
dated 24 April 2006 and Resolution dated 31 October 2006 of the Court of Appeals are
AFFIRMED. Costs against petitioners.
SO ORDERED.

3. That said promissory notes . . . .have long matured but despite repeated requests
and demands for payment thereof with interests and related charges due, Far East
has failed and refused to pay. The account due on said promissory notes with
interests and related charges as of 10 September 1986 is P4,471,854.32 itemized in
a statement of account, copy of which is attached hereto and made a part hereof as
Annex D

FAR EAST MARBLE (PHILS.), INC., LUIS R. TABUENA, JR. and RAMON A.
TABUENA, petitioners,
vs.
HONORABLE COURT OF APPEALS and BANK OF PHILIPPINE ISLANDS, respondents.

4. That because of Far East's failure and refusal in bad faith to pay its long past due
obligations under the promissory notes above alleged, plaintiff was constrained to
file this suit . . .

Minerva C. genevea for petitioners.

SECOND CAUSE OF ACTION AGAINST FAR EAST

Sabino B. Padilla IV for Bank of the Philippines Islands.

6. That on various dates and for valuable consideration, the defendant Far East
received from and was extended by . . . plaintiff
Bank . . . credit facilities in the form of Trust Receipts, photo copies of which are
hereto attached and made integral parts hereof as Annexes E, F, G, H, I and J.

MELO, J.:
This has reference to a petition for review by certiorari seeking the reversal of the decision of the
Court of Appeals dated June 26, 1990, in CA-G.R. CV No. 14404 (Bellosillo (P), Marigomen,
Sempio-Diy, JJ.) which set aside the order of the Regional Trial Court of the National Capital
Judicial Region (Manila, Branch XIV), dated June 1, 1987 and remanded the case to the court a
quo for further proceedings on the grounds that the complaint for foreclosure of chattel mortgage
with replevin had not prescribed and that, there being a cause of action, further proceedings,
including the resolution of the motion for summary judgment may be pursued.
The antecedent facts of the case may be chronicled as follows:
On February 5, 1987, herein respondent Bank of the Philippines Islands (BPI) filed a complaint for
foreclosure of chattel mortgage with replevin against petitioner Far East Marble (Phils.), Inc. (Far
East), Ramon A. Tabuena and Luis R. Tabuena, Jr. which was docketed as Civil Case No. 87-39345
of Branch XIV of the Regional Trial Court of the National Capital Judicial Region stationed in
Manila.
The complaint pertinently alleged:

7. That said Trust Receipts . . . have long matured and despite repeated requests and
demands for payment thereof with interests and related charges due Far East has
failed and refused to pay. The amount due on said Trust Receipts with interests and
related charges as of 10 September 1986 is P2,170,476.62 as itemized in a statement
of account, copy of which is attached hereto and made an integral part hereof as
Annex K.
8. That because of far East's failure and refusal to pay its long past due obligations
under the Trust Receipts above alleged, plaintiff was constrained to file this suit . . .
xxx xxx xxx
10. That in September 1976 Far East executed in favor of . . . plaintiff Bank . . . a
Chattel Mortgage, photocopy of which is attached hereto and made an integral part
hereof as Annex L, to secure the payment of its loan obligations including interests
and related charges. . .

FIRST CAUSE OF ACTION AGAINST FAR EAST

xxx xxx xxx
2. That on various dates and for valuable consideration, the defendant Far East
received from Commercial Bank and Trust Company . . . now merged with and into
the plaintiff bank . . . several loans evidenced by promissory notes executed by said
Far East, photo copies of which are attached hereto and made integral parts hereof
as Annexes A, B and C.

CAUSE OF ACTION AGAINST INDIVIDUAL DEFENDANTS RAMON A.

TABUENA AND LUIS R. TABUENA, JR.
13. That in September 1976, defendants Ramon A. Tabuena and Luis R. Tabuena, Jr.
executed in favor of . . . plaintiff Bank . . . a "continuing guaranty" photocopy of
which is attached hereto and made a part hereof as Annex M, whereby they bind

themselves, jointly and severally, to answer for the loan obligations to the Bank of
defendant Far East.
14. That despite requests and demands for their payment of Far East's long past due
accounts, said defendants Ramon A. Tabuena and Luis R. Tabuena, Jr. have failed
and refused to pay said Far East accounts and have already defaulted in
their solidary obligation under said "continuing Guaranty."
15. That because of the failure and refusal of defendants Ramon A. Tabuena and
Luis R. Tabuena, Jr. in bad faith to pay Far East's past due accounts under their
solidary obligation stipulated in said "Continuing Guaranty,". . . plaintiff has been
constrained to file suit against them . . .
(pp. 32-36, Rollo.)
On March 10, 1987, Far East filed an answer with compulsory counterclaim admitting the
genuineness and due execution of the promissory notes attached as Annexes A, B, and C to the
complaint, but alleging further that said notes became due and demandable on November 19, 1976,
respectively. On the basis of the maturity dates of the notes, Far East thereupon raised the affirmative
defenses of prescription and lack of cause of action as it denied the allegation of the complaint that
BPI had made previous repeated requests and demands for payment. Far East claimed that during the
more than 10 years which elapsed from the dates of maturity of said obligations up to the time the
action for foreclosure of the chattel mortgage securing said obligations was filed, it had not received
from BPI or its predecessor any demand for payment and thus, it had "labored under the belief that
they [the obligations] have already been written off" in the books of BPI. Moreover, Far East denied
the genuineness and due execution of the trust receipts and of the Statement of Account (pp. 7879, Rollo). A motion to hear affirmative defenses was attached to the answer.
On March 16, 1987, BPI filed an opposition to the motion to hear affirmative defenses, alleging that
its cause of action against Far East have not prescribed, since within 10 years from the time its cause
of action accrued, various written extrajudicial demands (attached thereto as Annexes "A" and
"A-1") were sent by BPI and received by Far East. Moreover, BPI offered several written documents
whereby Far East supposedly acknowledged its debt to BPI (Annexes "B" to "B-6). Withal, BPI
maintained, the ten-years prescriptive period to enforce its written contract had not only been
interrupted, but was renewed.
On the same date, BPI filed a motion for summary judgment on the ground that since Far East had
admitted the genuineness and due execution of the promissory notes and the deed of chattel mortgage
annexed to its complaint, there was no genuine issue as to any material fact, thus entitling BPI to a
favorable judgment as a matter of law in regard to its causes of action and on its right to foreclose the
chattel mortgage.
On June 1, 1987, the trial court issued an order to the following effect:

WHEREFORE, the Court issues this Order:

1 Dismissing the complaint against the defendant Far East Marble (Phils.) Inc.
for lack of cause of action and on grounds of pre[s]cription:
2 Denying for lack of merit the Motion for Summary Judgment and the
Supplemental Motion for Summary Judgment;
3 Striking off from the records the order of March 6, 1987 and recalling the writ
of replevin issued by this Court, and dismissing all the contempt charges;
4 Ordering the Sheriff to desist permanently from enforcing the writ of seizure
and to return all the property seized by him under the Writ of Replevin, to the
defendant Far East Marble (Phils.) Inc. immediately from receipt of a copy of this
order, and in case of his failure to do so, the value thereof shall be charged against
the replevin bond. (pp. 89-90, Rollo.)
An appeal therefrom was forthwith interposed by BPI, assailing the findings of the trial court with
respect to its finding that BPI's cause of action has prescribed and the consequent denial of the
motion for summary judgment.
On June 26, 1990, the Court of Appeals rendered a decision setting aside the June 1, 1987 order of
the court of origin and remanding the case to said court for further proceedings, "including the
resolution anew of plaintiff's motion for summary judgment . . ., reception of the evidence of the
parties and, thereafter, to decide the case as the facts may warrant." (pp. 98-99, Rollo.)
Hence, the instant petition for review on certiorari filed by Far East, anchored on the following
assigned errors:
I. THE COURT OF APPEALS ERRED WHEN IT DISREGARDED THE
FINDINGS OF THE TRIAL COURT THAT PRESCRIPTION HAS SET IN
OBLIVIOUS OF THE FACT THAT THIS FINDING WAS REACHED AFTER
DUE HEARING.
II. THE COURT OF APPEALS GRAVELY ERRED IN RULING FOR A
REOPENING OF THE TRIAL FOR THE RECEPTION OF EVIDENCE ON
BOTH ISSUES OF PRESCRIPTION AND SUMMARY JUDGMENT WHEN
THESE WERE ALREADY TRIED AND WEIGHED BY THE TRIAL COURT.
III. THE COURT OF APPEALS ERRED IN ASSUMING JURISDICTION OVER
THE CASE CONSIDERING THAT THE ISSUES RAISED THEREIN INVOLVE
PURE QUESTIONS OF LAW. (p. 14, Rollo.)

The issue of jurisdiction being basis, we shall endeavor to dispose of it ahead of the other topics
raised by petitioners
Petitioner Far East maintains the position that the Court of Appeals stepped beyond the limits of its
authority when it assumed jurisdiction over the appeal filed by BPI inasmuch as said appeal raised
only the pure questions of law or whether or not the trial court erred: (1) in dismissing BPI's
complaint for lack of cause of action; (2) in finding that BPI's cause of action had prescribed; and (3)
in ruling that BPI is not entitled to summary judgment on its causes of action against Far East.
Consequently, Far East contends, BPI should have taken its case directly to this Court.
There is no dispute with respect to the fact that when an appeal raises only pure questions of law, it is
only this Court which has jurisdiction to entertain the same (Article VIII, Section 5 (2) (e),
1987 Constitution; Rule 45, Rules of Court; see also Santos, Jr. vs. Court of Appeals, 152 SCRA 378
[1987]). On the other hand, appeals involving both questions of law and fact fall within the exclusive
appellate jurisdiction of the Court of Appeals. At this point, there seems to be a need to distinguish a
question of law from a question of fact.

BPI, however, countered that its allegation of repeated demands on Far East for payment sufficiently
stated a cause of action; that within ten years from the time its cause of action accrued in 1976, it sent
written extrajudicial demands on Far East requesting payment of its due and outstanding obligations;
that within that 10-years period, it received written acknowledgments of debt from Far East; and, that
these demands for payment and acknowledgments of debt effectively interrupted and renewed the
prescriptive period. Worth noting is the fact that the acknowledgment of debt and the demands for
payment, including the affidavits of BPI's counsel who prepared the demand letter and that of BPI's
messenger who allegedly personally delivered said letters to Far East were duly annexed to BPI's
pleadings.
From the foregoing exchange of pleading, the conflicting allegations of fact by the contending parties
sprung forth. It is thus quite obvious that the controversy centered on, and the doubt arose with
respect to, the very existence of previous demands for payment allegedly made by BPI on petitioner
Far East, receipt of which was denied by the latter. This dispute or controversy inevitably raised a
question of fact. Such being the case, the appeal taken by BPI to the Court of Appeals was proper.
We now come to petitioner's first two assigned errors.

It has been held in a number of cases (Medina vs. Asistio, Jr., 191 SCRA 218 [1990]; Gan vs. Licup
Design Group, Inc., G.R. NO. 94264, July 24, 1990, En Banc, Minute Resolution; Pilar Development
Corp. vs. Intermediate Appellate Court, et al., 146 SCRA 215 [1986]; Ramos vs. Pepsi-Cola Bottling
Co., 19 SCRA 289 [1967]; Consolidated Mines, Inc. vs. Court of Tax Appeals, et al., 58 SCRA 618
[1974]), that there is a "question of law" when there is doubt or difference of opinion as to what the
law is on certain state of facts and which does not call for an examination of the probative value of
the evidence presented by the parties-litigants. On the other hand, there is a "question of fact" when
the doubt or controversy arises as to the truth or falsity of the alleged facts. Simply put, when there
is no dispute as to fact, the question of whether or not the conclusion drawn therefrom is correct is a
question of law.

The trial court's finding that BPI's claims due to prescription, can no longer prosper, is inextricably
connected with, and underpinned by, its other conclusion that BPI's allegation that it made "repeated
requests and demands for payment" is not sufficient to state a cause of action. Moreover, in its
questioned Order (Rollo, p. 88) dated June 1, 1987, the trial court held that:
Apart from the fact that the complaint failed to allege that the period of prescription
was interrupted, the phrase "repeated requests and demands for payment" is vague
and incomplete as to establish in the minds of the defendant, or to enable the Court
to draw a conclusion, that demands or acknowledgment [of debt] were made that
could have interrupted the period of prescription. (p. 88, Rollo.).

In the case at bar, BPI alleged in its complaint (Rollo, p. 42) that on various dates and for valuable
consideration, it extended to Far East several loans, evidenced by promissory notes, and credit
facilities in the form of trust receipts, and that despite repeated requests and demands for payment
thereof, Far East had failed and refused to pay. Thus BPI sought foreclosure of the chattel mortgage
securing such indebtedness.

Seemingly, therefore, the trial court believed that the interruption of the prescriptive period to
institute an action is an ULTIMATE FACT which had to be expressly and indispensably pleaded by
BPI in its complaint, and that failure to so alleged such circumstance is fatal to BPI's cause of action.

In its answer (Rollo, p. 78), Far East admitted the genuineness and due execution of the promissory
notes involved in the case, but denied BPI's allegation that repeated demands for payment were
made by BPI on it. Far East then raised the affirmative defenses of prescription and lack of cause of
action, arguing that since the promissory notes matured in 1976 while BPI filed its action to foreclose
the chattel mortgage only in 1987 (or more than 10 years from the time its cause of action accrued),
and there being no demand for payment which would interrupt the period of prescription for
instituting said action, BPI's claims have prescribed.

We believe and hold otherwise.Section 3 of Rule 6 state that a "complaint is a concise statement of
the ultimate facts constituting the plaintiff's cause or causes of action." Further elaborating thereon,
Section 1 of Rule 8 declares that every pleading, including, of course, a complaint, "shall contain in a
methodical and logical form, a plain, concise and direct statement of the ultimate facts . . . omitting
the statement of mere evidentiary facts." "Ultimate facts" are the essential and substantial facts which
either form the basis of the primary right and duty or which directly make up the wrongful acts or
omissions of the defendant (Tantuico, Jr. vs. Republic of the Phil., et al., 204 SCRA 428 [1991]),
while "evidentiary facts" are those which tend to prove or establish said ultimate facts.

What then are the ultimate facts which BPI had to allege in its complaint so as to sufficiently
establish its cause of action?Basically, a cause of action consists of three elements, namely: (1) the
legal right of the plaintiff; (2) the correlative obligation of the defendant; and (3) the act or omission
of the defendant in violation of said legal right (Nabus vs. Court of Appeals, et al., 193 SCRA 732
[1991]); Rebollido vs. Court of Appeals et al., 170 SCRA 800 [1989]). These elements are manifest
in BPI's complaint, particularly when it was therein alleged that: (1) for valuable consideration, BPI
granted several loans, evidenced by promissory notes, and extended credit facilities in the form of
trust receipts to Far East (photocopies of said notes and receipts were duly attached to the
Complaint); (2) said promissory notes and trust receipts had matured; and (3) despite repeated
requests and demands for payment thereof, Far East had failed and refused to pay.
Clearly then, the general allegation of BPI that "despite repeated requests and demands for payment,
Far East has failed to pay" is sufficient to establish BPI's cause of action. Besides, prescription is not
a cause of action; it is a defense which, having been raised, should, as correctly ruled by the Court of
Appeals (DBP vs. Ozarraga, 15 SCRA 48 [1965]), be supported by competent evidence. But even as
Far East raised the defense of prescription, BPI countered to the effect that the prescriptive period
was interrupted and renewed by written extrajudicial demands for payment and acknowledgment by
Far East of the debt.
A complaint is sufficient if it contains sufficient notice of the cause of action even though the
allegation may be vague or indefinite, for in such case, the recourse of the defendant would be to file
a motion for a bill of particulars (Ramos vs. Condez, 20 SCRA 1146 [1967]). It is indeed the better
rule that, pleadings, as well as remedial laws, should be liberally construed so that the litigants may
have ample opportunity to prove their respective claims so as to avoid possible denial of substantial
justice due to legal technicalities (Adamo, et al. vs. Intermediate Appellate Court, et al., 191 SCRA
195 [1990]).
In the case at bar, the circumstances of BPI extending loans and credits to Far East and the failure of
the latter to pay and discharge the same upon maturity are the only ultimate facts which have to be
pleaded, although the facts necessary to make the mortgage valid enforceable must be proven during
the trial (Ortiz v. Garcia, 15 Phil. 192 [1910]).
In fine, the finding of the trial court that prescription has set in is primarily premised on a
misappreciation of the sufficiency of BPI's allegation as above discussed. The records will show that
the hearing conducted by the trial court was merely pro forma and the trial judge did not sufficiently
address the issue of whether or not a demand for payment in fact made by BPI and duly received by
herein petitioner Far East.
WHEREFORE, the instant petition is hereby DENIED and the decision of the Court of Appeals
hereby AFFIRMED. No special pronouncement is made as to costs.
SO ORDERED.

JOSELITA SALITA, petitioner,

vs.
HON. DELILAH MAGTOLIS, in her capacity as Judge of the RTC, Quezon City, Br. 107, and
ERWIN ESPINOSA, respondents.
Alfredo F. Tadiar for petitioner.
Yolanda, Quisumbing-Javellana & Associates for private respondent.
BELLOSILLO, J.:
Erwin Espinosa, 32, and Joselita Salita, 22, were married at the Roman Catholic Church in Ermita,
Manila, on 25 January 1986. A year later, their union turned sour. They separated in fact in 1988.
Subsequently, Erwin sued for annulment on the ground of Joselitas psychological incapacity.
The issue before us however is not the scope nor even the interpretation of Art. 36 of the Family
Code. 1 Rather, the issue is the sufficiency of the allegations in the petition for annulment of marriage
and the subsequent bill of particulars filed in amplification of the petition.
The petition for annulment was filed before the Regional Trial Court of Quezon City on 7 January
1992. Therein it is alleged that "[s]ometime in 1987, petitioner came to realize that respondent was
psychologically incapacitated to comply with the essential marital obligations of their marriage,
which incapacity existed at the time of the marriage although the same became manifest only
thereafter." 2 Dissatisfied with the allegation in the petition, Joselita moved for a bill of particulars
which the trial court granted. 3 Subsequently, in his Bill of Particulars, Edwin specified that
. . . at the time of their marriage, respondent (Joselita Salita) was psychologically
incapacitated to comply with the essential marital obligations of their marriage in
that she was unable to understand and accept the demands made by his profession
that of a newly qualified Doctor of Medicine upon petitioners time and
efforts so that she frequently complained of his lack of attention to her even to her
mother, whose intervention caused petitioner to lose his job.
Still Joselita was not contented with the Bill of Particulars. She argued that the "assertion (in the Bill
of Particulars) is a statement of legal conclusion made by petitioners counsel and not an averment
of ultimate facts, as required by the Rules of Court, from which such a conclusion may properly be
inferred . . . ." 4 But finding the questioned Bill of Particulars adequate, the trial court issued an order
upholding its sufficiency and directing Joselita to file her responsive pleading.
Joselita was not convinced. She filed a petition for certiorari with us. However, we referred her
petition to the Court of Appeals for resolution.
On 21 July 1992, the Court of Appeals denied due course to her petition thus
In the case under consideration, Espinosa has amplified Salitas alleged
psychological incapacity in his bill of particulars . . .
In our view, the aforesaid specification more than satisfies the Rules requirement
that a complaint must allege the ultimate facts constituting a plaintiffs cause of

action. To require more details thereof, to insist on a specification of Salitas

particular conduct or behavior with the corresponding circumstances of time, place
and person indicating her alleged psychological incapacity would be to ask for
information on evidentiary matters. To obtain evidentiary details, Salita may avail
herself of the different modes of discovery provided by the Rules of Court
(Rules 24 to 28).
Whether Espinosas averments in his bill of particulars constitute psychological
incapacity in the contemplation of the Family Code is a question that may be
resolved in a motion to dismiss or after trial on the merits of the case, not in a
motion for bill of particulars. And certainly, that matter cannot be resolved in the
present petition. 5
Hence, the instant petition for review on certiorari filed by Joselita Salita questioning the Resolution
of the Court of Appeals denying due course to her petition.
Petitioner insists that the allegations in the Bill of Particulars constitute a legal conclusion, not an
averment of facts, and fail to point out the specific essential marital obligations she allegedly was not
able to perform, and thus render the Bill of Particulars insufficient if not irrelevant to her husbands
cause of action. She rationalizes that her insistence on the specification of her particular conduct or
behavior with the corresponding circumstances of time, place and person does not call for
information on evidentiary matters because without these details she cannot adequately and
intelligently prepare her answer to the petition.
Private respondent on the other hand believes that his allegations in the Bill of Particulars constitute
the ultimate facts which the Rules of Court requires at this point. He defines ultimate facts as
. . . important and substantial facts which either directly form the basis of the
primary right and duty, or which directly make upon the wrongful acts or omissions
of the defendant. The term does not refer to the details of probative matter or
particulars of evidence by which these material elements are to be established. It
refers to principal, determinate facts upon the existence of which the entire cause of
action rests. 6
Ultimate facts are conclusions drawn from intermediate and evidentiary facts, or
allegations of mixed law and fact; they are conclusions from reflection and natural
reasoning on evidentiary fact. The ultimate facts which are to be pleaded are the
issuable, constitutive, or traversible facts essential to the statement of the cause of
action; the facts which the evidence on the trial will prove, and not the evidence
which will be required to prove the existence of those facts . . . 7
Private respondent further argues that "[c]onclusions of law and evidentiary matters need not be
stated in the complaint. The rules of pleading limit the statement of the cause of action only to such
operative facts as would give rise to the right of action of the plaintiff to obtain relief against the

wrongdoer. The details of probative matter or particulars of evidence, statements of law, inferences
and arguments need not be stated." 8
In a nutshell, the ultimate question is whether the Bill of Particulars submitted by herein respondent
is of sufficient definiteness or particularity as to enable herein petitioner to properly prepare her
responsive pleading or for trial.
A complaint only needs to state the "ultimate facts constituting the plaintiffs cause or causes of
action." 9 Ultimate facts has been defined as "those facts which the expected evidence will
support." 10 As stated by private respondent, "[t]he term does not refer to the details of probative
matter or particulars of evidence by which these material elements are to be established." It refers to
"the facts which the evidence on the trial will prove, and not the evidence which will be required to
prove the existence of those facts." And a motion for bill of particulars will not be granted if the
complaint, while not very definite, nonetheless already states a sufficient cause of action. 11 A motion
for bill of particulars may not call for matters which should form part of the proof of the complaint
upon trial. Such information may be obtained by other means. 12
We sustain the view of respondent Court of Appeals that the Bill of Particulars filed by private
respondent is sufficient to state a cause of action, and to require more details from private respondent
would be to ask for information on evidentiary matters. Indeed, petitioner has already been
adequately apprised of private respondents cause of action against her thus
. . . . (she) was psychologically incapacitated to comply with the essential marital
obligations of their marriage in that she was unable to understand and accept the
demands made by his profession that of a newly qualified Doctor of Medicine
upon petitioners time and efforts so that she frequently complained of his lack of
attention to her even to her mother, whose intervention caused petitioner to lose his
job.
On the basis of the aforequoted allegations, it is evident that petitioner can already prepare her
responsive pleading or for trial. Private respondent has already alleged that "she (petitioner) was
unable to understand and accept the demands made by his profession . . . upon his time and
efforts . . . " Certainly, she can respond to this. To demand for more details would indeed be asking
for information on evidentiary facts facts necessary to prove essential or ultimate facts. 13 For sure,
the additional facts called for by petitioner regarding her particular acts or omissions would be
evidentiary, and to obtain evidentiary matters is not the function of a motion for bill of particulars. 14
We distinguish the instant case from Tantuico, Jr. v. Republic 15 where we said
Furthermore, the particulars prayed for such as names of persons, names of
corporations, dates, amounts involved, a specification of property for identification
purposes, the particular transactions involving withdrawals and disbursements, and
a statement of other material facts as would support the conclusions and inferences
in the complaint, are not evidentiary in nature. On the contrary, those particulars are
material facts that should be clearly and definitely averred in the complaint in order

that the defendant may, in fairness, be informed of the claims made against him to
the end that he may be prepared to meet the issues at the trial.
The aforementioned pronouncement cannot apply to the instant case. That ruling involves alleged
"misappropriation and theft of public funds, plunder of the nations wealth, extortion, blackmail,
bribery, embezzlement, and other acts of corruption, betrayal of public trust and brazen abuse of
power." The respondents therein pray for reconveyance, reversion, accounting, restitution and
damages. There, the alleged illicit acts should be fully documented. The instant case, on the other
hand, concerns marital relationship. It would be unreasonable, if not unfeeling, to document each and
every circumstance of marital disagreement. True, the complaining spouse will have to prove his
case, but that will not come until trial begins.
Consequently, we have no other recourse but to order the immediate resumption of the annulment
proceeding which have already been delayed for more than two years now, even before it could reach
its trial stage. Whether petitioner is psychologically incapacitated should be immediately determined.
There is no point in unreasonably delaying the resolution of the petition and prolonging the agony of
the wedded couple who after coming out from a storm still have the right to a renewed blissful life
either alone or in the company of each other.
A word on Art. 36 of the Family Code. 16 We do not see the need to define or limit the scope of the
provision. Not in this case, at least. For, we are not called upon to do so, the actual controversy being
the sufficiency of the bill of particulars. To interpret the provision at this juncture would be to give
an obiter dictum which is ill-timed. Besides, it appears that petitioner in her memorandum has
demonstrated a good grasp of what Art. 36 actually covers. Suffice it to say that Mme. Justice
Sempio-Diy, formerly of the Court of Appeals and a member of the Civil Code Revision Committee
that drafted the Family code, explains
The Committee did not give any examples of psychological incapacity for fear that
the giving of examples would limit the applicability of the provision under the
principle of ejusdem generis. Rather, the Committee would like the judge to
interpret the provision on a case-to-case basis, guided by experience, the findings of
experts and researchers in psychological disciplines, and by decisions of church
tribunals which, although not binding on the civil courts, may be given persuasive
effect since the provision was taken from Canon Law. 17
WHEREFORE, there being no reversible error, the instant petition is DENIED and the questioned
Resolution of respondent Court of Appeals dated 21 July 1992 is AFFIRMED.
SO ORDERED.

TERESITA SALCEDO-ORTANEZ, petitioner,

vs.

COURT OF APPEALS, HON. ROMEO F. ZAMORA, Presiding Judge, Br. 94, Regional Trial
Court of Quezon City and RAFAEL S. ORTANEZ, respondents.
Oscar A. Inocentes & Associates Law Office for petitioner.
Efren A. Santos for private respondent.
PADILLA, J.:
This is a petition for review under Rule 45 of the Rules of Court which seeks to reverse the
decision * of respondent Court of Appeals in CA-G. R. SP No. 28545 entitled "Teresita SalcedoOrtanez versus Hon. Romeo F. Zamora, Presiding Judge, Br. 94, Regional Trial Court of Quezon
City and Rafael S. Ortanez".
The relevant facts of the case are as follows:
On 2 May 1990, private respondent Rafael S. Ortanez filed with the Regional Trial Court of Quezon
City a complaint for annulment of marriage with damages against petitioner Teresita SalcedoOrtanez, on grounds of lack of marriage license and/or psychological incapacity of the petitioner. The
complaint was docketed as Civil Case No. Q-90-5360 and raffled to Branch 94, RTC of Quezon City
presided over by respondent Judge Romeo F. Zamora.
Private respondent, after presenting his evidence, orally formally offered in evidence Exhibits "A" to
"M".
Among the exhibits offered by private respondent were three (3) cassette tapes of alleged telephone
conversations between petitioner and unidentified persons.
Petitioner submitted her Objection/Comment to private respondent's oral offer of evidence on 9 June
1992; on the same day, the trial court admitted all of private respondent's offered evidence.
A motion for reconsideration from petitioner was denied on 23 June 1992.
A petition for certiorari was then filed by petitioner in the Court of Appeals assailing the admission
in evidence of the aforementioned cassette tapes.
On 10 June 1993, the Court of Appeals rendered judgment which is the subject of the present
petition, which in part reads:
It is much too obvious that the petition will have to fail, for two basic reasons:
(1) Tape recordings are not inadmissible per se. They and any other variant thereof
can be admitted in evidence for certain purposes, depending on how they are
presented and offered and on how the trial judge utilizes them in the interest of truth
and fairness and the even handed administration of justice.
(2) A petition for certiorari is notoriously inappropriate to rectify a supposed error
in admitting evidence adduced during trial. The ruling on admissibility is
interlocutory; neither does it impinge on jurisdiction. If it is erroneous, the ruling
should be questioned in the appeal from the judgment on the merits and not through
the special civil action of certiorari. The error, assuming gratuitously that it exists,
cannot be anymore than an error of law, properly correctible by appeal and not

by certiorari. Otherwise, we will have the sorry spectacle of a case being subject of
a counterproductive "ping-pong" to and from the appellate court as often as a trial
court is perceived to have made an error in any of its rulings with respect to
evidentiary matters in the course of trial. This we cannot sanction.
WHEREFORE, the petition for certiorari being devoid of merit, is hereby
DISMISSED. 1
From this adverse judgment, petitioner filed the present petition for review, stating:
Grounds for Allowance of the Petition
10. The decision of respondent [Court of Appeals] has no basis in law nor previous
decision of the Supreme Court.
10.1 In affirming the questioned order of respondent judge, the
Court of Appeals has decided a question of substance not
theretofore determined by the Supreme Court as the question of
admissibility in evidence of tape recordings has not, thus far, been
addressed and decided squarely by the Supreme Court.
11. In affirming the questioned order of respondent judge, the Court of Appeals has
likewise rendered a decision in a way not in accord with law and with applicable
decisions of the Supreme Court.
11.1 Although the questioned order is interlocutory in nature, the
same can still be [the] subject of a petition for certiorari. 2
The main issue to be resolved is whether or not the remedy of certiorari under Rule 65 of the Rules
of Court was properly availed of by the petitioner in the Court of Appeals.
The extraordinary writ of certiorari is generally not available to challenge an interlocutory order of a
trial court. The proper remedy in such cases is an ordinary appeal from an adverse judgment,
incorporating in said appeal the grounds for assailing the interlocutory order.
However, where the assailed interlocutory order is patently erroneous and the remedy of appeal
would not afford adequate and expeditious relief, the Court may allow certiorari as a mode of
redress. 3
In the present case, the trial court issued the assailed order admitting all of the evidence offered by
private respondent, including tape recordings of telephone conversations of petitioner with

unidentified persons. These tape recordings were made and obtained when private respondent
allowed his friends from the military to wire tap his home telephone. 4
Rep. Act No. 4200 entitled "An Act to Prohibit and Penalize Wire Tapping and Other Related
Violations of the Privacy of Communication, and for other purposes" expressly makes such tape
recordings inadmissible in evidence. The relevant provisions of Rep. Act No. 4200 are as follows:
Sec. 1. It shall be unlawful for any person, not being authorized by all the
parties to any private communication or spoken word, to tap any wire or
cable, or by using any other device or arrangement, to secretly overhear,
intercept, or record such communication or spoken word by using a device
commonly known as a dictaphone or dictagraph or detectaphone or walkietalkie or tape-recorder, or however otherwise described. . . .
Sec. 4. Any communication or spoken word, or the existence, contents,
substance, purport, or meaning of the same or any part thereof, or any
information therein contained, obtained or secured by any person in
violation of the preceding sections of this Act shall not be admissible in
evidence in any judicial, quasi-judicial, legislative or administrative hearing
or investigation.
Clearly, respondents trial court and Court of Appeals failed to consider the afore-quoted provisions of
the law in admitting in evidence the cassette tapes in question. Absent a clear showing that both
parties to the telephone conversations allowed the recording of the same, the inadmissibility of the
subject tapes is mandatory under Rep. Act No. 4200.
Additionally, it should be mentioned that the above-mentioned Republic Act in Section 2 thereof
imposes a penalty of imprisonment of not less than six (6) months and up to six (6) years for
violation of said Act. 5
We need not address the other arguments raised by the parties, involving the applicability of
American jurisprudence, having arrived at the conclusion that the subject cassette tapes are
inadmissible in evidence under Philippine law.
WHEREFORE, the decision of the Court of Appeals in CA-G. R. SP No. 28545 is hereby SET
ASIDE. The subject cassette tapes are declared inadmissible in evidence.
SO ORDERED.